Central District of California
Press releases recorded for this federal judicial district.
Inglewood Police Officer and an Informant Arrested on Federal Drug Trafficking ChargesRead the Press Release
LOS ANGELES – Federal authorities have arrested an Inglewood Police officer on narcotics trafficking charges that allege two cocaine transactions, one involving a kilogram of the drug, the Justice Department announced today.
A second man who was once approved to work as an informant for the police officer also has been arrested after authorities discovered over a kilogram of heroin and more than a half-kilogram of suspected cocaine at his residence.
Officer John Abel Baca, 45, of Whittier, a 21-year veteran of the Inglewood Police Department and their police union representative, was arrested October 21, two days after a federal grand jury returned a two-count indictment charging him with distribution of cocaine.
The indictment alleges two transactions, the first occurring on April 29, when Baca allegedly delivered cocaine to a witness cooperating with law enforcement. Baca allegedly delivered approximately one kilogram of cocaine to the same cooperating witness during another meeting on May 4, in exchange for $22,000 in cash.
Baca’s case was unsealed today following the arrest of an alleged confederate – Gerardo Ekonomo, 42, of South Los Angeles. Ekonomo was taken into custody Thursday after FBI agents executed a federal search warrant at his residence and seized narcotics buried in his yard, as well as a firearm and ammunition inside his residence.
Ekonomo was named in a criminal complaint filed today that charges him with possession with intent to distribute heroin. Ekonomo is scheduled to make his initial appearance on Monday, November 1, in United States District Court in downtown Los Angeles.
According to the affidavit in support of the criminal complaint, Baca obtained approval for Ekonomo to purportedly work as a confidential source five years ago, but Ekonomo conducted no documented operations after he was signed up as an informant.
The affidavit filed today notes that Ekonomo was arrested by officers with the City of North Las Vegas Police Department (NLVPD) on June 16 after they found 3 kilograms of heroin in his vehicle. On July 13, Baca contacted a NLVPD officer to inquire “about the status of Ekonomo’s criminal case with the North Las Vegas Police Department, and offering that Ekonomo could ‘work off’ the case by cooperating,” according to the affidavit authored by an FBI special agent.
Baca’s alleged intervention in Ekonomo’s case demonstrates that “Baca is willing to abuse his position as a law enforcement officer in furtherance of his drug trafficking activities and to assist and protect his co-conspirators,” according to the affidavit. The NLVPD officer did not dismiss the charges against Ekonomo and that case remains pending.
During his initial court appearance and arraignment on October 22, Baca was ordered detained without bond after the court found that he was a flight risk and a danger to the community. Baca’s trial is currently set for December 14 in United States District Court in Santa Ana.
If convicted on the charges in the indictment, Baca faces a five-year mandatory minimum prison sentence and a maximum sentence of 60 years of imprisonment. If convicted of the charge in the complaint, Ekonomo faces a 10-year mandatory minimum prison sentence and a maximum sentence of life in prison.
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.
The FBI is investigating this matter. The Inglewood Police Department provided its full cooperation during the investigation.
Assistant United States Attorneys Veronica Dragalin and Cassie D. Palmer of the Public Corruption and Civil Rights Section, and Gina Kong of the Santa Ana Branch Office are prosecuting this case.
Gree Appliance Companies Charged with Failure to Report Dangerous Dehumidifiers and Agree to $91 Million ResolutionRead the Press Release
LOS ANGELES – A Chinese appliance manufacturer and two of its subsidiaries have agreed to resolve criminal charges for failing to notify the U.S. Consumer Product Safety Commission (CPSC) that millions of dehumidifiers they sold to U.S. consumers were defective and could catch fire, the Justice Department announced today.
The resolutions are the first corporate criminal enforcement actions ever brought under the Consumer Product Safety Act (CPSA).
Gree Electric Appliances, Inc. of Zhuhai (Gree Zhuhai), a global appliance manufacturer headquartered in Zhuhai, China, and Hong Kong Gree Electric Appliances Sales Co., Ltd. (Gree Hong Kong) entered into a deferred prosecution agreement (DPA) in connection with a criminal information filed in federal court in Los Angeles. A criminal information filed along with the DPA charges the companies with one felony count under the CPSA of willfully failing to report consumer product safety information to the CPSC. Under the terms of the DPA, Gree Zhuhai and Gree Hong Kong agreed to a total monetary penalty of $91 million and agreed to provide restitution for any uncompensated victims of fires caused by the companies’ defective dehumidifiers.
Gree USA, Inc., a U.S. subsidiary based in the City of Industry, also is charged in the criminal information. Gree USA has agreed to plead guilty to the same charge of willfully failing to report consumer product safety information to the CPSC.
According to court filings, Gree Zhuhai, Gree Hong Kong and Gree USA (collectively, the Gree Companies) knew their dehumidifiers were defective, failed to meet applicable safety standards and could catch fire, but the companies failed to report that information to the CPSC for months. The companies only reported and recalled the dehumidifiers after consumer complaints of fires and resulting harm continued to mount.
Prosecutors with the United States Attorney’s Office and the Consumer Protection Branch of the Justice Department’s Civil Division previously indicted Charley Loh, 63, of Arcadia, and Simon Chu, 66, of Chino Hills – respectively, the chief executive officer and chief administrative officer of Gree USA – on felony CPSA and wire fraud charges for their alleged roles in the failure to report the defective dehumidifiers. Loh and Chu have pleaded not guilty and are scheduled for trial on March 15, 2022, in Los Angeles.
“No one should live in fear that a properly used consumer product might cause injury or death to their loved ones,” said Acting U.S. Attorney Tracy L. Wilkison. “Gree’s months-long delay in reporting known problems with their dangerous and defective dehumidifiers was both criminal and costly. Gree’s decision to delay the reporting of its defective dehumidifiers has resulted in the recall of millions of those products and the payment of millions of dollars. We will not allow companies to profit at the expense of consumers’ health and safety.”
“Manufacturers and distributors must immediately report dangerous consumer products to the CPSC so that actions to protect consumers may be taken as soon as possible,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “Companies and executives that purposefully delay reporting to maintain profits will be prosecuted. The Department of Justice will continue to work closely with the CPSC to ensure consumers’ safety.”
“This historic criminal enforcement action should serve notice that the CPSC will use its authority to the fullest to keep American families safe,” said Chair Alex Hoehn-Saric of the CPSC. “Failing to report dangerous products puts consumers at an unnecessary risk and will not be tolerated.”
“Inferior goods represent a serious threat to the integrity of the consumer product supply chain that the public needs to rely on with confidence,” said Special Agent in Charge David A. Prince for Homeland Security Investigations (HSI) Los Angeles. “Defective products like these pose a dangerous threat to consumers, who assume the products they buy are safe and reliable. HSI will continue to work with our law enforcement partners to aggressively target and investigate those who knowingly jeopardize public safety in the name of profit.”
As part of the DPA and plea agreement, the Gree Companies admitted that, between 2007 and 2013, they sold in the United States more than 2 million dehumidifiers manufactured by Gree Zhuhai and imported by Gree Hong Kong. In September 2012, employees of the Gree Companies, including high-level executives, learned that the Gree dehumidifiers had defects that could cause them to overheat and catch fire, and that consumers had reported fires caused by the dehumidifiers. Those same employees also knew of the obligation to report dangerous consumer products to the CPSC. Despite this knowledge, Gree USA continued to sell the defective dehumidifiers in the United States for at least another six months. The Gree Companies delayed reporting knowledge of the fires to the CPSC for approximately six months, and did not report the defects in the dehumidifiers for approximately nine months. Ultimately, Gree Zhuhai recalled the defective dehumidifiers almost a year after learning about the products’ dangerous defects.
As part of the criminal resolutions, the Gree Companies have agreed, among other things, to continue to cooperate with the Justice Department’s Consumer Protection Branch and the United States Attorney’s Office in any ongoing or future investigations and prosecutions. The Gree Companies also agreed to strengthen their compliance programs and to enhanced reporting requirements that will require the submission of yearly reports to the Justice Department regarding the status of their compliance programs and internal controls, policies and procedures aimed at improving product safety and deterring and detecting violations of the CPSA, as well as the status of remediation efforts. Consistent with Justice Department policy, the DPA with Gree Zhuhai and Gree Hong Kong credits the Gree Companies’ earlier payment of $15.45 million in civil penalties to the CPSC against the agreed-upon $91 million total monetary penalty.
Representatives of Gree USA have agreed to appear in United States District Court in Los Angeles on November 8 for an initial appearance in this case.
HSI of the U.S. Department of Homeland Security investigated this case.
Assistant United States Attorneys Joseph Johns and Dennis Mitchell of the Environmental and Community Safety Crimes Section, and Senior Litigation Counsel Allan Gordus and Trial Attorneys Natalie Sanders and Maryann McGuire of the Justice Department’s Consumer Protection Branch prosecuted the case with the assistance of Patricia Vieira of the CPSC’s Office of General Counsel.
Gree Appliance Companies Charged with Failure to Report Dangerous Dehumidifiers and Agree to $91 Million ResolutionRead the Press Release
A Chinese appliance manufacturer and two of its subsidiaries have agreed to resolve criminal charges for failing to notify the U.S. Consumer Product Safety Commission (CPSC) that millions of dehumidifiers they sold to U.S. consumers were defective and could catch fire. The resolutions are the first corporate criminal enforcement actions ever brought under the Consumer Product Safety Act (CPSA).
Gree Electric Appliances Inc. of Zhuhai (Gree Zhuhai), a global appliance manufacturer headquartered in Zhuhai, China, and Hong Kong Gree Electric Appliances Sales Co. Ltd. (Gree Hong Kong) entered into a deferred prosecution agreement (DPA) in connection with a criminal information filed Thursday in the U.S. District Court for the Central District of California. A criminal information filed along with the DPA charges the companies with one felony count under the CPSA of willfully failing to report consumer product safety information to the CPSC. Under the terms of the DPA, Gree Zhuhai and Gree Hong Kong agreed to a total monetary penalty of $91 million and agreed to provide restitution for any uncompensated victims of fires caused by the companies’ defective dehumidifiers.
Gree USA Inc., a U.S. subsidiary based in City of Industry, California, also is charged in the criminal information. Gree USA has agreed to plead guilty to the same charge of willfully failing to report consumer product safety information to the CPSC.
According to court filings, Gree Zhuhai, Gree Hong Kong and Gree USA (collectively, the Gree Companies) knew their dehumidifiers were defective, failed to meet applicable safety standards and could catch fire, but the companies failed to report that information to the CPSC for months. The companies only reported and recalled the dehumidifiers after consumer complaints of fires and resulting harm continued to mount.
The Consumer Protection Branch of the Justice Department’s Civil Division and the U.S. Attorney’s Office for the Central District of California previously indicted Charley Loh, 63, of Arcadia, California, and Simon Chu, 66, of Chino Hills, California — the Chief Executive Officer and Chief Administrative Officer of Gree USA, respectively — with felony CPSA and wire fraud charges for their alleged roles in the failure to report the defective dehumidifiers. Loh and Chu have pleaded not guilty and are scheduled for trial starting March 15, 2022, in Los Angeles.
“Manufacturers and distributors must immediately report dangerous consumer products to the CPSC so that actions to protect consumers may be taken as soon as possible,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “Companies and executives that purposefully delay reporting to maintain profits will be prosecuted. The Department of Justice will continue to work closely with the CPSC to ensure consumers’ safety.”
“No one should live in fear that a properly used consumer product might cause injury or death to their loved ones,” said Acting U.S. Attorney Tracy L. Wilkison for the Central District of California. “Gree’s months-long delay in reporting known problems with their dangerous and defective dehumidifiers was both criminal and costly. Gree’s decision to delay the reporting of its defective dehumidifiers has resulted in the recall of millions of those products and the payment of millions of dollars. We will not allow companies to profit at the expense of consumers’ health and safety.”
“This historic criminal enforcement action should serve notice that the CPSC will use its authority to the fullest to keep American families safe,” said Chair Alex Hoehn-Saric of the CPSC. “Failing to report dangerous products puts consumers at an unnecessary risk and will not be tolerated.”
“Inferior goods represent a serious threat to the integrity of the consumer product supply chain that the public needs to rely on with confidence,” said Special Agent in Charge David A. Prince for Homeland Security Investigations (HSI) Los Angeles. “Defective products like these pose a dangerous threat to consumers, who assume the products they buy are safe and reliable. HSI will continue to work with our law enforcement partners to aggressively target and investigate those who knowingly jeopardize public safety in the name of profit.”
As part of the DPA and plea agreement, the Gree Companies admitted that, between 2007 and 2013, they sold in the United States more than two million dehumidifiers manufactured by Gree Zhuhai and imported by Gree Hong Kong. In September 2012, employees of the Gree Companies, including high-level executives, learned that the Gree dehumidifiers had defects that could cause them to overheat and catch fire, and that consumers had reported fires caused by the dehumidifiers. Those same employees also knew of the obligation to report dangerous consumer products to the CPSC. Despite this knowledge, Gree USA continued to sell the defective dehumidifiers in the United States for at least another six months. The Gree Companies delayed reporting knowledge of the fires to the CPSC for approximately six months, and did not report the defects in the dehumidifiers for approximately nine months. Ultimately, Gree Zhuhai recalled the defective dehumidifiers almost a year after learning about the products’ dangerous defects.
As part of the criminal resolutions, the Gree Companies have agreed, among other things, to continue to cooperate with the Civil Division’s Consumer Protection Branch and the U.S. Attorney’s Office in any ongoing or future investigations and prosecutions. The Gree Companies also agreed to strengthen their compliance programs and to enhanced reporting requirements that will require the submission of yearly reports to the Justice Department regarding the status of their compliance programs and internal controls, policies and procedures aimed at improving product safety and deterring and detecting violations of the CPSA, as well as the status of remediation efforts. Consistent with Justice Department policy, the DPA with Gree Zhuhai and Gree Hong Kong credits the Gree Companies’ earlier payment of $15.45 million in civil penalties to the CPSC against the agreed-upon $91 million total monetary penalty.
Senior Litigation Counsel Allan Gordus and Trial Attorneys Natalie Sanders and Maryann McGuire of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorneys Joseph Johns and Dennis Mitchell of the U.S. Attorney’s Office for the Central District of California prosecuted the case with the assistance of Patricia Vieira of the CPSC’s Office of General Counsel. HSI of the U.S. Department of Homeland Security investigated this case.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch.
Repeat Sex Offender Sentenced to 10 Years in Federal Prison for Attempting to Entice a Minor to Engage in Sexual ActivityRead the Press Release
LOS ANGELES – A San Gabriel Valley man whose conviction on a previous sex offense ended his career in education was sentenced today to 120 months in federal prison for attempting to entice a minor to engage in sexual activity over the internet.
Albert Pinedo, 78, of Alhambra, was sentenced by United States District Judge George H. Wu.
At the conclusion of a four-day trial that ended on July 23, a federal jury found Pinedo guilty of one felony count of attempting to persuade, induce or entice a minor to engage in sexual activity.
According to the evidence presented at trial, on February 26, 2020, Pinedo placed an ad on Craigslist that stated, “I’m a retired senior looking for casual contact with young men.” An undercover Homeland Security Investigations agent answered the ad and responded as a fictitious 14-year-old boy. Pinedo and the undercover agent chatted online for approximately one week, before making plans to meet and engage in oral sex. In a series of emails that were presented at trial, Pinedo acknowledged the boy’s age and described sexual acts he wanted to perform. Pinedo also asked the undercover agent to take naked photos and send them.
On March 4, 2020, Pinedo traveled to meet with the undercover agent at the designated meeting place, where he was arrested. A search of his vehicle revealed that he had brought lubricant and a sex toy to their meeting.
Pinedo was a Los Angeles Unified School District middle school teacher and administrator who previously was convicted in 2003 of distribution of child pornography and was sentenced to 63 months in federal prison for that felony offense. Pinedo resigned his position at LAUSD following the allegations in that case.
Homeland Security Investigations investigated this matter.
Assistant United States Attorneys Jeffrey M. Chemerinsky and Amy E. Pomerantz of the Violent and Organized Crime Section prosecuted this case.
Illinois Man Sentenced to 15 Years in Prison for Sex Trafficking Two Victims Deceived with Promises of Help with Their Modeling CareersRead the Press Release
LOS ANGELES – A Chicago man has been sentenced to 180 months in federal prison for luring two victims – both of whom were 19 at the time – from Canada with promises of promoting their modeling careers, but instead used force, fraud and coercion to cause the victims to engage in commercial sex acts, the Justice Department announced today.
Jerome Terry Jr., 45, was sentenced by United States District Judge Otis D. Wright II, who described Terry as “a danger to unsuspecting members of the public” and further remarked that a “lengthy term of incarceration is needed to protect the public.”
Terry pleaded guilty on July 19 to one count of conspiracy to engage in sex trafficking.
Along with two co-conspirators, Terry set up a purported modeling management company called CanadianGirlzRock, Inc. to lure aspiring models to Los Angeles and other locations with the promise of modeling careers. In fact, Terry “intended and planned to recruit, entice, and transport the women to Los Angeles, or other locations, and to harbor, provide, obtain, and maintain the women to engage in commercial sex acts,” according to court documents.
After seeing photos of the first victim on social media, Terry contacted the woman, telling her she could come to Los Angeles to work as a model and event host. After the woman arrived in late April 2014, Terry used force, threats of force, fraud, and coercion to cause the victim to engage in commercial sex acts. The victim engaged in commercial sex acts with four clients over approximately four days until Los Angeles Police officers rescued her.
Terry contacted the second woman in late 2014 after seeing photos of her online and told her he would help with her modeling career. Terry told the victim she would need to perform acts of prostitution to make money to support her modeling career, but that the proceeds would be put toward her modeling or given to her to send to her family.
After the woman traveled to Los Angeles in early 2015, Terry used means of fraud – including the false and deceptive promises that he would put money from B.E.’s prostitution toward her modeling career or make the money available for her to send to her family – to cause the victim to engage in commercial sex acts with approximately 40 clients over approximately 10 days. When the victim asked Terry about the money, Terry became angry and broke her phone.
Terry has been in federal custody since his extradition from Canada in 2019. Two co-conspirators originally charged with Terry in this case have entered into diversion agreements.
Homeland Security Investigations investigated this matter, with the Los Angeles Police Department and the Royal Canadian Mounted Police providing substantial assistance.
