The United States alleges that Capmark made false statements in HUD applications to guarantee mortgage loans made to acquire the Canoga Care Center, a residential nursing home facility in Canoga Park, Calif., and the Hudson Valley Care Center, located in Ghent, N.Y. After accepting Capmark’s applications for mortgage insurance, HUD was forced to pay $25,895,701.21 when both the Canoga Care Center and Hudson Valley Care Center defaulted on their loans. Pursuant to the False Claims Act, the United States is seeking treble damages and penalties.

“Mortgage fraud is a top priority for this Administration, especially when public dollars are at stake,” said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. “This complaint sends a clear message that we will aggressively pursue allegations of fraud on federal mortgage insurance programs, which are so vitally important to this economy.”

Andersen, a co-founder of the Institute for Global Prosperity, was indicted in 2004 for conspiring to defraud the United States. He pleaded guilty in 2004, and in July 2008, a federal judge sentenced him to 30 months imprisonment for his offenses.

Global Prosperity orchestrated offshore conferences where individuals, which Global Prosperity touted as “experts,” hawked numerous tax fraud schemes. According to the government’s complaint, these vendors falsely told customers that they could revoke or relinquish their Social Security numbers using a U.C.C.-1 filing statement and that wages earned inside the United States are not subject to income taxes. The court papers state that Global Prosperity promoted and sold its products through a multi-level marketing system that rewarded existing salespeople for recruiting new salespeople.

The government complaint asserts that Global Prosperity received cease-and-desist orders from six states’ attorneys general in 1997 and 1998, but that Andersen ignored these orders and continued to promote the organization under a different name and offshore locations. According to court documents, after Global Prosperity disbanded in 2002, Andersen and Lorenzo “Zo” Lamantia founded Stratia Corporation, which continued to promote fraudulent tax schemes, including the fraudulent schemes formerly sold by enjoined tax-fraud promoter Bruce Hawkins. The government enjoined Lamantia from promoting fraudulent tax schemes in July, 2006.

Since 2001, the Justice Department has obtained injunctions against more than 400 tax preparers and tax-fraud promoters. Information about these cases is available on the Justice Department website and about the Justice Department’s Tax Division is available on the Justice Department website.

Faapouli was a senior juvenile correctional officer in Fresno County’s Probation Department when he was called to active duty with the U.S. Navy in June 2004. During a January 2005 training exercise, Faapouli suffered severe back, neck and shoulder injuries which required several surgeries and a long period of recuperation. Following his honorable discharge, he reported back to work for the county in September 2007.

The complaint filed in U.S. District Court for the Eastern District of California alleges that Fresno officials refused to meet with Faapouli to identify an appropriate reemployment position until five months after he first reported to work, made no effort to accommodate Faapouli in his pre-service position, failed to reemploy him at all until June 2008 and ultimately reemployed him in an entry-level position that was not in any way equivalent to his pre-service position.

“Protecting the employment rights of our returning service members is among the highest priorities of the Department of Justice,” said Loretta King, Acting Assistant Attorney General for the Civil Rights Division. “The Department is committed fully to safeguarding the employment rights of our men and women in uniform, particularly those whose sacrifices include a disability incurred while in service to our nation.”

The Labor Department’s Veterans’ Employment and Training Service investigated and attempted to resolve Faapouli’s USERRA complaint before referring it to the Justice Department.

USERRA, which was enacted by Congress in 1994 to minimize disruption in the lives of returning service members, recognizes the additional burden faced by returning veterans who were injured while serving our nation. Accordingly, USERRA requires employers to make reasonable efforts to accommodate a returning service member’s injury or disability. If the returning service member cannot perform the pre-service position with or without an accommodation, USERRA mandates that the employer reemploy the veteran in a position that he or she can perform that is equivalent in seniority, status and pay to the pre-service position.

The Civil Rights Division has given the enforcement of service members’ rights under USERRA a high priority. This is the twelfth USERRA suit the Division has filed this year on behalf of service members. Please visit

http://www.servicemembers.gov and http://www.usdoj.gov/crt/emp for more information.