U.S. TO SPEND $150 MILLION TO HELP LONG-TERM UNEMPLOYED GET JOBS

FROM:  U.S. LABOR DEPARTMENT
$150M Ready to Work Partnership grant competition to help those facing 
long-term unemployment return to work announced by US Labor Department
Grant applications accepted through June 19, 2014

WASHINGTON — The U.S. Department of Labor today announced the availability of approximately $150 million in grants to prepare and place those facing long-term unemployment into good jobs. The Ready to Work Partnership grant competition will support and scale innovative partnerships between employers, nonprofit organizations and America's public workforce system to build a pipeline of talented U.S. workers and help those experiencing long-term unemployment gain access to employment services that provide opportunities to return to work in middle- and high-skill jobs.

Approximately 20 to 30 grants ranging from $3 million to $10 million will be awarded to programs focused on employer engagement, individualized counseling, job placement assistance, and work-based training that facilitate hiring for jobs where employers currently use foreign workers on H-1B visas.

"These grants are part of President Obama's call to action to help ensure that America continues to be a magnet for middle-class jobs and business investment," said U.S. Secretary of Labor Thomas E. Perez. "We need to do everything we can to help employers expand and grow while at the same time remembering that those who have been out of work through no fault of their own deserve a fair shot."
Secretary Perez made the grant announcement from the Pulaski, N.Y., headquarters of the Fulton Companies, a global manufacturer of industrial and commercial heating systems. Thanks in part to federal funding from the multi-agency Advanced Manufacturing Jobs and Innovation Accelerator Challenge, Fulton develop strong training partnerships with the State University of New York College of Environmental Science and Forestry, the Manufacturers Association of Central New York, and the Syracuse Center of Excellence in Environmental and Energy Systems. Together, they were able to develop the local workforce Fulton needed to expand the manufacturing capacity of their Pulaski plant to better serve the North American and overseas markets.

Programs funded through Ready to Work Partnership grants will use on-the-job training, paid work experience, paid internships and Registered Apprenticeships to provide employers the opportunity to train workers in the specific skill sets required for open jobs. Programs will have to recruit those who have been out of work for six months or longer and will incorporate a strong up-front assessment, allowing for a customization of services and training to facilitate re-employment.
As a pre-condition to be considered for funding, at least three employers or a regional industry association must be actively engaged in the project. The grants are financed by a user fee paid by employers to bring foreign workers into the United States under the H-1B nonimmigrant visa program.

DENSO CORP. EXECUTIVE PLEADS GUILTY TO OBSTRUCTING PRICE-FIXING INVESTIGATION

FROM:  U.S. JUSTICE DEPARTMENT 
FORMER DENSO CORP. EXECUTIVE AGREES TO PLEAD GUILTY TO
OBSTRUCTING AUTOMOTIVE PARTS INVESTIGATION

Executive Agrees to Serve One Year in a U.S. Prison

WASHINGTON — A former executive of Japan-based Denso Corp. has agreed to plead guilty to obstruction of justice charges in connection with the Antitrust Division’s investigation into a conspiracy to fix the prices of heater control panels installed in cars sold in the United States and elsewhere, the Department of Justice announced today.  The executive has also agreed to serve one year and one day in a U.S. prison.

A one-count felony charge was filed today in U.S. District Court for the Eastern District of Michigan in Detroit against Kazuaki Fujitani, a former director of Denso Corp. in Japan.  According to the charge, Fujitani, who was general manager of the Toyota Sales Division at the time of the offense, deleted numerous e-mails and electronic documents in February and March 2010 upon learning that the FBI had executed a search warrant on Denso’s U.S. subsidiary.  The deleted documents contained communications between Denso and one or more of its competitors regarding requests for price quotation made by Toyota for heater control panels for the Toyota Avalon.  The plea agreement is subject to court approval.

“Today’s charge demonstrates the Antitrust Division’s commitment to protecting the integrity of grand jury investigations,” said Brent Snyder, Deputy Assistant Attorney General of the Antitrust Division’s criminal enforcement program.  “The division will vigorously prosecute individuals who destroy evidence in an attempt to conceal their participation in illegal conspiracies.”

In March 2012, Denso pleaded guilty and was sentenced to pay a $78 million criminal fine for its role in conspiracies to fix the prices of heater control panels and electronic control units.
           
Including Fujitani, 29 individuals have been charged in the department’s ongoing investigation into price fixing and bid rigging in the auto parts industry.  Additionally, 26 companies have pleaded guilty or agreed to plead guilty and have agreed to pay a total of over $2.25 billion in fines.

Fujitani is charged with obstruction of justice, which carries a maximum penalty of 20 years in prison and a criminal fine of $250,000 for individuals.

Today’s charge arose from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI.  Today’s charge was brought by the National Criminal Enforcement Section and the San Francisco Office of the Antitrust Division, with the assistance of the Detroit Field Office of the FBI.

VA, KAISER PERMANENTE PARTNER TO SOLVE VETERANS HEALTH CARE PROBLEMS

FROM:  VETERANS AFFAIRS

FOR IMMEDIATE RELEASE February 19, 2014 VA Partners with Kaiser Permanente Better Care and Innovative Research behind Collaboration
WASHINGTON – The Department of Veterans Affairs (VA) is collaborating with Kaiser Permanente, a leading member of the health care industry, to pool resources and ideas to solve some of the largest and most complex challenges in VA health care. "VA is always on the lookout for opportunities for partnerships with the private sector and other federal agencies to enhance care for Veterans,"said Secretary of Veterans Affairs Eric K. Shinseki. "We are proud to partner with Kaiser Permanente for the health and wellbeing of our Nation's Veterans." The partnership will enable more effective research and sharing of "best practices," focusing initially on four areas: Telehealth and virtual care; Genomics; Care of Veterans who are members of Kaiser Permanente; and Advanced analytics to use large data sets and population management with appropriate patient privacy protections. Together VA and Kaiser Permanente will develop recommendations for how to design care using advanced analytics and technologies as well as research. This is not the first major collaboration between the two organizations.

 In 2010, Kaiser Permanente and VA launched a pilot program to exchange medical data using the Nationwide Health Information Network. The innovative pilot, launched in 2009, allows clinicians from both organizations to obtain a more comprehensive view of a patient's health record using electronic health record information, including information about health issues, medications and allergies while ensuring that patient privacy and confidentiality are protected. "We are eager to continue to redesign the experience of our Veterans seeking health care to increase ease of access and quality of services,"said Patrick Littlefield, Acting Director of VA Center for Innovation, "We're excited about this partnership to make way for useful and tangible outputs." With over 8 million enrollees, VA operates the largest integrated health care delivery system in the United States, with a mission to honor America's Veterans by providing exceptional health care that improves their health and well-being. VA provides a broad range of primary care, specialized care, and related medical and social support services. More information is available at http://www.va.gov/health/. VA is also the Nation's largest provider of health care education and training for physician residents and other health care trainees. VA advances medical research and development in areas that most directly address the diseases and conditions that affect Veterans and eligible beneficiaries. # # #

CDC SAYS FLU SEASON HARD FOR YOUNGER PEOPLE

FROM:  CENTERS FOR DISEASE CONTROL AND PREVENTION 
CDC Reports Flu Hit Younger People Particularly Hard This Season
Vaccination lowered risk of having to go to the doctor by about 60 percent for people of all ages

This influenza season was particularly hard on younger- and middle-age adults, the Centers for Disease Control and Prevention reported in today’s Morbidity and Mortality Weekly Report. People age 18-64 represented 61 percent of all hospitalizations from influenza—up from the previous three seasons when this age group represented only about 35 percent of all such hospitalizations. Influenza deaths followed the same pattern; more deaths than usual occurred in this younger age group.

A second report in this week’s MMWR showed that influenza vaccination offered substantial protection against the flu this season, reducing a vaccinated person’s risk of having to go to the doctor for flu illness by about 60 percent across all ages.
“Flu hospitalizations and deaths in people younger- and middle-aged adults is a sad and difficult reminder that flu can be serious for anyone, not just the very young and old; and that everyone should be vaccinated,” said CDC Director Tom Frieden, M.D., M.P.H. “The good news is that this season's vaccine is doing its job, protecting people across all age groups."

U.S. flu surveillance data suggests that flu activity is likely to continue for a number of weeks, especially in places where activity started later in the season. Some states that saw earlier increases in flu activity are now seeing decreases. Other states are still seeing high levels of flu activity or continued increases in activity.

While flu is responsible for serious illness and death every season, the people who are most affected can vary by season and by the predominant influenza virus. The currently circulating H1N1 virus emerged in 2009 to trigger a pandemic, which was notable for high rates of hospitalization and death in younger- and middle-aged people. While H1N1 viruses have continued to circulate since the pandemic, this is the first season since the pandemic they have been predominant in the U.S. Once again, the virus is causing severe illness in younger- and middle-aged people.

Approximately 61 percent of flu hospitalizations so far this season have occurred among persons aged 18-64 years. Last season, when influenza A (H3N2) viruses were the predominant circulating viruses, people 18 to 64 years accounted for only 35 percent of hospitalizations. During the pandemic season of 2009-2010, people 18 to 64 years old accounted for about 56 percent of hospitalizations.
Hospitalization rates have also been affected. While rates are still highest among people 65 and older (50.9 per 100,000), people 50 to 64 years now have the second-highest hospitalization rate (38.7 per 100,000), followed by children 0-4 years old (35.9 per 100,000). During the pandemic, people 50 to 64 years also had the second-highest hospitalization rate. Note that hospitalization rates are cumulative and thus will continue to increase this season.

Influenza deaths this season are following a pattern a similar to the pandemic.  People 25 years to 64 years of age have accounted for about 60 percent of flu deaths this season compared with 18 percent, 30 percent, and 47 percent for the three previous seasons, respectively. During 2009-2010, people 25 years to 64 years accounted for an estimated 63 percent of deaths.

