Category: US Department of Justice

Source: United States Department of Justice Criminal Division

Sikorsky Support Services Inc. (SSSI), a Delaware corporation headquartered in Stratford, Connecticut, and Derco Aerospace Inc. (Derco), a Wisconsin corporation headquartered in Milwaukee, Wisconsin, have agreed to pay $70 million to resolve False Claims Act allegations that they overcharged the Navy for spare parts and materials needed to repair and maintain the primary aircraft used to train naval aviators.

In a lawsuit filed in the U.S. District Court for the Eastern District of Wisconsin, the Justice Department alleged that SSSI and Derco, which were both wholly-owned subsidiaries of the same parent company, knowingly entered into an improper cost-plus-percentage-of-cost (CPPC) subcontract. Under that contract, SSSI agreed to purchase parts from Derco at the cost that Derco paid other suppliers for those parts, plus a fixed 32% markup. SSSI, in turn, submitted cost vouchers to the Navy for reimbursement of the amounts it paid to Derco. The government alleged that, by failing to disclose that the costs claimed by SSSI were the product of an illegal CPPC subcontract between SSSI and Derco, SSSI and Derco knowingly presented false and fraudulent cost vouchers to the Navy. The district court ruled that Derco’s markup violated a federal statute barring CPPC contracting, which Congress prohibited because it gives suppliers incentive to drive up government costs, as well as the terms of the prime contracts between SSSI and the Navy. 

“Government contractors must ensure their subcontracting arrangements comply with the law and with their contractual obligations,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Today’s settlement demonstrates that the Justice Department will ensure that government contractors do not skirt the law and engage in self-dealing that may artificially inflate their charges at the expense of the American taxpayers.” 

“The U.S. Attorney’s Office is committed to preventing fraud and protecting taxpayer money,” said U.S. Attorney Gregory J. Haanstad for the Eastern District of Wisconsin. “Government contractors must put compliance with the law ahead of profits. This settlement makes the United States whole for the inflated costs arising from SSSI’s and Derco’s illegal subcontract deterring future violations of the law.”

“Today’s settlement agreement should serve as a strong deterrent for those who seek to exploit the Department of Defense’s procurement process,” said Special Agent in Charge Darrin K. Jones of Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS), Southeast Field Office. “This investigation is part of an ongoing effort by the Defense Criminal Investigative Service and our partners to aggressively investigate defective pricing and cost mischarging schemes that put American taxpayer dollars at risk.”

“Overinflation of parts and material costs for the repair and maintenance of aircraft affected naval air training and is a disservice to the American taxpayer,” said Special Agent in Charge Greg Gross of the Naval Criminal Investigative Service (NCIS) Economic Crimes Field Office. “NCIS continues to safeguard the Department of the Navy’s warfighting efforts from economic crimes by upholding the integrity of the defense acquisition process.”

The settlement resolves a lawsuit filed under the qui tam or whistleblower provision of the False Claims Act, which permits 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 Act permits the United States to intervene and take over responsibility for litigating these cases, as the United States did here. The qui tam case is captioned United States ex rel. Patzer v. Sikorsky Aircraft Corp., Sikorsky Support Services Inc., and Derco Aerospace Inc., Case No. 11-0560 (E.D. Wis.) and was brought by Mary Patzer, a former employee of Derco.

The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section and the U.S. Attorney’s Office for the Eastern District of Wisconsin, with assistance from DCIS.

Trial Attorneys Alan Gale, Nelson Wagner and Gary Newkirk of the Civil Division’s Commercial Litigation Branch, Fraud Section and Assistant U.S. Attorney Michael Carter for the Eastern District of Wisconsin handled the matter.

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

Source: United States Department of Justice Criminal Division

The Justice Department today announced the opening of the application period for federally recognized Tribes and intertribal consortia to participate in the Tribal Access Program (TAP) for National Crime Information. TAP improves public safety by providing federally recognized Tribes the ability to access and exchange data with national crime information databases for authorized criminal justice and non-criminal justice purposes, such as the FBI’s National Crime Information Center (NCIC).

