Washington, DC--(ENEWSPF)--May 18, 2015.  Fourteen persons have been charged in connection with an alleged wide-ranging criminal conspiracy to violate airport security requirements and transport drugs throughout the country announced U.S. Attorney Melinda Haag of the Northern District of California, Special Agent in Charge José M. Martinez of the Internal Revenue Service-Criminal Investigation’s (IRS-CI) for the Northern District of California and Special Agent in Charge David J. Johnson Federal Bureau of Investigation (FBI).  The case highlights the government’s determination to address security concerns in and around the nation’s airports.

In a criminal complaint partially unsealed today, the co-conspirators were described as a drug trafficking organization determined to use the special access some of them had been granted as baggage handlers at the Oakland International Airport to circumvent the security measures in place at the airport.  As alleged in the complaint, the baggage handlers entered the Air Operations Area (AOA) of the Oakland Airport while in possession of baggage containing marijuana.  The AOA is an area of the airport that is accessible to employees but not to passengers who have completed security screening through a Transportation Security Administration (TSA) checkpoint.  The baggage handlers were not required to pass through a TSA security screening checkpoint to enter the AOA.  The baggage handlers then used their security badges to open a secure door that separates the AOA from the sterile passenger terminal where outbound passengers, who have already passed through the TSA security and screening checkpoint, wait to board their flights.  The baggage handlers then gave the baggage containing drugs to passengers who then transported the drugs in carry-on luggage on their outbound flights.  After arriving in a destination city, the drugs were distributed and sold. 

According to the complaint, the conspiracy was operating as early as July 2012.  Baggage handlers Kenneth Wayne Fleming, 32, of San Leandro, California; Keith Ramon Mayfield, 34, of Oakland, California; and Michael Herb Videau, 28, of Oakland, California, are accused of using their security badges to cross security barriers while carrying unscreened baggage filled with packages of marijuana.  They would then hand off the baggage to co-conspirators, including Major Alexander Session III, 24, of Oakland, California; Clyde Barry Jamerson, 41, of Oakland, California; Kameron Kordero Eldridge Davis, 26, of Dublin, California; Ronnell Lamar Molton, 34, of Oakland, California; Francisco Manuel Carrasco, 29, of Hayward, California; Sophia Cherise West, 44, of Castro Valley, California; and others, who then would board outbound aircraft and bring the drugs to destinations throughout the country.  Proceeds from the sale of the marijuana eventually were deposited into accounts controlled by defendants Ahshatae Marie Millhouse, 27, of Oakland, California; Laticia Ann Morris, 40, of Little Rock, Arkansas; Donald Ray Holland II, 42, of Discovery Bay, California; and others.  Additionally, Mayfield used his privileges as an airline employee to ship drugs as cargo and have co-conspirators such as Brandon Jarred Davillier, 27, of Slidell, Louisiana, receive them for distribution.  The defendants have been charged in a complaint with conspiracy to distribute, and possess with intent to distribute, 100 kilograms or more of marijuana, in violation of 21 U.S.C. § 846.

Nine defendants were taken into custody in arrests coordinated throughout the San Francisco Bay Area and Arkansas.  Eight defendants made their initial appearances this morning before the Honorable U.S. Magistrate Judge Kandis A. Westmore, in Oakland, California.  The defendants’ next appearances are scheduled as follows: defendants Holland, Fleming, Baker, Session, Davis and West are scheduled to appear tomorrow morning for a hearing at which they may be appointed counsel.  Defendants Mayfield and Videau are scheduled to appear on May 21, 2015, for detention hearings.  Defendant Morris made her initial appearance in Little Rock, Arkansas, and was released on bond.  Defendants Jamerson and Molton are currently serving state prison sentences in Arkansas and Louisiana, respectively, for possession with intent to distribute marijuana.  Defendants Davillier, Millhouse and Carrasco are presently fugitives. 

The maximum penalty for conspiracy to distribute and possess with intent to distribute marijuana is 40 years imprisonment and $5 million.  The offense carries a mandatory minimum sentence of five years imprisonment. 

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.

A complaint merely alleges that crimes have been committed and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.  

Assistant U.S. Attorney Garth Hire is prosecuting the case with the assistance of Melissa Dorton, Michelle Alter, Kathleen Turner and Vanessa Vargas.  This case is the product of an extensive investigation by the Organized Crime Drug Enforcement Task Force, a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies.

Source: justice.gov

Washington, DC--(ENEWSPF)--May 19, 2015.  United Parcel Service Inc. (UPS) has agreed to pay $25 million to resolve allegations that it submitted false claims to the federal government in connection with its delivery of Next Day Air overnight packages, the Justice Department announced today.  UPS is a package delivery company based in Atlanta.

“Protecting the federal procurement process from false claims is central to the mission of the Department of Justice,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “We will continue to ensure that when federal monies are used to purchase commercial services the government receives the prices and services to which it is entitled.”

“This conduct affected numerous federal agencies,” said U.S. Attorney Dana J. Boente of the Eastern District of Virginia.  “We place high importance on the integrity of companies that provide services to the government.  Combating all manners of fraud on the government is a high priority in the Eastern District of Virginia.” 

UPS provides delivery services to hundreds of federal agencies through contracts with the U.S. General Services Administration (GSA) and U.S. Transportation Command, which provides support to Department of Defense agencies.  Under these contracts, UPS guaranteed delivery of packages by certain specified times the following day.  The settlement announced today resolves allegations that from 2004 to 2014, UPS engaged in practices that concealed its failure to comply with its delivery guarantees, thereby depriving federal customers of the ability to request refunds for the late delivery of packages.  In particular, the government alleged that UPS knowingly recorded inaccurate delivery times on packages to make it appear that the packages were delivered on time, applied inapplicable “exception codes” to excuse late delivery  (such as “security delay,” “customer not in,” or “business closed”), and provided inaccurate “on-time” performance data under the federal contracts.  

“The United States should get what it pays for, nothing less,” said Acting Inspector General Robert C. Erickson of the GSA.

The civil settlement resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery.  The civil lawsuit was filed in the Eastern District of Virginia by Robert K. Fulk, a former employee of UPS, who will receive $3.75 million.

The resolution in this matter was the result of a coordinated effort between the U.S. Attorney’s Office of the Eastern District of Virginia, the GSA Office of Inspector General (OIG), the Federal Deposit Insurance Corporation OIG, the Defense Criminal Investigative Service, and the Treasury Inspector General for Tax Administration and the Department of Treasury OIG, with assistance from the Department of Veterans Affairs OIG.

The lawsuit is captioned United States ex rel. Fulk v. United Parcel Service, Inc., et al., No. 1:11cv890 (E.D. Va.).  The claims resolved by this settlement are allegations only, and there has been no determination of liability. 

Source: justice.gov

Chinese Professors Alleged to Have Stolen Valuable Technology from Avago Technologies and Skyworks Solutions to Benefit a PRC University

Washington, DC--(ENEWSPF)--May 19, 2015.  On May 16, 2015, Tianjin University Professor Hao Zhang was arrested upon entry into the United States from the People’s Republic of China (PRC) in connection with a recent superseding indictment in the Northern District of California, announced Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Melinda Haag of the Northern District of California and Special Agent in Charge David J. Johnson of the FBI’s San Francisco Division.

The 32-count indictment, which had previously been sealed, charges a total of six individuals with economic espionage and theft of trade secrets for their roles in a long-running effort to obtain U.S. trade secrets for the benefit of universities and companies controlled by the PRC government.

“According to the charges in the indictment, the defendants leveraged their access to and knowledge of sensitive U.S. technologies to illegally obtain and share U.S. trade secrets with the PRC for economic advantage,” said Assistant Attorney General Carlin.  “Economic espionage imposes great costs on American businesses, weakens the global marketplace and ultimately harms U.S. interests worldwide.  The National Security Division will continue to relentlessly identify, pursue and prosecute offenders wherever the evidence leads.  I would like to thank all the agents, analysts and prosecutors who are responsible for this indictment.”

“As today’s case demonstrates, sensitive technology developed by U.S. companies in Silicon Valley and throughout California continues to be vulnerable to coordinated and complex efforts sponsored by foreign governments to steal that technology,” said U.S. Attorney Haag.  “Combating economic espionage and trade secret theft remains one of the top priorities of this Office.”

“The conduct alleged in this superseding indictment reveals a methodical and relentless effort by foreign interests to obtain and exploit sensitive and valuable U.S. technology through the use of individuals operating within the United States,” said Special Agent in Charge Johnson.  “Complex foreign-government sponsored schemes, such as the activity identified here, inflict irreversible damage to the economy of the United States and undercut our national security.  The FBI is committed to rooting out industrial espionage that puts U.S. companies at a disadvantage in the global market.”

According to the indictment, PRC nationals Wei Pang and Hao Zhang met at a U.S. university in Southern California during their doctoral studies in electrical engineering.  While there, Pang and Zhang conducted research and development on thin-film bulk acoustic resonator (FBAR) technology under funding from U.S. Defense Advanced Research Projects Agency (DARPA).  After earning their doctorate in approximately 2005, Pang accepted employment as an FBAR engineer with Avago Technologies (Avago) in Colorado and Zhang accepted employment as an FBAR engineer with Skyworks Solutions Inc. (Skyworks) in Massachusetts.  The stolen trade secrets alleged in the indictment belong to Avago or Skyworks.

