FROM: U.S. JUSTICE DEPARTMENT
Assistant Attorney General Leslie R. Caldwell Delivers Remarks at the ABA’s National Institute on Bitcoin and Other Digital Currencies
Washington, DC United States ~ Friday, June 26, 2015
Thank you Nina [Marino] for that kind introduction.
It is a pleasure to address today’s ABA National Institute on Bitcoin and Other Digital Currencies. As head of the Justice Department’s Criminal Division, I am privileged to lead over 600 attorneys who investigate and prosecute federal crime, help develop criminal law and formulate law enforcement policy. Our talented prosecutors perform crucial work in many of the areas relevant to today’s discussion, including the fight to combat money laundering, financial fraud, child exploitation and cybercrime.
This afternoon, I’d like to discuss the department’s approach to the emerging virtual currency landscape, our ongoing efforts to prosecute those who commit crimes by using virtual currency, and our view that compliance and cooperation from exchanges, companies and other market actors can ensure that emerging technologies are not misused to fund and facilitate illicit activities.
The department is aware of the many legitimate actual and potential uses of virtual currency. It has the potential to promote a more efficient online marketplace. It also potentially can lower costs for brick and mortar businesses, by removing the need to pay credit card-related costs. And in theory, it can help speed and reduce the cost of cross-border transactions. But we also have seen that criminals have been among the first to enthusiastically embrace the use of virtual currency, primarily in crime involving the internet.
Many of the inherent features of virtual currencies are exactly what makes them attractive to criminals. Many criminals like virtual currency systems because these systems conduct transfers quickly, securely and with a perceived level of anonymity. For others, the irreversibility of payments made in virtual currency and lack of oversight by a central financial authority is appealing. Finally, the ability to conduct international peer-to-peer transactions that lack immediately available personally identifying information has made decentralized virtual currency attractive to those who wish to cover their money trail.
As a result, virtual currency facilitates a wide range of traditional criminal activities as well as sophisticated cybercrime schemes.
Much of the illicit conduct involving virtual currency occurs through online black markets such as the now-shuttered Silk Road, which operated on an anonymized “dark web” network that masked users’ physical locations, making them difficult to track. Similar online black markets continue to operate, offering on a global scale, a wide selection of illicit goods and services. While these have included more traditional crimes such as narcotics trafficking, stolen credit card information, and hit-men for hire, we have also seen a significant evolution in criminal activity.
For example, Bitcoin has been utilized to fund the production of child exploitation material through online crowd-sourcing – a development rarely seen before the prevalence of virtual currency. It has also been used to buy and sell lethal toxins over the internet and as a payment method for virtual kidnapping and extortion, allowing near-instantaneous transactions across the globe between perpetrators of phishing and hacking schemes and their victims.
Despite the significant challenges in investigating, much less prosecuting, this activity, the department already has a strong record of bringing cases in which virtual currencies were used to facilitate criminal conduct. While the burgeoning assortment of online exchanges, virtual currencies and virtual marketplaces has created a complex and evolving environment or “ecosystem” as this audience knows it, we too are keeping pace and will pursue those who exploit vulnerabilities in that ecosystem for illegal gain.
In this arena, we rely principally on money services business, money transmission and anti-money laundering statutes. While individual users who are not acting as exchangers or transmitters are not required to register with FinCEN, many virtual currency systems, exchangers and related services are. Additionally, most states also require money transmitters to obtain a state license in order to conduct business in that state, and some like New York have established virtual-currency specific licensing requirements. Any failure to register or obtain a license may subject a money transmitter to criminal prosecution, and a money transmitter that knowingly moves funds connected to a criminal offense also faces prosecution for money laundering, regardless of licensing status. Whether the currency involved is virtual or traditional, the department enforces these critical laws to prosecute money services businesses that engage in money laundering or facilitate crime by flouting registration and licensing requirements.
The department’s enforcement actions have evolved along with the virtual currency ecosystem. Our first major action against a virtual currency service used for illicit purposes was in 2007, when the Criminal Division’s Asset Forfeiture and Money Laundering Section (AFMLS), together with our Computer Crime and Intellectual Property Section (CCIPS), spearheaded the prosecution against e-Gold and its owners on charges related to money laundering and operating an unlicensed money transmitting business. E-Gold was a popular online currency exchange, and was a favored hub for cybercriminals in part because of the lack of account holder identity verification. An e-mail address was the only information needed to set up an account, allowing global anonymous transactions. After a multi-agency investigation, e-Gold and three associated individuals pleaded guilty in 2008 to charges of money laundering and operating an unlicensed money transmitting business.
In the wake of e-Gold’s demise, the virtual currency system Liberty Reserve was created. As alleged in our pending indictment, Liberty Reserve was structured and operated to help users conduct illegal transactions anonymously and launder the proceeds of their crimes.
Liberty Reserve quickly became one of the principal money transfer agents used by cybercriminals around the world to distribute, store and launder the proceeds of their illegal activity. Like e-Gold, any would-be account holder needed little more than a working email address to move funds around the globe. Again, this virtual currency platform became a favorite of cybercriminals and other tech-savvy wrongdoers, enabling them to engage in anonymous financial transactions, all conducted in violation of BSA requirements.
Before the government shut down Liberty Reserve in 2013, it had accumulated more than one million users worldwide, including more than 200,000 in the United States, who conducted approximately 55 million transactions through its system totaling more than $6 billion in funds. These funds included suspected proceeds of credit card fraud, identity theft, investment fraud, computer hacking, child pornography, narcotics trafficking and other crimes.
In a case jointly spearheaded by AFMLS and prosecutors from the Southern District of New York, several of Liberty Reserve’s top executives, including a co-founder of the company, the IT Manager and its Chief Technology Officer, have pleaded guilty to money laundering and operating an unlicensed money transmitting business and have been sentenced up to five years in prison. The creator of Liberty Reserve was extradited to the United States from Spain in October 2014 and is currently awaiting trial, where he is, of course, presumed innocent.
The department has also taken action against a number of individuals and groups who sought to exploit decentralized systems such as Bitcoin and anonymized dark web servers to finance illicit trade and activity in online black markets.
The first major prosecution of a dark market website was by the Southern District of New York in a case against Ross Ulbricht, aka “Dread Pirate Roberts,” who was arrested in October 2013 and convicted by a jury for his role in creating and operating Silk Road, an online black market whose payment operations exclusively used Bitcoin.
Silk Road – designed to act as a black-market bazaar completely free from government regulation and oversight – attempted to enable its users to exchange illegal drugs and other unlawful goods and services anonymously and beyond the reach of law enforcement. It emerged as one of the most extensive criminal marketplaces on the internet. Before it was dismantled by law enforcement, Silk Road was used by thousands of drug dealers and other vendors to distribute hundreds of kilograms of illegal drugs and other unlawful goods and services to well over a 100,000 buyers, and has been linked to at least six overdose deaths around the world. Further, Silk Road was also used to launder hundreds of millions of dollars derived from these unlawful transactions. And just a few weeks ago, in a federal courtroom in New York City, Ulbricht was sentenced to a term of life in prison – a cautionary tale for all those who would use dark spaces on the internet to flout the law.
The Silk Road story, however, did not end with Ross Ulbricht. Two federal agents, sworn to uphold the law, were also apparently lured by the perceived anonymity of virtual currency.
Carl Force, a Special Agent with the Drug Enforcement Administration, and Shaun Bridges, a Special Agent with the U.S. Secret Service, were both assigned to the Baltimore Silk Road Task Force, which investigated illegal activity in the Silk Road marketplace.
Force served as an undercover agent. According to court documents, Force went rogue and developed additional online personas to engage in complex bitcoin transactions to steal hundreds of thousands of dollars from the government and from the targets of the investigation. Independently, Bridges also allegedly engaged in an even larger direct theft, illegally diverting over $800,000 in virtual currency to his personal account.
Both individuals have been charged by the Criminal Division’s Public Integrity Section and prosecutors from the Northern District of California with wire fraud, theft of government property and money laundering. These investigations and prosecutions should send a strong message to those who would exploit technology to commit crimes: no matter how anonymous people might feel using virtual currency, their actions are not untraceable. People should not assume that law enforcement will not notice when they act on the dark web, or that we are not keeping up with emerging technology. Our successful prosecutions have shown that neither the supposed anonymity of the dark web nor the use of virtual currency is an effective shield from arrest and prosecution.
In addition to the operators of Silk Road and the drug traffickers who conducted their deals online in bitcoin, prosecutors from the Southern District of New York have also taken action against those who enabled this activity through the operation of Bitcoin currency exchanges. We understand that there are legitimate exchanges, and many of those are working closely with FinCEN and other regulators to ensure compliance with the law. But there are also many exchanges that don’t concern themselves with following the law.
From approximately December 2011 to October 2013, Robert Faiella ran an underground Bitcoin exchange on the Silk Road website under the alias “BTCKing,” and sold bitcoin to users to fund their purchases on the site.
Faiella would run bitcoin orders through Charlie Shrem, who operated a New York-based company that acted as a bitcoin to fiat currency exchange. Although Shrem was the company’s Anti-Money Laundering Officer and had registered the company with FinCEN as a money services business, Shrem failed to report any of BTCKing’s activity, despite knowing it was being used for illegal purchases. Shrem’s assistance enabled BTCKing to finance Silk Road transactions without collecting any personal identifying information from customers. Faiella pleaded guilty to operating an unlicensed money transmitting business involving funds he knew were intended to support unlawful activity, and Shrem pleaded guilty to aiding and abetting Faiella’s operations. Just this past winter, they were sentenced to four and two years in prison, respectively.
While these cases demonstrate that the criminal use of virtual currency has grown rapidly in recent years, its comparative scale versus traditional money laundering still pales in magnitude. Few virtual systems currently can accommodate the hundreds of millions of dollars we have seen in certain large-scale money laundering schemes involving government-issued currency. That said, as virtual currencies become more mature and better understood by criminals, we expect to see an increase in both individualized criminal activity and large-scale money laundering enterprises.
