Month: April 2023

Source: United States Department of Justice News

The Justice Department today issued the following statement from Attorney General Merrick B. Garland following the Fifth Circuit Court of Appeals’ decision in Alliance for Hippocratic Medicine v. FDA:

“The Justice Department strongly disagrees with the Fifth Circuit’s decision in Alliance for Hippocratic Medicine v. FDA to deny in part our request for a stay pending appeal. We will be seeking emergency relief from the Supreme Court to defend the FDA’s scientific judgment and protect Americans’ access to safe and effective reproductive care.”

Source: United States Department of Justice News

The Justice Department today issued the following statement from Attorney General Merrick B. Garland following the Fifth Circuit Court of Appeals’ decision in Alliance for Hippocratic Medicine v. FDA:

“The Justice Department strongly disagrees with the Fifth Circuit’s decision in Alliance for Hippocratic Medicine v. FDA to deny in part our request for a stay pending appeal. We will be seeking emergency relief from the Supreme Court to defend the FDA’s scientific judgment and protect Americans’ access to safe and effective reproductive care.”

Source: United States Department of Justice News

Two Florida businessmen pleaded guilty yesterday to tax evasion.

According to court documents, David Aaron and Russell Ultes were co-owners of Marlin Construction Group LLC (Marlin), a Fort Myers-based residential and commercial roofing company. In 2018 and 2019, Aaron and Ultes diverted millions of dollars of customer checks made payable to Marlin, by cashing them at check-cashing businesses in nearby counties.  Aaron and Ultes used the cash to pay personal expenses and caused Marlin’s books and records to falsely underreport the business’s gross receipts and income for those years. Aaron and Ultes provided false information to Marlin’s tax return preparers, resulting in the preparation of false 2018 and 2019 corporate income tax returns (Forms 1120S) that did not report all of the gross receipts and income. Because the income from the false corporate returns flowed through to Aaron and Ultes’s personal returns, their 2018 and 2019 personal income tax returns (Forms 1040) were similarly false. In total, Aaron and Ultes caused a tax loss to the IRS of over $1.4 million.

Aaron and Ultes each face a maximum of five years in prison, a period of supervised release, restitution and monetary penalties. U.S. District Judge Sheri Polster Chappell 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 Roger Handby for the Middle District of Florida made the announcement.

IRS-Criminal Investigation is investigating the case.

Senior Litigation Counsel Stanley J. Okula, Jr., and Trial Attorney Richard J. Hagerman of the Justice Department’s Tax Division are prosecuting the case.

Source: United States Department of Justice News

DETROIT – A school contractor pleaded guilty today to bribing and conspiring with Albert Morrison, the former School Board President of Madison District Public Schools, in a half-million dollar pay to play scheme, United States Attorney Dawn N. Ison announced.

Ison was joined in the announcement by James A. Tarasca, Special Agent in Charge of the Federal Bureau of Investigation, Michigan Division; Sarah Kull, Special Agent in Charge of the Internal Revenue Service Criminal Investigation Division; and John Woolley, Special Agent in Charge of the Department of Education, Office of Inspector General.

John David, age 65, pleaded guilty before United States District Judge Laurie Michelson to conspiracy to commit federal program bribery from 2014 through 2018 and bribery concerning programs receiving federal funds.  Morrison was the elected President of the Madison District Public Schools Board of Education from 2012 through 2018.  While Morrison was President, David was one of the owners of a building maintenance and reconstruction company, Emergency Restoration (a/k/a Emergency Reconstruction), that was awarded over $3.1 million in maintenance and construction projects in the Madison District Public Schools. 

According to court records, David, who was a long-time friend of Morrison, wrote over $550,000 in checks from his company to Morrison’s company, Comfort Consulting, from 2014 through 2018.  Morrison deposited the checks from David into his own bank account. The investigation uncovered $561,667 in payments from David to Morrison. David admitted he had to “pay to play” in the school district, and David’s companies received approximately $3,167,275 from the Madison District during the bribery conspiracy. Morrison spent the money from David on personal luxuries such as vacations in Florida and a boat slip.

To keep the payments secret from the school board and the community in the Madison Schools, Morrison, when publicly confronted at a Madison District school board meeting, denied having any financial ties to David or Emergency Restoration.  Morrison and David also failed to disclose to State of Michigan auditors the payments Morrison received from David.

“Our community deserves school systems free of corruption,” said U.S. Attorney Ison.  “This prosecution demonstrates our commitment to ensure that public officials in our educational systems put the interests of our children first.” 

“Mr. David guaranteed he would receive work funded by Madison District Public Schools not by participating in a fair and transparent process, but by bribing those in positions of power,” said James A. Tarasca, Special Agent in Charge of the FBI’s Detroit Field Office. “Public corruption is one of the FBI’s top investigative priorities because of the negative impact corruption has on the public’s faith in government agencies. The FBI, IRS, and Department of Education Office of Inspector General will continue to work cooperatively to hold those who engage in corrupt practices in our education system accountable for their crimes.”

