2012 Press Releases
April - June
28 June Laymon and Shore Sentencing
25 June Smith Sparrow Sentencing
14 June Jackson Sentencing
12 June Derek Lewis Sentencing
5 June Wilkerson Indictment
4 June Tango and Cash
3 May Guidry Plea
26 April Johnson Sentencing
26 April Miller Sentencing
GOVERNMENT AUDITOR AND RESTAURANTEUR SENTENCED
IN OPERATION ZENITH
United States Attorney Donald J. Cazayoux, Jr., announced today that Chief U.S. District Judge Brian A. Jackson sentenced the final two defendants in Operation Zenith, a long running investigation into fraud and corruption involving the payment and collection of sales and payroll taxes. The Operation resulted in the convictions of five prominent businessmen, the president of an accounting firm, and a government auditor.
ROSTOM H. LAYMON, age 53, of Baton Rouge, Louisiana, was sentenced to 33 months imprisonment, a term of supervised release following imprisonment of 2 years, restitution to state and local governments in the amount of $140,000, and a fine of $70,000. The sentence stems from LAYMON’s pleas of guilty to two counts of mail fraud and three counts of bribery based on criminal activity involving his restaurants, including Arzi’s Express in the Mall of Louisiana, Cajun Café in the Mall of Louisiana, and Arzi’s Restaurant on Government Street. Because of LAYMON’s cooperation with the government and acceptance of responsibility, his sentence was significantly reduced from what it would have otherwise been.
LAYMON’s criminal activity included (1) defrauding his customers and state and local governments as part of a sales tax scheme in which the sales from his restaurants were fraudulently under-reported by millions of dollars, resulting in $140,000 in losses to state and local governments; (2) paying multiple bribes to individuals he believed to be officials with the East Baton Rouge Parish Auditor’s Office in connection with sales tax audits, including offers of prostitutes and foreign travel; and (3) defrauding the State of Louisiana of payroll tax revenue by fraudulently under-reporting the amount of wages paid and individuals employed by approximately fifty-percent, including the concealment of numerous illegal aliens employed in his restaurants.
JEROME R. SHORE, age 57, of Baton Rouge, Louisiana, was sentenced to two years probation, four months in a half-way house, and restitution to East Baton Rouge Parish in the amount of $60,000. The sentence stems from SHORE’s plea of guilty to bribery. While an auditor with the East Baton Rouge Parish Auditor’s Office, SHORE took a bribe in connection with an audit of certain restaurants owned by Jamal Roman. As a result of the bribe, SHORE assessed Roman $60,000 less than he should have. SHORE faced a significant sentence, but his extensive cooperation with the government and his acceptance of responsibility resulted in a substantial lessening of his sentence.
Today’s sentences are part of Operation Zenith, which uncovered evidence that business owners and the president of an accounting firm had been under-reporting the sales from various businesses by over ten million dollars ($10,000,000) in order to avoid remitting sales tax to the state and local governments. In an attempt to conceal this massive scheme, the business owners and the accountant paid bribes to officials within the East Baton Rouge Parish Auditor’s Office and agreed to bribe an auditor with the Louisiana Department of Revenue. The Operation also uncovered systemic defrauding of the State of Louisiana through the fraudulent underpayment of payroll taxes.
The status of the five other Operation Zenith defendants is as follows:
• Humam S. Al-Alousi: Convicted of mail fraud involving sales tax fraud, bribery involving a federally-funded entity, and making a false statement to the FBI. He was sentenced to 60 months imprisonment, 2 years supervised release, a $100,000 fine, and $220,401 in restitution.
• Jamal M. Roman: Convicted of conspiracy to commit mail fraud and bribery, mail fraud, and bribery involving a federally-funded entity. He was sentenced to 53 months imprisonment, 2 years supervised release, a $20,000 fine, and $726,476 in restitution.
• Khoa Dinh Chau: Convicted of mail fraud involving sales tax fraud and bribery. He was sentenced to 37 months imprisonment, 2 years supervised release, a $30,000 fine, and $98,695 in restitution.
• Mohamed H. Ruman: Convicted of mail fraud involving payroll tax fraud. He was sentenced to 4 months imprisonment, 4 months in a half-way house, 2 years supervised release, and $56,000 in restitution.
• Hassan S. Abousoayd: Convicted of bribery and using an interstate facility in aid of racketeering. He was sentenced to 3 years probation, 8 months home detention, a $20,000 fine, and $134,000 in restitution. He received a substantially reduced sentence based on his extensive cooperation with the government, including participation in covert operations, and acceptance of responsibility.
Operation Zenith is the result of the combined efforts of the United States Attorney’s Office, the Federal Bureau of Investigation, and the Louisiana State Police Criminal Intelligence Unit. The investigation has also been assisted by the East Baton Rouge Parish Auditor’s Office, the U.S. Department of Homeland Security, the Louisiana State University Police Department, the Louisiana Department of Labor, the Louisiana Department of Revenue, the Ascension Parish Sales and Use Tax Authority, the Internal Revenue Service, and the Government of Lebanon.