Avago is a designer, developer and global supplier of FBAR technology, which is a specific type of radio frequency (RF) filter.  Throughout Zhang’s employment, Skyworks was also a designer and developer of FBAR technology.  FBAR technology is primarily used in mobile devices like cellular telephones, tablets and GPS devices.  FBAR technology filters incoming and outgoing wireless signals so that a user only receives and transmits the specific communications intended by the user.  Apart from consumer applications, FBAR technology has numerous applications for a variety of military and defense communications technologies.

According to the indictment, in 2006 and 2007, Pang, Zhang and other co-conspirators prepared a business plan and began soliciting PRC universities and others, seeking opportunities to start manufacturing FBAR technology in China.  Through efforts outlined in the superseding indictment, Pang, Zhang and others established relationships with officials from Tianjin University.  Tianjin University is a leading PRC Ministry of Education University located in the PRC and one of the oldest universities in China.

As set forth in the indictment, in 2008, officials from Tianjin University flew to San Jose, California, to meet with Pang, Zhang and other co-conspirators.  Shortly thereafter, Tianjin University agreed to support Pang, Zhang and others in establishing an FBAR fabrication facility in the PRC.  Pang and Zhang continued to work for Avago and Skyworks in close coordination with Tianjin University.  In mid-2009, both Pang and Zhang simultaneously resigned from the U.S. companies and accepted positions as full professors at Tianjin University.  Tianjin University later formed a joint venture with Pang, Zhang and others under the company name ROFS Microsystem intending to mass produce FBARs.

The indictment alleges that Pang, Zhang and other co-conspirators stole recipes, source code, specifications, presentations, design layouts and other documents marked as confidential and proprietary from the victim companies and shared the information with one another and with individuals working for Tianjin University.

According to the indictment, the stolen trade secrets enabled Tianjin University to construct and equip a state-of-the-art FBAR fabrication facility, to open ROFS Microsystems, a joint venture located in PRC state-sponsored Tianjin Economic Development Area (TEDA), and to obtain contracts for providing FBARs to commercial and military entities.

The six indicted defendants include:

Hao Zhang, 36, a citizen of the PRC, is a former Skyworks employee and a full professor at Tianjin University.  Zhang is charged with conspiracy to commit economic espionage, conspiracy to commit theft of trade secrets, economic espionage and theft of trade secrets.  Zhang was arrested upon entry into the United States on May 16, 2015.

Wei Pang, 35, a citizen of the PRC, is a former Avago employee and a full professor at Tianjin University.  Pang is charged with conspiracy to commit economic espionage, conspiracy to commit theft of trade secrets, economic espionage and theft of trade secrets.

Jinping Chen, 41, a citizen of the PRC, is a professor at Tianjin University and a member of the board of directors for ROFS Microsystems.  Chen is charged with conspiracy to commit economic espionage and conspiracy to commit theft of trade secrets.

Huisui Zhang (Huisui), 34, a citizen of the PRC, studied with Pang and Zhang at a U.S. university in Southern California and received a Master’s Degree in Electrical Engineering in 2006.  Huisui is charged with conspiracy to commit economic espionage and conspiracy to commit theft of trade secrets.

Chong Zhou, 26, a citizen of the PRC, is a Tianjin University graduate student and a design engineer at ROFS Microsystem.  Zhou studied under Pang and Zhang, and is charged with conspiracy to commit economic espionage, conspiracy to commit theft of trade secrets, economic espionage and theft of trade secrets.

Zhao Gang, 39, a citizen of the PRC, is the General Manager of ROFS Microsystems.  Gang is charged with conspiracy to commit economic espionage and conspiracy to commit theft of trade secrets.

The maximum statutory penalty for each of the charges alleged in the superseding indictment is as follows:

Count One: conspiracy to commit economic espionage: 15 years imprisonment; $500,000 fine or twice the gross gain/loss; three years’ supervised release; and $100 special assessment. 

Count Two: conspiracy to commit theft of trade secrets: 10 years imprisonment; $250,000 fine or twice the gross gain/loss; three years’ supervised release; and $100 special assessment. 

Counts Three Through Seventeen: economic espionage; aiding and abetting: 15 years imprisonment; $500,000 fine or twice the gross gain/loss; three years’ supervised release; and $100 special assessment. 

Counts Eighteen Through Thirty-Two: theft of trade secrets; aiding and abetting: 10 years imprisonment; $250,000 fine or twice the gross gain/loss; three years’ supervised release; and $100 special assessment. 

Zhang was arrested on May 16, 2015, upon landing at the Los Angeles International Airport on a flight from the PRC.  He made his initial appearance yesterday afternoon in Los Angeles before the U.S. Magistrate Judge Alicia G. Rosenberg of the Central District of California, who ordered the defendant transported in custody to San Jose for further proceedings.  His next scheduled appearance will be before the U.S. District Judge Edward J. Davila of the Northern District of California, at a date to be determined.

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

The investigation is being conducted by the FBI’s Palo Alto Resident Agency/San Francisco Division.  The case is being prosecuted by Assistant U.S. Attorneys Matt Parrella and Dave Callaway of the Northern District of California, and the National Security Division’s Counterespionage Section.

Related Material:

Zhang Superseding Indictment

Source: justice.gov

Washington, DC--(ENEWSPF)--May 19, 2015. The Department of Justice and the Environmental Protection Agency (EPA) announced a settlement with Marathon Petroleum Corporation today that resolves various alleged Clean Air Act violations at ten Marathon facilities and requires Marathon to take steps to reduce harmful air pollution emissions at facilities in three states.  The Department of Justice and EPA allege that Marathon failed to comply with certain Clean Air Act fuel quality emissions standards and recordkeeping, sampling and testing requirements. These violations may have resulted in excess emissions of air pollutants from motor vehicles, which can pose threats to public health and the environment.  Marathon self-reported many of these issues to EPA.

Under a consent decree lodged in U.S. District Court for the Northern District of Ohio, Marathon will spend over $2.8 million on pollution controls to reduce emissions of volatile organic compounds on 14 fuel storage tanks at its distribution terminals in Indiana, Kentucky and Ohio.

Marathon will also pay a $2.9 million civil penalty and retire 5.5 billion sulfur credits, which have a current market value of $200,000.  Sulfur credits are generated when a refiner produces gasoline that contains less sulfur than the federal sulfur standard.  These credits can be sold to other refiners that may be unable to meet the standard.

“The changes required by this settlement will positively impact air quality in communities across the Midwest,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division.  “All Americans deserve to enjoy the benefits of clean air, land, and water.  These benefits spring from our nation’s bedrock environmental laws and we will use them vigorously in the pursuit of environmental justice.”

“Fuel standards established under the Clean Air Act play a major role in controlling harmful air pollution from vehicles and engines,” said Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance.  “If unchecked, these pollutants can seriously impair the air we breathe, especially during summer months when they can reach higher levels.  This settlement incorporates innovative pollution control solutions to reduce air pollution in overburdened communities.

“This agreement will help reduce air pollution emissions in Ohio and elsewhere,” said U.S. Attorney Steven M. Dettelbach for the Northern District of Ohio.  “We’re pleased this settlement will protect the air we breathe while promoting the use of next-generation technology.”

In their complaint, The Justice Department and EPA allege that Marathon:

Produced about 356 million gallons of reformulated gasoline at its Texas City, Texas, refinery during 2007 that did not meet Clean Air Act standards for reducing volatile organic compounds. Volatile organic compounds are one of the primary constituents of smog and react in sunlight to form ground-level ozone. Breathing ozone can trigger a variety of health problems including chest pain, coughing, throat irritation and congestion and can worsen bronchitis, emphysema and asthma. Children, the elderly and people who have lung diseases such as asthma are particularly prone to these problems.

Produced more than 40 million gallons of gasoline at the Texas City, Texas, refinery in 2009 that exceeded standards for sulfur levels. The goal of the Clean Air Act program that regulates sulfur in gasoline is to minimize emissions from vehicles and to ensure emissions control systems function effectively.

Sold about 12 million gallons of gasoline that contained elevated levels of ethanol.

Sold about 1 million gallons of gasoline at its Tampa, Florida, terminal in 2013 that exceeded standards for volatility, known as the Reid Vapor Pressure, that help control ground level ozone during summer months. Gasoline with higher volatility results in increased emissions of volatile organic compounds, which contribute to the formation of ground level ozone.

Failed to comply with numerous sampling, testing, recordkeeping and reporting requirements for fuel production. EPA discovered these violations during inspections of Marathon refineries and laboratories in 2008 and 2009. The sampling, testing, recordkeeping and reporting requirements of the fuels program provide the foundation for EPA’s compliance program.

Marathon will also install geodesic domes, fixed roofs, or secondary rim seals and deck fittings on 14 fuel storage tanks at several of its fuel distribution terminals in order to reduce emissions of volatile organic compounds. Marathon is also required to use innovative pollutant detection technology during the implementation of the environmental mitigation projects.  Marathon will use an infrared gas-imaging camera to inspect the fuel storage tanks in order to identify potential defects that may cause excessive emissions.  If defects are found, Marathon will conduct up-close inspections and perform repairs where necessary.

