A federal grand jury in Knoxville, Tennessee, returned an indictment charging two individuals and four companies with participating in a conspiracy to fix prices of DVDs and Blu-Ray Discs sold on the Amazon Marketplace.
According to the one-count felony indictment filed in the U.S. District Court for the Eastern District of Tennessee, Victor Btesh, of Brooklyn, New York, and Bruce Fish of Hayfield, Minnesota; along with BDF Enterprises Inc., a Minnesota corporation; Michelle’s DVD Funhouse Inc., a New York corporation; MJR Prime LLC, a New York corporation; and Prime Brooklyn LLC, a New York corporation, were charged with conspiring with each other and others to fix prices of DVDs and Blu-Ray Discs sold through storefronts on the Amazon Marketplace. The price-fixing conspiracy was ongoing from at least as early as October 2016 until at least Oct. 29, 2019.
“This indictment – the fifth charge to date in the ongoing investigation – demonstrates our commitment to protecting consumers and prosecuting individuals who conspire to fix prices in online marketplaces,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division.
“Price-fixing conspiracies in online marketplaces harm consumers and will be prosecuted,” said U.S. Attorney Francis M. Hamilton III for the Eastern District of Tennessee.
“This indictment shows that the FBI is dedicated to protecting American consumers from unfair prices in all areas of the marketplace,” said Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division. “The FBI and our law enforcement partners will continue to investigate conspiracies to fix prices and hinder competition for all.”
“We are gratified to have contributed to this investigation and applaud the exceptional work by the investigative team for both protecting the individual consumer and the deterrence of activities in violation of the Sherman Act,” said Special Agent in Charge Ken Cleevely of the U.S. Postal Service, Office of Inspector General (USPS-OIG). “Along with our law enforcement partners, the USPS OIG will continue to aggressively investigate those who would engage in this type of harmful conduct.”
The Amazon Marketplace is an e-commerce platform owned and operated by Amazon.com Inc. that enables third-party vendors to sell new or used products alongside Amazon’s own offerings.
Four other individuals have been previously charged and pleaded guilty in this ongoing investigation.
A criminal violation of the Sherman Act carries a statutory maximum penalty of 10 years in prison and a $1 million criminal fine for individuals, and a $100 million fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The Antitrust Division’s Chicago Office and the U.S. Attorney’s Office in the Eastern District of Tennessee are prosecuting the case, which was investigated with the assistance of the FBI’s New York Field Office and the USPS-OIG’s Contract Fraud Investigations Division.
Anyone with information concerning price fixing or other anticompetitive conduct related to the sale of DVDs, Blu-Rays Discs, or other products sold through Amazon Marketplace should contact the Antitrust Division’s Chicago Office at 312-984-7200, Antitrust Division’s Citizen Complaint Center at 888-647-3258 or www.justice.gov/atr/contact/newcase.html, FBI’s New York Field Office at 212-384-1000, or the USPS-OIG’s Fraud, Waste, & Misconduct Hotline at 888-877-7644.
