Central District of California
Press releases recorded for this federal judicial district.
Former BOP Corrections Officer Sentenced to 10 Years in Prison for Sexually Assaulting a Woman in Federal Custody in Los AngelesRead the Press Release
A former corrections officer with the Federal Bureau of Prisons (BOP), was sentenced to 120 months and three years of supervised release today in federal court in the Central District of California for sexually assaulting a woman in custody.
Jose Viera, 49, was sentenced for one felony count of deprivation of rights under color of law for sexually assaulting a woman in custody in December 2020. He entered his guilty plea on May 24, 2022.
According to court documents, at the time of the assault, Viera was a BOP corrections officer assigned to work at Metropolitan Detention Center-Los Angeles (MDC-LA), a federal prison that holds male and female pre-trial detainees and persons serving custodial sentences. In his role as corrections officer, Viera was required to uphold the U.S. Constitution and ensure the safety and security of persons housed at MDC-LA. In March 2022, Viera was placed on administrative leave.
In December 2020, Viera was assigned to supervise incarcerated women who were quarantined due to COVID-19 exposure and infection. During the morning of Dec. 20, Viera entered the cell of the victim, who was in COVID-19 isolation, as he had done on previous occasions to bring her breakfast. On that morning, Viera laid down next to the victim in her bed, sandwiching her between his body and the wall. Then, he sexually assaulted the victim. Viera committed this assault despite knowing that his actions violated her constitutional rights. When the Department of Justice, Office of the Inspector General (DOJ-OIG), and the FBI conducted a voluntary interview with Viera about the sexual assault allegations, Viera lied to federal agents about his misconduct.
“Law enforcement officials must be held accountable when they abuse their authority and exploit their power to sexually assault the very people they are sworn to protect,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “This defendant’s actions destroyed this woman’s sense of peace, caused incalculable pain, and shattered her trust in law enforcement. We hope this sentence stands as a reminder to would-be offenders that the Justice Department is committed to holding officials accountable when they sexually assault people held inside jails and prisons.”
“By breaching his duty of trust, Viera harmed not only the victim, but also the system of justice he was entrusted to serve,” said U.S. Attorney Martin Estrada for the Central District of California. “My office will continue in its mission to ensure that no one is above the law, regardless of their position, and that victims receive justice.”
“Viera abused his power and sexually assaulted the inmate in her cell while she was extremely vulnerable in COVID-19 isolation,” said Special Agent in Charge Zachary Shroyer for the DOJ-OIG, Los Angeles Field Office. “Today’s sentencing shows that Correctional Officers that abuse inmates will be brought to justice.”
“Law enforcement officers are charged with upholding civil rights. The defendant in this case completely abused his position of power,” said Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division. “The FBI is dedicated to protecting the American people and pursuing justice on behalf of victims in cases like this.”
The DOJ-OIG Los Angeles Field Office and the FBI Los Angeles Field Office are investigating the case.
Assistant U.S. Attorney Thomas Rybarczyk for the Central District of California and Trial Attorney Nikhil Ramnaney and former Special Litigation Counsel Fara Gold of the Civil Rights Division’s Criminal Section are prosecuting the case.
South L.A. Man Sentenced to Nearly 6½ Years in Prison for Armed Robberies of Half a Dozen Businesses Within Two-Week Crime SpreeRead the Press Release
LOS ANGELES – A South Los Angeles man was sentenced today to 77 months in federal prison for committing six armed robberies of local businesses, mostly 7-Eleven stores, during a two-week crime spree in late 2021.
Colin Powell Lacey, 29, of the Hyde Park neighborhood of Los Angeles, was sentenced by United States District Judge Maame Ewusi-Mensah Frimpong.
Lacey pleaded guilty in August 2022 to one count of conspiracy to commit interference with commerce by robbery (Hobbs Act).
From November 13, 2021, to November 29, 2021, Lacey participated in the robbery of six businesses – five of which were 7-Eleven convenience stores. During the robberies, Lacey typically entered the stores, pointed a handgun at the store’s cashier and stole money – usually hundreds of dollars in cash belonging to the business.
For example, on November 29, 2021, Lacey and his co-conspirator, Kyle Richard Williams, 26, of Inglewood, traveled together to a smoke shop located in the Mid-City area of Los Angeles. Williams entered the store, pointed a handgun at the cashier and stole $442 while Lacey waited outside the store before fleeing with Williams.
That same night, Lacey and Williams robbed 7-Eleven stores in Hollywood and Mid-City, with Lacey pointing a handgun at the cashier at the Hollywood store and Williams pointing a handgun at the cashier at the Mid-City business, making off with $600 and $100, respectively. Lacey and Williams then fled in Lacey’s Hyundai.
On December 30, 2021, Lacey and Williams attempted to rob a 7-Eleven in El Segundo. Williams pointed a handgun at the store employee and demanded money. Lacey and Williams fled together after the employee showed Williams that the cash register was empty.
In total, Lacey participated in the armed robbery of six stores, including two other 7-Elevens in Hollywood and one 7-Eleven in West Hollywood. Lacey and Williams netted a total of $2,859 from the robberies.
Lacey and Williams have been in federal custody since March 2022.
Williams pleaded guilty in July 2022 to one count of conspiracy to commit Hobbs Act robbery, two counts of Hobbs Act robbery, and one count of attempted Hobbs Act robbery. In December 2022, Judge Frimpong sentenced Williams to six years in federal prison.
The FBI, the Los Angeles Police Department, and the Los Angeles County Sheriff's Department investigated this matter.
Assistant United States Attorney Jeremiah M. Levine of the Violent and Organized Crime Section and Assistant United States Attorney Jeffrey M. Chemerinsky, Chief of the Violent and Organized Crime Section, prosecuted this case.
Woodland Hills Man Arrested in Federal Case Alleging He Extorted ‘Protection’ Money from Koreatown BusinessesRead the Press Release
LOS ANGELES – Authorities this morning arrested a Woodland Hills man on federal charges that allege he was extorting “protection” money from Koreatown businesses, sometimes using acts of violence against individuals who refused to pay.
Daekun Cho, 38, was arrested by special agents from Homeland Security Investigations (HSI) and officers from the Los Angeles Police Department pursuant to a federal criminal complaint filed last week. The complaint charges Cho with interference with commerce by threats or violence. Cho is expected to make his initial appearance this afternoon in United States District Court in downtown Los Angeles.
The federal investigation in this case began about a year ago and found that Cho was demanding protection money from karaoke businesses in Koreatown, as well as from “doumi” – or hostesses – employed by patrons of the karaoke establishments.
“To further his extortion scheme, Cho committed shootings, a carjacking, a kidnapping, and other acts of physical violence,” according to the complaint affidavit. “Cho made explicit threatening statements to the doumi drivers and karaoke bar owners to get them to pay a monthly fee.”
The affidavit outlines physical attacks of four victims over the past year and discusses another victim who was threatened. The first victim discussed in the affidavit was a doumi driver, who, after refusing to pay the protection money after a price increase, was subject to a baseball bat beating, allegedly by Cho and another individual, on May 8, 2021. The victim suffered a broken arm and multiple lacerations, the affidavit states.
In another incident on August 5, 2022, at a karaoke bar, Cho demanded that a doumi driver leave the location, and, as the driver and two doumis were driving away, they heard gunshots and one of the doumis suffered a gunshot wound to the neck, according to the affidavit, which notes this incident remains under investigation by the LAPD.
The fifth victim, who reported he had been paying Cho for approximately four years, told investigators that he had decided to stop paying Cho before Cho allegedly assaulted him and stole approximately $1,000 from him on January 24. The affidavit details how that victim, working with law enforcement, made an extortionate $500 payment to Cho on February 16.
A complaint contains allegations that a defendant committed a crime. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The charge of interference with commerce by threats or violence carries a statutory maximum sentence of 20 years in federal prison.
HSI and the LAPD are investigating this matter.
Assistant United States Attorney Jena MacCabe of the Violent and Organized Crime Section is prosecuting this case.
Inland Empire Return Preparer Charged with Preparing False Tax Returns with Bogus Deductions for 5 YearsRead the Press Release
RIVERSIDE, California – An Inland Empire man was arrested this week after being named in a 47-count indictment alleging he prepared false tax returns for clients, the Justice Department announced today.
Salvador Gonzalez, of Corona, was arrested Monday afternoon by special agents with IRS Criminal Investigation after being charged last week by a federal grand jury. Gonzalez was arraigned on the indictment Tuesday afternoon in United States District Court, where he entered not guilty pleas. Gonzalez was ordered released on bond, and a trial in this case was scheduled for May 9.
The indictment charges Gonzalez with 47 counts of aiding and assisting in the preparation of false tax returns.
According to the indictment filed on March 8 and unsealed Tuesday, Gonzalez operated a tax preparation business called Grace’s Lighthouse Resource Center, Inc., in Corona.
For tax years 2016 through 2021, Gonzalez allegedly prepared income tax returns for individuals and corporate clients to submit to the IRS that claimed tens of thousands of dollars in bogus business losses. Gonzalez also allegedly falsified additional deductions on client returns, including medical and dental expenses, unreimbursed employee expenses, and charitable contributions, knowing that the clients were not entitled to the amounts claimed.
If convicted in this case, Gonzalez would face a statutory maximum penalty of three years in prison for each count alleged in the indictment. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
IRS Criminal Investigation is investigating the case.
Assistant United States Attorney Robert S. Trisotto of the Riverside Branch Office and Trial Attorney Lauren K. Pope of the Justice Department’s Tax Division are prosecuting the case.
An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Former Wells Fargo Executive Agrees to Plead Guilty to Obstructing Bank Examination Involving the Opening of Millions of Accounts Without Customer AuthorizationRead the Press Release
LOS ANGELES – The former head of Wells Fargo Bank’s retail banking division has agreed to plead guilty to obstructing a government examination into the bank’s widespread sales practices misconduct, which included opening millions of unauthorized accounts and other products, federal authorities announced today.
In a plea agreement filed today in United States District Court, Carrie L. Tolstedt, 63, of Scottsdale, Arizona, agreed to plead guilty to one count of obstruction of a bank examination. Tolstedt is expected to make her initial court appearance in Los Angeles in the coming weeks, with the parties requesting the court to set a hearing for April 7.
The Office of the Comptroller of the Currency (OCC), which investigated misconduct at Wells Fargo, also has reached a resolution with Tolstedt in a regulatory proceeding. As part of the consent order resolving that matter, Tolstedt agreed to a ban from working in the banking industry and to pay a $17 million civil penalty.
“The justice system and regulators rely on corporations and their executives to fully cooperate during investigations into potential wrongdoing. But, in this case, Ms. Tolstedt took steps to cover up misconduct at Wells Fargo,” said Acting United States Attorney Joseph T. McNally. “Obstructing an investigation compromises the mission of those seeking the truth, and we will hold accountable any individual who attempts to conceal wrongdoing.”
“The plea agreement filed today sends a clear message that bank executives who commit fraud and deliberately deceive regulators will be brought to justice for their actions. I commend our agents and their federal law enforcement partners for their hard work and persistence, which ultimately led to this outcome,” said Mark Bialek, Inspector General for the Board of Governors of the Federal Reserve System and Consumer Financial Protection Bureau.
“Today’s plea agreement holds the defendant accountable for her role in obstructing the examination into the unlawful sales practices at Wells Fargo, which deceived millions of clients who placed their trust in the institution,” said Acting Inspector General Tyler Smith of the Federal Deposit Insurance Corporation, Office of Inspector General. “We remain committed to working with our law enforcement partners to investigate any individuals, including bank executives, who threaten to undermine the integrity of the banking sector.”
“Obstructing lawful governmental reviews of bank operations undermines the integrity of our financial institutions,” said Robert K. Tripp, the Special Agent in Charge of the FBI’s San Francisco Field Office. “The resolution of this case is the result of diligent work by the FBI and our law enforcement partners, who spent years uncovering corporate misconduct in this case. This investigation demonstrates our unwavering commitment to rooting out white-collar crimes, regardless of their complexity, and protecting our economy.”
From approximately 2007 to September 2016, Tolstedt was Wells Fargo’s senior executive vice president of community banking and was head of the Community Bank, which operated Well Fargo’s consumer and small business retail banking business. The Community Bank managed many of the products that Wells Fargo sold to individual customers and small businesses, including checking and savings accounts, CDs, debit cards, bill pay, and other products.
Wells Fargo previously admitted that, from 2002 to 2016, excessive sales goals led Community Bank employees to open millions of accounts and other financial products that were unauthorized or fraudulent. In the process, Wells Fargo collected millions of dollars in fees and interest to which it was not entitled, harmed customers’ credit ratings, and unlawfully misused customers’ sensitive personal information.
Many of these practices were referred to within Wells Fargo as “gaming.” Gaming strategies included using existing customers’ identities – without their consent – to open accounts. Gaming practices included forging customer signatures to open accounts without authorization, creating PINs to activate unauthorized debit cards, and moving money from millions of customer accounts to unauthorized accounts in a practice known internally as “simulated funding.”
Gaming also included opening credit cards and bill pay products without authorization, altering customers’ contact information to prevent customers from learning of unauthorized accounts and to prevent Wells Fargo employees from reaching customers to conduct customer satisfaction surveys, and encouraging customers to open accounts they neither wanted nor needed.
According to the plea agreement filed today, by no later than 2004, Tolstedt was aware of sales practices misconduct within the Community Bank and the fact that employees were terminated each year for gaming. By no later than 2006, Tolstedt was learning about the gaming practices from corporate investigations and, over time, learned that terminations for gaming in the Community Bank were steadily increasing, that the misconduct was linked in part to sales goals within the Community Bank, and that termination numbers likely underestimated the scope of the problem.
Although the Community Bank eventually took steps purportedly designed to proactively identify sales misconduct, the measures used by the bank flagged only a small portion of the potentially problematic activity for investigation. As of July 2014, only the most egregious .01 to .05 percent of employees engaging in activity considered a “red flag” for sales practices misconduct were investigated – with the remaining 99.95 to 99.99 percent left unexamined under this process.
In May 2015, Tolstedt participated in the preparation of a memorandum, which she knew would be provided to the OCC in connection with its examination of sales practice issues at Wells Fargo. To minimize the scope of the sales practices misconduct within the Community Bank, Tolstedt corruptly obstructed the OCC’s examination by failing to disclose statistics on the number of employees who were terminated or resigned pending investigation for sales practices misconduct. She also failed to disclose that the Community Bank proactively investigated only a very small percentage of employees who engaged in activity flagged as potential sales practices misconduct.
“We are proud to work with our partner agencies to help bring justice to the many people who were harmed by the unscrupulous sales practices of Wells Fargo,” said Brian Tomney, Inspector General of the Federal Housing Finance Agency. “The results of this case should be a clear signal that FHFA-OIG and its partner agencies will hold accountable those who seek to put profits ahead of legal and fair banking practices.”
“This plea agreement demonstrates the determination and cooperation of Postal Inspectors and our federal law enforcement partners. Postal Inspectors are committed to investigating anyone holding a position of trust in the financial system that would engage in a fraud to deceive their customers,” said Rafael Nuñez, Inspector in Charge of the United States Postal Inspection Service, San Francisco Division.
Wells Fargo in 2020 acknowledged the widespread sales practices misconduct within the Community Bank and paid a $3 billion penalty in connection with agreements reached with the United States Attorneys’ Offices for the Central District of California and the Western District of North Carolina, the Justice Department’s Civil Division, and the Securities and Exchange Commission.
The statutory maximum sentence for obstruction of a bank examination is five years in federal prison. Tolstedt has entered into a plea agreement which calls for a prison sentence of up to 16 months in prison, which prosecutors believe is the high end of the sentencing guideline range for the obstruction offense. The plea agreement is “binding,” which means the court must accept or reject all aspects of it. Should the court reject the plea agreement, including the agreed-upon sentencing range, any party may withdraw from it.
The FBI; the Federal Deposit Insurance Corporation, Office of Inspector General; the Federal Housing Finance Agency, Office of Inspector General; the Office of Inspector General for the Board of Governors of the Federal Reserve System and Consumer Financial Protection Bureau; and the United States Postal Inspection Service are investigating this matter. The OCC and the United States Securities and Exchange Commission provided substantial assistance.
This matter is being prosecuted by Assistant United States Attorneys Alexander B. Schwab and Carolyn S. Small of the Major Frauds Section, along with Special Attorney Benjamin S. Kingsley and Assistant United States Attorney Daniel S. Ryan of the Western District of North Carolina.
U.S. Attorney’s Office Charges 9 Defendants with Child Exploitation Offenses in Ongoing Program to Prevent Victimization of ChildrenRead the Press Release
LOS ANGELES – Federal authorities today announced a series of child sexual exploitation cases alleging the victimization of minors – sometimes by convicted sex offenders – and charging a range of crimes that include sex trafficking, enticing a minor to engage in criminal sexual activity and producing child pornography.
United States Attorney Martin Estrada, FBI Assistant Director in Charge Donald Alway, and Homeland Security Investigations (HSI) Acting Special Agent in Charge Eddy Wang made the announcement.
In eight new cases filed in recent weeks – five resulting from FBI-led investigations, and three from investigations led by Homeland Security Investigations – nine defendants are accused of exploiting children in person and on the internet. There have been significant recent developments in other child exploitation cases being prosecuted by the United States Attorney’s Office, including a life sentence imposed on an offender who filmed his sexual assaults of disabled children.
The cases announced today are part of Project Safe Childhood, which is the Justice Department’s longstanding initiative to combat the ongoing epidemic of child exploitation crimes.
“Protecting our children from sexual exploitation is some of the most important work my office does,” said United States Attorney Estrada. “For years, we have vigorously prosecuted child sexual predators, and we have only increased those efforts in recent times. To those who would seek to victimize our youth, let me be clear: We will use every tool in our arsenal to bring you to justice and thereby stop you from causing further irreparable harm to others.”
“The various cases being announced today are a reminder of the constant threat of sexual extortion minors face, as well as the persistent demand for child pornography,” said FBI Assistant Director Alway, who runs the FBI’s Los Angeles Field Office. “Whether an offender sexually abuses a child in person or online, or continues to exploit children by producing or sharing images of sexual abuse, the FBI and our partners will continue to seek justice for innocent victims by holding offenders accountable.”
“HSI Los Angeles is committed to removing sexual predators from our streets and working aggressively to hold them accountable for their heinous actions,” said HSI Acting Special Agent in Charge Wang.
The new cases announced today are:
United States v. Griffin
Dakota R. Griffin, 33, of Benton, Illinois, was arrested on March 8 for allegedly coercing a 16-year-old girl he encountered online to produce child sexual abuse material (CSAM) by making her believe he was holding one of her online friends captive and that he was associated with the Ku Klux Klan. The complaint alleges that Griffin further demanded that the victim travel to Illinois to have sex with him. During their communications, Griffin allegedly threatened to kill her and her family. After learning that the victim suffered from seizures, Griffin told her that he had always wanted to sexually abuse “a girl while she had a seizure,” according to court documents. During his initial appearance in a federal court in Illinois, Griffin was ordered detained pending trial. The FBI is investigating this case. Assistant United States Attorney Jeremiah Levine from the Violent and Organized Crime Section is prosecuting this matter.
United States v. Lozano
A criminal complaint filed Friday charges Ivan Lozano, a 36-year-old resident of Long Beach, with enticing a minor victim to commit sexual acts and possession of child pornography. Over the course of nearly two years, starting when the victim was 14, Lozano allegedly encouraged and enticed a girl a residing in Tanzania to repeatedly send him videos and photos of a sexual nature using the WhatsApp social media application. In October 2021, according to the complaint affidavit, Lozano traveled to Tanzania for the purpose of having sex with the girl, which he recorded on video. Lozano is currently a fugitive being sought by the FBI, which conducted the investigation in this matter together with the Los Angeles County Sheriff’s Department. Assistant United States Attorney Bruce Riordan from the Violent and Organized Crime Section is prosecuting case.
United States v. Sheehan
Dustan David Sheehan, 45, of Hollywood, surrendered on Friday after being named in a criminal complaint that accuses him of distributing child pornography and possession of and access with intent to view child pornography. In an August 2020 conversation with an undercover agent on the Kik internet messaging platform, Sheehan discussed his desire to meet and sexually abuse the undercover’s fictitious 9-year-old daughter, according to the complaint affidavit. Sheehan allegedly also shared sexually explicit images with the undercover agent. During a subsequent search of Sheehan’s residence, investigators FBI identified approximately 2,919 CSAM images and 21 CSAM videos on Sheehan’s digital devices, the affidavit states. During his initial appearance Friday afternoon, Sheehan was released on a $100,000 bond and was ordered to reside at a residential rehabilitation center. The FBI is investigating this matter. Assistant United States Attorneys Jeffrey Chemerinsky and Hava Mirell from the Violent and Organized Crime Section are prosecuting this case.
