Author: MIL-OSI Publisher

Source: United States Department of Justice

The Justice Department, the Environmental Protection Agency (EPA) and the New Mexico Environment Department (NMED) today announced a proposed settlement with HF Sinclair Navajo Refining LLC, an HF Sinclair Corp. subsidiary, resolving alleged Clean Air Act and New Mexico Air Quality Control Act violations at the company’s oil refinery in Artesia, New Mexico.

Under the settlement, HF Sinclair Navajo must pay a civil penalty of $35 million, owed in equal shares to the United States and the State of New Mexico. The company must implement compliance measures at an estimated cost of $137 million, including significant capital investments, to reduce emissions at its refinery. The compliance measures are projected to achieve reductions of:

• 180 tons per year of hazardous air pollutants, including benzene,
• 2,716 tons per year of volatile organic compounds (VOCs),
• 51 tons per year of NOx and
• 31 tons per year of sulfur dioxide (SO₂).

These include reductions already achieved in response to EPA’s investigations. All told, the emission reductions have a related climate benefit of reducing 97,551 tons per year of carbon dioxide emission equivalence.

HF Sinclair Navajo also must operate 10 real-time air pollution monitors along the refinery fence line and one real-time air pollution monitor and six other passive monitors in the town of Artesia to measure refinery air pollution emissions and make the results available on a public website.

The refinery is adjacent to a community overburdened by pollution. This settlement is part of the Justice Department and EPA’s ongoing commitment to address unlawful pollution in historically marginalized and disproportionally impacted communities.

“This settlement reinforces the United States’ commitment to protect communities from illegal refinery benzene and VOC emissions,” said Acting Assistant Attorney General Katherine E. Konschnik of the Justice Department’s Environment and Natural Resources Division (ENRD). “Under the settlement, the refinery will make significant capital investments in pollution controls and implement additional programs to improve air quality and reduce health impacts on the residents of Artesia, including the students at Roselawn Elementary School.”

“HF Sinclair Navajo’s failure to monitor and control the release of benzene, a known carcinogen, and other hazardous and toxic air pollutants posed a significant threat and potential health risks to the nearby community,” said Acting Assistant Administrator Cecil Rodriguez of EPA’s Office of Enforcement and Compliance Assurance. “The monitoring required by today’s settlement will ensure that the community and state and federal regulators will have real-time emissions data to help ensure the community is protected against future health impacts from the refinery’s operations.”

“The fenceline community in Artesia has lived with the burden of benzene and VOC emissions for many years. This settlement is an overdue step in bringing them some relief from the potential health effects of these pollutants,” said EPA Regional Administrator Dr. Earthea Nance. “The Roselawn Elementary School, just hundreds of feet away from the HF Sinclair refinery, is a reminder of how critical our rulemaking and enforcement efforts are to protecting the health and environment of impacted citizens.”

“Today’s settlement continues to hammer home that if you don’t follow through on your commitments to clean air by following our rules, permits, or prior settlement agreements, you will pay for it in fines,” said Secretary James Kenney of NMED. “Today’s action not only obtains civil penalties — it forces the Artesia Refinery to invest in a number of projects to benefit our state, including improving controls for cancer-causing benzene emissions and other pollutants that infringe on New Mexicans’ right to breathe clean air.”

HF Sinclair Navajo has agreed to take the necessary measures to address the refinery’s failure to comply with regulations that govern a wide range of refinery equipment and operations, including flaring, fenceline monitoring of benzene emissions, wastewater, storage vessels, heat exchanger leaks and leak detection and repair.

These failures are alleged in the United States’ complaint, filed simultaneously with the settlement, and resulted in the release of hazardous air pollutants and VOCs directly into the air. The company will address these failures by:

• Installing a flare gas recovery system that will reduce VOC, SO₂, and NOx, and greenhouse gas emissions;
• Implementing capital investments and additional upgrades to wastewater equipment to reduce benzene in wastewater streams and an enhanced monitoring program to more quickly identify and address air pollution emissions;
• Implementing numerous projects, such as the installation of geodesic domes, for storage vessels to reduce VOC emissions and an enhanced and innovative monitoring program to more quickly identify and address air pollution emissions;
• Strengthening leak detection and repair practices at the refinery to lower VOC and HAP emissions from process equipment and
• Implementing an enhanced inspection and chemical monitoring program of heat exchangers to more quickly identify VOC and HAP emissions from cooling towers.

In 2018 and 2019, monitoring at the refinery recorded the highest refinery fenceline benzene concentrations in the country. Under the settlement HF Sinclair Navajo agreed to operate and maintain air pollution monitors at the facility fenceline and in the community at an estimated cost of $1.8 million. The monitoring will help ensure compliance with Clean Air Act’s regulations, and help the company identify and address potentially harmful emission sources more quickly. Additionally, the fenceline and community monitoring will help regulators and the community hold HF Sinclair Navajo accountable for harmful air pollutants entering the community.

