Category: Legal Issues

Source: United States Department of Justice

Ilya Kahn, 66, a citizen of the United States, Israel and Russia, and resident of Brooklyn, New York, and Los Angeles, California, was arrested yesterday in Los Angeles for his alleged involvement in a years-long scheme to secure and unlawfully export sensitive technology from the United States for the benefit of a Russian business. The business was sanctioned by the U.S. government following Russia’s unprovoked invasion of Ukraine in February 2022 and whose clients include elements of the Russian military and the Federal Security Service (FSB), the main successor agency to the Soviet Union’s KGB.

According to court documents, Kahn is charged by criminal complaint with conspiracy to violate the Export Control Reform Act (ECRA). Kahn will make his initial appearance in the Central District of California.

“Mr. Kahn stands accused of repeatedly exporting sensitive technology to Russia before, during, and after Russia launched its unprovoked invasion of Ukraine,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “Violations of U.S. sanctions and export control laws that aid Russia and other hostile powers endanger our nation’s security and will be met with the full force of the Justice Department.”

“This arrest reflects our continued aggressive enforcement of export control violations involving the Russian military and the Federal Security Service,” said Assistant Secretary for Export Enforcement Matthew S. Axelrod of the Commerce Department’s Bureau of Industry and Security (BIS). “Stopping the flow of semiconductors and sensitive technologies to those aiding Russia’s unjust war in Ukraine is a critical priority for BIS and our Disruptive Technology Strike Force partners.” 

“As alleged, Kahn illegally sent specialized technology from the United States to a Russian semiconductor manufacturer with ties to multiple other sanctioned Russian entities and did so by circumventing U.S. export laws and regulations,” said U.S. Attorney Breon Peace for the Eastern District of New York. “Evading U.S export regulations to send goods to benefit the Russian military complex presents a danger to our national security and our allies and partners abroad. We will continue to use all of our law enforcement and national security tools to hold these enablers, both individuals and corporations, accountable for flouting the rule of law.”  

“This arrest marks the end of Ilya Khan’s alleged involvement in a years-long scheme to secure and export millions of dollars’ worth of sensitive technologies from the U.S. to Russia to be used by its military and intelligence services,” said Executive Assistant Director Larissa L. Knapp of the FBI’s National Security Branch. “Any attempt to circumvent U.S. laws, sanctions, and regulations will not be tolerated, and thanks to a coordinated interagency effort, our national security and our partners’ are stronger than ever.”

According to court documents, Kahn is the owner of Senesys Incorporated, which is based in California, and Sensor Design Association, which maintains a contact address in Brooklyn. As alleged in the complaint and other public filings, Kahn operated these two businesses – ostensibly involved in “security software development” and the testing of silicon wafers for military avionics and space users – through which he engaged in a years-long conspiracy to acquire and export sensitive and sophisticated electronics from the United States to a sanctioned Russian business without acquiring the appropriate licenses. The Russian business, Joint Stock Company Research and Development Center ELVEES (Elvees) was added to the Commerce’s Department’s Entity List in March 2022 and was sanctioned by the Treasury Department in September 2022 because of its critical role in facilitating Russia’s military and its invasion of Ukraine.

For example, according to the complaint, in 2019, Kahn exported multiple U.S.-origin microcontrollers to Elvees in Russia, and in 2022, he exported U.S.-origin network interface controllers and a radio-frequency transmitter to Elvees in Russia by way of a Hong Kong-based shipping company. Each of these items required an export license from the Commerce Department, which Kahn did not obtain, and were controlled for national security and anti-terrorism reasons.

As alleged, Kahn also arranged for Elvees to continue to receive semiconductors manufactured in Taiwan following Russia’s invasion of Ukraine in February 2022. Specifically, after the Taiwanese company that manufactured Elvees-designed semiconductors refused to ship those semiconductors to Russia, Kahn arranged for the semiconductors to be sent to the United States and then re-exported them to Russia, often through a shipping company based at John F. Kennedy International Airport in Queens, New York. Kahn also used Hong Kong and other locations around the world as transshipment points to evade U.S. export laws and regulations and to conceal the Russian end users. 

Even after Elvees was added the Entity List, Kahn continued to work with the company. In May 2022, Kahn emailed design guidance for an Elvees-branded microchip to a Taiwan manufacturer. Subsequently, Kahn shipped thousands of units of this microchip – through a New York-based shipper – to a Hong Kong shipping company, and then to a company located in mainland China. Kahn noted in communications with the Hong Kong shipping company that he received a “call from Russia” about the Chinese business to which he was directing the goods. 

