Central District of California
Press releases recorded for this federal judicial district.
Former Marine Pleads Guilty to Three Counts of CyberstalkingRead the Press Release
LOS ANGELES – A South Bay man pleaded guilty today to cyberstalking multiple young women in a “sextortion” campaign he waged while he was an active-duty member of the United States Marine Corps.
Johao Miguel Chavarri, a.k.a. “Michael Frito,” 25, of Torrance, pleaded guilty to three counts of cyberstalking.
According to his plea agreement, from May 2019 to February 2021, Chavarri stalked and sent anonymous threatening communications to numerous victims, including three victims discussed in court documents.
Chavarri, often using the name “Frito,” contacted victims on social media platforms, including Instagram, Snapchat, and Twitter, complimented their appearance and their publicly posted photos, and suggested a relationship in which he would pay the victim to send him photos or videos.
Some of the victims initially agreed to Chavarri’s requests and sent him nude, sexually explicit, or compromising photos. When victims either refused Chavarri’s initial request for photos, refused to send him additional photos or videos, or otherwise refused to continue to communicate with him online, Chavarri began to harass, threaten, and extort the victims using numerous online accounts.
In most cases, he threatened to publish sexual photos and videos of the victims online or on well-known pornography websites or to distribute the sexual photos or videos to the victims’ boyfriends, friends, families, or employers — people he often specifically identified by name. Chavarri threatened his victims and their friends and family that he would ruin their lives.
United States District Judge Maame Ewusi-Mensah Frimpong scheduled a September 15 sentencing hearing, at which time Chavarri will face a statutory maximum sentence of five years in federal prison for each count.
The FBI investigated this matter with assistance from the Naval Criminal Investigative Service.
Assistant United States Attorney Lauren Restrepo of the Cyber and Intellectual Property Crime Section and Justice Department Senior Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section are prosecuting this case.
Anyone who believes they are a victim in this case or is aware of a victim in this case is urged to contact the FBI’s Los Angeles Field Office, which can be reached 24 hours a day at (310) 477-6565.
Postal Service Mail Carrier Arrested on Federal Complaint Alleging Scheme to Fraudulently Obtain Nearly $800,000 in Jobless BenefitsRead the Press Release
LOS ANGELES – Federal authorities this morning arrested a United States Postal Service (USPS) mail carrier and a Santa Clarita Valley man for allegedly scheming to steal approximately $800,000 in unemployment insurance (UI) funds by using false claims of COVID-related job losses and stealing UI debit cards from the U.S. mail.
Stephen Glover, 32, of Palmdale, who worked at the Valencia post office, and Travis McKenzie, 26, of Valencia, who lived on Glover’s mail delivery route, are expected to make their initial court appearances this afternoon in United States District Court in downtown Los Angeles. A criminal complaint filed on May 13 and unsealed after today’s arrests charges Glover and McKenzie with one count of mail fraud.
According to the affidavit in support of the criminal complaint, from August 2020 to February 2021, Glover and McKenzie fraudulently obtained debit cards issued by the California Employment Development Department (EDD), which administers the state’s unemployment insurance program. The debit cards were issued based on applications for pandemic-related unemployment benefits submitted using approximately 50 stolen identities and containing false statements claiming COVID-related job losses, the affidavit states. The EDD debit cards were issued in the names of victims, some of whom had never resided in, worked in, or even visited California. Glover and McKenzie allegedly split the cash withdrawn using the EDD debit cards, some of which had balances exceeding $30,000.
The scheme allegedly involved more than 50 fraudulent claims to EDD, which resulted in EDD issuing cards that had approximately $798,733 in funds in those names, of which at least $318,771 has been withdrawn from the debit cards.
Glover also allegedly stole mail containing more than $20,000 in personal and business checks belonging to others.
Law enforcement executed search warrants at Glover’s, McKenzie’s, and Glover’s girlfriend’s residences in the spring of 2021, during which they found more than 200 pieces of stolen and EDD-related mail, including more than 15 EDD debit cards, according to the affidavit. In addition to defrauding the California EDD, Glover and McKenzie’s scheme also fraudulently obtained debit cards from the Virginia Employment Commission, the affidavit alleges.
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.
If convicted of the mail fraud offense alleged in the complaint, Glover and McKenzie would each face a statutory maximum sentence of 20 years in federal prison.
The United States Department of Labor Office of Inspector General, the United States Postal Service Office of Inspector General, the California Employment Development Department Investigations, and the Los Angeles County Sheriff’s Department investigated this matter.
Assistant United States Attorney Charles E. Pell of the Santa Ana Branch Office is prosecuting this case.
Four Southern California Residents Arrested on Charges Alleging Elderly Timeshare Owners Were Defrauded Out of More Than $5 MillionRead the Press Release
SANTA ANA, California – Federal authorities today arrested four defendants charged in a 29-count grand jury indictment alleging they scammed dozens of timeshare owners out of more than $5 million by using boiler room tactics and lying that they could provide them financial relief.
The following defendants were arrested today and are expected to be arraigned this afternoon in United States District Court in Santa Ana:
- Michael McDonagh, 41, of Long Beach, the lead defendant and alleged ringleader of the scheme;
- Antonio Duarte, 42, of Corona;
- Christopher James Vannoy, 32, of Norwalk; and
- Ruben Ortiz, 40, of Long Beach.
Authorities are continuing to search for a fifth defendant named in the indictment, Frank Anthony Molina, 43, of San Pedro.
The indictment charges the defendants with one count of conspiracy. McDonagh, Duarte, Vannoy and Molina are charged with 28 counts of wire fraud and telemarketing fraud against the elderly. Ortiz, who allegedly joined the conspiracy in 2018, is charged with 12 counts of wire fraud and telemarketing fraud against the elderly.
According to the indictment returned on April 28 and unsealed today, from 2015 to May 2019, “openers” who worked for McDonagh-controlled telemarketing companies contacted timeshare owners and offered to help them terminate their timeshare interest for a fixed fee. If the timeshare owner expressed interest in the telemarketing companies’ services, the call was transferred to a “closer” – usually Duarte, Vannoy, Molina or another co-conspirator – who convinced victims to sign contracts with the telemarketing companies to get them out of their timeshare for a “one-time fee.”
Within weeks of the victim paying the fee, Duarte, Vannoy and Molina again contacted victims and told a series of lies to induce the victims to pay more money. For example, according to the indictment, some victims were falsely told that they would obtain – for an additional fee – a large settlement payment based on purported litigation against the victim’s timeshare company, including a class-action lawsuit.
The defendants allegedly also made false promises of securing – for an additional fee – a large “restitution” payment from the victim’s timeshare company because the timeshare company had purportedly rented out the victim’s timeshare property without the victim’s permission.
The victims were falsely told their additional fees would be refunded once the “restitution” and “settlement” had been paid, the indictment alleges. To conceal the scheme, the defendants frequently convinced victims to sign fraudulent non-disclosure agreements to prevent the victims from contacting the timeshare companies to inquire about the purported settlement or restitution payments by claiming that the timeshare companies required the agreements to release the promised funds. In fact, no litigation was pending, and no restitution payments were made.
McDonagh founded and or controlled several companies – Irvine-based Global Transfer Inc., Costa Mesa-based Global Transfer SoCal Inc., Santa Ana-based Nationwide Transfer Inc., and Signal Hill-based Nationwide Exit Specialist Inc. – that purported to offer timeshare relief. Once one telemarketing company became inundated with consumer complaints, McDonagh allegedly would form a new telemarketing company to perpetuate the fraud.
According to the indictment, McDonagh instructed employees of the telemarketing companies to “take no prisoners,” have “no remorse” when interacting with victims, and to “take every penny you can from” the victims “so they cannot sue” the telemarketing companies. The indictment further alleges that in response to complaints from Ortiz about the risks he was taking in participating in the conspiracy, McDonagh told him that “it’s def a risk but I mean I shut down global over a year ago and nothing! ‘Knock on wood’ but I mean it’s a decision you personally have to make ive made piece [sic] with it ive been a criminal my whole life and now it’s actually benefiting me[.]”
Through this conspiracy, the defendants fraudulently obtained more than $5 million from the victims. The indictment alleges that the scheme targeted dozens of victims, including many victims who were 55 years of age or older.
If convicted of all charges, each defendant would face a statutory maximum sentence of 20 years in federal prison on the conspiracy count and a statutory maximum sentence of 30 years in federal prison for each fraud count.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
The United States Secret Service and the Huntington Beach Police Department investigated this matter.
Any member of the public who has information related to this case or similar fraud schemes is encouraged to contact the Secret Service’s Santa Ana Resident Office at (714) 246-8257.
Assistant United States Attorneys Thomas F. Rybarczyk of the Public Corruption and Civil Rights Section and Ian V. Yanniello of the General Crimes Section are prosecuting this case.
Investigation into Illegal Casinos Leads to Indictments Alleging Gambling Dens, Bribery, Extortion Scheme and Drug TraffickingRead the Press Release
SANTA ANA, California – An investigation by the Orange County Asian Organized Crime Task Force has resulted in the arrest of seven out of nine defendants charged in three indictments that allege an array of criminal conduct, including drug trafficking, the attempted extortion and subsequent robbery of a small business, bribery of a police officer and operating illegal casinos.
One of three federal indictments unsealed this morning alleges a string of illegal casinos in Santa Ana and cites a shooting at one of the gambling dens in which an employee was struck in the neck.
“The number of illegal gambling dens has exploded during the pandemic, dramatically impacting the quality of life in many Orange County neighborhoods,” said United States Attorney Tracy L. Wilkison. “These illicit businesses are a breeding ground for drug trafficking, violence and even police corruption. We will continue to work with our local and federal law enforcement partners to eradicate this blight in our communities.”
“Illegal gambling locations create an increase in violent crime, adversely impact the quality of life of our communities, and cause disruption to our neighborhoods and our law-abiding business partners. This is something our agency will not tolerate,” said Santa Ana Police Chief David Valentin. “Today’s collaborative efforts, following a years-long extensive investigation with our local, state and federal partners, leverage our police department’s strong enforcement strategy – coined ‘Operation Community First’ – that was launched in February 2021 to target illegal gambling, narcotics and gun trafficking.”
“Today’s operation is the result of a joint effort among partners at the federal, state and local level in Santa Ana to dismantle an illegal gambling network that generated a variety of criminal activity causing great harm to the communities in which they operated,” said Kristi Johnson, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The defendants flouted the law and used enforcers with rival gangs to get victims to comply through the use of intimidation and violence in order to further their illicit network and generate profits.”
Members of the Task Force this morning arrested five defendants – which follows two arrests Tuesday afternoon. All seven defendants are expected to be arraigned this afternoon in United States District Court in Santa Ana. Authorities continue to search for two defendants.
The indictment alleging the operation of illegal casinos charges four defendants:
- Niem Ngoc Ha, aka “Dung Body,” 46, of Fountain Valley, who allegedly opened and operated four illegal casinos commonly called “nets” (if they are in a commercial district) or “slaphouses” (for those in residential areas), all of which were located in Santa Ana;
- Mindy Bui, aka “Thuy,” 36, of Westminster, who allegedly managed Ha’s illegal casinos;
- Honganh Thi Pham, aka “Hong,” 40, of Garden Grove, who also allegedly managed the illegal casinos; and
- Sammy Cardona, aka “Peanut,” 36, of Santa Ana, one of two defendants still being sought by authorities, who “would use violence to protect defendant Ha’s illicit casinos,” according to the indictment. Cardona is currently a fugitive.
These four defendants are charged with conspiracy and operating an illegal gambling business that allegedly generated thousands of dollars in profits on a daily basis.
Ha is additionally charged with bribery for allegedly paying approximately $128,000 to the now-convicted, former Santa Ana Police Officer Steven Lopez in an effort to protect his illicit casinos from law enforcement intervention. Lopez told Ha in September 2020 that Santa Ana police officers were planning to shut down one of his casinos in the coming days, according to the indictment. Lopez, who pleaded guilty in December 2020 to accepting the bribes, is scheduled to be sentenced on October 17.
“Organized criminal activity and illegal gambling schemes will not be tolerated in California,” said California Attorney General Rob Bonta. “Families throughout our state deserve to raise their children and live in safe neighborhoods, free from illicit and illegal activity. I am grateful for the collaboration and partnership of the U.S. Attorney’s Office, the FBI, the Santa Ana Police Department, IRS Criminal Investigation and the United States Postal Inspection Service in conducting this investigation.”
“Niem Ngoc Ha and other defendants operated multiple illicit gambling businesses that were abundant in criminal activity, including money laundering and bribery,” said IRS Criminal Investigation’s Special Agent in Charge Ryan L. Korner. “Today’s takedown by the Orange County Asian Organized Crime Task Force demonstrates law enforcements determination and collaborative efforts to protect our communities from criminal enterprises. This should serve as a reminder that criminal activity within our communities will not be tolerated.”
“These defendants thought they would get away with their alleged criminal enterprise through intimidation and lies; but when you violate the rule of law and put the community and the United States Postal Service at risk, Postal Inspectors will leave no stone unturned to find you and bring you to justice for your crimes,” said Inspector in Charge Carroll N. Harris III of the Los Angeles Division of the U.S. Postal Inspection Service.
The second indictment charges two men in a scheme to extort small businesses that were also operating as nets. Vincent Randal Pimentel, 30, of Santa Ana, and Steven Gallegos Saenz, 39, of Whittier, allegedly robbed those small businesses that refused to pay “taxes.” The indictment alleges that Saenz went to small businesses, claimed to be “mafia,” and made demands for extortionate payments, the indictment alleges. Pimentel is currently a fugitive
The indictment specifically alleges that on April 19, 2019, Saenz went to a Santa Ana video rental shop – which was also operating as a net – to demand the payment of “taxes.” After the owner refused to pay, Saenz, Pimentel and others went to the store later that day to rob the business, according to the indictment. During the incident, one of the robbers brandished what appeared to be a handgun, and the crew allegedly stole an $11,000 digital gambling machine, two $3,000 black digital gambling machines, two desktop computers, and approximately $3,500 in cash.
The two-count indictment charges Pimentel and Saenz with conspiracy to interfere with commerce by robbery and extortion, and interference with commerce by robbery.
The third indictment names three people who allegedly participated in a narcotics transaction involving a casino in Anaheim. This indictment charges:
- Ricardo Alonzo Nunez, aka “Rascal,” 44, of Anaheim, who agreed to sell methamphetamine;
- Marcus Jason Loomis, aka “Negro,” 37, of Barstow, who allegedly transported nearly two pounds of methamphetamine from an illegal gambling business in Anaheim that was supposed to be delivered to Nunez’s buyer; and
- Vanessa Maria Galloway, 37, of Barstow, who was present when the methamphetamine was seized, and who is charged in this indictment with possession with the intent to distribute heroin.
Nunez and Loomis are charged with conspiracy to distribute and possess with intent to distribute methamphetamine. Nunez and Loomis are individually charged with substantive methamphetamine distribution counts. Galloway is charged individually with possession with intent to distribute heroin. Loomis and Galloway were taken into custody Tuesday afternoon.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
The charges of conspiracy and operating an illegal gambling business each carry a statutory maximum penalty of five years in federal prison. The bribery offense carries a statutory maximum penalty of 10 years in prison.
The violations of the Hobbs Act that allege interference with commerce by robbery and extortion each carry a statutory maximum sentence of 20 years in federal prison.
The methamphetamine charges discussed above each carry a mandatory minimum sentence of 10 years in federal prison and a potential sentence of life. The heroin trafficking offense carries a statutory maximum sentence of 20 years.
The ongoing investigation into illegal gambling houses in Orange County is being conducted under the auspices of the Orange County Asian Organized Crime Task Force. The primary investigatory agencies are the FBI; the Santa Ana Police Department; the California Department of Justice, Bureau of Gambling Control; IRS Criminal Investigation; and the United States Postal Inspection Service.
Substantial assistance is being provided by the California Highway Patrol, the Westminster Police Department, the Orange County Sheriff’s Department, the Anaheim Police Department and the Garden Grove Police Department.
Assistant United States Attorneys Daniel H. Ahn and Daniel S. Lim of the Santa Ana Branch Office are prosecuting this case.
Orange County Man Arrested on Federal Stalking Charge Alleging Multiyear Harassment Campaign Against Prominent Online GamerRead the Press Release
SANTA ANA, California – An Orange County man is expected to appear in federal court today after his arrest on a federal criminal complaint alleging that he stalked a professional online gamer during a multi-year harassment campaign.
Evan Baltierra, 29, of Trabuco Canyon, was arrested by FBI agents on Monday afternoon, and he is expected to make his initial appearance this afternoon in United States District Court in Santa Ana.
According to an affidavit filed with the complaint, since July 2020, Baltierra has orchestrated a campaign of harassment targeting the victim, her boyfriend, her friends and her boyfriend’s family. The victim, a resident of Canada, is a prominent professional gamer in the community of “World of Warcraft,” a long-running and popular multiplayer online role-playing game.
In November 2019, the victim traveled to Anaheim to attend “Blizzcon,” an annual gaming convention that focuses on several video game franchises, including “World of Warcraft.” The victim met Baltierra in person at a meet-and-greet with her fans at the Anaheim Convention Center.
Following the convention, Baltierra allegedly asked the victim to be his “valentine.” In response, she politely told him she had a boyfriend. Baltierra then allegedly expressed a desire to visit the victim in Canada, an offer she declined.
After learning from an online friend in June 2020 that Baltierra was trying to find out where she lived because he wanted to visit her, the victim decided to remove Baltierra as moderator of her stream channel and block him from her social media.
Baltierra allegedly continued to contact the victim via direct message on various platforms, including Twitter, Instagram and Reddit, and also via email. He allegedly contacted the victim’s boyfriend and her colleague via the same online platforms. Many of these messages contained threats of violence toward the victim.
Baltierra also allegedly created fictitious online profiles that displayed photographs of the victim, including pornographic photographs where it appears that Baltierra photoshopped the victim’s face onto the photograph. He then sent the photoshopped pictures to the victim’s friends and family, and regularly posted the photographed pictures on various internet chat rooms, the affidavit alleges.
Despite obtaining a temporary restraining order against Baltierra in Orange County Superior Court in February 2021 and Baltierra signing an agreement in which he promised to end the harassment campaign, Baltierra allegedly continued to stalk the victim.
In March 2022, law enforcement executed a search warrant at Baltierra’s residence and seized several items, including a thumb drive that contained many photoshopped nude images with the victim’s face on them, and evidence on Baltierra’s iPhone of email accounts with which he used to send the victim harassing messages, the affidavit states.
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.
Baltierra is charged with one count of stalking. If convicted, Baltierra would face a statutory maximum sentence of five years in federal prison.
The FBI is investigating this matter.
Assistant United States Attorney Jake D. Nare of the Santa Ana Branch Office is prosecuting this case.
Former Oxnard Man Pleads Guilty to Federal Charges for Enticing 10-Year-Old Girl into Sending Sexually Explicit Images of HerselfRead the Press Release
LOS ANGELES – A former resident of Ventura County pleaded guilty today to federal criminal charges for using Instagram to entice a 10-year-old girl into sending him sexually explicit images of herself.
Barry Bryant Rossman, 62, a.k.a. “Ben,” formerly of Oxnard and who now resides in Santa Rosa, pleaded guilty – on what was supposed to be his first day of trial – to all three charges pending against him: one count of production of child pornography, one count of enticement of a minor to engage in criminal sexual activity, and one count of receipt of child pornography.
According to court documents, in late December 2019 and early January 2020, Rossman, then 60 years old, posed as “Ben,” purportedly a 21-year-old man, and used the Instagram account “itsben6969” to contact the victim – a 10-year-old girl in Colorado. When Rossman first contacted the victim, he pretended to have a 13-year-old brother who had mischievously taken his phone and reached out to the victim.
Rossman engaged in conversation with the victim, using flattery and discussing topics such as Christmas gifts. Over the following days, Rossman’s conversations with the victim became increasingly sexually explicit, and Rossman convinced the victim to send him sexually exploitative photographs of herself.
After Rossman and the victim exchanged photographs, videos, and messages, Rossman instructed the victim to delete her messages, claiming that his little brother might get into his Instagram account and Rossman did not want his little brother “loving” the photos like he did. Shortly thereafter, the victim’s mother discovered the messages on her daughter’s phone and called the police.
