United States Attorney Brendan V. Johnson announced that on January 29, 2014, U.S. District Judge Charles B. Kornmann entered a civil judgment in favor of the United States in the amount of $1,376,670 against Howard “Jack” Aleff and Reena Slominski, a married couple from Knoxville, Iowa. Aleff and Slominski did business as L & J Wool & Fur, a South Dakota corporation. They illegally submitted 132 separate false claims to the U.S. Department of Agriculture (USDA), Farm Services Agency (FSA), in Iowa and South Dakota.
Over a period of six years, the couple presented bogus documents to the FSA, Commodity Credit Corporation, that appeared to be legitimate business transactions to support their requests for wool loan deficiency payments when in fact they owned no sheep. As a result, the United States paid them $303,890 to which they were not entitled.
The False Claims Act (31 U.S.C. § 3729) imposes liability on persons and companies who knowingly submit false claims to the government or causes another to submit a false claim to the government, or knowingly makes a false record or statement to get a false claim or benefit paid by the government. Persons who submit a false claim must pay to the United States a civil penalty of not less than $5,500 and not more than $11,000 for each false claim, plus three times the amount of damages which the government sustained.
Previously, Aleff and Slominski pled guilty to the criminal charge of Conspiracy to Defraud the United States, and on September 13, 2012, they were sentenced to five years’ probation, fined $60,000, and ordered to pay restitution of $303,890 to the Commodity Credit Corporation.
The United States Attorney’s Office places a high priority on criminal and civil enforcement in cases involving all types of fraud committed against the government, and works with various law enforcement agencies to identify and investigate these matters. The investigation in this case was conducted by the USDA, Office of Inspector General (OIG). Assistant U.S. Attorneys Thomas Wright and Cheryl Schrempp DuPris prosecuted the criminal and civil cases respectively.