United States v. Kicyla
A federal grand jury on March 8 returned a three-count indictment charging Nathan Kicyla with coercing a 10-year-old girl he encountered online to engage in sexually explicit conduct. The indictment charges Kicyla with sexual exploitation of a child for the purpose of producing a sexually explicit visual depiction, enticement of a minor to engage in criminal sexual activity, and commission of a felony offense involving a minor while required to register as a sex offender. If convicted, Kicyla would face a mandatory minimum sentence of 35 years in federal prison.
Kicyla, 39, of Van Nuys, whose screen name was “Nathan-Bert-2,” is currently in federal custody on a supervised release violation stemming from a 2007 conviction of sexually exploitation of minors in the Eastern District of California.
The FBI field offices in Los Angeles and Washington, D.C. are investigating this matter. Assistant United States Attorney Kevin Butler from the Violent and Organized Crimes Section is prosecuting this case.
United States v. Johnson
Ian Nathanial Johnson, 36, of Santa Clarita, was arrested Friday after prosecutors filed a criminal complaint charging him with distribution and possession of child pornography. The investigation into Johnson was launched after the National Center for Missing and Exploited Children received information that Johnson had uploaded CSAM to a Dropbox account, according to the complaint affidavit. Pursuant to a search warrant, agents seized Johnson’s digital devices and discovered over 200 images of child pornography and chats on Telegram, several of which included images of prepubescent children and children in bondage, the affidavit states. Johnson is scheduled to make his initial appearance on Wednesday in United States District Court. Homeland Security Investigations is conducting the investigation into Johnson. Assistant United States Attorney Catharine Richmond from the Violent and Organized Crime Section is prosecuting this case.
United States v. Anderson and Thomas
Norrell Alan Anderson, 24, of San Francisco, and Raeonnah Raina Thomas, 20, of Santa Rosa, were named in a criminal complaint filed on March 3, alleging they conspired to transport minors across state lines for the purpose of prostituting them. Anderson and Thomas are currently in state custody on charges that have been brought by the Orange County District Attorney’s Office. Homeland Security Investigations and the Orange County Human Trafficking Task Force – which includes the Irvine, Anaheim and Santa Ana police departments, as well as the California Highway Patrol – are investigating this case. Assistant United States Attorneys Lyndsi Allsop from the Violent and Organized Crime Section and Kristin Spencer from the Santa Ana Branch Office are prosecuting this matter.
United States v. Gissell
Thomas Gissell, 27, of Moorpark, was arrested on March 6 on charges of attempted enticement of a minor to engage in criminal sexual activity for allegedly soliciting sexually explicit photos from two individuals he thought were 14-year-old girls, but who were actually undercover agents. Gissell is scheduled to be arraigned on April 11. The newly formed, FBI-led Ventura County Child Exploitation and Human Trafficking Task Force is investigating this case. Assistant United States Attorney Kellye Ng from the Violent and Organized Crime Section is prosecuting this matter. AUSA Ng is the office’s Project Safe Childhood coordinator.
United States v. White
Parker William White, 22, of Johnsonville, New York, a former Army private based at Fort Irwin, was indicted by a federal grand jury on Friday on charges 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 14. White would groom these minor girls by telling them that he would treat them like “queens,” according to the complaint’s affidavit. Homeland Security Investigations and the U.S. Army Criminal Investigation Division investigated this case. Assistant United States Attorney Lyndsi Allsop from the Violent and Organized Crime Section is prosecuting this matter.
There have been developments recently in other child exploitation cases being prosecuted by the United States Attorney’s Office. Those cases are:
United States v. Dorame
Francisco Anthony Dorame, 41, of Echo Park, was sentenced on March 8 to 20 years in federal prison for using an online messenger app last year to attempt to sexually traffic two children – ages 7 and 9 – and for distributing sexually explicit images of children. Dorame was also sentenced to a lifetime period of supervised release and ordered to pay $33,000 in restitution to 11 victims. Dorame pleaded guilty in October 2022 to one count of attempted sex trafficking of a child under 14 years old and one count of distribution of child pornography.
During a conversation on the Kik platform, Dorame made two payments totaling $100 to a person who had access to the victims. Among other things, Dorame requested photographs of the victims, expressed his desire to “play with them right away” upon meeting up, and set a specific date, time and location for the meeting. In April 2022, Dorame used Kik to distribute sexually explicit images of children between 4 and 6.
“[Dorame’s] lifelong and dangerous obsession with girls has manifested in an extensive collection of child sex abuse material, several attempts to procure girls for sex acts, and inappropriate relationships with then-minors,” prosecutors argued in a sentencing memorandum. “[Dorame’s] possession and dissemination of child sex abuse material are not victimless crimes, either. Here, the real victims portrayed in the child sex abuse material defendant possessed and distributed provide heartbreaking accounts of the harm they have suffered, and continue to suffer.”
The FBI investigated this matter. Assistant United States Attorney Kathy Yu from the Violent and Organized Crime Section prosecuted this case.
United States v. Rodriguez, Bocardo and Banguguilan
Two men who were found guilty by a jury last year of receiving and possessing videos of sexual assaults of severely disabled children were sentenced on February 24 to lengthy prison terms. Miguel Bocardo, 23, of Baldwin Park, was sentenced by United States District Judge John W. Holcomb to 18 years in federal prison. Cyr Dino Banguguilan, 36, of Azusa, was sentenced to 12 years in prison.
Their co-defendant – Steve Rodriguez, 38, of Pomona – systematically raped at least three disabled children for years while working as a certified nursing assistant at a group home facility in San Bernardino County. Rodriguez filmed these repeated attacks and sent some of these child pornography films to others, including Bocardo and Banguguilan.
Rodriguez pleaded guilty to eight child exploitation offenses and in January 2023 was sentenced to life in federal prison.
Homeland Security Investigations investigated this matter as part of the Los Angeles Internet Crimes Against Children Task Force. The United States Postal Inspection Service, the FBI, the Baldwin Park Police Department, the Los Angeles County Sheriff’s Department, the Los Angeles Police Department, the Pomona Police Department, and the Burbank Police Department provided assistance. Assistant United States Attorneys Catharine Richmond and Scott Lara from the Violent and Organized Crime Section prosecuted this case.
United States v. Schmitt
Matthew Timothy Schmitt, 36, of Fontana, was sentenced on March 6 to 135 months in federal prison for attempted enticement of a minor for sexual purposes. Schmitt was arrested after communicating with an undercover agent, whom Schmitt believed was a 13-year-old girl, and travelling to Riverside for sex with the minor. The court also ordered that Schmitt serve a lifetime period of supervised release. The Riverside County District Attorney’s Office investigated this matter with assistance from the Fontana Police Department. Special Assistant United States Attorney Kaitlyn Lasater from the Riverside Branch Office prosecuted this case.
United States v. Bradford
Donavin Dwayne Bradford, 31, of South Los Angeles, was charged in a superseding indictment filed on February 24 with sex trafficking four victims, including three minors (ages 15 to 17), and an adult victim, whom Bradford allegedly trafficked using threats of force, fraud and coercion. Bradford is also charged with producing and possessing child pornography featuring his trafficking victims. Bradford allegedly advertised his victims on the internet and instructed them to walk “blades,” areas commonly known for prostitution, to make money for him. He also allegedly used violence and threats of violence to control his victims. Bradford is detained pending a trial scheduled to begin on April 11.
The FBI’s Los Angeles Child Exploitation and Human Trafficking Task Force investigated this matter in coordination with the Los Angeles 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, and the Los Angeles County Department of Children and Family Services. Assistant United States Attorneys Chelsea Norell and Kathy Yu from the Violent and Organized Crime Section are prosecuting this case.
Indictments and criminal complaints contain allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
The charges of enticing a minor victim to commit sexual acts and producing child pornography carries a mandatory minimum sentence of 15 years in federal prison and a statutory maximum penalty of 30 years in prison.
The charges of distributing and receiving child pornography carry a five-year mandatory minimum sentence and a statutory maximum penalty of 20 years in prison.
Possession of child pornography does not carry a mandatory minimum sentence, but a conviction on this charge can bring a sentence of up to 20 years in federal prison.
The charge of conspiracy to transport minors across state lines for the purpose of prostitution carries a mandatory minimum sentence of 10 years in federal prison and a statutory maximum penalty of life imprisonment.
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These cases are being prosecuted as part of the Department of Justice’s Project Safe Childhood program, which combats the sexual exploitation of children through impactful federal criminal investigations and prosecutions. The goal of the program is to provide children with a childhood safe from sexual exploitation and with resources if they become victims.
In addition to the efforts of prosecutors and investigators in bringing child exploitation offenders to justice, authorities are engaging in public outreach efforts designed to prevent children from being victimized in the first place. Educational efforts aimed at teens encourage them to reject online solicitations, warning young people that you don’t really know someone online, especially if you have not engaged in video chats with them. Those warnings include typical “red flags” that include requests for “nudes,” to talk about sex, to meet in real life, or for money.
When any problems arise, teens are encouraged to get help from a trusted adult, to block the other person from contacting them, and to get help removing any unwanted images from the internet. If you believe you or someone you know are the victim of child sexual exploitation, please visit our website, which contains information about reporting, education, services and how to submit a request to remove child exploitation images posted online.
Former L.A. Resident Arrested on Complaint Alleging Multimillion-Dollar Frauds Targeting Members of Orthodox Jewish CommunityRead the Press Release
LOS ANGELES – A former resident of the Fairfax District of Los Angeles has been arrested on a criminal complaint alleging he defrauded investors, primarily members of the Orthodox Jewish community, by inducing them into investing millions of dollars in his security camera business and his purported real estate ventures in Israel, the Justice Department announced today.
Yossi Engel, 35, who moved to Israel in March 2021 but temporarily returned to the Los Angeles area last month, is charged with one count of wire fraud.
Engel was arrested Wednesday night at Los Angeles International Airport as he was attempting to leave the country. He is expected to make his initial court appearance this afternoon in United States District Court.
According to an affidavit filed with the complaint, Engel orchestrated a scheme in which he made false representations and used forged documents to induce victims to make investments in and provide loans for iWitness Tech Inc., a Hancock Park-based security camera company and for properties Engel falsely claimed to own and be developing in Israel.
From September 2018 to January 2021, Engel allegedly used his community relationships to defraud victims, who primarily came from the Orthodox Jewish communities in the Los Angeles and New York areas. Engel allegedly claimed to need money in the form of short-term loans with high rates of return for iWitness’ business operations, namely the purported purchase and installation of security cameras for its customers.
Engel offered short-term investments and loans in iWitness that ranged from $15,000 to $1.3 million. The investments and loans were for two weeks to six months and would purportedly provide investors with 10% to 60% annualized interest, according to the affidavit. Victims were duped, in part, by being shown copies of false and fraudulent invoices of work iWitness purportedly did with other companies.
Engel told victims that iWitness was a large business with many clients, but in fact it did not have as much business as he claimed, and work was so slack that at times iWitness employees sat around waiting for work while Engel slept on a couch, the affidavit states.
In another part of the scheme, Engel allegedly also falsely claimed to own and be developing real estate in Israel, telling victims that he needed money for redevelopment work, and falsely promising he would sell the properties and share the profits with investors. Engel showed victims a video depicting himself socializing with the mayor of Bnei Brak, Israel, and claimed to have met with the mayor concerning Engel’s purported real estate deals in the city, the affidavit states. But Engel did not have a close relationship with the mayor, and he did not discuss with the mayor these real estate ventures in the city, according to the affidavit.
Engel allegedly used fraudulent Israel land documents to dupe victims into thinking he owned these properties. Through these fake documents and his own trusted position in the Orthodox Jewish community, Engel allegedly lulled existing victims and encouraged new victims to send him money.
Engel lied to investors that he needed private investments for both iWitness and the Israeli real estate projects because he was from Israel and did not have sufficient credit in the United States to obtain the lower interest rates available through U.S. banks, the affidavit states.
But, the affidavit alleges, Engel did not use the victims’ money as promised, and instead used it for his personal expenses – including trips via private jets and casino visits – and to make Ponzi payments to investors to perpetuate the scheme.
Once the alleged scheme fell apart in early 2021, Engel fled the United States for Israel.
At this time, the FBI has identified losses of approximately $5 million. The federal criminal investigation is continuing.
A complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
If convicted, Engel would face a statutory maximum sentence of 20 years in federal prison.
In January 2023, the United States Securities and Exchange Commission sued Engel, alleging he used his ties in the Orthodox Jewish community to perpetuate a multimillion-dollar million affinity fraud.
The FBI is investigating this matter.
Assistant United States Attorney Steven M. Arkow of the Major Frauds Section is prosecuting this case.
Federal Authorities Seize Internet Domain Selling Malware Used to Illegally Control and Steal Data from Victims’ ComputersRead the Press Release
LOS ANGELES – As part of an international law enforcement effort, federal authorities in Los Angeles this week seized an internet domain that was used to sell computer malware used by cybercriminals to take control of infected computers and steal a wide array of information.
A seizure warrant approved by a United States Magistrate Judge on March 3 and executed on Tuesday led to the seizure of www.worldwiredlabs.com, which offered the NetWire remote access trojan (RAT), a sophisticated program capable of targeting and infecting every major computer operating system. “A RAT is a type of malware that allows for covert surveillance, allowing a ‘backdoor’ for administrative control and unfettered and unauthorized remote access to a victim’s computer, without the victim’s knowledge or permission,” according to court documents filed in Los Angeles.
As part of this week’s law enforcement action, authorities in Croatia on Tuesday arrested a Croatian national who allegedly was the administrator of the website. This defendant will be prosecuted by Croatian authorities. Additionally, law enforcement in Switzerland on Tuesday seized the computer server hosting the NetWire RAT infrastructure.
The FBI in Los Angeles in 2020 opened an investigation into worldwidelabs, the only known online distributor of NetWire. Undercover investigators with the FBI created an account on the website, paid for a subscription plan, and “constructed a customized instance of the NetWire RAT using the product’s Builder Tool,” according to the affidavit in support of the seizure warrant.
While the website marketed NetWire as a legitimate business tool to maintain computer infrastructure, the affidavit states that NetWire is a malware used for malicious purposes, the software was advertised on hacking forums, and numerous cyber security companies and government agencies have documented instances of the NetWire RAT being used in criminal activity.
“Today’s action is a testament to the innovation and flexibility necessary to fighting cybercriminals who operate without borders,” said United States Attorney Martin Estrada. “Our office will continue to forge international alliances to protect our communities from cyber threats. Criminals used NetWire on a global scale, and we have responded by dismantling the infrastructure that has caused untold harm to victims around the world.”
“By removing the Netwire RAT, the FBI has impacted the criminal cyber ecosystem,” said Donald Alway, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The global partnership that led to the arrest in Croatia also removed a popular tool used to hijack computers in order to perpetuate global fraud, data breaches and network intrusions by threat groups and cyber criminals.”
The referenced media source is missing and needs to be re-embedded.This matter is the result of the United States’ strong law enforcement cooperation with Croatia and other global partners. The FBI’s Los Angeles Field Office; the Croatia Ministry of the Interior, Criminal Police Directorate; Zurich Cantonal Police in Switzerland; the Europol European Cybercrime Center; and the Australian Federal Police conducted the investigation in this matter.
Assistant United States Attorneys Lisa Feldman of the Cyber and Intellectual Property Crimes Section and Maxwell Coll of the Asset Forfeiture and Recovery Section obtained the seizure warrant for the internet domain. The Office of International Affairs in the Justice Department’s Criminal Division provided substantial assistance during the investigation.
3 Mexican Nationals Charged in Federal Criminal Complaint Alleging They Possessed 1 Million Fentanyl Pills in Their CarRead the Press Release
LOS ANGELES – Three Mexican men arrested in El Monte on Wednesday for allegedly possessing 1 million fentanyl pills have been charged in a criminal complaint with violating federal drug laws, the Justice Department announced today.
The complaint filed today charges the following defendants – each of whom is from Sinaloa, Mexico – with one count of possession with intent to distribute controlled substances:
- Florencio Camacho Allan, 28;
- Gerardo Gaixola-Patino, 29; and
- Alex Valdez Oroz, 25.
The defendants are expected to make their initial appearances this afternoon in United States District Court in downtown Los Angeles.
According to an affidavit filed with the complaint, the defendants met with two buyers at a restaurant in El Segundo on Tuesday to discuss a 10,000-fentanyl-pill sample sale which would be followed by a deal for 1 million fentanyl pills. During the meeting, Allan and Gaixola met with the buyers while Oroz remained in the car, a white Volkswagen Jetta, the affidavit states.
After the meeting, Allan and Gaixola went to the parking lot where they allegedly sold 10,000 fentanyl pills to the buyers for $7,500. The defendants then left the restaurant under the surveillance of law enforcement.
Later that day, Allan allegedly confirmed with one of the buyers that they were interested in doing the 1 million pill deal later that day and showed one buyer the pills, which appeared to be in the Jetta’s trunk, via a WhatsApp video call.
Upon receiving information about the pills’ location, law enforcement conducted a traffic stop on the Jetta, which was stationed in a lot at an El Monte hotel, searched the car, and allegedly found approximately 1 million fentanyl pills in the car’s body and trunk. Law enforcement then arrested the three defendants on Wednesday morning.
A complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
If convicted, each defendant would face a statutory maximum sentence of life in federal prison.
The Drug Enforcement Administration is investigating this matter as part of the High Intensity Drug Trafficking Area (HIDTA) program with Homeland Security Investigations, the Hawthorne Police Department, the Fullerton Police Department, the El Monte Police Department, and the California National Guard providing assistance.
Assistant United States Attorneys Lyndsi C. Allsop of the Violent and Organized Crime Section and K. Afia Bondero of the General Crimes Section are prosecuting this case.
Ventura County Child Exploitation Task Force Arrests Moorpark ManRead the Press Release
VENTURA, California – The newly formed Ventura County Child Exploitation and Human Trafficking Task Force today announced the arrest of a Moorpark man who is charged in a federal criminal complaint with soliciting on social media platforms sexually explicit photos from two individuals he thought were 14-year-old girls.
Thomas Gissell, 27, of Moorpark, was taken into custody Monday morning by federal and state authorities participating in the Task Force.
Gissell is charged with attempted enticement of a minor, an offense that carries a mandatory minimum sentence of 10 years in federal prison.
The Ventura County District Attorney’s Office began investigating Gissell after receiving information that he had contacted undercover law enforcement officers posing as teenage girls. According to the affidavit in support of the complaint, Gissell engaged in online chats with the individuals and asked them to send nude photos.
Gissell was originally arrested on February 7 pursuant to charges filed by the Ventura County District Attorney’s Office. Following that arrest, Task Force investigators determined Gissell had been receiving suspected child sexual abuse material during online chats with numerous victims around the country. The matter was subsequently presented to the United States Attorney’s Office, which filed the federal complaint on February 27.
At his initial appearance Monday afternoon in United States District Court, Gissell was ordered freed upon the posting of a secured $1 million bond. Once released, he will be subject to home incarceration with GPS monitoring. He was further ordered to have no contact with anyone under the age of 18 years old and no access to internet-connected devices. An arraignment in this case was scheduled for April 11.
The Ventura County Child Exploitation and Human Trafficking Task Force is comprised of investigators and prosecutors with the Ventura County Sheriff's Office, the Ventura County District Attorney’s Office, the Simi Valley Police Department, the Oxnard Police Department, the Santa Barbara County Sheriff's Office, the FBI, and the United States Attorney’s Office.
“We are committed to protecting our children by educating them about online predators, as well as focusing on proven enforcement and prosecution strategies,” said United States Attorney Martin Estrada. “Law enforcement partnerships are key to combatting exploitation crimes that have harmed too many children, and we will continue to vigorously prosecute these terrible crimes.”
“The FBI has worked seamlessly with our local law enforcement partners to address criminal violations of child exploitation and human trafficking throughout both Ventura and Santa Barbara Counties and has recently formalized that collaboration by creating an official task force to maximize resources,” said Donald Alway, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “This task force will utilize tools at the local and federal level to address crimes affecting vulnerable children and victims of sex trafficking and to hold offenders accountable.”
“The work done by this partnership of local, county and federal agencies is making a significant difference in the way that local law enforcement investigates, arrests and prosecutes perpetrators of child exploitation and human trafficking,” said Ventura County District Attorney Erik Nasarenko. “Having a dedicated team that specializes in this sensitive and increasingly high-tech form of child abuse is helping to stop people like Thomas Gissell from victimizing children.”
Members of the Task Force are specially trained in investigating online child sexual exploitation and human trafficking, and they strive to provide rapid responses to the sexual victimization of children. The Gissell investigation is the first criminal case brought by the Task Force.
