The Regenerative Sciences case originated in Colorado where Christopher J. Centeno, M.D. and John R. Schultz, M.D. practicing jointly through the Centeno-Schultz Clinic (the Clinic), developed and used the “RegenxxTM Procedure” (the Procedure) to treat joint, muscle, bone and related conditions. Drs. Centeno and Schultz are majority shareholders in Regenerative Sciences (Regenerative) which owns the Procedure, licenses it exclusively to the Clinic, and provided laboratory services as part of the Clinic’s use of the Procedure to treat patients. The Procedure involved taking blood and bone marrow samples from the patient at the Clinic; transporting them several miles to Regenerative where ASCs were isolated and cultured to “expand” or produce more cells; transporting them to the Colorado Genetics Laboratory for visual inspection to confirm the absence of genetic abnormalities; returning them to Regenerative; and some 4 to 6 weeks after initial extraction, transporting the resulting cell product to the Clinic for reinjection at the patient’s site of injury or degeneration. Patients reported significant improvement while avoiding the physical and financial costs of invasive surgery. In 2008 the FDA notified the two physicians, Regenerative and Regenerative’s lab director that the RegenxxTM Procedure cell product constituted a “drug” under the Food Drug and Cosmetics Act and a “biologic” under the Public Health Service Act. Consequently, the Procedure could not be used without first obtaining pre-marketing approval.
The FDA regulates medical drugs and devices under the FDCA and biologics under the PHSA, and requires some form of pre-marketing approval for many of them. In doing so, however, it typically deals with commercial pharmaceutical companies; state law governs physicians in the practice of medicine. Thus, while FDA regulations obviously affect the drugs, devices and biologics available for physician use, they normally do not target a physician’s actual treatment of a patient. Because medical advances routinely occur “at the bedside” without FDA oversight, the Regenerative defendants and the medical profession at large were deservedly surprised to learn that the FDA had decided to regulate autologous ASCs as human cell, tissue and tissue-based products (HCT/Ps).
The FDA’s HCT/P regulations can be found at 21 C.F.R. § 1271 and create a tiered framework based on PHSA §§ 351 and 361. We will not delve into its complexity here beyond saying that the agency predicates the extent of regulation on the degree of risk to a patient. PHSA § 361 provides minimal oversight of low-risk HCT/Ps that are, inter alia, 1) no more than minimally manipulated; 2) used for their same original or “homologous” purpose; and 3) autologous, i.e., the patient is treated with her own cells. PHSA § 361 manufacturers must comply with various registration and reporting requirements but do not need to obtain pre-marketing approval before using the HCT/P. In the FDA’s view, even though the RegenexxTM Procedure is used for autologous (same patient) purposes, it involved more than minimal manipulation. This made the resulting cell product a “biologic” under PHSA §351 and a “drug” under the FDCA.
Consequently, Regenerative had unwittingly become an “establishment” that “manufactured” § 351 HCT/Ps. Treating a patient with her own cells had become “marketing” in need of prior approval by the FDA. Without pre-market approval, the cell product – based on the patient’s own cells – had become an “adulterated” and “misbranded” drug and biologic under the FDCA and the PHSA. In effect, Regenerative would need to submit to the same pre-marketing approval process as Pfizer, the world’s leading pharmaceutical company with self-reported revenues of $59 billion for 2012. This was true even though Regenerative Sciences existed solely to enable its two physician-owners to extract, expand and re-inject a patient’s cells for the sole purpose of restoring that patient’s function and reducing that patient’s pain. Despite their dramatically different resources, Regenerative and Pfizer would be equally required to conform to Current Good Manufacturing Practices (CGMPs) and conduct formal clinical trials – quite the challenge when dealing with a patient who wants to use her own stem cells now as opposed to several if not many years in the future.
Litigation ensued and the case was eventually tried in the federal district court for the district of D.C. Regenerative challenged the FDA’s authority to regulate at all, arguing: 1) Congress never intended its Commerce Clause power to interfere with the practice of medicine; and 2) there was no interstate commerce since all activities were confined to Colorado. The court disagreed, reasoning that state practice of medicine laws do not preclude federal law from affecting and effectively regulating certain aspects of a physician’s practice. Further, interstate commerce existed because the Procedure used drugs shipped from out-of-state.
The court also upheld the FDA’s ability to regulate a patient’s own cells. Although “a close call,” the court explained that the RegenexxTM cell product falls within the FDCA’s technical definition of a “drug” because it is an “article … intended to affect the structure or function of the body ….”  It simultaneously qualifies as a PHSA “biologic product” because like a “therapeutic serum, … blood, blood component or derivative, protein … or analogous product,” it is “applicable to prevention, treatment or cure of a disease or condition in human beings.” Defendants’ website and pleadings showed that the RegenexxTM Procedure and ASC treatment were “intended to affect the structure or function of the body” and “applicable to prevention, treatment or cure of a disease or condition in human beings.” The FDA therefore had authority under both statutes to promulgate and enforce HCT/P regulations, and tie the degree of oversight to the degree of cell manipulation. The Procedure’s “many steps”  could constitute more than manipulation under § 351 and, in any event, the agency’s finding of more than minimal manipulation deserved “substantial deference” by the court. Accordingly, the court entered summary judgment for the FDA, dismissed all counterclaims, and permanently enjoined use of the RegenexxTM Procedure. On appeal, each side has essentially stood firm in their positions, with Regenerative receiving the support of amici American Association of Orthopaedic Medicine, the Association of American Physicians & Surgeons, Inc. and Tim Turner (whose Parkinson’s disease has not responded to available treatments).
At first glance, the idea of the FDA regulating our own cells looks like an outrageous invasion of individual privacy and denial of personal autonomy. If patients weigh risks and benefits of medical treatments every day, why prevent them from doing so with their own cells? This question is especially compelling where a patient has few or no effective therapies, and limited or no access to experimental treatments. That a treatment may be more risky in the hands of untrained or unskilled doctors is not unique to autologous adult stem cell therapies; this problem pervades medical practice.
Despite the intuitive appeal of defendants’ position, a closer look at the medical procedures, the applicable statutes and the trial court’s assessment of both indicates that the FDA has the stronger argument on all counts. Using components shipped between states has frequently sufficed as interstate commerce in past case law. The cell product and its intended use do fall within the statute’s literal and technical definitions of a drug and a biologic as well as the regulatory definition of a human cell, tissue or tissue-based product.
If the agency’s power and discretion to regulate are upheld, the facts of this case are problematic because the degree of manipulation determines whether an HCT/P must satisfy the burdensome criteria of § 351 or § 361’s comparatively milder requirements. The RegenexxTM Procedure involves “many steps” to isolate and expand the cells including “selective culture and expansion of a multitude of different types of blood-forming and rare bone marrow stromal cells using plastic flasks, additives and nutrients, and environmental conditions such as temperature and humidity, to determine the growth and biological characteristics of the resulting cell population.” Over the course of 4 to 6 weeks, the cell product is moved between several locations: the Clinic, the Regenerative Sciences lab, an outside testing lab, back to Regenerative, and back to the Clinic.
These facts create a strong case for finding minimal manipulation. Plus, courts routinely defer to agency rule-making, interpretation and enforcement especially in matters of science and technology. Although the arguments for each side are more complex and nuanced, the big picture seems to show that the stars are in alignment for the FDA which, in our assessment, will likely prevail at the appellate level. This is not to say that we hope the government succeeds in derailing autologous adult stem cell therapies. We simply think the rules of statutory interpretation and administrative procedure will weigh in the agency’s favor in this case, especially with this particular set of facts.
Regardless of how the D.C. Circuit resolves this case, one thing is clear: the FDA should re-examine its HCT/P regulations especially as applied to physicians treating patients with their own cells. Extracting a patient’s cells for subsequent reinjection undoubtedly carries risk – but so does banking one’s own blood or freezing eggs for later use. Conditioning the extent of regulation on the degree of manipulation may make sense on paper but is vague and confusing in practice, especially in the dynamic field of cellular therapies. In an age of relentless cost inflation and limited therapies for debilitating illness, it makes no sense to deprive patients of autologous therapies because their physician lacks the resources – and patients lack the time – to satisfy the pre-marketing requirements that oppress even Merck and Johnson & Johnson. The FDA is obligated to protect the public health as well as individual patients. Critical to this mission is striking the proper balance of risks and benefits, where the benefits include facilitating medical innovation. In the context of adult stem cell regulation, especially autologous cells, it is time for that risk-benefit balance to be recalibrated. Stem cell therapies, even autologous ones, should be regulated, but those regulations must be re-designed to fit the parties and products being regulated. To be blunt, it makes no sense for the FDA to insist that a practicing physician who is treating an individual patient must conform to the same pre-marketing and manufacturing requirements that bind large-scale, commercial pharmaceutical manufacturers that produce drugs in bulk for mass distribution. Moreover, the agency should not monopolize risk-benefit calculations to the exclusion of patients who, with the counsel of their physicians, want to make their own calls about using their own cells to treat their own conditions. Preventing them from doing so is already leading many patients to assume other and perhaps greater forms of risk, such as seeking treatments in foreign clinics that may or may not be up to the task.
Suing an agency is usually an uphill and often losing battle. We doubt that Regenerative Sciences and cases of its kind will do much to lower regulatory hurdles. Some form of regulation is needed, but the FDA must recognize that its current HCT/P framework is ill-suited to many kinds of cellular therapies. It could revamp its HCT/P framework entirely, but that will take time. In the near term, the agency should reach beyond existing expert advisory committees and public comment sessions. It should engage in a true collaboration with a wider group of physicians and surgeons who are already using or stand ready to use various types of autologous adult stem cell therapies, and the patients who have had or want treatment. It can also look to the guidelines of relevant organizations, such as the American Association of Blood Banks or various physician organizations. Only then can the FDA get a firm handle on what kinds of techniques and treatments present tolerable levels of risk when balanced with the need for innovation and the basic right of patients to use their own cells. After all, patients are the ones who must bear the burdens of illness, not the regulators, judges or attorneys.
