FORMER MORTAGAGE CO. OFFICERS PLEAD GUILTY IN $27 MILLION FRAUD SCHEME

FROM: U.S. DEPARTMENT OF JUSTICE

Friday, October 19, 2012

Former Officers of American Mortgage Specialists Inc. Plead Guilty in North Dakota to Conspiracy in $27 Million Fraud Against Bnc National Bank

Two Additional Employees Charged for Roles in Scheme
WASHINGTON – Two former officers of Arizona-based residential mortgage loan originator American Mortgage Specialists Inc. (AMS) pleaded guilty today for their roles in a $27 million scheme to defraud North Dakota-based BNC National Bank, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Timothy Q. Purdon of the District of North Dakota; Christy Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP); and Steve A. Linick, Inspector General of the Federal Housing Finance Agency Office of Inspector General (FHFA-OIG).

Scott N. Powers, the CEO of AMS, and David E. McMaster, an AMS vice president, pleaded guilty today before U.S. District Judge Daniel L. Hovland in the District of North Dakota to one count of conspiracy to commit bank fraud and wire fraud affecting a financial institution.

Powers and McMaster were charged in a criminal information unsealed on Oct. 2, 2012, in the District of North Dakota. Lauretta Horton, the former director of accounting at AMS, and David Kaufman, an outside auditor, were also charged in separate informations unsealed on Oct. 2, 2012, for their roles in this scheme. Both Horton and Kaufman are scheduled to appear this afternoon before Magistrate Judge Charles S. Miller Jr. for arraignment.

"At the height of the financial crisis, Scott Powers, David McMaster and their alleged co-conspirators enacted a scheme to systematically defraud BNC Bank," said Assistant Attorney General Breuer. "When their mortgage lending company became unsustainable, they turned to fraud. By deliberately misleading BNC about its assets and activities, Powers and McMaster threatened the viability of BNC and put its employees and customers at risk. Today’s guilty pleas demonstrate our commitment to holding individuals accountable for illegal conduct contributing to the housing crisis."

"This prosecution is proof that illegal conduct related to the mortgage crisis impacted banks all across the country and even here in North Dakota," said U.S. Attorney Purdon. "Through close collaboration with our federal investigative partners and the Justice Department’s Criminal Division, we were able to secure today’s guilty pleas and begin to correct this wrongdoing."

"Powers, McMaster and their alleged co-conspirator took advantage of BNC National Bank receiving $20 million in TARP funds to defraud BNC out of more than $27 million in a scheme engineered to cover their losses from the downturn in the housing market," said Special Inspector General Romero. "They used BNC as their personal piggy bank, and the bank was unable to pay millions of dollars in TARP dividend payments owed to American taxpayers. Fraud against TARP banks equals fraud against taxpayers, and SIGTARP and our law enforcement partners will hold perpetrators of TARP fraud accountable for their crimes."

"Such fraudulent activity at any time is unacceptable, but it’s particularly egregious when conducted by those who are supposed to ensure the integrity of the mortgage industry," said Inspector General Linick. "My office is committed to holding accountable those who engage in fraudulent activities, and we are proud to have worked on this case with our law enforcement partners."

According to court documents, Powers and McMaster conspired from October 2007 to April 2010 to defraud BNC by making false representations regarding the financial and operational well being of AMS in order to obtain funding from BNC and personal benefits for themselves. AMS was in the business of originating residential real estate mortgage loans to borrowers and then selling the loans to institutional investors.

In 2006, AMS entered into a loan participation agreement with BNC whereby BNC provided funding for the loans issued by AMS. Powers and McMaster pleaded guilty to causing AMS to delay sending "pay down" emails, which would notify BNC when specific loans were sold. By delaying the sending of pay down emails, Powers and McMaster were able to use funds from newly-sold loans to make payments for earlier-sold loans and inflate the dollar amount in the pay down emails for the earlier-sold loans.

According to their plea documents, Powers and McMaster also caused false financial information about AMS to be sent to BNC, overstating AMS’s cash-on-hand and disguising delinquent tax payments being made to the Internal Revenue Service as marketing and advertising expenses. As part of their plea agreements, Powers and McMaster have agreed to forfeit $28,564,470, which includes proceeds from the fraud.

Horton was charged in a one count information for conspiring to provide fraudulent financial information to BNC. According to court documents, Horton inflated asset items and altered other financial information in the AMS balance sheet provided to BNC to falsely reflect that AMS had substantial liquid assets when, in fact, it did not. Horton also allegedly concealed payments that AMS was making to the IRS for a delinquency in unpaid payroll taxes by disguising them as marketing and advertising expenses.

Kaufman, a certified public accountant who audited the annual financial statements of AMS, was charged in a one count information for allegedly obstructing the grand jury investigation into the AMS fraud. According to court documents, Kaufman lied to federal agents during the criminal investigation and obstructed the grand jury investigation when he denied that he had a conversation with an AMS executive in which Kaufman explained to the AMS executive that he had combined two expenses in the financial statements in order to conceal the true nature and extent of AMS’s financial condition from BNC.

Although BNC’s holding company had received approximately $20 million under the TARP and had injected approximately $17 million of the TARP funds into BNC, BNC incurred losses exceeding the millions received from TARP. BNC then did not make its required TARP dividends to the Department of Treasury for nearly two years.

At sentencing, scheduled for April 15, 2013, Powers and McMaster face a maximum penalty of 30 years in prison.

