Category Archives: Criminal Division

Straw Owner of Clinic Sentenced in Medicare Fraud Scheme

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A Florida man who had been the straw owner of a physical therapy rehabilitation facility has been sentenced to serve 30 months in prison for his role in a $28.3 million Medicare fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the Middle District of Florida A. Lee Bentley III, Special Agent in Charge Paul Wysopal of the FBI’s Tampa Field Office and Acting Special Agent in Charge Brian P. Martens of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Florida region made the announcement.
Roberto Fernandez Gonzalez, 63, formerly of southwest Florida, was sentenced by U.S. District Judge Susan C. Bucklew in the Middle District of Florida and was ordered to forfeit $446,738 and pay the same amount in restitution.   Fernandez pleaded guilty on June 24, 2013, to conspiracy to commit health care fraud.
According to court documents, Fernandez and his co-conspirators used various physical therapy clinics and other business entities throughout Florida – including Rehab Dynamics Inc. in Venice, Fla. – to submit approximately $28.3 million in fraudulent reimbursement claims to Medicare from 2005 through 2009.   Medicare paid approximately $14.4 million on those claims.
Fernandez’s co-conspirators obtained and controlled Rehab Dynamics.   They engaged in a sham sale of Rehab Dynamics to Fernandez, a Cuban immigrant with no background in the health care industry.   Fernandez did not have the money to buy Rehab Dynamics.   Instead, the co-conspirators paid Fernandez approximately $20,000 to serve as the straw owner of Rehab Dynamics from January 2008 through March 2008.   During that time, Rehab Dynamics submitted approximately $1.6 million in fraudulent claims to Medicare seeking reimbursement for rehabilitation therapy services that were not provided.   Medicare paid approximately $446,738 on those false claims.
This case is being investigated by the FBI and HHS-OIG and 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 Middle District of Florida.   This case is being prosecuted by Trial Attorneys Christopher J. Hunter and Andrew H. Warren of the Criminal Division’s Fraud Section and Assistant United States Attorney Simon A. Gaugush of the U.S. Attorney’s Office for the Middle District of Florida.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion.   In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Former Veterans Affairs Psychiatrist Sentenced for Medicare Fraud

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A licensed psychiatrist formerly employed by the Department of Veterans Affairs (VA) was sentenced today to serve 18 months in prison for falsely claiming to provide at-home services to Medicare beneficiaries.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Loretta E. Lynch of the Eastern District of New York and Special Agent in Charge Thomas O’Donnell of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.
Dr. Mikhail L. Presman, 56, of Brooklyn, N.Y., was sentenced by Judge I. Leo Glasser in the Eastern District of New York.   Presman was sentenced to serve three years of supervised release following his prison term and ordered to forfeit $1.2 million and pay restitution to Medicare.
According to court documents, from Jan. 1, 2006, through May 10, 2013, Presman submitted approximately $4 million in Medicare claims for home treatment of Medicare beneficiaries notwithstanding his full-time salaried position as a psychiatrist at the VA hospital in Brooklyn.   Presman did not provide any treatment to a substantial number of the beneficiaries he claimed to have treated.   For example, Presman submitted claims to Medicare for home medical visits at locations within New York City even though he was physically located in China at the time of these purported home visits.   Presman also submitted claims to Medicare for 55 home medical visits to beneficiaries who were hospitalized on the date of the purported visits.
The case was investigated by the HHS-OIG, with assistance from the  HHS’s Centers for Medicare & Medicaid Services,, and brought as part of the Medicare Fraud Strike Force, under the supervision of the U.S. Attorney’s Office for the Eastern District of New York and the Criminal Division’s Fraud Section.   The case was prosecuted by Trial Attorney Bryan D. Fields of the Fraud Section and Assistant United States Attorney Patricia E. Notopoulos of the Eastern District of New York.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion.   In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