“I am exceptionally proud of the work this task force has accomplished in working to safeguard our communities from child predators,” said Ventura County Sheriff Jim Fryhoff. “This task force perfectly exemplifies how successful law enforcement can be when we work together to protect our communities and I expect their great work will continue into the future.”
Each member of the Task Force brings a variety of skills, resources, and expertise to the team.
“The Simi Valley Police Department is committed to pursuing criminal offenders who engage in the creation and distribution of child sexual abuse material,” said SVPD Chief Steve Shorts. “Our department is committed to partnering with our federal and regional partners in order to assist in eradicating this worldwide problem and assist victims of sexual abuse.”
Task Force investigators believe there may be additional victims. If you have any information regarding Thomas Gissell, this case or other victims, please contact Detective Greg Webb of the Ventura County Sheriff’s Office, Thousand Oaks Sexual Assault Unit, at (805) 371-8309 or [email protected].
Assistant United States Attorney Kellye M. Ng of the Violent and Organized Crime Section is prosecuting this case.
A complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Surgeon Convicted of Federal Charges for Accepting over $300,000 in Illicit Payments to Perform Spinal Surgeries at Corrupt HospitalRead the Press Release
LOS ANGELES – An orthopedic surgeon has been found guilty by a federal jury of accepting more than $315,000 in bribes and kickbacks for performing spinal surgeries at a now-defunct Long Beach hospital whose owner was imprisoned for committing a massive workers’ compensation insurance fraud, the Justice Department announced today.
Dr. David Hobart Payne, 65, of Irvine, was found guilty late Friday afternoon at the conclusion of a six-day trial. The jury found Payne guilty of one count of conspiracy, two counts of honest services wire fraud, and one count of use of an interstate facility in aid of bribery.
According to court documents and evidence presented at trial, Michael Drobot –the owner of Pacific Hospital – conspired with doctors, chiropractors, and marketers to pay kickbacks and bribes in return for the referral of patients to Pacific Hospital for spinal surgeries and other medical services. These services and surgeries were paid for primarily through the California workers’ compensation system. During its final five years, the scheme resulted in the submission of more than $500 million in medical bills for spinal surgeries involving kickbacks.
Payne received bribes from Drobot of up to $15,000 for each spinal surgery that he performed at Pacific Hospital. The top bribe payment was for lumbar spinal surgeries Payne performed on patients at Pacific Hospital with implants from one of Drobot’s companies. Drobot and Payne covered up the bribes by disguising them as payments for marketing services and fees based on a sham contract.
In total, Payne received more than $315,000 in illegal payments.
In April 2013, law enforcement searched Pacific Hospital, which was sold later that year, bringing the kickback scheme to an end.
To date, 24 defendants, among them doctors and surgeons, have been convicted for participating in the kickback scheme.
United States District Judge Josephine L. Staton scheduled a June 2 sentencing hearing, at which time Payne will face a statutory maximum sentence of 50 years in federal prison.
The FBI, IRS Criminal Investigation, United States Postal Service Office of Inspector General, and the California Department of Insurance investigated this matter.
First Assistant United States Attorney Joseph T. McNally and Assistant United States Attorneys Billy Joe McLain and Hava Mirell of the Violent and Organized Crime Section are prosecuting this case.
L.A. Man Sentenced to More Than 24 Years in Prison for $5.5 Million COVID Jobless Benefits Scam, Tax Fraud and Drug TraffickingRead the Press Release
SANTA ANA, California – A downtown Los Angeles man was sentenced today to 292 months in federal prison for fraudulently obtaining nearly $5.5 million in COVID-related jobless benefits by using the identities of California state prison inmates and other third parties, trafficking fentanyl and methamphetamine, and seeking to fraudulently obtain more than $356,400 in tax refunds.
Edward Kim, 37, was sentenced by United States District Judge James V. Selna, who ordered him to pay $5,458,050 in restitution to the California Employment Development Department (EDD) and $16,800 in restitution to the IRS.
Kim pleaded guilty in November 2022 to one count of conspiracy to distribute methamphetamine and fentanyl, one count of distribution of methamphetamine, one count of conspiracy to defraud the government with respect to claims, two counts of mail fraud, and two counts of possession of 15 or more unauthorized access devices.
Kim has been in federal custody since his arrest in this case in March 2021.
From May 2020 to March 2021, Kim and his co-conspirators submitted approximately 459 fraudulent unemployment insurance claims to EDD, using the names, Social Security numbers, dates of birth and other personal identifiable information (PII) of California state prison inmates and other people. Kim received the inmates’ information from various sources, including by purchasing PII from the dark web.
Kim and his accomplices submitted to the EDD online applications for unemployment insurance (UI) benefits that falsely represented the inmates and others were unemployed because of the economic crisis brought by the COVID-19 pandemic. Kim knowingly listed on the applications false mailing addresses, including his current and former apartments, to which the bank sent the EDD-approved debit cards containing UI funds. Kim then made cash withdrawals at bank branches.
In total, Kim and his co-conspirators received approximately $5,458,050 in fraudulently obtained UI funds.
In November 2019, Kim sent two packages – one containing nearly one pound (449.6 grams) of methamphetamine, the other containing over 300 fake oxycodone pills containing fentanyl – from a FedEx store in West Covina to the address of a UPS Store in Hawaii. Kim’s co-conspirator in Hawaii arrived at the UPS Store to pick up the packages, but law enforcement arrested him before he could do so.
In July 2020, Kim began renting a warehouse in La Habra where he stored equipment and materials for the manufacture and distribution of narcotics, including pill presses and dies, pill bottles, scales, and various binding agents. He also maintained a marijuana grow operation at the La Habra warehouse.
Beginning in March 2020, he conspired with others to defraud the United States by using stolen identities to file false and fraudulent income tax returns to fraudulently claim tax refunds. The tax returns included false information designed to qualify for COVID pandemic-related Economic Impact Payments (EIP), which the federal government provided on three occasions in 2020 and 2021. Together with his co-conspirators, Kim caused at least 297 fraudulent tax returns to be filed with the IRS which sought more than $356,400 in fraudulent EIP from the United States.
During a traffic stop in La Habra in November 2020, law enforcement found approximately 22 grams of methamphetamine in Kim’s car, along with a digital scale, and 16 debit cards in the names of other people.
Another search in March 2021 at Kim’s luxury apartment near L.A. Live resulted in law enforcement finding nearly 35 grams of methamphetamine, dozens of EDD letters and mailings, and a notebook marked “stimulus scheme,” which contained approximately 405 different identities.
A search of the La Habra warehouse in 2021 led to the discovery of more EDD paperwork, ATM withdrawal receipts, and nearly 296 grams of methamphetamine. A 9mm Polymer80 handgun with no serial number – commonly referred to as a “ghost gun” – also was found at the La Habra warehouse during a subsequent search later than year.
Homeland Security Investigations, IRS Criminal Investigation, the United States Department of Labor’s Office of Inspector General, the California Employment Development Department – Investigation Division, the California Department of Corrections and Rehabilitation – Special Service Unit, the La Habra Police Department, and the Hawaii Police Department investigated this matter.
Assistant United States Attorneys Andrew M. Roach of the Cyber and Intellectual Property Crime Section and Julia Hu of the Major Frauds section prosecuted this case.
Anyone with general information about allegations of attempted fraud involving COVID-19 can report it by calling the Justice Department’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.
Court Finds Gross Negligence, Orders Oil Company to Pay United States and State of California $65 MillionRead the Press Release
On March 2, the U.S. District Court for the Central District of California entered final judgment against HVI Cat Canyon Inc., formerly known as Greka Oil & Gas Inc., in a civil suit brought jointly by the United States, on behalf of the U.S. Environmental Protection Agency (EPA) and the U.S. Coast Guard, and by the State of California on behalf of the California Department of Fish and Wildlife (CDFW) and the California Regional Water Quality Control Board, Central Coast Region.
The United States and California filed the suit alleging that HVI Cat Canyon, which previously owned and operated multiple oil and gas production facilities in Santa Barbara County, California, was liable for:
- 12 oil spills into waters of the United States in violation of the Clean Water Act;
- 17 oil spills into waters of the state in violation of state law;
- Reimbursement of the federal and state governments’ costs of cleaning up the oil spills;
- Natural resource damages under state law for harm to fish, plant, bird, or animal life and habitat; and
- Numerous violations of federal Oil Pollution Prevention Regulations identified in 16 EPA inspections across 11 facilities.
The court’s judgment follows an earlier 65-page opinion dated Feb. 25, in which the court awarded the United States and California the full amount of civil penalties, response costs, and damages that they sought at trial.
“We applaud the court’s decision to hold HVI Cat Canyon responsible for the full extent of the harm they caused,” said Assistant Attorney General Todd Kim of the Justice Department’s Environmental and Natural Resources Division. “This outcome is a prime example of strong federal and state partnership and persistence in pursuing justice against a company that long flouted its compliance obligations.”
“This final judgment reflects EPA’s continued commitment to ensuring companies that operate oil and gas production facilities comply with federal clean water laws and prevent unnecessary oil spills,” said Regional Administrator Martha Guzman of EPA Pacific Southwest. “Holding companies responsible for failing to meet their environmental obligations is key to protecting our waterways and surrounding communities.”
“The California Department of Fish and Wildlife is committed to protecting our state’s pristine natural resources,” said CDFW Director Charlton H. Bonham. “Staff from our Office of Spill Prevention and Response work daily to prevent, prepare for and respond to oil spill incidents statewide. The collective efforts of state and federal regulators to hold this company accountable for the significant impacts they have caused is evidence of our dedication to fighting every day for the resources we hold in trust for all Californians.”
“HVI Cat Canyon, formerly GREKA, is being held accountable in their long history of multiple violations and on-going non-compliance across many agencies,” said Regional Water Board Chair Jane Gray. “This judgment is a testament to the multi-year efforts of agencies and the legal system’s ability to provide justice for egregious actions perpetrated against the environment.”
The court found that the 12 spills into waters of the United States, which occurred from 2005 through 2010, resulted from HVI Cat Canyon’s gross negligence. “Based on the totality of the circumstances, the spills evinced a pattern of reckless disregard for good oilfield industry practices, and a series of negligent acts or omissions by HVI concerning oil spill prevention, and pipeline and facility inspection and maintenance,” the court wrote. In total, the court found that the spills had discharged approximately 26,584 barrels of crude oil and produced water, a briny waste by-product of oil production. The court also ruled that HVI Cat Canyon had committed a total of 60 violations of the federal regulations at 11 facilities for a total of 86,842 days of violation.
Ultimately the court held HVI Cat Canyon liable to the United States for $40 million in civil penalties for the spills, $15 million in civil penalties for the violations of federal regulations, and $2.5 million in cleanup costs. The court also held HVI Cat Canyon liable to California for $7.7 million in civil penalties and nearly $200,000 in natural resource damages and cleanup costs.
The case is styled United States, et al. v. HVI Cat Canyon, Inc., formerly known as Greka Oil & Gas Inc., No. 2:11-cv-05097-FMO-SS (C.D. Cal.). The court’s order is available through the court’s website, www.cacd.uscourts.gov.
Three Women Indicted for Alleged Scheme that Used Prison Inmates’ Identities to Fraudulently Obtain Federal Student LoansRead the Press Release
LOS ANGELES – Three women were arrested this week on a federal grand jury indictment alleging they ran a federal student aid fraud scheme that used the identities of California prison inmates and other victims to fraudulently enroll in an Orange County-based community college and obtain federal student loans totaling nearly $1 million, the Justice Department announced today.
The six-count indictment charges the following defendants with one count of conspiracy to commit wire fraud affecting a financial institution and bank fraud:
- Nyisha Ramsey, 43, of Lancaster;
- Dionne Ramsey, 36, of Las Vegas, who is Nyisha Ramsey’s sister; and
- Sharyn Barney, 62, of Lancaster, who is Nyisha Ramsey’s mother-in-law.
Dionne Ramsey faces four additional counts of wire fraud affecting a financial institution. Dionne Ramsey and Barney also have been charged with one count of bank fraud.
According to the indictment returned in December 2022 and unsealed this week, from January 2012 to August 2017, the defendants allegedly obtained personally identifying information, including names and Social Security numbers, of state prison inmates and other victims, and used this information to fraudulently enroll in community colleges.
The defendants allegedly then posed as the straw students to apply for federal student aid using the Free Application for Federal Student Aid (FAFSA) and directed those funds to bank accounts they controlled. Those funds, according to the indictment, were used for personal expenses and were not used for permitted educational costs at a community college in Orange County as they were supposed to be.
As a result of their alleged scheme, the defendants fraudulently caused the United States Treasury to disburse approximately $980,000 in FSA funds on behalf of straw students.
The United States Department of Education oversees the administration of Title IV Federal Student Assistance. This includes the administration of Direct Loan Programs for low-interest loans to eligible students to help cover the cost of higher education, and the Pell Grant Program to assist eligible needy students in meeting the costs of post-secondary education. According to federal regulations, federal student-loan funds can only be used to pay the cost of attending an institution of higher education. Incarcerated individuals are not eligible to receive such funds.
All three defendants were arrested this week and were ordered released on bond. Nyisha Ramsey and Barney were arraigned and have pleaded not guilty to the charges against them. An April 25 trial date has been scheduled for them. Dionne Ramsey, who made her initial court appearance on Thursday in the District of Nevada, is expected to be arraigned in Los Angeles in the coming weeks.
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.
If convicted of all charges, each defendant would face a statutory maximum sentence of 30 years in federal prison for each count.
The United States Department of Education and Department of Housing and Urban Development investigated the matter.
Assistant United States Attorneys Daniel H. Weiner of the General Crimes Section and Maxwell K. Coll of the Asset Forfeiture and Recovery Section are prosecuting this case.
Man Who Allegedly Shot Two Jewish Victims Leaving Los Angeles Synagogues Indicted for Multiple Hate Crime and Firearms OffensesRead the Press Release
LOS ANGELES – A federal grand jury today returned a four-count indictment charging a former Riverside resident with hate crime and firearms offenses for allegedly shooting two Jewish men after they left synagogues in the Pico-Robertson area of Los Angeles last month.
Jaime Tran, 28, is charged with two hate crime counts for willfully causing bodily injury and attempting to kill his victims. The grand jury further charged Tran with two counts of discharging a firearm in relation to a crime of violence.
Tran has been in federal custody since his February 17 arrest on a criminal complaint in this case. His arraignment is scheduled for March 9 in United States District Court in downtown Los Angeles.
According to the indictment, Tran developed and espoused antisemitic beliefs and made violent threats toward Jewish people. For example, in 2018, Tran left dental school after making hate-filled statements about other students whom he perceived to be Jewish, the indictment states.
From August 2022 to December 2022, Tran’s antisemitic statements escalated and used increasingly violent language, including against a former classmate whom he repeatedly called and texted with messages such as “I want you dead, Jew. Someone is going to kill you, Jew,” and “Burn in an oven chamber,” the indictment alleges.
In November 2022, Tran allegedly emailed two dozen former classmates a flyer containing antisemitic propaganda, including the statement, “EVERY SINGLE ASPECT OF THE COVID AGENDA IS JEWISH.”
Tran allegedly acquired at least two firearms before the attacks and performed internet searches for “kosher markets” to learn areas where Jewish people congregate.
At approximately 9:45 a.m. on February 15, 2023, Tran allegedly drove to the Pico-Robertson neighborhood of Los Angeles, located an individual identified in the indictment as “Victim A,” who was wearing a black jacket and yarmulke, and had just left religious services at a synagogue. Tran allegedly shot Victim A in the back at close range, intending to kill him, but Victim A, though wounded, survived.
The following morning, Tran returned to the Pico-Robertson area, intending to kill another Jewish person, according to the indictment. At approximately 8 a.m., Tran allegedly approached an individual wearing a dark-colored jacket and yarmulke and who is identified in the indictment as “Victim B.” Tran, intending to kill Victim B, allegedly shot and wounded the victim, who survived the attack.
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.
If convicted of all charges, Tran would face a statutory maximum sentence of life in federal prison for each hate crime count, and a maximum of life and mandatory minimum sentence of 10 years for each firearms count.
The FBI and the Los Angeles Police Department are investigating this matter. The Riverside County Sheriff’s Department, the Cathedral City Police Department and the Fountain Valley Police Department provided substantial assistance.
Assistant United States Attorneys Kathrynne Seiden and Maria Jhai of the Terrorism and Export Crimes Section and Frances Lewis of the Public Corruption and Civil Rights Section are prosecuting this case.
15 Arrested in Law Enforcement Operation Targeting Fraudulent Withdrawal of Benefits Designated for Low-Income FamiliesRead the Press Release
LOS ANGELES – “Operation Urban Justice,” a large-scale law enforcement operation this week, has resulted in the arrest of 15 individuals who allegedly used information from “skimmed” electronic benefit transfer (EBT) cards to make unauthorized withdrawals of funds that had been disbursed to low-income individuals, the Justice Department announced today.
More than 300 law enforcement officers early Wednesday morning began monitoring about 20 ATM locations across the Los Angeles area and identified individuals who were making multiple cash withdrawals with cards encoded with information that had been stolen from cards used by the California Department of Social Services to provide CalFresh and CalWORKs benefits to qualified recipients.
Authorities made arrests after determining that the suspects at the ATMs were not entitled to access funds that had been deposited into beneficiary’s accounts. At this time, federal prosecutors have filed five criminal complaints charging defendants with the use of unauthorized access devices (the cards used to make the cash withdrawals) or possession of 15 or more unauthorized access devices, and they are expected to file additional cases later today and tomorrow. The defendants arrested, many of them Romanian nationals, are expected to begin making initial appearances this afternoon in United States District Court.
The Los Angeles Police Department started the investigation into the fraudulent withdrawal of benefits in August 2022, and the United States Secret Service soon after joined “Operation Urban Justice” as a joint partner.
A number of law enforcement agencies are providing significant support, which included participating in Wednesday’s takedown, including U.S. Customs and Border Protection, Homeland Security Investigations, U.S. Immigration and Customs Enforcement, the Glendale Police Department, the Los Angeles County Sheriff’s Department, the California Department of Social Services, the United States Department of Agriculture’s Office of Inspector General, and the Romanian Brigade for Combatting Criminal Organizations (which is part of the Romanian National Police).
Documents filed in federal court outline how the California Department of Social Services has identified more than $38.9 million in funds stolen from victims’ EBT cards. This fraud has targeted CalWORKs and CalFresh (previously known as “food stamps”), both of which are intended to help low-income beneficiaries purchase food and provide for basic needs.
The investigation has revealed that the fraudulent withdrawal of these benefits is done with “cloned” cards, which are debit cards, gift cards or other devices with magnetic strips that have been encoded with information from legitimate EBT cards. Court documents allege that at least some of those involved in the fraudulent withdrawals obtained stolen EBT card information from “skimming” devices that were installed on ATM machines.
“By stealing public benefits using counterfeit EBT cards, the defendant in these cases plundered the accounts of some of our community’s poorest residents—people who need these benefits to survive,” said United States Attorney Martin Estrada. “These actions are part of a larger assault on the EBT system, one which has caused tens of millions of dollars in losses. Working with our law enforcement partners who have devoted untold resources to combating this issue, my Office will continue to do everything in our power to stop criminals from victimizing people in our community, especially those who are most vulnerable.”
“Today’s successful operation demonstrates how a sophisticated and extensive criminal scheme can be disrupted and dismantled by a team of law enforcement professionals who approach their investigation with an even greater degree of cooperation,” said James Huse, Special Agent in Charge with the Los Angeles Field Office of the United States Secret Service. “The results of this investigation are a testament to strong partnerships across the law enforcement community. Our efforts today serve to protect the Electronic Benefits Transfer system and ensure that public funds reach those who need them without delay or distress.”
“On March 1, 2023, the Los Angeles Police Department's Commercial Crimes Division partnered with the United States Secret Service and other federal law enforcement agencies to conduct a collaborative enforcement operation targeting the State of California’s Electronic Benefits Transfer (EBT) fraud issue with losses in the tens of millions of dollars,” said Los Angeles Police Chief Michel Moore. “The operation involved numerous Los Angeles Police Department personnel and resulted in the recovery of 429 cloned state issued EBT cards, $129,000 in US currency unlawfully drawn from ATM machines at several Southern California banking institutions, as well as resulting in the arrests of 11 Romanian national individuals for EBT access card fraud with losses totaling over $1000-a federal felony. All of the individual cases will be filed by the United States Department of Justice (USDOJ), United States Attorney’s Office (USAO) for federal prosecution.”
