J. Scott Applewhite / AP

Attorney General Eric Holder speaks during a news conference at the Justice Department in Washington on Tuesday.

In a major crackdown on healthcare fraud across the country, 89 people, including 14 doctors and nurses, were charged for their roles in various Medicare scams that bilked taxpayers of some $223 million through bogus charges, federal officials said Tuesday.

Some people allegedly posed as doctors and wrote bogus prescriptions for drugs and psychotherapy therapy and then billed the government $12 million.

Others are accused of bribing Medicare patients for their ID numbers, then using those numbers to bill $20 million in home health care never performed or not medically necessary.

The lead suspect in that case used the money to buy luxury cars, including two Lamborghinis and a Ferrari, officials said.

About 400 federal agents were involved in Tuesday's arrests, raiding businesses, seizing documents and charging suspects in Miami, Los Angeles, Houston, New York City, Detroit, Chicago, Tampa, Fla., and Baton Rouge, La.

The dragnet was announced by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius as the latest in a series of busts over the past four years to crack down on fraud that is believed to annually cost Medicare billions of  dollars.

In all the schemes, profit was a driving force, officials said.

“Today's takedown is the latest sign we are beginning to turn the tide on Medicare fraud,” Sebelius said in a news conference.

Holder said during the four-year crackdown by a federal strike force that 1,500 people have been arrested in connection to schemes involving nearly $2 billion in fraudulent billings.

He claimed that $8 dollars are returned to the U.S. Treasury for every dollar spent on the investigations.

Still, he said the battle against health care fraud is being affected by the across-the-board budget cuts called sequestration, which have trimmed $1.6 billion in funding from the Justice Department in the current fiscal year ending Sept. 30.

"Unless Congress adopts a balanced deficit reduction plan and stops the reductions currently slated for 2014, I fear our capacity to protect the American people from healthcare fraud ... will be further reduced," Holder said.

Sebelius said the Affordable Care Act, widely known as Obamacare, gives the government more tools to combat fraud.

“By expanding our authority to suspend Medicare payments and reimbursements when fraud is suspected, the law allows us to better preserve the system and save taxpayer dollars.” Sebelius said. “Today we’re sending a strong, clear message to anyone seeking to defraud Medicare: You will get caught and you will pay the price. We will protect a sacred trust and an earned guarantee.”

In Miami, where 25 people were charged for their role in various fraudulent schemes totaling $44 million, federal officials allege that in one scheme three suspects bribed Medicare patients for their identification numbers, then used the information to bill the government $20 million for medically unnecessary home health care services.

“The lead defendant spent much of the money from the scheme and purchased multiple luxury vehicles including two Lamborhinis, a Ferrari and a Bentley,” according to a statement from Health and Human Services and the Justice Department.

In Detroit, 18 people, including two doctors, a physician's assistant and two therapists, were charged in various scams totaling some $49 million in false claims for medically unnecessary services, including home health, psychotherapy and infusion therapy.

In one Detroit case, three people allegedly posed as licensed physicians and wrote bogus prescriptions for drugs and psychotherapy services totaling $12 million, according to the HHS-DOJ statement. 

Tuesday’s announcement on the Medicare-fraud sweep was overshadowed by reporters inquiring about two other scandals involving Holder’s Justice Department: That the attorney general’s office seized Associated Press phone records in a probe of a national security leak and a DOJ probe into reports that the IRS gave extra scrutiny to some conservative groups when auditing nonprofit organizations.

Lance Armstrong faces a powerful new adversary -- the United States government.

The Justice Department notified a federal court Friday that it is joining one of his former racing teammates in suing him for using performance-enhancing drugs during the Tour de France.

The government signed on to a lawsuit filed two years ago by Floyd Landis, one of Armstrong's former Tour de France teammates who has already admitted cheating. Among its claims: Landis saw Armstrong store and then re-inject his own blood to boost his performance, and Armstrong twice gave Landis banned hormones before races.

The government’s legal theory in joining the lawsuit is that when Armstrong agreed to race for the U.S. Postal Service team a decade ago in the Tour de France, he defrauded the government, violating its strict ban on illegal drugs, all the while claiming he did not use them.

Though the government’s action presents a serious new legal threat to Armstrong, the Justice Department case is not foolproof: Legal experts say Armstrong could argue that his contract with the team owners never explicitly prohibited blood doping, and he could claim that he never signed any agreement directly with the Postal Service that banned the practice.

