Month: April 2022

Source: United States Department of Justice 2

The Justice Department filed a Statement of Interest today in the U.S. District Court for the Northern District of New York explaining how policies that exclude rental housing applicants because they do not speak English may violate the Fair Housing Act. 

The Statement of Interest was filed in CNY Fair Housing v. Swiss Village LLC, et al., a lawsuit alleging that the defendants violated the Fair Housing Act (FHA) by refusing to rent apartments to applicants who are limited English proficient (LEP) unless someone who speaks and reads English lives in the unit. The defendants own and manage apartments in Dewitt, New York.  The lawsuit further alleges that the defendants refused the applicants’ offers to bring their own interpreters to translate lease documents and assist with communications.    

“Refusing to rent to people who do not speak English makes finding safe and affordable housing especially hard for people who come to the United States from countries where English is not the primary language,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “When housing providers ban prospective tenants who do not speak English well, their actions may violate the Fair Housing Act, which prohibits discrimination based on national origin, race and other protected characteristics. As we celebrate Fair Housing Month, the Department of Justice underscores its commitment to fighting for fair housing across our nation and ensuring that housing providers respect the federal civil rights of people who do not read or speak English fluently.”

“The right to housing is fundamental to full participation in society,” said U.S. Attorney Carla Freedman for the Northern District of New York. “When landlords engage in practices or enact policies that disparately impact people who have come to America from non-English speaking countries, these actions must be strictly scrutinized for potential violations of the Fair Housing Act. My office is proud to partner with the Civil Rights Division in regard to this matter.”

“HUD commends the Justice Department for pursuing the housing rights of those who call America home,” said Demetria L. McCain, HUD’s Principal Deputy Assistant Secretary for Fair Housing and Equal Opportunity.

Relying on recent Census data, CNY Fair Housing’s complaint alleges that the defendants’ LEP exclusion policy imposes an unjustified disparate impact on the basis of national origin and race. The complaint also alleges that the defendants’ restrictive language policy was a pretext to discriminate against applicants based on their national origin and race. 

Among its protections, the FHA prohibits discrimination in housing on the basis of national origin or race. The Statement of Interest explains how a restrictive language policy may violate the FHA when it has a disparate impact or is used as a proxy or pretext for discrimination based on national origin or race, as alleged in plaintiff’s complaint. It also discusses how the plaintiff’s allegations are consistent with the Department of Housing and Urban Development’s Guidance on Fair Housing Act Protections for Persons with Limited English Proficiency, which clarifies how restrictive language policies may run afoul of the FHA. 

CNY Fair Housing v. Swiss Village et al. was filed in the Northern District of New York in November 2021. The defendants have moved to have the case dismissed. CNY Fair Housing opposes that motion, and the Justice Department’s Statement of Interest agrees that dismissal of the complaint would be inappropriate. The motion is now pending before the court.

The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status (having one or more children under 18), national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt.

Individuals who believe they have been victims of housing discrimination submit a report online at www.civilrights.justice.gov. Such individuals also may contact the U.S. Department of Housing and Urban Development at 1-800-669-9777 or by filing a complaint online.

Source: United States Department of Justice Criminal Division

Preferred Family Healthcare, a Springfield, Missouri-based non-profit, will pay more than $8 million in forfeiture and restitution to the federal government and the state of Arkansas under the terms of a non-prosecution agreement announced yesterday, which acknowledges the criminal conduct of its former officers and employees.

“Preferred Family Healthcare must relinquish the illegal profits it garnered from a wide-ranging fraud and bribery scheme,” said U.S. Attorney Teresa Moore for the Eastern District of Missouri. “Several former officers and employees are being prosecuted in separate criminal cases for their individual criminal conduct. This non-prosecution agreement holds the charity itself responsible for their actions as agents of the charity. Public tax dollars were stolen and misused in the course of this public corruption scheme, and through this agreement and these separate prosecutions, those dollars are being restored to the public coffers.”

