Central District of California
Press releases recorded for this federal judicial district.
Two Men Charged for Operating $25M Cryptocurrency Ponzi SchemeRead the Press Release
A superseding indictment was unsealed yesterday charging an Australian national and a California man with operating a cryptocurrency Ponzi scheme that defrauded victims of more than $25 million.
According to court documents, David Gilbert Saffron, 51, of Australia, and Vincent Anthony Mazzotta Jr., 52, of Los Angeles, allegedly conspired to operate a fraudulent scheme to induce victims to invest in various trading programs that falsely promised to employ an artificial intelligence automated trading bot to trade victims’ investments in cryptocurrency markets and earn high-yield profits. Saffron and Mazzotta promoted the investment programs under various names including Circle Society, Bitcoin Wealth Management, Omicron Trust, Mind Capital, and Cloud9Capital. Rather than investing victims’ funds in cryptocurrency, Saffron and Mazzotta allegedly misappropriated victims’ funds to pay for personal expenses including private chartered jet flights, luxury hotel accommodations, private mansion rentals, a personal chef, and private security guards.
To execute the scheme, Saffron and Mazzotta allegedly created a fictious entity called the Federal Crypto Reserve. The indictment alleges that, after inducing victims to invest in one of the cryptocurrency investment programs, Saffron and Mazzotta fraudulently solicited victims to pay the Federal Crypto Reserve to investigate and recover the victims’ losses. To conceal his identity, Saffron often allegedly solicited victims under various aliases, including David Gilbert and Dave Gabe, and under various online personas, including the Blue Wizard and Bitcoin Yoda.
Saffron and Mazzotta also allegedly conspired to obstruct official proceedings by concealing assets, concealing or destroying evidence, and falsifying records. The defendants also allegedly conspired to conceal the source and location of victims’ cryptocurrency investments through various means, including using methods known as “blockchain hopping” and through services known as “mixers” or “tumblers” that are designed to prevent cryptocurrency tracing.
Saffron and Mazzotta are charged with conspiracy to commit wire fraud, wire fraud, conspiracy to obstruct justice, conspiracy to commit money laundering, and money laundering. Saffron is also alleged to have committed felonies while on pre-trial release. If convicted, they each face a maximum penalty of 20 years in prison for each count of conspiracy to commit wire fraud and money laundering, 20 years in prison for each wire fraud count, 10 years for each money laundering count, and five years for conspiracy to obstruct justice. Saffron also faces up to 10 years in prison consecutive to any other sentence for committing felonies while on pre-trial release.
Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, U.S. Attorney Martin Estrada for the Central District of California, and Special Agent in Charge Tyler Hatcher of the IRS Criminal Investigation (IRS:CI) Los Angeles Field Office made the announcement.
IRS:CI is investigating the case.
Trial Attorneys Theodore Kneller and Siji Moore of the Criminal Division’s Fraud Section and Assistant U.S. Attorney James Hughes for the Central District of California are prosecuting the case.
The Commodity Futures Trading Commission previously charged Saffron by complaint.
If you believe you are a victim in this case, please contact the Fraud Section’s Victim Witness Unit toll-free at (888) 549-3945 or by email at [email protected]. To learn more about victims’ rights, please visit www.justice.gov/criminal/criminal-vns/victim-rights-derechos-de-las-v-ctimas.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Two Indicted in Scheme that Allegedly Laundered over $2 Million Generated by ‘Grandparent Scams’ Targeting Elderly VictimsRead the Press Release
LOS ANGELES – FBI agents this morning arrested a West Los Angeles man who is one of two defendants charged in a federal grand jury indictment alleging a scheme that laundered at least $2 million in proceeds obtained from victims of grandparent scams who were defrauded with bogus claims that their relatives were in distress and urgently needed funds.
James Wesley Jackson III, aka “Imperial,” 42, pleaded not guilty this afternoon to one count of conspiracy to commit money laundering and one count of conspiracy to commit bank fraud.
The two-count indictment unsealed this afternoon also charges Christopher Fagon (who had several aliases, mostly variations of “Christopher Broker”), 45, who at the time of the alleged scheme lived in the Beverly Grove neighborhood of Los Angeles, and who is now believed to reside in or near Toronto, Canada.
The indictment outlines how perpetrators of grandparent scams convince victims to send money – purportedly to help relatives, often their grandchildren, who are typically described as being in legal trouble – “to bank accounts, business entities, and physical addresses specified by the scammers, using interstate wires and cashier’s checks…, for the supposed purpose of assisting the relatives in distress.” The victims’ money often is initially handled by “money mules,” who allow their addresses or bank accounts to be used or agree to receive or negotiate cashier’s checks.
Fagon allegedly was a manager of money mules, including Jackson, who also recruited his own money mules. The indictment further alleges that Fagon created business entities and opened bank accounts using information stolen from identity theft victims.
Once money was in the accounts associated with the money mules or identity theft victims, Fagon and Jackson allegedly engaged in transactions designed to conceal the true nature of the funds, which had been obtained via wire fraud.
The indictment specifically alleges that the scheme laundered funds obtained from victims of grandparent scams who reside in California and as far away as Pennsylvania.
The bank fraud scheme alleged in the indictment involves fraudulently obtained funds that were held in suspense in an account that had been set up in the name of an identity theft victim. Fagon, Jackson and a co-conspirator allegedly worked together to contact the bank and impersonate the identity theft victim to secure the issuance of a check for nearly $83,000 that was remaining in the account.
At his arraignment this afternoon, Jackson was ordered released on bond, and a trial was scheduled for February 6, 2024.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The charge of conspiracy to commit money laundering carries a statutory maximum penalty of 20 years in federal prison, and the charge of conspiracy to commit bank fraud carries a sentence of up to 30 years.
The FBI is conducting the investigation in this case. The Toronto Police Service in Canada provided assistance in the investigation.
Assistant United States Attorney Monica E. Tait of the Major Frauds Section is prosecuting this case.
This case is the product of an investigation by the Vulnerable Communities Task Force, which is focused on investigating and prosecuting individuals and entities that prey on communities that typically are less likely to report crimes to law enforcement and historically have had less legal recourse to address the offenders targeting them. These groups may include immigrants and migrant workers defrauded in immigration schemes, indigent individuals reliant on public benefits, the elderly, and those who have been reluctant to seek assistance from government authorities.
San Pedro Man Sentenced to Nearly 15 Years in Federal Prison for Committing Armed Robbery Where a Victim Was Shot and WoundedRead the Press Release
SANTA ANA, California – A San Pedro man has been sentenced to 177 months in federal prison for – while on parole from a life sentence in state prison for armed robbery – robbing an armored truck in Harbor City last year in which the truck’s driver was shot and suffered serious injuries, the Justice Department announced today.
Gregory James, 48, was sentenced Monday afternoon by United States District Judge David O. Carter.
James pleaded guilty on June 12 to one count of Hobbs Act robbery and one count of discharge of a firearm in relation to a crime of violence. He has been in federal custody since October 2022.
On October 17, 2022, James and co-defendant Lamond Akins, 31, of Compton, robbed a Loomis armored truck after the truck driver had finished servicing an ATM at a Bank of America branch in Harbor City. James and Akins waited for the driver to finish his ATM work, and then – both brandishing firearms – approached the driver and robbed him.
During the robbery, the victim was shot and wounded. James and Akins stole a bag filled with approximately $145,000 in cash that belonged to the Loomis company – which operates in 40 states and three nations – before driving away from the scene.
The victim truck driver experienced significant bodily injury because of the shooting and required surgery.
Akins also pleaded guilty on June 12 to one count of Hobbs Act robbery and one count of discharge of a firearm in relation to a crime of violence. On October 27, Judge Carter sentenced Akins to 177 months in federal prison.
The Los Angeles County Sheriff’s Department and the FBI investigated this matter. The Gardena Police Department provided substantial assistance.
Assistant United States Attorney Jeremiah M. Levine of the Violent and Organized Crime Section prosecuted this case.
Hollywood Hills Man and Australian Man Face Federal Charges Alleging They Ran $25 Million Cryptocurrency Ponzi SchemeRead the Press Release
FIRST SUPERSEDING INDICTMENTLOS ANGELES – A superseding indictment was unsealed yesterday charging an Australian national and a Hollywood Hills man with operating a cryptocurrency Ponzi scheme that defrauded victims of more than $25 million.
According to court documents, David Gilbert Saffron, 51, of Australia, and Vincent Anthony Mazzotta Jr., 52, of the Hollywood Hills area of Los Angeles, allegedly conspired to operate a fraudulent scheme to induce victims to invest in various trading programs that falsely promised to employ an artificial intelligence automated trading bot to trade victims’ investments in cryptocurrency markets and earn high-yield profits. Saffron and Mazzotta promoted the investment programs under various names including Circle Society, Bitcoin Wealth Management, Omicron Trust, Mind Capital, and Cloud9Capital. Rather than investing victims’ funds in cryptocurrency, Saffron and Mazzotta allegedly misappropriated victims’ funds to pay for personal expenses including private chartered jet flights, luxury hotel accommodations, private mansion rentals, a personal chef, and private security guards.
To execute the scheme, Saffron and Mazzotta allegedly created a fictious entity called the Federal Crypto Reserve. The indictment alleges that, after inducing victims to invest in one of the cryptocurrency investment programs, Saffron and Mazzotta fraudulently solicited victims to pay the Federal Crypto Reserve to investigate and recover the victims’ losses. To conceal his identity, Saffron often allegedly solicited victims under various aliases, including David Gilbert and Dave Gabe, and under various online personas, including the Blue Wizard and Bitcoin Yoda.
Saffron and Mazzotta also allegedly conspired to obstruct official proceedings by concealing assets, concealing or destroying evidence, and falsifying records. The defendants also allegedly conspired to conceal the source and location of victims’ cryptocurrency investments through various means, including using methods known as “blockchain hopping” and through services known as “mixers” or “tumblers” that are designed to prevent cryptocurrency tracing.
Saffron and Mazzotta are charged with conspiracy to commit wire fraud, wire fraud, conspiracy to obstruct justice, conspiracy to commit money laundering, and money laundering. Saffron is also alleged to have committed felonies while on pre-trial release. If convicted, they each face a maximum penalty of 20 years in prison for each count of conspiracy to commit wire fraud and money laundering, 20 years in prison for each wire fraud count, 10 years for each money laundering count, and five years for conspiracy to obstruct justice. Saffron also faces up to 10 years in prison consecutive to any other sentence for committing felonies while on pre-trial release.
United States Attorney Martin Estrada for the Central District of California, Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, and Special Agent in Charge Tyler Hatcher of the IRS Criminal Investigation (IRS:CI) Los Angeles Field Office made the announcement.
IRS Criminal Investigation is investigating the case.
Assistant United States Attorney James Hughes of the Major Frauds Section, and Justice Department Trial Attorneys Theodore Kneller and Siji Moore of the Criminal Division’s Fraud Section and are prosecuting the case.
The Commodity Futures Trading Commission previously charged Saffron by complaint.
If you believe you are a victim in this case, please contact the Fraud Section’s Victim Witness Unit toll-free at (888) 549-3945 or by email at [email protected]. To learn more about victims’ rights, please visit www.justice.gov/criminal/criminal-vns/victim-rights-derechos-de-las-v-ctimas.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Former Hollywood-Based Anti-Poverty Nonprofit CEO Sentenced to Six Months in Federal Prison for Embezzlement and Cheating on TaxesRead the Press Release
LOS ANGELES – The former president and CEO of a Los Angeles-based anti-poverty nonprofit agency was sentenced today to six months in federal prison for embezzling money from the nonprofit for his personal benefit, failing to report these funds on his tax returns, and intentionally misapplying more than $600,000 in grant money to pay for unauthorized expenses.
Howard Dixon Slingerland, 54, of Studio City, was sentenced by United States District Judge Dolly M. Gee, who also ordered him to serve six months of home confinement, pay a fine of $10,000, pay $750,470 in restitution and to perform 200 hours of community service.
Slingerland pleaded guilty on March 8 to one count of conversion and intentional misapplication of funds from an organization receiving federal money and one count of subscribing to a false federal income tax return.
From 1996 until he was fired in September 2019, Slingerland led the Youth Policy Institute Inc. (YPI), a Hollywood-based nonprofit agency that worked to eradicate poverty, eventually becoming president and CEO. YPI operated in some of the highest needs neighborhoods in Los Angeles, running programs aimed at supporting youth education, development, safety, job training, and health and wellness. As the head of YPI, Slingerland had check-signing authority over YPI’s bank accounts and was the personal guarantor of YPI’s credit card.
From January 2015 to February 2019, Slingerland caused at least $71,533 of YPI funds to be spent on unauthorized expenditures, including Slingerland’s personal property tax bill that exceeded $14,000; a Slingerland family dinner at an upscale New York City restaurant costing more than $6,000; private tutoring for a family member costing nearly $11,000; and a home computer and software valued at nearly $2,000.
Slingerland also caused federal grant money YPI had received under the Workforce Innovation and Opportunity Act, administered by the United States Department of Labor, to be used for unauthorized purposes. The grant was awarded to support a YPI education and training program designed to prepare young adults in Los Angeles for jobs in growing industries such as construction, customer service, food preparation and service. Instead, in July 2019, Slingerland caused approximately $401,561 of these funds to be used for the unauthorized payment of YPI payroll. That same month, he caused another approximately $201,466 of the federal grant money to be illegally used to pay off YPI’s credit card bill, including for expenses Slingerland had incurred.
Slingerland underreported on his individual federal income tax returns more than $100,000 in income each year for the tax years 2015 through 2018. Slingerland did not report the money he obtained from YPI through the embezzlement or the value of benefits he received from YPI, including retirement plan contributions and a housing allowance and a vehicle allowance. Slingerland admitted to owing the United States Treasury a total of approximately $147,398 in unpaid taxes – not including penalties and interest – for these years.
“Entrusted with the management of a large non-profit organization on which many community members had come to depend, [Slingerland] ignored the rules and used the organization’s money to pay for his own personal expenses, some of which were extravagant, even profligate,” prosecutors argued in a sentencing memorandum. In November 2019, two months after Slingerland was fired, YPI declared bankruptcy.
IRS Criminal Investigation; the FBI; the United States Department of Labor Office of Inspector General; the United States Department of Education Office of Inspector General; the United States Department of Justice Office of Inspector General; and the Los Angeles Unified School District investigated this matter. The Office of the United States Trustee provided substantial assistance.
Assistant United States Attorney Ranee A. Katzenstein of the Major Frauds Section prosecuted this case.
Convicted Felon Charged with Robbing Armored Vehicle Courier at Gunpoint While on Supervised Release for Bank RobberyRead the Press Release
LOS ANGELES – An Inglewood man, who last year was granted compassionate release after serving 26 years in federal prison for armed robberies of armed couriers, was indicted today for allegedly robbing a Brinks courier at gunpoint in a bank parking lot in Westchester in August.
Markham David Bond, 60, is charged in a three-count federal grand jury indictment with interference with commerce by robbery (Hobbs Act), using a firearm during a crime of violence, and being a felon in possession of a firearm and ammunition.
Bond’s arraignment is scheduled for December 18 in United States District Court in downtown Los Angeles.
According to the indictment returned today and other court documents, on the morning of August 18, 2023, Bond stole approximately $145,000 in cash from a Brinks armored carrier outside a bank branch in the Westchester neighborhood of Los Angeles. The armored vehicle was parked in the bank parking lot as one of its employees got out of the vehicle with a blue duffle bag on a rolling cart and which contained the cash. Bond allegedly approached the driver, pointed a handgun at him and said, “I got you, bro” and “Don’t try nothing.”
Fearing for his life, the Brinks employee dropped the duffle bag. Bond allegedly then ordered the victim to get down on the ground. After the victim complied with this order, Bond grabbed the blue Brinks duffle bag then fled the area, according to court documents.
Police put out a crime alert after obtaining stills of the getaway car from surveillance footage. On August 27, patrol officers located the car – a Chevrolet Tahoe with distinctive rims and damage to a rear window. Police seized from the car, among other items, a blue Brinks duffle bag and a black baseball cap with the same Raiders NFL logo as seen on surveillance footage of the robber.
Bond was arrested on November 22 and police seized at his residence a .40-caliber pistol containing 10 rounds of ammunition, a maroon-colored long-sleeve shirt similar in appearance to one used in the August 18 robbery, and crumpled cash totaling $9,005 that was located inside multiple plastic bags hidden inside of a mini-refrigerator.
Bond has multiple felony convictions dating from 1985 and 1995 for Hobbs Act robbery, armed bank robbery, and use of a firearm in furtherance of a crime of violence, among other crimes. As a convicted felon, Bond is not permitted to possess firearms or ammunition.
In January 1995, Bond was sentenced to 562 months (46 years and 10 months) in prison after being convicted of bank robbery and firearms offenses, but in January 2022 he was granted a compassionate release. He was on supervised release for his 1995 conviction when he allegedly robbed the Brinks employee at gunpoint on August 18.
A federal magistrate judge on November 28 ordered Bond jailed without bond.
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, Bond will face a statutory maximum sentence of life in federal prison.
The Los Angeles Police Department’s Robbery Homicide Division and the FBI investigated this case.
Assistant United States Attorney Haoxiaohan H. Cai of the General Crimes Section is prosecuting this case.
Lead Defendant in Indictment Targeting Vineland Boys Street Gang in San Fernando Valley Sentenced to 16 Years in Federal PrisonRead the Press Release
LOS ANGELES – A Sherman Oaks man who ran the San Fernando Valley-based Vineland Boys street gang was sentenced today to 192 months in federal prison for committing federal racketeering and narcotics crimes.
Mario Alberto Miranda, 32, a.k.a. “Ultimo,” “Last,” and “Shot Caller,” was sentenced by United States District Judge Michael W. Fitzgerald.
Miranda – the lead defendant in a federal grand jury indictment targeting 31 Vineland Boys members and associates – pleaded guilty on June 26 to one count of conspiracy to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act and one count of conspiracy to distribute methamphetamine. He has been in federal custody since February 2019.
From at least September 2008 to November 2019, Miranda conspired with other Vineland Boys members and associates to engage in drug trafficking and to maintain the gang’s territorial control in the San Fernando Valley. Miranda acted as a drug supplier and sold narcotics within the gang’s territory, operated drug and firearms stash locations and extorted drug dealers within areas under the gang’s control.
As the gang’s shot caller, Miranda also ordered Vineland Boys members and associates to attack and assault rival gang members and individuals suspected of cooperating with law enforcement, according to court documents.
Miranda sold methamphetamine to buyers at a Pacoima residence as well as at a North Hollywood clothing store that he ran. Miranda also sold a total of approximately 1.2 kilograms of methamphetamine to one buyer over eight transactions and, in June 2016, ordered a co-conspirator to obtain one pound of methamphetamine for another buyer.
He also maintained and operated illegal marijuana grow houses in Pacoima and Palmdale. At the Pacoima residence, Miranda and an accomplice maintained at least 125 marijuana plants weighing a total of approximately 315 pounds.
In November 2014, Miranda collected up to $300 from a Vineland Boys member as a “tax” on the proceeds of the member’s heroin sales. Miranda also was part of a scheme to collect payments from the gang’s members to be paid to incarcerated Vineland Boys members and leaders.
Miranda also attended and helped organize Vineland Boys gang meetings, including a March 2016 meeting at a Panorama City restaurant and a January 2017 meeting at a residence in Sun Valley, where he gave orders to Vineland Boys gang members to commit acts of violence against rival gang members and individuals suspected of cooperating with police.
Federal prosecutors secured 30 guilty pleas in this case, including 19 convictions that have resulted in prison sentences of at least 10 years. One of them, Vineland Boys gang member Jesus Gonzalez Jr., 30, “Lil Chito,” “Gunner” and “Chuy,” of Sun Valley, is serving a 31-year federal prison sentence for committing multiple felonies, including the attempted murders of three rival gangsters. One defendant died after being indicted.
The FBI, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, IRS Criminal Investigation and the Los Angeles Police Department investigated this matter. 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.
Assistant United States Attorneys Jennifer Chou and Sara Vargas of the Violent and Organized Crime Section prosecuted this case.
Former LASD Deputy Sentenced to Two Years in Federal Prison for Falsely Imprisoning a Victim and Then Trying to Cover up His CrimeRead the Press Release
LOS ANGELES – A former Los Angeles County Sheriff’s Department (LASD) deputy was sentenced today to 24 months in federal prison for depriving a 23-year-old man of his civil rights in the spring of 2020 by falsely imprisoning him and then lying and cover up his illegal actions.
Miguel Angel Vega, 33, of Corona, was sentenced by United States District Judge Percy Anderson, who also fined Vega $5,000.
At today’s hearing, Judge Anderson said Vega’s conduct had “embarrassed” the Sheriff’s Department and “every man and woman that puts on a badge every day and puts their lives at risk” and that today’s sentence sends “a clear message that there are serious consequences for law enforcement officers who abuse their power and violate their sworn oath to uphold the law.”
Vega pleaded guilty on September 6 to one count of deprivation of rights under color of law.
“When law enforcement officers abuse their power, they tear at our social fabric by undermining public trust in the equal application of the law,” said United States Attorney Martin Estrada. “By violating his sacred oath to uphold the law, Vega also betrayed his fellow deputies, the vast majority of whom sacrifice every day to keep our community safe.”
“The defendant swore an oath to protect the public he served, but instead chose to violate the civil rights of an innocent young man,” said Donald Alway, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Today’s sentencing exemplifies the FBI’s commitment to protecting those who are illegally accused under the color of law, while restoring trust in the overwhelming majority of police professionals who devote themselves to serving their communities with integrity.”
“When the Sheriff’s Department became aware of allegations of misconduct against Miguel Vega, criminal and administrative investigations were initiated,” said Los Angeles County Sheriff Robert Luna. “The Department assisted federal agencies during the criminal investigation, contributing to their indictment. The Sheriff’s Department is committed to holding employees accountable for their actions and expects them to exhibit the highest moral and ethical standards when serving our communities.”
