Month: March 2022

Source: United States Department of Justice News

Detroit, MI – Late Friday, March 18, 2022, a federal judge ruled in favor of the Justice Department, finding that the City of Troy, Michigan violated the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA). The judge found that Troy’s zoning practices treat places of worship worse than equivalent nonreligious assemblies. The judge also found that Troy’s zoning denial substantially burdened the religious exercise of a Muslim group seeking to establish the only permanent place of Islamic worship in the City of Troy. Accordingly, the judge entered an order enjoining Troy from enforcement of the discriminatory provisions of its zoning ordinance.
“I am very pleased that the Court recognized Troy’s unequal treatment of places of worship and the impact on Troy’s Muslim community,” said Dawn Ison, United States Attorney for the Eastern District of Michigan. “My office always seeks to work cooperatively with local governments to resolve civil rights disputes. However, when that is not possible, we will not hesitate to prosecute those cases.”
The Justice Department originally filed suit in 2019, after Troy denied zoning approval to Adam Community Center (Adam), an organization of Muslims who live and work in Troy, to operate a place of worship. In 2018, after a nine-year search for a permanent location in Troy, Adam acquired a building in one of Troy’s commercial districts to use as a community center and place of worship. Troy’s zoning ordinance would allow a nonreligious place of assembly, such as a theater or banquet hall, to use the same building without further approval. But because of Troy’s zoning restrictions unique to places of worship, Adam had to seek Troy’s approval to operate in the building. On June 19, 2018, Troy’s zoning board denied Adam’s application. The Justice Department investigated and subsequently filed suit.
The judge’s opinion quoted from RLUIPA’s legislative history, noting that, “RLUIPA was enacted to protect assemblies like Adam from discrimination in zoning laws that ‘lurks behind such vague and universally applicable reasons as traffic, aesthetics, or ‘not consistent with the city’s land use plan.’’” The opinion also noted that, “Adam has searched for a suitable property for many years and purchased the Property at issue here at great cost …”, and that Troy had “…no compelling governmental interest in prohibiting Adam, a religious place of assembly, from operating from the Property.”
This case was litigated by Assistant United States Attorneys Shannon Ackenhausen and Susan DeClercq of the United States Attorney’s Office for the Eastern District of Michigan as well as trial attorneys from the Civil Rights Division’s Housing and Civil Enforcement Section.
RLUIPA is a federal law that protects religious institutions from unduly burdensome or discriminatory land use regulations. In June 2018, the Justice Department announced its Place to Worship Initiative, which focuses on RLUIPA’s provisions that protect the rights of houses of worship and other
religious institutions to worship on their land. More information is available at
www.justice.gov/crt/placetoworship.
The Civil Rights Unit of the U.S. Attorney’s Office for the Eastern District of Michigan was established in 2010 with the mission of prioritizing federal civil rights enforcement. For more information on the Office’s civil rights efforts, including a copy of the court’s opinion and order, please visit https://www.justice.gov/usao-edmi/programs/civil-rights.
Individuals who believe they have been subjected to discrimination or experienced a civil rights violation can submit a complaint with the U.S. Attorney’s Office by email at usamie.civilrights@usdoj.gov or by phone at (313) 226-9151. Complaints can also be submitted to the Civil Rights Division through its complaint portal.

Source: United States Department of Justice News

United States Attorney Ronald C. Gathe, Jr., announced the conviction of Elliot Sterling, age 33, of Baton Rouge, Louisiana.  Sterling was indicted by a federal grand jury on August 3, 2020, and charged with wire fraud, financial aid fraud, and engaging in monetary transactions involving property derived from specified unlawful activity.

After an eight-day trial before District Judge Brian A. Jackson, the jury unanimously convicted Sterling of five counts of wire fraud involving a scheme to defraud the Department of Education federal student aid program, two counts of financial aid fraud, and two counts of wire fraud involving the Small Business Administration Economic Injury Disaster Loan program, which was designed to aid businesses during the Covid-19 pandemic.  Mr. Sterling was also convicted of six counts of money laundering involving the proceeds of his two wire fraud schemes.  The jury further ordered the forfeiture of $422,632.38 in fraud proceeds that the FBI had seized in the case.

