CA RESIDENT PLEADS GUILTY TO MANUFACTURING GUNS, POSSESSION OF A MACHINEGUN

FROM:  U.S. JUSTICE DEPARTMENT 

Thursday, April 14, 2016

California Man Pleads Guilty to Manufacturing Guns and Dealing in Firearms and Possession of a Machinegun

Daniel Albert Crowninshield, 45, of Sacramento, California, pleaded guilty today to unlawfully manufacturing and dealing in firearms and possession of an unregistered machinegun, announced U.S. Attorney Benjamin B. Wagner for the Eastern District of California.

In his plea agreement, Crowninshield, who was also known by his online moniker “Dr-Death,” admitted that he operated an unlicensed firearms manufacturing business out of C&G Tool, a metal shop in North Sacramento.  Using sophisticated computer controlled machines, Crowninshield manufactured lower receivers for AR-15s and other firearms.  Crowninshield did not conduct background checks, enforce waiting periods, or complete firearm transaction paperwork.

Crowninshield advertised such services on at least one online firearm enthusiast forum.  This website mainly consists of forums where people ask and answer questions related to firearms.  Crowninshield, using the moniker Dr-Death was a prolific poster on the website.  Additionally, other members frequently posted about Dr-Death, including review of service provided and recommending that other users visit his shop.

“The manufacturing and unlicensed sale for profit of high-capacity firearms is a serious threat to public safety,” said U.S. Attorney Wagner.  “We will continue to vigorously investigate unlicensed gun dealers and prosecute violations of the federal firearms laws.”

“Daniel Crownshield aka Dr. Death owned and operated a machine shop where he allowed customers with unknown backgrounds to use his machinery to unlawfully manufacture firearms for profit,” said Special Agent in Charge Jill A. Snyder for the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).  “ATF regulates the firearm industry and it is illegal to manufacture and sell firearms without possessing a federal firearms license and without conducting background checks.  ATF’s goal is to keep firearms out of the hands of prohibited individuals and prevent violent crime.”

This case is the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the California Department of Justice’s Bureau of Firearms, with the assistance of the Sacramento Police Department, Sacramento County Sheriff’s Department and California Highway Patrol. Assistant United States Attorneys Justin Lee and Matthew Yelovich are prosecuting the case.

Crowninshield is scheduled to be sentenced by U.S. District Judge Judge Troy L. Nunley for the Eastern District of California on June 30.  Crowninshield faces a maximum statutory penalty of 10 years in prison and a $250,000 fine.  The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

UNIVERSAL ARYAN BROTHERHOOD MEMBER SENTENCED FOR DRUG TRAFFICKING, RACKETEERING

FROM:  U.S. JUSTICE DEPARTMENT 

Friday, April 15, 2016

Universal Aryan Brotherhood Member Sentenced to 294 Months in Prison for Racketeering and Drug Trafficking

A member of the Universal Aryan Brotherhood (UAB) prison gang was sentenced in federal court today to 294 months in prison for conspiring to conduct a racketeering enterprise and related charges, announced Assistant Attorney General ­­­­­­­Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Danny C. Williams Sr. of the Northern District of Oklahoma.

Anthony Ramon Hall, aka Tony, 40, of Tulsa, Oklahoma, was sentenced today by U.S. District Judge Claire V. Eagan of the Northern District of Oklahoma, who also ordered Hall to serve five years of supervised release.

Hall pleaded guilty on June 9, 2015, and in connection with his plea, Hall acknowledged his membership in or association with the UAB, a violent, “whites only” prison-based gang with members and associates operating inside and outside of state prisons throughout Oklahoma.  According to the plea, Hall held a leadership position in the UAB as a “main-council” member.

Hall admitted that he conspired in racketeering activities to advance the UAB enterprise, including possessing and selling 500 grams or more of methamphetamine.  Specifically, Hall admitted to using smuggled cell phones to coordinate the delivery, receipt and sale of methamphetamine by UAB members and associates outside of prison who would then return profits to him while he was incarcerated.  Hall also coordinated the firebombing of automobile car that belonged to someone Hall believed had stolen from the UAB drug conspiracy, he admitted.

The U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; Tulsa Police Department; Bureau of Alcohol, Tobacco, Firearms and Explosives; Internal Revenue Service-Criminal Investigation; FBI; Tulsa County Sheriff’s Office and Oklahoma Department of Corrections investigated the case.  Trial Attorney John C. Hanley of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Allen Litchfield and Jan Reincke of the Northern District of Oklahoma are prosecuting the case.

THREE TAX PREPARERS RECEIVE PRISON SENTENCES IN FALSE TAX RETURN FILING CASE

FROM:  U.S. JUSTICE DEPARTMENT 

Thursday, April 14, 2016

Three Minnesota Tax Return Preparers Sentenced to Prison for Conspiracy to Defraud the Government and Filing False Tax Returns

Defendants Prepared Thousands of False Tax Returns for Filing with IRS and State of Minnesota

Three tax return preparers based in Minneapolis, Minnesota, were sentenced to prison yesterday for their involvement with a fraudulent return-preparation business with multiple storefronts in the Minneapolis area, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.

