FROM: U.S. JUSTICE DEPARTMENT
Thursday, December 5, 2013
Government Files Suit Against Canton, Ohio-based Tab Construction and Its Owner for Allegedly Defrauding the Historically Underutilized Business Zone Program
The government has filed a complaint against Canton, Ohio-based TAB Construction Co. Inc. (TAB) and its owner, William E. Richardson III, for allegedly making false statements to the Small Business Administration (SBA) to obtain certification as a Historically Underutilized Business Zone (HUBZone) company, the Justice Department announced today.
“The HUBZone program is intended to create jobs in areas that historically have had trouble attracting business,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “The Justice Department will take strong enforcement action when companies obtain contracts to which they are not entitled.”
The government alleges that TAB used its fraudulently procured HUBZone certification to obtain four U.S. Army Corps of Engineers’ construction contracts worth millions of dollars. Each of those contracts had been set aside for qualified HUBZone companies. The government’s complaint asserts claims against TAB and Richardson under the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act of 1989.
Allegedly, Richardson originally applied to the HUBZone program in 2000 by claiming that TAB’s principal office was located in a designated HUBZone when no TAB employees worked out of the HUBZone office, and TAB actually was located in a non-HUBZone. Even though Richardson told the SBA that TAB was located in a HUBZone, Richardson consistently used his non-HUBZone address in conducting TAB’s other business affairs, at one point even stating under oath in private litigation that TAB’s office was located in a non-HUBZone. In 2006, Richardson allegedly applied for re-certification to the HUBZone program, again falsely stating that eight employees worked in the designated HUBZone. The government alleges that just six weeks after Richardson re-certified its eligibility with the SBA, TAB completed an affidavit in an unrelated matter, which stated that TAB’s principal office was located in a non-HUBZone.
Under the HUBZone program, companies that maintain their principal office in a designated HUBZone, and meet certain other requirements, can apply to the SBA for certification as a HUBZone small business company. HUBZone companies can then use this certification when bidding on government contracts. In certain cases, government agencies will restrict competition for a contract to HUBZone-certified companies.
“We will not tolerate fraud in the HUBZone or any other SBA program,” said SBA Inspector General Peggy E. Gustafson. “With our interagency partners, this office will continue to pursue those who defraud the government by lying to gain access to federal set-aside contracts.”
“SBA’s contracting programs, including the HUBZone program, provide small businesses with the opportunity to grow and create jobs,” said SBA General Counsel Sara D. Lipscomb. “SBA has no tolerance for waste, fraud or abuse in any government contracting program and is committed to working with our federal partners to ensure the benefits of these programs flow to the intended recipients.”
The government filed its complaint in two consolidated lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act. Under the Act, a private citizen can sue on behalf of the government and share in any recovery. The government also is entitled to intervene in the lawsuit, as it has done in this case.
This matter was handled by the Commercial Litigation Branch of the Justice Department’s Civil Division in conjunction with the Small Business Administration’s Office of Inspector General and Office of General Counsel and the Defense Criminal Investigative Service.
The consolidated civil cases are U.S. ex rel. Roy. J. Fairbrother Jr. and Louis Petit v. TAB Construction Co. Inc., et al., No. 5:11-cv-1432 (N.D. Ohio) and U.S. ex rel. Patricia Hopson and Vince Pavkov v. TAB Construction Co. Inc., No. 5:12-cv-135 (N.D. Ohio). The claims asserted against TAB and Richardson are allegations only, and there has been no determination of liability.
Friday, December 6, 2013
Wednesday, December 4, 2013
OSHA CITES COMPANY FOR SAFETY VIOLATION RELATED TO WORKER'S HEAT STROKE DEATH
FROM: U.S. LABOR DEPARTMENT
Aldridge Electric cited by US Labor Department's OSHA
after heat-related death of worker in Chicago
Employee became ill on his first day on the job
CHICAGO — The U.S. Department of Labor's Occupational Safety and Health Administration has cited Aldridge Electric Inc. for one serious safety violation following the June 25 death of a 36-year-old worker who developed heat stroke at a job site in Chicago. The company was installing electrical conduit in an uncovered trench on the Chicago Transit Authority's Dan Ryan Red Line project when the worker became ill on his first day on the job.
"This worker died from heat stress on his first day on the job. This tragedy underscores the need for employers to ensure that new workers become acclimated and build a tolerance to working in excessive heat with a program of water, rest and shade," said Dr. David Michaels, assistant secretary of labor for occupational safety and health. "A worker's first day on the job shouldn't be the last day of their life."
OSHA's investigation found that Aldridge Electric did not implement an adequate and effective heat stress program and failed to ensure a newly employed worker was acclimatized to effects of heat and physical exertion. The worker was carrying heavy electrical conduit piping in nonshaded conditions when he collapsed on the job site. He died from his illness the following day.
The serious violation was cited for failing to implement an adequate and effective heat stress program. A serious violation occurs when there is substantial probability that death or serious physical harm could result from a hazard about, which the employer knew or should have known.
Proposed penalties total $7,000. Aldridge Electric, based in Libertyville, Ill., is a specialty electrical contractor that employs nearly 750 workers nationwide. The company has 15 business days from receipt of the citations and penalties to comply, request an informal conference with OSHA's area director or contest the findings before the independent Occupational Safety and Health Review Commission.
Aldridge Electric cited by US Labor Department's OSHA
after heat-related death of worker in Chicago
Employee became ill on his first day on the job
CHICAGO — The U.S. Department of Labor's Occupational Safety and Health Administration has cited Aldridge Electric Inc. for one serious safety violation following the June 25 death of a 36-year-old worker who developed heat stroke at a job site in Chicago. The company was installing electrical conduit in an uncovered trench on the Chicago Transit Authority's Dan Ryan Red Line project when the worker became ill on his first day on the job.
