Category Archives: USAO

TOYODA GOSEI CO. LTD. AGREES TO PLEAD GUILTY FOR FIXING PRICES AND RIGGING BIDS ON AUTOMOBILE PARTS INSTALLED IN U.S. CARS

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WASHINGTON — Toyoda Gosei Co. Ltd., an automotive parts manufacturer based in Aichi, Japan, has agreed to plead guilty and to pay a $26 million criminal fine for its role in conspiracies to fix prices and rig bids for automotive hoses, airbags and steering wheels sold to automobile manufacturers, the Department of Justice announced today.

According to a two-count felony charge filed today in the U.S. District Court for the Northern District of Ohio in Toledo, Toyoda Gosei conspired to fix the prices of certain automotive hoses sold to Toyota Motor Corp. and certain of its subsidiaries, affiliates and suppliers (collectively Toyota), in the United States; and conspired to fix the prices of automotive airbags and steering wheels sold to Toyota and Fuji Heavy Industries Ltd. and certain of its subsidiaries, affiliates and suppliers, and certain of their subsidiaries, affiliates and suppliers (collectively Subaru), in the United States and elsewhere. In addition to the criminal fine, Toyoda Gosei has agreed to cooperate in the department’s ongoing investigation.  The plea agreement will be subject to court approval.

“When purchasing an automobile, American consumers should feel confident that the sticker price is based on fair market costs to manufacture the vehicle,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program.  “The Antitrust Division will continue to prosecute cases in the auto parts industry to ensure fair and competitive prices are maintained.”

Toyoda Gosei and its co–conspirators, according to the charges, conspired through meetings and conversations in which they discussed and agreed upon bids and price quotations to be submitted to certain automakers and to allocate the supply of the products to those automakers.  In furtherance of the agreements, Toyoda Gosei sold certain automotive hoses at noncompetitive prices to Toyota in the United States, and sold airbags and steering wheels at noncompetitive prices to Toyota and Subaru in the United States and elsewhere.  Toyoda Gosei’s involvement in the automotive hoses conspiracy lasted from at least as early as February 2004 until at least September 2010 and its involvement in the automotive airbags and steering wheels conspiracy lasted from at least as early as September 2003 until at least September 2010.

Toyoda Gosei manufactures and sells a variety of automotive parts, including certain automotive hoses, airbags and steering wheels. The charges against Toyoda Gosei are the latest in the department’s ongoing investigation into anticompetitive conduct in the automotive parts industry. These are the first charges filed relating to automotive hoses sold to automobile manufacturers.

To date, 43 individuals have been charged in the government’s ongoing investigation into price fixing and bid rigging in the auto parts industry.  Twenty-nine companies, including Toyoda Gosei, have pleaded guilty or agreed to plead guilty and have agreed to pay a total of nearly $2.4 billion in fines.

Toyoda Gosei is charged with price fixing and bid rigging in violation of the Sherman Act, which carries a maximum penalty for corporations of $100 million for each violation.  The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

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.  Today’s charge was brought by the Antitrust Division’s Chicago Office and the FBI’s Cleveland Field Office, Lima Resident Agency, with the assistance of the FBI headquarters’ International Corruption Unit and the U.S. Attorney’s Office for the Northern District of Ohio.  Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647–3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Cleveland Field Office at 216-522-1400.

 

Army Sergeant Pleads Guilty for Scheme to Defraud the Military

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An Army sergeant pleaded guilty today to bribery and conspiracy to defraud the government for his role in a scheme to steal more than one million gallons of fuel from the U.S. military for resale on the black market in Afghanistan.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Thomas G. Walker of the Eastern District of North Carolina, Special Agent in Charge John F. Khin of the Defense Criminal Investigative Service (DCIS) Southeast Field Office, Special Agent in Charge John A. Strong of the FBI’s Charlotte Division, Director Frank Robey of the U.S. Army Criminal Investigation Command (CID) Major Procurement Fraud Unit (MPFU) and Special Inspector General for Afghanistan Reconstruction John F. Sopko made the announcement.