EPA’s Next Generation Compliance Strategy promotes advanced emissions and pollutant detection technology so that regulated entities, the government and the public can more easily see pollutant discharges, environmental conditions and noncompliance.  Many of the facilities where the pollution controls will be installed are located in areas that may present environmental justice concerns.

More information about EPA’s Next Generation Compliance Strategy is available at: http://www2.epa.gov/compliance/next-generation-compliance.

The proposed consent decree is subject to a 30 day public comment period and is available on EPA’s website at http://www.justice.gov/enrd/consent-decrees.

Source: justice.gov

Washington, DC—(ENEWSPF)—May 20, 2015. ConAgra Grocery Products LLC, a subsidiary of ConAgra Foods Inc., today agreed to plead guilty and pay $11.2 million in connection with the shipment of contaminated peanut butter linked to a 2006 through 2007 nationwide outbreak of salmonellosis, or salmonella poisoning, the Department of Justice announced today.  ConAgra Grocery Products LLC is based in Omaha, Nebraska, with a manufacturing facility in Sylvester, Georgia.

Acting Associate Attorney General Stuart F. Delery, Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division and U.S. Attorney Michael J. Moore of the Middle District of Georgia announced the filing of a criminal information against ConAgra Grocery Products alleging a misdemeanor violation of the federal Food, Drug and Cosmetic Act.  The company signed a plea agreement admitting that it introduced Peter Pan and private label peanut butter contaminated with salmonella into interstate commerce during the 2006 through 2007 outbreak.  The plea agreement provides that ConAgra Grocery Products will pay a criminal fine of $8 million and forfeit assets of $3.2 million.  The criminal fine is the largest ever paid in a food safety case. 

“Asparents, we can make sure that our kids look both ways before they cross the street and wear a helmet when they ride their bikes,” said Acting Associate Attorney General Delery.  “But we have to rely on the companies that make their food to make sure it is safe.  That’s why the Department of Justice is dedicated to using all the tools we have to ensure the processors and handlers of our food live up to their legal obligations to keep the public’s safety in mind.”

“The safety of the nation’s food supply is a top concern, and every company, large and small, must take appropriate measures to ensure that their products don’t make customers sick,” said Principal Deputy Assistant Attorney General Mizer.  “No company can let down its guard when it comes to these kinds of microbiological contaminants.  Salmonellosis is a serious condition, and a food like peanut butter can deliver it straight to children and other vulnerable populations.”

In February 2007, the U.S. Food and Drug Administration (FDA) and the Centers for Disease Control and Prevention (CDC) announced that an ongoing outbreak of salmonellosis cases in the United States could be traced to Peter Pan and private label peanut butter produced and shipped from the company’s Sylvester peanut butter plant.  The company voluntarily terminated production at the plant on Feb. 14, 2007, and recalled all peanut butter manufactured there since January 2004.  The CDC eventually identified more than 700 cases of salmonellosis linked to the outbreak with illness onset dates beginning in August 2006.  The CDC estimated that thousands of additional related cases went unreported.  The CDC did not identify any deaths related to the outbreak. 

The criminal information, filed in the Middle District of Georgia, specifically alleges that on or about Dec. 7, 2006, the company shipped from Georgia to Texas peanut butter that was adulterated, in that it contained salmonella and had been prepared under conditions whereby it may have become contaminated with salmonella.  The company admitted in the plea agreement that samples obtained after the recall showed that peanut butter made at the Sylvester plant on nine different dates between Aug. 4, 2006, and Jan. 29, 2007, was contaminated with salmonella.  Environmental testing conducted after the recall identified the same strain of salmonella in at least nine locations throughout the Sylvester plant. 

“We, as consumers, take for granted that the food we feed our families is safe,” said U.S. Attorney Moore.  “We count on the companies who prepare and package the things we eat to be just as concerned with the product we put in our mouths as they are with the profit they put in their pockets.  The proposed criminal fine and sentence in this case should sound the alarm to food companies across the country – we are watching, and we are expecting you to hold yourselves to a standard reflective of the trust that your consumers have placed in you.  No more excuses.  A lot of people got very sick because of the conduct in this case and we are committed to doing all we can to make sure that does not happen again.”

As part of the plea agreement, the company admitted that it had previously been aware of some risk of salmonella contamination in peanut butter.  On two dates in October 2004, routine testing at the Sylvester plant revealed what later was confirmed to be salmonella in samples of finished peanut butter.  Company employees attempting to locate the cause of the contamination identified several potential contributing factors, including an old peanut roaster that was not uniformly heating raw peanuts, a storm-damaged sugar silo, and a leaky roof that allowed moisture into the plant and airflow that could allow potential contaminants to move around the plant.  As stated in the plea agreement, while efforts to address some of these issues had occurred or were underway, the company did not fully correct these conditions until after the 2006 through 2007 outbreak.  In public statements after the 2007 recall, company officials hypothesized that moisture entered the production process and enabled the growth of salmonella present in the raw peanuts or peanut dust.

The company also admitted in the plea agreement that between October 2004 and February 2007, employees charged with analyzing finished product tests at the Sylvester plant failed to detect salmonella in the peanut butter, and that the company was unaware some of the employees did not know how to properly interpret the results of the tests.

“U.S. consumers expect and deserve the highest standards of food safety and integrity,” said Acting Commissioner Dr. Stephen Ostroff of the FDA.  “Today’s plea agreement reflects the FDA’s commitment to ensuring the safety of the nation’s food supply and demonstrates that those who risk the health of Americans will be held accountable.”

Following the outbreak and shutdown, the company made significant upgrades to the Sylvester plant to address conditions the company identified after the 2004 incident as potential factors that could contribute to salmonella contamination.  The company also instituted new and enhanced safety protocols and procedures regarding manufacturing, testing and sanitation, which it affirmed in the plea agreement it would continue to follow.

Information about the case and any upcoming court hearings can be found on the Justice Department’s website in the “Food and Dietary Supplements” section.  The case is being prosecuted by the U.S. Attorney’s Office of the Middle District of Georgia and the Civil Division’s Consumer Protection Branch.  This matter was investigated by the FDA’s Office of Criminal Investigations.

The proposed plea agreement and recommended sentence is not final until accepted by the U.S. District Court.

Related Material:

Download ConAgra Plea Agreement (2.25 MB)

Download ConAgra Information (476.17 KB)

Source: justice.gov

Washington, DC--(ENEWSPF)--May 20, 2015.  Seventy-one people have been charged in connection with a long-running, coordinated federal, state and local investigation into the New Jersey set of the Grape Street Crips, a street gang allegedly responsible for violence and wide-spread drug trafficking in the northern New Jersey, announced U.S. Attorney Paul J. Fishman of the District of New Jersey.

Today’s charges and arrests culminate three waves of arrests that started May 6, 2015, and resulted in 14 federal complaints charging 50 members and associates of the Grape Street Crips in that two-week span.  These 50 defendants and their associates, along with another 21 defendants arrested previously and facing federal and state charges, actively controlled drug trafficking and other illegal activities in various neighborhoods and public-housing complexes in Newark, New Jersey.

The charges are the result of a long-running investigation led by the Drug Enforcement Administration (DEA) and the FBI, in conjunction with the Essex County Prosecutor’s Office, the Newark Police Department and Essex County Sheriff’s Office Bureau of Narcotics.  The defendants arrested today are scheduled to appear this afternoon before U.S. Magistrate Judges Steven C. Mannion, Mark Falk and James B. Clark III in federal court in Newark.

“As this investigation demonstrates, the New Jersey Grape Street Crips are allegedly one of the largest and most dangerous street gangs in Newark as well as a prolific narcotics trafficking organization that floods the streets New Jersey with heroin, cocaine and crack cocaine,” said U.S. Attorney Fishman.  “The narcotics activities that the gang and its associates allegedly engage in directly affect the quality of life of law-abiding citizens who reside in cities and suburbs of northern New Jersey.”

“This criminal gang used violence and intimidation to maintain their drug enterprise in Newark,” said Special Agent in Charge Carl J. Kotowski of the DEA’s New Jersey Division.  “The residents of Newark can be assured that the DEA will continue to pursue those people and organizations that cause them to live in fear.”

“Gangs are the mechanism by which drugs are transmitted to the ‘bad seeds’ in our cities, and are at the root of the violent crime problem,” said Assistant Special Agent in Charge Bradley W. Cohen of the FBI’s Newark Division.  “The FBI Newark Field Office is committed to making Newark and its surrounding communities, a safe place to be.  The most effective way to combat this epidemic of violence is through cooperation; the efforts of all law enforcement agencies with the support and understanding of the citizens to whom we protect and serve.” 

In addition to controlling drug trafficking across large swaths of Newark, the Grape Street Crips routinely engaged in acts of violence — including murder, shootings, aggravated assaults and witness intimidation.  A federal grand jury has returned a second superseding indictment charging two of the defendants – Kwasi Mack also known as Welchs, 26, of Belleville, New Jersey, and Corey Batts, also known as C-Murder and Cee, 30, of Newark, two leaders of the Grape Street Crips – with numerous violent crimes in aid of racketeering, including attempted murder and conspiracy to commit murder.  Batts and other gang members controlled drug trafficking and other criminal activities near the Oscar Miles public-housing complex located on Court Street.  Batts is charged by complaint with plotting to murder one of the FBI special agents investigating the gang.