"This worker died from heat stress on his first day on the job. This tragedy underscores the need for employers to ensure that new workers become acclimated and build a tolerance to working in excessive heat with a program of water, rest and shade," said Dr. David Michaels, assistant secretary of labor for occupational safety and health. "A worker's first day on the job shouldn't be the last day of their life."
OSHA's investigation found that Aldridge Electric did not implement an adequate and effective heat stress program and failed to ensure a newly employed worker was acclimatized to effects of heat and physical exertion. The worker was carrying heavy electrical conduit piping in nonshaded conditions when he collapsed on the job site. He died from his illness the following day.
The serious violation was cited for failing to implement an adequate and effective heat stress program. A serious violation occurs when there is substantial probability that death or serious physical harm could result from a hazard about, which the employer knew or should have known.
Proposed penalties total $7,000. Aldridge Electric, based in Libertyville, Ill., is a specialty electrical contractor that employs nearly 750 workers nationwide. The company has 15 business days from receipt of the citations and penalties to comply, request an informal conference with OSHA's area director or contest the findings before the independent Occupational Safety and Health Review Commission.
Sunday, December 1, 2013
SEC ALLEGES WEATHERFORD INTERNATIONAL AUTHORIZED BRIBES TO FOREIGN OFFICIALS
FROM: SECURITIES AND EXCHANGE COMMISSION
SEC Charges Weatherford International with FCPA Violations
The Securities and Exchange Commission today charged oilfield services company Weatherford International with violating the Foreign Corrupt Practices Act (FCPA) by authorizing bribes and improper travel and entertainment for foreign officials in the Middle East and Africa to win business, including kickbacks in Iraq to obtain United Nations Oil-for-Food contracts.
The SEC alleges that Weatherford and its subsidiaries falsified its books and records to conceal not only these illicit payments, but also commercial transactions with Cuba, Iran, Syria, and Sudan that violated U.S. sanctions and export control laws. Weatherford failed to establish an effective system of internal accounting controls to monitor risks of improper payments and prevent or detect misconduct. The company reaped more than $59.3 million in profits from business obtained through improper payments, and more than $30 million in profits from its improper sales to sanctioned countries.
Swiss-based Weatherford, which has substantial operations in Houston, has agreed to pay more than $250 million to settle the SEC’s charges and parallel actions by the Department of Justice’s Fraud Section, U.S. Attorney’s Office for the Southern District of Texas, Department of Commerce’s Bureau of Industry and Security, and Department of Treasury’s Office of Foreign Assets Control.
According to the SEC’s complaint filed in federal court in Houston, the misconduct occurred from at least 2002 to 2011. In Angola, for example, Weatherford’s legal department permitted its subsidiary to use an agent who insisted that an FCPA clause be omitted from the consultancy agreement. The company took no steps to determine whether the agent was paying bribes to foreign officials, and the agent used sham work orders and invoices to pay bribes that ensured the renewal of a lucrative oil services contract for Weatherford in Angola. The same agent made illicit payments to obtain commercial contracts for Weatherford in Congo. The company also allowed its subsidiary to enter into a joint venture agreement with companies whose beneficial owners included Angolan oil company officials and a relative of an Angolan Minister in order to win business. A Weatherford employee reported in a 2006 ethics questionnaire that Weatherford personnel were making payments to government officials in Angola and elsewhere, but the company failed to investigate.
The SEC’s complaint also alleges that Weatherford failed to perform due diligence on a distributor suggested by an official at a national oil company in the Middle East. From 2005 to 2011, Weatherford and its subsidiaries awarded more than $11.8 million in improper “volume discounts” to the distributor – money intended for the creation of a slush fund to pay foreign officials.
According to the SEC’s complaint, the misconduct went beyond the use of agents or other third parties. Weatherford provided improper travel and entertainment to officials of a state-owned company in Algeria with no legitimate business purpose. For example, Weatherford paid for a 2006 FIFA World Cup trip by two of the officials, the July 2006 honeymoon of an official’s daughter, and an October 2005 religious trip to Saudi Arabia by an official and his family that was improperly recorded as a donation in Weatherford’s books and records. Weatherford’s Middle East subsidiary also made more than $1.4 million in improper payments to obtain nine contracts under the Oil-for-Food program in 2002. Iraqi ministries demanded improper “inland transportation fees” in an effort to subvert the UN program. Weatherford’s subsidiary complied with the Iraqi demands and paid more than $115,000 in fees despite invoices that included charges inconsistent with the actual deliveries. Weatherford obtained more than $7 million in profits from the misconduct.
The SEC further alleges that managers at Weatherford’s subsidiary in Italy flouted the lack of internal controls and misappropriated more than $200,000 in company funds, some of which was improperly paid to Albanian tax auditors. The managers misreported cash advances, diverted payments on previously paid invoices, misappropriated government rebate checks, and received reimbursement for such purchases as golf equipment and perfume that did not relate to business activities.
According to the SEC’s complaint, Weatherford employees created false accounting and inventory records from 2002 to 2007 to hide the illegal commercial sales to Cuba, Syria, Sudan, and Iran. During this time period, exporting or re-exporting goods or services from the U.S. to these sanctioned countries was prohibited. The falsified financial statements and books and records of Weatherford subsidiaries involved in the misconduct were consolidated into the financial statements of the parent company.
The SEC’s complaint alleges that Weatherford violated the anti-bribery, books and records, and internal accounting controls provisions of the FCPA, specifically Sections 30A, 13(b)(2)(A), and 13(b)(2)(B) of the Securities Exchange Act of 1934. Weatherford agreed to pay $90,984,844 in disgorgement, $4,399,423.34 in pre-judgment interest, and a $1.875 million civil penalty assessed in part for lack of cooperation during the investigation. $31,646,907 of the payment to the SEC will be satisfied by Weatherford’s agreement to pay an equal amount to the U.S. Attorney’s Office. Weatherford agreed to pay $87 million in criminal fines to the Department of Justice for the FCPA violations, and $100 million to the other three agencies for the sanctions violations. The company also must comply with certain undertakings, including the retention of an independent compliance monitor for 18 months and self-reporting to the SEC staff for an additional 18 months.