Assistant United States Attorneys Wilson Park of the Terrorism and Export Crimes Section, Devon Myers of the Cyber and Intellectual Property Crimes Section, and Maria Jhai of the General Crimes Section prosecuted this case.
Arcadia Woman Pleads Guilty to Fraud Scheme Involving Nearly $23 Million Intended for Coachella Hotel and Condo DevelopmentRead the Press Release
LOS ANGELES – A San Gabriel Valley woman pleaded guilty today to a federal criminal charge for overseeing a scheme in which she misappropriated much of $23 million in funds intended for a hotel and condominium complex in the Coachella Valley, and then used the money to finance her lavish lifestyle.
Ruixue “Serena” Shi, 37, of Arcadia, pleaded guilty to one count of wire fraud.
According to her plea agreement, from November 2015 to July 2018, Shi was the general manager of Global House Buyer LLC (GHB), a China-based real estate company that had an office in Los Angeles. Shi identified approximately 47 acres of land in Coachella to build Hyde Resorts and Residences Coachella Valley.
Shi contacted representatives of Dakota Development, a real estate development subsidiary of the Los Angeles-based lifestyle hospitality company SBE Entertainment, about using SBE’s “Hyde” brand, which was a luxury hotel and nightlife brand owned by SBE. Through these discussions, Shi reached an agreement with Dakota Development that the Hyde Development would be developed under SBE’s brand name “Hyde.”
Hyde Resorts was supposed to be a 207-unit luxury condominium and hotel complex with 95,000 square feet of conference facilities, a pool, spa, fitness center and other amenities.
Shi solicited investments in the Hyde complex from victims, the majority of whom were Chinese investors, by giving sales presentations at hotels and contacting victims over WeChat, a Chinese messaging, social media and mobile payment application.
To induce the victims to invest in the Hyde complex, Shi made false and fraudulent statements to them, including that their money only would be used to fund the Hyde development project, even though she intended to use victims’ money for her own personal expenses.
Relying on Shi’s false and fraudulent statements, victims wired money to her, mostly from China. For example, in October 2016, one victim wired $50,000 from a bank account in China to a Shi-controlled bank account in Los Angeles. In total, approximately $22,833,441 was transferred from bank accounts in China to Shi-controlled bank accounts.
After Shi received the victim funds, she spent nearly $300,000 in victim funds to purchase two luxury cars. She also spent approximately $2.2 million in victim funds at a company that provided luxury travel and concierge services. Shi also admitted spending almost $800,000 in victim funds at a full-service styling agency in Beverly Hills, as well as hundreds of thousands of dollars of victims’ money on high-end clothing designers, restaurants and other stores.
United States District Judge R. Gary Klausner has scheduled a March 28 sentencing hearing, at which time Shi will face a statutory maximum sentence of 20 years in federal prison. Shi has been in federal custody since August 2020.
The FBI investigated this matter.
Assistant United States Attorneys Alexander C.K. Wyman and Alexander B. Schwab of the Major Frauds Section are prosecuting this case.
Ventura County Man Who Headed Tribal Police Agency Pleads Guilty to Pocketing $300,000 Generated from Sale of Fake BadgesRead the Press Release
SAN DIEGO – A Camarillo man pleaded guilty this afternoon to a federal theft offense, admitting that he stole more than $300,000 while serving as the chief of a tribal police department in southeastern San Diego County.
Anthony Reyes Vazquez, 49, who was head of the Manzanita Tribal Police Department from 2012 to 2018, pleaded guilty to one count of theft concerning programs receiving federal funds.
The Manzanita Tribal Police Department was not recognized by the Bureau of Indian Affairs or the State of California as a police department, and it did not have the authority to enforce federal or state laws, on or off the reservation.
According to a plea agreement filed in United States District Court in San Diego, Vazquez sold fake badges to buyers who made substantial payments to become members of the Manzanita Tribal Police Department and have privileges available to law enforcement officers, such as carrying concealed weapons.
Vazquez admitted that he and other tribal police officers recruited wealthy individuals in the Los Angeles area to become members of the Manzanita Tribal Police Department. These wealthy individuals often had little to no law enforcement experience before joining the police department. Vazquez and his recruiters asked these wealthy individuals to make large payments – ranging from $5,000 to $100,000 – in exchange for membership in the Manzanita Tribal Police Department, which included a badge purporting to allow the holder to carry a concealed weapon. Members of the “VIP Group” were not expected to perform any law enforcement services for the police department and many never visited the reservation which is home to the Manzanita Band of the Kumeyaay Nation.
As a result of this recruiting effort, dozens of individuals paid the recruiters and, in return, these individuals were made members of the Manzanita Tribal Police Department. Vazquez paid cash kickbacks or commissions to the recruiters and paid himself approximately $2,000 per month as purported reimbursement for travel expenses from his home to the reservation. In addition, Vazquez kept approximately $300,000 worth of donations from the VIP Group, which Vazquez admitted should have instead been given to the Manzanita Band. Vazquez did not disclose to the Manzanita Band that he was selling membership to the Manzanita Tribal Police Department to unqualified members in exchange for large sums of money or that he was paying himself out of money collected by recruiters.
As part of his plea, Vazquez also admitted that he suffered a felony drug conviction in 1992 and illegally possessed approximately two dozen firearms while serving as Chief of Police of the Manzanita Tribal Police Department.
Vazquez is scheduled to be sentenced by United States District Judge Gonzalo P. Curiel on January 24, 2022, at which time he will face a statutory maximum sentence of 10 years in federal prison.
The FBI investigated this matter with substantial assistance from the Los Angeles Police Department.
Assistant United States Attorneys Frances S. Lewis of the General Crimes Section and Andrew Galvin of the Southern District of California are prosecuting this case.
San Marino Man Who Drove Truck into Demonstrators Sentenced to Federal Prison for Committing Various Firearms OffensesRead the Press Release
LOS ANGELES – A San Gabriel Valley man who last year drove his truck into a crowd of demonstrators in Pasadena was sentenced today to one year and one day in federal prison for violating multiple firearms laws, including illegally obtaining and transporting weapons.
Benjamin Jong Ren Hung, 29, a San Marino resident who also has a home in Lodi, was sentenced by United States District Judge Stephen V. Wilson, who also ordered Hung to pay a $10,000 criminal fine and perform 120 hours of community service.
Hung pleaded guilty on May 12 to a superseding information charging him with 11 felonies: one count of conspiracy, two counts of transporting and receiving firearms across state lines, five counts of making false statements during the purchase of firearms and three counts of possession of unregistered firearms.
From July 2014 to August 2018, Hung participated in a multi-year conspiracy to make false statements to firearms dealers in Oregon and to illegally transport those firearms to California. Hung provided cash to a co-conspirator in Oregon to buy handguns for Hung and to falsely state that the co-conspirator was the actual buyer, rather than Hung. The co-conspirator then delivered the firearms to Hung in California. Hung admitted in his plea agreement that he engaged in the scheme to obtain the firearms and “evade California’s firearms registration laws.”
Hung also made false statements to firearms dealers in Washington in connection with his purchase of four rifles and one shotgun in March 2020. When he purchased the firearms, Hung falsely attested that he was a resident of Washington, rather than California, which was material because, as Hung admitted in the plea agreement, “the firearms dealers were not legally permitted to sell firearms to California residents.” Hung illegally transported those firearms into California and illegally possessed three unregistered short-barreled semiautomatic rifles, which authorities seized from his residence in Lodi in September 2020.
In court documents, Hung admitted to bringing one of his illegally obtained firearms, a Glock 26 9mm handgun, to counterprotest in Old Town Pasadena against a group who had gathered on May 31, 2020, to protest unequal treatment of minorities by police, including the murder of George Floyd at the hands of a Minneapolis Police officer. Hung, who was driving a customized Dodge pickup truck with license plates reading “WAR R1G,” accelerated toward an intersection where the protest was taking place, sounded a train horn installed on the truck, came to a stop, and then continued through the intersection. As he drove past the demonstrators, Hung caused the truck to emit a large amount of exhaust in what is sometimes called “coal rolling.” No protesters were injured during the incident.
Judge Wilson described Hung as “looking for trouble” when he went to the protests and determined that while Hung did not intend to endanger anyone’s life, he engaged in “threatening” behavior designed to “intimidate” and “create fear.”
Local police detained Hung following his confrontation with the demonstrators, and the FBI then took over the investigation.
“Over a seven-year period, in preparation for what he described as an upcoming ‘civil war’…Benjamin Hung illegally accumulated a massive cache of weapons,” prosecutors wrote in a sentencing memorandum. “[Hung’s] motives were clear: his messages to friends reflected increasingly violent rhetoric, including his desire not to defend himself, but to seek out and ‘eradicate’ his perceived enemies.”
The FBI’s Los Angeles Joint Terrorism Task Force, FBI civil rights squads and the Pasadena Police Department investigated this matter.
Assistant United States Attorneys Frances S. Lewis and David T. Ryan, both of the General Crimes Section, prosecuted this case.
Former Lawyer Agrees to Plead Guilty to Conning Clients via Sham Court Documents Containing Forged Judge SignaturesRead the Press Release
LOS ANGELES – A former California lawyer has agreed to plead guilty to a fraud charge, admitting he lied to clients about winning cases and deceiving them with bogus documents, some with the forged signatures of judges.
Matthew Charles Elstein, 51, of Redondo Beach, agreed to plead guilty to one count of wire fraud in a plea agreement filed this afternoon in United States District Court. An arraignment in this case is scheduled for October 28.
Elstein was a licensed California attorney from December 1994 until the State Bar of California ordered him inactive in March 2019. According to his plea agreement, from June 2015 to July 2018, Elstein engaged in a scheme to defraud his clients by claiming he obtained favorable legal resolutions for them, when in fact the favorable resolutions had never been obtained. In many cases, Elstein never initiated any legal action. Elstein also admitted to misappropriating funds by informing victims their fees were going into his client trust account, when in fact he directed them to deposit money into his personal bank account.
For example, in June 2016, Elstein falsely informed a corporate client that it had won a $52 million default judgment. He emailed the victim-client a fake court order that contained a judge’s forged signature. Having never actually filed a lawsuit on his client’s behalf, Elstein further misrepresented that the case was improperly under seal due to a United States Department of Justice investigation. To further his fraudulent scheme, Elstein presented his clients with a fake settlement agreement between the client and the United States Attorney’s Office for the Eastern District of California. It was not until the company reached out to that United States Attorney’s Office to authenticate the settlement agreement that it discovered that the agreement was a forgery.
Elstein also admitted to fabricating depositions in a federal case in Washington state in September 2015. Because these depositions were fake, no one appeared for them. Nonetheless, Elstein had a court stenographer present and made a formal record of the nonappearances. Elstein also billed the client for attending the fake depositions and his travel expenses to Seattle.
Elstein also falsely told the victim that he had obtained a $4.25 million judgment in the victim’s favor and provided the victim with a fake court order containing the forged signature of a judge. When the victim traveled to Seattle to collect the judgment, he was informed by the court that no such case existed.
In total, Elstein’s conduct resulted in losses of at least $358,855 to his victims.
Upon entering his guilty plea in this case, Elstein will face a statutory maximum sentence of 20 years in federal prison.
The FBI investigated this matter.
Assistant United States Attorney Agustín D. Orozco of the Public Corruption and Civil Rights Section is prosecuting this case.
U.S. Rep. Jeff Fortenberry Charged with Scheme to Deceive Federal Investigators Probing Illegal Campaign Contributions in 2016Read the Press Release
LOS ANGELES – A federal grand jury today charged U.S. Representative Jeff Fortenberry, who represents Nebraska’s 1st Congressional District, with concealing information and making false statements to federal authorities who were investigating illegal contributions made by a foreign national to the congressman’s 2016 re-election campaign.
Fortenberry, 60, of Lincoln, Nebraska, was named in an indictment that charges him with one count of scheming to falsify and conceal material facts and two counts of making false statements to federal investigators. Fortenberry has served in Congress since 2005.
The indictment alleges that Fortenberry repeatedly lied to and misled authorities during a federal investigation into illegal contributions to Fortenberry’s re-election campaign made by a foreign billionaire in early 2016. Gilbert Chagoury, a foreign national prohibited by federal law from contributing to any U.S. elections, arranged for $30,000 of his money to be contributed through other individuals (conduits) to Fortenberry’s campaign during a fundraiser held in Los Angeles, according to the indictment.
It is illegal for foreign nationals to make contributions to a federal campaign. It also is illegal for the true source of campaign contributions to be disguised by funneling the money through third-party conduits. And it is illegal for a federal candidate to knowingly receive foreign or conduit contributions. Chagoury entered into a deferred prosecution agreement with the United States Attorney’s Office in 2019 in which he admitted providing approximately $180,000 that was used to make illegal contributions to four different political candidates in U.S. elections. Chagoury also agreed to pay a $1.8 million fine and cooperate with federal authorities.
The co-host of the Fortenberry 2016 fundraiser, who is referred to in the indictment as “Individual H,” began cooperating with federal authorities in September 2016 and informed special agents with the FBI and IRS Criminal Investigation about the illegal contributions, the indictment states. In response, investigators began looking into whether the Fortenberry campaign received illegal conduit contributions, whether Fortenberry knew about illegal contributions – both foreign contributions and conduit contributions – at the 2016 fundraiser, whether Fortenberry knew about illegal foreign contributions from Chagoury, and whether Fortenberry had any direct or indirect communications with Chagoury in relation to the contributions made at the 2016 fundraiser.
In the spring of 2018, Fortenberry contacted Individual H about hosting another fundraiser. In a June 2018 call, Individual H told the congressman on multiple occasions that a Chagoury associate – Toufic Joseph Baaklini, who also entered into a deferred prosecution agreement with prosecutors – had provided him with $30,000 cash to route to Fortenberry’s campaign at the 2016 fundraiser, the indictment alleges. Individual H allegedly told Fortenberry that the money – which was distributed to other individuals at the fundraiser so the donations could be made under their names and avoid individual donor limits – “probably did come from Gilbert Chagoury.”
Despite learning of the illegal campaign contributions, Fortenberry did not file an amended report with the Federal Elections Commission, the indictment alleges.
The indictment alleges a scheme in which Fortenberry, after learning this information, “knowingly and willfully falsified, concealed, and covered up by trick, scheme, and device material facts” about the illegal campaign contributions.
As part of the scheme, Fortenberry allegedly made false and misleading statements during a March 23, 2019 interview with investigators who specifically told him it was a crime to lie to the federal government. The indictment alleges that Fortenberry falsely told investigators that he was not aware of Baaklini ever being involved in illegal campaign contributions, that the individuals who made contributions at the 2016 fundraiser were all publicly disclosed, and that he was not aware of any contributions to his campaign from a foreign national.
At a second interview on July 18, 2019 with federal investigators and prosecutors, Fortenberry allegedly made additional false statements, including denying he was aware of any illicit donation made during the 2016 fundraiser, denying that Individual H had told him Baaklini had provided the $30,000 cash at the 2016 fundraiser, and stating that he would have been “horrified” to learn about the illegal conduit contributions, according to the indictment.
During this second interview, Fortenberry also misleadingly stated he ended the June 2018 call with Individual H after that person made a “concerning comment,” when in fact Fortenberry continued to ask Individual H to host another fundraiser for his campaign, the indictment states.
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 three felony charges in the indictment each carry a statutory maximum penalty of five years in federal prison.
Through his attorney, Fortenberry has agreed to appear for an arraignment on Wednesday, October 20 in United States District Court in Los Angeles.
The FBI and IRS Criminal Investigation are investigating this matter.
This case is being prosecuted by Assistant United States Attorneys Mack E. Jenkins, Chief of the Public Corruption and Civil Rights Section, and Susan S. Har, also of the Public Corruption and Civil Rights Section.
Vermilion County Man Sentenced for Sexual Exploitation of a ChildRead the Press Release
URBANA, Ill. – A Hoopeston, Illinois, man, Dalton M.C. Burmeister, 27, was sentenced today to 30 years in federal prison, to be followed by 15 years of supervised release, for sexual exploitation of a child and trafficking in child pornography.
Burmeister was arrested on December 22, 2020, and charged by criminal complaint. According to the affidavit supporting the complaint, Burmeister exploited children under the age of six to engage in sexual activity and to create an image of that conduct. The affidavit further alleged that Burmeister trafficked images of child pornography with another unidentified individual.
During the sentencing hearing, Senior U.S. District Judge Michael M. Mihm commented on the egregiousness of Burmeister’s conduct, citing the explicit text messages he had sent regarding “vulnerable” and “trusting” children in his care. The judge said that the production of sexually explicit images of these young children was “bad enough” and stated that Burmeister had caused even more harm by sharing the images.
The indictment against Burmeister had charged him with four counts of sexual exploitation of a child, three counts of distribution of child pornography, and one count of receipt of child pornography, all in September 2020. Burmeister was also charged with possession of a cellular telephone containing child pornography in December 2020. He pleaded guilty to all counts in June 2021.
The aggregate 30-year sentence imposed by the judge consisted of concurrent sentences of thirty years’ imprisonment on each of the sexual exploitation counts, as well as concurrent sentences of 20 years’ imprisonment on each of the distribution, receipt, and possession counts; the judge also ordered that the 20-year sentences run concurrent to the 30-year sentences on the sexual exploitation counts.
The statutory penalty for each count of sexual exploitation of a child is 15 to 30 years in prison. For each count of distribution of child pornography and receipt of child pornography, the statutory penalty is five to 20 years in prison. For the possession of child pornography count, the statutory penalty is up to 20 years in prison. Each count carries a fine of up to $250,000.
Assistant U.S. Attorney Elly M. Peirson represents the government in the prosecution. The charges are the result of an investigation by the Illinois State Police and the Illinois Internet Crimes Against Children Task Force.
The case was brought as part of Project Safe Childhood, a nationwide initiative to combat child sexual exploitation and abuse launched in May 2006 by the Department of Justice. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Calabasas Doctor Sentenced to 14 Months in Federal Prison for Accepting Bribes as Part of Compounded Medication ConspiracyRead the Press Release
LOS ANGELES – A Calabasas physician was sentenced today to 14 months in federal prison for accepting nearly $800,000 in bribes and kickbacks as part of a conspiracy that unlawfully billed health insurers for compounded medication prescriptions.
