FUGITIVE OF THE WEEK ARRESTED BY PORTSMOUTH POLICE DEPARTMENT

FROM:  U.S. MARSHALS SERVICE 
October 17, 2013 Deputy U.S. Marshal Jamie Berry, District of New Hampshire
'Fugitive of the Week' Arrested by U.S. Marshals Fugitive Task Force in 
Portsmouth, NH

Concord, NH – Last night, Portsmouth Police Department arrested this week’s "Fugitive of the Week" Michael David Mahoney in Portsmouth, NH. Mahoney, a 50 year old who was last known to reside in Hampton, NH, was being sought on two outstanding arrest warrants. The Hillsborough County Sheriff’s Office, was seeking Mahoney on a warrants for failure to appear for burglary and failure to appear for witness tampering.

A tipster who had seen Mahoney featured as the fugitive of the week, recognized Mahoney in Portsmouth, NH and immediately notified the Portsmouth Police Department. Mahoney was swiftly located and arrested by the Portsmouth Police at a local homeless shelter without incident.

Since the inception of the New Hampshire Joint Fugitive Task Force in 2002, these partnerships have resulted in over 5,523 arrests (updated 09/03/2013). These arrests have ranged in seriousness from murder, assault, unregistered sex offenders, probation and parole violations and numerous other serious offenses. Nationally the United States Marshals Service fugitive programs are carried out with local law enforcement in 94 district offices, 85 local fugitive task forces, 7 regional task forces, as well as a growing network of offices in foreign countries.

AG HOLDER'S REMARKS AT INTERNATIONAL ASSOCIATION OF CHIEFS OF POLICE ANNUAL CONFERENCE

FROM:  U.S. JUSTICE DEPARTMENT 
Attorney General Eric Holder Delivers Remarks at the International Association of Chiefs of Police Annual Conference
~ Monday, October 21, 2013

Thank you, Chief [Craig] Steckler, for those kind words; for your leadership as President of the International Association of Chiefs of Police; and for your four decades of service to law enforcement agencies across the state of California. It’s a privilege to share the stage with you today, and a pleasure to join Executive Director [Bart] Johnson, the IACP’s Board of Directors – and so many of your distinguished members – as we celebrate the achievements, and honor the sacrifices, of law enforcement professionals throughout the country and around the world.

I’d particularly like to thank Chief [Michael] Kehoe for taking the time to be with us here in Philadelphia.  He and his colleagues in Newtown, Connecticut have displayed remarkable leadership in a time of unspeakable tragedy, working to heal a community that has witnessed the very worst of humanity.  Our nation will be forever grateful for your service.

I’d also like to congratulate Pennsylvania State Trooper [Timothy] Strohmeyer on being named International Police Officer of the Year.  His courageous actions in the line of fire last December – when he placed his own life at great risk in order to save the lives of those around him – exemplified the very best of what it means to be a public servant.  He is a hero in the truest sense of the word. And it’s an honor to join the IACP in celebrating such a prestigious, and well-deserved, recognition.

Finally, I’d like to thank all of the federal law enforcement officials who are with us today – including my good friend, FBI Director Jim Comey, and representatives of the FBI, ATF, and DEA – for their dedication, and excellent work, during the recent federal government shutdown.  Although a substantial portion of the Justice Department’s workforce had to be furloughed – and many employees and their families faced hardships – you and your colleagues responded to this unnecessary and avoidable crisis with resolve.  You worked tirelessly to ensure that the Justice Department’s vital life and safety functions were not interrupted.  And alongside each of the local departments represented here this morning – and thousands of others, led by IACP members, across this country – you kept fighting to keep the American people safe.

For 120 years, particularly in moments of great challenge, the IACP has been a strong ally – and an indispensable leader – in our national efforts to do just that.  Through the decades, this organization has stood as a driving force for progress – advancing the struggle against crime and violence while protecting the safety of those on the front lines.  You’ve repeatedly proven the power of cooperation and collaboration across jurisdictions – and even international borders. You’ve stood up, and spoken out, for the physical and mental health of those who risk their lives to safeguard their communities.  And especially in recent years – through sequestration, furloughs, and unprecedented budgetary difficulties at every level of government – you’ve helped to secure historic progress in fulfilling the priorities we share.

As we speak – across the United States – your work is enabling us to make a meaningful, measurable difference in fighting terrorism, combating threats to the most vulnerable members of society, and preventing the gun-, gang-, and drug-fueled violence that steals too many promising futures each day.  In the last few years alone, you’ve brought your considerable expertise to bear in helping agencies like the Departments of Justice and Homeland Security to strengthen the Nationwide Suspicious Activity Reporting Initiative.  You’ve bolstered our national network of Fusion Centers – so we can share information and intelligence more freely, communicate more effectively, and operate more efficiently than ever before. You’re moving in a variety of ways to counter global threats like cybercrime and violent extremism.  And here in Philadelphia, this week, you’re discussing some of the most urgent challenges your members face – including the critical role that every local police department must play in responding to active shooter situations such as last month’s tragic mass shooting at the Washington Navy Yard.

Between 2000 and 2008, the United States experienced an average of approximately five active shooter incidents every year.  Alarmingly, since 2009, this annual average has tripled.  We’ve seen at least 12 active shooter situations so far in 2013.  Even more troubling, these incidents seem to be getting more and more deadly.

Over the last four years, America has witnessed an increase of nearly 150 percent in the number of people shot and killed in connection with active shooter incidents. Although research methods and results vary, it’s become clear that new strategies – and aggressive national response protocols – must be employed to stop shooters in their tracks.

In the past, patrol officers commonly trained to “contain and wait” an active shooting incident until more specially trained and equipped personnel could arrive.  But years of after-action analysis has ushered in a major tactical shift and reinforced the need for an immediate, aggressive response to active shooters.  In order to prevent additional casualties, it is often patrol officers – not necessarily SWAT teams – who serve as the tip of the spear in responding to these incidents.

The reality is that police don’t always have the luxury of time to get their most highly-trained, best-equipped officers on the scene.  To save lives, the first officers to arrive must sometimes be the ones to directly engage an active shooter.  That’s why all law enforcement officers must have the best equipment and most up-to-date training to confront these situations.  We owe these officers nothing less.

And we take this responsibility seriously.  This is why the FBI has partnered with the IACP and other groups to provide guidance to the first officers who arrive on the scenes of these crimes.  Over the last decade, the Justice Department has helped train 50,000 front-line officers, more than 7,000 on-scene commanders, and over 3,000 local, state, and federal agency heads on how to respond to active shooters. After the tragic losses at Sandy Hook Elementary School, we joined with the Departments of Homeland Security, Health and Human Services, and Education to bring our comprehensive efforts to a new level.  And we’re currently engaging with other agency partners, law enforcement leaders like you, and outside experts to develop guidance for how schools, houses of worship, institutions of higher learning, and even ordinary citizens should prepare for active shooter incidents.

With your support, we’re placing an increased emphasis on the need to carefully evaluate threats, and certain individuals, in order to disrupt planned shootings and other violent attacks.  The FBI’s Behavioral Threat Assessment Center works daily with local law enforcement and others to assess individuals who may be on a trajectory to commit acts of violence.  Since 2011, the Center has reported hundreds of successful disruptions – including an anticipated 150 this year alone. In every case – both in the intervention process, and when responding to active shooter incidents – local law enforcement officers have saved innocent lives by reacting with integrity, courage, and uncommon valor in the face of these too-frequent tragedies.

As we move forward with these efforts, I want to assure you that leaders at every level of the Justice Department and the FBI are determined to continue working with the IACP to make sure your members have the tools, training, and guidance they need to respond to active shooter incidents – and other threats – whenever and wherever they arise.  And we’re committed to continuing the frank and constructive dialogue that our organizations have built over the last century.

This is why I’ve made it a priority to take part in the IACP’s annual conference every single year since becoming Attorney General.  Throughout my career – as a prosecutor, as a former judge, and as the brother of a retired police officer – I’ve been inspired, and humbled, by the bravery of men and women in law enforcement.  I’ve been proud to support leaders like all of you.  And I’m here today not just to engage with you – and learn from you – but also, quite simply, to say thank you: for your tireless commitment to public service.  For consistently bringing innovative leaders together – at forums like this one – to discuss pressing challenges.  And – especially – for stepping to the forefront of our national efforts to address the deficiencies and disparities that have plagued America’s criminal justice system for far too long.

As I indicated in August, in a speech before the American Bar Association in San Francisco, President Obama and I are determined to work with Members of Congress from both parties – as well as state leaders, local officials, and law enforcement – to keep protecting public safety while strengthening our criminal justice system as a whole. With this goal in mind – under the Department’s new “Smart on Crime” initiative – I’ve announced a number of changes that will enable us to forge the stronger neighborhoods, the safer communities, and the more just society that all of our citizens deserve.  These include modifications to the Justice Department’s charging policies with regard to mandatory minimum sentences for certain federal low-level, drug-related offenses. This will help ensure that individuals accused of these crimes can face sentences that are better suited to their alleged conduct – and that limited criminal justice resources can be use more effectively, to hold accountable violent criminals, drug kingpins, and high-level traffickers.

My colleagues and I are also taking steps to advance proven strategies for improving reentry and reducing recidivism.  We’re exploring a range of innovative diversion programs, such as drug rehabilitation and community service initiatives, that can serve as alternatives to incarceration in some cases. And we’ll be counting on your continued leadership – and close engagement – as we implement these changes and continue to move forward with the kinds of comprehensive public safety solutions that the IACP has championed for decades.

I’m confident that these targeted reforms will help to address concerns that all of us share.  Just as importantly, they will improve the ability of policymakers and law enforcement to allocate resources to the areas that need our assistance – and your hard work – the most.

