U.S. COMPANIES AND OTHERS INDICTED FOR SUPPLYING MILITARY ARICRAFT TO IRAN

The following excerpt is from the Department of Justice website:

"Department of Justice

Office of Public Affairs

FOR IMMEDIATE RELEASE

Thursday, June 23, 2011

Members of International Procurement Network Indicted for Supplying Iran with U.S. Military Aircraft Components

Total of 12 Defendants in U.S., France, U.A.E. and Iran Charged

MACON, Ga. – Seven individuals and five corporate entities based in the United States, France, the United Arab Emirates (U.A.E.) and Iran have been indicted in the Middle District of Georgia for their alleged roles in a conspiracy to illegally export military components for fighter jets and attack helicopters from the United States to Iran.   One of the defendants and his company were sentenced yesterday, with the individual receiving nearly five years in prison. Another defendant and his company have admitted their illegal conduct and also pleaded guilty in the investigation.

Federal prosecutors today unsealed a superseding indictment in Macon, Ga., charging eight of the defendants with conspiring to violate and violating the Arms Export Control Act (AECA), the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions Regulations, as well as conspiracy to defraud the United States, money laundering and false statement violations.   Charges against the four other defendants, who have pleaded guilty in the case, are contained in the original indictment in the investigation that was filed previously.

The indictment and other enforcement actions were announced by Todd Hinnen, Acting Assistant Attorney General for National Security; Michael J. Moore, U.S. Attorney for the Middle District of Georgia; Brock Nicholson, Special Agent-in-Charge of the U.S. Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI) office in Atlanta; Brian D. Lamkin, Special Agent-in-Charge of the FBI’s Atlanta Field Division; and Robert Luzzi, Special Agent-in-Charge of the Commerce Department, Office of Export Enforcement (OEE) Miami Field Office.

The Defendants

Thus far, four defendants based in the United States have been charged as part of the investigation.   They are The Parts Guys LLC, a company in Port Orange, Fla., that maintains a warehouse at the Middle Georgia Municipal Airport in Macon, as well as the president of The Parts Guys, Michael Edward Todd, who is a U.S. national.  In addition, Galaxy Aviation Services, a company in St. Charles, Ill., and its president, Hamid Seifi, also known as Hank Seifi, an Iranian-born U.S. national, have been charged.  

Todd was arrested last year in Atlanta based on the original indictment in the case.  Todd and his company, The Parts Guys, pleaded guilty to conspiracy to violate the AECA on May 9, 2011, and have yet to be sentenced.   Federal agents arrested Seifi in Atlanta earlier this year, also based on the original indictment.   Seifi and his company, Galaxy Aviation, pleaded guilty on Feb. 24, 2011, to conspiracy to violate the AECA and violating the IEEPA.   Yesterday, Seifi was sentenced to 56 months in prison followed by three years of supervised release, a fine of $12,500 and forfeiture of $153,950, while Galaxy Aviation, which is now defunct, received a $400 special assessment.   

Three defendants based in France have also been indicted as part of the investigation.   They are Aerotechnic, a company in Pinsaguel, France, and its president, Philippe Sanchez, a French national, as well as Luc Teuly, a French national and the sales manager of Aerotechnic.   Each of these defendants remains a fugitive.

Two defendants based in the U.A.E. have also been indicted in the case.  They are Aletra General Trading, a company in Dubai doing business as “Erman & Sultan Trading Co,” and Syed Amir Ahmed Najfi, an Iranian national and purchaser for Aletra.   Najfi remains a fugitive.  

Three defendants based in Iran have also been charged in the case. They are Sabanican Company, a company in Tehran, and its president, Hassan Seifi, an Iranian national, as well as Reza Seifi, an Iranian national and the managing director of Sabanican Company.   Each of these defendants remains at large.

As part of the U.S. government’s coordinated action against this procurement network, the Commerce Department announced today that it will add the eight defendants in France, Iran and the U.A.E. to its “Entity List.”   The Entity List provides notice to the public that certain exports, re-exports and transfers (in-country) to parties identified on the Entity List require a license from the Commerce Department, and that availability of license exceptions in such transactions is limited.   All eight parties will be added to the Entity List with a licensing requirement for all items subject to the Commerce Department export regulations and with a presumption of denial.