On the afternoon of April 13, 2020, Vega and his then-partner, Christopher Blair Hernandez, 38, were in uniform and on patrol in an LASD SUV near Wilson Park in Compton as part of their official duties at LASD.
Vega and Hernandez saw two young Black males outside a skateboard park enclosed by a tall wrought-iron fence within Wilson Park. Vega and Hernandez got out of the vehicle, approached the individuals, and ordered them to lift their shirts to search for firearms, which the individuals did not possess.
At this point, the victim – identified in court documents as “J.A.” – began yelling at Vega and Hernandez to leave the young Black males alone, and Vega began yelling back at the victim, challenging him to a fight. Soon afterward, to teach J.A. a lesson, Vega and Hernandez illegally detained him in their patrol vehicle without telling him that he was under arrest, handcuffing J.A., informing him of his rights, or securing his seatbelt in the LASD SUV. After driving away from the park, Vega continued to taunt and threaten J.A., including threatening to drop him off in gang territory where J.A. would be beaten. J.A. was never given a valid reason for his detention, and in fact there was no legitimate basis for the false imprisonment.
While still unlawfully confined and unsecured in the back of the patrol vehicle, J.A. sustained a cut above his eye during a subsequent police car chase when Vega crashed his LASD SUV into a wall in an alley while chasing a young male on a bicycle whom Vega believed may have possessed a firearm. After the crash, Vega told J.A. to flee despite J.A. suffering a head injury and sustaining a cut above his eye that required stitches. Vega initially lied to a supervising sergeant that no one else had been in the patrol vehicle at the time of the collision. Then, after J.A. was independently re-detained by other deputies responding to the scene, Vega lied and told the sergeant that he and Hernandez originally detained J.A. for being under the influence of a controlled substance.
As further part of the coverup, Vega and Hernandez had another deputy issue J.A. a citation for being under the influence of methamphetamine, even though Vega and Hernandez knew that this accusation was false. Vega and Hernandez later filed false incident reports to cover up their illegal conduct, repeating the same and other lies about the events of the day, including that J.A. appeared to be under the influence of a stimulant and threatened people at the park and that Vega had transferred J.A. to another patrol vehicle after the collision instead of directing J.A. to flee the scene.
Hernandez pleaded guilty on July 24 to one count of conspiracy pursuant to a cooperation plea agreement. His sentencing hearing is scheduled for January 8, 2024, at which time he will face a statutory maximum sentence of five years in federal prison.
The FBI investigated this matter. The LASD’s Internal Criminal Investigations Bureau and Internal Affairs Bureau provided substantial assistance.
Assistant United States Attorneys J. Jamari Buxton and Brian R. Faerstein of the Public Corruption and Civil Rights Section prosecuted this case.
Dana Point Man Sentenced to 18 Months in Federal Prison for Conspiring to Export High-End Computer Servers to IranRead the Press Release
LOS ANGELES – An Orange County man was sentenced today to 18 months in federal prison for conspiring to procure and illegally ship high-end computer servers from the United States to Iran, in violation of the International Emergency Powers Act (IEEPA) and U.S. sanctions against Iran.
Johnny Paul Tourino, 69, of Dana Point, was sentenced by United States District Judge Josephine L. Staton, who also fined him $20,000. Tourino has agreed to forfeit approximately $2 million in seized funds.
On March 3, Tourino pleaded guilty to one count of conspiracy to violate IEEPA, which controls and restricts the export of certain goods from the United States to foreign nations, as well as U.S. sanctions against Iran.
According to court records, Tourino owned and operated Spectra Equipment Inc., a Laguna Niguel-based computer support and services company. Between September 2015 and March 2017, Tourino negotiated the sale of five business-class computer servers valued at $2.1 million and attempted to have them sent to Iran for use by two Iranian financial institutions, Bank Mellat and Bank Keshavarzi.
In February 2017, when the manufacturer of the servers asked Tourino to identify the end-user, he falsely stated that the servers were being sold to a bank in Africa and “NOT going to Iran.” Later that month, Tourino, through his lawyer, falsely represented to the manufacturer that the servers were going to Slovenia.
Roughly one week later, Tourino sent three checks to the manufacturer as partial payment for the servers. After learning that the Department of Treasury had blocked funds from Iran that were to be used to pay for the servers, Tourino deleted his emails and contacted the Department of Treasury and again falsely stated that the servers were not going to Iran and were destined for Slovenia.
According to court documents, in August 2015, Tourino previously brokered the sale of four business-class computer servers that were ultimately sent to Bank Mellat in Iran. Regarding these servers, Judge Staton noted “the government cannot get back the 2015 servers.” These servers offered high-level encryption allowing the users to shield information from law enforcement detection.
“Mr. Tourino knowingly violated U.S. law and sanctions by attempting to sell millions of dollars’ worth of computer equipment to Iran and doing business with sanctioned Iranian banks that have been the lifeblood of Iran’s international acts of terror and nuclear weapons program,” said United States Attorney Martin Estrada. “Today’s sentence exemplifies the unshakeable will of this Office to vigorously investigate and bring to justice persons who would undermine our national security by giving aid and comfort to hostile foreign state actors.”
“Defendant Tourino conspired to illegally export restricted equipment to a foreign adversary and took steps to conceal his activities to avoid law enforcement scrutiny,” said Donald Alway, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Tourino’s activity violated U.S. economic and trade sanctions and, in the process, potentially aided an oppressive terrorist regime and put America’s long-term security interests at risk.”
“We will fully and aggressively enforce restrictions on U.S. exports to parties in Iran,” said Los Angeles Field Office Special Agent in Charge Gregory Dunlap of the U.S. Department of Commerce, Office of Export Enforcement (OEE). “OEE will continue to leverage its unique authorities to pursue violators wherever they are, and will collaborate with our law enforcement partners to achieve this goal.”
“Tourino attempted to profit from a far-reaching, extensive scheme to evade U.S. sanctions on Iran. Tourino repeatedly lied to illegally obtain and supply dual-use items to a foreign nation,” said Special Agent in Charge Tyler Hatcher of the Los Angeles Field Office of IRS Criminal Investigation. “This sentence is the result of a successful joint investigative effort with our law enforcement partners and the U.S. Attorney’s Office for the Central District of California. IRS Criminal Investigation is fully committed to protecting national security by disrupting efforts by our adversaries to violate U.S. export controls.”
The FBI, the Commerce Department’s Office of Export Enforcement, and IRS Criminal Investigation investigated this matter.
Assistant United States Attorneys Mark Takla of the Terrorism and Export Crimes Section and Bradley Marrett of the Santa Ana Branch Office prosecuted this case. The Counterintelligence and Export Control Section of the Justice Department’s National Security Division provided substantial assistance.
Clothing Wholesaler Ordered to Pay Nearly $10.4 Million for Violating U.S. Drug Trafficking Sanctions and for Customs FraudRead the Press Release
LOS ANGELES – A Paramount-based clothing wholesale company was fined $4 million, ordered to pay $6,390,781 in restitution, and placed on probation for five years for undervaluing imported garments in a scheme to avoid paying millions of dollars in customs duties and for doing business with a woman linked to Mexico’s Sinaloa drug cartel.
Ghacham Inc., which does business under the “Platini” brand name, was sentenced by United States District Judge Maame Ewusi-Mensah Frimpong.
In addition to imposing financial penalties, Judge Frimpong required Ghacham Inc. to create and maintain an anti-money laundering compliance and ethics program and submit to review by a third-party monitor review, who will report to the court on an annual basis.
The company pleaded guilty in December 2022 to one count of conspiracy to pass false and fraudulent papers through a customhouse and one count of conspiracy to engage in any transaction or dealing in properties of a specially designated narcotics trafficker under a statute known as the Foreign Narcotics Kingpin Designation Act. This is the first criminal conviction in this district under the Kingpin Act.
Mohamed Daoud Ghacham, 39, of Bell, a Ghacham Inc. executive, pleaded guilty in December 2022 to one count of conspiracy to pass false and fraudulent papers through a customhouse. He is expected to be sentenced in the coming months.
According to court documents, Ghacham Inc. imported clothing from China and submitted fraudulent invoices to U.S. Customs and Border Protection (CBP) that undervalued the shipments, allowing the company to avoid paying the full amounts of tariffs owed on the imports.
At Mohamed Ghacham’s direction, Chinese suppliers would prepare two invoices for the clothing ordered by Ghacham Inc. – a true invoice, which reflected the actual price paid for the goods, and a fraudulent “customs invoice,” which reflected an understated price. Ghacham Inc. submitted the customs invoices to CBP and customs brokers to fraudulently reduce the tariffs owed on the imports, while it maintained the true invoices in its accounting records.
From July 2011 and February 2021, Ghacham Inc. and Mohamed Ghacham undervalued imported garments by more than $32 million and failed to pay approximately $6,390,792 in customs duties.
Ghacham Inc. also illegally conducted business with María Tiburcia Cazarez Pérez in violation of the Kingpin Act, which prohibits people and businesses in the United States from doing business with “Specially Designated Narcotics Traffickers.” Cazarez Pérez was previously listed as a Specially Designated Narcotics Trafficker under the Kingpin Act for her involvement in the financial network of Ismael “El Mayo” Zambada García and Victor Emilio Cazares Salazar, two leaders of the Mexico-based Sinaloa Cartel. Cazares Salazar was sentenced to 15 years in federal prison for drug trafficking activities in federal cases out of San Diego and New York City.
“The company flouted the Kingpin Act, doing business with member of a money laundering network used by… two of the world’s most notorious drug traffickers,” prosecutors argued in a sentencing memorandum. “It cheated taxpayers out of millions, both to save itself money and to secure an unfair edge against its competition in the Southern California garment market. And it did so through a sustained, extensive effort over the course of more than a decade.”
Homeland Security Investigations and CBP investigated this matter. The U.S. Department of Commerce Office of Export Enforcement, the Treasury Department’s Office of Foreign Assets Control, and IRS Criminal Investigation provided significant assistance.
Assistant United States Attorney Alexander B. Schwab of the Corporate and Securities Fraud Strike Force prosecuted this 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 https://www.justice.gov/OCDETF.
South Los Angeles Man Sentenced to Life in Prison for Recruiting Teenage Girls for Commercial Sex Work and Sex Trafficking an AdultRead the Press Release
LOS ANGELES – A South Los Angeles man was sentenced today to life in federal prison for recruiting and enticing teenage girls for whom he acted as a “pimp” and providing them for commercial sex work.
Donavin Dwayne Bradford, 32, was sentenced by United States District Judge John A. Kronstadt, who at today’s hearing described Bradford’s actions as “inexcusable” and “horrific.” Judge Kronstadt also ordered Bradford to pay $67,000 in restitution and an additional $900 in special assessments.
At the conclusion of a five-day trial, a jury on April 17 found Bradford guilty of one count of conspiracy to commit sex trafficking with a minor, three counts of sex trafficking of a minor, three counts of sexual exploitation of a minor for the purpose of producing a sexually explicit visual depiction, one count of possession of child pornography, and one count of sex trafficking through threats of force, fraud, or coercion.
From the summer of 2021 to February 2022, Bradford conspired with Layla Kalani Valdivia, 24, of Ventura, to cause one of the minor victims – a then-15-year-old girl – to be used for commercial sex acts. Bradford recruited the victim to work for him as a commercial sex worker. As the victim’s “pimp,” Bradford expected the girl to earn him $1,000 per night.
Bradford and Valdivia advertised the girl for commercial sex work on various websites, and customers who responded to the ads were directed to various hotels and motels where they engaged in commercial sex acts with the victim. Sometimes the minor victim would be required to perform sex acts with Valdivia and a sex client together. Customers paid Bradford for “dates” with the victim or she would be required to give Bradford or Valdivia her earnings.
Bradford assaulted the minor victim when she tried to stop working for him on two separate occasions. Bradford also filmed himself engaging in sex acts on two separate occasions with her.
From March 2021 to November 2021, Bradford recruited and enticed two other girls – ages 16 and 17 – to engage in commercial sex activity.
From May 2021 to August 2022, Bradford also recruited and sex trafficked an adult victim through threats of force, fraud or coercion, including multiple instances of violence.
Bradford and Valdivia have been in federal custody since August 2022.
“Bradford sex trafficked at least three minor girls and used threats of force and coercion to traffic a young adult – all for his own profit,” prosecutors argued in a sentencing memorandum. “To control his victims, he beat and berated them, pointed a gun in at least one victim’s face, intimidated them by referring to his gang membership, filmed himself having sex with them, took their money, and destroyed their property when they dared to leave him. With at least one victim, he took her earnings from sex customers as well as her financial aid from school.”
Valdivia pleaded guilty in December 2022 to one count of conspiracy to commit sex trafficking of a minor and one count of sex trafficking of a minor and is serving a federal prison sentence.
The FBI Los Angeles Field Office and the FBI Los Angeles Child Exploitation and Human Trafficking Task Force coordinated with multiple law enforcement partners and thanks them for their participation and assistance, including: the Los Angeles Police Department; the Las Vegas Metropolitan Police Department; the Inglewood Police Department; the Pomona Police Department; the Los Angeles County Sheriff’s Department; the Ventura County Sheriff’s Office; the Santa Maria Police Department; the Los Angeles County Department of Children and Family Services; and the National Center for Missing and Exploited Children.
Assistant United States Attorneys Chelsea Norell and Kathy Yu of the Violent and Organized Crime Section prosecuted this case.
“Operation Cross Country,” an FBI-led nationwide effort which ran in August 2022, focused on identifying and locating victims of sex trafficking and investigating and arresting individuals and criminal enterprises involved in both child sex trafficking and human trafficking.
Sixty Foreign Nationals Charged with International Drug TraffickingRead the Press Release
Eight indictments were unsealed in the District of Columbia, Southern District of California, Central District of California, and Northern District of Illinois charging 60 Mexican and foreign nationals with international heroin, methamphetamine, cocaine, fentanyl, and marijuana trafficking.
The unsealing of the indictments comes at the same time that the Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced sanctions against 12 of the defendants linked to the Beltran Leyva Organization (BLO).
“The eight indictments unsealed today charging 60 defendants are the latest installments in the Justice Department’s relentless pursuit of drug trafficking organizations that smuggle illicit narcotics into the United States,” said Deputy Attorney General Lisa O. Monaco. “Together with our partners — across the U.S. government and around the world — we will use every tool at our disposal and target every link in the supply chain to dismantle the organizations that flood our communities with deadly narcotics.”
“The indictments unsealed today, charging 60 defendants that threatened our communities, are indicative of the FBI’s everlasting commitment to serving justice and dismantling criminal activities and networks,” said FBI Deputy Director Paul Abbate. “We work alongside our federal, state, and local partners to work hand in hand to disrupt and ultimately triumph over the shadow of drug trafficking, ensuring a safer and more secure future for all.”
One defendant, Oscar Manuel Gastelum Iribe, aka Salgado and Musico, 49, is indicted in the District of Columbia, Southern District of California, and Northern District of Illinois. As alleged in court documents, Gastelum Iribe coordinated deliveries of multi-kilogram quantities of cocaine and heroin into the United States and deliveries of millions of dollars of cash narcotics proceeds from customers in the United States for the BLO.
District of Columbia
Three indictments were unsealed in the District of Columbia charging five Mexican nationals with international drug trafficking.
As alleged in the indictments, Jose Gil Caro Quintero, aka Pelo Chino and El Chino, 55, conspired to import large quantities of cocaine from Mexico into the United States from 1994 to January 2022. Francisco Abraham Flores Ortiz, aka Panchito, 46, and two now-deceased co-conspirators, allegedly conspired to import large quantities of heroin, methamphetamine, cocaine, and marijuana from Mexico into the United States for distribution from January 2008 to January 2018. Gastelum Iribe allegedly conspired to import large quantities of methamphetamine and cocaine from Mexico into the United States for distribution from January 2009 to December 2015.
Caro Quintero, Flores Ortiz, and Gastelum Iribe are all charged with conspiracy to distribute controlled substances for unlawful importation into the United States. Gastelum Iribe is also charged with possession of a firearm in furtherance of a drug trafficking offense. If convicted, Caro Quintero and Flores Ortiz face a mandatory minimum of 10 years in prison and a maximum penalty of life in prison. Gastelum Iribe faces a mandatory minimum of 15 years in prison and a maximum penalty of life in prison.
The FBI Washington Field Office is investigating the case, with assistance from the Homeland Security Investigations (HSI) San Diego Field Office for the investigation of Caro Quintero.
Trial Attorneys Kate Naseef and Samantha Thompson of the Criminal Division’s Narcotic and Dangerous Drug Section are prosecuting the cases, with assistance from Assistant U.S. Attorney Kyle Martin for the Southern District of California for the prosecution of Caro Quintero.
Southern District of California
Three indictments were unsealed in the Southern District of California charging 29 individuals with international drug trafficking offenses.
“These indictments have neutralized dozens of alleged maritime traffickers and prevented addictive, harmful, and increasingly often deadly drugs from reaching American shores and streets,” said U.S. Attorney Tara McGrath for the Southern District of California. “Cases like this are critical for disrupting, disabling, and dismantling the sinister and deadly operations of foreign drug trafficking organizations in the United States.”
The first indictment returned in September 2019 charges Gastelum Iribe, Servando Lopez Lopez, 49, and another individual with allegedly conspiring to distribute cocaine knowing it would be imported into the United States and a maritime drug conspiracy. If convicted, they each face a mandatory minimum of 10 years in prison and a maximum penalty of life in prison.
The second indictment returned in April also charges Juan Pablo Bastidas Erenas, 43, Bogar Soto Rodriguez, aka Ricardo Colmenarez, 49, Juvenal Leon Rodriguez, 47, Mario German Beltran Araujo, 31, Ulises Franco Figueroa, 36, Oscar Aleman Meza, 61, and 17 others with conspiring to distribute cocaine knowing it would be imported into the United States and a maritime drug conspiracy. If convicted, they each face a mandatory minimum of 10 years in prison and a maximum penalty of life in prison.
“The defendants charged in these cases threatened the safety and health of the American people by trafficking fentanyl, methamphetamine, and other deadly drugs into the United States and by using violence to further their criminal acts,” said DEA Administrator Anne Milgram. “DEA remains committed to our important work with our law enforcement partners to protect our communities and bring to justice criminal organizations like the Beltran Leyva Organization and others.”
The third indictment returned in April charges Josue De Jesus Estrada Gutierrez and two others with conspiring to import cocaine, methamphetamine, and fentanyl. If convicted, they each face a mandatory minimum of 10 years in prison and maximum penalty of life in prison.
Homeland Security Investigations (HSI), the FBI, Drug Enforcement Administration (DEA), and Coast Guard Investigative Service is investigating the case.
Assistant U.S. Attorney Joshua C. Mellor and Special Assistant U.S. Attorney Allison B. Murray for the Southern District of California are prosecuting the cases.
Central District of California
An indictment was unsealed in the Central District of California charging Amberto Beltran, aka Amembertito, 34, for allegedly conspiring with 26 co-conspirators to distribute and possess with intent to distribute at least 500 grams of methamphetamine, at least five kilograms of cocaine, and at least one kilogram of heroin.
“International drug traffickers profit off the suffering of others and, in the process, devastate families and undermine communities,” said U.S. Attorney Martin Estrada for the Central District of California. “Our office is committed to bringing to justice those who cause so much pain to our people.”
Beltran is charged with one count of conspiracy to distribute and possess with intent to distribute methamphetamine, heroin, and cocaine, and one count of possession with intent to distribute cocaine. If convicted, he faces a mandatory minimum of 10 years in prison on each count and a maximum penalty of life in prison.
The DEA investigated the case.
Assistant U.S. Attorneys Christopher C. Kendall and Skyler F. Cho for the Central District of California are prosecuting this case.
Northern District of Illinois
An indictment unsealed in the Northern District of Illinois charges Gastelum Iribe for allegedly conspiring with others to traffic distribution quantities of cocaine and heroin into Chicago in 2007 and 2008. As part of the conspiracy, Gastelum Iribe allegedly acted as a logistical coordinator for Arturo Beltran Leyva’s drug trafficking organization, coordinating deliveries of multi-kilogram quantities of cocaine and heroin into the United States from Mexico.
“The charges announced today make clear that the Department of Justice remains focused on dismantling transnational criminal organizations,” said Acting U.S. Attorney Morris Pasqual for the Northern District of Illinois. “We will continue to investigate and hold accountable members of drug cartels who seek to traffic narcotics in our communities.”
“This joint effort is emblematic of the federal government’s commitment to combatting the scourge of illegal narcotics in our communities,” said Special Agent in Charge Justin Campbell of the IRS Criminal Investigation (IRS:CI) Chicago Field Office. “We understand that combatting drug trafficking requires a multifaceted approach and IRS:CI is proud to stand shoulder-to-shoulder with our law enforcement partners in this endeavor.”
If convicted, Gastelum Iribe faces a mandatory minimum of 10 years in prison and a maximum penalty of life in prison. The indictment also seeks $885 million in forfeiture from Gastelum Iribe.
The DEA Chicago Field Division, IRS:CI Chicago Field Office, and Chicago Police Department are investigating the case.
Assistant U.S. Attorneys Erika Csicsila and Andrew Erskine for the Northern District of Illinois are prosecuting the case.
The cases in the District of Columbia, Southern District of California, Central District of California, and Northern District of Illinois are supported by the Organized Crime Drug Enforcement Task Forces (OCDETF). The Justice Department’s Office of International Affairs also provided significant assistance.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Redondo Beach Woman Sentenced to 15 Years in Prison for Leading $24 Million Scam that Billed Medicare for Unneeded Wheelchair FixesRead the Press Release
LOS ANGELES – A South Bay woman has been sentenced to 180 months in federal prison for billing Medicare more than $24 million by submitting fraudulent claims for medically unnecessary durable medical equipment – mostly power wheelchairs (PWC) – and PWC repairs, many of which were never performed, the Justice Department announced today.
Tamara Yvonne Motley, 55, a.k.a. “Tamara Ogembe,” of Redondo Beach, was sentenced Tuesday by United States District Judge Stanley Blumenfeld Jr., who also ordered her to pay $13,107,422 in restitution as well as an additional $2,300 in special assessments.
