Saturday, June 14, 2014
Thursday, June 12, 2014
DOJ, COMMERCIAL CLEANING SYSTEMS SETTLE IMMIGRATION DISCRIMINATION CLAIM
FROM: U.S. JUSTICE DEPARTMENT
Thursday, June 12, 2014
Justice Department Settles Immigration-Related Discrimination Claim Against Commercial Cleaning Systems
The Justice Department reached an agreement today with Commercial Cleaning Systems, a janitorial services company with headquarters in Denver. The agreement resolves claims that the company discriminated against work-authorized non-U.S. citizens in violation of the Immigration and Nationality Act (INA).
The department’s investigation was initiated based on a referral from U.S. Citizenship and Immigration Services. The investigation found that Commercial Cleaning Systems required work-authorized non-U.S. citizens to present specific documentation issued by the U.S. Department of Homeland Security in order to verify their employment eligibility, while U.S. citizens were permitted to present their choice of documentation. The INA’s anti-discrimination provision prohibits employers from placing additional documentary burdens on work-authorized employees during the hiring and employment eligibility verification process based on their citizenship status or national origin.
Under the settlement agreement, Commercial Cleaning Systems will pay $53,500 in civil penalties, create a $25,000 back pay fund to compensate individuals who may have lost wages as a result of the company’s discriminatory document practices, and be subject to monitoring of its employment eligibility verification practices for one year.
“Discriminating against work-authorized employees because they are not citizens violates federal law and the Justice Department is committed to enforcing this law,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “We applaud Commercial Cleaning Systems for working cooperatively with the division to resolve this matter.”
The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA. The statute also prohibits, among other things, citizenship status and national origin discrimination in hiring, firing and recruitment or referral for a fee. The case was handled by OSC Trial Attorney Linda White Andrews.
Tuesday, June 10, 2014
Saturday, June 7, 2014
JUDGE RULES PAYDAY LENDER DECEIVED CONSUMERS AND INFLATED FEES
FROM: U.S. FEDERAL TRADE COMMISSION
U.S. District Judge Finds that Payday Lender AMG Services Deceived Consumers by Imposing Undisclosed Charges and Inflated Fees
Judge Navarro ruled last week that the defendants deceived consumers about the cost of their loans by imposing undisclosed charges and inflated fees. In many cases, the defendants’ inflated fees left borrowers with supposed debts of more than triple the amount they had borrowed. In one typical example, the defendants allegedly told one consumer that a $500 loan would cost him $650 to repay. But the defendants attempted to charge him $1,925 to pay off the $500 loan. The defendants used deceptive loan documents in connection with at least five million consumer loans.
Adopting an earlier recommendation from Magistrate Judge Cam Ferenbach, Judge Navarro found that the defendants’ lending practices were deceptive because by failing to disclose charges and inflating fees, they hid from consumers the true cost of the payday loans they offered.
Last week’s decision follows another significant ruling in the FTC’s favor. In March, after the defendants claimed their affiliation with American Indian tribes shielded them from federal law enforcement, Judge Navarro ruled against them finding that the FTC Act grants the agency authority to regulate arms of Indian tribes, their employees, and their contractors.
In her latest decision, Judge Navarro noted that the key portions of defendants’ loan documents were “convoluted,” “buried,” “hidden,” and “scattered.” And she further cited evidence indicating that the defendants’ “employees were instructed to conceal how the loan repayment plans worked in order to keep potential borrowers in the dark.”
“Like any other contract, payday lending contracts must disclose the true cost consumers will pay,” said Jessica Rich, Director of the agency’s Bureau of Consumer Protection. “This is especially important because many consumers who take out payday loans calculate the amount they can afford to pay down to the dollar.”
The FTC has sued a number of payday lenders for engaging in unfair and deceptive practices targeting financially distressed consumers who are seeking short-term loans.
When the FTC sued the defendants behind AMG Services in 2012, it alleged that they violated the FTC Act by piling on undisclosed and inflated fees, and by threatening borrowers in debt collection calls with arrest and lawsuits. The defendants violated the Truth in Lending Act by giving inaccurate loan information to borrowers, and the Electronic Fund Transfer Act by requiring consumers to preauthorize electronic withdrawals from their bank accounts as a condition of obtaining credit, according to the FTC.