If convicted, Kahn faces a maximum penalty of 20 years in prison for conspiracy to violate the ECRA.

The FBI and Department of Commerce’s BIS New York Field Office are investigating the case. The U.S. Attorney’s Office for the Central District of California provided significant assistance.

Assistant U.S. Attorneys Craig R. Heeren, Artie McConnell, and Matthew Skurnik for the Eastern District of New York and Trial Attorney Scott Claffee of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case, with assistance from Litigation Analysts Joseph Levin and Mary Clare McMahon.

Today’s actions were coordinated through the Justice and Commerce Departments’ Disruptive Technology Strike Force and the Justice Department’s Task Force KleptoCapture. The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains, and prevent critical technology from being acquired by authoritarian regimes and hostile nation states. Task Force KleptoCapture is an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export restrictions and economic countermeasures that the United States has imposed, along with its allies and partners, in response to Russia’s unprovoked military invasion of Ukraine.

A complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Source: United States Department of Justice

The Justice Department announced today the release of a report on its critical incident review of the law enforcement response to the tragic school shooting at Robb Elementary School. Attorney General Merrick B. Garland announced the review shortly after the tragedy on May 24, 2022, in which 19 children and two teachers died at Robb Elementary School in Uvalde, Texas. The report provides a thorough description of the critical incident review that has taken place over the past 20 months.

The report is intended to provide the most comprehensive assessment available of the law enforcement response to the horrific incident on May 24, 2022, as well as the emergency medical response, communications, and trauma services in the wake of the tragedy. It begins with a minute-by-minute timeline reconstructing key events before, during, and immediately following the shooting. The report addresses many previously unanswered questions, builds on the existing knowledge base for responding to incidents of mass violence, and identifies generally accepted practices for effective law enforcement responses. In doing so, this report endeavors to honor the victims and survivors of this tragedy, as well as offer recommendations to improve future responses in other communities. 

“The victims and survivors of the mass shooting at Robb Elementary School deserved better,” said Attorney General Garland. “The law enforcement response at Robb Elementary on May 24th, 2022 — and the response by officials in the hours and days after — was a failure. As a consequence of failed leadership, training, and policies, 33 students and three of their teachers — many of whom had been shot — were trapped in a room with an active shooter for over an hour as law enforcement officials remained outside. We hope to honor the victims and survivors by working together to try to prevent anything like this from happening again, here or anywhere.”

“Uvalde is a community that is healing, and getting clear on the facts is part of healing,” said Associate Attorney General Vanita Gupta. “As I made clear last April when I came to Uvalde to meet with families and reiterated to them last night, we promised that our report would honor the victims and survivors; provide a detailed, independent, and authoritative accounting of the events; and would not only look backward but would also identify lessons learned and recommendations for other communities to prevent something like this from happening again.”

“The observations and recommendations in this report are based on national standards, generally accepted standards and practices, current research, and the expectations of communities,” said Director Hugh T. Clements, Jr. of the Office of Community Oriented Policing Services (COPS Office). “Reports like this are critical to law enforcement and, by extension, to the community. As agencies constantly strive to do better and be more fully prepared, detailed observations and recommendations like those within this report are invaluable to agencies planning for the future.”

The report examines the multiple failures in the response to the tragedy, including the breakdowns in leadership, decision-making, tactics, policy, and training that contributed to those failures. It describes the responding officers’ most significant failure as not treating the incident throughout as an active shooter situation and using the available and sufficient resources and equipment to push forward immediately and continuously to eliminate the threat. Although several of the first officers on the scene initially acted consistent with generally accepted practices to try to engage the subject, once they retreated after being met with gunfire, the law enforcement responders began treating the incident as a barricaded subject scenario rather than as an active shooter situation. In all, there was a 77-minute gap between when officers first arrived on the scene and when they finally confronted and killed the subject.

The report also examines the communications challenges during and after the shooting, including the inaccurate narrative that was initially delivered. It also documents the trauma and support services that were provided, as well as those that were not provided, to victims, survivors, family members, and responders.

The critical incident review was led by the COPS Office, with the support of leading subject matter experts with a wide variety of relevant experience. The team established the following areas of focus: (1) incident timeline reconstruction; (2) tactics and equipment; (3) leadership, incident command, and coordination; (4) post-incident response and investigation; (5) public communications during and following the crisis; (6) trauma and support services; (7) school safety and security; and (8) pre-incident planning and preparation.

