Tuesday, April 16, 2013
ASSISTANT ATTORNEY GENERAL BAER COMMENTS ON ANTITRUST CARVE-OUT CHANGE
FROM: U.S. DEPARTMENT OF JUSTIE
STATEMENT OF ASSISTANT ATTORNEY GENERAL BILL BAER ON
CHANGES TO ANTITRUST DIVISION'S CARVE-OUT PRACTICE REGARDING CORPORATE PLEA AGREEMENTS
WASHINGTON — Assistant Attorney General Bill Baer in charge of the Department of Justice's Antitrust Division issued the following statement today on changes to the division's carve-out practice regarding corporate plea agreements:
"Over the years, the Antitrust Division's efforts to investigate and prosecute price fixing and other cartel conduct have produced outstanding results in holding both corporations and individuals accountable for their wrongdoing. We are committed to continuing these efforts and to build on the division's past successes.
"Going forward, we are making certain changes to the Antitrust Division's approach to corporate plea agreements. In the past, the division's corporate plea agreements have, in appropriate circumstances, included a provision offering non-prosecution protection to those employees of the corporation who cooperate with the investigation and whose conduct does not warrant prosecution. The division excluded, or carved out, employees who were believed to be culpable. In certain circumstances, it also carved out employees who refused to cooperate with the division's investigation, employees against whom the division was still developing evidence and employees with potentially relevant information who could not be located. The names of all carved-out employees were included in the corporate plea agreements, which were publicly filed in the district courts where the charges were brought.
"As part of a thorough review of the division's approach to corporate dispositions, we have decided to implement two changes. The division will continue to carve out employees who we have reason to believe were involved in criminal wrongdoing and who are potential targets of our investigation. However, we will no longer carve out employees for reasons unrelated to culpability.
"The division will not include the names of carved-out employees in the plea agreement itself. Those names will instead be listed in an appendix, and we will ask the court for leave to file the appendix under seal. Absent some significant justification, it is ordinarily not appropriate to publicly identify uncharged third-party wrongdoers.
"The Antitrust Division will continue to exclude from the non-prosecution protections of corporate plea agreements any employees whose conduct may warrant prosecution. The division will continue to make these decisions on an employee-by-employee basis consistent with the evidence and the Principles of Federal Prosecution. We will continue to demand the full cooperation of anyone who seeks to benefit from the non-prosecution protection of a corporate plea agreement, and will revoke that protection for anyone who does not fully and truthfully cooperate with division investigations."
STATEMENT OF ASSISTANT ATTORNEY GENERAL BILL BAER ON
CHANGES TO ANTITRUST DIVISION'S CARVE-OUT PRACTICE REGARDING CORPORATE PLEA AGREEMENTS
WASHINGTON — Assistant Attorney General Bill Baer in charge of the Department of Justice's Antitrust Division issued the following statement today on changes to the division's carve-out practice regarding corporate plea agreements:
"Over the years, the Antitrust Division's efforts to investigate and prosecute price fixing and other cartel conduct have produced outstanding results in holding both corporations and individuals accountable for their wrongdoing. We are committed to continuing these efforts and to build on the division's past successes.
"Going forward, we are making certain changes to the Antitrust Division's approach to corporate plea agreements. In the past, the division's corporate plea agreements have, in appropriate circumstances, included a provision offering non-prosecution protection to those employees of the corporation who cooperate with the investigation and whose conduct does not warrant prosecution. The division excluded, or carved out, employees who were believed to be culpable. In certain circumstances, it also carved out employees who refused to cooperate with the division's investigation, employees against whom the division was still developing evidence and employees with potentially relevant information who could not be located. The names of all carved-out employees were included in the corporate plea agreements, which were publicly filed in the district courts where the charges were brought.
"As part of a thorough review of the division's approach to corporate dispositions, we have decided to implement two changes. The division will continue to carve out employees who we have reason to believe were involved in criminal wrongdoing and who are potential targets of our investigation. However, we will no longer carve out employees for reasons unrelated to culpability.
"The division will not include the names of carved-out employees in the plea agreement itself. Those names will instead be listed in an appendix, and we will ask the court for leave to file the appendix under seal. Absent some significant justification, it is ordinarily not appropriate to publicly identify uncharged third-party wrongdoers.
"The Antitrust Division will continue to exclude from the non-prosecution protections of corporate plea agreements any employees whose conduct may warrant prosecution. The division will continue to make these decisions on an employee-by-employee basis consistent with the evidence and the Principles of Federal Prosecution. We will continue to demand the full cooperation of anyone who seeks to benefit from the non-prosecution protection of a corporate plea agreement, and will revoke that protection for anyone who does not fully and truthfully cooperate with division investigations."
