Central District of California
Press releases recorded for this federal judicial district.
Private Security Employee Arrested on Criminal Complaint Alleging He Falsely Impersonated a Federal Law Enforcement AgentRead the Press Release
SANTA ANA, California – A private security employee at an Orange County retirement community was arrested today on a criminal complaint alleging he pretended to be a federal agent.
Donovan Pham Nguyen, 34, of Riverside, is charged with one count of false impersonation of a federal officer or employee, according to a criminal complaint unsealed today. He is scheduled to make his initial appearance this afternoon in United States District Court in Santa Ana.
According to an affidavit filed with the complaint, Nguyen for years pretended to be a special agent with Homeland Security Investigations (HSI) and used the false title to obtain things of value. Nguyen never worked for HSI, although he previously was a privately contracted security guard at a Department of Homeland Security (DHS) facility. He left that job in 2015 after an internal investigation was launched resulting from allegations that he printed fake HSI identification documents, the affidavit states.
In May 2019, while employed for a private security company at a retirement community in Orange County, Nguyen allegedly claimed his false title to agents with the U.S. Department of State’s Diplomatic Security Service (DSS) preparing to execute an arrest warrant.
In June 2020, Nguyen discussed a potential criminal investigation with members of the Riverside County District Attorney’s Office after an introduction from a mutual friend. At the meeting, Nguyen again purported to be an HSI employee, according to the affidavit. Following the meeting, Nguyen informed the District Attorney’s Office that, after discussing the matter with his supervisor, HSI could not assist the district attorney in the investigation.
Nguyen allegedly used a false DHS identification to purchase firearms, which allowed him to avoid taking and paying for certain firearm safety courses required by California law. He also used his purported duties as an HSI special agent to excuse his frequent absences from work at a private security firm.
His coworkers at the private security firm reported seeing an HSI badge, a DHS plaque, and various tactical gear, including a ballistic shield, inside of Nguyen’s office. They also reported that Nguyen’s personal vehicle had been equipped with red and blue lights and a siren, the affidavit states. Nguyen also handed out HSI memorabilia, mugs and coins to people at that office.
Nguyen’s LinkedIn social media profile posted his current employment as “Department of Homeland Security Agent,” indicating he was employed with DHS since June 2008. Nguyen also appeared in a YouTube video that purports to be an interview of him as a long-time HSI special agent discussing immigration policies, according to the affidavit.
A complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
If convicted, Nguyen would face a statutory maximum sentence of three years in federal prison.
Homeland Security Investigations and U.S. Immigration and Customs Enforcement’s Office of Professional Responsibility investigated this matter. These DHS agencies received assistance from the Riverside County District Attorney’s Office, the U.S. Department of State’s Diplomatic Security Service, and the Orange Police Department.
This case is being prosecuted by Assistant United States Attorneys John A. Balla and Jerry C. Yang of the Riverside Branch Office.
Ex-Company Controller Who Embezzled $2.8 Million from Employer and Cheated on His Taxes Sentenced to More Than 7 Years in Federal PrisonRead the Press Release
LOS ANGELES – A former controller for a Burbank-based commercial printing company was sentenced today to 87 months in federal prison for embezzling $2.8 million from his employer and failing to report the stolen funds as income to the IRS.
Sean Edin Talaee, 63, of Glendale, was sentenced by United States District Judge Otis D. Wright II, who also ordered him to pay $2,933,585 in restitution. Talaee
Talaee pleaded guilty in May 2019 to one count of mail fraud and one count of subscribing to a false income tax return.
From October 2015 to June 2018, Talaee worked as the controller overseeing the accounting and tax payments of Printograph, Inc., a commercial printing company that does business as GotPrint.com. During this time period, Printograph made a series of periodic estimated tax payments based on the company’s expected gross income, deductions, and credits for each year. Talaee enabled these estimated tax payments by bringing company checks to Printograph’s president and sole owner – who had signing authority for the company’s bank account – for her signature prior to their submission to the IRS.
On at least eight separate occasions, Talaee obtained company checks from Printograph’s president but instead inserted his own taxpayer information when filling out the IRS voucher forms that accompanied the estimated tax payments. By using his own information – and not the company’s – Talaee was able to claim the estimated tax payments for himself and caused the IRS to credit the payments to his own personal account, thereby embezzling the funds from Printograph and effectively laundering the embezzled proceeds through the IRS.
During the course of the scheme, Talaee embezzled $2.8 million from his employer and falsely claimed estimated tax payments in that amount for the years 2015, 2016 and 2017. These estimated tax payments allowed Talaee to receive a total of $2,778,994 in fraudulent tax refunds for these years, court papers state. Talaee failed to report the embezzled money as income for these tax years, causing a total tax loss of $740,085.
“(Talaee) embezzled a significant amount of money from Printograph and exposed the company – and its owner personally – to potential tax liability stemming from his theft of the company’s tax payments,” prosecutors wrote in their sentencing memorandum. “He did so repeatedly over the course of two years for his own personal gain.”
IRS Criminal Investigation and the FBI investigated this matter.
This case was prosecuted by Assistant United States Attorney Alexander C.K. Wyman of the Major Frauds Section.
Rancho Cucamonga Businessman Sentenced to One Year in Prison for Exploiting Immigrant Farmworkers by Charging Illegal Visa FeesRead the Press Release
SANTA ANA, California – The owner of a Rancho Cucamonga-based farm labor recruiting company was sentenced today to 12 months in federal prison for his role in an immigration fraud scheme that illegally charged Mexican nationals thousands of dollars to obtain H-2A work visas and additional money for expenses once they arrived in the United States.
Jorge Vasquez, 60, of Fontana, the owner of H-2A Placement Services, was sentenced by United States District Judge Josephine L. Staton, who also ordered Vasquez to pay $135,389 in restitution. Vasquez pleaded guilty in June 2019 to one count of conspiracy and one count of aiding and abetting fraud in foreign labor contracting.
Vasquez and co-defendant Melquiades Jacinto Lara, 64, of Santa Paula, the owner of J&D Harvesting, which contracted workers to farms in Ventura County, conspired to commit mail fraud, false swearing in immigration matters, and fraud in foreign labor contracting.
The H-2A visa program allows employers to hire foreign, short-term agricultural workers when the employer cannot find suitable workers in the United States. H-2A labor contractors provide foreign workers to farms and generally are responsible for recruiting, transporting and housing the foreign workers. Before the foreign workers can receive visas, several government agencies must certify the need for foreign workers and determine that foreign workers would not adversely impact workers already in the United States.
In addition to provisions designed to protect domestic workers, the H-2A program has rules designed to protect foreign workers from exploitation, including prohibitions from charging the foreign workers for government approvals, equipment needed to perform their jobs, transportation to and from the fields, and costs associated with housing.
As part of the scheme, Vasquez travelled to Mexico to recruit farmworkers, who were charged as much as $3,000 to obtain their H-2A visas.
In addition to illegally charging the foreign workers, Vasquez also made false promises to the workers about how long the visas would be valid and failed to tell the workers that they would be charged for housing, food and transportation.
Vasquez also promised an H-2A visa, in exchange for $3,500 to $4,000, to an undercover agent with the Labor Department’s Office of Inspector General, who Vasquez believed was an undocumented individual working in the construction industry in Las Vegas and had no interest in working in the agricultural industry.
Vasquez also illegally agreed to provide visas to individuals already present in the United States in exchange for a fee of up to $4,000.
In relation to the costs being borne by the foreign workers, Vasquez and Jacinto allegedly filed documents with federal authorities that contained false statements in connection with their application for visas for 75 workers to harvest lemons, avocados and oranges. Investigators have reviewed USCIS records that indicate that Vasquez and Jacinto have filed petitions for more than 350 farmworkers from 2012 until May 2018.
Jacinto pleaded guilty to two felonies – conspiracy and fraud in foreign labor contracting – and served a six-month federal prison sentence.
Co-defendant Ricardo Mendoza Oseguera, 41, of Santa Paula, the owner of Discoteca Mi Pueblito, a music and convenience store in Santa Paula, which redeemed vouchers given to workers for J&D Harvesting after deducting fees from the workers’ pay, pleaded guilty to one count of operating an unlicensed money transmitting business. He is scheduled to be sentenced on November 20.
This matter was investigated by the United States Department of Labor - Office of Inspector General, Homeland Security Investigations, and the Diplomatic Security Service.
This case was prosecuted by Assistant United States Attorneys Damaris Diaz of the Violent and Organized Crime Section and Jonathan S. Galatzan of the Asset Forfeiture Section.
Bay Area Man Pleads Guilty to Operating Unlicensed Money Transmitting Business that Facilitated International Fraud SchemeRead the Press Release
LOS ANGELES – An Alameda County resident has pleaded guilty to operating an unlicensed money transmitting business that provided essential services to a fraudulent technical-support company, the Justice Department announced today.
Dapinderjeet Singh, 24, of Newark, California, pleaded guilty Thursday afternoon to a one-count felony information before United States District Judge Percy Anderson.
Singh admitted that he owned and operated Alpha Technologies LLC, which claimed to offer technical-support services to the public. In reality, Alpha was simply a conduit for funds to be transmitted from victims of a technical-support fraud scam to the scam’s perpetrators.
According to court documents, an India-based call center lied to victims about virus and hacking attacks on their computers and induced victims to send money to Alpha Technologies, purportedly to fix their computers. Singh, through Alpha Technologies, received victim proceeds and forwarded them to India-based scheme operators.
“This defendant provided an essential service to criminals behind an international fraud by providing what appeared to be a legitimate business, but in reality was simply a funnel to direct stolen funds to con artists,” said United States Attorney Nick Hanna. “This case demonstrates how we dismantle criminal organizations by targeting those who orchestrate the illegal conduct, as well as those who play key roles to facilitate the delivery of ill-gotten gains.”
“The defendant provided crucial assistance to foreign fraudsters who stole from consumers, including many elderly victims, under the guise of technical support,” said Ethan P. Davis, Acting Assistant Attorney General for the Justice Department’s Civil Division. “Time and time again, the Civil Division’s Consumer Protection Branch has shown that both perpetrators and facilitators of elder fraud will be held accountable.”
“Mr. Singh admitted to his role in a scheme to defraud vulnerable computer users, including many elderly victims, who were led to believe their computers had been compromised and who paid for the purported expertise of others,” said John F. Bennett, the Acting Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Computer users should avoid unsolicited offers they receive by phone or online and seek technical assistance from trusted sources only, particularly when demands for cash are being made.”
“Fraud schemes that cheat vulnerable consumers, especially the elderly, will not be tolerated,” said Makan Delrahim, Assistant Attorney General for the Justice Department’s Antitrust Division. “The Antitrust Division is pleased to lend the time and talent of its prosecutors to the Elder Justice Initiative.”
Singh admitted that he worked with India-based scheme operators from late 2016 until February 2018. In addition to opening Alpha Technologies as a corporate entity, Singh maintained post office boxes that were used to receive payments sent by victims, and he forwarded proceeds to scheme operators in India and elsewhere. Through Alpha, Singh engaged in a money transmitting business that was neither licensed by the State of California, nor registered with the Financial Crimes Enforcement Network or the U.S. Department of Treasury.
Singh is scheduled to be sentenced by Judge Anderson on November 2.
Three other individuals previously have been charged in this investigation. In 2019, Indian citizens Aman Mehndiratta and Aman Kheira were charged with wire fraud in connection with the scheme. The criminal complaint alleges that Mehndiratta and Kheira recruited another California resident – Parmjit Brar – to serve as a payment gateway for the scheme. According to the criminal complaint, many victims lost hundreds of dollars, while some elderly victims lost hundreds of thousands of dollars. In 2019, Parmjit Brar pleaded guilty to conspiracy to commit wire fraud, and he is scheduled to be sentenced on September 28 by Judge Anderson.
This matter was investigated by the FBI.
The prosecution is being handled by Assistant United States Attorney Ranee A. Katzenstein, Chief of the Major Frauds Section; DOJ Trial Attorney Justin Murphy of the Antitrust Division; and Senior Counsel Richard Goldberg of the Civil Division’s Consumer Protection Branch.
Grand Jury Charges 12 in Scheme to Defraud National Retailer Out of Millions of Dollars in Electronics by Using Fraudulent DiscountsRead the Press Release
LOS ANGELES – Federal prosecutors have unsealed a superseding indictment charging a dozen defendants in an illegal scheme to buy millions of dollars’ worth of electronics from a national retailer by using fraudulently acquired discounts and employee identification numbers, the Justice Department announced today.
The 54-count grand jury indictment unsealed Wednesday charges the defendants, variously, with multiple felonies, including conspiracy, mail fraud, wire fraud and bank fraud, and aggravated identity theft.
Four of the 12 defendants – including lead defendant, Abdallah Osseily, 34, of Irvine – were arrested Wednesday by special agents of the FBI. Three of the defendants were arraigned Wednesday afternoon in United States District Court in Santa Ana and were ordered released on bond. A fourth defendant was arrested in Arizona on Wednesday and he made his initial court appearance in Phoenix federal court. An October 13 trial date has been set for this case.
The indictment’s remaining eight defendants are expected to appear in federal court at a later date.
The indictment alleges that, from July 2014 to March 2020, Osseily and co-conspirators acting at his direction, unlawfully purchased millions of dollars’ worth of electronics from a company, referred to in the indictment as “U.S. Retailer 1.” These illegal actions were taken through the unauthorized use of discounts and unique identification numbers, such as those reserved for current and former employees and for military service members, the indictment alleges. In other instances, the defendants allegedly exploited U.S. Retailer 1’s return policies to obtain store credits in amounts greater than the prices they actually paid for the merchandise.
The defendants traveled to hundreds of U.S. Retailer 1 locations across the country on purchasing trips and shipped the merchandise back to Osseily’s Irvine residence or – in one case of 500 pounds of electronic goods – to Los Angeles International Airport. Osseily then resold the merchandise to third parties and underreported his profits to the IRS, according to the indictment.
The new indictment replaces an indictment filed in June 2019 that charged only Osseily with bank fraud and attempted bank fraud, attempted unlawful procurement of naturalization, and making a false statement in an immigration proceeding.
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, Osseily would face a statutory maximum sentence of more than 100 years in federal prison.
The FBI’s Joint Terrorism Task Force and IRS Criminal Investigation investigated this matter.
This case is being prosecuted by Assistant United States Attorneys Annamartine Salick, Chief of the Terrorism and Export Crimes Section; Matthew J. Jacobs, also of the Terrorism and Export Crimes Section; and Daniel G. Boyle of the Asset Forfeiture Section.
Ventura Man and Former Music Teacher Pleads Guilty to Federal Criminal Charge of Production of Child PornographyRead the Press Release
LOS ANGELES – A former music teacher who contracted with a number of school districts in Southern California pleaded guilty today to a federal child pornography charge.
John Edward Zeretzke, 61, of Ventura, pleaded guilty to one count of production of child pornography.
He previously pleaded guilty in Orange County Superior Court to six state counts of committing lewd or lascivious acts with minors under the age of 14 years old.
According to his plea agreement in the federal case, from December 2016 to February 2017, Zeretzke used a computer and the internet to communicate with a female minor and coerced her into producing child pornography. The victim did not live in California at the time.
United States District Judge Fernando M. Olguin has scheduled a December 3 sentencing hearing, at which time Zeretzke will face a mandatory minimum sentence of 15 years in federal prison and a statutory maximum sentence of 30 years in federal prison. Zeretzke has been sentenced to 18 years in state prison and federal prosecutors are recommending an 18-year federal prison sentence that will run concurrently with his state prison sentence.
This case is a part of Project Safe Childhood, the Justice Department’s ongoing initiative to combat the plague of child exploitation crimes.
This matter was investigated by the United States Postal Inspection Service and the Los Angeles County Sheriff’s Department, Special Victims Bureau.
This case is being prosecuted by Assistant United States Attorney Justin R. Rhoades.
San Fernando Valley Man Charged with Fraudulently Obtaining COVID-Relief Loans for His Sham Sewing CompanyRead the Press Release
LOS ANGELES – A San Fernando Valley man now believed to have fled the United States today faces federal criminal charges today for allegedly obtaining more than $860,000 in Paycheck Protection Program (PPP) loans for a shell company and then transferring the bulk of his illicit gains to his personal bank accounts.
Arman Manukyan, 49, of Panorama City, was charged with one count of bank fraud and one count of aggravated identity theft in a criminal complaint filed Monday in United States District Court.
According to an affidavit in support of the complaint, Manukyan in June submitted two applications for PPP loans to Bank of America for $1.7 million on behalf of two shell companies registered in his name – Argo Global, Inc., and Express Wiring.
