Central District of California
Press releases recorded for this federal judicial district.
Convicted Sex Offender Indicted for Allegedly Producing Child Sexual Abuse Material and Enticing Two Minors into Sex WorkRead the Press Release
LOS ANGELES – A Ventura County man was charged today in an 11-count federal grand jury indictment alleging that – months after his release from state prison after being convicted of child sex offenses – he produced child sexual abuse material (CSAM) and used online chat programs to entice two minors into prostitution.
Kai Whitney Sommers, 36, of Ventura, is charged with two counts of sex trafficking of minors, two counts of use of a facility of interstate commerce to entice a minor to engage in criminal sexual activity, one count of production of child pornography, three counts of distribution of child pornography, one count of possession of child pornography, and two counts of commission of a felony offense involving a minor while required to register as a sex offender.
Sommers has been in federal custody since June 26 and is scheduled for arraignment on July 15 in United States District Court in downtown Los Angeles.
According to the indictment and a criminal complaint previously filed in this case, in September 2021, Sommers was convicted in Los Angeles Superior Court of statutory rape and engaging in lewd or lascivious acts with a minor for enticing a minor on an online chat room to make money as a sex worker. Sommers then lured the victim to meet with him and sexually assaulted the victim.
In August 2023, months after being released from state prison for the previous conviction, law enforcement conducted a search inside Sommers’ residence and allegedly found him to be in possession of CSAM. Following the search, officers allegedly found Sommers had chatted online with two minors, intending to persuade them to make money as sex workers.
One of the victims allegedly produced CSAM for Sommers, who used both their images online to advertise them as 18-year-old sex workers. Sommers allegedly impersonated the victims while he communicated with potential adult clients and told the victims that if the clients asked for their age, they had to say “18.” Sommers allegedly coerced one victim to meet twice with adult men and have sex with them for approximately $160 total.
An indictment and a complaint contain allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
If convicted, Sommers would face a mandatory minimum sentence of 25 years in federal prison and a statutory maximum sentence of life in federal prison.
The FBI and Ventura Police Department are investigating this matter.
Assistant United States Attorney Derek R. Flores of the Violent and Organized Crime Section is prosecuting this case.
Pico Rivera Man Who Helped International Drug Traffickers Launder More Than $15 Million Sentenced to 4 Years in Federal PrisonRead the Press Release
LOS ANGELES – A Pico Rivera man was sentenced today to 48 months in federal prison for his role in a money laundering conspiracy that moved millions of dollars in narcotics-related funds from the United States to international drug trafficking organizations.
Gustavo Adolfo Aldana-Martinez, 57, was sentenced by United States District Judge R. Gary Klausner, who also ordered him to pay a $25,000 fine.
At the conclusion of a three-day trial in December 2021, a jury found Aldana-Martinez guilty of one count of conspiracy to launder monetary instruments.
Aldana-Martinez accepted wire transfers of trafficker-directed drug proceeds sent from an undercover account run by agents with the Drug Enforcement Administration (DEA). After nearly $300,000 was sent to a bank account in the name of his bogus business, Aldana-Martinez made a series of wire transfers to unrelated companies to pay for electronic items that were then shipped to Colombia and Mexico, where they were sold to produce laundered funds for the drug traffickers.
The evidence showed that Aldana-Martinez laundered approximately $15.5 million between 2015 and 2017.
The man who oversaw the money laundering enterprise – Daniel Shaun Zilke, a.k.a. “The Englishman,” 49, of Mexico City – pleaded guilty in December 2023 to conspiracy to aid and abet drug distribution, conspiracy to launder money, and obstruction of an official government proceeding for stealing and attempting to cover up the theft of $150,000 in DEA undercover funds. Zilke is expected to be sentenced in the coming months.
The third defendant in the case – Jeffrey Mark Thompson, a.k.a. “The Cowboy,” 62, of Springtown, Texas – pleaded guilty in November 2023 to conspiracy to aid and abet drug distribution, conspiracy to launder money, and money laundering. Thompson is expected to be sentenced in the coming months. Zilke and Thompson face decades in prison.
A fourth defendant in the case – Juan Rachid Dergal-Zulbaran, 49, of Mexico City – is currently a fugitive.
According to court documents, the investigation into Zilke’s operation started in late 2015 when an undercover DEA agent posing as a money launderer contacted Zilke. When he pleaded guilty, Zilke admitted telling the undercover “he had a client in Europe who needed hundreds of millions of dollars moved to Mexico, and that he could use the bank account of a charity in Dallas, Texas to assist in laundering the money.”
The undercover agent agreed to assist Zilke by allowing him to use bank accounts associated with cash-intensive businesses. Subsequently, Zilke and his associates arranged numerous pickups of large sums of cash from drug traffickers in cities all over the country, funds that were deposited at Zilke’s direction into various bank accounts, including one controlled by Aldana-Martinez and another in the name of Thompson’s purported charity, Peace Through Water Foundation.
When he pleaded guilty, Thompson admitted that he used the Peace Through Water bank account to launder drug money.
Zilke, Thompson, and Aldana-Martinez each earned a commission that was a percentage of the amount laundered through their respective accounts, according to court documents.
During the investigation, Zilke approached the DEA in 2019 and offered his cooperation to expose the money laundering organization. After being made a cooperator and agreeing to always be truthful, Zilke received $200,000 in official government funds to be delivered to defendant Thompson. The intent was for Thompson to launder the money through his bank accounts and return the money to DEA undercover accounts. But, as Zilke admitted in his plea agreement, approximately two weeks after the cash delivery, Zilke returned to Thompson’s residence and took back $150,000 without telling the DEA agents. After this theft of government funds, he repeatedly lied to the agents about the money and made excuses for why it was taking so long to receive the wire transfers for the full $200,000.
DEA Seattle and DEA San Ysidro investigated this matter.
Assistant United States Attorneys Julie J. Shemitz, James A. Santiago and Kyle W. Kahan of the International Narcotics, Money Laundering, and Racketeering Section prosecuted this case.
This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
Justice Department Reaches Settlement to Recover Los Angeles Mansion Purchased by Family of Former Armenian Government MinisterRead the Press Release
The Justice Department reached a settlement for a civil forfeiture case against a mansion in the Holmby Hills section of Los Angeles belonging to the family of Gagik Khachatryan, a former government official in the Republic of Armenia.
In 2011, a trust benefiting Khachatryan’s sons purchased the property with funds provided by an Armenian businessman. At the time, Khachatryan was the most senior official in charge of taxes and customs in the Republic of Armenia. The sons claimed that the funds were provided as loans by the businessman, while the United States alleged the loans, which were repeatedly extended without repayment, were covers for bribe payments. The payments are also the subject of pending criminal prosecutions in the Republic of Armenia.
Under the terms of the settlement, the mansion will be forfeited to the United States. The United States will then sell the property at the highest obtainable market price and retain 85% of the net proceeds of the sale. The remaining net proceeds of the sale will be delivered to the Khachatryan’s sons and a corporation they own. The Attorney General has the discretionary authority to transfer forfeited property to any foreign country that participated directly or indirectly in the seizure or forfeiture of the property. The offices that brought the case intend to recommend transfer of some or all of the forfeited proceeds to the Republic of Armenia.
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; Acting Assistant Director in Charge Krysti Hawkins of the FBI Los Angeles Field Office; and U.S. Marshal David M. Singer made the announcement.
The FBI’s Eurasian Organized Crime Task Force (EOCTF) and U.S. Marshals Service investigated the case. The EOCTF is composed of multiple law enforcement agencies including the FBI, IRS Criminal Investigation, U.S. Postal Inspection Service, Glendale Police Department, Los Angeles Police Department, and Los Angeles County Sheriff’s Department. The Justice Department’s Official of International Affairs, the Republic of Armenia’s Prosecutor General’s Office, and Armenian investigative authorities also provided critical assistance.
Trial Attorney Hunter Smith of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) and Assistant U.S. Attorney Maxwell Coll for the Central District of California prosecuted the case.
The Kleptocracy Asset Recovery Initiative is led by a team of dedicated prosecutors in MLARS, in partnership with federal law enforcement agencies and often with U.S. Attorneys’ Offices, to forfeit the proceeds of foreign official corruption. Individuals with information about possible proceeds of foreign corruption located in or laundered through the United States should contact federal law enforcement or send an email to [email protected] (link sends e-mail) or https://tips.fbi.gov/.
Justice Department Reaches Settlement to Recover L.A. Mansion Purchased by Family of Former Armenian Government MinisterRead the Press Release
LOS ANGELES – The Justice Department today announced it has reached a settlement for a civil forfeiture case against a mansion in the Holmby Hills section of Los Angeles belonging to the family of Gagik Khachatryan, a former government official in the Republic of Armenia.
In 2011, a trust benefiting Khachatryan’s sons purchased the property with funds provided by an Armenian businessman. At the time, Khachatryan was the most senior official in charge of taxes and customs in the Republic of Armenia. The sons claimed that the funds were provided as loans by the businessman, while the United States alleged the loans, which were repeatedly extended without repayment, were covers for bribe payments. The payments are also the subject of pending criminal prosecutions in the Republic of Armenia.
Under the terms of the settlement, the mansion will be forfeited to the United States. The United States will then sell the property at the highest obtainable market price and retain 85% of the net proceeds of the sale. The remaining net proceeds of the sale will be delivered to the Khachatryan’s sons and a corporation they own. The Attorney General has the discretionary authority to transfer forfeited property to any foreign country that participated directly or indirectly in the seizure or forfeiture of the property. The offices that brought the case intend to recommend transfer of some or all the forfeited proceeds to the Republic of Armenia.
“We do not tolerate corruption in the United States and we will not allow foreign officials to use our country to facilitate their own corruption,” said United States Attorney Martin Estrada. “Our recovery of these ill-gotten gains should send a message to corrupt officials throughout the world that they will find no safe harbor here.”
The FBI’s Eurasian Organized Crime Task Force (EOCTF) and U.S. Marshals Service investigated the case. The EOCTF is composed of multiple law enforcement agencies including the FBI, IRS-Criminal Investigation, the U.S. Postal Inspection Service, the Glendale Police Department, the Los Angeles Police Department, and the Los Angeles County Sheriff's Department. The Justice Department’s Official of International Affairs, Republic of Armenia’s Prosecutor General’s Office, and Armenian investigative authorities also provided critical assistance.
Assistant United States Attorney Maxwell Coll of the Cyber and Intellectual Property Crimes Section and Trial Attorney Hunter Smith of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) prosecuted this case.
The Kleptocracy Asset Recovery Initiative is led by a team of dedicated prosecutors in MLARS, in partnership with federal law enforcement agencies and often with U.S. Attorney’s Offices, to forfeit the proceeds of foreign official corruption. Individuals with information about possible proceeds of foreign corruption located in or laundered through the United States should contact federal law enforcement or send an email to [email protected] or https://tips.fbi.gov.
Montebello Man Found Guilty of Distributing Fentanyl that Resulted in Victim’s Fatal Overdose at Long Beach Drug Rehabilitation ClinicRead the Press Release
LOS ANGELES – A federal jury today found a Montebello man guilty of distributing fentanyl to a buyer who then distributed it to a victim who the next day suffered a fatal overdose of the powerful synthetic opioid at a Long Beach drug treatment facility in late 2021.
Juan Carlos Gutierrez, 33, a.k.a. “Johnny G,” was found guilty of one count of distribution of fentanyl resulting in death and serious bodily injury, a felony offense that carries a mandatory minimum sentence of 20 years in federal prison and a statutory maximum sentence of life imprisonment.
According to evidence presented at an eight-day trial, Gutierrez on December 9, 2021, distributed fentanyl to co-defendant Jayleen Feusier, 36, of South Gate. Previously that night, Feusier agreed to get fentanyl for the victim, a 34-year-old man who was residing at a Long Beach drug treatment facility. In exchange for $60, Feusier agreed to get the fentanyl for the victim from Gutierrez.
Later that night, Feusier broke off approximately one gram of the fentanyl that Gutierrez provided to her, packaged it in a small plastic baggie, and placed the baggie, a lighter, and drug paraphernalia into a small box. She then placed the small box into a bag with a black t-shirt to mask the contents, ordered an Uber delivery service, and placed the item on the backseat of the vehicle to be delivered to the victim at the rehabilitation facility. Feusier then sent a link to the victim so he could track the Uber as it traveled to him.
At around 11 p.m. that night, the victim jumped a fence and retrieved the package from the Uber vehicle then went back inside the drug treatment facility. Approximately six hours later, the victim’s body was discovered inside the facility’s living room. Drug paraphernalia sent by Feusier was discovered nearby the victim.
The Los Angeles County Medical Examiner’s Office ruled that the victim’s death was caused by a fentanyl overdose.
United States District Judge Stanley Blumenfeld Jr. scheduled an October 15 sentencing hearing for Gutierrez, who has been in federal custody since May 2023.
Feusier, who has been in federal custody since February 6, pleaded guilty on March 5 to one count of distribution of fentanyl. She faces up to 20 years in federal prison at her sentencing hearing, which is expected to occur in the coming months.
The Drug Enforcement Administration and the Long Beach Police Department investigated this matter.
Assistant United States Attorneys Jeremy K. Beecher and Danbee C. Kim of the General Crimes Section are prosecuting this case.
Sylmar Man Arrested for Allegedly Using Instagram to Advertise and Distribute Child Sexual Abuse Material and to Commit SextortionRead the Press Release
LOS ANGELES – A San Fernando Valley man was arrested today on a three-count federal grand jury indictment alleging he used Instagram to advertise sexually explicit images of high school girls without their permission, to distribute child sexual abuse material (CSAM) and to further threaten victims who objected to his behavior.
Alejandro Garcia Aranda, 23, of Sylmar, is charged with one count of advertisement of child pornography, one count of distribution of child pornography, and one count transmitting threatening communications with intent to extort.
Aranda’s arraignment is scheduled for this afternoon in United States District Court in downtown Los Angeles.
According to the indictment that a federal grand jury returned on June 27, in April and May of 2020, Aranda used the Instagram handle “valleyhoezzz818” with the self-proclaimed goal of “[e]xposing all valley hoes with their @’s” to target local girls who attended schools in the San Fernando Valley.
Using Cash App, PayPal, Venmo, and Zelle, Aranda allegedly received payments from customers who wanted to obtain sexually explicit content of the victims that he had advertised and offered to sell on the Instagram account. After receiving and confirming payment, using the Instagram account, Aranda then allegedly sent a direct message to customers and provided a link to a zip file containing the sexually explicit photographs of his victims.
When victims discovered that sexually explicit materials depicting them were being advertised and disseminated by Aranda and requested that he stop and remove them, Aranda allegedly attempted to extract further additional sexually explicit material from them, including by threatening to post additional photographs.
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, Aranda would face a mandatory minimum sentence of 15 years in federal prison and a statutory maximum sentence of 30 years in federal prison for the child pornography advertisement count, a mandatory minimum sentence of five years in federal prison and up to 20 years in federal prison for the child pornography distribution count, and up to two years in federal prison on the threats count.
The FBI is investigating this matter.
Assistant United States Attorney Kathy Yu, Chief of Ethics and Post-Conviction Review, is prosecuting this case.
Canadian Man Sentenced to 3½ Years in Prison for Role in Penny Stock Scheme that Caused More Than $215 Million in LossesRead the Press Release
LOS ANGELES – A former trader for a group of hedge funds was sentenced today to 42 months in federal prison for participating in a scheme that manipulated penny stock prices to inflate the hedge fund’s reported profits – fraudulent gains that generated millions of dollars in management and performance fees – and caused investors to lose more than $215 million when the funds collapsed.
Colin Heatherington, 49, of Vancouver, Canada, was sentenced by United States District Judge John A. Kronstadt, who also ordered him to pay $215,815,031 in restitution – jointly and severally with co-defendant Todd Michael Ficeto, 57, a former Beverly Hills stockbroker who also was convicted in this case following a jury trial.
Heatherington pleaded guilty on February 1 to one count of conspiracy to commit securities fraud and wire fraud. He has admitted his role in the scheme run out of Absolute Capital Management Holdings (Absolute Funds), a Cayman Island-based company that managed eight hedge funds from offices in Mallorca, Spain.
Heatherington was a securities trader who worked closely with the founder and chief investment officer of Absolute Funds, Florian Wilhelm Jürgen Homm, 64, a German financier who was indicted in March 2013 and is currently a fugitive from justice.
As part of the scheme, which lasted from 2004 to June 2008, Heatherington oversaw the purchase of billions of shares of United States-based penny stocks, which were then traded using various manipulative practices, such as cross trading, which fraudulently inflated the value of the stocks and, in turn, the value of the Absolute Funds.
Heatherington and others in the scheme also reaped millions in profits through self-dealing trades in which they sold their own shares of artificially inflated penny stocks to the Absolute Funds.
After this case was indicted, Heatherington was in Canada, and the United States sought his extradition. After fighting extradition, Heatherington agreed in 2021 to come to the United States.
Ficeto was sentenced to six years in federal prison after being found guilty by a jury in July 2019 of 18 felonies relating to his managerial role in the scheme to manipulate penny stock prices, which garnered him many millions of dollars from fees and commissions and self-dealing trades. Ficeto also allowed Heatherington and other members of the conspiracy to trade the manipulated penny stocks through his company, among other fraudulent acts.
The FBI investigated this matter. The Department of Justice’s Criminal Division’s Office of International Affairs, IRS Criminal Investigation, the United States Securities and Exchange Commission, and the Financial Industry Regulatory Authority (FINRA) provided assistance.
Assistant United States Attorneys Cassie D. Palmer of the Public Corruption and Civil Rights Section, Scott Paetty of the Major Frauds Section, and Ian V. Yanniello of the General Crimes Section prosecuted this case.
Gardena Street Gang Member Found Guilty of Participating in Fatal Shooting of Victim in Front of His Family’s HomeRead the Press Release
LOS ANGELES – A member of the Gardena 13 street gang was found guilty today by a jury of participating in the fatal shooting of a 29-year-old man who was murdered in front of his family home in November 2020.
Justin Arteaga, 23, a.k.a. “Hitta,” of Gardena, was found guilty of one count of violent crime in aid of racketeering (VICAR) murder. He has been in federal custody since December 2020.
“The victims of gang violence are most often the people living in the very neighborhoods the gangs claim as their own,” said United States Attorney Martin Estrada. “In this case, gang members once again committed a cowardly and senseless murder that ended the promise of a young life. The mandatory life sentence that will result for this defendant sends a clear message that my office is laser focused on holding perpetrators of violence accountable to the fullest account.”
“Gang violence has far too often senselessly transformed our family, friends, and neighbors into victims of crime. Sadly, this case was no different,” said HSI Los Angeles Special Agent in Charge Eddy Wang. “My office has a long history of combatting gang violence, and I am extremely proud of the HSI special agents and our partners from the ATF, Gardena Police Department, Los Angeles Police Department, and the U.S. Attorney’s Office who were determined to seek justice for the family.”
“ATF targets trigger pullers by partnering with prosecutors, and law enforcement partners, to build cases against violent criminals,” said Special Agent in Charge of ATF Los Angeles Field Division Christopher Bombardiere. “ATF used its expertise in this investigation to link the evidence from the homicide firearms to the defendants. We will continue to pull and use all our resources to build cases against killers.”
According to evidence presented during a five-day trial, on November 13, 2020, the victim and his brother were seated in a parked car in front of their home when they were confronted by three men on foot – Arteaga, Antonio Yanez, 26, a.k.a. “Tank,” and George Hernandez, a.k.a. “Lil Vampy” – who were all armed with handguns. Yanez and George Hernandez were members of the Gardena 13 street gang, and Yanez was an associate of the gang. Following the victim’s perceived disrespect of Gardena 13 and the three assailants, all three assailants pulled out guns and began shooting the victim. After the victim had been shot, the victim’s father stepped out to help his son at which point a shootout between the victim’s father and the assailants, including Gardena 13 gang member Jesus Hernandez, 31, a.k.a. “Rowdy,” occurred.
