Posts Tagged ‘Lanny Breuer’
Monday, December 12th, 2011

Operation Fast and Furious, the controversial gun-tracking effort that has prompted calls for some heads to roll at the Department of Justice, is having another side-effect: delaying a Senate vote on Kathryn Keneally, who has been nominated to be Assistant Attorney General to head DOJ’s Tax Division.

Sen. Charles E. Grassley of Iowa, the ranking Republican on the Senate Judiciary Committee, says Keneally seems qualified and that he’s prepared to vote for her. “However, given the lack of cooperation I’m getting from the Department of Justice, I can’t commit to moving forward with her nomination on the Senate floor,” Grassley said last week as the furor over Fast and Furious seemed to peak.

Grassley has been among the loudest critics of Fast and Furious, in which the Bureau of Alcohol, Tobacco, Firearms and Explosives allowed straw buyers to acquire hundreds of guns so that they could be tracked across the U.S.-Mexican border, helping law enforcement root out Mexican gangsters. The endeavor backfired mightily, as the ATF lost track of many of the weapons, two of which were found at the scene of a shootout a year ago in which a Border Patrol agent was killed.

Grassley has zeroed in on Assistant Attorney General Lanny A. Breuer, accusing the Criminal Division chief not only of  “incredibly poor judgment” but of being intentionally misleading in his statements about Fast and Furious. Grassley demanded last week that Breuer step down, or be fired by Attorney General Eric Holder (see Main Justice’s report).

Grassley has demanded that DOJ officials who are interviewed in the inquiry over Fast and Furious not double-team their questioners by being accompanied by both DOJ and personal lawyers.  Until the DOJ cooperates, Keneally’s nomination may languish, even though Grassley said she demonstrated an impressive command of tax issues — impressive, at least, when compared to those of Mary Smith, whose nomination to head the Tax Division was withdrawn after her critics complained her main qualification was not expertise in tax matters but her political connections (see Main Justice’s report).

The Fast and Furious controversy could also stall the nomination of Kevin A. Ohlson, a high DOJ official and longtime aide to Holder, to the U.S. Court of Appeals for the Armed Forces, as Main Justice noted recently.

Wednesday, December 22nd, 2010

The Department of Justice has pulled the plug on several high-profile investigations of members of Congress recently. But the DOJ sought to dispel any notion that it has become hesitant because of the disastrous episode involving the late Sen. Ted Stevens (R-Alaska.)

As The New York Times recounted on Monday, the DOJ recently announced that it will not pursue charges against Sen. John Ensign (R-Nev.) and Rep. Jerry Lewis (R-Calif.) who had been the subject of lengthy investigations. Ensign came under scrutiny for his efforts to help a former campaign aide with whom he had had an affair, while Lewis was in the spotlight for steering government spending to campaign donors.

Other investigations that ended without federal charges being lodged focused on Tom DeLay of Texas, the former House majority leader, and Rep. Don Young of Alaska, both Republicans, and Rep. Alan B. Mollohan (D-W.Va.).

But Lanny Breuer, the Assistant Attorney General in charge of the Criminal Division, rejected any suggestion that the DOJ has become “gun-shy” because of setbacks. “If a case cannot be brought, it’s because we’ve taken a hard look and made the determination that this case cannot be proved beyond a reasonable doubt,” he said, adding that behavior that might be labeled “reprehensible or immoral” is not necessarily criminal.

The DOJ’s biggest setback, and arguably the saddest, involved Stevens. He was convicted on corruption charges in 2008, but the verdict was later thrown out because of misconduct by prosecutors, who themselves came under investigation. One prosecutor committed suicide in September, several weeks after Stevens was killed in a plane crash.

Friday, November 5th, 2010

Two attorneys from the Commodity Futures Trading Commission are on detail to the Criminal Fraud Section, a Justice Department official said Thursday, illuminating the DOJ’s efforts to draw on unusual expertise in order to build a deep arsenal against white-collar crime.

“We have forged and fostered strong relationships with our partners in the fight against financial fraud,” Criminal Division chief Lanny Breuer said in remarks at a legal conference on enforcement and the financial crisis.

His team has developed “strong working relationships” with directors at the Securities and Exchange Commission, the Trouble Asset Relief Program’s Special Inspector General — who is tasked with auditing the bailout — and the CFTC, Breuer said.