The Charges

According to the charges, the defendants conspired to export components for attack helicopters and fighter jets to Iran without obtaining the required U.S. export licenses.   These components included military parts for the Bell AH-1 attack helicopter, the UH-1 Huey attack helicopter, as well as the F-5 and F-4 fighter jets.

           

Defendant Najfi and his firm in the U.A.E. are alleged to have placed orders and purchased military aircraft parts, including those for the Bell AH-1 attack helicopter, from Todd and his company, The Parts Guys, in the United States.   Todd and other conspirators then attempted to and did cause the export of the aircraft parts to the U.A.E.   

Defendant Hank Seifi and his firm in Illinois also allegedly placed orders and purchased U.S. aircraft parts from Todd and his company in Georgia -- on behalf of Hassan Seifi, Reza Seifi and their company in Iran.   According to the charges, Todd and other conspirators then caused these aircraft parts to be exported to Iran via the defendants in France: Sanchez, Teuly and their company, Aerotechnic.

The charge of conspiracy carries a maximum penalty of five years in prison, while violating the AECA carries a maximum penalty of 20 years in prison, and violating IEEPA carries a maximum penalty of 20 years in prison.   Money laundering carries a maximum 20 years in prison, while making false statements carries a maximum of five years in prison.

“The defendants in this case are alleged to have conspired to defraud the United States by illegally acquiring and exporting fighter jet and attack helicopter components.   Keeping such advanced weaponry, which is designed to protect the men and women of our Armed Forces and to defend our national interests, from falling into the hands of state sponsors of terror has never been more important,” said Todd Hinnen, Acting Assistant Attorney General for National Security.

“Through coordinated law enforcement efforts, we have cut off more than a branch of this illegal supply tree; we have cut off the tree at its trunk.  These parts have a military purpose, and I am determined to see that they are not used to harm the United States, its soldiers, citizens or friends.  This type of criminal activity should remind each of us that we must be ever vigilant in our efforts to protect our national security.  The threat is very real, and comes from even the least suspected places, including middle Georgia,” said U.S. Attorney Michael Moore.

“The illegal export of U.S. weapons and military technology presents a direct threat to our national security,” said Brock Nicholson, Special Agent-in-Charge of ICE-HSI in Atlanta. “This investigation demonstrates the importance of preventing our military equipment from falling into the wrong hands, where it could potentially be used against our military members, our homeland and our allies.  Enforcing U.S. export laws is one of our top priorities, and we will continue working with our law enforcement partners to ensure that those who put our country at risk are discovered and brought forward for prosecution.”

Brian D. Lamkin, Special Agent-in-Charge, FBI Atlanta, stated: “The cooperative efforts among the FBI, ICE and U.S. Commerce was critical in bringing this case forward for prosecution by the U.S. Department of Justice.   The enforcement of U.S. laws that prohibit the acquisition of specified defense related items is paramount to national security and is a daunting task when back dropped against the vast movement of legitimate international trade that occurs every day in the U.S.   The FBI is pleased with the role that it has played in this multi-agency enforcement effort.”

“ The Commerce Department's Office of Export Enforcement (OEE) dedicates one hundred percent of its resources to enforcing export laws, and today's case is the result of ongoing cooperation with Immigration and Customs Enforcement and the FBI to protect our national security,” said Robert Luzzi, Special Agent-in-Charge of OEE's Miami Field Office.   “Parties who export to embargoed destinations such as Iran will be pursued and prosecuted to the fullest extent of the law.”

           

This case was investigated by ICE Homeland Security Investigations in Atlanta, FBI Atlanta Field Division and the Department of Commerce’s OEE.  

The prosecution is being handled by Assistant U.S. Attorneys Jennifer Kolman and Danial E. Bennett from the U.S. Attorney’s Office for the Middle District of Georgia and Trial Attorneys Ryan P. Fayhee and Brandon L. Van Grack from the Counterespionage Section of the Justice Department’s National Security Division.

The public is reminded that an indictment contains mere allegations and that defendants are presumed innocent unless and until proven guilty.

