Month: June 2024

Source: United States Department of Justice Criminal Division

A New Jersey man pleaded guilty today to engaging in an extensive, multi-year conspiracy to fraudulently obtain over $54.7 million in loans and to fraudulently acquire multifamily and commercial properties.

According to court documents, between 2016 and 2022, Aron Puretz, 53, conspired with others to deceive lenders into issuing multifamily and commercial mortgage loans. Puretz and his co-conspirators provided the lenders with fictitious documents, including purchase contracts with inflated purchase prices, fake financial statements, and other fraudulent documents. Puretz was an employee of Apex Equity Group, a real estate investment and advisory firm, and one of the owners of Maple Lawn in Eureka, Illinois, and Big Country Chateau in Little Rock, Arkansas, both multifamily properties, and Troy Technology Park in Troy, Michigan, a commercial property.

In February 2017, Maple Lawn was acquired for $4.1 million. However, Puretz and his co-conspirators from Apex Equity Group utilized the identity of a co-conspirator to present a lender and Freddie Mac with a purchase and sale contract for $5.8 million and other fraudulent documents. On Feb. 17, 2017, a title and settlement company based in Lakewood, New Jersey, performed two closings, one for the true $4.1 million sales price and another for the fraudulent $5.8 million sales price presented to the lender. Furthermore, part of the conspiracy was to create a nonprofit entity, JPC Charities, for the purpose of receiving tax-exempt status for the properties owned by Puretz and co-conspirators. Puretz and co-conspirators provided false statements to the city of Eureka, Illinois, to receive a property tax exception. 

In July 2019, Puretz and his co-conspirators acquired Big Country Chateau. However, Puretz knew the lender and Freddie Mac would not approve him as an owner, and used the identity of an associate instead of his own. Furthermore, Puretz hid his ownership and involvement with the property management company from the Department of Housing and Urban Development and other federal and state agencies. 

In September 2020, Troy Technology Park was acquired for $42.7 million. However, Puretz and his co-conspirators presented the lender with a fraudulent purchase and sale contract for $70 million. Additionally, to support the inflated purchase price, Puretz and his co-conspirators submitted to the lender and appraiser a fraudulent letter of intent to purchase the property from another party for $68 million and other fraudulent documents. To conceal the fraudulent nature of the transaction, Puretz and his co-conspirators arranged for a short-term $30 million loan, which was used to make it appear that they had the funds needed to close on the loan. On Sept. 25, 2020, a title and settlement company based in Lakewood, New Jersey, performed two closings, one for the true $42.7 million sales price and another for the fraudulent $70 million sales price presented to the lender.

Puretz pleaded guilty to one count of conspiracy to commit wire fraud affecting a financial institution. He is scheduled to be sentenced on Oct. 30 and faces a maximum penalty of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division; U.S. Attorney Philip R. Sellinger for the District of New Jersey; Inspector General Brian M. Tomney of the Federal Housing Finance Agency Office of Inspector General (FHFA-OIG); and Postal Inspector in Charge Eric Shen of the U.S. Postal Inspection Service’s (USPIS) Criminal Investigations Group made the announcement.

FHFA-OIG and USPIS are investigating the case.

Trial Attorney Siji Moore of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Martha Nye for the District of New Jersey are prosecuting the case.

Source: United States Department of Justice Criminal Division

A New York woman pleaded guilty today to fraudulently destroying over 2,600 COVID-19 vaccines and issuing a corresponding number of fraudulent COVID-19 vaccination record cards.

According to court documents, Kathleen Breault, 66, of Cambridge, a midwife at Sage-Femme Midwifery PLLC (Safe-Femme), an authorized COVID-19 vaccine administration site in Albany, New York, conspired to obstruct the government’s distribution of COVID-19 vaccines by providing COVID-19 vaccination record cards to individuals who were not vaccinated, including to minors who were at the time ineligible to be vaccinated and to Canadian citizens who were not present in the United States when they were purportedly vaccinated. In addition to destroying COVID-19 vaccines and issuing fraudulent vaccination record cards, Breault and her co-conspirators made over 2,600 false entries into a New York State database that tracked COVID-19 vaccine distribution. Breault agreed to pay more than $37,000 in restitution for the destroyed vaccines.    