Benzene is known to cause cancer in humans and is associated with short-term and long-term inhalation exposure risks. VOCs, along with nitrous oxide, play a major role in the atmospheric reactions that produce ozone, which is the primary constituent of smog. Ground-level ozone exposure is linked to a variety of short- and long-term health problems.

HF Sinclair Corp. is a publicly traded energy company headquartered in Dallas. The Artesia refinery serves markets in the southwestern United States and has a crude oil capacity of 100,000 barrels per day.

The proposed consent decree was filed with the U.S District Court for the District of New Mexico and is subject to a 30-day comment period. The complaint and the proposed consent decree are available at www.justice.gov/enrd/consent-decrees.

EPA and NMED investigated the case.

Attorneys with ENRD’s Environmental Enforcement Section are handling the case.

Source: United States Department of Justice Criminal Division

A Virginia man pleaded guilty yesterday to real estate and tax fraud related to his scheme to obtain title to a $1.3 million home in Roanoke County. Specifically, he pleaded guilty to conspiring to commit wire fraud, wire fraud, mail fraud, bank fraud and filing false claims against the United States.

According to court documents and statements made in court, Herman Estes filed a false amended income tax return for 2021 claiming he was entitled to a tax refund of $18.3 million. In March 2023, Estes made a $1.3 million cash offer for a property on Old Mill Plantation Road in Roanoke County.  To legitimize this offer, Estes provided the parties to the transaction with a proof of funds letter that Estes created using an online form. Estes also provided the real estate agent with a number for his co-conspirator who he claimed was his trust manager with authority to approve the offer. The co-conspirator purported to approve Estes’ use of his trust funds for the real estate transaction.

As payment for the property, Estes tendered a fraudulent cashier’s check that he had signed in the amount of $1,307,199.43 purportedly drawn on the Federal Reserve Bank of Richmond. Funds in that amount were debited to the settlement company’s trust account before the check was identified as fraudulent.

In March 2023, Estes filed another false tax return claiming he was entitled to a $2.9 million refund.

Estes will be sentenced at a later date. He faces a maximum penalty of 20 years in prison for the wire fraud conspiracy, wire fraud and mail fraud counts, a maximum penalty of 30 years in prison for bank fraud and a maximum penalty of five years in prison for the false claims counts, plus additional potential penalties related to the commission of these offenses while released on bond. Estes also faces a period of supervised release, restitution and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Deputy Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division and Acting U.S. Attorney Zachary T. Lee for the Western District of Virginia made the announcement.

The Bureau of Alcohol, Tobacco, Firearms, and Explosives and IRS Criminal Investigation are investigating the case.

Trial Attorney Andrew Ascencio of the Tax Division and Assistant U.S. Attorney Lee Brett for the Western District of Virginia are prosecuting the case. Former Assistant U.S. Attorney Kristin Johnson for the Western District of Virginia assisted in the investigation and prosecution.

Source: United States Department of Justice Criminal Division

Extensive coordination and cooperation efforts between U.S. and Mexican law enforcement authorities resulted in the extradition of a human smuggler who allegedly participated in an international human smuggling conspiracy.

Monica Hernandez-Palma, also known as Moni, 32, a Mexican national, was arrested in Mexico pursuant to a U.S. request for her extradition and surrendered by Mexico to U.S. authorities yesterday to face charges previously filed in the Western District of Texas. Hernandez-Palma made her initial appearance today in the Western District of Texas, where an indictment against her was unsealed.

According to the indictment, beginning in November 2020 and continuing through September 2023, Hernandez-Palma conspired with others to bring and attempt to bring migrants to the United States illegally for commercial advantage and private financial gain.

Hernandez-Palma is charged with one count of conspiracy to bring a migrant to the United States at a place other than a designated port of entry and three counts of bringing a migrant to the United States without authorization and for purpose of commercial advantage and private financial gain. If convicted, she faces a maximum sentence of 10 years in prison on each count. 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 Brent S. Wible, head of the Justice Department’s Criminal Division; U.S. Attorney Jaime Esparza for the Western District of Texas; and Special Agent in Charge Craig S. Larrabee of Homeland Security Investigations (HSI) San Antonio made the announcement.

The Office of the Assistant Special Agent in Charge HSI Del Rio investigated this case, with assistance from the U.S. Border Patrol Del Rio Sector, HSI Human Smuggling Unit in Washington, D.C., and Customs and Border Protection’s National Targeting Center.

Trial Attorney Jenna Reed of the Criminal Division’s Human Rights and Special Prosecutions Section (HRSP) and Assistant U.S. Attorney Holly Pavlinski for the Western District of Texas are prosecuting the case.

