Washington, DC—(ENEWSPF)—May 7, 2015. Three California men and a Minnesota company were charged in an indictment today in the Southern District of Ohio for their roles in a massive prescription drug diversion scheme. 

The indictment alleges that David Jess Miller, 50, of Santa Ana, California; Artur Stepanyan, 38, and Mihran Stepanyan, 29, both of Encino, California, and Minnesota Independent Cooperative Inc. (MIC) engaged in a conspiracy to sell prescription drugs from illegal, unlicensed sources to wholesalers and pharmacies throughout the United States.  The 12-count indictment charges the defendants with conspiracy to commit mail and wire fraud, multiple counts of mail fraud, and conspiracy to distribute prescription drugs without a license and to make false statements.    

Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division, U.S. Attorney Carter M. Stewart of the Southern District of Ohio, Director George M. Karavetsos of the U.S. Food and Drug Administration (FDA)’s Office of Criminal Investigations and Assistant Inspector in Charge Christopher White of the U.S. Postal Inspection Service (USPIS) announced the charges. 

According to the indictment, from 2007 through April 2014, David Miller and his company, MIC, of Eagan, Minnesota, purchased prescription drugs from a network of illegal and unlicensed sources in New York, Florida and California.  Artur Stepanyan and Mihran Stepanyan, worked together to sell drugs from illegal sources to Miller and MIC.  Artur and Mihran Stepanyan, using a variety of company names, including Panda Capital Group, Red Rock Capital Group, Trans Atlantic Capital Group and GC National Wholesale, were Miller’s largest source of illegal drugs.  During the course of the conspiracy, Miller and MIC paid the Stepanyans approximately $160 million for these prescription drugs. 

“American consumers should be able to rely on the prescription drug supply chain,” said Principal Deputy Assistant Attorney General Mizer.  “Prescription drug diversion schemes like the one charged in this indictment undermine that supply chain and increase the risk that counterfeit, adulterated, misbranded, sub-potent or expired drugs will be sold to patients and consumers.” 

To hide the true, illegal sources of their prescription drugs, David Miller and MIC falsified so-called drug pedigree documents.  Pedigrees are documents required by law that show the source of drugs.  For most of the conspiracy, the fraudulent pedigrees falsely listed B&Y Wholesale, a company located in Puerto Rico and co-owned by co-conspirator Yusef Yassin Gomez (Yassin) as the source of the drugs.  The pedigree documents also falsely stated that Yassin’s company was an authorized distributor of the drugs.  On Feb. 19, 2014, Yassin pleaded guilty in U.S. District Court for the Southern District of Ohio to conspiracy to engage in the wholesale distribution of prescription drugs without a wholesale license.  In connection with his guilty plea, Yassin admitted the he agreed to allow Miller and MIC to use his company’s name on pedigree documents to hide the true drug sources.  In exchange, Miller and MIC paid Yassin a commission on all of the drug sales. 

 “Once a prescription drug is diverted outside of the regulated distribution channels, it becomes difficult, if not impossible, for regulators, law enforcement and end-users to know whether the prescription drug package actually contains the correct drug or the correct dose,” said U.S. Attorney Stewart.  “We will aggressively prosecute individuals and companies that ignore the law and sell illegally diverted prescription drugs to pharmacies, and ultimately, to American consumers.

“We are committed to protecting the integrity of the pharmaceutical supply chain, especially as criminals go to more extreme measures to subvert it,” said FDA’s Office of Criminal Investigations Director Karavetsos. “We will continue to pursue these criminals and work to bring them to justice.”

“The Postal Inspection Service is proud to partner with the FDA Office of Criminal Investigations to bring to bear our mail fraud expertise to help the fight against drug diversion,” said USPIS Assistant Inspector in Charge White.

Throughout the course of the conspiracy charged in the indictment, using these fraudulent pedigree documents, Miller and MIC sold approximately $393 million worth of prescription drugs to wholesalers and retail pharmacies throughout the United States, including to multiple customers in the Southern District of Ohio. 

In addition to Yassin, two of Miller’s other illegal drug suppliers, Peter Kats and Joseph Dallal, previously pleaded guilty to conspiracy to commit mail and wire fraud for their sales of illegally-diverted prescription drugs to Miller and MIC. 

This matter is being investigated by the FDA and USPIS.  Assistant U.S. Attorneys Anne L. Porter and Christy Muncy of the Southern District of Ohio and Trial Attorney John W. Burke of the Civil Division’s Consumer Protection Branch are prosecuting this case.

David Miller, Artur Stepanyan, and Mihran Stepanyan were charged amongst 30 other individuals in the Northern District of California in a separate indictment on charges including federal Racketeer Influenced and Corrupt Organizations (RICO) Act; conspiracy to commit identity theft; conspiracy to commit access device fraud; conspiracy to commit mail, wire, and bank fraud; money laundering conspiracy; and conspiracy to distribute prescription drugs without a wholesale license.

The charges in the indictment are merely allegations, and do not constitute proof of guilt.  Every defendant is presumed to be innocent unless and until proven guilty.

Related Material:

Download Indictment (5.27 MB)

Source: justice.gov

Washington, DC--(ENEWSPF)--May 7, 2015. The Justice Department announced today that 16 separate hospitals and their respective corporate parents have agreed to collectively pay $15.69 million to resolve False Claims Act allegations that the providers sought and received reimbursement from Medicare for services that were not medically reasonable or necessary, the U.S. Department of Justice announced today. 

“Hospitals that participate in the Medicare program must ensure that the services they provide and bill for are based on the medical needs of patients rather than the desire to maximize profits,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “The Department of Justice is committed to ensuring that those who seek to abuse the Medicare program will be held accountable for their actions.”

This case concerns claims to Medicare for Intensive Outpatient Psychotherapy (IOP) services.  IOP services represent a continuation of ambulatory psychiatric services and provide active treatment to individuals with mental disorders using a variety of treatment methods.  Medicare will pay for an appropriate course of IOP treatment provided a number of specific requirements are met including, most notably, that the services in question are reasonable and necessary for the diagnosis and treatment of the patient’s condition.

These settlements resolve allegations that, beginning as early as 2005 and in some cases continuing into 2013, the hospitals knowingly submitted claims for IOP services that did not qualify for Medicare reimbursement because: the patient’s condition did not qualify for IOP; the patient’s treatments were not provided pursuant to an individualized treatment plan designed to help the patient address specific mental health needs and reach achievable goals; the patient’s progress was not being adequately tracked or documented; the patient received an inappropriate level of treatment; and/or the therapy provided was primarily recreational or diversional in nature, and not therapeutic.  The IOP services in question were typically performed on the providers’ behalf by Allegiance Health Management (Allegiance), a post-acute healthcare management company based in Shreveport, Louisiana, but billed to Medicare by the providers.

The providers who have reached agreements to resolve these allegations with the United States include:

Health Management Associates Inc. (HMA), and the following 14 hospitals formerly owned and operated by HMA: Central Mississippi Medical Center in Mississippi, Crossgate River Oaks in Mississippi, Dallas Regional Medical Center in Texas, Davis Regional Medical Center in North Carolina, East Georgia Regional Medical Center in Georgia, Gilmore Regional Medical Center in Mississippi, Lake Norman Regional Medical Center in North Carolina, Lehigh Regional Medical Center in Florida, Medical Center of Southeastern Oklahoma in Oklahoma, Natchez Community Hospital in Mississippi, Northwest Mississippi Regional Medical Center in Mississippi, Santa Rosa Medical Center in Florida, Southwest Regional Medical Center in Arkansas, and Summit Medical Center in Arkansas, which agreed to collectively pay $15 million;

Community Health Systems and its subsidiary Wesley Medical Center in Mississippi, which agreed to pay $210,000; and

North Texas Medical Center in Texas, which agreed to pay $480,000.

In October 2013, the United States resolved similar allegations with LifePoint Hospitals Inc. and two of its subsidiaries, PHC-Minden L.P., doing business as Minden Medical Center, and PHC-Cleveland Inc., doing business as Bolivar Medical Center, which collectively paid $4,672,469.80.

“This case demonstrates that the U.S. Attorney’s Office for the Eastern District of Arkansas will aggressively pursue civil health care fraud cases, where the integrity of the Medicare system has been undermined,” said U.S. Attorney Christopher R. Thyer of the Eastern District of Arkansas.  “Medical care providers who abuse Medicare hurt all taxpayers, and today’s announcement highlights our commitment to protecting our national health care system, as well as the Arkansans who depend on it.”

“Our agency is dedicated to investigating health care fraud schemes such as this, which divert scarce taxpayer funds meant to provide for legitimate patient care, including services for the often underserved mentally ill population,” said Special Agent in Charge Mike Fields of U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG).

The allegations resolved by today’s settlements arose from a lawsuit filed under the False Claims Act.  The act allows private individuals known as “relators” to sue on behalf of the United States and to share in the proceeds of any settlement or judgment that may result.  The relator in this case will receive $2,667,300. 

These settlements were the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Eastern District of Arkansas and HHS’ Office of Audit Statistics and OIG.

These settlements illustrate the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $24 billion through False Claims Act cases, with more than $15.3 billion of that amount recovered in cases involving fraud against federal health care programs.

The claims settled by these agreements are allegations only, and there has been no determination of liability. 

Source: justice.gov

Alleges Violation of Employment Rights of Sergeant in Army National Guard

Washington, DC—(ENEWSPF)—May 7, 2015. The Department of Justice announced today it has filed a civil complaint against a South Jersey company for failing to re-employ a former employee when she returned from a National Guard deployment, a violation of federal law.

The civil lawsuit, filed in Camden federal court, alleges that Healthcare Commons Inc., of Carneys Point, New Jersey, willfully violated the Uniformed Services Employment and Re-employment Rights Act of 1994 (USERRA).  USERRA protects the rights of uniformed service members to retain their civilian employment following absences due to military service obligations and provides that they shall not be discriminated against because of their military obligations.  

Megan Toliver, 32, of New Castle, Delaware, is a former employee of Healthcare Commons.  She joined the U.S. Army National Guard in September 2004 and, most recently, had served as a sergeant, with honorable service as a mental health specialist.  According to the complaint, when Toliver returned from her military deployment in May 2014, Healthcare Commons willfully violated USERRA by not re-employing her as a mental health screener or in another comparable position. 

