Central District of California
Press releases recorded for this federal judicial district.
South L.A. Man Sentenced to 4 Years in Federal Prison for Illegal Firearms Sales, Including ‘Ghost Guns’Read the Press Release
LOS ANGELES – A South Los Angeles man was sentenced today to 48 months in federal prison for participating in a scheme in which he and others illegally sold more than two dozen firearms – including “ghost guns,” firearms that lack serial numbers – and three silencers.
Jonathan Perez, 35, was sentenced by United States District Judge John A. Kronstadt.
After a three-day bench trial in August 2023, Judge Kronstadt found Perez guilty the following month of one count of conspiracy to engage in the business of dealing in firearms without a license, one count of engaging in the business of dealing in firearms without a license, and one count of possessing an unregistered firearm silencer.
Perez and his co-conspirators sold 22 guns and three firearm silencers over the course of seven transactions to a confidential informant. In a text to an associate that was introduced as evidence in the trial, Perez said he was “selling straps to the cartel.” Perez personally manufactured many of the 18 “ghost guns” that were sold to the informant during the transactions in 2017.
“[Perez] made a business out of manufacturing and selling firearms, and he did so without any concern for where the firearms might end up, what they may be used for, or who might get hurt,” prosecutors argued in a sentencing memorandum.
Two other defendants in this case pleaded guilty in 2018 and 2021 to separate charges stemming from a related narcotics conspiracy.
The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated this matter.
Assistant United States Attorney Declan T. Conroy of the International Narcotics, Money Laundering, and Racketeering Section and Assistant United States Attorney Maria Jhai of the Violent and Organized Crime Section prosecuted this case.
Two Inland Empire Men Indicted for Alleged Marijuana Dispensary Robbery in Which Firearm Barrel Was Pressed Against Victim’s HeadRead the Press Release
RIVERSIDE, California – Two Inland Empire men were indicted today by a federal grand jury for allegedly robbing of a San Bernardino marijuana dispensary at gunpoint, a crime in which one of them pressed the barrel of his pistol to the head of a store employee lying face down on the floor.
Tyrie Ravon Contreras, 32, of Barstow, and Kenyon Lamonte Watson, 19, of Perris, are charged with one count of interference with commerce by robbery (Hobbs Act), one count of Hobbs Act conspiracy, and one count of using of a firearm in furtherance of a crime of violence. Contreras also is charged with one count of being a felon in possession of a firearm.
“We must send a message of zero-tolerance for violent gun crime,” said United States Attorney Martin Estrada. “Under federal law, we have powerful tools to hold accountable those who use firearms to rob businesses and my office will continue to work with our law enforcement partners to bring gun criminals to justice.”
According to the four-count indictment returned today and other court documents, on August 9, three masked suspects robbed a marijuana dispensary in San Bernardino. Contreras and an accomplice – both armed – entered the store’s main showroom and ordered three employees behind the counter to the ground. Contreras then climbed over a glass display case and pressed the barrel of his pistol to the head of one of the employees, who at that point was lying on the floor with her face down.
While inside the store, Contreras, Watson, and an accomplice stole cannabis, marijuana products, and approximately $500 in cash, all belonging to the store. The robbers then fled the dispensary, loading the store’s safe and stolen merchandise into the back seat of Watson’s white BMW sports sedan.
Two weeks later, police arrested Contreras following a home invasion robbery and lengthy vehicle pursuit, which ended with Contreras crashing the victim’s stolen vehicle, according to court documents. Contreras fled on foot and tossed a backpack before being apprehended. Police found a .40-caliber firearm in the backpack. Both the firearm and the backpack matched those on surveillance video in Contreras’ possession during the August 9 dispensary robbery, as did the trousers Contreras wore during the robbery. Contreras is in state custody.
Contreras is not legally permitted to possess a firearm because his criminal history includes several felony convictions, including one in San Bernardino County Superior Court in June 2018 for second-degree robbery.
Watson was arrested on September 12 and was ordered jailed without bond. Watson’s arraignment is scheduled for October 1 in U.S. District Court in Riverside.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
If convicted of all charges, each defendant would face a statutory maximum sentence of life in federal prison.
Operation Safe Cities establishes strategic enforcement priorities with an emphasis on prosecuting the most significant drivers of violent crime. Across this region, the most damaging and horrific crimes are committed by a relatively small number of particularly violent individuals. This strategic enforcement approach is expected to increase the number of arrests, prosecutions and convictions of recidivists engaged in the most dangerous conduct. It is designed to improve public safety across the region by targeting crimes involving illicit guns, prohibited persons possessing firearms, or robbery crews that cause havoc and extensive losses to retail establishments.
The Bureau of Alcohol, Tobacco, Firearms and Explosives and the San Bernardino Police Department are investigating this matter.
Assistant United States Attorney Peter H. Dahlquist of the Riverside Branch Office is prosecuting this case.
Former President of Beverly Hills-Based Publisher Found Guilty of Embezzling at Least $1.3 Million from Company and Its OwnerRead the Press Release
LOS ANGELES – A Ventura County woman has been found guilty by a jury of defrauding a Beverly Hills-based independent publishing company and its owner by embezzling at least $1.3 million from the company and the owner’s personal bank account over several years for her own personal expenses, including spa treatment, veterinary bills, and designer handbags.
Kimberly Ann Miletta, 51, of Ventura, was found guilty late Monday of three counts of wire fraud.
According to evidence presented at a five-day trial, from 2009 to 2018, Miletta was president of Phoenix Books, an independent book and audio publisher owned by a victim identified in court documents as “J.O.” As the president of Phoenix Books, Miletta had full control over the business, including its finances, but she only was authorized to use company funds to pay for legitimate business expenses.
From October 2013 to January 2018, Miletta embezzled hundreds of thousands of dollars by using the company credit card – over which she had exclusive control – to pay for personal items, and then paid for the credit card bills out of the company’s owner’s personal bank account.
Miletta used the company credit card to pay for, among other things, personal spa treatments, designer handbags, high-end clothing, a multi-thousand-dollar mattress, and years’ worth of veterinary bills and pet products for her cats. Miletta fraudulently charged more than $185,000 worth of purchases at clothing and department stores to the company credit card. Miletta also made a fraudulent wire transfer out of the personal account of the company’s owner of nearly $1 million, which Miletta used to buy an ocean-view home in Ventura.
The jury found Miletta not guilty of two additional counts of wire fraud.
United States District Judge Maame Ewusi-Mensah Frimpong scheduled a January 10, 2025, sentencing hearing, at which time Miletta will face a statutory maximum sentence of 20 years in federal prison for each count.
The FBI investigated this matter.
Assistant United States Attorneys Jenna G. Williams of the Corporate and Securities Fraud Strike Force and Declan T. Conroy of the International Narcotics, Money Laundering, and Racketeering Section are prosecuting this case.
Romanian Man Sentenced to 5 Years in Federal Prison for Stealing Identities to Fraudulently Obtain Public Assistance FundsRead the Press Release
SANTA ANA, California – A one-time Orange County man who is one of Romania’s most notorious criminals was sentenced today to 60 months in federal prison for stealing victims’ identities to withdraw money from their public-assistance accounts without their permission.
Florin Duduianu, 39, whose last known residence was in Mission Viejo, was sentenced by United States District Judge John W. Holcomb, who also ordered him to pay $1,850 in restitution.
Duduianu pleaded guilty on January 5 to three counts of bank fraud and unlawful use of unauthorized access devices. After a two-day bench trial, Judge Holcomb on January 23 found Duduianu guilty of two counts of aggravated identity theft.
“This defendant came to our country to victimize the neediest members of our society,” said United States Attorney Martin Estrada. “Our nation is not a piggy bank for foreign criminals, and those who think they can take advantage of our liberties to harm our people are sorely mistaken.”
“Duduianu stole money which was meant to serve as a critical lifeline to those most in need,” said Akil Davis, the Assistant Director in Charge of the FBI Los Angeles Field Office. “It was a serious offense, and the FBI remains committed to working with our law enforcement partners across the globe to identify fraudsters like this defendant and hold them fully accountable for their crimes.”
In August 2023, law enforcement was conducting an operation to combat Electronic Benefits Transfer (EBT) fraud at various banks and ATMs in Placentia. Police saw Duduianu, accompanied by a passenger, drive up to a Wells Fargo ATM and make multiple withdrawals on different cards. Based on this information, officers pulled Duduianu over. Duduianu lied to the officers, telling them he was depositing, not withdrawing, money from the ATM.
During a search of Duduianu’s passenger, officers found four Visa gift cards, three Wells Fargo ATM receipts, and $1,850 in cash. The Visa gift cards were encoded with EBT card numbers. Those numbers were run through an EBT database, which showed that they belonged to four different people. Based on the Wells Fargo receipts, Duduianu used two of the cards to make three withdrawals totaling $1,850 from the ATM.
The FBI contacted the accountholders for the two EBT accounts from which Duduianu made withdrawals. The accountholders said that they did not know Duduianu or his car passenger and did not give permission to anyone to withdraw funds from their accounts.
During a search of Duduianu’s cellphone, law enforcement found dozens of photos and videos related to ATM skimming as well as tools and techniques used to skim EBT information. Law enforcement also found photos of large sums of cash and hundreds of EBT numbers from multiple states. In the chat history of Duduianu’s phone, the government found an article about EBT fraud that was sent from his phone to four other phone numbers.
On another smartphone law enforcement recovered during Duduianu’s arrest, law enforcement found additional videos related to ATM skimming. Phone records and EBT records showed that this phone was used to check the balance of the EBT accounts of the victims in this case, five days before Duduianu withdrew $1,850 from those same accounts.
“Until his arrest in this case…Duduianu was one of Romania’s ‘Most Wanted’ criminals and an INTERPOL fugitive,” prosecutors argued in a sentencing memorandum. “He leads the ‘Duduianu Clan,’ an exceptionally violent and influential
organized crime group and was previously convicted of attempted murder. In 2020, [Duduianu] fled Romanian prosecution following charges of robbery and blackmail.”
The FBI and the Placentia Police Department investigated this matter.
Assistant United States Attorneys David Y. Pi of the Major Frauds Section and Diane B. Roldán of the General Crimes Section prosecuted this case.
Former Soldier Sentenced to 2 Years in Prison for Posting Video of Himself Threatening to Kill Personnel at Fort Irwin Army BaseRead the Press Release
RIVERSIDE, California – A Northern California man and former soldier was sentenced today to 24 months in federal prison for posting online videos of himself threatening to kill multiple military personnel at the Fort Irwin army base in San Bernardino County.
Christian Ernest Beyer, 42, of Petaluma, was sentenced by United States District Judge Suzanne S. Sykes.
Beyer pleaded guilty on June 28 to one count of sending threats by interstate communication.
“Mr. Beyer’s desire to carry out violence against members of our military and their families led to a federal prison sentence,” said United States Attorney Martin Estrada. “Our military servicemembers deserve better and we will continue to prosecute those who seek to harm public servants.”
“Today's sentence is a stern reminder that anyone who harms innocent military members and their families will serve jail time,” said Akil Davis, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The FBI's Joint Terrorism Task Force will continue to investigate all threats against those who bravely serve their country.”
According to court documents, in October 2023, Beyer published a video on his personal YouTube page. The video is approximately three minutes in length and contains multiple threats directed at four victims and their families. The victims were specific military personnel at Fort Irwin.
Beyer is an army veteran formerly stationed at Fort Irwin who was court martialed in 2021 for assault.
He has been in federal custody since November 2023.
The FBI investigated this matter as part of its Los Angeles Joint Terrorism Task Force.
Assistant United States Attorney Matt Coe-Odess of the General Crimes Section prosecuted this case.
Irvine Man Pleads Guilty to Scheming to Steal and Resell High-End Violins and to Robbing Irvine Bank Branch Earlier This YearRead the Press Release
SANTA ANA, California – An Orange County man pleaded guilty today to federal criminal charges for orchestrating a scheme to steal high-value violins and robbing a bank in Irvine.
Mark Meng, 58, of Irvine, pleaded guilty to one count of wire fraud and one count of bank robbery.
According to his plea agreement, from August 2020 to April 2023, Meng schemed to steal valuable violins and keep or resell them for his personal gain. Meng – posing as a collector of musical instruments – contacted violin shops across the country to express interest in receiving the violins on loan for a trial period to determine if he wished to buy them. In some cases, he purchased violin bows before asking for the violins on a trial-period basis.
After receiving each violin, Meng negotiated a purchase price for it, kept the instrument beyond the trial period, then provided the violin shops with a check or set of checks for the violin, knowing the whole time the checks he wrote to the violin shops would be rejected due to insufficient funds.
When a violin shop representative contacted Meng to inform him that the shop’s bank had rejected his checks, he sent a new series of checks, which also later were rejected due to insufficient funds. Sometimes, Meng lied to the violin shops by falsely telling them he had mailed the violin back to them, but that they had been lost in the mail. Eventually, Meng stopped communicating with the violin shops.
After fraudulently obtaining the violins, Meng re-sold them to a buyer – often during the trial periods from the violin shops. For example, on February 1, 2023, a victim loaned Meng a Guilio Degani violin – valued at $175,000 – pursuant to a trial-period contract, which required Meng to return or purchase the violin by February 10, 2023. However, Meng sold this violin to a buyer – who was unaware of the violin’s stolen origin.
According to court documents, Meng also stole the following:
- one Lorenzo Ventapane violin, dated 1823, and valued at $175,000;
- one Guilio Degani violin, dated 1903, and valued at $55,000;
- one Caressa & Francais violin, dated 1913, and valued at $40,000;
- one Francais Lott violin bow, stamped “Lupot,” and valued at $7,500;
- one Gand & Bernardel violin, dated 1870, and valued at $60,000;
- one French, Charles J.B. Colin Mezin violin, valued at $6,500; and
- one German, E.H. Roth Guarneri violin, valued at $6,500.
Despite knowing that he did not own these violins and violin bows, Meng sold three of these stolen violins and a violin bow to a victim for a total of $44,700.
In January 2023, Meng emailed one violin shop in Alexandria, Virginia, to express an interest in obtaining the Ventapane violin and the Degani violin on a trial basis, all the while intending to fraudulently obtain then re-sell them.
On April 2, 2024, Meng entered a bank branch in Irvine, wearing a hat, sunglasses, a bandana covering his face, and blue latex gloves. Meng gave the bank teller a note stating “$18,000. - Withdraw. Please. Stay Cool. No harm. Thx.” When the teller told Meng she did not have access to the money he demanded, Meng responded, “Give me whatever you have.” The teller, fearing harm to herself and her coworkers, handed Meng $446.
United States District Judge David O. Carter scheduled a February 24, 2025, sentencing hearing, at which time Meng will face a statutory maximum sentence of 20 years in federal prison for each count. Meng has been in federal custody since May 9.
The FBI’s Art Crime Team investigated this matter, with assistance from the Irvine Police Department and the Glendale Police Department.
Assistant United States Attorneys Laura A. Alexander and Mark A. Williams, both of the Environmental Crimes and Consumer Protection Section, are prosecuting this case.
Honduran Man Charged with Kidnapping and Holding for Ransom Guatemalan National Who Entered the U.S. IllegallyRead the Press Release
RIVERSIDE, California – A Honduran national illegally living in New Mexico has been indicted for allegedly conspiring to kidnap a Guatemalan man who had illegally entered the United States and then demanded ransom from the victim’s family living in Southern California, the Justice Department announced today.
Darwin Jeovany Palma Pastrana, 30, of Albuquerque, New Mexico, is charged with one count of conspiracy, one count of kidnapping, one count of interstate communication containing a demand or request for ransom, and one count of making a threat by interstate communication.
Palma, whom federal authorities arrested in New Mexico on August 21, was arraigned Friday afternoon in United States District Court in Riverside. He pleaded not guilty to the charges against him, and a November 5 trial date was scheduled. He remains jailed without bond.
According to an indictment that a federal grand jury returned on September 4, Palma and co-defendant Eduar Isrrael Sauceda Nuñez, 25, another Honduran national illegally living in Albuquerque, New Mexico, conspired with others to kidnap and hold for ransom migrants illegally crossing the U.S.-Mexico border. Once the migrants were in the U.S., they were driven to stash houses in Phoenix, El Paso, Texas, and Albuquerque, New Mexico. Once at these locations, the migrants’ cellphones were seized and were not returned to them. At one stash house in Albuquerque, 57 migrants were located.
Palma and his accomplices lived near the stash houses and kept large sums of cash and firearms available. Sauceda and other co-conspirators drove migrants to various locations, including Los Angeles, to reunite them with their family and friends.
Specifically, on April 1, Palma told Sauceda that one victim, a Guatemalan national who had entered the U.S. illegally from Mexico, that he had to pay $1,500 before being released to his family. Sauceda then ordered the victim to contact a family member to meeting a Jack in the Box restaurant parking lot in Norwalk. At this parking lot meeting, Sauceda locked the victim inside the car and demanded a $1,500 ransom payment from the victim’s relative before driving away with the victim inside the car.
Later that day, Palma contacted the victim’s relative and said unless $1,500 was paid, the victim would be returned to Mexico and Palma suggested the victim would be killed there. Sauceda then returned to the Jack in the Box parking lot, believing the victim’s relative would pay the ransom. Instead, law enforcement was nearby and later pulled over and arrested Sauceda. As he was being pulled over, Sauceda placed approximately $9,290 in cash, as well as receipts memorializing money transfers to individuals outside of the United States, in the center console of his car before he was arrested. On April 2, Palma sent messages via WhatsApp to the victim’s relative, threatening to kill her.
In April and May of 2024, Palma’s cellphone was present near the Albuquerque stash house, where he drove a yellow school bus with a non-resident permit issued to him to and from the location.
On May 20, when law enforcement approached the Albuquerque stash house to investigate a kidnapping complaint, one co-conspirator drove up to the house and appeared to point at officers while another conspirator fired multiple gunshots in the vicinity of the home.
On May 21, a yellow school bus registered to Palma was parked at the Albuquerque house when law enforcement found 57 undocumented migrants being detained there.
Sauceda, who is a fugitive, is charged with one count of conspiracy, one count of kidnapping, one count of one count of interstate communication containing a demand or request for ransom, and one count of transportation of aliens within the United States for private financial gain.
“These defendants allegedly helped to smuggle migrants and then take advantage of them by demanding ransom from the victims’ families to secure their release,” said United States Attorney Martin Estrada. “We will use our powerful tools to hold accountable those who use violence to profit off of vulnerable victims.”
“Everyone in this country who is a victim of a serious crime is protected by U.S. law and this case is no exception,” said Akil Davis, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The exploitation of vulnerable individuals and their families will be fully investigated by the FBI and its law enforcement partners. Eduar Isrrael Sauceda Nuñez is still wanted for this crime, and we ask that anyone with information as to his whereabouts to contact the FBI or the nearest U.S. Embassy or Consulate.”
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
If convicted, Palma and Sauceda would face a statutory maximum sentence of life in federal prison.
This matter was investigated by the FBI’s San Gabriel Valley Safe Streets Task Force (SGVSSTF), which is comprised of agents and officers with the FBI, the Los Angeles County Sheriff’s Department – Major Crimes Bureau/Prison Gang Unit and Custody Investigative Services/Operation Safe Jails, the Pomona Police Department, the El Monte Police Department, the Drug Enforcement Administration and the California Department of Corrections and Rehabilitation (CDCR). The Pomona Police Department is the sponsoring agency of the SGVSSTF and has been the headquarters for the task force since its inception in 2008.
Assistant United States Attorney Sara B. Vargas of the Violent and Organized Crime Section is prosecuting this case.
Rancho Cucamonga Man and Woman Found Guilty of Federal Criminal Charges in Connection with ‘Birth Tourism’ SchemeRead the Press Release
LOS ANGELES – Two San Bernardino County residents were found guilty by a jury today of operating a “birth tourism” scheme that charged Chinese clients tens of thousands of dollars to help them give birth in the United States to obtain birthright U.S. citizenship for their children.
Michael Wei Yueh Liu (刘维岳), 59, of Rancho Cucamonga, and Jing Dong, (董晶), 47, also of Rancho Cucamonga, were found guilty of one count of conspiracy and 10 counts of international money laundering.
According to evidence presented at a four-day trial, from at least January 2012 to March 2015, Liu and Dong ran a maternity house in Rancho Cucamonga. Liu and Dong rented apartment units in Southern California to provide short-term housing and provided other services to pregnant women from China who traveled to the United States to give birth so their children would acquire U.S. citizenship. Typically, within one or two months after giving birth, the women returned to China.
Among the services Liu and Dong provided was assistance on how to obtain visas to enter the United States, customs entry guidance, housing, and transportation in the United States, as well as assistance applying for U.S. legal documents for the children of their customers.
Liu and Dong advised their customers on how to hide their pregnancies from the immigration authorities. Liu and Dong also knew – or deliberately avoided learning – that their customers lied on their visa applications submitted to immigration authorities to enter the U.S.
Generally, their customers’ visa applications falsely stated that the purpose of the trip to the United States was for tourism, when it was to give birth, and the length of the stay was days or weeks, when it was in fact months. The visas also misstated the location where the customers intended to stay, which was defendants’ maternity hotel.
Liu and Dong or their agents also advised their customers to fly to ports of entry with perceived less customs scrutiny, such as Hawaii, before flying to Los Angeles, to wear loose fitting clothing, to favor certain lines at customs that they perceived to be less strict, and on how to answer the customs officials’ questions.
Liu and Dong received money from overseas and used that money to promote their scheme.
United States District Judge R. Gary Klausner scheduled a December 9 sentencing hearing, at which time Liu and Dong will face a statutory maximum sentence of five years in federal prison for the conspiracy charge and up to 20 years in federal prison for each international money laundering charge.
Homeland Security Investigations, IRS Criminal Investigation, and the FBI investigated this matter. The Irvine Police Department and the San Bernardino County Sheriff’s Department provided substantial assistance.
Assistant United States Attorneys Gregory W. Staples and Kevin Y. Fu of the Santa Ana Branch Office are prosecuting this case.
Hollywood Hills Man Who Operated Orange County Drug Treatment Facilities Found Guilty of Paying Nearly $2.9 Million in KickbacksRead the Press Release
LOS ANGELES – A federal jury has found a Hollywood Hills man guilty of nearly a dozen felonies for paying illegal kickbacks for patient referrals to his addiction treatment facilities located in Orange County, the Justice Department announced today.
Casey Mahoney, 48, was found guilty on Wednesday of one count of conspiracy to solicit, receive, pay, or offer illegal remunerations for patient referrals, seven counts of illegal remunerations for patient referrals, and three counts of money laundering.
According to evidence presented at a nine-day trial, from at least October 2018 to December 2020, Mahoney paid nearly $2.9 million in illegal kickbacks to so-called “body brokers” who referred patients to Mahoney’s addiction treatment facilities, the Huntington Beach-based Healing Path Detox LLC, and the San Juan Capistrano-based Get Real Recovery Inc.