Christopher Ciampa, 32, of Lillington, North Carolina, entered his guilty plea before U.S. District Court Judge Terrence W. Boyle of the Eastern District of North Carolina.  The sentencing hearing was scheduled for the week of December 15, 2014.

“Sergeant Ciampa took bribes to help steal millions of dollars’ worth of fuel meant to support U.S. military operations in Afghanistan,” said Assistant Attorney General Caldwell.  “His greed put his fellow soldiers at greater risk, and his actions stand in stark contrast to the integrity and sacrifice demonstrated every day by the men and women of our Armed Forces.”

“The DCIS, with our investigative partners, continues to aggressively pursue those who deprive the Department of Defense of much needed resources, such as fuel, critical to accomplishing its global missions,” said DCIS Special Agent in Charge Khin.  “Corruption and theft in a combat environment, especially on such a large scale, degrade the effectiveness of the U.S. armed forces, and increases the danger to our warfighters by diverting those resources to our enemies

“Sergeant Christopher Ciampa betrayed his unit and nation for personal profit by entering into illegal relationships in order to personally profit from the sale and transport of fuel valued at millions of dollars,” said FBI Special Agent in Charge Strong.  “These actions, especially in a wartime environment, damage the reputation of all soldiers and impede the success of coalition war efforts.  Those who put the reputation and lives of their fellow servicemen and women at risk will be aggressively pursued by the FBI and our military partners dedicated to upholding justice.”

“Our highly-trained special agents are experts in fraud investigations and untangling webs of lies and deceit,” said CID MPFU Director Robey.  “Whether an individual is in or out of uniform, it makes no difference, we will do everything in our investigative power to see those who defraud the Army brought to justice.”

“The crimes alleged in this case are serious and describe actions that undermine our mission in Afghanistan,” said Special Inspector General Sopko.  “SIGAR will continue to work tirelessly to protect the American taxpayers’ hard earned money and bring the full weight of the justice system to bear on anyone who seeks to rob the U.S. government.”

According to his plea agreement, Ciampa was deployed to Afghanistan with the 3rd Special Forces Group Service Detachment and was assigned to Camp Brown at Kandahar Air Field between February 2011 and January 2012.  During the deployment, one of Ciampa’s chief responsibilities was management of the Transportation Movement Requests (TMRs) for fuel and other items in support of military units in Afghanistan paid for by the U.S. government.

Over the course of the conspiracy, Ciampa and others created and submitted false TMRs for the purchase of thousands of gallons of fuel that were neither necessary nor used by military units.  Instead, Ciampa and his co-conspirators stole the fuel and resold it on the black market in neighboring towns.  Between February 2011 and December 2011, they created false TMRs for 114 large fuel tanker trucks, which could each carry approximately 10,000 gallons of fuel.  All of the TMRs were awarded to a single Afghan trucking company, despite significantly higher rates charged by this company.

As a result of the criminal conduct, the United States suffered a total loss of $10,812,000.  The loss resulted from stolen fuel and payments on the fraudulent TMRs in the following amounts: $9,120,000 in lost fuel and $1,692,000 in fraudulent TMRs for the 114 large tanker trucks.

Ciampa admitted that he and his co-conspirators sent some of the illicit proceeds back to the United States via wire transfer and carried some of the cash in their luggage, and Ciampa hid $180,000 of stolen funds inside stereo equipment that he shipped back to North Carolina with his unit’s gear.  He used his share of the proceeds from the scheme to purchase a truck and other personal items.

The case was investigated by DCIS, FBI, CID MPFU and the Special Inspector General for Afghanistan Reconstruction (SIGAR).  The case is being prosecuted by Trial Attorney Wade Weems on detail to the Criminal Division’s Fraud Section from SIGAR and Assistant U.S. Attorney Banumathi Rangarajan of the Eastern District of North Carolina.