According to documents filed in this case and statements made in court, the Grape Street Crips are a nationwide street gang, founded in Los Angeles and operating in New Jersey.  In addition to engaging in drug trafficking and other criminal activities to enrich themselves and fellow gang members, the rules governing the gang provide that members must retaliate against individuals who cooperate with law enforcement.  As a result, gang members routinely engage in acts of intimidation and violence against witnesses, individuals who are believed to be cooperating with law enforcement and law enforcement officers themselves.

In March 2015, during the lawful wiretap of a cell phone used by Ahmed Singleton, 25, also known as Gangsta-Mu and Mooshie, a member of the Grape Street Crips, the DEA intercepted Singleton detailing his efforts to intimidate a witness against him.  Singleton was facing trial for aggravated assault in connection with a shooting.  Singleton bragged about how he had “beat trial” by intimidating the main witness against him, saying he “had the goons in the back seat so, so he [the witness] recognized all the goons…lined up in the back, like, ‘Oh he got them goons in here, like,’ word up.”  As a result, Singleton explained, the witness “ain’t wanna look at nobody eyes, you heard son?”  Singleton also said that the attorney for the witness had told Singleton and Singleton’s attorney that the witness would “do the right thing,” meaning refuse to testify against Singleton, so that Singleton would not “take that [expletive] shit off when he come home for telling.”  Singleton went on to brag, “I walked out of court free, [expletive], who you know do that?...Who you know cause ruckus on these [expletive] streets, come home, do whatever the [expletive] they want, and still be out here son?”  As a result of Singleton’s witness intimidation, the state charges against Singleton had to be dismissed.

In late 2013, a senior member of the New Jersey Grape Street Crips used a social media account to identify an individual as having previously cooperated with a murder investigation conducted by the Essex County Prosecutor’s Office.  Several days after that social media post, several members of the Grape Street Crips repeatedly shot and nearly killed the individual who had been identified as having cooperated.

In late 2013, following the arrest of numerous gang members, law enforcement officials learned that members of the Grape Street Crips on the street had directed those members of the enterprise who were incarcerated at a county correctional facility to physically harm an individual who was believed to have cooperated with the law enforcement investigation.

On Oct. 2, 2014, a federal grand jury returned an 18-count second superseding indictment charging Mack and Batts with a variety of violent crimes in aid of racketeering, including attempted murder, conspiracy to commit murder, aggravated assault with a deadly weapon, conspiracy to commit aggravated assault with a deadly weapon — multiple counts of using firearms in furtherance of drug trafficking crimes and crimes of violence, conspiracy to distribute heroin and possessing firearms after previously having been convicted of felony offenses.

The attempted murder charges stem from a dispute between the leadership of the Grape Street Crips and a long-time rival of the enterprise.

Batts was charged by federal criminal complaint with plotting to kill an FBI special agent and with solicitation of a crime of violence against the special agent.  Batts was attempting to smuggle images of the special agent — obtained from the pretrial discovery turned over to Batts in connection with the above charges — to another gang member in order to kill the special agent.

To protect their gang and drug territory, the Grape Street Crips operating in the Sixth Avenue and North Fifth Street area of Newark used “community guns” that were easily accessible to gang members.  DEA special agents seized numerous firearms, including a .410 caliber assault rifle, a.45 caliber Thompson semi-automatic carbine, a 7.62 caliber assault rifle and numerous semi-automatic handguns.

U.S. Attorney Fishman credited special agents of the DEA, under the direction of Special Agent in Charge Kotowski, and special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, for the investigation leading to the charges.  U.S. Attorney Fishman also thanked prosecutors and detectives of the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray, police officers and detectives of the Newark Police Department, under the direction of Director Eugene Venable and Chief Anthony Campos, and the Essex County Sheriff’s Office, under the direction of Armando B. Fontoura, for their work on the investigation.

The government is represented by Assistant U.S. Attorneys Osmar J. Benvenuto, Elizabeth M. Harris, Jose Almonte and Barry Kamar of the District of New Jersey’s Criminal Division in Newark.

The case against Batts for plotting to murder and soliciting a crime of violence against a special agent of the FBI is being handled by Assistant U.S. Attorney Dennis Carletta and Chief Zach Intrater of the Criminal Division’s General Crimes Unit.

This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF) and the FBI’s Safe Streets Task Force, a partnership between federal, state and local law enforcement agencies.  The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations and those primarily responsible for the nation’s illegal drug supply.

The charges and allegations contained in the federal criminal complaints and indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.

Source: justice.gov

Washington, DC--(ENEWSPF)--May 21, 2015. A sergeant with the U.S. Army was sentenced today to 51 months in prison for accepting bribes from Afghan truck drivers at Forward Operating Base (FOB) Gardez in Afghanistan, in exchange for allowing the drivers to take thousands of gallons of fuel from the base for resale on the black market, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Michael J. Moore of the Middle District of Georgia.

James Edward Norris, 41, of Fort Irwin, California, was sentenced by Chief U.S. District Judge Clay D. Land of the Middle District of Georgia, who also ordered Norris to pay $176,100 in restitution and to forfeit two vehicles he purchased with money from the bribery scheme and $70,000 in cash that he received from the scheme.

In connection with his guilty plea, Norris admitted that he conspired with other soldiers stationed at FOB Gardez to solicit and accept approximately $2,000 per day from local Afghan truck drivers in exchange for permitting the truck drivers to take thousands of gallons of fuel from the base.  Norris admitted that he was personally paid a total of $100,000 over the course of the conspiracy.

Norris and the other soldiers shipped the bribe proceeds back to the United States in tough boxes.  Norris admitted that, after returning from deployment, he purchased a 2008 Cadillac Escalade with $31,000 cash derived from the bribery scheme and a custom built 2014 Hardcore Choppers motorcycle with approximately $30,000 in proceeds from the scheme.

Seneca Hampton, another U.S. Army sergeant, pleaded guilty for his role in the scheme on Feb. 10, 2015, and is scheduled to be sentenced on July 28, 2015.  Anthony Tran, a former U.S. Army specialist, was indicted on March 10, 2015, for his alleged role in the scheme and remains pending trial.  The charges contained in an indictment are merely accusations, and a defendant is presumed innocent unless and until proven guilty.

The case is being investigated by the U.S. Army Criminal Investigation Command, the Office of the Special Inspector General for Afghanistan Reconstruction, the Defense Criminal Investigative Service and the Defense Contract Audit Agency’s Investigative Support Division.  The case is being prosecuted by Trial Attorney John Keller of the Criminal Division’s Public Integrity Section. 

Source: justice.gov

Washington, DC--(ENEWSPF)--May 21, 2015. The former assistant administrator of Riverside General Hospital was sentenced today to 40 years in prison for his role in a $116 million Medicare fraud scheme.  To date, 10 individuals have pleaded guilty or been convicted for their involvement in the scheme.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas made the announcement.

Mohammad Khan, 65, of Houston, the assistant administrator who oversaw many of the partial hospitalization programs (PHPs) at Riverside General Hospital, pleaded guilty in February 2012 to conspiracy to commit health care fraud, conspiracy to pay and receive kickbacks and paying illegal kickbacks.  He was sentenced by U.S. District Court Judge Sim Lake of the Southern District of Texas.  He was also ordered to pay restitution in the amount of $31,321,200.

According to admissions made in connection with his guilty plea, from January 2008 through February 2012, Khan and others at Riverside General Hospital operated a scheme to defraud Medicare by submitting claims for PHP services that were not medically necessary and, in some cases, never provided.  Prior to Khan’s arrest, Riverside submitted over $116 million in claims to Medicare for PHP services purportedly provided to the recruited beneficiaries, when in fact, the PHP services were medically unnecessary or never provided.  Khan also admitted that he and his co-conspirators paid kickbacks to patient recruiters and to owners and operators of group care homes in exchange for which those individuals delivered ineligible Medicare beneficiaries to the hospital’s PHPs.

Others involved in the fraudulent scheme already have pleaded guilty and are awaiting sentencing.  Earnest Gibson III, the former president of Riverside; his son, Earnest Gibson IV, who operated a Riverside PHP; Regina Askew, a patient file auditor and group home operator; and Robert Crane, a patient recruiter, were all convicted after jury trial in November 2014 and await sentencing.  William Bullock, an operator of a Riverside satellite location, as well as Leslie Clark, Robert Ferguson, Waddie McDuffie and Sharonda Holmes, who were involved in paying or receiving kickbacks, also have pleaded guilty to their roles in the scheme.

The case was investigated by the FBI, Internal Revenue Service Criminal Investigation and Texas Attorney General’s Medicaid Fraud Control Unit, with assistance from Health & Human Services’ Office of the Inspector General, Railroad Retirement Board’s Office of Inspector General and Office of Personnel Management’s Office of Inspector General.  The case was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Southern District of Texas.  The case is being prosecuted by Assistant Chief Laura M.K. Cordova of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who collectively have billed the Medicare program for more than $6.5 billion.  In addition, the HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.

Source: justice.gov

Defendant Also Ordered to Forfeit More Than $1.28 Million

Washington, DC--(ENEWSPF)--May 21, 2015.  A California man was sentenced to 13 months in prison today for his operation of the myRedBook.com website to facilitate prostitution.  This represents the first federal conviction of a website operator for facilitation of prostitution.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Melinda Haag of the Northern District of California, Special Agent in Charge David J. Johnson of the FBI’s San Francisco Field Office and Special Agent in Charge José M. Martinez of the Internal Revenue Service-Criminal Investigation (IRS-CI) Oakland Field Office made the announcement.