"Younger people may feel that influenza is not a threat to them, but this season underscores that flu can be a serious disease for anyone," said Dr. Frieden. "It's important that everyone get vaccinated. It's also important to remember that some people who get vaccinated may still get sick, and we need to use our second line of defense against flu: antiviral drugs to treat flu illness. People at high risk of complications should seek treatment if they get a flu-like illness. Their doctors may prescribe antiviral drugs if it looks like they have influenza."

People at high risk for flu complications include pregnant women, people with asthma, diabetes or heart disease, people who are morbidly obese and people older than 65 or children younger than 5 years, but especially those younger than 2 years. A full list of high risk factors and antiviral treatment guidance is available on the CDC website. More information about flu vaccine and how well it works also is available.

Flu Vaccine Best Tool Available

In the flu vaccine effectiveness (VE) study, CDC looked at data from 2,319 children and adults enrolled in the U.S. Influenza Vaccine Effectiveness (Flu VE) Network from December 2, 2013 to January 23, 2014. They found that flu vaccine reduced the risk of having to go to the doctor for flu illness by an estimated 61 percent across all ages. The study also looked at VE by age group and found that the vaccine provided similar levels of protection against influenza infection across all ages. VE point estimates against influenza A and B viruses by age group ranged from 52 percent for people 65 and older to 67 percent for children 6 months to 17 years. Protection against the predominant H1N1 virus was even slightly better for older people; VE against H1N1 was estimated to be 56 percent in people 65 and older and 62 percent in people 50 to 64 years of age. All findings were statistically significant.

The interim VE estimates this season are comparable to results from studies during other seasons when the viruses in the vaccine have been well-matched with circulating influenza viruses and are similar to interim estimates from Canada for 2013-14 published recently.

While flu vaccine can vary in how well it works, vaccination offers the best protection currently available against influenza infection. CDC recommends that everyone 6 months and older get an annual flu vaccine.

“We are committed to the development of better flu vaccines, but existing flu vaccines are the best preventive tool available now. This season vaccinated people were substantially better off than people who did not get vaccinated. The season is still ongoing. If you haven’t yet, you should still get vaccinated," said Dr. Frieden.

WHITE HOUSE ON LIBYA IDLs AND NOTICE

FROM: THE WHITE HOUSE 
Letter --Continuation of the National Emergency With Respect to Libya IDLs and Notice

Dear Mr. Speaker: (Dear Mr. President:)

Section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)) provides for the automatic termination of a national emergency unless, within 90 days prior to the anniversary date of its declaration, the President publishes in the Federal Register and transmits to the Congress a notice stating that the emergency is to continue in effect beyond the anniversary date. In accordance with this provision, I have sent to the Federal Register for publication the enclosed notice stating that the national emergency declared in Executive Order 13566 of February 25, 2011, is to continue in effect beyond February 25, 2014.

Colonel Muammar Qadhafi, his government, and close associates took extreme measures against the people of Libya, including by using weapons of war, mercenaries, and wanton violence against unarmed civilians. In addition, there was a serious risk that Libyan state assets would be misappropriated by Qadhafi, members of his government, members of his family, or his close associates if those assets were not protected. The foregoing circumstances, the prolonged attacks, and the increased numbers of Libyans seeking refuge in other countries caused a deterioration in the security of Libya, posed a serious risk to its stability, and led me to declare a national emergency to deal with this threat to the national security and foreign policy of the United States.

We are in the process of winding down the sanctions in response to developments in Libya, including the fall of Qadhafi and his government and the establishment of a democratically elected government. We are working closely with the new Libyan government and with the international community to effectively and appropriately ease restrictions on sanctioned entities, including by taking actions consistent with the U.N. Security Council's decision to lift sanctions against the Central Bank of Libya and two other entities on December 16, 2011. The

situation in Libya, however, continues to pose an unusual and extraordinary threat to the national security and foreign policy of the United States and we need to protect against this threat and the diversion of assets or other abuse by certain members of Qadhafi's family and other former regime officials. Therefore, I have determined that it is necessary to continue the national emergency with respect to Libya.

Sincerely,

BARACK OBAMA

FRAUD CHARGED BY SEC IN ALLEGED MOVIE INVESTMENT SCHEME

FROM:  SECURITIES AND EXCHANGE COMMISSION 

The Securities and Exchange Commission today charged three California residents with defrauding investors in a purported multi-million dollar movie project that would supposedly star well-known actors and generate exorbitant investment returns.

The SEC alleges that Los Angeles-based attorney Samuel Braslau was the architect of the fraudulent scheme that raised money through a boiler room operation spearheaded by Rand Chortkoff of Encino, Calif.  High-pressure salespeople including Stuart Rawitt persuaded more than 60 investors nationwide to invest a total of $1.8 million in the movie first titled Marcel and later changed to The Smuggler.  Investors were falsely told that actors ranging from Donald Sutherland to Jean-Claude Van Damme would appear in the movie when in fact they were never even approached.  Instead of using investor funds for movie production expenses as promised, Braslau, Chortkoff, and Rawitt have spent most of the money among themselves.  The investor funds that remain aren’t enough to produce a public service announcement let alone a full-length motion picture capable of securing the theatrical release promised to investors.

In a parallel action, the U.S. Attorney’s Office for the Central District of California today announced criminal charges against Braslau, Chortkoff, and Rawitt.

“Braslau, Chortkoff, and Rawitt sold investors on the Hollywood dream,” said Michele Wein Layne, director of the SEC’s Los Angeles Regional Office.  “But the dream never became a reality because they took investors’ money for themselves rather than using it to make a movie.”

According to the SEC’s complaint filed in U.S. District Court for the Central District of California, Braslau set up companies named Mutual Entertainment LLC and Film Shoot LLC to raise funds from investors for the movie project.  In January 2011, Mutual Entertainment spent $25,000 to purchase the rights to Marcel, an unpublished story set in Paris during World War II.  Shortly thereafter, Mutual Entertainment began raising money from investors through a boiler room operation that Chortkoff operated out of Van Nuys, Calif.

The SEC alleges that Braslau, Chortkoff, and Rawitt claimed that 63.5 percent of the funds raised from investors would be used for “production expenses.”  However, very little if any money was actually spent on movie expenses as they instead used the vast majority of investor funds to pay sales commissions and phony “consulting” fees to themselves and other salespeople.  Rawitt made numerous false claims to investors about the movie project.  For instance, he flaunted a baseless projected return on investment of about 300 percent.  He falsely depicted that they were just shy of reaching a $7.5 million fundraising goal and the movie was set to begin shooting in summer 2013.  He instilled the belief that Mutual Entertainment was a successful film company whose track record encompassed the Harold and Kumar movies produced by Carsten Lorenz.  And he falsely stated that investors would realize revenues from action figures and other products tied to the movie when in fact no such licensing rights had been sold.

According to the SEC’s complaint, Rawitt was the subject of a prior SEC enforcement action in 2009, when he was charged for his involvement in an oil-and-gas scheme.

“Investors can help protect themselves when approached for an investment opportunity by using the Internet to their advantage and researching the individual making the offer,” said Lori Schock, director of the SEC’s Office of Investor Education and Advocacy.  “In this case, a quick search of the SEC website reveals a copy of the complaint filed against Rawitt in federal court for participating in an offering fraud as well as an order barring him from the brokerage industry.”

The SEC’s complaint alleges that Braslau, Chortkoff, and Rawitt violated Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5.  The complaint further alleges that Chortkoff and Rawitt violated Section 15(a) of the Exchange Act, and Rawitt violated Section 15(b)(6)(B) of the Exchange Act.  The SEC seeks financial penalties and permanent injunctions against Braslau, Chortkoff, and Rawitt.

The SEC’s investigation, which is continuing, has been conducted by Peter Del Greco and Marc Blau of the Los Angeles office.  The SEC appreciates the assistance of the U.S. Attorney’s Office for the Central District of California and the Federal Bureau of Investigation.  

DOD OFFICIAL MEETS WITH PARTNERS, DEFENSE INDUSTRY OFFICIALS IN SINGAPORE

FROM:  U.S. DEPARTMENT OF DEFENSE 
DOD Official Meets With International Partners in Singapore
By Navy Cmdr. Amy Derrick-Frost
Department of Defense

SINGAPORE , Feb. 19, 2014 – The 2014 Singapore Airshow provided the setting last week for a senior Defense Department official to meet with numerous international partners and defense industry officials.

Frank Kendall, undersecretary of defense for acquisition, technology and logistics, told reporters at the airshow that the United States was the “feature country” at this year’s event, the first time organizers have made such a designation.

U.S. military aircraft participating in static displays and aerial demonstrations included two F-16 Fighting Falcons, two MV-22 Ospreys, a P-8A Poseidon, a C-17 Globemaster III, a KC-135 Stratotanker and a C-130J Super Hercules.
“The U.S. is honored to be the feature country,” Kendall said. “We have strong economic and security interests in Asia-Pacific region, and Singapore is a valued partner nation. We are in the process of rebalancing our national security focus to this region, and our participation in the Singapore Airshow is of the highest importance to the U.S.

“It is also important that while here,” he continued, “we have an opportunity to meet with industry, government and military leaders and discuss how we can work together to ensure security, stability and prosperity in the region.”
The undersecretary added that the tradeshow portion of the event gave the Defense Department the opportunity to promote U.S. security cooperation programs and foreign military sales.

“We see ourselves as the ‘provider of choice’ and want to assist our partners who see a need to improve their military capabilities,” he said. “We also want to ensure technical and operational interoperability with our partners; this can be critical during times of crisis and helps strengthen our military-to-military relationships.”

