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  • MIL-OSI China: Economic Watch: China beefs up policy support to bolster foreign trade, investment

    Source: China State Council Information Office

    An exhibitor displays honey products from Kyrgyzstan at the 6th China International Import Expo (CIIE) in east China’s Shanghai, Nov. 7, 2023. [Photo/Xinhua]

    The China International Import Expo (CIIE), the world’s first national-level import-themed expo, is about to be held for the seventh consecutive year in Shanghai, with overseas enterprises gathering to take the pulse of the Chinese market.

    Scheduled to be held from Nov. 5 to 10, the 7th CIIE has attracted participants from 152 countries, regions and international organizations, and achieved a new record with 297 Fortune Global 500 companies and industry leaders set to attend.

    The previous six editions saw nearly 2,500 new products, technologies and services make their debuts, with combined intended turnover reaching over $420 billion.

    The CIIE serves to showcase China’s major opening-up measures and confidence, and to share China’s new development opportunities with other countries. It has become a platform for high-level opening up and a public good for the whole world.

    China has continued to roll out policies to spur foreign trade growth and attract foreign investment, cultivating new international competitive advantages and achieving mutual benefits with other countries.

    On Oct. 25, the country issued a guideline to promote the experience in aligning some eligible free trade zones and the Hainan Free Trade Port with high-standard international economic and trade rules.

    The eligible FTZs are in Shanghai, Guangdong, Tianjin, Fujian and Beijing. The pilot measures, which will be replicated in other FTZs or even nationwide, cover six aspects: trade in goods, trade in services, digital trade, personnel entry, business environment, and risk prevention and control.

    China has built 22 pilot FTZs, covering coastal, inland and border areas, contributing about 20% of the country’s total foreign investment and import-export volume. Foreign trade of the FTZs expanded by 11.99% year on year in the first three quarters of 2024.

    Continuous efforts have been made to lower tariffs. In September, China announced it would give all the least developed countries having diplomatic relations with the country zero-tariff treatment for 100% tariff lines starting from Dec. 1 this year.

    China also keeps rolling out policies to nurture fertile ground for foreign investors. The new edition of the national negative list for foreign investment took effect on Friday, scrapping the two remaining items in the manufacturing industry on the previous list.

    The items on the latest negative list, specifying fields off-limits to foreign investors, have been further slashed to 29.

    This fully demonstrates China’s active willingness to expand mutual benefits and a clear attitude to supporting economic globalization, said Jin Xiandong, an official with the National Development and Reform Commission, adding that further efforts will be made to improve the level of foreign investment liberalization and facilitation, and to optimize service for foreign-invested enterprises.

    Besides the manufacturing sector, China is also pushing forward broader and deeper opening up in the service sector.

    China announced in September that it would allow the establishment of wholly foreign-owned hospitals in certain cities and regions, including Beijing, Tianjin, Shanghai, Nanjing, Suzhou, Fuzhou, Guangzhou, Shenzhen and throughout the island of Hainan.

    In October, the country decided to allow foreign investors to operate wholly-owned businesses such as internet data centers and engage in online data processing and transaction processing in certain areas as part of a pilot program to expand opening up in value-added telecom services.

    A total of 42,108 new foreign-invested firms were established across China in the first nine months of 2024, up 11.4% year on year. Notably, foreign direct investment inflows into medical equipment and instrument manufacturing surged 57.3%, while inflows into computer and office device manufacturing grew by 29.2% during this period.

    Opening up to the outside world is not just a matter of “opening the door,” but, more importantly, is actively aligning with international economic and trade regulations as well as other high-standard rules, said Zhang Bin, deputy director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences.

    Zhang underlined the need to enhance synergy between the domestic and international markets as well as resources to constantly cultivate and consolidate new advantages in international economic cooperation and competition.

    MIL OSI China News –

  • MIL-OSI Asia-Pac: Building safety symposium held

    Source: Hong Kong Information Services

    More than 400 building professionals, property management practitioners, government officials and academics today attended the Building Safety Symposium, organised by the Buildings Department, to discuss the application of innovative technologies to enhance safety at buildings and in construction works.

    Speaking at the symposium, Secretary for Development Bernadette Linn said the Government is conducting a comprehensive review of the Buildings Ordinance, with three aims in mind: encouraging owners to expedite building repairs; rationalising enforcement against unauthorised building works (UBWs); and regulating the quality and safety of building works.

    Stressing that the main approach of the review is to increase penalties, lower prosecution thresholds and rationalise enforcement priorities, Ms Linn said the Government expects a public consultation on specific proposals to be launched by the end of this year, with legislative amendment proposals being submitted in the first half of 2026.

    In addition, she highlighted that the Government has adopted innovative technologies to enhance enforcement and work efficiency, including using new technologies such as drones and artificial intelligence to speed up building inspections, thereby strengthening enforcement against UBWs and defective signboards, and enhancing site safety.

    The Government will also put forward elderly-friendly building design proposals to tie in with its “ageing in place” policy. It has announced a roadmap, generally supported by the industry, to make it mandatory for the private sector to adopt Building Information Modelling (BIM) technology by 2029. Ms Linn said the Government will continue to work with the industry to make preparations.

    Director of Buildings Clarice Yu said at the symposium that the department will undertake a consultancy exercise on the full adoption of BIM by the private sector.

    In July, the department introduced mandatory measures requiring the adoption of two alert systems, under the Smart Site Safety System, for superstructure works with an estimated construction cost over $30 million. It is also exploring the feasibility of extending the systems to other types of works.

    The department will continue to apply professional expertise and take an innovative approach, while working together with the industry to create a safer and more sustainable built and living environment, Ms Yu added.

    The symposium was a highlight event of Building Safety Weeks 2024, and featured a number of local experts speaking on topics ranging from elderly-friendly building design to the impact of temperature on building safety.

    The department will hold carnivals on November 9 and 10 at Tuen Mun Town Plaza, and on November 16 and 17 at Olympic City 2. These will feature game booths, allowing the public to acquire building safety knowledge in a fun and engaging way.

    MIL OSI Asia Pacific News –

  • MIL-OSI Australia: THREE BRIDGES ROAD, DEEP CREEK (Grass Fire)

    Source: Country Fire Service – South Australia

    DEEP CREEK

    Three Bridges Road Incident

    Issued for Deep Creek near Delamere and Cape Jervis in the Southern Fleurieu.

    The CFS is aware of the reignition of a previous burnoff near Three Bridges Road and Dog Trap Road, Delamere, near Cape Jervis in the Southern Fleurieu region of South Australia.

    The local land owner will continue to monitor the pile for several days.

    Smoke may be visible in the surrounding area.

    Message ID 0007802

    MIL OSI News –

  • MIL-OSI Economics: Joby Aviation and Toyota Accelerate Efforts to Realize Air Mobility

    Source: Toyota

    Headline: Joby Aviation and Toyota Accelerate Efforts to Realize Air Mobility

    Toyota Motor Corporation (Toyota) and Joby Aviation (Joby) came together at Toyota’s Higashi-Fuji Technical Center (Shizuoka, Japan) to assert their collective passion and ambition for air mobility in a gathering that included executives from both companies, Akio Toyoda, the chairman of the Toyota Group, and Joby CEO and founder, JoeBen Bevirt, along with Joby’s air taxi, an electric vertical takeoff and landing aircraft (eVTOL).

    MIL OSI Economics –

  • MIL-Evening Report: Palau newspaper sued by president’s family company ahead of general election

    By Stefan Armbruster of BenarNews

    Palau’s largest newspaper is being sued for defamation by the company of President Surangel Whipps Jr’s father, just days ahead of general elections in the Pacific nation.

    Surangel and Sons alleges “negligence and defamation” by the Island Times and its editor Leilani Reklai for an article published on Tuesday with “false and unsubstantiated allegations,” owner Surangel Whipps Sr said in a press release on Thursday.

    Reklai has rejected the company’s allegations and said the “lawsuit is trying to control how media here in Palau tells a story”, a news article about the case in the Island Times reported on Friday.

    “I feel like we are being intimidated, we are being forced to speak a certain narrative rather than present diverse community perspectives,” said Reklai, who is also a stringer for BenarNews.

    The Micronesian nation of 17,000 people — 650 km north of Papua New Guinea — goes to the polls on November 5. Whipps Jr’s rival is his brother-in-law Tommy Remengesau Jr, who was president from 2001 to 2009 and 2013 to 2021.

    The controversy comes after Palau was top of the inaugural 2023 Pacific Media Freedom Index of 14 island countries that highlighted the region’s media facing significant political and economic pressures, bribes and corruption, as well as self-censorship.

    Island Times editor Leilani Reklai . . . fears the lawsuit could have serious consequences for the media in Palau and bankrupt the newspaper. Image: Stefan Armbruster

    Island Times reported on Friday the suit is seeking compensation and punitive damages and that the company asserts the “monetary awards should be substantial enough to prevent similar conduct from the newspaper and Reklai in future”.

    Surangel and Sons financial details — leaked from the country’s tax office — were posted on social media last weekend, prompting heated online debate over how much it paid.

    A new corporate and goods and services tax system introduced by Whipps Jr’s government is currently being rolled out in Palau and its merits have been a focus of election campaigning.

    The company in a statement said its “privacy rights had been violated,” the tax details were obtained illegally, posted online without consent, and some of the figures had been altered.

    Motivation ‘confusing voters’
    “The motivation behind the circulation of this document is clearly for misinformation and disinformation to confuse voters. In the end Surangel and Sons is not running for office. Unfortunately, it has been victimised by this smear campaign,” the company posted on social media.

    Island Times in a 225-word, front-page story headlined “Surangel & Sons condemns tax report leak as privacy violation” reported the company’s statement on Tuesday. It also quoted financial details from the leaked documents and accompanying commentary.

    Whipps Jr. in a press conference on Wednesday accused the Island Times of publishing disinformation.

    “Island Times continues to print political propaganda, it’s not accurate,” Whipps Jr said, calling for a correction to be published.

    The lawsuit against the paper and its editor was served the next day.

    Whipps Jr’s spokesperson told BenarNews any questions related to the lawsuit should be directed to the parties involved.

    Eightieth birthday celebrations for Surangel Whipps Sr (left) with his son Surangel Whipps Jr in February 2020. Image: Diaz Broadcasting Palau screenshot BenarNews

    Surangel and Sons was founded in 1980 by Whipps Sr, who also served as Palau’s president briefly in 2005 and for two years from 2007.

    Business ‘offers everything’
    The privately-owned business “offers everything from housing design and automotive repair to equipment rentals, groceries, and scuba gear” through its import, sales, construction and travel arms, the company’s website says.

    Previously as CEO, Whipps Jr transformed the company from a family store to one of Palau’s largest and most diversified businesses, employing more than 700 people.

    His LinkedIn profile states he finished as CEO in January 2021, after 28 years in the position and in the month he became president. His spokesperson did not respond to questions from BenarNews about if he still retains any direct financial or other links to the company.

    Surangel and Sons said the revelation of sensitive business information threatens their competitive advantage and puts jobs at risk.

    Palau’s Minister of Finance Kaleb Udui Jr told the president’s press conference on Wednesday an investigation was underway, a special prosecutor would be appointed and apologized for the leak to the company.

    “I would hope the media would make extra effort to help educate the public and discourage misinformation and breaches of privacy of the tax office and any other government office,” Udui said, confirming the tax documents had been altered before being posted on social media.

    He said tax office staff have previously been warned about leaks and ensuring data confidentiality, as breaches negatively impact the confidence of foreign investors in Palau.

    Explanation rather than leak
    Whipps Jr added that the newspaper should have explained the tax system instead of reporting the leaked information.

    He also accused Island Times of failure to disclose a paid advertisement in this week’s edition of the paper for his political opponent.

    “I’m disappointed in the Island Times, because there was an article that was not an article, a paid advertisement,” Whipps Jr said about a colourful blue and yellow election campaign graphic.

    Island Times told BenarNews it was not usual practice to put “Paid Advertisement” on advertisements but it would review its policy for political campaign material.