United States Attorney Donald J. Cazayoux, Jr. stated, “Operation Zenith demonstrates the willingness of this office and our law enforcement partners to commit the resources necessary to root out fraud and corruption wherever found. Fraudsters who seek to undermine the fiscal and moral integrity of our local governments will continue to be dealt with aggressively.”
FBI Acting Special Agent-in-Charge, Todd B. Cox, stated, “Today’s sentencings in this matter reflect the commitment of the FBI and our law enforcement partners to follow fraud and corruption when anyone chooses to disobey the laws and play by their own rules.”
Operation Zenith was prosecuted by Assistant United States Attorneys Corey R. Amundson, who serves as the Senior Deputy Criminal Chief, Alan A. Stevens, and Reginald Jones.
TWO DEFENDANTS IN BATON ROUGE, LOUISIANA SENTENCED TO PRISON FOR HEALTH CARE FRAUD
BATON ROUGE, LA – United States Attorney Donald J. Cazayoux, Jr. announced that EUNICE SPARROW, age 68, and UNIECESCO SMITH, age 30, both of Plaquemine, Louisiana, have been sentenced to prison by Chief U.S. District Court Judge Brian A. Jackson as a result of their roles in a two-year health care fraud scheme.
SMITH was sentenced on June 20, 2012, and ordered to serve a term of imprisonment of 14 months. SPARROW was sentenced this morning to serve a term of imprisonment of 12 months and 1 day. Each was ordered to serve a term of supervised release following her release from imprisonment, and to make restitution to the United States Department of Health & Human Services. SMITH was also ordered to pay a $7,500 fine.
SMITH and SPARROW previously entered guilty pleas, on February 22, 2012, to several counts of health care fraud. In their plea agreements, the defendants admitted that they knowingly aided and abetted a health care fraud scheme perpetrated by their co-defendant, LINDA M. JACKSON. From April of 2007 through April of 2009, JACKSON operated a company in Plaquemine, Louisiana called A&A Durable Medical Supply, and used the company to defraud Medicare by submitting false reimbursement claims to Medicare for items that the company had never provided. In their plea agreements, SPARROW and SMITH admitted that they assisted JACKSON in her scheme by completing and signing false delivery tickets and other fraudulent documents at JACKSON’s direction. A&A kept the fraudulent documents in its patient files in an attempt to substantiate the fraudulent claims JACKSON submitted to Medicare, and JACKSON later provided the false documents to an auditor who requested the patient files in the course of an investigation into A&A’s claims. JACKSON is awaiting sentencing.
U.S. Attorney Donald J. Cazayoux, Jr., stated, “This is another in a long line of prosecutions for health care fraud in our district. We remain committed to protect the integrity of our health care system and we will continue to strictly enforce our federal health care laws. This sentencing should serve as a deterrent for others who attempt to defraud our health care system for their own personal greed.”
“No American citizen should tolerate theft from our federal health care programs,” said Assistant Special Agent-in-Charge William W. Root of the United States Department of Health and Human Services. “Today’s sentencings are a clear signal that greed has no place in the health care service arena. If you steal from Medicare, we will catch you and you will go to jail,” said Root.
The investigation of this matter was conducted by the U.S. Department of Health and Human Services’ Office of Inspector General, the Federal Bureau of Investigation, and the Louisiana Attorney General’s Office. The case was prosecuted by Assistant United States Attorneys Alan Stevens and Chris Dippel. The case was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Middle District of Louisiana and the Criminal Division’s Fraud Section.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Jury Finds Baton Rouge Resident’s Use of False Forms
WASHINGTON – Jack Ray Carr, of Baton Rouge, La., was convicted today after a three-day jury trial of one count of corruptly interfering with the due administration of the Internal Revenue laws, four counts of filing false income tax returns and one count of aiding and assisting in the preparation of a false income tax return, the Justice Department, Internal Revenue Service (IRS) and Treasury Inspector General for Tax Administration (TIGTA) announced.
The evidence at trial established that Carr threatened violence against a federal agent, filed false documents and tax returns with the IRS, and attempted to pay his tax debt with fraudulent bonds, fictitious money orders and a fake check. On three successive personal income tax returns, Carr falsely reported that his and his wife’s income was “$0.00,” despite earning hundreds of thousands of dollars in total during the 2001, 2002 and 2003 tax years. In 2009, on two tax returns, Carr falsely reported more than $100,000 of federal income tax withholdings based on fictitious IRS Forms 1099-OID attached to the tax returns that Carr filed in his own name and in the name of his wife. In doing so, Carr claimed more than $150,000 of fraudulent tax refunds from the U.S. government.
Carr faces a potential maximum sentence of 18 years in federal prison and a fine of up to $1.5 million.
Kathryn Keneally, Assistant Attorney General of the Justice Department’s Tax Division, thanked the special agents of the IRS - Criminal Investigation and TIGTA, who investigated this case. Assistant Attorney General Keneally also thanked Tax Division Trial Attorneys Justin Gelfand, Jason Poole and Gregory Bailey, and former Tax Division Trial Attorney Matthew Mueller, all of whom prosecuted the case at various stages. Finally, Ms. Keneally thanked Donald J. Cazayoux Jr., U.S. Attorney for the Middle District of Louisiana, and his entire office for their assistance.
