Riverside, California Man Who Admitted Planning Mass Casualty Attacks and Purchasing Firearms Later Used in 2015 Terrorist Attack in San Bernardino Ordered to Serve 20-Year Federal Prison Sentence

A Riverside man was sentenced today to 20 years in federal prison for conspiring to commit terrorist attacks in the Inland Empire and for providing assault rifles later used in the 2015 San Bernardino terrorist attack that killed 14 people.

Enrique Marquez Jr., 28, was sentenced today by U.S. District Judge Jesus Bernal.

Today’s sentencing concludes a case in which Marquez pleaded guilty in 2017 to conspiracy to provide material support and resources to terrorists, in violation of 18 U.S.C. § 2339A. In the plea agreement and in open court, Marquez admitted that he conspired with Syed Rizwan Farook in 2011 and 2012 to attack Riverside City College (RCC) and commuter traffic on the 91 Freeway.

Marquez also pleaded guilty to making false statements in connection with the acquisition of firearms, in violation of 18 U.S.C. § 922 (a)(6), by serving as the “straw buyer” of two assault rifles that he provided to Farook. More than three years later, Farook and his wife used those rifles in the shooting rampage at the San Bernardino Inland Regional Center (IRC) on Dec. 2, 2015. Hours later, both Farook and his wife were killed by law enforcement, ending what at the time was the worst terrorist attack on American soil since 9/11.

The investigation into the deadly shooting at the IRC quickly uncovered evidence that, in 2011 and 2012, Marquez purchased two rifles that Farook and his wife used in the IRC attack. According to Marquez’s plea agreement, Farook paid Marquez for the rifles. Marquez also discussed with Farook the use of radio-controlled improvised explosive devices (IEDs) during the planned attacks on RCC and State Route 91. Marquez admitted purchasing Christmas tree lightbulbs and a container of smokeless powder for use in manufacturing IEDs.

Prosecutors argued in a sentencing memorandum filed last week that Marquez “was a full, willing, and motivated participant of the conspiracy who not only provided the agreement necessary for the conspiracy to attack RCC and SR-91, but also co-designed the attacks with Farook, purchased the two firearms and ammunition to facilitate the attacks, researched bomb making and obtained explosive powder and other bomb-making materials, and visited RCC and SR-91 to sketch out how he and Farook would attack the two locations to maximize casualties.”

Marquez was arrested about two weeks after the IRC terrorist attack and has remained in custody ever since his first court appearance on Dec. 17, 2015. In imposing today’s sentence, Judge Bernal denied Marquez’s request for a five-year sentence, which essentially would have been a time-served sentence that soon would have resulted in his release from custody. In court documents, prosecutors called this request an attempt to “downplay the seriousness of his actions, and skirt that his actions contributed to the mass killing and injuring of innocent people in San Bernardino just a few years later.”

The case against Marquez was the result of an investigation by several members of the Inland Empire Joint Terrorism Task Force, including agents and detectives from the FBI; the San Bernardino Police Department; the San Bernardino County Sheriff’s Department; the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); Homeland Security Investigations; the Riverside County Sheriff’s Department; the San Bernardino County District Attorney’s Office; the Chino Police Department; the Redlands Police Department; the Ontario Police Department; the Corona Police Department; and the Riverside Police Department.

The case against Marquez was prosecuted by Assistant U.S. Attorneys Christopher D. Grigg, Chief of the National Security Division; Melanie Sartoris of the General Crimes Section; and Julius J. Nam of the Riverside Branch Office. The National Security Division’s Counterterrorism Section at the Department of Justice provided substantial assistance.

Also as a result of the investigation into the IRC attack, three people have pleaded guilty to being part of a sham marriage scheme in which a Russian woman “married” Marquez to obtain immigration benefits. Syed Raheel Farook, the brother of IRC attacker Syed Rizwan Farook; Tatiana Farook, who is Syed Raheel Farook’s wife; and Mariya Chernykh, who is Tatiana Farook’s sister, pleaded guilty to immigration fraud charges and admitted being part of conspiracy in which Chernykh paid Marquez to enter into a bogus marriage. The three defendants in the marriage fraud case are scheduled to be sentenced early next year.

In another case stemming from the investigation, the mother of Syed Rizwan Farook pleaded guilty in March to a federal criminal charge of intending to impede the federal criminal investigation by shredding a map her son made in connection with the attack. Rafia Sultana Shareef, a.k.a. Rafia Farook, of Corona, is currently scheduled to be sentenced by Judge Bernal on November 16.

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Author: October 23, 2020

Presentation of the Sherman Award to the Honorable Judge Douglas H. Ginsburg

Welcome to the Conference Center of the historic Robert F. Kennedy Department of Justice Building. It is an honor to present the Sherman award to Judge Douglas H. Ginsburg this afternoon. We’re joined today by Judge Ginsburg’s wife Deecy and many of Judge Ginsburg’s colleagues and admirers. We’re particularly honored by the presence of Justice Gorsuch, a champion of liberty, who in his short time on the Supreme Court has reconfirmed his reputation for brilliance, clarity of thought and expression, and for holding the government to its word, whether in the statutes that it enacts or the treaties that it makes. I also welcome the distinguished guests who are with us virtually.