ANTITRUST CARVE-OUT PROVISIONS CHANGED TO PROTECT SUSPECTED WRONGDOERS
FROM: U.S. DEPARTMENT OF JUSTICE
Friday, April 12, 2013
Statement of Assistant Attorney General Bill Baer on Changes to Antitrust Division’s Carve-Out Practice Regarding Corporate Plea Agreements
Assistant Attorney General Bill Baer in charge of the Department of Justice’s Antitrust Division issued the following statement today on changes to the division’s carve-out practice regarding corporate plea agreements:
"Over the years, the Antitrust Division’s efforts to investigate and prosecute price fixing and other cartel conduct have produced outstanding results in holding both corporations and individuals accountable for their wrongdoing. We are committed to continuing these efforts and to build on the division’s past successes.
"Going forward, we are making certain changes to the Antitrust Division’s approach to corporate plea agreements. In the past, the division’s corporate plea agreements have, in appropriate circumstances, included a provision offering non-prosecution protection to those employees of the corporation who cooperate with the investigation and whose conduct does not warrant prosecution. The division excluded, or carved out, employees who were believed to be culpable. In certain circumstances, it also carved out employees who refused to cooperate with the division’s investigation, employees against whom the division was still developing evidence and employees with potentially relevant information who could not be located. The names of all carved-out employees were included in the corporate plea agreements, which were publicly filed in the district courts where the charges were brought.
"As part of a thorough review of the division’s approach to corporate dispositions, we have decided to implement two changes. The division will continue to carve out employees who we have reason to believe were involved in criminal wrongdoing and who are potential targets of our investigation. However, we will no longer carve out employees for reasons unrelated to culpability.
"The division will not include the names of carved-out employees in the plea agreement itself. Those names will instead be listed in an appendix, and we will ask the court for leave to file the appendix under seal. Absent some significant justification, it is ordinarily not appropriate to publicly identify uncharged third-party wrongdoers.
"The Antitrust Division will continue to exclude from the non-prosecution protections of corporate plea agreements any employees whose conduct may warrant prosecution. The division will continue to make these decisions on an employee-by-employee basis consistent with the evidence and the Principles of Federal Prosecution. We will continue to demand the full cooperation of anyone who seeks to benefit from the non-prosecution protection of a corporate plea agreement, and will revoke that protection for anyone who does not fully and truthfully cooperate with division investigations."
Friday, April 12, 2013
Statement of Assistant Attorney General Bill Baer on Changes to Antitrust Division’s Carve-Out Practice Regarding Corporate Plea Agreements
Assistant Attorney General Bill Baer in charge of the Department of Justice’s Antitrust Division issued the following statement today on changes to the division’s carve-out practice regarding corporate plea agreements:
"Over the years, the Antitrust Division’s efforts to investigate and prosecute price fixing and other cartel conduct have produced outstanding results in holding both corporations and individuals accountable for their wrongdoing. We are committed to continuing these efforts and to build on the division’s past successes.
"Going forward, we are making certain changes to the Antitrust Division’s approach to corporate plea agreements. In the past, the division’s corporate plea agreements have, in appropriate circumstances, included a provision offering non-prosecution protection to those employees of the corporation who cooperate with the investigation and whose conduct does not warrant prosecution. The division excluded, or carved out, employees who were believed to be culpable. In certain circumstances, it also carved out employees who refused to cooperate with the division’s investigation, employees against whom the division was still developing evidence and employees with potentially relevant information who could not be located. The names of all carved-out employees were included in the corporate plea agreements, which were publicly filed in the district courts where the charges were brought.
"As part of a thorough review of the division’s approach to corporate dispositions, we have decided to implement two changes. The division will continue to carve out employees who we have reason to believe were involved in criminal wrongdoing and who are potential targets of our investigation. However, we will no longer carve out employees for reasons unrelated to culpability.
"The division will not include the names of carved-out employees in the plea agreement itself. Those names will instead be listed in an appendix, and we will ask the court for leave to file the appendix under seal. Absent some significant justification, it is ordinarily not appropriate to publicly identify uncharged third-party wrongdoers.
"The Antitrust Division will continue to exclude from the non-prosecution protections of corporate plea agreements any employees whose conduct may warrant prosecution. The division will continue to make these decisions on an employee-by-employee basis consistent with the evidence and the Principles of Federal Prosecution. We will continue to demand the full cooperation of anyone who seeks to benefit from the non-prosecution protection of a corporate plea agreement, and will revoke that protection for anyone who does not fully and truthfully cooperate with division investigations."