Manukyan allegedly claimed Argo Global was a sewing business with 73 employees and submitted to Bank of America, and later the Small Business Administration, false tax documents purporting to show wages and taxes for the company. The underwriting packet also did not include a list of employees or associates for Argo Global, which listed a virtual office address in Beverly Hills as its place of business, according to the affidavit. Ultimately, an $867,187 loan was approved for Argo Global, Inc.
Shortly after receiving the funds in Argo Global’s name, Manukyan allegedly transferred most of the balance to two of his personal bank accounts. When a bank investigator contacted Manukyan after one of his accounts had been frozen because of suspicious activity, he allegedly told the bank he was going to use the PPP loan to start a limousine business, contradicting what he wrote on his loan application, the affidavit states.
In June, Manukyan also allegedly submitted to Bank of America a loan application of $884,748 for Express Wiring, a shell company with a Glendale address. The Small Business Administration rejected the application, indicating it either had been submitted after the June 22 deadline for PPP loans or the allocated PPP funds had run out, according to the affidavit.
In July, a seizure warrant was executed on Manukyan’s bank accounts, recovering $866,019.
A search warrant executed at Manukyan’s home on July 22 revealed multiple debit cards used for unemployment benefits from the California Employment Development Department (EDD) that were in the names of different people, the affidavit states. Manukyan allegedly told law enforcement that he found two of the EDD cards on the street and decided to keep them, but insisted that he never used them. Investigators recovered another $118,474 from debit cards linked to Manukyan.
On August 9, law enforcement received information that Manukyan had boarded a flight from Mexico City inbound to Paris with a final destination of Minsk, Belarus, the affidavit states.
A complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
If convicted of both charges, Manukyan would face a statutory maximum sentence of 32 years in federal prison.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April, Congress authorized more than $300 billion in additional PPP funding.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.
This matter was investigated by Homeland Security Investigations, the Treasury Inspector General to the Tax Administration, the Small Business Administration – Office of Inspector General, the United States Postal Inspection Service, and the Employment Development Department, Investigation Division.
This case is being prosecuted by Assistant United States Attorney Andrew G. Brown of the Major Frauds Section.
Owner of Investment Firm That Managed over $1 Billion in Assets Arrested in Federal Case Alleging He Defrauded InvestorsRead the Press Release
LOS ANGELES – The founder and former CEO of an investment firm that specializes in debt instruments was arrested this morning on federal charges alleging he falsified financial records to fraudulently inflate the value of the funds he managed, allowing him to charge investors millions of dollars in unauthorized fees.
Brendan Ross, 47, of La Cañada Flintridge, who founded Direct Lending Investments, LLC (DLI) in 2012, was taken into custody by special agents of the FBI.
In conjunction with the unsealing of the criminal case, the United States Securities and Exchange Commission today filed a civil complaint today against Ross alleging he defrauded investors.
Today’s arrest was pursuant to a grand jury indictment filed on July 30 that charges Ross with 10 counts of wire fraud based on a scheme he executed between late 2013 and early 2019 to defraud investors in funds managed by DLI, a firm he still owns. Ross resigned as CEO in March 2019, and soon after the SEC filed a civil complaint against DLI, which resulted in the appointment of a court-ordered receiver in early April 2019.
By the summer of 2017, only five years after Ross founded DLI, the firm had over $1 billion in assets under management. According to the indictment, Ross allegedly directed DLI to invest the funds’ assets in, among other things, a company that loaned money to small businesses and retailers. The DLI funds made money when the loans performed, meaning that the borrowers made timely payments. The indictment alleges that, rather than disclose some of the loans were not performing, Ross falsified monthly reports to make it appear borrowers were making payments. The “payments” actually came from fee rebates given by the company originating the loans.
By lying about the true status of the loans, Ross caused DLI to overstate the value of these loans on the funds’ books and fraudulently inflate the funds’ value, according to the indictment. Specifically, Ross allegedly caused the monthly asset values of the funds to be cumulatively inflated by over $300 million over the course of about four years. By fraudulently inflating the value of the funds, Ross was able to collect millions of dollars in fees he otherwise would not have been able to charge to clients, according to the indictment.
To further his scheme and help conceal it, Ross allegedly arranged for the sale of approximately $55 million of the loans to a third-party buyer in the summer of 2017. Ross once again inflated the value of these loans by lying about their status, falsely telling the buyer that borrowers had been making payments on many of these loans, according to the indictment.
Ross is expected to be arraigned on the indictment this afternoon in United States District Court in downtown Los Angeles.
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.
Each of the 10 wire fraud counts in the indictment carries a statutory maximum sentence of 20 years in federal prison.
This matter was investigated by the FBI. The SEC provided substantial assistance during the criminal investigation.
This case is being prosecuted by Assistant United States Attorneys Poonam G. Kumar and Catherine S. Ahn of the Major Frauds Section.
Disbarred Beverly Hills Lawyer Pleads Guilty to Federal Charge that He Embezzled His Client’s Money and Used It to Pay Off DebtRead the Press Release
LOS ANGELES – A disbarred Beverly Hills lawyer pleaded guilty today to a federal criminal charge for scheming to steal more than $500,000 from a client he represented in bankruptcy proceedings and then use part of the money to pay off a $75,000 debt.
Alan F. Broidy, 65, pleaded guilty to a one-count information charging him with interstate transportation of stolen property.
According to his plea agreement, Broidy was hired to represent GRL-Mesa Investments LLC, a Phoenix-based company that filed for Chapter 11 protection in United States Bankruptcy Court in Los Angeles in December 2015.
In August 2016, the bankruptcy case was resolved and dismissed. Broidy was directed by the court to hold $2,469,926 in a client trust account – funds derived from the sale of assets belonging to GRL-Mesa’s bankruptcy estate. This money was supposed to be distributed to Mesa’s creditors.
Although he transferred a total of $1,937,400 of Mesa’s funds to its creditors, including $975 owed to the United States Trustee, Broidy did not return the remaining $512,526 that belonged to Mesa. Instead, he stole it and used it to pay for personal expenses.
Broidy admitted that on August 16, 2016, without his client’s knowledge or consent, he deposited $100,000 of Mesa’s money into his personal bank account, and then transferred $75,000 of that money to the bank account in New York of one of Broidy’s own creditors. Through these unauthorized transfers that were hidden from Mesa, Broidy arranged to pay one of his own expenses with Mesa’s money.
In July 2019, the State Bar of California disbarred Broidy based on the facts involved in this case.
United States District Judge Dale S. Fischer scheduled a November 30 sentencing hearing, at which time Broidy will face a statutory maximum sentence of 10 years in federal prison.
This matter was investigated by the FBI and the United States Trustee Program's Los Angeles Division.
This case is being prosecuted by Assistant United States Attorney Valerie L. Makarewicz of the Major Frauds Section.
Two O.C. Men Sentenced for Roles in Loan Modification Scam that Caused $3.5 Million in Losses to Distressed HomeownersRead the Press Release
SANTA ANA, California – Two Orange County residents were sentenced late this afternoon – with one being ordered to serve 12 years in federal prison – for their key roles in businesses that offered bogus modification programs to homeowners struggling to pay their mortgages in the wake of the 2008 financial crisis.
The two defendants who were associated with the Santa Ana-based company U.S. Homeowners Relief and several related businesses participated in a long-running “advance fee” scheme that caused more than 1,600 homeowners to suffer over $3.5 million in losses. Many victims lost their homes in subsequent foreclosure proceedings.
Aminullah “David” Sarpas, 37, of Irvine, was sentenced to 144 months in federal prison after being convicted by a jury in April 2019 of 10 counts of conspiracy and mail fraud.
Samuel Paul Bain, 40, of Tustin, was sentenced to five years in prison after pleading guilty in 2016 to conspiracy and mail fraud.
The two men – who were co-owners of U.S. Homeowners Relief, Greenleaf Modify, Waypoint Law Group, and American Lending Review – were sentenced by United States District Judge Cormac J. Carney.
Sarpas and Bain established U.S. Homeowners Relief in late 2008, using it and the subsequent companies to offer programs that falsely offered to help distressed homeowners obtain modifications of their mortgages. Sarpas and Bain initially marketed the programs themselves, but they also used TV, radio and internet advertisements, as well as a team of telemarketers to entice victims. Homeowners who agreed to participate – based on false claims, including that the companies had a 97 percent success rate in obtaining loan modifications that dramatically reduced monthly mortgage payments – were charged an advance fee ranging between $1,450 and $4,200. In short, the scheme “compounded these homeowners’ financial woes by inducing them to dig the hole they were in even deeper,” prosecutors wrote in court documents.
There were two other defendants named in a 2014 indictment. One man was acquitted of all counts. The fourth defendant – Louis Saggiani, 70, of Huntington Beach, pleaded guilty and is scheduled to be sentenced in October.
The investigation was conducted by the United States Postal Inspection Service, the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) and IRS Criminal Investigation.
This matter was prosecuted by Special Assistant United States Attorney Ryan G. Adams of the Santa Ana Branch Office and Assistant United States Attorney David H. Chao of the Major Frauds Section.
Doctor Among 10 Facing Federal Drug Trafficking Charges Related to Distribution of Opioids Through Bogus Pain Clinics Across SoCalRead the Press Release
SANTA ANA, California– Law enforcement authorities this morning arrested four defendants charged in two federal grand jury indictments alleging a narcotics trafficking ring that sold illegal opioid prescriptions for cash through a series of sham medical clinics.
Those charged in the indictments include Dr. John Michael Korzelius, 68, a.k.a. “Dr. K,” of Camarillo, who worked at a Santa Ana pain management clinic where he allegedly wrote medically unnecessary prescriptions to “patients” who paid cash. Over the course of two years, Korzelius and other medical professionals working under his guidance, prescribed approximately 439,090 pills of 30mg oxycodone – the highest dose of short-acting oxycodone available, and the dose most popular for the drug-abusing population, according to court documents.
The charges in this matter are the result of an investigation by agents with the DEA and IRS Criminal Investigation into ChiroMed, which operated a group of chiropractic, medical and wellness clinics in Los Angeles, Orange and San Bernardino counties. Korzelius, along with other medical professionals, including physician’s assistants, allegedly met with fraudulent patients and provided them with unnecessary prescriptions for drugs, including oxycodone.
The two grand jury indictments unsealed today charge 10 defendants with a variety of narcotics-related offenses, including conspiracy to distribute controlled substances, possession with intent to distribute oxycodone, distribution of fentanyl, and money laundering.
Along with Korzelius, the indictments charge:
- Justin Douglas Cozart, 42, of Woodland Hills, who operated and supervised the ChiroMed medical clinics;
- Damoon Joe Navarchi, 33, of Woodland Hills, who assisted Cozart in operating the clinics;
- Xavier Muduki Mabale, 42, of Anaheim, who is accused of recruiting sham patients to obtain fraudulent oxycodone prescriptions from the medical clinics;
- Mayra Barrios, 37, of Yorba Linda, who allegedly oversaw the day-to-day management of the medical clinics, including the issuance of fraudulent oxycodone prescriptions to sham patients;
- Harrison Maruje Mureithi, 42, of Norco, who allegedly coordinated the purchase, collection, packaging, and shipment of oxycodone to buyers on the East Coast;
- Duncan Wanjohi, 30, of Anaheim, who allegedly assisted Mureithi in the buying and shipping of narcotics;
- Pierre Delva, Jr., 33, a.k.a. “Big Head,” of Medford, Massachusetts, who allegedly provided financing to Mureithi to purchase bulk quantities of oxycodone; and
- Louise W. Mureithi, 69, of Anaheim, Harrison Mureithi’s mother, who allegedly received packages of cash sent to her son for oxycodone;
- Majid Nojavan, 42, of Laguna Niguel, charged in a spinoff case from the primary investigation, who allegedly advertised oxycodone for sale on Craigslist, sold fentanyl to an undercover police officer, and escorted the undercover police office to an Inglewood medical clinic to obtain a fraudulent oxycodone prescription.
Harrison Mureithi, Mabale, Louise Mureithi, and Nojavan were arrested by law enforcement this morning, and they are expected to make their initial court appearances this afternoon in United States District Court in Santa Ana. Korzelius, Cozart, Navarchi, and Barrios are being summonsed into court and are expected to make their initial appearances in United States District Court next week. Delva and Wanjohi are fugitives.
As a result of a two-year investigation into the fraudulent medical clinics, DEA agents seized 20,737 oxycodone pills, and $177,610 in cash. Law enforcement intercepted a mailed parcel contained a teddy bear stuffed with two bags of oxycodone pills.
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, the defendants each would face a statutory maximum sentences of at least 20 years in federal prison.
The investigation into the sham medical clinics was handled by the Drug Enforcement Administration and IRS Criminal Investigation. The Department of Health and Human Services, Office of Inspector General and the Torrance Police Department provided substantial assistance. The investigation of Majid Nojavan was handled by Homeland Security Investigations and the Costa Mesa Police Department.
These cases are being prosecuted by Assistant United States Attorneys Scott D. Tenley and Andrew M. Beshai of the Santa Ana Branch Office.
Crystal Geyser Water Bottler Ordered to Pay $5 Million Criminal Fine for Illegal Storage, Transportation of Arsenic-Laced WasteRead the Press Release
LOS ANGELES – The company that produces “Crystal Geyser Natural Alpine Spring Water” was sentenced today to three years of probation and ordered to pay criminal fines totaling $5 million for illegally storing and transporting hazardous waste created from filtering arsenic out of spring water at its facility in Olancha, California.
United States District Judge Dolly M. Gee also ordered CG Roxane LLC to implement a compliance program within 90 days to ensure it complies with federal and state environmental laws and implement that program within 180 days of today’s sentencing hearing. The compliance program includes the company’s retention of a qualified and experienced third-party environmental auditor to conduct annual audits of CG Roxane’s Olancha facility.
The company pleaded guilty on January 9 to one count of unlawful storage of hazardous waste and one count of unlawful transportation of hazardous material. The financial penalty Judge Gee imposed today consisted of a $2.5 million criminal fine for each count.
CG Roxane obtained water by drawing groundwater from the eastern slope of the Sierra Nevada mountains that contained naturally occurring arsenic. The company used sand filters to reduce the concentration of arsenic so the water would meet federal drinking water standards. To maintain the effectiveness of the sand filters, CG Roxane back-flushed the filters with a sodium hydroxide solution, which generated thousands of gallons of arsenic-contaminated wastewater.
For approximately 15 years, CG Roxane discharged the arsenic-contaminated wastewater into a manmade pond – known as “the Arsenic Pond” – at its Olancha facility along Highway 395 in Inyo County.
In March 2013, the Lahontan Regional Water Quality Control Board took a sample from the Arsenic Pond and in 2014 informed CG Roxane that the sample had an arsenic concentration that was more than eight times the hazardous waste limit, creating a risk to the area’s groundwater and wildlife. The water board referred the matter to the California Department of Toxic Substances Control (DTSC), which took its own samples that showed the Arsenic Pond had an arsenic concentration almost five times the federal hazardous waste limit. Subsequent sampling and testing by CG Roxane and its retained laboratory confirmed a similar arsenic concentration in the Arsenic Pond.
DTSC officials met with CG Roxane representatives in April 2015, presented a list of preliminary violations, and instructed the company to arrange for the removal of the Arsenic Pond.
In May 2015, CG Roxane hired two Los Angeles-area entities to remove the hazardous waste and transport it – which was done without the proper manifest and without identifying the wastewater as a hazardous material, according to court documents. The arsenic-contaminated wastewater was ultimately transported to a Southern California facility that was not authorized to receive or treat hazardous waste. As a result, more than 23,000 gallons of the wastewater from the Arsenic Pond allegedly was discharged into a sewer without appropriate treatment.
The two companies hired to transport and treat the wastewater – United Pumping Services, Inc. and United Storm Water, Inc., both located in the City of Industry – each pleaded guilty on June 10 to four counts of negligently causing a violation of a pretreatment program requirement. On July 29, Judge Gee ordered each company to pay a $375,000 criminal fine.
The investigation in this case focused on alleged violations involving the handling, storage and transportation of CG Roxane’s wastewater, not the safety or quality of CG Roxane’s bottled water.
The investigation in this matter was conducted by the United States Environmental Protection Agency, Criminal Investigations Division and the United States Department of Transportation’s Office of Inspector General. These federal agencies received assistance from the California Department of Toxic Substances Control.
This case was prosecuted by Assistant United States Attorneys Dennis Mitchell and Heather C. Gorman of the Environmental and Community Safety Crimes Section.
The United States Attorney’s Office for the Eastern District of California also assisted in the investigation.
Sylmar Man Indicted on Arson Charge Alleging He Set Hollywood Pizza Restaurant Ablaze During Civil Disturbances in MayRead the Press Release
LOS ANGELES – A Sylmar man was charged today in a federal grand jury indictment alleging that he deliberately set Hollywood’s Pizzeria Mozza restaurant on fire during the civil disturbances that struck the city in late May.