The team collected and reviewed more than 14,000 pieces of data and documentation, including policies, training logs, body camera and CCTV video footage, audio recordings, photographs, personnel records, manuals and standard operating procedures, interview transcripts, investigative files and data, and other documents. The team also spent 54 days onsite in Uvalde and conducted over 260 interviews of individuals who either played a role or had important information related to areas of the review. Those interviews included personnel from the law enforcement agencies involved in the response to the mass shooting; other first responders and medical personnel; victims’ family members; victim services providers; communications professionals and public information officers; school personnel; elected and appointed government officials; survivors and other witnesses; and hospital staff.

The report, in both English and Spanish, as well as profiles of the victims and additional resources, is available on the COPS Office website at cops.usdoj.gov/uvalde.

The team took great care to be intentional about the words used in the report to convey the facts, observations, and recommendations. Nevertheless, the descriptions may be activating for some readers due to the explanations of this mass casualty incident, including the age of the victims. For resources, including free and confidential emotional support, please visit www.988lifeline.org or call or text 988 to reach the Suicide & Crisis Lifeline, available 24 hours a day, seven days a week, 365 days a year.

Source: United States Department of Justice

Anthony Shane Gilstrap was sentenced today to 63 months in prison for violating the Resource Conservation and Recovery Act (RCRA) by illegally transporting hazardous waste in Hawaii, and to possessing a stolen firearm in Kansas. Gilstrap, who had pleaded guilty to the crimes in April, will also serve three years of supervised release during which time he will participate in treatment and programs for mental health, cognitive behavior and substance abuse.

According to documents filed in court, Gilstrap violated the RCRA in Hawaii by contracting to remove 35 drums of the hazardous waste perchloroethylene (perc) from a dry-cleaning operation in Honolulu in January 2017. Gilstrap offered, at a steep discount, to take away the illegally stored, spent solvent. He did not use required safeguards like an RCRA hazardous waste manifest, which traces waste to its ultimate disposal site. Gilstrap moved the drums to a warehouse he controlled where it sat for months without a required permit. He forged a manifest after government officials asked about the drums, falsely saying he had shipped the drums to Oregon.

The company that owned the dry-cleaning operation and its Hawaii regional manager have pleaded guilty and been sentenced. The drums of waste perc were ultimately disposed of properly. Law enforcement in Kansas later stopped Gilstrap for a traffic violation and found in his truck a handgun, which Gilstrap admitted was stolen. The cases of handgun and RCRA violations were consolidated for Gilstrap’s plea and sentencing.

“Laws like the Resource Conservation and Recovery Act help protect people and our environment from hazardous waste exposure by requiring safe transportation and storage practices,” said Assistant Attorney General Todd Kim for the Justice Department’s Environment and Natural Resources Division. “We are glad that this unusual case was ultimately resolved without prolonged and serious harm.”

“The illegal storage and transportation of hazardous waste poses very serious public health danger,” said Assistant Special Agent in Charge Benjamin Carr of the Environmental Protection Agency’s (EPA) criminal enforcement program in Hawaii. “Today’s sentencing demonstrates that EPA and our law enforcement partners are committed to protecting the American people from reckless criminal activity that jeopardizes human health and the environment.”

U.S. District Judge Eric F. Melgren for the District of Kansas issued the sentence.

EPA’s Criminal Investigation Division; the Sumner (Kansas) County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case

Senior Counsel Krishna Dighe of the Justice Department’s Environmental Crimes Section, Assistant U.S. Attorney Oladotun O. Odeyemi for the District of Kansas and Assistant U.S. Attorney Gregg Paris Yates for the District of Hawaii prosecuted the case.

Source: United States Department of Justice

The former vice president of a bank located in Missouri pleaded guilty today to assisting high-risk bank customers in evading the bank’s anti-money laundering controls.

Peter McVey, 45, of Kansas City, Missouri, who served as vice president and director of treasury services for a bank, pleaded guilty to failing to maintain an appropriate anti-money laundering program under the Bank Secrecy Act (BSA).