The Sherman award is the Department of Justice’s highest antitrust honor. It is named for Senator John Sherman, who authored our nation’s first antitrust law—the Sherman Act—in 1890. Today we honor Judge Ginsburg’s lifetime contributions to antitrust law and economic liberty. I can think of no more deserving recipient for the Sherman Award than Judge Ginsburg. His career in public service and his scholarship have shaped the way that antitrust law is understood and practiced. The ceremony today recognizes Judge Ginsburg’s rightful place among the giants of antitrust law who have previously been given this honor. They include: Judge Diane Wood, AAG James Rill, Chairman Robert Pitofsky, Professor Herbert Hovenkamp, Judge Robert Bork, Judge Richard Posner, and Professor Phillip Areeda.

The Antitrust Division has a personal connection to Judge Ginsburg. Before Judge Ginsburg was appointed to the DC Circuit in 1986, he was the Assistant Attorney General for the Antitrust Division. This was a critical time in the Division’s history. At the beginning of 1984, pursuant to a consent decree, the Bell System was broken up into the seven “Baby Bells.” Judge Ginsburg had to oversee the enforcement of the consent decree, and by all accounts he discharged his duties admirably.

Judge Ginsburg was central to another of the most significant moments in modern antitrust history. He was part of the en banc D.C. Circuit that issued the United States v. Microsoft decision—arguably the most important and influential Section 2 decision of the twenty-first century. The Microsoft decision also reflects a hallmark of Judge Ginsburg’s work —his advocacy for intellectual property rights. Judge Ginsburg has advanced the view that strong IP rights ensure incentives to compete dynamically on innovative solutions. In Microsoft, the DC Circuit declined to find that Microsoft violated § 2 by refusing to allow computer manufacturers to alter the Windows desktop interface. As the per curiam opinion put it, “a shell that automatically prevents the Windows desktop from ever being seen by the user is a drastic alteration of Microsoft’s copyrighted work, and outweighs the marginal anticompetitive effect of prohibiting the OEMs from substituting a different interface automatically upon completion of the initial boot process.”

Judge Ginsburg’s antitrust accomplishments, however, extend far beyond his career in the federal government. He is one of the foremost scholars of antitrust law. His scholarly work has shaped my thinking in numerous ways. I’ll give a few examples. Judge Ginsburg co-authored an important study comparing the efficacy of generalist courts with specialist courts when the courts have to decide competition law case. Judge Ginsburg’s nuanced study notes that specialist judges have important advantages over generalist judges—after all, antitrust law is complex and judges deciding hard antitrust cases have to understand both economics and antitrust doctrine. But Judge Ginsburg also notes that there are particular disadvantages associated with specialist courts, such as the risk of regulatory capture, where a powerful interest group may advocate for judges who serve its interests to be appointed to the court.

I found this article to be convincing and valuable—so much so that I’m now an advocate of the model of specialist antitrust tribunals that Judge Ginsburg suggested. He noted in the article that clever institutional design can ameliorate some of the disadvantages of specialist antitrust courts, and I agree. I support an Article III Court, into which generalist Article III judges with an interest in antitrust law could rotate for a number of years. Industry players wouldn’t play a role in selecting the judges most favorable to them, because the judiciary itself, through the Chief Justice of the Supreme Court, would decide who serves on the court. And judges would bring their generalist experience with them and acquire specialist training while serving on an Article III court of competition law.

Judge Ginsburg has also written perceptively about the emerging field of behavioral economics and its implications for antitrust law.[3] In short, he has been skeptical of behavioral economics. Price theory, in Judge Ginsburg’s view, made antitrust doctrine rational and predictable and the accompanying consumer welfare criterion gave courts clear standards according to which to decide cases. Behavioral economics is more open-ended and threatens to destabilize this area of law. Since the Supreme Court is searching for overarching principles to guide lower courts faced with antitrust cases, Judge Ginsburg argues that behavioral economics is unlikely to be useful to the Supreme Court.

It’s hard to disagree with Judge Ginsburg’s contention that price theory’s dominant place in antitrust doctrine is a hard-won victory for doctrinal rationality and that behavioral economics needs to be embraced only cautiously. I am, perhaps, a bit more hopeful that further research in behavioral economics can help identify irrational firm behavior and help antitrust law adjust. Judge Ginsburg’s work is an important reminder that behavioral economics cannot displace price theory as the driver of antitrust doctrine, and whatever doctrine is advanced in the future, antitrust laws should continue to be based on rational, neutral principles, just like those Judge Ginsburg has helped usher in over the years. 

Judge Ginsburg has also made antitrust law more rational and predictable through his work at the Jevons Institute for Competition Law and Economics at University College London. As a member of the Advisory Board of the Jevons Institute, Judge Ginsburg has fostered dialogue between U.S. and European practitioners of competition law. He gave an address about American antitrust law at the inaugural Jevons Antitrust Forum in 2005. His talk was a characteristically incisive empirical analysis of private antitrust actions showing that the Supreme Court’s Sylvania decision had caused a decrease in private lawsuits beginning in the late 1970’s. By starting the Antitrust Forum off on that strong note, Judge Ginsburg encouraged American and European competition authorities and judges to learn from each other and converge on substantive and procedural principles. He continues to exercise leadership in international competition enforcement, not only through the Jevons institute, but also through his work training international jurists through the Global Antitrust Institute at the Antonin Scalia Law School.        

Judge Ginsburg is also a devoted teacher. As many of you know, he has held a great number of distinguished academic positions since beginning his professional career as a professor at Harvard Law School. He is currently teaching at the Antonin Scalia Law School at George Mason University, and before that he was Distinguished Professor at NYU. His former clerks affectionately describe their time in his chambers as an educational crucible that honed their thinking and writing, preparing them to succeed in their legal careers.