Dr. Amir Friedman, 56, was sentenced by United States District Judge John F. Walter. Friedman pleaded guilty in October 2019 to one count of conspiracy to commit honest services mail and wire fraud, and to violate the Travel Act, a federal law that – among other things – forbids the use of the U.S. mail for the purpose of aiding bribery.
Friedman, a licensed anesthesiologist, violated the fiduciary duty he owed to his patients by accepting kickbacks and bribes for writing prescriptions for compounded medications for his patients.
Compounded drugs are tailor-made products doctors may prescribe when the Food and Drug Administration-approved alternative does not meet the health needs of a patient.
From August 2013 to May 2015, Friedman conspired with New Age Pharmaceuticals Inc., a Beverly Hills-based company, and a marketer – listed in court documents as “Marketer A” – to violate federal law. Insurance companies under the California Workers’ Compensation System reimbursed New Age for dispensing prescription drugs and other pharmaceuticals. Marketer A was paid commissions for facilitating the referral of compounded drug prescriptions.
Marketer A provided pre-printed prescription pads for compounded drugs to Friedman and offered Friedman kickbacks and bribes for each prescription he wrote. After Friedman wrote the kickback-tainted prescriptions, New Age dispensed the compounded drugs, billed insurance companies for reimbursement and shipped through the mail the compounded drugs to patients.
In total, Friedman accepted $788,140 in kickbacks and bribes – a sum he received in the form of approximately 28 check payments that represented illicit proceeds from the conspiracy. He admitted in his plea agreement that he was aware that the compounded drugs he prescribed were far more expensive than equivalents.
The FBI investigated this matter.
Assistant United States Attorney Poonam G. Kumar of the Major Frauds Section prosecuted this case.
Superseding Indictment Charges Mexican Mafia Member and Associates with Murdering Inmate at Federal Jail in Downtown L.A.Read the Press Release
LOS ANGELES – A federal grand jury today returned a superseding indictment charging three Pomona-area gang members and Mexican Mafia associates with murdering an inmate at the Metropolitan Detention Center (MDC) in downtown Los Angeles.
The superseding indictment alleges Jose Valencia Gonzalez, a.k.a. “Swifty,” 39, Carlos Gonzalez, a.k.a. “Popeye,” 38, and Juan Sanchez, a.k.a. “Squeaks,” 28, all of Pomona, killed the victim on June 28, 2020 at the direction of Mexican Mafia member Michael Lerma, a.k.a. “Big Mike,” 65, also of Pomona, who also is charged with the murder. The victim’s murder was ordered in retaliation for the victim’s failure to pay off a drug debt to the Mexican Mafia, according to the indictment.
These defendants previously were charged with conspiring to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act related to the Mexican Mafia’s control of the City of Pomona and surrounding areas, and included a separate conspiracy to murder, a kidnapping, and a carjacking. The superseding indictment alleges Lerma exercised control over, and extorted drug proceeds from, Latino street gangs in and around Pomona, as well as from inmates at Calipatria State Prison in Imperial County. Members of Lerma’s criminal enterprise also engaged in robberies, identity theft and fraud, drug trafficking, kidnapping, and other acts of violence, the indictment alleges.
The in-custody murder was committed while the defendants were in federal custody awaiting trial scheduled for April 12, 2022. In addition to the murder charges, the superseding indictment describes the enterprise’s takeover of MDC and seizing control of the drug trafficking within the facility. If convicted, these defendants would each face a statutory maximum sentence of life in federal prison or death. A decision whether to seek the death penalty will be made in the future.
This matter was investigated by the FBI’s Los Angeles Metropolitan Violent Crime Task Force in conjunction with the FBI’s San Gabriel Valley Safe Streets Task Force (SGVSSTF), which is comprised of agents and officers with the FBI, the Los Angeles County Sheriff’s Department, the Pomona Police Department, the El Monte Police Department, the Drug Enforcement Administration and the California Department of Corrections and Rehabilitation (CDCR). The Pomona Police Department is the sponsoring agency of the SGVSSTF and has been the headquarters for the task force since its inception in 2008.
Assistant United States Attorneys Max B. Shiner of the Violent and Organized Crime Section, and Shawn J. Nelson and Keith D. Ellison of the International Narcotics, Money Laundering, and Racketeering Section are prosecuting this case.
Tijuana Man Sentenced to Nearly 9 Years in Prison for Attempting to Buy Machine Guns, Grenades in Exchange for Fentanyl and HeroinRead the Press Release
LOS ANGELES – A former San Bernardino County resident was sentenced today to 105 months in federal prison for providing approximately 1 kilogram of fentanyl and 1 kilogram of heroin in exchange for machine guns, grenade launchers and a case of what he believed were six dozen live grenades.
Pedro Roberto Hernandez-Gomez, 32, formerly of San Bernardino and who was a resident of Tijuana, Mexico at the time of his arrest, was sentenced by United States District Judge André Birotte Jr. Hernandez-Gomez pleaded guilty on March 12 to one count of distribution of fentanyl.
In January 2020, Hernandez-Gomez agreed to provide narcotics in exchange for firearms to a person he believed was a drug customer, but who was in fact a source working with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Hernandez-Gomez provided 999.25 grams of heroin and 1,001.19 grams of fentanyl to the source and an undercover ATF agent.
In exchange for the narcotics, Hernandez-Gomez received three machine guns, two grenade launchers and one case of 72 inert grenades, which Hernandez-Gomez believed were actual grenades.
Hernandez-Gomez possessed these firearms despite having been previously convicted of a felony offense – possession with intent to distribute heroin – in federal court in Arizona in February 2014. He was sentenced to three years in federal prison for that offense.
“The distribution of illegal drugs poses a serious danger to the community, especially the distribution of fentanyl, a potent and powerful opioid,” prosecutors wrote in their sentencing memorandum. “Further concerning is that [Hernandez-Gomez] was providing this large quantity of drugs in exchange for dangerous firearms, that is, machine guns and grenade launchers.”
The ATF investigated this matter.
Assistant United States Attorney Ashley Fillmore of the General Crimes Section prosecuted this case.
Mark Ridley-Thomas Charged Along with Former University Dean in Federal Grand Jury Indictment Alleging Bribery and Fraud SchemeRead the Press Release
INDICTMENTLOS ANGELES – Longtime politician Mark Ridley-Thomas and the former dean of the School of Social Work at a university in Southern California were indicted today on federal corruption charges that allege a bribery scheme in which a Ridley-Thomas relative received substantial benefits from the university in exchange for Ridley-Thomas supporting county contracts and lucrative contract amendments with the university while he served on the Los Angeles County Board of Supervisors.
The 20-count indictment alleges that Ridley-Thomas, now a member of the Los Angeles City Council, conspired with Marilyn Louise Flynn, formerly a tenured professor and the dean of the university’s School of Social Work, who agreed to provide the Ridley-Thomas relative with graduate school admission, a full-tuition scholarship, a paid professorship, and a mechanism to funnel Ridley-Thomas campaign funds through the university to a non-profit to be operated by the relative.
In exchange, the indictment alleges, Ridley-Thomas supported contracts involving the Social Work School, including contracts to provide services to the Department of Children and Family Services (DCFS) and Probation Department, as well as an amendment to a contract with the Department of Mental Health (DMH) that would bring the school millions of dollars in new revenue.
Ridley-Thomas, 66, of Los Angeles, and Flynn, 83, also of Los Angeles, were informed of the indictment this afternoon and have agreed to appear for their arraignments in United States District Court in the coming weeks.
“This indictment charges a seasoned lawmaker who allegedly abused the public's trust by taking official actions to benefit his family member and himself,” said Acting U.S. Attorney Tracy L. Wilkison. “The corrupt activities alleged in the indictment were facilitated by a major university’s high-ranking administrator whose desire for funding apparently trumped notions of integrity and fair play. Public corruption cases are among the most important matters we pursue, and we will continue to investigate and prosecute whenever public officials and others entrusted with taxpayer funds break the law.”
“This investigation should send a message to public officials that government contracts are not for sale,” said Kristi K. Johnson, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “This indictment reaffirms the FBI’s commitment to rooting out corruption by holding accountable those who abuse the trust of the people they serve and who exploit their powerful positions to obtain benefits at the expense of taxpayers.”
The indictment outlines a scheme in 2017 and 2018 in which then-supervisor Ridley-Thomas sought benefits from Flynn and university officials to benefit his close relative – described as “MRT Relative 1” in the indictment – at a time when MRT Relative 1 was the subject of an internal sexual harassment investigation in the California State Assembly, likely to resign from elected office, and significantly in debt. Ridley-Thomas allegedly wanted to help secure paid employment for his relative to minimize any public fallout for them both in the wake of the sudden resignation from office. Meanwhile, the Social Work School was facing a multimillion-dollar budget deficit, which threatened the school’s viability as well as Flynn’s position and reputation as the school’s longtime dean, according to the indictment.
As part of the bribery scheme, Ridley-Thomas and Flynn allegedly took steps “to disguise, conceal, and cover up the bribes, kickbacks, and other benefits defendant Ridley-Thomas and MRT Relative 1 received,” which included concealing the official acts Ridley-Thomas agreed to perform and did perform in exchange for the financial benefits. The pair also concealed, according to the indictment, the true purpose of the money funneled to MRT Relative 1’s nonprofit through the university, which also violated multiple university policies regarding the funding of nonprofits.
Within weeks of Ridley-Thomas contacting Flynn in May 2017 about his relative wanting a postgraduate degree from the university, Flynn began a campaign to secure both university admission and a full scholarship for the relative. Flynn wrote in an email that she “intend[ed] to open every door for [MRT Relative 1],” whom she noted was closely related to the then-supervisor, the indictment alleges. When a university official said Ridley-Thomas had “lots of discretionary money” and should give the university “$1M each year for three years,” according to the indictment, Flynn responded that she and another university official intended to offer the relative a full scholarship, characterizing the exchange as a “full scholarship for our [Social Work School] funds.”
During a June 2017 meeting, Ridley-Thomas and Flynn allegedly reached a quid pro quo agreement, which Flynn later memorialized in a confidential letter she had hand-delivered to Ridley-Thomas. The indictment alleges that Flynn’s letter detailed her expectations that Ridley-Thomas would steer new contracts with DCFS and Probation to the Social Work School and secure a lucrative amendment to an existing Telehealth-DMH contract. With the new amendment, Flynn expected the Telehealth contract to generate approximately $9 million per year for Flynn’s Social Work School.
In exchange for Flynn’s efforts to help MRT Relative 1, the indictment alleges that Ridley-Thomas took a series of official actions, including voting in August 2017 to approve a motion to establish a partnership between the county and Social Work School and voting in October 2017 to approve a motion, related to “Probation University,” that would create a new county payment source for the school. Flynn told university officials in emails that she was “very happy to see that [defendant Ridley-Thomas] was as good as his word” and that he was “really trying to deliver,” the indictment alleges.
In the fall of 2017, Ridley-Thomas and MRT Relative 1 began soliciting from Flynn and other university officials a paid professorship for MRT Relative 1 while concealing that MRT Relative 1 was the subject of a sexual harassment investigation. By December 2017, in conjunction with speculation that MRT Relative 1 could be forced out of office, Ridley-Thomas and his relative increased their efforts to secure a paid faculty position for MRT Relative 1, efforts that included Ridley-Thomas exerting pressure on another high-ranking public official to support the Telehealth contract amendment.
On December 14, 2017, about an hour after Ridley-Thomas emailed Flynn saying the high-ranking public official was “ready to go,” Flynn expedited the relative’s enrollment at the university, instructing that the admission should be given the “highest priority,” according to the indictment. Flynn also agreed, despite the school’s multimillion-dollar budget deficit, to tap the Social Work School’s endowed funds to award a scholarship. At Flynn’s direction, MRT Relative 1 received a full scholarship worth $26,000 for the 2018 spring and summer terms.
The day after learning that the high-ranking public official was “ready to go,” Flynn also endeavored to quickly secure the paid professorship, even though MRT Relative 1’s dual student-faculty status would violate university policy. On December 15, 2017, Flynn allegedly sent an “urgent” email to a university official, urging the official to get the offer letter “out before the holidays” to MRT Relative 1 “in the interests of showing MRT [defendant Ridley-Thomas] that we can deliver.” The university thereafter offered MRT Relative 1 the paid teaching position with a salary of $50,000.
When MRT Relative 1 received an email on February 13, 2018 indicating that the usual hiring process had been waived for his paid professorship, MRT Relative 1 forwarded the email to Ridley-Thomas, who then emailed Flynn the same day to discuss the “Probation Reform motion.” Days later, when Flynn emailed Ridley-Thomas to request a profitable amendment to the Telehealth-DMH contract, Ridley-Thomas responded to Flynn: “Your wish is my command.”
In addition to obtaining university admission, a full scholarship and the paid faculty position, Ridley-Thomas also sought to help his relative become the director of a nonprofit. In December 2017, Ridley-Thomas donated $100,000 in campaign funds to a fiscal sponsor (Fiscal Sponsor A) supporting the nonprofit MRT Relative 1 was planning to head (Nonprofit A). Concerned about the optics of a politician donating campaign funds to benefit the politician’s relative, Fiscal Sponsor A refunded the $100,000.
MRT Relative 1 then abandoned efforts to head Nonprofit A, founded a new nonprofit (Nonprofit B) with a new fiscal sponsor (Fiscal Sponsor B), and began raising money for Nonprofit B in order to take a salary, obtain healthcare benefits and hire staff. According to the indictment, while soliciting official action from Ridley-Thomas during a meeting on April 26, 2018, Flynn agreed to funnel $100,000 from the Mark Ridley-Thomas Committee for a Better L.A. through the university and Social Work School to Fiscal Sponsor B for the benefit of Nonprofit B and, in turn, MRT Relative 1. Around this time, Flynn allegedly told a university official that the school would get the Telehealth contract but that she had to do a “favor” to get it.
After the Ridley-Thomas campaign funds were transferred through the university to Fiscal Sponsor B, Ridley-Thomas voted on July 31, 2018 in favor of the amendment to the school’s Telehealth agreement that would sustain the program for an additional year and was consistent with the terms Flynn previously requested of Ridley-Thomas.
Both Ridley-Thomas and Flynn are charged with one count of conspiracy, and each defendant is charged with one count of bribery. The indictment also charges both defendants with two counts of “honest services” mail fraud and 15 counts of “honest services” wire fraud.
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 conspiracy count alleged in the indictment carries a statutory maximum penalty of five years in federal prison. Each bribery count carries a maximum possible sentence of 10 years. Each of the mail fraud and wire fraud charges carry a statutory maximum penalty of 20 years.
The FBI is investigating this matter.
Assistant United States Attorneys Ruth C. Pinkel and Lindsey Greer Dotson of the Public Corruption and Civil Rights Section are prosecuting this case.
San Gabriel Valley Man Sentenced to 3 Years in Federal Prison for Scheming to Launder Drug Money via ‘Black Market Peso Exchange’Read the Press Release
LOS ANGELES – A West Covina man was sentenced today to 36 months in federal prison for laundering more than $900,000 in drug money over a two-year period via a “Black Market Peso Exchange” for Mexico-based drug traffickers.
Oscar Sanchez, 52, was sentenced by United States District Judge Virginia A. Phillips. Sanchez pleaded guilty in November 2020 to a single-count information charging him with concealment money laundering.
A Black Market Peso Exchange scheme allows drug traffickers who have their proceeds in U.S. dollars to convert it to a different currency, such as Mexican pesos, via the sale of goods shipped across international borders.
From 2017 to 2019, Sanchez, who worked in downtown Los Angeles, laundered drug money from the United States to Mexico. According to court documents, co-conspirators based in Mexico told drug traffickers to deliver drug proceeds to Sanchez. The drug traffickers contacted Sanchez and used coded language to arrange the delivery of money. Sanchez met with the traffickers at his place of business in Los Angeles and at other locations where he received the money. Using coded language, Sanchez reported to his co-conspirators the amount of money received.
The co-conspirators directed Sanchez to provide the money to third parties in the United States and pay invoices at Los Angeles-based businesses to conceal the source of the money. The U.S.-based third parties who received the money directed payments to be made to co-conspirators in Mexico, completing the money laundering cycle.
For example, in August 2018, a California-based drug trafficker told Sanchez he was speaking on a Mexico-based co-conspirator’s behalf and that he was instructed to deliver something, according to the prosecution’s sentencing memorandum. Sanchez asked if he would be delivering “merchandise” – coded language for money – and agreed to meet. Sanchez later met with the trafficker in Los Angeles, where he received the U.S. dollars in cash.
Shortly after the meeting, a Mexico-based co-conspirator called Sanchez and asked him if someone stopped by to take some “samples” from him. Sanchez said a total of 34 “bras” – coded language for $34,000 – was taken. Sanchez knew the money he received was drug proceeds.
In total, Sanchez laundered at least $914,641 in drug proceeds.
“By assisting members of Mexico-based narcotics trafficking organizations move their proceeds to Mexico, [Sanchez] contributed to the cycle of narcotics distribution that causes substantial harm to communities in the United States,” prosecutors wrote in a sentencing memorandum. “[Sanchez’s] use of coded language during dozens of intercepted calls demonstrate that he was deeply involved in the conduct.”
The FBI, the Drug Enforcement Administration and IRS Criminal Investigation investigated this matter.
Assistant United States Attorneys Joseph T. McNally and Chelsea Norell of the Violent and Organized Crime Section prosecuted this case.
Israeli National Sentenced to 30 Years in Federal Prison for Forcing Dozens of Girls to Produce Child PornographyRead the Press Release
LOS ANGELES – An Israeli man was sentenced today to 360 months in federal prison for blackmailing dozens of girls into producing child pornography for him.
Elad Gaber, 39, was sentenced by United States District Judge Philip S. Gutierrez, who also ordered him placed on lifetime supervised release once he completes serving his prison sentence. Gaber pleaded guilty on May 7 to one count of use of a facility of interstate commerce to induce a minor to engage in criminal sexual activity.
Since at least 2010, Gaber executed a systematic “sextortion” scheme on dozens of victims, beginning with obtaining compromising videos of the girls. Gaber located victims through social media and found some type of “embarrassing” material of them, usually suggestive or nude photos.
He would then locate the victim on Facebook, copy her contact list, and threaten to release her compromising video to her entire contact list – often including her parents and schoolmates – if she did not live-stream sex acts according to a detailed script.