Police and paramedics responded to the scene, where they treated the victim who died at the scene from gunshot wounds. George Hernandez, who was found lying on the street with gunshot wounds to his head and chest, was brought to a hospital, where he later died.
Arteaga was arrested four days later at Los Angeles International Airport as he was preparing to board a one-way flight to Mexico.
“The Gardena Police Department expresses its appreciation to the US Attorney's Office, the Department of Homeland Security Investigations, the ATF, and all other participating agencies in this thorough investigation and prosecution,” said Gardena Police Chief Michael Saffell. “We deeply value the dedication of our collaborative partners in ensuring justice and providing closure to the victim's family.”
Jesus Hernandez, who participated in the shootout, pleaded guilty in May 2022 to one count of being a felon in possession of a firearm and ammunition and is serving a 110-month prison sentence. Yanez pleaded guilty in February 2022 to one count of VICAR, one count of using a firearm in furtherance of a crime of violence resulting in death, and one count of being a felon in possession of a firearm and ammunition. He is expected to be sentenced in the coming months.
United States District Judge André Birotte Jr. scheduled a September 20 sentencing hearing, at which time Arteaga will face a sentence of life in federal prison.
Homeland Security Investigations, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Gardena Police Department investigated this matter.
Assistant United States Attorneys, including Kevin J. Butler of the Violent and Organized Crime Section and Varun Behl of the International Narcotics, Money Laundering, and Racketeering Section are prosecuting this case.
San Gabriel Valley Man Pleads Guilty to Sending Bomb Threat to Security Guard at Bank in El MonteRead the Press Release
LOS ANGELES – A San Gabriel Valley man pleaded guilty today to sending a bomb threat to a security guard El Monte last year and nearly two weeks later sending a fake bomb threat to himself in an unsuccessful effort to evade detection by law enforcement.
Daniel Isaac Gonzalez, 23, of Montebello, pleaded guilty to one count of making a threat, and conveying false information, through interstate commerce to kill another person and to damage and destroy buildings by means of an explosive.
According to his plea agreement, on July 13, 2023, Gonzalez knowingly and willfully sent a bomb threat and conveyed false information via text message to the victim, a security guard at Cathay Bank in El Monte. The text message falsely stated, “I put a bomb where u work [expletive] I know where u work bank.”
On July 26, 2023, Gonzalez knowingly and willfully sent another bomb threat via text message, this time to his own work telephone while he was working at Cathay Bank in El Monte. The text message falsely stated, “This Michael you did me dirty. I put a bomb by your job guy [expletive] you and see you in hell bitch. -anonymous 909.”
Gonzalez admitted in his plea agreement that the threats and false information concerned an attempt to kill, injure, and intimidate the victim, and to unlawfully damage and destroy a building and other property by means of an explosive. He also admitted that his conduct resulted in a substantial disruption of public, governmental or business functions or services.
United States District Judge Wesley L. Hsu scheduled an October 25 sentencing hearing, at which time Gonzalez, who remains free on bond, will face a statutory maximum sentence of 10 years in federal prison.
The FBI’s Joint Terrorism Task Force and the El Monte Police Department investigated this case.
Assistant United States Attorneys Alexander H. Tran of the General Crimes Section and Daniel H. Weiner of the International Narcotics, Money Laundering, and Racketeering Section, are prosecuting this case.
Riverside County Man Who Trafficked Pound Quantities of Fentanyl and Cocaine Sentenced to 19 Years in PrisonRead the Press Release
LOS ANGELES – A Hemet man was sentenced today to 228 months in federal prison for knowingly mailing pound quantities of fentanyl and marijuana, possessing more than four pounds of fentanyl and more than 35 pounds of cocaine in his house and for illegally possessing firearms, including one so-called “ghost” machinegun lacking a serial number.
Ignacio Alcala, 38, was sentenced by United States District Judge Fernando L. Aenlle-Rocha.
Alcala pleaded guilty in November 2023 to one count of distributing fentanyl, two counts of possessing with the intent to distribute fentanyl and cocaine, and one count of possessing firearms in furtherance of drug trafficking crimes.
In August 2022, Alcala knowingly mailed from a post office in Riverside to Rochester, New York, a parcel that contained approximately 1 kilogram of fentanyl. Later that month, he knowingly mailed another parcel from another post office in Riverside to New Orleans that contained approximately 2.5 kilograms of marijuana.
Law enforcement arrested Alcala at his residence in December 2022.
Inside Alcala’s residence, law enforcement seized a bag containing 2 kilograms (4.4 pounds) of fentanyl, along with two firearms, a .357 revolver reported stolen in 2019, and a Glock-style pistol that did not bear a legitimate serial number – commonly known as a “ghost gun” – beside a stack of children’s toys. The ghost gun had an empty large capacity magazine inserted and a Glock switch affixed to the striker plate, rendering the firearm a fully automatic machinegun pistol. Officers also found more than 16 kilograms of cocaine inside an air duct and almost half a kilogram of cocaine inside a kitchen cabinet.
“This is not a one-time incident, rather this is evidence of a serial and dangerous drug trafficker who poses a significant danger to society,” prosecutors argued in a sentencing memorandum. “[Alcala] has contributed to the nationwide devastation by trafficking in fentanyl and using the United States Postal Service to move bulk quantities of fentanyl from Southern California to the rest of the nation.”
The United States Postal Inspection Service, in conjunction with the Riverside County Gang Impact Team, investigated this matter. The Gang Impact Team is supervised by the Riverside County District Attorney’s Office Bureau of Investigation and staffed by agents from the DA’s Bureau of Investigation, Homeland Security Investigations, United States Marshals Service, the Bureau of Alcohol Tobacco Firearms and Explosives, the Riverside County Sheriff’s Department, and detectives and resources from the Beaumont, Cathedral City, Desert Hot Springs, Hemet, Murrieta, and Riverside Police Departments.
Assistant United States Attorney Mitchell M. Suliman of the Riverside Branch Office prosecuted this case.
Long Beach Man Sentenced to More Than 28 Years in Prison for Leading Crew that Committed Several Armed Robberies in the Antelope ValleyRead the Press Release
LOS ANGELES – A Long Beach man was sentenced today to 339 months in federal prison for leading a crew that committed several armed robberies in the Antelope Valley that netted hundreds of thousands of dollars in ill-gotten gains.
Kaleb Williams, 38, of Long Beach, was sentenced by United States District Judge Fernando L. Aenlle-Rocha, who also ordered him to pay $503,428 in restitution.
“Violent gun crime corrodes our community’s feeling of safety,” said United States Attorney Martin Estrada. “Today’s sentence shows criminals that when you break the law and use a gun to do it, the penalties will be severe.”
At the conclusion of a six-day trial in September 2023, a jury found Williams guilty of two counts of conspiracy to interfere with commerce by robbery, three counts of interference with commerce by robbery (Hobbs Act), and two counts of using a firearm in furtherance of a crime of violence.
Additionally, Williams’ co-conspirator, Terrance Cleyon Pearson, 44, of Long Beach, was also found guilty at the same trial of one count of conspiracy to interfere with commerce by robbery, one count of interference with commerce by robbery (Hobbs Act), and one count of using a firearm in furtherance of a crime of violence. His sentencing hearing is scheduled for August 30.
Four of his other accomplices have also been convicted and will be sentenced in the coming months.
- Gilbert Alexander Bailey Jr., 38, of Los Angeles;
- Tevaughn Brown, 33, of Bellflower;
- Da’Mari Mario Crane, 23, of Lancaster; and
- Tonisha Marie Johnson, 44, of Lancaster.
According to court documents, in July 2019 Williams, Bailey, Johnson, and four others traveled to a jewelry store in Lancaster. Johnson approached the store's door and awaited the employees to remotely unlock the door. Once the door was opened, Bailey and three accomplices entered. Two of the individuals then brandished handguns, intimidating both employees and a customer, while Bailey proceeded to seize jewelry from a shattered display case that had been smashed by another accomplice. The defendants escaped with approximately 348 pieces of jewelry valued at approximately $479,000, along with a Glock firearm, and caused approximately $5,000 in damage before fleeing the scene.
Williams and his accomplices committed a series of other robberies including one at Party City in Palmdale in October 2019, stealing approximately $10,000. During that robbery, the robbers grabbed a store employee by the shirt and dragged her through the store. One of the robbers, armed with a .45-caliber firearm, shot at a glass door that had closed and locked behind them during the robbery, shattering the door and allowing them to escape. The crew also robbed a Home Depot store in Lancaster in May 2020, stealing approximately $6,828 a gunpoint from the store vault.
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 investigated this case.
Assistant United States Attorneys Scott M. Lara and Kevin J. Butler of the Violent and Organized Crime Section prosecuted this case.
Former Soldier Pleads Guilty to Posting YouTube Video in Which He Threatened the Lives of Military Personnel at Fort Irwin Army BaseRead the Press Release
RIVERSIDE, California – A Northern California man and former soldier pleaded guilty today to a federal criminal charge 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, pleaded guilty to one count of sending threats by interstate communication.
“Our military servicemembers deserve our utmost appreciation and respect, not fear and intimidation,” said United States Attorney Martin Estrada. “Threats against our servicemembers, as against all public servants, cannot and will not be tolerated.”
“Mr. Beyer sought to take his personal vengeance out on innocent military members honorably serving their country, as well as their families,” said Akil Davis, the Assistant Director in Charge of the FBI's Los Angeles Field Office. “The FBI’s Joint Terrorism Task Force will investigate all threats to American military personnel and pursue prosecution for the offenders.”
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.
United States District Judge Suzanne S. Sykes scheduled a September 20 sentencing hearing, at which time Beyer will face a statutory maximum sentence of five years in federal prison.
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 is prosecuting this case.
Six-Time Convicted Felon Who Shot Two People Outside San Bernardino Bar Sentenced to More Than 10 Years in PrisonRead the Press Release
LOS ANGELES – A San Bernardino County man and six-time convicted felon who shot two people outside a San Bernardino sports bar was sentenced today to 125 months in federal prison for illegally possessing ammunition.
Rafeal Yanni, 31, a.k.a. “Green Eyes,” of Colton, was sentenced by United States District Judge Fernando M. Olguin.
Yanni pleaded guilty on April 11 to one count of being a felon in possession of ammunition.
“This defendant’s criminal conduct resulted in two wounded and traumatized victims, but he has now earned a lengthy stay in federal prison,” said United States Attorney Martin Estrada. “Violent gun crime is a menace to our community and my office will continue to vigorously prosecute these kinds of cases. Those who commit gun crimes should be aware that the federal government will not hesitate to take action.”
According to court documents, in September 2023, Yanni was seen at a San Bernardino sports bar. As Yanni was leaving the bar, he was captured in surveillance cameras racking the slide of a firearm. When Yanni left the restaurant, he got into a fight in the parking lot with Victim 1. Yanni pulled out the firearm, which lacked a serial number (commonly called a “ghost gun”) and fired three shots at short range at Victim 1, who collapsed. After hearing gunshots and observing Victim 1 on the ground, Victim 2 ran to help Victim 1. Yanni then shot Victim 2 two times at short range as well.
Yanni fled the scene and was arrested two days later. Law enforcement found a loaded ghost gun inside a vehicle that he had just been in. Ballistics tests linked the seized firearm to the shootings.
Yanni is not permitted to possess ammunition because of six felony convictions on his record, including two convictions in Sacramento County Superior Court in 2021 for assault, one conviction for possession of a firearm by a felon in 2019 in San Bernardino County Superior Court, and unlawful taking of a vehicle in 2013 in San Bernardino County Superior Court.
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, the Colton Police Department, and the San Bernardino Police Department investigated this matter.
Assistant United States Attorney Kelsey A. Stimson of the General Crimes Section prosecuted this case.
Montclair Pharmacist Charged with Submitting over $300 Million in Fraudulent Claims to Medi-Cal in Medication Reimbursement ScamRead the Press Release
LOS ANGELES – An Inland Empire pharmacist has been charged with using his Montclair pharmacy to submit more than $300 million in fraudulent Medi-Cal claims for prescription medications that were medically unnecessary, often not provided to patients, and were obtained through the payment of tens of millions of dollars in illegal kickbacks, the Justice Department announced today.
Kyrollos Mekail, 36, of Moreno Valley, is charged with two counts of health care fraud. He is expected to be arraigned in the coming weeks in United States District Court.
The charges filed in federal court are part of the Department of Justice’s 2024 National Health Care Fraud Enforcement Action.
“This case alleges that a licensed pharmacist committed an enormous fraud against a public health program designed to help our state’s neediest residents,” said United States Attorney Martin Estrada. “Bringing to justice those who unlawfully take from the public is a priority for my office, especially where those offenders harm the most vulnerable in our community.”
“It does not matter if you are a trafficker in a drug cartel or a corporate executive or medical professional employed by a health care company, if you profit from the unlawful distribution of controlled substances, you will be held accountable,” said Attorney General Merrick B. Garland. “The Justice Department will bring to justice criminals who defraud Americans, steal from taxpayer-funded programs, and put people in danger for the sake of profits.”
“Healthcare fraud victimizes patients, endangers the health of vulnerable people, and plunders healthcare programs,” said FBI Director Christopher Wray. “This wide-ranging collaboration demonstrates the FBI’s commitment to rooting out predatory healthcare fraud, protecting patients, and ensuring critical healthcare funds go where they are needed most.”
According to court documents, Mekail is a licensed California pharmacist who owns, operates, and is the pharmacist-in-charge of the Montclair-based Monte VP LLC, which does business as Monte Vista Pharmacy. Monte Vista Pharmacy is a provider under Medi-Cal, a California health care benefit program that provides reimbursement for medically necessary health care services for low-income individuals – including families with children, seniors, persons with disabilities, individuals in foster care, and pregnant women – and receives a significant amount of federal funding.
In early 2022, Medi-Cal suspended its requirement that health care providers obtain prior authorization before providing certain health care services or medications as a condition of reimbursement. The suspension of the prior authorization requirements was part of an ongoing transition of Medi-Cal’s prescription drug program to a new payment system.
From May 2022 to March 2023, Mekail and his co-schemers allegedly exploited Medi-Cal’s prior authorization suspension by billing Medi-Cal tens of millions of dollars per month for dispensing high-reimbursement, non-contracted, generic drugs through Monte Vista Pharmacy. Some prescription medications purportedly were to treat pain and also included Folite tablets, a vitamin available over the counter.
Normally, these high-cost reimbursement medications would have required prior authorization under Medi-Cal’s old payment system. The information alleges the medication involved in this scheme was medically unnecessary, frequently was not dispensed to patients, and procured by kickbacks.
In less than one year, Monte Vista Pharmacy billed Medi-Cal approximately $306,521,392 for the medications, of which Medi-Cal paid Monte Vista Pharmacy approximately $204,032,151, according to court documents.
Mekail allegedly paid two co-schemers more than $36 million of the fraudulently obtained Medi-Cal proceeds as kickbacks for referring the prescriptions. He allegedly disguised these kickbacks as payments for “consulting services.”
“Health care fraud affects every American,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “It siphons off hard-earned tax dollars meant to provide care for the vulnerable and disabled. In doing so, it also raises the cost of care for all patients. Even worse, as the prosecutions we announce today underscore, health care fraud can harm patients and fuel addiction. The Criminal Division is committed to rooting out health care fraud, wherever it may be found, no matter who commits it. And we are using more tools than ever before to uncover misconduct and hold wrongdoers to account, whether they are executives in corner offices or doctors who violate their oaths.”
“This work is important to the Department of Health and Human Services (HHS) and the millions of Americans we serve. HHS vigorously pursues anyone who commits fraud against our health care programs. But it takes all of us, working together, to be successful,” said HHS Deputy Secretary Andrea Palm. “Those who steal from these programs are stealing from the American families who rely on them and putting patients at risk. We won’t stop until all those who try to defraud the federal government are caught and held accountable.”
“We will not tolerate fraud that preys on patients who need and deserve high quality health care,” said the HHS-OIG Inspector General Christi A. Grimm. “The hard work of the HHS-OIG team and our outstanding law enforcement partners makes today’s action possible. We must protect taxpayer dollars and keep Americans safe from harms to their health, privacy, and financial well-being.”
An information 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, Mekail would face a statutory maximum sentence of 10 years in federal prison for each count of health care fraud.
The United States Department of Health and Human Services Office of Inspector General (HHS-OIG), the FBI, and the California Department of Justice are investigating this matter.
Assistant United States Attorney Roger A. Hsieh of the Major Frauds Section and Assistant Chief Niall M. O’Donnell and Trial Attorney Siobhan M. Namazi of the U.S. Department of Justice, Criminal Division, Fraud Section are prosecuting this case. Assistant United States Attorney James E. Dochterman of the Asset Forfeiture and Recovery Section is handling asset forfeiture matters in this case.
Los Angeles County and Nevada Men Charged in Indictment Alleging They Used Instagram to Sell Firearms, Including ‘Ghost Guns’Read the Press Release
LOS ANGELES – A Nevada man was arraigned today on a federal grand jury indictment charging him and three other defendants – two of them from Los Angeles County – with using Instagram to sell more than 60 firearms, including ones lacking serial numbers – or “ghost guns” – as well as machine gun conversion devices known as “Glock switches.”
Mark Perez, 22, of Henderson, Nevada, pleaded not guilty today at his arraignment in United States District Court in downtown Los Angeles. An August 6 trial date has been scheduled in this case. Perez is free on $10,000 bond.
Perez is charged along with Ivan Quintos, 27, of Azusa, and Salvador Lopez, 24, of Whittier, and Zachary Dry, 23, of Henderson, Nevada, with one count of conspiracy and one count of engaging in the business of dealing in firearms without a license. Perez also is charged with four counts of being a prohibited person in possession of firearms and ammunition, one count of possessing a firearm with a removed or altered serial number, and one count of possession of a machine gun.
According to the 11-count indictment that a federal grand jury returned on June 13, from July 2023 to May 2024, Perez and the other defendants used Instagram to coordinate and sell more than five dozen firearms. Some of the defendants used Instagram – direct messages and public posts – to sell the firearms, which included so-called “ghost guns” and “Glock switches” as well as firearms with obliterated serial numbers and firearms that had been stolen. The illegal firearm sales occurred in North Hollywood, Las Vegas, and elsewhere, the indictment alleges.
According to the indictment, Perez, Quintos, Lopez, and Dry are not federal firearms licensees and are not permitted to sell firearms. The indictment alleges that Perez is prohibited from possessing firearms due to his 2021 misdemeanor conviction in Nevada for domestic violence, and that Dry is prohibited from possessing firearms due to prior felony convictions for assault and battery in Nevada in 2023.
In addition to Perez, Quintos is charged with firearms trafficking and possession of a machine gun, Dry with possessing a firearm as a felon, Quintos with possession of a firearm with an obliterated serial number, and Lopez with possession of a firearm within a school zone.
Quintos and Dry have pleaded not guilty to the charges against them and await a trial date of August 6. Lopez’s arraignment is scheduled for July 9.
An indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
If convicted, Perez faces a maximum sentence of 100 years in federal prison, Quintos faces a maximum sentence of 35 years in federal prison, Lopez faces a maximum sentence of 15 years in federal prison, and Dry faces a maximum sentence of 25 years in federal prison.
The Bureau of Alcohol, Tobacco, Firearms and Explosives, the Baldwin Park Police Department, and Los Angeles Police Department are investigating this matter.
Assistant United States Attorney William M. Larsen of the General Crimes Section is prosecuting this case.
Justice Department to Recover over $100 Million in Additional Funds Linked to 1MDB SchemeRead the Press Release
The Justice Department announced today that it has reached an agreement with Low Taek Jho, also known as Jho Low, members of his family, and trust entities Low established (collectively, the “Low Parties”) that resolves two civil forfeiture cases.
The department previously brought the cases against assets that it alleges were acquired by Low and his family using funds allegedly embezzled from 1Malaysia Development Berhad (1MDB), Malaysia’s sovereign investment development fund. The Low Parties have also agreed to cooperate in the transfer to Malaysia of certain other assets located in Hong Kong, Switzerland, and Singapore that are linked to 1MDB funds. Under the agreement, the department will coordinate with foreign partners to facilitate the liquidation and return of these assets to Malaysia.