Formally known as the Changi International Airshow, the Singapore airshow started in 2008 as a partnership between the Civil Aviation Authority of Singapore and the Defence Science and Technology Agency. It is among the most prominent airshows in the world, and is Asia’s largest aerospace and defense exhibition.
This is the fourth edition of the biennial aerospace and defense event, with more than 1,000 companies from 50 countries exhibiting, including 163 from the United States, the largest number ever.

The 2012 airshow hosted more than 120,000 visitors. Singaporean officials and event organizers said they expected even more visitors to attend this year. The airshow, held at Changi East International Airport, was open to the public Feb. 15-16.

WHITE HOUSE STATEMENT ON UKRAINE

FROM:  THE WHITE HOUSE 
Statement by the Press Secretary on Ukraine

We are outraged by the images of Ukrainian security forces firing automatic weapons on their own people.  We urge President Yanukovych to immediately withdraw his security forces from downtown Kyiv and to respect the right of peaceful protest, and we urge protesters to express themselves peacefully.  We urge the Ukrainian military not to get involved in a conflict that can and should be resolved by political means.   The use of force will not resolve the crisis -- clear steps must be taken to stop the violence and initiate meaningful dialogue that reduces tension and addresses the grievances of the Ukrainian people.  The United States will work with our European allies to hold those responsible for violence accountable and to help the Ukrainian people get a unified and independent Ukraine back on the path to a better future.

TWO SENTENCED FOR ROLES IN HOME LOAN MODIFICATION SCAM

FROM:  U.S. JUSTICE DEPARTMENT 
Thursday, February 20, 2014
Two Florida Men Sentenced for Defrauding Thousands of Homeowners in $4 Million Nationwide Home Loan Modification Scam

Two Florida men were sentenced today to serve 84 months in prison for defrauding thousands of homeowners in a $4 million nationwide home loan modification scheme.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Carmen M. Ortiz of the District of Massachusetts and Special Inspector General for the Troubled Asset Relief Program (SIGTARP) Christy Romero made the announcement.

Christopher S. Godfrey, 44, of Delray Beach, Fla., and Dennis Fischer, 42, of Highland Beach, Fla., were sentenced by U.S. District Court Judge Rya W. Zobel of the District of Massachusetts and ordered to serve three years of supervised release following their prison term.

The defendants were convicted on Nov. 14, 2013, after a two-week trial, of one count of conspiracy, eight counts of wire fraud, eight counts of mail fraud and one count of misusing a government seal.

“These men stole millions of dollars from struggling Americans who had achieved the dream of home ownership and sought help to refinance their mortgages and save their homes from foreclosure,” said Acting Assistant Attorney General Raman.  “Today’s sentences should serve as a warning to anyone who exploits distressed homeowners and prevents them from getting the real help they need.”

“These convictions and sentences should send the message that those who prey on the most economically vulnerable among us to line their own pockets will be caught, convicted and given the long prison sentences they deserve,” said U.S. Attorney Ortiz.

“Scamming homeowners by selling for $400 to $2,000 what is a free application to TARP’s housing program is a despicable crime, and for their crimes, Godfrey and Fischer will each spend the next seven years in federal prison,” said Special Inspector General Romero.  “Godfrey and Fischer swindled homeowners out of more than $4 million, which they used for extravagant trips to Dubai and France, luxury shopping sprees, and to pay their own mortgages on waterfront homes in Florida beach communities.  SIGTARP and our law enforcement partners will put an end to scams that exploit TARP and bring swift justice to con men who perpetrate these scams.”

According to the evidence presented at trial, from January 2009 through May 2011, Godfrey, Fischer and their employees, operating under the name Home Owners Protection Economics Inc. (HOPE), made a series of misrepresentations to induce struggling homeowners to pay HOPE a $400 to $2,000 up-front fee in exchange for HOPE’s help obtaining federally funded home loan modifications.   Among these misrepresentations were the claims that, with HOPE’s assistance, the homeowner was guaranteed to receive a loan modification under the Home Affordable Modification Program (HAMP), which is part of the Troubled Asset Relief Program (TARP) and is a federally funded mortgage-assistance program.   For example, the defendants routinely claimed that the homeowner had already been approved for a loan modification, provided phony “approval codes,” quoted new (and wholly fictitious) mortgage terms and due dates, touted their 98 percent past success rate and claimed that they were “underwriters” or were otherwise affiliated with the homeowners’ mortgage companies.   HOPE also claimed that it would offer homeowners refunds in the unlikely event that they did not receive a loan modification.

According to the trial evidence, in exchange for the up-front fees, HOPE sent its customers, including homeowners in Massachusetts, a do-it-yourself application package, which was virtually identical to the application that the government provides free of charge.   The HOPE customers had no advantage in the application process, and, in fact, most of their applications were denied.   Through these misrepresentations, HOPE was able to persuade thousands of homeowners to pay more than $4 million in fees.

Trial evidence also showed that the defendants claimed that they operated HOPE as a non-profit, when, in fact, they operated as a for-profit telemarketing fraud scheme.   Godfrey and Fischer used funds that homeowners had paid into the purported non-profit’s bank account to pay for their trips to Dubai and the South of France, to shop at luxury stores, to pay for their pool service, and to pay the mortgages on their waterfront home and condominium.   The remaining two defendants in the case, Vernell Burris Jr. and Brian Kelly, have pleaded guilty and will be sentenced on Feb. 25, 2014.

The case was investigated by SIGTARP and is being prosecuted by Senior Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Adam Bookbinder in the District of Massachusetts’s Computer Crimes Unit.

UNEMPLOYMENT INSURANCE CLAIMS REPORT FOR WEEK ENDING FEBRUARY 15, 2014

FROM:  U.S. LABOR DEPARTMENT 
UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT

          SEASONALLY ADJUSTED DATA

In the week ending February 15, the advance figure for seasonally adjusted initial claims was 336,000, a decrease of 3,000 from the previous week's unrevised figure of 339,000. The 4-week moving average was 338,500, an increase of 1,750 from the previous week's unrevised average of 336,750.
The advance seasonally adjusted insured unemployment rate was 2.3 percent for the week ending February 8, an increase of 0.1 percentage point from the prior week's revised rate. The advance number for seasonally adjusted insured unemployment during the week ending February 8 was 2,981,000, an increase of 37,000 from the preceding week's revised level of 2,944,000. The 4-week moving average was 2,959,750, a decrease of 6,500 from the preceding week's revised average of 2,966,250.

UNADJUSTED DATA

The advance number of actual initial claims under state programs, unadjusted, totaled 323,151 in the week ending February 15, a decrease of 35,008 from the previous week. There were 351,026 initial claims in the comparable week in 2013.

The advance unadjusted insured unemployment rate was 2.6 percent during the week ending February 8, unchanged from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 3,440,333, a decrease of 12,426 from the preceding week. A year earlier, the rate was 2.9 percent and the volume was 3,668,711.

The total number of people claiming benefits in all programs for the week ending February 1 was 3,525,006, an increase of 7,100 from the previous week. There were 5,581,677 persons claiming benefits in all programs in the comparable week in 2013.

No state was triggered "on" the Extended Benefits program during the week ending February 1.

Initial claims for UI benefits filed by former Federal civilian employees totaled 1,198 in the week ending February 8, a decrease of 176 from the prior week. There were 2,108 initial claims filed by newly discharged veterans, an increase of 192 from the preceding week.

There were 21,505 former Federal civilian employees claiming UI benefits for the week ending February 1, a decrease of 1,568 from the previous week. Newly discharged veterans claiming benefits totaled 29,681, a decrease of 958 from the prior week.

The highest insured unemployment rates in the week ending February 1 were in Alaska (5.8), Pennsylvania (4.2), Rhode Island (4.0), Connecticut (3.9), New Jersey (3.9), Wisconsin (3.8), California (3.7), Montana (3.7), Illinois (3.6), Puerto Rico (3.5), West Virginia (3.5), and Massachusetts (3.4).
The largest increases in initial claims for the week ending February 8 were in Georgia (+7,229), North Carolina (+1,347), South Carolina (+1,292), Alabama (+1,191), and California (+1,145), while the largest decreases were in New York (-2,721), Ohio (-2,348), New Jersey (-2,035), Connecticut (-1,149), and New Hampshire (-1,146).

U.S. CONGRATULATES PEOPLE OF ESTONIA ON THEIR NATIONAL DAY

FROM:  U.S. STATE DEPARTMENT 
On the Occasion of Estonia's National Day
Press Statement
John Kerry
Secretary of State
Washington, DC
February 20, 2014

On behalf of President Obama and the people of the United States, I congratulate the people of Estonia as they celebrate 96 years since the founding of their republic in 1918.

Estonia is a key ally and a recognized leader on cyber security and Internet freedom. In December 2013, Estonia and the United States formalized our commitment to continue to work together to enhance an open, secure, and reliable information and communications infrastructure while we also continue to build our law enforcement capacity, educational and cultural linkages, and civil society partnerships.

As Estonia marks its tenth anniversary in NATO, we recognize its commitment to peace and to our collective security. We particularly appreciate that Estonia continues to meet the NATO goals of committing two percent of its Gross Domestic Product on defense. We also welcome Estonia’s efforts to increase bilateral trade and investment, as well as its support for the goals of the U.S.-EU Transatlantic Trade and Investment Partnership.

As Estonians celebrate their independence with family and friends, the United States stands with them as a steadfast partner and friend. I wish all Estonian people continued peace and prosperity.

U.S. DEFENSE DEPARTMENT CONTRACTS FOR JANUARY 20, 2014

FROM:  U.S. DEFENSE DEPARTMENT 
CONTRACTS

 ARMY 

Ameresco, Inc. (W912DY-14-D-0036), Framingham, Mass.; Wheelabrator Technologies, Inc. (W912DY-14-D-0041), Hampden, N.H., were awarded a maximum $7,000,000,000 firm-fixed-price, multiple-award, indefinite-delivery/indefinite-quantity contract for biomass technology.  Funding and performance location will be determined with each order.  Estimated completion date is Feb. 12, 2024.  Bids were solicited via the Internet with fifty-two received.  Army Corps of Engineers, Huntsville, Ala. is the contracting activity.

