Category Archives: Important Legal Filings

Owner and Operator of Miami-Based Mental Health Centers Pleads Guilty in $70 Million Health Care Fraud Scheme

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An owner, a clinical director, and a therapist pleaded guilty today for their roles in a health care fraud scheme involving three Miami-based mental health centers.

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

Santiago Borges, 51, Erik Alonso, 45, and Cristina Alonso, 43, all of Miami, pleaded guilty before U.S. District Judge Ursula Ungaro of the Southern District of Florida.  Borges pleaded guilty to conspiracy to commit health care fraud and conspiracy to defraud the United States and pay health care kickbacks.  Erik Alonso pleaded guilty to conspiracy to commit health care fraud and conspiracy to make false statements relating to health care matters.  Cristina Alonso pleaded guilty to conspiracy to commit health care fraud and conspiracy to make false statements relating to health care matters.

Borges owned the now-defunct mental health centers R&S Community Mental Health Inc. (R&S) and St. Theresa Community Mental Health Center Inc. (St. Theresa), and was an investor in New Day Community Mental Health Center LLC (New Day).  Erik Alonso was the clinical director of all three centers.  Cristina Alonso was a therapist at R&S.

R&S, St. Theresa and New Day were community mental health clinics that purported to provide intensive mental health services to Medicare beneficiaries in Miami.  In connection with their guilty pleas, the defendants admitted that, from 2008 through 2010, the clinics billed Medicare for costly partial hospitalization program (PHP) services that were not medically necessary or not provided to patients.  Borges admitted that he paid kickbacks to patient recruiters who, in exchange, referred beneficiaries to the centers.  Erik Alonso admitted that he oversaw the preparation of false patient records.  Cristina Alonso admitted that she fabricated patient records, including group therapy session notes that were used to support claims for reimbursement from Medicare.

According Borges’ plea agreement, between January 2008 and December 2010, the centers submitted more than $70 million in false and fraudulent claims to Medicare.  Medicare paid approximately $28 million on those claims.

The case is being investigated by the FBI 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 of the Southern District of Florida.  This case is being prosecuted by Trial Attorney A. Brendan Stewart of 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 over 2,300 defendants who collectively have billed the Medicare program for over $7 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.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.

Colorado Man Sentenced to Life in Prison for Kidnapping a Toddler and Producing Child Pornography

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A Colorado man was sentenced today to life in prison for kidnapping a toddler and producing child pornography, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Benjamin B. Wagner of the Eastern District of California and Special Agent in Charge Ryan L. Spradlin of ICE-HSI San Francisco Office.

Shawn McCormack, 31, of Colorado Springs, Colorado, was found guilty in April 2015 by a federal jury of four counts of sexual exploitation of a child and two counts of kidnapping.  Senior U.S. District Judge Anthony W. Ishii of the Eastern District of California presided over the trial and imposed the sentence.

“McCormack’s depraved actions in this case are the stuff of nightmares.  While posing as a trusted friend and house guest, McCormack kidnapped his hosts’ toddler child and sexually abused the child in local motels and parked cars,” said Assistant Attorney General Caldwell.  “Through tireless efforts, law enforcement was able to rescue the victim from further abuse and ensure that McCormack never again will victimize another child.”

“McCormack’s acts were both vile and heart-breaking, and they may have continued undetected for years but for the imaginative, dogged, and painstaking work of the investigators who brought him to justice,” said U.S. Attorney Wagner.  “We are gratified by the sentence McCormack received today, which is both severe and just, and while the harm that he inflicted cannot be undone, we can be assured that he will not be able to inflict further harm upon our most vulnerable.”

“The sexual exploitation of children is a heinous crime that leaves lifelong emotional scars on young victims,” said Special Agent in Charge Spradlin.  “It is our duty to protect those who cannot protect themselves.  Together with our law enforcement partners, we will continue to pursue child predators and make them accountable for their dark and monstrous deeds.”