11-826

National Security Division"

 

EPA ANNOUNCES MEETING TO DISCUSS BURNHAM CANAL SUPERFUND SITE

The following is an excerpt from an e-mail sent out by the EPA on June 21, 2011:

Public meeting on cleanup plan for Milwaukee's Burnham Canal
(CHICAGO – June 21, 2011) The U.S. Environmental Protection Agency will hold a meeting on June 28 to update the public and take comments on a proposed  cleanup plan for the Burnham Canal Superfund site in Milwaukee, Wisconsin. The meeting begins at 6 p.m. at the United Community Center, 1028 S. Ninth St., Milwaukee. 
EPA has proposed a $2.3 million cleanup plan to remove contaminated sediment at the west end of the canal and contaminated soil along the west bank near the 11th Street Bridge. The site is about one-half mile south of the Menomonee River.

SEC WARNS BP OIL SPILL PAY-OUT RECIPIANTS OF POSSIBLE FRAUD

The following is an excerpt from the SEC web site:

"The SEC’s Office of Investor Education and Advocacy is issuing this Investor Alert to help educate investors, including individuals and small businesses receiving lump sum payouts from BP related to the oil spill in the Gulf, about potential investment frauds that target recipients of lump sum payouts.
Recipients of highly-publicized payouts often become targets for investment fraud. Scam artists may target payout recipients with oil spill-related investment opportunities that promise high returns with little or no risk, or involve secretive or complex strategies. Members of religious or ethnic communities, professional organizations or other close-knit affinity groups could be likely targets for these scams because of the high level of trust that often exists within these groups and their tendency to share information with one another. After Hurricane Katrina we heard about scams targeting individuals receiving compensation from insurance companies. These scams took a number of forms, including trading programs falsely guaranteeing high returns, promoters touting companies purportedly involved in clean-up efforts, as well as classic Ponzi schemes. We are concerned that individuals receiving lump sum payouts, including payments from BP, may become targets for investment scams and other frauds. As is true for recipients of any lump sum payout, individuals and small businesses receiving payments from BP should be wary of potential investment scams.
One of the best ways to avoid investment fraud is to ask questions. Always ask if the seller is licensed and if the investment is registered, then check out the answers with an unbiased source, such as the SEC. We have a short publication called Ask Questions that discusses many of the other questions you should ask of anyone who wants you to make an investment. Please take a look at it before making any investment decisions.
Taking a close look at your entire financial situation can help you use a lump sum payout wisely. Below is a list of some of our online resources that may be helpful in deciding how to use a lump sum payout. Please take the time to protect yourself by reviewing them before you invest -- this payment may have to last you and your family for a long time. Finally, if you are thinking about investing and have any questions, do not hesitate to call the SEC's Office of Investor Education and Advocacy at 1-800-SEC-0330, or to ask a question using this online form.

• Lump Sum Payouts: For information on investing wisely after receiving a lump sum payout, see Lump Sum Payouts: Questions You Should Ask Yourself Before You Invest a Dime
  
• Affinity Fraud: For information on investment scams targeting particular groups, see our Investor Bulletin on Affinity Fraud. This publication is also available in Creole.
  
• Oil Spill Stock Scams: For information on scams promising financial gains from investments in companies that claim to be involved in cleanup operations, see Investor Bulletin: Oil Spill Stock Scams—Don’t Get Cleaned Out by False Cleanup Claims.
  
• Ponzi Schemes: For information on Ponzi schemes, see Ponzi Schemes: Frequently Asked Questions.
  
• Saving and Investing Basics: For general information on saving and investing, please see Saving and Investing: A Roadmap to Your Financial Security Through Saving and Investing. This publication is also available in Spanish.
  
• Ask Questions: For information in questions you should ask when considering an investment, see Ask Questions: Questions You Should Ask About Your Investments. This publication is also available in Spanish."

FORMER TBW MORTGAGE COMPANY CEO SENTENCED TO PRISION

The following case is an excerpt from the Department of Justice website:

 

Department of Justice

Office of Public Affairs

FOR IMMEDIATE RELEASE

Tuesday, June 21, 2011

Former TBW CEO Sentenced to 40 Months in Prison for Fraud Scheme

WASHINGTON – The former chief executive officer (CEO) of Taylor, Bean & Whitaker (TBW) was sentenced today to 40 months in prison for his role in a more than $2.9 billion fraud scheme that contributed to the failure of TBW.   At one time, TBW was one of the largest privately held mortgage lending companies in the United States.   