The investigation was conducted by agents assigned to the Offices of the Inspector General of SIGTARP and of FHFA. The case is being prosecuted by Assistant U.S. Attorney Clare Hochhalter of the District of North Dakota and by Trial Attorney Robert A. Zink and Senior Litigation Counsel Jack B. Patrick of the Criminal Division’s Fraud Section with the assistance of Trial Attorney Jeannette Gunderson of the Criminal Division’s Asset Forfeiture and Money Laundering Section.

This case is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

The charges and allegations contained in the informations are merely accusations and the defendants are presumed innocent unless and until proven guilty.

To D or not to D

To D or not to D

TWO FORMER HOSPITAL EMPLOYEES SENTENCED TO SERVE TIME IN PRISON

FROM: U.S. DEPARTMENT OF JUSTICE

WASHINGTON — Two former high-ranking employees of facilities operations at New York Presbyterian Hospital (NYPH) were sentenced in U.S. District Court for the Southern District of New York, in Manhattan, by Judge George B. Daniels today for their participation in two separate conspiracies involving kickbacks, the Department of Justice announced today.

Santo Saglimbeni, a former vice president of facilities operations at NYPH, was sentenced to serve 48 months in prison and ordered to pay a $250,000 criminal fine. Emilio "Tony" Figueroa, a former director of facilities operations at NYPH, was sentenced to serve 36 months in prison and ordered to pay a $25,000 criminal fine. Saglimbeni and Figueroa were ordered to jointly and severally pay $603,982 in total restitution to NYPH. Judge Daniels also entered a preliminary order of forfeiture for $2.3 million, which included certain bank accounts into which the kickback money from one of the schemes was deposited, as well as a parcel of land purchased with a portion of the kickback money, in Southampton, N.Y.

"Today's sentences are consistent with the serious nature of the crimes for which the individuals were convicted," said Acting Assistant Attorney General Joseph Wayland in charge of the Department of Justice's Antitrust Division. "The division remains committed to holding accountable corrupt purchasing officials who undermine the competitive bidding process for their personal gain."

On Feb. 2, 2012, after a four-week trial, Saglimbeni and Figueroa, along with Michael Yaron and two companies owned by him—Cambridge Environmental & Construction Corp., doing business as National Environmental Associates (Cambridge/NEA), and Oxford Construction & Development Corp.; Moshe Buchnik, the president of an asbestos abatement company doing business at NYPH; and Artech Corp., a sham company Saglimbeni created in the name of his mother, were each convicted of conspiracy to defraud NYPH. Additionally, Yaron, Cambridge/NEA, Oxford, Buchnik, Saglimbeni and Artech were also convicted of a wire fraud violation.

According to evidence presented at trial, the scheme to defraud NYPH centered on Saglimbeni, who with the assistance of Figueroa, awarded asbestos abatement, air monitoring and general construction contracts to Yaron, Buchnik and their companies in return for more than $2.3 million in kickbacks paid to Saglimbeni. A portion of those kickbacks were funneled by Yaron to Saglimbeni through Artech.

On July 31, 2012, Saglimbeni and Figueroa each pleaded guilty to additional mail fraud conspiracy and mail fraud violations. These charges were part of the same indictment but had been severed and were scheduled for a separate trial. According to the superseding indictment, the fraud scheme also centered on Saglimbeni, who with the assistance of Figueroa, awarded heating, ventilation and air conditioning (HVAC) contracts to an HVAC vendor in return for kickbacks in the form of cash goods and services paid to Saglimbeni and Figueroa.

On July 10, 2012, Yaron, Buchnik and the three companies were sentenced for their respective roles in the scheme. Yaron was sentenced to serve 60 months in prison and ordered to pay a $500,000 criminal fine. Buchnik was sentenced to serve 48 months in prison and ordered to pay a $500,000 criminal fine. Yaron's companies, Cambridge/NEA and Oxford Construction, were each sentenced to pay a $1 million criminal fine. Artech was also sentenced to pay a $1 million criminal fine. Including Saglimbeni and Figueroa, 15 individuals and six companies have been convicted or pleaded guilty as a result of this investigation and have been sentenced to pay a total of more than $4 million in criminal fines and to serve more than 16 years in prison.

This antitrust investigation of bid rigging, fraud, bribery and tax-related offenses relating to the award of contracts by the facilities operations department of NYPH was conducted by the Antitrust Division's New York Field Office with the assistance of the FBI and the Internal Revenue Service - Criminal Investigation's New York Field Office. The Office of International Affairs in the Justice Department's Criminal Division also provided assistance.

U.S. PACOM COMMANDER RETURNS FROM VISITING FRIENDS



Navy Adm. Samuel J. Locklear III, commander of U.S. Pacific Command, with Thailand's Chief of Defense Force Gen. Thanasak Patimaprakorn in Bangkok, Oct. 15, 2012. U.S. Pacific Command photo by Army Staff Sgt. Carl N. Hudson

FROM: U.S. DEPARTMENT OF DEFENSE
U.S. Partners Encourage Pacom Commander

By Donna Miles
American Forces Press Service
WASHINGTON, Oct. 18, 2012 - Upon returning to U.S. Pacific Command headquarters in Hawaii after visiting three Asia-Pacific nations, the top U.S. commander in the region said he's encouraged by their willingness to partner more closely with the United States in what he called a foundation of the U.S. strategy there.

Navy Adm. Samuel J. Locklear III has returned to Camp H.M. Smith after visiting senior officials in Bangladesh, India and Thailand. During every engagement, the admiral explained why, as it draws down its forces in Afghanistan, the United States is increasingly turning its attention to the Asia-Pacific.

