Tuesday, July 10, 2012
JUSTICE AND PENNSYLVANIA DEPARTMENT OF CORRECTIONS SETTLE RESERVIST REEMPLOYMENT LAWSUIT
Monday, July 9, 2012
Justice Department Settles Lawsuit Against Pennsylvania Department of Corrections Regarding Alleged Violation of Us Army Reservist’s Reemployment Rights
The Justice Department announced today that it has reached a settlement in its lawsuit against the Pennsylvania Department of Corrections (PDOC). The settlement, filed with the U.S. District Court for the Middle District of Pennsylvania, resolves allegations that PDOC violated the reemployment rights of U.S. Army Reservist David C. Fyock under the Uniformed Services Employment and Reemployment Rights Act (USERRA).
The department’s complaint, which was filed on Oct. 27, 2011, alleges PDOC violated USERRA by failing to retroactively promote Fyock from a corrections officer 1 to a corrections officer 2 position at the State Correctional Institution Mercer in Mercer, Pa., based on his successful performance on a make-up promotional examination after returning from a military deployment. According to the complaint, Fyock’s score on the make-up examination was higher than the score of any person promoted to any of the 13 vacant corrections officer 2 positions filled based on the May 2007 promotional test he missed.
Under the terms of the settlement, Fyock will receive a promotion to corrections officer 2 (sergeant), as well as back pay and other benefits.
Subject to certain conditions, USERRA requires employers to promptly reemploy returning service members in the positions they would have held had their employment not been interrupted by military service, or in positions of like seniority, status and pay.
“The Civil Rights Division is committed to protecting the reemployment rights of the men and women who serve our country in uniform,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “No service member should have to forego an opportunity for advancement in his or her civilian career due to military service.”
“This office strongly supports the rights of service members and the objective of the statute which is to help veterans reclaim their rightful positions in the workforce after they complete their military service,” said Peter J. Smith, U.S. Attorney for the Middle District of Pennsylvania.
This matter was litigated by Assistant U.S. Attorneys Melissa Swauger and Timothy Judge of the Civil Division of the U.S. Attorney’s Office for the Middle District of Pennsylvania in collaboration with attorneys from the Justice Department’s Civil Rights Division. The case stems from a referral from the U.S. Labor Department's Veterans' Employment and Training Service.
CONVOY IN AFGHANISTAN
FROM: U.S. AIR FORCE
An Army gunner keeps watch for enemies as the road begins to wind into the mountains during a convoy from Forward Operating Base Lane to Sal Kalay, Afghanistan, for a Village Medical Outreach May 31. More than 130 Army, Air Force and Navy troops conducted the VMO, bringing medicine and other items to the villagers. The mission of the Qalat Provincial Reconstruction Team is to win the hearts and minds of the populace through humanitarian outreach efforts. (U.S. Air Force photo by Capt. Kevin Tuttle)
TEXAS-BASED MEDICAL DEVICE COMPANY CHARGED BY SEC WITH BRIBING MEXICAN OFFICIALS
Washington, D.C., July 10, 2012 – The Securities and Exchange Commission today charged Texas-based medical device company Orthofix International N.V. with violating the Foreign Corrupt Practices Act (FCPA) when a subsidiary paid routine bribes referred to as “chocolates” to Mexican officials in order to obtain lucrative sales contracts with government hospitals.
The SEC alleges that Orthofix’s Mexican subsidiary Promeca S.A. de C.V. bribed officials at Mexico’s government-owned health care and social services institution Instituto Mexicano del Seguro Social (IMSS). The “chocolates” came in the form of cash, laptop computers, televisions, and appliances that were provided directly to Mexican government officials or indirectly through front companies that the officials owned. The bribery scheme lasted for several years and yielded nearly $5 million in illegal profits for the Orthofix subsidiary.
Orthofix agreed to pay $5.2 million to settle the SEC’s charges, and agreed to pay a $2.22 million monetaryv penalty as part of a deferred prosecution agreement announced today by the U.S. Department of Justice.
“Once bribery has been likened to a box of chocolates, you know a corruptive culture has permeated your business,” said Kara Novaco Brockmeyer, Chief of the SEC Enforcement Division’s Foreign Corrupt Practices Act Unit. “Orthofix’s lax oversight allowed its subsidiary to illicitly spend more than $300,000 to sweeten the deals with Mexican officials.”