Beautiful and insightful commentary! I, myself with medical doctors throughout the world, have been in the practice of autologous stem cell treatments for orthopedic, Dr. Joseph Purita, neurological and autoimmune conditions. I have seen many patients that have the financial burdens of too costly of medical treatments only to run out of options as conventional treatment are not working. I have performed in excess of over 6,000 treatments in the past 6 years to see patients overcome illness where conventional therapies have failed. Thank you.
A very comprehensive and informative review of the state of regulation of autologous cell therapies and some provocative thinking about the balance between safety and freedom of choice. I expect we will be struggling with this balance for the foreseeable future. Thank you!
The NIH’s clinicaltrials.gov site lists some 4500 ASC trials as compared with 27 for embryonic stem cells and 21 for induced pluripotent stem cells.
The remaining records are not “trails” involving hESC-based interventions.
My current understanding is there are 6 hESC-based clinical trials in progress and 1 trial has been terminated. I mention this because the figure of 27 trials is misleading, and it has already been disseminated on social media.
Given the apparent 4-fold discrepancy between these figures, I would encourage additional explanation of the results or a revision of the reported number to best reflect the state of the field.
The historical and legal perspectives in the first half of the article are spot on and helpful.
However, parts of the later portion where you argue for weakening of the regulation of propagated adult stem cell therapies greatly concern me and you have left out some very important elements that are key to understanding the ongoing debate over the appropriate level of regulatory oversight for stem cell therapies. For example, you pretty much gloss over the safety concerns related to these stem cell interventions.
It seems to me that changes are definitely needed at the FDA in some respects related to stem cells such as expanded compassionate use of stem cells for patients with fatal diseases and a push for more openness. So we agree on a need for change at the FDA on stem cells. But the weakening of regulatory standards for propagated adult stem cell interventions would greatly increase patient risk. Further, as the numerous outstanding adult stem cell biotechs such as Athersys and Mesoblast have shown, in the stem cell field a company can have its innovation and be compliant too.
Your statement, “Conditioning the extent of regulation on the degree of manipulation may make sense on paper but is vague and confusing in practice, especially in the dynamic field of cellular therapies” is very puzzling.
In fact, the degree of manipulation is operationally (not just on paper) extremely important from a patient safety perspective and it makes perfect common sense that stem cells manipulated in different ways and to different degrees should be subject to different regulations. I do not see what’s vague or confusing about that at all.
On the other hand, your argument that smaller companies producing stem cell drugs should not be subject to the same regulations as larger companies is a dangerous one. Since when is the law variable depending on the size of the entity that should be following that law? Just as small and large drug manufacturers of pill (chemical) drugs have to follow the same rules to provide data on safety and efficacy, smaller companies selling stem cell drug interventions should have to follow the same rules and laws as big companies. To do otherwise would put patients at great risk. Don’t underestimate the number of patients collectively that stem cell clinics are treating and putting at risk these days: the numbers are in the many thousands and growing.
As Goffrey pointed out, the authors completely off with numbers of clinical trials. This is very misleading for the public. Unlike the authors of this post, he spend some time to read it through the trials (it’s easy thing to do for iPS and hES trials) and got the right numbers. Everyone can do this correct data mining. Just take some time, before throw some numbers for public view.
As for iPS, out of 21 listed by authors in the post, 0 trials are therapeutic. Out of >4500 more than 70% are drugs and combinations for hematopoietic progenitor cell transplant for homologous use in hematology-oncology. All of these assess drugs for conditioning regimen or something else, but not efficacy of cells themselves.
Finally, NCT database represents about 75% of world’s available clinical trials registries and therefore doesn’t give the whole picture.
Unfortunately, the authors are not addressing comments above.
I think, everyone could agree, that FDA needs to reform and tune up a current view (regulations) on some (or many) kinds of cell therapy. I think, agency understands it, but can’t modify the current law quickly, because of novel and uncertain nature of cell therapies.
As Geoffrey pointed out, there is a huge discrepancy between number of trials, indicated by authors and reality. Unlike the authors, he did a great analysis and came with a correct real picture. It is very important to read through trials and understand what is all about. Throwing numbers, retrieved by search results, without sorting it out and hand coding, could mislead public hugely.
I really enjoyed this article having some experience on the research side with embryonic stem cells. Perhaps this is too simplistic but would it be unreasonable to assert that patients suffering from degenerative or terminal diseases be exempt from regulations on use of their own cells from a humanitarian position? Well, not exempt per se. I think it would be useful to mandate reporting the specific therapy/patient progress to FDA to monitor effectiveness perhaps within a specified period of time to allow the providers to patent their procedure. Nonetheless, I think that Paul raises an important point regarding safety if we simply allow small organizations looser regulations.


§109.1 When will this part apply?
§109.10 How do political committees and other persons report independent expenditures?
§109.11 When is a “non-authorization notice” (disclaimer) required?
§109.20 What does “coordinated” mean?
§109.21 What is a “coordinated communication”?
§109.22 Who is prohibited from making coordinated communications?
§109.23 Dissemination, distribution, or republication of candidate campaign materials.
§109.30 How are political party committees treated for purposes of coordinated and independent expenditures?
§109.32 What are the coordinated party expenditure limits?
§109.33 May a political party committee assign its coordinated party expenditure authority to another political party committee?
§109.34 When may a political party committee make coordinated party expenditures?
§109.36 Are there circumstances under which a political party committee is prohibited from making independent expenditures?
§109.37 What is a “party coordinated communication”?
Authority: 52 U.S.C. 30101(17), 30104(c), 30111(a)(8), 30116, 30120; Sec. 214(c), Pub. L. 107-155, 116 Stat. 81.
Source: 68 FR 451, Jan. 3, 2003, unless otherwise noted.
This part applies to expenditures that are made independently from a candidate, an authorized committee, a political party committee, or their agents, and to those payments that are made in coordination with a candidate, an authorized committee, a political party committee, or their agents. The rules in this part explain how these types of payments must be reported and how they must be treated by candidates, authorized committees, and political party committees. In addition, subpart D of part 109 describes procedures and limits that apply only to payments, transfers, and assignments made by political party committees.
(1) To request or suggest that a communication be created, produced, or distributed.
(2) To make or authorize a communication that meets one or more of the content standards set forth in 11 CFR 109.21(c).
(3) To create, produce, or distribute any communication at the request or suggestion of a candidate.
(vi) The size or prominence of a printed communication, or duration of a communication by means of broadcast, cable, or satellite.
(5) To make or direct a communication that is created, produced, or distributed with the use of material or information derived from a substantial discussion about the communication with a candidate.
(3) To request or suggest that any other person create, produce, or distribute any communication.
(5) To provide material or information to assist another person in the creation, production, or distribution of any communication.
(6) To make or direct a communication that is created, produced, or distributed with the use of material or information derived from a substantial discussion about the communication with a different candidate.
(a) Political committees, including political party committees, must report independent expenditures under 11 CFR 104.4.
(b) Every person that is not a political committee and that makes independent expenditures aggregating in excess of $250 with respect to a given election in a calendar year shall file a verified statement or report on FEC Form 5 in accordance with 11 CFR 104.4(e) containing the information required by paragraph (e) of this section. Every person filing a report or statement under this section shall do so in accordance with the quarterly reporting schedule specified in 11 CFR 104.5(a)(1)(i) and (ii) and shall file a report or statement for any quarterly period during which any such independent expenditures that aggregate in excess of $250 are made and in any quarterly reporting period thereafter in which additional independent expenditures are made.
(c) For each election in which a person who is not a political committee makes independent expenditures, the person shall aggregate its independent expenditures made in each calendar year to determine its reporting obligation. When such a person makes independent expenditures aggregating $10,000 or more for an election in any calendar year, up to and including the 20th day before an election, the person must report the independent expenditures on FEC Form 5, or by signed statement if the person is not otherwise required to file electronically under 11 CFR 104.18. (See 11 CFR 104.4(f) for aggregation.) The person making the independent expenditures aggregating $10,000 or more must ensure that the Commission receives the report or statement by 11:59 p.m. Eastern Standard/Daylight Time on the second day following the date on which a communication is publicly distributed or otherwise publicly disseminated. Each time subsequent independent expenditures relating to the same election aggregate an additional $10,000 or more, the person making the independent expenditures must ensure that the Commission receives a new 48-hour report of the subsequent independent expenditures. Each 48-hour report must contain the information required by paragraph (e)(1) of this section.
(d) Every person making, after the 20th day, but more than 24 hours before 12:01 a.m. of the day of an election, independent expenditures aggregating $1,000 or more with respect to a given election must report those independent expenditures and ensure that the Commission receives the report or signed statement by 11:59 p.m. Eastern Standard/Daylight Time on the day following the date on which a communication is publicly distributed or otherwise publicly disseminated. Each time subsequent independent expenditures relating to the same election aggregate $1,000 or more, the person making the independent expenditures must ensure that the Commission receives a new 24-hour report of the subsequent independent expenditures. (See 11 CFR 104.4(f) for aggregation.) Such report or statement shall contain the information required by paragraph (e) of this section.
(e) Content of verified reports and statements and verification of reports and statements.
(vi) The identification of each person who made a contribution in excess of $200 to the person filing such report, which contribution was made for the purpose of furthering the reported independent expenditure.
(2) Verification of independent expenditure statements and reports. Every person shall verify reports and statements of independent expenditures filed pursuant to the requirements of this section by one of the methods stated in paragraph (e)(2)(i) or (ii) of this section. Any report or statement verified under either of these methods shall be treated for all purposes (including penalties for perjury) in the same manner as a document verified by signature.
(i) For reports or statements filed on paper (e.g., by hand-delivery, U.S. Mail, or facsimile machine), the person who made the independent expenditure shall certify, under penalty of perjury, the independence of the expenditure by handwritten signature immediately following the certification required by paragraph (e)(1)(v) of this section.