Owner of Home Health Care Company Sentenced to Nearly Six Years in Prison for Role in $6 Million Medicare Fraud Scheme

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A co-owner of Professional Medical Home Health LLC was sentenced today to serve 70 months in prison and ordered to pay $6.2 million in restitution for her participation in a health care fraud scheme involving the now defunct home health care company .
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 Field Office, and Acting Special Agent in Charge Reginald France of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami Office made the announcement.    U.S. District Judge Federico A. Moreno of the Southern District of Florida imposed the sentence.
According to court documents, Annarella Garcia, 44, of Hialeah, Florida, was a co-owner of Professional Medical Home Health, a Miami home health care agency that purported to provide home health and therapy services to Medicare beneficiaries.    Between December 2008 and February 2014, Garcia and others engaged in a scheme to bill the Medicare Program for expensive physical therapy and home health care services that were not medically necessary or were not provided.    During that time, Professional Medical Home Health was paid approximately $6.25 million by Medicare for the fraudulent claims.
Specifically, Garcia and her co-conspirators paid kickbacks and bribes to patient recruiters in return for their providing patients to Professional Medical Home Health for home health and therapy services that were not medically necessary or were not provided.    In furtherance of the scheme, Garcia and her co-conspirators falsified patient documentation to make it appear that beneficiaries qualified for and received home health care services, when, in fact, many of the beneficiaries did not actually qualify for such services and did not receive such services.
Garcia pleaded guilty to conspiracy to commit health care fraud on June 25, 2014.
The 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 Southern District of Florida.    This case is being prosecuted by Trial Attorneys A. Brendan Stewart and Anne P. McNamara 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 nearly 1,900 defendants who have collectively billed the Medicare program for more than $6 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.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .

 

Louisiana Psychiatrist Sentenced to Serve More Than Seven Years in Prison for His Role in $258 Million Medicare Fraud Scheme

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A Louisiana psychiatrist was sentenced in federal court in Baton Rouge, Louisiana, today to serve 86 months in prison for his role in a $258.5 million Medicare fraud scheme involving partial hospitalization psychiatric services.    He was further ordered to pay $43.5 million in restitution and to forfeit all proceeds from the fraudulent scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney J. Walter Green of the Middle District of Louisiana, Special Agent in Charge Mike Fields of the Dallas Region of the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG), Special Agent in Charge Michael Anderson of the FBI’s New Orleans Division and Louisiana State Attorney General James D. “Buddy” Caldwell made the announcement.    Chief U.S. District Court Judge Brian A. Jackson of the Middle District of Louisiana imposed the sentence.
According to documents filed in the case, Zahid Imran, M.D., 56, of Baton Rouge, served as the medical director of Shifa Community Mental Health Center of Baton Rouge, and co-owned Serenity Center of Baton Rouge and Shifa Community Mental Health Center of Texas.    As part of the scheme, Imran admitted mentally ill patients to the facilities, some of whom were inappropriate for partial hospitalization, and then re-certified the patients’ appropriateness for the program in an effort to continue to bill Medicare for services.   To support the fraudulent Medicare billing, Imran and others falsified patient treatment records to reflect services on dates when no such services were provided.    Imran pleaded guilty on May 13, 2014, to conspiracy to commit health care fraud.
Law enforcement’s 2011 investigation into the three community mental health centers has resulted in 17 convictions of individuals employed by the facilities, including therapists, marketers, administrators, owners and the medical director.    The companies billed Medicare for partial hospitalization program services for the mentally ill that were unnecessary or never provided over a period of approximately seven years.    The companies, collectively, submitted more than $258 million in claims to Medicare during this period.   Medicare paid approximately $43.5 million on those claims.
The case is being investigated by HHS-OIG, the FBI and the Medicaid Fraud Control Unit of the Louisiana Attorney General’s Office, 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 Louisiana.    The case is being prosecuted by Trial Attorneys Abigail Taylor and Dustin M. Davis of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Shubhra Shivpuri of the Middle District of Louisiana.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 1,900 defendants who have collectively billed the Medicare program for more than $6 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.