According to the SEC’s complaint filed in U.S. District Court for the Eastern District of Texas, the bribes began in 2003 and continued until 2010. Initially, Promeca falsely recorded the bribes as cash advances and falsified its invoices to support the expenditures. Later, when the bribes got much larger, Promeca falsely recorded them as promotional and training costs. Because of the bribery scheme, Promeca’s training and promotional expenses were significantly over budget. Orthofix did launch an inquiry into these expenses, but did very little to investigate or diminish the excessive spending. Later, upon discovery of the bribe payments through a Promeca executive, Orthofix immediately self-reported the matter to the SEC and implemented significant remedial measures. The company terminated the Promeca executives who orchestrated the bribery scheme.
The SEC’s proposed settlement is subject to court approval. Orthofix consented to a final judgment ordering it pay $5.2 million in disgorgement and prejudgment interest, and permanently enjoining the company from violating the books and records and internal controls provisions of the FCPA. Orthofix also agreed to certain undertakings, including monitoring its FCPA compliance program and reporting back to the SEC for a two-year period.
The SEC’s investigation was conducted by Carol Shau and Alka N. Patel in the Los Angeles Regional Office. The SEC acknowledges and appreciates the assistance of the U.S. Department of Justice’s Criminal Division - Fraud Section and the Federal Bureau of Investigation.
U.S. NATIONAL SECURITY AGENCY WORKS TO ENSURE CYBERSPACE ACCESS
NSA Chief: Cyber World Presents Opportunities, Challenges
By Jim Garamone
WASHINGTON, July 10, 2012 - Technology has opened tremendous opportunities for the world, but also poses tremendous challenges for those who work to ensure access to cyberspace, the director of the National Security Agency said here yesterday.
Army Gen. Keith B. Alexander, who also commands U.S. Cyber Command, told participants in an American Enterprise Institute seminar titled "Cybersecurity and American Power" that the capability exists today for destructive cyber attacks against critical infrastructures.
The cyber world is an increasingly important domain, the general said. In 2000, 360 million people were on the Internet. Today, more than 2.3 billion people are connected. Last year, 107 trillion emails were sent, he added, and a sign of the times is that more than 500,000 apps exist for the iPhone and 280,000 for Android smartphones.
But this tremendous opportunity for communication also presents a potential avenue of attack, Alexander said. A 2007 denial-of-service attack on Estonia virtually shut the nation down, he said, but that was just a transitory event in the evolution of cyber attacks.
"What I think we really need to be concerned about is when these transition from disruptive to destructive attacks -- and I think those are coming," he said.
A destructive attack does not simply overload computers or networks -- it destroys data or software, and systems must be replaced to return to the status quo. "We've got to consider that those are going to happen," Alexander said. "Those are coming up, and we have to be ready for that."
The general stressed that deterring cyber attacks is more difficult than nuclear deterrence, noting that nation-states, cyber criminals, hackers, activists and terrorists all pose threats. "So when you think about deterrence theory, you're not talking about just nation-on-nation deterrence theory," he said. "You have other non-nation-state actors that you now have to consider."
An attack may originate in a country, Alexander said, but no one can really tell if it's the nation, a criminal gang within the country or a lone hacker launching the attack.
Regardless of who initiates an attack, he added, the result could be the same. "You lose the financial sector or the power grid or your systems capabilities for a period of time," the general said. "It doesn't matter who did it; you still lose that. So you've got to come up with a defensive strategy that solves that, from my perspective."
The U.S. defensive strategy has to be a team approach, he said. "We want to get as many people as we can working together to solve this problem," Alexander said.
The White House has led the governmental effort, spanning the Department of Homeland Security to the Defense Department to the FBI and beyond. And any protection -- to be effective -- must include the private sector, the general told the audience. This has caused hackles to rise, he acknowledged, with critics saying such efforts are an invasion of privacy. But, Alexander said, it can be done while protecting civil liberties.
"If the critical infrastructure community is being attacked by something, we need them to tell us at network speed," the general said. "It doesn't require the government to read their mail or your mail to do that. It requires them -- the Internet service provider or that company -- to tell us that that type of event is going on at this time. And it has to be at network speed if you're going to stop it."