“No person should lose their job for serving our country, but according to our complaint that’s exactly what happened to a National Guard member here,” said Acting Associate General Stuart F. Delery. “Today’s filing is one more example of the Department of Justice’s commitment to protecting the men and women who serve in our Armed Forces from discrimination and unlawful actions.”

“The filing of this case reinforces the commitment of the Department of Justice to the vigorously enforce the prohibition of employment discrimination based on military service,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division.  “I want to thank the Department of Labor for referring this case to the Department of Justice.  I’m hopeful that through the department’s newly created Servicemembers and Veterans Initiative, we will continue to build on our strong ties with federal partners and continue using every tool at our disposal to protect the rights of the men and women who serve in our Armed Forces.”

“The men and women who serve in our armed forces here and abroad do so at great personal sacrifice,” said U.S. Attorney Paul Fishman of the District of New Jersey.  “Because of that sacrifice, federal law guarantees that they have the opportunity to resume their careers when they’ve completed their service.  When companies seek to skirt their obligations to re-employ our returning veterans, we will hold them accountable.”

The case was referred by U.S. Department of Labor following an investigation by the department’s Veterans’ Employment and Training Service.

The plaintiff is represented by Special Litigation Counsel Andrew Braniff of the Civil Rights Division and Assistant U.S. Attorney Michael E. Campion of the District of New Jersey.

In March 2015, the Attorney General created the Servicemembers and Veterans Initiative, which is led by three dedicated career Justice Department attorneys with strong ties to the military community.  They will further the department’s existing efforts by coordinating and expanding enforcement, outreach, and training efforts on behalf of service members, veterans and their families.  The initiative will address the unique challenges that service members face while on active duty, that veterans face upon returning home, and that families face when a loved one is deployed.

Additional information about USERRA can be found on the Justice Department’s websites at www.usdoj.gov/crt/emp and www.servicemembers.gov, the U.S. Attorney’s Office website at www.justice.gov/usao-nj and the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm.

Related Material:

Download Toliver Complaint (17.44 KB)

Source: justice.gov

Washington, DC—(ENEWSPF)—May 7, 2015. Thirty-two people were arrested yesterday after being charged variously with racketeering conspiracy, conspiracy to commit identity theft, conspiracy to commit access device fraud, conspiracy to commit mail, wire and bank fraud, conspiracy to commit money laundering, conspiracy to use a facility of interstate commerce to commit murder-for-hire and conspiracy to engage in the unlicensed wholesale distribution of drugs, announced U.S. Attorney Melinda Haag of the Northern District of California, Special Agent in Charge David J. Johnson of the Federal Bureau of Investigation, and Special Agent in Charge José M. Martinez of Internal Revenue Service (IRS) Criminal Investigation.  A thirty-third defendant remains at large and is subject to an active arrest warrant.

According to an indictment that was unsealed yesterday, Ara Karapedyan, 45, Mihran Stepanyan, 29, and Artur Stepanyan, 38, were at the center of a nationwide conspiracy—with at least 18 other person—to conduct the affairs of a wide-ranging criminal enterprise through a pattern of racketeering.  This enterprise was fueled by a broad range of criminal activity including unlicensed wholesale drug distribution, money laundering and fraud.  The indictment names 33 defendants in all and describes an enterprise that spanned throughout California as well as in Minnesota, Ohio and Puerto Rico.

One key aspect of the alleged criminal activity described in the indictment was a multi-million dollar prescription drug diversion scheme.  Members and associates of the enterprise are alleged to have procured prescription drugs from unlicensed sources and to have resold the drugs to unknowing customers.  A central figure to these allegations is David Miller, 50.  Miller is alleged to be the owner and operator of a drug wholesaler called Minnesota Independent Cooperative (MIC) that, between 2010 and 2014, bought approximately $157 million of drugs from Mihran Stepanyan and Artur Stepanyan.  Miller and his employees allegedly knew the Stepanyans were not licensed to sell drugs and knew the Stepanyans procured their drugs through unlicensed sources.  Miller and his employees nevertheless purchased the drugs from the Stepanyans’ various companies, including Panda Capital Group, Red Rock Capital, Trans Atlantic Capital, GC National Wholesale, Sky Atlantic Capital and Nationwide Payment Solutions and resold the drugs as legitimate products.

A separate investigation has resulted in another indictment in the Southern District of Ohio charging David Miller, Mihran Stepanyan, Artur Stepanyan and MIC with various crimes arising from their sale of millions of dollars of illicitly-procured drugs.

The indictment also charges Karapedyan and his associates with engaging in the fraudulent unlicensed distribution of drugs.  For instance, from 2013 through 2015, Karapedyan, either personally or through an associate, sold several hundred thousand dollars’ worth of drugs such as Abilify, Liboderm, Cymbalta and Namenda, as well as HIV drugs such as Atripla, Truvada and Isentress and the cancer drug Gleevec.  Likewise, from roughly the latter part of 2014 through early 2015, Karapdyan and his racketeer co-conspirator Maxwell Starsky, 36, sold to another complicit wholesaler more than $1 million in illicitly procured drugs.  Karapedyan also supplied the Stepanyans with drugs.

Hugo Marquez, 41, Eric Figueroa, 29, Arman Zagaryan, 32, and their associates are likewise charged with procuring drugs from unlicensed sources and distributing the drugs to buyers.  According to the indictment, Alexander Soliman, 46, was one of their principal customers.  Between roughly 2012 and 2014, Soliman, through his companies Apex Pharmaceuticals and Maroon Pharma, knowingly purchased illicitly-procured drugs from Marquez, Figueroa and Zagaryan and then re-sold them as legitimate drugs.  During this time period, Marquez, Figueroa, Zargaryan and Soliman engaged in the distribution of more than $20 million worth of drugs.

Another aspect of the alleged criminal activity is a massive check and bank fraud operation.  As part of the enterprise, Karapedyan and his associates, including Asatour Magzanyan, 53, Tigran Sarkisyan, 38, and Hripsime Khachtryan, 41, allegedly used fraudulent identification information to prepare fraudulent tax returns, which were then filed with the government in order to induce the U.S. Treasury to issue tax refund checks.  Karapedyan associate Khachig Geuydjian, 74, allegedly used his unlicensed mail-box business to provide addresses for these fraudulent tax filings.  They and other members and associates of the enterprise then negotiated the tax refund checks using fraudulent identities or through a complicit check cashing business operated by Jean Dukmajian, 61, Karine Dukmajian, 33, and Angela Dukmajian, 26.  In addition to the tax refund scheme, members and associates of the enterprise also engaged in negotiating counterfeit and stolen checks.  In all, from roughly late 2012 to late 2014, Karapedyan and his associates negotiated more than 500 fraudulent checks worth more than $5 million.

In addition to the fraudulent unlicensed distribution of drugs and negotiating fraudulent checks, Karapedyan, the Stepanyans, Miller and others are charged with conspiring to launder money in an effort to promote their criminal activities and to conceal proceeds collected from their criminal activities.  For example, a description of Miller’s activity between 2012 through 2014, wherein he attempted to hide the fact he was paying the Stepanyans for drugs is alleged in the indictment.  The indictment further alleges Miller made the payments to the Stepanyans’ company GC National Wholesale through companies in Puerto Rico he controlled, such as B&Y Wholesalers and FMC Distributors.  The payments were for sales of drugs that the Stepanyans actually delivered to Miller’s company MIC.  Similarly, the indictment includes allegations Karapedyan and Starsky also arranged payments for more than $1 million of illicitly-procured drugs through a shell company.  In addition, Karapedyan also allegedly laundered money for the Stepanyans.  According to the indictment, in 2013, the Stepanyans transferred more than $1 million in proceeds derived from MIC to Karapedyan, who caused the money to be withdrawn as cash.

Furthermore, in addition to the foregoing, defendants Karapedyan and Gevork Ter-Mkrtchyan are charged with conspiring to use a facility of interstate commerce to commit murder-for-hire.  According to the indictment, these defendants made several attempts to find a person who would be willing to kill someone who had angered Ter-Mkrtchyan.  Although the defendants paid $1,500 for the hit, it was never carried out.

According to the indictment, a significant portion of the criminal activity took place in the Northern District of California.  For example, one delivery of drugs took place in the Northern District of California and many of the checks were negotiated in the Northern District as well.  In addition, much of the proceeds from the check and the drug schemes were laundered through the Northern District of California, where Karapedyan and his associates regularly picked up large amounts of cash.  In addition, Miller’s company, MIC, posted fraudulent information relating to the origins of the drugs he sold via a website.  The website was maintained by an Internet service provider in the Northern District of California.  Furthermore, Karapedyan made numerous calls to the Northern District of California in order to find individuals willing to perform the hit he sought.

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.   All the defendants except Miller were arrested yesterday.  Miller remains at large and is the subject of an active arrest warrant. 

In sum, the indictment includes seven counts as follows: count One, RICO conspiracy, in violation of 18 U.S.C. § 1962(d) (maximum term of imprisonment, life or 20 years); Count Two, conspiracy to commit identity theft, in violation of 18 U.S.C. §  1028(f) (maximum term of imprisonment, 15 years); Count Three, conspiracy to commit access device fraud, 18 U.S.C. § 1029(b)(2) (maximum term of imprisonment, 5 years); Count Four, conspiracy to commit mail, wire, and bank fraud, in violation of 18 U.S.C. § 1349; Count Five, conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h) (maximum term of imprisonment, 20 years); Count Six, conspiracy to use interstate facility to commit murder-for-hire, in violation of 18 U.S.C. § 1958); Count Seven, conspiracy to engage in unlicensed wholesale distribution of drugs, in violation of 18 U.S.C. § 371 (maximum term of imprisonment, 5 years).

The following charges apply as against the following defendants are: Ara Karapedyan on Counts one through seven, Mihran Stepanyan on counts one through five and seven, Artur Stepanyan on counts one through five and seven, Gevork Ter-Mkrtchyan on counts 1-7, Khachig Geuydjian on counts one through five, Arman Petrosyan on counts one through five, Lanna Karapedyan on counts one through five, Maxwell Starsky on counts one through five and seven, Sevak Gharghani on counts one through five and seven, Jean Dukmajian, on counts one through five, Karine Dukmajian on counts one through five, Angela Dukmajian on counts one through five, Arman Danielian count one, four, five and seven, Asatour Magzanyan conts one through five, Tigran Sarkisyan counts one through five, Hripsime Khachtryan counts one through five, Loui Artin on counts one through five, Hugo Marquez on counts one through five and seven, Arman Zargaryan on counts one through five and seven, Dmitriy Kustov on counts two through four, Michael Inman on counts two through four, Araxia Nazaryian on counts two five and seven, Alexander Soliman on counts four, five and seven, Cheryl Barndt on counts four, five and seven, Eric Figueroa on counts four, five and seven, Marc Asheghian on counts four, five and seven, Michael Asheghian on counts four, five and seven, David Milleron counts one through five and seven, James Russoon on counts four, five and seven, Jeannette Couch counts four, five and seven, Marie Polichetti counts four, five and seven, Bernardo Guillen counts four, five and seven, Javier Ramirez on counts four and seven.

