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Tuesday, July 31, 2012

Antiques Dealer Pleads Guilty in Manhattan Federal Court to Crimes Relating to Illegal Trafficking of Endangered Rhinoceros Horns

WASHINGTON – David Hausman, an antiques dealer in Manhattan, pleaded guilty today in Manhattan federal court to obstruction of justice and creating false records, in relation to illegal rhinoceros horn trafficking, announced Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice, and Preet Bharara, U.S. Attorney for the Southern District of New York.
 
In the plea agreement, Hausman admitted that he committed these wildlife offenses while holding himself out to the U.S. Fish & Wildlife Service (FWS) as an antiques expert who purportedly wanted to help FWS investigate rhinoceros horn trafficking; in reality, he was covertly engaging in illegal activity himself. Hausman was arrested in February 2012 as part of “Operation Crash,” a nationwide, multi-agency crackdown on those involved in the black market trade of endangered rhinoceros horn.

“Trafficking in endangered species like the black rhinoceros is an egregious violation of the laws enacted by Congress to protect endangered species from extinction,” said Assistant Attorney General Moreno. “Mr. Hausman misled officers in a federal government investigation, falsified records and concealed his own purchase, sale and profit from illegal trade in black rhinoceros horns. This prosecution should send a strong message that we will vigorously prosecute those who deliberately violate wildlife protection laws.”

“David Hausman pretended he was helping law enforcement protect a species from being wiped out but instead he was contributing to the very problem,” said U.S. Attorney Bharara. “The laws that protect animals are not optional and will be enforced by this office vigorously since an important, even if less recognized, measure of justice is how we enforce the laws that protect endangered species. Thanks to the outstanding investigative work conducted by law enforcement in this case, Hausman’s deceptions were unsuccessful and he will now be held to account for his crimes.”

Rhinoceros are an herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth. They have no known predators other than humans. All species of rhinoceros are protected under United States and international law, and all black rhinoceros species are endangered.

Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), a treaty signed by over 170 countries around the world to protect fish, wildlife and plants that are or may become imperiled due to the demands of international markets. Nevertheless, the demand for Rhinoceros horn and black market prices have skyrocketed in recent years due to the value that some cultures have placed on ornamental carvings, good luck charms or alleged medicinal purposes, leading to a decimation of the global rhinoceros population.

Operation Crash is a continuing investigation being conducted by the Department of the Interior’s FWS in coordination with other federal and local law enforcement agencies including U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. A “crash” is the term for a herd of rhinoceros. Operation Crash is an ongoing effort to detect, deter and prosecute those engaged in the illegal killing of rhinoceros and the unlawful trafficking of rhinoceros horns. The investigation is being led by the Special Investigations Unit of the FWS Office of Law Enforcement and involves a nationwide task force of agents focused on rhino trafficking.

According to the information, plea agreement and statements made during court proceedings:
In December 2010, Hausman – while purporting to help the government crack down on illegal rhinoceros trading – advised FWS that the taxidermied head of a black rhinoceros containing two horns had been illegally sold by a Pennsylvania auction house. Upon learning that the sale was not finalized, Hausman covertly purchased the rhinoceros mount himself, using a “straw buyer” to conceal that he was the true purchaser because federal law prohibits interstate trafficking in endangered species. Hausman instructed the straw buyer not to communicate with him about the matter by email to avoid creating a paper trail that could be followed by law enforcement. After the purchase was completed, Hausman directed the straw buyer to remove the horns and mail them to him. He then made a realistic set of fake horns using synthetic materials and directed the straw buyer to attach them on the rhinoceros head in order to deceive law enforcement in the event that they conducted an investigation. After his arrest in February 2012, Hausman contacted the straw buyer and they agreed that the rhinoceros mount should be burned or concealed.

In a second incident, in September 2011, Hausman responded to an Internet offer to sell a (different) taxidermied head of a black rhinoceros containing two horns. Unbeknownst to Hausman, the on-line seller was an undercover federal agent. Before purchasing the horns on Nov. 15, 2011, Hausman directed the undercover agent to send him an email falsely stating that the mounted rhinoceros was over 100 years old, even though the agent had told Hausman that the rhinoceros mount was only 20 to 30 years old. There is an antique exception for certain trade in rhinoceros horns that are over 100 years old. By creating the false record as to the age of the horns, Hausman sought to conceal his illegal conduct. Hausman also insisted on a cash transaction and told the undercover agent not to send additional emails so there would be no written record. After buying the black rhinoceros mount at a truck stop in Princeton, Ill., agents followed Hausman and observed him sawing off the horns in a motel parking lot.

In February 2012 at the time of his arrest, FWS agents seized four rhinoceros heads from Hausman’s apartment as well as six black rhinoceros horns – two of which were the very horns he was seen sawing off in the parking lot – numerous carved and partially carved rhinoceros horns, fake rhinoceros horns and $28,000 in cash.

Hausman, 67, of New York, N.Y., pleaded guilty to one count of obstruction of justice, which carries a maximum penalty of 20 years in prison, and one count of creating a false record in violation of the Lacey Act, a federal wildlife protection statute, which carries a maximum penalty of five years in prison. Hausman faces a maximum sentence of 25 years in prison for these offenses. Under the terms of the plea agreement, almost all of the items recovered from Hausman’s apartment at the time of his arrest will be forfeited or put toward the criminal fine, except for three items for which Hausman established legal purchase and antique status. He is scheduled to be sentenced by U.S. District Judge J. Paul Oetken on Dec. 5, 2012, at 2:00 p.m.

U.S. Attorney Bharara and Assistant Attorney General Moreno commended FWS and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Newark for their outstanding work in this investigation.
The case is being handled by the U.S. Attorney’s Complex Frauds Unit and the Environmental Crimes Section of the U.S. Department of Justice’s Environment and Natural Resources Division. Assistant U.S. Attorney Janis M. Echenberg and Richard A. Udell, a Senior Trial Attorney with the Environmental Crimes Section, are in charge of the prosecution.

Monday, July 30, 2012

Former Milwaukee Police Officer Sentenced to 24 Years in Prison for Civil Rights Violation and Sexual Assault

WASHINGTON – Former Milwaukee Police Officer Ladmarald Cates was sentenced today by U.S. District Judge J.P. Stadtmueller to 24 years in prison, the Justice Department announced. Cates was found guilty by a federal jury on Jan. 11, 2012, of a civil rights charge stemming from his July 16, 2010, sexual assault of a Milwaukee woman.

The evidence at trial established that on July 16, 2010, Cates, while acting as a Milwaukee police officer, responded to a 911 call for police assistance at the victim’s home. The defendant then used a combination of coercion and intimidation to force the victim to commit sexual acts before forcibly raping her.

“This officer committed a heinous act by raping a woman who called on the police because she needed help. His outrageous conduct requires the significant prison sentence delivered by the court today,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The Justice Department remains committed to aggressively prosecuting officers who use their authority to violate civil rights.”

“The 24-year term of imprisonment imposed upon this defendant reflects both the flagrant violation of the fundamental civil rights of a member of our community and the unconscionable conduct of a law enforcement officer sworn to protect our citizens,” said James L. Santelle, U.S. Attorney for the Eastern District of Wisconsin. “The message to all of our constituents, including the police, is that horrific behaviors of this sort will result in prompt investigation, focused prosecution, and prolonged incarceration.”

Following an internal investigation, the Milwaukee Police Department fired Cates.