1099-OID schemes are one of the IRS’s “Dirty Dozen” tax scams for 2012. Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
FORMER BATON ROUGE POLICE OFFICER SENTENCED TO 24 MONTHS IMPRISONMENT IN OPERATION “ILLEGAL MOTION”
BATON ROUGE, LA – United States Attorney Donald J. Cazayoux, Jr. announced the results of another sentence imposed in Operation Illegal Motion, a long running public corruption investigation involving the state and local criminal justice system. U.S. District Judge James J. Brady sentenced LEONARD P. JACKSON, age 48, of Prairieville, Louisiana, to 24 months imprisonment, 3 years supervised release, and a $1,000 fine. JACKSON was sentenced after having pled guilty to multiple racketeering offenses based on his corrupt activity while a police officer with the Baton Rouge City Police Department.
As outlined during the sentencing, JACKSON engaged in various corrupt activities while serving as a police officer, including:
• JACKSON was an active participate in taking and facilitating bribes to cause the dismissal and reduction of criminal and traffic charges in Baton Rouge City Court, including charges of battery involving domestic violence. JACKSON engaged in the scheme with the Senior Assistant City Prosecutor, the Chief Investigator for the Public Defender’s Office, court staff, and many others.
• JACKSON also took bribes to cause the dismissal and reduction of criminal and traffic charges with the unknowing assistance of other city prosecutors who agreed to JACKSON’s recommendations without necessarily knowing their corrupt nature.
• JACKSON took bribes from an undercover FBI agent who he believed was the operator of an illegal gambling operation. JACKSON took such bribes in exchange for using his official position to extort an individual out of a $10,000 illegal gambling debt. When the undercover agent asked if JACKSON would also protect a drug shipment through Baton Rouge, JACKSON responded favorably.
At the sentencing, the Court and the United States emphasized that JACKSON betrayed the trust and the oath he swore to uphold. The Court noted that JACKSON’s early acceptance of responsibility and cooperation with the government were also significant considerations, resulting in a sentence much less than the Court would have otherwise imposed.
Operation Illegal Motion has resulted in ten individuals being convicted of various racketeering charges, including violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), related to their participation in a massive bribery scheme involving the corruption of hundreds of criminal and traffic matters in the state and local courts. Those convicted include a Senior Assistant City Prosecutor, two police officers, the chief public defender investigator, a city court employee, a state court employee, and others.
Operation Illegal Motion is an ongoing investigation conducted by this office and the Federal Bureau of Investigation with the assistance of the Louisiana Office of Inspector General, the Louisiana State Police, the Internal Revenue Service, Criminal Investigative Division, the U.S. Department of Homeland Security, Office of Inspector General and the Louisiana Department of Environmental Quality, Criminal Investigations Division.
Operation Illegal Motion is being prosecuted by Assistant United States Attorneys Corey R. Amundson, who serves as the Senior Deputy Criminal Chief, and M. Patricia Jones, who serves as the Senior Litigation Counsel.
FORMER MAYOR OF PORT ALLEN, LOUISIANA SENTENCED
TO 40 MONTHS IMPRISONMENT
BATON ROUGE, LA - United States Attorney Donald J. Cazayoux, Jr., announced the results of another significant sentence imposed in Operation Blighted Officials. Chief U.S. District Judge Brian A. Jackson sentenced DEREK A. LEWIS, age 52, of Port Allen, Louisiana, to 40 months imprisonment, 2 years supervised release following imprisonment, and forfeiture of $18,990. LEWIS was sentenced after having pled guilty to violating the Racketeer Influenced and Corrupt Organizations Act (RICO) based on his corrupt activity while Mayor of the City of Port Allen, Louisiana.
This matter is part of Operation Blighted Officials, an investigation utilizing undercover operations to determine the extent and scope of public corruption involving former St. Gabriel Mayor George L. Grace, Sr. As part of the operation, individuals working undercover for the FBI posed as businessmen (hereinafter referred to as “the Businessmen”) affiliated with a company involved in the development of a conceptual product known as the “Cifer 5000.” The Cifer 5000 was marketed as an automated waste container cleaning system using specially designed and equipped trucks to clean and sanitize commercial and residential waste containers. Its potential customer pool was represented to be governmental entities, such as municipalities.
During his guilty plea, LEWIS admitted that, during the period from October 2008 through June 2010, he used his position as Mayor to take actions favorable to the Businessmen, including the promotion of the Cifer 5000 in the City and elsewhere, in exchange for cash and other things of value totaling over $15,000. LEWIS admitted that such official actions included (1) writing a false official letter of support which he believed would be used to secure millions of dollars in private investor capital; (2) writing a false official letter of support which he believed would be used to convince other public officials to contract with the Cifer 5000; (3) agreeing to propose a City ordinance favorable to the Cifer 5000 project; (4) writing an official letter of support which he believed would be provided to the U.S. Environmental Protection Agency in connection with a multi-million dollar grant request; (5) providing access to confidential law enforcement information through the Chief of Police; and (6) guaranteeing that the Cifer 5000 would receive a contract with the City.
