Saturday, July 23, 2011
AUTO LIGHT MANUFACTURER ARRESTED IN PRICE FIXING CONSPIRACY
Ever wonder why replacement parts for your automobile seem to costs so much more than the price of the car part when you bought the car brand new. The story below might shed some light on this subject. The following excerpt comes from the U.S. Department of Justice website:
“TUESDAY, JULY 19, 2011
WASHINGTON — An executive of a Taiwan manufacturer of aftermarket auto lights was arrested on July 12, 2011, at Los Angeles International Airport and indicted today for participating in a global conspiracy to fix the prices of aftermarket auto lights, the Department of Justice announced today. Aftermarket auto lights are incorporated into an automobile after its original sale, often as repairs following a collision or as accessories and upgrades.
According to a one-count felony indictment filed today in U.S. District Court in San Francisco, Homy Hong-Ming Hsu conspired with others to suppress and eliminate competition by fixing the prices of aftermarket auto lights. The department said that Hsu, the vice chairman and second highest-ranking officer of a Taiwan manufacturer of aftermarket auto lights, participated in the conspiracy from as early as November 2001 until about September 2008.
According to the charge, Hsu and co-conspirators participated in a conspiracy in which the participants met and agreed to charge prices of aftermarket auto lights at certain predetermined levels. The participants in that conspiracy issued price announcements and price lists in accordance with the agreements reached, and collected and exchanged information on prices and sales of aftermarket auto lights for the purpose of monitoring and enforcing adherence to the agreed-upon prices. The department said that the conspirators met in Taiwan, the United States and elsewhere for their discussions.
Hsu is the third individual to be charged in connection with the department's ongoing investigation into the aftermarket auto lights industry. On March 30, 2011, Polo Shu-Sheng Hsu was sentenced to serve 180 days in prison and to pay a $25,000 criminal fine for his participation in the aftermarket auto lights price-fixing conspiracy. On June 7, 2011, Chien Chung Chen, aka Andrew Chen, pleaded guilty to his participation in the conspiracy and is scheduled to be sentenced on Dec. 13, 2011. Both Polo Shu-Sheng Hsu and Chen were executives at U.S. companies that distributed aftermarket auto lights.
Hsu is charged with violating the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million criminal fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims, if either of those amounts is greater than the statutory maximum fine.
This case is part of an ongoing joint investigation of the Department of Justice Antitrust Division's San Francisco Office and the FBI in San Francisco. “
Thursday, July 21, 2011
COMPANY OWNER GETS 63 MONTHS FOR ATTEMPT TO DEFRAUD THE EXPORT-IMPORT BANK
Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Monday, July 18, 2011
WASHINGTON – The owner of an investment planning company in Miami was sentenced today to 63 months in prison for his role in a scheme to defraud the Export-Import Bank of the United States (Ex-Im Bank) of $5.2 million, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and Osvaldo L. Gratacos, Inspector General of the Ex-Im Bank.
Carlos L. Morano, 51, was sentenced by Judge Cecilia M. Altonaga in U.S. District Court in Miami. In addition to his prison term, Morano was sentenced to three years of supervised release and was ordered to pay $5.2 million in restitution and $6.8 million in forfeiture. Morano pleaded guilty on May 6, 2011, to one count of conspiracy to commit wire fraud and one count of wire fraud in connection with a scheme to defraud the Ex-Im Bank of approximately $5.2 million. Morano, a naturalized U.S. Citizen, most recently resided in Buenos Aires, Argentina, until his arrest on Nov. 8, 2010, in Atlanta, where he arrived after an international flight from Argentina. The warrant for his arrest was obtained by Ex-Im Office of Inspector General (OIG) Special Agents.
According to court documents, Morano was the owner of CLM Financing and Investments, an investment planning company located in Miami that purported to be in the business of brokering loans and providing financial advice to Florida exporters. During his plea hearing, Morano admitted that he assisted 17 exporters obtain fraudulent loans that were insured by the Ex-Im Bank. According to court records, Morano and others misappropriated the loan proceeds for their own use and benefit. From 2007 through 2010, Morano, through his company CLM, charged exporters up to $35,000 to prepare fraudulent loan applications and financial statements. Morano admitted that he instructed the exporters on how to prepare false purchase orders, invoices, account receivable forms, and bills of lading to falsely represent to various lending banks and the Ex-Im Bank the purchase and export of U.S. goods to buyers in South and Central America. Morano often charged the exporters a monthly service fee to continue providing false shipping documents and financial documents that would pass Ex-Im Bank review.
