Massachusetts Chiropractor Pleads Guilty to Tax Evasion

The owner of a chiropractic business pleaded guilty today to tax evasion, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.  

According to an indictment filed in June 2018, Richard Rogers, a Northborough, Massachusetts, chiropractor, operated his practice from his residence. Rogers was charged with evading his taxes from 2012 through 2016 by concealing his income from the Internal Revenue Service (IRS) through a variety of methods. Rogers encouraged his clients to pay in cash, used a nominee bank account to negotiate check payments when he was not paid in cash, paid creditors using postal money orders, and used credit card accounts opened with a fictitious social security number. Rogers also concealed the ownership of his residence by titling the property in the name of a trust. Rogers did not file federal tax returns from at least 2008 through 2016, despite his obligation to do so.

United States District Judge Timothy S. Hillman scheduled sentencing for Sept. 10, 2019. Rogers faces a maximum sentence of five years in prison, three years of supervised release, and monetary penalties. 

Principal Deputy Assistant Attorney General Zuckerman thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant Chief John N. Kane and Trial Attorney Carl F. Brooker of the Tax Division, who are prosecuting the case.

Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.

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Author: June 14, 2019

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Prosecutors From The United States, Colombia and Mexico Strengthen Their Commitment to Dismantling Transnational Criminal Organizations

On June 12 to 14, in Cartagena, Colombia, prosecutors from Colombia, Mexico, and the United States came together for the second Transnational Criminal Organizations (TCO) Working Group.  The mission of the Working Group is to engage in specialized training and to develop joint strategies and best practices to dismantle the transnational criminal organizations that threaten the three nations.

During the Working Group, experienced prosecutors from the three nations benefited from trainings on international judicial cooperation and money laundering, and began developing a road map for the development or dissemination of best practices and effective strategies to dismantle these dangerous enterprises.  This effort is all the more critical given the increasing interconnectedness between Mexican cartels and Colombian drug trafficking organizations, which collaborate to improve their profits and ability to traffic narcotics, humans, weapons and other contraband into the United States, threatening its national security.

The TCO Working Group is a direct outgrowth of Presidential Executive Order 13773 – Enforcing Federal Law with Respect to Transnational Criminal Organizations and Preventing International Trafficking – which recognized the threat that transnational criminal organizations, including transnational drug cartels, pose to the national security of the United States.  In the Executive Order, President Trump prioritized the need to increase cooperation and information sharing with foreign counterparts, and to enhance their operational capabilities via increased security sector assistance, all with the goal of dismantling TCO.  Since the 2017 Executive Order was issued, the President has continually reiterated the need to immediately attack the ability of these organizations to traffic narcotics and other criminality into the United States.

The U.S. Department of Justice’s Office of Overseas Prosecutorial Development, Assistance and Training (OPDAT), which is housed under the Department’s Criminal Division, seized on the momentum from the Dec. 6 to 7, 2017 “Trilateral Summit Against Transnational Organized Crime,” to spearhead the TCO Working Group.  The Attorneys General from the United States, Mexico and Colombia converged at the Trilateral Summit to strengthen their commitment to international judicial cooperation and to reinforce joint strategies to dismantle transnational organized crime, such as narcotics trafficking, money laundering, and public corruption.  Via a Joint Declaration, the three Attorneys General called on their respective institutions to increase the exchange of best practices to effectively dismantle TCO and to develop joint capacity building and training programs for those charged with investigating and prosecuting TCO.  With this clear mandate, OPDAT Colombia and OPDAT Mexico sponsored the first TCO Working Group in August 2018 in Mexico City, Mexico.

