Lee William Dubois, a former Department of Defense (DoD) contractor, was sentenced today to three years in prison for his participation in a scheme to steal fuel worth approximately $39.6 million from the U.S. Army in Iraq, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer and U.S. Attorney for the Eastern District of Virginia Dana J. Boente.

Dubois, 32, of Lexington, S.C., was sentenced today by U.S. District Court Judge Gerald Bruce Lee in the Eastern District of Virginia. Dubois had pleaded guilty to a one-count information charging him with theft of government property on Oct. 7, 2008. In connection with his plea, Dubois testified at the trial of his co-conspirator, Robert Jeffery, who was convicted by a jury on Aug. 11, 2009. Dubois also repaid to the U.S. government $450,000 that represented the illicit proceeds of the scheme.

In his plea, Dubois admitted that between July 2007 and May 2008, he and his co-conspirators, purportedly representing DoD contractors in Iraq, used fraudulently-obtained documents to enter the Victory Bulk Fuel Point (VBFP) in Camp Liberty, Iraq, and presented false fuel authorization forms to steal aviation and diesel fuel from the VBFP for subsequent sale on the black market. According to plea documents, the United States owns and operates the VBFP in support of Operation Iraqi Freedom. The VBFP supplies aviation and diesel fuel to both military units and U.S. government contractors operating in and around the VBFP. To retrieve and transport the stolen fuel from the VBFP, Dubois admitted he and his co-conspirators employed approximately 10 individuals to serve as drivers and escorts of the trucks containing the stolen fuel. These individuals were able to enter the VBFP illegally by using government-issued common access cards.

Dubois admitted he obtained the cards by falsely representing to the U.S. Army that the drivers and escorts were employees of a DoD contractor, when, in fact, they were not employed by any government contractors. In addition, Dubois admitted he went to the VBFP and presented false documents authorizing his co-conspirators to draw fuel. Dubois also admitted that for two months during the scheme, he served as the lead escort for the stolen fuel. According to information contained in the plea documents, during the course of the scheme, Dubois and his co-conspirators stole approximately 10 million gallons of fuel worth approximately $39.6 million. Dubois received at least $450,000 in personal profits from the subsequent sale of the fuel on the black market.

In related cases, Robert Jeffery was convicted on Aug. 11, 2009, after a two-day jury trial, of one count of conspiracy and one count of theft of government property for his role in the fuel theft. Robert Young and Michel Jamil each pleaded guilty to participating in the same scheme. The evidence at trial showed that Jeffery served as an escort for the fuel trucks and retrieved hundreds of thousands of gallons of fuel from the VBFP. Sentencing for Jeffery is scheduled for December 11, 2009.

Young, 56, a former captain in the U.S. Army, pleaded guilty on July 24, 2009. In his guilty plea, Young admitted that between October 2007 and May 2008, he and his co-conspirators used fraudulently-obtained documents to enter the VBFP and presented false fuel authorization forms to steal aviation and diesel fuel from the VBFP for subsequent sale on the black market. As a result of the scheme, Young received approximately $1 million in personal profits. Sentencing for Young is scheduled for Oct. 30, 2009.

Jamil, 59, pleaded guilty on July 27, 2009, with his role in the scheme. Jamil admitted that in March 2007, he and two of his co-conspirators arranged for the creation of a false Memorandum for Record (MFR) authorizing individuals to draw fuel from VBFP, purportedly on behalf of a company serving as a contractor to the U.S. government. Jamil admitted that he and his co-conspirators used this false MFR and others to steal large quantities of fuel from the U.S. Army for subsequent sale on the Iraqi black market. As a result of the scheme, Jamil admitted he received between $75,000 and $87,500 in profits. Sentencing is scheduled for Nov. 13, 2009.

The case is being prosecuted by Special Assistant U.S. Attorney Steve Linick, Deputy Chief of the Criminal Division's Fraud Section, and Fraud Section Trial Attorneys Andrew Gentin and Brigham Cannon. The investigation of this case was conducted by the U.S. Army Criminal Investigation Command, the Defense Criminal Investigative Service, the Washington Field Office of the FBI and members of the National Procurement Fraud Task Force and the International Contract Corruption Task Force (ICCTF).

The National Procurement Fraud Task Force, created in October 2006 by the Department of Justice, was designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The ICCTF is a joint law enforcement agency task force that seeks to detect, investigate and dismantle corruption and contract fraud resulting from U.S. Overseas Contingency Operations, including in Afghanistan, Iraq and Kuwait.

Source: US Dept. of Justice

Hansruedi Schumacher and Matthias Rickenbach, both of Switzerland, were indicted today for conspiring to defraud the United States, the Justice Department and Internal Revenue Service (IRS) announced. According to the indictment, Schumacher worked as an executive manager at Neue Zuercher Bank (NZB), a Swiss private bank located in Zurich, Switzerland. Rickenbach worked as a Swiss attorney who provided legal advice and services to U.S. clients. Both are alleged to have aided wealthy Americans conceal assets and income in Switzerland from United States authorities.

According to the indictment, Schumacher and Rickenbach helped wealthy American clients conceal their assets by establishing sham and nominee offshore entities to hide their U.S. clients' assets and income while allowing these clients to still control the assets and make investment decisions.

The indictment further alleges that Schumacher and Rickenbach regularly traveled to the United States to conduct banking and investment activities with their U.S. clients and that when they traveled they concealed their business activities in the United States by falsely representing to American authorities that they were traveling to the U.S. for personal reasons. While in the United States, the defendants would sometimes bring cash for their clients..

According to court documents, Schumacher and Rickenbach aided their wealthy American clients repatriate money back to the United States using several deceptive means. Schumacher and Rickenbach helped their clients obtain offshore credit cards and created sham loan documents. Additionally, Schumacher and Rickenbach falsified bank documents to generate the appearance that assets of their U.S. clients belonged to Swiss citizens, and they falsified documents to disguise their United States clients' repatriation of offshore funds as inheritances from foreign citizens.