If the victims did not immediately comply, Gaber blackmailed them by sending them screenshots of the consequences of noncompliance, often either of a prewritten, but unsent, message to those close to the girls with the embarrassing material attached or the aftermath for previous victims where he had sent the material.
For those who complied, Gaber would demand the girl perform the script on herself over a video chat while he gave live feedback and criticism.
For several victims, Gaber used the material from the cam sessions as further material with which to blackmail them. If a victim refused to do as he demanded, Gaber would vengefully distribute her prior compromising material to some of her social media contacts, which often included the victims’ parents.
In 2014, a federal grand jury in Los Angeles indicted Gaber after a victim in Southern California reported him to law enforcement. Israel extradited Gaber to the United States last year to face criminal charges in this case.
In court today, some of Gaber’s victims spoke of the emotional impact they suffered from his actions, which led for some to substance abuse, suicide attempts, and lost educational and employment opportunities. Several victims also told the court that despite the trauma, they have managed to overcome what happened to them. As one victim concluded her statement today in court, she told Gaber, “Not only am I a victim, but I am a survivor.”
The FBI investigated this matter.
Assistant United States Attorney Catharine A. Richmond of the Violent and Organized Crime Section prosecuted this case. The Israeli authorities and the Justice Department’s Office of International Affairs provided substantial assistance in securing the arrest and extradition from Israel.
Former Gardena Police Officer Again Found Guilty of Operating Unlicensed Firearms BusinessRead the Press Release
LOS ANGELES – At the conclusion of a second trial prompted by an earlier conviction being overturned, a former Gardena Police officer has been found guilty of federal charges for scheming to purchase “off-roster” firearms not available to the general public and then illegally reselling the firearms for profit.
A federal jury on Thursday convicted Edward Yasushiro Arao, 51, of Eastvale, of conspiracy to engage in the business of dealing firearms without a license and a substantive count of engaging in an unlicensed firearms business.
According to the evidence presented during a four-day trial, Arao and his co-conspirator, former Gardena Police officer Carlos Fernandez, 46, of Norwalk, exploited their positions as police officers to operate an illegal gun-selling business.
As part of the scheme, Arao purchased “off-roster” firearms – all Colt .38 Super-caliber handguns that were not available to the general public, but which could be legally purchased by law enforcement officers – through Ronin Tactical Group, a federal firearms licensee that Arao owned and operated. Arao then transferred the guns to himself individually from the inventory of Ronin Tactical Group and re-sold 41 of these weapons to non-law enforcement officers. Similarly, Fernandez obtained multiple “off-roster” weapons, which he re-sold to the general public through Ronin Tactical Group. Through messages on Instagram and via other means, Arao and Fernandez negotiated the prices and terms of firearm sales, and then delivered the guns and accepted payment, often in cash.
In a previous trial in November 2019, a federal jury found Arao guilty of the same two felony charges and found Fernandez guilty of conspiracy, selling firearms to a convicted felon, engaging in an unlicensed firearms business, and making false statements in federal firearms licensing paperwork.
In March 2020, United States District Judge S. James Otero sentenced Fernandez to 33 months in federal prison. At the same time, Judge Otero ordered a new trial for Arao after determining the two defendants should not have been tried together.
Arao is scheduled to be sentenced on January 21, 2022 by United States District Judge Philip S. Gutierrez, who took over the case after Judge Otero retired. At sentencing, Arao will face a statutory maximum sentence of 10 years in federal prison.
Previously in this case, six other defendants who illegally purchased firearms from Arao and Fernandez pleaded guilty and were sentenced, with two of those defendants being ordered to serve time in federal prison.
The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated this case. The Gardena Police Department provided its full cooperation during the investigation.
Assistant United States Attorneys Veronica Dragalin and Cassie D. Palmer of the Public Corruption and Civil Rights Section are prosecuting this case.
California Man Sentenced to 15 Months in Federal Prison for Scheming to Defraud Afghan Government on U.S.-Funded ContractRead the Press Release
LOS ANGELES – A former Orange County resident has been sentenced to 15 months in prison for his role in a scheme to defraud the government of Afghanistan out of more than $110 million in funds provided by the U.S. Agency for International Development (USAID) to construct an electrical grid in Afghanistan.
Saed Ismail Amiri, 38, who now lives in the Northern California community of Granite Bay, but who resided in Irvine at the time of the offense, was sentenced on Tuesday by United States District Judge Stanley Blumenfeld Jr. after pleading guilty in April to one count of wire fraud.
According to court documents, Amiri was at various times either the owner or senior consultant of Assist Consultants Inc. (ACI). In or around January 2015, USAID, in connection with the U.S. effort to assist Afghanistan and its people, authorized the national power utility of Afghanistan, Da’ Afghanistan Breshna Sherkat (DABS), to solicit bids on a U.S.-funded contract to construct five electric power substations. Bids were sought only from companies that had substantial experience building electric power substations. Specifically, the contract criteria required bidders, such as ACI, to have previously worked on two electric substations of 220 kilovolts or more.
In 2015 and 2016, Amiri, ACI employees, and others engaged in a scheme to obtain the contract by submitting a false work history and fraudulent supporting documents in an effort to deceive DABS into believing that ACI met the required contract criteria. In July 2015, ACI submitted a bid on the contract for $112,292,241, which underbid its competitors by more than $20 million. In the bid, ACI stated that it had worked as a subcontractor to a prime contractor on two 220 kilovolt substations for a cement factory in Uganda and a textile company in Nigeria. In fact, the alleged prime contractor was a fictitious company that ACI had invented and controlled, ACI had never worked to build a substation in Africa, and neither the Ugandan cement factory nor the Nigerian textile company existed.
In February 2016, after Amiri had returned to Southern California and after DABS had requested supporting documents to verify ACI’s work history, Amiri sent emails to co-conspirators, some of which advised that some of them would need to go to Uganda and Nigeria to obtain false documents to respond to DABS.
After again leaving the United States, Amiri emailed DABS documents he knew were false and altered, including ACI’s purported subcontract to work on the Ugandan substation, photographs, false bank records, and a bogus letter purporting to be from a Ugandan government official.
After submitting the fake records to DABS, Amiri met with U.S. law enforcement at the U.S. Embassy in Afghanistan and falsely stated, among other things, that he had learned the prior month that ACI had bid on the contract. Shortly thereafter, Amiri withdrew ACI’s bid. In a subsequent interview with law enforcement, Amiri also falsely stated that another ACI employee had submitted the false documents to DABS, when in truth and in fact, Amiri had emailed the false documents himself.
The Special Inspector General for Afghanistan Reconstruction (SIGAR) and USAID’s Office of Inspector General investigated this case.
Assistant United States Attorney Jeff Mitchell of the Major Frauds Section and Justice Department Trial Attorney Matt Kahn of the Criminal Division’s Fraud Section prosecuted the case
Pharmacist Sentenced to Nearly 6 Years in Prison for Multimillion-Dollar Compounded Medicine Scam that Defrauded Health Care PlansRead the Press Release
LOS ANGELES – An Orange County pharmacist has been sentenced to 70 months in federal prison for submitting more than $13 million in claims for medically unnecessary compounded medication prescriptions, the Justice Department announced today.
Thu Van Le, 42, a.k.a. “Tony Le,” of Placentia, was sentenced Monday by United States District Judge R. Gary Klausner.
In addition to the prison term, Judge Klausner ordered Le to pay $10,982,759 in restitution to Tricare, the U.S. military’s managed health care plan, and $768,488 in restitution to Amplan, Amtrak’s employee health care benefit plan.
Le, a pharmacist who owned TC Medical Pharmacy in Corona, pleaded guilty on July 12 to one count of health care fraud.
From March 2015 to December 2016, Le’s pharmacy submitted more than $13 million in total claims to Tricare and AmPlan, against which Tricare paid $10,982,759 and AmPlan paid $768,488. Le, in turn, paid so-called “marketers” handsome kickbacks of up to 50 percent of the Tricare reimbursements.
The marketers used personal and insurance information to generate fraudulent prescriptions for compounded medications, according to court documents. Marketers who participated in the scheme solicited beneficiaries of the health plans through misleading cold calls that promised free compounded medications. In some cases, beneficiaries were not contacted at all and simply received expensive medications that they did not order.
Compounded drugs are tailor-made products doctors may prescribe when the Food and Drug Administration-approved alternative does not meet the health needs of a patient.
Le agreed to be bound by Tricare and AmPlan rules for reimbursement of claims for their beneficiaries. Tricare and AmPlan required that medications be medically necessary, that beneficiaries be examined by physicians, and that Le’s pharmacy collect co-payments. The prescriptions were supposed to be for unique patient needs, but they instead were formulated to maximize reimbursements and were prepared on an assembly-line basis.
The Defense Criminal Investigative Service, the FBI, IRS Criminal Investigation, Amtrak’s Office of Inspector General, the Office of Personnel Management’s Office of Inspector General, the United States Department of Labor – Employee Benefits Security Administration, the Department of Health and Human Services, and the California Department of Insurance investigated this matter.
Assistant United States Attorney Mark Aveis of the Major Frauds Section prosecuted this case.
San Gabriel Valley Man Sentenced to 5 Years in Federal Prison for Role in Conspiracy to Sell Counterfeit Laptop Computer BatteriesRead the Press Release
LOS ANGELES – A Chinese national who participated in a multimillion-dollar scheme to manufacture, ship and market counterfeit laptop computer batteries and other electronics made in China was sentenced today to 60 months in federal prison.
Zoulin “Allen” Cai, 30, of La Puente, was sentenced this morning by United States District Judge John F. Walter, who also ordered the defendant to pay $9,227,543 in restitution and a $25,000 fine.
Cai pleaded guilty on June 29 to one count of conspiracy to commit wire fraud and mail fraud and one count of aggravated identity theft.
Cai was a member of a conspiracy that imported batteries, labels for batteries in laptop computers, cellphones and other electronics from China to the United States. Cai then sold and shipped the counterfeit batteries to unsuspecting buyers via eBay and Amazon, falsely advertising them as brand name, genuine, original or OEM (original equipment manufacturer) products. Those batteries bore counterfeit trademarks of companies such as Apple, Dell, HP and Toshiba, as well as counterfeit certification marks of UL, a company that tests and certifies the safety of electronic products.
“Counterfeit lithium-ion batteries have significant safety risks,” prosecutors wrote in a sentencing memorandum filed with the court. “The batteries…distributed by [Cai] frequently lacked internal safeguards, resulting in a significant risk of fire, explosion, and danger to human life and safety.”
Co-conspirators in China packaged counterfeit batteries and electronics and shipped them to the United States, sometimes covering the trademarks with black tape or a similar material, so that a quick inspection of the items by customs officials would not reveal the trademark. The counterfeit batteries were imported, sold, and shipped from Cai-controlled warehouses in La Puente.
When federal authorities executed a search warrant at Cai’s warehouse In December 2019, they discovered approximately 44,000 batteries, as well as approximately 175,000 labels bearing the counterfeit marks of multiple companies.
Judge Walter today found that the loss resulting from Cai’s conduct was more than $9.5 million.
Homeland Security Investigations investigated this matter and was assisted in this investigation by the brand-holding companies.
Assistant United States Attorneys Khaldoun Shobaki of the Cyber and Intellectual Property Crimes Section and Julia S. Choe of the General Crimes Section prosecuted this case.
Robber Who Donned Medical Masks During String of Heists that Targeted Pharmacies Sentenced to over Nine Years in Federal PrisonRead the Press Release
RIVERSIDE, California – A Riverside County man with a three-decade history of crimes was sentenced this afternoon to 110 months in federal prison for a month-long robbery spree of pharmacies in the Inland Empire while wearing medical masks.
David Anthony Battle, 50, of Moreno Valley, was sentenced by United States District Judge Jesus G. Bernal after pleading guilty on March 25 to six felony counts of interference with commerce by robbery (Hobbs Act robbery).
“In this case, [Battle] exploited a public health crisis by robbing essential businesses while concealing his face behind a medical mask,” prosecutors wrote in a sentencing memorandum filed with the court.
According to court documents, from July 6 through August 10, 2020, Battle robbed six pharmacies – Walgreens, CVS, and Rite Aid outlets – in Moreno Valley, Colton and San Bernardino. He also attempted to rob two other Moreno Valley pharmacies.
During each incident, Battle wore similar clothing – including medical masks covering his nose and mouth – and brandished what appeared to be a handgun, Battle admitted in court. He then demanded that money from the cash register be placed in a bag and handed over.
When he was arrested during an attempted robbery of a Moreno Valley Walgreens, Battle was carrying a black BB gun with labeled with “Glock” logos on the barrel and the grip, court documents state.
Battle netted $5,453 in illicit gains from the robberies, more than half of which came from a July 6 robbery of a Walgreens store in Moreno Valley.
Since 1989, Battle has sustained 46 felony convictions and has been sentenced to a total of 66 years of incarceration, “and his history shows that he has been incapable of rehabilitation,” according to the sentencing memo. Prosecutors noted that Battle previously has been found guilty of violent crimes, including a 1994 conviction for false imprisonment by violence while impersonating an officer – one of seven convictions where his conduct involved impersonating a police officer or fire official.
“Although he gained thousands of dollars through his robberies, the traumatic impact of [Battle]’s crimes is much more consequential than his selfish monetary gains,” according to the sentencing memo. “Indeed, though it is impossible to quantify the true psychological and mental harms caused by [his] crimes – the medical expenses for just two of the victims has already reached $29,000. That amount reflects a fraction of the harm the victims have suffered.”
The FBI, the Riverside County Sheriff’s Department, the San Bernardino Police Department, and the Colton Police Department investigated this matter.
Assistant United States Attorney Peter H. Dahlquist of the Riverside Branch Office prosecuted this case.
Beverlywood Man Pleads Guilty to Securities Fraud, Admitting Massive Ponzi that Falsely Claimed to License Foreign Film RightsRead the Press Release
LOS ANGELES – A Los Angeles man pleaded guilty this afternoon to a federal securities fraud charge and admitted operating a Ponzi scheme that raised at least $650 million with bogus claims that investor money would be used to acquire licensing rights to films that HBO and Netflix purportedly had agreed to distribute abroad.
Zachary Joseph Horwitz, 34, who resides in the Beverlywood neighborhood of Los Angeles, admitted his fraudulent scheme has caused more than $230 million in losses.
Horwitz pleaded guilty before United States District Judge Mark C. Scarsi, who scheduled a sentencing hearing for January 3, 2022. When he is sentenced, Horwitz will face a statutory maximum sentence of 20 years in federal prison.
Over the course of about five years, Horwitz used his company – 1inMM Capital LLC, which purported to be a film distribution company – to solicit investors with false claims their money would be used to purchase regional distribution rights to films and then would generate profits by licensing the rights to online platforms such as Netflix and HBO.
The scheme began in 2014, when groups of private investors began entering into hundreds of six- and 12-month promissory notes with 1inMM Capital based on Horwitz’s statements. The funds supplied under each note were supposed to provide money for 1inMM Capital to acquire the rights to a specific film. The promissory notes guaranteed a specified payment on a specified maturity date, as well as the specified amount to be paid at maturity, which included investment returns ranging from 25 percent to 45 percent.
“However, as [he] then knew, his representations concerning 1inMM Capital’s business activities and the promissory notes themselves were false and deceptive because 1inMM Capital generally did not and would not acquire or possess the film distribution rights for the films specified as collateral in the promissory notes, and 1inMM Capital did not and would not enter into any distribution agreements with the online streaming platforms for these specified films…and the purported copies of the distribution agreements were fake,” Horwitz admitted in his plea agreement.
Instead of using the funds to acquire films and arrange distribution deals, Horwitz operated 1inMM Capital as a Ponzi scheme, using victims’ money to repay earlier investors and to fund his own lifestyle, including the purchase of his $6 million Beverlywood residence.
Investors started to complain after 1inMM Capital began defaulting on notes in 2019, court documents states. In response, Horwitz “falsely reassured investors that any missed payments on promissory notes were caused by the actions of the online streaming platforms, and that payment on the notes would resume,” he admitted in the plea agreement. To support these false claims, Horwitz sent the investors emails and text messages he falsely claimed had been sent to him by representatives of the online streaming platforms.
Horwitz defrauded five major groups of private investors, but these entities derived funds from more than 250 sub-investors. By late 2019, 1inMM Capital began defaulting on all of its outstanding promissory notes, according to the plea agreement, in which Horwitz admits that he owes investors more than $230 million and that his scheme has caused substantial financial hardship to at least five investors.
The FBI is investigating this matter. The U.S. Securities and Exchange Commission provided substantial assistance.
Assistant United States Attorneys Alexander B. Schwab and David H. Chao of the Major Frauds Section are prosecuting this case.
Owner of Trucking Companies Pleads Guilty to COVID-Relief Fraud, Tax Evasion and Conspiracy in Fatal Gas Tanker ExplosionRead the Press Release
LOS ANGELES – The owner of several Inland Empire-based trucking companies has pleaded guilty to five felony charges, admitting he engaged in an array of criminal conduct, including:
- ordering the illegal repair of a tanker that resulted in an explosion and the death of one his employees;
- committing tax evasion, which included failing to file income tax returns for six years; and
- fraudulently obtaining more than $667,000 in Paycheck Protection Program (PPP) COVID-19 pandemic relief funds while on bond awaiting trial.
Carl Bradley Johansson, 63, of Newport Beach, pleaded guilty late Wednesday to two felony counts in relation to the tank explosion – one count of conspiring to make illegal repairs on the cargo tanks and to defraud the United States Department of Transportation, and one count of welding without required certifications.
Johansson also pleaded guilty to one count of tax evasion, one count of conspiracy to commit bank fraud and one count of bank fraud. Johansson admitted that he committed the bank fraud offenses stemming from the PPP scam while he was on pretrial release in the gasoline tanker explosion case.
The Tanker Explosion Case
Johansson controlled and operated two Corona-based trucking companies: National Distribution Services, Inc. (NDSI), which operated from about 2009 through 2015, and NDSI’s successor company, Wholesale Distribution, Inc. (WDI), which does business as Quality Services. Johansson established NDSI following a 15-month federal prison sentence he served after one of his welders was killed in a similar tanker explosion in 1993. Johansson created WDI to take over NDSI’s operations so he could continue to operate cargo tanks that were ordered out of service after two more welding explosions at NDSI in 2012 and 2014, according to court documents.