Participating in the TCO Working Group meeting was U.S. Attorney Maria Chapa Lopez for the Middle District of Florida; representatives of the Fiscalía General de la Nación (FGN) of Colombia including Claudia Carrasquilla, head of the National Organized Crime Unit and Ricardo Carriazo, head of the National Drug Trafficking Unit of FGN; representatives of the Fiscalía General de la República (FGR) of Mexico, OPDAT Resident Legal Advisors (RLAs) in Colombia and México and Assistant U.S. Attorneys from the federal districts of Arizona, Southern District of California, Middle District of Florida, Southern District of Florida, Northern District of Georgia, District of New Jersey, District of New Mexico, Eastern District of Texas, Southern District of Texas, Western District of Texas and District of Utah; trial attorneys from the Criminal Division’s Money Laundering and Asset Recovery Section and representatives from the Criminal Division’s International Criminal Investigative Training and Assistance Program (ICITAP); the U.S. Drug Enforcement Administration (DEA); U.S. Customs and Border Protection; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) and the Colombian National Police.

“Global cooperation is the key to mitigating threats to our national security and thwarting borderless crimes,” said U.S. Attorney Maria Chapa Lopez for the Middle District of Florida. “The OPDAT Program continues to provide us, and our international partners, with the vital tools, information, and resolve necessary to defeat criminals, wherever they operate.”

“We held the trilateral meeting between the U.S., Colombian and Mexican prosecutors, where we’ve discussed issues of absolute importance for the dismantling of transnational criminal organizations that affect the national security of our countries,” said Ricardo Carriazo, Director of the Special Unit against Drug Trafficking for the Colombian Attorney General’s Office.  “The results in this exchange of experiences and good practices will be seen soon in the development of international judicial operations. “

OPDAT spearheads and organizes this critical event in coordination with the U.S. Department of State’s Bureau of International Narcotics and Law Enforcement Affairs (INL).

For photos of this event, please see here.

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Author: June 14, 2019

New York Man Sentenced to 20 Years in Prison for Attempting to Join ISIS in Yemen

Earlier today in federal court in Brooklyn, Mohamed Rafik Naji was sentenced to 20 years imprisonment to be followed by five years supervised release by United States District Judge Frederic Block for attempting to provide material support or resources to the Islamic State of Iraq and al-Sham (ISIS), a foreign terrorist organization.  Naji pleaded guilty to the charge in February 2018.

Assistant Attorney General for National Security John C. Demers, U.S. Attorney Richard P. Donoghue for the Eastern District of New York, Assistant Director-in-Charge William F. Sweeney Jr. of the FBI’s New York Field Office and Commissioner James P. O’Neill of the New York City Police Department (NYPD) announced the sentence.

“Time and again, the United States has brought to justice those who have traveled from here to try and fight for ISIS,” said Assistant Attorney General Demers.  “This is just what Naji did.  Today’s sentence holds him accountable for his crime and I want to thank the agents, analysts, and prosecutors who are responsible for this result.”

“With today’s sentence, Naji has been held accountable for trying to enter a foreign war zone and join ISIS’ murderous cause,” said United States Attorney Donoghue.  “This Office, together with the FBI, the NYPD and all the members of the FBI Joint Terrorism Task Force will take every step necessary to incapacitate terrorists like Naji and protect the American people.  I commend the Task Force for its outstanding work in this case.”          

“Extremists like Mr. Naji believe murdering innocent people advances their political agendas,” said FBI Assistant Director-in-Charge Sweeney.  “In the end, Mr. Naji, like many others before him, find the only thing their actions lead to is a different vantage point from which to watch the world pass by – through the steel bars of a federal prison.  Mr. Naji will remember today as sentencing day, nothing more.  Working day in and day out with our partners on the FBI Joint Terrorism Task Force, safeguards have been put in place to secure Times Square and other popular attractions so any would be terrorist will find it extremely difficult to carry out their plans.  Our unified goal is to remain proactive and prevent acts before they occur, and once again I would like to thank all of those who ensure our safety.”

“This case is a reminder that New York City remains the top target for terrorism in the U.S.,” said NYPD Commissioner O’Neill.  “The NYPD and its partners in law enforcement will never relent in the fight against terror. I want to thank the dedicated members of the JTTF who worked on this investigation to keep our City safe and the prosecutors from the Eastern District of New York.”