Additional periods of supervised release, fines and special assessments also could be imposed.  Any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Thirty-one defendants appeared before the Honorable Victor B. Kenton and Michael R. Wilner in the Central District of California on Wednesday, May 6, 2015, to be advised of the charges against them and to determine conditions of release.  Some of those hearings have been continued at the request of the defendants.  Specifically, the bail hearing for Eric Figueroa has been continued to Friday, May 8, 2015, and the hearings for Hugo Marquez and Michael Inman have been continued to Monday, May 11, 2015, before the Honorable Michael R. Wilner.  In addition, Karapedyan will appear on Friday, May 8, 2015, before the Honorable Victor B. Kenton. 

Further, Ter-Mkrtchyan has requested a hearing in which the government will be required to prove his identity, i.e., that he is the individual named in the indictment.  That hearing will occur on Friday, May 8, 2015, before the Honorable Victor B. Kenton. 

The remaining 26 defendants have been ordered to appear before the Honorable Jacqueline Scott Corley in the Northern District of California. Alexander Soliman, Araxia Nazaryian and Asatour Magzanyan will appear on May 12, 2015.  Cheryl Barndt, Marc Asheghian, Michael Asheghian, Hripsime Khachtryan, Bernardo Guillen, Javier Ramirez, Jean Dukmajian, Karine Dukmajian, Angela Dukmajian, Khachig Geuydjian and Arman Zargaryan will appear on May 20, 2015.  Jeannette Couch, Loui Artin, Dmitriy Kustov, Marie Polichetti, Arman Danielian, Lanna Karapedyan, Sevak Gharghani, Arman Petrosyan and Maxwell Starsky will appear on May 22, 2015.

Mihran Stepanyan, Artur Stepanyan and Tigran Sarkisyan are being transported to the Northern District of California by the U.S. Marshal Service and will make court appearances after their arrival.

Assistant U.S. Attorneys Damali A. Taylor, David Countryman and W.S. Wilson Leung are prosecuting the case with the assistance of Lance Libatique, Ponly Tu, Daniel Charlier-Smith.  The prosecution is the result of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service.

Related Material:

Download Karapedyan Indictment (3.37 MB)

Source: justice.gov

Washington, DC--(ENEWSPF)--May 11, 2015. Heather Elizabeth Coffman, 29, of Glen Allen, Virginia, was sentenced today to 54 months in prison for making false statements in an international terrorism investigation.

Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Dana J. Boente of the Eastern District of Virginia and Special Agent in Charge Adam S. Lee of the FBI’s Richmond Field Office made the announcement. 

Coffman pleaded guilty to a one-count criminal information on Jan. 30, 2015.  According to the statement of facts filed with the plea agreement, Coffman admitted that beginning prior to June 2014 and continuing up through November 2014, she used several Facebook accounts under different names showing her support for the Islamic State of Iraq and the Levant’s (ISIL, referred to as ISIS by the defendant and within court documents) cause.  These accounts also revealed the defendant’s romantic involvement with an individual referred to as “N.A.,” a foreign national living outside of the United States.  In the months leading up to September 2014, Coffman and N.A. communicated almost daily via Facebook and other communications platforms.  During their conversations, Coffman and N.A. explored options for N.A. to travel to Syria in order to fight for ISIS and die a “Shaheed,” referring to a martyr who dies for “jihad.”

Coffman cultivated online relationships with individuals she believed were ISIS facilitators operating in Syria.  She put N.A. in contact with a facilitator to assist with his travel and eventual training with ISIS (with the Coffman’s financial assistance for travel) before he was to cross the border into Syria to fight with ISIS.  This plan was moving forward when the couple’s relationship deteriorated in early September 2014, and N.A. backed out of the plans.  Coffman later communicated with others about her disappointment and expressed how she wished that the plan had succeeded.

According to the plea documents, Coffman admitted that she lied during the ongoing investigation on Nov. 13, 2014, when she told FBI agents that she did not know whether N.A. had talked to anybody else who supported ISIS, and that she did not know anybody N.A. had talked to when, as Coffman well knew, she had previously put N.A. in contact with ISIS fighters and N.A., in turn, had communicated with them to facilitate N.A.’s travel to Turkey to join ISIS.

This case was investigated by FBI’s Richmond Field Office and the Richmond Joint Terrorism Task Force (JTTF).  Member agencies of the Richmond JTTF who assisted in this particular investigation include Virginia State Police, Henrico County Police, Chesterfield County Police, Richmond Police, Homeland Security Investigations, U.S. Secret Service, Bureau of Alcohol Tobacco and Firearms and Explosives, Department of State Diplomatic Security Service, Transportation Security Administration and Defense Criminal Investigative Service.

The prosecution is being handled by Assistant U.S. Attorneys Michael Gill and Jessica Aber of the Eastern District of Virginia, and Trial Attorney Annamartine Salick of the National Security Division's Counterterrorism Section.

Source: justice.gov

Washington, DC--(ENEWSPF)--May 11, 2015.  Jeffrey A. Sterling, 47, of O’Fallon, Missouri, was sentenced today to 42 months in prison for disclosing national defense information and obstructing justice.  Sterling disclosed classified information about a clandestine operational program concerning Iran’s nuclear weapons program to a New York Times reporter in 2003.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia and Assistant Director in Charge Andrew McCabe of the FBI’s Washington, D.C. Field Office made the announcement.

“For his own vindictive purposes, Jeffrey Sterling carelessly disclosed extremely valuable, highly classified information that he had taken an oath to keep secret,” said U.S. Attorney Boente.  “His attempt to leverage national security information for his own malicious reasons brought him to this sentence today.  I would like to thank the trial team and our partners at the FBI’s Washington Field Office and the Central Intelligence Agency for their hard work and commitment to this case.”

“The sentence handed down by a federal judge is the culmination of a lengthy investigation, a protracted prosecution and a unanimous decision by a federal jury to convict Mr. Sterling for the unauthorized disclosure of national security information,” said Assistant Director in Charge McCabe.  “The time and effort dedicated to this case by FBI special agents, intelligence analysts and prosecutors working on this matter exemplify the extent the FBI will undertake in pursuit of justice.”

Sterling was found guilty by a federal jury on Jan. 26, 2015.  According to court records and evidence at trial, Sterling was employed by the CIA from May 1993 to January 2002.  From November 1998 through May 2000, he was assigned to a classified clandestine operational program designed to undermine the Iranian nuclear weapons program.  He was also the operations officer assigned to handle a human asset associated with that program, a person identified at trial as Merlin.  Sterling was reassigned in May 2000, at which time he was no longer authorized to receive or possess classified documents concerning the program or the individual.

In connection with his employment, Sterling, who is a lawyer, signed various security, secrecy and non-disclosure agreements in which he agreed never to disclose classified information to unauthorized persons, acknowledged that classified information was the property of the CIA, and also acknowledged that the unauthorized disclosure of classified information could constitute a criminal offense.  These agreements also set forth the proper procedures to follow if Sterling had concerns that the CIA had engaged in any “unlawful or improper” conduct that implicated classified information.  These procedures permit such concerns to be addressed while still protecting the classified nature of the information.  The media was not an authorized party to receive such classified information.

In August 2000, Sterling pursued administrative and civil actions against the CIA.  Evidence at trial showed that Sterling, in retaliation for the CIA’s refusal to settle those actions on terms favorable to him, disclosed information concerning the classified operational program and the human asset to a New York Times reporter working on an unpublished article in early 2003 and a book the reporter published in January 2006.  Sterling’s civil and administrative claims were ultimately dismissed by the court.

Evidence demonstrated that in February and March 2003, Sterling made various telephone calls to the reporter’s residence and e-mailed a newspaper article about the weapons capabilities of a certain country that was within Sterling’s previous clandestine operational assignment.  While the possible newspaper article containing the classified information Sterling provided was ultimately not published in 2003, evidence showed that Sterling and the reporter remained in touch from December 2003 through November 2005 via telephone and e-mail.  In January 2006, the reporter published a book that contained classified information about the program and the human asset.

Evidence at trial showed that Sterling was aware of a grand jury investigation into the matter by June 2006 when he was served a grand jury subpoena for documents relating to the reporter’s book.  Nevertheless, between April and July 2006, Sterling deleted the e-mail containing the classified information he had sent from his account in an effort to obstruct the investigation.

This case was investigated by the FBI’s Washington Field Office, with assistance in the arrest from the FBI’s St. Louis Field Office.  This case was prosecuted by Deputy Chief Eric G. Olshan of the Criminal Division’s Public Integrity Section and Senior Litigation Counsel James L. Trump and Assistant U.S. Attorney Dennis Fitzpatrick of the Eastern District of Virginia. 

Source: justice.gov

Washington, DC--(ENEWSPF)--May 12, 2015. Earlier today, Madhi Hashi, 25, of Somalia, Ali Yasin Ahmed, 30, of Sweden, and Mohamed Yusuf, 32, of Sweden, pleaded guilty to conspiring to provide material support to a designated foreign terrorist organization, al-Shabaab.

The guilty plea was announced by Assistant Attorney General for National Security John P. Carlin, Acting U.S. Attorney Kelly T. Currie of the Eastern District of New York and Assistant Director in Charge Diego Rodriguez, of the FBI’s New York Field Office.

The guilty plea took place before U.S. District Judge John Gleeson of the Eastern District of New York.  At sentencing, each of the defendants faces a maximum of 15 years in prison and automatic removal from the United States.

As stated in court today and according to court documents, between approximately December 2008 and August 2012, the defendants served as members of al-Shabaab in Somalia, where they agreed with others to support al-Shabaab and its extremist agenda.  Defendants Mohamed Yusuf and Ali Yasin Ahmed fought in battles in Somalia against African Union forces.  Defendant Madhi Hashi was a close associate of American-born jihadist Omar Hammami, with ties to a known al-Shabaab suicide bomber.  In addition, defendant Yusuf is featured in an al-Shabaab propaganda video titled “Inspire the Believers.”