In May 2020, law enforcement executed a search warrant at Rossman’s residence in Oxnard and found evidence linking his iPhone to the Instagram account used to contact the victim.
United States District Judge Stanley Blumenfeld Jr. scheduled an August 23 sentencing hearing, at which time Rossman will face a mandatory minimum sentence of 15 years in federal prison and a statutory maximum sentence of life imprisonment.
The FBI and the Erie (Colorado) Police Department investigated this matter.
Assistant United States Attorneys Chelsea Norell and Kathy Yu of the Violent and Organized Crime Section are prosecuting this case.
Federal Bureau of Prisons Corrections Officer Pleads Guilty to Sexual Assault of Woman in Custody in Los Angeles JailRead the Press Release
LOS ANGELES – A corrections officer with the Federal Bureau of Prisons (BOP) pleaded guilty today in federal court to one felony count of deprivation of rights under color of law for sexually assaulting a woman in custody in December 2020.
Jose Viera, 49, of Monterey Park, pleaded guilty before United States District Judge Otis D. Wright II.
Viera was a BOP corrections officer assigned to work at Metropolitan Detention Center-Los Angeles (MDC-LA), a federal prison which holds male and female pre-trial detainees and persons serving custodial sentences. In his role as corrections officer, Viera was required to uphold the Constitution and ensure the safety and security of persons housed at MDC-LA. Viera was placed on administrative leave in March.
Viera admitted that in December 2020 he was assigned to supervise incarcerated women who were quarantined due to COVID-19 exposure and infection. During the morning of December 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. Instead, Viera admitted that he laid down next to the victim in her bed, sandwiching her between his body and the wall. Then, he sexually assaulted the victim, causing her pain and putting her in fear of physical harm.
Viera committed this assault despite knowing that the victim did not consent and that his actions violated her constitutional rights.
When the FBI and the Department of Justice’s Office of the Inspector General (DOJ-OIG) conducted a voluntary interview of Viera about the sexual assault allegations, Viera lied to federal agents about his misconduct.
“Law enforcement officers have a duty to protect the civil rights of all Americans, and a failure to uphold this principal will be met with decisive action,” said United States Attorney Tracy L. Wilkison. “Mr. Viera has admitted sexually abusing a woman while acting under the color of his law enforcement authority. His conduct undermined the integrity of our justice system and had a detrimental effect on the high-quality work typically performed by his fellow correctional officers.”
“The defendant betrayed his oath to uphold the Constitution and targeted a vulnerable woman in custody,” said Assistant Attorney General Kristen Clarke for the Justice Department’s Civil Rights Division. “The Justice Department’s Civil Rights Division is committed to ensuring that those who work in federal prisons and abuse their positions of authority by sexually assaulting people in their care are held accountable. We will continue to take action against perpetrators of these sexual assaults while seeking justice for the survivors of these heinous crimes.”
“Mr. Viera used his position of authority to sexually assault a victim who was under his care and who should have felt secure in his presence,” said FBI Assistant Director in Charge Kristi K. Johnson. “Today’s guilty plea is welcome in that Mr. Viera has taken responsibility for his actions, a move that will serve as a deterrent for such behavior by anyone in a position of power within prison walls.”
“Instead of delivering food to an inmate in COVID-19 isolation, Viera abused his power and sexually assaulted the inmate in her cell,” said DOJ-OIG Special Agent in Charge Zachary Shroyer. “No inmate should experience abuse at the hands of correctional officers, and the Department of Justice Office of the Inspector General will continue to investigate and hold accountable those who engage in any form of abuse.”
Judge Wright scheduled a sentencing hearing for March 13, 2023, at which time Viera will face a statutory maximum penalty of 10 years in federal prison.
This case was investigated by the FBI’s Los Angeles Field Office and the DOJ-OIG’s Los Angeles Field Office.
The case is being prosecuted by Assistant United States Attorney Thomas Rybarczyk of the Public Corruption and Civil Rights Section, and Special Litigation Counsel Fara Gold and Trial Attorney Nikhil Ramnaney of the Criminal Section of the Justice Department’s Civil Rights Division.
Reseda Man Sentenced to Nearly 10 Years in Prison for Burglarizing Self-Storage Units Then Selling Stolen Firearms to Convicted FelonsRead the Press Release
LOS ANGELES – A San Fernando Valley man was sentenced today to 115 months in federal prison for burglarizing self-storage units in Southern California, stealing dozens of firearms, and selling some of the weapons to convicted felons.
Rick Eric Herst, 36, a.k.a. “Loyal,” of Reseda, was sentenced by United States District Judge Michael W. Fitzgerald.
Herst pleaded guilty in February 2021 to one count of conspiracy to traffic in firearms and one count of selling firearms to a convicted felon.
From December 2018 to September 2019, Herst conspired with Jeffrey James LaFraniere, 39, of Van Nuys, and Alan Elperin, 31, of Mission Hills. Together, these three men burglarized multiple self-storage units in Glendale, Valencia, Culver City, West Los Angeles, Northridge, Culver City, Thousand Oaks, Rancho Mirage and elsewhere, stealing firearms and other valuables. They offered the stolen firearms for sale to customers either in person or via text message. LaFraniere and Herst sold the firearms to buyers they knew were convicted felons.
For example, on May 30, 2019, the trio burglarized a self-storage facility in Valencia and stole 35 firearms, including multiple .45-caliber pistols, 12-gauge shotguns and high-powered rifles. On the same day as the Valencia burglary, LaFraniere and Herst sold two of the stolen firearms – a .45-caliber pistol and a .40-caliber pistol – to a buyer whom they knew was a convicted felon.
At the time of his arrest in March 2020, law enforcement executed a search warrant at Herst’s residence and found a loaded Glock 9mm pistol, which was one of multiple weapons stolen during a residential burglary that occurred in or around January 2020. Herst also possessed 14 shotgun shells, 95 rounds of .38-caliber ammunition, more than 30 stolen debit and credit cards, multiple stolen or fake California driver’s licenses, and a large quantity of stolen merchandise belonging to various burglary victims.
“Although many guns have not been recovered, those that have were largely found in the hands of felons or recovered at crime scenes,” prosecutors wrote in a sentencing memorandum.
Elperin pleaded guilty in November 2020 to one count of conspiracy and one count of receiving stolen firearms. He is serving a 100-month federal prison sentence. LaFraniere pleaded guilty in September 2020 to one count of conspiracy, one count of receiving stolen firearms and one count of selling firearms to a felon. His sentencing hearing is scheduled for May 26, at which time he will face a statutory maximum sentence of 25 years in federal prison.
The FBI Eurasian Organized Crime Task Force and the Los Angeles County Sheriff’s Department investigated this matter.
Assistant United States Attorney Ian V. Yanniello of the International Narcotics, Money Laundering, and Racketeering Section prosecuted this case.
Woman Serving Life Prison Sentence Allegedly Led Ring that Used Stolen Identities to Apply for Pandemic Unemployment BenefitsRead the Press Release
LOS ANGELES – Federal authorities today arrested five people linked to a ring that allegedly obtained at least $2 million in California unemployment insurance (UI) benefits – mostly pandemic-related relief – by using stolen identities, some of which belonged to California prison inmates.
The arrests were made pursuant to a 39-count indictment that charges 13 defendants in a scheme to use misappropriated personal identifying information (PII) to fraudulent apply for, and receive, unemployment benefits, mostly during the second half of 2020.
The lead defendant in the case is Natalie Le Demola, 37, who is currently serving a life prison sentence after she was convicted in 2005 of first-degree murder. The indictment also charges Carleisha Neosha Plummer, 32, of Los Angeles, who was a close associate of Demola in prison until she was paroled in July 2020.
The indictment charges all 13 defendants with conspiracy to commit wire fraud and bank fraud. The conspiracy count alleges 150 overt acts, including illegally obtaining PII, some of which was provided by an unnamed prison official employed by the California Department of Corrections and Rehabilitation.
The indictment names various defendants in 31 bank fraud counts and seven aggravated identity theft counts.
Demola, Plummer and other co-conspirators “would acquire the PII, such as the names, dates of birth, and Social Security numbers, of individuals, including identity theft victims, who were not eligible for UI benefits, including pandemic benefits, because they were employed, retired, or incarcerated,” the indictment alleges. Members of the conspiracy then allegedly used the information to make fraudulent online applications for UI benefits from the California Employment Development Department (EDD). Once the applications were approved, members of the conspiracy received EDD-funded debit that allowed them to withdraw money from ATMs across Southern California, according to the indictment.
The defendants named in the indictment are:
- Demola, originally of Corona, who will be brought to federal court to face the charges in this case;
- Plummer, 32, of Los Angeles, who was arrested today;
- Khanshanda King, 31, of Los Angeles, who is still being sought;
- Cleshay Johnson II, 28, of Los Angeles, who is still being sought;
- James Antonio Johnson, who has several aliases including “Big Dawg Niddy,” 31, of Los Angeles, who is currently in custody in a Los Angeles County jail;
- Felicite Aleisha King, 41, of Los Angeles, who is still being sought;
- Shafequah Lynete Mitchell, 33, of Los Angeles, who is currently traveling outside of California;
- Loresha Shamone Davis, 31, of Moreno Valley, who was arrested today;
- Porsha Latrice Johnson, 32, of Lynwood, who was arrested today;
- Donisha Lashawn Pace, 38, of South Los Angeles, who was arrested today;
- Dominique Charmone Martin, 37, of Yucaipa, who is still being sought;
- Mykara Destiny Robertson, 23, of Los Angeles, who is still being sought; and
- Amber Jane Wade, 34, of Palmdale, who was arrested today.
Those arrested today are being arraigned this afternoon in United States District Court in Los Angeles.
The conspiracy and bank fraud charges each carry a statutory maximum sentence of 30 years in federal prison. Aggravated identity theft carries a mandatory two-year consecutive sentence.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
The investigation into this scheme was conducted by the Los Angeles El Camino Real Financial Crimes Task Force, a multi-agency task force led by Homeland Security Investigations that includes federal and state investigators who are focused on financial crimes in Southern California. The California Employment Development Department, the California Department of Corrections and Rehabilitation, the United States Department of Labor – Office of Inspector General, the Inglewood Police Department, and the United States Marshals Service participated in this investigation.
Assistant United States Attorney Gregory Bernstein of the Major Frauds Section is prosecuting this case.
Former Head of Anaheim Chamber of Commerce Named in Federal Criminal Complaint Alleging False Statements on Loan ApplicationRead the Press Release
SANTA ANA, California – The former president and CEO of the Anaheim Chamber of Commerce is expected to appear this afternoon in federal court after being charged with lying to a mortgage lender about his assets while seeking a loan for a $1.5 million home in the San Bernardino Mountains.
Todd Ament, 57, of Orange, was charged in a 99-page criminal complaint filed Monday afternoon in United States District Court with making false statements to a financial institution while seeking funding in late 2020 to purchase a second home – a five-bedroom residence in Big Bear City.
The affidavit in support of the criminal complaint outlines a plot in which Ament – with the assistance of a political consultant who was a partner at a national public relations firm – devised a scheme to launder proceeds intended for the Chamber through the PR firm into Ament’s bank account. This infusion of cash – which appears to have been a loan from the PR firm engineered by the political consultant – allegedly influenced the lender’s decision to fund the mortgage.
The scheme led to a series of wire transfers from the PR firm that ultimately gave Ament $205,000 and made it appear he had enough cash on hand to secure the home loan, according to the affidavit. Ament allegedly used some of that money for the down payment, and some was used to make an out-of-escrow payment to the seller. The affidavit states that Ament made a $200,000 payment directly to the seller in an apparent effort to reduce the sale price of the house, thus reducing property taxes and lowering the commission to the seller’s real estate agent, the affidavit states.
An investigation outlined in the affidavit revealed that Ament and the political consultant had a close relationship for several years, one that included leading a small group of Anaheim public officials, consultants and business leaders. That group –described by Ament and the political consultant as a “family” and a “cabal” – met regularly at “retreats” to allegedly exert influence over government operations in Anaheim, according to the affidavit.
Ament and the political consultant also allegedly devised a scheme to divert proceeds intended for the Chamber through the PR firm and into Ament’s personal bank account. The affidavit alleges that Ament and the political consultant schemed to defraud a cannabis company that had retained the political consultant to lobby for favorable cannabis-related legislation in Anaheim. The cannabis company paid $225,000 to the Chamber with the understanding that it would have access to a task force that crafted such legislation, but at least $31,000 of that money was paid directly to Ament without those payments being disclosed to the client, the affidavit alleges.
The charge of making false statements to a financial institution carries a statutory maximum sentence of 30 years in federal prison.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
The FBI and IRS Criminal Investigation are conducting the investigation in this matter.
Assistant United States Attorneys Daniel H. Ahn, Daniel S. Lim and Melissa S. Rabbani of the Santa Ana Branch Office are prosecuting this case.
Former O.C. Physician Assistant Sentenced to Nearly 4 Years in Prison for Issuing and Selling Opioid Prescriptions to Known Drug DealersRead the Press Release
SANTA ANA, California – A former physician assistant at a Fountain Valley medical clinic was sentenced today to 46 months in federal prison for conspiring to issue and sell prescriptions for oxycodone, a highly addictive opioid painkiller, without a medical purpose, to drug dealers, knowing the drugs would be sold on the street.
Raif Wadie Iskander, 56, formerly of Ladera Ranch, but who now resides in Ennis, Montana, was sentenced by United States District Judge James V. Selna.
Iskander pleaded guilty in November 2020 to one count of conspiracy to distribute oxycodone.
From 2018 to April 2019, Iskander, who was a licensed physician assistant in California, wrote prescriptions for purported “patients” he had never met or examined. Iskander provided to drug dealers multiple paper prescriptions that he had signed, but with the patient names left blank, to be filled in by drug dealers later.
In exchange for cash, Iskander wrote fraudulent oxycodone prescriptions for co-defendants Johnny Gilbert Alvarez, 42, a.k.a. “M.J.,” of Santa Ana, who sold the prescribed drugs on the street as well as to an undercover officer.
Iskander knew that the oxycodone filled from the prescriptions would be sold to drug customers who were not using the oxycodone for legitimate medical purposes and whom he had never met or examined.
Alvarez pleaded guilty in November 2021 to one count of distribution of methamphetamine and is scheduled to be sentenced on June 13.
The Drug Enforcement Administration, the Costa Mesa Police Department, and the California Department of Health Care Services investigated this matter.
Assistant United States Attorney Rosalind Wang of the Santa Ana Branch Office prosecuted this case.
Diamond Bar Man Arrested on Indictment Charging Him with Using His Car to Intimidate Demonstrators at ‘Stop Asian Hate’ RallyRead the Press Release
LOS ANGELES – A Diamond Bar man was arrested today on federal charges alleging that he disrupted a “Stop Asian Hate” rally in March 2021 by deliberately running a red light, blocking the path of demonstrators lawfully using a crosswalk and yelling racial epithets at them.
Steve Lee Dominguez, 56, is charged in a federal grand jury indictment with two counts of bias-motivated interference with federal protected activities.
Dominguez is expected to be arraigned this afternoon in United States District Court in downtown Los Angeles.
According to the indictment that was unsealed today, on March 21, 2021, a “Stop Asian Hate” rally occurred in Diamond Bar. The rally was a protest against the increase in hate crimes and hate incidents against members of the Asian American Pacific Islander (AAPI) community both locally and nationally – including the murders of six Asian American women five days earlier in Atlanta.
A group of rally participants assembled at the intersection of Diamond Bar Boulevard and Grand Avenue, carrying American flags and large signs in support of their cause. The demonstrators had gathered peacefully and lawfully crossed the streets using the marked pedestrian crosswalk when they had the right of way.
During the rally, Dominguez was driving a black Honda four-door sedan and was stopped at a red light at the intersection. Dominguez allegedly yelled, “Go back to China!” and other racial slurs at the demonstrators. Dominguez then allegedly deliberately drove his car through the intersection’s crosswalk at the red light, made an illegal U-turn and cut off the route of several rally participants lawfully crossing the street.
One of the victims was an Asian woman carrying a sign that read, “Stop Asian Hate.” Another victim was a minor Black female rally participant who carried a sign that read, “End the Violence Against Asians.” Another person who was cut off in the crosswalk was a 9-year-old child, and Dominguez’s car narrowly missed coming into contact with her and other victims, according to the indictment. No injuries were reported.
Dominguez allegedly then pulled his car over some distance away from the intersection, got out of the car and continued to yell racial epithets and threats at the demonstrators. He then called the police, identified himself as “John Doe” and falsely reported to police that the rally participants were blocking the street and he had to run a red light “because they were about to trample my car,” the indictment alleges. He also allegedly requested that police “get some control out” at the intersection.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
If convicted of the two charges in the indictment, Dominguez would face a statutory maximum penalty of 20 years in federal prison.
The FBI investigated this matter. The Los Angeles County Sheriff’s Department initially responded to the scene and assisted in this matter.
Assistant United States Attorney Veronica Dragalin of the Public Corruption and Civil Rights Section is prosecuting this case.
Any member of the public who has information related to this incident or other hate crimes is encouraged to call the FBI’s Los Angeles Field Office at (310) 477-6565 or report tips online at https://tips.fbi.gov.
Former San Bernardino County Sheriff’s Deputy Pleads Guilty to Fraud and Tax Charges in Multimillion-Dollar Investment SwindleRead the Press Release
LOS ANGELES – A former San Bernardino County sheriff’s deputy has pleaded guilty to multiple felonies for deceiving victims into investing at least $5.6 million with him, then using their money on extravagant gambling, taking private jet airplane rides and buying luxury items for his girlfriends, the Justice Department announced today.
Christopher Lloyd Burnell, 51, of Highland, pleaded guilty on Monday afternoon to 11 counts of wire fraud and two counts of filing a false tax return.
According to court documents, Burnell falsely claimed to have accumulated tens of millions of dollars from lawsuits he purportedly won against the San Bernardino County Sheriff’s Department and Kaiser Permanente; from selling a patent for an air-cooled, bullet-resistant vest to Oakley Inc.; and through investments in small businesses and money-lending opportunities. The scheme began no later than November 2010 and continued until September 2017.
After deceiving victims into believing he was a wealthy businessman, Burnell then induced victims to invest up to hundreds of thousands of dollars at a time with him by offering exclusive investment opportunities that promised rates of returns as high as 100% to be repaid in a few weeks, according to prosecutors’ trial memorandum. In some instances, Burnell asked the victim for an initial trial investment with him, during which he would fulfill his promised returns – and gain the victim’s trust – only to ask for a larger amount from them.
But these investment opportunities did not exist. Rather, Burnell spent the money on maintaining a life of luxury. Burnell spent victims’ money on, among other things, gambling and luxury items, including losing more than $2 million in gambling at the San Manuel Casino in Highland, $500,000 in private jet trips, $70,000 on Louis Vuitton merchandise, and $175,000 on luxury cars and an apartment lease for his then-girlfriends, the trial memorandum states. Burnell continued this investment fraud scheme for years until he could not identify new victims to defraud and the money from his victims ran out.
Burnell caused victim-investors to distribute at least $5,672,380 to him, according to court documents.
As victims began to raise concerns to him about a lack of repayment and defaults, Burnell claimed that his money had been tied up in a trust fund and his remaining assets had been seized by federal authorities. He then cheated some of the victims out of additional funds by falsely claiming he needed loans to pay for his then-wife’s cancer treatment, a child custody dispute with his father-in-law, and other personal expenses.
To alleviate victims’ concerns, Burnell showed many victims a fabricated Wells Fargo bank statement that said he had more than $150 million in his account that he would use to pay back victims once his funds were no longer tied up. In truth, Burnell had less than $6,500 in that account.
Burnell did not report any of the money he received from victims in 2011 or 2012 on his personal income tax returns that he filed jointly with his then-wife. Instead, Burnell only reported income from gambling winnings in 2011 and 2012 – estimated to be more than $1 million – all of which was purportedly offset by gambling losses.
United States District Judge Michael W. Fitzgerald has scheduled an August 15 sentencing hearing, at which time Burnell will face up to 20 years in federal prison for each wire fraud count and a statutory maximum sentence of three years in federal prison for each tax count.
IRS Criminal Investigation and the United States Secret Service investigated this matter.