The SEC’s investigation, which is continuing, has been conducted by Tracy L. Price, Kelly G. Kilroy, and Stanley Cichinski of the FCPA Unit as well as Natalie Lentz and Robert Dodge. The SEC appreciates the assistance of the Justice Department, Commerce Department, Treasury Department, and U.S. Attorney’s Office in Houston.
SEC Charges Weatherford International with FCPA Violations
The Securities and Exchange Commission today charged oilfield services company Weatherford International with violating the Foreign Corrupt Practices Act (FCPA) by authorizing bribes and improper travel and entertainment for foreign officials in the Middle East and Africa to win business, including kickbacks in Iraq to obtain United Nations Oil-for-Food contracts.
The SEC alleges that Weatherford and its subsidiaries falsified its books and records to conceal not only these illicit payments, but also commercial transactions with Cuba, Iran, Syria, and Sudan that violated U.S. sanctions and export control laws. Weatherford failed to establish an effective system of internal accounting controls to monitor risks of improper payments and prevent or detect misconduct. The company reaped more than $59.3 million in profits from business obtained through improper payments, and more than $30 million in profits from its improper sales to sanctioned countries.
Swiss-based Weatherford, which has substantial operations in Houston, has agreed to pay more than $250 million to settle the SEC’s charges and parallel actions by the Department of Justice’s Fraud Section, U.S. Attorney’s Office for the Southern District of Texas, Department of Commerce’s Bureau of Industry and Security, and Department of Treasury’s Office of Foreign Assets Control.
According to the SEC’s complaint filed in federal court in Houston, the misconduct occurred from at least 2002 to 2011. In Angola, for example, Weatherford’s legal department permitted its subsidiary to use an agent who insisted that an FCPA clause be omitted from the consultancy agreement. The company took no steps to determine whether the agent was paying bribes to foreign officials, and the agent used sham work orders and invoices to pay bribes that ensured the renewal of a lucrative oil services contract for Weatherford in Angola. The same agent made illicit payments to obtain commercial contracts for Weatherford in Congo. The company also allowed its subsidiary to enter into a joint venture agreement with companies whose beneficial owners included Angolan oil company officials and a relative of an Angolan Minister in order to win business. A Weatherford employee reported in a 2006 ethics questionnaire that Weatherford personnel were making payments to government officials in Angola and elsewhere, but the company failed to investigate.
The SEC’s complaint also alleges that Weatherford failed to perform due diligence on a distributor suggested by an official at a national oil company in the Middle East. From 2005 to 2011, Weatherford and its subsidiaries awarded more than $11.8 million in improper “volume discounts” to the distributor – money intended for the creation of a slush fund to pay foreign officials.
According to the SEC’s complaint, the misconduct went beyond the use of agents or other third parties. Weatherford provided improper travel and entertainment to officials of a state-owned company in Algeria with no legitimate business purpose. For example, Weatherford paid for a 2006 FIFA World Cup trip by two of the officials, the July 2006 honeymoon of an official’s daughter, and an October 2005 religious trip to Saudi Arabia by an official and his family that was improperly recorded as a donation in Weatherford’s books and records. Weatherford’s Middle East subsidiary also made more than $1.4 million in improper payments to obtain nine contracts under the Oil-for-Food program in 2002. Iraqi ministries demanded improper “inland transportation fees” in an effort to subvert the UN program. Weatherford’s subsidiary complied with the Iraqi demands and paid more than $115,000 in fees despite invoices that included charges inconsistent with the actual deliveries. Weatherford obtained more than $7 million in profits from the misconduct.
The SEC further alleges that managers at Weatherford’s subsidiary in Italy flouted the lack of internal controls and misappropriated more than $200,000 in company funds, some of which was improperly paid to Albanian tax auditors. The managers misreported cash advances, diverted payments on previously paid invoices, misappropriated government rebate checks, and received reimbursement for such purchases as golf equipment and perfume that did not relate to business activities.
According to the SEC’s complaint, Weatherford employees created false accounting and inventory records from 2002 to 2007 to hide the illegal commercial sales to Cuba, Syria, Sudan, and Iran. During this time period, exporting or re-exporting goods or services from the U.S. to these sanctioned countries was prohibited. The falsified financial statements and books and records of Weatherford subsidiaries involved in the misconduct were consolidated into the financial statements of the parent company.
The SEC’s complaint alleges that Weatherford violated the anti-bribery, books and records, and internal accounting controls provisions of the FCPA, specifically Sections 30A, 13(b)(2)(A), and 13(b)(2)(B) of the Securities Exchange Act of 1934. Weatherford agreed to pay $90,984,844 in disgorgement, $4,399,423.34 in pre-judgment interest, and a $1.875 million civil penalty assessed in part for lack of cooperation during the investigation. $31,646,907 of the payment to the SEC will be satisfied by Weatherford’s agreement to pay an equal amount to the U.S. Attorney’s Office. Weatherford agreed to pay $87 million in criminal fines to the Department of Justice for the FCPA violations, and $100 million to the other three agencies for the sanctions violations. The company also must comply with certain undertakings, including the retention of an independent compliance monitor for 18 months and self-reporting to the SEC staff for an additional 18 months.
The SEC’s investigation, which is continuing, has been conducted by Tracy L. Price, Kelly G. Kilroy, and Stanley Cichinski of the FCPA Unit as well as Natalie Lentz and Robert Dodge. The SEC appreciates the assistance of the Justice Department, Commerce Department, Treasury Department, and U.S. Attorney’s Office in Houston.