According to the civil forfeiture complaints, from 2009 through 2015, more than $4.5 billion in funds belonging to 1MDB were allegedly misappropriated by high-level officials of 1MDB and their associates, including Low, through a criminal conspiracy involving international money laundering and bribery. 1MDB was created by the government of Malaysia to promote economic development in Malaysia through global partnerships and foreign direct investment. Its funds were intended to be used to improve the well-being of the Malaysian people.
The agreement resolves the civil forfeiture action against a luxury apartment in Paris and artwork located in Switzerland by artists Andy Warhol and Claude Monet, which Low purchased for approximately $35 million in total. In addition, parties agreed to return to Malaysia real property and cash in bank accounts valued at approximately $67 million located in Hong Kong, Switzerland, and Singapore. The United States will release a total of $3.5 million to the trust entities to pay for legal fees and costs associated with the properties. Under the agreement, none of these fees may be returned to Low or his family members.
Prior to this settlement, in total, the United States has returned or assisted in the return to Malaysia of over $1.4 billion in assets associated with the international money laundering, embezzlement, and bribery scheme.
Low separately faces charges in the Eastern District of New York for allegedly conspiring to launder billions of dollars embezzled from 1MDB and for conspiring to violate the Foreign Corrupt Practices Act by allegedly paying bribes to various Malaysian and Emirati officials, and in the District of Columbia for allegedly conspiring to make and conceal foreign and conduit campaign contributions during the United States presidential election in 2012. This agreement does not release any entity or individual from filed or potential criminal charges.
The FBI’s International Corruption Squads in New York City and Los Angeles and IRS Criminal Investigation are investigating the case.
Trial Attorneys Barbara Levy, Sean Fern, Jonathan Baum, and Joshua Sohn of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) and Assistant U.S. Attorney Jonathan Galatzan for the Central District of California are prosecuting the case, with significant assistance from the Justice Department’s Office of International Affairs and MLARS’ Program Management Staff.
The Justice Department also appreciates the significant assistance provided over the course of this investigation by the Attorney General’s Chambers of Malaysia, the Royal Malaysia Police, the Malaysian Anti-Corruption Commission, the Attorney-General’s Chambers of Singapore, the Singapore Police Force-Commercial Affairs Department, the Office of the Attorney General and the Federal Office of Justice of Switzerland, and French authorities.
The Kleptocracy Asset Recovery Initiative is led by a team of dedicated prosecutors in MLARS, in partnership with federal law enforcement agencies, and often with U.S. Attorneys’ Offices, to forfeit the proceeds of foreign official corruption. Individuals with information about possible proceeds of foreign corruption located in or laundered through the United States should contact federal law enforcement or send an email to [email protected] or https://tips.fbi.gov/.
CEO of Non-Profit that Provided Mentoring Services to Public School Students Arrested on COVID Jobless Benefits Fraud ChargesRead the Press Release
LOS ANGELES – A South Bay man who provided lifestyle and personal development coaching to students in public schools through a non-profit he founded was arrested today on an indictment alleging he and his accomplices fraudulently applied for millions of dollars in COVID-19 jobless benefits, including by using stolen identities.
Reginald Foster Jr., 37, of the Westchester neighborhood of Los Angeles, was arrested on a 40-count federal indictment returned on June 18 alleging a scheme to fraudulently obtain unemployment insurance benefits under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
Foster was arraigned today in United States District Court in downtown Los Angeles. He pleaded not guilty to the charges against him, and an August 20 trial date was scheduled. A federal magistrate judge ordered Foster released on a $50,000 bond.
Foster allegedly exploited the Pandemic Unemployment Assistance (PUA) provision of the CARES Act, which is designed to expand access to unemployment benefits to self-employed workers, independent contractors, and others who would not otherwise have been eligible because of the COVID-19 pandemic.
The indictment alleges that Foster submitted multiple applications for benefits with false information that ensured that the applications would be approved and the debit cards through which the benefits were dispersed would be sent to a mailing address he used. Prosecutors argue that 118 fraudulent applications were submitted as part of the scheme.
Foster then allegedly used the cards to take possession of the fraudulently obtained benefits through transfers to his non-profit, Champs Up! LLC, and $1,000 withdrawals at ATMs. The indictment alleges that Foster then transferred the cards to co-conspirators, who used them to make further ATM withdrawals. Foster and his co-conspirators were able to withdraw almost $1.5 million of the benefits. The benefits were frozen as soon as the scheme was uncovered, preventing further losses of more than $4 million.
Two alleged co-conspirators are also charged in the indictment: Shelece Counts, 31, of the Westlake neighborhood of Los Angeles; and Isaiah Herbert Lawrence, 30, of Houston, Texas.
Counts was also taken into custody this morning and also was arraigned this afternoon. She pleaded not guilty to the charges against her and an August 20 trial date was scheduled. A federal magistrate judge ordered her released on $10,000 bond.
The indictment charges Foster, Counts, and Lawrence with one count of conspiracy to commit mail fraud and bank fraud, five counts of aggravated identity theft, and each face one count of use of unauthorized access devices. Foster is charged with nine counts of mail fraud and 22 counts of bank fraud. Counts is charged with 11 counts of bank fraud. Lawrence faces five bank fraud counts.
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, Foster, Counts, and Lawrence would each face a statutory maximum sentence of 30 years in federal prison for the conspiracy count and for each of the bank fraud counts, and 10 years in federal prison for the use of authorized access device counts. The mail fraud counts each carry a statutory maximum sentence of 20 years, and a conviction for aggravate identity theft will result in an additional mandatory two-year sentence.
This matter was investigated by the United States Department of Labor Office of Inspector General, the California Employment Development Department, and Homeland Security Investigations. Substantial assistance was provided by the Department of Homeland Security Office of Inspector General; the United States Secret Service; the FBI; U.S. Customs and Border Protection Special Response Team; and the Los Angeles Unified School District Office of Inspector General.
Assistant United States Attorney Ranee A. Katzenstein of the Criminal Appeals Section 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. More information on the Justice Department’s response to the pandemic may be found here.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it to the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at (866) 720-5721 or via the NCDF online complaint form.
Hawaiian Gardens Man Found Guilty of Selling Fentanyl to 18-Year-Old Victim Who Later Suffered Fatal OverdoseRead the Press Release
LOS ANGELES – A Hawaiian Gardens man was found guilty by a jury today of selling purported black tar heroin that in fact was fentanyl to an 18-year-old victim who later ingested it and suffered a fatal overdose from the powerful synthetic opioid.
Gregory Hevener, 47, was found guilty of one count of distribution of fentanyl resulting in death and one count of possession with intent to distribute heroin.
He has been in federal custody since February 2022.
According to evidence presented at a seven-day trial, in November 2020, the victim responded to an ad placed by Hevener on the website OfferUp, an online marketplace. The listing advertised the sale of “BLACK TAR ROOFING MATERIALS!!” – coded language for black tar heroin – in Long Beach. OfferUp records revealed Hevener operated or had access to several accounts on the platform, in which he advertised and distributed drugs, including heroin and fentanyl.
Hevener and the victim met in Hawaiian Gardens and the victim purchased what he believed to be heroin from Hevener. Instead, Hevener sold what was a black, tar-like substance containing fentanyl and tramadol, a pain-relief medication. The victim then drove home and took the drugs, suffering a fatal overdose.
In July and October 2021, law enforcement searched trash cans outside of Hevener’s residence in Hawaiian Gardens and seized discarded plastic bags and burnt pieces of tinfoil containing fentanyl and tramadol residue.
Another search in December 2021 resulted in the seizure of a plastic bag containing approximately 245 grams of black tar heroin, a digital scale, burnt tin foil, and a plastic bag containing approximately 1.2 grams of fentanyl.
United States District Judge Mark C. Scarsi scheduled a September 16 sentencing hearing, at which time Hevener will face a mandatory minimum sentence of 20 years in federal prison and a statutory maximum sentence of life in federal prison.
The Drug Enforcement Administration and the El Monte Police Department investigated this case.
Assistant United States Attorneys Kellye Ng and Maria Jhai of the Violent and Organized Crime Section and Kyle W. Kahan of the International Narcotics, Money Laundering, and Racketeering Section are prosecuting this case.
Former Chairman of Nevada-Based Publicly Traded Health Care Company Found Guilty of Multimillion-Dollar Insider Trading SchemeRead the Press Release
LOS ANGELES – The former CEO and chairman of the board of directors of Ontrak Inc., a Henderson, Nevada-based publicly traded health care company, was found guilty by a jury today of engaging in an insider trading scheme, using Rule 10b5-1 plans, to avoid losses of more than $12.5 million.
Terren Scott Peizer, 64, a resident of Puerto Rico and Santa Monica, was found guilty of one count of securities fraud and two counts of insider trading.
“Corporate executives and other insiders hold major power in our economy, but with that power comes responsibility,” said United States Attorney Martin Estrada. “It is important that executives, such as this defendant, be held accountable when they line their own pockets at the expense of shareholders. That is why I created our office’s Corporate and Securities Fraud Strike Force. Today’s verdict sends a clear message that everyone, including corporate executives, must abide by the law.”
“When Terren Peizer learned significant negative news about Ontrak, he set up Rule 10b5-1 trading plans to sell shares before the news became public and to conceal that he was trading on inside information,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “With today’s verdict, the jury convicted Peizer of insider trading. This is the Justice Department’s first insider trading prosecution based exclusively on the use of a trading plan, but it will not be our last. We will not let corporate executives who trade on inside information hide behind trading plans they established in bad faith.”
According to evidence presented at a 10-day trial, Peizer avoided losses of approximately $12.5 million by entering into two Rule 10b5-1 trading plans while in possession of material, non-public information concerning the serious risk that Ontrak’s then-largest customer would terminate its contract.
In May 2021, Peizer entered into his first 10b5-1 trading plan shortly after learning that the relationship between Ontrak and the customer was deteriorating and that the customer had expressed serious reservations about continuing its contract with Ontrak. Peizer later learned that the customer informed Ontrak of its intent to terminate the contract. Then, in August 2021, Peizer entered into his second 10b5-1 trading plan approximately one hour after Ontrak’s chief negotiator for the contract confirmed to Peizer that the contract likely would be terminated.
In establishing his 10b5-1 plans, Peizer refused to engage in any “cooling-off” period—the time between when he entered into the plan and when he sold stock—despite warnings from two brokers, a senior Ontrak executive, and attorneys. Instead, Peizer began selling shares of Ontrak on the next trading day after establishing each plan. On August 19, 2021, just six days after Peizer adopted his August 10b5-1 plan, Ontrak announced that the customer had terminated its contract and Ontrak’s stock price declined by more than 44%.
“As a CEO, Mr. Peizer abdicated his responsibilities by using his position to conceal trading on material non-public information in order to avoid the losses shareholders suffered,” said Acting Assistant Director in Charge Krysti Hawkins of the FBI Los Angeles Field Office. “The FBI is committed to investigating illegal trading practices and holding offenders accountable in order to ensure fairness and trust in the marketplace.”
United States District Judge Dale S. Fischer scheduled an October 21 sentencing hearing, at which time Peizer will face a statutory maximum penalty of 25 years in prison on the securities fraud count and up to 20 years in prison on each of the insider trading counts.
The case is part of a data-driven initiative led by the Criminal Division’s Fraud Section to identify executive abuses of 10b5-1 trading plans. Rule 10b5-1 trading plans can offer an executive a defense to insider trading charges. However, the defense is unavailable if the executive is in possession of material, non-public information at the time he or she enters into the 10b5-1 trading plan. Additionally, a plan does not protect an executive if the trading plan was not entered into in good faith or was entered into as part of an effort or scheme to evade the prohibitions of Rule 10b5-1.
The Corporate and Securities Fraud Strike Force is designed to expand and prioritize complex corporate and securities fraud investigations, some of which involves corporate executives and other individuals involved in criminal conduct. Members of the Strike Force examine accounting fraud, insider trading, and other matters that directly impact the financial system and trading markets.
The FBI investigated the case, with substantial assistance from FINRA’s Criminal Prosecution Assistance Group.
Assistant United States Attorney Ali Moghaddas of the Corporate and Securities Fraud Strike Force and Trial Attorneys Matthew Reilly and Della Sentilles of the Justice Department’s Criminal Division’s Fraud Section are prosecuting this case.
Chairman of Publicly Traded Health Care Company Convicted of Insider TradingRead the Press Release
A federal jury in Los Angeles convicted the former CEO, executive chairman, and chairman of the board of directors of Ontrak Inc., a publicly traded health care company, for engaging in an insider trading scheme using Rule 10b5‑1 trading plans.
“When Terren Peizer learned significant negative news about Ontrak, he set up Rule 10b5-1 trading plans to sell shares before the news became public and to conceal that he was trading on inside information,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “With today’s verdict, the jury convicted Peizer of insider trading. This is the Justice Department’s first insider trading prosecution based exclusively on the use of a trading plan, but it will not be our last. We will not let corporate executives who trade on inside information hide behind trading plans they established in bad faith.”
“Corporate executives and other insiders hold major power in our economy, but with that power comes responsibility,” said U.S. Attorney Martin Estrada for the Central District of California. “It is important that executives, such as this defendant, be held accountable when they line their own pockets at the expense of shareholders. That is why I created our office’s Corporate Crime and Securities Fraud Strike Force. Today’s verdict sends a clear message that everyone, including corporate executives, must abide by the law.”
According to court documents and evidence presented at trial, Terren S. Peizer, 64, a resident of Santa Monica, California, and Puerto Rico, avoided more than $12.5 million in losses by entering into two Rule 10b5-1 trading plans while in possession of material non-public information concerning the serious risk that Ontrak’s then-largest customer would terminate its contract. In May 2021, Peizer entered into his first Rule 10b5-1 trading plan shortly after learning that the relationship between Ontrak and the customer was deteriorating and that the customer had expressed serious reservations about continuing its contract with Ontrak. Peizer later learned that the customer informed Ontrak of its intent to terminate the contract. Then, in August 2021, Peizer entered into his second Rule 10b5-1 trading plan approximately five minutes after Ontrak’s chief negotiator for the contract informed Peizer that the contract likely would be terminated.
“As a CEO, Mr. Peizer abdicated his responsibilities by using his position to conceal trading on material non-public information in order to avoid the losses shareholders suffered,” said Acting Assistant Director in Charge Krysti Hawkins of the FBI Los Angeles Field Office. “The FBI is committed to investigating illegal trading practices and holding offenders accountable in order to ensure fairness and trust in the marketplace.”
In establishing his Rule 10b5-1 plans, Peizer refused to engage in any “cooling-off” period—the time between when he entered into the trading plan and when he sold Ontrak stock—despite warnings from multiple brokers, Ontrak’s Insider Trading Compliance Officer, and several attorneys. Instead, Peizer began selling shares of Ontrak on the next trading day after establishing each plan. On Aug. 19, 2021, just six days after Peizer adopted his second Rule 10b5-1 plan, Ontrak announced to the public that the customer had terminated its contract and Ontrak’s stock price declined by more than 44%.
The jury convicted Peizer of one count of securities fraud and two counts of insider trading. He is scheduled to be sentenced on Oct. 21 and faces a maximum penalty of 25 years in prison on the securities fraud count and 20 years in prison on each of the insider trading counts. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The case is part of a data-driven initiative led by the Criminal Division’s Fraud Section to identify executive abuses of 10b5-1 trading plans. A Rule 10b5-1 trading plan, which allows a corporate insider of a publicly traded company to set up a plan for selling company stock, can offer an executive a defense to insider trading charges. However, the defense is unavailable if the executive is in possession of material, non-public information at the time he or she enters into the 10b5-1 trading plan. Additionally, a plan does not protect an executive if the trading plan was not entered into in good faith or was entered into as part of an effort or scheme to evade the prohibitions of Rule 10b5-1.
The FBI investigated the case. The Justice Department appreciates the substantial assistance of FINRA’s Criminal Prosecution Assistance Group.
Trial Attorneys Matthew Reilly and Della Sentilles of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Ali Moghaddas for the Central District of California are prosecuting the case.
Federal Indictment Alleges Alliance Between Sinaloa Cartel and Money Launderers Linked to Chinese Underground BankingRead the Press Release
LOS ANGELES – The Justice Department today announced a 10-count superseding indictment charging Los Angeles-based associates of Mexico’s Sinaloa drug cartel with conspiring with money-laundering groups linked to Chinese underground banking to launder drug trafficking proceeds. During the conspiracy, more than $50 million in drug proceeds flowed between the Sinaloa Cartel associates and Chinese underground money exchanges.
Following close coordination with the Justice Department, Chinese and Mexican law enforcement informed United States authorities that those countries recently arrested fugitives named in the superseding indictment who fled the United States after they were initially charged last year.
The multi-year investigation into this conspiracy—dubbed “Operation Fortune Runner”—resulted in a superseding indictment returned on April 4 and unsealed on Monday charging a total of 24 defendants with one count of conspiracy to aid and abet the distribution of cocaine and methamphetamine, one count of conspiracy to launder monetary instruments, and one count of conspiracy to operate an unlicensed money transmitting business.
The superseding indictment alleges that a Sinaloa Cartel-linked money laundering network collected and, with help from a San Gabriel Valley-based money transmitting group with links to Chinese underground banking, processed large amounts of drug proceeds in U.S. currency in the Los Angeles area. They then allegedly concealed their drug trafficking proceeds and made the proceeds generated in the United States accessible to cartel members in Mexico and elsewhere.
Lead defendant Edgar Joel Martinez-Reyes, 45, of East Los Angeles, and others allegedly used a variety of methods to hide the money’s source, including trade-based money laundering, “structuring” assets to avoid federal financial reporting requirements, and the purchase of cryptocurrency.
Twenty of the individuals charged in the superseding indictment are expected to be arraigned in the U.S. District Court in downtown Los Angeles in the coming weeks, including one who was arraigned on Monday.
“Dangerous drugs like fentanyl and methamphetamine are destroying people’s lives but drug traffickers only care about their profits,” said United States Attorney Martin Estrada. “To protect our community, therefore, it is essential that we go after the sophisticated, international criminal syndicates that launder the drug money. As this indictment and our international actions show, we will be dogged in our pursuit of all those who facilitate destruction in our country and make sure they are held accountable for their actions.”
“Relentless greed, the pursuit of money, is what drives the Mexican drug cartels that are responsible for the worst drug crisis in American history,” said DEA Administrator Anne Milgram. “This DEA investigation uncovered a partnership between Sinaloa Cartel associates and a Chinese criminal syndicate operating in Los Angeles and China to launder drug money. Laundering drug money gives the Sinaloa Cartel the means to produce and import their deadly poison into the United States. DEA’s top operational priority is to save American lives by defeating the cartels and those that support their operations. This investigation is the latest example, and there is more to come.”
“Drug traffickers generate immense amounts of cash through their illicit operations. This case is a prime example of Chinese money launderers working hand in hand with drug traffickers to try to legitimize profits generated by drug activities,” said Chief Guy Ficco of IRS Criminal Investigation. “We have made it a priority to identify, disrupt, and dismantle any money launderers working with drug cartels and we are committed to our partnerships with federal, state, and local law enforcement agencies to combat drug cartels and those who assist them in laundering drug proceeds.”
As part of this investigation, law enforcement has seized approximately $5 million in narcotics proceeds, 302 pounds of cocaine, 92 pounds of methamphetamine, 3,000 Ecstasy pills, 44 pounds of psilocybin (magic mushrooms), numerous ounces of ketamine, three semi-automatic rifles with high-capacity magazines, and eight semi-automatic handguns.
Background
The Sinaloa Cartel is largely responsible for the massive influx of fentanyl into the United States over the past approximately eight years, and for the accompanying violence and deaths that have afflicted communities on both sides of the border. The cartel’s activities generate enormous sums of U.S. currency in the United States that belong to the cartel in Mexico. Profits from the drug trade must be repatriated to Mexico for use by the cartel.