At today’s sentencing, the Court and the United States recognized the seriousness of the criminal conduct, while also crediting LEWIS for having been the first and only mayor in Operation Blighted Officials to accept responsibility, cooperate with the investigation, and pled guilty. Because of such favorable actions, the Court sentenced LEWIS to a sentence much less than he would otherwise have faced.
The status of the other Operation Blighted Officials defendants is:
Johnny Johnson: In July 2010, the former member of the Port Allen City Council pled guilty to using an interstate facility in aid of racketeering and agreed to cooperate with authorities. Chief Judge Jackson sentenced Johnson to two years probation, with a condition of having to spend 6 months in a half-way house.
Maurice Brown: In February 2011, the former Mayor of White Castle, Louisiana, was convicted by a federal jury following a two week trial of violating RICO, engaging in honest services wire and mail fraud, and use of an interstate facility in aid of racketeering. Chief Judge Jackson sentenced Brown to 120 months in prison.
Thomas A. Nelson, Jr.: In June 2011, the former Mayor of New Roads, Louisiana, was convicted by a federal jury following a two and a half week trial of violating RICO, engaging in honest services wire fraud, using an interstate facility in aid of racketeering, and making false statements to the FBI. Chief Judge Jackson sentenced Nelson to 132 months in prison.
Frederick W. Smith: In October 2011, the Chief of Police for Port Allen, Louisiana, was convicted by a federal jury following a two week trial of 11 counts of violating RICO, engaging in honest services wire and mail fraud, and using an interstate facility in aid of racketeering. Chief Judge Jackson sentenced Smith to 90 months in prison.
George L. Grace, Sr.: In March 2012, the former Mayor of St. Gabriel, Louisiana, was convicted by a federal jury following a six week trial of violating RICO, engaging in honest services wire and mail fraud, bribery, obstruction of justice, making false statements, and use of an interstate facility in aid of racketeering. U.S. District Judge Maurice Hicks detained Grace pending his sentencing scheduled in August 2012.
This ongoing investigation is being conducted by the Federal Bureau of Investigation and the U.S. Attorney’s Office for the Middle District of Louisiana, with assistance from the U.S. Department of Housing and Urban Development, Office of Inspector General, and the U.S. Department of Homeland Security, Office of Inspector General. Operation Blighted Officials is being prosecuted by Assistant United States Attorneys Corey R. Amundson, M. Patricia Jones, and Michael J. Jefferson.
OWNER OF BATON ROUGE TAX PREPARATION SERVICE CONVICTED AFTER TWO WEEK TRIAL
BATON ROUGE, LA – United States Attorney Donald J. Cazayoux, Jr. announced today that after a two-week trial, a Federal Jury on Tuesday, June 05, 2012, convicted RONALD WAYNE WILKERSON, 42, of Baton Rouge, Louisiana, of endeavoring to impede the Internal Revenue Service, assisting the preparation of false tax returns, bank fraud, engaging in monetary transactions with criminally-derived funds, and money laundering.
WILKERSON faces a maximum sentence of 232 years in prison, fines of $9,500,000, and forfeiture of all proceeds of the bank fraud and money laundering transactions.
The convictions are a result of WILKERSON causing the preparation of 635 false tax returns, claiming approximately $1,415,388 in false telephone excise tax refunds, to be submitted to the IRS. Based upon the false claims for telephone excise tax refunds, WILKERSON caused the IRS to issue refunds of $119,450. Upon identifying the fraud through proactive data analysis, the IRS refused to refund the remaining false claims of $1,295,938. As a result of the scheme, WILKERSON collected tax preparation fees of approximately $485,939, which funds he attempted to remove from a business bank account on the date that a search of the business premises was conducted for evidence of the scheme.
WILKERSON also submitted many of the 635 false tax returns to HSBC Bank for the purpose of obtaining refund anticipation loans for taxpayers. The bank approved approximately 250 loans and ultimately lost approximately $500,959 as a result of the false tax returns which were supposed to serve as collateral for the refund anticipation loans.
U.S. Attorney Donald J. Cazayoux, Jr., stated, “We believe justice has been served in this case. The prosecutors and agents presented a very compelling case to the jury over the last two weeks. The results of this trial should serve as a warning to others who prepare false returns that we will find you and hold you accountable.”
IRS Special Agent-in-Charge James C. Lee stated, “IRS-Criminal Investigation is very pleased with the verdict reached in this case. We will continue to aggressively investigate those return preparers in our community who prey upon the low income wage earner and file false tax returns in their names.”
The investigation of WILKERSON was conducted by the Internal Revenue Service Criminal Investigations. The case was prosecuted by Assistant United States Attorneys Rene Salomon and Leetra Harris.
Sentencing is set for September 13, 2012.