After all, as police chiefs, you have some of the most difficult jobs in America.  On a daily basis, you’re charged with maintaining order in communities that are sometimes defined by disorder and distress.  The fact is that a disproportionate number of those communities are communities of color – where young African American and Latino men are at increased risk of becoming involved with our criminal justice system, as victims or as perpetrators.

These are communities where too many Americans are trapped in a vicious cycle of poverty, criminality, and incarceration – and where law enforcement officers work heroically, but often against long odds, to stem a seemingly relentless tide of violence.  Interactions between area residents and officers on patrol are, in too many cases, characterized by distrust and even hostility – on both sides.  We’ve seen all too often that some law enforcement officers believe that community residents tolerate and even encourage disrespect for the law – while some citizens feel that the police unfairly target them for mistreatment and abuse.

That’s why it’s time to declare, once and for all, that we must do better – as a country and as a people.  For the safety of our men and women on the front lines – and in the name of winning the respect and cooperation of America’s minority communities – it is incumbent upon law enforcement leaders to help bridge this divide.  And we can start by recognizing that compliance with the law begins not with the fear of arrest or even of incarceration – but with respect for the institutions that guide our democracy.

A substantial body of research tells us that – when those who come into contact with the police feel that they are treated fairly – they are more likely to accept decisions by the authorities, obey the law, and cooperate with law enforcement in the future – even if they disagree with specific outcomes. Clearly, each of us has an opportunity, and a responsibility, to refocus on engagement with the individual communities we serve – by involving our fellow citizens in the process of establishing clear norms of behavior; by setting standards for right and wrong; and, ultimately, by relegating the era of suspicion and distrust to the past.

I’m pleased to note that many of the police departments represented here – under the leadership of visionary executives in and beyond this room – have already demonstrated their commitment to the process of reconciliation. Across the country, countless IACP members and their colleagues are applying groundbreaking research – in procedural justice, implicit bias, and truth-telling – to the jurisdictions they serve.  I’m proud to report that the Justice Department is supporting this work through our COPS Office and the Office of Justice Programs – under the leadership of Assistant Attorney General Karol Mason, who we’re fortunate to have with us this morning.

In many places, these collaborative efforts – to provide training on procedural justice, to promote reconciliation, and to improve interactions with police and young people of color – are already showing tremendous promise.  Yet a great deal of work remains to be done when it comes to supporting police departments, increasing public safety, and standing with every member of the rank-and-file.

This is why, in addition to your success, my colleagues and I are also firmly committed to your safety. Despite the ill-advised sequestration and other shortfalls, the Department’s Bureau of Justice Assistance awarded nearly $280 million during Fiscal Year 2013 – under the Edward Byrne Memorial Justice Assistance Grant Program – to support more than 50 states and territories and over a thousand local jurisdictions.  Under our groundbreaking VALOR initiative – which I announced at an IACP conference three years ago – we’ve held 77 trainings to help prevent violence against law enforcement, and to improve officer resilience and survivability during violent encounters.  To date, more than 11,000 officers have completed this training.  Our COPS Office is currently offering additional resources – convening an Officer Safety and Wellness Working Group and distributing funds to support the hiring and retention of officers across the country.  Just last month, I traveled to Detroit to announce the latest round of COPS hiring grants – which will award 263 agencies a total of $125 million to help fund nearly 1,000 law enforcement positions, including more than 350 school resource officers.

Beyond these important resources, the Department is working to provide our officers with the lifesaving equipment they need to do their jobs both safely and effectively.  Since our Bulletproof Vest Partnership Program was launched more than a decade ago, we have awarded more than $270 million toward the purchase of over one million protective vests.  We’ve also instituted a “mandatory wear” policy for all uniformed officers in jurisdictions receiving BVP funds. In 2012 alone, vests saved the lives of no fewer than 33 officers in 20 different states.  Thirteen of these vests – including the one that most likely saved Trooper Strohmeyer’s life – were purchased, in part, with BVP funds.  And as we come together today to continue this important work, to build upon the progress we’ve seen, and to carry our collective efforts into the future, I want all of you to know that – for today’s Justice Department, and for this Attorney General – all of this is only the beginning.

We will never stop fighting for the tools and resources you need.  We’re committed to complementing the work you do every day – through your Center for Officer Safety and Wellness and your renewed focus on preventing officer suicide – to ensure that America’s finest can protect themselves.  To honor – and empower – all who wear the badge.  And to help overcome the challenges that lie ahead – and secure the future we must build – by standing shoulder-to-shoulder with every member of America’s premier law enforcement organization.

I look forward to all that we must, and surely will, achieve together.  I am proud, and deeply grateful, to count you as colleagues and partners.  I thank you, once again, for all that you do.  And I wish you all a most productive conference.

VIETNAMESE NATIONAL CHARGED IN INTERNATIONAL PERSONALLY IDENTIFIABLE INFORMATION THEFT SCHEME

FROM:  U.S. JUSTICE DEPARTMENT
Friday, October 18, 2013

Vietnamese National Charged in Widespread International Scheme to Steal and Sell Hundreds of Thousands of U.s. Persons’ Personally Identifiable Information
A Vietnamese national has been indicted in the District of New Hampshire for allegedly participating in an international scheme to steal and sell hundreds of thousands of Americans’ personally identifiable information (PII) through various underground websites that he operated.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney John P. Kacavas of the District of New Hampshire, and Resident Agent in Charge Holly Fraumeni of the U.S. Secret Service’s Manchester Field Office made the announcement after the indictment was unsealed.

Hieu Minh Ngo, 24, a Vietnamese national, was charged in a 15-count indictment filed under seal in November 2012, charging him with conspiracy to commit wire fraud, substantive wire fraud, conspiracy to commit identity fraud, substantive identity fraud, aggravated identity theft, conspiracy to commit access device fraud, and substantive access device fraud.  Ngo was arrested upon his entry into the United States in February 2013.  The statutory maximum penalties are five years on the identity fraud and identity fraud conspiracy counts, two years each on the aggravated identity theft counts, 20 years on the wire fraud count and wire fraud conspiracy counts, 10 years on the substantive access device fraud count and five years on the conspiracy to commit access device fraud count.

According to the indictment, from 2007 through 2012, Ngo and other members of the conspiracy acquired, offered for sale, sold, and/or transferred to others packages of PII for more than 500,000 individuals.  These packages, known as “fullz,” typically included a person’s name, date of birth, social security number, bank account number and bank routing number.  During this same time, Ngo and other members of the conspiracy acquired, offered for sale, sold, and/or transferred to others stolen payment card data, which typically included the victim account holder’s payment card number, expiration date, card verification value number, account holder name, account holder address and phone number.

The indictment alleges that Ngo operated one or more online marketplaces for various carding activities, known as carder forums, where he stored and offered for sale “fullz” and other PII, including “fullz” of individuals located in the District of New Hampshire.  On two carder forums, Ngo and his co-conspirators offered buyers the option to obtain a specified quantity of “fullz” or to submit a query of a particular name to obtain that person’s associated PII.  Ngo and his co-conspirators allegedly offered several categories of PII, depending on how recently the data had been acquired, and charged higher prices for more recent data.  Ngo allegedly made arrangements with others who, after paying a fee, could access and then and re-sell the stolen payment card data, “fullz” and other PII.  Ngo and his co-conspirators created one or more accounts with a digital currency service and used those accounts to receive funds for the stolen payment card data, “fullz” and other PII that they sold.

The case was investigated by the U.S. Secret Service and is being prosecuted by Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Arnold H. Huftalen of the District of New Hampshire.

The details contained in the indictment are allegations.  The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

FORMER POLICE OFFICER SENTENCED TO PRISON FOR ASSAULTING ARRESTEE

FROM:  U.S. JUSTICE DEPARTMENT 
Thursday, October 17, 2013

Former Town Creek, Ala., Police Officer Sentenced for Assaulting Arrestee
Brandon Shane Mundy, a former police officer of numerous law enforcement agencies, the most recent being the Town Creek, Ala., Police Department was sentenced today by U.S. District Court Judge R. David Proctor to serve five years in prison and three years of supervised release, and to pay $3,745 in restitution for violating the civil rights of a man during the course of an arrest.  Mundy previously pleaded guilty on April 25, 2013, to one count of willfully depriving the man of his constitutional right to be free from excessive force by a law enforcement officer acting under color of law.  According to information presented to the court, on Nov. 22, 2009, Mundy was involved in a vehicle pursuit and fired shots at a man’s vehicle before later ramming the vehicle and causing it to wreck in a ditch.  While another police officer reached the man and placed him under arrest without resistance, Mundy arrived and unjustifiably and repeatedly beat the man in the head with an object that was either a baton or a flashlight causing the man to suffer physical injury.  After Mundy lost control of the object, he continued to strike the man in the head with his fist.

 “When law enforcement officers abuse their power and violate the civil rights of those in custody, they will be held accountable,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division.  “The Justice Department will continue to vigorously prosecute those who cross the line to engage in acts of criminal misconduct.”

“Every police officer is sworn to serve and protect, and virtually all of them take that oath seriously.  This officer did not, and assaulted a citizen in violation of his oath,” said Joyce White Vance, U.S. Attorney for the Northern District of Alabama.  “My office continues to aggressively prosecute police misconduct and takes a zero tolerance policy in this regard.”

This case was investigated by the FBI and prosecuted by Assistant U.S. Attorney Elizabeth Holt of the Northern District of Alabama and Civil Rights Division Trial Attorney Daniel H. Weiss.

