FROM: U.S. DEPARTMENT OF JUSTICE
Investigation Has Yielded 12 Guilty Pleas
WASHINGTON — A financial investor who purchased municipal tax liens pleaded guilty today for his role in a conspiracy to rig bids for the sale of tax liens auctioned by municipalities in New Jersey, the Department of Justice announced.
A felony charge was filed today in U.S. District Court for the District of New Jersey in Newark, against Norman T. Remick, of Barnegat, N.J. According to the charge, from in or about the beginning of 2007 until approximately February 2009, Remick participated in a conspiracy to rig bids at auctions for the sale of municipal tax liens in New Jersey by agreeing to allocate among certain bidders which liens each would bid on. The department said that Remick proceeded to submit bids in accordance with the agreements and purchased tax liens at collusive and non-competitive interest rates.
"The conspirators illegally met and engaged in anticompetitive discussions to allocate bids amongst themselves at tax lien auctions in New Jersey, depriving distressed homeowners of competitive interest rates at a time when they most needed them," said Scott D. Hammond, Deputy Assistant Attorney General for the Antitrust Division's criminal enforcement program. "Prosecuting these types of bid-rigging schemes remains a top priority for the division."
The department said that the primary purpose of the conspiracy was to suppress and restrain competition in order to obtain selected municipal tax liens offered at public auctions at non-competitive interest rates. When the owner of real property fails to pay taxes on that property, the municipality in which the property is located may attach a lien for the amount of the unpaid taxes. If the taxes remain unpaid after a waiting period, the lien may be sold at auction. State law requires that investors bid on the interest rate delinquent property owners will pay upon redemption. By law, the bid opens at 18 percent interest and, through a competitive bidding process, can be driven down to zero percent. If a lien remains unpaid after a certain period of time, the investor who purchased the lien may begin foreclosure proceedings against the property to which the lien is attached.
According to the court documents, Remick was involved in a conspiracy with others not to bid against one another at municipal tax lien auctions in New Jersey. Since the conspiracy permitted the conspirators to purchase tax liens with limited competition, each conspirator was able to obtain liens that earned a higher interest rate. Property owners were, therefore, made to pay higher interest on their tax debts than they would have paid had their liens been purchased through open and honest competition, the department said.
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act violation may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than the $1 million statutory maximum.
Today's plea is the 12th guilty plea resulting from an ongoing investigation into bid rigging or fraud related to municipal tax lien auctions. Eight individuals – Isadore H. May, Richard J. Pisciotta Jr., William A. Collins, Robert W. Stein, David M. Farber, Robert E. Rothman, Stephen E. Hruby and David Butler – and three companies – DSBD LLC, Crusader Servicing Corp. and Mercer S.M.E. Inc. – have previously pleaded guilty as part of this investigation.
Today's charge was brought in connection with the President's Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys' offices and state and local partners, it's the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants.
Tuesday, April 30, 2013
Monday, April 29, 2013
DETROIT HEALTH CARE COMPANY EMPLOYEE PLEADS GUILTY FOR ROLE IN $24 MILLION FRAUD
FROM: U.S. DEPARTMENT OF JUSTICE
Wednesday, April 24, 2013
Detroit Home Health Company Employee Pleads Guilty for Role in Medicare Fraud Scheme
An employee of Detroit medical service companies that fabricated patient visit notes and other documents as part of a $24 million home health care fraud scheme pleaded guilty today for her role in the conspiracy, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade, Special Agent in Charge Robert D. Foley III of the FBI’s Detroit Field Office and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Chicago Regional Office.
Dana Sharma, 30, of Detroit, pleaded guilty before U.S. District Judge Denise Hood in the Eastern District of Michigan to one count of conspiracy to commit health care fraud.
According to court documents, Sharma worked at purported home health companies, including First Choice Home Health Care Services Inc. and Reliance Home Care LLC, where she and other conspirators agreed to submit false and fraudulent claims to Medicare for home health services. Court documents reveal that, among other things, Sharma organized and maintained company patient files, knowing that these files contained falsified patient visit notes that created the false impression that home health care had been provided to patients. Sharma admitted that she knew that these documents would be used by these companies to submit claims to Medicare for home health services that were not medically necessary and/or not provided.
Court documents allege that between January 2007 and May 2012, Sharma’s conduct caused home health companies to submit claims to Medicare for services that were not medically necessary and/or not provided, which in turn caused Medicare to pay these companies approximately $923,286.
At sentencing, scheduled for Aug. 1, 2013, Sharma faces a maximum penalty of 10 years in prison and a $250,000 fine.
This case is being prosecuted by Trial Attorney William G. Kanellis and Deputy Chief Gejaa Gobena of the Criminal Division’s Fraud Section. It 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 its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
Wednesday, April 24, 2013
Detroit Home Health Company Employee Pleads Guilty for Role in Medicare Fraud Scheme
An employee of Detroit medical service companies that fabricated patient visit notes and other documents as part of a $24 million home health care fraud scheme pleaded guilty today for her role in the conspiracy, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade, Special Agent in Charge Robert D. Foley III of the FBI’s Detroit Field Office and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Chicago Regional Office.
Dana Sharma, 30, of Detroit, pleaded guilty before U.S. District Judge Denise Hood in the Eastern District of Michigan to one count of conspiracy to commit health care fraud.
According to court documents, Sharma worked at purported home health companies, including First Choice Home Health Care Services Inc. and Reliance Home Care LLC, where she and other conspirators agreed to submit false and fraudulent claims to Medicare for home health services. Court documents reveal that, among other things, Sharma organized and maintained company patient files, knowing that these files contained falsified patient visit notes that created the false impression that home health care had been provided to patients. Sharma admitted that she knew that these documents would be used by these companies to submit claims to Medicare for home health services that were not medically necessary and/or not provided.
Court documents allege that between January 2007 and May 2012, Sharma’s conduct caused home health companies to submit claims to Medicare for services that were not medically necessary and/or not provided, which in turn caused Medicare to pay these companies approximately $923,286.
At sentencing, scheduled for Aug. 1, 2013, Sharma faces a maximum penalty of 10 years in prison and a $250,000 fine.
This case is being prosecuted by Trial Attorney William G. Kanellis and Deputy Chief Gejaa Gobena of the Criminal Division’s Fraud Section. It 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 its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
Sunday, April 28, 2013
MENTAL HEALTH CARE COMPANY SUPERVISOR CONVICTED FOR ROLE IN $63+ MILLION FRAUD
FROM: U.S. DEPARTMENT OF DEFENSE
Thursday, April 25, 2013
Supervisor of $63 Million Health Care Fraud Scheme Convicted
A federal jury today convicted a Miami-area supervisor of a mental health care company, Health Care Solutions Network (HCSN), for helping to orchestrate a fraud scheme that crossed state lines and that resulted in the submission of more than $63 million in fraudulent claims to Medicare and Florida Medicaid.
The announcement was made by Acting Assistant Attorney General Mythili Raman of the Justice Department's Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Michael B. Steinbach, Special Agent in Charge of the FBI's Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigation’s Miami office.
After a five-day trial, a jury in the Southern District of Florida found Wondera Eason, 51, guilty of conspiracy to commit health care fraud. Sentencing is scheduled for July 8, 2013.
Eason was employed as the Director of Medical Records at HCSN’s Partial Hospitalization Program (PHP). A PHP is a form of intensive treatment for severe mental illness. In Florida, HCSN operated community mental health centers at two locations. After stealing millions from Medicare and Medicaid in Florida, HCSN’s owner, Armando Gonzalez, exported the scheme to North Carolina, opening a third HCSN location in Hendersonville.
Evidence at trial showed that at all three locations, Eason, a certified medical records technician, oversaw the alteration, fabrication, and forgery of thousands of documents, which purported to support the fraudulent claims HCSN submitted to Medicare and Florida Medicaid. Many of these medical records were created weeks or months after the patients were admitted to HCSN facilities in Florida for purported PHP treatment and were utilized to support false and fraudulent billing to government sponsored health care benefit programs, including Medicare and Florida Medicaid. Eason directed therapists to fabricate documents, and she also forged the signature of therapists and others on documents that she was in charge of maintaining. Eason interacted with Medicare and Medicaid auditors, providing them with false and fraudulent documents, while certifying the documents were accurate.
The "therapy" at HCSN oftentimes consisted of nothing more than patients watching Disney movies, playing bingo and having barbeques. Eason directed therapists to remove any references to these recreational activities in the medical records.
According to evidence at trial, Eason was aware that HCSN in Florida paid illegal kickbacks to owners and operators of Miami-Dade County Assisted Living Facilities (ALF) in exchange for patient referral information to be used to submit false and fraudulent claims to Medicare and Medicaid. Eason also knew that many of the ALF referral patients were ineligible for PHP services because many patients suffered from mental retardation, dementia and Alzheimer's disease.
From 2004 through 2011, HCSN billed Medicare and the Florida Medicaid program approximately $63 million for purported mental health services.
Fifteen defendants have been charged for their alleged roles in the HCSN health care fraud scheme, and 12 defendants have pleaded guilty. On Monday, Feb. 25, 2013, Gonzalez was sentenced to serve 168 months in prison for his role in the scheme. Alleged co-conspirators Alina Feas and Lisset Palmero are scheduled for trial on June 3, 2013. Defendants are presumed innocent until proven guilty at trial.
This case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division's Fraud Section and the U.S. Attorney's Office for the Southern District of Florida. This case was prosecuted by Trial Attorneys Allan J. Medina and Steven Kim, former Special Trial Attorney William Parente and Deputy Chief Benjamin D. Singer of the Criminal Division's Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
Thursday, April 25, 2013
Supervisor of $63 Million Health Care Fraud Scheme Convicted
A federal jury today convicted a Miami-area supervisor of a mental health care company, Health Care Solutions Network (HCSN), for helping to orchestrate a fraud scheme that crossed state lines and that resulted in the submission of more than $63 million in fraudulent claims to Medicare and Florida Medicaid.
The announcement was made by Acting Assistant Attorney General Mythili Raman of the Justice Department's Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Michael B. Steinbach, Special Agent in Charge of the FBI's Miami Field Office; and Special Agent in Charge Christopher B. Dennis of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigation’s Miami office.
After a five-day trial, a jury in the Southern District of Florida found Wondera Eason, 51, guilty of conspiracy to commit health care fraud. Sentencing is scheduled for July 8, 2013.
Eason was employed as the Director of Medical Records at HCSN’s Partial Hospitalization Program (PHP). A PHP is a form of intensive treatment for severe mental illness. In Florida, HCSN operated community mental health centers at two locations. After stealing millions from Medicare and Medicaid in Florida, HCSN’s owner, Armando Gonzalez, exported the scheme to North Carolina, opening a third HCSN location in Hendersonville.
Evidence at trial showed that at all three locations, Eason, a certified medical records technician, oversaw the alteration, fabrication, and forgery of thousands of documents, which purported to support the fraudulent claims HCSN submitted to Medicare and Florida Medicaid. Many of these medical records were created weeks or months after the patients were admitted to HCSN facilities in Florida for purported PHP treatment and were utilized to support false and fraudulent billing to government sponsored health care benefit programs, including Medicare and Florida Medicaid. Eason directed therapists to fabricate documents, and she also forged the signature of therapists and others on documents that she was in charge of maintaining. Eason interacted with Medicare and Medicaid auditors, providing them with false and fraudulent documents, while certifying the documents were accurate.
The "therapy" at HCSN oftentimes consisted of nothing more than patients watching Disney movies, playing bingo and having barbeques. Eason directed therapists to remove any references to these recreational activities in the medical records.
According to evidence at trial, Eason was aware that HCSN in Florida paid illegal kickbacks to owners and operators of Miami-Dade County Assisted Living Facilities (ALF) in exchange for patient referral information to be used to submit false and fraudulent claims to Medicare and Medicaid. Eason also knew that many of the ALF referral patients were ineligible for PHP services because many patients suffered from mental retardation, dementia and Alzheimer's disease.
From 2004 through 2011, HCSN billed Medicare and the Florida Medicaid program approximately $63 million for purported mental health services.
Fifteen defendants have been charged for their alleged roles in the HCSN health care fraud scheme, and 12 defendants have pleaded guilty. On Monday, Feb. 25, 2013, Gonzalez was sentenced to serve 168 months in prison for his role in the scheme. Alleged co-conspirators Alina Feas and Lisset Palmero are scheduled for trial on June 3, 2013. Defendants are presumed innocent until proven guilty at trial.
This case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division's Fraud Section and the U.S. Attorney's Office for the Southern District of Florida. This case was prosecuted by Trial Attorneys Allan J. Medina and Steven Kim, former Special Trial Attorney William Parente and Deputy Chief Benjamin D. Singer of the Criminal Division's Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
Saturday, April 27, 2013
THREE FOUND GUILTY FOR ROLES IN $1.5 MILLION MEDICARE FRAUD
FROM: U.S. DEPARTMENT OF JUSTICE
Thursday, April 25, 2013
Southern California Physician and Two Co-Conspirators Found Guilty for Roles in $1.5 Million Medicare Fraud Scheme
A Southern California physician, a durable medical equipment (DME) supply company employee and a health care professional were found guilty late yesterday by a federal jury in Los Angeles for their roles in a $1.5 million Medicare fraud scheme, announced Acting Assistant Attorney General Mythili Raman of the Criminal Division; U.S. Attorney for the Central District of California André Birotte Jr.; Bill L. Lewis, Assistant Director in Charge of the FBI’s Los Angeles Field Office; and Glenn R. Ferry, Special Agent in Charge of the Los Angeles Region of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG).
Godwin Onyeabor, 49, of Ontario, Calif., Sri J. Wijegunaratne, 58, of Anaheim, Calif., and Heidi Morishita, 48, of Valencia, Calif., were each found guilty in U.S. District Court in the Central District of California of one count of conspiracy to pay and receive kickbacks. Wijegunaratne was also found guilty of conspiracy to commit health care fraud and six substantive counts of health care fraud. Onyeabor was also found guilty of conspiracy to commit health care fraud and 11 substantive counts of health care fraud.
The trial evidence showed that between January 2007 and February 2012, Onyeabor, an officer at Fendih Medical Supply Inc., a DME supply company located in San Bernadino, Calif., and others paid cash kickbacks to Wijegunaratne, a physician, and Morishita for fraudulent prescriptions for DME, including power wheelchairs. The evidence showed that Wijegunaratne wrote prescriptions for power wheelchairs and other DME that Medicare beneficiaries did not need and sometimes never used. After receiving prescriptions from Wijegunaratne and Morishita, Onyeabor and others used the prescriptions to fraudulently bill Medicare for the medically unnecessary DME.
At trial, several Medicare beneficiaries testified that they were lured to medical clinics with the promise of free items such as vitamins and juice, only to receive power wheelchairs that they did not need and did not want. The beneficiaries further testified that their attempts to reject delivery of the power wheelchairs from Onyeabor’s supply company were unsuccessful.
As a result of this fraud scheme, Onyeabor, Wijegunaratne and others submitted and caused the submission of approximately $1.5 million in false and fraudulent claims to Medicare, and received almost $1 million on those claims.
At sentencing, scheduled for Sept. 9, 2013, Onyeabor, Wijegunaratne and Morishita face a maximum penalty of 10 years in prison and a $250,000 fine for each count.
The case is being prosecuted by Assistant Chief Benton Curtis and Trial Attorneys Fred Medick and Alexander Porter of the Criminal Division’s Fraud Section. The case was investigated by the FBI and the Los Angeles Region of HHS-OIG.
The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.
Thursday, April 25, 2013
Southern California Physician and Two Co-Conspirators Found Guilty for Roles in $1.5 Million Medicare Fraud Scheme
A Southern California physician, a durable medical equipment (DME) supply company employee and a health care professional were found guilty late yesterday by a federal jury in Los Angeles for their roles in a $1.5 million Medicare fraud scheme, announced Acting Assistant Attorney General Mythili Raman of the Criminal Division; U.S. Attorney for the Central District of California André Birotte Jr.; Bill L. Lewis, Assistant Director in Charge of the FBI’s Los Angeles Field Office; and Glenn R. Ferry, Special Agent in Charge of the Los Angeles Region of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG).
Godwin Onyeabor, 49, of Ontario, Calif., Sri J. Wijegunaratne, 58, of Anaheim, Calif., and Heidi Morishita, 48, of Valencia, Calif., were each found guilty in U.S. District Court in the Central District of California of one count of conspiracy to pay and receive kickbacks. Wijegunaratne was also found guilty of conspiracy to commit health care fraud and six substantive counts of health care fraud. Onyeabor was also found guilty of conspiracy to commit health care fraud and 11 substantive counts of health care fraud.
The trial evidence showed that between January 2007 and February 2012, Onyeabor, an officer at Fendih Medical Supply Inc., a DME supply company located in San Bernadino, Calif., and others paid cash kickbacks to Wijegunaratne, a physician, and Morishita for fraudulent prescriptions for DME, including power wheelchairs. The evidence showed that Wijegunaratne wrote prescriptions for power wheelchairs and other DME that Medicare beneficiaries did not need and sometimes never used. After receiving prescriptions from Wijegunaratne and Morishita, Onyeabor and others used the prescriptions to fraudulently bill Medicare for the medically unnecessary DME.
At trial, several Medicare beneficiaries testified that they were lured to medical clinics with the promise of free items such as vitamins and juice, only to receive power wheelchairs that they did not need and did not want. The beneficiaries further testified that their attempts to reject delivery of the power wheelchairs from Onyeabor’s supply company were unsuccessful.
