HEALTH CARE COMPANY TO PAY $25.5 MILLION TO RESOLVE FALSE CLAIMS ALLEGATIONS

FROM: U.S. DEPARTMENT OF JUSTICE
Wednesday, April 3, 2013
Intermountain Health Care Inc. Pays U.S. $25.5 Million to Settle False Claims Act Allegations

Intermountain Health Care Inc. has agreed to pay the United States $25.5 million to settle claims that it violated the Stark Statute and the False Claims Act by engaging in improper financial relationships with referring physicians, the Justice Department announced today. Intermountain operates the largest health system in the state of Utah.

The Stark Statute restricts the financial relationships that hospitals may have with doctors who refer patients to them. The relationships at issue in this matter that the United States alleged were prohibited by the Stark Statute included employment agreements under which the physicians received bonuses that improperly took into account the value of some of their patient referrals; and office leases and compensation arrangements between Intermountain and referring physicians that violated other requirements of the Stark Statute. These issues were disclosed to the government by Intermountain.

"The Department of Justice has longstanding concerns about improper financial relationships between health care providers and their referral sources, because such relationships can corrupt a physician's judgment about the patient's true healthcare needs," said Stuart F. Delery, Acting Assistant Attorney General for the Department’s Civil Division. "In addition to yielding a recovery for taxpayers, this settlement should deter similar conduct in the future and help make health care more affordable for patients."

"People should expect that hospitals and doctors care more for their patients than their bottom line profits," said Gerald Roy, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services region including Utah. "So I applaud Intermountain for recognizing their liability and coming forward to self-disclose these violations. We will vigilantly protect taxpayer-funded health programs against Stark violations through tight coordination with our partners at the Department of Justice."

This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. 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 that effort is the False Claims Act, which the Justice Department has used to recover more than $10.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14.2 billion.

The case was handled by the Justice Department’s Civil Division, the United States Attorney’s Office for the District of Utah, the Office of Inspector General of the Department of Health and Human Services and the Centers for Medicare and Medicaid Services. The claims settled by this agreement are allegations only, and there has been no determination of liability.

CHEMICAL COMPANY TO PAY $3 MILLION PENALTY FOR ALLEGED CLEAN AIR ACT VIOLATIONS

FROM: U.S. DEPARTMENT OF JUSTICE
Wednesday, March 27, 2013
Honeywell Resins and Chemicals to Pay $3 Million Penalty, Upgrade Air Pollution Controls at Hopewell, Virginia, Plant

Honeywell Resins and Chemicals LLC has agreed to pay a $3 million civil penalty for alleged Clean Air Act violations at its Hopewell, Va., plant, and improve the facility’s air pollution control equipment and processes, the Justice Department and the U.S. Environmental Protection Agency (EPA) announced today.

The proposed consent decree resolves violations of federal and state air pollution regulations at the Hopewell plant, the world’s largest single-site producer of caprolactam used in the production of nylon, and ammonium sulfate used for fertilizer. According to EPA and the Virginia Department of Environmental Quality, the facility violated Clean Air Act limits on emissions of nitrogen oxide (NOx), benzene and other volatile organic compounds (VOCs) and particulate matter. The plant also allegedly failed to comply with requirements to upgrade air pollution control equipment, to detect and repair leaks of hazardous air pollutants, and to develop safeguards on benzene waste.

In addition to the $3 million civil penalty, Honeywell has agreed to reduce harmful air pollutants, install selective catalytic reduction at four production trains at the facility, conduct a third-party benzene waste operations audit, and implement an enhanced leak detection and repair program at the facility. Honeywell will also perform a mitigation project valued at approximately $1 million at the facility. The settlement reduces annual emissions of NOx by about 6,260 tons, and cuts annual emissions of benzene, other VOCs and hazardous air pollutants by 100 tons. The estimated cost for injunctive relief to address these emissions will be approximately $66 million dollars. The civil penalty will be split evenly between Virginia and the United States.

As part of the settlement, Honeywell did not admit liability for the violations, but has certified that it is now in compliance with applicable Clean Air Act regulations. The proposed consent decree is subject to a 30 day public comment period and final court approval.

U.S. JUSTEICE DEPARTMENT GENERATED ALMOST $2 BILLION FROM CONSUMER FRAUD CASES

FROM: U.S. DEPARTMENT OF JUSTICE
Friday, March 8, 2013
Justice Department Secures Nearly $2 Billion in Consumer Protection Cases in 2012
Through Consumer Protection Branch, Civil Division Successfully Combatted Consumer Fraud Schemes
The Justice Department’s Consumer Protection Branch secured nearly $2 billion in criminal fines, forfeiture, restitution, and civil disgorgement in 2012, Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division, announced today at the Consumer Protection Working Group’s Second Annual Consumer Protection Summit. Since 2009, the consumer protection efforts of the Civil Division, working with U.S. Attorneys’ Offices around the country, have led to recoveries of more than $5.89 billion, over 140 criminal convictions, and total prison sentences exceeding 327 years.

"This summit and our other outreach efforts are essential to the fight against consumer fraud. But our real strength lies in the cases brought by the attorneys in the Consumer Protection Branch every day. The results the branch achieved in 2012 are outstanding, and reflect the determination of this Department of Justice to combatting consumer fraud," said Principal Deputy Assistant Attorney General Delery, who serves as a co-chair of the Consumer Protection Working Group of the President’s Financial Fraud Enforcement Task Force. "The Consumer Protection Branch’s extraordinary work enforcing federal consumer protection laws has reached new levels, and is evidence that the department has made protecting consumers a top priority."

The summit brings together over two dozen state and federal agencies to highlight some of the most significant issues facing consumers today: consumer debt, nutritional supplements, money and imposter scams and tax-related fraud. The summit exposes some of the most egregious fraud schemes, provides information on how consumers can protect themselves, and shares what the Consumer Protection Working Group is doing to combat fraud in these areas.

Recently reorganized, the Consumer Protection Branch deploys powerful enforcement tools in creative ways to protect the most vulnerable consumers from myriad forms of fraud and abuse, including financial fraud, new forms of telemarketing fraud, and immigration services fraud.

In 2012, for example, the branch prosecuted three Missouri individuals for their roles in a scheme to defraud consumers seeking immigration-related services. These individuals worked for a company that defrauded legal immigrants who were trying to abide by the rules. The firm falsely told consumers that it employed paralegals who would help customers correctly fill out immigration forms, that it handled excess call volume for U.S. Citizenship and Immigration Services (USCIS), and that fees paid to the firm included government processing fees. All three defendants in the case pled guilty to conspiring to defraud consumers.

Collaborating closely with state Attorneys General and other federal agencies, t he Consumer Protection Branch has been instrumental in the department’s effort to hold accountable those who, in violating the law, contributed toward the 2008 financial crisis. Earlier this year, the department filed a civil lawsuit against the credit rating agency Standard & Poor’s alleging that S&P engaged in a scheme to defraud investors in structured financial products known as Residential Mortgage-Backed Securities (RMBS) and Collateralized Debt Obligations (CDOs). The lawsuit, brought under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA), alleges that investors, many of them federally insured financial institutions, lost billions of dollars on CDOs for which S&P issued inflated ratings that misrepresented the securities’ true credit risks. The complaint also alleges that S&P falsely represented that its ratings were objective, independent, and uninfluenced by S&P’s relationships with investment banks when, in reality, S&P’s desire for increased revenue and market share led it to favor the interests of these banks over investors. The Consumer Protection Branch played a key role in investigating and bringing the case, along with the Federal Programs Branch of the Civil Division and the U.S. Attorney’s Office for the Central District of California.

The Consumer Protection Branch has also responded to the financial crisis by aggressively pursuing various forms of financial fraud, including foreclosure rescue schemes targeting distressed homeowners. For instance, in 2012, the branch successfully prosecuted four individuals in connection with a firm that claimed to assist homeowners at risk of foreclosure. The defendants represented that homeowners’ properties would be sold to investors, but that the present homeowners could stay in their homes. The defendants designed sham sales to straw purchasers, created false loan applications and documents, pocketed the equity drawn out of the sham sales, and then allowed the loans to go into foreclosure. Victims lost their equity, and most were forced to move out of their homes. The defendants were sentenced to prison for terms of up to five and a half years.