Army Soldier Sentenced for Facilitating Thefts of Fuel in Afghanistan

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A U.S. Army soldier was sentenced to serve 12 months and one day in prison for his role in stealing fuel at Forward Operating Base (FOB) Fenty near Jalalabad, Afghanistan.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney David J. Hale of the Western District of Kentucky made the announcement after sentencing by U.S. District Court Judge Thomas B. Russell in the Western District of Kentucky.
According to court documents, in May and June 2010, U.S. Army Sergeant Kevin Bilal Abdullah, 40, of Clarksville, Tenn., was involved in overseeing the delivery of fuel from FOB Fenty to other military bases.    Abdullah created fraudulent documents called Transportation Movement Requests purporting to authorize the transport of fuel from FOB Fenty to other military bases, even though no legitimate fuel transportation was required.    After the trucks were filled with fuel, these fraudulent documents were used by the drivers of the fuel trucks at FOB Fenty’s departure checkpoint to justify the trucks’ departures.    In truth, the fuel was simply stolen, and  Abdullah and his co-conspirators received payment in cash from a representative of the Afghan trucking company that allegedly stole the fuel.
Abdullah pleaded guilty on Aug. 29, 2013, to receiving payments from a representative of the trucking company in exchange for facilitating the theft of fuel in approximately 25 fuel trucks.    He pleaded guilty to conspiracy to commit bribery and to the substantive count of bribery.   At sentencing, he was ordered to pay $466,250 in restitution.
Abdullah’s sentencing was the fourth conviction arising from this investigation of fuel thefts at FOB Fenty.    On Aug. 3, 2012, Jonathan Hightower, a civilian employee of a military contractor who had conspired with Abdullah and others, pleaded guilty to similar charges.    After cooperating with the government, he was sentenced on Oct. 28, 2013, to serve 27 months in prison.    On Oct.10, 2012, Christopher Weaver, another conspirator, pleaded guilty to fuel theft charges and, after cooperating with the government, was sentenced on Oct. 28, 2013, to serve 37 months in prison.    On Sept. 5, 2013, former Specialist Stephanie Charboneau pleaded guilty, and on Feb. 4, 2014, she was sentenced to serve 87 months in prison.    Weaver, Hightower and Charboneau were prosecuted in the District of Colorado.
These cases were investigated by the Special Inspector General for Afghanistan Reconstruction (SIGAR), the Department of the Army – Criminal Investigation Division, the Defense Criminal Investigative Service and the FBI.
The Abdullah case was handled by Special Trial Attorney Mark H. Dubester of the Criminal Division’s Fraud Section, on detail from SIGAR, and Assistant U.S. Attorney Michael Bennett.