Co-Founder of Government Contracting Company Pleads Guilty to Bribery

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Timothy S. Miller, 58, a co-founder of a Chesapeake, Virginia, government contracting company, pleaded guilty today to bribing two public officials working for the United States Navy Military Sealift Command.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, United States Attorney Dana J. Boente of the Eastern District of Virginia, Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office, Special Agent in Charge Susan Triesch of the Naval Criminal Investigative Service (NCIS) Norfolk Field Office, and Special Agent in Charge Royce E. Curtin of the FBI Norfolk Field Office made the announcement today after Miller’s guilty plea was accepted by United States Magistrate Judge Lawrence R. Leonard of the Eastern District of Virginia.

According to a statement of facts filed with the plea agreement, in February 2009, Miller, along with his business partner, Dwayne A. Hardman, co-founded a government contracting company that provided telecommunications support to the Military Sealift Command, which is the leading provider of transportation for the U.S. Navy.

At the plea hearing, Miller admitted that he bribed two officials at the Military Sealift Command for favorable official acts.    In particular, he admitted that on May 12, 2009, he gave $30,000 in cash to Kenny E. Toy, the former Afloat Programs Manager for the Military Sealift Command’s N6 Command, Control, Communication, and Computer Systems Directorate, and Scott B. Miserendino Sr., a government contractor who worked with Toy at the Military Sealift Command Headquarters.    He also admitted that just two days after giving Toy and Miserendino the $30,000, he agreed that Hardman should give Toy and Miserendino an additional $20,000.

According to Miller’s statement of facts, Toy exercised substantial influence over the Military Sealift Command contracting process by creating and executing multi-million dollar budgets, obtaining funding for projects, developing and having access to sensitive information, and requesting that subcontract work be awarded to particular companies.   As a result of the $50,000 payment, Miserendino and Toy performed various official acts to assist Miller’s company.    Indeed, in 2009, Miller’s company received approximately $2.5 million in business from the Military Sealift Command.

As a condition of his plea agreement, Miller has agreed to forfeit $167,000.    Miller is scheduled to be sentenced on November 7, 2014.

Earlier this year, five other individuals pleaded guilty in connection with the bribery scheme.    On February 12, 2014, Toy pleaded guilty to bribery, and he was sentenced on July 29, 2014, to serve 96 months in prison and ordered to forfeit $100,000.    On February 18, 2014, Hardman pleaded guilty to bribery, and he was sentenced on July 9, 2014, to serve 96 months in prison and ordered to forfeit $144,000.    On February 19, 2014, Michael P. McPhail pleaded guilty to conspiracy to commit bribery, and he was sentenced on August 5, 2014, to serve 36 months in prison and ordered to forfeit $57,000.    On March 5, 2014, Roderic J. Smith pleaded guilty to conspiracy to commit bribery, and he was sentenced on June 23, 2014, to serve 48 months in prison and ordered to forfeit $175,000.    On April 4, 2014, Adam C. White pleaded guilty to conspiracy to commit bribery, and he was sentenced on July 11, 2014, to serve 24 months in prison and ordered to forfeit $57,000.

The case was investigated by the FBI, NCIS and DCIS.    The case was prosecuted by Trial Attorney Emily Rae Woods of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Stephen W. Haynie of the Eastern District of Virginia.

Director of Nursing Pleads Guilty in Miami for Role in $7 Million Health Care Fraud Scheme