Cyber runs at the speed of light, Alexander noted, and human reaction times are simply not fast enough to react.
"Maybe we could do this in real time and come up with a construct [in which] you and the American people know that we're not looking at civil liberties and privacy, [but] we're actually trying to figure out when the nation is under attack and what we need to do about it," he said.
U.S-AFGHAN ALLIANCE IMPORTANT TO U.S. GOVERNMENT.
FROM: AMERICAN FORCES PRESS SERVICE
U.S.-Afghanistan Alliance Important to DOD, Spokesman Says
By Karen Parrish
WASHINGTON, July 9, 2012 - The U.S. government's designation of Afghanistan as a major non-NATO ally is "extremely important" to the Defense Department, Pentagon Press Secretary George Little said today.
Secretary of State Hillary Clinton announced the designation July 7 after meeting with Afghan President Hamid Karzai in the Afghan capital of Kabul. It is intended to provide a long-term framework for security and defense cooperation between both countries.
During remarks yesterday at a donors' conference in Tokyo, where representatives from some 70 nations were discussing international support for Afghanistan, Clinton noted that the U.S.-Afghan strategic partnership agreement went into effect last week. That agreement was signed by both governments in May.
Little said during a regular media briefing today that the United States has a long-term commitment to Afghanistan as an enduring partner.
"We are not going to leave Afghanistan high and dry at the end of the transition period in 2014," he said. "We're going to continue to have a strong relationship with that country and with the Afghan government."
Little said while the announcement's practical effects are still to be determined, the Defense Department is exploring ways to support the Afghan military and its equipment needs.
The two countries haven't planned specific future arms sales or grants of equipment, Little said.
"The important thing is we're going to stand by Afghanistan, and that's for very good reason," he said. "We have made a major effort over the past 11 years, at the cost of blood and treasure, to ensure that al-Qaida can never consider Afghanistan a safe haven again."
In Tokyo yesterday, Clinton noted that $16 billion in international aid is pledged to Afghanistan through 2015, while the Afghan government has committed to continued reform.
"The key pieces are there," she said. "The private sector interest is there. The Afghan government's commitment to fight corruption and strengthen the rule of law is there. The international community's support, as evidenced by this conference, is there as well. And the ... partnership between Afghanistan and its neighbors is also growing."
CIVILIAN CONTRACTOR SENTENCED FOR SCHEME TO STEAL AND SELL MILITARY EQUIPMENT IN IRAQ
Monday, July 9, 2012
Former Civilian Contractor Sentenced to 24 Months in Prison for Role in Scheme to Steal and Sell Military Equipment in Iraq
A former U.S. civilian contractor was sentenced today to 24 months in prison for conspiring to steal military generators in Iraq and selling them on the black market, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Thomas G. Walker for the Eastern District of North Carolina.
David John Welch, 36, of Hope Mills, N.C., was sentenced by U.S. District Judge W. Earl Britt in the Eastern District of North Carolina. Welch was also sentenced to three years of supervised release following his prison term and was ordered to pay $160,000 in restitution to the Department of Defense. Welch pleaded guilty on April 2, 2012, to a criminal information charging him with conspiracy to steal property under the control of a government contractor.
According to court documents and information presented at his plea hearing, Welch was the operations and maintenance manager of a U.S. government contractor on Victory Base Complex in Baghdad. In this capacity, Welch had the ability to influence the distribution and movement of military equipment as well as U.S. government equipment. In addition, Welch was in charge of overseeing the movement of generators from the compound to the Defense Reutilization & Marketing Office (DRMO). In October 2011, Welch and a co-conspirator entered into a scheme to steal and later sell approximately 38 generators on the black market in Iraq to unknown co-conspirators by diverting these generators from the DRMO to an undisclosed location off-base in Iraq. After the generators were stolen from the compound, Welch’s co-conspirator provided him with four stacks of $100 bills, totaling approximately $38,600.