Assistant United States Attorney Jerry C. Yang, Chief of the Riverside Branch Office, and Assistant United States Attorney Robert S. Trisotto, also of the Riverside Branch Office, are prosecuting this case.
Orange County Man Sentenced to 2½ Years in Federal Prison for Fraudulently Obtaining $1.5 Million in COVID-Relief LoansRead the Press Release
SANTA ANA, California – An Orange County man was sentenced today to 30 months in federal prison for fraudulently obtaining more than $1.5 million in Paycheck Protection Program (PPP) COVID-relief loans that he used for personal expenses and stock market trading.
William Nicoloff Jr., 51, of Mission Viejo, was sentenced by United States District Judge James V. Selna, who also ordered him to pay $1,554,063 in restitution. At today’s hearing, Judge Selna said Nicoloff’s conduct was “extremely troubling” because it “pervert[ed] a public program designed to help small businesses during a time of severe economic hardship.”
Nicoloff pleaded guilty in April 2021 to one count of bank fraud and one count of conducting an unlawful monetary transaction.
From April 2020 to June 2020, Nicoloff obtained six PPP loans by defrauding two banks. To obtain the loans, he submitted to the banks false documents on behalf of four companies he owned and controlled – including Stonecreek Capital Partners and David Capital LLC – as well as himself and another individual. The fraudulent documents included falsified bank records, phony lease agreements, altered incorporation records, fake IRS records and bogus employee information.
On the loan applications, Nicoloff falsely certified the number of employees and average monthly payrolls of the applicant companies and falsely claimed Nicoloff did not own other businesses.
Nicoloff also falsely represented that the PPP funds would be used to pay employees and other permissible business expenses, when, in fact, he intended to use and later used the PPP loan proceeds to fund personal living expenses and securities trading activity entirely unrelated to the businesses for which the PPP loans were obtained.
In total, Nicoloff fraudulently obtained $1,554,054 in PPP loans.
Nicoloff transferred $405,880 in proceeds from the David Capital loan to a separate brokerage account and engaged in securities trading as well as using some of the loan to pay off personal expenses. Nicoloff has agreed to forfeit $1,709,151, which includes the $1,554,063 he obtained from the PPP loans as well as $155,097 in proceeds he gained because of securities trading from the illicit loans. These funds were previously recovered by the government from seizures of Nicoloff’s accounts.
The Federal Reserve Board – Office of Inspector General; the U.S. Treasury Inspector General for Tax Administration; IRS Criminal Investigation; and the Small Business Administration – Office of Inspector General investigated this matter.
Assistant United States Attorney Scott Paetty of the Major Frauds Section prosecuted this case.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
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.
3 Found Guilty of Participating in Scheme to Submit Millions of Dollars in Fraudulent Bills for Substance Abuse Treatment for TeensRead the Press Release
LOS ANGELES – A federal jury today convicted three defendants who participated in an $18.5 million scheme that submitted fraudulent claims to California’s Drug Medi-Cal program for alcohol and drug treatment services for high school and middle school students.
With today’s guilty verdicts, a total of 19 people have been convicted of federal criminal charges stemming from fraudulent bills submitted by a Long Beach company – the non-profit Atlantic Recovery Services (ARS), later called Atlantic Health Services – that provided substance use disorder treatment services to students at local high schools and middle schools through Medi-Cal and its Drug Medi-Cal program.
The three defendants convicted today of health care fraud charges are:
- Gregory Hearns, 66, of Compton, the billing supervisor for ARS who compiled the monthly billing and arranged for its submission to Medi-Cal (guilty of one count and acquitted on 10 others);
- LaLonnie Egans, 64, of Bellflower, a former manager at ARS (guilty of three counts);
- Tina Lynn St. Julian, 58, of Inglewood, a former counselor at ARS (guilty of four counts).
United States District Judge Philip S. Gutierrez is scheduled to sentence all three defendants on July 15, at which time each will face up to 10 years in prison for each count of conviction.
According to court documents and the evidence presented at a 12-day trial, the participants in the ARS scheme defrauded the Drug Medi-Cal program by submitting bills for services to students who did not medically need alcohol or drug treatment. ARS also billed Drug Medi-Cal for group and individual counseling sessions that were not provided or did not meet the requirements for reimbursement as to size, length, or setting. To support the false billings, ARS employees falsified numerous documents.
The former president and chief executive officer of ARS – Richard Mark Ciampa, 68, of Commerce – pleaded guilty last year and was sentenced in September to seven years in federal prison.
In March 2009, Drug Medi-Cal ordered ARS to repay an overpayment, which caused a significant amount of financial pressure on Ciampa and ARS. Ciampa, in turn, passed along this financial pressure to his employees and threatened the employees that they would lose their jobs with ARS or have their hours reduced to part-time if they did not generate significant billings. In response to Ciampa’s threats, ARS employees generated false and fraudulent claims for submission to Drug Medi-Cal.
Hearns also pressured ARS employees to increase billings. The pressure from ARS management prompted Egans and St. Julian to commit specific actions, including enrolling students in ARS’s substance abuse treatment program even if the students had used drugs or alcohol only one time or just occasionally, exaggerating documentation to falsely show that enrolled students had a medically diagnosed substance use disorder, falsifying documents to make it look like group and individual counseling sessions had taken place, collecting student signatures on sign-in sheets for group counseling sessions that the students did not attend or that were not conducted, and forging signatures on sign-in sheets and other documents that were used to support claims for reimbursement.
During the four-year period that ended in March 2013, ARS submitted false and fraudulent claims of just over $18.5 million, and Drug Medi-Cal paid approximately $17,635,100 on those claims.
The California Department of Justice, Division of Medi-Cal Fraud and Elder Abuse; the United States Department of Health and Human Services, Office of Inspector General; and the Internal Revenue Service - Criminal Investigation investigated this matter.
Assistant United States Attorneys Cathy J. Ostiller and Karen E. Escalante of the Major Frauds Section, and Assistant United States Attorney Nisha Chandran of the General Crimes Section are prosecuting this case.
Justice Department Seeks Forfeiture of Los Angeles Mega-Mansion Purchased with Proceeds of Armenian Corruption SchemeRead the Press Release
The United States is seeking the forfeiture of a more than 30,000-square-foot mega-mansion in the Holmby Hills neighborhood of Los Angeles, pursuant to a civil forfeiture complaint filed that alleges that the mansion was purchased with bribes paid by an Armenian businessman to the family of Gagik Khachatryan, a former high-ranking Armenian public official.
Gagik Khachatryan, 66, who was known as the “Super Minister,” because of his significant responsibilities, served as Chairman of the State Revenue Committee of the Republic of Armenia from 2008 to 2014 and as Minister of Finance for the Republic of Armenia from 2014 to 2016. In the complaint, which was filed Monday in U.S. District Court for the Central District of California, the United States alleges that businessman Sedrak Arustamyan paid Khachatryan and his family more than $20 million in bribes in exchange for favorable tax treatment of his businesses. The bribe payments allegedly were used to purchase the Holmby Hills property, which had been recently listed for sale for $63,500,000.
Gagik Khachatryan and his sons are charged in Armenia with receiving bribes in violation of the criminal code of the Republic of Armenia. Criminal charges are also pending in Armenia against Arustamyan for paying bribes.
This matter was investigated by the FBI's Eurasian Organized Crime Task Force (EOCTF) and the U.S. Marshals Service. The Republic of Armenia’s Prosecutor General’s Office and National Security Service provided critical assistance. The EOCTF is composed of multiple law enforcement agencies including the FBI, IRS-Criminal Investigation, the U.S. Postal Inspection Service, the Glendale Police Department, the Los Angeles Police Department, and the Los Angeles County Sheriff's Department.
Trial Attorney D. Hunter Smith of the Kleptocracy Asset Recovery Initiative of the Criminal Division’s Money Laundering and Asset Recovery Section and Assistant U.S. Attorney Maxwell Coll for the Central District of California are litigating the forfeiture.
The Kleptocracy Asset Recovery Initiative is led by a team of dedicated prosecutors in the Criminal Division’s Money Laundering and Asset Recovery Section, in partnership with federal law enforcement agencies, and often with U.S. Attorneys’ Offices, to forfeit the proceeds of foreign official corruption and, where appropriate, to use those recovered assets to benefit the people harmed by these acts of corruption and abuse of office. In 2015, the FBI formed International Corruption Squads across the country to address national and international implications of foreign corruption. Individuals with information about possible proceeds of foreign corruption located in or laundered through the United States should contact federal law enforcement or send an email to [email protected] or visit https://tips.fbi.gov/.
A civil complaint is merely an allegation, and the government has the burden of establishing the assets are subject to forfeiture by a preponderance of the evidence.
Justice Department Seeks Forfeiture of Los Angeles Mega-Mansion Allegedly Purchased with Proceeds of Armenian Corruption SchemeRead the Press Release
LOS ANGELES – The United States is seeking the forfeiture of a more than 30,000-square-foot mega-mansion in the Holmby Hills neighborhood of Los Angeles, pursuant to a civil forfeiture complaint that alleges the mansion was purchased with bribes paid by an Armenian businessman to the family of Gagik Khachatryan, a former high-ranking Armenian public official.
Khachatryan, 66, who was known as the “Super Minister” because of his significant responsibilities, served as chairman of the State Revenue Committee of the Republic of Armenia from 2008 to 2014 and as minister of finance for the Republic of Armenia from 2014 to 2016. In the complaint, which was filed Monday in federal court in Los Angeles, the United States alleges that businessman Sedrak Arustamyan paid Khachatryan and his family more than $20 million in bribes in exchange for favorable tax treatment of his businesses. The bribe payments allegedly were used to purchase the Holmby Hills property, which had been recently listed for sale for $63.5 million.
Khachatryan and his sons are charged in Armenia with receiving bribes in violation of the criminal code of the Republic of Armenia. Criminal charges are also pending in Armenia against Arustamyan for paying bribes.
This matter was investigated by the FBI’s Eurasian Organized Crime Task Force (EOCTF) and the United States Marshals Service. The Republic of Armenia’s Prosecutor General’s Office and National Security Service provided critical assistance. The EOCTF is composed of multiple law enforcement agencies including the FBI, IRS Criminal Investigation, the U.S. Postal Inspection Service, the Glendale Police Department, the Los Angeles Police Department, and the Los Angeles County Sheriff’s Department.
Assistant United States Attorney Maxwell Coll of the Asset Forfeiture Section and Justice Department Trial Attorney D. Hunter Smith of the Kleptocracy Asset Recovery Initiative of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) are litigating the forfeiture.
The Kleptocracy Asset Recovery Initiative is led by a team of dedicated prosecutors in MLARS, who work in partnership with federal law enforcement agencies, and often with U.S. Attorneys’ Offices, to forfeit the proceeds of foreign official corruption and, where appropriate, to use those recovered assets to benefit the people harmed by these acts of corruption and abuse of office. In 2015, the FBI formed International Corruption Squads across the country to address national and international implications of foreign corruption. Individuals with information about possible proceeds of foreign corruption located in or laundered through the United States should contact federal law enforcement or send an email to [email protected] or visit https://tips.fbi.gov/.
A civil complaint is merely an allegation, and the government has the burden of establishing the assets are subject to forfeiture by a preponderance of the evidence.
Santa Clarita Man Agrees to Plead Guilty to Securities Fraud for Bilking Investors Who Purchased Real Estate ‘Coupon Bonds’Read the Press Release
LOS ANGELES – A Santa Clarita resident who invested in real estate and sold “coupon bonds” that promised regular interest payments on top of principal repayment has agreed to plead guilty to a federal criminal charge for defrauding investors out of more than $1.7 million, the Justice Department announced today.
Matthew Skinner, 45, who in 2014 founded a company called Empire West Equity, Inc. and later established Simple Growth, LLC, was charged today with securities fraud in a one-count information filed in United States District Court.
Federal prosecutors today also filed a plea agreement in which Skinner agreed to plead guilty to the offense and admitted he fraudulently sold securities.
Skinner used social media platforms such as Facebook and YouTube to promote himself, falsely claiming to be an experienced and successful real estate investor with more than $200 million in deals under his belt, according to court documents.
After Empire West experienced financial troubles – Skinner was unable to pay his staff and investors – he established Simple Growth in 2018 and falsely told investors who purchased Simple Growth coupon bonds “that their money would be used to purchase real estate that [Skinner] and Empire West would develop and resell at a profit,” according to the plea agreement.
Skinner admitted that he did not intend to purchase, develop or resell real estate, and that he instead used investor funds to pay older investors, his employees and himself.
Skinner “used investor funds from those entities and accounts to pay for personal trips, his mortgage, his utility bills, cosmetic surgery, and alimony payments to his ex-wife,” he acknowledged in the plea agreement.
Simple Growth raised approximately $1,744,946 from more than 20 investors – none of whom received any of their money back.
The securities fraud charge against Skinner carries a statutory maximum penalty of 20 years in federal prison.
Skinner has agreed to surrender to federal authorities and make his initial court appearance on May 25.
The FBI conducted the investigation into Skinner.
Assistant United States Attorney Jeff Mitchell of the Major Frauds Section is prosecuting this case.
Former Federal Agent Found Guilty of Participating in Bribery Scheme that Brought Him Approximately $100,000 in Ill-Gotten GainsRead the Press Release
LOS ANGELES – A former special agent with Homeland Security Investigations (HSI) was found guilty by a federal jury today of dozens of criminal charges for accepting cash payments and other benefits to help an organized crime-linked person, including taking official action designed to help two foreign nationals gain entry into the United States.
Felix Cisneros Jr., 48, of Murrieta, was found guilty of 30 felonies: one count of conspiracy to commit bribery of a public official, one count of bribery, 26 counts of money laundering and two counts of subscribing to a false tax return. After today's verdict was read, Cisneros was ordered immediately remanded into federal custody.
According to evidence presented at his five-day trial, over an 18-month period that started in September 2015, Cisneros accepted cash, checks, private jet travel, luxury hotel stays, meals and other items of value from a person identified in court documents as “Individual 1,” who was associated with a criminal organization. Cisneros received approximately $100,000 in checks and gifts from Individual 1 in 2015 and 2016.
Cisneros accepted the cash and other bribes while employed as a special agent with HSI, which is an agency within the United States Department of Homeland Security. In exchange for the bribes, Cisneros performed a series of official acts at the behest of Individual 1, including:
- Accessing a DHS database for information about a German national identified as W.R., and telling Individual 1 he removed a “hit” on W.R., “thus indicating derogatory information had been removed”;
- Placing an alert in a law enforcement database for an address associated with an illegal marijuana grow operation so Cisneros could learn of law enforcement interest and warn Individual 1;
- Obtaining an official DHS letter signed by an HSI assistant special agent in charge to allow the parole of Individual 1’s brother-in-law into the United States from Mexico, and later providing updates about the brother-in-law’s asylum application; and
- Collecting information on an associate of Individual 1 whose home had been searched by law enforcement and later providing Individual 1 with information about the investigation.
Cisneros also underreported his total income on his federal income tax returns by at least $20,000 for the year 2015 and at least $73,404 for the year 2016.
United States District Judge R. Gary Klausner has scheduled an August 1 sentencing hearing. The conspiracy charge carries a statutory maximum sentence of five years in federal prison, the bribery count carries a sentence of up to 15 years, each money laundering charge carries a statutory maximum sentence of 20 years’ imprisonment, and each tax count carries a statutory maximum sentence of three years in federal prison.
The FBI, IRS Criminal Investigation and the Department of Homeland Security’s Office of Inspector General investigated this matter.
Assistant United States Attorney Ruth C. Pinkel of the Public Corruption and Civil Rights Section and Assistant United States Attorneys Michael J. Morse and Juan M. Rodriguez of the General Crimes Section are prosecuting this case.
South Bay Man Pleads Guilty to Participating in a Multimillion-Dollar Real Estate Scam Involving Fake Open Houses at Not-for-Sale HomesRead the Press Release
LOS ANGELES – A South Bay man pleaded guilty today to a federal criminal charge for participating with his sister in a $6 million real estate scam that involved listing homes without the owners’ consent and collecting money from multiple would-be buyers for each of the not-for-sale homes.
Adolfo Schoneke, 44, of Torrance, pleaded guilty to one count of conspiracy to commit wire fraud.
United States District Judge R. Gary Klausner has scheduled an August 8 sentencing hearing, at which time Schoneke will face a statutory maximum sentence of 20 years in federal prison.
On April 4, Schoneke’s sister, Bianca Gonzalez, 39, a.k.a. Blanca Schoneke, pleaded guilty to the same criminal charge. Her sentencing hearing is scheduled for October 3.
According to court papers, from November 2013 to December 2016, Schoneke and Gonzalez, along with co-conspirators, operated real estate and escrow companies based in Cerritos, La Palma and Long Beach under a variety of names, including MCR and West Coast Realty Services. Schoneke, Gonzalez and other co-conspirators found properties that they would list for sale – even though they did not intend to sell them to anyone.
The properties were listed on real estate websites such as the Multiple Listing Service (MLS) and were marketed as below-market short sales opportunities. In some cases, the homes were marketed through open houses arranged by tricking homeowners into allowing their homes to be used.
Multiple offers were accepted for each of the not-for-sale properties, but the co-conspirators hid this fact from the victims and instead led each victim to believe that his or her offer was the only one accepted. The co-conspirators strung victims along – sometimes for years – by telling them closings were being delayed because lenders needed to approve the purported short sales.
At the co-conspirators’ direction, office workers opened bank accounts to hide the co-conspirators’ involvement in the fraud. Those accounts were used to receive down payments on the homes and other payments from victims who were convinced to transfer the full “purchase price” after receiving forged short sale approval letters. The co-conspirators directed the office workers to withdraw large amounts of cash from these accounts, which made the proceeds harder to trace.
Investigators estimate that several hundred victims collectively lost more than $6 million during the scheme.
A co-conspirator, Mario Gonzalez, 50, was charged in a related case and pleaded guilty in January 2019 to conspiracy to commit wire fraud. His sentencing is scheduled for October 3.
The FBI and the Federal Deposit Insurance Corporation, Office of Inspector General investigated this matter. The investigation was initiated by numerous complaints to the Long Beach Police Department and the Los Angeles County Sheriff’s Department, both of which provided substantial assistance during the federal investigation.
Assistant United States Attorney Kerry L. Quinn of the Major Frauds Section is prosecuting this case.
Filipino Seaman Pleads Guilty to Federal Charge for Fatally Stabbing Fellow Crewmember on Los Angeles-Bound Container ShipRead the Press Release
LOS ANGELES – A Philippines national who fatally stabbed a fellow crewmember on a container ship en route from Shanghai to Los Angeles pleaded guilty today to a federal criminal charge.
Michael Dequito Monegro, 43, a resident of The Philippines, pleaded guilty to one count of committing an act of violence against a person onboard a ship that is likely to endanger the safe navigation of the ship.
United States District Judge Dale S. Fischer has scheduled a September 12 sentencing hearing, at which time Monegro will face a statutory maximum sentence of life in federal prison.
According to his plea agreement, in September 2020, Monegro was working as a seaman aboard the MSC Ravenna, a 153,000-gross-ton Liberian-flagged container ship. On September 20, 2020, the Ravenna was approximately 80 nautical miles from Southern California, nearing the end of its two-week voyage from Shanghai to the Port of Los Angeles.
That morning, several crewmembers were in a dressing room on the ship’s upper deck, preparing for their shift and waiting for their direct supervisor to provide their work assignments for the day. Shortly after Monegro saw his direct supervisor in the hallway outside the locker room, Monegro began stabbing him with a knife while they were both in the hallway in full view of several crewmembers.
The victim grappled with Monegro and the two fell to the floor. Monegro then got on top of the victim and continued stabbing him. Monegro then removed a second knife from the victim’s coveralls and stabbed him with both knives.
Crewmembers attempted to intervene to stop Monegro, including throwing a trash can at him, but their actions were unsuccessful. Monegro admitted that he only stopped stabbing the victim when he became too tired to continue.
The ship’s captain, chief mate and chief engineer all arrived on scene during the incident, and the captain convinced Monegro to get off the victim, who died on the ship from multiple stab wounds.
Monegro was convinced by the captain to walk to a conference room. After continued discussions, Monegro placed the knives on the conference room table and was escorted to his cabin.
After the incident, Monegro was confined to a cabin and crewmembers were assigned to guard the door, so they were unable to perform their normal duties on the ship. Other crewmembers were traumatized by witnessing Monegro stab and kill the victim.