Jury Convicts All Seven Defendants in $97 Million Medicare Fraud Scheme

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A federal jury in Houston today convicted two owners of a former Houston mental health care company, Spectrum Care P.A. (Spectrum), several of its employees and the owners of certain Houston group care homes for their participation in a $97 million Medicare fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Special Agent in Charge Stephen L. Morris of the FBI’s Houston Field Office and Special Agent in Charge Mike Fields of the Dallas Regional Office of HHS’s Office of Inspector General (HHS-OIG), the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU),  Special Agent in Charge Joseph J. Del Favero of the Chicago Field Office of the Railroad Retirement Board, Office of Inspector General (RRB-OIG) and Special Agent in Charge Scott Rezendes of Field Operations of the Office of Personnel Management’s Office of Inspector General (OPM-OIG) made the announcement following a  jury trial before U.S. District Judge Vanessa Gilmore in the Southern District of Texas.
Physicians Mansour Sanjar, 81, and Cyrus Sajadi, 66, the owners of Spectrum, were each convicted of conspiracy to commit health care fraud and conspiracy to pay kickbacks as well as related counts of health care fraud and paying illegal kickbacks.   Adam Main, 33, a physician’s assistant, was convicted of conspiracy to commit health care fraud and related counts of health care fraud.   Shokoufeh Hakimi, 66, administrator of Spectrum, was convicted of conspiracy to commit health care fraud, conspiracy to pay kickbacks and a related count of paying an illegal kickback.   Chandra Nunn, 35, a group home owner, was also convicted of conspiracy to commit health care fraud, conspiracy to pay and receive kickbacks and related counts of receiving illegal kickbacks.   Sharonda Holmes, 40, a patient recruiter, was convicted of conspiracy to pay and receive kickbacks and a related count of receiving an illegal kickback.   Shawn Manney, 51, a group home owner, was convicted of conspiracy to pay and receive illegal kickbacks.
According to evidence presented at trial, Sanjar and Sajadi orchestrated and executed a scheme to defraud Medicare beginning in 2006 and continuing until their arrest in December 2011.  Sanjar and Sajadi owned Spectrum, which purportedly provided partial hospitalization program (PHP) services.  A PHP is a form of intensive outpatient treatment for severe mental illness.   The Medicare beneficiaries for whom Spectrum billed Medicare for PHP services did not qualify for or need PHP services.  Sanjar, Sajadi, Main and Moore signed admission documents and progress notes certifying that patients qualified for PHP services, when in fact, the patients did not qualify for or need PHP services.  Sanjar and Sajadi also billed Medicare for PHP services when the beneficiaries were actually watching movies, coloring and playing games–activities that are not covered by Medicare.
Evidence presented at trial showed that Sanjar, Sajadi and Hakimi paid kickbacks to Nunn, Holmes, Manney and other group care home operators and patient recruiters in exchange for delivering ineligible Medicare beneficiaries to Spectrum.  In some cases, the patients received a portion of those kickbacks.   According to evidence presented at trial, Spectrum billed Medicare for approximately $97 million in services that were not medically necessary and, in some cases, werenot provided.
Sanjar, Sajadi and Nunn are scheduled to be sentenced on Sept. 8, 2014.   Main, Hakimi, Holmes and Manney are scheduled to be sentenced on Sept. 15, 2014.
The case was investigated by the FBI, HHS-OIG, Texas MFCU, RRB-OIG and OPM-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Texas.   The case is being prosecuted by Assistant Chief Laura M.K. Cordova and Trial Attorneys Jonathan T. Baum and William S.W. Chang of the Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion.   In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

French Citizen Pleads Guilty to Obstructing Criminal Investigation into Alleged Bribes Paid to Win Mining Rights in the Republic of Guinea

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Frederic Cilins, 51, a French citizen, pleaded guilty today in the Southern District of New York to obstructing a federal criminal investigation into whether a mining company paid bribes to win lucrative mining rights in the Republic of Guinea.
Mythili Raman, Acting Assistant Attorney General for the Justice Department’s Criminal Division; Preet Bharara, the U.S. Attorney for the Southern District of New York; and George Venizelos, the Assistant Director in Charge of the FBI’s New York Field Office, made the announcement.
Cilins pleaded guilty to a one-count superseding information filed today, which alleges that Cilins agreed to pay money to induce a witness to destroy, or provide to him for destruction, documents sought by the FBI.   According to the superseding information, those documents related to allegations concerning the payment of bribes to obtain mining concessions in the Simandou region of the Republic of Guinea.
According to publicly filed documents, Cilins allegedly attempted to obstruct an ongoing federal grand jury investigation concerning potential violations of the Foreign Corrupt Practices Act and laws proscribing money laundering.   Court documents state the federal grand jury was investigating whether a particular mining company and its affiliates – on whose behalf Cilins had been working – transferred into the United States funds in furtherance of a scheme to obtain and retain valuable mining concessions in the Republic of Guinea’s Simandou region.   During monitored and recorded phone calls and face-to-face meetings, Cilins allegedly agreed to pay substantial sums of money to induce a witness to the bribery scheme to turn over documents to Cilins for destruction, which Cilins knew had been requested by the FBI and needed to be produced before a federal grand jury.   Court documents also allege that Cilins sought to induce the witness to sign an affidavit containing numerous false statements regarding matters under investigation by the grand jury.
Court documents allege that the documents Cilins sought to destroy included original copies of contracts between the mining company and its affiliates and the former wife of a now-deceased Guinean government official, who at the relevant time held an office in Guinea that allowed him to influence the award of mining concessions. The contracts allegedly related to a scheme by which the mining company and its affiliates offered the wife of the Guinean official millions of dollars, which were to be distributed to the official’s wife as well as ministers or senior officials of Guinea’s government whose authority might be needed to secure the mining rights.
According to court documents, the official’s wife incorporated a company in 2008 that agreed to take all necessary steps to secure the valuable mining rights for the mining company’s subsidiary.   That same contract stipulated that $2 million was to be transferred to the official’s wife’s company and an additional sum was to be “distributed among persons of good will who may have contributed to facilitating the granting of” the valuable mining rights.   According to the complaint, in 2008, the mining company and its affiliates also agreed to give 5 percent of its ownership of particular mining areas in Guinea to the official’s wife.
The case is being investigated by the FBI.   The case is being prosecuted by Trial Attorney Tarek Helou of the Criminal Division’s Fraud Section and Assistant United States Attorney Elisha J. Kobre of the Southern District of New York.   The Justice Department’s Office of International Affairs and Office of Enforcement Operations also assisted in the investigation.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa .

Physician Pleads Guilty for Role in Detroit-Area Medicare Fraud Scheme

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A former Detroit-area physician pleaded guilty today for his role in an $11.5 million health care fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office made the announcement.
Jose Mercado-Francis, 60, formerly of Brownstown Township, Mich., pleaded guilty before U.S. District Judge Nancy G. Edmunds in the Eastern District of Michigan to one count of conspiracy to commit health care fraud.
According to court documents, Mercado-Francis admitted that, beginning in approximately September 2009 and continuing through February 2012, he held himself out as a licensed physician and purported to provide physician home services to Medicare beneficiaries, when actually his medical license had been revoked and he was not licensed to practice medicine in Michigan.
Court documents allege that Mercado-Francis operated his scheme out of a medical practice known as House Calls Physicians P.L.L.C., which was located in Allen Park, Mich., and owned by a co-conspirator.   Mercado-Francis prepared medical documentation that licensed physicians signed as if they had provided services to Medicare beneficiaries, when, in fact, they had not.   The services were then billed to Medicare as if the licensed physicians had performed them.
Court documents further allege that, between approximately May 2008 and October 2012, House Calls Physicians billed Medicare more than $11.5 million for the cost of physician home services.   Of that amount, Dr. Mercado-Francis caused the submission of approximately $1.1 million in false and fraudulent physician services claims.
At sentencing, which will be scheduled at a later date, Mercado-Francis faces a maximum penalty of 10 years in prison and a $250,000 fine.
This case is being investigated by the FBI and HHS-OIG and 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 Eastern District of Michigan.   This case is being prosecuted by Trial Attorney Matthew C. Thuesen of the Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion.   In addition, the HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Owner of Fake Michigan Psychotherapy Clinic Sentenced for Role in Medicare Fraud Scheme

