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Two Plead Guilty and Executive of Maryland IT Companies Charged for Conspiracy to Defraud the Federal Government

Source: United States Department of Justice Criminal Division

On Dec. 17, a federal grand jury in Baltimore returned a superseding indictment charging Victor Marquez, a Maryland resident and owner of two IT companies, with a scheme to defraud the federal government that included rigging bids for IT contracts and receiving kickbacks in exchange for influence over IT procurements. The superseding indictment charges Marquez with conspiracy to commit wire fraud, four counts of wire fraud, and major fraud. 

“As the superseding indictment shows, defendant Victor Marquez and his co-conspirators broke trust with our military and stole millions of dollars from an agency that defends our homeland,” said Deputy Assistant Attorney General Omeed A. Assefi of the Justice Department’s Antitrust Division. “Two of the defendant’s co-conspirators have already pled guilty, and the Antitrust Division will not rest until Marquez is imprisoned.” 

“These bad actors attempted to enrich themselves by using privileged inside access to defraud the federal government,” said U.S Attorney Kelly O. Hayes for the District of Maryland. “This kind of corruption distorts the competitive process, wastes taxpayer dollars, and undermines public trust in government contracting. This office, along with our law-enforcement partners, will continue to pursue and prosecute corruption while holding those accountable who dare to try to steal from our government.” 

“The charges announced today should stand as a reminder that those who defraud the Department of Defense will be held accountable for their actions,” said Special Agent in Charge Christopher Dillard of the DoD Office of Inspector General Defense Criminal Investigative Service (DCIS), Mid-Atlantic Field Office. “The Defense Criminal Investigative Service is committed to protecting the integrity of the DoD procurement process and will pursue all available remedies to root out fraud.” 

“The defendants leveraged personal relationships to make corrupt, under the table deals that enriched themselves at the taxpayers’ expense,” said Special Agent in Charge Jimmy Paul of the FBI Baltimore Field Office. “The FBI and our partners will follow every investigative lead to ensure all those cheating the system are brought to justice.” 

“Ensuring the integrity of federal contracting is critical for an efficient and effective government,” said Deputy Inspector General Kevin Gerrity of the National Security Agency. “I commend our team, our law enforcement partners, and the Justice Department for their dedication and collaboration.” 

As alleged in the superseding indictment, Marquez and his co-conspirators used his access to sensitive procurement information to rig bids for procurements for large U.S. government IT contracts. Marquez and his co-conspirators concealed Marquez’s role in the scheme to ensure his continued access to sensitive procurement information, and Marquez received compensation in form of kickbacks for steering procurements to his co-conspirators, who referred to the payments to Marquez as the “Vic tax.” As a result of the scheme, Marquez obtained over $3.8 million in funds that were built into the government’s purchase price. 

James Briar, an IT sales representative, and Robert Fay, an IT sales executive, pleaded guilty in related cases. On Aug. 11, Briar pleaded guilty to conspiracy to pay illegal kickbacks. On Oct. 1, Fay pleaded guilty to conspiracy to pay illegal kickbacks and to violating the Anti-Kickback Act. Sentencing hearings will be set at a later date. Briar faces a maximum penalty of five years in prison, and Fay faces a maximum penalty of 10 years in prison.  

If convicted, Marquez faces maximum penalties of 20 years in prison for each conspiracy and wire fraud count and 10 years in prison for the major fraud charge. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. 

The DoD Office of Inspector General Defense Criminal Investigative Service, the FBI Baltimore Field Office, and NSA Office of Inspector General investigated the case. Trial Attorneys Elizabeth French, Anna Wang, and Ronald Fiorillo for the Antitrust Division’s Washington Criminal Section and Assistant U.S. Attorneys Sean M. Delaney and Darren Gardner for the District of Maryland are prosecuting the case. 

In November 2019, the Justice Department created the Procurement Collusion Strike Force (PCSF), a joint law enforcement effort to combat antitrust crimes and related fraudulent schemes that impact government procurement, grant and program funding at all levels of government — federal, state and local. To learn more about the PCSF, or to report information on bid rigging, price fixing, market allocation and other anticompetitive conduct related to government spending, go to www.justice.gov/procurement-collusion-strike-force.  