Even though NDSI was not certified to conduct in-house welding repairs on its cargo tanks, Johansson and his shop manager – co-defendant Enrique Garcia, 46, of Pomona – discussed directing two NDSI workers to repair a cargo tank on May 5, 2014.
The following day, Garcia issued the welding orders to the employees and the two workers began a welding project on the cargo tank. Because the tank had not been completely purged of its fumes and crude oil, the sparks generated by the welding repair caused an explosion, which killed one worker, seriously injured the other worker, and blew a hole in the roof of the warehouse.
Johansson admitted that, from May 2014 to April 2018, he and other employees of NDSI and WDI conspired to obstruct a federal investigation into the May 6, 2014 explosion by making multiple false statements to local, state and federal officials to conceal the illegal welding repairs, that Johansson controlled NDSI and WDI, and that the deceased and injured employees worked for him. For example, on the day of the fatal explosion, when investigators arrived at NDSI, Johansson identified himself as being a customer service representative with another company and said the welders were employed by an outside tank-repair company.
In August 2014, the Federal Motor Carrier Safety Administration (FMCSA) issued an imminent hazard order – known as an “Out-of-Service Order” – to NDSI, which prohibited the company from operating approximately 37 cargo tanks to haul gasoline or ethanol because the FMCSA determined that those cargo tanks presented safety risks. Nevertheless, Johansson continued to use them to transport gasoline and ethanol.
Furthermore, Johansson admitted that he and NDSI submitted false statements to the FMCSA to have the Out-of-Service Order rescinded by the agency. Johansson signed, under oath, an affidavit that falsely claimed NDSI had never engaged in tank repairs and that Garcia worked for an outside tank-repair company.
To circumvent the FMCSA’s Out-of-Service Order, Johansson, at the end of 2014, converted NDSI to operate under the WDI name. WDI had almost all the same employees and management as NDSI, and it operated out of the same warehouse. WDI continued to violate the Out-of-Service Order through early 2018 by using the prohibited cargo tanks to haul gasoline and ethanol.
As part of the conspiracy and to further conceal his control of NDSI and WDI, Johansson did not file income tax returns for the years 2012 through 2017. Johansson failed to report to the federal government at least $1,174,173 in income from the trucking companies. He used that income to pay for personal expenses – including renting a large home in Corona for at least $12,000 per month and using company accounts to make $200,000 in tuition payments at his children’s private high schools and universities.
In total, Johansson admitted to unlawfully avoiding the payment of at least $298,562 in federal income taxes from 2012 to 2017.
COVID-Relief Fraud
In April 2020, while free on bond in the tanker-related case, Johansson directed another trucking company he controlled, the Ontario-based Western Distribution LLC, to apply for a $436,390 PPP loan. After the loan was funded, Johansson directed Western Distribution in May and June 2020 to immediately spend the PPP funds, largely on non-payroll expenses. Rather than use the funds to keep the company’s employees on staff, Johansson laid off most of the company’s employees, but rehired many of them in late 2020. To create the impression that Western Distribution LLC had spent more of its PPP loan on its payroll than it did, in September 2020 Johansson moved 21 employees from a separate company that Johansson controlled – the Merced County-based Agri-comm Express, Inc. – onto Western Distribution LLC’s payroll, even though those employees never worked for Western Distribution LLC.
In March 2021, Johansson caused Western Distribution LLC to repeat the same fraudulent representations concerning its employee lists and payroll numbers when the company submitted a second PPP loan application, this time for $231,527. The second loan application was also approved.
The total loss in the COVID-relief fraud matter is approximately $667,917.
United States District Judge Virginia A. Phillips has scheduled a May 9, 2022 sentencing hearing, at which time Johansson will face a statutory maximum sentence of 100 years in federal prison.
Also in court Wednesday afternoon, Western Distribution LLC pleaded guilty to one count of conspiracy to commit bank fraud and one count of bank fraud. Under Johansson's direction, the company applied for and received approximately $667,917 in PPP loans that were fraudulently obtained and spent.
NDSI and WDI each pleaded guilty Wednesday to one count of conspiring to make illegal repairs on cargo tanks and defrauding the United States Department of Transportation. NDSI pleaded guilty to an additional count of welding without required certifications.
The three companies are scheduled to be sentenced on May 9, 2022.
Co-defendant Donald Cameron Spicer, 69, of Fullerton, who was the safety manager at Johansson’s companies, pleaded guilty on August 16 to one count of conspiracy to violate federal law by causing illegal repairs on cargo tanks and defrauding the United States Department of Transportation. Spicer was Johansson's safety manager at NDSI and WDI when the welding explosions occurred. Spicer is scheduled to be sentenced on February 14, 2022.
Garcia is scheduled to go on trial on January 18, 2022.
The United States Department of Transportation Office of Inspector General and IRS Criminal Investigation investigated these matters.
Assistant United States Attorneys Matthew W. O’Brien and Joseph O. Johns of the Environmental and Community Safety Crimes Section are prosecuting these cases.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at (866) 720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Former Long Beach Police Officer Arrested on Federal Indictment Alleging He Distributed and Possessed Child PornographyRead the Press Release
LOS ANGELES – A former Long Beach Police officer has been arrested pursuant to a federal grand jury indictment alleging he possessed and distributed child pornography when he was working as a law enforcement officer.
Anthony Brown, 57, of Lakewood, was arrested Wednesday morning by special agents with Homeland Security Investigations (HSI). At his arraignment in United States District Court Wednesday afternoon, Brown pleaded not guilty to three counts of distribution of child pornography and one count of possession of child pornography.
According to the indictment returned on September 21, Brown used MeWe, an internet-based messaging application, to distribute sexually explicit images of girls in November 2019 and April 2020.
From October 2019 through May 2020, Brown also knowingly possessed a sexually explicit image of a girl who had not yet reached the age of 12, the indictment alleges.
Brown was a Long Beach Police officer for 27 years. He left the force earlier this year after his arrest on state charges of possession and distribution of child pornography. The Los Angeles County District Attorney’s Office has dismissed those charges in light of the federal case.
At Wednesday’s arraignment, Brown was released on bond. A trial was scheduled for November 23.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
If convicted of all charges, Brown would face a mandatory minimum sentence of five years in federal prison and a statutory maximum sentence of 80 years in federal prison.
HSI and the Long Beach Police Department investigated this matter.
Assistant United States Attorneys Susan S. Har of the Public Corruption and Civil Rights Section and Kathrynne N. Seiden of the General Crimes Section are prosecuting this case.
Gang Members Plead Guilty to Federal Charges in Armed Robbery and Shooting at Beverly Hills RestaurantRead the Press Release
LOS ANGELES – Two South Los Angeles men pleaded guilty today to federal charges stemming from an armed robbery earlier this year on the crowded patio of a Beverly Hills restaurant in which one customer had a gun held to his head while the robbers removed his $500,000 wristwatch, and a second restaurant patron was shot and wounded.
Malik Lamont Powell, 21, and Khai McGhee, a.k.a. “Cameron Smith,” 18, each pleaded guilty today to three felony counts: conspiracy to interfere with commerce by robbery, interference with commerce by robbery, and using and discharging a firearm during a crime of violence.
A third defendant who participated in the robbery – Marquise Anthony Gardon, 41, also of South Los Angeles – pleaded guilty on September 10 to two counts: interference with commerce by robbery, and using and discharging a firearm during a crime of violence.
According to court documents, the three defendants – each of whom is a documented member of the Rollin’ 30s Crips street gang – drove to Beverly Hills on the afternoon of March 4 to commit an armed robbery. After scouting Beverly Hills for potential victims, the defendants decided to target a man wearing a Richard Mille wristwatch who was seated in the outdoor dining section of the Il Pastaio restaurant.
During the robbery, the victim was held at gunpoint. A struggle for the gun ensued, and at least two rounds were discharged from the firearm, one of which struck another restaurant patron in the leg. The gun was left at the scene, but the robbers fled with the watch, which was worth approximately $500,000.
United States District Judge John F. Walter is scheduled to sentence Powell and McGhee on February 14, 2022. Gardon’s sentencing hearing was previously scheduled for November 29.
As a result of their guilty pleas, each defendant faces up to 20 years in federal prison for each of the robbery-related offenses. The firearms charge, because the weapon was discharged, carries a mandatory minimum penalty of 10 years in federal prison and a statutory maximum sentence of life.
The FBI and the Beverly Hills 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.
American Honda Finance Corp. Agrees to Pay over $1.5 Million to Compensate Servicemembers Whose Federal Rights Were ViolatedRead the Press Release
LOS ANGELES – The Department of Justice announced today that American Honda Finance Corporation (AHFC) has agreed to settle a federal lawsuit alleging that it violated the Servicemembers Civil Relief Act (SCRA) by failing to refund a type of up-front lease payment to servicemembers who lawfully terminated their motor vehicle leases early. Under the settlement agreement, AHFC must pay up to $1,585,803 in compensation to 714 servicemembers who were harmed by the alleged violations.
“Servicemembers selflessly heed the call to duty, and their sacrifice should not subject them to unlawful economic harm,” said Acting U.S. Attorney Tracy L. Wilkison. “This settlement is the latest resulting from investigations my office has conducted in conjunction with Justice Department attorneys to ensure our brave men and women in uniform can perform without having to worry about unjust actions at home.”
“This case illustrates the Justice Department’s steadfast commitment to protecting the rights of servicemembers,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “We will continue to vigorously enforce federal law to ensure that no servicemember faces unlawful treatment by auto leasing companies or other entities.”
The SCRA permits servicemembers to terminate motor vehicle leases early without penalty after entering military service or receiving qualifying military orders for a permanent change of station or to deploy. When servicemembers lawfully terminate motor vehicle leases, the SCRA requires that they be refunded all lease amounts paid in advance.
AHFC is a California-based auto financing company that provides auto leasing for customers of Honda and Acura. Individuals who lease vehicles from AHFC, including servicemembers, often contribute an up-front monetary amount at lease signing, in the form of a cash payment, credit for a trade-in vehicle, or rebates or other credits. A portion of this up-front amount can be applied to the first month of the lease and certain up-front costs such as licensing and registration fees. The remainder, which is called the capitalized cost reduction amount, operates to reduce the monthly payment the lessee must make over the term of the lease.
Today’s settlement, which must be approved by a federal judge, resolves a lawsuit filed today by the Department of Justice in United States District Court in Los Angeles. The lawsuit alleges that, while AHFC regularly provided refunds of cash payments toward capitalized cost reduction made by servicemembers, AHFC failed to provide refunds of vehicle trade-in credit that was applied toward capitalized cost reduction, in violation of the SCRA.
In addition to compensating 714 servicemembers, the settlement requires AHFC to pay $64,715 to the U.S. Treasury, as well as to adopt new policies and implement new training requirements.
Servicemembers and their dependents who believe their SCRA rights have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations can be found at http://legalassistance.law.af.mil/.
The Justice Department’s enforcement of the SCRA is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section and U.S. Attorney’s Offices throughout the country. Since 2011, the department has obtained over $476 million in monetary relief for over 121,000 servicemembers through its enforcement of the SCRA. Additional information on the department’s enforcement of the SCRA and other laws protecting servicemembers is available at www.servicemembers.gov
Four Defendants Indicted for Laundering Target Gift Cards Purchased by Fraud VictimsRead the Press Release
A federal grand jury in Los Angeles returned an indictment against four California-based defendants for their alleged roles laundering fraud proceeds stored on gift cards. The indictment, which was unsealed today, charges U.S. citizen Blade Bai, 33, of El Monte; and Chinese citizens Bowen Hu, 26, of Hacienda Heights; Tairan Shi, 27, of Diamond Bar; and Yan Fu, 58, of Chino Hills, with conspiring to launder proceeds of wire fraud that were stored on gift cards issued by retailer Target.
According to the indictment, defendants Bai, Hu and Shi obtained over 5,000 gift cards from a group known as the “Magic Lamp.” Defendants Bai, Hu and Shi caused the gift cards to be distributed to “runners” like defendant Fu who used the funds on the cards at Target stores in Los Angeles and Orange County and elsewhere to purchase, among other items, consumer electronics and other gift cards. Through the purchases, returns and other transactions at multiple Target stores, the defendants and their co-conspirators sought to conceal the fact that the gift cards had been originally funded with fraudulent proceeds.
The indictment further alleges that perpetrators of the fraud schemes induced victims to send proceeds to defendants’ associates, and defendants then conspired to launder the proceeds. The indictment also alleges that victims of the schemes are spread throughout the United States, including California, Texas, Illinois and Georgia.
“The Department of Justice and its law enforcement partners are committed to tackling fraud schemes from every angle,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “Individuals who knowingly facilitate the victimization of American consumers make fraud possible, are criminally culpable for the offenses and should expect to be held accountable.”
“This case offers an important reminder to consumers that gift cards are for presents to friends and loved ones – they should never be used for payments to any government or corporate entity,” said Acting U.S. Attorney Tracy L. Wilkison for the Central District of California. “Don’t be fooled by callers claiming to be with a government agency, a bank or any other institution demanding that you purchase gift cards. There is no reason to purchase a gift card to resolve a problem with an account, your Social Security number or a supposed criminal case.”
“The case against these defendants is the result of the impressive work by Homeland Security Investigations’ (HSI) Los Angeles-led El Camino Real Financial Crimes Task Force,” said Special Agent in Charge David A. Prince for HSI Los Angeles. “These types of crimes have devastating effects on the victims. Through coordinated investigative efforts by law enforcement and our prosecution partners, HSI will continue to aggressively investigate those who prey on our elderly population.”
Defendants are charged with conspiracy to commit money laundering. If convicted, they face a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
This case was investigated by HSI Los Angeles’ El Camino Real Financial Crimes Task Force, a multi-agency task force comprised of federal and state investigators focused on financial crimes in Southern California, with substantial assistance from the FBI Los Angeles Field Office. Investigative assistance was also provided by the Social Security Administration, Office of the Inspector General.
Assistant U.S. Attorney Monica Tait of the Central District of California and Trial Attorney Wei Xiang of the Civil Division’s Consumer Protection Branch are prosecuting the case.
The Consumer Protection Branch and the U.S. Attorney’s Office for the Central District of California are part of the Transnational Elder Fraud Strike Force, which investigates and prosecutes scams run by transnational criminal organizations, including mass mailing, telemarketing, and tech support scams. For more information about the Consumer Protection Branch, visit its website at http://www.justice.gov/civil/consumer-protection-branch.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Federal Grand Jury Indicts 4 SoCal Defendants in Scheme to Launder Target Gift Cards Purchased by Victims of ScamsRead the Press Release
LOS ANGELES – Federal authorities this morning arrested two people named in an indictment alleging a scheme to launder the proceeds of scams sent to fraudsters via Target gift cards.
Bowen Hu, 26, of Hacienda Heights, and Tairan Shi, 27, of Diamond Bar, both Chinese nationals, were taken into custody today and are expected to be arraigned this afternoon in United States District Court in downtown Los Angeles.
Two other defendants named in the indictment – Blade Bai, 33, of El Monte, a U.S. citizen, and Yan Fu, 58, of Chino Hills, also a Chinese national – will be summonsed to appear in federal court next month.
The one-count indictment unsealed today charges all four defendants with conspiring to launder proceeds of wire fraud that were stored on gift cards issued by Target. The indictment alleges that Bai, Hu and Shi obtained more than 5,000 gift cards from a group that called itself the “Magic Lamp” and sold gift card information via an online messenger application.
Bai, Hu and Shi oversaw the distribution of gift cards to “runners,” including Fu, who used the funds on the cards at Target stores primarily in Los Angeles and Orange counties to purchase consumer electronics, other gift cards and other items, according to the indictment. Through the purchases and other transactions at multiple Target stores, the defendants and their co-conspirators sought to conceal the fact that the gift cards had been originally funded with fraudulent proceeds.
The indictment alleges that perpetrators of fraud schemes induced victims across the United States to purchase Target gift cards. Then, the indicted defendants in Southern California conspired to launder the proceeds. The victims, who were often older adults, were tricked into buying the gift cards based on various fraudulent schemes, including:
- Government-imposter scams, in which fraudsters impersonate government officials, such as officials with the Social Security Administration or local police officers, and falsely claim that victims need to purchase gift cards to resolve an issue, such as a pending arrest warrant or a problem with the victims’ Social Security number; and
- Tech support scams, in which fraudsters trick victims into believing there is a serious problem with their computer or with account access which can only be solved by paying substantial amounts through gift cards.
“This case offers an important reminder to consumers that gift cards are for presents to friends and loved ones – they should never be used for payments to any government or corporate entity,” said Acting United States Attorney Tracy L. Wilkison. “Don’t be fooled by callers claiming to be with a government agency, a bank or any other institution demanding that you purchase gift cards. There is no reason to purchase a gift card to resolve a problem with an account, your Social Security number or a supposed criminal case.”
“The Department of Justice and its law enforcement partners are committed to tackling fraud schemes from every angle,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “Individuals who knowingly facilitate the victimization of American consumers make fraud possible, are criminally culpable for the offenses and should expect to be held accountable.”
“The case against these defendants is the result of the impressive work by Homeland Security Investigations’ (HSI) Los Angeles-led El Camino Real Financial Crimes Task Force,” said Special Agent in Charge David A. Prince for HSI Los Angeles. “These types of crimes have devastating effects on the victims. Through coordinated investigative efforts by law enforcement and our prosecution partners, HSI will continue to aggressively investigate those who prey on our elderly population.”
According to court documents, Bai, Hu and Shi obtained the gift card numbers from the Magic Lamp group, often on the same day fraud victims had purchased the gift cards at the direction of a telephone scammer. Fu travelled to as many as 17 Target stores in a single day to conduct gift card transactions, and Bai resold the purchased consumer electronics, using some of the proceeds to pay the Magic Lamp group, the court documents allege.
Investigators conservatively estimate that the defendants laundered more than $2.5 million in gift cards between approximately June 2019 and November 2020.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
All four defendants are charged with conspiracy to commit money laundering, a felony offense that carries a statutory maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Bai and Fu were initially arrested in this matter on November 17, 2020 pursuant to criminal complaints. Bai was released on bond and was subsequently named in a criminal information charging him with conspiracy to commit money laundering. Bai pleaded not guilty to the charge in the information. The indictment announced today supersedes the criminal information. The complaint against Fu was dismissed in December 2020 to further the investigation that has resulted in the indictment.