According to court documents, between April 2014 and July 2022, McVey assisted high-risk bank customers engaged in deceptive sweepstakes and short-term online loan activities in evading the bank’s anti-money laundering controls. Specifically, McVey worked with other bank officials and customers to submit fraudulent Currency Transaction Report exemption forms to the Financial Crimes Enforcement Network and knowingly accepted forged bank forms from customers that permitted them to exceed applicable limits on daily transaction values. McVey also admitted that he did not follow know-your-customer or suspicious activity report requirements. 

McVey faces a maximum penalty of 10 years in prison. He will also pay a fine of $20,000, which is equal to his 2018 bonus from the bank. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, U.S. Attorney Teresa A. Moore for the Western District of Missouri, Special Agent in Charge Justin R. Bundy of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG) Kansas City Region, Special Agent in Charge Thomas F. Murdock of the IRS Criminal Investigation (IRS:CI) St. Louis Field Office, and Assistant Director Michael Nordwall of the FBI’s Criminal Investigative Division made the announcement.

FDIC-OIG, IRS:CI, and the FBI are investigating the case.

Trial Attorney Chad M. Davis of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) and Assistant U.S. Attorneys Kathleen D. Mahoney, Patrick D. Daly, and Matthew N. Sparks for the Western District of Missouri are prosecuting the case. 

MLARS’ Bank Integrity Unit investigates and prosecutes banks and other financial institutions, including their officers, managers, and employees, whose actions threaten the integrity of the individual institution or the wider financial system. 

Source: United States Department of Justice

The Justice Department announced today that it has filed a lawsuit against the State of Nevada, Nevada Attorney General’s Office and Public Employees’ Retirement System of Nevada (NVPERS) to protect the employment pension rights of servicemembers who are called to serve their country on military service. The Justice Department alleges that when state employees are reemployed after military service, NVPERS violates the Uniformed Services Employment and Reemployment Act of 1994 (USERRA) by overcharging those servicemembers when calculating their contribution to their pension plans.

“When rehiring servicemembers, the law requires employers to not only return the veterans to their rightful positions, but also to protect their pension rights,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Justice Department is committed to ensuring that those who sacrifice so much to protect this country do not have to sacrifice their civilian employment rights, including their pensions.”

“USERRA protects a servicemember’s reemployment rights after returning from military service to their civilian employment,” said U.S. Attorney Jason M. Frierson for the District of Nevada. “Every person who has served in our country’s uniformed services deserves the full protection of our employment laws and we will continue to work with the Civil Rights Division’s Employment Litigation Section to protect servicemembers’ rights.”

According to the complaint, when Nevada state employees pass their five-year employment anniversary, they can purchase pension credits in the state’s pension system operated by NVPERS. NVPERS charges the employee for these pension credits based on the employee’s age and salary at the time of the purchase. USERRA requires employers to restore returning servicemembers’ pension benefits as if they had not been called away to military service. Servicemembers who are away on military service when they pass their five-year anniversary cannot purchase pension credits until they have returned from military duty. As alleged in the complaint, NVPERS violated USERRA by charging reemployed servicemembers based on their age and salary when they were reemployed, rather than their age and salary when they passed their five-year anniversary.

As explained in the complaint, Major Charles Lehman was an employee in Nevada’s Office of the Attorney General who was called to active duty with the Nevada National Guard on a multi-year term of duty during which he passed his five-year anniversary with the Attorney General’s Office. When he was released from military service and returned to his civilian job, NVPERS overcharged him for his pension credits based on his increased age and salary, an amount that exceeded the amount he would have owed, had he not been away on military service, by more than $38,000. As alleged, NVPERS’ policy of overcharging for these pension credits impacted other state employees returning from military service. The Justice Department seeks to have NVPERS change its policy of overcharging servicemembers, and refund Lehman and any other affected reemployed servicemembers the amounts previously overcharged.

USERRA protects the rights of uniformed servicemembers to retain their civilian employment following absences due to military service obligations and provides that servicemembers shall not be discriminated against because of their military obligations. The Justice Department gives high priority to the enforcement of servicemembers’ rights under USERRA. Additional information about USERRA can be found on the Justice Department’s websites at www.justice.gov/servicemembers and www.justice.gov/crt-military/employment-rights-userra as well as on the Department of Labor’s (DOL) website at www.dol.gov/vets/programs/userra.

This case stems from a referral by the DOL after an investigation by the DOL’s Veterans’ Employment and Training Service.

Senior Trial Attorney Jeffrey Morrison of the Civil Rights Division’s Employment Litigation Section is handling the case.