    Reklai fears the lawsuit could have serious consequences for the media in Palau and bankrupt Island Times, the paper reported.

    “If I don’t stand up to this, it sends a signal to all journalists that they risk facing claims for damages for powerful companies and government officials while carrying out their work,” she said.

    Palau has two newspapers and four radio stations and enshrined in its constitution are protections for journalists, including a guarantee they cannot be jailed for refusing to disclose sources.

    Surangel and Sons said they would no longer sell Island Times through their outlets.

    Copyright ©2015-2024, BenarNews. Republished with the permission of BenarNews.

    MIL OSI Analysis – EveningReport.nz –

  • MIL-OSI China: China beefs up policy support to bolster foreign trade, investment

    Source: People’s Republic of China – State Council News

    BEIJING, Nov. 2 — The China International Import Expo (CIIE), the world’s first national-level import-themed expo, is about to be held for the seventh consecutive year in Shanghai, with overseas enterprises gathering to take the pulse of the Chinese market.

    Scheduled to be held from Nov. 5 to 10, the 7th CIIE has attracted participants from 152 countries, regions and international organizations, and achieved a new record with 297 Fortune Global 500 companies and industry leaders set to attend.

    The previous six editions saw nearly 2,500 new products, technologies and services make their debuts, with combined intended turnover reaching over 420 billion U.S. dollars.

    The CIIE serves to showcase China’s major opening-up measures and confidence, and to share China’s new development opportunities with other countries. It has become a platform for high-level opening up and a public good for the whole world.

    China has continued to roll out policies to spur foreign trade growth and attract foreign investment, cultivating new international competitive advantages and achieving mutual benefits with other countries.

    On Oct. 25, the country issued a guideline to promote the experience in aligning some eligible free trade zones and the Hainan Free Trade Port with high-standard international economic and trade rules.

    The eligible FTZs are in Shanghai, Guangdong, Tianjin, Fujian and Beijing. The pilot measures, which will be replicated in other FTZs or even nationwide, cover six aspects: trade in goods, trade in services, digital trade, personnel entry, business environment, and risk prevention and control.

    China has built 22 pilot FTZs, covering coastal, inland and border areas, contributing about 20 percent of the country’s total foreign investment and import-export volume. Foreign trade of the FTZs expanded by 11.99 percent year on year in the first three quarters of 2024.

    Continuous efforts have been made to lower tariffs. In September, China announced it would give all the least developed countries having diplomatic relations with the country zero-tariff treatment for 100 percent tariff lines starting from Dec. 1 this year.

    China also keeps rolling out policies to nurture fertile ground for foreign investors. The new edition of the national negative list for foreign investment took effect on Friday, scrapping the two remaining items in the manufacturing industry on the previous list.

    The items on the latest negative list, specifying fields off-limits to foreign investors, have been further slashed to 29.

    This fully demonstrates China’s active willingness to expand mutual benefits and a clear attitude to supporting economic globalization, said Jin Xiandong, an official with the National Development and Reform Commission, adding that further efforts will be made to improve the level of foreign investment liberalization and facilitation, and to optimize service for foreign-invested enterprises.

    Besides the manufacturing sector, China is also pushing forward broader and deeper opening up in the service sector.

    China announced in September that it would allow the establishment of wholly foreign-owned hospitals in certain cities and regions, including Beijing, Tianjin, Shanghai, Nanjing, Suzhou, Fuzhou, Guangzhou, Shenzhen and throughout the island of Hainan.

    In October, the country decided to allow foreign investors to operate wholly-owned businesses such as internet data centers and engage in online data processing and transaction processing in certain areas as part of a pilot program to expand opening up in value-added telecom services.

    A total of 42,108 new foreign-invested firms were established across China in the first nine months of 2024, up 11.4 percent year on year. Notably, foreign direct investment inflows into medical equipment and instrument manufacturing surged 57.3 percent, while inflows into computer and office device manufacturing grew by 29.2 percent during this period.

    Opening up to the outside world is not just a matter of “opening the door,” but, more importantly, is actively aligning with international economic and trade regulations as well as other high-standard rules, said Zhang Bin, deputy director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences.

    Zhang underlined the need to enhance synergy between the domestic and international markets as well as resources to constantly cultivate and consolidate new advantages in international economic cooperation and competition.

    MIL OSI China News –

  • MIL-OSI Russia: Transferring experience beyond the Urals: welders trained in laser technologies at the Polytechnic

    Translation. Region: Russian Federation –

    Source: Peter the Great St Petersburg Polytechnic University – Peter the Great St Petersburg Polytechnic University –

    Welders from the Trans-Urals and Krasnoyarsk region became the first students in the additional professional education program at the Research Laboratory “Laser and Additive Technologies” of the Institute of Mechanical Engineering of Materials and Transport of SPbPU. Specialists from various branches of the ISO company came to St. Petersburg to study laser welding and additive technologies.

    Transfer of knowledge in the field of innovative laser technologies to representatives of the regions is important for meeting the needs of the national economy and state security. Training specialists of enterprises of the real sector of the economy at the Institute of Mechanical Engineering, Materials and Transport contributes to strengthening the technological sovereignty of Russia, – emphasized the director of IMMiT SPbPU Anatoly Popovich.

    Five specialists completed a course in the direction of “Technological Fundamentals of Surface Restoration and Modification”. The advanced training program included theoretical intensives in the lecture hall and practical classes on equipment provided by the laboratory.

    The ISO company is an important strategic partner for us. During the work on joint projects in the field of laser welding technologies, we found common ground in science, production and training. Such interaction helps to transfer the technological experience accumulated by the laboratory staff to the regions of Russia. We hope that cooperation between the university and the industrial partner will develop even more actively, – noted the head of the Scientific Research Laboratory “LiAT” of the IMMiT SPbPU Mikhail Kuznetsov.

    The material and technical base of the Scientific and Research Laboratory “LiAT” is represented by unique equipment, including our own development, for laser and hybrid laser-arc welding, direct laser deposition, laser cladding and laser surface hardening. This makes it possible to solve a wide range of scientific and applied problems and to train specialists in laser welding and additive technologies in practice.

    The classes were conducted by the employees of the Scientific and Research Laboratory “LiAT”. Experienced specialists shared their knowledge with representatives of industrial enterprises of the Ural Federal District and Krasnoyarsk Krai. A visit by the General Director of “ISO” Alexander Baranchikov was a pleasant surprise for the students. Alexander Nikolaevich familiarized himself with the program, asked his colleagues about the opinion of the training and discussed with the head of the laboratory the possibilities of further cooperation between the company and the university.

    The practical development of laser welding technologies helped to reveal that the hybrid laser-arc method is more suitable for the needs of our enterprise. Therefore, we decided to train our employees in innovative welding methods. The optimal number is five to six people. As in art – in small groups, where talents absorb the basics. During their training at the Polytechnic, our specialists learned to program industrial robots, were engaged in welding and heat treatment. Returning to their workplaces, they will become flagships of innovations and lead their colleagues. Such continuity will contribute to the sustainable development of the technology industry and will become a support for import substitution in our country, – said Alexander Baranchikov.

    After successful completion of the training, the students received state certificates of completion of the course and took additional knowledge and skills to the regions, which will help them improve their professional activities and apply new technologies in their work.

    Please note: This information is raw content directly from the source of the information. It is exactly what the source states and does not reflect the position of MIL-OSI or its clients.

    MIL OSI Russia News –

  • MIL-OSI Asia-Pac: Legal Week set to open

    Source: Hong Kong Information Services

    Hong Kong Legal Week 2024 will begin on Monday, with “Hong Kong Common Law System: World-Class Springboard to China & Beyond” as its theme.

    An annual flagship event for the Department of Justice (DoJ), it will run until Friday, and will allow participants to interact with experts, practitioners, government officials and academics on topics including international law, alternative dispute resolution and opportunities in the Greater Bay Area.

    The schedule will begin with the Asia-Pacific International Private Law Summit, co-organised by the DoJ, and will conclude with the official launch of the Hong Kong International Legal Talents Training Academy.

    There will also be an exhibition highlighting achievements in the development of China’s rule of law in the modern era, and the role of Hong Kong in contributing to it.

    MIL OSI Asia Pacific News –

  • MIL-OSI USA: New Jersey Resident Pleads Guilty to Helping Russia’s Defense Sector Evade U.S. Export Controls

    Source: US State of North Dakota

    Defendant Facilitated Russia’s Acquisition of Millions of Dollars of U.S.-Made Dual-Use Electronics Used in Radar, Surveillance, and Military Research and Development

    Vadim Yermolenko, 43, a dual U.S.-Russian national and resident of New Jersey, pleaded guilty to conspiracy to violate the Export Control Reform Act, conspiracy to commit bank fraud, and conspiracy to defraud the United States for his role in a transnational procurement and money laundering network that sought to acquire sensitive dual-use electronics for Russian military and intelligence services.

    “This defendant joins the nearly two dozen other criminals that our Task Force KleptoCapture has brought to justice in American courtrooms over the past two and a half years for enabling Russia’s military aggression,” said Attorney General Merrick B. Garland. “This defendant admitted to playing a central role in a now-disrupted scheme with Russian intelligence services to smuggle sniper rifle ammunition and U.S. military grade equipment into Russia. The Justice Department will never stop working to aggressively disrupt and prosecute both the criminal networks and the individuals responsible for bolstering the Russian war machine.”

    “The illegal export of sensitive, dual-use technologies in support of Russia’s war effort poses a significant threat to the United States and its allies and must not be tolerated,” said FBI Director Christopher Wray. “The defendant in this case played a key role in exporting U.S. technology that in the hands of our adversaries could pose great danger to our national security. The FBI and its partners will continue to focus on protecting strategic innovation at home and hold accountable anyone who facilitates illegal transfers to hostile nations like Russia.”

    “To facilitate the Russian war machine, the defendant played a critical role in exporting sensitive, dual-use technologies to Russia, facilitating shipping and the movement of millions of dollars through U.S. financial institutions,” said U.S. Attorney Breon Peace for the Eastern District of New York. “This plea highlights my Office and our law enforcement partners continued commitment to use all tools available to prosecute those who unlawfully procure U.S. technology to send to Russia.”

    According to court documents, the defendant was affiliated with Serniya Engineering and Sertal LLC, Moscow-based companies that operate under the direction of Russian intelligence services to procure advanced electronics and sophisticated testing equipment for Russia’s military industrial complex and research and development sector. Serniya and Sertal operated a vast network of shell companies and bank accounts throughout the world, including the United States, that were used in furtherance of the scheme to conceal the involvement of the Russian government and the true Russian end users of U.S.-origin equipment.

    The defendant and his co-conspirators unlawfully purchased and exported highly sensitive, export controlled electronic components, some of which can be used in the development of nuclear and hypersonic weapons, quantum computing and other military applications. Following Russia’s invasion of Ukraine in February 2022, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the U.S. Department of Commerce (DOC) Bureau of Industry and Security (BIS) levied sanctions and imposed additional export restrictions on Serniya, Sertal, and several individuals and companies used in the scheme, calling them “instrumental to the Russian Federation’s war machine.”

    Sertal was licensed to conduct highly sensitive and classified procurement activities by Russia’s Federal Security Service (FSB), Russia’s principal security agency and the main successor agency to the Soviet Union’s KGB. The Serniya network’s Russian clients included State Corporation Rostec, the state-owned defense conglomerate; State Atomic Energy Corporation Rosatom (Rosatom); the Ministry of Defense; the Foreign Intelligence Service (SVR); and various components of the FSB, including the Department of Military Counterintelligence and the Directorate for Scientific and Technological Intelligence, commonly known as “Directorate T.”

    To carry out the scheme, the defendant helped set up numerous shell companies and dozens of bank accounts in the U.S. to illicitly move money and export-controlled goods. During the period charged in the indictment, more than $12 million passed through accounts owned or controlled by the defendant. These funds were used in part to purchase sensitive equipment used in radar, surveillance and military research and development. In one instance, money from one of the defendant’s accounts was used to purchase export-controlled sniper bullets, which were intercepted in Estonia before they could be smuggled into Russia.