As the evidence at trial demonstrated, with respect to the Department of Education wire fraud and financial aid fraud counts, Mr. Sterling received $1,468,239 in federal student aid loans and grants that were associated with 180 Baton Rouge Community College (BRCC) students into his personal bank account and the business bank account of his company, Sterling Educational Consulting, LLC.  The evidence presented at trial showed that Mr. Sterling used the personal identifying information of his purported students to electronically fill out and submit their Free Applications for Federal Student Aid (FAFSAs), sign master promissory notes on their behalf, enroll them into classes at BRCC, and create and manage the student BankMobile accounts that received federal student loans.  Through Mr. Sterling’s control of the students’ accounts, he directed Department of Education monies to be paid directly into his own bank accounts.

In order to circumvent Department of Education controls designed to inform students about the financial obligations of student loans, Mr. Sterling concealed his role as the preparer of the FAFSAs and pretended to be the students when he logged on with their credentials, clicked through the loan counseling in less than three minutes, and signed promissory notes in their names.  Typically, the students did not have access to the email addresses or login information that Mr. Sterling created on their behalf and did not have access to their own FAFSA, BRCC, or BankMobile accounts.

In addition, Mr. Sterling falsified the academic qualifications for 168 students to the Department of Education, and 145 of these students lacked even a high school diploma or equivalent (e.g. a GED).  A witness at trial also testified that Mr. Sterling had paid him $5,000 to produce 42 diplomas with fictional grades.  These diplomas were then provided to BRCC after BRCC requested verification of the students’ academic credentials.   None of the 180 students for whom Mr. Sterling received money progressed academically at BRCC, and 172 failed or withdrew from every class they were enrolled in.  Some students were incarcerated when their FAFSAs were submitted, promissory notes signed, or federal student aid disbursed into Mr. Sterling’s bank accounts.

Instead of directing the funds he received to the students, Mr. Sterling kept over 60% for himself, and for 25 students, Mr. Sterling kept 100% of the loan proceeds.  Among the students who received money from Mr. Sterling’s scheme, most were unaware they had signed up for student loans and that Mr. Sterling had signed master promissory notes in their names obligating them to repay the full amount.  The students were also unaware of the true amount of refunds awarded in their names, and the true amount Mr. Sterling retained as his portion.  

With respect to the SBA wire fraud, Mr. Sterling submitted a loan application on behalf of his business, Sterling Educational Consulting, LLC, that falsified the business’s revenues and costs and concealed his prior guilty plea to felony theft.  As a result of these false statements, the SBA loaned Mr. Sterling $90,000 in order for him to pay the operating costs of his business during the Covid-19 pandemic.  Mr. Sterling promptly withdrew $75,000 in cash.  During the course of his schemes, Mr. Sterling also spent more than $253,000 at casinos in Louisiana, Nevada, and Pennsylvania.

As a result of his convictions, Mr. Sterling now faces a maximum sentence in federal prison of twenty years per wire fraud count, ten years per money laundering count, and five years per financial aid fraud count, as well as significant fines, restitution, and supervised release.

This case was investigated by the FBI and the U.S. Department of Education – Office of Inspector General. This case was prosecuted by Deputy Criminal Chief Elizabeth E. White, Assistant U.S. Attorney René I. Salomon, and Asset Forfeiture Chief Brad Casey.

Source: United States Department of Justice News

ST. LOUIS – United States District Court Judge Sarah E. Pitlyk sentenced former St. Louis Metropolitan Police Officer Brad Stephens to one year and one day in federal prison for 3 counts of Mail Fraud by obtaining taxpayer moneys from the Tower Grove South Concerned Citizen Special Business District (“Tower Grove South”) by means of material false representations.  Stephens pleaded guilty on December 6, 2021. 