Chinese underground money exchanges in the United States assist the Sinaloa and other cartels to move their profits from the United States to Mexico by providing a ready market for U.S. currency in the United States.
Many wealthy Chinese nationals who live, work, or invest in China wish to transfer assets to the United States for various reasons but are barred by the Chinese government’s capital flight restrictions from transferring the equivalent of more than $50,000 per year out of China. These individuals seek informal alternatives to the conventional banking system to move their funds.
To transfer money to the United States, the China-based investor contacts an individual who has U.S. dollars available to sell in the United States. The seller of U.S. dollars provides identifying information for a bank account in China with instructions for the investor to deposit Chinese currency (renminbi) in that account. Once the owner of the account sees the deposit, an equivalent amount of U.S. dollars is released to the buyer in the United States.
The sellers of U.S. currency in the United States obtain dollars in a variety of ways. Some of them accept cash from individuals engaged in criminal activity that generates large amounts of bulk currency, including drug trafficking. These U.S. currency brokers charge a percentage commission as a fee to the owner of the criminal proceeds to conceal the nature and source of the funds—typically far less for their services than their competitors. Drug traffickers increasingly have partnered with Chinese underground money exchanges to take advantage of the large demand for U.S. dollars from Chinese nationals.
The funds that are transferred in China are then used to pay for goods purchased by businesses and organizations in Mexico or elsewhere such as consumer goods or items needed to aid the drug trafficking organization to manufacture illegal drugs, such as precursor chemicals, including fentanyl.
The Superseding Indictment
According to the superseding indictment, from October 2019 to October 2023, members and operatives of the Sinaloa Cartel imported large quantities of narcotics, including fentanyl, cocaine, and methamphetamine, into the United States, generating huge sums of drug cash proceeds in U.S. dollars.
In January 2021, Martinez-Reyes allegedly traveled to Mexico to meet with Sinaloa Cartel members to strike a deal with money remitters with links to Chinse underground banking to launder drug trafficking proceeds in the United States. After the deal was struck, the Sinaloa Cartel—through their connections and associates—distributed cocaine, methamphetamine, and other narcotics, generating U.S. dollars as drug proceeds.
Martinez-Reyes and other conspirators allegedly then delivered the currency—frequently in amounts of hundreds of thousands of U.S. dollars in cash—to other members of the Chinese underground money exchange and remitting organizations to be laundered for a fee. The remitting organizations possessed large amounts of U.S. currency and could help wealthy Chinese nationals evade China’s currency controls.
The money remitters allegedly disposed of the drug proceeds by either delivering United States currency directly to their money exchange customers or by purchasing real or personal property, including luxury goods and cars to be shipped to China. Additionally, the remitters also moved illicit drug proceeds through cryptocurrency transactions. They also allegedly used a variety of traditional methods to place the funds into the traditional banking system such as purchasing cashier’s checks, or “structuring,” that is, depositing small amounts at a time into bank accounts opened for this purpose to avoid banks from reporting large cash deposits to the U.S. government.
The remaining seven counts charge individual defendants with crimes such as possession of pound quantities of cocaine and methamphetamine, structuring funds to avoid federal reporting requirements placed on banks, and one count of assault with a deadly weapon on a federal officer.
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, each defendant faces a mandatory minimum of 10 years in prison and a maximum penalty of life in prison.
The DEA, IRS Criminal Investigation, South Gate Police Department, Downey Police Department, Glendora Police Department, Fullerton Police Department, and El Monte Police Department are investigating the case, with valuable assistance from the FBI and the United States Marshals Service.
Assistant U.S. Attorney Julie J. Shemitz for the Central District of California is prosecuting the case. The Justice Department’s Office of International Affairs and Criminal Division’s Narcotic and Dangerous Drug Section’s Special Operations Unit assisted with the investigation and overseas coordination in the case.
This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at www.justice.gov/OCDETF.
Federal Indictment Alleges Alliance Between Sinaloa Cartel and Money Launderers Linked to Chinese Underground BankingRead the Press Release
The Justice Department today announced a 10-count superseding indictment charging Los Angeles-based associates of Mexico’s Sinaloa drug cartel with conspiring with money-laundering groups linked to Chinese underground banking to launder drug trafficking proceeds. During the conspiracy, more than $50 million in drug proceeds flowed between the Sinaloa Cartel associates and Chinese underground money exchanges.
Following close coordination with the Justice Department, Chinese and Mexican law enforcement informed United States authorities that those countries recently arrested fugitives named in the superseding indictment who fled the United States after they were initially charged last year.
The multi-year investigation into this conspiracy—dubbed “Operation Fortune Runner”—resulted in a superseding indictment returned on April 4 and unsealed on Monday charging a total of 24 defendants with one count of conspiracy to aid and abet the distribution of cocaine and methamphetamine, one count of conspiracy to launder monetary instruments, and one count of conspiracy to operate an unlicensed money transmitting business.
The superseding indictment alleges that a Sinaloa Cartel-linked money laundering network collected and, with help from a San Gabriel Valley, California-based money transmitting group with links to Chinese underground banking, processed large amounts of drug proceeds in U.S. currency in the Los Angeles area. They then allegedly concealed their drug trafficking proceeds and made the proceeds generated in the United States accessible to cartel members in Mexico and elsewhere.
Lead defendant Edgar Joel Martinez-Reyes, 45, of East Los Angeles, and others allegedly used a variety of methods to hide the money’s source, including trade-based money laundering, “structuring” assets to avoid federal financial reporting requirements, and the purchase of cryptocurrency.
Twenty of the individuals charged in the superseding indictment are expected to be arraigned in the U.S. District Court in downtown Los Angeles in the coming weeks, including one who was arraigned on Monday.
“Dangerous drugs like fentanyl and methamphetamine are destroying people’s lives but drug traffickers only care about their profits,” said U.S. Attorney Martin Estrada for the Central District of California. “To protect our community, therefore, it is essential that we go after the sophisticated, international criminal syndicates that launder the drug money. As this indictment and our international actions show, we will be dogged in our pursuit of all those who facilitate destruction in our country and make sure they are held accountable for their actions.”
“Relentless greed, the pursuit of money, is what drives the Mexican drug cartels that are responsible for the worst drug crisis in American history,” said DEA Administrator Anne Milgram. “This DEA investigation uncovered a partnership between Sinaloa Cartel associates and a Chinese criminal syndicate operating in Los Angeles and China to launder drug money. Laundering drug money gives the Sinaloa Cartel the means to produce and import their deadly poison into the United States. DEA’s top operational priority is to save American lives by defeating the cartels and those that support their operations. This investigation is the latest example, and there is more to come.”
“Drug traffickers generate immense amounts of cash through their illicit operations. This case is a prime example of Chinese money launderers working hand in hand with drug traffickers to try to legitimize profits generated by drug activities,” said Chief Guy Ficco of IRS Criminal Investigation. “We have made it a priority to identify, disrupt, and dismantle any money launderers working with drug cartels and we are committed to our partnerships with federal, state, and local law enforcement agencies to combat drug cartels and those who assist them in laundering drug proceeds.”
As part of this investigation, law enforcement has seized approximately $5 million in narcotics proceeds, 302 pounds of cocaine, 92 pounds of methamphetamine, 3,000 Ecstasy pills, 44 pounds of psilocybin (magic mushrooms), numerous ounces of ketamine, three semi-automatic rifles with high-capacity magazines, and eight semi-automatic handguns.
Background
The Sinaloa Cartel is largely responsible for the massive influx of fentanyl into the United States over the past approximately eight years, and for the accompanying violence and deaths that have afflicted communities on both sides of the border. The cartel’s activities generate enormous sums of U.S. currency in the United States that belong to the cartel in Mexico. Profits from the drug trade must be repatriated to Mexico for use by the cartel.
Chinese underground money exchanges in the United States assist the Sinaloa and other cartels to move their profits from the United States to Mexico by providing a ready market for U.S. currency in the United States.
Many wealthy Chinese nationals who live, work, or invest in China wish to transfer assets to the United States for various reasons but are barred by the Chinese government’s capital flight restrictions from transferring the equivalent of more than $50,000 per year out of China. These individuals seek informal alternatives to the conventional banking system to move their funds.
To transfer money to the United States, the China-based investor contacts an individual who has U.S. dollars available to sell in the United States. The seller of U.S. dollars provides identifying information for a bank account in China with instructions for the investor to deposit Chinese currency (renminbi) in that account. Once the owner of the account sees the deposit, an equivalent amount of U.S. dollars is released to the buyer in the United States.
The sellers of U.S. currency in the United States obtain dollars in a variety of ways. Some of them accept cash from individuals engaged in criminal activity that generates large amounts of bulk currency, including drug trafficking. These U.S. currency brokers charge a percentage commission as a fee to the owner of the criminal proceeds to conceal the nature and source of the funds—typically far less for their services than their competitors. Drug traffickers increasingly have partnered with Chinese underground money exchanges to take advantage of the large demand for U.S. dollars from Chinese nationals.
The funds that are transferred in China are then used to pay for goods purchased by businesses and organizations in Mexico or elsewhere such as consumer goods or items needed to aid the drug trafficking organization to manufacture illegal drugs, such as precursor chemicals, including fentanyl.
The Superseding Indictment
According to the superseding indictment, from October 2019 to October 2023, members and operatives of the Sinaloa Cartel imported large quantities of narcotics, including fentanyl, cocaine, and methamphetamine, into the United States, generating huge sums of drug cash proceeds in U.S. dollars.
In January 2021, Martinez-Reyes allegedly traveled to Mexico to meet with Sinaloa Cartel members to strike a deal with money remitters with links to Chinse underground banking to launder drug trafficking proceeds in the United States. After the deal was struck, the Sinaloa Cartel—through their connections and associates—distributed cocaine, methamphetamine, and other narcotics, generating U.S. dollars as drug proceeds.
Martinez-Reyes and other conspirators allegedly then delivered the currency—frequently in amounts of hundreds of thousands of U.S. dollars in cash—to other members of the Chinese underground money exchange and remitting organizations to be laundered for a fee. The remitting organizations possessed large amounts of U.S. currency and could help wealthy Chinese nationals evade China’s currency controls.
The money remitters allegedly disposed of the drug proceeds by either delivering United States currency directly to their money exchange customers or by purchasing real or personal property, including luxury goods and cars to be shipped to China. Additionally, the remitters also moved illicit drug proceeds through cryptocurrency transactions. They also allegedly used a variety of traditional methods to place the funds into the traditional banking system such as purchasing cashier’s checks, or “structuring,” that is, depositing small amounts at a time into bank accounts opened for this purpose to avoid banks from reporting large cash deposits to the U.S. government.
The remaining seven counts charge individual defendants with crimes such as possession of pound quantities of cocaine and methamphetamine, structuring funds to avoid federal reporting requirements placed on banks, and one count of assault with a deadly weapon on a federal officer.
If convicted of all charges, each defendant faces a mandatory minimum of 10 years in prison and a maximum penalty of life in prison.
The DEA, IRS Criminal Investigation, South Gate Police Department, Downey Police Department, Glendora Police Department, Fullerton Police Department, and El Monte Police Department are investigating the case, with valuable assistance from the FBI and U.S. Marshals Service.
Assistant U.S. Attorney Julie J. Shemitz for the Central District of California is prosecuting the case. The Justice Department’s Office of International Affairs and Criminal Division’s Narcotic and Dangerous Drug Section’s Special Operations Unit assisted with the investigation and overseas coordination in the case.
This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at www.justice.gov/OCDETF.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Superseding IndictmentCorona Man Pleads Guilty to Preparing False Tax ReturnsRead the Press Release
RIVERSIDE, California – A Riverside County man has pleaded guilty to federal criminal charges for preparing and filing false tax returns for his clients, the Justice Department announced today.
Salvador Gonzalez, of Corona, pleaded guilty on Monday to three counts of aiding and assisting in the preparation of false tax returns.
According to court documents and statements made in court, starting in 2013, Gonzalez operated Grace’s Lighthouse Resource Center, Inc., a return-preparation business. Since then, Gonzalez has prepared or assisted in the preparation of more than 11,000 tax returns that requested refunds from the IRS totaling more than $38 million.
Consistently, Gonzalez directed his clients to create a phony corporation and to title their homes, cars, and other assets in the name of the corporation. Gonzalez then referred those clients to an associate to prepare these sham corporation’s tax returns. The associate would provide the clients with a blank spreadsheet and request that they input their business expenses into that spreadsheet. At Gonzalez’s direction, the clients would include personal expenses, such as their mortgage payments, car payments, and utility bills, and then provide the spreadsheet to the associate. The associate would, in turn, use the spreadsheet to prepare the business tax returns, which inevitably would show a loss.
Gonzalez then prepared the clients’ individual income tax returns, which incorporated the fraudulent business losses and offset their income. To further reduce the clients’ taxes owed to the IRS, Gonzalez also fabricated deductions on the personal returns such as unreimbursed employee expenses, cash contributions to charity, and medical and dental expenses. As a result of Gonzalez’s fraudulent return-preparation practices, his clients paid less taxes than they owed.
Gonzalez profited from his return-preparation business. Before 2019, he typically charged clients a flat fee of $500 per tax return. In 2019, he started charging clients 1% of their gross income as a fee for his services.
United States District Judge Jesus G. Bernal scheduled an October 7 sentencing hearing in this case, at which time Gonzalez will face a maximum penalty of three years in prison for each count.
IRS Criminal Investigation is investigating the case.
Assistant United States Attorney Eli A. Alcaraz of the Riverside Branch Office and Trial Attorney Lauren K. Pope of the Justice Department’s Tax Division are prosecuting the case.
Texas Man Sentenced to Nearly 3 Years in Federal Prison for Threatening Violence Against Los Angeles-Area CongresswomanRead the Press Release
LOS ANGELES – A Texas man was sentenced today to 33 months in federal prison for making a series of threatening telephone calls to the district office of U.S. Rep. Maxine Waters, an elected official representing California’s 43rd Congressional District, which comprises of parts of Los Angeles, including South Los Angeles, as well as parts of the South Bay.
Brian Michael Gaherty, 61, of Houston, was sentenced by United States District Judge R. Gary Klausner, who also fined Gaherty $10,000. Judge Klausner found that Gaherty targeted Waters because of her race and applied a hate-crime enhancement to Gaherty’s sentence.
Gaherty pleaded guilty on January 29 to one count of threatening a United States official.
“Threats to harm or kill elected officials are anathema to our nation’s values and must not – and will not – be tolerated,” said United States Attorney Martin Estrada. “My office and the entire Department of Justice will continue to combat threats against public officials and other attempts to chill democracy.”
Gaherty admitted in his plea agreement to threatening to assault and murder Waters on four separate occasions in August and November of 2022. Gaherty made these threats with the intent to impede, intimidate, and interfere with Waters while she was engaged in the performance of her official duties.
Specifically, Gaherty left four voicemails at Waters’ district office in Los Angeles County, each of which contained a violent threat, profanity, and racist and misogynistic language. In August 2022, Gaherty threatened to “put a cap” between the congresswoman’s eyes,” “cut [her] throat,” “stomp” her. He further warned that she “better move” because he and his “boys in the area” had a “contract” on her life.
Authorities contacted Gaherty and warned him to disengage in October 2022, but a few weeks later, he persisted with his violent threats. In November 2022, Gaherty left Waters two additional voicemails, informing Waters that she “done [expletive] up” by reporting his threats to law enforcement, and stated, “This ain’t no threat. It’s a …promise.” He also threatened to meet Waters “on the street” and “get in [her] face,” and again told her that he and his “crowd” had a contract to “take [her]… out.” Finally, he warned, “You better watch your back.”
The United States Capitol Police investigated this matter.
Assistant United States Attorney Laura A. Alexander of the Environmental Crimes and Consumer Protection Section prosecuted this case.
Fresno Man Sentenced to over 15 Years in Prison for Multimillion-Dollar Caregiver Fraud Against Vulnerable Malibu PhysicianRead the Press Release
LOS ANGELES – A Fresno man was sentenced today to 188 months in federal prison for defrauding a vulnerable physician out of more than $2.7 million before his death and then attempting to defraud his estate out of an additional amount exceeding $20 million.
Anthony David Flores, 47, a.k.a. “Anton David,” was sentenced by United States District Judge Percy Anderson, who also ordered Flores to pay $1 million in restitution.
“This defendant heartlessly lined his own pockets while his victim mentally and physically declined, and ultimately died,” said United States Attorney Martin Estrada. “Financial fraudsters can prey on anyone, even the most financially successful among us. We hope that our efforts to convict and now sentence this defendant bring some solace to the victim’s family.”
“Mr. Flores and his co-defendant lived large on the victim's massive wealth while they relentlessly robbed and exploited his vulnerabilities until he succumbed to an early death,” said Krysti Hawkins, the Assistant Director in Charge of the FBI's Los Angeles Field Office. “The defendant deprived the victim's family access to their loved one and then dragged them through years of litigation. This case is a reminder that grifters who prey on vulnerable and unsuspecting victims cannot be tolerated by society or the law.”
Flores pleaded guilty in October 2023 to one count of conspiracy to commit mail fraud, two counts of wire fraud, two counts of mail fraud, one count of conspiracy to engage in money laundering, two counts of money laundering, and one count of engaging in monetary transactions in property derived from specified unlawful activity.
Flores’ co-defendant and former girlfriend, Anna Rene Moore, 40, who resided in Monterrey, Mexico at the time of her January 2023 arrest at a Houston airport, pleaded guilty in August 2023 to seven felonies in this case: one count of conspiracy to commit mail fraud, two counts of mail fraud, one count of conspiracy to engage in money laundering, two counts of money laundering, and one count of engaging in monetary transaction in property derived from specified unlawful activity. Her sentencing hearing is scheduled for October 28.
Flores and Moore have been in federal custody since January 2023.
“Mr. Flores’ exploitation of a mentally ill person to steal his wealth is despicable, and he will now reap the consequences of his actions,” said Special Agent in Charge Tyler Hatcher, IRS Criminal Investigation, Los Angeles Field Office. “Protecting vulnerable people from scammers will always be one of CI’s top priorities, and we will continue to work with our law enforcement partners to investigate these horrible crimes.”
Beginning in June 2017, Flores used false promises and representations to befriend the victim — a physician and successful investor worth more than $60 million, but who suffered from a mental illness and lost the ability to care for himself after multiple hospitalizations. Within days of meeting the victim, Flores and Moore moved into the victim’s beachfront Malibu home – rent free – and slowly took control of his life by pretending to be his new “best friends” and caregivers.
In September 2017, after the victim suffered a severe mental breakdown resulting in his arrest and detention in a Los Angeles County jail, Flores fraudulently induced the victim to sign powers of attorney granting Flores control over the victim’s finances.
Flores represented that he would only use these powers to access the victim’s finances to post bail for release, and that the victim could immediately rescind them once the victim was free from jail. But after the victim was released from custody, the powers of attorney were never rescinded. Within days, Flores used these powers to open bank accounts in the victim’s name with Flores listed as the power of attorney, giving himself and Moore access to the victim’s wealth.
From September 2017 to May 2018, Flores and Moore lived with the victim, diverted the victim’s funds to their own bank accounts, isolated the victim from his family and longtime friends, and provided the victim with drugs, including marijuana and LSD.
Ultimately, in May 2018, the victim died in his Malibu home at the age of 57 years old. Following the victim’s death, Flores and Moore moved back into the victim’s Malibu beachfront home and withdrew large sums of money from his accounts. They also concealed information about the victim’s finances from his mother and sister, both of whom resided in Florida. This prompted the victim’s family to file a lawsuit, which resulted in the fraud being uncovered.
In the ensuing lawsuit in Los Angeles Superior Court, Flores and Moore violated multiple court orders ordering them to return the funds stolen from the victim. They attempted to launder the fraudulent proceeds by funneling the money through multiple different accounts to thwart the victim’s estate and court-appointed receiver from recouping the money.
After extensive litigation with the victim’s estate, the lawsuit was settled with Flores and Moore withdrawing their false creditor’s claims and agreeing to repay the victim’s estate $1 million, which they have so far failed to do.
