Category: US Department of Justice

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.

Source: United States Department of Justice Criminal Division

A federal jury in the District of Columbia today convicted former Officer Philip Dupree, 38, of the Fairmount Heights Police Department in Maryland, for using excessive force.

“Police brutality and violent misconduct against defenseless people are disgraceful acts that have no place in our society today,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “When law enforcement officers abuse their power, it erodes trust with the communities they are sworn to protect and serve. The victim was handcuffed and already restrained in the back of the defendant’s squad car at the time of the assault. The Justice Department is committed to holding accountable law enforcement officers who violate the civil and constitutional rights of those in their custody.”

“We depend on law enforcement officers to protect our communities from crimes and to protect our civil rights while doing so,” said U.S. Attorney Matthew M. Graves for the District of Columbia. “An officer who abuses his authority breaks the community’s trust and unfairly tarnishes the reputation of the vast majority of officers who do their jobs the right way. The jury found that the defendant broke that trust when he unjustly and unreasonably used force and violence against a fellow citizen.”

“Law enforcement officers swear to protect the people they serve, including those in their custody,” said Assistant Director in Charge David Sundberg of the FBI Washington Field Office. “Dupree defiled that responsibility and violated a man’s civil rights. As this case demonstrates, the FBI will not hesitate to investigate officers of the law who engage in misconduct, including those who use excessive force.”

During a weeklong jury trial, the evidence showed that, during the early morning hours of Aug. 4, 2019, Dupree was on duty as a Fairmont Heights Police Officer when he conducted a traffic stop in the District of Columbia. Dupree detained a man identified as T.S. and then deployed pepper spray as T.S. was handcuffed and seated in the back of Dupree’s police car. The government argued, and the jury found, that Dupree’s use of force was a violation of T.S.’ right to be free from excessive force by a law enforcement officer.

A sentencing hearing will be set at a later date. Dupree faces a maximum penalty of 10 years in prison for his alleged use of unreasonable force.

The FBI Washington Field Office is investigating the case.

Trial Attorney Sanjay Patel of the Justice Department’s Civil Rights Division and Assistant U.S. Attorneys Kathryn Rakoczy and Christopher Howland for the District of Columbia are prosecuting the case.

Source: United States Department of Justice Criminal Division

The Justice Department, together with the Federal Trade Commission (FTC), today announced a civil enforcement action against Adobe Inc. and two Adobe executives, Maninder Sawhney and David Wadhwani, for alleged violations of the Restore Online Shoppers’ Confidence Act (ROSCA). The lawsuit alleges that the defendants imposed a hidden “Early Termination Fee” on millions of online subscribers and that Adobe forced subscribers to navigate a complex and challenging cancellation process designed to deter them from cancelling subscriptions they no longer wanted.

Adobe Inc. is a software company that offers online subscriptions to design and productivity software applications via its website, Adobe.com. David Wadhwani is Adobe’s President of Digital Media Business, and Maninder Sawhney is Adobe’s Vice President of Digital Go to Market & Sales.

According to a complaint filed in the U.S. District Court for the Northern District of California, the defendants have systematically violated ROSCA by using fine print and inconspicuous hyperlinks to hide important information about Adobe’s subscription plans, including about a hefty Early Termination Fee that customers may be charged when they cancel their subscriptions. The complaint alleges that for years, Adobe has profited from this hidden fee, misleading consumers about the true costs of a subscription and ambushing them with the fee when they try to cancel, wielding the fee as a powerful retention tool.

The complaint alleges that Adobe has further violated ROSCA by failing to provide consumers with a simple mechanism to cancel their recurring, online subscriptions. Instead, Adobe allegedly protects its subscription revenues by thwarting subscribers’ attempts to cancel, subjecting them to a convoluted and inefficient cancellation process filled with unnecessary steps, delays, unsolicited offers and warnings.

The lawsuit seeks unspecified amounts of consumer redress and monetary civil penalties from the defendants, as well as a permanent injunction to prohibit them from engaging in future violations.

