Month: October 2024

Source: United States Department of Justice Criminal Division

A federal court has prohibited two Dallas-area physicians from prescribing opioids and other controlled substances and imposed a total of $1.2 million in judgments against them in a case alleging the physicians violated the Controlled Substances Act (CSA), the Justice Department announced today.

In a civil complaint filed in 2019 in the Northern District of Texas, the United States alleged that Cesar B. Pena Rodriguez M.D. and Leovares A. Mendez M.D. violated the CSA by issuing prescriptions for opioids and other powerful drugs outside the usual course of professional practice and not for a legitimate medical purpose. The complaint alleged that the defendants issued thousands of prescriptions without apparent regard for patient harm, including prescriptions for a combination of an opioid, a short-acting benzodiazepine, and a muscle relaxer — a dangerous and frequently-abused drug cocktail known as the “trinity.” In an order filed Oct. 8, the court imposed a $291,451 civil penalty judgment against Mendez in addition to a $914,021 civil penalty judgment against Pena Rodriguez entered earlier this year.

“Prescribing opioids for no legitimate purpose betrays the trust placed in our medical professionals and significantly threatens the communities they serve,” said Principal Deputy Assistant Attorney General Brian Boynton, head of the Justice Department’s Civil Division. “The Justice Department will continue to use every available tool to stop doctors who fail to uphold their obligation to prescribe controlled substances lawfully.”

“Doctors are charged with protecting and healing us when we are sick and vulnerable. Instead of healing vulnerable members of our community, these doctors sought to profit off of their addictions,” said U.S. Attorney Leigha Simonton for the Northern District of Texas. “The U.S. Attorney’s Office’s Civil Division, in conjunction with our partners in the Consumer Protection Branch, sought immediate injunctive relief to prevent these doctors from prescribing to addicts and have now terminated their ability to ever put their patients at risk in this way again.”

“Peña-Rodríguez and Mendez were distributing deadly controlled substances mix known as the ‘trinity’ outside the course of a legitimate medical need, simply to get rich,” said Special Agent in Charge Eduardo A. Chávez of the Drug Enforcement Administration (DEA) Dallas. “Following our successful criminal prosecution, we issued a trinity of ourselves through not just criminal penalties, but now civil and administrative ones as well. Standards for our medical professionals must stay high because patients deserve a doctor they can trust. We will continue to partner with the U.S. Attorney’s Office to seek all avenues of justice and accountability against all medical providers who violate their code of conduct.”

The defendants agreed to consent judgments to settle the allegations in the complaint. The orders entered by the court permanently prohibit Pena Rodriguez and Mendez from ever again prescribing, dispensing, administering or distributing controlled substances. The orders also bar them from holding DEA registrations or working at, supervising or owning a medical practice where controlled substances are present.

In a separate criminal action, Pena Rodriguez previously pleaded guilty to one count of conspiracy to unlawfully distribute controlled substances. Mendez was found guilty at a jury trial of one count of conspiracy to distribute a controlled substances and six counts of unlawful distribution of controlled substances. Mendez was sentenced to seven years in prison. Dr. Pena Rodriquez was sentenced to two years in prison.

The DEA investigated the case.

Assistant U.S. Attorney Sarah Delaney for the Northern District of Texas and Trial Attorney Scott B. Dahlquist of the Civil Division’s Consumer Protection Branch prosecuted the case.

The claims made in the complaint are allegations that the United States would need to prove by a preponderance of the evidence if the case proceeded to trial.

Source: United States Department of Justice Criminal Division

A New Jersey man pleaded guilty today to tax evasion for evading employment tax penalties assessed against him.

According to court documents and statements made in court, Joseph Caravella, of Randolph, owned several masonry companies in New Jersey. From 2008 to 2016, the IRS assessed approximately $650,000 in Trust Fund Recovery penalties against Caravella for causing three masonry businesses that he owned to not pay their federal employment taxes. From around March 2008 through in or around April 2019, Caravella sought to evade the payment of these penalties by placing companies that he controlled in the names of nominee owners and avoiding using a bank account in his own name to prevent the IRS from levying the funds. Also during that time, Caravella continued to cause his businesses not to pay employment taxes, resulting in an additional loss of $1.2 million to the IRS.