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A former director of nursing pleaded guilty today in connection with a health care fraud scheme involving Anna Nursing Services Corp. (Anna Nursing), a defunct home health care company in Miami.
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 Field Office, and Acting Special Agent in Charge Ryan Lynch of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami office made the announcement.
Armando Buchillon, 42, of Hialeah, Florida, pleaded guilty before U.S. District Judge Joan A. Lenard in the Southern District of Florida to one count of conspiracy to commit health care fraud.    Sentencing is scheduled for Oct. 6, 2014, before Judge Lenard.
According to court documents, Buchillon was a director of nursing at Anna Nursing, a Miami home health care agency that purported to provide home health and therapy services to Medicare beneficiaries.    The owners and operators of Anna Nursing agreed to and actually did operate Anna Nursing for the purpose of billing the Medicare Program for, among other things, expensive physical therapy and home health care services that were not medically necessary and/or were not provided.
As part of the fraudulent scheme, Buchillon and his co-conspirators regularly falsified patient documentation in order to make it appear that beneficiaries qualified for and received home health care services, when, in fact, many of the beneficiaries did not actually qualify for or receive such services.    In addition, Buchillon paid kickbacks and bribes to patient recruiters, in return for the recruiters providing patients to Anna Nursing for home health care and therapy services that were medically unnecessary and/or were not provided.    Buchillon also worked as a patient recruiter for Anna Nursing and was paid kickbacks and bribes by the owner of Anna Nursing.    Buchillon and his co-conspirators caused the submission of false and fraudulent claims to Medicare on behalf of these beneficiaries.
From approximately October 2010 through approximately April 2013, Anna Nursing was paid by Medicare approximately $7 million for fraudulent claims for home health care services that were medically unnecessary and/or were not provided.
The 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 Southern District of Florida.    This case is being prosecuted by Trial Attorneys A. Brendan Stewart and Anne P. McNamara 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 nearly 1,900 defendants who have collectively billed the Medicare program for more than $6 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.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .

 

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Former U.S. Navy Military Sealift Command Manager Sentenced for Receiving Bribes

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Kenny E. Toy, 54, the former Afloat Programs Manager at the United States Navy Military Sealift Command, was sentenced today to serve 96 months in prison for receiving bribes.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, United States Attorney Dana J. Boente of the Eastern District of Virginia, Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office, 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 today after sentencing by United States Chief Judge Rebecca Beach Smith of the Eastern District of Virginia.

On Feb. 12, 2014, Toy pleaded guilty to a criminal information charging him with one count of bribery.   According to the statement of facts filed with Toy’s plea agreement, Toy was employed as the Afloat Programs Manager in the N6 Command, Control, Communication, and Computer Systems Directorate at the Military Sealift Command, which is the leading provider of transportation for the United States Navy.  In approximately November 2004, Toy joined an extensive bribery conspiracy that spanned five years, involved multiple co-conspirators, including two different companies, and resulted in the payment of more than $265,000 in cash bribes, among other things of value, to Toy and to Scott B. Miserendino Sr., a former government contractor who performed work for the Military Sealift Command.

At his plea hearing, Toy admitted that he accepted monthly cash bribes of approximately $3,000, as well as a flat screen television and a paid vacation to the Outer Banks in North Carolina, from co-conspirators Dwayne A. Hardman, Roderic J. Smith, Michael P. McPhail and Adam C. White, all of whom were employed at a government contracting company referred to as Company A in court documents.  Toy also admitted that he accepted a $50,000 cash bribe in May 2009 from Hardman and another co-conspirator, Timothy S. Miller, both of whom were employed at a government contracting company referred to as Company B in court documents.  In exchange for the bribes, Toy provided favorable treatment to Company A and Company B in connection with Military Sealift Command related business.

As part of his guilty plea, Toy also admitted to engaging in a scheme to conceal his criminal activity.  Toy admitted to causing more than $88,000 to be paid to Hardman in an attempt to prevent Hardman from reporting the bribery scheme to law enforcement authorities.

Toy was also ordered to serve a supervised release term of three years following his prison sentence, and ordered to forfeit $100,000.

Earlier this year, four other individuals pleaded guilty in connection with the bribery scheme.  On Feb. 18, 2014, Hardman, the co-founder of Company A and Company B, pleaded guilty to providing bribes to Toy and Miserendino.   On Feb. 19, 2014, McPhail, a former employee at Company A, pleaded guilty to conspiracy to commit bribery.   On April 4, 2014, White, a former vice president at Company A, pleaded guilty to conspiracy to commit bribery.   On March 5, 2014, Smith, the former president of Company A, pleaded guilty to conspiracy to bribe public officials.   On June 23, 2014, United States District Judge Henry Coke Morgan sentenced Smith to serve 48 months in prison followed by one year of supervised release and ordered him to forfeit $175,000.