At the conclusion of a five-day trial, a jury on June 27 found Motley guilty of 20 counts of health care fraud, two counts of aggravated identity theft, and one count of conspiracy to commit money laundering. Judge Blumenfeld ordered her remanded into federal custody that same day after the verdict was read.
From July 2006 to August 2014, Motley was the de facto owner of the Hawthorne-based Action Medical Equipment and Supplies. From January 2013 to November 2016, Motley was the de facto owner of the Ventura-based Kaja Medical Equipment & Supply. Both companies were enrolled with Medicare in the names of Motley’s out-of-state relatives.
Motley orchestrated a scheme in which she paid marketers for patient referrals and then directed them to take patients to corrupt physicians, who prescribed medically unnecessary durable medical equipment, such as PWCs, that Motley’s companies used to submit fraudulent bills to Medicare.
In January 2011, when Medicare changed the reimbursement rules for PWCs to make the upfront payments less lucrative to suppliers, Action switched to billing Medicare for PWC repairs, and continued that scheme at Kaja once Action was shut down. These repairs were not medically necessary not only because the patients did not need the PWCs to begin with, but also because those repairs were not needed to make the PWCs serviceable in any event and often were never performed. These repairs were expensive – often billed for $3,000 to $4,000 each – and accounted for nearly half of Action’s billings and almost all of Kaja’s.
Over an eight-year period, Action billed Medicare more than $18.2 million for DME – most for PWCs, but also for PWC accessories, knee braces and back braces – and the repair or replacement of PWCs. Medicare paid Action nearly $10.3 million.
Between July 2013 and November 2016, Kaja billed Medicare $6.3 million, primarily for PWC repairs. Medicare paid Kaja approximately $2.8 million for those claims.
“[Motley] manipulated those around her to serve her criminal ends,” prosecutors argued in a sentencing memorandum. “She used relatives and employees to conceal her role in the scheme, and even used her infant’s caretaker to carry out the illegal activities of her scheme. She took advantage of vulnerable Medicare beneficiaries in far-flung places like Calexico who were elderly and often non-English speaking. She deceived inspectors to preserve her companies’ accreditation with Medicare.”
Two other defendants were convicted in this case:
- Cynthia Karina Marquez, 48, of Paramount, who worked as an office manager at both Action and Kaja, pleaded guilty in December 2019 to two counts of making false statements affecting a health care program. She received a time-served sentence, was placed on supervised release for three years, and was ordered to pay $9,886,646 in restitution.
- Juan Roberto Murillo, 47, of Montebello, who worked at both medical supply companies as a repair technician, pleaded guilty in November 2019 to one count of conspiracy to commit money laundering. He was sentenced to three years’ probation and was ordered to pay $2,504,119 in restitution.
The United States Department of Health and Human Services, Office of Inspector General; the FBI; and the California Department of Justice investigated this matter.
Assistant United States Attorneys Kristen A. Williams of the Major Frauds Section and David H. Chao of the General Crimes Section prosecuted this case.
Riverside County Woman Sentenced to Nearly 3½ Years in Federal Prison for $2.8 Million Unemployment Insurance ScamRead the Press Release
SANTA ANA, California – A Riverside County woman who participated in a scheme that used stolen identities to fraudulently apply for just over $2.8 million in unemployment insurance (UI) benefits from the California Employment Development Department (EDD) has been sentenced to 41 months in federal prison, the Justice Department announced today.
Sasha Lizette Jimenez, 26, formerly of Placentia and now residing in Riverside County, was sentenced Monday afternoon by United States District Judge Cormac J. Carney. In addition to the prison term, Judge Carney ordered Jimenez to pay $2,304,203 in restitution to the EDD.
Jimenez pleaded guilty on May 22 to one count of conspiracy to commit bank fraud and admitted that she fraudulently obtained UI benefits from the EDD, including Pandemic Unemployment Assistance benefits intended for individuals who were unemployed because of the COVID-19 pandemic.
As part of the scheme that started at the beginning of the pandemic and ran for about two years, Jimenez and her co-conspirators obtained stolen personal identifying information (PII) – sometimes from the darkweb – and used those stolen identities to apply for UI benefits. The PII was stolen from victims who did not live in California, were deceased or were otherwise not eligible for UI benefits, including pandemic benefits. In total, the fraud scheme caused the issuance of at least $2,804,508 in fraudulent unemployment benefits – which were disbursed via EDD debit accounts – and at least $2,304,203 was withdrawn from those accounts.
“[B]ank records show that in 2020, an EDD card in the name of victim S.S. was used to purchase luxury jewelry from Peter Marco, a Beverly Hills jewelry business frequented by [Jimenez],” prosecutors noted in a sentencing memorandum.
In her plea agreement, Jimenez also admitted participating in a separate check fraud scheme orchestrated by her boyfriend, Meshach Samuels, 26, of Placentia. Samuels, who also participated in the EDD fraud scheme, was sentenced in October to 90 months in federal prison.
The investigation in this matter was conducted by the Los Angeles El Camino Real Financial Crimes Task Force, a multi-agency task force led by Homeland Security Investigations that includes federal and state investigators who are focused on financial crimes in Southern California. The Treasury Inspector General for Tax Administration also participated in this investigation. The Costa Mesa Police Department, the Inglewood Police Department, the Placentia Police Department, the New York City Police Department, and the Miami Beach Police Department provided assistance.
Assistant United States Attorney Rachel N. Agress of the International Narcotics, Money Laundering, and Racketeering Section prosecuted this case.
Anyone with information about allegations of fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at (866) 720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Santa Barbara County Man Sentenced to 6 Months in Prison for Obstructing Federal Probe into Plane Crash He Posted on YouTubeRead the Press Release
LOS ANGELES – A YouTuber pilot was sentenced today to six months in federal prison for obstructing a federal investigation by deliberately destroying the wreckage of an airplane that he intentionally crashed in Santa Barbara County to gain online views.
Trevor Daniel Jacob, 30, of Lompoc, was sentenced by United States District Judge John F. Walter.
Jacob pleaded guilty on June 30 to one count of destruction and concealment with the intent to obstruct a federal investigation.
Jacob is an experienced pilot, skydiver and former Olympic athlete who had secured a sponsorship from a company that sold various products, including a wallet. Pursuant to the sponsorship deal, Jacob agreed to promote the company’s wallet in a YouTube video that he would post.
On November 24, 2021, Jacob took off in his airplane from Lompoc City Airport on a solo flight purportedly destined for Mammoth Lakes. Jacob did not intend to reach his destination, but instead planned to eject from his aircraft during the flight and video himself parachuting to the ground and his airplane as it descended and crashed.
Prior to taking off, Jacob mounted several video cameras on different parts of the airplane and equipped himself with a parachute, video camera and selfie stick. Approximately 35 minutes after taking off, while flying above the Los Padres National Forest near Santa Maria, Jacob ejected from the airplane and videoed himself parachuting to the ground.
Using the video camera mounted on the selfie stick and the video cameras he mounted on the airplane, Jacob was able to record the airplane as it descended and crashed into a dry brush area in Los Padres National Forest. After parachuting to the ground, Jacob hiked to the location of the wreck and recovered the data containing the video recording of his flight and the crash of the airplane.
On November 26, 2021, Jacob informed the National Transportation Safety Board (NTSB) about the plane crash. The NTSB, which launched an investigation into the crash on or about that same day, told Jacob that he was responsible for preserving the wreckage so the agency could examine it. Jacob agreed to determine the crash location and provide both the coordinates of the downed plane and videos of the crash to NTSB investigators. Three days later, the Federal Aviation Administration (FAA) launched its own investigation into the plane crash.
In the weeks following the plane crash, Jacob lied to investigators that he did not know the wreckage’s location. In fact, on December 10, 2021, Jacob and a friend flew by helicopter to the wreckage site. There, Jacob used straps to secure the wreckage, which the helicopter lifted and carried to Rancho Sisquoc in Santa Barbara County, where it was loaded onto a trailer attached to Jacob’s pickup truck.
Jacob drove the wreckage to Lompoc City Airport and unloaded it in a hangar. He then cut up and destroyed the airplane wreckage and, over the course of a few days, deposited the detached parts of the wrecked airplane into trash bins at the airport and elsewhere, which was done with the intent to obstruct federal authorities from investigating the November 24 plane crash.
On December 23, 2021, Jacob uploaded a YouTube video titled, “I Crashed My Airplane,” that contained a promotion of the wallet and depicted him parachuting from the plane and the aircraft’s subsequent crash. Jacob intended to make money through the video.
Jacob lied to federal investigators when he submitted an aircraft accident incident report that falsely indicated that the aircraft experienced a full loss of power approximately 35 minutes after takeoff. Jacob also lied to an FAA aviation safety inspector when he said the airplane’s engine had quit and, because he could not identify any safe landing options, he had parachuted out of the plane.
“It appears that [Jacob] exercised exceptionally poor judgment in committing this offense,” prosecutors argued in a sentencing memorandum. “[Jacob] most likely committed this offense to generate social media and news coverage for himself and to obtain financial gain. Nevertheless, this type of ‘daredevil’ conduct cannot be tolerated.”
The United States Department of Transportation – Office of Inspector General investigated this matter. The NTSB and FAA provided substantial assistance.
Assistant United States Attorneys Dominique Caamano and Dennis Mitchell of the Environmental Crimes and Consumer Protection Section prosecuted this case.
Rolling Hills Man Sentenced to 20 Years in Prison for Distributing Fentanyl-Laced Pills that Caused High School Freshman’s DeathRead the Press Release
LOS ANGELES – A South Bay man, who in May 2020 distributed fentanyl-laced pills to a 15-year-old boy and mocked the victim online as he was dying of an overdose, was sentenced today to 240 months in federal prison.
Alexander Declan Bell Wilson, 23, of Rolling Hills, was sentenced by United States District Judge Fernando L. Aenlle-Rocha, who also ordered Wilson to pay $2,364 in restitution. Judge Aenlle-Rocha also ordered Wilson, upon his release from prison, to be placed on supervised release for 12 years.
At the conclusion of a five-day trial, a jury on May 19 found Wilson guilty of one count of distribution of fentanyl resulting in death. Wilson has been in federal custody since May 2021.
On the evening on May 14, 2020, Wilson agreed to distribute five Percocet pills to the victim. Evidence seized from the victim’s cellphone shows he believed the pills were authentic pharmaceutical pills that contained the opioid oxycodone.
At around 11:30 p.m. that night, the victim’s 13-year-old brother met Wilson outside the family’s house to pick up the five pills. Wilson then handed a plastic bag containing the pills to the victim’s brother through the window of Wilson’s vehicle. The victim’s brother took the bag from Wilson, went back inside the house, and gave the pills to the victim. Shortly afterward, the victim posted a photograph of the pills on his Snapchat social media account and then ingested the pills.
From approximately 1:50 a.m. to 5:30 a.m. on May 15, 2020, Wilson and the victim argued on Snapchat about the proper way to consume the pills Wilson had sold to the victim. During those chats, Wilson chastised the victim for chewing the pills, and then shared screenshots of their conversation with his Snapchat followers.
On the morning of May 15, 2020, the victim’s grandmother found him dead in his bedroom. Expert testimony at trial confirmed the victim’s death was caused solely due to fentanyl poisoning.
“After [the victim’s] death, [Wilson] showed no remorse for his crimes,” prosecutors argued in a sentencing memorandum. “To the contrary, he lied to police about his conduct, deleted incriminating evidence from his phone, and minimized his role in the offense. Indeed, [Wilson] blamed [the victim] for his own death, boasting that [the victim] ‘did that to himself.’”
The Drug Enforcement Administration’s Overdose Justice Task Force and the Los Angeles County Sheriff’s Department investigated this matter.
The Overdose Justice Task Force is a project designed to investigate fatal fentanyl poisonings and identify the individuals who provided the fentanyl that directly caused the deaths. Under the Overdose Justice program for the DEA’s Los Angeles Field Division, DEA agents have established collaborative relationships with local law enforcement agencies across the seven counties that make up the Central District of California. Local authorities are almost always the first to respond to an overdose death, and DEA agents have provided training to dozens of local agencies to help them analyze evidence to determine if there are circumstances that might lead to a federal criminal prosecution.
Assistant United States Attorneys Ian V. Yanniello and Daniel H. Weiner of the General Crimes Section prosecuted this case.
Former Pediatrician Sentenced to 7½ Years in Federal Prison for Possessing Scores of Images of Child Sexual Abuse MaterialRead the Press Release
LOS ANGELES – A former pediatrician was sentenced today to 90 months in federal prison for possessing child sexual abuse material (CSAM) on dozens of DVDs as well as possessing hundreds of such images on his personal computing devices.
Gary David Goulin, 62, of the Beverly Grove neighborhood of Los Angeles, was sentenced by United States District Judge Maame Ewusi-Mensah Frimpong, who also ordered him to pay a $50,000 fine and an additional $22,100 in special assessments. He is required to register as a sex offender and will be placed on supervised release for a period of 15 years once he is released from prison.
Goulin pleaded guilty to one count of possession of child pornography.
In November 2021, Goulin knowingly possessed four DVDs that contained sexually explicit material involving minors who were under the age of 12 years old. Goulin further admitted in his plea agreement to knowingly possessing an additional 57 DVDs that contained CSAM. The average run time on these DVDs was three hours and 21 minutes.
In August 2021, Goulin used his cellphone to knowingly receive a video of CSAM. In total, Goulin possessed more than 600 images that he knew constituted child pornography, some of which showed children engaging in sadistic or masochistic conduct.
“[Goulin] received and possessed a large collection of child pornography materials – over 204 hours of videos and images,” prosecutors argued in a sentencing memorandum. “At the same time that he possessed these materials, he was entrusted with caring for children as a pediatrician at a hospital.”
Goulin was charged in Los Angeles Superior Court with possession of child pornography and sexual exploitation of a child. That case was dismissed considering the federal charges against Goulin, which a grand jury brought via indictment in October 2022.
In November 2021, the Medical Board of California prohibited Goulin from practicing medicine.
The FBI and the Los Angeles Police Department investigated this matter.
Assistant United States Attorney Sarah S. Lee of the General Crimes prosecuted this case.
Former U.S. Marine Pleads Guilty to Firebombing a Planned Parenthood Clinic in Orange County and Admits to Planning Additional AttacksRead the Press Release
SANTA ANA, California – An Orange County man pleaded guilty today to federal criminal charges for firebombing a Planned Parenthood clinic in March 2022 and admitted to plotting other attacks.
Chance Brannon, 24, of San Juan Capistrano, who was an active-duty Marine stationed at Camp Pendleton at the time of the offense, also admitted to making plans for additional attacks on a second Planned Parenthood clinic, a Southern California Edison substation, and an LGBTQ pride night celebration at Dodger Stadium.
Brannon pleaded guilty to all counts of the four-count indictment: conspiracy, malicious destruction of property by fire and explosives, possession of an unregistered destructive device, and intentional damage to a reproductive health services facility – a violation of the Freedom of Access to Clinic Entrances Act.
Brannon has been in custody since his arrest in June 2023.
“This defendant exemplifies the insidious danger posed by domestic extremism,” said United States Attorney Martin Estrada. “The defendant, who was a member of the U.S. military, admitted not only to attacking a Planned Parenthood facility but also to planning for attacks on the power grid and a pride celebration at Dodger Stadium. We must never waver in our commitment to protect the American people from violent extremist ideology.”
“Extremist violence fueled by an insular hatred intended to intimidate law abiding Americans will not be tolerated,” said FBI Los Angeles Assistant Director in Charge Don Alway. “It is crucial that individuals who seek reproductive health services be able to obtain them in an environment that is free from interference, intimidation, and fear. Together with our federal, state, and local law enforcement partners, the FBI is committed to defending the American people against such acts of cruelty.”
“NCIS is a proud member of the FBI Joint Terrorism Task Force and we are committed to swiftly and thoroughly investigating those who perpetrate acts of terror against our fellow Americans,” said Special Agent in Charge Todd Battaglia of the NCIS Marine West Field Office. “This case represents the impact of close interagency coordination and should serve as a warning that we will seek out and defeat extremist intimidation and hate that threatens access to reproductive health services.”
According to his plea agreement, in February and March of 2022, Brannon and his co-defendants – Tibet Ergul, 22, of Irvine, and Xavier Batten, 21, of Brooksville, Florida – conspired to use a Molotov cocktail to destroy a commercial property. Brannon considered various targets, including the Anti-Defamation League in San Diego, but ultimately chose to target a Planned Parenthood clinic in Costa Mesa to scare pregnant women, deter doctors and staff from providing abortion services, and encourage similar violent acts. During the early morning hours of March 13, 2022, Brannon and Ergul ignited and threw the Molotov cocktail at the clinic, striking the clinic entrance.
Brannon admitted in his plea agreement that, in May 2022, he counseled Batten on how to “get away with” committing a similar attack to the Costa Mesa one. In June 2022, following the Supreme Court’s decision overturning Roe v. Wade, its 1973 ruling that recognized a constitutional right to abortion, Brannon and Ergul planned to use a second Molotov cocktail to damage or destroy a second Planned Parenthood clinic.
Brannon further admitted that beginning sometime in 2022 and continuing through the time of their arrests, Ergul and he discussed starting a race war by attacking an electrical substation with the goal of disrupting the functioning of the power grid in Orange County. On a thumb drive disguised as a military-style necklace bearing the motto for the Marine Corps, Brannon kept a file containing an operation plan and a gear list for targeting a Southern California Edison substation. Brannon possessed several items on the gear list, including a specific rifle with “Total [N-word] Death” written in Cyrillic and a recording of the 2019 Christchurch, New Zealand, mosque shooting, in which a white supremacist murdered 51 people and injured 40 others.
Throughout the early summer of 2023, Brannon and Ergul also discussed and researched how to attack Dodger Stadium on a night celebrating LGBTQ pride, including by using a remote-detonated device. As part of those conversations, Brannon shared a “WW2 sabotage manual” with Ergul, discussed doing “dry runs” to “case” the stadium, and conducted research on Ted Kaczynski, also known as the Unabomber. Brannon and Ergul were arrested two days before the event.
At the time of his arrest, Brannon possessed a short-barreled rifle and two silencers, which he had not registered with the National Firearms Registration and Transfer Record.
United States District Judge Cormac J. Carney scheduled an April 15, 2024 sentencing hearing, at which time Brannon will face a mandatory minimum sentence of five years in federal prison for each of the conspiracy and malicious destruction counts as well as a statutory maximum sentence of 20 years in federal prison for each of those counts. The count of possession of an unregistered destructive device is punishable by up to 10 years in federal prison. The intentional damage to a reproductive health facility charge carries a statutory maximum sentence of one year in federal prison.
Ergul and Batten have pleaded not guilty to the charges against them. They are scheduled to go to trial on March 19, 2024.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The FBI and the Naval Criminal Investigative Service investigated this matter, with substantial assistance from the Costa Mesa Police Department and the Costa Mesa Fire Department.
Assistant United States Attorney Kathrynne N. Seiden of the Terrorism and Export Crimes Section is prosecuting this case.
Former Southern California Business Owner Charged with Access Device Fraud, Aggravated Identity Theft and Witness TamperingRead the Press Release
LOS ANGELES – A former Inland Empire resident who was the chief executive officer of an Upland business has been charged with causing unauthorized charges to be placed on thousands of consumer credit and debit card accounts, the Justice Department announced today.
Jason Edward Thomas Cardiff, 48, formerly of Upland, is charged with access device fraud, aggravated identity theft and two counts of witness tampering. A four-count indictment was unsealed Monday at Cardiff’s arraignment, where he pleaded not guilty to the charges.
Cardiff, who is currently in federal custody, is scheduled to appear this afternoon before United States Magistrate Judge Brianna Fuller Mircheff for a continued hearing on the government’s motion to have him detained pending trial.
The indictment alleges that Cardiff owned and operated Redwood Scientific Technologies, which sold various homeopathic thin film strip products to consumers. Between January 2018 and May 2018, Cardiff directed his employees to use the credit and debit card information associated with previous customers to charge for additional products that those customers had not ordered. The indictment further alleges that Cardiff ordered employees to destroy documents that were responsive to a Federal Trade Commission Civil Investigative Demand.
“This indictment alleges a blatant ripoff that simply charged customers for products they never ordered,” said United States Attorney Martin Estrada. “We will remain vigilant to protect consumers from predatory businesses that exploit the trust placed in them by consumers.”
“These charges reflect the department’s commitment to investigate unauthorized charges imposed on consumer accounts and hold criminals accountable for their wrongdoing,” said Principal Deputy Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The Justice Department will use all of the tools at its disposal to prosecute such schemes.”
“The outstanding work by postal inspectors in this investigation uncovered a fraud scheme, where American consumers never received the products for which they were billed,” said Inspector in Charge Carroll Harris for the U.S. Postal Inspection Services (USPIS), Los Angeles Division. “The U.S. Postal Inspection Service is committed to protecting American consumers from falling victim to these types of fraud schemes.”
At his arraignment on Monday, Cardiff was ordered to stand trial on January 23.
An indictment is merely an allegation. The defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
If convicted, Cardiff would face a statutory maximum penalty of 15 years for access device fraud, 20 years for witness tampering and a mandatory two-year term of imprisonment for aggravated identity theft. A United States District Court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
USPIS is investigating the case.
Assistant United States Attorney Valerie Makarewicz of the Major Frauds Section, along with Justice Department Trial Attorneys Manu Sebastian and Brianna Gardner of the Civil Division’s Consumer Protection Branch, are prosecuting the case.
New York City Man Sentenced to Nearly 26 Years in Prison for Abducting Elderly Woman with Dementia and Obstructing FBI InvestigationRead the Press Release
LOS ANGELES – A New York City man was sentenced today to 310 months in federal prison for kidnapping a 68-year-old woman with dementia at the West Los Angeles Veterans Affairs Medical Center in July 2021, then obstructing an FBI investigation into the abduction.