This case is the product of an investigation by HSI and the FBI. The investigation was conducted under the auspice of HSI’s Los Angeles’ El Camino Real Financial Crimes Task Force, a multi-agency task force comprised of federal and state investigators focused on financial crimes in Southern California.
The Social Security Administration, Office of the Inspector General also provided assistance during the investigation, as did the following: the Brea (California) Police Department, the Glynn County (Georgia) Police Department, the Fontana (California) Police Department, the Charlotte-Mecklenburg (North Carolina) Police Department, the Streamwood (Illinois) Police Department, the Cleveland (Ohio) Police Department, the Madera County (California) Sheriff's Office, the New York Police Department, the Norwood (New Jersey) Police Department, the Loudon County (Virginia) Sheriff's Office, the Waukesha County (Wisconsin) Sheriff's Department, the Fremont (California) Police Department, the Marin County (California) Sheriff's Office, the County of Hawaii Police Department, the Henderson (Nevada) Police Department, the Wilmington (Massachusetts) Police Department, the Las Vegas (Nevada) Metropolitan Police Department, the Lewisville (Texas) Police Department, the Gardena (California) Police Department, the Des Moines (Iowa) Police Department, the Cobb County (Georgia) Sheriff`s Department, the Millburn (New Jersey) Police, the Wauwatosa (Wisconsin) Police Department, the San Angelo (Texas) Police Department, the Fairfax City (Virginia) Police Department, and the Virginia Beach (Virginia) Police Department.
Assistant United States Attorney Monica Tait of the Major Frauds Section and Justice Department Trial Attorney Wei Xiang of the Civil Division’s Consumer Protection Branch are prosecuting the case.
The United States Attorney’s Office and the Consumer Protection Branch are part of the Transnational Elder Fraud Strike Force, which investigates and prosecutes scams run by transnational criminal organizations, including mass mailing, telemarketing and tech support scams.
If you fall victim to a gift card scam, immediately call the gift card issuer and ask them to freeze the gift card numbers involved – and save your receipt and the gift card. Then, report the crime to the FBI’s Internet Crime Complaint Center at www.ic3.gov, the Federal Trade Commission at https://reportfraud.ftc.gov/#/ or 877-382-4357, and your local police department.
Sunland Man Sentenced to Nearly 3½ Years in Federal Prison for Scheming to Fraudulently Obtain $650,600 COVID-Relief LoanRead the Press Release
LOS ANGELES – A Sunland resident has been sentenced to 41 months in federal prison for fraudulently obtaining a $650,600 Paycheck Protection Program loan under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Department of Justice announced today.
Andranik Amiryan, 42, was sentenced late Thursday afternoon by United States District Judge Dolly M. Gee, who also ordered him to pay $650,600 in restitution. Amiryan pleaded guilty on April 28 to one count of conspiracy to commit bank fraud.
Amiryan opened a bank account by using a stolen identity, then, posing as the identity theft victim, he falsely told the bank that he was the CEO of ACBA Technologies Inc., a Northridge-based software company. In fact, ACBA existed only as a corporate shell. Amiryan’s co-conspirators arranged to wire into that account $650,600 of CARES Act relief funds by falsely claiming that ACBA Technologies had a monthly payroll of more than $500,000 and attaching forged tax forms as support. Once the money was in his account, Amiryan wrote checks to his co-conspirators and to other shell companies he controlled, effectively withdrawing approximately $452,287 of the funds before the bank froze the account.
Amiryan has been in federal custody since his arrest in this case in September 2020. At the time of his arrest, authorities seized $11,800 in cash found in his jacket, and soon afterward seized more than $262,000 from bank accounts he controlled. As part of his guilty plea, Amiryan agreed to forfeit those assets, which are worth nearly $275,000.
Judge Gee described as “despicable” Amiryan’s theft of public funds that were intended by Congress to help small businesses survive the COVID-19 pandemic.
The case is the result of an investigation by Homeland Security Investigations Los Angeles’ El Camino Real Financial Crimes Task Force and the Small Business Administration Office of Inspector General.
Assistant United States Attorneys Andrew Brown of the Major Frauds Section and Victor Rodgers of the Asset Forfeiture Section prosecuted this case.
In May, 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.
Ex-Pastor of Orange County Church Sentenced to 14 Years in Federal Prison for Orchestrating $33 Million Con that Defrauded InvestorsRead the Press Release
SANTA ANA, California – The former pastor of the Westminster-based Church of the Healthy Self was sentenced today to 168 months in federal prison for orchestrating a church-based investment scam that took in more than $33 million.
Kent R.E. Whitney, 39, formerly of Newport Beach but who currently resides in Northern California, was sentenced by United States District Judge Josephine L. Staton, who also ordered him to pay $22,662,668 in restitution. Whitney pleaded guilty in November 2020 to a two-count information charging him with mail fraud and filing a false federal income tax return.
From September 2014 to April 2019, Whitney schemed to defraud investors through the Church of the Healthy Self (CHS), a non-profit corporation, and its related entities, including CHS Asset Management, Inc. Whitney founded these entities, operated them out of a strip mall in Westminster, and claimed to be the pastor of CHS.
At Whitney’s direction, CHS representatives appeared on television and at live seminars at CHS offices to solicit investments in CHS Trust, the church’s investment arm. Recordings of these appearances frequently were uploaded onto YouTube.
In these appearances, at Whitney’s direction, CHS representatives made false or misleading claims, including: CHS Trust guaranteed an annual rate of return of 12 percent; CHS Trust guaranteed a return of principal with no risk because it was federally insured; the worst return received during the previous five years was a 1.5 percent profit for the month of January 2015; traders used by CHS had not lost money in 15 years; and CHS was audited by accounting firm KPMG.
In fact, little investor money went into any trading accounts.
Relying on these false statements, victim-investors sent more than $33 million to CHS from 2014 to 2019. As part of the scheme, Whitney directed that monthly statements be sent to victims that contained false reports of investment returns. Whitney intended to lull victims into believing their money had been invested and was consistent with the false claims made by CHS representatives. Whitney also made approximately $11 million in Ponzi-type payments to investors, taken from money brought in by later victims.
Whitney also knowingly and willfully signed and filed a false federal income tax return that reported that his total income for the tax year 2018 was $17,539. In fact, as Whitney knew, his true income for that year was at least $452,872, of which approximately $435,333 was obtained via Whitney’s CHS fraud. The resulting tax loss was at least $130,808.
The FBI and IRS Criminal Investigation investigated this matter. The Securities and Exchange Commission provided substantial assistance with the investigation.
Assistant United States Attorney Gregory W. Staples of the Santa Ana Branch Office prosecuted this case.
Leader of ‘Oxy Bandits’ Crew Sentenced to 20 Years in Prison for Armed Robbery Spree of 15 Southern California PharmaciesRead the Press Release
LOS ANGELES – A Lynwood man who organized and led a crew – dubbed the “Oxy Bandits” by law enforcement – that committed 15 armed robberies of independent “mom-and-pop” pharmacies throughout Southern California was sentenced today to 240 months in federal prison.
Tyrome Lewis, 26, a.k.a. “Boobie,” was sentenced by United States District Judge John A. Kronstadt. After a two-day bench trial in April, Judge Kronstadt found Lewis guilty of one count of conspiracy to interfere with commerce by robbery, one count of conspiracy to distribute oxycodone, two counts of interference with commerce by robbery, two counts of possession with intent to distribute oxycodone, and two counts of knowingly using and brandishing a firearm during a crime of violence.
From May 2018 to July 2019, Lewis conspired with others to commit 15 armed robberies. Lewis selected the pharmacies to be robbed, targeting smaller pharmacies to steal oxycodone and other similar prescription medication. He also assigned the roles from the crew members, and then he served as a lookout while co-conspirators committed the robberies. Following the pharmacy robberies, Lewis and others would sell the stolen prescription medication on the black market.
The Lewis-led armed crew robbed pharmacies in Glendale, Bellflower, Paramount, Cerritos, Hawthorne, South Los Angeles, Pico Rivera, Huntington Park, Claremont, Westminster, Fullerton, Anaheim, and Riverside.
Each of the robberies shared a common modus operandi, including targeting smaller pharmacies, placing the stolen prescription drugs into the pharmacy’s trash bags or trash cans, using a black semi-automatic handgun to threaten and intimidate store employees, and forcing employees to open the medication vault.
“Over the course of more than a year…Lewis led a violent spree of armed robberies that terrorized numerous innocent individuals in order to obtain dangerous pharmaceutical drugs that he and others then sold,” prosecutors wrote in a sentencing memorandum. “[Lewis’s] conduct subjected numerous innocent civilians (employees, customers, and bystanders), law enforcement (who engaged in at least two high speed chases with defendant’s crew members), and robbery crew members to profound danger.”
The FBI and the Los Angeles County Sheriff’s Department investigated this matter, with assistance from the Claremont Police Department and the Glendale Police Department.
Assistant United States Attorneys Jeffrey M. Chemerinsky and Joseph D. Axelrad of the Violent and Organized Crime Section, and Assistant United States Attorney Peter Dahlquist of the Riverside Branch Office prosecuted this case.
Federal Correctional Officer Charged with Making False Statements About Engaging in Unlawful Sexual Activity with InmateRead the Press Release
LOS ANGELES – A correctional officer at the federal jail in downtown Los Angeles was arrested today to face a criminal charge that he lied to investigators about him engaging in sexual activity with an inmate who was under his care and supervision.
Abel Concho, 53, of East Los Angeles, is charged with one count of making false statements, according to a federal grand jury indictment returned on Tuesday. He surrendered to law enforcement officials this morning and is scheduled to make his initial appearance this afternoon in United States District Court.
According to the indictment, Concho was employed by the Bureau of Prisons (BOP) as a correctional officer at the Metropolitan Detention Center (MDC) in Los Angeles that houses a total of 635 male and female inmates. The victim in this case was an MDC inmate under Concho’s supervision from June 2010 to February 2011.
From February 2020 to July 2021, a federal criminal investigation was underway into allegations that Concho had sexual contact with multiple inmates at MDC. It is a federal crime for a BOP employee to engage in any sexual act with a person in official detention and under his supervision. It also is a federal crime for any BOP employee to smuggle contraband, including cellphones, into MDC for inmates’ use.
On July 28, 2021, federal investigators interviewed Concho, who allegedly made a series of false statements, including that he “never” had sexual contact with one MDC inmate, when in fact Concho engaged in sexual contact with the victim on nearly three dozen different occasions. Concho, on multiple occasions, also lied that he “never had sexual contact” with any MDC inmates, according to the indictment.
After initially denying he had any sexual contact with the victim, Concho then falsely stated that he had sexual intercourse and engaged in oral sex with the victim just “once (or) twice” that he could recall, the indictment alleges. Concho also falsely stated on multiple occasions that he did not provide a cellphone to the victim to take nude photographs for him. In fact, he illegally smuggled a cellphone into MDC and provided that cellphone to the victim to take nude photographs for him, which the victim then did.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
If convicted of the charge in the indictment, Concho would face a statutory maximum penalty of five years in federal prison.
The FBI and the United States Department of Justice Office of Inspector General investigated this matter.
Assistant United States Attorney Veronica Dragalin of the Public Corruption and Civil Rights Section is prosecuting this case.
Monrovia Agrees to Ensure Equal Access for Persons with Disabilities to Its Transportation Services ProgramRead the Press Release
SETTLEMENT AGREEMENTLOS ANGELES – The City of Monrovia has entered into a settlement agreement with the United States to ensure that individuals with disabilities have equal access to its transportation services program, the Department of Justice announced today.
In February 2018, Monrovia launched the GoMonrovia program to restructure its dial-a-ride service, which previously provided rides only to seniors and to individuals with disabilities. GoMonrovia provides reduced-fare Lyft rides available to people traveling within the program’s service area. Individuals with disabilities who needed wheelchair-accessible vehicles could not use Lyft as part of the GoMonrovia program because the ride-sharing company did not provide such vehicles, according to the settlement agreement. Instead, they were required to use transportation services provided by a separate company, Empire Transportation Services, Inc., court documents state.
The Justice Department’s compliance review pursuant to the Americans with Disabilities Act (ADA) found that individuals using reduced-fare Lyft rides could travel 24 hours a day and seven days a week, but individuals with disabilities using Empire Transportation could not travel on nights and certain holidays such as Independence Day and Thanksgiving. Accessible vehicles could not be reserved through a website or by telephone. Individuals needing this service were required to complete paper applications while those who used the Lyft service were not.
The settlement agreement requires Monrovia to take several steps to ensure that its program complies with the ADA. Individuals with disabilities will have equivalent access to the GoMonrovia program, including the abilities to travel at the same time as others. As part of the agreement, Monrovia did not admit that any qualified individual with a disability was excluded from participation in or was denied the benefits of the GoMonrovia program on the basis of a disability.
Assistant United States Attorney Acrivi Coromelas of the Civil Division’s Civil Rights Section handled this matter.
For more information on the ADA or this settlement agreement, please call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TDD) or access the ADA website at http://www.ada.gov.
Deportation Officer Found Guilty of ‘Structuring’ for Hiding AssetsRead the Press Release
LOS ANGELES – A deportation officer with the Department of Homeland Security was found guilty today by a jury of “structuring” charges for making cash withdrawals and deposits totaling nearly $100,000, which were designed to circumvent federal reporting requirements and to conceal assets from his then-wife and the state court during divorce proceedings.
Vardan Keshishyan, 49, of Glendale, was found guilty of two counts of structuring of currency transactions to evade reporting requirements.
According to evidence presented at his three-day trial, shortly after his then-wife filed for divorce, Keshishyan began structuring nearly $100,000 out of his bank accounts to deceive the court into believing he only had $1,000 in assets that could be distributed during the divorce.
In January 2015, Keshishyan deposited approximately $96,000 from the sale of the home he shared with his then-wife into a bank account he solely owned and controlled. He then withdrew $99,400 from his bank accounts by making 11 cash withdrawals of approximately $9,000 – each withdrawal just shy of the bank’s mandatory reporting requirements for cash transactions above $10,000.
During one attempted withdrawal, a bank manager warned Keshishyan that it was a crime to break up a cash transaction greater than $10,000 into smaller amounts to evade the bank’s reporting requirements mandated by federal law. After the manager informed Keshishyan that the bank planned to file a report to comply with federal law, he cancelled the transaction. He then continued his pattern of structured transactions elsewhere to avoid the filing of any report required under federal law.
Once he had drained his bank accounts, according to evidence at trial, Keshishyan lied under oath to the court at a June 2015 hearing in his divorce case, falsely telling the court he had lost $95,000 of the family home sale proceeds, in part, through a bad investment. Upon learning that Keshishyan had withdrawn the funds in cash progressively over time, the court warned him that his pattern of cash withdrawals was “not permitted.”
Despite these admonishments from the court and the bank manager’s warning about the illegality of structuring, Keshishyan continued to structure to sneak the money back into his accounts. Once he and his then-wife settled on the terms of the divorce and the judgment issued, he structured $99,000 back into his bank accounts. In 2016 and 2017, he visited multiple banks, sometimes just minutes apart, to make 11 cash deposits of $9,000 each.
To conceal his pattern of cash transactions just shy of the $10,000 reporting requirement, he traveled to 11 bank branches throughout Los Angeles County to make the cash transactions and tried to further conceal his conduct through the use of multiple accounts at multiple banks.
United States District Judge Philip S. Gutierrez has scheduled a January 7, 2022 sentencing hearing, at which time Keshishyan will face a statutory maximum sentence of 10 years in federal prison.
The United States Department of Homeland Security Office of Inspector General investigated this matter.
Assistant United States Attorneys Lindsey Greer Dotson and Thomas F. Rybarczyk of the Public Corruption and Civil Rights Section are prosecuting this case.
Illinois Man Convicted of Federal Criminal Charges for Operating Subscription-Based Computer Attack PlatformsRead the Press Release
LOS ANGELES – An Illinois man was found guilty today by a federal jury for running websites that allowed paying users to launch powerful distributed denial of service, or DDoS, attacks that flood targeted computers with information and prevent them from being able to access the internet.
Matthew Gatrel, 32, of St. Charles, Illinois, was found guilty of three felonies: one count of conspiracy to commit unauthorized impairment of a protected computer, one count of conspiracy to commit wire fraud, and one count of unauthorized impairment of a protected computer.
According to evidence presented at his nine-day trial, Gatrel owned and operated two DDoS facilitation websites: DownThem.org and AmpNode.com. DownThem sold subscriptions allowing customers to launch DDoS attacks while AmpNode provided “bulletproof” server hosting to customers with an emphasis on “spoofing” servers that could be pre-configured with DDoS attack scripts and lists of vulnerable “attack amplifiers” used to launch simultaneous cyberattacks on victims.
Records from the DownThem service revealed more than 2,000 registered users and more than 200,000 launched attacks, including attacks on homes, schools, universities, municipal and local government websites, and financial institutions worldwide. Often called a “booting” service, DownThem itself relied upon powerful servers associated with Gatrel’s AmpNode bulletproof hosting service. Many AmpNode customers were themselves operating for-profit DDoS services.
Gatrel offered expert advice to customers of both services, providing guidance on the best attack methods to “down” different types of computers, specific hosting providers, or to bypass DDoS protection services. Gatrel himself often used the DownThem service to demonstrate to prospective customers the power and effectiveness of products, by attacking the customers intended victim and providing proof, via screenshot, that he had severed the victim’s internet connection.
Gatrel’s DownThem customers could select from a variety of different paid “subscription plans.” The subscription plans varied in cost and offered escalating attack capability, allowing customers to select different attack durations and relative attack power, as well as the ability to launch several simultaneous, or “concurrent” attacks. Once a customer entered the information necessary to launch an attack on their victim, Gatrel’s system was set up to use one or more of his own dedicated AmpNode attack servers to unlawfully appropriate the resources of hundreds or thousands of other servers connected to the internet in what are called “reflected amplification attacks.”
United States District Judge John A. Kronstadt has scheduled a January 27, 2022 sentencing hearing, at which time Gatrel will face a statutory maximum sentence of 35 years in federal prison.
Co-defendant Juan Martinez, 28, of Pasadena, pleaded guilty on August 26 to one count of unauthorized impairment of a protected computer. Martinez was one of Gatrel’s customers and became a co-administrator of the site in 2018. Martinez will face a statutory maximum sentence of 10 years in federal prison at his sentencing hearing, which is scheduled for December 2.
