Archive

September 20, 2019

Pradyumna Kumar Samal, the former CEO of two Bellevue, Washington IT firms, has been sentenced to more than seven years in prison for his role in a long-running H1-B visa fraud scheme.  Samal's companies, Divensi and Azimetry, were employment agencies in the business of providing IT workers to major corporate clients.  Samal would submit fraudulent applications on behalf of foreign workers, claiming that they were being brought to the U.S. to perform a specific job, and instructing them to lie in their own applications, when, in fact, after being admitted, the employees would be benched and unpaid until Samal's companies were able to place them at actual client jobs.  In addition, Samal's companies failed to pay employment taxes on behalf of the foreign workers, instead diverting those funds to his personal use.  USAO WD WA

September 19, 2019

Following his conviction at trial in September 2018, Azam Doost, the owner of a marble mining company in Afghanistan, has been sentenced to 4.5 years in prison, and ordered to pay $8.9 million in forfeiture and restitution to the government.  Doost had been convicted for his role in fraudulently obtaining and failing to repay a $15.8 million loan from the Overseas Private Investment Corporation, a U.S. government agency, to Equity Capital Mining LLC, which Doost owned at the time.  DOJ

September 12, 2019

Italian textile company Miroglio Textile S.R.L. and its U.S. affiliate Miroglio Textiles USA, Inc. will pay $650,000 to resolve charges brought in a whistleblower action alleging that the companies fraudulently reduced their obligation to pay customs duties on fabrics, decals, and other products sold by the Italian company to U.S. customers. Without any bona fide business justification, the companies reported the imports as sales from the Italian company to the U.S. affiliate at discounted prices, and used those discounted prices as the basis to calculate duties.  These sales were shams, and Miroglio misrepresented their nature, and the relationship between the entities, in certifications to Customs & Border Protection.  USAO SDNY

August 27, 2019

Career Education Corporation (CEC) and its post-secondary school subsidiaries have agreed to pay the FTC $30 million to settle charges of using illegal means to market its schools.  In addition to calling numbers on the Do Not Call Registry, which violates the Telemarking Sales Rule, CEC also misrepresented to students that its schools were affiliated with or recommended by the military.  FTC

June 12, 2019

In connection with the development of the Lakeway Regional Medical Center in Texas, a number of individuals and entities have agreed to pay $1.1 million to resolve claims that they made false claims in obtaining a loan insured by the Federal Housing Administration under a HUD program that insures loans to build hospitals in underserved areas.  Pacific Medical Buildings LLC, PMB Lakeway LLC, RD Development Partners LLC, Lakeway Management LLC, J&L Rush Family Partnership LP, Jeff Rush, and Brad Daniel, were alleged to have delayed refunds to investors who had cancelled their investments in order to make it appear as if the project satisfied mortgage covenants regarding the cash on hand required to close the loan. The settlement also resolves allegations that the settling parties received impermissible distributions of project funds. DOJ

June 6, 2019

Joseph Bailey, the CEO of NYC-based children's clothing companies Stargate Apparel, Inc. and Rivstar Apparel, Inc., has been arrested, and the government has filed a civil complaint in intervention against all three, arising from their alleged actions in falsifying records regarding the value of goods imported to the U.S. in order to evade customs duty payment obligations.  Defendants allegedly engaged in double-invoicing schemes whereby a Chinese manufacturer would provide both a "pay by" invoice with the actual price, and a second, lower invoice, to be presented to Customs and Border Protection, or a "commercial invoice" and a second "sample invoice" in a larger amount, because sample goods are not subject to customs duties.  The schemes were first brought to the attention of federal law enforcement by a whistleblower who filed a lawsuit under the False Claims Act. USAO SDNY

May 21, 2019

DeKalb County, Georgia has agreed to pay the federal government $750,000 to settle claims that the county misused Department of Labor On-the-Job Training program grant funds.  OTJ funds are required to be used to reimburse employers that hire individuals with identified skills gaps.  The government alleged that DeKalb county falsely certified that it was complying with OTJ regulations, and used the funds to subsidize the wages of highly qualified county employees, allegedly requiring some to sign paperwork saying that they had received OTJ services when they had not.  USAO ND GA

May 15, 2019

Robert C. Leonard, CEO of Force Multiplier Solutions, has been ordered to pay $125 million in restitution for his part in a bribery scheme which took down public officials and brought about the collapse of Dallas County Schools. Mr. Leonard pleaded guilty to conspiracy to commit honest services wire fraud and was sentenced to seven years in federal prison.  DOJ

May 13, 2019

British fashion company Selective Marketplace Ltd., which sells products in the U.S. under its brand names Wrap London and Poetry, will pay $610,000, to resolve a whistleblower suit under the False Claims Act alleging that it improperly broke up U.S.-bound orders into multiple shipments in order to keep the shipment values below the $200 limit that would obligate the payment of customs duties.  The whistleblowers, Kristin and Stephen Vale, will receive a share of the settlement proceeds.  USAO ME

May 9, 2019

After previously paying restitution of $150,000 to NASA and $50,000 to the National Science Foundation (NSF), the Chicago-based operator of Aries Design Automation LLC was sentenced to three months in prison for defrauding the Small Business Innovation Research Program (SBIRP). To obtain $200,000 in grants and participate in federally-sponsored research, Miroslav Velev submitted false statements, including falsely representations to NASA and the NSF that Aries had secured required third party investments.  USAO NDIL