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January 20, 2017

Orange County Men Plead Guilty to Hiding Millions of Dollars in Secret Foreign Bank Accounts

Filed under: California Defense Attorney — fayarfa @ 4:48 am

SANTA ANA, California – Three Orange County residents pleaded guilty today to willfully failing to report their foreign bank accounts in Switzerland and Israel, the Justice Department announced.

Dan Farhad Kalili, 55, of Irvine, California; his brother, David Ramin Kalili, 52, of Newport Coast; and his brother-in-law, David Shahrokh Azarian, 67, also of Newport Coast, admitted that they willfully failed to file Reports of Foreign Bank and Financial Accounts (FBARs) with the Internal Revenue Service (IRS) regarding secret bank accounts in Switzerland and in Israel that each respectively maintained and controlled, many for well over a decade. These secret accounts held assets that reached into the millions of dollars.

“The days of being able to safely hide income and assets offshore and evade U.S. tax have come to an end,” said Principal Deputy Assistant Attorney General Ciraolo. “The United States and foreign jurisdictions are sharing information and working together to ensure that citizens around the world are paying their fair share. The guilty pleas entered today are yet another example of what awaits U.S. taxpayers who continue to flout the law.”

“Foreign bank accounts are not a haven for hiding money from the Internal Revenue Service,” said United States Attorney Eileen M. Decker. “These defendants took affirmative steps to hide income from federal authorities, but their efforts will now cost each of them hundreds of thousands of dollars in penalties for violating U.S. laws.”

“David and Dan Kalili and David Azarian disregarded their legal responsibility to file the required report of foreign bank accounts and report all their income and interest,” said Chief Richard Weber of IRS Criminal Investigation. “Regardless of where the money is hidden around the world, IRS-CI will follow the sophisticated financial transactions and ensure everyone is held accountable for the taxes they are required to pay.”

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Owner of Palmdale Tax Service Arrested on Tax Fraud Charges

Filed under: California Defense Attorney — fayarfa @ 4:45 am

LOS ANGELES – The owner/operator of a Palmdale tax preparation business has been arrested on federal charges that he prepared and filed fraudulent federal income tax returns on behalf of his clients.

Oscar D. Alcerro, Jr., 31, the owner of Juniors Tax Service, Inc., was arrested yesterday by special agents with IRS Criminal Investigation pursuant to an indictment returned last month by a federal grand jury.

The 31-count indictment charges Alcerro with aiding and assisting in the preparation of fraudulent income tax returns.

The indictment alleges that over the course of several years – for the 2010 through 2013 tax years – Alcerro prepared and filed tax returns that claimed false itemized deductions on behalf of 11 clients. The taxpayers for whom the tax returns were prepared were not entitled to claim the deductions on the tax returns, which were filed without them knowing about the fraudulent deductions. The fraudulent tax returns included false deductions for personal property taxes, mortgage interest expense, gifts to charity and unreimbursed employee expenses. In one instance, the false deductions taken on the tax return totaled more than $57,500.

“Tax return preparers who are involved in the filing of false tax returns victimize their clients and the United States Treasury,” said United States Attorney Eileen M. Decker. “With the start of the 2017 filing season upon us, taxpayers should know that the Justice Department will hold these return preparers accountable for their conduct.”

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January 19, 2017

U.K. Man Who Came to U.S. to Have Sex with Boys Sentenced to 13 Years in Federal Prison for Transporting Child Pornography

Filed under: California Defense Attorney — fayarfa @ 10:29 am

LOS ANGELES – A British man who traveled to the Coachella Valley to have sex with pre-teen boys and later pleaded guilty to transportation of child pornography was sentenced today to 13 years in federal prison.

Paul Charles Wilkins, 70, of Littleport in East Cambridgeshire, England, a dual United States-United Kingdom citizen, was sentenced this morning by United States District Judge Dolly M. Gee.

In addition to the prison term, Judge Gee ordered Wilkins to pay a $25,000 criminal fine and a $5,000 special assessment under the Justice for Victims of Trafficking Act of 2015. Following the completion of his prison term, Wilkins be on supervised release for the rest of his life.