BATON ROUGE CONVENIENCE STORE, QUALITY EXPRESS, AND EMPLOYEES INDICTED FOR MONEY LAUDERING
BATON ROUGE, LA – United States Attorney Donald J. Cazayoux, Jr. announced that a Federal Grand Jury returned an indictment on May 17, 2012, charging THANG MINH TRAN, also known as Tommy, HENRY CHINH TRAN, TRANG DANG TRAN, also known as Sabrina, SON NGUYEN, also known as Tattoo, and KATELYN & CLAIRE, INC. and ALEX T., INC., both doing business as Quality Express, with conspiracy to commit money laundering, money laundering, and failure to file Currency Transaction Reports in order to evade reporting requirements. Quality Express is a convenience store that also provided financial services such as check cashing, currency exchanges, and money transfers.
The Indictment alleges that from March 2010 through April 2011, the defendants conspired to launder proceeds of narcotics trafficking and to avoid filing reports of their receipt of cash greater than $10,000. The various defendants are charged with conspiracy to launder monetary instruments, six counts of money laundering, and six counts of failure to file reports of their receipts of cash greater than $10,000. Thang “Tommy” Tran is facing a maximum of 100 years in prison and a $2,500,000 fine; Henry Chinh Tran is facing a maximum of 80 years in prison and a $2,000,000 fine; Trang “Sabrina” Tran is facing a maximum of 40 years in prison and a $1,000,000 fine; and Son “Tattoo” Nguyen is facing a maximum of 40 years in prison and a $1,000,000 fine.
Two Quality Express employees, Son “Tattoo” Nguyen, and Thanh “Money” Nguyen, are charged in a separate indictment with Conspiracy to Distribute and Distribution of MDMA in violation of Title 21, United States Code, Section 841(a)(1). If convicted on these drug counts, they face up to twenty years imprisonment and a $1,000,000 fine.
The Bank Secrecy Act (“BSA”) requires that businesses providing financial services, which are vulnerable to money laundering, take a number of precautions against financial crime. The precautions include filing and reporting certain data about financial transactions indicative of money laundering, including cash transactions over $10,000. Over 15 million BSA reports are filed each year by more than 25,000 U.S. financial institutions and businesses. Such reports are vital weapons in law enforcement’s effort to detect and prevent money laundering and financial crimes.
U.S. Attorney Donald J. Cazayoux, Jr., stated, “By prosecuting cases such as these, we effectively hinder drug dealers from enjoying their illegal profits. As a result, we will continue to attack the laundering of drug money by businesses with every tool available.”
IRS Special Agent-in-Charge, James C. Lee stated, “IRS Criminal Investigation will continue to be aggressive in investigating money laundering activities in the community. Businesses that assist drug dealers in hiding their profits must be stopped.”
The Indictment is the result of a lengthy OCDETF (Organized Crime and Drug Enforcement Task Force) investigation by agents of the Internal Revenue Service-Criminal Investigations and Drug Enforcement Administration. The case is being prosecuted by Assistant United States Attorneys Lane Ewing, Jay Thompson, and Jennifer Kleinpeter.
NOTE: An indictment is a determination by a grand jury that probable cause exists to believe that offenses have been committed by a defendant. The defendant is presumed innocent until and unless proven guilty at trial.
BATON ROUGE, LOUISIANA, MAN PLEADS PLEADS GUILTY TO ODOMETER TAMPERING CHARGES
WASHINGTON – Beau Michael Guidry of Baton Rouge, La., pleaded guilty today in the U.S. District Court for the Middle District of Louisiana to three counts of Odometer Tampering. Sentencing is scheduled for XXXX.
Guidry, owner of Affordable Imports in Denham Springs, La., purchased high-mileage motor vehicles both online, through eBay, as well as from wholesale automobile auctions in Louisiana, Mississippi and Texas. The vehicles’ odometers were then rolled back as much as 147,000 miles. Guidry subsequently resold the vehicles at his lot in Denham Springs or through eBay to unsuspecting purchasers.
Many vehicles were more than 10 years old when Guidry sold them. Because of the age of the cars, Guidry was not required to sign a disclosure certifying as accurate the mileage on the vehicles that were more than 10 years old. However, each time he altered an odometer with intent to change the mileage on the odometer, he violated federal law.
“Just because a car dealer does not have to certify the mileage on cars he sells, that does not give him a license to roll back odometers,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division. “It is equally fraudulent to roll back a so-called ‘exempt’ vehicle as rolling back a non-exempt vehicle. With cars remaining in service longer, people rely on vehicles older than 10 years for basic transportation. These citizens are not fair game for crooked car dealers.”
The National Highway Traffic Safety Administration Office of Odometer Fraud Investigation (NHTSA) investigated this case. The case was prosecuted by Justice Department trial attorney David Sullivan of the Civil Division’s Consumer Protection Branch.
Ways to Help Avoid Being Victimized by Odometer Fraud
• Have a mechanic you trust check out the car. This will cost money, but it can save much more.
• Look for loose screws or scratch marks around the dashboard. This is pertinent primarily to mechanical odometers which can be manipulated with tools.
• Also on mechanical odometers, check to make sure that the digits in the odometer are lined up straight--particularly the 10,000 digit.
• Test drive the car and see if the speedometer sticks.
• Check for service stickers inside the door or under the hood that may give the actual mileage. Odometer tamperers try to find these as well, but sometimes miss one.