Mario Ernesto Alvarado, 42, is charged with one count of arson. His arraignment is scheduled for August 10 in United States District Court. Alvarado was arrested on a federal criminal complaint in this case on July 16. He is free on $25,000 bond.
During the civil disturbances that occurred in Los Angeles on May 30, Alvarado allegedly walked into a commercial building in Hollywood that housed Pizzeria Mozza and its related business, Mozza2Go. Once inside the building, Alvarado maliciously poured a flammable liquid on the restaurant floor and set it on fire, according to the indictment. Arson investigators determined that the fire caused $500,000 in structural damage to the shop, with an additional $50,000 in fire damage to restaurant merchandise and property, according to an affidavit filed with a criminal complaint in this case. At the time of the fire, the restaurant and shop were closed due to a curfew order.
On June 29, the FBI and the Los Angeles Police Department posted a press release seeking information leading to the arrest of several alleged arsonists suspected of starting fires across Los Angeles during May’s civil disturbances. Alvarado was identified by a member of the public as one of the alleged arsonists, according to court documents.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
If convicted, Alvarado would face a mandatory minimum sentence of five years in federal prison and a statutory maximum sentence of 20 years in federal prison.
This matter was investigated by the SAFE LA Task Force, which includes members of the FBI, the Los Angeles Police Department, the Los Angeles Fire Department, the Santa Monica Police Department, the Beverly Hills Police Department and the Long Beach Police Department.
This case is being prosecuted by Assistant United States Attorney Bruce K. Riordan of the Violent and Organized Crime Section.
Pasadena Man Indicted by Grand Jury in Cyberstalking Case Alleging Online and Mailed Threats to Injure, Rape and Kill 10 VictimsRead the Press Release
LOS ANGELES – A federal grand jury this afternoon returned a 26-count indictment that charges a Pasadena man with making a series of detailed threats to harm, rape and kill 10 victims he met in various social and business settings.
Samuel Trelawney Hughes, 31, who is a citizen of the United Kingdom, was charged with seven counts of stalking, nine counts of making online threats, three counts of mailing threatening communications, and seven counts of witness tampering.
The indictment alleges that Hughes – sometimes using his real name, and other times using aliases or social media accounts designed to conceal his true identity – sent his victims communications in which he expressed hope they would die or in which he made specific threats to harm them. For example, in October 2019, after one victim reported prior threats from Hughes to law enforcement authorities, Hughes allegedly sent the victim an email stating in part: “someone I can guarantee will come out and first bash you head in, rape you slash your throat and burn your car and house.” Hughes allegedly sent another threat that read in part: “I will rip your f****** throat out and stab you in the eyes and put gasoline over your half mutilated body.”
Court documents state that Hughes used online aliases and handles that included xavier.herrera666, parsonstheo38, theoparsons4, tony.hawk.exskater, tony.flavelle450, byword.photography, julius.caesar411, charlotte.massey400, and a.total.wanker400.
The FBI began investigating Hughes in May 2019 after one victim filed a complaint with the Internet Crimes Complaint Center (www.ic3.gov). “After being contacted by both the FBI and state law enforcement officers on multiple occasions regarding the threatening communications, Hughes continued to send electronic communications and letters threatening to injure, rape, or kill at least three of the victims who had reported his threats to the police,” according to a criminal complaint previously filed in this case. “In his communications to some victims, Hughes threatened that contacting the police would lead to the injury or death of the victim or the victims’ loved ones.”
As a result of separate investigations, Hughes was arrested by the Los Angeles Police Department and the Pasadena Police Department on two occasions in June, which resulted in charges being filed by the Los Angeles County District Attorney’s Office and the Pasadena City Attorney’s Office. Federal prosecutors filed a criminal complaint against Hughes on July 10, and he was taken into custody from state authorities on July 24. Hughes has been in federal custody since that time.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
The stalking counts and the charges stemming from the alleged threats all carry a statutory maximum penalty of five years in federal prison. The witness tampering counts each carry a maximum possible penalty of 20 years in prison.
Hughes is scheduled to be arraigned on the indictment in United States District Court on August 13.
The FBI is investigating this case. Anyone who thinks they may have received threats from Hughes is encouraged to call the FBI’s Los Angeles Field Office at (310) 477-6565.
This matter is being prosecuted by Assistant United States Attorney Lauren Restrepo of the Cyber and Intellectual Property Crimes Section.
Grand Jury Charges Ed Buck with Four Additional Felonies, Including that He Enticed Victims to Travel Interstate to Engage in ProstitutionRead the Press Release
LOS ANGELES – A federal grand jury today returned a superseding indictment charging Edward Buck with four additional felonies, including that he allegedly enticed victims – including a man who died at his West Hollywood apartment after he administered drugs to him – to travel interstate to engage in prostitution.
Buck, 65, was arrested in September 2019 after being charged in United States District Court with providing methamphetamine to a man who died after receiving the drug intravenously. Since that time, federal authorities have continued to investigate Buck for additional crimes.
The four additional counts charged today – bringing the total number of charges in this case to nine counts – include one count alleging that Buck knowingly enticed 26-year-old Gemmel Moore to travel to the Los Angeles area to engage in prostitution. Buck allegedly provided methamphetamine to Moore, who overdosed on the drug and died on July 27, 2017.
Buck also is charged with another count of enticing another man to travel with the intent of engaging in prostitution.
The superseding indictment also charges Buck with one count of knowingly and intentionally distributing methamphetamine, and one count of using his residence for the purpose of distributing narcotics such as methamphetamine, and the sedatives gamma hydroxybutyric acid (GHB) and clonazepam.
Last year, a federal grand jury returned a five-count indictment charging that Buck “engaged in a pattern of soliciting men to consume drugs that Buck provided and perform sexual acts at Buck’s apartment,” which is a practice described as “party and play.” Buck allegedly solicited victims on social media platforms, including a gay dating website, and used a recruiter to scout and proposition men.
Once the men were at his apartment, Buck allegedly prepared syringes containing methamphetamine, sometimes personally injecting the victims with or without their consent, according to the indictment. Buck also allegedly injected victims with more narcotics than they expected and sometimes injected victims while they were unconscious.
Another victim, Timothy Dean also suffered a fatal overdose in Buck’s apartment, on January 7, 2019, the indictment alleges.
Buck is scheduled to go to trial in this matter on January 19, 2021. His arraignment on the first superseding indictment is expected in the coming weeks.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty in court.
Each of the charges alleging the distribution of narcotics resulting in death carries a mandatory minimum sentence of 20 years in federal prison and a maximum penalty of life without parole. The four new charges carry a statutory maximum sentence of 60 years in federal prison.
Buck also faces charges, including operating a drug house, that were filed last year by the Los Angeles County District Attorney’s Office. Buck is currently being held in federal custody without bond, and the federal case is expected to proceed first.
The federal case is being investigated by the Drug Enforcement Administration, the Los Angeles County Sheriff’s Department and the FBI. The investigation is being conducted with the support of the Organized Crime Drug Enforcement Task Force.
This case is being prosecuted by Assistant United States Attorneys Chelsea Norell and Brittney M. Harris of the International Narcotics, Money Laundering, and Racketeering Section.
Los Angeles City Councilman Jose Huizar Charged in 34-Count Indictment Alleging Wide-Ranging Political CorruptionRead the Press Release
INDICTMENTLOS ANGELES – A federal grand jury today returned a 34-count indictment against Jose Huizar, an elected member of the Los Angeles City Council, on charges that he led a criminal enterprise where he used his powerful position at City Hall to enrich himself and his close associates, and unlawfully gave favorable treatment to developers who financed and facilitated bribes and other illicit financial benefits.
The indictment incorporates the allegations made in last month’s criminal complaint that charged Huizar, 51, of Boyle Heights, with one count of conspiracy to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act. The indictment specifically alleges 402 overt acts that Huizar and his co-conspirators committed to further their criminal enterprise, including bribery, honest services fraud, and money laundering.
In addition to the RICO conspiracy charge, the indictment charges Huizar with the following criminal charges: 12 counts of honest services wire fraud; two counts of honest services mail fraud; four counts of traveling interstate in aid of racketeering; six counts of bribery; five counts of money laundering; one count of structuring cash deposits to conceal bribes; one count of making a false statement to a financial institution; one count of making false statements to federal law enforcement; and one count of tax evasion.
Huizar is expected to appear via videoconference for his arraignment, which is scheduled for August 3 in United States District Court.
Huizar has represented Council District 14 (CD-14), which includes downtown Los Angeles and its surrounding communities, since 2005. Huizar for several years was chair of the city’s influential Planning and Land Use Management Committee, a position he lost after the FBI executed search warrants at his city offices and personal residence in November 2018. During the search of his home, agents seized approximately $129,000 cash that was stashed in Huizar’s closet and which, according to the indictment, he received from a Chinese billionaire and another businessperson seeking favors from him.
The indictment alleges that Huizar operated the “CD-14 Enterprise,” along with co-conspirator members, including “Individual 1,” a former general manager of the Los Angeles Department of Building and Safety and former deputy mayor; George Esparza, Huizar’s former special assistant; and real estate development consultant George Chiang. Members and associates of the criminal enterprise referred to Huizar as their “boss,” operated as a criminal organization, and worked together for common purposes, the indictment alleges.
The CD-14 Enterprise allegedly had several objectives, including enriching its members and associates through means that included bribery, extortion, and honest services fraud; advancing its political goals and maintaining its control and authority; concealing the enterprise’s financial activities; and protecting the enterprise by concealing its activities and shielding the enterprise from detection by law enforcement, the city, and the public.
Among the multitude of corruption allegations, the indictment alleges that Huizar illegally accepted more than $800,000 in benefits from Chairman E, a Chinese billionaire who runs a multinational development firm and who owns a hotel in Huizar’s district. Chairman E provided $600,000 in collateral to fund a settlement of a sexual harassment lawsuit filed against Huizar by a former CD-14 staffer, allegations that threatened his 2015 re-election campaign, according to the indictment.
The indictment outlines Huizar’s concealment of illicit benefits, including by instructing his special assistant on how to avoid bank reporting requirements, using his family members to launder hundreds of thousands of dollars in bribes, making false statements on a bank loan application and failing to report his illicit benefits on tax returns and ethics disclosure forms. Huizar allegedly engaged in obstructionist conduct, including attempting to influence other witnesses and lying to federal prosecutors and the FBI.
In total, Huizar allegedly agreed to accept at least $1.5 million in illicit financial benefits.
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 charges of RICO conspiracy, honest services fraud, and money laundering each carry a statutory maximum sentence of 20 years in federal prison. The charge of making false statements to a financial institution has a statutory maximum sentence of 30 years’ imprisonment. The bribery charges each carry a statutory maximum sentence of 10 years in federal prison. The charges of tax evasion, structuring, making false statements to law enforcement, and interstate travel in aid of racketeering have a five-year maximum prison sentence.
Huizar is the fifth person to be charged in the ongoing corruption investigation being conducted by the FBI and the U.S. Attorney’s Office. The other four defendants have pleaded guilty. Esparza, Chiang, and Justin Jangwoo Kim, a Huizar fundraiser who admitted to facilitating bribes, are scheduled to be sentenced by United States District Judge John F. Walter in February 2021. Esparza, Chiang, and Kim are cooperating with the ongoing investigation.
Former Los Angeles City Councilman Mitchell Englander pleaded guilty on July 7 to charges of scheming to falsify material facts related to trips he took to Las Vegas and Palm Springs that were funded by a businessperson. Englander’s sentencing hearing is scheduled for December 7, also before Judge Walter.
The cases against Huizar and his associates in the CD-14 Enterprise are being prosecuted by Assistant United States Attorney Mack E. Jenkins, Chief of the Public Corruption and Civil Rights Section, and Assistant United States Attorneys Veronica Dragalin and Melissa Mills, also of the Public Corruption and Civil Rights Section.
Any member of the public who has information related to this or any other public corruption matter in the City of Los Angeles is encouraged to send information to the FBI’s tip line at tips.fbi.gov or to contact the FBI’s Los Angeles Field Office at (310) 477-6565.
Ventura County Man Sentenced to Two Years in Federal Prison for Bribing L.A. County Officials and Cheating on His TaxesRead the Press Release
LOS ANGELES – A Ventura County man was sentenced today to 24 months in federal prison for paying hundreds of thousands of dollars in bribes to public officials in Los Angeles County in order to secure government contracts for his electrical contracting company.
Enrique Contreras, 40, of Newbury Park, was sentenced by United States District Judge R. Gary Klausner, who also ordered him to pay $821,366 – $600,000 to Los Angeles County and $221,366 to the United States Treasury – in restitution.
Contreras pleaded guilty in May 2019 to one count of bribery and one count of subscribing to a false tax return. He paid his restitution amount prior to today’s sentencing hearing.
To secure lucrative contracts from the Los Angeles County government for his Lancaster-based low-voltage electrical wiring company, Tel/Pro Voice and Data, Inc., Contreras bribed two County officials with payments totaling $600,000. Then, in an effort to conceal the bribes and lower Tel-Pro’s taxable income, Contreras falsely claimed that some of the bribe payments, along with other personal expenses, were legitimate business expenses incurred by Tel-Pro.
As a result of those fraudulent deductions, Contreras failed to report a total of $636,454 in income from 2013 to 2017 and he owes $221,366 in unpaid taxes.
The two County officials who accepted Contreras’s bribes were Mohammad R. Tirmazi, 51, of Alta Loma, who was an employee at Los Angeles County’s Internal Services Department, and Thomas M. Shepos, 71, of Palmdale, a public official formerly employed by the County in the Real Estate Division.
From 2013 to 2016, Contreras made cash payments to Shepos, totaling approximately $200,000 to $300,000, in exchange for Shepos providing non-public County information to Contreras and helping Contreras secure County contracts.
Last month, Tirmazi was sentenced to one year and one day in federal prison for accepting nearly $300,000 in bribes from Contreras and then failing to report the income he received from those bribes and a side business on his federal tax returns.
Shepos pleaded guilty in November 2018 to accepting bribes and is scheduled to be sentenced on December 7.
One of the individuals from whom Shepos admitting receiving bribes was real estate developer Arman Gabaee, 59, of Beverly Hills. Gabaee was arrested and subsequently indicted on federal bribery charges in 2018, which includes allegations that he offered to buy Shepos a $1.1 million home in Northern California’s wine country. His trial is currently scheduled for November 3 before United States District Judge George H. Wu.
This matter was investigated by the FBI and IRS Criminal Investigation.
This case was prosecuted by Assistant United States Attorneys Ruth C. Pinkel and Lindsey Greer Dotson of the Public Corruption and Civil Rights Section.
O.C. Tax Preparer Pleads Guilty to Conspiracy Charge for Preparing and Filing False Tax Returns that Caused Nearly $5 Million in LossesRead the Press Release
SANTA ANA, California – An Orange County man pleaded guilty today to federal criminal charges that he used his tax preparation company to knowingly file false tax returns and cheat the United States out of nearly $5 million.
Michael Hung Lee, 70, of Garden Grove, entered his plea before United States District Judge David O. Carter. Lee pleaded guilty to one count of conspiracy to aid and assist in the preparation of false tax returns.
According to his plea agreement, from 2014 to March 2018, Lee was a tax preparer who owned and operated 1040 U.S. Tax Center, Inc., a Garden Grove-based company. During that time, Lee knowingly participated in a conspiracy where he and others fraudulently filed federal individual income tax returns on behalf of their clients in order to obtain false refunds from the IRS.
On these tax returns that he prepared and filed, Lee willfully and fraudulently claimed Schedule D capital losses that he knew his clients never approved and for which they were unqualified, the plea agreement states. The false declarations of capital losses reduced his clients’ listed taxable income. As a result, the federal government incurred a tax loss of at least $4,917,035, according to the plea agreement.
Judge Carter scheduled a November 16 sentencing hearing, at which time Lee will face a statutory maximum sentence of five years in federal prison.
On June 15, Mylinh Thi Lee, 50, of Garden Grove, who is Michael Lee’s daughter and also was a tax preparer at 1040 U.S. Tax Center, pleaded guilty to one count of aiding and assisting in the preparation of false tax returns. She will face a statutory maximum sentence of three years in federal prison at her sentencing hearing, which is scheduled for October 26.
This matter was investigated by IRS Criminal Investigation.
This case is being prosecuted by Assistant United States Attorney Jennifer L. Waier of the Santa Ana Branch Office.
High Desert Man Charged with Unlawfully Importing Ancient MosaicRead the Press Release
LOS ANGELES – A Palmdale resident was charged today with illegally importing a mosaic depicting the Roman god Hercules that is believed to have been made nearly two millennia ago.