“The Justice Department is committed to stopping companies and their executives from preying on consumers who sign up for online subscriptions by hiding key terms and making cancellation an obstacle course,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will continue to enforce ROSCA against those who engage in such misconduct. No company, whether it is a small business or a member of the Fortune 500 like Adobe, is above the law.”

“Companies that sell goods and services on the internet have a responsibility to clearly and prominently disclose material information to consumers,” said U.S. Attorney Ismail J. Ramsey for the Northern District of California.  “It is essential that companies meet that responsibility to ensure a healthy and fair marketplace for all participants.  Those that fail to do so, and instead take advantage of consumers’ confusion and vulnerability for their own profit, will be held accountable.”

“Adobe trapped customers into year-long subscriptions through hidden early termination fees and numerous cancellation hurdles,” said Director Samuel Levine of the FTC’s Bureau of Consumer Protection. “Americans are tired of companies hiding the ball during subscription signup and then putting up roadblocks when they try to cancel. The FTC will continue working to protect Americans from these illegal business practices.”

Trial Attorneys Francisco L. Unger, Amber M. Charles, Zachary L. Cowan and Wesline N. Manuelpillai of the Civil Division’s Consumer Protection Branch and Assistant Director Zachary A. Dietert are handling the case, with assistance by Assistant U.S. Attorney David M. DeVito for the Northern District of California, in coordination with staff at the FTC’s Bureau of Consumer Protection.

For more information about the Consumer Protection Branch and its enforcement efforts, visit www.justice.gov/civil/consumer-protection-branch. For more information about the FTC, visit www.FTC.gov.

A complaint is merely a set of allegations that, if the case were to proceed to trial, the government would need to prove by a preponderance of the evidence.

Source: United States Department of Justice Criminal Division

The Justice Department announced today that the Civil Rights Division and U.S. Attorneys’ Offices for the Eastern, Northern, Southern and Western Districts of Texas secured settlement agreements with Colorado County, Runnels County, Smith County and Upton County to resolve the department’s findings that the counties violated Title II of the Americans with Disabilities Act (ADA) by maintaining election websites that discriminate against individuals with vision or manual disabilities.

“Voting in the 21st century requires that officials make their websites accessible to people with disabilities,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Discriminatory barriers on election websites can prevent people with disabilities from exercising their right to vote. These agreements should send a message to state and local officials across the country about the importance of ensuring that their election websites are accessible for voters with disabilities so that they can participate equally in our democratic process.”

The election websites for these four Texas counties provide essential information about how to vote, such as registration requirements, identification requirements and voting information for people with disabilities. The websites also link to other critical information, including details about early voting and voting on election day.

Under the settlement agreements, the counties agreed to make all future and existing online election content accessible to people with disabilities. The counties also agreed to hire an independent auditor to evaluate the accessibility of their election websites’ content, adopt new policies and training for relevant personnel, provide notice to visitors and users of the websites to solicit comments and requests about any accessibility barriers and designate an employee to coordinate its efforts.

These four investigations are part of the department’s ADA Voting Initiative, which safeguards the voting rights of individuals with disabilities. To read more about the ADA and how it applies to voting, please visit www.ada.gov/topics/voting/. These settlement agreements also are part of the Civil Rights Division’s Tech Equity Initiative to combat disability discrimination that occurs through technology such as websites and mobile apps.

Source: United States Department of Justice Criminal Division

Guidehouse Inc., headquartered in McLean, Virginia, has paid $7,600,000 and Nan McKay and Associates (Nan McKay), headquartered in El Cajon, California, has paid $3,700,000 to resolve allegations that they violated the False Claims Act by failing to meet cybersecurity requirements in contracts intended to ensure a secure environment for low-income New Yorkers to apply online for federal rental assistance during the COVID-19 pandemic.