Ishmael Kosh, 39, of Philadelphia, Pennsylvania, and Amadou Sangaray, 36, of New York, New York, were convicted following a two-week jury trial in September 2015.  Kosh was convicted of one count of conspiracy to defraud the United States and eight counts of aiding and assisting in the filing of false tax returns.  Sangaray was convicted of one count of conspiracy to defraud the United States, four counts of aggravated identity theft and eight counts of aiding and assisting in the filing of false tax returns.  Francis Saygbay, 43, of Minneapolis, failed to appear for trial, but later pleaded guilty to one count of conspiracy to defraud the United States, one count of aggravated identity theft, and two counts of aiding and assisting in the preparation of false tax returns.

Yesterday, Chief U.S. District Judge John R. Tunheim sentenced Kosh to 52 months in prison, Sangaray to 50 months in prison and Saygbay to 40 months in prison.  In addition to the prison terms, Judge Tunheim also ordered each Kosh and Saygbay to serve three years of supervised release and Sangaray two years of supervised release, following their release from prison.

“As the 2016 tax filing season draws to a close, taxpayers are reminded to be wary of return preparers who make promises that seem too good to be true,” said Acting Assistant Attorney General Ciraolo.  “Dishonest return preparers like Messrs.  Kosh, Sangaray and Saygbay cost the U.S. Treasury billions of dollars each year.  Taxpayers should stay alert for the warning signs that their preparer is more interested in making a quick buck than filing an accurate tax return.”

According to the evidence presented at the trial, Kosh, Sangaray, Saygbay and a fourth individual, Chatonda Khofi, 50, of St. Paul, Minnesota, established a storefront location of Primetime Tax Services Inc. (Primetime), a tax return preparation business in the Minneapolis area.  Along with a fifth individual, David Mwangi, 47, of Arlington, Texas, the defendants prepared over 2,000 fraudulent individual income tax returns on behalf of customers of Primetime for filing with the Internal Revenue Service (IRS) for the years 2006, 2007 and 2008.  The defendants also prepared approximately 1,700 fraudulent state income tax returns for filing with the state of Minnesota for those years.  At yesterday’s sentencing hearing, Judge Tunheim found that the defendants’ conduct caused a total tax loss of between $1.5 and $3.5 million.

On the fraudulent returns, the defendants included false dependents, fake business income and losses, inflated deductions and credits and false filing status in order to obtain inflated tax returns for their customers.  The defendants also bought and sold dependents for use on their customers’ tax returns in order to falsely qualify their customers for inflated deductions and tax credits.  The defendants caused the fraudulently obtained refunds to be sent directly to Primetime in order to maintain control over the funds.  When a customer came to pick up their refund checks or debit card, the defendants sometimes demanded an additional fee in cash, and/or escorted that customer to a check cashing location or ATM.

“Tax-return preparers who try to scam the government for tax refunds are not only stealing from the government, they are stealing from all the honest citizens who pay their fair share of taxes,” stated Special Agent in Charge Shea Jones of IRS-Criminal Investigation St. Paul Field Office.  “The special agents of IRS-Criminal Investigation are committed to protecting the integrity of our system of taxation by investigating tax and accounting professionals who conspire with others to violate the tax laws.  It is our hope that yesterday’s sentencings of Ishmael Kosh, Amadou Sangaray and Francis Saygbay, send the strong message that tampering with the integrity of our nation’s tax system will result in jail time.”

In November 2014, Mwangi pleaded guilty to one count of conspiracy to defraud the United States and Khofi pleaded guilty to one count of conspiracy to defraud the United States and one count of aggravated identity theft.  They are currently awaiting sentencing.  A sixth individual associated with this scheme, Stephanie Robinson, 33, of Minneapolis, pleaded guilty in August 2013 to one count of filing a false tax return in her own name and one count of aiding and assisting in the filing of a false tax return for another individual.

Acting Assistant Attorney General Ciraolo thanked special agents of IRS-Criminal Investigation, who investigated the case and Trial Attorneys Thomas W. Flynn and Ryan R. Raybould, and former Trial Attorney Dennis R. Kihm of the Tax Division, who prosecuted the case.  Acting Assistant Attorney General Ciraolo also thanked the Minnesota Department of Revenue for their significant work on this matter.