(ii) For reports or statements filed by electronic mail, the person who made the independent expenditure shall certify, under penalty of perjury, the independence of the expenditure by typing the treasurer's name immediately following the certification required by paragraph (e)(1)(v) of this section.
Whenever any person makes an independent expenditure for the purpose of financing communications expressly advocating the election or defeat of a clearly identified candidate, such person shall comply with the requirements of 11 CFR 110.11.
(a) Coordinated means made in cooperation, consultation or concert with, or at the request or suggestion of, a candidate, a candidate's authorized committee, or a political party committee. For purposes of this subpart C, any reference to a candidate, or a candidate's authorized committee, or a political party committee includes an agent thereof.
(b) Any expenditure that is coordinated within the meaning of paragraph (a) of this section, but that is not made for a coordinated communication under 11 CFR 109.21 or a party coordinated communication under 11 CFR 109.37, is either an in-kind contribution to, or a coordinated party expenditure with respect to, the candidate or political party committee with whom or with which it was coordinated and must be reported as an expenditure made by that candidate or political party committee, unless otherwise exempted under 11 CFR part 100, subparts C or E.
(3) Satisfies at least one of the conduct standards in paragraph (d) of this section.
(b) Treatment as an in-kind contribution and expenditure; Reporting—(1) General rule. A payment for a coordinated communication is made for the purpose of influencing a Federal election, and is an in-kind contribution under 11 CFR 100.52(d) to the candidate, authorized committee, or political party committee with whom or which it is coordinated, unless excepted under 11 CFR part 100, subpart C, and must be reported as an expenditure made by that candidate, authorized committee, or political party committee under 11 CFR 104.13, unless excepted under 11 CFR part 100, subpart E.
(2) In-kind contributions resulting from conduct described in paragraphs (d)(4) or (d)(5) of this section. Notwithstanding paragraph (b)(1) of this section, the candidate, authorized committee, or political party committee with whom or which a communication is coordinated does not receive or accept an in-kind contribution, and is not required to report an expenditure, that results from conduct described in paragraphs (d)(4) or (d)(5) of this section, unless the candidate, authorized committee, or political party committee engages in conduct described in paragraphs (d)(1) through (d)(3) of this section.
(3) Reporting of coordinated communications. A political committee, other than a political party committee, that makes a coordinated communication must report the payment for the communication as a contribution made to the candidate or political party committee with whom or which it was coordinated and as an expenditure in accordance with 11 CFR 104.3(b)(1)(v). A candidate, authorized committee, or political party committee with whom or which a communication paid for by another person is coordinated must report the usual and normal value of the communication as an in-kind contribution in accordance with 11 CFR 104.13, meaning that it must report the amount of the payment as a receipt under 11 CFR 104.3(a) and as an expenditure under 11 CFR 104.3(b).
(c) Content standards. Each of the types of content described in paragraphs (c)(1) through (c)(5) of this section satisfies the content standard of this section.
(1) A communication that is an electioneering communication under 11 CFR 100.29.
(2) A public communication, as defined in 11 CFR 100.26, that disseminates, distributes, or republishes, in whole or in part, campaign materials prepared by a candidate or the candidate's authorized committee, unless the dissemination, distribution, or republication is excepted under 11 CFR 109.23(b). For a communication that satisfies this content standard, see paragraph (d)(6) of this section.
(3) A public communication, as defined in 11 CFR 100.26, that expressly advocates, as defined in 11 CFR 100.22, the election or defeat of a clearly identified candidate for Federal office.
(i) References to House and Senate candidates. The public communication refers to a clearly identified House or Senate candidate and is publicly distributed or otherwise publicly disseminated in the clearly identified candidate's jurisdiction 90 days or fewer before the clearly identified candidate's general, special, or runoff election, or primary or preference election, or nominating convention or caucus.
(ii) References to Presidential and Vice Presidential candidates. The public communication refers to a clearly identified Presidential or Vice Presidential candidate and is publicly distributed or otherwise publicly disseminated in a jurisdiction during the period of time beginning 120 days before the clearly identified candidate's primary or preference election in that jurisdiction, or nominating convention or caucus in that jurisdiction, up to and including the day of the general election.
(iii) References to political parties. The public communication refers to a political party, does not refer to a clearly identified Federal candidate, and is publicly distributed or otherwise publicly disseminated in a jurisdiction in which one or more candidates of that political party will appear on the ballot.
(C) When the public communication is coordinated with a political party committee and it is publicly distributed or otherwise publicly disseminated during the two-year election cycle ending on the date of a Presidential general election, the time period in paragraph (c)(4)(ii) of this section applies.
(iv) References to both political parties and clearly identified Federal candidates. The public communication refers to a political party and a clearly identified Federal candidate, and is publicly distributed or otherwise publicly disseminated in a jurisdiction in which one or more candidates of that political party will appear on the ballot.
(C) When the public communication is coordinated with a political party committee and it is publicly distributed or otherwise publicly disseminated outside the clearly identified candidate's jurisdiction, the time period in paragraph (c)(4)(iii)(B) or (C) of this section that would apply to a communication containing only a reference to a political party applies.
(5) A public communication, as defined in 11 CFR 100.26, that is the functional equivalent of express advocacy. For purposes of this section, a communication is the functional equivalent of express advocacy if it is susceptible of no reasonable interpretation other than as an appeal to vote for or against a clearly identified Federal candidate.
(ii) The communication is created, produced, or distributed at the suggestion of a person paying for the communication and the candidate, authorized committee, or political party committee assents to the suggestion.
(3) Substantial discussion. This paragraph, (d)(3), is not satisfied if the information material to the creation, production, or distribution of the communication was obtained from a publicly available source. The communication is created, produced, or distributed after one or more substantial discussions about the communication between the person paying for the communication, or the employees or agents of the person paying for the communication, and the candidate who is clearly identified in the communication, or the candidate's authorized committee, the candidate's opponent, the opponent's authorized committee, or a political party committee. A discussion is substantial within the meaning of this paragraph if information about the candidate's or political party committee's campaign plans, projects, activities, or needs is conveyed to a person paying for the communication, and that information is material to the creation, production, or distribution of the communication.
(B) Information used previously by the commercial vendor in providing services to the candidate who is clearly identified in the communication, or the candidate's authorized committee, the candidate's opponent, the opponent's authorized committee, or a political party committee, and that information is material to the creation, production, or distribution of the communication.
(B) Information used by the former employee or independent contractor in providing services to the candidate who is clearly identified in the communication, or the candidate's authorized committee, the candidate's opponent, the opponent's authorized committee, or a political party committee, and that information is material to the creation, production, or distribution of the communication.
(6) Dissemination, distribution, or republication of campaign material. A communication that satisfies the content standard of paragraph (c)(2) of this section or 11 CFR 109.37(a)(2)(i) shall only satisfy the conduct standards of paragraphs (d)(1) through (d)(3) of this section on the basis of conduct by the candidate, the candidate's authorized committee, or the agents of any of the foregoing, that occurs after the original preparation of the campaign materials that are disseminated, distributed, or republished. The conduct standards of paragraphs (d)(4) and (d)(5) of this section may also apply to such communications as provided in those paragraphs.
(e) Agreement or formal collaboration. Agreement or formal collaboration between the person paying for the communication and the candidate clearly identified in the communication, or the candidate's authorized committee, the candidate's opponent, the opponent's authorized committee, or a political party committee, is not required for a communication to be a coordinated communication. Agreement means a mutual understanding or meeting of the minds on all or any part of the material aspects of the communication or its dissemination. Formal collaboration means planned, or systematically organized, work on the communication.
(f) Safe harbor for responses to inquiries about legislative or policy issues. A candidate's or a political party committee's response to an inquiry about that candidate's or political party committee's positions on legislative or policy issues, but not including a discussion of campaign plans, projects, activities, or needs, does not satisfy any of the conduct standards in paragraph (d) of this section.
(g) Safe harbor for endorsements and solicitations by Federal candidates. (1) A public communication in which a candidate for Federal office endorses another candidate for Federal or non-Federal office is not a coordinated communication with respect to the endorsing Federal candidate unless the public communication promotes, supports, attacks, or opposes the endorsing candidate or another candidate who seeks election to the same office as the endorsing candidate.
(2) A public communication in which a candidate for Federal office solicits funds for another candidate for Federal or non-Federal office, a political committee, or organizations as permitted by 11 CFR 300.65, is not a coordinated communication with respect to the soliciting Federal candidate unless the public communication promotes, supports, attacks, or opposes the soliciting candidate or another candidate who seeks election to the same office as the soliciting candidate.
(h) Safe harbor for establishment and use of a firewall. The conduct standards in paragraph (d) of this section are not met if the commercial vendor, former employee, or political committee has established and implemented a firewall that meets the requirements of paragraphs (h)(1) and (h)(2) of this section. This safe harbor provision does not apply if specific information indicates that, despite the firewall, information about the candidate's or political party committee's campaign plans, projects, activities, or needs that is material to the creation, production, or distribution of the communication was used or conveyed to the person paying for the communication.
(2) The firewall must be described in a written policy that is distributed to all relevant employees, consultants, and clients affected by the policy.
(2) The public communication does not promote, support, attack, or oppose that candidate or another candidate who seeks the same office as that candidate.
Any person who is otherwise prohibited from making contributions or expenditures under any part of the Act or Commission regulations is prohibited from paying for a coordinated communication.
(a) General rule. The financing of the dissemination, distribution, or republication, in whole or in part, of any broadcast or any written, graphic, or other form of campaign materials prepared by the candidate, the candidate's authorized committee, or an agent of either of the foregoing shall be considered a contribution for the purposes of contribution limitations and reporting responsibilities of the person making the expenditure. The candidate who prepared the campaign material does not receive or accept an in-kind contribution, and is not required to report an expenditure, unless the dissemination, distribution, or republication of campaign materials is a coordinated communication under 11 CFR 109.21 or a party coordinated communication under 11 CFR 109.37.