TWO MEN PLEAD GUILTY TO FEDERAL HATE CRIME CHARGES

FROM:  JUSTICE DEPARTMENT 
Thursday, October 17, 2013
Two Compton Men Plead Guilty to Federal Hate Crime Charges Resulting from New Year's Eve Attack on African-American Youths

Two Latino men associated with the Compton 155 street gang pleaded guilty today to federal hate crime charges related to a racially motivated attack on African-American juveniles at a residence in Compton, Calif. on New Year’s Eve.

Jeffrey Aguilar, 20, who uses the moniker “Terco,” and Efren Marquez Jr., 22, who is also known as “Stretch” and “Junior,” each pleaded guilty to violating the Matthew Shepard-James Byrd Hate Crime Prevention Act.
         
Appearing before United States District Judge Terry J. Hatter Jr., Aguilar admitted that on Dec. 31, 2012, he and another individual physically attacked a 17-year-old African-American, who was walking down a street in the City of Compton.  Aguilar chased down and struck the victim in the head with a metal pipe.  During the incident, Marquez threatened to shoot another African-American juvenile who was present.  Both Aguilar and Marquez admitted that the attack on the 17-year-old victim was substantially motivated by his race and color.

“These juvenile victims were threatened and assaulted because of their race,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division. “Such intimidation and violence has no place in our society. The Justice Department will continue to vigorously prosecute those who commit such acts of hate.”

 “The perpetrators of hate crimes hurt not only the individuals who are attacked, but also society as a whole,” said United States Attorney André Birotte Jr.  “For this reason, we are dedicated to working with our law enforcement partners to ensure that justice is brought to those who choose to commit such heinous crimes.”
         
“Finding justice for victims of civil rights violations is among the most important responsibilities of FBI agents,” said Bill Lewis, Assistant Director for the FBI's Los Angeles Field Office.  “The success of this case is due to the shared goals and long-term cooperation between the Los Angeles Sheriff's Department and the FBI, and prosecutors at the Department of Justice.”  

“Hate crimes affect not only the victims, they also destroy our society’s democratic principles” said Sheriff Lee Baca of the Los Angeles Sheriff’s Department.  “Law enforcement is dedicated to protecting the civil rights of all members of our community. The success of this joint investigation sends a message that racially motivated crimes will not be tolerated.”
         
Aguilar and Marquez are scheduled to be sentenced by Judge Hatter on Jan. 6, 2014.  At sentencing, each defendant will face a statutory maximum penalty of 10 years in federal prison.
         
This case is the result of an investigation conducted by the FBI and the Los Angeles County Sheriff’s Department.  It is being prosecuted by Assistant U.S.  Attorney Reema El-Amamy of the Violent and Organized Crime Section of the U.S. Attorney’s Office and Trial Attorney Saeed Mody of the Civil Rights Division.        

ATTORNEY GENERAL HOLDER WELCOMES JUSTICE DEPARTMENT EMPLOYEES BACK AFTER SHUTDOWN

FROM:  U.S. JUSTICE DEPARTMENT 
Attorney General Holder Welcomes Employees Back to Work
~ Thursday, October 17, 2013
Dear Colleagues,

I am grateful to be able to welcome the entire Department of Justice back to work! Those of you who were not able to work during the shutdown were greatly missed, and the efforts of those who were at work during this difficult period were truly appreciated.

My top priority now is to ensure that each of you is able to fully resume your work as quickly as possible. The Department of Justice draws its strength from the expertise, hard work, and tenacity of our nearly 115,000 employees. All of you are essential to protecting the American people and to performing our critical law enforcement functions. Our collective work is absolutely crucial, and I don't want another day missed.

I regret the anxieties and hardships the shutdown has caused you and your families. While you return to your work for the Department, I know that the financial consequences of the lapse in appropriations will continue to be of great concern to you. Over the coming days, we will continue to provide updates about how and when we will be able to address the consequences of the shutdown.

Thank you again for your tireless service to the American people. Let's get back to work!

Sincerely,

Eric H. Holder, Jr.
Attorney General

FELONY FUGITIVE ARRESTED

FROM:  U.S. MARSHALS SERVICE 
October 10, 2013
SDUSM Mike Potter,
Middle District of North Carolina
(336) 332-8704
 Greensboro Task Force Grabs High Point Fugitive

High Point, NC – This morning at 10:00 AM, Jashon Terriese Singleton, a 21 year old, Black male was arrested by the U.S. Marshals Joint Fugitive Task Force (JFTF) and the High Point Police Department Street Crimes Unit. Singleton was wanted on outstanding warrants for multiple counts of Felony Breaking and Entering, Larceny after Breaking and Entering and Injury to Personal Property by the High Point Police Department.

During the JFTF’s investigation, investigators conducted surveillance in the vicinity of 1209 E. Commerce Avenue in which Singleton was identified as a passenger in a vehicle driven by one of his family members. Members of the JFTF executed a vehicle stop and arrested Singleton. Singleton was transported to the High Point Police Department and was turned over to the lead detective on the case.

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.

FOREIGN MURDER SUSPECTS ARRESTED IN EDINBURG, TEXAS

FROM:  U.S. MARSHALS SERVICE 
October 09, 2013
DUSM Martin Gomez
Southern District of Texas
 Fugitive Task Force Arrest Murder Suspects in Edinburg, TX

McAllen, Texas – The United States Marshals Service-multi agency led Gulf Coast Violent Offenders Fugitive Task Force (GCVOFTF) announce the arrests of two fugitives wanted in Mexico.

Humberto Villasenor-Soto and Osvaldo De La Paz-Soto are wanted by Mexican Authorities of the Procuraduria General De Justicia Del EDO for Homicide. On January 2013, Villasenor-Soto and his cousin De La Paz-Soto allegedly shot and killed a young male in Morelia, Michoacán, Mexico, as he attempted to help and protect his mother from Villasenor-Soto and De La Paz-Soto. It is alleged that Villasenor-Soto and De La Paz-Soto held a gun to the victim’s mother as they carjacked her vehicle from the front driveway of her residence. The teenage boy victim was fatally shot as Villasenor-Soto and De La Paz-Soto drove away with the stolen vehicle. Mexican Authorities from the Procuraduria General De Justicia Del EDO contacted the United States Marshals Service when they learned that the assailants fled into the United States to avoid apprehension. The GCVOFTF in McAllen, Texas, were requested to assist in the apprehension of the two foreign fugitives.

On October 8, 2013, members of the GCVOFTF developed information that Villasenor-Soto and De La Paz-Soto were hiding in an apartment complex in Edinburg, Texas. Members of the GCVOFTF approached and made entry into the apartment after observing De La Paz-Soto walk into the apartment. Members of the GCVOFTF arrested Villasenor-Soto and De La Paz Soto after finding them inside a bedroom. Villasenor-Soto and De La Paz-Soto were turned over to Mexican Authorities at the Hidalgo Port of Entry with the assistance of U.S. Customs and Border Protection.

The GCVOFTF is a team comprised of law enforcement officers from the Bureau of Alcohol
Tobacco & Firearms, Hidalgo County Sheriff’s Department, Homeland Security Investigations,
McAllen P.D., Mission P.D., San Juan P.D., Starr County Sheriff’s Department, TDCJ Office of
Inspector General, Texas Department of Public Safety, U.S. Marshals Service and Weslaco
P.D.

DURHAM FUGITIVE ARRESTED BY U.S. MARSHALS

FROM:  U.S. MARSHALS SERVICE 
October 09, 2013
SDUSM Mike Potter,
Middle District of North Carolina

Durham Fugitive Arrested in Richmond, Virginia

Richmond, VA – This morning at 08:30 AM, Jeral Thomas Ore Jr., a 37 year old, Black Male was arrested by the U.S. Marshals Capital Area Regional Fugitive Task Force (CARFTF). Ore was wanted by the Durham Police Department for failure to appear on the charges of Statutory Rape/Sex Offense, Second Degree Kidnapping, and Indecent Liberties with a Child. It’s alleged that these incidents occurred in 2007, the Durham Police Department issued the warrants in 2009 and Ore was arrested. On February 4th, 2010, Ore failed to appear in court on these charges and subsequently, a failure to appear warrant was issued for Ore.

Through a Crime Stopper’s Tip, Ore was located and taken into custody by the CARFTF without incident at the Rainbow Motel at 4611 Jefferson Davis Highway.

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 ARREST ROLEX WATCH ROBBER

FROM:  U.S. MARSHALS SERVICE 
Savannah's Most Wanted Captured

Savannah, Georgia – A Savannah man on the Savannah Chatham Metropolitan Police Department’s Most Wanted list was arrested by the U.S. Marshals Southeast Regional Task Force and SCMPD K-9 on October 1, 2013.

Rashamel Okise Gardner, 20, was wanted by the Savannah Chatham Metropolitan Police Department on two separate warrants charging him with Robbery by Sudden Snatching for incidents at F.P. Wortley and Levy Jewelers in Augusts of 2013 where Rolex watches were taken from both stores totaling approximately $42,000.

The case was referred to the Savannah Office of the United States Marshals Southeast Regional Fugitive Task Force to locate and apprehend Gardner. An extensive investigation was conducted by the Marshals Task Force and information was generated that Gardner was in a house at 908 Waters Avenue, in Savannah, GA. Task Force officers surrounded the home and gained entry to look for the Gardner. An SCMPD K-9 was called to assist in locating Gardner in the home. Officers determined that Gardner went up in the attic area. While trying to coax him out of the attic, Gardner fell through the ceiling into the rear of the home. Gardner was arrested without incident and taken to SCMPD headquarters to be interviewed by detectives.

Annually, investigations carried out by the U.S. Marshals result in the apprehension of over 36, 000 federal fugitives. More federal fugitives are arrested by the Marshals Service than all other federal agencies combined. In 2011, U.S. Marshals led task forces arrested more than 86,000 state and local fugitives, which cleared over 113,000 warrants.