According to court documents, Stephens was employed as a police officer by the St. Louis Metropolitan Police Department (“SLMPD”) in St. Louis, Missouri, and had been employed by the SLMPD since October 6, 2014. 

Tower Grove South was established to provide special police and/or security for the protection and enjoyment of the property owners and the public within the district.  The administration and operations of the business district are taxpayer funded. City Wide Security (“CWS”) is a private company that contracts with businesses and organizations to provide private security patrols.  CWS contracted to provide security patrols in the Tower Grove South Neighborhood beginning during 2010.  

Stephens was employed by CWS beginning in approximately 2015 to work during some of his off-duty hours to patrol the Tower Grove South Neighborhood.  Stephens falsely represented to CWS 169 day and night patrol shifts he agreed to work as part of the CWS security patrol in the Tower Grove South Neighborhood when, in fact, Stephens did not actually work those assigned shifts.  During 2018, Stephens falsely represented that he worked 93 days, and during 2019, Stephens falsely represented that he worked 76 days.  CWS was paid approximately $50,000 by the Tower Grove South organization based upon Stephens’ false representations, all taxpayer funds. 

The case was investigated by the Federal Bureau of Investigation and the St. Louis Metropolitan Police Department.

Source: United States Department of Justice News

TUCSON, Ariz. – Yesenia Isabel Mendez, 40, of Tucson, Arizona, was sentenced on Friday by U.S. District Judge Jennifer G. Zipps to 57 months in prison, followed by three years of supervised release. Mendez was convicted of one count of Possession with Intent to Distribute Fentanyl and one count of Conspiracy to Transport Illegal Aliens for Profit while Placing in Jeopardy the Life of any Person. 

On August 1, 2020, Mendez was arrested for carrying nearly half a pound of fentanyl hidden on her body while she was a passenger on a commercial shuttle van inbound from Mexico. With no prior criminal history, she was released pending resolution of her case. On October 23, 2020, Mendez pleaded guilty to the charge; however, in January 2021, she absconded from her pretrial supervision, before her sentencing could take place. Three months later, on March 21, 2021, Mendez was again arrested, this time for Alien Smuggling. During the attempted traffic stop in that offense, she and her co-defendant tried to flee from Border Patrol but instead crashed into a concrete wash, resulting in injuries to herself, the co-defendant, and the undocumented noncitizen they were smuggling. She subsequently pleaded guilty on June 21, 2021, to the Alien Smuggling Offense. Her sentence included a mandatory enhancement due to the multiple offenses that she committed.

United States Border Patrol conducted the investigation in this case. The U.S. Attorney’s Office, District of Arizona, Tucson, handled the prosecution.

CASE NUMBER:            CR-20-2157-TUC-JGZ (LCK); CR-21-1408-TUC-JGZ (LCK)
RELEASE NUMBER:    2022- 027_Mendez, Yesenia

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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.

Source: United States Department of Justice News

DENVER – The U.S. Attorney’s Office for the District of Colorado announces an agreement with the Durango & Silverton Narrow Gauge Railroad Company and its parent company, American Heritage Railways (together, the “Railroad”), under which the Railroad will pay $20 million to compensate the United States for damages caused by a 2018 fire near Durango, Colorado, and will also modify railroad operations and take other measures to reduce the risk of wildfire ignition.

“The Durango & Silverton Railroad represents an important historic and cultural icon in southwest Colorado,” said United States Attorney Cole Finegan. “We intend for this settlement to enable the Railroad to continue to operate, but in a manner that will avoid causing future catastrophic wildfires.  In addition, this agreement ensures fair compensation for the damages caused by the 416 Fire.” 

“When finalized, the proposed settlement and subsequent operational changes will help protect southwestern Colorado’s communities, cultural, and natural resources from future wildfires,” said Frank Beum, Regional Forester for the United States Forest Service. “We look forward to continuing our partnership with the Durango and Silverton Narrow Gauge Railroad Company and American Heritage Railways,” he added.  