More recently, Judge Ginsburg has taken his teaching role beyond the walls of the academy. He performed a valuable service by creating the fantastic PBS documentary A More or Less Perfect Union, which brought Judge Ginsburg’s insights about the wisdom of the Framers’ constitutional design to a wide audience. I strongly recommend the documentary: it’s a fascinating dialogue with judges, historians, and constitutional scholars. It shows how our framers protected liberty by creating a government of limited powers, and how, unfortunately, federal power has expanded over time, in ways that limit personal and economic freedom.

Any one of these accomplishments would make Judge Ginsburg a deserving candidate for the Sherman Award. His untiring work in all these areas has led to several careers’ worth of accomplishments. And we all are the beneficiaries of Judge Ginsburg’s brilliance, hard work, and dedication to public service. It is with gratitude and profound respect that I present the Sherman Award to Judge Ginsburg.

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Author: October 23, 2020

The Honorable Douglas H. Ginsburg Receives Justice Department’s 2020 John Sherman Award

The Antitrust Division of the Department of Justice today presented Judge Douglas H. Ginsburg with the John Sherman Award for his lifetime contributions to the development of antitrust law and the preservation of economic liberty.  The award is the Department of Justice’s highest antitrust honor. Assistant Attorney General Makan Delrahim presented the award and gave remarks celebrating Judge Ginsburg’s contributions during a ceremony displayed virtually and conducted at the Robert F. Kennedy Department of Justice Building.  Judge Ginsburg also delivered remarks in accepting the award.  

“I can think of no more deserving recipient for the Sherman Award than Judge Ginsburg,” said Assistant Attorney General Delrahim. “His career in public service and his scholarship have shaped the way that antitrust law is understood and practiced. We all are the beneficiaries of Judge Ginsburg’s brilliance, hard work, and dedication to public service.”

Created in 1994, the John Sherman Award is presented by the Justice Department’s Antitrust Division to a person or persons for outstanding contributions to the field of antitrust law, the protection of American consumers, and the preservation of economic liberty.

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Author: October 23, 2020

Justice Department Requires Waste Management To Divest Assets In Order To Proceed With Advanced Disposal Services Acquisition

The Department of Justice announced today that Waste Management, Inc. (WMI) will be required to divest 15 landfills, 37 transfer stations, 29 hauling locations, over 200 waste collection routes, and other assets in order to proceed with its $4.6 billion acquisition of Advanced Disposal Services, Inc. (ADS).  The department said that without the divestiture, the proposed acquisition would substantially lessen competition for small container commercial waste collection or municipal solid waste disposal services in over 50 local markets.

The department’s Antitrust Division filed a civil antitrust lawsuit today in the U.S. District Court for the District of Columbia to block the proposed transaction.  At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the competitive harm alleged in the department’s complaint.

“Without divestitures, this merger would have harmed competition for essential waste collection and disposal services throughout the country,” said Assistant Attorney General Makan Delrahim.  “By requiring WMI and ADS to divest numerous facilities and assets in ten states, will ensure that businesses, municipalities, and towns continue to benefit from competition for these critical services.”

According to the department’s complaint, WMI and ADS both supply small container commercial waste collection and municipal solid waste disposal services.  In each of the local markets alleged in the complaint, WMI and ADS compete vigorously against each other and are either the only two or two of only a few significant providers of one or both of these essential services.  The combination of the two companies would eliminate head-to-head competition between them and threaten the lower prices and better service that customers have realized from that competition. 

Under the terms of the proposed settlement, WMI and ADS must divest assets covering over 50 local markets including landfills, transfer stations, hauling locations, and waste collection routes to GFL Environmental Inc., or to an alternate acquirer approved by the United States.  GFL, based in Ontario, Canada, is a provider of small container commercial waste collection and MSW disposal in local markets in Canada and the Unites States.

WMI, a Delaware corporation, headquartered in Houston, Texas, had total revenues of over $15 billion in 2019. 

ADS, a Delaware corporation headquartered in Jacksonville, Florida, had total revenues of over $1.6 billion in 2019. 

As required by the Tunney Act, the proposed consent decree, along with a competitive impact statement, will be published in the Federal Register.  Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Katrina Rouse, Chief, Defense, Industrials, and Aerospace Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 8700, Washington, D.C. 20530.  At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the final judgment upon a finding that it serves the public interest.

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Author: October 23, 2020

Former U.S. Army Reservist Sentenced to 40 years in Prison for Sex Trafficking and a Related Offense

U.S. District Judge Robert J. Conrad, Jr. of the Western District of North Carolina sentenced Xaver M. Boston, 31, of Charlotte, North Carolina, today to serve 40 years in prison and 30 years of supervised release. Judge Conrad also ordered Boston to pay $354,000 in restitution and $25,000 pursuant 18 U.S.C. 3014 and the Justice for Victims of Trafficking Act of 2015. A federal jury in Charlotte previously convicted Boston on Oct. 11, 2018, of six counts of sex trafficking and one count of using an interstate facility to promote a prostitution enterprise.  

Evidence presented during the three-day trial, including the testimony of three of the four victims identified in the indictment by their initials, revealed that Boston, who served in the U.S. Army as a reserve military policeman, operated an extensive sex trafficking enterprise in the Charlotte area between 2012 and September 2017, except for a brief period when he was deployed overseas. Boston recruited young women and one teenager by promising to provide them with a place to live and heroin or other opioids. Boston then advertised the victims on Backpage.com for prostitution and collected the proceeds for his own profit.

Evidence presented at trial showed that Boston used violence to control and coerce the victims. Testimony revealed that on multiple occasions, Boston choked one victim and punched and slapped other victims.  He also used a pistol to strike one victim in the face, breaking her nose.    