Friday, November 29, 2013
JUSTICE TRIES TO INTERVENE IN TAX PREPARATION WEBSITE ACCESSIBILITY LAWSUIT
FROM: U.S. JUSTICE DEPARTMENT
Monday, November 25, 2013
Justice Department Seeks to Intervene in Lawsuit Alleging H&R Block’s Tax Preparation Website Is Inaccessible to Individuals with Disabilities
The Civil Rights Division and U.S. Attorney Carmen Ortiz announced today that they have moved to intervene in National Federation of the Blind et al v. HRB Digital LLC et al, a private lawsuit alleging disability discrimination by HRB Digital LLC and HRB Tax Group Inc., subsidiaries of H&R Block Inc. In the memorandum and proffered complaint filed by the United States in support of its motion to intervene, the United States alleges that the H&R Block companies discriminate against individuals with disabilities and that their website, www.hrblock.com , is being operated in violation of Title III of the Americans with Disabilities Act (ADA), notwithstanding well-established and readily available guidelines for delivering web content in an accessible manner. The motion, attached complaint in intervention and supporting memorandum were filed in U.S. District Court for the District of Massachusetts’ Boston Division.
As alleged in the filings today, H&R Block is one of the largest tax return preparers in the United States. Its companies offer a wide range of services through www.hrblock.com , including professional and do-it-yourself tax preparation, instructional videos, office location information, interactive live video conference and chat with tax professionals, hybrid online and in-store services and electronic filing. Their website, however, is not accessible to many individuals with disabilities and prevents some people with disabilities from completing even the most basic activities on the site.
Today’s filings further state that many individuals with disabilities, including, among others, people who are blind, deaf or have physical disabilities with an impact on manual dexterity, use computers and the Internet with the help of assistive technologies. For example, screen reader software makes audible information that is otherwise presented visually on a computer screen; captioning translates video narration and sound into text; and keyboard navigation allows keyboard input rather than a mouse to navigate a website for individuals with visual, hearing or manual dexterity disabilities. Such technologies have been widely used for some time and there are readily available, well-established, consensus-based guidelines – the Web Content Accessibility Guidelines (WCAG) 2.0 – for making web content accessible to individuals with disabilities.
The complaint in intervention seeks a court order that would ensure that tax services offered through www.hrblock.com are fully and equally accessible to individuals with disabilities. The department also seeks an award of monetary damages for aggrieved individuals, including the two named plaintiffs and a civil penalty to vindicate the public interest.
“The web revolutionizes our lives daily and maximizes our independence in many areas,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “Inaccessible websites of public accommodations are not simply an inconvenience to individuals with disabilities – they deny persons with disabilities access to basic goods and services that people without disabilities take advantage of every day. An inaccessible website can also mean a business loses a customer it never knew it had.”
“We are building an electronic world in which we ever-increasingly live,” said U.S. Attorney Carmen Ortiz for the District of Massachusetts. “All benefit when, as the ADA requires, we build our online businesses, schools and other public spaces in a manner equally accessible to all.”
Title III of the ADA prohibits discrimination on the basis of disability by public accommodations in the full and equal enjoyment of the goods, services, facilities, privileges, advantages and accommodations. It also requires public accommodations to take necessary steps to ensure individuals with disabilities are not excluded, denied services, segregated or otherwise treated differently because of the absence of auxiliary aids and services, such as accurate captioning of audible materials and labeling of visual materials.
Monday, November 25, 2013
Justice Department Seeks to Intervene in Lawsuit Alleging H&R Block’s Tax Preparation Website Is Inaccessible to Individuals with Disabilities
The Civil Rights Division and U.S. Attorney Carmen Ortiz announced today that they have moved to intervene in National Federation of the Blind et al v. HRB Digital LLC et al, a private lawsuit alleging disability discrimination by HRB Digital LLC and HRB Tax Group Inc., subsidiaries of H&R Block Inc. In the memorandum and proffered complaint filed by the United States in support of its motion to intervene, the United States alleges that the H&R Block companies discriminate against individuals with disabilities and that their website, www.hrblock.com , is being operated in violation of Title III of the Americans with Disabilities Act (ADA), notwithstanding well-established and readily available guidelines for delivering web content in an accessible manner. The motion, attached complaint in intervention and supporting memorandum were filed in U.S. District Court for the District of Massachusetts’ Boston Division.
As alleged in the filings today, H&R Block is one of the largest tax return preparers in the United States. Its companies offer a wide range of services through www.hrblock.com , including professional and do-it-yourself tax preparation, instructional videos, office location information, interactive live video conference and chat with tax professionals, hybrid online and in-store services and electronic filing. Their website, however, is not accessible to many individuals with disabilities and prevents some people with disabilities from completing even the most basic activities on the site.
Today’s filings further state that many individuals with disabilities, including, among others, people who are blind, deaf or have physical disabilities with an impact on manual dexterity, use computers and the Internet with the help of assistive technologies. For example, screen reader software makes audible information that is otherwise presented visually on a computer screen; captioning translates video narration and sound into text; and keyboard navigation allows keyboard input rather than a mouse to navigate a website for individuals with visual, hearing or manual dexterity disabilities. Such technologies have been widely used for some time and there are readily available, well-established, consensus-based guidelines – the Web Content Accessibility Guidelines (WCAG) 2.0 – for making web content accessible to individuals with disabilities.
The complaint in intervention seeks a court order that would ensure that tax services offered through www.hrblock.com are fully and equally accessible to individuals with disabilities. The department also seeks an award of monetary damages for aggrieved individuals, including the two named plaintiffs and a civil penalty to vindicate the public interest.
“The web revolutionizes our lives daily and maximizes our independence in many areas,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “Inaccessible websites of public accommodations are not simply an inconvenience to individuals with disabilities – they deny persons with disabilities access to basic goods and services that people without disabilities take advantage of every day. An inaccessible website can also mean a business loses a customer it never knew it had.”
“We are building an electronic world in which we ever-increasingly live,” said U.S. Attorney Carmen Ortiz for the District of Massachusetts. “All benefit when, as the ADA requires, we build our online businesses, schools and other public spaces in a manner equally accessible to all.”