Breault pleaded guilty to conspiring to defraud the United States and its departments and agencies. She is scheduled to be sentenced on Sept. 18 and faces a maximum penalty of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division; U.S. Attorney Breon Peace for the Eastern District of New York; Assistant Director Michael Nordwall of the FBI’s Criminal Investigative Division; and Assistant Director in Charge James H. Smith III of the FBI New York Field Office made the announcement.

The FBI is investigating the case, with assistance from the New York State Department of Health.

Trial Attorneys Patrick J. Campbell and Hyungjoo Han of the Criminal Division’s Fraud Section are prosecuting the case.

The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,400 defendants who collectively have billed federal health care programs and private insurers more than $27 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the Department of Health and Human Services Office of Inspector General, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.

Source: United States Department of Justice Criminal Division

The Justice Department announced today that it secured a settlement agreement with California staffing agency Selective Personnel Inc. (SPI). The agreement resolves the department’s determination that SPI’s predecessor business entity, South Bay Safety (SBS), violated the Immigration and Nationality Act (INA) by regularly discriminating against non-U.S. citizens when checking their permission to work in the United States. 

“Employers cannot demand specific documents from workers because of their citizenship status when checking their permission to work,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Civil Rights Division is committed to protecting workers from discriminatory practices that create unnecessary barriers to employment.”

After conducting an investigation, the Civil Rights Division’s Immigrant and Employee Rights Section (IER) concluded that, between at least September 2020 and at least October 2022, SBS required that non-U.S. citizens present specific types of documentation reflecting their immigration status to prove their permission to work. In contrast, U.S. citizens could present any acceptable document of their choosing. Based on its investigation, IER concluded that SPI was a successor in interest to SBS, and liable for the violations that IER found.

Under the settlement, SPI will pay civil penalties to the United States, train its employees on the INA’s requirements, revise its employment policies and be subject to departmental monitoring. 

U.S. citizens, U.S. nationals, lawful permanent residents, those granted asylum, refugees and other non-U.S. citizens with permission to work may legally work in the United States if they can prove their identity and permission to work. Federal law allows all workers to choose which valid, legally acceptable documentation to present to prove their identity and permission to work, regardless of citizenship status, immigration status or national origin. The INA’s anti-discrimination provision prohibits employers from asking for specific or unnecessary documents because of a worker’s citizenship, immigration status or national origin. Employers must allow workers to present whatever acceptable documentation the workers choose and cannot reject valid documentation that reasonably appears to be genuine and to relate to the worker.

IER is responsible for enforcing the anti-discrimination provision of the INA. The statute prohibits citizenship status and national origin discrimination in hiring, firing or recruitment or referral for a fee; unfair documentary practices and retaliation and intimidation.   

Find more information on how employers can avoid discrimination when verifying someone’s permission to work on IER’s website. Learn more about IER’s work and how to get assistance through this brief video. Applicants or employees who believe they were discriminated against based on their citizenship, immigration status or national origin in hiring, firing, recruitment or during the employment eligibility verification process (Form I-9 and E-Verify); or subjected to retaliation, may file a charge. The public can also call IER’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired); call IER’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); sign up for a live webinar or watch an on-demand presentation; email IER@usdoj.gov or visit IER’s English and Spanish websites. Sign up for email updates from IER.

Source: United States Department of Justice Criminal Division

Director Rachel Rossi of the Office for Access to Justice (ATJ) traveled to Los Angeles last week to engage access to justice stakeholders and deliver the commencement address at Le Lycée Franҫais de Los Angeles.

To further inform the office’s broad-ranging efforts to support reentry and reduce recidivism, Director Rossi and ATJ staff conducted visits with leading criminal justice reentry organizations. Director Rossi first met with Executive Director Sam Lewis of the Anti-Recidivism Coalition and Deputy Director Dana Jackson, where they discussed strategies to eliminate barriers faced by formerly incarcerated people when reentering society, and how these efforts must begin during incarceration. She then visited Homeboy Industries, the largest gang intervention, rehabilitation and reentry program in the world. At Homeboy Industries, she toured the main facility and met with staff and the founder, Father Gregory Boyle, a recipient of the Presidential Medal of Freedom in May.