    Co-defendant Alexey Brayman previously pleaded guilty to conspiracy to defraud the United States and is awaiting sentence. The case against co-defendant Vadim Konoshchenok, a suspected FSB operative, was dismissed after Konoshchenok was removed from the United States as part of a prisoner exchange negotiated between the United States and Russia. Defendant Nikolaos Bogonikolos’ case remains pending. Defendants Boris Livshits, Alexey Ippolitov, Svetlana Skvortsova, and Yevgeniy Grinin remain at large.        

    The FBI, BIS, and IRS are investigating the case.

    The U.S. Customs and Border Protection, Department of Justice’s Office of International Affairs, and Estonian authorities provided valuable assistance.

    Assistant U.S. Attorneys Artie McConnell, Andrew D. Reich, and Matthew Skurnik for the Eastern District of New York are prosecuting the case, with assistance from Trial Attorney Scott A. Claffee of the National Security Division’s Counterintelligence and Export Control Section.

    Today’s actions were coordinated through the Justice Department’s Task Force KleptoCapture and the Justice and Commerce Departments’ Disruptive Technology Strike Force. Task Force KleptoCapture is an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export restrictions and economic countermeasures that the United States has imposed, along with its allies and partners, in response to Russia’s unprovoked military invasion of Ukraine. The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains and prevent critical technology from being acquired by authoritarian regimes and hostile nation states.

    MIL OSI USA News –

  • MIL-OSI USA: Lyft to Pay Civil Penalty to Resolve Allegations of Misleading Drivers About Their Potential Earnings

    Source: US State of North Dakota

    The Justice Department, together with the Federal Trade Commission (FTC), today announced that Lyft Inc. (Lyft) has agreed to resolve allegations that it made false and misleading statements about how much Lyft drivers would earn. The settlement includes an agreement to pay $2.1 million in civil penalties and a permanent injunction prohibiting such false and misleading earnings claims.

    Lyft operates a mobile app ride-hailing platform that connects consumers seeking rides with those who provide rides with their own personal vehicles. Through marketing campaigns and advertisements, Lyft recruits drivers. After a driver is hired, Lyft sets the rates the driver charges and collects a portion of the fare for each ride. In a civil complaint filed in the U.S. District Court for the Northern District of California, the government alleges that, as early as 2021, Lyft made false and misleading claims in its advertising and marketing regarding potential earnings and incentives to be earned by drivers who signed up to drive for Lyft. Lyft allegedly continued these practices even after it received a Notice of Penalty Offenses in October 2021 that placed the company on notice that false and misleading earnings claims were unlawful.

    The complaint alleges that Lyft disseminated advertisements promoting specific hourly amounts that drivers throughout the United States could earn. The company, however, did not disclose that the potential hourly amounts were based on the earnings of the top 20% of its drivers. The complaint also further alleges that Lyft also tried to induce drivers to offer more rides by promoting “earnings guarantees,” which guaranteed that drivers would be paid a set amount if they completed a specific number of rides in a certain time. These guarantees allegedly did not clearly disclose that drivers were paid only the difference between what they otherwise earned for the rides and Lyft’s advertised guaranteed amount, rather than receiving the full guaranteed amount in addition to their regular earnings for the rides.

    In the stipulated order entered today by the federal district court, Lyft is required to pay a $2,100,000 civil penalty. The order also enjoins Lyft from making any misrepresentations regarding driver earnings and includes other monitoring and reporting provisions aimed at promoting Lyft’s compliance with the order.

    “The Justice Department will vigorously enforce the law to stop companies from misleading Americans about their potential earnings in the gig economy,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will continue to work with the FTC to stop unfair and deceptive marketing practices.”

    “Lyft drivers deserve accurate information about how much they will be paid for the work they do,” said Director Samuel Levine of the FTC’s Bureau of Consumer Protection. “Our settlement with Lyft bans exaggerated earnings claims and underscores the FTC’s commitment to ensuring gig workers are treated fairly.”

    Trial Attorney Paulina Stamatelos and Assistant Director Zachary Dietert of the Civil Division’s Consumer Protection Branch, Assistant U.S. Attorney Ekta Dharia for the Northern District of California and Abdiel Lewis and Evan Rose of the FTC’s Bureau of Consumer Protection handled the matter.

    For more information about the Consumer Protection Branch and its enforcement efforts, visit www.justice.gov/civil/consumer-protection-branch. For more information about the FTC, visit www.FTC.gov.

    MIL OSI USA News –

  • MIL-OSI USA: Georgia CPA Sentenced in Syndicated Conservation Easement Tax Scheme

    Source: US State of North Dakota

    Defendant Helped Clients File Tax Returns Claiming $14M in False Deductions, Causing Nearly $5M in Loss to the IRS

    A Georgia accountant was sentenced today to 28 months in prison for his role in the promotion and sale of abusive syndicated conservation easement tax shelters.

    According to court documents and statements made in court, Herbert Lewis was a CPA and return preparer at an Atlanta-based accounting firm. Beginning at least in 2014 and through at least 2019, Lewis promoted and sold tax deductions to his wealthy clients in the form of units in illegal syndicated conservation easement tax shelters organized and created by co-defendants Jack Fisher, James Sinnott and others.

    According to court documents and statements made in court, Lewis also knew that, contrary to law, the transactions related to these illegal tax shelters lacked economic substance, that his wealthy clients participated only to obtain a tax deduction and that his clients received only a tax benefit for their participation in the shelters. For example, the scheme entailed the creation of partnerships that would purchase land and land-owning companies and then donate conservation easements over that land or the land itself. A client who purchased units in one of these partnerships had a “vote” ostensibly on what to do with the land the partnership owned. However, Lewis knew that the vote held by the partnership each year was just for optics and that the land invariably would be donated largely as a conservation easement.

    In some cases, in order to make it appear that his clients had joined the partnerships before the date of the conservation easement donation, which was necessary to claim the tax benefits, Lewis also instructed and caused his clients to falsely backdate documents — such as subscription agreements and checks — related to the partnerships. In 2019 alone, Lewis assisted 15 clients with claiming false deductions on their 2018 returns.

    In total, Lewis assisted in the preparation of tax returns that claimed nearly $14 million in false deductions based on backdated documents, causing a tax loss to the IRS of nearly $5 million.   

    Lewis earned over $1 million in commissions for his role in promoting and selling the illegal tax shelters to clients. Lewis also concealed the amount of commissions he had earned from selling units in these shelters by not fully reporting the commissions on his personal returns and instead fraudulently reporting commission income he had earned as income on the tax returns of nominee entities in his children’s names.

    In addition to his prison sentence, U.S. District Court Judge Timothy C. Batten Sr. for the Northern District of Georgia ordered Lewis to serve three years of supervised release and to pay $4,878,990.90 in restitution.

    Nine additional defendants have previously pleaded guilty to criminal conduct related to the syndicated conservation easement tax shelter scheme. These other defendants include appraiser Walter Douglas “Terry” Roberts, accountant Stein Agee, CPA Corey Agee, CPA Ralph Anderson, CPA James Benkoil, CPA Victor Smith, CPA William Tomasello, CPA and attorney Randall Lenz and attorney Vi Bui.

    Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division, U.S. Attorney Ryan K. Buchanan for the Northern District of Georgia and IRS Criminal Investigation Chief Guy Ficco made the announcement. They also thanked U.S. Attorney Dena J. King for the Western District of North Carolina for her office’s assistance.

    IRS Criminal Investigation and the U.S. Postal Inspection Service investigated the case.

    Trial Attorneys Richard M. Rolwing, Parker Tobin, Jessica Kraft and Nicholas J. Schilling Jr. of the Justice Department’s Tax Division and Assistant U.S. Attorney Christopher Huber, Deputy Chief of the Complex Frauds Section of the Northern District of Georgia, are prosecuting the case.

    MIL OSI USA News –

  • MIL-OSI USA: Owner of Florida Labor-Staffing Companies Pleads Guilty to Tax Fraud and Money Laundering

    Source: US State of North Dakota

    A Ukrainian national pleaded guilty today to conspiracy to defraud the United States and conspiracy to commit money laundering.

    According to the court documents and statements made in court, between April 2008 and July 2021, Oleksandr Yurchyk and others owned and operated a series of labor-staffing companies in southern Florida, including Paradise Choice LLC, Paradise Choice Cleaning LLC, Tropical City Services LLC and Tropical City Group LLC. Through these staffing companies, Yurchyk and others facilitated the employment of non-resident aliens in the hospitality industry who were not authorized to work in the United States and helped evade the assessment and collection of federal income and employment taxes. Yurchyk and his co-defendants also laundered more than $11 million of proceeds from their scheme.

    Yurchyk is scheduled to be sentenced on Jan. 27, 2025. He faces a maximum penalty of 20 years in prison for the conspiracy to commit money laundering and five years in prison for the conspiracy to defraud the United States. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

    Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Markenzy Lapointe for the Southern District of Florida made the announcement.

    Homeland Security Investigations and IRS Criminal Investigation are investigating the case.

    Senior Litigation Counsel Sean Beaty and Trial Attorneys Matthew B. Hicks and Wilson R. Stamm of the Justice Department’s Tax Division and Senior Litigation Counsel Christopher J. Clark for the Southern District of Florida are prosecuting the case.

    MIL OSI USA News –

  • MIL-OSI USA: Court Permanently Stops Texas Professional and Business from Organizing and Selling “Tax Plans”

    Source: US State of North Dakota

    Agreed Order also Bars Professional from Preparing Tax Returns and Business from Preparing Tax Returns Reflecting Certain “Tax Plans”

    The U.S. District Court for the Northern District of Texas entered permanent injunctions today against Charles Dombek and The Optimal Financial Group LLC barring them from promoting any tax plan that involves creating or using sham management companies, deducting personal non-deductible expenses as business expenses or assisting in the creation of “captive” insurance companies. The injunctions also prohibit Dombek from preparing any federal tax returns for anyone other than himself and Optimal from preparing certain federal tax returns reflecting such tax plans. Dombek and Optimal consented to entry of the injunctions.

    According to the government’s complaint, Dombek is a licensed CPA and served as Optimal’s manager and president. Allegedly, Dombek and Optimal promoted a tax scheme throughout the United States to illegally reduce customers’ income tax liabilities by using sham management companies to improperly shift income to be taxed at lower tax rates, improperly defer taxable income or claim personal expenses as bogus business deductions. As alleged by the government, Dombek promoted himself as the “premier dental CPA” in America. The complaint further alleges that in promoting the schemes, Dombek and Optimal made false statements about the tax benefits of the scheme that they knew or had reason to know were false, then prepared and signed tax returns for their customers reflecting the sham transactions, expenses and deductions. The government contended that the total harm to the treasury from the scheme could have been $10 million or more.

    Deputy Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division made the announcement.

    Each year the IRS highlights some of the tax scams that put taxpayers at risk of losing money, personal information, data and more. In the IRS’s most recent list, it specifically warned taxpayers “to beware of promoters peddling bogus tax schemes aimed at reducing taxes or avoiding them altogether.”

    Working with the IRS, the Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters over the past decade. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

    MIL OSI USA News –

  • MIL-OSI USA: Readout of Director Rachel Rossi’s Trip to Northern California

    Source: US State of California

    Director Rachel Rossi of the Office for Access to Justice traveled to San Francisco to deliver the keynote address at the Pathways to Justice Conference, a statewide legal services conference held every three years. The engagement included meetings on access to justice issues and initiatives happening in Northern California.

    Opening the visit, Director Rossi participated in a listening session hosted by the California Community Justice Workers Working Group, a group of legal aid and access to justice leaders aiming to leverage professional support from nonlawyers to support legal service providers in delivering legal assistance to underserved and marginalized communities. Director Rossi delivered brief opening remarks and then heard from working group members on its proposed recommendations for a community justice worker program in California. The presentation was followed by a discussion with legal aid leaders from across California.