On February 2, as part of Operation Urban Justice, three additional defendants were arrested after they allegedly withdrew funds from ATM machines in Hollywood and Tarzana with cloned EBT cards. All three were subsequently named in federal indictments that charge them with bank fraud (which carries a statutory maximum penalty of 30 years in federal prison), aggravated identity theft, unlawful use of unauthorized access devices and possession of 15 or more unauthorized access devices.
Criminal complaints and indictments contain allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
The United States Secret Service and the Los Angeles Police Department are investigating these matters.
Assistant United States Attorneys Nisha Chandran and Joshua O. Mausner of the General Crimes Section are prosecuting these cases. Substantial assistance was provided by the following Assistant United States Attorneys, all from the General Crimes Section: Laura A. Alexander, Jeremy K. Beecher, Haoxiaohan H. Cai, Declan T. Conroy, Alexander S. Gorin, David C. Lachman, Kelly L. Larocque, Jena A. MacCabe, Angela C. Makabali, Sonya A. Nevarez, Daniel H. Weiner, and David W. Williams.
CEO of Publicly Traded Health Care Company Charged for Insider Trading SchemeRead the Press Release
An indictment was unsealed today charging Terren S. Peizer, the CEO and Chairman of the Board of Directors of Ontrak Inc., a publicly traded health care company, for allegedly engaging in an insider trading scheme in which he fraudulently used Rule 10b5-1 trading plans to trade Ontrak stock.
“Today’s groundbreaking insider trading indictment demonstrates that the Department of Justice, together with our law enforcement partners, will not allow corrupt executives to misuse 10b5-1 plans as a shield for insider trading,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “As this case shows, we have embraced the use of data to proactively identify and investigate fraud as we continue to ensure that ordinary investors are on an equal playing field with corporate insiders.”
According to court documents, between May and August 2021, Peizer, 63, a resident of Puerto Rico and Santa Monica, California, allegedly avoided more than $12.5 million in losses by entering into two Rule 10b5-1 trading plans while in possession of material, nonpublic information concerning the serious risk that Ontrak’s then-largest customer would terminate its contract. In May 2021, Peizer allegedly entered into his first 10b5-1 trading plan shortly after learning that the relationship between Ontrak and the customer was deteriorating and that the customer had expressed serious reservations about continuing its contract with Ontrak. The indictment alleges that Peizer later learned that the customer informed Ontrak of its intent to terminate the contract. Then, in August 2021, Peizer allegedly entered into his second 10b5-1 trading plan approximately one hour after Ontrak’s chief negotiator for the contract confirmed to Peizer that the contract likely would be terminated.
In establishing his 10b5-1 plans, Peizer allegedly refused to engage in any “cooling-off” period – the time between when he entered into the plan and when he sold stock – despite warnings from two brokers. Instead, Peizer allegedly began selling shares of Ontrak on the next trading day after establishing each plan. On Aug. 19, 2021, just six days after Peizer adopted his August 10b5-1 plan, Ontrak announced that the customer had terminated its contract and Ontrak’s stock price declined by more than 44%.
“Mr. Peizer is accused of using his insider knowledge as CEO of a publicly traded company to line his own pockets in violation of his duty to his company and its shareholders,” said U.S. Attorney Martin Estrada for the Central District of California. “Mr. Peizer allegedly exploited material nonpublic information and tried to shield himself with a rule designed to ensure a fair and level playing field for all investors. With this indictment, we again affirm that the law applies equally to all and that corporate executives who unlawfully denigrate the integrity of our financial markets will be held accountable.”
“The FBI and our partners are committed to holding insiders accountable at all levels, including those who act in bad faith when establishing trading plans in order to evade regulations,” said Assistant Director in Charge Donald Alway of the FBI Los Angeles Field Office. “Americans must have trust in the marketplace and that can only be achieved when offenders who violate their obligations are held responsible.”
Peizer is charged with one count of engaging in a securities fraud scheme and two counts of securities fraud for insider trading. If convicted, he faces a maximum penalty of 25 years in prison on the securities fraud scheme charge and 20 years in prison on each of the insider trading charges.
The indictment represents the first time that the Department of Justice has brought criminal insider trading charges based exclusively on an executive’s use of 10b5-1 trading plans. The investigation is part of a data-driven initiative led by the Fraud Section to identify executive abuses of 10b5-1 trading plans.
Rule 10b5-1 trading plans can offer an executive a defense to insider trading charges. However, the defense is unavailable if the executive is in possession of material, nonpublic information at the time he or she enters into the 10b5-1 trading plan. Additionally, a plan does not protect an executive if the trading plan was not entered into in good faith or was entered into as part of an effort or scheme to evade the prohibitions of Rule 10b5-1.
The FBI is investigating the case.
Trial Attorneys Matthew Reilly and Christina McGill of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Ali Moghaddas for the Central District of California are prosecuting the case.
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]. For additional information and case event updates, please visit www.justice.gov/criminal-vns/case/united-states-v-terren-s-peizer.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
CEO of Nevada-Based Publicly Traded Health Care Company Charged with Federal Crimes for Alleged Insider Trading SchemeRead the Press Release
LOS ANGELES – An indictment was unsealed today charging Terren S. Peizer, the CEO and Chairman of the Board of Directors of Ontrak Inc., a Henderson, Nevada-based publicly traded health care company, for allegedly engaging in an insider trading scheme in which he fraudulently used Rule 10b5-1 trading plans to trade Ontrak stock.
“Mr. Peizer is accused of using his insider knowledge as CEO of a publicly traded company to line his own pockets in violation of his duty to his company and its shareholders,” said United States Attorney Martin Estrada. “Mr. Peizer allegedly exploited material nonpublic information and tried to shield himself with a rule designed to ensure a fair and level playing field for all investors. With this indictment, we again affirm that the law applies equally to all and that corporate executives who unlawfully denigrate the integrity of our financial markets will be held accountable.”
According to court documents, between May and August 2021, Peizer, 63, a resident of Puerto Rico and Santa Monica, allegedly avoided more than $12.5 million in losses by entering into two Rule 10b5-1 trading plans while in possession of material, nonpublic information concerning the serious risk that Ontrak’s then-largest customer would terminate its contract. In May 2021, Peizer allegedly entered into his first 10b5-1 trading plan shortly after learning that the relationship between Ontrak and the customer was deteriorating and that the customer had expressed serious reservations about continuing its contract with Ontrak.
The indictment alleges that Peizer later learned that the customer informed Ontrak of its intent to terminate the contract. Then, in August 2021, Peizer allegedly entered into his second 10b5-1 trading plan approximately one hour after Ontrak’s chief negotiator for the contract confirmed to Peizer that the contract likely would be terminated.
In establishing his 10b5-1 plans, Peizer allegedly refused to engage in any “cooling-off” period – the time between when he entered into the plan and when he sold stock – despite warnings from two brokers. Instead, Peizer allegedly began selling shares of Ontrak on the next trading day after establishing each plan. On Aug. 19, 2021, just six days after Peizer adopted his August 10b5-1 plan, Ontrak announced that the customer had terminated its contract and Ontrak’s stock price declined by more than 44%.
“Today’s groundbreaking insider trading indictment demonstrates that the Department of Justice, together with our law enforcement partners, will not allow corrupt executives to misuse 10b5-1 plans as a shield for insider trading,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “As this case shows, we have embraced the use of data to proactively identify and investigate fraud as we continue to ensure that ordinary investors are on an equal playing field with corporate insiders.”
“The FBI and our partners are committed to holding insiders accountable at all levels, including those who act in bad faith when establishing trading plans in order to evade regulations,” said Assistant Director in Charge Donald Alway of the FBI Los Angeles Field Office. “Americans must have trust in the marketplace and that can only be achieved when offenders who violate their obligations are held responsible.”
Peizer is charged with one count of engaging in a securities fraud scheme and two counts of securities fraud for insider trading. If convicted, he faces a maximum penalty of 25 years in prison on the securities fraud scheme charge and 20 years in prison on each of the insider trading charges.
The indictment represents the first time that the Department of Justice has brought criminal insider trading charges stemming from an executive’s use of a 10b5-1 trading plan. The investigation is part of a data-driven initiative led by the Fraud Section to identify executive abuses of 10b5-1 trading plans.
Rule 10b5-1 trading plans can offer an executive a defense to insider trading charges. However, the defense is unavailable if the executive is in possession of material, nonpublic information at the time he or she enters into the 10b5-1 trading plan. Additionally, a plan does not protect an executive if the trading plan was not entered into in good faith or was entered into as part of an effort or scheme to evade the prohibitions of Rule 10b5-1.
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 is investigating the case.
Assistant U.S. Attorney Ali Moghaddas of the Major Frauds Section and Justice Department Trial Attorneys Matthew Reilly and Christina McGill of the Criminal Division’s Fraud Section are prosecuting the case.
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]. For additional information and case event updates, please visit www.justice.gov/criminal-vns/case/united-states-v-terren-s-peizer.
Co-Leader of COVID-19 Loan Fraud Ring Extradited from Montenegro to Begin Serving Prison SentenceRead the Press Release
LOS ANGELES – A Southern California woman who fled to Montenegro to avoid serving a lengthy prison sentence has been returned to the United States after spending approximately one year as a fugitive.
Tamara Dadyan, 43, of Encino, was extradited by Montenegro and arrived in Los Angeles Monday evening. She is expected to appear this afternoon in United States District Court in Los Angeles.
According to court documents, Dadyan was a member of a Los Angeles-based fraud ring that schemed to fraudulently obtain more than $20 million in Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) COVID-19 relief funds. Dadyan and her co-conspirators used dozens of fake, stolen or synthetic identities – including names belonging to elderly or deceased people and foreign exchange students who briefly visited the United States years ago and never returned – to submit fraudulent applications for approximately 150 PPP and EIDL loans.
In support of the fraudulent loan applications, Dadyan and her co-conspirators also submitted false and fictitious documents to lenders and the Small Business Administration (SBA), including fake identity documents, tax documents and payroll records. Dadyan and her co-conspirators then used the fraudulently obtained funds as down payments on three luxury homes in California. They also used the funds to buy gold coins, diamonds, jewelry, luxury watches, designer handbags, cryptocurrency, securities and a Harley-Davidson motorcycle.
In June 2021, Dadyan pleaded guilty to one count of conspiracy to commit wire fraud and bank fraud, one count of conspiracy to commit money laundering and one count of aggravated identity theft. She was sentenced in December 2021 to 130 months in prison.
In January 2022, Dadyan fled the United States. U.S. authorities determined Dadyan had fled to Montenegro where she joined Richard Ayvazyan and Marietta Terabelian, two other participants in the scheme and conspiracy who also fled after their convictions. Ayvazyan and Terabelian, who were respectively sentenced to 17 years and six years in prison, were extradited to the United States from Montenegro in November 2022.
United States Attorney Martin Estrada; Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division; Special Agent in Charge Tyler Hatcher of the IRS Criminal Investigation (IRS-CI), Los Angeles Field Office; Special Agent in Charge Weston King of the SBA’s Office of Inspector General (SBA-OIG), Western Region; and Special Agent in Charge Jay N. Johnson of the Federal Housing Finance Agency’s Office of Inspector General (FHFA-OIG), Western Region made the announcement.
The Government of Montenegro, including the Ministry of Justice, provided significant assistance in the extradition of Dadyan to the United States. The Justice Department’s Office of International Affairs also provided substantial assistance in securing the arrest and extradition of Dadyan.
The FBI’s Los Angeles Field Office, IRS-CI, SBA-OIG, and FHFA-OIG investigated the case. The U.S. Marshals Service transported Dadyan from Montenegro to the United States.
Trial Attorney Christopher Fenton of the Criminal Division’s Fraud Section, and Assistant United States Attorneys Scott Paetty and Brian Faerstein are prosecuting the case. Assistant United States Attorney Dan Boyle is handling forfeiture proceedings. Trial Attorney Goran Krnaich and International Affairs Specialist Marina Shimarova of the Justice Department’s Office of International Affairs handled the extraditions, with significant assistance from Assistant United States Attorney John Lulejian.
The Fraud Section leads the Criminal Division’s prosecution of fraud schemes that exploit the PPP. Since the inception of the CARES Act, the Fraud Section has prosecuted more than 200 defendants in more than 130 criminal cases and has seized over $78 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real estate properties and luxury items purchased with such proceeds. More information can be found at https://www.justice.gov/criminal-fraud/ppp-fraud.
In May 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Co-Leader of COVID-19 Loan Fraud Ring Extradited from Montenegro to Begin Serving Prison SentenceRead the Press Release
A California woman who fled to Montenegro to avoid serving a lengthy prison sentence has been returned to the United States after spending approximately one year as a fugitive.
Tamara Dadyan, 43, of Encino, was extradited by Montenegro and arrived in Los Angeles Monday evening. She is expected to appear this afternoon in the U.S. District Court in Los Angeles.
According to court documents, Dadyan was a member of a Los Angeles-based fraud ring who engaged in a scheme to fraudulently obtain more than $20 million in Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) COVID-19 relief funds. Dadyan and her co-conspirators used dozens of fake, stolen, or synthetic identities – including names belonging to elderly or deceased people and foreign exchange students who briefly visited the United States years ago and never returned – to submit fraudulent applications for approximately 150 PPP and EIDL loans.
In support of the fraudulent loan applications, Dadyan and her co-conspirators also submitted false and fictitious documents to lenders and the Small Business Administration (SBA), including fake identity documents, tax documents, and payroll records. Dadyan and her co-conspirators then used the fraudulently obtained funds as down payments on three luxury homes in California. They also used the funds to buy gold coins, diamonds, jewelry, luxury watches, designer handbags, cryptocurrency, securities, and a Harley-Davidson motorcycle.
In June 2021, Dadyan pleaded guilty to one count of conspiracy to commit wire fraud and bank fraud, one count of conspiracy to commit money laundering, and one count of aggravated identity theft. She was sentenced in December 2021 to 10 years and 10 months in prison.
In January 2022, Dadyan fled the United States. U.S. authorities determined Dadyan had fled to Montenegro where she joined Richard Ayvazyan and Marietta Terabelian, two other participants in the scheme and conspiracy who also fled after their convictions. Ayvazyan and Terabelian, who were respectively sentenced to 17 years and six years in prison, were extradited to the United States from Montenegro in November 2022.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division; U.S. Attorney Martin Estrada for the Central District of California; Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division; Special Agent in Charge Tyler Hatcher of the IRS Criminal Investigation (IRS-CI) Los Angeles Field Office; Special Agent in Charge Weston King of the SBA Office of Inspector General (SBA-OIG), Western Region; and Special Agent in Charge Jay N. Johnson of the Federal Housing Finance Agency Office of Inspector General (FHFA-OIG), Western Region, made the announcement.
The Government of Montenegro, including the Ministry of Justice, provided significant assistance in the extradition of Dadyan to the United States. The Justice Department’s Office of International Affairs also provided substantial assistance in securing the arrest and extradition of Dadyan.
The FBI Los Angeles Field Office, IRS-CI, SBA-OIG, and FHFA-OIG investigated the case. The U.S. Marshals Service transported Dadyan from Montenegro to the United States.
Trial Attorney Christopher Fenton of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Brian Faerstein and Scott Paetty for the Central District of California are prosecuting the case. Assistant U.S. Attorney Dan Boyle for the Central District of California is handling forfeiture. Trial Attorney Goran Krnaich and International Affairs Specialist Marina Shimarova of the Justice Department’s Office of International Affairs handled the extraditions with assistance from Assistant U.S. Attorney John Lulejian for the Central District of California.
The Fraud Section leads the Criminal Division’s prosecution of fraud schemes that exploit the PPP. Since the inception of the CARES Act, the Fraud Section has prosecuted more than 200 defendants in more than 130 criminal cases and has seized over $78 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real estate properties and luxury items purchased with such proceeds. More information can be found at https://www.justice.gov/criminal-fraud/ppp-fraud.
In May 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Riverside County Tax Preparer Pleads Guilty to Knowingly Preparing False Tax Returns that Caused over $3 Million in Losses to IRSRead the Press Release
LOS ANGELES – A Riverside tax preparer pleaded guilty today to federal criminal charges for knowingly filing thousands of tax returns that falsely claimed deductions, such as fake medical expenses and bogus mortgage interest, and which caused more than $3 million in losses to the IRS.
Andrew Zepeda Hansack, 39, pleaded guilty to two counts of aiding and assisting in the preparation of a false tax return.
According to his plea agreement, starting in January 2015, Hansack prepared personal income tax returns at AJ Loyal Income Tax Service, a Riverside-based company. Hansack filed tax returns for some of his clients that included false itemized deductions. Specifically, Hansack filed tax returns for these clients that indicated they had paid mortgage interest for their homes, when in truth, as Hansack knew, his clients did not own a home. Hansack also claimed false medical expenses, sales tax, and gifts by cash or check on some tax returns he prepared that he knew to be false.
For the tax years 2015 through 2019, Hansack filed approximately 2,533 tax returns with false deductions on behalf of his clients. Because of Hansack’s criminal activity, the IRS was prevented from assessing and collecting the correct amount of taxes owed by the clients. This resulted in a loss in assessed and collected taxes to the IRS between approximately $3,369,886 and approximately $3,799,378.
For example, in February 2020, Hansack aided and assisted the preparation of a federal income tax return for a South Gate resident. This tax return falsely claimed $30,488 in itemized deductions, including deductions for mortgage interest. The false and fraudulent deductions caused the South Gate taxpayer to claim a refund from the IRS in the amount of $7,318 to which the taxpayer was not entitled.
Hansack has agreed to pay a criminal fine of at least $50,000 and also agreed to a permanent ban on him helping to prepare tax returns for anyone other than himself or his spouse.
United States District Judge Stephen V. Wilson scheduled a May 22 sentencing hearing, at which time Hansack will face a statutory maximum sentence of three years in federal prison for each count.
IRS Criminal Investigation investigated this matter.
Assistant United States Attorney Jeff Mitchell of the Major Frauds Section is prosecuting this case.
Former FBI Special Agent Sentenced to 6 Years in Prison for Accepting Bribes Paid by Attorney Linked to Organized Crime FigureRead the Press Release
LOS ANGELES – A former FBI special agent was sentenced today to 72 months in federal prison for conspiring to accept at least $150,000 in cash bribes and other items of value in exchange for providing sensitive law enforcement information to a corrupt attorney with ties to Armenian organized crime.
Babak Broumand, 56, of Lafayette, California, was sentenced by United States District Judge R. Gary Klausner. In addition to the prison sentence, Judge Klausner ordered Broumand to pay a $30,000 fine and to forfeit $132,309 linked to his criminal activity.
“Mr. Broumand took an oath of office, swearing to defend the laws of the United States and to uphold the high standards of the FBI. He violated this solemn promise and now he will face the consequences of his choice,” said United States Attorney Martin Estrada. “Not only did this one-time special agent put his self-interest above all else, but he also did so while providing support to other criminals who compromise public safety. I am grateful for our hard-working law enforcement partners, including the FBI, who worked to uncover this misconduct and brought this corrupt agent to justice.”
“Today's sentencing of Mr. Broumand, a former FBI agent who abandoned his pledge to serve the American people in exchange for a lavish lifestyle, is gratifying and reaffirms the FBI’s commitment to weeding out corruption of public officials, including those from within.” said Donald Alway, the Assistant Director in Charge of the FBI's Los Angeles Field Office. “I'm proud of the agents and prosecutors who devoted years to this sensitive investigation and trial which resulted in today's outcome and a restoration of trust by the people we serve.”
A federal jury in October 2022 found Broumand guilty of one count of conspiracy, two counts of bribery of a public official, and one count of monetary transactions in property derived from specified unlawful activity. The jury found Broumand not guilty of one count of bribery of a public official and one count of monetary transactions in property derived from specified unlawful activity.
Broumand has been in federal custody since the jury returned the guilty verdict against him at the conclusion of an 11-day trial.
“Broumand conspired with the very types of criminals he was trusted to investigate, taking bribes in exchange for information. Today’s sentencing should send a clear message that no one is above the law, and that the Department of Justice Office of the Inspector General is committed to rooting out this kind of corruption,” said Zachary Shroyer, Special Agent in Charge of the Department of Justice Office of the Inspector General Los Angeles Field Office.
“Every law enforcement officer took an oath to never betray their integrity and to enforce the law with fairness and justice when they enter this profession. Unfortunately, Babak Broumand betrayed that oath and violated the trust bestowed on him by the American people when he released sensitive law enforcement information in exchange for money, gifts, and other personal benefits,” said Darren Lian, Special Agent in Charge of the IRS Criminal Investigation’s Oakland Field Office. “Today’s sentence shows that no one is above the law, and those who dare to cross the line will be held responsible for their unlawful actions. IRS Criminal Investigation, along with its law enforcement partners, are fully committed to purse those who undermine the integrity of our justice system.”