According to court documents, Schumacher and Rickenbach discouraged their U.S. clients from voluntarily coming into compliance in the United States. Instead, the defendants encouraged their clients to transfer their assets from UBS, a large Swiss bank, to NZB, a smaller bank in Switzerland. The defendants told their clients that their assets and identification would be safer at NZB because they had no presence in the United States and was therefore less likely to be pressured by the American authorities to disclose the identities of their United States clients.

"The Justice Department will continue to investigate leads provided by U.S. taxpayers who have come forward to disclose foreign bank accounts and will prosecute those foreign bankers and banks who illegally helped U.S. clients evade taxes," said John A. DiCicco, Acting Assistant Attorney General of the Justice Department's Tax Division. "We encourage foreign banks to come forward and disclose their conduct immediately, before we learn about their criminal conduct from U.S. taxpayers."

"Today's Indictment is the latest prosecution in this District against foreign bankers and professionals who enabled and assisted wealthy Americans conceal their assets offshore," said Jeffrey H. Sloman, Acting U.S. Attorney for the Southern District of Florida. "As more Americans voluntarily come into compliance and face their financial obligations, more leads are being developed and new investigations are initiated. American taxpayers who sought to avoid taxes by hiding their assets in Swiss accounts are on notice that this investigation continues."

"This is another step in our ongoing effort to pursue hidden offshore assets -- no matter where they are located," said IRS Commissioner Doug Shulman. "We're in the early stages of our work to crack down on offshore tax evasion. Through our efforts, we are gaining access to more and more information on institutions and individuals involved in offshore tax evasion, and you can expect us to use all of our enforcement tools to stop this abuse. For people with hidden offshore assets, they have an opportunity to get right with the government. Time is quickly running out, and people should take advantage of our voluntary disclosure process before special provisions expire September 23."

Acting Assistant Attorney General DiCicco and Acting U.S. Attorney Sloman commended the investigative efforts of the IRS agents involved in this case. The prosecution is being handled by Senior Litigation Counsel Kevin M. Downing and Trial Attorney Michael P. Ben'Ary of the Tax Division, and Assistant U.S. Attorney Jeffrey A. Neiman.

U.S. citizens who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such account on Schedule B, Part III of their individual income tax return. Additionally, American citizens must file a Report of Foreign Bank and Financial Accounts, or F-Bar, with the U.S. Treasury, disclosing any financial account in a foreign country with assets in excess of $10,000 for which they have a financial interest in or signature authority, or other authority over.

Source: US Dept. of Justice

Five members of an extended family were sentenced to federal prison late yesterday, all receiving lengthy sentences for their roles in an international sex trafficking ring that lured young Guatemalan women and girls to the Los Angeles area and forced them into prostitution, the Justice Department announced.

The five defendants sentenced today - four Guatemalan nationals and one Mexican national - were found guilty in February of various charges, including conspiracy; sex trafficking by force, fraud or coercion; and importation of aliens for purposes of prostitution. Gladys Vasquez Valenzuela, 38, was sentenced to 40 years in prison; Gabriel Mendez, the Mexican national, 35, was sentenced to 35 years; and the other three defendants, Mirna Jeanneth Vasquez Valenzuela, aka Miriam, 28, Maria de los Angeles Vicente, aka Angela, 30, and Maribel Rodriquez Vasquez, 29, were each sentenced to 30 years in prison.

Evidence showed that the defendants intimidated and controlled their victims by threatening to beat them and kill their loved ones in Guatemala if they tried to escape. Some defendants also used witch doctors to threaten the girls that a curse would be placed on them and their families if they tried to escape. At least two of the defendants further restrained the victims by locking them in at night and blocking windows and doors. The defendants also used manipulation of debts, verbal abuse and psychological manipulation to reinforce their control over the victims. The scheme included strict controls over the victims' work schedules and ominous comments about consequences that befell the families of other victims who attempted to escape.

The defendants collected the profits generated by the acts of prostitution the victims were compelled to perform, and maintained control over the proceeds, keeping tens of thousands of dollars while the victims received next to nothing.

"The young girls and women in this case were victimized and exploited in a horrific way, and these sentences should send a stern message to all sex traffickers that they cannot escape justice for such egregious human rights violations," said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. "Attorneys in the Civil Rights Division will continue to work with U.S. Attorney's Offices across the nation to stamp out this vicious and intolerable crime, and to seek significant prison sentences for anyone engaging in these despicable acts."

"In this disturbing case, the defendants lured young, uneducated and impoverished women and girls to the United States, where they were forced to work as prostitutes in terrifying conditions," said U.S. Attorney Thomas P. O'Brien for the Central District of California. "There were at least 10 victims who were forced into becoming prostitutes under a variety of threats, as well as actual physical attacks that included rapes."

"These sentences are a stern reminder about the consequences facing those involved in the unconscionable practice of human trafficking," said Robert Schoch, special agent in charge for the U.S. Immigration and Customs Enforcement (ICE) Office of Investigations in Los Angeles. "While we can't erase the suffering these young women experienced, by aggressively investigating and prosecuting these cases, ICE and the other members of the Los Angeles Human Trafficking Task Force are ensuring that those involved in schemes like this pay a significant price for the pain they cause."

Four additional defendants have pleaded guilty for their role in the scheme. Flor Morales Sanchez was sentenced in May to two years in prison; Pablo Bonifacio was sentenced last November to 33 months in prison; Albertina Vasquez Valenzeula, also known as Cristina, was sentenced in February to 33 months in prison. The final defendant, Luis Vicente Vasquez, is scheduled to be sentenced on Thursday.