Federal agents arrested Monegro after the ship docked at the Port of Los Angeles on September 27, 2020. He has been in federal custody since his arrest.
The FBI and the United States Coast Guard Investigative Service investigated this matter.
Assistant United States Attorney Jeffrey M. Chemerinsky of the Violent and Organized Crime Section; Assistant United States Attorney Mark A. Williams, Chief of the Environmental and Community Safety Crimes Section; and Assistant United States Attorney Matthew W. O’Brien, also of the Environmental and Community Safety Crimes Section, are prosecuting this case.
Real Estate Developer Agrees to Plead Guilty to Bribery Related to $45 Million Government Lease and Other Preferential ContractsRead the Press Release
LOS ANGELES – A real estate developer has agreed to plead guilty to a federal criminal charge for offering to buy a million-dollar home for a Los Angeles County public official in exchange for the official’s assistance securing a $45 million county lease for the developer, the Justice Department announced today.
Arman Gabaee, 61, a.k.a. “Arman Gabay,” of Beverly Hills, has agreed to plead guilty to one count of bribery, a crime that carries a statutory maximum sentence of 10 years in federal prison.
Gabaee is scheduled to enter his guilty plea on May 2 before United States District Judge George H. Wu, and also has agreed to pay a fine of at least $1,149,000 and any restitution ordered.
According to his plea agreement, Gabaee was a co-founder and co-managing partner of the Charles Company, a Hollywood-based commercial and residential real estate development firm. The then-county official whom Gabaee bribed was Thomas M. Shepos, 72, of Palmdale, who worked in Los Angeles County’s Real Estate Division and was involved in awarding contracts to real estate developers and contractors.
Beginning no later than 2011 and continuing until April 2017, Gabaee paid Shepos bribes and kickbacks of approximately $1,000 per month in exchange for county leases, preferential contract terms, non-public information and other benefits. From December 2016 when Shepos began cooperating to April 2017, Gabaee paid Shepos $6,000 in cash bribes during meetings Shepos secretly recorded at the direction of the FBI.
Further, in 2017, Gabaee offered to buy Shepos a Northern California residence – then worth more than $1 million – in exchange for Shepos’ assistance securing a county lease in the Hawthorne Mall, which Gabaee owned and was redeveloping. Gabaee wanted the county to enter into a 10-year, $45 million lease for county departments to rent office space in the Hawthorne Mall.
During other secretly recorded meetings with Shepos, Gabaee first offered to purchase him a home listed at $1,199,000 in Sonoma County. Upon learning that this property was already in escrow, Gabaee offered to buy Shepos a different house, listed at $1,095,000, and also located in Sonoma County. Gabaee placed two offers on this property, first for $1,035,000 and later for $1,065,000. Gabaee admitted in his plea agreement that he rescinded the second offer hours after he made it because FBI agents had approached and informed him that they were aware of his bribes to Shepos.
Shepos pleaded guilty in November 2018 to one count of making false statements to federal investigators who were investigating his financial relationship with Gabaee and one count of subscribing to a false tax return related to payments he received from Gabaee. Shepos is scheduled to be sentenced on June 27.
The FBI investigated this matter.
Assistant United States Attorneys Ruth C. Pinkel, Lindsey Greer Dotson and Thomas F. Rybarczyk of the Public Corruption and Civil Rights Section are prosecuting this case.
Federal Grand Jury Issues Indictment Alleging Irvine Man Concealed Material Support and Financing to Foreign Terrorist OrganizationRead the Press Release
SANTA ANA, California – A federal grand jury today returned a four-count indictment that charges an Irvine man with attempting to provide material support to two foreign terrorist organizations – Hay’at Tahrir al-Sham (HTS) and Hamas.
Jason Fong, 26, allegedly attempted in the spring of 2020 to provide to HTS tactical, combat and weapons training material – as well as information regarding the making of chemical weapons and improvised explosive devices.
The indictment further alleges that in May 2020 Fong attempted to fundraise for Hamas. The indictment further alleges that at the time he committed these offenses, Fong knew that each organization had been designated a foreign terrorist organization by the United States government.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
Fong has been summonsed to appear for an arraignment in United States District Court on May 23. A trial in this matter was previously set for October 25.
If he were to be convicted of the charges in the indictment, Fong would face a statutory maximum sentence of 20 years in prison for each of the four counts. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI, the Naval Criminal Investigative Service, Homeland Security Investigations, the Irvine Police Department, and the New York Police Department are participating in the ongoing investigation.
Assistant United States Attorneys Christine Ro and Mark Takla of the Terrorism and Export Crimes Section, and Trial Attorney John Cella from the Counterterrorism Section of the Justice Department’s National Security Division are prosecuting this case.
31 Gang Members and Associates of Mexican Mafia Charged in Racketeering IndictmentRead the Press Release
A 33-count federal grand jury indictment unsealed today charges 31 members and associates of the Orange County Mexican Mafia with racketeering offenses, two murders and six attempted murders, and related drug and gun charges.
“The Mexican Mafia allegedly preyed on vulnerable communities through fear, violence, and intimidation,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “This indictment sends a clear message that the Criminal Division, and our federal, state, and local partners, remain committed to protecting all of our communities from violence and exploitation.”
The indictment includes charges of Racketeer Influenced and Corrupt Organizations (RICO) conspiracy, violent crimes in aid of racketeering (VICAR) murder and attempted murder, conspiracy to distribute and possess with intent to distribute and distributing and possessing with intent to distribute methamphetamine and heroin, using a firearm to cause a death, and other firearm charges.
“The violence, drug dealing, and other criminal acts being committed in our communities by gangsters associated with the Mexican Mafia is being met with the strongest possible response by law enforcement,” said U.S. Attorney Tracy L. Wilkison for the Central District of California. “We will continue to investigate, arrest and prosecute these individuals to the fullest extent of the law to restore a sense of safety to so many neighborhoods that have felt the impact of their destructive conduct.”
According to the allegations contained in the indictment:[1]
The OC Mexican Mafia, also known as La Eme, is a “gang of gangs” that controls and directs other Hispanic gangs operating in Southern California and within the California penal system. The OC Mexican Mafia members divided control of various areas in Southern California, with the member in control of a specific area controlling the criminal activities in that respective territory and receiving “taxes” paid by gangs to allow them to deal drugs in that area. In addition to this widespread “tax” collection, it is alleged that the OC Mexican Mafia directly engaged in drug distribution in and out of prisons and jails. The indictment also alleges that the OC Mexican Mafia maintained authority over other Hispanic street gangs through murder, attempted murder and violent assaults with weapons including firearms.
“Cases targeting criminal enterprises like the Mexican Mafia require close collaboration with our local and federal partners and employ a variety of sophisticated techniques to overcome their evasive tactics,” said the Assistant Director in Charge Kristi K. Johnson of the FBI’s Los Angeles Field Office. “The Mexican Mafia in Orange County controls the majority of local gangs and rules by threatening violence and exacting violence on their enemies or against their own members who don’t follow strict rules. This indictment is the latest in our continuing joint efforts to target gangs and drug networks that fuel the violence in our communities.”
The indictment further alleges that in or around 2016, and continuing to at least in or around April 2022, defendants Johnny Martinez, Robert Aguirre and Dennis Ortiz were the OC Mexican Mafia members in charge of criminal activities in Orange County and within Orange County jail and prison facilities. Defendants Omar Mejia, Miguel Jose Alvarado, Luis Heriberto Vasquez, Michael Cooper and Abraham Guajardo held positions of shot-callers or mouthpieces for Martinez, Aguirre, and Ortiz. Defendant Robert Martinez held a position of authority within the Orange County Jail as defendant Johnny Martinez’s representative. Defendant Brenda Vanessa Campos Martinez served as a secretary for defendant Johnny Martinez, and defendant Danielle Canales served in a similar capacity for defendants Johnny Martinez and Cooper. The violent crimes alleged against the OC Mexican Mafia include:
- The Jan. 19, 2017, armed robbery and shooting death of R.R.;
- The Aug. 21, 2017, shooting death of R.V., who was shot seven times in the back of the head and body, and left dead on the street in Orange, California;
- The Aug. 5, 2017, attempted murder of defendant Munoz, who had fallen out of favor with The OC Mexican Mafia and was shot seven times;
- The Dec. 1, 2017, attempted murder of D.D., a representative of a Hispanic street gang, who was allegedly abusing his power and authority within the OC Mexican Mafia enterprise;
- The Dec. 12, 2017, attempted murder of E.O., an OC Mexican Mafia associate incarcerated at Calipatria State Prison, who was believed to have violated the OC Mexican Mafia’s code by warning individuals that they were targeted for violence by the OC Mexican Mafia, and who suffered multiple injuries, including puncture wounds to his shoulders, stomach, lower back, and upper back;
- The Dec. 25, 2017, attempted murder of R.M. for showing disrespect to defendant Martinez;
- The July 29, 2020, attempted murder of F.B., a member of an Orange County Hispanic street gang incarcerated at the Theo Lacy Facility, who was targeted because he purportedly claimed that he would speak to law enforcement about the Mexican Mafia, and whose throat was slit; and
- Two murder attempts on Jan. 5, 2018, and Dec. 31, 2019, of defendant Cooper, who had fallen out of favor with defendants Martinez and Aguirre, and who in one incident was stabbed multiple times in the head and back area, and in the second was cut in the throat and face.
In addition to these alleged violent acts, law enforcement investigated the OC Mexican Mafia’s methamphetamine and heroin trafficking activities on the streets, as well as in the prisons and jails, and completed multiple undercover purchases of methamphetamine and heroin from OC Mexican Mafia associates who were selling narcotics on behalf of defendant Martinez and the OC Mexican Mafia.
Out of the 31 defendants charged in the indictment, 21 were already in custody, and nine were arrested last night and this morning. Those arrested today are expected to be arraigned this afternoon in U.S. District Court in Santa Ana, and those already in custody will make initial appearances once each defendant is in federal custody.
The RICO statute provides for a maximum penalty of 20 years’ imprisonment for acts performed as part of the criminal organization. The VICAR statute provides for a mandatory sentence of life imprisonment for murder, a maximum sentence of 20 years for assault with a dangerous weapon, a maximum sentence of 10 years for attempted murder, and a maximum sentence of three years for attempted assault with a dangerous weapon. The charge of possessing, using, carrying and discharging a firearm in furtherance of, during and in relation to a crime of violence carries a maximum sentence of life, with a mandatory sentence of at least five years and up to 10 years. The charge of causing death using a firearm carries a maximum sentence of life. Distribution and possession with intent to distribute methamphetamine and heroin carries a maximum sentence of life, and a minimum mandatory sentence of at least five years and up to 10 years. Felon in possession of a firearm or ammunition carries a maximum sentence of 10 years’ imprisonment. A federal district judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI; the DEA; the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); IRS-Criminal Investigation; the Santa Ana Police Department; the Anaheim Police Department; the Fullerton Police Department; the Orange Police Department; the Placentia Police Department; the Orange County Sheriff’s Department; the Orange County Probation Department; the Orange County District Attorney’s Office and the California Department of Corrections and Rehabilitation (CDCR) are investigating the case.
Trial Attorneys Marianne Shelvey and Danbee Kim of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Daniel Ahn, Gregory Scally, and Gregory Staples of the Central District of California 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.
[1] As the introductory phrase signifies, the entirety of the text of the indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
3 Mexican Mafia Members and 28 Associates Charged in Racketeering Indictment that Alleges Murders, Drug Trafficking and Gun OffensesRead the Press Release
SANTA ANA, California – A 33-count federal grand jury indictment unsealed today charges 31 members and associates of the Orange County Mexican Mafia with racketeering offenses, two murders and six attempted murders, and related drug and gun charges.
The indictment includes charges of conspiring to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act; committing violent crimes in aid of racketeering (VICAR), including murder and attempted murder; conspiring to traffic narcotics; distributing, and possessing with the intent to distribute, methamphetamine and heroin; using a firearm to cause a death; and other firearm charges.
“The violence, drug-dealing and other criminal acts being committed in our communities by gangsters associated with the Mexican Mafia is being met with the strongest possible response by law enforcement,” said United States Attorney Tracy L. Wilkison. “We will continue to investigate, arrest and prosecute these individuals to the fullest extent of the law to restore a sense of safety to so many neighborhoods that have felt the impact of their destructive conduct.”
“The Mexican Mafia allegedly preyed on vulnerable communities through fear, violence, and intimidation,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “This indictment sends a clear message that the Criminal Division, and our federal, state, and local partners, remain committed to protecting all of our communities from violence and exploitation.”
The indictment alleges that the Mexican Mafia, also known as La Eme, was comprised mostly of senior members of Latino street gangs who came together to control and profit from the activities of other Latino gangs operating in Southern California and within the California penal system. It is alleged that the Mexican Mafia members divided control of various areas in Southern California, with the member in control of a specific area controlling the criminal activities in that territory and receiving “taxes” paid by gangs to allow them to deal drugs in that area.
In addition to this widespread “tax” collection, it is alleged that the OC Mexican Mafia directly engaged in drug distribution in and out of prisons and jails. The indictment also alleges that the OC Mexican Mafia maintained authority over Latino street gangs through murder, attempted murder, and violent assaults with weapons including firearms.
“Cases targeting criminal enterprises like the Mexican Mafia require close collaboration with our local and federal partners and employ a variety of sophisticated techniques to overcome their evasive tactics,” said Kristi K. Johnson, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The Mexican Mafia in Orange County controls the majority of local gangs and rules by threatening violence and exacting violence on their enemies or against their own members who don’t follow strict rules. This indictment is the latest in our continuing joint efforts to target gangs and drug networks that fuel the violence in our communities.”
The indictment alleges that in or around 2016, and continuing to at least in or around April 2022, defendants Johnny Martinez, Robert Aguirre, and Dennis Ortiz were the OC Mexican Mafia members in charge of criminal activities in Orange County and within Orange County jail and prison facilities. Defendants Omar Mejia, Miguel Jose Alvarado, Luis Heriberto Vasquez, Michael Cooper, and Abraham Guajardo held positions of shot-callers or mouthpieces for Martinez, Aguirre, and Ortiz. Defendant Robert Martinez held a position of authority within the Orange County Jail as Johnny Martinez’s representative. Defendant Brenda Vanessa Campos Martinez served as a secretary for Johnny Martinez, and defendant Danielle Canales served in a similar capacity for Johnny Martinez and Cooper. The violent crimes alleged against the OC Mexican Mafia include:
- the Jan. 19, 2017, armed robbery and shooting death of R.R.;
- the Aug. 21, 2017, shooting death of R.V., who was shot seven times in the back of the head and body, and left dead on the street in Orange;
- the Aug. 5, 2017, attempted murder of defendant Munoz, who had fallen out of favor with the OC Mexican Mafia and was shot seven times;
- the Dec. 1, 2017, attempted murder of D.D., a representative of a Latino street gang, who was allegedly abusing his power and authority within the OC Mexican Mafia enterprise;
- the Dec. 12, 2017, attempted murder of E.O., an OC Mexican Mafia associate incarcerated at Calipatria State Prison, who was believed to have violated the OC Mexican Mafia’s code by warning individuals that they were targeted for violence by the OC Mexican Mafia, and who suffered multiple injuries, including puncture wounds to his torso;
- the Dec. 25, 2017, attempted murder of R.M. for showing disrespect to defendant Johnny Martinez;
- the July 29, 2020, attempted murder of F.B., a member of an Orange County Latino street gang incarcerated at the Theo Lacy Facility, who was targeted because he purportedly claimed that he would speak to law enforcement about the Mexican Mafia, and whose throat was slit; and
- two murder attempts on Jan. 5, 2018, and Dec. 31, 2019, of defendant Cooper, who had fallen out of favor with defendants Johnny Martinez and Aguirre, and who in one incident was stabbed multiple times in the head and back area, and in the second was cut in the throat and face.
In addition to these alleged violent acts, law enforcement investigated the OC Mexican Mafia’s methamphetamine and heroin trafficking activities on the streets, as well as in the prisons and jails. Authorities conducted multiple undercover purchases of methamphetamine and heroin from OC Mexican Mafia associates who were selling narcotics on behalf of Johnny Martinez and the OC Mexican Mafia.
“The Santa Ana Police Department is committed to working alongside local, state, and federal law enforcement partners to ensure that violent, career criminals are incarcerated and are brought to justice,” said Santa Ana Police Chief David Valentin. “Today’s operation was a result of years of dedicated investigation into some of the most dangerous gang members that plague our communities.”
“Today’s arrests are the culmination of a multi-year investigation that IRS-CI is proud to be a part of”, said IRS Criminal Investigation Special Agent in Charge Ryan L. Korner. “The subjects of this investigation engaged is some of the most horrific acts imaginable, and we are glad to have done our part to help end their corrupt influence over our community.”
Out of the 31 defendants charged in the indictment, 21 were already in custody, and nine were arrested last night and this morning. Those arrested today are expected to be arraigned this afternoon in United States District Court in Santa Ana, and those already in custody will make initial appearances once each defendant is in federal custody.
The RICO statute provides for a maximum penalty of 20 years’ imprisonment for acts performed as part of the criminal organization. The VICAR statute provides for a mandatory sentence of life imprisonment for murder, a maximum sentence of 20 years for assault with a dangerous weapon, a maximum sentence of 10 years for attempted murder, and a maximum sentence of three years for attempted assault with a dangerous weapon. The charge of possessing, using, carrying, and discharging a firearm in furtherance of/during and in relation to a crime of violence carries a maximum sentence of life, with a mandatory sentence of at least five years and up to 10 years. The charge of causing death using a firearm carries a maximum sentence of life. Distribution and possession with intent to distribute methamphetamine and heroin carries a maximum sentence of life, and a mandatory minimum sentence of at least five years and up to 10 years. Felon in possession of a firearm or ammunition carries a maximum sentence of 10 years’ imprisonment. A federal district judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI; the DEA; the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); IRS-Criminal Investigation; the Santa Ana Police Department; the Anaheim Police Department; the Fullerton Police Department; the Orange Police Department; the Placentia Police Department; the Orange County Sheriff’s Department; the Orange County Probation Department; the Orange County District Attorney’s Office; and the California Department of Corrections and Rehabilitation are investigating the case.
This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
Assistant U.S. Attorneys Daniel Ahn, Gregory Scally and Gregory Staples of the Santa Ana Branch Office, and Justice Department Trial Attorneys Marianne Shelvey and Danbee Kim of the Criminal Division’s Organized Crime and Gang Section are prosecuting this 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.
San Fernando Valley Man Indicted on Federal Charges Alleging He Sold Pound Quantities of Meth and Dozens of ‘Ghost Guns’Read the Press Release
LOS ANGELES – A federal grand jury today charged a San Fernando Valley man with selling a total of nearly 16 pounds of methamphetamine and 89 firearms, including dozens of “ghost guns,” or firearms that lack serial numbers.
Julio Ernesto Lopez-Menendez, 26, a.k.a. “Iroe,” of Reseda, was charged in a 13-count indictment with four counts of distribution of methamphetamine, one count of engaging in the business of dealing in firearms without a license, four counts of possession of unregistered firearms, and four counts of possession of firearms not identified by serial numbers.
Lopez-Menendez’s arraignment is scheduled for May 5 in United States District Court in downtown Los Angeles. He has been in federal custody since his April 14 arrest on a criminal complaint in this case.
The indictment returned today details a series of alleged transactions involving Lopez-Menendez from January 6 to April 7, 2022. These transactions typically involved large numbers of firearms and, sometimes, pound quantities of methamphetamine. Some 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, Lopez-Menendez allegedly sold the buyer – who was an undercover operative – a dozen firearms, including 10 semi-automatic “ghost gun” pistols. In a February 10 transaction, Lopez-Menendez allegedly sold the 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 alleged in the indictment, Lopez-Menendez sold the buyer approximately 4.2 kilograms (9.2 pounds) and 2.2 kilograms (4.8 pounds) of methamphetamine on March 8 and March 23, respectively.
In total, Lopez-Menendez sold approximately 7.25 kilograms (15.98 pounds) of methamphetamine and 89 firearms – including 53 ghost guns, the indictment alleges.
Lopez-Menendez does not have a federal firearms license and does not 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, according to court documents.
