DOJ WANTS CONSTRUCTION FIRM TO PAY WITHHELD EMPLOYMENT TAXES

The following is from the Department of Justice website:

Tuesday, August 16, 2011

WASHINGTON - The United States has filed a lawsuit in an Iowa federal court against a Des Moines, Iowa, metro area company, Advanced Underground Construction LLC and its principal, William David Ward II, the Justice Department announced today.  The civil injunction suit asks the court to stop the defendants’ alleged repeated failures to pay to the U.S. employment taxes that are withheld from employees’ wages.

The government complaint alleges that between the third quarter of 2004 and the present date, the defendants repeatedly failed to make required employment tax deposits to the United States for nine quarters, instead using taxes withheld from employees’ wages as working capital, a practice sometimes referred to as “pyramiding.” The government’s complaint further alleges that the defendants’ misconduct has resulted in a balance due to the government of more than $370,000.

According to the complaint, the defendants have made minimal payments of their tax debts, and government attempts to induce voluntary compliance have failed. The complaint seeks an injunction requiring the defendants to timely deposit and pay withheld employment taxes, and to timely file all employment tax returns."

TALEO CORP WILL PAY NEARLY $6 ½ MILLION TO RESOLVE CASE REGARDING FALSE CLAIMS ACT ALLEGATIONS

The following excerpt is from the Department of Justice website:
Tuesday, August 16, 2011
“WASHINGTON - Taleo Corp. has agreed to pay the United States $6.49 million to resolve allegations that it knowingly caused false claims to be submitted to the Transportation Security Administration (TSA) of the Department of Homeland Security (DHS), the Justice Department announced today.
In 2002, CPS Human Resource Services contracted with TSA to perform human resource services. Taleo, which is based in Dublin, Calif., subcontracted with CPS to provide supporting software. Taleo’s subcontract stated that Taleo would charge its commercial list rates with certain discounts.
The United States alleged that Taleo's commercial list rates were usually based on a customer's actual number of employees, but that Taleo charged TSA a higher rate that was not based on the agency's actual number of employees. If Taleo had followed the normal procedure, the rate TSA was charged would have been lower.
“Those who do business with federal agencies must be honest and play by the rules,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “We are committed to protecting taxpayer dollars by pursuing contractors who overcharge the government.”
The government’s investigation was conducted by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Columbia and DHS’ Office of Inspector General.
This settlement resolves allegations filed by a former Taleo employee under the whistleblower provisions of the False Claims Act, United States ex rel. Hetland v. Taleo Corp., No. 08-cv-0801 (CKK) (D.D.C.). The False Claims Act authorizes private parties to sue on behalf of the United States for fraud and to share in any recovery.
“This settlement demonstrates our office’s continued commitment to target companies that “pad” their prices in an attempt to “pad” their pockets,” said Ronald C. Machen Jr., U.S. Attorney for the District of Columbia. “This office is committed to protecting the public and recovering funds that were obtained through misrepresentations, fraud, and abuse.”
This settlement is part of the government’s aggressive efforts to combat fraud through the use of powerful enforcement tools such as the False Claims Act. The Justice Department's total recoveries in False Claims Act cases since January 2009 are more than $7.5 billion.”

KOREAN FIRM AGREES TO PLEAD GUILTY TO OBSTRUCTION OF JUSTICE

The following excerpt is from The Department of Justice website, Antitrust Division:

MONDAY, AUGUST 15, 2011
WASHINGTON – Nautilus Hyosung Holdings Inc. has agreed to plead guilty and pay a $200,000 criminal fine for obstruction of justice in connection with a premerger filing and investigation by the Antitrust Division, the Department of Justice announced today. Nautilus Hyosung Holdings, an automated teller machine (ATM) manufacturer, is a wholly-owned subsidiary of Korea-based Nautilus Hyosung Inc. (NHI). The false documents were submitted to the government by NHI on behalf of Nautilus Hyosung Holdings in contemplation of the acquisition of Triton Systems of Delaware Inc., a competing manufacturer of ATM systems. The department said that the parties abandoned the proposed acquisition of Triton before the Antitrust Division reached a decision whether to challenge the transaction.
According to a two-count felony charge filed today in U.S. District Court in Washington, D.C., in or about July and August 2008, NHI, as the parent company of Nautilus Hyosung Holdings, submitted false documents to the Department of Justice and the Federal Trade Commission (FTC) in conjunction with mandatory premerger filings made under the Hart-Scott-Rodino Antitrust Improvement Act. After receiving the premerger filings, the Antitrust Division opened a civil merger investigation of the proposed acquisition. The department said that in September 2008, NHI submitted additional false documents in response to a document request from the Antitrust Division.
According to court documents, an executive of a company affiliated with, and acting on behalf of, Nautilus Hyosung Holdings and NHI altered and directed other corporate employees to alter existing corporate documents with the intent to impair their integrity and availability for use in an official proceeding. The department said that, among other things, the alterations misrepresented and minimized the competitive impact of the proposed acquisition on the market for ATMs in the United States.
The Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, requires companies contemplating mergers and acquisitions valued above certain thresholds to make filings with the Department of Justice and the FTC. The federal antitrust agencies have authority to investigate and challenge such proposed transactions under Section 7 of the Clayton Act and Section 1 of the Sherman Act, if the transactions may substantially lessen competition or create a monopoly.
According to court documents, subsequent to these false submissions to the Antitrust Division in connection with its merger investigation, NHI and Nautilus Hyosung Holdings voluntarily disclosed that numerous documents had been altered before being submitted to the government. Since the time of that admission, NHI and Nautilus Hyosung Holdings have cooperated in the department’s criminal investigation of the full nature and scope of the alleged obstructive conduct, and have committed to continue their cooperation in the department’s ongoing investigation.
Nautilus Hyosung Holdings is charged with obstruction of justice, which carries a maximum criminal fine of $500,000 per count. Nautilus Hyosung Holding’s agreed-upon criminal fine of $100,000 per count is subject to court approval and takes into consideration the nature and extent of the company’s disclosure of wrongdoing and its cooperation in the department’s investigation.
The ongoing investigation is being conducted by the Antitrust Division’s National Criminal Enforcement Section.”

WASTE COMPANY WILL PAY $1.7 MILLION SETTLEMENT IN HAZARDOUS WASTE CASE

The following excerpt is from the Department of Justice website:
Monday, August 15, 2011
WASHINGTON – In a settlement valued at more than $1.7 million, Clean Harbors of Braintree Inc. has agreed to pay a significant penalty and perform additional projects, to settle a complaint filed by the U.S. Department of Justice on behalf of the Environmental Protection Agency (EPA), regarding numerous violations of hazardous waste management and emergency planning laws at the company’s Braintree, Mass., facility.
Under the settlement, Clean Harbors will pay a $650,000 penalty and will spend $1,062,500 on a Supplemental Environmental Project (SEP) consisting of planting approximately 1400 trees in low-income and historically-disadvantaged environmental justice areas in the city of Boston. It is expected that Clean Harbors will work with the city of Boston Parks and Recreation Department to implement the project over a two-year period.
Clean Harbors also will comply with an enhanced waste analysis plan that goes beyond what is currently required in its hazardous waste permit. This plan will help to ensure that the hazardous waste Clean Harbors receives and generates will be properly characterized and managed. Further, Clean Harbors has installed and will maintain a vapor collection system for its tanks that will collect and treat volatile organic compound (VOC) emissions, which contribute to smog.
“This agreement illustrates the commitment by the U.S. Department of Justice and EPA to protecting communities from the potential dangers of hazardous waste and to fulfilling important environmental justice goals,” said Ignacia S. Moreno, Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division. “Under the settlement, Clean Harbors will take additional steps to ensure it properly characterizes and manages hazardous waste.”
EPA identified nearly 30 violations of both the Resource Conservation and Recovery Act (RCRA) and the Emergency Planning and Community Right-To-Know Act (EPCRA) at a site inspection of the Braintree Clean Harbors facility that took place in June 2007. Those violations included inadequate waste characterization, the failure to properly maintain its hazardous waste tanks, inadequate secondary containment, and improper storage of incompatible wastes. At the time of the inspection, many of the company’s hazardous waste tanks were deteriorating and in poor condition. EPA monitoring detected releases of VOC emissions from some of the tanks. In July 2007, EPA issued an administrative order directing Clean Harbors to immediately address numerous conditions identified during the inspection that could have posed a danger to human health or the environment. Clean Harbors came into compliance soon after the 2007 order. Inspectors from the Massachusetts Department of Environmental Protection (MassDEP) participated in the June 2007 inspection and provided support to EPA during the settlement process. In a separate consent order, MassDEP required Clean Harbors to replace all of the old storage tanks, as well as implement numerous other needed infrastructure upgrades at the facility. Clean Harbors has purchased and installed new hazardous waste tanks.
“This settlement underscores how important it is that companies and individuals handling and managing hazardous wastes carefully adhere to the protective requirements EPA and MassDEP have established for these substances,” said Curt Spalding, regional administrator of EPA’s New England office. “Complying with these standards helps reduce the possibility of a chemical release that could put the community and the environment at risk. I am also pleased that under this settlement a large number of trees will be planted, which will improve air quality and the quality of life for Boston citizens.”
“This project will assist the city of Boston's tree planting program, providing hundreds of additional street trees in the neighborhoods. Increasing the tree canopy will result in endless environmental benefits for our residents and is a priority,” said Mayor Thomas M. Menino.
The facility performs hazardous materials management and disposal services including drummed and bulk waste processing and consolidation, transformer decommissioning, PCB storage and processing, blending of waste used as supplemental fuel by cement kilns or industrial furnaces, and pretreatment of waste to stabilize it before it is sent to permitted landfills.”