Paul Allen was sentenced today by U.S. District Judge Leonie M. Brinkema in the Eastern District of Virginia.   The sentence was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Neil H. MacBride for the Eastern District of Virginia; Acting Special Inspector General Christy Romero for the Troubled Asset Relief Program (SIGTARP); Assistant Director in Charge James W. McJunkin of the FBI’s Washington Field Office; Michael P. Stephens, Deputy Inspector General of the Department of Housing and Urban Development (HUD-OIG); Jon T. Rymer, Inspector General of the Federal Deposit Insurance Corporation (FDIC-OIG); Steve A. Linick, Inspector General of the Federal Housing Finance Agency (FHFA-OIG); and Victor S. O. Song, Chief of the Internal Revenue Service-Criminal Investigation (IRS-CI).

Allen, 55, of Oakton, Va., pleaded guilty in April 2011 to one count of making false statements and one count of conspiring to commit bank and wire fraud.   Co-conspirator Sean Ragland, a former senior financial analyst at TBW who reported to Allen, was also sentenced today by Judge Brinkema to three months in prison.   Ragland, 37, of San Antonio, pleaded guilty in March 2011 to one count of conspiracy to commit bank and wire fraud.   Allen and Ragland both admitted to conspiring with Lee Bentley Farkas, the former chairman of TBW, and others, to defraud financial institutions that had invested in Ocala Funding LLC, a facility wholly-owned by TBW.       

Farkas was convicted on April 19, 2011, on 14 counts of fraud for his role in masterminding the scheme, which was one of the largest bank frauds in the country.   Farkas is scheduled to be sentenced on June 27, 2011.   The Securities and Exchange Commission (SEC) has a civil action pending against Farkas in the Eastern District of Virginia.

Co-conspirators Catherine Kissick, a former senior vice president of Colonial Bank and head of its Mortgage Warehouse Lending Division (MWLD); Teresa Kelly, a former operations supervisor in Colonial Bank’s MWLD; Raymond Bowman, the former president of TBW; and Desiree Brown, the former treasurer of TBW, have also pleaded guilty for their participation in the scheme.   Earlier this month, Kissick was sentenced to eight years in prison, Brown was sentenced to six years in prison, Bowman was sentenced 30 months in prison and Kelly was sentenced to 3 months in prison.

“As TBW’s chief executive officer, Mr. Allen served as an accomplice to Lee Farkas and his massive fraud scheme,” said Assistant Attorney General Breuer.  “He concealed TBW’s staggering deficits through false financial reports, which ultimately caused investors to lose more than $1.5 billion.  Today’s sentence sends a strong message that corporate fraud by senior executives will not be tolerated.  At the same time, it demonstrates that substantial assistance in the government’s investigation and prosecution of corporate fraud will be taken into account at sentencing.” 

“Paul Allen was a well-respected mortgage executive hired by Lee Farkas to be TBW’s chief executive officer.  Working from Oakton, Va., Mr. Allen led Ocala Funding, a TBW multi-billion dollar lending facility that was used to defraud investors of more than $1 billion,” said U.S. Attorney MacBride.  “Mr. Allen’s sentence reflects his ultimate cooperation with this investigation, but also sends the message that unless executives expose and stop fraud when they first learn of it, they will be punished.”

According to court documents and information presented at trial, Allen and Ragland participated in the scheme from early 2005 through August 2009 by distributing materially false documents to investors in Ocala Funding that misrepresented the financial condition of the facility.   The fraud scheme ultimately caused investors in Ocala Funding to lose more than $1.5 billion and Colonial Bank to lose $900 million.  

