Daily Law Blog

Roderick Prescott, a resident of Orem, Utah, and a former principal of National Trust Services (NTS) in San Jose, Calif., and later Selma, Ore., has been sentenced to 30 months in prison for tax evasion, the Justice Department and Internal Revenue Service (IRS) announced today.

In June 2009, Prescott pleaded guilty to tax evasion and admitted to evading at least $550,000 in personal income taxes for 1998 and 1999. According to the indictment, the plea agreement and the government’s trial brief, Prescott and his former business partner Leroy Fritts (now deceased) earned significant income from the nationwide promotion and sale of abusive trusts through NTS, which they founded in 1988. Prescott and Fritts deposited approximately $3.5 million into various bank accounts through the sale of such trusts. They also earned income from recruiting clients of NTS to invest in Fountainhead Global Trust (FGT), a purported offshore investment that promised returns as high as 50 percent per year.
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Donald Mathias, 64, has been indicted for allegedly traveling to the Philippines in 2007 and 2008 to engage in sexual conduct with minors .

Mathias, whose last known residence is in the Southern District of Florida, was arraigned today before Magistrate Judge Barry S. Seltzer in U.S. District Court in Fort Lauderdale, Fla.
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A former New Jersey subcontractor representative pleaded guilty today to charges contained in an indictment involving his role in kickback and fraud conspiracy at a U.S. Environmental Protection Agency (EPA) Superfund site in New Jersey, announced the Department of Justice.

James E. Haas Jr., a former representative of a subcontractor that provides common backfill, a type of soil material used to refill an excavation, pleaded guilty in the U.S. District Court of New Jersey, to charges that he engaged in a kickback and fraud conspiracy at the Federal Creosote Superfund site in Manville, N.J. Haas admitted to paying kickbacks to former employees of a prime contractor at Federal Creosote in exchange for the award of a subcontract. He also admitted to inflating prices for the subcontract to include the amount of the kickbacks paid to his co-conspirators. Haas also pleaded guilty to committing fraud against the United States. The indictment was filed on Aug. 31, 2009. Sentencing is set for Feb. 8, 2010. The remaining individuals charged in the indictment, John A. Bennett, the former chief executive officer of subcontractor Bennett Environmental Inc. (BEI), and Gordon D. McDonald, a former project manager for a prime contractor, await trial, which is set for Jan. 5, 2010.
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Troy, Mich., resident Syed Aziz pleaded guilty today in U.S. District Court in Detroit to participating in a conspiracy to defraud the Medicare program.

In his plea today, Aziz, a licensed physical therapist, admitted that he began working in approximately May 2005 as a contract therapist for a co-conspirator, Suresh Chand.  Chand owned and controlled several companies operating in the Detroit area that purported to provide physical and occupational therapy services to Medicare beneficiaries.  Aziz admitted that he, Chand, and others created fictitious therapy files appearing to document physical and occupational therapy services provided to Medicare beneficiaries, when in fact no such services were provided.  According to court documents, the fictitious services reflected in the files were billed to Medicare through sham Medicare providers controlled by co-conspirators.
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The Justice Department today announced that it has reached a settlement with the city of Marion, Ark., that, if approved by the U.S. District Court for the Eastern District of Arkansas, will resolve the department’s lawsuit against the city alleging race discrimination in employment in violation of Title VII of the Civil Rights Act of 1964, as amended. Title VII prohibits discrimination in employment on the basis of race, sex, national origin or religion.

The department’s complaint, filed in May 2009, alleges that the city discriminated against Stacy D. Allen, an African-American and a former part-time patrol officer in the city’s police department, when it did not appoint him as a full-time patrol officer. The complaint alleges that the police department had a history of appointing the most senior part-time patrol officer as a full-time officer when a full-time position became available. However, when Allen, who was the city’s only African-American patrol officer, became the most senior part-time patrol officer and two full-time positions opened, the city appointed two less senior white part-time patrol officers to those positions instead of Allen. The Justice Department’s complaint was based on a charge of discrimination filed by Allen with the Equal Employment Opportunity Commission.
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A former U.S. Army contracting official was sentenced today to 40 months in prison for accepting more than $80,000 in bribes in exchange for corruptly providing contract work to two Afghan trucking companies, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer and U.S. Attorney Neil H. MacBride of the Eastern District of Virginia.

James Paul Clifton, 35, of Newport News, Va., was also ordered by U.S. District Court Judge Liam O’Grady to serve three years of supervised release following the prison term.  Clifton pleaded guilty to one count of bribery on Aug. 7, 2009, in U.S. District Court for the Eastern District of Virginia.
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