Newsletter: The INL Beat, April 2016

Newsletter: The INL Beat, April 2016

COUPLE INDICTED FOR ALLEGED MEDICARE FRAUD AND FORCED LABOR SCHEMES

FROM:  U.S. JUSTICE DEPARTMENT 

Monday, April 11, 2016

Husband and Wife Owners of Chicago Physical Therapy Company Indicted in Schemes to Defraud Medicare and Forced Labor 

A Chicago couple was charged in an indictment with a scheme to use their health care business to defraud Medicare out of millions of dollars, while also conspiring to employ a woman against her will.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Zachary T. Fardon of the Northern District of Illinois, Special Agent in Charge Michael J. Anderson of the FBI’s Chicago Division, 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, Special Agent in Charge James D. Robnett of the Internal Revenue Service-Criminal Investigation (IRS-CI) Chicago Field Office, Acting Special Agent in Charge James M. Gibbons of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) Chicago Field Office, Special Agent in Charge James Vanderberg of the U.S. Department of Labor’s Office of Inspector General-Office of Labor Racketeering and Fraud Investigations Chicago Region and Cook County State’s Attorney Anita Alvarez made the announcement.

Richard Tinimbang, 38, and his wife, Maribel Tinimbang, 40, both of Chicago, were charged with participating in a $45 million fraud scheme involving three Lincolnwood, Illinois, based home health care companies owned by Richard Tinimbang’s mother, Josephine Tinimbang.  The companies allegedly paid bribes and kickbacks to obtain Medicare beneficiaries, ignored doctors who refused to certify beneficiaries as being in need of home health care and falsified medical records to make patients appear sicker than they actually were.

This indictment is part of a larger health care fraud investigation in which 13 others have been charged.  Three defendants have pleaded guilty and await sentencing; the 10 others, including Josephine Tinimbang, are awaiting trial.  Richard and Maribel Tinimbang’s business, Patients First Physical Therapy Inc., purportedly provided in-home therapy services to patients of three home health care companies – Donnarich Home Health Care Inc., Josdan Home Health Care Inc. and Pathways Home Health Services LLC.  According to the indictment, several individuals who worked at Donnarich, Josdan and Pathways conspired to commit health care fraud and laundered money to conceal the scheme.  From 2008 through 2014, the scheme resulted in $45 million in losses to Medicare, according to the indictment.  

Richard Tinimbang also allegedly submitted fraudulent forms to the U.S. Department of Homeland Security in order to allow a Filipino woman to legally work in the United States, stating that the woman would be hired as a business analyst at Josdan, thus qualifying her for an H-1B visa.  However, according to the indictment, when the woman arrived in the United States, Richard Tinimbang put her to work full time as a nanny and housekeeper for him, his wife and others.  The couple allegedly attempted to induce the woman to sign a servitude contract that provided for payment of $66 per day – regardless of the number of hours worked – for a term of seven years.  According to allegations in the indictment, the contract further provided that if the woman quit before the seventh year, she would be required to pay $25,000 in damages.  The couple allegedly threatened to send her back to the Philippines without being paid for the work she had already performed in order to force her to sign the contract and surrender her passport.

The couple and Josephine Tinimbang used proceeds from the fraud to make numerous personal purchases, including shares of stock, vehicles, real estate and jewelry, according to the indictment.  The indictment alleges that the couple concealed the money they had pocketed by falsely making it appear to be business expenses.

Richard Tinimbang is charged with one count of conspiracy to defraud Medicare, one count of conspiracy to pay or receive health care kickbacks, two counts of paying kickbacks to induce referrals of Medicare beneficiaries, one count of money laundering conspiracy, one count of conspiracy to obtain forced labor and one count of presenting false statements in an immigration document.  Maribel Tinimbang is charged with one count of conspiracy to defraud Medicare, one count of money laundering conspiracy and one count of conspiracy to obtain forced labor.

An indictment is merely a charge and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

The Medicare Fraud Strike Force and the Cook County Human Trafficking Task Force investigated the case.  Trial Attorney Brooke Harper of the Criminal Division’s Fraud Section is prosecuting the case.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,300 defendants who collectively have billed the Medicare program for over $7 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

RETIRED JUDGE INDICTED FOR ROLE IN $600 MILLION SOCIAL SECURITY FRAUD

FROM:  U.S. JUSTICE DEPARTMENT 

Tuesday, April 5, 2016

Retired Judge, Attorney and Psychologist Indicted in $600 Million Social Security Fraud Scheme

Thousands of Kentucky Claimants Improperly Received Disability Benefits

A retired administrative law judge, a lawyer and a psychologist were charged in a federal indictment unsealed today for their roles in a scheme to fraudulently obtain more than $600 million in federal disability payments for thousands of claimants.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; Special Agent in Charge Michael McGill of the Social Security Administration-Office of Inspector General’s (SSA-OIG) Philadelphia Field Division; Special Agent in Charge Howard S. Marshall of the FBI’s Louisville, Kentucky, Field Division; Special Agent in Charge Tracey D. Montaño of Internal Revenue Service Criminal Investigations (IRS-CI) Nashville, Tennessee, Field Office; and Special Agent in Charge Derrick Jackson of the U.S. Department of Health and Human Services-Office of the Inspector General (HHS-OIG) Atlanta Regional Office made the announcement.