Source: US Dept. of Justice

The Department of Justice's Office of Justice Programs (OJP) today announced more than $24 million in awards to enforce state and local underage drinking laws nationwide. The awards are made through the Enforcing Underage Drinking Laws (EUDL) program, which supports law enforcement, public education, and coalition building activities to address underage access to and consumption of alcohol.

"We need to aggressively get the message out to our youth about the dangers of underage drinking," said Laurie O. Robinson, Acting Assistant Attorney General for the Office of Justice Programs. "We are committed to assisting state and local authorities in their efforts to enforce underage drinking laws that protect our youth."

The EUDL program, administered by OJP's Office of Juvenile Justice and Delinquency Prevention (OJJDP), is the only federal initiative directed exclusively toward preventing underage drinking. The program is an annual initiative consisting of block grants and discretionary awards.

Each state, territory, and the District of Columbia received $360,000 in the form of block grants. The awards support a wide range of activities, including a strong emphasis on compliance checks of retail alcohol outlets to reduce sales to minors, crackdowns on false identification, and programs to deter older youth or adults from providing alcohol to minors. OJJDP also awarded discretionary grants totaling $1.9 million to Missouri and Wyoming to prevent alcohol access and consumption by underage service personnel in the U.S. Air Force and $2 million to the Pacific Institute for Research and Evaluation to provide training, technical assistance, and information sharing to EUDL grantees and local agencies focusing on enforcement strategies.

OJJDP is hosting the 11th annual National EUDL Leadership conference, "Beyond Boundaries: Timely Trends and Technology," in Dallas, Texas, today and Friday. More than 1,300 law enforcement personnel, state EUDL coordinators, judges, public and military officials, community members and youth are attending the conference to be informed of current trends in underage drinking prevention and enforcement. Attendees will also expand their knowledge on cutting-edge technology, evaluation, and tools to enhance Federal, state and local efforts to combat underage drinking.

The Office of Justice Programs, headed by Acting Assistant Attorney General

Laurie O. Robinson, provides federal leadership in developing the nation's capacity to prevent and control crime, administer justice, and assist victims. OJP has five component bureaus: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; and the Office for Victims of Crime. Additionally, OJP has two program offices: the Community Capacity Development Office, which incorporates the Weed and Seed strategy, and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking (SMART). More information can be found at http://www.ojp.gov.

SOURCE Office of Justice Programs - US Department of Justice

Diego Montoya Sanchez, 48, one of the leaders of the Norte Valle Colombian drug cartel and a former FBI Top Ten Fugitive, pleaded guilty today in Miami to drug trafficking, murder and racketeering charges, the Justice Department announced.

The pleas were announced by Acting U. S. Attorney Jeffrey H. Sloman for the Southern District of Florida, Acting U.S. Attorney Lev L. Dassin for the Southern District of New York, Assistant Attorney General Lanny A. Breuer of the Criminal Division, FBI Executive Assistant Director Thomas J. Harrington and Acting Administrator Michele M. Leonhart of the U.S. Drug Enforcement Administration.

Montoya Sanchez appeared before U.S. District Judge Cecilia M. Altonaga in Miami, where he pleaded guilty in two pending federal cases. In the first case, which was indicted in the Southern District of Florida by the U.S. Attorney's Office, Montoya pleaded guilty to one count of conspiracy to import more than five kilograms of cocaine into the United States and one count of obstruction of justice by murder.

In the second case, which was indicted in the District of Columbia jointly by the U.S. Attorney's Office for the Southern District of New York (SDNY) and the Criminal Division's Narcotic and Dangerous Drug Section (NDDS), Montoya Sanchez pleaded guilty to one count of conspiracy to engage in a pattern of racketeering activity. The SDNY/NDDS indictment was transferred to the Southern District of Florida for the guilty plea.

Following the decline of the Cali Cartel in the mid-1990s, the Norte Valle Cartel emerged to become Colombia's most prolific cocaine trafficking cartel. Based upon FBI estimates, at its peak the Norte Valle Cartel was responsible for 60 percent of the cocaine exported from Colombia to the United States. According to the SDNY/NDDS indictment, between 1990 and 2004, the Norte Valle Cartel exported more than 1.2 million pounds, or 500 metric tons, of cocaine worth more than $10 billion from Colombia to the United States.

According to the statement of facts submitted in conjunction with today's hearing, Montoya Sanchez was a high-level Colombian drug trafficker for more than two decades. In the mid-1980s, Montoya Sanchez ran cocaine laboratories that served many significant traffickers. In the late 1980s, Montoya Sanchez expanded his organization's operations into smuggling plane loads of cocaine from Colombia to Mexico. According to the statement of facts, by the early 1990s, Montoya Sanchez had switched to maritime smuggling. During the course of the next 15 years, Montoya Sanchez's organization routinely smuggled cocaine loads between 1,000 and 6,000 kilos at a time using go-fast boats and fishing boats, among other methods.

By the late 1990s, Montoya Sanchez and Wilber Varela emerged to become the Norte Valle Cartel's two leading kingpins. Mounting tensions between the Montoya and Varela organizations led to a two-year war between the organizations in which each targeted the other's members for murder. The Montoya-Varela war, which lasted from fall 2003 until fall 2005, resulted in hundreds of deaths, including those of innocent civilians.

At today's hearing, Montoya Sanchez admitted that his organization's practices included using violence and murder against people his organization feared were cooperating with law enforcement. Montoya Sanchez specifically admitted to the August 2003 murder of a one-time organization member who was believed to have been cooperating with authorities.