Broumand was a Bay Area resident and served as an FBI special agent from January 1999 until shortly after search warrants were served on his home and businesses in 2018. He was responsible for national security investigations and was assigned to the FBI Field Office in San Francisco.
From January 2015 to December 2018, Broumand accepted cash, checks, private jet flights, a Ducati motorcycle, hotel stays, escorts, meals, and other items of value from an organized crime-linked attorney – identified in court papers as “E.S.,” and each man acted to conceal the true nature of their corrupt relationship.
In return for the bribe payments and other items of value, Broumand conducted law enforcement database inquiries and used those inquiries to help E.S. and his associates avoid prosecution and law enforcement monitoring. Specifically, Broumand informed E.S. whether a particular person or entity was under criminal investigation by stating that E.S. should “stay away” from that person or that they were “OK.”
To conceal the nature of their corrupt relationship, Broumand made it falsely appear that E.S. was working as an FBI source. Broumand wrote false reports after the fact to make it appear that he conducted legitimate law enforcement database inquiries.
In exchange for the illegal inquiries, E.S. paid Broumand at least $150,000 in cash and check bribes, including a Ducati motorcycle and accessories valued at more than $36,000. The bribes were deposited into the accounts for Love Bugs LLC, a Lafayette-based lice-removal hair salon business that Broumand and his wife started in 2007.
Soon after the bribery scheme began, E.S. asked Broumand to query the FBI database for Levon Termendzhyan, an Armenian organized crime figure for whom E.S. had worked. The database search “rang all the bells” and revealed an FBI investigation in Los Angeles, according to court documents, which note that Broumand accessed the FBI case file on Termendzhyan repeatedly in January 2015. Broumand also allegedly accessed the Termendzhyan FBI case file in May 2016.
Termendzhyan, a.k.a. “Lev Aslan Dermen,” was found guilty in March 2020 in federal court in Utah on criminal charges related to a $1 billion renewable fuel tax credit fraud scheme. His sentencing hearing in the District of Utah is scheduled for April 6.
In December 2015, at E.S.’s request, Broumand searched a confidential FBI database for information about Sam Sarkis Solakyan, a medical imaging company CEO, and later warned E.S. to “stay away” from Solakyan, who was “trouble,” meaning that Solakyan was under law enforcement investigation. Solakyan eventually was charged in San Diego federal court, tried, convicted and sentenced to five years in federal prison for running a scheme that submitted more than $250 million fraudulent claims through California’s workers compensation system.
In May 2016, Broumand interfered with an FBI investigation into Felix Cisneros Jr., a corrupt special agent with Homeland Security Investigations who also had ties to Termendzhyan. Cisneros was convicted at trial in two different cases. The first trial, in 2018, resulted from Cisneros’s corrupt acts for Termendzhyan. The second trial, in April 2022, resulted from Cisneros’s corrupt acts for E.S. Cisneros was sentenced to 10 years in federal prison.
The FBI, the United States Department of Justice’s Office of the Inspector General, and IRS Criminal Investigation investigated this matter. The United States Department of Homeland Security’s Office of the Inspector General provided assistance at Broumand’s trial.
Assistant United States Attorneys Michael J. Morse of the Public Corruption and Civil Rights Section, Juan M. Rodriguez of the Environmental and Community Safety Crimes Section, and Tara B. Vavere of the Asset Forfeiture and Recovery Section prosecuted this case.
Carson Man Sentenced to More Than 11 Years in Prison for Role in International Conspiracy to Launder Money Taken from Fraud VictimsRead the Press Release
LOS ANGELES – A Carson man who was a central figure in an international fraud and money-laundering network that targeted $25 million through a variety of frauds – including romance scams and elder fraud – was sentenced today to 135 months in federal prison.
Valentine Iro, 34, the lead defendant in a 252-count federal grand jury indictment that charged 80 individuals, was sentenced by United States District Judge R. Gary Klausner. Judge Klausner also ordered Iro to pay $1,397,553 in restitution.
Iro pleaded guilty in October 2020 to one count of conspiracy to engage in money laundering. He has been in federal custody since August 2019.
From October 2014 to August 2019, Iro helped lead a massive international criminal network that conspired to defraud individuals and companies all over the world and then to launder an intended amount of more than $25 million in intended ill-gotten gains. Known globally to fraudsters and their middlemen, Iro communicated primarily through encrypted messaging applications and phone calls. He worked to connect the fraudsters, who were committing various online scams, with money movers and bank accounts that could be used to receive and launder money from victims.
Iro knew that the scams included business email compromise (BEC) fraud, romance scams, and other fraud schemes. A native of Nigeria, Iro at times used code words and Nigerian pidgin – an English-based dialect used across that nation – to avoid detection by law enforcement. The fraudsters perpetrating these criminal activities largely were located outside the United States.
As part of the scheme, Iro negotiated his “cut” of the illegal proceeds that he would keep for himself for organizing the receipt and laundering of funds. He then would select or find a bank account, or assist in opening bank accounts, to be used to receive victims’ money. Iro collected bank account information for banks in the Los Angeles area and in other cities and nations often in preparation for requests to come from co-conspirators.
For romance scams and elder fraud, Iro sometimes used bank accounts under his personal control. For BEC frauds, if a bank account with a specific business name was required to trick a business-victim into making a payment, Iro often coordinated with “money movers” to open accounts that could receive funds obtained, according to court documents. In addition to making the fake business name mirror the name of a legitimate company, members of the conspiracy routinely filed fictitious business name statements with the Los Angeles County Registrar/Recorder’s Office that were presented to banks when the fraudulent accounts were opened.
Once a victim deposited funds into a bank account or a money service account, Iro coordinated with others to further launder the funds. Members of the conspiracy sometimes wired funds to other bank accounts under their control; in other cases, they simply withdrew funds as cash or negotiable instruments such as cashier’s checks.
When stolen funds were withdrawn as cash, the conspirators frequently used illicit money exchangers to move funds overseas, generally avoiding transferring the funds directly through banking institutions. To do this, Iro coordinated the transfer of a victim’s funds from a fraudulent bank account they controlled to U.S. bank accounts belonging to illicit money exchangers. Those money exchangers, in turn, used a Nigerian banking application to transfer other funds in naira (₦), the currency of Nigeria, from Nigerian bank accounts they controlled to the Nigerian bank accounts specified by Iro. This method was used to transfer millions of dollars to Nigerian co-conspirators without directly transferring funds overseas.
“This case is part of our multiprong approach to protect Americans from attempts to steal their money through elaborate scams being perpetrated around the world,” said United States Attorney Martin Estrada. “Through lies and deceit, these fraud artists try to fleece businesses and individuals, including the elderly and vulnerable. This case demonstrates that we can and will identify, charge, and prosecute fraudsters and their money laundering accomplices, no matter how far across the world their criminal network may stretch.”
“Defendant Iro masterminded this international money laundering scheme for years and, in the process, stole money and identities from hundreds of victims, including some who were led to believe they were in a romantic relationship only to learn they were being scammed,” said Donald Alway, the Assistant Director in Charge of the FBI's Los Angeles Field Office. “As we continue to investigate this case and look for fugitives, we urge Americans to learn how to identify BEC, romance, and other schemes, which have increased dramatically in recent years.”
Federal prosecutors have secured 21 convictions in this case so far. Additional defendants have been arrested in Nigeria, and others are at large.
The FBI Cyber Task Force led this investigation. The Justice Department also recognizes substantial assistance from the United States Department of State’s Diplomatic Security Service; the Los Angeles County District Attorney’s Office; the Orange County District Attorney’s Office; the Ventura County District Attorney’s Office; the San Bernardino Police Department; the Los Angeles County Sheriff’s Department; and the California Franchise Tax Board.
Many of the FBI’s Legal Attachés provided assistance throughout this investigation, as did the Office of International Affairs in the Justice Department’s Criminal Division and foreign authorities around the world.
Multiple private sector partners were also instrumental throughout this investigation, including Palo Alto Networks, Flashpoint, and the National Cyber-Forensics and Training Alliance (NCFTA).
Assistant United States Attorney Sue J. Bai of the Cyber and Intellectual Property Crimes Section is prosecuting this case.
The FBI has issued a report on the rise of BEC schemes, and published a recap of Operation WireWire, which was an international effort to disrupt international BEC scams. An FBI public service announcement that warns of the dangers of BEC schemes encourages businesses to “trust but verify.”
Chatsworth Man Sentenced to More Than 7 Years in Prison for Cyberstalking Campaigns Against Victims in California and GeorgiaRead the Press Release
LOS ANGELES – A San Fernando Valley man was sentenced today to 85 months in federal prison for stalking two sisters in California by sending them text messages that threatened them with rape and murder and for threatening and harassing a teenage girl in Georgia.
Alex Scott Roberts, 27, of Chatsworth, was sentenced by United States District Judge André Birotte Jr., who at today’s hearing called Roberts’ conduct “egregious.”
Roberts pleaded guilty in August 2022 to two counts of stalking. He has been in federal custody since December 2020.
In the California case, in July and August 2020, Roberts used text messages and internet communications to place the two victims “in reasonable fear of death and serious bodily injury,” and that he intended to cause “substantial emotional distress,” according to court documents.
After being told by an individual identified in court papers as “Victim 1” and her family that the woman did not want to communicate with Roberts, he created a listing on Craigslist that offered a room for rent at Victim 1’s home and invited prospective renters to “Stop by anytime,” court papers state.
Roberts then sent anonymous text messages to a friend of Victim 1 that demanded Victim 1’s phone number, threatened to publish nude photographs of Victim 1, and threatened to send someone to rape Victim 1.
He also sent numerous anonymous messages to Victim 1, Victim 1’s sister, and at least one friend of Victim 1, demanding Victim 1’s telephone number, threatening to send nude photographs of Victim 1, threatening to send someone to rape Victim 1 and her sister, and threatening to kill Victim 1 and her family.
In the Georgia case, in June 2020, Roberts sent a series of threatening and harassing messages to a 15-year-old girl, identified in court papers as “Minor 1.”
Roberts claimed to possess nude images of Minor 1 and threatened to send the images to her parents as “payback” if she did not send Roberts additional nude images. He then sent harassing and threatening messages to Minor 1 via both text message and Instagram.
In response to his threats to send nude images of Minor 1 to her family, Minor 1 sent Roberts “selfie” photographs of herself. Roberts responded by continuing to send Minor 1 harassing messages, including several messages containing edited versions of the “selfie” photographs Minor 1 had sent to Roberts in response to his threats.
“Only a few months after being paroled on state prison sentences related to stalking and extorting young women online…Roberts…began tormenting new victims,” prosecutors wrote in a sentencing memorandum. “His messages traumatized the victims, putting them in fear for their lives and the lives of their family.”
The FBI investigated this matter.
Assistant United States Attorney Lauren Restrepo of the Cyber and Intellectual Property Crimes Section prosecuted this case.
Alleged ‘SIM Swapper’ Charged with Hacking into Instagram Influencers’ Accounts to Get Money and Sexually Explicit Video ChatsRead the Press Release
LOS ANGELES – A Downtown Los Angeles man was charged today in a six-count federal grand jury indictment for allegedly defrauding female social media influencers, including by engaging in “SIM swapping” to hijack their Instagram accounts and obtain money from them and engage in sexually explicit video chats with him.
Amir Hossein Golshan, 24, is charged with two counts of wire fraud, one count of unauthorized access to a protected computer to obtain information, one count of accessing a computer to defraud and obtain value, one count of aggravated identity theft, and one count of threatening to damage a protected computer.
Golshan has been in federal custody since his arrest on a criminal complaint in this case on February 2. His arraignment is scheduled for Friday morning in United States District Court.
A Subscriber Identity Module (SIM) is a small, portable memory chip card that stores a cellphone user’s information and is used to authenticate cellphone subscribers.
“SIM swapping” is the process of fraudulently inducing a carrier to reassign a cellphone number from the legitimate subscriber or user’s SIM card to a SIM card controlled by another without the legitimate subscriber or user’s authorization.
According to the indictment and other court documents, from April 2019 to February 2023, Golshan schemed to defraud female social media influencers, models, and their friends on social media. Golshan allegedly accomplished his scheme by targeting social media influencers and causing the victims’ cell phone numbers to be SIM swapped. He allegedly did this by deceiving the victims’ phone carriers into transporting the victims’ cellphone number to a Golshan-controlled cellphone. Golshan then reset the password and codes for the victims’ social media accounts and caused them to be sent to a device he controlled, the indictment alleges.
Golshan then allegedly logged into the victims’ social media accounts, impersonated them to their online friends, and requested that the victims’ online friends send him money. Other times, Golshan allegedly extorted the victims for money and sexually explicit chats to return the victims’ social media accounts.
For example, in December 2021, a Los Angeles-based model and social media influencer identified in court documents as “Victim 1” received a direct message on Instagram from the account owned by one of her friends, stating, “Can you do me a favor? What’s your number?” Victim 1 provided her phone number to the person whom she believed was her friend.
Four hours later, Victim 1 noticed that her phone was no longer connecting to her cellphone network. She then received an email from her cellphone carrier stating that her account had been changed from her personal iPhone to a different iPhone that she did not recognize.
It took Victim 1 approximately two hours to regain control of her cellphone and she was unable to log into her Instagram account for one day because her password had been changed. During that time, Golshan allegedly hacked into Victim 1’s Instagram account, posed as Victim 1 and requested cellphone numbers and money from Victim’s friends, collecting approximately $15,000 in illicit gains in the process.
In another incident, Golshan allegedly SIM swapped another victim – identified in court papers as “Victim 3.” He allegedly took control of her Instagram account, changed its password, and demanded $5,000 from her. Golshan allegedly later told the victim that he would return her Instagram account to her if she initiated a video call and stripped for him.
Other times, Golshan allegedly engaged in other fraudulent schemes on social media. For example, Golshan lied to other Instagram users claiming that he could provide verified user badges on Instagram for a fee, the indictment states. Golshan allegedly then charged the victims hundreds of dollars each for verified badges, knowing that he could not provide the verified badges he purported to sell.
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.
If convicted of all charges, Golshan would face a statutory maximum sentence of 20 years in federal prison for each wire fraud count, up to five years in federal prison for each computer hacking-related count, and a mandatory two-year prison sentence for the aggravated identity theft count.
The FBI is investigating this matter.
Assistant United States Attorney Andrew M. Roach of the Cyber and Intellectual Property Crimes Section is prosecuting this case.
Former MoviePass Executive Arrested on Indictment Alleging He Embezzled $260,000 from Employer to Repay Coachella DebtRead the Press Release
LOS ANGELES – A former executive at cinema subscription service MoviePass Inc. has been arrested on a federal grand jury indictment alleging he embezzled approximately $260,000 from MoviePass’ parent company to repay money he borrowed to produce an event at the Coachella music festival, the Justice Department announced today.
Khalid Itum, 42, of Hollywood, was arrested by special agents with the FBI on Tuesday. Itum is charged with two counts of wire fraud and two counts of money laundering.
At his arraignment Tuesday afternoon in United States District Court, Itum pleaded not guilty to the charges, and an April 18 trial date was scheduled. He was ordered released on $75,000 bond.
According to the indictment returned Friday by a federal grand jury, Itum was a MoviePass executive from November 2017 until March 2019. MoviePass was a New York-based company that charged subscribers a flat monthly fee in exchange for credits they could spend on movie tickets from any theater in MoviePass’s network of participating cinemas. In August 2017, Helios & Matheson Analytics (HMNY), a New York-based data analytics company, acquired MoviePass.
In the spring of 2017, Itum registered Kaleidoscope Productions LLC, a Los Angeles-based company that provided production and marketing services. That year, Itum, through Kaleidoscope, organized a party at the annual Coachella Valley Music and Arts Festival in Indio. Neither MoviePass nor HMNY participated in the Coachella event.
Itum borrowed money from two individuals to help fund Kaleidoscope’s costs at Coachella. To repay the borrowed money, Itum later allegedly submitted sham invoices to HMNY for services purportedly rendered by Kaleidoscope and a different company owned by an Itum associate. Itum allegedly caused HMNY employees to wire money from MoviePass and HMNY accounts to a Kaleidoscope bank account to pay the sham invoices. Itum allegedly concealed his scheme by lying to HMNY’s auditor that Kaleidoscope had been used to pay legitimate MoviePass expenses from the 2018 Coachella festival.
Itum caused HMNY a total loss of $260,000, 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.
If convicted of all charges, Itum would face a statutory maximum sentence of 20 years in federal prison for each wire fraud count and up to 10 years in federal prison for each money laundering count.
The FBI’s New York Field Office is investigating this matter. The FBI’s Los Angeles Office is providing substantial assistance.
Assistant United States Attorney David Y. Pi of the Major Frauds Section is prosecuting this case.
South Los Angeles-Based Gang Member Pleads Guilty to Leading Crack Cocaine Manufacturing and Distribution Ring in WattsRead the Press Release
LOS ANGELES – A leader of the Bounty Hunter Bloods (BHB) street gang pleaded guilty today to federal drug and firearms charges for leading a manufacturing and distribution of crack cocaine conspiracy in and around the gang’s “territory” of the Nickerson Gardens public housing projects in the Watts neighborhood of Los Angeles.
Damion Baker, 45, a.k.a. “Fatts,” of Compton, pleaded guilty to one count of conspiracy to manufacture, distribute, and possess with intent to distribute cocaine, and one count of being a felon in possession of a firearm.
Baker is the lead defendant in an April 2021 indictment targeting members and associates of the BHB street gang for drug- and firearm-related crimes.
According to his plea agreement, from August 2019 to May 2020, Baker organized and led a drug trafficking conspiracy in which he and his accomplices agreed to distribute cocaine. Specifically, Baker arranged to obtain powder cocaine from at least two drug suppliers. He then directed his co-conspirators to cook, and would himself cook, the powder cocaine and manufacture it into crack cocaine to sell to customers, including back to his powder cocaine suppliers to sell in crack form.
Baker directed his accomplices in the packaging, sale, and delivery of crack cocaine to customers, which included co-conspirators and other BHB gang members. Baker also directed the receipt and storage of drug proceeds throughout BHB-claimed territory in South Los Angeles.
As part of these activities, Baker arranged for an accomplice’s residence in the Nickerson Gardens housing projects in Watts to be used as a stash house in which Baker and his co-conspirators continuously sold crack cocaine over a period of many months. Baker recruited and hired co-conspirators to work at the Watts stash house and directed them in selling narcotics to customers there and in nearby areas, restocking the stash house’s drug supply, and transporting drug proceeds to Baker and other accomplices at various locations.
Baker admitted in his plea agreement to possessing a firearm in May 2020. He was not permitted to do so because he previously had been convicted of felonies in Los Angeles Superior Court, including a cocaine possession charge in 1998 and a domestic violence-related charge in 2001. He admitted in his plea agreement that he possessed the firearm for the purpose of protecting his crack cocaine distribution business.
Baker also agreed to forfeit the firearm and $44,600 in cash law enforcement seized at his residence in Compton and at another residence in San Pedro.
United States District Judge Fernando L. Aenlle-Rocha scheduled a July 14 sentencing hearing, at which time Baker will face a mandatory minimum sentence of five years in federal prison and a statutory maximum of 40 years in federal prison for the drug trafficking conspiracy charge, and up 10 years in federal prison for the firearms offense.
The other 11 defendants in this indictment either have pleaded guilty or signed plea agreements in this case and await sentencing. Another BHB gang member, and Baker’s second in command in the drug trafficking conspiracy, Tony Carr, 52, a.k.a. “T-Bone,” of Watts, pleaded guilty in July 2022 to one count of cocaine trafficking conspiracy and one count of being a felon in possession of a firearm. Judge Aenlle-Rocha sentenced Carr to 188 months in federal prison.
In April 2021, law enforcement conducted a takedown in which 22 BHB members and associates were charged in a total of nine federal grand jury indictments. Of those 22 defendants, prosecutors have secured 19 convictions.
The FBI’s Los Angeles Metropolitan Task Force on Violent Gangs, which consists of the FBI, the Los Angeles Police Department, the Los Angeles County Sheriff’s Department, and the California Department of Corrections and Rehabilitation, investigated this matter.
Assistant United States Attorney Amy E. Pomerantz of the Violent and Organized Crime Section is prosecuting this case.
Irvine Man Sentenced to 4½ Years in Federal Prison for Fraudulently Obtaining $5 Million in COVID Loans He Spent on Sports CarsRead the Press Release
LOS ANGELES – An Orange County man was sentenced today to 54 months in federal prison for fraudulently obtaining $5 million in COVID-relief loans for his sham businesses, then used the money on himself, including purchasing Ferrari, Bentley and Lamborghini cars.
Mustafa Qadiri, 42, of Irvine, was sentenced by United States District Judge Josephine L. Staton, who also fined him $20,000 and ordered him to pay $2,861,050 in restitution.