In some ways, companies and individuals operating in the virtual currency ecosystem are at a crossroads, and they have an opportunity to help virtual currency emerge from its association with criminal activities. While there obviously are good and legitimate reasons to use these currencies, industry participants are now on notice that criminals too, make regular use of them. So, to ensure the integrity of this ecosystem and prevent its penetration by crime, the industry must raise the level of its game on the compliance front.
That includes strict compliance with money services business regulations and anti-money laundering statutes. I understand that you have heard from our partners at FinCEN this morning about our collaborative efforts to investigate and enforce anti-money laundering laws, and you’ll also hear more from Katie Haun this afternoon about the investigation of the virtual currency business Ripple Labs, which operated an unlicensed money transmitting business.
Ripple sold a virtual currency called “XRP,” but failed for a time to register with FinCEN as a money service business and failed to establish and maintain appropriate anti-money laundering protections. Importantly, the department resolved this investigation after Ripple agreed to a number of substantial remedial measures. This includes cooperation in other ongoing investigations, a change in business model and oversight by independent auditors, an extensive look-back through their previous activities and development of an extensive compliance framework.
The resolution with Ripple Labs underscores the importance of having a strong compliance program to ensure adherence to the law. Virtual currency exchangers and other marketplace actors comprise the front line of defense against money laundering and other financial crime. Robust compliance programs, such as those imposed on Ripple Labs, are essential to keeping crime out of our financial system. If a money services business finds itself subject to a criminal investigation, we will look, as we do in all cases involving potential prosecution of a business entity, at the factors set forth in the Principles of Prosecution of Business Organizations, or Filip Factors. Two of the Filip Factors in particular, the existence of an effective and well-designed compliance program and a company’s remedial actions, including steps to improve upon an existing compliance regime, are explicitly set forth as factors prosecutors should consider.
As you know, there is no “one-size-fits-all” compliance program. Rather, effective anti-money laundering and other compliance programs must be tailored to meet the circumstances, size, structure and risks encountered by each entity. And virtual currencies, with their perceived anonymity, pose compliance risks that money transmitters such as Western Union do not face. Industry participants must address those risks, even when it may be costly to do so.
Just as in any other corporate investigation, when reviewing the conduct of, for example, an exchange, the department will examine whether a company has meaningfully addressed compliance. We have resolved cases against many financial institutions and other entities, and are deeply familiar with hallmarks of a genuine compliance program.
We expect virtual currency businesses to take compliance risk as seriously as they take any other business risk. Now, we recognize that new entrants in emerging fields may find that compliance requires a significant expenditure of resources, and we will be context-specific in analyzing appropriate compliance frameworks including consideration of the size and scope of the business. But a real commitment to compliance is a must, particularly given the significant risks in the virtual currency market. In the long run, investment in effective compliance programs will be well worth it, especially in the event that a company has to interact with law enforcement.
In many ways, I think that is a message that everybody gathered here today can appreciate. As the virtual currency markets attempt to move past their association with the Silk Roads and Liberty Reserves of the online world, are used to finance legitimate activity, and are becoming increasingly subject to regulation, robust compliance with existing anti-money laundering laws and regulations is necessary – indeed, critical – to bolster the reliability and value of virtual currency.
The challenges posed by the cases I’ve described are not unique to the virtual currency world. Indeed, these dark web criminals are merely using new tools to conduct the same old crimes, committing what is essentially street crime like drug trafficking and extortion, but over computer networks.
For those investors, exchanges and compliance officers who deal in virtual currency, compliance is of paramount importance. Adherence to regulations and state license requirements can reduce the liability of corporations who invest or deal in virtual currency. As seen with Ripple Labs, compliance and remediation can lead to a more favorable resolution of criminal investigations and adhering to anti-money laundering guidelines allows the legitimate use of virtual currency to grow and be responsive to infiltration and abuse by criminal elements. While the department will aggressively investigate and prosecute criminal activity that is funded through virtual currency, money services businesses that fall under the department’s scrutiny can also receive credit for meaningful and sincere compliance efforts.
Your compliance and cooperation will make it more difficult for those who seek to operate illicit and underground marketplaces and will be a key element for law enforcement to shed light on these illegal virtual currency transactions. It also will help to ensure the continued viability of virtual currency systems in the future.
Thank you for the opportunity to address this year’s National Institute on Bitcoin and Other Virtual Currencies.
Sunday, June 28, 2015
243 CHARGED IN $712 MILLION IN MEDICARE FRAUD SCHEMES
FROM: U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
June 18, 2015
National Medicare fraud takedown results in charges against 243 individuals for approximately $712 million in false billing
Most defendants charged and largest alleged loss amount in Strike Force history
WASHINGTON – Department of Health and Human Services (HHS) Secretary Sylvia M. Burwell and Attorney General Loretta E. Lynch announced today a nationwide sweep led by the Medicare Fraud Strike Force in 17 districts, resulting in charges against 243 individuals, including 46 doctors, nurses and other licensed medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $712 million in false billings. In addition, the Centers for Medicare & Medicaid Services (CMS) also suspended a number of providers using its suspension authority as provided in the Affordable Care Act. This coordinated takedown is the largest in Strike Force history, both in terms of the number of defendants charged and loss amount.
Secretary Burwell and Attorney General Lynch were joined in the announcement by FBI Director James B. Comey, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Inspector General Daniel R. Levinson of the HHS Office of Inspector General (HHS-OIG) and Deputy Administrator and Director of CMS Center for Program Integrity Dr. Shantanu Agrawal.
The defendants are charged with various health care fraud-related crimes, including conspiracy to commit health care fraud, violations of the anti-kickback statutes, money laundering and aggravated identity theft. The charges are based on a variety of alleged fraud schemes involving various medical treatments and services, including home health care, psychotherapy, physical and occupational therapy, durable medical equipment (DME) and pharmacy fraud. More than 44 of the defendants arrested are charged with fraud related to the Medicare prescription drug benefit program known as Part D, which is the fastest-growing component of the Medicare program overall.
“This action represents the largest criminal health care fraud takedown in the history of the Department of Justice, and it adds to an already remarkable record of enforcement,” said Attorney General Lynch. “The defendants charged include doctors, patient recruiters, home health care providers, pharmacy owners, and others. They billed for equipment that wasn’t provided, for care that wasn’t needed, and for services that weren’t rendered. In the days ahead, the Department of Justice will continue our focus on preventing wrongdoing and prosecuting those whose criminal activity drives up medical costs and jeopardizes a system that our citizens trust with their lives. We are prepared – and I am personally determined – to continue working with our federal, state, and local partners to bring about the vital progress that all Americans deserve.”
“This Administration is committed to fighting fraud and protecting taxpayer dollars in Medicare and Medicaid,” said Secretary Burwell. “This takedown adds to the hundreds of millions we have saved through fraud prevention since the Affordable Care Act was passed. With increased resources that have allowed the Strike Force to expand and new tools, like enhanced screening and enrollment requirements, tough new rules and sentences for criminals, and advanced predictive modeling technology, we have managed to better find and fight fraud as well as stop it before it starts.”
According to court documents, the defendants participated in alleged schemes to submit claims to Medicare and Medicaid for treatments that were medically unnecessary and often never provided. In many cases, patient recruiters, Medicare beneficiaries and other co-conspirators allegedly were paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare for services that were medically unnecessary or never performed. Collectively, the doctors, nurses, licensed medical professionals, health care company owners and others charged are accused of conspiring to submit a total of approximately $712 million in fraudulent billing.
“The people charged in this case targeted the system each of us depends on in our most vulnerable moments,” said FBI Director James Comey. “Health care fraud is a crime that hurts all of us and each dollar taken from programs that help the sick and the suffering is one dollar too many.”
“Every day, the Criminal Division is more strategic in our approach to prosecuting Medicare Fraud,” said Assistant Attorney General Caldwell. “We obtain and analyze billing data in real-time. We target hot spots – areas of the country and the types of health care services where the billing data shows the potential for a high volume of fraud – and we are speeding up our investigations. By doing this, we are increasingly able to stop schemes at the developmental stage, and to prevent them from spreading to other parts of the country.”
“Health care fraud drives up health care costs, wastes taxpayer money, undermines the Medicare and Medicaid programs, and endangers program beneficiaries,” said HHS-OIG Inspector General Levinson. “Today’s takedown includes perpetrators of prescription drug fraud, home health care fraud, and personal care services fraud, three particularly harmful types of fraud plaguing our health care system. This record-setting takedown sends a message to would-be perpetrators that health care fraud is a risky way to line your pockets. Our agents and our law enforcement partners stand ready to protect these vital programs and ensure that those who would steal from federal health care programs ultimately pay for their crimes.”
The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since their inception in March 2007, Strike Force operations in nine locations have charged over 2,300 defendants who collectively have falsely billed the Medicare program for over $7 billion.
Including today’s enforcement actions, nearly 900 individuals have been charged in national takedown operations, which have involved more than $2.5 billion in fraudulent billings. Today’s announcement marks the first time that districts outside of Strike Force locations participated in a national takedown, and they accounted for 82 defendants charged in this takedown.
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In Miami, a total of 73 defendants were charged with offenses relating to their participation in various fraud schemes involving approximately $263 million in false billings for home health care, mental health services, and pharmacy fraud. In one case, administrators in a mental health center billed close to $64 million between 2006 and 2012 for purported intensive mental health treatment to beneficiaries and allegedly paid kickbacks to patient recruiters and assisted living facility owners throughout the Southern District of Florida. Medicare paid approximately half of the claimed amount.
In Houston and McAllen, 22 individuals were charged in cases involving over $38 million in alleged fraud. One of these defendants allegedly coached beneficiaries on what to tell doctors to make them appear eligible for Medicare services and treatments and then received payment for those who qualified. The company that paid the defendant for patients submitted close to $16 million in claims to Medicare, over $4 million of which was paid.
