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. “

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."

  

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.”

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.

DOJ, EPA OFFICIALS TOUR NEWARK, N.J. SEEKING ENVIRONMENTAL JUSTICE

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

“Tuesday, July 12, 2011
Justice Department and EPA Officials Focus on Environmental Justice in Newark, New Jersey
NEWARK, N.J. – Senior environmental enforcement officials from the U.S. Justice Department and Environmental Protection Agency (EPA) toured sites in Newark, N.J., today and met with federal partners and with environmental and community organizations to discuss mutual efforts to address environmental challenges and enforce environmental laws, and in particular efforts to achieve environmental justice.
Officials included Ignacia S. Moreno, Assistant Attorney General of the Environment and Natural Resources Division; Paul J. Fishman, U.S. Attorney for the District of New Jersey; and Cynthia Giles, Assistant Administrator for the EPA Office of Enforcement Compliance Assurance. They were joined by Judith A. Enck, EPA Region 2 Administrator; and Lisa F. Garcia, EPA Senior Advisor for Environmental Justice.
The goal of environmental justice, a major priority of the Department of Justice and the EPA, is to provide all Americans – regardless of their race, ethnicity or income status – full protection under the nation’s environmental laws and protection from pollution, hazardous waste and toxic substances.
“The people of New Jersey understand the critical importance of environmental protection, and the real world consequences of industrial pollution,” said Assistant Attorney General Moreno. “By enforcing the nation’s environmental laws in a fair and even-handed way, we are taking steps to ensure that we achieve environmental justice. We are listening to communities and giving voice to those that have too frequently suffered an unfair burden from pollution in America.”
“New Jersey has seen an unjust share of environmental damage, and we have the opportunity and obligation to do something about it,” said U.S. Attorney Fishman. “Specific, targeted criminal and civil enforcement actions can make a real difference to our environment - preserving it for those who treasure it and punishing those who break laws that protect it.”
“Enforcement is a powerful tool in advancing environmental justice and deterring illegal pollution,” said Assistant Administrator Giles. “We are aggressively going after pollution problems that make a difference in communities, like keeping raw sewage and contaminated stormwater out of our nation’s waters and cutting toxic air pollution that affects communities’ health.”
“Low income communities across the country have historically shouldered a heavy pollution burden,” said Judith A. Enck, EPA Regional Administrator. “Just because someone lives in a low income neighborhood, they should not be exposed to air pollution, toxic chemicals, degraded water quality or have less access to parks and open space. The EPA is committed to protecting public health and environmental quality in every part of the country. With improved environmental quality should also come opportunities for job creation.”
11-906
Environment and Natural Resources Division”

CHARGES BROUGHT AGAINST TELECOM EXECS FOR ALLEGED BRIBERY

The case below is an excerpt from the U.S. Department of Justice website:

“Wednesday, July 13, 2011
Florida Telecommunications Company, Two Executives, an Intermediary and Two Former Haitian Government Officials Indicted for Their Alleged Participation in Foreign Bribery Scheme
WASHINGTON - Cinergy Telecommunications Inc., Cinergy’s president and director, the president of Florida-based Telecom Consulting Services Corp. and two former Haitian government officials have been charged in a superseding indictment for their alleged roles in a foreign bribery, wire fraud and money laundering scheme, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida and Special Agent in Charge Jose A. Gonzalez of the Internal Revenue Service - Criminal Investigation’s (IRS-CI) Miami Field Office.
According to the superseding indictment, the defendants allegedly participated in a scheme to commit foreign bribery and money laundering from December 2001 through January 2006. The indictment alleges that during this time period Cinergy and its related company, Uniplex Telecommunications Inc., allegedly paid more than $1.4 million to shell companies to be used for bribes to foreign officials of the Republic of Haiti’s state-owned national telecommunications company, Telecommunications D’Haiti (Haiti Teleco).
According to court documents, Cinergy and Uniplex executed a series of contracts with Haiti Teleco that allowed the companies’ customers to place telephone calls to Haiti. The bribe payments allegedly were authorized by Washington Vasconez Cruz, the telecommunications companies’ president, and Amadeus Richers, the companies’ director, and were allegedly paid to Haitian government officials at Haiti Teleco, including Patrick Joseph and Jean Rene Duperval. According to the superseding indictment, the purpose of these bribes was to obtain various business advantages from the Haitian officials for Cinergy and Uniplex, including preferred telecommunications rates and credits toward sums owed. To conceal the bribe payments, the defendants allegedly used various shell companies to receive and forward the payments, including J.D. Locator Services, Fourcand Enterprises and Telecom Consulting Services.
The six defendants charged in the superseding indictment are:
Washington Vasconez Cruz, 63, of Miami, the president of Cinergy and Uniplex, is charged with one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and to commit wire fraud, six counts of FCPA violations, one count of conspiracy to commit money laundering and 19 counts of money laundering;
Amadeus Richers, 60, of Pembroke Pines, Fla., and Brazil, the then-director of Cinergy and Uniplex, is charged with one count of conspiracy to violate the FCPA and to commit wire fraud, six counts of FCPA violations, one count of conspiracy to commit money laundering and 19 counts of money laundering;
Cinergy Telecommunications Inc., a privately-held telecommunications company incorporated in Florida, is charged with one count of conspiracy to violate the FCPA and to commit wire fraud, six counts of FCPA violations, one count of conspiracy to commit money laundering and 19 counts of money laundering;
Patrick Joseph, 49, of Miami and Haiti, a former general director for telecommunications at Haiti Teleco, is charged with one count of conspiracy to commit money laundering;
Jean Rene Duperval, 44, of Miramar, Fla., and Haiti, a former director of international relations for telecommunications at Haiti Teleco, is charged with two counts of conspiracy to commit money laundering and 19 counts of money laundering; and
Marguerite Grandison, 42, of Miramar, the former president of Telecom Consulting Services Corp., and Duperval’s sister, is charged with two counts of conspiracy to commit money laundering and 19 counts of money laundering.
The superseding indictment also charges Duperval and Grandison with laundering corrupt payments authorized by Joel Esquenazi and Carlos Rodriguez on behalf of another Florida telecommunications company.
Duperval was charged previously in the indictment returned on Dec. 7, 2009, with one count of conspiracy to commit money laundering and 12 counts of money laundering. Grandison was previously charged with one count of conspiracy to violate the FCPA and to commit wire fraud, seven counts of FCPA violations, one count of conspiracy to commit money laundering and 12 counts of money laundering.
Esquenazi and Rodriguez were charged in the initial December 2009 indictment and are unaffected by the superseding indictment. They are scheduled to stand trial on July 18, 2011.
An indictment is merely an accusation, and defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt in a court of law.
The conspiracy to commit violations of the FCPA and wire fraud count carries a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the value gained or lost. The FCPA counts each carry a maximum penalty of five years in prison and a fine of the greater of $100,000 or twice the value gained or lost. The conspiracy to commit money laundering counts each carry a maximum penalty of 20 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the transaction. The money laundering counts each carry a maximum penalty of 20 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the transaction. The superseding indictment also gives notice of criminal forfeiture.
On May 15, 2009, Juan Diaz, the president of J.D. Locator Services, pleaded guilty to one count of conspiracy to violate the FCPA and money laundering. He admitted to receiving more than $1 million in bribe money from telecommunications companies. On July 30, 2010, he was sentenced to 57 months in prison.
On Feb. 19, 2010, Jean Fourcand, the president and director of Fourcand Enterprises Inc., pleaded guilty to one count of money laundering for receiving and transmitting bribe monies in the scheme. On May 5, 2010, he was sentenced to six months in prison.
On March 12, 2010, Robert Antoine, the former director of international affairs for Haiti Telco, pleaded guilty to one count of conspiracy to commit money laundering. He admitted to receiving more than $1 million in bribes from Miami-based telecommunications companies. On June 2, 2010, he was sentenced to 48 months in prison.
The government’s investigation is ongoing. The Department of Justice is grateful to the government of Haiti for continuing to provide substantial assistance in gathering evidence during this investigation. In particular, Haiti’s financial intelligence unit, the Unité Centrale de Renseignements Financiers (UCREF), the Bureau des Affaires Financières et Economiques (BAFE), which is a specialized component of the Haitian National Police, and the Ministry of Justice and Public Security provided significant cooperation and coordination in this ongoing investigation.
The case is being prosecuted by Senior Trial Attorneys Nicola J. Mrazek and James M. Koukios of the Criminal Division’s Fraud Section, with the assistance of the U.S. Attorney’s Office for the Southern District of Florida. The Office of International Affairs in the Justice Department’s Criminal Division also provided assistance in this matter. The cases were investigated by the IRS-CI Miami Field Office.
11-910
Criminal Division”

COMPANY IN IOWA PLEADS GUILTY TO READY-MIX CONSPIRACY

The following is an excerpt from the Department of Justice website:
FOR IMMEDIATE RELEASE
JULY 8, 2011
IOWA COMPANY PLEADS GUILTY TO PARTICIPATING IN READY-MIX
CONCRETE PRICE-FIXING CONSPIRACYWASHINGTON — An Iowa-based company pleaded guilty today to participating in a price-fixing conspiracy for the sales of ready-mix concrete, the Department of Justice announced.
According to a one-count felony charge filed on June 24, 2011, in U.S. District Court in Sioux City, Iowa, VS Holding Co., which formerly operated as Alliance Concrete Inc., a producer of ready-mix concrete with headquarters in Orange City, Iowa, participated in a conspiracy with another ready-mix concrete company to fix prices for ready-mix concrete sold in the northern district of Iowa. The department said the company participated in the conspiracy beginning at least as early as January 2006 and continuing until as late as January 2008.
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 the court documents, Steven VandeBrake, the former president of VS Holding Co., participated in the conspiracy by engaging in discussions and reaching agreements regarding the conspirators' prices for ready-mix concrete sold in the northern district of Iowa. VS Holding Co. then accepted payment for those sales at collusive and noncompetitive prices, the department said.
VS Holding Co. 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 is the result of an ongoing federal antitrust investigation of the ready-mix concrete industry in Iowa and its surrounding states. As a result of the investigation, three individuals have been convicted and sentenced to serve prison time, and, including VS Holding Co., three ready-mix concrete companies have pleaded guilty and are awaiting sentencing.
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 the Inspector General, with the assistance of the U.S. Attorney's Office in Sioux City. “