(5) A national political party committee or a State or subordinate political party committee pays for such dissemination, distribution, or republication of campaign materials using coordinated party expenditure authority under 11 CFR 109.32.
Political party committees may make independent expenditures subject to the provisions in this subpart. See 11 CFR 109.36. Political party committees may also make coordinated party expenditures in connection with the general election campaign of a candidate, subject to the limits and other provisions in this subpart. See 11 CFR 109.32 through 11 CFR 109.34.
(a) Coordinated party expenditures in Presidential elections. (1) The national committee of a political party may make coordinated party expenditures in connection with the general election campaign of any candidate for President of the United States affiliated with the party.
(2) The coordinated party expenditures shall not exceed an amount equal to two cents multiplied by the voting age population of the United States. See 11 CFR 110.18. This limitation shall be increased in accordance with 11 CFR 110.17.
(ii) Any contribution by the national committee to the candidate permissible under 11 CFR 110.1 or 110.2.
(4) Any coordinated party expenditures made by the national committee of a political party pursuant to paragraph (a) of this section, or made by any other party committee under authority assigned by a national committee of a political party under 11 CFR 109.33, on behalf of that party's Presidential candidate shall not count against the candidate's expenditure limitations under 11 CFR 110.8.
(b) Coordinated party expenditures in other Federal elections. (1) The national committee of a political party, and a State committee of a political party, including any subordinate committee of a State committee, may each make coordinated party expenditures in connection with the general election campaign of a candidate for Federal office in that State who is affiliated with the party.
(ii) In the case of a candidate for election to the office of Representative, Delegate, or Resident Commissioner in any other State, $10,000.
(3) The limitations in paragraph (b)(2) of this section shall be increased in accordance with 11 CFR 110.17.
(4) Any coordinated party expenditure under paragraph (b) of this section shall be in addition to any contribution by a political party committee to the candidate permissible under 11 CFR 110.1 or 110.2.
(a) Assignment. The national committee of a political party and a State committee of a political party, including any subordinate committee of a State committee, may assign its authority to make coordinated party expenditures authorized by 11 CFR 109.32 to another political party committee. Such an assignment must be made in writing, must state the amount of the authority assigned, and must be received by the assignee committee before any coordinated party expenditure is made pursuant to the assignment.
(2) Any other method, submitted in advance and approved by the Commission, that permits control over coordinated party expenditures.
(c) Recordkeeping. (1) A political party committee that assigns its authority to make coordinated party expenditures under this section must maintain the written assignment for at least three years in accordance with 11 CFR 104.14.
(2) A political party committee that is assigned authority to make coordinated party expenditures under this section must maintain the written assignment for at least three years in accordance with 11 CFR 104.14.
A political party committee authorized to make coordinated party expenditures may make such expenditures in connection with the general election campaign before or after its candidate has been nominated. All pre-nomination coordinated party expenditures shall be subject to the coordinated party expenditure limitations of this subpart, whether or not the candidate on whose behalf they are made receives the party's nomination.
The national committee of a political party must not make independent expenditures in connection with the general election campaign of a candidate for President of the United States if the national committee of that political party is designated as the authorized committee of its Presidential candidate pursuant to 11 CFR 9002.1(c).
(a) Definition. A political party communication is coordinated with a candidate, a candidate's authorized committee, or agent of any of the foregoing, when the communication satisfies the conditions set forth in paragraphs (a)(1), (a)(2), and (a)(3) of this section.
(1) The communication is paid for by a political party committee or its agent.
(2) The communication satisfies at least one of the content standards described in paragraphs (a)(2)(i) through (a)(2)(iii) of this section.
(i) A public communication that disseminates, distributes, or republishes, in whole or in part, campaign materials prepared by a candidate, the candidate's authorized committee, or an agent of any of the foregoing, unless the dissemination, distribution, or republication is excepted under 11 CFR 109.23(b). For a communication that satisfies this content standard, see 11 CFR 109.21(d)(6).
(ii) A public communication that expressly advocates the election or defeat of a clearly identified candidate for Federal office.
(A) References to House and Senate candidates. The public communication refers to a clearly identified House or Senate candidate and is publicly distributed or otherwise publicly disseminated in the clearly identified candidate's jurisdiction 90 days or fewer before the clearly identified candidate's general, special, or runoff election, or primary or preference election, or nominating convention or caucus.
(B) References to Presidential and Vice Presidential candidates. The public communication refers to a clearly identified Presidential or Vice Presidential candidate and is publicly distributed or otherwise publicly disseminated in a jurisdiction during the period of time beginning 120 days before the clearly identified candidate's primary or preference election in that jurisdiction, or nominating convention or caucus in that jurisdiction, up to and including the day of the general election.
(3) The communication satisfies at least one of the conduct standards in 11 CFR 109.21(d)(1) through (d)(6), subject to the provisions of 11 CFR 109.21(e), (g), and (h). A candidate's response to an inquiry about that candidate's positions on legislative or policy issues, but not including a discussion of campaign plans, projects, activities, or needs, does not satisfy any of the conduct standards in 11 CFR 109.21(d)(1) through (d)(6). Notwithstanding paragraph (b)(1) of this section, the candidate with whom a party coordinated communication is coordinated does not receive or accept an in-kind contribution, and is not required to report an expenditure that results from conduct described in 11 CFR 109.21(d)(4) or (d)(5), unless the candidate, authorized committee, or an agent of any of the foregoing, engages in conduct described in 11 CFR 109.21(d)(1) through (d)(3).
(2) A coordinated party expenditure pursuant to coordinated party expenditure authority under 11 CFR 109.32 in connection with the general election campaign of the candidate with whom it was coordinated, which must be reported under 11 CFR part 104.


text:
Computer vision for wildfire research: an evolving image dataset for processing and analysis"
Chiaramonti N., Romagnoli E., Santoni P.A., and Barboni T.
Tihay-Felicelli V., Santoni P.A., Barboni T., and Leonelli L.
Automatic fire pixel detection using image processing: A comparative analysis of Rule-based and Machine Learning-based methods.
Toulouse T., Rossi L., Celik T., and Akhloufi M.
Signal Image and Video Processing, 2015, 1863–1703.doi: 10.1007/s11760-015-0789-x.
Benchmarking of wildland fire color segmentation algorithms.
Toulouse T., Rossi L., Celik T., Akhloufi M. and Maldague X.
Evaluation of a wireless sensor network with low cost and low energy consumption for fire detection and monitoring.
Silvani X., Morandini F., Innocenti E., and Peres S.
Fire Technology, 2015, 51(4): 971–993.doi: 10.1007/s10694-014-0439-9.
Scale effects on the heat release rate, smoke production rate and species yields for a vegetation bed.
Santoni P.A., Chiaramonti N., Romagnoli E., and Barboni T.
Journal of Fire Sciences, 2015, 3(4):290–319.doi: 10.1177/0734904115591176.
Solid phase extraction of organic compounds: a critical review - Part I.
Andrade-Eiroa A., Canle L. M., Leroy-Cancellieri V. and Victor V.
Solid extraction of organic compounds: a critical review - Part II.
Andrade-Eiroa A., Canle L.M., Leroy-Cancellieri V. and Victor V.
Santoni P.A., Bartoli P., Simeoni A. and Torero J.L.
Tihay V., Morandini F., Santoni P.A., Perez-Ramirez Y. and Barboni T.
Leroy-Cancellieri V., Cancellieri D., Leoni E., Simeoni A., Filkov A.I.
Journal of thermal analysis and calorimetry, 2014, 117:1497-1508.
Evaluation of forest fire models on a large observation database.
Filippi J.B., Mallet V. and Nader B.
Leroy-Cancellieri V., Augustin P., Filippi J.B., Mari C., Fourmentin M., Bosseur F., Morandini F. and Delbarre H.
Natural Hazards and Earth System Sciences, 2014, 14: 509-523.
Chatelon F.J., Sauvagnargues S., Dusserre G. and Balbi J.H.
Balbi J.H., Chatelon F.J., Rossi J.L., Simeoni A., Viega D.X. and Rossa C.
Durand J., Tulet P., Leriche M., Bielli S., Villeneuve N., Di Muro A., Fillipi J.B.
Perez-Ramirez Y., Santoni P.A. and Darabiha N.
Romagnoli E., Barboni T., Santoni P.A. and Chiaramonti N.
Morandini F., Silvani X., Honoré D., Boutin G., Susset A. and Vernet R.
Balbi J.H., Viegas D.X., Rossa C., Rossi J.L., Chatelon F.J., Cancellieri D., Simeoni A. and Marcelli T.
Rossi L., Molinier T., Akhloufi M., Pieri A., Tison Y.
Filippi J.B., Pialat X., Clements C.
Does Prescribed Burning Affect Leaf Secondary Metabolites in Pine Stands?
Lavoir A. V., Ormeno E., Pasqualini V., Ferrat L., Greff S., Lecareux C., Vila B., Mevy J-P., Fernandez C.
Long-Term Forest Dynamics and Land-Use Abandonment in the Mediterranean Mountains, Corsica, France.
Sanz A., Fernandez C., Mouillot F., Ferrat L., Istria D., Pasqualini V.
Ecology and Society, 2013, 18 (2): 38.
Morandini F., Perez-Ramirez Y., Tihay V., Santoni P.A., Barboni T.
Filippi J.B., Mallet V., Nader B.
Filkov A., Kuzin A. Y., Sharypov O., Cancellieri D., Leroy-Cancellieri V., Leoni E., Simeoni A., Rein G.
Silvani X., Morandini F., Dupuy J.-L.
Rossi L., Molinier T., Akhloufi M., Tison Y., Pieri A.
Morandini F., Silvani X., Susset A.
Cancellieri D., Leroy-Cancellieri V., Leoni E., Kuzin A. Y., Filkov A., Simeoni A., Rein G.
Barboni T., Morandini F., Rossi L., Molinier T., Santoni P.-A.
Strada S., Mari C., Filippi J. B., Bosseur F.