In Dallas, seven people were charged in connection with home health care schemes. In one scheme, six owners and operators of a physician house call company submitted nearly $43 million in billings under the name of a single doctor, regardless of who actually provided the service. The company also significantly exaggerated the length of physician visits, often times billing for 90 minutes or more for an appointment that lasted only 15 or 20 minutes.
In Los Angeles, eight defendants were charged for their roles in schemes to defraud Medicare of approximately $66 million. In one case, a doctor is charged with causing almost $23 million in losses to Medicare through his own fraudulent billing and referrals for DME, including over 1000 expensive power wheelchairs, and home health services that were not medically necessary and often not provided.
In Detroit, 16 defendants face charges for their alleged roles in fraud, kickback and money laundering schemes involving approximately $122 million in false claims for services that were medically unnecessary or never rendered, including home health care, physician visits, and psychotherapy, as well as pharmaceuticals that were billed by not dispensed. Among these are three owners of a hospice service who allegedly paid kickbacks for referrals made by two doctors who defrauded Medicare Part D by issuing medically unnecessary prescriptions.
In Tampa, five individuals were charged with participating in a variety of schemes, ranging from fraudulent physical therapy billings to a scheme involving millions in physician services and tests that never occurred. In one case, a licensed pain management physician sought reimbursement for nerve conduction studies and other services that he allegedly never performed. Medicare paid the defendant over $1 million for these purported services.
In Brooklyn, N.Y., nine individuals were charged in two separate criminal schemes involving physical and occupational therapy. In one case, three individuals face charges for their roles in a previously charged $50 million physical therapy scheme. In the second case, six defendants were charged for their roles in a $8 million physical and occupational therapy scheme.
In New Orleans, 11 people were charged in connection with $110 million in home health care and psychotherapy schemes. In one case, four individuals who operated two companies – one in Louisiana and one in California – that mass-marketed talking glucose monitors (TGMs) across the country allegedly sent TGMs to Medicare beneficiaries regardless of whether they were needed or requested. The companies billed Medicare approximately $38 million for the devices, and Medicare paid the companies over $22 million.
The cases announced today are being prosecuted and investigated by Medicare Fraud Strike Force teams from the Fraud Section of the Justice Department’s Criminal Division and from the U.S. Attorney’s Offices for the Southern District of Florida, Eastern District of Michigan, Eastern District of New York, Southern District of Texas, Central District of California, Eastern District of Louisiana, Northern District of Texas, Northern District of Illinois, and the Middle District of Florida; and agents from the FBI, HHS-OIG and state Medicaid Fraud Control Units.
In addition to the Strike Force, today’s enforcement actions include cases brought by the U.S. Attorney’s Offices for the Southern District of California, Southern District of Illinois, Northern District of Ohio, Western District of Kentucky, District of Maryland, District of Connecticut, District of Alaska and the Southern District of Georgia.
A complaint or indictment is merely a charge, and defendants are presumed innocent until proven guilty.
The Affordable Care Act has provided new tools and resources to fight fraud in federal health care programs. The law provides an additional $350 million for health care fraud prevention and enforcement efforts, which has allowed the Justice Department to hire more prosecutors and the Strike Force to expand from two cities to nine. It also toughens sentencing for criminal activity, enhances provider and supplier screenings and enrollment requirements, and encourages increased sharing of data across government.
In addition to providing new tools and resources to fight fraud, the Affordable Care Act clarified that for sentencing purposes, the loss is determined by the amount billed to Medicare and increased the sentencing guidelines for the billed amounts, which has provided a strong deterrent effect due to increased prison time, particularly in the most egregious cases.
Saturday, June 27, 2015
U.S. GOVERNMENT DEPARTMENTS ANNOUNCE PHASE II OF ANTI-TRAFFICKING COORDINATION INITIATIVE
FROM: U.S. JUSTICE DEPARTMENT
Thursday, June 25, 2015
Departments of Justice, Labor and Homeland Security Announce Phase II of Anti-Trafficking Coordination Team Initiative
Phase II Will Build on Momentum of Highly Effective Phase I to Further Enhance Interagency Anti-Trafficking Efforts
The Departments of Justice, Labor (DOL) and Homeland Security (DHS) today announced the launch of Phase II of the Anti-Trafficking Coordination Team (ACTeam) Initiative aimed at streamlining federal criminal investigations and prosecutions of human trafficking offenses.
Phase II ACTeams will be convened in up to six selected districts around the country, following a competitive, nationwide, interagency selection process. The ACTeams, comprised of federal prosecutors and investigators representing multiple federal enforcement agencies, will implement a joint strategic action plan to develop high-impact federal investigations and prosecutions, vindicate the rights of human trafficking victims, bring traffickers to justice and dismantle human trafficking networks.
“Human traffickers prey on some of the most vulnerable members of our society to exploit them for labor, for sex and for servitude of all kinds,” said Attorney General Loretta E. Lynch. “Their crimes, appropriately described as modern-day slavery, have no place in a nation that has overcome the scourge of slavery. That’s why the Department of Justice is committed—and I am personally determined—to hold human traffickers accountable, provide support to trafficking survivors, and stand up for the rights and the dignity that they deserve.”
“Labor trafficking affects workers who are vulnerable to exploitation for a number of reasons, who may not know their workplace rights, and may be afraid to raise their voices,” said Secretary Thomas E. Perez of DOL. “The challenges we face as a nation and a government demand unprecedented levels of interagency collaboration. Through these ACTeams, we’re bringing our respective departments’ collective resources and expertise to bear, building a whole even greater than the sum of our individual parts. DOL will remain a vigorous and unfaltering partner during phase II. Together we can ensure workers receive the wages they’ve earned, restore victims’ basic human rights and bring traffickers to justice.”
“The ACTeam Initiative has been an important tool in our collective ability to combat sex trafficking, forced labor and domestic servitude here in the United States,” said Secretary Jeh Johnson of DHS. “This is not a problem that we can afford to ignore which is why, under a banner of shared responsibility and collaboration, the Departments of Justice, Labor and Homeland Security are recommitting ourselves to the fight against human trafficking by expanding the ACTeam Initiative. Through the unified voice of the Blue Campaign, the Department of Homeland Security will continue to combat human trafficking through the guiding philosophy that we are at our best when we work together.”
These departments collaborated to develop the ACTeam Initiative to streamline rapidly expanding human trafficking enforcement efforts, focusing on forced labor, international sex trafficking and sex trafficking of adults by force, fraud and coercion. Project Safe Childhood and the Innocence Lost National Initiative continue to focus on sex trafficking of minors and sexual exploitation of minors.
Drawing together federal prosecutors and federal agents from multiple investigative agencies, ACTeams streamline coordination on the front lines of federal human trafficking investigations and prosecutions, while also enhancing collaboration between front-line enforcement efforts and national human trafficking subject matter experts in the Justice Department’s Human Trafficking Prosecution Unit, Executive Office of U.S. Attorneys and FBI Civil Rights Unit, DHS’s Immigration and Customs Enforcement-Homeland Security Investigations, DOL’s Wage and Hour Division and the Office of the Inspector General. In 2011, the Attorney General and the Secretaries of DHS and DOL announced Phase I of the ACTeam Initiative and the designation of six Phase I Pilot ACTeam sites in Atlanta; El Paso, Texas; Kansas City, Missouri; Los Angeles; Memphis, Tennessee; and Miami, following a rigorous interagency selection process.
During the ACTeam Phase I period, Fiscal Years 2012-2013, federal human trafficking prosecutions involving forced labor, international sex trafficking and sex trafficking of adults rose by 35 percent nationwide, reflecting strong partnerships among U.S. Attorneys’ Offices, the Civil Rights Division’s Human Trafficking Prosecution Unit, federal, state and local law enforcement agencies, and non-governmental victim assistance organizations and task forces led by U.S. Attorneys’ Offices.
The ACTeams played a significant role in leading these nationwide advances. In ACTeam Districts, prosecutions of forced labor, international sex trafficking and adult sex trafficking rose even more markedly than they did nationally, due to the force-multiplier effect of interagency commitment to implementing coordinated, joint anti-trafficking strategies and due to advanced training, expertise and operational support provided to the Phase I ACTeams. Comparing federal forced labor, international sex trafficking and adult sex trafficking prosecutions during the ACTeam Phase I period of Fiscal Years 2012-2013, to the pre-Phase I period of Fiscal Years 2010-2011:
Cases filed increased by:
119 percent in ACTeam Districts,
18 percent in non-ACTeam Districts; and
35 percent nationwide.
Defendants charged increased by:
114 percent in ACTeam Districts,
12 percent in non-ACTeam Districts; and
28 percent nationwide.
Defendants convicted increased by:
86 percent in ACTeam Districts,
14 percent in non-ACTeam Districts; and
26 percent nationwide.
Thursday, June 25, 2015
Departments of Justice, Labor and Homeland Security Announce Phase II of Anti-Trafficking Coordination Team Initiative
Phase II Will Build on Momentum of Highly Effective Phase I to Further Enhance Interagency Anti-Trafficking Efforts
The Departments of Justice, Labor (DOL) and Homeland Security (DHS) today announced the launch of Phase II of the Anti-Trafficking Coordination Team (ACTeam) Initiative aimed at streamlining federal criminal investigations and prosecutions of human trafficking offenses.
Phase II ACTeams will be convened in up to six selected districts around the country, following a competitive, nationwide, interagency selection process. The ACTeams, comprised of federal prosecutors and investigators representing multiple federal enforcement agencies, will implement a joint strategic action plan to develop high-impact federal investigations and prosecutions, vindicate the rights of human trafficking victims, bring traffickers to justice and dismantle human trafficking networks.
“Human traffickers prey on some of the most vulnerable members of our society to exploit them for labor, for sex and for servitude of all kinds,” said Attorney General Loretta E. Lynch. “Their crimes, appropriately described as modern-day slavery, have no place in a nation that has overcome the scourge of slavery. That’s why the Department of Justice is committed—and I am personally determined—to hold human traffickers accountable, provide support to trafficking survivors, and stand up for the rights and the dignity that they deserve.”