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, Lopez-Menendez would face a mandatory minimum sentence of 10 years in federal prison and a statutory maximum sentence of life imprisonment for the for each distribution of methamphetamine charge. He would face statutory maximum sentences of five years in federal prison for the unlicensed firearms business charge, 10 years in federal prison for each possession of an unregistered firearm count, and 10 years in federal prison for each count of possession of a firearm without a serial number.
The FBI; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; and the Los Angeles Police Department investigated this matter.
Assistant United States Attorney Jennifer Chou of the Violent and Organized Crimes Section is prosecuting this case.
Former Head of LADWP Sentenced to Six Years in Federal PrisonRead the Press Release
LOS ANGELES – The former general manager of the Los Angeles Department of Water and Power (LADWP) was sentenced today to 72 months in federal prison for accepting bribes from a lawyer in exchange for his official action to secure a three-year, $30 million no-bid LADWP contract for the lawyer’s company.
David H. Wright, 62, of Riverside, was sentenced by United States District Judge Stanley Blumenfeld Jr., who described Wright’s conduct as “egregious” because Wright – while a public servant – executed an “elaborate and sophisticated criminal scheme” that was motivated by “pure greed.” Judge Blumenfeld also ordered Wright to pay a fine of $75,000.
Wright, who is the first defendant to be sentenced in the LADWP corruption cases, pleaded guilty on January 25 to one count of bribery.
Wright served as LADWP’s general manager from September 2016 until July 2019, when he resigned at the direction of the mayor of Los Angeles.
“As the leader of the nation’s largest municipal utility, David Wright embarked on a campaign of corruption, including pushing through a no-bid $30 million contract for a company from which he had secretly accepted a lucrative job offer,” said United States Attorney Tracy L. Wilkison. “This ongoing criminal case has placed a spotlight on public corruption that harmed ratepayers while benefiting dishonest officials and unscrupulous lawyers.”
“This case is especially significant given the corruption that was rooted in the highest level of city government,” said Kristi K. Johnson, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “This investigation highlighted the lack of oversight for a $30 million contract and the inexcusable silencing of whistleblowers, amounting to a gross misuse of Mr. Wright’s position and a violation of the public’s trust. The FBI encourages those with information about corruption to speak up and hold accountable public officials whose conduct erodes trust in government.”
During 2016 and 2017, Wright developed a relationship with Paul O. Paradis, 58, of Scottsdale, Arizona, a lawyer appointed by the Los Angeles City Attorney’s Office to represent LADWP in a lawsuit in which the department blamed the vendor of its billing system for the misbilling of hundreds of thousands of ratepayers. Paradis and his New York-based law firm also held a $6 million LADWP contract to provide project management services in connection with the department’s remediation of the faulty billing system.
By early 2017, Wright and Paradis agreed that – in exchange for Wright’s support of a “no-bid” $30 million contract for Paradis’s downtown Los Angeles-based company Aventador Utility Services LLC — Paradis would give Wright a $1 million-per-year job as Aventador’s CEO and a luxury company car once Wright retired from LADWP.
In exchange, Wright lobbied members of the LADWP board of directors to vote in favor of the contract for Aventador, whose company name was taken from a model of Lamborghini sports car. At the time it approved the $30 million no-bid contract in June 2017, the LADWP board was not informed of Wright’s illegal agreement with Paradis to take a lucrative job as Aventador’s CEO upon retiring from LADWP.
After the awarding of the contract, through early 2019, Wright continued to collaborate with Paradis to build and market Aventador and to seek additional lucrative business opportunities for it — and thus for Wright and Paradis — both inside and outside LADWP. Despite being a public official, Wright used his position as LADWP’s general manager to advertise Aventador's services at industry events and in meetings and discussions with other industry officials and executives.
By March 2019, Paradis had been forced to resign from his role as special counsel to the City Attorney’s Office. Around this time, the LADWP board voted to terminate Aventador’s contract, but it agreed to retain the company’s services if Paradis sold his stake in the company and disavowed any interest in the company, which Paradis purported to do. In late March 2019, after Paradis sold the company to an employee, Aventador officially changed its name to Ardent Cyber Solutions LLC.
In late March 2019, after Paradis had begun covertly cooperating with the FBI, Wright met with Paradis at Wright’s home and directed Paradis to destroy their incriminating text messages and emails from Wright’s cell phone and Apple iCloud account and to take back an Aventador laptop and wipe it clean. Wright told Paradis that he had already gone through his office at LADWP and destroyed all incriminating physical evidence.
In April 2019, Wright used his position to urge the LADWP board to support a new cybersecurity contract to Ardent for more than $10 million. Wright again did not inform the board of another secret arrangement with Paradis, which by then included their agreement that Wright would receive a “substantial sign-on bonus” of $600,000 or $1.2 million, as well as an increase in his ownership of their company, in addition to a previously agreed-to $1 million annual salary and luxury car.
Paradis pleaded guilty on January 28 to a federal bribery charge for accepting an illicit kickback of nearly $2.2 million for getting another attorney to purportedly represent his ratepayer client in a collusive lawsuit against LADWP related to the billing debacle. Paradis is cooperating with the ongoing investigation into the collusive litigation and corruption at LADWP. Paradis is scheduled to be sentenced on July 19.
David F. Alexander, 54, of Arcadia, LADWP’s former chief information security officer and its former chief cyber risk officer, pleaded guilty on February 8 to one felony count of making false statements to federal investigators probing corruption in the department. Alexander’s sentencing hearing is scheduled for June 7.
Thomas H. Peters, 56, of Pacific Palisades, the former chief of the Civil Litigation Branch of the Los Angeles City Attorney’s Office, pleaded guilty on April 5 to one count of aiding and abetting extortion. Peters threatened to fire a plaintiffs’ attorney from a lucrative special counsel job with the city unless the attorney paid a substantial extortion demand from a former employee who was threatening to expose the city’s collusive litigation over its faulty water-and-power billing system. Peters, who is also cooperating with the ongoing investigation, is scheduled to be sentenced on August 2.
The FBI is investigating this matter. Any member of the public who has information related to this or any other public corruption matter in the City of Los Angeles is encouraged to send information to the FBI’s tip line at tips.fbi.gov or to contact the FBI’s Los Angeles Field Office at (310) 477-6565.
Assistant United States Attorneys Melissa Mills, Jamari Buxton, and Susan Har of the Public Corruption and Civil Rights Section prosecuted this case.
NorCal Man Indicted on Wire Fraud Charges Alleging He Bilked Digital Media Outfit He Ran with Fraudulent Bills from Other CompaniesRead the Press Release
UPDATE-
Pursuant to a motion by the government, the case against defendant Victor Belonogoff described in the news release below was dismissed by the court on January 31, 2023.
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Pursuant to a motion by the government, the case against defendant Aryeh Kluger described in the news release below was dismissed by the court on June 28, 2024.
LOS ANGELES – A federal grand jury today indicted the former CEO of a Los Angeles-based digital media company on charges that allege he created a series of companies that defrauded his employer out of at least $3 million by submitting bills for services never provided or at inflated prices.
Victor Belonogoff, 46, who is believed to reside in San Mateo, California, is charged in the indictment with bilking Render Media, Inc., a Beverly Grove-based company he co-founded and ran until late 2018. Belonogoff is charged in the indictment with conspiracy to commit wire fraud and nine substantive counts of wire fraud.
Belonogoff, through his attorney, has agreed to surrender to federal authorities on April 26.
Belonogoff, who held several positions at Render, including chief executive officer, secretly formed six digital media and advertising companies that he used to defraud Render, according to the indictment. Belonogoff allegedly caused Render to pay his fraudulent digital media companies for products and services that were never provided or were sold to Render at inflated prices. Belonogoff is accused of diverting Render’s incoming revenue to his fraudulent digital media companies, using Render’s lines of credit to support them, and using the sham companies to misappropriate Render’s brand and content.
The indictment specifically alleges that Belonogoff caused Render to pay one of his companies for video content that was never provided. Belonogoff also allegedly caused two of the fraudulent companies to sell Render internet traffic at inflated prices and to re-code internet traffic sold to Render to make it falsely appear as though his companies generated that traffic. Belonogoff also caused one of his companies to post Render’s content while keeping 90% of the revenue generated by that content, according to the indictment.
To conceal his fraud, Belonogoff allegedly deleted emails from his Render account and later provided false testimony at a deposition in a lawsuit brought against him by Render.
The indictment alleges that Belonogoff caused Render to pay his fraudulent digital media companies more than $3 million, much of which went to his personal accounts and was used for his personal benefit.
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 he is convicted of the wire fraud charges in the indictment, Belonogoff would face a statutory maximum sentence of 20 years in federal prison for each of the 10 counts.
Federal prosecutors previously charged one of Belonogoff’s co-conspirators with conspiracy to commit wire fraud. Aryeh Kluger, 34, of San Antonio, who was a vice president at Render, pleaded guilty to the charge in October 2020, admitting that he and Belonogoff “exploit[ed] Render’s business model by employing a sophisticated embezzlement scheme involving third-party companies they controlled.” United States District Judge Stephen V. Wilson is scheduled to sentence Kluger on October 24.
The FBI and IRS Criminal Investigation are conducting the investigation in this matter.
Assistant United States Attorney Gregory Bernstein of the Major Frauds Section is prosecuting this case.
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Fresno Man Sentenced to Life in Prison for Engaging in a Child Exploitation Enterprise and Creating Child Sexual Abuse MaterialRead the Press Release
LOS ANGELES – A Fresno man was sentenced today to life in federal prison for engaging in a child exploitation enterprise and creating child sexual abuse material (CSAM) of four young children, including children he abused with his co-defendants who were previously sentenced to lengthy prison terms.
John Richard Brinson Jr., 28, was sentenced this afternoon by United States District Judge André Birotte Jr. In imposing the life sentence, Judge Birotte said Brinson’s conduct was “evil – I don’t know how else to say it.”
Brinson pleaded guilty in July 2021 to one count of engaging in a child exploitation enterprise and four counts of production of child pornography, each representing a different victim.
According to court documents, in 2016 and 2017, Brinson distributed and advertised CSAM on a website dedicated to the sexual abuse of children ages from birth to 5 years old. Brinson – along with co-defendants Arlan Harrell, of Hawthorne, and Moises Martinez, of San Jose – was an active member of this website, which was hosted on Tor, a computer network on the dark web that is specifically designed to facilitate anonymous communication over the internet. Brinson used the website to view CSAM, to advertise and distribute CSAM – including CSAM he produced – and to encourage other members to post more CSAM. Additionally, Brinson used this website to meet like-minded offenders, including Harrell and Martinez, and commit additional offenses against children with them in-person.
“The life sentence imposed in this case is warranted by the defendant’s callous and violent abuse of children, some of whom were filmed while screaming in pain,” said United States Attorney Tracy L. Wilkison. “The child exploitation enterprise impacted more than 20 victims – children who were sexually assaulted, sometimes repeatedly, solely for the pleasure of this defendant and his cohorts. The Justice Department will continue its effort to protect the most vulnerable among us by aggressively prosecuting the most dangerous predators.”
“Those who engage in child exploitation enterprises and create child sexual abuse material will be tracked down and held accountable for their heinous conduct,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “Preying on children with no regard to the grievous harm abusers cause to their victims and their families will not be tolerated. I commend the prosecution team and our law enforcement partners who worked tirelessly to ensure that these defendants would be held accountable for their crimes and justice sought for the victims.”
“The depravity of this enterprise was reflected in today’s sentencing,” said acting Special Agent in Charge Eddy Wang of Homeland Security Investigations Los Angeles. “Homeland Security Investigations prioritizes crimes of victimization and will leave no stone unturned to rescue every victim possible and bring every perpetrator to justice. I am very proud of the Homeland Security Investigations special agents from Boston, Fresno, and right here in Los Angeles that worked tirelessly with our partners at the Department of Justice, the U.S. Attorney’s Office, and the Los Angeles Internet Crimes Against Children Task Force to protect our most innocent and remove these predators from our communities.”
According to court documents, Brinson created child sexual abuse material of children between approximately three to nine years of age. On at least two occasions, Brinson and Harrell met at Brinson’s home to create CSAM depicting their sexual abuse of two of the minors together. On one of those occasions, Harrell secured the custody of another minor and traveled with the minor to Brinson’s house to create CSAM depicting both Harrell and Brinson engaging in the sexual abuse of that minor. On another occasion, Brinson and Martinez arranged to meet at Brinson’s house to create CSAM depicting their sexual abuse of two minors together, one brought by Brinson and one by Martinez.
In total, Brinson, Martinez and Harrell pleaded guilty to creating CSAM depicting themselves engaging in sexual acts with or otherwise sexually exploiting more than 20 children under the age of nine, including 10 children four years of age or younger.
The CSAM that Brinson created by himself and with his co-defendants took place in the house he shared with co-defendant Keith Lawniczak. According to court documents, Lawniczak admitted that he offered Brinson a room in his house to live in free of charge and benefitted from Brinson’s abuse of one of the minors because he had an opportunity to view the sexual acts between Brinson and the minor.
Co-defendant Martinez pleaded guilty to engaging in a child exploitation enterprise and production of child pornography and was sentenced to 55 years in prison, followed by lifetime supervised release. Lawniczak pleaded guilty to conspiracy to commit sex trafficking of a child and was sentenced to 12 years in prison and lifetime supervised release. Harrell pleaded guilty to engaging in a child exploitation enterprise, obtaining custody of a minor for purposes of producing child pornography, production of child pornography and possession of child pornography, and he was sentenced to life in prison in February.
Homeland Security Investigations’ Los Angeles office, along with HSI’s Fresno and Boston offices, investigated the case. The High Technology Investigative Unit of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) provided significant assistance.
Assistant United States Attorneys Devon Myers of the Cyber and Intellectual Property Crimes Section and Kim Meyer of the Violent and Organized Crime Section prosecuted this case in conjunction with Justice Department Trial Attorneys Lauren S. Kupersmith and Kyle P. Reynolds of CEOS
California Man Sentenced to Life in Prison for Engaging in a Child Exploitation Enterprise and Creating Child Sexual Abuse Material of Four Young ChildrenRead the Press Release
A California man was sentenced today to life in prison for engaging in a child exploitation enterprise and creating child sexual abuse material (CSAM) of four young children, including children he abused with his co-defendants who were previously sentenced.
John Richard Brinson Jr., 28, of Fresno, pleaded guilty on July 23, 2021, to engaging in a child exploitation enterprise and four counts of production of child pornography, each representing a different victim. According to court documents and information stated during court proceedings, in 2016 and 2017, Brinson distributed and advertised CSAM on a website dedicated to the sexual abuse of children ages zero to five years old. Brinson, along with co-defendants Arlan Harrell and Moises Martinez, was an active member of this website, which was hosted on Tor, a computer network on the dark web that is specifically designed to facilitate anonymous communication over the internet. Brinson used the website to view CSAM, to advertise and distribute CSAM, including CSAM he produced, and to encourage other members to post more CSAM. Additionally, Brinson used this website to meet like-minded offenders, including Harrell and Martinez, and commit additional offenses against children with them in-person.
“Those who engage in child exploitation enterprises and create child sexual abuse material will be tracked down and held accountable for their heinous conduct,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “Preying on children with no regard to the grievous harm abusers cause to their victims and their families will not be tolerated. I commend the prosecution team and our law enforcement partners who worked tirelessly to ensure that these defendants would be held accountable for their crimes and justice sought for the victims.”
“The sentence imposed in this case is warranted by the defendant’s callous and violent abuse of children, some of whom were filmed while screaming in pain,” said U.S. Attorney Tracy L. Wilkison for the Central District of California. “The child exploitation enterprise impacted more than 20 victims – children who were sexually assaulted, sometimes repeatedly, solely for the pleasure of this defendant and his cohorts. The Justice Department will continue its effort to protect the most vulnerable among us by aggressively prosecuting the most dangerous predators.”
“The depravity of this enterprise was reflected in today’s sentencing,” said acting Special Agent in Charge Eddy Wang of Homeland Security Investigations (HSI) Los Angeles. “Homeland Security Investigations prioritizes crimes of victimization and will leave no stone unturned to rescue every victim possible and bring every perpetrator to justice. I am very proud of the Homeland Security Investigations special agents from Boston, Fresno and right here in Los Angeles that worked tirelessly with our partners at the Department of Justice, the U.S. Attorney’s Office and the Los Angeles Internet Crimes Against Children Task Force to protect our most innocent and remove these predators from our communities.”
According to court documents and information stated during court proceedings, Brinson created child sexual abuse material of children with ages ranging from approximately three to nine years old. On at least two separate occasions, Brinson and Harrell met at Brinson’s home to create CSAM depicting their sexual abuse of two of the minors together. On one of those occasions, Harrell secured the custody of another minor and traveled with the minor to Brinson’s house to create CSAM depicting both Harrell and Brinson engaging in the sexual abuse of that minor. On another occasion, Brinson and Martinez arranged to meet at Brinson’s house to create CSAM depicting their sexual abuse of two minors together, one brought by Brinson and one by Martinez. In total, Brinson, Martinez and Harrell pleaded guilty to creating CSAM depicting themselves engaging in sexual acts with or otherwise sexually exploiting more than 20 children under the age of nine, including 10 children four years of age or younger. The CSAM that Brinson created by himself and with his co-defendants took place in the house he shared with co-defendant Keith Lawniczak. According to court documents and information stated during court proceedings, Lawniczak admitted that he offered Brinson a room in his house to live in free of charge and benefitted from Brinson’s abuse of one of the minors because he had an opportunity to view the sexual acts between Brinson and the minor.
Co-defendant Martinez pleaded guilty to engaging in a child exploitation enterprise and production of child pornography and was sentenced to 55 years in prison, followed by lifetime supervised release. Lawniczak pleaded guilty to conspiracy to commit sex trafficking of a child and was sentenced to 12 years in prison and lifetime supervised release. Harrell pleaded guilty to engaging in a child exploitation enterprise, obtaining custody of a minor for purposes of producing child pornography, production of child pornography, and possession of child pornography and was sentenced to life in prison.
Homeland Security Investigations’ (HSI) Los Angeles office, along with HSI’s Fresno and Boston offices, investigated the case. The High Technology Investigative Unit of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) provided significant assistance.
Trial Attorneys Lauren S. Kupersmith and Kyle P. Reynolds of the Criminal Division’s CEOS and Assistant U.S. Attorneys Devon Myers and Kim Meyer for the Central District of California prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
7 Federal Criminal Cases Charge Drug Dealers Who Allegedly Sold Fentanyl that Caused Deadly Overdoses in Orange CountyRead the Press Release
SANTA ANA, California – Federal authorities today announced seven criminal cases against drug dealers who sold fentanyl-laced narcotics that caused fatal overdoses in Orange County, including one case in which three people died in Newport Beach.
The sweep has resulted in the arrest of six defendants pursuant to federal grand jury indictments or criminal complaints. One charged defendant is a fugitive currently being sought by authorities.
All seven defendants are charged with distribution of fentanyl resulting in death. If convicted of this offense, each defendant would face a mandatory minimum sentence of 20 years in federal prison and a potential sentence of life without parole.
“The opioid crisis has resulted in the widespread distribution of fentanyl and a horrific trail of misery resulting from the untimely death of tens of thousands of Americans each year,” said United States Attorney Tracy L. Wilkison. “These cases highlight two important lessons, with the first being that many street drugs are contaminated with an extremely powerful opioid that often leads to death. The second is that narcotics dealers face severe consequences in federal court when the distribution of their products results in a fatal overdose.”
“Often when we discuss the rampant rise of drug-caused deaths there’s a focus on numbers, but today’s announcement is an important reminder that these numbers are more than that – these are our children, loved ones and friends,” said DEA Los Angeles Special Agent in Charge Bill Bodner. “Fentanyl does not discriminate and it’s affecting every community, ethnicity and generation throughout our country. As we tackle the fentanyl crisis locally, we are intent on bringing justice to victims and their families, while putting drug dealers on notice that even selling one pill can have harsh federal penalties.”
The cases announced today are the result of investigations by the DEA’s Overdose Justice Task Force, which was created to address opioid-related deaths in the greater Los Angeles area, most of which are caused by the synthetic opioid fentanyl. Under the Overdose Justice program for the DEA’s Los Angeles Field Division, DEA agents collaborate with local law enforcement to analyze evidence to determine if there are circumstances that might lead to a federal criminal prosecution, and, if so, proactively target the drug trafficker. Since the start of the Overdose Justice program in 2018, the DEA has worked with an ever-expanding list of local police agencies to obtain approximately three dozen federal indictments that specifically charge death resulting from narcotics trafficking.