The prosecution of this case was based upon the cooperation and support of the Milwaukee Police Department, which worked closely with the FBI in the investigation. The case was prosecuted by Assistant U.S. Attorney Mel. S. Johnson of the Eastern District of Wisconsin and Criminal Section Trial Attorney Saeed A. Mody of the Justice Department’s Civil Rights Division

California UBS Clients Sentenced to Prison for Hiding Asssets in Secret Bank Accounts Around the World

Sean Roberts and Nadia Roberts of Tehachapi, Calif., were sentenced today before U.S. District Court Chief Judge Anthony W. Ishii in Fresno, Calif., to 12 months and 1 day in prison for hiding millions of dollars in secret offshore bank accounts in Switzerland and other banks around the world. The Roberts were also ordered to pay restitution to the Internal Revenue Service (IRS) in the amount of $709,675, and to pay more than $2.5 million to resolve their civil liability with the IRS for failing to file the required Reports of Foreign Bank and Financial Reports (FBARs).
According to court documents and statements made in court, Sean and Nadia Roberts filed false individual U.S. income tax return for 2004 through 2008 in which they failed to report that they had an interest in or a signature authority over a secret Swiss financial account at UBS, which was subsequently transferred to the Swiss branch of a Liechtenstein bank. They also failed to report several other foreign accounts in the Isle of Man, Hong Kong, New Zealand and South Africa. The Roberts failed to report any income earned on the foreign accounts and falsely deducted millions of dollars in transfers from their domestic business to the Swiss bank accounts on their corporate tax returns. The false deductions allowed the Roberts to under-report their income on their individual income tax returns. The Roberts previously operated the National Test Pilot School (NTPS) in Mojave, Calif. NTPS is a non-profit educational institute that trains test pilots from domestic and foreign aerospace industries and governments. The Roberts also owned and operated Flight Research Incorporated, which owns and maintains most of the aircraft used by NTPS.
Based on court records, in or about 1991, the Robertses opened a bank account at an Isle of Man branch of a United Kingdom bank, in the name of nominee entity Interline Trade Associates Limited. From at least 2002 through 2004, the Robertses transferred funds from their company, Flight Research Incorporated of Mississippi (FRI Mississippi), to the Interline account, and caused the transfers to be falsely deducted as interest payments on corporate income tax returns as a sham aircraft loan.
In or about 1995, according to court documents and statements made in court, the Robertses, with the assistance of a UBS banker, established an account at UBS in Switzerland held in their own names. In 2004, the Robertses, with the assistance of the operator of a Swiss wealth management and tax advisory business, acquired a nominee Hong Kong entity called Excalibur Investments Limited, and opened a new UBS account in Excalibur’s name. In July 2004, the Robertses closed the UBS account in their own names and transferred the assets to the nominee Excalibur UBS account. In February 2005, the Robertses also closed their Interline account and transferred the assets to the Excalibur UBS account. From 2004 through 2008, the Robertses transferred more than $1.2 million from FRI Mississippi to the Excalibur UBS account, and caused the transfers to be falsely deducted as interest payments on corporate income tax returns as a sham aircraft loan.
Court records also established that, in or about May 2008, the Robertses closed their Excalibur UBS account and transferred over $4.8 million to an account in Excalibur’s name at a Swiss branch of a Liechtenstein bank. This was done after the Robertses learned that UBS was under investigation by U.S. authorities and that they should leave UBS to ensure the continued secrecy of their account. In 2008, the Robertses transferred more than $1.4 million from FRI Mississippi to the Excalibur account at the Liechtenstein bank, and again caused the transfers to be falsely deducted on a corporate income tax return. Also in May 2008, the Robertses opened a bank account in the name of Modest Winner, a nominee Hong Kong entity, at the Liechtenstein bank. In 2008 and 2009, the Robertses transferred funds from another of their entities, Tisours, LLC, to that Modest Winner account. In 2009, the Robertses transferred that account to a bank in Hong Kong. The Robertses also maintained numerous undeclared foreign bank accounts in New Zealand and South Africa held in their own names. Many of the financial transactions were done with the assistance of the same operator of the Swiss wealth management and tax advisory business.
In February 2009, UBS entered into a deferred prosecution agreement under which the bank admitted to helping U.S. taxpayers hide accounts from the IRS. As part of their agreement, UBS provided the U.S. government with the identities of, and account information for, certain U.S. customers of UBS’s cross-border business, including the Robertses.
Kathryn Keneally, Assistant Attorney General of the Justice Department’s Tax Division, commended the investigative efforts of IRS - Criminal Investigation special agents, who investigated the case, and Tax Division Trial Attorneys Timothy J. Stockwell and John P. Scully, who are prosecuting the case.

Friday, July 27, 2012

Two Former Soldiers Plead Guilty to Conspiracy to Illegally Obtain Fraudulent Recruiting Referral Bonuses

Ongoing Investigation Has Resulted in the Guilty Pleas of Eight Individuals

WASHINGTON –Two former soldiers pleaded guilty to participating in a conspiracy to defraud the U.S. military and its contractor of at least approximately $244,000 in fraudulent recruiting bonuses, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.

Former Army Specialist Paul Escobar, 32, and current Army Specialist Richard Garcia Jr., 28, both of San Antonio, Texas, were indicted on Sept. 13, 2011, in the U.S. District Court for the Western District of Texas in San Antonio. Escobar entered his guilty plea on July 19, 2012, and Garcia entered his plea on July 26, 2012.

Former Specialist Xavier Aves, 40, of San Antonio; Corporal Christopher Castro, 30, of San Antonio; former Staff Sergeant Grant E. Bibb, 40, of Eagle Pass, Texas; and Sergeant First Class Jesus Torres-Alvarez, 31, of El Paso, Texas, were also indicted along with Escobar and Garcia.

According to court documents, between approximately 2005 and 2008, the U.S. Army, the U.S. Army Reserves and the National Guard Bureau entered into contracts with Document and Packaging Broker Inc. to administer recruiting programs designed to offer monetary incentives to U.S. soldiers who referred civilians to join the Army, the Army Reserves and the Army National Guard. In addition, the Army managed its own recruiting referral programs to offer bonuses to soldiers who referred other individuals to join the Army or the Army Reserves.

Through these recruiting bonus programs, participating soldiers could receive up to $2,000 in bonus payments for civilians whom they referred to join the U.S. military. Based on certain milestones achieved by the referred soldier, a participating soldier would receive payments in the form of direct deposits and pre-paid debit card payments. To participate, soldiers needed to set up online sponsor or recruiting assistant accounts.

According to court documents, Escobar enlisted in the U.S. Army in approximately November 2007, and served until approximately January 2010. Escobar admitted that in approximately July 2008, he and co-conspirator Aves agreed to use a recruiting assistant account in Escobar’s name to claim that Escobar was responsible for referring certain potential soldiers to join the U.S. Army, when in fact Escobar had not referred those soldiers. Through these fraudulent representations, Escobar and Aves received a total of approximately $6,000 in fraudulent recruiting bonuses.

According to court documents, Garcia enlisted in the U.S. Army in approximately November 2005. Garcia admitted that in approximately May 2008, he and co-conspirator Aves agreed to use a recruiting assistant account in Garcia’s name to claim that Garcia was responsible for referring certain potential soldiers to join the U.S. Army, when in fact Escobar had not referred those soldiers. Through these fraudulent representations, Garcia and Aves received a total of approximately $13,000 in fraudulent recruiting bonuses.

According to court documents, Escobar, Garcia, Aves and their co-conspirators collected, in total, approximately $244,000 in fraudulent recruiting bonus payments from the various recruiting programs.

The charge of conspiracy to commit wire fraud carries a maximum penalty of five years in prison and a maximum fine of $250,000 or twice the gain or loss. Sentencing for Escobar and Garcia has been scheduled for Nov. 2, 2012, before Chief U.S. District Judge Fred Biery in San Antonio.

The case against Escobar and Garcia arises from an investigation involving allegations that former and current military recruiters and U.S. soldiers in the San Antonio area engaged in a wide-ranging scheme to obtain fraudulent recruiting bonuses. To date, the investigation has led to charges against eight people, all of whom have pleaded guilty. The investigation is ongoing.

On May 31, 2012, former Sergeant and National Guard recruiter Rafael L. Acosta, 39, of San Antonio, pleaded guilty to conspiracy to commit bribery and wire fraud for organizing and leading a conspiracy to obtain more than $90,000 in fraudulent recruiting bonuses. He is scheduled to be sentenced on Nov. 2, 2012.

On February 3, 2012, Aves pleaded guilty to one count of conspiracy to commit wire fraud, and one count of aggravated identity theft, which carries a mandatory minimum sentence of two years. On Jan. 30, 2012, Bibb pleaded guilty to one count of conspiracy to commit wire fraud. On Jan. 26, 2012, Torres-Alvarez pleaded guilty to one count of conspiracy to commit wire fraud. According to court documents, Torres-Alvarez, an active duty recruiter, admitted that he sold the names and Social Security numbers of potential soldiers to Aves and others involved in the scheme. Aves, Bibb and Torres-Alvarez are scheduled for sentencing on Nov. 2, 2012.