A GIS-based multicriteria evaluation for aiding risk management Pinus pinaster Ait. forests: A case study in Corsican island, Western Mediterranean region.
Environmental Management, 2011 48(1): 38-56.
Rossi J.L., Simeoni A., Moretti B., Leroy V.
Bartoli P., Simeoni A., Biteau H., Torero J.L. and Santoni P.A.
Barboni T., Cannac M., Leoni E., Chiaramonti N.
Identification and Changes of Flavonoids in Pinus laricio Needles after Prescribed Burnings.
Cannac M., Ferrat L., Morandini F., Barboni T., Pasqualini V.
Rossi L., Molinier T., Pieri A., Akhloufi M., Tison Y., Bosseur F.
Rossi L. T., Akhloufi M., Tison Y. A.
Santoni P.A., Filippi J. B., Balbi J.-H., Bosseur F.

matches: V. V. V. V. V. V. V. V.


Fathers Rights in Virginia - Livesay & Myers, P.C.
1. Do understand how Virginia courts decide custody and visitation cases. In determining custody and visitation, Virginia courts are directed by law to give primary consideration to the child’s best interests, and the specific factors a court should consider in making this determination are set forth in Virginia Code § 20-124.3. Moreover, Virginia Code § 20-124.2 sets out an explicit statutory preference in favor of frequent, continuing contacts between parents and children, and, when appropriate, shared responsibility for child-rearing. After making its decision, the court has an obligation to explain the decision to the parents, and the court must expressly give its findings of fact regarding the relevant factors listed in Virginia Code § 20-124.3. In short, although the court is given vast discretion to decide what custody or visitation arrangement is in the best interests of your child, the court’s discretion is restrained by its obligation to consider the statutory factors and the specific facts and evidence presented in your case. No undue preference may be given to either party, and the decision must be supported by the evidence given at trial.
2. Do understand that there is no presumption or preference in favor of mothers under Virginia law in custody and visitation cases. Virginia Code § 20-124.2 explicitly states that, in custody and visitation cases, “[a]s between parents, there shall be no presumption or inference of law in favor of either.” Moreover, none of the factors set forth in § 20-124.3 inherently favor mothers or fathers. Several of the factors listed in § 20-124.3 do tend to favor the “primary caregiver,” but that can be overcome by some of the other factors. Although a court can consider the age and needs of a child, and the role a parent has played in the care and upbringing of a child, the Virginia Court of Appeals has held that it is reversible error for a trial court to favor mothers of children of “tender years.” Visikides v. Derr, 3 Va App 69 (1986).
in nuclear families one parent generally assumes the role of primary provider for the family, and the other parent fulfills the role of primary caretaker of the children. In such circumstances, the non-providing parent would always be favored in custody disputes….
Crute v. Crute, 12 Va. Cir. 190, 192 (Va. Cir. Ct. 1988) (emphasis added).
3. Do understand the legal terms that are used in custody and visitation cases. It is perhaps most vital to understand the meaning of the terms legal custody, joint legal custody, sole custody, physical custody, primary physical custody, and visitation. Legal custody refers to the responsibility for the care and control of the child and the authority to make decisions concerning the child. When both parents have legal custody of a child, they are each said to have joint legal custody. Where only one has legal custody, that parent has sole custody. Physical custody involves the day-to-day care and supervision of a child and establishes where a child will live. A parent with primary physical custody will have the right to have the child with him or her, except for those periods during which the other parent has visitation. During visitation, the parent who lacks primary physical custody generally has the right to care and supervise the child without interference from the other parent.
4. Don’t sign an agreement you don’t like! You should expect a court to hold you to your word when you sign an agreement, even if you come to regret the decision later. If you sign an unfavorable agreement, understand that it can be very difficult or impossible for an attorney to relieve you from the terms of the same in the future. Once custody and visitation have been determined, a court can revisit these issues only when there has been a material change of circumstances such that a modification of custody or visitation would be in the child’s best interests.
5. If you are in the military, do recognize that you have special rights in the event you are deployed. These include the right to delegate by court order your visitation rights and the right to an expedited hearing in order to obtain the same. See Military Deployment and Child Custody in Virginia.
6. If you are unmarried and believe you may have fathered a child, do register with the Putative Father Registry. Failing to register will generally waive your right to be notified of adoption or termination proceedings unless your paternity is established or presumed under Virginia law or you were fraudulently misled by the mother under certain circumstances. For further reference, please visit the Virginia Birth Father Registry page on the website of the Virginia Department of Social Services.
Livesay & Myers, P.C. has a team of experienced attorneys with years of experience in representing fathers in custody and divorce cases across Northern Virginia. Be sure to read our client reviews, then examine the profiles of each of our attorneys to find the one who is the best fit for you.
Summer Consultation Special. For a limited time, schedule an initial 1-hour consultation with one of our family law attorneys for just $150 ($150 for our Fairfax office). Contact us today to take advantage of this discounted rate.


This case involves violations of the MMPA by taking, in the form of harassment by feeding or attempting to feed wild dolphins. The respondents, a captain of a vessel used in a dolphin-feeding encounter, and the sole shareholder of a boat renal company, were both found guilty and assessed civil penalties in the amount of $4500. Though the shareholder was not on the vessel when it committed the feeding violations, he was found guilty of violating the MMPA, by providing a platform from which feeding is conducted or supported.
This is a civil penalty proceeding initiated pursuant to the legal authority contained under the Marine Mammal Protection Act of 1972 ("MMPA"), as amended, 16 U.S.C. § 1372(a)(2) and the regulations promulgated thereunder in 50 CFR Part 216.11. It was conducted in accordance with the procedural requirements found in 15 C.F.R. Part 904 et seq.
On July 1, 1998, the National Oceanic and Atmospheric Administration ("the Agency" or "NOAA") charged Thomas Rainelli ("Rainelli"), Chanti Hance ("Hance"), Hathaway's Boat Rentals, Inc. ("Hathaway's"), and Tropical Parasail, Inc. ("Tropical") with a Notice of Violation and Assessment of Administrative Penalty ("NOVA"). The NOVA alleges that these entities and individuals committed five violations of the MMPA and 50 C.F.R. § 216.11 on or about June 17, 1998, by unlawfully taking a marine mammal in United States waters by harassing or attempting to harass by feeding or attempting to feed a marine mammal of the order Cetacea (a porpoise).
The Agency entered into settlement agreements with Hance on April 7, 1999 for $ 500.00 and Alisa Forrest, president of Tropical on July 11, 1999. See, Agency Exhibits 9, 10. Consequently, Rainelli and Hathaway's are the sole remaining named Respondents.
NOAA initially proposed a $ 5,000 civil penalty against the Respondents jointly and severally, $ 1,000 for each violation. The proposed penalty was subsequently reduced to $ 4,500 ($ 900 for each violation) after the Agency's settlement with Hance. A hearing before the undersigned Administrative Law Judge commenced at 10:30 a.m. on July 15, 1999 in Pensacola, Florida. The Respondents appeared pro se. A record of the hearing was made by a qualified reporter. A list of the witnesses who testified at the hearing and the exhibits admitted into evidence are set forth in Appendix A and B.
Based on the evidence presented at the hearing and stipulations made by the parties, the undersigned issued an oral ruling at the conclusion of the hearingthat NOAA had proved the allegations contained in the NOVA by a preponderance of the evidence. The undersigned Administrative Law Judge assessed a $ 4,500 civil penalty against the Respondents and ordered the Respondents to post a federal "No Dolphin Feeding" sign and poster on the grounds and counter of Hathaway's Boat Rentals, Inc.
The bases for this decision are set forth in the following sections.
(B) for any person to use any port, harbor, or other place under the jurisdiction of the United States to take or import marine mammals or marine mammal products . . .
(c) Any person subject to the jurisdiction of the United States to take any marine mammal during the moratorium.
A marine mammal is defined, under 50 C.F.R. § 216.3, as "those specimens of the following orders, which are morphologically adapted to the marine environment, whether alive or dead, and any part thereof, including but not limited to, any raw, dressed or dyed fur or skin: Cetacea (whales and porpoises), Pinnipedia, other than walrus (seals and sea lions).
Taking, under 50 C.F.R. § 216.3, means "to harass, hunt, capture, collect, or kill, or attempt to harass, hunt, capture, collect, or kill any marine mammal. This includes, without limitation . . . [to] feeding or attempting to feed a marine mammal in the wild."
Finally, under 50 C.F.R. § 216.3, feeding includes "providing other platforms from which feeding is conducted or supported . . ."
jurisdiction of the United States.
2. The hearing in this matter was held on July 15, 1999 at the United States District Court in Panama City, Florida.
3. At the commencement of the hearing, the Respondents were fully advised of the standard of proof in these proceedings, their legal rights, the possible outcomes of the proceeding, and the collection procedures used by the government in the event the Respondents lose.
4. The Respondents stated on the record that they understood the charges filed against them and that appearing without legal counsel could adversely affect the outcome of the proceeding. The Respondents, however, indicated that they desired to proceed without legal counsel.
5. Porpoise and dolphin are used interchangeably. See e.g., 50 C.F.R. 216.24; Transcript 133-134, 136.
6. The parties stipulated that the dolphins pictured in the Agency's Exhibit 7 are Atlantic bottlenose dolphins covered under 50 C.F.R. Part 216 and regulated under the feeding ban. Transcript 137.
7. The Agency has continually attempted to educate the public on the dangers of feeding dolphins. See e.g., Agency Exhibits 12 through 26. Transcript 141-151. Feeding dolphins is harmful to their health and welfare. It causes them to lose their natural wariness, alter their natural behavior, and become emboldened to people. For example, mother dolphins have been observed teaching their young to beg instead of forage. Transcript 137-140.
8. Both Respondents stipulated at the hearing that they knew that it was both improper and illegal to feed dolphins. Transcript 28. However, at no point did Malausky tell Mr. Hill Love, a special agent for the Social Security Service in Texas on vacation in Panama City, that feeding dolphins was absolutely prohibited. Transcript 55.