The Marshals Southeast Regional Fugitive Task Force has three offices: Atlanta, Macon, and Savannah. The task force covers the whole state of Georgia. The Savannah Office of the Southeast Regional Fugitive Task Force is a team comprised of investigators from the Georgia Department of Corrections, the Chatham County Sheriff’s Department, the Savannah Chatham Metropolitan Police Department, the Georgia Board of Pardons and Paroles, the McIntosh County Sheriff’s Department, the Liberty County Sheriff’s Department, the Bulloch County Sheriff’s Department, the Beaufort County Sheriff’s Department, the Hampton County Sheriff’s Department, and the United States Marshals Service. The task force objective is to seek out and arrest fugitives charged with violent crimes, drug crimes, sex offenders, and other felonies.

INVESTORS PLEAD GUILTY IN BID-RIGGING AT MUNICIPAL TAX LIEN AUCTIONS CASE

FROM:  U.S. JUSTICE DEPARTMENT 
Monday, September 30, 2013
Two New Jersey Investors Plead Guilty for Their Roles in Bid-rigging Schemes at Municipal Tax Lien Auctions
Investigation Has Yielded 14 Guilty Pleas

Two financial investors who purchased municipal tax liens pleaded guilty today for their roles in a conspiracy to rig bids at auctions conducted by New Jersey municipalities for the sale of those tax liens, 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 Robert U. Del Vecchio Sr., of Hawthorne, N.J. According to the charge, from in or about 2000 until approximately December 2008, Del Vecchio Sr. 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.  Additionally, a felony charge was filed today in the U.S. District Court for the District of New Jersey in Newark, against Michael Mastellone, of Cedar Knolls, N.J. for participating in a similar conspiracy from in or about 2000 until approximately February 2009.  The department said that Del Vecchio Sr. and Mastellone proceeded to submit bids in accordance with the agreements and purchased tax liens at collusive and non-competitive interest rates.

“By conspiring to rig the bids of municipal tax liens, the conspirators profited at the expense of those already struggling financially,” said Scott D. Hammond, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program.  “Protecting Americans from these types of bid-rigging schemes remains a high priority for the division.”

The department said 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, Del Vecchio Sr. and Mastellone were involved in the 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 which 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 in 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 pleas are the 13th and 14th guilty pleas resulting from an ongoing investigation into bid rigging or fraud related to municipal tax lien auctions.  Nine individuals – Isadore H. May, Richard J. Pisciotta Jr., William A. Collins, Robert W. Stein, David M. Farber, Robert E. Rothman, Stephen E. Hruby, David Butler and Norman T. Remick – 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 charges were 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. For more information on the task force, please visit www.StopFraud.gov.

This ongoing investigation is being conducted by the Antitrust Division’s New York Office and the FBI’s Atlantic City, N.J., office.

BUSINESSMAN SENTENCED FOR TAX FRAUD

FROM:  U.S. JUSTICE DEPARTMENT 
Monday, September 30, 2013
North Carolina Businessman Sentenced for Tax Fraud

William Robert Hupman Jr., of Mebane, N.C., was sentenced to serve 17 months in prison followed by one year of supervised release for tax fraud today, the Justice Department and the Internal Revenue Service (IRS) announced.  Hupman was also ordered to pay restitution to the IRS of $103,420.

Hupman pleaded guilty on May 31, 2013, to corruptly endeavoring to obstruct or impede the due administration of the Internal Revenue laws.  According to court documents and court proceedings, Hupman managed and controlled Security Concepts LLC (SC), a security alarm company based in Mebane, N.C.  Instead of receiving a salary from SC, Hupman received income by using an SC debit card to pay his expenses.  Despite receiving over $770,000 in such fees between 2007 and 2011, Hupman has not filed an individual income tax return since tax year 2006.

Court documents indicate that in addition to his failure to comply with his personal income tax responsibilities, Hupman also failed to comply with his employment tax responsibilities at SC.  As the person who managed and controlled SC, Hupman was responsible for withholding employment taxes and paying them over to the IRS on a periodic basis.  SC last paid over employment taxes and filed the required tax form for the third quarter of 2009, despite the fact that employment taxes were actually withheld from the wages of SC employees. Hupman did not pay employment taxes or file the required tax form for the fourth quarter of 2009 or any of the quarters in 2010 and 2011.  He also has not paid the federal unemployment taxes owed or filed the required tax form for years 2009, 2010 or 2011.  According to court documents and court proceedings, the criminal tax loss was $103,420.

Kathryn Keneally, Assistant Attorney General of the Justice Department’s Tax Division, thanked Special Agents of IRS - Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Todd Ellinwood and Kevin Lombardi for prosecuting the case.

JUSTICE FILES LAWSUIT AGAINST RUSTON, LA. PUBLIC HOUSING AUTHORITY

FROM:  U.S. JUSTICE DEPARTMENT
Monday, September 30, 2013
Justice Department Files Lawsuit Against Ruston, La. Public Housing Authority Alleging Race Discrimination in Housing Practices

The Justice Department today announced that it has filed a lawsuit alleging that the Housing Authority for the City of Ruston, La., has engaged in a pattern or practice of discrimination against African-American tenants, in violation of the federal Fair Housing Act.  The Ruston Housing Authority is a public housing authority that provides housing for persons of low income in Ruston.  Currently, the Ruston Housing Authority owns and maintains five housing complexes in Ruston.

The complaint alleges that the Ruston Housing Authority maintained a racially segregated housing authority by steering and assigning applicants to its five complexes based on race, rather than in order of their placement on the Ruston Housing Authority’s waiting list.  The complaint also alleges that the Ruston Housing Authority’s discriminatory assignment practices have harmed dozens of applicants and tenants who were assigned to segregated housing or delayed housing because of their race.

“Access to housing free from racial discrimination is everyone’s right, including those who seek public housing assistance,” said Jocelyn Samuels, Acting Assistant Attorney General for the Justice Department’s Civil Rights Division.  “The department will continue its vigorous enforcement of the Fair Housing Act.”

“The United States Attorney’s Office is committed to addressing unlawful discriminatory practices and enforcing anti-discrimination laws,” said Stephanie A. Finley, U.S. Attorney for the Western District of Louisiana.  “Today’s filing is an example of our continuing efforts to end discrimination.”

CONVICTED SEX OFFENDER ARRESTED IN PORTLAND, MAINE

FROM:  U.S. MARSHALS SERVICE
Most Wanted Fugitive, Convicted Sex Offender Clyde Hall Jr Arrested in Portland, Maine
Adam Walsh Act Violator Failed to Report to Halfway House in Albany, NY

WASHINGTON – Deputy U.S. marshals today arrested 15 Most Wanted fugitive Clyde Hall Jr., a career sex offender who violated conditions of release and failed to register as a sex offender. Members of the United States Marshals Service’s Maine Violent Offender Task Force apprehended Hall without incident earlier this morning on Congress Street in Portland, Maine. The fugitive had been on the run since March 2012 and was added to the USMS 15 Most Wanted list Sept. 12, 2012, becoming the first person added to the list who had violated the Adam Walsh Child Protection and Safety Act (AWA).

“Clyde Hall is a violent convicted sex offender who was a threat to innocent, law-abiding citizens,” said Director Stacia Hylton of the U.S. Marshals Service. “Deputy U.S. Marshals make it a priority each day to locate and apprehend sex offenders who fail to comply with state registry requirements designed to keep the public safe. Hall’s arrest today makes our communities safer.”

Hall was released from the Butner Federal Correctional Institution in North Carolina in March 2012, after serving a 25-month sentence based on his conviction in the Northern District of New York for violating the AWA as a convicted sex offender. Conditions of his release required him to report to a halfway house in Albany, N.Y. However, he failed to meet with his assigned probation officer and check in at the halfway house, prompting the issuance of an arrest warrant March 12, 2013.

U.S. Marshal David McNulty of the Northern District of New York said, “I want to express my sincere gratitude to the men and women of the U.S. Marshals Service in Northern New York and throughout the country who devoted countless hours to ensure this career sex offender was taken off the streets. Hopefully his apprehension will mean he never has the chance to victimize anyone ever again.”

Deputy U.S. marshals in Albany led the investigation which involved many USMS district and division offices, including the Maine task force. Investigative leads directed the deputies to Portland, where they scoured the city in search of Hall. Deputies and task force officers spotted a man matching his description, approached the individual, identified themselves as deputy marshals, and took Hall into custody without incident.

Deputy U.S. marshals booked and processed Hall in Portland, where he made an initial appearance before a federal magistrate judge. He awaits a return to Albany.

U.S. Marshal Noel March of the District of Maine said of the arrest, “If a fugitive chooses Maine to hide out, he’s made a big mistake. The men and women of our Maine Violent Offender Task Force make it their priority to investigate, locate and apprehend those who are wanted by the courts, regardless of the jurisdiction from which they are on the run.”

The ‘America’s Most Wanted’ television program featured Hall in June 2012 and detailed his violent, abusive history dating back to 1985. The state of New York labeled Hall a Tier III sex offender, its most dangerous sex offender classification.

The U.S. Marshals Service’s “15 Most Wanted” fugitive program draws attention to some of the country’s most dangerous and high-profile fugitives. These fugitives tend to be career criminals with histories of violence, and they pose a significant threat to public safety. Generally, “15 Most Wanted” fugitives are considered the “worst of the worst” and can include murderers, sex offenders, major drug kingpins, organized crime figures and individuals wanted for high-profile financial crimes. Since the program began in 1983, 225 “15 Most Wanted” fugitives have been arrested.