On May 23, 2014, a grand jury in the Eastern District of Virginia indicted Miserendino and Timothy S. Miller, a businessman whose company sought contracting business from the Military Sealift Command.   The indictment charges Miserendino with one count of conspiracy to commit bribery, one count of bribery, one count of conspiracy to commit obstruction of criminal investigations and to commit tampering with a witness, and one count of obstruction of criminal investigations.   The indictment charges Miller with one count of conspiracy to commit bribery and two counts of bribery.   Trial is set for Sept. 30, 2014, before Chief Judge Rebecca Beach Smith.

Charges contained in an indictment are merely allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

The case was investigated by the FBI, NCIS and DCIS.   The case was prosecuted by Trial Attorney Emily Rae Woods of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Stephen W. Haynie of the Eastern District of Virginia.

Iraq Extradites Fugitive Defense Contractor to U.S. to Face Fraud Charges

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A Las Vegas-based former Department of Defense contractor has been extradited from Iraq to the United States to face fraud and conspiracy charges for attempting to bribe U.S. officials in order to secure government contracts for his companies.   Metin Atilan, 54, is the first person extradited from Iraq to the United States pursuant to the U.S.-Iraq extradition treaty signed on June 7, 1934 and entered into force in 1936.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Carter M. Stewart of the Southern District of Ohio, Special Agent in Charge Kevin Cornelius of the FBI’s Cincinnati Office and Resident Agent in Charge Bret Flinn of the Defense Criminal Investigation Service (DCIS) made the announcement.
“This historic extradition from Iraq to the United States is an example of our cooperation with law enforcement worldwide to bring fugitives to justice,” said Assistant Attorney General Caldwell.  “Atilan’s return to the United States, after more than six years on the run, sends a clear message to fugitives: no matter where in the world you try to hide, we will find you, and we will prosecute you.”
“ This case is a tremendous example of a successfully organized and cooperative law enforcement effort put forth by the FBI, DCIS, Interpol and the Iraqi government,” said Special Agent in Charge Cornelius.  “I commend the work of the FBI’s Legal Attaché  Office and the U.S. Embassy Country Team in Iraq. They have garnered a superior level of law enforcement cooperation between the FBI and Iraqi officials. Without their support, this extradition would not have been possible.”
Atilan, a dual U.S. and Turkish citizen, is scheduled to appear today before U.S. Magistrate Judge Michael R. Merz of the Southern District of Ohio.
Atilan was charged by indictment on June 10, 2008, with conspiracy to engage in contract fraud, conspiracy to engage in wire fraud, and wire fraud.    According to court documents, Atilan is p resident and chief executive officer of PMA Services Ltd. of Las Vegas and Kayteks Ltd. of Adna, Turkey.    In 2006 through 2008, Atilan offered bribes and kickbacks in order to secure contracts for businesses he owned in connection with services and construction associated with U.S. military operations in Iraq.    Some of the Defense Department contracting officials who Atilan is accused of trying to bribe were stationed in Dayton at the time.
Atilan was first arrested in Las Vegas on May 23, 2008.  Atilan was placed on electronic monitoring pending his formal hearing before a federal judge in Dayton, Ohio.    On June 15, 2008, Atilan allegedly violated the terms of his pretrial release by cutting off his electronic bracelet and fleeing the country.    The government sought his extradition, and Atilan arrived in Dayton, Ohio on July 27, 2014.
An indictment is merely an accusation, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the FBI and DCIS.    The case is being prosecuted by Assistant U.S. Attorney Dwight Keller of the Southern District of Ohio with assistance from Trial Attorney Dan E. Stigall of the Criminal Division’s Office of International Affairs and Department of Justice Attaché Ellen Endrizzi.    The Criminal Division’s Office of International Affairs also provided assistance.