10. Maluasky, although not physically present during the dolphin feeding incident, is liable for the allegations contained in the NOVA pursuant to 50 C.F.R. § 216.3 which notes that feeding includes "providing other platforms from which feeding is conducted or supported . . .
11. Here, even though Hathaway's only leased the boat slip to Tropical, the owner of the boat used in the dolphin feeding, Transcript 32, Hathaway's held itself out as the rentor of the boat in question, as evidenced by Hathaway's Rental Agreement and business cards. Agency Exhibit 2, 29; Transcript 55.
12. On June 15, 1998, Love approached Hathaway's for information on parasailing. During the course of his discussion with an employee at Hathaway's, he was informed that Hathaway's also took their customers out to feed the dolphins. Attracted to the idea that he could feed dolphins, Love made a reservation to go parasailing on June 17, 1998. Agency Exhibit 1; Transcript 47.
13. On June 17, 1998, Love returned with his sons to Hathaway's and filled out Hathaway's Boat Rental Agreement with the assistance of a Hathaway employee, later identified as Missy Boyett. Transcript 52; Agency Exhibit 2.
14. At that time, Rainelli introduced himself to Love and began discussing dolphin feeding. Rainelli warned Love that they had to be "very careful of marine cops . . ." and that "it was illegal to feed dolphins above the water line, but . . . [not] below the water line." Transcript 53. Ms. Chanti Hance,Rainelli's assistant during the trip, and Mr. Malausky were present during the conversation. Transcript 53. Malausky nodded his head in agreement. Transcript 53.
16. Rainelli and Hance then took Love and his sons to an area in the bay region identified by Rainelli and Hance as "a favorite place where they took customers to feed dolphins." Transcript 60. Ms. Hance took a cigar minnow and splashed it in the water and a dolphin "with many different colored striations" appeared and was fed by Hance and Rainelli at least five times. Transcript 61. After the feeding, Love and his sons swam with the dolphin. Transcript 60-61. Hance and Rainelli then tried unsuccessfully to attract other dolphins.
17. Rainelli and Hance subsequently took Love and his sons roughly three hundred yards out into the Gulf of Mexico where they splashed the cigar minnow in the water to attract more dolphins. Transcript 61. The striated dolphin followed them to the Gulf of Mexico and four other dolphins appeared. Transcript 62.
18. Rainelli, Hance, Love and his oldest son fed and played with the five dolphins. Agency Exhibit 7; Transcript 62-64. Their activity attracted a crowd of onlookers. Transcript 62-63.
19. Plain-clothes officer Florida Marine Patrol Officer A. McMillion, anchored in the Gulf of Mexico east of the jetties in an unmarked vessel approximately fifty (50) yards away from Rainelli's vessel, observed Hance and Rainelli lean over the side of the vessel to feed dolphins with cigar minnows. Transcript 87-89; Agency Exhibit 3; 32. Officer McMillion then swam from his boat to Respondent's vessel and observed the feeding up close. Transcript 90-91.
20. After observing the dolphin feeding, Officer McMillion swam back to his boat and radioed Officer Bryant with descriptions of the activity he observed, the individuals involved, and the vessel and its location. Transcript 101. He also noted that the cigar minnows were kept by the port stern of the boat. Transcript 104.
21. Officer Bryant is a Florida Marine Patrol Officer, deputized with NMFS, who works the detail in Panama City Pass and on the marked unit. Transcript 100. He approached Rainelli's vessel and asked Rainelli if he had any bait on board and asked permission to board and search for bait or fish. Transcript 103-4. After being given permission by Rainelli to board, he proceeded to the port stern of boat where he found a container with several cigar minnows. Transcript 104. He explained to Rainelli that he and Hance had been observed feeding dolphins. The Respondent denied the allegations. Transcript 103.
22. He subsequently issued Hance and Rainelli citations for feeding dolphins. Transcript 106. Love, at that point, indicated that he did not know it was illegal to feed dolphins. Transcript 107.
23. The case was then referred to Special Agent Allan Coker who contacted Rainelli. He visited Rainelli at Hathaway's Boat Rentals' wave runner stand. Rainelli admitted that he had gone out and fed the dolphins. Transcript 122-123. He also stated that he has them trained. Agency Exhibit 6. According to Rainelli, whenever someone wants to go parasailing, he makes him or her purchase a bag of cigar minnows for dolphin feeding. Agency Exhibit 6.
24. Coker also testified that he saw pictures of people feeding dolphins on the walls of Hathaway's. Transcript 125-26.
25. Based on this record and evidence adduced at trial, the Agency has proved the allegations contained in the NOVA, i.e. the Respondents committed five violations of the MMPA and 50 C.F.R. § 216.11 in the waters under the jurisdiction of the United States by harassing or attempting to harass by feeding or attempting to feed five marine mammals in the order of Cetacea (a porpoise).
The burden of proof is on the Agency to prove the allegations in the NOVA by a preponderance of the evidence. See, Dept. of Labor v. Greenwich Colleries, 512 U.S. 267 (1994); Steadman v. SEC, 450 U.S. 91, 100-103 (1981). The preponderance of the evidence threshold is met if the Agency demonstrates that the existence of a fact is more probable than its non-existence. See, Concrete Pipe & Products v. Construction Laborers Pension Trust, 508 U.S. 602, 622 (1993). In this case, the Agency has proved the allegations contained in the NOVA by a preponderance of the evidence as detailed in the Findings of Fact and Conclusions of Law.
The facts in this matter are clear and essentially uncontested. Respondent Rainelli, the captain of the vessel used in the dolphin-feeding encounter, admitted to the factual allegations contained in the NOVA. Transcript 31; 43. Moreover, he was photographed and later observed by Officer McMillion feeding cigar minnows to dolphins. Transcript 104. Additionally, he later admitted to Agent Coker that he had gone out and fed the dolphins and even has some of these dolphins trained. Transcript 122-123; Agency Exhibit 6. Thus, it is clear, by his own admission and by the evidence contained in the record, that he committed the violations set forth in the NOVA.
Mr. Malausky, sole shareholder of Hathaway's Boat Rentals, Inc., is likewise liable for the allegations contained in the NOVA. He initially contested his involvement in the dolphin feeding because he was not physically present when the dolphins were fed. However, because Hathaway's (and Malausky) held itself out as the owner n1 of the vessel used to feed dolphins, Hathaway's (and Malausky) provided a platform for dolphin feeding in violation of the MMPA and 50 C.F.R. § 216.3, whose definition of feeding includes "providing other platforms from which feeding is conducted or supported . . .". Transcript 41; Agency Exhibit 2, 29; Transcript 55.
n1 In this case, Hathaway's Boat Rental Agreement and business cards failed to disclaim ownership of the vessel used in the dolphin feeding. Transcript 52, 55; Agency Exhibit 2.
Since the Agency has established the allegations in the NOVA by a preponderance of the evidence, the burden of producing evidence then shifts to the Respondents to rebut or discredit the Agency's evidence. Steadman, 450 U.S. at 101. In this case, Respondents have not proffered a cognizable defense to their actions. Rather they contend that the Agency has engaged in selective prosecution, a contention (as explained by the undersigned at the hearing) that does not rebut the Agency's proof. Consequently, the Agency has met its burden.
Having determined that the Respondents committed the allegations contained in the NOVA, the only issue to be determined is the propriety of the Agency's proposed sanction.
The Agency proposes the imposition of a $ 4,500 civil penalty in this case. The Agency argues that the penalty is appropriate in light of the gravity of the violations and falls within the MMPA penalty schedule. Indeed, the Agency contends that the penalties proposed herein are on the low end of the scale, i.e. $ 900 per count.
"While it is difficult to establish the civil penalty sufficient to deter proscribed conduct, the NOVA amount is assumed to be an educated estimate by NOAA." In the matter of Town Dock Fish, Inc., 6 O.R.W. 580 (NOAA app. 1991). Additionally, the penalty assessed in a NOVA is presumed appropriate and may only be codified by the Administrative Law Judge for good cause. In the Matter of William J. Verna, 4 O.R.W. 64 (NOAA App. 1985); In the Matter of Meredith Fish Co., 4 O.R.W. 914 (NOAA App. 1987).
Here, Respondents knew that it was both improper and illegal to feed dolphins but nevertheless ignored the law. Transcript 28. Respondents have proffered no good reason for mitigating the penalty. Their contention that the Agency engaged in selective prosecution is unpersuasive and ultimately without merit. Since their knowing and willful violations strike at the very heart and purpose of the MMPA, the proposed civil penalty of $ 4,500 is proper.
Since the Agency has proved its case by a preponderance of the evidence and because the Respondents have failed to provide sufficient evidence to rebut the Agency's evidence, and given the lack of mitigating factors in this case, I find that Respondents violated the charges set forth in the NOVA. In light of the foregoing factors and the record considered as a whole, the Agency's proposed civil penalty is appropriate.
ACCORDINGLY, IT IS ORDERED that the Respondents, having been found by the preponderant evidence to have committed the five violations set forth in the NOVA, shall be assessed a civil penalty in the amount of $ 900 per violation, for a total of $ 4,500. Said liability shall be joint and several.
IT IS FURTHER ORDERED that Respondents post a "No Dolphin Feeding" sign and poster on the counter and grounds of Hathaway's Boat Rentals, Inc.
IT IS FUTHER ORDERED that a copy of this Initial Decision shall be served on Respondents and the National Oceanic and Atmospheric Administration in accordance with 15 C.F.R. 904.271(c).
IT IS HEREBY FURTHER ORDERED that failure to pay the civil penalty to the Treasurer of the United States within thirty (30) days from the date upon which this decision becomes final Agency Action will result in the total penalty becoming due and payable, and interest being charged at the rate specified by the U.S. Treasury regulations and an assessment of charges to cover the cost of processing and handling of the delinquent penalty. Further, in the event the penalty or any portion thereof, becomes more than ninety (90) days past due, the Respondent may also be assessed an additional penalty charge not to exceed six percent (6%) annum.