Sentencing is set for August 14, 2023 at 1 PM.

The investigation of this case was conducted by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation Division, and the Department of Education. It is prosecuted by Assistant U.S. Attorneys Sarah Resnick Cohen, Karen Reynolds, and Gjon Juncaj.

Source: United States Department of Justice News

SAN JUAN, Puerto Rico –Walter Pierluisi Isern, Eduardo Pierluisi Isern, and American Management and Administration Corporation (AMAC) pleaded guilty today to one count of Theft of Federal Program Funds in relation to the misappropriation of operational funds provided by the United States Department of Housing and Urban Development (HUD) for the administration of public housing projects (PHPs) in Puerto Rico.

According to court documents, the defendants admitted to knowingly and intentionally stealing money from HUD federal assistance programs from 2014 to August 2022 for their own use and the use of others. The total amount of theft was approximately $3,712,000.00.

Given its fiduciary responsibility to manage millions in HUD funds and to operate over 5,000 housing units in 12 municipalities, AMAC was specifically prohibited from contracting with any company affiliated to AMAC or its officers. Walter Pierluisi Isern was the president and Eduardo Pierluisi Isern supervised the repair and maintenance work at the PHPs for AMAC during the duration of the fraudulent scheme.

The defendants admitted in their plea agreements that despite AMAC’s fiduciary obligations, Walter Pierluisi Isern and Eduardo Pierluisi Isern used their executive positions within AMAC to operate a fraudulent schemed designed to circumvent that prohibition. In furtherance of that scheme, they illegally caused operational funds from the federal assistance programs to be routed via corporations and subcontractors that they controlled, all to personally enrich themselves. The defendants further admitted that they caused AMCA to submit false certifications to HUD assuring that no conflict of interest existed between AMAC and the companies hired to provide operational services in violation of federal law.

As detailed in the proceedings, Walter Pierluisi Isern created contracts for FiveStar Pest Control, Inc. (FiveStar) and CoolBreeze Air Conditioning, Inc. (CoolBreeze) to provide services to PHPs under AMAC’s management. He then caused multiple payments to be made by FiveStar and CoolBreeze to funnel money to Docu‑Wharehouse, Pier Property, and XY Enterprises, subcontractors which were controlled and owned by Walter Pierluisi Isern. Through this scheme, Walter Pierluisi Isern illegally obtained approximately $2,035,498.86 in HUD funding that was earmarked for PHP operational expenses.

The admissions included the recognition that Eduardo Pierluisi Isern caused checks from FiveStar and CoolBreez to be issued to the names of others, which he then cashed and deposited into his personal bank account for his personal use and benefit. Through this scheme, Eduardo Pierluisi Isern illegally obtained approximately $363,202.28 in HUD funding that was earmarked for PHP operational expenses.  

AMAC, through its executives and officials, admitted to illegally diverting a total of $3,712,000 in HUD funding that was earmarked for PHP operational expenses.

The defendants have agreed to the entry of a restitution order in the favor of the United States in the amount of $3,712,000, equivalent to the amount of federal funds illegally obtained through the fraudulent scheme. The agreement to this restitution award is in addition to an agreement that the United States may also recommend a term of imprisonment as punishment for these crimes for Walter Pierluisi Isern and Eduardo Pierluisi Isern, which term of imprisonment shall be decided by the presiding judge at sentencing. 

“As today’s convictions demonstrate, those who attempt to defraud the U.S. government will be held accountable,” said W. Stephen Muldrow, United States Attorney for the District of Puerto Rico. “The defendants and their company harmed the integrity of a program designed to help underprivileged homeowners. Today’s plea agreement sends a clear message that any time U.S. dollars are misused and regardless of who steals taxpayer moneys, we will work tirelessly to pursue justice.”

“HUD programs are vital to the well-being of many low-income families in our communities and provide critical resources for those who need them the most,” said HUD OIG Special Agent in Charge, Jerome Winkle. “HUD OIG is committed to working with Federal prosecutors and law enforcement partners to aggressively pursue those who engage in activities that threaten the integrity of HUD programs.”

“Our call to action remains the same and we will investigate every allegation of public corruption to its last consequences,” said Special Agent in Charge of the FBI for Puerto Rico and the USVI, Joseph González. “I want to make clear we are not on any political side. The FBI is on the American people’s side and on the Constitution’s side. We will continue to work these cases, as we always have.”

The defendants are scheduled to be sentenced on July 11 and face a maximum sentence of 10 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The United States Department of Housing and Urban Development Office of Inspector General investigated this case with the assistance of the Federal Bureau of Investigation.  

Assistant U.S. Attorney Marie Christine Amy is prosecuting the case.

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