Month: April 2023

Source: United States Department of Justice News

OKLAHOMA CITY – Good Shepherd Catholic School, Inc. (“GSCS”), paid $354,000 to settle civil claims by the United States stemming from allegations that GSCS submitted false claims to TRICARE for services provided to students with autism, announced United States Attorney Robert J. Troester.

GSCS is a non-profit private educational institution located in Oklahoma City, Oklahoma.  TRICARE is a health care program of the United States Department of Defense Military Health System.  GSCS serves students with autism and other neurological disorders.  As part of its program, GSCS provides Applied Behavior Analysis therapy (“ABA”) services to students diagnosed with Autism Spectrum Disorder.  GSCS submitted claims to TRICARE for providing ABA services to TRICARE beneficiaries.  TRICARE requires that ABA services be delivered by a TRICARE authorized provider to a TRICARE beneficiary on a one-on-one basis.

The United States alleges that from May 13, 2013, to December 20, 2016, GSCS knowingly submitted false or fraudulent claims to TRICARE for providing ABA services to TRICARE beneficiaries.  The claims were allegedly false or fraudulent because the ABA services were provided in a group setting and not on a one-on-one basis as required.  To resolve the claims, GSCS agreed to pay $354,000 to the United States.

In reaching this settlement, GSCS did not admit liability, and the government did not make any concessions about the legitimacy of the claims.  The agreement allows the parties to avoid the delay, expense, inconvenience, and uncertainty involved in litigating the case.

This case was investigated by the Defense Criminal Investigative Service.  Assistant U.S. Attorney Ronald R. Gallegos prosecuted the case.

Source: United States Department of Justice News

            WASHINGTON – British American Tobacco (BAT) and its subsidiary, BAT Marketing Singapore (BATMS), one of the world’s largest manufacturer of tobacco products, has agreed to pay penalties totaling more than $629 million to resolve bank fraud and sanctions violations charges with U.S. authorities, arising out of the companies’ scheme to do business in North Korea through a third-party company in Singapore, in violation of the bank fraud statute and the International Emergency Economic Powers Act (IEEPA). In addition, charges were unsealed in the District of Columbia against a North Korean banker and Chinese facilitators for their roles in facilitating the illicit sale of tobacco products in North Korea.

            According to court documents, BATMS pleaded guilty to, and BAT entered into a deferred prosecution agreement in connection with, a criminal information charging BAT and BATMS with conspiracy to commit bank fraud and conspiracy to violate IEEPA. Specifically, in 2007, BAT spun off its North Korea sales to a third-party company, issuing a press statement that it was no longer involved in North Korea tobacco sales. In reality, BAT continued to do business in North Korea through the third-party company and maintained control over all relevant aspects of the North Korean business. BAT ran the payments for the tobacco sold to North Korean entities through the third-party company, resulting in approximately $415 million of U.S. dollar banking transactions from North Korea to the third-party company in Singapore – money that was then passed on to BATMS and BAT. To make these payments, North Korean purchasers used front companies so that U.S. banks, which processed the transactions, would not know about the connection to North Korea.

            “The United States is steadfast in its commitment to enforcing sanctions and withholding revenue for dictator Kim Jong-un,” said U.S. Attorney Matthew M. Graves.  “The charges unsealed today illustrate that the Department of Justice will hold North Korean facilitators accountable for their illegal efforts to prop up the North Korean regime, and assist it in obtaining funds to develop nuclear weapons.”

            “British American Tobacco and its subsidiary engaged in an elaborate scheme to circumvent U.S. sanctions and sell tobacco products to North Korea in violation of U.S. law,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “With today’s action, which involves the largest settlement payment in the Department’s history, these entities have been held to account.”

            “The FBI remains steadfast in its commitment to investigate North Korea’s evasion of sanctions placed on its government,” said Assistant Director Suzanne Turner of the FBI’s Counterintelligence Division. “This illegal conduct and the levied penalties show how serious of an offense it is to assist the North Korean regime to the detriment of the international community. To those contemplating similar actions, be forewarned: the full force of the FBI and its federal law enforcement partners will find you.”      

            Separately, on April 25, 2023, a federal judge in the District of Columbia unsealed charges against a North Korean banker, Sim Hyon-Sop, 50, and Chinese facilitators Qin Guoming, 60, and Han Linlin, 41, both of Liaoning Province, in connection with a multi-year scheme to facilitate the sale of tobacco to North Korea.

            Between 2009 and 2019, the defendants engaged in a scheme to purchase leaf tobacco for North Korean-owned entities, and used front companies and false documentation to cause U.S. financial institutions to process at least 310 transactions worth approximately $74 million that they otherwise would have frozen, blocked, investigated, or declined, had they known that the transactions connected to trade with North Korea. The transactions resulted in an estimated nearly $700 million in revenue for North Korean entities, and ultimately, for the government of North Korea.

            In conjunction with today’s announcement, the U.S. Department of State is announcing a reward of $5 million for defendant Sim, and a reward of $500,000 for defendants Qin and Han, for information leading to the capture of these three charged defendants.

            Additionally, today, the Department of the Treasury also announced a civil enforcement action against BAT and BATMS.

            This case is part of a larger Department of Justice response to the ongoing efforts of North Korea to evade sanctions and use the U.S. financial system to engage in illicit trafficking. As alleged in the indictment, trafficking in tobacco products generates revenue for advancing North Korea’s Weapons of Mass Destruction (WMD) programs. North Korea has been developing nuclear weapons since at least 2006 and financed these activities through illicit trade, including trafficking of tobacco and counterfeit cigarettes, which North Korea has engaged in since at least 1992. North Korea counterfeit cigarette production capacity is estimated to exceed two billion packs a year. Counterfeit cigarettes are a major source of income to the North Korean regime and may be the single most lucrative item in the North Korean portfolio, as smuggled tobacco is estimated to garner revenue as much as $20 on every $1 spent in cost. North Korean tobacco sales are alleged to flow back to the North Korean government, including to slush funds designed to sustain the loyalty of a core of party elite and to underwrite weapons development programs.