Ameresco, Inc. (W912DY-14-D-0031), Framingham, Mass.; M. Arthur Gensler, Jr. & Assoc., (W912DY-14-D-0032), Dallas, Texas; *Infigen Energy US Development LLC (W912DY-14-D-0033), Dallas, Texas were awarded a maximum $7,000,000,000 firm-fixed-price, multiple-award, indefinite-delivery/indefinite-quantity contract for wind technology.  Funding and performance location will be determined with each order.  Estimated completion date is Feb. 12, 2024.  Bids were solicited via the Internet with forty-five received.  Army Corps of Engineers, Huntsville, Ala. is the contracting activity.

Ameresco, Inc. (W912DY-14-D-0016), Framingham, Mass.; Chevron Energy Solutions Co. (W912DY-14-D-0017), San Francisco, Calif.; Constellation NewEnergy, Inc. (W912DY-14-D-0018), Baltimore, Md.; *Distributed Sun, LLC (W912DY-14-D-0019) Washington, D.C.; *Energy Ventures, LLC (W912DY-14-D-0020), Rockville, Md.; First Solar Development, Inc. (W912DY-14-D-0021) San Francisco, Calif.; *FLS Energy (W912DY-14-D-0022), Asheville, N.C.; Linc Government Services, LLC (W912DY-14-D-0023), Hopkinsville, Ky.; RE Independence Co. LLC (W912DY-14-D-0024) San Francisco, Calif.; *Sun Edison Government Solutions, LLC (W912DY-14-D-0025), Beltsville, Md.; Sun Edison LLC (W912DY-14-D-0026), Beltsville, Md.; SunWize Technologies, Inc. (W912DY-14-D-0027), San Jose, Cal.; *TransGen Energy, Inc. W912DY-14-D-0028) Rockville, Md.; Victory Renewables, LLC: W912DY-14-D-0029), Juno Beach, Fla.; EDF Renewable Energy (W912DY-14-D-0030), San Diego, Calif. were awarded a maximum $7,000,000,000 firm-fixed-price, multiple-award, indefinite delivery/indefinite quantity contract for solar technology.  Funding and performance location will be determined with each order.  Estimated completion date is Feb. 12, 2024.  Bids were solicited via the internet with 114 received.  Army Corps of Engineers, Huntsville, Ala. is the contracting activity.

NAVY

Engility, Chantilly, Va., is being awarded a $24,882,608, cost-plus-fixed-fee, indefinite-delivery/indefinite quantity, multiple-award contract for engineering and technical support at the Indian Head Explosive Ordnance Disposal Technology Division.  The contractor will advise and assist with various tasks in support of engineering support, system engineering and technical analysis, development of programs and improvised explosive device defeat technology.  Work will be performed in Indian Head, Md., and is expected to be completed by February 2017.  Fiscal 2014 Defense business operations funds in the amount of $10,000 will be obligated at time of award and will expire at the end of the current fiscal year.  This contract was competitively procured via the Federal Business Opportunities website, with three offers received. Indian Head Explosive Ordnance Disposal Technology Division, Indian Head, Md., is the contracting activity. (N00174-14-D-0005)

A-T Solutions, Fredricksburg, Va., is being awarded a $23,538,703 cost-plus-fixed-fee, indefinite-delivery/indefinite-quantity, multiple-award contract for engineering and technical support at the Indian Head Explosive Ordnance Disposal Technology Division.  The contractor will advise and assist with various tasks in support of engineering support, system engineering and technical analysis, development of programs and improvised explosive device defeat technology.  Work will be performed in Indian Head, Md., and is expected to be completed by February 2017.  Fiscal 2014 Defense business operations funds in the amount of $10,000 will be obligated at time of award and will expire at the end of the current fiscal year.  This contract was competitively procured via the Federal Business Opportunities website, with three offers received.  Indian Head Explosive Ordnance Disposal Technology Division, Indian Head, Md., is the contracting activity (N00174-14-D-0004).

Lockheed Martin Corp., Lockheed Martin Aeronautics Co., Fort Worth, Texas, is being awarded a $9,515,086 cost-plus-incentive-fee modification to the previously awarded F-35 Lightning II Low Rate Initial Production Lot VI contract (N00019-11-C-0083).  This modification provides for Netherlands-specific, non-recurring sustainment activities to include procurement of Autonomic Logistics Information Systems equipment and logistics support for non-recurring engineering activities.  Work will be performed in Fort Worth, Texas (35 percent); El Segundo, Calif. (25 percent); Warton, United Kingdom (20 percent); Orlando, Fla. (10 percent); Nashua, N.H. (5 percent); and Baltimore, Md. (5 percent), and is expected to be completed in April 2015.   International Partner funds in the amount of $4,757,543 will be obligated at time of award, none of which will expire at the end of the current fiscal year.  The Naval Air Systems Command, Patuxent River, Md., is the contracting activity.

AIR FORCE
 
APRO International, Inc., Vienna, Va. (FA4890-14-D-0001 for $38,306,747), Goldbelt Falcon LLC, Chesapeake, Va. (FA4890-14-D-0002 for $45,565,135), Science & Management Resources, Inc., Pensacola, Fla., (FA4890-14-D-0003 for $49,261,610), United Paradyne Corp., Santa Maria, Calif. (FA4890-14-D-0004 for $40,769,565),Y-Tech Services, Inc., Anchorage, Alaska (FA4890-14-D-0005 for $46,782,310), were awarded a firm-fixed-price, indefinite-delivery/indefinite-quantity, multiple-vendor award for Air Force Enterprise Contracted (AFEC) Precision Measurement Equipment Laboratories (PMEL).   This was a competitive acquisition with five bids received.  The contractor shall provide all management, personnel, equipment, tools, materials, supervision, and other items and services necessary to perform the PMEL services as defined in the Performance Work Statement.  Work will be performed at Barksdale Air Force Base, La.; Beale AFB, Calif.; Cannon AFB, N.M.; Dyess AFB, Texas; Ellsworth AFB, S.D.; Minot AFB, N.D.; Moody AFB, Ga.; Offutt AFB, Neb.; Royal Air Force (RAF) Feltwell, United Kingdom; and Whiteman AFB, Mo., and is expected to be complete by Sept. 2019.  Fiscal year 2014 operations and maintenance funds will be awarded subject to availability of funds.  Headquarters Air Combat Command, Acquisition Management and Integration Center, Langley AFB, Va., is the contracting activity.


* Small Business

GOVERNMENT INTERVENES IN TENET HEALTHCARE LAWSUIT

FROM:  U.S. JUSTICE DEPARTMENT
Wednesday, February 19, 2014
Government Intervenes in Lawsuit Against Tenet Healthcare Corp. and Georgia Hospital Owned by Health Management Associates Inc. Alleging Payment of Kickbacks

The government has intervened in a False Claims Act lawsuit against Tenet Healthcare Corp. (Tenet) and four of its hospitals in Georgia and South Carolina, as well as a hospital in Monroe, Ga., owned by Health Management Associates Inc. (HMA), alleging that the hospitals paid kickbacks to obstetric clinics serving primarily undocumented Hispanic women in return for referral of those patients for labor and delivery at the hospitals.  The hospitals then billed the Medicaid programs in Georgia and South Carolina for the services provided to the referred patients and, in some instances, also obtained additional Medicare reimbursement based on the influx of low-income patients.  Tenet and HMA are two of the largest owner/operators of hospitals in the United States.  HMA was acquired by Community Health Systems last month.  The government also is intervening against the clinics and related entities known as Hispanic Medical Management d/b/a Clinica de la Mama.

“The Department of Justice is committed to ensuring that health care providers who pay kickbacks in return for patient referrals are held accountable,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “Schemes such as this one corrupt the health care system and take advantage of vulnerable patients.”

“My office has made the investigation of health care fraud a priority,” said U.S. Attorney for the Middle District of Georgia Michael J. Moore.  “In a time when too many people were struggling to get health care for themselves and their children, Tenet and these hospitals plundered a system set up for those truly in need.  This kind of scheme drives up costs for everyone, not just the vulnerable patients and groups like those targeted in this case.”

The lawsuit alleges that four Tenet hospitals, Atlanta Medical Center, North Fulton Regional Hospital, Spalding Regional Hospital and Hilton Head Hospital in South Carolina, and one HMA facility, Walton Regional Medical Center (since renamed Clearview Regional Medical Center), paid kickbacks to Hispanic Medical Management d/b/a Clinica de la Mama (Clinica) and related entities in return for Clinica’s agreement to send pregnant women to their facilities for deliveries paid for by Medicaid, in violation of the federal Medicare and Medicaid Anti-Kickback Statute.  The kickbacks were disguised as payments for a variety of services allegedly provided by Clinica.

The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and other federally funded programs.  The Anti-Kickback Statute is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives and is instead based on the best interests of the patient.

“Investigations such as these are a high priority for the FBI, and we are determined to hold accountable providers that enrich themselves at the expense of government programs and damage the public trust,” said FBI Assistant Director Ronald T. Hosko.  “The FBI is dedicated to preventing and combating all forms of health care fraud; working with federal, state and local partners to effectively resolve allegations and engaging with the public to identify potential schemes.”

The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government when they believe that defendants submitted false claims for government funds and to receive a share of any recovery.  The False Claims Act also permits the government to intervene in such lawsuits, as it has done in this case.  The lawsuit is pending in the Middle District of Georgia .

The government’s intervention in this matter illustrates its emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius.  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 this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $19 billion through False Claims Act cases, with more than $13.4 billion of that amount recovered in cases involving fraud against federal health care programs.