“The seriousness of today’s sentence reflects the extent to which the defendant in this case used physical violence and opioids to control and exploit the young vulnerable victims of his crime,” said Assistant Attorney General Eric Dreiband for the Civil Rights Division. “The Civil Rights Division is committed to fighting human trafficking and committed to working with our federal and state partners to provide justice to the victims of this vile crime.”

“Boston used fear, coercion and violence against young women to build a depraved sex trafficking criminal enterprise, robbing his victims of the most basic standards of human dignity. I could not be more pleased with his lengthy sentence,” said U.S. Attorney Andrew Murray for the Western District of North Carolina. “My office will continue to work with our law enforcement counterparts to hold accountable those who engage in this illegal, dehumanizing trade, and partner with community organizations to ensure victims receive the support they need on their path to recovery.”

“It takes an especially heinous person to physically, psychologically, and sexually abuse someone,” said Robert R. Wells, Special Agent in Charge of the FBI Charlotte Field Office. “Xaver Boston’s victims truly believed he was there to help. There is no way of knowing the long term damage he caused to their lives, but we do know for certain he will pay with a lengthy federal prison sentence.”

The case was investigated by the FBI Charlotte, North Carolina, Field Division with assistance from the Charlotte-Mecklenburg Police Department. The case is being prosecuted by Assistant U.S. Attorney Kimlani M. Ford of the Western District of North Carolina and Special Litigation Counsel Matthew T. Grady of the Civil Rights Division’s Human Trafficking Prosecution Unit.

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Author: October 22, 2020

Husband Sentenced to 188 Months in Prison for Human Trafficking Convictions Related to Forced Labor of Foreign Nationals

The Justice Department today announced that former Stockton, California resident Satish Kartan, 46, was sentenced today to 188 months in prison for forced labor violations. In addition, U.S. District Judge Morrison C. England Jr. ordered $15,657 be paid in restitution to three victims, in part to cover their back wages and other losses.

On March 14, 2019, after an 11-day trial, a federal jury found Kartan and his wife, Sharmistha Barai, 40, guilty of conspiracy to obtain forced labor and two counts of obtaining forced labor. Kartan was also found guilty of one count of fraud in foreign labor contracting. On Oct. 2, Barai was sentenced to 15 years and eight months in prison for forced labor violations.

“The United States abolished slavery and involuntary servitude more than 150 years ago,” said Assistant Attorney General Eric Dreiband for the Justice Department’s Civil Rights Division. “Yet, inhuman forced labor and deprivations of liberty and dignity persist because human traffickers proliferate modern-day slavery, and endeavor to exploit their fellow human beings for profit and other gruesome purposes. The sentence imposed today sends a stern message that human trafficking and forced labor will not be tolerated in the United States. The defendant’s role in this scheme to compel the victims into servitude for up to 18 hours a day, with minimal pay, through intimidation, threats, and violence, is an unconscionable and illegal criminal violation of the victims’ individual rights, freedom, and dignity. The Civil Rights Division remains committed to pursuing justice relentlessly on behalf of victims of human trafficking and prosecuting perpetrators to the fullest extent of the law.”

“Kartan earned his sentence by the systematic abuse and exploitation of vulnerable women for the benefit of his wife and family,” said U.S. Attorney McGregor W. Scott for the Eastern District of California. “He verbally abused multiple victims, withheld basic sustenance from them, and physically intimidated them. Today’s sentence will send a loud message to others engaged in human trafficking and labor. Moreover, it will give Kartan’s victims the peace of mind that he will never be able to abuse them again.”

“Those engaged in the heinous crime of forced labor will face severe consequences for their actions,” said Matthew Perlman, Special Agent in Charge (SAC) of the U.S. Department of State’s Diplomatic Security Service (DSS), San Francisco Field Office. “The Diplomatic Security Service and our partner agencies will continue to aggressively pursue and prosecute those who commit visa fraud to exploit others for their own personal gain.”

“Victims of labor trafficking are often unaware of how to get help and that services are available to help them after they are recovered,” said SAC Sean Ragan of the FBI Sacramento Field Office. “The FBI is committed to working with our law enforcement partners and investigating allegations of human trafficking and to break the cycle of force, fraud, or coercion that has bound victims to their traffickers. To be successful, we need your help. Please report alleged human trafficking to law enforcement or submit a tip to tips.fbi.gov.”

“This sentencing is a success in the fight against the heinous crime of human trafficking in our region and our dedication to bring these criminals to justice,” said Tatum King, SAC, Homeland Security Investigations (HSI) for San Francisco and Northern California. “We are grateful to our law enforcement partners, especially the Stockton Police Department, Justice Department’s Civil Rights Division, the U.S. Attorney’s Office, DSS, and the FBI, for their unwavering efforts not only in this investigation, but in our continued fight to disrupt and dismantle human trafficking networks worldwide. We also are appreciative of the critical work that community-based organizations provide in bringing these heinous violations to light as well as the critical resources they provide to victims to assist in their recovery.”

According to court documents and evidence presented at trial, between February 2014 and October 2016, Kartan and Barai hired workers from overseas to perform domestic labor in their home in Stockton. In advertisements seeking workers on the internet and India-based newspapers, the defendants made false claims about the wages and conditions of employment. Once the workers arrived at the defendants’ Stockton residence, Kartan and Barai compelled them to work up to 18 hours a day with limited rest and nourishment. Few of them were paid any wage. As part of the conspiracy, the couple kept the domestic workers from leaving and coerced them to continue working by threatening them, by creating an atmosphere of fear, control, and disempowerment, and at times by physically hitting or burning them. When a victim resisted or expressed a desire to leave, the threats and abuse became worse.