In early August 2012, the defendants were apprehended together in East Africa by local authorities shortly after leaving Somalia on their way to Yemen.  On Nov. 14, 2012, the FBI took custody of the defendants and brought them to the Eastern District of New York for prosecution.

“Hashi, Ahmed and Yusuf all pleaded guilty to conspiring to provide material support to a designated foreign terrorist organization, al-Shabaab,” said Assistant Attorney General Carlin.  “The National Security Division remains committed to identifying, disrupting and holding accountable all who seek to provide material support to terrorists both at home and abroad.  I would like to thank all of the agents, analysts and prosecutors who are responsible for this case.”

“The defendants were committed supporters of al-Shabaab, a violent terrorist organization that has demonstrated its capabilities and motives in numerous terrorist attacks overseas, and has publicly called for attacks against the United States,” said Acting U.S. Attorney Currie.  “We will use every tool at our disposal to combat terrorist groups, deter terrorist activity, and incapacitate individual terrorists around the world.  Today’s convictions demonstrate that criminal prosecution is an effective tool in our efforts to combat international terrorism.”

Assistant Attorney General Carlin joined Acting U.S. Attorney Currie in thanking the federal, state and local law enforcement agencies who participate in the FBI’s Joint Terrorism Task Force in New York.

The government’s case is being prosecuted by Assistant U.S. Attorneys Shreve Ariail, Seth D. DuCharme and Richard M. Tucker of the Eastern District of New York and Trial Attorney Annamartine Salick of the National Security Division's Counterterrorism Section.  Trial Attorneys Shanna Batten Aguirre and Dan Stigall of the Justice Department’s Office of International Affairs provided valuable assistance.

Source: justice.gov

Washington, DC--(ENEWSPF)--May 12, 2015.  Garfield M. Taylor, 56, of Rockville, Maryland, was sentenced today to 13 years in prison and ordered to pay over $28.6 million in restitution for operating a Ponzi scheme that resulted in investors losing money they invested with Taylor and companies he controlled.

The sentencing was announced by Acting U.S. Attorney Vincent H. Cohen Jr. of the District of Columbia, Assistant Director in Charge Andrew G. McCabe of the FBI’s Washington Field Office and Acting Commissioner Chester A. McPherson of the District of Columbia’s Department of Insurance, Securities and Banking.

Taylor pleaded guilty in March 2014 in the U.S. District Court of the District of Columbia to securities fraud.  He was sentenced by Chief District Judge Richard W. Roberts of the District of Columbia.  Upon completion of his prison term, Taylor will be placed on three years of supervised release.  In addition to the $28.6 million order of restitution, the judge entered a forfeiture judgment in the same amount.  Taylor was taken into custody after the sentencing.

In a parallel action, the U.S. Securities and Exchange Commission obtained a civil judgment against Taylor for his fraudulent conduct.

“Garfield Taylor masterminded a Ponzi scheme to bilk local investors out of over $28 million,” said Acting U.S. Attorney Cohen Jr.  “When his scheme collapsed, his lies left the families and charities who believed his empty promises holding the bag.  This 13-year prison sentence is a reflection of the seriousness of financial crimes and our dedication to vigorous prosecution of securities fraud.”

“Mr. Taylor now faces the consequences of his role in a $28 million fraud scheme that defrauded clients for his own personal gain,” said Assistant Director in Charge McCabe.  “With our partners, the FBI remains committed to investigating those who hide behind deceptive financial fraud schemes.”

“Today’s sentencing demonstrates that defrauding investors in the District of Columbia carries significant consequences,” said Acting Commissioner McPherson.  “Mr. Taylor deceived investors out of millions causing significant financial harm that justifies this sentence.  Together with the U.S. Attorney’s Office, the FBI, the Securities and Exchange Commission and national and local law enforcement, my department will continue to protect investors from the illegal and deceptive practices Mr. Taylor used to defraud investors out of their hard earned money and savings.”

According to the government’s evidence, Taylor devised and employed a scheme from in or about September 2006 through in or about September 2010 in which he convinced investors to invest with him by promising them substantial returns on their investment, telling them that he used a sophisticated securities trading strategy that protected against loss and claiming that he had a proven track record of using this strategy effectively. 

During the course of this scheme, however, Taylor never used the trading strategy that he told investors that he would use.  With the investments he made during this period, Taylor either lost money or made minimal profits far below what was needed to pay the amounts he owed.  The only way that Taylor was able to pay the substantial interest rates was to use portions of the principal invested by new investors to pay amounts that were owed to earlier investors.

In one example from the government’s evidence, Taylor, in April 2010, used approximately half of an investor’s $425,000 investment to pay interest and principal that was due to earlier investors, rather than using those funds to invest in securities, as he had promised to do.  Taylor paid only a portion of the interest payments he was required to pay the investor, before telling the investor that, because of trading losses, he was unable to make any more interest payments or to return the investor’s principal.

At the time of the scheme’s collapse, Taylor owed investors over $28.6 million just to cover the principal he was contractually required to return to them.

In announcing the sentence, Acting U.S. Attorney Cohen, Assistant Director in Charge McCabe and Acting Commissioner McPherson commended the work of those who investigated the case from the FBI’s Washington Field Office and the District of Columbia’s Department of Insurance, Securities and Banking.  They also expressed appreciation to the U.S. Securities and Exchange Commission for its significant assistance.  They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office.  The case was also investigated and prosecuted by Assistant U.S. Attorneys Matt Graves, Lionel André, Catherine K. Connelly, Della Sentilles and Zia Faruqui of the District of Columbia.  Former Assistant U.S. Attorney Bridget Fitzpatrick of the District of Columbia also investigated the matter.

Source: justice.gov

Washington, DC—(ENEWSPF)—May 12, 2015. The Justice Department’s Civil Rights Division and U.S Attorney Carlie Christensen of the District of Utah announced today the filing of a complaint in U.S. District Court in Salt Lake City against Veteran’s Trading Company (VTC), a business with headquarters in Park City, Utah.  The complaint alleges the business violated the employment rights of Naval Reserve Captain Paul M. Costello under the Uniformed Services Employment and Reemployment Rights Act (USERRA).  Costello is a Navy veteran with a disability who has served his country as an F-18 fighter pilot.  Since 1997, he has served as a member of the United States Naval Reserve. 

According to the complaint, filed by the United States on Costello’s behalf, Costello’s military service was a motivating factor in VTC’s decisions to deny his request for re-employment and, ultimately, to terminate his employment.  The United States claims that both actions by VTC violated Costello’s USERRA rights. 

The complaint further alleges that in July 2013, VTC fired Costello from his job as company President due to his military service and subsequently denied Costello’s application for reemployment following his active military duty in September 2013.  On April 30, 2015, VTC pre-emptively filed its own suit against Costello in Utah state court claiming that he was inappropriately remunerated for his service to the company while he was on military leave; despite the fact that while he was on military he took personal leave in order to preside over company meetings.  In addition to filing its federal complaint, the United States removed the employer’s action from state court to federal court.

“The brave men and women who serve in our Armed Forces should never have to fear losing their job while they’re deployed overseas,” said Acting Associate Attorney General Stuart F. Delery.  “That’s why the Department of Justice is committed to protecting the employment rights of service members and we will continue to devote time and resources to hold bad actors accountable.”

“Captain Costello served our nation honorably, and USERRA guarantees his right to re-employment upon his return from service,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division.  “Through the department’s newly created Servicemembers and Veterans Initiative, we will continue to build on our strong ties with federal partners and continue using every tool at our disposal to protect the rights of the men and women who serve in our Armed Forces.”

“Members of our National Guard and Reserves make many sacrifices, including spending months or years away from their jobs and families,” said U.S. Attorney Christensen.  “When our service members are deployed in the service of our country, they are entitled to retain their civilian employment and to the protections of federal law that prevent them from being subject to discrimination based upon their military obligations.  We are filing suit today, on behalf of Captain Costello, a member of the U.S. Naval Reserve, to ensure that he does not lose his rights while he was protecting ours.” 

USERRA protects the rights of uniformed service members to retain their civilian employment following absences due to military service obligations, and proved that service members cannot be discriminated against because of their military obligations. 

The lawsuit filed by the United States seeks damages equal to the amount of Costello’s lost wages and other benefits caused by VTC’s failure to comply with USERRA and a dismissal of VTC’s complaint.  It also seeks an order requiring VTC to return Costello’s ownership and distribution shares and pay him all amounts that were distributed to shareholders between June 9, 2013, and the date of judgment.  The lawsuit seeks an order requiring VTC to pay for all litigation fees related to the court action.

Costello initially filed a complaint with the Labor Department’s Veterans’ Employment and Training Service, which investigated this matter and, after resolution failed, referred it to the Justice Department’s Civil Rights Division, Employment Litigation Section.  This lawsuit followed as a collaborative initiative between the Civil Rights Division and the U.S. Attorney’s Office for the District of Utah.  The Department of Justice has given a high priority to the enforcement of service members’ rights under USERRA.  Additional information about USERRA can be found on the Justice Department’s Web sites at http://www.usdoj.gov/crt/emp and http://www.servicemembers.gov, as well as on the Labor Department’s website at http://www.dol.gov/vets/programs/userra/main.htm.

Related Material:

Download VTC Complaint (192.24 KB)

Source: justice.gov

Chicago-(ENEWSPF)- Robert J. Holley, Special Agent in Charge of the Chicago Field Office of the Federal Bureau of Investigation (FBI) announced today the reward being offered for information leading to the arrest of a serial bank robber dubbed the Bandage Bandit is being increased to $10,000 following another Chicago bank robbery attributed to him. The latest occurred Saturday afternoon at the Chase Bank branch located at 3032 North Clark Street, bringing to five the total number of robberies he is suspected of committing.

The robber, pictured in the attached flyer, earned his moniker by wearing a large gauze bandage on his face during two of the robberies. In addition to the Saturday heist, the following robberies are also suspected of being the work of the Bandage Bandit:

1. PNC Bank, 2154 West Madison St., 9:45 a.m. on March 31, 2015.
2. Chase Bank, 3101 West Cermak Rd., 9:13 a. m on April 6, 2015.
3. PNC Bank, 3337 West North Ave., 10:46 a.m. on April 22, 2015.
4. PNC Bank, 2300 North Western Ave., 9:12 a.m. on April 28, 2015.