As a result of this fraud scheme, Onyeabor, Wijegunaratne and others submitted and caused the submission of approximately $1.5 million in false and fraudulent claims to Medicare, and received almost $1 million on those claims.
At sentencing, scheduled for Sept. 9, 2013, Onyeabor, Wijegunaratne and Morishita face a maximum penalty of 10 years in prison and a $250,000 fine for each count.
The case is being prosecuted by Assistant Chief Benton Curtis and Trial Attorneys Fred Medick and Alexander Porter of the Criminal Division’s Fraud Section. The case was investigated by the FBI and the Los Angeles Region of HHS-OIG.
The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.
Friday, April 26, 2013
MILITARY USES NEW VICTIM INTERVIEW TECHNIQUES TO BETTER PROSECUTE SEXUAL ASSAULT CASES
FROM: U.S. DEPARTMENT OF DEFENSE
New Approach Helps Sexual Assault Victims Recall Details
By Terri Moon Cronk
American Forces Press Service
BALTIMORE, April 10, 2013 – A new approach to interviewing sexual assault victims is gleaning more information about the crimes and leading to greater numbers of offender prosecutions.
At the End Violence Against Women international conference here last week, Russell Strand, chief of the behavioral sciences education and training division for the Army’s Military Police School at Fort Leonard Wood, Mo., spoke with American Forces Press Service about the new Defense Department-backed procedure to investigate sexual assaults.
Calling sexual assault "a secret crime," Strand said the experience for a victim is the "most embarrassing, intimate, life-changing, traumatic thing that can happen to a person." Aside from a murder, he added, he doesn’t know of anything that’s "more debilitating and earth-shattering" than a sexual assault.
In 2011, nearly 3,200 sexual assaults were reported in the military, but Defense Department officials say the number of sexual assaults each year is closer to 19,000, based on anonymous surveys of active-duty service members. Officials also noted that only 1,500 of those cases came up for disciplinary review.
Because law enforcement investigations are designed more for witnesses rather than victims, Strand said, he developed the forensic experiential trauma interview as a way to interview victims without making them relive the assault.
Through neuroscience research, he said, he found that part of the forefront of the brain shuts down or is slow to recall key parts of a trauma during an attack. But a primitive part of the brain stem almost instantly records the event accurately, he said.
With that scientific information, Strand said, he tried the law enforcement "debriefing" approach on sexual assault victims by gaining their trust and talking about how they felt, rather than asking leading questions, such as "What happened?"
"We show genuine empathy, and say things such as, ‘I’m sorry that happened to you,’" Strand explained. "The second thing we say is, ‘Help me understand,’ and ‘What are you able to remember about your experience?’"
Strand said Criminal Investigation Division agents and other trained military investigators then stop questioning and sit back to listen to the victim’s recollection.
Rather than asking about the attack in a chronological order, Strand said, he lets victims go in any direction they want, because that aligns with how they’ve memorized it.
Investigators then put the assault into a sequence of chronological events, he added.
"We want to get to their memories, so we ask about the sights, sounds, smells, tastes and their feelings," Strand said.
Through this approach, he said, investigators want to look for evidence of trauma and the absence of consent in a sexual assault. Working with the senses is a "powerful" technique that triggers memories the victims don’t realize they could recall, he noted.
Once the psychophysiological evidence is gathered, Strand said, the investigator can then ask traditional questions while the victim’s barriers are relaxed, such as when, where and how the assault happened.
Since 2009, more than 700 special agents and prosecutors from each branch of the military have taken forensic experiential trauma interview training, and 500 more are scheduled to complete the course by the end of September, Strand said. He also said DOD has funded more than 400 seats for the FETI special victims’ unit course through fiscal year 2017.
Strand said his goal through FETI is to bring the military prevalence rates down for victims -- both men and women -- while making sure that cultural change occurs regarding sexual assault. It might take five to 10 years for the prevalence rates to decrease and he expects reporting rates to increase, he added.
"What we want victims to know is they can be confident we are working really hard to understand what they’ve gone through, to understand their experience and help them remember [it] in the most natural, scientific way," Strand said.
Strand said he also wants sexual offenders to know that law enforcement investigations of sexual assault have become much more sophisticated in identifying their behaviors, and that the crime is now investigated in a manner in which it never has been before. "They are at much greater risk of being caught than they were five or 10 years ago," he added.
With DOD backing and collaborating with the civilian sector, Strand said, "we want to lead the nation, and I think other countries are looking at us to get this right."
"And we have the capability to do that," he added.
New Approach Helps Sexual Assault Victims Recall Details
By Terri Moon Cronk
American Forces Press Service
BALTIMORE, April 10, 2013 – A new approach to interviewing sexual assault victims is gleaning more information about the crimes and leading to greater numbers of offender prosecutions.
At the End Violence Against Women international conference here last week, Russell Strand, chief of the behavioral sciences education and training division for the Army’s Military Police School at Fort Leonard Wood, Mo., spoke with American Forces Press Service about the new Defense Department-backed procedure to investigate sexual assaults.
Calling sexual assault "a secret crime," Strand said the experience for a victim is the "most embarrassing, intimate, life-changing, traumatic thing that can happen to a person." Aside from a murder, he added, he doesn’t know of anything that’s "more debilitating and earth-shattering" than a sexual assault.
In 2011, nearly 3,200 sexual assaults were reported in the military, but Defense Department officials say the number of sexual assaults each year is closer to 19,000, based on anonymous surveys of active-duty service members. Officials also noted that only 1,500 of those cases came up for disciplinary review.
Because law enforcement investigations are designed more for witnesses rather than victims, Strand said, he developed the forensic experiential trauma interview as a way to interview victims without making them relive the assault.
Through neuroscience research, he said, he found that part of the forefront of the brain shuts down or is slow to recall key parts of a trauma during an attack. But a primitive part of the brain stem almost instantly records the event accurately, he said.
With that scientific information, Strand said, he tried the law enforcement "debriefing" approach on sexual assault victims by gaining their trust and talking about how they felt, rather than asking leading questions, such as "What happened?"
"We show genuine empathy, and say things such as, ‘I’m sorry that happened to you,’" Strand explained. "The second thing we say is, ‘Help me understand,’ and ‘What are you able to remember about your experience?’"
Strand said Criminal Investigation Division agents and other trained military investigators then stop questioning and sit back to listen to the victim’s recollection.
Rather than asking about the attack in a chronological order, Strand said, he lets victims go in any direction they want, because that aligns with how they’ve memorized it.
Investigators then put the assault into a sequence of chronological events, he added.
"We want to get to their memories, so we ask about the sights, sounds, smells, tastes and their feelings," Strand said.
Through this approach, he said, investigators want to look for evidence of trauma and the absence of consent in a sexual assault. Working with the senses is a "powerful" technique that triggers memories the victims don’t realize they could recall, he noted.
Once the psychophysiological evidence is gathered, Strand said, the investigator can then ask traditional questions while the victim’s barriers are relaxed, such as when, where and how the assault happened.
Since 2009, more than 700 special agents and prosecutors from each branch of the military have taken forensic experiential trauma interview training, and 500 more are scheduled to complete the course by the end of September, Strand said. He also said DOD has funded more than 400 seats for the FETI special victims’ unit course through fiscal year 2017.
Strand said his goal through FETI is to bring the military prevalence rates down for victims -- both men and women -- while making sure that cultural change occurs regarding sexual assault. It might take five to 10 years for the prevalence rates to decrease and he expects reporting rates to increase, he added.
"What we want victims to know is they can be confident we are working really hard to understand what they’ve gone through, to understand their experience and help them remember [it] in the most natural, scientific way," Strand said.
Strand said he also wants sexual offenders to know that law enforcement investigations of sexual assault have become much more sophisticated in identifying their behaviors, and that the crime is now investigated in a manner in which it never has been before. "They are at much greater risk of being caught than they were five or 10 years ago," he added.
With DOD backing and collaborating with the civilian sector, Strand said, "we want to lead the nation, and I think other countries are looking at us to get this right."
"And we have the capability to do that," he added.
Thursday, April 25, 2013
HHS WILL INCREASE REWARDS FRO REPORTING FRAUD
FROM: U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
HHS would increase rewards for reporting fraud to nearly $10 million
New funds available to expand Senior Medicare Patrol Program
Health and Human Services Secretary Kathleen Sebelius today announced a proposed rule that would increase rewards paid to Medicare beneficiaries and others whose tips about suspected fraud lead to the successful recovery of funds to as high as $9.9 million. In addition, a new funding opportunity released this month supports the expansion of Senior Medicare Patrol (SMP) activities to educate Medicare beneficiaries on how to prevent, detect and report Medicare fraud, waste and abuse.
"President Obama has made the elimination of fraud, waste and abuse, particularly in health care, a top priority for the administration," said Secretary Sebelius. "Today’s announcement is a signal to Medicare beneficiaries and caregivers, who are on the frontlines of this fight, that they are critical partners in helping protect taxpayer dollars."
Over the last three years, the administration has recovered over $14.9 billion in fraud, some of which resulted from fraud reporting by individuals – a proven tool in helping the government detect fraud, waste and abuse in the Medicare program. Under the proposed changes, a person that provides specific information leading to the recovery of funds may be eligible to receive a reward of 15 percent of the amount recovered, up to nearly $10 million. HHS currently offers a reward of 10 percent up to $1,000 under the current incentive reward program. The changes are modeled on an IRS program that has returned $2 billion in fraud since 2003.
The proposed rule would also strengthen certain provider enrollment provisions including allowing HHS to deny enrollment of providers who are affiliated with an entity that has unpaid Medicare debt, deny or revoke billing privileges for individuals with felony convictions, and revoke privileges for providers and suppliers who are abusing their billing privileges.
The SMP is a national, volunteer-based program that empowers Medicare beneficiaries to prevent and report Medicare fraud, waste, and abuse. Since 1997, more than 3.5 million beneficiaries have learned how to recognize and fight fraud and abuse, and more than 7,000 referrals have been made to the Centers for Medicare & Medicaid Services and the Office of the Inspector General for investigation.
To expand the SMP program’s capacity to reach more Medicare beneficiaries, the Administration for Community Living issued a new funding opportunity. Each of the current 54 SMP projects is eligible for varying funding levels, up to a total of $7.3 million across the program.
These proposed changes will support the administration’s comprehensive approach to program integrity, including the work being done with the Health Care Fraud Prevention and Enforcement Action Team, a joint effort between HHS and the Department of Justice to fight health care fraud. This joint effort recovered a record $4.2 billion in taxpayer dollars in fiscal year 2012.
HHS would increase rewards for reporting fraud to nearly $10 million
New funds available to expand Senior Medicare Patrol Program
Health and Human Services Secretary Kathleen Sebelius today announced a proposed rule that would increase rewards paid to Medicare beneficiaries and others whose tips about suspected fraud lead to the successful recovery of funds to as high as $9.9 million. In addition, a new funding opportunity released this month supports the expansion of Senior Medicare Patrol (SMP) activities to educate Medicare beneficiaries on how to prevent, detect and report Medicare fraud, waste and abuse.
"President Obama has made the elimination of fraud, waste and abuse, particularly in health care, a top priority for the administration," said Secretary Sebelius. "Today’s announcement is a signal to Medicare beneficiaries and caregivers, who are on the frontlines of this fight, that they are critical partners in helping protect taxpayer dollars."
Over the last three years, the administration has recovered over $14.9 billion in fraud, some of which resulted from fraud reporting by individuals – a proven tool in helping the government detect fraud, waste and abuse in the Medicare program. Under the proposed changes, a person that provides specific information leading to the recovery of funds may be eligible to receive a reward of 15 percent of the amount recovered, up to nearly $10 million. HHS currently offers a reward of 10 percent up to $1,000 under the current incentive reward program. The changes are modeled on an IRS program that has returned $2 billion in fraud since 2003.
The proposed rule would also strengthen certain provider enrollment provisions including allowing HHS to deny enrollment of providers who are affiliated with an entity that has unpaid Medicare debt, deny or revoke billing privileges for individuals with felony convictions, and revoke privileges for providers and suppliers who are abusing their billing privileges.
The SMP is a national, volunteer-based program that empowers Medicare beneficiaries to prevent and report Medicare fraud, waste, and abuse. Since 1997, more than 3.5 million beneficiaries have learned how to recognize and fight fraud and abuse, and more than 7,000 referrals have been made to the Centers for Medicare & Medicaid Services and the Office of the Inspector General for investigation.
To expand the SMP program’s capacity to reach more Medicare beneficiaries, the Administration for Community Living issued a new funding opportunity. Each of the current 54 SMP projects is eligible for varying funding levels, up to a total of $7.3 million across the program.
These proposed changes will support the administration’s comprehensive approach to program integrity, including the work being done with the Health Care Fraud Prevention and Enforcement Action Team, a joint effort between HHS and the Department of Justice to fight health care fraud. This joint effort recovered a record $4.2 billion in taxpayer dollars in fiscal year 2012.
Wednesday, April 24, 2013
TWO MEN PLEAD GUILTY TO COMMITTING FEDERAL HATE CRIME AGAINST GAY MAN
FROM: U.S. JUSTICE DEPARTMENT
Thursday, April 18, 2013
Two Atlanta Men Plead Guilty to Federal Hate Crime Against Gay Man
Case Marks the First Convictions in Georgia for Violations of the Sexual Orientation Provision of the Hate Crimes Prevention Act
Christopher Cain, 19, and Dorian Moragne, 20, both of Atlanta, pleaded guilty today in federal court to beating a man because of his sexual orientation.
Christopher Cain, 19, and Dorian Moragne, 20, both of Atlanta, pleaded guilty today in federal court to beating a man because of his sexual orientation.
According to information presented in court, Cain, Moragne and a juvenile, all associated with the Jack City street gang, targeted a 20-year-old gay man on Feb. 4, 2012, as the man left a grocery store in Atlanta’s Pittsburgh neighborhood. Cain punched the victim in the head and pushed him to the ground. Cain, Moragne and the juvenile surrounded the victim and repeatedly punched and kicked him while the group yelled anti-gay epithets, including "No f****** in Jack City." Moragne then picked up a tire and struck the victim with it. The group also stole the victim’s cell phone. A fourth person, also with the defendants, recorded the assault using a cell phone. The video footage was posted to the internet.
"Hate-fueled violence will not be condoned," said Roy L. Austin Jr., Deputy Assistant Attorney General for the Civil Rights Division. "The Justice Department will use all the tools in our law enforcement arsenal to investigate and prosecute hate crimes."
"Using violence against another person because of his or her sexual orientation has no place in our civilized society. The Department of Justice is committed to aggressively enforcing the Matthew Shepard and James Byrd, Jr. Hate Crimes Prevention Act to prosecute acts motivated by hate," said U.S. Attorney Sally Quillian Yates.
Cain and Moragne admitted to violating the Matthew Shepard and James Byrd, Jr. Hate Crimes Prevention Act, which expanded federal jurisdiction to include certain assaults motivated by the victim’s sexual orientation. The federal hate crimes law criminalizes certain acts of violence motivated by a victim’s actual or perceived race, color, national origin, religion, sexual orientation, disability, gender or gender identity. This case is the first in Georgia to charge a violation of the sexual orientation provision of this federal hate crimes law.
Last year, Cain, Moragne and the juvenile, who was considered an adult under Georgia law, were prosecuted in Fulton County, Ga., Superior Court for offenses that did not include a hate crime. In state court, Cain and Moragne were sentenced to a term of 10 years in prison, suspended upon the service of five years. As part of their plea agreement, federal prosecutors recommended that their federal and state sentences run concurrently.
This case is being investigated by special agents of the FBI and investigators with the Atlanta Police Department. The case is being prosecuted by Trial Attorney Nicole Lee Ndumele of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Brent Alan Gray.
Thursday, April 18, 2013
Two Atlanta Men Plead Guilty to Federal Hate Crime Against Gay Man
Case Marks the First Convictions in Georgia for Violations of the Sexual Orientation Provision of the Hate Crimes Prevention Act
Christopher Cain, 19, and Dorian Moragne, 20, both of Atlanta, pleaded guilty today in federal court to beating a man because of his sexual orientation.
Christopher Cain, 19, and Dorian Moragne, 20, both of Atlanta, pleaded guilty today in federal court to beating a man because of his sexual orientation.
According to information presented in court, Cain, Moragne and a juvenile, all associated with the Jack City street gang, targeted a 20-year-old gay man on Feb. 4, 2012, as the man left a grocery store in Atlanta’s Pittsburgh neighborhood. Cain punched the victim in the head and pushed him to the ground. Cain, Moragne and the juvenile surrounded the victim and repeatedly punched and kicked him while the group yelled anti-gay epithets, including "No f****** in Jack City." Moragne then picked up a tire and struck the victim with it. The group also stole the victim’s cell phone. A fourth person, also with the defendants, recorded the assault using a cell phone. The video footage was posted to the internet.
"Hate-fueled violence will not be condoned," said Roy L. Austin Jr., Deputy Assistant Attorney General for the Civil Rights Division. "The Justice Department will use all the tools in our law enforcement arsenal to investigate and prosecute hate crimes."