Monday, April 15, 2013
MAN INDICTED FOR PART IN BUSINESS OPPORTUNITY FRAUD CASE
FROM: U.S. DEPARTMENT OF JUSTICE
Thursday, April 11, 2013
Canadian Citizen Pleads Guilty in Connection with Costa Rica-Based Business Opportunity Fraud Ventures
Kerry Michael Deevy pleaded guilty in U.S. District Court for the Southern District of Florida in Miami to 13 counts of an indictment pending against him, including one count of conspiracy to commit mail and wire fraud, three counts of mail fraud, and nine counts of wire fraud, the Justice Department and the U.S. Postal Inspection Service announced today.
Deevy, a Canadian citizen, was charged in connection with the operation of a series of fraudulent business opportunities. Deevy was arrested in Costa Rica in February 2012 following his indictment by a federal grand jury in Miami on Nov. 29, 2011. Following his arrest in Costa Rica, Deevy was extradited to the United States for prosecution. Deevy was arrested based on charges that he and his co-conspirators purported to sell vending machine and greeting card business opportunities, including assistance in establishing, maintaining and operating such businesses. The indictment is part of the government’s continued nationwide crackdown on business opportunity fraud.
In addition to Deevy, 11 other individuals have been charged in connection with business opportunity fraud ventures based in Costa Rica. Deevy is the ninth of those individuals to be convicted in the United States.
"The Department of Justice is committed to cracking down on financial fraud, including international telemarketing schemes," said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. "That is why we will continue to prosecute those who would deprive innocent, hardworking Americans of their hard-earned money by offering phony business opportunities."
Beginning in 2006, Deevy and his coconspirators fraudulently induced purchasers in the United States to buy business opportunities in Cards-R-Us Inc., Premier Cards Inc. and Nation West Distribution Company. The business opportunities cost thousands of dollars each, and most purchasers paid at least $10,000.
Deevy participated in a conspiracy that used various means to make it appear to potential purchasers that the businesses were located entirely in the United States. In reality, Deevy operated out of Costa Rica to fraudulently induce potential purchasers in the United States to buy the purported business opportunities.
The companies made numerous false statements to potential purchasers of the business opportunities, including that purchasers would likely earn substantial profits; that prior purchasers of the business opportunities were earning substantial profits; that purchasers would sell a guaranteed minimum amount of merchandise, such as greeting cards; and that the business opportunity worked with locators familiar with the potential purchaser’s area who would secure or had already secured high-traffic locations for the potential purchaser’s merchandise stands.
The companies employed various types of sales representatives, including fronters, closers and references. A fronter spoke to potential purchasers when the prospective purchasers initially contacted the company in response to an advertisement. A closer subsequently spoke to potential purchasers to finalize deals. References spoke to potential purchasers about the financial success they purportedly had experienced since purchasing one of the business opportunities. The companies also employed locators, who were typically characterized by the sales representatives as third parties who worked with the companies to find high-traffic locations for the prospective purchaser's merchandise display racks.
Deevy, using aliases, was a fronter and reference for Cards-R-Us, Premier Cards and Nation West.
Each of the companies was registered as a corporation and rented office space to make it appear to potential purchasers that its operations were fully in the United States. Cards-R-Us was registered as a Nevada corporation and rented office space in Reno, Nev. Premier Cards was registered as a Colorado and Pennsylvania corporation and rented office space in Philadelphia. Nation West was a Colorado corporation and rented office space in Denver.
"Fraudsters must realize that financial fraud victimizing Americans will be prosecuted vigorously, even if the schemers conduct their fraudulent operations from abroad," said Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida. "Increased international law enforcement cooperation eliminates safe havens for those who cheat American citizens from overseas."
"The success of this investigation shows that the U.S. Postal Inspection Service continues to work closely with the Department of Justice and our law enforcement partners, both foreign and domestically, to protect the American consumer from the predatory nature of business opportunity and telemarketing schemes," said Tony Gomez, Acting U.S. Postal Inspector in Charge in Miami.
Acting Assistant Attorney General Delery commended the investigative efforts of the Postal Inspection Service. The case is being prosecuted by Assistant Director Jeffrey Steger and trial attorney Alan Phelps with the U.S. Department of Justice Consumer Protection Branch.
Thursday, April 11, 2013
Canadian Citizen Pleads Guilty in Connection with Costa Rica-Based Business Opportunity Fraud Ventures
Kerry Michael Deevy pleaded guilty in U.S. District Court for the Southern District of Florida in Miami to 13 counts of an indictment pending against him, including one count of conspiracy to commit mail and wire fraud, three counts of mail fraud, and nine counts of wire fraud, the Justice Department and the U.S. Postal Inspection Service announced today.