An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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- Science & Tech Spotlight: Counter-Drone Technologies
March 15, 2022Why This Matters Uncrewed aircraft systems, or “drones,” can pose safety and security risks to critical U.S. sites and may be used for smuggling or other criminal activity. With over 2 million drones projected in the U.S. by 2024, these risks are likely to grow. Detection and mitigation technologies could counter these risks, but may face challenges around effectiveness and unintended impacts. The Technology What is it? Uncrewed aircraft systems (UAS), or “drones,” have a variety of uses, such as photography, delivering packages, and monitoring crops. However, UAS can also pose significant safety and security risks if they enter airspace around critical U.S. sites without authorization or if used for illegal activities. To reduce these risks, counter-UAS technology can detect such unauthorized or unsafe UAS and, when needed, jam, capture, or disable them. Several UAS incidents have been reported in the U.S. For example, in January 2019, Newark Liberty International Airport halted all landings and diverted planes for over an hour after a potential UAS sighting nearby. Furthermore, smugglers have used UAS to deliver illegal drugs into the country (see fig. 1). Figure 1. Some of the risks posed by uncrewed aircraft systems. Reported incidents like these may increase as the use of UAS increases. The Federal Aviation Administration (FAA) has forecast that by 2024, the commercial UAS fleet will reach around 828,000, and the recreational fleet will number around 1.48 million. Domestically, counter-UAS activities may be restricted or prohibited by existing federal laws such as the Aircraft Sabotage Act or the Computer Fraud and Abuse Act. However, four federal agencies—the Departments of Defense, Energy, Justice, and Homeland Security—have been authorized to deploy counter-UAS technologies under certain circumstances, such as to protect sensitive government facilities, including domestic military bases and prisons, or to provide security during sports championships. How does it work? Counter-UAS technologies generally fall into two categories: detection and mitigation. Detection technologies include infrared devices to track heat signatures, radio frequency systems to scan for control signals, and acoustic methods to recognize the unique sounds produced by UAS motors. According to a 2019 Bard College report, radio frequency and radar systems are the most common detection technologies (see fig. 2). Figure 2. In this example, a critical site detects an unauthorized UAS nearby. An interference signal jams the connection between the UAS and its operator to reroute the UAS away from the site. Mitigation technologies can repel or intercept an unauthorized UAS. For example, interference signals can jam or break the communications connection between the UAS and its operator, which can trigger the UAS to land or return to its operator. According to the Bard College report, jamming is the most common mitigation technology. Other mitigation technologies can use a net or kinetic force (such as lasers or projectiles) to disable or destroy the UAS. However, kinetic methods can be problematic because a falling or exploding UAS may cause unintended damage. How mature is it? Although the Department of Defense has used counter-UAS technology abroad since at least 2014, domestic use has been limited. Over the last 4 years, the authorized agencies have deployed some counter-UAS technologies domestically. However, some of these technologies have limited ability to detect and track small UAS (less than 55 pounds). Furthermore, few can successfully jam or disable a UAS, and many of those that can are only effective at around 1,000 feet or less. To counter UAS risks, the FAA (which has been authorized to conduct limited testing activities) and the authorized agencies are continuing to test, evaluate, and develop integrated counter-UAS platforms. These platforms’ capabilities are designed to address specific risk environments. For example, a powerful long-range signal jammer may be effective at mitigating UAS in rural locations, like near some domestic military bases, but this same technology could also disrupt legitimate and vital communications if used in a city or near an airport. UAS technology continues to advance and become more accessible to the public. For example, UAS have become smaller and more maneuverable, making detection and mitigation more challenging. To stay effective, counter-UAS technology will need to adapt to such changes. Opportunities Enhanced security. UAS have interfered with military and commercial aircraft operations, entered airspace over large sporting events, illegally accessed wireless networks, and been sighted over sensitive national security facilities. Counter-UAS technologies could address such threats to critical sites and assets. Better situational awareness. Counter-UAS platforms could allow tracking of UAS activity near critical sites and allow data analysis over time or locations to better understand the threat. Challenges Effectiveness. Electromagnetic interference (e.g., power lines and LEDs) and small airborne objects (e.g., birds) can decrease detection capabilities or generate false detections. Mitigation systems may have a limited effective range or have difficulty against UAS that are quick or move in unpredictable patterns. Unintended effects. Counter-UAS platforms may pose safety hazards by interfering with nearby communications, such as devices that use navigation systems. For kinetic mitigation, errant projectiles or falling UAS could damage property or injure people on the ground. Limited number of authorized agencies. As of March 2022, only four federal agencies are authorized to conduct counter-UAS operations under certain circumstances, and no state or local agencies (or individuals) have such specific federal authorization. According to the Bard College report, local agencies generally rely on a small number of federal counter-UAS units to respond to and protect against UAS threats in their area. Privacy concerns. Counter-UAS detection methods could collect personally identifiable information, such as information about the operators or camera images of bystanders. Policy Context & Questions With increased use of UAS and, along with it, increased demand for counter-UAS technologies, key questions for policymakers include: What research and development might lead to innovative counter-UAS solutions that can more effectively address UAS safety and security risks while minimizing unintended effects on airspace or the public? What are the potential trade-offs if policymakers consider authorizing the use of counter-UAS by others, including state and local law enforcement agencies, and expanding the use of these technologies? If policymakers consider expanding authorization, what is the appropriate level of jurisdictional coordination and regulatory oversight for the use of these technologies among federal agencies and others? For more information, contact Brian Bothwell at (202) 512-6888 or BothwellB@gao.gov.