Locklear recognized the region's large populations, large militaries and new and growing economic powerhouses during an Oct. 16 discussion with reporters in Bangkok.

The relative peace the region has enjoyed for almost seven decades has enabled national economies to prosper, he noted. "The goal is to continue that," he said, promoting security and stability through enhanced regional cooperation.

It's a whole-of-government approach, he said, that includes not just military, but also includes economic, diplomatic and information initiatives.

"The end state, we hope, is a continuation of a collective security environment where all nations are able to participate," Locklear said. He cited the range of operations that could include countering terrorism, providing humanitarian assistance and disaster relief, stemming the flow of transnational threats such as drugs and human trafficking, and enhancing cybersecurity, among others.

Ultimately, Locklear said, U.S. rebalance toward the Asia-Pacific region involves "building partnerships and ability to work together on these security issues that will impact the region in the future."

That begins with the historic U.S. allies in the region, including Thailand, he said.

During his visit there, Locklear met with Chief of Defense Force Gen. Thanasak Patimaprakorn, Permanent Secretary for Defense Thanongsak Apirakyothin and other leaders to discuss ways to strengthen the U.S.-Thailand military-to-military relationship.

But the rebalance also involves building capacity among new regional partners and encouraging others to forge new relationships with the United States, he said.

Asked by a reporter, Locklear said he hopes these relationships are seen as "productive, in the eyes of China" and that Chinese leaders recognize that the U.S. rebalance is not meant to threaten or exclude China or any other country.

"This is not about a single nation," the admiral said. "It is about this issue of: How do you foresee a future were you have all countries participating in a security environment that leads to peace and prosperity in the Asia-Pacific region. And you can't leave any one country out of that."

Locklear underscored the point. "The importance of the rebalance is looking at, How do you bring everyone, including China, into a security relationship that allows peace and prosperity, even through trying, difficult times where countries may disagree on this issue or that issue without it leading to military confrontation," he said.

He recognized areas in which China and the United States already are beginning to forge a military-to-military relationship. Their navies recently participated in joint counterpiracy operations, he noted, and leaders are exploring other areas in which they could work together, including health and medicine and humanitarian assistance and disaster relief.

In addition, the United States has invited China to participate in the next Rim of the Pacific naval exercise, in 2014. Twenty-two nations participated in this year's RIMPAC. "We hope that in 2014, the People's Liberation Army navy will find a way to send a ship and be full partners in that," Locklear said. "This is the best way forward."

MUON IMAGING: LOOKING INSIDE THE FUKUSHIMA DAIICHI REACTORS



120316-N-TX154-352
YOKOSUKA, Japan (March 16, 2012) Members from the Japan Women's Association present Capt. David A. Owen, commanding officer of Fleet Activities Yokosuka, paper cranes as a thank you for the services rendered by Sailors during Operation Tomodachi one year ago. Operation Tomodachi was a humanitarian mission focused on aiding the people of Japan in the aftermath of the massive earthquake and tsunami that struck Fukushima Prefecture in early March of 2011. (U.S. Navy photo by Mass Communication Specialist Seaman Paul Kelly/Released)
　

FROM: LOS ALAMOS NATIONAL LABORATORY

Tiny Travelers from Deep Space Could Assist in Healing Fukushima’s Nuclear Scar

Researchers examine use of cosmic-ray radiography on damaged reactor cores
LOS ALAMOS, NEW MEXICO, October 17, 2012—Researchers from Los Alamos National Laboratory have devised a method to use cosmic rays to gather detailed information from inside the damaged cores of the Fukushima Daiichi nuclear reactors, which were heavily damaged in March 2011 by a tsunami that followed a great earthquake.

In a paper in Physical Review Letters, researchers compared two methods for using cosmic-ray radiography to gather images of nuclear material within the core of a reactor similar to Fukushima Daiichi Reactor No. 1. The team found that Los Alamos’ scattering method for cosmic-ray radiography was far superior to the traditional transmission method for capturing high-resolution image data of potentially damaged nuclear material.

"Within weeks of the disastrous 2011 tsunami, Los Alamos’ Muon Radiography Team began investigating use of Los Alamos’ muon scattering method to determine whether it could be used to image the location of nuclear materials within the damaged reactors," said Konstantin Borozdin of Los Alamos’ Subatomic Physics Group and lead author of the paper. "As people may recall from previous nuclear reactor accidents, being able to effectively locate damaged portions of a reactor core is a key to effective, efficient cleanup. Our paper shows that Los Alamos’ scattering method is a superior method for gaining high-quality images of core materials."

Muon radiography (also called cosmic-ray radiography) uses secondary particles generated when cosmic rays collide with upper regions of Earth’s atmosphere to create images of the objects that the particles, called muons, penetrate. The process is analogous to an X-ray image, except muons are produced naturally and do not damage the materials they contact.

Massive numbers of muons shower the earth every second. Los Alamos researchers found that by placing a pair of muon detectors in front of and behind an object, and measuring the degree of scatter the muons underwent as they interacted with the materials they penetrated, the scientists could gather detailed images. The method works particularly well with highly interfering materials (so-called "high Z" materials) such as uranium. Because the muon scattering angle increases with atomic number, core materials within a reactor show up more clearly than the surrounding containment building, plumbing and other objects. Consequently, the muon scattering method shows tremendous promise for pinpointing the exact location of materials within the Fukushima reactor buildings.