    Tuesday morning, Director Rossi delivered the keynote address for the Pathways to Justice Conference convened by the State Bar of California, the Legal Aid Association of California and the California Judicial Council. The conference convenes nonprofit legal service providers, private bar pro bono volunteers and staff from court departments and self-help centers from across the state to discuss access to justice topics. In her remarks, Director Rossi highlighted Office for Access to Justice initiatives and focused on the need to foster collaboration between state, local and federal access to justice stakeholders.

    Following the keynote, Director Rossi met with leadership from the Legal Aid Association of California, a statewide membership organization of over 100 legal aid providers. In the meeting, Director Rossi listened to the most pressing issues facing California’s legal aid community and discussed support for efforts to increase interagency collaboration at the state level in the pursuit of access to justice.

    That afternoon, Director Rossi attended a roundtable discussion with Bay Area public defense chiefs and leadership, including from San Francisco, Alameda, Santa Clara, Contra Costa, Sonoma, Solano and Marin County, California offices. Director Rossi shared information about Access to Justice Office resources including the Public Defense Resource Hub and the Legal Aid Interagency Roundtable federal funding digital resource. The discussion included the challenges confronting public defense professionals in Northern California such as lack of resources, caseload and workload challenges, recruitment and retention concerns and the unique resource needs for specialized and effective youth defense representation. The roundtable also touched on best practices and innovative public defense strategies spearheaded across bay area offices, including their advocacy and policy work, creative recruitment strategies and holistic representation models.

    Director Rossi then met with Prisoner Legal Services to discuss their work providing civil legal assistance to individuals incarcerated locally. She highlighted the pilot program launched by the Office for Access to Justice in partnership with the Federal Bureau of Prisons, which similarly provides civil legal services to adults in federal custody, including through the first medical-legal partnership in a federal prison in the United States. They discussed future collaboration and sharing of best practices.

    Director Rossi also met with the Federal Public Defender for the Northern District of California to discuss implementation of the Report and Recommendations Concerning Access to Counsel at the Federal Bureau of Prisons’ Pretrial Facilities, unique issues facing Criminal Justice Act panel attorneys, and other issues facing federal defenders in the district. Closing the trip, Director Rossi met with U.S. Attorney Ismail J. Ramsey for the Northern District of California.

    Director Rossi delivered the keynote address for the 2024 Pathways to Justice Conference in San Francisco. 
    Director Rossi and Bay Area public defense chiefs and leadership.
    Director Rossi and Office for Access to Justice staff met with representatives from Prisoner Legal Services. 

    MIL OSI USA News –

  • MIL-OSI USA: Justice Department to Monitor Polls in 27 States for Compliance with Federal Voting Rights Laws

    Source: US State of California

    Civil Rights Division Staff Available to Receive Nationwide Reports Throughout Election Day

    The Justice Department announced today that it plans to monitor compliance with federal voting rights laws in 86 jurisdictions in 27 states for the Nov. 5 general election.

    The Justice Department enforces federal voting rights laws that protect the rights of all eligible citizens to access the ballot. The department regularly deploys its staff to monitor for compliance with federal civil rights laws in elections in communities all across the country.

    For the general election, the department will monitor for compliance with federal voting rights laws on Election Day in 86 jurisdictions, including:

    • Bethel Census Area, Alaska;
    • Dillingham Census Area, Alaska;
    • Kusilvak Census Area, Alaska;
    • North Slope Borough, Alaska;
    • Northwest Arctic Borough, Alaska;
    • Apache County, Arizona;
    • Maricopa County, Arizona;
    • Pima County, Arizona;
    • Yuma County, Arizona;
    • San Joaquin County, California;
    • Broward County, Florida;
    • Miami-Dade County, Florida;
    • Orange County, Florida;
    • Osceola County, Florida;
    • Cobb County, Georgia;
    • DeKalb County, Georgia;
    • Fulton County, Georgia;
    • Gwinnett County, Georgia;
    • Macon-Bibb County, Georgia;
    • Jefferson County, Kentucky;
    • Kenton County, Kentucky;
    • City of Everett, Massachusetts;
    • City of Fitchburg, Massachusetts;
    • City of Leominster, Massachusetts;
    • City of Lowell, Massachusetts;
    • City of Malden, Massachusetts;
    • City of Methuen, Massachusetts;
    • City of Quincy, Massachusetts;
    • City of Salem, Massachusetts;
    • Prince George’s County, Maryland;
    • City of Ann Arbor, Michigan;
    • City of Detroit, Michigan;
    • City of Flint, Michigan;
    • City of Grand Rapids, Michigan;
    • City of Hamtramck, Michigan;
    • City of Warren, Michigan;
    • Hennepin County, Minnesota;
    • City of Minneapolis, Minnesota;
    • Ramsey County, Minnesota;
    • Covington County, Mississippi;
    • Scott County, Mississippi;
    • Warren County, Mississippi;
    • City of St. Louis, Missouri;
    • Blaine County, Montana;
    • Alamance County, North Carolina;
    • Mecklenburg County, North Carolina;
    • Wake County, North Carolina;
    • Bergen County, New Jersey;
    • Middlesex County, New Jersey;
    • Union County, New Jersey;
    • Bernalillo County, New Mexico;
    • Cibola County, New Mexico;
    • Clark County, Nevada;
    • Queens, New York;
    • Cuyahoga County, Ohio;
    • Portage County, Ohio;
    • Allegheny County, Pennsylvania;
    • Luzerne County, Pennsylvania;
    • Philadelphia County, Pennsylvania;
    • City of Pawtucket, Rhode Island;
    • City of Providence, Rhode Island;
    • City of Woonsocket, Rhode Island;
    • Charleston County, South Carolina;
    • Bennett County, South Dakota;
    • Jackson County, South Dakota;
    • Minnehaha County, South Dakota;
    • Oglala Lakota County, South Dakota;
    • Atascosa County, Texas;
    • Bexar County, Texas;
    • Dallas County, Texas;
    • Frio County, Texas;
    • Harris County, Texas;
    • Hays County, Texas;
    • Palo Pinto County, Texas;
    • Waller County, Texas;
    • San Juan County, Utah;
    • Hanover County, Virginia;
    • Henrico County, Virginia;
    • Loudoun County, Virginia;
    • City of Manassas, Virginia;
    • City of Manassas Park, Virginia;
    • Prince William County, Virginia;
    • Town of Lawrence (Rusk County), Wisconsin;
    • City of Milwaukee, Wisconsin;
    • Town of Thornapple, Wisconsin; and
    • City of Wausau, Wisconsin.

    The Justice Department’s Civil Rights Division will coordinate the effort. Monitors will include personnel from the Civil Rights Division, other department divisions, U.S. Attorney’s Offices and federal observers from the Office of Personnel Management. Throughout Election Day, division personnel will maintain contact with state and local election officials.

    The Civil Rights Division’s Voting Section enforces the civil provisions of federal statutes that protect the right to vote, including the Voting Rights Act, National Voter Registration Act, Help America Vote Act, Uniformed and Overseas Citizens Absentee Voting Act and Civil Rights Acts. The division’s Disability Rights Section enforces the Americans with Disabilities Act (ADA) to ensure that persons with disabilities have a full and equal opportunity to vote. The division’s Criminal Section enforces federal criminal statutes that prohibit voter intimidation and voter suppression based on race, color, national origin or religion.

    On Election Day, Civil Rights Division personnel will be available all day to receive questions and complaints from the public related to possible violations of federal voting rights laws. Reports may be made through the department’s website www.civilrights.justice.gov or by calling toll-free at 800-253-3931.

    Individuals with questions or complaints related to the ADA may call the department’s toll-free ADA information hotline at 800-514-0301 or 833-610-1264 (TTY) or submit a complaint through a link on the department’s ADA website at www.ada.gov.

    Complaints related to any disruptions at a polling place should always be reported to local election officials (including officials based in the polling place). Complaints related to violence, threats of violence or intimidation at a polling place should be reported immediately to local police authorities by calling 911. These complaints should also be reported to the department after local authorities have been contacted.

    More information about voting and elections, including guidance documents and other resources, is available at www.justice.gov/voting. Learn more about the Voting Rights Act and other federal voting laws at www.justice.gov/crt/voting-section.

    MIL OSI USA News –

  • MIL-OSI USA: Former Maryland Police Officer Convicted of Obstruction of Justice Related to Sex with Teen in Custody

    Source: US State of California

    A federal judge this week convicted a former Fairmount Heights, Maryland, police officer on one count of obstructing justice by writing a false police report.

    U.S. District Court Judge Deborah Boardman for the District of Maryland found Martique Vanderpool guilty following a 3-day bench trial that ended on Oct. 24. The judge found that former officer Vanderpool falsified a police report with intent to impede an investigation into an incident on Sept. 6-7, 2019, during which he and another officer arrested a 19-year-old woman and took her in handcuffs to the locked and otherwise-empty Fairmount Heights police station, where the officers uncuffed her and Vanderpool told her to “make this right” before having sex with her while she was in custody.

    “Martique Vanderpool obstructed justice to cover up his own serious police misconduct,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “This former officer’s conduct is a betrayal both of the young woman who was in his care and of the entire law enforcement profession. With this verdict comes accountability for his crime.”

    “When those sworn to uphold the law choose instead to violate it, it undermines the very foundation of our society,” said Assistant Director Chad Yarbrough of the FBI Criminal Investigative Division. “Martique Vanderpool abused his power and violated his oath as a police officer. He betrayed the community that put their trust in him and will now face the consequences of his actions.”

    According to evidence at trial and findings of fact made by the judge, Vanderpool and his partner, former Officer Phillip Dupree arrested the young woman for speeding and learned that she was rushing to get to her young son, who had been injured in an accident. Upon learning that the young woman had only a learner’s permit, Dupree asked her to get out of the car, at which point the young woman had a panic attack and Dupree took her to the ground and handcuffed her. In “an apparent state of mental distress,” the handcuffed young woman ran into the street and then banged her head on the side of the car she had been driving.

    The officers had the car towed from the scene and transported the young woman to the Fairmount Heights police station, even though the station had no holding cell or booking facilities and officers were not supposed to take prisoners there. The officers took the young woman inside, in handcuffs, and then removed the cuffs. Vanderpool told her “We gotta make this right,” and then had sex with her on a couch in the main room of the station. Afterward, the officers drove the young woman to a tow lot where the car, which was registered to someone else, was returned to her.

    According to the judge’s findings, Vanderpool then falsified an incident report to create a misleading impression that the officers and the young woman never left the scene of the traffic stop and that the car was returned to the registered owner. The report purposely omitted that the officers took the young woman from the scene to the police station; that Vanderpool had sex with her; and that the officers caused the car to be towed and later coordinated the release of the car to her. The report also purposely misstated that the car was returned to the registered owner.

    The judge, in finding that the false report was intended to interfere with an investigation that was within the jurisdiction of the FBI, noted that the young woman was a teenager, was slight of build, was in a state of panic, was forced to the ground by an officer, had her car towed, said that she needed to get to her son, was taken in handcuffs to the police station and was told to “make this right.”

    A sentencing hearing is scheduled for Feb. 20, 2025. Vanderpool faces a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

    Vanderpool’s partner, Phillip Dupree, was recently convicted in an unrelated case of committing a federal criminal civil rights violation by using unreasonable force during an unrelated arrest.

    The FBI Baltimore Field Office investigated the case.

    Deputy Chief Bobbi Bernstein and Trial Attorney Tara Allison of the Justice Department’s Civil Rights Division prosecuted the case, with assistance from Trial Attorney Betsy Hutson of the Justice Department’s Civil Rights Division. 

    MIL OSI USA News –

  • MIL-OSI USA: Compound Ingredient Supplier Medisca Inc., to Pay $21.75M to Resolve Allegations of False and Inflated Average Wholesale Prices for Ingredients Used in Compounded Prescriptions

    Source: US State of California

    The Justice Department announced today that Medisca Inc. (Medisca), has agreed to pay $21.75 million to resolve allegations concerning the establishment of false and inflated Average Wholesale Prices (AWPs) for two ingredients used in compound prescriptions. Medisca’s pricing scheme allegedly caused pharmacies that purchased those ingredients to submit false prescription claims to the Defense Health Agency, which administers the TRICARE Program for the Department of Defense and the Department of Labor’s Office of Workers’ Compensation Programs (federal health care programs).