Johnny Ray Gasca, 53, of Bronx, New York, was sentenced by United States District Judge André Birotte Jr.
At the conclusion of a six-day bench trial, Judge Birotte on June 13 found Gasca guilty of one count of kidnapping, two counts of attempted obstruction of justice, and one count of attempted witness tampering.
“[Gasca] financially exploited [the] victim’s mental fragility – describing his supposed ‘girlfriend’ as ‘senile’… – to steal tens of thousands of dollars from her,” prosecutors argued in a sentencing memorandum. “After the victim managed to get away from [Gasca], he abducted her from the grounds of a hospital where she had sought care for her dementia, in order to steal even more of her money. Immediately after the abduction, he attempted to indoctrinate her to parrot back a version of events favorable to him.”
Gasca kidnapped the victim at approximately 8:30 a.m. on July 19, 2021, after the victim attempted to obtain a medical appointment at the VA facility.
The victim was accompanied by a long-time friend, and as the two of them “approached their car, Gasca appeared unexpectedly,” according to court documents. “Gasca put his arms around [the victim] and pushed her toward a gold-colored pickup truck that was parked nearby. Gasca then picked [the victim] up and threw her into the rear portion of the truck’s passenger compartment.”
After the Department of Veteran Affairs Police Department contacted the FBI later in the morning, the victim’s friend told agents she recognized Gasca, believed he previously was in some kind of relationship with the victim, and suspected Gasca may have taken some of [the victim’s] money from her bank and retirement accounts.
The witness also reported that the victim previously noted she was missing some of her credit cards, and when the two went to the victim’s bank to review her accounts, bank records showed a $35,000 withdrawal from the victim’s retirement account, followed by several Venmo, MoneyGram and PayPal transactions that the friend believed the victim did not have “the knowledge or wherewithal” to conduct, court documents state.
Within hours of beginning its investigation, the FBI located the victim’s phone at a hotel on Hollywood Boulevard in Los Angeles, where agents converged. Soon after, Gasca and the victim exited the hotel, leading to Gasca’s arrest.
During an interview recounted in court documents, Gasca described the victim as his girlfriend and told agents that, after leaving the VA facility, they stopped at a bank where the victim made a $15,000 withdrawal.
After his arrest and while in pre-trial custody, Gasca made several jail calls to a friend in New York asking him to destroy evidence of his wrongdoing with the victim, according to evidence presented at the trial. Gasca urged the friend to erase all his messages on the Facebook Messenger app, including messages describing the victim as a “Golden goose.”
In August 2021, Gasca made another jailhouse phone call to his friend and told him to collect his hard drives from his apartment before the FBI could seize them and learn of his financial exploitation of the victim.
The FBI investigated this matter and received substantial assistance from the VA Police.
Assistant United States Attorneys Kevin B. Reidy of the Major Frauds Section and Kathy Yu of the Violent and Organized Crime Section prosecuted this case.
Los Angeles Man Sentenced to 10 Years in Federal Prison for Crime Spree in Which He Used a BB Gun to Rob Businesses and Carjack a MotoristRead the Press Release
LOS ANGELES – A Los Angeles man was sentenced today to 120 months in federal prison for committing a carjacking and used a BB gun to commit eight armed robberies of gas stations and convenience stores in Los Angeles County earlier this year.
Namir Malik Ali Greene, 23, was sentenced by United States District Judge Sherilyn Peace Garnett, who also ordered him to pay $17,084 in restitution.
Greene pleaded guilty on September 23 to one count of Hobbs Act robbery.
On the morning of April 4, Greene robbed a gas station in Marina del Rey. Greene made a purchase and remained inside of the store until all other customers left the business. After all the customers inside of the business left, Greene placed a brown paper bag on the counter and told the clerk, “Put everything in there,” according to his plea agreement.
Greene pointed what appeared to be a black semi-automatic handgun, but what in fact was a BB gun, at the clerk while demanding the money. In fear, the clerk emptied the cash register and placed $700 into the brown paper bag. Greene then fled the store.
Greene committed seven additional armed robberies from April 4 to April 8 of gas stations and convenience stores in Long Beach, Whittier, South Los Angeles, Pomona, and Culver City.
On April 15, Greene – while armed with a BB gun – carjacked the owner of a 2010 Honda Accord. On April 17, while driving the car that he had carjacked, Greene led officers on a pursuit during which he drove over 90 miles per hour, almost crashed into a bystander motorist, drove against oncoming traffic, and crashed into a curb, according to court documents.
Greene has been in federal custody since April 18.
The Bureau of Alcohol, Tobacco, Firearms and Explosives’ Orange County Violent Crime Task Force (OCVCTF) investigated this matter, with assistance from the Los Angeles Police Department’s Robbery Homicide Division and the Ontario Police Department. The OCVCTF is comprised of federal and local law enforcement agencies, including, but not limited to, the ATF, the Brea Police Department, the Santa Ana Police Department, the Orange County District Attorney’s Office, and the Fullerton Police Department.
Assistant United States Attorney Jena A. MacCabe of the Violent and Organized Crime Section prosecuted this case.
One-Time Orange County Tax Preparer Convicted of Tax Fraud Scheme that Sought over $10 Million from IRS and Dozens of State GovernmentsRead the Press Release
SANTA ANA, California – A former Orange County tax preparer was convicted today of federal criminal charges for leading a multi-year tax fraud conspiracy that spanned three continents and claimed more than $10 million from the IRS and dozens of state tax authorities.
Stephen Jake McGonigle, 66, of Victorville, was found guilty of one count of conspiracy to defraud the United States, one count of conspiracy to commit wire fraud, and one count of aggravated identity theft. A federal jury returned the guilty verdicts at the conclusion of an eight-day trial.
According to evidence presented during the trial, McGonigle recruited others, including two co-defendants who previously pleaded guilty, to help convince the IRS and dozens of state governments to issue millions of dollars in fraudulent tax refunds.
To perpetrate the massive fraud scheme that began in 2013, McGonigle sent one co-defendant to Thailand to obtain fake identification documents that used stolen victim identities, and then he directed co-conspirators to use those fake identifications to obtain prepaid debit cards, as well as numerous commercial mailboxes across Orange County and elsewhere. After having the prepaid debit cards sent to these untraceable mailboxes, McGonigle and his co-conspirators filed fraudulent tax returns using the identity theft victims’ Social Security numbers. Those fraudulent tax returns sought millions of dollars in tax refunds to be deposited into these prepaid debit cards or other bank accounts that they controlled.
With more than a decade of tax preparation experience in Southern California, McGonigle used his knowledge to lead the fraud scheme. The IP addresses used to file the fraudulent returns were traced back to various office spaces leased by McGonigle and to Costa Rica, where law enforcement surveillance and travel records showed that McGonigle and his co-conspirators opened an office and hired employees to help file additional fraudulent returns.
United States District Judge James V. Selna scheduled a March 4, 2024 hearing, at which time McGonigle will face a statutory maximum sentence of 22 years in federal prison. Prosecutors have secured guilty pleas from two co-defendants, who are also scheduled to be sentenced in the coming months.
IRS Criminal Investigation, Homeland Security Investigations, and the United States Postal Inspection Service investigated this matter. The Missouri Department of Revenue and the U.S. Secret Service provided substantial assistance during the investigation.
Assistant United States Attorneys Sue Bai of the Terrorism and Export Crimes Section and Colin Scott of the General Crimes Section are prosecuting this case.
‘SIM Swapper’ Sentenced to Eight Years in Prison for Campaign of Fraud and Deception, Including Hacking into Instagram AccountsRead the Press Release
LOS ANGELES – A downtown Los Angeles man was sentenced today to 96 months in federal prison for committing a series of frauds, including one in which he “SIM swapped” victims – one of them a social media influencer – to hijack their Instagram accounts to unlawfully obtain money.
Amir Hossein Golshan, 25, was sentenced by United States District Judge Otis D. Wright II, who also ordered him to pay $1,218,526 in restitution. At today’s hearing, Judge Wright said Golshan’s crimes went “beyond just money,” and that they showed a “wanton cruelty” that caused the victims to live in a state of “constant fear and worry.”
Golshan on July 19 pleaded guilty to one count of unauthorized access to a protected computer to obtain information, one count of wire fraud, and one count of accessing a computer to defraud and obtain value.
Golshan has been in federal custody since June 2023 after he was found to have violated the terms of his pretrial release.
From at least April 2019 to February 2023, Golshan knowingly executed multiple online schemes to defraud hundreds of victims through various online scams and unauthorized intrusions into victims’ digital accounts, including social media account takeovers, Zelle payment fraud, and impersonating Apple support. In total, Golshan’s entire scheme caused approximately $740,000 in losses to hundreds of victims over several years.
“[Golshan’s] crimes demonstrate an utter lack of respect for the law and basic human dignity,” prosecutors argued in a sentencing memorandum. “He showed little remorse for his victims or being caught during his years of crime, believing that he could hide behind the anonymity of online screennames or VPNs, and that his victims – who were on the other side of the computer – would never find him. Indeed, defendant continued to commit these crimes, becoming more sophisticated and brazen in his actions, up until the FBI arrested him.”
SIM swapping and social media account takeovers
“SIM swapping” is the process of fraudulently inducing a carrier to reassign a cell phone number from the legitimate subscriber’s SIM card to a SIM card controlled by another without the legitimate subscriber’s authorization. This allows the fraudster to take control of the victim’s various accounts through two-step authentication text messages sent to a victim’s cell phone.
Golshan’s SIM swapping and social media account takeovers targeted both the account owners and their online friends, duping them into sending him money.
For example, in December 2021, a Los Angeles-based model and influencer with more than 100,000 followers on social media, received a direct message on Instagram from her friend’s account, stating, “Can you do me a favor? What’s your number?” The victim provided her phone number to the person whom she believed was her friend, but who really was Golshan.
Golshan then logged into the victim’s Instagram account without authorization, impersonated the victim to her friends, and requested the victim’s friends send him money through Zelle, PayPal and other online payment platforms. Several of the victim’s friends sent Golshan money, totaling thousands of dollars, believing they were sending money to the victim. During the time that Golshan locked the victim out of her accounts, he sent her messages demanding $2,000 for the return of her accounts and threatening to delete her accounts if she did not pay him.
Zelle merchant fraud
Golshan also fraudulently advertised fake and non-existent Instagram services to individual victims for several hundred dollars each. In August 2019, for example, Golshan falsely represented on Instagram that he could provide a verified Instagram badge for one victim’s teenage daughter in exchange for $300. Golshan knew this statement was false and that only Instagram could provide such a badge. Nevertheless, Golshan induced the victim to send an electronic payment of $300 to him, which he deposited in his bank account.
During Golshan’s SIM swapping and Zelle fraud schemes, Golshan fraudulently received approximately $82,000 in payments from approximately 500 victims, usually in increments of $300 to $500 per victim.
Apple Support fraud and NFT/cryptocurrency theft
Golshan impersonated Apple Support personnel to gain unauthorized access to several victims’ Apple iCloud accounts to steal NFTs, cryptocurrency, and other valuable digital property. Through this conduct, Golshan defrauded five victims of amounts between $2,000 and $389,000 each.
For example, in August 2022, Golshan called a victim from Apple Support’s official telephone number and pretended to be an Apple Support employee. Golshan told the victim that Apple Support wanted to give the victim an advanced security protocol to protect the victim’s iCloud account. Golshan then caused a two-step authentication code to be sent to the victim’s phone.
Through these misrepresentations, Golshan fraudulently induced the victim to tell him this six-digit security code, which allowed Golshan to gain access to the victim’s iCloud account. Golshan then changed the email address on the victim’s iCloud account to an email address that he controlled. Golshan then stole valuable digital property from the victim, including an NFT valued at approximately $319,000 and approximately $70,000 worth of cryptocurrency. Later that same day, defendant sold the stolen NFT for $130,000 in cryptocurrency on a NFT marketplace.
The FBI investigated this matter.
Assistant United States Attorney Andrew M. Roach of the Cyber and Intellectual Property Crimes Section prosecuted this case. Assistant United States Attorney Tara B. Vavere of the Asset Forfeiture and Recovery Section is handling asset forfeiture matters in this case.
Ventura County Man Sentenced to 18 Months in Federal Prison for Making Death Threats to a Nonprofit and Reproductive Health CentersRead the Press Release
LOS ANGELES – A Ventura County man was sentenced today to 18 months in federal prison for making threatening telephone calls last year, including to a Planned Parenthood office on the day the United States Supreme Court overturned its Roe v. Wade decision.
Nishith Tharaka Vandebona, 34, of Oxnard, but who lived in Camarillo when he committed the crimes, was sentenced by United States District Judge R. Gary Klausner, who described the threatening phone calls as “egregious.”
Vandebona has been in federal custody since June 12, when he pleaded guilty to one misdemeanor count of threatened forcible intimidation regarding the obtaining and provision of reproductive health services under the federal Freedom of Access to Clinic Entrances (FACE) Act and one felony count of transmitting threatening communications in interstate commerce.
“Seeking to intimidate others through death threats is unacceptable,” said United States Attorney Martin Estrada. “Today’s sentence shows that there will be consequences for those who threaten violence against workers at reproductive health facilities in violation of federal law.”
“Mr. Vandebona crossed the line from protected speech to criminal activity when he terrorized his ideological adversaries with death threats,” said Donald Alway, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The FBI safeguards the rights of all citizens and, as today's sentencing makes clear, will hold accountable those who threaten or violate the civil rights of others.”
In February and June of 2022, Vandebona used an internet application to create anonymous telephone numbers to make the threatening calls.
During the spring of 2022, there was news coverage that the Supreme Court was considering overturning Roe, its 1973 decision that recognized a constitutional right to abortion, after an initial draft of the new opinion was leaked.
On June 24, 2022, the Supreme Court published a decision in Dobbs v. Jackson Women’s Health Organization, which overturned Roe and ruled that the Constitution does not confer a right to abortion.
On the same day, using an anonymous number, Vandebona left a voicemail message containing death threats with Planned Parenthood California Central Coast, a Santa Barbara-based reproductive health services organization.
On June 25, 2022, Vandebona called Planned Parenthood Los Angeles and spoke with a call center specialist. Vandebona said, “I’m calling to let you know that I’m going to come in there and kill all of you, including your staff and your security. You got it? You’re overdue for an attack.”
Within an hour, Vandebona telephoned Planned Parenthood Los Angeles again and made several death threats, including “I’m gonna come in there and murder your staff.”
Prior to the threats to the Planned Parenthood facilities, Vandebona called in a bomb threat in February 2022 to the office of Californians for Population Stabilization (CAPS), a Ventura-based non-profit organization that advocates for “zero population growth,” primarily through immigration restrictions.
Vandebona used anonymous numbers he obtained from the internet to make threatening phone calls to CAPS. In one of the calls, he said, “I’m gonna come in there and kill all of you, dude. Be careful.”
In another call to CAPS in February 2022, Vandebona said, “I’m gonna come in there, plant a bomb, and kill as many white Americans as possible. You understand that? Servicemen, families, everybody.”
The FBI investigated this matter. The Santa Barbara Police Department, the Santa Monica Police Department, and the Ventura County Sheriff’s Office assisted in this investigation.
Assistant United States Attorney Frances S. Lewis of the Public Corruption and Civil Rights Section prosecuted this case.
Anyone who has information about incidents of violence, threats, and obstruction that target a patient or provider of reproductive health services or damage and destruction of reproductive health care facilities, should report that information to the FBI at https://tips.fbi.gov.
For more information about clinic violence, and the Department of Justice’s efforts to enforce FACE Act violations, please visit www.justice.gov/crt/national-task-force-violence-against-reproductive-health-care-providers.
Sherman Oaks Man Receives over 7 Years in Prison for $7 Million Ponzi Scheme He Ran with His Brother Out of Their Parents’ HouseRead the Press Release
SANTA ANA, California – A San Fernando Valley man was sentenced today to 87 months in federal prison for scheming with his brother to fraudulently obtain more than $7 million from at least 40 investors – their fellow members of the Valley’s Orthodox Jewish Israeli community – through an investment company they ran out of their parents’ house.
Sassi Mizrahi, 58, of Sherman Oaks, was sentenced by United States District Judge Cormac J. Carney, who also ordered him to pay $4,477,720 in restitution.
At the conclusion of six-day trial, a jury on February 14 found Mizrahi guilty of five counts of wire fraud.
His brother, Motty Mizrahi, 51, of Encino, pleaded guilty on January 6 to six counts of wire fraud and one count of aggravated identity theft. Motty Mizrahi is scheduled to be sentenced on December 18.
Motty Mizrahi falsely portrayed himself as a licensed broker, a certified public accountant, and an experienced trader who employed sophisticated financial option- and insurance-hedging strategies through the brothers’ business, MBIG Company. Both Mizrahi brothers operated MBIG out of their parents’ home in Encino.
“For years…Sassi Mizrahi and his brother, co-defendant Motty Mizrahi… operated a Ponzi scheme that targeted victims they knew had reason to trust them: fellow members of the close-knit, Orthodox Jewish Israeli community of the San Fernando Valley,” prosecutors argued in a sentencing memorandum. “Exploiting the goodwill engendered by such affinity, defendants scammed millions of dollars from their victims with false promises of risk-free investments and guaranteed returns.”
From June 2012 until March 2019, the Mizrahi brothers raised more than $7 million from investors, promised them “guaranteed” returns between 2% and 3% per month, promised annual rates of return ranging from 30% to 102%, and assured them that their funds could be withdrawn after an initial holding period on an on-demand basis.
Neither Mizrahi brother ever invested any victim-investor funds in an account under MBIG’s name. Instead, Motty Mizrahi transferred most of the victim-investor funds into his personal trading accounts at E*TRADE and TD Ameritrade, in which he accumulated persistent and extensive losses. As a result of their investments with MBIG, victim-investors sustained losses of at least $3.3 million. Sassi Mizrahi received hundreds of thousands of dollars of investor money, and helped his brother conceal the truth about the scheme from MBIG’s investors.
Sassi Mizrahi and his brother submitted phony monthly account statements that purported to show consistent monthly gains and falsely showed that MBIG’s account balances were between $6 million and $9 million. However, Motty Mizrahi instead lost the investors’ money – losses he and Sassi Mizrahi denied when confronted by victims who unsuccessfully demanded their money back.
“When victims asked for their money back, [Sassi Mizrahi] gaslit them with lies about the safety of their investments, promises of repayment he knew could not be honored, threats of retaliation, and forged documents meant to corroborate his increasingly baroque excuses for why the money was unavailable,” prosecutors argued in a sentencing memorandum.
In October 2020, the U.S. Securities and Exchange Commission obtained a judgment of more than $3 million against Motty Mizrahi and MBIG for perpetuating the fraud.
The FBI investigated this matter.
Assistant United States Attorneys Morgan J. Cohen and David Y. Pi of the Major Frauds Section are prosecuting this case.
Owner of Orange County Auto-Repair Businesses Pleads Guilty to Filing False Tax Returns that Omitted Nearly $3 Million in IncomeRead the Press Release
SANTA ANA, California – The owner of three Orange County auto-repair businesses pleaded guilty today to a federal criminal charge for deliberately failing to report nearly $3 million in income to the IRS over a seven-year period, causing a tax loss to the United States of almost $1 million.
Chung Ku Sin, 68, of Garden Grove, pleaded guilty to a single-count information charging him with filing a false tax return.
According to his plea agreement, Sin owns and operates three auto-repair companies in Orange County: Golden Auto Body, Tops Auto Body, and Victory Auto Body. During the tax years 2015 through 2021, Sin received payments for services from these companies, including in the form of checks. During this period, Sin used a check-cashing business in Garden Grove to cash checks for services performed by these companies.
Sin used the check-cashing business to cash approximately $2,927,265 in checks made payable to his auto-repair businesses. Sin willfully and intentionally withheld from his tax preparer the business receipts and income these companies received in the form of checks. Instead, he only provided to his tax preparer and reported on his tax returns the business receipts and income that he had deposited into his business bank accounts.
For example, in October 2017, Sin willfully made and subscribed to a materially false federal individual income tax return for the calendar year 2016, which was verified by a written declaration that it was made under the penalties of perjury and was filed with the IRS. Sin knew that this tax return falsely reported that his total income for 2016 was $180,124 when, in fact, he knew the number he provided to the government omitted approximately $580,351 in income.
Sin further admitted in his plea agreement to willfully making and subscribing to materially false federal individual income tax returns for the years 2015, 2017, 2018, 2019, 2020, and 2021.
The total tax loss Sin deliberately caused to the United States Treasury for these years was $977,807. He has agreed to pay to the IRS this sum plus penalties and interest.
United States District Judge John W. Holcomb scheduled a May 10, 2024 sentencing hearing, at which time Sin will face a statutory maximum sentence of three years in federal prison.
IRS Criminal Investigation investigated this matter.
Assistant United States Attorney Brett A. Sagel of the Corporate and Securities Fraud Strike Force is prosecuting this case.
Harbor Area Man Arraigned on Federal Indictment Alleging He Knowingly Sold Fentanyl to Two Victims, One of Whom Later DiedRead the Press Release
LOS ANGELES – A Los Angeles Harbor region man was arraigned today on criminal charges alleging he is a drug dealer who knowingly and intentionally distributed fentanyl to two victims – one of whom died, and the other was seriously injured by the powerful synthetic opioid.
Antjuan Stephone Doss, 33, a.k.a. “Giovani Dinero,” whose last known residence was Harbor City, charged by a federal grand jury in a six-count indictment returned on November 15 and unsealed today. Doss was arrested on Tuesday and a federal magistrate judge today ordered him jailed without bond.
At his arraignment this afternoon in United States District Court in downtown Los Angeles, Doss pleaded not guilty to the charges against him and a January 2, 2024 trial date was scheduled in this case.
Doss is charged with one count of distribution of fentanyl resulting in death and serious bodily injury, one count of distribution of fentanyl, one count of conspiracy to distribute cocaine and fentanyl, one count of possession with intent to distribute fentanyl, one count of possession of a firearm in furtherance of a drug trafficking crime, and one count of being a felon in possession of a firearm and ammunition.