Next, Director Rossi and ATJ staff met with representatives of the Inter-Agency Los Angeles Federal Pro Bono Committee. Agencies represented included leadership from the U.S. Attorney’s Office for the Central District of California and officials from the Department of Labor, Department of Homeland Security and Justice Department’s Executive Office of Immigration Review. The meeting highlighted the importance of regional pro bono committees to encourage and promote federal employee engagement in pro bono opportunities, as one strategy the office deploys through the Federal Government Pro Bono Program. She then met with Black faith leaders representing various churches from across Los Angeles County, convened by Elder Joe Paul at the Peoples’ Independent Church of Christ. The meeting focused on the front-line justice needs impacting local communities, including housing, access to public benefits, safety, civil rights, public school collaboration to address the barriers faced by children in underserved communities and the urgent need to address issues within the child welfare system for Black families.

The next day, Director Rossi and ATJ staff convened local stakeholders to discuss the significant challenges they face in providing for basic legal aid and language access needs in Los Angeles. They met with stakeholders from 23 legal services and community-based language justice organizations, as well as representatives from the City and County of Los Angeles. Director Rossi discussed ATJ initiatives to expand support for legal services providers and language access. She heard from stakeholders on a wide range of topics including, eviction, homelessness, federal funding for legal aid, translation and interpretation resource needs and advocacy surrounding language justice policies. The convening included leaders and staff from the Los Angeles Civil Rights Department, Mayor’s Office of Immigrant Affairs, Office of Immigration Inclusion and Language Access in the City of LA, Legal Aid Foundation of Los Angeles, Bet Tzedek Legal Services, Public Counsel, Asian-Americans Advancing Justice, Inner City Law Center, Mental Health Advocacy Services and Los Angeles Dependency Lawyers, among others.

Following the convening, Director Rossi met the Federal Public Defender for the Central District of California, Cuauhtemoc Ortega, to discuss support for access to counsel, public defense and access to justice. She also met with Ricardo Garcia, Los Angeles County Public Defender, who oversees the nation’s first and largest public defender office. In this meeting they discussed public defense workload standards, federal resources like ATJ’s Public Defense Resource Hub for state and local public defenders and recruitment and retention trends in public defense that are impacting access to justice for vulnerable, marginalized and underserved communities. 

Director Rossi and ATJ staff then met with the Presiding Judge Samantha Jessner of the Los Angeles Superior Court (LASC) and the Executive Officer and Clerk of Court for LASC, David Slayton. Director Rossi discussed the launch of Access DOJ, the first localized human-centered design hub at the Justice Department, led by ATJ, working to make Justice Department programs and services more accessible, effective and efficient. The meeting focused on shared experiences, given a new human-centered design partnership between LASC, the largest trial court in the nation, and the Deborah L. Rhode Center for the Legal Profession at Stanford Law School. That effort will research, design and implement innovative, evidence-based approaches to reduce barriers to participation in the judicial process and to improve access to justice for all court users in Los Angeles.

To conclude the trip, Director Rossi gave the commencement address at Le Lycée Franҫais de Los Angeles, an international school with students representing over 62 nationalities, and specializing in bilingual French/American education. In her remarks, Director Rossi described ATJ’s mission, highlighted several ATJ initiatives, including language access, related experiences from her legal career and encouraged the students to pursue justice in through all career paths.

Source: United States Department of Justice Criminal Division

A Florida tax return preparer was sentenced today to 30 months in prison, two years of supervised release and to pay $970,970 in restitution for conspiring to defraud the United States by preparing and filing false tax returns for clients. 

According to court documents and statements made in court, from 2017 through 2020, John Borgela ran Empire Tax Services (Empire) with his co-conspirator Phedson Dore and filed hundreds of false returns each year. Borgela typically inflated tax withholdings and reported fictitious itemized deductions to generate refunds for clients to which they were not entitled. To conceal his participation in the fraud, Borgela did not list on the returns his name as the person who prepared them or include Empire’s electronic filing number (EFIN). Instead, he used his employees’ names and the EFINs of other return preparation businesses.

Borgela and his co-conspirator caused a loss to the IRS of approximately $970,000. Dore was sentenced in February to 24 months in prison for his role in the conspiracy.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Roger B. Handberg for the Middle District of Florida made the announcement.

IRS Criminal Investigation investigated the case.

Trial Attorneys Brian Flanagan and Marissa Brodney of the Justice Department’s Tax Division and Assistant U.S. Attorney Shannon Laurie for the Middle District of Florida prosecuted the case.