In May 2004, the FBI added Montoya Sanchez to its list of ten most wanted fugitives. On Sept. 10, 2007, Colombian authorities mounted an operation on a believed Montoya hide-out at a ranch in a rural area outside of Zarzal, Valle del Cauca, Colombia, and captured Montoya Sanchez hiding in a creek-bed approximately 700 yards from the ranch. Montoya Sanchez was extradited from Colombia to Miami on Dec. 12, 2008.

Jeffrey H. Sloman, Acting U.S. Attorney for the Southern District of Florida, stated, "From the prosecution and conviction of the leaders of the Cali Cartel, to the conviction of Ze'ev Rosenstein and an Israel-based Ecstasy network, to today's dismantling of the Norte Valle Cartel, the Southern District of Florida has had a long and successful history in the war on drugs. We will continue to focus our energy, and the expertise of our prosecutors, to help our law enforcement partners stem the tide of drugs flooding our streets and poisoning our society."

"Diego Montoya Sanchez was the leader of a dangerous, violent drug organization," said Thomas J. Harrington, Executive Assistant Director of the FBI. "Outstanding cooperation between Colombia and the United States was key to his capture, the capture of others, and the effective dismantling of the Norte Valle Cartel. The FBI and its law enforcement partners, both here and overseas, will continue to work together to eliminate other international organized crime threats."

"The prosecution of Montoya Sanchez is a milestone in the efforts to dismantle the Norte Valle Cartel, one of the world's most powerful and dangerous drug-trafficking cartels," said Acting U.S. Attorney Lev L. Dassin for the Southern District of New York. "Montoya Sanchez's arrest and extradition marked the end of his long campaign of violence and corruption. We are grateful to our partners at the DEA and in the Colombian government for their tireless work in this investigation."

"Montoya Sanchez's path to the top of the Norte Valle Cartel was marked by decades of extreme violence. That path has now ended in a prison cell, where the man who personally helped direct multi-ton shipments of addictive and destructive narcotics into American cities and towns will be held for his crimes," said Assistant Attorney General Lanny A. Breuer of the Criminal Division. "This conviction is a major victory in the joint effort by Colombia and the United States to disrupt and dismantle these drug trafficking organizations, made possible through extensive cooperation with our partners in the Southern District of Florida, the Southern District of New York, the DEA and the FBI."

"This notorious leader of the extremely violent Norte Valle Cartel is where he belongs: behind bars for murder, drug trafficking and racketeering," said Acting DEA Administrator Michele M. Leonhart. "Due to the skilled and brave work by the men and women of DEA and the Colombian National Police, justice has been served for the many victims of his cartel's extreme violence and the tons of cocaine that ended up on American streets. Now he is in prison, no longer able to use his power to destroy others or benefit from his ill-gotten gains."

Montoya Sanchez is the fourth member of his family to be convicted as part of the case out of the Southern District of Florida. In January 2009, Montoya Sanchez's brother, Eugenio Montoya Sanchez, pleaded guilty to one count of conspiracy to import more than five kilograms of cocaine into the United States and one count of obstruction of justice by murder and was subsequently sentenced to 30 years in prison. In November 2005, Montoya Sanchez's brother, Juan Carlos Montoya Sanchez, and his cousin, Carlos Felipe Toro Sanchez, both pleaded guilty to one count of conspiracy to import more than five kilograms of cocaine into the United States. They were sentenced to terms of 262 and 235 months in prison, respectively.

According to in-court statements during the hearing, Diego Montoya Sanchez agreed to serve a 45-year prison term for the crimes outlined in the court documents. Sentencing has been scheduled for Oct. 21, 2009, at 8:30 a.m. before Judge Altonaga.

The Southern District of Florida indictment is being prosecuted by the U.S. Attorney's Office and was investigated by the FBI. The SDNY/NDDS indictment was the result of a multi-district investigation and is being prosecuted jointly by SDNY and NDDS, and was investigated by the DEA. The Criminal Division's Office of International Affairs and NDDS Judicial Attaches in Bogota, Colombia provided significant assistance in both cases. U.S. law enforcement received invaluable assistance in its prosecution of Diego Montoya Sanchez from the Government of Colombia, the Colombian National Police and the Colombian Army.

Source: U.S. Dept. of Justice

The U.S. Department of Labor has obtained a consent judgment and order requiring the former president of Chicago-based AA Capital Partners Inc. to restore $50 million in losses to five Michigan pension funds as restitution for misuse of the plans' assets to benefit the investment firm and himself. The judgment also bars defendant John Orecchio from serving in a fiduciary or service provider capacity to any employee benefit plan governed by the Employee Retirement Income Security Act (ERISA).

"Fiduciaries have a legal obligation to ensure plan assets are used only to pay benefits and reasonable expenses of a plan. Those who violate that trust will be held accountable for their actions," said Secretary of Labor Hilda L. Solis.

Although Orecchio has submitted proof of current inability to make restitution, the consent judgment requires him to submit annual financial statements to the Labor Department and to pay off the judgment as funds are received by him.

The Labor Department filed a lawsuit on April 10, 2008 against AA Capital Partners, its co-owner and president Orecchio, chief financial officer Mary Elizabeth Stevens, and affiliate AA Capital Liquidity Management, LLC for allegedly misusing plan assets and charging the plans excessive fees on investments. In July 2008, the department filed an amended complaint adding an additional count which alleged that plan assets were imprudently invested in a limited partnership created to invest in Xyience Inc., a Nevada corporation which manufactures and sells food, vitamins and beverages, even though a prudent investigation had not been conducted with respect to this investment strategy.

The pension plans that suffered losses as a result of Orecchio's actions covered more than 60,000 participants of the Carpenters Pension Trust Fund of Detroit and Vicinity, Operating Engineers Local No. 324 Pension Fund, Michigan Regional Council of Carpenters Annuity Fund, Millwrights' Local No. 1102 Supplemental Pension Fund, and Michigan Teamsters Joint Council #43 Pension Fund. As of April 30, 2006, the pension plans had total assets of approximately $3.1 billion.