"Using violence against another person because of his or her sexual orientation has no place in our civilized society. The Department of Justice is committed to aggressively enforcing the Matthew Shepard and James Byrd, Jr. Hate Crimes Prevention Act to prosecute acts motivated by hate," said U.S. Attorney Sally Quillian Yates.
Cain and Moragne admitted to violating the Matthew Shepard and James Byrd, Jr. Hate Crimes Prevention Act, which expanded federal jurisdiction to include certain assaults motivated by the victim’s sexual orientation. The federal hate crimes law criminalizes certain acts of violence motivated by a victim’s actual or perceived race, color, national origin, religion, sexual orientation, disability, gender or gender identity. This case is the first in Georgia to charge a violation of the sexual orientation provision of this federal hate crimes law.
Last year, Cain, Moragne and the juvenile, who was considered an adult under Georgia law, were prosecuted in Fulton County, Ga., Superior Court for offenses that did not include a hate crime. In state court, Cain and Moragne were sentenced to a term of 10 years in prison, suspended upon the service of five years. As part of their plea agreement, federal prosecutors recommended that their federal and state sentences run concurrently.
This case is being investigated by special agents of the FBI and investigators with the Atlanta Police Department. The case is being prosecuted by Trial Attorney Nicole Lee Ndumele of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Brent Alan Gray.
Tuesday, April 23, 2013
MAN INDICTED ON DRUG CONSPIRACY AND SEX TRAFFICKING CHARGES
FROM: U.S. DEPARTMENT OF JUSTICE
Thursday, April 18, 2013
Florida Man Indicted on Drug Conspiracy and Sex Trafficking Charges
A federal grand jury returned an indictment today charging Andrew Blane Fields, 62, of Lutz, Fla., with conspiracy to possess with the intent to distribute controlled substances, namely Oxycodone, Dilaudid and Morphine; three counts of sex trafficking by force, fraud and coercion; and two counts of possession with intent to distribute controlled substances. If convicted on all counts, Fields faces a maximum of life in federal prison.
According to allegations in the indictment and criminal complaint, at least as early as 2008 through the end of 2012, Fields engaged in the sex trafficking of three different victims for commercial gain, who are identified in the indictment by their initials. Fields coerced and controlled the victims by, among other methods, supplying them on a daily basis with a large number of highly addictive prescription drugs. During the execution of a federal search warrant, law enforcement recovered thousands of prescription pills from Fields’ residence. Fields was previously charged by criminal complaint on March 20, 2013.
An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent until proven guilty.
This case was investigated by the Department of Homeland Security – Homeland Security Investigations with the assistance of the Clearwater, Fla., Police Department and members of the Clearwater Area Human Trafficking Task Force. It will be prosecuted by Assistant U.S. Attorney Josephine W. Thomas and Trial Attorney William E. Nolan with the Department of Justice Civil Rights Division’s Human Trafficking Prosecution Unit.
Thursday, April 18, 2013
Florida Man Indicted on Drug Conspiracy and Sex Trafficking Charges
A federal grand jury returned an indictment today charging Andrew Blane Fields, 62, of Lutz, Fla., with conspiracy to possess with the intent to distribute controlled substances, namely Oxycodone, Dilaudid and Morphine; three counts of sex trafficking by force, fraud and coercion; and two counts of possession with intent to distribute controlled substances. If convicted on all counts, Fields faces a maximum of life in federal prison.
According to allegations in the indictment and criminal complaint, at least as early as 2008 through the end of 2012, Fields engaged in the sex trafficking of three different victims for commercial gain, who are identified in the indictment by their initials. Fields coerced and controlled the victims by, among other methods, supplying them on a daily basis with a large number of highly addictive prescription drugs. During the execution of a federal search warrant, law enforcement recovered thousands of prescription pills from Fields’ residence. Fields was previously charged by criminal complaint on March 20, 2013.
An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent until proven guilty.
This case was investigated by the Department of Homeland Security – Homeland Security Investigations with the assistance of the Clearwater, Fla., Police Department and members of the Clearwater Area Human Trafficking Task Force. It will be prosecuted by Assistant U.S. Attorney Josephine W. Thomas and Trial Attorney William E. Nolan with the Department of Justice Civil Rights Division’s Human Trafficking Prosecution Unit.
Monday, April 22, 2013
LA COSA NOSTRA CAPO PLEADS GUILTY TO PART IN RACKETEERING CONSPIRACY
FROM: U.S. DEPARTMENT OF JUSTICE
Friday, April 19, 2013
Philadelphia La Cosa Nostra Capo Pleads Guilty to Racketeering Conspiracy
Anthony Staino, 55, of Swedesboro, N.J., pleaded guilty yesterday to participating in a racketeering conspiracy as a capo in the Philadelphia La Cosa Nostra (LCN) Family and committing loan sharking and illegal gambling.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania and Edward J. Hanko, Special Agent in Charge of the FBI’s Philadelphia Division, made the announcement after the plea was accepted by U.S. District Judge Eduardo C. Robreno of the Eastern District of Pennsylvania.
Staino pleaded guilty to conspiring to conduct and participate in the affairs of the Philadelphia LCN Family through a pattern of racketeering activity. He faces a maximum penalty of 70 years in prison when he is sentenced on Jul. 17, 2013.
Through court documents and statements yesterday in court, Staino admitted that, as a made member and capo of the Philadelphia LCN Family, he gave a usurious loan to an undercover FBI agent and used threats of violence to collect payments on the loan. Staino also admitted that he ran an illegal electronic gambling device business for the mob, providing video poker machines and other gambling devices for bars, restaurants, convenience stores, coffee shops and other locations in Philadelphia and its suburbs, and then collected the illegal gambling proceeds.
The case is being investigated by the FBI, the Internal Revenue Service-Criminal Investigation, the Pennsylvania State Police, the New Jersey State Police, the Philadelphia Police Department, the U.S. Department of Labor’s Office of Inspector General Office of Labor Racketeering and Fraud Investigations and the U.S. Department of Labor’s Employee Benefits Security Administration. Additional assistance was provided by the New Jersey Department of Corrections.
The case is being prosecuted by Trial Attorney John S. Han of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Frank A. Labor III and Suzanne B. Ercole of the Eastern District of Pennsylvania. Valuable prosecutorial assistance was provided by the Pennsylvania Office of the Attorney General.
Friday, April 19, 2013
Philadelphia La Cosa Nostra Capo Pleads Guilty to Racketeering Conspiracy
Anthony Staino, 55, of Swedesboro, N.J., pleaded guilty yesterday to participating in a racketeering conspiracy as a capo in the Philadelphia La Cosa Nostra (LCN) Family and committing loan sharking and illegal gambling.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania and Edward J. Hanko, Special Agent in Charge of the FBI’s Philadelphia Division, made the announcement after the plea was accepted by U.S. District Judge Eduardo C. Robreno of the Eastern District of Pennsylvania.
Staino pleaded guilty to conspiring to conduct and participate in the affairs of the Philadelphia LCN Family through a pattern of racketeering activity. He faces a maximum penalty of 70 years in prison when he is sentenced on Jul. 17, 2013.
Through court documents and statements yesterday in court, Staino admitted that, as a made member and capo of the Philadelphia LCN Family, he gave a usurious loan to an undercover FBI agent and used threats of violence to collect payments on the loan. Staino also admitted that he ran an illegal electronic gambling device business for the mob, providing video poker machines and other gambling devices for bars, restaurants, convenience stores, coffee shops and other locations in Philadelphia and its suburbs, and then collected the illegal gambling proceeds.
The case is being investigated by the FBI, the Internal Revenue Service-Criminal Investigation, the Pennsylvania State Police, the New Jersey State Police, the Philadelphia Police Department, the U.S. Department of Labor’s Office of Inspector General Office of Labor Racketeering and Fraud Investigations and the U.S. Department of Labor’s Employee Benefits Security Administration. Additional assistance was provided by the New Jersey Department of Corrections.
The case is being prosecuted by Trial Attorney John S. Han of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Frank A. Labor III and Suzanne B. Ercole of the Eastern District of Pennsylvania. Valuable prosecutorial assistance was provided by the Pennsylvania Office of the Attorney General.
MAN SENTENCED TO MORE THAN 8 YEARS PRISON, MUST PAY OVER $3.1 MILLION RESTITUTION
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
"Bob" Hancher Sentenced to Over 8 Years in Prison and Ordered to Pay Restitution of Over $ 3.1 Million
The Securities and Exchange Commission (SEC) announced that on March 27, 2013, in a criminal action brought by the U.S. Attorney's Office for the Northern District of Iowa, the Honorable Mark W. Bennett sentenced Lowell Gene "Bob" Hancher to 97 months in prison on one count of wire fraud and one count of securities and commodities fraud and ordered Hancher to pay $3,139,232 in restitution to his victims. Judge Bennett also ordered Hancher to be placed on five years of supervised released following the completion of his prison sentence. [USA v. Lowell Gene Hancher (a/k/a "Bob" Hancher), Case No. 12-CR-4090, USDC, N.D. Iowa].
The $3.1 million restitution amount includes funds that Hancher stole from investors in a fraudulent stock offering he led on behalf of Scott Contracting, Inc., a Colorado construction company, and funds that Hancher misappropriated from Cycle Country Accessories Corporation, an Iowa manufacturer of accessories for all-terrain vehicles and golf carts, while serving as a member of Cycle Country's board of directors and audit committee.
In January 2011, the SEC filed a civil injunctive action against Hancher for defrauding the Scott Contracting investors, misappropriating funds from Cycle Country and engaging in a manipulative stock trading scheme involving shares of a third company. On January 19, 2011, Judge Bennett in the Northern District of Iowa entered an order permanently enjoining Hancher from violating or aiding and abetting violations of the antifraud provisions of the Securities Act of 1933 and the antifraud and books and records provisions of the Securities Exchange Act of 1934 and ordering him to pay disgorgement plus prejudgment interest of $2,988,405 and a civil penalty of $130,000. Hancher consented to the entry of the order which also barred him from serving as an officer or director of a public company or participating in a penny stock offering. On May 18, 2011, the SEC also barred Hancher from associating with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent or nationally recognized statistical rating organization.
"Bob" Hancher Sentenced to Over 8 Years in Prison and Ordered to Pay Restitution of Over $ 3.1 Million
The Securities and Exchange Commission (SEC) announced that on March 27, 2013, in a criminal action brought by the U.S. Attorney's Office for the Northern District of Iowa, the Honorable Mark W. Bennett sentenced Lowell Gene "Bob" Hancher to 97 months in prison on one count of wire fraud and one count of securities and commodities fraud and ordered Hancher to pay $3,139,232 in restitution to his victims. Judge Bennett also ordered Hancher to be placed on five years of supervised released following the completion of his prison sentence. [USA v. Lowell Gene Hancher (a/k/a "Bob" Hancher), Case No. 12-CR-4090, USDC, N.D. Iowa].
The $3.1 million restitution amount includes funds that Hancher stole from investors in a fraudulent stock offering he led on behalf of Scott Contracting, Inc., a Colorado construction company, and funds that Hancher misappropriated from Cycle Country Accessories Corporation, an Iowa manufacturer of accessories for all-terrain vehicles and golf carts, while serving as a member of Cycle Country's board of directors and audit committee.
In January 2011, the SEC filed a civil injunctive action against Hancher for defrauding the Scott Contracting investors, misappropriating funds from Cycle Country and engaging in a manipulative stock trading scheme involving shares of a third company. On January 19, 2011, Judge Bennett in the Northern District of Iowa entered an order permanently enjoining Hancher from violating or aiding and abetting violations of the antifraud provisions of the Securities Act of 1933 and the antifraud and books and records provisions of the Securities Exchange Act of 1934 and ordering him to pay disgorgement plus prejudgment interest of $2,988,405 and a civil penalty of $130,000. Hancher consented to the entry of the order which also barred him from serving as an officer or director of a public company or participating in a penny stock offering. On May 18, 2011, the SEC also barred Hancher from associating with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent or nationally recognized statistical rating organization.
Sunday, April 21, 2013
HOME HEALTH AGENCY OFFICE MANAGER CONVICTED FOR ROLE IN $5.8 MILLION MEDICARE FRAUD SCHEME
FROM: U.S. DEPARTMENT OF JUSTICE
Wednesday, April 17, 2013
Detroit-Area Home Health Agency Office Manager Convicted in $5.8 Million Medicare Fraud Scheme
A federal jury in Detroit today convicted the office manager of a home health agency for her participation in a $5.8 million Medicare fraud scheme, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Robert D. Foley III, Special Agent in Charge of the FBI Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Detroit Office.
Nabila Mahbub, 27, the office manager of All American Home Care Inc., was found guilty in U.S. District Court for the Eastern District of Michigan of one count of conspiracy to commit health care fraud.
Mahbub was charged in a superseding indictment returned March 27, 2012. Nineteen other individuals who worked at or were associated with All American were previously convicted for their roles in the fraudulent scheme; one was acquitted at trial, but was convicted at trial for a separate, but related, scheme.
According to evidence presented at trial, the defendant and her co-conspirators caused the submission of false and fraudulent claims to Medicare through All American, a home health care company located in Oak Park, Mich., that purported to provide skilled nursing and physical therapy services to Medicare beneficiaries in the greater Detroit area.
The evidence at trial showed that the defendant and her co-conspirators used patient recruiters, who paid Medicare beneficiaries to sign blank documents for physical therapy services that were never provided and/or medically unnecessary. The owners of All American paid physicians to sign referrals and other therapy documents necessary to bill Medicare. Physical therapists and physical therapist assistants then created fake medical records using blank, pre-signed forms obtained by the patient recruiters to make it appear as if physical therapy services were actually rendered, when, in fact, they were not.
According to evidence presented at trial, Mahbub doctored and directed the doctoring of fake patient files to facilitate the commencement and billing of home health services purportedly provided by physical therapists and physical therapist assistants working for All American. Mahbub also directed the physical therapists and physical therapist assistants who created fake therapy visit notes using blank, pre-signed forms, to make it appear that physical therapy services billed to Medicare were actually provided.
All American was paid over $5.8 million from Medicare between September 2008 and November 2009.
At sentencing, scheduled for July 25, 2013, Mahbub faces a maximum penalty of 10 years in prison.
This case is being prosecuted by Deputy Chief Gejaa T. Gobena and Trial Attorney Matthew C. Thuesen of the Criminal Division’s Fraud Section. The investigation was led by the FBI and HHS-OIG, and was brought by the Medicare Fraud Strike Force, a joint effort of the U.S. Attorney’s Office for the Eastern District of Michigan and the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
Wednesday, April 17, 2013
Detroit-Area Home Health Agency Office Manager Convicted in $5.8 Million Medicare Fraud Scheme
A federal jury in Detroit today convicted the office manager of a home health agency for her participation in a $5.8 million Medicare fraud scheme, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Robert D. Foley III, Special Agent in Charge of the FBI Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Detroit Office.
Nabila Mahbub, 27, the office manager of All American Home Care Inc., was found guilty in U.S. District Court for the Eastern District of Michigan of one count of conspiracy to commit health care fraud.
Mahbub was charged in a superseding indictment returned March 27, 2012. Nineteen other individuals who worked at or were associated with All American were previously convicted for their roles in the fraudulent scheme; one was acquitted at trial, but was convicted at trial for a separate, but related, scheme.
According to evidence presented at trial, the defendant and her co-conspirators caused the submission of false and fraudulent claims to Medicare through All American, a home health care company located in Oak Park, Mich., that purported to provide skilled nursing and physical therapy services to Medicare beneficiaries in the greater Detroit area.
The evidence at trial showed that the defendant and her co-conspirators used patient recruiters, who paid Medicare beneficiaries to sign blank documents for physical therapy services that were never provided and/or medically unnecessary. The owners of All American paid physicians to sign referrals and other therapy documents necessary to bill Medicare. Physical therapists and physical therapist assistants then created fake medical records using blank, pre-signed forms obtained by the patient recruiters to make it appear as if physical therapy services were actually rendered, when, in fact, they were not.
According to evidence presented at trial, Mahbub doctored and directed the doctoring of fake patient files to facilitate the commencement and billing of home health services purportedly provided by physical therapists and physical therapist assistants working for All American. Mahbub also directed the physical therapists and physical therapist assistants who created fake therapy visit notes using blank, pre-signed forms, to make it appear that physical therapy services billed to Medicare were actually provided.
All American was paid over $5.8 million from Medicare between September 2008 and November 2009.
At sentencing, scheduled for July 25, 2013, Mahbub faces a maximum penalty of 10 years in prison.
This case is being prosecuted by Deputy Chief Gejaa T. Gobena and Trial Attorney Matthew C. Thuesen of the Criminal Division’s Fraud Section. The investigation was led by the FBI and HHS-OIG, and was brought by the Medicare Fraud Strike Force, a joint effort of the U.S. Attorney’s Office for the Eastern District of Michigan and the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
Saturday, April 20, 2013
FRENCH CITIZEN ACCUSED OF ATTEMPTING TO OBSTRUCT JUSTICE IN FCPA INVESTIGATION
FROM: U.S. DEPARTMENT OF JUSTICE
Monday, April 15, 2013
Obstruction Charges Filed in Ongoing FCPA Investigation into Alleged Guinean Mining Rights Bribe Scheme
Frederic Cilins, 50, a French citizen, has been arrested and accused of attempting to obstruct an ongoing investigation into whether a mining company paid bribes to win lucrative mining rights in the Republic of Guinea.