Qadiri pleaded guilty in July 2021 to one count of bank fraud, one count of aggravated identity theft, and one count of money laundering.
According to court documents, Qadiri claimed to have operated four Newport Beach-based companies, none of which were in operation: All American Lending Inc., All American Capital Holdings Inc., RadMediaLab Inc., and Ad Blot Inc.
In May and June of 2020, Qadiri submitted false and fraudulent Paycheck Protection Program (PPP) loan applications to three banks on behalf of those companies. The false information Qadiri submitted included the number of employees to whom the companies paid wages, altered bank account records with inflated balances, and fictitious quarterly federal tax return forms. Qadiri also used someone else’s name, Social Security number and signature to fraudulently apply for one of the loans.
PPP loans were intended by Congress to provided financial support to businesses suffering under the weight of the COVID-19 pandemic’s economic fallout.
Relying on this false information, the banks funded the PPP loan applications and transferred approximately $5 million to accounts Qadiri controlled. Qadiri used the fraudulently obtained PPP loan proceeds for his own personal benefit, including for expenses prohibited under the requirements of the PPP program, such as the purchase of luxury vehicles, lavish vacations, and the payment of his personal expenses.
Federal agents seized the Ferrari, Bentley and Lamborghini cars that Qadiri purchased with the fraudulently obtained PPP loans, along with $2 million in ill-gotten gains from his bank account.
Homeland Security Investigations, the Small Business Administration Office of Inspector General, the FBI and IRS Criminal Investigation investigated this matter as part of the El Camino Real Financial Crimes Task Force.
Assistant United States Attorney Jennifer L. Waier of the Santa Ana Branch Office prosecuted this case.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at (866) 720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Federal Prosecutors File Hate Crime Charges Against Man Who Allegedly Shot and Wounded Two Victims Leaving SynagoguesRead the Press Release
LOS ANGELES – Federal prosecutors today charged a former Riverside resident with two counts of committing hate crimes for allegedly targeting and shooting two Jewish men as they departed religious services outside two Los Angeles synagogues over the past two days.
Jaime Tran, 28, is expected to make his first court appearance this afternoon after being arrested Thursday evening and charged this morning.
The complaint alleges that Tran targeted the two victims because they were Jewish or he believed them to be Jewish. Because the complaint contains allegations that Tran attempted to murder the two victims, the maximum statutory penalty for each of the two hate crimes is life without parole in federal prison.
“Over the past two days, our community experienced two horrific acts we believe were motivated by antisemitic ideology that caused him to target the Jewish community,” said United States Attorney Martin Estrada. “It is important, especially in one of the most diverse areas in the world, that we celebrate our differences, and stand together to oppose acts of hate.”
“In addition to targeting innocent people with violent physical attacks, these crimes instill fear in the community. There is no place in Los Angeles and, indeed, the United States of America, for fear to control communities and to intimidate people of faith,” said Donald Alway, the Assistant Director in Charge of the FBI's Los Angeles Field Office. “Law enforcement will work together to prevent hate crimes, whether they be civil liberties violations or acts of terror. On behalf of the FBI, I wish a full recovery to the victims who were senselessly attacked for their faith, as well as peace to the Jewish community.”
“I am proud of the outstanding work by our investigators in the identification and apprehension of the individual responsible for these hate-inspired attacks,” said LAPD Chief Michel Moore. “Additionally, I applaud the actions of our officers to quickly bolster our visibility in the impacted communities that were terrorized.”
The complaint alleges that Tran committed two hate-motivated attacks this week. Both shooting incidents took place in the Pico-Robertson district of Los Angeles.
In the first incident, which took place on Wednesday at approximately 9:45 a.m., Tran allegedly shot a victim at close range as the victim was leaving religious services at a synagogue. This victim survived the shooting, but he suffered a gunshot wound to the lower back.
In the second incident on Thursday at approximately 8 a.m., Tran allegedly shot a second victim at close range soon after he left religious services at a different synagogue in the same neighborhood. This second victim survived, but he sustained a gunshot wound to his upper arm.
Both shootings occurred in the same predominantly Jewish neighborhood of Los Angeles and both victims were dressed in clothing that visibly identified their Jewish faith, including black jackets and head coverings.
The evidence uncovered during the investigation indicates that Tran located the Jewish neighborhood after searching a popular business-review app for a kosher market in the Pico-Robertson district. After locating the market, Tran allegedly drove to the area, where the first shooting occurred. According to the complaint, Tran returned to the area the following day when the second shooting occurred.
Investigators acted quickly to identify Tran’s vehicle, to collect witness statements, and to obtain background information on Tran that are outlined in the criminal complaint.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
The FBI and the Los Angeles Police Department are investigating this matter. The Riverside County Sheriff’s Department, the Cathedral City Police Department and the Fountain Valley Police Department provided substantial assistance.
Assistant United States Attorneys Kathrynne Seiden and Maria Jhai of the Terrorism and Export Crimes Section and Frances Lewis of the Public Corruption and Civil Rights Section are prosecuting this case.
Westwood Man Pleads Guilty to Federal Charges for Running Surety Bond Scam that Caused $5.2 Million in Investor LossesRead the Press Release
LOS ANGELES – A Westwood man pleaded today to federal criminal charges 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 over $1.2 million in taxes.
Tommy Lester Watts, 63, a.k.a. “Michael Nesbeth,” “Michael Kent,” and “Alex Mason,” pleaded guilty to one count of transactional money laundering and one count of tax evasion.
According to his plea agreement, 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 admitted in his plea agreement that he 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.
United States District Judge Maame Ewusi-Mensah Frimpong scheduled a September 8 sentencing hearing, at which time Watts will face a statutory maximum sentence of 10 years in federal prison for the transactional money laundering count and up to five years in federal prison for the tax evasion count.
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 is prosecuting this case.
Westminster Woman Charged in Federal Indictment Alleging She Acted as ‘Money Mule’ Who Laundered Funds for CybercriminalsRead the Press Release
SANTA ANA, California – An Orange County woman has been charged in a six-count federal grand jury indictment alleging she laundered money directly sent from fraud victims who were tricked into sending the funds to financial accounts she controlled rather than to the victims’ intended recipients, the Justice Department announced today.
Serena Lieu, 55, of Westminster, is charged with three counts of money laundering and three counts of engaging in monetary transactions in property derived from specified unlawful activity. A federal grand jury returned the indictment on Tuesday.
Lieu was arrested without incident on Wednesday morning. She pleaded not guilty to the charges at her arraignment on Wednesday afternoon in United States District Court in Santa Ana and an April 11 trial date was scheduled in this matter. She was released from custody on $50,000 bond.
According to court documents, in 2019, law enforcement learned that a Lieu-controlled bank account received a wire transfer of $103,350 from a business email compromise (BEC) victim in the Dallas area. BEC is a scam that targets companies and individuals who perform legitimate transfer-of-funds requests. Cybercriminals using social engineering or malware impersonate one of the people involved in those money transfers to make the victim send the money to a criminal-controlled bank account. Once the fraud is detected, it frequently is too late to get the money back since the funds have been quickly moved to other bank accounts or used to buy cryptocurrency.
During a May 2019 interview, FBI agents advised Lieu – who has opened 11 bank accounts at seven separate financial institutions since 2017 – that she was moving fraud proceeds in and out of her various bank accounts. FBI agents then gave her a “money mule” warning letter, which she signed. A money mule is someone who transfers or moves illegally acquired money on behalf of someone else.
Despite the warning, Lieu allegedly continued trafficking fraud proceeds. Between July 2019 and April 2021, Lieu allegedly received more than $1.8 million into various bank accounts. These funds came directly from fraud victims who were deceived into sending the funds to Lieu-controlled bank accounts, rather than to the victims’ intended recipients, court documents state. After receiving this money, Lieu allegedly quickly withdrew or transferred it to various individuals or entities, including by converting the funds into cryptocurrency.
The indictment specifically alleges that Lieu transferred more than $560,000 from bank accounts she controlled to accounts at different banks and to Coinbase, a cryptocurrency exchange platform, from July 2020 to February 2021.
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.
If convicted on all counts, Lieu would face a statutory maximum sentence of 20 years in federal prison for each money laundering count and up to 10 years in federal prison for each illegal monetary transactions count.
The FBI and the United States Department of Health and Human Services Office of Inspector General investigated this matter.
Assistant United States Attorneys Carolyn S. Small of the Major Frauds Section and David C. Lachman of the General Crimes Section are prosecuting this case.
Sherman Oaks Man Found Guilty of Scheming with His Brother to Defraud Investors Through Business They Ran Out of Parents’ HouseRead the Press Release
SANTA ANA, California – A San Fernando Valley man has been found guilty by a jury of scheming with his brother to fraudulently obtain more than $6 million from at least 40 investors through an investment company they ran out of their parents’ house, the Justice Department announced today.
Sassi Mizrahi, 58, of Sherman Oaks, was found guilty late Tuesday of five counts of wire fraud. The jury found Mizrahi not guilty of one wire fraud count.
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.
According to evidence presented at the six-day trial, 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.
From June 2012 until March 2019, the Mizrahi brothers raised more than $6 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.
United States District Judge Cormac J. Carney scheduled a June 26 sentencing hearing for Sassi Mizrahi, who will face a statutory maximum sentence of 20 years in federal prison for each wire fraud count.
At his sentencing hearing that is scheduled for May 15, Motty Mizrahi will face up to 20 years in federal prison for each wire fraud count and a mandatory two-year prison sentence consecutive to his wire fraud prison term for the aggravated identity theft count.
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.
San Fernando Valley Pharmacist Sentenced to 2 Years in Prison for Knowingly Filling False Prescriptions for Opioids and Other NarcoticsRead the Press Release
LOS ANGELES – A San Fernando Valley pharmacist who used forged prescriptions to illegally sell narcotics, including opioids, to phony “patients” has been sentenced to 24 months in federal prison, the Justice Department announced today.
Gevork Danielian, 41, of Granada Hills, was sentenced on Monday by United States District Judge Mark C. Scarsi, who also ordered him to pay a $100,000 fine.
Danielian pleaded guilty in November 2022 to one count of conspiracy to distributed controlled substances.
From December 2014 to July 2020, Danielian owned and operated the Winnetka-based A&G Vitalife Inc., which did business as A&G Care Pharmacy, where he worked as the pharmacist-in-charge. From April 2018 to December 2018, Danielian conspired with others to unlawfully sell narcotics, including hydrocodone, oxycodone, methamphetamine salts, and alprazolam, an anxiety medication sold under the brand name Xanax.
A co-conspirator would obtain blank prescription papers, Danielian would then provide – usually by text message – the names and dates of birth of individuals to be falsely identified as patients, which the co-conspirator would then use to fill in the falsified prescriptions. The co-conspirator would bring the falsified prescriptions to Danielian, bearing the forged signatures of real physicians. Danielian would “fill” the prescriptions in exchange for money despite knowing the narcotics were not going to be used for a legitimate medical purpose, but rather were going to be illicitly sold by his co-conspirator.
Danielian filled prescriptions for hundreds of pills of opioids and other narcotics during the conspiracy.
For example, on October 29, 2018, Danielian filled prescriptions for approximately 120 pills of 30-milligram strength oxycodone each for two fictitious patients, using a forged prescription falsely purporting to have been written by a physician.
In November 2020, the California State Board of Pharmacy placed Danielian on probation for four years and discontinued his business after he was accused of record-keeping deficiencies and dispensing narcotics authorized by fraudulent prescriptions.
“Pharmacists, by training and education, should be gatekeepers to help prevent abuse, addiction, and overdose,” prosecutors argued in a sentencing memorandum. “[Danielian] flouted this responsibility and instead became an agent of addiction and abuse.”
The Drug Enforcement Administration investigated this matter.
Assistant United States Attorney Maria Jhai of the Terrorism and Export Crimes Section prosecuted this case.
Simi Valley Man Sentenced to over 4 Years in Prison for Fraudulently Obtaining More Than $1 Million in COVID Business LoansRead the Press Release
LOS ANGELES – A Ventura County man who schemed with an Orange County man to illegally acquire disaster relief funds was sentenced today to 51 months in federal prison for fraudulently obtaining more than $1 million in loans intended to help businesses weather the COVID-19 pandemic’s economic fallout.
Manuel Asadurian, 66, of Simi Valley, was sentenced by United States District Judge Dale S. Fischer, who also ordered him to pay $1,071,222 in restitution.
Asadurian pleaded guilty in October 2022 to one count of wire fraud affecting a financial institution.
From April 2020 to January 2021, Asadurian and an accomplice, Jeffrey Scott Hedges, 51, of Irvine, schemed to fraudulently obtain federal disaster relief funds distributed through the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) programs that Congress intended to help businesses during the pandemic.
Asadurian lied to the United States Small Business Administration and federally insured financial institutions on a total of 12 PPP and EIDL loan applications, which were submitted on behalf of Asadurian-controlled businesses, including LTL Enterprises LLC, Redline Performance LLC, and Diamond A Motorsports. Hedges submitted 18 fraudulent PPP and EIDL applications on behalf of companies he controlled, including West Coast Chassis, WCC Pro Touring, Von Schoff Apparel, and Hedges Corvette.
The false information submitted by Asadurian and Hedges included the number of employees to whom the companies had paid wages, the amount of payroll expenses for the companies, and false certifications that the loans would be used for permissible business purposes. In support of the bogus applications, Asadurian and Hedges submitted false tax documents, payroll records and bank records that fraudulently inflated the number of employees and amount of payroll expenses and gross receipts associated with the companies.
Once the PPP and EIDL loan applications were approved, they were deposited in bank accounts Asadurian and Hedges controlled. Asadurian and Hedges then used the fraudulently obtained loans for their personal benefit, including making mortgage payments on a personal residence, paying living expenses and medical expenses, and purchasing luxury vehicles.
In total, Asadurian sought approximately $1,620,122 in PPP and EIDL loans and fraudulently obtained approximately $1,071,222 related to those loans.
In a related case, Hedges pleaded guilty in August 2022 to one count of conspiracy to commit wire fraud affecting a financial institution and one count of aggravated identity theft for his submission of fraudulent PPP and EIDL applications that sought approximately $5,288,476. Hedges received approximately $2,087,701 of those loan funds. On January 30, Judge Fischer sentenced Hedges to a term of seven years in federal prison and ordered him to pay $2,087,701 in restitution.
The Federal Deposit Insurance Corporation Office of Inspector General; the Federal Reserve Board Office of Inspector General; the FBI; IRS Criminal Investigation; Treasury Inspector General for Tax Administration; and the Small Business Administration investigated these matters.
Assistant United States Attorney Scott Paetty of the Major Frauds Section prosecuted these cases.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at (866) 720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Owner of San Bernardino County-Based Construction Firm Sentenced to 2 Years in Federal Prison for Failing to Report $4.8 Million to IRSRead the Press Release
LOS ANGELES – The owner of an Inland Empire business was sentenced today to 24 months in federal prison for filing false tax returns that failed to report more than $4.8 million in income over a five-year period, resulting in his failure to pay $1.6 million in taxes due to the IRS.
Liang Tai Chen, 62, the owner of the Chino-based construction company Mass Development Inc. (MDI), who is identified in court documents as a resident of Los Angeles County, was sentenced by United States District Judge Marc C. Scarsi. Judge Scarsi also ordered Chen to pay $1,642,935 in restitution.
Chen pleaded guilty in September 2022 to one count of aiding and assisting in the preparation of a false income tax return.
From January 2013 through October 2017, Chen oversaw MDI’s daily business activities and was listed as the owner of MDI on its financial documents. To conceal income, Chen deposited only a portion of the checks made payable to MDI into the company’s bank account and then cashed nearly $5 million of additional checks made payable to MDI at a bank and a local liquor store that offered check-cashing services.
In relation to MDI’s federal tax returns, Chen provided the tax return preparer with statements from MDI’s business bank account and falsely advised the tax return preparer that all of MDI’s income had been deposited into the business bank account.
By failing to tell MDI’s return preparer that he had cashed a substantial portion of business checks made payable to MDI, Chen caused MDI to falsely report its gross receipts to the IRS. This underreporting resulted in an underpayment of federal taxes totaling $1,642,935.
“[Chen’s] conduct was the result of his intentional choices and actions as a mature (he was in his 50s) and highly educated adult (master’s degree and degree in civil engineering) over a period of years, as opposed to a single aberrant or opportune act, in which [Chen] repeatedly filed false tax returns,” prosecutors argued in a sentencing memorandum.
IRS Criminal Investigation investigated this matter.
Assistant United States Attorney Steven M. Arkow of the Major Frauds Section prosecuted this case.
Telemarketing Fraudsters Sentenced in Absentia to 9 Years in Prison for $2.1 Million Family-Run Scheme that Conned Job SeekersRead the Press Release
LOS ANGELES – Two members of a $2.1 million Riverside County-based, family-run telemarketing scam each were sentenced in absentia today to 108 months in federal prison for their roles in a scheme that defrauded more than 4,000 job seekers by tricking them into paying fees in exchange for employment opportunities that turned out to be nonexistent.
Lisa Kay Camp, 61, and Barry Lee Biddle, 48, both formerly of Lake Elsinore, were sentenced by United States District Judge Stephen V. Wilson, who also ordered them to pay $2,181,316 in restitution to their victims, which they must pay jointly and severally with three previously sentenced co-conspirators.
Camp and Biddle pleaded guilty in September 2019 and October 2019, respectively, to one count of conspiracy to commit wire fraud. They fled together from pretrial supervision in August 2020 before their sentencing hearings, which were scheduled for October 2020. They remain at large.
From May 2009 to July 2013, Camp, with the help of Biddle and her adult children, operated a fraudulent telemarketing business that went by various fictitious names, including “Contractor Management,” “Commercial Crews,” “US Tradepros,” and “IPower Marketing.” The defendants used auto-dialer services and multiple websites to lure prospective job seekers to pay for background checks that were never performed and to receive job leads that never existed.
Camp controlled nearly two dozen bank accounts in various company names through which she projected the appearance of legitimacy and the co-schemers received money from victims. Biddle set up, maintained, and operated the computer workstations, phone network, and websites used by the fraudulent telemarketing business.
The aggregated amount of loss to job seekers over the four-year period of the scheme was approximately $2,181,316 with at least 4,183 victims defrauded.
Three other defendants – all of whom are children of Camp – have been sentenced in this case after each pleading guilty to one count of conspiracy to commit wire fraud:
- Andrea Maureen Aviles, 41, of Lake Elsinore, who was sentenced to 18 months in federal prison;
- Gerald James Camp, 42, of Lake Elsinore, who was sentenced to one year and one day in federal prison; and
- Allisa Lynn Vasquez, 39, of Sun City, who was sentenced to 18 months in federal prison.
The FBI investigated this matter.
Assistant United States Attorney Julius J. Nam of the Public Corruption and Civil Rights Section is prosecuting this case.
Anyone with information about Lisa Camp and Barry Biddle’s whereabouts is encouraged to contact the FBI’s Los Angeles Field Office at (310) 477-6565 or the United States Marshals Service at 1-877-WANTED-2 or (877) 926-8332.
Agoura Hills Real Estate Developer Agrees to Plead Guilty to Lying on Bankruptcy Petition and Filing False Federal Income Tax ReturnsRead the Press Release
LOS ANGELES – An Agoura Hills-based real estate developer has agreed to plead guilty to federal charges 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, the Justice Department announced today.
Mark Handel, 68, has agreed to plead guilty to a two-count information charging him with making a false statement in bankruptcy and subscribing to a false tax return. Both the information and Handel’s plea agreement were filed today in United States District Court.
Handel has agreed to forfeit approximately $3,545,712, which represents the proceeds of the sale of real estate in Alameda County. Handel also has agreed to pay to the IRS approximately $1,450,070 in tax liabilities, which include civil fraud penalties.
He is expected to enter a guilty plea in the coming weeks.
According to his plea agreement, in April 2015, Handel filed a bankruptcy petition in Los Angeles in which he knowingly made false statements. Under penalty of perjury, Handel stated that he had no income from 2013 until April 2015. In fact, Handel earned approximately $2,263,221 in income from DTMM Construction Inc., his West Los Angeles-based real estate development company. Handel caused DTMM, which, according to court documents, stands for “Don’t Touch My Money,” to be registered in his wife’s name but used DTMM 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.
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. Handel further admitted that for the tax years 2010 to 2017, he 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.
Once Handel pleads guilty to both charges, he will face a statutory maximum penalty of eight years in federal prison.
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 is prosecuting this case.
