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DOJ Enforcement Actions

					
The Department of Justice is the principal federal agency authorized to enforce the laws and defend the interests of the United States. As such, it oversees the enforcement of the False Claims Act, the foundation of the American whistleblower system, as well as numerous other laws.


The agency traces its origins to the Judiciary Act of 1789 which created the Office of the Attorney General, and the 1870 Act to Establish the Department of Justice, which established the agency as “an executive department of the government of the United States” with the Attorney General as its head.


The agency is comprised of numerous divisions with the Civil Division and in some instances, the Criminal Division, overseeing investigations and prosecutions under the False Claims Act. The U.S. Attorneys Office of the federal district where the False Claims Act case is filed also plays a key role in False Claims Act enforcement.


Below are summaries of recent DOJ settlements or successful resolutions under the False Claims Act as well as other successful prosecutions for fraud and misconduct. If you believe you have information about fraud which could give  rise to a claim for a whistleblower reward, please contact us to speak with one of our experienced whistleblower attorneys.

				

			

			
						
					
			

	
		
		

			

				
				
November 24, 2014

				 Two Northern California real estate investors, Su Chu Chou “Terry” Cheng and Chung Li “George” Cheng, agreed to plead guilty for their role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California. According to the government, between May 2008 and January 2011, George and Terry Cheng conspired with others not to bid against one another, and instead designated a winning bidder to obtain selected properties at public real estate foreclosure auctions in Alameda and Contra Costa counties. To date, as a result of DOJ’s ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions in Northern California, 49 individuals have agreed to plead or have pleaded guilty. DOJ				 					 

						
Tagged in:
													  Bribery and Bid-Rigging, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 24, 2014

				 Continental Automotive Electronics LLC andContinental Automotive Korea Ltd. have agreed to plead guilty and pay a single criminal fine of $4M for their roles in a conspiracy to rig bids of instrument panel clusters installed in vehicles sold to Hyundai Motor Co., Kia Motors Corp. and Kia Motors Manufacturing Georgia in the US and elsewhere. Instrument panel clusters are a set of instruments located on the dashboard of a vehicle that contain gauges such as a speedometer, tachometer, odometer, and fuel gauge, as well as warning indicators. 32 companies and 46 executives now have been charged in DOJ’s ongoing investigation into the automotive parts industry. Each of the charged companies have pleaded guilty and agreed to pay more than $2.4B in criminal fines. Of the 46 individuals, 26 have been sentenced to serve time in U.S. prisons. DOJ				 			
	
		
		
	


 			




	
		
		

			

				
				
November 21, 2014

				 Three Miami real estate developers, Stavroula Mendez, Lazaro Mendez and Marie Mendez, were convicted for their roles in a $20M mortgage fraud scheme involving the sale of condominium units in the Miami area. DOJ				 			
	
		
		
	


 			




	
		
		

			

				
				
November 21, 2014

				 A California man, Shahin Abdollahi, aka Sean Holdt, was sentenced to serve 18 months in prison and ordered to pay $34,712 in restitution, for remotely hacking into the computerized cash registers of Subway restaurants and fraudulently obtaining more than $40,000 in gift cards. Abdollahi admitted he owned Subway franchises in Southern California, and later operated a California company called “POS Doctor,” which sold and installed point-of-sale (POS) computer systems to Subway franchises around the country. Abdollahi further acknowledged he and Jeffrey Wilkinson conspired to remotely hack into the POS systems he installed in Subway franchises around the country. DOJ				 			
	
		
		
	


 			




	
		
		

			

				
				
November 21, 2014

				 Credit Suisse AG was sentenced today for conspiring to assist US taxpayers file false income tax returns the IRS. Credit Suisse pleaded guilty to conspiracy on May 19. The plea agreement, along with agreements made with state and federal agencies, provides that Credit Suisse will pay a total of approximately $2.6B: approximately $1.8B in a criminal fine and restitution, $100M to the Federal Reserve and $715M to the New York State Department of Financial Services. As part of the plea agreement, Credit Suisse acknowledged that, for decades prior to and through 2009, it operated an illegal cross-border banking business that knowingly and willfully aided and assisted thousands of U.S. clients in opening and maintaining undeclared accounts and concealing their offshore assets and income from the IRS. DOJ				 					 

						
Tagged in:
													  Abusive Tax Shelters, 
													  Tax Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 19, 2014

				 President and founder of Happy’s Pizza, Happy Asker, was convicted of tax fraud. From June 2004 through April 2011, Asker, along with certain franchise owners and employees, executed a tax fraud scheme in which they substantially underreported gross sales and payroll amounts to the IRS for nearly all 60 Happy’s Pizza franchise restaurants located in Michigan, Ohio and Illinois. The IRS is owed more than $6.2 million in taxes as a result of this fraud scheme. DOJ				 			
	
		
		
	


 			




	
		
		

			

				
				
November 19, 2014

				 ConvergEx Global Markets Limited (CGM Limited), a brokerage subsidiary of ConvergEx Group LLC, was sentenced and ordered to pay a criminal penalty and restitution of $26M for wire fraud and conspiracy to commit securities and wire fraud in connection with a scheme to charge clients millions of dollars in unwarranted and hidden fees. The company pleaded guilty on Dec. 18, 2013. In total, CGM Limited and ConvergEx Group will pay $43.8M in criminal penalties and restitution. DOJ				 			
	
		
		
	


 			




	
		
		

			

				
				
November 19, 2014

				 Washington Gas Energy Systems agreed to pay more than $2.5M for conspiring to commit fraud by illegally obtaining contracts that were meant for small, disadvantaged businesses. It is a wholly owned subsidiary of WGL Holdings Inc., the parent company for all of the corporations within the Washington Gas family. According to the government, WGESystems conspired with a company that was eligible to receive federal government contracts set aside for small, disadvantaged businesses with the understanding that the business would illegally subcontract all of the work on the projects to WGESystems. In this way, WGESystems was able to capture a total of eight contracts worth almost $18M that should have gone to an eligible company. DOJ				 					 

						
Tagged in:
													  Government Procurement Fraud, 
													  Set-Asides and Preferences, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
November 18, 2014

				 Christopher Gabel, former chief operating officer of a Miami-area hospital Hollywood Pavilion LLC, pleaded guilty for his role in a mental health care fraud scheme that resulted in the submission of more than $67M in fraudulent claims to Medicare. According to Gabel’s admissions, between April 2003 and September 2012, the hospital submitted fraudulent claims to Medicare for mental health treatment that was not medically necessary or not provided. DOJ				 			
	
		
		
	


 			




	
		
		

			

				
				
November 17, 2014

				 New York environmental remediation firm Sevenson Environmental Services Inc. agreed to pay more than $2.7M to resolve allegations it violated the False Claims Act and the Anti-Kickback Act by accepting kickbacks, rigging bids and passing inflated charges to the US Environmental Protection Agency (EPA) in connection with work performed at the Federal Creosote Superfund Site in Manville, New Jersey. According to the government, Sevenson solicited and accepted more than $1.6M in kickbacks from six companies in exchange for the award of subcontracts for work at the Federal Creosote Site. DOJ				 					 

						
Tagged in:
													  Bribery and Bid-Rigging, 
													  Environmental Fraud, 
												
						

					
	
							
	
		
		
	


 			


											

						

								

									
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