But if the government wins, Armstrong could face huge fines, because the Postal Service paid at least $30 million to sponsor his racing teams.

Armstrong's attorney, Robert Luskin, said in a statement Friday that the Postal Service had no losses deserving of compensation.

"Lance and his representatives worked constructively over these last weeks with federal lawyers to resolve this case fairly, but those talks failed because we disagree about whether the Postal Service was damaged," Luskin said. "The Postal's Services own studies show that the Service benefited tremendously from its sponsorship -- benefits totaling more than $100 million."

After denying for years that he cheated, Armstrong gave a general admission last month in an interview with Oprah Winfrey. 

"This issue of performance enhancers, to me, we're going to pump up our tires, put water in our bottles and, oh yeah, that, too, is going to happen. That was it," he said.

The cycling website Velo News reported this week that Travis Tygart, the CEO of the US Anti-Doping Agency, wrote to Attorney General Eric Holder last month, urging the government to join the Landis lawsuit.

A decision by the Justice Department to join the case “in order to get to the bottom (or top) of this massive fraud would also be viewed by the press and public as necessary and legitimate,” the letter said.

Slideshow: Lance Armstrong’s controversial career

Joel Saget / AFP - Getty Images

The cyclist's historic run of Tour de France championships made headlines, as did his fall from grace after being stripped of the titles in 2012.

Launch slideshow

This story was originally published on Fri Feb 22, 2013 11:58 AM EST

Nick Adams / Reuters

Russell Diercks smokes marijuana inside of Frankie Sports Bar and Grill in Olympia, Wash., Dec. 9, 2012.

A majority of Americans want the federal government to keep out of state marijuana laws, even as overall sentiment on whether marijuana should be legalized is split, according to a new poll.

Sixty-four percent of adults responded "no" when asked whether they think the federal government should take steps to enforce federal anti-marijuana laws in states where marijuana is legal, according to the USA Today/Gallup poll released Monday.

 "The significant majority of Americans would advise the federal government to focus on other issues," wrote Frank Newport of Gallup.

In Washington and Colorado, where citizens last month voted to legalize marijuana possession, the issue of federal interference is especially salient as residents face a confusing mishmash of federal and state laws when it comes to whether and where they can get high.

That’s because the federal government still bans pot growing and possession, regardless of what state laws say, leaving many residents confused about what is legal. Some observers say it may take the Supreme Court to clear up the situation.

Americans who personally believe that marijuana should be legal overwhelmingly say the federal government should not get involved at the state level; even four in 10 of those opposed to legalized marijuana don't think federal officials should intervene.

Like Amsterdam: Washington bar owner lets patrons get stoned

It’s unclear at this point whether the Justice Department will try to stop the decriminalization of pot in Washington and Colorado, where adults 21 and older will be allowed to purchase a small amount of pot from state-licensed stores. The drug will be heavily taxed and potentially bring hundreds of millions of dollars a year for school, health care and government needs.

Although support for legalizing marijuana has risen substantially over the last four decades, the poll, which also asked participants where they stand on the issue of legalization, revealed that the public remains largely divided.

Six in 10 Americans aged 18 to 29 support legalizing marijuana, while about as many of those 65 and older are opposed. The bulk of middle-aged Americans – those aged 30 to 64 – are split on the issue of legalization. The poll also noted that Democrats were most in favor of legalization, while Republicans were most likely to be opposed.

Lawmakers in four New England states, including Maine, Vermont, New Hampshire and Rhode Island, have signaled that they plan to introduce proposals to legalize marijuana in the next year, according to the Marijuana Policy Project. Currently, 17 states and the District of Columbia already have laws allowing for the medical use of marijuana, according to the National Council of Legislatures. 

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With marijuana possession now legal in Washington state, and soon in Colorado too, residents face a confusing mishmash of federal and state laws when it comes to whether and where they can get high. 

That's because the federal government still bans pot growing and possession, regardless of what state laws say.

Last night, just hours before legislation legalizing pot in her state went into effect, U.S. Attorney Jenny A. Durkan of Washington warned residents that "growing, selling or possessing any amount of marijuana remains illegal under federal law."

Her words could be a buzzkill for Washington's pot-lovers, yet at midnight -- the moment Washington's law went into effect -- marijuana smokers lit up beneath Seattle's Space Needle, reveling in the joy of living in a state that allows possession of pot,  even if state law still says it is illegal to smoke it in public.