David Black Daugherty, 81, of Myrtle Beach, South Carolina; Eric Christopher Conn, 55, and Alfred Bradley Adkins, 44, both of Pikeville, Kentucky, were charged in an 18-count indictment returned on April 1, 2016, in the U.S. District Court for the Eastern District of Kentucky.  The indictment was unsealed upon Conn’s arrest and initial court appearance today before U.S. Magistrate Judge Robert E. Wier of the Eastern District of Kentucky.  Conn was detained pending his detention hearing, which is scheduled for April 7, 2016.

The indictment charges all three defendants with one count of conspiracy to commit mail and wire fraud.  In addition, Conn is charged with three counts of mail fraud, three counts of wire fraud, two counts of obstruction, two counts of false statements, one count of conspiracy to commit money laundering, four counts of money laundering, and one count of conspiracy to structure payments.  Adkins is charged with one count of mail fraud, one count of wire fraud, and one count of false statements.  Daugherty also is charged with two counts of mail fraud, two counts of wire fraud, and one count of conspiracy to commit money laundering.

“The defendants are charged with designing an intricate scheme, using their expertise and positions of authority, to fraudulently induce payment of $600 million in federal disability and healthcare benefits,” said Assistant Attorney General Caldwell.  “While Social Security disability programs are designed to support the disabled, the defendants allegedly used it to enrich themselves.  Today’s arrests demonstrate, however, that the Criminal Division will root out greed and corruption wherever they may be found.”

“The Social Security Administration Office of the Inspector General is committed to pursuing those who violate the public trust by conspiring to misrepresent disabling conditions to defraud not only Social Security, but all American taxpayers,” said Special Agent in Charge McGill.  “We will continue to uphold the integrity of Social Security’s disability programs, which are a lifeline for so many Americans and their families.  I would like to thank the Department of Justice’s Criminal Division, and in particular, the division’s Fraud Section, for their willingness to take on this case and their diligent efforts to ensure these individuals will be held accountable for their actions.”

“As I stated just a few days ago when announcing charges against Kentucky Deputy Attorney General Timothy Longmeyer, the Louisville FBI is committed to cleaning up Kentucky,” said Special Agent in Charge Marshall.  “The allegations against these defendants is yet another example of Kentucky’s historical willingness to accept corruption as the status quo.  Although cleaning up Kentucky is a long and difficult process, today’s announcement is another step toward ending public corruption and taking back the commonwealth from those who corrupt it.”

“IRS-Criminal Investigation is committed to unraveling complex fraud and money laundering schemes,” said Special Agent in Charge Montaño.  “The allegations in this case describe a gross abuse of a system that was established to provide assistance to those truly in need.  The defendants are alleged to have conspired to use their positions, to corrupt the system for their own personal gain, at the expense of the American taxpayers who fund the Social Security system.  We are proud to work with our law enforcement partners to investigate and prosecute individuals who attempt to enrich themselves by fraudulent means.”

“This scheme allegedly enrolled ineligible people in Medicare and Medicaid,” said Special Agent in Charge Jackson.  “We are working with our law enforcement partners to protect these government health care programs funded by our taxpayer dollars.”

The indictment alleges that from October 2004 to Feb. 13, 2012, Conn, Daugherty and Adkins conspired to defraud the government by, among other things, submitting false and fraudulent medical documentation to the SSA in order to have the SSA pay claimants’ retroactive disability benefits, continue to pay claimants’ disability benefits in the future, award Medicare and Medicaid benefits to claimants and pay Conn’s attorney fees.  According to the indictment, the conspirators intended that the SSA disburse more than $600 million in disability benefits in more than 2,000 cases to claimants in Kentucky and elsewhere, irrespective of the claimants’ actual entitlement to benefits.  Conn, Adkins and Daugherty allegedly received more than $5 million during the nearly eight-year scheme.

According to the indictment, Conn is an attorney whose firm in Floyd County has focused for the past 20 years primarily on representing individuals seeking Social Security disability benefits; Adkins is a clinical psychologist who performed medical evaluations for Conn from 2004 through 2011; and Daugherty is a former SSA administrative law judge who began working with the SSA in 1990 and was assigned to the Office of Disability and Adjudication Review hearing office in Huntington, West Virginia, which maintained a satellite office in Prestonsburg, Kentucky, and handled the claims of Kentucky claimants who requested hearings.  Daugherty, who retired in July 2011, was responsible for deciding whether claimants were disabled and entitled to benefits.

As part of the scheme, Conn allegedly filed disability applications with the Prestonsburg Field Office, irrespective of the claimants’ residence in an effort to ultimately bring the cases before the Huntington Hearing Office, where Daugherty either self-assigned or directed others to assign those cases to himself.  Daugherty allegedly solicited Conn to submit falsified medical evidence so that Daugherty could issue fully favorable decisions.  Adkins and others performed pretextual physical and mental evaluations on claimants, the indictment alleges.  They routinely prepared and signed evaluation reports indicating that claimants had limitations considered disabling by the SSA, irrespective of claimants’ actual physical or mental conditions, according to the indictment.