According to evidence presented at trial, McCormack, feigning to be a friend, traveled to a couple’s residence in Bakersfield, California, and stayed as an overnight guest on multiple occasions.  During several of the overnight stays, in the middle of the night, McCormack removed the couple’s toddler from the house and sexually abused the toddler in nearby motels and other locations, and then returned the toddler to the house before the parents awoke.  The evidence demonstrated that McCormack photographed and recorded the sexual abuse and distributed the images and videos to others online, including to an undercover officer with the Toronto Police Services.  McCormack also recorded his sexual abuse of a second toddler and distributed those images as well.

The trial evidence showed that, in 2010, during forensic analysis of the computer of another individual, Homeland Security Investigations (HSI) agents in Boston, discovered images and recordings distributed by McCormack.  After the agents identified the date, time and motel room in which one of the videos had been produced, they learned that McCormack had rented that motel room on the night when the recording was created.

This case is part of an ongoing HSI-led investigation being conducted by U.S. Immigration and Customs Enforcement’s Field Offices in Bakersfield, California; Colorado Springs, Colorado; and Boston, Massachusetts; the Bakersfield Police Department; the Colorado Springs Police Department; Toronto Police Services and the FBI.  This case was prosecuted by Trial Attorney Maureen C. Cain of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorneys Patrick R. Delahunty and Megan A.S. Richards of the Eastern District of California.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice.  Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims.  For more information about Project Safe Childhood, please visit www.justice.gov/psc.

Three Japanese Auto Parts Executives Indicted for Bid-Rigging Conspiracy Involving Body Sealing Products Installed in U.S. Cars

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A federal grand jury in Covington, Kentucky, returned an indictment against one former and two current Japanese automotive executives for their alleged participation in a conspiracy to fix prices and rig bids for the sale of automotive body sealing products sold in the United States.

The indictment, filed today in the U.S. District Court of the Eastern District of Kentucky, charges Keiji Kyomoto, Mikio Katsumaru and Yuji Kuroda – all Japanese nationals – with conspiring to rig bids for and fix the prices of body sealing products sold to Honda Motor Company Ltd., Toyota Motor Corp. and certain of their subsidiaries and affiliates for installation in vehicles manufactured and sold in the United States and elsewhere.  Automotive body sealing products consist of body-side opening seals, door-side weather-stripping, glass-run channels, trunk lids and other smaller seals, which are installed in automobiles to keep the interior dry from rain and free from wind and exterior noises.

“These executives conspired for years with their competitors to fix the prices of body sealing products sold to Honda and Toyota and installed in U.S. cars,” said Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division.  “Today’s indictment is another reminder that antitrust violations are not just corporate offenses but also crimes by individuals.  The Antitrust Division will continue to vigorously prosecute executives who orchestrate their companies’ efforts to break the law.”

“The FBI is committed to aggressively investigating individuals who engage in criminal conduct that corrupts the global marketplace,” said Special Agent in Charge Howard S. Marshall of the FBI’s Louisville Division.  “We will continue our work with the Department of Justice Antitrust Division to uncover schemes aimed at creating an unfair competitive advantage by way of price fixing, bid rigging or other illegal means.”

The indictment alleges that Kyomoto, Katsumaru and Kuroda participated in the conspiracy from at least as early as September 2003 until at least October 2011.  For most of this period, Kyomoto resided in the United States and served as President of an unnamed joint venture with offices in Indiana and Michigan, which manufactured and sold automotive body sealing products.

Katsumaru, who resided in Japan, served in multiple managerial positions during the conspiracy period, including Manager of the Sales and Marketing Division, for an unnamed company based in Hiroshima, Japan, that partially owned the joint venture and also manufactured and sold automotive body sealing products.  Kuroda, who resided in Japan, served as a sales branch manager at the same Hiroshima-based company for the entirety of the charged period.