"It's too good to be just for the young," Pat Edmonson, 67, of Whidbey Island, Wash., said as she smoked marijuana in Seattle's City Center with a crowd of about 100 others who were lighting up, despite the no-pot-in-public rule. 

State leaders have appealed to the Justice Department for guidance.

Jim Seida / NBC News

Pat Edmonson, 67, of Whidbey Island, Wash., was in Seattle with her daughter to celebrate the legalization of the possession of marijuana.

Seattle City Attorney Pete Holmes encouraged celebrants to enjoy their highs inside closed doors.

"I think that they should acknowledge this newfound right," he told NPR station KUOW. "I think they should celebrate in the privacy of their homes if they choose to do so. And be thankful that we’re no longer arresting some 10,000 Washingtonians a year in the state of Washington and spending well over $100 million in law enforcement resources on that."

In Colorado, a measuring legalizing marijuana use and possession for those over 21 will go into effect next month. But one place where federal laws will have an impact: college campuses.

"In order not to lose federal funds, we need to comply with federal law," University of Colorado at Boulder spokeswoman Malinda Hiller-Huey told The Denver Post.

College students on campuses across the state will be issued criminal tickets if they are found with marijuana, The Post reported. Off-campus, however, students of legal age will be able to grow and use small amounts of marijuana, per the new amendment, according to the University of Colorado.

While Colorado's new weed measure doesn't have any provisions about driving under the influence built into it, Washington state will have a zero-tolerance policy.

"We've had decades of studies and experience with alcohol," Washington State Patrol spokesman Dan Coon told The Associated Press. "Marijuana is new, so it's going to take some time to figure out how the courts and prosecutors are going to handle it. But the key is impairment: We will arrest drivers who drive impaired, whether it be drugs or alcohol."

It's unclear whether the Justice Department will try to stop the decriminalization of pot in Washington and Colorado. The laws in both states allow adults 21 and older to possess a small amount of marijuana, which will be sold in state-licensed stores and taxed heavily, potentially bringing in hundreds of millions of dollars a year for school, health care and government needs.

Before the vote passed in his state, Colorado Gov. John Hickenlooper acknowledged the legal challenges his state would face. 

"It's probably going to pass, but it's still illegal on a federal basis. If we can't make it legal here because of federal laws, we certainly want to decriminalize it,” he told NBC’s Brian Williams.

Seventeen states and the District of Columbia already have laws allowing for the medical use of marijuana, according to the National Council of Legislatures. The measures in Washington and Colorado go a step further, explicitly allowing people to smoke pot for more than just medicinal purposes.

NBC News' Pete Williams, Isolde Raftery and Jim Seida contributed to this report.

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Brennan Linsley / AP

People celebrate in a Denver bar after a local television station announced the passage of Colorado's marijuana amendment on Tuesday, Nov. 6, 2012.

Colorado’s governor has a message for those excited by the decriminalization of marijuana in his state: “Don’t break out the Cheetos.”

The reason is that marijuana is still a controlled substance under federal law, raising all sorts off issues for how Colorado and Washington, the other state where voters decriminalized the recreational use of marijuana Tuesday, will implement their initiatives.

“The voters have spoken and we have to respect their will,” Colorado Gov. John Hickenlooper (D) said after the vote. “This will be a complicated process, but we intend to follow through. That said, federal law still says marijuana is an illegal drug, so don’t break out the Cheetos or goldfish too quickly.”

In both states, adults aged 21 and older will be allowed to possess a small amount of marijuana, which will be sold in only state-licensed stores where it will be heavily taxed. For the most part, pot could not be consumed in public. In Colorado, the amendment also allows people to grow a few plants at home.

Dr. Kevin A. Sabet, former senior drug policy advisor to the Obama administration and director of the Drug Policy Institute at the University of Florida, suggests these results could portend a growing weed war between the feds and the states.

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“Once these states actually try to implement these laws, we will see an effort by the feds to shut it down,” Sabet said. “We can only guess now what exactly that would look like, but the recent U.S. attorney actions against medical marijuana portends an aggressive effort to stop state-sponsored growing and selling at the outset.” 

