Two New York Salesmen Sentenced to Prison in Business Opportunity Fraud Scheme

Scheme Defrauded More than 330 Victims Across the Country

A federal judge in the Eastern District of New York sentenced two sales representatives to prison today for their roles in a vending machine business opportunity fraud scheme, the Department of Justice announced today.

Howard S. Strauss, 66, of Jericho, New York, was sentenced to serve 28 months in prison by U.S. District Court Judge Joan M. Azrack, who also ordered him to pay $2,291,844 in restitution to 230 victims.  Mark Benowitz, 68, of Midlothian, Virginia, was sentenced to serve 24 months in prison and ordered to pay $997,210 in restitution to 101 victims.

Both Strauss and Benowitz pleaded guilty last year to fraud charges in connection with Multivend LLC, doing business as Vendstar, a company based in Deer Park, New York, that sold vending machine business opportunities to consumers throughout the United States until 2010.  Strauss and Benowitz were Vendstar sales representatives who misrepresented the business opportunity’s likely profits, the amount of money that Vendstar’s prior customers were earning, how quickly customers were likely to recover their investment, the quality of locations that were available for the vending machines, and the level of location assistance that customers would receive from locating companies recommended by Vendstar.  Both Strauss and Benowitz also falsely told potential customers that they operated profitable candy vending machine routes themselves.

“These defendants promised the American dream, but knew that what they in fact were offering was a worthless business opportunity,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “The Department of Justice will continue to prosecute those who seek to scam out of everyday Americans the hard-earned money in their retirement accounts and life savings.”

Twenty-two individuals have been charged with fraud in connection with Vendstar, including Vendstar managers and sales representatives, and the operators of locating companies recommended by Vendstar.  Three of those defendants have now been sentenced; 13 defendants are awaiting sentencing; and six defendants are scheduled to stand trial in September.

Principal Deputy Assistant Attorney General Mizer commended the U.S. Postal Inspection Service for its thorough investigation.  The case is being prosecuted by Trial Attorneys Patrick Jasperse and Alan Phelps of the Civil Division’s Consumer Protection Branch.

Former Alabama Police Officer Sentenced to Prison for Stealing Money and Property from Highway Motorists

Jessie Alan Fuller, 25, of Pensacola, Fla., was sentenced today by U.S. District Judge W. Keith Watkins to 37 months in prison and two years supervised release, the Justice Department announced.   Fuller pleaded guilty on April 26, 2012, to one count of conspiracy against rights, a felony, and one count of deprivation of rights under color of law, a misdemeanor.   These charges stemmed from Fuller’s stealing money and property from motorists on Interstate 65 in central Alabama while he was a police officer with the Fort Deposit Police Department.

 During his plea, Fuller admitted that he and another former Fort Deposit police officer agreed to pull over vehicles under the guise of legitimate law enforcement activity and to steal cash from drivers and passengers.   Fuller further admitted that between May and June 2009, he and the other officer committed numerous thefts together, including thefts of $200 each from two separate victims and $120 from a third victim.   In each of these incidents, Fuller and the other officer worked together, acting with each other’s knowledge and cooperation, and shared the stolen money.   In each incident, the two officers used a marked patrol car, wore police clothing and carried a firearm.   Fuller also admitted to stealing a GPS device from a driver whom he pulled over and arrested on March 14, 2009.

“This defendant abused his power as a law enforcement officer for his own financial gain.   He violated not only the law, but also the public trust,” said Thomas E. Perez, Assistant Attorney General for Civil Rights Division.   “The Department of Justice is committed to holding those who abuse their authority and prey on members of the community accountable for their illegal actions.”

“It is terrible to see those sworn to uphold the law, break the law and prey on the public,” stated George L. Beck, U.S. Attorney for the Middle District of Alabama.  “While it is always difficult to prosecute a member of our law enforcement community, my office is dedicated to protecting the community and seeking justice for all.”