Those body brokers in turn paid thousands of dollars in cash to patients, which some patients used to purchase drugs, to induce those patients to attend treatment at Mahoney’s facilities. Mahoney concealed the illegal kickbacks by entering into sham contracts with the body brokers which purportedly required fixed payments and prohibited payments based off of the volume or value of the patient referrals.
In reality, Mahoney and the brokers negotiated payments based on the patients’ insurance reimbursements and the number of days Mahoney was able to bill for treatment. Mahoney also laundered the proceeds of the conspiracy through payments to the mother of one of the body brokers, which Mahoney falsely characterized as consulting fees.
The jury also found Mahoney not guilty of one count of aiding and assisting the preparation of a false tax document.
United States District Judge Josephine L. Staton scheduled a January 17, 2025, sentencing hearing, at which time Mahoney will face a maximum penalty of five years in prison on the conspiracy charge, up to 10 years in prison on each illegal remuneration count, and up to 20 years in prison on each money laundering count.
The FBI and IRS Criminal Investigation investigated this matter. The California Department of Insurance provided valuable assistance.
Assistant United States Attorney Nandor Kiss of the Santa Ana Branch Office and Justice Department Trial Attorney Siobhan M. Namazi of the Criminal Division’s Fraud Section are prosecuting this case.
Mahoney’s conviction arose out of violations of the Eliminating Kickbacks in Recovery Act (EKRA). EKRA was enacted in October 2018 as part of comprehensive legislation designed to address the opioid crisis in order to target the rise in body brokering and substance abuse facility profiteering.
The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,000 defendants who collectively have billed federal health care programs and private insurers more than $24.7 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the Office of the Inspector General for the Department of Health and Human Services, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.
Former Orange County Resident Linked to White Supremacist Group Pleads Guilty to Plotting and Engaging in Violence at Political RalliesRead the Press Release
LOS ANGELES – A former resident of Huntington Beach who has been linked to a white supremacy extremist group pleaded guilty today to planning and engaging in riots at political rallies across California.
Robert Paul Rundo, 34, pleaded guilty to one count of conspiracy to violate the federal Anti-Riot Act.
“This defendant sought to incite riots to promote a white-supremacist agenda and impede the constitutional rights of others,” said United States Attorney Martin Estrada. “Safeguarding civil rights goes to the core of my office’s mission and we will continue to unite with our community against those who promote hate and divisiveness.”
“Mr. Rundo’s cowardly and unprovoked acts of violence were unjustly carried out upon his victims, leaving those who were victimized, their families, and our community torn by hate,” said Akil Davis, Assistant Director in Charge of the Los Angeles Field Office. “The FBI and our law enforcement partners will continue to ensure that if a crime is motivated by bias, it will be investigated, and the perpetrators held responsible for their actions. We encourage everyone to report such crimes to the FBI.”
According to his plea agreement, between March 2017 and May 2018, Rundo and others participated in an organization that ultimately was rebranded as the “Rise Above Movement” (RAM). RAM representing itself as a fighting group of a new nationalist and white supremacy identity movement. As part of their membership in RAM, Rundo and others attended rallies with the intent to provoke and engage in violence.
To prepare for violent physical conflicts, Rundo and others held hand-to-hand and other fighting training sessions, which they organized through telephone calls, social media, and text messages. Rundo organized and attended several such training sessions in 2017. On various social media platforms, Rundo and others posted messages and photographs of themselves preparing for or engaging in violence, accompanied by statements such as “#rightwingdeathsquad.”
In March 2017, Rundo and other RAM members held a training in San Clemente to prepare to engage in violence at political events, including a rally on March 25, 2017, in Huntington Beach. At the Huntington Beach rally, Rundo and other RAM members pursued and assaulted other persons, including one protestor whom Rundo tackled and punched multiple times. Following the event, Rundo and his co-conspirators posted online photographs and videos celebrating the assaults they had committed.
Rundo also helped organize training for RAM members in anticipation of a rally scheduled to occur on April 15, 2017, in Berkeley. At the Berkeley rally, there were several violent clashes throughout the day. In one such instance, Rundo and several of his co-conspirators crossed a police barrier erected to separate opposing groups. They then punched and kicked several people. Following the event, Rundo and his co-conspirators again posted online photographs and videos celebrating the assaults they had committed.
On June 10, 2017, Rundo and others attended a rally in San Bernardino, at which they confronted and pursued protesters.
In the months following these events, Rundo and his accomplices continued to publicly celebrate their assaults, including through online posts with photos and videos of RAM members assaulting people.
United States District Judge Josephine L. Staton scheduled a December 13 sentencing hearing, at which time Rundo will face a statutory maximum sentence of five years in federal prison.
Two other defendants have been charged in this case:
- Robert Boman, 31, of Torrance, who is charged with one count of conspiracy to violate the Anti-Riot Act and one count of rioting; and
- Tyler Laube, 28, of Redondo Beach, who pleaded guilty in October 2023 to one count of interfering with a federally protected right and later was fined $2,000 and sentenced to time already served in custody.
The FBI’s Joint Terrorism Task Force investigated this case.
Assistant United States Attorneys Kathrynne N. Seiden and Anna P. Boylan of the Terrorism and Export Crimes Section are prosecuting this case.
California Addiction Treatment Facility Operator Convicted of Paying Nearly $2.9M in Illegal KickbacksRead the Press Release
A federal jury convicted a California man this week for paying illegal kickbacks for patient referrals to his addiction treatment facilities located in Orange County, California.
According to court documents and evidence presented at trial, Casey Mahoney, 48, of Los Angeles, paid nearly $2.9 million in illegal kickbacks to so-called “body brokers” who referred patients to Mahoney’s addiction treatment facilities, Healing Path Detox LLC and Get Real Recovery Inc. Those body brokers in turn paid thousands of dollars in cash to patients, which some patients used to purchase drugs, in order to induce those patients to attend treatment at Mahoney’s facilities. Mahoney concealed the illegal kickbacks by entering into sham contracts with the body brokers which purportedly required fixed payments and prohibited payments based off of the volume or value of the patient referrals. In reality, Mahoney and the brokers negotiated payments based on the patients’ insurance reimbursements and the number of days Mahoney was able to bill for treatment. Mahoney also laundered the proceeds of the conspiracy through payments to the mother of one of the body brokers, which Mahoney falsely characterized as consulting fees.
Mahoney was convicted of one count of conspiracy to solicit, receive, pay, or offer illegal remunerations for patient referrals, seven counts of illegal remunerations for patient referrals, and three counts of money laundering. Mahoney is scheduled to be sentenced on Jan. 17, 2025, and faces a maximum penalty of five years in prison on the conspiracy charge, 10 years in prison on each illegal remuneration count, and 20 years in prison on each money laundering count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division; U.S. Attorney Martin Estrada for the Central District of California; Assistant Director in Charge Akil Davis of the FBI Los Angeles Field Office; and Special Agent in Charge Tyler Hatcher of the IRS Criminal Investigation (IRS-CI) Los Angeles Field Office made the announcement.
The FBI Los Angeles Field Office and IRS-CI Los Angeles Field Office investigated the case. The California Department of Insurance provided valuable assistance.
Trial Attorney Siobhan M. Namazi of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Nandor F.R. Kiss for the Central District of California are prosecuting the case.
Mahoney’s conviction arose out of violations of the Eliminating Kickbacks in Recovery Act (EKRA). EKRA was enacted in October 2018 as part of comprehensive legislation designed to address the opioid crisis in order to target the rise in body brokering and substance abuse facility profiteering.
The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,000 defendants who collectively have billed federal health care programs and private insurers more than $24.7 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the Office of the Inspector General for the Department of Health and Human Services, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.
Northern California Man Arrested on Federal Complaint Alleging He Assaulted Attendants on Flight Bound for San FranciscoRead the Press Release
RIVERSIDE, California – An Alameda County man has been arrested on a federal criminal complaint alleging he assaulted flight attendants shortly after his flight from Orange County to San Francisco took off, causing the flight to divert to Ontario for the safety of passengers and crew, the Justice Department announced today.
Charles Angel Salva, 30, of Fremont, is charged with interference with flight crew members and attendants.
Salva, who was arrested on Wednesday, is expected to make his initial appearance this afternoon in United States District Court in Riverside.
According to an affidavit filed with the complaint, Salva was on a Frontier Airlines flight bound from John Wayne Airport in Santa Ana destined for San Francisco International Airport on September 9. Shortly after takeoff, while the airplane was climbing and under 10,000 feet, flight attendants saw that the oxygen masks in one row of the middle of the aircraft were out of the overhead compartment. Flight attendants investigated and discovered that Salva had his hand in the overhead compartment.
One passenger later told law enforcement that Salva appeared claustrophobic and seemed like he wanted to get off the plane. Salva then pulled down the oxygen mask from the overhead compartment, getting his hand stuck there in the process before a passenger helped him free his hand.
Salva allegedly began yelling obscenities at flight attendants and said, “We are all going to hell,” and “This airplane is going down!” Salva then grabbed at fellow passengers and ran towards the rear of the airplane when flight attendants tried to restrain him. Salva allegedly then attempted to choke a flight attendant, leaving two small marks on the victim’s neck.
Salva then pushed another flight attendant and said he was going to kill everybody, the affidavit alleges. Passengers helped restrain Salva, who broke out of flex cuffs and had to be restrained by a seatbelt. During the incident, Salva kicked one flight attendant approximately six times in the leg, causing apparent bruising and swelling, which required medical attention.
The flight was diverted to Ontario International Airport because the flight attendants did not feel safe trying to put Salva back in his seat.
A complaint contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
If convicted, Salva would face a statutory maximum sentence of 20 years in federal prison.
The FBI and the Ontario Police Department are investigating this matter.
Assistant United States Attorney Cory L. Burleson of the Riverside Branch Office is prosecuting this case.
Los Angeles Businessman and His Companies Settle Claims Related to Improper COVID-19 Business-Relief LoansRead the Press Release
SETTLEMENT AGREEMENT
LOS ANGELES – Yosef Y. Manela, a Los Angeles-based businessman who owns and operates an accounting firm, law firm and consulting company, has paid $802,341 to the United States to resolve allegations that he and his three companies violated the False Claims Act in connection with six loans the businesses received under the Paycheck Protection Program (PPP), the Justice Department announced today.Manela and his companies also agreed to repay the lender for all outstanding PPP loans, relieving the Small Business Administration (SBA) of liability to the lender for the federal guaranty of approximately $728,000.
The PPP, an emergency loan program established by Congress in March 2020 under the Coronavirus Aid, Relief and Economic Security (CARES) Act and administered by the SBA, was intended to support small businesses struggling to pay employees and other business expenses during the COVID-19 pandemic. A borrower applying for a PPP loan was required to make multiple certifications that the borrower was eligible for the requested loan and the borrower would not receive another PPP loan. The borrower was also required to certify that the funds would be used for qualifying expenses, such as payroll, lease payments, utilities and other allowable business expenses. In December 2020, Congress approved funding for a “second draw” of PPP loan funds, which became available to borrowers beginning in January 2021.
The United States alleged that Manela and his companies received a total of six first and second draw PPP loans based on duplicative payroll expenses for multiple businesses and/or on behalf of non-existent employees. According to the United States, Manela and his companies made capital distributions of business profits to Manela’s family members that were falsely characterized as wages in PPP loan applications and forgiveness applications. The United States alleged that these false loan and forgiveness applications resulted in losses to the SBA for processing fees, interest and payment to the lender on a loan guarantee.
“Every taxpayer dollar lost to unscrupulous individuals during the COVID-19 pandemic is money that failed to reach businesses struggling for survival,” said United States Attorney Martin Estrada. “It is important that we uphold the integrity of pandemic-related assistance programs.”
“PPP loans were intended to provide critical relief to small businesses facing difficult economic times due to the COVID-19 pandemic,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The Justice Department is committed to pursuing those who improperly sought to enrich themselves at the expense of the PPP or other pandemic-assistance programs.”
“The favorable settlement in this case is the product of enhanced efforts by federal agencies such as the Small Business Administration working with the Department of Justice, SBA’s Office of Inspector General and other Federal law enforcement agencies, to address fraud on the PPP,” said General Counsel Therese Meers of the SBA.
The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Relator LLC, a limited liability corporation formed by California attorneys Anoush Hakimi and Peter Shahriari. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned United States ex rel. Relator LLC v. Yosef Y. Manela et al., Case No. 2:22-cv-04781-MWF-ASx (CDCA). Relator LLC will receive approximately $80,000 as its share of the total settlement.
The resolution obtained in this matter was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, and U.S. Attorney’s Office for the Central District of California, with assistance from the SBA’s Office of General Counsel and Office of the Inspector General.
Assistant United States Attorney Paul B. La Scala of the Civil Division’s Civil Fraud Section and Justice Department Trial Attorney Allie Pang of the Civil Division’s Commercial Litigation Branch, Fraud Section handled this matter.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Justice Department in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The task force bolsters efforts to investigate and prosecute the most culpable domestic and international actors committing civil and criminal fraud and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit www.justice.gov/coronavirus.
Tips and complaints from all sources about potential fraud affecting COVID-19 government relief programs can be reported by visiting the webpage of the Civil Division’s Fraud Section, which can be found here. Anyone with information about allegations of attempted fraud involving COVID-19 can also report it by calling the Justice Department’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
The claims resolved by the settlement are allegations only. There has been no determination of liability.
California Businessman and His Companies Resolve False Claims Act Allegations Relating to Improper Paycheck Protection Program LoansRead the Press Release
Yosef Y. Manela, a Los Angeles-based businessman who owns and operates an accounting firm, law firm and consulting company, has paid $802,341.40 to the United States to resolve allegations that he and his three companies violated the False Claims Act in connection with six loans the businesses received under the Paycheck Protection Program (PPP). Manela and his companies also agreed to repay the lender for all outstanding PPP loans, relieving the Small Business Administration (SBA) of liability to the lender for the federal guaranty of approximately $728,000.
The PPP, an emergency loan program established by Congress in March 2020 under the Coronavirus Aid, Relief and Economic Security (CARES) Act and administered by the SBA, was intended to support small businesses struggling to pay employees and other business expenses during the COVID-19 pandemic. A borrower applying for a PPP loan was required to make multiple certifications that the borrower was eligible for the requested loan and the borrower would not receive another PPP loan. The borrower was also required to certify that the funds would be used for qualifying expenses, such as payroll, lease payments, utilities and other allowable business expenses. In December 2020, Congress approved funding for a “second draw” of PPP loan funds, which became available to borrowers beginning in January 2021.
The United States alleged that Manela and his companies received a total of six first and second draw PPP loans based on duplicative payroll expenses for multiple businesses and/or on behalf of non-existent employees. According to the United States, Manela and his companies made capital distributions of business profits to Manela’s family members that were falsely characterized as wages in PPP loan applications and forgiveness applications. The United States alleged that these false loan and forgiveness applications resulted in losses to the SBA for processing fees, interest and payment to the lender on a loan guarantee.
“PPP loans were intended to provide critical relief to small businesses facing difficult economic times due to the COVID-19 pandemic,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The Justice Department is committed to pursuing those who improperly sought to enrich themselves at the expense of the PPP or other pandemic-assistance programs.”
“Every taxpayer dollar lost to unscrupulous individuals during the COVID-19 pandemic is money that failed to reach businesses struggling for survival,” said U.S. Attorney Martin Estrada for the Central District of California. “It is important that we uphold the integrity of pandemic-related assistance programs.”
“The favorable settlement in this case is the product of enhanced efforts by federal agencies such as the Small Business Administration working with the Department of Justice, SBA’s Office of Inspector General and other Federal law enforcement agencies, to address fraud on the PPP,” said General Counsel Therese Meers of the SBA.
The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Relator LLC, a limited liability corporation formed by California attorneys Anoush Hakimi and Peter Shahriari. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned U.S. ex rel. Relator LLC v. Yosef Y. Manela et al., Case No. 2:22-cv-04781-MWF-ASx (CDCA). Relator LLC will receive approximately $80,000 as its share of the total settlement.
The resolution obtained in this matter was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, and U.S. Attorney’s Office for the Central District of California, with assistance from the SBA’s Office of General Counsel and Office of the Inspector General.
Trial Attorney Allie Pang of the Civil Division’s Commercial Litigation Branch, Fraud Section, and Assistant U.S. Attorney Paul La Scala for the Central District of California handled the matter, with the assistance of Civil Division Investigator Wanda Wesley and Paralegal Heather Beckler for the Central District of California. Sandra Mazzoni, of the SBA’s Office of Inspector General, also provided investigative assistance.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Justice Department in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The task force bolsters efforts to investigate and prosecute the most culpable domestic and international actors committing civil and criminal fraud and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit www.justice.gov/coronavirus.
Tips and complaints from all sources about potential fraud affecting COVID-19 government relief programs can be reported by visiting the webpage of the Civil Division’s Fraud Section, which can be found here. Anyone with information about allegations of attempted fraud involving COVID-19 can also report it by calling the Justice Department’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
The claims resolved by the settlement are allegations only. There has been no determination of liability.
SettlementSix Defendants Arrested on Indictments Alleging They Used Stolen Identities to Fraudulently Obtain Lines of Credit and Jobless BenefitsRead the Press Release
SANTA ANA, California – Law enforcement officials today arrested six Orange County residents charged in three indictments alleging, among other crimes, they stole identities to defraud California’s unemployment insurance (UI) system and to fraudulently apply for lines of credit from a lender, using the identity theft victims’ homes as collateral.
In total, seven defendants are charged in the three indictments, which were returned by a federal grand jury. The defendants arrested today are expected to be arraigned this afternoon in United States District Court in Santa Ana.
The first indictment, returned on June 12, contains 31 counts, alleges the following defendants participated in a conspiracy that fraudulently obtained debit cards through the California Employment Development Department (EDD), which administers the state’s UI system:
- Tien Vo, 43, of Westminster;
- Crystal Nguyen, 35, of Garden Grove, who is a fugitive;
- Thao Nguyen, 46, of Westminster; and
- Michelle Strange, 40, of Midway City.
All four of these defendants are charged with 22 counts of bank fraud, and each has been charged with two counts of aggravated identity theft. Vo also is charged with one count of possession of unauthorized access devices.
From May 2020 to January 2022, the defendants allegedly obtained UI debit cards, which fraudulently had been obtained by submitting UI applications in the names of identity theft victims. During this time, EDD also administered Pandemic Unemployment Assistance benefits, which Congress authorized in 2020 to provide to individuals who were unemployed because of the COVID-19 pandemic. The defendants then used these debit cards to withdraw unemployment insurance benefits. In total, the defendants withdrew approximately $15,650 in UI benefits from the debit cards.
The second indictment, returned on August 7, contains seven counts, alleges the following defendants schemed to defraud banks by using stolen identities – including by stealing mail – to fraudulently obtain lines of credit secured by the identity theft victims’ actual homes – and were secured without the victims’ knowledge or consent:
- Chien Khang Bui, 36, a.k.a. “Catfish” and “Tommy,” of Anaheim;
- Nangialey Nick Wardak, 54, of Santa Ana; and
- Mandy Lynn McGrew, 35, of Santa Ana.
From February 2020 to March 2022, Bui allegedly obtained debit card numbers, bank account numbers, credit cards, home addresses, telephone numbers, and other personal identifying information belonging to identity theft victims. He then submitted online applications for home equity lines of credit (HELOC) with a mortgage-lending company by using the victims’ stolen information. Bui linked each HELOC application to a bank account that he and other conspirators controlled.
The defendants allegedly lied to the mortgage company that they were the person associated with each application and that they were the owner of each of the houses used as collateral. In total, the conspiracy received approximately $502,806 in fraudulently obtained HELOCs.
All three of these defendants are charged with one count of conspiracy to commit bank fraud, and each of them is charged with one count of aggravated identity theft. Bui also is charged with three counts of bank fraud for allegedly using stolen identities to fraudulently obtain COVID-19 jobless benefits from EDD in July and August of 2020.
“These indictments allege an organized criminal campaign of identity theft targeting banks, California’s unemployment insurance program, and homeowners alike,” said United States Attorney Martin Estrada. “Sophisticated fraud schemes, such as the ones alleged in these indictments, cause real damage to victims, and we will be diligent in rooting them out.”
“I am proud of the extensive investigation conducted by the FBI’s Orange County Asian Organized Crime Task Force,” said Akil Davis, Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Through their hard work and dedication, we were able to dismantle an organization responsible for causing significant financial harm to individuals and public funds designated to assist those in need. The FBI is committed to protecting our communities, financial institutions, and public assistance programs from criminal enterprises that exploit them for personal gain.”
In a third and separate indictment, also returned on August 7 and containing three counts, Bui is charged with two counts of distribution of methamphetamine stemming from alleged incidents in December 2022 and February 2023, and one count of unlawfully possessing a firearm and ammunition.
Bui is not legally permitted to possess firearms or ammunition because of his criminal history, which includes felony convictions in Orange County Superior Court for theft by false pretenses, second-degree commercial burglary, identity theft, identity theft with prior conviction, unlawful taking of a vehicle, and grand theft.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
If convicted of all charges, the defendants would face a statutory maximum sentence of 30 years in federal prison for each bank fraud-related count, and a mandatory consecutive sentence of two years in federal prison for each aggravated identity theft count. Vo would face up to 10 years in prison for the unauthorized possession of access devices count and Bui would face a statutory maximum sentence of life imprisonment for the methamphetamine distribution counts and up to 15 years in federal prison for the count of unlawful possession of a firearm and ammunition.
The FBI’s Orange County Asian Organized Crime Task Force is investigating these cases. This task force is comprised of the FBI; the Santa Ana Police Department; the Westminster Police Department; the California Department of Justice – Bureau of Gambling Control; the Orange County District Attorney's Office; the California Employment Development Department; and the United States Department of Labor – Office of Inspector General. The Orange County Sheriff's Department provided substantial assistance.
Assistant United States Attorney Kevin Y. Fu of the Santa Ana Branch Office is prosecuting the Vo case. Assistant United States Attorney Melissa S. Rabbani, also of the Santa Ana Branch Office, is prosecuting the Bui cases.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
On September 15, 2022, the Attorney General selected the U.S. Attorney’s Offices for the Central and Eastern Districts of California to jointly head one of three national COVID-19 Fraud Strike Force Teams. The Department of Justice established the Strike Force to enhance existing efforts to combat and prevent COVID-19 related financial fraud. The Strike Force combines law enforcement and prosecutorial resources and focuses on large-scale, multistate pandemic relief fraud perpetrated by criminal organizations and transnational actors, as well as those who committed multiple instances of pandemic relief fraud. The Strike Force uses prosecutor-led and data analyst-driven teams to identify and bring to justice those who stole pandemic relief funds. Additional information regarding the Strike Force may be found at https://www.justice.gov/opa/pr/justice-department-announces-covid-19-fraud-strike-force-teams.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at (866) 720-5721 or via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Former Orange County High School Teacher Who Installed Hidden Cameras in School Bathrooms Sentenced to 17½ Years in PrisonRead the Press Release
SANTA ANA, California – A former teacher at a high school in Orange County who secretly installed hidden cameras in bathrooms at the school and elsewhere and, during a three-year span, viewed and downloaded hundreds of images – including of children under the age of 12 – using the restroom, was sentenced today to 210 months in federal prison for possessing child sexual abuse material (CSAM).