According to the indictment, Kyomoto, Katsumaru and Kuroda each instructed subordinates at their respective companies to communicate with co-conspirators at other companies in order to allocate sales of, rig bids for and fix the prices of automotive body sealing products; were aware that employees under their supervision were engaging in such communications; and condoned such communications.  The indictment further alleges that Kyomoto attended meetings in the United States with co-conspirators during which Kyomoto and the co-conspirators reached agreements regarding sales of automotive body sealing products to Honda and Toyota.  The indictment also alleges that Katsumaru and Kuroda instructed and encouraged certain employees at their company to destroy evidence of the conspiracy.  Each individual faces a maximum penalty to 10 years in prison and a $1 million criminal fine if convicted.

Today’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by the Antitrust Division’s criminal enforcement sections and the FBI.  A total of 58 individuals and 37 companies have been charged and have agreed to pay more than $2.6 billion in criminal fines.  This indictment was brought by the Antitrust Division’s Chicago Office and the FBI’s Louisville Field Office, Covington Resident Agency, with the assistance of the FBI’s International Corruption Unit and the U.S. Attorney’s Office of the Eastern District of Kentucky.  Anyone with information about anticompetitive conduct in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 888-647-3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Louisville Field Office at 502-263-6000.

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

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A Georgia real estate investor pleaded guilty today for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Fulton and DeKalb counties, Georgia.

Morris Podber admitted that he conspired with others not to bid against one another at public real estate foreclosure auctions on selected properties.  After the public foreclosure auctions, Podber admitted that he and his co-conspirators would divvy up the targeted properties in private side auctions, open only to the conspirators.  Podber admitted to conspiring to use the mail to carry out their fraud, which included making and receiving payoffs and diverting money to co-conspirators that should have gone to the mortgage holders and others.

“This is the ninth real estate investor held accountable for bid rigging at public foreclosure auctions in Georgia,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division.  “We will continue to root out anticompetitive conduct at foreclosure auctions and obtain justice for homeowners and lenders.”

According to documents filed with the court, the purpose of the conspiracies was to suppress and restrain competition and divert money to the conspirators 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.  Podber admitted to participating in a conspiracy in Fulton County from July 2005 until August 2010; and to participating in a conspiracy in DeKalb County from October 2006 to August 2011.

“Incidents of bid rigging at public real estate auctions continue to be an issue in Georgia and elsewhere in the United States, and the FBI would like to remind the public that such matters are violations of federal law,” said Special Agent in Charge J. Britt Johnson of the FBI’s Atlanta Field Office.  “The FBI will continue to work with the U.S. Department of Justice’s Antitrust Division in identifying, investigating and prosecuting those individuals engaged in such activities.”

The ongoing investigation is being conducted by the Antitrust Division’s Washington Criminal II Section, the FBI’s Atlanta Division and the U.S. Attorney’s Office of the Northern District of Georgia.  Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Washington Criminal II Section of the Antitrust Division at 202-598-4000, call the Antitrust Division’s Citizen Complaint Center at 888-647-3258 or visit www.justice.gov/atr/contact/newcase.htm.

The 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.  Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  For more information about the task force, please visit www.StopFraud.gov.

Antitrust Division Provides Guidance for an Effective Compliance Program

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On Sept 16, 2015, The Antitrust Division announced that Kayaba Industry Co. Ltd., dba KYB Corporation (KYB) had agreed to plead guilty and to pay a $62 million criminal fine for its role in a conspiracy to fix the price of shock absorbers installed in cars and motorcycles sold to U.S. consumers.  The plea agreement indicated that KYB would receive credit for instituting an effective compliance program going forward.  The Division had only recently announced that it was possible for a company to get credit for a forward-looking compliance program that change the culture of the company.  This was a big and new step for the Division so there was a great deal of curiosity as to what the company did that the Division considered credit worthy.  Yesterday, the Division filed its sentencing memorandum which gives an outline of the compliance steps that KYB took.