“Just as important as these leadership-level relationships, strong bonds have also been cemented at the line working level,” he said, referring to the detailed attorneys.

One, Glenn Chernigoff, is helping to prosecute individuals allegedly involved in a $30 million Ponzi scheme who promised investors large returns by trading on the foreign currency market. The other, Luke Marsh, handled cases against hedge funds and others while at the CFTC.

Both joined the section in March; Chernigoff is on a one-year detail, while Marsh will stay for 18 months, a Justice Department spokeswoman said.

The additional manpower comes amidst a series of recruiting coups for the Fraud Section.

Earlier this week it hired former San Diego U.S. Attorney Charles La Bella, who headed a high-profile Clinton-era task force investigating campaign finance violations, to oversee investigations and prosecutions on the West Coast.

The section recruited terrorism prosecutor Jeff Knox from the Eastern District of New York, and hired veteran prosecutors from Manhattan and Philadelphia to oversee its new mortgage and bank fraud unit.

The Justice Department also has ramped up its asset forfeiture program, now run by Jen Shasky and her deputy Jai Ramswamy, an Southern District of New York alum, and boosted the ranks of lawyers reviewing wiretap applications.

Additional reporting by Lisa Brennan.

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Thursday, August 19th, 2010

This post has been updated.

A federal grand jury in Washington D.C. indicted Roger Clemens Thursday on six charges, including perjury and making false statements to Congress about his use of performance enhancing drugs.

The indictment was returned to U.S. Magistrate Judge Deborah A. Robinson nearly two and half years after Clemens testified under oath about his use of banned substances at a hearing before the House Committee on Oversight and Government Reform.

Clemens faces up to 30 years in prison and $1.5 million fine if convicted.

During the hearing in February 2008, Clemens offered testimony that directly conflicted with that of his former trainer, Brian McNamee, who also appeared before the committee. According to the Washington Post, McNamee said during the hearing that he injected Clemens nearly 40 times with steroids and human growth hormones from 1998 to 2001. Clemens denied the allegations.

Throughout the Congressional hearings, Clemens was represented by Lanny Breuer, who is now the head of the Justice Department’s Criminal Division, and white collar defense attorney Rusty Hardin, who still represents Clemens. Breuer has recused himself from any matters related to Clemens.

The hearings were held two months after McNamee linked Clemens to banned substances in George J. Mitchell’s report on the use of performance-enhancing drugs in baseball. McNamee agreed to cooperate with federal authorities in 2008 in order to avoid steroid distribution charges.

According to McNamee’s attorneys, their client turned over syringes, gauze pads and other items that he claimed he used to inject Clemens to federal investigators. Clemens lawyers said McNamee lied about the pitcher’s alleged drug use and may have falsified the evidence. In August, a federal appeals court in Houston refused to reinstate a defamation lawsuit against McNamee filed by Clemens.

Other MLB players have also been charged with making false statements about their use of performance enhancing drugs. Miguel Tejada, who plays for the Baltimore Orioles, pleaded guilty last year to lying to congressional investigators about his knowledge of steroid use. He was sentenced to one year of probation.

In 2007, federal authorities in San Francisco indicted Barry Bonds, the career leader in home runs, alleging that he perjured himself before a grand jury investigating the Bay Area Laboratory Co-operative. Bonds has retired from baseball is scheduled to go on trial next March.

The investigation of Clemens, who pitched his last game in 2007 after an illustrious career with the Red Sox, Blue Jays, Yankees and Astros, has jeopardized his chances of going to the Hall of Fame. Both Clemens and Bonds are scheduled to appear on the 2013 ballot.

The Justice Department’s investigation Clemens is being handled by D.C. Assistant U.S. Attorney Daniel P. Butler and Steven J. Durham, the chief of the Fraud and Public Corruption Section in the D.C. U.S. Attorney’s office.

In an e-mail to the Post, Hardin said “we have heard nothing from the government.”

Friday, July 16th, 2010

Friday’s massive health care fraud take down, the largest in the short history of the Medicare Fraud Strike Force, was the first major enforcement action of the strike force in Brooklyn, where the Justice Department has made significant efforts to establish a presence.

Of the 94 individuals charged today, 22 defendants were from Brooklyn and allegedly bilked approximately $78 million from American taxpayers.