Using a computer model, the research team simulated a nuclear reactor with percentages of its core removed and placed elsewhere within the reactor building. They then compared the Los Alamos scattering method to the traditional transmission method. The simulation showed that passive observation of the simulated core over six weeks using the scattering method provided high-resolution images that clearly showed that material was missing from the main core, as well as the location of the missing material elsewhere in the containment building. In comparison, the transmission method was barely able to provide a blurry image of the core itself during the same six-week period.

"We now have a concept by which the Japanese can gather crucial data about what is going on inside their damaged reactor cores with minimal human exposure to the high radiation fields that exist in proximity to the reactor buildings," Borozdin said. "Muon images could be valuable in more effectively planning and executing faster remediation of the reactor complex."

In addition to their potential utility at Fukushima, muon radiography portals have been deployed to detect potential smuggling of clandestine nuclear materials. These detectors can noninvasively find even heavily shielded contraband in minutes without breaching a container, vehicle or other smuggling device. Los Alamos researchers pioneered the concept shortly after the 9/11 terrorist attacks.

Other Los Alamos National Laboratory co-authors of the paper include Steven Greene, Edward "Cas" Milner, Haruo Miyadera, Christopher Morris and John Perry; and (former Los Alamos post-doctoral researcher) Zarija Lukic of Lawrence Berkeley National Laboratory. Cas Milner is credited by the team as the author of the original concept of applying muon imaging to Fukushima.

Los Alamos research on the project was made possible through Los Alamos’ Laboratory-Directed Research and Development Program (LDRD), which is funded by a small percentage of the Laboratory’s overall budget to invest in new or cutting-edge research. The U.S. Department of Energy supported contacts of the Los Alamos team with other research groups, including several Japanese institutions and the University of Texas.

U.S.-KINGDOM OF THE NETHERLANDS SIGN STATUS OF FORCES AGREEMENT FOR TERRITORIES IN THE CARIBBEAN

Molen van Sloten (the Sloten Windmill), on the outskirts of Amsterdam, is a still-functioning polder-draining mill. Dating from 1847, the mill can pump 60,000 liters of water per minute from the polder.

FROM: U.S. DEPARTMENT OF STATE
Signing Ceremony for the U.S.-Kingdom of the Netherlands Status of Forces Agreement for Territories in the Caribbean

Remarks
Andrew J. Shapiro
Assistant Secretary, Bureau of Political-Military Affairs
Washington, DC
October 19, 2012
I am delighted to be here today and would like to thank all of you for coming for what is an important day for the United States, the Kingdom of the Netherlands, and the people of the Dutch Caribbean. As the Assistant Secretary for Political-Military Affairs, I am particularly delighted to be signing the new U.S.-Dutch Caribbean Status of Forces Agreement today with Ambassador Rudolf Bekink of the Netherlands.

There are few agreements that demonstrate the closeness of diplomatic relations between countries better than a Status of Forces Agreement. SOFAs provide a critical framework for countries to cooperate together on security issues and enable countries to further build and strengthen their defense relationships. This is important because when countries can work together and cooperate in the area of national defense – one of the most sensitive and critical areas for any nation – we find that they can work together on almost any issue. Therefore, the agreement that we are about to sign is not just a clear demonstration of the closeness of the defense relationship between the United States and the Kingdom of the Netherlands, but of the strength of our overall bilateral relationship.

While our two countries have enjoyed strong relations for decades, this agreement, like the Status of Forces Agreements that have preceded it, updates and revalidates what is already a very strong partnership. By enabling our countries to continue to build our defense cooperation, I am confident that this Status of Forces Agreement will further strengthen the overall relationship between our countries.

The U.S. and the Kingdom of the Netherlands share many common interests in the Caribbean and we already enjoy an extensive network of agreements and treaties that allows our countries to work together for our mutual benefit. This new agreement importantly ensures continuing access to a safe but challenging tropical environment in which our forces can train together and conduct joint exercises.

But beyond the shared strategic value of this agreement to both the U.S. and the Kingdom, there are practical benefits offered by our close friendship as well. This agreement will also provide substantial economic benefits to the people of the Dutch Caribbean itself. These benefits will come from visits by U.S. ships, as well as from joint exercises and training activities in the Caribbean that we expect will bring between three and four million dollars annually to the economies of the Dutch Caribbean islands.

It is for all of these reasons that I am proud to represent the United States today in signing this very important agreement. The agreement is a clear demonstration of the strength of the strategic partnership between the U.S. and the Kingdom of the Netherlands and will, I believe, be of great strategic and economic benefit to the United States and to the Dutch Caribbean.

SEA ICE OFF EASTERN GREENLAND

FROM: NASA
Sea Ice Off Eastern Greenland
The MODIS instrument on NASA's Aqua satellite captured this visible image of Sea Ice off eastern Greenland on October 16, 2012.

Image Credit: NASA/GSFC/Jeff Schmaltz/MODIS Land Rapid Response Team

NEWS FROM AFGHANISTAN FOR OCTOBER 22, 2012

Photo Credit:  U.S. Navy.
FROM: U.S. DEPARTMENT OF DEFENSE
Combined Force Arrests Insurgents, Seizes Afghan Uniforms

Compiled from International Security Assistance Force Joint Command News Releases

WASHINGTON, Oct. 22, 2012 - A combined Afghan and coalition security force arrested a Taliban leader in Afghanistan's Nangarhar province today, military officials reported.

The arrested insurgent leader is believed to be directly responsible for the coordination of weapons and equipment used in attacks on Afghan and coalition forces.

The security force also detained several suspected insurgents and seized two Afghan army uniforms.