- Force Structure: DOD Needs to Integrate Data into Its Force Identification Process and Examine Options to Meet Requirements for High-Demand Support Forces
August 25, 2021Since the terrorist attacks of September 11, 2001, the war on terrorism has dominated the global security environment. Ongoing overseas operations and heavy reliance on reservists have raised concerns about how the Department of Defense (DOD) will continue to meet its requirements using an all-volunteer force. The Army, in particular, has faced continuing demand for large numbers of forces, especially for forces with support skills. GAO was mandated to examine the extent of DOD’s reliance on personnel with high-demand skills and its efforts to reduce or eliminate reliance on these personnel. Accordingly, GAO assessed (1) the combat support and combat service support skills that are in high demand and the extent to which DOD officials have visibility over personnel who are available for future deployment and (2) the extent to which DOD has conducted a comprehensive, data-driven analysis of alternatives for providing needed skills.Ongoing operations in Iraq and Afghanistan have required large numbers of ground forces, creating particularly high demand for certain combat support and combat service support skills, such as military police and civil affairs. After determining which requirements can be met with contractor personnel, DOD then determines how to meet requirements for military personnel. DOD officials charged with identifying forces have not had full visibility over the pool of skilled personnel available for future deployments. For some skills, the combatant commander’s operational requirements have exceeded the initial supply of readily available trained military forces. DOD has met demands for these skills through strategies such as reassigning or retraining personnel. However, many of the skilled personnel in high demand are reservists whose involuntary active duty is limited under the current partial mobilization authority and DOD and Army policy. To meet requirements, officials charged with identifying personnel for future rotations developed an inefficient, labor-intensive process to gather information needed for decision making because integrated, comprehensive personnel data were not readily available. DOD is taking steps to develop comprehensive data that identify personnel according to deployment histories and skills; however, until DOD systematically integrates such data into its process for identifying forces, it will continue to make important decisions about personnel for future rotations based upon limited information and lack the analytical bases for requesting changes in or exceptions to deployment policies. Although DOD has developed several strategies to meet the combatant commander’s requirements for previous rotations, it has not undertaken comprehensive, data-driven analysis of options that would make more personnel available for future rotations in Iraq and Afghanistan. A key reason why DOD has not conducted comprehensive analyses of options is that its process for identifying forces focuses on one rotation at a time and does not take a long-term view of potential requirements. Prior GAO work has shown that reliable data about current and future workforce requirements are essential for effective strategic planning, as is the data-driven analysis of the number of personnel and the skill mix needed to support key competencies. With data that link deployment dates and skills, DOD could assess options, including using more personnel with support skills from the Army and other services, transferring more positions to high-demand areas, and changing deployment lengths. Each of these options has both advantages and disadvantages. However, without a comprehensive analysis of the options and their related advantages and disadvantages, DOD will be challenged to plan effectively for future requirements and to meet recruiting goals. Additionally, without linking data and options, the services may have difficulty deploying all reservists once before other reservists are required to deploy for a second time, which is a key DOD goal. Moreover, the Secretary of Defense and Congress will not have complete information with which to make decisions about the size and composition of the force, mobilization policies, and other issues.