According to the indictment, once the law enforcement investigation began, Conn allegedly threatened to retaliate against another person’s livelihood when that person provided truthful information to a law enforcement officer about the scheme.  Conn also allegedly destroyed and directed others to destroy evidence, including federal reports, a computer tower and other electronic hardware and media located at his law firm.

An indictment is merely an allegation and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

The SSA-OIG, the FBI, IRS-CI and HHS-OIG investigated the case.  Trial Attorney Dustin M. Davis and Special Trial Attorney Trey Alford of the Criminal Division’s Fraud Section and Trial Attorney Kristen M. Warden of the Criminal Division’s Asset Forfeiture and Money Laundering Section are prosecuting the case.

GUCCIFER FACES CHARGES OF HACKING

FROM:  U.S. JUSTICE DEPARTMENT 

Friday, April 1, 2016

Romanian National “Guccifer” Extradited to Face Hacking Charges

Marcel Lehel Lazăr, 44, of Arad, Romania, allegedly the hacker “Guccifer,” made his initial appearance today in federal court in Alexandria, Virginia.

Lazăr had been temporarily surrendered from Romania to face U.S. charges relating to unauthorized access of protected computers, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office, Principal Deputy Assistant Secretary Bill A. Miller of the U.S. Department of State Bureau of Diplomatic Security (DSS) and Special Agent in Charge James M. Murray of the U.S. Secret Service’s Washington Field Office.

“Marcel Lazar is the latest of a dozen high-level cybercriminals who have recently been extradited to face justice in the United States,” said Assistant Attorney General Caldwell.  “Old-fashioned investigative work, enhanced international law enforcement relationships, and a long memory can ensure that foreign-based hackers have no safe haven even in the remote corners of the globe.  As the saying goes, ‘they can run, but they can’t hide.’”

“Mr. Lazar violated the privacy of his victims and thought he could hide behind the anonymity of the Internet,” said U.S. Attorney Boente.  “No matter where they are in the world, those who commit crimes against U.S. citizens will be held accountable for their actions, pursued by our investigators and prosecutors and brought to justice.”

“As a direct result of relentless investigative efforts and cooperation with our international partners, Marcel Lazar, also known as Guccifer, will begin answering for his alleged cyberhacking activities today in the U.S. judicial system,” said Assistant Director in Charge Abbate.  “I commend the dedicated work of the agents, analysts, prosecutors and our federal partners to identify Guccifer, who is alleged to have gained unauthorized access to on-line accounts and violated the privacy of victims, while attempting to hide unsuccessfully behind the anonymity of the Internet.”

In the United States, Lazăr is charged in a nine-count indictment with three counts of wire fraud, three counts of gaining unauthorized access to protected computers, and one count each of aggravated identity theft, cyberstalking and obstruction of justice.  Lazăr's case will be heard before U.S. District Judge James C. Cacheris of the Eastern District of Virginia.

According to the indictment, from December 2012 to January 2014, Lazăr hacked into the email and social media accounts of high-profile victims, including a family member of two former U.S. presidents, a former U.S. Cabinet member, a former member of the U.S. Joint Chiefs of Staff and a former presidential advisor.  After gaining unauthorized access to their accounts, Lazăr publicly released his victims’ private email correspondence, medical and financial information and personal photographs.  The indictment also alleges that in July 2013 and August 2013, Lazar impersonated a victim after compromising the victim’s account.

The charges and allegations contained in an indictment are merely accusations.  The defendant is presumed innocent until and unless proven guilty.

The FBI’s Washington Field Office, the DSS and the U.S. Secret Service are investigating the case with assistance from the Romanian National Police.

Senior Counsels Ryan K. Dickey and Peter V. Roman of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorneys Jay V. Prabhu and Maya D. Song of the Eastern District of Virginia are prosecuting the case.  The Criminal Division’s Office of International Affairs has provided significant assistance.

FORMER COAL COMPANY CEO SENTENCED TO PRISON

FROM:  U.S. JUSTICE DEPARTMENT 

Wednesday, April 6, 2016

Former Massey Energy CEO Sentenced to a Year in Federal Prison

Don Blankenship Sentenced on Federal Conspiracy Charge

Acting U.S. Attorney Carol Casto announced that former Massey Energy Chief Executive Officer Don Blankenship was sentenced today to a year in federal prison and ordered to pay a $250,000 fine.  Blankenship was sentenced for conspiracy to willfully violate mine health and safety standards after a jury returned a guilty verdict on the federal crime.

“This sentence is a victory for workers and workplace safety,” said Acting U.S. Attorney Casto.  “It lets companies and their executives know that you can’t take chances with the lives of coal miners and get away with it.  Putting the former chief executive officer of a major corporation in prison sends a message that violating mine safety laws is a serious crime and those who break those laws will be held accountable.”