The Federal Trade Commission reached a partial settlement on other issues last year with the principal AMG defendants. The order bars the settling defendants from using threats of arrest and lawsuits as a tactic for collecting debts, and from requiring all borrowers to agree in advance to electronic withdrawals from their bank accounts as a condition of obtaining credit.
Litigation in the case will continue to determine the liability of each defendant and the damages the court will impose.
The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them
Wednesday, June 4, 2014
IOWA COMPANY AND EXECS PLEAD GUILTY IN CASE INVOLVING ADULTERATED EGGS
FROM: U.S. JUSTICE DEPARTMENT
Tuesday, June 3, 2014
Iowa Company and Top Executives Plead Guilty in Connection with Distribution of Adulterated Eggs
Company Also Pleads Guilty to Bribery of Public Official and Introduction of Misbranded Eggs
Quality Egg LLC (Quality Egg), Austin “Jack” DeCoster and Peter DeCoster pleaded guilty today in federal court in Sioux City, Iowa, in connection with the distribution of adulterated eggs in interstate commerce. As part of their plea agreements, the company and the two individuals admitted the company’s shell eggs were adulterated in that they contained a poisonous and deleterious substance, Salmonella Enteriditis, that may have rendered the eggs injurious to health.
Assistant Attorney General Stuart F. Delery of the Justice Department’s Civil Division and U.S. Attorney Kevin W. Techau of the Northern District of Iowa made the announcement.
Quality Egg, an egg production company with operations in Wright County, Iowa, pleaded guilty to one count of bribery of a public official, one count of introducing a misbranded food into interstate commerce with intent to defraud, and one count of introducing adulterated food into interstate commerce. Austin “Jack” DeCoster, 79, of Turner, Maine, and Peter DeCoster, 51, of Clarion, Iowa, each pled guilty to one count of introducing adulterated food into interstate commerce.
As part of its plea agreement, Quality Egg acknowledged that, on at least two occasions in 2010, its employees gave a cash bribe to an Inspector of the U.S. Department of Agriculture (USDA). The USDA Inspector’s job responsibilities included inspecting shell eggs at one or more of Quality Egg’s production facilities in Iowa. Quality Egg admitted its employees provided the bribe to the USDA Inspector (now deceased) in an attempt to corruptly influence the inspector to exercise his authority to release pallets of retained eggs for sale without re-processing the eggs as required by law and USDA standards. The eggs had been retained or “red tagged” for failing to meet minimum USDA quality grade standards.
On Sept. 12, 2012, former Quality Egg employee Tony Wasmund, 63, pleaded guilty to one count of conspiracy to bribe a public official, sell restricted eggs with intent to defraud, introduce misbranded food into interstate commerce with intent to defraud and mislead. Wasmund is scheduled to be sentenced before United States District Court Judge Mark W. Bennett of the Northern District of Iowa on Sept. 12, 2014.
Quality Egg also pleaded guilty to introducing misbranded eggs into interstate commerce with the intent to defraud. As part of its plea agreement, Quality Egg admitted that, beginning no later than January 2006 and continuing through Aug. 12, 2010, its employees affixed labels to egg shipments that indicated false expiration dates with the intent to mislead state regulators and retail egg customers regarding the true age of the eggs. Quality Egg acknowledged that there were a number of ways that the company mislabeled older eggs with newer processing and expiration dates prior to shipping the eggs to customers in California, Arizona and other states. Sometimes Quality Egg personnel did not put any processing or corresponding expiration dates on the eggs when they were processed. The eggs would be kept in storage for several days or up to several weeks. Then, just prior to shipping the eggs, Quality Egg personnel labeled the eggs with processing dates that were false.
As part of its plea agreement to the charge of introducing adulterated eggs into interstate commerce, Quality Egg admitted that, between about the beginning of 2010 and in or about August 2010, the company sold shell eggs that were adulterated in that they contained a poisonous and deleterious substance, Salmonella Enteriditis. The company acknowledged that it produced, processed, held, and packed the contaminated eggs in Iowa and sold and caused the distribution of the eggs to buyers in states other than Iowa.
Austin “Jack” DeCoster and Peter DeCoster each pleaded guilty to one count of introducing adulterated eggs into interstate commerce.