These matters were investigated by the Commercial Litigation Branch of the Justice Department’s Civil Division, the Fraud Section of the department’s Criminal Division, the U.S. Attorney’s Offices for the Middle and Northern Districts of Georgia, the Department of Health and Human Services Office of Inspector General, the Federal Bureau of Investigation and the Office of the Attorney General for the State of Georgia.

The case is captioned United States ex rel. Williams v. Health Mgmt. Assocs. Inc., Tenet Healthcare, et al., No. 3:09-CV-130 (M.D. Ga.).

The claims asserted against Tenet, the HMA facility and Clinica are allegations only, and there has been no determination of liability.

ARMY SERGEANT PLEADS GUILTY TO FUEL THEFT IN AFGHANISTAN

FROM:  U.S. JUSTICE DEPARTMENT 
Wednesday, February 19, 2014
Army Soldier Pleads Guilty for Role in Stealing Fuel in Afghanistan

U.S. Army Sergeant Albert Kelly III, 28, of Fort Knox, Ky., pleaded guilty today to theft charges for his role in the theft of fuel at Forward Operating Base (FOB) Salerno in Afghanistan.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney David J. Hale of the Western District of Kentucky made the announcement.

The plea was entered in federal court in Louisville, Ky., before Magistrate Judge James D. Moyer of the Western District of Kentucky.   Kelly faces a maximum penalty of 10 years in prison when he is sentenced on May 22, 2014, by U.S. District Judge John G. Heyburn II.

According to court records, Kelly was a soldier in the United States Army and was assigned to FOB Salerno from January 2011 to January 2012.   For most of that time, Kelly served as a specialist, and his duties included overseeing the delivery of fuel into FOB Salerno.   Typically, the fuel was brought into the base by Afghan trucking companies driven by Afghan nationals.   Kelly’s duties included verifying the amounts of the fuel that were downloaded at FOB Salerno and preparing and certifying documents that accounted for the fuel that was downloaded.

From in or about November 2011 through January 2012, Kelly diverted and permitted the diversion of fuel delivery trucks from FOB Salerno to other locations, where the trucks would then be downloaded and the fuel stolen.   To conceal this diversion, he falsely certified that the diverted fuel was in fact delivered and downloaded at FOB Salerno.

In exchange for assisting the fuel theft, Kelly received approximately $57,000 from the Afghan trucking company for diverting approximately 25,000 gallons of fuel.   The loss to the government was approximately $100,000.

This case was investigated by the Special Inspector General for Afghanistan Reconstruction (SIGAR).  The prosecution is being handled by Special Trial Attorney Mark H. Dubester, on detail to the Criminal Division’s Fraud Section from SIGAR, and Assistant United States Attorney Michael A. Bennett of the Western District of Kentucky.

EMPLOYMENT HOUSEHOLD AND ESTABLISHMENT SURVEY DATA FOR MONTH OF JANUARY 2014

FROM:  LABOR DEPARTMENT 
Household Survey Data

Both the number of unemployed persons, at 10.2 million, and the unemployment rate, at 6.6 percent, changed little in January. Since October, the jobless rate has decreased by 0.6 percentage point.

Among the major worker groups, the unemployment rates for adult men (6.2 percent), adult women (5.9 percent), teenagers (20.7 percent), whites (5.7 percent), blacks (12.1 percent), and Hispanics (8.4 percent) showed little change in January. The jobless rate for Asians was 4.8 percent (not seasonally adjusted), down by 1.7 percentage points over the year.

The number of long-term unemployed (those jobless for 27 weeks or more), at 3.6 million, declined by 232,000 in January. These individuals accounted for 35.8 percent of the unemployed. The number of long-term unemployed has declined by 1.1 million over the year.

After accounting for the annual adjustment to the population controls, the civilian labor force rose by 499,000 in January, and the labor force participation rate edged up to 63.0 percent. Total employment, as measured by the household survey, increased by 616,000 over the month, and the employment-population ratio increased by 0.2 percentage point to 58.8 percent.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) fell by 514,000 to 7.3 million in January. These individuals were working part time because their hours had been cut back or because they were unable to find full-time work.

In January, 2.6 million persons were marginally attached to the labor force, little changed from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched forwork in the 4 weeks preceding the survey.

Among the marginally attached, there were 837,000 discouraged workers in January, about unchanged from a year earlier. Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.8 million persons marginally attached to the labor force in January had not searched for work for reasons such as school attendance or family responsibilities.

Establishment Survey Data

Total nonfarm payroll employment increased by 113,000 in January. In 2013, employment growth averaged 194,000 per month. In January, job gains occurred in construction, manufacturing, wholesale trade, and mining.

Construction added 48,000 jobs over the month, more than offsetting a decline of 22,000 in December. In January, job gains occurred in both residential and nonresidential building (+13,000 and +8,000, respectively) and in nonresidential specialty trade contractors (+13,000). Heavy and civil engineering construction also added 10,000 jobs.

Employment in manufacturing increased in January (+21,000). Over the month, job gains occurred in machinery (+7,000), wood products (+5,000), and motor vehicles and parts (+5,000). Manufacturing added an average of 7,000 jobs per month in 2013.

In January, wholesale trade added 14,000 jobs, with most of the increase occurring in nondurable goods (+10,000).

Mining added 7,000 jobs in January, compared with an average monthly gain of 2,000 jobs in 2013.

Employment in professional and business services continued to trend up in January (+36,000).
The industry added an average of 55,000 jobs per month in 2013. Within the industry, professional and technical services added 20,000 jobs in January.

Leisure and hospitality employment continued to trend up over the month (+24,000). Job growth in the industry averaged 38,000 per month in 2013.

Employment in health care was essentially unchanged in January for the second consecutive month.  Health care added an average of 17,000 jobs per month in 2013.

Employment in retail trade changed little in January (-13,000). Within the industry, sporting goods, hobby, book, and music stores lost 22,000 jobs, offsetting job gains in the prior 3 months. In January, motor vehicle and parts dealers added 7,000 jobs.

In January, federal government employment decreased by 12,000; the U.S. Postal Service accounted for most of this decline (-9,000).

Employment in other major industries, including transportation and warehousing, information, and financial activities, showed little or no change over the month.

In January, the average workweek for all employees on private nonfarm payrolls was unchanged at 34.4 hours. The manufacturing workweek declined by 0.2 hour to 40.7 hours, and factory overtime edged down by 0.1 hour to 3.4 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.5 hours.

Average hourly earnings for all employees on private nonfarm payrolls rose by 5 cents to $24.21. Over the year, average hourly earnings have risen by 46 cents, or 1.9 percent. In January, average hourly earnings of private-sector production and nonsupervisory employees increased by 6 cents to $20.39.

The change in total nonfarm payroll employment for November was revised from +241,000 to +274,000, and the change for December was revised from +74,000 to +75,000. With these revisions, employment gains in November and December were 34,000 higher than previously reported. Monthly revisions result from additional reports received from businesses since the last published estimates and the monthly recalculation of seasonal factors. The annual benchmark process also contributed to the revisions in this news release.

IRS ISSUES WARNING REGARDING TAX SCAMS FOR 2014

FROM:  INTERNAL REVENUE SERVICE 
IRS Releases the “Dirty Dozen” Tax Scams for 2014; Identity Theft, Phone Scams Lead List

WASHINGTON — The Internal Revenue Service today issued its annual “Dirty Dozen” list of tax scams, reminding taxpayers to use caution during tax season to protect themselves against a wide range of schemes ranging from identity theft to return preparer fraud.

The Dirty Dozen listing, compiled by the IRS each year, lists a variety of common scams taxpayers can encounter at any point during the year. But many of these schemes peak during filing season as people prepare their tax returns.

"Taxpayers should be on the lookout for tax scams using the IRS name,” said IRS Commissioner John Koskinen. “These schemes jump every year at tax time. Scams can be sophisticated and take many different forms. We urge people to protect themselves and use caution when viewing e-mails, receiving telephone calls or getting advice on tax issues.”

Illegal scams can lead to significant penalties and interest and possible criminal prosecution. IRS Criminal Investigation works closely with the Department of Justice (DOJ) to shutdown scams and prosecute the criminals behind them.

The following are the Dirty Dozen tax scams for 2014:

Identity Theft

Tax fraud through the use of identity theft tops this year’s Dirty Dozen list. Identity theft occurs when someone uses your personal information, such as your name, Social Security number (SSN) or other identifying information, without your permission, to commit fraud or other crimes. In many cases, an identity thief uses a legitimate taxpayer’s identity to fraudulently file a tax return and claim a refund.

The agency’s work on identity theft and refund fraud continues to grow, touching nearly every part of the organization. For the 2014 filing season, the IRS has expanded these efforts to better protect taxpayers and help victims.

The IRS has a special section on IRS.gov dedicated to identity theft issues, including YouTube videos, tips for taxpayers and an assistance guide. For victims, the information includes how to contact the IRS Identity Protection Specialized Unit. For other taxpayers, there are tips on how taxpayers can protect themselves against identity theft.

Taxpayers who believe they are at risk of identity theft due to lost or stolen personal information should contact the IRS immediately so the agency can take action to secure their tax account. Taxpayers can call the IRS Identity Protection Specialized Unit at 800-908-4490. More information can be found on the special identity protection page.

Pervasive Telephone Scams

The IRS has seen a recent increase in local phone scams across the country, with callers pretending to be from the IRS in hopes of stealing money or identities from victims.

These phone scams include many variations, ranging from instances from where callers say the victims owe money or are entitled to a huge refund. Some calls can threaten arrest and threaten a driver’s license revocation. Sometimes these calls are paired with follow-up calls from people saying they are from the local police department or the state motor vehicle department.