    “We will not tolerate fraudulent pricing schemes targeting health care programs that support veterans and other federal beneficiaries,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “As today’s settlement demonstrates, we will hold accountable not just those who submit false claims, but all who participate in schemes designed to defraud the American taxpayers.”

    Compounding pharmacies purchase ingredients or chemicals from ingredient suppliers, such as Medisca, to prepare and fill compound prescriptions for patients who require a specially made prescription that is not generally available in the marketplace. Medisca knew that compound prescription reimbursement under federal health care programs was based in part on the AWPs it reported to various price listing agencies. The United States alleged that Medisca knowingly inflated the AWPs for resveratrol (NDC No. 38779-2863) and mometasone furoate (NDC No. 38779-2413) in order to increase the reimbursement that its pharmacy customers received from the federal healthcare programs for using those Medisca ingredients.

    Medisca acquired resveratrol from manufacturers for approximately $0.37 per gram. It repackaged and sold resveratrol for under $2 per gram. Medisca reported an AWP for resveratrol at $777 per gram, creating a spread of over $775 for each gram of resveratrol used by a pharmacy customer in a compound prescription reimbursed by the federal healthcare programs. Medisca acquired mometasone furoate from manufacturers for under $8 per gram. It repackaged and sold that ingredient to compound pharmacies for over $1,000 per gram. Medisca reported an AWP for mometasone furoate at over $7,300 per gram, thereby creating a spread of approximately $6,300 for each gram of the ingredient used by a pharmacy customer in a compound prescription reimbursed by the federal healthcare programs.  

    Medisca allegedly used the high AWPs it reported and the resulting profit potential it created for its customers as an inducement to its compound pharmacy customers to purchase those ingredients. Medisca’s alleged fraudulent pricing scheme enabled its pharmacy customers to bill federal healthcare programs inflated amounts – often thousands of dollars per prescription – for compound formulations containing those ingredients.

    “The systems establishing federal reimbursements for compounded pharmaceuticals should not be viewed by companies as an opportunity to artificially inflate reimbursements from federal payors such as TRICARE,” said U.S. Attorney Damien M. Diggs for the Eastern District of Texas. “When companies seek to manipulate the system for their own gain, the Eastern District of Texas will hold them accountable.”

    “When federal healthcare programs are defrauded it hurts all Americans,” said U.S. Attorney Jaime Esparza for the Western District of Texas. “My office is committed to using the False Claims Act (FCA) to hold individuals and companies accountable for the impact their actions have on our critical programs. Taxpayers deserve honest pricing and assurances that the government is never overcharged.”

    “This settlement sends a clear message about the unwavering commitment of the Defense Criminal Investigation Service (DCIS) to protect the integrity of TRICARE, the Department of Defense’s health care benefit program which serves our U.S. military, their family members, and military retirees,” said Acting Special Agent in Charge Ryan Settle of the Department of Defense – Office of Inspector General, DCIS Southwest Field Office. “Health care providers who use fraudulent means to seek financial gain at the expense of TRICARE and the taxpayer will be diligently investigated and held accountable.”

    The settlement resolves claims brought under the whistleblower or qui tam provisions of the FCA by Doug McMakin against Medisca. Mr. McMakin is a pharmacist who owned and operated a compounding pharmacy that dispensed compounded prescriptions. Under the FCA, private parties may sue on behalf of the government for false claims for government funds and receive a share of any recovery. Mr. McMakin will receive $3,425,625 from the proceeds of the settlement. The lawsuit is captioned United States ex rel. McMakin v. Medisca Inc. (EDTX).  

    The resolution of these matters was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorneys’ Offices for the Eastern District of Texas and the Western District of Texas, with investigative support from the DCIS, U.S. Postal Service Office of Inspector General (USPS OIG) and the Department of Labor.  

    The investigation and resolution of these matters illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the FCA. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

    Senior Trial Counsel Sanjay Bhambhani and Trial Attorney John Deck of the Civil Division, Assistant U.S. Attorney Mary Kruger for the Western District of Texas and Assistant U.S. Attorney James Gillingham for the Eastern District of Texas handled the matter, with investigative assistance from Special Agents Nicholas Koechig of DCIS and Timothy Jones of USPS OIG.

    The claims resolved by the settlement are allegations only. There has been no determination of liability.

    Settlement

    MIL OSI USA News –

  • MIL-OSI USA: Justice Department Secures Settlement Agreement with Colorado to Ensure Opportunities for People with Physical Disabilities to Live at Home

    Source: US State of California

    The Justice Department announced today that it secured a settlement agreement to resolve its lawsuit alleging that Colorado violates Title II of the Americans with Disabilities Act (ADA) and the Supreme Court’s decision in Olmstead v. L.C. by unnecessarily segregating adults with physical disabilities, including older adults, in nursing facilities.

    The ADA and the Olmstead decision require state and local governments to administer their services to people with disabilities in the most integrated setting appropriate to their needs. Today’s agreement gives thousands of Coloradans with physical disabilities the opportunity to move out of nursing facilities into the community — or avoid unnecessary nursing facility admission altogether — and receive the services they need at home. Community-based services that can help people live at home include assistance with bathing, dressing, managing medications and preparing meals.

    “People with disabilities should not have to give up their lives in the community and be isolated in nursing facilities to get the services they need,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “This settlement agreement sends the message that people with disabilities deserve the same kinds of lives as others, and makes clear that our family members, friends, and neighbors with disabilities add value to our lives and strengthen our communities when they can receive the services they need right inside their own home.”

    “Today’s resolution will give thousands of Coloradans with physical disabilities the information, resources, and opportunity to live in communities rather than being needlessly isolated. The agreement will also save taxpayer money by reducing state-funded institutionalization,” said Acting U.S. Attorney Matt Kirsch for the District of Colorado. “We commend our Civil Rights Division colleagues for their dedication and focus on this important issue, and we acknowledge the commitments made by the State of Colorado in this agreement.”   

    The department sued Colorado in September 2023, following a multi-year investigation. The lawsuit alleged that the state failed to provide adults with physical disabilities with the services they need to live at home or avoid moving into a nursing facility. In Colorado, most nursing facility residents and their families are unaware that they can receive services like nursing, personal care and housing assistance in the community. As a result, many move into, or remain in, nursing facilities even though they would prefer to live at home.

    To increase community integration for adults with physical disabilities, the state has made significant commitments in this agreement to:

    • Help thousands of nursing facility residents move back to the community;
    • Identify people at risk of unnecessary nursing facility admission to help them stay in their homes with the services they need;
    • Provide people with the information they need to make an informed choice about whether to live in a nursing facility or receive the services they need at home;
    • Connect people more quickly to Medicaid long-term care services in the community;
    • Increase opportunities for people with disabilities to hire and supervise their own caregivers;
    • Support family caregivers;
    • Facilitate prompt transitions to the community for interested nursing facility residents, by reducing administrative bottlenecks and problem-solving common transition barriers; and
    • Expand and improve services that help people find and keep affordable, accessible housing in the community.

    The parties have agreed that the federal district court will retain jurisdiction to enforce the agreement and that an independent monitor will evaluate the state’s compliance.

    Additional information about the Civil Rights Division is available at www.justice.gov/crt.

    Members of the public can report possible civil right violations at www.civilrights.justice.gov.

    MIL OSI USA News –

  • MIL-OSI Security: Court Permanently Stops Texas Professional and Business from Organizing and Selling “Tax Plans”

    Source: United States Attorneys General

    Agreed Order also Bars Professional from Preparing Tax Returns and Business from Preparing Tax Returns Reflecting Certain “Tax Plans”

    The U.S. District Court for the Northern District of Texas entered permanent injunctions today against Charles Dombek and The Optimal Financial Group LLC barring them from promoting any tax plan that involves creating or using sham management companies, deducting personal non-deductible expenses as business expenses or assisting in the creation of “captive” insurance companies. The injunctions also prohibit Dombek from preparing any federal tax returns for anyone other than himself and Optimal from preparing certain federal tax returns reflecting such tax plans. Dombek and Optimal consented to entry of the injunctions.

    According to the government’s complaint, Dombek is a licensed CPA and served as Optimal’s manager and president. Allegedly, Dombek and Optimal promoted a tax scheme throughout the United States to illegally reduce customers’ income tax liabilities by using sham management companies to improperly shift income to be taxed at lower tax rates, improperly defer taxable income or claim personal expenses as bogus business deductions. As alleged by the government, Dombek promoted himself as the “premier dental CPA” in America. The complaint further alleges that in promoting the schemes, Dombek and Optimal made false statements about the tax benefits of the scheme that they knew or had reason to know were false, then prepared and signed tax returns for their customers reflecting the sham transactions, expenses and deductions. The government contended that the total harm to the treasury from the scheme could have been $10 million or more.

    Deputy Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division made the announcement.

    Each year the IRS highlights some of the tax scams that put taxpayers at risk of losing money, personal information, data and more. In the IRS’s most recent list, it specifically warned taxpayers “to beware of promoters peddling bogus tax schemes aimed at reducing taxes or avoiding them altogether.”

    Working with the IRS, the Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters over the past decade. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

    MIL Security OSI –

  • MIL-OSI Security: Readout of Director Rachel Rossi’s Trip to Northern California

    Source: United States Attorneys General 7

    Director Rachel Rossi of the Office for Access to Justice traveled to San Francisco to deliver the keynote address at the Pathways to Justice Conference, a statewide legal services conference held every three years. The engagement included meetings on access to justice issues and initiatives happening in Northern California.

    Opening the visit, Director Rossi participated in a listening session hosted by the California Community Justice Workers Working Group, a group of legal aid and access to justice leaders aiming to leverage professional support from nonlawyers to support legal service providers in delivering legal assistance to underserved and marginalized communities. Director Rossi delivered brief opening remarks and then heard from working group members on its proposed recommendations for a community justice worker program in California. The presentation was followed by a discussion with legal aid leaders from across California.

    Tuesday morning, Director Rossi delivered the keynote address for the Pathways to Justice Conference convened by the State Bar of California, the Legal Aid Association of California and the California Judicial Council. The conference convenes nonprofit legal service providers, private bar pro bono volunteers and staff from court departments and self-help centers from across the state to discuss access to justice topics. In her remarks, Director Rossi highlighted Office for Access to Justice initiatives and focused on the need to foster collaboration between state, local and federal access to justice stakeholders.

    Following the keynote, Director Rossi met with leadership from the Legal Aid Association of California, a statewide membership organization of over 100 legal aid providers. In the meeting, Director Rossi listened to the most pressing issues facing California’s legal aid community and discussed support for efforts to increase interagency collaboration at the state level in the pursuit of access to justice.

    That afternoon, Director Rossi attended a roundtable discussion with Bay Area public defense chiefs and leadership, including from San Francisco, Alameda, Santa Clara, Contra Costa, Sonoma, Solano and Marin County, California offices. Director Rossi shared information about Access to Justice Office resources including the Public Defense Resource Hub and the Legal Aid Interagency Roundtable federal funding digital resource. The discussion included the challenges confronting public defense professionals in Northern California such as lack of resources, caseload and workload challenges, recruitment and retention concerns and the unique resource needs for specialized and effective youth defense representation. The roundtable also touched on best practices and innovative public defense strategies spearheaded across bay area offices, including their advocacy and policy work, creative recruitment strategies and holistic representation models.

    Director Rossi then met with Prisoner Legal Services to discuss their work providing civil legal assistance to individuals incarcerated locally. She highlighted the pilot program launched by the Office for Access to Justice in partnership with the Federal Bureau of Prisons, which similarly provides civil legal services to adults in federal custody, including through the first medical-legal partnership in a federal prison in the United States. They discussed future collaboration and sharing of best practices.