As part of his plea agreement, Austin “Jack” DeCoster admitted that he was the trustee of a trust that owned Quality Egg (also doing business as Wright County Egg, and Environ), and he exercised substantial control over the operations of Quality Egg and related entities and assets in Iowa. Austin “Jack” DeCoster acknowledged that he was the person ultimately responsible for the operations of Quality Egg and the various egg facilities in Iowa associated with Quality Egg.
Peter DeCoster, as part of his plea agreement, admitted that was the Chief Operating Officer of Quality Egg, and he exercised some control over the production and distribution of shell eggs by Quality Egg and related entities and assets in Iowa. Peter DeCoster acknowledged he was one of the persons responsible for running the operations of Quality Egg and the various egg facilities in Iowa associated with Quality Egg.
Both Austin “Jack” DeCoster and Peter DeCoster admitted that between about the beginning of 2010 and in or about August 2010, Quality Egg introduced and caused to be introduced into interstate commerce shell eggs that were adulterated, in that they contained a poisonous and deleterious substance, Salmonella Enteriditis.
Sentencing will be set before Judge Mark W. Bennett after presentence reports are prepared. Austin “Jack” DeCoster and Peter DeCoster remain free on bail pending sentencing.
On the bribery count, Quality Egg faces a sentence of probation for at least one and up to five years and a fine equal to the greater of three times the monetary equivalent of the thing of value given, offered, or promised as part of the offense, or $500,000. Quality Egg also agreed to forfeit a money judgment of $10,000 representing proceeds of the bribery offense.
On the introducing misbranded eggs into interstate commerce with the intent to defraud count, Quality Egg faces a maximum sentence of probation for at least one and up to five years and a fine equal to the greater of twice the gross gain resulting from the offense, twice the gross loss resulting from the offense, or $500,000.
On the introducing adulterated eggs in interstate commerce count, Quality Egg faces a sentence of probation for up to five years and a fine equal to the greater of twice the gross gain resulting from the offense, twice the gross loss resulting from the offense, or $100,000.
Austin “Jack” DeCoster and Peter DeCoster each face a maximum sentence of up to one year imprisonment or a term of probation of not more than five years; a fine equal to the greater of twice the gross gain or the gross loss resulting from the offense, or $100,000; and a term of supervised release after any imprisonment for up to one year.
The case is being prosecuted by Trial Attorneys Lisa Hsiao and Christopher Parisi of the Consumer Protection Branch of the Justice Department’s Civil Division and Assistant U.S. Attorney Peter Deegan of the Northern District of Iowa. They were assisted by Associate Chief Counsel Michael Varrone of the Food and Drug Division, Office of General Counsel, Department of Health and Human Services. The case was investigated by the Food and Drug Administration’s Office of Criminal Investigations, the United States Department of Agriculture Office of Inspector General, and the FBI.
Saturday, May 31, 2014
DOJ FILES LAWSUIT ALLEGING DISABILITY-BASED DISCRIMINATION AGAINST MISSISSIPPI DEVELOPER
FROM: U.S. JUSTICE DEPARTMENT
Friday, May 23, 2014
Justice Department Files Lawsuit Alleging Disability-Based Discrimination by Mississippi Developer
The Justice Department filed a lawsuit against Mississippi-based developer Dawn Properties Inc. (Dawn) and its affiliated companies for violating the Fair Housing Act (FHA) and the Americans with Disabilities Act (ADA). The lawsuit alleges that the defendants violated these laws when they designed and constructed five or more residential properties with barriers that make them inaccessible to persons with disabilities.
“For over two decades, the Fair Housing Act and ADA have required those who design and build multifamily housing complexes to make them accessible to persons with disabilities,” said Acting Assistant Attorney General Jocelyn Samuels for the Justice Department’s Civil Rights Division. “When residential complexes are built with steps but without ramps or other means of access for wheelchair users, Americans with disabilities are denied the basic right to equal housing opportunities.”
“When a developer fails to comply with the Fair Housing Act and the Americans with Disabilities Act, it deprives those with disabilities of their fundamental right to live and raise families in the environment of their choosing,” said U.S. Attorney Gregory K. Davis for the Southern District of Mississippi.