This case was the product of an investigation by HSI, the FBI, and DSS. The Stockton Police Department provided the initial investigation and later assistance with victim services. Assistant U.S. Attorneys Jason Hitt and Katherine Lydon prosecuted the case with the assistance of the Civil Rights Division’s Human Trafficking Prosecution Unit.

The Eastern District of California (Sacramento) is one of six districts designated through a competitive, nationwide selection process as a Phase II Anti-Trafficking Coordination Team, through the interagency ACTeam Initiative of the Departments of Justice, Homeland Security and Labor. ACTeams focus on developing high-impact human trafficking investigations and prosecutions involving forced labor, international sex trafficking and sex trafficking by force, fraud or coercion through interagency collaboration among federal prosecutors and federal investigative agencies.

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Author: October 22, 2020

Seattle Software Developer Pleads Guilty to Wire Fraud for COVID-Relief Fraud Scheme

A Seattle man pleaded guilty today to one count of wire fraud for carrying out a scheme to defraud several COVID-19 relief programs.

Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division, U.S. Attorney Brian T. Moran of the Western District of Washington, Special Agent in Charge Weston King of the U.S. Small Business Administration Office of Inspector General’s (SBA-OIG) Western Region, Treasury Inspector General for Tax Administration (TIGTA) J. Russell George, and Special Agent in Charge Raymond Duda of the FBI’s Seattle Field Office made the announcement.

Baoke Zhang, 35, of Issaquah, Washington, pleaded guilty to one count of wire fraud before U.S. Magistrate Judge Brian A. Tsuchida of the Western District of Washington.

As part of his guilty plea, Zhang admitted that he carried out a scheme to defraud several different government and private COVID-19 relief programs intended to assist those facing financial difficulties due to the ongoing pandemic. 

Zhang admitted that he submitted four fraudulent applications to three different lenders for forgivable loans under the Paycheck Protection Program (PPP), a SBA program that provided payroll assistance to small businesses.  To support the loan applications, Zhang used fake entities for which he created fake payroll and tax records.  Two of the fraudulent loan applications sought $600,000 each, a third application sought $325,000, and a fourth sought approximately $41,000.  Zhang also submitted a fraudulent application to the SBA for an Economic Injury Disaster Loan (EIDL) in the name of one of the fake entities for which he also had applied for PPP loans.  The SBA paid Zhang a $10,000 EIDL advance before his fraud was detected.

Zhang further admitted that he submitted fraudulent applications to two non-profit organizations providing grants to restaurant workers suffering economic hardship due to the pandemic.  Zhang submitted the various applications in the names of Zhang, his wife, and his parents, falsely claiming that each were restaurant workers who had either lost their jobs or lost wages due to COVID-19.  To support the applications, Zhang created fake letters from purported restaurant owners regarding employment and fake payroll records.  In fact, neither Zhang nor his wife or parents worked in restaurants.  Zhang obtained $1,500 from one of the non-profits before his fraud was detected.

Zhang also admitted that he submitted a fraudulent application to a multinational technology company headquartered in Seattle, Washington, that was providing grants to qualifying small businesses in the Seattle area.  Zhang falsely claimed in his application that he ran a small business in a local shopping center that had suffered economically due to the pandemic.  In fact, Zhang did not own any businesses.  Zhang obtained $5,000 from the relief program before his fraud was detected.

In total, Zhang admitted to attempting to defraud the various COVID-19 relief programs of more than $550,000.

This case was investigated by the SBA-OIG, the TIGTA, and the FBI.  Trial Attorney Amanda R. Vaughn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Brian Werner of the Western District of Washington are prosecuting the case.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

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Author: October 22, 2020

Remarks As Prepared For Delivery By Katharine T. Sullivan Principal Deputy Assistant Attorney General Office Of Justice Programs At The Announcement Of Sexual Assault Nurse Examiner Grants

Good afternoon, everyone. Thank you all for joining us.

I’m Katie Sullivan, the Principal Deputy Assistant Attorney General for the Office of Justice Programs in the U.S. Department of Justice. I’m thrilled to be here today with the outstanding U.S. Attorney for the Western District of Pennsylvania, Scott Brady. I’m also very pleased to be joined by Dr. Mary Ellen Glasgow, Dean of the Duquesne School of Nursing, and Dr. Alison Colbert, Associate Professor in the Duquesne School of Nursing. You’ll hear from each of them in just a moment. I also want to introduce my wonderful colleague, Jessica Hart, the Director of the Office for Victims of Crime, which is part of my agency.

We’ve brought everyone together today to discuss a critical public safety concern – one that affects our communities and our college campuses. That’s the crime of sexual assault.

According to our Bureau of Justice Statistics, Americans 12 years and older were victims of almost 460,000 rapes or sexual assaults in 2019. Two in three went unreported to police. This means that most victims of sexual assault get neither the services they need nor the justice they deserve. We simply cannot accept this.

For college students, no less than others who endure an assault, the experience can be devastating. Like most sexual assault survivors, the majority of student victims know their assailants. This compounds trauma with a profound sense of betrayal. Even more than non-students, student victims of campus sexual assault are reluctant to report their assault. And fewer than one in five female students gets help from a victim services agency.

Which brings us to why we are here today.

Sexual assault is an appalling violation and an outrageous injustice, and our Attorney General, Bill Barr, refuses to stand by while these crimes go unpunished and victims go unserved. Under his direction, the Department of Justice is putting substantial resources into programs that help survivors get the support they need.