The first thing to note is that the government praised KYB’s cooperation, noting that it cooperated early, the CEO ordered a complete and timely internal investigation, and the company has made employees and documents available that were outside the US.  I would say that early and complete cooperation is probably the most important factor in convincing the government that there has been a change in culture.   But, in the past, that alone would not earn a company any credit for a compliance program.  In its sentencing memorandum, the Division said this about KYB’s compliance efforts:

“KYB’s compliance policy has the hallmarks of an effective compliance policy including direction from top management at the company, training, anonymous reporting, proactive monitoring and auditing, and provided for discipline of employees who violated the policy.” Case: 1:15-cr-00098-MRB Doc #: 21 Filed: 10/05/15.

These steps closely follow the US Sentencing Guidelines outline for an effective compliance and ethics program:  US Sentencing Guidelines, §8B2.1. Effective Compliance and Ethics Program.

At a recent conference, Brent Snyder indicated that more pleas with credit for compliance programs are in the works and will provide a roadmap for what the Division considers an effective compliance programs.  I wrote about that in  a recent blog post (here). [Note:  There was one other plea agreement in the Forex investigation that indicated credit for a compliance program, but that sentencing memorandum has not yet been filed.  Blog post here.]

The credit for a compliance program is a welcome development. But, the current policy raises one question in my mind.  The Division has indicated that it still will not credit “backward looking compliance programs,” that is, compliance programs that have failed.  But, what if KYB had had this compliance program in place all along, yet certain managers violated it?  In that case, the company would not have received credit for the same program?  It will be interesting to see how the Division’s approach to compliance programs evolves.

Thanks for reading.

Len Blavatnik to Pay $656,000 Civil Penalty for Violating Antitrust Premerger Notification Requirements

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The Justice Department’s Antitrust Division, at the request of the Federal Trade Commission, filed a civil antitrust lawsuit today in U.S. District Court in Washington, D.C., against Len Blavatnik for violating the premerger notification and waiting period requirements of the Hart-Scott-Rodino (HSR) Act of 1976 when he acquired voting securities of TangoMe Inc. in August 2014.  At the same time, the department filed a proposed settlement, subject to approval by the court, under which Blavatnik has agreed to pay a $656,000 civil penalty to resolve the lawsuit.

The HSR Act of 1976, an amendment to the Clayton Act, imposes notification and waiting period requirements for transactions meeting certain size thresholds so that they can undergo premerger antitrust review.  Federal courts can assess civil penalties for premerger notification violations under the HSR Act in lawsuits brought by the Department of Justice.  For a party in violation of the HSR Act, the maximum civil penalty is $16,000 per day.

Further details about this matter are described in the FTC’s press release issued today, and in the attached complaint.

Justice Department Announces BHF-Bank (Schweiz) AG Reaches Resolution under Swiss Bank Program

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The Department of Justice announced today that BHF-Bank (Schweiz) AG (BHF) has reached a resolution under the department’s Swiss Bank Program.

The Swiss Bank Program, which was announced on Aug. 29, 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States.  Swiss banks eligible to enter the program were required to advise the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts.  Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.

Under the program, banks are required to:

  • Make a complete disclosure of their cross-border activities;
  • Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;
  • Cooperate in treaty requests for account information;
  • Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;
  • Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and
  • Pay appropriate penalties.

Swiss banks meeting all of the above requirements are eligible for a non-prosecution agreement.

According to the terms of the non-prosecution agreement signed today, BHF agrees to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts and pay penalties in return for the department’s agreement not to prosecute this bank for tax-related criminal offenses.

BHF was established in 1974 as a wholly-owned Swiss subsidiary of BHF-BANK Aktiengesellschaft (BHF-BANK AG), a private bank located in Germany.  Deutsche Bank AG purchased BHF-BANK AG in 2010, and in 2014, BHF-BANK AG was sold to a consortium of investors.  BHF is headquartered in Zurich and has a branch in Geneva.  The name of the group is now BHF Kleinwort Benson Group.

