Tag Archives: Neil H. MacBride

US Army Sergeant Pleads Guilty in Georgia to Stealing Identity Information from US Army Computer System

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Ammie Brothers, 29, of Columbus, Ga., a sergeant in the U.S. Army, pleaded guilty today to unlawfully obtaining personal information from the U.S. Army’s Army Knowledge Online computer system.

The guilty plea was announced by Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney for the Eastern District of Virginia Neil H. MacBride; U.S. Attorney for the Middle District of Georgia Michael J. Moore; and Director Daniel T. Andrews of the U.S. Army Criminal Investigation Command’s Computer Crime Investigative Unit.

Brothers pleaded guilty before U. S. District Judge Clay Land in Columbus, Ga., to one count of unauthorized access to information from a U.S. Army computer system.  She was charged on Feb. 14, 2013, in a five-count indictment returned by a federal grand jury in Alexandria, Va.

In a statement of facts filed with the plea agreement, Brothers admitted that between April 24, 2009, and Oct. 5, 2011, she repeatedly and intentionally accessed two victims’ Army Knowledge Online accounts, which contain personnel files for members of the armed services.  Brothers initially gained access by calling the Army Knowledge Online help desk in the Eastern District of Virginia and providing the victims’ Social Security numbers and dates of birth in order to obtain temporary passwords.

When law enforcement searched Brothers’s home in Columbus, they recovered numerous documents printed from the Army Knowledge Online system that contained victims’ Social Security numbers, bank account numbers and employment history, including the Social Security number of one minor child.  Brothers admitted to law enforcement that, in addition to illegally accessing the victims’ Army Knowledge Online accounts, she regularly harassed the victims by telephone and accessed several credit card accounts belonging to one victim, and in one case authorized charges without the victim’s knowledge or consent.

At sentencing, scheduled for Oct. 24, 2013, Brothers faces a maximum penalty of five years in prison.

This case was investigated by the Computer Crime Investigative Unit of U.S. Army Criminal Investigation Command.   The case is being prosecuted by Trial Attorney Peter V. Roman of the Justice Department’s Computer Crime and Intellectual Property Section, Assistant U.S. Attorney Lindsay Kelly of the Eastern District of Virginia and Assistant U.S. Attorney Crawford L. Seals of the Middle District of Georgia.

Former Security Contractor CEO Sentenced for Masterminding $31 Million Disadvantaged Small Business Fraud Scheme

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The former chief executive officer of a Virginia-based security contracting firm was sentenced in the Eastern District of Virginia to 72 months in prison for creating a front company to obtain more than $31 million intended for disadvantaged small businesses and for bribing the former regional director for the National Capital Region of the Federal Protective Service (FPS) as part of the scheme. The front company obtained the contracts through the Small Business Administration’s (SBA) Section 8(a) program, which allows qualified small businesses to receive sole-source and competitive-bid contracts set aside for minority-owned and disadvantaged small businesses.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Neil H. MacBride of the Eastern District of Virginia; National Aeronautics and Space Administration (NASA) Inspector General Paul K. Martin; SBA Inspector General Peggy E. Gustafson; Defense Criminal Investigative Service (DCIS) Special Agent in Charge of Mid-Atlantic Field Office Robert E. Craig; General Services Administration (GSA) Inspector General Brian D. Miller; and Department of Homeland Security (DHS) Deputy Inspector General Charles K. Edwards made the announcement after sentencing by United States District Judge Gerald Bruce Lee.

“Keith Hedman used his expertise gleaned from decades as a government contractor to cheat the system and steal tens of millions from minority-owned small business owners,” said Acting Assistant Attorney General Raman. “Today’s sentence shows that those who resort to deceit and bribery to secure federal contracts will be caught and held accountable.”

“Keith Hedman tried to game the system and take advantage of a government program designed to help minority-owned small businesses,” said U.S. Attorney Neil H. MacBride.  “He committed fraud, he undermined the trust of the U.S. government and this type of conduct will not be tolerated.  My office is committed to prosecuting those who cheat the government to the fullest extent of the law.”    “I commend the outstanding efforts of our agents and the other law enforcement agencies involved in this case in protecting the integrity of the Federal Government’s procurement program and taxpayer dollars” said NASA Inspector General Paul K. Martin.