In addition to playing a prominent role in the Consumer Protection Working Group, and organizing the annual Consumer Protection Summit the Consumer Protection Branch has employed new techniques to enhance its outreach and prevention efforts. For instance, the Branch has conducted webinars to educate financial institutions on the dangers of working with payment processors who may facilitate fraudulent schemes. It has also engaged consumer advocacy groups in new ways, and sought to create new partnerships with state attorneys general and military legal assistance providers.

While continuing to innovate, the branch has also sharpened its focus in traditional areas of enforcement, such as ensuring the safety of pharmaceutical products, medical devices, food, and dietary supplements. Health care fraud cases were the sources of the Consumer Protection Branch’s largest recoveries in 2012. The branch brought enforcement actions and criminal prosecutions in response to a number of violations, including the misbranding of pharmaceuticals, deficient manufacturing processes, the sale of adulterated and unsafe products, and the resale of prescription drugs that had been diverted from lawful channels of distribution. The branch recovered more than $1.9 billion in criminal fines and forfeiture and secured 16 criminal convictions in connection with these cases.

"Whether consumers are targeted by scammers looking to cheat them or manufacturers of food or pharmaceuticals that put profit ahead of consumer safety, the department will bring to bear its expertise and all available tools to root out conduct that harms consumers," said Principal Deputy Assistant Attorney General Delery. "The success of the Consumer Protection Branch demonstrates our unwavering commitment to the protecting the health and safety of Americans."

Another key component of the Consumer Protection Branch’s work is defense of the decisions of government agencies charged with protecting consumers. In 2012, the branch successfully defended cases involving, for example, the Food and Drug Administration’s (FDA) approval of various generic drugs to increase consumers’ market choices and the Federal Trade Commission’s (FTC) interpretation of a provision of the Fair Credit Reporting Act (FCRA) that requires lenders to disclose certain information to consumers. The branch was also instrumental in securing court orders requiring major tobacco companies to place statements on their websites, on cigarette packages, and at retail stores correcting past false statements that they had been making about the safety of their products.

Principal Deputy Assistant Attorney General Delery expressed his gratitude and appreciation for the dedicated public servants who work tirelessly to protect consumers. These individuals include attorneys, investigators, paralegals and other personnel throughout the Civil Division, the U.S. Attorneys’ Offices, the Department of Health and Human Services, the FDA, the FTC, the Consumer Product Safety Commission, the Postal Inspection Service and other federal and state agencies.

JUSTICE SETTLES IMMIGRATION-RELATED DISCRIMINATION CLAIM

FROM: U.S. DEPARTMENT OF JUSTICE
Thursday, February 28, 2013
Justice Department Settles Immigration-Related Discrimination Claim Against Illinois Staffing Agency

The Justice Department today reached an agreement with The Agency Staffing located in West Dundee, Ill., resolving claims that the staffing company violated the anti-discrimination provisions of the Immigration and Nationality Act (INA).

The Justice Department’s investigation was initiated based on a referral from the U.S. Citizenship and Immigration Services (USCIS) under a memorandum of agreement between the Civil Rights Division and USCIS. The department’s investigation concluded that The Agency Staffing applied enhanced employment eligibility procedures to work-authorized non-U.S. citizens that were run through E-Verify. The company did not utilize these additional procedures when it ran U.S. Citizens through E-Verify. E-Verify is an Internet-based system run by USCIS that confirms employment eligibility by comparing information from an employee’s Form I-9.

Under the settlement agreement, The Agency Staffing will pay $8,400 in civil penalties to the United States, undergo Justice Department training on the anti-discrimination provision of the INA, and be subject to monitoring of its employment eligibility verification practices for a period of three years. The case settled prior to the Justice Department filing a complaint in this matter.

"Employers cannot create higher hurdles for non-U.S. citizens in the employment eligibility verification process, which includes E-Verify, than those required of U.S. citizens or those required by law," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "We commend The Agency Staffing for restructuring its hiring processes to ensure that it will no longer be treating new hires differently based on their citizenship status."

SHIPPING COMPANY TO PAY $2.2 MILLION FOR OIL POLLUTION COVER-UP

FROM: U.S. DEPARTMENT OF JUSTICE
Friday, February 22, 2013
Singapore-Based Shipping Company to Pay $2.2 Million for Covering up Oil Pollution 

Pacific International Lines, a Singapore-based container ship company, was sentenced today in D.C. federal court under the terms of a plea agreement that requires the company to pay $2.2 million in criminal penalties, the Department of Justice announced today. Pacific International Lines previously pleaded guilty to three felony charges that it made false statements to the U.S. Coast Guard and violated the Act to Prevent Pollution from Ships by concealing illegal waste water operations and discharges in a falsified oil record book – a required log in which all overboard discharges must be recorded – and operating a vessel in waters of the United States without a functioning oil water separator (a required pollution control device). The charges are a result of Pacific International Lines illegal operation of the vessel M/V Southern Lily 2 in June 2012.

"Today's sentencing is a noteworthy success for the few federal law enforcement agencies charged with enforcing U.S. and international maritime laws protecting the oceans and natural marine resources both around the remote U.S. Pacific Islands and throughout the vast area of the South Pacific," said Joshua J. Masterson, Special Agent-in-Charge of Coast Guard Investigative Service-Pacific Region. "This case, being the third of its kind since 2011, should send a clear message to those shipping companies and mariners who willfully cut corners and violate the laws enacted to protect the oceans as well as place a much needed spotlight on this region of the South Pacific."

According to the plea agreement, including a joint factual statement, the company operated the vessel Southern Lily 2 in American Samoa. On June 22, 2012, the vessel was boarded by the U.S. Coast Guard for a routine inspection. During the inspection the Coast Guard discovered that the ship’s oil water separator was not functioning. The Coast Guard learned that the device had not been functioning for several months and, at the direction of the chief and second engineer, the oily waste water had been being discharged overboard in violation of international law. The illegal discharges and the fact that the oil water separator did not function was not entered in the ship’s oil record book as required by federal law.

Additionally, under the terms of the plea agreement, Pacific International Lines was placed on probation for three years, during which time it must operate under the terms of a government-approved Environmental Compliance Plan. The plan includes review by an independent auditor of any of Pacific International Lines ships—including the Southern Lily 2—that trade in the United States.

In addition to the $2 million criminal fine, the judge also ordered Pacific International Lines to pay $200,000 to support community service projects. The projects will be administered by the National Fish & Wildlife Foundation asnd the National Marine Sanctuary Foundation.

Engine room operations on-board large ocean-going vessels such as the Southern Lily 2 generate large amounts of waste oil and oil contaminated bilge waste. International and U.S. law prohibit the discharge of waste containing more than 15 parts per million oil and without treatment by an oil water separator and oil sensing equipment—a required pollution prevention device. The Act to Prevent Pollution from Ships also requires that all overboard discharges be recorded in an oil record book, which is subject to inspection by the Coast Guard. The waste oil may be incinerated on board the ship or offloaded in port for proper disposal.

In related prosecutions, the second engineer of the Southern Lily 2, Qing Cao, pleaded guilty to a felony information charging him with operating the Southern Lily 2 in Waters of the United States without a functioning oil water separator in violation of the Act to prevent Pollution from Ships. The court sentenced Cao to 36 months of probation and ordered Cao to depart the United States immediately. As a condition of probation, the court ordered Cao not to work on any vessels that call at U.S. ports during the term of his probation.

This investigation was conducted by the Pacific Regional Office of the U.S. Coast Guard Investigative Service Honolulu, Hawaii, and Senior Litigation Counsel Howard P. Stewart of the Justice Department’s Environmental Crimes Section.

ASSISTANT ATTORNEY GENRAL DELERY SPEAKS AT PCA PEN AND PAD

FROM: U.S. DEPARTMENT OF JUSTICE
Principal Deputy Assistant Attorney General Stuart F. Delery Speaks at the PCA Pen and Pad
Washington, D.C. ~ Thursday, February 21, 2013

Good morning. I am joined today by Michael J. Moore, the United States Attorney for the Middle District of Georgia, Adam Lee, FBI Section Chief, Public Corruption and Civil Rights, and John Roth, Director of the FDA’s Office of Criminal Investigations, to announce a major step in this Administration’s efforts to fight fraud and protect the safety of America’s food supply.