“Labor trafficking affects workers who are vulnerable to exploitation for a number of reasons, who may not know their workplace rights, and may be afraid to raise their voices,” said Secretary Thomas E. Perez of DOL. “The challenges we face as a nation and a government demand unprecedented levels of interagency collaboration. Through these ACTeams, we’re bringing our respective departments’ collective resources and expertise to bear, building a whole even greater than the sum of our individual parts. DOL will remain a vigorous and unfaltering partner during phase II. Together we can ensure workers receive the wages they’ve earned, restore victims’ basic human rights and bring traffickers to justice.”
“The ACTeam Initiative has been an important tool in our collective ability to combat sex trafficking, forced labor and domestic servitude here in the United States,” said Secretary Jeh Johnson of DHS. “This is not a problem that we can afford to ignore which is why, under a banner of shared responsibility and collaboration, the Departments of Justice, Labor and Homeland Security are recommitting ourselves to the fight against human trafficking by expanding the ACTeam Initiative. Through the unified voice of the Blue Campaign, the Department of Homeland Security will continue to combat human trafficking through the guiding philosophy that we are at our best when we work together.”
These departments collaborated to develop the ACTeam Initiative to streamline rapidly expanding human trafficking enforcement efforts, focusing on forced labor, international sex trafficking and sex trafficking of adults by force, fraud and coercion. Project Safe Childhood and the Innocence Lost National Initiative continue to focus on sex trafficking of minors and sexual exploitation of minors.
Drawing together federal prosecutors and federal agents from multiple investigative agencies, ACTeams streamline coordination on the front lines of federal human trafficking investigations and prosecutions, while also enhancing collaboration between front-line enforcement efforts and national human trafficking subject matter experts in the Justice Department’s Human Trafficking Prosecution Unit, Executive Office of U.S. Attorneys and FBI Civil Rights Unit, DHS’s Immigration and Customs Enforcement-Homeland Security Investigations, DOL’s Wage and Hour Division and the Office of the Inspector General. In 2011, the Attorney General and the Secretaries of DHS and DOL announced Phase I of the ACTeam Initiative and the designation of six Phase I Pilot ACTeam sites in Atlanta; El Paso, Texas; Kansas City, Missouri; Los Angeles; Memphis, Tennessee; and Miami, following a rigorous interagency selection process.
During the ACTeam Phase I period, Fiscal Years 2012-2013, federal human trafficking prosecutions involving forced labor, international sex trafficking and sex trafficking of adults rose by 35 percent nationwide, reflecting strong partnerships among U.S. Attorneys’ Offices, the Civil Rights Division’s Human Trafficking Prosecution Unit, federal, state and local law enforcement agencies, and non-governmental victim assistance organizations and task forces led by U.S. Attorneys’ Offices.
The ACTeams played a significant role in leading these nationwide advances. In ACTeam Districts, prosecutions of forced labor, international sex trafficking and adult sex trafficking rose even more markedly than they did nationally, due to the force-multiplier effect of interagency commitment to implementing coordinated, joint anti-trafficking strategies and due to advanced training, expertise and operational support provided to the Phase I ACTeams. Comparing federal forced labor, international sex trafficking and adult sex trafficking prosecutions during the ACTeam Phase I period of Fiscal Years 2012-2013, to the pre-Phase I period of Fiscal Years 2010-2011:
Cases filed increased by:
119 percent in ACTeam Districts,
18 percent in non-ACTeam Districts; and
35 percent nationwide.
Defendants charged increased by:
114 percent in ACTeam Districts,
12 percent in non-ACTeam Districts; and
28 percent nationwide.
Defendants convicted increased by:
86 percent in ACTeam Districts,
14 percent in non-ACTeam Districts; and
26 percent nationwide.
Friday, June 26, 2015
READOUT: CALL BETWEEN PRESIDENT OBAMA AND PRESIDENT PUTIN
FROM: THE WHITE HOUSE
Readout of the President’s Call with President Vladimir Putin of Russia
President Vladimir Putin of the Russian Federation called President Obama today. They discussed the necessity of countering ISIL and developments in the Middle East, as well as the situation in Ukraine. President Obama reiterated the need for Russia to fulfill its commitments under the Minsk agreements, including the removal of all Russian troops and equipment from Ukrainian territory. The leaders discussed the increasingly dangerous situation in Syria, and underscored the importance of continued P5+1 unity in ongoing negotiations to prevent Iran from acquiring a nuclear weapon.
Readout of the President’s Call with President Vladimir Putin of Russia
President Vladimir Putin of the Russian Federation called President Obama today. They discussed the necessity of countering ISIL and developments in the Middle East, as well as the situation in Ukraine. President Obama reiterated the need for Russia to fulfill its commitments under the Minsk agreements, including the removal of all Russian troops and equipment from Ukrainian territory. The leaders discussed the increasingly dangerous situation in Syria, and underscored the importance of continued P5+1 unity in ongoing negotiations to prevent Iran from acquiring a nuclear weapon.
VICE PRESIDENT BIDEN'S STATEMENT ON SAME-SEX MARRIAGE DECISION BY SUPREME COURT
FROM: THE WHITE HOUSE
Statement by the Vice President on the Supreme Court Decision in Obergefell v. Hodges
All marriages, at their root, are about love.
Today, the Supreme Court affirmed that simple proposition—supported by a majority of Americans and a majority of our states—by recognizing that men marrying men and women marrying women are guaranteed the same civil rights and equal protection under our Constitution afforded to Jill and me, and to anyone else.
We couldn’t be prouder. Over the years—in their homes, on our staff, on the frontlines of war, and in houses of worship—Jill and I have befriended countless gay, lesbian, bisexual, and transgender Americans who share a love for their partners constrained only by social stigma and discriminatory laws. But today, their love is set free with the right to marry and the recognition of that marriage throughout the country.
This day is for them, their children, and their families. And it is for generations of advocates—gay, lesbian, transgender, straight—who for decades fought a lonely and dangerous battle. People of absolute courage who risked their lives, jobs, and reputations to come forward in pursuit of the basic right recognized today, but at a time when neither the country nor the courts would protect or defend them.
And this day is for history to remember as one where, as a nation, our laws finally recognize that all people should be treated with respect and dignity—and that all marriages, at their root, are defined by unconditional love.
Statement by the Vice President on the Supreme Court Decision in Obergefell v. Hodges
All marriages, at their root, are about love.
Today, the Supreme Court affirmed that simple proposition—supported by a majority of Americans and a majority of our states—by recognizing that men marrying men and women marrying women are guaranteed the same civil rights and equal protection under our Constitution afforded to Jill and me, and to anyone else.
We couldn’t be prouder. Over the years—in their homes, on our staff, on the frontlines of war, and in houses of worship—Jill and I have befriended countless gay, lesbian, bisexual, and transgender Americans who share a love for their partners constrained only by social stigma and discriminatory laws. But today, their love is set free with the right to marry and the recognition of that marriage throughout the country.
This day is for them, their children, and their families. And it is for generations of advocates—gay, lesbian, transgender, straight—who for decades fought a lonely and dangerous battle. People of absolute courage who risked their lives, jobs, and reputations to come forward in pursuit of the basic right recognized today, but at a time when neither the country nor the courts would protect or defend them.
And this day is for history to remember as one where, as a nation, our laws finally recognize that all people should be treated with respect and dignity—and that all marriages, at their root, are defined by unconditional love.
TWO MASTERPIECES SMUGGLED INTO U.S. ARE RETURNED TO BRAZIL
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| "Hannibal" by Jean-Michel Basquiat. Photo Credit: DOJ. |
Manhattan U.S. Attorney Announces Return to Brazil of Two Masterpieces Linked to Bank Fraud
Preet Bharara, the United States Attorney for the Southern District of New York, and Deputy Special Agent in Charge Michael Shea of U.S. Immigration and Customs Enforcement’s ("ICE") Homeland Security Investigations New England, announced today that a painting by Jean-Michel Basquiat called "Hannibal" (the "Basquiat"), as well as a Roman Togatus statue, were returned to Brazil at a repatriation ceremony at the United States Attorney’s Office in Manhattan, New York. The painting and the statue were smuggled into the United States in violation of customs law and were forfeited to the government as a result of civil forfeiture action brought by the United States.
Manhattan U.S. Attorney Preet Bharara stated: "Art and antiquities have special value and meaning that cannot readily be quantified. As a result, they have long been the subject of theft and deception, as well as a means to launder illicit proceeds. Art should serve to inspire the mind and nourish the soul, and not be allowed to become a conduit for crime."
HSI Deputy Special Agent in Charge Michael Shea stated: "It is always a pleasure to return cultural artifacts to the people of another nation. I would like to thank our special agents and partners at INTERPOL for their diligence in this investigation. ICE will do everything in its power to help preserve and safeguard a nation's history by identifying, locating, and recovering stolen antiquities."
In related repatriation ceremonies held on September 21, 2010, and May 9, 2014, the U.S. Attorney’s Office for the Southern District of New York returned to Brazil three paintings – "Modern Painting with Yellow Interweave" by Roy Lichtenstein (the "Lichtenstein"), "Figures dans une structure" by Joaquin Torres-Garcia (the "Torres-Garcia"), and "Composition abstraite" by Serge Poliakoff (the "Poliakoff") – that were smuggled into the United States.
The Basquiat and the Togatus once belonged to Brazilian banker Edemar Cid Ferreira. Ferreira, the founder and former president of Banco Santos, S.A. ("Banco Santos"), was convicted in Brazil of crimes against the national financial system and money laundering. In December 2006, Ferreira was sentenced in Brazil to 21 years in prison.