In total, Carvalla caused a tax loss to the IRS of $1,885,519.39.

Caravella is scheduled to be sentenced on March 18. He faces a maximum penalty of five years in prison, a period of supervised release, restitution and monetary penalties. A federal judge 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 Philip R. Sellinger for the District of New Jersey made the announcement.

IRS Criminal Investigation are investigating the case.

Trial Attorneys Kenneth Vert and Evan Mulbry of the Tax Division and Assistant U.S. Attorney Shontae Gray for the District of New Jersey are prosecuting the case.

Source: United States Department of Justice Criminal Division

Two former Crawford County, Arkansas, sheriff’s deputies were sentenced for using unlawful force on a man they arrested. Levi White, 34, was sentenced yesterday to 63 months in prison, and Zackary King, 28, was sentenced today to 12 months in prison.

Each defendant pleaded guilty to one count of deprivation of rights under color of law for a retaliatory assault on R.W., a 26-year-old man. On Aug. 21, 2022, White, King and a third officer approached R.W. in a gas station parking lot during their investigation into a person threatening a store attendant. R.W. lunged at White and tackled him, then all three officers quickly subdued R.W. and pinned him to the ground. After R.W. was pinned to the ground and no longer fighting the officers, White punched R.W. at least nine times in the head, then lifted R.W.’s head and slammed it into the pavement. King kicked R.W. in the back and struck R.W. once in the midsection with his fist. Following the announcement of a federal investigation into the assault, White obstructed the investigation by wiping all data from his county-issued cell phone and selectively deleting text messages about the incident from his personal phone. White asked King if King was also going to wipe his cell phone, but King declined to do so.

“Punching a man in the head, slamming their head repeatedly on the concrete pavement, kicking them in the back and striking them in the midsection — this kind of gratuitous and unjustified violence at the hands of law enforcement runs contrary to the oath that officers take in our country to protect and serve,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The defendants swore an oath to uphold the law, then violated that oath and abused their power as law enforcement officers by assaulting a person in their custody. At the time of the assaults, three officers had already subdued the victim, and further force was unnecessary and unlawful. White added fuel to the fire by taking steps to obstruct the investigation into the violent assault. The Justice Department will continue to vigorously prosecute officers who abuse their authority and violate the rights of people in their custody.”

“Levi White and Zackary King’s sentencings prove that no law enforcement officer is above the law,” said Special Agent in Charge Alicia D. Corder of the FBI Little Rock Field Office. “FBI Little Rock, alongside our trusted partners at Arkansas State Police, will continue to investigate potential abuses of power and civil rights violations throughout our state. We encourage anyone who has information about abusive or corrupt law enforcement to contact the FBI’s ArkTrust Task Force immediately.”

The FBI Little Rock Field Office and Arkansas State Police investigated the case.

Assistant U.S. Attorneys Dustin Roberts and Devon Still for the Western District of Arkansas and Special Litigation Counsel Michael J. Songer and Trial Attorneys Lia Rettammel and Anna Gotfryd of the Justice Department’s Civil Rights Division prosecuted this case.

Source: United States Department of Justice Criminal Division

The Justice Department announced today that Citadel Federal Credit Union (Citadel) has agreed to pay over $6.5 million to resolve allegations that it engaged in a pattern or practice of lending discrimination by redlining predominantly Black and Hispanic neighborhoods in and around Philadelphia. This landmark agreement is the Justice Department’s first redlining settlement with a credit union, making this a historic achievement for the Combating Redlining Initiative.

Redlining is an illegal practice in which lenders avoid providing credit services to individuals living in communities of color because of the race, color or national origin of residents in those communities.