    Director Rossi also met with the Federal Public Defender for the Northern District of California to discuss implementation of the Report and Recommendations Concerning Access to Counsel at the Federal Bureau of Prisons’ Pretrial Facilities, unique issues facing Criminal Justice Act panel attorneys, and other issues facing federal defenders in the district. Closing the trip, Director Rossi met with U.S. Attorney Ismail J. Ramsey for the Northern District of California.

    Director Rossi delivered the keynote address for the 2024 Pathways to Justice Conference in San Francisco. 
    Director Rossi and Bay Area public defense chiefs and leadership.
    Director Rossi and Office for Access to Justice staff met with representatives from Prisoner Legal Services. 

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  • MIL-OSI Security: Justice Department to Monitor Polls in 27 States for Compliance with Federal Voting Rights Laws

    Source: United States Attorneys General 7

    Civil Rights Division Staff Available to Receive Nationwide Reports Throughout Election Day

    The Justice Department announced today that it plans to monitor compliance with federal voting rights laws in 86 jurisdictions in 27 states for the Nov. 5 general election.

    The Justice Department enforces federal voting rights laws that protect the rights of all eligible citizens to access the ballot. The department regularly deploys its staff to monitor for compliance with federal civil rights laws in elections in communities all across the country.

    For the general election, the department will monitor for compliance with federal voting rights laws on Election Day in 86 jurisdictions, including:

    • Bethel Census Area, Alaska;
    • Dillingham Census Area, Alaska;
    • Kusilvak Census Area, Alaska;
    • North Slope Borough, Alaska;
    • Northwest Arctic Borough, Alaska;
    • Apache County, Arizona;
    • Maricopa County, Arizona;
    • Pima County, Arizona;
    • Yuma County, Arizona;
    • San Joaquin County, California;
    • Broward County, Florida;
    • Miami-Dade County, Florida;
    • Orange County, Florida;
    • Osceola County, Florida;
    • Cobb County, Georgia;
    • DeKalb County, Georgia;
    • Fulton County, Georgia;
    • Gwinnett County, Georgia;
    • Macon-Bibb County, Georgia;
    • Jefferson County, Kentucky;
    • Kenton County, Kentucky;
    • City of Everett, Massachusetts;
    • City of Fitchburg, Massachusetts;
    • City of Leominster, Massachusetts;
    • City of Lowell, Massachusetts;
    • City of Malden, Massachusetts;
    • City of Methuen, Massachusetts;
    • City of Quincy, Massachusetts;
    • City of Salem, Massachusetts;
    • Prince George’s County, Maryland;
    • City of Ann Arbor, Michigan;
    • City of Detroit, Michigan;
    • City of Flint, Michigan;
    • City of Grand Rapids, Michigan;
    • City of Hamtramck, Michigan;
    • City of Warren, Michigan;
    • Hennepin County, Minnesota;
    • City of Minneapolis, Minnesota;
    • Ramsey County, Minnesota;
    • Covington County, Mississippi;
    • Scott County, Mississippi;
    • Warren County, Mississippi;
    • City of St. Louis, Missouri;
    • Blaine County, Montana;
    • Alamance County, North Carolina;
    • Mecklenburg County, North Carolina;
    • Wake County, North Carolina;
    • Bergen County, New Jersey;
    • Middlesex County, New Jersey;
    • Union County, New Jersey;
    • Bernalillo County, New Mexico;
    • Cibola County, New Mexico;
    • Clark County, Nevada;
    • Queens, New York;
    • Cuyahoga County, Ohio;
    • Portage County, Ohio;
    • Allegheny County, Pennsylvania;
    • Luzerne County, Pennsylvania;
    • Philadelphia County, Pennsylvania;
    • City of Pawtucket, Rhode Island;
    • City of Providence, Rhode Island;
    • City of Woonsocket, Rhode Island;
    • Charleston County, South Carolina;
    • Bennett County, South Dakota;
    • Jackson County, South Dakota;
    • Minnehaha County, South Dakota;
    • Oglala Lakota County, South Dakota;
    • Atascosa County, Texas;
    • Bexar County, Texas;
    • Dallas County, Texas;
    • Frio County, Texas;
    • Harris County, Texas;
    • Hays County, Texas;
    • Palo Pinto County, Texas;
    • Waller County, Texas;
    • San Juan County, Utah;
    • Hanover County, Virginia;
    • Henrico County, Virginia;
    • Loudoun County, Virginia;
    • City of Manassas, Virginia;
    • City of Manassas Park, Virginia;
    • Prince William County, Virginia;
    • Town of Lawrence (Rusk County), Wisconsin;
    • City of Milwaukee, Wisconsin;
    • Town of Thornapple, Wisconsin; and
    • City of Wausau, Wisconsin.

    The Justice Department’s Civil Rights Division will coordinate the effort. Monitors will include personnel from the Civil Rights Division, other department divisions, U.S. Attorney’s Offices and federal observers from the Office of Personnel Management. Throughout Election Day, division personnel will maintain contact with state and local election officials.

    The Civil Rights Division’s Voting Section enforces the civil provisions of federal statutes that protect the right to vote, including the Voting Rights Act, National Voter Registration Act, Help America Vote Act, Uniformed and Overseas Citizens Absentee Voting Act and Civil Rights Acts. The division’s Disability Rights Section enforces the Americans with Disabilities Act (ADA) to ensure that persons with disabilities have a full and equal opportunity to vote. The division’s Criminal Section enforces federal criminal statutes that prohibit voter intimidation and voter suppression based on race, color, national origin or religion.

    On Election Day, Civil Rights Division personnel will be available all day to receive questions and complaints from the public related to possible violations of federal voting rights laws. Reports may be made through the department’s website www.civilrights.justice.gov or by calling toll-free at 800-253-3931.

    Individuals with questions or complaints related to the ADA may call the department’s toll-free ADA information hotline at 800-514-0301 or 833-610-1264 (TTY) or submit a complaint through a link on the department’s ADA website at www.ada.gov.

    Complaints related to any disruptions at a polling place should always be reported to local election officials (including officials based in the polling place). Complaints related to violence, threats of violence or intimidation at a polling place should be reported immediately to local police authorities by calling 911. These complaints should also be reported to the department after local authorities have been contacted.

    More information about voting and elections, including guidance documents and other resources, is available at www.justice.gov/voting. Learn more about the Voting Rights Act and other federal voting laws at www.justice.gov/crt/voting-section.

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  • MIL-OSI Security: Former Maryland Police Officer Convicted of Obstruction of Justice Related to Sex with Teen in Custody

    Source: United States Attorneys General 7

    A federal judge this week convicted a former Fairmount Heights, Maryland, police officer on one count of obstructing justice by writing a false police report.

    U.S. District Court Judge Deborah Boardman for the District of Maryland found Martique Vanderpool guilty following a 3-day bench trial that ended on Oct. 24. The judge found that former officer Vanderpool falsified a police report with intent to impede an investigation into an incident on Sept. 6-7, 2019, during which he and another officer arrested a 19-year-old woman and took her in handcuffs to the locked and otherwise-empty Fairmount Heights police station, where the officers uncuffed her and Vanderpool told her to “make this right” before having sex with her while she was in custody.

    “Martique Vanderpool obstructed justice to cover up his own serious police misconduct,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “This former officer’s conduct is a betrayal both of the young woman who was in his care and of the entire law enforcement profession. With this verdict comes accountability for his crime.”

    “When those sworn to uphold the law choose instead to violate it, it undermines the very foundation of our society,” said Assistant Director Chad Yarbrough of the FBI Criminal Investigative Division. “Martique Vanderpool abused his power and violated his oath as a police officer. He betrayed the community that put their trust in him and will now face the consequences of his actions.”

    According to evidence at trial and findings of fact made by the judge, Vanderpool and his partner, former Officer Phillip Dupree arrested the young woman for speeding and learned that she was rushing to get to her young son, who had been injured in an accident. Upon learning that the young woman had only a learner’s permit, Dupree asked her to get out of the car, at which point the young woman had a panic attack and Dupree took her to the ground and handcuffed her. In “an apparent state of mental distress,” the handcuffed young woman ran into the street and then banged her head on the side of the car she had been driving.

    The officers had the car towed from the scene and transported the young woman to the Fairmount Heights police station, even though the station had no holding cell or booking facilities and officers were not supposed to take prisoners there. The officers took the young woman inside, in handcuffs, and then removed the cuffs. Vanderpool told her “We gotta make this right,” and then had sex with her on a couch in the main room of the station. Afterward, the officers drove the young woman to a tow lot where the car, which was registered to someone else, was returned to her.

    According to the judge’s findings, Vanderpool then falsified an incident report to create a misleading impression that the officers and the young woman never left the scene of the traffic stop and that the car was returned to the registered owner. The report purposely omitted that the officers took the young woman from the scene to the police station; that Vanderpool had sex with her; and that the officers caused the car to be towed and later coordinated the release of the car to her. The report also purposely misstated that the car was returned to the registered owner.

    The judge, in finding that the false report was intended to interfere with an investigation that was within the jurisdiction of the FBI, noted that the young woman was a teenager, was slight of build, was in a state of panic, was forced to the ground by an officer, had her car towed, said that she needed to get to her son, was taken in handcuffs to the police station and was told to “make this right.”

    A sentencing hearing is scheduled for Feb. 20, 2025. Vanderpool faces a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

    Vanderpool’s partner, Phillip Dupree, was recently convicted in an unrelated case of committing a federal criminal civil rights violation by using unreasonable force during an unrelated arrest.

    The FBI Baltimore Field Office investigated the case.

    Deputy Chief Bobbi Bernstein and Trial Attorney Tara Allison of the Justice Department’s Civil Rights Division prosecuted the case, with assistance from Trial Attorney Betsy Hutson of the Justice Department’s Civil Rights Division. 

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  • MIL-OSI Security: Compound Ingredient Supplier Medisca Inc., to Pay $21.75M to Resolve Allegations of False and Inflated Average Wholesale Prices for Ingredients Used in Compounded Prescriptions

    Source: United States Attorneys General 7

    The Justice Department announced today that Medisca Inc. (Medisca), has agreed to pay $21.75 million to resolve allegations concerning the establishment of false and inflated Average Wholesale Prices (AWPs) for two ingredients used in compound prescriptions. Medisca’s pricing scheme allegedly caused pharmacies that purchased those ingredients to submit false prescription claims to the Defense Health Agency, which administers the TRICARE Program for the Department of Defense and the Department of Labor’s Office of Workers’ Compensation Programs (federal health care programs).

    “We will not tolerate fraudulent pricing schemes targeting health care programs that support veterans and other federal beneficiaries,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “As today’s settlement demonstrates, we will hold accountable not just those who submit false claims, but all who participate in schemes designed to defraud the American taxpayers.”

    Compounding pharmacies purchase ingredients or chemicals from ingredient suppliers, such as Medisca, to prepare and fill compound prescriptions for patients who require a specially made prescription that is not generally available in the marketplace. Medisca knew that compound prescription reimbursement under federal health care programs was based in part on the AWPs it reported to various price listing agencies. The United States alleged that Medisca knowingly inflated the AWPs for resveratrol (NDC No. 38779-2863) and mometasone furoate (NDC No. 38779-2413) in order to increase the reimbursement that its pharmacy customers received from the federal healthcare programs for using those Medisca ingredients.

    Medisca acquired resveratrol from manufacturers for approximately $0.37 per gram. It repackaged and sold resveratrol for under $2 per gram. Medisca reported an AWP for resveratrol at $777 per gram, creating a spread of over $775 for each gram of resveratrol used by a pharmacy customer in a compound prescription reimbursed by the federal healthcare programs. Medisca acquired mometasone furoate from manufacturers for under $8 per gram. It repackaged and sold that ingredient to compound pharmacies for over $1,000 per gram. Medisca reported an AWP for mometasone furoate at over $7,300 per gram, thereby creating a spread of approximately $6,300 for each gram of the ingredient used by a pharmacy customer in a compound prescription reimbursed by the federal healthcare programs.  

    Medisca allegedly used the high AWPs it reported and the resulting profit potential it created for its customers as an inducement to its compound pharmacy customers to purchase those ingredients. Medisca’s alleged fraudulent pricing scheme enabled its pharmacy customers to bill federal healthcare programs inflated amounts – often thousands of dollars per prescription – for compound formulations containing those ingredients.