Yassin Alcharihi, 53, was named in an indictment that charges him with one count of entry of goods falsely classified.
The indictment alleges that Alcharihi claimed he was importing a mosaic and other items valued at $2,199, when in fact he was importing an ancient mosaic worth more than that. The indictment also alleges that he misrepresented the quality of the mosaic and what the artwork depicted.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
Alcharihi will receive a summons to appear for an arraignment in United States District Court for an arraignment that will likely take place next month.
This case is being investigated by the FBI’s Art and Antiquity Investigations group and Homeland Security Investigation’s Los Angeles Public Safety Group.
The case is being prosecuted by Assistant United States Attorneys Mark A. Williams and Matthew W. O’Brien of the Environmental and Community Safety Crimes Section, and Justice Department Trial Attorney Ann Marie Ursini of the Criminal Division’s Human Rights and Special Prosecutions Section.
The government is pursuing forfeiture of the mosaic, which was seized by FBI and HSI agents in 2016, in both the indictment and a 2018 asset forfeiture complaint being handled by Assistant United States Attorney Katharine Schonbachler.
California Man Charged with Unlawfully Importing MosaicRead the Press Release
A California man was charged today with one count of unlawfully affecting the entry of goods into the United States upon false classification as to quality and value.
Acting Assistant Attorney General Brian C. Rabbitt of the Criminal Division, U.S. Attorney Nicola T. Hanna for the Central District of California, Special Agent in Charge David Prince of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Los Angeles and Special Agent in Charge Voviette D. Morgan of the FBI’s Los Angeles Field Office, Criminal Division made the announcement.
According to the indictment, Mohamad Yassin Alcharihi, 53, of Palmdale, California, claimed he was importing a shipment of items valued at $2,199, when in fact he was importing a mosaic worth more than that amount, and he misrepresented the quality of the mosaic, including what the mosaic depicted.
The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
This case is being investigated by the FBI’s Art and Antiquity Investigations group and HSI’s Los Angeles Public Safety Group. The case was prosecuted by Trial Attorney Ann Marie Ursini of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorneys Mark A. Williams and Matthew W. O’Brien of the Central District of California.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Sun Valley Man Indicted on Federal Narcotics Charges and Weapons Offenses, including Possession of Ghost Gun and Grenade LauncherRead the Press Release
LOS ANGELES – A San Fernando Valley man was arraigned this afternoon after being arrested Wednesday night on a series of weapons charges and a drug trafficking offense that alleges he possessed about 3.8 kilograms of heroin for sale.
Edmond Tumasyan, 35, of Sun Valley, pleaded not guilty to charges contained in an 11-count federal grand jury indictment that charges him with possession with intent to distribute heroin and the illegal possession of multiple firearms, including an AR-15-type rifle with no serial number (commonly referred to as a “ghost gun”), machine guns, handguns and silencers, many of them unregistered. The indictment also alleges that Tumasyan illegally possessed an unregistered 40mm grenade launcher.
Tumasyan was taken into custody Wednesday evening by members of the Eurasian Organized Crime Task Force without incident. At today’s arraignment, Tumasyan pleaded not guilty to the charges in the indictment and was ordered to stand trial on September 15.
The firearms seized from Tumasyan’s residence in 2019 were illegally possessed because some allegedly were used in furtherance of drug trafficking and because Tumasyan is a convicted felon, having been previously convicted of crimes involving burglary, false checks and narcotics.
The Task Force opened a federal case targeting Tumasyan in October 2019 following seizures made by the Glendale Police Department and the Los Angeles County Sheriff’s Department.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
If he were to be convicted of the 11 charges in the indictment, Tumasyan would face a statutory maximum penalty of life in federal prison.
The case against Tumasyan is the result of an ongoing investigation by the Eurasian Organized Crime Task Force, which is made up of special agents with the FBI, IRS Criminal Investigation and the Department of Health and Human Services’ Office of Inspector General, as well as officers with the Los Angeles County Sheriff’s Department, the Glendale Police Department, and the California Department of Health Care Services.
This case is being prosecuted by Assistant United States Attorney Joseph D. Axelrad of the Violent and Organized Crime Section.
O.C. Man Admits Operating Unlicensed ATM Network that Laundered Millions of Dollars of Bitcoin and Cash for Criminals’ BenefitRead the Press Release
LOS ANGELES – A Yorba Linda man has agreed to plead guilty to federal criminal charges that he operated an illegal virtual-currency money services business that exchanged up to $25 million – including on behalf of criminals – through in-person transactions and a network of Bitcoin ATM-type kiosks.
Kais Mohammad, 36, a.k.a. “Superman29,” was charged in a three-count criminal information filed today in United States District Court. In a plea agreement also filed today, Mohammad agreed to plead guilty to one count of operating an unlicensed money transmitting business, one count of money laundering, and one count of failure to maintain an effective anti-money laundering program.
According to his plea agreement, from December 2014 to November 2019, Mohammad owned and operated Herocoin, an illegal virtual-currency money services business. As part of his business, Mohammad offered Bitcoin-cash exchange services, charging commissions of up to 25 percent – significantly above the prevailing market rate – for doing so.
Using the moniker “Superman29,” Mohammad advertised his business online to buy and sell Bitcoin throughout Southern California, in transactions up to $25,000. In a typical transaction, he met clients at a public location and exchanged currency for them. Mohammad generally did not inquire as to the source of the clients’ funds and on many occasions he knew the funds were the proceeds of criminal activity. Mohammad admitted that he knew at least one Herocoin client was engaged in illegal activity on the dark web.
Mohammad later purchased and advertised on the internet a network of Bitcoin ATM-type kiosks, which were located in malls, gas stations and convenience stores in Los Angeles, Orange, Riverside and San Bernardino counties. These kiosks allowed customers to use cash to buy Bitcoin, an Internet-based cryptocurrency, or sell Bitcoin in exchange for cash that is dispensed onsite.
Mohammad processed cryptocurrency deposited into the machines, supplied the machines with cash that customers would withdraw, and maintained the server software that operated the machines. Mohammad was able to monitor transactions on the machines and identify each transaction that occurred on them.
During the time of Herocoin’s operation, Mohammad, a former bank employee, intentionally failed to register his company with the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN). Mohammad admitted he was aware that he was required to – but chose not to – develop and maintain an effective anti-money laundering program, file currency transaction reports for exchanges of currency in excess of $10,000, conduct due diligence on customers, and file suspicious activity reports for transactions over $2,000 involving customers he had reason to suspect were involved in criminal activity. With respect to his Bitcoin ATM network, Mohammad further admitted that he did not have a program in place that would have allowed him to obtain identifications for customers conducting multiple transactions of up to $3,000 or verify that any identification provided was the person conducting the transaction.
After FinCEN contacted Mohammad in July 2018 about his need to register his company, Mohammad did so, but he continued to fail to comply fully with federal law concerning money laundering, conducting due diligence and reporting suspicious customers.
During the course of its investigation, law enforcement conducted multiple transactions with Mohammad, including three successive purchases of Bitcoin totaling $14,500 by the same undercover agent from an ATM kiosk in Lakewood on September 12, 2018, for which Mohammad did not file a currency transaction report as required.
From February 2019 to August 2019, Mohammad also conducted multiple in-person transactions with undercover agents who represented they worked at a “karaoke bar” that employed women from Korea who entertained men in various ways, including engaging in sexual activity, according to the plea agreement. On August 28, 2019, Mohammad met with an agent and exchanged $16,000 in cash, which the agent represented were the proceeds from illegal activity, for 1.58592 Bitcoin. Mohammad never filed a currency transaction report or suspicious activity report for these transactions.
In total, Mohammad admitted that he exchanged between $15 million and $25 million from in-person exchanges and transactions occurring at his Bitcoin kiosks.
Mohammad is expected to plead guilty to the charges at a hearing in the coming weeks. Upon pleading guilty, Mohammad will face a statutory maximum sentence of 30 years in federal prison. As part of the plea agreement, Mohammad has agreed to forfeit cash, cryptocurrency, and 17 Bitcoin ATMs that he operated as part of his business.
This matter was investigated by IRS Criminal Investigation, Homeland Security Investigations, and the Los Angeles County Sheriff’s Department. This investigation was conducted with the support of the Organized Crime Drug Enforcement Task Force (OCDETF).
This case is being prosecuted by Assistant United States Attorney Puneet V. Kakkar of the International Narcotics, Money Laundering, and Racketeering Section.
Longtime Leader of South Los Angeles Street Gang Arrested in RICO Conspiracy Case Alleging Two Previously Unsolved MurdersRead the Press Release
LOS ANGELES – A long-time senior leader of the South Los Angeles-based East Coast Crips (ECC) was arrested today on a federal grand jury indictment alleging he engaged in a decades-long conspiracy to murder rivals, extort local business and distribute narcotics.
Paul Gary Wallace, 54, also known as “Doc” and “Uncle Bill,” of South Los Angeles, was taken into federal custody today by the FBI and Los Angeles Police Department. He is scheduled to be arraigned on the indictment this afternoon in United States District Court.
Wallace is charged with one count of conspiracy to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act and one count of using a firearm in furtherance of a violent crime resulting in death.
According to the indictment, Wallace was a member of the ECC for more than 30 years and rose to become the leader and most influential member of the gang’s “6-Pacc” set, a series of cliques of the gang responsible for control over territory in South Los Angeles. The indictment describes how Wallace maintained his control over the gang through violence and intimidation. Wallace allegedly murdered and conspired to commit murder to enhance the gang’s violent reputation, to enhance his status within the gang, to retaliate against rivals, and to enforce discipline within the gang.
The indictment specifically alleges Wallace’s involvement in two murders. On February 9, 2003, Wallace allegedly repeatedly shot and killed a fellow ECC gang member who had publicly disrespected Wallace. On November 13, 2014, Wallace ordered the murder of a rival gang member, drove co-conspirators to the victim’s house, and personally handed a co-conspirator a firearm, which the co-conspirator used to murder the victim, the indictment alleges. The murder weapon, an AK-47-style assault rifle, was later found in Wallace’s van.
As a leader of the ECC, Wallace’s other criminal conduct included selling drugs in ECC territory, extorting local businesses, presiding over robberies, and engaging in other acts of violence, including intimidation, assaults and shootings against the gang’s rivals, according to the indictment.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
If convicted of all charges, Wallace would face a statutory maximum sentence of life in federal prison and is death-penalty eligible.
This matter was investigated by the FBI and the Los Angeles Police Department.
This case is being prosecuted by Assistant United States Attorneys Joseph D. Axelrad and Jeffrey M. Chemerinsky of the Violent and Organized Crime Section.
Centric Parts to Pay $8 Million to Resolve Allegations of Failing to Pay the United States Millions of Dollars in Import Duties on Brake PadsRead the Press Release
LOS ANGELES – CWD, LLC, which operates under the name Centric Parts, a Delaware corporation headquartered in Carson, and its affiliates have agreed to pay $8 million to the United States to resolve allegations that they violated the False Claims Act and the Tariff Act of 1930 by knowingly underpaying customs duties owed to the United States on imported brake pads.
Centric Parts and its affiliates sell aftermarket brake and chassis components for passenger vehicles and trucks. Centric Parts imported brake parts into the United States and was responsible for the submission of entry documents to U.S. Customs and Border Protection and the payment of any customs duties owed on those products.
The United States alleged that, from 2007 to 2017, Centric Parts falsely claimed on entry documents that mounted brake pads, which carry a 2.5 percent tariff, were unmounted brake pads, which require no tariff. The United States further alleged that when confronted with the misclassifications in 2017, company officials decided to conceal and not disclose the past false entry documents to Customs. As a result of Centric Parts’ alleged omissions and false statements regarding its imported products, the company knowingly evaded millions of dollars of customs duties it owed to the United States.
The settlement resolves two lawsuits filed by former employees pursuant to the qui tam provisions of the False Claims Act. These provisions permit private parties to sue on behalf of the government when a defendant knowingly avoids an obligation to pay money to the government, and to share in any recovery. The two “whistleblowers,” Steven Hughes and Jeffrey Hawk, will receive a total of $1.48 million as their share of the settlement.
Although Centric Parts has filed for bankruptcy protection, the bankruptcy court entered an order confirming the company’s plan of reorganization that explicitly provides the settlement debt is non-dischargeable and will be paid by the reorganized company.
The $8 million settlement resolves federal cases filed in Los Angeles and Detroit: United States ex rel. Steven Hughes v. CWD Holdings, LLC, Case No. 19-CV-7089-DMG (C.D. Cal.), and United States ex rel. Jeffrey Hawk v. CWD Holdings, LLC., et al., Case No. 17-12225-BAF (E.D. Mich.).
The case filed in Detroit was unsealed today, while the Los Angeles case was unsealed on July 16.
Assistant United States Attorney Karen Paik of the Civil Fraud Section handled the Los Angeles case. The matter was investigated by agents from U.S. Customs and Border Protection, and Homeland Security Investigations.
The claims resolved by the settlement are allegations only. There has been no determination of liability.
U.S. Files Lawsuits Seeking to Recover More Than $100 Million Embezzled by Former Officials in Kuwait’s Ministry of DefenseRead the Press Release
LOS ANGELES – The Justice Department has filed seven lawsuits seeking the forfeiture of real estate, a private jet, a yacht and additional assets purchased with public funds allegedly embezzled by former high-level officials in Kuwait’s Ministry of Defense (MOD), part of which were transferred to California bank accounts operated by the son of a convicted felon.
According to complaints filed Thursday in United States District Court in Los Angeles, between 2009 and 2016, individuals who were high-level MOD officials at the time and their associates used the MOD’s London attaché office to open at least six unauthorized bank accounts and then transferred more than $100 million of Kuwaiti public funds from the National Bank of Kuwait into the unauthorized London accounts. In order to disguise the nature of these transfers, some of them were falsely described as being intended for military purposes. According to the complaints, these funds were actually transferred to several California entities that had no business or contractual relationship with the MOD.
With the complaints, the United States seeks to recover at least $104,380,000 laundered into and through U.S. financial institutions.
The California entities that received the illicit funds are allegedly connected to a Los Angeles man – Victorino Noval, 58, formerly known as Victor Jesus Noval – who was convicted in 2003 of mail fraud and tax evasion in connection with a multimillion-dollar loan fraud committed against the U.S. Department of Housing and Urban Development. Noval was sentenced to 57 months in federal prison and was ordered to pay more than $25 million in restitution.
According to the complaints, once in the California bank accounts, the pilfered funds were used to purchase or contribute to the improvement of a parcel of land in Beverly Hills known as “The Mountain,” three homes in Beverly Hills, a penthouse and an apartment in Westwood, a private jet, a yacht, a Lamborghini sports car and approximately $40,000 worth of memorabilia of boxer Manny Pacquiao. Each of these assets is subject to the forfeiture complaints.
This matter was investigated by IRS Criminal Investigation and the FBI. The Office of International Affairs in the Justice Department’s Criminal Division is providing substantial assistance.
The asset forfeiture cases will be litigated by Assistant United States Attorneys Michael Sew Hoy and Dan G. Boyle of the Asset Forfeiture Section.
Former Head of Community Preparatory Academy Admits Stealing over $3 Million and Spending $220,000 on Disney ExpensesRead the Press Release
LOS ANGELES – Federal prosecutors today filed criminal theft and tax fraud charges against the former executive director of a charter school outfit who stole more than $3.1 million that should have been spent on school operations, but instead financed a lifestyle that included extravagant spending on Disney cruises and theme park admissions.
Janis Bucknor, 52, a resident of Baldwin Hills, who ran the for-profit Community Preparatory Academy (CPA) charter school and controlled several related entities, agreed to plead guilty to two felony offenses in a plea agreement also filed today in United States District Court. CPA operated two schools, one in Carson and one in South Los Angeles.
The case charges Bucknor with one count of theft, embezzlement and intentional misapplication of funds from an organization receiving federal funds, and one count of tax evasion for the tax year 2016. The court has yet to schedule any hearings in this matter.
Over the course of approximately 5½ years – from early 2014 through November 2019 – Bucknor stole a total of $3,168,346 from CPA, according to the most recent estimate of losses in the case. The amount of stolen funds is nearly one-third of all federal and state funding that went to CPA during the time.
In her plea agreement, Bucknor admitted using the stolen funds to pay for, among other things, personal travel, restaurants, Amazon and Etsy purchases, and private school tuition for her children. She also admitted spending about $220,614 on Disney cruise line vacations, theme park admissions and other Disney-related expenses.