According to the indictment, on August 13, 2022, Doss knowingly and intentionally distributed fentanyl. Two victims – identified in court documents as “M.N.” and “G.N.” – later ingested the fentanyl, the use of which resulted in serious bodily injury to M.N. and the death of G.N. On the same day, Doss also knowingly and intentionally distributed 45 pills containing this powerful drug, according to the indictment.
The indictment further alleges that, from August 9 to August 22, 2022, a co-conspirator, using couriers, supplied Doss with fentanyl powder, pills containing fentanyl, and cocaine. Doss, acting at the co-conspirator’s direction, then packaged and distributed to his own customers the fentanyl and cocaine that the co-conspirator provided him, according to the indictment. Doss allegedly then remitted drug proceeds to the co-conspirator.
On August 22, 2022, law enforcement executed a search warrant at Doss’s residence, including the bedroom that he shared with a woman and their infant child. During the search, law enforcement found in Doss’s bedroom fentanyl in various locations, including on the floor, that were easily accessible by the child, according to court documents.
Doss also allegedly possessed with intent to distribute approximately 1 kilogram of fentanyl and illegally possessed a firearm, namely a 9mm semi-automatic pistol, in furtherance of his drug trafficking activities. He also allegedly illegally possessed seven rounds of ammunition. Doss is prohibited from possessing firearms and ammunition because of his prior conviction of his January 2016 conviction of two felonies – identity theft and using an access device without consent – in Los Angeles Superior Court.
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, Doss would face a mandatory minimum sentence of 25 years in federal prison and a statutory maximum sentence of life imprisonment.
The Drug Enforcement Administration and the Los Angeles County Sheriff’s Department investigated this matter.
Assistant United States Attorneys Brittney M. Harris, of the International Narcotics, Money Laundering, and Racketeering Section and J’me K. Forrest of the General Crimes Section are prosecuting this case.
Calabasas Man Arraigned on Indictment Alleging He Ran Same-Day Drug Delivery Service by Car that Resulted in Fatal Fentanyl OverdoseRead the Press Release
LOS ANGELES – A Calabasas man who allegedly ran a drug trafficking operation that provided by car same-day delivery of cocaine and fentanyl-laced oxycodone, including to one victim who died last year from a fentanyl overdose, was arraigned today on narcotics charges in federal court.
Erick Oved Estrada, 35, a.k.a. “Franco Sanchez” and “Eric Freddy Hook,” who allegedly ran the narcotics delivery driver business out of his home, was arrested Tuesday along with three other defendants, including his wife – all of whom were arraigned this afternoon in United States District Court in downtown Los Angeles.
Also arrested Tuesday were:
- Arian Alani, 34, of Burbank, who, along with Estrada, allegedly distributed the fentanyl that led to the victim’s fatal overdose in June 2022;
- Gilberto Marquez, 34, of Woodland Hills, an alleged lieutenant in the drug trafficking operation; and
- Zoila Michelle Estrada, 36, of Calabasas, Erick Estrada’s wife.
The defendants pleaded not guilty to the charges against them and a January 16, 2024 trial date was scheduled. A federal magistrate judge ordered all four defendants detained.
Law enforcement continues to search for defendants Tomas Marquez-Ruiz, 37, a.k.a. “El Cafecito,” of Chatsworth, another alleged lieutenant in the drug trafficking operation, and Caseya Chanel Brown, 39, a.k.a. “Mom,” of Woodland Hills, an alleged delivery driver in the drug trafficking operation.
According to the 18-count indictment returned November 15 and unsealed today, from May 2019 to June 2022, Erick Estrada obtained narcotics, including cocaine and purported oxycodone pills that actually contained fentanyl. Erick Estrada, Marquez-Ruiz, and Marquez then allegedly provided these drugs to a network of drug delivery drivers, including Brown and other co-conspirators, for further distribution to customers or other drug distributors. Brown and others directly provided the drugs to customers or distributors and collected payment.
On June 8, 2022, Erick Estrada allegedly sold 25 oxycodone pills to Alani and a delivery driver then provided to Alani the purported oxycodone pills, which in fact contained fentanyl. The following day, Alani allegedly sold some of the fentanyl-laced pills to the victim, identified in the indictment as “C.N.,” who ingested them and died of a drug overdose.
On June 10, 2022, Alani confronted Erick Estrada via text message and wrote, “my boy just died yesterday” – a reference to C.N. – and that Estrada “[s]houldn’t be selling [expletive] with fentanyl.”
Erick and Zoila Estrada laundered the drug proceeds through his sham businesses’ bank accounts, where they used the money for various personal expenses, including luxury vehicles such as a Lamborghini and a Land Rover, the indictment alleges.
Erick Estrada, Marquez-Ruiz, Marquez, and Brown are charged with one count of conspiracy to distribute controlled substances resulting in death and one count of distribution of cocaine. Erick Estrada also is charged with two additional counts of distribution of cocaine, one count of distribution of fentanyl resulting in death, and 11 counts of money laundering. Alani is charged with one count of distribution of fentanyl resulting in death. Zoila Estrada is charged with one count of money laundering.
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, Erick Estrada, Marquez-Ruiz, Marquez, Brown, and Alani would face a mandatory minimum sentence of 20 years in federal prison and a statutory maximum sentence of life imprisonment. If convicted, Zoila Estrada would face up to 10 years in federal prison.
The Drug Enforcement Administration and IRS Criminal Investigation are investigating this matter. The DEA Overdose Justice Task Force, the Simi Valley Police Department, the Burbank Police Department, and the Los Angeles County Sheriff’s Department provided assistance.
Assistant United States Attorney MiRi Song of the International Narcotics, Money Laundering, and Racketeering Section is prosecuting this 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 https://www.justice.gov/OCDETF.
Superseding Indictment Adds 13 Defendants to Fentanyl Distribution Conspiracy Spanning from California to D.C.Read the Press Release
WASHINGTON – Federal law enforcement in D.C., Virginia, Maryland, San Diego, and Los Angeles arrested 11 additional alleged members of a fentanyl drug distribution, responsible for bringing hundreds of thousands of fake blue Oxycodone (M30) pills, containing fentanyl, from California to D.C., announced U.S. Attorney Matthew M. Graves, Administrator Anne Milgram, of the Drug Enforcement Administration (DEA), Special Agent in Charge Jarod Forget, of the DEA Washington Division, Inspector in Charge Damon Wood, of the United States Postal Inspection Service Washington Division, and Chief Pamela Smith, of the Metropolitan Police Department (MPD).
Defendants Trayveon James Johnson, Karon Olufemi Blalock, Ronte Ricardo Greene, Melvin Edward Allen, Jr., Darius Quincy Hodges, Lamin Sesay, Paul Alejandro Felix, Omar Arana, Edgar Balderas, Jr., Raul Pacheco Ramirez, and Giovani Alejandro Briones, were arrested in coordinated law enforcement operations conducted across three states and the District of Columbia. They are named in a fourth superseding indictment that includes 13 other previously charged defendants (complete chart of arrested defendants below) and alleges a conspiracy to distribute 400 grams or more of a mixture and substance containing fentanyl.
“As the breadth and scope of this indictment and corresponding arrests show, our office is working tirelessly to hold those who peddle poison in our community criminally accountable,” said U.S. Attorney Matthew M. Graves. “There will be no hiding from law enforcement for anyone selling fentanyl in the District. One of the surest ways to find yourself the subject of a federal investigation is to be part of a trafficking network like these alleged defendants.”
“This investigation started when a young woman in Washington, D.C.—Diamond Lynch—took one pill and died almost immediately. DEA has worked to track down every single individual who played a part in Diamond’s death, and we found a vast network of traffickers who transported fentanyl from Mexico to L.A. to right here in D.C.,” said DEA Administrator Anne Milgram. “Today, 26 defendants are charged and in custody as a result of the investigation into Diamond Lynch’s death, and law enforcement has seized over a 94,000 fentanyl pills, 15 pounds of fentanyl powder, and 30 firearms as part of this investigation. DEA will continue to relentlessly pursue every single aspect of the global fentanyl supply chain to bring justice for Diamond Lynch and for the hundreds of thousands of American lives lost to fentanyl.”
“This joint investigation is an example of how the US Postal Inspection Service utilizes our unique investigative capabilities in the fight against the trafficking of narcotics, specifically opioids such as fentanyl, that are killing Americans,” said Damon E. Wood, Inspector in Charge – Washington Division. “It further highlights our commitment to keep the US Mail and our postal employees safe. Together with our law enforcement partners, we will ensure that those who engage in such activity are brought to justice.”
“To protect the American public, it is the mission of the DEA to investigate and take down major drug traffickers like the ones indicted today, that are illegally distributing fake pills containing fentanyl to the citizens of the District of Columbia, Maryland and Virginia,” said Special Agent in Charge Jarod Forget, of the DEA Washington Division. “As part of our initiatives Operation Overdrive and One Pill Can Kill, the DEA is making a difference by attacking the violent drug traffickers poisoning our communities.”
“Fentanyl poisons our neighbors, steals our friends and family, and attracts violence that plagues our community,” said Metropolitan Police Chief Pamela A. Smith. “Every member of the Metropolitan Police Department is deeply committed to riding our neighborhoods of this drug. This investigation and the resulting federal charges are just the latest example of how MPD will use every resource and partnership that we have to bring offenders to justice. We are all working together to make DC a safer place for everyone.”
According to the indictment, the defendants are members of a drug conspiracy that began in August of 2020 and operated in the District of Columbia, the Eastern District of Virginia, the Central District of California, the Southern District of California, the District of Maryland, the Middle District of Tennessee, and elsewhere. It further charges defendants Carias Torres, Briones, and Valdez with conspiracy to launder the proceeds of the illegal drug distribution. Defendant Columbian Thomas is charged with possession of a machinegun in furtherance of a drug trafficking offense.
DEFENDANT NAME
AGE
LOCATION
CHARGES
Hector David Valdez,
aka “Curl”
26
Santa Fe Springs, California
Conspiracy to distribute 400 grams or more of fentanyl;
Conspiracy to commit international money laundering
Craig Eastman
20
Washington, D.C.
Conspiracy to distribute more than 400 grams of fentanyl;
Possession with intent to distribute fentanyl;
Possession with intent to distribute fentanyl within 1000 feet of a protected location
Charles Jeffrey Taylor
20
Washington, D.C.
Conspiracy to distribute 400 grams or more of fentanyl;
Possession with intent to distribute fentanyl
Raymond Nava, Jr.
19
Bell Gardens,
California
Conspiracy to distribute 400 grams or more of fentanyl
Ulises Aldaz
27
Bell Gardens,
California
Conspiracy to distribute 400 grams or more of fentanyl
Max Alexander Carias Torres
26
Bell Gardens,
California
Conspiracy to distribute 400 grams or more of fentanyl;
Conspiracy to commit international money laundering
Teron Deandre McNeil, aka “Wild Boy”
33
Washington, D.C.
Conspiracy to distribute 400 grams or more of fentanyl
Marvin Anthony Bussie,
aka “Money Marr”
21
Washington, D.C.
Conspiracy to distribute 400 grams or more of fentanyl
Marcus Orlando Brown
28
Washington, D.C.
Conspiracy to distribute 400 grams or more of fentanyl
Columbian Thomas, aka
"Cruddy Murda”
25
Washington, D.C.
Conspiracy to distribute 400 grams or more of fentanyl;
Possession of a machinegun in furtherance of a drug trafficking crime
Wayne Rodell Carr-Maiden
28
Washington, D.C.
Conspiracy to distribute 400 grams or more of fentanyl
Andre Malik Edmond,
aka “Draco”
22
Temple Hills, Maryland
Conspiracy to distribute 400 grams or more of fentanyl
Treyveon James Johnson,
aka “Treyski”
19
Alexandria, Virginia
Conspiracy to distribute 400 grams or more of fentanyl
Karon Olufemi Blalock,
aka “Fat Bags”
29
Alexandria, Virginia
Conspiracy to distribute 400 grams or more of fentanyl
Ronte Ricardo Greene,
aka “Cardiddy”
28
Washington, D.C.
Conspiracy to distribute 400 grams or more of fentanyl;
Possession with intent to distribute fentanyl
Melvin Edward Allen, Jr., aka “21”
38
Washington, D.C.
Conspiracy to distribute 400 grams or more of fentanyl
Darius Quincy Hodges,
aka “Brick”
33
Glen Allen, Virginia
Conspiracy to distribute 400 grams or more of fentanyl
Lamin Sesay,
aka “Rock Star”
27
Alexandria, Virginia
Conspiracy to distribute 400 grams or more of fentanyl
Paul Alejandro Felix
24
Glendale,
California
Conspiracy to distribute 400 grams or more of fentanyl
Omar Arana,
aka “Frogs”
26
Cudahy,
California
Conspiracy to distribute 400 grams or more of fentanyl
Edgar Balderas, Jr., aka
“Nano”
25
San Diego,
California
Conspiracy to distribute 400 grams or more of fentanyl
Raul Pacheco Ramirez
29
Long Beach,
California
Conspiracy to distribute 400 grams or more of fentanyl
Giovani Alejandro Briones
29
Victorville, California
Conspiracy to distribute 400 grams or more of fentanyl;
Conspiracy to commit international money laundering
The conspiracy charge carries a mandatory minimum sentence of 10 years in prison up to life. The sentencing will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
This investigation is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
The prosecutions followed a joint investigation by the DEA Washington Division and the U.S. Postal Inspector, in partnership with the Metropolitan Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), with additional support from the DEA Los Angeles, San Diego, and Riverside Field Offices, the Federal Bureau of Investigation’s Washington Field Office, and the Charles County, Maryland Sheriff’s Office. Valuable assistance was provided by the U.S. Attorney’s Offices in the Central and Southern Districts of California, the Eastern District of Virginia, and the District of Maryland. The case is being prosecuted by Assistant U.S. Attorneys Matthew W. Kinskey, Solomon Eppel, and David T. Henek, of the Violence Reduction and Trafficking Offenses (VRTO) Section. Valuable assistance was provided by former Assistant U.S. Attorney Andy T. Wang.
An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Two Corporate Executives Found Guilty in First-Ever Criminal Prosecution for Failure to Report Under Consumer Product Safety ActRead the Press Release
LOS ANGELES – A jury has found two corporate executives guilty of federal criminal charges related to the distribution and sale of defective residential dehumidifiers linked to multiple fires in the first corporate criminal enforcement action ever brought under the Consumer Product Safety Act (CPSA), the Justice Department announced today.
Simon Chu, 68, of Chino Hills, and Charley Loh, 65, of Arcadia, were found guilty on Thursday afternoon of one count of conspiracy to defraud the United States Consumer Product Safety Commission (CPSC) and one count of failure to furnish information as required by the CPSA.
The defective dehumidifiers sold by Chu’s and Loh’s two corporations were included in multiple recalls of a larger number of defective dehumidifiers manufactured by Gree Electric Appliances Inc. of Zhuhai (Gree Zhuhai) in China. Recall notes stated that more than 450 reported fires and millions of dollars in property damage have been linked to the recalled Gree Zhuhai dehumidifiers. The most recent recall announcements for the Gree Zhuhai dehumidifiers can be found here.
According to evidence presented at a six-day trial, Chu was part owner and chief administrative officer of Gree USA Inc. and another corporation in the City of Industry, that distributed and sold to retailers for consumer purchase dehumidifiers that were made by Gree Zhuhai in China. Loh was part owner and CEO of the same two corporations.
The CPSA requires manufacturers, importers and distributors of consumer products to report “immediately” to the CPSC information that reasonably supports the conclusion that a product contains a defect that could create a substantial product hazard or creates an unreasonable risk of serious injury or death. This duty also applies to the individual directors, officers, and agents of those companies.
As early as September 2012, Chu, Loh and their companies received multiple reports that their Chinese dehumidifiers were defective, dangerous and could catch fire. They also knew that they were required to report this product safety information to the CPSC immediately. Despite their knowledge of consumer complaints of dehumidifier fires and test results showing defects in the dehumidifiers, Chu and Loh failed to disclose their dehumidifiers’ defects and hazards for at least six months while they continued to sell their products to retailers, for resale to consumers.
“It is critical to hold corporate executives accountable for misconduct,” said U.S. Attorney Martin Estrada. “The importation and sale of defective consumer products can lead to injury and death, and this verdict sends a clear message that putting profits over safety will not be tolerated.”
“Companies and their employees should immediately report known dangerous consumer products to the Consumer Product Safety Commission so the products can be recalled as soon as possible,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The Justice Department will prosecute companies and their employees when they willfully put the public in harm’s way by failing to report known dangerous products.”
“The safety of the American public is the top priority for HSI, and products like these can turn an ordinary purchase into deadly consequences.” said Special Agent in Charge Eddy Wang for Homeland Security Investigations Los Angeles. “HSI Los Angeles will continue to work diligently to ensure our supply chain is safe from products that can harm consumers.”
The jury acquitted both defendants of one count of wire fraud.
United States District Judge Dale S. Fischer scheduled a March 11, 2024 sentencing hearing, at which time Chu and Loh will face a statutory maximum sentence of five years in federal prison for each of the conspiracy and the failure to furnish information counts.
Gree USA was sentenced on April 24 to pay a $500,000 criminal fine after pleading guilty to failing to notify the CPSC about the problems with the dehumidifiers. The fine, along with provisions to pay restitution to victims, was part of a $91 million criminal resolution with Gree USA, Gree Zhuhai and another related Gree company, Hong Kong Gree Electric Appliances Sales Co. Ltd.
Homeland Security Investigations investigated this matter.
Assistant United States Attorney Joseph O. Johns of the Environmental Crimes and Consumer Protection Section and Trial Attorneys Speare Hodges, Natalie Sanders and Stephen Gripkey of the Civil Division’s Consumer Protection Branch are prosecuting this case, with the assistance of Patricia Vieira of the CPSC’s Office of General Counsel.
Two Corporate Executives Convicted in First-Ever Criminal Prosecution for Failure to Report Under Consumer Product Safety ActRead the Press Release
On Nov. 16, a Los Angeles jury convicted two corporate executives of conspiracy and failure to report information related to defective residential dehumidifiers that had been linked to multiple fires.
Simon Chu, 68, of Chino Hills, California, and Charley Loh, 65, of Arcadia, California, were convicted of conspiracy to defraud the U.S. Consumer Product Safety Commission (CPSC) and failure to furnish information as required by the Consumer Product Safety Act (CPSA).
The defective dehumidifiers sold by Chu and Loh’s two corporations were included in multiple recalls of a larger number of defective dehumidifiers manufactured by Gree Electric Appliances Inc. of Zhuhai (Gree Zhuhai) in China. According to the recall notices, more than 450 reported fires and millions of dollars in property damage have been linked to the recalled Gree Zhuhai dehumidifiers. The most recent recall announcements for the Gree Zhuhai dehumidifiers can be found here: www.cpsc.gov/Recalls/2017/Gree-Reannounces-Dehumidifier-Recall-Following-450-Fires-and-19-Million-in-Property-Damage-0 and here: https://www.cpsc.gov/Recalls/2023/Gree-Recalls-1-56-Million-Dehumidifiers-Due-to-Fire-and-Burn-Hazards-Reports-of-At-Least-23-Fires. The CPSC’s most recent warning about the recalled Gree Zhuhai dehumidifiers can be found here: www.cpsc.gov/Newsroom/News-Releases/2023/CPSC-Warning-Stop-Using-Recalled-Gree-Dehumidifiers-Due-to-Fire-Hazard-4-Deaths-May-be-Tied-to-Recalled-Units.
According to the indictment of Chu and Loh, Chu was part owner and chief administrative officer of Gree USA Inc. and another corporation in City of Industry, California, that distributed and sold to retailers for consumer purchase dehumidifiers that were made by Gree Zhuhai in China. Loh was part owner and chief executive officer of the same two corporations.
The CPSA requires manufacturers, importers and distributors of consumer products to report “immediately” to the CPSC information that reasonably supports the conclusion that a product contains a defect that could create a substantial product hazard or creates an unreasonable risk of serious injury or death. This duty also applies to the individual directors, officers and agents of those companies. The indictment alleged that as early as September 2012, Chu, Loh and their companies received multiple reports that their Chinese dehumidifiers were defective, dangerous and could catch fire. They also allegedly knew that they were required to report this product safety information to the CPSC immediately. Despite their knowledge of consumer complaints of dehumidifier fires and test results showing defects in the dehumidifiers, the indictment alleged that Chu and Loh failed to disclose their dehumidifiers’ defects and hazards for at least six months while they continued to sell their products to retailers, for resale to consumers.
“Companies and their employees should immediately report known dangerous consumer products to the Consumer Product Safety Commission so the products can be recalled as soon as possible,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The Justice Department will prosecute companies and their employees when they willfully put the public in harm’s way by failing to report known dangerous products.”
“It is critical to hold corporate executives accountable for misconduct,” said U.S. Attorney Martin Estrada for the Central District of California. “The importation and sale of defective consumer products can lead to injury and death, and this verdict sends a clear message that putting profits over safety will not be tolerated.”
“The safety of the American public is the top priority for HSI, and products like these can turn an ordinary purchase into deadly consequences.” said Special Agent in Charge Eddy Wang for Homeland Security Investigations (HSI) Los Angeles. “HSI Los Angeles will continue to work diligently to ensure our supply chain is safe from products that can harm consumers.”
The jury acquitted both defendants on one count of wire fraud.
Gree USA was sentenced in April to pay a $500,000 criminal fine after pleading guilty to failing to notify the CPSC about the problems with the dehumidifiers. The fine, along with provisions to pay restitution to victims, was part of a $91 million criminal resolution with Gree USA, Gree Zhuhai and another related Gree company, Hong Kong Gree Electric Appliances Sales Co. Ltd. This resolution is the first corporate criminal enforcement action ever brought under the CPSA.
HSI investigated the case.
Trial Attorneys Speare Hodges, Natalie Sanders and Stephen Gripkey of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Joseph Johns for the Central District of California prosecuted the case, with the assistance of Patricia Vieira of the CPSC’s Office of General Counsel.