As part of the case, a Sao Paulo Court judge also ordered the search, seizure, and confiscation of assets that Ferreira, his associates, and members of his family had acquired with unlawfully obtained funds from Banco Santos. Those assets included the Basquiat, the Togatus, the Lichtenstein, the Torres-Garcia, the Poliakoff, and other artwork valued at $20 million to $30 million. The artwork was kept in several locations, including Ferreira’s home in the Morumbi neighborhood of Sao Paulo, the main offices of Banco Santos, and at a holding facility. When Brazilian authorities searched these locations, they found that several of the most valuable works of art were missing, including the Basquiat and the Togatus.
The Sao Paulo Court sought INTERPOL’s assistance after searching museums and institutions in Brazil for the missing artwork. In October and November 2007, INTERPOL and the Government of Brazil sought the assistance of the United States to locate and seize the missing works on behalf of the Brazilian government. The ensuing Southern District of New York and HSI investigation revealed that the Basquiat and the Togatus were shipped from the Netherlands to a secure storage facility in New York on August 21, 2007, and September 11, 2007, respectively. The invoices, however, failed to comply with U.S. customs laws in a number of respects. For example, the shipping invoices did not identify the pieces and falsely claimed that their value was $100 each. In fact, the Basquiat alone was recently appraised at $8 million.
HSI special agents based in New Haven, Connecticut, located and seized the Basquiat in November 2007, and the U.S. Attorney’s Office for the Southern District of New York filed a civil forfeiture Complaint alleging that the Basquiat had been brought into the United States illegally. Since the filing of the original Complaint in February 2008, the United States seized additional works of art and filed two amended Complaints seeking the forfeiture of the Lichtenstein, the Torres-Garcia, the Poliakoff, and the Togatus.
After extensive litigation, United States District Court Judge Richard J. Sullivan granted the government’s motion for summary judgment and entered an order forfeiting the Basquiat and the Togatus on May 10, 2013. The Second Circuit Court of Appeals affirmed Judge Sullivan’s order on September 9, 2014.
* * *
Mr. Bharara praised the investigative work of HSI in helping to locate and seize the painting. He was grateful for the assistance of the Department of Justice’s Office of International Affairs. Mr. Bharara thanked Brazilian authorities for their assistance in the case. He also acknowledged the assistance of the U.S. Department of State and the U.S. Embassy in Brazil for its assistance in the investigation.
The case is being handled by the Money Laundering and Asset Forfeiture Unit of the U.S. Attorney’s Office. Assistant U.S. Attorney Alexander Wilson is in charge of the litigation.
PRESIDENT OBAMA'S STATEMENT ON TRADE
FROM: THE WHITE HOUSE
Statement by the President
I applaud the Democrats and Republicans in Congress who came together to give the United States the chance to negotiate strong, high-standard agreements for free and fair trade that protect American workers and give our businesses the opportunity to compete. With bipartisan majorities, Congress also voted to expand vital support for thousands of American workers each year, and to bolster economic relations between sub-Saharan Africa and the United States. Of course, we still have more work to do on behalf of our workers, which is why I'll continue to encourage Congress to pass robust trade enforcement legislation that will help us crack down on countries that break the rules. But this week's votes represent a much-needed win for hardworking American families.
As President, I've spent the last six and half years fighting to grow our economy and strengthen our middle class, and that remains my top priority today. I believe we should make sure that the United States, and not countries like China, write the rules of our global economy. We should support more good jobs that pay good wages. We should level the playing field so that our workers have the chance to compete and win. That's what this new legislation will help us do, and I look forward to signing these bipartisan bills into law as soon as they reach my desk.
Statement by the President
I applaud the Democrats and Republicans in Congress who came together to give the United States the chance to negotiate strong, high-standard agreements for free and fair trade that protect American workers and give our businesses the opportunity to compete. With bipartisan majorities, Congress also voted to expand vital support for thousands of American workers each year, and to bolster economic relations between sub-Saharan Africa and the United States. Of course, we still have more work to do on behalf of our workers, which is why I'll continue to encourage Congress to pass robust trade enforcement legislation that will help us crack down on countries that break the rules. But this week's votes represent a much-needed win for hardworking American families.
As President, I've spent the last six and half years fighting to grow our economy and strengthen our middle class, and that remains my top priority today. I believe we should make sure that the United States, and not countries like China, write the rules of our global economy. We should support more good jobs that pay good wages. We should level the playing field so that our workers have the chance to compete and win. That's what this new legislation will help us do, and I look forward to signing these bipartisan bills into law as soon as they reach my desk.
CDC REPORTS ON DIAGNOSED, UNDIAGNOSED HIV INFECTION IN U.S. FROM 2008-2012
FROM: U.S. CENTERS FOR DISEASE CONTROL AND PREVENTION
MMWR News Synopsis for June 25, 2015
Prevalence of Diagnosed and Undiagnosed HIV Infection — United States, 2008–2012
HIV diagnosis is the essential first step in ensuring those living with HIV can access ongoing care and treatment, as well as other information and tools to help prevent transmission to others. More than one million people are living with HIV in the U.S. Although most of these individuals are aware of their infection, those who are not cannot benefit from life-extending treatment. They account for a significant proportion (30 percent) of new HIV transmissions. Reaching these individuals with HIV testing is critical. For this analysis, CDC researchers analyzed data from the National HIV Surveillance System to estimate the prevalence of diagnosed and undiagnosed HIV for the 50 states and the District of Columbia. In 2012, the number of people living with HIV ranged from 110 (Iowa) to 3,936 (Washington, DC) per 100,000 persons in 42 jurisdictions with stable estimates. The percentage living with diagnosed HIV ranged from 77.4 percent in Louisiana to 90 percent or greater in Colorado, Connecticut, Delaware, Hawaii, and New York. These five jurisdictions have already met the National HIV/AIDS Strategy goal of increasing the percentage of people living with HIV who know their serostatus to 90 percent by 2015. These data underscore the continued need for ongoing efforts to increase testing to further reduce undiagnosed HIV infection. The authors also note that because the percentage of persons who are diagnosed varies by geographic area, efforts tailored to each area’s unique needs and situations may be needed.
MMWR News Synopsis for June 25, 2015
Prevalence of Diagnosed and Undiagnosed HIV Infection — United States, 2008–2012
HIV diagnosis is the essential first step in ensuring those living with HIV can access ongoing care and treatment, as well as other information and tools to help prevent transmission to others. More than one million people are living with HIV in the U.S. Although most of these individuals are aware of their infection, those who are not cannot benefit from life-extending treatment. They account for a significant proportion (30 percent) of new HIV transmissions. Reaching these individuals with HIV testing is critical. For this analysis, CDC researchers analyzed data from the National HIV Surveillance System to estimate the prevalence of diagnosed and undiagnosed HIV for the 50 states and the District of Columbia. In 2012, the number of people living with HIV ranged from 110 (Iowa) to 3,936 (Washington, DC) per 100,000 persons in 42 jurisdictions with stable estimates. The percentage living with diagnosed HIV ranged from 77.4 percent in Louisiana to 90 percent or greater in Colorado, Connecticut, Delaware, Hawaii, and New York. These five jurisdictions have already met the National HIV/AIDS Strategy goal of increasing the percentage of people living with HIV who know their serostatus to 90 percent by 2015. These data underscore the continued need for ongoing efforts to increase testing to further reduce undiagnosed HIV infection. The authors also note that because the percentage of persons who are diagnosed varies by geographic area, efforts tailored to each area’s unique needs and situations may be needed.
LARGEST DIALYSIS SERVICE PROVIDER TO PAY $450 MILLION TO RESOLVE FALSE CLAIMS ACT ALLEGATIONS
FROM: U.S. JUSTICE DEPARTMENT
Wednesday, June 24, 2015
DaVita to Pay $450 Million to Resolve Allegations That it Sought Reimbursement for Unnecessary Drug Wastage
DaVita Healthcare Partners, Inc., the largest provider of dialysis services in the United States, has agreed to pay $450 million to resolve claims that it violated the False Claims Act by knowingly creating unnecessary waste in administering the drugs Zemplar and Venofer to dialysis patients, and then billing the federal government for such avoidable waste. Davita is headquartered in Denver, Colorado, and has dialysis clinics in 46 states and the District of Columbia.
“This settlement is an example of what can be accomplished as a result of the successful cooperation between the government and whistleblowers in protecting our vital federal health care programs,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.
This civil settlement resolves allegations brought in a whistleblower action that DaVita devised and employed dosing grids and/or protocols specifically designed to create unnecessary waste of the drugs Venofer and Zemplar. These drugs are packaged in single-use vials, which are intended for one-time use. Sometimes, the amount of the drug in the vials does not match the dosage specified by the physician, resulting in the remainder of the drug in the vial being discarded.
At the time of the alleged scheme, Medicare would reimburse a dialysis provider for certain waste if the dialysis provider – acting in good faith – discarded the remainder of the drug contained in a single-use vial after administering the requisite dose and/or quantity of the drug to a Medicare patient.
The whistleblowers’ complaint alleged that, to create unnecessary Zemplar waste, DaVita required its employees to provide Zemplar to dialysis patients pursuant to mandatory and wasteful “dosing grids.” Zemplar, a Vitamin D supplement usually administered at every dialysis session, is packaged in single-use vial sizes of 2 mcg, 5 mcg, and 10 mcg. Davita allegedly created unnecessary waste by requiring its employees to provide Zemplar to dialysis patients pursuant to mandatory “dosing grids,” which were designed to maximize the amount of Zemplar administered to patients. DaVita then allegedly billed the government not only for the amount of Zemplar administered to patients, but also for the amount “wasted.”
With regard to Venofer, an iron supplement packaged only in a single-use vial size of 100 mg during the relevant time period, DaVita allegedly enacted protocols that required nurses to administer this drug in small amounts, and at frequent intervals, to maximize wastage. For instance, in certain instances, DaVita’s protocol called for a patient to receive 25 mg of Venofer per week, which resulted in 300 mg of waste per month that was billed to the Government. In contrast, if the order had been filled by giving the patient the entirety of a single 100 mg vial, once per month, no waste would have resulted.