“This redlining settlement marks the Justice Department’s very first resolution involving a credit union, making clear our intent to hold all types of lenders accountable for their role in modern-day redlining,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “There are well over 4,600 credit unions across America, all subject to federal laws that prohibit redlining and lending discrimination. Redlining and other forms of lending discrimination harm communities of color and families by denying them an equal opportunity to access credit, attain the dream of homeownership and build generational wealth. This settlement will expand investment in Black and Hispanic communities, particularly in Philadelphia, and increase opportunities for homeownership and financial stability. Residents of communities harmed by unlawful redlining will finally be able to access credit services from Citadel in their own neighborhoods, including at the new branches required by the settlement.”

“For generations, Philadelphia’s communities of color have lacked equal access to the credit needed for homeownership. We know that redlining has a devastating impact on a family’s finances and future, and results in economic and other inequalities that plague our communities for decades,” said U.S. Attorney Jacqueline C. Romero for the Eastern District of Pennsylvania. “We also know the transformational change that can occur when credit is made available to underserved residents, and particularly when lenders, like Citadel, establish branch locations in these neighborhoods.”

The Justice Department’s complaint, which was filed today in the Eastern District of Pennsylvania, alleges that, from at least 2017 through 2021, Citadel failed to provide mortgage lending services to majority-Black and Hispanic neighborhoods in and around Philadelphia and discouraged people seeking credit in those communities from obtaining home loans. Citadel’s home mortgage lending was focused disproportionately on white areas around Greater Philadelphia. Peer lenders generated mortgage applications in predominately Black and Hispanic neighborhoods at nearly three times the rate of Citadel and originated mortgage loans in these areas at more than three times the rate of Citadel.

The complaint further alleges that Citadel’s branches are located almost exclusively in majority-White neighborhoods, with no branches in Philadelphia, which contains more than 75% of the majority-Black and Hispanic neighborhoods and 34% of the total population in Citadel’s market area.

Under the proposed consent order, which is subject to court approval, Citadel has agreed to invest $6.52 million to increase credit opportunities for communities of color in and around Philadelphia. Specifically, Citadel will:

• Invest at least $6 million in a loan subsidy fund to increase access to home mortgage, home improvement and home refinance loans for residents of majority-Black and Hispanic neighborhoods in Philadelphia;
• Spend at least $250,000 on community partnerships to provide services related to credit, consumer financial education, homeownership and foreclosure prevention for residents of predominantly Black and Hispanic neighborhoods in Citadel’s market area;
• Spend at least $270,000 for advertising, outreach, consumer financial education and credit counseling focused on predominantly Black and Hispanic neighborhoods in Philadelphia;
• Open three new branches in predominantly Black and Hispanic neighborhoods in Philadelphia; and
• Hire a community lending officer who will oversee the continued development of lending in communities of color.

Citadel also agreed to retain independent consultants to enhance its fair lending program and better meet the communities’ needs for mortgage credit. The credit union will conduct a community credit needs assessment, evaluate its fair lending compliance management systems, and conduct staff trainings.

With assets of approximately $6 billion, Citadel is headquartered in Pennsylvania and operates 24 branches in its market area of Greater Philadelphia, which includes Bucks, Chester, Delaware, Lancaster, Montgomery and Philadelphia Counties. Citadel is the second largest credit union in the region and has over 263,000 members. Citadel cooperated with the Justice Department’s investigation.

In October 2021, Attorney General Merrick B. Garland and Assistant Attorney General Clarke launched the Justice Department’s Combating Redlining Initiative, a coordinated enforcement effort to address this persistent form of discrimination against communities of color. Since 2021, the department has announced 14 redlining resolutions and secured over $144 million in relief for communities of color that have been the victims of lending discrimination across the country. In March, Assistant Attorney General Clarke presented remarks to America’s Credit Unions’ Governmental Affairs Conference regarding the unique issues raised by redlining in the credit union industry.

A copy of the complaint and information about the Justice Department’s fair lending enforcement work can be found at www.justice.gov/fairhousing. Individuals may report lending discrimination by calling the Justice Department’s housing discrimination tip line at 1-833-591-0291 or submitting a report online.