Respondent is hereby notified than any petition for administrative review of this decision must be filed within thirty (30) days of this date with the Administrator of the National Oceanic and Atmospheric Administration as provided in 15 C.F.R. § 904.273. Copies of the petition should also be sent to the ALJ Docketing Center, NOAA Counsel and to the presiding Judge.
1. Mr. Hill Love's Statement.
2. Hathaway's Boat Rental Agreement signed by Mr. Love and his two children.
3. Offense Incident Report by Florida Marine Officer A. McMilion.
4. Offense Incident Report by Officer R. P. Bryant.
5. Citation singed by Officer R. P. Bryant.
6. Offense Investigation Report by NMFS Special Agent Allan Coker.
8. Negative File Index signed by NFMS Allan Coker.
9. Settlement Agreement between NOAA and Chanti Hance.
10. Settlement Agreement between NOAA and Tropical Parasail.
12. NOAA Brochure entitled Protecting Marine Mammals.
Love Dolphins, Don't Feed Them, Federal Agency Warns.
and Swimming with Dolphins is Illegal and Harmful, Federal Agency Warns.
16. Brochure entitled Protecting Dolphins, Admire Them from a Distance.
and Harassing Dolphins is Harmful and Illegal.
to Some, Sticks in the Craw of Others, dated May 25, 1997.
21. MMPA Bulletin dated First Quarter 1998.
Feeding and Harassment Still Illegal.
Enforcing Laws about Human Interaction with Dolphins dated May 24, 1998.
31. Marine Mammal Protection Act and regulations.
32. Map of St. Andrews Bay Area.


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PREET BHARARA, the United States Attorney for the Southern District of New York, JOSEPH M. DEMAREST, JR., the Assistant Director-in-Charge of the New York Field Division of the Federal Bureau of Investigation ("FBI"), RICHARD H. NEIMAN, the Superintendent of Banks for New York State, RENE FEBLES, the Special Agent-in-Charge of the New York Field Office of the Department of Housing and Urban Development, Office of Inspector General ("HUD-OIG"), BRIAN G. PARR, the Special Agent-in-Charge of the New York Field Office of the United States Secret Service ("USSS"), RONALD J. VERROCHIO, the Inspector-in-Charge of the New York Division of the United States Postal Inspection Service ("USPIS"), and JON T. RYMER, the Inspector General for the Federal Deposit Insurance Corporation, Office of Inspector General ("FDIC-OIG"), announced today the unsealing of charges against 41 defendants, in eight separate cases, for allegedly engaging in various mortgage fraud scams that collectively defrauded lenders out of more than $64 million in home mortgage loans on more than 100 properties across New York State. Among those charged are six lawyers, seven loan officers, three mortgage brokers, an accountant, and a residential property appraiser.
As part of the coordinated takedown of "Operation Bad Deeds," a joint federal, state, and local law enforcement operation targeting mortgage fraud crimes, 31 defendants were arrested or surrendered to authorities today in New York, Pennsylvania, Ohio, and North Carolina. One additional defendant is expected to surrender to authorities later today. The defendants taken into custody today are expected to be presented in federal court later this afternoon.
The mortgage fraud scams alleged in the cases announced today included, among other things, property flips, equity stripping, and appraisal and loan fraud. In one case, defendants operated a foreclosure rescue scheme, targeting individuals who were on the verge of losing their homes by tricking them into giving up the equity in the properties with false promises that their homes would be saved.
PREET BHARARA, the United States Attorney for the Southern District of New York, said: "As the U.S. economy struggles, we will continue to have a zero tolerance policy for those who defraud financial institutions and prey on homeowners on the brink of foreclosure. The type of criminal conduct charged today constricts the credit markets and makes it harder for honest people to realize the American dream of home ownership. It is especially alarming when lawyers, loan officers, and mortgage brokers treat their professional licenses as license to loot banks and profit from other people's pain. Particularly in this down economy, the message to those professionals and their alleged criminal cohorts is simple: we will find you, arrest you, and send you to jail."
JOSEPH M. DEMAREST, JR., the Assistant Director-in-Charge of the New York Field Division of the FBI, said: "Combating mortgage fraud is a priority because mortgage lending and the housing market have such an impact on the nation's economy. The defendants charged today include mortgage brokers, lenders, lawyers and buyers. The FBI is aggressively pursuing criminal conduct at every stage of the mortgage process."
RICHARD H. NEIMAN, the Superintendent of Banks for New York State, said: "A key factor leading to the mortgage crisis was the failure of the gatekeepers -- including mortgage brokers and attorneys. Unfortunately, instead of protecting our financial system, in some cases they abused their positions and joined criminal schemes to steal millions of dollars. The Banking Department's Criminal Investigation Bureau will continue to work with our law enforcement partners to pursue individuals that, through fraudulent activities, attempt to undermine the financial system."
RENE FEBLES, the Special Agent-in-Charge of the New York Field Office of the HUD-OIG, said: "One of our government's most important responsibilities is administering and enforcing our laws that bring a degree of order and protect our citizens from fraudsters and wrongdoers. This joint prosecutorial effort is our continuing demonstration of our commitment to ensuring that mortgage programs remain whole for borrowers throughout the nation."
BRIAN G. PARR, the Special Agent-in-Charge of the New York Field Office of the USSS, said: "The effects of mortgage fraud continue to adversely impact our nation's financial systems. The results of this investigation are a testament to the collaborative efforts between the Secret Service and our law enforcement partners. We will continue to aggressively pursue those that victimize our citizens and our banks."
RONALD J. VERROCHIO, the Inspector-in-Charge of the New York Division of the USPIS, said: "The arrests today are emblematic to the extent Postal Inspectors will work closely with State and Federal agencies to combat fraud which victimizes individuals, the economy, and our neighborhoods."
JON T. RYMER, the Inspector General for the FDIC said: "The FDIC-OIG is committed to its partnerships with others in the law enforcement community as we address mortgage fraud cases throughout the country. The American people need to be assured that their government is working to ensure integrity in the financial services and housing industries and that those involved in criminal activities that undermine that integrity will be held accountable."
The cases announced today are described in greater detail below. The charges against each defendant and the corresponding maximum potential penalties are contained in charts attached to this press release.
According to the Superseding Indictment, the defendants identified distressed properties that could be purchased at a low price, usually by targeting homeowners who had fallen behind on their mortgage payments and whose homes were facing foreclosure. In most instances, the defendants induced the homeowners to sell their homes to companies controlled by the defendants, including NNI, LLC, which was controlled by LAVETTE M. BILLS, and Recani Inc., which was controlled by WAYNE GREEN. These companies usually purchased the properties via "short sales," in which the lenders agreed to sell the properties for less than the balance owed on the loans and to discharge the remainder of the loans. The defendants then resold or "flipped" the properties to thirdparty straw buyers at a higher price, usually on the same day. In other instances, the defendants tricked the homeowners into deeding or selling their homes to other persons, by falsely promising the homeowners that title would be returned to them at a later date or telling the homeowners that they were merely refinancing their homes.
To accomplish this, the defendants also deceived the straw buyers and the lenders who were providing the mortgages to finance the purchases. In some instances, the straw buyers thought that they were helping the homeowner "save" his or her home from foreclosure, or they were told that they were purchasing an investment property. The straw buyers were also often told that they would not need to make mortgage payments on the properties, either because the payments would be made on their behalf, or because the payments would be covered by the rental income from the properties. The defendants convinced lenders to give the straw buyers mortgages to purchase properties the straw buyers could not otherwise afford by falsifying certain - personal and financial information about the straw buyers. For example, the defendants prepared and submitted to the lenders documents containing false statements about the straw buyers' employment, income, and assets.
As a result of their fraud, the defendants profited from their "flips" of the properties; the homeowners lost title to their homes; the straw buyers became liable for hundreds of thousands of dollars in loans they were unable to repay; and the lenders suffered losses from those loans, which eventually went into default.
BILLS was the Chief Executive Officer of MTC Real Estate, Inc., in the Bronx, and KIRK LACEY, OMAR HENRY, and PETER CHEVERE, all worked for MTC during various periods. The defendants, through MTC, identified the distressed homeowners, recruited straw buyers, and prepared fraudulent documents for submission to the lenders. GREEN and SHERESE W. GLENN processed home mortgage loan applications through various mortgage brokerage firms operating in the New York City area on behalf of MTC and others. REVLON HINDS was the purported President of Recani Inc., and signed closing documents on its behalf. JOSEPH EVANS and JERRY CALONGE recruited straw buyers to obtain home mortgage loans in transactions processed by GREEN and GLENN. MARK BARNETT was a loan officer at Golden First Mortgage Corporation, who processed fraudulent loan applications for MTC.
Eight defendants are charged in a 10-count Indictment in connection with an alleged mortgage fraud scheme involving over $23 million of fraudulently obtained loans from lenders through a mortgage brokerage called GuyAmerican Funding Corp. in Queens, New York. Three of the defendants, PEGGY PERSAUD, ORETTE KILLIKELLY, and GEORGE ESSO, were loan officers at GuyAmerican. PEGGY PERSAUD, as a manager of a branch office of GuyAmerican, received hundreds of thousands of dollars in commissions based on fraudulent loans submitted to lenders.
According to the Indictment, three of the defendants charged in the scheme, ELTON LORD, RAFICK BAKSH, and MAHAMOOD HUSSAIN, worked with GuyAmerican loan officers to recruit distressed sellers and straw buyers, flipping properties multiple times between different straw buyers, and stripping the equity from those properties as they were resold with inflated market values. For example, a property purchased by a straw buyer in December 2006 in Queens, New York, for $355,000 was resold to another straw buyer in April 2007 -- only four months later -- for $680,000, to the benefit of the co-conspirators in the scheme. In addition, the defendants often arranged for a single straw buyer to purchase multiple properties within days or weeks of each other, without disclosing the prior purchases on the subsequent loan applications.