Eric Omuro, also known as Red, 53, of Mountain View, California, pleaded guilty on Dec. 11, 2014, before U.S. District Judge William H. Orrick of the Northern District of California to using a facility of interstate commerce with the intent to facilitate prostitution.  As part of his plea agreement, Omuro agreed to forfeit more than $1.28 million in cash and property, as well as the sfRedBook.com and myRedBook.com domain names.

In connection with his guilty plea, Omuro admitted that from April 2010 until June 25, 2014, he owned, managed and operated a website known as myRedBook.com, which was previously known as sfredbook.com.  Omuro admitted that the website hosted advertisements posted by prostitutes containing explicit photos, graphic descriptions of sexual services offered and rates for the sexual services.  The advertisements were searchable by geographic location, including cities throughout California, other U.S. states and Canada.

Omuro admitted that members of his website and prostitutes typically used acronyms for sex acts, which were defined in graphic detail in the website’s “Terms and Acronyms” section.  While prostitutes could post advertisements for free, myRedBook.com offered additional options for a fee.  For example, prostitutes could pay a fee to have their advertisement featured more prominently on the website.  Similarly, customers could access myRedBook.com for free.  If a customer purchased a membership, however, the customer obtained early and enhanced access to prostitute reviews, enhanced prostitute review search options and access to additional VIP forums, among other things.

According to an affidavit submitted in connection with the sentencing hearing, the FBI identified more than 50 juveniles who were also advertised on myRedBook for the purpose of prostitution.

This case was investigated by the FBI’s San Francisco Field Office, the IRS-CI and the Oakland, California, Police Department.  The case is being prosecuted by the Criminal Division’s Child Exploitation and Obscenity Section and U.S. Attorney’s Office of the Northern District of California.  The Criminal Division’s Office of International Affairs provided assistance to the prosecution.

Source: justice.gov

Washington, DC--(ENEWSPF)--May 22, 2015.  Two California men, one of whom attempted to travel to the Middle East to allegedly join ISIL, have been arrested on charges of conspiring to provide material support to the designated foreign terrorist group the Islamic State of Iraq and the Levant (ISIL), announced Assistant Attorney General for National Security John P. Carlin and Acting U.S. Attorney Stephanie Yonekura of the Central District of California.

Muhanad Badawi, 24, and Nader Elhuzayel, 24, both of Anaheim, California, were arrested late Thursday afternoon by the FBI.  Badawi and Elhuzayel were charged in a criminal complaint filed today in U.S. District Court of the Central District of California, and both men are expected to make their initial court appearance this afternoon.

The affidavit in support of the criminal complaint outlines a scheme in which Badawi and Elhuzayel used social media to discuss ISIL and terrorist attacks, expressed a desire to die as martyrs and made arrangements for Elhuzayel to leave the United States to join ISIL.

According to the affidavit, on May 3, 2015, Elhuzayel saw a tweet from Elton Simpson, one of the two gunmen who were killed trying to attack a conference in Garland, Texas.  In this tweet, Simpson stated that he and his “bro” had pledged allegiance to the leader of ISIL.  In response, Elhuzayel tweeted his support for the attempted attack and praised Simpson as a “martyr.”

In recorded conversations last month, Badawi and Elhuzayel “discussed how it would be a blessing to fight for the cause of Allah, and to die in the battlefield,” and they referred to ISIL as “we.” When Badawi expressed concerns about ISIL struggling due to airstrikes by Coalition forces, Elhuzayel responded that they had to be patient and “can you imagine when al-Qaeda joins with Islamic State”?  According to the affidavit, Badawi responded: “We will be huge.”  The two men also discussed local Muslim leaders and Elhuzayel complained that these leaders were not “legitimate” because they believed in democracy and were not fighting for an Islamic State.

The men discussed where in the Middle East they would rather be, and Elhuzayel said he wanted to fight and did not want to be in the United States, according to the conversations recounted in the affidavit.

On May 7, Badawi allowed Elhuzayel to use his credit card to purchase a one-way airline ticket for travel from Los Angeles to Tel Aviv, Israel, via Istanbul, Turkey, on a Turkish Airlines flight scheduled to depart on May 21.  Badawi indicated that he would be traveling to the Middle East in the future, according to the affidavit.

Elhuzayel was arrested at Los Angeles International Airport.  According to the allegations in the complaint, Elhuzayel admitted after being read Miranda rights that he planned to disembark in Istanbul to join ISIL and did not intend to travel on to Israel.

If convicted of the charge in the criminal complaint, Badawi and Elhuzayel each would face a statutory maximum sentence of 15 years in prison for conspiring to provide material support to ISIL.

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

The investigation in this case was conducted by members of the FBI’s Joint Terrorism Task Force in Orange County, California.

Badawi and Elhuzayel Criminal Complaint

Source: justice.gov

Washington, DC--(ENEWSPF)--May 26, 2015.  The former owner of a Los Angeles-based medical supply company was sentenced today to seven years in prison for his role in a fraud scheme that resulted in $3.3 million in fraudulent claims to Medicare.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Stephanie Yonekura of the Central District of California, Special Agent in Charge Glenn R. Ferry of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Los Angeles Region and Assistant Director in Charge David L. Bowdich of the FBI’s Los Angeles Field Office made the announcement.

Hakop Gambaryan, 55, of East Hollywood, California, was convicted following a jury trial on March 20, 2015, of four counts of health care fraud.  In addition to the prison sentence, U.S. District Court Judge Otis D. Wright II of the Central District of California ordered Gambaryan to pay $1,740,009 in restitution.

At trial, the evidence showed that Gambaryan, the former owner of a durable medical equipment supply company, fraudulently billed more than $3 million to Medicare for durable medical equipment, such as expensive power wheel chairs, that was not medically necessary.  Medicare paid approximately $1.7 million on those fraudulent claims.

The evidence demonstrated that between March 2006 and December 2012, Gambaryan paid cash kickbacks to medical clinics for fraudulent prescriptions for durable medical equipment, which the patients did not need.  Gambaryan then used these prescriptions to bill Medicare for the unnecessary equipment.

According to evidence presented at trial, Gambaryan personally delivered power wheelchairs to many beneficiaries who were able to walk without assistance.  In one instance, Gambaryan carried a power wheelchair up a flight of stairs for a woman who lived in a second floor apartment with no elevator.  In another instance, the power wheelchair would not fit inside the beneficiary’s home, so Gambaryan put it in the beneficiary’s garage.

The evidence also demonstrated that Gambaryan generated false documentation to support the fraudulent claims, including fake home assessments when no home assessments actually occurred.  In addition, Gambaryan photocopied beneficiaries’ signatures hundreds of times to create the appearance that the beneficiaries consented to ongoing equipment rentals, when they did not.  Indeed, at least two of the beneficiaries had passed away prior to the date they supposedly signed the rental agreements.

The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Central District of California.  The case was prosecuted by Trial Attorneys Fred Medick and Ritesh Srivastava of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Team (HEAT), go to: www.stopmedicarefraud.gov.

Source: justice.gov

Defendant Tried to Lure American Solders to a Compound in Afghanistan that Was Rigged with Explosives; Also Facilitated the Entry of an American Citizen into Al-Qaeda

Washington, DC--(ENEWSPF)--May 26, 2015.  Earlier today, Saddiq al-Abbadi, 40, a Yemeni national, pleaded guilty to conspiring to murder U.S. nationals abroad, providing and conspiring to provide material support to al-Qaeda and using a machine gun in furtherance of those crimes. 

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 Andrew G. McCabe of the FBI’s Washington, D.C., Field Office.  Today’s guilty plea proceeding took place before U.S. District Court Judge Nicholas G. Garaufis of the Eastern District of New York.  At sentencing, al-Abbadi faces a maximum of life imprisonment.

“With the guilty plea entered today, Saddiq al-Abbadi will be held accountable for conspiring to kill Americans overseas and providing material support to al-Qaeda,” said Assistant Attorney General Carlin.  “Seeking to identify, thwart and hold accountable those who target U.S. citizens and interests around the world will remain a top priority of the National Security Division.”

“The defendant was a high-level al-Qaeda operative with ties to the terrorist group’s senior leadership in both Pakistan and Yemen,” said Acting U.S. Attorney Currie.  “He fought in battles against U.S. troops in Iraq and Afghanistan, tried to kill U.S. troops in Afghanistan by luring them to a compound rigged with explosives, and helped an American citizen gain entry to al-Qaeda.  We stand resolute in our commitment to bring to justice those who would try to harm members of our military or who assist al-Qaeda’s efforts to kill Americans at home or abroad.”

“With today’s guilty plea, Al-Abbadi admitted to directly supporting the mission of a designated terrorist organization through planning an operation designed to kill U.S. forces and for engaging in recruitment efforts on behalf of al-Qaeda,” said Assistant Director in Charge McCabe.  “This plea is due in no small part to the many FBI Special Agents, intelligence analysts, and linguists from the Washington and New York Field Offices as well as our interagency and international partners who spent countless hours investigating terrorism actors and al-Abbadi’s actions.  The FBI will not rest until we find and hold accountable those who provide support to terrorist groups and ensure that they are brought to justice.”