By late 2014, Naji had become a committed supporter of ISIS’s murderous cause as he repeatedly promoted and distributed ISIS propaganda with violent themes and messages on social media.  In March 2015, Naji traveled from New York to Yemen in an effort to join ISIS.  Naji also used social media to advise another person he could travel to join ISIS, but unbeknownst to Naji, that individual was a confidential source of information for the government (the CS).  In an online conversation with the CS, Naji proclaimed his allegiance to ISIS, stating, “I belong to Islamic state only.”

Following his return to the United States in September 2015, Naji continued to express his support for ISIS and violent jihad.  In July 2016, following the ISIS-inspired terrorist truck attack in Nice, France, that killed scores of innocent civilians, Naji told the CS how easy it would be to carry out a similar attack in Times Square, explaining that ISIS “want[s] an operation in Times Square” and stating that an ISIS “reconnaissance group . . . put up scenes of Times Square.”  Naji further explained, “if there is a truck, I mean a garbage truck and one drives it there to Times Square and crushes them . . . Times Square day.” 

Naji has been incarcerated since his arrest in Brooklyn in November 2016.

The government’s case is being handled by the Office’s National Security and Cybercrime Section.  Assistant United States Attorney Ian C. Richardson is in charge of the prosecution, with assistance from Trial Attorney Jacqueline L. Barkett of the National Security Division’s Counterterrorism Section.

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Author: June 14, 2019

United States Files False Claims Act Complaint Against Two Compounding Pharmacies and Their Owner For Submitting Inflated Claims and Improperly Waiving Patient Copayments

The Department of Justice announced today that the United States has filed a complaint in intervention against Smart Pharmacy Inc., and SP2 LLC, two compounding pharmacies located in Jacksonville, Florida. The complaint alleges that the pharmacies improperly included the drug aripiprazole, an atypical antipsychotic drug, in compounded pain creams in order to boost the pharmacies’ reimbursement for the prescriptions and that the pharmacies routinely waived patient copayment obligations. The government has also brought claims against Gregory Balotin, a co-owner of the pharmacies, for his involvement in the alleged schemes. 

Aripiprazole, which is sold under the brand names Abilify, Abilify Maintena, and Aristada, is approved by the U.S. Food and Drug Administration to treat a number of psychological conditions such as schizophrenia, Tourette’s disorder, irritability associated with autistic disorder, and manic and mixed episodes associated with Bipolar I. The complaint alleges that the defendants crushed pills of aripiprazole and included them in compounded creams used topically for pain treatment while knowing that there was not an adequate clinical basis for adding aripiprazole to the compound. The complaint alleges that, by including the drug in the pain creams, the defendants substantially increased their reimbursement for prescriptions for the creams from Medicare Part D and TRICARE, the federal health care program for active duty military personnel, retirees, and their families.

The government’s complaint also alleges that the defendants improperly waived patient copayments. While copayments may be waived in certain unique circumstances, such as on the basis of financial hardship of the patient, the defendants are alleged to have routinely waived patient copayments without regard for whether a waiver was warranted.

“The Department of Justice will hold accountable health care providers that manipulate the system to improperly enrich themselves at the taxpayers’ expense,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division. “Dispensing drugs for unproven uses and improperly waiving patient copayments erodes public trust in the health care system and increases the costs borne by federal health care programs.”

“This complaint addresses alarming misconduct by some of the largest compounding pharmacies in our district,” said U.S. Attorney for the Middle District of Florida Maria Chapa Lopez. “We intend to hold providers accountable under the False Claims Act when they put their own economic interests ahead of the medical needs of federal health program beneficiaries.”

“Fraud in government health programs may result in harm to vulnerable populations and needless taxpayer expense,” said Shimon R. Richmond, Special Agent in Charge of the Office of Inspector General for the U.S. Department of Health and Human Services. “All available resources will be used to aggressively investigate these allegations.”