Medicare fraud has become rampant in the New York City borough, particularly in heavily Russian neighborhoods, current and former DOJ officials said. This type of fraud is particularly prevalent among recent immigrant populations, which are particularly susceptible to kickbacks because of their relative poverty.

Keep your mouth shut! Keep your eyes open. These days / Even the walls have ears. / Chatter and gossip / Go hand in hand with / Treason. (N. Vatolina, N. Denisov, 1941)

After Attorney General Eric Holder and Department of Health and Human Services Secretary Kathleen Sebelius announced the nationwide sweep in Miami this morning, Assistant Attorney General for the Criminal Division Lanny Breuer held a separate press conference in Brooklyn to highlight the enforcement efforts there.

“To Medicare fraudsters, take notice of today’s charges and the law enforcement resources used to bring these schemes down,” Breuer said in a news release. “Our prosecutors and agents are working day and night to find and stop your schemes in their tracks. As today’s charges show, we are very capable of doing just that.”

During his remarks, Breuer also highlighted a particularly egregious example of fraud perpetrated by some of the Brooklyn defendants.

In a $70 million scheme operated out of a Brooklyn physical and occupational therapy clinic called Bay Medical Care PC, more than 1,000 cash kickbacks were allegedly paid to beneficiaries out of a designated “kickback room.”

According to court documents, the kickback room was located in the back of the clinic where Medicare beneficiaries would put their names down on a sign-in sheet and receive cash kickbacks for false claims. Hanging on the wall of the room was an old Soviet propaganda poster depicting a woman with her finger to her lips warning in Russian, “Don’t Gossip.”

Unbeknownst to the fraudsters, an undercover FBI agent, purporting to be a Medicare beneficiary, had infiltrated their operation. Ultimately, the strike team also obtained a court-ordered wiretap for the kickback room, which detailed conversations about the fraud scheme.

“We are using aggressive and innovative techniques in our investigations. Real-time data analysis allows us to focus our resources where the fraud is the most egregious,” Breuer said in his remarks. “And undercover operations, wiretaps and other lawful covert tactics allow us to investigate and stop these schemes as they are happening. I can promise that you will see more of these kinds of proactive efforts on our part.”

While aggressive investigative techniques like undercover agents and wiretaps have been used in cities like Miami, this is the first time they have been employed in Brooklyn.

The defendants charged in today’s take-down also represent a diverse array of fraudsters — physicians, medical assistants, and health care company owners and executives. In Brooklyn, a number of Medicare beneficiaries were indicted, of particular note because beneficiaries are more often viewed as victims, instead of criminals.

In this case, the beneficiaries were anything but victims. Over six years, one beneficiary submitted 2,558 claims, billing approximately $280,803 to Medicare.

“The fact that the defendants charged today include Medicare beneficiaries, as well as doctors and everything in between, shows the department’s willingness to prosecute every level of these fraud schemes,” said Jay Darden, a former assistant chief on the DOJ’s healthcare fraud team and is now a partner at Patton Boggs LLP.

Kirk Ogrosky, who created and implemented the Medicare Fraud Strike Force teams during his tenure as head of the health care fraud team, said that he expected the aggressive enforcement to continue unabated.

“Health care providers in those regions impacted by the strike force should be evaluating whether they had any dealings with those who were arrested this morning,” said Ogrosky, who is now a partner at Arnold & Porter LLP.

Monday, July 12th, 2010

The Justice Department will seek to merge the Criminal Division’s Gang Unit and the Organized Crime and Racketeering Section in an effort to “ramp up” the department’s prosecutions of international organized crime groups, Assistant Attorney General Lanny Breuer said Monday.

The new Organized Crime and Gang Section will be headed by Bruce Ohr, the current chief of organized crime. Kevin Carwile, the former head of the Gang Unit, will lead the Capital Case Unit, formerly headed by Margaret Griffey. Deputy Assistant Attorney General Doug Crow will serve as the Principal Deputy for Policy and Operations, and Jim Trusty, the current acting Chief in the Gang Unit, will serve as Principal Deputy for Litigation in the new section.

The new unit will have about 36 attorneys, Breuer said.

Assistant Attorney General for the Criminal Division Lanny Breuer (photo by Ryan J. Reilly / Main Justice).