According to court filings, al-Abbadi traveled from his home country of Yemen to Iraq where, from approximately late 2005 through early 2007, he fought alongside al-Qaeda affiliated battalions against U.S. troops stationed in Iraq.

In early 2008, al-Abbadi traveled to the Federally Administered Tribal Areas (FATA) of Pakistan in order to fight for al-Qaeda in Pakistan and Afghanistan.  While in the FATA, al-Abbadi – who had longstanding ties to senior members of al-Qaeda’s Yemen-based affiliate known as al-Qaeda in the Arabian Peninsula (AQAP) – engaged directly with senior al-Qaeda leadership in Pakistan, including Sheikh Saeed al-Masri, the then-third ranking member of al-Qaeda.

During the late spring and summer of 2008, Al-Abbadi crossed from Pakistan into Afghanistan for the purpose of fighting and killing members of the U.S. military stationed in Afghanistan.  In June 2008, he planned an operation designed to lure U.S. forces to a compound in Ghazni, Afghanistan, that was rigged with explosives set to detonate upon their entry.  When U.S. forces arrived at the compound, they found rocket-propelled grenades and artillery rounds littered about.  One soldier observed wiring running from the exterior gate to the inside of the compound and recognized the trap.  The military evacuated and subsequently leveled the compound.

In addition to fighting against the U.S. military, al-Abbadi used his connections with al-Qaeda’s leadership to help U.S. citizen Bryant Neal Vinas gain entry into al-Qaeda.  Vinas had traveled to Pakistan from Long Island, New York, in the hopes of joining al-Qaeda and fighting against U.S. military forces in Afghanistan.  As a result of al-Abbadi’s assistance, Vinas was allowed to join al-Qaeda.  After participating in al-Qaeda’s military training program, Vinas developed a plan with senior al-Qaeda external operations leadership to conduct an attack on the Long Island Railroad in New York.  Vinas was arrested before he could carry out this attack.

Assistant Attorney General Carlin extended his grateful appreciation to the FBI.  The government’s case is being prosecuted by Assistant U.S. Attorneys Zainab Ahmad, Michael P. Canty and Douglas M. Pravda of the Eastern District of New York, with assistance provided by Trial Attorney Josh Parecki of the National Security Division’s Counterterrorism Section and by the Office of International Affairs.

Source: justice.gov

Washington, DC--(ENEWSPF)--May 27, 2015.  Leon Nathan Davis, 37, of Augusta, Georgia, pleaded guilty earlier today to an information charging him with attempting to provide material support to a designated foreign terrorist organization, specifically the Islamic State of Iraq and the Levant (ISIL).

Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Edward J. Tarver of the Southern District of Georgia and Special Agent in Charge J. Britt Johnson of the FBI’s Atlanta Field Office made the announcement.  Davis pleaded guilty in federal court before U.S. District Court Judge J. Randal Hall of the Southern District of Georgia.

According to the testimony presented in court during the guilty plea proceeding, for more than a year, an FBI-led team investigated Davis’ attempts to join an overseas designated foreign terrorist organization.  Davis was arrested at the Atlanta Hartfield Airport in October 2014 on a parole violation, after he had purchased a ticket to fly to Turkey and then traveled from Augusta to the Atlanta Airport.  Davis has been in custody since his arrest.

Providing material support to a designated foreign terrorist organization is a crime punishable by up to 15 years in prison, a lifetime of supervised release and a $250,000 fine.  A sentencing hearing will be conducted after the U.S. Probation Office conducts a presentence investigation.

Assistant Attorney General Carlin joined U.S. Attorney Tarver in commending the FBI-led Joint Terrorism Task Force, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Georgia Board of Pardons and Paroles for their work on this case.  Assistant Attorney General Carlin and U.S. Attorney Tarver also expressed their gratitude to the U.S. Customs and Border Protection Service and the Atlanta Police Department for their contributions to the investigation.

The case is being prosecuted by the U.S. Attorney’s Office of the Southern District of Georgia and the Justice Department’s National Security Division.

Source: justice.gov

Washington, DC--(ENEWSPF)--May 28, 2015. The Department of Justice announced today that the following four banks reached a resolution under the department’s Swiss Bank Program:

• Société Générale Private Banking (Lugano-Svizzera)

• MediBank AG

• LBBW (Schweiz) AG

• Scobag Privatbank AG

“Today’s agreements reflect the Tax Division’s continued progress towards reaching appropriate resolutions with the banks that self-reported and voluntarily entered the Swiss Bank Program,” said Acting Assistant Attorney General Caroline D. Ciraolo of the Department of Justice’s Tax Division.  “The department is currently investigating accountholders, bank employees, and other facilitators and institutions based on information supplied by various sources, including the banks participating in this Program. Our message is clear – there is no safe haven.”

The Swiss Bank Program, which was announced on Aug. 29, 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States.  Swiss banks eligible to enter the program were required to advise the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts.  Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.

Under the program, banks are required to:

• Make a complete disclosure of their cross-border activities;

• Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;

• Cooperate in treaty requests for account information;

• Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;

• Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and

• Pay appropriate penalties.

Swiss banks meeting all of the above requirements are eligible for a non-prosecution agreement.

According to the terms of the non-prosecution agreements signed today, each bank agrees to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts and pay the penalties in return for the department’s agreement not to prosecute these banks for tax-related criminal offenses.

Société Générale Private Banking (Lugano-Svizzera) SA (SGPB-Lugano) was established in 1974 and is headquartered in Lugano, Switzerland.  Through referrals and pre-existing relationships, SGPB-Lugano accepted, opened and maintained accounts for U.S. taxpayers, and knew that it was likely that certain U.S. taxpayers who maintained accounts there were not complying with their U.S. reporting obligations.  Since Aug. 1, 2008, SGPB-Lugano held and managed approximately 109 U.S.-related accounts, with a peak of assets under management of approximately $139.6 million, and offered a variety of services that it knew assisted U.S. clients in the concealment of assets and income from the Internal Revenue Service (IRS), including “hold mail” services and numbered accounts.  Some U.S. taxpayers expressly instructed SGPB-Lugano not to disclose their names to the IRS, to sell their U.S. securities and to not invest in U.S. securities, which would have required disclosure and withholding.  In addition, certain relationship managers actively assisted or otherwise facilitated U.S. taxpayers in establishing and maintaining undeclared accounts in a manner designed to conceal the true ownership or beneficial interest in the accounts, including concealing undeclared accounts by opening and maintaining accounts in the name of non-U.S. entities, including sham entities, having an officer of SGPB-Lugano act as an officer of the sham entities, processing cash withdrawals from accounts being closed and then maintaining the funds in a safe deposit box at the bank and making “transitory” accounts available, thereby allowing multiple accountholders to transfer funds in such a way as to shield the identity and account number of the accountholder.  SGPB-Lugano will pay a penalty of $1.363 million.

Created in 1979 and headquartered in Zug, Switzerland, MediBank AG (MediBank) provided private banking services to U.S. taxpayers and assisted in the evasion of U.S. tax obligations by opening and maintaining undeclared accounts.  In furtherance of a scheme to help U.S. taxpayers hide assets from the IRS and evade taxes, MediBank failed to comply with its withholding and reporting obligations, providing “hold mail” services and offering numbered accounts, thus reducing the ability of U.S. authorities to learn the identity of the taxpayers.  After it became public that the Department of Justice was investigating UBS, MediBank hired a relationship manager from UBS and permitted some of that person’s U.S. clients to open accounts at MediBank.  Since Aug. 1, 2008, MediBank had 14 U.S. related accounts with assets under management of $8,620,675.  MediBank opened, serviced and profited from accounts for U.S. clients with the knowledge that many likely were not complying with their U.S. tax obligations.  MediBank will pay a penalty of $826,000.

LBBW (Schweiz) AG (LBBW-Schweiz) was established in Zurich in 1995.  Since August 2008, LBBW-Schweiz held 35 U.S. related accounts with $128,664,130 in assets under management.  After it became public that the department was investigating UBS, LBBW-Schweiz opened accounts from former clients at UBS and Credit Suisse.  Despite its knowledge that U.S. taxpayers had a legal duty to report and pay tax on income earned on their accounts, LLB permitted undeclared accounts to be opened and maintained, and offered a variety of services that would and did assist U.S. clients in the concealment of assets and income from the IRS.  These services included following U.S. accountholders instructions not to invest in U.S. securities and not reporting the accounts to the IRS and agreeing to hold statements and other mail, causing documents regarding the accounts to remain outside the United States.  LBBW-Schweiz will pay a penalty of $34,000.

Headquartered in Basel, Switzerland, Scobag Privatbank AG (Scobag) was founded in 1968 to provide financial and other services to its founders, and obtained its banking license in 1986.  Since August 2008, Scobag had 13 U.S. related accounts, the maximum dollar value of which was $6,945,700.  Scobag offered a variety of services that it knew could and did assist U.S. clients in the concealment of assets and income from the IRS, including “hold mail” services and numbered accounts.  Scobag will pay a penalty of $9,090.

In accordance with the terms of the program, each bank mitigated its penalty by encouraging U.S. accountholders to come into compliance with their U.S. tax and disclosure obligations.  While U.S. accountholders at these banks who have not yet declared their accounts to the IRS may still be eligible to participate in the IRS Offshore Voluntary Disclosure Program, the price of such disclosure has increased.