 

French Citizen Sentenced for Obstructing a Criminal Investigation into Alleged Bribes Paid to Win Mining Rights in Guinea

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Frederic Cilins, a 51-year old French citizen, was sentenced today in the Southern District of New York to 24 months in prison for obstructing a federal criminal investigation into alleged bribes to obtain mining concessions in the Republic of Guinea.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Preet Bharara of the Southern District of New York and Assistant Director in Charge George Venizelos of the FBI’s New York Field Office made the announcement.    The sentence was imposed by U.S. District Court Judge William H. Pauley III.
“Cilins offered to bribe a witness in an FCPA investigation to stop the witness from talking to the FBI,” said Assistant Attorney General Caldwell.  “Today’s sentence holds Cilins accountable for his effort to undermine the integrity of our justice system, and sends a message that those who interfere with federal investigations will be prosecuted and sent to prison.”
“Frederic Cilins went to great lengths to thwart a Manhattan federal grand jury’s investigation into an alleged bribery scheme in the Republic of Guinea,” said U.S. Attorney Bharara.  “In an effort to prevent the federal authorities from learning the truth, Cilins paid a witness for her silence and to destroy key documents.  Today, Cilins learned that no one can manipulate justice.”
“Cilins obstructed the efforts of the FBI during the course of this investigation,” said Director in Charge Venizelos.  “His guilty plea and sentence demonstrate our shared commitment with the department’s Criminal Division and U.S. Attorney’s Office to hold accountable those who seek to interfere with the administration of justice. This case should be a reminder to all those who try to circumvent the efforts of a law enforcement investigation: the original crime and the cover-up both lend themselves to prosecution.”
According to court documents, Cilins obstructed an ongoing federal investigation concerning potential violations of the Foreign Corrupt Practices Act (FCPA) and other crimes.    Federal law enforcement was investigating whether a particular mining company with which Cilins was affiliated paid bribes to officials of a former governmental regime in the Republic of Guinea 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 agreed to pay substantial sums of money to induce a witness to the alleged bribery scheme to leave the United States to avoid questioning by the FBI, as well as to give documents to Cilins for destruction that had been requested by the FBI as part of the investigation.    Cilins also sought to induce the witness to sign an affidavit containing false statements regarding matters under investigation by the grand jury.    That witness was the former wife of a now-deceased Guinean government official who held an office in Guinea that allowed him to influence the award of mining concessions.
Cilins pleaded guilty on March 10, 2014 to a one-count superseding information charging him with obstruction of a federal investigation.    In addition to his sentence, he was ordered to pay a fine of $75,000 and forfeit $20,000.
The case was 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 Criminal Division’s Office of International Affairs and Office of Enforcement Operations provided valuable assistance in the investigation.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa .

 

Former Chief Executive Officer of Lufthansa Subsidiary BizJet Pleads Guilty to Foreign Bribery Charges

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The former president and chief executive officer of BizJet International Sales and Support Inc., a U.S.-based subsidiary of Lufthansa Technik AG with headquarters in Tulsa, Oklahoma, that provides aircraft maintenance, repair and overhaul services, pleaded guilty today for his participation in a scheme to pay bribes to foreign government officials.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Danny C. Williams Sr., of the Northern District of Oklahoma and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office made the announcement.
“The former CEO of BizJet, Bernd Kowalewski, has become the third and most senior Bizjet executive to plead guilty to bribing officials in Mexico and Panama to get contracts for aircraft services,” said Assistant Attorney General Caldwell.  “While Kowalewski and his fellow executives referred to the corrupt payments as ‘commissions’ and ‘incentives,’ they were bribes, plain and simple.  Though he was living abroad when the charges were unsealed, the reach of the law extends beyond U.S. borders, resulting in Kowalewski’s arrest in Amsterdam and his appearance in court today in the United States.  Today’s guilty plea is an example of our continued determination to hold corporate executives responsible for criminal wrongdoing whenever the evidence allows.”
“I commend the investigators and prosecutors who worked together across borders and jurisdictions to vigorously enforce the Foreign Corrupt Practices Act,” said U.S. Attorney Williams.  “Partnership is a necessity in all investigations. By forging and strengthening international partnerships to combat bribery, the Department of Justice is advancing its efforts to prevent crime and to protect citizens.”
Bernd Kowalewski, 57, the former President and CEO of BizJet, pleaded guilty today in federal court in Tulsa, Oklahoma, to conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and a substantive violation of the FCPA in connection with a scheme to pay bribes to officials in Mexico and Panama in exchange for those officials’ assistance in securing contracts for BizJet to perform aircraft maintenance, repair and overhaul services.
Kowalewski was arrested on a provisional arrest warrant by authorities in Amsterdam on March 13, 2014, and waived extradition on June 20, 2014.    Kowalewski is the third BizJet executive to plead guilty in this case.    Peter DuBois, the former Vice President of Sales and Marketing, pleaded guilty on Jan. 5, 2012, to conspiracy to violate the FCPA and a substantive violation of the FCPA and Neal Uhl, the former Vice President of Finance, pleaded guilty on Jan. 5, 2012, to conspiracy to violate the FCPA.    Jald Jensen, the former sales manager at BizJet, has been indicted for conspiracy as well as substantive FCPA violations and money laundering and is believed to be living abroad.