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- Commercial Space Transportation: FAA Should Examine a Range of Options to Support U.S. Launch Infrastructure
December 22, 2020Launch providers support the deployment of people and payloads, such as national security and commercial satellites or research probes, into space. The majority of these providers told GAO that U.S. space transportation infrastructure—located at sites across the country—is generally sufficient for them to meet their customers’ current requirements. This situation is in part a result of the launch providers’ investments in launch sites, along with state and local funding. Launch providers and site operators alike seek future improvements but differ on the type and location of infrastructure required. Some launch providers said that infrastructure improvements would be required to increase launch capacity at existing busy launch sites, while a few site operators said that new infrastructure and additional launch sites would help expand the nation’s overall launch capacity. U.S. Commercial Launch Sites with Number of FAA-Licensed Launches, January 2015 – November 2020 The Federal Aviation Administration (FAA) was directed by statute to make recommendations to Congress on how to facilitate and promote greater investments in space transportation infrastructure, among other things. However, FAA’s initial draft report was limited because it focused only on two existing FAA programs, rather than a range of options. FAA officials stated that they did not examine other options because of limited time and resources, and that the two identified programs could be implemented quickly because FAA has administrative authority to manage them. Leading practices in infrastructure investment emphasize the importance of conducting an examination of potential approaches, which can help identify how best to support national interests; avoid overlap or duplication of federal effort; and enhance, not substitute, participation by non-federal stakeholders. An examination may also help identify alternatives to making funding available, such as increasing efficiency and capacity through technology improvements. By focusing only on these existing programs, FAA may overlook other options that better meet federal policy goals and maximize the effect of any federal investment. Although FAA has already prepared its initial report to respond to the statute, it still has opportunities, such as during subsequent mandated updates, to report separately on potential approaches. Demand for commercial space launches is anticipated to increase in the coming years. FAA, the agency responsible for overseeing the sites where these launches occur, was directed by statute to submit a report—and update it every 2 years until December 2024—that makes recommendations on how to facilitate and promote greater investments in space transportation infrastructure. The FAA Reauthorization Act of 2018 included a provision for GAO to review issues related to space transportation infrastructure. This report discusses launch providers’ and site operators’ views on the sufficiency of infrastructure in meeting market demand and assesses the steps FAA has taken to identify options for federal support of space transportation infrastructure, among other things. GAO reviewed relevant regulations; assessed FAA’s actions against GAO-identified leading practices; and interviewed FAA officials, commercial launch providers, and representatives from U.S. commercial launch sites that GAO identified as having hosted an FAA-licensed launch since 2015 or having an FAA launch site operator license as of August 2020. GAO recommends that FAA examine a range of potential options to support space transportation infrastructure and that this examination include a discussion of trade-offs. DOT partially concurred, noting that it would provide its mandated report to Congress but not conduct a new examination of a range of options. GAO continues to believe that such an examination is warranted. For more information, contact Heather Krause at (202) 512-2834 or KrauseH@gao.gov.
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August 10, 2020The Department of Homeland Security (DHS) and U.S. Department of Agriculture (USDA) have taken steps to plan for and implement the successful transfer of the National Bio and Agro-Defense Facility (NBAF) from DHS to USDA for ownership and operation. (See figure.) The facility is to house state-of-the-art laboratories for research on foreign animal diseases—diseases not known to be present in the United States—that could infect U.S livestock and, in some cases, people. The departments’ steps are consistent with selected key practices for implementation of government reforms. In addition, USDA has taken steps to prepare for NBAF’s operation by identifying and addressing staffing needs; these steps are consistent with other selected key practices GAO examined for strategically managing the federal workforce during a government reorganization. However, critical steps remain to implement the transfer of ownershp of NBAF to USDA and prepare for the facility’s operation, and some efforts have been delayed. Critical steps include obtaining approvals to work with high-consequence pathogens such as foot-and-mouth disease, and physically transferring pathogens to the facility. DHS estimates that construction of NBAF has been delayed by at least 2.5 months because of the effects of the COVID-19 pandemic. USDA officials stated that, until the full effects of delays to construction are known, USDA cannot fully assess the effects on its efforts to prepare for the facility’s