The texts of each initiative -- Amendment 64 in Colorado and Initiative Measure 502 in Washington -- make clear that the elimination of penalties for possessing up to an ounce of marijuana if you are 21 or older takes effect after 30 days, once the election results are certified. But the provisions allowing commercial production and sale of cannabis for recreational use require regulations that will be written during the next year in both states.

The Justice Department has so far declined to discuss how the initiatives might function under federal law. Late Tuesday, a spokesman said in an e-mail to NBC News that they were reviewing the Colorado initiative and had no immediate comment.

Sue Ogrocki / AP file

"Don't break out the Cheetos or gold fish too quickly," Colorado Gov. John Hickenlooper (D) said after the marijuana initiative was passed in the state Tuesday.

Obama has cracked down harder on medical marijuana than any president to come before him, argues Rob Kampia, the executive director of the Marijuana Policy Project. In the 17 states where medical marijuana is legal, U.S. attorneys have enlisted the Drug Enforcement Agency and the Internal Revenue Service to take down hundreds of pot shops in just a few short years, Reuters reported.

Three states weighed in on medical marijuana Tuesday with mixed results. Massachusetts voters approved an initiative allowing people to use marijuana for medicinal purposes. In Arkansas, a similar initiative failed. In Montana, voters approved a plan to revamp an existing medicinal marijuana law to make it more restrictive.

Former DEA Chief Peter Bensinger, an outspoken opponent of marijuana legalization, said legalization would lead to an increase in crime and threaten public safety.

“You’ll lose productivity, you’ll have accidents on the highway, you’ll have absenteeism, and you’ll really have a much more weakened society if you have widespread use of marijuana,” Bensinger said.

Still, proponents argue it’s about time pot was made legal and that the war on weed hasn't worked. 

“The violence associated with it has become greater, use rates have gone up, the respect toward law enforcement has gone down so the government isn’t achieving any of its stated goals," legalization advocate Allen St. Pierre said. 

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Marijuana-legalization backers believe they’re well schooled on all things leafy – from cannabis to political tea leaves. With pro-pot measures leading in recent polls in Washington and Colorado, proponents don’t foresee federal agents interceding in those states if voters approve the initiatives.

Their rationale: Two years ago, when California voters considered a similar proposal to legalize the adult possession of an ounce or less of pot, U.S. Attorney General Eric Holder publicly vowed the feds would continue to prosecute anyone in that state caught possessing marijuana — even if the law passed. It failed.

This year, in contrast, federal anti-drug authorities have repeatedly declined to discuss decriminalization proposals in three states — including a measure in Oregon that would end the prohibition of marijuana there. (That initiative trailed in recent polls.) The response routinely delivered by U.S. Department of Justice spokeswoman Allison Price, including in an e-mail to NBC News: “We are not going to speculate on the outcome of the various ballot initiatives in each of the states.”

“That, to me, is significant because they didn’t just copy and paste what they did and said in 2010. We feel pretty good about that,” said Alison Holcomb, campaign director for Washington’s Initiative 502, which seeks to regulate and tax marijuana production and distribution in that state. According to a poll released Thursday, Initiative 502 had the support of 55 percent of Washington voters.

But Dr. Kevin A. Sabet, former senior drug policy advisor to the Obama Administration and director of the Drug Policy Institute at the University of Florida, predicts a far different law-enforcement reality on the ground in Washington — as well as in Colorado, where Amendment 64 would allow the state to regulate marijuana as it does alcohol.

“Once these states actually try to implement these laws, we will see an effort by the feds to shut it down,” Sabet said.

Sabet’s vision of post-election pot realities in Washington and Colorado — where Amendment 64 has majority support, according to a recent poll — seems to suggest a possible weed war between the feds and the states.

“We can only guess now what exactly that would look like,” Sabet said. “But the recent U.S. Attorney actions against medical marijuana portends an aggressive effort to stop state-sponsored growing and selling at the outset.” (That includes, he said, letters sent by federal prosecutors last January to medical marijuana dispensaries in Colorado operating within 1,000 feet of schools, ordering those businesses to halt sales.)

“The question voters should be asking themselves,” Sabet said, “before voting on these initiatives is this: Is your right to buy pot from a store down the street worth the risk of increased teenage drug abuse, increased enforcement action by the feds, and increased problems like 'stoned driving?’ "

Whether a legal showdown is ignited or not, some state-legalization proponents see their measures as possible footholds in a march toward national marijuana decriminalization.