According to court documents and information presented at trial, TBW began running overdrafts in its master bank account at Colonial Bank because of TBW’s inability to meet its operating expenses, which included payroll, servicing payments owed to third-party purchasers of loans and/or mortgage-backed securities and other obligations.   In or about 2002, Farkas and other co-conspirators engaged in a series of fraudulent actions to cover up the overdrafts, first by sweeping overnight money from one TBW account with excess funds into another, and later through the fictitious “sales” of mortgage loans to Colonial Bank, a fraud scheme the conspirators dubbed “Plan B.”   The conspirators accomplished Plan B by selling Colonial Bank mortgage loans that did not exist or that TBW had already committed or sold to other third-party investors.   As Plan B evolved, co-conspirators at TBW also caused TBW to engage in sham sales of groups of mortgage loans, known as “pools,” that other entities already owned to Colonial Bank.   As a result, false information was entered on Colonial Bank’s books and records, giving the appearance that the bank owned interests in legitimate pools of mortgage loans, when in fact the pools had no value and could not be securitized or sold.   Neither Allen nor Ragland participated in the effort to cover up TBW’s overdrafts or Plan B.  

Additionally, the co-conspirators at TBW caused TBW to misappropriate more than $1.5 billion in collateral from Ocala Funding.    According to court documents, both Allen and Ragland played significant roles in the Ocala Funding misappropriation.   The misappropriation caused Colonial Bank and the Federal Home Loan Mortgage Corporation (Freddie Mac) to falsely believe that they each had an undivided ownership interest in thousands of the same loans worth hundreds of millions of dollars.   

According to court documents, the fraud scheme also included an effort by certain conspirators in the fall of 2008 to obtain $570 million in taxpayer funding through the Capital Purchase Program, a sub-program of the U.S. Treasury Department’s TARP.   In connection with the application, Colonial BancGroup submitted financial data and filings that included materially false information related to mortgage loan and securities assets held by Colonial Bank as a result of the fraudulent activity at TBW.   Colonial BancGroup never received the TARP funding.   According to court documents, Allen played a key role in causing materially false information to be submitted to and received by the government in connection with Colonial Bank’s TARP application.   Ragland was not aware of this aspect of the fraud scheme.    

           

In August 2009, the Alabama State Banking Department, Colonial Bank’s regulator, seized the bank and appointed the FDIC as receiver.   Colonial BancGroup also filed for bankruptcy in August 2009.

“Instead of upholding his position of power and trust as CEO of TBW, Paul Allen chose the path of fraud and deception in helping facilitate the long-running fraud carried out by TBW and Colonial Bank.   Fortunately, the scheme came to a halt when an attempt was made to steal more than a half billion dollars from the TARP,” said Acting Special Inspector General for the TARP Romero.   “Today’s sentence appropriately recognizes the severity of Allen’s participation in the fraud along with his cooperation in the Government’s investigation.”

“As a result of this complex fraud scheme, these defendants cost investors and our financial markets billions of dollars,” said Assistant Director in Charge McJunkin. “Today’s sentence shows that those who take advantage of investors and our banking and mortgage systems will be held accountable. The FBI will continue to work with our law enforcement partners and remain vigilant in investigating these illegal transactions.”

“Today’s sentencing marks the culmination of a large effort on the part of this agency and of the law enforcement and regulatory community,” said Deputy Inspector General Stephens of HUD-OIG.  “More importantly, however, it shows our nation that is slowly recovering from a damaged housing market that we are committed to bringing to justice those whose pernicious behavior contributed to this condition.”

 “ The Federal Deposit Insurance Corporation (FDIC) Office of Inspector General is pleased to join our law enforcement colleagues in announcing this sentencing,” said Inspector General Rymer of FDIC.   “We are particularly concerned in cases like this one where fraudulent activities involving employees of Colonial Bank in association with officials of Taylor, Bean and Whitaker contributed to the failure of Colonial Bank, resulting in a $3.8 billion loss to the Deposit Insurance Fund.   We are committed to continuing our investigations of such criminal misconduct to help ensure the integrity of the financial services industry and maintain the safety and soundness of the nation’s financial institutions and the viability of the fund.”

“Paul Allen used his extensive experience gained from employment with the government sponsored enterprises (GSEs) to assist Lee Farkas in his massive fraud scheme,” said Inspector General Linick of FHFA-OIG.  “This sentence sends a strong message to individuals who would try to defraud Freddie Mac and American taxpayers, who have invested over $163 billion in the GSEs to date.”