Additional information about the Consumer Protection Branch and its enforcement efforts can be found at www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Central District of California, visit www.justice.gov/usao-cdca.
Former General Motors Manager Found Guilty of Conspiring to Receive Bribe from Foreign Parts Supplier Seeking ContractRead the Press Release
LOS ANGELES – A former manager at General Motors was found guilty by a jury today of conspiring to solicit and receive a $5 million bribe from a South Korean company in return for a promise to deliver a contract in excess of $100 million for various car parts.
Hyoung Nam So, 48, a.k.a. “Brian So,” of Irvine, was found guilty of one count of conspiracy to commit bribery.
According to evidence presented at a seven-day trial, in 2015 a foreign parts supplier paid So a total of $3.45 million in cash. As a manager and team leader at General Motors (GM), So oversaw the supply of parts used to build interiors for GM automobiles in North America. In October 2015, So promised the contract – which was to be awarded through a competitive bidding process – to the owner of the South Korean parts company – Wookyung MIT – in exchange for $5 million, which So demanded in cash.
The following month, the owner of Wookyung MIT arranged to have $1 million in cash transferred from South Korea to Los Angeles through money brokers, which an accomplice then drove to Troy, Michigan, where So was then living. The owner of Wookyung MIT flew to Detroit in late November 2015 and personally delivered the cash to So during a meeting at a hotel in Troy.
By the time So received the first $1 million installment of the bribe payment, he had already learned that Wookyung MIT was not the lowest bidder on the contract. So arranged for information to be provided to Wookyung MIT that would allow it to revise its bid. On December 8, 2015, So recommended to GM executives that the contract be awarded to Wookyung MIT, and the contract was awarded to Wookyung MIT on the same day.
So refrained from notifying Wookyung MIT that it had won the contract and continued to withhold that information until Wookyung MIT’s owner paid the remaining portion of the bribe. That occurred on December 20, 2015, when the owner of Wookyung MIT paid So $2.45 million in cash at a restaurant in Detroit – cash that also had been driven from Los Angeles to Michigan. The following day, So arranged for Wookyung MIT to be informed that it had won the contract.
Homeland Security Investigations seized $3.19 million believed to be proceeds from the bribery scheme from a private vault in Los Altos in 2017, and HSI subsequently returned the money to South Korean authorities.
The owner of Wookyung MIT was prosecuted in South Korea for offenses related to the bribery scheme.
United States District Judge André Birotte Jr. scheduled a May 24, 2024 sentencing hearing, at which time So will face a statutory maximum sentence of five years in federal prison.
The investigation into the bribery scheme was conducted by HSI’s Los Angeles El Camino Real Financial Crimes Task Force, a multi-agency task force comprised of federal and state investigators who are focused on financial crimes in Southern California. The Justice Department’s Office of International Affairs provided substantial assistance during the investigation.
Assistant United States Attorneys Jeff Mitchell and David Y. Pi of the Major Frauds Section are prosecuting this case.
Colombian Man Sentenced to 15 Years in Prison for Leading International Cocaine Trafficking Ring with Corrupt Air Traffic ControllersRead the Press Release
LOS ANGELES – The lead defendant in an indictment targeting an international drug trafficking organization was sentenced today to 180 months in federal prison for conspiring to smuggle tens of millions of dollars’ worth of cocaine by aircraft from Colombia to Mexico for distribution in the United States via the maintenance of secret airstrips and the bribery of air traffic controllers.
Jaison Dávila Amador, 57, a.k.a. “Costeño” and “María Angélica,” of Bogotá, Colombia, was sentenced by United States District Judge George H. Wu.
Dávila pleaded guilty on April 20 to one count of conspiracy to distribute cocaine for the purpose of unlawful importation. Dávila has been in federal custody since September 2021 after his extradition from Colombia.
Dávila participated in the cocaine trafficking conspiracy from at least 2017 through May 2019. Dávila and his accomplices carried out their plan by maintaining clandestine airstrips in Colombia where aircraft from Mexico would land to retrieve bulk quantities of cocaine. To facilitate the scheme, members of the conspiracy bribed air traffic controllers and law enforcement officials to ensure the flights from Mexico could enter Colombian airspace undisturbed.
The conspiracy involved at least two cocaine shipments by aircraft. The first flight successfully departed Colombia in the spring of 2017 with approximately 480 kilograms (1,058 pounds) of cocaine, though the airplane crashed in Central America, killing the pilots on board.
On November 5, 2017, an aircraft bound from Mexico entered Colombian airspace for the purpose of receiving a second cocaine shipment, but it was intercepted and forced down by the Colombian air force and then destroyed it with machine gun fire. Near a clandestine airstrip and near the airplane’s wreckage, law enforcement found approximately 515 kilograms (1,135 pounds) of cocaine, which Dávila and his co-conspirators intended to traffic by aircraft. Investigators estimate that the two cocaine shipments, if sold in the United States, would have been valued collectively at nearly $30 million.
Dávila coordinated various aspects of the conspiracy, including bribe payments to air traffic controllers, financing for the cocaine shipment, and logistical support for the aircraft that would transport the cocaine from Colombia to Mexico.
“[Dávila] was the ringleader, the principal organizer of the criminal venture,” prosecutors argued in a sentencing memorandum. “He called the shots, he directed the bribe payments, and, even after two pilots died, he pushed forward with another enormous drug shipment. Such a role speaks not only to the seriousness of [Dávila’s] conduct, but his experience. One does not accidentally find oneself leading a transnational criminal organization.”
All 13 defendants arrested and extradited to the United States in this case have pleaded guilty to participating in the international drug trafficking conspiracy.
The investigation into this drug trafficking organization was conducted by special agents with the Drug Enforcement Administration, which received substantial assistance from the Colombia National Police’s Dirección de Investigación Criminal e Interpol (DIJIN) and Colombia’s Fiscalía General de La Nación. This investigation was conducted with the support of the Organized Crime Drug Enforcement Task Force. The Justice Department’s Office of International Affairs provided substantial assistance in securing the defendants’ extradition from Colombia and Canada.
Assistant United States Attorneys Alexander B. Schwab of the Corporate and Securities Fraud Strike Force, Chelsea Norell of the Violent and Organized Crime Section, and Elia Herrera of the International Narcotics, Money Laundering, and Racketeering Section are prosecuting this case.
California Skilled Nursing Facilities, Owner and Management Company Agree to $45.6 Million Consent Judgment to Settle Allegations of Kickbacks to Referring PhysiciansRead the Press Release
LOS ANGELES – Prema Thekkek, her Vacaville-based management company, Paksn Inc., and six skilled nursing facilities (SNFs) owned by Thekkek and/or operated by Paksn have agreed to enter into a $45.6 million consent judgment to resolve allegations that they submitted or caused the submission of false claims to Medicare by paying kickbacks to physicians to induce patient referrals.
The six settling SNFs are Kayal Inc. (doing business as Bay Point Healthcare Center), Nadhi Inc. (doing business as Gateway Care & Rehabilitation Center), Oakrheem Inc. (doing business as Hayward Convalescent Hospital), Bayview Care Inc. (doing business as Hilltop Care and Rehabilitation Center), Aakash Inc. (doing business as Park Central Care & Rehabilitation Center) and Nasaky Inc. (doing business as Yuba Skilled Nursing Center) (collectively the SNF Defendants).
The Anti-Kickback Statute prohibits offering or paying remuneration to induce the referral of items or services covered by Medicare, Medicaid and other federally funded health care programs. It is intended to ensure that medical decision-making is based on the best interests of patients and not compromised by improper financial incentives to providers.
From 2009 to 2021, the SNF Defendants, under the direction and control of Thekkek and Paksn, systematically entered into medical directorship agreements with physicians that purported to provide compensation for administrative services, but in reality were vehicles for the payment of kickbacks to induce the physicians to refer patients to the six SNFs. Specifically, the defendants hired physicians who promised in advance to refer a large number of patients to the SNFs, paid physicians in proportion to the number of their expected referrals and terminated physicians who did not refer enough patients.
On one occasion, a Paksn employee told Thekkek that two physicians were being hired because “they are promising at least 10 patients for $2000 per month,” to which Thekkek responded, “good job. Make sure they give you patients everyday. [W]e can also expand to other buildings with them, if possible.” On another occasion, an employee informed Thekkek that the defendants previously had paid a certain doctor “$1500 each month and he only send [sic] us 2 patients[,] so we didn’t pay him anything from Jan[uary] onwards.” On a third occasion, Thekkek rejected a proposed stipend for a new medical director, explaining that the defendants had paid the previous medical director that amount because “we were getting admission[s] from him,” whereas she did not expect the new medical director to refer many patients. More generally, Thekkek complained that if her employees did not pay medical directors promptly every month, “[t]hese doctors will not give us patients.”
“The administrators and beneficiaries of the Medicare Program expect that providers will make decisions based on sound medical judgment, not their personal self-interest” said United States Attorney Martin Estrada. “As this case demonstrates, our office will take decisive action to address allegations that medical providers are paying or receiving improper financial benefits that could impact care provided to patients.”
“Kickbacks can impair the independence of physician decision-making and waste taxpayer dollars,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department is committed to preventing illegal financial relationships that undermine the integrity of our public health care programs.”
“Kickbacks impose hidden costs on the health care system and compromise medical decision-making,” said Special Agent in Charge Timothy B. DeFrancesca of the Department of Health and Human Services Office of the Inspector General (HHS-OIG). “Working tirelessly with our law enforcement partners, HHS-OIG will continue to combat the waste of valuable taxpayer dollars and protect the integrity of federal health care programs.”
Under the settlement announced today, in addition to entering into a $45,645,327.25 consent judgment, the defendants will make scheduled payments to the United States of at least $385,000 over the next five years. That payment schedule was negotiated based on the defendants’ lack of ability to pay.
The settlement stems from a whistleblower complaint filed in 2015 by Paksn’s former Vice President of Operations and Chief Operating Officer, Trilochan Singh, pursuant to the qui tam provisions of the False Claims Act, which permit private persons to bring a lawsuit on behalf of the government and to share in the proceeds of the suit. The Act also permits the government to intervene and take over the lawsuit, as it did in this case as to some of Singh’s allegations.
In addition to resolving their False Claims Act liability, the defendants have entered into a five-year corporate integrity agreement with the HHS-OIG which requires, among other compliance obligations, an Independent Review Organization’s review of their physician relationships.
The United States’ intervention and settlement in this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to HHS, at 800 HHS TIPS (800-447-8477).
HHS-OIG investigated the case.
The matter was handled by Assistant United States Attorney Karen Y. Paik of the Civil Division’s Civil Fraud Section, investigator Eileen Sofre, and auditor John Powers, of the U.S. Attorney’s Office for the Central District of California and by attorneys Matthew Oster, Lindsey Roberts, Jessica Sarkis and Rohith Srinivas, and senior financial analyst Karen Sharp, of the Justice Department Civil Division’s Fraud Section.
The case is captioned United States of America ex rel. Trilochan Singh v. Paksn Inc. et al., No. 15 cv-09064 (C.D. Cal.).
The claims resolved by this settlement are allegations only. There has been no determination of liability.
California Skilled Nursing Facilities, Owner and Management Company Agree to $45.6 Million Consent Judgement to Settle Allegations of Kickbacks to Referring PhysiciansRead the Press Release
Prema Thekkek, her management company, Paksn Inc., and six skilled nursing facilities (SNFs) owned by Thekkek and/or operated by Paksn have agreed to enter into a $45.6 million consent judgment to resolve allegations that they submitted or caused the submission of false claims to Medicare by paying kickbacks to physicians to induce patient referrals. The six settling SNFs are Kayal Inc. (doing business as Bay Point Healthcare Center), Nadhi Inc. (doing business as Gateway Care & Rehabilitation Center), Oakrheem Inc. (doing business as Hayward Convalescent Hospital), Bayview Care Inc. (doing business as Hilltop Care and Rehabilitation Center), Aakash Inc. (doing business as Park Central Care & Rehabilitation Center) and Nasaky Inc. (doing business as Yuba Skilled Nursing Center) (collectively the SNF Defendants).
The Anti‑Kickback Statute prohibits offering or paying remuneration to induce the referral of items or services covered by Medicare, Medicaid and other federally funded health care programs. It is intended to ensure that medical decision-making is based on the best interests of patients and not compromised by improper financial incentives to providers.
From 2009 to 2021, the SNF Defendants, under the direction and control of Thekkek and Paksn, systematically entered into medical directorship agreements with physicians that purported to provide compensation for administrative services, but in reality were vehicles for the payment of kickbacks to induce the physicians to refer patients to the six SNFs. Specifically, the defendants hired physicians who promised in advance to refer a large number of patients to the SNFs, paid physicians in proportion to the number of their expected referrals and terminated physicians who did not refer enough patients.
On one occasion, a Paksn employee told Thekkek that two physicians were being hired because “they are promising at least 10 patients for $2000 per month,” to which Thekkek responded, “good job. Make sure they give you patients everyday. [W]e can also expand to other buildings with them, if possible.” On another occasion, an employee informed Thekkek that the defendants previously had paid a certain doctor “$1500 each month and he only send [sic] us 2 patients[,] so we didn’t pay him anything from Jan[uary] onwards.” On a third occasion, Thekkek rejected a proposed stipend for a new medical director, explaining that the defendants had paid the previous medical director that amount because “we were getting admission[s] from him,” whereas she did not expect the new medical director to refer many patients. More generally, Thekkek complained that if her employees did not pay medical directors promptly every month, “[t]hese doctors will not give us patients.”
“Kickbacks can impair the independence of physician decision-making and waste taxpayer dollars,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department is committed to preventing illegal financial relationships that undermine the integrity of our public health care programs.”
“The administrators and beneficiaries of the Medicare Program expect that providers will make decisions based on sound medical judgment, not their personal self-interest” said U.S. Attorney Martin Estrada for the Central District of California. “As this case demonstrates, our office will take decisive action to address allegations that medical providers are paying or receiving improper financial benefits that could impact care provided to patients.”
“Kickbacks impose hidden costs on the health care system and compromise medical decision-making,” said Special Agent in Charge Timothy B. DeFrancesca of the Department of Health and Human Services Office of the Inspector General (HHS-OIG). “Working tirelessly with our law enforcement partners, HHS-OIG will continue to combat the waste of valuable taxpayer dollars and protect the integrity of federal health care programs.”
Under the settlement announced today, in addition to entering into a $45,645,327.25 consent judgment, the defendants will make scheduled payments to the United States of at least $385,000 over the next five years. That payment schedule was negotiated based on the defendants’ lack of ability to pay.
The settlement stems from a whistleblower complaint filed in 2015 by Paksn’s former Vice President of Operations and Chief Operating Officer, Trilochan Singh, pursuant to the qui tam provisions of the False Claims Act, which permit private persons to bring a lawsuit on behalf of the government and to share in the proceeds of the suit. The Act also permits the government to intervene and take over the lawsuit, as it did in this case as to some of Singh’s allegations.
In addition to resolving their False Claims Act liability, the defendants have entered into a five-year corporate integrity agreement with the HHS-OIG which requires, among other compliance obligations, an Independent Review Organization’s review of their physician relationships.
The United States’ intervention and settlement in this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to HHS, at 800‑HHS‑TIPS (800-447-8477).
HHS-OIG investigated the case.
The matter was handled by attorneys Matthew Oster, Lindsey Roberts, Jessica Sarkis and Rohith Srinivas, and senior financial analyst Karen Sharp, of the Civil Division’s Fraud Section, and Assistant U.S. Attorneys Kent Kawakami and Karen Paik, and auditor John Powers, for the Central District of California.
The case is captioned United States of America ex rel. Trilochan Singh v. Paksn, Inc. et al., No. 15‑cv-09064 (C.D. Cal.).
The claims resolved by this settlement are allegations only. There has been no determination of liability.
SettlementFederal Grand Jury Indicts 23 MS-13 Members and Associates for Alleged Widespread Methamphetamine TraffickingRead the Press Release
LOS ANGELES – Federal and local law enforcement officials this morning announced the unsealing of a federal grand jury indictment charging 23 members and associates of the Mara Salvatrucha-13 (MS-13) transnational street gang who allegedly trafficked pound quantities of methamphetamine and illegally possessed ammunition found in a “ghost gun.”
Today’s takedown resulted in the arrests of 17 MS-13 members and associates who are expected to be arraigned on the 36-count indictment this afternoon in United States District Court in downtown Los Angeles. Four of the federal defendants were already in state custody, and authorities continue to search for two defendants named in the indictment.
As part of this morning’s takedown, law enforcement seized multiple pounds of suspected methamphetamine, fentanyl and cocaine. Authorities this morning also seized nine firearms and approximately $94,000 in cash – with about $50,000 seized from one residence.
“MS-13, one of the largest and most violent gangs in North America, perpetuates a cycle of violence and destruction, the victims of which are most often immigrants from Central America and Mexico and other Latinos,” said United States Attorney Martin Estrada. “The widespread methamphetamine trafficking conspiracy we have charged reveals that drug-trafficking is the primary method MS-13 uses to finance its modus operandi of murder and mayhem.”
“MS-13 members, allegedly at the direction of an incarcerated Mexican Mafia member, were able to wreak havoc on communities in Los Angeles,” said Donald Alway, the Assistant Director of the FBI’s Los Angeles Field Office. “This case is just the latest joint operation targeting MS-13’s transnational criminal enterprise as we continue to make an impact on their ability to intimidate and threaten law abiding citizens in and around Los Angeles.”
“The Los Angeles Police Department appreciates the partnership, commitment and dedication from our partner law enforcement agencies,” said Los Angeles Police Chief Michel Moore. “These arrests will have a meaningful and lasting impact on crime in Los Angeles by taking the leadership and the most violent of these gang members off the street.”
“These street gangs use the sales of illicit drugs to further their criminal enterprise and victimize our communities,” said Los Angeles County Sheriff Robert Luna. “Through our collaboration with our federal and local law enforcement partners, the Los Angeles County Sheriff’s Department was able to assist in the takedown of several violent MS-13 gang members and associates that use fear and intimidation to threaten public safety.”
“Transnational street tangs that prey on our communities with drugs and violence will always be a priority of HSI and their partners,” said Homeland Security Investigations Special Agent in Charge Eddy Wang. “This collaborative takedown shows the resolve of the law enforcement community to make our streets safer.”
Mara Salvatrucha was formed in Los Angeles in the mid-1980s, and the street gang is now comprised of tens of thousands of individuals in at least 10 states and several Central American countries, notably El Salvador. In the mid-1990s, Mara Salvatrucha became associated with the Mexican Mafia and added the number 13 to its name (“M” is the 13th letter of the Spanish and English alphabets).
This case focuses on MS-13 in Los Angeles and its efforts to traffic methamphetamine in their “territory.” The indictment returned November 8 and unsealed today alleges that an imprisoned MS-13 member who also was a member of the Mexican Mafia controlled MS-13 Los Angeles by imposing a rule on all the gang’s Los Angeles-area cliques that required them to buy methamphetamine from Herlyn Barrientos, 46, a.k.a. “Doctorazo,” of Huntington Park, and others. Once the various cliques redistributed the methamphetamine, some profits from that distribution flowed to the imprisoned MS-13 member.
During the period of July 2021 to August 2023, the MS-13 inmate allegedly first designated Pavel Hurtado, 36, a.k.a. “Temper,” of Oxnard, and, later, Eli Grijalva, 34, a.k.a. “Skinny,” of South Los Angeles, to be the overall shot caller for MS-13 Los Angeles. In this role, Hurtado and Grijalva – the indictment’s top two defendants – allegedly oversaw MS-13’s drug trafficking activities and communicated with the MS-13 inmate to coordinate drug trafficking activities for the gang.
MS-13 members used violence and intimidation to control narcotics trafficking in territories controlled by the gang and narcotics sales comprised most of the revenue generated by MS-13. To sell narcotics within MS-13’s territory, one must either be an MS-13 member, an associate, or otherwise have permission from – and pay extortionate rent payments to – MS-13.
Each MS-13 member and associate, along with wholesale narcotics suppliers and street drug dealers, would receive authorization from the shot callers to sell drugs within individual clique territories, and in return, would be required to pay a portion of the drug proceeds, known as a “tax,” to his or her respective MS-13 shot caller for the areas in which narcotics were trafficked.
Agustín Aquino-Martínez, 46, a.k.a. “Chino,” of Lancaster, allegedly acted as treasurer for MS-13 Los Angeles, coordinated the collection of the drug proceeds and “taxes” from each MS-13 Los Angeles clique and was responsible for forwarding those profits and taxes to the MS-13 inmate.
The indictment charges all 23 defendants with one count of conspiracy to possess with intent to distribute and distribute methamphetamine. Thirty-four of the indictment’s 36 counts charge individual MS-13 members and associates – including Hurtado, Grijalva and Barrientos – with distribution of methamphetamine. One of the indictment’s counts accuses an individual gang member of being a felon unlawfully possessing ammunition inside a “ghost gun.”
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, each defendant charged with conspiracy to distribute methamphetamine would face a statutory maximum sentence of life in federal prison. The distribution of methamphetamine count is punishable by a statutory maximum of life in federal prison. The illegal possession of ammunition count carries a statutory maximum sentence of 10 years in federal prison.
The FBI’s Los Angeles Metropolitan Task Force on Violent Gangs is investigating this matter. This task force is comprised of the FBI, the Los Angeles Police Department, the Los Angeles County Sheriff’s Department, and Homeland Security Investigations. IRS Criminal Investigation and the California Department of Corrections and Rehabilitation provided substantial assistance.
Assistant United States Attorneys Shawn T. Andrews of the Terrorism and Export Crimes Section and Hava Mirell of the Violent and Organized Crime Section are prosecuting this 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 https://www.justice.gov/OCDETF.
Agoura Hills Property Developer Sentenced to Nearly 3½ Years in Prison for Lying on Bankruptcy Petition and Filing False Federal Tax ReturnsRead the Press Release
LOS ANGELES – An Agoura Hills real estate developer was sentenced today to 41 months in federal prison for failing to disclose on a bankruptcy petition that he had earned nearly $2.3 million in income and for failing to report almost $6.9 million in income on his tax returns.