Siu Kong Sit, 38, of Rowland Heights, was sentenced by United States District Judge John W. Holcomb, who ordered Sit to be placed on lifetime supervised release following his eventual release from prison and scheduled a restitution hearing for November 8 in this case.
Sit pleaded guilty on March 29 to one count of possession of child pornography.
“This defendant was every parent’s nightmare – rather than care for the safety and well-being of students, he exploited them in the most abhorrent way,” said United States Attorney Martin Estrada. “It is important that we send a strong message of zero tolerance for those who take advantage of children. My office will continue to prosecute offenders who prey on our youth to the fullest extent allowed by law.”
According to Sit’s plea agreement, beginning in at least February 2020, when he was employed as a teacher at Beckman High School in Irvine, Sit began secretly installing hidden cameras in restrooms located on campus. After installing the cameras, Sit regularly reviewed the videos captured by the cameras and downloaded the videos that were of interest to him.
In May 2022, while serving as the high school robotics team coach, Sit placed a hidden camera in the restroom of a hotel room where minor students on the robotics team were staying during a robotics tournament in Texas. From 2020 to 2023, Sit viewed and downloaded hundreds of images of children and adults, in various states of undress, using restrooms.
In February 2023, after the cameras had been discovered, law enforcement seized several digital devices from Sit’s home. Sit owned and was the sole user of all these devices. Officers also seized two external storage drives from the cameras that Sit had secretly installed at Beckman High School.
A forensic review of the various digital devices identified dozens of images and videos of child pornography, including images and videos that Sit had recorded himself of children using restrooms in various states of undress. The victims that Sit recorded without their consent were under the age of 18, and some of the victims were under the age of 12.
A search of a Sit-owned hard drive resulted in the seizure of at least 22 images and one video of CSAM, including several depicting a toddler engaged in sexual activity. The search of a separate Sit-owned hard drive contained at least 150 images and four videos of CSAM.
Sit admitted in his plea agreement to knowingly possessing images and videos of minors under the age of 12 engaging in sexual conduct.
The Orange County District Attorney’s Office is pursuing criminal charges against Sit in Orange County Superior Court concerning the adult victims in the hidden videos matter. The charges filed in state court concerning Sit’s minor victims was dismissed so the federal case could proceed.
Homeland Security Investigations and the Irvine Police Department investigated this matter.
Assistant United States Attorney Melissa S. Rabbani of the Santa Ana Branch Office prosecuted this case.
Four Southern California Men Arrested on Charges Alleging They Kidnapped Migrants and Held Them for RansomRead the Press Release
LOS ANGELES – Four men from Southern California have been arrested and arraigned on a nine-count indictment charging them with kidnapping migrants to the United States and holding them for ransom, demanding cash from their families in exchange for their safe return.
The indictment, returned July 30, charges the following five defendants with two counts of conspiracy to commit hostage taking and hostage taking, two counts of conspiracy to commit kidnapping and kidnapping, one count of conspiracy to transport illegal aliens, and two counts of transporting illegal aliens for private financial gain:
- Miguel Angel Avila, a.k.a. “Fredo,” “Quavo,” “Marcos,” and “Papitas,” 22, of Hemet;
- Omar Avila Salmeron, a.k.a. Simón Hernández,” “Andres,” and “El Palatero,” 41, of South Los Angeles;
- Jose Jaime Garcia, a.k.a. “Pablo” and “Sneaky,” 20, of San Jacinto;
- Gabriel Michel Becerra, a.k.a. “Steven”, 22, of Palmdale; and
- Jose Alfredo Moreno Gonzalez, 21, of Oak Hills.
Avila, Salmeron, Garcia, and Becerra also are charged with two counts of conspiracy to interfere with commerce by extortion and attempted interference with commerce by extortion (Hobbs Act).
Four defendants have been arraigned and have pleaded not guilty to the charges against them. Salmeron, Garcia, and Moreno are scheduled to go on trial on October 1. Avila has an October 29 trial date scheduled. A federal magistrate judge has ordered Avila and Salmeron jailed without bond. Garcia and Moreno are free on bond.
Becerra is currently a fugitive. Anyone with information pertaining to his whereabouts is encouraged to call law enforcement.
“These defendants allegedly preyed upon victims who sought to emigrate to our country by demanding ransom from the victims’ families in exchange for their release,” said United States Attorney Martin Estrada of the Central District of California. “Our office is committed to ensuring that those who use violence to terrorize others face severe consequences for their actions.”
According to the indictment, on March 21, 2023, Avila instructed Moreno to drive to a Chevron gas station in Chandler, Arizona. Upon arrival, Moreno reportedly kidnapped four migrants and transported them to a restaurant in Burbank.
Avila, along with Garcia and Becerra, then held the hostages in a house. Using a victim’s cellphone, Avila demanded ransom money from the victim’s family member in exchange for their release. Avila then allegedly used another victim’s cellphone to demand ransom payments, partially to an account in Mexico and partially to an account in the United States, from that victim’s family member in exchange for the victim’s release.
On March 22, 2023, Avila and Salmeron demanded ransom from another hostage’s family member for their release. Avila, Garcia, and Becerra allegedly moved the three of the hostages to a motel room, where one victim managed to escape through a second-story bathroom window.
Avila and a co-conspirator chased the victim to a nearby store in Koreatown. Inside the store, Avila body-slammed the victim, placed him in a chokehold, and punched him repeatedly in the face in an attempt to re-kidnap him.
Avila, Garcia, and Becerra then allegedly restrained one victim and another hostage by tying their hands, transported them to another house, and held them in a room, threatening them with violence if they attempted to escape.
On March 23, 2023, Avila, Garcia, and Becerra reportedly drove a victim to a gas station, where they took $11,000 in cash from the victim’s brother in exchange for the victim’s release.
“Human smuggling is a dangerous crime,” said United States Attorney Tara McGrath of the Southern District of California. “These defendants will face justice for abusing vulnerable migrants for profit.”
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
If convicted of all charges, each defendant would face a statutory maximum sentence of life in federal prison.
Operation Safe Cities establishes strategic enforcement priorities with an emphasis on prosecuting the most significant drivers of violent crime. Across this region, the most damaging and horrific crimes are committed by a relatively small number of particularly violent individuals. This strategic enforcement approach is expected to increase the number of arrests, prosecutions and convictions of recidivists engaged in the most dangerous conduct. It is designed to improve public safety across the region by targeting crimes involving illicit guns, prohibited persons possessing firearms, or robbery crews that cause havoc and extensive losses to retail establishments.
United States Customs and Border Protection, Homeland Security Investigations, and the Los Angeles Police Department are investigating this matter.
This case is being prosecuted jointly by the U.S. Attorney’s Offices for the Central District of California and Southern District of California. Assistant United States Attorney Jena A. MacCabe of the Violent and Organized Crime Section is the lead counsel on this matter.
Central Coast Man Sentenced to More Than 11 Years in Federal Prison for Receiving Child Pornography Weeks After Release from State PrisonRead the Press Release
LOS ANGELES – A Santa Barbara County man was sentenced today to 135 months in federal prison for receiving thousands of videos containing child sexual abuse material (CSAM) within one month of his parole from California state prison following his conviction for internet-related child sexual exploitation crimes.
Giovanni Gonzalez, 34, of Carpinteria, was sentenced by United States District Judge R. Gary Klausner, who also ordered him to pay $24,000 in restitution.
Gonzalez pleaded guilty on February 5 to one count of receipt of child pornography.
“Within days of his release from state prison for despicable acts he committed against children, this defendant returned to his deplorable ways, obtaining thousands of videos showcasing the sexual exploitation of kids,” said United States Attorney Martin Estrada. “Protecting our children is central to my office’s mission and we will continue to use all available tools to prosecute those who participate in this wicked marketplace that traffics in child abuse.”
“Sexual exploitation of children is unacceptable and will not be tolerated in our society,” said Akil Davis, the Assistant Director in Charge of the FBI's Los Angeles Field Office. “This case underscores the FBI's commitment to investigate all offenders who cause harm to our children, and we will ensure these individuals no longer pose a threat to our communities.”
According to his plea agreement, on December 1, 2022, Gonzalez was paroled from California state prison following a sentence of more than 17 years for posing as a teenage girl online and coercing at least eight minor female victims into engaging in sex acts and sending him the images, as well as for possessing and sharing CSAM on the internet.
Later that month, Gonzalez sought out and began receiving CSAM from sources, including one on WhatsApp, a computer software application on his mobile phone.
On December 28, 2022, Gonzalez knowingly received from one source numerous files of CSAM. Upon receiving this material on WhatsApp, Gonzalez saved them to the memory card of his mobile phone.
On January 7, 2023, Gonzalez turned over his mobile phone to his parole officer pursuant to his search conditions. Upon inspection, law enforcement found in Gonzalez’s telephone approximately 2,684 videos containing CSAM, of which several depicted prepubescent minors engaged in sexually explicit conduct or sexual exploitation of an infant or toddler.
The FBI and the Santa Maria Police Department investigated this matter. The California Department of Corrections and Rehabilitation and the Ventura County Sheriff’s Office provided assistance.
Assistant United States Attorney Jeremy K. Beecher of the International Narcotics, Money Laundering, and Racketeering Section prosecuted this case.
Trafficker Who Smuggled Fentanyl from Southern California to DC Sentenced to 108 MonthsRead the Press Release
WASHINGTON – Trayveon James Johnson, 20, of Alexandria, Va., was sentenced today to 108 months in prison for participating in a wide-spread narcotics trafficking conspiracy that distributed hundreds of thousands of fentanyl-laced counterfeit oxycodone pills purchased in Southern California to destinations throughout the United States, including the District of Columbia. Johnson was one of 24 co-defendants arrested over the course of 2023 in D.C., Virginia, Maryland, San Diego, and Los Angeles and charged in the conspiracy.
The sentence was announced by U.S. Attorney Matthew M. Graves, DEA Special Agent in Charge Jarod Forget of the DEA Washington Division, Inspector in Charge Damon Wood of the U.S. Postal Inspection Service Washington Division, and Chief Pamela A. Smith of the Metropolitan Police Department.
Johnson, aka “Treyski,” pleaded guilty on April 19, 2024, to one count of conspiracy to distribute and possess with intent to distribute 40 grams or more of fentanyl. In addition to the 108-month prison term, U.S. District Court Judge Colleen Kollar-Kotelly ordered Johnson to serve five years of supervised release.
According to court documents, Johnson’s role in the conspiracy was to travel to Southern California where he purchased fentanyl-laced counterfeit oxycodone pills to bring them back to the District of Columbia. Johnson and his co-conspirators smuggled the pills concealed in luggage and/or personal carry-on items, or alternatively, used commercial mail carriers to ship them to the District. Johnson then conspired with his D.C.-based co-conspirators to redistribute the drugs.
The impetus for the investigation was the overdose death of Diamond Lynch, a young mother in Southeast D.C. In addition to investigating and prosecuting the death resulting case,[1] law enforcement followed the evidence and uncovered a vast network of traffickers who transported fentanyl from Mexico to Los Angeles to the District of Columbia. Since then, investigators have seized more than 450,000 fentanyl pills, 1.5 kilograms of fentanyl powder, and 30 firearms.
Although Johnson entered this conspiracy after Ms. Lynch’s death, the lethality of fentanyl-laced counterfeit oxycodone pills was well known to him. For example, on December 15, 2022, Johnson received a text message asking if a coconspirator, Mathias Tsegaye, “still got blues.” In January 2023, Tsegaye was found dead, with the cause of death determined to be a drug overdose involving fentanyl. Despite this knowledge of fentanyl’s risks, Johnson continued to traffic the deadly pills.
Johnson was arrested on November 9, 2023, in Alexandria, Va.
This investigation is part of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
DEFENDANT
AGE
LOCATION
CHARGES/SENTENCE
Hector David Valdez,
aka “Curl”
26
Santa Fe Springs, California
Conspiracy to distribute 400 grams or more of fentanyl;
Conspiracy to commit international money laundering.
Craig Eastman
20
Washington, D.C.
Pleaded guilty July 25, 2024, to conspiracy to distribute more than 400 grams of fentanyl.
Sentencing: January 7, 2025
Charles Jeffrey Taylor
20
Washington, D.C.
Conspiracy to distribute 400 grams or more of fentanyl;
Possession with intent to distribute fentanyl.
Raymond Nava, Jr.
20
Bell Gardens,
California
Pleaded guilty May 9, 2024, to conspiracy to distribute 400 grams or more of fentanyl.
Sentencing: September 17, 2024.
Ulises Aldaz
28
Bell Gardens,
California
Sentenced June 28, 2024, to 95 months in prison, four years of supervised release, after pleading guilty to conspiracy to distribute 400 grams or more of fentanyl.
Max Alexander Carias Torres
26
Bell Gardens,
California
Conspiracy to distribute 400 grams or more of fentanyl;
Conspiracy to commit international money laundering
Teron Deandre McNeil, aka “Wild Boy”
34
Washington, D.C.
Conspiracy to distribute 400 grams or more of fentanyl.
Marvin Anthony Bussie,
aka “Money Marr”
21
Washington, D.C.
Sentenced June 28, 2024, to 120 months in prison, five years of supervised release, after pleading guilty to conspiracy to distribute 400 grams or more of fentanyl.
Marcus Orlando Brown
28
Washington, D.C.
Pleaded guilty March 11, 2024, to conspiracy to distribute 40 grams or more of fentanyl.
Sentencing: October 3, 2024.
Columbian Thomas, aka
"Cruddy Murda”
26
Washington, D.C.
Pleaded guilty June 4, 2024, to conspiracy to distribute 400 grams or more of fentanyl.
Sentencing: October 22, 2024.
Wayne Rodell Carr-Maiden
29
Washington, D.C.
Sentenced April 29, 2024, to 45 months in prison, five years of supervised release, after pleading guilty to conspiracy to distribute 40 grams or more of fentanyl.
Andre Malik Edmond,
aka “Draco”
23
Temple Hills, Maryland
Sentenced July 22, 2024, to 130 months incarceration, 5 years of supervised release, after pleading guilty to conspiracy to distribute 400 grams or more of fentanyl.
Treyveon James Johnson,
aka “Treyski”
20
Alexandria, Virginia
Sentenced Sept. 5, 2024, to 108 months in prison after pleading guilty to conspiracy to distribute 40 grams or more of fentanyl.
Karon Olufemi Blalock,
aka “Fat Bags”
30
Alexandria, Virginia
Conspiracy to distribute 400 grams or more of fentanyl
Ronte Ricardo Greene,
aka “Cardiddy”
28
Washington, D.C.
Conspiracy to distribute 400 grams or more of fentanyl;
Possession with intent to distribute fentanyl.
Melvin Edward Allen, Jr., aka “21”
38
Washington, D.C.
Conspiracy to distribute 400 grams or more of fentanyl.
Darius Quincy Hodges,
aka “Brick”
34
Glen Allen, Virginia
Conspiracy to distribute 400 grams or more of fentanyl.
Lamin Sesay,
aka “Rock Star”
27
Alexandria, Virginia
Conspiracy to distribute 400 grams or more of fentanyl.
Paul Alejandro Felix
25
Glendale,
California
Pleaded guilty July 1, 2024, to conspiracy to distribute 400 grams or more of fentanyl.
Sentencing: November 6, 2024
Omar Arana,
aka “Frogs”
27
Cudahy,
California
Conspiracy to distribute 400 grams or more of fentanyl
Edgar Balderas, Jr., aka “Nano”
26
San Diego,
California
Conspiracy to distribute 400 grams or more of fentanyl.
Raul Pacheco Ramirez
30
Long Beach,
California
Pleaded guilty July 19, 2024, to conspiracy to distribute 400 grams or more of fentanyl.
Sentencing: November 26, 2024.
Giovani Alejandro Briones
30
Victorville, California
Conspiracy to distribute 400 grams or more of fentanyl;
Conspiracy to commit international money laundering.
Alfredo Rodriguez Gonzalez
26
Rosarito, Mexico
Conspiracy to distribute 400 grams or more of fentanyl;
Conspiracy to commit international money laundering.
The prosecutions followed a joint investigation by the DEA Washington Division and the USPIS Washington Divison in partnership with the Metropolitan Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), with additional support from the DEA Los Angeles, San Diego, and Riverside Field Offices, the Federal Bureau of Investigation’s Washington Field Office, and the Charles County, Maryland Sheriff’s Office. Valuable assistance was provided by the U.S. Attorney’s Offices in the Central and Southern Districts of California, the Eastern District of Virginia, and the District of Maryland.
The case is being prosecuted by Assistant U.S. Attorneys Matthew W. Kinskey, Solomon S. Eppel, and Iris McCranie, of the Violence Reduction and Trafficking Offenses (VRTO) Section.
23cr73
[1] https://www.justice.gov/usao-dc/pr/brother-and-sister-sentenced-drug-conspiracy-involving-fentanyl-sales
Palm Springs Man Pleads Guilty to $2.1 Million Tax Refund Scheme and to Fraudulently Obtaining Nearly $1 Million in COVID-19 LoansRead the Press Release
RIVERSIDE, California – A Riverside County man pleaded guilty today to scheming to defraud the IRS out of more than $2.1 million via the issuing of fake W-2 forms and to fraudulently obtaining nearly $1 million of COVID-19 economic-relief loans.
William Mandel Musgrow, 48, of Palm Springs, pleaded guilty to one count of wire fraud and one count of aiding and assisting in the preparation of a false tax return.
According to his plea agreement, Musgrow used one of his business entities to issue fraudulent IRS Forms W-2. These forms false represented to the IRS that the recipients were employed by defendant’s various businesses, received wages, and had federal tax withheld from their paychecks when, in fact, the Forms W-2 either overstated the recipient’s income, or were wholly fraudulent as the recipient either did not work for the business at all or had no federal income tax withheld from their paychecks.
Musgrow then would help the recipient file fraudulent federal income tax returns that utilized the bogus Forms W-2 to generate a tax refund to which the recipient was not entitled.
In total, Musgrow issued at least 87 fraudulent IRS Forms W-2 and assisted in the filing of at least 87 false income tax returns. These returns requested a total of $2,769,600 in tax refunds, and the IRS paid out $2,136,630 of the requested refunds.
Separately, during the spring of 2020, Congress created federal programs to provide financial assistance to Americans suffering economic harm because of the COVID-19 pandemic.
From March 2020 to August 2020, Musgrow submitted 14 false and fraudulent applications to the United States Small Business Administration (SBA) and banks for Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL).
In these applications, Musgrow made false statements including the number of employees to whom were paid wages, falsely certifying that the loan proceeds would be used for permissible business purposes, and in some cases, that the businesses were legitimate business when, in fact, they were not operating in any fashion and had no employees whatsoever.
In total, Musgrow submitted 14 fraudulent loan applications which requested more than $1.9 million. Relying on Musgrow’s false information, the SBA and lenders approved and funded many of the loans. Musgrow obtained approximately $970,000 in fraudulent proceeds.
United States District Judge Kenly Kiya Kato scheduled a January 16, 2025, sentencing hearing, at which time Musgrow will face a statutory maximum sentence of 20 years in federal prison for the wire fraud count and three years in federal prison for the tax fraud count.
IRS Criminal Investigation is investigating this matter.
Assistant United States Attorney Benjamin J. Weir of the Riverside Branch Office is prosecuting this case.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
On September 15, 2022, the Attorney General selected the U.S. Attorney’s Offices for the Central and Eastern Districts of California to jointly head one of three national COVID-19 Fraud Strike Force Teams. The Department of Justice established the Strike Force to enhance existing efforts to combat and prevent COVID-19 related financial fraud. The Strike Force combines law enforcement and prosecutorial resources and focuses on large-scale, multistate pandemic relief fraud perpetrated by criminal organizations and transnational actors, as well as those who committed multiple instances of pandemic relief fraud. The Strike Force uses prosecutor-led and data analyst-driven teams to identify and bring to justice those who stole pandemic relief funds. Additional information regarding the Strike Force may be found at https://www.justice.gov/opa/pr/justice-department-announces-covid-19-fraud-strike-force-teams.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at (866) 720-5721 or via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Owner of Orange County Staffing Companies Pleads Guilty to Tax Crimes, Admits to Cheating IRS Out of Nearly $60 MillionRead the Press Release
RIVERSIDE, California – The owner of Orange County-based temporary staffing companies pleaded guilty today to two federal criminal charges for willfully evading the payment of nearly $30 million in taxes, penalties and interest, assessed against him to the IRS as well as causing a false tax return to be filed with the IRS as part of defendant’s efforts to conceal nearly $30 million in additional tax liabilities incurred by his staffing companies.
Luis E. Perez, 55, who has maintained residences in Anaheim Hills, Yorba Linda, and Dove Canyon, pleaded guilty to one count of tax evasion and one count of aiding and assisting in the preparation of a false tax return.
“This defendant’s greed and lies lasted over a decade and caused tens of millions of dollars in unpaid taxes to the IRS so he could live a lavish lifestyle,” said United States Attorney Martin Estrada. “Today’s guilty plea shows my office will continue to aggressively prosecute tax offenders who fail to pay their fair share to the federal fisc and hold corporate executives accountable for violating their obligations.”
“For nearly a decade, Mr. Perez committed tax evasion by withholding millions of dollars in payroll taxes from employee paychecks and using that money to purchase luxury items for himself,” said Acting Special Agent in Charge Jose Gonzalez, IRS Criminal Investigation, Los Angeles Field Office. “As a business owner, he had a duty to his employees and to the IRS, yet despite attempts by the IRS to work with Mr. Perez, he lied and continued to report false information. IRS Criminal Investigation will exhaust all avenues to pursue tax criminals, all of whom place additional burden on honest taxpaying Americans.”
According to his plea agreement, Perez’s companies – which include Checkmates Staffing Inc.; Staffaide Inc.; BaronHR, LLC; BaronHR West Inc.; and Fortress Holding Group LLC – were required to withhold taxes from employee wages and to pay the withheld amounts to the IRS on a periodic basis. These withheld taxes, sometimes known as “trust fund taxes,” include income taxes and Federal Insurance Contributions Act (FICA) taxes that fund Social Security and Medicare.
From May 2009 to January 2017, Perez’s companies failed to pay the IRS the payroll taxes for the tax years 2001, 2002, 2003, 2006, 2007, 2008 and 2010, including trust fund taxes that Perez’s companies withheld from employees’ paychecks. Beginning in June 2007, the IRS attempted to collect Perez’s outstanding tax liability, including penalties and interest. By February 2017, the outstanding balance had grown to $29,593,378, which included the unpaid taxes, interest and the “Trust Fund Recovery Penalty.”