The FBI and IRS Criminal Investigation investigated this matter.
Assistant United States Attorney Andrew M. Roach of the Cyber and Intellectual Property Crimes Section is prosecuting this case. Assistant United States Attorney James E. Dochterman of the Asset Forfeiture and Recovery Section is handling asset forfeiture matters in this matter.
Former Financial TV News Analyst-Turned-Fugitive Arrested on Federal Indictment Charging Him with Defrauding InvestorsRead the Press Release
LOS ANGELES – A former San Gabriel Valley resident who was a frequent guest on financial television news programs then became a fugitive from justice after being accused of defrauding investors is expected to appear today in federal court after being arrested over the weekend.
James Arthur McDonald Jr., 52, formerly of Arcadia, was arrested Saturday at a residence in Port Orchard, Washington, and is expected to make his initial appearance today in United States District Court in Tacoma, Washington. He will arrive in Los Angeles in the coming weeks to face federal charges in this district.
McDonald had been considered a fugitive since at least November 2021, when he failed to appear before the United States Securities and Exchange Commission to testify after allegations arose that he had defrauded investors. Prior to fleeing, McDonald also appeared to have terminated his previous phone and email accounts and told one person that he planned to “vanish,” according to court documents.
Since then, a federal grand jury in Los Angeles in January 2023 returned a seven-count indictment against McDonald. He is charged with one count of securities fraud, one count of wire fraud, three counts of investment adviser fraud, and two counts of engaging in monetary transactions in property derived from unlawful activity.
According to the indictment, McDonald was the CEO and chief investment officer of two companies: Hercules Investments LLC, based in downtown Los Angeles, and Index Strategy Advisors Inc. (ISA), based in Redondo Beach. He frequently appeared as an analyst on the CNBC financial television news network.
In late 2020, McDonald lost tens of millions of dollars of Hercules client money after adopting a risky short position that effectively bet against the health of the United States economy in the aftermath of the U.S. presidential election. McDonald projected that the COVID-19 pandemic and the election would result in major selloffs that would cause the stock market to drop. When the market decline didn’t occur, Hercules clients lost between $30 million and $40 million. By December 2020, Hercules clients were complaining to company employees about the losses in their accounts.
Since McDonald’s compensation for his investment advisory services primarily was based on a percentage of assets under his management – typically 2% of a client’s total assets held by Hercules – the massive losses to Hercules clients significantly decreased the fees McDonald was entitled to collect.
In early 2021, McDonald solicited millions of dollars' worth of funds from investors in the form of a purported capital raise for Hercules but allegedly misrepresented how the funds would be used and failed to disclose the massive losses Hercules previously sustained. McDonald – an avid football enthusiast – stated that he planned to launch a mutual fund under the ticker symbol “NFLHX.” The losses to Hercules clients and the potential for litigation related to those losses jeopardized the success of that fund because any litigation would have had to be publicly disclosed.
As part of the capital raise, McDonald obtained $675,000 in investment funds from one victim group on March 9, 2021. He allegedly misappropriated those funds in various ways, including spending roughly $174,610 of them at a Porsche dealership. Approximately $109,512 was transferred to the landlord of a home McDonald was renting in Arcadia; and approximately $6,800 was spent on a website that sells designer menswear, according to court documents.
McDonald allegedly also falsely represented to clients that ISA, his other firm, was a registered investment adviser, even though he had withdrawn ISA as a state-registered investment adviser firm in May 2019. He also allegedly sent ISA clients false account statements, including for one client who invested approximately $351,000, later needed the money to make a down payment on a home, was informed by McDonald that much of the money had been lost, and never got his full investment back.
An indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
If convicted of all charges, McDonald would face a statutory maximum sentence of 20 years in federal prison for each securities fraud and wire fraud count, up to 10 years in federal prison on the monetary transactions derived from unlawful activity count, and up to five years in federal prison on the investment adviser fraud count.
The FBI and IRS Criminal Investigation are investigating this matter.
In September 2022, the SEC filed a civil complaint charging McDonald and Hercules with violations of federal securities law. On April 21, United States District Judge Percy Anderson found McDonald liable for a total of approximately $3,810,346, which represented his net profits gained because of the alleged conduct.
Assistant United States Attorney Alexander B. Schwab of the Corporate and Securities Fraud Strike Force is prosecuting this case.
Former College Football Player Pleads Guilty to a Fraud Scheme Involving More than $1 Million in COVID-19 Unemployment BenefitsRead the Press Release
LOS ANGELES – A former college football player and Orange County man pleaded guilty today to orchestrating a scheme that fraudulently sought more than $1 million and obtained more than $280,000 in pandemic unemployment benefits.
Abdul-Malik McClain, 24, most recently of Coto de Caza, pleaded guilty to one count of mail fraud.
“Instead of using his time at a major university to advance his athletic and academic life, this defendant took advantage of a public health emergency to fraudulently obtain government benefits,” said United States Attorney Martin Estrada. “My office will continue to vigorously prosecute individuals who used the recent pandemic for their own unlawful ends.”
“Mr. McLain squandered his gifts and opportunities only to defraud taxpayers whose hard-earned money was appropriated for deserving victims during the Covid era,” said Krysti Hawkins, the Acting Assistant Director in Charge of the FBI's Los Angeles Field Office. “The FBI will continue to work with our partners to identify those who leveraged the Covid pandemic to commit fraud and hold them accountable.”
According to his plea agreement, while a member of his university’s football team, McClain filed fraudulent claims for unemployment benefits and organized and assisted a group of other football players in filing fraudulent claims for unemployment benefits, including under the Pandemic Unemployment Assistance (PUA) program established by Congress in response to COVID-19’s economic fallout. McClain and others filed the claims with the California Employment Development Department (EDD), the administrator of the state’s unemployment insurance (UI) benefit program. The claims contained false information about the claimants’ supposed prior employment, pandemic-related job loss, and job-seeking efforts in California.
The false statements in the UI applications led EDD to authorize Bank of America to mail debit cards addressed to the named claimants, often to addresses that McClain controlled, such that McClain (and not the named claimants) received the debit cards. Those debit cards were loaded with various amounts in fraudulently obtained benefits, ranging from a few hundred dollars to thousands of dollars in unemployment benefits, which the recipients of the debit cards, including in many instances McClain himself, used to make cash withdrawals at ATMs and to fund personal expenses. In some cases, McClain sought and obtained a cut of the fraudulently obtained benefits for helping others file fraudulent UI applications.
McClain’s and his co-schemers’ fraudulent applications sought at least $1,056,092 in UI benefits from EDD and led to receiving at least $283,063 in fraudulently obtained benefits.
United States District Judge Michael W. Fitzgerald scheduled a September 16 sentencing hearing, at which McClain will face a maximum sentence of 20 years in federal prison.
“Abdul-Malik McClain defrauded our nation’s unemployment insurance (UI) system by filing for UI benefits in the names of identity theft victims, while so many deserving people were suffering from pandemic-related economic challenges,” said Quentin Heiden, Special Agent in Charge, Western Region, United States Department of Labor Office of Inspector General. “The benefits were intended for those who truly needed it, not for greedy individuals who chose to exploit the system. The U.S. Department of Labor, Office of Inspector General remains dedicated to its mission to combat UI fraud. Our efforts to uncover fraudulent actors and their schemes is unwavering. I would also like to thank our state and federal law enforcement partners in Los Angeles in this collaborative investigative effort.”
The FBI; the United States Department of Labor Office of Inspector General; the Federal Deposit Insurance Corp. Office of Inspector General; the United States Treasury Inspector General for Tax Administration; the Social Security Administration Office of Inspector General; and the United States Postal Inspection Service investigated this matter. The university, called “University 1” in the indictment, cooperated in this investigation.
Assistant United States Attorney Kerry L. Quinn of the Major Frauds Section 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. More information on the Justice Department’s response to the pandemic may be found here.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it to the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at (866) 720-5721 or via the NCDF online complaint form.
Justice Department Repatriates $1.4B Misappropriated 1MDB Funds to MalaysiaRead the Press Release
The Justice Department announced today that it has repatriated an additional $156 million in misappropriated 1Malaysia Development Berhad (1MDB) funds to the people of Malaysia, bringing the total returned by the department to approximately $1.4 billion.
According to court documents, the funds from 1MDB, formerly Malaysia’s investment development fund, were laundered through major financial institutions worldwide, including in the United States, Switzerland, Singapore, and Luxembourg. As alleged in the civil forfeiture complaints, from 2009 through 2015, high-level officials of 1MDB, their associates, and Low Taek Jho, also known as Jho Low, misappropriated more than $4.5 billion in funds belonging to 1MDB through a criminal scheme involving international money laundering and embezzlement. Some of the embezzlement proceeds were also allegedly used to pay bribes.
Beginning in 2016, a landmark effort encompassing 41 civil forfeiture actions filed in the U.S. District Court for the Central District of California and one in the U.S. District Court for the District of Columbia by the Money Laundering and Asset Recovery Section (MLARS) of the Justice Department’s Criminal Division led to the seizure of over $1.7 billion in stolen assets. This is the largest recovery to date under the department’s Kleptocracy Asset Recovery Initiative. The funds include both funds finally forfeited and funds the department assisted in recovering and returning. The department continues to litigate actions against additional assets allegedly linked to this scheme.
1MDB was created by the government of Malaysia to promote economic development in Malaysia through global partnerships and foreign direct investment. Its funds were intended to be used for improving the well-being of the Malaysian people. Instead, funds held by 1MDB and proceeds of bonds issued for and on behalf of 1MDB were misappropriated and spent on a wide variety of extravagant items, including luxury homes and properties in Beverly Hills, New York, and London; a 300-foot superyacht; and fine art by Monet and Van Gogh. The funds were also sent into numerous business investments, including a boutique hotel in Beverly Hills, a movie production company that made “The Wolf of Wall Street,” the redevelopment of the Park Lane Hotel in Manhattan, and shares in EMI, the largest private music rights holder. As alleged, other funds were provided to various public officials and co-conspirators.
Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division; Assistant Director Michael D. Nordwall of the FBI’s Criminal Investigative Division; and Chief Guy Ficco of the IRS Criminal Investigation (IRS-CI) made the announcement.
The FBI’s International Corruption Squads in New York and Los Angeles and IRS-CI are leading the investigation.
MLARS Trial Attorneys Barbara Levy, Josh Sohn, Jonathon Baum, and Sean Fern are prosecuting the case, with assistance from former MLARS Deputy Chief Woo S. Lee; Trial Attorney Kyle Freeny; and former Asset Forfeiture Section Chief Steven Welk, Asset Forfeiture Section Chief Jonathan Galatzan, and former Assistant U.S. Attorneys John Kucera and Michael Sew Hoy for the Central District of California.
The Justice Department’s Office of International Affairs is providing substantial assistance. MLARS’ Program Operations Unit and the U.S. Marshals Service also provided significant support.
Significant assistance has also been provided to the department over the course of its work in the investigations and civil and criminal litigation by the Attorney General’s Chambers of Malaysia, the Royal Malaysia Police, the Malaysian Anti-Corruption Commission, the United Kingdom Financial Conduct Authority, the United Kingdom Prudential Regulation Authority, the United Kingdom National Crime Agency (NCA), the Attorney General’s Chambers of the Territory of the British Virgin Islands, the Attorney General’s Office of the Bailiwick of Guernsey and the Guernsey Economic Crime Division, the International Anti-Corruption Coordinate Centre, the Attorney General’s Chambers of Singapore, the Singapore Police Force–Commercial Affairs Division, the Office of the Attorney General and the Federal Office of Justice of Switzerland, the judicial investigating authority of the Grand Duchy of Luxembourg, the Criminal Investigation Department of the Grand-Ducal Police of Luxembourg, and Indonesian, Latvian and French authorities.
The Kleptocracy Asset Recovery Initiative is led by a team of dedicated MLARS prosecutors in partnership with federal law enforcement agencies, and often with U.S. Attorney’s Offices, to forfeit the proceeds of foreign official corruption and, where appropriate, to seize, forfeit, and repatriate those recovered assets to benefit the people harmed by these acts of corruption and abuse of office. Individuals with information about possible proceeds of foreign corruption located in or laundered through the United States should email [email protected] or submit information at https://tips.fbi.gov/.
Orange County Man Indicted for Allegedly Robbing Anaheim Bank and Taking Hostages the Day After His Release from State PrisonRead the Press Release
SANTA ANA, California – A federal grand jury today returned an indictment against an Orange County man who allegedly took three bank employees hostage when he robbed a bank branch in Anaheim last month – the day after being released from state prison.
Eric Walter Gray, 53, is charged with one count of bank robbery and forced accompaniment. Gray has been in federal custody since June 5 after being transferred from state custody. A federal magistrate judge has ordered him jailed without bond.
Gray’s arraignment is scheduled for June 24 in United States District Court in Santa Ana.
“One day after his release from prison, this defendant allegedly chose to return to crime by taking three victims hostage while he robbed a bank,” said United States Attorney Martin Estrada. “My office will continue its efforts to prosecute and punish violent recidivist criminals who harm our community.”
“The victims in this case dealt with fear and death threats while the defendant held them hostage until they were rescued, thanks to the courage of bank employees who notified police,” said Krysti Hawkins, the Acting Assistant Director in Charge of the FBI's Los Angeles Field Office. “This ongoing investigation is the result of a collaborative effort among local and federal law enforcement and prosecutors with the shared goal of holding Mr. Gray accountable for his violent actions.”
According to an affidavit in support of a criminal complaint filed in this case, Gray robbed a BMO bank branch in Anaheim on May 8 – the day after being released from San Quentin Rehabilitation Center. While in the bank branch and after loitering there for a long time, Gray allegedly jumped over the teller counter, stated that he had a gun, and demanded money from the teller. Money was taken from the teller drawers and was given to Gray, who proceeded to put the money in his pockets.
Gray then allegedly ordered the bank manager and two bank employees into a storage room inside the bank. Gray eventually let two of those employees out of the storage room but held the bank manager hostage for approximately one hour, according to court documents. During the robbery, at least one bank employee notified law enforcement. Eventually, Gray exited the storage room with the bank manager and was arrested without incident. Law enforcement later found cash and narcotics hidden inside Gray’s body, court papers allege.
Gray was taken to a hospital for a scan and, while there, allegedly repeatedly tried to escape and also fought with police officers, resulting in multiple injuries to the officers involved.
“I am incredibly proud of the professionalism, restraint, and compassion of our Officers as they risked their lives to bring this volatile incident to a safe resolution,” said Anaheim Police Chief Rick P. Armendariz. “This incident is just one example of the exceptional work done every day by the men and women of the Anaheim Police Department to ensure Anaheim is a safe community to live, work, and play.”
An indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
If convicted, Gray would face a mandatory minimum sentence of 10 years in federal prison and a maximum sentence of 20 years in federal prison.
The Orange County District Attorney’s Office charged Gray in connection with this incident, but dismissed their case so the federal case against him could proceed.
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 Anaheim Police Department are investigating this matter.
Assistant United States Attorney Caitlin J. Campbell of the Santa Ana Branch Office is prosecuting this case.
Northridge Man Sentenced to More Than 3½ Years in Federal Prison for Campaign in Which He Threatened Violence Against Jewish and Asian AmericansRead the Press Release
LOS ANGELES – A San Fernando Valley man, who has admitted to engaging in a 14-month campaign in which he threatened a Jewish victim with violent and antisemitic rhetoric and threatened to “exterminate” Jewish people and Asian Americans, was sentenced today to 43 months in federal prison.
Andre Morrow Lackner, 35, of Northridge, was sentenced by United States District Judge Dale S. Fischer.
Lackner pleaded guilty on January 29 to one count of stalking. He has been in federal custody since December 2022.
“Hate and intolerance, including antisemitism, is both wrong and anti-American,” said United States Attorney Martin Estrada. “Our nation is one of inclusion, not exclusion, and through this case we send a strong message that we will not tolerate attempts to divide us.”
“The defendant admitted to stalking victims based on either their religion or their race by making vile threats for more than a year,” said Krysti Hawkins, the Acting Assistant Director in Charge of the FBI's Los Angeles Field Office. “Today's sentence is evidence that there is zero tolerance for criminal activity rooted in hatred, and of the FBI's commitment to holding accountable those who seek to threaten or harm innocent victims.”
From June 2021 to October 2022, Lackner sent a series of abusive text messages to the victim. In these messages, Lackner directed a series of antisemitic remarks to the victim, including, “Hitler was right about you people,” “I want to see every single Jew exterminated from this earth,” “Would you like to celebrate the next synagogue shooting?” and “I will make sure I kill a Jew before I leave this Earth.”
Lackner also texted the victim multiple racist statements against Asian Americans, including “We need to start more Asian hate and “wipe [Asian people] off the planet too.”
The text messages Lackner sent the victim placed her in reasonable fear of death and serious bodily injury to herself or one of her immediate family members.
The FBI investigated this matter.
Assistant United States Attorney Amanda B. Elbogen of the Terrorism and Export Crimes Section prosecuted this case.
Laguna Niguel Man Arrested for Allegedly Trying to Shoot Down Orange County Sheriff’s Department Helicopter After Birthday PartyRead the Press Release
SANTA ANA, California – An Orange County man was arrested today on a federal grand jury indictment alleging he repeatedly fired a rifle at an Orange County Sheriff’s Department helicopter after his birthday party acrimoniously ended earlier this year.
Justin Derek Jennings, 39, of Laguna Niguel, is charged with one count of attempting to damage, destroy, or disable an aircraft.
Jennings was arraigned this afternoon in United States District Court in Santa Ana and pleaded not guilty to the charge against him. A federal magistrate judge ordered him jailed without bond and scheduled an August 5 trial date in this matter.
According to court documents and the indictment that a grand jury returned on June 5, Jennings and his family were celebrating his birthday party on March 9. Jennings allegedly had been drinking and became enraged. As his outburst escalated, family members in attendance left the home. After most of his family left, Jennings allegedly removed a rifle from his gun safe and fired an entire magazine worth of ammunition inside the home. The rest of Jennings’ family fled and reported the incident to law enforcement.
The Orange County Sheriff’s Department responded with several deputies and a police helicopter that flew in circles around the area. Jennings allegedly then went to the home’s second story and began shooting a rifle upwards in the sky, firing only when the helicopter was visible to him. The shooting continued intermittently for at least 20 minutes, court documents state. After speaking with an Orange County sheriff’s deputy, Jennings exited the residence and surrendered.
During a search of Jennings’ residence, law enforcement seized two revolvers, two handguns, and two rifles along with multiple rounds of ammunition. Bullet casings were scattered throughout the floor and law enforcement also seized two magazines and a box of ammunition that was on a couch beneath the window from where Jennings allegedly fired.
An indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
If convicted, Jennings would face a statutory maximum sentence of 20 years in federal prison.
The Orange County District Attorney’s Office charged Jennings in connection with this incident, but dismissed the case so the federal case against him could proceed.
The FBI and the Orange County Sheriff’s Department investigated this matter.
Assistant United States Attorney Caitlin J. Campbell of the Santa Ana Branch Office is prosecuting this case.
‘Chesapeake Bandits’ Member Sentenced to Nearly 14 Years in Prison for Robbing Armored Truck and Stealing More Than $160,000 in CashRead the Press Release
LOS ANGELES – A member of a group law enforcement officials dubbed the “Chesapeake Bandits” was sentenced today to 166 months in federal prison for acting as a lookout in an armed robbery of an armored truck that netted the group more than $160,000 in cash and during which a handgun was fired.
James Russell Davis, 35, of the West Adams neighborhood of Los Angeles, was sentenced by United States District Judge Fernando L. Aenlle-Rocha, who also ordered Davis to pay $166,640 in restitution.
Davis pleaded guilty on February 16 to one count of interference with commerce by robbery (Hobbs Act) and one count of discharging a firearm in furtherance of a crime of violence. He has been in federal custody since March 2023.