“It seemed that if we had a larger group of prosecutors who had been very successful not just in organized crime prosecutions but in gang cases that that would give us, with our limited resources, more of an ability, and more of a flexibility to move lawyers depending on the moment,” Breuer said in a briefing with reporters Monday. “They can share strategies, there can be some efficiencies in scale. And I wouldn’t have done this if I thought for one moment it was going to take away from the mission. It’s going to enhance both.”

The changes “will allow us to use our resources much more efficiently and effectively to combat gangs and other organized crime groups,” Breuer added.

The Gang Unit was established as a standalone section in 2007 to target major local, national and international gangs. Its emphasis has been on violent street gangs involved in narcotics and weapons trafficking.

The Organized Crime and Racketeering Section, by contrast, is best known for dismantling the Mafia in the U.S. and has more recently focused on sophisticated international criminal networks involved with financial and cybercrimes.

The merger has the support of Attorney General Eric Holder, members of Congress, and the White House, Breuer said, and the section will begin to operate as a merged unit pending official approval.

The National Gang Targeting, Enforcement and Coordination Center, known as GangTECC, also will be merged into the new section, Breuer said. The DOJ will make changes to improve the way GangTECC shares information about open gang cases with federal agents across the country. A November Inspector General’s report (PDF) found the National Gang Intelligence Center and GangTECC had not made a significant impact on the department’s anti-gang activities.

Changes to the way information is shared “will greatly enhance GangTECC’s ability to identify connections between gang cases being investigated in different parts of the country; to help make sure evidence is shared to benefit all of those cases; and to coordinate takedowns of those cases where appropriate for maximum impact,” Breuer said.

Breuer said in an interview with Main Justice in February that the Justice Department was taking a “hard look” at division resources.

Other Topics

  • On trends in organized crime: “Organized crime in all different shapes from Eastern Europe and the former Soviet Union is a challenge. It’s something that we’re very focused on, and of course it could run the gambit, it could be health care fraud, it could be mortgage fraud, it could be violent, it could be cyber, it could be IP.”
  • On Switzerland’s decision not to extradite Roman Polanski: “We’re deeply disappointed. We thought our extradition request was completely supported by the treaty, completely supported by the facts and by the law and the underlying conduct was, of course, very serious. We’re going to review what our options are but there’s just no masking the fact that we’re deeply disappointed.”

Additional reporting by Joe Palazzolo.

Monday, July 12th, 2010

Jack Keeney (right) meets First Lady Michelle Obama last month as Attorney General Eric Holder looks on. (DOJ)

One of the longest serving career employees in the history of the U.S. government will retire after nearly 60 years at the Justice Department.

John C. “Jack” Keeney joined the Criminal Division of the Justice Department in 1951, and has served as Deputy Assistant Attorney General in the Criminal Division for several decades.

Keeney told Lanny Breuer, Assistant Attorney General for the Criminal Division, that he would be retiring last week, and Breuer announced the retirement Monday. Keeney will remain at the Justice Department for about three more months, said Breuer.

“There’s simply no way to talk about the department’s legendary efforts to fight organized crime without talking about and taking a moment to speak about the efforts of one of our most revered forefathers, Jack Keeney,” Breuer said. “Some people mistakenly thought that the biggest career move announced last week involved Lebron James, but for the people at the Department of Justice, the biggest career move announced last week involved a true hall-of-famer, [the] almost five-foot-nine Mr. Keeney.”

Keeney’s decision to retire, said Breuer, “took my breath away.” He called him a “career prosecutor in every sense of the word and meaning.”

“His devotion to the department and to mentoring thousands of young prosecutors is unparalleled,” Breuer said.

Jack Keeney (photo by Ryan J. Reilly / Main Justice).

Keeney sat in during Breuer’s remarks but did not make any comments.

Keeney served in the Army Air Corps during World War II, and was captured by German forces in 1945 and held as a prisoner of war. After he left the Army, Keeney graduated from the University of Scranton in 1947. He received law degrees at Dickinson School of Law in 1949 and from George Washington University School of Law in 1953.

Keeney joined the DOJ Criminal Division in 1951. Three years later, he became chief of the unit that prosecuted Smith Act cases,involving conspiracies to overthrow the U.S. government.

In 1960, he transferred to Organized Crime and Racketeering Section, serving as Deputy Chief. From 1969 to 1973, he served as chief of the Criminal Division’s Fraud Section.