As the head of the Justice Department’s Civil Division, I oversee the Consumer Protection Branch, which is responsible for enforcing the Food, Drug, and Cosmetic Act. Under the FDCA, it is illegal to introduce into our markets a food or drug that is adulterated – which, for foods, generally can mean either that the product is tainted or that it was produced or handled in insanitary conditions. As a result, the FDCA is a powerful tool for protecting the health and safety of all Americans. Using the FDCA, the Department has worked to prevent adulterated products from reaching consumers by securing injunctions that ban companies from distributing food or drugs until they have cleaned up their facilities. And, when adulterated products do reach the market and pose a significant danger to the public, we will not hesitate to bring criminal cases that seek to hold wrongdoers accountable and deter other would-be violators.

We are here to announce that the federal district court for the Middle District of Georgia has unsealed a 76-count indictment charging a number of former executives and employees of the Peanut Corporation of America with mail fraud, wire fraud, violations of the Food, Drug, and Cosmetic Act, obstruction of justice, and conspiracy to commit mail and wire fraud. As charged in the indictment, three of the defendants—Stewart Parnell, Michael Parnell, and Samuel Lightsey, engaged in multiple schemes to defraud the company’s customers and mislead those customers as to the presence of salmonella in PCA peanut products. In addition, Stewart Parnell, Samuel Lightsey, and former PCA employee Mary Wilkerson have been charged with obstruction of justice.

In addition to this indictment, the court also unsealed an Information containing criminal charges against former PCA executive Daniel Kilgore. Mr. Kilgore has pleaded guilty to that Information, which charged him with the same conspiracy to commit fraud, violations of the Food, Drug, and Cosmetic Act, and other crimes.

Many of you may recall the national outbreak of salmonella that took place in 2008 and 2009. The indictment we are announcing today arises out of a criminal investigation launched after PCA’s Blakely, Georgia peanut processing plant was identified as a likely source for that outbreak. As charged in the indictment, PCA produced peanuts at its Blakely plant under insanitary conditions, which included PCA’s failure to follow appropriate practices to ensure its plants were sanitary, its failure to prevent cross-contamination between raw and cooked product, and its failure to take adequate steps to keep rodents and insects out of the plant.

These products were sold to food producers around the country. PCA peanut products ended up in many foods eaten by Americans every day.

As alleged in the indictment, three of the defendants — Stewart Parnell, Michael Parnell, and Samuel Lightsey — engaged in a multi-year conspiracy to hide the fact that many of PCA’s products were tainted with salmonella. The indictment charges that these PCA officials affirmatively lied to their customers about the presence of salmonella in PCA’s products, failing to reveal to their customers when PCA’s testing by independent labs revealed salmonella in products being shipped from PCA’s Blakely plant on a regular basis. As alleged in the indictment, some PCA officials went so far as to fabricate the Certificates of Analysis that its customers relied on. As charged in the indictment, although the Certificates of Analysis which accompany shipments of peanut products were supposed to summarize laboratory results, some PCA officials prepared Certificates stating that PCA products were free of salmonella even when tests showed the presence of salmonella or when no tests had been done at all.

According to the indictment, some of these officials continued to violate the law through the beginning of the investigation of the 2009 outbreak. FDA inspectors visited PCA’s plant several times in January 2009 to try to get to the bottom of the outbreak. As noted in the indictment, FDA inspectors asked specific questions about the plant, its operations, and its history. However, as alleged in the indictment, some of the defendants gave untrue or misleading answers to these questions, again hiding the known presence of salmonella in PCA’s peanut products.

When food or drug manufacturers lie and cut corners, they put all of us at risk. The Department of Justice will not hesitate to pursue any person whose criminal conduct risks the safety of Americans who have done nothing more than eat a peanut butter and jelly sandwich. Like the FDA, we pay close attention to food safety matters, and we are committed to using every tool at our disposal to protect Americans from unsafe foods.

I want to thank our partners at the United States Attorney’s Office, the FBI, and the FDA for their superb work in this investigation. Our partnership is a shining example of good government, and led directly to the culmination of the investigation which is being announced today.

And now it is my pleasure to introduce the United States Attorney for the Middle District of Georgia, Michael Moore.

JUSTICE SEEKS TO CLOSE DETROIT-AREA TAX PREPARATION BUSINESSES

FROM: U.S. DEPARTMENT OF JUSTICE
Thursday, February 21, 2013
Justice Department Seeks to Shut Down Detroit-Area Tax Return Preparers
Group’s "Tax King" Business Allegedly Claimed Fraudulent Credits and Deductions on Tax Returns

The Justice Department announced today that it has asked a federal court in Detroit to permanently bar Calvin Carter and brothers Raheen Stroud and Laron Stroud, who do business as E-File Tax Pros LLC and Tax King, from preparing federal tax returns. The civil injunction suit alleges that Carter and the Stroud brothers falsify customers’ income on their tax returns, frequently by fabricating business income and expenses, in order to claim the maximum earned income tax credit (EITC) for them.

The EITC is a refundable credit available to certain low-income people. The maximum credit in 2010 was $5,666. Due to the method used to calculate the EITC, people with higher annual incomes may be entitled to a larger credit. Some tax preparers refer to the range of earned income generating a maximum EITC as the "sweet spot." According to the complaint, Carter and the Stroud brothers fabricated businesses and reported fake business income and expenses on their customers’ tax returns to achieve reported income in the EITC sweet spot. The complaint alleges that the defendants filed tax returns in 2009, 2010, and 2011 that had an extremely high refund-request rate of 97 percent.

The complaint also alleges that the defendants prepare returns for customers that falsely claim the first-time-homebuyer credit even though the customers had not bought new homes and were ineligible for the credit.

INDICTMENTS IN SALMONELLA-TAINTED PEANUT PRODUCTS

FROM: U.S. DEPARTMENT OF JUSTICE
Thursday, February 21, 2013
Former Officials and Broker of Peanut Corporation of America Indicted Related to Salmonella-Tainted Peanut Products
Allegations Include Mail and Wire Fraud, Introduction of Adulterated and Misbranded Food into Interstate Commerce with Intent to Defraud or Mislead, and Conspiracy

A 76-count indictment was unsealed yesterday charging four former officials of the Peanut Corporation of America (PCA) and a related company with numerous charges relating to salmonella-tainted peanuts and peanut products, the Justice Department announced today. Stewart Parnell, 58, of Lynchburg, Va.; Michael Parnell, 54, of Midlothian, Va.; and Samuel Lightsey, 48, of Blakely, Ga., have been charged with mail and wire fraud, the introduction of adulterated and misbranded food into interstate commerce with the intent to defraud or mislead, and conspiracy. Stewart Parnell, Lightsey and Mary Wilkerson, 39, of Edison, Ga., were also charged with obstruction of justice.

Also yesterday, an information filed against Daniel Kilgore, 44, of Blakely was unsealed. On the same day that charges against Kilgore were filed, he pleaded guilty to that information, which charged him with mail and wire fraud, the introduction of adulterated and misbranded food into interstate commerce with the intent to defraud or mislead, and conspiracy.

The investigation into the activity at PCA began in 2009, after the Food and Drug Administration and the U.S. Centers for Disease Control and Prevention traced a national outbreak of salmonella to a PCA plant in Blakely as the likely source. As alleged in the indictment, the Blakely plant was a peanut roasting facility where PCA roasted raw peanuts and produced granulated peanuts, peanut butter, and peanut paste; PCA sold these peanut products to its customers around the country.

The charging documents charge that Stewart Parnell, Michael Parnell, Lightsey and Kilgore participated in a scheme to manufacture and ship salmonella-contaminated peanuts and peanut products, and in so doing misled PCA customers. As alleged in the indictment, those customers ranged in size from small, family-owned businesses to global, multibillion-dollar food companies.

"When those responsible for producing or supplying our food lie and cut corners, as alleged in the indictment, they put all of us at risk," said Stuart F. Delery, who heads the Justice Department’s Civil Division. "The Department of Justice will not hesitate to pursue any person whose criminal conduct risks the safety of Americans who have done nothing more than eat a peanut butter and jelly sandwich."