    “The systems establishing federal reimbursements for compounded pharmaceuticals should not be viewed by companies as an opportunity to artificially inflate reimbursements from federal payors such as TRICARE,” said U.S. Attorney Damien M. Diggs for the Eastern District of Texas. “When companies seek to manipulate the system for their own gain, the Eastern District of Texas will hold them accountable.”

    “When federal healthcare programs are defrauded it hurts all Americans,” said U.S. Attorney Jaime Esparza for the Western District of Texas. “My office is committed to using the False Claims Act (FCA) to hold individuals and companies accountable for the impact their actions have on our critical programs. Taxpayers deserve honest pricing and assurances that the government is never overcharged.”

    “This settlement sends a clear message about the unwavering commitment of the Defense Criminal Investigation Service (DCIS) to protect the integrity of TRICARE, the Department of Defense’s health care benefit program which serves our U.S. military, their family members, and military retirees,” said Acting Special Agent in Charge Ryan Settle of the Department of Defense – Office of Inspector General, DCIS Southwest Field Office. “Health care providers who use fraudulent means to seek financial gain at the expense of TRICARE and the taxpayer will be diligently investigated and held accountable.”

    The settlement resolves claims brought under the whistleblower or qui tam provisions of the FCA by Doug McMakin against Medisca. Mr. McMakin is a pharmacist who owned and operated a compounding pharmacy that dispensed compounded prescriptions. Under the FCA, private parties may sue on behalf of the government for false claims for government funds and receive a share of any recovery. Mr. McMakin will receive $3,425,625 from the proceeds of the settlement. The lawsuit is captioned United States ex rel. McMakin v. Medisca Inc. (EDTX).  

    The resolution of these matters was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorneys’ Offices for the Eastern District of Texas and the Western District of Texas, with investigative support from the DCIS, U.S. Postal Service Office of Inspector General (USPS OIG) and the Department of Labor.  

    The investigation and resolution of these matters illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the FCA. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

    Senior Trial Counsel Sanjay Bhambhani and Trial Attorney John Deck of the Civil Division, Assistant U.S. Attorney Mary Kruger for the Western District of Texas and Assistant U.S. Attorney James Gillingham for the Eastern District of Texas handled the matter, with investigative assistance from Special Agents Nicholas Koechig of DCIS and Timothy Jones of USPS OIG.

    The claims resolved by the settlement are allegations only. There has been no determination of liability.

    Settlement

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  • MIL-OSI Security: Justice Department Secures Settlement Agreement with Colorado to Ensure Opportunities for People with Physical Disabilities to Live at Home

    Source: United States Attorneys General 7

    The Justice Department announced today that it secured a settlement agreement to resolve its lawsuit alleging that Colorado violates Title II of the Americans with Disabilities Act (ADA) and the Supreme Court’s decision in Olmstead v. L.C. by unnecessarily segregating adults with physical disabilities, including older adults, in nursing facilities.

    The ADA and the Olmstead decision require state and local governments to administer their services to people with disabilities in the most integrated setting appropriate to their needs. Today’s agreement gives thousands of Coloradans with physical disabilities the opportunity to move out of nursing facilities into the community — or avoid unnecessary nursing facility admission altogether — and receive the services they need at home. Community-based services that can help people live at home include assistance with bathing, dressing, managing medications and preparing meals.

    “People with disabilities should not have to give up their lives in the community and be isolated in nursing facilities to get the services they need,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “This settlement agreement sends the message that people with disabilities deserve the same kinds of lives as others, and makes clear that our family members, friends, and neighbors with disabilities add value to our lives and strengthen our communities when they can receive the services they need right inside their own home.”

    “Today’s resolution will give thousands of Coloradans with physical disabilities the information, resources, and opportunity to live in communities rather than being needlessly isolated. The agreement will also save taxpayer money by reducing state-funded institutionalization,” said Acting U.S. Attorney Matt Kirsch for the District of Colorado. “We commend our Civil Rights Division colleagues for their dedication and focus on this important issue, and we acknowledge the commitments made by the State of Colorado in this agreement.”   

    The department sued Colorado in September 2023, following a multi-year investigation. The lawsuit alleged that the state failed to provide adults with physical disabilities with the services they need to live at home or avoid moving into a nursing facility. In Colorado, most nursing facility residents and their families are unaware that they can receive services like nursing, personal care and housing assistance in the community. As a result, many move into, or remain in, nursing facilities even though they would prefer to live at home.

    To increase community integration for adults with physical disabilities, the state has made significant commitments in this agreement to:

    • Help thousands of nursing facility residents move back to the community;
    • Identify people at risk of unnecessary nursing facility admission to help them stay in their homes with the services they need;
    • Provide people with the information they need to make an informed choice about whether to live in a nursing facility or receive the services they need at home;
    • Connect people more quickly to Medicaid long-term care services in the community;
    • Increase opportunities for people with disabilities to hire and supervise their own caregivers;
    • Support family caregivers;
    • Facilitate prompt transitions to the community for interested nursing facility residents, by reducing administrative bottlenecks and problem-solving common transition barriers; and
    • Expand and improve services that help people find and keep affordable, accessible housing in the community.

    The parties have agreed that the federal district court will retain jurisdiction to enforce the agreement and that an independent monitor will evaluate the state’s compliance.

    Additional information about the Civil Rights Division is available at www.justice.gov/crt.

    Members of the public can report possible civil right violations at www.civilrights.justice.gov.

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  • MIL-OSI Security: Georgia CPA Sentenced in Syndicated Conservation Easement Tax Scheme

    Source: United States Attorneys General 7

    Defendant Helped Clients File Tax Returns Claiming $14M in False Deductions, Causing Nearly $5M in Loss to the IRS

    A Georgia accountant was sentenced today to 28 months in prison for his role in the promotion and sale of abusive syndicated conservation easement tax shelters.

    According to court documents and statements made in court, Herbert Lewis was a CPA and return preparer at an Atlanta-based accounting firm. Beginning at least in 2014 and through at least 2019, Lewis promoted and sold tax deductions to his wealthy clients in the form of units in illegal syndicated conservation easement tax shelters organized and created by co-defendants Jack Fisher, James Sinnott and others.

    According to court documents and statements made in court, Lewis also knew that, contrary to law, the transactions related to these illegal tax shelters lacked economic substance, that his wealthy clients participated only to obtain a tax deduction and that his clients received only a tax benefit for their participation in the shelters. For example, the scheme entailed the creation of partnerships that would purchase land and land-owning companies and then donate conservation easements over that land or the land itself. A client who purchased units in one of these partnerships had a “vote” ostensibly on what to do with the land the partnership owned. However, Lewis knew that the vote held by the partnership each year was just for optics and that the land invariably would be donated largely as a conservation easement.

    In some cases, in order to make it appear that his clients had joined the partnerships before the date of the conservation easement donation, which was necessary to claim the tax benefits, Lewis also instructed and caused his clients to falsely backdate documents — such as subscription agreements and checks — related to the partnerships. In 2019 alone, Lewis assisted 15 clients with claiming false deductions on their 2018 returns.

    In total, Lewis assisted in the preparation of tax returns that claimed nearly $14 million in false deductions based on backdated documents, causing a tax loss to the IRS of nearly $5 million.   

    Lewis earned over $1 million in commissions for his role in promoting and selling the illegal tax shelters to clients. Lewis also concealed the amount of commissions he had earned from selling units in these shelters by not fully reporting the commissions on his personal returns and instead fraudulently reporting commission income he had earned as income on the tax returns of nominee entities in his children’s names.

    In addition to his prison sentence, U.S. District Court Judge Timothy C. Batten Sr. for the Northern District of Georgia ordered Lewis to serve three years of supervised release and to pay $4,878,990.90 in restitution.

    Nine additional defendants have previously pleaded guilty to criminal conduct related to the syndicated conservation easement tax shelter scheme. These other defendants include appraiser Walter Douglas “Terry” Roberts, accountant Stein Agee, CPA Corey Agee, CPA Ralph Anderson, CPA James Benkoil, CPA Victor Smith, CPA William Tomasello, CPA and attorney Randall Lenz and attorney Vi Bui.

    Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division, U.S. Attorney Ryan K. Buchanan for the Northern District of Georgia and IRS Criminal Investigation Chief Guy Ficco made the announcement. They also thanked U.S. Attorney Dena J. King for the Western District of North Carolina for her office’s assistance.

    IRS Criminal Investigation and the U.S. Postal Inspection Service investigated the case.

    Trial Attorneys Richard M. Rolwing, Parker Tobin, Jessica Kraft and Nicholas J. Schilling Jr. of the Justice Department’s Tax Division and Assistant U.S. Attorney Christopher Huber, Deputy Chief of the Complex Frauds Section of the Northern District of Georgia, are prosecuting the case.

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  • MIL-OSI Security: Lyft to Pay Civil Penalty to Resolve Allegations of Misleading Drivers About Their Potential Earnings

    Source: United States Attorneys General 7

    The Justice Department, together with the Federal Trade Commission (FTC), today announced that Lyft Inc. (Lyft) has agreed to resolve allegations that it made false and misleading statements about how much Lyft drivers would earn. The settlement includes an agreement to pay $2.1 million in civil penalties and a permanent injunction prohibiting such false and misleading earnings claims.

    Lyft operates a mobile app ride-hailing platform that connects consumers seeking rides with those who provide rides with their own personal vehicles. Through marketing campaigns and advertisements, Lyft recruits drivers. After a driver is hired, Lyft sets the rates the driver charges and collects a portion of the fare for each ride. In a civil complaint filed in the U.S. District Court for the Northern District of California, the government alleges that, as early as 2021, Lyft made false and misleading claims in its advertising and marketing regarding potential earnings and incentives to be earned by drivers who signed up to drive for Lyft. Lyft allegedly continued these practices even after it received a Notice of Penalty Offenses in October 2021 that placed the company on notice that false and misleading earnings claims were unlawful.

    The complaint alleges that Lyft disseminated advertisements promoting specific hourly amounts that drivers throughout the United States could earn. The company, however, did not disclose that the potential hourly amounts were based on the earnings of the top 20% of its drivers. The complaint also further alleges that Lyft also tried to induce drivers to offer more rides by promoting “earnings guarantees,” which guaranteed that drivers would be paid a set amount if they completed a specific number of rides in a certain time. These guarantees allegedly did not clearly disclose that drivers were paid only the difference between what they otherwise earned for the rides and Lyft’s advertised guaranteed amount, rather than receiving the full guaranteed amount in addition to their regular earnings for the rides.

    In the stipulated order entered today by the federal district court, Lyft is required to pay a $2,100,000 civil penalty. The order also enjoins Lyft from making any misrepresentations regarding driver earnings and includes other monitoring and reporting provisions aimed at promoting Lyft’s compliance with the order.

    “The Justice Department will vigorously enforce the law to stop companies from misleading Americans about their potential earnings in the gig economy,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will continue to work with the FTC to stop unfair and deceptive marketing practices.”

    “Lyft drivers deserve accurate information about how much they will be paid for the work they do,” said Director Samuel Levine of the FTC’s Bureau of Consumer Protection. “Our settlement with Lyft bans exaggerated earnings claims and underscores the FTC’s commitment to ensuring gig workers are treated fairly.”

    Trial Attorney Paulina Stamatelos and Assistant Director Zachary Dietert of the Civil Division’s Consumer Protection Branch, Assistant U.S. Attorney Ekta Dharia for the Northern District of California and Abdiel Lewis and Evan Rose of the FTC’s Bureau of Consumer Protection handled the matter.

    For more information about the Consumer Protection Branch and its enforcement efforts, visit www.justice.gov/civil/consumer-protection-branch. For more information about the FTC, visit www.FTC.gov.