Mythili Raman, Acting Assistant Attorney General for the Justice Department’s Criminal Division; Preet Bharara, the U.S. Attorney for the Southern District of New York; and George Venizelos, the Assistant Director in Charge of the FBI’s New York Field Office, made the announcement.
"Mr. Cilins is charged with scheming to destroy documents and induce a witness to give false testimony to a grand jury investigating potential violations of the Foreign Corrupt Practices Act," said Acting Assistant Attorney General Raman. "The Justice Department is committed to rooting out foreign bribery, and we will not tolerate criminal attempts to thwart our efforts."
"A grand jury can never learn the truth, and justice cannot prevail, where documents are intentionally destroyed and testimony is tainted by lies," said U.S. Attorney Bharara. "As alleged, Frederic Cilins attempted to obstruct a significant investigation by corrupting evidence and testimony in precisely those ways. With today’s arrest, he now begins his own path to justice for his alleged conduct."
"As alleged, Cilins attempted to buy evidence he sought to destroy," said FBI Assistant Director in Charge Venizelos. "The destruction of evidence was in furtherance of Cilins’s alleged effort to obstruct an investigation into a bribery scheme. In effect, he was allegedly willing to commit bribery in an effort to cover up a bribery."
Cilins was arrested in Jacksonville, Fla., on April 14, 2013, and a criminal complaint was filed in the Southern District of New York today charging Cilins with tampering with a witness, victim or informant; obstructing a criminal investigation; and destroying, altering or falsifying records in a federal investigation. The obstruction charge carries a maximum penalty of five years in prison, and the tampering and record-destruction charges each carry a maximum penalty of 20 years in prison. Cilins made an initial appearance in the Middle District of Florida and was detained pending a detention hearing scheduled for April 18, 2013.
According to the complaint, Cilins allegedly attempted to obstruct an ongoing federal grand jury investigation concerning potential violations of the Foreign Corrupt Practices Act and laws proscribing money laundering. The complaint states the federal grand jury is investigating whether a particular mining company and its affiliates – on whose behalf Cilins has been working – transferred into the United States funds in furtherance of a scheme to obtain and retain valuable mining concessions in the Republic of Guinea’s Simandou region. During monitored and recorded phone calls and face-to-face meetings, Cilins allegedly agreed to pay substantial sums of money to induce a witness to the bribery scheme to turn over documents to Cilins for destruction, which Cilins knew had been requested by the FBI and needed to be produced before a federal grand jury. The complaint also alleges that Cilins sought to induce the witness to sign an affidavit containing numerous false statements regarding matters under investigation by the grand jury.
The complaint alleges that the documents Cilins sought to destroy included original copies of contracts between the mining company and its affiliates and the former wife of a now-deceased Guinean government official, who at the relevant time held an office in Guinea that allowed him to influence the award of mining concessions. The contracts allegedly related to a scheme by which the mining company and its affiliates offered the wife of the Guinean official millions of dollars, which were to be distributed to the official’s wife as well as ministers or senior officials of Guinea’s government whose authority might be needed to secure the mining rights.
According to the complaint, the official’s wife incorporated a company in 2008 that agreed to take all necessary steps to secure the valuable mining rights for the mining company’s subsidiary. That same contract stipulated that $2 million was to be transferred to the official’s wife’s company and an additional sum was to be "distributed among persons of good will who may have contributed to facilitating the granting of" the valuable mining rights. According to the complaint, in 2008, the mining company and its affiliates also "commit[ted] to giving 5% of the shares of stock" in particular mining areas in Guinea to the official’s wife.
A complaint is merely an accusation, and the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
The case is being prosecuted by Trial Attorney Stephen J. Spiegelhalter of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Elisha J. Kobre of the Southern District of New York. The case is being investigated by the FBI. The Justice Department’s Office of International Affairs and Office of Enforcement Operations have also assisted in the investigation.
Monday, April 15, 2013
Obstruction Charges Filed in Ongoing FCPA Investigation into Alleged Guinean Mining Rights Bribe Scheme
Frederic Cilins, 50, a French citizen, has been arrested and accused of attempting to obstruct an ongoing investigation into whether a mining company paid bribes to win lucrative mining rights in the Republic of Guinea.
Mythili Raman, Acting Assistant Attorney General for the Justice Department’s Criminal Division; Preet Bharara, the U.S. Attorney for the Southern District of New York; and George Venizelos, the Assistant Director in Charge of the FBI’s New York Field Office, made the announcement.
"Mr. Cilins is charged with scheming to destroy documents and induce a witness to give false testimony to a grand jury investigating potential violations of the Foreign Corrupt Practices Act," said Acting Assistant Attorney General Raman. "The Justice Department is committed to rooting out foreign bribery, and we will not tolerate criminal attempts to thwart our efforts."
"A grand jury can never learn the truth, and justice cannot prevail, where documents are intentionally destroyed and testimony is tainted by lies," said U.S. Attorney Bharara. "As alleged, Frederic Cilins attempted to obstruct a significant investigation by corrupting evidence and testimony in precisely those ways. With today’s arrest, he now begins his own path to justice for his alleged conduct."
"As alleged, Cilins attempted to buy evidence he sought to destroy," said FBI Assistant Director in Charge Venizelos. "The destruction of evidence was in furtherance of Cilins’s alleged effort to obstruct an investigation into a bribery scheme. In effect, he was allegedly willing to commit bribery in an effort to cover up a bribery."
Cilins was arrested in Jacksonville, Fla., on April 14, 2013, and a criminal complaint was filed in the Southern District of New York today charging Cilins with tampering with a witness, victim or informant; obstructing a criminal investigation; and destroying, altering or falsifying records in a federal investigation. The obstruction charge carries a maximum penalty of five years in prison, and the tampering and record-destruction charges each carry a maximum penalty of 20 years in prison. Cilins made an initial appearance in the Middle District of Florida and was detained pending a detention hearing scheduled for April 18, 2013.
According to the complaint, Cilins allegedly attempted to obstruct an ongoing federal grand jury investigation concerning potential violations of the Foreign Corrupt Practices Act and laws proscribing money laundering. The complaint states the federal grand jury is investigating whether a particular mining company and its affiliates – on whose behalf Cilins has been working – transferred into the United States funds in furtherance of a scheme to obtain and retain valuable mining concessions in the Republic of Guinea’s Simandou region. During monitored and recorded phone calls and face-to-face meetings, Cilins allegedly agreed to pay substantial sums of money to induce a witness to the bribery scheme to turn over documents to Cilins for destruction, which Cilins knew had been requested by the FBI and needed to be produced before a federal grand jury. The complaint also alleges that Cilins sought to induce the witness to sign an affidavit containing numerous false statements regarding matters under investigation by the grand jury.
The complaint alleges that the documents Cilins sought to destroy included original copies of contracts between the mining company and its affiliates and the former wife of a now-deceased Guinean government official, who at the relevant time held an office in Guinea that allowed him to influence the award of mining concessions. The contracts allegedly related to a scheme by which the mining company and its affiliates offered the wife of the Guinean official millions of dollars, which were to be distributed to the official’s wife as well as ministers or senior officials of Guinea’s government whose authority might be needed to secure the mining rights.
According to the complaint, the official’s wife incorporated a company in 2008 that agreed to take all necessary steps to secure the valuable mining rights for the mining company’s subsidiary. That same contract stipulated that $2 million was to be transferred to the official’s wife’s company and an additional sum was to be "distributed among persons of good will who may have contributed to facilitating the granting of" the valuable mining rights. According to the complaint, in 2008, the mining company and its affiliates also "commit[ted] to giving 5% of the shares of stock" in particular mining areas in Guinea to the official’s wife.
A complaint is merely an accusation, and the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
The case is being prosecuted by Trial Attorney Stephen J. Spiegelhalter of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Elisha J. Kobre of the Southern District of New York. The case is being investigated by the FBI. The Justice Department’s Office of International Affairs and Office of Enforcement Operations have also assisted in the investigation.
Friday, April 19, 2013
DOUBLE HOMICIDE SUSPECT CAUGHT
FROM: U.S. MARSHALS SERVICE
San Jose Double Homicide Suspect Caught in Mexico
San Jose, CA
– U.S. Marshal Don O’Keefe is proud to announce the arrest of Pedro Medina-Castillon, who is wanted to stand trial in the Superior Court of California, Santa Clara County, for two counts of homicide. The 31-year-old suspect was arrested Tuesday in Guadalajara, Mexico, for purposes of extradition to the United States by the Policia Federal Ministerial assigned to PGR Interpol Mexico, working with assistance of the U.S. Marshals Service Mexico City Foreign Field Office, the Santa Clara County District Attorney’s Office and the Department of Justice’s Office of International Affairs.
It is alleged that in July 2012 in San Jose, Medina-Castillon forced entry into the home of Maribel and Pedro Jimenez. While their three children looked on, Medina-Castillon allegedly shot and killed Pedro Jimenez, then went to the master bedroom and shot and killed Maribel Jimenez while she attempted to call 911. Investigators believe Medina-Castillon then fled to Los Angeles and eventually on to Mexico.
Due to a relentless investigation conducted by the San Jose Police Department and U.S. Marshals Service Deputies in San Jose, and with the assistance of the Santa Clara County District Attorney’s Office and the DOJ Office of International Affairs, Pedro Medina-Castillon was taken into custody on the basis of a Provisional Arrest Warrant, which seeks his extradition to the United States.
Other U.S. Marshals Service entities involved in the U.S. Marshals portion of the investigation include the Investigative Operations Division, International Investigations Branch and the Technical Operations Group.
The U.S. Marshals Service is the primary federal agency charged with conducting fugitive investigations throughout the United States. The U.S. Marshals Service regularly works in concert with other federal, state, and local law enforcement agencies to seek out and arrest violent fugitives and sex offenders, and has established task forces throughout the nation to facilitate the apprehension of fugitives.
San Jose Double Homicide Suspect Caught in Mexico
San Jose, CA
– U.S. Marshal Don O’Keefe is proud to announce the arrest of Pedro Medina-Castillon, who is wanted to stand trial in the Superior Court of California, Santa Clara County, for two counts of homicide. The 31-year-old suspect was arrested Tuesday in Guadalajara, Mexico, for purposes of extradition to the United States by the Policia Federal Ministerial assigned to PGR Interpol Mexico, working with assistance of the U.S. Marshals Service Mexico City Foreign Field Office, the Santa Clara County District Attorney’s Office and the Department of Justice’s Office of International Affairs.
It is alleged that in July 2012 in San Jose, Medina-Castillon forced entry into the home of Maribel and Pedro Jimenez. While their three children looked on, Medina-Castillon allegedly shot and killed Pedro Jimenez, then went to the master bedroom and shot and killed Maribel Jimenez while she attempted to call 911. Investigators believe Medina-Castillon then fled to Los Angeles and eventually on to Mexico.
Due to a relentless investigation conducted by the San Jose Police Department and U.S. Marshals Service Deputies in San Jose, and with the assistance of the Santa Clara County District Attorney’s Office and the DOJ Office of International Affairs, Pedro Medina-Castillon was taken into custody on the basis of a Provisional Arrest Warrant, which seeks his extradition to the United States.
Other U.S. Marshals Service entities involved in the U.S. Marshals portion of the investigation include the Investigative Operations Division, International Investigations Branch and the Technical Operations Group.
The U.S. Marshals Service is the primary federal agency charged with conducting fugitive investigations throughout the United States. The U.S. Marshals Service regularly works in concert with other federal, state, and local law enforcement agencies to seek out and arrest violent fugitives and sex offenders, and has established task forces throughout the nation to facilitate the apprehension of fugitives.
Thursday, April 18, 2013
MAN CHARGED WITH ODOMETER TAMPERING
FROM: U.S. JUSTICE DEPARTMENT,
Friday, April 12, 2013
North Carolina Man Charged in Odometer Tampering Scheme
In an information made public today, the United States charged Francis Marimo, of Raleigh, N.C., with two counts of odometer tampering.
The information, filed in U.S. District Court for the Eastern District of North Carolina on April 10, 2013, alleges that from 2008 through 2012, Marimo fraudulently caused odometers in used motor vehicles to be altered to reflect false, low mileages. According to the Information, Marimo purchased used vehicles primarily through online advertisements, replaced the existing odometers with odometers showing lower mileages, and then sold the vehicles to consumers while representing the low mileages as accurate. One of the vehicles described in the Information was "rolled back" more than 100,000 miles.
"Consumers rely on mileage readings to determine the value and safety of used vehicles," said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division. "Victims of odometer fraud lose thousands of dollars on what can turn out to be unreliable and potentially dangerous vehicles. We will continue to prosecute these schemes wherever we find them."
The North Carolina Division of Motor Vehicles and the National Highway Traffic Safety Administration Office of Odometer Fraud Investigation investigated this case. The case is being prosecuted by the Justice Department’s Consumer Protection Branch.
The charges in the information are only allegations, and the defendant is presumed innocent unless and until proven guilty.
Friday, April 12, 2013
North Carolina Man Charged in Odometer Tampering Scheme
In an information made public today, the United States charged Francis Marimo, of Raleigh, N.C., with two counts of odometer tampering.
The information, filed in U.S. District Court for the Eastern District of North Carolina on April 10, 2013, alleges that from 2008 through 2012, Marimo fraudulently caused odometers in used motor vehicles to be altered to reflect false, low mileages. According to the Information, Marimo purchased used vehicles primarily through online advertisements, replaced the existing odometers with odometers showing lower mileages, and then sold the vehicles to consumers while representing the low mileages as accurate. One of the vehicles described in the Information was "rolled back" more than 100,000 miles.
"Consumers rely on mileage readings to determine the value and safety of used vehicles," said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division. "Victims of odometer fraud lose thousands of dollars on what can turn out to be unreliable and potentially dangerous vehicles. We will continue to prosecute these schemes wherever we find them."
The North Carolina Division of Motor Vehicles and the National Highway Traffic Safety Administration Office of Odometer Fraud Investigation investigated this case. The case is being prosecuted by the Justice Department’s Consumer Protection Branch.
The charges in the information are only allegations, and the defendant is presumed innocent unless and until proven guilty.
Wednesday, April 17, 2013
BUSINESSMEN, ATTORNEY CONVICTED FOR HIDING MILLIONS IN FOREIGN BANK ACCOUNTS
FROM: U.S. DEPARTMENT OF JUSTICE
Friday, April 12, 2013
Arizona Businessmen and California Attorney Convicted for Hiding Millions in Secret Foreign Bank Accounts at UBS AG and Pictet & Cie
A jury convicted Stephen M. Kerr and Michael Quiel yesterday on federal tax charges stemming from their failure to disclose secret offshore bank accounts in Switzerland, the Justice Department and Internal Revenue Service (IRS) announced. Kerr and Quiel, prominent Phoenix businessmen, were each convicted of two counts of filing false individual income tax returns for 2007 and 2008 . Kerr was also convicted of two counts of failing to file a Report of Foreign Bank and Financial Accounts (FBAR). San Diego attorney Christopher M. Rusch had previously pleaded guilty to conspiracy to defraud the government and failing to file an FBAR on Feb. 6, 2013.
According to the evidence presented at trial, Kerr and Quiel, with the assistance of Rusch and others, including Swiss nationals, established nominee foreign entities and corresponding bank accounts at UBS AG and Pictet & Cie to conceal Kerr and Quiel’s ownership and control of stock and income that were deposited into these accounts. Rusch testified at trial, admitting that he and others caused the sale of the shares of stock through the undeclared accounts . Kerr also hired Rusch to facilitate the domestic sale of 11.4 million shares of stock held in the name of a foreign entity controlled by Kerr and to transfer the proceeds from the sale of the stock to an undeclared foreign account at UBS AG to conceal that the money was income to Kerr that should have been reported on his tax returns.
The evidence established that in order to create a further layer of separation between Kerr and Quiel and the income they concealed in the undeclared foreign accounts, they directed Rusch to transfer some of the money in the undeclared accounts back to the United States through Rusch’s Interest on Lawyer’s Trust Account (IOLTA) before dispersing the money for Kerr and Quiel’s benefit. Rusch transferred approximately $2,000,000 through his IOLTA account so that Kerr could purchase a golf course in Erie, Colo. Additionally, after transferring approximately $955,000 from Quiel’s undeclared foreign accounts to his IOLTA account, at Quiel’s direction, Rusch wrote checks payable to an Arizona bank account owned and controlled by Quiel.
According to trial evidence, Kerr and Quiel filed false tax returns with the IRS that failed to report the proceeds of stock sales, interest and dividend income earned through the secret accounts, and further failed to report that they had a financial interest in bank accounts located in Switzerland. Kerr also failed to file FBARs in 2007 and 2008 that reported his offshore accounts to the IRS. Accountants for Kerr and Quiel testified that neither Kerr nor Quiel disclosed the existence of their offshore accounts in Switzerland during the preparation of their tax returns.
"Many investigations are underway and focusing upon an ever wider circle of banks worldwide, their clients and others who would help the clients try to hide income and assets offshore," said Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally. "The lesson of today’s guilty verdicts is that no hiding place will prove safe enough."
"This prosecution serves notice that the Department of Justice will not tolerate fraudulent activity designed to undermine the integrity of our income tax system," said U.S. Attorney for the District of Arizona John S. Leonardo.
"Clients, as well as promoters, of international tax fraud are under the watchful scrutiny of the IRS." said Richard Weber, Chief, IRS-Criminal Investigation. "Mr. Kerr and Mr. Quiel disregarded their legal responsibility to file true and accurate tax returns reporting all their income and interest. They now face substantial monetary penalties and the risk of incarceration."