Keith Hedman, 53, of Arlington, Va., was sentenced today after pleading guilty to major government fraud and conspiracy to commit bribery on March 13, 2013. Hedman was also ordered to forfeit approximately $6.1 million.

According to court documents, in or about 2011 Hedman formed Company A, which was approved to participate in the 8(a) program based on the 8(a) eligibility of its listed president and CEO, an African-American female. When the listed president and CEO left Company A in 2003, Hedman became its sole owner, and the company was no longer 8(a)-eligible.

In 2003, Hedman created Company B, another Arlington-based security contractor, to ensure that he could continue to gain access to 8(a) contracting preferences for which Company A was no longer qualified. Prior to applying for Company B’s 8(a) status, Hedman selected an employee, Dawn Hamilton, 48, of Brownsville, Md., to serve as a figurehead owner based on her Portuguese heritage and history of social disadvantage. In reality, the new company was managed by Hedman and Company A senior leadership in violation of 8(a) rules and regulations. To deceive the SBA, the co-conspirators falsely claimed that Hamilton formed and founded the company and that she was the only member of the company’s management. Based on those misrepresentations, Company B obtained 8(a) status in 2004.

From 2004 through February 2012, Hedman – not Hamilton – impermissibly exercised ultimate decision-making authority and control over Company B by directing its finances, allocation of personnel, and government contracting activities.  Hedman nonetheless maintained the impression that Hamilton was leading the company, including through forgeries of signatures of Hamilton to documents she had not seen or drafted. Hedman also retained ultimate control over the shell business’s bank accounts throughout its existence.  In 2010, Hedman withdrew $1 million in cash from Company B’s accounts and gave the funds in cash to Hamilton and three other conspirators. In 2011, Hedman approached Hamilton’s brother about starting another shell company to continue the scheme.  The trio submitted another fraudulent application to the SBA, but it was rejected.

Later in 2011, Hedman agreed to pay Derek Matthews, 47, of Harwood, Md., the former FPS Regional Director for the National Capital Region, $50,000 and a percentage of new business in exchange for Matthews helping Company B obtain contracts.  During the bribery scheme, Matthews served as FPS Deputy Assistant Director for Operations, a law enforcement position in which he had daily oversight of physical security programs and oversight of approximately 13,000 FPS officers at approximately 9,000 federal buildings.

In total, the scheme netted government contracts valued at more than $153 million, from which Company B obtained more than $31 million in contract payments. The various conspirators netted more than $6.1 million that they were not entitled to receive from those payments. Seven other defendants have pleaded guilty in the scheme.

This case is being investigated by NASA Office of the Inspector General (OIG), the SBA -OIG, DCIS-OIG, GSA-OIG, and DHS-OIG, with assistance from the Defense Contract Audit Agency. Assistant U.S. Attorneys Chad Golder and Ryan Faulconer, a former Trial Attorney for the Criminal Division’s Fraud Section, are prosecuting the case on behalf of the United States.

Former Security Contractor Executives Sentenced for Illegally Obtaining More Than $31 Million Intended for Disadvantaged Small Businesses

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Two executives at a Virginia-based security contracting firm were sentenced in the Eastern District of Virginia for their roles in using a front company to obtain more than $31 million intended for disadvantaged small businesses as part of the Small Business Administration’s (SBA) Section 8(a) program. This program allows qualified small businesses to receive sole-source and competitive-bid contracts set aside for minority-owned and disadvantaged small businesses.

 Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Neil H. MacBride of the Eastern District of Virginia; National Aeronautics and Space Administration (NASA) Inspector General Paul K. Martin; SBA Inspector General Peggy E. Gustafson; Defense Criminal Investigative Service (DCIS) Special Agent in Charge of Mid-Atlantic Field Office Robert E. Craig; General Services Administration (GSA) Inspector General Brian D. Miller; and Department of Homeland Security (DHS) Deputy Inspector General Charles K. Edwards made the announcement after sentencing by United States District Judge Leonie M. Brinkema.

Joseph Richards, 52, of Arlington, Va., and David Lux, 66, of Springfield, Va., were sentenced today to 27 and 15 months in prison, respectively, after pleading guilty in March 2013 to conspiracy to commit major government fraud. Both men were ordered to complete community service as part of their supervised release following their prison terms. Richards was ordered to pay $120,378 in restitution, and Lux was ordered to forfeit $115,556.