Perez attempted to thwart the IRS’s collection efforts by purchasing luxury items from his business bank accounts – including numerous cars and a boat – and concealing his ownership by placing the titles of these items in the names of his businesses and other individuals. Those luxury items included a Ferrari 360 Spider F, a Rolls Royce Phantom, a Duffy D 22 Bay Island boat, a Mercedes-Benz SLS, a Mercedes-Benz G-Class, and a Lamborghini Aventador. Perez also evaded the IRS’s collection efforts by obtaining a Visa Black credit card in the name of another person (now his wife) to make personal purchases and paid off the credit card using funds from his business bank accounts.
As part of his efforts to impede the IRS, Perez lied to IRS revenue officers during interviews and failed to include material information in documents submitted to the IRS. For example, Perez falsely claimed that he received a salary of only $1,000 per week from BaronHR and he did not receive any other funds from the company, when in fact Perez distributed money to himself from his businesses by making payments to his now wife for Perez’s benefit.
While on pretrial release for the abovementioned criminal conduct, Perez engaged in additional criminal tax violations. From October 2018 to August 2019, Perez willfully aided and assisted in the preparation of false tax returns that substantially understated the wages paid to the employees of Anaheim-based temporary staffing company BaronHR West from January 2018 through June 2019. Specifically, Perez admitted in his plea agreement that he caused BaronHR West to underreport employee wages and other compensation paid by the company by approximately $130,879,521, which resulted in the company’s failure to pay approximately $29,633,516 in federal employment taxes.
United States District Judge Kenly Kiya Kato scheduled a January 16, 2025, sentencing hearing, at which time he will face a statutory maximum sentence of eight years in federal prison.
Perez has been in federal custody since August 15, when a federal magistrate judge revoked his bond after a two-day evidentiary hearing finding probable cause to believe that Perez had violated the terms of his pretrial release by committing still more criminal tax violations between 2021 and 2023. In a motion to revoke Perez’s bond filed with the court on August 2, the government alleged that Perez had willfully caused his staffing companies to fail to pay over $25 million in federal payroll taxes (including over $13 million in federal trust fund taxes withheld from employee wages) since March 2021.
IRS Criminal Investigation investigated this matter.
Assistant United States Attorneys Brett A. Sagel of the Corporate and Securities Fraud Strike Force, James C. Hughes of the Major Frauds Section, and Robert A. Kemins of the Department of Justice Tax Division are prosecuting this case.
Los Angeles County Sheriff’s Deputy Charged with Federal Civil Rights Violation for Violent Altercation with WomanRead the Press Release
LOS ANGELES – Today a federal grand jury returned an indictment against a Los Angeles County Sheriff’s Department deputy alleging that he used excessive force when he assaulted and pepper-sprayed a woman during a shoplifting investigation outside a WinCo Foods in Lancaster last year.
Trevor James Kirk, 31, of Santa Clarita, is charged in a single-count indictment with deprivation of rights under color of law for the force he used during one of his shifts as a sheriff’s deputy in June 2023. Kirk caused injuries to, and used pepper spray on, victim J.H. Kirk will be arraigned on the charge in United States District Court in downtown Los Angeles later this month.
“When an officer violates the civil rights of another person, it undermines public safety for all of us,” said United States Attorney Martin Estrada. “Officers must be held accountable when they violate constitutional rights, and my Office is committed to prosecuting those who abuse their authority and breach the public’s trust.”
“All law enforcement personnel who take an oath to protect and serve the American people must be held to a higher standard,” said Akil Davis, Assistant Director in Charge of the FBI Los Angeles Field Office. “The FBI remains committed to holding those who do not meet this standard accountable for their actions.”
According to the indictment, Kirk and another deputy were responding to a possible robbery at the WinCo by a male and female suspect. Kirk and the other deputy arrived on scene and handcuffed and detained a man matching the description of the male suspect, while a female, J.H., who matched the description of the female suspect, videotaped the deputies. While videotaping, J.H. told Kirk that he had a legal obligation to inform D.B. of the basis for his detention and that she was broadcasting his actions on social media.
The indictment alleges that Kirk then approached J.H. and, without giving any commands, attempted to grab her phone. J.H. turned away, at which point Kirk allegedly grabbed J.H. by her arm, hooked his left hand behind her neck, and violently threw her to the ground. While on the ground, Kirk yelled at J.H. to “get on the ground,” and she told him that “It’s already on YouTube Life,” implying her video of Kirk and the other deputy handcuffing D.B. had already been made public. Kirk then placed his knee on J.H.’s shoulder and when J.H. yelled for Kirk to “stop” and called him an expletive, Kirk cocked his right arm back with a clenched fist and said, “Stop or you’re gonna get punched in the face.” Kirk then allegedly pressed his knee into J.H.’s neck, and she said, “Get your neck [sic] off my . . . off my . . . I can’t breathe.” While on top of J.H., the indictment alleges that Kirk used his LASD radio to misleading report that he was in a “fight.”
The indictment further alleges that shortly thereafter, without giving any additional commands to J.H., Kirk sprayed her twice in the face with pepper spray. J.H. received medical attention for the pepper spray used on her and the injuries she received from being thrown to the ground. The indictment also alleges that Kirk then drafted and submitted a misleading report to LASD in which he portrayed J.H. as a threat to his physical safety, claiming that J.H. assaulted him, attempted to hit him, and took a “fighting” or “blading” stance.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty beyond a reasonable doubt in court.
If convicted, Kirk would face a statutory maximum sentence of 10 years in federal prison.
The FBI is investigating this matter.
Assistant United States Attorney Eli A. Alcaraz of the Public Corruption and Civil Rights Section is prosecuting this case.
Justice Department Announces Civil Rights Investigation into Staff Sexual Abuse at Two California State PrisonsRead the Press Release
LOS ANGELES – The Justice Department announced today that it has opened an investigation into the conditions of two prison facilities operated by the California Department of Corrections and Rehabilitation (CDCR): Central California Women’s Facility in Chowchilla and the California Institution for Women in Chino.
Based on an extensive review of publicly available information and information gathered from stakeholders, the department has found significant justification to open this investigation. The investigation will evaluate whether CDCR protects people incarcerated at Central California Women’s Facility and the California Institution for Women from sexual abuse by correctional staff.
“Sexual abuse and misconduct will not be tolerated in prisons,” said United States Attorney Martin Estrada. “Together, with our colleagues in the Eastern District and the Civil Rights Division, my office will thoroughly investigate the conditions at Central California Women’s Facility and the California Institution for Women to determine whether California is meeting its constitutional obligations to incarcerated persons.”
“No woman incarcerated in a jail or prison should be subjected to sexual abuse by prison staff who are constitutionally bound to protect them,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Every woman, including those in prison, retains basic civil and constitutional rights and should be treated with dignity and respect. California must ensure that the people it incarcerates are housed in conditions that protect them from sexual abuse. This investigation will determine whether California is meeting its constitutional obligations.”
“Concern about the physical safety of people inside California women’s prisons is not new,” said U.S. Attorney Phillip A. Talbert for the Eastern District of California. “Media coverage, state audits, advocates’ efforts and private litigation have sought to draw attention to an issue often unseen by many in the community. This investigation responds to those concerns and will aim to ensure that California is meeting its constitutional duty to incarcerated individuals.”
- Women have filed hundreds of private lawsuits in the past two years alleging officer sexual abuse of people incarcerated at the Central California Women’s Facility over the last decade, ranging from allegations of inappropriate groping during searches and genital rubbing to forcible rape.
- This week in state court, a trial is scheduled to begin involving allegations that a former correctional officer at the Central California Women’s Facility engaged in widespread sexual assaults. Of course, these are allegations and the state process will proceed.
- A civil lawsuit was filed on behalf of 21 women incarcerated at the California Institution for Women and included allegations of forcible rape and penetration, groping, oral copulation, as well as threats of violence and punishment with abusive conduct ranging from 2014 to 2020.
- Correctional staff at both facilities reportedly sought sexual favors in return for contraband and privileges.
- The correctional officers named in these allegations range in rank and have included the very people responsible for handling complaints of sexual abuse made by women incarcerated at these facilities.
- In March, a working group established by the State and composed of advocacy groups and community-based organizations published a report to the California Legislature that identified longstanding cultural deficiencies in addressing staff sexual abuse, including an unsafe and inaccessible reporting process and the absence of staff accountability.
Justice Department officials have informed California state officials of the investigation. The department has not reached any conclusions regarding the allegations in this matter. The investigation will be conducted under the Civil Rights of Institutionalized Persons Act. This statute gives the department the authority to investigate systemic violations of the rights of individuals in institutional settings, including prisons.
The Civil Rights Division’s Special Litigation Section is conducting this investigation jointly with the U.S. Attorneys’ Offices for the Eastern and Central Districts of California. Individuals with relevant information are encouraged to contact the department via phone at 1-888-392-9490 or by email at [email protected].
Additional information about the Civil Rights Division’s work regarding correctional facilities is available on its website at www.justice.gov/crt/rights-persons-confined-jails-and-prisons.
Individuals in the seven counties of the Central District of California may file a complaint about housing discrimination or other civil rights violations with the Civil Rights Section, Civil Division of the United States Attorney’s Office by completing and submitting this form (English) (Spanish) by email to [email protected].
Justice Department Announces Civil Rights Investigation into Correctional Staff Sexual Abuse at Two California PrisonsRead the Press Release
The Justice Department announced today that it has opened an investigation into the conditions of two prison facilities operated by the California Department of Corrections and Rehabilitation (CDCR): Central California Women’s Facility in Chowchilla and the California Institution for Women in Chino.
Based on an extensive review of publicly available information and information gathered from stakeholders, the department has found significant justification to open this investigation. The investigation will evaluate whether CDCR protects people incarcerated at Central California Women’s Facility and the California Institution for Women from sexual abuse by correctional staff.
“No woman incarcerated in a jail or prison should be subjected to sexual abuse by prison staff who are constitutionally bound to protect them,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Every woman, including those in prison, retains basic civil and constitutional rights and should be treated with dignity and respect. California must ensure that the people it incarcerates are housed in conditions that protect them from sexual abuse. This investigation will determine whether California is meeting its constitutional obligations.”
“Concern about the physical safety of people inside California women’s prisons is not new,” said U.S. Attorney Phillip A. Talbert for the Eastern District of California. “Media coverage, state audits, advocates’ efforts and private litigation have sought to draw attention to an issue often unseen by many in the community. This investigation responds to those concerns and will aim to ensure that California is meeting its constitutional duty to incarcerated individuals.”
“Sexual abuse and misconduct will not be tolerated in prisons,” U.S. Attorney Martin Estrada for the Central District of California said. “Together, with our colleagues in the Eastern District and the Civil Rights Division, my office will thoroughly investigate the conditions at Central California Women’s Facility and the California Institution for Women to determine whether California is meeting its constitutional obligations to incarcerated persons.”
- Women have filed hundreds of private lawsuits in the past two years alleging officer sexual abuse of people incarcerated at the Central California Women’s Facility over the last decade, ranging from allegations of inappropriate groping during searches and genital rubbing to forcible rape.
- This week in state court, a trial is scheduled to begin involving allegations that a former correctional officer at the Central California Women’s Facility engaged in widespread sexual assaults. Of course, these are allegations and the state process will proceed.
- A civil lawsuit was filed on behalf of 21 women incarcerated at the California Institution for Women and included allegations of forcible rape and penetration, groping, oral copulation, as well as threats of violence and punishment with abusive conduct ranging from 2014 to 2020.
- Correctional staff at both facilities reportedly sought sexual favors in return for contraband and privileges.
- The correctional officers named in these allegations range in rank and have included the very people responsible for handling complaints of sexual abuse made by women incarcerated at these facilities.
- In March, a working group established by the State and composed of advocacy groups and community-based organizations published a report to the California Legislature that identified longstanding cultural deficiencies in addressing staff sexual abuse, including an unsafe and inaccessible reporting process and the absence of staff accountability.
Justice Department officials have informed California state officials of the investigation. The department has not reached any conclusions regarding the allegations in this matter. The investigation will be conducted under the Civil Rights of Institutionalized Persons Act. This statute gives the department the authority to investigate systemic violations of the rights of individuals in institutional settings, including prisons.
The Civil Rights Division’s Special Litigation Section is conducting this investigation jointly with the U.S. Attorneys’ Offices for the Eastern and Central Districts of California. Individuals with relevant information are encouraged to contact the department via phone at 1-888-392-9490 or by email at [email protected].
Additional information about the Civil Rights Division’s work regarding correctional facilities is available on its website at www.justice.gov/crt/rights-persons-confined-jails-and-prisons.
Four Sacramento Men Charged in Federal Grand Jury Indictment Alleging They Kidnapped Antelope Valley BusinessmanRead the Press Release
LOS ANGELES – Three Sacramento men have been arrested on a two-count indictment charging them with kidnapping an Antelope Valley business owner at gunpoint last year, in an alleged attack in which the victim was beaten, his home was burglarized, and he was abandoned in a desolate part of California, the Justice Department announced today. A fourth defendant remains at large.
The indictment, returned August 27 and unsealed Tuesday, charges the following defendants with two counts of conspiracy to commit kidnapping and kidnapping:
- Shanjeet Brar, 57;
- Jerome Franklin Jr., 43;
- Peter Arafiles Jr., 29; and
- Andrae Hawkins, 39.
Brar, Arafiles, and Hawkins, who were arrested last week, are expected to be arraigned in the United States District Court in downtown Los Angeles in the coming weeks. Franklin remains at large.
“These defendants are charged with putting the victim through a terrifying ordeal, one that will leave lasting emotional and psychological scars,” said United States Attorney Martin Estrada. “We will not tolerate such brazen acts of violence and will continue to collaborate with our law enforcement partners to ensure stiff penalties for perpetrators of such violent acts.”
“The community can rest assured that the perpetrators of this violent and heinous kidnapping are now in custody and will face serious consequences for their actions,” said Akil Davis, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The exemplary collaboration and perseverance from the men and women of the FBI and our law enforcement partners resulted in today's arrests and have made our streets safer.”
According to the indictment and underlying criminal complaint, on October 27, 2023, the defendants traveled from Sacramento to Lancaster to kidnap the victim at gunpoint from the victim’s workplace. They beat the victim, zip-tied his hands, and duct-taped his turban over his face. They demanded $100,000 or more from him, as well as gold and jewelry. They threatened to kill the victim if he did not comply with their demands and told him, “This is your last day.”
While the victim was kidnapped, some of the defendants traveled to the victim’s home to burglarize it. After the victim’s wife noticed the burglars on their home security system, she contacted the victim’s phone, which was in the kidnappers’ possession. The kidnappers eventually abandoned the victim in a desolate area.
Brar allegedly rented one of the two vehicles used in the kidnapping – specifically, the one used in the burglary.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
If convicted of all charges, the defendants would face a statutory maximum sentence of life in federal prison.
Operation Safe Cities establishes strategic enforcement priorities with an emphasis on prosecuting the most significant drivers of violent crime. Across this region, the most damaging and horrific crimes are committed by a relatively small number of particularly violent individuals. This strategic enforcement approach is expected to increase the number of arrests, prosecutions and convictions of recidivists engaged in the most dangerous conduct. It is designed to improve public safety across the region by targeting crimes involving illicit guns, prohibited persons possessing firearms, or robbery crews that cause havoc and extensive losses to retail establishments.
The FBI and the Los Angeles County Sheriff’s Department are investigating this matter.
Assistant United States Attorneys Kevin J. Butler and Jena A. MacCabe of the Violent and Organized Crime Section are prosecuting this case.
Federal, County, and City Law Enforcement Officials Announce Initiative to Combat Sexual Exploitation CrimesRead the Press Release
LOS ANGELES – Federal and local law enforcement officials today announced a significant collaborative effort aimed at combatting human trafficking and the sexual exploitation of minors on the Figueroa Corridor in South Los Angeles.
United States Attorney Martin Estrada, Los Angeles Mayor Karen Bass, Los Angeles City Attorney Hydee Feldstein Soto, Los Angeles County District Attorney George Gascón, Los Angeles Police Chief Dominic Choi, FBI Assistant Director in Charge Akil Davis, Homeland Security Investigations Special Agent in Charge Eddy Wang, and Los Angeles City Councilmember Marqueece Harris-Dawson made the announcement.
The criminal cases announced today involve the Figueroa Corridor – a 3.5-mile stretch of Figueroa Street stretching from Gage Avenue down to Imperial Highway, long known as a haven for prostitution.
The initiative – called the Figueroa Corridor Human Trafficking Initiative – features federal and local law enforcement working together to target human traffickers and those who perpetuate illegal sex work, especially involving minors. This initiative also is designed to help victims – the young women and girls who perform the sex work – to find opportunities and to help get them off the streets.
“The Figueroa Corridor area is ground zero for human trafficking and victims are abused and exploited there every day,” said United States Attorney Martin Estrada. “With this initiative, we are combining federal and local resources to focus on prosecuting more cases federally, particularly those involving victims who are children, and coordinating with our local partners to hold perpetrators accountable. It is imperative that we take an all-hands approach to stop the human trafficking happening right in our backyard.”
“Often, people think of human trafficking as something that happens only in other countries, but it happens in our own City,” said Los Angeles Mayor Karen Bass. “This is an issue that community leaders and former foster youth have been working to fight back against for decades and today’s announcement continues a commitment to protecting children, many of whom have spent time in the child welfare system, and hold traffickers and abusers accountable. I thank our law enforcement partners, especially the hardworking officers of LAPD’s 77th Division, for their continued work on this important issue."
“We are so proud of this unprecedented strategic collaboration, with all of our justice partners leveraging their resources. We have made tremendous progress in our efforts to combat the human trafficking and sexual exploitation of minors that has plagued the Figueroa Corridor for far too long,” said Los Angeles City Attorney Hydee Feldstein Soto. “By disrupting the illegal activity and the businesses that have harbored it and with our U.S. Attorney taking the lead on federal felony prosecutions, we are declaring loud and clear that our children are not for sale, and our community will not be a hub for sex trafficking of minors.”
“In the fight against human trafficking, the Los Angeles County District Attorney’s Office has made significant strides thanks to the relentless dedication of our prosecutors and the unwavering support of our multi-agency law enforcement partners. This collaborative effort has been instrumental in bringing traffickers to justice and dismantling these heinous operations,” said Los Angeles County District Attorney George Gascón. “Equally important is our dedication to supporting survivors through LADA’s Bureau of Victim Services. Our team is trained to provide trauma-informed care, offering survivors the support they need to heal and rebuild their lives. From the moment they come into contact with our office through to their testimony in court, we stand by their side, ensuring they are treated with the utmost respect and care. We recognize that the fight against human trafficking is ongoing. Together, we will continue to advance justice and work toward a future where human trafficking is eradicated from our community.”
The criminal cases announced today are:
United States v. O’Neal
Christian Brandon O’Neal Scurlock, 21, of Moreno Valley, has been indicted for allegedly sex trafficking two minors – including a 13-year-old girl – and transporting the minor victims across state lines for the purposes of engaging in prostitution. Last month, a federal grand jury returned an indictment charging O’Neal with two counts of sex trafficking of a minor and two counts of transportation of a minor in interstate commerce to engage in prostitution and criminal sexual activity.
According to an affidavit that supported a criminal complaint previously filed in this case, in April 2024, officer with the Las Vegas Metropolitan Police Department stopped O’Neal, who had been seen grabbing a young girl by her neck and pushing her into a Mercedes-Benz. When the officers approached, they found two minor girls inside the car – one victim was 13 years old and the other victim was 16 years old. Officers saw several condoms inside the car in plain view.
A record check of the girls revealed that both had been reported as missing juveniles out of California. Both victims told police that O’Neal had brought them to Las Vegas to provide prostitution services as minor commercial sex workers and that they usually worked on “Fig,” short for Figueroa Street in Los Angeles. O’Neal required both minor victims to give him the money they earned from prostitution.
Further investigation revealed that O’Neal advertised himself on Instagram as being a pimp. A review of text messages from the victims’ phones corroborated that O’Neal was their pimp and he had them engaged as minor commercial sex workers on the Figueroa Corridor. Also, in March 2024, police camera footage on the Figueroa Corridor showed O’Neal appearing to yell at the 13-year-old victim, take her clothes, and depart the area, leaving her completely naked on the street.
O’Neal was arrested on August 7, was ordered jailed without bond by a federal magistrate judge and has remained in federal custody since then. He pleaded not guilty on August 27 to the criminal charges against him and an October 7 trial date has been scheduled in this case.
Assistant United States Attorneys Kelsey A. Stimson and Danbee C. Kim of the General Crimes Section and Kathy Yu, Chief of Ethics and Post-Conviction Review, are prosecuting this case.
United States v. Castillo, et al.
Nanci Jasmin Castillo, 31, and Jonathan Gonzalez-Reyes, 38, both of Anaheim, are charged in a six-count federal grand jury indictment alleging they befriended a 13-year-old girl, provided her with alcohol, and sexually assaulted her, taking photographs and making videos of the attack.
According to court documents, Castillo befriended a 13-year-old identified in court documents as “Victim 1.” In February 2021 at Castillo’s Anaheim home, Castillo and Gonzalez-Reyes allegedly sexually assaulted the victim – to whom Castillo had given an alcoholic beverage after the victim previously had taken Xanax anti-anxiety medication – while the victim was going in and out of consciousness. The defendants photographed and made videos of the attack.
A search of Gonzalez-Reyes’ phone and Castillo’s iCloud account by law enforcement revealed the existence of child sexual abuse material (CSAM) depicting the victim and the defendants. Additionally, law enforcement found evidence that Gonzalez-Reyes sent copies of the CSAM to Castillo.
Castillo and Gonzalez-Reyes discussed helping the victim run away from home and possibly trying to find her work on “Fig,” a common reference for the Figueroa Corridor, according to court documents.
Both defendants are charged with one count of production of child pornography. Castillo is further charged with one count of the use of a facility of interstate commerce to attempt to induce a minor to engage in criminal sexual activity and one count of possession of child pornography. Gonzalez-Reyes also is charged with two counts of distribution of child pornography and one count of possession of child pornography.
Castillo and Gonzalez-Reyes have pleaded not guilty to charges and are scheduled to go to trial in March 2025. They have been in federal custody since June 2024.
Assistant United States Attorneys Claire E. Kelly and Chelsea Norell of the Violent and Organized Crime Section are prosecuting this case.
United States v. Bradford
Donavin Dwayne Bradford, 33, of South Los Angeles, is serving sentence of life in federal prison after being convicted of recruiting and enticing teenage girls for whom he acted as a “pimp” and providing them for commercial sex work.
From the summer of 2021 to February 2022, Bradford caused one of the minor victims – a then-15-year-old girl – to be used for commercial sex acts. Bradford recruited the victim to work for him as a commercial sex worker. As the victim’s “pimp,” Bradford expected the girl to earn him $1,000 per night.