Source: United States Department of Justice

Remarks as Prepared for Delivery

Good afternoon. Thank you to the U.S. Conference of Mayors for inviting me to participate in this important session, joining local and federal leaders who are on the front lines of addressing gun violence in communities across the country. I am eager to hear the challenges you’re facing and ways that we can work together to make our cities safer.

I don’t have to tell you that gun violence is one of the most pressing and devastating challenges facing our nation. As mayors, you see the trauma of violence first-hand. You are there to offer comfort to your residents, to ensure that survivors’ needs are met and to support your community on the path to healing. Among the many hats you wear as mayors, “chief consoler” must be among the most difficult.   

None of us – no single mayor or federal agency – can hope to tackle the complex, multifaceted challenge that is gun violence on our own. Fortunately, we don’t have to. Around the country, cities like Baltimore, Miami, St. Louis and Kansas City are bringing together government, law enforcement, service providers and community in pursuit of the shared goal of stopping the violence.

And we are starting to see the impact of these efforts, with homicide rates in many places dropping significantly in the last year. But there is so much more progress to be made.

At the Office of Justice Programs (OJP), we’re proud to support your cities as you build comprehensive safety solutions. We’re taking an approach centered on advancing community safety, building community trust and strengthening the community’s role as co-producer of safety and justice. We are working to help build the community infrastructure that is an essential complement to law enforcement when it comes preventing and reducing violent crime.

Over the past two years, OJP has made an unprecedented investment in community violence intervention strategies that deploy trusted credible messengers to mediate conflicts, interrupt cycles of violence and build bridges to opportunity among residents at highest risk of shooting or being shot themselves. 

OJP has awarded nearly $200 million in grants over the last two years under our Community Violence Intervention (CVI) and Prevention Initiative. This is the largest targeted federal investment in these strategies in history, and to date we’ve funded 76 site-based grantees in 29 states, as well as microgrants in many communities. These include city-led collaboratives, community-based nonprofits and multi-site state initiatives that both seed new efforts and expand established interventions. The vision here is to grow and strengthen CVI ecosystems and ensure they connect to the larger public safety infrastructure in your cities.  

These resources are for you, and for your network of partners in the community. So far, we’ve invested nearly $60 million dollars in 30 local governments that are now leading multi-sector coalitions to implement CVI strategies. I believe Mayor [Quinton] Lucas is leading one of these efforts in Kansas City. We’re reaching jurisdictions impacted by violence across the country, from Los Angeles to Orlando, Baton Rouge to Boston. We’re advancing safety in some of our nation’s largest cities, as well as in rural communities and smaller metro areas where we know the needs are different but also great.

No matter the size of the city, collaboration is a core element of this work. Nearly two-thirds of our fiscal year 2023 grantees have established partnerships with law enforcement, more than a quarter are engaging with prosecutors’ offices and many are working with research partners. The CVI initiative also delivers hands-on assistance to current grantees and to jurisdictions that aren’t grantees, helping to ensure that all communities have access to the support they need to implement these lifesaving interventions.

As you know so well, this is complex works that demands a community-wide response, and success depends on the expertise and credibility of people who have lived through these challenges. This is why we are so fortunate to have Eddie Bocanegra serving as Senior Advisor for Community Violence Intervention and guiding our efforts at OJP. Many of you may know Eddie from his groundbreaking work at READI Chicago. As documented by rigorous research by the University of Chicago, READI participants saw large reductions in arrests and victimizations, and every dollar invested in the program returned roughly four dollars in societal benefits.

We’re seeing promising results from evaluations of other CVI models too, and through our National Institute of Justice, we will continue to build the base of research so that we can continue to learn what works to save lives.  

Thanks to the Bipartisan Safer Communities Act (BSCA), which I am sure you’ll hear more about from Rob, we will continue investing in CVI, as well as other violence reduction programs, including the Byrne State Crisis Intervention Program (SCIP). Byrne SCIP was created by the BSCA to support state crisis intervention efforts, including Extreme Risk Protection Order (ERPO) programs that are designed to keep guns out of the hands of those who pose a threat to themselves or others.

More than 20 states and the District of Columbia have enacted ERPO laws, and these programs have been used in response to threats of suicide and interpersonal violence, including mass shootings. With BSCA funding, we are supporting a new National ERPO Resource Center, run by the Johns Hopkins Center for Gun Violence Solutions. The Resource Center will be launching a website in early spring to offer resources and take requests to help jurisdictions implement these programs in a way that ensures constitutional protections and saves lives. 