“I applaud the Department of Justice for its continued efforts to hold compounding pharmacies accountable to the American taxpayer,” said Vice Adm. Raquel Bono, director of the Defense Health Agency. “The efforts of the Department of Justice safeguard the health care benefit for our service members, veterans and their families. The Defense Health Agency will continue working closely with the Justice Department, and other state and federal agencies to investigate all those who participated in fraudulent practices.”

“It is of utmost importance to protect the integrity of DoD programs by rooting out fraud, waste, and abuse that diverts and wastes precious American taxpayer dollars intended for our Warfighters, and their families. Allegations of providers unjustly enriching themselves will be met with a coordinated effort amongst all affected agencies to hold those accountable,” said the Defense Criminal Investigative Service Special Agent in Charge Cynthia Bruce, Southeast Field Office.

The lawsuits, United States ex rel. Sanchez v. Smart Pharmacy, Inc., et al., No. 14-cv-1453 (M.D. Fla.), and United States ex rel. Kohli v. Smart Pharmacy, Inc., et al., No. 16-cv-387 (M.D. Fla.), were originally filed in the U.S. District Court for the Middle District of Florida by Amy Sanchez and Ashok Kohli, two former employees of Smart Pharmacy. The lawsuits were filed under the qui tam or whistleblower provisions of the False Claims Act, which permit private parties to sue on behalf of the United States for false claims and to receive a share of any recovery. The Act permits the United States to intervene in such lawsuits, as the United States has done in these cases. 

This matter is being handled by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Middle District of Florida, with assistance from the Defense Criminal Investigative Service, the Department of Health and Human Services Office of Inspector General, the Department of Veterans Affairs Office of Inspector General, the Department of Labor Office of Inspector General, and the Office of Personnel Management Office of Inspector General.  

The claims asserted against the defendants are allegations only; there has been no determination of liability. 

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Author: June 14, 2019

IBM Agrees to Pay $14.8 Million to Settle False Claims Act Allegations Related to Maryland Health Benefit Exchange

International Business Machines Corporation (IBM) and Cúram Software have agreed to pay $14.8 million to settle alleged violations of the False Claims Act arising from material misrepresentations to the State of Maryland during the Maryland Health Benefit Exchange (MHBE) contract award process for the development of Maryland’s Health Insurance Exchange (HIX) website and IT platform, the Department of Justice announced today.

“Making misleading statements to win contract awards violates fundamental tenets of government contracting and harms the government and taxpayers,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division. “The Department is committed to protecting the American taxpayer from false claims and preserving the integrity of federal funding decisions.”

“When companies misrepresent their products and capabilities in order to win government contracts, they enrich themselves at taxpayers’ expense,” said U.S. Attorney Robert K. Hur.  “Today’s resolution demonstrates our continuing commitment to hold companies accountable for their actions.”        

“Companies are expected to be candid about products, skills and abilities during contract negotiations,” said Maureen R. Dixon, Special Agent in Charge, for the Department of Health and Human Services, Office of the Inspector General.  “We will continue to work with the U.S. Department of Justice to ensure taxpayer dollars are only spent for honest, high-quality health care products and services.”

On Dec. 19, 2011, IBM completed its acquisition of Cúram Software Ltd (Cúram). That same day, a proposal was submitted to the State of Maryland to support the HIX, which was drafted in part by Cúram and included Cúram as a subcontractor for software and services. On Jan. 5, 2012, as part of the bid evaluation process and with IBM’s knowledge, Cúram participated in a presentation to the State of Maryland that illustrated Cúram software conducting eligibility determinations for health assistance coverage, calculating applicable tax credits, addressing changes in life events (e.g. changes in income), and illustrating the integration of Cúram’s software with another subcontractor’s health plan shopping software. On Feb. 22, 2012, the State, acting through MHBE, awarded the contract for development of Maryland’s HIX website and IT platform. Cúram-IBM served as a subcontractor on the project. Federal grants from the U.S. Department of Health and Human Services partially funded MHBE’s contract for the Maryland HIX. 