Most U.S. taxpayers who enter the IRS Offshore Voluntary Disclosure Program to resolve undeclared offshore accounts will pay a penalty equal to 27.5 percent of the high value of the accounts.  On Aug. 4, 2014, the IRS increased the penalty to 50 percent if, at the time the taxpayer initiated their disclosure, either a foreign financial institution at which the taxpayer had an account or a facilitator who helped the taxpayer establish or maintain an offshore arrangement had been publicly identified as being under investigation, the recipient of a John Doe summons or cooperating with a government investigation, including the execution of a deferred prosecution agreement or non-prosecution agreement.  With today’s announcement of these non-prosecution agreements, noncompliant U.S. accountholders at these banks must now pay that 50 percent penalty to the IRS if they wish to enter the IRS Offshore Voluntary Disclosure Program.

“These four additional bank agreements signal a change in terrain for offshore banking,” said Chief Richard Weber for the IRS-Criminal Investigation (CI).  “No longer is it safe to hide money offshore and expect that it will not be discovered. ‎ IRS CI Special Agents will continue to follow the money to find those who circumvent the offshore disclosure laws and hold them accountable.”

Acting Assistant Attorney General Ciraolo thanked the IRS and in particular, IRS-CI and IRS’s Large Business and International Division for their substantial assistance, as well as Karen M. Quesnel, Sean P. Beaty, Gregory S. Seador, W. Damon Dennis and Brian D. Bailey, who served as counsel on these matters, and Senior Counsel for International Tax Matters and Coordinator of the Swiss Bank Program Thomas J. Sawyer of the Tax Division.

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.

Related Material:

Download Société Générale Private Banking (Lugano-Svizzera) Non-Prosecution Agreement and Statement of Facts (403.13 KB)

Download MediBank AG Non-Prosecution Agreement and Statement of Facts (315.33 KB)

Download LBBW (Schweisz) AG Non-Prosecution Agreement and Statement of Facts (338.89 KB)

Download Scobag Privatbank AG Non-Prosecution Agreement and Statement of Facts (396.38 KB)

Source: justice.gov

Washington, DC--(ENEWSPF)--May 28, 2015.  A Louisiana man was charged in a two-count information with conspiracy to commit wire fraud and conspiracy to commit trademark counterfeiting using the “Silk Road” online marketplace, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Polite Jr. of the Eastern District of Louisiana.

“Anonymous online marketplaces have provided criminals with the ability to conduct illegal operations worldwide while seemingly insulating them from apprehension and prosecution,” said Assistant Attorney General Caldwell.  “The Criminal Division is determined to peel back the veil of anonymity and prosecute criminals of all stripes who attempt to use the ‘dark web’ to cloak their illegal conduct.”

According to allegations in the information, Beau Wattigney, 30, of New Orleans, Louisiana, created counterfeit coupons and used Silk Road to sell them.  Silk Road was a worldwide Internet forum used to anonymously sell illegal drugs, goods and services.  Wattigney allegedly used Silk Road 1.0 until it was dismantled by federal officials in October 2013, and Silk Road 2.0 until it was dismantled in November 2014.

According to the information, Wattigney designed the coupons to look like print-at-home manufacturers’ coupons.  The coupons included counterfeit trademarks for many prominent coupon distribution services, including Hopster, Coupons.com, SmartSource and RedPlum.  Wattigney allegedly sold a selection of counterfeit coupons entitled “The Original S.R. Exclusive Coupon Collection” for approximately $50.00.  Additionally, one counterfeit coupon Wattigney allegedly created and sold allowed users to purchase $50.00 Visa Gift Cards for $.01 each.  The coupons Wattigney allegedly sold on Silk Road 1.0 and 2.0 affected more than 50 manufacturers, retailers and online coupon distributors.  If redeemed, the counterfeit coupons could have resulted in a loss of more than $1,000,000 to the affected businesses.

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

The case is being investigated by the FBI’s Philadelphia Division, with assistance from the FBI’s New Orleans Division.  The case is being prosecuted by Senior Counsel Marie-Flore Johnson, Gavin Corn and Robert Wallace of the Criminal Division’s Computer Crime and Intellectual Property Section, and Assistant U.S. Attorney Jordan Ginsberg of the Eastern District of Louisiana.

Related Material:

Wattigney Information

Source: justice.gov

Washington, DC--(ENEWSPF)--May 28, 2015.  A federal jury in the Eastern District of Washington returned a guilty verdict yesterday against a Spokane, Washington, man for selling industrial bleach as a miracle cure for numerous diseases and illnesses, including cancer, AIDS, malaria, hepatitis, lyme disease, asthma and the common cold, the Department of Justice announced. 

Louis Daniel Smith, 45, was convicted following a seven-day trial of conspiracy, smuggling, selling misbranded drugs and defrauding the United States. Evidence at trial showed that Smith operated a business called “Project GreenLife” (PGL) from 2007 to 2011.  PGL sold a product called “Miracle Mineral Supplement,” or MMS, over the Internet.  MMS is a mixture of sodium chlorite and water.  Sodium chlorite is an industrial chemical used as a pesticide and for hydraulic fracking and wastewater treatment.  Sodium chlorite cannot be sold for human consumption and suppliers of the chemical include a warning sheet stating that it can cause potentially fatal side effects if swallowed.

“This verdict demonstrates that the Department of Justice will prosecute those who sell dangerous chemicals as miracle cures to sick people and their desperate loved ones,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “Consumers have the right to expect that the medicines that they purchase are safe and effective.”  Mizer thanked the jury for its service and its careful consideration of the evidence.

The government presented evidence that Smith instructed consumers to combine MMS with citric acid to create chlorine dioxide, add water and drink the resulting mixture to cure numerous illnesses. Chlorine dioxide is a potent agent used to bleach textiles, among other industrial applications.  Chlorine dioxide is a severe respiratory and eye irritant that can cause nausea, diarrhea and dehydration.  According to the instructions for use that Smith provided with his product, nausea, diarrhea and vomiting were all signs that the miracle cure was working.  The instructions also stated that despite a risk of possible brain damage, the product might still be appropriate for pregnant women or infants who were seriously ill.

According to the evidence presented at trial, Smith created phony “water purification” and “wastewater treatment” businesses in order to obtain sodium chlorite and ship his MMS without being detected by the U.S. Food and Drug Administration (FDA) or U.S. Customs and Border Protection.  The government also presented evidence that Smith hid evidence from FDA inspectors and destroyed evidence while law enforcement agents were executing search warrants on his residence and business. 

Before trial, three of Smith’s alleged co-conspirators, Chris Olson, Tammy Olson and Karis DeLong, Smith’s wife, pleaded guilty to introducing misbranded drugs into interstate commerce.  Chris Olson, along with alleged co-conspirators Matthew Darjanny and Joseph Lachnit, testified at trial that Smith was the leader of PGL.

In all, the jury convicted Smith of one count of conspiracy to commit multiple crimes, three counts of introducing misbranded drugs into interstate commerce with intent to defraud or mislead and one count of fraudulently smuggling merchandise into the United States.  The jury found Smith not guilty on one out of four of the misbranded drug counts. He faces a statutory maximum of 34 years in prison at his Sept. 9 sentencing.

The case was investigated by agents of the FDA’s Office of Criminal Investigations and the U.S. Postal Inspection Service.  The case was prosecuted by Christopher E. Parisi and Timothy T. Finley of the Civil Division’s Consumer Protection Branch in Washington, D.C.

Source: justice.gov

Washington, DC—(ENEWSPF)—May 28, 2015. The Department of Justice today filed a complaint and settlement agreement in the district court of the Middle District of Alabama to protect prisoners at the Julia Tutwiler Prison for Women in Wetumpka, Alabama, from sexual victimization by correctional officers.  The agreement filed is designed to resolve the Justice Department’s findings of sexual abuse and sexual harassment at Tutwiler.

In January 2014, the Justice Department issued a findings letter concluding that Tutwiler subjects its women prisoners to a pattern and practice of sexual abuse in violation the Eighth Amendment of the U.S. Constitution.  The findings identified several systemic failures that led to the pattern of abuse, including ineffective reporting and investigations and no grievance policy.  Tutwiler also failed to hold culpable staff accountable for abuses. 

“Prisoners are entitled to be safe from sexual predation by staff, and to live in an environment free from sexual assault, sexual harassment and the constant fear of these abuses,” said the head of the Civil Rights Division, Principal Deputy Assistant Attorney General Vanita Gupta.  “Our agreement uses gender-responsive and trauma-informed principles designed to address and eliminate the culture of abuse that Tutwiler’s women prisoners have suffered from and endured for years.”

Alabama has already begun to put in place important reforms to address the department’s findings including the Governor’s creation of an agency-level position of Deputy Commissioner of Women’s Services.  Wendy Williams, Ed.D., has been appointed to the position, and is charged with implementing gender-responsive practices at Tutwiler and with leading long overdue culture change.  The department looks forward to continuing to work with the Warden, the Commissioner and the dedicated Tutwiler staff who will be part of the solution going forward. 

Alabama’s willingness to engage in this cooperative resolution also eliminates the expense of a protracted lawsuit and offers women immediate protections.  “We very much appreciate the state’s cooperation and willingness to work to bring about meaningful and sustainable change on these important issues,” said U.S. Attorney George L. Beck Jr. of the Middle District of Alabama. 