Keeney later representative of the U.S. team that negotiated the mutual legal assistance treaty in criminal matters with Switzerland.

He has served as acting Assistant Attorney General of the Criminal Division on several occassions.

In 1996, Keeney received the Attorney General’s Award, the highest award bestowed by the Attorney General. In 1990, he also received the Criminal Division’s highest award, the Henry E. Petersen Memorial Award, for his lasting contribution to the division.

In 2000, the Justice Department named one of its buildings (130l New York Avenue, N.W.) after Keeney — an honor rarely bestowed on living persons.

For more on Keeney, see this 2007 NPR interview, the CNN transcript of a segment on his career, and a 1999 interview (PDF) with Keeney in the U.S. Attorneys’ Bulletin.

Additional reporting by Leah Nylen and Joe Palazzolo.

Wednesday, June 16th, 2010

Assistant Attorney General for the Criminal Division Lanny Breuer at a news conference on Wednesday (photo by Ryan J. Reilly / Main Justice).

The former chairman of a private mortgage lending company was arrested by federal agents Tuesday night in a case involving surreptitious Blackberry messages, a $1.9 billion fraud and the collapse of one of the 50 largest banks in the U.S.

Lee Bentley Farkas faces charges for conspiracy and bank, wire and securities fraud. The Justice Department announced the arrest on Wednesday morning.

Neil MacBride, U.S. Attorney for the Eastern District of Virginia (photo by Ryan J. Reilly / Main Justice).

According to the DOJ, Farkas and his co-conspirators made efforts to disguise their alleged fraud by communicating using a feature on their Blackberry phones that allowed them to send so-called “PIN messages,” which are similar to text messages but not routed through or saved on a computer server.

According to the indictment, Farkas and other employees of the mortgage lending company Taylor, Bean & Whitaker (TBW) overdrew from company accounts at Colonial Bank in Orlando, Fla., to cover cash shortfalls. They then moved money between the company’s accounts to disguise the overdrafts and shortfall. To make up for the losses, Farkas and others allegedly sold fake mortgage loan assets to Colonial Bank and then urged the bank to keep the assets on their books even though they were worthless.

Investigators began looking at Colonial BancGroup, the parent company of Colonial Bank, in February 2009, when the company applied for $550 million in funds from the Troubled Asset Relief Program (TARP). The Alabama State Banking Department later seized Colonial Bank, and the Federal Deposit Insurance Corporation was named as its receiver. Both Colonial BancGroup and TBW filed for bankruptcy in August 2009.

The scheme by Farkas and TBW also led Colonial BancGroup to make false representations to the Securities and Exchange Commission concerning the value of its assets. The company never received TARP funds, but it falsely claimed to have secured outside funding to meet the requirements of the conditional approval of its application for TARP funding.

Farkas and others also allegedly misappropriated several hundred million of dollars from Ocala Funding, a company that sold asset-backed commercial paper.

According to a DOJ court filing, on the day federal agents executed a search at TBW, Farkas allegedly sent Blackberry PIN messages to his co-conspirator saying the government “will figure out that the agency stuff was recycled if they get [another co-conspirator's] laptop.”

“[T]here was at least an attempt… to use the PIN technique as opposed to e-mail,” Assistant Attorney General for the Criminal Division Lanny Breuer said when asked how the defendant attempted to avoid creating evidence of his alleged fraud. “That was certainly one strategy.”

He also said that the government would continue to use all investigative tools to combat financial crimes.

“This arrest and these charges send a strong message to corporations and corporate executives alike that financial fraud will be found, and it will be prosecuted. And it will be pursued using every investigative tool at our disposal,” Breuer said. ”Indeed, this investigation benefited from the use of covert techniques – a tactic that has been seen in other recent white collar criminal prosecutions and one that will continue to be employed wherever feasible and appropriate.”

Breuer declined to elaborate on the “covert techniques” used. The indictment and the government’s motion for pre-trial detention cite e-mails, other electronic communications and recorded phone calls between Farkas and the other conspirators.

Lorin Reisner, Deputy Director of the Division of Enforcement, U.S. Securities and Exchange Commission (photo by Ryan J. Reilly / Main Justice).

U.S. Attorney for the Eastern District of Virgina Neil MacBride said at the news conference that co-conspirators in the case internally referred to the fabricated assets as “crap.”