Anyone with information in connection with this investigation can contact the PCSF at the link listed above. Whistleblowers who voluntarily report original information about antitrust and related offenses that result in criminal fines or other recoveries of at least $1 million may be eligible to receive a whistleblower reward. For more information on the Antitrust Whistleblower Rewards Program, visit www.justice.gov/atr/whistleblower-rewards. 

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Justice Department Issues Updated Letters and Fact Sheet About Professional License Portability for Servicemembers and their Spouses

Source: United States Department of Justice Criminal Division

The Justice Department announced today that it has issued updated materials explaining recent changes to the law that governs the portability of professional licenses for servicemembers and their spouses. The materials include a letter for state licensing authorities and another for state offices that license attorneys. The letters explain recent changes to the Servicemembers Civil Relief Act (SCRA) section that allows servicemembers and their spouses to use their professional licenses or certificates in new states if they are relocating because of military orders and meet certain other requirements. The Justice Department also issued a fact sheet outlining the updated license portability provision.

“Military families are the backbone of American society,” said Assistant Attorney General Harmeet K. Dhillon of the Justice Department’s Civil Rights Division. “Servicemembers and their spouses often sacrifice the stability of settling in one place during a critical time in their career. The Department is steadfast in its commitment to ensuring that servicemembers and their spouses do not face unreasonable barriers to continuing their careers while they uproot their lives in service to our country.”

In January 2023, Congress added the license portability provision to the SCRA — a law that provides servicemembers and their families with a wide variety of financial and housing protections — to make it easier for servicemembers and military spouses to have their professional licenses recognized when they relocate to another state due to military orders. Congress amended this provision in December 2024. One significant update removed a restriction on the portability of law licenses, which are now included in the law, along with all other licensed professions. 

Since 2011, the Department has obtained over $483 million in monetary relief for over 148,000 servicemembers through its enforcement of the SCRA. For more information about the Department’s enforcement efforts under the SCRA and other laws that protect the rights of servicemembers and their families, please visit www.servicemembers.gov.

Servicemembers and their dependents who believe that their rights under the SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at http://legalassistance.law.af.mil. If servicemembers or their spouses are not eligible for military legal assistance services, they may request that the Justice Department review their claim by submitting a complaint through https://civilrights.justice.gov/link/4025A. 

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CEO of Health Care Software Company Sentenced for $1B Fraud Conspiracy

Source: United States Department of Justice

An Arizona man was sentenced Friday to 15 years in prison and ordered to pay more than $452 million in restitution for conspiring to defraud Medicare and other federal health care benefit programs of more than $1 billion by operating a platform that generated false doctors’ orders used to support fraudulent claims for various medical items.

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Court Sides with Justice Department by Stopping Michigan from Shutting Down Critical International Pipeline

Source: United States Department of Justice

The U.S. District Court for the Western District of Michigan this week granted Enbridge Energy Limited Partnership (Enbridge)’s motion for summary judgment and stopped the State of Michigan from shutting down a critical international pipeline called Line 5. In September, the Justice Department’s Environment and Natural Resources Division (ENRD) and Civil Division filed a statement of interest in the case.

“This ruling by the court reaffirms the federal government’s unique responsibilities in regulating interstate pipelines and enforcing international treaties,” said Principal Deputy Assistant Attorney General Adam Gustafson of the Justice Department’s Environment and Natural Resources Division (ENRD). “If a state exceeds its authority to disrupt the flow of energy, we will step in to re-assert the federal government’s prerogative. President Trump has set America on a strong, winning path toward securing energy dominance. This ruling undergirds that effort.”

In 2020, Michigan tried to shut down the pipeline by moving to stop Enbridge from using an easement, which had allowed the pipeline to run underneath the Straits of Mackinac between Lake Michigan and Lake Huron for decades. The court held that federal law preempts Michigan’s efforts to shut down the pipeline, for two reasons.