The scheme began to unravel in February 2018, when “LAUSD-Charter School Division’s routine audit of CPA revealed that defendant used the CPA accounts for personal expenses, including unauthorized payments directly from some of the CPA accounts to Disney, Louis Vuitton, Girl Scouts, Ticketmaster, Uber, Baby Teeth Children’s Dentistry, Williams Sonoma, National American Miss pageants, and Forest Lawn Mortuaries, all of which were for defendant’s own personal and unauthorized use and benefit,” according to the plea agreement.
In relation to the tax evasion offense, Bucknor agreed to plead guilty to her 2016 taxes, but she admitted failing to pay the Internal Revenue Service $299,639 in taxes when she failed to report $1,322,254 in income for the tax years 2015 through 2018.
When she pleads guilty, Bucknor will face a statutory maximum sentence of 15 years in federal prison.
As part of the plea agreement, Bucknor has agreed to forfeit to the government her interest in three residential properties in South Los Angeles that were paid for with funds stolen from the charter school.
This case was investigated by the Los Angeles Unified School District’s Office of the Inspector General, the U.S. Department of Education Office of Inspector General, IRS Criminal Investigation, the United States Secret Service, and the United States Postal Inspection Service.
The criminal case is being prosecuted by Assistant United States Attorneys Katherine A. Rykken and Alexander C.K. Wyman of the Major Frauds Section. Assistant United States Attorneys Jonathan Galatzan and Katharine Schonbachler are handling the asset forfeiture part of the matter.
West L.A. Man Charged with Fraudulently Obtaining about $9 Million in COVID-Relief Loans, Some of Which He Gambled Away in Las VegasRead the Press Release
LOS ANGELES – A resident of the Beverly Grove neighborhood of Los Angeles was ordered held without bond this afternoon after being arrested on federal charges alleging he fraudulently obtained millions of dollars in Paycheck Protection Program (PPP) loans, some of which he used on gambling excursions to Las Vegas and transferred to his stock trading accounts.
Andrew Marnell, 40, was arrested this morning by federal authorities. Marnell made his initial court appearance this afternoon in United States District Court in Los Angeles, where he was ordered detained pending a hearing on Tuesday.
A criminal complaint unsealed in court this afternoon charges Marnell with one count of bank fraud and alleges he obtained more than $8 million in PPP loans through applications to insured financial institutions, and others, on behalf of different companies. During today’s court hearing, prosecutors said they now believe Marnell received approximately $9 million in fraudulent loans – a number that could rise as the investigation continues.
The affidavit in support of the complaint alleges that Marnell submitted fraudulent loan applications that made numerous false and misleading statements about the companies’ business operations and payroll expenses. The affidavit also alleges that Marnell, often using aliases, submitted fake and altered documents, including bogus federal tax filings and employee payroll records.
The complaint further alleges that Marnell then transferred millions of dollars from the fraudulently obtained loan proceeds to his brokerage accounts to make risky stock market bets. The affidavit also outlines how Marnell spent hundreds of thousands of dollars in fraudulently obtained loan proceeds at the Bellagio Hotel & Casino and other gambling establishments as recently as last weekend.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April, Congress authorized more than $300 billion in additional PPP funding.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.
A criminal complaint is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The bank fraud count alleged in the complaint against Marnell carries a statutory maximum sentence of 30 years in federal prison.
This case is being investigated by the Federal Housing Finance Agency – Office of Inspector General, the FBI, the Federal Deposit Insurance Corporation – Office of Inspector General, IRS Criminal Investigation, the Treasury Inspector General for Tax Administration, and the Small Business Administration Office of Inspector General. The California Department of Justice – Bureau of Gambling Control provided assistance in the investigation.
This case is being prosecuted by Assistant United States Attorney Kerry Quinn of the Major Frauds Section and DOJ Trial Attorney Scott Armstrong of the Criminal Division’s Fraud Section.
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.
California Man Charged with COVID-Relief FraudRead the Press Release
A California man was arrested today and charged with fraudulently seeking over $8.5 million in Paycheck Protection Program (PPP) loans, announced Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division and U.S. Attorney Nicola T. Hanna of the Central District of California.
Andrew Marnell, 40, of Los Angeles, California, was charged by criminal complaint, unsealed today upon his arrest, in the Central District of California with one count of bank fraud.
The complaint alleges that Marnell obtained approximately $8.5 million in PPP loans through applications to insured financial institutions, and others, on behalf of different companies. The complaint alleges that Marnell caused to be submitted fraudulent loan applications that made numerous false and misleading statements about the companies’ respective business operations and payroll expenses. The complaint also alleges that, in further support of the fraudulent loan applications, Marnell submitted fake and altered documents, including fake federal tax filings and employee payroll records. The complaint also alleges that these loan applications were made by using false and fraudulent identifications that were aliases of Marnell.
The complaint further alleges that Marnell then transferred the fraudulently-obtained loan proceeds to his brokerage account to make risky stock-market bets and similarly spent hundreds of thousands of dollars in fraudulently-obtained loan proceeds at a Las Vegas casino.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted March 29. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.
A criminal complaint is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the Federal Housing Finance Agency – Office of Inspector General, the FBI, Federal Deposit Insurance Corporation – Office of Inspector General, IRS – Criminal Investigation, the Treasury Inspector General for Tax Administration, and the Small Business Administration Office of Inspector General. The California Department of Justice – Bureau of Gambling Control also provided assistance in the investigation. Trial Attorney Scott Armstrong of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Kerry Quinn of the Central District of California are prosecuting the case.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
West Hollywood Man Sentenced to Five Years in Federal Prison for Modern Art Fraud Scheme Involving Sale of Bogus WorksRead the Press Release
LOS ANGELES – A West Hollywood man pleaded guilty today in federal court in Miami to criminal charges stemming from the sale of bogus artworks he claimed were created by famed modern artists, and he was immediately ordered to serve 60 months in federal prison.
Philip Righter, 43, pleaded guilty to three felony charges in a case filed in Los Angeles and admitted selling works he falsely claimed were created by artists such as Jean-Michel Basquiat, Keith Haring, Roy Lichtenstein and Andy Warhol. Righter also admitted using fake artwork as collateral for loans on which he later defaulted, and using bogus pieces for fraudulent write-offs on his income tax returns.
Righter pleaded guilty to three felony offenses – wire fraud, aggravated identity theft and tax fraud – and was sentenced by United States District Judge Marcia G. Cooke of the Southern District of Florida. In total, Righter’s scheme attempted to bilk victims out of well over $6 million, and he caused losses of at least $758,265. Additionally, his fraudulent tax returns cost the United States more than $100,000, according to a plea agreement in the case.
Judge Cooke also sentenced Righter to 60 months in federal prison in relation to a case filed by federal prosecutors in Miami. Righter pleaded guilty in that case in March and admitted trying to sell Haring and Basquiat forgeries to the owner of a Miami art gallery. The sentences in both cases will run concurrent with each other.
In the Los Angeles case, Righter admitted he executed a scheme to defraud people, businesses and the United States from 2016 until June 2018 by using counterfeit and fraudulent art that he asserted was genuine. Righter supported these false claims with fraudulent provenance – or chronology-of-origin – documents that he had created.
Before August 2016, Righter generally conducted these fraudulent transactions in his own name. But after the FBI and the Los Angeles Police Department interviewed him about bogus Keith Haring art he attempted to sell to the Miami art gallery, Righter began using the names of other people to execute his scheme, court documents state.
To make the fake artwork appear to be genuine, Righter ordered and used embossing stamps that appeared similar to the stamps used by the estates of Basquiat and Haring to authenticate works by these artists.
In furtherance of the scheme, Righter obtained and attempted to obtain numerous loans by using the fraudulent art and accompanying fraudulent provenance documents. For example, in October 2016, using another person’s name, Righter contacted a victim about a loan in which a purported original drawing by Basquiat would be used as collateral. Righter created a fraudulent certificate of authentication letter that purportedly came from Basquiat’s estate. The victim wired a $24,000 loan, on which Righter later defaulted. After Righter’s default, the victim attempted to auction the piece, but the auction house determined the piece was fraudulent, and the victim lost $24,000.
Righter also sold or attempted to sell numerous pieces of fake modern art. In August 2017, using another person’s name, Righter listed a purported 1983 piece of art by Basquiat with the word “Samo” written on it with an art sale website and he provided fake provenance documents. The website sold the piece for $50,000. In 2018, after the piece was determined to be fraudulent, the website had to refund the purchase price to the buyer.
Righter also admitted that he knowingly and willfully included a false W-2 and documentation of a donation of fraudulent art to a charity on his 2015 federal income tax return, which resulted in him fraudulently receiving a refund of $54,858. Righter then signed and filed a false 2015 amended tax return, which claimed a false casualty and theft loss of $2,575,000 related to artwork he claimed had been stolen. In truth, the artwork was fraudulent and had no value. This bogus amended tax return resulted in false carryback loss refunds for 2012, 2013 and 2014 totaling $52,485, according to court documents.
The FBI’s Art Crime Team, the Los Angeles Police Department, and IRS Criminal Investigation investigated this matter.
The Los Angeles case was prosecuted by Assistant United States Attorneys Mark A. Williams and Erik M. Silber of the Environmental and Community Safety Crimes Section.
Two New Defendants Charged in Violent Kidnapping of Chinese National Whose Remains Were Found Buried in the Mojave DesertRead the Press Release
LOS ANGELES – Two men from the San Gabriel Valley were charged today in federal court for allegedly participating in the kidnapping of Ruochen “Tony” Liao, a Chinese national who was violently abducted from a mall parking lot in San Gabriel two years ago, and whose parents were extorted for $2 million in ransom before Liao died from his injuries.
Anthony Valladares, 28, of Pasadena, and Alexis Ivan Romero Velez, 24, most recently a resident of Azusa, were taken into custody Tuesday during the execution of search warrants by FBI agents and members of the San Gabriel Valley Safe Street Task Force. Federal prosecutors this morning filed a criminal complaint in United States District Court that charges both Valladares and Romero with one count of kidnapping.
Previously in this investigation, two Chinese nationals were charged in a four-count indictment alleging they kidnapped Mr. Liao and attempted to collect $2 million in ransom from Mr. Liao’s family in exchange for the victim’s life. Guangyao Yang, 26, and Peicheng Shen, 34, whose last known U.S. residences were in West Covina, were charged with conspiracy to kidnap, kidnapping, attempted extortion in violation of the Hobbs Act, and threat by foreign communication. Yang and Shen are currently in custody in China on charges filed there related to the kidnapping.
During the investigation, the FBI learned that Valladares and Romero worked with Yang and Shen to conduct the kidnapping, during which Liao was repeatedly beaten and tased into submission, according to the affidavit in support of the complaint. Valladares was the “muscle” hired to intimidate, beat and subdue Liao during the kidnapping, and Romero was the driver of the vehicle used in the kidnapping, according to the affidavit.
Valladares and Romero were arrested Tuesday after making statements about their roles in the kidnapping to investigators. According to the affidavit, Valladares admitted that he was hired to assist in the kidnapping, agreed to accept $1,000 for the job, and restrained Liao during the kidnapping. Romero admitted, according to the affidavit, that he was recruited by Valladares and was the driver during the kidnapping.
After Liao was kidnapped on July 16, 2018, his parents in China received ransom demands and “proof-of-life” photos suggesting that Liao had been badly beaten, blindfolded, and tied up with duct tape. Liao’s parents were told to deposit the ransom payment into Chinese bank accounts within three hours, according to court documents.
Investigators believe Liao was held captive in a closet at a residence in Corona. During his captivity, investigators believe Liao was frequently beaten and ultimately died the night of July 17. During the early morning of July 18, investigators believe Yang and Shen drove to the desert near the town of Mojave to bury Liao’s body.
On July 26, 2019, the FBI laboratory used DNA testing to identify Liao’s remains, which were recovered following a search by the FBI’s Evidence Response Team.
Valladares and Romero are expected to make an initial appearance in U.S. District Court in Los Angeles this afternoon.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
The kidnapping charge carries a statutory maximum penalty of life in federal prison.
The investigation into the kidnapping is being conducted by the Federal Bureau of Investigation, with significant assistance by members of the FBI’s Safe Street Task Force, which includes the Pasadena Police Department.
This case is being prosecuted by Assistant United States Attorneys Julia Choe of the Cyber and Intellectual Property Crimes Section and Frances Lewis of the Public Corruption and Civil Rights Section.
27 Skilled Nursing Facilities Controlled by Longwood Management Corp. to Pay $16.7 Million to Resolve Allegations of Inflated Medicare BillsRead the Press Release
LOS ANGELES – Longwood Management Corporation and 27 affiliated skilled nursing facilities (Longwood) have agreed to resolve allegations that they violated the False Claims Act by submitting false claims to Medicare for rehabilitation therapy services that were not reasonable or necessary, the Department of Justice announced today. Longwood is headquartered in Los Angeles, and the 27 skilled nursing facilities are located in Southern California.
“Longwood’s business plan called for substantial revenue from Medicare, and it pressured therapists to provide additional, unnecessary services when targets were not met,” said United States Attorney Nick Hanna. “This case demonstrates the power of whistleblowers to shine a light on improper business practices and obtain significant recoveries on behalf of United States taxpayers.”
“This settlement reflects the Department’s continuing commitment to ensure that patients are receiving individualized healthcare services appropriate to their specific medical needs,” said Acting Assistant Attorney General Ethan P. Davis for the Department of Justice’s Civil Division. “When skilled nursing facilities provide rehabilitation therapy services based on maximizing revenue rather than the interests of their patients, we will hold them accountable.”
The settlement resolves allegations that Longwood submitted false claims for rehabilitation therapy by engaging in a systematic effort to increase Medicare billings. Medicare reimburses skilled nursing facilities at a daily rate that reflects the skilled therapy and nursing needs of qualifying patients. The greater the patient’s needs, the higher the level of Medicare reimbursement. The highest level of Medicare reimbursement for skilled nursing facilities is for “Ultra High” therapy patients, who require a minimum of 720 minutes of skilled therapy from two therapy disciplines (e.g., physical, occupational or speech therapy), one of which has to be provided five days a week.
Longwood allegedly knowingly submitted or caused the submission of false and fraudulent claims to Medicare for medically unreasonable and unnecessary Ultra High levels of rehabilitation therapy for Medicare Part A residents. Specifically, Longwood allegedly pressured therapists to increase the amount of therapy provided to patients to meet pre-planned targets for Medicare revenue. These targets were alleged to have been set without regard to patients’ individual therapy needs and could only be achieved by billing for a high percentage of patients at the Ultra High level.
The settlement covers conduct that occurred from May 1, 2008 through August 1, 2012 at six facilities: Alameda Care Center in Burbank, Burbank Rehabilitation Center, Magnolia Gardens Convalescent Hospital in Granada Hills, Montrose Healthcare Center, Sherman Oaks Health & Rehab Center, and West Hills Health & Rehab Center.
The settlement also covers conduct that occurred from January 1, 2006 through October 10, 2014 at 21 facilities: Burlington Convalescent Hospital in the Westlake District of Los Angeles, Chino Valley Rehabilitation Center LLC, Colonial Care Center in Long Beach, Covina Rehabilitation Center, Crenshaw Nursing Home, Green Acres Lodge in Rosemead, Imperial Care Center in Studio City, Imperial Crest Health Care Center in Hawthorne, Laurel Convalescent Hospital in Fontana, Live Oak Rehabilitation Center in San Gabriel, Longwood Manor Convalescent Hospital in the Mid-City District of Los Angeles, Monterey Care Center in Rosemead, Intercommunity Healthcare Center in Norwalk, Park Anaheim Healthcare Center, Pico Rivera Healthcare Center, San Gabriel Convalescent Center, Whittier Pacific Care Center, Studio City Rehabilitation Center, Sunnyview Care Center in the Pico Union District of Los Angeles, View Park Convalescent Center in Baldwin Hills, and Western Convalescent Hospital in the Jefferson Park District of Los Angeles.
Contemporaneous with the civil settlement, Longwood has entered into a five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General (HHS-OIG) that requires an independent review organization to annually assess the medical necessity and appropriateness of therapy services billed to Medicare.
“The government contended Longwood falsely claimed medically unreasonable and unnecessary levels of rehabilitation services at the expense of taxpayers,” said Timothy B. DeFrancesca, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “My agency’s compliance agreement is designed to monitor claims to Medicare and prevent submission of false claims in the future.”
The settlement partially resolves allegations brought in two lawsuits filed by whistleblowers under the qui tam provisions of the False Claims Act, which allows private parties to bring suit on behalf of the government and to share in any recovery. The whistleblowers – Judy Boyce, Benjamin Monsod and Keith Pennetti – will collectively receive $3,006,000 of the settlement proceeds.
The settlement was the result of a coordinated effort by the United States Attorney’s Office for the Central District of California (Assistant United States Attorney John Lee of the Civil Fraud Section), the Civil Division of the Department of Justice, the United States Attorney’s Office for the Northern District of Alabama, the U.S. Department of Health and Human Services Office of Inspector General, and the Defense Criminal Investigative Service.