The victims in these cases are of diverse backgrounds, with two of the deceased victims being minors and one a community college student. In most of the cases, the victims did not know they were ingesting fentanyl, which can be deadly in tiny amounts. Some of the alleged drug traffickers knew or had reason to believe their products contained fentanyl, even though they claimed to be selling other narcotics.
All of the case were filed in United States District Court in Santa Ana and will be prosecuted by the United States Attorney’s Office:
- William Edward Dick Jr., 51, of Costa Mesa was arrested Thursday for allegedly selling fentanyl-laced cocaine that killed three individuals in a Balboa Island house on the night of October 24, 2021. A criminal complaint filed on Wednesday alleges that two couples had gathered in Newport Beach, enjoyed a dinner together, and one of them decided to purchase cocaine for the group. They eventually contacted Dick, who agreed to sell them $200 worth of cocaine, which he delivered to the house where the couples were staying. After snorting the purported cocaine, all four suffered overdoses, and three of the individuals were pronounced dead at house the next morning. Dick, who is currently charged with one count of distribution of fentanyl resulting in death, is scheduled to make his first court appearance this afternoon in United States District Court in Santa Ana. The DEA and the Newport Beach Police Department are investigating this matter, which is being prosecuted by Assistant United States Attorney Bradley Marrett.
- Omar Alejandro Reynoso, 30, of Costa Mesa, was arrested on Monday after a grand jury indicted him last week on two counts of distribution of fentanyl resulting in death. Reynoso allegedly provided counterfeit Xanax pills containing fentanyl to a man and a woman who died in his hotel room in incidents three weeks apart in November 2019. At his arraignment on Tuesday, Reynoso pleaded not guilty and was ordered to stand trial on June 14. A United States magistrate judge ordered Reynoso detained without bond while the case is pending. The DEA and the Costa Mesa Police Department are investigating this matter, which is being prosecuted by Assistant United States Attorney Jake Nare.
- Tyler David Wilkinson, 23, of Santa Ana, was named Wednesday in a four-count federal grand jury indictment that alleges he sold counterfeit oxycodone pills to a 17-year-old victim who died in Lake Forest of a fentanyl overdose. The victim purchased the pills in June 2021 after responding to an advertisement Wilkinson posted on Snapchat, the investigation revealed. Six months before the transaction that led to the teen’s death, Wilkinson allegedly possessed distribution quantities of several types of narcotics, including nearly 1,400 counterfeit oxycodone pills laced with fentanyl. Wilkinson allegedly continued to sell fentanyl-laced pills, even after law enforcement executed a search warrant at his residence. Wilkinson is currently being sought by authorities. The DEA and the Orange County Sheriff’s Department are investigating this case, which is being prosecuted by Assistant United States Attorney Jake Nare.
- Anthony Bernard Fender, 31, of Tustin, was arrested Monday pursuant to a grand jury indictment filed last week that alleges he sold fentanyl powder that resulted in the death of a 40-year-old man. The indictment further alleges that Fender committed the federal offense after being convicted of a drug trafficking crime in Orange County Superior Court in 2013, which, if proven, would subject Fender to a mandatory life sentence. The DEA and the Orange County Sheriff’s Department investigated this matter, which is being prosecuted by Assistant United States Attorney Bradley Marrett.
- Carter Joseph Klein, 25, of Newport Beach, was arrested on April 14 after being named in a one-count indictment that accused him of distributing fentanyl that led to the overdose death of an 18-year-old Orange Coast College student. Klein allegedly sold fentanyl-laced counterfeit oxycodone pills to the victim in February 2021. Klein was arraigned on the indictment on April 15, when he entered a not guilty plea and was ordered to stand trial on June 7. The DEA and Costa Mesa Police Department are investigating this matter, which is being prosecuted by Assistant United States Attorney Rosalind Wang.
- Isai Hernandez Higinio, a.k.a. “Joker,” 23, of Santa Ana, was arrested April 1 pursuant to a grand jury indictment filed last month that alleges he distributed fentanyl in counterfeit Percocet pills to an 18-year-old Tustin resident who died after ingesting the drug. Hernandez was arraigned on April 4, at which time he pleaded not guilty and was ordered held without bond. A trial in this case is scheduled for May 31. The DEA and Orange County Sheriff’s Department are investigating this matter, which is being prosecuted by Assistant United States Attorney Melissa Rabbani.
- Matthew Benjamin Hurley, 24, of Virginia, was arrested January 3 on charges alleging that he distributed fentanyl at a motel in Costa Mesa that resulted in a fatal overdose. Hurley, who has been ordered detained without bond, is scheduled to go on trial on September 27. The DEA and the Huntington Beach Police Department are investigating this case, which is being prosecuted by Assistant United States Attorney Gina J. Kong.
Indictments and criminal complaints contain allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Former Chiropractor Sentenced to Nearly Six Years in Federal Prison for Fraudulently Submitting $2.2 Million in Billings to Health InsurersRead the Press Release
SANTA ANA, California – A former Orange County chiropractor was sentenced today to 70 months in federal prison for stealing from health insurers by fraudulently causing the submission of $2.2 million in billings for chiropractic services never provided, medical diagnoses never given, office visits that never occurred, and medical devices that were falsely prescribed.
Susan H. Poon, 57, of Dana Point, was sentenced by United States District Judge David O. Carter, who ordered her to pay $1,379,622 in restitution to her victims.
At the conclusion of a five-day trial in June 2021, a federal jury found Poon guilty of five counts of health care fraud, three counts of making false statements relating to health care matters, and one count of aggravated identity theft.
From January 2015 to April 2018, Poon, whose office was in Rancho Santa Margarita, schemed to defraud health insurance companies by submitting false reimbursement claims for services that were never performed.
Poon also submitted fraudulent prescriptions containing medical diagnoses of individuals that she had never met, including toddlers and children, which led a medical device manufacturer to submit false claims for reimbursement to one health insurer.
The patients that Poon claimed to have met with and treated were dependents – such as the spouses and children – of Costco Wholesale Corp. and United Parcel Service Inc. employees. Poon unlawfully took and used the dependent’s personal identifying information (PII) in her reimbursement requests and prescriptions. Poon obtained the PII by attending health fairs at various UPS warehouses and Costco locations and soliciting such information from employees.
“[Poon’s] scheme consisted of interdependent moving parts,” prosecutors wrote in a sentencing memorandum. “She lied about visits with, diagnoses of, and treatments given to actual people and their children. She sent fraudulent Durable Medical Equipment (DME) prescriptions – predicated on visits with these patients that never happened – to a DME manufacturer. And she fabricated medical documentation containing the personal identifying information of these ‘ghost’ patients to mislead an auditor.”
In total, Poon billed and caused to be billed approximately $2.2 million through her scheme.
Poon’s chiropractic license was revoked in July 2019, according to the California Department of Consumer Affairs.
The following agencies investigated this matter: Amtrak – Office of the Inspector General, California Department of Insurance, U.S. Department of Labor – Employee Benefits Security Administration, U.S. Department of Labor Office of the Inspector General, the FBI, and Office of Personnel Management – Office of the Inspector General.
Assistant United States Attorneys Daniel S. Lim and Daniel H. Ahn of the Santa Ana Branch Office prosecuted this case.
Orange County Woman Found Guilty of Federal Charges in Murder of Man Shot on Boat and Whose Body Was Recovered in OceanRead the Press Release
SANTA ANA, California – A San Juan Capistrano woman was found guilty by a federal jury today of criminal charges in connection with the October 2019 murder of a man whose body was found floating in the Pacific Ocean with bullet and blunt force trauma wounds.
Sheila Marie Ritze, 42, was found guilty of two felonies: one count of second-degree murder within in the special maritime and territorial jurisdiction of the United States, and one count of making false statements to federal investigators.
At her sentencing hearing, which is expected in the coming months, Ritze will face a statutory maximum sentence of life in federal prison.
According to evidence presented at her 12-day trial, Ritze went out on her boat with Hoang Xuan Le, 40, a.k.a. “Wayne,” and “Wangsta,” of Fountain Valley, where they murdered the victim, who owed Le a debt. On October 15, 2019, in connection with a late-night lobster-fishing trip, Ritze and Le took the victim to Ritze’s boat, which was docked at Dana Point Harbor.
Around midnight, Ritze drove her boat out into the Pacific Ocean with Le and the victim on board. Le shot the victim on the boat, the victim went overboard, and Ritze and Le left the victim to die in the ocean, where he drowned. Le and Ritze then returned to Dana Point Harbor.
The victim’s body was recovered from the Pacific Ocean several miles northwest of Oceanside on October 16, 2019. The San Diego County Medical Examiner’s Office determined that he was a homicide victim who drowned after being shot and who had suffered blunt force trauma.
During a December 2019 interview with federal investigators, Ritze told a series of lies, including when she falsely said she had never met the victim prior to the fatal October 15, 2019, boat trip. Ritze and the victim had been in Las Vegas together 11 days prior to the murder.
At the conclusion of a 17-day trial in December 2021, a federal jury found Le guilty of first-degree murder within the special maritime and territorial jurisdiction of the United States, conspiracy to commit murder, and using a firearm in furtherance of a crime of violence. In February 2022, Le pleaded guilty to eight narcotics-related felonies, including distribution of cocaine and methamphetamine.
Le faces a mandatory sentence of life in federal prison at his June 27 sentencing hearing.
The Coast Guard Investigative Service and the FBI investigated this matter.
Assistant United States Attorneys Gregory S. Scally and Gregory W. Staples of the Santa Ana Branch Office are prosecuting this case.
Santa Clarita Man Sentenced to Nearly 3½ Years in Federal Prison for Fraudulently Obtaining COVID-Relief LoansRead the Press Release
LOS ANGELES – A Santa Clarita man was sentenced today to 41 months in federal prison for attempting to steal millions of dollars in Paycheck Protection Program (PPP) COVID-relief loans for his companies by submitting fraudulent applications that included fake tax documents and information for non-existent employees.
Raymond Magana, 41, was sentenced by United States District Judge Stanley Blumenfeld Jr., who ordered him to pay $360,415 in restitution. At today’s hearing, Judge Blumenfeld called Magana’s crime “a despicable offense” and noted that Magana exploited a “national emergency” in order to “line his own pockets.”
Magana pleaded guilty in January 2021 to one count of fraud in connection with major disaster or emergency benefits.
In May and June 2020, Magana submitted to banks PPP loan applications that contained false statements about the number of employees and the amount of payroll expenses. Specifically, on June 3, 2020, Magana submitted a PPP loan application to Customer’s Bank for $940,416 for The Building Circle LLC, a company registered in his name.
In that application, Magana falsely claimed the company’s average monthly payroll was $376,167 for 40 workers. Magana admitted to submitting fraudulent tax documents that reported $4,402,000 in annual wages paid to 40 employees in 2019 and $852,000 paid in employee wages during the first quarter of 2020.
IRS and California Employment Development Department records showed that the company never reported paying any employees, and the underwriting packet also did not include a list of employees or associates for the company, according to an affidavit filed with a criminal complaint in this case.
Investigators later determined that the Pico Rivera address given as The Building Circle’s headquarters was a 980-square-foot, single-family home that appeared to be a residence, not a business. Ultimately, the loan application was approved and $940,416 was funded to Magana’s company on June 4, 2020, the affidavit states.
Magana also applied for and received a PPP loan of $360,415 for Forward Builders LLC, another company, using fake tax documents and false employee information, and falsely claiming $1.73 million in employee wages.
When a bank manager contacted Magana after one of the business accounts receiving PPP funds had been frozen because of suspicious activity, he told the bank “We have all the documents, we got approved,” and he refused to agree to return the improperly obtained PPP funds, the affidavit states. The bank nonetheless kept the $940,416 in Magana's bank account frozen, and he could not access it.
The actual loss from the two loans that were approved and disbursed was $360,415. Prior to today’s sentencing hearing, Magana deposited with the court $360,415 as his restitution payment.
Magana’s business partner, Steven R. Goldstein, 37, of Northridge, is serving a one-year federal prison sentence for committing fraud in connection with major disaster or emergency benefits. Goldstein pleaded guilty in December 2020 to a federal fraud charge and admitted in his plea agreement that he fraudulently obtained $655,000 in PPP loans for his companies by submitting false tax documents and fake employee information.
IRS Criminal Investigation and the Small Business Administration’s Office of Inspector General investigated this case.
Assistant United States Attorney Charles E. Pell of the Santa Ana Branch Office prosecuted this case.
Longtime Leader of South Los Angeles Street Gang Found Guilty of RICO Conspiracy, Including Participating in Rival’s MurderRead the Press Release
LOS ANGELES – A federal jury today found a long-time senior leader of the South Los Angeles-based East Coast Crips (ECC) street gang guilty of federal criminal charges for conspiring to commit racketeering through various criminal acts including murder, extorting local businesses and the distribution of narcotics.
Paul Gary Wallace, 56, a.k.a. “Little Doc” and “Uncle Bill,” of South Los Angeles, was found guilty of one count of conspiracy to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act and one count of using a firearm in furtherance of a violent crime.
United States District Judge André Birotte Jr. scheduled a July 29 sentencing hearing, at which time Wallace will face a statutory maximum sentence of life in federal prison.
According to evidence presented at his 11-day trial, Wallace was a member of the ECC for more than 30 years and rose to become the leader and most influential member of the gang’s “6-Pacc” set, a series of cliques of the gang responsible for control over territory in South Los Angeles.
Wallace maintained his control over the gang through violence and intimidation. Wallace murdered and conspired to commit murder to enhance the gang’s violent reputation, to enhance his status within the gang, to retaliate against rivals, and to enforce discipline within the gang.
As a gang leader, Wallace’s other criminal conduct included selling drugs in ECC territory, extorting local businesses, presiding over robberies, and engaging in other acts of violence, including intimidation, assaults and shootings against the gang’s rivals.
The jury specifically found that on November 13, 2014, Wallace participated in the murder of a rival gang member. The murder weapon, an AK-47-style assault rifle, was later found in Wallace’s van. The jury did not find that Wallace committed the February 2003 murder of a rival.
The FBI and the Los Angeles Police Department investigated this matter.
Assistant United States Attorneys Joseph D. Axelrad and Jeffrey M. Chemerinsky of the Violent and Organized Crime Section are prosecuting this case.
San Fernando Valley Man Who Sold Counterfeit Prescription Pills Containing Fentanyl Admits Causing Overdose Death of U.S. MarineRead the Press Release
LOS ANGELES – A Sylmar man pleaded guilty this afternoon to two federal drug trafficking offenses, one of which stemmed from a 2020 transaction in which he sold bogus oxycodone pills laced with fentanyl that caused a U.S. Marine stationed at Camp Pendleton to suffer a fatal overdose.
Gustavo Jaciel Solis, 25, of Sylmar, pleaded guilty in United States District Court to participating in a drug trafficking conspiracy and distributing fentanyl resulting in death.
United States District Judge Dolly M. Gee is scheduled to sentence Solis on August 17, at which time he will face a mandatory minimum sentence of 20 years in federal prison for the fentanyl charge, and potential life sentences for each of the narcotics offenses.
Solis was charged in 2020, along with an active-duty United States Marine stationed at Camp Pendleton and two other alleged co-conspirators, with being part of a ring that distributed narcotics to civilians and members of the United States Marine Corps.
In a plea agreement filed Tuesday, Solis admitted that he “would advertise his controlled substances for sale through his Snapchat account username, ‘huf_75,’ and display name, ‘Gusto928.’ [Solis] would provide various controlled substances, including LSD, MDMA, cocaine, and purported oxycodone pills containing fentanyl, to customers directly, through couriers, or through the United States mail.”
On May 22, 2020, after obtaining approximately 1,000 counterfeit oxycodone pills containing fentanyl from a co-defendant, Solis admitted using his Snapchat account to advertise the pills by posting a picture of several pills with the caption, “Who f*** with M30s? Tapp in.”
Solis subsequently sold approximately 10 of the counterfeit oxycodone pills, and a 20-year-old U.S. Marine identified in court papers as “L.M.” died after consuming some of the fentanyl-laced pills.
Solis also admitted in his plea agreement orchestrating other narcotics transactions, some of which were conducted with an undercover agent with the Naval Criminal Investigative Service. The transactions with the undercover agent involved several types of narcotics, including counterfeit oxycodone containing fentanyl, cocaine and LSD.
Solis was arrested on July 29, 2020, at which time investigators seized narcotics and several firearms – including a 9mm “ghost gun” – from his residence.
A superseding indictment filed in September 2020 named Solis and four other defendants, who are:
- Jordan Nicholas McCormick, 27, of Palmdale, the lead defendant and the conspiracy’s alleged supplier who provided LSD, ecstasy, cocaine and oxycodone pills laced with fentanyl to co-conspirators;
- Anthony Ruben Whisenant, 22, a lance corporal in the United States Marine Corps, who allegedly aided and abetted the distribution of the fentanyl-laced pills purchased from Solis that resulted in L.M.’s fatal overdose;
- Jessica Sarah Perez, 25, of Pacoima, who distributed narcotics including fentanyl and cocaine to the conspiracy’s civilian customers; and
- Ryan Douglas White, 24, a lance corporal in the United States Marine Corps, who is charged with being an accessory after the fact for allegedly attempting to hinder law enforcement’s apprehension of Whisenant and Solis.
Perez pleaded guilty to conspiring to distribute narcotics on January 26, and Judge Gee is scheduled to sentence her on May 11. The remaining three defendants are scheduled to go on trial on June 21.
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.
This matter was investigated by the Naval Criminal Investigative Service, the Drug Enforcement Administration, the FBI, the United States Postal Inspection Service, and the Ventura County Sheriff’s Office.
This case is being prosecuted by Assistant United States Attorneys Patrick Castañeda and Gregg E. Marmaro of the International Narcotics, Money Laundering, and Racketeering Section.
Riverside County Man Found Guilty of Fraud for Misusing COVID-Relief Business Loan on Personal Expenses, Including Luxury CarsRead the Press Release
LOS ANGELES – A Riverside County man who purported to own a pothole-repair company was found guilty by a federal jury today of fraud charges for using hundreds of thousands of dollars from the Paycheck Protection Program (PPP) for personal expenses such as luxury cars after he obtained a PPP loan for more than $7 million on behalf of his business.
Oumar Sissoko, 59, of Temecula, was found guilty of four counts of wire fraud.
According to evidence presented at his three-day trial, Sissoko obtained a $7.25 million loan for his downtown Los Angeles-based company, Road Doctor California LLC, after submitting a PPP loan application in April 2020.
In the loan application, Sissoko claimed that Road Doctor was in the process of hiring 450 full-time employees and would have average monthly payroll expenses of $2.9 million. When he applied for the loan, Sissoko acknowledged the funds would be used to retain workers and maintain payroll, or make mortgage interest payments, lease payments and utility payments.
In the days after the PPP loan was funded on May 1, 2020, Sissoko misappropriated hundreds of thousands of dollars of the loan proceeds to use for impermissible purposes, including purchasing a Mercedes-Benz for $113,000, paying off a loan on a BMW, and buying an Apple computer for more than $5,000.
The illegal uses of the loan also included a non-refundable down payment of approximately $100,000 to purchase a company located in New Hampshire and the attempted transmission of approximately $150,000 to accounts in the African nation of Mauritania associated with a mineral-exploration company for which Sissoko purported to serve as CEO.
United States District Judge John F. Walter has scheduled a July 18 sentencing hearing, at which time Sissoko will face a statutory maximum sentence of 20 years in federal prison for each of the four wire fraud counts.
Last month, a federal jury deadlocked on the charges against Sissoko and a mistrial was declared. The second trial resulted in today’s verdict.
The FBI, the Small Business Administration Office of Inspector General and the Federal Deposit Insurance Corporation’s Office of Inspector General investigated this matter.
Assistant United States Attorney Carolyn S. Small of the Major Frauds Section and DOJ Trial Attorney Jason Covert of the Criminal Division’s Fraud Section are prosecuting this case. Assistant United States Attorney Jonathan S. Galatzan, Chief of the Asset Forfeiture Section, is providing substantial assistance, including with the seizure and forfeiture of two luxury automobiles purchased with PPP loan funds.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted in March 2020 and is designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April 2020, Congress authorized more than $300 billion in additional PPP funding.