Mark Handel, 69, was sentenced by United States District Judge Otis D. Wright II, who also fined Handel $20,000 and ordered him to forfeit approximately $3,545,712, which represents the proceeds of the sale of real estate in Alameda County. Judge Wright also ordered Handel to pay the IRS approximately $1,618,836 in outstanding tax liabilities, including penalties and interest.
Handel pleaded guilty on February 23 to one count of making a false statement in bankruptcy and one count of subscribing to a false tax return.
Prior to today’s hearing and pursuant to his plea agreement, Handel paid the IRS approximately $1,618,836 in outstanding tax liabilities, including penalties and interest.
In April 2015, Handel filed a bankruptcy petition in Los Angeles in which he claimed under penalty of perjury he had no income from 2013 until April 2015. In fact, he earned approximately $2,263,221 in income through DTMM Construction Inc., his West Los Angeles-based real estate development company, which, according to court documents, stood for “Don’t Touch My Money.” To further conceal his income from the bankruptcy court and creditors, Handel arranged for DTMM to be registered in his wife’s name but used the company to deposit the profits from his own work as a real estate developer and to pay for his and his family’s living expenses.
Handel concealed his income from his creditors by depositing it into DTMM’s accounts. Among the assets Handel hid from creditors included his interest in real estate in Livermore, California, which later was sold for approximately $3,545,712, the proceeds of which he agreed to forfeit.
In October 2016, Handel signed and filed a false federal income tax return for the tax year 2015 that failed to disclose approximately $1,096,175 in additional income. For the tax years 2010 to 2017, Handel failed to report a total of approximately $6,886,877 of income on his federal tax returns.
Handel also falsely reported a net operating loss of $7,259,119 on his 2017 federal income tax return as well as underreported his income on his 2018 tax return by $1,411,050 and admitted to failing to pay $460,408 in additional tax.
“[Handel’s] crimes were not born out of desperation, nor done on a whim without much thought,” prosecutors argued in a sentencing memorandum. “His crimes required planning, calculation, and an almost insatiable drive to break the law time and time again. Indeed, given the brazenness of his conduct, including bragging to others that his company stood for ‘Don’t Touch My Money,’ [Handel] believed he was above the law.”
IRS Criminal Investigation and the FBI investigated this matter with assistance from the Office of the United States Trustee.
Assistant United States Attorney Thomas F. Rybarczyk of the Public Corruption and Civil Rights Section prosecuted this case.
Former Malibu Resident Sentenced to More Than 15 Years in Prison for Conning Investors with Bogus Promises of Discounted Alibaba IPO SharesRead the Press Release
LOS ANGELES – A former Malibu resident was sentenced today to 188 months in federal prison for defrauding several individuals out of more than $3 million with bogus claims that he had access to stock shares of Alibaba prior to its initial public offering.
Frank Harold Rosenthal, 48, formerly of Malibu but most recently of New York City, was sentenced by United States District Judge Fernando L. Aenlle-Rocha, who also ordered him to pay $1,182,500 in restitution. While imposing sentence at today’s hearing, Judge Aenlle-Rocha called Rosenthal an “incorrigible, serial liar.”
Rosenthal pleaded guilty on June 30 to two counts of wire fraud. He has been in federal custody since that day.
From November 2013 to April 2015, Rosenthal falsely claimed to have inside connections at Goldman Sachs that would provide him with special access to purchase shares of Alibaba, a Chinese e-commerce company, at a discount before its initial public offering.
Rosenthal used a middleman to carry out his scheme, lying to the middleman and pressuring him to solicit funds from his relatives and acquaintances for the purportedly lucrative investment opportunity.
To lend legitimacy to his fraudulent scheme, Rosenthal negotiated and drafted loan agreements and promissory notes with the victims that promised the victims significant returns on their loans and investments.
After obtaining their money, Rosenthal lulled his victims by, among other things, falsely stating that the Alibaba shares he supposedly would purchase with their money were locked up and could not be immediately sold.
Instead of using victims’ funds to purchase shares of Alibaba, Rosenthal used the money to support his lavish lifestyle, which included the $16,000 monthly rent of a Malibu home. To avoid detection and forestall threatened legal action by the victims, Rosenthal used some of the funds received from early victims to pay off later ones in a Ponzi-style arrangement.
Rosenthal “carefully crafted a ruse to steal money” using “clever inducements” that made it difficult for victims to discover the fraud and insulated [Rosenthal from] having to regularly deal with his victims by abusing the reputation of good character and business judgment of the victims’ trusted friend and relative” to perpetrate the fraud, prosecutors argued in a sentencing memorandum. “[Rosenthal] enhanced the attractiveness of his scheme by making up friends in high places, complete with fake emails, to create the further appearance of exclusivity and success.”
IRS Criminal Investigation investigated this matter.
Assistant United States Attorneys Steven M. Arkow and Mark Aveis of the Major Frauds Section and Trial Attorney Sara E. Henderson of U.S. Department of Justice’s Tax Division prosecuted this case.
Federal Grand Jury Charges Former Army Private with Four Additional Felony Child Exploitation ChargesRead the Press Release
LOS ANGELES – A former Army private based at Fort Irwin in San Bernardino County is scheduled to be arraigned today on federal charges alleging, in part, that he knowingly produced child sexual abuse material (CSAM) featuring a 14-year-old girl.
Parker William White, 23, of Johnsonville, New York, who first was indicted on March 10 with one count of possession of child pornography, was charged in a superseding indictment with four additional felony child exploitation charges.
White is now charged with five felonies: one count of production of child pornography, three counts of receipt of child pornography, and one count of possession of child pornography.
White was arrested on February 24 pursuant to a criminal complaint that alleges White used Instagram and other social media platforms to find minor “girlfriends” as young as 13. White would groom these minor girls by telling them that he would treat them like “queens,” according to the complaint’s affidavit.
A March 14, 2024 trial date previously has been scheduled in this matter. White is currently in federal custody and has been ordered jailed without bond.
The superseding indictment returned on Tuesday alleges that in November 2021, White knowingly induced a 14-year-old girl to engage in sexually explicit conduct for the purpose of producing a visual depiction of such conduct. The visual depiction was produced using materials that had been mailed, shipped, and transported in and affecting interstate commerce.
The indictment further alleges that on three occasions in November 2021 and January 2022, White knowingly received child sexual abuse material that had been transported through interstate commerce, including by computer.
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, White would face a mandatory minimum of 15 years in federal prison and a statutory maximum sentence of 30 years in federal prison for the production of child pornography count, a mandatory minimum of five years in federal prison and up to 20 years’ imprisonment for each receipt of child pornography count, and a statutory maximum sentence of 10 years in federal prison for the child pornography possession count.
Homeland Security Investigations and the United States Army Criminal Investigation Division investigated this case.
Assistant United States Attorney Lyndsi Allsop of the Violent and Organized Crime Section is prosecuting this case.
Founder of Beverly Hills ‘Gentlemen Timepieces’ Consignment Store Charged with Conning Victims in Luxury Watch Ponzi-Type SchemeRead the Press Release
LOS ANGELES – A Los Angeles man who previously operated a business in Beverly Hills known as “Gentlemen Timepieces” appeared in court this afternoon after his arrest Tuesday by FBI agents on charges of defrauding customers of his luxury watch consignment business.
Anthony Farrer, 35, who until recently lived in downtown Los Angeles, was charged in a federal criminal complaint filed Monday with wire fraud, a felony that carries a statutory maximum sentence of 20 years in federal prison.
Farrer, who also was known as “The Timepiece Gentleman,” was arrested without incident at a storage facility in Venice and was held in federal custody overnight. He made his initial appearance this afternoon in United States District Court, and an arraignment was scheduled for December 14. A detention hearing is scheduled for Thursday.
According to an affidavit filed with the complaint that was unsealed today, Farrer founded the company in Texas in 2017 and opened a location in Beverly Hills in 2022. Farrer used this business to connect purchasers and sellers of high-end watches. He would typically collect a watch from an individual and have them sign a consignment agreement that stipulated he would collect a commission from the sale, typically 5%.
The complaint alleges that Farrer defrauded victims beginning in late 2022 until the summer of 2023, when he promised customers he would sell their luxury watches on consignment. Rather than remitting funds back to the customers less the commission, he kept the proceeds for himself. Farrer lived in a luxury rental property and was known to drive a Lamborghini and Ducati motorcycles. He traveled frequently to, and engaged in gambling in, Las Vegas, according to the complaint.
Farrer induced victims into wiring funds for the purchase of luxury watches and, instead of purchasing the agreed upon watch, he would send them a different watch, the complaint alleges. In one case, a victim received a Rolex watch from Farrer in lieu of money Farrer owed, but the Rolex belonged to another victim who had provided the watch to Farrer to sell on consignment and did not authorize Farrer to use the watch as payment for his debts to other victims.
The complaint further alleges that Farrer operated a scheme in a similar manner to a Ponzi scheme and would lull victims into a sense of security by engaging in smaller successful transactions prior to requesting or engaging in significantly larger transactions.
Multiple victims contacted law enforcement to report that they wired funds to Farrer for the purchase of a watch, or mailed him a watch to consign for sale, but were never paid for the watch or never received their watch back. To date, law enforcement estimates that victim losses currently total approximately $3 million. The investigation is ongoing and law enforcement is in the process of identifying additional victims.
Farrer apparently abandoned the Beverly Hills store in August 2023 and began posting about his various travel throughout the United States on social media. As recently as October 2023, Farrer continued to advertise watches for sale on his social media platforms, according to the complaint.
A criminal complaint contains allegations. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The FBI, IRS Criminal Investigation, and the Beverly Hills Police Department are investigating this matter.
Assistant United States Attorney Joshua O. Mausner of the Violent and Organized Crime Section is prosecuting this case.
Downey Tax Preparation Company Owner Sentenced to 2½ Years in Prison for Knowingly Preparing Hundreds of False Tax ReturnsRead the Press Release
LOS ANGELES – An Orange County man was sentenced today to 30 months in federal prison for knowingly preparing nearly 400 fraudulent federal income tax returns that caused a loss of more than $750,000 to the IRS by inflating his clients’ tax refunds without their knowledge and then pocketing the difference between the clients’ true refunds and the inflated ones.
Raudel Sandoval, 48, of Placentia, was sentenced by United States District Judge Sherilyn Peace Garnett, who also ordered him to pay $758,550 in restitution.
Sandoval pleaded guilty on March 22 to two counts of aiding and assisting in the preparation of false and fraudulent tax returns.
Sandoval is a licensed tax preparer and owns RSE Sandoval España Inc., a Downey-based tax preparation company. Sandoval willfully prepared hundreds of false federal and state income tax returns for clients for the tax years 2015 through 2018. On these returns, he claimed false or inflated amounts of the child tax credit, business losses, short-term capital losses and other items to which the taxpayer clients were not entitled.
He falsified the tax returns with deductions and credits that his clients did not incur or had not informed him about. Sandoval also inflated the amounts of deductions and credits that his clients were entitled to claim.
When he finished preparing a tax return, Sandoval gave his clients copies of their returns that were true and correct, but falsely told them that he would file their true-and-correct copies with the IRS on their behalf.
Then, Sandoval inflated his clients’ returns with false and fraudulent deductions and credits and filed these false tax returns with the IRS. The false returns showed a larger refund than on the true-and-correct copies Sandoval had given to his clients.
Sandoval then directed the inflated refunds to himself. He did so by changing the bank account and routing numbers on the filed returns to a bank account he controlled. Sandoval controlled more than 100 bank accounts with several different banks and opened many of the accounts in his clients’ names. But he was the accounts’ only authorized signor. Several of the Sandoval-owned bank accounts had the name “Federal Tax Refund Processing.”
He directed the IRS to send the inflated refunds through a third-party refund processor to be deposited into an account he controlled. Other times, Sandoval caused the IRS to mail a check of the inflated refund to his business address. He then would deposit the check into one of his accounts.
After receiving the inflated refund, Sandoval transferred a portion of it – the amount his clients were expecting to receive based on the true-and-correct tax return copies – to one of his “Federal Tax Refund Processing” accounts. Sandoval then transferred that money to his clients’ bank accounts, causing them to believe their refunds were from a legitimate government source.
Sandoval kept the difference between the true refund and the inflated refund.
For the tax years 2015 through 2018, Sandoval willfully understated his clients’ tax liabilities and caused a loss of $758,550 to the IRS, caused by the filing of at least 389 fraudulent income tax returns.
“[Sandoval] enriched himself while depriving the United States Treasury of monies by artificially inflating his clients’ refunds,” prosecutors argued in a sentencing memorandum. “[Sandoval] needlessly exposed his clients to a risk that the IRS would hold them accountable for the loss caused by the inflated refund amount. In addition, [Sandoval] charged his clients to prepare the returns, of which he had hundreds, to then use their returns as a vehicle for crime.”
IRS Criminal Investigation investigated this matter.
Assistant United States Attorney Valerie L. Makarewicz of the Major Frauds Section prosecuted this case.
As the tax season continues, taxpayers seeking a return preparer should remain vigilant against unscrupulous tax preparers. The IRS offers tips on how to accurately file returns and how to choose a tax return preparer, as well as steps taxpayers can take to get a jumpstart on filing.
Taxpayers seeking assistance can access the IRS’s free directory of federal tax preparers. The IRS also has programs offering free basic return preparation for qualifying seniors and individuals with low to moderate income. In addition, IRS Free File, a public-private partnership, offers free online tax preparation and filing options on IRS partner websites for individuals whose adjusted gross income is under $72,000. For individuals whose income is over that threshold, IRS Free File offers electronical federal tax forms that can be filled out and filed online for free.
3 Arrested for Allegedly Running Sex Trafficking Operation That Victimized Teenage Girls at Redlands Massage ParlorRead the Press Release
RIVERSIDE, California – Three defendants who allegedly trafficked teenage girls to engage in commercial sexual activities at a San Bernardino County massage parlor have been arrested on a federal grand jury indictment, the Justice Department announced today.
Law enforcement have arrested the following defendants who are charged in the indictment with one count of conspiracy and two counts of sex trafficking of a minor:
- Ji Ryang Chae, 54, a.k.a. “Chae Yu” and “BB,” who was the manager of Ace Care Massage Parlor in Redlands and currently resides in Colorado Springs, Colorado;
- Jasmine Dakota Beverly, 24, a.k.a. “Bbybegirl,” the manager-in-training at Ace Care, formerly of Redlands but currently resides in Costa Mesa; and
- Earnest Akindele Teamer, 26, a.k.a. “Scooby,” “Splash,” and “$koobystacks,” who acted as a recruiter for Ace Care, of Redlands.
Chae was arrested on November 3 and made her initial appearance yesterday in United States District Court in Denver. Teamer, who was arrested on July 27, has been ordered jailed without bond and remains in federal custody. Beverly was arrested on August 3 and is free on $15,000 bond.
Beverly and Teamer have pleaded not guilty to the charges against them and June 18, 2024 trial date has been scheduled in this case. Chae’s arraignment is expected in United States District Court in Riverside in the coming weeks.
According to an indictment, from at least March 2022 to April 2022, Beverly and Teamer recruited girls under the age of 18 years old to work as commercial sex workers at Ace Care. Beverly allegedly would provide transportation to Minor Victim 1 – a 15-year-old girl – and Minor Victim 2 – a 14-year-old girl.
As recruiters, Beverly allegedly took $10 from Minor Victim 1 for each customer the girl saw while Teamer allegedly took $200 per week from the victim.
Chae, as Ace Care’s manager, allegedly would require workers to pay “rent” in return for condoms, cleaning supplies, and a place to work, and she also would take approximately $2,000 per month for “rent” from Minor Victim 1.
Teamer, who acted as a “pimp” for Minor Victim 2, would require her to give him some or all the proceeds from her work as a commercial sex worker, the indictment alleges.
In a separate indictment, Teamer is charged with one count of transportation of a minor with intent to engage in criminal sexual activity, one count of production of child pornography, one count of distribution of child pornography, and two counts of receipt of child pornography. Teamer has pleaded not guilty to these charges and has a March 5, 2024 trial date scheduled in that case.
Teamer allegedly produced child sexual abuse material, namely a video of himself engaging in sexual activity with a 15-year-old girl.
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 on all counts, the defendants would face a statutory maximum sentence of life in federal prison. Chae and Beverly would face a mandatory minimum sentence of 10 years in federal prison. Teamer would face a mandatory minimum sentence of 15 years in federal prison.
Homeland Security Investigations and the Redlands Police Department are investigating this matter.
Assistant United States Attorney Tritia L. Yuen of the Riverside Branch Office is prosecuting these cases.
Former New York Lawyer Sentenced to Nearly 3 Years in Prison for Accepting $2.2 Million Kickback in LADWP Corrupt Litigation SchemeRead the Press Release
LOS ANGELES – A disbarred New York City lawyer, who simultaneously represented the Los Angeles Department of Water and Power (LADWP) and a ratepayer suing the City of Los Angeles in the wake of an LADWP billing debacle, was sentenced today to 33 months in federal prison for accepting a kickback of nearly $2.2 million for causing another lawyer to purportedly represent his ratepayer client in a collusive lawsuit against the city, which enabled the city to settle the case on favorable terms.
Paul O. Paradis, 60, of Scottsdale, Arizona, who once ran the Manhattan-based Paradis Law Group, was sentenced by United States District Judge Stanley Blumenfeld Jr.
At today’s hearing, Judge Blumenfeld said Paradis intentionally placed himself “at the center of sophisticated and greedy schemes of corruption that wreaked havoc on individuals and institutions alike.” Judge Blumenfeld further explained that Paradis was motivated by “pure greed” and said the level of corruption in the case was “mind-boggling.”
Paradis pleaded guilty in January 2022 to one count of bribery.
In 2013, LADWP implemented a new billing system that it had procured from an outside vendor, PricewaterhouseCoopers (PwC). After LADWP rolled out the new system, hundreds of thousands of LADWP ratepayers received massively inflated and otherwise inaccurate utility bills. Soon afterward, the city and LADWP faced multiple class-action lawsuits filed by ratepayers alleging harm resulting from the faulty billing system.
In December 2014, the Los Angeles City Attorney’s Office retained Paradis as special counsel to represent the city in a lawsuit against PwC. When Paradis began representing the city as special counsel in the PwC litigation, the Los Angeles City Attorney’s Office was aware that he was simultaneously representing Antwon Jones, a ratepayer who had a claim against LADWP arising from billing overcharges. Jones was unaware that his lawyer, Paradis, also represented his intended adversary.
At a February 2015 meeting with at least one senior member of the City Attorney’s Office, Paradis was authorized and directed to find counsel that would be friendly to the city to supposedly represent Jones in a class-action lawsuit against the city. Under this so-called “white knight” strategy, the forthcoming Jones v. City of Los Angeles lawsuit would be used as a vehicle to settle all existing LADWP-billing-related claims against the city on the city’s desired terms.
Soon thereafter, Paradis recruited an Ohio lawyer to nominally represent Jones in the white knight lawsuit with the understanding that Paradis would do virtually all the work. In exchange, and unbeknownst to the city, Paradis and the Ohio lawyer agreed that Paradis would receive 20% of the Ohio lawyer’s fees in the Jones v. City case as a secret kickback.
In July 2017, a Los Angeles Superior Court judge issued a final approval of the $67 million settlement agreed to by the parties in Jones v. City, including approximately $19 million in plaintiffs’ attorney fees, of which the Ohio lawyer and his law firm obtained approximately $10.3 million. The Ohio lawyer then secretly paid $2,175,000 to Paradis, disguising the kickback as a real estate investment, and funneling it through shell companies that Paradis and the Ohio lawyer had set up exclusively for the purpose of transmitting and concealing the illicit payment.
Paradis also admitted bribing LADWP’s general manager, David H. Wright, to obtain a lucrative $30 million no-bid contract in June 2017 to remediate LADWP’s billing system. In another secret deal, Wright lobbied the LADWP Board to approve the contract for Aventador Utility Solutions, a downtown Los Angeles-based cyber services company formed by Paradis, in exchange for Paradis’ promise to make Wright Aventador’s future CEO and give him a $1 million annual salary and luxury car.
At the time it approved the no-bid contract, the LADWP Board was not informed that Paradis had ghostwritten a May 2017 independent monitor report on the Jones v. City settlement on which LADWP based its decision. The Paradis-written report claimed that LADWP could not meet its obligations under the Jones v. City settlement agreement unless it contracted with Aventador. The LADWP Board also was unaware that Wright was advocating for the award of the $30 million no-bid contract to Paradis’s company because he had been bribed.
Paradis pled guilty to a cooperation plea agreement that requires Paradis to provide information to federal investigators as well as to the State Bar of California, which is conducting its own disciplinary investigation related to the collusive litigation scheme, in exchange for potential sentencing consideration.
Federal prosecutors said Paradis’ cooperation helped to secure the guilty pleas of Wright, who also pleaded guilty to bribery, Thomas H. Peters, the former litigation chief of the City Attorney’s Office, who pleaded guilty to extortion in connection with covering up the collusive litigation, and David F. Alexander, LADWP’s former Chief Information Security Officer, who pleaded guilty to lying to the FBI about bribery-related conversations with Paradis.
In court papers and at today’s hearing, federal prosecutors recommended a sentence of 18 months’ imprisonment based on Paradis’ cooperation with the federal and State Bar of California investigations. Judge Blumenfeld acknowledged the basis for the government’s recommendation but stated a higher sentence was necessary to account for Paradis’ conduct, which Judge Blumenfeld said, “shattered public confidence in the government and legal profession.”
Wright and Alexander are serving federal prison sentences of six years and four years, respectively, after pleading guilty to felony offenses in this case. Peters was sentenced to probation.
The FBI investigated this matter.
Assistant United States Attorneys J. Jamari Buxton and Susan S. Har of the Public Corruption and Civil Rights Section prosecuted this case.