Wilkins pleaded guilty in September to one count of transportation of child pornography. When he pleaded guilty, Wilkins admitted that he traveled to the United States from the United Kingdom in January 2016 for the purpose of having sex with two brothers who were 10 and 12 at the time. When that plan fell apart, Wilkins made arrangements with an undercover law enforcement officer to have sex with a 9-year-old boy in exchange for $250 at an apartment he had rented. Additionally, Wilkins admitted he possessed child pornography on his computer and brought child pornography from the United Kingdom into the United States, including graphic sexual images of boys between the ages of 5 and 8.

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Southern California Residents Plead Guilty to Hiding Millions of Dollars in Secret Foreign Bank Accounts

Filed under: California Defense Attorney — fayarfa @ 10:26 am

Three Orange County, California residents pleaded guilty today to willfully failing to report their foreign bank accounts in Switzerland and Israel, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division.

Dan Farhad Kalili, 55, a resident of Irvine, California, together with his brother, David Ramin Kalili, 52, and his brother-in-law, David Shahrokh Azarian, 67, residents of Newport Coast, California, admitted that they willfully failed to file Reports of Foreign Bank and Financial Accounts (FBARs) with the Internal Revenue Service (IRS) regarding secret bank accounts in Switzerland and in Israel that each respectively maintained and controlled, many for well over a decade. These secret accounts held assets that reached into the millions of dollars.

“The days of being able to safely hide income and assets offshore and evade U.S. tax have come to an end,” said Principal Deputy Assistant Attorney General Ciraolo. “The United States and foreign jurisdictions are sharing information and working together to ensure that citizens around the world are paying their fair share. The guilty pleas entered today are yet another example of what awaits U.S. taxpayers who continue to flout the law.”

“David and Dan Kalili and David Azarian disregarded their legal responsibility to file the required report of foreign bank accounts and report all their income and interest,” said Chief Richard Weber of IRS Criminal Investigation. “Regardless of where the money is hidden around the world, IRS-CI will follow the sophisticated financial transactions and ensure everyone is held accountable for the taxes they are required to pay.”

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United States Files Consent Decree of Permanent Injunction Against California Dietary Supplement Manufacturer to Stop Distribution of Adulterated and Misbranded Dietary Supplements

Filed under: California Defense Attorney — fayarfa @ 10:23 am

The Department of Justice filed a complaint in the U.S. District Court for the Central District of California seeking a permanent injunction against VivaCeuticals Inc., doing business as Regeneca Worldwide, and its CEO Matthew A. Nicosia, to prevent violations of the Federal Food, Drug and Cosmetic Act (FDCA). Defendants have agreed to cease all operations as part of a settlement with the Department.

According to the complaint, which was filed by the Department of Justice’s Consumer Protection Branch, the defendants violated the FDCA by failing to manufacture dietary supplements in accordance with the FDA’s current good manufacturing practice (CGMP) regulations. The complaint also alleges that the defendants violated the FDCA by manufacturing and distributing a product called RegeneSlim Appetite Control (RegeneSlim), which contained the unsafe food additive 1, 3 dimethylamylamine (DMAA), and failing to disclose the presence of DMAA in RegeneSlim’s labeling. The complaint further alleges that the defendants violated the FDCA by marketing RegeneSlim to be used in the cure, mitigation, treatment or prevention of disease, thereby causing RegeneSlim to be an unapproved new drug and a misbranded drug.

The government’s enforcement action resulted from a series of U.S. Food and Drug Administration (FDA) inspections of the defendants’ manufacturing facility that found recurring FDCA violations of the same nature as those alleged in the complaint, and which the defendants failed to correct despite FDA warnings.

“When dietary supplement manufacturers place unsafe and undisclosed ingredients in their products and disregard CGMP regulations, they put the public health at risk,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Department of Justice will continue to work closely with the FDA to prevent dietary supplement manufacturers from jeopardizing public health.”