BHF opened and maintained undeclared accounts for U.S. taxpayers.  It chose to continue to service U.S. customers without disclosing their identities to the Internal Revenue Service (IRS) or taking steps to ensure that clients were compliant with U.S. tax laws and without considering the impact of U.S. criminal law on that decision.

BHF offered a variety of traditional Swiss banking services that it knew could assist, and did assist, U.S. clients in the concealment of assets and income from the IRS, such as “hold mail” services, which minimized the paper trail between the U.S. clients and undeclared assets and income, and debit cards, which allowed U.S. clients to access their undeclared accounts without having to visit BHF.

In 1982, Plinius Management Limited, Zurich (Plinius), a trust company, was formed as a wholly-owned subsidiary of BHF to provide special services for wealthy clients, which included advice regarding trusts, foundations, fiduciary agreements and holding companies in order to protect assets and minimize tax liability.  Plinius had no employees, and BHF provided it with staff and infrastructure.

Plinius also assisted with referrals to establish various types of structures, including Liechtenstein Anstalten and Stiftungen, and British Virgin Islands and Panamanian entities.  Plinius did not create the structures; instead, it would contact an external trust company or law firm in Liechtenstein to set up the entity within the agreed-upon jurisdiction.  While Plinius’ relationship managers did not have access to the Forms A held by BHF that identified the beneficial owners, in some cases they were aware of the ultimate beneficial owner(s) of the accounts.  Four subsidiary-related structured accounts were established for U.S. persons, which improperly sheltered U.S. taxpayer-clients and hid their assets from the IRS.

U.S.-related accounts, including offshore structured accounts, came into BHF through its relationship managers, through external asset managers or otherwise.  For example, one account in the name of an offshore entity was referred to a BHF manager from a U.S.-based structuring lawyer prior to 2008, and transferred to BHF from another Swiss bank.  The file contained a Form W-8BEN and certification of non-U.S. persons for the offshore corporate accountholder.  BHF’s management approved opening the account even though the account also held U.S. securities.  There was no Form W-9 completed or provided to BHF for the U.S. beneficial owner.  BHF did not confirm that the U.S. beneficial owner was compliant with U.S. tax obligations.

In the fourth quarter of 2000, BHF signed a Qualified Intermediary (QI) Agreement with the IRS.  The QI regime provided a comprehensive framework for U.S. information reporting and tax withholding by a non-U.S. financial institution with respect to U.S. securities.  The QI Agreement was designed to help ensure that, with respect to U.S. securities held in an account at BHF, non-U.S. persons were subject to the proper U.S. withholding tax rates and that U.S. persons were properly paying U.S. tax.

BHF implemented a policy that every client had to sign either a Form W-9 or a Declaration of Non-U.S. Person Status, which required the customer to declare whether he or she was a U.S. person for tax purposes.  Some U.S. clients who did not want to have their identities disclosed to the IRS could avoid detection by declining U.S. securities.  Approximately five clients refused to sign a Form W-9, but BHF nevertheless continued to service these clients’ accounts and kept them open.

While participating in the Swiss Bank Program, BHF encouraged existing and prior accountholders and beneficial owners of U.S.-related accounts to provide evidence of tax compliance or of participation in any of the IRS Offshore Voluntary Disclosure Programs or Initiatives or to disclose their accounts to the IRS through such a program.  BHF sought waivers of Swiss bank secrecy from all accountholders and obtained waivers for more than 50 percent of its accounts.  BHF has also provided certain account information related to U.S. taxpayers that will enable the government to make requests under the 1996 Convention between the United States of America and the Swiss Confederation for the Avoidance of Double Taxation with respect to Taxes on Income for, among other things, the identities of U.S. accountholders.