On Nov. 3, 2011, Castro pleaded guilty to one count of conspiracy to commit wire fraud for his role in the scheme. On June 29, 2012, Castro was sentenced to one year and a day in prison and ordered to pay $244,000 in restitution, jointly and severally.

On Jan. 28, 2010, Sergeant Ernest Gonzales, 50, of San Antonio, pleaded guilty to a one-count criminal information charging him with conspiracy to commit wire fraud for his role in the scheme. Gonzales assisted the government by providing helpful information concerning Aves, Bibb and Castro. On June 29, 2012, Gonzales was sentenced to five years probation and ordered to pay $244,000 in restitution, jointly and severally.

This investigation is being prosecuted by Trial Attorneys Edward J. Loya Jr. and Brian A. Lichter of the Criminal Division’s Public Integrity Section. The case is being investigated by agents from the San Antonio Fraud Resident Agency of the Major Procurement Fraud Unit, U.S. Army Criminal Investigation Command.

NEW ORLEANS MAN SENTENCED TO 48 MONTHS FOR FEDERAL GUN CHARGE

NEW ORLEANS, LOUISIANA – ARTHUR DRUMMER, JR., age 26, a resident of New Orleans, Louisiana, was sentenced to 48 months of incarceration by United States District Court Judge Kurt D. Engelhardt after DRUMMER pled guilty to being a previously convicted felon in possession of a firearm, in violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(2), announced U. S. Attorney Jim Letten.

According to court documents, DRUMMER had been previously convicted on September 29, 2003, for Possession of Crack Cocaine, a felony, in the Criminal District Court for the Parish of Orleans, and on June 13, 2005, for two counts of Manslaughter, also felonies, in the Orleans Parish Criminal District Court. As such, DRUMMER was prohibited by federal law from possessing a firearm. DRUMMER pled guilty to a one-count indictment for a violation of the Federal Gun Control Act on December 21, 2011.

In addition to incarceration, DRUMMER was sentenced to 3 years of supervised release and ordered to pay a mandatory special assessment of $100.00.

The case was investigated by the New Orleans Police Department and the ATF and was prosecuted by Assistant U. S. Attorney Edward J. Rivera of the Violent Crime Unit.

POSTAL WORKER CHARGED WITH FIREARMS OFFENSES

HONOLULU – Troy Haruki Hamura (51) of Lihue, Kauai,made his initial appearance in United States District Court today before Magistrate Judge Richard L. Puglisi following his arrest pursuant to a criminal complaint charging him with illegally possessing a machine gun and making a false statement in connection with the purchase of a firearm. A preliminary hearing was set for August 8, 2012. The prosecution sought to detain Hamura without bail, but the defendant was released on the condition of community confinement.

United States Attorney Florence T. Nakakuni said that according to information produced to the court, federal agents recovered 19 unregistered firearms, including the fully automatic machine gun forming the basis for the criminal charge, from Hamura's Lihue residence on June 14, 2012. Documents filed in connection with the case disclosed that Hamura, a United States Postal Service employee, ordered a rifle from a Florida gun dealer using a federal firearms license without the licensee's permission, and when the Florida gun dealer shipped the rifle to the Kauai licensee through the United States Postal Service, Hamura obtained the parcel containing the rifle, which he sold without ever registering it.
During the initial appearance, the prosecution disclosed that during the execution of a federal search warrant at Hamura's residence yesterday, agents recovered 30 registered firearms and over 23,000 rounds of ammunition. Neither those firearms nor the ammunition are the basis of any criminal charge.

If indicted and convicted, Hamura faces a maximum penalty of up to ten years in prison and a fine of up to $250,000 on each count. The charges in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

The investigation was conducted by the ATF; the United States Postal Service, Office of Inspector General; and the Kauai Police Department. Anyone with information relating to the Hamura investigation should call ATF Special Agent Charles Pang, at 808-566-4800.

The prosecution is being handled by Assistant U.S. Attorney Tracy Hino.

Thursday, July 26, 2012

Justice Department Reaches $12 Million Settlement to Resolve Violations of the Servicemembers Civil Relief Act by Capital One

Capital One N.A. and Capital One Bank (USA) N.A. (together Capital One), have agreed to pay approximately $12 million to resolve a lawsuit by the Department of Justice alleging the companies violated the Servicemembers Civil Relief Act (SCRA), the Justice Department announced today. The settlement covers a range of conduct that violated the protections guaranteed service members by the SCRA, including wrongful foreclosures, improper repossessions of motor vehicles, wrongful court judgments, improper denials of the 6 percent interest rate the SCRA guarantees to service members on some credit card and car loans and insufficient 6 percent benefits granted on credit cards, car loans and other types of accounts. The proposed consent order, which was filed simultaneously with the complaint, is one of the most comprehensive SCRA settlements ever obtained by a government agency or any private party under the SCRA.
“Today’s action makes clear that the Justice Department will fight for our service members, and use every available tool, resource and authority to hold accountable those who engage in discriminatory practices targeting those who serve,” said Attorney General Eric Holder. “Every day, our brave men and women in uniform make tremendous sacrifices to protect the American people from a range of global threats – and my colleagues and I are determined to ensure that they receive our strongest support here at home.”
The agreement requires Capital One to pay approximately $7 million in damages to service members for SCRA violations, including at least $125,000 in compensation plus compensation for any lost equity (with interest) to each servicemember whose home was unlawfully foreclosed upon, and at least $10,000 in compensation plus compensation for any lost equity (with interest) to each servicemember whose motor vehicle was unlawfully repossessed. In addition, the agreement requires Capital One to provide a $5 million fund to compensate service members who did not receive the appropriate amount of SCRA benefits on their credit card accounts, motor vehicle finance loans and consumer loans. Any portion of the $5 million that remains after payments to service members are made will be donated by Capital One to one or more charitable organizations that assist service members.
“This settlement demonstrates that the Justice Department will take any and all actions to ensure that the rights of service members are protected. We rely on these brave men and women to protect the safety and security of this country and we will be vigilant in protecting their rights at home,” said Assistant Attorney General for the Civil Rights Division Thomas E. Perez. “We commend Capital One for taking steps to develop strong SCRA policies before they knew the full results of our investigation.”
Capital One cooperated fully with the Justice Department’s investigation into its SCRA practices and has also agreed to pay above and beyond the $12 million if ongoing, independent audits required by the settlement turn up violations in accounts that it recently acquired from HSBC or ING Direct USA. Capital One has also, on its own initiative, recently adopted several policies that go beyond the requirements of the SCRA, such as extending a 4 percent interest rate to qualifying service members and giving an additional one-year grace period before de-enrolling service members from the reduced interest rate program.
Service members will be identified and compensated, with no action required on their part, on accounts dating back to July 15, 2006. As a result of the decree, Capital One has agreed to treat a service member’s request for a 6 percent rate relief in one area of its lending, such as credit cards, as a request for a 6 percent rate relief for any loan the servicemember may have with Capital One or its affiliates. This is the first time the Justice Department has obtained this type of enterprise-wide rate reduction relief from a lender under the SCRA. The settlement also requires Capital One to adopt policies and practices to prevent violations of the SCRA in the future.
The settlement was filed in conjunction with the Department’s complaint, which alleges that Capital One violated the SCRA, from at least July 15, 2006 to Nov. 21, 2011, when it: 1) wrongly denied certain written requests made by SCRA-protected service members to have the interest rate on their credit cards and motor vehicle finance loans lowered to 6 percent per year; 2) provided insufficient interest rate benefits on certain accounts that were enrolled after written requests were received from SCRA-protected service members; 3) foreclosed on the mortgages of certain SCRA-protected service members without court orders; 4) repossessed certain SCRA-protected service members’ motor vehicles without court orders; and 5) obtained default judgments on certain debts owed on credit cards, mortgage foreclosures, and/or motor vehicles without filing accurate affidavits of military service .
“We rely on the SCRA to guard and protect the rights of our men and women of the armed forces so that they can focus on their service to our country,” said U.S. Attorney for the Eastern District of Virginia Neil MacBride. “This case underscores the need for financial service providers to be aware of the wide-ranging protections and benefits the SCRA provides and to have in place policies and procedures that ensure service members’ SCRA rights are protected.”
The agreement, which is subject to court approval, was filed today in federal court in Alexandria, Va. The lawsuit resulted from a referral to the Justice Department by the Office of the Staff Judge Advocate at Davis-Monthan Air Force Base in Arizona. The referral involved a claim of a single service member’s failure to receive an interest rate reduction on his Capital One credit card account. The settlement comes after a two-year investigation of Capital One by the Department of Justice.
The SCRA provides critical consumer and other protections to the men and women serving our nation in the military. Its enactment was recognition that those who are making great sacrifices to protect us deserve our full support at home.