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January 18, 2017

Member of Dockworkers Union Sentenced to 41 Months in Prison in Scheme Involving Fraudulently Billing for Chiropractic Services

Filed under: California Defense Attorney — fayarfa @ 12:09 am

LOS ANGELES – A member of the International Longshore and Warehouse Union (ILWU), Local 13, has been sentenced to 41 months in federal prison for his role in a scheme in which two medical clinics submitted more than a quarter-million dollars in bills to the union’s health care plan for chiropractic services that were not provided or were not medically necessary.

David Gomez, 53, of San Pedro, was sentenced on Monday, January 9, by United States District Judge R. Gary Klausner. Gomez was convicted in October of 20 counts of mail fraud. Gomez has been in custody since a federal jury returned its guilty verdicts.

The ILWU represents dockworkers at the ports of Los Angeles and Long Beach. Members of the union receive benefits, including health care benefits, through the ILWU-Pacific Maritime Association Welfare Plan.

According to the evidence presented at trial, Gomez and his co-defendant, Sergio Amador, opened a clinic in Long Beach in 2009 that operated under the name Port Medical and provided medical and chiropractic care. The next year, they opened a second clinic operating under the same name in San Pedro.

Gomez and Amador also created medical management companies that they used to receive funds generated by the medical clinics, which they then used to pay themselves and to pay incentives to ILWU members. These incentives were often paid as “sponsorships” of basketball or softball teams, with the understanding that the ILWU member receiving the “sponsorship” would visit, and encourage other team members to visit, Port Medical.

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McKesson Agrees to Pay Record $150 Million Settlement for Failure to Report Suspicious Orders of Pharmaceutical Drugs

Filed under: California Defense Attorney — fayarfa @ 12:06 am

McKesson Corporation (McKesson), one of the nation’s largest distributors of pharmaceutical drugs, agreed to pay a record $150 million civil penalty for alleged violations of the Controlled Substances Act (CSA), the Justice Department announced today.

The nationwide settlement requires McKesson to suspend sales of controlled substances from distribution centers in Colorado, Ohio, Michigan and Florida for multiple years. The staged suspensions are among the most severe sanctions ever agreed to by a Drug Enforcement Administration (DEA) registered distributor. The settlement also imposes new and enhanced compliance obligations on McKesson’s distribution system.

In 2008, McKesson agreed to a $13.25 million civil penalty and administrative agreement for similar violations. In this case, the government alleged again that McKesson failed to design and implement an effective system to detect and report “suspicious orders” for controlled substances distributed to its independent and small chain pharmacy customers – i.e., orders that are unusual in their frequency, size, or other patterns. From 2008 until 2013, McKesson supplied various U.S. pharmacies an increasing amount of oxycodone and hydrocodone pills, frequently misused products that are part of the current opioid epidemic.

The government’s investigation developed evidence that even after designing a compliance program after the 2008 settlement, McKesson did not fully implement or adhere to its own program. In Colorado, for example, McKesson processed more than 1.6 million orders for controlled substances from June 2008 through May 2013, but reported just 16 orders as suspicious, all connected to one instance related to a recently terminated customer.

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FORMER TREASURER FOR CONGRESSMAN’S ELECTION COMMITTEE CONVICTED OF EMBEZZLING OVER $300,000 FROM CAMPAIGN FUNDS AND SEPARATE EMPLOYER

Filed under: California Defense Attorney — fayarfa @ 12:03 am

SANTA ANA, Calif. – A former volunteer treasurer for Congressman Dana Rohrabacher’s re-election committee was convicted today of embezzling over $300,000 from campaign funds and business the where the defendant worked. Jack Wenpo Wu, 46, Newport Beach, pleaded guilty to three felony counts of grand theft by embezzlement, 21 felony counts of forgery, with sentencing enhancement allegations for theft exceeding $100,000, aggravated white collar crime over $100,000, and property loss over $200,000. He faces a maximum sentence of four years and four months in state prison in a court offer at his sentencing on March 13, 2017, in Department C-49, Central Justice Center, Santa Ana. The time is to be determined.