Although PCA is now no longer in business, the allegations against each of the defendants arise from his or her conduct while at PCA and a related company. The following allegations are set forth in the indictment: Stewart Parnell was an owner and president of PCA; Michael Parnell, who worked at P.P. Sales, was a food broker who worked on behalf of PCA; Lightsey was the operations manager at the Blakely plant from on or about July 2008 through February 2009; and Wilkerson held various positions at the Blakely plant – receptionist, office manager and quality assurance manager – from on or about April 2002 through February 2009. As charged in the information, Kilgore served as operations manager of the PCA plant in Blakely from on or about June 2002 through May 2008.

"We all place a great deal of trust in the companies and individuals who prepare and package our food, often times taking it for granted that the public’s health and safety interests will outweigh individual and corporate greed," said Michael Moore, U.S. Attorney for the Middle District of Georgia. "Unfortunately and as alleged in the indictment, these defendants cared less about the quality of the food they were providing to the American people and more about the quantity of money they were gathering while disregarding food safety. This investigation was complex and extensive, and I credit the cooperation of our federal agencies with not only making sure that the cause of this outbreak was uncovered and the people responsible called to account, but also with working hard every day to make sure that parents across the country can feel confident that the food they are feeding their children is safe."

The charging documents allege that Stewart Parnell, Michael Parnell, Lightsey and Kilgore participated in several schemes by which they defrauded PCA customers about the quality and purity of their peanut products and specifically misled PCA customers about the existence of foodborne pathogens, most notably salmonella, in the peanut products PCA sold to them. As the charging documents allege, the members of the conspiracy did so in several ways – for example, even when laboratory testing revealed the presence of salmonella in peanut products from the Blakely plant, Stewart Parnell, Michael Parnell, Lightsey and Kilgore failed to notify customers of the presence of salmonella in the products shipped to them.

In addition, the charging documents allege that Stewart Parnell, Michael Parnell, Lightsey and Kilgore participated in a scheme to fabricate certificates of analysis (COAs) accompanying various shipments of peanut products. COAs are documents that summarize laboratory results, including results concerning the presence or absence of pathogens. As alleged in the charging documents, on several occasions these four defendants participated in a scheme to fabricate COAs stating that shipments of peanut products were free of pathogens when, in fact, there had been no tests on the products at all or when the laboratory results showed that a sample tested positive for salmonella.

After the salmonella outbreak that gave rise to this investigation, FDA inspectors visited the plant several times in January 2009. According to the indictment, the inspectors asked specific questions about the plant, its operations, and its history, and, in several instances, Stewart Parnell, Lightsey and Wilkerson gave untrue or misleading answers to these questions.

"The charges announced today show that if an individual violates food safety rules or conceals relevant information, we will seek to hold them accountable," said FDA Commissioner Margaret A. Hamburg, M.D. "The health of our families and the safety of our food system is too important to be thwarted by the criminal acts of any individual or company."

Stewart Parnell, Michael Parnell, and Samuel Lightsey are each charged with two counts of conspiracy; multiple counts of introducing adulterated food into interstate commerce with the intent to defraud; multiple counts of introducing misbranded food into interstate commerce with the intent to defraud; multiple counts of interstate shipment fraud; and multiple counts of wire fraud. Stewart Parnell, Lightsey and Wilkerson are also charged with multiple counts of obstruction of justice.

Kilgore pleaded guilty to one count of conspiracy to commit fraud, one count of conspiracy to introduce adulterated and misbranded food into interstate commerce, eight counts of introducing adulterated food into interstate commerce with the intent to defraud, six counts of introducing misbranded food into interstate commerce with the intent to defraud, eight counts of interstate shipment fraud, and five counts of wire fraud.

Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated, "The FBI was brought in to this matter to provide additional resources and expertise to a complex and very serious investigation. We fully understand the victim impact as a result of this salmonella outbreak and will be asking to hear from other possible victims in this matter."
The case is being prosecuted by Trial Attorneys Patrick Hearn and Mary M. Englehart of the Consumer Protection Branch of the Civil Division of the Department of Justice and Assistant U.S. Attorney Alan Dasher of the Middle District of Georgia. Marietta Geckos, formerly a Trial Attorney with the Consumer Protection Branch, also worked on the prosecution. The case was investigated by the Food and Drug Administration’s Office of Criminal Investigations and the FBI.

An indictment is merely an allegation, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.

TEXAS BANK SETTLES ALLEGATIONS OF LENDING DISCRIMINATION

FROM: U.S. DEPARTMENT OF JUSTICE
Tuesday, February 19, 2013
Justice Department Reaches Settlement with Texas Champion Bank to Resolve Allegations of Lending Discrimination

Settlement Provides $700,000 in Compensation to Hispanic Borrowers of Unsecured Consumer Loans in Texas

The Justice Department announced today that Texas Champion Bank of Alice, Texas, will establish uniform pricing policies, conduct employee training and pay $700,000 as part of a settlement to resolve allegations that it engaged in a pattern or practice of discrimination on the basis of national origin.

The settlement, which is subject to court approval, was filed in conjunction with the Justice Department’s complaint in the U.S. District Court for the Southern District of Texas. The complaint alleges that Texas Champion charged higher prices on unsecured consumer loans made to His panic borrowers through its branch offices in violation of the Equal Credit Opportunity Act (ECOA).

"The complaint filed today demonstrates that the Civil Rights Division is committed to fair lending enforcement across the entire spectrum of credit markets," said Thomas E. Perez, Assistant Attorney General for the Justice Department’s Civil Rights Division. "We commend Texas Champion for working cooperatively with the Justice Department in reaching an appropriate resolution of this case."

The lawsuit originated from a 2010 referral by the Federal Deposit Insurance Corporation (FDIC) to the Justice Department’s Civil Rights Division. Texas Champion is a member of the FDIC.

Under the settlement, Texas Champion will pay $700,000 to approximately 2,000 Hispanic victims of discrimination, monitor its loans for potential disparities based on national origin, and provide equal credit opportunity training to its employees. Texas Champion will also revise its pricing policies to ensure that the price charged for its loans is set in a non-discriminatory manner consistent with the requirements of ECOA. The agreement also prohibits the bank from discriminating on the basis of national origin in any aspect of a credit transaction.

"The Southern District of Texas is committed to ensuring banks and other lending institutions do not discriminate against borrowers on the basis of race or national origin," said U.S. Attorney for the Southern District of Texas Kenneth Magidson. "The consent order filed today should serve as a reminder that discrimination in lending will not be tolerated."

The Justice Department’s enforcement of fair lending laws is conducted by the Fair Lending Unit of the Housing and Civil Enforcement Section in the Civil Right Division. Since the Fair Lending Unit was established in February 2010, it has filed or resolved 24 lending matters under the Fair Housing Act, ECOA, and the Servicemembers Civil Relief Act. The settlements in these matters provide for a minimum of $660 million in monetary relief for impacted communities and more than 300,000 individual borrowers.
The Civil Rights Division, the U.S. Attorney’s Office for the Southern District of Texas, and the FDIC are members of the Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

U.S. FILES LAWSUIT AGAINST ATP OIL & GAS CORPORATION FOR ALLEGED ILLEGAL OIL AND CHEMICAL DISPERSANT DISCHARGES

FROM: U.S. DEPARTMENT OF JUSTICE
Monday, February 11, 2013
US Files Lawsuit in Louisiana Against Oil and Gas Company Alleging Unlawful Discharge of Oil and Chemical Dispersants in the Gulf of Mexico

Today the United States filed a civil action against ATP Oil & Gas Corporation and ATP Infrastructure Partners, LP (ATP-IP) for civil penalties and injunctive relief under the Clean Water Act and the Outer Continental Shelf Lands Act. The complaint was filed on behalf of the U.S. Department of the Interior’s Bureau of Safety and Environmental Enforcement (BSEE) and the U.S. Environmental Protection Agency (EPA). The complaint addresses the defendants’ alleged unlawful discharges of oil and unpermitted chemical dispersants from the defendants’ floating oil and gas production platform, the ATP Innovator, into the Gulf of Mexico.

The ATP Innovator is a production facility operating at Lease Block 711 of Mississippi Canyon in the Gulf of Mexico, approximately 45 nautical miles offshore of southeastern Louisiana.

The violations were discovered during a BSEE inspection of the facility in March 2012. Following further investigation by BSEE, the violations were referred to the Department of Justice by BSEE and EPA. The case, United States v. ATP Oil & Gas Corporation et al., was filed in the District Court for the Eastern District of Louisiana.