Reseda Man Pleads Guilty to Selling Pound Quantities of Methamphetamine and Running Unlicensed Firearms BusinessRead the Press Release
LOS ANGELES – A San Fernando Valley man pleaded guilty today to federal charges for selling a total of approximately 17 pounds of methamphetamine and 89 firearms, including dozens of “ghost guns,” or firearms that lack serial numbers.
Julio Ernesto Lopez-Menendez, 27, a.k.a. “Iroe,” of Reseda, pleaded guilty to one count of distribution of methamphetamine and one count of engaging in the business of dealing in firearms without a license.
Lopez-Menendez has been in federal custody since his arrest in this case in April 2022.
According to his plea agreement, from January 2022 to April 2022, Lopez-Menendez engaged in transactions in which large numbers of firearms and pound quantities of methamphetamine were sold. Many of the firearms sold were so-called “ghost guns,” named because of their lack of a serial number.
Ghost guns are often assembled from parts purchased separately or in a kit. Because the separate parts do not bear serial numbers, the assembled ghost guns do not bear serial numbers, and they cannot be registered or traced.
In one deal on January 20, 2022, Lopez-Menendez sold the buyer a dozen firearms, including 10 semi-automatic “ghost gun” pistols. In a February 10 transaction, Lopez-Menendez sold the same buyer nearly one pound of methamphetamine and 14 firearms, including nine semi-automatic ghost gun pistols, for $15,000.
During the final two drug deals, Lopez-Menendez sold the buyer approximately 4.2 kilograms (9.2 pounds) and 2.2 kilograms (4.8 pounds) of methamphetamine on March 8, 2022, and March 23, 2022, respectively.
In total, Lopez-Menendez admitted to selling approximately 17 pounds of methamphetamine and 89 firearms – including 53 ghost guns.
At no time did Lopez-Menendez have a federal firearms license, nor did he have any firearms registered to him in the National Firearms Registration and Transfer Record, the central registry for all items regulated under the National Firearms Act.
United States District Judge André Birotte Jr. scheduled a May 26 sentencing hearing, at which time Lopez-Menendez will face a statutory maximum sentence of life in federal prison.
The FBI investigated this case as part of the High Intensity Drug Trafficking Area (HIDTA) program, along with the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; and the Los Angeles Police Department.
Assistant United States Attorney Jennifer Chou of the Violent and Organized Crimes Section is prosecuting this case.
Cerritos Man Who Admitted to Causing Fatal Fentanyl Overdose Sentenced to 22½ Years in Federal Prison for Drug TraffickingRead the Press Release
LOS ANGELES – A Cerritos drug trafficker was sentenced today to 270 months in federal prison today for narcotics and firearms offenses, including providing fentanyl to a victim who later ingested the powerful synthetic opioid and died from it.
Shaun Alan Rosa, 45, was sentenced by United States District Judge Philip S. Gutierrez.
Rosa pleaded guilty in July 2022 to one count of conspiracy to distribute controlled substances and to maintain a drug-involved premises, one count of possession of firearms in furtherance of a drug trafficking crime, and one count of distribution of fentanyl. He has been in federal custody since September 2019.
According to court documents, from April 2015 to March 2018, Rosa directed a conspirator to rent and maintain an apartment in San Pedro for the purpose of storing and distributing narcotics and firearms. Other conspirators, including the victim, provided illegal drugs such as cocaine, Ecstasy, and fentanyl to Rosa for further distribution.
Rosa then directed a co-conspirator to pick up narcotics from other members of the conspiracy, transport the drugs to the San Pedro apartment and later distribute the drugs to other conspirators and to pick up money from these conspirators as payment for the drugs.
Rosa admitted in his plea agreement that, in June 2017 in Long Beach, he knowingly gave pills containing fentanyl to a co-conspirator, identified in court documents at “M.E.” The victim later ingested the pills, which led to his fatal overdose.
“Despite knowing about the tragic death of M.E. from a fentanyl overdose, defendant continued to distribute controlled substances, including the exceedingly dangerous drug of fentanyl,” prosecutors wrote in a sentencing memorandum.
In March 2018, at the San Pedro apartment, Rosa possessed approximately 233.4 grams (0.5 pounds) of fentanyl, 3.97 kilograms (8.76 pounds) of Ecstasy, two firearms, 49 rounds of ammunition, and drug paraphernalia, including digital scales and a pill press.
The FBI and the Los Angeles Police Department investigated this matter. The Long Beach Police Department provided assistance.
Assistant United States Attorneys Jenna W. Long of the Terrorism and Export Crimes Section and Jena A. MacCabe of the General Crimes Section prosecuted this case.
Moreno Valley Woman Sentenced to 4½ Years in Federal Prison for Conspiracy that Stole over $1.1 Million in Unemployment BenefitsRead the Press Release
LOS ANGELES – A Riverside County woman was sentenced today to 54 months in federal prison for her role as an organizer and leader of an extensive conspiracy that defrauded California’s unemployment insurance benefit program out of more than $1.1 million.
Catrina Gipson, 47, of Moreno Valley, was sentenced by United States District Judge John A. Kronstadt, who also ordered her to pay $1,106,282 in restitution.
Gipson pleaded guilty in June 2022 to one count of conspiracy to commit wire fraud and one count of aggravated identity theft.
Beginning as early as February 2013 and continuing to at least July 2016, Gipson’s co-conspirators used fake businesses registered with the California Employment Development Department (EDD), the administrator of the federal unemployment insurance benefit program for the state, to defraud EDD. The names of the fictitious companies included Super Cleaning Service and Angel Clothing Store, according to court documents.
Sometimes, Gipson’s co-conspirators filed claims for unemployment insurance in their own names, claiming unemployment from fake businesses created by co-conspirators, the indictment alleges. Other times, co-conspirators filed unemployment insurance claims using the names of other people, including prison inmates.
After EDD funded debit cards pursuant to false unemployment claims, Gipson and her co-conspirators withdrew funds from the cards, some of which were in the name of other claimants. In total, the conspirators fraudulently obtained over $1,1 million in unemployment insurance benefits.
For example, in May 2016, Gipson withdrew $880 from a Bank of America branch in Moreno Valley, using a debit that EDD funded pursuant to a false unemployment claim made in the name of someone who purportedly had been laid off earlier that year, but in reality, had been a prison inmate since 2000.
Gipson is the lead defendant in this case. Vernisha Jolivet, 30, of Indianapolis, pleaded guilty in February 2022 to one count of conspiracy to commit wire fraud and was sentenced to six months in federal prison. Six other defendants are scheduled to go on trial in this matter on May 2.
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 United States Department of Labor Office of Inspector General and California EDD Investigation Division investigated this matter with assistance from the United States Postal Inspection Service and the United States Marshals Service.
Assistant United States Attorney Skyler F. Cho of the International Narcotics, Money Laundering, and Racketeering Section is prosecuting this case.
Grand Jury Charges Hairstylist and Actress for Alleged Multimillion-Dollar Caregiver Fraud Scheme Against Malibu-Based PhysicianRead the Press Release
LOS ANGELES – A Fresno hairstylist and an actress have been charged in a 12‑count indictment alleging they defrauded a physician out of more than $2.7 million before his death and then attempted to defraud his estate out of an additional amount exceeding $20 million, the Justice Department announced today.
Anthony David Flores, 46, a.k.a. “Anton David,” of Fresno, was arrested last week in Fresno by federal agents. He has pleaded not guilty to the charges against him and is scheduled for a detention hearing on February 10 in the Eastern District of California.
His co-defendant, Anna Rene Moore, 39, an actress and former yoga studio owner who currently resides in Monterrey, Mexico, was arrested Tuesday in Houston upon arrival on a flight from Mexico. She made her initial appearance in the Southern District of Texas. Both defendants are expected to appear in Los Angeles federal court in the coming weeks.
Flores and Moore are each charged with one count of conspiracy to commit wire fraud and mail fraud, one count of aggravated identity theft, two counts of wire fraud, two counts of mail fraud, one count of conspiracy to engage in money laundering, two counts of money laundering, and one count of engaging in a monetary transaction in criminally derived property.
According to the indictment, beginning in June 2017, Flores and Moore used false promises and representations to befriend the victim — a physician and successful investor worth more than $60 million, but who suffered from a mental illness and lost the ability to care for himself. Within days of meeting the victim, Flores and Moore moved into the victim’s beachfront Malibu home – rent free – and slowly took control of his life by pretending to be his new “best friends” and caregivers.
In September 2017, after the victim suffered a severe mental breakdown resulting in his arrest and detention in Los Angeles County jail, Flores allegedly fraudulently induced the victim to sign powers of attorney granting Flores control over the victim’s finances.
Flores allegedly represented that he would only use these powers to access the victim’s finances to post bail for release, and that he would immediately rescind them once the victim was free from jail. But after the victim was released from custody, Flores allegedly reneged on this promise and used these powers to open bank accounts in the victim’s name, giving himself and Moore access to the victim’s wealth.
From September 2017 to May 2018, Flores and Moore allegedly diverted the victim’s funds to their own bank accounts, isolated the victim from his family and longtime friends and provided the victim with drugs, including marijuana and LSD.
In the final days of the victim’s life, Flores and Moore allegedly gave the victim LSD, which caused his mental state to severely deteriorate. While the victim was under the influence of LSD, Flores allegedly changed the two-step authentication feature on the victim’s $60-million online brokerage account after previously changing the phone number listed on the account from the victim’s phone number to his own phone number.
Four days before the victim’s death and while the victim was still under the influence of LSD that defendants allegedly had provided to him, Flores then allegedly initiated two $1-million wires from the victim’s brokerage account to accounts that Flores controlled, including Flores’ personal bank account. Flores and Moore then left the victim, who by this time was in mental distress and had evicted them from his home. From a luxury hotel paid with the victim’s funds, Flores and Moore allegedly watched the victim’s deteriorating mental condition on the video cameras installed throughout the Malibu beach house.
In May 2018, the victim died in his Malibu home at the age of 57 years old. Following the victim’s death, Flores and Moore moved back into the victim’s Malibu beachfront home and allegedly withdrew large sums of money from his accounts. They allegedly also concealed information about the victim’s finances from his mother and sister, both of whom resided in Florida. This prompted the victim’s family to file a lawsuit, which uncovered the alleged fraud.
In the ensuing lawsuit in Los Angeles Superior Court, Flores and Moore allegedly violated multiple court orders ordering them to return the funds stolen from the victim. They allegedly attempted to launder the fraudulent proceeds by funneling the money through multiple different accounts to thwart the victim’s estate and court-appointed receiver from recouping the money. The lawsuit was settled with Flores and Moore agreeing to repay the victim’s estate $1 million, which they have so far failed to do.
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.
If convicted on all counts, Flores and Moore would face statutory maximum sentences of 20 years in prison for each fraud count, 20 years on the conspiracy to commit money laundering and laundering of monetary instruments counts, 10 years on transactional money laundering count, and a mandatory two-year prison sentence for the aggravated identity theft count.
The FBI and IRS Criminal Investigation investigated this matter.
Assistant United States Attorney Andrew M. Roach of the Cyber and Intellectual Property Crimes Section is prosecuting this case.
Grand Jury Charges Disbarred Plaintiffs’ Lawyer Tom Girardi with Wire Fraud for Allegedly Embezzling over $15 Million in Client MoneyRead the Press Release
LOS ANGELES – Former plaintiffs’ personal injury lawyer Thomas Vincent Girardi has been indicted by a federal grand jury for allegedly embezzling more than $15 million from several of his legal clients, the Justice Department announced today.
Girardi, 83, of Seal Beach, who owned the downtown Los Angeles-based Girardi Keese law firm, is charged with five counts of wire fraud, a crime that carries a statutory maximum sentence of 20 years in federal prison.
Girardi, a once-powerful figure in California’s legal community until creditors forced his law firm into bankruptcy in December 2020, is expected to appear on Monday, February 6 at the United States District Court for arraignment. The State Bar of California disbarred Girardi in July 2022.
Also charged in the indictment unsealed today is Christopher Kazuo Kamon, 49, formerly of Encino and Palos Verdes and who was residing in The Bahamas at the time of his November 2022 arrest on a federal criminal complaint. He remains in federal custody.
Kamon was the controller and chief financial officer of Girardi Keese from 2004 until December 2020. In this role, Kamon oversaw the law firm’s financial affairs, supervised its accounting department, and oversaw paying the firm’s expenses.
The indictment alleges that, from 2010 to December 2020, Girardi and Kamon fraudulently obtained more than $15 million that belonged to Girardi Keese clients.
“Mr. Girardi and Mr. Kamon stand accused of engaging in a widespread scheme to steal from their clients and lie to them to cover up the fraud,” said United States Attorney Martin Estrada. “In doing so, they allegedly preyed on the very people who trusted and relied upon them the most—their clients. Actions like the ones alleged in the indictment bring disrepute upon the legal profession and will not be tolerated by my office.”
“Mr. Girardi and Mr. Kamon allegedly created a mirage over several years in order to disguise the fact that they were robbing Girardi Keese clients of large sums of money” said Amir Ehsaei, the Acting Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The defendants exploited the hardships endured by their clients and took advantage of their unfamiliarity with the legal process while they denied victims what was rightfully due to them in order to fund their lavish lifestyles.”
“Thomas Vincent Girardi should have been a pillar to our community. Instead, he is accused of creating an elaborate scheme to mislead his clients, victimizing them for a second time,” said Special Agent in Charge Tyler Hatcher of the IRS Criminal Investigation’s Los Angeles Field Office. “Attorneys are put in a position of trust when they represent us during some of our most difficult times. Mistrust in the legal profession grows when clients can’t trust their attorneys to pay them the settlements intended to make them whole. IRS Criminal Investigation, along with federal prosecutors and our law enforcement partners, will continue to seek to keep the legal profession honest.”
In furtherance of their alleged scheme to defraud, Girardi negotiated settlements on behalf of clients, but then allegedly concealed the settlement’s true terms and lied about the disposition of the settlement proceeds.
Girardi and Kamon would allegedly cause the settlement proceeds to be deposited in or transferred to attorney trust accounts to which both men had access. Girardi and Kamon then embezzled and misappropriated settlement funds from these accounts for improper purposes, including paying other Girardi Keese clients whose settlement funds had previously been misappropriated and paying Girardi Keese’s payroll and other expenses. These additional expenses included credit card bills for Girardi and Kamon’s personal expenses.
To conceal the theft and misappropriation of client settlement money, Girardi and Kamon allegedly lied to clients, stating falsely, among other things, that the settlement money had not been paid. Girardi also allegedly falsely told clients that settlement proceeds could not be disbursed until certain purported requirements had been met, such as eliminating purported tax obligations, obtaining supposedly necessary authorizations from judges, and satisfying medical liens and other debts.
Girardi and Kamon allegedly also sent lulling payments to clients, falsely representing that the payments were “advances” on purportedly yet-to-be-received settlement proceeds that, in fact, had already been deposited in Girardi Keese accounts, or were “interest payments” on the settlement money that purportedly could not be paid to the clients until the fabricated requirements were met.
For example, in July 2019, Girardi negotiated a $17.5 million settlement of a lawsuit related to injuries sustained in a car accident by two clients and their child, who was paralyzed in the crash. The settlement agreement specified that the child’s portion of the settlement money would be placed in a trust and an annuity to be controlled by a third party, neither of which could be accessed by Girardi and Kamon.
The first installment of the settlement payment – $4 million – was transferred to a bank account that Girardi and Kamon controlled. Prior to that deposit, Girardi and Kamon allegedly transferred $1.45 million as a purported “advance” from the clients’ settlement funds. The indictment alleges that, in fact, this was money that came from different Girardi Keese clients. Girardi and Kamon then allegedly used the funds to pay for the law firm’s operating expenses unrelated to the car accident litigation.
On July 1, 2019, Girardi and Kamon allegedly caused a $2.5 million check that mostly was comprised of the car accident clients’ settlement money to be issued to a different client over half of whose $53 million settlement Girardi and Kamon had misappropriated years earlier.
In August 2019, a further payment of approximately $5,119,449 was deposited into a Girardi-controlled bank account. To lull the victim clients and prevent them from discovering that their settlement money had been misappropriated, Girardi and Kamon allegedly provided incremental lulling payments that comprised only a fraction of what the clients were owed.
Girardi also allegedly lied to the clients, telling them that the remaining settlement funds could only be paid after medical liens had been satisfied, court proceedings had concluded and Girardi had flown to Washington, D.C., to meet with government officials to remove the settlement’s tax liability. In fact, all of this information was false and Girardi had embezzled their settlement money, the indictment alleges.
In a separate matter, on January 19, Kamon was charged via information with wire fraud for allegedly embezzling funds in Girardi Keese’s custody and control and using them for his personal expenses, including for renovations on Kamon’s personal residences in Palos Verdes and Encino, travel, shopping and escort services. Trial in that matter is scheduled for March 14.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
IRS Criminal Investigation and the FBI are investigating this matter. The Office of the United States Trustee is providing assistance.
Assistant United States Attorneys Scott Paetty and Ali Moghaddas of the Major Frauds Section are prosecuting this case.
Utah Man Charged with Mail Fraud for Alleged $5.8 Million Scheme to Defraud Organic Produce Distributor via Sham InvoicesRead the Press Release
RIVERSIDE, California – A Utah man was arraigned in federal court today on a grand jury indictment alleging that he participated in a long-running scheme in which he sent fake invoices on behalf of a shell company to defraud an organic produce distributor out of $5.8 million.
Kevin Scott Horton, 55, of Saratoga Springs, Utah, is charged with seven counts of mail fraud. He pleaded not guilty to the charges today in Riverside federal court and a March 28 trial date in United States District Court in Los Angeles was scheduled in this matter.
According to the indictment and other court documents, from February 2000 to April 2018, Horton schemed with Tony Anhtuan Rawlings, 56, of Garden Grove, the management information systems director at Melissa’s World Variety Produce Inc., a Vernon-based company, to defraud Melissa’s out of its money through the approval of payment of invoices for fictitious services.
In February 2000, Horton allegedly created a shell company called Creative Network Solutions (CNS). At Rawlings’s instruction, Horton allegedly created one or two fictitious invoices per month, in which CNS billed Melissa’s for services that CNS did not provide.
Horton provided the fictitious invoices to Rawlings, who approved them and then provided them to a Melissa’s executive who ensured that Melissa’s paid CNS the amounts listed on the sham invoices, the indictment alleges.
Rawlings falsely represented to Melissa’s executives that CNS provided information technology and information systems services to Melissa’s. In fact, Horton had no background in computers and CNS never provided services to Melissa’s or any other company, the indictment states.
Horton, along with Rawlings, allegedly caused Melissa’s to send CNS payment in the form of checks mailed through the United States Postal Service. Horton allegedly deposited the checks he received through the scheme into a bank account that he controlled. Horton allegedly provided Rawlings a portion of the money that Melissa’s paid to CNS in the form of checks sent via U.S. Mail to an address in Irvine that Rawlings controlled.
In total, Horton, along with Rawlings, allegedly caused Melissa’s to pay CNS approximately $5,805,504 because of the fictitious invoices.
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.
If convicted of all charges, Horton would face a statutory maximum sentence of 20 years in federal prison for each mail fraud count.
Rawlings pleaded guilty in August 2022 to one count of mail fraud. His sentencing hearing is scheduled for June 1.
The FBI investigated this matter.
Assistant United States Attorney Eli A. Alcaraz of the Riverside Branch Office is prosecuting this case.
Marina del Rey Man Sentenced to More Than 3½ Years in Prison for Stealing Decedents’ Identities to Gain Access to Their Bank AccountsRead the Press Release
LOS ANGELES – A Marina del Ray man was sentenced today to 45 months in federal prison for stealing the identities of a married couple who had died days earlier and then using them to unlawfully gain access to their bank accounts, credit cards, and retirement accounts, fraudulently obtaining more than $137,000 in the process.
Kristopher Brent Cobb, 41, was sentenced by United States District Judge John F. Walter, who also ordered him to pay $137,573 in restitution. At today’s hearing, Judge Walter said that Cobb’s crimes had caused “immense grief” to the married couple’s surviving child.
Cobb pleaded guilty in August 2022 to one count of conspiracy to commit bank fraud and one count of aggravated identity theft.
On September 11, 2019, a man identified in court documents as “Victim 1” murdered Victim 2 (his wife) and Victim 3 (their son), attempted to kill Victim 4 (their daughter), and then committed suicide.
Two days later, Cobb, having read news coverage of the murder-suicide, created two fraudulent email addresses – one in Victim 1’s name and the other in Victim 2’s name. Cobb then used Victim 1’s cellphone number and requested that Capital One Bank add him as an authorized user of Victim 1’s credit card. On September 28, 2019, Cobb – using Victim 1’s Capital One Bank credit card in his own name – attempted to withdraw approximately $8,566 from an ATM in Los Angeles.