First, the Pipeline Safety Act provides exclusive authority to the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration to set nationwide safety standards for interstate pipelines and related infrastructure. The Act prevents a state from imposing its own safety standards on an interstate (and an international) pipeline. The court concluded that Michigan “unlawfully” attempted to “regulate the safety of Line 5 by attempting to shut it down” and by “‘continuing in force’ numerous state safety standards found” in the easement.

Second, the pipeline is subject to a treaty between the United States and Canada, and the United States has an express policy preference in favor of the uninterrupted flow of oil through international pipelines. And, as the court recognized, a “compelled shutdown of an international pipeline blatantly defies” that federal foreign policy. 

Chief of Staff and Senior General Counsel John Adams of ENRD filed the statement of interest.

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MS-13 Members Sentenced to Mandatory Life for Racketeering, Two Murders, and Stabbing Five Victims, Including a 16-Year-Old Girl

Source: United States Department of Justice Criminal Division

Baltimore, Maryland – Three men received life sentences, today, for federal conspiracy to participate in a racketeering enterprise involving murders, attempted murders, and drug trafficking, as well as murder in aid of racketeering charges. Wilson Arturo “Humilde” “Marco Saravia” Constanza-Galdomez, 26, of El Salvador; Edis Omar “Little Felon” Valenzuela-Rodriguez, 24, of Honduras; and Jonathan “Truney” Pesquera-Puerto, 24, all received the mandatory sentence.  

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Two National MS-13 Gang Leaders and Two Other MS-13 Members Convicted of Racketeering Charges and Murders in Queens and on Long Island

Source: United States Department of Justice Criminal Division

Today a federal jury in Brooklyn returned guilty verdicts against national MS-13 leaders Edenilson Velasquez Larin, also known as “Agresor,” Saturno,” “Tiny,” and “Paco,”; Hugo Diaz Amaya, also known as “21”; Fulton Locos Salvatruchas (Fulton) clique leader Jose Espinoza Sanchez, also known as “Cable,” “Bleca,” and “Fantasma”; and Fulton member Jose Arevalao Iraheta, also known as “Splinter,” “Inesperado,” and “Daniel.”  The four defendants were convicted on 24 counts of a third superseding indictment. 

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Department of Justice Files Statement of Interest Supporting Competition Among Real Estate Brokerages

Source: United States Department of Justice Criminal Division

Today, the Antitrust Division of the Department of Justice filed a statement of interest in the U.S. District Court for the Eastern District of Pennsylvania in the case of Davis et al. v. Hanna Holdings Inc. The lawsuit, brought by homebuyers, alleges that real-estate brokerages and their trade association, the National Association of Realtors, entered into anticompetitive agreements that inflated broker commissions and raised home prices for Americans. The statement of interest explains that competition among real-estate brokerages is critical for protecting American homebuyers and that trade association rules are subject to antitrust scrutiny in a number of ways.

“Purchasing a home is the single biggest purchase most Americans make in a lifetime,” said Assistant Attorney General Abigail Slater of the Justice Department’s Antitrust Division. “Today’s soaring housing prices make competition in real estate brokerage more important than ever. Antitrust laws are key to safeguarding competition, which reduces prices and improves services for homebuyers.”

Americans spend about a third of their budgets on housing and housing-related costs. Yet real-estate broker commissions in the United States have remained at 5% to 6% for decades — two to three times more than that in other developed economies. Trade association rules that artificially inflate broker commissions and increase the burden on American consumers must be closely scrutinized by antitrust laws.

U.S. courts have long recognized that trade associations violate the antitrust laws when they unreasonably restrict competition among their members. While taking no position on the ultimate disposition of the case, the statement of interest explains that competition among real-estate brokerages is critical for protecting American homebuyers and that the antitrust laws provide a remedy when real-estate brokers agree to stop competing with one another — whatever form that agreement takes. When plaintiffs challenge trade association rules that embody an agreement among competitors, the rules are subject to a challenge under Section 1 of the Sherman Act. In addition, the statement of interest explains that association rules are not automatically exempt from the per se rule prohibiting horizontal price fixing.

The Antitrust Division routinely files statements of interest and amicus briefs in federal court where doing so helps protect competition and consumers, including by encouraging the sound development of the antitrust laws.