Over the course of the trial, in which jury selection began on Oct. 1, 2015, and the jury returned a guilty verdict on Dec. 3, 2015, the jury heard evidence from 27 witnesses called by the United States.  Many of these witnesses were coal miners who worked at the Upper Big Branch (UBB) mine prior to the 2010 explosion and they testified in detail from their firsthand knowledge of the unsafe working conditions at UBB, violations of U.S. Mine Safety and Health Administration (MSHA) regulations and organized efforts to obstruct and interfere with MSHA inspectors.  The jury heard from Bill Ross, former Manager of Technical Services at Massey, who testified that he warned Blankenship about the company’s practice of rampant violations and told the defendant prior to the UBB explosion that Massey’s standard tactic of ignoring or defrauding MSHA could not be sustained without the possibility of a serious accident that could have fatalities.  The evidence also showed that Blankenship received daily updates on safety violations and helped perpetuate them.

“Putting profits over the safety of workers is reprehensible,” said Acting U.S. Attorney Casto.  “The jury acknowledged that with the guilty verdict and the sentence imposed today recognizes that disregarding safety laws has real consequences.  From the beginning, the objective of this investigation and this prosecution was to not only show that those who violate safety laws will be held responsible, but also to deter these violations in the future to make everyone’s workplace safer.”

“Today’s sentence marks the culmination of a comprehensive, joint investigation that took over five years to complete and resulted in five criminal convictions.” said Special Agent in Charge Scott S. Smith of the FBI’s Pittsburgh Field Office.  “Along with dedicated prosecutors in the U.S. Attorney’s Office and investigators in U.S. Department of Labor’s Office of Inspector General, the FBI is committed to holding those who commit crimes by enabling safety violations and who place profits above the value of human life accountable.”

“Donald Blankenship’s trial and conviction came after an explosion that killed 29 miners at the Upper Big Branch mine,” said Special Agent in Charge John Spratley of the U.S. Department of Labor’s Office of Inspector General, Office of Labor Racketeering and Fraud Investigations’ Philadelphia Regional Office.  “His sentencing today reaffirms the responsibility of company executives to ensure they adhere to health and safety standards.  The Department of Labor’s Office of Inspector General will continue to work with the Mine Safety and Health Administration and our law enforcement partners to investigate criminal worker safety violations that pose a threat to American workers.”

The prosecution was the result of a comprehensive investigation that, including Blankenship, resulted in five criminal convictions.  In addition to the convictions of individuals, the outcome of the investigation also included a resolution of over $200 million with Alpha Natural Resources after it acquired Massey.  This agreement established a foundation dedicated to mine safety and health research, the first of its kind and set aside nearly $50 million in funding for the foundation.  That funding has provided the resources for some of the best and brightest minds in the country to pursue research that will make mines safer all over the world.

This matter was investigated by the FBI and the U.S. Department of Labor’s Office of Inspector General.  Assistant U.S. Attorneys Steven R. Ruby, Gregory McVey and Gabriele Wohl, as well as former U.S. Attorney Booth Goodwin, handled the prosecution and tried the case before a federal jury.

The prosecution is part of a sustained effort by the U.S. Attorney’s Office for the Southern District of West Virginia to protect the health and safety of West Virginia workers by vigorously prosecuting workplace safety crimes and holding accountable those responsible for dangerous working conditions.

Seven Iranians Charged for Conducting Cyber Attacks Against U.S. Financi...

PLASTIC SURGEON SENTENCED TO PRISON FOR TAX EVASION CRIMES

FROM:  U.S.  JUSTICE DEPARTMENT 

Monday, April 4, 2016

Alaska Plastic Surgeon Sentenced to Prison for Wire Fraud and Tax Evasion

Defendant Concealed Bank Accounts in Panama and Costa Rica from the IRS

An Anchorage, Alaska, plastic surgeon was sentenced to 48 months in prison on Friday for wire fraud and tax evasion, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Karen L. Loeffler of the District of Alaska.

“Tax evasion knows no geographic bounds,” said Acting Assistant Attorney General Ciraolo.  “This case demonstrates that there is no longer any country where it is safe for a defendant like Dr. Brandner to hide money from the government.  The Department of Justice, along with its law enforcement partners, will continue to aggressively pursue individuals who conceal assets and income abroad in an effort to evade their responsibilities under our nation’s tax laws.”

Dr. Michael D. Brandner, 67, was convicted by a federal jury in November 2015 of four counts of wire fraud and three counts of tax evasion.  The charges arose from a scheme to conceal over $5 million of assets in secret bank accounts in Panama and Costa Rica from the Internal Revenue Service (IRS) and Dr. Brandner’s wife.  According to the indictment and evidence introduced at trial, shortly after his wife filed for divorce in late 2007, Dr. Brandner collected millions of dollars in marital assets and secretly drove from Tacoma, Washington, to Costa Rica in Central America.  In Costa Rica, he opened two bank accounts into which he deposited over $350,000 in cash and hid a thousand ounces of gold in a safe deposit box.  He then traveled to Panama where he opened an account under the name of a sham corporation and deposited $4.6 million into the account in 2008.