As alleged in the complaint, ATP failed to properly operate and maintain its wastewater treatment system on the ATP Innovator. As a result, excess oil was discharged into the ocean, and an unauthorized chemical dispersant was added to the oily wastewater discharge to mask the presence of oil on the ocean’s surface. The dispersant was added to the outfall pipe by way of a concealed metal tube that connected a tank of dispersant to the outfall pipe. The connection of the metal tubing to the outfall pipe was located downstream of the sample collection point, making the addition of unauthorized dispersant undetectable in samples that are required to be collected to show compliance with ATP’s Clean Water Act discharge permit.

According to the complaint, the dispersant had been used from at least October 2010 to March 2012. In addition to civil penalties under the Clean Water Act, the complaint also seeks injunctive relief for violations of the Clean Water Act and the Outer Continental Shelf Lands Act.

MORTGAGE PROCESSING SERVICES COMPANY TO PAY $35 MILLION TO SETTLE FRAUD CHARGES

FROM: U.S. DEPARTMENT OF JUSTICE
Friday, February 15, 2013
Florida-Based Lender Processing Services Inc. to Pay $35 Million in Agreement to Resolve Criminal Fraud Violations Following Guilty Plea from Subsidiary CEO

Agreement Also Follows Closure of Subsidiary DocX Operations

Lender Processing Services Inc. (LPS), a publicly traded mortgage servicing company based in Jacksonville, Fla., has agreed to pay $35 million in criminal penalties and forfeiture to address its participation in a six-year scheme to prepare and file more than 1 million fraudulently signed and notarized mortgage-related documents with property recorders’ offices throughout the United States. The settlement, which follows a felony guilty plea from the chief executive officer of wholly owned LPS subsidiary DocX LLC, was announced today by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney for the Middle District of Florida Robert E. O’Neill.

The non-prosecution agreement, which LPS entered into today with the U.S. Department of Justice and the U.S. Attorney’s Office for the Middle District of Florida, requires the company to make the payment and meet a series of other conditions.

Lorraine Brown, the former CEO of DocX LLC, pleaded guilty on Nov. 20, 2012, in federal court in Jacksonville to conspiracy to commit mail and wire fraud. During her guilty plea, Brown admitted to her leadership role in the scheme.

LPS has taken a number of remedial actions to address the misconduct at DocX. Among other things, LPS has wound down all of DocX’s operations, re-executed and re-filed mortgage assignments as appropriate and terminated Brown and others. LPS has also demonstrated changes in its compliance, training and overall approach to ensuring its adherence to the law, and has retained an independent consultant to review and report on LPS’s document execution practices; assess related operational, compliance, legal and reputational risks; and establish a plan for reimbursing any financial injuries to mortgage servicers or borrowers.

According to the statement of facts accompanying the agreement, before its wind-down, DocX was in the business of assisting residential mortgage servicers with creating and executing mortgage-related documents to be filed with property recorders’ offices throughout the United States. Employees of DocX, at the direction of Brown and others, falsified signatures on the documents. Through this scheme and unbeknownst to the clients, Brown and subordinates at DocX directed authorized signers to allow other, unauthorized personnel to sign and to have documents notarized as if they were executed by authorized signers. These signing practices were used at DocX from at least March 2003 until late 2009, and were implemented to increase profits.

Also to increase profits, Brown hired temporary workers to sign as authorized signers. These temporary employees would sign mortgage-related documents at a much lower cost and without the quality controls represented to clients. These documents were then falsely notarized by employees at DocX, allowing the fraud scheme to remain undetected.

After these documents were falsely signed and fraudulently notarized, Brown authorized DocX employees to file and record them with local county property records offices across the country. Many of these documents – particularly mortgage assignments, lost note affidavits and lost assignment affidavits – were later relied upon in court proceedings, including property foreclosures and federal bankruptcy actions.

In entering into the non-prosecution agreement with LPS, the Justice Department took several factors into consideration. Soon after discovering the misconduct at DocX, LPS conducted a thorough internal investigation, reported all of its findings to the government, cooperated with the government’s investigation and effectively remediated any problems it discovered. The government’s investigation also revealed that Brown and others at DocX took various steps to actively conceal the misconduct from detection, including from LPS senior management and auditors.

Brown, 51, of Alpharetta, Ga., faces a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. She is scheduled to be sentenced on April 23, 2013, before U.S. District Judge Henry Lee Adams Jr. in Jacksonville.

This case is being handled by Trial Attorney Ryan Rohlfsen and Assistant Chief Glenn S. Leon of the Justice Department’s Criminal Division Fraud Section and Assistant U.S. Attorney Mark B. Devereaux of the U.S. Attorney’s Office for the Middle District of Florida. The case is being investigated by the FBI, with assistance from the state of Florida’s Department of Financial Services.

Today’s disposition is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF). The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants.

TWO FORMER EXECUTIVES AT STANFORD FINANCIAL SENTENCED TO PRISON FOR FRAUD

FROM: U.S. DEPARTMENT OF JUSTICE
Thursday, February 14, 2013
Former Executives of Stanford Financial Group Entities Sentenced to 20 Years in Prison for Roles in Fraud Scheme

Gilbert T. Lopez Jr., the former chief accounting officer of Stanford Financial Group Company, and Mark J. Kuhrt, the former global controller of Stanford Financial Group Global Management, were each sentenced today to 20 years in prison for their roles in helping Robert Allen Stanford perpetrate a fraud scheme involving Stanford International Bank (SIB). Both were convicted by a Houston federal jury on Nov. 19, 2012.

The sentences were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Kenneth Magidson of the Southern District of Texas; FBI Assistant Director Kevin Perkins of the Criminal Investigative Division; Assistant Secretary of Labor for the Employee Benefits Security Administration Phyllis C. Borzi; Chief Postal Inspector Guy J. Cottrell; and Special Agent in Charge Lucy Cruz of Internal Revenue Service-Criminal Investigation.

The trial against Lopez and Kuhrt spanned five weeks. After approximately three days of deliberations, the jury found both Lopez, 70, and Kuhrt, 40, both of Houston, guilty of 10 of 11 counts in the indictment. Each defendant was convicted of one count of conspiracy to commit wire fraud and nine counts of wire fraud. Each was found not guilty on one wire fraud count. Both defendants were taken into custody immediately following the jury’s verdict.

In addition to the prison terms, U.S. District Judge David Hittner, who presided over the trial, sentenced Lopez and Kuhrt to serve three years of supervised release and ordered Lopez to pay a $25,000 fine. At today’s hearing, Judge Hittner also found that both defendants obstructed justice by committing perjury at trial.

Stanford, who was previously convicted in a separate trial, illegally used billions of dollars of SIB’s assets to fund his personal business ventures, to live a lavish lifestyle and for other improper purposes. He was later sentenced to 110 years in prison. James M. Davis, Stanford’s chief financial officer – who pleaded guilty and cooperated with the government soon after SIB was shut down in February 2009 and testified at both Stanford’s trial and the trial of Lopez and Kuhrt – was sentenced to 60 months in prison for his role in the scheme.

The evidence presented at Lopez and Kuhrt’s trial established that they were aware of and tracked Stanford’s misuse of SIB’s assets, kept the misuse hidden from the public and from almost all of Stanford’s other employees and worked behind the scenes to prevent the misuse from being discovered. They also helped Stanford falsely represent to SIB customers during the economic crash in late 2008 that Stanford had infused hundreds of millions of dollars into SIB when he had not. As part of that effort, Lopez and Kuhrt helped design a fraudulent real estate transaction that involved falsely inflating parcels of land purchased at $63.5 million to a purported value of $3.2 billion.

The investigation was conducted by the FBI, U.S. Postal Inspection Service, IRS-CI and the U.S. Department of Labor, Employee Benefits Security Administration. The case was prosecuted by Deputy Chief Jeffrey Goldberg and Trial Attorney Andrew Warren of the Criminal Division’s Fraud Section, and by Assistant U.S. Attorney Jason Varnado of the Southern District of Texas.