“Exactly 80 year ago, Colorado voters approved a ballot measure to appeal alcohol prohibition, and that came prior to it being repealed by the federal government,” said Mason Tvert, co-director of the Yes on 64 campaign in Colorado, a state that already regulates the sale of medical marijuana. “And it was the individual states taking that type of action that ultimately resulted in the federal (Prohibition) repeal.

“The same kind of thing is underway with marijuana,” he added. “Whether there’s going to be a critical mass, who knows?”

In Washington, Holcomb echoed that uncertainty: "I'm not sure how that’s going to play out.”

“It may be there’s going to some generational evolution on this. Medical marijuana was introduced in the mid-90s and we were still talking to a lot of people that were coming out of the ‘Reefer Madness’ era, who had a lot of fear. And (medical marijuana) was a really powerful way to help them see that marijuana is not this terribly scary thing that they had been told,” Holcomb said.

Indeed, the most recent poll on Colorado’s Amendment 64 found that 73 percent of state state’s residents who are under age 30 want pot legalized. At the same time, more than half of seniors are against decriminalizing marijuana.

Anti-drug watchdog Sabet, meanwhile, sides with most current political leaders — “the overwhelming majority of Congress (and) both major presidential candidates” — as well as the American Medical Association standing against the decriminalizing of marijuana: “I don't envision national legalization as a realistic possibility in the near future.”

“The state-level efforts could soon prove to be a tipping point for more aggressive legalization initiatives,” Sabet said. “However, there is a growing consensus within the medical and treatment community — who deal with the problems of marijuana use and addiction everyday — to reject both extreme prohibition and lax legalization. I think we'll end up with a policy that is more centrist, for example, not punishing people by barring them from a job for a past marijuana arrest, but also not allowing marijuana to be marketed and sold like alcohol or cigarettes.”

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The Justice Department announced a settlement agreement Thursday in a Philadelphia-area racial discrimination case dating back to June 2009.

During that summer, Creative Steps Day Camp of Northeast Philadelphia paid The Valley Swim Club in Huntingdon Valley for pool access for summer campers. After their first day of swimming, the camp's money was refunded and campers were told not to return.

Several campers claimed they heard pool members making racial comments while they were at the club.

The settlement agreement for $1.1 million is to be split among the 73 African-Americans involved in the case.

See the original story at NBCPhiladelphia.com | More from NBCPhiladelphia.com

At the time, Valley Swim Club officials said race had nothing to do with it and that there were too many children for the lifeguards on duty.

nbcphiladelphia.com

The former Valley Swim Club in Huntingdon Valley, Penn.

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The Justice Department spent months investigating along with the Pennsylvania Human Relations Commission and found it was racial hostility that prompted club members to ban the African-American children from the pool.

The Valley Swim Club filed for bankruptcy in November 2009. It was sold in June 2010 for $1.46 million.

According to the settlement, $65,000 will be set aside from the proceeds of the property sale to create a diversity leadership council between members of Creative Steps Day Camp and former Valley Club members. The council will work together to provide activities between the groups to include swimming, field trips and camps.

The settlement agreement is awaiting approval from the Bankruptcy Court for the Eastern District of Pennsylvania. It's already been approved by a District Court judge.

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“This settlement provides significant opportunity to children who were denied an opportunity based on their skin color,” said JoAnn Edwards, executive director of the Pennsylvania Human Relations Commission, in a release issued Thursday. “Our hope is that this case serves as prevention for years to come and a reminder that discrimination is illegal and has no place in Pennsylvania.”

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WASHINGTON -- A federal grand jury has indicted two men, one from Iran and the other from China, on charges of conspiring to send materials from the United States to Iran for the purpose of enriching uranium, the U.S. Justice Department said on Friday.

Using a Chinese company as a go-between to avoid trade sanctions, the men tried for three years to obtain U.S. materials, such as high-strength steel, that could be used in an Iranian nuclear program, the department said.

Iranian citizen Parviz Khaki was arrested in May in the Philippines, while the other man, Zongcheng Yi of China, remains at large, the department said.

The two men succeeded in illegally exporting lathes and nickel-alloy wire from the United States to China and then to Iran around June 2009, according to the indictment filed by the Justice Department.

It said the men purchased the materials from U.S. companies without divulging the ultimate destination. They also did not have export licenses required for shipments to countries such as Iran that are under U.S. sanctions.