Dr. Brandner concealed both the existence of the bank accounts and the interest income he earned on those accounts from the court in the divorce proceedings and from the IRS.  Dr. Brandner owed the IRS $500,000 in additional taxes for the 2008 through the 2010 tax years.  In 2011, Dr. Brandner repatriated over $4.6 million once the divorce was final only to have the funds seized by U.S. Immigration and Customs Enforcement Homeland Security Investigations (ICE HSI) special agents.  He then lied to federal agents about his control of the funds.

In addition to the prison term, U.S. District Judge Sharon Gleason in Anchorage ordered Dr. Brandner to serve two years of supervised release, and pay $25,922.95 toward the costs of prosecution.

Acting Assistant Attorney General Ciraolo and U.S. Attorney Loeffler thanked special agents of IRS-Criminal Investigation and HSI, who investigated the case and Trial Attorney Ignacio Perez de la Cruz of the Tax Division and Assistant U.S. Attorney Bryan Schroder of the District of Alaska, who jointly prosecuted the case.

AMBASSADOR SARAH MENDELSON'S REMARKS ON PREVENTING TRAFFICKING OF WOMEN AND GIRLS

FROM:  U.S. STATE DEPARTMENT 

Remarks on Combatting the Trafficking of Women and Girls: What Role Can the Private Sector Play in Addressing and Preventing Human Trafficking and Modern-Day Slavery

Ambassador Sarah Mendelson

U.S. Representative for Economic and Social Affairs

U.S. Mission to the United Nations

New York City

March 16, 2016

AS DELIVERED

Thank you distinguished delegates, guests, and panelists for joining us today. Thank you to our experts who helped put this event together. Now, I want to talk to you about the moment – why we’re here – the call to action, and end with a final word of caution.

The moment - in September, the international community came together in agreement over an ambitious set of priorities. The 2030 Agenda for Sustainable Development presents an unprecedented opportunity to invest in our collective future and achieving progress on the world’s most significant social, economic, and environmental challenges. Among those, of course, is combatting the buying and selling of humans – an industry that is estimated to generate annual profits of $150 billion. Specifically, with the adoption of the 2030 Agenda, Member States have targeted trafficking. We have agreed to end trafficking in Target 5.2, “to eliminate all forms of violence against all women and girls in public and private spheres, including trafficking and sexual and other types of exploitation,” Target 8.7, “to take immediate and effective measures to eradicate forced labor, end modern slavery, and human trafficking and secure the prohibition and elimination of the worst forms of child labor, including recruitment and use of child soldiers, and by 2025 end child labor in all its forms,” and Target 16.2, “to end abuse, exploitation, trafficking, and all forms of violence and torture against children.” This is a universal agenda and applies to all of us. Unlike the Millennium Development Goals, the SDGs shift accountability from recipients and donors to relationships between states and people. Governments, companies, nongovernmental organizations, academic institutions, and citizens all have an essential role to play in making the SDGs real.

The call – so we want to seize this opportunity and explore the possibility of building new and creative partnerships to broaden constituencies specifically to combat human trafficking. We envision this as a network of networks. Each of us as consumers has a unique ability to leverage our individual economic power to influence existing markets and create new ones where workers are free from coercion and the exploitation associated with human trafficking. Consumers, cash in hand, have the power to steer this conversation from responsibilities to results. This is no easy task and cannot be achieved in silos. We look forward to continuing this conversation beyond the walls of this chamber.

Let me give you a snap shot of what we are thinking about and encourage you to engage us with your ideas. Along with other Missions and the UN Global Compact, the U.S. Mission is interested in building a coalition of Member States and CEOs of major companies that commit to making their supply chains free of forced labor. Of course, we welcome partnerships with other members of the UN family, such as UNODC and the ILO. This initiative should be understood as part of our broader effort to address cross-cutting themes, goals, and targets to jump start implementation of the SDGs, specifically Goal 5 “gender equality”, Goal 8 “decent work and economic growth,” and Goal 16 “peace, justice, and strong institutions.”

There is no set way to do this. One possibility is that corporate partners would be chosen by member state’s capitals and drawn from a specific list of industries, such as cocoa, coffee, electronics, seafood, mining, and textiles for example. Founding members could agree on an outcome document, financial commitments, and/or a social marketing campaign to ensure domestic and international outreach on the issue of eradicating human trafficking from public and private sector supply chains.

However the coalition comes together, we hope to launch in the coming months, either at a side event during the High Level Political Forum held under the auspices of ECOSOC in July 2016 in New York or in the lead up to the high-level ministerial week in mid-September 2016. This gathering would present an opportunity to share best practices and build a commitment to establish a growth plan from 2016 to 2030 to increase the numbers of Member States and companies to advance SDG implementation as it relates to human trafficking.