TRANSOCEAN PLEADS GUILTY TO CRIMINAL CONDUCT LEADING TO DEEPWATER HORIZON DISASSTER

FROM: U.S. DEPARTMENT OF JUSTICE
Transocean Pleads Guilty, Is Sentenced to Pay $400 Million in Criminal Penalties for Criminal Conduct Leading to Deepwater Horizon Disaster

Second Corporate Guilty Plea Obtained by Deepwater Horizon Task Force, Second-largest Criminal Clean Water Act Fines and Penalties in U.S. History

Transocean Deepwater Inc. pleaded guilty today to a violation of the Clean Water Act (CWA) for its illegal conduct leading to the 2010 Deepwater Horizon disaster, and was sentenced to pay $400 million in criminal fines and penalties, Attorney General Holder announced today.

In total, the amount of fines and other criminal penalties imposed on Transocean are the second-largest environmental crime recovery in U.S. history – following the historic $4 billion criminal sentence imposed on BP Exploration and Production Inc. in connection with the same disaster.

"Transocean’s guilty plea and sentencing are the latest steps in the department’s ongoing efforts to seek justice on behalf of the victims of the Deepwater Horizon disaster," said Attorney General Holder. "Most of the $400 million criminal recovery – one of the largest for an environmental crime in U.S. history – will go toward protecting, restoring and rebuilding the Gulf Coast region."

"The Deepwater Horizon explosion was a senseless tragedy that could have been avoided," said Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division. "Eleven men died, and the Gulf’s waters, shorelines, communities and economies suffered enormous damage. With today’s guilty plea, BP and Transocean have now both been held criminally accountable for their roles in this disaster."

Transocean’s guilty plea was accepted, and the sentence was imposed, by U.S. District Judge Jane Triche Milazzo of the Eastern District of Louisiana. During the guilty plea and sentencing proceeding, Judge Milazzo found, among other things, that the sentence appropriately reflects Transocean’s role in the offense conduct, and that the criminal payments directed to the National Academy of Sciences and National Fish and Wildlife Foundation are appropriately designed to help remedy the harm to the Gulf of Mexico caused by Transocean’s actions. The judge also noted that the fines and five year probationary period provide just punishment and adequate deterrence.

Transocean pleaded guilty to an information, previously filed in federal court in New Orleans, charging the company with violating the CWA. During the guilty plea proceeding today, Transocean admitted that members of its crew onboard the Deepwater Horizon, acting at the direction of BP’s well site leaders, known as "company men," were negligent in failing to investigate fully clear indications that the Macondo well was not secure and that oil and gas were flowing into the well.

The criminal resolution is structured to directly benefit the Gulf region. Under the order entered by the court pursuant to the plea agreement, $150 million of the $400 million criminal recovery is dedicated to acquiring, restoring, preserving and conserving – in consultation with appropriate state and other resource managers – the marine and coastal environments, ecosystems and bird and wildlife habitat in the Gulf of Mexico and bordering states harmed by the Deepwater Horizon oil spill. This portion of the criminal recovery will also be directed to significant barrier island restoration and/or river diversion off the coast of Louisiana to further benefit and improve coastal wetlands affected by the spill. An additional $150 million will be used to fund improved oil spill prevention and response efforts in the Gulf through research, development, education and training.

Transocean was also sentenced, according to the plea agreement, to five years of probation – the maximum term of probation permitted by law.

A separate proposed civil consent decree, which resolves the United States’ civil CWA penalty claims, imposes a record $1 billion civil Clean Water Act penalty, and requires significant measures to improve performance and prevent recurrence, is pending before U.S. District Judge Carl J. Barbier of the Eastern District of Louisiana.

The charges and allegations pending against individuals in related cases are merely accusations, and those individuals are considered innocent unless and until proven guilty.

The guilty plea and sentencing announced today are part of the ongoing criminal investigation by the Deepwater Horizon Task Force into matters related to the April 2010 Gulf oil spill. The Deepwater Horizon Task Force, based in New Orleans, is supervised by Assistant Attorney General Breuer and led by Deputy Assistant Attorney General John D. Buretta, who serves as the director of the task force. The task force includes prosecutors from the Criminal Division and the Environment and Natural Resources Division of the Department of Justice; the U.S. Attorney’s Office for the Eastern District of Louisiana, as well as other U.S. Attorneys’ Offices; and investigating agents from: the FBI; Environmental Protection Agency, Criminal Investigative Division; Environmental Protection Agency, Office of Inspector General; Department of Interior, Office of Inspector General; National Oceanic and Atmospheric Administration, Office of Law Enforcement; U.S. Coast Guard; U.S. Fish and Wildlife Service; and the Louisiana Department of Environmental Quality.

This case was prosecuted by Deepwater Horizon Task Force Director John D. Buretta, Deputy Directors Derek A. Cohen and Avi Gesser, and task force prosecutors Richard R. Pickens II, Scott M. Cullen, Colin Black and Rohan Virginkar.

JUSTICE SETTLES WITH EATING DISORDER CLINIC REGARDING HIV DISCRIMINATION

FROM: U.S. DEPARTMENT OF JUSTICE
Wednesday, February 6, 2013
Justice Department Settles with Missouri Eating Disorder Clinic Over HIV Discrimination

The Justice Department announced today that, as part of its Barrier-Free Health Care Initiative, it has reached a settlement with Castlewood Treatment Center LLC, of St. Louis, Mo., under the Americans with Disabilities Act (ADA). The settlement resolves allegations that Castlewood Treatment Center violated the ADA by refusing to treat a woman for a serious eating disorder because she has HIV. This is the second settlement addressing HIV discrimination by a medical provider reached by the Justice Department in two weeks.

The Justice Department found that Castlewood refused to treat Susan Gibson because of her HIV, despite Castlewood’s determination that she was qualified to receive counseling treatment for her eating disorder, and despite advice from its own medical staff that they were able to treat someone with HIV at Castlewood. The department also determined that for months Castlewood staff told Gibson that she was on a waiting list for the program, even though they had no intention to admit her into the program. In the meantime, Gibson’s condition worsened and her health declined. Castlewood’s actions delayed Gibson from receiving appropriate medical treatment for up to seven months. Gibson’s complaint was brought to the Justice Department’s attention by the American Civil Liberties Union, LGBT & AIDS Project.

"Excluding a person from necessary medical treatment solely because of HIV is unconscionable," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "The Civil Rights Division takes HIV discrimination in any form seriously, and will not allow for the marginalization of those living with HIV."

Under the settlement, the Castlewood Treatment Center must pay $115,000 to Gibson and $25,000 in civil penalties. In addition, Castlewood must train its staff on the ADA and develop and implement an anti-discrimination policy. The department will monitor Castlewood’s compliance for four years.

Last week the department announced a similar agreement with the Fayetteville Pain Center to address HIV discrimination. Both settlements are part of the Department of Justice’s Barrier-Free Health Care Initiative, a partnership of the Civil Rights Division and U.S. Attorney’s offices across the nation, to target enforcement efforts on a critical area for individuals with disabilities. The initiative, launched on the 22nd anniversary of the ADA in July 2012, includes the participation of 40 U.S. Attorney’s offices. The division expects the initiative to address access to health care for people with HIV and those with hearing disabilities, as well as physical access to medical facilities. In 2012, the division and U.S. Attorneys offices reached two settlement agreements regarding access to medical care for people with HIV and four settlements regarding access to medical care for people with hearing disabilities.

INFRASTRUCTURE CONSTRUCTION COMPANY SETTLES FALSE CLAIMS ALLEGATIONS

FROM: U.S. DEPARTMENT OF JUSTICE
Friday, February 8, 2013
California-Based Granite Construction Company to Pay U.S. $367,500 to Resolve False Claims Allegations

Granite Construction Company, a California-based construction company specializing in roads, tunnels, bridges, airports and other infrastructure-related projects, reached a settlement with the United States following an investigation of alleged false claims in connection with federal construction projects across the country, the Justice Department announced today. Granite has agreed to pay the United States $367,500.

The settlement resolves claims that Granite overcharged the government on certain federal construction projects funded by the Department of Transportation (DOT) and the Army Corps of Engineers between 2006 and 2008. Specifically, in certain instances, Granite sought price increases in the form of change orders and requests for equitable adjustment which were inflated because the general liability and workman’s compensation insurance rates used to support the adjustments included added amounts or "cushions" that were not actually incurred by the company and therefore should not have been charged to the federal government. Granite disclosed the potential overcharges to the Justice Department.