Other attempts to obtain materials failed, the indictment says.

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Khaki allegedly began talking with an undercover U.S. federal agent in 2009, including in e-mails in which he tried to acquire radioactive source material. The e-mails continued into 2011, the indictment says.

Lisa Monaco, assistant attorney general for national security, said the indictment "sheds light on the reach of Iran's illegal procurement networks and the importance of keeping U.S. nuclear-related materials from being exploited by Iran."

"Iranian procurement networks continue to target U.S. and Western companies for technology acquisition by using fraud, front companies and middlemen in nations around the globe," Monaco said in a statement.

The 24-page indictment was handed up by a grand jury in Washington on Thursday and released on Friday. It does not name the U.S. companies that Khaki and Yi allegedly approached.

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Federal authorities say they’ve busted a secret online market that sold illegal drugs to some 3,000 customers in 34 countries.

Eight people have been arrested in connection with the operation, known as the "Farmer’s Market," according to a statement from the U.S. Attorney’s Office in Los Angeles.

The arrests and charges, unsealed on Monday, are the result of a two-year investigation, dubbed "Operation Adam Bomb," into the online sale and distribution of narcotics, according to the indictment. The market allegedly acted as a sort of go-between for suppliers of illegal drugs and customers.

The website operators allegedly received a commission for online sales based on the value of the order for such drugs as LSD, MDMA (ecstasy), fentanyl, mescaline, ketamine, DMT, and high-grade marijuana.

A key feature was that suppliers and customers could supposedly stay anonymous.

The investigation was led by federal drug agents in Los Angeles with assistance from drug agents in Europe and Latin America.

"The drug trafficking organization targeted in Operation Adam Bomb was distributing dangerous and addictive drugs to every corner of the world, and trying to hide their activities through the use of advanced anonymizing on-line technology," DEA agent Briane Grey said in a statement. 

Two of the suspects arrested were overseas. They included the alleged leader of the enterprise, Mac Willems, 42, who was arrested at his home in Lelystad, Netherlands, and Michael Evron, 42, a U.S. citizen living in Argentina who was arrested in Bogota, Colombia.

Six were taken into custody in the United States. They were identified as Jonathan Colbeck, 51, of Urbana, Iowa; Brian Colbeck, 47, of Coldwater, Mich.; Ryan Rawls, 31, of Alpharetta, Ga.; Jonathan Dugan, 27, of North Babylon, N.Y.; George Matzek, 20, of Secaucus, N.J.; and Charles Bigras, 37, of Melbourne, Fla.

The 12-count indictment charges all eight with conspiracy to distribute controlled substances and money laundering conspiracy. Some of the men also are charged with distributing LSD and taking part in a continuing criminal enterprise.

All could face a maximum sentence of life in prison if convicted of conspiracy.

According to the indictment, the drug website employed a special network of encrypted connections – called the Tor network -- that masks websites and email connections so they couldn’t be detected.

According to the Tor Project website, the free software and open network helps users defend against surveillance and traffic analysis that "threatens personal freedom and privacy, confidential business activities and relationships."

According to The Associated Press, Tor has its origins in a U.S. Naval Research Laboratory project aimed at protecting government communications.

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SACRAMENTO, Calif. -- Democratic campaign treasurer Kinde Durkee defrauded at least 50 candidates, officeholders and political organizations out of $7 million in a scheme that dates back more than a decade, according to a court filing made Tuesday by federal prosecutors.

The U.S. attorney's office in Sacramento filed the additional charges in federal court, providing the most detailed account to date in a case that has left some Democratic candidates scrambling for campaign cash in an election year.

Such filings typically are a prelude to a plea, but prosecutors would not confirm such a development or offer any further details.

Durkee, who heads Durkee & Associates in Burbank, was arrested in September and charged with suspicion of mail fraud after millions of dollars disappeared from the campaign accounts of U.S. Sen. Dianne Feinstein, other Democratic members of Congress and several Democratic state lawmakers.

The filing details a complex shell game in which Durkee shifted campaign money to cover an array of personal and business expenses.

Disneyland bills
In one example, $23,000 taken from Feinstein's account was used to help pay American Express credit card charges from the Los Angeles Dodgers, Amazon.com, Disneyland, Trader Joe's and Turners Outdoorsman.

Other misappropriations from Feinstein's account covered payments for a Long Beach condominium owned by Durkee and to the 401(k) plan for her employees.