Some member states have shared ideas on what shape this could take, who should be engaged, and how best to engage the private sector. Some have expressed interest in engaging civil society. Others are keen to use technology to map supply chains. Understanding how supply chains operate, where key suppliers are located, and what working conditions exist in those locations and sectors is vital to helping a company gain control of its supply chain and target areas with high risks for human trafficking. Some of have suggested creating an UN-related Hub to build on existing efforts with free training courses and case studies. Many have noted that companies prefer “peer-to-peer” engagement, or B2B, approaches when resolving forced labor issues, as these remain crimes and can be problematic for brands. We are agnostic how this effort comes together. What we want to see is member states and companies and consumers agreeing to take action to make supply chains free of forced labor and therefore helping make the SDGs real.

We recognize there is a lot of action in this space. This is sort of the flavor of the month. But so far, work on this has not been closely linked either to the UN or to the SDGs. And here we see this effort as additive: if successful, it would be the first collaboration between multiple member states and the private sector to address human trafficking ideally in both private and public sector supply chains over the next 15 years.

We can work together so that governments enforce labor laws and treat all workers fairly and business can create anti-trafficking policies that acknowledge and address the risks in their industries, operations and supply chains, ensure workers have the right to fair compensation and redress, train staff to understand the indicators of human trafficking, and put remediation plans in place. Governments should set clear expectations for businesses on this issue and adopt policies that promote greater transparency and better reporting on clean supply chain efforts.

I want to end on a note of caution, however. Thank you to all of the panelists for being here today, but I have to admit, for all the talk about how this is the flavor of the month, it was not easy getting representatives from the private sector here today. When my expert called one corporate contact, the first thing the person said was, “Ouch – why would a company want to attend an event on trafficking in their industry? Wouldn’t that make them look bad?” Thankfully, not all companies are concerned about optics. The State Department’s Office to Monitor and Combat Trafficking in Persons has partnered with executives at the Electronics Industry Citizenship Coalition, a coalition of more than 100 electronics companies with a combined annual revenue greater than $3 Trillion committed to supporting the rights of workers. Similarly, there are partnerships to address trafficking in supply chains between companies themselves, such as the Global Business Coalition Against Human Trafficking, GBCAT. But under their breath, colleagues will tell you, this is no easy task. We hope that corporate coalitions to support SDG implementation, such as Impact2030, and UN Global Compact will be partners in this effort.

As I noted at the top, we are still very much in the idea phase of this effort and we welcome input, advice, and engagement as we hope to build out the Circle of Champions.

DETROIT DOC RECEIVES PRISON SENTENCE FOR PARTICIPATING IN $5.7 MILLION MEDICARE FRAUD

FROM:  U.S. JUSTICE DEPARTMENT 

Wednesday, March 23, 2016

Detroit-Area Physician Sentenced to 45 Months in Prison for Role in $5.7 Million Medicare Fraud Scheme

A Detroit-area doctor who prescribed medically unnecessary controlled substances and billed for office visits and diagnostic testing that never took place was sentenced to 45 months in prison today for his role in a $5.7 million Medicare fraud scheme.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge David P. Gelios of the FBI’s Detroit Field Office, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Region and Special Agent in Charge Jarod J. Koopman of Internal Revenue Service-Criminal Investigation (IRS-CI) Detroit Field Office made the announcement.

Laran Lerner, 59, of Northville, Michigan, was sentenced today by U.S. District Judge Victoria A. Roberts of the Eastern District of Michigan, who also ordered Lerner to pay $2,789,409 in restitution.  Lerner pleaded guilty on Aug. 31, 2015, to one count of health care fraud and one count of structuring cash transactions to avoid bank reporting requirements.

According to admissions made as part of his plea agreement, Lerner lured patients into his clinic with prescriptions for medically unnecessary controlled substances and then caused Medicare to be billed for a variety of unnecessary prescriptions, diagnostic tests and office visits to make it appear as though he was providing legitimate medical services.  Lerner admitted that in reality, the controlled medications were simply used to facilitate and conceal his scheme to steal millions of dollars from the Medicare program.  According to Lerner’s plea agreement, Medicare was billed $5,748,237 as a result of Lerner’s unnecessary prescriptions, office visits and diagnostic testing.

Lerner also admitted that he structured cash deposits he received as a result of his scheme in $5,000 increments on consecutive days at various branch locations in the Detroit area in order to avoid the requirement that domestic banks file a currency transaction report with the Secretary of the Treasury for all currency transactions over $10,000.  According to his plea agreement, for example, in April 2013, Lerner deposited $70,000 in cash by making deposits of $5,000 on 14 different days.

As part of the plea agreement, Lerner agreed to permanently surrender his Drug Enforcement Administration controlled substance registration and agreed to not to re-apply for this license in the future, and agreed that were he granted any application from any agency to prescribe or dispense controlled substances, it would be against the public interest.

The FBI, HHS-OIG and IRS-CI investigated the case, which 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 of the Eastern District of Michigan.  Fraud Section Trial Attorney Elizabeth Young is prosecuting the case.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,300 defendants who collectively have billed the Medicare program for over $7 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.