U.S. citizens who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such accounts on Schedule B, Part III, of their individual income tax returns. Additionally, U.S. citizens must file an FBAR with the U.S. Treasury disclosing any financial account in a foreign country with assets in excess of $10,000 in which they have a financial interest, or over which they have signature or other authority.
Sentencing for Kerr and Quiel is scheduled for June 25, 2013. Sentencing for Rusch is scheduled for July 17, 2013.
Friday, April 12, 2013
Arizona Businessmen and California Attorney Convicted for Hiding Millions in Secret Foreign Bank Accounts at UBS AG and Pictet & Cie
A jury convicted Stephen M. Kerr and Michael Quiel yesterday on federal tax charges stemming from their failure to disclose secret offshore bank accounts in Switzerland, the Justice Department and Internal Revenue Service (IRS) announced. Kerr and Quiel, prominent Phoenix businessmen, were each convicted of two counts of filing false individual income tax returns for 2007 and 2008 . Kerr was also convicted of two counts of failing to file a Report of Foreign Bank and Financial Accounts (FBAR). San Diego attorney Christopher M. Rusch had previously pleaded guilty to conspiracy to defraud the government and failing to file an FBAR on Feb. 6, 2013.
According to the evidence presented at trial, Kerr and Quiel, with the assistance of Rusch and others, including Swiss nationals, established nominee foreign entities and corresponding bank accounts at UBS AG and Pictet & Cie to conceal Kerr and Quiel’s ownership and control of stock and income that were deposited into these accounts. Rusch testified at trial, admitting that he and others caused the sale of the shares of stock through the undeclared accounts . Kerr also hired Rusch to facilitate the domestic sale of 11.4 million shares of stock held in the name of a foreign entity controlled by Kerr and to transfer the proceeds from the sale of the stock to an undeclared foreign account at UBS AG to conceal that the money was income to Kerr that should have been reported on his tax returns.
The evidence established that in order to create a further layer of separation between Kerr and Quiel and the income they concealed in the undeclared foreign accounts, they directed Rusch to transfer some of the money in the undeclared accounts back to the United States through Rusch’s Interest on Lawyer’s Trust Account (IOLTA) before dispersing the money for Kerr and Quiel’s benefit. Rusch transferred approximately $2,000,000 through his IOLTA account so that Kerr could purchase a golf course in Erie, Colo. Additionally, after transferring approximately $955,000 from Quiel’s undeclared foreign accounts to his IOLTA account, at Quiel’s direction, Rusch wrote checks payable to an Arizona bank account owned and controlled by Quiel.
According to trial evidence, Kerr and Quiel filed false tax returns with the IRS that failed to report the proceeds of stock sales, interest and dividend income earned through the secret accounts, and further failed to report that they had a financial interest in bank accounts located in Switzerland. Kerr also failed to file FBARs in 2007 and 2008 that reported his offshore accounts to the IRS. Accountants for Kerr and Quiel testified that neither Kerr nor Quiel disclosed the existence of their offshore accounts in Switzerland during the preparation of their tax returns.
"Many investigations are underway and focusing upon an ever wider circle of banks worldwide, their clients and others who would help the clients try to hide income and assets offshore," said Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally. "The lesson of today’s guilty verdicts is that no hiding place will prove safe enough."
"This prosecution serves notice that the Department of Justice will not tolerate fraudulent activity designed to undermine the integrity of our income tax system," said U.S. Attorney for the District of Arizona John S. Leonardo.
"Clients, as well as promoters, of international tax fraud are under the watchful scrutiny of the IRS." said Richard Weber, Chief, IRS-Criminal Investigation. "Mr. Kerr and Mr. Quiel disregarded their legal responsibility to file true and accurate tax returns reporting all their income and interest. They now face substantial monetary penalties and the risk of incarceration."
U.S. citizens who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such accounts on Schedule B, Part III, of their individual income tax returns. Additionally, U.S. citizens must file an FBAR with the U.S. Treasury disclosing any financial account in a foreign country with assets in excess of $10,000 in which they have a financial interest, or over which they have signature or other authority.
Sentencing for Kerr and Quiel is scheduled for June 25, 2013. Sentencing for Rusch is scheduled for July 17, 2013.
Tuesday, April 16, 2013
ATTORNEY GENERAL HOLDER SPEAKS REGARDING EXPLOSIONS IN BOSTON
FROM: U.S. DEPARTMENT OF JUSTICE
Tuesday, April 16, 2013
Statement of Attorney General Eric Holder on the Ongoing Investigation into Explosions in Boston
The Attorney General released the following statement today on the ongoing investigation into the explosions in Boston:
"I want to express my deepest sympathies to the victims of yesterday’s heinous attack in Boston, to those who suffered injuries, and to those who lost friends and loved ones. All of you will be in my thoughts and prayers.
"As our nation struggles to make sense of this attack, I want to assure the citizens of Boston – and all Americans – that the U.S. Department of Justice, the FBI, and all of our federal, state, and local partners are working tirelessly to determine who was responsible for these unspeakable acts, and to make certain they are held accountable to the fullest extent of the law and by any means available to us. To this end, I have directed that the full resources of the Department be deployed to ensure that this matter is fully investigated. We will continue working closely with the Boston Police Department and the Massachusetts State Police – who have performed superbly – to respond to this tragedy, to maintain a heightened state of security, and to prevent any future attacks from occurring.
"As President Obama stated earlier today, we are treating this event as an act of terror. This morning, I met with the President and my fellow members of his national security team to discuss our continuing response. Although it is not yet clear who executed this attack, whether it was an individual or group, or whether it was carried out with support or involvement from a terrorist organization – either foreign or domestic – we will not rest until the perpetrators are brought to justice. The FBI is spearheading a multi-agency investigation through the Boston Joint Terrorism Task Force. They are devoting extensive personnel and assets to this effort – and have already begun conducting exhaustive interviews, analyzing evidence recovered from the scene, and examining video footage for possible leads. In addition, the ATF is providing bomb technicians, explosives assets, and other substantial investigative support. The DEA and U.S. Marshals Service are providing further assistance. And the Office of Justice Programs will coordinate victim support that the City of Boston and the Commonwealth of Massachusetts may request under the Anti-terrorism Emergency Assistance Program.
"As our active and comprehensive investigation unfolds, these federal assets are coordinating with prosecutors from the U.S. Attorney’s Office for the District of Massachusetts, the Justice Department’s National Security Division, and federal agencies across the government – including members of the Intelligence Community. This matter is still in the early stages, and it’s important that we let the investigation run its full course. I urge members of the public to remain calm, cooperate with law enforcement, and be vigilant. The FBI has set up a tip line – at 1-800-CALL-FBI – for anyone who has information, images, or details relating to yesterday’s explosions along the Boston Marathon route. We are particularly interested in reviewing video footage captured by bystanders with cell phones or personal cameras near either of the blasts. In an investigation of this nature, no detail is too small.
"Finally, I want to recognize and thank all of the brave law enforcement officials, firefighters, National Guardsmen, medical staff, bystanders, and other first responders in Boston yesterday afternoon who heard the explosions, or received reports of casualties, or saw the shattered glass and rising smoke, and rushed to provide assistance to those in need.
"Each of these remarkable women and men placed the safety of others above their own. Their heroic actions undoubtedly saved lives. And their stories of courage and selflessness remind us that – even in our darkest moments – the American people have always displayed an extraordinary capacity for resilience. We will always be strongest when we stand united. And although today our hearts are broken, my colleagues and I are resolved to bring those responsible for this cowardly act to justice. We will be relentless in our pursuit of the individual or group that carried out this attack, while staying true to our most sacred values. And – as our investigation continues, I am confident that our nation will recover, and that we will emerge from this terrible tragedy not only safer, but stronger, than ever before."
Tuesday, April 16, 2013
Statement of Attorney General Eric Holder on the Ongoing Investigation into Explosions in Boston
The Attorney General released the following statement today on the ongoing investigation into the explosions in Boston:
"I want to express my deepest sympathies to the victims of yesterday’s heinous attack in Boston, to those who suffered injuries, and to those who lost friends and loved ones. All of you will be in my thoughts and prayers.
"As our nation struggles to make sense of this attack, I want to assure the citizens of Boston – and all Americans – that the U.S. Department of Justice, the FBI, and all of our federal, state, and local partners are working tirelessly to determine who was responsible for these unspeakable acts, and to make certain they are held accountable to the fullest extent of the law and by any means available to us. To this end, I have directed that the full resources of the Department be deployed to ensure that this matter is fully investigated. We will continue working closely with the Boston Police Department and the Massachusetts State Police – who have performed superbly – to respond to this tragedy, to maintain a heightened state of security, and to prevent any future attacks from occurring.
"As President Obama stated earlier today, we are treating this event as an act of terror. This morning, I met with the President and my fellow members of his national security team to discuss our continuing response. Although it is not yet clear who executed this attack, whether it was an individual or group, or whether it was carried out with support or involvement from a terrorist organization – either foreign or domestic – we will not rest until the perpetrators are brought to justice. The FBI is spearheading a multi-agency investigation through the Boston Joint Terrorism Task Force. They are devoting extensive personnel and assets to this effort – and have already begun conducting exhaustive interviews, analyzing evidence recovered from the scene, and examining video footage for possible leads. In addition, the ATF is providing bomb technicians, explosives assets, and other substantial investigative support. The DEA and U.S. Marshals Service are providing further assistance. And the Office of Justice Programs will coordinate victim support that the City of Boston and the Commonwealth of Massachusetts may request under the Anti-terrorism Emergency Assistance Program.
"As our active and comprehensive investigation unfolds, these federal assets are coordinating with prosecutors from the U.S. Attorney’s Office for the District of Massachusetts, the Justice Department’s National Security Division, and federal agencies across the government – including members of the Intelligence Community. This matter is still in the early stages, and it’s important that we let the investigation run its full course. I urge members of the public to remain calm, cooperate with law enforcement, and be vigilant. The FBI has set up a tip line – at 1-800-CALL-FBI – for anyone who has information, images, or details relating to yesterday’s explosions along the Boston Marathon route. We are particularly interested in reviewing video footage captured by bystanders with cell phones or personal cameras near either of the blasts. In an investigation of this nature, no detail is too small.
"Finally, I want to recognize and thank all of the brave law enforcement officials, firefighters, National Guardsmen, medical staff, bystanders, and other first responders in Boston yesterday afternoon who heard the explosions, or received reports of casualties, or saw the shattered glass and rising smoke, and rushed to provide assistance to those in need.
"Each of these remarkable women and men placed the safety of others above their own. Their heroic actions undoubtedly saved lives. And their stories of courage and selflessness remind us that – even in our darkest moments – the American people have always displayed an extraordinary capacity for resilience. We will always be strongest when we stand united. And although today our hearts are broken, my colleagues and I are resolved to bring those responsible for this cowardly act to justice. We will be relentless in our pursuit of the individual or group that carried out this attack, while staying true to our most sacred values. And – as our investigation continues, I am confident that our nation will recover, and that we will emerge from this terrible tragedy not only safer, but stronger, than ever before."
OWNER OF TAX PREPARATION BUSINESS PLEADS GUILTY TO PREPARING FALSE TAX RETURN
FROM: U.S. DEPARTMENT OF JUSTICE
Thursday, April 11, 2013
Former New Jersey Resident Convicted of Preparing False Tax Return
Ashraf Hassan-Gouda, a former resident of Mays Landing, N.J., pleaded guilty to one count of assisting in the preparation of a false federal individual income tax return, the Justice Department and Internal Revenue Service (IRS) announced today. Hassan-Gouda was charged by a federal indictment returned on March 27, 2007.
According to court documents, during 2003, Hassan-Gouda was the owner of Tax World, a tax preparation business located in Atlantic City, N.J. Hassan-Gouda prepared the false tax return for a client at his business.
The matter had been scheduled for trial beginning May 6, 2013 before U.S. District Court Chief Judge Jerome B. Simandle in Camden, N.J. Sentencing is scheduled for June 17, 2013. Hassan-Gouda faces a maximum potential sentence of three years imprisonment and a fine of up to $250,000.
Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally thanked special agents of IRS - Criminal Investigation, for investigating the case, and Tax Division Trial Attorneys Yael Epstein, Thomas Voracek and Shawn Noud, who prosecuted the case.
Thursday, April 11, 2013
Former New Jersey Resident Convicted of Preparing False Tax Return
Ashraf Hassan-Gouda, a former resident of Mays Landing, N.J., pleaded guilty to one count of assisting in the preparation of a false federal individual income tax return, the Justice Department and Internal Revenue Service (IRS) announced today. Hassan-Gouda was charged by a federal indictment returned on March 27, 2007.
According to court documents, during 2003, Hassan-Gouda was the owner of Tax World, a tax preparation business located in Atlantic City, N.J. Hassan-Gouda prepared the false tax return for a client at his business.
The matter had been scheduled for trial beginning May 6, 2013 before U.S. District Court Chief Judge Jerome B. Simandle in Camden, N.J. Sentencing is scheduled for June 17, 2013. Hassan-Gouda faces a maximum potential sentence of three years imprisonment and a fine of up to $250,000.
Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally thanked special agents of IRS - Criminal Investigation, for investigating the case, and Tax Division Trial Attorneys Yael Epstein, Thomas Voracek and Shawn Noud, who prosecuted the case.
Monday, April 15, 2013
FORMER REGIONAL DIRECTOR OF FEDERAL PROTECTIVE SERVICE PLEADS GUILTY TO ACCEPTING BRIBES
FROM: U.S. DEPARTMENT OF JUSTICE
Thursday, April 11, 2013
Former Regional Director of Federal Protective Service Pleads Guilty to Accepting Bribes from Government Contractor
Derek Matthews, 46, of Harwood, Md., pleaded guilty today to accepting bribes from a government contracting company in exchange for using his position to help the company find and win contracts.
Neil H. MacBride, U. S. Attorney for the Eastern District of Virginia, Mythili Raman, Acting Assistant Attorney General for the Justice Department’s Criminal Division, and Charles K. Edwards, U.S. Department of Homeland Security (DHS) Deputy Inspector General, made the announcement after the plea was accepted by U.S. District Judge Leonie M. Brinkema.
Matthews was charged by criminal information on April 11, 2013, with one count of conspiracy to commit bribery. Matthews faces a maximum penalty of five years in prison when he is sentenced on July 19, 2013.
Matthews served as Deputy Assistant Director for Operations for the DHS’s Federal Protective Services (FPS) and was later promoted to FPS Regional Director for the National Capital Region. In the fall of 2011, Matthews agreed with Keith Hedman, an executive at an Arlington, Va., security service consulting company referred to as Company B in court records, that in exchange for a monthly payment from Company B and a percentage of any new business obtained, Matthews would use his position to help Company B find and win U.S. government contracts, including with FPS. Matthews engaged in a series of official acts, including lobbying of government officials and sharing of information with Hedman, in an effort to obtain business for Hedman and Company B. In turn, Hedman and Company B paid Matthews three monthly payments totaling $12,500.
Hedman pleaded guilty on March 18, 2013, to conspiracy to commit bribery in connection with Matthews’ scheme, along with conspiracy to commit major government fraud as part of a separate scheme to fraudulently obtain more than $31 million in government contract payments that should have gone to disadvantaged small businesses.
This case was investigated by the Washington Field Office for the DHS Office of the Inspector General (OIG), the National Aeronautics and Space Administration OIG, the Small Business Administration OIG, the Defense Criminal Investigative Service, and the General Services Administration OIG. Assistant U.S. Attorneys Chad Golder and Ryan Faulconer are prosecuting the case on behalf of the United States.
Thursday, April 11, 2013
Former Regional Director of Federal Protective Service Pleads Guilty to Accepting Bribes from Government Contractor
Derek Matthews, 46, of Harwood, Md., pleaded guilty today to accepting bribes from a government contracting company in exchange for using his position to help the company find and win contracts.
Neil H. MacBride, U. S. Attorney for the Eastern District of Virginia, Mythili Raman, Acting Assistant Attorney General for the Justice Department’s Criminal Division, and Charles K. Edwards, U.S. Department of Homeland Security (DHS) Deputy Inspector General, made the announcement after the plea was accepted by U.S. District Judge Leonie M. Brinkema.
Matthews was charged by criminal information on April 11, 2013, with one count of conspiracy to commit bribery. Matthews faces a maximum penalty of five years in prison when he is sentenced on July 19, 2013.
Matthews served as Deputy Assistant Director for Operations for the DHS’s Federal Protective Services (FPS) and was later promoted to FPS Regional Director for the National Capital Region. In the fall of 2011, Matthews agreed with Keith Hedman, an executive at an Arlington, Va., security service consulting company referred to as Company B in court records, that in exchange for a monthly payment from Company B and a percentage of any new business obtained, Matthews would use his position to help Company B find and win U.S. government contracts, including with FPS. Matthews engaged in a series of official acts, including lobbying of government officials and sharing of information with Hedman, in an effort to obtain business for Hedman and Company B. In turn, Hedman and Company B paid Matthews three monthly payments totaling $12,500.
Hedman pleaded guilty on March 18, 2013, to conspiracy to commit bribery in connection with Matthews’ scheme, along with conspiracy to commit major government fraud as part of a separate scheme to fraudulently obtain more than $31 million in government contract payments that should have gone to disadvantaged small businesses.