According to court records, all of the loans involving Morano were fraudulent. As a result of the fraud, the loans went into default, causing the Ex-Im Bank to pay claims losses to the lending banks in the amount of $5,219,756.
The Ex-Im Bank is an independent federal agency that helps create and maintain U.S. jobs by filling gaps in private export financing. The Ex-Im Bank provides a variety of financing mechanisms to help foreign buyers purchase U.S. goods and services."
Wednesday, July 20, 2011
FORMER PRESIDENT OF LEE DYNAMICS INTERNATIONAL PLEADS GUILTY TO CONSPIRACY AND BRIBERY
The following is an excerpt from the Department of Justice Website:
“Department of Justice
Office of Public Affairs
Friday, July 15, 2011
WASHINGTON – The former president of Lee Dynamics International, a defense contractor providing services to the U.S. military in Iraq, pleaded guilty today to an indictment charging him with a scheme to bribe military officials in order to obtain government contracts, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
Justin W. Lee, 33, a resident of Philadelphia, pleaded guilty before U.S. District Judge Joel H. Slomsky in the Eastern District of Pennsylvania to one count of conspiracy to commit bribery and four counts of bribery. Lee and his father, George H. Lee Jr., were charged in an indictment unsealed on May 27, 2011, in the Eastern District of Pennsylvania.
Justin Lee admitted that he conspired with his father and others to bribe military contracting officers in order to obtain government contracts to support U.S. combat operations in Iraq. According to court documents, Justin Lee provided things of value, including cash, airline tickets, meals, hotel stays, spa visits and jobs, which were valued at a total of more than $1.2 million, to public officials in return for official acts which helped him obtain lucrative Department of Defense contracts. The contracts included multi-million dollar contracts for the storage of weapons at various warehouses in Iraq as well as bottled water.
“For Justin Lee and others, bribery was a way of doing business,” said Assistant Attorney General Breuer. “He offered military officials vacations to Thailand and Europe, Rolex watches, cash, and even employment with their company, all in order to secure lucrative defense contracts. Private contractors will not be allowed to win business by stacking the deck against the competition and, as this investigation shows, the military officials who participate in such fraudulent schemes will also be held to account.”
“Justin Lee’s guilty plea is a prime example of the teamwork amongst Special Agents of the Major Procurement Fraud Unit (MPFU), US Army Criminal Investigation Command (CID), our law enforcement partner agencies, and with the DOJ attorneys that comprised the former Kuwait Fraud Task Force,” said James K. Podolak, director of Army CID’s MPFU. “Charged with protecting the Army’s interests with respect to contract fraud and corruption, in a global environment, the MPFU stands ready with Special Agents strategically assigned throughout the U.S. and abroad to bring these criminals to justice.”
“This plea illustrates that it does not matter where they reside, work, or travel, the Defense Criminal Investigative Service will not stop pursuing those individuals who steal funds from the Department of Defense and U.S. Taxpayers” said Robert Craig, Special Agent in Charge for the Defense Criminal Investigative Service, Mid-Atlantic Field Office.
“I am pleased that Justin Lee pleaded guilty to the bribery charges filed against him for the abusive and illegal contracting schemes he engineered as a private contractor in Iraq,” said Stuart W. Bowen Jr., Special Inspector General for Iraq Reconstruction. “I commend my SIGIR agents and our partners for persevering in this complex case, which is part of perhaps the largest fraud conspiracy yet uncovered in the reconstruction program.”
Four of the military contracting officials with whom Justin Lee conspired have pleaded guilty: John Cockerham Jr., Markus McClain, Kevin A. Davis and Levonda Selph.
Justin Lee faces up to 15 years in prison for each count of bribery, as well as a fine of $250,000 or three times the value of the bribe for each count. He also faces up to five years in prison for the conspiracy count as well as a fine of $250,000.
George Lee, the former chairman and chief executive officer of Lee Dynamics International, remains at large. An indictment is merely a charge and a defendant is presumed innocent until proven guilty.
Substantial assistance has been provided by the Criminal Division’s Office of International Affairs and the U.S. Attorney’s Office for the Eastern District of Pennsylvania. The case is being investigated by the Army Criminal Investigations Division, the Defense Criminal Investigative Service, the Special Inspector General for Iraq Reconstruction, the FBI, the U.S. Immigration and Customs Enforcement of the Department of Homeland Security and the Internal Revenue Service.”