According to court documents, Richards and Lux were executives at an Arlington-based security contracting firm referred to as Company A in court records. In approximately 2001, Keith Hedman, 53, of Arlington, formed Company A, which was approved to participate in the 8(a) program based on the 8(a) eligibility of its listed president and CEO, an African-American female. When the listed president and CEO left Company A in 2003, Hedman became its sole owner, and the company was no longer 8(a)-eligible.

In 2003, Hedman created Company B, another Arlington-based security contractor, to ensure that he could continue to gain access to 8(a) contracting preferences for which Company A was no longer qualified. Prior to applying for Company B’s 8(a) status, Hedman selected an employee, Dawn Hamilton, 48, of Brownsville, Md., to serve as a figurehead owner based on her Portuguese heritage and history of social disadvantage. In reality, the new company was managed by Hedman and Company A senior leadership in violation of 8(a) rules and regulations. To deceive the SBA, the co-conspirators falsely claimed that Hamilton formed and founded the company and that she was the only member of the company’s management. Based on those misrepresentations, Company B obtained 8(a) status in 2004. From 2004 through February 2012, Hedman – not Hamilton – impermissibly exercised ultimate decision-making authority and control over Company B by directing its finances, allocation of personnel, and government contracting activities.

Richards and Lux joined the scheme in 2005 and 2008, respectively. Hedman offered Richards and Lux ownership stakes in Company B in exchange for their assistance in misleading the SBA and other U.S. government agencies, and both men accepted. Once they joined the conspiracy, Richards and Lux took a variety of actions to further the fraud against the United States. In 2008, for example, both Richards and Lux helped Company B overcome a protest by another company that accused Company A and Company B of improperly obtaining a $48 million Coast Guard contract.

From 2008 to 2010, Richards moved to Company B’s payroll to help Hedman illegally operate Company B. In 2010, Lux helped Hedman withdraw more than $1 million in cash from Company B’s accounts, which Hedman then disbursed to various conspirators, including $100,000 in cash to both Richards and Lux. Richards and Lux also assisted Hedman, Hamilton, and other co-conspirators prepare false documents, including annual reviews, to submit to SBA and other government agencies.

In total, the scheme netted government contracts valued at more than $153 million, from which Company B obtained more than $31 million in contract payments. The various conspirators netted more than $6.1 million that they were not entitled to receive from those payments.

Six other defendants have pleaded guilty in the scheme:

• Hedman is scheduled to be sentenced by U.S. District Judge Gerald Bruce Lee on June 21, 2013. • Hamilton is scheduled to be sentenced by U.S. District Judge T. S. Ellis, III on June 28, 2013. • David Sanborn, 60, of Lexington, S.C., Company A’s former president, is scheduled to be sentenced by U.S District Judge Claude M. Hilton on July 19, 2013. • John Hertogs, 42, of Winter Springs, Fl., Company B’s former director of operations, is scheduled to be sentenced by Judge Hilton on July 12, 2013, for submitting a fraudulent 8(a) application for a follow-on company that Hedman and Hamilton intended to use once Company B graduated from the 8(a) program. • Derek Matthews, 47, of Harwood, Md., former Regional Director for the National Capital Region of the Federal Protective Service, is scheduled to be sentenced by Judge Brinkema on July 19, 2013, for a related bribery scheme in which Hedman agreed to pay Matthews $50,000 and a percentage of new business in exchange for Matthews helping Company B obtain contracts. • Michael Dunkel, 59, of Merritt Island, Fl., is scheduled to be sentenced by Judge Lee on Oct. 4, 2013, for obtaining more than $4.4 million in payments by using Company B as a pass-through company on NASA contracts.

This case is being investigated by NASA Office of the Inspector General (OIG), the SBA -OIG, DCIS-OIG, GSA-OIG, and DHS-OIG, with assistance from the Defense Contract Audit Agency. Assistant U.S. Attorneys Chad Golder and Ryan Faulconer, a former Trial Attorney for the Criminal Division’s Fraud Section, are prosecuting the case on behalf of the United States.

French Oil and Gas Company, Total, S.A., Charged in the United States and France in Connection with an International Bribery Scheme

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Total, S.A., a French oil and gas company that trades on the New York Stock Exchange, has agreed to pay a $245.2 million monetary penalty to resolve charges related to violations of the Foreign Corrupt Practices Act (FCPA) in connection with illegal payments made through third parties to a government official in Iran to obtain valuable oil and gas concessions, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, and U.S. Attorney Neil H. MacBride for the Eastern of Virginia.