Deevy, a Canadian citizen, was charged in connection with the operation of a series of fraudulent business opportunities. Deevy was arrested in Costa Rica in February 2012 following his indictment by a federal grand jury in Miami on Nov. 29, 2011. Following his arrest in Costa Rica, Deevy was extradited to the United States for prosecution. Deevy was arrested based on charges that he and his co-conspirators purported to sell vending machine and greeting card business opportunities, including assistance in establishing, maintaining and operating such businesses. The indictment is part of the government’s continued nationwide crackdown on business opportunity fraud.
In addition to Deevy, 11 other individuals have been charged in connection with business opportunity fraud ventures based in Costa Rica. Deevy is the ninth of those individuals to be convicted in the United States.
"The Department of Justice is committed to cracking down on financial fraud, including international telemarketing schemes," said Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. "That is why we will continue to prosecute those who would deprive innocent, hardworking Americans of their hard-earned money by offering phony business opportunities."
Beginning in 2006, Deevy and his coconspirators fraudulently induced purchasers in the United States to buy business opportunities in Cards-R-Us Inc., Premier Cards Inc. and Nation West Distribution Company. The business opportunities cost thousands of dollars each, and most purchasers paid at least $10,000.
Deevy participated in a conspiracy that used various means to make it appear to potential purchasers that the businesses were located entirely in the United States. In reality, Deevy operated out of Costa Rica to fraudulently induce potential purchasers in the United States to buy the purported business opportunities.
The companies made numerous false statements to potential purchasers of the business opportunities, including that purchasers would likely earn substantial profits; that prior purchasers of the business opportunities were earning substantial profits; that purchasers would sell a guaranteed minimum amount of merchandise, such as greeting cards; and that the business opportunity worked with locators familiar with the potential purchaser’s area who would secure or had already secured high-traffic locations for the potential purchaser’s merchandise stands.
The companies employed various types of sales representatives, including fronters, closers and references. A fronter spoke to potential purchasers when the prospective purchasers initially contacted the company in response to an advertisement. A closer subsequently spoke to potential purchasers to finalize deals. References spoke to potential purchasers about the financial success they purportedly had experienced since purchasing one of the business opportunities. The companies also employed locators, who were typically characterized by the sales representatives as third parties who worked with the companies to find high-traffic locations for the prospective purchaser's merchandise display racks.
Deevy, using aliases, was a fronter and reference for Cards-R-Us, Premier Cards and Nation West.
Each of the companies was registered as a corporation and rented office space to make it appear to potential purchasers that its operations were fully in the United States. Cards-R-Us was registered as a Nevada corporation and rented office space in Reno, Nev. Premier Cards was registered as a Colorado and Pennsylvania corporation and rented office space in Philadelphia. Nation West was a Colorado corporation and rented office space in Denver.
"Fraudsters must realize that financial fraud victimizing Americans will be prosecuted vigorously, even if the schemers conduct their fraudulent operations from abroad," said Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida. "Increased international law enforcement cooperation eliminates safe havens for those who cheat American citizens from overseas."
"The success of this investigation shows that the U.S. Postal Inspection Service continues to work closely with the Department of Justice and our law enforcement partners, both foreign and domestically, to protect the American consumer from the predatory nature of business opportunity and telemarketing schemes," said Tony Gomez, Acting U.S. Postal Inspector in Charge in Miami.
Acting Assistant Attorney General Delery commended the investigative efforts of the Postal Inspection Service. The case is being prosecuted by Assistant Director Jeffrey Steger and trial attorney Alan Phelps with the U.S. Department of Justice Consumer Protection Branch.
Sunday, April 14, 2013
DIETARY SUPPLEMENT COMPANY ORDERED TO NO LONGER VIOLATE THE FEDERAL FOOD, DRUG AND COSMETIC ACT
FROM: U.S. DEPARTMENT OF JUSTICE
Monday, April 8, 2013
U.S. Obtains Permanent Injunction Against New York Dietary Supplement Firm’s Operations
U.S. District Court Judge Joseph F. Bianco entered a consent decree of permanent injunction between the United States, Kabco Pharmaceuticals Inc. and its CEO and President Abu Kabir, the Justice Department announced today. The consent decree entered by the court enjoins the defendants from violating the Federal Food, Drug and Cosmetic Act (FDCA) in connection with their manufacturing, packing and distributing of dietary supplements.