This case is being prosecuted by Special Trial Attorney Mark Grider of the Criminal Division’s Fraud Section, on detail from Special Inspector General for Iraq Reconstruction (SIGIR), with assistance from Assistant U.S. Attorney Banumathi Rangarajan of the U.S. Attorney’s Office for the Eastern District of North Carolina. The case is being investigated by the FBI, SIGIR and the Major Procurement Fraud Unit of the U.S. Army Criminal Investigation Command.
HHS ANNOUNCES 89 NEW ACCOUNTABLE CARE ORGANIZATIONS
FROM: U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
HHS announces 89 new Accountable Care Organizations
2.4 million people with Medicare to receive better, more coordinated care
Health and Human Services (HHS) Secretary Kathleen Sebelius announced today, that as of July 1, 89 new Accountable Care Organizations (ACOs) began serving 1.2 million people with Medicare in 40 states and Washington, D.C. ACOs are organizations formed by groups of doctors and other health care providers that have agreed to work together to coordinate care for people with Medicare.
These 89 new ACOs have entered into agreements with CMS, taking responsibility for the quality of care they provide to people with Medicare in return for the opportunity to share in savings realized through high-quality, well-coordinated care.
“Better coordinated care is good for patients and it saves money,” said Secretary Sebelius. “We applaud every one of these doctors, hospitals, health centers and others for working together to ensure millions of people with Medicare get better, more patient-centered, coordinated care.”
Participation in an ACO is purely voluntary for providers. The Medicare Shared Savings Program (MSSP), and other initiatives related to ACOs, is made possible by the 2010 Affordable Care Act. Federal savings from this initiative could be up to $940 million over four years.
“This new group of ACOs adds to a solid foundation,” said Centers for Medicare & Medicaid (CMS) Acting Administrator Marilyn Tavenner. “The Medicare ACO program opened for business in January and, already, more than 2.4 million beneficiaries are receiving care from providers participating in these important initiatives.”
The 89 ACOs announced today bring the total number of organizations participating in Medicare shared savings initiatives to 154, including the 32 ACOs participating in the testing of the Pioneer ACO Model by CMS’s Center for Medicare and Medicaid Innovation (Innovation Center) announced last December, and six Physician Group Practice Transition Demonstration organizations that started in January 2011. In all, as of July 1, more than 2.4 million beneficiaries are receiving care from providers participating in Medicare shared savings initiatives.
The selected ACOs operate in a wide range of areas of the country and almost half are physician-driven organizations serving fewer than 10,000 beneficiaries, demonstrating that smaller organizations are interested in operating as ACOs. Their models for coordinating care and improving quality vary in response to the needs of the beneficiaries in the areas they are serving.
To ensure that savings are achieved through improving care coordination and providing care that is appropriate, safe, and timely, an ACO must meet quality standards. For 2012, CMS has established 33 quality measures relating to care coordination and patient safety, appropriate use of preventive health services, improved care for at-risk populations, and patient and caregiver experience of care.
Beginning this year, new ACO applications will be accepted annually. The application period for organizations that wish to participate in the MSSP beginning in January 2013 is from Aug. 1 through Sept. 6, 2012. More information, including application requirements, is available at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/Application.html
OWNER AND COMPANY ORDERED TO PART WITH $9.3 MILLION IN CFTC ANTI-FRAUD CASE
Federal Court in Texas Orders Robert Mihailovich, Sr. and Growth Capital Management LLC to Pay over $9.3 Million in CFTC Anti-fraud Action
Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today announced that it obtained an order of permanent injunction against defendants Robert Mihailovich, Sr. (Mihailovich, Sr.) of Rockwall, Texas, and Growth Capital Management LLC (GCM) requiring Mihailovich, Sr. and GCM to make restitution to defrauded customers, disgorge ill-gotten gains, and pay a civil monetary penalty together, totaling over $9.3 million for fraudulently soliciting over $30 million from customers to trade commodity futures contracts and foreign currency (forex). The order also imposes permanent trading and registration bans against the defendants.
The court’s order, entered on June 26, 2012, arises out of a CFTC complaint filed on July 27, 2010, against Mihailovich, Sr., GCM, and Robert Mihailovich, Jr. (Mihailovich, Jr.), Mihailovich, Sr.’s son. As alleged in the complaint, Mihailovich, Sr. was convicted and incarcerated on federal wire fraud charges, served 27 months, and while on a three-year supervised release, fraudulently solicited and accepted more than $30 million from approximately 93 customers to open managed trading accounts. The complaint also alleged that Mihailovich, Jr., at the time of GCM’s initial registration, failed to disclose Mihailovich, Sr.’s involvement with GCM, and failed to disclose in CFTC registration filings that his father was a controlling principal of GCM.