The Justice Department’s Office of International Affairs (OIA) provided significant assistance in securing the defendant’s arrest and extradition from Mexico. The Justice Department thanks its Mexican law enforcement partners, who were instrumental in arresting and extraditing Hernandez-Palma.

The investigation and prosecution of Hernandez-Palma is being coordinated through the Justice Department Criminal Division’s Joint Task Force Alpha (JTFA). JTFA was created in June 2021 by Attorney General Merrick B. Garland, in partnership with Secretary of Homeland Security Alejandro N. Mayorkas, to strengthen the Justice Department’s efforts to combat the rise in prolific and dangerous smuggling emanating from Central America and impacting our border communities. JTFA’s goal is to disrupt and dismantle human smuggling and trafficking networks operating in El Salvador, Guatemala, Honduras, and Mexico, with a focus on networks that endanger, abuse, or exploit migrants, present national security risks, or engage in other types of transnational organized crime.

Since its creation, JTFA has successfully increased coordination and collaboration between the Justice Department, Department of Homeland Security, and other U.S. law enforcement agencies, and with foreign law enforcement partners, including in El Salvador, Guatemala, Honduras, and Mexico; targeted those organizations that have the most impact on the United States; and coordinated significant human smuggling indictments and extradition efforts in U.S. Attorneys’ Offices across the country. In June, the initiative was expanded to Colombia and Panama to combat human smuggling in the Darién. JTFA is comprised of detailees from southwest border U.S. Attorneys’ Offices, including the Southern and Western Districts of Texas, District of New Mexico, District of Arizona, and Southern District of California. Dedicated support for the program is also provided by numerous components of the Justice Department’s Criminal Division that are part of JTFA, led by HRSP and supported by the Office of Overseas Prosecutorial Development, Assistance and Training; Narcotic and Dangerous Drug Section; Money Laundering and Asset Recovery Section; Office of Enforcement Operations; OIA; and Violent Crime and Racketeering Section.

This investigation is also supported by the Extraterritorial Criminal Travel Strike Force (ECT) program, a partnership between the Justice Department’s Criminal Division and HSI. The ECT program focuses on human smuggling networks that may present particular national security or public safety risks or raise grave humanitarian concerns. ECT has dedicated investigative, intelligence, and prosecutorial resources. ECT also coordinates and receives assistance from other U.S. government agencies and foreign law enforcement authorities.

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 Criminal Division

The Justice Department announced today that it has entered into a settlement agreement with the Orange County Sheriff’s Department on the use of custodial informants by the Orange County Sheriff’s Department in California. The agreement, together with an earlier agreement with the Orange County District Attorney, fully resolves the department’s civil investigation into custodial informant activity at the Orange County Jails from 2007 through 2016 that violated criminal defendants’ right to counsel under the Sixth Amendment and right to due process of law under the 14th Amendment to the U.S. Constitution.  

The agreement with the Orange County Sheriff will ensure that reforms put in place by the sheriff since suspending the use of custodial informants in 2016 provide appropriate protections against future violations. Under the agreement, the sheriff agrees to maintain changes to policies, training, document and information systems and audits in a manner that permits effective oversight of the custodial informant practices at the Orange County jails. The sheriff also agrees to solicit feedback on additional improvements from members of the criminal justice system in Orange County and to publish information about its reform efforts. The department will have full and direct access to independently validate that the Sheriff’s Department has sustained the reforms.

“We applaud the sheriff for his proactive efforts instituting key improvements to prevent the misuse of custodial informants at the Orange County Jails and to assist prosecutors in meeting their fundamental disclosure obligations while pursuing justice,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The robust and transparent validation measures in today’s agreement will strengthen the public’s trust in the sheriff’s Department and uphold the constitutional rights of criminal defendants in custody. The sheriff’s cooperation and adoption of reforms have helped narrow the scope and expected duration of the out-of-court agreement and, together with a related agreement reached with the Orange County District Attorney, will provide for continuation of the necessary collaboration and information sharing.”

The department opened its investigation into the Orange County Sheriff’s Department and the Orange County District Attorney’s Office in 2016. The evidence uncovered by the department revealed that custodial informants in the Orange County Jail system acted as agents of law enforcement to elicit incriminating statements from defendants represented by counsel, and that for years Orange County sheriff deputies maintained and concealed systems to track, manage and reward those custodial informants. The evidence also revealed that Orange County prosecutors failed to seek out and disclose exculpatory information regarding custodial informants to defense counsel.

The Civil Rights Division’s Special Litigation Section conducted the investigation pursuant to 34 U.S.C. § 12601. The statute prohibits state and local governments from engaging in a pattern or practice of conduct by law enforcement officers that deprives individuals of rights protected by the Constitution or federal law.