Bradford advertised the girl for commercial sex work on various websites, and customers who responded to the ads were directed to various hotels and motels where they engaged in commercial sex acts with the victim. Sometimes the minor victim would be required to perform sex acts. Customers paid Bradford for “dates” with the victim or she would be required to give Bradford her earnings.
Bradford assaulted the minor victim when she tried to stop working for him on two separate occasions. Bradford also filmed himself engaging in sex acts on two separate occasions with her. From March 2021 to November 2021, Bradford recruited and enticed two other girls – ages 16 and 17 – to engage in commercial sex activity.
At the conclusion of a five-day trial in April 2023, a jury found Bradford guilty of one count of conspiracy to commit sex trafficking with a minor, three counts of sex trafficking of a minor, three counts of sexual exploitation of a minor for the purpose of producing a sexually explicit visual depiction, one count of possession of child pornography, and one count of sex trafficking through threats of force, fraud, or coercion.
Assistant United States Attorneys Chelsea Norell of the Violent and Organized Crime Section and Kathy Yu, Chief of Ethics and Post-Conviction Review, prosecuted this case.
“Our women, youth and communities deserve better, and this is just the beginning of our focused multi agency effort to stop human trafficking along the Figueroa Corridor,” said Los Angeles Police Chief Dominic Choi. “I am grateful to our federal, state and local partners who have come together with the same vision and tenacity on this topic.”
“The FBI and its partners will continue to aggressively investigate crimes which affect our quality of life” said Akil Davis, Assistant Director in Charge of the FBI Los Angeles Field Office. “Collaboration with our law enforcement partners is key to accomplishing anything we set out to do. And when we leverage the resources and strengths of our partners, we can do more to protect the American people than we could ever accomplish on our own.”
“HSI’s efforts to combat human trafficking in Los Angeles is most effective with our partnerships with our federal, state and local partnerships,” said HSI Los Angeles Special Agent in Charge Eddy Wang. “The success of our investigations is also highly reliant on our victim-centered approach, where we place equal value on the identification and well-being of victims and on the investigation and prosecution of traffickers.”
Indictments and criminal complaints contain allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
Any member of the public who has information related to child sex crimes is encouraged to call the FBI’s Los Angeles Field Office at (310) 477-6565 or report tips online at https://tips.fbi.gov.
Former San Gabriel Valley Teacher Charged with Receiving and Possessing Child Sexual Abuse MaterialRead the Press Release
LOS ANGELES – A former elementary school teacher in the San Gabriel Valley is scheduled for arraignment today on a federal grand jury indictment charging him with receiving and possessing child sexual abuse material.
Steven Pilar, 47, of Las Vegas, is charged in a four-count federal indictment with two counts of receiving child pornography and two counts of possessing child pornography.
A federal grand jury returned the indictment on July 19, 2024. Pilar was arrested on August 2 in Las Vegas, where he made his initial appearance. A federal magistrate judge in Nevada ordered Pilar jailed without bond. Pilar’s arraignment is scheduled for this afternoon in United States District Court in downtown Los Angeles.
According to the indictment, on February 8, 2020, and April 10, 2020, Pilar knowingly received and downloaded over 400 videos and images of child sexual abuse material (CSAM) via BitTorrent for viewership. Pilar was employed as an elementary school teacher in La Puente at the time. He no longer works at the school.
Pilar was arrested on state charges, which were later dropped so a federal case could be pursued.
“This defendant, whose former job put him in a position of trust with children, is accused of participating in an underground market that trades on the sexual exploitation of kids,” said United States Attorney Martin Estrada. “Protecting children from sexual predators is critical and my office will be unrelenting in our efforts to punish those who commit these crimes.”
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty beyond a reasonable doubt in court.
If convicted, Pilar would face a mandatory minimum sentence of five years in federal prison and a statutory maximum sentence of 80 years in federal prison.
The FBI and the San Bernardino County Sheriff’s Department are investigating this matter.
Assistant United States Attorney Joshua J. Lee of the General Crimes Section is prosecuting this case.
Palmdale Man Sentenced to Federal Prison for Illegally Importing Ancient Roman Mosaic from Syria Depicting HerculesRead the Press Release
LOS ANGELES – An Antelope Valley man was sentenced today to three months in federal prison for illegally importing an ancient floor mosaic from Syria depicting the Roman demigod Hercules that is believed to have been made nearly two millennia ago.
Mohamad Yassin Alcharihi, 57, of Palmdale, was sentenced by United States District Judge George W. Hu, who also granted the government’s application for a preliminary order of forfeiture for the mosaic.
At the conclusion of a five-day trial, a jury in June 2023 found Alcharihi guilty of one count of entry of falsely classified goods.
In August 2015, Alcharihi illegally imported the mosaic – which dates from the era of the Roman Empire – by means of a false classification as to its value and quality. The mosaic arrived at Alcharihi’s direction at the Port of Long Beach as part of a shipment from Turkey.
The mosaic depicts a story from ancient Greek and Roman mythology depicting Hercules rescuing Prometheus, who had been chained to a rock by his fellow gods for stealing fire for humanity.
Alcharihi purchased the mosaic in 2015. Instead of disclosing to United States customs officials that he was importing a Syrian antiquity for which he had paid approximately $12,000 and that he knew was worth much more, Alcharihi lied to his customs broker and caused it to falsely declare that he was importing ceramic tiles from Turkey valued at less than $600. Alcharihi paid $40,000 to restore the mosaic and the government’s appraisal expert valued the mosaic at $450,000.
The false classifications occurred months after the United Nations Security Council adopted a resolution condemning the destruction of cultural heritage in Syria, particularly by the terrorist organizations Islamic State in Iraq and the Levant (ISIL) and Al-Nusrah Front.
The mosaic was placed inside a large metal shipping container holding many vases and two other mosaics. An x-ray image of the container taken by CBP showed that the mosaic was hidden in the front of the container – away from the rear access doors – behind a pile of vases. After passing through customs, the mosaic was shipped via truck to Alcharihi’s home.
The mosaic is 15 feet long, 8 feet tall, and weighs approximately 2,000 pounds. It has been stored at a secure facility in Los Angeles since federal agents seized it from Alcharihi’s garage in March 2016.
The FBI’s Art Crime Team and Homeland Security Investigations investigated this matter.
Assistant United States Attorneys Mark A. Williams and Matthew W. O’Brien of the Environmental Crimes and Consumer Protection Section, Assistant United States Attorney Maxwell K. Coll of the Asset Forfeiture and Recovery Section and Justice Department Trial Attorney Christian A. Levesque of the Human Rights and Special Prosecutions Section prosecuted this case.
Culver City Restauranteur Pleads Guilty to Fraudulently Obtaining More Than $4 Million in COVID-19 Business-Relief LoansRead the Press Release
SANTA ANA, California – A Culver City man and restauranteur who owns a hospitality company that has developed restaurants and hotels in California, Tennessee, and Kentucky pleaded guilty today to fraudulently obtaining more than $4 million COVID-19 economic-relief loans.
Philip Frederick Camino, 45, pleaded guilty to one count of conspiracy to commit wire fraud.
During the spring of 2020, Congress created two federal programs to provide financial assistance to Americans suffering economic harm because of the COVID-19 pandemic.
According to his plea agreement, Camino owns several companies based in Hollywood, Westwood, Studio City, and Beverly Hills as well as in Arizona. From April 2020 to April 2021, Camino submitted and caused to be submitted false and fraudulent applications to the United States Small Business Administration (SBA) and banks for Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL).
In these applications, Camino made false statements, including inflating the number of employees to whom were paid wages, providing fictitious federal tax forms that were never filed with the IRS, and falsely certifying that the loan proceeds would be used for permissible business purposes.
Relying on Camino’s false information, the SBA and lenders approved and funded these loans, the proceeds of which were transferred to a bank account under Camino’s control. Camino used most of the fraudulently obtained money for expenses prohibited under the PPP and EIDL programs, including paying more than $100,000 in kickbacks to his accomplice.
For example, in June 2020, Camino emailed a bank containing false documentation to support a $144,270 fraudulent PPP loan application on behalf of a company controlled by a co-conspirator.
In total, Camino submitted more than 20 fraudulent loan applications from which he obtained more than $4 million.
United States District Judge Fred W. Slaughter scheduled a March 6, 2025, sentencing hearing, at which time Camino will face a statutory maximum sentence of 20 years in federal prison.
Homeland Security Investigations, the FBI, and IRS Criminal Investigation are investigating this matter.
Assistant United States Attorney Jennifer L. Waier of the Santa Ana Branch Office is prosecuting this case.
Indictment Charges Santa Clarita Man, 6 Others with Facilitating Crime Tourism Group That Took in More Than $5 Million in Illicit ProceedsRead the Press Release
INDICTMENTLOS ANGELES – Law enforcement today arrested six defendants that a federal grand jury charged in a 46-count indictment alleging a Santa Clarita Valley man facilitated a crime tourism group of South Americans and other individuals who engaged in burglaries, thefts, and other crimes throughout the United States, then laundered millions of dollars in illicit proceeds.
The indictment, returned on August 1 and unsealed today, charges seven defendants with multiple felony offenses, including wire fraud, money laundering, conspiracy, and structuring transactions to avoid federal financial reporting requirements.
Crime tourism theft groups are comprised of individuals, often originating from outside of the United States, including from South America and elsewhere, who engage in burglaries, thefts, and other crimes throughout the U.S. As part of the modus operandi of crime tourism theft groups, individuals would enter the United States and engage in theft crime sprees. The fruits of the thefts were often shared with facilitators and co-conspirators who assisted the crime tourists in the commission of their crimes, as well as others, both inside and outside the United States.
“Crime tourism is a major problem impacting not just Southern California, but our entire nation,” said United States Attorney Martin Estrada. “These defendants facilitated and directed crime tourists who committed hundreds of robberies across the country – in essence, they acted as quarterbacks for a team of thieves. We will continue to work with our local partners to hold accountable those who would come to our country and take advantage of our liberties to steal from the American people.”
“Today, we dismantled a non-traditional facilitator of organized crime, and now we have a blueprint for future investigations,” said Akil Davis, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “We hope these arrests will discourage future businesses from conducting similar operations, thus reducing the number of thefts and burglaries in our communities.”
“This investigation required years of hard work and dedication on behalf of the Los Angeles Police Department and our partners,” said LAPD Chief, Dominic Choi. “I’m pleased that our collective efforts have resulted in the apprehension of these career criminals who have made it their business to victimize our residents and facilitate the movement of foreign criminals. I’m convinced that having them off the streets makes our communities safer.”
According to the indictment, Juan Carlos Thola-Duran, 57, a.k.a. “Parcero,” of Canyon Country, and his live-in girlfriend, Ana Maria Arriagada, 41, a.k.a. “Parcera,” controlled and operated defendant Driver Power Rentals (DPR), a Van Nuys-based car rental or dealership business. Arriagada was DPR’s registered owner.
From at least January 2018 to July 2024, Thola-Duran directed associates, often members of crime tourism theft groups traveling from South America, to travel to various parts of the United States to commit thefts, including shoplifting goods from stores, burglarizing residences and commercial businesses, and stealing victims’ credit cards and debit cards.
Thola-Duran, Arriagada, and DPR provided DPR vehicles for the thief co-conspirators to drive throughout the United States to commit thefts and burglaries and – to make the car rentals appear legitimate and maintain anonymity – require their co-conspirators to provide false identification when renting a vehicle for DPR’s records.
Thola-Duran and Arriagada directed the thief co-conspirators who stole credit or debit cards to immediately go to stores such as Target, Best Buy, The Home Depot, and others to max out the stolen cards by purchasing electronics, gift cards, designer purses and other high-end luxury goods before the stolen cards could be frozen or cancelled.
Then, Thola-Duran arranged to the thieves to deliver stolen or fraudulently obtained goods to associates at DPR or to mail them to other co-conspirators, including defendant Miguel Angel Barajas, 57, of Northridge, or to other conspirators at a FedEx store in Sherman Oaks. At Thola-Duran’s direction, defendants Barajas, John Carlo Thola, 33, of Canoga Park, and others picked up the parcels then delivered them to Thola-Duran and other conspirators. Thola-Duran then acted as a “fence” to buy the goods – at a fraction of their retail value – and pay the thieves a percentage of the items’ value. He then sold the stolen goods to other buyers for approximately $5.5 million over the course of the conspiracy, including approximately $5.1 million sent to various bank accounts controlled by the co-conspirators.
The defendants allegedly used their ill-gotten gains to purchase and maintain assets, including real estate and horses, and structured cash withdrawals to avoid triggering the requirement that banks report transactions exceeding $10,000 to the U.S. Treasury Department.
The indictment further alleges that Thola-Duran, Arriagada, and others from May 2020 to June 2021 conspired to fraudulently obtain $274,998 in COVID-19 business relief loans.
“Since 2019, we have arrested over 130 suspects responsible for perpetrating these crimes, with the vast majority using cars supplied by Driver Power Rentals,” said Ventura County Sheriff James Fryhoff. “Our efforts aren’t stopping there. We formally partnered with the FBI, creating the Ventura County Major Theft Task Force. This task force has been instrumental in pursuing federal charges against Thola-Duran and other members of his criminal organization.”
“Driver Power Rentals provided cars that were allegedly used to take high-end merchandise and jewelry from Ventura County homeowners,” said Ventura County District Attorney Erik Nasarenko. “Taking down a key operator who fueled crime tourism is essential to neighborhood safety, and I am grateful to U.S. Attorney Estrada and his team for aggressively prosecuting this network.”
“These criminals were running a burglary operation with a sophistication that rivals Amazon and instead of dispatching delivery drivers, they were dispatching trained thieves throughout Southern California to steal from what should be where we are safest – our homes,” said Orange County District Attorney Todd Spitzer. “Crime doesn’t pay in Orange County and individuals who engage in crime tourism are on notice that my office will work with our local and federal partners to continue demanding accountability and bringing those who victimize our community to justice.”
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
If convicted, the defendants would face a statutory maximum sentence of 20 years in federal prison for each wire fraud- and money laundering-related count, up to 10 years in federal prison for each structuring count, and up to five years in federal prison for the conspiracy to transport stolen property interstate count.
The FBI, the Los Angeles Police Department, the Ventura County Sheriff’s Office, the Ventura County District Attorney’s Office, and the Orange County District Attorney’s Office are investigating this matter. The United States Postal Inspection Service, the Meriwether County (Georgia) Sheriff’s Office and the Scottsdale (Arizona) Police Department provided assistance.
Assistant United States Attorneys Jennifer Chou and Lindsay M. Bailey of the Violent and Organized Crime Section and Assistant United States Attorney Ryan J. Waters of the Asset Forfeiture and Recovery Section are prosecuting this case.
Former Army Private Found Guilty of Child Exploitation Charges, Including Production of Sexually Explicit Material of MinorRead the Press Release
LOS ANGELES – A federal jury today found a former Army private based at Fort Irwin guilty of producing child sexual abuse material (CSAM) depicting a 14-year-old girl, using Snapchat to receive CSAM of her when she was 13 years old, and possessing CSAM featuring her on his iPhone. In addition, White was found guilty of receiving CSAM of a 15-year-old girl via Snapchat.
Parker William White, 23, of Johnsonville, New York, was found guilty of one count of production of child pornography, three counts of receipt of child pornography, and one count of possession of child pornography.
According to evidence presented during a five-day trial, in January 2022, the Department of Children and Families in Bay County, Florida received a tip that White was engaging in an online, sexual relationship with a 14-year-old girl. Later, investigators found CSAM of her on White’s iPhone as well as CSAM that White had received via Snapchat featuring her and another minor.
White used Instagram, Snapchat, and other social media platforms to find minor “girlfriends” as young as 13 years old, according to court documents. White groomed these minor girls by boasting about his military service, telling them that they were “beautiful” and “queens,” and pretending to be in love with them. In some instances, White deceptively portrayed himself as teenager to earn their trust. White’s behavior would then escalate to a practice that he called “teasing.” He would send these children sexually explicit videos and photographs of himself via social media and encourage them to “tease” him back by doing the same.
United States District Judge André Birotte Jr. scheduled a February 7, 2025 sentencing hearing, at which time White will face a mandatory minimum sentence of 15 years and a statutory maximum sentence of 100 years in federal prison.
White has been in custody since his arrest.
Homeland Security Investigations, the Department of the Army Criminal Investigation Division, and the Bay County Sheriff’s Office investigated this case.
Assistant United States Attorneys Lyndsi C. Allsop of the Violent and Organized Crime Section and Laura A. Alexander of the Environmental Crimes and Consumer Protection Section are prosecuting this case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Justice Department’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Fiscalía Federal anuncia cargos contra un grupo que facilitó y organizó el turismo criminal de SudaméricaRead the Press Release
LOS ÁNGELES – El día de hoy, las fuerzas del orden público aprehendieron a seis acusados que un gran jurado federal imputó mediante una acusación formal de 46 cargos que alega que un hombre del Valle de Santa Clarita facilitó un grupo de turismo criminal consistente de sudamericanos y otras personas que participaron en robos con allanamiento de morada, hurtos y otros delitos por todos los Estados Unidos y luego lavaron millones de dólares estadounidenses en ganancias ilícitas.
La acusación formal, dictada el 1 de agosto y publicada el día de hoy, imputa a siete acusados de varios delitos graves, entre ellos fraude electrónico, lavado de dinero, asociación delictuosa y la estructuración de transacciones a modo de evadir los requisitos federales de presentación de informes financieros.
Los grupos de turismo criminal para robo consisten en personas, a menudo oriundas de Sudamérica y otros lugares fuera de los Estados Unidos, que participan en robos con allanamiento de morada, hurtos y otros delitos por todos los EE. UU. Como parte del modo de operación de los grupos de turismo criminal para robo, las personas ingresan a los Estados Unidos y participan en oleadas de delitos de robo. Con frecuencia, los frutos de los robos se comparten con los facilitadores y coconspiradores, quienes ayudan a los turistas delictivos a cometer sus delitos, así como con otras personas tanto dentro como fuera de los Estados Unidos.
“El turismo criminal es un problema importante que afecta no sólo al sur de California, sino a toda nuestra nación,” dijo el fiscal federal Martín Estrada. “Estos acusados facilitaron y dirigieron el crimen a turistas que cometieron cientos de robos en todo el país – en esencia, actuaron como mariscales de campo de un equipo de ladrones. Continuaremos trabajando con nuestros socios locales para hacer responsables a quienes vengan a nuestro país y aprovechen nuestras libertades para robarle al pueblo estadounidense.”
“Hoy desmantelamos un facilitador no tradicional del crimen organizado y ahora tenemos un plan para futuras investigaciones,” dijo Akil Davis, subdirector a cargo de la oficina local del FBI en Los Ángeles. "Esperamos que estos arrestos disuadan a futuras empresas de realizar operaciones similares, reduciendo así el número de robos y hurtos en nuestras comunidades."
"Esta investigación requirió años de mucho esfuerzo y dedicación por parte del Departamento de Policía de Los Ángeles y nuestros socios," dijo el jefe de LAPD, Dominic Choi. “Me complace que nuestros esfuerzos colectivos hayan dado como resultado la detención de estos delincuentes profesionales que se han dedicado a victimizar a nuestros residentes y facilitar el movimiento de delincuentes extranjeros. Estoy convencido de que sacarlos de las calles hace que nuestras comunidades sean más seguras.”
Según la acusación formal, Juan Carlos Thola-Durán, de 57 años, alias "Parcero", de Canyon Country, y su pareja conviviente Ana María Arriagada, de 41 años, alias "Parcera", controlaban y operaban la empresa acusada Driver Power Rentals (DPR), un negocio de arrendamiento o venta de autos con sede en Van Nuys. Arriagada era la dueña registrada de DPR.
Desde al menos enero de 2018 hasta julio de 2024, Thola-Durán dirigió a socios, con frecuencia miembros de grupos de turismo criminal para robo que viajaban desde Sudamérica, para que viajaran a varias partes de los Estados Unidos para cometer robos, incluso los robos de artículos en tiendas, robos con allanamiento de moradas y negocios, y robos de tarjetas de crédito y débito de víctimas.
Thola-Durán, Arriagada y DPR suministraban vehículos de DPR para que los coconspiradores viajaran por los Estados Unidos para cometer hurtos y robos con allanamiento de morada, y para que los arrendamientos de autos parecieran legítimos y así mantener el anonimato, requerían que sus coconspiradores suministraran tarjetas de identificación falsas al arrendar un vehículo para fines de los registros de DPR.
Thola-Durán y Arriagada les daban instrucciones a los ladrones coconspiradores que se robaban tarjetas de crédito o débito para que fueran inmediatamente a tiendas como Target, Best Buy, The Home Depot y otras, y gastaran el máximo crédito disponible en la compra de dispositivos electrónicos, tarjetas de regalo, bolsos de diseñador y otros bienes de alto lujo antes de que las tarjetas robadas pudieran ser restringidas o canceladas.
Luego, Thola-Durán hacía arreglos para que los ladrones entregaran los artículos robados u obtenidos fraudulentamente a socios en DPR, o bien los enviaran por correo a otros coconspiradores, entre ellos el acusado Miguel Ángel Barajas, de 57 años, de Northridge, u otros coconspiradores en una tienda FedEx en Sherman Oaks. Por instrucción de Thola-Durán, los acusados Barajas, John Carlo Thola, de 33 años, de Canoga Park, y otros recogían los paquetes y luego se los entregaban a Thola-Durán y otros coconspiradores. Luego Thola-Durán se desempeñaba como "comerciante de artículos robados" y compraba los artículos, a una fracción de su valor en el mercado minorista, y les pagaba a los ladrones un porcentaje del valor de los artículos. Luego, en el transcurso de la asociación delictuosa, procedió a venderles a otros compradores los artículos robados por un total aproximado de $5.5 millones de dólares estadounidenses, incluidos aproximadamente $5.1 millones de dólares estadounidenses enviados a diversas cuentas bancarias controladas por los coconspiradores.
Presuntamente, los acusados usaron sus ganancias mal habidas para comprar y mantener activos, entre ellos inmuebles y caballos, y estructuraron retiros de dinero en efectivo de manera que evitaran activar el requisito de que los bancos presenten informes al Departamento del Tesoro de los EE. UU. sobre transacciones que exceden de $10,000 dólares estadounidenses.
La acusación formal alega además que desde mayo de 2020 hasta junio de 2021 Thola-Durán, Arriagada y otros se asociaron delictuosamente para obtener de manera fraudulenta $274,998 dólares estadounidenses en préstamos de socorro financiero para negocios por COVID-19.
Una acusación formal es meramente una alegación. Se presume que todos los acusados son inocentes hasta tanto se pruebe su culpabilidad más allá de una duda razonable en un tribunal de ley.