“When people commit crimes with guns, tragedies happen,” said United States Attorney Martin Estrada. “This is why it is so important that we bring the weight of federal prosecution against the perpetrators of violent gun crime. My office is committed to working with our federal, state, and local partners to make our cities safer.”
“Imagine the terror of being pulled to the ground with a gun pointed at your head. Davis and his accomplices violently ambushed an individual just doing his job so they could make off with other people’s money,” said Krysti Hawkins, Acting Assistant Director in Charge of the FBI’s Los Angeles Field Office. “This significant sentence cannot undo the emotional and psychological damage inflicted on the victim, but we hope it sends a clear message that we will continue to pursue the most violent and persistent offenders and hold them accountable for their blatant disregard for human life and the safety of our communities.”
“I am proud of the work and dedication of our investigators and the unwavering support of the U.S. Attorney’s Office as we work together to stop criminals who take away the feeling of safety in our communities,” said Los Angeles Police Chief Dominic H. Choi.
In February 2022, Davis and a co-conspirator scoped out a credit union in Hawthorne, and planned to ambush the truck driver after he finished servicing an ATM.
Several weeks later, Davis and his accomplices returned to the site, executing their planned armed robbery of the same armored truck driver refilling ATMs. Davis maintained a lookout position, conducting counter-surveillance nearby, while his partners, armed with an AR-style rifle and a semi-automatic handgun, emerged from their vehicle.
During the robbery, one of the conspirators forced the victim to the ground by pressing a firearm to his head while a co-conspirator took the victim’s service pistol from his waistband, and kept a gun pointed at the victim to restrain him during the robbery.
Davis’ co-conspirators then took cash and customer checks from the ATMs and bags nearby. During the robbery, Davis’ co-conspirator discharged one of the handguns he was carrying.
Davis’ co-conspirators stole bags filled with a total of approximately $166,640 in cash belonging to the armored car company.
Deneyvous Jayan Hobson, 38, also of the West Adams neighborhood of Los Angeles, this case’s lead defendant, has pleaded not guilty to charges in this case. His trial is scheduled for September 3. Hobson is charged with one count of Hobbs Act conspiracy, one count of Hobbs Act robbery, one count of using a firearm in furtherance of a crime of violence, and one count of being a felon in possession of a firearm and ammunition.
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, the Los Angeles Police Department, the Los Angeles County Sheriff’s Department, and the Hawthorne Police Department investigated this matter.
Assistant United States Attorneys Kevin J. Butler and Jena A. MacCabe of the Violent and Organized Crime Section and Jason C. Pang of the General Crimes Section are prosecuting this case.
Former Senior Executive at Chinatown Bank Sentenced to 3 Years in Federal Prison for Embezzling More Than $700,000 from EmployerRead the Press Release
LOS ANGELES – The former chief financial officer at a bank in the Chinatown area of downtown Los Angeles was sentenced today to 36 months in federal prison for embezzling more than $700,000 of his employer’s funds.
Sammy Sims, 61, of West Covina, was sentenced by United States District Judge Maame Ewusi-Mensah Frimpong, who also ordered him to pay $306,849 in restitution.
Sims pleaded guilty on February 22 to one count of bank fraud and admitted at that hearing and in court documents to stealing bank employees’ identities to open life insurance policies in their names to benefit his wife.
Chinatown-based Eastern International Bank hired Sims in September 2017 as the lender’s CFO. As a condition of his employment, Sims agreed that he would not use the bank’s confidential information for his personal benefit or for others. The bank’s policy also required Sims to promptly disclose any conflicts or appearances of conflict with the bank’s interests. Sims’s scheme to defraud his employer lasted from February 2018 until at least April 2021.
From August 2018 to October 2020, Sims wired $86,000 in bank funds to the United States Treasury and California Franchise Tax Board to make payments towards the personal federal and state income taxes for himself and his wife. Sims concealed these transactions by creating false entries in the bank’s general ledger that falsely represented that the payments were for the bank’s tax accounts.
In April 2019, Sims used approximately $14,161 in bank funds to a debt collection agency to help pay off a debt that he had incurred. Sims concealed this transaction by creating a false entry in the bank’s general ledger that falsely stated the payment was for data processing software.
From April 2019 to December 2020, Sims took approximately $113,264 in money belonging to the bank to pay the balances on his personal credit card. Sims hid these expenses in the bank’s general ledger by falsely labeling them as bank expenses. During this time, he also siphoned approximately $81,815 from the bank by using a bank credit card, meant for work purposes, for his personal expenses, including steak dinners and a trip to Las Vegas.
Sims, from February 2020 to April 2021, also lied to several bank employees by telling them they had to switch their bank-funded life insurance policies because of their age. What neither the employees nor the bank knew was these policies were obtained through Sims’s wife, a licensed life insurance broker who received a commission for each life policy she sold. For some employees, Sims obtained their personal identifying information without their consent and then used this information to purchase life insurance policies from his wife. Sims used a checking account belonging to the bank to wire approximately $311,608 of the bank’s money to several life insurance companies to partially pay for the premiums for these policies.
Later, when Sims was confronted about the life insurance policies opened using bank employees’ personal identifying information, he lied by saying the employees’ identities could have been stolen through a cybersecurity hack or by unauthorized disclosures by the bank’s personnel department. Sims resigned from the bank shortly after being confronted about the life insurance policies.
In total, Sims unlawfully took $737,849 of bank funds for his personal use and benefit.
The FBI and the Federal Deposit Insurance Corporation Office of Inspector General investigated this matter.
Assistant United States Attorney Jason C. Pang of the General Crimes Section prosecuted this case, with assistance from Assistant United States Attorney James E. Dochterman of the Asset Forfeiture and Recovery Section.
Detroit-Area Man Sentenced to More Than 10 Years in Federal Prison for Maliciously Setting Fires to Commercial Truck TrailersRead the Press Release
RIVERSIDE, California – A Michigan man was sentenced today to 121 months in federal prison for maliciously setting fires to six semi-trailers belonging to a major commercial trucking company in the Inland Empire and High Desert during a 10-month span.
Viorel Pricop, 66, of Allen Park, Michigan, was sentenced by United States District Judge Sunshine S. Sykes, who also ordered him to pay $648,384 in restitution.
At the conclusion of a 16-day trial, a jury on March 12 found Pricop guilty of six counts of arson of vehicle or property in interstate commerce. He has been in federal custody since October 2022.
“This defendant was given a second chance but chose to throw it away and go on a national campaign of revenge,” said United States Attorney Martin Estrada. “By setting fire to trailer after trailer with the drivers inside the trucks, he recklessly put people’s lives at risk. Violent recidivist criminals such as this defendant will only be deterred with consequences and the sentence imposed today does just that.”
“Thanks to the outstanding work by dedicated ATF agents, partners from the New Mexico State Fire Marshal’s Office, and the United States Attorney’s Office from the Central District of California, a serial arsonist was held to justice,” said Special Agent in Charge Brendan Iber. “Our communities deserve to be safe from violent criminals and due to the tireless work by agents, investigators and prosecutors, community members can rest a little easier knowing that an arsonist is no longer setting fires.”
“We’re proud of the work our investigators were able to do with our partners to catch this serial arsonist, and piece together a strong case that helped bring him to justice,” said New Mexico State Fire Marshal Randy Varela. “We’ll continue to work with partners to keep our communities, and our neighbors, safe.”
From December 2021 to September 2022, Pricop maliciously set fire to six semi-trailers belonging to Swift Transportation, a Phoenix-based commercial trucking company. Four of the arsons occurred in San Bernardino County (Newberry Springs, Ludlow, Barstow, and Hesperia) and two occurred in Riverside County (Coachella).
In each of the incidents, the Swift-owned trailer was parked at or near a truck stop when a fire occurred on the trailer portion of the vehicle, mainly on or near the trailer tires.
Pricop set on fire at least 18 additional Swift Transportation semi-trailers in other states from June 2020 to March 2022, according to an affidavit previously filed in this case. These incidents occurred at locations spanning from Barstow, California to McCalla, Alabama, with most incidents occurring along Interstate 10 and Interstate 40, the affidavit states. Federal criminal charges associated with some of these fires were filed against Pricop in the District of New Mexico and the District of Arizona.
Swift Transportation hired a fire investigation consultant to assist with fire scene examinations. A pattern began to develop when multiple reports noted substantially similar methods of lighting the trailers on fire, including where on the vehicles the fires began, and the fact the fires occurred during the middle of the night.
A review of cell tower data near some of the fires showed that a specific device – later found to be a navigation device installed in a commercial tractor-style truck – connected to cell towers near many of the fires at or around the times of the fires. Law enforcement determined that this device was installed on a vehicle operated by Pricop. Law enforcement also identified the cellphone subscribed to Pricop and, after obtaining court authorization, obtained historical cellular data and real-time location information for Pricop’s cellphone. Analysis of this data showed that Pricop’s cellphone was present in the general area of all California fires, as well as the 18 additional fires across the country.
In September 2022, search warrants were executed on Pricop’s tractor-trailer, personal vehicle and residence, yielding additional evidence corroborating his involvement in this series of arsons. This evidence included a gas torch, torch-style lighters, and record keeping documents containing location information, such as cargo pickup and delivery dates which coincided with the time and location of several fires in the series of 24 fires across the country.
Swift Transportation and other trucking companies were victims of thefts between 2010 and 2014. Swift initiated its own investigation into those thefts and utilized bait trailers to catch thieves. In 2015, someone broke into one of the bait trailers and took boxes of electronic goods containing tracking devices. Swift investigators tracked those boxes to a storage facility in Michigan, and local law enforcement in Michigan arrested Pricop in possession of the boxes of electronic goods from the bait trailer.
Pricop was convicted in 2018 in the Eastern District of Michigan for a tax offense and for transportation of stolen goods, charges stemming from the investigation conducted by Swift. Pricop was sentenced to time served in that case, amounting to approximately 26 months’ imprisonment. His term of supervised release ended in June 2019, approximately one year before the arsons in this case began.
The Bureau of Alcohol, Tobacco, Firearms and Explosives, and the New Mexico State Fire Marshal’s Office investigated this matter.
Assistant United States Attorneys Cory L. Burleson, Sean D. Peterson and Mitchell M. Suliman of the Riverside Branch Office prosecuted this case.
Studio City Man Arrested for Allegedly Causing Fireworks to Be Shot from In-Flight Helicopter in Video He Directed for YouTube ChannelRead the Press Release
LOS ANGELES – A San Fernando Valley man has been arrested on a federal criminal complaint alleging he directed a YouTube video in which two women in a helicopter – flying near the ground and without filming permits – repeatedly shot fireworks at a Lamborghini sportscar last year in San Bernardino County, the Justice Department announced today.
Suk Min Choi, 24, a.k.a. “Alex Choi,” of Studio City, is charged with one count of causing the placement of an explosive or incendiary device on an aircraft. Choi is scheduled to make his initial appearance this afternoon in United States District Court in downtown Los Angeles. He was arrested on Wednesday and his arraignment is expected in the coming weeks.
According to an affidavit filed with the complaint, on July 4, 2023, Choi posted on his YouTube channel a video entitled, “Destroying a Lamborghini with Fireworks.” In the video, Choi allegedly presses a “fire missiles” button while two women are in a helicopter, shooting fireworks at a speeding Lamborghini sportscar. Law enforcement believes the video was shot on the El Mirage Dry Lakebed in San Bernardino County.
YouTubeScreenshot of YouTube video from the complaint affidavit in USA v. Choi. Credit: DOT-OIG
After shooting what appears to be a live-action version of a fictionalized video game scene, the video transitions to a behind-the-scenes look at how Choi shot the first third of the video. During this portion of the video, Choi allegedly makes various references to himself coordinating the shoot. Specifically, the video states that Choi directed it. In the video, Choi thanks a camera company for “being a part of my crazy stupid ideas.” He also allegedly said in the video that the group who helped make the video “[expletive] up” at one point “because I forgot to tell my friend how to use a torch.”
Finally, as noted in the affidavit, during the video it appears Choi made the decision to end filming when someone asked if they would film again, stating, “No, that’s it. We’re out of fireworks, right?”
In other parts of the video, Choi is seen next to the helicopter, holding what appears to be a firework, according to the affidavit.
Law enforcement believes that Choi committed the offense sometime in June 2023, that he did not have a permit to film a shoot using fireworks on a helicopter, and that he purchased the fireworks in Nevada because they were illegal in California.
A complaint is merely an allegation, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
If convicted, Choi would face a statutory maximum sentence of 10 years in federal prison.
The United States Department of Transportation Office of Inspector General and the Bureau of Alcohol, Tobacco, Firearms and Explosives are investigating this matter.
Assistant United States Attorney Dominique Caamano of the Environmental Crimes and Consumer Protection Section is prosecuting this case.
California Man Found Guilty of Sending Threatening Emails to FBI that Included Threats to Bomb Its L.A. Field OfficeRead the Press Release
A federal jury convicted a California man for sending threatening emails to the FBI, including ones in which he threatened to bomb the FBI Los Angeles Field Office and referenced the notorious “Unabomber.”
Mark William Anten, 52, of Sun Valley, was found guilty of two counts of threats by interstate communication. He has been in federal custody since December 2023.
According to evidence presented at a three-day trial, from July 2023 to December 2023, Anten sent a series of increasingly threatening communications to the FBI, culminating in two threats to bomb the FBI field office in Westwood.
"This verdict should make clear that the Justice Department has no tolerance for threats of violence against the FBI,” said Attorney General Merrick B. Garland. “The men and women of the FBI are courageous public servants who do their work with integrity and skill, and we will stop at nothing to hold accountable those who threaten them with violence."
“Law enforcement officers put their lives on the line to keep our community safe and therefore deserve our thanks and respect,” said U.S. Attorney Martin Estrada for the Central District of California. “Those who threaten the FBI and other law enforcement officers ignore the daily sacrifices these officers make to protect us and undermine the rule of law. We will continue to stand with our law enforcement partners.”
These emails included repeated references to Theodore John Kaczynski, also known as “The Unabomber,” whose 20-year bombing campaign killed three people and injured nearly two dozen more. Kaczynski was convicted of federal crimes, spent the bulk of his prison sentence in the Supermax federal prison in Colorado and died in a different federal prison last year.
On Nov. 20, 2023, two FBI task force officers interviewed Anten in front of his residence. During the interview, Anten admitted to sending the previous communications and the officers admonished him to stop contacting agents, the affidavit states. Despite the admonition, Anten’s conduct escalated.
On Dec. 5, 2023, Anten sent to FBI agents an email in which he wrote, “I AM THE UNABOMBER” and “I WILL UNABOMB THE LOS ANGELES FBI HQ.”
The next day, Anten wrote to FBI agents, “I can go on a mass murder spree. In fact it would be very explainable by your actions.” He concluded the email with, “[y]ou ain’t getting away with this one,” and signed the email, “SuperMax or Death.”
Anten also sent FBI agents an email, which attached a photograph depicting the results of an internet search for “how to make a dirty bomb.”
Later that day, Anten visited the FBI Los Angeles Field Office and later emailed agents that he visited their building and would continue to do so. Surveillance footage confirmed Anten’s presence there.
Anten was convicted of two counts of threats by interstate communication. He is scheduled to be sentenced on Sept. 13 and faces a statutory maximum sentence of five years in prison for each count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI is investigating the case.
Assistant U.S. Attorneys Clifford D. Mpare and Kedar S. Bhatia for the Central District of California are prosecuting this case.
San Fernando Valley Man Found Guilty of Sending Threatening Emails to FBI that Included Threats to Bomb Its L.A. Field OfficeRead the Press Release
LOS ANGELES – A San Fernando Valley man was found guilty by a jury today of sending threatening emails to the FBI, including ones in which he threatened to bomb the FBI’s Los Angeles Field Office and referenced the notorious “Unabomber.”
Mark William Anten, 52, of Sun Valley, was found guilty of two counts of threats by interstate communication. He has been in federal custody since December 2023.
According to evidence presented at a three-day trial, from July 2023 to December 2023, Anten sent a series of increasingly threatening communications to the FBI, culminating in two threats to bomb the FBI field office in Westwood.
“Law enforcement officers put their lives on the line to keep our community safe and therefore deserve our thanks and respect,” said United States Attorney Martin Estrada. “Those who threaten the FBI and other law enforcement officers ignore the daily sacrifices these officers make to protect us and undermine the rule of law. We will continue to stand with our law enforcement partners.”
“Even after being warned, Mr. Anten double-downed on his threats to murder FBI employees,” said Krysti Hawkins, the Acting Assistant Director in Charge of the FBI's Los Angeles Field Office. “The FBI will not tolerate credible death threats to individuals or institutions and, as evidenced during the trial, neither did the jury.”
These emails included repeated references to Theodore John Kaczynski, a.k.a. “The Unabomber,” whose 20-year bombing campaign killed three people and injured nearly two dozen more. Kaczynski was convicted of federal crimes, spent the bulk of his prison sentence in the Supermax federal prison in Colorado and died in a different federal prison last year.
On November 20, 2023, two FBI task force officers interviewed Anten in front of his residence. During the interview, Anten admitted to sending the previous communications and the officers admonished him to stop contacting agents. Despite the admonition, Anten’s conduct escalated.
On December 5, 2023, Anten sent to FBI agents an email in which he wrote, “I AM THE UNABOMBER” and “I WILL UNABOMB THE LOS ANGELES FBI HQ.”
The next day, Anten wrote to FBI agents, “I can go on a mass murder spree. In fact it would be very explainable by your actions.” He concluded the email with, “[y]ou ain’t getting away with this one,” and signed the email, “SuperMax or Death.”
Anten also sent FBI agents an email, which attached a photograph depicting the results of an internet search for “how to make a dirty bomb.”
Later that day, Anten visited the FBI’s Los Angeles Field Office and later emailed agents that he visited their building and would continue to do so. Surveillance footage confirmed Anten’s presence there.
United States District Judge Wesley L. Hsu scheduled a September 13 sentencing hearing, at which time Anten will face a statutory maximum sentence of five years in federal prison for each count.
The FBI investigated this matter.
Assistant United States Attorneys Clifford D. Mpare and Kedar S. Bhatia, both of the General Crimes Section, are prosecuting this case.
West Covina Man Pleads Guilty to Possessing and Distributing Hundreds of Sexually Explicit Images and Videos of ChildrenRead the Press Release
LOS ANGELES – A San Gabriel Valley man pleaded guilty today to federal criminal charges for knowingly distributing, receiving, and possessing child sexual abuse material (CSAM) from his home and admitted to possessing hundreds of images and videos of sexually explicit material involving children, including infants and toddlers.
Herbert Redholtz, 74, of West Covina, pleaded guilty to five felonies: two counts of distribution of child pornography, two counts of receipt of child pornography, and one count of possession of child pornography. Redholtz remains free on $20,000 bond.
According to his plea agreement, from at least April 2014 to November 2014, Redholtz knowingly distributed, received, and possessed CSAM using his personal email account. Specifically, he possessed hundreds of videos and images of CSAM via this email account, which he accessed from his personal computer while at home.
Redholtz’s email account contained approximately 448 images and 109 videos depicting sexually explicit content involving children as well as 402 images and 25 videos depicting child erotica. This account also contained approximately 1,109 emails containing evidence of similar images sent to or from Redholtz’s email address.
Redholtz admitted in his plea agreement that he knew the production of such visual depictions involved minors, including victims under the age of 12 years old being used for sexual acts, including infants and toddlers.
United States District Judge Mark C. Scarsi scheduled an October 7 sentencing hearing, at which time Redholtz will face a mandatory minimum sentence of five years in federal prison for each child pornography distribution and receipt count, and a statutory maximum sentence of 20 years in federal prison for each count charged.
Redholtz was charged in Los Angeles Superior Court after his arrest in March 2021 for allegedly possessing CSAM. That charge was dismissed so the federal case against Redholtz could proceed.
Homeland Security Investigations and the United States Postal Inspection Service investigated this matter.
Assistant United States Attorneys Nisha Chandran of the Cyber and Intellectual Property Crimes Section and Amanda B. Elbogen of the Terrorism and Export Crimes Section are prosecuting this case.