At various times from 2002 to 2006, the defendants allegedly improperly used $25.9 million of the plans' assets to pay for, among other things, the operating expenses of the firm, renovations to a horse farm, and a strip club owned by Orecchio. In addition, they caused the plans to pay unauthorized fees to AA Capital.

AA Capital is a registered investment advisory firm to employee benefit plans, including ERISA-covered benefit plans. The firm created AA Capital Liquidity Management as the general partner for a fund that invested in real estate loans and entities that developed real property. In 2006, AA Capital was placed in the hands of a court-appointed receiver.

The Chicago Regional Office of the Labor Department's Employee Benefits Security Administration (EBSA) investigated this case. The suit was filed in federal district court in Chicago. Employers and workers can contact the Chicago office at 312-353-0900 or EBSA's toll-free number, 866-444-3272, for help with problems relating to private-sector health and pension plans.

Source: U.S. Department of Labor

Alain V. Bonavida is pleased to announce that his client, Joseph Fahs, has sought and received justice. Joseph Fahs was the first named defendant in a suit by his former employer, Georges Marciano, filed on August 13, 2007. Georges Marciano sued Mr. Fahs and four other employees alleging, among other things, fraud and conspiracy to deprive Mr. Marciano of over $400 million of money, art, wine, and other assets. The Court found that none of these employees committed the acts alleged by Mr. Marciano, dismissing Mr. Marciano's complaint against these individuals.

This firm is proud to have not only defended Mr. Fahs against Mr. Marciano's baseless lawsuit, but also to have represented Mr. Fahs in his suit against Mr. Marciano and Mr. Marciano's company, Beverly Wilshire Properties, Inc., for defamation and intentional infliction of emotional distress.

A liability trial was held in Los Angeles Superior Court on May 15 and May 18, 2009. Judge Elizabeth Allen White found that Marciano was liable for defamation and intentional infliction of emotional distress against each cross-complainant, and that he had committed those acts with the malice, oppression and/or fraud necessary to justify an award of punitive damages. Following the liability prove-up, Judge White set a jury trial for damages for July 20, 2009. After hearing hours of live testimony and reviewing dozens of exhibits, the jury found Marciano liable to each of the five cross-complainants for over $69 million in compensatory damages and $5 million in punitive damages, a total of over $74 million each. The combined value of the verdict is over $370 million.

Attorney Alain V. Bonavida made the opening statement for Joseph and was integral, along with the rest of the legal team, to the conduct and ultimate success of the trial. Bonavida made the closing argument for compensatory damages for Joseph Fahs, explaining to the jury that they now have the power to set things right - to compensate Joseph and the other cross-complainants for the damages inflicted upon them by the unremorseful Mr. Marciano.

During the trial, Mr. Marciano had an average of eight note takers and others occupying two rows of chairs in the courtroom. Mr. Marciano initially refused to appear at the trial as evidenced by his attorneys' refusal to accept a subpoena on his behalf. Marciano made a surprise appearance and voluntarily took the stand where he declared to the jury that he was on a "crusade" and would not stop until he had "justice." Asked by Mr. Bonavida if he remembered the every increasing amounts of alleged theft he suffered at the hands of Joseph and the others, he stated that if these amounts were in papers he submitted to the Court, then they were true.

Joseph Fahs' attorney, Alain V. Bonavida, explains that "when Joseph came to me for representation, I saw the fear in his face and heart and saw this as an opportunity to help someone with a kind soul. I understood the battle my client and I were in for, but I welcomed the challenge. Nearly two years later, justice was served when the jury found Mr. Marciano liable to each of five cross-complainants for over $69 million in compensatory damages and $5 million in punitive damages for a total of over $74 million for each plaintiff or a total of over $370 million. This verdict should serve as a warning to those that believe having vast resources entitles one to leverage those resources to the detriment of the innocent. Truth and justice does prevail, even against incredible odds - you just have to fight hard for it and never give up. I never gave up."

"As one of, if not the, largest defamation verdicts handed down in the country, I am proud to have been the first attorney on the case and of the work I put into defending my client and pursuing my client's rights against Mr. Marciano. During my third year of law school, I was a student attorney representing those individuals who could not afford private counsel. I won, along with my co-counsel and friend, Jonathan Blank, a trial awarding full legal and physical custody of a small child to her mother as well as child support. I was hooked on fighting for the underdog from that point on," Bonavida said.

Law Offices of Alain V. Bonavida enjoyed working the Marciano case with the talented attorneys representing the other ex-employees of Mr. Marciano/Beverly Wilshire Properties, Inc. Steven Chapnick was represented by Michael Partos and Reeve J. Segal of Cozen O'Connor. Elizabeth Tagle was represented Cheryl Deptowicz-Diaz of the Diaz Law Firm. Miriam Choi and Camille Abat were represented by R. Rex Parris and Alexander R. Wheeler of the R. Rex Parris Law Firm and David Wheeler and Jennifer L. DeLoach of Wheeler and Sheehan.

SOURCE Law Offices of Alain V. Bonavida

Thirty-two people have been indicted for schemes to submit more than $16 million in false Medicare claims in the continuing operation of the Medicare Fraud Strike Force in Houston, Deputy Attorney General David W. Ogden and Deputy Secretary Bill Corr of the Department of Health and Human Services (HHS) announced today. The Strike Force in Houston is the fourth phase of a targeted criminal, civil and administrative effort against individuals and health care companies that fraudulently bill the Medicare program.

While the indictments were returned by a grand jury in Houston, individuals were arrested today in Houston, New York, Boston and Louisiana. In addition, Strike Force agents executed 12 search warrants at health care businesses and homes across the Houston area.