Characteristics of these scams can include:

Scammers use fake names and IRS badge numbers. They generally use common names and surnames to identify themselves.
Scammers may be able to recite the last four digits of a victim’s Social Security Number.
Scammers “spoof” or imitate the IRS toll-free number on caller ID to make it appear that it’s the IRS calling.
Scammers sometimes send bogus IRS emails to some victims to support their bogus calls.
Victims hear background noise of other calls being conducted to mimic a call site.
After threatening victims with jail time or a driver’s license revocation, scammers hang up and others soon call back pretending to be from the local police or DMV, and the caller ID supports their claim.

In another variation, one sophisticated phone scam has targeted taxpayers, including recent immigrants, throughout the country. Victims are told they owe money to the IRS and it must be paid promptly through a pre-loaded debit card or wire transfer. If the victim refuses to cooperate, they are then threatened with arrest, deportation or suspension of a business or driver’s license. In many cases, the caller becomes hostile and insulting.

If you get a phone call from someone claiming to be from the IRS, here’s what you should do: If you know you owe taxes or you think you might owe taxes, call the IRS at 1.800.829.1040. The IRS employees at that line can help you with a payment issue – if there really is such an issue.

If you know you don’t owe taxes or have no reason to think that you owe any taxes (for example, you’ve never received a bill or the caller made some bogus threats as described above), then call and report the incident to the Treasury Inspector General for Tax Administration at 1.800.366.4484.

If you’ve been targeted by these scams, you should also contact the Federal Trade Commission and use their “FTC Complaint Assistant” at FTC.gov.  Please add "IRS Telephone Scam" to the comments of your complaint.

Phishing

Phishing is a scam typically carried out with the help of unsolicited email or a fake website that poses as a legitimate site to lure in potential victims and prompt them to provide valuable personal and financial information. Armed with this information, a criminal can commit identity theft or financial theft.

If you receive an unsolicited email that appears to be from either the IRS or an organization closely linked to the IRS, such as the Electronic Federal Tax Payment System (EFTPS), report it by sending it to phishing@irs.gov.

It is important to keep in mind the IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels. The IRS has information online that can help you protect yourself from email scams.

False Promises of “Free Money” from Inflated Refunds

Scam artists routinely pose as tax preparers during tax time, luring victims in by promising large federal tax refunds or refunds that people never dreamed they were due in the first place.

Scam artists use flyers, advertisements, phony store fronts and even word of mouth to throw out a wide net for victims. They may even spread the word through community groups or churches where trust is high. Scammers prey on people who do not have a filing requirement, such as low-income individuals or the elderly. They also prey on non-English speakers, who may or may not have a filing requirement.

Scammers build false hope by duping people into making claims for fictitious rebates, benefits or tax credits. They charge good money for very bad advice. Or worse, they file a false return in a person's name and that person never knows that a refund was paid.

Scam artists also victimize people with a filing requirement and due a refund by promising inflated refunds based on fictitious Social Security benefits and false claims for education credits, the Earned Income Tax Credit (EITC), or the American Opportunity Tax Credit, among others.

The IRS sometimes hears about scams from victims complaining about losing their federal benefits, such as Social Security benefits, certain veteran’s benefits or low-income housing benefits. The loss of benefits was the result of false claims being filed with the IRS that provided false income amounts.

While honest tax preparers provide their customers a copy of the tax return they’ve prepared, victims of scam frequently are not given a copy of what was filed. Victims also report that the fraudulent refund is deposited into the scammer’s bank account. The scammers deduct a large “fee” before cutting a check to the victim, a practice not used by legitimate tax preparers.

The IRS reminds all taxpayers that they are legally responsible for what’s on their returns even if it was prepared by someone else. Taxpayers who buy into such schemes can end up being penalized for filing false claims or receiving fraudulent refunds.

Taxpayers should take care when choosing an individual or firm to prepare their taxes. Honest return preparers generally: ask for proof of income and eligibility for credits and deductions; sign returns as the preparer; enter their IRS Preparer Tax Identification Number (PTIN); provide the taxpayer a copy of the return.

Beware: Intentional mistakes of this kind can result in a $5,000 penalty.

Return Preparer Fraud

About 60 percent of taxpayers will use tax professionals this year to prepare their tax returns. Most return preparers provide honest service to their clients. But, some unscrupulous preparers prey on unsuspecting taxpayers, and the result can be refund fraud or identity theft.

It is important to choose carefully when hiring an individual or firm to prepare your return. This year, the IRS wants to remind all taxpayers that they should use only preparers who sign the returns they prepare and enter their IRS Preparer Tax Identification Numbers (PTINs).

The IRS also has a web page to assist taxpayers. For tips about choosing a preparer,  details on preparer qualifications and information on how and when to make a complaint, visit www.irs.gov/chooseataxpro.

Remember: Taxpayers are legally responsible for what’s on their tax return even if it is prepared by someone else. Make sure the preparer you hire is up to the task.

IRS.gov has general information on reporting tax fraud. More specifically, you report abusive tax preparers to the IRS on Form 14157, Complaint: Tax Return Preparer. Download Form 14157 and fill it out or order by mail at 800-TAX FORM (800-829-3676). The form includes a return address.

Hiding Income Offshore

Over the years, numerous individuals have been identified as evading U.S. taxes by hiding income in offshore banks, brokerage accounts or nominee entities and then using debit cards, credit cards or wire transfers to access the funds. Others have employed foreign trusts, employee-leasing schemes, private annuities or insurance plans for the same purpose.

The IRS uses information gained from its investigations to pursue taxpayers with undeclared accounts, as well as the banks and bankers suspected of helping clients hide their assets overseas. The IRS works closely with the Department of Justice (DOJ) to prosecute tax evasion cases.

While there are legitimate reasons for maintaining financial accounts abroad, there are reporting requirements that need to be fulfilled. U.S. taxpayers who maintain such accounts and who do not comply with reporting requirements are breaking the law and risk significant penalties and fines, as well as the possibility of criminal prosecution.

Since 2009, tens of thousands of individuals have come forward voluntarily to disclose their foreign financial accounts, taking advantage of special opportunities to comply with the U.S. tax system and resolve their tax obligations. And, with new foreign account reporting requirements being phased in over the next few years, hiding income offshore is increasingly more difficult.

At the beginning of 2012, the IRS reopened the Offshore Voluntary Disclosure Program (OVDP) following continued strong interest from taxpayers and tax practitioners after the closure of the 2011 and 2009 programs. The IRS works on a wide range of international tax issues with DOJ to pursue criminal prosecution of international tax evasion. This program will be open for an indefinite period until otherwise announced.

The IRS has collected billions of dollars in back taxes, interest and penalties so far from people who participated in offshore voluntary disclosure programs since 2009. It is in the best long-term interest of taxpayers to come forward, catch up on their filing requirements and pay their fair share.

Impersonation of Charitable Organizations

Another long-standing type of abuse or fraud is scams that occur in the wake of significant natural disasters.

Following major disasters, it’s common for scam artists to impersonate charities to get money or private information from well-intentioned taxpayers. Scam artists can use a variety of tactics. Some scammers operating bogus charities may contact people by telephone or email to solicit money or financial information. They may even directly contact disaster victims and claim to be working for or on behalf of the IRS to help the victims file casualty loss claims and get tax refunds.

They may attempt to get personal financial information or Social Security numbers that can be used to steal the victims’ identities or financial resources. Bogus websites may solicit funds for disaster victims. The IRS cautions both victims of natural disasters and people wishing to make charitable donations to avoid scam artists by following these tips:

To help disaster victims, donate to recognized charities.
Be wary of charities with names that are similar to familiar or nationally known organizations. Some phony charities use names or websites that sound or look like those of respected, legitimate organizations. IRS.gov has a search feature, Exempt Organizations Select Check, which allows people to find legitimate, qualified charities to which donations may be tax-deductible.
Don’t give out personal financial information, such as Social Security numbers or credit card and bank account numbers and passwords, to anyone who solicits a contribution from you. Scam artists may use this information to steal your identity and money.
Don’t give or send cash. For security and tax record purposes, contribute by check or credit card or another way that provides documentation of the gift.
Call the IRS toll-free disaster assistance telephone number (1-866-562-5227) if you are a disaster victim with specific questions about tax relief or disaster related tax issues.

False Income, Expenses or Exemptions

Another scam involves inflating or including income on a tax return that was never earned, either as wages or as self-employment income in order to maximize refundable credits. Claiming income you did not earn or expenses you did not pay in order to secure larger refundable credits such as the Earned Income Tax Credit could have serious repercussions. This could result in repaying the erroneous refunds, including interest and penalties, and in some cases, even prosecution.

Additionally, some taxpayers are filing excessive claims for the fuel tax credit. Farmers and other taxpayers who use fuel for off-highway business purposes may be eligible for the fuel tax credit. But other individuals have claimed the tax credit although they were not eligible. Fraud involving the fuel tax credit is considered a frivolous tax claim and can result in a penalty of $5,000.

Frivolous Arguments

Promoters of frivolous schemes encourage taxpayers to make unreasonable and outlandish claims to avoid paying the taxes they owe. The IRS has a list of frivolous tax arguments that taxpayers should avoid. These arguments are wrong and have been thrown out of court. While taxpayers have the right to contest their tax liabilities in court, no one has the right to disobey the law or disregard their responsibility to pay taxes.

Those who promote or adopt frivolous positions risk a variety of penalties.  For example, taxpayers could be responsible for an accuracy-related penalty, a civil fraud penalty, an erroneous refund claim penalty, or a failure to file penalty.  The Tax Court may also impose a penalty against taxpayers who make frivolous arguments in court.  

Taxpayers who rely on frivolous arguments and schemes may also face criminal prosecution for attempting to evade or defeat tax. Similarly, taxpayers may be convicted of a felony for willfully making and signing under penalties of perjury any return, statement, or other document that the person does not believe to be true and correct as to every material matter.  Persons who promote frivolous arguments and those who assist taxpayers in claiming tax benefits based on frivolous arguments may be prosecuted for a criminal felony.