The FBI’s Anchorage Field Office and its Los Angeles-based Cyber Initiative and Resource Fusion Unit investigated this matter. Akamai Technologies, Inc.; Cloudflare, Inc.; DigitalOcean, Inc.; Google, LLC; Palo Alto Networks - Unit 42; University of Cambridge Cyber Crime Centre; and Unit 221B, LLC provided assistance to this investigation.
Assistant United States Attorney Cameron L. Schroeder, Chief of the Cyber and Intellectual Property Crime Section, and Assistant United States Attorney Adam Alexander of the District of Alaska are prosecuting this case.
West L.A. Man Pleads Guilty to Fraudulently Obtaining Approximately $9 Million in COVID-Relief Loans, Some of Which Was Gambled AwayRead the Press Release
LOS ANGELES – A West Los Angeles man pleaded guilty today to federal charges stemming from a scheme that used a series of corporations he controlled to fraudulently obtain approximately $9 million in loans from COVID-relief programs, some of which he used on gambling excursions to Las Vegas and transferred to his stock trading accounts.
Andrew Marnell, 41, who resides in the Beverly Grove neighborhood, pleaded guilty to one count of bank fraud and one count of money laundering.
Marnell admitted that he fraudulently obtained Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Marnell obtained seven PPP loans from financial institutions for corporations he controlled that brought him just under $9 million.
Marnell submitted fraudulent loan applications that made numerous false and misleading statements about the companies’ business operations and payroll expenses. Marnell, often using aliases, submitted fake and altered documents, including bogus federal tax filings and employee payroll records.
The PPP program was implemented by the CARES Act, which was signed into law in March 2020 and was designed to provide relief to businesses affected by the coronavirus pandemic. The CARES Act also provided funding to The Economic Injury Disaster Loan Program (EIDL) administered by the SBA. Marnell admitted that he fraudulently obtained $170,000 in EIDL loans.
Once the loans were funded, Marnell transferred millions of dollars from the fraudulently obtained loan proceeds to his brokerage accounts to make risky stock market bets, according to court documents, which note that Marnell spent hundreds of thousands of dollars in fraudulently obtained loan proceeds at various gambling establishments.
As part of the plea agreement, Marnell agreed to forfeit items related to the pilfered PPP loan funds, including more than $1.54 million seized from several brokerage accounts, $319,298 in cash recovered from his residence, numerous electronic devices, a Rolex Oyster watch, a Range Rover and a Ducati motorcycle.
As a result of his guilty pleas, Marnell will face a statutory maximum sentence of 40 years in federal prison when he is sentenced by United States District Judge R. Gary Klausner on February 14, 2022. In addition to any prison sentence he receives, Marnell has agreed to pay restitution to the victim lenders to compensate the losses this case, an amount believed to be $7,341,376.
Marnell has been in custody since his arrest in this matter on July 16, 2020.
The Federal Housing Finance Agency’s Office of Inspector General, the FBI, the Federal Deposit Insurance Corporation’s Office of Inspector General, IRS Criminal Investigation, the Treasury Inspector General for Tax Administration, and the Small Business Administration’s Office of Inspector General investigated this matter. The California Department of Justice’s Bureau of Gambling Control provided valuable assistance.
Assistant United States Attorney Kerry Quinn of the Major Frauds Section and Justice Department Trial Attorney Scott Armstrong of the Criminal Division’s Fraud Section are prosecuting this case.
In May, 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.
Man Pleads Guilty to Fraudulently Obtaining Approximately $9 Million in COVID-Relief Loans, Some of Which Was Gambled AwayRead the Press Release
A California man pleaded guilty today to federal charges stemming from a scheme that used a series of corporations he controlled to fraudulently obtain approximately $9 million in loans from COVID-relief programs, some of which he used on gambling excursions to Las Vegas and transferred to his stock trading accounts.
According to court documents, Andrew Marnell, 41, of Los Angeles, admitted that he fraudulently obtained Payroll Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. In the course of the scheme, Marnell obtained seven PPP loans totaling just under $9 million from financial institutions for corporations he controlled.
To obtain the loans, Marnell submitted fraudulent loan applications that made numerous false and misleading statements about the companies’ business operations and payroll expenses. Marnell, often using aliases, further submitted fake and altered documents, including bogus federal tax filings and employee payroll records. Once the loans were funded, Marnell transferred millions of dollars from the fraudulently obtained loan proceeds to his brokerage accounts to make risky stock market bets. Marnell also spent hundreds of thousands of dollars in fraudulently obtained loan proceeds at various gambling establishments.
The PPP program was implemented by the CARES Act, which was signed into law in March 2020 and was designed to provide relief to businesses affected by the coronavirus pandemic. The CARES Act also provided funding to the Economic Injury Disaster Loan Program (EIDL) administered by the SBA. Marnell admitted that he fraudulently obtained $170,000 in EIDL loans.
Marnell pleaded guilty to one count of bank fraud, which carries a 30-year statutory maximum penalty, and one count of engaging in a monetary transaction involving criminal proceeds, which carries a 10-year statutory maximum penalty. He is scheduled to be sentenced on Feb. 14, 2022. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
As part of his plea agreement, Marnell agreed to forfeit items related to the pilfered PPP loan funds, including more than $1.54 million seized from several brokerage accounts, $319,298 in cash recovered from his residence, numerous electronic devices, a Rolex Oyster watch, a Range Rover and a Ducati motorcycle.
The Federal Housing Finance Agency’s Office of Inspector General, the FBI, the Federal Deposit Insurance Corporation’s Office of Inspector General, IRS-Criminal Investigation, the Treasury Inspector General for Tax Administration, and the Small Business Administration’s Office of Inspector General investigated this case. The California Department of Justice’s Bureau of Gambling Control provided valuable assistance.
Trial Attorney Scott Armstrong of the Justice Department’s Fraud Section and Assistant U.S. Attorney Kerry Quinn of the Central District of California are prosecuting the case.
In May, 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.
South Bay Man Pleads Guilty to Federal Charges for Producing Sexually Explicit Content Involving ChildrenRead the Press Release
LOS ANGELES – A South Bay man pleaded guilty today to federal criminal charges for producing thousands of sexually explicit images and videos of nearly three dozen children and developing a relationship with at least one boy in the Philippines who performed sex acts online in exchange for money.
Billy Edward Frederick, 51, of Redondo Beach, pleaded guilty to a two-count information charging him with production of child pornography for transportation into the United States and enticement of a minor to engage in criminal sexual activity.
According to his plea agreement, Frederick stored in his Google accounts various images and videos depicting child pornography, at least some of which he obtained from video calls on Google Hangout. One video from July 2020 in which a boy, who appears to be between 11 and 14 years old, engages in sexual activity while Frederick records the video call. In messages sent relating to the video call, the victim calls Frederick “master.”
Chats between Frederick and the victim prior to the video call in which the boy asks to borrow money to purchase underwear. Immediately after the call, Frederick chatted online with the boy, who asked for money to be sent to his brother.
Frederick admitted to producing more than 5,000 images and videos of child pornography involving at least 35 different children by requesting these children engage in specified sexually explicit activity in exchange for money. Some of the videos and images depicted minor victims under the age of 12 being used for sexual acts.
United States District Judge Dale S. Fischer has scheduled a March 14, 2022 sentencing hearing, at which time Frederick will face a mandatory minimum sentence of 15 years in federal prison and a statutory maximum sentence of life imprisonment.
Homeland Security Investigations investigated this matter.
Assistant United States Attorney Kathy Yu of the Violent and Organized Crime Section is prosecuting this case.
San Bernardino Man Who Robbed 28 Food and Retail Stores During Five-Month Crime Spree Sentenced to 6 Years in Federal PrisonRead the Press Release
LOS ANGELES – A San Bernardino man who robbed more than two dozen retail and fast-food stores during a five-month span in Los Angeles and San Bernardino counties was sentenced today to 72 months in federal prison.
David Sanchez, 41, was sentenced by United States District Judge Mark C. Scarsi. Sanchez pleaded guilty on June 21 to two counts of interference with commerce by robbery.
From November 2020 to April 2021, Sanchez robbed 28 fast food restaurants and retail stores. In each robbery, he brandished what appeared to be a firearm – but was in fact a BB gun – and demanded money from the cash registers. The robberies netted a total of at least $3,853.
Sanchez admitted in his plea agreement to robbing stores and food shops in Lynwood, Long Beach, South Gate, San Bernardino, Palmdale, Compton, Whittier, Fontana and Bellflower. The robberies targeted Walgreens, Circle K, Little Caesar’s Pizza, Subway, El Rey Supermarket, Lynwood Farmer’s Market, Family Dollar Store, Starbucks, Domino’s Pizza and Dollar Tree outlets.
“This is a crime that leaves lasting stress and trauma that victims remember for their entire lives,” the government wrote in its sentencing memorandum. “Each victim is forced to return work at these locations and deal with customers, never knowing if they will again be robbed or threatened with a dangerous weapon.”
The FBI and the Los Angeles County Sheriff’s Department investigated this matter.
Assistant United States Attorney Kevin J. Butler of the Violent and Organized Crime Section prosecuted this case.
Redondo Beach Man Charged with Firearms and Narcotics Trafficking Offenses, One Alleging Fentanyl Sale that Resulted in Fatal OverdoseRead the Press Release
LOS ANGELES – A federal grand jury indictment unsealed today charges a Redondo Beach man who allegedly sold counterfeit oxycodone pills laced with fentanyl that caused a fatal opioid overdose.
Marcus Michael Takaya Poydras, 32, a dual U.S. and Japanese citizen, was arrested September 9 by agents with the Drug Enforcement Administration. The following day, a United States magistrate judge ordered Poydras held without bond pending trial, which is currently set for November 2.
The five-count indictment that led to Poydras’ arrest charges him with one count of distributing fentanyl resulting in death, one count of possession with intent to distribute cocaine, one count of possession with intent to distribute fentanyl, and two counts of possession of a firearm in relation to a drug trafficking crime. The five charges relate to three incidents.
In the first incident, Poydras allegedly sold to another drug dealer counterfeit oxycodone pills containing fentanyl. After the January 22, 2020, transaction, the second drug dealer distributed the counterfeit pills to a 43-year-old victim who later suffered a fatal fentanyl overdose at his Marina del Rey residence.
As part of the investigation into the overdose death, DEA agents and the Los Angeles County Sheriff’s Department executed a federal search warrant at Poydras’ residence on July 14, 2020, and, according to the indictment, seized cocaine and a .38-caliber revolver with an obliterated serial number.
In the third incident alleged in the indictment, Redondo Beach Police officers arrested Poydras on January 17, 2021, and recovered several suspected controlled substances, including counterfeit oxycodone pills containing fentanyl. At the time, Poydras was allegedly carrying a loaded 9mm semi-automatic handgun.
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 charge of drug distribution resulting in death carries a mandatory minimum sentence of 20 years in federal prison and a maximum sentence of life imprisonment. Additionally, each firearm charge carries a consecutive mandatory minimum sentence of five years apiece. Thus, if convicted, Poydras would face a mandatory minimum sentence of 30 years in federal prison.
The DEA, the Los Angeles County Sheriff’s Department, and the Redondo Beach Police Department are investigating this matter.
Assistant United States Attorney Patrick Castañeda of the International Narcotics, Money Laundering, and Racketeering Section is prosecuting this case.
This case is the result of an investigation 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 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.
Mexican National Sentenced to More Than 5 Years in Prison for Conspiring to Distribute Methamphetamine Dropped from AirplaneRead the Press Release
LOS ANGELES – A Mexican national was sentenced today to 63 months in federal prison for conspiring to distribute nearly 120 pounds of methamphetamine that had been dropped in the desert by an airplane that had crossed the U.S.-Mexico border.
Juan Carlos Iturriaga-Centeno, 34, a one-time resident of Mecca, was sentenced by United States District Judge Dale S. Fischer. Iturriaga-Centeno pleaded guilty on April 30 to one count of conspiracy to distribute methamphetamine.
In December 2019, Iturriaga-Centeno and his co-conspirators drove off-road utility vehicles into the desert near North Shore, a Riverside County community located near the Salton Sea. There, they waited for an ultralight airplane, which had crossed the United States-Mexico border, to drop packages of methamphetamine, which were attached to a parachute.
The methamphetamine had GPS tracking devices attached to it and Iturriaga-Centeno and the co-conspirators used a cell phone to locate the GPS trackers and retrieve the package of methamphetamine. The packages contained 116.4 pounds (52.8 kilograms) of methamphetamine, according to court documents.
Border Patrol and the Air and Marine Operations Center in Riverside tracked the ultralight airplane as it crossed the international border near Calexico, according to court documents. After radar surveillance indicated that the aircraft descended and then headed back to Mexico, a California Highway Patrol aircraft saw two vehicles. The two vehicles left the area and were intercepted by a marked Border Patrol vehicle. A Polaris off-road vehicle occupied by Iturriaga-Centeno and his brother, Leonardo Iturriago-Centeno, 30, stopped, but a Can-Am vehicle with two other men sped away. The Can-Am vehicle was driven into the Coachella Canal, and the Border Patrol rescued Victor Efren Bugarin-Perez, 30, of Mecca, and Juan Favela-Paredez, 26, a Mexican national, when they were unable to exit the canal.
Favela-Paredez and Leonardo Iturriaga-Centeno – each pleaded guilty to one count of conspiracy to distribute methamphetamine. Judge Fischer sentenced both defendants to 57 months in federal prison. Bugarin-Perez, the case’s lead defendant, fled after being freed on bond in this case.
The Drug Enforcement Administration investigated this case.
Assistant United States Attorney Benjamin J. Weir of the Riverside Branch Office prosecuted this matter.
Montebello Man Pleads Guilty to Federal Drug Charges for Causing Fentanyl Overdose that Resulted in DeathRead the Press Release
LOS ANGELES – A Montebello man pleaded guilty today to federal narcotics charges, including that he provided a woman a fatal dose of fentanyl.
Edwin Oliva, 30, pleaded guilty to one count of distribution of fentanyl resulting in death and one count of possession with intent to distribute heroin. He has been in federal custody in this case since March 2019.
According to his plea agreement, during the early morning hours on February 28, 2019, Oliva gave the victim a line of drugs to snort, but he did not tell her that the substance was fentanyl. The victim ingested the drug, which resulted in a fatal overdose. Oliva admitted to knowingly distributing fentanyl to the victim.
Oliva did not call 911 or otherwise seek medical care for the victim until nearly six hours after texting a friend that the victim was not breathing.
In the nearly six hours between when Oliva learned that the victim was not breathing and when he ultimately called 911, he cleaned his apartment, removing the fentanyl and other evidence of drug trafficking. He placed these items in the trunk of his significant other’s car and then drove away from the apartment in attempt to hide it from law enforcement.
Later that day, Montebello Police officers executed a search warrant on the car and discovered 1.9 kilograms (4.2 pounds) of heroin, 21 grams of fentanyl, 1.4 kilograms (3.2 pounds) of marijuana, 0.4 grams of methamphetamine, drug paraphernalia, a loaded .45-caliber semiautomatic pistol, a blue flip phone he used to conduct drug transactions, and a notebook he used as a pay/owe ledger.
Oliva admitted that, while in custody in March 2019, he directed his significant other to destroy evidence in the case, and he also directed her to tell law enforcement that the blue flip phone was a play phone for their children.
United States District Judge André Birotte Jr. has scheduled a January 7, 2022 sentencing hearing, at which time Oliva will face a statutory maximum sentence of life imprisonment. The fentanyl distribution charge carries a mandatory minimum sentence of 20 years in federal prison. The heroin possession charge carries a mandatory minimum sentence of 10 years in federal prison.
The Drug Enforcement Administration and the Montebello Police Department investigated this matter.
Assistant United States Attorneys Maria Jhai and Kathrynne Seiden of the General Crimes Section are prosecuting this case.
Lompoc Man Pleads Guilty to Involuntary Manslaughter Charge for Causing Fatal Car Accident Near Vandenberg Air Force BaseRead the Press Release
LOS ANGELES – A Santa Barbara County man pleaded guilty today to a federal manslaughter charge for crashing a stolen Jeep near Vandenberg Air Force Base while under the influence of drugs, killing one motorist and severely injuring another.
Michael James Culligan, 30, of Lompoc, pleaded guilty to one count of involuntary manslaughter.
According to his plea agreement, on June 16, 2020, at approximately 12:30 p.m., Culligan drove a stolen 2019 Jeep Wrangler on Vandenberg Air Force Base property. After veering onto the right shoulder, Culligan’s car swerved into the oncoming lane of traffic and collided head-on with a blue Lexus sedan, killing its driver and seriously injuring its passenger. Following the traffic collision, Culligan climbed out of the Jeep Wrangler’s sunroof and fled the scene. Law enforcement later found him hiding in a drainpipe.
Culligan was under the influence of illegal narcotics at the time of the accident and during his post-arrest interview, he admitted to using drugs before operating the Jeep, crashing the Jeep into another car and fleeing the scene of the accident.
Culligan has been in federal custody since June 2020.
United States District Judge André Birotte Jr. has scheduled a January 7, 2022 sentencing hearing, at which time Culligan will face a statutory maximum sentence of eight years in federal prison.
The United States Air Force Office of Special Investigations investigated this matter. The California Highway Patrol and Santa Barbara County Sheriff’s Office provided substantial assistance.
Assistant United States Attorney Joseph D. Axelrad of the Violent and Organized Crime Section is prosecuting this case.
South Korean National Pleads Guilty to Federal Criminal Charge for Poaching Wild Succulent Plants for Illegal Exportation to AsiaRead the Press Release
LOS ANGELES – A South Korean national who was extradited from South Africa pleaded guilty today to a federal criminal charge for attempting to illegally export to Asia live Dudleya succulent plants worth more than $600,000 that he and his co-schemers had pulled out of the ground at remote state parks in Northern California.
Byungsu Kim, 46, pleaded guilty to one count of attempting to export plants taken in violation of state law.
According to his plea agreement, on October 11, 2018, Kim and co-defendants Youngin Back, 47, and Bong Jun Kim, 46, traveled by car from Los Angeles International Airport to Crescent City, California. From October 14 to October 16, Kim and the co-defendants harvested numerous Dudleya plants from DeMartin State Beach in Klamath, California, and from Del Norte Coast Redwoods State Park.
Kim admitted he knew the taking of the Dudleya plants was unlawful and that he had conducted internet searches on his smartphone for “poaching succulents” and “dudleya” and had read a press release regarding the arrest and convictions of three other Dudleya poachers.