The joint DOJ-HHS Medicare Fraud Strike Force is a multi-agency team of federal, state and local investigators designed to combat Medicare fraud through the use of Medicare data analysis techniques and an increased focus on community policing. The fourth phase was announced in May 2009, with agents from FBI, HHS Office of the Inspector General (HHS-OIG), the Texas Attorney General's Medicaid Fraud Control Unit (MFCU), the Drug Enforcement Administration (DEA), Office of Personnel Management, Office of the Inspector General (OPM-OIG) and the Office of the Inspector General at the Railroad Retirement Board (RRB-OIG).

"Our Medicare Strike Force is striking back against health care fraud in all its forms and wherever it occurs. We will stop fraud as its happening, using real-time data analysis of Medicare billing records," said Deputy Attorney General David W. Ogden. "Those who commit health care fraud will not be allowed to steal money from American taxpayers. Anyone operating or considering operating a health care fraud scheme around the country should take notice that they will be held accountable."

"When criminals rip off Medicare beneficiaries, we all pay the price. These false Medicare schemes and scams are costing the taxpayers millions of dollars, harming Medicare beneficiaries and driving up the cost of health care, but thanks to this new innovative partnership and the hard work of our staff on the ground, we are starting to fight back against fraud in a big way. The Administration's HEAT initiative and our Strike Forces are making a big difference in a very short amount of time, returning millions back to the Medicare Trust in just a few months," said Bill Corr, Deputy Secretary of Health and Human Services and the top HHS official on the HEAT Team. "We are also working together across the federal government on important new innovations in the way we do business on the front end, to try and prevent crime like this from happening in the first place."

The Strike Force operations in Houston are another important step 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 joint efforts to reduce and prevent Medicare and Medicaid fraud through enhanced cooperation. The HEAT taskforce, co-chaired by Deputy Attorney Ogden and Deputy Secretary Corr, is made up of top-level law enforcement agents, prosecutors and staff from both Departments and their operating divisions. In the May 2009 announcement, Attorney General Eric Holder and Secretary Kathleen Sebelius announced the expansion of the Strike Force into Detroit and Houston to build upon existing partnerships between the agencies in a heightened effort to reduce fraud and recover taxpayer dollars.

Charges were unsealed today against 32 individuals who are accused of various Medicare fraud offenses, including conspiracy to defraud the Medicare program, and criminal false claims. The Strike Force operations in Houston have identified the primary fraud schemes as those related to false billing for "arthritis kits," power wheelchairs and enteral feeding supplies.

According to the indictments, the defendants charged today participated in schemes to submit claims to Medicare for products that were in fact medically unnecessary and oftentimes, never provided. In some cases, indictments allege that beneficiaries were deceased at the time they allegedly received the items. Collectively, the physicians, company owners and executives charged in the indictments are accused of conspiring to submit more than $16 million in false claims to the Medicare program.

"Americans deserve quality healthcare and have the right to expect that money expended on Medicare is not wasted," said U.S. Attorney Tim Johnson. "We will prosecute anyone who fraudulently obtains Medicare benefits at the expense of the truly needy."

"We will protect the Medicare program and its beneficiaries by stopping those who falsely bill for power wheelchairs, orthotic devices and other supplies that are not needed," said Daniel R. Levinson, Inspector General of the Department of Health & Human Services. "Today's arrests demonstrate the significant impact of the new HEAT strike force on combating fraud and abuse in the Houston area."

"We will continue to work together to combat those who corrupt the system and wish to line their pockets with taxpayer dollars," said Special Agent in Charge Richard C. Powers, FBI Houston Field Office. "Healthcare fraud strikes at the heart of our health care system and our economy."

Texas Attorney General Greg Abbott added: "Today's arrests reflect a concerted effort to crack down on those who defraud Texas taxpayers. We will continue working with our federal partners to uncover waste, fraud, and abuse in the Medicare and Medicaid systems."

Since the inception of Strike Force operations in March 2007 with phase one in South Florida, phase two in Los Angeles in May 2008, and phase three in Detroit in March 2009, the Strike Force has obtained indictments of more than 293 individuals and organizations that collectively have billed the Medicare program for more than $674 million. In addition, HHS's Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

Each of the three Houston Strike Force teams is led by a federal prosecutor from the U.S. Attorney's Office in Houston or the Criminal Division's Fraud Section. Each team has an agent from the FBI, HHS-OIG and the Texas Attorney General's MFCU. DEA, OPM-OIG and RRB-OIG also have agents on the teams.

The cases are being prosecuted by attorneys from the U.S. Attorney's Office, including Assistant U.S. Attorney Jennifer Lowery and Special Assistant U.S. Attorney Justin Blan, on detail from HHS-OIG, as well as from the Criminal Division's Fraud Section, including Assistant Chief John S. (Jay) Darden and Trial Attorneys Charles Reed, Katherine Houston, Anthony Burba and John Cunningham.

An indictment is merely an allegation, and defendants are presumed innocent until and unless proven guilty.

Source: U.S. Dept. of Justice

The following remarks were issued today by Attorney General Eric Holder:

Good morning and thank you for inviting me to join you today. It is a pleasure to be here among friends and colleagues, many of whom I've had the distinct pleasure of working with over the last 30 years during my time in the Department. There are too many familiar faces in the room to begin naming names, but as I have said many times in the last six months, it is great to be back.

These Leadership Conferences always present a great opportunity for us to learn from one another and for the Department to recognize your many significant accomplishments. This year's conference is even more special, as 2009 marks the 25th year of the Asset Forfeiture Program. I am very pleased to join you in this Silver Anniversary celebration, and I share your pride in the Asset Forfeiture Program's quarter-century of success.