            If convicted, the defendants face a maximum statutory penalty of 30 years’ imprisonment for the lead charge, bank fraud. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

            The cases are being investigated by the FBI Phoenix Field Office.  HSI Colorado partnered in the investigation on the individuals, with valuable assistance provided by the Justice Department’s Office of International Affairs.

            Assistant U.S. Attorney Karen P. Seifert, with assistance from Assistant U.S. Attorney Steven Wasserman, Paralegal Specialists Brian Rickers, and Paralegal Specialist Jorge Casillas for the District of Columbia are prosecuting the case. Trial Attorneys Beau Barnes and Emma Ellenrieder of the National Security Division’s Counterintelligence and Export Control Section partnered on these matters. Trial Attorney David Recker, former Assistant U.S. Attorneys Zia Faruqui and Michael Grady.

            An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Source: United States Department of Justice News

Remarks as Prepared for Delivery

Thank you, Dianna, for that introduction. And thank you to our EPA partners for hosting us and to the Justice Department and EPA teams that organized this event. I want to acknowledge the leadership of our Environment and Natural Resources Division, including Todd Kim, Kate Konschnik and Seth Barsky, who are all here with us today, for everything that ENRD does to advance these important issues. And I want to thank all of you for taking the time to join this event.

National Crime Victims’ Rights Week is an opportunity for all of us in the justice system to reflect on the importance of making the system work for survivors of crime. And today’s event gives us an opportunity to take stock of our progress and discuss how we can continue to improve. The theme of this year’s Crime Victims Week is “Survivor Voices: Elevate. Engage. Effect Change.” And I’m thankful that we have with us today survivors of environmental crimes, who are willing to elevate their voices.

I had the privilege of meeting with Joe, Tom and Anthony, along with some of their loved ones, just before this event, and I am inspired by their courage, perseverance, and dedication to raising awareness of environmental crimes. Anthony, Joe and Tom, we are all so grateful that you will be telling your stories shortly.

Without getting ahead of that panel, I want to reflect on just one common theme of their stories. Each of the environmental laws that should have protected these individuals are sometimes belittled as creating needless red tape that raises the cost of doing business. Yet if those laws had been followed in Joe’s case, two men would not have died, and Joe would not have been injured, cleaning a railway car. If they had been followed in Tom’s case, a dozen Americans would not have faced exposure to asbestos, with all the fear that brings. And if they had been followed in Anthony’s case, more than one hundred people would not have been forced from their homes and had their property destroyed during an asbestos clean-up.

These are powerful examples of the work that the environmental laws do to keep Americans safe. When those or any other laws are violated, treating victims with dignity and respect is critical to the Justice Department’s mission and its ability to pursue and achieve justice. That is why the Attorney General issued updated Guidelines for Victim and Witness Assistance committing the Department to taking a victim-centered, trauma-informed and culturally sensitive approach to advancing criminal justice.

That approach applies with full force to environmental crimes. As everyone in this room knows, environmental crimes harm more than the planet — they harm communities, families and individuals. A worker who is not given the protective gear she needs, a family whose home is exposed to illegal pesticides, a community that lives near a factory spewing unlawful emissions — all of these people may face serious physical, emotional and financial injuries.

Yet for too long, victims of environmental crimes did not receive the resources they need to recover from their harms. For example, victims of environmental crimes may not be eligible for victim compensation programs reserved only for victims of violent crime — notwithstanding that environmental crime victims may have suffered serious harm and losses. That lack of support is unacceptable.

At the beginning of this Administration, EPA and the Department of Justice redoubled our joint efforts to elevate survivors’ voices, engage and effect change by launching the nation’s first-of-its-kind Environmental Crime Victim Assistance Program.  The program was built based on the experiences of survivors, from victims’ rights professionals and from those working on environmental crimes investigations and prosecutions.

As part of that program, EPA and Department of Justice staff have partnered with victims’ advocates to raise awareness of environmental crimes. They have engaged communities with environmental justice concerns to ensure those communities’ perspectives are heard. And they have ensured that there are personnel at both agencies who focus on victims’ rights. Thanks to funds provided by DOJ’s Office for Victims of Crime, the Program now has a full-time Victim Witness Coordinator, has established a process for victim identification and notification and is training investigative and prosecutorial staff.

Another major priority for today’s event is deepening partnerships with states and localities. Federal prosecution of environmental crime is only part of the solution. So we need to work with governments at all levels, as well as with non-profits engaged on these issues, to develop strategies that support survivors. We need to identify ways to assist environmental crime victims, provide them needed services and ensure they receive restitution, regardless of what jurisdiction is prosecuting the crime.

We also need to go about that work with full awareness that environmental crimes are especially likely to happen in communities that are underserved and where community members may have limited English proficiency. We know that environmental crimes often raise environmental justice issues as well as criminal justice issues. That’s why both the Justice Department and EPA coordinate with our Offices of Environmental Justice to ensure that investigations, prosecutions and victim outreach incorporate environmental justice principles.

Every American deserves clean water to drink, clean air to breathe and healthy, thriving communities where they can live, work and raise their families. And when companies or individuals break our environmental laws, the survivors of those crimes need our support. Today’s conversation will advance that fundamental commitment. I look forward to continuing to work with you to make this program a success. Thank you.