operation. In addition, USDA’s planning efforts were delayed before the pandemic for the Biologics Development Module—a laboratory at NBAF intended to enhance and expedite the transition of vaccines and other countermeasures from research to commercial viability. A November 2018 schedule called for USDA to develop the business model and operating plan for the module in 2019. Officials stated in May 2020 that USDA intends to develop the business model and operating plan by fiscal year 2020’s end. Construction Site of the National Bio and Agro-Defense Facility (NBAF) as of November 2019 and an Artist’s Rendering of NBAF When Complete USDA’s efforts to date to collaborate with DHS and other key federal or industry stakeholders on NBAF have included meeting regularly with DHS officials to define mission and research priorities, developing written agreements with DHS about DHS’s roles and responsibilities before and after the transfer, and collaborating with the intelligence community, as well as with relevant international research groups and global alliances, on an ongoing basis. These efforts are consistent with selected key practices for interagency collaboration, such as including relevant participants and clarifying roles. Foreign animal diseases—some of which infect people—can pose threats to the United States. USDA and DHS have been developing NBAF to conduct research on and develop countermeasures (e.g., vaccines) for such diseases, as part of a national policy to defend U.S. agriculture against terrorist attacks and other emergencies. DHS is constructing NBAF in Manhattan, Kansas. DHS originally assumed responsibility for owning and operating NBAF. However, USDA will carry out this responsibility instead, following an executive order from 2017 to improve efficiency of government programs. Construction is expected to cost about $1.25 billion. GAO was asked to review issues related to development of NBAF and USDA’s plans for operating it. This report examines (1) efforts to transfer ownership of NBAF from DHS to USDA and to prepare for the facility’s operation and (2) USDA’s efforts to collaborate with stakeholders. GAO reviewed DHS and USDA documents and interviewed key department officials and various stakeholders. GAO also compared the departments’ efforts on NBAF with selected key practices for government reforms and collaboration. For more information, contact Steve D. Morris at (202) 512-3841 or email@example.com.
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May 26, 2021What GAO Found Federal agencies continue to face software supply chain threats. In December 2020, the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency issued an emergency directive requiring agencies to take action regarding a threat actor that had been observed leveraging a software supply chain compromise of a widely used enterprise network management software suite—SolarWinds Orion. Subsequently, the National Security Council staff formed a Cyber Unified Coordination Group to coordinate the government response to the cyberattack. The group took a number of steps, including gathering intelligence and developing tools and guidance, to help organizations identify and remove the threat. During the same month that the SolarWinds compromise was discovered, GAO reported that none of 23 civilian agencies had fully implemented selected foundational practices for managing information and communication technology (ICT) supply chain risks—known as supply chain risk management (SCRM) (see figure). Twenty-three Civilian Agencies’ Implementation of Information and Communication Technology (ICT) Supply Chain Risk Management (SCRM) Practices GAO stressed that, as a result of not fully implementing the foundational practices, the agencies were at a greater risk that malicious actors could exploit vulnerabilities in the ICT supply chain, causing disruptions to mission operations, harm to individuals, or theft of intellectual property. Accordingly, GAO recommended that each of the 23 agencies fully implement these foundational practices. In May 2021, GAO received updates from six of the 23 agencies regarding actions taken or planned to address its recommendations. However, none of the agencies had fully implemented the recommendations. Until they do so, agencies will be limited in their ability to effectively address supply chain risks across their organizations. Why GAO Did This Study Federal agencies rely extensively on ICT products and services (e.g., computing systems, software, and networks) to carry out their operations. However, agencies face numerous ICT supply chain risks, including threats posed by malicious actors who may exploit vulnerabilities in the supply chain and, thus, compromise the confidentiality, integrity, or availability of an organization’s systems and the information they contain. Recent events involving a software supply chain compromise of SolarWinds Orion, a network management software suite, and the shutdown of a major U.S. fuel pipeline due to a cyberattack highlight the significance of these threats. GAO was asked to testify on federal agencies’ efforts to manage ICT supply chain risks. Specifically, GAO (1) describes the federal government’s actions in response to the compromise of SolarWinds and (2) summarizes its prior report on the extent to which federal agencies implemented foundational ICT supply chain risk management practices. To do so, GAO reviewed its previously published reports and related information. GAO has ongoing work examining federal agencies’ responses to SolarWinds and plans to issue a report on this in fall 2021.
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