This includes high-quality medical forensic attention that can hasten recovery and help solve cases and bring perpetrators to justice – the kind of services offered by Sexual Assault Nurse Examiners, known as SANEs. SANEs are skilled medical professionals who can respond immediately and holistically to the needs of sexual assault victims. In the aftermath of an assault, they are there to provide comprehensive care, including that all-important forensic exam, which is so critical to building the case for prosecution.  SANEs can be a lifeline for sexual assault victims.

Today, I’m very pleased to announce that our Office for Victims of Crime is awarding almost $4 million in grants to eight institutions of higher learning to support campus SANE programs. The fabulous Duquesne School of Nursing is one of the recipients.

These grants will help develop and expand SANE services on campus in collaboration with community organizations and local victim assistance providers. Funding will help pay salaries, support training and mentoring for aspiring SANEs, buy necessary equipment and raise awareness about SANE services. The goal is to get survivors the support they need and empower them in their search for justice and healing.

I want to thank Dr. Glasgow and her team for being part of this incredible movement and for being the advocates that victims of sexual assault need. My thanks, as well, to U.S. Attorney Brady for his support of this effort and for all he does to lead the fight against sexual assault here in the Western District of Pennsylvania.

The people of Pittsburgh are fortunate to have two such compassionate, committed professionals looking out for the safety of their fellow citizens. Rest assured that the Department of Justice will continue to stand by them – and by every victim of sexual assault.

Thank you for being here today, and it’s now my pleasure to ask U.S. Attorney Brady to say a few words.

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Author: October 23, 2020

Office for Victims of Crime Awards Nearly $4 Million to Support Sexual Assault Nurse Examiner Programs

The Office of Justice Programs’ (OJP) Office for Victims of Crime (OVC) announced that it has awarded almost $4 million to support the establishment or expansion of Sexual Assault Nurse Examiner (SANE) programs that offer medical forensic care, advocacy and other victim services to sexual assault survivors on campuses of higher education. OJP Principal Deputy Assistant Attorney General Katharine T. Sullivan made the announcement during a roundtable discussion with U.S. Attorney for the Western District of Pennsylvania Scott W. Brady, OVC Director Jessica E. Hart, Dean of Duquesne University School of Nursing Mary Ellen Glasgow, and law enforcement leaders from Pittsburgh and surrounding jurisdictions.

“Victims of sexual assault deserve the best of care, including expert medical forensic attention that can help close out cases and bring perpetrators to justice,” said OJP Principal Deputy Assistant Attorney General Sullivan. “These grants will build a cadre of skilled medical professionals capable of responding immediately and holistically to the needs of sexual assault survivors. Making SANE Nurse positions available on college campus will help ensure survivors receive the trauma informed care they deserve and vital forensic evidence will be collected to ensure perpetrators are held accountable.”

“Nurses serving on the front lines of our communities are often the first to respond to and treat victims of sexual assault,” said U.S. Attorney Brady. “Far too many victims endure the physical and emotional trauma of a sexual assault only to wait long hours and have forensic exams conducted by personnel who lack the appropriate training and experience in forensic evidence collection. These SANE grants will allow our universities to create a pipeline of highly-skilled registered nurses to support victims of sexual assault and hold offenders accountable.”

This program will develop, expand or strengthen SANE services to improve the delivery of post-assault medical and advocacy services. Campuses will collaborate with victim service providers in the communities in which the institutions are located. If victim services programs are not available in the community or are not accessible to students, the institution will provide a victim services program on campus in collaboration with a community-based organization.

“Sexual assault is an appalling crime and an obscene violation of personal security and interpersonal trust,” said Director Hart. “The resources we are making available today will help institutions of higher learning bring comfort and relief to victims while widening the possibility for securing justice.”

OVC awarded $3,836,877 to eight institutions, listed below. Funds will help raise awareness and expand outreach about the SANE program and will provide more SANE services to survivors. Operational costs (including salaries and benefits for program staff), training and mentoring for aspiring and current SANEs and advocates, and equipment costs can be supported under this program. This program aims to respond to and empower sexual assault survivors while increasing perpetrator accountability.

  • University of South Alabama, Alabama
    • Total Awarded $493,244
  • Arizona Board of Regents, University of Arizona, Arizona
    • Total Awarded $499,382
  • Duquesne University, Pennsylvania
    • Total Awarded $499,391
  • The Pennsylvania State University, Pennsylvania
    • Total Awarded $500,000
  • The Spartanburg Regional Healthcare System Foundation, South Carolina
    • Total Awarded $345,926
  • Tennessee Technological University, Tennessee
    • Total Awarded $500,000
  • The University of Texas Rio Grande Valley, Texas
    • Total Awarded $499,948
  • The Board of Regents of the University of Wisconsin System, Wisconsin
    • Total Awarded $498,986

*******

The Office of Justice Programs, directed by Principal Deputy Assistant Attorney General Katharine T. Sullivan, provides federal leadership, grants, training, technical assistance and other resources to improve the nation’s capacity to prevent and reduce crime, assist victims and enhance the rule of law by strengthening the criminal and juvenile justice systems. More information about OJP and its components can be found at www.ojp.gov.