The cases are captioned United States ex rel. Pennetti v. Longwood Management Corp., et al., CV14-4133 (C.D. Cal.), and United States ex rel. Boyce, Judy and Monsod, Benjamin v. Aegis Therapies, Inc., GGNSC Holdings LLC, and Longwood Management Corp., CV16-8050 (C.D. Cal.). The claims resolved by this agreement are allegations only and there has been no determination of liability.
L.A. Man Arrested on Charges of Fraudulently Obtaining Luxury Vehicles from Victims Who Wanted Out of Their LeasesRead the Press Release
LOS ANGELES – A Baldwin Hills man is scheduled to be arraigned this afternoon on federal charges that allege he conned victims from across the nation into giving him their high-end and exotic vehicles with bogus promises he would find other people to take over their leases.
Geoffrey Eldridge Hull, 40, who maintained offices on Sunset Boulevard in Hollywood, was arrested Wednesday evening by special agents with Homeland Security Investigations. Hull was arrested pursuant to a federal grand jury indictment that charges him with six counts of wire fraud related to his “lease consignment” program.
Hull allegedly marketed himself and the various companies he operated as being able to find people to take over luxury automobile leases from individuals who wanted out of the leases on their Bentleys, Ferraris, Porsches, Maseratis and other high-end automobiles. Hull agreed to cover monthly lease payments and promised leaseholders that he would quickly find a “credit-qualified buyer to legally assume the lease through the original finance company,” according to the indictment, which further alleges that Hull used a longtime friend and business associate to vouch for the quality of the program.
Despite assuring victims that his venture was successful, Hull and his companies did not find people to take over these leases, the indictment alleges. Instead, Hull offered the luxury cars for rent and passed little of the rent money onto the original leaseholders, who were still responsible for lease payments. Furthermore, Hull allegedly made few, if any, timely car lease payments.
Hull routinely ignored victims’ requests for the return of their vehicles, prompting some to make stolen car reports to law enforcement agencies, according to court documents. When some victims’ cars were returned after law enforcement seizures, repossession and other means, the cars were often damaged, had incurred toll and parking violations, and had been driven over the allotted mileage.
“Customers and local and federal law enforcement repeatedly told Hull his business was fraudulent, Hull was sued civilly several times for fraud and intentional misrepresentation, he received dozens of demand letters from attorneys, and he was interviewed by the media about his failure to make lease payments as promised,” according to a criminal complaint previously filed in this case.
When victims posted negative reviews online about Hull and his company, Hull would change his company name and resume the scheme, court documents allege. The company names Hull used to operate his scheme included Exotic Lease Transfer, Luxe Lease Transfer, Shift Lease, Veer Lease, Torque Transfer, Haven Transfer, Early Lease, and Open Lease Transfer. Hull, who has three prior convictions for grand theft auto, also allegedly used a series of aliases as part of the scheme, including “Geoff Eldredge,” “Geoff Eldridge,” “Jefrii Eldridge,” “Geoffrey Hulle,” “Jeff Bluthenthal,” and “Jeff H.”
Investigators have, so far, identified approximately 115 victims from around the nation. The estimated losses in this case exceed $1 million. Investigators believe there are still unidentified victims, and anyone with information about this matter is encouraged to call the Homeland Security Investigations Tip Line at 866-DHS-2-ICE (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 six counts of wire fraud alleged in the indictment, Hull would face a statutory maximum sentence of 120 years in federal prison.
This case is being prosecuted by Assistant United States Attorneys Carolyn Small of the Major Frauds Section and Agustin D. Orozco of the Public Corruption and Civil Rights Section.
Orange County Man Indicted on Charges that He Stole Boeing Employees’ Identities, Siphoned Money from Their Retirement PlanRead the Press Release
LOS ANGELES – A federal grand jury today indicted an Orange County man on charges that he fraudulently obtained access to Boeing employees’ retirement accounts and siphoned their money by making hundreds of thousands of dollars’ worth of fraudulent money transfers to himself.
Hoa Vo, 30, whose aliases include “Hoa Thanh Tran Vo” and “Andy Vo,” of Santa Ana, is charged with three counts of bank fraud and one count of aggravated identity theft.
According to the indictment, from January 2019 to June 2019, Vo obtained the personal identifying information of Boeing employees, along with information about their retirement accounts, known as Voluntary Investment Plan (VIP) accounts. Vo then allegedly made fraudulent withdrawal requests for checks and electronic money transfers totaling hundreds of thousands of dollars from the VIP accounts of various Boeing employees.
Knowing that notifications and checks related to these fraudulent requests would be mailed out, Vo placed holds on the Boeing employees’ mail with the United States Postal Service, the indictment further alleges. Once the mail was held, Vo allegedly intercepted the mail by presenting to a postal employee a fraudulent California driver’s license with a Boeing employee’s personal identifying information, and a fraudulent note purportedly written or signed by the Boeing employee authorizing Vo to pick up the employee’s mail.
Vo allegedly then deposited the stolen checks into a bank account that had been fraudulently opened in a Boeing employee’s name. Vo also cashed checks written to himself from the fraudulently opened bank account by using the Boeing employee’s forged signature, and endorsed the checks himself, according to the indictment.
In total, Vo attempted to obtain approximately $783,328 from Boeing employees’ VIP accounts, and actually obtained approximately $360,847, the indictment alleges.
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, Vo would face a statutory maximum sentence of 92 years in federal prison.
This matter was investigated by the United States Secret Service, the Huntington Beach Police Department, the Irvine Police Department, and the Westminster Police Department.
This case is being prosecuted by Assistant United States Attorney Daniel S. Lim of the Santa Ana Branch Office.
Ex-Beverly Hills Stockbroker Sentenced to 6 Years in Prison for Role in $215 Million Portfolio-Pumping Stock Manipulation SchemeRead the Press Release
LOS ANGELES – A former Beverly Hills stockbroker has been sentenced to 72 months in federal prison for scheming to manipulate penny stock prices to inflate the reported profits of his co-conspirator’s hedge funds, generating millions of dollars in fees and commissions for himself, but causing investors to suffer more than $215 million in losses when the funds collapsed.
Todd Michael Ficeto, 53, of Marion, Ohio, was sentenced late Monday by United States District Judge Virginia A. Phillips, who also ordered him to pay $215,815,031 in restitution.
During a 17-day trial that concluded in July 2019, a jury found Ficeto guilty of 18 felonies: one count of conspiracy to commit securities fraud and wire fraud, seven counts of securities fraud, two counts of investment adviser fraud, one count of money laundering conspiracy, five counts of money laundering, one count of obstruction of justice, and one count of making false statements.
At Monday’s sentencing hearing, Judge Phillips described the scheme as “serious” and “far-reaching” as she ordered Ficeto to being serving his sentence within two weeks. Ficeto has waived his right to appeal his conviction and sentence.
Ficeto was the president of Hunter World Markets (HWM), a Beverly Hills-based broker-dealer that he co-owned with German financier Florian Wilhelm Jürgen Homm. Homm founded Absolute Capital Management Holdings (Absolute Funds), a Cayman Island-based company that managed eight hedge funds and which Homm operated from Mallorca, Spain. Homm, 60, was indicted in March 2013 on charges of securities fraud and wire fraud after he was arrested in Italy, but later fled to Germany and remains there as a fugitive from justice.
Between September 2004 and September 2007, Ficeto used HWM’s investment arm to find small, private companies that could be converted into publicly traded penny-stock businesses. Once the penny stock companies went public, Ficeto arranged financing deals where Homm invested millions of dollars from the Absolute Funds to acquire a majority of the new company’s stock. Through these financial deals, Ficeto and Homm paid themselves substantial “placement agent” fees and issued themselves and their co-conspirators millions of shares of the newly created penny stock companies.
Ficeto also caused existing shareholders in the penny stock companies to enter into “lock-up agreements” that prevented them from traded these companies’ shares. Meanwhile, Ficeto, Homm and their co-conspirators freely traded the shares they controlled, and executed their scheme by trading the penny stocks – through HWM – at prices set by Homm and co-defendant Colin Heatherington, 45, of Port Alberni, Canada, along with his brother, Craig Heatherington, 42, of Queensland, Australia. In several of the penny stock companies, Ficeto and his co-conspirators accounted for more than 90 percent of the companies’ trading volume.
Ficeto, Homm, and other co-conspirators fraudulently manipulated the penny stocks to inflate their prices, exaggerating the purported profitability of the Absolute Funds. As a result, the co-conspirators were able to sell their own shares of the penny stocks at the inflated prices to the hedge funds.
For example, over the span of four minutes near the end of the trading day on May 15, 2007, Ficeto, Homm and Colin Heatherington, through manipulative cross-trades at HWM, caused the price of a penny stock company’s shares to increase from $3.25 to $12.
The stock price inflation also served to overstate the performance of the hedge funds that, in turn, generated substantial performance fees and other compensation for defendant Homm and his co-conspirators. The co-conspirators then used the inflated performance figures to induce investments from unsuspecting victim-investors.
Ficeto admitted at trial to making more than $27 million through HWM from 2005 and 2008, money that he spent lavishly on luxury cars, expensive homes and a yacht.
As the scheme unraveled, Homm abruptly resigned from the firm in the middle of the night on September 18, 2007 and fled to avoid prosecution. Redemption requests from concerned Absolute Funds investors poured in when they discovered that significant portions of their investments were placed in speculative, illiquid and essentially worthless penny stocks. HWM ceased operations in 2009.
Ficeto then lied to investigators with the Securities and Exchange Commission and the Financial Industry Regulatory Authority. He also suborned lies from his company’s chief stock trader in an attempt to conceal the fraud.
Ficeto has forfeited $6,954,265 to the government, funds he laundered for his personal gain into accounts in the Cook Islands days before his SEC testimony and money Ficeto used to purchase homes in Malibu, California and Park City, Utah with the illicit proceeds. This money was returned to his victims.
The total losses to investors in this case exceed $215 million.
Colin Heatherington is located in Canada and the United States is seeking his extradition. Craig Heatherington testified for the government at Ficeto’s trial and received a deferred prosecution agreement in exchange for his cooperation.
This matter was investigated by the FBI. IRS Criminal Investigation, the SEC, and FINRA provided assistance to the investigation.
This case was prosecuted by Assistant United States Attorneys Cassie D. Palmer of the General Crimes Section; Scott Paetty of the Major Frauds Section; Ian V. Yanniello of the International Narcotics, Money Laundering, and Racketeering Section; and Katharine Schonbachler of the Asset Forfeiture Section.
8 Arrested on Federal Indictment Alleging Scheme to Obtain $1.1 Million in Unemployment Benefits Through Sham CompaniesRead the Press Release
LOS ANGELES – Law enforcement today arrested eight individuals named in a federal grand jury indictment charging them with creating nonexistent businesses and then claiming more than $1.1 million in unemployment benefits for purported employees of those fake businesses.
The nine-count indictment unsealed today alleges a three-year conspiracy to cheat the state’s unemployment insurance program through the creation of bogus cleaning services and boutique stores, sometimes using the names of prison inmates as phony employees with which to collect the benefits.
The indictment charges each of the eight defendants with one count of conspiracy to commit wire fraud and one count of aggravated identity theft. Those named in the indictment are:
- Donna Givens, 58, of the Gramercy Park area of the City of Los Angeles;
- Catrina Gipson, 44, of Moreno Valley, who is Givens’ niece;
- Evelyn Taylor, 36, of Gramercy Park, a daughter of Givens;
- Laron Taylor, 34, of Buena Park, a son of Givens;
- Latrice Taylor, 37, of Buena Park, a daughter of Givens;
- Raschell Taylor, 30, of San Bernardino, a daughter of Givens;
- Bianka Logie, 45, of Moreno Valley; and
- Vernisha Jolivet, 27, of Indianapolis.
Seven of the defendants are expected to be arraigned this afternoon in United States District Court. Jolivet was arrested in Indianapolis and will be making a court appearance in Indiana on Wednesday.
From February 2013 until July 2016, the defendants allegedly registered fake businesses with the California Employment Development Department, the administrator of the federal unemployment insurance benefit program for the state. The names of the bogus companies included Latasha’s Devining Cleaning Service, Charm Boutique, and Infinite Cleaning Service, according to the indictment. Givens, Laron Taylor, and Raschell Taylor allegedly opened and maintained post office boxes responsible for receiving the fake businesses’ mail.
Logie, Jolivet, and Evelyn Taylor filed claims for unemployment insurance in their own names, claiming unemployment from the fake businesses created by the co-conspirators, the indictment alleges. Other times, the conspirators allegedly filed unemployment insurance claims using the names of other people, including prison inmates.
After being supplied California EDD-funded debit cards, the defendants allegedly withdrew funds from the cards that were in the name of other claimants. In total, the defendants fraudulently obtained approximately $1,106,282 in unemployment insurance benefits, according to the indictment.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
If convicted of all charges, each defendant would face a statutory maximum sentence of 22 years in federal prison.
This matter was investigated by the United States Department of Labor, Office of Inspector General and California EDD Investigation Division, with assistance from the United States Postal Inspection Service and U.S. Marshals Service.
This case is being prosecuted by Assistant United States Attorney Puneet V. Kakkar of the International Narcotics, Money Laundering, and Racketeering Section.
Nigerian National Brought to U.S. to Face Charges of Conspiring to Launder Hundreds of Millions of Dollars from Cybercrime SchemesRead the Press Release
COMPLAINTLOS ANGELES – A Dubai resident who flaunted his extravagant lifestyle on social media has arrived in the United States to face criminal charges alleging he conspired to launder hundreds of millions of dollars from business email compromise (BEC) frauds and other scams, including schemes targeting a U.S. law firm, a foreign bank and an English Premier League soccer club.
Ramon Olorunwa Abbas, 37, a.k.a. “Ray Hushpuppi” and “Hush,” a Nigerian national, arrived in Chicago Thursday evening after being expelled from the United Arab Emirates (UAE). Abbas made his initial U.S. court appearance this morning in Chicago, and he is expected to be transferred to Los Angeles in the coming weeks.
Abbas was arrested last month by UAE law enforcement officials. FBI special agents earlier this week obtained custody of Abbas and brought him to the United States to face a charge of conspiring to engage in money laundering that is alleged in a criminal complaint filed on June 25 by federal prosecutors in Los Angeles.
According to an affidavit filed with the complaint, Abbas maintains social media accounts that frequently showed him in designer clothes, wearing expensive watches, and posing in or with luxury cars and charter jets. “The FBI’s investigation has revealed that Abbas finances this opulent lifestyle through crime, and that he is one of the leaders of a transnational network that facilitates computer intrusions, fraudulent schemes (including BEC schemes), and money laundering, targeting victims around the world in schemes designed to steal hundreds of millions of dollars,” according to the affidavit.
The affidavit describes BEC schemes as often involving a computer hacker gaining unauthorized access to a business’ email account, blocking or redirecting communications to and/or from that email account, and then using the compromised email account or a separate fraudulent email account to communicate with personnel from a victim company and to attempt to trick them into making an unauthorized wire transfer.
“BEC schemes are one of the most difficult cybercrimes we encounter as they typically involve a coordinated group of con artists scattered around the world who have experience with computer hacking and exploiting the international financial system,” said United States Attorney Nick Hanna. “This case targets a key player in a large, transnational conspiracy who was living an opulent lifestyle in another country while allegedly providing safe havens for stolen money around the world. As this case demonstrates, my office will continue to hold such criminals accountable, no matter where they live.”
“In 2019 alone, the FBI recorded $1.7 billion in losses by companies and individuals victimized through business email compromise scams, the type of scheme Mr. Abbas is charged with conducting from abroad,” said Paul Delacourt, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “While this arrest has effectively taken a major alleged BEC player offline, BEC scams represent the most financially costly type of scheme reported to the FBI. I urge anyone who transfers funds personally or on behalf of a company to educate themselves about BEC so they can identify this insidious scheme before losing sizable amounts of money.”
“This was a challenging case, one that spanned international boundaries, traditional financial systems and the digital sphere,” said Jesse Baker, Special Agent in Charge of the United States Secret Service, Los Angles Field Office. “Technology has essentially erased geographic boundaries leaving trans-national criminal syndicates to believe that they are beyond the reach of law enforcement. The success in this case was the direct result of our trusted partnerships between the Department of Justice and our federal law enforcement colleagues. These partnerships helped dismantle a sophisticated organized crime group who preyed upon unsuspecting businesses. It is thanks to these partnerships that the American people can feel a bit more secure today.”