San Bernardino Man Sentenced to 15½ Years in Federal Prison for Marijuana Armed Robbery that Led to Victim’s DeathRead the Press Release
RIVERSIDE, California – A San Bernardino man who arranged a drug deal that resulted in a 21-year-old man being shot and killed was sentenced today to 186 months in federal prison.
Dillion Jones, 20, was sentenced by United States District Judge Jesus G. Bernal, who also ordered him to pay $14,342 in restitution.
Jones pleaded guilty in March 2023 to one count of conspiracy to interfere with commerce by robbery, one count of interference with commerce by robbery (Hobbs Act), one count of discharging a firearm during and in relation to a crime of violence resulting in death, one count of discharging a firearm during and in relation to a crime of violence, and one count of possessing a stolen firearm.
Previously in this case, Rontrell Brainell Shaw, 22, of San Bernardino, the robbery crew’s getaway driver, was sentenced to 14 years in federal prison and his brother, Martrell Patrick Shaw, 20, also of San Bernardino, who participated in the fatal robbery, was sentenced to 20 years in federal prison.
“This defendant’s reckless disregard for human life resulted in a senseless murder and a grieving family left behind,” said United States Attorney Martin Estrada. “We cannot accept violence on our streets. Today’s sentence sends a message that my office is committed punishing and deterring violent gun crime.”
“These violent criminals create unsafe communities with their horrific acts,” said Acting Special Agent in Charge of ATF Los Angeles Field Division Jose Medina. “ATF is dedicated to using all its federal tools and resources to make our communities safer. Our agents will continue to work alongside state and local law enforcement targeting violent career criminals while protecting our neighborhoods.”
In July 2021, Jones placed an order with the victim for one pound of marijuana. Jones placed the order knowing that neither Martrell Shaw nor Rontrell Shaw nor he had enough money to pay for it. Instead, the trio planned to rob the victim at gunpoint. Jones and Martrell Shaw brought a loaded firearm with them while Rontrell Shaw acted as their driver.
Once the victim arrived at what he thought was the drug deal location in San Bernardino County, Martrell Shaw and Jones robbed him at gunpoint. During the robbery, one of the robbers discharged the firearm twice, striking the victim in the neck and torso. Martrell Shaw and Jones then stole the marijuana and a firearm belonging to the victim, who later died from the gunshot wounds he suffered. Rontrell Shaw then picked up Martrell Shaw and Jones and fled the scene.
The Bureau of Alcohol, Tobacco, Firearms and Explosives and the San Bernardino Police Department investigated this case.
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.
Assistant United States Attorney Peter H. Dahlquist of the Riverside Branch Office prosecuted this case.
Chinese Nationals Arrested for Alleged $12.3 Million Fraud Involving Fraudulent Return of Counterfeit Apple iPhones and Other DevicesRead the Press Release
LOS ANGELES – Five Chinese nationals are scheduled to be arraigned today after their arrest on federal charges alleging they operated a large-scale, trans-Pacific counterfeit Apple Inc. device scheme that included the fraudulent returns of thousands of iPhones, iPads, and other Apple goods and caused the Cupertino-based technology company at least $12.3 million in losses.
A federal grand jury charged the following defendants in a 22-count indictment that was returned on May 23 and was unsealed today:
- Yang Song, 40, of Corona, the alleged ringleader;
- Junwei Jiang, 37, of East Los Angeles;
- Zhengxuan Hu, 26, of Alhambra;
- Yushan Lin, 30, of Corona; and
- Shuyi Xing, 34, of Corona.
All of the defendants are charged with one count of conspiracy to commit wire fraud and mail fraud, one count of aggravated identity theft, seven counts of wire fraud, 12 counts of mail fraud, and one count of conspiracy to traffic in counterfeit goods.
They were arrested on Thursday and are expected to be arraigned this afternoon in United States District Court in downtown Los Angeles.
“The defendants are accused of taking advantage of Apple’s customer-service policies to steal more than $12 million in merchandise,” said United States Attorney Martin Estrada. “Companies should not be victimized and defrauded for being responsive to customer needs, and these federal charges send a message that our office will take decisive action to uncover and prosecute those who perpetrate fraud.”
“Protecting American ingenuity, ensuring economic security, and shielding the consumers across the nation is a top priority for Homeland Security Investigations,” said HSI Los Angeles Special Agent in Charge Eddy Wang. “Due to the outstanding work of HSI Los Angeles with our law enforcement and private sector partners targeting this large-scale fraud operation, we have prevented millions of dollars from lining the pockets of this transnational criminal organization.”
“The defendants allegedly sought to introduce more than 16,000 fraudulent devices into Apple’s product line with the purpose of exchanging them for genuine devices to be sold for profit,” said Special Agent in Charge Tyler Hatcher, IRS Criminal Investigation, Los Angeles Field Office. “CI follows the money, and our expertise helps us safeguard U.S. businesses when faced with fraud. We are committed to our partnerships with fellow law enforcement agencies like Homeland Security Investigations to protect our country’s commerce ecosystem by investigating those who seek to take advantage of businesses’ consumer protection programs.”
According to the indictment, from at least December 2015 to March 2024, Song and Jiang coordinated with co-conspirators in China to ship counterfeit Apple iPhones, iPads, and other devices to them and other U.S.-based co-conspirators. The counterfeit Apple devices shipped to Song, Jiang, and others in the U.S. were designed to look like genuine Apple devices and included identification numbers matching the numbers on real Apple products that had been sold in North America, were owned by real people, and were under warranty through Apple’s manufacturer warranty and AppleCare+, Apple’s extended warranty program.
The defendants allegedly then fraudulently returned the counterfeit iPhones, iPads, and other devices to Apple as if they were genuine and had been legitimately purchased, were eligible for Apple’s warranty programs, and as if they were the lawful possessor of the Apple devices. The real identification numbers and serial numbers on the counterfeit devices that defendants allegedly retuned were designed to essentially impersonate the real Apple devices owned by real people throughout the United States, which defrauded Apple’s warranty programs and potentially deprived the Apple devices’ lawful owners of the warranty benefits to which they were entitled.
The defendants allegedly knowingly and fraudulently represented that the counterfeit Apple devices they returned were genuine but were broken or non-operational and were covered by the company’s warranty programs. Some of the false reasons given to Apple store employees were because the devices purportedly would not power on, were physically damaged, or had other defects. But the defendants allegedly knew that the Apple devices they were returning were counterfeit and fraudulently used the identification numbers and serial numbers of real people’s Apple devices to victimize both Apple and the device owners.
As part of the scheme, the defendants allegedly visited multiple Apple stores throughout Southern California, including Apple stores in Beverly Hills, Sherman Oaks, Pasadena, Irvine, Northridge, Manhattan Beach, Brea, Rancho Cucamonga, Cerritos and at shopping malls such as The Grove in Los Angeles, South Coast Plaza in Costa Mesa, Fashion Island in Newport Beach, and The Americana at Brand in Glendale. In many cases, they would drive all over Southern California in a single day and visit as many as 10 different Apple stores where they would allegedly return counterfeit devices.
Once at the Apple stores, Apple employees then either replaced or repaired the counterfeit Apple device with a genuine Apple device in the same visit or, on other occasions, took the defendants’ counterfeit devices and ship them to a repair center. Apple then shipped to the defendants a genuine replacement Apple device or a repaired device to either an Apple store, where the defendants returned to pick up the new device or at the dozens of mailboxes that the defendants allegedly rented across Southern California.
As part of the scheme, the defendants allegedly took multiple steps to disguise their identities and hide their fraud over the years. For example, they allegedly rented dozens of mailboxes at UPS stores across Southern California for use in the scheme, including to receive counterfeit devices from China and receive genuine replacement devices from Apple. They allegedly also misspelled the mailing addresses they provided to Apple and added or removed extra characters to the mailing addresses, to disguise the fact that they were processing numerous fraudulent returns of Apple devices. Other times, they allegedly used aliases to make appointments at Apple stores to process their fraudulent returns of devices.
After successfully returning the counterfeit Apple devices for genuine ones, the defendants allegedly shipped the genuine devices to co-conspirators both in the United States and abroad, primarily in China, where the genuine Apple devices were resold at a substantial profit.
In total, the defendants fraudulently returned and attempted to return more than 16,000 counterfeit Apple devices, causing Apple at least $12.3 million in losses.
An indictment is merely an allegation, and the defendant is presumed innocent unless and 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’ imprisonment on each of the conspiracy to commit mail and wire fraud, wire fraud, and mail fraud charges, a statutory mandatory minimum sentence of two years’ imprisonment for the aggravated identity theft charge, and a statutory maximum sentence of 10 years’ imprisonment on the conspiracy to traffic counterfeit goods charge.
Homeland Security Investigations and IRS Criminal Investigation are investigating this matter. The United States Postal Inspection Service and the Los Angeles Police Department provided substantial assistance.
Assistant United States Attorney Andrew M. Roach of the Cyber and Intellectual Property Crimes Section is prosecuting this case.
Art Dealer Found Guilty of Embezzling More Than $260,000 from the Bankruptcy Estate of Miracle Mile and Beverly Hills Art GalleryRead the Press Release
LOS ANGELES – An internationally-known art dealer was found guilty by a jury today of embezzling more than $260,000 from the bankruptcy estate of Ace Gallery Los Angeles, an art gallery located in Beverly Hills and Los Angeles, while acting as the estate’s trustee and custodian.
Douglas J. Chrismas, 80, of the Mid-Wilshire area of Los Angeles, was found guilty of three counts of embezzlement against a bankruptcy estate.
Chrismas was the president and CEO of Art and Architecture Books of the 21st Century, which did business as Ace Gallery and had offices located in the Miracle Mile area of Los Angeles as well as in Beverly Hills.
According to evidence presented at a four-day trial, in February 2013, Ace Gallery filed a Chapter 11 bankruptcy petition in Los Angeles and continued to operate while in bankruptcy with Chrismas acting as its fiduciary and trustee. Chrismas remained in control over Ace Gallery until April 2016, when the bankrutpcy court appointed an independent trustee to run Ace Gallery’s bankruptcy estate and Chrismas was removed.
In late March and early April of 2016, Chrismas embezzled approximately $264,595 that belonged to the Ace Gallery bankruptcy estate, including a $50,000 check that Chrismas signed, was drawn against the estate, and was paid to Ace Museum, a separate non-profit corporation that Chrismas owned and controlled.
Chrismas also embezzled $100,000 owed to Ace Gallery by a third party for the purchase of artwork. Instead, the funds were paid – at his direction – to Ace Museum. Finally, Chrismas embezzled approximately $114,595 owed to the gallery by a third party that purchased artwork, but which Chrismas instead had paid to Ace Museum’s landlord to keep current with its $225,000 monthly rent.
United States District Judge Mark C. Scarsi scheduled a September 9 sentencing hearing, at which time Chrismas will face a statutory maximum sentence of five years in federal prison for each count.
The FBI’s Art Crime Team investigated this matter.
Assistant United States Attorneys Valerie L. Makarewicz of the Major Frauds Section and David W. Williams of the Criminal Appeals Section are prosecuting this case.
Irvine Man Sentenced to 6 Years in Prison for Firebombing Planned Parenthood Clinic and Plotting to Attack Electrical Substation in O.C.Read the Press Release
SANTA ANA, California – An Orange County man was sentenced today to 72 months in federal prison for firebombing a Planned Parenthood clinic in Costa Mesa in March 2022 and planning to attack an electrical substation in Orange.
Tibet Ergul, 22, of Irvine, was sentenced by United States District Judge Cormac J. Carney, who also ordered him to pay $1,000 in restitution.
Ergul pleaded guilty on February 29 to one felony count of conspiracy to damage an energy facility and one misdemeanor count of intentional damage to a reproductive health services facility.
“This defendant’s hatred toward others led him to plotting and carrying out violence,” said United States Attorney Martin Estrada. “We will not allow bigoted intolerance to divide us. My office will continue to aggressively investigate and prosecute crimes motivated by hate in order to keep our community safe.”
“Mr. Ergul chose violence and destruction while targeting a wide array of innocent victims with whom he disagreed ideologically, putting their lives at risk,” said Amir Ehsaei, the Acting Assistant Director in Charge of the FBI's Los Angeles Field Office. “The FBI and our partners on the JTTF will continue to seek out violent extremists before they strike and ask anyone with information about potential attacks to contact us immediately.”
“I'm proud of the successful interagency coordination as seen in this case to prevent further acts of violence by Mr. Ergul,” said Special Agent in Charge Todd Battaglia of the NCIS Marine West Field Office. “NCIS, along with our partners, remain committed to deter domestic terrorism against our fellow Americans.”
In February and March of 2022, Ergul and Chance Brannon, 24, of San Juan Capistrano, agreed to use a Molotov cocktail to damage a Planned Parenthood clinic in Orange County. Ergul and Brannon, who at the time was an active-duty United States Marine, targeted the clinic because it provided reproductive health services and they wanted to encourage others to engage in similar violent acts. Ergul and Brannon also wanted to make a statement about abortion, scare pregnant women away from obtaining abortions, deter doctors, staff, and employees at the clinic from providing abortions, and intimidate the clinic’s patients.
On March 12, 2022, in Ergul’s garage, Ergul and Brannon knowingly assembled a Molotov cocktail. During the early morning hours of March 13, Ergul and Brannon – disguised in dark clothing, masks, hoods, and gloves – drove to a Planned Parenthood clinic in Costa Mesa, ignited the Molotov cocktail and threw it at the clinic’s entrance, intentionally starting a fire. Due to the fire and the resulting damage, the clinic was forced to temporarily close and reschedule approximately 30 patient appointments.
Ergul further admitted in his plea agreement that in June 2022, following the Supreme Court’s decision to overturn Roe v. Wade, he and Brannon planned to use a second Molotov cocktail to attack another Planned Parenthood clinic. Ergul and Brannon abandoned this plan after seeing law enforcement near the targeted clinic.
Ergul also conspired with others, including Brannon, to damage a Southern California Edison electrical substation to debilitate Orange County’s power grid. Ergul and his accomplices planned to attack the substation by using firearms or a Molotov cocktail that Ergul possessed in his garage. Ergul and Brannon consulted with an associate about surveillance, drone operations and firearms. In March 2023, Ergul messaged an associate to say he had found a substation in Orange to target. Ergul sent the associate aerial photographs of the substation and suggested doing a “drive-thru” at 3 a.m. At one point, Ergul also sent Brannon a letter in which he wrote: “The rifle is in a box in my room waiting to be used in the upcoming race war” and discussed a desire to murder politicians and journalists. Ergul and Brannon did not carry out this attack prior to their arrest in this case.
During the early summer of 2023, Ergul and Brannon also discussed and researched how to attack the Dodger Stadium parking lot or the stadium’s electrical room on a night celebrating LGBTQ pride, including by using a device that could be detonated remotely, Ergul admitted in his plea agreement. Brannon and Ergul exchanged sabotage manuals and discussed doing “dry runs” to “case” the stadium. Law enforcement arrested Ergul and Brannon two days before Dodger Stadium’s scheduled “Pride Night.”
Ergul, who has been in federal custody since June 2023, is the third and final defendant to be sentenced in this case.
Last month, Brannon was sentenced to nine years in federal prison for his role in the attack and plots. Brannon pleaded guilty in November 2023 to one count of conspiracy, one count of malicious destruction of property by fire and explosives, one count of possession of an unregistered destructive device, and one count of intentionally damaging a reproductive health services facility in violation of the Freedom of Access to Clinic Entrances Act.
On May 13, Judge Carney sentenced Xavier Batten, 21, of Brooksville, Florida, to 3½ years in federal prison for advising Ergul and Brannon on how to construct the Molotov cocktail used in the Planned Parenthood attack. Batten pleaded guilty on January 19 to one count of possession of an unregistered destructive device and one count of intentional damage to a reproductive health services facility.
The FBI’s Joint Terrorism Task Force and the Naval Criminal Investigative Service investigated this matter. The Costa Mesa Police Department and the Costa Mesa Fire Department provided substantial assistance.
Assistant United States Attorney Kathrynne N. Seiden of the Terrorism and Export Crimes Section is prosecuting this case with substantial assistance from Justice Department Trial Attorney Jacob Warren from the National Security Division’s Counterterrorism Section.
SoCal Man Charged with Hate Crime for Physical Attack on Asian American Woman While Hurling Racial SlursRead the Press Release
LOS ANGELES – A federal grand jury today returned an indictment charging a Southern California man with a hate crime for allegedly punching an Asian American woman in the head in Culver City while he shouted racial slurs at her.
Jesse Allen Lindsey, 37, who is in state prison on an unrelated conviction, but whose last known address was in Fontana, was charged today with one count of committing a hate crime, a felony offense that carries a statutory maximum sentence of 10 years in federal prison.
“Hate-fueled violence has no place in our society,” said United States Attorney Martin Estrada. “We live in one of the most diverse areas of the country, and that diversity brings us strength. Our community will stay united in condemning intolerance, and my office will not hesitate to investigate and prosecute those who harm others on account of bigotry.”
“The victim in this case was simply minding her own business when she was verbally abused and violently attacked based on nothing more than her appearance,” said Krysti Hawkins, the Acting Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The FBI is committed to the protection of civil rights in the United States and will hold accountable anyone so driven by hatred that they would target innocent people based on their race.”
According to the indictment, at approximately 1 a.m. on June 14, 2021, the victim was walking to work in Culver City when Lindsey, a white man, asked the victim for a lighter or cigarette. She responded that she did not smoke. Lindsey allegedly then began following her and yelled at the victim, whom he perceived to be an Asian American man, “You [expletive] Asian guy, turn around.” Lindsey allegedly called the victim “Korean” and shouted, “You [expletive] Asian guy, you don’t belong here,” the indictment states.
The indictment further alleges that, as captured on surveillance video, Lindsey yelled at the victim, “You can’t say hi to a [expletive] white boy?” Lindsey then punched the victim in the head, causing her to fall into the street and hit her head. While the victim was lying face down in the street, Lindsey shouted, “You hear what I said, [N-word]? I said good morning, bitch!”
Emergency personnel later transported the victim to a hospital, where she received approximately 11 stiches in her face. As a result of the attack, the victim sustained injuries to her head and ear, which left her unable to work for one month and caused ongoing pain for one year, the indictment alleges.
When he later learned from news reports that law enforcement was investigating the incident as a hate crime, Lindsey, fearful that hate crimes receive greater punishment, fled California, according to the indictment.
“The community we serve is rich in cultural diversity, and we are committed to maintaining a safe and welcoming environment for all,” said Culver City Police Chief Jason Sims. “Hate has no place in Culver City. I am extremely proud of the work done by the Culver City Police Department to identify and locate the suspect who is responsible for this violent hate crime. In partnership with the FBI, we are not only seeking justice for the innocent victim in this case, but also underscoring that this type of heinous crime will not be tolerated in our neighborhoods.”
An indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Lindsey is currently in state custody and expected to appear in federal court in the coming weeks.
The FBI is investigating this case and received substantial assistance from the Culver City Police Department.
Assistant United States Attorney Lindsey Greer Dotson of the Public Corruption and Civil Rights Section is prosecuting this case.
Florida Pilot Involved in Cocaine Trafficking Schemes is SentencedRead the Press Release
Vanessa Roberts Avery, United States Attorney for the District of Connecticut, announced that RUPERT DE LAS CASAS, 64, of Miami, Florida, was sentenced today by U.S. District Judge Alvin W. Thompson in Hartford to approximately 85 months of imprisonment, time already served, and three years of supervised release for his participation in two separate cocaine trafficking conspiracies.
According to court documents and statements made in court, De Las Casas conspired with others to transport approximately 1700 kilograms of cocaine from South America to the U.S. On August 6, 2016, De Las Casas and Ronier Sanchez Alonso flew a private jet, which was registered in the U.S., from the Dominican Republic to Venezuela where the cocaine was to be loaded onto the jet. De Las Casas was the pilot and Sanchez was the co-pilot. From Venezuela, the jet was to fly to Honduras where the cocaine would be loaded onto trucks for transport through Mexico into the U.S. A fake flight plan filed with Dominican authorities reported that the plane was traveling to Brazil. The plane crash-landed just short of a landing strip in Venezuela. De Las Casas, Sanchez, and another co-conspirator evaded capture by Venezuelan authorities and the cocaine was diverted back to Colombia.