Title III of the ADA prohibits discrimination on the basis of disability by public accommodations in the full and equal enjoyment of the goods, services, facilities, privileges, advantages and accommodations. It also requires public accommodations to take necessary steps to ensure individuals with disabilities are not excluded, denied services, segregated or otherwise treated differently because of the absence of auxiliary aids and services, such as accurate captioning of audible materials and labeling of visual materials.
Wednesday, November 27, 2013
TWO EXECUTIVES INDICTED IN AUTO PARTS PRICE FIXING CASE
FROM: U.S. JUSTICE DEPARTMENT
TWO EXECUTIVES INDICTED FOR ROLES IN FIXING PRICES
ON AUTOMOBILE PARTS SOLD TO TOYOTA
TO BE INSTALLED IN U.S. CARS
WASHINGTON — A Cleveland federal grand jury returned an indictment against two executives of a Japanese automotive supplier for their roles in an international conspiracy to fix prices of automotive anti-vibration rubber parts sold to Toyota and installed in U.S. cars, the Department of Justice announced today.
The indictment, filed yesterday in U.S. District Court for the Northern District of Ohio in Toledo, charges Masao Hayashi and Kenya Nonoyama, both Japanese nationals, with participating in a conspiracy to suppress and eliminate competition in the automotive parts industry by agreeing to allocate the supply of, to rig bids for and to fix, raise and maintain the prices of anti-vibration rubber parts sold to Toyota Motor Corp., Toyota Motor Engineering & Manufacturing North America Inc. and affiliated companies (collectively Toyota) for installation in automobiles manufactured and sold in the United States and elsewhere.
Automotive anti-vibration rubber products are comprised primarily of rubber and metal, and include engine mounts and suspension bushings. They are installed in automobiles for the purpose of reducing road and engine vibration.
The indictment alleges, among other things, that from as early as March 1996 until at least December 2008, Hayashi and Nonoyama and their co-conspirators conducted meetings and communications in Japan to reach collusive agreements. The indictment alleges that the conspiracy involved agreements affecting the Toyota Corolla, Avalon, Tacoma, Camry, Tundra, Sequoia, Rav4, Sienna, Venza and Highlander.
“Today’s indictment reaffirms the Antitrust Division’s commitment to hold executives accountable for actions that corrupt the competitive landscape and harm consumers,” said Renata B. Hesse, Deputy Assistant Attorney General for the Department of Justice’s Antitrust Division. “The Antitrust Division continues to work closely with its fellow competition enforcers abroad to ensure that there are no safe harbors for executives who engage in international cartel crimes.”
Hayashi and Nonoyama are charged with a violation of 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 of the crime, if either of those amounts is greater than the statutory maximum fine.
Including Hayashi and Nonoyama, 21 companies and 26 executives have been charged in the Justice Department’s ongoing investigation into the automotive parts industry. To date, more than $1.6 billion in criminal fines have been obtained and seventeen of the charged executives have been sentenced to serve time in U.S. prisons or have entered into plea agreements calling for significant prison sentences.
The charges are the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI. Today’s charges were brought by the Antitrust Division’s Chicago Office and the FBI’s Cleveland Field Office, with the assistance of the FBI headquarters’ International Corruption Unit and the U.S. Attorney’s Office for the Northern District of Ohio.
TWO EXECUTIVES INDICTED FOR ROLES IN FIXING PRICES
ON AUTOMOBILE PARTS SOLD TO TOYOTA
TO BE INSTALLED IN U.S. CARS
WASHINGTON — A Cleveland federal grand jury returned an indictment against two executives of a Japanese automotive supplier for their roles in an international conspiracy to fix prices of automotive anti-vibration rubber parts sold to Toyota and installed in U.S. cars, the Department of Justice announced today.
The indictment, filed yesterday in U.S. District Court for the Northern District of Ohio in Toledo, charges Masao Hayashi and Kenya Nonoyama, both Japanese nationals, with participating in a conspiracy to suppress and eliminate competition in the automotive parts industry by agreeing to allocate the supply of, to rig bids for and to fix, raise and maintain the prices of anti-vibration rubber parts sold to Toyota Motor Corp., Toyota Motor Engineering & Manufacturing North America Inc. and affiliated companies (collectively Toyota) for installation in automobiles manufactured and sold in the United States and elsewhere.
Automotive anti-vibration rubber products are comprised primarily of rubber and metal, and include engine mounts and suspension bushings. They are installed in automobiles for the purpose of reducing road and engine vibration.
The indictment alleges, among other things, that from as early as March 1996 until at least December 2008, Hayashi and Nonoyama and their co-conspirators conducted meetings and communications in Japan to reach collusive agreements. The indictment alleges that the conspiracy involved agreements affecting the Toyota Corolla, Avalon, Tacoma, Camry, Tundra, Sequoia, Rav4, Sienna, Venza and Highlander.
“Today’s indictment reaffirms the Antitrust Division’s commitment to hold executives accountable for actions that corrupt the competitive landscape and harm consumers,” said Renata B. Hesse, Deputy Assistant Attorney General for the Department of Justice’s Antitrust Division. “The Antitrust Division continues to work closely with its fellow competition enforcers abroad to ensure that there are no safe harbors for executives who engage in international cartel crimes.”
Hayashi and Nonoyama are charged with a violation of 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 of the crime, if either of those amounts is greater than the statutory maximum fine.
Including Hayashi and Nonoyama, 21 companies and 26 executives have been charged in the Justice Department’s ongoing investigation into the automotive parts industry. To date, more than $1.6 billion in criminal fines have been obtained and seventeen of the charged executives have been sentenced to serve time in U.S. prisons or have entered into plea agreements calling for significant prison sentences.
The charges are the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI. Today’s charges were brought by the Antitrust Division’s Chicago Office and the FBI’s Cleveland Field Office, with the assistance of the FBI headquarters’ International Corruption Unit and the U.S. Attorney’s Office for the Northern District of Ohio.