Bureau of Land Management Acting Colorado State Director Stephanie Connolly said, “BLM is committed to investigating all human-caused fires and finding ways to prevent wildfires on public lands.  Working with the U.S. Forest Service and the Railroad, this settlement will include an Industrial Fire Restrictions Plan to help reduce the risk of wildfires like the 416 fire from happening again in Colorado.” 

The agreement arises from a lawsuit involving the “416 Fire,” a wildland fire that was ignited on June 1, 2018, on the San Juan National Forest near Durango.  The 416 Fire burned more than 54,000 acres of federal lands until it was fully suppressed approximately six months later.  The fire damaged natural habitat, caused erosion, and caused other natural resource damages on federal lands within the San Juan National Forest.  It also threatened private residences, requiring emergency evacuations.  The federal agencies, including the U.S. Forest Service and the Bureau of Land Management, that responded to and suppressed the fire incurred significant costs.   

An investigation by federal fire investigators concluded that the 416 Fire was caused by particles emitted from a smokestack on a coal-burning steam train engine owned and operated by the Railroad.  Private fire investigators, who also investigated the ignition area, reached the same conclusion. 

In July 2019, the United States filed a lawsuit against the Railroad in federal district court in the District of Colorado seeking to recover damages for the fire. The United States sued the Railroad relying on a Colorado state statute that requires railroad operators to pay money damages for fires caused by their operations. 

After several years of litigation, the United States and the Railroad reached an agreement to resolve the claims.  The settlement is set forth in a proposed consent decree.  The Court will review the consent decree and determine whether to approve and enter it.  Under the terms of the proposed consent decree, the Railroad will pay the government a $15 million lump sum payment within 45 days, and then will pay an additional $5 million, plus interest, over a ten-year period.  In addition to these monetary payments, the consent decree will require the Railroad to undertake substantial operational changes over a ten-year term, including:

1. The Railroad will comply with an Industrial Fire Restrictions Plan (which is an exhibit to the consent decree, and is publicly available).  This Plan places limits on the Railroad’s operations when fire risk is elevated and prohibits operations when fire risk is extreme.

2. The Railroad will prepare and submit to the U.S. Forest Service, each year, an Operating and Fire Prevention Plan.

3. The Railroad will retain a qualified independent consultant who, each year, will inspect, report on, make recommendations, and audit the Railroad’s fire mitigation and prevention measures.

4. The Railroad will hire a full-time, qualified fire management officer, who will provide monthly certification of compliance with the aforementioned plans and reports.

5. The Railroad will maintain a minimum of $3 million in wildfire insurance coverage and conduct an annual review to determine the economic feasibility of additional insurance coverage.

6. The Railroad will create a self-insured wildfire fund, which will be funded by the Railroad at a rate of $100,000 per year and may be used to pay for costs arising from any wildfire caused by the Railroad.

If approved, these measures will reduce the fire risk associated with the Railroad’s operations.  They will also provide the public some minimum insurance against fire-related damages from the Railroad’s operations.  Notably, under the proposed consent decree, the Durango & Silverton Narrow Gauge Railroad will no longer operate coal-burning locomotives during periods of elevated fire risk.  This change arises from the consent decree’s requirement that the Railroad comply with the Industrial Fire Restrictions Plan.  Since the lawsuit was filed, the Durango & Silverton Narrow Gauge Railroad has begun converting its locomotives to oil-based engines, instead of using coal-fired engines. 

The Railroad denied, and continues to deny, that it caused the 416 Fire, and the settlement is not an admission of the Railroad’s liability.

Private parties filed a separate lawsuit in Colorado state court against the Railroad seeking damages for claimed harms to their property, lost revenues, and other damages.  The United States is not a party to that case, and those private parties’ claims are being resolved separately.

The federal case was handled by Assistant U.S. Attorneys Jacob Licht and Katherine Ross, with assistance from Assistant U.S. Attorneys Nick Deuschle, David Moskowitz, and Andrew Soler.