The settlement covers the time period from Jan. 1, 2011, through May 31, 2014, and resolves allegations against Cúram-IBM regarding material misrepresentations made to the State of Maryland during the HIX contract procurement process, including misrepresentations regarding the development status of the Cúram for Health Care Reform software; the existing functionality of the Cúram software to meet the State’s technical requirements, such as addressing life events and calculating tax credits under the Patient Protection and Affordable Care Act; and the integration of Cúram software with other software needed to provide a properly functioning HIX website.  After repeated problems following the launch of the HIX website in October 2013, Maryland, acting through MHBE, terminated the contract and replaced the HIX website and IT platform, including the Cúram software.         

The investigation and settlement in this matter were the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the District of Maryland, the Department of Health and Human Services Office of Inspector General, and the Office of the Attorney General of Maryland. The claims resolved by this settlement are allegations only and there has been no determination of liability.

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Author: June 14, 2019

Second New York Broker-Dealer Pleads Guilty To Rigging Bids for Financial Instruments in Violation of Antitrust Law

Industrial and Commercial Bank of China Financial Services LLC (ICBC) pleaded guilty to an antitrust charge and was sentenced to pay a criminal fine in excess of $3 million for its involvement in a bid-rigging conspiracy involving certain financial instruments, the Department of Justice announced today. 

ICBC admitted, as part of a guilty plea, that from May 2012 until at least August 2014, it conspired with other institutions and individuals to submit rigged bids to borrow pre-release American Depository Receipts (ADRs).  ICBC’s plea is the second in the ongoing criminal antitrust investigation; Banca IMI Securities Corp. previously pleaded guilty for its role in the conspiracy and was sentenced to pay a fine in excess of $2 million on May 10, 2019.

Worldwide, thousands of publicly traded companies list their shares of common stock only on foreign stock exchanges.  Most U.S. investors are unable to purchase or sell such foreign shares.  The U.S. Securities and Exchange Commission, however, permits four U.S. depository banks to create ADRs, which represent foreign ordinary shares and can be traded in the United States.  Through the purchase and sale of ADRs, U.S. investors are able to gain exposure to — including the ability to receive dividends from — companies whose common stock is listed only on foreign stock exchanges. 

ICBC pleaded guilty to conspiring to borrow pre-release ADRs from U.S. depository banks at artificially suppressed rates.  During the conspiracy, a U.S. depository bank began using an auction-style process and invited ICBC and other broker-dealers to submit competitive bids for rates to borrow ADRs.  In response, ICBC and its co-conspirators intensified their coordination in an effort to artificially increase their profits under the auction-style process.  On at least 24 occasions, ICBC reached an agreement with one or more co-conspirators as to the bids they would submit to U.S. depository banks.  On many occasions, the conspirators agreed that they would all submit the same bid.

“In today’s proceeding, the Department of Justice and its law enforcement partners held to account another broker-dealer for its role in suppressing competition and rigging bids in the financial services industry,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division.  “The competitive integrity of financial markets is essential to their efficient operation, and the Antitrust Division will continue to aggressively prosecute collusion that corrupts our financial markets.”

“As evidenced by this latest guilty plea, the FBI’s investigation into big ridding for ADRs is broad and deep,” said Assistant Director Robert Johnson of the FBI’s Criminal Investigative Division. “Not only are we bringing the conspirators to justice, we are sending a message to the entire financial industry: you are not above the law. The FBI can and will investigate bid rigging and all fraudulent schemes.  You will be caught.”

“This guilty plea is an example of the FBI’s commitment to investigating companies when they operate outside the law and conspire to cheat and dominate the marketplace,” said FBI Washington Field Office, Acting Assistant Director in Charge, John P. Selleck.  “I would like to thank the FBI agents and analysts who have worked on this complex investigation and are committed to holding those companies accountable who disregard the rule of law for their own financial gain.”

The Securities and Exchange Commission also separately announced today that ICBC has agreed to settle charges that it violated federal securities laws by improperly handling pre-release ADRs.  