DOJ FILES SEXUAL HARASSMENT LAWSUIT AGAINST OWNERS AND MANAGER OF APARTMENTS

FROM:  U.S. JUSTICE DEPARTMENT
Monday, September 30, 2013
Justice Department Files Sexual Harassment Lawsuit in Michigan Against Owners and Property Manager of Alger Meadow Apartments

The Justice Department announced it has filed a lawsuit today in the federal district court for the Western District of Michigan against the owners and manager of Alger Meadow Apartments in Grand Rapids, Mich., alleging that the manager has sexually harassed tenants in violation of the Fair Housing Act.

The lawsuit alleges that Dale VanderVennen, manager at Alger Meadow Apartments, has sexually harassed female residents at the complex.   The complaint alleges that such harassment has included unwelcome sexual advances, touching female residents without their consent, entering the apartments of female residents without permission and notice, granting and denying tangible housing benefits based on sex; and taking adverse actions against female tenants when they refused his sexual advances.

"No person should be subject to sexual harassment in their own home, especially when that harassment comes from someone who holds the key to the front door," said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division.

“This office is committed to addressing civil rights violations and enforcing federal civil rights law” said Patrick A. Miles, Jr. U.S. Attorney for the Western District of Michigan.  “Women should not face this type of discrimination and harassment when making housing choices.”


The suit also names as defendants the owners and/or managers of Alger Meadow Apartments:  Jack VanderVennen, Linda VanderVennen, DDJ Rental Real Estate LLC, Calcutta Associates LLC, and LLJ LLC .

The suit seeks monetary damages to compensate the victims, a civil penalty and a court order barring future discrimination.

The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status.

FORMER OWNER LA MEDICAL EQUIPMENT SUPPLIER INDICTED FOR MEDICARE FRAUD

FROM:  U.S. JUSTICE DEPARTMENT 
Monday, September 30, 2013
Former Owner of Los Angeles Medical Equipment Supply Company Indicted in $4 Million Medicare Fraud Scheme
A former owner of a Los Angeles medical equipment supply company has been indicted for allegedly engaging in a $4 million Medicare fraud scheme.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney André Birotte Jr. of the Central District of California, Special Agent in Charge Glenn R. Ferry of the Los Angeles Region of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), and Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office made the announcement.

Valery Bogomolny, 41, of Los Angeles, Calif., was indicted in the Central District of California on six counts of health care fraud, each of which carries a maximum penalty of 10 years in prison upon conviction. Bogomolny was taken into custody on Sept. 27, 2013, and the indictment was unsealed following his initial appearance in federal court that afternoon.

According to court documents, Bogomolny was the owner and president of Royal Medical Supply, a durable medical equipment (DME) supply company located in Los Angeles.  From approximately January 2006 through October 2009, he allegedly engaged in a scheme to commit health care fraud through the operation of Royal by providing medically unnecessary power wheelchairs and other DME to Medicare beneficiaries and submitting false and fraudulent claims to Medicare.  Court documents allege that Bogomolny knew the prescriptions and medical documents were fraudulent and that some of the beneficiaries did not receive the DME, yet he certified to Medicare with the submission of each claim that the DME was received and was medically necessary.

Bogomolny, through Royal, allegedly submitted approximately $4 million in fraudulent claims to Medicare for power wheelchairs and related services, and Medicare paid Royal approximately $2.7 million on those claims.

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

The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.  This case is being prosecuted by Trial Attorney Fred Medick 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 1,500 defendants who have collectively billed the Medicare program for more than $5 billion.  In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

2 INVESTORS PLEAD GUILTY IN MUNICIPAL TAX LIEN AUCTION BID-RIGGING CASE

FROM:  U.S. JUSTICE DEPARTMENT 
TWO NEW JERSEY INVESTORS PLEAD GUILTY FOR THEIR ROLES IN BID–RIGGING SCHEMES AT MUNICIPAL TAX LIEN AUCTIONS
Investigation Has Yielded 14 Guilty Pleas

WASHINGTON —Two financial investors who purchased municipal tax liens pleaded guilty today for their roles in a conspiracy to rig bids at auctions conducted by New Jersey municipalities for the sale of those tax liens, 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 Robert U. Del Vecchio Sr., of Hawthorne, N.J. According to the charge, from in or about 2000 until approximately December 2008, Del Vecchio Sr. 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.  Additionally, a felony charge was filed today in the U.S. District Court for the District of New Jersey in Newark, against Michael Mastellone, of Cedar Knolls, N.J. for participating in a similar conspiracy from in or about 2000 until approximately February 2009.  The department said that Del Vecchio Sr. and Mastellone proceeded to submit bids in accordance with the agreements and purchased tax liens at collusive and non-competitive interest rates.

“By conspiring to rig the bids of municipal tax liens, the conspirators profited at the expense of those already struggling financially,” said Scott D. Hammond, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program.  “Protecting Americans from these types of bid-rigging schemes remains a high priority for the division.”

The department said 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, Del Vecchio Sr. and Mastellone were involved in the 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 which 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 in 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 pleas are the 13th and 14th guilty pleas resulting from an ongoing investigation into bid rigging or fraud related to municipal tax lien auctions. Nine individuals – Isadore H. May, Richard J. Pisciotta Jr., William A. Collins, Robert W. Stein, David M. Farber, Robert E. Rothman, Stephen E. Hruby, David Butler and Norman T. Remick – 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 charges were 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. For more information on the task force, please visit www.StopFraud.gov.

This ongoing investigation is being conducted by the Antitrust Division’s New York Office and the FBI’s Atlantic City, N.J., office.

AUTO PARTS MANUFACTURES AND EXECUTIVES PLEAD GUILTY TO FIXING PRICES ON PARTS

FROM:  U.S. JUSTICE DEPARTMENT 
NINE AUTOMOBILE PARTS MANUFACTURERS AND TWO EXECUTIVES AGREE TO PLEAD GUILTY TO FIXING PRICES ON AUTOMOBILE PARTS 
SOLD TO U.S. CAR MANUFACTURERS AND INSTALLED IN U.S. CARS

Companies Agree to Pay a Total of More Than $740 Million in Criminal Fines

WASHINGTON — Nine Japan-based companies and two executives have agreed to plead guilty and to pay a total of more than $740 million in criminal fines for their roles in separate conspiracies to fix the prices of more than 30 different products sold to U.S. car manufacturers and installed in cars sold in the United States and elsewhere, the Department of Justice announced today.  The department said that price-fixed automobile parts were sold to Chrysler, Ford and General Motors, as well as to the U.S. subsidiaries of Honda, Mazda, Mitsubishi, Nissan, Toyota and Fuji Heavy Industries–more commonly known by its brand name, Subaru.

“These international price-fixing conspiracies affected more than $5 billion in automobile parts sold to U.S. car manufacturers, and more than 25 million cars purchased by American consumers were affected by the illegal conduct,” said Attorney General Eric Holder.  “The Department of Justice will continue to crack down on cartel behavior that causes American consumers and businesses to pay higher prices for the products and services they rely upon in their everyday lives.”

“Some of the price-fixing conspiracies lasted for a decade or longer, and many car models were fitted with multiple parts that were fixed by the auto parts suppliers,” said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s criminal enforcement program.  “The Antitrust Division has worked hand in hand with its international competition colleagues who have provided invaluable assistance to the Justice Department in breaking up these worldwide price-fixing cartels.”

“Today’s charges should send a message to companies who believe they don’t need to follow the rules,” said Ronald Hosko, Assistant Director of the FBI’s Criminal Division.  “If you violate the laws of this country, the FBI will investigate and put a stop to the threat you pose to our commercial system.  The integrity of our markets is a part of the foundation of a free society.”

Including those announced today, 20 companies and 21 executives have been charged in the Antitrust Division’s ongoing investigation into price fixing and bid rigging in the auto parts industry.  All 20 companies have either pleaded guilty or have agreed to plead guilty and have agreed to pay more than $1.6 billion in criminal fines.  Seventeen of the 21 executives have been sentenced to serve time in U.S. prisons or have entered into plea agreements calling for significant prison sentences.

Each of the companies and executives charged today has agreed to cooperate with the department’s ongoing antitrust investigation.  The plea agreements are subject to court approval. The companies’ and executives’ agreed-upon fines and sentences are:

Hitachi Automotive Systems Ltd. to pay a $195 million criminal fine;
Jtekt Corporation to pay a $103.27 million criminal fine;
Mitsuba Corporation to pay a $135 million criminal fine;
Mitsubishi Electric Corporation (MELCO) to pay a $190 million criminal fine;
Mitsubishi Heavy Industries Ltd. to pay a $14.5 million criminal fine;
NSK Ltd. to pay a $68.2 million criminal fine;
T.RAD Co. Ltd. to pay a $13.75 criminal fine;
Valeo Japan Co. Ltd. to pay a $13.6 million criminal fine;
Yamashita Rubber Co. Ltd. to pay a $11 million criminal fine;
Tetsuya Kunida, a Japanese citizen and former executive of a U.S. subsidiary of a Japan-based automotive anti-vibration rubber products supplier to serve 12 months and one day in a U.S. prison, and to pay a $20,000 criminal fine; and
Gary Walker, a U.S. citizen and former executive of a U.S. subsidiary of a Japan-based automotive products supplier to serve 14 months in a U.S. prison, and to pay a $20,000 criminal fine.
MELCO and Hitachi conspired with each other and other co-conspirator firms not charged today on sales of certain auto parts, including starter motors, alternators, and ignition coils, the department said. Mitsuba and Mitsubishi Electric conspired together and with other co-conspirators not charged today on certain sales of starter motors.  Each of the other companies charged today colluded with other unnamed co-conspirators.