Sunday, November 24, 2013
DOJ ANNOUNCES NURSING HOME OPERATOR TO PAY $48 MILLION TO RESOLVE FALSE CLAIMS ACQUISITIONS
FROM: U.S. JUSTICE DEPARTMENT
Tuesday, November 19, 2013
Nursing Home Operator to Pay $48 Million to Resolve Allegations That Six California Facilities Billed for Unnecessary Therapy
The Ensign Group Inc., a skilled nursing provider based in Mission Viejo, Calif., that operates nursing homes across the western U.S. has agreed to pay $48 million to resolve allegations that it knowingly submitted to Medicare false claims for medically unnecessary rehabilitation therapy services, the Justice Department announced today. Six of Ensign’s skilled nursing facilities in California allegedly submitted the false claims: Atlantic Memorial Healthcare Center, located in Long Beach; Panorama Gardens, located in Panorama City; The Orchard Post-Acute Care (a.k.a. Royal Court), located in Whittier; Sea Cliff Healthcare Center, located in Huntington Beach; Southland, located in Norwalk; and Victoria Care Center, located in Ventura.
“Skilled nursing facilities that place their own financial interests above the needs of their patients will be held accountable,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “We will continue to advocate for the appropriate use of Medicare funds and the proper care of our senior citizens.”
Between January 1, 1999, and August 31, 2011, these six Ensign skilled nursing facilities allegedly submitted false claims to the government for physical, occupational and speech therapy services provided to Medicare beneficiaries that were not medically necessary. Specifically, Ensign provided therapy to patients whose conditions and diagnoses did not warrant it, solely to increase its reimbursement from Medicare. The government further alleged that Ensign created a corporate culture that improperly incentivized therapists and others to increase the amount of therapy provided to patients to meet planned targets for Medicare revenue. These targets were set without regard to patients’ individual therapy needs and could only be achieved by billing at the highest reimbursement levels. The government also alleged that Ensign billed for inflated amounts of therapy it had not provided and that certain patients were kept in these facilities for periods of time exceeding what was medically necessary for treatment of their conditions.
“The case against The Ensign Group involves a company that regularly bilked Medicare by submitting inflated bills that, in some cases, sought money for services that simply were never provided to patients,” said U.S. Attorney for the Central District of California André Birotte Jr. “This settlement – one of the largest Medicare fraud cases against a nursing home chain in U.S. history – demonstrates our commitment to protecting taxpayers who fund important programs that benefit millions of Americans, but don’t want to see their hard-earned money wasted on fraud or abuse.”
In addition to paying the settlement amount, Ensign also agreed that each of its skilled nursing facilities across the nation would be bound by the terms of a Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General (HHS-OIG).
"Billing Medicare for costly, unnecessary skilled nursing services -- as the government alleged here -- inflates health care costs borne by taxpayers," said Special Agent in Charge for the Los Angeles Region of the HHS-OIG Glenn R. Ferry. “This settlement again puts on notice those who would consider defrauding federally funded health care programs."
This civil settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered more than $16.7 billion through False Claims Act cases, with more than $11.9 billion of that amount recovered in cases involving fraud against federal health care programs.
The allegations settled today arose from lawsuits filed by two former Ensign therapists under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring suit on behalf of the government and to share in any recovery. The dollar amount that the whistleblowers in this case, Gloria Patterson and Carol Sanchez, will receive has not been determined. The lawsuits are captioned as United States of America ex rel. Gloria Patterson v. Ensign Group Inc., Case No. SACV 06-6956 CJC (ANx) (C.D. Calif.) and United States of America ex rel. Carol Sanchez v. Ensign Group Inc., Case No. SACV 06-0643 CJC (ANx) (C.D. Calif.).
The case was handled by the U.S. Attorney’s Office for the Central District of California, with assistance from the Commercial Litigation Branch, Civil Division, U.S. Department of Justice and the U.S. Department of Health and Human Services Office of Inspector General. This action was supported by the Elder Justice and Nursing Home Initiative, which coordinates the department’s activities combating elder abuse, neglect and financial exploitation, especially as they impact beneficiaries of Medicare, Medicaid and other federal health care programs.
Tuesday, November 19, 2013
Nursing Home Operator to Pay $48 Million to Resolve Allegations That Six California Facilities Billed for Unnecessary Therapy
The Ensign Group Inc., a skilled nursing provider based in Mission Viejo, Calif., that operates nursing homes across the western U.S. has agreed to pay $48 million to resolve allegations that it knowingly submitted to Medicare false claims for medically unnecessary rehabilitation therapy services, the Justice Department announced today. Six of Ensign’s skilled nursing facilities in California allegedly submitted the false claims: Atlantic Memorial Healthcare Center, located in Long Beach; Panorama Gardens, located in Panorama City; The Orchard Post-Acute Care (a.k.a. Royal Court), located in Whittier; Sea Cliff Healthcare Center, located in Huntington Beach; Southland, located in Norwalk; and Victoria Care Center, located in Ventura.
“Skilled nursing facilities that place their own financial interests above the needs of their patients will be held accountable,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “We will continue to advocate for the appropriate use of Medicare funds and the proper care of our senior citizens.”
Between January 1, 1999, and August 31, 2011, these six Ensign skilled nursing facilities allegedly submitted false claims to the government for physical, occupational and speech therapy services provided to Medicare beneficiaries that were not medically necessary. Specifically, Ensign provided therapy to patients whose conditions and diagnoses did not warrant it, solely to increase its reimbursement from Medicare. The government further alleged that Ensign created a corporate culture that improperly incentivized therapists and others to increase the amount of therapy provided to patients to meet planned targets for Medicare revenue. These targets were set without regard to patients’ individual therapy needs and could only be achieved by billing at the highest reimbursement levels. The government also alleged that Ensign billed for inflated amounts of therapy it had not provided and that certain patients were kept in these facilities for periods of time exceeding what was medically necessary for treatment of their conditions.