In early 2021, Congress established the emergency rental assistance program (ERAP) to provide financial assistance to eligible low-income households to cover the costs of rent, rental arrears, utilities and other housing-related expenses during the COVID-19 pandemic. Participating governments were required to establish programs to distribute the federal funding to eligible tenants and landlords. In New York, the Office of Temporary and Disability Assistance (OTDA) was the state agency responsible for administering New York’s ERAP. In May 2021, Guidehouse and OTDA entered a contract under which Guidehouse, as the prime contractor, assumed responsibility for the New York ERAP, including for the ERAP technology and services provided to New Yorkers. Nan McKay, in turn, served as Guidehouse’s subcontractor and was responsible for delivering and maintaining the ERAP technology product used in New York to fill out and submit online applications requesting rental assistance (ERAP Application).

Guidehouse and Nan McKay shared responsibility for ensuring that the ERAP Application underwent cybersecurity testing in its pre-production environment before it was launched to the public. As part of the settlements announced today, Guidehouse and Nan McKay admitted that neither satisfied their obligation to complete the required pre-production cybersecurity testing. The state’s ERAP went live on June 1, 2021. Twelve hours later, OTDA shut down the ERAP website after determining that certain applicants’ personally identifiable information (PII) had been compromised and portions were available on the internet. Guidehouse and Nan McKay acknowledged that had either of them conducted the contractually-required cybersecurity testing, the conditions that resulted in the information security breach may have been detected and the incident prevented.

In addition, as part of its settlement, Guidehouse admitted that for a short time period in 2021, it used a third-party data cloud software program to store personally identifiable information without first obtaining OTDA’s permission, in violation of its contract.

“Federal funding frequently comes with cybersecurity obligations, and contractors and grantees must honor these commitments,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The Justice Department will continue to pursue knowing violations of material cybersecurity requirements aimed at protecting sensitive personal information.”

“Contractors who receive federal funding must take their cybersecurity obligations seriously,” said U.S. Attorney Carla B. Freedman for the Northern District of New York. “We will continue to hold entities and individuals accountable when they knowingly fail to implement and follow cybersecurity requirements essential to protect sensitive information.”

“These vendors failed to meet their data integrity obligations in a program on which so many eligible citizens depend for rental security, which jeopardized the effectiveness of a vital part of the government’s pandemic recovery effort,” said Acting Inspector General Richard K. Delmar of the Department of the Treasury. “Treasury OIG is grateful for DOJ’s support of its oversight work to accomplish this recovery.”

“This settlement sends a strong message to New York State contractors that there will be consequences if they fail to safeguard the personal information entrusted to them or meet the terms of their contracts,” said New York State Comptroller Thomas P. DiNapoli. “Rental assistance has been vital to our economic recovery, and the integrity of the program needs to be protected. I thank the United States Department of Justice, United States Attorney for the Northern District of New York Freedman and the United States Department of Treasury Office of the Inspector General for their partnership in exposing this breach and holding these vendors accountable.” 

On Oct. 6, 2021, the Deputy Attorney General announced the department’s Civil Cyber-Fraud Initiative, which aims to hold accountable entities or individuals that put sensitive information at risk by knowingly providing deficient cybersecurity products or services, knowingly misrepresenting their cybersecurity practices or protocols or knowingly violating obligations to monitor and report cybersecurity incidents. Information on how to report cyber fraud can be found here.

The United States’ investigation was prompted by a lawsuit filed under the whistleblower provisions of the False Claims Act, which permit private parties to sue on behalf of the government when they believe that defendants submitted false claims for government funds, and to receive a share of any recovery. The settlement agreements in this case provide for the whistleblower, Elevation 33 LLC, an entity owned by a former Guidehouse employee, to receive a $1,949,250 share of the settlement amounts. The case is captioned United States ex rel. Elevation 33, LLC v. Guidehouse Inc. et al., Case No. 1:22-cv-206 (N.D.N.Y.)

Trial Attorney J. Jennifer Koh of the Civil Division’s Commercial Litigation Branch, Fraud Section and Assistant U.S. Attorney Adam J. Katz for the Northern District of New York handled this matter, with assistance from the Department of the Treasury OIG and the Office of the New York State Comptroller.