• Look in the owner’s manual to see if maintenance was listed, or if pages that might have shown high mileage were removed.
• Ask the dealer whether a computer warranty check has been run on the car.
• Use a commercially available computer search program that checks for mileage alterations. Some car dealers will give you one of these for free if you ask for it. While this is an important step to take, it is not foolproof by any means because not all high mileages are recorded on paperwork that makes its way to these databases.
• Ask to see the title documents and look to see if the mileage reading on the documents has been altered.
• Look to see if the steering wheel was worn smooth. Look for other signs of excessive wear on the arm-rest, the floor mats, the pedals for the brakes and gas, and the area around the ignition. If these items were recently replaced, that could also indicate efforts to hide the car's true use and mileage.
• Don’t assume that mileage is accurate just because the vehicle has an electronic odometer.
Note: The court documents are available at: www.justice.gov/opa/medicare-fraud-docs-2012.html.
MEDICARE FRAUD STRIKE FORCE CHARGES
107 INDIVIDUALS FOR APPROXIMATELY $452 MILLION
IN FALSE BILLING
WASHINGTON – Attorney General Eric Holder and Health and Human Services (HHS) Secretary Kathleen Sebelius announced today that a nationwide takedown by Medicare Fraud Strike Force operations in seven cities has resulted in charges against 107 individuals, including doctors, nurses and other licensed medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $452 million in false billing.
Attorney General Holder and Secretary Sebelius were joined in the announcement by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, FBI Deputy Director Sean Joyce, Deputy Inspector General for Investigations Gary Cantrell of the HHS Office of Inspector General (HHS-OIG) and Dr. Peter Budetti, Deputy Administrator for Program Integrity of the Centers for Medicare and Medicaid Services (CMS).
This coordinated takedown involved the highest amount of false Medicare billings in a single takedown in strike force history.
HHS also suspended or took other administrative action against 52 providers following a data-driven analysis and credible allegations of fraud. The new health care law, the Affordable Care Act, significantly increased HHS’s ability to suspend payments until an investigation is complete.
The joint Department of Justice and 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. More than 500 law enforcement agents from the FBI, HHS-Office of Inspector General (HHS-OIG), multiple Medicaid Fraud Control Units, and other state and local law enforcement agencies participated in the takedown. In addition to making arrests, agents also executed 20 search warrants in connection with ongoing strike force investigations.
“The results we are announcing today are at the heart of an Administration-wide commitment to protecting American taxpayers from health care fraud, which can drive up costs and threaten the strength and integrity of our health care system,” said Attorney General Holder. “We are determined to bring to justice those who violate our laws and defraud the Medicare program for personal gain. As today’s takedown reflects, our ongoing fight against health care fraud has never been more coordinated and effective.”
“Today’s arrests send a strong message to criminals that the consequences of committing Medicare fraud are serious,” said HHS Secretary Sebelius. “In addition to these arrests, we used new authority from the health care law to stop all future payments to 52 health care providers suspected of fraud before they are ever made. Today’s actions are another example of how the Affordable Care Act is helping the Obama Administration fight fraud and strengthen the Medicare program.”
The defendants charged are accused of various health care fraud-related crimes, including conspiracy to commit health care fraud, health care fraud, violations of the anti-kickback statutes and money laundering. The charges are based on a variety of alleged fraud schemes involving various medical treatments and services such as home health care, mental health services, psychotherapy, physical and occupational therapy, durable medical equipment (DME) and ambulance services.
According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare for treatments that were medically unnecessary and oftentimes never provided. In many cases, court documents allege that patient recruiters, Medicare beneficiaries and other co-conspirators were paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could submit fraudulent billing to Medicare for services that were medically unnecessary or never provided. Collectively, the doctors, nurses, licensed medical professionals, health care company owners and others charged are accused of conspiring to submit a total of approximately $452 million in fraudulent billing.
“As charged in the indictments, these fraud schemes were committed by people up and down the chain of healthcare providers,” said Assistant Attorney General Breuer. “Today’s operations mark the fourth in a series of historic Medicare fraud takedowns over the past two years. These indictments remind us that Medicare is an attractive target for criminals. But it should also remind those criminals that they risk prosecution and prison time every time they submit a false claim.”
“Health care fraud is not a victimless crime,” said FBI Deputy Director Joyce. “Every person who pays for health care benefits, every business that pays higher insurance costs to cover their employees, every taxpayer who funds Medicare - all are victims. The FBI will continue to work closely with our federal, state and local law enforcement partners to address health care vulnerabilities, fraud and abuse. We will use every tool we have to ensure our health care dollars are used to care for the sick - not to line the pockets of criminals.”
“Today over 200 OIG Special Agents, Forensic Examiners and Analysts have deployed throughout the country to ensure that those responsible for committing Medicare fraud are held accountable,” said HHS-OIG Deputy Inspector General Cantrell. “OIG is committed to the strike force model and will continue to use advanced data analytics along with traditional investigative methods to root out those who steal from our Medicare program.”