I am also proud to be here today to honor the OCDETF Program, which is now in its 27th year. The OCDETF strategy recognizes that the most effective way to fight sophisticated criminal organizations is by leveraging the strengths, resources, and expertise of federal, state and local investigative and prosecutorial agencies. The OCDETF Program does this through the formation of prosecutor-led, multi-agency task forces that successfully target drug traffickers through cutting edge, intelligence-based analysis and investigative work.

Working together, the OCDETF and Asset Forfeiture Programs have a proven track record of destroying drug trafficking organizations by arresting and prosecuting their leadership and by seizing their financial infrastructure. I am delighted to be here today with the leaders of these great programs.

I'd like to begin by talking about OCDETF, which truly is the strategic centerpiece of the Department's counter-narcotics effort. When I served as United States Attorney, I was fortunate to lead the OCDETF effort here in Washington, DC, and experienced first-hand the field-level effectiveness of the Program. Later, as Deputy Attorney General, I saw just how powerful the OCDETF model could be on a nationwide basis. Now, as Attorney General, I am proud to support your continued success. Through your constant innovation and steadfast commitment to cooperation with our state and local partners, you have enhanced immeasurably our nation's counter-narcotics capabilities.

Two examples of OCDETF's innovative and cooperative approach demonstrate the effectiveness of the OCDETF strategy: (1) the establishment of the OCDETF Fusion Center; and (2) the creation of permanent, co-located OCDETF Strike Forces.

The OCDETF Fusion Center was established to address a pressing need for reliable, in-depth intelligence -- from both human and electronic sources -- to target and attack sophisticated international drug trafficking and money laundering organizations. Building on the OCDETF philosophy of cooperation and information-sharing, the Fusion Center brings together into a common database the unfiltered investigative information of each OCDETF member agency. Known as "Compass," this database allows analysts to connect investigative information from multiple agencies and to provide real-time analysis to agents and prosecutors in the field. The Fusion Center works in concert with the DEA-led Multi-Agency Special Operations Division to provide the most complete intelligence picture of criminal organizations currently available to U.S. law enforcement.

In recognition of the Fusion Center's effectiveness and the value of the Compass database, the International Organized Crime Intelligence and Operations Center -- or "IOC-2," as it is known -- recently entered into a partnership with the OCDETF Fusion Center. The IOC-2 will add important new data sources to the Compass database as well as new analysts into the OCDETF Fusion Center. Through this partnership, we will broaden our capability to attack organized crime in all its forms.

A second illustration of OCDETF's success is the creation of permanent, co-located OCDETF Strike Forces in Boston, New York, Atlanta, Tampa, San Juan, Houston, Phoenix, San Diego -- and soon in El Paso. Because they are both permanent and co-located, these strike forces foster close working relationships across agencies and facilitate multiple, wide-reaching, and highly effective multi-agency investigations. Moreover, these Strike Forces have taken innovative steps to leverage non-OCDETF resources to their great advantage. For example, working with the Asset Forfeiture Fund, OCDETF and the National Drug Intelligence Center have begun to place Document and Media Exploitation Teams in the Atlanta and Houston Strike Forces. These DOMEX teams allow Strike Force analysts and agents to capture and exploit evidence in complex, fast-paced investigations, and to develop trial exhibits for prosecutors quickly and effectively. We look forward to adding DOMEX teams to other co-located strike forces in the near future, beginning with those along the Southwest Border.

Collaborative and innovative efforts such as the OCDETF Fusion Center and the OCDETF Strike Forces are critically important if we are to succeed in our efforts to combat international drug traffickers and money launderers. The criminal organizations that OCDETF targets are as sophisticated as they are ruthless. Indeed, some of these groups have even aligned themselves with terrorist organizations. We have seen that Mexican drug cartels in particular, pose both a national security threat to Mexico and an organized crime threat to the United States. The cartels send seemingly endless supplies of cocaine, heroin, methamphetamine, marijuana and other illicit drugs across our borders and onto our streets. They operate seamlessly across local, state, and national boundaries. To combat this threat, we must also be seamless in our operations.

I know that all of you are up to the challenge. Since the inception of the Consolidated Priority Organization Target (or "CPOT") List in 2002, your OCDETF investigations have dismantled 39 CPOT organizations and have disrupted 20 more. Further, you have dismantled or disrupted more than 1,160 CPOT-linked organizations. The success of your operations is impressive, but not surprising. We can expect to achieve these kinds of results when we work together in innovative ways.

Together with OCDETF, the Asset Forfeiture Program has made, and continues to make, a critical difference in the fight against crime. Through your work, the Asset Forfeiture Program provides vitally important funding for law enforcement as well as resources that can be invested in community-changing programs such as "Weed and Seed." And of course, by seizing criminals' assets, you reduce the incentive to commit crime by taking money out of the hands of dangerous drug dealers and terrorists -- money that now works for law enforcement.

As with the OCDETF Program, the success of the Asset Forfeiture Program is a direct result of your hard work and your unfailing commitment to cooperation and collaboration at all levels and across all organizational lines. As Deputy Attorney General, it was my privilege to testify before Congress in support of asset forfeiture legislation. In that testimony, I emphasized the critical role that asset forfeiture plays not only in the fight against illegal drugs, but in the broader fight against other types of crime. Almost ten years to the day since that testimony -- and, appropriately, on the 25th anniversary of the Asset Forfeiture Program -- I am proud to say that the Asset Forfeiture Program remains a critical part of the Department's efforts to reduce and deter criminal activity.

Since 1984, more than $13 billion in net federal forfeiture proceeds have been deposited into the Justice Assets Forfeiture Fund. During this same period, more than $4.5 billion has been equitably shared with more than 8,000 state and local law enforcement agencies nationwide, thereby supplementing their constrained resources without further taxing the public. Once left with no real opportunity to recover their losses, crime victims are now recouping greater sums than ever before. Approximately $500 million in payments have been paid to more 39,000 victims in fiscal year 2008 alone.