Since Aug. 1, 2008, BHF held a total of 125 U.S.-related accounts, comprising total assets under management of approximately $202,964,006.  BHF will pay a penalty of $1.768 million.

While U.S. accountholders at BHF who have not yet declared their accounts to the IRS may still be eligible to participate in the IRS Offshore Voluntary Disclosure Program, the price of such disclosure has increased.

Most U.S. taxpayers who enter the IRS Offshore Voluntary Disclosure Program to resolve undeclared offshore accounts will pay a penalty equal to 27.5 percent of the high value of the accounts.  On Aug. 4, 2014, the IRS increased the penalty to 50 percent if, at the time the taxpayer initiated their disclosure, either a foreign financial institution at which the taxpayer had an account or a facilitator who helped the taxpayer establish or maintain an offshore arrangement had been publicly identified as being under investigation, the recipient of a John Doe summons or cooperating with a government investigation, including the execution of a deferred prosecution agreement or non-prosecution agreement.  With today’s announcement of this non-prosecution agreement, noncompliant U.S. accountholders at BHF must now pay that 50 percent penalty to the IRS if they wish to enter the IRS Offshore Voluntary Disclosure Program.

Acting Assistant Attorney General Ciraolo thanked the IRS, and in particular, IRS-Criminal Investigation and the IRS Large Business & International Division for their substantial assistance.  Ciraolo also thanked Charles M. Duffy, who served as counsel on this matter, as well as Senior Counsel for International Tax Matters and Coordinator of the Swiss Bank Program Thomas J. Sawyer, Attorney Kimberle E. Dodd and Senior Litigation Counsel Nanette L. Davis of the Tax Division.

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

Medical Biller Sentenced to 45 Months in Prison for Role in $4 Million Health Care Fraud Scheme

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The medical biller of a Chicago-area visiting physician practice was sentenced today to 45 months in prison for her role in a $4 million health care fraud scheme.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Zachary T. Fardon of the Northern District of Illinois, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG) in Chicago and Acting Special Agent in Charge John A. Brown of the FBI’s Chicago Division made the announcement.

Mary Talaga, 54, of Elmwood Park, Illinois, was convicted in May 2015 following a jury trial of one count of conspiracy to commit health care fraud, six counts of health care fraud and three counts of false statements relating to a health care matter.  In addition to imposing the prison term, U.S. District Judge Gary Feinerman of the Northern District of Illinois ordered Talaga to pay approximately $1 million in restitution.

From 2007 to 2011, Talaga was the primary medical biller at Medicall Physicians Group Ltd., a physician practice that visited patients in their homes and prescribed home health care.  The evidence at trial showed that Talaga and her co-conspirators routinely billed Medicare for overseeing patient care plans (a service known as “care plan oversight” or CPO) when, in fact, the doctors at Medicall rarely provided the service.  The evidence at trial also showed that Talaga and her co-conspirators billed Medicare for other services that were never provided, including services rendered to patients who were deceased, services purportedly provided by medical professionals no longer employed by Medicall, and services purportedly provided by medical professionals who, based on billing records, worked over 24 hours per day.

According to the evidence presented at trial, during the five-year conspiracy, Medicall submitted bills to Medicare for more than $4 million in services that were never provided.  Medicare paid more than $1 million on those claims.

Rick Brown, 58, of Rockford, Illinois, and Roger A. Lucero, 64, of Elmhurst, Illinois, were also convicted of offenses based on their roles in the scheme.  Brown was convicted along with Talaga at trial and was previously sentenced to serve more than seven years in prison.  Lucero, Medicall’s Medical Director, pleaded guilty and will be sentenced at a later date.

The case was investigated jointly by HHS-OIG and the FBI, 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 of the Northern District of Illinois.  This case was prosecuted by Trial Attorney Brooke Harper and Senior Trial Attorney Jon Juenger of 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 over 2,300 defendants who collectively have billed the Medicare program for over $7 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.