Previously, the federal court had entered an order of default judgment against GCM on March 15, 2011. The federal court later also entered an order of default judgment against Mihailovich, Sr. on November 22, 2011, as a sanction for discovery violations.
The federal court’s June 26, 2012, order finds that during discovery Mihailovich, Sr. engaged in a pattern of willfulness and bad faith. Mihailovich, Sr. failed to attend a number of court-ordered hearings, repeatedly failed to abide by court orders, failed to communicate with plaintiff CFTC, failed to appear or respond to his scheduled deposition, and failed to respond to written discovery requests, according to the order.
The June 26, 2012 order imposes sanctions against Mihailovich, Sr. and GCM arising out of the prior default judgments against them. The order requires Mihailovich, Sr. and GCM jointly and severally to pay $3,475,112 in restitution, to disgorge $389,006 in ill-gotten gains, and to pay a civil monetary penalty of $5,440,000. The order also permanently prohibits the defendants from violating the Commodity Exchange Act and CFTC regulations, as charged, and from engaging in certain commodity-related activities, including personal trading and applying for registration or claiming exemption from registration with the CFTC.
The CFTC previously obtained a consent order against Mihailovich, Jr., that imposed a $40,000 civil monetary penalty and banned him from seeking registration with the CFTC for 10 years and from engaging in certain commodity-related activities, including trading, for 5 years. The CFTC thanks the U.S. Attorney’s Office for the Northern District of Texas, the Securities and Exchange Commission’s Fort Worth Regional Office, and the National Futures Association for their assistance.
MISSILE ASSEMBLY
FROM: U.S. NAVY
120626-N-XF344-004 WHITE SANDS MISSILE RANGE, N.M. (June 26, 2012) Gunner'Äôs Mate 1st Class Jason Sloan, a safety observer, and Gunner'Äôs Mate 2nd Class Max Ducharme, crane operator, observe engineers as they conduct exterior preparations of two Oriole rocket motors at the Navy's Missile Assembly Facility, White Sands Missile Range. One stage of a two-stage target, Oriole motors provide a cost effective solution helping to assess the Navy's ballistic missile defense capabilities. (U.S. Navy photo by Senior Chief Fire Controlman Ray Watson/Released)
HILLARY RODHAM CLINTON SPEAKS AT U.S. EMBASSY IN ULAANBAATAR MONGOLICA
FROM: U.S. DEPARTMENT OF STATE
Meets with the Staff and Families of Embassy Ulaanbaatar
Remarks Hillary Rodham Clinton
Secretary of State Ministry of Foreign Affairs
Ulaanbaatar, Mongolia
July 9, 2012
Well, it is so wonderful to be here – to be back again in Mongolia – to see all the changes over the last 17 years. And I want to thank the Ambassador and Mrs. Addleton for all of their leadership. They will be well remembered. I had so many nice compliments about your work here, Ambassador, from the Mongolian officials. And I know that you started coming to Mongolia representing the United States almost a dozen years ago. And I imagine that you will be still connected somehow to Mongolia for the years to come.
I certainly remember being here 17 years ago as First Lady. Soviet aid had been withdrawn, the economy was imploding, Mongolia was isolated. It was a very challenging time, but I was impressed by the young people and by the officials with whom I met. I saw that there was a real resilience and a dedication to the country. And now, 17 years later, I can see it in action. I also remember visiting what was then the Embassy, which was a house and a garage. (Laughter.) And I have with me Ambassador Victoria Nuland – come on up here, Toria – who opened our mission in 1989 at the – (applause) – Ulaanbaatar Hotel. So she’s marveling at all of the changes as well.