Falsely Claiming Zero Wages or Using False Form 1099

Filing a phony information return is an illegal way to lower the amount of taxes an individual owes. Typically, a Form 4852 (Substitute Form W-2) or a “corrected” Form 1099 is used as a way to improperly reduce taxable income to zero. The taxpayer may also submit a statement rebutting wages and taxes reported by a payer to the IRS.

Sometimes, fraudsters even include an explanation on their Form 4852 that cites statutory language on the definition of wages or may include some reference to a paying company that refuses to issue a corrected Form W-2 for fear of IRS retaliation. Taxpayers should resist any temptation to participate in any variations of this scheme. Filing this type of return may result in a $5,000 penalty.

Some people also attempt fraud using false Form 1099 refund claims. In some cases, individuals have made refund claims based on the bogus theory that the federal government maintains secret accounts for U.S. citizens and that taxpayers can gain access to the accounts by issuing 1099-OID forms to the IRS. In this ongoing scam, the perpetrator files a fake information return, such as a Form 1099 Original Issue Discount (OID), to justify a false refund claim on a corresponding tax return.

Don’t fall prey to people who encourage you to claim deductions or credits to which you are not entitled or willingly allow others to use your information to file false returns. If you are a party to such schemes, you could be liable for financial penalties or even face criminal prosecution.

Abusive Tax Structures

Abusive tax schemes have evolved from simple structuring of abusive domestic and foreign trust arrangements into sophisticated strategies that take advantage of the financial secrecy laws of some foreign jurisdictions and the availability of credit/debit cards issued from offshore financial institutions.

IRS Criminal Investigation (CI) has developed a nationally coordinated program to combat these abusive tax schemes. CI's primary focus is on the identification and investigation of the tax scheme promoters as well as those who play a substantial or integral role in facilitating, aiding, assisting, or furthering the abusive tax scheme (e.g., accountants, lawyers).  Secondarily, but equally important, is the investigation of investors who knowingly participate in abusive tax schemes.

What is an abusive scheme? The Abusive Tax Schemes program encompasses violations of the Internal Revenue Code (IRC) and related statutes where multiple flow-through entities are used as an integral part of the taxpayer's scheme to evade taxes.  These schemes are characterized by the use of Limited Liability Companies (LLCs), Limited Liability Partnerships (LLPs), International Business Companies (IBCs), foreign financial accounts, offshore credit/debit cards and other similar instruments.  The schemes are usually complex involving multi-layer transactions for the purpose of concealing the true nature and ownership of the taxable income and/or assets.

Form over substance are the most important words to remember before buying into any arrangements that promise to "eliminate" or "substantially reduce" your tax liability.  The promoters of abusive tax schemes often employ financial instruments in their schemes.  However, the instruments are used for improper purposes including the facilitation of tax evasion.

The IRS encourages taxpayers to report unlawful tax evasion. Where Do You Report Suspected Tax Fraud Activity?

Misuse of Trusts

Trusts also commonly show up in abusive tax structures. They are highlighted here because unscrupulous promoters continue to urge taxpayers to transfer large amounts of assets into trusts. These assets include not only cash and investments, but also successful on-going businesses. There are legitimate uses of trusts in tax and estate planning, but the IRS commonly sees highly questionable transactions. These transactions promise reduced taxable income, inflated deductions for personal expenses, the reduction or elimination of self-employment taxes and reduced estate or gift transfer taxes. These transactions commonly arise when taxpayers are transferring wealth from one generation to another. Questionable trusts rarely deliver the tax benefits promised and are used primarily as a means of avoiding income tax liability and hiding assets from creditors, including the IRS.

IRS personnel continue to see an increase in the improper use of private annuity trusts and foreign trusts to shift income and deduct personal expenses, as well as to avoid estate transfer taxes. As with other arrangements, taxpayers should seek the advice of a trusted professional before entering a trust arrangement.

The IRS reminds taxpayers that tax scams can take many forms beyond the “Dirty Dozen,” and people should be on the lookout for many other schemes. More information on tax scams is available at IRS.gov.

COMPANY AND OWNER TO PAY $6.2 MILLION FOR PRECIOUS METALS FRAUD SCHEME

FROM:  COMMODITY FUTURES TRADING COMMISSION 
CFTC Orders Florida-based Worth Asset Management and its Owner, Paul L. Kaulesar, to pay over $6.2 Million in Restitution and a Fine for Multi-Million Dollar Fraudulent Precious Metals Scheme

Washington DC – The U.S. Commodity Futures Trading Commission (CFTC) today filed and settled charges against Worth Asset Management LLC (Worth Asset) of West Palm Beach, Florida, and its sole owner and manager, Paul L. Kaulesar of Royal Palm Beach, for solicitation fraud and engaging in illegal, off-exchange precious metals transactions. Neither Worth Asset nor Kaulesar has ever been registered with the CFTC.

The CFTC Order requires Worth Asset and Kaulesar jointly to pay a $1,565,000 civil monetary penalty and restitution to their customers totaling $4,696,640. The Order also imposes permanent trading and registration bans against Worth Asset and Kaulesar and prohibits them from violating the provisions of the Commodity Exchange Act and a CFTC Regulation, as charged.

The Order finds that, between July 16, 2011 and March 31, 2013, Worth Asset and Kaulesar operated a telemarketing firm that solicited individual retail customers to enter into financed precious metals transactions in gold, silver, and platinum. The large majority of their transactions involved the sale of leveraged silver contracts to unsophisticated investors purchasing physical metals by paying as little as 20 percent of the total price and receiving a loan for the balance of the transaction, according to the Order. Customers were also charged a 15 percent commission on the total leveraged value of the metal transaction, as well as monthly interest, according to the Order.

However, according to the Order, Worth Asset and Kaulesar did not purchase physical commodities on the customers’ behalf. Rather, they aggregated the customer payments received, transferred a portion of those funds to their margin trading account, and made book entries in an electronic database reflecting the customer transaction details. During the period, Worth Asset and Kaulesar received $4,696,640, the difference between the funds that customers sent to them and what they returned to customers, the Order also finds.

Illegal Contracts

The precious metals transactions offered by Worth Asset and Kaulesar were illegal contracts because they were not executed on or subject to the rules of a board of trade, exchange, or contract market, as required by the Commodity Exchange Act, according to the Order.

Solicitation Fraud

Worth Asset and Kaulesar defrauded customers and potential customers by misrepresenting the potential profits from leveraged precious metals contracts and failing to disclose the past performance of the precious metals contracts they offered, the Order finds. One piece of their promotional material, for example, emphasized the profits that could purportedly be obtained through precious metals transactions, claiming that “[r]enowned precious metals analyst, [name omitted], predicts Silver to top $60 an ounce by the end of 2012.” However, Worth Asset and Kaulesar failed to inform customers that at least 88 percent of the firm’s customers lost money on their financed precious metals investments.

CFTC Division of Enforcement staff members responsible for this case are Kyong J. Koh, Todd Kelly, Peter M. Haas, and Paul G. Hayeck.

* * * * *

CFTC’s Precious Metals Customer Fraud Advisory

The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Precious Metals Fraud Advisory, which alerts customers to precious metals fraud and lists simple ways to spot precious metals scams.

ADDITIONAL $100 MILLION WILL BE PROVIDED TO AID IN CALIFORNIA DROUGHT RELIEF

FROM:  U.S. AGRICULTURE DEPARTMENT 
Obama Administration Announces Additional Assistance to Californians Impacted by Drought

USDA will provide up to $100 million in livestock disaster assistance, additional $10 million for water conservation.

FRESNO, Calif., Feb. 14, 2014 – Agriculture Secretary Tom Vilsack joined President Barack Obama in Fresno, Calif., today to announce that the U.S. Department of Agriculture (USDA) will provide additional assistance to help farmers, ranchers and residents affected by severe drought in California. At President Obama's direction, USDA has made implementation of the 2014 Farm Bill livestock disaster assistance programs a top priority and plans to have the programs available for sign up by April 15, 2014.


"President Obama and I will continue to do everything within our power to support California farmers, ranchers and families living in drought-stricken areas. This assistance, coupled with other aid being made available across government, should provide some relief during this difficult time," said Vilsack. "Thanks to the newly-signed Farm Bill, we are now able to offer long-awaited livestock disaster assistance, which will provide needed stability for California livestock producers impacted by drought."


USDA has declared 54 counties in California as primary natural disaster areas due to drought. Additional USDA resources announced for California and other drought-stricken states today include:


$100 million in livestock disaster assistance for California producers. The 2014 Farm Bill contains permanent livestock disaster programs including the Livestock Forage Disaster Program, which will help producers in California and other areas recover from the drought. At President Obama's direction, USDA is making implementation of the disaster programs a top priority and plans to have the programs available for sign up in 60 days. Producers will be able to sign up for the livestock disaster programs for losses not only for 2014 but for losses they experienced in 2012 and 2013. While these livestock programs took over a year to get assistance out the door under the last Farm Bill– USDA has committed to cut that time by more than 80 percent and begin sign-up in April. California alone could potentially receive up to $100 million for 2014 losses and up to $50 million for previous years. $15 million in targeted conservation assistance for the most extreme and exceptional drought areas. This includes $5 million in additional assistance to California and $10 million for drought-impacted areas in Texas, Oklahoma, Nebraska, Colorado and New Mexico. The funding is available through the Environmental Quality Incentives Program (EQIP) administered by USDA. The assistance helps farmers and ranchers implement conservation practices that conserve scarce water resources, reduce wind erosion on drought-impacted fields and improve livestock access to water. $5 million in targeted Emergency Watershed Protection (EWP) Program assistance to the most drought impacted areas of California to protect vulnerable soils. EWP helps communities address watershed impairments due to drought and other natural occurrences. This funding will help drought-ravaged communities and private landowners address watershed impairments, such as stabilizing stream banks and replanting upland sites stripped of vegetation. $60 million has been made available to food banks in the State of California to help families that may be economically impacted by the drought. The U.S. Department of Agriculture (USDA) is providing help to food banks through The Emergency Food Assistance Program (TEFAP). 600 summer meal sites to be established in California's drought stricken areas. The U.S. Department of Agriculture (USDA) is working with the California Department of Education to target efforts to expand the number of Summer Food Service Program meal sites this summer. There are expected to be close to 600 summer meal sites throughout the drought stricken areas. $3 million in Emergency Water Assistance Grants for rural communities experiencing water shortages. U.S. Department of Agriculture (USDA) is making $3 million in grants available to help rural communities that are experiencing a significant decline in the quality or quantity of drinking water due to the drought obtain or maintain water sources of sufficient quantity and quality. These funds will be provided to eligible, qualified communities by application through USDA-Rural Development's Emergency Community Water Assistance Grants (ECWAG). California state health officials have already identified 17 small community water districts in 10 counties that are at risk of running out of water in 60-120 days. This number is expected to increase if current conditions persist.