Justice Department and Chinese Ministry of Public Security Coordinate Efforts to Combat International Drug Trafficking

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This week, law enforcement officials from the United States and the People’s Republic of China met in Beijing to coordinate their efforts to fight international drug trafficking.

Representatives of the two sides held two separate but related meetings to exchange law enforcement information, share their assessments of the drug problem, discuss responses in their respective countries, review progress and examine possible mechanisms for further cooperation.  In doing so, the two countries expanded their understanding of the differences in their legal systems, investigative practices and national situations.

The Bilateral Drug Intelligence Working Group, led by officials from the U.S. Drug Enforcement Administration and the Chinese Ministry of Public Security, met on Sept. 14-15, 2015.  Primarily an exchange mechanism for law enforcement information, the Bilateral Drug Intelligence Working Group conducted briefings on the major drug issues faced by each country.

The Counternarcotics Working Group, led by the Department of Justice and Chinese Ministry of Public Security, met on Sept. 16-17, 2015.  This group, which reports to the Joint Liaison Group on law enforcement cooperation, focuses on expanding mutual understanding and cooperation on drug issues.  In this meeting, among other issues, the sides discussed the legal and regulatory challenges posed by “designer drugs” – also known as new psychoactive substances – as well as potential avenues for cooperation in investigating and combating this emerging threat.

Going forward, law enforcement exchange and cooperation mechanisms such as these will facilitate more effective cooperation between the two countries in confronting their shared problem of drug trafficking and abuse.

Former Navy Noncommissioned Officer Pleads Guilty to Accepting Bribes While Serving in Afghanistan

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A former Navy noncommissioned officer pleaded guilty today to accepting approximately $25,000 in cash bribes from vendors while he served in Afghanistan.

The announcement was made by Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Christopher P. Canova of the Northern District of Florida, Assistant Director in Charge Paul M. Abbate of the FBI’s Washington, D.C., Field Office, Special Inspector General for Afghanistan Reconstruction (SIGAR) John F. Sopko, Director Frank Robey of the Major Procurement Fraud Unit of the U.S. Army Criminal Investigation Command (Army CID), Acting Special Agent in Charge Paul Sternal of the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office and Brigadier General Keith M. Givens of the Air Force Office of Special Investigations (Air Force OSI).

Donald P. Bunch, 46, of Pace, Florida, pleaded guilty before Senior U.S. District Judge Roger Vinson of the Northern District of Florida to a one-count information charging him with accepting bribes.  Sentencing is scheduled to take place on Dec. 8, 2015.

From February to August 2009, Bunch worked as an U.S. Navy E8 senior chief at the Humanitarian Assistance Yard (HA Yard) at Bagram Airfield in Afghanistan.  The HA Yard purchased supplies from local Afghan vendors for use as part of the Commander’s Emergency Response Program, which enabled U.S. military commanders to respond to urgent humanitarian relief requirements in Afghanistan.

Bunch was responsible for replenishing food and supplies such as rice, beans and clothing at the HA Yard, and for selecting vendors from a pre-determined list to provide the necessary items.  In connection with his guilty plea, Bunch admitted that he had been instructed by his predecessor to rotate among the vendors.

According to admissions made in connection with his plea agreement, certain Afghan vendors offered, and Bunch accepted, money for the purpose of influencing his selection of vendors.  Bunch admitted that he received a total of approximately $25,000 from the vendors and that, as a result, he secured on their behalf more frequent and lucrative contracts.  Bunch also admitted that he sent greeting cards stuffed with proceeds of the bribes to his wife at their residence in Florida, and that they used the money to pay for the construction of a new home.

This case was investigated by the FBI, SIGAR, Army CID, DCIS and Air Force OSI.  This case is being prosecuted by Trial Attorney Daniel P. Butler of the Criminal Division’s Fraud Section and Assistant U.S. Attorney David L. Goldberg of the Northern District of Florida.