Generally, the companies, executives and co-conspirators engaged in the various price-fixing schemes by attending meetings and communicating by telephone in the United States and Japan to reach collusive agreements to rig bids, set prices and allocate the supply of auto parts sold to the car manufacturers.  They took measures to keep their conduct secret by using code names and meeting in remote locations.  Those charged also had further communications to monitor and enforce the collusive agreements.

The multiple conspiracies also harmed U.S. automobile plants in 14 states: Alabama; California; Georgia; Illinois; Indiana; Kansas; Kentucky; Michigan; Mississippi; Missouri; Ohio; Tennessee; Texas and Wisconsin, the department said.

The department has coordinated its investigation with the Japanese Fair Trade Commission, the European Commission, Canadian Competition Bureau, Korean Fair Trade Commission, Mexican Federal Economic Competition Commission and Australian Competition and Consumer Commission.

The following charges were filed today in U.S. District Court for the Eastern District of Michigan in Detroit:

Hitachi Automotive Systems Ltd.

According to a one-count felony charge, Hitachi and co-conspirators engaged in a conspiracy, by agreeing during meetings and conversations, to rig bids for, and to fix, stabilize and maintain the prices of auto parts it sold to Ford, General Motors, Honda, Nissan and Toyota, in the United States and elsewhere. The affected auto parts include starter motors, alternators, air flow meters, valve timing control devices, fuel injection systems, electronic throttle bodies, ignition coils, inverters and motor generators. According to the charge, Hitachi and its co-conspirators carried out the conspiracy from at least as early as January 2000 until at least February 2010.

Hitachi manufactures and sells auto parts to automobile manufacturers throughout the world. The affected auto parts perform an array of functions in automobile engines, from regulating air and fuel flow to starting the engine to controlling the timing of engine valves.

Mitsuba Corporation

According to a two-count felony charge, Mitsuba and co-conspirators engaged in a conspiracy, by agreeing during meetings and conversations, to rig bids for, and to fix, stabilize and maintain the prices of windshield washer systems and components, windshield wiper systems and components, starter motors, power window motors, and fan motors it sold to Chrysler, Honda, Subaru, Nissan and Toyota in the United States and elsewhere. According to the charge, Mitsuba and its co-conspirators carried out the conspiracy from January 2000 until February 2010.  Mitsuba also agreed to plead guilty to one count of obstruction of justice, because of the company’s efforts to destroy evidence ordered by a high-level U.S.-based executive after learning of the U.S. investigation of collusion in the auto parts industry.

Mitsuba manufactures and sells numerous automotive parts to automobile manufacturers throughout the world.  The affected auto parts perform an array of functions in automobiles.  Windshield washer and wiper systems include a number of components and are designed to clear water or snow from vehicle windows.  Starter motors are small electric motors used in starting internal combustion engines.  Power window motors are small electric motors used to raise and lower vehicle windows.  Fan motors are small electric motors used to turn radiator cooling fans.

Mitsubishi Electric Corporation (MELCO)

According to a one-count felony charge, MELCO and co-conspirators engaged in a conspiracy, by agreeing during meetings and conversations, to rig bids for, and to fix, stabilize and maintain the prices of automotive parts, including starter motors, alternators and ignition coils, it sold to Chrysler, Ford, General Motors, Honda, Fuji Heavy Industries Ltd. (Subaru), Nissan, and certain of their subsidiaries in the United States and elsewhere. According to the charge, MELCO and its co-conspirators carried out the conspiracy from at least as early as January 2000 until at least February 2010.

MELCO manufactures and sells automotive parts, including starter motors, alternators, and ignition coils. Starter motors are small electric motors used in starting internal combustion engines. Alternators generate an electric current while the engine is in operation.  Ignition coils are part of the fuel ignition system and release electric energy suddenly to ignite a fuel mixture.

Mitsubishi Heavy Industries Ltd.

According to a one-count felony charge, Mitsubishi Heavy Industries Ltd. (MHI) and co-conspirators engaged in a conspiracy, by agreeing during meetings and conversations, to rig bids for, and to fix, stabilize and maintain the prices of compressors and condensers it sold to General Motors and Mitsubishi Motors North America in the United States and elsewhere. According to the charge, MHI and its co-conspirators carried out the conspiracy from at least as early as January 2001 until at least February 2010.

MHI manufactures and sells compressors and condensers. A compressor produces and circulates highly pressurized refrigerant gas throughout the car air conditioning system. A condenser cools the engine by condensing the refrigerant gas into liquid and releasing heat.

T.RAD Co. Ltd.

According to a one-count felony charge, T.RAD Co. Ltd. and co-conspirators engaged in a conspiracy, by agreeing during meetings and conversations, to rig bids for, and to fix, stabilize and maintain the prices of radiators it sold to Toyota and Honda and the prices of automatic transmission fluid warmers (ATF warmers) sold to Toyota in the United States and elsewhere. According to the charge, T.RAD and its co-conspirators carried out the conspiracy from November 2002 until February 2010.

T.RAD manufactures and sells heat exchangers, including radiators and ATF Warmers. Radiators are devices located in the engine compartment of a vehicle that cool the engine. ATF warmers are devices located in the engine compartment of a vehicle that warm the automatic transmission fluid.

Valeo Japan Co. Ltd.

According to a one-count felony charge, Valeo Japan Co. Ltd. and co-conspirators engaged in a conspiracy, by agreeing during meetings and conversations, to allocate the supply of, rig bids for, and to fix, stabilize and maintain the prices of air conditioning systems it sold to Nissan North America Inc., Suzuki Motor Corporation and Subaru, in the United States and elsewhere.  According to the charge, Valeo and its co-conspirators carried out the conspiracy from April 2006 until February 2010.

Valeo was engaged in the manufacture and sale of automotive air conditioning systems, which are systems that cool the interior environment of a vehicle. Air conditioning systems, whether sold together or separately, are defined as automotive compressors, condensers, HVAC units (typically consisting of a blower motor, actuators, flaps, evaporator, heater core, and filter embedded in a plastic housing), control panels, sensors and associated hoses and pipes.

Gary Walker

According to a one-count felony charge, Gary Walker, a U.S. citizen and former executive of a U.S. subsidiary of a Japan-based automotive products supplier, engaged in a conspiracy to rig bids for, and to fix, stabilize and maintain the prices of seatbelts sold to Honda, Mazda, Nissan, Subaru and Toyota in the United States and elsewhere. According to the charge, Walker and his co-conspirators carried out the conspiracy from at least Jan. 1, 2003 until at least February 2010.

The following charges were filed today in U.S. District Court for the Southern District of Ohio in Cincinnati:

Jtekt Corporation

According to a two-count felony charge, Jtekt and co-conspirators engaged in a conspiracy, by agreeing during meetings and conversations, to allocate markets, to rig bids for, and to fix, stabilize and maintain the prices of bearings it sold to Toyota and electric powered steering assemblies it sold to Nissan, in the United States and elsewhere. According to the charge, Jtekt and its co-conspirators carried out the bearings conspiracy from 2000 until July 2011 and the steering assemblies conspiracy from 2005 until October 2011.

Jtekt manufactures and sells bearings and steering assemblies.  Bearings are widely used in industry in numerous applications for many products. Bearings reduce friction and help components to roll smoothly past on another.  Electric powered steering assemblies provide electric power to help the driver more easily steer the automobile. Electric powered steering assemblies link the steering wheel to the tires, and include the column, intermediate shaft and electronic control unit, among other parts, but do not include the steering wheel or tires.

NSK Ltd.

According to a one-count felony charge, NSK and co-conspirators engaged in a conspiracy, by agreeing during meetings and conversations, to allocate markets, to rig bids for, and to fix, stabilize and maintain the prices of bearings it sold to Toyota, in the United States and elsewhere.  NSK manufactures and sells bearings.  According to the charge, NSK and its co-conspirators carried out the conspiracy from 2000 until July 2011.

The following charges were filed today in U.S. District Court for the Northern District of Ohio in Toledo:

Yamashita Rubber Co. Ltd.

According to a one-count felony charge, Yamashita Rubber Co. Ltd. and co-conspirators engaged in a conspiracy, by agreeing during meetings and conversations, to rig bids for, and to fix, raise, and maintain the prices of automotive anti-vibration rubber products it sold in the United States and elsewhere to Honda Motor Co. Ltd., American Honda Motor Company Inc. and Suzuki Motor Corporation.  According to the charge, Yamashita Rubber Co. and its co-conspirators carried out the conspiracy from at least April 2003 until May 2012.

Automotive anti-vibration rubber products are comprised primarily of rubber and metal, and are installed in automobiles to reduce engine and road vibration.

Tetsuya Kunida

According to a one-count felony charge, Tetsuya Kunida, a former executive of a U.S. subsidiary of a Japan-based automotive anti-vibration rubber products supplier, engaged in a conspiracy, by agreeing during meetings and conversations, to rig bids for, and to fix, raise, and maintain the prices of automotive anti-vibration rubber products.  The conspiracy affected sales of automotive anti-vibration rubber products to Toyota Motor Corporation and other automakers in the United States and elsewhere.  ccording to the charge, Kunida and his co-conspirators carried out the conspiracy from at least November 2001 until May 2012.

DENSO Corporation, Nippon Seiki Ltd., Tokai Rika Co. Ltd., Furukawa Electric Co. Ltd, Yazaki Corp., G.S. Electech Inc., Fujikura Ltd., Autoliv Inc., TRW Deutschland Holding GmbH, Diamond Electric Mfg. Co. Ltd., and Panasonic Corporation have already pleaded guilty. Fifteen individuals have been sentenced to pay criminal fines and to serve prison sentences ranging from a year and a day to two years each.