In 2011, the Centers for Medicare and Medicaid Services changed the manner by which it reimbursed dialysis providers for such drugs. As a consequence, wastage derived from single-use vials was no longer profitable, and, as a result, DaVita allegedly changed its practices and reduced its drug wastage dramatically.
“Through personal sacrifice and courage, two whistleblowers exposed knowingly wasteful dosing practices designed simply to increase profits and improperly drain the government’s resources,” said Acting U.S. Attorney John Horn of the Northern District of Georgia. “This settlement returns hundreds of millions of dollars to the treasury that had been improperly obtained by DaVita through these wasteful practices.”
The allegations resolved today arose from a lawsuit filed and ultimately litigated to this succesful resolution by two whistleblowers, Dr. Alon Vanier and nurse Daniel Barbir, under the qui tam provisions of the False Claims Act. Under the Act, private citizens can bring suit on behalf of the government for false claims and share in any recovery. The United States may intervene in the action or, as in this case, the whistleblower may pursue the matter.
This case was monitored by the U.S. Attorney’s Office of the Northern District of Georgia and the Civil Division’s Commercial Litigation Branch.
Wednesday, June 24, 2015
DaVita to Pay $450 Million to Resolve Allegations That it Sought Reimbursement for Unnecessary Drug Wastage
DaVita Healthcare Partners, Inc., the largest provider of dialysis services in the United States, has agreed to pay $450 million to resolve claims that it violated the False Claims Act by knowingly creating unnecessary waste in administering the drugs Zemplar and Venofer to dialysis patients, and then billing the federal government for such avoidable waste. Davita is headquartered in Denver, Colorado, and has dialysis clinics in 46 states and the District of Columbia.
“This settlement is an example of what can be accomplished as a result of the successful cooperation between the government and whistleblowers in protecting our vital federal health care programs,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.
This civil settlement resolves allegations brought in a whistleblower action that DaVita devised and employed dosing grids and/or protocols specifically designed to create unnecessary waste of the drugs Venofer and Zemplar. These drugs are packaged in single-use vials, which are intended for one-time use. Sometimes, the amount of the drug in the vials does not match the dosage specified by the physician, resulting in the remainder of the drug in the vial being discarded.
At the time of the alleged scheme, Medicare would reimburse a dialysis provider for certain waste if the dialysis provider – acting in good faith – discarded the remainder of the drug contained in a single-use vial after administering the requisite dose and/or quantity of the drug to a Medicare patient.
The whistleblowers’ complaint alleged that, to create unnecessary Zemplar waste, DaVita required its employees to provide Zemplar to dialysis patients pursuant to mandatory and wasteful “dosing grids.” Zemplar, a Vitamin D supplement usually administered at every dialysis session, is packaged in single-use vial sizes of 2 mcg, 5 mcg, and 10 mcg. Davita allegedly created unnecessary waste by requiring its employees to provide Zemplar to dialysis patients pursuant to mandatory “dosing grids,” which were designed to maximize the amount of Zemplar administered to patients. DaVita then allegedly billed the government not only for the amount of Zemplar administered to patients, but also for the amount “wasted.”
With regard to Venofer, an iron supplement packaged only in a single-use vial size of 100 mg during the relevant time period, DaVita allegedly enacted protocols that required nurses to administer this drug in small amounts, and at frequent intervals, to maximize wastage. For instance, in certain instances, DaVita’s protocol called for a patient to receive 25 mg of Venofer per week, which resulted in 300 mg of waste per month that was billed to the Government. In contrast, if the order had been filled by giving the patient the entirety of a single 100 mg vial, once per month, no waste would have resulted.
In 2011, the Centers for Medicare and Medicaid Services changed the manner by which it reimbursed dialysis providers for such drugs. As a consequence, wastage derived from single-use vials was no longer profitable, and, as a result, DaVita allegedly changed its practices and reduced its drug wastage dramatically.
“Through personal sacrifice and courage, two whistleblowers exposed knowingly wasteful dosing practices designed simply to increase profits and improperly drain the government’s resources,” said Acting U.S. Attorney John Horn of the Northern District of Georgia. “This settlement returns hundreds of millions of dollars to the treasury that had been improperly obtained by DaVita through these wasteful practices.”
The allegations resolved today arose from a lawsuit filed and ultimately litigated to this succesful resolution by two whistleblowers, Dr. Alon Vanier and nurse Daniel Barbir, under the qui tam provisions of the False Claims Act. Under the Act, private citizens can bring suit on behalf of the government for false claims and share in any recovery. The United States may intervene in the action or, as in this case, the whistleblower may pursue the matter.
This case was monitored by the U.S. Attorney’s Office of the Northern District of Georgia and the Civil Division’s Commercial Litigation Branch.
Thursday, June 25, 2015
AFFORDABLE CARE ACT TAX CREDITS STILL AVAILABLE AFTER SUPREME COURT RULING ACCORDING TO HHS SECRETARY BURWELL'S STATEMENT
FROM: U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
FOR IMMEDIATE RELEASE
June 25, 2015
Statement by HHS Secretary Sylvia M. Burwell on the Affordable Care Act
Today’s Supreme Court decision confirms that the Affordable Care Act’s tax credits are available to all eligible Americans no matter where they live. Americans in all 50 states and the District of Columbia can continue to rely on the security and peace of mind that come with affordable, quality health care coverage.
Over six million Americans and their families will sleep easier knowing they will still be able to afford health coverage. Millions more won’t have to worry about an upward spiral in their premiums because of today’s decision, even if they didn’t buy their insurance through the Marketplace. And the law’s financial assistance will be available in the next open enrollment so that others can benefit as well.
The Affordable Care Act is working to improve access, affordability and quality.
That is the story I hear as I travel across this country. People’s lives have been changed and even saved because they have health insurance—many for the first time. They have coverage that can keep them healthy and provide quality care when they are sick.
The Affordable Care Act also strengthens protections for almost every American with health insurance. People with pre-existing conditions can no longer be denied coverage or charged higher premiums. Critical preventive services, like immunizations and certain cancer screenings, are available at no additional cost. Since parents can keep their children on their health insurance policies up to age 26, young Americans can stay in school or find their first job without worrying about their coverage. And your health premiums can no longer be higher just because you are a woman.
I hope that this positive decision will do what the American people want us to do -- focus on the substance and turn to building on the progress we have made. They want us to move forward to provide more Americans with affordable access to quality coverage and create a health care system that improves the quality of care and spends our dollars more wisely.
FOR IMMEDIATE RELEASE
June 25, 2015
Statement by HHS Secretary Sylvia M. Burwell on the Affordable Care Act
Today’s Supreme Court decision confirms that the Affordable Care Act’s tax credits are available to all eligible Americans no matter where they live. Americans in all 50 states and the District of Columbia can continue to rely on the security and peace of mind that come with affordable, quality health care coverage.
Over six million Americans and their families will sleep easier knowing they will still be able to afford health coverage. Millions more won’t have to worry about an upward spiral in their premiums because of today’s decision, even if they didn’t buy their insurance through the Marketplace. And the law’s financial assistance will be available in the next open enrollment so that others can benefit as well.
The Affordable Care Act is working to improve access, affordability and quality.
That is the story I hear as I travel across this country. People’s lives have been changed and even saved because they have health insurance—many for the first time. They have coverage that can keep them healthy and provide quality care when they are sick.
The Affordable Care Act also strengthens protections for almost every American with health insurance. People with pre-existing conditions can no longer be denied coverage or charged higher premiums. Critical preventive services, like immunizations and certain cancer screenings, are available at no additional cost. Since parents can keep their children on their health insurance policies up to age 26, young Americans can stay in school or find their first job without worrying about their coverage. And your health premiums can no longer be higher just because you are a woman.
I hope that this positive decision will do what the American people want us to do -- focus on the substance and turn to building on the progress we have made. They want us to move forward to provide more Americans with affordable access to quality coverage and create a health care system that improves the quality of care and spends our dollars more wisely.
READOUT: PRESIDENT OBAMA'S MEETING WITH CHINA'S REP TO U.S.-CHINA DIALOGUE ON PEOPLE-TO-PEOPLE EXCHANGE
FROM: THE WHITE HOUSE
Readout of the President’s Meeting with China’s Special Representatives to the U.S.-China Strategic and Economic Dialogue and Consultation on People-to-People Exchange
The President met today with China’s Special Representatives to the U.S.-China Strategic and Economic Dialogue and Consultation on People-to-People Exchange, Vice Premier Liu Yandong, Vice Premier Wang Yang, State Councilor Yang Jiechi, and the Chinese delegation. The President acknowledged the importance of these annual ministerial-level mechanisms for expanding practical cooperation on regional and global challenges, while at the same time narrowing differences. The President and the Chinese Special Representatives agreed to further expand U.S.-China cooperation on climate and clean energy, and affirmed their unity of purpose in our approach to the Paris climate negotiations in December. Recognizing the importance of economic ties to the overall bilateral relationship, the President expressed support for China’s efforts to reform and rebalance its economy, and for our ongoing bilateral investment treaty negotiations, while urging China to address major economic challenges in the areas of its currency, technology and investment policies. The President raised ongoing U.S. concerns about China’s cyber and maritime behavior, and he urged China to take concrete steps to lower tensions.
Readout of the President’s Meeting with China’s Special Representatives to the U.S.-China Strategic and Economic Dialogue and Consultation on People-to-People Exchange
The President met today with China’s Special Representatives to the U.S.-China Strategic and Economic Dialogue and Consultation on People-to-People Exchange, Vice Premier Liu Yandong, Vice Premier Wang Yang, State Councilor Yang Jiechi, and the Chinese delegation. The President acknowledged the importance of these annual ministerial-level mechanisms for expanding practical cooperation on regional and global challenges, while at the same time narrowing differences. The President and the Chinese Special Representatives agreed to further expand U.S.-China cooperation on climate and clean energy, and affirmed their unity of purpose in our approach to the Paris climate negotiations in December. Recognizing the importance of economic ties to the overall bilateral relationship, the President expressed support for China’s efforts to reform and rebalance its economy, and for our ongoing bilateral investment treaty negotiations, while urging China to address major economic challenges in the areas of its currency, technology and investment policies. The President raised ongoing U.S. concerns about China’s cyber and maritime behavior, and he urged China to take concrete steps to lower tensions.