Detroit-Area Health Care Clinic Manager Sentenced to Serve 40 Months in Prison for Role in $8.5 Million Diagnostic Testing Fraud Scheme

The manager of a Detroit-area health care clinic was sentenced today to serve 40 months in prison for his leading role in a $7.42 million Medicare fraud scheme, the Departments of Justice and Health and Human Services (HHS) announced.
Miami-area resident Alejandro Haber, 27, was sentenced by U.S. District Judge Patrick Duggan in the Eastern District of Michigan in Detroit. In addition to his prison term, Haber was sentenced to serve three years of supervised release and was ordered to pay $5,333,906 in restitution, joint and several with his co-defendants, and was ordered to forfeit approximately $99,000 seized from bank accounts he controlled.
On Oct. 27, 2012, Haber pleaded guilty to one-count of conspiracy to commit health care fraud. According to plea documents, Haber conceived and oversaw fraud schemes at a clinic called Ritecare LLC. Ritecare later merged with a clinic called CompleteHealth LLC. Haber’s role was limited to the operation of Ritecare alone.
On July 24, 2012, Alejandro Haber’s father, Emilio Haber, was sentenced to serve 60 months in prison for his leading role in an $8.5 million Medicare fraud scheme.
According to court documents, w hile operating Ritecare, Alejandro Haber and his co-conspirators billed Medicare for medically unnecessary tests and services. Haber obtained patients for Ritecare through the payment of kickbacks to patient recruiters and directly to Medicare beneficiaries. The majority of patients were obtained through patient recruiters. Typically, co-conspirators at Ritecare paid patient recruiters $100-$150 per patient obtained, with $50-$75 to go to the patient in exchange for coming to Ritecare and subjecting themselves to medically unnecessary tests.
To justify the medically unnecessary tests, co-conspirators at Ritecare instructed the patient recruiters to have the patients feign certain symptoms. Haber admitted that co-conspirators also directly instructed patients to feign symptoms as well. The kickbacks paid to the recruiters and the patients were contingent upon the Medicare beneficiaries identifying the symptoms necessary to justify medically unnecessary tests. Consequently, the patients’ medical records contained false or fabricated symptoms allowing Ritecare to deceive Medicare as to the legitimacy and medical necessity of the tests it performed. The most expensive tests were nerve conduction studies.
Between approximately August 2007 and approximately October 2009, Haber submitted and/or caused to be submitted approximately $7.42 million in fraudulent claims through Ritecare to the Medicare program for medical and testing services that were procured through the payment of kickbacks, were medically unnecessary, and justified by deception and patient coaching. Medicare actually paid approximately $5.33 million on those claims.
Today’s sentencing was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Acting Special Agent in Charge of the FBI’s Detroit Field Office Edward J. Hanko; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (OIG) Chicago Regional Office.
This case was prosecuted by Assistant Chief Gejaa T. Gobena of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Philip A. Ross of the Eastern District of Michigan. It was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,330 defendants who have collectively billed the Medicare program for more than $4 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

Portsmouth, Va., Bail Bondsman Pleads Guilty to Bribing Public Officials

A bail bondsman in Portsmouth, Va., pleaded guilty today in the Eastern District of Virginia for bribing public officials in exchange for receiving favorable treatment, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Neil H. MacBride for the Eastern District of Virginia announced today.
Ulysses “Tugger” Stephenson, 52, of Portsmouth, pleaded guilty before U.S. Magistrate Judge Bradford Stillman. The sentencing is scheduled in front of U.S. District Judge Rebecca Smith on Nov. 2, 2012.
Stephenson was charged in a criminal information filed on July 9, 2012, with one count of conspiracy to commit federal programs bribery and one count of federal programs bribery. He faces a maximum penalty of five years in prison and a fine of $250,000 for the conspiracy, and a maximum penalty of 10 years in prison and a fine of $250,000 for the bribery.
According to a statement of facts filed with his plea agreement, Stephenson earned money by charging arrestees a percentage of the amount of bond set by a magistrate. Thus, the larger the bond amount set, and the more arrestees that were referred to him as prospective clients, the more money Stephenson would earn. To obtain additional clients and therefore maximize his profits, Stephenson gave cash and gifts to Deborah Clark—a local magistrate who pleaded guilty to federal programs bribery on May 2, 2012—in exchange for her referring arrestees as prospective clients and seeking and accepting Stephenson’s advice on the amount of bond to set in particular cases. During this time period, Stephenson gave up to $150 per month to Clark, as well as expense money for trips and numerous cash payments for gas and meals. Additionally, in exchange for referrals, Stephenson made cash payments to an officer in the Portsmouth Sheriff’s Office. From January 2009 through July 2010, he paid that officer up to $150 per week.
Stephenson is subject to prosecution for bribery under a federal statute because the two people he bribed were agents of an organization or state receiving annual benefits in excess of $10,000 under federal programs involving grants and other forms of assistance.
This case was investigated by the FBI. Trial Attorneys Peter Mason and Monique Abrishami of the Public Integrity Section in the Justice Department’s Criminal Division and Assistant U.S. Attorney Alan M. Salsbury and Special Assistant U.S. Attorney Amy E. Cross of the Eastern District of Virginia are prosecuting the case.

Owners and Employees of Houston Mental Health Company and Patient Recruiters Charged for Alleged Roles in $97 Million Medicare Fraud Scheme

A superseding indictment was unsealed today charging two owners of a Houston mental health care company, Spectrum Care P.A., some of its employees and the owners of Houston group care homes for their alleged participation in a $97 million Medicare fraud scheme, announced the Department of Justice, the Department of Health and Human Services (HHS) and the FBI.
Mansour Sanjar, 79, Cyrus Sajadi, 64, and Chandra Nunn, 34, were originally charged in December 2011, and are expected to make their initial appearances on the superseding indictment in the coming days. The indictment was originally retuned on July 24, 2012, and was unsealed today.
Adam Main, 31, Shokoufeh Hakimi, 65, Sharonda Holmes, 38, and Shawn Manney, 50, all from the Houston area, were arrested today and are expected to make their initial appearances in U.S. District Court for the Southern District of Texas in Houston either today or tomorrow.
The superseding indictment charges Sanjar, Sajadi, Main, Terry Wade Moore, 51, Hakimi and Nunn each with one count of conspiracy to commit health care fraud; Sanjar, Sajadi, Main and Moore are charged with various counts of health care fraud; Sanjar, Sajadi, Hakimi, Nunn, Holmes and Manney each are charged with one count of conspiracy to defraud the United States and to pay health care kickbacks; and Sanjar, Sajadi, Hakimi, Nunn, Holmes and Manney are charged with various counts of payment and receipt of healthcare kickbacks. The superseding indictment also seeks forfeiture.
According to the indictment, Sanjar and Sajadi orchestrated and executed a scheme to defraud Medicare beginning in 2006 and continuing until their arrest in December 2011. Sanjar and Sajadi owned Spectrum, which purportedly provided partial hospitalization program (PHP) services. A PHP is a form of intensive outpatient treatment for severe mental illness. The Medicare beneficiaries for whom Spectrum billed Medicare for PHP services did not qualify for or need PHP services. Sanjar, Sajadi, Main and Moore signed admission documents and progress notes certifying that patients qualified for PHP services, when in fact, the patients did not qualify for or need PHP services. Sanjar and Sajadi also billed Medicare for PHP services when the beneficiaries were actually watching movies, coloring and playing games – activities that are not covered by Medicare.
Sanjar, Sajadi and Hakimi paid kickbacks to Nunn, Holmes, Manney and other group care home operators and patient recruiters in exchange for delivering ineligible Medicare beneficiaries to Spectrum, according to the indictment. In some cases, the patients received a portion of those kickbacks. The indictment alleges that Spectrum billed Medicare for approximately $97 million in services that were not medically necessary and, in some cases, not provided.
Today’s charges were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Kenneth Magidson of the Southern District of Texas; Special Agent in Charge Stephen L. Morris of the FBI’s Houston Field Office; Special Agent in Charge Mike Fields of the Dallas Regional Office of HHS’s Office of the Inspector General (HHS-OIG), the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU); Joseph J. Del Favero, Special Agent in Charge of the Chicago Field Office of the Railroad Retirement Board, Office of Inspector General (RRB-OIG); and Scott Rezendes, Special Agent in Charge of Field Operations of the Office of Personnel Management, Office of Inspector General (OPM-OIG).
An indictment is merely a formal accusation. Defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The case is being prosecuted by Trial Attorneys Laura M.K. Cordova and Allan J. Medina and Deputy Chief Sam S. Sheldon of the Criminal Division’s Fraud Section with assistance from Trial Attorneys Jennifer Ambuehl and Aixa Maldonado-Quinones of the Criminal Division’s Asset Forfeiture and Money Laundering Section. The case was investigated by the FBI, HHS-OIG, MFCU, RRB-OIG and OPM-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Texas.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,330 defendants who have collectively billed the Medicare program for more than $4 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