“Desde 2019, hemos arrestado a más de 130 sospechosos responsables de perpetrar estos delitos, y la gran mayoría utilizó automóviles suministrados por Driver Power Rentals,” dijo el sheriff del condado de Ventura, James Fryhoff. “Nuestros esfuerzos no terminan ahí. Nos asociamos formalmente con el FBI y creamos el Grupo de Trabajo contra Robos Mayores del Condado de Ventura. "Este grupo de trabajo ha sido fundamental para presentar cargos federales contra Thola-Duran y otros miembros de su organización criminal."
“Driver Power Rentals proporcionó automóviles que supuestamente se utilizaron para llevarse mercancías y joyas de alta gama de los propietarios del condado de Ventura,” dijo el fiscal de distrito del condado de Ventura, Erik Nasarenko. "Derribar a un operador clave que impulsó el turismo criminal es esencial para la seguridad de la comunidad, y agradezco al fiscal federal Estrada y su equipo por procesar agresivamente esta red."
"Estos delincuentes estaban llevando a cabo una operación de robo con una sofisticación que rivaliza con la de Amazon y, en lugar de enviar conductores de reparto, estaban enviando ladrones entrenados por todo el sur de California para robar en lo que debería ser el lugar donde estamos más seguros: nuestros hogares," dijo el fiscal de distrito del condado de Orange, Todd. Spitzer. "El crimen no paga en el Condado de Orange y las personas que participan en el turismo criminal están conscientes de que mi oficina trabajará con nuestros socios locales y federales para continuar exigiendo responsabilidad y llevando ante la justicia a quienes victimizan a nuestra comunidad."
Una acusación es simplemente una acusación. Se presume que todos los acusados son inocentes hasta que se demuestre su culpabilidad más allá de toda duda razonable en un tribunal de justicia.
De recibir condenas, los acusados enfrentarían una sentencia estatutaria máxima de 20 años en una prisión federal por cada cargo relacionado con transferencias electrónicas y lavado de dinero, hasta 10 años en una prisión federal por cada cargo de estructuración y hasta cinco años en una prisión federal por el cargo de asociación delictuosa para transportar bienes robados entre estados.
El FBI, la Fiscalía de Distrito del Condado de Orange, la Fiscalía de Distrito del Condado de Ventura, la Oficina del Sheriff del Condado de Ventura y el Departamento de Policía de Los Ángeles investigan esta causa. El Servicio de Inspección Postal de los Estados Unidos, la Oficina del Sheriff del Condado de Meriwether (Georgia) y el Departamento de Policía de Scottsdale (Arizona) prestaron asistencia.
Las Fiscales Auxiliares de los Estados Unidos Jennifer Chou y Lindsay M. Bailey de la Sección de Delincuencia Organizada y Violenta y el Fiscal Auxiliar de los Estados Unidos Ryan J. Waters de la Sección de Decomiso y Recuperación de Activos procesan esta causa.
Founder and Chief Executive Officer of Injectable Stem Cell Product Manufacturer Pleads Guilty to Felony Distribution of Unapproved DrugRead the Press Release
The founder and chief executive officer of a California-based company that marketed stem cell-based products linked to multiple hospitalizations pleaded guilty yesterday to a felony violation of the Federal Food, Drug and Cosmetic Act.
John W. Kosolcharoen, 53, most recently of Orange County, California, pleaded guilty to introducing an unapproved new drug into interstate commerce with the intent to defraud and mislead. Kosolcharoen is currently in custody serving a sentence for a separate, unconnected conviction. U.S. District Judge Otis D. Wright II for the Central District of California presided over the hearing pursuant to a plea agreement with the government. The court set Kosolcharoen’s sentencing for Sept. 23.
According to court documents, beginning in 2016, Kosolcharoen created two companies, Liveyon LLC and Genetech Inc., to manufacture and distribute injectable stem cell products made from human umbilical cord blood. Liveyon marketed the products under different brand names, including “ReGen.” In pleading guilty, Kosolcharoen admitted that he and others misrepresented ReGen as suitable for the treatment of a variety of conditions, such as lung and heart diseases, autoimmune disorders, Alzheimer’s disease, Parkinson’s disease and others. Liveyon marketed the products throughout the United States until about April 2019 using advertising materials that contained multiple false and misleading statements about their purported safety and effectiveness.
In recent years, the U.S. Food and Drug Administration (FDA) has warned consumers that patients seeking cures and remedies for serious diseases and conditions may be misled about unapproved stem cell products that are illegally marketed, have not been shown to be safe or effective, and, in some cases, may have significant safety issues that put patients at risk. Stem cell products are regulated by FDA, and generally they must have FDA approval before being introduced into interstate commerce.
As part of the plea agreement, Kosolcharoen admitted that to mislead FDA about Liveyon’s activities, he directed Liveyon’s purchase orders to falsely state that the stem cell products were being sold “for research purposes only.” In 2018, FDA and the Centers for Disease Control and Prevention (CDC) received reports of patients in multiple states requiring hospitalization for bacterial infections after receiving Liveyon products. Kosolcharoen admitted that he and others fraudulently induced customers into purchasing stem cell-derived Liveyon products by, among other things, misleading the public about the cause and severity of adverse events suffered by Liveyon patients, and falsely reporting and concealing material facts regarding the outcome of an FDA inspection of Genetech. According to FDA records, that inspection documented evidence of significant deviations from good manufacturing and tissue practices.
“Unapproved stem cell treatments not only endanger public health but also exploit the hopes of patients who seek relief from the most serious of diseases,” said Principal Deputy Assistant Attorney General Brian Boynton, head of the Justice Department’s Civil Division. “The Department of Justice is committed to safeguarding the public from these schemes and will vigorously pursue legal action to hold accountable those who unlawfully market and sell these unproven therapies.”
“This defendant recklessly put people’s lives in danger, giving false hope to patients with serious illnesses,” said U.S. Attorney Martin Estrada for the Central District of California. “Today’s guilty plea shows that we will hold accountable corporate executives and healthcare professionals who put profits over patients.”
“We are grateful for the work by the Department of Justice to hold accountable establishments that prey upon vulnerable populations by marketing potentially dangerous stem cell products with false and misleading claims about their safety and effectiveness,” said Director Peter Marks, M.D., Ph.D. of FDA’s Center for Biologics Evaluation and Research.
“When unscrupulous providers offer umbilical cord blood stem cell products and treatments that are both unapproved and unproven, they put consumers’ health at risk, and multiple users of this firm’s products in fact suffered adverse events,” said Special Agent in Charge Robert Iwanicki of FDA Office of Criminal Investigations Los Angeles Field Office. “FDA will continue to investigate and bring to justice those who endanger the public’s health for material gain.”
“This investigation was a joint effort between multiple federal agencies and state and local health departments to quickly put a stop to the distribution of unsafe, contaminated products,” said Director Michael Bell, M.D. of CDC’s Division of Healthcare Quality Promotion. “The rapid response by our public health system identified products marketed as stem cell treatments to be the source of serious infections in dozens of patients. Our message to all consumers and providers is to heed the warning against the use of unapproved products like these with unproven claims of effectiveness for conditions like joint disease, chronic pain, or COVID-19. Please don’t let products like these put you or your patients’ health at risk.”
FDA’s Office of Criminal Investigations, FBI, Amtrak Office of Inspector General, Defense Criminal Investigative Service, Department of Health and Human Services Office of Inspector General, Department of Labor Employment Benefits Security Administration and California Department of Health Care Services investigated the case.
Assistant U.S. Attorneys Mark Aveis and David Chao for the Central District of California, Assistant Director Ross S. Goldstein and Trial Attorneys Meredith B. Healy, Kathryn A. Schmidt and Peter J. Leininger of the Justice Department’s Consumer Protection Branch are prosecuting the case.
Additional information about the Consumer Protection Branch and its enforcement efforts can be found at www.justice.gov/civil/consumer-protection-branch.
Founder and CEO of Injectable Stem Cell Product Manufacturer Pleads Guilty to Felony Distribution of Unapproved DrugRead the Press Release
LOS ANGELES – The founder and chief executive officer of a California-based company that marketed stem cell-based products linked to multiple hospitalizations has pleaded guilty to a felony violation of the Federal Food, Drug and Cosmetic Act, the Justice Department announced today.
John Warrington Kosolcharoen, 53, most recently of Rancho Santa Margarita, pleaded guilty to one count of introducing an unapproved new drug into interstate commerce with the intent to defraud and mislead. Kosolcharoen is currently in custody serving a sentence for a separate, unconnected conviction.
“This defendant recklessly put people’s lives in danger, giving false hope to patients with serious illnesses,” said United States Attorney Martin Estrada. “Today’s guilty plea shows that we will hold accountable corporate executives and healthcare professionals who put profits over patients.”
According to court documents, beginning in 2016, Kosolcharoen created two companies, the Irvine-based Liveyon LLC and the San Diego-based Genetech Inc., to manufacture and distribute injectable stem cell products made from human umbilical cord blood. Liveyon marketed the products under different brand names, including “ReGen.” In pleading guilty, Kosolcharoen admitted that he and others misrepresented ReGen as suitable for the treatment of a variety of conditions, such as lung and heart diseases, autoimmune disorders, Alzheimer’s disease, Parkinson’s disease and others. Liveyon marketed the products throughout the United States until about April 2019 using advertising materials that contained multiple false and misleading statements about their purported safety and effectiveness.
In recent years, the U.S. Food and Drug Administration (FDA) has warned consumers that patients seeking cures and remedies for serious diseases and conditions may be misled about unapproved stem cell products that are illegally marketed, have not been shown to be safe or effective, and, in some cases, may have significant safety issues that put patients at risk. Stem cell products are regulated by FDA, and generally they must have FDA approval before being introduced into interstate commerce.
As part of the plea agreement, Kosolcharoen admitted that to mislead FDA about Liveyon’s activities, he directed Liveyon’s purchase orders to falsely state that the stem cell products were being sold “for research purposes only.” In 2018, FDA and the Centers for Disease Control and Prevention (CDC) received reports of patients in multiple states requiring hospitalization for bacterial infections after receiving Liveyon products. Kosolcharoen admitted that he and others fraudulently induced customers into purchasing stem cell-derived Liveyon products by, among other things, misleading the public about the cause and severity of adverse events suffered by Liveyon patients, and falsely reporting and concealing material facts regarding the outcome of an FDA inspection of Genetech. According to FDA records, that inspection documented evidence of significant deviations from good manufacturing and tissue practices.
“Unapproved stem cell treatments not only endanger public health but also exploit the hopes of patients who seek relief from the most serious of diseases,” said Principal Deputy Assistant Attorney General Brian Boynton, head of the Justice Department’s Civil Division. “The Department of Justice is committed to safeguarding the public from these schemes and will vigorously pursue legal action to hold accountable those who unlawfully market and sell these unproven therapies.”
“We are grateful for the work by the Department of Justice to hold accountable establishments that prey upon vulnerable populations by marketing potentially dangerous stem cell products with false and misleading claims about their safety and effectiveness,” said Director Peter Marks, M.D., Ph.D. of FDA’s Center for Biologics Evaluation and Research.
“When unscrupulous providers offer umbilical cord blood stem cell products and treatments that are both unapproved and unproven, they put consumers’ health at risk, and multiple users of this firm’s products in fact suffered adverse events,” said Special Agent in Charge Robert Iwanicki of FDA Office of Criminal Investigations Los Angeles Field Office. “FDA will continue to investigate and bring to justice those who endanger the public’s health for material gain.”
“This investigation was a joint effort between multiple federal agencies and state and local health departments to quickly put a stop to the distribution of unsafe, contaminated products,” said Director Michael Bell, M.D. of CDC’s Division of Healthcare Quality Promotion. “The rapid response by our public health system identified products marketed as stem cell treatments to be the source of serious infections in dozens of patients. Our message to all consumers and providers is to heed the warning against the use of unapproved products like these with unproven claims of effectiveness for conditions like joint disease, chronic pain, or COVID-19. Please don’t let products like these put you or your patients’ health at risk.”
FDA’s Office of Criminal Investigations, FBI, Amtrak Office of Inspector General, Defense Criminal Investigative Service, Department of Health and Human Services Office of Inspector General, Department of Labor Employment Benefits Security Administration and California Department of Health Care Services investigated the case.
Assistant United States Attorneys Mark Aveis of the Major Frauds Section and David H. Chao of the General Crimes Section, Assistant Director Ross S. Goldstein and Trial Attorneys Meredith B. Healy, Kathryn A. Schmidt and Peter J. Leininger of the Justice Department’s Consumer Protection Branch are prosecuting the case.
United States District Judge Otis D. Wright II scheduled a September 23 sentencing hearing, at which time Kosolcharoen will face a statutory maximum sentence of three years in federal prison.
Former Inglewood Police Officer Sentenced to 2½ Years in Federal Prison for Stealing Cocaine from Lockup Then Reselling ItRead the Press Release
SANTA ANA, California – A former Inglewood Police Department (IPD) officer was sentenced today to 30 months in federal prison for stealing cocaine from IPD’s lock-up and reselling it on the street.
John Abel Baca, 48, of Whittier, then a 21-year veteran of the Inglewood Police Department and its union representative, was sentenced by United States District Judge James V. Selna. Judge Selna also ordered Baca to pay a $40,000 fine and found that Baca abused his position of trust as a police officer and that his sales extended over a lengthy period beginning in 2020.
Baca pleaded guilty in October 2023 to one count of distribution of cocaine.
“This defendant – a veteran of the Inglewood Police Department – abused his position as a law enforcement officer to promote his drug trafficking activities,” said United States Attorney Martin Estrada. “I thank IPD for its cooperation in bringing the defendant to justice – someone who broke his oath to protect the public.”
“Former officer Baca tarnished the badge and dishonored the majority of those who serve and protect our communities with integrity,” said Akil Davis, the Assistant Director in Charge of the FBI's Los Angeles Field Office. “This case serves as a reminder that no one is above the law, and corruption and criminal behavior will not be tolerated.”
Baca distributed cocaine on two occasions, the first in April 2021, when he delivered cocaine to a buyer. Baca then delivered approximately one kilogram of cocaine to the same buyer during another meeting in May 2021, in exchange for $22,000 in cash.
In February 2021, the buyer informed the FBI that Baca, then an active-duty IPD officer, previously had offered to sell the buyer one kilogram of cocaine, two kilograms of “White China” heroin, and an unlimited supply of black tar heroin. The buyer reported that Baca claimed to have stolen drugs and cash during routine traffic stops that Baca made as a drug task force officer with IPD.
During a secretly recorded meeting in late April 2021, Baca provided a sample of the cocaine to the buyer to provide to purported buyers. During that meeting, Baca also offered to sell the buyer a kilogram of “China White” heroin for $10,000. Several days later, Baca negotiated the price for one kilogram of cocaine – $22,000 in cash – and then delivered a brick of cocaine to the buyer’s workplace on May 4, 2021. Later the same day, Baca collected $22,000 in cash from the CW’s residence.
The FBI investigated this matter. The Inglewood Police Department provided its full cooperation during the investigation.
Assistant United States Attorney Cassie D. Palmer of the Public Corruption and Civil Rights Section prosecuted this case.
Disbarred Personal Injury Lawyer Tom Girardi Found Guilty of Defrauding Clients Out of Tens of Millions of DollarsRead the Press Release
LOS ANGELES – Disbarred plaintiffs’ personal injury attorney Thomas Vincent Girardi was found guilty by a jury today of leading a years-long scheme in which he embezzled tens of millions of dollars of money that belonged to his clients, some of whom awaited payment for treatment of severe physical injuries.
Girardi, 85, of Seal Beach, was found guilty of four counts of wire fraud.
“Tom Girardi built celebrity status and lured in victims by falsely portraying himself as a ‘Champion of Justice,’” said United States Attorney Martin Estrada. “In reality, he was a Robin-Hood-in-reverse, stealing from the needy to support of a lavish, Hollywood lifestyle. Today’s verdict shows that the game is up – we can all now see this defendant for what he was and the victims he callously betrayed.”
“Mr. Girardi exploited his clients’ misfortunes on a grand scale,” said Special Agent in Charge Tyler Hatcher, IRS Criminal Investigation, Los Angeles Field Office. “His clients sought his help in the wake of significant trauma and injury, yet he violated their trust to steal from them and fund his own lavish lifestyle, and he will now face the consequences of his actions.”
“Mr. Girardi was retained to advocate for clients who put their trust in him, but instead, lied to them and stole their money to fund his lavish lifestyle,” said Akil Davis, the Assistant Director in Charge of the FBI's Los Angeles Field Office. “Girardi falsely promoted himself in the media as a pillar of the legal community with a heightened sense of justice, but the clients he wronged for many years have now found actual justice in today's verdict.”
According to evidence presented at a 13-day trial, Girardi – a once-powerful figure in California’s legal community – ran the now-defunct law firm Girardi Keese. For years, Girardi misappropriated and embezzled millions of dollars from client trust accounts at his law firm. The scheme involved defendant Girardi stealing millions of dollars in client settlement funds and failing to pay Girardi Keese clients – some of whom had suffered serious injuries in accidents – the money they were owed.
In carrying out this scheme, from October 2010 to late 2020, Girardi provided a litany of lies for failure to pay clients and directed a law firm employee to pay previously defrauded clients or other unrelated expenditures. Girardi sent lulling communications to the clients that, among other things, falsely denied that the settlement proceeds had been paid and falsely claimed that Girardi Keese could not pay the settlement proceeds to clients until certain purported requirements had been met. These bogus requirements included addressing supposed tax obligations, settling bankruptcy claims, obtaining supposedly necessary authorizations from judges, and satisfying other debts.
Girardi diverted tens of millions of dollars from his law firm’s operating account to pay illegitimate expenses, including more than $25 million to pay the expenses of EJ Global, a company formed by his wife related to her entertainment career, as well as spent millions of dollars of Girardi Keese funds on private jet travel, jewelry, luxury cars, and exclusive golf and social clubs.
At the end of 2020, as Girardi and his law firm faced mounting legal problems related to his years-long theft of client funds, Girardi Keese was forced into involuntary bankruptcy. The State Bar of California disbarred Girardi in July 2022.
United States District Judge Josephine L. Staton scheduled a December 6 sentencing hearing, at which time Girardi will face a statutory maximum sentence of 20 years in federal prison for each count.
Relatedly, co-defendant Christopher Kazuo Kamon, 50, formerly of Encino and Palos Verdes and who was residing in The Bahamas at the time of his November 2022 arrest on a federal criminal complaint, awaits trial in this matter in January 2025. Kamon, the former chief financial officer at Girardi Keese, is charged with multiple fraud counts for allegedly aiding and abetting Girardi’s scheme to defraud clients. Kamon allegedly also embezzled millions of dollars from the law firm’s accounts for his own personal enrichment. Kamon, who remains in federal custody, has pleaded not guilty to these charges.
Girardi, Kamon, and David R. Lira, Girardi’s son-in-law and a former lawyer at Girardi Keese, also face federal fraud charges in Chicago. Trial in that case is scheduled for March 3, 2025.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
IRS Criminal Investigation and the FBI investigated this matter. The Office of the United States Trustee provided assistance.
Assistant United States Attorneys Scott Paetty of the Major Frauds Section and Ali Moghaddas of the Corporate and Securities Fraud Strike Force are prosecuting this case.
Moreno Valley Man Sentenced to More Than 15 Years in Prison for Ponzi Scheme that Drew in More Than $24 Million from VictimsRead the Press Release
RIVERSIDE, California – A Riverside County man was sentenced today to 188 months in federal prison for running a Ponzi scheme that lasted nearly 20 years and fraudulently obtained more than $24 million from at least 200 investors.
Paul Horton Smith Sr., 61, of Moreno Valley, was sentenced by United States District Judge Jesus G. Bernal, who also ordered him to pay $13,331,505 in restitution.
Smith pleaded guilty on January 8 to one count of wire fraud.
“This defendant’s greed and deceit caused major losses for his victims, who discovered that the supposed gains for their retirement were nothing more than a lie,” said United States Attorney Martin Estrada. “My office will continue to aggressively prosecute fraudsters who take advantage of victims in our community, and I also encourage everyone to use caution and skepticism with regard to any investments, especially those that seem too good to be true.”
“Paul Smith's clients trusted him. Smith knew that and used it to his advantage, selling them on a bogus investment opportunity and pocketing those funds,” said Akil Davis, Assistant Director in Charge of the FBI Los Angeles Field Office. “The fact that the bulk of his investors were seniors, men and women alike, and in various stages of vulnerability, makes this case all the more heartbreaking. Now, he's finally being held accountable. The FBI will continue shutting down crooks like this to help find justice for their victims.”
Smith operated Riverside-based companies named Northstar Communications LLC, Planning Services Inc., and eGate LLC. From July 2000 to May 2020, Smith obtained money from investors by soliciting individuals – who often were elderly or retired – to invest in something Smith called “Northstar.” Some of the investors previously were Planning Services clients.
Smith communicated with the victim investors regarding Northstar in person, over the telephone, and via email and text messages. He falsely told investors that Northstar was an annuity or an investment like an annuity. He falsely told other investors that Northstar invested in real estate or followed the stock market. He typically told the investors that their investment would generate a fixed rate of return and was a “safe investment.”
While Smith led most Northstar investors to believe his company reinvested their initial investment, generating the percentage they were to earn, in fact, he never invested the money. Instead, Smith deposited all investor funds into a non-interest-bearing checking account.
Smith used some money from later Northstar investors to pay earlier Northstar investors’ monthly interest payments and to repay earlier investors who wanted to withdraw their investment.
For example, in April 2019, Smith caused one victim to invest with him $400,000 – life insurance proceeds after the victim’s spouse had died. The victim wrote a personal check for that amount and the check was deposited into a bank account in Riverside, which then was electronically transferred to the bank’s Alabama headquarters for processing.
Smith promised the victim he would invest the $400,000 in a safe investment with a 5% rate of return. But Smith never invested the money. Instead, he transferred the funds to pay other victims of his Ponzi scheme. In an attempt to conceal his criminal activity, Smith made 11 payments to the victim that totaled $163,324.
As a result of the scheme, Smith fraudulently obtained more than $24 million from at least 200 investors. Of these investors, 106 victims have not been fully repaid. The total loss for these victims is $13,331,505.
The FBI investigated this matter. The United States Securities and Exchange Commission, which filed a complaint and obtained a judgment against Smith and Northstar Communications LLC in 2020, provided assistance.
Assistant United States Attorney Benjamin J. Weir of the Riverside Branch Office prosecuted this case.
City of Los Angeles Agrees to Pay $38.2M to Resolve False Claims Act Suit for Alleged Misuse of Department of Housing and Urban Development Grant FundsRead the Press Release
The City of Los Angeles has agreed to pay $38.2 million to resolve allegations that it knowingly failed to meet federal accessibility requirements when it sought and used Department of Housing and Urban Development (HUD) grant funds for multifamily affordable housing.
