Federal Officers in Arizona Indicted in Fraud and Bribery Scheme

Federal Officers in Arizona Indicted in Fraud and Bribery Scheme

TUCSON, Ariz., July 17 /PRNewswire-USNewswire/ -- A 47-count indictment was unsealed today charging U.S. Immigration and Customs Enforcement Special Agent Michael J. Kittson, 34, and U.S. Border Patrol Officer Douglas R. Bothof, 41, both of Tucson, with conspiracy, theft of government money, wire fraud and bribery. Kittson and Bothof surrendered without incident this morning to special agents with the Department of Homeland Security Office of Inspector General (DHS-OIG) and will make their initial appearance at 2 p.m. today in U.S. District Court in Tucson.

U.S. Attorney Diane J. Humetewa stated, "Law enforcement officers have sworn to uphold and enforce the law. Those officers who violate the public's trust will be thoroughly investigated and appropriately charged."

Department of Homeland Security, Office of Inspector General, Special Agent-in-Charge Kirk Beauchamp stated, "The Office of Inspector General will continue to be committed to working with our law enforcement partners to identify and aggressively investigate all allegations of corruption to protect our borders and the integrity of DHS personnel, programs, and operations."

The indictment alleges that Kittson, Bothof, and a third officer authorized the fraudulent charging of Border Patrol credit cards for $55,479 in personal goods and services, including paint and body work, tires, exhaust systems, programmers and other work on their personal vehicles, tool boxes, tools, children's mini-motorcycles, thousands of dollars in gift cards, numerous pairs of expensive sunglasses, expensive ATV helmets and services to vehicles belonging to relatives and friends.

Three co-conspirators have pleaded guilty to their participation in the scheme. On April 30, 2009, former Customs Patrol Officer Curtis W. Heim pleaded guilty to an information charging theft of government money. On June 15, 2009, Dustin Curley, a former employee of the automotive repair shop where part of the scheme occurred, pleaded guilty to an information charging misprision of a felony. On June 19, 2009, Jack Lundell, the former manager of the same automotive repair shop, pleaded guilty to an information charging aiding and abetting theft of government money. The investigation revealed the company Lundell and Curley worked for had no knowledge or involvement in the illegitimate activities of its employees. Heim, Curley and Lundell are released on bond and will be sentenced by U.S. District Judge Frank R. Zapata at a later date.

A conviction for conspiracy carries a maximum penalty of five years in federal prison, a $250,000 fine or both; for theft government money a maximum penalty of 10 years, a $250,000 fine or both; for wire fraud a maximum penalty of 20 years, a $250,000 fine or both; and for bribery a maximum penalty of 15 years, a $250,000 fine or both.

The investigation preceding the indictment was conducted by DHS-OIG, with assistance from the U.S. Border Patrol and U.S. Immigration and Customs Enforcement. The prosecution is being handled by Mary Sue Feldmeier, Assistant U.S. Attorney, District of Arizona, Tucson.

The public is reminded that all persons charged with a crime are presumed innocent unless and until proven guilty.

Source: U.S. Department of Justice

CONTACT: Sandy Raynor, Public Affairs Officer, U.S. Department of
Justice, +1-602-514-7625

Web Site: http://www.usdoj.gov/

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Profile: social-developments

Georgia Temp Company and Its Owner/President Agree to Plead Guilty to Making a False Statement to the U.S. Small Business Administration

Georgia Temp Company and Its Owner/President Agree to Plead Guilty to Making a False Statement to the U.S. Small Business Administration

WASHINGTON, July 17 /PRNewswire-USNewswire/ -- A Georgia temporary staffing company and its owner/president have agreed to plead guilty to making a false statement to the U.S. Small Business Administration (SBA), the Department of Justice announced today.

Patriot Services Inc. and its owner/president, Stephanie Blackmon, have each agreed to plead guilty to a one-count charge of making a false statement to the SBA, which was filed today in U.S. District Court in Kansas City, Kan. Patriot supplies temporary staffing services to various agencies and departments of the U.S. government at various locations throughout the United States. Under the separate plea agreements, which are subject to court approval, Patriot and Blackmon have agreed to cooperate with the Department's ongoing investigation.

Blackmon admitted to providing false information to the SBA so that Patriot could qualify for certification under Section 8(a) of the Small Business Act, a designation given to businesses owned and operated by socially and economically disadvantaged persons. Specifically, Blackmon concealed the involvement of her former employer, who was not a socially and economically disadvantaged person, in the management and operations of Patriot because revealing his involvement would have compromised Patriot's chances of receiving 8(a) certification. By securing 8(a) certification, Patriot qualified for government contracts specifically set aside for 8(a) companies.