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The owner of two Flint, Mich., adult day care centers was sentenced today for his leadership role in a $3.2 million Medicare fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office made the announcement.
Glenn English, 53, was sentenced by United States District Judge Victoria A. Roberts in the Eastern District of Michigan to serve 96 months in prison.   In addition to his prison term, English was sentenced to serve three years of supervised release and was ordered to pay $988,529 in restitution.
On Oct. 18, 2013, English and co-defendant Richard Hogan were found guilty by a federal jury for their roles in organizing and directing a psychotherapy fraud scheme through New Century Adult Day Program Services LLC and New Century Adult Day Treatment Inc. (together, New Century).   English was convicted of one count of conspiracy to commit health care fraud and seven counts of health care fraud, and Hogan was convicted of one count of conspiracy to commit health care fraud.
E vidence presented at trial showed that from 2009 through 2012, New Century operated  as an adult day care center that billed Medicare for psychotherapy services.   English was New Century’s owner and chief executive officer.   New Century brought in mentally disabled residents of Flint-area adult foster care (AFC) homes, as well as people seeking narcotic drugs, and used their names to bill Medicare for psychotherapy that was not provided.   English and his co-conspirators lured drug seekers to New Century with the promise that they could see a doctor there who would prescribe to them the narcotics they wanted if they signed up for the psychotherapy program.   New Century used the signatures and Medicare information of these drug seekers and AFC residents to claim that it was providing them psychotherapy, when in fact it was not.
The evidence also showed that English directed New Century employees to fabricate patient records to give the false impression that psychotherapy was being provided.   English also instructed New Century clients to pre-sign sign-in sheets for months at a time for dates they were not there, and used these signatures to claim to Medicare that these clients had been provided services.
The evidence at trial showed that in little more than two years, New Century submitted approximately $3.28 million in claims to Medicare for psychotherapy that was not provided.   Medicare paid New Century $988,529 on these claims.
This case was investigated by the FBI and HHS-OIG and 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 Eastern District of Michigan.   This case was prosecuted by Trial Attorneys William G. Kanellis and Henry P. Van Dyck of the Fraud Section, with assistance from Assistant Chief Catherine K. Dick.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion.   In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

 

New Jersey Doctor Who Provided Spa Services Pleads Guilty in Medicare Fraud Scheme

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Dr. Chang Ho Lee, 68, of Palisades Park, N.J., pleaded guilty today to health care fraud and agreed to forfeit more than $3.4 million in fraud proceeds.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Loretta Lynch of the Eastern District of New York, Assistant Director in Charge George Venizelos of the FBI’s New York Field Office  and Special Agent in Charge Thomas O’Donnell of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.
According to court documents, Lee, who is a medical doctor, and two others recruited patients by offering free lunches and recreational classes and provided them with spa services, such as massages and facials, then falsely billed Medicare for more than $13 million using those patients’ Medicare numbers.    Lee and the others billed Medicare for physical therapy, lesion removals and other services that were neither medically necessary nor provided.    The scheme took place at three clinics: URI Medical Center and Sarang Medical PC in Flushing, N.Y., and 999 Medical Clinic in Brooklyn, N.Y.    Lee received more than $3.4 million through the submission of the fraudulent claims.
Lee is scheduled to be sentenced by United States District Judge Raymond J. Dearie of the Eastern District of New York on June 13, 2014.    At sentencing, he faces a maximum sentence of 10 years in prison and approximately $3.4 million in mandatory restitution.
The case was investigated by the FBI and HHS-OIG and 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 Eastern District of New York.    The case is being prosecuted by Senior Trial Attorney Nicholas Acker and Trial Attorney Bryan D. Fields from the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion.  In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

Georgia Real Estate Investor Pleads Guilty to Bid Rigging and Fraud at Public Real Estate Foreclosure Auctions

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A Georgia real estate investor pleaded guilty today for her role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Georgia, the Department of Justice announced.

Felony charges were filed on Dec. 19, 2013, in the U.S. District Court for the Northern District of Georgia in Atlanta, against Amy James. According to court documents, from as early as Dec. 6, 2005, until at least Jan. 23, 2009, James conspired with others not to bid against one another, but instead to designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in DeKalb County, Ga.  James was also charged with a conspiracy to commit mail fraud by fraudulently acquiring title to selected DeKalb County properties sold at public auctions and making and receiving payoffs and diverting money to co-conspirators that would have gone to mortgage holders and others by holding second, private auctions open only to members of the conspiracy.  The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions.