On each occasion, a robber entered the bank, approached a bank employee, and made a demand for money while threatening harm to bank employees and customers. To date, there have been no physical injuries reported in connection with the robberies.

Anyone recognizing the Bandage Bandit or having information about his whereabouts is strongly encouraged to contact local police or the Chicago Field Office of the FBI at (312) 421-6700. This case is being investigated by the FBI in coordination with local authorities.

Photographs from the robberies and additional information about the Bandage Bandit, as well as information about other unsolved bank robberies in the Chicago area, can be found online at www.bandittrackerchicago.com.

Source: FBI.GOV

Washington, DC--(ENEWSPF)--May 13, 2015. A former Oklahoma City law enforcement officer and owner of “Polygraph.com” pleaded guilty today to obstruction of justice and mail fraud for training customers to lie and conceal crimes during polygraph examinations.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting Assistant Commissioner Anthony Triplett of U.S. Customs and Border Protection’s Office of Internal Affairs and Special Agent in Charge James E. Finch of the Federal Bureau of Investigation’s (FBI) Oklahoma City Field Office made the announcement.

“Lying, deception and fraud cannot be allowed to influence the hiring of national security and law enforcement officials, particularly when it might affect the security of our borders,” said Assistant Attorney General Caldwell.  “Today’s conviction sends a message that we pursue those who attempt to corrupt law enforcement wherever and however they may try to do so.”

Douglas Williams, 69, of Norman, Oklahoma, pleaded guilty to a five-count indictment charging him with mail fraud and obstruction.  Williams was indicted on Nov. 14, 2014, in the Western District of Oklahoma.

According to admissions made in connection with his plea, Williams, the owner and operator of “Polygraph.com,” marketed his training services to people appearing for polygraph examinations before federal, state and local law enforcement agencies and federal intelligence agencies, as well as people required to take polygraph examinations under the terms of their parole or probation.

Williams further admitted that he trained an individual posing as a federal law enforcement officer to lie and conceal involvement in criminal activity from an internal agency investigation.  Williams also admitted to having trained a second individual posing as an applicant seeking federal employment to lie and conceal crimes in a pre-employment polygraph examination.  Williams, who was paid for both training sessions, admitted to having instructed the individuals to deny having received his polygraph training.

The investigation is being investigated by U.S. Custom and Border Protection’s Office of Internal Affairs and the FBI’s Oklahoma City Field Office.  The case is being prosecuted by Trial Attorneys Heidi Boutros Gesch and Brian K. Kidd of the Criminal Division’s Public Integrity Section.  

Source: justice.gov

Washington, DC—(ENEWSPF)—May 14, 2015. Paul Tanaka, 56, who was the second in command of the Los Angeles Sheriff’s Department (LASD) and William Thomas Carey, 56, who oversaw internal criminal investigations at the LASD, have been indicted on obstruction of justice charges for allegedly directing efforts to quash a federal investigation into corruption and civil rights violations by sheriff’s deputies at two downtown jail complexes.

A federal grand jury yesterday returned a five-count indictment against Tanaka and Carey, who allegedly participated in a broad conspiracy to obstruct the investigation, a scheme that started when the sheriff’s department learned that an inmate at the Men’s Central Jail (MCJ) was an informant for the Federal Bureau of Investigations (FBI).  Tanaka and Carey allegedly directed, oversaw and participated in a conspiracy that last year resulted in the conviction of seven other former LASD deputies.

The obstruction of justice case was announced at a news conference this morning by Acting U.S. Attorney Stephanie Yonekura for the Central District of California and Assistant Director in Charge David Bowdich for the FBI’s Los Angeles Field Office.

Tanaka and Carey are charged with conspiracy to obstruct justice and each is named in one count of obstruction of justice.  Carey is charged with two counts of making false declarations for perjuring himself last year during the trials of co-conspirators.

Tanaka was the undersheriff, the number two in the LASD, until 2013 and he ran an unsuccessful campaign for sheriff last year.  Carey left LASD after reaching the rank of captain and heading the Internal Criminal Investigations Bureau.

Tanaka and Carey surrendered themselves to the FBI early this morning and the two men are expected to be arraigned on the indictment this afternoon in U.S. District Court.

According to the indictment, the two defendants were well aware of “problem deputies” at the jails, “allegations of rampant abuse of inmates” and “insufficient internal investigations” into deputy misconduct.  But against this backdrop, Tanaka allegedly told deputies assigned to the jails to work in a “gray area” and that he thought that the LASD Internal Affairs Bureau should be reduced from 45 investigators to just one.

The scheme to thwart the federal investigation allegedly started when deputies in August 2011 recovered a mobile phone from an inmate in MCJ, linked the phone to the FBI and determined that the inmate was an informant for the FBI who was cooperating in a federal corruption civil rights investigation.  The phone was given to the inmate by a corrupt deputy, who subsequently pleaded guilty to federal bribery charges.

Alarmed by the federal investigation, members of the conspiracy, guided by Tanaka and Carey, took affirmative steps to hide the cooperator from the FBI and the U.S. Marshals Service, which was attempting to bring the inmate to testify before a federal grand jury in response to an order issued by a federal judge.  The indictment alleges that as part of the conspiracy, the deputies altered records to make it appear that the cooperator had been released.  They then re-booked the inmate under a different name, moved him to secure locations, prohibited FBI access to the informant and then told the cooperator that he had been abandoned by the FBI.

Over the course of several weeks, members of the conspiracy allegedly attempted to obtain an order from a Los Angeles Superior Court judge that would have compelled the FBI to turn over information about its investigation to LASD.  After the judge refused to issue such an order because he had no jurisdiction over the federal law enforcement agency and even though it was clear that the FBI was properly acting in the course of a lawful investigation, Tanaka and Carey met to discuss having two sergeants approach the lead FBI case agent.  Soon thereafter, the sergeants confronted the agent at her residence in an attempt to intimidate her.  The sergeants threatened the agent with arrest and later reiterated this threat to her supervisor, stating that the agent’s arrest was imminent.

“As the allegations demonstrate, Tanaka had a large role in institutionalizing certain illegal behavior within the sheriff’s department,” said Acting U.S. Attorney Yonekura.  “This case also illustrates how leaders who foster and then try to hide a corrupt culture, will be held accountable, just like their subordinates.”

The indictment also alleges that Tanaka and Carey oversaw co-conspirators who told fellow deputies not to cooperate in the federal investigation.  Members of the conspiracy allegedly engaged in witness tampering by telling fellow deputies that the FBI would lie, threaten, manipulate and blackmail them to obtain information about the sheriff’s department.

“The allegations in the indictment include cover-ups, diversionary tactics, retribution and a culture generally reserved for Hollywood scripts,” said Assistant Director in Charge Bowdich.  “The public held the defendants to the highest standard, but, instead, they spent their time and energy setting a tone which minimized the value of their oath and dishonored the badge they wore.”

An indictment contains allegations that a defendant has committed a crime.  Every defendant is presumed to be innocent until and unless proven guilty in court.

The conspiracy count carries a statutory maximum sentence of five years in federal prison and the obstruction of justice charges carry a maximum penalty of ten years.  The two false declaration counts against Carey each carry a potential penalty of five years.

As a result of this investigation, a total of 21 defendants who held various ranks in the LASD have been charged, including the deputy who took the bribe to smuggle the phone and seven co-conspirators in the scheme to obstruct justice (see, for example: http://www.justice.gov/usao/cac/Pressroom/2014/161.html).

The investigation into corruption, civil rights abuses and obstruction of justice related to the Los Angeles County jails is being conducted by the FBI.

Related Material:

Download LASD -Tanaka and Carey Indictment.pdf (2.19 MB)

Source: justice.gov

Washington, DC--(ENEWSPF)--May 14, 2015.  PharMerica Corporation has agreed to pay the United States $31.5 million to resolve a lawsuit alleging that they violated the Controlled Substances Act by dispensing Schedule II controlled drugs without a valid prescription and violated the False Claims Act by submitting false claims to Medicare for these improperly dispensed drugs, the Justice Department announced today. 

“Pharmacies put patients at risk when they dispense Schedule II narcotics, which have the highest potential for abuse of any prescription drug, without a valid prescription from a physician,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Department of Justice’s Civil Division.  “Today’s settlement demonstrates our commitment to the fight against the misuse of controlled substances.”

PharMerica is a long-term care pharmacy that dispenses medications to residents of long-term care facilities, including nursing homes and skilled nursing facilities.  Many of the prescriptions filled by PharMerica are for controlled substances listed in Schedule II under the Controlled Substances Act.  Schedule II drugs, such as oxycodone and fentanyl, can cause significant harm if used improperly and have a high potential for abuse.

The government’s suit alleged that PharMerica pharmacies operating across the country routinely dispensed Schedule II controlled drugs in non-emergency situations without first obtaining a written prescription from a treating physician.  According to the complaint, PharMerica’s actions violated the Controlled Substances Act by enabling nursing home staff to order narcotics, and pharmacists to dispense them, without confirming that a physician had made a medical judgment as to whether the narcotics were necessary and should be administered to the resident.  Under the settlement, PharMerica has agreed to pay $8 million to resolve these allegations. 

The government’s complaint also alleged that PharMerica violated the False Claims Act by knowingly causing the submission of false claims to Medicare Part D for improperly dispensed Schedule II drugs.  The False Claims Act imposes treble damages and penalties for the knowing submission of false claims for federal funds.  PharMerica has agreed to pay $23.5 million to resolve its alleged False Claims Act violations.

“Today’s significant settlement represents a single but critical significant step toward promoting integrity in the administration of public health programs,” said U.S. Attorney James L. Santelle of the Eastern District of Wisconsin.  “This civil litigation and its meaningful resolution demonstrates that our fight against health care fraud is helping to protect all Americans, including the elderly, people with disabilities and other who may be vulnerable to mistreatment and abuse.”

The False Claims Act claims resolved by today’s settlement were originally brought by Jennifer Denk, a pharmacist formerly employed by PharMerica, under the whistleblower provisions of the act, which authorize private parties to sue on behalf of the United States and to receive a portion of any recovery.  The act permits the United States to intervene and take over the lawsuit, as it did in this case with respect to some of Ms. Denk’s allegations.  Ms. Denk will receive $4.3 million as her share of the settlement.