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Author: October 22, 2020

Goldman Sachs Charged in Foreign Bribery Case and Agrees to Pay Over $2.9 Billion

The Goldman Sachs Group Inc. (Goldman Sachs or the Company), a global financial institution headquartered in New York, New York, and Goldman Sachs (Malaysia) Sdn. Bhd. (GS Malaysia), its Malaysian subsidiary, have admitted to conspiring to violate the Foreign Corrupt Practices Act (FCPA) in connection with a scheme to pay over $1 billion in bribes to Malaysian and Abu Dhabi officials to obtain lucrative business for Goldman Sachs, including its role in underwriting approximately $6.5 billion in three bond deals for 1Malaysia Development Bhd. (1MDB), for which the bank earned hundreds of millions in fees.  Goldman Sachs will pay more than $2.9 billion as part of a coordinated resolution with criminal and civil authorities in the United States, the United Kingdom, Singapore, and elsewhere. 

Goldman Sachs entered into a deferred prosecution agreement with the department in connection with a criminal information filed today in the Eastern District of New York charging the Company with conspiracy to violate the anti-bribery provisions of the FCPA.  GS Malaysia pleaded guilty in the U.S. District Court for the Eastern District of New York to a one-count criminal information charging it with conspiracy to violate the anti-bribery provisions of the FCPA. 

Previously, Tim Leissner, the former Southeast Asia Chairman and participating managing director of Goldman Sachs, pleaded guilty to conspiring to launder money and to violate the FCPA.  Ng Chong Hwa, also known as “Roger Ng,” former managing director of Goldman and head of investment banking for GS Malaysia, has been charged with conspiring to launder money and to violate the FCPA.  Ng was extradited from Malaysia to face these charges and is scheduled to stand trial in March 2021.  The cases are assigned to U.S. District Judge Margo K. Brodie of the Eastern District of New York.

In addition to these criminal charges, the department has recovered, or assisted in the recovery of, in excess of $1 billion in assets for Malaysia associated with and traceable to the 1MDB money laundering and bribery scheme.   

“Goldman Sachs today accepted responsibility for its role in a conspiracy to bribe high-ranking foreign officials to obtain lucrative underwriting and other business relating to 1MDB,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division.  “Today’s resolution, which requires Goldman Sachs to admit wrongdoing and pay nearly three billion dollars in penalties, fines, and disgorgement, holds the bank accountable for this criminal scheme and demonstrates the department’s continuing commitment to combatting corruption and protecting the U.S. financial system.”

“Over a period of five years, Goldman Sachs participated in a sweeping international corruption scheme, conspiring to avail itself of more than $1.6 billion in bribes to multiple high-level government officials across several countries so that the company could reap hundreds of millions of dollars in fees, all to the detriment of the people of Malaysia and the reputation of American financial institutions operating abroad,” said Acting U.S. Attorney Seth D. DuCharme of the Eastern District of New York.  “Today’s resolution, which includes a criminal guilty plea by Goldman Sachs’ subsidiary in Malaysia, demonstrates that the department will hold accountable any institution that violates U.S. law anywhere in the world by unfairly tilting the scales through corrupt practices.”

“When government officials and business executives secretly work together behind the scenes for their own illegal benefit, and not that of their citizens and shareholders, their behavior lends credibility to the narrative that businesses don’t succeed based on the quality of their products, but rather their willingness to play dirty,” said Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office.  “Greed eventually exacts an immense cost on society, and unchecked corrupt behavior erodes trust in public institutions and government entities alike.  This case represents the largest ever penalty paid to U.S. authorities in an FCPA case.  Our investigation into the looting of funds from 1MDB remains ongoing. If anyone has information that could assist the case, call us at 1-800-CALLFBI.”

“1MDB was established to drive strategic initiatives for the long-term economic development of Malaysia. Goldman Sachs admitted today that one billion dollars of the money earmarked to help the people of Malaysia was actually diverted and used to pay bribes to Malaysian and Abu Dhabi officials to obtain their business,” said Special Agent in Charge Ryan L. Korner of IRS Criminal Investigation’s (IRS-CI) Los Angeles Field Office.  “Today’s guilty pleas demonstrate that the law applies to everyone, including large investment banks like Goldman Sachs.  IRS Criminal Investigation will work tirelessly alongside our law enforcement partners to identify and bring to justice those who engage in fraud and deceit around the globe.  When the American financial system is misused for corruption, the IRS will take notice and we will take action.”

According to Goldman’s admissions and court documents, between approximately 2009 and 2014, Goldman conspired with others to violate the FCPA by engaging in a scheme to pay more than $1.6 billion in bribes, directly and indirectly, to foreign officials in Malaysia and Abu Dhabi in order to obtain and retain business for Goldman from 1MDB, a Malaysian state-owned and state-controlled fund created to pursue investment and development projects for the economic benefit of Malaysia and its people.  Specifically, the Company admitted to engaging in the bribery scheme through certain of its employees and agents, including Leissner, Ng, and a former executive who was a participating managing director and held leadership positions in Asia (Employee 1), in exchange for lucrative business and other advantages and opportunities.  These included, among other things, securing Goldman’s role as an advisor on energy acquisitions, as underwriter on three lucrative bond deals with a total value of $6.5 billion, and a potential role in a highly anticipated and even more lucrative initial public offering for 1MDB’s energy assets.  As Goldman admitted — and as alleged in the indictment pending in the Eastern District of New York against Ng and Low — in furtherance of the scheme, Leissner, Ng, Employee 1, and others conspired to pay bribes to numerous foreign officials, including high-ranking officials in the Malaysian government, 1MDB, Abu Dhabi’s state-owned and state-controlled sovereign wealth fund, International Petroleum Investment Company (IPIC), and Abu Dhabi’s state-owned and state-controlled joint stock company, Aabar Investments PJS (Aabar). 