This case was investigated by the Washington Field Office for the DHS Office of the Inspector General (OIG), the National Aeronautics and Space Administration OIG, the Small Business Administration OIG, the Defense Criminal Investigative Service, and the General Services Administration OIG. Assistant U.S. Attorneys Chad Golder and Ryan Faulconer are prosecuting the case on behalf of the United States.
Sunday, April 14, 2013
INTERNET PIRACY GROUP MEMBER SENTENCED TO 23 MONTHS IN PRISON
FROM: U.S. DEPARTMENT OF JUSTICE
Wednesday, April 10, 2013
Member of Internet Piracy Group "IMAGiNE" Sentenced in Virginia to 23 Months in Prison for Criminal Copyright Conspiracy
A member of the Internet piracy group "IMAGiNE" was sentenced today to serve 23 months in prison, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of Virginia Neil H. MacBride and Special Agent in Charge John P. Torres of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) in Washington, D.C.
Javier E. Ferrer, 41, of New Port Richey, Fla., was sentenced by Senior U.S. District Judge Henry C. Morgan in the Eastern District of Virginia. In addition to his prison term, Ferrer was sentenced to serve three years of supervised release and ordered to pay $15,000 in restitution.
On Nov. 29, 2012, Ferrer pleaded guilty to one count of conspiracy to commit criminal copyright infringement. Ferrer is the fifth member of the IMAGiNE Group who has been sentenced to prison for the copyright conspiracy.
On Sept. 13, 2012, Ferrer was charged in a criminal information for his role in the IMAGiNE Group, an organized online piracy ring that sought to become the premier group to first release Internet copies of movies only showing in theaters. Four other IMAGiNE Group members, including the group’s leader, were indicted on April 18, 2012, for their roles in the IMAGiNE Group.
According to court documents, Ferrer and his co-conspirators sought to illegally obtain and disseminate digital copies of copyrighted motion pictures showing in theaters. Ferrer actively participated in the IMAGiNE Group’s illegal efforts to film copyrighted motion pictures currently showing in theaters as his co-conspirators used receivers and recording devices to secretly capture audio sound tracks of copyrighted movies playing in movie theaters. After the IMAGiNE Group obtained illegal copies of the audio and video portions of copyrighted motion pictures, Ferrer and his co-conspirators also engaged in processing or "encoding" the video files to enhance the picture quality and in synchronizing the audio files with the video files to make completed movies suitable for reproduction and distribution over the Internet, without the permission of the copyright owners.
According to testimony by a representative of the Motion Picture Association of America, the IMAGiNE Group constituted the most prolific motion picture piracy release group operating on the Internet from September 2009 through September 2011.
Co-defendants Sean M. Lovelady, Willie O. Lambert, Gregory A. Cherwonik and Jeramiah B. Perkins pleaded guilty on May 9, June 22, July 11 and Aug. 29, 2012, respectively, to one count each of conspiracy to commit criminal copyright infringement, before U.S. District Judge Arenda L. Wright Allen in the Eastern District of Virginia . Lambert and Lovelady were sentenced on Nov. 2, 2012, to serve 30 months and 23 months in prison, respectively. Cherwonik was sentenced on Nov. 29, 2012, to serve 40 months in prison. Perkins, the leader of the group, was sentenced on Jan. 3, 2013, to 60 months in prison.
The investigation of the case and the arrests were conducted by agents with the HIS Washington, D.C., Field Office. Assistant U.S. Attorney Robert J. Krask of the Eastern District of Virginia and Senior Counsel John H. Zacharia of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) are prosecuting the case. Significant assistance was provided by the CCIPS Cyber Crime Lab and the Criminal Division’s Office of International Affairs.
This case is part of efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force) to stop the theft of intellectual property. Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders.
This investigation was supported by the HSI-led National Intellectual Property Rights Coordination Center (IPR Center) in Washington. The IPR Center is one of the U.S. government's key weapons in the fight against counterfeiting and piracy. Working in close coordination with the Department of Justice’s IP Task Force, the IPR Center uses the expertise of its 21-member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to IP theft. Through this strategic interagency partnership, the IPR Center protects the public's health and safety, the U.S. economy and our war fighters.
Wednesday, April 10, 2013
Member of Internet Piracy Group "IMAGiNE" Sentenced in Virginia to 23 Months in Prison for Criminal Copyright Conspiracy
A member of the Internet piracy group "IMAGiNE" was sentenced today to serve 23 months in prison, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of Virginia Neil H. MacBride and Special Agent in Charge John P. Torres of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) in Washington, D.C.
Javier E. Ferrer, 41, of New Port Richey, Fla., was sentenced by Senior U.S. District Judge Henry C. Morgan in the Eastern District of Virginia. In addition to his prison term, Ferrer was sentenced to serve three years of supervised release and ordered to pay $15,000 in restitution.
On Nov. 29, 2012, Ferrer pleaded guilty to one count of conspiracy to commit criminal copyright infringement. Ferrer is the fifth member of the IMAGiNE Group who has been sentenced to prison for the copyright conspiracy.
On Sept. 13, 2012, Ferrer was charged in a criminal information for his role in the IMAGiNE Group, an organized online piracy ring that sought to become the premier group to first release Internet copies of movies only showing in theaters. Four other IMAGiNE Group members, including the group’s leader, were indicted on April 18, 2012, for their roles in the IMAGiNE Group.
According to court documents, Ferrer and his co-conspirators sought to illegally obtain and disseminate digital copies of copyrighted motion pictures showing in theaters. Ferrer actively participated in the IMAGiNE Group’s illegal efforts to film copyrighted motion pictures currently showing in theaters as his co-conspirators used receivers and recording devices to secretly capture audio sound tracks of copyrighted movies playing in movie theaters. After the IMAGiNE Group obtained illegal copies of the audio and video portions of copyrighted motion pictures, Ferrer and his co-conspirators also engaged in processing or "encoding" the video files to enhance the picture quality and in synchronizing the audio files with the video files to make completed movies suitable for reproduction and distribution over the Internet, without the permission of the copyright owners.
According to testimony by a representative of the Motion Picture Association of America, the IMAGiNE Group constituted the most prolific motion picture piracy release group operating on the Internet from September 2009 through September 2011.
Co-defendants Sean M. Lovelady, Willie O. Lambert, Gregory A. Cherwonik and Jeramiah B. Perkins pleaded guilty on May 9, June 22, July 11 and Aug. 29, 2012, respectively, to one count each of conspiracy to commit criminal copyright infringement, before U.S. District Judge Arenda L. Wright Allen in the Eastern District of Virginia . Lambert and Lovelady were sentenced on Nov. 2, 2012, to serve 30 months and 23 months in prison, respectively. Cherwonik was sentenced on Nov. 29, 2012, to serve 40 months in prison. Perkins, the leader of the group, was sentenced on Jan. 3, 2013, to 60 months in prison.
The investigation of the case and the arrests were conducted by agents with the HIS Washington, D.C., Field Office. Assistant U.S. Attorney Robert J. Krask of the Eastern District of Virginia and Senior Counsel John H. Zacharia of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) are prosecuting the case. Significant assistance was provided by the CCIPS Cyber Crime Lab and the Criminal Division’s Office of International Affairs.
This case is part of efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force) to stop the theft of intellectual property. Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders.
This investigation was supported by the HSI-led National Intellectual Property Rights Coordination Center (IPR Center) in Washington. The IPR Center is one of the U.S. government's key weapons in the fight against counterfeiting and piracy. Working in close coordination with the Department of Justice’s IP Task Force, the IPR Center uses the expertise of its 21-member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to IP theft. Through this strategic interagency partnership, the IPR Center protects the public's health and safety, the U.S. economy and our war fighters.
Saturday, April 13, 2013
HOMELAND SECURITY OIG SPECIAL AGENT INDICTED FOR CONSPIRACY, OBSTRUCTION OF JUSTICE AND RECORDS FALSIFICATION
FROM: U.S. DEPARTMENT OF JUSTICE
Tuesday, April 9, 2013
Former Department of Homeland Security Office of Inspector General Special Agent in Charge Indicted in Texas for Role in Records Falsification Scheme
A former U.S. Department of Homeland Security Office of Inspector General (DHS-OIG) special agent in charge and another special agent were indicted in the Southern District of Texas late yesterday for their roles in a scheme to falsify records and to obstruct an internal field office inspection, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and Special Agent in Charge Armando Fernandez of the FBI San Antonio Field Office.
The indictment returned by a federal grand jury in Brownsville, Texas, charges Eugenio Pedraza, 49, of McAllen, Texas, with six counts of falsification of records in federal investigations, five counts of obstructing an agency proceeding, one count of obstruction of justice and one count of conspiracy. The indictment also charges Marco Rodriguez, 40, of Mission, Texas, with two counts of falsification of records in federal investigations, two counts of obstructing an agency proceeding and one count of conspiracy.
DHS-OIG is the principal component within DHS with the responsibility to investigate alleged criminal activity by DHS employees, including corruption affecting the integrity of U.S. borders.
According to the indictment, in September 2011, DHS-OIG conducted an internal inspection of its McAllen Field Office to evaluate whether its internal investigative standards and policies were being followed. At that time, Pedraza was the special agent in charge of the McAllen Field Office, and Rodriguez was a special agent stationed there. According to the indictment, in anticipation of the inspection, Pedraza allegedly directed Rodriguez and other DHS-OIG employees to engage in a scheme to falsify documents in open criminal investigative case files, including numerous investigations in which DHS employees were suspected of participating in the unlawful smuggling of undocumented aliens and/or narcotics into the United States.
More specifically, the indictment charges that at Pedraza’s direction, DHS-OIG employees allegedly created and placed into these investigative files backdated memoranda of activity that falsely reflected investigative activity by agents that had not occurred; backdated case review worksheets that falsely reflected supervisory case reviews that Pedraza had not conducted with his subordinate agents; and backdated, unsent letters that were signed by Pedraza and purported to inform the FBI of the opening of a DHS-OIG investigation.
According to the indictment, the scheme’s purpose was to conceal severe lapses in DHS-OIG’s investigative standards from individuals conducting an internal field office inspection. The scheme was allegedly devised to conceal Pedraza’s failure to ensure that investigations were being conducted promptly and thoroughly, his failure to provide his subordinates with adequate training and supervision, and his failure to ensure that the FBI was being timely notified of DHS-OIG’s investigations.
The indictment also charges Pedraza with allegedly directing two DHS-OIG employees to falsify memoranda of activity on additional occasions, and with obstructing justice by removing the falsified supervisory case review sheets that he had created from DHS-OIG files after becoming aware of the FBI and grand jury investigation into his conduct.
In a related case, on Jan. 17, 2013, Wayne Ball, a former DHS-OIG special agent, pleaded guilty in U.S. District Court for the Southern District of Texas before U.S. District Judge Randy Crane to one count of a multi-object conspiracy to falsify records in federal investigations and to obstruct an agency proceeding for his participation in the scheme. Ball is scheduled to be sentenced on July 31, 2013.
The charge of falsification of records in federal investigations carries a maximum penalty of 20 years in prison. The charge of obstructing an agency proceeding carries a maximum penalty of five years in prison. The charge of obstruction of justice carries a maximum penalty of 20 years in prison. The charge of conspiracy carries a maximum penalty of five years in prison. Each of these charges carry a maximum fine of $250,000.
An indictment is not evidence of guilt. All defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The case is being prosecuted by Trial Attorneys Eric L. Gibson and Timothy J. Kelly of the Criminal Division’s Public Integrity Section. The case is being investigated by agents of the FBI, San Antonio Division.
Tuesday, April 9, 2013
Former Department of Homeland Security Office of Inspector General Special Agent in Charge Indicted in Texas for Role in Records Falsification Scheme
A former U.S. Department of Homeland Security Office of Inspector General (DHS-OIG) special agent in charge and another special agent were indicted in the Southern District of Texas late yesterday for their roles in a scheme to falsify records and to obstruct an internal field office inspection, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and Special Agent in Charge Armando Fernandez of the FBI San Antonio Field Office.
The indictment returned by a federal grand jury in Brownsville, Texas, charges Eugenio Pedraza, 49, of McAllen, Texas, with six counts of falsification of records in federal investigations, five counts of obstructing an agency proceeding, one count of obstruction of justice and one count of conspiracy. The indictment also charges Marco Rodriguez, 40, of Mission, Texas, with two counts of falsification of records in federal investigations, two counts of obstructing an agency proceeding and one count of conspiracy.
DHS-OIG is the principal component within DHS with the responsibility to investigate alleged criminal activity by DHS employees, including corruption affecting the integrity of U.S. borders.
According to the indictment, in September 2011, DHS-OIG conducted an internal inspection of its McAllen Field Office to evaluate whether its internal investigative standards and policies were being followed. At that time, Pedraza was the special agent in charge of the McAllen Field Office, and Rodriguez was a special agent stationed there. According to the indictment, in anticipation of the inspection, Pedraza allegedly directed Rodriguez and other DHS-OIG employees to engage in a scheme to falsify documents in open criminal investigative case files, including numerous investigations in which DHS employees were suspected of participating in the unlawful smuggling of undocumented aliens and/or narcotics into the United States.
More specifically, the indictment charges that at Pedraza’s direction, DHS-OIG employees allegedly created and placed into these investigative files backdated memoranda of activity that falsely reflected investigative activity by agents that had not occurred; backdated case review worksheets that falsely reflected supervisory case reviews that Pedraza had not conducted with his subordinate agents; and backdated, unsent letters that were signed by Pedraza and purported to inform the FBI of the opening of a DHS-OIG investigation.
According to the indictment, the scheme’s purpose was to conceal severe lapses in DHS-OIG’s investigative standards from individuals conducting an internal field office inspection. The scheme was allegedly devised to conceal Pedraza’s failure to ensure that investigations were being conducted promptly and thoroughly, his failure to provide his subordinates with adequate training and supervision, and his failure to ensure that the FBI was being timely notified of DHS-OIG’s investigations.
The indictment also charges Pedraza with allegedly directing two DHS-OIG employees to falsify memoranda of activity on additional occasions, and with obstructing justice by removing the falsified supervisory case review sheets that he had created from DHS-OIG files after becoming aware of the FBI and grand jury investigation into his conduct.
In a related case, on Jan. 17, 2013, Wayne Ball, a former DHS-OIG special agent, pleaded guilty in U.S. District Court for the Southern District of Texas before U.S. District Judge Randy Crane to one count of a multi-object conspiracy to falsify records in federal investigations and to obstruct an agency proceeding for his participation in the scheme. Ball is scheduled to be sentenced on July 31, 2013.
The charge of falsification of records in federal investigations carries a maximum penalty of 20 years in prison. The charge of obstructing an agency proceeding carries a maximum penalty of five years in prison. The charge of obstruction of justice carries a maximum penalty of 20 years in prison. The charge of conspiracy carries a maximum penalty of five years in prison. Each of these charges carry a maximum fine of $250,000.
An indictment is not evidence of guilt. All defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The case is being prosecuted by Trial Attorneys Eric L. Gibson and Timothy J. Kelly of the Criminal Division’s Public Integrity Section. The case is being investigated by agents of the FBI, San Antonio Division.
Friday, April 12, 2013
FORMER CORRECTIONAL OFFICERS PLEAD GUILTY FOR ROLES IN INMATE ASSAULT
FROM: U.S. DEPARTMENT OF JUSTICE
Thursday, April 4, 2013
Two Former Roxbury Correctional Officers Plead Guilty in Connection with Assault of an Inmate
Walter Scott Steele, a former correctional officer at Roxbury Correctional Institution (RCI), and Lanny Harris, a former correction sergeant at RCI in Hagerstown, Md., pleaded guilty today in relation to assaults against an inmate on March 9, 2008. Harris pleaded guilty to conspiring with other RCI officers to assault an inmate at the state prison on March 9, 2008. Steele pleaded guilty to conspiring with RCI officers to obstruct the investigation into an assault against an inmate on March 9, 2008, and to making a false statement to an FBI agent investigating the assault. With these pleas, five former RCI correctional officers have pleaded guilty and 10 others face charges.
According to court documents filed in connection with his guilty plea, Steele admitted that, during the midnight shift on March 8-9, 2008, he heard RCI officers discuss assaulting the inmate, identified in court documents only as "K.D.," in retaliation for K.D.’s prior assault of another officer. Steele warned the group that they would get caught if they assaulted the inmate.
Additionally, according to court documents filed in connection with his guilty plea, Harris and other officers met at RCI during the midnight shift and agreed to assault K.D. in retaliation for a prior incident involving the inmate and another officer. Harris admitted that he and three other correctional officers then entered K.D.’s cell in order to assault inmate K.D., while a fourth officer watched. Officers then assaulted K.D. while Steele watched.
Steele admitted that he later learned that officers from the midnight shift were meeting at a McDonald’s restaurant to talk about the assault on inmate K.D. Steele acknowledged meeting Harris and other RCI officers who had been involved in the assault, and discussing what they were going to say to investigators. Steele agreed to tell investigators that he did not know about an assault on inmate K.D.
Steele admitted in court that he lied to federal investigators on Feb. 12, 2013, by falsely denying that he had discussed K.D. with other RCI officers from the midnight shift. Steele also acknowledged that he failed to tell federal investigators that he had seen other officers assault K.D.