“The case against The Ensign Group involves a company that regularly bilked Medicare by submitting inflated bills that, in some cases, sought money for services that simply were never provided to patients,” said U.S. Attorney for the Central District of California André Birotte Jr. “This settlement – one of the largest Medicare fraud cases against a nursing home chain in U.S. history – demonstrates our commitment to protecting taxpayers who fund important programs that benefit millions of Americans, but don’t want to see their hard-earned money wasted on fraud or abuse.”
In addition to paying the settlement amount, Ensign also agreed that each of its skilled nursing facilities across the nation would be bound by the terms of a Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General (HHS-OIG).
"Billing Medicare for costly, unnecessary skilled nursing services -- as the government alleged here -- inflates health care costs borne by taxpayers," said Special Agent in Charge for the Los Angeles Region of the HHS-OIG Glenn R. Ferry. “This settlement again puts on notice those who would consider defrauding federally funded health care programs."
This civil settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered more than $16.7 billion through False Claims Act cases, with more than $11.9 billion of that amount recovered in cases involving fraud against federal health care programs.
The allegations settled today arose from lawsuits filed by two former Ensign therapists under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring suit on behalf of the government and to share in any recovery. The dollar amount that the whistleblowers in this case, Gloria Patterson and Carol Sanchez, will receive has not been determined. The lawsuits are captioned as United States of America ex rel. Gloria Patterson v. Ensign Group Inc., Case No. SACV 06-6956 CJC (ANx) (C.D. Calif.) and United States of America ex rel. Carol Sanchez v. Ensign Group Inc., Case No. SACV 06-0643 CJC (ANx) (C.D. Calif.).
The case was handled by the U.S. Attorney’s Office for the Central District of California, with assistance from the Commercial Litigation Branch, Civil Division, U.S. Department of Justice and the U.S. Department of Health and Human Services Office of Inspector General. This action was supported by the Elder Justice and Nursing Home Initiative, which coordinates the department’s activities combating elder abuse, neglect and financial exploitation, especially as they impact beneficiaries of Medicare, Medicaid and other federal health care programs.
Friday, November 22, 2013
CARBON BLACK MANUFACTURER AGREES TO SPEND $84 MILLION TO CONTROL AIR POLLUTION
FROM: U.S. JUSTICE DEPARTMENT
Tuesday, November 19, 2013
Cabot Corporation Agrees to Spend Over $84 Million to Control Harmful Air Pollution at Louisiana and Texas Facilities
Boston-based Cabot Corporation, the second largest carbon black manufacturer in the United States, has agreed to pay a $975,000 civil penalty and spend an estimated $84 million on state of the art technology to control harmful air pollution, resolving alleged violations of the New Source Review (NSR) provisions of the Clean Air Act (CAA) at its three facilities in the towns of Franklin and Ville Platte, La., and Pampa, Texas, the Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today. This agreement is the first to result from a national enforcement initiative aimed at bringing carbon black manufacturers into compliance with the CAA’s NSR provisions.
The state of Louisiana Department of Environmental Quality is a co-plaintiff in the case and will receive $292,500 of the penalty.
“By agreeing to pay an appropriate penalty and install state of the art technology to control harmful air pollution, Cabot Corp. is taking a positive step forward to address these alleged violations of the Clean Air Act,” said Acting Assistant Attorney General Robert G. Dreher of the Justice Department’s Environment and Natural Resources Division. “This agreement will serve as a model for how the industry can come into compliance with the Clean Air Act by installing controls that prevent harmful pollution and improve air quality for surrounding communities.”
“With today’s commitment to invest in pollution controls, Cabot has raised the industry standard for environmental protection,” said Assistant Administrator Cynthia Giles of EPA’s Office of Enforcement and Compliance Assurance. “These upgrades will have lasting, tangible impacts on improved respiratory health for local communities. We expect others in the industry to take notice and realize their obligation to protect the communities in which they operate.”
“This is a huge win for the citizens of our district,” said U.S. Attorney Stephanie A. Finley. “These harmful pollutants can cause serious, long term respiratory harm. The United States Attorney’s Office is committed to the enforcement of the environmental laws and protection of the community. This settlement promotes a healthier environment and an opportunity to allow the residents of the district to breathe cleaner air.”
At all three facilities, the settlement requires that Cabot optimize existing controls for particulate matter or soot, operate an “early warning” detection system that will alert facility operators to any particulate matter releases, and comply with a plan to control “fugitive emissions” which result from leaks or unintended releases of gases. To address nitrogen oxide (NOx) pollution, Cabot must install selective catalytic reduction technology to significantly reduce emissions, install continuous monitoring, and comply with stringent limits. At the two larger facilities in Louisiana, Cabot must address sulfur dioxide (SO2) pollution by installing wet gas scrubbers to control emissions, install continuous monitoring, and comply with stringent emissions limits. In addition, the Texas facility is required to comply with a limit on the amount of sulfur in feedstock that is the lowest for any carbon black plant in the United States.
These measures are expected to reduce NOx emissions by approximately 1,975 tons per year, SO2 emissions by approximately 12,380 tons per year, and significantly improve existing particulate matter controls. Exposure to NOx emissions can cause severe respiratory problems and contribute to childhood asthma. SO2 and NOx can be converted to fine particulate matter once released in the air. Fine particulates can be breathed in and lodged deep in the lungs, leading to a variety of health problems and even premature death. The harmful health and environmental impacts from these pollutants can occur near the facilities as well as in communities far downwind from the plants.
In the complaint filed by DOJ on behalf of EPA, the government alleged that, between 2003 and 2009, Cabot made major modifications at its carbon black facilities without obtaining pre-construction permits and without installing and operating required pollution technology. The complaint further alleges that these actions resulted in increased emissions of NOx and SO2, violating CAA requirements stating that companies must obtain the necessary permits prior to making modifications at a facility and must install and operate required pollution control equipment if those modifications will result in increases of certain pollutants.