In a complaint filed with the court, the United States alleged that Food and Drug Administration (FDA) inspections found that Kabco distributed dietary supplements, including Brewers Yeast Tablets, Dandelion Root Capsules, Night-Time Herb Capsules, Inositol Calcium & Magnesium Capsules, Vitamin C-500 with Rose Hips Time Released Tablets and Joint All Capsules, that did not meet product specifications. As alleged in the complaint, during inspections of the defendants’ manufacturing facilities, FDA investigators found numerous current good manufacturing practice (cGMP) violations. Among other violations, Kabco did not review and investigate product complaints, failed to hold dietary supplements under conditions designed to prevent product mix-ups and included unlabeled raw ingredients in their dietary supplements, including whey polio, an undeclared allergen. Individuals who are allergic to milk could have a serious adverse health reaction from consuming any product with an undeclared milk allergen like whey polio.
"When consumers purchase dietary supplements, they are entitled to know that they got what they paid for," said Stuart F. Delery, Acting Assistant Attorney General of the Justice Department’s Civil Division. "When supplement manufacturers fail to ensure that their products contain their labeled ingredients – especially when the labels do not warn consumers that the products may contain allergens dangerous to them – they put consumers at risk. We stand ready to take appropriate enforcement steps against the manufacturers who cannot comply with their good manufacturing practice obligations."
According to the government’s complaint, the FDA previously inspected the defendants’ facility and noted a history of violations and warnings. As a result of the defendants’ most recent violations, as well as a history of unheeded warnings, the Justice Department filed this injunction. Under the consent decree, the defendants agreed to stop manufacturing and distributing dietary supplements until, among other corrective actions, the company demonstrates to the FDA that it is meeting the quality, safety and labeling standards required by law. The consent decree further requires the defendants to engage in appropriate, independent outside oversight to ensure compliance.
Acting Assistant Attorney General Delery thanked the FDA for referring this matter for litigation. Lauren Bell, Trial Attorney at the Consumer Protection Branch of the Justice Department, in conjunction with Melissa Mendoza, Associate Chief Counsel at FDA’s Office of the Chief Counsel, brought this case on behalf of the United States.
Monday, April 8, 2013
U.S. Obtains Permanent Injunction Against New York Dietary Supplement Firm’s Operations
U.S. District Court Judge Joseph F. Bianco entered a consent decree of permanent injunction between the United States, Kabco Pharmaceuticals Inc. and its CEO and President Abu Kabir, the Justice Department announced today. The consent decree entered by the court enjoins the defendants from violating the Federal Food, Drug and Cosmetic Act (FDCA) in connection with their manufacturing, packing and distributing of dietary supplements.
In a complaint filed with the court, the United States alleged that Food and Drug Administration (FDA) inspections found that Kabco distributed dietary supplements, including Brewers Yeast Tablets, Dandelion Root Capsules, Night-Time Herb Capsules, Inositol Calcium & Magnesium Capsules, Vitamin C-500 with Rose Hips Time Released Tablets and Joint All Capsules, that did not meet product specifications. As alleged in the complaint, during inspections of the defendants’ manufacturing facilities, FDA investigators found numerous current good manufacturing practice (cGMP) violations. Among other violations, Kabco did not review and investigate product complaints, failed to hold dietary supplements under conditions designed to prevent product mix-ups and included unlabeled raw ingredients in their dietary supplements, including whey polio, an undeclared allergen. Individuals who are allergic to milk could have a serious adverse health reaction from consuming any product with an undeclared milk allergen like whey polio.
"When consumers purchase dietary supplements, they are entitled to know that they got what they paid for," said Stuart F. Delery, Acting Assistant Attorney General of the Justice Department’s Civil Division. "When supplement manufacturers fail to ensure that their products contain their labeled ingredients – especially when the labels do not warn consumers that the products may contain allergens dangerous to them – they put consumers at risk. We stand ready to take appropriate enforcement steps against the manufacturers who cannot comply with their good manufacturing practice obligations."
According to the government’s complaint, the FDA previously inspected the defendants’ facility and noted a history of violations and warnings. As a result of the defendants’ most recent violations, as well as a history of unheeded warnings, the Justice Department filed this injunction. Under the consent decree, the defendants agreed to stop manufacturing and distributing dietary supplements until, among other corrective actions, the company demonstrates to the FDA that it is meeting the quality, safety and labeling standards required by law. The consent decree further requires the defendants to engage in appropriate, independent outside oversight to ensure compliance.
Acting Assistant Attorney General Delery thanked the FDA for referring this matter for litigation. Lauren Bell, Trial Attorney at the Consumer Protection Branch of the Justice Department, in conjunction with Melissa Mendoza, Associate Chief Counsel at FDA’s Office of the Chief Counsel, brought this case on behalf of the United States.
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