According to court documents, Blackmon purchased and became the president of Patriot in November 2003. Although Blackmon was the actual owner/president of Patriot, she was primarily a figurehead whose status as an African-American was used to obtain 8(a) certification for Patriot, thereby enabling Patriot, and her former employer, to obtain government 8(a) set-aside contracts. In fact, Patriot was actually controlled and operated by her former employer and others, who operated another temporary staffing company that was not eligible for the 8(a) program. Blackmon's status as a service-disabled veteran also was used by Patriot to try to secure government contracts.

Although Blackmon knew that her former employer and others were actually running Patriot, she concealed their involvement so that the company could secure 8(a) certification. SBA regulations prohibit a former employer of any disadvantaged owner of an 8(a) applicant company from being involved in the management of the applicant company unless the SBA determines that the former employer does not have actual control of the applicant company or the potential to control the applicant company. Based in part on Blackmon's misrepresentations, the SBA granted Patriot 8(a) status in November 2006. Shortly thereafter, Patriot entered into three 8(a) contracts to provide temporary staffing services to the Department of Veterans Affairs (VA) Consolidated Mail Outpatient Pharmacy (CMOP) in Leavenworth, Kan., one of seven such VA pharmacies throughout the nation that process and distribute medical prescriptions to veterans. Those contracts were valued at approximately $5.4 million.

Blackmon faces a maximum sentence of two years in prison and a fine of $5,000 for the false statement charge and Patriot faces a maximum fine of $5,000.

Today's charges stem from an ongoing investigation into fraudulent conduct involving contract operations at CMOPs in Hines, Ill., and Leavenworth, Kan. On July 24, 2008, Joel M. Gostomelsky, the director of the Hines CMOP, pleaded guilty to conspiracy and to accepting illegal gratuities in connection with awarding temporary staffing and supply contracts. On May 5, 2009, the associate director of the Hines CMOP, William J. Brandt, his wife, Esperana A. Brandt, and her company, Pronto Staffing Inc. each pleaded guilty to being part of a conspiracy to commit wire fraud in connection with a scheme to defraud the VA and the SBA. William Brandt also pleaded guilty to wire fraud.

Today's charges reflect the Department's commitment to protecting U.S. taxpayers from procurement fraud through its creation of the National Procurement Fraud Task Force. The National Procurement Fraud Initiative, announced in October 2006, is designed to promote the early detection, prosecution and prevention of procurement fraud associated with the increase in contracting activity for national security and other government programs.

The ongoing investigation into fraudulent conduct involving the VA's CMOPs is conducted jointly by the Department of Justice Antitrust Division's Chicago Field Office and the VA's Office of Inspector General, with assistance from the SBA's Office of Inspector General; the Department of Defense, Criminal Investigative Service; and the U.S. Secret Service.

Anyone with information concerning bid rigging, fraud, kickbacks, bribery or other crimes relating to violations of federal procurement laws meant to foster competition concerning any of the VA CMOPs should contact the Chicago Field Office of the Antitrust Division at 312-353-7530 or the VA's Office of Inspector General at 1-800-488-8244. Anyone with information about fraud in any SBA program should contact the SBA's Office of Inspector General at 1-800- 767-0385 or www.sba.gov/ig/.

Source: U.S. Department of Justice

CONTACT: U.S. Department of Justice, +1-202-514-2007, TDD,
+1-202-514-1888

Web Site: http://www.usdoj.gov/

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Actuaries: Health Care Reform Must Address Costs

Actuaries: Health Care Reform Must Address Costs

WASHINGTON, July 17 /PRNewswire-USNewswire/ -- The American Academy of Actuaries is calling on all health care reform stakeholders to revisit cost issues considering recent reports that have questioned the sustainability of new legislation.

"Especially given the Congressional Budget Office's (CBO) most recent estimates, all stakeholders must engage in a new dialogue to establish mutual understanding as to what will lead to real and quantifiable health cost savings," said Al Bingham, Jr., the American Academy of Actuaries vice president for health issues.

Bingham said the actuaries believe that a new dialogue, and subsequent legislation, must strive for a cost-savings program that is achievable, credible and "score-able."

"Unless health care spending is controlled, health reforms to reduce the number of uninsured will not achieve their goals," Bingham said. "If health spending continues to grow at the projected pace, health insurance premiums will continue to increase as well. Thus efforts to rein in health insurance premiums will be negated if rising health spending drives premiums to their original levels within a few years and even higher thereafter."