In 2004, Wu worked as a volunteer, non-paid treasurer for the Committee to Re-elect Congressman Dana Rohrabacher (Committee). Wu paid taxes owed by the Committee, filed Federal Election Committee reports, was the custodian of records, and ran the Committee’s bank accounts.

In 2008, Wu was employed by Russell Fischer Inc. (RFI) as a controller with an annual salary of $70,000. He was responsible for all accounts receivable, all accounts payable, reconciling all of RFI’s bank accounts, and other duties related to payroll.

On March 30, 2012, Wu’s pay at RFI was reduced to $2,000 every two weeks as an independent 1099 contractor. Wu worked two days out of the week at RFI while managing his own accounting company, Wubell Services.

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January 17, 2017

Navy Officer Sentenced to 30 Months in Expanding Bribery and Fraud Investigation

Filed under: California Defense Attorney — fayarfa @ 5:45 am

A U.S. Navy Lieutenant Commander was sentenced today to 30 months in prison for accepting cash, hotel expenses and the services of a prostitute from foreign defense contractor Glenn Defense Marine Asia (GDMA) in exchange for classified Navy information.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Alana Robinson of the Southern District of California, Director Dermot O’Reilly of the Department of Defense’s (DoD) Defense Criminal Investigative Service (DCIS) and Director Andrew Traver of the Naval Criminal Investigative Service (NCIS) made the announcement.

In October 2016, Gentry Debord, 41, pleaded guilty to one count of conspiracy to commit bribery and admitted that in 2007 he began a corrupt relationship with Leonard Glenn Francis, the former president and CEO of GDMA, a company that provided port services to U.S. Navy ships and submarines throughout the Pacific.  In addition to his prison sentence, U.S. District Judge Janis L. Sammartino of the Southern District of California ordered Debord to pay a $15,000 fine and $37,000 in restitution to the Navy.

As part of the scheme, between 2007 and 2013, Debord accepted cash, luxury hotels and the services of prostitutes from Francis in exchange for proprietary Navy information that benefitted GDMA.  During this period, Debord served as a supply officer aboard the U.S.S. Essex and later as a logistics officer for the Pacific Fleet.  Debora further admitted that he provided Francis and others with internal, proprietary U.S. Navy information; directed Francis and GDMA to inflate invoices to reflect services not rendered; advocated for the U.S. Navy to procure items from GDMA under its husbanding contracts; and otherwise used his position and influence in the U.S. Navy to advocate for and advance GDMA’s interests.

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California Attorney General’s Office Announces $150 Million Settlement with Financial Services Company Moody’s For Inflating Mortgage-Backed Securities Ratings

Filed under: California Defense Attorney — fayarfa @ 5:43 am

LOS ANGELES – Acting Attorney General Kathleen A. Kenealy, along with the U.S. Department of Justice and the attorneys general of 20 other states and the District of Columbia, today announced an $863.8 million settlement with Moody’s Corporation (Moody’s), a business and financial services company, to resolve federal and state civil claims related to the company’s misconduct in inflating ratings of residential mortgage-backed securities.

An investigation conducted by the Attorney General’s Office showed that Moody’s Corporation systematically misrepresented to the public, and to the California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS), that its ratings of structured finance securities were based on an objective and reliable analysis and not influenced by Moody’s economic interests.  Moody’s clients relied on these ratings to invest in the structured finance securities, the collapse of which led to the 2008 financial crisis.

“Moody’s Corporation misled their clients about the objectivity of its ratings and their misconduct caused significant losses to Californian’s pension funds,” Acting Attorney General Kathleen Kenealy said. “I want to thank our California Department of Justice attorneys for their great work to hold Moody’s accountable.”

Moody’s will pay a total of $863,791,823 to federal and state government entities. The Office of the Attorney General will recover $150 million in damages for the State of California, and the settlement recovers losses sustained by CalPERS and the CalSTRS on their investments. The remainder of the total settlement proceeds will be distributed among the U.S. Department of Justice and the other 21 state attorneys general.

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