Nationwide Synthetic Drug Takedown

19 million packets of synthetic drugs seized and $36 million in cash

WASHINGTON –  More than 90 individuals were arrested and more than five million packets of finished designer synthetic drugs were seized in the first-ever nationwide law enforcement action against the synthetic designer drug industry responsible for the production and sale of synthetic drugs that are often marketed as bath salts, Spice, incense, or plant food.More than $36 million in cash was also seized.   

As of today, more than 4.8 million packets of synthetic cannabinoids (ex. K2, Spice) and the products to produce nearly 13.6 million more, as well as 167,000 packets of synthetic cathinones (ex. bath salts), and the products to produce an additional 392,000 were seized.   

Operation Log Jam was conducted jointly by the U.S. Drug Enforcement Administration and U.S. Immigration and Customs Enforcement (ICE), with assistance from the Internal Revenue Service Criminal Investigations, U.S. Postal Inspection Service,U.S. Customs and Border Protection, FBI, Food and Drug Administration’s Office of Criminal Investigations, as well as countless state and local law enforcement members in more than 109 U.S. cities and targetedevery level of the synthetic designer drug industry, including retailers, wholesalers, and manufacturers.  

“Although tremendous progress has been made in legislating and scheduling these dangerous substances, this enforcement action has disrupted the entire illegal industry, from manufacturers to retailers,” said DEA Administrator Michele M. Leonhart. “Together with our federal, state and local law enforcement partners, we are committed to targeting these new and emerging drugs with every scientific, legislative, and investigative tool at our disposal.”

“Today, we struck a huge blow to the synthetic drug industry.The criminal organizations behind the importation, distribution and selling of these synthetic drugs have scant regard for human life in their reckless pursuit of illicit profits,” said Acting Director of ICE’s Office of Homeland Security Investigations James Chaparro. “ICE is committed to working with our law enforcement partners to bring this industry to its knees.”

"The synthetic drug industry is an emerging area where we can leverage our financial investigative expertise to trace the path of illicit drug proceeds by identifying the financial linkages among the various co-conspirators,” said Richard Weber, Chief, IRS Criminal Investigation.  "We will continue working with our law enforcement partners to disrupt and ultimately dismantle the highest level drug trafficking and drug money laundering organizations that pose the greatest threat to Americans and American interests."

“The U.S. Postal Inspection Service aggressively investigates the use of the U.S. Mail system for the distribution of illegal controlled substances and its proceeds. Our agency uses a multi-tiered approach to these crimes: protection against the use of the mail for illegal purposes and enforcement of laws against drug trafficking and money laundering. This includes collaboration with other agencies,” said Chief Postal Inspector Guy J. Cottrell of the U.S. Postal Inspection Service.

“The mission of U.S. Customs and Border Protection is to guard our country’s borders from people and goods that could harm our way of life,” said U.S. Customs and Border Protection Acting Commissioner David V. Aguilar.  “We are proud to be part of an operation that disrupts the flow of synthetic drugs into the country and out of the hands of the American people.”

Over the past several years, there has been a growing use of, and interest in, synthetic cathinones (stimulants/hallucinogens) sold under the guise of “bath salts” or “plant food.” Marketed under names such as “Ivory Wave,” “Purple Wave,” “Vanilla Sky,” or “Bliss,” these products are comprised of a class of dangerous substances perceived to mimic cocaine, LSD, MDMA, and/or methamphetamine. Users have reported impaired perception, reduced motor control, disorientation, extreme paranoia, and violent episodes. The long-term physical and psychological effects of use are unknown but potentially severe.

These products have become increasingly popular, particularly among teens and young adults and those who mistakenly believe they can bypass the drug testing protocols that have been set up by employers and government agencies to protect public safety.  They are sold at a variety of retail outlets, in head shops, and over the Internet. However, they have not been approved by the Food and Drug Administration (FDA) for human consumption or for medical use, and there is no oversight of the manufacturing process.

Smokable herbal blends marketed as being “legal” and providing a marijuana-like high have also become increasingly popular, particularly among teens and young adults, because they are easily available and, in many cases, they are more potent and dangerous than marijuana.  These products consist of plant material that has been coated with dangerous psychoactive compounds that mimic THC, the active ingredient in marijuana. Just as with the synthetic cathinones, synthetic cannabinoids are sold at a variety of retail outlets, in head shops and over the Internet.   Brands such as “Spice,” “K2,” “Blaze,” and “Red X Dawn” are labeled as incense to mask their intended purpose. 

While many of the designer drugs being marketed today that were seized as part of Operation Log Jam are not specifically prohibited in the Controlled Substances Act (CSA), the Controlled Substance Analogue Enforcement Act of 1986 (AEA) allows these drugs to be treated as controlled substances if they are proven to be chemically and/or pharmacologically similar to a Schedule I or Schedule II controlled substance.  A number of cases that are part of Operation Log Jam will be prosecuted federally under this analogue provision, which specifically exists to combat these new and emerging designer drugs.

DEA has used its emergency scheduling authority to combat both synthetic cathinones (the so-called bath salts like Ivory Wave, etc.) and synthetic cannabinoids (the so-called incense products like K2, Spice, etc.), temporarily placing several of these dangerous chemicals into Schedule I of the CSA. Congress has also acted, permanently placing 26 substances into Schedule I of the CSA.

In 2010, poison centers nationwide responded to about 3,200 calls related to synthetic “Spice” and “bath salts.”  In 2011, that number jumped to more than 13,000 calls. Sixty percent of the cases involved patients 25 and younger.

Wednesday, July 25, 2012

KC MAN SENTENCED TO 10 YEARS FOR ILLEGAL FIREARM

KANSAS CITY, Mo. – David M. Ketchmark, Acting United States Attorney for the Western District of Missouri, announced a Kansas City, Mo., man who was arrested after ramming a police car twice then leading officers on a high-speed chase was sentenced in federal court today for illegally possessing a firearm.

Preston B. Carter, 34, of Kansas City, was sentenced by U.S. District Judge Gary A. Fenner to 10 years in federal prison without parole, which is the maximum penalty.

On Jan. 5, 2012, Carter pleaded guilty to being a felon in possession of a firearm. Carter admitted that he was in possession of a Titan .25-caliber semi-automatic pistol.

Carter was arrested on March 23, 2011, when Kansas City, Mo., police officers conducted a car check on a stolen vehicle at a gas station at 3027 Van Brunt, Kansas City. As one of the officers pulled in behind the stolen vehicle and activated his emergency equipment, Carter (the driver of the stolen vehicle) immediately put the vehicle in reverse and struck the front of the marked patrol car. Carter then pulled forward, reversed the stolen vehicle and struck the front of the patrol car a second time just as an officer was stepping out of the car, knocking him to the ground.

Carter then fled in the stolen vehicle and led police officers in a pursuit that lasted several minutes. Carter and a second passenger fled from the vehicle on foot after driving down a dead end street near 30th and Poplar. Carter was eventually apprehended and, during a custodial search, officers found the handgun concealed in his left front pants pocket.

Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearms or ammunition. Carter has prior felony convictions for stealing, possessing a controlled substance, tampering, driving with a revoked license, assaulting a law enforcement officer and property damage.

