DEPARTMENT OF JUSTICE

UNITED STATES ATTORNEYSSTATEMENT OF MARK T. CALLOWAY

DIRECTOR, EXECUTIVE OFFICE FOR UNITED STATES ATTORNEYS

BEFORE THE COMMITTEE'S COMMERCIAL AND ADMINISTRATIVE LAW SUBCOMMITTEE

MAY 9, 2001

Mr. Chairman, Congressman Watt, and Members of the Subcommittee, I am pleased to appear before you today with my colleagues: John Cruden, Acting Assistant Attorney General for the Environment and Natural Resources Division; Stuart Schiffer, Acting Assistant Attorney General for the Civil Division, and Martha Davis, Acting Director of the Executive Office for U.S. Trustees.

OVERVIEW

The Executive Office for United States Attorneys (EOUSA) provides legal, policy and administrative support for the 93 United States Attorneys and their staffs in 94 United States Attorneys' offices nationwide. EOUSA deals with issues involving the United States Attorneys' offices, their legal and policy concerns, overall operations, budgets, management, personnel matters and evaluations. In addition, EOUSA is the voice of the United States Attorneys within the Department of Justice. As such, EOUSA supports and represents the interests of the United States Attorneys, voiced through the Attorney General's Advisory Committee, on a host of legal and policy issues presented within the Department, the Administration and Congress.

The work of the United States Attorneys is among the most fundamental of any in the government: criminal law enforcement; affirmative civil litigation; and defending the government when it is being sued. EOUSA and the United States Attorneys also recognize the need for cooperation with Congress on matters affecting how federal laws are enforced and the interests of the American public. For example, the Government Accounting Office (GAO) recently completed a report that responds to concerns raised by health care providers about our enforcement of the federal False Claims Act. I am pleased to tell you that the GAO report is very favorable in its assessment of our efforts to comply with guidance issued by the former Deputy Attorney General on June 3, 1998, on enforcing the False Claims Act in a fair and even-handed manner in civil health care fraud matters. Among other things, the report said that United States Attorneys' offices appropriately considered individual circumstances in their interactions with hospitals on a case-by-case basis.

Each year, United States Attorneys' offices handle a wide variety of criminal and civil litigation that is often complex and significant. The important cases handled just in the past year by the United States Attorneys' offices are truly impressive, and represent a remarkable range of issues and subjects. A brief description of some of the more significant recent cases is provided for the Subcommittee's benefit. These cases reflect our prosecution of criminal and civil offenses with the goal of reducing violent crime, firearms related violence, computer crime, and guaranteeing rights for all Americans.

In the Northern District of Georgia, a jury returned a guilty verdict, after 12 minutes of deliberation, against a defendant for using, and traveling in, interstate commerce to entice a minor to engage in sexual activity. The defendant established a relationship with a person he believed to be a 13-year-old girl via the Internet in America Online chat rooms. For 3 days, he carried on increasingly sexually explicit chats with the "girl", who was, in fact, a sheriff's deputy assigned to the Innocent Images Task Force targeting Internet sexual crimes against minors. The defendant attempted to arrange a meeting with the girl at a Georgia shopping mall, giving her the explicit reason for the meeting. He was arrested at the mall without incident.

After a 10-week jury trial in the Eastern District of Wisconsin, five members of a notorious, violent gang that has chapters throughout the United States were found guilty of RICO and RICO conspiracy counts that included 9 homicides, 21 attempted homicides, kidnaping, sexual assault, and an 11-year drug enterprise. Two of the defendants were convicted of homicides for which they had previously been acquitted in state court. Prior to trial, 28 additional defendants pleaded guilty. To date, 33 of the 34 indicted defendants have been convicted.

• In the Northern District of Georgia (Atlanta), a defendant was arrested by the Atlanta Police on April 2, 1999, after speeding and running a stop sign. The officer signaled the defendant to pull over, but the defendant raced away and lost control of his car, striking a curb. The defendant jumped out and began to run; he was caught about 100 yards away. He had on his person some marijuana and three .357 bullets. A fully loaded .357 magnum revolver was found under the driver's seat of his car, along with some cocaine. The defendant gave a false name; the gun was stolen. The defendant became violent, and after he was placed in the patrol car he began ramming the screen and window with his feet. He was then placed in a police wagon, and rammed his own head into the screen of the wagon. (He later tried to blame the police for his self-inflicted injuries.) The defendant's criminal history resulted in his being sentenced as an Armed Career Criminal (fifteen-year minimum). He had eleven prior felony convictions, seven for drug trafficking, others included armed robbery, theft of auto and assault. He also had 16 other arrests which did not result in convictions, including charges of assault, theft, armed robbery and possession and sale of cocaine.