Also today, a combined security force in Kandahar province arrested a Taliban improvised explosive device expert believed to be in charge of IED operations in the province's northern and eastern areas. The security force also detained a suspected insurgent.

In operations around Afghanistan yesterday:

-- Afghan and coalition forces killed a man engaging in insurgent activity in Kandahar province.

-- Afghan and coalition forces killed two men engaging in insurgent activity in Wardak province.

-- In Ghazni province, Afghan special police, enabled by coalition forces, found and destroyed about 200 pounds of explosives and IED components.

In Oct. 20 operations:

-- Afghan special police, enabled by coalition forces, rescued 16 prisoners from the Taliban in Helmand province. All of the prisoners were released after security forces assessed their health.

-- An Afghan and coalition force in Ghazni province killed Mohammad Haydar, also known as Hamzah, a Taliban leader who facilitated attacks against Afghan and coalition forces.

-- In Helmand province, an Afghan and coalition force arrested several insurgents while searching for a Taliban leader who conducts direct attacks on Afghan and coalition forces and provides lethal support to the Taliban insurgency.

-- Afghan and coalition forces killed several men engaging in insurgent activity in Logar province.

-- An Afghan and coalition force arrested several insurgents in Kunduz province while searching for a Taliban leader suspected of being involved in planning and facilitating attacks on Afghan and coalition forces.

In Oct. 19 operations:

-- Afghan and coalition forces in Helmand province killed Taliban leader Ahmad Jan, who was considered an expert in building and planting IEDs.

-- Afghan and coalition forces killed two men engaging in insurgent activity in Helmand province.

-- A combined security force killed an armed insurgent who was preparing to attack Afghan and coalition forces in Kandahar province.

In Oct. 18 operations:

-- Afghan police and coalition forces provided medical aid to an elder who had been shot in Zabul province. After returning to the area, the police detained several people for questioning.

-- In Uruzgan province, Afghan special police, enabled by coalition forces, detained an insurgent, killed several enemy fighters and seized a cache of weapons, ammunition and narcotics. The combined force found and destroyed 132 pounds of narcotics, several hand grenades, weapons and several hundred rounds of ammunition.

DVIDS - Video - Association of the United States Army Opening Ceremony

DVIDS - Video - Association of the United States Army Opening Ceremony

U.S. DEPARTMENT OF STATE DAILY BRIEFING

http://www.google.com/url?q=http://www.addthis.com/bookmark.php&sa=D&sntz=1&usg=AFQjCNFYzDlKeLL_IMEm7XBQrYQa1f17Zg

FORMER FBI SPECIAL AGENT INDICTED FOR OBSTRUCTING JUSTICE FOR MONEY

FROM: U.S. DEPARTMENT OF JUSTICE

WASHINGTON – A federal grand jury in Salt Lake City today returned an 11-count indictment charging a former FBI special agent and two alleged accomplices with a scheme to use the agent’s official position to derail a federal investigation into the conduct of one of the alleged conspirators. The charges were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney for the District of Utah David B. Barlow and Department of Justice Inspector General Michael E. Horowitz.

The indictment charges former FBI special agent Robert G. Lustyik Jr., 50, of Sleepy Hollow, N.Y.; Michael L. Taylor, 51, of Harvard, Mass., the principal of Boston-based American International Security Corporation (AISC); and Johannes W. Thaler, 49, of New Fairfield, Conn., each with one count of conspiracy, eight counts of honest services wire fraud, one count of obstructing justice and one count of obstructing an agency proceeding.

"According to the indictment, while active in the FBI, former Special Agent Lustyik used his position in an attempt to stave off the criminal investigation of a business partner with whom he was pursuing lucrative security and energy contracts," said Assistant Attorney General Breuer. "He allegedly acted through a childhood friend to secure promises of cash, purported medical expenses and business proceeds in exchange for abusing his position as an FBI agent. The alleged conduct is outrageous, and we will do everything we can to ensure that justice is done in this case."

DOJ Inspector General Horowitz stated: "Law enforcement officers are sworn to uphold the law. Agents who would sell their badges and impede the administration of justice will be vigorously pursued."

According to the indictment, Robert Lustyik was an FBI special agent until September 2012, assigned to counterintelligence work in White Plains, N.Y. The indictment also states that from at least June 2011, the three alleged conspirators had a business relationship involving the pursuit of contracts for security services, electric power and energy development, among other things, in the Middle East, Africa and elsewhere.

The indictment alleges that in September 2011, Taylor learned of a federal criminal investigation, begun in Utah in 2010, into whether Taylor, his business and others committed fraud in the award and performance of a contract with the U.S. Department of Defense.

Soon thereafter, Taylor allegedly began to give and offer things of value to Lustyik in exchange for Lustyik’s agreement to use his official position to impair and impede the Utah investigation. The indictment also alleges that Thaler, a childhood friend of Lustyik’s, served as a conduit between Taylor and Lustyik, passing information and things of value.

Specifically, the indictment charges that Taylor offered Lustyik a $200,000 cash payment; money purportedly for the medical expenses of Lustyik’s minor child; and a share in the proceeds of several anticipated contracts worth millions of dollars.

According to the indictment, Lustyik used his official FBI position to impede the Utah investigation by, among other things, designating Taylor as an FBI confidential source, texting and calling the Utah investigators and prosecutors to dissuade them from charging Taylor and attempting to interview potential witnesses and targets in the Utah investigation. As alleged in the indictment, Lustyik wrote to Taylor that he was going to interview one of Taylor’s co-defendants and "blow the doors off this thing." Referring to the Utah investigation, Lustyik also allegedly assured Taylor that he would not stop in his "attempt to sway this your way."