"Federal contractors will be held accountable for their billing practices," said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Department of Justice’s Civil Division. "This settlement is an example of the department’s commitment to ensuring that contractors deal squarely and honestly with the government at all times."

"To prevent and detect potential violations of law, we encourage federal contractors to apply consistent oversight to their operations throughout all phases of contracting," said DOT Office of Inspector General Special Agent in Charge Hank Smedley. "This settlement is an example of how we work with our law enforcement colleagues to protect taxpayer dollars."

The investigation and settlement was the result of a coordinated effort by the Civil Division of the Department of Justice and the Department of Transportation Office of Inspector General. The claims settled by this agreement are allegations only, and there has been no determination of liability.

MICHIGAN COMPANY ORDERED TO KEEP WASTEWATER AND FOOD PRODUCT SEPARATE

FROM: U.S. DEPARTMENT OF JUSTICE
Monday, January 28, 2013
Permanent Injunction Entered Against Michigan-Based Manufacturer of Soy Products

U.S. District Judge David M. Lawson, of the Eastern District of Michigan, entered a consent decree of permanent injunction against Ann Arbor, Michigan-based Green Hope LLC, dba Rosewood Products, and its president, Phil G. Ye, the Justice Department announced today.

The company manufactures and sells ready-to-eat organic tofu and soy milk products to businesses in Michigan and Minnesota, including organic supermarket chains. As alleged in the complaint filed against the company and Ye, numerous Food and Drug Administration (FDA) inspections since 2009 found persistent violations at the company’s manufacturing facility involving insanitary conditions. FDA’s inspections found that Green Hope did not store food properly, did not address employee cleanliness issues, permitted waste water to come into contact with tofu during processing and failed to clean all food-contact surfaces and equipment. These violations raised the possibility of contamination of the company’s food products.

The consent decree orders Green Hope and Ye to take a wide range of actions to correct the violations and ensure that they do not happen again. Among other actions, Green Hope must develop and implement sanitation control programs; provide FDA the opportunity to inspect the facilities to assure Green Hope’s compliance with the consent decree, the Food, Drug and Cosmetic Act, and applicable regulations; and receive written authorization from FDA to resume operations. Green Hope must also make structural repairs to its facility necessary to protect against contamination of raw ingredients, in-process and finished articles of food, containers and packaging materials.

"This company has a long history of not complying with federal statutes and regulations intended to protect the public health," said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Justice Department’s Civil Division. "Consumers expect, and deserve, that their food be safe to eat, and the Department of Justice will continue to take enforcement action against food manufacturers whose conduct can endanger public safety."

This case was litigated by Dan Baeza of the Consumer Protection Branch in the Department of Justice’s Civil Division in conjunction with Assistant U.S. Attorney Peter A. Caplan of the U.S. Attorney’s Office for the Eastern District of Michigan and Christopher Fanelli of the FDA’s Office of Chief Counsel. The case was investigated by the FDA’s Detroit District Office.

RECORD $4 BILLION PAID FOR CRIMES RELATED TO DEEPWATER HORIZON DISASTER

FROM: U.S. DEPARTMENT OF JUSTICE
Tuesday, January 29, 2013

BP Exploration and Production Inc. Pleads Guilty, Is Sentenced to Pay Record $4 Billon for Crimes Surrounding Deepwater Horizon Incident

Court Accepts Guilty Plea to Felony Manslaughter, Environmental Crimes and Obstruction of Congress Prior to Imposing Historic Sentence

BP Exploration and Production Inc. pleaded guilty today to 14 criminal counts for its illegal conduct leading to and after the 2010 Deepwater Horizon disaster, and was sentenced to pay $4 billion in criminal fines and penalties, the largest criminal resolution in U.S. history, Attorney General Holder announced today.

"Today’s guilty plea and sentencing represent a significant step forward in the Justice Department’s ongoing efforts to seek justice on behalf of those affected by one of the worst environmental disasters in American history," said Attorney General Holder. "I’m pleased to note that more than half of this landmark resolution – which totals $4 billion in penalties and fines, and represents the single largest criminal resolution ever – will help to provide direct support to Gulf Coast residents as communities throughout the region continue to recover and rebuild."

"The Deepwater Horizon explosion was a national tragedy that resulted in the senseless deaths of 11 people and immense environmental damage," said Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division. "Through the tenacious work of the Task Force, BP has received just punishment for its crimes leading up to and following the explosion. The Justice Department will keep a watchful eye on BP’s compliance with the plea agreement’s terms, including the requirements of full cooperation with the department’s ongoing criminal investigation, implementation of enhanced safety protocols and adherence to the recommendations of two newly installed monitors. Should BP fail to comply, we will act swiftly and firmly."

BP’s guilty plea was accepted, and the sentence was imposed, by U.S. District Judge Sarah S. Vance of the Eastern District of Louisiana. During the guilty plea and sentencing proceeding, Judge Vance found, among other things, that the consequential fines imposed under the plea agreement far exceed any imposed in U.S. history, and are structured so that BP will feel the full brunt of the penalties. She also noted that the agreement provides just punishment and significant deterrence, requiring detailed drilling safeguards, monitors and other stringent, special conditions of probation so that BP’s future conduct will be closely watched.

BP pleaded guilty to each count charged in an information filed in U.S. District Court in the Eastern District of Louisiana, including 11 counts of felony manslaughter, one count of felony obstruction of Congress and violations of the Clean Water and Migratory Bird Treaty Acts. In its guilty plea today, BP admitted that, on April 20, 2010, the two highest-ranking BP supervisors onboard the Deepwater Horizon, known as BP’s "Well Site Leaders" or "company men," negligently caused the deaths of 11 men and the resulting oil spill. The company also admitted that on that evening, the two well site leaders observed clear indications that the Macondo well was not secure and that oil and gas were flowing into the well, but chose not to take obvious and appropriate steps to prevent the blowout. Additionally, BP admitted that as a result of the Well Site Leaders’ conduct, control of the Macondo well was lost, resulting in catastrophe.

BP also admitted during its guilty plea that the company, through a senior executive, obstructed an inquiry by the U.S. Congress into the amount of oil being discharged into the Gulf while the spill was ongoing. BP also admitted that the senior executive withheld documents, provided false and misleading information in response to the U.S. House of Representatives’ request for flow-rate information, manipulated internal estimates to understate the amount of oil flowing from the well and withheld data that contradicted BP’s public estimate of 5,000 barrels of oil per day. At the same time that the senior executive was preparing his manipulated estimates, BP admitted, the company’s internal engineering response teams were using sophisticated methods that generated significantly higher estimates. The Flow Rate Technical Group, consisting of government and independent scientists, later concluded that more than 60,000 barrels per day were leaking into the Gulf during the relevant time, contrary to BP’s representations to Congress.

According to the sentence imposed by Judge Vance pursuant to the plea agreement, more than $2 billion dollars will directly benefit the Gulf region. By order of the court, approximately $2.4 billion of the $4.0 billion criminal recovery is dedicated to acquiring, restoring, preserving and conserving – in consultation with appropriate state and other resource managers – the marine and coastal environments, ecosystems and bird and wildlife habitat in the Gulf of Mexico and bordering states harmed by the Deepwater Horizon oil spill. This portion of the criminal recovery is also to be directed to significant barrier island restoration and/or river diversion off the coast of Louisiana to further benefit and improve coastal wetlands affected by the oil spill. An additional $350 million will be used to fund improved oil spill prevention and response efforts in the Gulf through research, development, education and training.

BP was also sentenced to five years of probation – the maximum term of probation permitted under law. The company is also required, according to the order entered by the court pursuant to the plea agreement, to retain a process safety and risk management monitor and an independent auditor, who will oversee BP’s process safety, risk management and drilling equipment maintenance with respect to deepwater drilling in the Gulf of Mexico. BP is also required to retain an ethics monitor to improve its code of conduct to ensure BP’s future candor with the U.S. government.

The charges and allegations pending against individuals in related cases are merely accusations, and those individuals are considered innocent unless and until proven guilty.