In addition to reemphasizing the need to create a sustainable health care system by addressing spending growth through the ongoing reform process, the American Academy of Actuaries has advised policymakers that in order for insurance markets to be viable, they must attract a broad cross section of risks and that market competition requires a level playing field. These concepts are expanded upon in written testimony filed with the U.S. House of Representatives Committee on Ways and Means, available at: http://actuary.org/pdf/health/health_systems_june09.pdf.

For more information or to schedule an interview with Al Bingham, Jr., please contact Andrew Simonelli, assistant director of communications for the American Academy of Actuaries, at 202.785.7872. For more information on the Academy, please visit: www.actuary.org.

The American Academy of Actuaries is a 16,000-member professional association whose mission is to serve the public on behalf of the U.S. actuarial profession. The Academy assists public policymakers on all levels by providing leadership, objective expertise, and actuarial advice on risk and financial security issues. The Academy also sets qualification, practice, and professionalism standards for actuaries in the United States.

Source: American Academy of Actuaries

CONTACT: Andrew Simonelli of the American Academy of Actuaries,
+1-202-785-7872, simonelli@actuary.org

Web Site: http://www.actuary.org/

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Prison Sentence For Cosco Busan Pilot

Prison Sentence For Cosco Busan Pilot

Pilot Sentenced to Serve 10 Months in Federal Prison

WASHINGTON, July 17 /PRNewswire-USNewswire/ -- John Joseph Cota, the pilot who caused the Cosco Busan, a 900-foot long container ship, to collide with the San Francisco Bay Bridge and discharge approximately 53,000 gallons of oil into San Francisco Bay, was today sentenced to serve 10 months in federal prison by U.S. District Court Judge Susan Illston for the Northern District of California, the Justice Department announced.

Cota, who was a licensed bar pilot at the time of the collision, gave commands that caused the 65,131-ton Hong Kong-registered ship to collide with the bridge on Nov. 7, 2007.

Cota was sentenced according to an agreement in which he pleaded guilty to negligently causing discharge of a harmful quantity of oil in violation of the Clean Water Act (CWA), as amended by the Oil Spill Act of 1990 - a law passed in the wake of the 1989 Exxon Valdez disaster - and to violating the Migratory Bird Treaty Act, by causing the death of protected species of migratory birds.

In papers filed in court, prosecutors told the judge that Captain Cota should receive a sentence of incarceration because he was "guilty of far more than a mere slip-up or an otherwise innocuous mistake that yielded unforeseeably grave damage. Rather, he made a series of intentional and negligent acts and omissions, both before and leading up to the incident that produced a disaster that, as widespread as it was, could have had even worse consequences."

"Captain Cota abandoned ship by not following required safety procedures which then resulted in an environmental disaster" said John C. Cruden, Acting Assistant Attorney for the Justice Department's Environment and Natural Resources Division.

"The court's sentence of John Cota should serve as a deterrent to shipping companies and mariners who think violating the environmental laws that protect our nation's waterways will go undetected or unpunished," said Joseph P. Russoniello, U.S. Attorney for the Northern District of California. "They will be vigorously prosecuted."

Prosecutors provided the court with a list of Cota's errors that included the following:

Captain Cota left in extreme fog that was so thick that the bow of the vessel was not visible from the bridge. Captain Cota made the decision to leave in the fog while the pilots of six other large commercial vessels decided not to depart in the heavy fog which was less than 0.5 nautical miles.

Having made the decision to leave port in impenetrable fog, Captain Cota took no action to assure the fortification of the bridge or bow watch or review the passage plan with the master and crew of the Cosco Busan. In particular, Cota failed to have a master-pilot exchange to review the transit plan.

Captain Cota has subsequently claimed that he found both radar unreliable, but he did not notify the master or the Coast Guard that a required piece of equipment needed to safely navigate the ship had failed. Meanwhile, the captured images of the radar retained on the ship's computer show that the radar was fully operational.

The tape recorded conversations from the ship's bridge show that Captain Cota was confused regarding the operation of the electronic chart system upon which he chose to rely including the meaning of 2 red triangles that marked buoys marking the tower of the bridge that he eventually hit.

At no time during the voyage after leaving the berth at 8:07 a.m. and prior to 8:30 a.m. did Captain Cota, or any of the ship's crew, consult the ship's official paper navigational chart or take a single positional fix. Captain Cota did not ask any crew member to take any fixes or verify the ship's position despite the lack of visibility. After the incident, Cota told the Coast Guard he did not request fixes because it is like "driving your car out of a driveway."