I am also pleased to share a new resource that was expressly created for you – mayors and city leaders who are addressing community violence and want an easier way to see and access OJP resources. Our new Violent Crime Reduction Roadmap was released in December and is organized around an important report created by the Council on Criminal Justice. It’s called “Saving Lives: Ten Essential Actions Cities Can Take to Reduce Violence Now,” and it identifies key strategies, such as identifying the people and places driving violence, using trauma-informed approaches and investing in anti-violence workforce development.     

What the roadmap does is identify – in one place – Justice Department resources to help you address violence in your own cities. It includes not only available funding opportunities, like CVI, but also technical assistance, reports, guidance and webinars. We’ve also got a technical assistance partner in the Police Executive Research Forum. They’ve brought together a team of experts who can help city leaders navigate what resources are out there and identify strategies for tackling the 10 Essential Actions.

I also want to highlight crime gun intelligence centers, which can help identify crime gun sources, increase clearance rates and ultimately reduce violent crime. This has been a terrific collaboration with our partners at ATF – and I know you’ll hear more from Director [Steve] Dettelbach shortly.

Before I turn things over to him, I want to make sure you are all aware that our grant solicitation season is about to get underway. In early February, we will be releasing our program plan outlining scores of funding opportunities that will be open to local jurisdictions. I encourage you to be on the lookout for those announcements, including new CVI funding opportunities. We’ve also got a new interactive map on the OJP website which can show you what grants are already being invested in your cities.

While the problem of gun violence problem is heart-wrenching, it is also preventable. We know mayors are on the front lines, and OJP is here to support your efforts through the funding, technical assistance and other resources I’ve described. So please come to us with your challenges, your requests, your needs and certainly your successes. We look forward to working with you.

Source: United States Department of Justice

The Justice Department and Environmental Protection Agency (EPA) today announced that Swinerton Builders has agreed to pay a $2.3 million penalty – divided between the United States, Alabama Department of Environmental Management (ADEM) and State of Illinois – to resolve allegations that it violated the Clean Water Act and related state laws during the construction of solar farms in Alabama, Idaho and Illinois.

The company has also agreed to undertake mitigation actions to help restore the Portneuf River in Idaho and to purchase stream credits to improve the watershed surrounding the Alabama site. The states of Alabama and Illinois joined the United States in the settlement.

“This settlement holds Swinerton accountable for its widespread Clean Water Act violations and ensures that nearby communities in Alabama and Idaho will benefit from projects to restore waterways and enhance recreation,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “We’re grateful for the work and cooperation of our state partners in helping reach this agreement.”

“Illegal stormwater discharges from construction projects can contaminate municipal drinking water systems and harm aquatic life, which is why EPA, the Justice Department, and our state partners worked together to hold Swinerton Builders accountable for the company’s violations of the Clean Water Act,” said Assistant Administrator David M. Uhlmann of EPA’s Office of Enforcement and Compliance Assurance. “Solar farms are vital to slowing the effects of climate change, but companies building solar farms must comply with environmental protection requirements just as companies must do for any other construction project.”

“My office was pleased to work with the Justice Department to resolve the alleged water pollution violations,” said Illinois Attorney General Kwame Raoul. “Clean water is a critical resource and I will continue the work to protect Illinois water sources.”

“We are pleased with today’s announced settlement, which holds the builder to task for serious stormwater violations that harmed the watershed and its ecosystem,” said ADEM Director Lance LeFleur. “The settlement not only requires Swinerton to pay civil penalties to both the state and federal government, it also obligates the company to mitigate the environmental damage it caused by taking steps to protect water quality and preserve habitats through the purchase of stream credits. Those credits are an investment that will provide long-term benefits to the watershed.”

Background

Swinerton is a California-based construction company that operates nationwide. Until 2021, its Swinerton Renewable Energy division was the country’s leading constructor of utility-scale solar farms.