The guilty plea and sentence announced today are part of the ongoing criminal investigation by the Deepwater Horizon Task Force into matters related to the April 2010 Gulf oil spill. The Deepwater Horizon Task Force, based in New Orleans, is supervised by Assistant Attorney General Breuer and led by Deputy Assistant Attorney General John D. Buretta, who serves as the director of the task force. The task force includes prosecutors from the Criminal Division and Environment and Natural Resources Division of the Department of Justice; the U.S. Attorney’s Office for the Eastern District of Louisiana, as well as other U.S. Attorneys’ Offices; and investigating agents from: the FBI; Environmental Protection Agency, Criminal Investigative Division; Environmental Protection Agency, Office of Inspector General; Department of Interior, Office of Inspector General; National Oceanic and Atmospheric Administration Office of Law Enforcement; U.S. Coast Guard; U.S. Fish and Wildlife Service; and the Louisiana Department of Environmental Quality.

This case was prosecuted by Deepwater Horizon Task Force Director John D. Buretta, Deputy Directors Derek A. Cohen and Avi Gesser, and task force prosecutors Richard R. Pickens II, Scott M. Cullen, Colin Black, and Rohan Virginkar.

COURT BARS COMPANY FROM EVADING EMPLOYMENT TAXES THROUGH TOOL RENTAL SCHEMES

FROM: U.S. DEPARTMENT OF JUSTICE
Friday, January 18, 2013
Federal Court Permanently Bars Virginia Company’s Promotion of Tool Reimbursement and Tool Rental Schemes

Government Alleges Promoters Re-Characterized Employee Wages To Evade Employment Taxes, Costing U.S. Treasury More Than $17 Million

The Justice Department announced today that a federal court has permanently barred Cash Management Systems, a Virginia corporation, from promoting two tax schemes that allegedly involve disguising wages as tool-reimbursement or tool-rental payments. Also subject to the civil injunction order were Cash Mangement’s marketing arm, Xell Enterprises, incorporated in Kansas; its principals, Bruce Lemay and Richard Herson Mills; and Allen Davison, of Overland Park, Kan. According to the government complaint, Davison provided legal opinion letters regarding the schemes and served on Cash Management’s board of directors.

Judge Eric F. Melgren of the U.S. District Court for the District of Kansas entered the permanent injunction, which the defendants consented to without admitting to the allegations against them. Davison was enjoined from promoting other tax schemes in 2010.

The complaint alleges that defendants promoted and implemented two fraudulent tax schemes to employers and employees in the automotive, construction and trucking industries across the United States. In the first, employers allegedly re-characterize a portion of employees’ wages as purported reimbursements for tools in order to evade federal income and employment taxes. The second plan allegedly involves re-characterizing a portion of wages as purported tool rental payments. The suit alleges that both plans are specifically designed and promoted as ways to reduce reported income and employment taxes.

The government asserts in its complaint that from 2004 through 2010 the schemes cost the U.S. Treasury an estimated $17 million.

MANUFACTURER FINED FOR ALLEGEDLY SELLING DEVICES THAT EMITTED EXCESS PARTICULATE MATTER

FROM: U.S. DEPARTMENT OF JUSTICE
Thursday, January 17, 2013
Automotive Electronics Manufacturer Fined $500,000 for Selling Illegal Devices Resulting in Tons of Excess Particulate Matter Emissions

WASHINGTON –In a settlement with the United States on behalf of the U.S. Environmental Protection Agency, automotive electronics manufacturer Edge Products LLC (Edge) has agreed to pay a $500,000 civil penalty for manufacturing and selling electronic devices that allowed owners of model year 2007 and later diesel pickup trucks to remove emission controls from their vehicles. Diesel trucks that are not equipped with emission controls known as "diesel particulate filters" emit excess particulate matter (PM). When running, trucks without these types of controls leave behind a trail of dark, black smoke. PM is associated with a number of health problems, including respiratory and cardiovascular disease, chronic bronchitis, decreased lung function, and an increased risk of lung cancer.

The company, located in Ogden, Utah, sold more than 9,000 of these electronic devices nationwide, resulting in an estimated 158 tons of excess PM emissions released into the atmosphere. This is equivalent to the emissions from 422 new long-haul semi trucks operating for a period of 29 years.

"The Department of Justice will continue to vigilantly protect America’s health and environment through the enforcement of the Clean Air Act standards governing emissions from vehicles and engines," said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "This settlement holds Edge Products accountable for selling devices that allow consumers to disable the emission controls on their vehicles by requiring the company to pay a penalty, buy back the devices, and perform a project to offset the air pollution resulting from the Clean Air Act violations."

"Our goal is to have these illegal devices removed and proper emission controls installed," said Jared Blumenfeld, EPA’s Regional Administrator for the Pacific Southwest. "Allowing black smoke to billow conspicuously from the tailpipes of diesel pickup trucks is a practice that directly harms public health."

Diesel particulate filters remove approximately 90% of the particulate matter emissions from a truck’s exhaust. If the filter is removed, the truck will generally not operate properly as the filter is monitored by the truck’s computer. However, the electronic devices sold by Edge allowed individuals to reprogram the truck’s computer so that the truck would continue to operate even after the filter had been removed.

Although Edge stopped selling the illegal devices in mid-2011, the consent decree requires Edge to offer to buy back the devices from anyone who possesses one. In order to sell the device back to Edge, the truck from which the device came must be returned to its original factory programming. Edge is also required to spend at least $157,600 to implement an emission mitigation project to offset the excess PM emissions that it caused. Edge will use the additional funds to offer rebates to individuals who own old wood-burning stoves and who wish to replace them with cleaner burning appliances such as new pellet stoves or EPA-certified wood stoves.

The civil penalty of $500,000 is based on the United States’ determination that Edge has a limited ability to pay a penalty in this matter.

The consent decree resolves allegations in a complaint, filed today, that Edge violated the Clean Air Act by manufacturing and selling motor vehicle parts or components whose effect is to bypass, defeat, or render inoperative a motor vehicles emission control device.

HOSPITALITY COMAPANY SETTLES IMMIGRATION-RELATED UNFAIR EMPLOYMENT PRACTICES

FROM: U.S. DEPARTMENT OF JUSTICE
Monday, January 7, 2013
Justice Department Reaches Settlement with South Carolina Food Service Provider to Resolve Immigration-Related Unfair Employment Practices


The Justice Department announced today that it reached an agreement with Centerplate Inc., resolving allegations that the company violated the anti-discrimination provision of the Immigration and Nationality Act (INA). Centerplate, based in Spartanburg, S.C., is one of the largest hospitality companies in the world. With over 10,000 employees nationwide, Centerplate provides food service to over 250 stadiums, convention centers and entertainment venues across the country.

The Justice Department’s investigation was initiated based on a referral from the U.S. Citizenship and Immigration Services (USCIS) under a memorandum of agreement between the Civil Rights Division and USCIS. The department’s investigation concluded that, for at least the past three years, Centerplate engaged in a pattern or practice of treating work-eligible non-U.S. citizens differently from U.S. citizens during the INA’s employment eligibility verification processes, including E-Verify, by requiring specific documents issued by the Department of Homeland Security from non-U.S. citizens, while not making similar requests of U.S. citizens.

Under the terms of the agreement, Centerplate has agreed to pay $250,000 in civil penalties, the third highest amount paid through settlement since enactment of the INA’s anti-discrimination provision in 1986. Centerplate has also agreed to fully compensate any victims who lost wages as a result of Centerplate’s practices, undergo Justice Department training on the anti-discrimination provision of the INA, and be subject to monitoring of its employment eligibility verification practices for a period of three years. The case settled prior to the Justice Department filing a complaint in this matter.

"Work-eligible applicants – citizens and non-citizens alike – deserve fair and equal treatment in the eligibility verification process," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "Therefore, we will continue to vigorously enforce the anti-discrimination provision of the INA."

The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA.

Monday, January 7, 2013

Justice Department Reaches Settlement with South Carolina Food Service Provider to Resolve Immigration-Related Unfair Employment Practices

The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA. For more information about protections against employment discrimination under the immigration laws, call the OSC’s worker hotline at 1-800-255-7688 (1-800-237-2525, TDD for hearing impaired), call the OSC’s employer hotline at 1-800-255-8155 (1-800-362-2735, TDD for hearing impaired), sign up for a no-cost webinar at www.justice.gov/about/osc/webinars.php , email osccrt@usdoj.gov or visit the website at www.justice.gov/crt/about/osc .