MacBride described the scheme as a “sophisticated shell game” and said they attempted to defraud the government of TARP funds through scheme they called “Project Squirrel.”

The government said it is seeking approximately $22 million in forfeitures from Farkas, which includes five properties in Florida and Georgia as well as nine vehicles — including a 1929 Ford Model A; a 1963 Rolls Royce; a 1961 Porsche CV; and a 1958 Mercedes Benz Cabriolet 220.

Wednesday, May 5th, 2010

Lanny Breuer, Teresa L. McHenry, Eli M. Rosenbaum (photo by Ryan J. Reilly / Main Justice).

At a small ceremony Wednesday, the Justice Department’s Criminal Division celebrated the creation of the Human Rights and Special Prosecutions Section of the Justice Department, the same day as it announced the first case emerging from the new unit.

The Justice Department announced in March that it would merge the Office of Special Investigations and the Domestic Security Section into the new section.

At the ceremony, Assistant Attorney General for the Criminal Division Lanny Breuer thanked the section’s staff for its work and congratulated them on the merged unit’s first successful case. Gilberto Jordan, a former Guatemalan special forces soldier, was accused of masking his role in a 1982 massacre. Jordan was arrested in Palm Beach, Fla., on Wednesday and charged by the U.S. Attorney for the Southern District of Florida and HRSP with unlawful procurement of naturalized U.S. citizenship. He allegedly admitted that he was in the Guatemalan military, was present during the 1982 Dos Erres massacre, where Guatemalan special forces killed more than 160 people. According to the complaint, Jordan said he participated in the killings and that he murdered a baby by throwing it into the village well.

Breuer said the successful merger of the two sections is such a short period of time was a testament to the work of the division and thanked staffers for their patience. Breuer specifically thanked Deputy Assistant Attorney General Jason Weinstein for his work in guiding the logistics of the merger.

The section’s top two prosecutors — Teresa L. McHenry, the head of the Human Rights and Special Prosecutions Section, and Eli M. Rosenbaum, the Human Rights Enforcement Strategy and Policy Director — both spoke at the ceremony. Joe Zogby, a staffer for Senate Judiciary human rights subcommittee chairman Sen. Richard Durbin (D-Ill.), was also on hand representing the senator. He said that Durbin believed the new section would allow the Justice Department to better handle the human rights challenges of the 21st century.

Staffers from the Human Rights Section (photo by Ryan J. Reilly / Main Justice).

This post has been updated.

Monday, April 12th, 2010

Attorney General Eric Holder said Monday that President Barack Obama’s fiscal 2011 budget will help address issues of sexual assault.

Associate Attorney General Thomas Perrelli, Attorney General Eric Holder and Director of the Office of Violence Against Women Susan B. Carbon (photo by Ryan J. Reilly).

The event, held in conjunction with Sexual Assault Awareness Month, is the first held in the Great Hall to address the issue of sexual assault, said Associate Attorney General Thomas Perrelli.

Holder said that for the first time, the Office for Victims of Crime set aside $100 million specifically to address violence against women. It also set aside $30 million for the Sexual Assault Services Program — doubling its budget from the previous year — and an additional $9 million for the Legal Assistance for Victims Program, bringing its budget to $50 million.

“We all know what we’re up against,” said Holder. “Confronting this reality is very difficult, it’s often painful, but it’s also very important.”

“I will ensure that this department and our partners have the resources to combat sexual assault and bring offenders to justice. This issue is deeply important to me,” said Holder. “During a career spent as a prosecutor, a judge, and as a United States Attorney, I have seen the effects of sexual violence in the courtroom and far beyond. I understand how these crimes devastate lives, families and whole communities.”

Attendees at the event included Assistant Attorney General Lanny Breuer, Assistant Attorney General Laurie Robinson, Assistant Attorney General Tony West and Minnesota U.S. Attorney B. Todd Jones. Holder recognized Breuer, Robinson and West for their visits to campuses around the country to discuss violence against women and Jones for his leadership on the issue as chairman of the Attorney General Advisory Committee.

Speakers at the event included Susan B. Carbon, a former judge who assumed her duties as director of the Office of Violence Against Women on April 2, and Catherine Pierce, the deputy director of the Office of Violence Against Women.