The agreement comprehensively addresses the causes of the abuses uncovered by the department’s investigation.  It draws upon gender-responsive, trauma-informed principles to build on the Prison Rape Elimination Act National Standards, which are designed to prevent, detect and respond to custodial sexual abuse and sexual harassment throughout our nation’s prisons and jails.  The agreement tailors the more generalized national standards to target the specific problems revealed at Tutwiler and to meaningfully address the harm to Tutwiler’s women prisoners.

The agreement requires Tutwiler to protect women from sexual abuse and sexual harassment by ensuring sufficient staff to safely operate Tutwiler and supervise prisoners, supplemented by a state-of-the-art camera system.  The agreement also provides safeguards to prevent staff from unnecessarily viewing prisoners who are naked or performing bodily functions.

Tutwiler must ensure that each prisoner knows of her right to be free from sexual abuse and harassment, and that each prisoner is aware of the several internal and external methods to report abuse, including a new grievance process.  Tutwiler will protect prisoners from the threat of retaliation by monitoring the housing, programming and disciplinary status of any prisoner who reports or alleges abuse.  Further, women who allege sexual abuse are entitled to unimpeded access to medical treatment and crisis intervention services.  

The agreement also has provisions directed toward staff including the requirement to   thoroughly train all staff on their duties to prevent, detect and respond to sexual abuse at Tutwiler.  Staff will also be trained on how to manage, interact and communicate appropriately with women prisoners and with their lesbian, gay, bisexual, transgender and gender nonconforming prisoners. 

The agreement requires that all sexual abuse and sexual harassment allegations are promptly, thoroughly and objectively investigated and appropriately referred for prosecutorial review, and that alleged victims are advised of the outcome of their allegations.  Tutwiler must also take appropriate disciplinary action against staff found to have engaged in sexual abuse or sexual harassment or to have violated Tutwiler’s sexual abuse and sexual harassment policies and procedures. 

Tutwiler will put in place a quality assurance program to track and analyze data to ensure that sexual abuse and harassment is being adequately prevented, detected and responded to.  Significantly, an independent monitor will evaluate Tutwiler’s progress towards meaningful reform and assist Tutwiler’s compliance efforts.  The agreement requires the monitor to provide compliance reports to the court every six months.

Tutwiler’s prisoners have already seen some changes implemented following the department’s investigation.  One current prisoner recently wrote to the Civil Rights Division to say, “[W]e thank [DOJ] for all you are doing and are looking forward to all the miraculous things to come.”

The investigation was conducted by the Civil Rights Division’s Special Litigation Section, with assistance from the U.S. Attorney’s Office of the Middle District of Alabama.  Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt.   

Related Material:

Download Tutwiler Complaint (327.76 KB)

Download Tutwiler Settlement Agreement (1.88 MB)

Source: justice.gov

Settlement Provides $9 Million in Compensation to African-American and Hispanic Borrowers

Washington, DC—(ENEWSPF)—May 28, 2015. The Justice Department and Consumer Financial Protection Bureau (Bureau) filed a consent order today to resolve allegations that Provident Funding Associates (Provident) engaged in a pattern or practice of discrimination that increased loan prices for African-American and Hispanic borrowers who obtained residential mortgages between 2006 and 2011 from Provident’s nationwide network of mortgage brokers.

The settlement, which is subject to court approval, was filed in conjunction with the agencies’ complaint in the U.S. District Court for the Northern District of California.  The complaint alleges that Provident violated the Fair Housing Act and Equal Credit Opportunity Act (ECOA) by charging thousands of African-American and Hispanic borrowers higher fees on mortgage loans not based on borrower risk, but because of their race or national origin.  Provident cooperated fully with the agencies’ investigation into its lending practices and agreed to settle this matter without contested litigation. 

“The Civil Rights Division is committed to ensuring that all types of lending institutions, including wholesale mortgage lenders, comply with the fair lending laws,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division.  “We look forward to further collaboration with the Consumer Financial Protection Bureau in protecting consumers from illegal and discriminatory lending practices.”

“The settlement demonstrates this U.S. Attorney’s office will devote the resources necessary to root out and address unfair lending practices that affect citizens of this district,” said U.S. Attorney Melinda Haag of the Northern District of California.  “The law is clear: access to mortgage loans may not be made more difficult because of an applicant’s race or national origin.  We are glad that Provident has agreed to put an end to this practice without engaging in protracted litigation.” 

“Consumers should never be charged higher fees because of their race or national origin,” said Consumer Financial Protection Bureau Director Richard Cordray.  “We will continue to root out illegal and discriminatory lending practices in the marketplace.  I look forward to working closely with our partners at the Department of Justice to ensure consumers are treated fairly.”

The lawsuit originated from a 2011 referral by the Federal Trade Commission (FTC) to the Justice Department’s Civil Rights Division.  In 2012, the Bureau joined the Justice Department’s investigation.

Under the terms of the proposed settlement, Provident will pay $9 million into a fund for the benefit of victims of its alleged mortgage lending discrimination.  The proposed settlement provides for an independent administrator to contact and disburse payments to borrowers whom the agencies identify as victims of Provident’s discrimination, at no cost to the borrowers.  Provident will pay all costs and expenses of the administrator.  Borrowers who are eligible for compensation will be contacted by the administrator.  The department will make a public announcement and post contact information on its website once the administrator begins contacting victims.

The Justice Department’s enforcement of fair lending laws is conducted by the Fair Lending Unit of the Housing and Civil Enforcement Section in the Civil Rights Division.  Since the Fair Lending Unit was established in February 2010, it has filed or resolved 39 lending matters under the Fair Housing Act, ECOA, and the Servicemembers Civil Relief Act.  The settlements in these matters provide over $1.2 billion in monetary relief for impacted communities and individual borrowers.  The Attorney General’s annual reports to Congress on ECOA enforcement highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications/.

The Civil Rights Division, the U.S. Attorney’s Office for the Northern District of California, the Consumer Financial Protection Bureau, and the FTC are members of the Financial Fraud Enforcement Task Force.  President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.  The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.  For more information on the task force, visit www.StopFraud.gov.

A copy of the complaint, as well as additional information about fair lending enforcement by the Justice Department, can be obtained from the Justice Department’s website at http://www.justice.gov/fairhousing.

Related Material:

Download Provident Complaint (119 KB)

Download Provident Consent Order (828.72 KB)

Source: justice.gov

Washington, DC--(ENEWSPF)--May 28, 2015.  Garden State Cardiovascular Specialists P.C. (Garden State), a cardiology practice which owns and operates several facilities in New Jersey under the name NJ MedCare/NJ Heart, has agreed to pay more than $3.6 million to resolve allegations that its facilities falsely billed federal health care programs for tests that were not medically necessary, announced today by U.S. Attorney Paul J. Fishman for the District of New Jersey.

The settlement announced today resolves allegations that Garden State and its principals, Jasjit Walia M.D. and Preet Randhawa M.D., submitted claims to Medicare for various cardiology diagnostic tests and procedures, including stress tests, cardiac catheterizations and external counterpulsation, which were not medically necessary. 

The allegations resolved by today’s settlement were raised in a lawsuit filed under the qui tam, or whistleblower provisions of the False Claims Act.  The act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery.  The whistleblower, Cheryl Mazurek, will receive more than $648,000 as part of today’s settlement.

The settlement is the culmination of an investigation conducted by special agents of the U.S. Department of Health and Human Services Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert.

The government is represented by Assistant U.S. Attorneys Bernard J. Cooney and Kristin L. Vassallo of the U.S. Attorney’s Office for the District of New Jersey in Newark and Trial Attorney Arthur Di Dio of the Justice Department’s Civil Division.

U.S. Attorney Fishman reorganized the health care fraud practice at the U.S. Attorney’s Office in New Jersey shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses.  Since 2010, the office has recovered more than $635 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.

The claims settled by this agreement are allegations only, and there has been no determination of liability. The qui tam case is captioned United States ex rel. Cheryl Mazurek v. Garden State Cardiovascular Specialists, P.C. et al., Civil Action No. 10-4734 (D.N.J.).

Source: justice.gov

Washington, DC--(ENEWSPF)--May 28, 2015.  A former staff member of the U.S. Senate Committee on Commerce, Science and Transportation was charged by indictment in the Eastern District of Virginia with defrauding at least three women of approximately $500,000, announced Assistant Attorney General Leslie Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Dana J. Boente of the Eastern District of Virginia. 

The indictment charges Robert Lee Foster, 65, of De Pere, Wisconsin, with nine counts of wire fraud. 

According to the indictment, from 2008 through May 2015, Foster devised a scheme to fraudulently obtain money and property from at least three women, whom Foster targeted because of their age, health, marital or family status, or other personal circumstances.  The indictment alleges that Foster used his affiliation with the U.S. Senate to gain the victims’ trust and confidence, and that he made various false and fraudulent representations to the victims, which prompted them to send Foster money, which funds he then used for his own personal benefit. 

An indictment is merely an accusation, and a defendant is presumed innocent unless proven guilty in a court of law.

This case was investigated by the FBI.  The case is being prosecuted by Trial Attorneys Kevin Driscoll and Peter Halpern of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Jamar Walker of the Eastern District of Virginia.

Related Material:

Foster Indictment

Source: justice.gov