Federal Grand Jury Indicts 2 for Allegedly Supplying Fentanyl and Other Narcotics Sold Through Darknet to Customers in All 50 StatesRead the Press Release
LOS ANGELES – A federal grand jury has indicted two men who allegedly supplied fentanyl-laced pills and methamphetamine for a drug trafficking organization that used the darknet and encrypted messaging applications to sell narcotics to thousands of customers in all 50 states across the country, the Justice Department announced today.
The two-count indictment returned October 25 charges Omar Navia, 38, of South Los Angeles, and Adan Ruiz, 27, of Garden Grove, with one count of conspiracy to distribute and to possess with the intent to distribute fentanyl and methamphetamine. Ruiz is also charged with one count of distribution of fentanyl.
Navia and Ruiz were arrested on November 2 and were arraigned that same day in United States District Court in Los Angeles. Both defendants pleaded not guilty, and a December 26 trial date was scheduled for them. Navia and Ruiz were ordered jailed without bond.
According to the indictment, Navia and Ruiz conspired with Rajiv Srinivasan, 38, of Houston, and Michael Ta, 25, of Westminster, who were indicted last year by a federal grand jury and pleaded guilty this year to similar charges. Srinivasan also pleaded guilty to distribution of fentanyl resulting in death. In their plea agreements, co-conspirators Srinivasan and Ta admitted that their drug trafficking activities caused the death of three individuals and that they sold fentanyl-laced pills to two others who died of drug overdoses soon thereafter. Srinivasan and Ta are awaiting sentencing next year before United States District Judge David O. Carter in Santa Ana.
As alleged in the indictment, co-conspirator Srinivasan advertised and accepted orders for counterfeit M30 oxycodone pills containing fentanyl and other narcotics through the vendor account “redlightlabs” on multiple darknet marketplaces. Navia and Ruiz allegedly communicated with co-conspirator Srinivasan regarding drug orders, including through encrypted messaging applications, such as “Session” and “Signal,” as well as direct Instagram messages. Navia and Ruiz then delivered controlled substances to Ta for mailing to customers who had ordered those drugs from Srinivasan, according to the indictment.
Navia and Ruiz allegedly were paid by Srinivasan for their roles as drug suppliers for the organization, including through cryptocurrency, currency which had been routed through cryptocurrency exchanges, and mobile payment applications including Apple Cash, CashApp, PayPal, Venmo, and Zelle.
The indictment alleges that co-conspirators Srinivasan and Ta maintained a shared electronic document that detailed approximately 3,800 drug transactions to approximately 1,400 unique customers in all 50 states across the country. That database documented sales between May 2022 and November 2022 totaling approximately 123,688 fentanyl pills, approximately 20 pounds of methamphetamine, and smaller amounts of fentanyl powder, black tar heroin and cocaine, according to the indictment.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
The statutory maximum sentence for the conspiracy charge alleged in the indictment is life in federal prison. The statutory maximum sentence for distribution of fentanyl is 20 years in federal prison.
The FBI is investigating this matter. The investigation in this matter was conducted under the auspices of the FBI-led Joint Criminal Opioid Darknet Enforcement Team (JCODE), which targets darknet vendors by using sophisticated, high-tech techniques to identify drug traffickers who wrongly believe the dark web allows them to engage in criminal conduct with anonymity. Since its inception in 2018, JCODE investigations have resulted in the arrest of more than 300 darknet drug traffickers, as well as the seizure of more than $42 million in drug-tainted proceeds, over 800 kilograms of narcotics, and approximately 145 firearms.
Assistant United States Attorney Gregg E. Marmaro of the International Narcotics, Money Laundering, and Racketeering Section is prosecuting this case.
Captain of Santa Barbara-Based Dive Boat that Burned and Sank, Resulting in 34 Deaths, Found Guilty of Felony Federal OffenseRead the Press Release
LOS ANGELES – The captain of the P/V Conception – a Santa Barbara-based dive boat that caught fire and sank near Santa Cruz Island on Labor Day in 2019, resulting in the deaths of 33 passengers and one crew member – was found guilty by a jury late this afternoon of a federal felony offense.
Jerry Nehl Boylan, 69, of Santa Barbara, was found guilty of one count of misconduct or neglect of ship officer – an offense commonly called “seaman’s manslaughter” – a crime punishable by up to 10 years in federal prison.
The Conception was a 75-foot, wood-and-fiberglass passenger vessel that docked in Santa Barbara Harbor. During a Labor Day weekend dive trip in 2019, the boat carried 33 passengers and six crew members, including Boylan.
During the early morning hours of September 2, 2019, a fire broke out while the boat was anchored in Platt’s Harbor near Santa Cruz Island. The fire, which engulfed the boat and led to its sinking, resulted in the deaths of 34 people who had been sleeping below deck. Five crewmembers, including Boylan, were able to escape and survived.
“This ship captain’s unpardonable cowardice led to the deaths of 34 lives on Labor Day 2019,” said United States Attorney Martin Estrada. “As the jury found, this tragedy could have been avoided had Mr. Boylan simply performed the duties he was entrusted to carry out. We hope that today’s verdict brings some solace and closure to the victims’ loved ones.”
“Mr. Boylan’s failure to carry out his duties as Captain of the Conception led to the catastrophic loss of 34 victims who suffered a horrifying death and perished needlessly in the end,” said Donald Alway, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Ultimately, the hard work by the investigators from multiple agencies led to today’s outcome and now the victims’ families can continue their healing process. Let this tragedy be a lesson to anyone who commands a boat with vulnerable passengers that proper training, diligence and life saving measures – when called for – are necessary to safeguard those left in one’s charge.”
According to evidence presented at a 10-day trial, Boylan, as captain of the Conception, committed a series of failures – including abandoning his ship instead of rescuing passengers – that resulted in the disaster. Such conduct constituted misconduct, gross negligence, and inattention to his duties and led to the deaths of 34 victims, the jury found.
As the ship’s captain, Boylan was responsible for the safety and security of the vessel, its passengers, and its crew. The jury found he failed in his responsibilities in several ways, including by:
- failing to have a night watch or roving patrol;
- failing to conduct sufficient fire drills and crew training;
- failing to provide firefighting instructions or directions to crewmembers after the fire started;
- failing to use firefighting equipment, including a fire ax and fire extinguisher that were next to him in the wheelhouse, to fight the fire or attempt to rescue trapped passengers;
- failing to perform any lifesaving or firefighting activities whatsoever at the time of the fire, even though he was uninjured;
- failing to use the boat’s public address system to warn passengers and crewmembers about the fire; and
- becoming the first crewmember to abandon ship even though 33 passengers and one crewmember were still alive and trapped below deck in the vessel’s bunkroom and in need of assistance to escape.
“In the court of justice, a guilty verdict echoes the collective grief and loss of 34 souls that perished in this tragedy. It serves as a solemn reminder of the great duty a master owes his passengers and crew. This verdict stands as a testament to our commitment to seek justice, hold accountable those responsible, and honor the memory of those lost,” said Coast Guard Investigative Service Director, Jeremy Gauthier. “This is also a testament to the hard work and dedication of our Special Agents, working side-by-side with the Federal Bureau of Investigation and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, to uncover evidence critical to bringing the defendant to justice.”
“No verdict can bring back the lives lost in this tragedy,” said Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Los Angeles Field Division Special Agent in Charge Christopher Bombardiere. “Our condolences go out to all the families still struggling to deal with the catastrophic event that occurred in the early morning hours on the Conception dive boat. Hopefully today’s guilty decision provides some much-needed closure for the families. For more than 50 years, ATF has developed scientifically proven investigative capabilities, expertise, and resources that have positioned ATF as the nation’s primary source for fire investigative knowledge and assistance. ATF’s National Response Team stands ready to provide resources and assist local agencies find answers.”
United States District Judge George H. Wu scheduled a February 8, 2024, sentencing hearing in this case. Boylan is free on a $75,000 bond.
The FBI, Coast Guard Investigative Service, and the Bureau of Alcohol, Tobacco, Firearms and Explosives investigated this matter.
Assistant United States Attorneys Mark A. Williams, Matthew W. O’Brien and Juan M. Rodríguez of the Environmental Crimes and Consumer Protection Section, along with Assistant United States Attorney Brian R. Faerstein of the Public Corruption and Civil Rights Section, are prosecuting this case.
Westwood Man Sentenced to More Than 9 Years in Prison for Long-Running Surety Bond Scam that Caused More Than $5 Million in LossesRead the Press Release
LOS ANGELES – A Westwood man was sentenced today to 110 months in federal prison for defrauding victims out of more than $5 million by purporting to sell bonds for large-scale construction and other projects, and for evading the payment of more than $1.2 million in taxes.
Tommy Lester Watts, 64, a.k.a. “Michael Nesbeth,” “Michael Kent,” and “Alex Mason,” was sentenced by United States District Judge Maame Ewusi-Mensah Frimpong, who also ordered him to pay $8,995,879 in restitution.
Watts pleaded guilty on February 16 to one count of transactional money laundering and one count of tax evasion.
From September 2016 to September 2019, Watts falsely claimed to be experienced in and able to provide surety bonds and other financial guarantees for large-scale projects. Watts told victims that he would assist them in obtaining financing for their projects via his various companies, including the Sherman Oaks-based Source One Surety LLC. Watts misrepresented that any such bonds or guarantees were underwritten by well-known companies and banks, and that they were backed by assets in the millions or billions of dollars.
But Watts and his companies were not licensed to sell such bonds in California. And his claims about his experience, his clients – which purportedly included governments – his underwriting, and his supporting assets were not true. To make his scheme appear legitimate, Watts hijacked the corporate filings of other companies and created fake employees and accounts for underwriters and banks.
Watts caused victims to send his companies approximately $5,238,344, the majority of which he spent on personal items such as classic and luxury cars, rent for high-end apartments, and the purchase of luxury retail goods.
He also laundered victim payments through accounts held in the names of corporations that were not registered and used fake taxpayer identification numbers – and then used those accounts to spend victim funds as his own. He hid this income from the IRS in tax years 2017 through 2019, in which he failed to file any tax returns. Watts received a total of $4,683,430 in income that he failed to report to the IRS for those three tax years.
Watts has agreed to forfeit to the United States nearly $60,000 seized from two bank accounts he controlled, a Mercedes-Benz car and a Subaru SUV. He also has agreed to pay to the IRS a total amount of $4,226,535 in restitution, which includes at least $1,863,035 for his tax liabilities.
“It is hard to overstate how devastating this conduct was to [Watts’] victims,” prosecutors argued in a sentencing memorandum. “Some lost businesses, some their life savings, others a property that had been in their family for over 200 years. They describe divorce, eviction, and physical and mental health ramifications…an inability to trust; lost reputations and dreams.”
The FBI, Homeland Security Investigations, IRS Criminal Investigation, and the California Department of Insurance investigated this matter.
Assistant United States Attorney Kristen A. Williams of the Major Frauds Section prosecuted this case.
SoCal Trio Charged with Armed Robberies During One-Week Spree in Which Their Flight from Police Resulted in Fatal Car CrashRead the Press Release
LOS ANGELES – Three Southern California residents have been charged in a federal criminal complaint with allegedly committing three armed robberies of a liquor store, gas station, and convenience store – a crime spree that ended in the death of an innocent bystander in a fatal car accident while the defendants fled from police, the Justice Department announced today.
The following defendants have been charged via a criminal complaint filed last Wednesday with Hobbs Act robbery and using and carrying a firearm during an in relation to a crime of violence:
- Kaelenn Maea, 26, of Long Beach;
- Salagi Iakopo, 30, of Carson; and
- Mathew Salanoa, 23, of Placentia
Maea and Salanoa are expected to make their initial appearances this afternoon in the United States District Court in downtown Los Angeles. Law enforcement continues to search for Iakopo.
According to an affidavit filed with the complaint, the defendants committed three armed robberies from September 22 to September 29 in Downey, Compton, and South El Monte. In each of the robberies, one of the robbers allegedly used a short-style rifle to control the cashier and customers while another robber took full cash registers or drawers before all the robbers fled in an SUV.
Specifically, on September 27, the three defendants allegedly robbed a Compton gas station. One of the robbers, believed to be Salanoa, was caught on surveillance footage approximately 10 minutes before the robbery casing the store in preparation to rob it. The robbers left briefly before returning. Another robber, believed to be Iakopo, grabbed and detached the cash register from the counter. The final robber, believed to be Maea, pointed a rifle at the cashier and customers preventing them from exiting the store. The robbers allegedly stole approximately $1,500 inside the cash register and fled in a stolen Range Rover.
Two days later, two defendants, believed to be Maea and Iakopo, robbed a convenience store in South El Monte. One of the robbers pointed a rifle at the cashier while the other robber stole the cash register drawer. In total, the robbers stole approximately $350 to $400. The robbers then fled in the stolen Range Rover.
On October 9, Los Angeles County sheriff’s deputies found the stolen Range Rover, which allegedly sped off and almost immediately hit another car, killing a civilian motorist inside. The suspects then ran away, but deputies found Iakopo hiding in a trash can in the area, the affidavit alleges. Deputies later found clothing believed to belong to Maea beside a small crawl space under a nearby house. Inside the stolen Range Rover, deputies found clothing, identification and a cellphone believed to belong to Maea, according to the affidavit.
A criminal complaint contains allegations. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
If convicted of both charges, each defendant would face a statutory maximum sentence of 20 years in federal prison for the Hobbs Act robbery count and up to life in federal prison for the firearm count.
The FBI and the Los Angeles County Sheriff’s Department are investigating this matter. The Los Angeles Police Department, the El Monte Police Department, and the Downey Police Department provided assistance.
Assistant United States Attorneys Kevin J. Butler and Jena A. MacCabe of the Violent and Organized Crime Section are prosecuting this case.
Former Soldier Charged with Threatening to Kill Military Personnel at Fort Irwin Army Base in San Bernardino CountyRead the Press Release
LOS ANGELES – A Northern California man has been charged with a felony offense for allegedly posting online videos of himself threatening to kill multiple military personnel at the Fort Irwin army base in San Bernardino County, the Justice Department announced today.
Christian Ernest Beyer, 41, of Petaluma, has been charged with interstate threats, a crime that carries a statutory maximum sentence of five years in federal prison.
Beyer, an army veteran formerly stationed at Fort Irwin and who was court martialed in 2021 for assault, was arrested Wednesday at his father’s Sonoma County residence. A federal magistrate judge in San Francisco today ordered Beyer jailed without bond. Beyer is expected to be arraigned in the Central District of California in the coming weeks.
According to an affidavit filed with the complaint on Wednesday, on October 30, Beyer posted a YouTube video – using an account in his own name – in which he threatened to kill specific military personnel at Fort Irwin.
In one of the YouTube videos posted on October 30, Beyer allegedly said, “I had a great…life and I will…die for what I believe in. If you come to…get me and you have a …uniform on, you’re a[n]…enemy and I will not look at you as anything else. I will…fight you ‘til I take you down.”
On October 30, Beyer allegedly got into an altercation in Mendocino County with a group of elderly individuals after leaving his car in a neighborhood in which he did not live. Beyer allegedly brandished a knife at one of the elderly people, got in his car, drove away, then turned around and sped towards the group, driving his vehicle approximately 13 feet off the street at them. Beyer then sped away and drove to a parking lot, where local law enforcement confronted him, according to the affidavit. He allegedly got out of his car and fled, leading to a manhunt that ended with his arrest.
A criminal complaint contains allegations. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The FBI is investigating this matter as part of its Los Angeles Joint Terrorism Task Force.
Assistant United States Attorney Daniel H. Weiner of the General Crimes Section is prosecuting this case.
Real Estate Company Executive Arrested on Charges Alleging He Bribed San Luis Obispo County Supervisor Then Concealed CrimesRead the Press Release
INDICTMENTLOS ANGELES – An executive at a San Luis Obispo-based real estate development company was arrested today on a federal grand jury indictment alleging he paid a local politician more than $95,000 in bribes and gifts in exchange for official acts benefiting the company’s development projects and then covered up the bribery scheme by forging documents.
Ryan Wright, 37, a.k.a. “Ryan Petetit,” of Grover Beach, was arrested this morning on a three-count indictment charging him with conspiracy, falsification of records, and obstruction of justice. The indictment was returned on October 4 and was unsealed today.
Wright is expected to make his initial appearance and be arraigned this afternoon in United States District Court in downtown Los Angeles.
According to the indictment, from at least June 2014 to May 2017, Wright conspired with his business partner, identified in court documents as “Co-Conspirator 1,” to bribe an elected official identified as “County Supervisor 1” with financial benefits, including money and gifts totaling more than $95,000. In exchange, County Supervisor 1 advocated for Wright’s real estate development company’s projects and prospective projects with City of San Luis Obispo officials and voted for Wright’s company’s projects on the San Luis Obispo County Board of Supervisors.
Wright, Co-Conspirator 1, and County Supervisor 1 then covered up the bribes by using County Supervisor 1’s consulting company to funnel and conceal bribe payments to County Supervisor 1. County Supervisor 1 then provided false information on his 2015 and 2016 annual state conflict of interest disclosure forms requiring him to report income he had received. Through the consulting company, Wright allegedly paid bribes to County Supervisor 1 and flew him on a jet to watch a Major League Baseball playoff game hosted by the San Francisco Giants, the supervisor’s favorite team.
To conceal the scheme, in response to a federal grand jury subpoena served on his development company, Wright allegedly caused the company to produce falsified records to the FBI.
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, Wright would face a statutory maximum sentence of five years in federal prison for the conspiracy count, a statutory maximum sentence of 10 years in federal prison for the obstruction of justice count, and up to 20 years in federal prison for the falsification of records count.
The FBI and IRS Criminal Investigation are investigating this matter.
Assistant United States Attorneys Thomas F. Rybarczyk and Daniel J. O’Brien of the Public Corruption and Civil Rights Section are prosecuting this case.
Orange County Man Pleads Guilty to Running Investment Scams That Raised More Than $17 Million via False Promises of House Flipping ProfitsRead the Press Release
LOS ANGELES – A Costa Mesa man pleaded guilty today to federal criminal charges for running fraudulent investment schemes that raised more than $17 million by promising investors – several of them elderly – returns of up to 10% that would be generated through real estate deals that turned out to be bogus, and for disobeying a court order to go to jail for violating the terms of his pretrial release.
Brett Barber, 44, a former co-owner of the Newport Beach-based BNZ Capital One LLC and National American Capital, pleaded guilty to two counts of wire fraud and one count of criminal contempt.
According to his plea agreement, from May 2019 to October 2021, Barber participated in two schemes to defraud victim investors out of their money and property.
In the first scheme, BNZ Capital, its principals and several marketers raised money by falsely representing that the firm bought and sold real estate projects and “flipped” real estate. Barber, co-conspirator Louis Zimmerle, 64, of Sacramento, and the marketers falsely promised investors a “guaranteed” return of between 8% and 10%, as well as potential bonuses based on successful deals. According to court documents, Barber told investors that their funds were “safe” and “FDIC insured.”
In fact, while BNZ Capital did purchase some real estate, it did not take any substantial steps to develop parcels, nor did BNZ flip real estate for a profit. Rather, BNZ primarily used investor funds to pay Barber, Zimmerle and others associated with the scheme, including purchasing residences where Barber and Zimmerle lived. Some of the investors’ money was used to repay earlier investors.
During this scheme, Barber, Zimmerle, and the marketers solicited or caused to be transferred to BNZ Capital approximately $13.8 million from victim investors. Investigators estimate that actual losses resulting from this scheme are at least $7 million.
Barber admitted in his plea agreement that he received and kept approximately $2,933,970 of investor money for his personal gain. At least five BNZ Capital investors were elderly, vulnerable victims who suffered substantial hardship because of the fraud committed against them.
After Barber learned that federal officials were investigating BNZ Capital, he began a second fraudulent scheme, this time involving a company he formed in January 2021 called National American Capital (NAC). The NAC scheme operated, in substance, the same way as the BNZ Capital fraud. That is, Barber and marketers working at his direction lied to investors by saying their money would be used to fund real estate development projects. In fact, there were no such projects, and the only way NAC could repay earlier investors was by soliciting money from new investors.
Specifically, in October 2021, Barber met with a person he believed was a prospective investor, but who in fact was an undercover law enforcement official. During this meeting, Barber told several lies: that NAC had been in business for 20 years, that it owned 10 parcels of land in Laguna Beach, and that it had purchased property in Newport Beach and turned in into a four-plex. None of these statements was true.
Barber admitted in his plea agreement that this scheme caused a loss of at least $3.5 million. He further admitted to receiving and keeping at least $388,669 of investor money for his personal gain.
During the BNZ Capital and NAC schemes, Barber failed to disclose to investors that he previously was barred from acting as or associating with a broker-dealer by the Financial Industry Regulatory Authority (FINRA).
Finally, after a federal grand jury indicted Barber in October 2021, he was released on bond. In January 2023, a court found that Barber violated the terms of his pretrial release and ordered him to surrender to the United States Marshals Service by January 13. Barber willfully disobeyed the court’s order and failed to surrender. In March 2023, Barber was arrested in Santa Cruz County, California. He eventually was transferred to federal custody in Los Angeles, where he remains.
United States District Judge Otis D. Wright II scheduled a March 4, 2024 sentencing hearing, at which time Barber will face a statutory maximum sentence of 20 years in federal prison for each wire fraud count, and a statutory maximum sentence of life imprisonment for the criminal contempt count.
Zimmerle pleaded guilty in January 2022 to one count of wire fraud. In his plea agreement, Zimmerle admitted to participating in the BNZ Capital scam and that he received and kept approximately $582,815 of victim investor money. His sentencing hearing is scheduled for January 22, 2024.
In October 2021, the United States Securities and Exchange Commission (SEC) filed a civil lawsuit against Barber, Zimmerle and BNZ Capital for fraudulently raising more than $13 million from over 100 retail investors.
The FBI is investigating this matter. The SEC provided substantial assistance.
Assistant United States Attorney Bradley E. Marrett of the Santa Ana Branch Office is prosecuting this case.