According to the indictment, Lustyik, Taylor and Thaler attempted to conceal the full extent of Lustyik’s relationship with Taylor from the Utah prosecutors and agents, including by making and planning to make material misrepresentations and omissions to federal law enforcement involved in the investigation of Taylor.

For example, the indictment alleges that on Sept. 8, 2012, after Taylor was searched at the border and his computer seized, Lustyik sent a text message to Thaler, stating: "You might have to save me and testify that only you r doing business." Nine days later, according to the indictment, Thaler told federal law enforcement agents – in a voluntary, recorded interview – that Lustyik was not involved in Taylor’s and Thaler’s business.

The pair also allegedly used an email "dead drop" to avoid leaving a record of their interactions and used the names of football teams and nicknames as part of their coded communications.

Taylor and Lustyik were both previously arrested on prior criminal complaints in this case. Taylor has been detained pending trial and Lustyik received a $2 million bond. Thaler is expected to surrender to authorities tomorrow.

If convicted, the defendants each face a maximum potential penalty of five years in prison on the conspiracy charge, 20 years in prison on each of the wire fraud charges, 10 years in prison on the obstruction of justice charge and five years in prison on the obstruction of an agency proceeding charge. Each charge also carries a maximum $250,000 fine, or twice the gross gain or loss from the offense. The indictment also seeks forfeiture of any proceeds traceable to the conspiracy, wire fraud and obstruction of justice offenses.

Lifting it away

Lifting it away

FINAL FOREIGN PORT VISIT FOR USS ENTERPRISE

121015-N-AP176-041 STRAIT OF MESSINA (Oct. 15, 2012) The aircraft carrier USS Enterprise (CVN 65) transits the Strait of Messina. Enterprise is deployed to the U.S. 6th Fleet area of responsibility conducting maritime security operations and theater security cooperation efforts. (U.S. Navy photo by Mass Communication Specialist 3rd Class Jeff Atherton/Released)

FROM: U.S. NAVY
Enterprise Arrives in Naples, Italy for Final Foreign Port Visit

By Mass Communication Specialist 1st Class (SW) Steve Smith,
Enterprise Carrier Strike Group Public Affairs
USS ENTERPRISE, At Sea (NNS) -- Aircraft carrier USS Enterprise (CVN 65) anchored off the coast of Naples, Italy, for its final port visit following seven months at sea, Oct. 16.

The visit serves to demonstrate the Navy's commitment to regional stability and maritime security in the U.S. 6th Fleet Area of Responsibility and to help strengthen the already positive relationship between the U.S. and Italy.

While in Italy, the Sailors and Marines of Enterprise and Carrier Air Wing (CVW) 1, the "Big E's" embarked air wing, will experience the rich history and culture of the historic city of Naples and take advantage of Morale, Welfare and Recreation (MWR)-sponsored tours to Rome, Pisa and Florence.

Crew members are also scheduled to participate in community outreach programs with a local church and orphanage.

Enterprise departed her homeport of Norfolk, Va., March 11 for a regular deployment to the U.S. 5th and 6th Fleet areas of responsibility to conduct maritime security operations, theater security cooperation efforts and missions in support of Operation Enduring Freedom.

Enterprise is scheduled to inactivate in a ceremony on Dec. 1, 2012, following the completion of the ship's current deployment, bringing to an end 51 years of distinguished service.

10 WAYS TO SAVE YOUR MONEY, ENERGY THIS WINTER: AN EPA GUIDE

Photo Credit:  National Science Foundation

FROM: U.S. ENVIRONMENTAL PROTECTION AGENCY

Ten Ways to Save Money, Energy and Protect Your Health This Winter
WASHINGTON – With winter quickly approaching, the U.S. Environmental Protection Agency (EPA) is highlighting ten tips for Americans to protect their health, save money, and lower energy while enjoying the winter holiday season.

1. Maintain your heating equipment to lower utility bills. Heating and cooling costs account for about $1,000 -- nearly half of a home's total annual energy bill. Maintaining the efficiency of your home's heating, ventilation, and air conditioning (HVAC) system can have a big effect on your utility bills. Dirt and neglect can impact the efficiency of your HVAC system and are some of the top causes of heating system failure. Schedule an HVAC checkup with a licensed HVAC contractor to make sure your system is operating at peak performance. Also, check your system’s air filter every month and change it when it's dirty or at a minimum, every three months. A dirty filter will slow down air flow and make the system work harder to keep you warm or cool — wasting energy. http://www.energystar.gov/homeimprovement

2. Download EPA’s free Apps to help protect your health. The AIRNow app allows users to enter a zip code and get current particle pollution and ozone levels and forecasts for more than 400 cities across the country. The Ultraviolet (UV) Index provides an hourly forecast of the UV radiation levels from the sun. Both are available for Apple and Android phones. Learn more about these apps and the others: http://m.epa.gov/apps/index.html

3. Decorate for the holidays with Energy Star light strings that can last up to 10 times longer. Energy Star-qualified light strings use about 65 percent less electricity than incandescent light strings and are available in a variety of colors, shapes and lengths. They save energy and are more durable, shock-resistant and cooler to the touch. If every decorative light string sold in the U.S. this year were Energy Star qualified, Americans would save $80 million in utility bills and one billion pounds of greenhouse gas emissions would be prevented. http://www.energystar.gov/index.cfm?fuseaction=find_a_product.showProductGroup&pgw_code=DS