The loans submitted to the lenders allegedly contained numerous false statements about the straw buyers who often had little or no assets and modest or no incomes. Thus, the loans contained false statements about the borrowers' employment, income, assets and exiting debt. In addition, the loan applications purportedly falsely represented that the straw buyers intended to reside in the properties, when they did not. Two lawyers, CHEDDI GOBERDHAN and RAVI PERSAUD, who acted as the closing attorneys for most of the transactions and facilitated the fraud by allegedly disbursing illicit payments to co-conspirators, were also charged.
Six defendants are charged in a one-count Complaint with conspiracy to commit bank and wire fraud in connection with their participation in a scheme to provide false information and documents to lenders for the purchasing and refinancing of properties. In total, the defendants allegedly obtained $5 million in loans on seven properties through fraud. Four of the defendants, a mother and her three daughters, BEVERLY ANDREA JOHNSON, a/k/a "Beverly Johnson," a/k/a "Beverly Samuels," a/k/a "Andrea Johnson," CARONE JOHNSON, a/k/a "Carone Johnson-Holt," a/k/a "Carone Morris," CARIANNE JOHNSON, and CARRELL JOHNSON, operated a title company called "Poui Land Services LLC" ("Poui Land"). Poui Land acted as the title agent for many of the closings charged as part of this case, generating significant fees for the defendants, including, in one instance, approximately $68,000. In some cases, the Complaint alleges that the defendants failed to record the mortgages on the properties, or to properly transfer the titles, which permitted the defendants to obtain additional mortgage loans on the properties. Furthermore, in some instances, the defendants refinanced properties in their own names, submitting applications to banks for loans that contained numerous misrepresentations regarding their own income and assets, all in an effort to strip the equity out of the properties through fraud. OLIVER ANDERSON operated a financial services company called "OGA Group," and purportedly provided fake employment verifications for some of the JOHNSONS' transactions. BRADLEY SKIERKOWSKI was a loan agent at Eastern American Mortgage who prepared fraudulent home mortgage loan applications on behalf of the JOHNSONS for some of the properties that are the subject of the Complaint.
Five defendants are charged in a four-count Indictment in connection with an alleged mortgage fraud scheme involving over $13.5 million in fraudulently obtained loans through Southwest and Pro Capital, two mortgage brokerages. Between 2005 and 2008, the defendants allegedly conspired to obtain loan proceeds from numerous lending institutions on the basis of fraudulent applications, which included false information regarding the applicants' qualifications for the loans. In particular, MARLENE BOSSOUS and DAYANARA VELASQUEZ worked at those brokerages as loan agents and allegedly prepared the fraudulent loan documents. Another defendant, FAITH ESIMAI, operated a real estate agency called "Redeemed Realty" and recruited straw purchasers, in addition to preparing false and fraudulent loan applications for submission to lenders. In connection with the scheme, the defendants also conspired to create fake W-2s, pay stubs, and Certified Public Accountant certifications, among other documents, and to submit those documents to lending institutions to trick the lenders into issuing loans to individuals who otherwise would not have qualified for them. One of the defendants, NORMAN BARABASH, was a certified public accountant who created fraudulent employment and tax documents for a fee for submission with loan applications. HAROLD JOHN, a/k/a "Reverend John," also created false documents for submission to the lenders.
According to the Indictment, DANNY SIONY, a/k/a "Rahim Siuny Kalimi," and SHIRIN KALIMI, a/k/a "Shirin Siouny," operated Joshua Funding Corp. through which they processed fraudulent loan applications for straw buyers recruited by SIONY, EMMANUEL ROY, and TARIFF DILL. In order to carry out the mortgage fraud scheme, SIONY identified and placed bids on properties that were for sale at auction, usually as the result of a foreclosure proceeding. SIONY, ROY, or DILL then recruited straw buyers for the properties, for whom the defendants obtained home mortgage loans through the use of false and fraudulent documents. KALIMI prepared and submitted the false and fraudulent documents to the lenders, including loan applications which misstated the straw buyers' employment, income, and assets, and falsified title reports and phony contracts of sale. In each instance alleged in the Indictment, the defendants represented to the lenders that a company controlled by SIONY, Australian Open, was selling the properties to the straw buyers at an inflated price when, in fact, the company did not hold title to the properties at that time and, in most instances, never held title to the properties at all. Once the defendants had obtained home mortgage loans for the straw buyers based on the inflated price, SIONY allegedly used the loan proceeds to pay off the auction price, caused the properties to be transferred to the straw buyers, and distributed the remaining funds amongst his co-conspirators.
The Indictment also charges ROY, an attorney licensed to practice law in the State of New York, who was paid to represent some of the straw buyers at closings. ROY also allegedly obtained a power of attorney for at least one of the straw buyers he recruited to the scheme and signed documents on the straw buyer's behalf.
Three defendants are charged in a three-count Indictment with participating in a mortgage fraud scheme involving more than $6 million worth of fraudulent loans. As part of the scheme, the defendants sought and obtained home mortgage loans using straw buyers for homes at values that were well in excess of the prices at which the sellers agreed to sell the properties and well in excess of the prices at which the properties were actually sold. The defendants, including DEAN RESKAKIS, ADEOLU ADENIJI, a/k/a "Larry Ade," and SHARON FRIDAY, a/k/a "Sharon Friday Cudjoe," created fake documents, including phony contracts of sale, to trick the lenders into believing that the significantly inflated sales prices were accurate. The defendants recruited straw buyers to purchase the properties at the inflated prices by, among other things, falsely telling them that they were joining an investment club that would purchase and try to either operate or resell the properties at a profit. The defendants also submitted applications for home mortgage loans on behalf of the straw buyers with numerous false statements, including lies regarding the straw purchasers' income, assets, and employment. DEAN RESKAKIS, an attorney admitted to practice in the State of New York, served as the closing attorney or acted as such in connection with the fraudulent transactions. According to the Indictment, RESKAKIS allegedly distributed proceeds to the co-conspirators, and caused forged and fraudulent documents to be submitted to the lenders to make it appear as if transactions involving the target properties occurred as represented to the lenders in the home mortgage loan applications. SHARON FRIDAY, a/k/a "Sharon Friday Cudjoe," acted as an attorney for straw buyers of several of the target properties, even though she allegedly was not licensed by the State of New York to practice law. FRIDAY also purportedly recruited and met with straw purchasers.
In one transaction, for example, according to the Indictment, the defendants used a straw buyer, identified as Straw Buyer 1, to obtain home mortgage loans for the purchase of 404 West 145th Street, New York, New York, in the aggregate amount of approximately $1,920,000, with a purported purchase price of $2,400,000. The loan application submitted to the bank, JP Morgan Chase, for Straw Buyer 1 contained numerous false statements to improve his creditworthiness. However, 404 West 145th Street was actually purchased at or around the same time Straw Buyer 1 obtained the $1,920,000 in loans from JP Morgan Chase by an entity controlled by ADENIJI, "Joam LLC," for $1,250,000. The defendants allegedly used the mortgage loans obtained by Straw Buyer 1 to pay off the initial purchase by Joam LLC, and to enrich themselves. As alleged in the Indictment, the difference between the actual purchase price of $1,250,000 and the mortgage loans of $1,920,000 was the defendants' illicit profits from the transaction. To conceal the true nature of the transaction, the Indictment alleges that Reskakis caused to be prepared a fake settlement statement reflecting the sales price of $2,400,000.
Three defendants are charged in a one-count Complaint with conspiracy to commit wire fraud, in connection with their obtaining a home mortgage loan in the approximate amount of $650,000 for the purchase of a property in Brooklyn, New York. In furtherance of the scheme, KEREN SADE MISAGHI, a/k/a "Karen Sade Misaghi," a/k/a "Karen Sade," purportedly completed a loan application on behalf of the purchaser that contained numerous false statements, including about the purchaser's income, assets, and employment. DAVID MISAGHI allegedly obtained a cashier's check from a bank account he controlled, which was then altered and used as a so-called "show check" at the closing for the transaction, falsely reflecting a large down payment by the purchaser. QUENTIN TUCKER was an appraiser who allegedly created an inflated appraisal for the property by, among other things, attaching photographs of a different location to the appraisal. After the fraudulent transaction closed, and to hide the scheme, KEREN SADE MISAGHI arranged for one month's mortgage payment to be made on the property.
The takedown of "Operation Bad Deeds" is the culmination of a series of investigations conducted by the United States Attorney's Office for the Southern District of New York, the FBI, the New York State Banking Department, the HUD-OIG, the USSS, the USPIS, and the FDIC-OIG.
Mr. BHARARA thanked all of the federal, state, and local law enforcement agencies involved in the investigation for their outstanding work. Mr. BHARARA also thanked the Kings County District Attorney's Office, the Queens County District Attorney's Office, the New York City Department of Investigation, the Department of Homeland Security's United States Immigration and Customs Enforcement, and the New York State Department of Insurance for their invaluable assistance. He added that the investigation is continuing.
The prosecution of the cases arising from "Operation Bad Deeds" is being overseen by the Office's newly-formed Complex Frauds Unit. The prosecution of United States v. Lavette Bills, et al. is being handled by AMY R. LESTER and JASON A. MASIMORE. The prosecution of United States v. Peggy Persaud, et al. is being handled by ANTONIA M. APPS. The prosecution of United States v. Beverly Johnson, et al. is being handled by JENNIFER E. BURNS. The prosecution of United States v. Marlene Boussous, et al. is being handled by AIMEE HECTOR. The prosecution of United States v. Danny Siony, et al. is being handled by AMY R. LESTER. The prosecution of United States v. Dean Reskakis, et al. is being handled by ZACHARY A. FEINGOLD. The prosecution of United -11- States v. Keren Misaghi, et al. is being handled by SEAN S. BUCKLEY. The prosecution of United States v. Dustin Dente, et al. is being handled by SEETHA RAMACHANDRAN and MICHAEL D. LOCKARD.

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