This case was prosecuted by Assistant U.S. Attorney Justin G. Davids. It was investigated by the Kansas City, Mo., Police Department and the ATF.

Project Ceasefire, launched in October 1999, is a cooperative initiative by federal and local law enforcement and the Kansas City Crime Commission that targets for federal prosecution persons who unlawfully use or possess firearms.

STRIP CLUB OWNER PLEADS GUILTY TO ILLEGAL FIREARMS

JEFFERSON CITY, Mo. – David M. Ketchmark, Acting United States Attorney for the Western District of Missouri, announced that the owner of a strip club in Sunrise Beach, Mo., pleaded guilty in federal court today to illegally possessing 31 firearms.

Jimmy Duane Davis, 55, of Sunrise Beach, pleaded guilty before U.S. Magistrate Judge Matt J. Whitworth to being a felon in possession of firearms. Davis is the owner of the Eclipse Gentleman's Club.

Federal law enforcement agents executed a search warrant at Davis's residence and neighboring business on Aug. 19, 2010, after receiving a report that Davis was in possession of firearms. A gun safe in the basement contained 30 shotguns, rifles and handguns. Agents also observed numerous rounds of ammunition around the room, and a Springfield Armory 9 mm semi-automatic pistol in a case on top of the gun safe. In addition, five shotgun shells were found in an upstairs bedroom.

According to the plea agreement, Davis purchased 12 firearms-specific hunting permits between 2006 and 2009.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearms or ammunition. Davis has two prior felony convictions for trafficking in methamphetamine and a prior felony conviction for selling marijuana.

Under federal statutes, Davis is subject to a sentence of up to 10 years in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

This case is being prosecuted by Assistant U.S. Attorney Jim Lynn. It was investigated by the ATF and IRS-Criminal Investigation.

Three Indicted for Conspiring to Distribute Controlled substances

MINNEAPOLIS – A federal indictment unsealed earlier today charges three Twin Cities' residents with conspiring to distribute heroin, crack cocaine, methamphetamine, cocaine, and other controlled substances. Rikki Lee Gilow, age 19, and Eric Michelle Hunter, age 41, both of Bloomington, and Jerry Anthony Harvey, age 38, of Minneapolis, were charged with one count of conspiracy to distribute controlled substances. In addition, Gilow and Hunter were charged with 15 counts of distribution of controlled substances and two counts of using and carrying a firearm during and in relation to a drug-trafficking crime. Hunter was also charged with two counts of being a felon in possession of a firearm. And Harvey was charged with one count of distribution of heroin. The indictment, which was filed on July 16, 2012, was unsealed following the defendants' initial appearance in federal court.

The indictment alleges that from September 14, 2011, through July 16, 2012, the defendants conspired with each other to distribute controlled substances, primarily heroin. On 15 occasions, Gilow and Hunter allegedly distributed controlled substances, including heroin, crack cocaine, cocaine, methamphetamine, benzylpiperazine (commonly known as BZP), and other substances with the common names of "Foxy" and "Ivory Wave." On one of those occasions, Harvey allegedly joined them to distribute approximately 74.65 grams of heroin.

In addition, the indictment alleges that on May 2, 2012, Gilow and Hunter carried a .357-caliber, semi-automatic pistol, and on May 22, 2012, they carried a nine-millimeter, semi-automatic pistol. Because Hunter is a felon, he is prohibited under federal law from possessing firearms at any time. He was convicted in Mississippi of grand larceny in 1990, possession of cocaine in 1994, felon in possession of a deadly weapon in 1994, and intimidation and assault on a law enforcement officer in 1995. In addition, he was convicted in federal court in the District of Minnesota in 1998 for possession with intent to distribute crack cocaine.

If convicted in the current case, the defendants face a potential maximum penalty of 40 years in prison on the conspiracy charge and 20 years on each of the distribution charges. Gilow and Hunter also face a potential maximum penalty of life in prison on the firearm charges, while Hunter faces a potential maximum penalty of ten years on each charge of being a felon in possession. All sentences will be determined by a federal district court judge.

This case is the result of an investigation by the United States ATF and the Dakota County Drug Task Force. It is being prosecuted by Assistant U.S. Attorney Thomas M. Hollenhorst.

St. Paul Felon Indicted for Possessing .38-caliber Pistol, Ammunition

MINNEAPOLIS – Recently in federal court, a 31-year-old St. Paul felon was indicted for possessing a .38-caliber, semi-automatic pistol. On July 16, 2012, Jose Antonio Caban was charged with one count of being a felon in possession of a firearm. Yesterday, Caban was arrested and made his initial appearance in federal court.

The indictment alleges that on June 6, 2012, Caban possessed a gun. Because he is a felon, Caban is prohibited under federal law from possessing firearms at any time. He was previously convicted in Ramsey County in 2011 for terroristic threats.

If convicted, Caban faces a potential maximum penalty of ten years in prison. All sentences will be determined by a federal district court judge. This case is the result of an investigation by the St. Paul Police Department and the United States ATF. It is being prosecuted by Assistant U.S. Attorney Richard A. Newberry.

Note, this case is part of PSN, a comprehensive, strategic approach to reducing gun crime in America. PSN, launched by the U.S. Department of Justice in 2001, encourages cooperative, multi-jurisdictional law enforcement and crime prevention efforts

Tuesday, July 24, 2012

Detroit-Area Health Care Clinic Owner Sentenced to Serve 60 Months in Prison for Role in $8.5 Million Diagnostic Testing Fraud Scheme

WASHINGTON – The owner of a Detroit-area health care clinic was sentenced today to serve 60 months in prison for his leading role in an $8.5 million Medicare fraud scheme, the Departments of Justice and Health and Human Services (HHS) announced.
 
Miami-area resident Emilio Haber, 53, was sentenced by U.S. District Judge Patrick Duggan in the Eastern District of Michigan in Detroit. In addition to his prison term, Haber was sentenced to serve three years of supervised release and was ordered to pay $6,341,000 in restitution, joint and several with his co-defendants, and was ordered to forfeit approximately $99,000 seized from bank accounts he controlled.

On Oct. 26, 2012, Haber pleaded guilty to one count of conspiracy to commit health care fraud. According to plea documents, Haber conceived and oversaw fraud schemes at two clinics, Ritecare LLC and CompleteHealth LLC. Haber incorporated and opened Ritecare and CompleteHealth in the state of Michigan in 2007. CompleteHealth merged into Ritecare in July 2008.

According to court documents, while operating CompleteHealth and Ritecare, Haber and his co-conspirators billed Medicare for medically unnecessary tests and services, including, but not limited to, nerve conduction studies. Haber obtained patients for the clinics through the payment of kickbacks to Medicare beneficiaries and patient recruiters. Haber admitted that he and other co-conspirators paid patient recruiters $100-$150 per patient obtained, with $50-$75 to go to the patient in exchange for visiting Ritecare and subjecting themselves to medically unnecessary tests.

To justify the medically unnecessary tests, Haber admitted that he and other co-conspirators told patient recruiters to instruct the patients to feign certain symptoms. Haber and other co-conspirators also directly instructed patients to feign symptoms. The kickbacks paid to the recruiters and the patients were contingent upon the Medicare beneficiaries identifying the symptoms necessary to justify medically unnecessary tests. Consequently, the patients’ medical records contained false or fabricated symptoms allowing Ritecare to deceive Medicare as to the legitimacy and medical necessity of the tests it performed.

The department said that between approximately August 2007 and approximately October 2009, Haber and his co-conspirators at CompleteHealth and Ritecare submitted and/or caused to be submitted approximately $8.5 million in fraudulent claims to the Medicare program for medical and testing services that were medically unnecessary and procured through the payment of kickbacks. Medicare paid approximately $6.3 million of those claims.

Today’s sentencing was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Acting Special Agent in Charge of the FBI’s Detroit Field Office Edward J. Hanko; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (OIG) Chicago Regional Office.