As part of the agreed resolution, the department today filed a criminal information in U.S. District Court for the Eastern District of Virginia charging Total with one count of conspiracy to violate the anti-bribery provisions of the FCPA, one count of violating the internal controls provision of the FCPA, and one count of violating the books and records provision of the FCPA.  The department and Total agreed to resolve the charges by entering into a deferred prosecution agreement for a term of three years.  In addition to the monetary penalty, Total also agreed to cooperate with the department and foreign law enforcement to retain an independent corporate compliance monitor for a period of three years and to continue to implement an enhanced compliance program and internal controls designed to prevent and detect FCPA violations.

Also today, the U.S. Securities and Exchange Commission (SEC) entered into a cease-and-desist order against Total in which the company agreed to pay an additional $153 million in disgorgement and prejudgment interest.  Total also agreed with the SEC to comply with certain undertakings regarding its FCPA compliance program, including the retention of a compliance consultant.

In addition, French enforcement authorities announced earlier today that they had requested that Total, Total’s Chairman and Chief Executive Officer, and two additional individuals be referred to the Criminal Court for violations of French law, including France’s foreign bribery law.

“Today we announce the first coordinated action by French and U.S. law enforcement in a major foreign bribery case,” said Acting Assistant Attorney General Raman.  “Our two countries are working more closely today than ever before to combat corporate corruption, and Total, which bought business through bribes, now faces the criminal consequences across two continents.”

“The Eastern District of Virginia, through our strong partnership with the Criminal Division’s Fraud Section, is committed to holding accountable those who violate the Foreign Corrupt Practices Act,” said U.S. Attorney MacBride.  “Today’s deferred prosecution agreement, with both its punitive and forward-looking compliance provisions, dovetails with our goals of bringing violators to justice and preventing future misconduct.”

According to the deferred prosecution agreement, in 1995 Total sought to re-enter the Iranian oil and gas market by attempting to obtain a contract with the National Iranian Oil Company (NIOC) to develop the Sirri A and E oil and gas fields.  In May 1995, Total entered into negotiations with an Iranian official who served as the chairman of an Iranian state-owned and state-controlled engineering company.  Total subsequently entered into a purported consulting agreement pursuant to which Total would corruptly make payments to an intermediary designated by the Iranian official to secure NIOC signing a development agreement with Total for the Sirri A and E project, which NIOC did in July 1995.  Over the next two-and-a-half years, Total paid approximately $16 million in bribes under the purported consulting agreement.

In 1997, Total sought to negotiate a contract with NIOC to develop a portion of the South Pars gas field, the world’s largest gas field.  At the direction of the Iranian official, Total and a second intermediary entered into another purported consulting agreement that called for Total to make large payments to the intermediary.  In September 1997, Total executed a contract with NIOC that granted it a 40 percent interest in developing phases two and three of the South Pars gas field.  Over the next seven years, Total made unlawful payments of approximately $44 million pursuant to the second purported consulting agreement.

In sum, between 1995 and 2004, at the direction of the Iranian official, Total corruptly made approximately $60 million in bribe payments under the agreements for the purpose of inducing the Iranian official to use his influence in connection with Total’s efforts to obtain and retain lucrative oil rights in the Sirri A and E and South Pars oil and gas fields.  Total mischaracterized the unlawful payments as “business development expenses” when they were, in fact, bribes designed to corruptly influence a foreign official.  Further, Total failed to implement effective internal accounting controls, permitting the consulting agreements’ true nature and true participants to be concealed and thereby failing to maintain accountability for assets.

The case is being prosecuted by Trial Attorney Andrew Gentin of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Charles Connolly of the U.S. Attorney’s Office for the Eastern District of Virginia.  Significant assistance was provided by the Criminal Division’s Office of International Affairs and by the SEC’s New York Regional Office.  The department also acknowledges and expresses its deep appreciation for the cooperation and partnership of French law enforcement authorities.

Former Regional Director of Federal Protective Service Pleads Guilty to Accepting Bribes from Government Contractor

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Derek Matthews, 46, of Harwood, Md., pleaded guilty today to accepting bribes from a government contracting company in exchange for using his position to help the company find and win contracts.