DEPUTY SECRETARY WORK SAYS SPACE CAPABILITIES AT HEART OF AMERICAN MILITARY CAPABILITIES
Right: Deputy Defense Secretary Bob Work delivers remarks at the U.S. Geospatial Intelligence Foundation's annual symposium in Washington, D.C., June 23, 2015. The event is the nation's largest gathering of intelligence professionals. DoD photo by U.S. Army Sgt. 1st Class Clydell Kinchen.
Work Calls for Collaboration to Maintain Tech Dominance
By Jim Garamone
DoD News, Defense Media Activity
WASHINGTON, June 23, 2015 – Space capabilities are at the heart of American military capabilities, and the Pentagon and private industry must innovate to maintain those capabilities, Deputy Defense Secretary Bob Work said at the GeoInt Symposium here today.
The event is sponsored by the U.S. Geospatial Intelligence Foundation and held at the D.C. Convention Center.
Work told attendees that the next 25 years are going to be far more challenging to the United States military than the past quarter century.
End of 'Unipolar World'
“Our space capabilities are going to be contested in a way they haven’t been before and we need to be prepared for that eventuality,” the deputy secretary said.
Geospatial intelligence is going to remain crucial to U.S. space capability and the national security apparatus, Work said.
“Because of the things coming along, we are going to have to embrace innovation and change,” he said.
Work said the unipolar world of the past 25 years –- where the United States was the world’s only superpower –- is ending. Other nations are emerging as great powers, which he defines as “one that possesses enough military assets to put up a serious fight in an all-out conventional war against the most powerful state in the world. And possesses a nuclear deterrent that can survive a nuclear strike.”
Both Russia and China meet this definition or soon will, Work said.
Russia, China
Russia’s actions in its illegal annexation of Crimea and its continued actions in eastern Ukraine are worrying, the deputy secretary said. Russian President Vladimir Putin’s nuclear saber-rattling also concerns global leaders, he added.
“Russia represents a clear and present danger,” Work said. “It comes after 25 years of the United States and Europe working very hard to include Russia in the European community and partner with it on a variety of issues.”
The United States still wants Russia to come in from the cold, renounce its current course and work with the West, Work said.
But Russia is trying to undermine NATO, dominate the Arctic and challenge many of America’s broader global links, the deputy secretary said.
China is a rising power that will present “a significant and varied challenge over the next 25 years,” Work said.
“This doesn’t mean to suggest in any way, shape, or form that China and the United States are destined to become adversaries,” he added.
There will be areas where the two sides will agree and cooperate and other areas where they disagree and won’t, Work said. The two nations’ militaries, he added, will continue to work together and expand military-to-military relationships.
Still, the department must take into account capabilities and behave accordingly, he said.
Deterrence
The best response to any challenge from wherever they may come, is strong conventional and nuclear deterrent capabilities, Work said.
Conventional deterrence posture requires three things, he said.
“First, we have to overmatch the technical capabilities of any potential adversary,” he said. “Second, we have to maintain the ability to project power across transoceanic distances and defeat any adversary's attempt to project power across inter- or intra-theater distances. Third, we have to routinely demonstrate both capabilities.”
Key to these is technological superiority to provide overmatch on any battlefield, Work said. Key to the overmatch, he said, was “our unparalleled space capabilities.”
America’s space architecture built during the Cold War “provided us with an instant ability to set up theater-wide guided munition battle capability, enabled by space-based targeting navigation capabilities,” he said.
The capabilities allowed the United States “to project more power, more precisely, more slickly, with less cost and less force structure and with fewer casualties,” Work said.
A Shrinking Lead
The security environment is changing and the U.S. military technological lead is shrinking, he explained.
“Many countries -– including Russia and China –- are pursuing levels of weapons development that we haven’t seen since the mid-1980s,” Work said. “Second, over the last 14 years our focus was where it should be -– with the men and women fighting our nation’s battles.”
Both combined to shrink the amount of money available to maintain U.S. military technological superiority, the deputy secretary said.
The U.S. military once considered space as an uncontested area of operations, he said.
However, adversaries recently have focused on space systems as a potential chink in American armor, Work said.
“Space must now be considered a contested operational domain, in a way we haven’t in the past,” he said.
Doubling Down on Geo Intel
DoD officials recognize the importance of protecting U.S. spacesystems and making them more resilient, Work said. The department has increased its funding in space more than $5 billion in the next budget. And, DoD, the intelligence community and private industry are working together to build in resilience to satellite constellations.
“Together we must and will develop command centers which will help us fight through attacks, and together we must counter an adversary’s capabilities -- especially their [intelligence, surveillance and reconnaissance] assets,” the deputy secretary said.
And the U.S. military wants more capabilities developed from its investments in space, Work said.
“We are going to double down on geoint in the future,” he said. “We want to establish patterns of life from space. We want to know what the unusual looks like. If all of a sudden a lot of cars show up in the parking lot of an adversary's missile plant, we want to know about it -- and quickly.
“If small boats are in the [Persian] Gulf or pirates are congregating off Aden -- we want to know,” Work continued. “If soldiers are snapping pictures of themselves in war zones and posting them to social media sites, we want to know exactly where those pictures were taken.”
DEPUTY DEFENSE SECRETARY WORK'S SPEECH ON THE CHINA AEROSPACE CHALLENGE
Right: Deputy Defense Secretary Bob Work gives the keynote address during the inaugural China Aerospace Studies Institute conference in Arlington, Va., June 22, 2015. The Air Force and the Rand Corp. co-sponsored the event, which focused on assessing Chinese aerospace training and operational competence. DoD photo by Army Sgt. 1st Class Clydell Kinchen.
Work: Institute to Help U.S. Meet China Aerospace Challenge
By Cheryl Pellerin
DoD News, Defense Media Activity
WASHINGTON, June 23, 2015 – Deputy Defense Secretary Bob Work delivered the keynote speech yesterday in Arlington, Virginia, at an inaugural conference of the China Aerospace Studies Institute, or CASI, newly established by the Air Force and RAND Corp.
The institute’s focus is on China, which Work called a rising power that’s experiencing a growing economy and increased military technical capabilities.
“I hope that CASI, along with many organizations like it, are going to help us maintain an unfair competitive aerospace advantage far into the future,” Work said, “because that is the surest means to underwrite conventional deterrence, contribute to crisis stability and safeguard our nation's interests.”
The conference focused on a move by China to do more realistic training across the board under what they call actual combat or wartime conditions, the deputy secretary said, and improve their readiness.
Serious Challenge
“CASI needs to help us think on how we respond to this challenge. It's a serious one and one that we have to take seriously,” he said.
Work said the institute supports President Barack Obama's rebalance to the Asia-Pacific region and the Defense Department’s Defense Innovation Initiative, both of which are top priorities for Defense Secretary Ash Carter and himself.
“More generally,” Work noted, “it's an exemplar of what we need to do to prepare for the future.”
The United States will maintain enormous absolute power as far into the future as anyone can see, Work said, but its relative power will decline in an increasingly technological world and one in which U.S. leadership will be increasingly challenged.
Great Powers
The most significant challenge to U.S. global leadership and the one in Work’s view that promises to be the most difficult to manage is the possible reemergence of great-power competitions.
A great power, as defined by international relations theorist John Mearsheimer, “is a state having sufficient military assets to put up a serious fight in a conventional war against the most powerful state in the world, and that possesses a nuclear deterrent that can survive a nuclear strike against it,” Work paraphrased.
If China is not a great power now it has the potential to be, he said, “and under any circumstances they are going to provide us with an enduring and very difficult military challenge, which will stress us.”
China will present a more significant and perhaps enduring strategic challenge to the United States over the next 25 years if not beyond, the deputy secretary said, one that DoD must be particularly focused on.
Competitive Relationship
“This does not mean to suggest I think that we are doomed to have an overtly hostile relationship,” Work said.
The future U.S.-China relationship will have elements of cooperation and competition and not open hostility, he said, and DoD continues to pursue military-to-military cooperation and confidence-building measures with China.
But DoD can’t overlook the competitive aspects of the relationship with China, Work said.
“Since the end of World War II we have relied upon our technological superiority. Why? To provide a conventional overmatch to overcome an adversary's advantages in time, space and size of forces, because generally we are moving across oceans to meet them,” he said.
Margin of Superiority
Today the U.S. margin of technological military superiority is steadily eroding and China and Russia are pursuing levels of advanced weapons development that haven’t been seen, Work said, since the mid-1980s, near the peak of the Soviet Union’s surge in Cold War defense spending.
For the United States, he said, part of the solution is a long-range research and development planning program, or LRRDPP, under the direction of Frank Kendall, undersecretary of defense for acquisition, technology and logistics.
The program aims to identify promising technologies that can be moved into development within the next five years, and long-range science and technology investments that can be made now for big payoffs in 10 to 20 years, the deputy secretary said.
“The initial results of these efforts … are going to be reported to [Carter] next month and they will be used to provide me and the vice chairman of the Joint Chiefs of Staff strategic guidance on how to approach the strategic portfolio in fiscal year 2017 budget preparation and submission,” Work explained.
Strategic Capabilities
Another shorter-term part of the solution is the Strategic Capabilities Office, or SCO, established by Carter to look at weapons and systems and platforms in production, in the field or programmed now, and use them in a different way than intended to offer an unexpected operational or tactical advantage, the deputy secretary said.