The affidavit alleges that Abbas and others committed a BEC scheme that defrauded a client of a New York-based law firm out of approximately $922,857 in October 2019. Abbas and co-conspirators allegedly tricked one of the law firm’s paralegals into wiring money intended for the client’s real estate refinancing to a bank account that was controlled by Abbas and the co-conspirators.
The affidavit also alleges that Abbas conspired to launder funds stolen in a $14.7 million cyber-heist from a foreign financial institution in February 2019, in which the stolen money was sent to bank accounts around the world. Abbas allegedly provided a co-conspirator with two bank accounts in Europe that Abbas anticipated each would receive €5 million (about $5.6 million) of the fraudulently obtained funds.
Abbas and others further conspired to launder hundreds of millions of dollars from other fraudulent schemes and computer intrusions, including one scheme to steal £100 million (approximately $124 million) from an English Premier League soccer club, the complaint alleges.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
If convicted of conspiracy to engage in money laundering, Abbas would face a statutory maximum sentence of 20 years in federal prison.
The FBI led the investigation of Abbas, and the United States Secret Service was also involved and provided substantial assistance. The FBI further thanks the government of the United Arab Emirates and the Dubai Police Department for their substantial assistance.
This case is being prosecuted by Assistant United States Attorneys Anil J. Antony and Joseph B. Woodring of the Cyber and Intellectual Property Crimes Section. The Criminal Division’s Office of International Affairs provided substantial assistance in this matter.
Santa Ana Man Sentenced to 15 Years in Prison for Possessing Nearly One Kilogram of Fentanyl and Gun in His Bedroom ClosetRead the Press Release
SANTA ANA, California – An Orange County man who was arrested after authorities uncovered at his residence nearly one kilogram of the extremely potent synthetic opioid fentanyl, as well as a .45 caliber pistol, was sentenced today to 180 months in federal prison.
Guillermo Ernesto Sanchez Hermosillo, 43, of Santa Ana, was sentenced by United States District Judge Josephine L. Staton. Hermosillo pleaded guilty on January 24 to one count of possession with intent to distribute fentanyl and one count of possession of a firearm in furtherance of a drug trafficking crime.
Hermosillo received a 10-year mandatory minimum sentence for the fentanyl crime and a consecutive five-year mandatory minimum sentence for the firearm offense.
After receiving information that Hermosillo was engaging in drug-trafficking activities, officers with the Huntington Beach Police Department and a special agent with the Bureau of Alcohol, Tobacco, Firearms and Explosives went to Hermosillo’s apartment on July 31, 2018 to conduct a probation compliance check. Hermosillo was on probation after sustaining a conviction in a domestic violence case four months earlier. At the time of the search, there were three minors in the apartment, including a 3-week-old baby.
Hermosillo admitted in his plea agreement that at the time of the July 2018 search, in a bedroom closet in his residence, he possessed 891 grams of fentanyl, nearly two kilograms of heroin and approximately 2.7 kilograms of methamphetamine. Hermosillo also admitted to knowingly possessing a firearm – a Glock.45 caliber pistol – in furtherance of a drug trafficking crime.
The ATF and the Huntington Beach Police Department investigated this matter.
This case was prosecuted by Assistant United States Attorney Anne C. Gannon of the Santa Ana Branch Office.
Northridge Man Sentenced to More Than 21 Years in Federal Prison for Running $3.3 Million Scheme that Used Stolen Identities of ChildrenRead the Press Release
LOS ANGELES – A San Fernando Valley man was sentenced today to 259 months in federal prison for overseeing a long-running $3.3 million credit card, loan and real estate fraud scheme using stolen identities, primarily that of children.
Turhan Lemont Armstrong, 50, of Northridge, was sentenced by United States District Judge R. Gary Klausner, who also ordered him to pay $3,305,609 in restitution. Judge Klausner also has ordered the forfeiture of two homes – one in Northridge, the other in Perris – purchased with illicit funds obtained from the scheme.
At the conclusion of a two-week trial that ended in May 2019, a jury found Armstrong guilty of all 51 counts in a federal grand jury indictment. The indictment included charges of conspiracy to commit financial institution fraud, financial institution fraud, making false statements to financial institutions, conspiracy to commit money laundering, money laundering, conspiracy to commit access device (credit card) fraud, access device fraud, interstate transportation of stolen vehicles, and aggravated identity theft.
Armstrong used stolen identities and Social Security numbers to obtain credit cards, open bank accounts, set up shell companies, apply for loans, and purchase homes and cars. Armstrong and his co-defendants favored using the Social Security numbers of children and people who had left the United States because they would be less likely to monitor their credit.
In addition to using fraudulently obtained credit cards to purchase goods, members of the scheme were able to use point-of-sale terminals maintained by “collusive merchants,” which allowed them to make what were essentially cash withdrawals.
Armstrong and his co-conspirators also used the fraudulent information to apply for loans from financial institutions across the country. In some instances, Armstrong obtained loans for cars that had already been exported out of the United States.
Armstrong did not report any income to the IRS for the years 2009 through 2017 – yet he maintained residences in Georgia, Florida and the Sherwood Forest neighborhood of Northridge. When authorities went to Armstrong’s apartment in Atlanta in late 2017 to arrest him pursuant to the indictment, he evaded law enforcement, only to be arrested three days later leaving his house in Fort Lauderdale, Florida. Investigators executed search warrants at all three of Armstrong’s homes, as well as two storage units in the Los Angeles area, where they discovered false identity documents, hundreds of credit cards in various names, and lists of Social Security numbers belonging to other people.
“[Armstrong’s] criminal conduct was more than a series of bad decisions – it was a way of life,” prosecutors wrote in their sentencing memorandum. “The victims of [Armstrong’s] crimes run the gamut: banks, credit card issuers, car dealerships, utility companies, and the people all over the country whose identities [he] stole.”
The total loss to the victims in this case is $3,305,609, according to court documents.
Co-defendants Mounir Deiri, 59, of Van Nuys, and Andres Velarde, 57, of Culver City, each pleaded guilty in 2018 to charges in this case and are serving federal prison sentences of 51 months and 60 months, respectively.
The investigation of Armstrong was conducted by Homeland Security Investigations. Substantial assistance was provided by the Social Security Administration’s Office of Inspector General, the Miami-Dade Police Department, and the North Miami Beach Police Department.
This case was prosecuted by Assistant United States Attorneys Alexander B. Schwab of the Major Frauds Section, Allison L. Westfahl Kong, Chief of the General Crimes Section, and Michael Sew Hoy of the Asset Forfeiture Section.
West Hills Man Arrested on Federal Arson Charge for Allegedly Starting Fire in Santa Monica Restaurant during Civil DisturbanceRead the Press Release
LOS ANGELES – A West Hills man was arrested this morning on federal charges alleging he started a fire that caused substantial damage to the Sake House by Hikari in Santa Monica on May 31.
Micah Tillmon, 19, was arrested without incident this morning by special agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives and officers with the Santa Monica Police Department. Tillmon is expected to make his initial court appearance this afternoon in United States District Court in downtown Los Angeles.
Tillmon was arrested pursuant to a criminal complaint filed on June 25 and unsealed after his arrest. The complaint charges Tillmon with one count of arson, a felony offense that carries a mandatory minimum sentence of five years in federal prison and a statutory maximum sentence of 20 years.
According to the affidavit in support of the criminal complaint, security video from the restaurant shows Tillmon removing “a red tube-shaped object from his jacket, which he placed behind the reception desk area of the restaurant before walking away. Within seconds of that action, smoke and fire appeared from the area….”
Investigators with the Santa Monica Fire Department determined that the fire was caused by red object that Tillmon allegedly placed in the restaurant, which is at the corner of Santa Monica Boulevard and 4th Street.
Tillmon was identified by detectives with the Santa Monica Police Department, who reviewed numerous security videos and social media posts. Tillmon was also linked to the fire when investigators uncovered a video showing his white Ford Explorer parking next to the Sake House four minutes before the fire started and then reversing across the street soon after the fire started, according to the affidavit. That same video allegedly shows the Explorer parking about 500 feet away from the Sake House, and Tillmon exiting the vehicle and looting a nearby business.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
This matter is being prosecuted by Assistant United States Attorney Shawn Andrews of the Violent and Organized Crime Section.
Retired Postal Worker Sentenced to over 8 Years in Prison for Bribery Scheme Involving Bulk Mail that Caused $11.7 Million in LossesRead the Press Release
LOS ANGELES – A former employee of the United States Postal Service was sentenced today to 100 months in federal prison for accepting bribes from business customers in exchange for falsely approving unpaid or underpaid bulk mail shipments, causing more than $11.7 million in total losses to his employer.
Juan Enrique Caudillo, 60, of Lakewood, was sentenced by United States District Judge R. Gary Klausner. Judge Klausner also ordered Caudillo, who has been in federal custody since December 2018, to pay $11,745,608 in restitution to the U.S. Postal Service. Caudillo pleaded guilty in March 2019 to one count of conspiracy to commit mail fraud.
Caudillo, who retired from the U.S. Postal Service last year, also agreed to surrender his pension as restitution, as well as the full balance – approximately $140,000 – of his Thrift Savings Plan, a 401(k)-type account available to federal employees.
Since at least 2012, Caudillo, while working as a bulk mail clerk at the Paramount post office, took bribes in exchange for approving unpaid or underpaid bulk mail shipments as fully paid. In one scheme, the owner of Premier Mailing, Inc., a Paramount-based company, paid Caudillo bribes in return for Caudillo falsely listing certain mailings as prepaid, resulting in no postage being paid for them. In a separate scheme, Caudillo accepted bribes to allow another business mailer to underreport information, resulting in reduced payment to the Postal Service for mailings.
“[Caudillo] took advantage of his special training and detailed knowledge of postal procedures to make his fraud nearly impossible to detect: He directed his co-conspirators to use the more cumbersome manual mailing forms rather than the more modern digital ones, exactly the opposite of Postal Service policy,” prosecutors wrote in their sentencing memorandum. “As a result, [Caudillo’s] fraud was buried in a mountain of paper rather than exposed by a computer system that can easily cross-check the number of pieces of mail sent from one post office with those received at another.”
Caudillo has agreed to forfeit almost $700,000 in cash seized from his residence during a November 2018 search warrant. Caudillo also agreed to forfeit approximately $50,000 seized from various bank accounts he maintained, and a Eureka, California residence that he purchased with the scheme’s proceeds of the schemes.
“Mr. Caudillo defrauded the Postal Service and abused his position of public trust by accepting bribes from businesspeople who didn’t want to pay to use the mails,” said United States Attorney Nick Hanna. “Public corruption is a priority for my office, and today’s sentence reflects our determination to aggressively prosecute wrongdoing by any public official.”
Two co-defendants, Ramon Arribeno, 61, of Hacienda Heights, and Armando Lopez-Torres, 63, of the El Sereno neighborhood of the City of Los Angeles, the owner and manager, respectively, of Premier Mailing, each pleaded guilty in 2019 to charges for their roles in the conspiracy and received federal prison sentences.
“The public must have confidence that Postal Service employees will conduct their work in an honest manner,” said Special Agent in Charge Brian Washington, U.S. Postal Service Office of Inspector General. “When employees commit serious offenses, such as taking bribes to overlook large amounts of potential Postal Service revenue, they will be aggressively investigated and prosecuted.”
“Today’s sentencing is a victory for law enforcement in the ongoing battle against people who commit crimes through our nation’s mail system,” said Patricia Armstrong, Inspector in Charge of the Los Angeles Division of the U.S. Postal Inspection Service. “Corrupt employees, like Juan Caudillo, are especially troubling because their actions undermine trust in great public institutions.”
These matters were investigated jointly by the U.S. Postal Service Office of Inspector General and the U.S. Postal Inspection Service.
This case was prosecuted by Assistant United States Attorney Andrew G. Brown of the Major Frauds Section.
Two Arrested Pursuant to Grand Jury Indictment that Alleges Family-Run Narcotics Ring Trafficked Cocaine and FentanylRead the Press Release
LOS ANGELES – Federal authorities this morning arrested two defendants named in a federal grand jury indictment that alleges a family-run drug trafficking organization trafficked in kilogram quantities of cocaine, as well as fentanyl pills.
With one of the named defendants already in federal custody, authorities are continuing to search for the three remaining defendants, which includes the mother who allegedly oversaw the operation.
The eight-count indictment lists a series of drug deals, attempted narcotics transactions and money laundering activity starting in September 2018 and running through July 3, 2019.
The indictment charges six defendants:
- Maria Trinidad Gutierrez Mendoza, aka “Tia,” 54, of Downey, the alleged leader of the narcotics ring, who allegedly possessed 4.3 kilograms (about 9.5 pounds) of cocaine one year ago;
- Maria’s son, Jose Ceja Gutierrez, aka “Feo” and other aliases, 32, of South Gate, who is currently in federal prison on unrelated charges;
- Maria’s daughter, Karina Ceja Gutierrez, 35, of Los Angeles, who allegedly helped her mother obtain cocaine and was arrested today;
- Jose’s girlfriend, Esmerelda Rodriguez, aka “Barbara Moran,” 29, of Huntington Park, who allegedly helped obtain fentanyl pills;
- Primitivo Cisneros Cruz, aka “Primo,” 70, of Los Angeles, an alleged source of narcotics for the drug ring, who allegedly was found with a kilogram of cocaine in May 2019 and was arrested today; and
- Bridgett Coates, aka “Sharol,” “Janet” and “Yane,” 55, of Lawndale, an alleged customer of the organization.
Karina Gutierrez and Cruz are expected to be arraigned this afternoon in United States District Court in downtown Los Angeles.
All six defendants are charged with conspiracy to distribute and to possess with intent to distribute controlled substances, a charge that carries a mandatory minimum sentence of 10 years and a statutory maximum sentence of life.
The indictment further charges Gutierrez Mendoza with possessing 4.3 kilograms of cocaine one year ago. Jose Gutierrez and Rodriguez are charged with possession with intent to distribute controlled substances related to an April 2019 seizure of nearly 7,400 fentanyl pills falsely marked as oxycodone. Cruz is charged with possessing a kilogram of cocaine in May 2019.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
The two-year investigation into the Gutierrez drug trafficking organization was conducted jointly by the Drug Enforcement Administration and Homeland Security Investigations. Substantial assistance was provided by the South Gate Police Department.
This case is being prosecuted by Assistant United States Attorney Kathy Yu of the International Narcotics, Money Laundering, and Racketeering Section.
Fugitive Chinese National Sentenced to More Than 3 Years in Prison for His Role in Large-Scale Birth Tourism and Immigration Fraud RingRead the Press Release
SANTA ANA, California – A Chinese national was sentenced in absentia today to 37 months in federal prison for participating in a large-scale birth tourism scheme that engaged in visa fraud that allowed foreign nationals to come to the United States and give birth so their children would receive U.S. birthright citizenship.
Chao “Edwin” Chen (陈超), 35, was sentenced by United States District Judge James V. Selna. Chen pleaded guilty in June 2016 to visa fraud, marriage fraud and filing a false tax return. Soon after pleading guilty, Chen fled to China and remains a fugitive.
Along with Dongyuan Li (李冬媛), 42, of Irvine, and Li’s husband, Qiang Yan (闫强), 44, Chen was charged in the nation’s first cases alleging organized birth tourism operations. Chen operated an Orange County-based business named You Win USA, which they marketed to pregnant foreign nationals – mostly from China – who wanted to come to the United States to obtain U.S. citizenship for their children. As part of the scheme, Chen, Li and Yan coached the foreign nationals to misrepresent the true intentions of their visits to United States at ports of entry.
You Win USA advertised that its “100-person team” in China and the U.S. had served more than 500 Chinese birth tourism customers. Chen and Li used 20 apartments in Irvine, charged each customer $40,000 to $80,000, and received $3 million in international wire transfers from China in just two years. You Win USA promoted the benefits of giving birth in the United States rather than in China, which included “13 years of free education from grade school to high school,” “Less pollution” than China,” “An easier way for the whole family to immigrate to the United States,” and “Priority for jobs in U.S. government, public companies, and large corporations.”
When he pleaded guilty, Chen admitted that he had served at least 60 customers, including People’s Republic of China government employees. For example, one of You Win USA’s customers, Xiao Yan Liu (刘小燕), was indicted in November 2018 for two counts of visa fraud and one count of lying to federal law enforcement. According to her visa application, she was the “Chief Physician” at the Henan Shangqiu Power Supply Company Staff Hospital.
Chen admitted in his plea agreement that in June 2014, he met with an undercover agent (UCA) posing as a birth tourism customer, which resulted in a co-conspirator uploading a visa application in China that contained false information about the UCA’s length of travel, location of stay, and personal information. After that fake visa application was uploaded, Chen put the UCA in touch with his “trainer” in China to teach the pregnant customer how to trick U.S. customs and enter the United States without her pregnancy being detected.