Solar farm construction involves clearing and grading large sections of land, which can lead to significant erosion and major runoff of sediment into waterways if stormwater controls at the site are inadequate. Increased sediment in waterways can injure, suffocate or kill aquatic life, damage aquatic ecosystems and cause significant harm to drinking water treatment systems. To avoid these harms to the environment and public health, parties responsible for construction of solar farms must obtain construction stormwater permits under the Clean Water Act and comply with the terms of those permits. A complaint filed with the settlement alleges that during its construction of solar farms near American Falls, Idaho, Lafayette, Alabama, and Perry and White Counties, Illinois, Swinerton failed to use proper stormwater controls, did not conduct regular site inspections by qualified personnel and did not accurately report and address stormwater issues. At the Alabama and Idaho sites, Swinerton’s actions led to unauthorized discharges of large volumes of sediment-laden stormwater into nearby waterways. The United States previously settled cases against the owners of the four solar farm sites.

Settlement Details

To resolve the alleged Clean Water Act violations at these sites, Swinerton will pay a civil penalty of $1,614,600 to the United States, $540,500 to ADEM and $144,900 to the State of Illinois. In addition, Swinerton will fund substantial mitigation projects to redress the excess sediment discharges at the Idaho and Alabama sites. In Idaho, Swinerton will provide $600,000 in funding towards a restoration project on the Portneuf River in nearby Pocatello. The project will capture sediment, reconnect riparian and wetland habitat, and provide a host of other environmental and recreational benefits. In Alabama, Swinerton will purchase 14,020 stream credits in the surrounding watershed, which will help preserve the watershed to promote healthier water quality and aquatic habitats.

The Justice Department’s Environmental Enforcement Section lodged the consent decree with the U.S. District Court for the Northern District of California. It is subject to a 30-day public comment period and final court approval. The consent decree can be viewed on the Justice Department’s website: www.justice.gov/enrd/consent-decrees.

Source: United States Department of Justice

The Justice Department announced today that Patriot Bank (Patriot) has agreed to pay $1.9 million to resolve allegations that the bank engaged in a pattern or practice of lending discrimination by redlining majority-Black and Hispanic neighborhoods in Memphis, Tennessee. Redlining is an illegal practice in which lenders avoid providing credit services to individuals living in, or seeking to live in, communities of color because of the race, color or national origin of the residents in those communities.

“This settlement embodies Dr. Martin Luther King Jr.’s commitment to promoting economic justice and ensuring that Black Americans and all communities of color are able to achieve the American dream, and equally access credit to purchase a home,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Justice Department is dedicated to stamping out discriminatory lending practices across this country and we are vigorously committed to holding lenders accountable, no matter their size. This settlement will provide many Memphis families with access to credit that will improve the quality of their lives while opening up opportunities to build intergenerational wealth.”

“For too long, practices like redlining and discriminatory lending have been used to undermine the promises of our economic system,” said U.S. Attorney Kevin G. Ritz for the Western District of Tennessee. “Our office is committed to enforcing fair lending laws and ensuring that banks and lenders are providing communities of color equal access to credit and lending opportunities. This agreement with Patriot Bank signifies an important step toward preserving economic justice and for communities of color in Memphis as they buy homes, start businesses and take part in the American Dream.”

The department’s complaint alleges, from 2015 through at least 2020, Patriot avoided providing mortgage services to majority-Black and Hispanic neighborhoods in Memphis and discouraged people seeking credit in those communities from obtaining home loans. Patriot’s home mortgage lending was focused disproportionately on white areas around the City of Memphis. Over the same six-year period, other banks received nearly 3.5 times as many loan applications compared to Patriot in majority-Black and Hispanic neighborhoods in Memphis. Even when Patriot generated loan applications from majority-Black and Hispanic areas, the applicants themselves were disproportionately white.  

Under the proposed consent order, which is subject to court approval, Patriot will invest $1.9 million to increase credit opportunities for communities of color in Memphis. Specifically, Patriot will:

• Invest at least $1.3 million in a loan subsidy fund to increase access to home mortgage, home improvement and home refinance for residents of majority-Black and Hispanic neighborhoods;

• Spend $375,000 for advertising, outreach, consumer financial education and credit counseling focused on majority-Black and Hispanic neighborhoods;

• Spend $225,000 on community partnerships to provide services that increase residential mortgage credit access for residents of those neighborhoods;

• Ensure at least two mortgage loan officers are dedicated to serving majority-Black and Hispanic neighborhoods in the Bank’s service area;

• Employ a Director of Community Lending who will oversee the continued development of lending in communities of color; and

• Continuously assess the communities’ credit needs throughout the term of the consent order.

The department opened its investigation into Patriot’s lending practices after receiving a referral from the bank’s regulator, the Board of Governors of the Federal Reserve System. Patriot cooperated with the department’s investigation and worked with the department to resolve the redlining allegations.