The Washington Criminal II Section of the Antitrust Division and the FBI’s International Corruption Squad in Washington, D.C. are conducting the investigation into bid rigging in the market for pre-release ADRs.  Anyone with information in connection with this investigation is urged to call the Antitrust Division’s Washington Criminal II Section at 202-598-4000 or visit www.justice.gov/atr/contact/newcase.html.

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Author: June 14, 2019

Ohio Man Sentenced to 15 Years in Prison for Trying to Join ISIS

A Dayton, Ohio man was sentenced today in U.S. District Court to 180 months in prison and 25 years of supervised release for attempting, and conspiring, to join the Islamic State of Iraq and al-Sham (ISIS).  Assistant Attorney General for National Security John C. Demers, U.S. Attorney Benjamin C. Glassman for the Southern District of Ohio and Special Agent in Charge Todd A. Wickerham of the FBI’s Cincinnati Division made the announcement.

“Alebbini was determined to travel overseas for the purpose of joining ISIS and engaging in violence in support of the foreign terrorist organization,” said Assistant Attorney General Demers.  “Notwithstanding pleas from others close to him, Alebbini declared that he is a terrorist and decided to move forward with his plan to join ISIS.  Thanks to the great work of the agents, analysts, and prosecutors who are assigned to this case, Alebbini’s plans were thwarted and he is being held accountable for his crimes.”

“Alebbini was prepared to kill soldiers and citizens of the United States, the Kingdom of Jordan, and coalition partners fighting against ISIS.  Indeed, Alebbini was prepared to kill any person who did not accept ISIS as the Islamic Caliphate,” said U.S. Attorney Glassman. “Prison is the right place for him.”

Laith Waleed Alebbini, 28, was convicted following a bench trial in November and December 2018 before U.S. District Judge Walter H. Rice.

Alebbini attempted, and conspired, to provide material support and resources to ISIS in the form of personnel, namely himself.

Alebbini, a citizen of Jordan and a U.S. legal permanent resident, was arrested by the FBI on April 26, 2017, at the Cincinnati/Kentucky International Airport, as he approached the TSA security checkpoint.

Alebbini waived his right to trial by jury, and the case proceeded to trial before the Court. The evidence at trial showed that at the time of his arrest, Alebbini had a ticket and boarding pass in hand for a flight to Amnan, Jordan, with a connection in Istanbul, Turkey. The evidence also showed that Alebbini intended to forego the flight to Jordan and instead make his way from Turkey into Syria to join ISIS.

According to court documents and testimony, on April 20, 2017, during a six-hour conversation with a friend who tried to talk Alebbini out of traveling and joining ISIS, Alebbini told his friend: “The Islamic State is fighting a survival war . . . I, cousin, want to go to be an inghimasi soldier.”  

As explained at trial, an “inghimasi soldier” is a particularly lethal type of suicide bomber – one who seeks to cause as much death and destruction as possible prior to detonation.  

On April 26, 2017, about one hour before Alebbini arrived at the Cincinnati/Kentucky International Airport, several relatives pleaded with Alebbini not to join ISIS.  Alebbini responded in three separate back-to-back text messages:  “Do you think I am a criminal”  “I am a terrorist”  “I am mujahid.”

Assistant Attorney General Demers and U.S. Attorney Glassman commended the investigation of this case by the Joint Terrorism Task Force, which includes officers and agents from the FBI, U.S. Secret Service, U.S. Immigrations and Customs Enforcement, Greene County Sheriff’s Office, Oakwood Police Department, Dayton Police Department, Cincinnati Police Department, Colerain Police Department, Ohio State Highway Patrol, University of Cincinnati Police Department, U.S. Air Force Office of Special Investigations, U.S. Internal Revenue Service, U.S. Postal Inspection Service, West Chester Police Department, and Cincinnati State Police Department.

First Assistant Vipal J. Patel and Assistant U.S. Attorney Dominick S. Gerace of the Southern District of Ohio and Trial Attorney Justin Sher of the National Security Division’s Counterterrorism Section prosecuted this case.