And I want to thank you for everything you’re doing to support Mongolian democracy, the Mongolian economy, Mongolian civil society. In just the past year, you’ve helped to monitor elections, to really strengthen civil society organizations, broker a deal with Boeing to supply three new airplanes. You get to travel to the most remote parts of the country – I’m very jealous, because I would love to do that as well – you’re helping to improve vocational training, to protect the environment, and your work is producing real results. U.S. exports increased from just 40 million in 2009 to more than 300 million last year. Seventy thousand families living on the edge of the city now have fuel-efficient cookstoves, which saves lives, prevents disease, and fights climate change.
And I know you sometimes face some pretty daunting odds in doing your work. You travel with Arctic-tested sleeping bags just in case the temperature dips below 40 degrees. One group of employees crossed the Gobi Desert. They had to fix a flat on their tire five times, but they persevered just like the Mongolian people. You volunteer at vet clinics, hammer nails for Habitat for Humanity, participate in runs for the environment, help the people with disabilities find jobs.
And I particularly want to thank our locally-engaged staff. You could not be a better representative of the friendship between our two countries. We really rely on you. We’re grateful to you. I also want to thank the families of all our employees. You’ve made real sacrifices for which we are very grateful. You’ve demonstrated such a commitment. I’m really excited about the future for Mongolia and to broaden and strengthen the relationship between our two countries.
Over the last 25 years, we’ve seen a lot of progress. I think we can see even more. I think you’ll have a chance in just a few days to enjoy the upcoming Naadam festivities. I wish I could stay; I’m quite disappointed. But I’ve told the President I intend to come back and to bring my husband, who keeps – he keeps saying the only thing that he’s envious of is that I’ve been Mongolia twice – (laughter) – and he hasn’t been here yet. So we will remedy that, I am sure. But I will take with me even new and fond memories, and they would not be possible without the hard work that each and every one of you do.
So thank you again very much, and I would love to shake some hands. (Applause.)
$5.5 MILLION GOING FOR POST-KATRINA GOVERNMENT COMPLEX IN PLAQUEMINES PARISH
FROM: U.S. FEDERAL EMERGENCY MANAGEMENT AGENCYNEW ORLEANS –The Federal Emergency Management Agency recently announced more than $5.5 million in consolidated funding to Plaquemines Parish for their proposed, post-Katrina government complex project.
“In support of their recovery endeavors, Plaquemines Parish has been approved to use eligible FEMA funding from 11 storm-damaged donor facilities toward their new government complex project,” said FEMA’s Louisiana Recovery Office Deputy Director of Programs Andre Cadogan. “Such flexibility within FEMA’s Public Assistance Program enables local communities to rebuild based on their post-disaster needs.”
Design plans for the post-Katrina project—which will be located in upper Plaquemines Parish in a reduced-risk flooding area, known as an “a-zone”— are currently underway. Plans are also in progress within Plaquemines Parish to expand the complex site even further, potentially developing it to include an emergency operations center, community recreational facilities and retail space.
“We would like to thank the FEMA team for working with us to fund the construction of the government complex. This will save Plaquemines Parish taxpayers money in the long run and place government operations in the safest part of the parish,” said Plaquemines Parish President Billy Nungesser.
The Plaquemines Parish government complex project will provide office space for various local government departments. The pre-Katrina Plaquemines Parish government building will remain in Port Sulphur to provide additional space for government council offices, a polling place, record storage and a meeting place for lower Plaquemines Parish.
This pre-Katrina government building was not one of the 11 donor facilities in the new government complex project, which instead includes consolidated FEMA-funding previously allocated for facilities such as the District 1 Council Office, the Pointe a La Hache Old Jail and the “Buras Old Fire Station” Warehouse.
In total, FEMA has provided approximately $813.5 million for hurricanes Katrina and Rita recovery efforts throughout Plaquemines Parish.
When FEMA approves projects through its supplemental Public Assistance grant, the funds are made available to the Governor’s Office of Homeland Security & Emergency Preparedness, who disburses them to the applicant for eligible work completed.
The Public Assistance program works with state and local officials to fund recovery measures and the rebuilding of government and certain private nonprofit organizations’ buildings, as well as roads, bridges and water and sewer plants. In order for the process to be successful, federal, state and local partners coordinate to draw up project plans, fund these projects and oversee their completion.
FEMA’s mission is to support our citizens and first responders to ensure that as a nation we work together to build, sustain, and improve our capability to prepare for, protect against, respond to, recover from, and mitigate all hazards.
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