“DEA registrants are responsible to handle controlled substances in compliance with the Controlled Substances Act,” said Special Agent in Charge Dennis Wichern of the Drug Enforcement Administration (DEA) Chicago Field Division.  “Failure to do so increases the potential for diversion and jeopardizes the public health and safety”.

“The DEA is committed to investigating organizations that are not in compliance with the Controlled Substances Act,” said Special Agent in Charge Michael J. Ferguson of the DEA New England Field Division.  “Our obligation is to ensure public safety and public health and we are committed to working with our law enforcement and regulatory partners nationwide to ensure that these rules and regulations are followed.”

“The legal requirement that narcotics like oxycodone be prescribed by a physician is a crucial patient protection, which is especially important to safeguard the health of the vulnerable elderly and disabled patients in long term care facilities,” said Special Agent in Charge Lamont Pugh of the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG).  “Our agency is dedicated to protecting the taxpayer-funded Medicare and Medicaid programs as well as the millions of beneficiaries who rely on those programs for their health and well-being.”

As part of the settlement announced today, the settling defendant has also agreed to enter into a corporate integrity agreement with the HHS-OIG, which obligates PharMerica to undertake substantial internal compliance reforms and to submit federal health care program claims for an independent review for the next five years. 

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $24 billion through False Claims Act cases, with more than $15.3 billion of that amount recovered in cases involving fraud against federal health care programs.

The settlement with PharMerica was the result of a coordinated effort among the Civil Division, the U.S. Attorney’s Office of the Eastern District of Wisconsin, the U.S. Attorney’s Office of the District of Rhode Island, HHS-OIG and the DEA. 

The lawsuit is captioned U.S. ex rel. Denk v. PharMerica Corp., No. 09-cv-720 (E.D. Wis.).  The claims resolved by the settlement are allegations only; there has been no determination of liability.

Source: justice.gov

Washington, DC--(ENEWSPF)--May 14, 2015. Three subsidiaries of North Carolina-based Duke Energy Corporation, the largest utility in the United States, pleaded guilty today to nine criminal violations of the Clean Water Act at several of its North Carolina facilities and agreed to pay a $68 million criminal fine and spend $34 million on environmental projects and land conservation to benefit rivers and wetlands in North Carolina and Virginia.  Four of the charges are the direct result of the massive coal ash spill from the Dan River steam station into the Dan River near Eden, North Carolina, in February 2014. The remaining violations were discovered as the scope of the investigation broadened based on allegations of historical violations at the companies’ other facilities.

Under the plea agreement, both Duke Energy Carolinas and Duke Energy Progress, must certify that they have reserved sufficient assets to meet legal obligations with respect to its coal ash impoundments within North Carolina, obligations estimated to be approximately $3.4 billion.

Officials from the Justice Department’s Environment and Natural Resources Division and the three U.S. Attorney’s Offices in North Carolina, the Environmental Protection Agency’s (EPA) Office of Enforcement and Compliance Assurance, EPA’s Office of Inspector General, the Internal Revenue Service (IRS) Criminal Investigations and the North Carolina State Bureau of Investigation (SBI) made the announcement following a plea hearing at the federal courthouse in Greenville, North Carolina today.     

“The massive coal ash spill into North Carolina’s Dan River last year was a crime and it was the result of repeated failures by Duke Energy’s subsidiaries to exercise controls over coal ash facilities,” said Assistant Attorney General John C. Cruden of the Justice Department’s Environment and Natural Resources Division.  “The terms of these three plea agreements will help prevent this kind of environmental disaster from reoccurring in North Carolina and throughout the United States by requiring Duke subsidiaries to follow a rigorous and independently verifiable program to ensure they comply with the law.”

“Duke Energy's crimes reflect a breach of the public trust and a lack of stewardship for the natural resources belonging to all of the citizens of North Carolina,” said U.S. Attorney Thomas G. Walker for the Eastern District of North Carolina.  “The massive release at the Dan River coal ash basin revealed criminal misconduct throughout the state – conduct that will no longer be tolerated under the judgment imposed by the court today.”

“Duke’s subsidiaries discharged potentially toxic pollutants that put at risk North Carolina’s water quality and wildlife and today’s outcome ensures they will be held responsible for violating federal environmental requirements,” said Acting U.S. Attorney Jill W. Rose for the Western District of North Carolina.  “The defendants will now have to comply with the terms imposed by the court, including paying hefty financial penalties and making significant financial contributions toward improving the quality of impacted waterways, wetlands and our water supply system.”

“Duke’s actions adversely impacted the Dan River ecosystem and caused residents who live near and rely on the water supply much apprehension about the safety of the river,” said Criminal Chief Cliff Barrett for the U.S. Attorney’s Office in the Middle District of North Carolina.  “Today’s plea holds Duke accountable for this result and charts a course to remediate the impact of these spills.”

“Over two hundred sixteen million Americans rely on surface water as their source of drinking water,” said Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance.  “Duke Energy put that precious resource at risk in North Carolina as the result of their negligence.  Companies that cut corners and contaminate waters on which communities depend, as Duke did here, will be held accountable.”

On Feb. 20, 2015, the three U.S. Attorney’s Offices in North Carolina filed separate criminal bills of information in their respective federal courts, alleging violations of the Clean Water Act at the following Duke facilities: the Dan River steam station (Rockingham County), the Cape Fear steam electric plant (Chatham County), the Asheville steam electric generating plant (Buncombe County), the H.F. Lee steam electric plant (Wayne County) and the Riverbend steam station (Gaston County).  The alleged violations included unlawfully failing to maintain equipment at the Dan River and Cape Fear facilities and unlawfully discharging coal ash and/or coal ash wastewater from impoundments at the Dan River, Asheville, Lee and Riverbend facilities. 

As part of their plea agreements, Duke Energy Business Services LLC, Duke Energy Carolinas LLC and Duke Energy Progress Inc. will pay a $68 million criminal fine and a total $24 million community service payment to the National Fish and Wildlife Foundation for the benefit of the riparian environment and ecosystems of North Carolina and Virginia.  The companies will also provide $10 million to an authorized wetlands mitigation bank for the purchase of wetlands or riparian lands to offset the long-term environmental impacts of its coal ash basins.  In addition, they will pay restitution to the federal, state and local governments that responded to the Dan River spill and be placed on a period of supervised probation for five years.

Duke’s subsidiaries operating 18 facilities in five states, including 14 in North Carolina, will also be required to develop and implement nationwide and statewide environmental compliance programs to be monitored by an independent court appointed monitor and be regularly and independently audited.  Results of these audits will be made available to the public to ensure compliance with environmental laws and programs.  The companies’ compliance will be overseen by a court-appointed monitor who will report findings to the court and the U.S. Probation Office as well as ensuring public access to the information.

Approximately 108 million tons of coal ash are currently held in coal ash basins owned and operated by the defendants in North Carolina.  Duke Energy Corporation subsidiaries also operate facilities with coal ash basins in South Carolina, approximately 5.99 million tons of coal ash, Kentucky, approximately 1.5 million tons of coal ash, Indiana, approximately 35.6 million tons of coal ash and Ohio, approximately 5.9 million tons of coal ash.

The companies must also meet the obligations imposed under federal and state law to excavate and close coal ash impoundments at the Asheville, Dan River, Riverbend and Sutton facilities.          

Additionally, at the insistence of the United States, the holding company Duke Energy Corporation has guaranteed the payment of the monetary penalties and the performance of the nationwide and statewide environmental compliance plans.

“Duke’s environmental crimes required a special financial review of their actions to which we were proud to join our partners in investigating,” said Special Agent in Charge Thomas J. Holloman, III of the IRS Criminal Investigation.  “The considerable fines, formal apologies and massive cleanup initiatives will impact the Duke image and brand, assuring the public that corporations will be held accountable for their gross actions involving the environment, wildlife and the communities of this great state.”

“The SBI worked closely with the Environmental Protection Agency Criminal Investigation Division and the Internal Revenue Service in this matter,” said Acting Director B.W. Collier of the North Carolina SBI.  “This type of collaboration is critical to ensuring a thorough and intensive review on cases such as this.  The SBI remains committed to the public interest and is prepared to continue assisting the U.S. Attorney’s office.”

The criminal investigation was conducted by the Criminal Investigation Division, Region Four and the Office of Inspector General of EPA, Criminal Investigations of the IRS and North Carolina State Bureau of Investigation with assistance from the Federal Bureau of Investigation and the Department of Defense Criminal Investigative Service.

Related Material:

Source: justice.gov

Washington, DC--(ENEWSPF)--May 14, 2015.  Ning Qiu, 43, of Frisco, Texas, an appraiser of Asian art, was sentenced today by U.S. District Judge Thad Heartfield, in Beaumont, Texas, to 25 months in prison to be followed by three years of supervised release for conspiring to smuggle rhinoceros horns and objects made from rhino horn and elephant ivory, worth nearly $1 million, from the United States to China.  Qiu was also directed to pay a $150,000 fine, which was directed to the Lacey Act Reward Fund.

The sentence was announced by Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division, U.S. Attorney John M. Bales for the Eastern District of Texas and Director Dan Ashe for the U.S. Fish and Wildlife Service (USFWS). 

Qiu had worked for seven years as an Asian antique appraiser for an auction house in Dallas, Texas.  Qiu previously pleaded guilty before U.S. Magistrate Judge Don D. Bush to an information charging him with conspiracy to smuggle and violate the Lacey Act.  Qiu was identified as part of “Operation Crash” – a nationwide effort led by the USFWS and the Department of Justice to investigate and prosecute those involved in the black market trade of rhinoceros horns and other protected species.

In papers filed in federal court, Qiu admitted to acting as one of three antique dealers in the United States who Zhifei Li, the admitted “boss” of the conspiracy, paid to help obtain wildlife items and smuggle them to Li via Hong Kong.  Li was sentenced to serve 70 months in prison on May 27, 2014, in federal district court in Newark, New Jersey, for playing a leadership and organizational role in the smuggling conspiracy by arranging for financing to pay for the wildlife, purchasing and negotiating the price, directing how to smuggle the items out of the United States and obtaining the assistance of additional collaborators in Hong Kong to receive the smuggled goods and then smuggle them to mainland China.  