“Department of Justice
Office of Public Affairs
Friday, July 15, 2011
WASHINGTON – The former president of Lee Dynamics International, a defense contractor providing services to the U.S. military in Iraq, pleaded guilty today to an indictment charging him with a scheme to bribe military officials in order to obtain government contracts, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
Justin W. Lee, 33, a resident of Philadelphia, pleaded guilty before U.S. District Judge Joel H. Slomsky in the Eastern District of Pennsylvania to one count of conspiracy to commit bribery and four counts of bribery. Lee and his father, George H. Lee Jr., were charged in an indictment unsealed on May 27, 2011, in the Eastern District of Pennsylvania.
Justin Lee admitted that he conspired with his father and others to bribe military contracting officers in order to obtain government contracts to support U.S. combat operations in Iraq. According to court documents, Justin Lee provided things of value, including cash, airline tickets, meals, hotel stays, spa visits and jobs, which were valued at a total of more than $1.2 million, to public officials in return for official acts which helped him obtain lucrative Department of Defense contracts. The contracts included multi-million dollar contracts for the storage of weapons at various warehouses in Iraq as well as bottled water.
“For Justin Lee and others, bribery was a way of doing business,” said Assistant Attorney General Breuer. “He offered military officials vacations to Thailand and Europe, Rolex watches, cash, and even employment with their company, all in order to secure lucrative defense contracts. Private contractors will not be allowed to win business by stacking the deck against the competition and, as this investigation shows, the military officials who participate in such fraudulent schemes will also be held to account.”
“Justin Lee’s guilty plea is a prime example of the teamwork amongst Special Agents of the Major Procurement Fraud Unit (MPFU), US Army Criminal Investigation Command (CID), our law enforcement partner agencies, and with the DOJ attorneys that comprised the former Kuwait Fraud Task Force,” said James K. Podolak, director of Army CID’s MPFU. “Charged with protecting the Army’s interests with respect to contract fraud and corruption, in a global environment, the MPFU stands ready with Special Agents strategically assigned throughout the U.S. and abroad to bring these criminals to justice.”
“This plea illustrates that it does not matter where they reside, work, or travel, the Defense Criminal Investigative Service will not stop pursuing those individuals who steal funds from the Department of Defense and U.S. Taxpayers” said Robert Craig, Special Agent in Charge for the Defense Criminal Investigative Service, Mid-Atlantic Field Office.
“I am pleased that Justin Lee pleaded guilty to the bribery charges filed against him for the abusive and illegal contracting schemes he engineered as a private contractor in Iraq,” said Stuart W. Bowen Jr., Special Inspector General for Iraq Reconstruction. “I commend my SIGIR agents and our partners for persevering in this complex case, which is part of perhaps the largest fraud conspiracy yet uncovered in the reconstruction program.”
Four of the military contracting officials with whom Justin Lee conspired have pleaded guilty: John Cockerham Jr., Markus McClain, Kevin A. Davis and Levonda Selph.
Justin Lee faces up to 15 years in prison for each count of bribery, as well as a fine of $250,000 or three times the value of the bribe for each count. He also faces up to five years in prison for the conspiracy count as well as a fine of $250,000.
George Lee, the former chairman and chief executive officer of Lee Dynamics International, remains at large. An indictment is merely a charge and a defendant is presumed innocent until proven guilty.
Substantial assistance has been provided by the Criminal Division’s Office of International Affairs and the U.S. Attorney’s Office for the Eastern District of Pennsylvania. The case is being investigated by the Army Criminal Investigations Division, the Defense Criminal Investigative Service, the Special Inspector General for Iraq Reconstruction, the FBI, the U.S. Immigration and Customs Enforcement of the Department of Homeland Security and the Internal Revenue Service.”
Sunday, July 17, 2011
MAINTENANCE CONTRACTOR AGREES TO PAY $400,000 TO SETTLE ALLEGATIONS
The following is an excerpt from the U.S. Department of Justice website:
Monday, July 11, 2011
Firm Employed Disabled Workers at Fort Bliss, Texas, Under Federal Program
WASHINGTON – PRIDE Industries, and its subsidiary, PRIDE Industries One, has agreed to pay the United States $400,000 to resolve allegations that it knowingly submitted false claims relating to a contract to provide maintenance services at the Department of the Army’s Ft. Bliss Army Base in El Paso, Texas, the Justice Department announced today.
The maintenance contract at Ft. Bliss is part of the AbilityOne Program, which procures contracts for goods or services in order to provide employment opportunities to people who are blind or have other significant disabilities. Under this mandatory source program managed by the Committee for Purchase From People Who Are Blind or Severely Disabled, a federal agency, contractors must ensure that 75 percent of all direct labor hours are performed by severely disabled employees. Between 2007 and 2010, PRIDE, which is based in Roseville, Calif., employed a large number of temporary, non-disabled employees as part of its maintenance staff but did not count their hours as part of its overall ratio. Accordingly, PRIDE reported false ratio numbers to NISH, the central nonprofit agency designated by the committee to help oversee the AbilityOne Program, as well as to the committee itself.