“Employees of Preferred Family Healthcare used charitable organizations to illegally line their own pockets through fraud and bribery,” said Special Agent in Charge Tyler Hatcher of IRS-Criminal Investigation (IRS-CI). “IRS-Criminal Investigation and our law enforcement partners will continue to work diligently to uncover large frauds designed to divert funds that were meant to help those in need of medical services. Preferred Family Healthcare has acknowledged that its former employees engaged in criminal activity, and they are taking steps to make amends by forfeiting a sum of money to the federal government and paying restitution to the state of Arkansas.”

“The public should not suffer or be responsible for individuals who abuse their leadership positions out of greed for personal financial gain,” said Special Agent in Charge Charles Dayoub of the FBI’s Kansas City Field Office. “It is never acceptable to embezzle and misappropriate funds, especially those that directly impact our health care system. As today’s announcement underscores, although the individuals directly involved are no longer with Preferred Family Healthcare, this organization is accepting responsibility for its employees’ actions.”  

“The misuse and misappropriation of millions of federally sourced funds, designated for employment training and behavioral healthcare services to the public, by former executives of Preferred Family Healthcare (PFH) is a gross abuse of the positions of trust they once held within the organization,” said Special Agent-in-Charge Steven Grell of the U.S. Department of Labor, Office of Inspector General. “These former executives failed the public and did a disservice to PFH employees by prioritizing their own personal benefit and financial gain over the public they served. Today’s agreement demonstrates PFH’s willingness to take corrective actions regarding the criminal actions of former executives of the organization.”

Preferred Family Healthcare provides services to individuals in Missouri, Arkansas, Kansas, Oklahoma, and Illinois, including mental and behavioral health treatment and counseling, substance abuse treatment and counseling, employment assistance, aid to individuals with developmental disabilities, and medical services. Most of the charity’s funding comes from federally appropriated funds – the largest portion being Medicaid reimbursement.

As a condition of this non-prosecution agreement, representatives of Preferred Family Healthcare admitted that former officers and employees of the charity engaged in a conspiracy to, amongst other criminal activity, embezzle funds from the charity and to bribe several elected state officials in the Arkansas House of Representatives and the Arkansas Senate. As a direct result of these actions, Preferred Family Healthcare realized a financial benefit. Although Preferred Family Healthcare’s board of directors through lack of proper oversight, allowed its officers and employees to violate federal law.

Under the terms of the non-prosecution agreement, Preferred Family Healthcare will forfeit more than $6.9 million to the federal government and pay more than $1.1 million in restitution to the state of Arkansas related to the misuse of funds from the state’s general improvement fund.

Several former executives from the charity, former members of the Arkansas state legislature, and others have pleaded guilty in federal court as part of the multi-jurisdiction, federal investigation, including the following:

• Former Chief Executive Officer, Marilyn Luann Nolan of Springfield, Missouri, pleaded guilty in November 2018 to her role in a conspiracy to embezzle and misapply the funds of a charitable organization that received federal funds. A sentencing hearing has not been scheduled.
• Former Director of Operations and Executive Vice President Robin Raveendran, of Little Rock, Arkansas, pleaded guilty in June 2019 to conspiracy to commit bribery concerning programs receiving federal funds. A sentencing hearing has not been scheduled.
• Former executive and head of clinical operations Keith Fraser Noble, of Rogersville, Missouri, pleaded guilty in September 2019 to concealment of a known felony. A sentencing hearing has not been scheduled.
• Former employee and head of operations and lobbying in Arkansas, Milton Russell Cranford, aka Rusty, of Rogers, Arkansas, was sentenced to seven years in federal prison without parole after pleading guilty to one count of federal program bribery.
• Political Consultant Donald Andrew Jones, aka D.A. Jones, of Willingboro, New Jersey, pleaded guilty in December 2017 to his role in a conspiracy from April 2011 to January 2017 to steal from an organization that receives federal funds.
• Former Arkansas State Senator Jeremy Hutchinson, of Little Rock, Arkansas, pleaded guilty in June 2019 to conspiracy to commit federal program bribery. A sentencing hearing has not been scheduled.
• Former Arkansas State Representative Eddie Wayne Cooper, of Melbourne, Arkansas, pleaded guilty in February 2018 to conspiracy to embezzle more than $4 million from Preferred Family Healthcare. A sentencing hearing has not been scheduled.
• Former Arkansas State Senator and State Representative Henry (Hank) Wilkins IV pleaded guilty to conspiracy to commit federal program bribery and devising a scheme and artifice to defraud and deprive the citizens of the State of Arkansas of their right to honest services. A sentencing hearing has not been scheduled.