HUD provides grant funds to Los Angeles and other cities to support housing and community development, including building and rehabilitating affordable multifamily housing units. Recipients of federal housing development funds must comply with federal accessibility laws, including Section 504 of the Rehabilitation Act, Americans with Disabilities Act and Fair Housing Act. These laws prohibit discrimination against people with disabilities in activities receiving federal financial assistance. For example, the laws require 5% of all units in certain federally-assisted multifamily housing be accessible for people with mobility impairments and an additional 2% be accessible for people with visual and auditory impairments. Recipients of federal funds must also implement other housing-related accessibility requirements, including maintaining a publicly available list of accessible units with a description of their accessibility features, adopting policies and procedures to ensure that people who need the accessibility features of particular units occupy them and designating at least one city employee to coordinate accessibility efforts.
In 2017, the United States intervened and filed a complaint in a whistleblower action filed under the False Claims Act alleging that, for over a decade, the City of Los Angeles failed to follow federal accessibility laws when building and rehabilitating affordable multifamily properties and failed to make its affordable multifamily housing program accessible to people with disabilities. The United States alleged that the housing was not structurally accessible because of failures like slopes that were too steep, counters that were too high, and thresholds that did not permit wheelchair access. The United States further alleged that the city failed to maintain a publicly available list of accessible units and their accessibility features. The United States alleged that the city, on an annual basis, knowingly and falsely certified to HUD that it complied with these grant requirements despite its failure to do so. Today’s settlement resolves the pending lawsuit.
“This settlement shows that we will hold accountable jurisdictions receiving federal grant money to ensure they satisfy their obligations to make affordable housing accessible to people with disabilities,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Our years spent litigating this case demonstrate the department’s steadfast commitment to this effort.”
“Municipalities that receive federal grant money for affordable and accessible housing must comply with federal law and honor the rights of people with disabilities,” said First Assistant U.S. Attorney Joseph T. McNally for the Central District of California. “The nearly $40 million settlement here demonstrates our commitment to ensuring municipalities receiving federal funds comply with federal law. We will continue to work with the City of Los Angeles to ensure equal access for individuals with disabilities.”
“By failing to make certain that HUD-funded multifamily housing was appropriately built or rehabilitated to meet federal accessibility requirements, the city discriminated against people with disabilities,” said Inspector General Rae Oliver Davis of HUD. “HUD’s Office of the Inspector General will continue to work with our law enforcement partners to hold accountable those who fail to meet their legal obligations for the housing needs of people with disabilities.”
“The settlement announced today sends a clear message that HUD and its partners at the Department of Justice will work tirelessly to protect the integrity of HUD’s programs and demonstrates the importance of providing accessible housing,” said General Counsel Damon Smith of HUD. “In this instance, HUD determined that the City of Los Angeles fell far short of its responsibilities to provide HUD-funded accessible housing, but the settlement agreement provides a fresh start for HUD and the City to work collaboratively to address the City’s pressing housing needs.”
The False Claims Act permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The Act permits the United States to intervene and take over responsibility for litigating such an action, as the United States did here. The lawsuit is captioned U.S. ex rel. Ling, et al. v. City of Los Angeles, et al., No. CV11‐00974, and was brought by a Los Angeles resident who uses a wheelchair and the Fair Housing Council of San Fernando Valley, a nonprofit disability rights advocacy group. The private parties’ share of the settlement has not yet been determined.
In 2020, the United States settled for $3.1 million allegations against another defendant in the lawsuit, CRA/LA, the successor of the Community Redevelopment Agency of the City of Los Angeles, a local redevelopment agency that financed and assisted in the development of multifamily affordable housing using local tax monies and federal grants.
The resolutions obtained in this litigation were the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section and U.S. Attorney’s Office for the Central District of California, with assistance from HUD’s Office of General Counsel and Office of Inspector General.
Attorneys William C. Edgar, Jennifer Chorpening, Daniel W. Kastner and Wesley J. Heath of the Civil Division of the Civil Division’s Fraud Section and Assistant U.S. Attorneys Karen Paik and Paul La Scala for the Central District of California handled the case.
The claims resolved by the settlement are allegations only. There has been no determination of liability.
SettlementCity of Los Angeles Agrees to Pay $38.2 Million to Resolve False Claims Act Suit for Alleged Misuse of HUD Grant FundsRead the Press Release
SETTLEMENT AGREEMENTLOS ANGELES – The City of Los Angeles has agreed to pay $38.2 million to resolve allegations that it knowingly failed to meet federal accessibility requirements when it sought and used U.S. Department of Housing and Urban Development (HUD) grant funds for multifamily affordable housing, the Justice Department announced today.
“Municipalities that receive federal grant money for affordable and accessible housing must comply with federal law and honor the rights of people with disabilities,” said First Assistant United States Attorney Joseph T. McNally. “The nearly $40 million settlement here demonstrates our commitment to ensuring municipalities receiving federal funds comply with federal law. We will continue to work with the City of Los Angeles to ensure equal access for individuals with disabilities.”
HUD provides grant funds to Los Angeles and other cities to support housing and community development, including building and rehabilitating affordable multifamily housing units. Recipients of federal housing development funds must comply with federal accessibility laws, including Section 504 of the Rehabilitation Act, the Americans with Disabilities Act and the Fair Housing Act. These laws prohibit discrimination against people with disabilities in activities receiving federal financial assistance.
For example, the laws require five percent of all units in certain federally-assisted multifamily housing be accessible for people with mobility impairments and an additional two percent be accessible for people with visual and auditory impairments.
Recipients of federal funds must also implement other housing-related accessibility requirements, including maintaining a publicly available list of accessible units with a description of their accessibility features, adopting policies and procedures to ensure that people who need the accessibility features of particular units occupy them, and designating at least one city employee to coordinate accessibility efforts.
In 2017, the United States intervened and filed a complaint in a whistleblower action filed under the False Claims Act alleging that, for over a decade, the City of Los Angeles failed to follow federal accessibility laws when building and rehabilitating affordable multifamily properties and failed to make its affordable multifamily housing program accessible to people with disabilities. The United States alleged that the housing was not structurally accessible because of failures like slopes that were too steep, counters that were too high, and thresholds that did not permit wheelchair access. The United States further alleged that the city failed to maintain a publicly available list of accessible units and their accessibility features. The United States alleged that the city, on an annual basis, knowingly and falsely certified to HUD that it complied with these grant requirements despite its failure to do so. Today’s settlement resolves the pending lawsuit.
“This settlement shows that we will hold accountable jurisdictions receiving federal grant money to ensure they satisfy their obligations to make affordable housing accessible to people with disabilities,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Our years spent litigating this case demonstrate the department’s steadfast commitment to this effort.”
“By failing to make certain that HUD-funded multifamily housing was appropriately built or rehabilitated to meet federal accessibility requirements, the city discriminated against people with disabilities,” said HUD Inspector General Rae Oliver Davis. “HUD’s Office of the Inspector General will continue to work with our law enforcement partners to hold accountable those who fail to meet their legal obligations for the housing needs of people with disabilities.”
“The settlement announced today sends a clear message that HUD and its partners at the Department of Justice will work tirelessly to protect the integrity of HUD’s programs and demonstrates the importance of providing accessible housing,” said General Counsel Damon Smith of HUD. “In this instance, HUD determined that the City of Los Angeles fell far short of its responsibilities to provide HUD-funded accessible housing, but the settlement agreement provides a fresh start for HUD and the City to work collaboratively to address the City’s pressing housing needs.”
The settlement resolves a lawsuit filed under the qui tam or whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The Act permits the United States to intervene and take over responsibility for litigating these cases, as the United States did in 2017 here. The qui tam case is captioned United States ex rel. Ling, et al. v. City of Los Angeles, et al., No. CV11‐00974 (C.D. Cal.), and was brought by a Los Angeles resident who uses a wheelchair and the Fair Housing Council of San Fernando Valley, a nonprofit disability rights advocacy group. A relator share has not yet been determined.
In 2020, the United States settled for $3.1 million allegations against another defendant in the lawsuit, CRA/LA, the successor of the Community Redevelopment Agency of the City of Los Angeles, a local redevelopment agency that financed and assisted in the development of multifamily affordable housing using local tax monies and federal grants.
The resolution obtained in this litigation was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section and the United States Attorney’s Office for the Central District of California, with assistance from HUD’s Office of General Counsel and Office of Inspector General.
The matter was handled by Assistant United States Attorneys Karen Y. Paik and Paul B. La Scala of the Civil Division’s Civil Fraud Section and Justice Department Fraud Section attorneys William C. Edgar, Jennifer Chorpening, Daniel W. Kastner, and Wesley J. Heath of the Civil Division.
The claims resolved by the settlement are allegations only. There has been no determination of liability.
United States Attorney Martin Estrada Announces Implementation of New Whistleblower Pilot Program to Facilitate Increased Prosecutions of High-Level WrongdoersRead the Press Release
POLICYLOS ANGELES – United States Attorney Martin Estrada today announced that the U.S. Attorney’s Office for the Central District of California (USAO-CDCA) has implemented a new Voluntary Self-Disclosure, Whistleblower Pilot Program encouraging individuals to disclose criminal conduct undertaken by or through companies, exchanges, and other institutions.
The program, which is effective immediately, is designed to prompt individuals to come forward about previously unknown fraud, bribery, and other misconduct. It does so by setting forth conditions under which the voluntary self-disclosure (VSD) of misconduct to the USAO-CDCA, coupled with the agreement to fully cooperate in the investigation of others involved, may make the disclosing individual eligible to avoid prosecution.
The program applies to circumstances where an individual voluntarily discloses to the USAO-CDCA information regarding criminal conduct undertaken by or through public or private companies, exchanges, financial institutions, investment advisers, or investment funds involving fraud or corporate control failures or affecting market integrity, or criminal conduct involving state or local bribery or fraud relating to federal, state, or local funds. It is designed to facilitate the investigation of misconduct that is not already known to the USAO-CDCA and target those equally or more culpable in the misconduct, and only offers benefits to those who did not play a leading role in the misconduct, and who are not corporate CEOs or those in similar positions of control or federal, state, or local officials.
This Pilot Program provides transparency regarding the circumstances in which USAO-CDCA prosecutors will offer deferred or non-prosecution agreements (DPAs or NPAs) to incentivize individuals (and their counsel) to provide original and actionable information. Receiving such information will help us investigate and prosecute criminal conduct that might otherwise go undetected or be impossible to prove, and will, in turn, further encourage companies to create compliance programs that help prevent, detect, and remediate misconduct and to report misconduct when it occurs.
Under the VSD pilot program, the USAO-CDCA will enter into a DPA or NPA in exchange for the individual’s cooperation where the following conditions are met:
- The misconduct has not previously been made public and is not already known to our Office or to any component of the Department of Justice;
- The individual voluntarily discloses the criminal conduct to our Office and not in response to a government inquiry, and prior to imminent threat of disclosure or government investigation;
- The individual is able to provide substantial assistance in the investigation and prosecution of at least one equally or more culpable persons, did not play a leading role in the disclosed conduct, and is prepared to cooperate fully with this Office in its investigation and prosecution of the disclosed conduct, including by providing testimony if requested;
- The individual truthfully and completely discloses all criminal conduct in which the individual has participated and of which the individual is aware;
- The individual is not a federal, state, or local elected or appointed and confirmed official; not an official or agent of a federal investigative or federal law enforcement agency; or is not the CEO or equivalent, or a person who otherwise exercises primary control – regardless of title – over the operations of a public or private company; and
- The individual has not engaged in any criminal conduct that involves: the use of force or violence, any sex offense involving fraud, force, or coercion, or a minor, any offense involving terrorism or implicating national security or foreign affairs and does not have a previous felony conviction or a conviction of any kind for conduct involving fraud or dishonesty.
In instances in which an individual discloses such information, but does not meet the above requirements, prosecutors may consider exercising – with supervisory approval – discretion to extend a DPA or NPA.
To self-disclose pursuant to this policy, please email: [email protected].
Lake Forest Man Sentenced to More Than Seven Years in Prison for Defrauding Buyers of Medical-Grade Gloves During COVID-19 PandemicRead the Press Release
LOS ANGELES – An Orange County man was sentenced today to 87 months in federal prison for defrauding companies who in mid-2020 paid more than $3 million for COVID-related medical protective equipment that was never delivered.
Christopher John Badsey, 63, of Lake Forest, was sentenced by United States District Judge Josephine L. Staton, who also ordered him to pay $1,938,990 in restitution.
Badsey pleaded guilty in April 2023 to four counts of wire fraud.
In June and July of 2020, Badsey lied to three victim companies when he told them he had access to millions of boxes of nitrile gloves through his Irvine-based company, First Defense International Security Services Corp. (FDI). This type of personal protective equipment was in high demand and short supply during the early months of the COVID-19 pandemic.
Badsey agreed by contract to sell millions of boxes of gloves to each of the three companies. But he told the companies’ representatives that before they could inspect the gloves, which he claimed were stored in a Los Angeles warehouse, the companies would be required to pay deposits of upwards of $1 million to FDI. In fact, Badsey did not have any gloves stored in any warehouse.
Badsey instructed the companies to wire the deposits to accounts controlled by himself, FDI or a co-schemer. Relying on Badsey’s false statements, the companies wired a total of $3,231,990 to these accounts.
“[Badsey]…used the deposit money to make expensive purchases, all while stringing would-be purchasers along with false stories, including absurd claims that government agents were blocking access to his warehouse of gloves,” prosecutors argued in a sentencing memorandum.
He has forfeited all title and interest in money or items derived from his crimes, including a yacht, a pontoon boat, two Mercedes-Benz automobiles, two Ford pickup trucks, an RV, a tractor, three ATVs, miscellaneous fishing equipment, and $58,923 in cash.
The FBI investigated this matter.
Assistant United States Attorneys Kristin N. Spencer and Melissa S. Rabbani of the Santa Ana Branch Office prosecuted this case.
Lawsuit Filed Against Upland Company for Allegedly Starting Fire that Burned Hundreds of Acres in San Bernardino National ForestRead the Press Release
LOS ANGELES – The United States today filed a lawsuit alleging that the South Fire – which burned hundreds of acres in the San Bernardino National Forest in the summer of 2021 – was caused by an Upland-based grading, concrete, and pipeline contracting company’s negligent operation of an excavator in a rocky area.
The lawsuit filed in United States District Court alleges that Garrett J. Gentry General Engineering Inc. and its owner, Garrett J. Gentry, were negligent by starting the fire and failing to prevent it from spreading. As a result, they are liable for damages sustained by the United States during the fire, the lawsuit alleges.
The United States Forest Service sustained fire suppression costs more than $2.2 million, according to the complaint.
“Investigators determined that the fire started when the steel treads of the excavator, operated by Gentry Engineering and Gentry, contacted rocks, causing ignition of fuel, such as dry vegetation,” the lawsuit states. “Gentry Engineering and Gentry were aware of the danger of a rock strike by the excavator and failed to take action to prevent a fire.”
The wildfire started on August 25, 2021, and ultimately destroyed residences and structures and resulted in evacuation of residences. The fire burned more than 680 acres, including 450 acres in the San Bernardino National Forest.
This matter is being handled by Assistant United States Attorney Sarah Quist of the Civil Division’s Complex and Defensive Litigation Section.
City of Los Angeles to Pay $20.8 Million for Discharging More Than 12 Million Gallons of Untreated Wastewater into Santa Monica BayRead the Press Release
LOS ANGELES – The City of Los Angeles has agreed to pay a total of $20.8 million to fix issues at the Hyperion Water Reclamation Plant and to complete related environmental projects in connection with the discharge of millions of gallons of wastewater into Santa Monica Bay in 2021.
Hyperion, the City’s oldest and largest wastewater treatment facility, collects, treats, and disposes of wastewater for Los Angeles and several other municipalities, including Beverly Hills, Culver City, El Segundo, Santa Monica, San Fernando, and West Hollywood. Hyperion’s service area includes more than 4 million people.
Hyperion treats an average of 260 million gallons of wastewater per day, of which 225 million gallons are discharged through its 5-Mile Outfall to the Santa Monica Bay and 35 million gallons are conveyed to a water recycling facility for advanced treatment and reuse. Treatment of wastewater begins in a portion of the facility called the Headworks area, which involves the use of bar screens to remove large objects such as branches, plastics, and rags, from the entering wastewater.
“We in Southern California love our beaches and people in our community deserve clean waters free of contamination when they visit the beach,” said United States Attorney Martin Estrada. “This agreement requires the City to take concrete steps and commit substantial funds to improving the Hyperion facility and thereby prevent a disaster like this from reoccurring. Our office is committed to protecting our environment and we will continue to use our federal authority to ensure the safe use of our natural resources for future generations.”
In July 2021, the Headworks became inundated with debris, causing wastewater to flood that area. Hyperion’s relief system was triggered and approximately 12.5 million gallons of untreated wastewater was discharged through the Facility’s 1-Mile Outfall into the Santa Monica Bay. Offshore water quality testing and monitoring subsequently conducted around the 5-Mile Outfall showed exceedances of applicable water quality standards for total coliform bacteria, E. coli, and Enterococcus.
To resolve the U.S. Attorney’s criminal investigation, the City has agreed to spend no less than $20 million to perform and complete various projects at Hyperion, which the City agreed to perform under an Administrative Order On Consent previously issued by the EPA. That work includes improvements on Hyperion’s Distributed Control System, such as integrating bar screens, level sensors and other ancillary equipment, integrating the alarm or status screens software to remove the antiquated alarms, training Hyperion operators responsible for control room operations on the updates, and constructing high-level channel overflow manage improvements.
In addition, the City has agreed to continue and expand upon its water quality testing program in compliance with its permits and will add two additional water quality testing sites between Dockweiler Beach and King Harbor. The City will also complete its rapid bacteria testing study and seek accreditation from the U.S. Environmental Protection Agency so it can test for bacterial levels in ocean water on a more rapid basis. The City will also retain a qualified third-party auditor to conduct annual audits of Hyperion’s operations to determine whether it is in compliance with the work described above and the Clean Water Act
Finally, the City has agreed to perform a one-year community outreach service project in coordination with the Los Angeles Sanitation and Environmental Department and a nonprofit. That work will include meetings with local government officials and community members, developing an improved emergency communications plan, and coordinating educational outreach with residents and schools. The cost of the additional monitoring, rapid bacteria testing study, and the community outreach project is estimated to be no less than $800,000.
The United States Environmental Protection Agency Criminal Investigation Division is investigating this matter.
Assistant United States Attorneys Dennis Mitchell and Mark Williams of the Environmental Crimes and Consumer Protection Section, as well as Assistant United States Attorney Mack Jenkins, Chief of the Criminal Division, are prosecuting this case.
South L.A. Man Sentenced to More Than Seven Years in Federal Prison for Using Instagram to Solicit Bank Account Holders to Deposit Stolen ChecksRead the Press Release
LOS ANGELES – A South Los Angeles man was sentenced today to 87 months in federal prison for leading a conspiracy that defrauded banks and credit unions out of at least $2.7 million by depositing checks stolen from the mail into bank accounts belonging to accomplices he recruited via Instagram.
Carlos Corona, 37, was sentenced by United States District Judge John F. Walter, who also ordered him to pay $2,722,632 in restitution.
Corona pleaded guilty on May 1 to one count of conspiracy to commit bank fraud and one count of aggravated identity theft.
From October 2020 to August 2023, Corona and other co-conspirators engaged in an elaborate bank fraud scheme using third-party bank accounts and stolen checks. Some co-conspirators stole checks from the U.S. mail stream, including from post office mail collection boxes located outside post offices.
The conspirators took possession of the stolen checks. They, along with others, then solicited bank account holders through social media to provide their debit cards and bank account information, promising these account holders a cut of any fraudulent funds deposited into their accounts.
To circumvent the fraud protections of the banks and credit unions, Corona and others specifically requested bank accounts that had been open for a certain amount of time so they could get access to the stolen funds more quickly.
Bank account holders responded to the social media advertisements and provided members of the conspiracy with the information requested on the ads, including bank account numbers, PIN numbers, debit cards and online banking log-in information.
Corona and other co-conspirators exchanged the bank account holders’ information with each other, and then they deposited the stolen checks into these bank accounts. In most cases, the stolen checks were falsely endorsed in the original payee’s name. Sometimes, the checks were washed or altered to make the payee name correspond to the bank account into which the checks were being deposited.
Corona and others then rapidly depleted the fraudulently deposited funds from the account holders’ accounts by making cash withdrawals, electronic transfers, and debit card purchases. To conceal the fraud, members of the conspiracy instructed account holders – if the banks and credit unions contacted them about the fraudulent deposits – to claim that their accounts had been compromised.
During the scheme, Corona intended to cause at least $5.3 million in losses to the banks and credit unions and caused actual losses to lenders of at least $2.7 million.
Prosecutors have secured 10 convictions in this case.
The United States Postal Inspection Service and IRS Criminal Investigation investigated this matter. The Los Angeles Police Department provided assistance.
Assistant United States Attorneys Sarah E. Spielberger and Alexandra Michael, both of the General Crimes Section, prosecuted this case.
Woodland Hills Resident and Koreatown Extortionist Sentenced to 22½ Years in Prison for Racket Targeting Karaoke CompaniesRead the Press Release
LOS ANGELES – A San Fernando Valley man was sentenced today to 270 months in federal prison for extorting Koreatown karaoke companies and sometimes physically attacking victims who refused to pay, including carjacking one victim after beating him with a baseball bat.
Daekun Cho, 39, of Woodland Hills, was sentenced by United States District Judge Fernando L. Aenlle-Rocha, who also ordered him to pay $240,167 in restitution and a special assessment of $5,700.
At the conclusion of a five-day trial, a jury on March 26 found Cho guilty of 55 counts of interference with commerce by extortion, one count of attempted interference with commerce by extortion, and one count of carjacking.
“For years, this defendant terrorized merchants in Koreatown with his violent, shake-down schemes and intimidated victims into remaining silent,” said United States Attorney Martin Estrada. “But working with our local partners, we were able to uncover and expose this incorrigible racketeer. Extortionists who seek to profit through violence are on notice that we will use federal tools to hold them accountable and the consequences will be severe.”
“Our commitment to reducing violent crime in our cities is reflected yet again with the result of this sentencing,” said Homeland Security Investigations Los Angeles Special Agent in Charge Eddy Wang. “HSI’s collaboration with our state and local partners is crucial to our mission of ensuring public safety in Southern California.”
From at least 2018 through his arrest in March 2023, Cho demanded “protection” money from karaoke businesses in Koreatown, as well as from drivers of “doumis” – or hostesses – employed by patrons of the karaoke establishments.
For example, in May 2021, when one of Cho’s victims – a doumi driver – refused to pay him more money, Cho and his accomplice waited for him in a karaoke parking lot. Cho and his accomplice beat the victim with metal baseball bats until knocking him unconscious and then stole his minivan. The victim’s arm was broken when he protected his head from the blows. In fear of more violence at Cho’s hands, the victim and his business partner closed their karaoke driving company, and the business partner left California.