4. Lower the temperature in your home to increase savings up to 12 percent. Control your home’s temperature while away or asleep by using one of the pre-programmed settings. Programming the thermostat to turn the temperature down 8 degrees for 7 hours each night and an additional 7 hours each weekday could result in a seasonal heating savings of approximately 12 percent. For the average home, this could result in savings of about $180. http://www.energystar.gov/index.cfm?c=products.pr_save_energy_at_home

5. Check for water leaks and install WaterSense products to save approximately $170 per year. The average household spends as much as $500 per year on their water and sewer bill, but approximately $170 per year can be saved by installing water-efficient fixtures and appliances. http://www.epa.gov/watersense

6. Reduce your food waste. Feed people, not landfills. Food is the single largest type of waste going to landfills and incinerators. Americans disposed of approximately 33 million tons of food waste in 2010. When excess food, leftover food, and food scraps are disposed of in a landfill, they decompose and become a significant source of methane - a potent greenhouse gas. Much of the food that is discarded in landfills is actually safe, wholesome food that could have been used to feed people. So when you are thinking about making your family dinner, think about how you can reduce your food waste to save money, help communities, and protect the environment. http://www.epa.gov/osw/conserve/materials/organics/food/fd-house.htm

7. Look for the Design for the Environment label on more than 2,800 products during winter cleaning. EPA's Designed for the Environment (DfE) logo differentiates products that use only the safest ingredients to protect people, our pets, and the environment. In 2011, Americans using DfE products cut the use of harmful chemicals by more than 756 million pounds. http://www.epa.gov/dfe/

8. Test your home for radon gas, 1 in 15 homes may have elevated levels. Radon, a colorless odorless gas, is the leading cause of lung cancer among non-smokers and levels can increase during colder months. Purchase an affordable Do-It-Yourself test kit online or at a local hardware store to determine the level in your home. Addressing high levels often costs the same as other minor home repairs. http://www.epa.gov/radon

9. Learn before you burn and cut firewood use by more than 30 percent. The Burn Wise program has best burn practices to help better protect your home and your health. Never burn garbage, cardboard, ocean driftwood or wet wood. If you replace an old wood stove with a more efficient one, efficiency can increase by 50 percent, 1/3 less wood can be used for the same heat and 70 percent less particle pollution indoors and out are produced. http://www.epa.gov/burnwise/

10. Prevent Pests. Now is the time when pests such as insects and rodents may try to move indoors. Eliminate sources of food, water, and shelter to reduce pest problems. Prevent pests by using caulk to eliminate cracks, repair water leaks, remove clutter, and clean up crumbs and other food sources. If you decide to use a pesticide, read the label first. The pesticide label is your guide to using pesticides safely and effectively. It contains pertinent information that you should read and understand before you use a pesticide product. http://www.epa.gov/safepestcontrol/

U.S. Department of Defense Armed with Science Update: Electronics Disloved by Drops of Liquid

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ARMY RUNNER RUNS FAST

FROM: U.S. DEPARTMENT OF DEFENSE
Army Spc. Shernette Hyatt, a supply clerk stationed in South Korea with the 2nd Infantry Division, is a world-class sprinter and graduate of St. John's University in New York City. A native of Jamaica, Hyatt is determined to represent her country in the Olympic Games. U.S. Army courtesy photo
 2nd Infantry Division

GYEONGGIDO, South Korea, Oct. 19, 2012 - The Army prides itself on recognizing excellence, and when it came across Spc. Shernette Hyatt leaders were astonished by her running ability.

Hyatt began running when she was 5 years old while she was living with her grandparents in Jamaica. While her grandfather wanted her to pursue her running, her grandmother forbade it. However, Hyatt's grandfather would secretly time her as she ran to the store, watching those times steadily decrease.

One day at school, Hyatt ran a sprint with her friends, not knowing her grandmother was walking by the school at that exact moment. Hyatt beat all her classmates with ease, and her grandmother saw everything.

As her grandmother approached, Hyatt apologized profusely, tears streaming. But, to her surprise, her grandmother gave her a big hug.

"I am so proud of you. I didn't know you could run like that," Hyatt's grandmother said. "Don't let anybody take this from you. This is your strength."

Moving to Long Island, N.Y., at the age of 13, Hyatt continued to hone her running skill throughout middle school and high school, making a name for herself in the athletic community.

She eventually accepted a full track and field scholarship to St. John's University in New York City after completing her associate's degree at Nassau Community College and earning two MVP awards in the 100-meter and 200-meter dash.

Hyatt eventually competed in Jamaica's Olympic trials, placing fifth. Unfortunately, budget constraints limited the number of athletes on the roster to only four. Hyatt was left out.

To continue her quest for athletic glory, Hyatt joined the North American, Central American and Caribbean Athletic Association. To financially support herself during this time, she began filling in as a substitute teacher in Florida.

Despite her continued athletic success, events in her personal life forced her to put running on hold. Soon after, she joined the Army. While serving as a Warrior Division supply clerk with Company B, Headquarters and Headquarters Battalion, her hopes were rekindled when she learned of the Army World Class Athlete Program, an opportunity she hopes to pursue in the near future.

Hyatt was recently inducted into the Nassau Community College's Athletic Hall of Fame, and the National Junior College Athletic Association Hall of Fame.

"I love where my life has taken me, from being a running child to the proud soldier I am today," she said.

As she leaves South Korea during her upcoming permanent change of station move to Hawaii, Hyatt offered this advice to other Army athletes. It is the same wisdom that has served as her inspiration for most of her life.