Charges were unsealed against the four defendants on April 5, 2013.
According to court filings, Kowalewski and his co-conspirators paid bribes directly to foreign officials to secure aircraft maintenance repair and overhaul contracts, and in some instances, the defendants funneled bribes to foreign officials through a shell company owned and operated by Jensen.    The shell company, Avionica International & Associates Inc., operated under the pretense of providing aircraft maintenance brokerage services but in reality laundered money related to BizJet’s bribery scheme.    Bribes were paid to officials employed by the Mexican Policia Federal Preventiva, the Mexican Coordinacion General de Transportes Aereos Presidenciales, the air fleet for the Gobierno del Estado de Sinaloa, the air fleet for the Gobierno del Estado de Sonora and the Republica de Panama Autoridad Aeronautica Civil.
Further according to court filings, the co-conspirators discussed in e-mail correspondence and at corporate meetings the need to pay bribes, which they referred to internally as “commissions” or “incentives,” to officials employed by the foreign government agencies in order to secure the contracts.    At one meeting, for example, in response to a question about who the decision-maker was at a particular customer organization, DuBois stated that a director of maintenance or chief pilot was normally responsible for decisions on where an aircraft went for maintenance work.    Kowalewski then responded by explaining that the directors of maintenance and chief pilots in the past received “commissions” of $3,000 to $5,000 but were now demanding $30,000 to $40,000 in “commissions.” Similarly, in e-mail correspondence between Uhl, DuBois, Kowalewski, and several others, Uhl responded to a question about BizJet’s financial outlook if “incentives” paid to brokers, directors of maintenance, or chief pilots continued to increase industry wide, stating that they would “work to build these fees into the revenue as much as possible.    We must remain competitive in this respect to maintain and gain market share.”
On March 14, 2012, the department announced that it had entered into a deferred prosecution agreement with BizJet, requiring that BizJet pay an $11.8 million monetary penalty to resolve charges related to the corrupt conduct.    That agreement acknowledged BizJet’s voluntary disclosure, extraordinary cooperation, and extensive remediation in this case.    In addition, the department announced on March 14, 2012, that BizJet’s indirect parent company, Lufthansa Technik AG, entered into an agreement with the department in which the department agreed not to prosecute Lufthansa Technik provided that Lufthansa Technik satisfies its obligations under the agreement for a period of three years.
This case is being investigated by the FBI’s Washington Field Office with substantial assistance form the Oklahoma Field Office.    The department has worked closely with its law enforcement counterparts in Amsterdam, Mexico and Panama, and has received significant assistance from Germany and Uruguay.    The Criminal Division’s Office of International Affairs has also provided assistance.    This case is being prosecuted by Assistant Chief Daniel S. Kahn and Trial Attorney David Fuhr of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Kevin Leitch of the Northern District of Oklahoma.