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.
Ed Buck Sentenced to 30 Years in Federal Prison for Providing Methamphetamine to Two Victims Who Suffered Fatal OverdosesRead the Press Release
LOS ANGELES – Edward Buck, a businessman and long-time figure of West Hollywood politics, was sentenced today to 360 months in federal prison for providing fatal doses of methamphetamine to two men who died at his apartment after he injected them with the drug.
Buck, 67, was sentenced by United States District Judge Christina A. Snyder. A restitution hearing in this case is scheduled for May 16.
At the conclusion of a nine-day trial in July 2021, a federal jury found Buck guilty of two counts of distribution of methamphetamine resulting in death, four counts of distribution of methamphetamine, one count of maintaining a drug-involved premises, and two counts of enticement to travel in interstate commerce for prostitution.
Beginning no later than 2011 and continuing through September 2019, Buck engaged in a pattern of “party and play,” in which he solicited men – some of whom were homeless or struggling with drug addiction – to consume narcotics that he provided and perform sexual activities at his apartment, a ritual that prosecutors argued was “more than a fetish – it was a lethal and unchecked pattern of reckless disregard for human life.”
In these party-and-play sessions, Buck distributed drugs, including methamphetamine, GHB (the “date rape” drug), and clonazepam. In some instances, Buck injected victims with drugs intravenously in a practice known as “slamming.”
He exploited the wealth and power balance between himself and his victims by offering them money to use drugs.
Buck solicited his victims in various ways, including using social media platforms, dating and escort websites, or via referrals from his prior victims, to whom he offered finder’s fees.
Once the men were at his apartment, Buck prepared syringes containing methamphetamine, sometimes personally injecting the victims with or without their consent. Buck also injected victims with more narcotics than they agreed to take, and sometimes he injected victims while they were unconscious. At trial, victims described how Buck put sedatives in their drinks or in the injections, causing them to lose consciousness or control over their bodies. While they were unconscious, Buck sexually assaulted his victims.
On two occasions, Buck’s party-and-play fetish turned lethal. Buck killed Gemmel Moore with a lethal dose of methamphetamine on July 27, 2017, and then he killed Timothy Dean with a lethal dose of methamphetamine on January 7, 2019.
These deaths failed to deter him from continuing to distribute methamphetamine, and Buck continued distributing the drug to additional victims, including a man who overdosed twice in Buck’s apartment but survived after receiving immediate medical treatment.
Buck also enticed individuals to travel to California from other states for the purpose of engaging in prostitution through party-and-play sessions. Buck purchased a plane ticket for Moore, who had moved to Texas, so Moore could travel to Los Angeles in July 2017 to party and play at Buck’s apartment. In September 2018, Buck similarly purchased a plane ticket for another victim to fly from Iowa to Los Angeles.
Buck has been in federal custody in this case since his arrest in September 2019.
“This defendant preyed upon vulnerable victims – men who were drug-dependent and often without homes – to feed an obsession that led to death and misery,” said United States Attorney Tracy L. Wilkison. “Mr. Buck continues to pose a clear danger to society, as evidenced by him continuing to lure men to his apartment, even after he killed two men with lethal methamphetamine injections. The sentence imposed today will protect other potential victims and hopefully will bring some solace to the families of two men who needlessly died in Mr. Buck’s apartment.”
“We fight every day, with every drug-related case, to bring justice to the victims and their families,” said DEA Los Angeles Field Division Special Agent in Charge Bill Bodner. “Individuals who knowingly distribute lethal drugs and use them to prey on vulnerable victims will be relentlessly pursued and held accountable. Today’s sentencing illustrates the tireless efforts by investigators and prosecutors to hold predators responsible for their actions.”
“Ed Buck preyed on young black males who were vulnerable, isolated and were often fighting addiction,” said Kristi K. Johnson, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The evidence showed that Buck, in addition to causing the death of two men, also degraded his victims with racial slurs and exploited their circumstances, including homelessness and addiction, to indulge his sexual proclivities. This sentence will effectively remove a predator and hopefully deliver a degree of justice to the families of the victims.”
“As the Sheriff of Los Angeles County, I stand with the victims of crime,” said Los Angeles County Sheriff Alex Villanueva. “This has been a long and very thorough investigation which began with our Los Angeles County Sheriff’s Department Homicide Bureau. Investigators worked tirelessly to put together a fileable case which was ultimately presented to the United States Attorney’s Office. Collectively, Homicide Bureau, with the support of the Organized Crime Drug Enforcement Task Force, and in partnership with the Drug Enforcement Administration and the FBI, the investigation continued. I am especially thankful to the prosecuting Assistant United States Attorneys for their commitment to seek justice for the victims and their families.”
The Drug Enforcement Administration’s Los Angeles Field Division, the FBI and the Los Angeles County Sheriff’s Department investigated this matter.
Assistant United States Attorneys Chelsea Norell of the Violent and Organized Crime Section and Lindsay Bailey of the International Narcotics, Money Laundering, and Racketeering Section prosecuted this case.
Former San Pedro Train Engineer Sentenced to 3 Years in Prison for Intentionally Derailing Locomotive Near U.S. Navy Hospital ShipRead the Press Release
LOS ANGELES – A former train engineer at the Port of Los Angeles was sentenced today to 36 months in federal prison for intentionally running a locomotive at full speed off the end of railroad tracks near a United States Navy hospital ship that was deployed to provide medical relief during the early months of the COVID-19 pandemic.
Eduardo Moreno, 46, of San Pedro, was sentenced by United States District Judge Philip S. Gutierrez, who also ordered him to pay $755,880 in restitution.
Moreno pleaded guilty in December 2021 to one count of committing a terrorist attack and other violence against railroad carriers and mass transportation systems.
On March 31, 2020, Moreno drove a train at high speed, did not slow down near the end of the railroad track, and intentionally derailed the train off the tracks near the United States Naval Ship Mercy – a hospital ship then docked in the Port of Los Angeles.
No one was injured in the incident, and the Mercy was not harmed or damaged. The incident resulted in the train leaking a substantial amount – approximately 2,000 gallons – of diesel fuel, which required clean up by fire and other hazardous materials personnel. Clean-up crews recovered approximately 400 gallons of fuel from the fuel tank and the ground adjacent to the derailment, according to court documents.
Moreno caused $755,880 in damage because of the derailment.
In his first interview with the Los Angeles Port Police, Moreno acknowledged that he “did it,” saying that he was suspicious of the Mercy and believed it had an alternate purpose related to COVID-19 or a government takeover, according to an affidavit filed with a criminal complaint in this case. Moreno stated that he acted alone and had not pre-planned the attempted attack. While admitting to intentionally derailing and crashing the train, he said he knew it would bring media attention and “people could see for themselves,” referring to the Mercy, according to the affidavit.
In a second interview with FBI agents, Moreno stated that “he did it out of the desire to ‘wake people up,’” the affidavit states. “Moreno stated that he thought that the Mercy was suspicious and did not believe ‘the ship is what they say it’s for.’”
“[Moreno’s] offense was extraordinarily serious, and he used his unique access as a licensed train conductor to derail a multi-ton train toward a government hospital ship whose purpose was to treat vulnerable patients in the midst of a global pandemic,” prosecutors wrote in a sentencing memorandum.
The FBI’s Joint Terrorism Task Force and the Port of Los Angeles Police investigated this matter.
Assistant United States Attorneys Reema M. El-Amamy and Christine M. Ro of the Terrorism and Export Crimes Section, along with Trial Attorney Taryn Meeks of the Justice Department’s National Security Section’s Counterterrorism Section prosecuted this case.
Six Southern California Companies Ordered to Pay $1.83 Billion in Restitution for Scheming to Avoid Payment of Aluminum DutiesRead the Press Release
LOS ANGELES – Six Southern California companies today were ordered to pay $1.83 billion in restitution for participating in a conspiracy to defraud the United States through a scheme in which huge amounts of aluminum – disguised as “pallets” to avoid $1.8 billion in customs duties – were exported to the United States and were “sold” to fraudulently inflate a China-based company’s revenues and deceive investors worldwide.
United States District Judge R. Gary Klausner sentenced two aluminum businesses and four warehousing companies – all of which were related to one another – to five years of probation, which is the maximum penalty permitted by law, and ordered them to pay $1.83 billion in restitution. The defendants are:
- Perfectus Aluminium Inc., an Ontario-based business;
- Perfectus Aluminium Acquisitions LLC, a subsidiary of Perfectus Aluminium formed in 2014 to oversee several companies that received aluminum pallets shipped to the United States after duties were imposed on Chinese aluminum in 2011;
- Scuderia Development LLC, which owns a warehouse in Riverside;
- 1001 Doubleday LLC, which owns a warehouse in Ontario;
- Von Karman – Main Street LLC, which owns a warehouse in Irvine; and
- 10681 Production Avenue LLC, which owns a warehouse in Fontana.
At the conclusion of a nine-day trial in August 2021, a federal jury found all six corporate entities guilty of one count of conspiracy, nine counts of wire fraud and seven counts of passing false and fraudulent papers through a customhouse. The Perfectus Aluminium defendants also were found guilty of seven counts of international promotional money laundering.
“The Perfectus and Warehouse defendants were integral participants in this conspiracy,” prosecutors wrote in a sentencing memorandum. “Indeed, they existed only to perpetrate it.”
The corporate defendants sentenced today – along with indicted defendants China Zhongwang Holdings Ltd., Asia’s largest manufacturer of aluminum extrusions; Zhongtian Liu, the company’s former president and chairman; and several other individuals – lied to U.S. Customs and Border Protection to avoid paying the United States $1.8 billion in anti-dumping and countervailing duties (AD/CVD) that were imposed in 2011 on certain types of extruded aluminum imported into the United States from China.
The aluminum sold to United States-based companies controlled by Liu was simply aluminum extrusions that were spot-welded together to make them appear to be functional pallets. In fact, there were no customers for the 2.2 million pallets imported by the Liu-controlled companies between 2011 and 2014, and no pallets were ever sold.
The vast majority of the pallets were imported through the ports of Los Angeles and Long Beach and then stockpiled at four large warehouses in Southern California, all of which were purchased at Liu’s direction.
Liu and his co-defendants orchestrated the bogus sales of aluminum to Liu-controlled companies in Southern California to falsely inflate China Zhongwang’s value. Liu was the majority owner of China Zhongwang, which has been listed on the Stock Exchange of Hong Kong since a 2009 initial public offering that raised $1.26 billion.
After the AD/CVD duties were put in place in 2011, China Zhongwang’s annual reports falsely claimed that there was a robust demand for the aluminum pallets in the United States. Although the annual reports asserted that the aluminum pallets were being sold to independent third parties – and the defendants used these reported “sales” to inflate China Zhongwang’s reported sales volume and purported volume of exports to the United States – in fact the aluminum was being stockpiled by Liu-controlled entities in more than 2 million square feet of warehouse space owned by the warehouse defendants in Southern California, as well as at Liu’s New Jersey facility.
Since there was no actual demand for the pallets, Liu and China Zhongwang arranged for aluminum melting facilities to be built and acquired, which were to be used to reconfigure the aluminum imported as pallets into a form with commercial value.
The defendants facilitated their schemes by laundering hundreds of millions of dollars through shell companies to the U.S.-based aluminum companies controlled by Liu. The funds were then transferred to China Zhongwang and the other shell companies as payments for the aluminum.
On March 24, Judge Klausner ordered the forfeiture to the United States the seized aluminum, currently estimated to be worth approximately $70 million.
The remaining four defendants charged in a 2019 federal grand jury indictment in this case have yet to appear in court in the United States to face the criminal charges in this matter:
- Zhongtian Liu, 58, a billionaire Chinese citizen who is a former Tustin resident, and who is the former president and former chairman of the board of China Zhongwang Holdings Ltd.;
- China Zhongwang Holdings Ltd., a publicly traded aluminum company based in Liaoyang City that at the time of the indictment was the largest aluminum extrusion manufacturer in Asia and the second largest in the world, and which has accrued approximately $3.6 million in contempt sanctions for its failure to appear in this case;
- Zhaohua Chen, 62, a Chinese national who allegedly was a close friend of Liu and a key player in the scheme; and
- Xiang Chun Shao, a.k.a. “Johnson Shao,”60, most recently of Irvine, who allegedly managed a collection of Southern California businesses that pretended to be independent third parties importing the Chinese aluminum, including the Perfectus defendants.
In 2017, the United States Attorney’s Office filed civil forfeiture actions against the four Southern California warehouses used by Perfectus to store the pallets. In 2018, the government filed a fifth civil forfeiture complaint against “approximately 279,808 Aluminum Structures in the Shape of Pallets,” about half of which were seized in early 2017 at the Ports of Los Angeles and Long Beach, and the other half were seized from three other warehouses Perfectus was using to store the pallets.
Those civil asset forfeiture cases have been stayed pending the completion of the criminal prosecution.
Homeland Security Investigations and IRS Criminal Investigation investigated this matter.
Assistant United States Attorneys Roger A. Hsieh and Gregory D. Bernstein of the Major Frauds Section prosecuted this case. Assistant United States Attorney Jonathan S. Galatzan, Chief of the Asset Forfeiture Section, is handling the asset forfeiture-related portion of this case.
Upland Man Arrested on Indictment Alleging He Distributed Fentanyl to Victim Who Soon Afterward Died from OverdoseRead the Press Release
RIVERSIDE, California – A San Bernardino County man was arrested today on a federal grand jury indictment that alleges he sold fentanyl to a woman last year who soon afterward suffered a fatal overdose from the powerful synthetic opioid.
John Biagianti, 31, of Upland, was arrested this morning at his residence by federal and local law enforcement.
He is charged with one count of distribution of fentanyl resulting in death – a crime that carries a mandatory minimum sentence of 20 years in federal prison and a statutory maximum sentence of life imprisonment.
Biagianti is scheduled to be arraigned this afternoon in United States District Court in Riverside.
According to an indictment filed on April 6, Biagianti on August 8, 2021 knowingly and intentionally distributed fentanyl to a victim, who ingested the drug and died the following day.
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 Riverside County Sheriff’s Department’s Overdose Death Investigations and Narcotics Unit and the Drug Enforcement Administration’s Los Angeles Division investigated this matter.
Special Assistant United States Attorney Stephen T. Merrill of the Riverside Branch Office is prosecuting this case.
San Fernando Valley Man Sentenced to 18 Months in Prison for Starting Fire in Santa Monica Restaurant During May 2020 Civil UnrestRead the Press Release
LOS ANGELES – A West Hills man was sentenced today to 18 months in federal prison for starting a fire that caused substantial damage to a Santa Monica restaurant during the civil disturbances that erupted during the spring of 2020.
Micah Tillmon, 20, was sentenced by United States District Judge Michael W. Fitzgerald. A restitution hearing will be scheduled for a later date.
Tillmon pleaded guilty in September 2021 to one count of possession of an unregistered destructive device.
On May 31, 2020, Tillmon entered Sake House by Hikari, a Japanese restaurant located in downtown Santa Monica, without authorization and while the business was closed because of the civil unrest occurring in the city at that time. While inside the restaurant, Tillmon possessed and used an incendiary device to ignite a fire that rapidly grew, enveloped the entire restaurant space and spread to other areas of the building adjacent to the restaurant.
According to court documents, security video from the restaurant shows Tillmon removing “a red tube-shaped object from his jacket, which he placed behind the reception desk area of the restaurant before walking away. Within seconds of that action, smoke and fire appeared from the area.”
The Santa Monica Fire Department (SMFD) responded to the fire and extinguished the flames using several fire trucks and numerous personnel. Due to safety concerns that accompanied the city’s civil unrest, SMFD prematurely abandoned the scene. As a result, SMFD needed to return to the scene several times throughout the night to extinguish additional flare-ups. The restaurant has since permanently closed.
Tillmon was identified by detectives with the Santa Monica Police Department, who reviewed numerous security videos and social media posts. Tillmon was also linked to the fire when investigators uncovered a video showing his white Ford Explorer parking next to the Sake House four minutes before the fire started and then reversing across the street soon after the fire started, according to court documents.
Tillmon possessed an incendiary device that had not been registered with the National Firearms Registration and Transfer Record, the central federal registry for all items regulated under the National Firearms Act.
“[Tillmon’s] actions on May 31, 2020, were only possible because of a complete breakdown in social order,” prosecutors wrote in a sentencing memorandum. “Riots like the ones that convulsed this district in the summer of 2020 are a stark reminder of the thin line that separates state control and anarchy.”
The Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Santa Monica Police Department investigated this matter.
Assistant United States Attorney Shawn T. Andrews of the Violent and Organized Crime Section prosecuted this case.
Inland Empire Man Agrees to Plead Guilty in Bid-Rigging Scheme to Obtain Contracts to Provide Food to Federal Prison FacilitiesRead the Press Release
LOS ANGELES – A former contractor at a food supply company has agreed to plead guilty to a felony bid-rigging charge, admitting that he conspired with a person at another food company to determine which supplier would obtain low-bid contracts from the United States Bureau of Prisons (BOP), the Justice Department announced today.
Edgar Porras, 49, of Moreno Valley, was charged in a criminal information filed today with one count of bid rigging. In a plea agreement also filed today, Porras agreed to plead guilty to the offense.
During the scheme that ran from 2013 through August 2018, Porras conspired “to suppress and restrain competition by rigging bids to obtain selected food contracts offered by the BOP,” according to court documents. To further the scheme, Porras, who was a contractor to a food company identified as “Company A,” agreed with co-conspirators not to compete to obtain the BOP contracts, and collectively they decided which conspirator would submit the lowest – and presumably winning – bid for a contract.
Porras admitted in his plea agreement that he rigged the bidding process for approximately 111 BOP food contracts cumulatively worth approximately $1.9 million.
Porras agreed to plead guilty to violating a provision of the Sherman Antitrust Act, which carries a statutory maximum penalty of 10 years in federal prison and a maximum fine of $1 million. The fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either of those amounts is greater than the statutory maximum fine.
Porras will be directed to appear in United States District Court in Los Angeles at a later date.
The United States Department of Justice, Office of Inspector General conducted the investigation in this matter as part of the Procurement Collusion Strike Force (PCSF).
Assistant United States Attorneys Jeff Mitchell of the Major Frauds Section and Jason Pang of International Narcotics, Money Laundering, and Racketeering Section are prosecuting this case. The United States Attorney’s Office is a participating member of the PCSF.
In November 2019, the Department of Justice created the PCSF, a joint law enforcement effort to combat antitrust crimes and related fraudulent schemes that impact government procurement, grant and program funding at the federal, state and local levels.
In the fall of 2020, the Strike Force expanded its footprint with the launch of PCSF: Global, which is designed to deter, detect, investigate, and prosecute collusive schemes that target government spending outside of the United States.
To contact the PCSF, or to report information on market allocation, price fixing, bid rigging or other anticompetitive conduct, go to https://www.justice.gov/procurement-collusion-strike-force.
Compton Man Charged with Robbing Men He Met on Dating AppRead the Press Release
LOS ANGELES – A Compton man is expected to appear in federal court today after being arrested Monday on federal criminal charges alleging he targeted and robbed more than 20 gay men he met on the Grindr dating application.
Derrick Patterson, 22, was arrested on Monday by special agents with the FBI. Patterson, who is charged in a criminal complaint with one count of Hobbs Act robbery, is expected to make his initial appearance this afternoon in United States District Court.
According to an affidavit filed with the criminal complaint on March 30, from November 2019 to March 2022, Patterson targeted his victims by using Grindr, a social networking program for gay, bisexual, transgender and queer people. Patterson allegedly met his victims at their homes or in hotel rooms, purportedly for sexual encounters, then robbed them. During the robberies, Patterson allegedly pulled weapons – varyingly, knives or a taser gun – on his victims, then demanded money and their cell phones, before fleeing the scene with the victims’ wallets. On other occasions, Patterson physically assaulted his victims. He then allegedly later withdrew money from victims’ bank accounts or used their credit cards for his own personal expenses.