The court filing said Durkee had devised a scheme from January 2000 until she was arrested last September "to defraud clients of Durkee & Associates, and to obtain money from them by means of materially false and fraudulent pretenses, representations and promises."

It said she had signature control over roughly 700 bank accounts, including those used by political campaigns.

Durkee's attorney, Daniel Nixon, did not return telephone and email messages Tuesday evening.

Durkee was scheduled to appear in court Friday afternoon at a hearing that had been set before Tuesday's developments.

She has been accused of looting the accounts of dozens of Democratic officeholders, candidates and political organizations. Prosecutors also say Durkee filed false information with the Federal Election Commission and the California Secretary of State, which track campaign contributions and expenditures.

Feinstein alone estimated that she may have lost $5 million, but there has been no firm accounting of the losses because the money has been so difficult to track.

The fraud investigation froze the coffers of dozens of Democratic politicians across the state of California during an election year, and left candidates scrambling to raise more money.

In a separate order filed Monday, the U.S. attorney's office and Durkee agreed to a forfeiture auction of her Burbank home, which it says she owns with her husband, John Forgy. The couple owes $671,000 on the house, as well as $17,471 in state tax liens, according to the filing.

The Associated Press and Reuters contributed to this report.

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Laura Segall / Reuters

Maricopa County Sheriff Joe Arpaio talks to the media Thursday about the Department of Justice's accusations of racial profiling and a pattern of discrimination at by his office.

Updated 10:05 p.m. ET

PHOENIX -- Sheriff Joe Arpaio said a scathing U.S. Justice Department report about his office's law enforcement tactics against Latinos marks "a sad day for America as a whole."

Billed as America's toughest sheriff, Arpaio struck a defiant tone at a Thursday afternoon news conference in response to the report, which he called a politically motivated attack by the Obama administration that will make Arizona unsafe.

"Don't come here and use me as the whipping boy for a national and international problem," he said.

The report released Thursday said that Arpaio's office carried out a blatant pattern of discrimination against Latinos.

(Read the full Department of Justice letter here.)

The report said Arpaio's office also held a "systematic disregard" for the Constitution amid a series of immigration crackdowns that have turned the lawman into a prominent national political figure. As a result, the Department of Homeland Security on Thursday cut ties with the Maricopa County sheriff's office that allowed trained deputies to enforce immigration laws. Homeland Security also will restrict the sheriff's office use of the Secure Communities program, which uses fingerprints collected in local jails to identify illegal immigrants.

"Illegal criminal offenders will go undetected and be dumped back out on the street near you, and for that you can thank your federal government," Arpaio said.

But a senior Department of Homeland Security official maintains that any criminal offender found to be in the country illegally will still be detained, just not in the Maricopa County Jail. Instead, according to the official, those individuals will now be held in federal facilities, not released back into the public.

Arpaio faces a Jan. 4 deadline for saying whether he wants to work out an agreement with the Justice Department to make changes ending discrimination. If not, the federal government will sue him, possibly putting in jeopardy millions of dollars in federal funding for Maricopa County.

"We are going to cooperate the best we can. And if they are not happy, I guess they can carry out their threat and go to federal court," Arpaio said.

The Associated Press contributed to this report.

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Updated at 5 p.m. EST

The U.S. government said Thursday that the man who called himself the toughest sheriff in America ran an office that has committed wide-ranging civil rights violations against Latinos, including a pattern of racial profiling and heavy-handed immigration patrols based on racially charged complaints.

The U.S. Justice Department's expert on measuring racial profiling called it the most egregious case he has seen, the department's civil rights division chief told reporters.

The scathing report on Maricopa County Sheriff Joe Arpaio, obtained by The Associated Press ahead of its release, marks the federal government's harshest rebuke of a man who rose to national prominence for his immigration crackdowns. Republican presidential candidates have competed for his endorsement.

Ross D. Franklin / AP

Maricopa County, Ariz., Sheriff Joe Arpaio is accused by the Department of Justice of committing wide range of civil rights violations against Latinos.

(Read the full Department of Justice letter here.)

Arpaio has long denied the racial profiling allegation. His office did not immediately respond Thursday to requests for comment.

After the report was released, the Department of Homeland Security announced it would cut ties with Arpaio.