On December 14, 2016, a grand jury in Bridgeport returned an indictment charging De Las Casas, Sanchez, and others with conspiracy to possess with intent to distribute five kilograms or more of cocaine on board an aircraft registered in the U.S. De Las Casas was arrested on April 15, 2017, and pleaded guilty to the charge on October 23, 2019. He has been detained since his arrest.
After his arrest, De Las Casas was charged in the Central District of California for his participation in a separate cocaine trafficking conspiracy. His case was transferred to the District of Connecticut and, on February 27, 2024, he pleaded guilty to conspiracy to distribute cocaine for the purpose of unlawful importation.
Sanchez, a citizen of Mexico, was arrested in Asuncion, Paraguay, on March 25, 2021. He was extradited to the U.S., pleaded guilty, and, on December 20, 2023, was sentenced to 48 months of imprisonment.
Another co-conspirator, Arrinson De La Cruz, who had worked at an airport in the Dominican Republic and helped to coordinate the travel of the jet through the airport uninterrupted, was charged separately for his role in this scheme and other drug trafficking activity. De La Cruz, a citizen of the Dominican Republic who had resided in Wolcott, Connecticut, pleaded guilty and, on November 20, 2019, was sentenced to 144 months of imprisonment.
This investigation was conducted by the Drug Enforcement Administration New Haven Task Force, which includes members from the DEA, U.S. Marshals Service, Internal Revenue Service – Criminal Investigation Division, Connecticut State Police and the New Haven, Waterbury, East Haven, Branford, West Haven, Ansonia, Meriden, Naugatuck, and Shelton Police Departments. The DEA Country Office in Paraguay, Interpol and the Paraguayan National Police assisted the investigation.
U.S. Attorney Avery thanked the U.S. Attorney’s Office for the Central District of California for its assistance in this prosecution.
This case was prosecuted by Assistant U.S. Attorney Rahul Kale through the Organized Crime Drug Enforcement Task Forces (OCDETF) Program. OCDETF identifies, disrupts and dismantles drug traffickers, money launderers, gangs and transnational criminal organizations through a prosecutor-led and intelligence-driven approach that leverages the strengths of federal, state and local law enforcement agencies. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
Patient Coordinator for O.C. Sober Living Home Arrested for Alleged Kickback Payments to ‘Body Brokers’ and Referred PatientsRead the Press Release
SANTA ANA, California – A patient intake coordinator for an addiction treatment facility in Orange County was arrested today on a federal grand jury indictment alleging he conspired to pay $37,000 in illegal kickbacks to so-called “body brokers” in exchange for finding him new patients.
Luis Guerrero, 53, of Santa Ana, was arrested this morning. He is scheduled for arraignment this afternoon in United States District Court in Santa Ana. Guerrero is charged with one count of conspiracy and three counts of offering or paying illegal remunerations for referrals to the clinical treatment facility that employed him.
According to the indictment that a grand jury returned on May 22, Guerrero sought the services of two body brokers in referring patients to his employer’s Orange County-based addiction treatment facility, which treated patient populations that received health care benefits through health insurers.
Guerrero allegedly then negotiated kickback payments to the body brokers on behalf of the facility and arranged for the body brokers to receive thousands of dollars per patient in illegal kickbacks. The indictment alleges that these kickbacks were intended as compensation to the brokers for referring patients and to induce them to continue referring patients so Guerrero could meet a monthly patient intake quota – a condition of his employment with the facility.
Guerrero also assisted the body brokers in paying thousands of dollars directly to the patients, as a further kickback to compensate the patients for allowing the facility to bill their insurance providers for treatment, the indictment alleges. For example, during a call with a body broker over an encrypted messaging service, Guerrero arranged for a patient to receive a $5,000 electronic payment and agreed to assure the patient that “we’ll do something to put money in her hands before she leaves or before she arrives [home],” according to the indictment.
In October 2020, Guerrero allegedly negotiated payment of $37,000 in kickbacks to the body brokers in exchange for their referral of five patients over the previous two months, leading to a $30,000 partial payment to the body brokers later that month.
An indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
If convicted of all charges, Guerrero faces a statutory maximum sentence of 35 years in federal prison.
The FBI is investigating this matter.
Assistant United States Attorneys Benjamin R. Barron and Nandor Kiss of the Santa Ana Branch Office are prosecuting this case.
Orange County Man and Convicted Sex Offender Arrested for Alleged Attempts to Solicit Sexual Activity from Minors on RedditRead the Press Release
SANTA ANA, California – A convicted sex offender faces a mandatory minimum sentence of 25 years in prison after his arrest today on a five-count federal grand jury indictment alleging he attempted use the Reddit internet platform to solicit sex with someone he thought was a 13-year-old girl, but instead was undercover law enforcement.
Shaw Warrington, 34, of San Juan Capistrano, is charged with one count of attempted enticement of a minor to engage in criminal sexual activity, one count of attempted production of child pornography, one count of commission of a felony offense involving a minor while required to register as a sex offender, one count of possession of child pornography, and one count of being a felon in possession of a firearm and ammunition.
Warrington was arraigned today in United States District Court in Santa Ana and pleaded not guilty to the charges against him. A trial date of July 16 has been scheduled in this case. A federal magistrate judge ordered Warrington jailed without bond.
According to the indictment returned on Wednesday and unsealed today, in January and February of 2023, Warrington used the Reddit website to attempt to solicit sex from minors in Orange County. An undercover law enforcement official responded to Warrington’s requests and eventually scheduled a meeting at a Newport Beach shopping center, where Warrington believed he would engage in criminal sexual activity, the indictment alleges. Instead, Warrington was arrested after appearing at the meeting location.
A search of Warrington’s cellphone allegedly returned two images of child sexual abuse material (CSAM).
Law enforcement also seized a firearm and more than 350 rounds of ammunition from Warrington’s residence. Warrington is not permitted to possess them because of his 2013 felony conviction in Orange County Superior Court for meeting a minor with the intent to engage in lewd conduct. As a result of that conviction, Warrington is required to register as a sex offender.
An indictment contains allegations that a defendant committed a crime. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
If convicted, Warrington would face a mandatory minimum sentence of 25 years in federal prison – 15 years for the attempted production of child pornography count and a 10-year mandatory consecutive sentence for commission of a felony involving a minor while required to register as a sex offender. Warrington, if convicted, would face a statutory maximum sentence of life in federal prison.
The FBI and the Newport Beach Police Department are investigating this matter.
Assistant United States Attorney Caitlin J. Campbell of the Santa Ana Branch Office is prosecuting this case.
North Hollywood Man Charged in Federal Complaint Alleging Armed Robbery Spree of a Dozen Southern California BusinessesRead the Press Release
LOS ANGELES – A San Fernando Valley man has been charged in a federal criminal complaint with the attempted armed robbery of a Downey business – an attack in which a store employee pulled out a firearm and opened fire – as part of a series of armed robberies of other businesses in Los Angeles and Orange counties during a two-week crime spree earlier this year, the Justice Department announced today.
Antonio Bland, 34, of North Hollywood, is charged in a criminal complaint with one count of attempted interference with commerce by robbery (Hobbs Act). Bland, who was in state custody until earlier this week, made his initial appearance on Wednesday in United States District Court in downtown Los Angeles and was ordered jailed without bond. His arraignment is scheduled for June 10.
Complaints have also been filed against two other suspected accomplices, who also face attempted Hobbs Act robbery charges:
- Ronnie Tucker, 22, of Long Beach, who is expected to be transferred to federal custody in the coming weeks.
- Abigail Luckey, 49, of North Hollywood, who was the alleged getaway driver in the February 14 robbery of the Downey donut shop. She was ordered released on bond in state court but has since failed to appear in court and is considered a fugitive.
According to an affidavit filed May 13 with the complaints, from January 29 to February 14, Bland and his accomplices are suspects in armed robberies of 11 other businesses: one smoke shop in Tustin, nine 7-Eleven stores in North Hollywood, Burbank, Torrance, Van Nuys, Long Beach, Glendale, Pasadena, and one donut shop in Los Angeles.
“We’ve seen too much violent gun crime in our community and it has to stop,” said United States Attorney Martin Estrada. “Our Operation Safe Cities initiative is intended to do just that. Violent criminals should take heed that federal and local partners are collaborating more than ever to ensure that there are consequences for those who engage in gun crime.”
“Mr. Bland and others went on a mission to violently rob employees of small businesses in and around Los Angeles,” said Krysti Hawkins, the Acting Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The FBI is dedicated to working with our local partners to pursue the most violent criminals wreaking havoc on our communities. Anyone with information as to the whereabouts of fugitive Abigail Luckey is urged to contact the FBI.”
“We appreciate the ongoing partnership with the United States Attorney’s Office, which will go a long way in holding these individuals accountable for their alleged violent actions on our community,” said Burbank Police Chief Michael Albanese.
These commercial robberies typically occurred late at night and usually involved two men who entered each business wearing hooded sweatshirts and face masks. In several of the robberies, a getaway driver waited outside for the subjects to complete the robbery and fled the scene in a white four-door sedan when the subjects returned to the vehicle.
The spree ended after Bland, along with two other individuals, committed an attempted armed robbery of a donut shop in Downey during the early morning hours of February 14, the affidavit states.
Once the subjects entered the donut shop, one yelled, “Open the cash register!” The employee noticed that one of the subjects, believed to be Bland, had what appeared to be a handgun tucked into his front waistband with the handle visible. Fearing that the subjects were going to harm him, the employee ran toward the rear kitchen area from behind the main sales counter. The subjects jumped the counter in pursuit of him. The employee retrieved his own firearm to defend himself. To deter the suspects from attacking him, he fired at least one shot, hitting a wall of the building.
After the employee fired, the subjects ran out of the store.
Law enforcement witnessed the attempted robbery and, shortly afterward, pulled over a car containing Bland and two other individuals, and later retrieved a firearm from the vehicle.
A complaint is merely an allegation, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
If convicted, Bland and the other defendants would face a statutory maximum sentence of 20 years 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 Burbank Police Department are investigating with assistance from the Tustin, Torrance, Long Beach, Glendale, Pasadena, Los Angeles, and Downey police departments.
Assistant United States Attorneys J’me K. Forrest of the Violent and Organized Crime Section and Diane Roldán of the General Crimes Section are prosecuting this case.
Three Highland Park Men Indicted for Allegedly Stealing Checks from Post Offices and Using Instagram to Find Accounts to Deposit ThemRead the Press Release
LOS ANGELES – Three men from the Highland Park area of Los Angeles have been charged in a five-count indictment alleging they schemed to defraud banks by stealing mail from United States Post Office docks and elsewhere in Southern California to fraudulently obtain other people’s checks, used Instagram to find third-parties to deposit the stolen money in their bank accounts, and once led police on a high-speed chase, dumping mail out a car window while on a freeway, the Justice Department announced today.
The indictment returned on May 14 charges the following defendants with one count of conspiracy to commit bank fraud:
- Antonio Hernandez, 20;
- Ivan Murillo-Hernandez, 20; and
- Alexis Garcia Martinez, 28.
Hernandez also is charged with one count of bank fraud, one count of aggravated identity theft, one count of robbery of a post office, and one count of mail theft. Murillo-Hernandez also is charged with one count of mail theft.
Hernandez and Murillo-Hernandez have pleaded not guilty to the charges against them and are scheduled to go to trial on July 8. Martinez is in state custody on unrelated charges and is expected to be transferred over to federal custody in the coming weeks.
The total intended losses to the banks alleged in this scheme is at least $800,000, law enforcement estimates.
According to the indictment, from November 2022 to August 2023, Hernandez, Murillo-Hernandez, and others stole mail from U.S. post office docks and other locations in the mail stream – including by using threats of violence – with the aim of stealing mail containing checks belonging to various victims.
The indictment alleges mail thefts from a Highland Park apartment building as well as from post offices in Studio City, Azusa, Upland, Anaheim, El Segundo, and Beverly Hills. The defendants allegedly attempted to steal mail from a La Mirada post office but were unsuccessful.
Martinez allegedly provided vehicles to Hernandez and others to travel to post offices to commit back dock thefts and advised them on how to commit such crimes without law enforcement detecting them.
Hernandez and Murillo-Hernandez allegedly used social media to solicit bank account holders to provide their debit card and account information by promising them a cut of any fraudulently obtained funds deposited into their accounts. To avoid banks’ fraud protections, the co-conspirators requested bank accounts that had been open for a certain amount of time so they could access the stolen funds more quickly.
For example, in December 2022, Hernandez allegedly posted a story on his Instagram account advertising the sale of stolen checks and seeking third parties with Bank of America accounts older than two years in which to deposit stolen checks.
Hernandez and Murillo-Hernandez then allegedly deposited the stolen funds into the third-party bank accounts by falsely representing that they were the payees on the checks and were entitled to the money. Then, they rapidly depleted the fraudulently deposited funds from the third-party accounts by making cash withdrawals, electronic transfers, or debit card purchases, according to the indictment.
Also, Hernandez and Murillo-Hernandez sold and attempted to sell stolen checks to others who fraudulently cashed them, the indictment states.
The defendants allegedly recruited at least three people under the age of 18 in the scheme.
In April 2023, after stealing mail from an Anaheim post office, Hernandez, Murillo-Hernandez, and three minors led police of a high-speed chase on the 57 and 60 freeways and dumped mail out of a gray Toyota Camry as they fled, according to the indictment. One of the minors involved in the chase who had evaded law enforcement later posted a video on Instagram taken from inside the Camry depicting a pursuing police car as seen in the front passenger side rear view mirror for followers and potential stolen check customers to “like.”
An indictment contains allegations that a defendant committed a crime. 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 30 years in federal prison for the bank fraud conspiracy charge. Hernandez also would face up to 30 years in federal prison for the bank fraud count, up to 10 years in federal prison for the post office robbery count, and a two-year mandatory consecutive prison sentence for the aggravated identity theft count. Hernandez and Murillo-Hernandez would face up to five years in federal prison for the mail theft count.
The United States Postal Inspection Service, with assistance of the Los Angeles Police Department, California Highway Patrol, and the Anaheim Police Department, is investigating this matter.
Assistant United States Attorney Angela C. Makabali of the Cyber and Intellectual Property Crimes Section is prosecuting this case.
Riverside Man Charged in Indictment Alleging Pattern of ‘Swatting’ Calls Threatening Schools and an International AirportRead the Press Release
RIVERSIDE, California – A Riverside County man has been arrested on an 18-count indictment alleging he placed “swatting calls” threatening to commit mass shootings at several schools in the Inland Empire and Sandy Hook, Connecticut, and to bomb Nashville International Airport on behalf of the Islamic State of Iraq and al-Sham (ISIS), the Justice Department announced today.
Eduardo Vicente Pelayo Rodriguez, 31, of Riverside, is charged with one count of stalking, seven counts of transmitting threats in interstate commerce, seven counts engaging in hoaxes, and three counts of transmitting threats or false information regarding fire and explosives.
He was arrested Tuesday and his arraignment is scheduled for this afternoon in United States District Court in Riverside.
“Swatting” refers to falsely reporting in the name of another person that an emergency is in progress or about to occur, with the intent to result in emergency services or law enforcement responding to that other person’s location or investigating them.
According to the indictment that a federal grand jury returned on May 16 and was unsealed today, Rodriguez in January and February of 2023 used a Voice over Internal Protocol (VoIP) service to place more than a dozen calls impersonating the victim. Initially, Rodriguez called a suicide prevention center and a veterans crisis hotline, claimed to be the victim, and said that he was contemplating committing suicide or killing others.
Rodriguez allegedly then called school staff at seven different schools -- in Riverside and San Bernardino counties, as well as Sandy Hook, Connecticut – and threatened to commit either a mass shooting or bombing at the schools. Finally, Rodriguez allegedly called Nashville International Airport in Tennessee, said he had planted a bomb on a plane and in the airport, and said, “this is for ISIS,” and “one hour, boom.”
Law enforcement responded to these phone calls and determined they were fake.
“The sorts of ‘swatting’ crimes alleged against this defendant are highly troubling,” said United States Attorney Martin Estrada. “The indictment alleges that the defendant placed calls to schools, airports, and other locations that were designed to cause maximum fear and trigger an emergency response. ‘Swatting’ is a serious crime that can cause great trauma and risk loss of life, so it is important that we hold wrongdoers accountable.”
“Mr. Rodriguez is alleged to have conducted swatting attacks, to include the callous targeting of an open wound at Sandy Hook, without regard for the potential consequences of this insidious type of hoax,” said Krysti Hawkins, the Acting Assistant Director in Charge of the FBI's Los Angeles Field Office. “Perpetrators of swatting hoaxes should understand that the FBI and our local partners take these threats seriously and that the penalties – if convicted – are considerable.”
An indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
If convicted of the charges, Rodriguez would face a statutory maximum sentence of five years in federal prison on the stalking count, five years on each of the threats counts, five years on each of the hoax counts, and 10 years on each of the counts relating to fire and explosives.
The FBI’s Joint Terrorism Task Force is investigating this matter. The Riverside Police Department, Riverside County Sheriff’s Department, San Bernardino County Sheriff’s Department, Newton (Connecticut) Police Department, and the Nashville Airport Authority provided substantial assistance.
Assistant United States Attorney Jenna W. Long of the Terrorism and Export Crimes Section is prosecuting this case.
Owner of SoCal-Based Ambulatory Transportation Companies Indicted for Alleged Tax Evasion and COVID-19 Relief FraudRead the Press Release
SANTA ANA, California – A federal grand jury today returned a superseding indictment charging an Orange County man with wire fraud and money laundering for allegedly making fraudulent claims to the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program, two federal programs created to provide financial assistance to Americans suffering economic harm because of the COVID-19 pandemic.
According to the superseding indictment, from May 2020 to December 2021, Mehrdad “Mitch” Tabrizi, of Aliso Viejo, submitted two fraudulent PPP applications on behalf of Life Fleet Inc., a Riverside-based business he owned, seeking $695,565 in loans. In the applications, Tabrizi allegedly claimed that Life Fleet had at least 54 employees and monthly payroll obligations of $139,313. After receiving the PPP funds, Tabrizi allegedly used the proceeds for personal expenses. Similarly, Tabrizi allegedly filed a false EIDL application claiming that Life Fleet had gross revenues of more than $4 million and 63 employees. However, Life Fleet allegedly was not in business, had no revenue and had no employees.
Tabrizi also allegedly filed a fraudulent EIDL application in the name of Resonante Group Inc., an Anaheim-based company he controlled. According to the superseding indictment, this EIDL application falsely claimed Resonante Group had gross revenues of more than $19 million and over 300 employees. As a result, the Small Business Administration allegedly disbursed approximately $319,800 into bank accounts controlled by Tabrizi, which he was not entitled to receive and used for personal expenses.
Tabrizi was previously charged with tax evasion and filing false tax returns. According to the superseding indictment, Tabrizi operated SoCal Medical Transportation Inc., a Riverside-based company. In 2015 and 2016, Tabrizi allegedly deposited approximately $2.6 million of income into a bank account but did not disclose these funds to the CPA firm he hired to prepare SoCal Medical’s corporate tax returns. Instead, Tabrizi allegedly informed the CPA firm that these funds had been received by a separate business.
An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
If convicted, he faces a maximum penalty of 20 years in prison for each of four counts of wire fraud, 10 years in prison for each of four counts of money laundering, five years in prison for each of two counts of tax evasion and three years in prison for each of two counts of filing false tax returns. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
IRS Criminal Investigation is investigating the case.
Assistant United States Attorney Brett A. Sagel of the Corporate and Securities Fraud Strike Force and Trial Attorneys Christopher E. Lin and Boris Bourget of the Justice Department’s Tax Division are prosecuting this case.