On October 2, 2019, while at a cellphone store in Alhambra, Cobb impersonated Victim 1 and entered into a sales agreement in Victim 1’s name for a cellphone with Victim 2’s phone number and used Victim 1’s Citibank credit card to make an unauthorized purchase for $124.
Two days later, Cobb called Barclays Bank using Victim 1’s cellphone number and requested that it send a replacement of Victim 1’s Barclays credit card to a post office box in Woodland Hills, which an accomplice had opened in Victim 1’s name after Victim 1’s death. In November 2019, Cobb used a key to open the post office box and took possession of its contents.
In total, Cobb caused losses of approximately $146,139, including approximately $122,488 in losses from unauthorized transfers from Victim 1 and Victim 2’s TD Ameritrade account to purchase gold shipped to addresses in the Los Angeles area.
Cobb also in late October 2019 made approximately $16,450 in unauthorized purchases and attempted ATM cash withdrawals using various credit cards in Victim 1’s name, including purchases in California and Puerto Rico.
Finally, Cobb made approximately $3,200 in unauthorized transfers from Victim 1’s Chase Bank savings account to Victim 1’s Chase Bank checking account to fund an unauthorized check.
“[Cobb’s] predation upon Victims 1 and 2 was not only to plunder the estate of Victims 1 and 2, but was perpetrated upon Victim 4 at the most difficult and complicated moment of her life,” prosecutors argued in a sentencing memorandum. “[Cobb’s] crimes were grotesque.”
The United States Secret Service investigated this matter.
Assistant United States Attorneys Roger A. Hsieh and Valerie L. Makarewicz of the Major Frauds Section prosecuted this case.
Former Top Guatemalan Police Official Who Failed to Disclose Murder Convictions on Green Card Petition Found Guilty of Felony OffenseRead the Press Release
LOS ANGELES – The former chief of the National Police in Guatemala’s second-largest city has been found guilty by a jury of a federal criminal charge for knowingly using a “green card” whose application to U.S. immigration authorities failed to disclose he had been convicted of murdering two political activists in Guatemala in the 1980s, the Justice Department announced today.
Catalino Esteban Valiente Alonzo, 82, of Fontana, was found guilty late Friday of one count of knowing use of a Lawful Permanent Resident card that was procured by means of a false claim or statement. Valiente is the former chief of the National Police in Quetzaltenango, Guatemala.
According to evidence presented at his four-day trial, Valiente entered the United States in April 2013 with a Lawful Permanent Resident card – commonly known as a “green card” – that he fraudulently obtained by failing to disclose that he had been arrested and tried for kidnapping and murder in Guatemala.
In October 1987, shortly after Valiente ordered an “investigation” into two political dissidents associated with anti-police protests at local universities in Quetzaltenango, two people were kidnapped in broad daylight by police officers. Days later, their bodies were recovered in separate locations on the side of the road, just outside the city limits. They had been beaten and tortured prior to being killed.
In December 1987, Valiente and others were charged in Guatemala in connection with the kidnappings and murders. He was arrested and remained in custody for two-and-a-half years while the criminal case against him proceeded.
In 1989, Valiente was convicted in Guatemala of double murder. He was sentenced to 30 years in prison and was ordered to pay approximately $6,000 to the victims’ families. In 1990, an intermediate appellate court overturned Valiente’s conviction, dismissed the charges, and ordered him released from custody.
Immediately after his release from prison, Valiente fled Guatemala. In August 1990, he entered the United States at the San Ysidro Port of Entry in San Diego. Days later, he filed – under penalty of perjury – an application for asylum. On this application, he falsely denied that he had ever been detained, convicted, sentenced or imprisoned in another country.
The Supreme Court of Guatemala in March 1993 vacated the intermediate appellate court’s ruling and issued a warrant for his arrest.
In September 1997, Valiente filed – under penalty of perjury – a false application for a green card in which he denied having been arrested, charged, fined or imprisoned outside the United States for violating any law.
Valiente subsequently lied under oath to a U.S. immigration official during an interview about the answers on his green card application. The green card was approved and Valiente used it, including presenting it to re-enter the United States at Los Angeles International Airport in April 2013.
United States District Judge Dolly M. Gee scheduled a May 24 sentencing hearing, at which time Valiente will face a statutory maximum sentence of 10 years in federal prison.
Homeland Security Investigations (HSI) investigated this matter in coordination with the HSI Attaché in Guatemala City, United States Citizenship and Immigration Services, Fraud Detection and National Security Directorate, and the Document and Benefit Fraud Task Force Los Angeles.
Assistant United States Attorney Joshua O. Mausner of the General Crimes Section is prosecuting this case.
Members of the public who have information about foreign nationals suspected of engaging in human rights abuses or war crimes may call the Immigration and Customs Enforcement (ICE) tip line at 1-866-DHS-2423 (1-866-347-2423). Callers may remain anonymous.
U.S. Department of Justice Disrupts Hive Ransomware VariantRead the Press Release
The Justice Department announced today its months-long disruption campaign against the Hive ransomware group that has targeted more than 1,500 victims in over 80 countries around the world, including hospitals, school districts, financial firms, and critical infrastructure.
Since late July 2022, the FBI has penetrated Hive’s computer networks, captured its decryption keys, and offered them to victims worldwide, preventing victims from having to pay $130 million in ransom demanded. Since infiltrating Hive’s network in July 2022, the FBI has provided over 300 decryption keys to Hive victims who were under attack. In addition, the FBI distributed over 1,000 additional decryption keys to previous Hive victims. Finally, the department announced today that, in coordination with German law enforcement (the German Federal Criminal Police and Reutlingen Police Headquarters-CID Esslingen) and the Netherlands National High Tech Crime Unit, it has seized control of the servers and websites that Hive uses to communicate with its members, disrupting Hive's ability to attack and extort victims.
“Last night, the Justice Department dismantled an international ransomware network responsible for extorting and attempting to extort hundreds of millions of dollars from victims in the United States and around the world,” said Attorney General Merrick B. Garland. “Cybercrime is a constantly evolving threat. But as I have said before, the Justice Department will spare no resource to identify and bring to justice, anyone, anywhere, who targets the United States with a ransomware attack. We will continue to work both to prevent these attacks and to provide support to victims who have been targeted. And together with our international partners, we will continue to disrupt the criminal networks that deploy these attacks.”
“The Department of Justice’s disruption of the Hive ransomware group should speak as clearly to victims of cybercrime as it does to perpetrators,” said Deputy Attorney General Lisa O. Monaco. “In a 21st century cyber stakeout, our investigative team turned the tables on Hive, swiping their decryption keys, passing them to victims, and ultimately averting more than $130 million dollars in ransomware payments. We will continue to strike back against cybercrime using any means possible and place victims at the center of our efforts to mitigate the cyber threat.”
“The coordinated disruption of Hive’s computer networks, following months of decrypting victims around the world, shows what we can accomplish by combining a relentless search for useful technical information to share with victims with investigation aimed at developing operations that hit our adversaries hard,” said FBI Director Christopher Wray. “The FBI will continue to leverage our intelligence and law enforcement tools, global presence, and partnerships to counter cybercriminals who target American business and organizations."
“Our efforts in this case saved victims over a hundred million dollars in ransom payments and likely more in remediation costs,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “This action demonstrates the Department of Justice’s commitment to protecting our communities from malicious hackers and to ensuring that victims of crime are made whole. Moreover, we will continue our investigation and pursue the actors behind Hive until they are brought to justice.”
“Cybercriminals utilize sophisticated technologies to prey upon innocent victims worldwide,” said U.S. Attorney Roger Handberg for the Middle District of Florida. “Thanks to the exceptional investigative work and coordination by our domestic and international law enforcement partners, further extortion by HIVE has been thwarted, critical business operations can resume without interruption, and millions of dollars in ransom payments were averted.”
Since June 2021, the Hive ransomware group has targeted more than 1,500 victims around the world and received over $100 million in ransom payments.
Hive ransomware attacks have caused major disruptions in victim daily operations around the world and affected responses to the COVID-19 pandemic. In one case, a hospital attacked by Hive ransomware had to resort to analog methods to treat existing patients and was unable to accept new patients immediately following the attack.
Hive used a ransomware-as-a-service (RaaS) model featuring administrators, sometimes called developers, and affiliates. RaaS is a subscription-based model where the developers or administrators develop a ransomware strain and create an easy-to-use interface with which to operate it and then recruit affiliates to deploy the ransomware against victims. Affiliates identified targets and deployed this readymade malicious software to attack victims and then earned a percentage of each successful ransom payment.
Hive actors employed a double-extortion model of attack. Before encrypting the victim system, the affiliate would exfiltrate or steal sensitive data. The affiliate then sought a ransom for both the decryption key necessary to decrypt the victim’s system and a promise to not publish the stolen data. Hive actors frequently targeted the most sensitive data in a victim’s system to increase the pressure to pay. After a victim pays, affiliates and administrators split the ransom 80/20. Hive published the data of victims who do not pay on the Hive Leak Site.
According to the U.S. Cybersecurity and Infrastructure Security Agency (CISA), Hive affiliates have gained initial access to victim networks through a number of methods, including: single factor logins via Remote Desktop Protocol (RDP), virtual private networks (VPNs), and other remote network connection protocols; exploiting FortiToken vulnerabilities; and sending phishing emails with malicious attachments. For more information about the malware, including technical information for organizations about how to mitigate its effects, is available from CISA, visit https://www.cisa.gov/uscert/ncas/alerts/aa22-321a.
Victims of Hive ransomware should contact their local FBI field office for further information.
The FBI Tampa Field Office, Orlando Resident Agency is investigating the case.
Trial Attorneys Christen Gallagher and Alison Zitron of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Chauncey Bratt for the Middle District of Florida are prosecuting the case.
The Justice Department also recognizes the critical cooperation of the German Reutlingen Police Headquarters-CID Esslingen, the German Federal Criminal Police, Europol, and the Netherlands Politie, and significant assistance was provided by the U.S. Secret Service, U.S. Attorney’s Office for the Eastern District of Virginia, and U.S. Attorney’s Office for the Central District of California. The Justice Department’s Office of International Affairs and the Cyber Operations International Liaison also provided significant assistance. Additionally, the following foreign law enforcement authorities provided substantial assistance and support: the Canadian Peel Regional Police and Royal Canadian Mounted Police, French Direction Centrale de la Police Judiciaire, Lithuanian Criminal Police Bureau, Norwegian National Criminal Investigation Service in collaboration with the Oslo Police District, Portuguese Polícia Judiciária, Romanian Directorate of Countering Organized Crime, Spanish Policia Nacional, Swedish Police Authority, and the United Kingdom’s National Crime Agency.
Pasadena Man Who Allegedly Adheres to Extremist Anti-Government Ideology Charged in Federal Complaint with Possessing Machine GunRead the Press Release
LOS ANGELES – A Pasadena man who allegedly sympathizes with the anti-government extremist “Boogaloo” movement has been charged in a federal criminal complaint alleging he brandished a loaded “ghost gun” near a South Los Angeles high school late last year, the Justice Department announced today.
Isaac Aaron Morgan Loftus, 26, is charged with one count of possession of a machine gun, a felony offense that carries a statutory maximum sentence of 10 years in federal prison.
Loftus, who has been in state custody since his arrest in late November 2022, is expected to make his initial appearance in United States District Court in the coming days.
According to an affidavit filed on January 23 with the complaint, around lunchtime on November 22, 2022, law enforcement received a call about an armed individual in the vicinity of Thomas Jefferson High School in South Los Angeles who was wearing a tactical vest and cargo pants. A witness told law enforcement that the individual – later identified as Loftus – had pointed a firearm at two passing motorists.
Loftus, who at first refused to obey multiple commands to stop and attempted to walk away from officers, eventually complied with officers’ requests, was detained and handcuffed and later arrested, the affidavit states.
Law enforcement allegedly removed a 9mm handgun with no serial number – commonly known as a “ghost gun” – one which contained one round in the chamber and six rounds in the magazine, from a holster on Loftus’s front right hip area. The holster was decorated with symbols commonly associated with the Boogaloo movement, according to the affidavit.
The “Boogaloos” are a loosely organized anti-government extremist movement whose adherents believe there will be a civil war or uprising against the United States government following perceived incursions on constitutional rights – including the Second Amendment’s right to bear arms – or other perceived government overreach.
On Loftus’s person, officers allegedly also recovered two heavy duty zip ties, a tactical plate carrier, a pocketknife with a three-inch blade, a black knife with a four-inch fixed blade, and two key fobs for a Honda Clarity that had been reported stolen from a car dealership earlier in the day. The Honda also had been involved in a hit-and-run accident that same day, located approximately five blocks from where Loftus was arrested.
Law enforcement searched the Honda and found a loaded 9mm “ghost gun” in the glove compartment and a toolbox containing the upper and lower receiver of a nearly 12-inch AR-style rifle, a drop-in auto sear – designed for converting a semiautomatic firearm into a fully automatic machine gun – dozens of rounds of various calibers of ammunition, approximately 23 magazines, and a silencer, according to the affidavit.
During a search of Loftus’s residence, law enforcement allegedly found firearms and firearms cases, dozens of additional auto sears, and a large U.S. flag with symbols consistent with the Boogaloo ideology.
Loftus is prohibited under California law from possessing firearms.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
The FBI, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Los Angeles Police Department investigated this matter.
Assistant United States Attorney Kathrynne N. Seiden of the Terrorism and Export Crimes Section is prosecuting this case.
Federal and Local Law Enforcement Announce New Public Education Campaign to Highlight Danger of Fentanyl – 'Death in Disguise'Read the Press Release
RIVERSIDE, California – Inland Empire law enforcement officials today rolled out a public outreach education campaign to address the ongoing fentanyl crisis and the skyrocketing number of fentanyl poisonings.
Anchored by a new public service announcement titled “Death in Disguise” that expands on the DEA-led “One Pill Can Kill” campaign, the new program announced today includes the wide release of the PSA in conjunction with the launch of a widespread engagement program that will target schools and community groups across Riverside and San Bernardino counties.
The new campaign was announced at a news conference today by United States Attorney Martin Estrada, Riverside County District Attorney Mike Hestrin, San Bernardino County Assistant District Attorney Simon Umscheid, and Drug Enforcement Administration Los Angeles Division Special Agent in Charge Bill Bodner.
“The fentanyl epidemic has targeted our youth, devastating families and scarring communities,” said United States Attorney Estrada. “It is therefore critical that we continue our educational, outreach, and enforcement efforts with our law enforcement partners. We are committed to doing all we can to combat the fentanyl threat and holding accountable those who traffic in this poison.”
“Fentanyl is a deadly drug that is devastating our community,” said District Attorney Hestrin. “Our office continues the urgent work of educating our residents about the dangers of fentanyl and holding those accountable who peddle this poison in Riverside County.”
“At the rates we are seeing, if a fentanyl poisoning hasn’t affected you personally, it soon will,” said San Bernardino County District Attorney Jason Anderson. “That means every person in this county and beyond shares a responsibility to fight the opioid crisis – a responsibility in awareness, in prevention, in response, and in holding social media, dealers and distributors accountable.”
“Fentanyl, a synthetic opioid, is fueling poisonings and drug-caused deaths at historic rates and poses a greater risk to our communities than any other illicit drug in history,” said Special Agent in Charge Bodner. “As we target individuals responsible for importing and distributing fentanyl we are equally focused on educating and increasing awareness about fentanyl so individuals can make better informed decisions. There’s not a community, family, or person that is immune from the dangers of fentanyl, which is why our joint awareness efforts are widespread and boundless.”
As part of this new outreach project, federal officials worked closely with members of the District Attorney’s offices to create age-appropriate presentations for middle and high school students to be made in schools or other community-based settings.
The young people targeted in these presentations will hear from members of law enforcement, prosecutors, health care professionals and victims, who will engage students and their parents with an interactive presentation, including visual aids and Q&A to help students and parents understand to dangers of fentanyl poisoning. The presentations are designed to drive home the crucial points that tiny amounts of fentanyl can be deadly, and it is inherently dangerous to purchase seemingly legitimate “pharmaceutical” drugs on social media platforms.
The partners involved in this project are developing law enforcement trainings for colleges and universities across the Inland Empire. These will include trainings by DEA special agents on the widespread availability of fentanyl on social media sites, the recognition and safe handling of fentanyl, and the proper use of Narcan by health care professionals.
The “Death in Disguise” PSA was developed in partnership with the Department of Cinema and Television Arts at the California State University, Northridge.
This new outreach campaign is an important part of the law enforcement arsenal to address the fentanyl crisis that continues to take lives every day in Southern California. In conjunction with law enforcement’s prosecution and interdiction efforts, the public education component is part of a comprehensive strategy to address the problem and save lives.
Orange County Man Pleads Guilty to Using Stolen Identities to Apply for More Than $1 Million in COVID Jobless BenefitsRead the Press Release
SANTA ANA, California – An Orange County man pleaded guilty today to fraudulently applying for more than $1.2 million in COVID-19 pandemic unemployment insurance (UI) benefits – and receiving more than $400,000 of the same – by using the stolen identities of two dozen victims.
Nhan Hoang Pham, 36, of Santa Ana, pleaded guilty to one count of wire fraud in relation to benefits connected to a presidentially declared emergency.
According to his plea agreement, from July 2020 to April 2021, Pham acquired without authorization or permission the personal identifying information (PII) – including names, dates of birth and Social Security numbers – of people living in California, Texas and Michigan, people he had never met.
Pham then created and submitted fraudulent online applications to the California Employment Development Department (EDD), which administers the state’s unemployment insurance program. Pham’s fraudulent applications sought federally funded pandemic benefits intended for the jobless and represented that the victims whose PII was unlawfully used received mail at Anaheim addresses that, in fact, Pham controlled.
Upon receipt of the applications, EDD transmitted the claimant information to Bank of America, which caused the issuance and mailing of debit cards to Anaheim addresses that Pham controlled.
Pham then took the fraudulently obtained debit cards and used them to withdraw money at ATMs throughout Orange County.
While Pham tried to obtain approximately $1,255,350 through fraudulent applications containing the PII of 24 identity theft victims, he received approximately $408,496.
United States District Judge James V. Selna scheduled a May 22 sentencing hearing, at which time Pham will face a statutory maximum sentence of 30 years in federal prison.
The United States Secret Service; the United States Department of Labor’s Office of Inspector General; the California Employment Development Department Investigation Division; the Orange County District Attorney’s Office Bureau of Investigation; and the Santa Ana Police Department investigated this matter.
Assistant United States Attorney Daniel S. Lim of the Santa Ana Branch Office is prosecuting this case.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at (866) 720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Inland Empire Woman Pleads Guilty to Using Prison Inmates’ Names to Fraudulently Obtain over $500,000 in COVID Jobless ReliefRead the Press Release
LOS ANGELES – A San Bernardino County woman pleaded guilty today to fraudulently obtaining more than $500,000 in COVID-19 pandemic-related unemployment insurance (UI) benefits by using the names of inmates locked up the California state prison system.
Cynthia Ann Hernandez, 33, a.k.a. “Cynthia Roberts,” of Victorville, pleaded guilty to one count of mail fraud and one count of access device fraud in excess of $1,000.
According to her plea agreement, from June 2020 to August 2020, Hernandez filed with the California Employment Development Department (EDD) fraudulent applications for UI benefits in the names of persons incarcerated in the California state prison system. EDD manages California’s unemployment insurance benefit program.
Hernandez falsely stated on the UI benefits applications that the named claimants were individuals whose employment had been negatively affected by the COVID-19 pandemic and were eligible for pandemic unemployment assistance under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Congress passed the CARES Act in March 2020, in part, to help individuals whose employment and finances were adversely affected by the pandemic.
The applications also falsely stated that the named claimants were eligible for the UI benefits and that they resided and worked in Los Angeles and Orange counties. EDD then authorized Bank of America to issue debit cards in the claimants’ names and were mailed to Hernandez’s mailing address. Once Hernandez received the debit cards, she used them to withdraw cash at ATMs.
In total, Hernandez admitted to causing at least 29 fraudulent applications to be filed with EDD, resulting in losses to EDD and the United States Treasury of approximately $515,138.
United States District Judge Mark C. Scarsi scheduled an April 17 sentencing hearing, at which time Hernandez will face a statutory maximum sentence of 20 years in federal prison for the mail fraud count and up to 15 years in federal prison for the access device fraud count.
This matter was investigated by the United States Department of Labor – Office of Inspector General; the California Employment Development Department – Investigation Division; Homeland Security Investigations; the California Department of Corrections and Rehabilitation; the United States Department of Homeland Security – Office of Inspector General; the United States Postal Inspection Service; and United States Customs and Border Protection – Special Response Team.
Assistant United States Attorney Haoxiaohan Cai of the General Crimes Section is prosecuting this case.