Seven individuals were charged today in Baton Rouge, La., for participating in a fraud scheme involving $225 million in false claims for CMHC services. The case represents the largest CMHC-related scheme ever prosecuted by the Medicare Fraud Strike Force. According to court documents, the defendants recruited beneficiaries from nursing homes and homeless shelters, some of whom were drug addicted or mentally ill, and provided them with no services or medically inappropriate services.
United States Attorney Donald J. Cazayoux, Jr. stated, “These indictments demonstrate our continued commitment to seek out and prosecute those who attempt to destroy our health care system for their own unlawful gain. We will continue to work closely with our federal and state partners to catch and punish these criminals who seek to undermine our valuable Medicare program.”
“The more than $225 million we believe was fraudulently billed to Medicare by these providers represents the largest amount of suspected loss in all of today’s nationwide Strike Force actions. Today’s efforts by OIG-HHS and our law enforcement demonstrates our continuing commitment to fighting health care fraud,” said Mike Fields, Special Agent-in-Charge for the Dallas region, which includes Baton Rouge, of the Department of Health and Human Services Office of Inspector General. “By combining new data analytics methods with traditional investigative techniques, OIG is increasingly able to identify and bring to justice those who try to pad their own pockets with taxpayer dollars.”
FBI Special Agent-in-Charge David Welker stated, “The United States spends more than $2.5 trillion on health care annually and rough estimates indicate that anywhere from 3-10 percent of all health care expenditures are attributed to fraud. Fraud in turn drives up the cost of health care and health care insurance which impacts you, the consumer, in the cost and quality of your health care. The FBI and its law enforcement partners will continue to be vigilant and identify, investigate, and prosecute those individuals who prey on our health care system. But you, the consumer and true victim, must also continue to be vigilant, be your own best advocate, be on guard for fraud and abuse as it pertains to your case, and report fraudulent activities to the proper authorities.”
Louisiana Attorney General Buddy Caldwell stated, “Teamwork between federal, state and local agencies is essential in the fight against health care fraud – a crime that costs us all. I want to assure you that the Attorney General’s Medicaid Fraud Control Unit will continue to work with our law enforcement partners to bring to justice those that falsely believe they can steal taxpayer dollars from our Medicaid and Medicare programs.”
In Miami, a total of 59 defendants, including three nurses and two therapists, were charged today and yesterday for their participation in various fraud schemes involving a total of $137 million in false billings for home health care, mental health services, occupational and physical therapy, DME and HIV infusion. Two of these 59 defendants were originally charged in April 2012 but were indicted on additional charges today. In one case, 10 defendants were charged for participating in a fraud scheme at Health Care Solutions Network, which led to approximately $63 million in fraudulent billing for community mental health center (CMHC) services. Court documents allege that therapists at Health Care Solutions Network were instructed to alter notes and other medical documents to justify CMHC services for beneficiaries who did not need the services.
In Houston, nine individuals, including one doctor and one nurse, were charged today with fraud schemes involving a total of $16.4 million in false billings for home health care and ambulance services. According to court documents, the owners and operators of four different ambulance companies billed Medicare for ambulance rides that were medically unnecessary.
Eight defendants, including two doctors, were charged in Los Angeles for their roles in schemes to defraud Medicare of approximately $14 million. In one case, two individuals allegedly billed Medicare for more than $8 million in fraudulent billing for DME.
In Detroit, 22 defendants, including four licensed social workers, were charged for their roles in fraud schemes involving approximately $58 million in false claims for medically unnecessary services, including home health, psychotherapy and infusion therapy.
In Tampa, Fla., a pharmacist was charged with illegal diversion of controlled substances. One defendant was charged last week in Chicago for his alleged role in a scheme to submit approximately $1 million in false billing to Medicare for psychotherapy services.
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 more than 1,330 defendants who collectively have falsely billed the Medicare program for more than $4 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
The cases announced today are being prosecuted and investigated by Medicare Fraud Strike Force teams comprised of attorneys from the Fraud Section of the Justice Department’s Criminal Division and from the U.S. Attorneys’ Offices for the Southern District of Florida, the Eastern District of Michigan, the Southern District of Texas, the Central District of California, the Middle District of Louisiana, the Northern District of Illinois, and the Middle District of Florida, and agents from the FBI, HHS-OIG and state Medicaid Fraud Control Units.
An indictment is merely a charge and defendants are presumed innocent until proven guilty.
To learn more about HEAT, go to: www.stopmedicarefraud.gov.
FORMER PORT ALLEN CITY COUNCIL MEMBER SENTENCED IN OPERATION BLIGHTED OFFICIALS
BATON ROUGE, LA – United States Attorney Donald J. Cazayoux, Jr., announced that, as part of Operation Blighted Officials, Chief U.S. District Judge Brian A. Jackson sentenced JOHNNY L. JOHNSON, Sr., age 65, of Port Allen, Louisiana to two years probation, with a condition of having to spend 6 months in a half-way house, and forfeiture of the bribe proceeds.
During his guilty plea, JOHNSON admitted that, on November 19, 2008, while he was a member of the Port Allen City Council, he and then-Port Allen Mayor Derek Lewis provided false official letters of support for a conceptual product known as the Cifer 5000. In exchange for the false letters, JOHNSON and Lewis accepted an $8,000 suite at the Bayou Classic football game, with JOHNSON’s share being six tickets worth $2,500.