“Qiu was a key player in a web of wildlife traffickers who used his role as an antique dealer to illicitly smuggle wildlife items, including rhino horn and elephant ivory, from the United States to China,” said Assistant Attorney General Cruden.  “We will continue to investigate and prosecute those who are involved in this dark trade, which fuels poaching and is driving some of the world’s most iconic species to the brink of extinction.”

“Ning Qiu’s unseemly business of trafficking in the horns of endangered rhinos is over and now he will serve a just sentence of imprisonment,” said U.S. Attorney Bales.  “I only hope that others still involved in what is a nasty, brutally cruel exercise will observe the outcome of “Operation Crash” and immediately cease and desist their detestable practices.  I commend the excellent work by the agents and prosecutors.”

“The sentencing today of Ning Qiu is yet another successful prosecution resulting from Operation Crash and a further step in the global fight against wildlife trafficking and its dire consequences for rhinos, elephants and other wildlife,” said Director Ashe for USFWS.  “This case is a stark reminder of the role businesses and criminals based in the United States play in driving the current illegal slaughter of wildlife.  It also illustrates the consequences these criminals will inevitably face for their greed and indifference to its horrific result.”

Rhinoceros are a herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth.  They have no known predators other than humans.  All species of rhinoceros are protected under United States and international law.  Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), a treaty signed by over 175 countries around the world to protect fish, wildlife and plants that are or may become imperiled due to the demands of international markets.

Qiu admitted to meeting Li in 2009 through his work at the auction house in Dallas, Texas, and entering into a conspiracy with Li whereby Qiu traveled throughout the United States to purchase raw and carved rhinoceros horns and elephant ivory for Li, often receiving specific instructions from Li on which items to buy and how much to pay.  Upon purchasing the items, Li transferred funds directly into Qiu’s bank accounts in the United States and China.  After acquiring the items for Li, Qiu arranged for them to be smuggled to a location in Hong Kong, which was provided by Li.  In December 2013, another one of Li’s suppliers, Qiang Wang aka Jeffrey Wang was sentenced in the Southern District of New York to 37 months in prison.

As part of his plea, Li admitted that he sold raw rhinoceros horns worth approximately $3 million, approximately $17,500 per pound, to factories in China where raw rhinoceros horns are carved into fake antiques known as Zuo Jiu, which means “to make it as old” in Mandarin.  In China, there is a centuries-old tradition of drinking from an intricately carved “libation cup” made from a rhinoceros horn.  Owning or drinking from such a cup is believed by some to bring good health and true antiques are highly prized by collectors.  The escalating value of such items has resulted in an increased demand for rhinoceros horn that has helped fuel a thriving black market, including recently carved fake antiques.  The leftover pieces from the carving process were sold for alleged “medicinal” purposes even though rhino horn is made of compressed keratin, the same material in human hair and nails and has no proven medical efficacy.

Between 2009 and 2013, Qiu purchased and smuggled to Hong Kong at least five raw rhinoceros horns weighing at least 20 pounds.  Qiu smuggled the raw rhino horns by first wrapping them in duct tape, hiding them in porcelain vases and falsely describing them on customs and shipping documents, including by labeling them as porcelain vases or handicrafts. Qiu purchased several of the horns he smuggled to China from Elite Decorative Arts, an auction house located in Boynton Beach, Florida.  Elite Decorative Arts has entered a guilty plea in District Court in West Palm Beach, Florida, for its role in illegally trafficking and smuggling wildlife, including rhinoceros horns, elephant ivory and items made from coral.  Elite is scheduled to be sentenced on May 20, 2015.

The investigation is continuing and is being handled by the USFWS’s Office of Law Enforcement, the U.S. Attorney’s Office for the Eastern District of Texas and the Department of Justice’s Environmental Crimes Section.  The government is represented by Assistant U.S. Attorney James Noble and Trial Attorney Gary N. Donner of the Environmental Crimes Section of the Environment and Natural Resources Division.

Source: justice.gov

Washington DC--(ENEWSPF)--May 14, 2015.  Matthew Krapf, 45, of Collegeville, Pennsylvania, was sentenced today to life in prison for 10 counts, each, of using or inducing a child to pose for child pornography, use of an interstate commerce facility to entice a minor to engage in sexual contact, three counts of distribution of child pornography and one count of possession of child pornography.  He was also sentenced to 10 years supervised release.  Krapf pleaded guilty on Oct. 28, 2014, to all 24 counts.

Krapf met his victims online and directed the conversation to sexually explicit chats.  As early as December 2012, the defendant recorded Skype video chats, later recovered by police, that depicted the defendant directing one victim to masturbate for him.  In the months that followed, the defendant met the victim at his parent’s home and engaged in sexual conduct from their very first encounter.  A 13-year old victim met the defendant online and engaged in sexually explicit chats from the beginning of their communication, even after informing the defendant that he was just 13-years old.  The defendant videotaped his encounters and later distributed the videos over the Internet.

In October 2013, Montgomery County, Pennsylvania, detectives received consent to take over one victim’s identity and corresponded with the defendant on-line and via text messaging.  The defendant, believing that he was speaking with the 14-year old victim, made arrangements to meet him at his parents’ home on Nov. 2, 2013 to have sex again.  Krapf was arrested by Montgomery County detectives after he entered the victim’s house.

When agents seized his computers, cell phones and collection of DVDs and CDs, a forensic exam uncovered more than two million images of child pornography, including more than 100 videos that the defendant manufactured of the victim teenage boys.  Krapf’s collection is believed to be the largest ever seized in the Eastern District of Pennsylvania.

Krapf admitted to meeting one victim on at least eight occasions during the summer of 2013 and engaging in oral sex, anal sex and digital penetration.  He also admitted that he knew the victim was just 14-years old before he had any sex with him.  Krapf told police that during the time he was engaging in the sexual abuse of this boy, he directed him to have sex with other juvenile boys, record the sex and then send the recording to him and to take nude and sexually explicit photographs of himself.  Defendant Krapf also confirmed the July 2013 sexual abuse of the two minor boys, admitting that he engaged in oral and anal sex with these boys, knowing that they were minors and videotaped the encounter.  In his confession the defendant also admitted to sexually abusing at least four other underage boys.  His abuse of these boys was over a nine year period, dating back to 2005.

“This predator used the internet to identify and begin the process of sexually exploiting his numerous victims,” said U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania.  “He then took full advantage of his vulnerable victims through a series of horrific sexual assaults over several years.  His post-arrest admissions provide disturbing insight into the methods he used to entice his young victims for his criminal gratification.  The sentence handed down today is the only way to guarantee that he will never again victimize an innocent child.”

“The heinous crimes this pedophile committed are something his victims will have to deal with for the rest of their lives, but the community will now be safe from this menace,” said Special Agent in Charge John P. Kelleghan of Homeland Security Investigation (HSI) of Philadelphia.  “He will be spending his life in prison as a result of the excellent cooperative efforts of the Limerick, Pennsylvania Police Department, HSI, the Montgomery County District Attorney’s Office and the U.S. Attorney’s Office of the Eastern District of Pennsylvania.”

The case was investigated by HSI, the Montgomery County District Attorney’s Office and the Limerick Township Police Department, and is being prosecuted by Assistant U.S. Attorney Michelle Rotella of the Eastern District of Pennsylvania.

Source: whitehouse.gov

Washington, DC--(ENEWSPF)--May 15, 2015. Khalid al Fawwaz, 52, a citizen of Saudi Arabia, was sentenced today to life in prison for multiple terrorism offenses relating to his participation in al Qaeda’s conspiracy to kill Americans.

Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Preet Bharara of the Southern District of New York made the announcement.  U.S. District Court Judge Lewis A. Kaplan of the Southern District of New York imposed the sentence in a proceeding attended by victims of the 1998 bombings of the U.S. embassies in Nairobi, Kenya, and Dar es Salaam, Tanzania.  Fawwaz’s sentencing follows a six-week jury trial in January and February of this year, at which Fawwaz was convicted of all four counts with which he was charged. 

“Fawwaz is a terrorist who for years served Usama bin Laden and held many positions within al Qaeda,” said Assistant Attorney General Carlin.  “With this sentence, he is being held accountable for his role in al-Qaeda's conspiracy to kill U.S. nationals worldwide during the 1990s.  This case is a testament to our commitment to bringing to justice those who threaten the United States and our interests around in the world, no matter how long it may take.”

“Khalid al Fawwaz, who played a critical role for al Qaeda in its murderous conspiracy against America, will now spend the rest of his life in a federal prison,” said U.S. Attorney Bharara.  “As one of Osama bin Laden's original and most trusted lieutenants, Fawwaz led an al Qaeda training camp in Afghanistan and a terrorist cell in Kenya before serving as bin Laden’s media adviser in London.  Fawwaz was bin Laden's bridge to the West, facilitating interviews of bin Laden in Afghanistan by Western media and disseminating bin Laden's 1996 declaration of jihad against America and his 1998 fatwah directing followers to kill Americans anywhere in the world.  To that end, on Aug. 7, 1998, al Qaeda operatives bombed our embassies in Kenya and Tanzania, murdering 224 innocent people and wounding thousands more.  Fawwaz conspired with a murderous regime, and the result was a horrific toll of terror and death.  The price he will pay, appropriately severe as it is, cannot possibly compensate his victims and their families.”

According to the evidence presented at trial:

During the early 1990s, Fawwaz trained at al Qaeda’s Jawar military training camp in Afghanistan and then became the emir, or head, of al Qaeda’s al Siddiq military training camp in Afghanistan.  In approximately 1993, Fawwaz moved to Nairobi, where he served as one of the leaders of the al Qaeda members there, during a time that al Qaeda was sending fighters through Nairobi to Somalia to fight, and to train Somalis to fight, U.S. and U.N. forces in Somalia.  Fawwaz was also a leader of al Qaeda in Nairobi when al Qaeda began its preparations to attack the U.S. Embassy there.

The evidence further showed that, in 1994, Fawwaz began to act as Osama bin Laden’s media representative in London.  Fawwaz served as bin Laden’s conduit to Western media, screening requests for interviews of bin Laden and facilitating travel to Afghanistan for journalists who were permitted interviews.  Fawwaz also publicized bin Laden’s threats of violence against the United States.  Among other things, Fawwaz delivered bin Laden’s August 1996 Declaration of Jihad against the United States to a journalist for publication and helped arrange for the publication of a February 1998 fatwa, signed by bin Laden and others, that claimed it was the individual duty of every Muslim to kill Americans, civilian and military, in any country where it was possible to do so.  In addition, Fawwaz provided al Qaeda with advice about how best to disseminate its message of terror to the West, and helped obtain items that were difficult to obtain in Afghanistan, such as generators, vehicles and communications equipment, for al Qaeda.  In addition, a list of al Qaeda members recovered in Kandahar, Afghanistan, by the U.S. military in late 2001 contained Fawwaz’s alias and had him numbered ninth on the list.