The companies and individuals are charged with price fixing in violation of the Sherman Act, which carries maximum penalties of a $100 million criminal fine for corporations and a $1 million criminal fine and 10 years in prison for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.  Additionally, Mitsuba was also charged with obstruction of justice, which carries a maximum penalty of a $500,000 criminal fine.

The charges are the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI. Today’s charges were brought by the Antitrust Division’s Chicago Office, New York Office, the National Criminal Enforcement Section, and the FBI’s Cincinnati, Cleveland, Detroit, New York and Washington Field Offices, with the assistance of the FBI headquarters’ International Corruption Unit.  Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or visit www.justice.gov/atr/contact/newcase.html.  To report a crime to the FBI, go to www.fbi.gov and click on the “Report a Crime” tab.

SEC CHARGES OPERATORS OF FLORIDA-BASED BUSINESS WITH OPERATING A BOILER ROOM INVESTMENT SCHEME

FROM:  U.S. SECURITIES AND EXCHANGE COMMISSION SEC

The Securities and Exchange Commission today charged the operators of a South Florida-based boiler room scheme with defrauding seniors and other investors they pressured into purchasing stock in a company that purportedly developed ground-breaking technology for the National Football League to use in the Super Bowl.

The SEC alleges that Peter Kirschner of Delray Beach, Fla. and his business partner Stuart Rubens of North Miami struck an agreement with Thought Development Inc. (TDI) to solicit investors and sell unregistered company stock to help the Miami Beach-based company raise capital.  TDI states that its signature invention is a laser-line system that generates a green line on a football field that is visible as a first-down marker not only on television, but also within the stadium to players, fans, and officials.  TDI claims its technology would decrease the time needed by officials to determine first downs and generate more time to be sold to television advertisers.

The SEC alleges that through sales agents paid by their company Premiere Consulting, Kirschner and Rubens schemed to misrepresent to investors that their money would be used to develop TDI’s technology and fund a purported IPO of its stock.  Instead, 75 percent of the offering proceeds were retained by Premiere Consulting or paid to sales agents through undisclosed commissions and fees.  Investors also were falsely promised that TDI’s laser-line technology would be used during NFL games, and one individual invested an additional $75,000 because a sales agent lied and said that NFL Commissioner Roger Goodell purchased the technology for use in the 2013 Super Bowl.  TDI did not have any agreements with the NFL or any team to feature its technology during football games, let alone at the Super Bowl.

“Kirschner and Rubens used boiler rooms and high-pressure sales tactics to swindle seniors into believing they could help revolutionize the way we watch football,” said Eric I. Bustillo, Director of the SEC’s Miami Regional Office.  “But these fraudsters merely did an end run with investor money.”  

Kirschner has a prior history of securities law violations.  In 2006, he was charged by the SEC for fraudulent sales of prematurely issued stock dividend shares and agreed to pay nearly $165,000 to settle the charges.  Kirschner and Rubens agreed to settle these latest SEC charges.  They will be barred from participating in any penny stock offerings, and monetary sanctions against them will be determined by the court at a later date.

Glenn S. Gordon, Associate Director for Enforcement in the SEC’s Miami Regional Office, said, “It is vitally important to crack down on those who think they can get away with breaking the same laws twice.  We will continue to aggressively pursue repeat violators like Kirschner.

According to the SEC’s complaint filed in U.S. District Court for the Southern District of Florida, TDI terminated its relationship with Premiere Consulting, Kirschner, and Rubens in late 2011 when it found out about the lies being told to investors and the undisclosed commissions and other fees.  However, Kirschner and Rubens then expanded their scheme by forming a new company Advanced Equity Partners and continuing to solicit investors and sell purported TDI stock.  They generated false trade documents to dupe investors into believing they had purchased TDI shares when in fact they had not.  Kirschner and Rubens took nearly all investor funds for personal use and payments to sales agents.

According to the SEC’s complaint, Premiere Consulting and Advanced Equity raised more than $2.4 million from approximately 200 investors nationwide from July 2011 to November 2012.  Kirschner, Rubens, and their companies failed to disclose to investors that they retained or paid sales agents through commissions and fees that comprised a significant chunk of the money raised from investors.  For example, Advanced Equity sales agents lied to a 79-year-old retiree living on a fixed income by telling him they would only take a commission if he resold the stock for a profit in the future.  In reality, Advanced Equity, Kirschner, and Rubens immediately paid their sales agents $15,000 of the $27,000 that he invested, and kept the rest of the money in their own accounts.

The SEC alleges that investors were falsely promised that TDI was about to go public when Kirschner and Rubens knew that TDI had not taken any of the required steps.  They falsely promised guaranteed returns to investors when they had no basis to do so.  For example, Rubens directly solicited a 77-year-old retiree to invest in TDI in February 2012.  After the retiree declined to invest, Rubens and his sales agents engaged in high-pressure sales tactics and further enticed him with false promises about “guaranteed returns.”  Advanced Equity later sent the retiree a false trade confirmation letter to deceive him into believing he had purchased $100,000 worth of TDI shares when, in fact, he had not.  Ultimately, the retiree relented to the pressure and invested $25,000.

The SEC’s complaint charges Advanced Equity, Premiere Consulting, Kirschner, and Rubens with violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b-5.  They are settling the charges without admitting or denying the allegations.

The SEC separately filed a complaint in federal court against TDI and its chairman Alan Amron to charge them with securities registration violations.  The federal securities laws require all issuances of common stock to be registered with the SEC or meet a legal exemption from registration, and the complaint alleges that they enabled the unregistered solicitation of investors in their original agreement with Kirschner and Rubens.  TDI and Amron agreed to settle the charges without admitting or denying the allegations, and Amron agreed to pay a $10,000 penalty.

The SEC’s investigation, which is continuing, has been conducted by Kevin B. Hart and Fernando Torres in the Miami office, and supervised by Jason R. Berkowitz. The investigation followed an examination conducted by Anson Kwong under the supervision of Nicholas A. Monaco and the oversight of John C. Mattimore.

SEC FILES CIVIL INJUNCTION AGAINST FLORIDA RESIDENT FOR SCHEME TO DEFRAUD SENIORS

FROM:  U.S. SECURITIES AND EXCHANGE COMMISSION

The Securities Exchange Commission ("SEC") filed a civil injunctive action on September 26, 2013 in the United States District Court for the Southern District of Florida against Brian K. Velten alleging violations of the antifraud provisions of the federal securities laws in connection with his scheme to defraud at least three senior citizens who held accounts at Fidelity Brokerage Services, LLC ("Fidelity"), a broker-dealer registered with the SEC.

The SEC's complaint alleges that, from no later than July 2009 through at least September 2012, Velten, an unregistered investment adviser, opened accounts for his clients at Fidelity and engaged in a scheme to defraud at least three of them by misappropriating approximately $171,000 from the clients' accounts, making false claims about his ability to generate large profits trading stocks for the clients, and trading stocks on margin without client authorization.

The SEC further alleges that Velten opened accounts online for the clients and obtained the username and PIN information for the accounts, enabling him to access the accounts through Fidelity's website. Velten filled out margin applications online and traded on margin in at least two client accounts without authorization. Trading on margin caused the clients to borrow money from Fidelity to purchase additional securities. In several instances, Velten negotiated checks drawn against client accounts and kept the funds for his own use.

As alleged in the SEC's complaint, Velten violated Section 17(a) of the Securities Act of 1993, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. The SEC's complaint seeks a permanent injunction prohibiting future violations of the securities laws, disgorgement of all ill-gotten gains, and a civil money penalty against Velten.

The SEC's investigation was conducted in the Miami Regional Office by Laura R. Smith, Senior Counsel, and Fernando Torres, Senior Regional Accountant, under the supervision of Jason R. Berkowitz, Assistant Regional Director. Andrew Schiff, Senior Trial Counsel, will lead the SEC's litigation.

FIVE ARRESTED IN $48 MILLION HOME HEALTH CARE FRAUD AND KICKBACK SCHEME

FROM:  U.S. JUSTICE DEPARTMENT 
Wednesday, September 25, 2013
Five Miami Residents Arrested for Alleged Roles in $48 Million Home Health Care Fraud Scheme
Five Miami residents have been charged for their alleged roles in a $48 million home health Medicare fraud scheme.

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; Special Agent in Charge Michael B. Steinbach of the FBI’s Miami Field Office; and Special Agent in Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG) Office of Investigations Miami Office made the announcement after the case was unsealed following the defendants’ arrests this morning.

On Sept. 24, 2013, a federal grand jury in Miami returned an 11-count indictment charging Marianela Martinez, 45; Mireya Amechazurra, 49; Lissett Jo-Moure, 55; Omar Hernandez, 48; and Celia Santovenia, 49, each with one count of conspiracy to receive health care kickbacks and two counts of receiving kickbacks in connection with a Federal health care program.  Each charge carries a maximum penalty of five years in prison upon conviction.

According to the indictment, the defendants participated in a scheme involving Caring Nurse Home Health Care Corp. (Caring Nurse) and Good Quality Home Health Inc. (Good Quality), Miami home health care agencies that purported to provide home health and therapy services to Medicare beneficiaries.  The defendants allegedly referred Medicare beneficiaries to Caring Nurse and/or Good Quality in exchange for kickbacks, knowing that Caring Nurse and/or Good Quality would in turn bill Medicare for home health services purportedly rendered for the recruited Medicare beneficiaries.

An indictment is a formal accusation of criminal conduct, not evidence.  A defendant is presumed innocent unless and until convicted.