Prosecutors also filed papers showing that Captain Cota had failed to disclose his medical conditions and prescription drug use on required annual forms submitted to the Coast Guard.

The discharge of heavy fuel oil from the Cosco Busan fouled 26 miles of shoreline, killed more than 2,400 birds of about 50 species, temporarily closed a fishery on the bay, and delayed the start of the crab-fishing season. Monetary damages to the bridge, ship and private parties were in the tens of millions of dollars. Clean-up costs have been estimated to exceed $70 million. The birds killed include Brown Pelicans, Marbled Murrelets and Western Grebes. The Brown Pelican is a federally endangered species and the Marbled Murrelet is a federally threatened species and an endangered species under California law.

Cota was licensed by the Coast Guard and California as a Bar Pilot, according to the indictment. He was a member of the San Francisco Bar Pilots and had been employed in the San Francisco Bay since 1981. In California, large ocean-going vessels are required to be piloted when entering or leaving port.

The grand jury indictment also charges Fleet Management Limited (Hong Kong), a ship management firm, with the same alleged offenses as well as false statements and obstruction of justice charges. Trial in that case is set for Sept. 14, 2009. An indictment is merely an accusation. All defendants are presumed innocent until proven guilty at trial beyond a reasonable doubt.

The investigation has been conducted by the Coast Guard Investigative Service, the EPA Criminal Investigation Division, the Federal Bureau of Investigation, the U.S. Fish and Wildlife Service and the California Department of Fish and Game, Office of Spill Prevention and Response.

The case is being prosecuted by Assistant U.S. Attorneys Stacey Geis and Jonathan Schmidt and Special Assistant U.S. Attorney Christopher Tribolet of the U.S. Attorney's Office for the Northern District of California, and Richard A. Udell, Senior Trial Attorney with the Environmental Crimes Section of the U.S. Department of Justice.

Under the Crime Victims' Rights Act, crime victims are afforded certain statutory rights including the opportunity to attend all public hearings and provide input to the prosecution. Those adversely impacted by the oil spill are encouraged to visit http://www.usdoj.gov/usao/can/community/Notifications to learn more about the case and the Crime Victims' Rights Act.

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Source: U.S. Department of Justice

CONTACT: U.S. Department of Justice, +1-202-514-2007, TDD:
+1-202-514-1888

Web Site: http://www.usdoj.gov/

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Profile: social-developments

Illinois Man Sentenced to Life in Prison for Production of Child Pornography and Other Offenses

Illinois Man Sentenced to Life in Prison for Production of Child Pornography and Other Offenses

WASHINGTON, July 17 /PRNewswire-USNewswire/ -- Carl Courtright III, of Granite City, Ill., was sentenced today to life plus 10 years in prison for production of child pornography and other offenses, Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney for the Southern District of Illinois Courtney Cox announced.

A federal jury convicted Courtright of one count of production of child pornography, two counts of possession of child pornography, one count of receipt of child pornography and one count of bank fraud following a five-day trial in March 2009.

Evidence presented at trial revealed that the investigation of Courtright began when Illinois Attorney General Lisa Madigan required social networking site MySpace.com to provide information regarding all registered sex offenders in her state who were maintaining profiles on the site. Courtright was identified as someone who had a MySpace profile, and further investigation prompted investigators to seek a search warrant for his residence.

Evidence presented at trial showed that when the warrant was executed, law enforcement agents discovered evidence that Courtright had caused a local female child to engage in sexually explicit conduct and photographed the activity; downloaded and possessed child pornography videos and photographs including videos of prepubescent children being raped by adult males; and engaged in a bank fraud scheme involving his production of counterfeit checks that Courtright deposited into an account at Regions Bank as "donations" to an online ministry he maintains.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

The case was prosecuted by Assistant U.S. Attorney Nicole E. Gorovsky of the Southern District of Illinois and Trial Attorney James Silver of CEOS. The case was investigated by the Granite City, Ill., Police Department; the State of Illinois Attorney General's Office; the U.S. Postal Inspection Service; the Illinois Internet Crimes Against Children Task Force; the Madison County, Ill., Sheriff's Department; the Alton, Ill., Police Department; the Bethalto, Ill., Police Department; the FBI Metro East Cyber Crime Task Force; and CEOS' High Tech Investigative Unit.

Source: U.S. Department of Justice

CONTACT: U.S. Department of Justice, +1-202-514-2007, TDD:
+1-202-514-1888

Web Site: http://www.usdoj.gov/
http://www.projectsafechildhood.gov/
http://www.myspace.com/

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Profile: social-developments