“The Department’s Tribal Access Program is a critical asset that Tribes can deploy to increase safety and justice in their communities,” said Deputy Attorney General Lisa Monaco. “Year in and year out, TAP’s value – enabling Tribes to access and exchange federal criminal justice information – has proven indispensable in advancing Tribal public safety across the country. I encourage all eligible Tribes to participate.”

“The Tribal Access Program is a highly valuable resource which aids in facilitating additional support to law enforcement partners and the communities they serve,” said FBI Deputy Director Paul Abbate. “TAP gives Tribal partners a mechanism to share and collaborate on time-sensitive information that can be used to help better serve and protect their communities. The program has already experienced tremendous success and this application period offers an opportunity to further expand this important tool to even more partners.”

The Department will accept TAP applications from June 24 to Aug. 30. Tribes selected to participate will be notified in September. There are currently 132 federally recognized Tribes participating in TAP.

The program provides software, hardware, and training, as well as a web-based application and biometric/biographic kiosk workstations to process fingerprints, take mugshots, and submit information to FBI Criminal Justice Information Services (CJIS) systems.

Using TAP, Tribes have shared information about missing persons; entered domestic violence orders of protection for nationwide enforcement; registered convicted sex offenders; run criminal histories; located fugitives; entered bookings and convictions; and completed fingerprint-based record checks for non-criminal justice purposes such as screening employees or volunteers who work with children.

“The Cherokee Nation has been participating in TAP for many years,” said Senior Director Justice Services Suzanne Drywater of the Cherokee Nation. “From sex offender registrations, law enforcement, foster home certification, human resources, and child support, our Tribe has been able to exercise our sovereignty, and TAP has proven to be an invaluable resource that we use daily in a multitude of ways.”

“TAP provides the Suquamish Tribal Police Department with access to national criminal justice information to properly conduct criminal investigations and to make NICS entries to prevent persons with legal restrictions from purchasing firearms,” said Administrative Services Manager Lisa Sparks of the Suquamish Tribal Police Department.

For Tribes that are considering applying, TAP staff will be conducting informational webinars describing the program and its capabilities. Webinars will be offered throughout July and August. For more information about TAP, including webinar dates, times, and access information, visit www.justice.gov/tribal/tribal-access-program-2024-applications.

To qualify for funding, federally recognized Tribes must have – and agree to use TAP for – at least one of the following:

• A Tribal sex offender registry authorized by the Adam Walsh Child Protection and Safety Act;
• A Tribal law enforcement agency that has arrest powers;
• A Tribal court that issues orders of protection; or
• A Tribal government agency that screens individuals for foster care placement or that investigates allegations of child abuse/neglect.

TAP is funded by the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking; the Office of Community Oriented Policing Services; the Office for Victims of Crime; and the Office on Violence Against Women. TAP is co-managed by the Department’s Office of the Chief Information Officer and Office of Tribal Justice.

Source: United States Department of Justice Criminal Division

The Justice Department issued the following statement from Attorney General Merrick B. Garland on the Supreme Court’s decision in United States v. Rahimi:

“The Supreme Court’s decision today in United States v. Rahimi upholds Congress’s longstanding prohibition on the possession of firearms by people subject to domestic-violence restraining orders. That law protects victims by keeping firearms out of the hands of dangerous individuals who pose a threat to their intimate partners and children.

As the Justice Department argued, and as the Court reaffirmed today, that commonsense prohibition is entirely consistent with the Court’s precedent and the text and history of the Second Amendment.

The Justice Department will continue to enforce this important statute, which for nearly 30 years has helped to protect victims and survivors of domestic violence from their abusers. And we will continue to deploy all available resources to support law enforcement, prosecutors, courts, and victim advocates to address the pervasive problem of domestic violence.”

Source: United States Department of Justice Criminal Division

A Florida man pleaded guilty yesterday to evading taxes on income he earned from commercial fishing in Massachusetts.

According to court documents and statements made in court, Christopher Garraty, of New Port Richey, and formerly of Newport and East Greenwich, Rhode Island, worked as a commercial fisherman and deckhand for fishing companies operating out of New Bedford, Massachusetts. Despite earning substantial income working as a fisherman, Garraty did not file until 2012 any federal income tax returns for tax years 2002 through 2011. When he filed the delinquent returns, he reported that he owed a total of approximately $234,497 in taxes for those nine years. But even after reporting that he owed taxes, Garraty did not make any payments to the IRS. In addition, Garraty did not file returns for 2015 through 2018 despite earning approximately $600,000 in fishing income across those years and owing approximately $179,382 in taxes.