"Mr. Harris admitted today that, as a supervisor, he conspired with other officers to assault an inmate in order to punish the inmate for hitting an officer. Mr. Steele, meanwhile, has admitted that, after he watched his fellow correctional officers use force to punish the inmate, he then agreed to help those officers cover up their misconduct," said Roy L. Austin Jr., Deputy Assistant Attorney General for the Civil Rights Division. "The Justice Department will continue to vigorously prosecute officers who use their official position to abuse inmates or to cover up crimes committed by other officers."
Steele faces a maximum penalty of 10 years in prison. Harris faces a maximum penalty of five years in prison. Sentencing for Steele is set for July 9, 2013, and sentencing for Harris is set for Aug. 2, 2013, both before U.S. District Judge James K. Bredar.
The investigation by the Frederick Resident Agency of the FBI is ongoing. The case is being prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorney Sanjay Patel of the Civil Rights Division of the Department of Justice, with the assistance of Michael Cunningham of the U.S. Attorney’s Office for the District of Maryland.
Thursday, April 4, 2013
Two Former Roxbury Correctional Officers Plead Guilty in Connection with Assault of an Inmate
Walter Scott Steele, a former correctional officer at Roxbury Correctional Institution (RCI), and Lanny Harris, a former correction sergeant at RCI in Hagerstown, Md., pleaded guilty today in relation to assaults against an inmate on March 9, 2008. Harris pleaded guilty to conspiring with other RCI officers to assault an inmate at the state prison on March 9, 2008. Steele pleaded guilty to conspiring with RCI officers to obstruct the investigation into an assault against an inmate on March 9, 2008, and to making a false statement to an FBI agent investigating the assault. With these pleas, five former RCI correctional officers have pleaded guilty and 10 others face charges.
According to court documents filed in connection with his guilty plea, Steele admitted that, during the midnight shift on March 8-9, 2008, he heard RCI officers discuss assaulting the inmate, identified in court documents only as "K.D.," in retaliation for K.D.’s prior assault of another officer. Steele warned the group that they would get caught if they assaulted the inmate.
Additionally, according to court documents filed in connection with his guilty plea, Harris and other officers met at RCI during the midnight shift and agreed to assault K.D. in retaliation for a prior incident involving the inmate and another officer. Harris admitted that he and three other correctional officers then entered K.D.’s cell in order to assault inmate K.D., while a fourth officer watched. Officers then assaulted K.D. while Steele watched.
Steele admitted that he later learned that officers from the midnight shift were meeting at a McDonald’s restaurant to talk about the assault on inmate K.D. Steele acknowledged meeting Harris and other RCI officers who had been involved in the assault, and discussing what they were going to say to investigators. Steele agreed to tell investigators that he did not know about an assault on inmate K.D.
Steele admitted in court that he lied to federal investigators on Feb. 12, 2013, by falsely denying that he had discussed K.D. with other RCI officers from the midnight shift. Steele also acknowledged that he failed to tell federal investigators that he had seen other officers assault K.D.
"Mr. Harris admitted today that, as a supervisor, he conspired with other officers to assault an inmate in order to punish the inmate for hitting an officer. Mr. Steele, meanwhile, has admitted that, after he watched his fellow correctional officers use force to punish the inmate, he then agreed to help those officers cover up their misconduct," said Roy L. Austin Jr., Deputy Assistant Attorney General for the Civil Rights Division. "The Justice Department will continue to vigorously prosecute officers who use their official position to abuse inmates or to cover up crimes committed by other officers."
Steele faces a maximum penalty of 10 years in prison. Harris faces a maximum penalty of five years in prison. Sentencing for Steele is set for July 9, 2013, and sentencing for Harris is set for Aug. 2, 2013, both before U.S. District Judge James K. Bredar.
The investigation by the Frederick Resident Agency of the FBI is ongoing. The case is being prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorney Sanjay Patel of the Civil Rights Division of the Department of Justice, with the assistance of Michael Cunningham of the U.S. Attorney’s Office for the District of Maryland.
Thursday, April 11, 2013
MAN PLEADS GUILTY FOR PART IN NATIONWIDE FORECLOSURE SCAM
FROM: U.S. DEPARTMENT OF JUSTICE
Monday, April 8, 2013
Former Federal Fugitive Pleads Guilty in California to Massive Fraud and Identity Theft Scheme in Connection with Nationwide Foreclosure Scam Defendant Collected More Than $1.2 Million from More Than 800 Distressed Homeowners
A former Los Angeles resident, who fled to Canada and was a federal fugitive for 12 years, pleaded guilty today to aggravated identity theft and bankruptcy fraud in connection with leading a nearly 15-year foreclosure-rescue scam that fraudulently postponed foreclosure sales for more than 800 distressed homeowners, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the Central District of California André Birotte Jr., U.S. Attorney for the Northern District of California Melinda Haag, Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office, Special Agent in Charge David J. Johnson of the FBI’s San Francisco Field Office and Christy Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP).
Glen Alan Ward, 48, pleaded guilty in connection with three separate sets of charges in the Central and Northern Districts of California, all stemming from Ward’s 15-year fraud. In 2000, Ward became a federal fugitive when he failed to appear in court after signing a plea agreement, which arose out of federal charges in 2000 in the Central District of California related to Ward’s early conduct in the scheme. In 2002, Ward was indicted on multiple counts of bankruptcy fraud in the Northern District of California for continuing the scheme in and around San Francisco. On Aug. 17, 2012, Ward was indicted on mail fraud, aggravated identity theft, and additional bankruptcy fraud counts in the Central District of California after fleeing to Canada and continuing his fraud from there. While in Canada, Ward recruited Frederic Alan Gladle, who was indicted in the Central District of California for bankruptcy fraud and identity theft in 2011, and was sentenced in 2012 to 61 months in custody for engaging in similar conduct.
On April 5, 2012, Ward was arrested in Canada by the Royal Canadian Mounted Police and the Waterloo Regional Police Service based on a U.S. provisional arrest warrant. On Dec. 21, 2012, Ward was extradited to the United States to answer all three sets of charges.
"Glen Alan Ward spent years preying on distressed homeowners and stealing the identities of bankruptcy debtors, all to pad his own pockets," said Acting Assistant Attorney General Raman. "Now he faces years in prison for his crimes. This successful prosecution illustrates our commitment to tirelessly pursuing fraudsters and ensuring that sophisticated schemes that prey on vulnerable homeowners will not go unpunished."
"Mr. Ward fled the United States years ago in an attempt to keep his fraudulent foreclosure scheme running," said United States Attorney André Birotte Jr. "Today's conviction should serve as a reminder that criminals can run, but they can't hide. The reach of the federal law is long and scammers like Ward, who try to take advantage of distressed homeowners, will be tracked down and prosecuted regardless of their efforts to do otherwise."
According to the plea agreement filed today before U.S. District Judge Dale S. Fischer in the Central District of California, Ward admitted to engaging in a fraud scheme that took place from 1997 to April 5, 2012, the day he was arrested by Canadian authorities. According to the plea agreement, Ward led a scheme that solicited and recruited homeowners whose properties were in danger of imminent foreclosure. Ward promised to delay their foreclosures for as long as the homeowners could afford his $700 monthly fee. Once a homeowner paid the fee, Ward accessed a public bankruptcy database and retrieved the name of an individual debtor who recently filed bankruptcy. Ward admitted that he obtained copies of unsuspecting debtors’ bankruptcy petitions and directed his clients to execute, notarize and record a grant deed transferring generally a 1/100th fractional interest in their distressed home into the name of the debtor that Ward provided. Then, after stealing the debtor’s identity, Ward faxed a copy of the bankruptcy petition, the notarized grant deed and a cover letter to the homeowner’s lender or the lender’s representative, directing it to stop the impending foreclosure sale due to the bankruptcy.
Because bankruptcy filings give rise to automatic stays that protect debtors’ properties, the receipt of the bankruptcy petitions and deeds in the debtors’ names forced lenders to cancel foreclosure sales. The lenders, which included banks that received government funds under the Troubled Asset Relief Program (TARP), could not move forward to collect money that was owed to them until getting permission from the bankruptcy courts, thereby repeatedly delaying the lenders’ recovery of their money for months and even years. In addition, if a distressed homeowner wanted to complete a loan modification or short sale, they were left to the mercy of Ward to send them forged deeds, supposedly signed by the debtors, to re-unify their title as required by most lenders.
As part of the scheme, Ward delayed the foreclosure sales of approximately 824 distressed properties by using at least 414 bankruptcies filed in 26 judicial districts across the country. During that same period, Ward admitted to collecting more than $1.2 million from his clients who paid for his illegal foreclosure-delay services, all of which he has agreed to forfeit.
"Today's announcement is the result of a collaborative international effort and the FBI is grateful to our partners with the Royal Canadian Mounted Police and the Waterloo Regional Police for their assistance in the fugitive investigation and apprehension," said Bill Lewis, the Assistant Director in Charge of the FBI's Los Angeles Field Office. "Mr. Ward's long-term scheme is an extreme example of calculated fraud based on greed, and I'm proud of the persistence shown by our federal partners at SIGTARP, the Office of United States Trustees, and the United States Attorney's Office, in pursuing this case to its successful end."
"We are committed to pursuing those who defraud the most vulnerable victims of the real estate market," said FBI San Francisco Special Agent in Charge David J. Johnson. "This is an excellent example of how closely we work with our law enforcement partners here and abroad to ensure that criminals are brought to justice."
"With today’s plea, justice is served for the victims of Ward’s long-running bankruptcy fraud scheme," said Christy Romero, Special Inspector General for TARP (SIGTARP). "While on the run for 12 years and having fled to Canada to avoid answering for earlier charges of bankruptcy fraud, Ward continued to victimize hundreds of struggling homeowners, steal the identities of unsuspecting U.S. taxpayers involved in bankruptcy proceedings, and exploit civil protections under bankruptcy law to defraud lenders, including numerous TARP recipients. SIGTARP and our law enforcement partners will continue to ensure that those responsible for fraud related to TARP are brought to justice and answer for their crimes."
Each count of bankruptcy fraud carries a maximum sentence of five years in prison. Aggravated identity theft carries a two-year mandatory sentence, to run consecutive to any other sentence. Ward will be sentenced on July 29, 2013 before United States District Judge Dale S. Fischer, and will continue to be held without bond.
This case is being prosecuted by Trial Attorney Paul Rosen of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Evan Davis of the U.S. Attorney’s Office for the Central District of California. Assistant U.S. Attorney Jonathan Schmidt is prosecuting the charges in the Northern District of California, which were transferred to the Central District of California for entry of the guilty pleas. The investigation was conducted by SIGTARP and the FBI, which received substantial assistance from the U.S. Trustee’s Office. In addition, the Canadian Waterloo Regional Police Service and Royal Canadian Mounted Police provided exceptional support and assistance in connection with Ward’s arrest and extradition.
This prosecution is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants.
Monday, April 8, 2013
Former Federal Fugitive Pleads Guilty in California to Massive Fraud and Identity Theft Scheme in Connection with Nationwide Foreclosure Scam Defendant Collected More Than $1.2 Million from More Than 800 Distressed Homeowners
A former Los Angeles resident, who fled to Canada and was a federal fugitive for 12 years, pleaded guilty today to aggravated identity theft and bankruptcy fraud in connection with leading a nearly 15-year foreclosure-rescue scam that fraudulently postponed foreclosure sales for more than 800 distressed homeowners, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the Central District of California André Birotte Jr., U.S. Attorney for the Northern District of California Melinda Haag, Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office, Special Agent in Charge David J. Johnson of the FBI’s San Francisco Field Office and Christy Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP).
Glen Alan Ward, 48, pleaded guilty in connection with three separate sets of charges in the Central and Northern Districts of California, all stemming from Ward’s 15-year fraud. In 2000, Ward became a federal fugitive when he failed to appear in court after signing a plea agreement, which arose out of federal charges in 2000 in the Central District of California related to Ward’s early conduct in the scheme. In 2002, Ward was indicted on multiple counts of bankruptcy fraud in the Northern District of California for continuing the scheme in and around San Francisco. On Aug. 17, 2012, Ward was indicted on mail fraud, aggravated identity theft, and additional bankruptcy fraud counts in the Central District of California after fleeing to Canada and continuing his fraud from there. While in Canada, Ward recruited Frederic Alan Gladle, who was indicted in the Central District of California for bankruptcy fraud and identity theft in 2011, and was sentenced in 2012 to 61 months in custody for engaging in similar conduct.
On April 5, 2012, Ward was arrested in Canada by the Royal Canadian Mounted Police and the Waterloo Regional Police Service based on a U.S. provisional arrest warrant. On Dec. 21, 2012, Ward was extradited to the United States to answer all three sets of charges.
"Glen Alan Ward spent years preying on distressed homeowners and stealing the identities of bankruptcy debtors, all to pad his own pockets," said Acting Assistant Attorney General Raman. "Now he faces years in prison for his crimes. This successful prosecution illustrates our commitment to tirelessly pursuing fraudsters and ensuring that sophisticated schemes that prey on vulnerable homeowners will not go unpunished."
"Mr. Ward fled the United States years ago in an attempt to keep his fraudulent foreclosure scheme running," said United States Attorney André Birotte Jr. "Today's conviction should serve as a reminder that criminals can run, but they can't hide. The reach of the federal law is long and scammers like Ward, who try to take advantage of distressed homeowners, will be tracked down and prosecuted regardless of their efforts to do otherwise."
According to the plea agreement filed today before U.S. District Judge Dale S. Fischer in the Central District of California, Ward admitted to engaging in a fraud scheme that took place from 1997 to April 5, 2012, the day he was arrested by Canadian authorities. According to the plea agreement, Ward led a scheme that solicited and recruited homeowners whose properties were in danger of imminent foreclosure. Ward promised to delay their foreclosures for as long as the homeowners could afford his $700 monthly fee. Once a homeowner paid the fee, Ward accessed a public bankruptcy database and retrieved the name of an individual debtor who recently filed bankruptcy. Ward admitted that he obtained copies of unsuspecting debtors’ bankruptcy petitions and directed his clients to execute, notarize and record a grant deed transferring generally a 1/100th fractional interest in their distressed home into the name of the debtor that Ward provided. Then, after stealing the debtor’s identity, Ward faxed a copy of the bankruptcy petition, the notarized grant deed and a cover letter to the homeowner’s lender or the lender’s representative, directing it to stop the impending foreclosure sale due to the bankruptcy.
Because bankruptcy filings give rise to automatic stays that protect debtors’ properties, the receipt of the bankruptcy petitions and deeds in the debtors’ names forced lenders to cancel foreclosure sales. The lenders, which included banks that received government funds under the Troubled Asset Relief Program (TARP), could not move forward to collect money that was owed to them until getting permission from the bankruptcy courts, thereby repeatedly delaying the lenders’ recovery of their money for months and even years. In addition, if a distressed homeowner wanted to complete a loan modification or short sale, they were left to the mercy of Ward to send them forged deeds, supposedly signed by the debtors, to re-unify their title as required by most lenders.
As part of the scheme, Ward delayed the foreclosure sales of approximately 824 distressed properties by using at least 414 bankruptcies filed in 26 judicial districts across the country. During that same period, Ward admitted to collecting more than $1.2 million from his clients who paid for his illegal foreclosure-delay services, all of which he has agreed to forfeit.
"Today's announcement is the result of a collaborative international effort and the FBI is grateful to our partners with the Royal Canadian Mounted Police and the Waterloo Regional Police for their assistance in the fugitive investigation and apprehension," said Bill Lewis, the Assistant Director in Charge of the FBI's Los Angeles Field Office. "Mr. Ward's long-term scheme is an extreme example of calculated fraud based on greed, and I'm proud of the persistence shown by our federal partners at SIGTARP, the Office of United States Trustees, and the United States Attorney's Office, in pursuing this case to its successful end."
"We are committed to pursuing those who defraud the most vulnerable victims of the real estate market," said FBI San Francisco Special Agent in Charge David J. Johnson. "This is an excellent example of how closely we work with our law enforcement partners here and abroad to ensure that criminals are brought to justice."
"With today’s plea, justice is served for the victims of Ward’s long-running bankruptcy fraud scheme," said Christy Romero, Special Inspector General for TARP (SIGTARP). "While on the run for 12 years and having fled to Canada to avoid answering for earlier charges of bankruptcy fraud, Ward continued to victimize hundreds of struggling homeowners, steal the identities of unsuspecting U.S. taxpayers involved in bankruptcy proceedings, and exploit civil protections under bankruptcy law to defraud lenders, including numerous TARP recipients. SIGTARP and our law enforcement partners will continue to ensure that those responsible for fraud related to TARP are brought to justice and answer for their crimes."
Each count of bankruptcy fraud carries a maximum sentence of five years in prison. Aggravated identity theft carries a two-year mandatory sentence, to run consecutive to any other sentence. Ward will be sentenced on July 29, 2013 before United States District Judge Dale S. Fischer, and will continue to be held without bond.
This case is being prosecuted by Trial Attorney Paul Rosen of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Evan Davis of the U.S. Attorney’s Office for the Central District of California. Assistant U.S. Attorney Jonathan Schmidt is prosecuting the charges in the Northern District of California, which were transferred to the Central District of California for entry of the guilty pleas. The investigation was conducted by SIGTARP and the FBI, which received substantial assistance from the U.S. Trustee’s Office. In addition, the Canadian Waterloo Regional Police Service and Royal Canadian Mounted Police provided exceptional support and assistance in connection with Ward’s arrest and extradition.