As part of the federal investigation, the former chief operating officer and chief financial officer of the charity were indicted by a federal grand jury on March 29, 2019. They pleaded not guilty, and are awaiting trial, which is scheduled to begin on Oct. 3.

The separate criminal cases are being prosecuted by Senior Litigation Counsel Marco A. Palmieri and Trial Attorney Jacob Steiner of the Criminal Division’s Public Integrity Section, Supervisory Assistant U.S. Attorney Randall Eggert and Assistant U.S. Attorney Shannon T. Kempf of the Western District of Missouri, Assistant U.S. Attorney Steven M. Mohlhenrich of the Western District of Arkansas, and Special Assistant U.S. Attorney Stephanie Mazzanti of the Eastern District of Arkansas.

IRS-Criminal Investigation, FBI, and the Offices of the Inspectors General from the Departments of Justice, Labor, and the Federal Deposit Insurance Corporation (FDIC) investigated the cases.

This is a combined investigation with the Criminal Division’s Public Integrity Section, the Western District of Missouri, the Western District of Arkansas, and the Eastern District of Arkansas.

Source: United States Department of Justice News

A federal court in the Northern District of Illinois has permanently enjoined two Chicago-area tax return preparers from preparing returns for others and from owning or operating any tax return preparation business in the future.

The civil complaint filed in the case alleged that Patricia Rivers, of Country Club Hills, Illinois her daughter-in-law, Ki’esha Gary, of South Holland, Illinois, and her company, Alpha II Omega Tax, prepared federal income tax returns that made false and fraudulent claims to reduce her customers’ tax liabilities and increase their tax refunds, primarily through a scheme to fabricate sole proprietorship business losses on the customers’ returns. The complaint also alleged that Rivers, Gary and Alpha II Omega inflated their customers’ tax refunds by reporting false charitable donations and exaggerated or bogus unreimbursed employee expenses, bogus rental deductions, inflated tax withholding and overstated education credits. On at least one occasion, Rivers was alleged to have falsely reported her own home address as a rental property to generate losses on her customer’s income tax return. Another customer alleged that Rivers amended a customer’s return without consent to retaliate against her by increasing her tax liability. 

In an order entered on March 31, the court found that the tax loss to the government from the 2018 returns of just 38 of Rivers’ customers was $278,461 and that, given that this was “only a small number of the thousands of income tax returns prepared by Rivers,” the actual loss to the United States was higher.

The court found that Rivers repeated and continuously prepared income tax returns in a manner that violates federal law, and that because her intentional disregard for tax laws continues, a permanent bar on tax preparation activities was warranted. Thus, the Court entered a permanent injunction preventing Rivers, Gary, and Alpha II Omega Tax from preparing income taxes or engaging in tax-related business in the future.

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

Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams and taxpayers seeking a return preparer should remain vigilant. (More information can also be found here.) The IRS has information on its website for choosing a tax preparer, has launched a free directory of federal tax preparers, and offers information on how to avoid “ghost” tax preparers, whose refusal to sign a return should be a red flag to taxpayers. The IRS also has a checklist of things to remember when filing income tax returns in 2022.

In addition, IRS Free File, a public-private partnership, offers free online tax preparation and filing options on IRS partner websites for individuals whose adjusted gross income is under $73,000. For individuals whose income is over that threshold, IRS Free File offers electronical federal tax forms that can be filled out and filed online for free. The IRS has tips on how seniors and individuals with low to moderate income can get other help or guidance on tax return preparation, too.

In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. 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 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.