To thwart the IRS from assessing or collecting his outstanding taxes, Garraty regularly cashed his paychecks at the issuing bank to conceal the source and disposition of his income. Garraty did not deposit a significant portion of his cashed paychecks into his bank accounts. Moreover, when his paycheck was over $10,000, Garraty frequently cashed the paycheck at the issuing bank and then immediately made multiple cash deposits of less than $10,000 into his bank account to avoid triggering the bank’s reporting requirements. He used the cash to fund his lifestyle to further conceal his financial activity.

In total, Garraty caused a tax loss to the IRS of approximately $413,879.

Garraty is scheduled to be sentenced on Sept. 17 and faces a maximum sentence of five years in prison, a period of supervised release, restitution and monetary penalties. A federal judge for the U.S. District Court for the District of Massachusetts 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 Acting U.S. Attorney Joshua S. Levy for the District of Massachusetts made the announcement.

IRS Criminal Investigation is investigating the case.

Trial Attorney Matthew L. Cofer of the Justice Department’s Tax Division and Assistant U.S. Attorney Victor Wild for the District of Massachusetts are prosecuting the case.

Source: United States Department of Justice Criminal Division

A federal jury in Las Vegas convicted five men this week for their roles in running one of the largest unauthorized streaming services in the United States, which generated millions of dollars in subscription revenue while causing substantial harm to television program copyright owners.

According to court documents and evidence presented at trial, beginning as early as 2007, Kristopher Dallmann, Douglas Courson, Felipe Garcia, Jared Jaurequi, and Peter Huber operated an online, subscription-based streaming service known as Jetflicks. The Jetflicks group used sophisticated computer scripts and software to scour pirate websites for illegal copies of television episodes, which they then downloaded and hosted on Jetflicks servers. The group reproduced hundreds of thousands of copyrighted television episodes without authorization, amassing a catalog larger than the combined catalogues of Netflix, Hulu, Vudu, and Amazon Prime. Dallmann and his co-conspirators made millions of dollars streaming and distributing this catalogue of stolen content to tens of thousands of paid subscribers.

“The defendants operated Jetflicks, an illicit streaming service they used to distribute hundreds of thousands of stolen television episodes,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “Their scheme generated millions of dollars in criminal profits, while causing copyright owners to lose out. These convictions underscore the Criminal Division’s commitment to protecting intellectual property rights by prosecuting digital piracy schemes and bringing offenders to justice.”

“The defendants conspired to operate an online streaming service that unlawfully reproduced and distributed thousands of copyrighted television programs for their own personal gain,” said U.S. Attorney Jason M. Frierson for the District of Nevada. “This case is another example of our steadfast commitment to combat intellectual property theft and to hold accountable those who violate intellectual property rights laws.”

“The defendants ran a platform that automated the theft of TV shows and distributed the stolen content to subscribers,” said Assistant Director in Charge David Sundberg of the FBI Washington Field Office. “When complaints from copyright holders and problems with payment service providers threatened to topple the illicit multimillion-dollar enterprise, the defendants tried to disguise Jetflicks as an aviation entertainment company. Digital piracy is not a victimless crime. As these convictions demonstrate, the FBI will indeed investigate those who illegally profit from the creative works of others.”

The jury convicted Dallman, Courson, Garcia, Jaurequi, and Huber of conspiracy to commit criminal copyright infringement. The jury also convicted Dallmann of two counts of money laundering by concealment and three counts of misdemeanor criminal copyright infringement. Courson, Garcia, Jaurequi, and Huber each face a maximum penalty of five years in prison, and Dallmann faces a maximum penalty of 48 years in prison. A sentencing date has not yet been set. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The FBI Washington Field Office investigated the case, with assistance from the FBI Las Vegas Field Office.

Trial Attorneys Michael Christin, Christopher Merriam, and Matthew Lamberti of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorneys Jessica Oliva and Edward Veronda for the District of Nevada are prosecuting the case, with assistance from the CCIPS Paralegal Edie Britman.