In addition, PRIDE overcharged the Department of the Army under its maintenance contract by adding unallowable costs and charging too much for labor.
“Providing jobs for disabled workers is a critical purpose of the AbilityOne Program,” said Assistant Attorney General for the Civil Division Tony West. “This resolution demonstrates that the Department will vigorously pursue government contractors who overcharge on their contracts as well as misstate the number of non-disabled workers they actually employ.”
“Ensuring the integrity of federal contracting programs is one of the objectives of the Affirmative Civil Enforcement unit in the U.S. Attorney’s Office,” said U.S. Attorney for the Eastern District of California Benjamin B. Wagner. “Results like these help accomplish that objective.”
The government’s investigation of PRIDE was initiated by a lawsuit filed under the False Claims Act’s qui tam or whistleblower provisions, which permit private parties to sue for false claims on behalf of the United States and to share in any recovery. The whistleblowers in this case, Timothy Hediger and Lois Perez, will receive $68,000 of the settlement.
“Today’s announcement is a testament to our solid and continued partnership with the Department of Justice and other law enforcement agencies in the fight against fraud,” said James Podolak, director of the Army Criminal Investigation Command’s Major Procurement Fraud Unit. “This clearly demonstrates our continued commitment to rooting out fraud, large or small, in the Department of the Army and that our commitment is stronger than ever.”
The government’s investigation was conducted by the Justice Department’s Civil Division; the U.S. Attorney’s Office for the Eastern District of California; the Army Criminal Investigation Command’s Major Procurement Fraud Unit; the Defense Criminal Investigative Service; and the Defense Contract Audit Agency.
Monday, July 11, 2011
Firm Employed Disabled Workers at Fort Bliss, Texas, Under Federal Program
WASHINGTON – PRIDE Industries, and its subsidiary, PRIDE Industries One, has agreed to pay the United States $400,000 to resolve allegations that it knowingly submitted false claims relating to a contract to provide maintenance services at the Department of the Army’s Ft. Bliss Army Base in El Paso, Texas, the Justice Department announced today.
The maintenance contract at Ft. Bliss is part of the AbilityOne Program, which procures contracts for goods or services in order to provide employment opportunities to people who are blind or have other significant disabilities. Under this mandatory source program managed by the Committee for Purchase From People Who Are Blind or Severely Disabled, a federal agency, contractors must ensure that 75 percent of all direct labor hours are performed by severely disabled employees. Between 2007 and 2010, PRIDE, which is based in Roseville, Calif., employed a large number of temporary, non-disabled employees as part of its maintenance staff but did not count their hours as part of its overall ratio. Accordingly, PRIDE reported false ratio numbers to NISH, the central nonprofit agency designated by the committee to help oversee the AbilityOne Program, as well as to the committee itself.
In addition, PRIDE overcharged the Department of the Army under its maintenance contract by adding unallowable costs and charging too much for labor.
“Providing jobs for disabled workers is a critical purpose of the AbilityOne Program,” said Assistant Attorney General for the Civil Division Tony West. “This resolution demonstrates that the Department will vigorously pursue government contractors who overcharge on their contracts as well as misstate the number of non-disabled workers they actually employ.”
“Ensuring the integrity of federal contracting programs is one of the objectives of the Affirmative Civil Enforcement unit in the U.S. Attorney’s Office,” said U.S. Attorney for the Eastern District of California Benjamin B. Wagner. “Results like these help accomplish that objective.”
The government’s investigation of PRIDE was initiated by a lawsuit filed under the False Claims Act’s qui tam or whistleblower provisions, which permit private parties to sue for false claims on behalf of the United States and to share in any recovery. The whistleblowers in this case, Timothy Hediger and Lois Perez, will receive $68,000 of the settlement.
“Today’s announcement is a testament to our solid and continued partnership with the Department of Justice and other law enforcement agencies in the fight against fraud,” said James Podolak, director of the Army Criminal Investigation Command’s Major Procurement Fraud Unit. “This clearly demonstrates our continued commitment to rooting out fraud, large or small, in the Department of the Army and that our commitment is stronger than ever.”
The government’s investigation was conducted by the Justice Department’s Civil Division; the U.S. Attorney’s Office for the Eastern District of California; the Army Criminal Investigation Command’s Major Procurement Fraud Unit; the Defense Criminal Investigative Service; and the Defense Contract Audit Agency.
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