The suit, filed in the U.S. District Court in Gulfport, Mississippi, alleges that The Lexington (Ridgeland, Mississippi), The Beach Club (Long Beach, Mississippi), The Belmont (Hattiesburg, Mississippi), Grand Biscayne (Biloxi, Mississippi) and Inn by the Sea (Pass Christian, Mississippi) have significant barriers, including steps leading to building entrances, non-existent or excessively sloped pedestrian routes from apartment units to site amenities (such as playgrounds, picnic areas and clubhouses or leasing offices), insufficient maneuvering space for wheelchairs in bathrooms and kitchens, excessively high light switches and environmental controls, and inaccessible parking.
The suit seeks a court order requiring the defendants to bring properties they have designed and constructed since 1991 into compliance with the FHA and the ADA, as well as monetary damages for persons harmed by the lack of accessibility and civil penalties to the United States. The suit also names Dawn’s affiliates Southern Cross Construction Company Inc., Ridgeland Construction One LLC, The Beach Club LLC, The Beach Club II LLC, The Belmont of Lamar LLC, Grand Biscayne Apts. LLC and Seainn LLC, as well as the current owners of the complexes who are necessary parties to the litigation.
Friday, May 30, 2014
U.S. GOVERNMENT FILES COMPLAINT AGAINST CA INC. FOR ALLEGED FALSE CLAIMS ACT VIOLATIONS
FROM: U.S. JUSTICE DEPARTMENT
Thursday, May 29, 2014
Government Files Complaint Against CA Inc. for False Claims on GSA Contract
“We expect companies that do business with the government to comply with their contractual obligations,” said Assistant Attorney General of the Justice Department’s Civil Division Stuart F. Delery. “As this case demonstrates, we will take action against those who seek to abuse the government’s procurement process.”
“Too many federal contractors think they can get away with overcharging the government,” said U.S. Attorney for the District of Columbia Ronald C. Machen Jr. “Our complaint alleges that CA broke its promise to give the government the same prices it was giving commercial customers. We look forward to vigorously pressing these claims in court and recovering every dollar that is owed to the American taxpayer.”
In September 2002, CA entered into a GSA contract to provide software licenses, software maintenance, training and consulting services to various government agencies. The government’s complaint alleges that, since at least 2006, CA knowingly overcharged the government for software licenses and maintenance in various ways. For example, the government alleges that CA provided incomplete and inaccurate information to GSA contracting officers during negotiation of contract extensions. At the time CA negotiated these extensions, applicable regulations and contract provisions required CA to fully and accurately disclose how it conducted business in the commercial marketplace, so GSA could use that information to negotiate a fair price for government customers. The government also alleges that CA failed to truthfully update its discounting practices during the life of the GSA contract. CA repeatedly certified to GSA that its discounting policies and practices had not changed, when in fact its discounts to commercial customers had increased.
The government’s complaint also alleges that, since 2002, CA failed to apply properly the contract’s price reduction clause. The contract required CA to monitor discounts to certain commercial customers, compare these discounts to the discounts given to the government and, if the commercial discounts were higher, pass on those higher discounts to the government. The government alleges that CA failed to make those comparisons or, when it did make such comparisons, failed to do so correctly, resulting in the government overpaying for CA’s information technology.
CA’s contract is a Multiple Award Schedule (MAS) contract. Under the MAS program, GSA pre-negotiates prices and contract terms for subsequent orders by federal agencies. Agencies that purchase under CA’s contract include the Department of Defense, the Department of Energy, the Department of Health and Human Services and the Department of Labor.
“Companies doing business with the federal government on a GSA schedule must disclose current, accurate, and complete commercial discounts, so that GSA can get the best prices on behalf of American taxpayers,” said GSA Acting Inspector General Robert C. Erickson. “We will continue to investigate all allegations indicating that the federal government may have been overcharged by a contractor.”
Some of the allegations that are the subject of the government’s complaint were filed in a lawsuit originally brought by Dani Shemesh, a former employee of CA Israel Ltd., under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government and to share in any recovery. The Act also authorizes the government to intervene and assume primary responsibility for litigating the lawsuit, as the government has done in this case. The government had previously notified the court that it intended to join in Shemesh’s lawsuit and file its own complaint.
This investigation reflects a coordinated effort among the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Columbia and the GSA’s Office of Inspector General.
The qui tam case is captioned United States ex rel. Dani Shemesh v. CA Inc., No. 09-1600 (D.D.C.). The complaint filed by the government contains allegations only; there has been no determination of liability.
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