• In the Southern District of New York (Manhattan) a member of a hacker group known as "Conflict" pleaded guilty to charges of breaking into two computers owned and maintained by the National Aeronautics and Space Administration's Jet Propulsion Laboratory (JPL) in Pasadena, California. The defendant used one of those computers to host an Internet chat room and installed programs designed to obtain user names and passwords from the other computer. The defendant admitted that, operating from his residence in New Rochelle, New York, he used his personal computer to run programs designed to search the Internet and seek out computers vulnerable to intrusion. One of the computers the defendant accessed was used by NASA to perform satellite design and mission analysis for future space missions; another was used by JPL's Communications Ground Systems Section as an e-mail and internal web server. The defendant also pleaded guilty to intercepting user names and passwords traversing the computer networks of a computer owned by San Jose State University, possession of stolen passwords and user names that he used to gain free or unauthorized computer access, and possessing stolen credit card numbers, which he stored in his computer.

• In New Jersey, a former penny-stock broker and financier was convicted last month of bankruptcy fraud and money laundering. All but one of the guilty verdicts concerned the defendant's hiding of $4 million in assets during the same time that he was seeking bankruptcy protection from creditors. Testimony revealed a high-living defendant, who treated himself to a charter yacht on the Mediterranean, other world travel, and massive securities investments and gains accomplished through his overseas money manager -- the government's main witness -- all while the defendant was in bankruptcy and facing an SEC judgment, as well as a judgment for millions of dollars owed to New Jersey securities regulators.

These cases, and countless others, reflect the work that the attorneys, paralegal and support staff do every day enforcing our laws. Moreover, the United States Attorneys work with all of the other Department of Justice components and other Federal agencies, as well as with their local and state counterparts, to enforce this country's laws. Indeed, while the United States Attorneys target criminal organizations and crimes that are often beyond the resources of our state and local counterparts, reliance on such partnerships and close cooperation with state and local law enforcement allow the United States Attorneys to leverage the resources provided by Congress to exert the greatest impact on crime and civil rights. And, in all phases of this work, EOUSA promotes the efforts of the United States Attorneys' offices by providing administrative support, policy, and legal guidance, advanced technology throughout the country, and representation in Main Justice.

While we have achieved considerable progress in the past year, more needs to be done to ensure the safety of our communities. In addition to our base appropriations request, we are asking for a total of 132 new positions and a $13.2 million increase for three initiatives summarized below.

PROGRAM ENHANCEMENTS

In developing our requests for program enhancements, which led to our Fiscal Year 2002 budget request, we worked closely with federal investigative agencies. Our request represents important policy and strategic planning, coupled with a careful fiscal plan for the United States Attorneys' offices to provide the best possible services in the most effective and efficient manner for the American people. These policies will require additional funding in the amount of $13.2 million (132 new positions). We respectfully request that the Subcommittee authorize these amounts.

PROJECT SENTRY We propose to place an Assistant United States Attorney in each of our 94 districts and to dedicate that prosecutor to creating federal-state-county-local-tribal partnerships by establishing "Safe School Task Forces" involving law enforcement, community groups, and schools. These task forces will: (1) focus on gun crimes involving or affecting juveniles; (2) prosecute adults who illegally furnish firearms to juveniles; and (3) promote school safety through community outreach efforts. For this, we request that you authorize $9 million.

We believe that every young American should have the opportunity to go to a good school and acquire the skills necessary to advance in today's high technology society. This opportunity is hindered when a young person's school safety is not adequately assured. The safety of America's youth in school is a grave concern as gun violence becomes an increasingly visible issue nationwide.

Our time is marred by a series of school massacres. Names such as Paducah, Jonesboro, Fayetteville, Springfield, Moses Lake, Olivehurst, and Littleton, Colorado, where two gunmen shot and killed 12 classmates and a teacher before taking their own lives at Columbine High School, reverberate like the names of battlefields. Less than three months into the new millennium, it is evident that the deadly trend continues. Two days after a

15- year old freshman at Santana High School in Santee, California, went on a deadly shooting spree, firing more than 30 rounds from a .22 caliber revolver, which left two students dead and 13 wounded, an eighth-grade student at a high school in Williamsport, Pennsylvania, shot a classmate during lunch, while a group of teens in Perris, California were overheard talking about their desire to murder their schoolmates. Add to these cases the alarming rate at which gang-related violence occurs in schools, on playgrounds and at parks, and it becomes evident that Federal prosecutors must work with state, local, and tribal law enforcement to pursue serious juvenile offenders. While schools remain safer than the streets that surround them, we have a special duty to protect the young people entrusted to schools by their parents.