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Author: June 13, 2019

Louisiana Man Sentenced for Conspiring to Violate the Federal Housing Rights of Woman with Disabilities

Jody Lambert, 24, was sentenced today in the Eastern District of Louisiana to 120 months imprisonment for conspiring with members of his family to prevent D.P., a woman with cognitive disabilities, from exercising her right to rent and occupy a dwelling without injury, intimidation, and interference because of her cognitive disabilities.

“Lambert and his co-defendants conspired to deprive a vulnerable victim of a safe and secure place to live, forcing her to live outside in a padlocked cage, because of her disability,” said Assistant Attorney General Eric Dreiband. “This disgraceful conduct is a hate crime, and the Department of Justice will continue to make combatting hate crimes a high priority. Today’s sentencing reflects our commitment to seeking justice for victims.”

“Ensuring the Civil Rights of all citizens, especially the most vulnerable is paramount to our country,” said Peter G. Strasser U.S. Attorney for the Eastern District of Louisiana. “The sentencing of Mr. Lambert sends a clear message that anyone who denies a citizen her rights will be held accountable.”

“Today’s sentencing of Jody Lambert, for his inhumane treatment of a family member, serves as a stark reminder that justice does prevail,” said Eric Rommal, FBI New Orleans Special Agent in Charge. “As the primary federal agency charged with enforcing federal civil rights statutes, the FBI New Orleans Field Office will continue to aggressively investigate all credible civil rights allegations in Louisiana.”

On Oct. 18, 2018, Lambert pleaded guilty to one count of civil rights conspiracy. At the plea hearing, Lambert admitted that for several months prior to June 30, 2016, in Amite, Louisiana, he conspired with other members of his family to force D.P. to live in a locked cage in their backyard because of her cognitive disabilities and because they did not want her living in the family’s mobile home. Lambert admitted that he and his family members locked D.P. in the cage at night with a metal chain and padlock, and that he and other family members had placed branches and a tarp over the cage to hide it from view. Lambert further admitted that while locked inside the cage, D.P. was required to use a five-gallon bucket as a toilet. Lambert also admitted that, prior to forcing D.P. to live in the cage, he and his family had forced D.P. to live in their backyard in a locked tent and in a locked shed. Lambert admitted that throughout the time D.P. lived with the family in Amite, Louisiana, Lambert and his conspirators subjected D.P. to routine physical violence and threats of physical violence in order to intimidate D.P. into these living conditions.

This case was investigated by the FBI’s Field Office in New Orleans, Louisiana, the Tangipahoa Parish Sheriff’s Office, and the Tangipahoa District Attorney’s Office. The case is being prosecuted by Trial Attorneys Risa Berkower and Nicholas Reddick of the Justice Department’s Civil Rights Division, Assistant United States Attorney Julia Evans, of the U.S. Attorney’s Office for the Eastern District of Louisiana, and by the Tangipahoa Parish District Attorney’s Office.

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Author: June 13, 2019

South Florida Pill Mill Owner Sentenced to Prison for Role in $2.2 Million Medicare Fraud Scheme

The owner of a pain clinic and a pharmacy in South Florida was sentenced today to 78 months in prison followed by three years of supervised release for his role in a $2.2 million Medicare fraud scheme. 

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Ariana Fajardo Orshan of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) made the announcement. 

Scott Novick, 51, of Hollywood, Florida, was sentenced by U.S. District Judge K. Michael Moore of the Southern District of Florida, who also ordered Novick to forfeit approximately $1.4 million.  Novick had previously pleaded guilty to one count of conspiracy to commit health care fraud.  As part of his plea agreement, Novick agreed to liquidate several financial accounts worth approximately $1,329,886, the proceeds of which were ordered at sentencing to be paid back to Medicare. 