Yet, the impact of forfeiture is greater than just money. When we look back on the last 25 years of the program, we see a forfeiture regime that has been transformed from a collection of centuries-old laws designed to fight pirates, enforce customs laws and fight illegal contraband, into an array of modern law enforcement tools designed to combat 21st century criminals both at home and abroad. We now have the ability to deprive global criminals of their ill-gotten gains, to seize the instrumentalities of their trade, and to use the power of asset forfeiture to destroy their illegal enterprises.

Operation Honor Student, a case that will be honored here later tonight, illustrates the power of asset forfeiture and its devastating effect on organized criminal activity. In that case, a task force led by the Rhode Island U.S. Attorney's Office, the Asset Forfeiture and Money Laundering Section of the Criminal Division, and the Food and Drug Administration's Office of Criminal Investigations obtained the forfeiture of $2.7 million from the accounts of GeneScience, one of the largest biopharmaceutical companies in China that had been involved in the illegal distribution of Human Growth Hormone into the United States. To accomplish this forfeiture, the task force employed a new statutory vehicle -- 18 U.S.C. section 981(k) -- which permitted the Government to seize the funds, physically located in China, from the corresponding accounts of Chinese banks in New York. This was the first use of section 981(k), enacted as part of the USA Patriot Act, against a Chinese entity, and its success has helped pave the way for subsequent investigations using this groundbreaking authority.

But not to minimize these impressive legal results, the true impact of Operation Honor Student lies in its practical effect on the illegal hGH market in the United States. Task force agents estimate that at the time of the investigation, GeneScience manufactured approximately 90% of the hGH being illegally sold and distributed in the United States. As a direct result of this seizure, GeneScience has stopped all shipments to the United States. So, through the use of a section 981(k) seizure, we were able to eliminate a supplier that represented 90% of an illegal drug market. Ninety percent.

Asset forfeiture plays a critical role not only in drug cases, but across the law enforcement spectrum -- from national security investigations, to securities fraud cases, to healthcare scams. And, of course, we cannot forget the most important -- and sometimes least heralded -- purposes of our Asset Forfeiture Program -- which is to make a meaningful difference in the lives crime victims by recovering stolen funds and property and returning them to their rightful owners.

When we look at the successes of both the Asset Forfeiture Program and the OCDETF Program, I cannot help but think about the possibilities, and challenges, for the next 25 years of these vitally important initiatives. While we have made great strides, international drug traffickers and money launderers continue to threaten our country. Criminal enterprises and terrorist networks continue to misuse our financial system for nefarious purposes. We can and we must do more. I am confident that under the leadership of those assembled here today, we will succeed.

The analysts, agents, and prosecutors of the OCDETF and Asset Forfeiture Programs are among the most talented and dedicated professionals in all of law enforcement. You protect this country day in and day out from the scourge of drugs and violence, and you do it with professionalism, creativity, and passion. I am proud to lead the Department of Justice, and am proud of each of you. Thank you for all that you do. Keep up the great work.

Source: U.S. Dept. of Justice

Exactly 23 years after he was subjected to a crude form of waterboarding, suffocation, and a mock execution during a sadistic three-day interrogation by subordinates of indicted former Chicago Police Commander Jon Burge, Michael Tillman will file a petition in Cook County Circuit Court Tuesday seeking a new trial in connection with his wrongful murder conviction.

Following his arrest on July 21, 1986, Tillman was ruthlessly abused by the infamous "Midnight Crew" at Area 2 Police Headquarters, a cadre of rogue Chicago cops operating under Burge's right-hand man, Sergeant John Byrne. Based largely on a bogus confession extracted during that unlawful interrogation, Tillman was wrongfully convicted of murdering Betty Howard and was sentenced to prison, where he remains today.

On Tuesday, attorneys from the Peoples Law Office and the Roderick MacArthur Justice Center at Northwestern University will file a post-conviction petition asking the court to vacate Tillman's conviction and order new trial. The move comes in the wake of massive evidence that Tillman was a casualty of a systematic ring of torture that Burge and his underlings inflicted on African-American suspects from the early 1970s through the 1990s.

"Of all the torture cases in the system, the ones like Tillman's are particularly galling," said Locke E. Bowman, Legal Director of the MacArthur Center. "Tillman has been in prison for twenty three years for one reason only: he was tortured into confessing to a crime he didn't commit."

Since Tillman unsuccessfully appealed his conviction in 1999, Burge, Byrne and detectives under their command have been implicated by multiple law enforcement officials in a pattern of torture. In 2006, a Cook County Special Prosecutor issued a report concluding that the torture occurred, and last year U.S. Attorney Patrick Fitzgerald indicted Burge. Meanwhile, Burge, Byrne and their associates have invoked their Fifth Amendment right against self-incrimination under questioning about abuse charges.

Stymied by the decades-long cover-up of the torture ring and unable to afford a lawyer, Tillman was forced to let the statutory deadline for his post-conviction petition expire. But in filing the petition on his behalf Tuesday, Tillman's attorneys called on Attorney General Lisa Madigan to allow the case to be considered on the merits, rather than seeking to dismiss it on a technicality.

"Prosecutors are required to hold the interests of justice higher than the pursuit of convictions," said G. Flint Taylor of the People's Law Office. "Mr. Tillman has set forth a powerful case of torture, innocence, and cover-up in his Petition. This is therefore a most compelling case for Attorney General Madigan to honor her prosecutorial oath, the interests of justice, and her pledge that she will not rely on tortured evidence. To do so she, or whoever succeeds her as the prosecutor in this case, must forego technical defenses and agree that Tillman is entitled to a hearing on his claims of torture and innocence."

SOURCE MacArthur Justice Center