"This is your strength. Don't let anybody take it away from you," she said.

U.S. DEPUTY SECRETARY BURNS INTERVIEWS WITH INDIAN MEDIA

FROM: U.S. STATE DEPARTMENT
Interview With Indian Media

Press Conference
William J. Burns
Deputy Secretary
New Delhi,, India
October 19, 2012
I am very happy to be back in New Delhi at the end of a trip that has also taken me to Japan, South Korea, China and Burma. I am also proud to have been able to contribute in a small way over the past five years, through two administrations, first as Under Secretary of State for Political Affairs and now as Deputy Secretary of State, to the development of an historic partnership between India and the United States. That period has spanned the completion of the civilian nuclear agreement in 2008 as well as the landmark visits of Prime Minister Singh to Washington in 2009 and President Obama to New Delhi and Mumbai in 2010. And today, I am very proud to reemphasize that our strategic partnership with India is of abiding importance to the United States and one in which both our governments continue to make broad and enduring investments.

Since Secretary Clinton hosted Minister Krishna in Washington in June for the third U.S.-India Strategic Dialogue, the interaction between our two governments has continued to deepen and expand. Strong support across the political spectrum in the United States, as well as in India, gives us reason for continued optimism about the bilateral relationship in the years ahead.

Bilateral trade, as you know, is flourishing, and is expected to surpass $100 billion this year. We have done a considerable amount to remove impediments to further expansion of our trade relationship, including in high technology and defense trade, but there is more that we can do. Concluding a Bilateral Investment Treaty should be a top priority for both our countries, and would send a positive signal to our business communities.

I look forward to exchanging views today on how we can continue to advance our civil nuclear cooperation, to which we remain committed, and to deepening our defense and counterterrorism cooperation.

We are encouraged by the Indian government’s recent bold steps toward economic reforms. As Treasury Secretary Geithner said, these reforms will foster economic growth, with increased investment, and greater prosperity. Once implemented, we are confident that U.S. investors will respond positively to these measures with concrete, job-creating projects and proposals.

I also look forward to exchanging views today on regional economic cooperation, including with Afghanistan and Pakistan. We welcome the progress the Indian government has made with Pakistan on building trade and investment ties and appreciate the leading role India has played in spurring private sector investment in Afghanistan.

India has an important voice in the Asia-Pacific region, and it is fitting that I conclude a trip to a number of leading Asia-Pacific powers with a stop in Delhi. I look forward to discussing our mutual goals for the East Asia Summit and the ASEAN Summit, along with our shared interested in promoting maritime security in the Indo-Pacific region and connectivity between India and Southeast Asia.

We appreciate India’s efforts to urge Iran’s compliance with its international obligations and to resume P5+1 talks on its nuclear program. In our judgment, tough sanctions are necessary to bring Iran back to the negotiating table and to abandon its nuclear weapons program.

I look forward to thanking my Indian colleagues for India’s immediate and strong statement of support following the attack on our diplomatic mission in Benghazi, Libya and for steps the government has taken to ensure the safety and security of our personnel throughout India.

India is a model of democratic governance, tolerance and rule of law, and can play a critical role throughout the Middle East and North Africa, as well as East Asia, to support the strengthening of democratic institutions, civil society, education, and many other fields. We look forward to partnering with India on these important challenges in the months and years to come.

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European Space Agency United Kingdom (EN) Update

HALFWAY HOUSE OWNER SENTENCED TO PRISON FOR MEDICARE FRAUD

FROM: U.S. DEPARTMENT OF JUSTICE
Thursday, October 18, 2012

Owner and Operator of Florida Halfway House Company Sentenced to 51 Months in Prison for Role in Medicare Fraud Scheme
WASHINGTON – The owner and operator of New Way Recovery Inc., a Florida corporation that operated several halfway houses, was sentenced today to serve 51 months in prison for his role in a $205 million Medicare fraud scheme involving fraudulent claims for purported partial hospitalization program (PHP) services, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Michael B. Steinbach, Acting Special Agent-in-Charge of the FBI’s Miami Field Office; and Special Agent-in-Charge Christopher B. Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami Office.

Hassan Collins, 41, was sentenced by U.S. District Judge Kevin Michael Moore in the Southern District of Florida. In addition to his prison term, Collins was sentenced to serve three years of supervised release and ordered to pay $2,413,675 in restitution, jointly and severally with co-conspirators.

On June 14, 2012, Collins pleaded guilty to one count of conspiracy to receive and pay health care fraud kickbacks.

According to court documents, from approximately April 2004 through approximately September 2010, Collins, along with co-conspirators, received kickback payments in exchange for referring Medicare beneficiaries, who did not qualify for PHP treatment, for purported PHP services to American Therapeutic Corporation (ATC), a Florida corporation that operated several purported PHPs throughout Florida. Collins and his co-conspirators caused false and fraudulent claims to be submitted to Medicare for PHP services purportedly provided to Medicare beneficiaries at ATC’s locations, when, in fact, the services were never provided.

In related cases, ATC, its management company, Medlink Professional Management Group Inc. and various owners, managers, doctors, therapists, patient brokers and marketers of ATC, were charged with various health care fraud, kickback, money laundering and other offenses in two indictments unsealed in February 2011. ATC, Medlink and more than 20 of the individual defendants charged in these cases have pleaded guilty or have been convicted at trial.

The case is being prosecuted by Fraud Section Trial Attorney Allan J. Medina. The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.