Goldman admitted today that, in order to effectuate the scheme, Leissner, Ng, Employee 1, and others conspired with Low Taek Jho, aka Jho Low, to promise and pay over $1.6 billion in bribes to Malaysian, 1MDB, IPIC, and Aabar officials.  The co-conspirators allegedly paid these bribes using more than $2.7 billion in funds that Low, Leissner, and other members of the conspiracy diverted and misappropriated from the bond offerings underwritten by Goldman.  Leissner, Ng and Low also retained a portion of the misappropriated funds for themselves and other co-conspirators.  Goldman admitted that, through Leissner, Ng, Employee 1 and others, the bank used Low’s connections to advance and further the bribery scheme, ultimately ensuring that 1MDB awarded Goldman a role on three bond transactions between 2012 and 2013, known internally at Goldman as “Project Magnolia,” “Project Maximus,” and “Project Catalyze.” 

Goldman also admitted that, although employees serving as part of Goldman’s control functions knew that any transaction involving Low posed a significant risk, and although they were on notice that Low was involved in the transactions, they did not take reasonable steps to ensure that Low was not involved.  Goldman further admitted that there were significant red flags raised during the due diligence process and afterward — including but not limited to Low’s involvement — that either were ignored or only nominally addressed so that the transactions would be approved and Goldman could continue to do business with 1MDB. As a result of the scheme, Goldman received approximately $606 million in fees and revenue, and increased its stature and presence in Southeast Asia.

Under the terms of the agreements, Goldman will pay a criminal penalty and disgorgement of over $2.9 billion.  Goldman also has reached separate parallel resolutions with foreign authorities in the United Kingdom, Singapore, Malaysia, and elsewhere, along with domestic authorities in the United States.  The department will credit over $1.6 billion in payments with respect to those resolutions.

The department reached this resolution with Goldman based on a number of factors, including the Company’s failure to voluntarily disclose the conduct to the department; the nature and seriousness of the offense, which included the involvement of high-level employees within the Company’s investment bank and others who ignored significant red flags; the involvement of various Goldman subsidiaries across the world; the amount of the bribes, which totaled over $1.6 billion; the number and high-level nature of the bribe recipients, which included at least 11 foreign officials, including high-ranking officials of the Malaysian government; and the significant amount of actual loss incurred by 1MDB as a result of the co-conspirators’ conduct.  Goldman received partial credit for its cooperation with the department’s investigation, but did not receive full credit for cooperation because it significantly delayed producing relevant evidence, including recorded phone calls in which the Company’s bankers, executives, and control function personnel discussed allegations of bribery and misconduct relating to the conduct in the statement of facts.  Accordingly, the total criminal penalty reflects a 10 percent reduction off the bottom of the applicable U.S. sentencing guidelines fine range. 

Low has also been indicted for conspiracy to commit money laundering and violate the FCPA, along with Ng, E.D.N.Y. Docket No. 18-CR-538 (MKB).  Low remains a fugitive.  The charges in the indictment as to Low and Ng are merely allegations, and those defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

The investigation was conducted by the FBI’s International Corruption Unit and IRS-CI.  The prosecution is being handled by the Criminal Division’s Fraud Section and the Money Laundering and Asset Recovery Section (MLARS), and the Business and Securities Fraud Section of the U.S. Attorney’s Office for the Eastern District of New York.  Trial Attorneys Katherine Nielsen, Nikhila Raj, Jennifer E. Ambuehl, Woo S. Lee, Mary Ann McCarthy, Leo Tsao, and David Last of the Criminal Division, and Assistant U.S. Attorneys Jacquelyn M. Kasulis, Alixandra Smith and Drew Rolle of the Eastern District of New York are prosecuting the case.  Additional Criminal Division Trial Attorneys and Assistant U.S. Attorneys within U.S. Attorney’s Offices for the Eastern District of New York and Central District of California have provided valuable assistance with various aspects of this investigation, including with civil and criminal forfeitures.  The Justice Department’s Office of International Affairs of the Criminal Division provided critical assistance in this case. 

The department also appreciates the significant assistance provided by the U.S. Securities and Exchange Commission; the Board of Governors of the Federal Reserve System, including the Federal Reserve Bank of New York; the New York State Department of Financial Services, the United Kingdom Financial Conduct Authority; the United Kingdom Prudential Regulation Authority; the Attorney General’s Chambers of Singapore; the Singapore Police Force-Commercial Affairs Division; the Monetary Authority of Singapore; the Office of the Attorney General and the Federal Office of Justice of Switzerland; the judicial investigating authority of the Grand Duchy of Luxembourg and the Criminal Investigation Department of the Grand-Ducal Police of Luxembourg; the Attorney General’s Chambers of Malaysia; the Royal Malaysian Police; and the Malaysian Anti-Corruption Commission.  The department also expresses its appreciation for the assistance provided by the Ministry of Justice of France; the Attorney General’s Office of the Bailiwick of Guernsey and the Guernsey Economic Crime Division.

The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal-fraud/foreign-corrupt-practices-act.

MLARS’s Bank Integrity Unit investigates and prosecutes banks and other financial institutions, including their officers, managers, and employees, whose actions threaten the integrity of the individual institution or the wider financial system.

MLARS’s Kleptocracy Asset Recovery Initiative, in partnership with federal law enforcement agencies, and often with U.S. Attorney’s Offices, seeks to forfeit the proceeds of foreign official corruption and, where appropriate, to use those recovered assets to benefit the people harmed by these acts of corruption and abuse of office.

Relevant court documents will be uploaded throughout the day and available at the following links: The Goldman Sachs Group Inc. and Goldman Sachs Sdn. Bhd.

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Author: October 22, 2020