According to admissions made as part of his plea agreement, Novick was the owner of American Pain Management, a pain clinic that had locations in Broward and Palm Beach County.  Novick also owned Pacific Pharmacy of Miami, Florida where the majority of the prescriptions written by American Pain Management were filled.   Novick admitted to submitting approximately $1.2 million in fraudulent claims to Medicare for pain management services purportedly rendered by a doctor who worked at American Pain Management that Novick knew were fraudulently submitted and not eligible for reimbursement.  Novick also admitted that in 2010, in response to legislation passed by the Florida Legislature prohibiting pain clinics from dispensing controlled substances directly from the clinic and other concerns about federal anti-kickback laws, he disguised his ownership of Pacific Pharmacy, falsely naming a relative  so that he could continue dispensing controlled substances. Novick admitted that he knew the doctor at American Pain Management was prescribing controlled substances at inappropriately high levels and that the drugs had not been prescribed for a legitimate medical purpose or in the usual course of professional practice. In fact, Novick knew the doctor would sign prescriptions for patients without conducting a visit with the patient.  Novick admitted he and his clinics received approximately $1.4 million in compensation for his participation in the conspiracy and submitted approximately $1.2 million in claims to  Medicare for the medical services rendered by the doctor that were fraudulently submitted and not eligible for reimbursement.  Pacific Pharmacy was also paid in excess of $1 million for the drugs, which were not eligible for reimbursement.

The FBI and HHS-OIG investigated the case which was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.  The case was prosecuted by Trial Attorney Timothy P. Loper and Acting Assistant Chief Jacob Foster of the Fraud Section.

The Fraud Section leads the Medicare Fraud Strike Force.  Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

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Author: June 13, 2019

Justice Department Settles Suit Against Indiana Bank to Resolve Lending Discrimination Claims

The Department of Justice and the U.S. Attorney’s Office for the Southern District of Indiana today filed a complaint and settlement agreement, resolving allegations that First Merchants Bank engaged in lending discrimination by “redlining” predominantly African-American neighborhoods within Indianapolis, Indiana. “Redlining” is a term describing an illegal practice in which lenders intentionally avoid providing services to individuals living in predominantly minority neighborhoods because of the race of the residents in those neighborhoods.    

The Department alleges in a complaint filed in the U.S. District Court for the Southern District of Indiana that First Merchants violated the Fair Housing Act and Equal Credit Opportunity Act, which prohibit financial institutions from discriminating on the basis of race in their mortgage lending services. The complaint alleges that, from 2011 to at least 2017, First Merchants engaged in unlawful redlining in Indianapolis by intentionally avoiding predominantly African-American neighborhoods because of the race of the people living in those neighborhoods. The Department also alleges in the complaint that First Merchants adopted a residential mortgage lending policy that had the effect of denying residents of predominantly African-American neighborhoods equal access to credit in violation of federal law. 

“Federal law prohibits lenders from discriminating against mortgage applicants and other potential customers based on race,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “We commend First Merchants for cooperatively resolving this case by taking steps to ensure that its residential lending products and services are made available to everyone in Indianapolis, regardless of race.”  

“Discriminatory race-based lending practices have no place in our District,” said Josh Minkler, U.S. Attorney for the Southern District of Indiana. “This case involving First Merchants Bank shows our commitment to ensure this reality.” 

First Merchants Bank is headquartered in Muncie, Indiana, with branches throughout the Midwest. First Merchants is one of the largest full-service banks in Central Indiana with more than $9 billion in assets and 110 branches in Indiana alone. Under the settlement agreement, which is subject to court approval, First Merchants will expand its marketing efforts, lending, and banking services to specifically include predominantly African-American neighborhoods in Indianapolis. To remedy the harm to those living in the redlined areas, the Bank will invest $1.12 million in a loan subsidy fund to increase credit opportunities to residents of predominantly African-American neighborhoods, and will devote $500,000 toward advertising, community outreach, and credit repair and education. The Bank will also open a branch and loan production office to serve the banking and credit needs of residents in predominantly African-American neighborhoods in Indianapolis. The Bank will employ a director of community lending and development who will oversee these efforts and work in close consultation with the Bank’s leadership.   

The Justice Department’s enforcement of fair lending laws is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section. Additional information about the Section’s fair lending enforcement can be found at www.justice.gov/fairhousing

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Author: June 13, 2019