VERIFONE AND HYPERCOM REACH SETTLEMENT WITH DOJ

The following excerpt is from the Department of Justice website:

THURSDAY, AUGUST 4, 2011

“WASHINGTON — The Department of Justice announced today that, in order for VeriFone Systems Inc. to complete its acquisition of Hypercom Corp., it must divest Hypercom’s U.S. point-of-sale (POS) terminals business to an entity sponsored by Gores Group LLC, a private equity fund. The department said that the divestiture should eliminate the merger’s potential to harm competition in the sale of POS terminals.
The department filed a lawsuit on May 12, 2011, in U.S. District Court for the District of Columbia, alleging that the proposed transaction would eliminate important competition in the sale of POS terminals and that a proposed divestiture to the only other significant provider of POS terminals, Ingenico, did not remedy the competitive concerns with the merger. VeriFone and Hypercom together control more than 60 percent of the U.S. market for the POS terminals used by the largest retailers. They are two of only three substantial sellers of other types of POS terminals.
Shortly after the filing of the lawsuit, on May 20, 2011, VeriFone and Hypercom abandoned the proposed divestiture to Ingenico and entered into settlement negotiations with the department to find an alternative buyer. Today, the department filed a proposed settlement, which requires the divestiture to the alternative buyer – Gores Group – that, if approved by the court, would resolve the competitive concerns of the lawsuit.
“The Department of Justice’s proposed remedy ensures that competition will remain in point-of-sale terminals markets,” said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The proposed sale of the Hypercom assets to Gores will create an independent and significant competitor in the United States, both right now and into the future.”
To remedy the department’s competitive concerns, VeriFone and Hypercom will be required to sell Hypercom’s U.S. POS terminals business to Gores. This includes physical assets, personnel, intellectual property rights, transitional support and all other assets necessary for Gores to become a viable competitor in this industry. If the assets are not sold to Gores within 20 days following entry of the final judgment, a trustee will be empowered to sell the assets to another buyer acceptable to the United States, in its sole discretion.
VeriFone is a Delaware corporation headquartered in San Jose, Calif. VeriFone earned more than $1 billion in worldwide revenues in its last fiscal year, ending in October 2010.
Hypercom is a Delaware corporation headquartered in Scottsdale, Ariz. Hypercom earned more than $450 million in worldwide revenues in 2010.
Gores Group is a private equity firm headquartered in Los Angeles. Currently, Gores has more than $4 billion in equity under active management.
As required by the Tunney Act, the proposed 10-year settlement, along with the department’s competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to James J. Tierney, Chief, Networks and Technology Enforcement Section, 450 Fifth Street, N.W., Suite 7100, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the proposed settlement upon finding that it is in the public interest.”

JUSTICE DEPARTMENT TRIES TO SHUT DOWN TAX PREPARER

The following excerpt is from the Department of Justice website:

“Friday, August 5, 2011
Justice Department Sues to Shut Down Alabama Tax Return Preparer
Birmingham Woman Allegedly Claimed False Tax Refunds for Customers
WASHINGTON – The United States has filed a lawsuit seeking to stop Lakeisha Pearson from preparing federal tax returns for others, the Justice Department announced today. The government’s civil injunction complaint alleges that Pearson of Birmingham, Ala., operated under the trade names “LGS Tax Service,” “PositiveEndeavors LLC” and “AGA Tax Service,” and improperly claimed the earned income tax credit (EITC) on her customers’ tax returns to generate false or overstated tax refunds. Pearson also allegedly failed to comply with legal requirements for determining her customers’ eligibility for the EITC and the amount of their EITC claims.
The EITC is a refundable federal income tax credit for low-to-moderate-income working individuals and families. When the credit exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit. To qualify for the credit, taxpayers must have earned income from employment, self-employment or another source and meet certain other requirements.
According to the complaint, Pearson prepared almost 2,000 tax returns for tax years 2008 through 2011, more than 92 percent of which claimed the EITC. Pearson allegedly prepared returns fraudulently reporting income or improperly claiming individuals as a “qualifying child” in order to inflate or generate false EITC claims for her customers. According to the complaint, the Internal Revenue Service (IRS) estimates that the harm to the government from Pearson’s misconduct could be as high as $8.3 million.
The IRS has listed return preparer fraud as one of its “Dirty Dozen” tax scams for 2011. In the past 10 years, the Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax return preparers and tax fraud promoters.”