Since January 2021, the Civil Rights Division has opened 12 investigations into law enforcement agencies. The section is enforcing 15 agreements with law enforcement agencies and two post-judgment orders. The department also reached a court enforceable agreement with Louisville, Kentucky, and Minneapolis, Minnesota to resolve its findings. Both are pending review by the court.

The memorandum of agreement between the department and Orange County Sheriff’s Department can be found here, and the department’s investigative findings from October 2022 can be found here.

Information about the Civil Rights Division is available at www.justice.gov/crt.

Source: United States Department of Justice

Torrance, California-based chain of skilled nursing facilities Unified Care Services LLC (Unified Care), its affiliates and its owner, Emmanual David, have agreed to pay $18 million to resolve allegations that they violated the False Claims Act (FCA) by knowingly providing false information in support of Paycheck Protection Program (PPP) loan applications and loan forgiveness applications submitted by Unified Care and its affiliates.

The PPP, an emergency loan program established by Congress in March 2020 under the Coronavirus Aid, Relief and Economic Security (CARES) Act and administered by the Small Business Administration (SBA), was intended to support small businesses struggling to pay employees and other business expenses during the COVID-19 pandemic. Borrowers were eligible to seek forgiveness of the loans if they spent the loan proceeds on employee payroll and other eligible expenses. Only small businesses were eligible for PPP loans. Whether an applicant qualified as a small business was determined by assessing the employees, revenues, or net worth of the applicant along with all corporate affiliates that shared common operational control. When applying for PPP loans, borrowers were required to certify the truthfulness and accuracy of all information provided in their loan applications, including their size and number of employees.

The settlement resolves allegations that Unified Care and its affiliates falsely certified they were small business with fewer than 500 employees when they submitted their PPP loan and loan forgiveness applications in 2020. These applications allegedly failed to disclose that the entities applying were part of a larger chain of facilities that all shared common ownership and control that rendered Unified Care and its affiliates ineligible for PPP loans. The Unified Care affiliates covered by the settlement include: Unified Care Services LLC; Casa Montana LLC; Geri-Care Inc.; Geri Care V LLC; Pacific Palms Healthcare LLC; Foothill Care Center Inc.; Mount Megiddo LLC; Canyon Properties III LLC; Cloverleaf Enterprises Inc.; Foothill Care Center LLC; Foothill Care Center II LLC; David Kleis III LLC; David Kleis II LLC; Miramonte Enterprises LLC; and Washington Enterprises III LLC.

“PPP loans were intended to assist eligible small businesses during the pandemic,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “When ineligible businesses improperly obtained loans, they harmed both the taxpayers who funded the program and the eligible businesses who were denied relief.”

“COVID-relief programs were designed to help people and businesses during the worst public health crisis this nation had seen in one century,” said U.S. Attorney Martin Estrada for the Central District of California. “My office will continue to pursue those who knowingly cheat taxpayers by violating PPP and other pandemic-related programs.”

“This resolution demonstrates the department’s commitment to ensuring that those who improperly obtain federally guaranteed PPP loans are held accountable and funds repaid to the American taxpayer” said Director of COVID-19 Fraud Enforcement Mandy Riedel of the Justice Department.

“The SBA Office of Inspector General is committed to ensuring the integrity of CARES Act programs,” said Special Agent in Charge Weston King of the SBA Office of Inspector General, Western Region. “Through partnerships with federal agencies, we continue to identify fraud schemes and protect relief funds from misuse.”

The settlement resolved a lawsuit filed under the qui tam or whistleblower provisions of the False Claims Act, which permit private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The qui tam lawsuit is captioned United States ex rel. Ashwani Chawla v. Unified Care Services et al., CV 21-5935-GW (CDCA). The whistleblower will receive $2,070,000 in connection with the settlement.

The resolution obtained in this matter was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Central District of California, with assistance from the SBA’s Office of General Counsel (SBA-OGC) and the SBA Office of Inspector General (SBA-OIG).

Senior Trial Counsel Benjamin C. Wei of the Justice Department’s Civil Division and Assistant U.S. Attorney Jack Ross for the Central District of California handled the matter, with assistance from Mary Cvengros of SBA-OGC and Christopher H. Stephens of SBA-OIG.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Justice Department in partnership with agencies across the federal government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international actors committing civil and criminal fraud and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit www.justice.gov/coronavirus.

Tips and complaints from all sources about potential fraud affecting COVID-19 government relief programs can be reported by visiting the webpage of the Civil Division’s Fraud Section, which can be found here. Anyone with information about allegations of attempted fraud involving COVID-19 can also report it by calling the Justice Department’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

The claims resolved by the settlement are allegations only. There has been no determination of liability.