On June 12, 2012, an eight-count indictment was unsealed charging Carlos Tyson Bennett, of Greenville, Ala., as the other officer.   Bennett was charged with one count of conspiracy against rights, four counts of deprivation of rights under color of law, and three counts of obstruction of justice.   An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.   Trial is scheduled to begin in Bennett’s case on Sept. 10, 2012.

This case is being investigated by the Alabama Bureau of Investigation; the Butler County, Ala., Sheriff’s Office; and the Lowndes County, Ala., Sheriff’s Office.   The case is being prosecuted by Assistant U.S. Attorney Gray Borden for the Middle District of Alabama and Trial Attorney Chiraag Bains from the Justice Department’s Civil Rights Division.

Addressing Juvenile Justice Concerns in Response to the Shelby County Investigation

The following post appears courtesy of the Civil Rights Division and the Access to Justice Initiative.

Recently, a group of advocates, practitioners, and researchers specializing in juvenile justice issues gathered at the Department of Justice with representatives from the Department’s Civil Rights Division and Access to Justice Initiative (ATJ) for a Juvenile Justice Roundtable discussion.

The meeting was convened to elicit thoughts about potential remedies to the problems relating to the violation of juvenile offenders’ constitutional rights that plague the juvenile justice system.  Many of these problems were cited in the department’s findings released earlier this spring in its investigation of the Juvenile Court of Memphis and Shelby County, Tennessee.

This investigation marks the first time that the department exercised its authority under 42 U.S.C. § 14141 to take measures to safeguard the constitutional rights of juvenile offenders.  Specifically, the law makes it illegal for government actors involved in the administration of juvenile justice to deprive juveniles of their constitutional rights and protections, and allows the attorney general to take legal action to eliminate such behavior when there is reasonable cause to suspect that a violation has occurred.

The department’s investigation of the Juvenile Court of Memphis and Shelby County spanned a roughly two-year period beginning in August 2009, triggered by concerns of local residents and officials regarding the administration of due process and equal protection rights of children in the system.  With the cooperation of the juvenile court, the department reviewed case data from a five-year period, in the process uncovering three categories of constitutional violations:  lack of due process, unequal treatment across racial groups, and harsh conditions of confinement.

Lack of due process existed in many forms.  For example, the department found that children often received notice of the charges being levied against them shortly before their hearing, which left the children without the ability to meaningfully prepare to respond to the charges.   Investigators also found that, over a four-year period, the court detained 815 children for longer than three days before granting them a probable cause hearing.

In another instance, a Magistrate Judge did not allow witnesses to testify on behalf of a juvenile defendant before transferring her case to the adult system, even though the witnesses were present and willing to do so.  The investigation further revealed that some juvenile defenders (the equivalent of public defenders for the juvenile system) failed to be competent and zealous advocates for their clients and that juvenile court staff do not adequately protect children from self-incrimination.

In terms of equal protection, the department found statistically significant racial disparities in the treatment of children, with African American children disproportionately represented in most phases of the Shelby County juvenile justice system.  For instance, statistical analysis revealed that black children were significantly less likely to receive the benefit of more lenient options, such as a warning, than were their white peers.  Black children also were found less likely to receive warnings before being subjected to punishment, more likely to be detained prior to attending a probable cause hearing, and more likely to have their cases recommended for transfer to the adult system.  These disparities, which indicate a violation of the children’s equal protection rights, existed even after factoring in legal and social variables, such as a child’s prior record, age, gender, and school attendance, among other things.

With respect to confinement conditions, the department found that Juvenile Court staff sometimes placed children in “restraint chairs” without supervision for long periods of time, in violation of the Shelby County facility’s own policy.  When strapped into restraint chairs, children are unable to move their arms or legs.  One child, for example, was detained in the chair in isolation for nearly two hours, well in excess of the maximum 20 minutes that facility policy allows.  Other children in the facility were subjected to pressure point control tactics, a method that uses pain compliance and joint manipulation, such as bending a child’s wrist backwards, in order to force the child to cooperate.