Work said the department is exploring new combinations of technologies, operational concepts and organizational constructs that will help maintain its ability to project combat power into a theater in a place and during a time of its own choosing, especially aerospace power.
“Aerospace power has always been and will always be fundamental to our ability to project power across transoceanic distances, to conduct theater entry operations, and to mount joint combined-arms operations,” Work said.
“And because of its rapid global mobility, air power will likely be the first on the scene in any unexpected crisis in the future,” he added.
Air-Land Battle 2.0
China is mounting a serious aerospace challenge against the United States and is intent on closing the gap between its aerospace forces and those of the United States, Work said.
China also is developing stealth aircraft, intelligence, surveillance and reconnaissance and battle-management platforms, advanced air-to-air and air-to-surface missiles, and top-of-the-line electronic warfare equipment, he said.
“In other words,” Work said, “we have to think about the nature and character of air-land battle 2.0 -- another area where CASI, I believe, will be central to our thinking.”
DOJ ANNOUNCES FILING CHARGES ON OVER 2,700 HUMAN SMUGGLERS
FROM: U.S. JUSTICE DEPARTMENT
Tuesday, June 23, 2015
Department of Justice Filed Charges on more than 2,700 Human Smugglers in Fiscal Year 2014
Between 2009 and 2014, More Than 18,000 Individuals Charged With Human Smuggling by Federal Prosecutors
The Justice Department is committed to using its resources to bring to justice those that are breaking the law by smuggling migrants into the United States. In Fiscal Year 2014 (FY14, Oct. 1, 2013, up to Sept. 30, 2014), the Justice Department filed criminal charges against 2,762 individuals for human smuggling or harboring immigrants. Nearly 90 percent of the criminal charges filed in FY14 for smuggling took place in Texas (1,515), California (511), Arizona (394), Florida (75) and New York (31). The announcement of these actions is just one part of ongoing, collaborative efforts to tackle unlawful migration. These efforts also helped to address last year’s influx of Central American migrants, including unaccompanied children and families crossing into the Rio Grande Valley, and demonstrate a continued commitment to dismantling human smuggling operations that put so many lives at risk.
Individuals that facilitate smuggling acts need to be aware that they face criminal prosecution and fines. They also need to be aware of the dangers faced by the individuals that are being smuggled and also that the Department of Justice will seek forfeiture of funds transferred to others in connection with a smuggling crime. In addition, individuals trying to bring a family member to the United States by transferring funds to a coyote should be aware that those acts are against the law and their funds can be seized by the federal government.
The penalty for human smuggling if done for commercial benefit is up to 10 years in prison and an accompanying fine. For example, in January, Ruth Fernandez Morales-Lopez pleaded guilty before U.S. District Judge Hilda G. Tagle of the Southern District of Texas to bringing in and harboring aliens and money laundering. Morales-Lopez admitted that she was the person who decided, based on whether they paid their smuggling fees, which individuals could stay at the “stash house,” located in San Benito, Texas. She further admitted that more than $1 million in her bank account was comprised of smuggling fees and that she structured her withdrawals from that account to circumvent the Bank Secrecy Act. Morales-Lopez faces up to 10 years in federal prison for the smuggling charge and up to 20 years for money laundering. The remaining five defendants in the case, all of whom pleaded guilty, each face up to 10 years of federal imprisonment.
Many of the stories revealed in court cases outline the severe examples of exploitation and violence against migrants. For example, in April 2014, a federal jury in Del Rio, Texas, convicted Eduardo Rocha Sr., 44, for his role in a human smuggling ring operation in Carrizo Springs, Texas, known for torturing its victims and exploiting their families. The evidence presented during the trial showed that Rocha Sr. extorted additional money from family members of migrants that already lived in the United States. In some instances, he ordered his accomplices to subject migrants to brutal violence and mutilation while their family members were forced to listen over the phone.
The Justice Department has a long history of working with the Department of Homeland Security and other federal partners to investigate and prosecute human smugglers. These collaborative efforts lead to prosecutions of those responsible for the illegal entry of individuals, including unaccompanied minors. The string of human smuggling convictions on the southwest border emphasizes the federal law enforcement resources being brought to bear to dismantle and disrupt these dangerous, criminal operations. Human smuggling acts can also lead to extremely dangerous circumstances that pose a public safety threat and significant humanitarian concerns. Many of the cases prosecuted by U.S. Attorney’s Offices throughout the country involve migrants who have been kidnapped, taken hostage, beaten, sexually assaulted, threatened or who have actually died as a result of living under some of the most perilous conditions.
Tragic stories have become all too familiar along the southwest border. In October 2014, for example, Carlos Hernandez-Palma and Fernando Armenta-Romero were apprehended and sentenced for their role in the death of an undocumented immigrant woman that they abandoned in the wilderness of Otay Mountain near the San Diego border. Court records revealed that the woman’s husband pleaded with the smugglers, to no avail, to call for assistance for his pregnant wife after she became gravely ill during the venture. It would be several days before the U.S. Border Patrol found his wife’s body. Her cause of death was attributed to hyperglycemia from being diabetic and hypothermia from environmental exposure.
In addition, the Justice Department is working with countries like Honduras, Guatemala, El Salvador and Mexico to identify and prosecute smugglers who are aiding unaccompanied children crossing the U.S. border. The coordinated efforts also target facilitators operating in foreign countries.
These ongoing enforcement efforts started before last year’s surge of unaccompanied minors and the Justice Department will continue to be vigilant in bringing smugglers to justice. In the years 2009 to 2014, the Justice Department charged more than 18,000 defendants with smuggling or harboring immigrants.
Tuesday, June 23, 2015
Department of Justice Filed Charges on more than 2,700 Human Smugglers in Fiscal Year 2014
Between 2009 and 2014, More Than 18,000 Individuals Charged With Human Smuggling by Federal Prosecutors
The Justice Department is committed to using its resources to bring to justice those that are breaking the law by smuggling migrants into the United States. In Fiscal Year 2014 (FY14, Oct. 1, 2013, up to Sept. 30, 2014), the Justice Department filed criminal charges against 2,762 individuals for human smuggling or harboring immigrants. Nearly 90 percent of the criminal charges filed in FY14 for smuggling took place in Texas (1,515), California (511), Arizona (394), Florida (75) and New York (31). The announcement of these actions is just one part of ongoing, collaborative efforts to tackle unlawful migration. These efforts also helped to address last year’s influx of Central American migrants, including unaccompanied children and families crossing into the Rio Grande Valley, and demonstrate a continued commitment to dismantling human smuggling operations that put so many lives at risk.
Individuals that facilitate smuggling acts need to be aware that they face criminal prosecution and fines. They also need to be aware of the dangers faced by the individuals that are being smuggled and also that the Department of Justice will seek forfeiture of funds transferred to others in connection with a smuggling crime. In addition, individuals trying to bring a family member to the United States by transferring funds to a coyote should be aware that those acts are against the law and their funds can be seized by the federal government.
The penalty for human smuggling if done for commercial benefit is up to 10 years in prison and an accompanying fine. For example, in January, Ruth Fernandez Morales-Lopez pleaded guilty before U.S. District Judge Hilda G. Tagle of the Southern District of Texas to bringing in and harboring aliens and money laundering. Morales-Lopez admitted that she was the person who decided, based on whether they paid their smuggling fees, which individuals could stay at the “stash house,” located in San Benito, Texas. She further admitted that more than $1 million in her bank account was comprised of smuggling fees and that she structured her withdrawals from that account to circumvent the Bank Secrecy Act. Morales-Lopez faces up to 10 years in federal prison for the smuggling charge and up to 20 years for money laundering. The remaining five defendants in the case, all of whom pleaded guilty, each face up to 10 years of federal imprisonment.
Many of the stories revealed in court cases outline the severe examples of exploitation and violence against migrants. For example, in April 2014, a federal jury in Del Rio, Texas, convicted Eduardo Rocha Sr., 44, for his role in a human smuggling ring operation in Carrizo Springs, Texas, known for torturing its victims and exploiting their families. The evidence presented during the trial showed that Rocha Sr. extorted additional money from family members of migrants that already lived in the United States. In some instances, he ordered his accomplices to subject migrants to brutal violence and mutilation while their family members were forced to listen over the phone.
The Justice Department has a long history of working with the Department of Homeland Security and other federal partners to investigate and prosecute human smugglers. These collaborative efforts lead to prosecutions of those responsible for the illegal entry of individuals, including unaccompanied minors. The string of human smuggling convictions on the southwest border emphasizes the federal law enforcement resources being brought to bear to dismantle and disrupt these dangerous, criminal operations. Human smuggling acts can also lead to extremely dangerous circumstances that pose a public safety threat and significant humanitarian concerns. Many of the cases prosecuted by U.S. Attorney’s Offices throughout the country involve migrants who have been kidnapped, taken hostage, beaten, sexually assaulted, threatened or who have actually died as a result of living under some of the most perilous conditions.
Tragic stories have become all too familiar along the southwest border. In October 2014, for example, Carlos Hernandez-Palma and Fernando Armenta-Romero were apprehended and sentenced for their role in the death of an undocumented immigrant woman that they abandoned in the wilderness of Otay Mountain near the San Diego border. Court records revealed that the woman’s husband pleaded with the smugglers, to no avail, to call for assistance for his pregnant wife after she became gravely ill during the venture. It would be several days before the U.S. Border Patrol found his wife’s body. Her cause of death was attributed to hyperglycemia from being diabetic and hypothermia from environmental exposure.
In addition, the Justice Department is working with countries like Honduras, Guatemala, El Salvador and Mexico to identify and prosecute smugglers who are aiding unaccompanied children crossing the U.S. border. The coordinated efforts also target facilitators operating in foreign countries.
These ongoing enforcement efforts started before last year’s surge of unaccompanied minors and the Justice Department will continue to be vigilant in bringing smugglers to justice. In the years 2009 to 2014, the Justice Department charged more than 18,000 defendants with smuggling or harboring immigrants.
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