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  • MIL-OSI Security: Jury Convicts San Diego Man in $35 Million Dollar Securities Fraud and COVID-Relief Fraud Scheme

    Source: Office of United States Attorneys

    SAN DIEGO – After an eight-day trial, a federal jury has convicted Denny Thakorbhai Bhakta on all 25 counts of securities fraud, bank fraud and money laundering in connection with a $35 million dollar investment fraud scheme and COVID-relief fraud scheme.

    Bhakta’s uncle, who was swindled out of $4.5 million, testified during the trial that he came to the U.S. as an immigrant, with only a suitcase and $8 in his pocket, and because of the defendant, he “lost everything he had worked for in 57 years in America. Everything.” Bhatka’s fraud scheme targeting numerous victims, including a childhood friend who lost hundreds of thousands of dollars; a friend of his family who lost $1.6 million; a high school classmate and her father who together lost more than $800,000; a cousin who lost $40,000; and an 88-year-old investor who was defrauded out of  $50,000.

    “This sophisticated scheme unraveled after several victims came forward and exposed the fraud,” said U.S. Attorney Tara McGrath. “Many of the victims are people who represent the best of us—hard working, honest Americans who made investments based on a trusted relationship. The jury’s verdict is a resounding affirmation that justice will prevail over deceit.”

    The evidence at trial showed Bhakta solicited investors in his companies Fusion Hotel Management LLC and Fusion Hospitality Corporation (collectively “Fusion”). Between at least 2016 and up to 2021, Bhakta falsely told investors that Fusion routinely acquired discounted blocks of hotel rooms from Hilton, which Fusion then sold to United Airlines and other companies at a higher price for a significant profit. To support these lies, Bhakta provided fabricated bank statements, fake contracts, and profit and loss statements purporting to show millions in revenue and profit. Instead of buying blocks of hotel rooms with investors’ funds, however, Bhakta used the money he obtained from investors for gambling, to make Ponzi-style payments to other investors, and to pay for Bhakta’s personal expenses, including a Mercedez-Benz S-Class and a Porsche 911 Turbo S.

    During the trial, prosecutors introduced evidence that Bhakta was flown into Las Vegas on the Wynn private jet and in just one 7.5-hour gambling binge in 2018, Bhakta lost $1 million at the Wynn Las Vegas. Through casino records, prosecutors demonstrated how Bhakta repeatedly took investors’ money straight to casinos and gambled (and lost) millions of dollars of investor money.

    As prosecutors argued at trial, in 2020, Bhakta doubled down on the fraud. Through the Paycheck Protection Program (“PPP”), Bhakta applied for 18 separate PPP loans totaling $4.4 million. To fraudulently obtain the PPP loans, and unbeknownst to his victim/investors, Bhakta created fake W-2 and other IRS documents and used the names and personally identifying information of his victim-investors to claim them as employees of Fusion and other entities under Bhakta’s control.  Bhakta used the more than $4.4 million he received in PPP loans to keep the Ponzi scheme going and to continue gambling and losing money at casinos.

    Bhakta was remanded into custody after the jury’s verdict. A sentencing hearing is set for January 25, 2025, at 9:00 a.m. in Courtroom 4D.

    This case is being prosecuted by Assistant U.S. Attorneys Kevin Mokhtari and Eric Olah.

    The Securities and Exchange Commission has also take civil action against the defendant.

    DEFENDANTS                                             Case Number 21cr3352-JLS                            

    Denny Thakorbhai Bhakta                             Age: 42                                   San Diego, CA

    SUMMARY OF CHARGES

    Securities Fraud—Title 15, U.S.C. §§ 78j(b), 78ff; Title 17, C.F.R. § 240.10b-5

    Maximum penalty:  Twenty years in prison and $5 million fine

    Bank Fraud—Title 18, U.S.C., Section 1344(2)

    Maximum penalty:  Thirty years in prison and $1 million fine

    Money Laundering– Title 18, U.S.C., Section 1957

    Maximum penalty: Ten years in prison and fine twice the amount of the criminally derived property involved in the transaction

    INVESTIGATING AGENCIES

    Federal Bureau of Investigation

    U.S. Securities and Exchange Commission, Los Angeles Regional Office

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  • MIL-OSI Security: Marathon County Man Sentenced for Illegally Possessing a Firearm

    Source: Office of United States Attorneys

    MADISON, WIS. – Timothy M. O’Shea, United States Attorney for the Western District of Wisconsin, announced that Shawn Hignite, Sr., 50, Weston, Wisconsin, was sentenced today by U.S. District Judge William M. Conley to 3 years in federal prison for possessing a firearm as a felon. The prison term will be followed by 3 years of supervised release. Hignite pleaded guilty to this charge on August 1, 2024.

    On January 30, 2024, police responded to a domestic incident involving a gunshot. When they arrived, police made contact with Hignite, who initially denied there was a gunshot. Police later obtained a search warrant and located a loaded handgun inside the house and a spent shell casing in the backyard. Hignite later admitted that the gun belonged to him and that he fired it that night. Hignite is legally prohibited from possessing firearms or ammunition due to prior felony convictions.

    At sentencing, Judge Conley acknowledged the dismal history of Hignite consuming alcohol and committing crimes. He noted that Hignite’s last 30 years have been plagued by poor decision making with either a fascination or compulsion with possessing firearms. Judge Conley expressed disappointment with the pattern of firearms being present in each of Hignite’s prior offenses. He also expressed hope that the sentence would deter Hignite from committing offenses in the future.

    The charge against Hignite was the result of an investigation conducted by the Federal Bureau of Investigation, Everest Metro Police Department, Rothschild Police Department, and Marathon County Sheriff’s Department. The ATF Madison Crime Gun Task Force also investigated the case. The task force consists of federal agents from ATF and Task Force Officers (TFOs) from local agencies including the Dane County and Clark County Sheriff’s Offices and the Fitchburg, Madison, Sun Prairie, and La Crosse Police Departments. Assistant U.S. Attorney Steven Ayala prosecuted this case.

    This case has been brought as part of Project Safe Neighborhoods (PSN), the U.S. Justice Department’s program to reduce violent crime. The PSN approach emphasizes coordination between state and federal prosecutors and all levels of law enforcement to address gun crime, especially felons illegally possessing firearms and ammunition and violent and drug crimes that involve the use of firearms.

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  • MIL-OSI Security: Madison Man Sentenced to 3 Years for Illegally Possessing a Firearm

    Source: Office of United States Attorneys

    MADISON, WIS. – Timothy M. O’Shea, United States Attorney for the Western District of Wisconsin, announced that Tyez D. D. Boyd, 27, Madison, Wisconsin, was sentenced today by Chief U.S. District Judge James D. Peterson to 3 years in federal prison for possessing a firearm as a felon. The prison term will be followed by 3 years of supervised release. Boyd pleaded guilty to this charge on August 14, 2024.

    On November 17, 2022, Madison Police Department officers stopped a vehicle in Madison on suspicion that its occupants were engaged in drug trafficking. Officers had intercepted a phone call earlier in the day between the front seat passenger, Davonte King, and a known fentanyl pill dealer setting up a drug deal. Tyez Boyd was a passenger in the rear seat.

    Officers took King out of the vehicle and found he was in possession of fentanyl pills, cocaine, and over $1,000 in cash. Officers also found a loaded Taurus 9mm handgun under the front passenger seat where King had been seated. King is prohibited from legally possessing firearms because of a prior felony conviction.

    Officers searched Boyd after he got out of the vehicle and found a loaded Kahr .45 caliber handgun in his pocket. Boyd is prohibited from legally possessing firearms because of multiple prior felony convictions. At the time of the stop, Boyd was on state probation for two cases, one involving a strangulation conviction and one involving a domestic violence conviction. Boyd also had three open criminal cases at the time, each of which involved acts of violence. Boyd had two active warrants for his arrest as well. His state probation has since been revoked and he was sentenced to 18 months in state prison on January 27, 2023.

    At sentencing, Judge Peterson said Boyd’s possession of a firearm was dangerous by itself, especially when he was carrying it into a dangerous situation with a drug trafficker. Judge Peterson found Boyd’s case was aggravated by his criminal history, which included instances of domestic violence, as well as his history of noncompliance while on supervision. Finally, Judge Peterson said this crime deserved a 4-year sentence but reduced that sentence for time he had already served on his multiple state revocation sentences.

    Co-defendant Davonte King pleaded guilty to possessing fentanyl intended for distribution and possessing a firearm in furtherance of a drug trafficking crime and was sentenced by Judge Peterson on September 5, 2024, to 7 years in federal prison.

    The charges against Boyd and King were the result of an investigation conducted by the U.S. Postal Inspection Service, Drug Enforcement Administration, IRS Criminal Investigations, Wisconsin Department of Justice Division of Criminal Investigation, and Dane County Narcotics Task Force. The ATF Madison Crime Gun Task Force also investigated the case. The task force consists of federal agents from ATF and Task Force Officers (TFOs) from local agencies including the Dane County and Clark County Sheriff’s Offices and the Fitchburg, Madison, Sun Prairie, and La Crosse Police Departments. The Dane County District Attorney’s Office assisted with the investigation. Assistant U.S. Attorney Steven P. Anderson prosecuted this case.

    This case has been brought as part of Project Safe Neighborhoods (PSN), the U.S. Justice Department’s program to reduce violent crime. The PSN approach emphasizes coordination between state and federal prosecutors and all levels of law enforcement to address gun crime, especially felons illegally possessing firearms and ammunition and violent and drug crimes that involve the use of firearms.

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  • MIL-OSI Security: Eau Claire Man Sentenced to 2 Years for Trafficking Fentanyl and Methamphetamine

    Source: Office of United States Attorneys

    MADISON, WIS. – Timothy M. O’Shea, United States Attorney for the Western District of Wisconsin, announced that Mario R. Aviles, 27, Eau Claire, Wisconsin, was sentenced October 30, 2024 by U.S. District Judge William M. Conley to 2 years in federal prison for distributing fentanyl and methamphetamine. That prison term will be followed by 3 years of supervised release. Aviles pleaded guilty to this charge on July 16, 2024.

    The government’s investigation revealed that Hector Jimenez-Sosa was the leader of a methamphetamine, fentanyl, and cocaine trafficking organization in Eau Claire, Wisconsin. He received large quantities of controlled substances through the mail from his sources in California. Between August and October 2023, law enforcement officers purchased methamphetamine and fentanyl pills from Jimenez-Sosa and his associates on multiple occasions using a confidential informant. The drug sales took place at two workshops operated by Jimenez-Sosa.

    Aviles, Jimenez-Sosa’s nephew, was identified as an important member of Jimenez-Sosa’s organization. Aviles sold drugs himself and was also present when Jimenez-Sosa sold drugs. For example, on September 19, 2023, a confidential informant purchased 60 grams of methamphetamine and 20 fentanyl pills from Aviles at Jimenez-Sosa’s shops in Eau Claire. On October 3, 2023, the confidential informant purchased an additional 20 fentanyl pills from Aviles at one of Jimenez-Sosa’s shops. During that drug sale, the confidential informant and Aviles talked about the prior methamphetamine sale as well as a potential future deal for a larger quantity of methamphetamine.

    On December 8, 2023, Jimenez-Sosa was arrested at his residence and Aviles was arrested at one of Jimenez-Sosa’s shops. Search warrants were executed at Jimenez-Sosa’s residence and shops. Officers located cocaine, marijuana, ammunition, and drug trafficking supplies.

    At sentencing, Judge Conley noted that Aviles’ growing contribution to his uncle’s drug trafficking organization was significant and he arrived at the sentence after weighing Aviles’ conduct against his lack of prior criminal record among other mitigating factors.

    Co-defendant Hector Jimenez-Sosa pleaded guilty to distributing 50 grams or more of methamphetamine and was sentenced by Judge Conley on September 25, 2024, to 10 years in federal prison.

    The charges against Aviles and Jimenez-Sosa were the result of an investigation conducted by the West Central Drug Task Force, Eau Claire Police Department, Eau Claire County Sheriff’s Department, Drug Enforcement Administration, and United States Postal Inspection Service. The Eau Claire County District Attorney’s Office also assisted with the investigation. Assistant U.S. Attorney Steven P. Anderson prosecuted this case.

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