In October 2021, Attorney General Merrick B. Garland and Assistant Attorney General Clarke launched the Justice Department’s Combating Redlining Initiative, a coordinated enforcement effort to address this persistent form of discrimination against communities of color. Since 2021, the department has announced 11 redlining cases and secured over $109 million in relief for communities of color that have been the victims of lending discrimination across the country.

Additional information about the department’s fair lending enforcement can be found at www.justice.gov/crt/fair-lending-program-0. Individuals may report lending discrimination by calling the Justice Department’s housing discrimination tip line at 1-833-591-0291, or submitting a report online.

Source: United States Department of Justice

A Nevada man was sentenced today to three years in prison for willfully aiding and assisting the filing of false tax returns, in connection with a scheme to sell purported investment opportunities to clients that he falsely claimed would entitle them to IRS tax deductions.

According to court documents and statements made in court, Lance K. Bradford, of Henderson, was a certified public accountant and founder and manager of LL Bradford & Company (LLB). LLB performed accounting-related work, including tax preparation, audit and consulting services. Bradford also operated a real estate business that developed office buildings and other real property. In connection with Bradford’s real estate development activities, he operated and controlled a real estate investment partnership entity.

In 2011, Bradford began offering LLB’s high-net-worth clients an “investment opportunity” through which the clients would make a payment to his partnership entity and, in exchange, receive a large tax deduction of approximately five to seven times the amount of money the client “invested.” Bradford advised that the clients’ payments would entitle them to claim the large tax deduction based on losses derived from the partnership entity, even though he knew the tax laws did not permit the sale of such deductions in exchange for an investment of money, and the partnership did not incur the losses or depreciation in the amounts represented by Bradford. Bradford also did not report the purported investments as losses on the clients’ tax returns as promised. Instead, he caused the clients’ returns to report large false deductions for cost of goods sold, professional and consulting fees or nonpassive losses. In total, Bradford’s scheme caused a tax loss to the IRS of at least $8 million.

As one example from his investment scheme, in 2014, Bradford asked a client to make a $417,780 “investment” to his partnership entity in exchange for purported depreciation-based losses to be placed on his client’s 2013 corporate tax return (Form 1120S). But instead of reporting depreciation related to the investment, Bradford caused LLB to prepare and file a Form 1120S that falsely inflated the company’s cost of goods sold by $2,110,000, causing a tax loss to the IRS of approximately $860,627.

In addition to the term of imprisonment, U.S. District Court Judge Gloria M. Navarro ordered Bradford to serve one year of supervised release and pay $6,734,338 in restitution to the United States.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Jason M. Frierson for the District of Nevada made the announcement.

IRS Criminal Investigation investigated the case, with assistance from the FBI.

Trial Attorney Patrick Burns of the Tax Division and Assistant U.S. Attorney Steven W. Myhre for the District of Nevada prosecuted the case.

Source: United States Department of Justice

A Colorado resident was charged today by an information with hate crimes and firearms charges related to the mass shooting at Club Q, an LGBTQI+ establishment in Colorado Springs, Colorado, on Nov. 19, 2022.

The information charges that Anderson Lee Aldrich, 23, formerly of Colorado Springs, murdered five people, injured 19 and attempted to murder 28 more in a willful, deliberate, malicious and premediated attack at Club Q. According to the information, Aldrich entered Club Q armed with a loaded assault weapon and began firing. Aldrich continued firing until Aldrich was subdued by patrons of the Club. The information also alleges that Aldrich committed this attack because of the actual or perceived sexual orientation and gender identity of any person.

Aldrich filed a notice of disposition and requested that the court schedule a change of plea hearing. In consultation with the victims of this incident, the parties jointly filed a motion requesting that the court schedule the change of plea and sentencing hearings on the same date, which the court granted. The parties further informed the court that there is a plea agreement in this matter, and it is anticipated that the defendant has agreed to plead guilty to all charges in the information. The time for the entry of the guilty plea has not yet been set.

Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division, U.S. Attorney Cole Finegan for the District of Colorado and Special Agent in Charge Mark D. Michalek of the FBI Denver Field Office made the announcement.

The FBI Denver Field Office and Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case.

Assistant U.S. Attorneys Alison Connaughty and Bryan Fields for the District of Colorado and Trial Attorney Maura White of the Civil Rights Division are prosecuting the case.

An information is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.