In July 2010, JOHNSON was first contacted by federal law enforcement authorities concerning this matter. He promptly took responsibility for his actions, agreed to cooperate with the investigation, and pled guilty before the late Chief Judge Tyson on July 23, 2010.
At today’s sentencing, the Court and the United States repeatedly credited JOHNSON for having been the first defendant in Operation Blighted Officials to accept responsibility, cooperate with the investigation, and plead guilty in a timely manner. While noting that JOHNSON’s criminal betrayal of the public trust must not go unpunished, the United States asked the Court to give significant consideration to JOHNSON’s limited role in the overall scheme and his commendable actions since being caught.
United States Attorney Donald J. Cazayoux, Jr., stated: “Today’s sentence reflects the Court’s recognition of the importance of accepting responsibility and cooperation, particularly in public corruption matters. While the defendant’s corrupt actions are inexcusable and warrant the resulting felony conviction, the choices he made to accept responsibility and cooperate are commendable and the sentence appropriately reflects as much.”
The status of the remaining Operation Blighted Officials defendants is:
Maurice Brown: In February 2011, the former Mayor of White Castle, Louisiana, was convicted by a federal jury following a two week trial of violating Racketeering Influenced and Corrupt Organizations Act (RICO), engaging in honest services wire and mail fraud, and use of an interstate facility in aid of racketeering. Judge Jackson sentenced Brown to 120 months in prison.
Thomas A. Nelson, Jr.: In June 2011, the former Mayor of New Roads, Louisiana, was convicted by a federal jury following a two and a half week trial of violating RICO, engaging in honest services wire fraud, using an interstate facility in aid of racketeering, and making false statements to the FBI. Judge Jackson sentenced Nelson to 132 months in prison.
Derek A. Lewis: In June 2011, the former Mayor of Port Allen, Louisiana, pled guilty to violating RICO. He awaits sentencing before Judge Jackson on June 12, 2012.
Frederick W. Smith: In October 2011, the Chief of Police for Port Allen, Louisiana, was convicted by a federal jury following a two week trial of 11 counts of violating RICO, engaging in honest services wire and mail fraud, and using an interstate facility in aid of racketeering. Judge Jackson sentenced Smith to 90 months in prison.
George L. Grace, Sr.: In March 2012, the former Mayor of St. Gabriel, Louisiana, was convicted by a federal jury following a six week trial of violating RICO, engaging in honest services wire and mail fraud, bribery, obstruction of justice, making false statements, and use of an interstate facility in aid of racketeering. U.S. District Judge Maurice Hicks detained Grace pending his sentencing scheduled in August 2012.
This matter is part of Operation Blighted Officials, an investigation by the United States Attorney’s Office and the Federal Bureau of Investigation, with assistance from the U.S. Department of Homeland Security, Office of Inspector General, and the U.S. Department of Housing and Urban Development, Office of Inspector General. Operation Blighted Officials has been prosecuted by Assistant United States Attorneys Corey R. Amundson, Senior Deputy Chief of the Criminal Division, Patricia Jones, Senior Litigation Counsel, and Michael Jefferson.
DENHAM SPRINGS MAN SENTENCED TO SEVENTY YEARS FOR PRODUCTION AND POSSESSION OF
BATON ROUGE, LA – United States Attorney Donald J. Cazayoux, Jr., along with Assistant Attorney General Lanny A. Breuer of the U. S. Department of Justice Criminal Division, announced today that U.S. District Court Judge James J. Brady sentenced PAUL W. MILLER, age 45, of Denham Springs, Louisiana, to seventy years (70) in prison, to pay a fine of $15,000, and to ten (10) years of supervised release after imprisonment. The sentence of seventy years was the statutory maximum authorized by law.
MILLER was convicted by a federal jury on September 21, 2011, of two counts of producing child pornography and one count of possessing child pornography following a two-day trial before U.S. District Court Judge James J. Brady. Evidence presented at trial showed that from October 2007 to May 2008, Miller sexually abused a 12-year-old girl and an 11-year-old girl and produced numerous photographs of the abuse. According to trial evidence, forensic examination of Miller’s computer revealed that Miller had used his computer to print and possess numerous images of child pornography, including both the images of child pornography he had produced and images of other child victims.
U.S. Attorney Cazayoux stated: “The aggressive prosecution of those who harm our most vulnerable citizens will always be a top priority. This investigation, conviction and sentence are the result of a truly cooperative effort between local, state and federal law enforcement and should serve as a reminder to all that our society will never tolerate the abuse of children.”
The case was prosecuted by Assistant U.S. Attorney Richard L. Bourgeois Jr., who also serves as Deputy Chief, and Assistant U.S. Attorney of the District of Colorado Alecia Riewerts Wolak, formerly a Trial Attorney in the Criminal Division’s Child Exploitation and Obscenity Section (CEOS). The investigation was conducted by the FBI, the Denham Springs Police Department and the Louisiana Attorney General’s Office.