On October 22, 2018, Kim and the co-defendants traveled from Northern California to a nursery in Vista and unloaded the Dudleya plants that they had poached during the previous week. The following day, the men traveled to Russian Gulch State Park in Mendocino County, where, wearing backpacks and using hand-held radios to communicate, they pulled additional Dudleya plants out of the ground before returning once again to the Vista nursery.
Prior to the plants’ shipment, Byungsu Kim scheduled an inspection with a county agriculture official at the Vista nursery and falsely told her the government-issued certificate necessary for the plants’ exportation should list 1,397 Dudleya plants (259 pounds/117.5 kilograms) for export to South Korea and that the “place of origin” of the plants was San Diego County.
The defendants then transported the plants to a commercial exporter in Compton, to whom Byungsu Kim intended to present the fraudulently obtained certificate so the Dudleya plants could be smuggled to South Korea. When the defendants left, local law enforcement executed a search warrant at the cargo shipping company and found more than 3,000 Dudleya plants in boxes that were labeled “Rush” and “Live Plants.” These were the plants the defendants had pulled out of the ground from public lands in Northern California.
Kim admitted that at the time that he and the co-defendants engaged in the illegal conduct, they did not have a scientific permit nor a federal permit that would allow them to harvest Dudleya plants. He also admitted to being the scheme’s organizer.
Although California law enforcement officials had confiscated Kim’s passport following his arrest on state charges relating to his October 2018 conduct, Kim fraudulently obtained a new South Korean passport in January 2019 by falsely claiming to the South Korean Consulate in Los Angeles that he had lost his passport.
In May 2019, soon after Kim learned of the federal criminal charges pending against him in this case, he and Back fled to Mexico on foot through the Tijuana-San Ysidro border crossing. Using his fraudulently obtained passport, Kim then flew with Back from Mexico to China, and then flew from China to South Korea.
Kim was arrested in South Africa in October 2019 for charges related to a similar scheme in which he illegally collected plants from protected areas in that nation to export to South Korea. Kim pleaded guilty to the criminal charges in South Africa and was extradited to the United States in October 2020. He has remained in federal custody since that time.
United States District Judge George H. Wu has scheduled a January 13, 2022 sentencing hearing, at which time Kim will face a statutory maximum sentence of five years in federal prison.
Bong Jun Kim pleaded guilty in July 2019 to one count of attempting to export plants taken in violation of state law. He served four months in federal custody and was released in October 2019 after Judge Wu imposed a sentence of time served.
Back remains a fugitive.
The California Department of Fish and Wildlife, the United States Fish and Wildlife Service, Homeland Security Investigations, U.S. Customs and Border Protection, San Diego County’s Department of Agriculture, Weights and Measures, the U.S. Department of Agriculture, and the California State Parks investigated this matter. The Justice Department’s Office of International Affairs provided significant assistance in securing the defendant’s extradition from South Africa.
Assistant United States Attorneys Matthew W. O’Brien and Dennis Mitchell of the Environmental and Community Safety Crimes Section are prosecuting this case.
One-Time EDD Employee Agrees to Plead Guilty for Fraudulently Obtaining More Than $1.6 Million in COVID-Related Jobless BenefitsRead the Press Release
LOS ANGELES – A former California Employment Development Department (EDD) employee has agreed to plead guilty to a federal criminal charge for causing nearly 200 fraudulent COVID-related unemployment relief claims to be filed in other people’s names, resulting in more than $1.6 million in ill-gotten gains, the Justice Department announced today.
Gabriela Llerenas, a.k.a. “Maria G. Sandoval,” 44, of Perris, signed a plea agreement that was filed today in which she has agreed to plead guilty to a single-count information charging her with mail fraud.
Court records show that Llerenas previously worked at EDD as a disability insurance program representative. She resigned in March 2002 after admitting to fraudulently authorizing and paying disability benefits administered by EDD. She was sentenced to 37 months in federal prison in connection with that scheme.
The new scheme that Llerenas has admitted running took advantage of the expanded eligibility for unemployment insurance (UI) benefits made possible by the Coronavirus Aid, Relief, and Economic Security (CARES) Act passed by Congress and signed into law in March 2020. The CARES Act provided additional UI benefits to qualified individuals and helped provide UI benefits during the COVID-19 pandemic to people who did not otherwise qualify, including business owners, self-employed workers, independent contractors, and those with a limited work history.
From April to October 2020, Llerenas filed and caused the filing with EDD of fraudulent unemployment insurance benefits that falsely asserted the named claimants were self-employed independent contractors – often identifying them as cake decorators or event attendants – who were negatively affected by the COVID-19 pandemic. Llerenas obtained some of the names, Social Security numbers and other identifying information she used to submit the fraudulent claims through her prior work as a tax preparer.
In her plea agreement, Llerenas also admitted to falsely stating on some of the applications that the claimants were residents of California entitled to unemployment insurance benefits administered by EDD when in fact they lived elsewhere. She also admitted that, on some applications, she inflated the amounts of income she reported for the claimant to maximize the benefit amount. She also admitted to sometimes filing a dozen or more fraudulent EDD claims in a day.
As a result of the fraudulent unemployment benefits applications that Llerenas filed and caused to be filed, EDD authorized Bank of America to mail debit cards in the names of the claimants to addresses she provided, including her residence, her husband’s business location, her mother’s apartment and the addresses of friends and other family members.
Llerenas admitted that she charged the named claimants a fee for filling the applications, which was often paid out of the fraudulently obtained benefits. In at least one case, she told the named claimant that she was still employed at EDD and could control the distribution of the unemployment insurance benefits, and then demanded an additional payment for “releasing” the benefits.
In total, 197 debit cards were fraudulently issued because of this scheme, resulting in losses to EDD and the United States Treasury that Llerenas has admitted were at least $1,633,487.
Llerenas is scheduled to make her initial appearance on September 22. The criminal offense to which Llerenas has agreed to plead guilty carries a statutory maximum sentence of 20 years in federal prison.
The Department of Labor-Office of Inspector General, EDD-Investigations Division, Homeland Security Investigations, United States Postal Inspection Service, Federal Bureau of Investigation and Social Security Administration-Office of Inspector General investigated this matter.
Assistant United States Attorney Ranee A. Katzenstein, Chief of the Major Frauds Section, is prosecuting this case.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud.
The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. 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.
International money launderer sentenced to federal prison in cyber-crime conspiracies responsible for intended loss of nearly $60 millionRead the Press Release
SAVANNAH, GA: A Canadian man who conspired to launder tens of millions of dollars stolen in various wire and bank fraud schemes – including a massive online banking theft by North Korean cyber criminals – has been sentenced to nearly 12 years in federal prison.
Ghaleb Alaumary, 36, of Mississauga, Ontario, was sentenced to a total of 140 months in prison after pleading guilty to two counts of Conspiracy to Commit Money Laundering, said David H. Estes, Acting U.S. Attorney for the Southern District of Georgia. U.S. District Court Judge R. Stan Baker also ordered Alaumary to pay $30,703,946.56 in restitution to victims and to serve three years of supervised release after completion of his prison sentence. There is no parole in the federal system.
“This defendant served as an integral conduit in a network of cybercriminals who siphoned tens of millions of dollars from multiple entities and institutions across the globe,” said Acting U.S. Attorney Estes. “He laundered money for a rogue nation and some of the world’s worst cybercriminals, and he managed a team of coconspirators who helped to line the pockets and digital wallets of thieves. But U.S. law enforcement, working in conjunction with its partners throughout the world, will bring to justice fraudsters who think they can hide behind a computer screen.”
As described in unsealed court documents and proceedings, Alaumary and his coconspirators used business email compromise schemes, ATM cash-outs, and bank cyber-heists to steal money from victims and then launder the money through bank accounts and digital currency. He previously pled guilty in the Southern District of Georgia in two money laundering cases.
In the first case, which was filed and investigated in the Southern District of Georgia, Alaumary conspired with others who sent fraudulent “spoofed” emails to a university in Canada in 2017 to make it appear the emails were from a construction company requesting payment for a major building project. The university, believing it was paying the construction company, wired $11.8 million CAD (approximately $9.4 million USD) to a bank account controlled by Alaumary and his coconspirators. Alaumary then arranged with individuals in the U.S. and elsewhere to launder the stolen funds through various financial institutions.
Weeks later, Alaumary arranged for a coconspirator in the United States to make several trips to Texas to impersonate wealthy bank customers in a scheme to steal hundreds of thousands of dollars from victims’ accounts using the victims’ stolen personally identifiable information. A telephone call with a coconspirator discussing the fraud took place in Savannah.
In the second case, which was transferred to the Southern District of Georgia from the Central District of California for his guilty plea and sentencing, Alaumary recruited and organized individuals to withdraw stolen cash from ATMs; he provided bank accounts that received funds from bank cyber-heists and fraud schemes; and, once the ill-gotten funds were in accounts he controlled, Alaumary further laundered the funds through wire transfers, cash withdrawals, and by exchanging the funds for cryptocurrency. The funds included those from a 2019 North Korean-perpetrated cyber-heist of a Maltese bank. Other victims of Alaumary’s crimes included banks headquartered in India, Pakistan, and Malta, as well as companies in the U.S. and U.K., individuals in the U.S., and a professional soccer club in the U.K.
“International money launderers provide critical services to cybercriminals, helping hackers and fraudsters to avoid detection and hide their illicit profits,” said Assistant Attorney General Kenneth A. Polite Jr. for the Justice Department’s Criminal Division. “Small and large companies, a university, banks, and others lost tens of millions of dollars in this scheme. Alaumary’s sentence today reflects how seriously the Department of Justice considers the critical role that money launderers play in global cybercrime.”
“The sentencing of the defendant in this case speaks to the value of investigative collaboration across borders,” said U.S. Secret Service Atlanta Field Office SAIC Steven R. Baisel. “In spite of the complicated, international nature of this criminal enterprise, the defendant and his co-conspirators were still brought to justice.”
“This case is an example of our relentless determination to hold criminals accountable no matter how sophisticated their crimes may seem,” said Phil Wislar, Acting Special Agent in Charge of FBI Atlanta. “The arrest and sentencing of cyber criminals like Alaumary, who feel safe hiding behind a computer screen, are only possible through persistent investigative efforts of the FBI and our close collaboration with our U.S. and international partners.”
Alaumary is the fourth defendant in this investigation sentenced in the Southern District of Georgia. Uchechi Ohanaka, Kelvin Desangles, and Jennal Aziz previously pled guilty in federal court to fraud felonies and were sentenced to terms totaling more than 200 months in prison.
The cases were investigated by the U.S. Secret Service Savannah Resident Office with assistance from the Los Angeles Field Office and the Global Investigative Operations Center, the FBI, and the Royal Canadian Mounted Police, and prosecuted by the Criminal Division of the U.S. Attorney’s Office for the Southern District of Georgia, Senior Trial Attorney Mona Sedky of the Computer Crime and Intellectual Property Section of the U.S. Department of Justice, and Assistant U.S. Attorney Khaldoun Shobaki of the U.S. Attorney’s Office for the Central District of California.
International Money Launderer Sentenced to over 11 Years in Federal Prison for Laundering Millions from Cyber Crime SchemesRead the Press Release
SAVANNAH, Georgia – A Canadian man was sentenced today to 140 months in federal prison for conspiring to launder tens of millions of dollars stolen in various wire and bank fraud schemes, including a massive online banking theft by North Korean cyber criminals that is part of a pending case in Los Angeles.
Ghaleb Alaumary, 36, of Mississauga, Ontario, who is a dual Canadian and U.S. citizen, was sentenced after pleading guilty to two counts of conspiracy to commit money laundering in two cases, one of which was filed in Los Angeles. As part of his sentence that covers both cases, Alaumary was ordered to pay more than $30 million in restitution to victims.
According to court documents, Alaumary and his coconspirators used business email compromise schemes, ATM cash-outs, and bank cyber-heists to steal money from victims and then launder the money through bank accounts and digital currency.
In the Los Angeles case that was transferred to the Southern District of Georgia for his guilty plea and sentencing, Alaumary recruited and organized individuals to withdraw stolen cash from ATMs; he provided bank accounts that received funds from bank cyber-heists and fraud schemes; and, once the ill-gotten funds were in accounts he controlled, Alaumary further laundered the funds through wire transfers, cash withdrawals, and by exchanging the funds for cryptocurrency. The funds included those from North Korean-perpetrated crimes, including the 2019 cyber-heist of a Maltese bank and the 2018 ATM cash-out theft from BankIslami in Pakistan. Other victims of Alaumary’s crimes included a bank headquartered in India, as well as companies in the U.S. and U.K., individuals in the U.S., and a professional soccer club in the United Kingdom.
In the case filed by the Southern District of Georgia, Alaumary conspired with others who sent fraudulent “spoofed” emails to a university in Canada in 2017 to make it appear the emails were from a construction company requesting payment for a major building project. The university, believing it was paying the construction company, wired 11.8 million Canadian dollars (approximately 9.4 million U.S. dollars) to a bank account controlled by Alaumary and his coconspirators. Alaumary then arranged with individuals in the U.S. and elsewhere to launder the stolen funds through various financial institutions. Weeks later, Alaumary arranged for a coconspirator in the United States to make several trips to Texas to impersonate wealthy bank customers in a scheme to steal hundreds of thousands of dollars from victims’ accounts using the victims’ stolen personally identifiable information.
The investigations of Alaumary were conducted by the United States Secret Service’s Savannah Field Office, the FBI’s Los Angeles Field Office, and the United States Secret Service’s Los Angeles Field Office and Global Investigative Operations Center. The FBI’s Criminal Investigative Division also provided substantial assistance.
The Los Angeles case was handled by Assistant U.S. Attorney Khaldoun Shobaki of the Cyber and Intellectual Property Crimes Section.
Inland Empire Man Who Worked at Group Homes and Mental Health Facilities Indicted on Series of Child Exploitation OffensesRead the Press Release
LOS ANGELES – A certified nursing assistant who worked at a Southern California group home for severely disabled patients was indicted today for multiple child exploitation crimes, including filming himself sexually abusing children at the group home facility.
A federal grand jury today charged Steve Jackson Rodriguez, 37, of Pomona, in a six-count indictment that includes four counts alleging he produced child pornography.
Rodriguez, who was arrested pursuant to a criminal complaint on August 25, is scheduled to be arraigned on the indictment on September 16. Following the arraignment in Los Angeles, the case will move to a federal judge in Riverside.
The indictment alleges Rodriguez produced child pornography with three minor victims, two of whom were severely disabled patients being housed at an Inland Empire group home that employed Rodriguez. One of the disabled victims was 8 years old when Rodriguez filmed the illegal sexual conduct.
The indictment charges Rodriguez with filming his sexual encounters with another minor victim, whom Rodriguez enticed into engaging in sex and lewd acts.
Special agents with Homeland Security Investigations are investigating this matter and have reason to believe that Rodriguez may have had illegal sexual conduct with other victims during his employment at group homes and psychiatric care facilities where he has worked as a certified nursing assistant. If you have any information about potential victims in this matter, please call the HSI tip line at (866) 347-2423.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
If convicted of the charges in the indictment, Rodriguez would face a statutory maximum penalty of life in federal prison. He also would face a mandatory minimum sentence of 15 years in federal prison for each of the four counts alleging the production of child pornography.
The ongoing investigation in this case is being conducted by HSI as part of the Los Angeles Internet Crimes Against Children Task Force (ICAC). The investigation began in July when the National Center for Missing and Exploited Children provided information to ICAC.
Assistant United States Attorney Scott M. Lara of the Violent and Organized Crime Section is prosecuting this case.
Glendale Man Agrees to Plead Guilty in Federal Hate Crime Case for Attacking Family-Owned Restaurant and Making Death ThreatsRead the Press Release
LOS ANGELES – A Glendale man has agreed to plead guilty to federal criminal charges for attacking five victims at a family-owned Turkish restaurant last year while shouting anti-Turkish slurs, hurling chairs at the victims and threatening to kill them, the Justice Department announced today.
William Stepanyan, 23, has agreed to plead to one count of conspiracy and one hate crime charge, according to a plea agreement filed Monday in United States District Court. He is expected to enter a guilty plea to the felony charges in the coming weeks.
Turkey and Armenia are two neighboring countries in the Caucasus region of Asia that have historically experienced significant conflict, part of which has stemmed from Turkey’s support of Azerbaijan in its border conflict with Armenia. When a new war broke out between Armenian and Azeri military forces in September 2020, tensions in Turkish and Armenian communities escalated worldwide, including in the United States. Numerous protests and counter-protests, pitting individuals of Armenian and Turkish descent against one another, took place in Los Angeles County.
According to his plea agreement, on November 4, 2020, Stepanyan, who is Armenian-American, sent a text message saying that he planned to go “hunting for [T]urks.” Later that day, Stepanyan met with his co-defendant Harutyun Harry Chalikyan, 24, of Tujunga, and other Armenian-Americans to protest what they considered to be Turkish aggression against Armenians, express their contempt for Turkey and show their support for Armenia.
Stepanyan, Chalikyan and other Armenian-Americans then drove to the family-owned restaurant, where Stepanyan and Chalikyan stormed into the restaurant and attacked the victims inside. Stepanyan and Chalikyan, who were both wearing masks during the attack, flung chairs at the victims while shouting derogatory slurs about Turkish people. Four of the five victims were of Turkish descent. At least one of the defendants threatened to kill the victims, shouting: “We came to kill you! We will kill you!”
During the attack, multiple victims were injured, including one individual who lost feeling in their legs and collapsed multiple times due to the injury. Also, during the attack, Stepanyan ripped out the restaurant’s computer terminals and stole a victim’s iPhone.
The restaurant suffered at least $20,000 in damage and had to close temporarily, resulting in thousands of dollars in lost revenue.
After he enters the guilty pleas to the two felony offenses, Stepanyan will face a statutory maximum sentence of 15 years in federal prison.
Chalikyan is scheduled to go on trial in this matter on October 26. He has pleaded not guilty to one count of conspiracy and five hate crime charges.
The FBI conducted the investigation in this matter and received substantial assistance from the Beverly Hills Police Department.
Assistant U.S. Attorney Lindsey Greer Dotson of the Public Corruption and Civil Rights Section, and Trial Attorney Michael J. Songer of the Justice Department’s Civil Rights Division are prosecuting the case.
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.