This prosecution is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants.
Tuesday, April 9, 2013
U.S MARSHALS CATCH MAN ON DURHAM'S MOST WANTED LIST
FROM: U.S. MARSHALS SERVICE
U.S. Marshals Catch One of Durham's Most Wanted
Durham, NC – This afternoon, Terrance J. Butler, a 21 year old, Black Male, was arrested by the U.S. Marshals Joint Fugitive Task Force (JFTF) and the Durham Police Department. A true bill of indictment was returned and a warrant was issued for Butler for assault with a deadly weapon with intent to kill inflicting serious injury, felony possession schedule VI controlled substance, possession with intent to manufacture sell and deliver a schedule VI controlled substance, and possession of drug paraphernalia. Butler is also associated with the Bloods gang in the Durham area.
This indictment stemmed from an incident that occurred on January 21, 2013, when Durham Police Officers responded to a call regarding a subject with a gunshot wound at the 1000 block of Drew Street. The wounded subject was transported to Duke Hospital for medical treatment and allegedly received severe bodily damage. The condition of the wounded subject is unknown at this time.
Through extensive surveillance and interviews, members of the JFTF conducted a knock and talk at the residence and located Butler in the apartment. Butler was taken into custody at the Featherstone Village Apartments at 4916 Old Page Road without incident. Butler was transported to the Durham County Jail.
The U.S. Marshals Joint Fugitive Task Force for the Middle District of North Carolina is comprised of investigators from the U.S. Marshals Service, Chapel Hill Police Department, Durham Police Department, Greensboro Police Department, High Point Police Department, Winston Salem Police Department, Alamance County Sheriff’s Office, Orange County Sheriff’s Office, the North Carolina Department of Public Safety Probation and Parole Division and the North Carolina State Highway Patrol
U.S. Marshals Catch One of Durham's Most Wanted
Durham, NC – This afternoon, Terrance J. Butler, a 21 year old, Black Male, was arrested by the U.S. Marshals Joint Fugitive Task Force (JFTF) and the Durham Police Department. A true bill of indictment was returned and a warrant was issued for Butler for assault with a deadly weapon with intent to kill inflicting serious injury, felony possession schedule VI controlled substance, possession with intent to manufacture sell and deliver a schedule VI controlled substance, and possession of drug paraphernalia. Butler is also associated with the Bloods gang in the Durham area.
This indictment stemmed from an incident that occurred on January 21, 2013, when Durham Police Officers responded to a call regarding a subject with a gunshot wound at the 1000 block of Drew Street. The wounded subject was transported to Duke Hospital for medical treatment and allegedly received severe bodily damage. The condition of the wounded subject is unknown at this time.
Through extensive surveillance and interviews, members of the JFTF conducted a knock and talk at the residence and located Butler in the apartment. Butler was taken into custody at the Featherstone Village Apartments at 4916 Old Page Road without incident. Butler was transported to the Durham County Jail.
The U.S. Marshals Joint Fugitive Task Force for the Middle District of North Carolina is comprised of investigators from the U.S. Marshals Service, Chapel Hill Police Department, Durham Police Department, Greensboro Police Department, High Point Police Department, Winston Salem Police Department, Alamance County Sheriff’s Office, Orange County Sheriff’s Office, the North Carolina Department of Public Safety Probation and Parole Division and the North Carolina State Highway Patrol
CONTRACTOR AGREES TO RESOLVE ALLEGATIONS OF IMPROPER LOBBYING
FROM: U.S. DEPARTMENT OF JUSTICE
Wednesday, April 3, 2013
Fluor Hanford Agrees to Pay $1.1 Million to Resolve Allegations of Improper Lobbying
The Justice Department announced today that Fluor Hanford LLC has agreed to pay $1.1 million to settle allegations that Fluor violated the False Claims Act by using federal funds for lobbying. Fluor is a Department of Energy (DOE) contractor that performs management and engineering services at the DOE’s Hanford Nuclear Site in eastern Washington. Fluor’s parent company, Fluor Corporation, is headquartered in Texas and performs engineering, construction and personnel services for commercial and government customers.
Between 2005 and 2009, Fluor contracted with the DOE to manage and operate the Hazardous Materials Management and Emergency Response (HAMMER) Center. The HAMMER Center provides homeland security and emergency response training to first responders and law enforcement personnel. Fluor allegedly used DOE funds to lobby Congress and other federal officials to increase funding for the HAMMER Center, in violation of a federal law known as the Byrd Amendment, which prohibits the use of federal funds for lobbying.
"The money allocated by Congress for this program was designed to train first responders and law enforcement personnel to respond to crisis situations, not to lobby Congress for more funding," said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice. "This resolution demonstrates that the Justice Department will work to ensure that public funds are not used to influence legislation."
"The cleanup efforts at Hanford are too important to have prime contractors who misuse government funds to lobby for more government funds," said Michael C. Ormsby, U.S. Attorney for the Eastern District of Washington. "We are pleased that Fluor has settled these allegations and hope that this serves as a reminder to all prime contractors at Hanford that they must be good stewards of tax payer dollars."
The allegations resolved by today’s settlement were initially alleged in a whistleblower lawsuit filed under the False Claims Act by Loydene Rambo, a former employee of Fluor. Under the False Claims Act, private whistleblowers can sue on behalf of the United States for false claims. The United States has the right to take over the action, as it did here. The whistleblower is entitled to a share of any recovery. Rambo will receive $200,000 of the government’s settlement.
This case was handled by the Civil Division of the Department of Justice and the U.S. Attorney’s Office for the Eastern District of Washington, with investigative assistance provided by the Department of Energy’s Office of Inspector General.
The False Claims Act suit was filed in the U.S. District Court for the Eastern District of Washington, and is captioned United States ex rel. Rambo v. Fluor Hanford, LLC et al., No. cv-11-5037 (E.D. Wash.). The claims settled in this case are allegations only; there has been no determination of liability.
Wednesday, April 3, 2013
Fluor Hanford Agrees to Pay $1.1 Million to Resolve Allegations of Improper Lobbying
The Justice Department announced today that Fluor Hanford LLC has agreed to pay $1.1 million to settle allegations that Fluor violated the False Claims Act by using federal funds for lobbying. Fluor is a Department of Energy (DOE) contractor that performs management and engineering services at the DOE’s Hanford Nuclear Site in eastern Washington. Fluor’s parent company, Fluor Corporation, is headquartered in Texas and performs engineering, construction and personnel services for commercial and government customers.
Between 2005 and 2009, Fluor contracted with the DOE to manage and operate the Hazardous Materials Management and Emergency Response (HAMMER) Center. The HAMMER Center provides homeland security and emergency response training to first responders and law enforcement personnel. Fluor allegedly used DOE funds to lobby Congress and other federal officials to increase funding for the HAMMER Center, in violation of a federal law known as the Byrd Amendment, which prohibits the use of federal funds for lobbying.
"The money allocated by Congress for this program was designed to train first responders and law enforcement personnel to respond to crisis situations, not to lobby Congress for more funding," said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice. "This resolution demonstrates that the Justice Department will work to ensure that public funds are not used to influence legislation."
"The cleanup efforts at Hanford are too important to have prime contractors who misuse government funds to lobby for more government funds," said Michael C. Ormsby, U.S. Attorney for the Eastern District of Washington. "We are pleased that Fluor has settled these allegations and hope that this serves as a reminder to all prime contractors at Hanford that they must be good stewards of tax payer dollars."
The allegations resolved by today’s settlement were initially alleged in a whistleblower lawsuit filed under the False Claims Act by Loydene Rambo, a former employee of Fluor. Under the False Claims Act, private whistleblowers can sue on behalf of the United States for false claims. The United States has the right to take over the action, as it did here. The whistleblower is entitled to a share of any recovery. Rambo will receive $200,000 of the government’s settlement.
This case was handled by the Civil Division of the Department of Justice and the U.S. Attorney’s Office for the Eastern District of Washington, with investigative assistance provided by the Department of Energy’s Office of Inspector General.
The False Claims Act suit was filed in the U.S. District Court for the Eastern District of Washington, and is captioned United States ex rel. Rambo v. Fluor Hanford, LLC et al., No. cv-11-5037 (E.D. Wash.). The claims settled in this case are allegations only; there has been no determination of liability.
Monday, April 8, 2013
4 FORMER EXECUTIVES OF LUFTHANSA SUBSIDIARY CHARGED WITH VIOLATIONS OF FCPA
FROM: U.S. DEPARTMENT OF JUSTICE
Friday, April 5, 2013
Four Former Executives of Lufthansa Subsidiary Bizjet Charged with Foreign Bribery
Charges were unsealed today against four former executives of BizJet International Sales and Support Inc., the U.S.-based subsidiary of Lufthansa Technik AG, which provides aircraft maintenance, repair and overhaul (MRO) services, for their alleged participation in a scheme to pay bribes to government officials in Latin America, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office.
According to the charges, Bernd Kowalewski, the former president and chief executive officer of BizJet, Jald Jensen, the former sales manager at BizJet, Peter DuBois, the former vice president of sales and marketing at BizJet, and Neal Uhl, the former vice president of finance at BizJet, paid bribes to officials employed by the Mexican Policia Federal Preventiva, the Mexican Coordinacion General de Transportes Aereos Presidenciales, the air fleet for the Gobierno del Estado de Sinaloa in Mexico, the air fleet for the Estado De Roraima in Brazil, and the Republica de Panama Autoridad Aeronautica Civil in exchange for those officials’ assistance in securing contracts for BizJet to perform MRO services.
Kowalewski and Jensen were charged by indictment filed in U.S. District Court for the Northern District of Oklahoma on Jan. 5, 2012, with conspiring to violate the Foreign Corrupt Practices Act (FCPA) and to launder money, as well as substantive charges of violating the FCPA and money laundering. The two defendants are believed to remain abroad.
DuBois and Uhl pleaded guilty on Jan. 5, 2012, to criminal informations, and their pleas were unsealed today. DuBois pleaded guilty to one count of conspiracy to violate the FCPA and one count of violating the FCPA. Uhl pleaded guilty to one count of conspiracy to violate the FCPA. Both defendants were sentenced today by U.S. District Judge Gregory K. Frizzell in the Northern District of Oklahoma. DuBois’s sentence was reduced from a sentencing guidelines range of 108 to 120 months in prison to probation and eight months home detention based on his cooperation in the government’s investigation. Uhl’s sentence was similarly reduced for cooperation from a guidelines range of 60 months in prison to probation and eight months home detention.
"The charges announced today allege a conspiracy by senior executives at BizJet to win contracts in Latin American countries through bribery and illegal tactics," said Acting Assistant Attorney General Raman. "Former BizJet executives, including the former president and chief executive officer, allegedly authorized and caused hundreds of thousands of dollars to be paid directly and indirectly to ranking military officials in various foreign countries, and two former executives have pleaded guilty for their roles in the conspiracy. These charges reflect our continued commitment to holding individuals accountable for violations of the FCPA, including, as in this instance, after entering into a deferred prosecution agreement with their employer."
"Business executives have a responsibility to act appropriately in order to maintain a fair and competitive international market," said FBI Assistant Director in Charge Parlave. "The unsealing of these bribery charges, and today’s sentencing, demonstrate that the FBI is committed to curbing corruption and will pursue all those who try to advance their businesses through bribery."
The charges allege that the defendants, in many instances, paid bribes directly to foreign officials in Mexico, Panama and Brazil for assistance in securing contracts. In other instances, the defendants allegedly funneled bribes through a shell company owned and operated by Jensen. The shell company, Avionica International & Associates Inc., allegedly operated under the pretense of providing aircraft maintenance brokerage services but in reality laundered money related to BizJet’s bribery scheme. Avionica was located at Jensen’s personal residence in Van Nuys, Calif., and Jensen was the only officer, director and employee.
The charges announced today follow the announcement on March 14, 2012, of a deferred prosecution agreement with BizJet and an $11.8 million monetary penalty to resolve charges related to the corrupt conduct. That agreement acknowledged BizJet’s voluntary disclosure, extraordinary cooperation and extensive remediation in this case.
The conspiracy to commit violations of the FCPA count carries a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the value gained or lost. The FCPA counts each carry a maximum penalty of five years in prison and a fine of the greater of $100,000 or twice the value gained or lost. The conspiracy to commit money laundering count carries a maximum penalty of 20 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the transaction. The money laundering counts each carry a maximum penalty of 10 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the transaction.
An indictment is merely an accusation, and defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
The case is being prosecuted by Trial Attorneys Daniel S. Kahn and Stephen J. Spiegelhalter of the Criminal Division’s Fraud Section. Assistant U.S. Attorney Kevin Leitch from the Northern District of Oklahoma has provided assistance in the case. The department has also worked closely with its law enforcement counterparts in Mexico and Panama in this matter and is grateful for their assistance. The case is being investigated by FBI agents who are part of the Washington Field Office’s dedicated FCPA squad.
Friday, April 5, 2013
Four Former Executives of Lufthansa Subsidiary Bizjet Charged with Foreign Bribery
Charges were unsealed today against four former executives of BizJet International Sales and Support Inc., the U.S.-based subsidiary of Lufthansa Technik AG, which provides aircraft maintenance, repair and overhaul (MRO) services, for their alleged participation in a scheme to pay bribes to government officials in Latin America, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office.
According to the charges, Bernd Kowalewski, the former president and chief executive officer of BizJet, Jald Jensen, the former sales manager at BizJet, Peter DuBois, the former vice president of sales and marketing at BizJet, and Neal Uhl, the former vice president of finance at BizJet, paid bribes to officials employed by the Mexican Policia Federal Preventiva, the Mexican Coordinacion General de Transportes Aereos Presidenciales, the air fleet for the Gobierno del Estado de Sinaloa in Mexico, the air fleet for the Estado De Roraima in Brazil, and the Republica de Panama Autoridad Aeronautica Civil in exchange for those officials’ assistance in securing contracts for BizJet to perform MRO services.
Kowalewski and Jensen were charged by indictment filed in U.S. District Court for the Northern District of Oklahoma on Jan. 5, 2012, with conspiring to violate the Foreign Corrupt Practices Act (FCPA) and to launder money, as well as substantive charges of violating the FCPA and money laundering. The two defendants are believed to remain abroad.
DuBois and Uhl pleaded guilty on Jan. 5, 2012, to criminal informations, and their pleas were unsealed today. DuBois pleaded guilty to one count of conspiracy to violate the FCPA and one count of violating the FCPA. Uhl pleaded guilty to one count of conspiracy to violate the FCPA. Both defendants were sentenced today by U.S. District Judge Gregory K. Frizzell in the Northern District of Oklahoma. DuBois’s sentence was reduced from a sentencing guidelines range of 108 to 120 months in prison to probation and eight months home detention based on his cooperation in the government’s investigation. Uhl’s sentence was similarly reduced for cooperation from a guidelines range of 60 months in prison to probation and eight months home detention.
"The charges announced today allege a conspiracy by senior executives at BizJet to win contracts in Latin American countries through bribery and illegal tactics," said Acting Assistant Attorney General Raman. "Former BizJet executives, including the former president and chief executive officer, allegedly authorized and caused hundreds of thousands of dollars to be paid directly and indirectly to ranking military officials in various foreign countries, and two former executives have pleaded guilty for their roles in the conspiracy. These charges reflect our continued commitment to holding individuals accountable for violations of the FCPA, including, as in this instance, after entering into a deferred prosecution agreement with their employer."
"Business executives have a responsibility to act appropriately in order to maintain a fair and competitive international market," said FBI Assistant Director in Charge Parlave. "The unsealing of these bribery charges, and today’s sentencing, demonstrate that the FBI is committed to curbing corruption and will pursue all those who try to advance their businesses through bribery."
The charges allege that the defendants, in many instances, paid bribes directly to foreign officials in Mexico, Panama and Brazil for assistance in securing contracts. In other instances, the defendants allegedly funneled bribes through a shell company owned and operated by Jensen. The shell company, Avionica International & Associates Inc., allegedly operated under the pretense of providing aircraft maintenance brokerage services but in reality laundered money related to BizJet’s bribery scheme. Avionica was located at Jensen’s personal residence in Van Nuys, Calif., and Jensen was the only officer, director and employee.
The charges announced today follow the announcement on March 14, 2012, of a deferred prosecution agreement with BizJet and an $11.8 million monetary penalty to resolve charges related to the corrupt conduct. That agreement acknowledged BizJet’s voluntary disclosure, extraordinary cooperation and extensive remediation in this case.
The conspiracy to commit violations of the FCPA count carries a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the value gained or lost. The FCPA counts each carry a maximum penalty of five years in prison and a fine of the greater of $100,000 or twice the value gained or lost. The conspiracy to commit money laundering count carries a maximum penalty of 20 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the transaction. The money laundering counts each carry a maximum penalty of 10 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the transaction.
An indictment is merely an accusation, and defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
The case is being prosecuted by Trial Attorneys Daniel S. Kahn and Stephen J. Spiegelhalter of the Criminal Division’s Fraud Section. Assistant U.S. Attorney Kevin Leitch from the Northern District of Oklahoma has provided assistance in the case. The department has also worked closely with its law enforcement counterparts in Mexico and Panama in this matter and is grateful for their assistance. The case is being investigated by FBI agents who are part of the Washington Field Office’s dedicated FCPA squad.
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