The case is being prosecuted by Deputy Chief Patrick Stokes and Trial Attorney Robert Zink of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Charles Connolly and Paul Nathanson of the Eastern District of Virginia.    This case was investigated by SIGTARP, FBI’s Washington Field Office, FDIC-OIG, HUD-OIG, FHFA-OIG and the IRS-CI.     The department recognizes the substantial assistance of the SEC.   The department also recognizes the assistance of the Financial Crimes Enforcement Network (FinCEN) of the Department of the Treasury.

This prosecution was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force.   President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.  The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes."  

FORMER CO-OWNER TECH BUSINESS SENTENCED FOR CONSPIRACY TO DEFRAUD E-RATE PROGRAM

The following is an excerpt from the Department of Justice website:

 

"Tuesday, June 21, 2011

Schools in Arkansas, Florida, Illinois and Louisiana Affected by Scheme

WASHINGTON — A former co-owner of an Illinois-based technology company, Global Networking Technologies Inc. (GNT), was sentenced today to serve one year and a day in prison for his participation in a conspiracy to defraud the federal E-Rate program, the Department of Justice announced.

Tyrone Pipkin was also sentenced by U.S. District Court Judge Jay C. Zainey to pay a $6,000 criminal fine for conspiring to defraud the E-Rate program by providing bribes and kickbacks to school officials in multiple states.   Pipkin was charged with the conspiracy in U.S. District Court in New Orleans on Nov. 18, 2010, and pleaded guilty on March 28, 2011.

As a result of the Antitrust Division’s investigation into fraud and anticompetitive conduct in the E-Rate program, a total of seven companies and 24 individuals have pleaded guilty, been convicted at trial or entered civil settlements.   Those companies and individuals have been sentenced to pay criminal fines and restitution totaling more than $40 million.   Seventeen individuals, including Pipkin, have been sentenced to serve prison time.   On June 9, 2011, Barrett C. White, Pipkin’s co-conspirator, was sentenced to one year and one day in prison for his role in the conspiracy.   On June 2, 2011, Gloria F. Harper, a second conspirator, pleaded guilty to the conspiracy in a separate charge and awaits sentencing set for Sept. 8, 2011

According to court documents, Pipkin, who acted on his own behalf and on behalf of Computer Training Associates and GNT, participated in the conspiracy beginning on or about December 2001 through September 2005.   The department said that Pipkin participated in the conspiracy to provide bribes and kickbacks to school officials and employees responsible for the procurement of Internet access services at certain schools in Arkansas, Florida, Illinois and Louisiana.   In return, those individuals ceded control of the E-Rate competitive bidding process to Pipkin and his co-conspirators, ultimately allowing them to ensure E-Rate contracts at these schools were awarded to their companies.  

The E-Rate program was created by Congress in the Telecommunications Act of 1996 and is administered by the Universal Service Administrative Company, under the oversight of the Federal Communications Commission (FCC).   The program provides subsidies to economically disadvantaged schools and libraries.   Depending on the financial needs of the applicant schools, the program pays 20 to 90 percent of the cost for Internet access and telecommunications services, as well as internal computer and communications networks.

Today’s sentencing resulted from an investigation by the Department of Justice Antitrust Division’s Dallas Field Office, the FBI’s Dallas Field Office and the FCC’s Office of Inspector General, with assistance from the U.S. Attorney’s Office for the Eastern District of Louisiana."

A READY-MIX CONCRETE COMPANY PLEADS GUILTY TO PRICE-FIXING

The following exceprt is from the Department of Justice website:

"WASHINGTON — An Iowa ready-mix concrete company pleaded guilty to participating in a price-fixing conspiracy for the sales of ready-mix concrete, the Department of Justice announced today.
According to a one-count felony charge filed on June 10, 2011, in U.S. District Court in Sioux City, Iowa, Tri-State Ready Mix Inc., a producer of ready-mix concrete headquartered in Rock Valley, Iowa, participated in a conspiracy with GCC Alliance Concrete Inc. and its predecessor entity to fix prices for ready-mix concrete sold in the northern district of Iowa. The department said that the conspiracy took place beginning at least as early as January 2006 and continuing until as late as August 2009.
Ready-mix concrete is a product comprised of cement, aggregate (sand and gravel), water and other additives. The concrete generally is produced in a concrete plant and is transported by concrete-mixer trucks to work sites, where it is used in various types of construction projects, including buildings and roads.
According to court documents, Tri-State Ready Mix participated in the conspiracy through its president, Chad Van Zee, who engaged in discussions and reached agreements with Steven VandeBrake of GCC Alliance Concrete and its predecessor entity regarding the conspirators’ prices for ready-mix concrete sold in Iowa. Tri-State Ready Mix then accepted payment for those sales at collusive and noncompetitive prices, the department said.
Tri-State Ready Mix is charged with violating the Sherman Act, which carries a maximum fine of $100 million for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s plea arose from an ongoing federal antitrust investigation of the ready-mix concrete industry in Iowa and surrounding states. As a result of the investigation, on May 20, 2011, GCC Alliance Concrete Inc., another ready-mix concrete producer, pleaded guilty to participating in three separate conspiracies to fix prices and/or rig bids for the sales of ready-mix concrete. On May 26, 2010, VandeBrake, former sales manager of GCC Alliance Concrete, pleaded guilty to participating in the conspiracies and, on Feb. 8, 2011, was sentenced to serve 48 months in prison and to pay a criminal fine of $829,715. On the same day, Kent Robert Stewart, the president of another Iowa ready-mix concrete company, was sentenced to serve a year and a day in prison and to pay a $83,427 criminal fine for conspiring with VandeBrake to fix prices and rig bids. Stewart pleaded guilty on May 24, 2010. Van Zee pleaded guilty to conspiring with VandeBrake to fix prices of ready-mix concrete on Dec. 6, 2010, and is scheduled to be sentenced tomorrow.
The investigation is being conducted by the Antitrust Division’s Chicago Field Office, the FBI’s Sioux City Resident Agency and the Department of Transportation’s Office of Inspector General, with the assistance of the U.S. Attorney’s Office in Sioux City."

HOUSTON HEALTH CARE EXECUTIVE PLEADS GUILTY TO MEDICARE FRAUD

Medicare fraud is rampant throughout the country. In the case below the DOJ and HHS go after a Health Care Provider who pleads guilty to committing fraud. The following is an excerpt from the Department of Justice website:
Monday, June 20, 2011
Owner of Houston Health Care Company Pleads Guilty to Defrauding Medicare
WASHINGTON – An owner of a Houston health care company pleaded guilty today in connection with a $654,227 Medicare fraud scheme, announced the Departments of Justice and Health and Human Services (HHS).
Simone Ball, 24, pleaded guilty before U.S. District Judge Lee Rosenthal in Houston to one count of conspiracy to commit health care fraud. In her plea, Ball admitted that she defrauded Medicare of $654,227 .
According to court documents, Ball was an owner and operator of Preferred Plus Medical Supply. Preferred Plus maintained a valid Medicare provider number in order to submit Medicare claims for the costs of durable medical equipment (DME) and purported to provide orthotics and other DME to Medicare beneficiaries. According to court documents, Preferred Plus submitted claims to Medicare for DME, including orthotic devices, which were medically unnecessary and/or not provided. Many of the orthotic devices were components of “arthritis kits,” and purported to be for the treatment of arthritis-related conditions, although they were neither medically necessary nor appropriate for such conditions. The arthritis kit generally contained a number of orthotic devices including braces for both sides of the body and related accessories such as heat pads. In total, from August through December 2008, Preferred Plus submitted approximately $654,227 in fraudulent claims to Medicare.
At sentencing, scheduled for Oct. 12, 2011, Ball faces a maximum sentence of 10 years in prison.
Today’s guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney José Angel Moreno of the Southern District of Texas; the Texas Attorney General Greg Abbott; Acting Special Agent-in-Charge Russell D. Robinson of the FBI’s Houston Field Office; and Special Agent-in-Charge Mike Fields of the Dallas Regional Office of HHS Office of Inspector General (HHS-OIG), Office of Investigations.
This case is being prosecuted by Trial Attorneys Laura M.K. Cordova and Benjamin O’Neil, and Deputy Chief Charles La Bella of the Criminal Division’s Fraud Section. The case was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Fraud Section.
Since their inception in March 2007, Medicare Fraud Strike Force operations in nine districts have obtained indictments of more than 1,000 individuals who collectively have falsely billed the Medicare program for more than $2.3 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.”