While juveniles who illegally use or possess firearms and the adults who furnish them should be vigorously prosecuted, we should also undertake simultaneous efforts geared toward prevention if we are to improve comprehensively the safety of our schools. Project Sentry will allow United State Attorneys to make better use of federal statutes aimed specifically at those adults who, by providing firearms to juveniles, set in motion the deadly chain of events that lead to tragedies like Columbine and Santee. This is critical in our quest to prevent future school shootings given the ease with which many school-aged children, including gang members, are able to acquire guns. Early intervention is necessary to prevent youth violence.

We must also educate young people about the use of guns, in addition to prosecuting adult suppliers as a means of prevention. Age-appropriate training in self-esteem and stress management, particularly for students living in poverty or experiencing family conflict can help too. Our goal is to bring about a change in the students and school climate so that every young American has the opportunity to flourish in a safe school environment. Bringing Project Sentry Coordinators to schools to discuss crime and violence will work toward this goal by providing students with positive role models.

CYBERCRIME

The United States' technological edge is threatened by domestic and international high technology criminals engaged in the theft and piracy of trade secrets, copyrighted software, and other intellectual property of our nation's businesses. The United States' ability to protect its businesses and citizens in a global economy depends on our ability to deter, detect, investigate, and prosecute violations involving computers, technology, intellectual property, and child pornography.

The growing complexity of computer systems and the networks that allow the computers to communicate mean that the investigation and prosecution of many high-technology cases will require the expertise that is possessed by federal investigative agencies, such as the Treasury Department (the Secret Service, the U.S. Customs Service, the Internal Revenue Service, and the Bureau of Alcohol, Tobacco and Firearms) and the Federal Bureau of Investigation (FBI), and thus will require commensurate expertise and resources for the United States Attorneys.

The United States Attorneys seek to address the continually increasing caseload generated by the federal investigative agencies listed above, especially the increased caseload that was generated by the addition of the 153 FBI agents received in the FY 1999 budget. For that reason, we ask the Subcommittee to authorize $2.9 million.

In response to the growing threat posed by high-technology crimes, the Department has launched a number of initiatives. For example, the Department launched an Internet Fraud Initiative to combat the migration of practically all traditional fraud crimes to the Internet. Much of the workload generated by these initiatives has fallen upon the Computer and Telecommunications Coordinators (CTCs). Each United States Attorney's office has at least one CTC prosecutor. The CTCs coordinate with their counterparts in other United States Attorneys' offices, investigate and prosecute high-technology crimes, provide training to other Assistant United States Attorneys in their offices and to local, federal, and state law enforcement officers, conduct community outreach, and coordinate with the Computer Crime and Intellectual Property Section of the Criminal Division.

In 1999, in recognition of the growing importance to the U.S. economy of intellectual property - including copyrights, trademarks, and trade secrets - and their vulnerability to theft, the Justice Department, along with the FBI and the U.S. Customs Service, launched the Intellectual Property Enforcement Initiative. This Initiative is multi-faceted and has a variety of international, educational, and outreach components. It also has an important domestic enforcement component, which calls on United States Attorneys' offices to focus more attention on bringing cases involving the theft of intellectual property, especially copyright piracy and trademark infringement.

Two important factors will accelerate the importance of IP crime on the United States Attorney's dockets during the coming years, suggesting that special budgetary attention is crucial. First, organized crime, lured by high profits and low risk, has increasingly infiltrated the distribution networks of trademark counterfeiting and pirated copyrighted works. Organized crime's involvement signals the unwelcome addition of other criminal law violations, such as money laundering. Second, the United States Sentencing Commission has recently amended the sentencing guideline for copyright and trademark violations, which will raise the average sentences for these criminals.

American consumers are increasingly relying on the Internet to purchase high-value goods and services. Electronic commerce is undergoing explosive growth throughout the world. Computer- related crime has a significant impact upon electronic commerce as demonstrated by the distributed denial of service attacks upon popular Internet sites. Likewise, traditional fraud schemes, such as Ponzi schemes and bait and switch frauds are quickly finding their way onto the Internet and are being used to defraud a new set of victims. In addition, the "information age" crime of identity theft has emerged as an increasingly prevalent element in Internet fraud schemes. CTCs and other specially-trained fraud prosecutors are uniquely equipped and positioned to respond to Internet fraud. Swift and effective prosecution of these crimes is necessary to maintain consumer confidence in electronic commerce.