In a related case, on Feb. 27, 2013, Rogelio Rodriguez and Raymond Aday, the owners and operators of Caring Nurse and Good Quality, were sentenced to 108 and 51 months in prison, respectively.  The sentencings followed their December 2012 guilty pleas to one count each of conspiracy to commit health care fraud charged in an October 2012 indictment, which alleged that from approximately January 2006 through June 2011, Caring Nurse and Good Quality submitted approximately $48 million in claims for home health services that were not medically necessary and/or not provided.  Medicare paid approximately $33 million for those fraudulent claims.        

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

Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,500 defendants who collectively have falsely billed the Medicare program for more than $5 billion.  In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

HOME INVASION SUSPECT'S RUN ENDED BY U.S. MARSHALS

FROM:  U.S. MARSHALS SERVICE 
September 25, 2013
U.S. Marshals End Elusive Home Invasion Suspect's Run

Winston Salem, NC –This afternoon at 1:15 PM, Andrew Michael Brackman, a 20 year old, white male was taken into custody by members of the U.S. Marshals Joint Fugitive Task Force (JFTF). Brackman was wanted by the Davidson County Sheriff’s Office for first-degree Burglary, Robbery with a Dangerous Weapon and first-degree Kidnapping.

Brackman was alleged to be the final suspect in the August 16th home invasion off of Riverwood Drive in Southmont. Those previously arrested were Kaylle Michelle Wilkins, 25, and Charles Dietz, 23, both of 7168 Shallowford Road in Winston Salem, and Cole McKay Parris, 23, of 111 Peacock St. The Davidson County Sheriff’s Office alleged in arrest warrants that four people armed with handguns broke into a home on Riverwood Drive between the hours of 4:45 and 5:02 am August 16th. The warrants stated they took 10 firearms, $30,000 in cash, and jewelry in the value of $60,000 by threatening the use of a handgun and kidnapped one of the residents.

After eluding several law enforcement agencies and numerous acquaintances of Brackman concealing his whereabouts, a request was made by the Davidson County Sheriff’s Office for the Greensboro U.S. Marshals Service to assist in Brackman’s apprehension. The JFTF set up surveillance for multiple hours at his girlfriend’s home of 5297 Jay Bird Lane. After a brief stand-off, Brackman was arrested without incident and transported to the Davidson 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.

FORMER EXECUTIVE CHARGED BY SEC WITH INSIDER TRADING BASED ON CONFIDENTIAL INFORMATION

FROM:  U.S. SECURITIES AND EXCHANGE COMMISSION

The Securities and Exchange Commission today charged a former executive at Qualcomm Inc. and his former financial advisor with insider trading ahead of major announcements by the San Diego-based wireless technology company for more than a quarter-million dollars in profits.

The SEC alleges that Jing Wang, a former executive vice president and president of global business operations at Qualcomm, used a secret offshore brokerage account to make illegal trades based on confidential information that he learned on the job.  Gary Yin, a former registered representative at Merrill Lynch, helped Wang set up the account.  Yin also created a secret offshore account of his own and traded on the non-public information gleaned from Wang.  When Wang eventually realized that insider trading in the offshore accounts still may be discovered by the SEC or other regulators, he concocted a plan to conceal his trading activity by claiming the trades were made by his brother.  Wang even convinced Yin to travel to China and go over the account statements with Wang’s brother so he could explain the trades if asked by investigators.

“Wang violated his duty as an insider to protect confidential information when he made timely illegal trades ahead of major announcements to the detriment of other Qualcomm shareholders who did not have the same information,” said Michele Wein Layne, Director of the SEC’s Los Angeles Regional Office.  “Wang and Yin went to extraordinary lengths to conceal their trading and cover it up afterwards, but despite their expansive efforts they still wound up in law enforcement’s crosshairs.”

In a parallel action, the U.S. Attorney’s Office for the Southern District of California today announced criminal charges against Wang and Yin.

According to the SEC’s complaint, Wang and Yin became friends in 2005 as members of the same church.  When Wang learned that Yin was a financial advisor at Merrill Lynch, he asked Yin to manage his money and opened a number of brokerage accounts at the firm’s San Diego branch office.  Each account was disclosed to Qualcomm because, as a company officer, Wang was restricted in his ability to trade Qualcomm stock and required to pre-clear all Qualcomm trades with the company.

The SEC alleges that in early 2006, Wang approached Yin about hiding cash transactions.  Yin suggested that Wang create an entity registered in the British Virgin Islands (BVI) and use the name of a non-U.S. citizen family member as the beneficial owner.  Then he could open a brokerage account in the newly created entity’s name.  Yin then helped Wang set up a secret account in the name of a BVI company called Unicorn Global Enterprises, and Wang’s older brother was listed as the owner.  Yin similarly created his own BVI-registered entity named Pacific Rim and put it in his mother-in-law’s name.  Yin opened a Merrill Lynch brokerage account for Pacific Rim and used it to hide funds that he was using for investments.

The SEC alleges that Wang and Yin used their secret offshore accounts to trade on material, non-public information that Wang learned as an executive at Qualcomm.  In early 2010, Wang was aware that Qualcomm executives were planning a board proposal to increase Qualcomm’s quarterly dividends and request authority to initiate a stock repurchase program.  Qualcomm informed Wang and all executives that they would not be permitted to trade Qualcomm stock.  On March 1, Wang attended a Qualcomm board meeting where the quarterly dividend increase and stock repurchase were approved.  Wang immediately instructed Yin to use all of the funds in the offshore Unicorn account to purchase Qualcomm stock.  Yin knew that Wang did not pre-clear these trades and realized that the purchase was out of character for Wang because he previously never purchased Qualcomm stock on the open market in his Merrill Lynch accounts.  Within the hour of executing the trades for Wang, Yin himself bought Qualcomm stock on the basis of the material, non-public information.  The stock price increased 6.7 percent after Qualcomm publicly announced the quarterly cash dividend and stock repurchase program.  Wang and Yin profited when they sold all of their shares.

According to the SEC’s complaint, Wang used the funds from that sale to conduct insider trading again – this time in the shares of San Jose-based Atheros Communications, which was the highly confidential target of a planned acquisition by Qualcomm. Wang was regularly briefed on the transaction internally tabbed as “Project Tango” to protect its confidentiality.  Wang instructed Yin to sell all of his Qualcomm stock in the Unicorn account on Dec. 2, 2010, and prepare to buy as many shares of Atheros stock as possible with the funds in that account.  He told Yin that he was leaving on a trip to China and would contact him to execute the Atheros trade.  On December 6, Wang attended a Qualcomm board meeting in Hong Kong and a resolution was passed to pursue the acquisition. Wang learned that Qualcomm planned to acquire Atheros at $45 per share.  Wang and Yin immediately communicated several times through phone calls and a text message, and Wang then purchased the maximum number of shares he could purchase with the existing funds in the Unicorn account at prices between $34 and $35 per share.  At Wang’s encouragement, Yin also purchased Atheros stock for himself in his offshore account.  When the news became public in early January, Atheros stock increased more than 20 percent.  Yin sold all of his Atheros shares in the Pacific Rim account on January 12, and Wang sold his Atheros shares in the Unicorn account on January 25.

According to the SEC’s complaint, Wang took his next insider trading step merely four minutes after selling the Atheros stock, using the proceeds to purchase Qualcomm shares in advance of a company announcement that it would raise its revenue and earnings guidance for the 2011 fiscal year.  Wang had learned the confidential information prior to the board meeting he attended in Hong Kong, where Qualcomm’s better-than-expected first quarter financial performance was further discussed.  Wang learned that Qualcomm planned to announce its earnings results on January 26, and thus purchased his Qualcomm shares the day before the announcement.  After Qualcomm issued a press release to announcing its positive first quarter results, Qualcomm’s stock increased 5.9 percent.

The SEC alleges that Wang made more than $244,000 in illegal profits through the insider trading scheme, and Yin realized gains of more than $27,000.  Wang eventually realized that his illegal trading may be detected by Merrill Lynch or others.  Wang first asked Yin to delete records of the trades in the Unicorn account, but because they were permanent records in Merrill Lynch’s systems they could not be erased.  Around January 2012, Wang directed Yin to establish a new BVI corporation named Clearview Resources and open a new account at Merrill Lynch to which they transferred the insider trading proceeds in the Unicorn account to further distance Wang from the suspicious trades.  A few months later, Wang informed Yin that the trades may have been detected because the SEC had subpoenaed his e-mails.  So Wang devised a cover story and convinced Yin if ever questioned to say that the Atheros trades were made by Wang’s brother.  Because Yin had never communicated with Wang’s brother, Wang instructed him to travel to China with the Unicorn account statements and review the trades with his brother so he could explain the trading if asked.  Yin did so in May 2012.  To further hide Wang’s ownership of the Unicorn account and his link to the Atheros trades, Yin removed the Unicorn account from Wang’s “household” in Merrill Lynch’s computer system in July 2012. “Householding” is a function used by Merrill Lynch to link related accounts.

The SEC's complaint charges Wang, who lives in Del Mar, Calif., with violating Sections 10(b) and 16(a) of the Securities Exchange Act of 1934 and Rules 10b-5 and 16a-3.  Yin, who lives in San Diego, is charged with violating Section 10(b) of the Exchange Act and Rule 10b-5.  The SEC’s complaint seeks disgorgement of ill-gotten gains plus prejudgment interest, financial penalties, and permanent injunctions.  The SEC also seeks an officer-and-director bar against Wang.

The SEC’s investigation has been conducted by Ann C. Kim, Wendy E. Pearson, Nina Yamamoto, and Finola H. Manvelian of the Los Angeles Regional Office.  The SEC’s litigation will be led by Sam Puathasnanon.  The SEC appreciates the assistance of the Department of Justice’s Criminal Division, the U.S. Attorney’s Office for the Southern District of California, and the Federal Bureau of Investigation.