Neil H. MacBride, U. S. Attorney for the Eastern District of Virginia, Mythili Raman, Acting Assistant Attorney General for the Justice Department’s Criminal Division, and Charles K. Edwards, U.S. Department of Homeland Security (DHS) Deputy Inspector General, made the announcement after the plea was accepted by U.S. District Judge Leonie M. Brinkema.

Matthews was charged by criminal information on April 11, 2013, with one count of conspiracy to commit bribery.  Matthews faces a maximum penalty of five years in prison when he is sentenced on July 19, 2013.

Matthews served as Deputy Assistant Director for Operations for the DHS’s Federal Protective Services (FPS) and was later promoted to FPS Regional Director for the National Capital Region.  In the fall of 2011, Matthews agreed with Keith Hedman, an executive at an Arlington, Va., security service consulting company referred to as Company B in court records, that in exchange for a monthly payment from Company B and a percentage of any new business obtained, Matthews would use his position to help Company B find and win U.S. government contracts, including with FPS.  Matthews engaged in a series of official acts, including lobbying of government officials and sharing of information with Hedman, in an effort to obtain business for Hedman and Company B. In turn, Hedman and Company B paid Matthews three monthly payments totaling $12,500.

Hedman pleaded guilty on March 18, 2013, to conspiracy to commit bribery in connection with Matthews’ scheme, along with conspiracy to commit major government fraud as part of a separate scheme to fraudulently obtain more than $31 million in government contract payments that should have gone to disadvantaged small businesses.

This case was investigated by the Washington Field Office for the DHS Office of the Inspector General (OIG), the National Aeronautics and Space Administration OIG, the Small Business Administration OIG, the Defense Criminal Investigative Service, and the General Services Administration OIG. Assistant U.S. Attorneys Chad Golder and Ryan Faulconer  are prosecuting the case on behalf of the United States.

Northern Virginia Therapy Provider to Pay $700,000 to Resolve False Claims Act Allegations

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Government Alleges Skilled Nursing Facility Billed for Medically Unnecessary Therapy

Fairfax, Va.-based skilled nursing facility Fairfax Nursing Center (FNC) and its owners have agreed to pay $700,000 to resolve allegations that they violated the False Claims Act by knowingly submitting or causing the submission to Medicare of false claims for non-reimbursable rehabilitation therapy services, the Justice Department announced today.

 

The settlement resolves claims that FNC provided excessive, medically unnecessary, or otherwise non-reimbursable physical, occupational, and speech therapy services to 37 Medicare beneficiaries serviced by FNC between January 2007 and December 2010.   The United States alleged that the rehabilitation therapy services provided by FNC to these beneficiaries were not reasonable and necessary for the treatment of their condition.  Specifically, the United States alleged that the therapy services were often excessive, duplicative, performed without clear goals or direction, and, in some instances, performed primarily to capture higher reimbursement rates.

 

“Today’s settlement is another example of the Department’s efforts to hold skilled nursing facilities accountable for the rehabilitation therapy services they deliver to some of the most vulnerable in our society,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division of the Department of Justice.   “The provision of excessive and medically unnecessary therapy services will not be tolerated.”

 

“Medicare fraud takes many forms and arises in various segments of health care,” said U.S. Attorney Neil H. MacBride. “We continue to work toward recovery of money lost to overbillings to Medicare.”

 

This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover nearly $10.2 billion since January 2009 in cases involving fraud against federal health care programs.  The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14 billion.

 

The allegations settled today arose from a lawsuit filed by two former FNC therapists and one former contract therapist under the qui tam, or whistleblower provisions, of the False Claims Act.   Under the False Claims Act, private citizens can bring suit on behalf of the United States and share in any recovery.   The whistleblowers in this case will receive, collectively, $122,500 of the recovery.   The lawsuit is captioned as United States of America & Commonwealth of Virginia ex rel. Christine Ribik, Nadine Kelly, & Stephanie Beauregard v. Fairfax Nursing Center, Inc., et al. , No. 1:11-cv-496 (E.D. Va.).

 

The case was handled by the Department of Justice’s Civil Division, the U.S. Attorney’s Office for the Eastern District of Virginia, the Office of the Inspector General of the U.S. Department of Health and Human Services, and the Medicaid Fraud Control Unit of the Commonwealth of Virginia Attorney General’s Office.   The claims settled by this agreement are allegations only; there has been no determination of liability.