Today's announcements build on other recent USDA efforts to help farmers, ranchers, and forest landowners mitigate the impacts of drought. Last week, USDA announced $20 million in Environmental Quality Incentives Program (EQIP) funds for agricultural conservation enhancements on key agricultural lands in California. These enhancements include irrigation efficiency, cover crops, orchard pruning, and protection of grazing lands. USDA also announced $15 million in Conservation Innovation Grants (CIG) in available funding to state and local governments, Tribes, universities, businesses and agricultural producers. These grants are dedicated to stimulating the development and adoption of innovative conservation approaches and technologies, including those that will help communities adapt to drought and climate change.


USDA also announced last week the establishment of regional Climate Hubs across the country that will help farmers, ranchers and communities get the information and data they need to make informed decisions around a changing climate. One center was established at the University of California, Davis.

As USDA begins implementing disaster assistance programs, producers should record all pertinent information of natural disaster consequences, including:


Documentation of the number and kind of livestock that have died, supplemented if possible by photographs or video records of ownership and losses; Dates of death supported by birth recordings or purchase receipts; Costs of transporting livestock to safer grounds or to move animals to new pastures; Feed purchases if supplies or grazing pastures are destroyed; Crop records, including seed and fertilizer purchases, planting and production records; Pictures of on-farm storage facilities that were destroyed by wind or flood waters; and Evidence of damaged farm land.

For more information about today's announcements, visit the USDA drought resource page at www.usda.gov/drought.

BUSINESS OPPORTUNITY SCAM SHUTDOWN BY FTC

FROM:  FEDERAL TRADE COMMISSION 
FTC Shuts Down Business Opportunity Scam

Several companies and individuals have agreed to settlements with the Federal Trade Commission that ban them from selling business or work-at-home opportunities and require them to surrender assets to the FTC.

As part of the FTC’s ongoing crackdown on scams that falsely promise business opportunities targeted to  unemployed or underemployed people, in October 2012, the FTC filed a complaint against Shopper Systems LLC, Revenue Works LLC (also doing business as Surplus Supplier), EMZ Ventures LLC, The Veracity Group LP, Brett Brosseau, Michael Moysich and Keith R. Powell.

The settlement orders resolve charges that the defendants misled consumers who were seeking to run their own business providing mystery shopping services to retailers, and tricked them into paying money to join programs with recurring monthly charges.

Along with the settlement orders announced today, a federal court approved the filing of an amended complaint adding Concept Rocket LLC and Shopper Select LLC as defendants, and Georgia Farm House Land Holdings LLC, PKP Holdings, Stephanie Powell, and Sportsmen of North America LP as relief defendants who profited from the scheme but did not participate in it.

The settlement order against Moysich, Concept Rocket, Revenue Works, Shopper Select and Shopper Systems, bans them from selling business or work-at-home opportunities, sending unauthorized text messages, and selling products or services with negative-option features.  The settlement order against Brosseau and EMZ Ventures bans them from selling business or work-at-home opportunities and sending unauthorized text messages.  The settlement orders impose a judgment of more than $40.5 million against these defendants, which will be suspended when the Moysich defendants have surrendered $55,000 in frozen assets, and the Brosseau defendants have surrendered $88,000 in frozen assets and nearly $270,000 from the sale of property in Georgia, Vermont.

The settlement order against Keith R. Powell and The Veracity Group bans them from selling business or work-at-home opportunities.  It also imposes a judgment of more than $14.8 million, which will be suspended when Powell has surrendered his assets, including more than $115,000, to the FTC, and the Veracity Group has surrendered telecommunication equipment to a court-appointed receiver for liquidation.  As stipulated in all three orders, the full monetary judgments will become due immediately if the defendants are found to have misrepresented their respective financial conditions.

The Commission vote to file the proposed consent judgments and an amended complaint in December 2013 was 2-0-2, with Commissioner Ohlhausen not participating and Commissioner Wright abstaining.  The judgments were entered by the U. S. District Court for the Southern District of Florida on January 23, 2014.

To learn more about these kinds of scams, read the FTC’s Business Opportunity Scams (Estafas de Oportunidades de Negocio), Mystery Shopper Scams and Bogus Business Opportunities.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them.  To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

Contact Information

BARRIO AZTECA LIEUTENANT FOUND GUILTY FOR SIX COUNTS OF MURDER

FROM:  U.S. JUSTICE DEPARTMENT 
Wednesday, February 19, 2014
Barrio Azteca Lieutenant Who Ordered the Consulate Murders in Ciudad Juarez Found Guilty on All Counts

The Barrio Azteca Lieutenant who ordered the murders of a U.S. Consulate employee, her husband and the husband of another U.S. Consulate employee was found guilty by a jury on all counts charged announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Robert Pitman for the Western District of Texas, FBI Assistant Director of the Criminal Investigative Division Ronald T. Hosko and Administrator Michele M. Leonhart of the U.S. Drug Enforcement Administration (DEA).

Arturo Gallegos Castrellon, aka, “Benny,” aka “Farmero,” aka “51,” aka “Guero,” aka “Pecas,” aka “Tury,” aka “86,” 35, of Chihuahua, Mexico, was formally extradited to the United States from Mexico on June 28, 2012.  Today, at the conclusion of a trial before U.S. District Judge Kathleen Cardone in the Western District of Texas, El Paso Division a jury found Gallegos Castrellon guilty to five counts of racketeering, narcotics trafficking, narcotics importation, murder in a foreign country and money laundering conspiracies and six counts of murder.

At trial, prosecutors presented evidence that the defendant was a leader in the Barrio Azteca, or “BA,” a violent street and prison gang that began in the late 1980’s and expanded into a transnational criminal organization.  According to information presented in court, the BA formed an alliance with “La Linea,” which is part of the Juarez Drug Cartel.  The Juarez Drug Cartel is also known as the Vincente Carrillo Fuentes Drug Cartel, or “VCF.”  The purpose of the BA-La Linea alliance was to battle the Chapo Guzman Cartel and its allies for control of the drug trafficking routes through Juarez, Chihuahua, Mexico.  The drug routes through Juarez, which is known as the Juarez Plaza, are important to drug trafficking organizations because it is a principal illicit drug trafficking route into the United States.

In addition, prosecutors presented evidence that the defendant was in charge of Barrio Azteca teams of assassin which he helped create and supervised in 2008 through 2010.  Testimony and other evidence at trial established that his teams killed up to 800 persons between January and August 2010, reaching a total of nearly 1600 in a multi-year period.

Trial evidence also showed that the defendant ordered the March 13, 2010, triple homicide in Juarez, Mexico, of U.S. Consulate employee Leslie Enriquez, her husband Arthur Redelfs, and Jorge Salcido Ceniceros, the husband of another U.S. Consulate employee.  The jury also heard evidence that the defendant was the mastermind of the July 15, 2010, car bombing in Juarez, Mexico, which targeted Mexican Federal Police.

A total of 35 defendants were charged in the Third Superseding Indictment and are alleged to have committed various criminal acts, including the 2010 Juarez Consulate Murders in Juarez, Mexico, racketeering, narcotics distribution and importation, retaliation against persons providing information to U.S. law enforcement, extortion, money laundering, murder, and obstruction of justice.  Of the 35 defendants charged, 26 have been convicted, one committed suicide before the conclusion of his trial, and six are awaiting extradition.  U.S. law enforcement officials are actively seeking to apprehend the two remaining fugitives in this case, including Eduardo Ravelo, an FBI Top Ten Most Wanted Fugitive.

The case is being prosecuted by Trial Attorney Joseph A. Cooley of the Criminal Division’s Organized Crime and Gang Section, Trial Attorney Brian Skaret of the Criminal Division’s Human Rights and Special Prosecutions Section and AUSA John Gibson of the U.S. Attorney’s Office of the Western District of Texas - El Paso Division.  Valuable assistance was provided by the Criminal Division’s Offices of International Affairs and Enforcement Operations.

The case was investigated by the FBI’s El Paso Field Office, Albuquerque Field Office (Las Cruces Resident Agency), DEA Juarez, and DEA El Paso.  Special assistance was provided by the Bureau of Alcohol, Tobacco, Firearms and Explosives; Immigration and Customs Enforcement; the U.S. Marshals Service; U.S. Customs and Border Protection; Federal Bureau of Prisons; U.S. Diplomatic Security Service; the Texas Department of Public Safety; the Texas Department of Criminal Justice; El Paso Police Department; El Paso County Sheriff’s Office; El Paso Independent School District Police Department; Texas Alcohol and Beverage Commission; New Mexico State Police; Dona Ana County, N.M., Sheriff’s Office; Las Cruces, N.M., Police Department; Southern New Mexico Correctional Facility and Otero County Prison Facility New Mexico.