The United States Attorneys are also responsible for the prosecution of crimes involving the possession and distribution of child pornography and the sexual exploitation of children. Due to the rapid advances in computer technology, complexity of issues, and continual need to expand forensic technology capabilities, many child pornography cases are referred for federal prosecution because states often lack adequate resources to aggressively prosecute them. Furthermore, some state statutes and penalties have not kept pace with the rapid increases in technology and may not deter or punish those who commit computer crimes, including child pornography. In addition, child pornographers can reach not only across state lines for access to child pornography, but also across foreign borders. In these cases, state laws and resources may be wholly inadequate, and if the federal government doesn't prosecute the case, it won't get prosecuted at all.

Child pornography, which was once limited largely to illicit books, magazines, and mailings, has emerged as a significant problem on the Internet. This medium has enabled pedophiles to contact each other and strike up anonymous electronic conversations with or about potential victims. Also, the Internet provides pedophiles with a means to store, distribute, and exchange electronic images of child pornography. The Child Pornography Prevention Act of 1996 amended the federal child pornography and abuse statutes by creating new child pornography offenses, increasing penalties for both child sexual abuse and child pornography crimes, and most importantly, establishing a separate statutory scheme for computer-generated or altered child pornography.

These child abuse cases encompass a cohort of pedophiles that present an exceptionally serious threat to children. Known as "travelers", they seek to meet children online and then travel -- or induce the child to travel -- in an attempt to meet and have sex with the child. In 1995 the FBI began the Innocent Images National Initiative, which addresses the illicit activities conducted by users of commercial and private online services and the Internet. This has led to increased arrests, indictments, and convictions.

The growth in violations of computer-related statutes from FY 1995 to FY 2000 has been huge. For example, the existing backlog is reflected in the growth of matters pending with the United States Attorneys. There has been a 378 percent increase in computer crime matters pending over these last five years. Just over the last year, matters pending have grown by 52 percent. As these figures demonstrate, we require additional attorneys to thwart attempts at computer and other high-technology crime generated by the steadily accelerating role of computers in businesses throughout the Nation, the personal lives of our citizens, the exploding growth of online services and Internet use, the vulnerabilities of computer systems to attack and abuse, and the ability of computer criminals to attack anonymously and from locations throughout the country and the world. These computer cases are very fact-specific and time intensive. They require the involvement of the United States Attorneys in the drafting of subpoenas and search warrants, the examination, development, the preservation of evidence, and at other various stages prior to the actual prosecution of cases, in order to ensure the effectiveness of investigating and developing cases for favorable prosecution.

POST-REMOVAL ORDER IMMIGRATION LITIGATION

The United States Attorneys are requesting 14 positions (including 9 attorneys) and $1.2 million to support habeas corpus litigation as a result of "post-removal order" immigration detention cases. In 1996, as a result of a change in the immigration laws, there was a rapid and dramatic increase in the number of habeas corpus petitions filed by post-removal order detainees -- often individuals who had become removable because of criminal convictions in this country. Because of their criminal convictions, these individuals had lost their legal immigration status. The Immigration and Naturalization Service (INS) cannot, however, immediately deport these individuals, despite receiving an order of removal, because their country of origin refuses to accept them -- and notwithstanding a requirement under international law that every country accept its own nationals. Hence, absent judicial intervention, and unless determined by the INS in its periodic reviews to be an appropriate candidate for release, these individuals are subject to INS detention. This change in the law has resulted in an overwhelming increase in workload for several districts. For example, in 1999, the Western District of Washington docketed some 225 immigration-related civil cases, comprised mostly of habeas corpus petitions filed on behalf of post-removal order detainees. The dramatic increase in immigration-related caseload has had a detrimental impact on several districts' ability to carry out other important missions of the Department.

CONCLUSION

Crimes in the new millennium can be expected to increase in technological complexity and sophistication. The United States Attorneys must be equipped with the resources needed to bring to completion the efforts of the investigative agencies by ensuring the appropriate prosecutorial actions. The United States Attorneys have sustained their leadership roles in our communities by coordinating efforts with federal, state, and local law enforcement in fighting crime in our neighborhoods and nationally. We will continue to fight to keep our neighborhoods safe from violent crime, to minimize the prevalence of computer crime, and to protect the safety, interests, and rights of our citizens. We hope to build on our successes, in cooperation with this Subcommittee and with its support, through authorizations in the amounts we have sought in the President's FY 2002 Budget request for the offices of the United States Attorneys.

Again, I would like to thank you, Mr. Chairman, Congressman Watt, and all the Members of this Subcommittee for your continued support of the United States Attorneys' offices. I would be happy to answer any questions you may have at this time.