“Today’s guilty plea is the third in the Antitrust Division’s ongoing investigation into anticompetitive behavior at real estate foreclosure auctions in the state of Georgia,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.  “The Antitrust Division remains committed to holding accountable individuals who conspire to defraud distressed homeowners and lenders in Georgia and elsewhere.”

The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain real estate offered at DeKalb County public foreclosure auctions at non-competitive prices.  When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.  According to court documents, the conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and, in some cases, the defaulting homeowner.

“Today’s guilty plea reflects the FBI’s commitment toward enforcement of federal antitrust laws that are designed to provide a level playing field among businesses and individuals as they engage in competition for commerce,” said Ricky Maxwell, Acting Special Agent in Charge of the FBI’s Atlanta Field Office.  “The FBI will continue to work with its various law enforcement partners regarding these enforcement matters and asks that the public contact their nearest FBI field office regarding such unfair and illegal business practices.”

A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fine.  A count of conspiracy to commit mail fraud carries a maximum penalty of 20 years in prison and a fine of $250,000 for individuals.  The fine may be increased to twice the gross gain the conspirators derived from the crime or twice the gross loss caused to the victims of the crime.

The investigation is being conducted by Antitrust Division attorneys in Atlanta and the FBI’s Atlanta Division, with the assistance of the Atlanta Field Office of the Housing and Urban Development Office of Inspector General and the U.S. Attorney’s Office for the Northern District of Georgia.  Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions in Georgia should contact Antitrust Division prosecutors in Atlanta at 404-331-7113, call the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258  or visit www.justice.gov/atr/contact/newcase.htm.

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

Former Virginia Subcontractor Pleads Guilty to Bribery

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Dwayne Allen Hardman, 44, of Charleston, W.V., pleaded guilty today to paying bribes to public officials.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and Dana J. Boente, Acting U.S. Attorney for the Eastern District of Virginia,  Special Agent in Charge  Robert Craig of the Defense Criminal Investigative Service   Mid-Atlantic Field Office (DCIS), Acting Executive Assistant Director Charles T. May Jr. of the Naval Criminal Investigative Service (NCIS) Atlantic Operations and  Special Agent in Charge Royce E. Curtin of the FBI’s Norfolk Field Office made the announcement after the plea was accepted by U.S. Magistrate Judge Douglas E. Miller in the Eastern District of Virginia.
Hardman was charged by criminal information on Feb. 12, 2014, with paying a bribe to public officials.   Hardman faces a maximum penalty of 15 years in prison when he is sentenced on June 6, 2014.
According to a statement of facts filed with the plea agreement, in November 2004, Hardman and another businessman established a government contracting corporation in Chesapeake, Va., to provide support to the Military Sealift Command (MSC) on various telecommunications projects.   Shortly thereafter, in early 2005, Hardman and his business partner agreed to pay cash bribes to two MSC officials in exchange for official action to steer government contracts to Hardman’s corporation.   From March 2005 and until 2007, Hardman, his business partner and others paid the MSC officials approximately $3,000 each month in cash bribes.   During this time, Hardman and his business partner withdrew approximately $144,000 in cash, which was then provided to the two MSC officials in exchange for their assistance in securing MSC contracting and subcontracting business for Hardman’s company.
According to court documents, in February 2009, Hardman left his former business and formed another government contracting company in Chesapeake with another businessman.   The two MSC officials again agreed to steer contracting work to Hardman’s new company in exchange for receiving bribes from Hardman and his new business partner.   In May 2009, Hardman and his new business partner paid each of the two MSC officials $25,000 in cash bribes.
On Feb. 12, 2014, one of the MSC officials, Kenny Toy, who was the Afloat Programs Manager for MSC’s N6 Command, Control, Communication and Computer Systems Directorate, pleaded guilty to accepting bribes in conjunction with this scheme.
This case was investigated by Special Agents of the FBI, the Naval Criminal Investigative Service, and the Defense Criminal Investigative Service.   Trial Attorney Emily Rae Woods of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Stephen W. Haynie are prosecuting the case.