This case was prosecuted by Assistant Chief Gejaa T. Gobena of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Philip A. Ross of the Eastern District of Michigan. It was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,330 defendants who have collectively billed the Medicare program for more than $4 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

ATTORNEY GENERAL ERIC HOLDER AND PHILADELPHIA MAYOR MICHAEL NUTTER ANNOUNCE PARTNERSHIP TO COMBAT VIOLENT CRIME

WASHINGTON – Attorney General Eric Holder and Philadelphia Mayor Michael Nutter today announced the Department of Justice (DOJ) and city of Philadelphia's Violent Crime Reduction Partnership (VCRP), which directs additional federal agents and technological resources to assist local law enforcement in combating violent crime. Attorney General Holder and Mayor Nutter were joined by VCRP participating agency leaders: U.S. Attorney for the Eastern District of Pennsylvania Zane David Memeger, Philadelphia Police Commissioner Charles Ramsey, Philadelphia District Attorney Seth Williams, Special Agents-in-Charge for the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), FBI, the Drug Enforcement Administration (DEA) and the U.S. Marshal for the Eastern District of Pennsylvania.

The VCRP, which was formed on June 4, 2012, is made up of more than 50 federal law enforcement officials, including agents, investigators and intelligence analysts and representatives of the Justice Department's Criminal Division. These federal agents are working in close collaboration with the Philadelphia Police Department and Philadelphia District Attorney's Office to prevent and combat violent and drug-related crime across the Philadelphia metropolitan area. During this four-month "surge" of federal law enforcement resources, these federal agencies are helping to build capacity, enhance training, coordinate community outreach efforts, bolster intelligence analysis capabilities and helping plan and execute sophisticated criminal investigations and prosecutions. Additionally, federal funding for the VCRP initiative provides new, state-of-the-art equipment designed to support ballistics identification in gun-related crimes. One such device is called the Integrated Ballistics Identification System which has the latest automation features and 3-D imaging technology, allowing firearms examiners to capture higher quality images of cartridge cases enhancing the ability of the Philadelphia Police Department and its partners to solve violent gun-related crimes.

In just the past six weeks, the partnership is already producing results. To date, VCRP has seized more than 80 firearms and netted more than 300 arrests for violent crime, drug, firearm and other offenses. As federal agencies are working closely with the Philadelphia Police Department in the target neighborhoods, the majority of those cases are being prosecuted in the local court system. The most recent federal case resulting from the ongoing VCRP arose on July 18, 2012, when ATF agents and Philadelphia police officers arrested eight suspects who were allegedly planning an armed robbery of drug traffickers. Each of the eight defendants in U.S. v. Whitfield was charged by criminal complaint.
"In these times of budgetary challenges - when police departments and other agencies are confronting growing demands with increasingly limited resources – the need for coordination among all relevant authorities has never been more critical," said Attorney General Holder. "This surge of federal resources in Philadelphia – as well as others going on in certain cities -- will enhance our ability to work with local law enforcement by targeting federal agents and others to the areas where they're most needed so that we can better protect these communities."

"The Violent Crime Reduction Partnership is the next stage in efforts by the Philadelphia Police Department, federal law enforcement partners like ATF, DEA, FBI and U.S. Marshals, and prosecutorial agencies like the District and U.S. Attorney's Offices, to target the most violent offenders in the City of Philadelphia and bring them to justice," said Mayor Nutter. "We are grateful for the partnership and support of Attorney General Eric Holder and the entire Department of Justice as we work together to make the streets of our city safer."

"The Violent Crime Reduction Partnership is already proving to be an effective tool for investigating and prosecuting serious violent offenders in Philadelphia's highest crime neighborhoods," said U.S. Attorney Memeger. "As U.S. Attorney, I remain committed to improving the quality of life for the citizens of my district, particularly for those who should not have to live with rampant violence and drug trafficking in their neighborhoods. My office will continue to support Police Commissioner Ramsey and the city of Philadelphia to combat the violence and other crimes that plague the city. I would like to commend the tireless efforts of the agents working for ATF, FBI, DEA and the Marshals Service who are making this initiative a success."

"ATF, along with the Philadelphia Police Department and our DOJ partners, will focus on those who have no qualms about diminishing the quality of life in Philadelphia," said ATF Special Agent-in-Charge Sheree L. Mixell. "Those violent career criminals who illegally possess, purchase and use firearms to carry out their criminal activities, will be identified and targeted for federal prosecution through this very important initiative."

"The FBI, in this joint and coordinated effort to attack violent crime in Philadelphia, will work with our partners to disrupt and dismantle the criminal enterprises and organizations that seek to profit from violent crimes," said FBI Special Agent-in-Charge of the Philadelphia Division George C. Venizelos. "This joint initiative not only rids our communities of criminal predators, but also sends the clear message that federal, state, county and local law enforcement agencies are working together to aggressively address the violent crime and drug problems that plague our communities."

"Gun violence in Philadelphia has taken the lives of many people and brought pain and suffering to many families," said Acting Special Agent-in-Charge of the DEA Philadelphia Division Vito S. Guarino. "Guns are frequently used by drug traffickers and organizations to protect their drugs, cash, territory, and also to intimidate citizens from providing information to police and to deter them from testifying in court. The DEA has committed its investigative resources to the Philadelphia Police Department and is working cooperatively along with other federal partners to confront gun violence and make Philadelphia the safe city that its citizens deserve."

"The U.S. Marshals Service is committed to supporting the surge and improving the safety of the citizens of Philadelphia by continually targeting and apprehending the most dangerous fugitive felons, particularly those wanted for violent gun crimes," said U.S. Marshal for the Eastern District of Pennsylvania David B. Webb.

"It is my hope that the Violent Crime Reduction Partnership will help us reduce the senseless acts of violence that currently plague the city of Philadelphia. By continuing to combine our resources and working together locally and nationally, I truly believe we will improve the safety and quality of life for all of our citizens," said Philadelphia District Attorney Seth Williams.

Earlier this year, ATF personnel completed a similar four-month "surge" in Oakland, Calif., which Oakland Police Department officials have credited with contributing to a significant reduction in crime. The Justice Department is currently examining ways to provide this type of targeted assistance and relief to other metropolitan areas, as needed.
Copies of press releases and related documents can be found at www.justic.gov/usao/pae.
A complaint is merely an accusation. All defendants are presumed innocent until and unless proven guilty in a court of law.

Monday, July 23, 2012

Four women indicted for conspiring to distribute controlled substances in the Twin Ports

MINNEAPOLIS – A federal indictment unsealed late yesterday charges four women with conspiring to distribute controlled substances, including oxycodone, oxymorphone, and heroin, in the in the Twin Ports' area of Duluth, Minnesota, and Superior, Wisconsin. The indictment charges Taylor Kay Hanson, age 21; Talia Jackie Jaros, age 20; Danielle Ann Lamberton, age 24; and Elizabeth Rose Schlais, age 20, no known addresses, with one count of conspiracy to distribute controlled substances and one count of conspiracy to commit money laundering. The indictment, which was filed on July 16, 2012, was unsealed following the defendants' initial court appearances.

Allegedly, from 2010 through September of 2011, the defendants conspired with each other and others to distribute the controlled substances. They also purportedly conspired to conduct financial transactions involving their drug trafficking proceeds. Specifically, the indictment alleges they wire transferred money to other co-conspirators.
Twenty-five co-conspirators have already pleaded guilty to roles in the operation, and seven of them have been sentenced. A jury trial is scheduled for one co-conspirator next month.

Authorities began investigating this group in 2010, after law enforcement noted an increase in Opana trafficking in Minnesota and Wisconsin. Opana contains the controlled substance oxymorphone. Investigators conducted surveillance and dozens of controlled purchases before making any arrests. On September 27, 2011, law enforcement also executed search warrants at nine properties in Minnesota and Wisconsin, where authorities seized firearms, ammunition, approximately $30,000, as well as narcotics.

If convicted, the defendants face a potential maximum penalty of 20 years in prison on each charge. All sentences will be determined by a federal district court judge.

This case is the result of an investigation by the Lake Superior Drug and Gang Task Force, the Duluth Police Department, the Hermantown Police Department, the Superior, Wisconsin, Police Department, the Internal Revenue Service-Criminal Investigation Division, and the United States . It is being prosecuted by Assistant U.S. Attorney Allen A. Slaughter.

Man sentenced to federal prison for carjacking a taxi

MINNEAPOLIS – Late last week in federal court, a 45-year-old man was sentenced for carjacking an Airport Taxi taxicab on January 29, 2011. On July 20, 2012, United States District Court Judge Patrick J. Schiltz sentenced Antonius Brett El-X, address unknown, to 176 months in prison on one count of interference with commerce by robbery pursuant to the Hobbs Act. El- X was indicted on March 22, 2011, and pleaded guilty on January 10, 2012.