In response to these findings, ATJ worked alongside the Civil Rights Division to assemble a group of leaders in the field of juvenile justice to attend a roundtable discussion on potential remedies.  Among the more than 20 groups participating in the discussion were the Campaign for Youth Justice, the Children’s Center for Law and Policy, the Juvenile Law Center, the National Council of Juvenile and Family Court Judges, and the National Juvenile Defender Center.

Focusing on the areas of due process and equal protection, the attendees drew on their expertise in devising several suggestions for ways in which the department might move forward in encouraging and implementing reform in the juvenile justice system.  The department looks forward to continued collaboration with these stakeholders as it strives to build a juvenile justice system that embodies the constitutional values of fairness and justice.

For more information on the Department’s findings, see the April 26, 2012 remarks of Assistant Attorney General for Civil Rights Thomas Perez and the official Shelby County Investigation Report.

For more information on the Justice Department’s Civil Rights Division, please visit www.justice.gov/crt. | Learn more about the Access to Justice Initiative, visit www.justice.gov/atj.

Maine Resident Charged and Arrested for Allegedly Engaging in Cyber “Sextortion” of New Hampshire Victim

WASHINGTON – A Maine resident was charged in a criminal complaint unsealed today in the District of New Hampshire for allegedly engaging in a type of cyber extortion known as “sextortion,” announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney John P. Kacavas of the District of New Hampshire.

 John Bryan Villegas, 21, of Kittery, Maine, was arrested yesterday and made his initial appearance today in federal court in New Hampshire.  Villegas is charged with one count of engaging in computer intrusion involving extortion and one count of making extortionate interstate threats.

 The complaint affidavit alleges that Villegas attempted to extort the victim, a New Hampshire resident, into providing him with sexually explicit photographs and videos of the victim.  He sent the victim interstate e-mail messages in which he threatened to publish on the internet, and distribute to the victim’s neighbors and work and social acquaintances, other sexually explicit photographs of the victim that he obtained from a computer without authorization.

 If convicted, Villegas faces a maximum sentence of two years in prison on the interstate threats charge and five years in prison on the computer intrusion charge, to be followed by up to three years of supervised release, a fine of up to $500,000 and restitution.

 The case was investigated by the U.S. Secret Service and is being prosecuted by Trial Attorney Mona Sedky of the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division and Assistant U.S. Attorney Arnold H. Huftalen of the District of New Hampshire.  The Department would like to thank the cooperation of the Dover, N.H., and Kittery, Maine, police departments and the Naval Criminal Investigative Service (NCIS).

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

Justice Department Files Lawsuit Against Corpus Christi, Texas, Police Department for Sex Discrimination

WASHINGTON – The Justice Department today filed a lawsuit against the city of Corpus Christi, Texas, alleging that the city’s police department engaged in a pattern or practice of employment discrimination against women in violation of Title VII of the Civil Rights Act of 1964.  The lawsuit challenges the police department’s use of a physical ability test for the hiring of entry-level police officers.  According to the complaint, the physical test used by the city between 2005 and 2011 had the effect of excluding qualified women from consideration for hire as entry-level police officers and did not screen candidates for job-related skills.

 Title VII prohibits employment practices that result in a disparate impact on various bases, including sex, unless the employer can prove that such practices really test for what the job requires.  The complaint alleges that the challenged physical ability test does not meet this standard and, thus, qualified women have been unnecessarily kept out of entry-level police officer jobs.

  “This complaint demonstrates that employment practices that unnecessarily exclude qualified candidates on account of sex are unacceptable,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.  “The Justice Department is looking forward to working with the city to resolve this matter in a way that eliminates the use of the unlawful physical ability test and gives women who were screened out of the process an opportunity to become Corpus Christi police officers.”

 In the lawsuit, the Justice Department seeks a court order that would require the city to stop using the challenged physical ability test, develop hiring procedures that comply with Title VII and provide relief that makes victims whole, including offers of hire, retroactive seniority and back pay to individual women who have been harmed as a result of the city’s use of the test.

 Additional information about Title VII and other federal employment laws is available on the Civil Rights Division’s website at www.justice.gov/crt/.