During a separate incident in July 2022, a different victim was dropping two doumis off at a karaoke bar in Koreatown when Cho – who appeared to have something in his hoodie pocket – approached the victim’s car, opened the door with his sleeve so as to not leave fingerprints, got halfway inside the vehicle, and told the victim that the victim’s company was not permitted to drop off doumis. As the victim drove away, he heard gunshots, breaking the car’s glass, a shard of which hit a doumi in the neck.
In January 2023, Cho assaulted another karaoke driver who for years had paid him in cash and then via Venmo a monthly extortion fee. Cho began accepting electronic extortion payments during the COVID-19 pandemic. When the victim stopped paying, Cho assaulted the victim, stole $1,000 from him, and threatened to kill him.
In text messages shown at trial, Cho threatened many victims that if they did not pay him, they would “see the real demon,” “face the consequence,” “get beat up,” or be “punch[ed],” or Cho would “come see u” or “kick u out of ktown.” One victim testified at trial that Cho pointed a gun at a victim’s head when he refused to comply with Cho’s orders.
When Cho was arrested on the charges in this case, he possessed a 9mm firearm, a Glock 17 caliber firearm, a partially built ghost gun, multiple loaded, high-capacity magazines, and ammunition for a revolver. One of the firearms was fully loaded with the safety disengaged. Cho also possessed illegal knife, two metal baseball bats, and $20,733 in cash.
HSI and the Los Angeles Police Department investigated this matter.
Assistant United States Attorneys Jena A. MacCabe and Kevin J. Butler of the Violent and Organized Crime Section prosecuted this case.
Five Defendants, Including Two Doctors, Charged in Connection with Actor Matthew Perry’s Fatal Drug Overdose Last YearRead the Press Release
Sangha & Plasencia - INDICTMENT Iwamasa - INFORMATION Fleming - INFORMATION Chavez - INFORMATIONLOS ANGELES – A licensed physician and an alleged San Fernando Valley drug dealer were arrested today in connection with the death of actor Matthew Perry, who suffered a fatal ketamine overdose in October 2023.
In total, five defendants, including two doctors, have been charged in this matter, according to court documents unsealed today.
The defendants arrested today are charged in an 18-count superseding indictment returned on Wednesday with distributing ketamine to Perry during the final weeks of the actor’s life:
- Jasveen Sangha, 41, a.k.a. “The Ketamine Queen,” of North Hollywood; and
- Dr. Salvador Plasencia, 42, a.k.a. “Dr. P,” of Santa Monica.
Sangha and Plasencia are charged with one count of conspiracy to distribute ketamine. Sangha also is charged with one count of maintaining a drug-involved premises, one count of possession with intent to distribute methamphetamine, one count of possession with intent to distribute ketamine, and five counts of distribution of ketamine.
The superseding indictment alleges that Sangha’s distribution of ketamine on October 24, 2023, caused Perry’s death. Plasencia is charged with seven counts of distribution of ketamine and two counts of altering and falsifying documents or records related to the federal investigation.
Sangha and Plasencia are expected to be arraigned later today at United States District Court in downtown Los Angeles.
“These defendants cared more about profiting off of Mr. Perry than caring for his well-being,” said United States Attorney Martin Estrada. “Drug dealers selling dangerous substances are gambling with other people’s lives over greed. This case, along with our many other prosecutions of drug-dealers who cause death, send a clear message that we will hold drug-dealers accountable for the deaths they cause.”
“Bringing these individuals to justice for their role in the untimely death of Mr. Perry required coordination and hard work by a number of people, and I want to thank LAPD detectives and our federal partners for their patience and dedication,” said LAPD Chief Dominic Choi. “As the boots on the ground in our communities, on a daily basis LAPD officers witness first-hand the harm that these narcotics can cause, so I’m pleased that our collective efforts have led to the arrest of these individuals.”
“Today we announce charges brought against the five individuals who, together, are responsible for the death of Matthew Perry,” said DEA Administrator Anne Milgram. “We allege each of the defendants played a key role in his death by falsely prescribing, selling, or injecting the ketamine that caused Matthew Perry’s tragic death. Matthew Perry’s journey began with unscrupulous doctors who abused their position of trust because they saw him as a payday, to street dealers who gave him ketamine in unmarked vials. Every day, the DEA works tirelessly with our federal, state, and local partners to protect the public and to hold accountable those that distribute deadly and dangerous drugs – whether they are local drug traffickers or doctors who violate their sworn oath to care for patients.”
The three other defendants – charged separately – are:
- Erik Fleming, 54, of Hawthorne, who pleaded guilty on August 8 to one count of conspiracy to distribute ketamine and one count of distribution of ketamine resulting in death. Fleming admitted in court documents that he distributed the ketamine that killed Perry. He further admitted to obtaining the ketamine from his source, Sangha, and to distributing 50 vials of ketamine to Perry’s live-in personal assistant, Kenneth Iwamasa – half of them four days before Perry’s death.
- Kenneth Iwamasa, 59, of Toluca Lake, who conspired with Sangha, Fleming, and Plasencia to illegally obtain ketamine and distribute it to Perry. Iwamasa, who pleaded guilty on August 7 to one count of conspiracy to distribute ketamine causing death, admitted to repeatedly injecting Perry with ketamine without medical training, including performing multiple injections on Perry on October 28, 2023 – the day Perry died.
- Dr. Mark Chavez, 54, of San Diego, a physician who has agreed to plead guilty to one count of conspiracy to distribute ketamine. Chavez admitted in his plea agreement to selling ketamine to Plasencia, including ketamine that he had diverted from his former ketamine clinic. Chavez also obtained additional ketamine to transfer to Plasencia by making false representations to a wholesale ketamine distributor and by submitting a fraudulent prescription in the name of a former patient without that patient’s knowledge or consent.
According to the superseding indictment unsealed today, in late September 2023, Plasencia learned that Perry, a successful actor whose history of drug addiction was well documented, was interested in obtaining ketamine. Ketamine is a general anesthetic whose medical risks require a health care professional to monitor a patient who had just been given the drug.
After learning about Perry’s interest in ketamine, Plasencia contacted Chavez – who previously operated a ketamine clinic – to obtain ketamine to sell to Perry. In text messages to Chavez, Plasencia discussed how much to charge Perry for the ketamine, stating, “I wonder how much this moron will pay” and “Lets [sic] find out.”
During September and October of 2023, Plasencia distributed ketamine to Perry and Iwamasa outside the usual course of professional practice and without a legitimate medical purpose on at least seven occasions. He did so by teaching Iwamasa how to inject Perry with ketamine, selling ketamine to Iwamasa to inject into Perry, leaving vials of ketamine with Iwamasa for self-administration, personally injecting ketamine into Perry without the proper safety equipment – including once inside a car parked in a Long Beach parking lot – and failing to properly monitor Perry after Plasencia injected Perry with the drug. Plasencia knew that Iwamasa had never received medical training and knew little, if anything, about administering or treating patients with controlled substances.
The superseding indictment also alleges that Plasencia conspired with Chavez about inventory, price, and availability of ketamine to sell to Perry and Iwamasa. Chavez, in turn, sold Plasencia orally administered ketamine lozenges that he obtained after writing a fraudulent prescription in a patient’s name without her knowledge or consent, and lied to wholesale ketamine distributors to buy additional vials of liquid ketamine that Chavez intended to sell to Plasencia for distribution to Perry.
Beginning in mid-October 2023, Iwamasa also began obtaining ketamine for Perry from Fleming and Sangha. After discussing prices with Iwamasa, Fleming coordinated the drug sales with Sangha, and brought cash from Iwamasa to Sangha’s stash house in North Hollywood to buy vials of ketamine. On October 24, 2023, while waiting for Sangha’s ketamine to arrive, Fleming advised Iwamasa that the ketamine was “on its way to our girl,” referring to Sangha. Sangha has distributed ketamine and other illegal drugs from her stash house in North Hollywood since at least 2019.
Sangha was aware of the danger of ketamine: In August 2019, Sangha sold ketamine to victim Cody McLaury in the hours before his overdose death. After a family member of McLaury’s sent Sangha a text message saying that her ketamine had killed McLaury, Sangha conducted a Google search for “can ketamine be listed as a cause of death[?]” The superseding indictment alleges that Sangha nonetheless continued to sell ketamine from her stash house.
Using the Plasencia-provided instructions and syringes, Iwamasa injected Perry with the ketamine that was sold to him by Fleming and Sangha, including on October 28, 2023, when Perry died at his Pacific Palisades home after receiving multiple ketamine injections. Plasencia sold the ketamine to Iwamasa despite being informed at least one week earlier that Perry’s ketamine addiction was spiraling out of control. After Perry’s death was reported in the news, Sangha texted Fleming, “Delete all our messages.”
After Perry’s death, federal agents and detectives with the Los Angeles Police Department executed search warrants at Sangha’s residence, where they found evidence of drug trafficking, including approximately 79 vials of ketamine, approximately 1.4 kilograms (3.1 pounds) of orange pills containing methamphetamine, psilocybin mushrooms, cocaine, and prescription drugs that appeared to be fraudulently obtained.
In February and March of 2024, in response to a legal request for production of documents in connection with the federal investigation, Plasencia provided altered and falsified medical records, purporting to show that he had a legitimate “treatment plan” in place for Perry, with the intent to influence the investigation into Perry’s death.
“The U.S. Postal Inspection Service’s partnership with state and federal law enforcement agencies and the support of the U.S. Attorney’s Office demonstrates our continued dedication to protecting communities from the harm caused by the illicit distribution and misuse of dangerous drugs,” said Matthew Shields, Acting Inspector in Charge of the Los Angeles Division. “We will continue to work diligently to bring justice to families affected by these types of crimes.”
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
If convicted of all charges, Sangha would face a mandatory minimum sentence of 10 years in federal prison and a statutory maximum sentence of life imprisonment. Plasencia would face up to 10 years in federal prison for each ketamine-related count and up to 20 years in federal prison for each records falsification count.
Iwamasa and Fleming will face up to 15 years and 25 years, respectively, when they are sentenced in their federal cases.
Chavez has been charged in an information pursuant to a plea agreement and will be arraigned on August 30. At sentencing, Chavez will face up to 10 years in federal prison.
The Los Angeles Police Department, the Drug Enforcement Administration, and the United States Postal Inspection Service are investigating this matter.
Assistant United States Attorneys Ian V. Yanniello of the General Crimes Section and Haoxiaohan H. Cai of the Major Frauds Section are prosecuting this case.
California Law Firm and Senior Managers Settle False Claims Act Allegations Regarding Misuse of Paycheck Protection Program Loan FundsRead the Press Release
The Bloom Firm, a California law firm, and Lisa Bloom and Braden Pollock, members of the firm’s senior management, have agreed to pay a total of $274,000 to settle allegations that they violated the False Claims Act by knowingly providing false information in support of a Paycheck Protection Program (PPP) loan forgiveness application submitted by The Bloom Firm.
Congress created the PPP in March 2020, as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act, to provide emergency financial support to the millions of Americans suffering economic hardship due to the COVID-19 pandemic. The CARES Act authorized billions of dollars in forgivable loans to small businesses struggling to pay employees and other business expenses. In December 2020, Congress approved funding for a “second draw” of PPP loan funds, which became available to borrowers beginning in January 2021. An entity’s first PPP loan is often referred to as a “first draw” PPP loan. When applying for forgiveness of any PPP loans, borrowers were required to certify the truthfulness and accuracy of all information provided in their applications, including that they spent the PPP loan funds on eligible expenses, such as payroll.
The United States alleged that, at the direction and with the assistance of Bloom and Pollock, The Bloom Firm sought and obtained forgiveness of the firm’s first draw PPP loan by falsely certifying that the firm used the PPP loan funds for eligible payroll expenses. The United States contended that The Bloom Firm used a portion of its PPP loan to pay several employees who were ineligible to receive PPP funds or did not work for the firm during the covered period of the loan. As a part of the settlement announced today, The Bloom Firm will pay $204,200.34, and Bloom and Pollock will each pay $35,384.49.
“PPP loans were intended to provide critical relief to small businesses,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department is committed to pursuing those who misused this taxpayer funded program.”
“Attorneys have a duty to follow the law to the letter – especially when it comes to government programs aiding individuals and businesses impacted by COVID-19,” said U.S. Attorney Martin Estrada for the Central District of California. “This settlement reaffirms my office’s commitment to affirm and uphold the integrity of pandemic-assistance programs.”
The settlement resolved claims brought under the qui tam or whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The qui tam lawsuit was filed by Liberty Law Office Inc. and is captioned U.S. ex rel. Liberty Law Office Inc. v. The Bloom Firm et al., Dkt. No. 21-cv-06279 (C.D. Cal.). Liberty Law Firm Inc. will receive a total of approximately $44,000 in connection with the settlement.
The resolution obtained in this matter was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Central District of California, with assistance from the Small Business Administration (SBA)’s Office of General Counsel and the SBA Office of the Inspector General.
Trial Attorney F. Elias Boujaoude of the Civil Division and Assistant U.S. Attorney Aaron Kollitz for the Central District of California handled the matter.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Justice Department in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The task force bolsters efforts to investigate and prosecute the most culpable domestic and international actors committing civil and criminal fraud and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit www.justice.gov/coronavirus.
Tips and complaints from all sources about potential fraud affecting COVID-19 government relief programs can be reported by visiting the webpage of the Civil Division’s Fraud Section, which can be found here. Anyone with information about allegations of attempted fraud involving COVID-19 can also report it by calling the Justice Department’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
The claims resolved by the settlement are allegations only. There has been no determination of liability.
SettlementCalabasas Law Firm and Senior Managers Settle False Claims Act Allegations Regarding Misuse of COVID-19 Business Loan FundsRead the Press Release
LOS ANGELES – The Bloom Firm, a Calabasas-based law firm, and Lisa Bloom and Braden Pollock, members of the firm’s senior management, have agreed to pay a total of $274,000 to settle allegations that they violated the False Claims Act by knowingly providing false information in support of a Paycheck Protection Program (PPP) loan forgiveness application submitted by The Bloom Firm.
Congress created the PPP in March 2020, as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act, to provide emergency financial support to the millions of Americans suffering economic hardship due to the COVID-19 pandemic. The CARES Act authorized billions of dollars in forgivable loans to small businesses struggling to pay employees and other business expenses. In December 2020, Congress approved funding for a “second draw” of PPP loan funds, which became available to borrowers beginning in January 2021. An entity’s first PPP loan is often referred to as a “first draw” PPP loan. When applying for forgiveness of any PPP loans, borrowers were required to certify the truthfulness and accuracy of all information provided in their applications, including that they spent the PPP loan funds on eligible expenses, such as payroll.
The United States alleged that, at the direction and with the assistance of Lisa Bloom and Braden Pollock, The Bloom Firm sought and obtained forgiveness of the firm’s first draw PPP loan by falsely certifying that the firm used the PPP loan funds for eligible payroll expenses. The United States contended that The Bloom Firm used a portion of its PPP loan to pay several employees who were ineligible to receive PPP funds or did not work for the firm during the covered period of the loan. As a part of the settlement announced today, The Bloom Firm will pay $204,200.34, and Lisa Bloom and Braden Pollock will each pay $35,384.49.
“Attorneys have a duty to follow the law to the letter – especially when it comes to government programs aiding individuals and businesses impacted by COVID-19,” said U.S. Attorney Martin Estrada for the Central District of California. “This settlement reaffirms my office’s commitment to affirm and uphold the integrity of pandemic-assistance programs.”
“PPP loans were intended to provide critical relief to small businesses,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department is committed to pursuing those who misused this taxpayer funded program.”
The settlement resolved claims brought under the qui tam or whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The qui tam lawsuit was filed by Liberty Law Office, Inc. and is captioned U.S. ex rel. Liberty Law Office Inc. v. The Bloom Firm et al., Dkt. No. 21-cv-06279 (C.D. Cal.). Liberty Law Firm Inc. will receive a total of approximately $44,000 in connection with the settlement.
The resolution obtained in this matter was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Central District of California, with assistance from the SBA’s Office of General Counsel and the SBA Office of the Inspector General.
Assistant United States Attorney Aaron Kollitz of the Civil Division’s Civil Fraud Section and Trial Attorney F. Elias Boujaoude of the Justice Department’s Civil Division handled the matter.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Justice Department in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The task force bolsters efforts to investigate and prosecute the most culpable domestic and international actors committing civil and criminal fraud and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit www.justice.gov/coronavirus.
Tips and complaints from all sources about potential fraud affecting COVID-19 government relief programs can be reported by visiting the webpage of the Civil Division’s Fraud Section, which can be found here. Anyone with information about allegations of attempted fraud involving COVID-19 can also report it by calling the Justice Department’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
The claims resolved by the settlement are allegations only. There has been no determination of liability.
Indictment Charges California Man for Unlawfully Procuring Aircraft Components on Behalf of IranRead the Press Release
WASHINGTON – U.S.-Iranian national Jeffrey Chance Nader, 66, of Arcadia, California, was arrested on an indictment charging him with crimes related to the procurement of U.S.-manufactured aircraft components, including components used on military aircraft, in violation of U.S. economic sanctions and other federal laws. The charges were announced by U.S. Attorney Matthew M. Graves, Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division, FBI Assistant Director David Sundberg of the Washington Field Office, and Assistant Secretary for Export Enforcement Matthew S. Axelrod.
According to the indictment, beginning at least in 2023, Nader and others conspired to purchase and export – and attempted to export – from the United States to Iran four types of aircraft components, totaling nearly three dozen individual pieces. Some of these components are for use on military aircraft operated by Iran’s armed forces, including the F-4 fighter jet.
Nader, acting on purchase orders he received from customers in Iran, would coordinate the purchase of relevant aircraft components with business associates in Iran, by which they would reach out to U.S.-based suppliers of such components. In several instances, Nader identified himself and his company, California-based Pro Aero Capital, to these U.S.-based suppliers as the end-user of these items. Victim companies in this procurement scheme were located across the United States.
Once the aircraft components were obtained, Nader attempted to export the items on multiple separate occasions. The items were then transshipped to the ultimate customer in Iran. None of the transactions discussed in the indictment were successfully exported; they were detained on export by a Special Agent with the Department of Commerce.
“Attacks by Iran and its proxies on U.S. allies in the Middle East and its ongoing supply of Russia with drones and other technology to be used in its illegal war against Ukraine demonstrate why we must do all that we can to stop Iran from acquiring U.S. parts, services, and technology.” said U.S. Attorney Matthew M. Graves. “The charges announced today represent the latest step in our ongoing effort to hold accountable those who illegally funnel goods and services to Iran and to deter others from doing the same.”
"Today's action demonstrates the Justice Department's commitment to keeping military-grade equipment out of the hands of the Iranian regime," said Assistant Attorney General Matthew G. Olsen of the Justice Department's National Security Division. “We will aggressively investigate, disrupt, and hold accountable criminal networks that supply sensitive technology to hostile and repressive governments in contravention of U.S. sanctions.”
“Today’s indictment alleges that this defendant circumvented U.S. sanctions and illegally procured aircraft components on behalf of Iran,” said FBI Assistant Director in Charge David Sundberg, of the Washington Field Office. “These violations not only undermine the impact of U.S sanctions but can also adversely affect national security. The FBI and our law enforcement partners at the Department of Commerce will continue to identify and disrupt those who seek to violate U.S. law and steal our technology on behalf of hostile nations.”
“Iran has no business using U.S.-manufactured parts and components to keep their planes and drones in the sky,” said Assistant Secretary for Export Enforcement Matthew S. Axelrod. “Stopping these items before they get to our adversaries – like we did here – reflects the real-world impact we’re having through the Disruptive Technology Strike Force.”
Nader was arrested yesterday and had an initial appearance in the Central District of California.
This case is being investigated by the FBI’s Washington Field Office and the Commerce Department's Bureau of Industry and Security. Significant assistance was provided by the FBI’s Los Angeles Field Office.
The case is being prosecuted by Assistant U.S. Attorney Steven B. Wasserman for the District of Columbia and Trial Attorney Sean Heiden of the National Security Division’s Counterintelligence and Export Control Section. Significant assistance was provided by the U.S. Attorney’s Office for the Central District of California.
This prosecution is being coordinated through the Disruptive Technology Strike Force, an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains, and prevent critical technology from being acquired by authoritarian regimes and hostile nation states. Under the leadership of the Assistant Attorney General for National Security and the Assistant Secretary of Commerce for Export Enforcement, the Strike Force leverages tools and authorities across the U.S. Government to enhance the criminal and administrative enforcement of export control laws.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Former San Luis Obispo County Sheriff’s Deputy Sentenced to Seven Months in Federal Prison for Abusing Jail Inmate While on DutyRead the Press Release
LOS ANGELES – A former San Luis Obispo County sheriff’s deputy was sentenced today to seven months in federal prison for abusing a county jail inmate by dragging the victim by her hair on the ground from one cell by several feet and then throwing her into another jail cell.
Joshua Fischer, 42, of Grover Beach, was sentenced by United States District Judge André Birotte Jr.
At today’s hearing, Judge Birotte said Fischer’s actions toward the victim showed a “level of callousness” and “disdain” toward the victim and that his use of force was “unreasonable.”
Fischer pleaded guilty on April 2 to one misdemeanor count of deprivation of rights under color of law. As part of his plea agreement, Fischer agreed to not seek future employment as a sworn law enforcement officer.
Fischer was a sworn law enforcement officer and San Luis Obispo County Sheriff’s Office senior correctional deputy assigned to work at the Intake Release Center in the city of San Luis Obispo between January 2017 and December 2018.
While on duty on November 18, 2018, Fischer instructed the victim, a jail inmate, to exit her cell, which she did. Fischer then directed her to enter an adjacent cell. After arguing with Fischer, the victim, who was shirtless, turned around, crossed her arms across her chest, and started to re-enter her original cell.
Fischer forcibly grabbed the victim by her hair and pulled her to the ground. He then dragged the victim across the floor by her hair several feet. Fischer then flung the victim, again by her hair, into an adjacent cell. After Fischer closed the cell door, the victim huddled in the corner of the cell.
Fischer then authored a report about the incident and saved it as “11-18-18 [victim’s last name] what a drag” on a San Luis Obispo County Sheriff’s Office computer.
In his plea agreement, Fischer admitted that he knew his use of force during the November 2018 incident was unreasonable and unnecessary. He also admitted that he acted willfully, intending to deprive the victim of her right to be free from the use of unreasonable and unnecessary force by a law enforcement officer.
Prior to the filing of charges in this case, the San Luis Obispo County Sheriff’s Office terminated Fischer’s employment.
The FBI investigated this matter with assistance from the San Luis Obispo County Sheriff’s Office.
Assistant United States Attorneys Thomas F. Rybarczyk and Frances S. Lewis of the Public Corruption and Civil Rights Section prosecuted this case.