Secretary Janet Napolitano, formerly Arizona's governor, said the department is ending an agreement with the Maricopa County sheriff's office that allowed trained deputies to enforce immigration laws. It's also restricting the office's use of the Secure Communities program, which uses fingerprints collected in local jails to identify illegal immigrants.

Arpaio, 79, has built his reputation on jailing inmates in tents and dressing them in pink underwear, selling himself to voters as unceasingly tough on crime and pushing the bounds of how far local police can go to confront illegal immigration.

Apart from the civil rights investigation, a federal grand jury has been investigating Arpaio's office on criminal abuse-of-power allegations since at least December 2009. His department allegedly has misspent county money and failed to adequately investigate more than 400 sexual-abuse cases, many involving illegal immigrants, The New York Times reported.

The civil rights report will require Arpaio to set up effective policies against discrimination that a judge would monitor for compliance. Arpaio faces a Jan. 4 deadline for saying whether he wants to work out an agreement. If not, the federal government will sue him and let a judge decide the complaint.

In a press conference Thursday, Thomas Perez, the head of the U.S. Justice Department's civil rights division, said the department's expert on measuring racial profiling called the case the most egregious case of racial profiling in the country that he has seen or reviewed in professional literature.

The civil rights report criticized the sheriff's office for launching immigration patrols, known as "sweeps," based on complaints that Latinos were merely gathering near a business without committing crimes.

Mark Ralston / Getty Images

An illegal immigrant is processed by deputies working for Maricopa County Sheriff Joe Arpaio, after an operational sweep in Phoenix on July 29, 2010.

The report said Latinos are four to nine times more likely to be stopped in traffic stops in Maricopa County than non-Latinos. Deputies on the immigrant-smuggling squad stop and arrest Latino drivers without good cause, the investigation found.

A review found that 20 percent of traffic reports handled by Arpaio's immigrant-smuggling squad from March 2006 to March 2009 were stops — almost all involving Latino drivers — that were done without reasonable suspicion. The stops rarely led to smuggling arrests.

Latinos who were in the U.S. legally were arrested or detained without cause during the sweeps, according to the report.

Illegal immigrants accounted for 57 percent of the 1,500 people arrested in the 20 sweeps conducted since January 2008, according to figures provided by Arpaio's office.

The civil rights report also found that police supervisors often used county accounts to send emails that demeaned Latinos to colleagues. One email had a photo of a mock driver's license for a fictional state called "Mexifornia."

Federal investigators also focused heavily on the language barriers in Arpaio's jails.

Latino inmates with limited English skills were punished for failing to understand commands in English by being put in solitary confinement for up to 23 hours a day.

Detention officers refused to accept forms requesting basic daily services and reporting mistreatment when the documents were completed in Spanish, and they pressured Latinos with limited English skills to sign forms that implicated their legal rights without language assistance.

Arpaio, one of Arizona's leading Republicans, recently endorsed Texas Gov. Rick Perry's bid for the GOP presidential nomination.

"I don't know what all the details are, but I do know this, that nothing surprises me out of this administration," Perry said Thursday on Fox News. "This administration oversaw "Fast and Furious," a sting operation in which illegally obtained weapons were allowed across the border into Mexico in an effort to find drug cartel leaders.

"I would suggest to you that these people are out after Sheriff Joe," Perry said. "He is tough. And again, when I'm the president of the United States you're not going to see me going out after states like Arizona or Alabama suing sovereign states for making decisions particularly because the federal government has been abject failure at securing the border.

Rey Torres, president of the Arizona Latino Republican Association, told msnbc.com that his group declared a “vehement rejection of everything” in the Justice Department report.

He called Arpaio a needed “soldier in the fight to keep Arizona citizens safe from violence perpetrated along immigration corridors due to the federal government’s unwillingness to enforce immigration law in this region or any others.”

“It would be more interesting if [U.S. Attorney General Eric] Holder held himself up to the same legal scrutiny and once and for all revealed who is responsible for “Fast and Furious” rather than push these trumped up charges of racial profiling that distract from the issue.

The Arizona Democratic Party on Thursday, said, "It's hard to imagine a public official who more embodies corruption, waste and arrogance than Sheriff Joe Arpaio. We welcome the Justice Department's full attention to this case and hope it helps mainstream Arizona move on from Arpaio's extremism and embrace a new era of responsible leadership."

The Associated Press and msnbc.com's Jim Gold contributed to this report.

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