Today’s action also requires that Cabot spend $450,000 on energy saving and pollution reduction projects that will benefit the communities surrounding the facilities in Franklin and Ville Platte, La., and in Pampa, Texas, such as upgrading air handling units at municipal buildings in the three communities to more efficient technology.
Carbon black is a fine carbonaceous powder used as a structural support medium in tires and as a pigment in a variety of products such as plastic, rubber, inkjet toner and cosmetics. It is produced by burning oil in a low oxygen environment; the oil is transformed into soot (carbon black), which is collected in a baghouse. Because the oil used in the process is low value high sulfur oil, the manufacturing process creates significant amounts of SO2 and NOx, as well as particulate matter.
This settlement is part of EPA’s national enforcement initiative to control harmful air pollution from the largest sources of emissions. Since 2010, EPA has been focusing enforcement efforts on reducing emissions at carbon manufacturing plants in the United States. Currently, none of the 15 carbon black manufacturing plants located in the United States have controls on emissions of SO2 and NOx or have continuous emissions monitors.
Tuesday, November 19, 2013
Cabot Corporation Agrees to Spend Over $84 Million to Control Harmful Air Pollution at Louisiana and Texas Facilities
Boston-based Cabot Corporation, the second largest carbon black manufacturer in the United States, has agreed to pay a $975,000 civil penalty and spend an estimated $84 million on state of the art technology to control harmful air pollution, resolving alleged violations of the New Source Review (NSR) provisions of the Clean Air Act (CAA) at its three facilities in the towns of Franklin and Ville Platte, La., and Pampa, Texas, the Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today. This agreement is the first to result from a national enforcement initiative aimed at bringing carbon black manufacturers into compliance with the CAA’s NSR provisions.
The state of Louisiana Department of Environmental Quality is a co-plaintiff in the case and will receive $292,500 of the penalty.
“By agreeing to pay an appropriate penalty and install state of the art technology to control harmful air pollution, Cabot Corp. is taking a positive step forward to address these alleged violations of the Clean Air Act,” said Acting Assistant Attorney General Robert G. Dreher of the Justice Department’s Environment and Natural Resources Division. “This agreement will serve as a model for how the industry can come into compliance with the Clean Air Act by installing controls that prevent harmful pollution and improve air quality for surrounding communities.”
“With today’s commitment to invest in pollution controls, Cabot has raised the industry standard for environmental protection,” said Assistant Administrator Cynthia Giles of EPA’s Office of Enforcement and Compliance Assurance. “These upgrades will have lasting, tangible impacts on improved respiratory health for local communities. We expect others in the industry to take notice and realize their obligation to protect the communities in which they operate.”
“This is a huge win for the citizens of our district,” said U.S. Attorney Stephanie A. Finley. “These harmful pollutants can cause serious, long term respiratory harm. The United States Attorney’s Office is committed to the enforcement of the environmental laws and protection of the community. This settlement promotes a healthier environment and an opportunity to allow the residents of the district to breathe cleaner air.”
At all three facilities, the settlement requires that Cabot optimize existing controls for particulate matter or soot, operate an “early warning” detection system that will alert facility operators to any particulate matter releases, and comply with a plan to control “fugitive emissions” which result from leaks or unintended releases of gases. To address nitrogen oxide (NOx) pollution, Cabot must install selective catalytic reduction technology to significantly reduce emissions, install continuous monitoring, and comply with stringent limits. At the two larger facilities in Louisiana, Cabot must address sulfur dioxide (SO2) pollution by installing wet gas scrubbers to control emissions, install continuous monitoring, and comply with stringent emissions limits. In addition, the Texas facility is required to comply with a limit on the amount of sulfur in feedstock that is the lowest for any carbon black plant in the United States.
These measures are expected to reduce NOx emissions by approximately 1,975 tons per year, SO2 emissions by approximately 12,380 tons per year, and significantly improve existing particulate matter controls. Exposure to NOx emissions can cause severe respiratory problems and contribute to childhood asthma. SO2 and NOx can be converted to fine particulate matter once released in the air. Fine particulates can be breathed in and lodged deep in the lungs, leading to a variety of health problems and even premature death. The harmful health and environmental impacts from these pollutants can occur near the facilities as well as in communities far downwind from the plants.
In the complaint filed by DOJ on behalf of EPA, the government alleged that, between 2003 and 2009, Cabot made major modifications at its carbon black facilities without obtaining pre-construction permits and without installing and operating required pollution technology. The complaint further alleges that these actions resulted in increased emissions of NOx and SO2, violating CAA requirements stating that companies must obtain the necessary permits prior to making modifications at a facility and must install and operate required pollution control equipment if those modifications will result in increases of certain pollutants.
Today’s action also requires that Cabot spend $450,000 on energy saving and pollution reduction projects that will benefit the communities surrounding the facilities in Franklin and Ville Platte, La., and in Pampa, Texas, such as upgrading air handling units at municipal buildings in the three communities to more efficient technology.
Carbon black is a fine carbonaceous powder used as a structural support medium in tires and as a pigment in a variety of products such as plastic, rubber, inkjet toner and cosmetics. It is produced by burning oil in a low oxygen environment; the oil is transformed into soot (carbon black), which is collected in a baghouse. Because the oil used in the process is low value high sulfur oil, the manufacturing process creates significant amounts of SO2 and NOx, as well as particulate matter.
This settlement is part of EPA’s national enforcement initiative to control harmful air pollution from the largest sources of emissions. Since 2010, EPA has been focusing enforcement efforts on reducing emissions at carbon manufacturing plants in the United States. Currently, none of the 15 carbon black manufacturing plants located in the United States have controls on emissions of SO2 and NOx or have continuous emissions monitors.
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