Following Fawwaz’s arrest in England in September 1998, Fawwaz challenged his extradition to the United States for more than a decade.  He arrived in the Southern District of New York in October 2012.

* * *

Fawwaz’s sentencing follows convictions for conspiring to kill U.S. nationals, conspiring to murder officers and employees of the United States and conspiring to destroy buildings and property of the United States, each of which carried a maximum term of life in prison.  Fawwaz was also convicted of conspiring to attack national defense utilities, which carried a maximum term of 10 years in prison.

Assistant Attorney General Carlin joined U.S. Attorney Bharara in praising the outstanding efforts of the FBI’s New York Joint Terrorism Task Force – which principally consists of agents from the FBI and detectives from the New York City Police Department.  Carlin and Bharara also thanked the U.S. Marshals Service and the U.S. Department of Justice’s Office of International Affairs for their efforts, as well as the New Scotland Yard for its cooperation in the investigation and prosecution.

The case is being prosecuted by the Terrorism and International Narcotics Unit of the U.S. Attorney’s Office of the Southern District of New York.  The case was prosecuted by Assistant U.S. Attorneys Sean S. Buckley, Adam Fee, Nicholas J. Lewin and Stephen J. Ritchin of the Southern District of New York, with assistance from Trial Attorney Joseph N. Kaster of the National Security Division’s Counterterrorism Section.

Source: justice.gov

Washington, DC--(ENEWSPF)--May 15, 2015.  Three defendants were sentenced for their roles in an international child pornography web-based bulletin board that was targeted by state and federal investigators and prosecutors participating in Operation Moon Runner.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Michael W. Cotter of the District of Montana and Special Agent in Charge Mary Frances Rook of the FBI’s Salt Lake City Division made the announcement.

On May 14, 2015, Daniel Brown, 26, of Taylor, South Carolina, was sentenced to 180 months in prison after a jury convicted him of conspiracy to advertise child pornography.  On May 15, 2015, John Merchberger, 48, of Dayton, Maine, was sentenced to 220 months in prison and Marc Edoria, 24, of Elk Grove, California, was sentenced to 180 months in prison.  Chief U.S. District Judge Dana L. Christensen of the District of Montana imposed the sentence.

According to court documents, the board was created in September 2011 and specialized in the advertisement, distribution and receipt of child pornography.  The board was broken-up into subforums where members were required to post images that corresponded to specific child pornography studios or topics such as webcams or candid photographs.  The rules of the board required members to post images of minor females once every certain number of weeks.  Failure to post images within the required time period resulted in suspension from the board.  The board permitted members to leave comments and to request more images of child pornography from board members.

According to admissions made in connection to their guilty pleas, Merchberger assisted in running the board at various times, while Edoria was an advanced member of the board.  According to evidence presented at trial, Brown was also an advanced member of the board.  All three defendants posted notices and advertisements of child pornography on the board, along with images of children being sexually abused.

The investigation, referred to as Operation Moon Runner, is an ongoing cooperative effort between the Criminal Division’s Child Exploitation and Obscenity Section; FBI; Montana Department of Criminal Investigations; Helena, Montana, Police Department; Polson, Montana, Police Department; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Montana Internet Crimes Against Children Task Force and the Northumbria Police Department in the United Kingdom.

Trial Attorney Maureen C. Cain of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Cyndee L. Peterson of the District of Montana prosecuted the case.

This case was initiated under the Department of Justice’s Project Safe Childhood initiative which was launched in 2006 to combat the proliferation of technology-facilitated crimes involving the sexual exploitation of children.  Through a network of federal, state and local law enforcement agencies and advocacy organizations, Project Safe Childhood attempts to protect children by investigating and prosecuting offenders involved in child sexual exploitation.  It is implemented through partnerships including the Montana Internet Crimes Against Children (ICAC) Task Force.  The ICAC Task Force Program was created to assist state and local law enforcement agencies by enhancing their investigative response to technology facilitated crimes against children. 

Source: justice.gov

Washington, DC--(ENEWSPF)--May 18, 2015.  A German citizen was sentenced today to six years in prison for operating a web-based bulletin board for child pornography.

The sentence was announced by Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Postal Inspector in Charge Gary Barksdale of the U.S. Postal Inspection Service’s (USPIS) Washington, D.C., Division, Postal Inspector in Charge Robert Wemyss of the USPIS Los Angeles Division and Special Agent in Charge Claude Arnold of the U.S. Immigration and Customs Enforcement’s Office of Homeland Security Investigations (ICE-HSI) Los Angeles.

Klaus Von Der Heide, 51, of Berlin, pleaded guilty on July 15, 2014, in U.S. District Court for the District of Columbia to one count of conspiring to promote child pornography, one count of promoting child pornography and one count of transporting child pornography.

According to his plea agreement, from April 2011 through February 2014, Von Der Heide and others conspired to operate Cam-Foundation, a secure web-based bulletin board that traded images of child pornography, mostly in the form of self-produced webcam images.  Members could join this group only upon invitation and after approval by the group’s administrators, including Von Der Heide.  As of February 2014, 719 members belonged to Cam-Foundation, which was hosted on computer servers under Von Der Heide’s control and located in Germany.

Von Der Heide, as the lead administrator, maintained Cam-Foundation and controlled the design, creation and management of the site, and oversaw its day-to-day operations.  Von Der Heide published rules and guidelines regarding membership, posting and accessing images on the site and payment to belong to the site.  Von Der Heide solicited fees from Cam-Foundation members to be paid directly to him in order to cover the cost of a new cloud storage system that he controlled.  Von Der Heide encouraged Cam-Foundation members to meet him in person within the United States to personally hand him money for Cam-Foundation membership.  He traveled to the United States to collect the money and was arrested by federal law enforcement.

The case was investigated by the USPIS Washington, D.C., and Los Angeles Divisions and the HSI Los Angeles in collaboration with the HSI-led Orange County, California, Child Exploitation Task Force.  This case was prosecuted by Trial Attorney Jennifer Toritto Leonardo of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Trial Attorney Darcy Katzin of the Justice Department’s Office of the Inspector General. 

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice.  Led by U.S. Attorneys’ Offices and the CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims.  For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

Source: justice.gov

Washington, DC—(ENEWSPF)—May 18, 2015. Across Town Movers, a San Diego-based storage company, and its owner, Daniel E. Homan, have agreed to pay nearly $170,000 to resolve allegations by the Department of Justice that it unlawfully sold U.S. Navy service members’ stored goods.

The settlement resolves a lawsuit filed in March by the Department of Justice’s Civil Rights Division and the U.S. Attorneys’ Office for the Southern District of California.  The lawsuit alleged that Across Town Movers had a practice of selling active-duty service members’ storage lots without obtaining necessary court orders. 

The lawsuit was filed under the Servicemembers Civil Relief Act (SCRA), which protects the rights of service members while on active duty by suspending or modifying certain civil obligations.  Under the SCRA, a storage lien may not be enforced against service members during, or 90 days subsequent to, their period of military service without a court order. 

Among the aggrieved service members is Master Chief Petty Officer Thomas E. Ward, now retired, who will receive $150,000 as compensation for his auctioned personal property.  A long-time car enthusiast and 30-year veteran, Master Chief Ward placed his valuable car parts and many household items into storage when he was deployed overseas.  He entrusted Across Town Movers to keep his personal property safe until he returned to his home in San Diego.  Just before completing his final tour, Master Chief Ward learned that Across Town Movers had auctioned all of his stored personal property, including rare, vintage car parts, without providing any notice or obtaining a court order.  Moreover, Across Town Movers allegedly continued to collect payment of storage fees from the government after it sold Master Chief Ward’s goods.

“This settlement will not only provide relief to ten service members, but also will ensure that business practices change to better protect others,” said Acting Associate Attorney General Stuart F. Delery.  “I want to thank the United States Navy for referring this case to the Department of Justice.  I’m hopeful that through the department’s newly created Servicemembers and Veterans Initiative, we will continue to build on our strong ties with federal partners and protect the rights of all the brave men and women who serve in our Armed Forces.”

“We hope that this consent order will send a clear message to all storage companies that before they auction off anyone’s belongings, they should check the Defense Department’s military database and their own files to see if the customer is protected by the Servicemembers Civil Relief Act,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division.  “The Department of Justice is committed to protecting the rights of the men and women who serve in our Armed Forces, and we will continue to devote time and resources to make sure that they are given the legal protections they deserve.”

“Federal law protects our military service members and their dependents from businesses taking certain adverse actions against them,” said U.S. Attorney Laura E. Duffy of the Southern District of California.  “These protections permit service members to devote their full attention to defending the United States.  While Master Chief Ward was overseas focusing on defending our country, he understandably did not expect the very company paid to safeguard his valuable property to instead auction it off in his absence. Across Town Movers’ $150,000 payment provides Master Chief Ward the opportunity to repurchase his lost goods.”

Across Town Movers must also compensate other aggrieved service members for unlawfully auctioning their goods. 

Furthermore, as part of the settlement, a consent order has been entered that requires Across Town Movers to make systemic changes to its business practices, including developing new policies and procedures consistent with  the SCRA and providing SCRA training to its employees.  Across Town Movers is enjoined from engaging in future SCRA violations. 

A consent order incorporating the terms of this settlement was on Friday, May 14, 2015, in the Southern District of California.  This matter resulted from a referral to the Justice Department by the U.S. Navy.   

Service members and their dependents who believe that their SCRA rights have been violated should contact the nearest Armed Forces Legal Assistance Program office.  Office locations may be found at http://legalassistance.law.af.mil/content/locator.php.  Additional information on the Justice Department’s enforcement of the SCRA and other laws protecting service members is available at www.servicemembers.gov.

This matter is being handled by an attorney from the Civil Rights Division’s Housing and Civil Enforcement Section and Assistant U.S. Attorneys Dylan M. Aste and Leslie M. Gardner of the Southern District of California. 

Related Material:

Download Across Town Movers Consent Order (201.67 KB)

Source: justice.gov