In his plea agreement, El-X, also known as Brett Anthony Anderson, admitted that on January 29, 2011, he requested that an Airport Taxi pick him up at a Crystal hotel. While traveling in the front passenger seat, he then lifted his leg over the center console and slammed on the brakes. He tried to push the driver out of the vehicle, threatening the use of force. The driver fled and called police. Officers used GPS to track the cab, which El-X ultimately crashed before being arrested.

The Hobbs Act, passed by Congress in 1946, provides federal jurisdiction for cases involving violent, habitual criminals who commit armed robbery in businesses engaged in interstate commerce. Federal prosecution of these offenders is sometimes beneficial since the penalties may be tougher than under state law. To that end, the U.S. Attorney's Office and its County Attorney partners work together to determine where each violent offender will most effectively be prosecuted.
This case was the result of an investigation by the Crystal Police Department and the U.S. ATF. It was prosecuted by Assistant U.S. Attorney Julie E. Allyn.

Florida Tax Preparer Sentenced to Federal Prison for Stolen Identity Refund Fraud

Ernst Pierre, a Port St. Lucie, Fla., tax preparer, was sentenced today to 51 months in federal prison for wire fraud and aggravated identity theft, the Justice Department and Internal Revenue Service – Criminal Investigation (IRS-CI) announced. Pierre was charged with a scheme to file false federal income tax returns using stolen identity information. Pierre was also ordered to pay over $266,000 in restitution to the IRS.
According to the indictment and Pierre’s admissions as part of his guilty plea, from October 2009 through May 2011, Pierre filed false tax returns for clients of Tax Max, a Port St. Lucie tax return preparation business he owned and operated. Pierre obtained the names and Social Security numbers of relatives of clients for whom he had prepared and submitted federal income tax returns and then fraudulently used those names and Social Security numbers as “dependents” on other client tax returns and on his own tax return. Pierre used these dependents to fraudulently inflate tax refunds.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, thanked special agents of IRS-CI, who investigated the case, and Tax Division Trial Attorneys Justin K. Gelfand and Thomas J. Krepp, who prosecuted the case.

Florida Tax Preparer Sentenced to Federal Prison for Stolen Identity Refund Fraud

Ernst Pierre, a Port St. Lucie, Fla., tax preparer, was sentenced today to 51 months in federal prison for wire fraud and aggravated identity theft, the Justice Department and Internal Revenue Service – Criminal Investigation (IRS-CI) announced. Pierre was charged with a scheme to file false federal income tax returns using stolen identity information. Pierre was also ordered to pay over $266,000 in restitution to the IRS.
According to the indictment and Pierre’s admissions as part of his guilty plea, from October 2009 through May 2011, Pierre filed false tax returns for clients of Tax Max, a Port St. Lucie tax return preparation business he owned and operated. Pierre obtained the names and Social Security numbers of relatives of clients for whom he had prepared and submitted federal income tax returns and then fraudulently used those names and Social Security numbers as “dependents” on other client tax returns and on his own tax return. Pierre used these dependents to fraudulently inflate tax refunds.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, thanked special agents of IRS-CI, who investigated the case, and Tax Division Trial Attorneys Justin K. Gelfand and Thomas J. Krepp, who prosecuted the case.

U.S. Restrains More Than $3 Million in Corruption Proceeds Related to Former Governor of Nigeria

WASHINGTON – Through an application to register and enforce two orders from United Kingdom courts, the Department of Justice has secured a restraining order against more than $3 million in corruption proceeds located in the United States related to James Onanefe Ibori, the former governor of Nigeria’s oil-rich Delta State, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Immigration and Customs Enforcement (ICE) Director John Morton.

The application, which was filed under seal on May 16, 2012, in U.S. District Court in the District of Columbia, seeks to restrain assets belonging to Governor Ibori and Bhadresh Gohil, Ibori’s former English solicitor, that are proceeds of corruption. Specifically, it seeks to restrain a mansion in Houston and two Merrill Lynch brokerage accounts. U.S. District Judge Lamberth granted the application and issued a restraining order under seal on May 21, 2012. The department was notified today that its application to unseal the restraining order was granted.
 
The United States is working with the United Kingdom’s Crown Prosecution Service and the Metropolitan Police Service to forfeit these corruption proceeds.

According to the application, Governor Ibori served as the governor of Nigeria’s oil-rich Delta State from 1999 to 2007, and misappropriated millions of dollars in Delta State funds. He laundered those proceeds through a myriad of shell companies, intermediaries and nominees in several jurisdictions, including the United Kingdom, with the help of Gohil. Although Nigeria’s Constitution prohibits state governors from maintaining foreign bank accounts and serving as directors of private companies, Governor Ibori and his associates accumulated millions of dollars in assets in the United Kingdom and the United States, according to the application.

Governor Ibori was convicted in the United Kingdom of money laundering and conspiracy to defraud and was sentenced by a British court on April 18, 2012, to 13 years in prison. Gohil was also convicted in November 2010 of money laundering and prejudicing a money laundering investigation and was sentenced by a British court to 10 years in prison.
“Instead of working to benefit the people of the Nigerian Delta, Governor Ibori pilfered state funds and accumulated immense wealth in the process,” said Assistant Attorney General Breuer. “He conspired with Mr. Gohil to funnel millions of dollars in corruption proceeds out of Nigeria and into bank accounts and assets maintained in the names of shell companies and nominees. Through the Criminal Division’s Kleptocracy Asset Recovery Initiative, our message is clear: the United States will not be used as a safe haven for the ill-gotten gains of corrupt foreign officials.”

“This serves as a warning to those corrupt foreign officials who abuse their power for personal financial gain and then attempt to place those funds in the U.S. financial system,” said ICE Director Morton. “ICE’s Homeland Security Investigations (HSI) special agents will continue to work with our law enforcement partners at the Department of Justice Criminal Division’s Asset Forfeiture and Money Laundering Section to investigate and prosecute those involved in such illicit activities and hold corrupt foreign officials accountable by denying them the satisfaction of their illegal earnings.”
The case is being prosecuted by trial attorneys Woo S. Lee and Elizabeth Aloi of the Criminal Division’s Asset Forfeiture and Money Laundering Section. The case was investigated by ICE HSI’s Foreign Corruption Investigations Group, HSI Asset Identification and Removal Group in Miami and HSI Attaché London.

This case is part of the Justice Department’s Kleptocracy Asset Recovery Initiative. This initiative is carried out by a dedicated team of prosecutors in the Criminal Division’s Asset Forfeiture and Money Laundering Section, working in partnership with federal law enforcement agencies to forfeit the proceeds of foreign official corruption and where appropriate return those proceeds to benefit those harmed.

Individuals with information about possible proceeds of foreign corruption located in or laundered through institutions in the United States should contact federal law enforcement or send an email to kleptocracy@usdoj.gov.

ICE HSI’s Foreign Corruption Investigations Group in Miami targets corrupt foreign officials around the world that attempt to utilize U.S. financial institutions to launder illicit funds. The group conducts investigations into the laundering of proceeds emanating from foreign public corruption, bribery or embezzlement. The objective is to prevent foreign derived ill-gotten gains from entering the U.S. financial infrastructure, to seize identified assets in the United States and repatriate these funds on behalf of those affected by foreign official corruption.

Sunday, July 22, 2012

Arrest of Bank Robbery, Carjacking Suspect Pedro Luis Valdes


The FBI announces the arrest of Pedro Luis Valdes, 48, of Miami, Florida, for his alleged involvement in two recent bank robberies and a carjacking involving a 3-year-old child (the child was returned safely).

The arrest was made without incident by the FBI, U.S. Secret Service, Miami-Dade PD, Hialeah PD, City of Miami PD, Miami Beach PD, and the South Florida Violent Crime Fugitive Task Force (SFVCFTF) around 9:45 p.m. last night at 3141 SW 8th Street in Miami, Florida.

Valdes is in federal custody and is expected to face federal charges. It is anticipated that his initial appearance will be today (Friday) in federal court in Miami.

The FBI, the U.S. Secret Service, Miami-Dade PD, Hialeah PD, City of Miami PD, and all members of the SFVCFTF continue their investigation. No further information will be released at this time.