For example, in September 2020, Patterson allegedly met one victim at a hotel on Century Boulevard in Los Angeles and, while engaging in consensual sexual activity, took the victim’s phone. He then attempted to access Apple Pay by asking the victim for the password. When the victim refused and demanded his phone back, Patterson pulled out a taser, threatened the victim, and continued to demand the victim’s Apple Pay password, according to the affidavit. When the victim fled, Patterson allegedly activated the taser. When the victim returned to the room, Patterson was gone, but the victim’s wallet was missing and his belongings had been rummaged through.
A search warrant for Patterson’s phone number placed him near this location at the time of the robbery – as well as at a different Century Boulevard hotel where a similar robbery was reported two hours earlier.
During another robbery in October 2020, Patterson allegedly stabbed a victim in the chest. The victim survived and later positively identified Patterson during a photographic line-up as his attacker. The final robbery occurred on March 26 at a hotel in Beverly Hills, the affidavit alleges.
A complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proved guilty beyond a reasonable doubt.
If convicted, Patterson would face a statutory maximum sentence of 20 years in federal prison.
The FBI investigated this matter. The Los Angeles Police Department, the Los Angeles County Sheriff’s Department and the Beverly Hills Police Department provided substantial assistance.
Assistant United States Attorney Jeremiah M. Levine of the Violent and Organized Crime Section is prosecuting this case.
Anyone who believes they may have been a victim or targeted by the defendant is urged to contact the FBI’s Los Angeles Field Office 24 hours a day at (310) 477-6565.
Calabasas Man Allegedly Scammed Investors out of at Least $28 Million They Thought Would Fund Cannabis Vaping BusinessesRead the Press Release
LOS ANGELES – A former UCLA decathlete who also competed with the Philippines national team was arrested this morning on a federal criminal complaint alleging that he fraudulently raised more than $37 million from investors who were told their funds would be used to finance companies marketing cannabis vape pens.
David Joseph Bunevacz, 53, of Calabasas, was taken into custody this morning pursuant to a complaint filed on March 30 that charges him with one count of wire fraud. Bunevacz is expected to make his initial appearance this afternoon in United States District Court in Los Angeles.
According to an affidavit filed with the complaint, Bunevacz solicited investments in various businesses – “CB Holding Group Corp.” and “CaesarBrutus LLC,” among others – which he claimed were involved in the sale of vape pens containing cannabis products such as CBD oil and THC. Bunevacz falsely told at least one investor he had a long-standing relationship with a Chinese manufacturer of disposable vape pens and he obtained “raw pesticide-free oil” that was sent to a “lab that infuses the flavors into the oil with our proprietary custom process that renders the vape flavoring smooth and discrete,” the complaint alleges. Bunevacz allegedly also provided investors with forged documents – such as bank statements, invoices and purchase orders – to support his claims of the businesses’ success and the need for investor funds.
Instead of using the funds to finance business operations, Bunevacz “misappropriated the vast majority of the funds to pay for his own opulent lifestyle, including a luxurious house in Calabasas, Las Vegas trips, jewelry, designer handbags, a lavish birthday party for his daughter, and horses,” according to the affidavit. Bunevacz allegedly spent $8,143,500 at casinos, paid $218,700 to an event planner in connection with a birthday party for his daughter, and bought a horse for $330,000. Some investor funds were allegedly used to repay earlier investors in a manner consistent with a Ponzi scheme.
To create the false appearance that his companies were engaged in legitimate business activities, Bunevacz registered various shell companies, including several with names similar or identical to those of legitimate cannabis businesses. To conceal his control of these shell companies and the bank accounts associated with them, Bunevacz listed other individuals, including his stepdaughter, as the corporate officers of the shell companies.
According to the affidavit, Bunevacz and his family maintain a public profile. Bunevacz’s blog touts his success as a former decathlete who competed for the Philippines, and his wife and daughter appeared in a reality television show. Despite Bunevacz’s promotion of his background, Bunevacz took efforts to conceal negative information from investors, such as his 2017 felony conviction for the unlawful sale of securities, according to the affidavit. After one investor uncovered a civil lawsuit against Bunevacz, Bunevacz allegedly emailed a counterfeit version of the settlement agreement to falsely make it appear that he had been paid $325,000 as part of a settlement. In reality, it was Bunevacz who had agreed to pay $325,000 to settle the claim.
Investigators believe that Bunevacz caused his victims to suffer losses of at least $28.4 million, and possibly as much as $35 million. The investigation in this matter is ongoing.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
If convicted of the wire fraud charge alleged in the complaint, Bunevacz would face a statutory maximum sentence of 20 years in federal prison.
The FBI, the Los Angeles Sheriff’s Department and IRS Criminal Investigation are investigating this matter. The U.S. Securities and Exchange Commission provided substantial assistance.
Assistant United States Attorney Alexander B. Schwab of the Major Frauds Section is prosecuting this case.
San Bernardino County Lawyer Sentenced to 10 Years in Federal Prison for Receiving Sexually Explicit Images from MinorRead the Press Release
LOS ANGELES – A lawyer who formerly had a legal practice in Ontario was sentenced today to 120 months in federal prison for receiving sexually explicit images and videos from a minor over Snapchat.
Sagi Schwartzberg, 39, of Fontana, who used the aliases “Jason D,” “drunkesq_064” and “xocdrunkx” on social media platforms, was sentenced by United States District Judge André Birotte Jr., who also ordered him to pay a $10,000 fine and ordered him to serve a 20-year period of supervised release upon the completion of his prison term.
Schwartzberg, whose California law license was suspended on January 24, pleaded guilty in August 2021 to one count of receipt of child pornography.
From 2019 to January 2021, Schwartzberg used Snapchat to communicate with a minor victim. Between May 2020 and December 2020, Schwartzberg received several sexually explicit images and videos of the victim over Snapchat.
In November 2020, law enforcement received a tip from Kik, another instant messaging application, that one of its users had shared suspected child pornography with another Kik user or group of users from October 2020 to November 2020.
The tip indicated that a person later identified as Schwartzberg had uploaded suspected child pornography to Kik from two locations – later determined to be his residence and his law office.
Law enforcement also discovered that in February 2020 Kik had also submitted a tip that one of its users had shared suspected child pornography with another user or group of users in February 2020. One of the IP addresses associated with the child pornography was assigned to Schwartzberg’s Fontana residence and another IP address was assigned to his previous work address in Rancho Cucamonga.
During a search on February 17, Fontana Police officers seized Schwartzberg’s mobile phone, which had a hidden vault containing file folders, labeled with girls’ names, one of which contained sexually explicit images and videos of a girl who was at the time 14 and 15 years old when the images were created.
During a subsequent interview with police officers that is outlined in the affidavit, the girl said she had been solicited by Schwartzberg to send sexually explicit images via Snapchat starting 2019 and that she had received electronic gift cards in exchange.
In addition to this victim, law enforcement located four additional individuals in California, Minnesota and Iowa, who provided information that Schwartzberg paid for sexually explicit photos and videos of them via Snapchat and Kik. These victims were minors at the time Schwartzberg contacted them.
“Trading child pornography and soliciting sexually explicit photos . . . [and] videos from minors, is shameful and shocking behavior from an adult man, much less an adult man from [Schwartzberg’s] background: an attorney, a father, a husband, an educated man of profession who appears to enjoy professional and financial success as well as a wide circle of personal friends and colleagues,” prosecutors wrote in a sentencing memorandum.
The FBI investigated this matter in conjunction with Fontana Police Department, as part of Inland Regional Child Exploitation and Human Trafficking Task Force. The Task Force also includes the Upland Police Department, the Rialto Police Department, the San Bernardino County Sheriff's Department, the Riverside County District Attorney’s Office, the Riverside County Sheriff’s Department and the Riverside Police Department.
Assistant United States Attorney Sonah Lee of the Riverside Branch Office prosecuted this case.
Los Angeles Paralegal Admits Role in Scheme to Fraudulently Obtain Legal U.S. Residency for Members of Philippines-Based ChurchRead the Press Release
LOS ANGELES – A Los Angeles paralegal has agreed to plead guilty to participating in a conspiracy to violate U.S. immigration laws by preparing and filing fraudulent documents that sought legal permanent residency and citizenship for members of a Philippines-based church who allegedly worked as fundraisers for a bogus charity operated by the church, the Justice Department announced today.
In a plea agreement filed today in United States District Court, Maria De Leon, 73, a resident of the Koreatown neighborhood of Los Angeles and the owner of Liberty Legal Document Services, agreed to plead guilty to participating in a scheme with administrators of the church, which is known as the Kingdom of Jesus Christ, The Name Above Every Name (KOJC).
In addition to pleading guilty, De Leon agreed to cooperate in the government’s case.
De Leon admitted in the plea agreement to participating for about eight years in the conspiracy to commit marriage fraud and visa fraud with the leaders of the KOJC.
“At the time [De Leon] completed the immigration paperwork for certain KOJC members, [she] knew that the immigration paperwork was based upon false representations of the bona fides of the underlying marriages” made by church officials, according to the plea agreement.
De Leon admitted to submitting fraudulent “Petitions for Alien Relative” and related paperwork on behalf of KOJC members knowing or believing that the marriages were arranged for purposes of securing favorable immigration status for a spouse.
De Leon is one of nine defendants who were charged in November 2021 in a 42-count superseding indictment that alleges a labor trafficking scheme that used fraudulently obtained visas to bring KOJC members to the United States, where they were forced to solicit donations for a bogus charity – the Glendale-based Children’s Joy Foundation (CJF). The indictment alleges that the donations were used to finance church operations and the lavish lifestyles of its leaders.
Members who proved successful at soliciting for the KOJC were forced to enter into sham marriages or obtain fraudulent student visas to acquire legal status in the United States so they could continue soliciting donations, the indictment alleges. Many of the workers were moved around the United States to solicit donations as CJF “volunteers,” who were also called Full Time Miracle Workers, according to the indictment, which alleges these “workers fundraised for KOJC nearly every day, year-round, working very long hours, and often sleeping in cars overnight.”
The superseding indictment also alleges a sex trafficking scheme that implicates KOJC’s leader, Apollo Carreon Quiboloy, who was referred to as “The Appointed Son of God.”
De Leon is one of six defendants previously arrested in this case. The remaining five defendants who have appeared in federal court in Los Angeles are currently scheduled to be tried on March 21, 2023.
Three of the defendants, including Quiboloy, are fugitives believed to be in the Philippines.
The court is expected to soon schedule a hearing for De Leon to formally enter her guilty plea to the conspiracy count. Once she pleads guilty, De Leon will face a statutory maximum sentence of five years in federal prison.
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.
As part of the investigation, the FBI is encouraging potential victims or anyone with information about KOJC activities to contact investigators. Those with information are asked to call the FBI’s Los Angeles Field Office at (310) 477-6565. Individuals may also contact the FBI through its website at https://www.fbi.gov/tips.
The investigation into KOJC activities is being led by the FBI, which is receiving substantial assistance from Homeland Security Investigations, U.S. Citizenship and Immigration Service’s Fraud Detection and National Security Unit, the U.S. Department of State’s Diplomatic Security Service, and IRS Criminal Investigation.
Assistant United States Attorneys Daniel H. Ahn, Jake D. Nare and Benjamin D. Lichtman of the Santa Ana Branch Office, along with Special Assistant United States Attorney Angela C. Makabali of the General Crimes Section, are prosecuting this case. Assistant United States Attorney Katharine Schonbachler of the Asset Forfeiture Section is also working on the matter.
Orange County House Flipper Found Guilty of Filing False Federal Tax Returns That Omitted More Than $2 Million of IncomeRead the Press Release
SANTA ANA, California – A federal jury has found an Orange County real estate investor who successfully flipped foreclosed homes guilty of three federal criminal tax charges, the Justice Department announced today.
John W. Rampello, 71, of Santa Ana, was found guilty on Wednesday afternoon of two counts of subscribing to a false individual income tax return and one count of aiding and assisting in the preparation of a false individual income tax return.
United States District Judge David O. Carter has scheduled a June 27 sentencing hearing, at which time Rampello will face a statutory maximum sentence of nine years in federal prison.
According to evidence presented at his seven-day trial, Rampello, along with his business partners, was an established and successful property flipper of foreclosed homes in Orange County since the mid-1990s. During the tax years 2014 through 2016, Rampello and his partners flipped approximately 170 homes and defendant’s portion of the profits was approximately $2.1 million.
Rampello and his business partners kept detailed records of their property flip activities, including the profits Rampello made on each property. But Rampello concealed this information from his income tax return preparers and did not tell them that he was involved in the property flipping business.
As a result of his omission of his property flipping income from his 2014, 2015, and 2016 individual income tax returns, Rampello underreported his federal income taxes by hundreds of thousands of dollars.
IRS Criminal Investigation investigated this matter.
Assistant United States Attorney James C. Hughes of the Major Frauds Section and Assistant United States Attorney Brett A. Sagel of the Santa Ana Branch Office are prosecuting this case.
This case was the result of a whistleblower. If you have information on tax law violations, please provide it to IRS at https://www.irs.gov/compliance/whistleblower-office.
Federal Authorities Announce Charges Related to Multi-Million Dollar Sport Gambling Business Involving Current and Former Pro AthletesRead the Press Release
LOS ANGELES – Federal authorities today announced a series of cases stemming from an illegal gambling operation that involved current and former professional athletes, some of whom assisted with the business and others who placed large bets on games.
In documents unsealed Wednesday in United States District Court, the principals of the operation agreed to plead guilty to conspiracy charges and admitted they took in millions of dollars in bets, many of which were facilitated by a Costa Rica-based gambling website. One of the leaders of the scheme also admitted that he failed to report to the IRS nearly $1.5 million in income he received from the gambling scheme over two years.
The owner of the online gambling business and website pleaded guilty earlier this month and admitted the business was illegal under California law because it involved at least five people, operated for at least six years, and often had gross revenue of well over $2,000 on a single day.
Four new cases and related plea agreements were unsealed this week against:
- Wayne Nix, 45, of Newport Coast, a former minor league baseball player, who was charged with one count of conspiring to operate an illegal sports gambling business, and one count of filing a false tax return;
- Edon Kagasoff, 44, of Lake Forest, Nix’s longtime partner in the operation, who was charged with one count of conspiring to operate an illegal sports gambling business;
- Howard Miller, 63, of Gardena, who was charged with one count of aiding and abetting the operation of an illegal sports gambling business by assisting in the collection and payout of gambling proceeds related to the Costa Rica-based website; and
- Celebrity Financial LLC, dba Sherman Oaks Check Cashing, which was charged with failing to maintain an effective money laundering program related to it cashing at least $18 million in checks from the illegal sport gambling business at its San Fernando Valley check cashing store.
Representatives of Celebrity Financial appeared in court on March 28. Nix made his first court appearance Wednesday afternoon, and he is scheduled to formally enter his guilty plea on April 11. Miller has agreed to appear in court this afternoon, and Kagasoff has agreed to appear in court on Friday.
The Justice Department also announced that earlier this month the court unsealed cases against two other defendants:
- Kenneth Arsenian, 52, of Newport Beach, who pleaded guilty on January 26 to four charges: operating an illegal sports gambling business, filing a false tax return, money laundering, and accepting a financial instrument for unlawful internet gambling; and
- Joseph Castelao, 56, of Rancho Palos Verdes, the owner of the gambling website – Sand Island Sports – who pleaded guilty on March 15 to operating an illegal gambling business.
According to the court documents made public this week, Nix began operating a bookmaking business about 20 years ago. Through his contacts in the sports world, Nix developed a client list that included current and former professional athletes, and he employed three former Major League Baseball players to assist with the business.
Kagasoff joined Nix in the gambling operation around 2014, and they used an online infrastructure and calling center operated by Sand Island Sports to create accounts for bettors, according to court documents, which note that Nix and his associates paid winning bets and retained nearly all of the money collected from bettors.
Nix’s plea agreement outlines specific incidents related to the betting scheme, including receiving payments for gambling losses from a professional football player, a Major League Baseball coach and a baseball analyst. The plea agreement also discusses a bettor who wagered $1 million a year with Nix’s operation, a $5 million bet on the 2019 Super Bowl, and a sports broadcaster who told Nix he was going to refinance his home to pay off gambling debts.
In relation to the tax count against him, Nix admitted receiving $1,466,947 in income that he failed to report on his 2017 and 2018 federal income tax returns. In his plea agreement, Nix agreed to pay all back taxes due for those years – a total of $1,248,429, which includes the back taxes, penalties and interest. Nix also agreed to forfeit to the government nearly $1.3 million seized in February 2020 from two bank accounts and two brokerage accounts he controlled.
When Arsenian pleaded guilty in January, he admitted failing to report to the IRS more than $2.8 million in income for the years 2015 through 2018. Arsenian has agreed to pay $1.1 million in back taxes, plus additional penalties and interest. Arsenian also agreed to forfeit $341,459 in United States currency seized from his residence in February 2020.
In its plea agreement, Sherman Oaks Check Cashing admitted that it encouraged customers to bring large business checks – far in excess of the $10,000 that normally triggers a Currency Transaction Report (CTR) to federal authorities – and employees of the company told customers that it would not file CTRs. As a result, many of its customers brought checks that were proceeds of unlawful activity, including two customers of the gambling operation who cashed at least $18.35 million in checks. Sherman Oaks Check Cashing admitted that it made at least $500,000 in profits by engaging in this activity. In its plea agreement, the company agreed to pay a $500,000 fine, which is the maximum penalty under the law.
Homeland Security Investigations (HSI) and IRS Criminal Investigation are conducting the ongoing investigation in this matter. The HSI agents are part of the El Camino Real Financial Crimes Task Force.
Assistant United States Attorneys Jeff Mitchell of the Major Frauds Section and Dan Boyle of the Asset Forfeiture Section are prosecuting these cases.
Convicted Terrorist Sentenced to over 15 Years in Federal Prison for Selling Pounds of Methamphetamine While on Supervised ReleaseRead the Press Release
SANTA ANA, California – An Orange County man was sentenced today to 188 months in federal prison for selling nearly four pounds of methamphetamine while he was on supervised release following a 2009 terrorism conviction.
Ahmed Binyamin Alasiri, 45, a.k.a. Kevin Lamar James, of Garden Grove, was sentenced by United States District Judge Cormac J. Carney. Judge Carney also sentenced Alasiri to 24 months in federal prison for violating the terms of his supervised release, a sentence that will run concurrently to Alasiri’s 188-month term.
Alasiri pleaded guilty in October 2021 to one count of distribution of methamphetamine.
About one year after being released from prison and while serving a term of federal supervised release, Alasiri sold methamphetamine to a buyer on three occasions.
“[Alasiri] was industrious and obtained legitimate full-time employment, yet he did not hesitate to traffic in drugs to earn income,” prosecutors argued in a sentencing memorandum. “He valued his personal short-term goals over respect for the law, the societal and individual damage caused by narcotics, and the risk of arrest for drug trafficking.”
On July 24, 2020, Alasiri sold the buyer 430 grams of pure methamphetamine in exchange for $3,700. On August 6, 2020, Alasiri exchanged 435 grams of pure methamphetamine to the buyer for $3,700. On August 20, 2020, Alasiri distributed 877 grams of pure methamphetamine to the buyer in exchange for $7,400.
The total weight of the methamphetamine was approximately 1.7 kilograms (3.8 pounds).
Alasiri admitted in his plea agreement that he – not the buyer – first raised the topic of selling drugs, and that he had “family members who were drug traffickers and that he himself sold drugs to customers.”
Alasiri is on supervised release after completing a 16-year federal prison sentence for conspiring to levy war against the United States through terrorism. Alasiri’s co-conspirators committed numerous armed robberies of gas stations to raise money for attacks Alasari planned on U.S. military operations and Israeli and Jewish facilities in Southern California. Alasiri completed his prison sentence in September 2019.
This case was investigated by the FBI’s Joint Terrorism Task Force (JTTF) in Orange County, with assistance from the following JTTF agencies and other partners: the Los Angeles Police Department, the Los Angeles County Sheriff’s Department, the United States Probation Office, the Federal Bureau of Prisons, the California Department of Corrections and Rehabilitation, the Garden Grove Police Department, the Drug Enforcement Administration, the Orange County Sheriff’s Department, the California Highway Patrol, the United States Department of Defense, and the Orange County Intelligence Assessment Center.
Assistant United States Attorney Dennise D. Willett of the Terrorism and Export Crimes Section prosecuted this case.