Chen admitted that in addition to the birth tourism scheme, he also engaged in marriage fraud for himself. According to his plea agreement, Chen entered into a sham marriage to a U.S. citizen and paid the woman $25,000 so he could obtain a green card. In February 2014, Chen also filed a false 2013 federal income tax return in order to prove the legitimacy of his sham marriage, which falsely claimed his gross receipts were $227,453.
Li was sentenced in December 2019 to 10 months in federal prison for her role in the scheme.
Yan, who is a fugitive believed to be in China, was indicted in December 2018 on three counts of visa fraud for filing an application for an “O” visa premised upon being an “alien of extraordinary ability,” which falsely claimed that he had co-authored two books. According to Yan’s indictment, when federal agents search his and Li’s home in 2015, he claimed to have more than $10 million in his Chinese bank accounts.
At least 10 other defendants charged in these birth tourism indictments have fled to China, including Jun Xiao (肖俊) and LongJing Yi (易珑静), who were indicted in February 2018 on charges of conspiracy, visa fraud, obstruction of justice, and criminal contempt. According to court documents in their case, Xiao and Yi paid only $4,600 of the $32,291 in hospital charges related to the birth of their baby in Orange County. The indictments also detail communications from Xiao after he had fled to China, where he continued to denigrate a federal court order requiring him to stay in the United States: “U.S. can’t do anything to me.”
In January 2020, the U.S. Department of State cited these birth tourism cases when changing the official rules for issuing visas for travel to the United States for the purpose of giving birth.
These cases were investigated by Homeland Security Investigations and IRS Criminal Investigation. U.S. Customs and Border Protection, U.S. Citizenship and Immigration Services, and the Irvine Police Department provided substantial assistance.
This matter was prosecuted by Assistant United States Attorney Charles E. Pell of the Santa Ana Branch Office.
‘Secretary’ to Mexican Mafia Member, who Ferried Orders from Imprisoned Gang Leader, Sentenced to over 12½ Years in PrisonRead the Press Release
LOS ANGELES – A Whittier woman who was convicted earlier this year on several charges related to her role as a “secretary” to an imprisoned Mexican Mafia member who controlled a street gang was sentenced today to 151 months in federal prison.
Sylvia Olivas, 73, was sentenced by United States District Judge Dale S. Fischer for playing an active role in the affairs of the Canta Ranas street gang.
Following a 2½-week trial in February, a federal jury found Olivas guilty of participating in three separate conspiracies – one to violate the Racketeer Influenced and Corrupt Organization (RICO) Act, a second involving the trafficking of methamphetamine and heroin, and a third centered on money laundering.
For at least a decade, Olivas served as the secretary to her brother, David Gavaldon, a long-time member of the Canta Ranas street gang who was not charged in this case as he is serving a life-without-parole sentence in Pelican Bay State Prison. From prison, Gavaldon exerted control over Canta Ranas and other gangs, and he received compensation in the form of “rent” or “taxes” generated by drug trafficking and other offenses committed in gang territory.
Olivas regularly visited Gavaldon to discuss gang business and obtain orders that she brought back to the gang.
Olivas “was a Mexican Mafia secretary in a large-scale racketeering enterprise – a powerful and highly respected role within this criminal organization,” prosecutors wrote in a sentencing memorandum. “Despite her false and misleading statements in trial to cover up her involvement in the CRO [Canta Ranas Organization], the evidence overwhelmingly showed that defendant knew exactly what happened in the CRO and participated in it by passing messages from Mexican Mafia leader David Gavaldon to two generations of shotcallers, delivering edicts on extortionate taxes, secretly meeting with CRO members to collect taxes and launder them through her accounts to distribute them to David Gavaldon and his chosen recipients, and using code and other measures to cover her criminal activity from law enforcement.”
When she imposed the sentence this morning, Judge Fischer disputed Olivas’ contention that she should receive leniency because she had no prior criminal convictions. “She has been in trouble every day of her life helping the CRO, she was just never caught,” the judge said.
Olivas was among 51 defendants charged in a 2016 federal grand jury indictment targeting Canta Ranas members and associates. Nearly all of those defendants have been convicted, including Jose Loza, the “shotcaller” of the Santa Fe Springs and Whittier-based Canta Ranas gang, who was sentenced in March to life plus an additional 30 years in federal prison.
The RICO indictment targeting the Canta Ranas gang was the result of Operation Frog Legs, which was an investigation by the Southern California Drug Task Force, which is led by the Drug Enforcement Administration as part of the High Intensity Drug Trafficking Area (HIDTA) initiative. The Task Force members that participated in Operation Frog Legs were Homeland Security Investigations, the Whittier Police Department, the Los Angeles County Sheriff’s Department, IRS Criminal Investigation, and the California Department of Corrections and Rehabilitation, Office of Correctional Safety, Special Service Unit. The investigation was conducted with the support of the Organized Crime Drug Enforcement Task Force (OCDETF).
The case against Olivas was prosecuted by Assistant United States Attorneys Chelsea Norell, MiRi Song and Jehan Pernas of the International Narcotics, Money Laundering, and Racketeering Section.
Orange County Man Sentenced to 2½ Years in Federal Prison for Embezzling $1.8 Million from Commercial Real Estate CompanyRead the Press Release
SANTA ANA, California – An Orange County man was sentenced today to 30 months in federal prison for embezzling more than $1.8 million from his employer, a commercial real estate management company and developer.
Duy Duc Nguyen, 38, of Garden Grove, was sentenced by United States District Judge James V. Selna, who ordered him to pay $1,812,331 to the victim, Anaheim-based Milan Capital Management.
On January 17, Nguyen pleaded guilty to one count of wire fraud.
Milan Capital employed Nguyen as an accounts payable clerk in its accounting department from July 2014 to December 2017. Beginning in January 2015 and continuing until March 2018, Nguyen stole the password of Milan Capital’s treasurer, then used it without permission to alter the bank account and routing information listed in certain vendor accounts in the company’s accounting system, replacing them with his own bank account and routing numbers. As a result, Nguyen fraudulently caused Milan Capital to make payments directly into his bank account while seemingly paying the actual invoices of legitimate vendors.
Nguyen also altered company records and lied to company executives when they asked about vendors’ complaints of non-payment of various invoices. The company ultimately paid the actual vendors in what amounted to a duplicate payment.
After Milan Capital terminated Nguyen in December 2017, he continued to steal money from the company until his scheme to defraud was discovered in March 2018. During this period, Nguyen unlawfully gained entry into Milan Capital’s office by using an improperly retained key and by misusing one or more passwords to gain access to the company’s accounting system and fraudulently cause the company to transmit more money into his bank account.
In total, Nguyen stole $1,812,331 from the victim and used the funds for his own personal expenses.
The FBI investigated this matter.
This case was prosecuted by Assistant United States Attorney Robert J. Keenan of the Santa Ana Branch Office.
Glendale Man Pleads Guilty to Bank Fraud for Role in Credit Card ‘Bust-Out’ Scheme Used to Buy Cemetery Plots, Luxury CarsRead the Press Release
LOS ANGELES – A Glendale man pleaded guilty today to federal criminal charges that he led a series of scams, including “bust-out” schemes where he and others fraudulently charged millions of dollars to credit cards sometimes opened with “synthetic identities” and later used them to buy luxury cars and cemetery plots that he sold for profit.
Mikayel Hmayakyan, 43, pleaded guilty to two counts of bank fraud and one count of aggravated identity theft.
United States District Judge George H. Wu has scheduled a November 16 sentencing hearing, at which time Hmayakyan will face a statutory maximum sentence of 62 years in federal prison.
In his plea agreement, Hmayakyan, the case’s lead defendant, admitted to running a series of fraudulent schemes, including one from November 2014 to September 2015, where he used fraudulently obtained credit cards to purchase hundreds of thousands of dollars’ worth of liquor and luxury watches.
Hmayakyan and others obtained the credit cards – sometimes using their real names, but often with synthetic identities created with a combination of real and fictitious information – that were run up to the credit limit. Members of the scheme then “paid down” by submitting payments from accounts with insufficient funds or through fake accounts to restore the credit line, which allowed them to make additional purchases.
As part of the scheme, Hmayakyan and others used the fraudulently obtained credit cards to purchase hundreds of thousands of dollars in alcoholic beverages on behalf of the now-closed Liquor Spot in Glendale, where co-defendant Vahan Aloyan, 45, of Glendale, was a manager.
During the execution of a search warrant in 2016, law enforcement seized more than 37,000 bottles of alcoholic beverages, worth approximately $300,000, from the Liquor Spot. They also seized nearly $13,000 in U.S. currency from the store, as well as nearly $13,000 and 37 watches and other jewelry items from Aloyan’s residence.
In criminal conduct dating back to August 2010 and continuing until April 2016, Hmayakyan fraudulently applied for loans under an alias to obtain a Kia Optima and in a real person’s name for luxury cars, including Lexus automobiles, according to the plea agreement. Hmayakyan admitted that he never intended to pay any credit card bills nor made any payments on the loans.
Hmayakyan also admitted that from March 2014 until January 2017, he used fraudulent credit cards in the names of various aliases – including “Liam Sarcozzy” and “Marco Reus” – to purchase plots at Forest Lawn Cemetery in Glendale, which he later sold at a profit.
The total intended loss to which the financial institutions were exposed was $5,232,383, according to the plea agreement.
Co-defendant Gayane Hakobyan, 70, of Hollywood Hills, also pleaded guilty today to one count of bank fraud. Hakobyan admitted that she participated in the “bust-out” scheme by allowing others to open credit card accounts in her name with the victim financial institutions.
Judge Wu has scheduled an October 8 sentencing hearing for Hakobyan, at which time she will face a statutory maximum sentence of 30 years in federal prison.
Co-defendant Mikayel Hovhannisyan, 38, of North Hollywood, pleaded guilty in June 2019 to one count of bank fraud and is serving a nine-month federal prison sentence. Aloyan, the sole remaining defendant, is scheduled to go on trial in this matter on October 6.
The United States Secret Service, Homeland Security Investigations and the Glendale Police Department investigated this matter.
This case is being prosecuted by Assistant United States Attorney Poonam G. Kumar of the Major Frauds Section.
Second Defendant Charged with Murder in New Indictment in Case of Man Found Dead in Pacific Ocean after Being Shot on a BoatRead the Press Release
SANTA ANA, California – With a new indictment issued by a federal grand jury this week, a man and woman from Orange County now both face charges of first-degree murder and conspiracy to commit murder in the slaying last year of a man whose body was found floating in the Pacific Ocean with gunshot and blunt force trauma wounds.
The grand jury on Wednesday returned a 10-count superseding indictment that adds a conspiracy count alleging that the two defendants plotted and were working together when the victim was lured onto a boat last fall with promises of an overnight lobster fishing trip. The body of the victim – who is identified in the indictment only as “T.D.” – was recovered from the Pacific Ocean several miles northwest of Oceanside on October 16, 2019.
While one defendant was previously charged with murder in this case, the superseding indictment adds a murder charge against Sheila Marie Ritze, 40, of San Juan Capistrano, a registered owner of the boat, who previously was accused of being an accessory after the fact (a charge not alleged in the superseding indictment). The alleged shooter – Hoang Xuan Le, also known as “Wayne” and “Wangsta,” 39, of Fountain Valley – was previously indicted on a charge of first-degree murder within the special maritime and territorial jurisdiction of the United States.
The superseding indictment now alleges that Le and Ritze conspired to commit the murder. The conspiracy count alleges that, on October 15, Le shot T.D., Le threw the victim overboard, and “defendants Le and Ritze left victim T.D. in the Pacific Ocean to die and went back to the Dana Point Marina.”
Le and Ritze, who pleaded not guilty earlier this year to charges in the original three-count indictment, are currently being held in federal custody without bond. They are scheduled to be arraigned on the new indictment on July 6 in United States District Court in Los Angeles.
In addition to the three charges related to the murder, the superseding indictment adds a series of narcotics charges against Le related to drug deals with an undercover operative during the investigation into the slaying. Le allegedly distributed cocaine on two occasions and distributed methamphetamine in two transactions.
The superseding indictment further charges Le with possessing methamphetamine and two firearms – a shotgun and an AR-15-type “ghost gun” – when he was arrested.
The final count in the indictment charges Ritze with lying to federal investigators during an interview after she was arrested. The indictment specifically alleges that Ritze falsely stated, among other things, that she had never met the victim prior to the October 15 boat trip.
Le and Ritze were arrested on December 19 after prosecutors filed a criminal complaint in the case being investigated by the FBI and the Coast Guard Investigative Service.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
The first-degree murder charge against Le and Ritze carries a mandatory sentence of life without parole in federal prison. The conspiracy charge carries a maximum sentence of life without parole, as does the charge of discharging a firearm in furtherance of and during and in relation to a crime of violence. The narcotics-related offenses against Le could add decades to any sentence he receives if convicted.
This case is being prosecuted by Assistant United States Attorneys Greg Scally and Vibhav Mittal of the Santa Ana Branch Office.
Los Angeles City Councilman Jose Huizar Arrested on Federal RICO Charge that Alleges He Agreed to Accept at Least $1.5 Million in Illicit BenefitsRead the Press Release
COMPLAINTLOS ANGELES – Special agents with the FBI this morning arrested Jose Huizar, an elected member of the Los Angeles City Council, on a federal racketeering charge that alleges he led a criminal enterprise that used his powerful position at City Hall to solicit and accept lucrative bribes and other financial benefits to enrich himself and his close associates in exchange for Huizar taking official actions favorable to the developers and others who financed and facilitated the bribes.
Huizar, 51, of Boyle Heights, was taken into custody at his home without incident and is expected to make his initial appearance this afternoon in United States District Court in downtown Los Angeles.
Huizar was arrested pursuant to a federal criminal complaint filed on June 22 and unsealed this morning. The complaint charges Huizar with one count of conspiring to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act and alleges that, as part of the criminal enterprise, he and his associates violated a series of laws, including bribery, honest services fraud, extortion and money laundering.
“This case pulled back the curtain on rampant corruption at City Hall,” said United States Attorney Nick Hanna. “Councilman Huizar violated the public trust to a staggering degree, allegedly soliciting and accepting hundreds of thousands of dollars in bribes from multiple sources over many years. Using the power of his office to approve or stall large building projects, Huizar worked through a web of other corrupt city officials, lobbyists, consultants and developers to line his pockets and maintain his hold on Council District 14, which he turned into a money-making criminal enterprise that shaped the development landscape in Los Angeles.”
“Mr. Huizar was busy enjoying the fruits of his alleged corruption while his criminal enterprise sold the city to the highest bidder behind the backs of taxpayers,” said Paul Delacourt, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “As we continue to investigate this case, we urge residents, business owners and city employees to come forward with information about bribery and illegal practices in government. The FBI relies on the cooperation of others to build cases that successfully root out corruption in order to restore integrity in public office.”
Huizar has represented Council District 14 (CD-14), which includes downtown Los Angeles and its surrounding communities, since 2005. In addition to representing an area that has experienced a commercial real estate boom in recent years, Huizar for several years was chair of the city’s influential Planning and Land Use Management Committee, a position he lost after the FBI executed search warrants at his city offices and personal residence in November 2018. During the search of Huizar’s home, agents seized approximately $129,000 cash that was stashed in his closet.
“The federal investigation has revealed that Huizar operated a pay-to-play scheme in the City, utilizing and commodifying the powerful Council seat of CD-14, whereby he solicited and accepted financial benefits from international (primarily Chinese) and domestic developers with projects in the City in exchange for favorable official actions,” according to the affidavit in support of the criminal complaint.
The 116-page affidavit alleges that Huizar operated the “CD-14 Enterprise,” along with co-conspirator members, including “Individual 1,” a former general manager of the Los Angeles Department of Building and Safety and former deputy mayor; George Esparza, Huizar’s former special assistant; and real estate development consultant George Chiang. Members and associates of the criminal enterprise referred to Huizar as their “boss,” operated as a criminal organization, and worked together for common purposes, the complaint alleges. The CD-14 Enterprise allegedly had several objectives, including 1) enriching its members and associates through means that included bribery, extortion, and honest services fraud, 2) advancing its political goals and maintaining its control and authority, 3) concealing the enterprise’s financial activities, and 4) protecting the enterprise by concealing its activities and shielding the enterprise from detection by law enforcement, the city, and the public.
In recent weeks, both Esparza and Chiang agreed to plead guilty to the same RICO charge that Huizar now faces.
The CD-14 Enterprise was created in early 2013 by Huizar and Individual 1 “at a time when each of them faced significant threats to their political and professional careers,” according to the affidavit. Individual 1, who maintained close relationships with Chinese developers, introduced Huizar to “Chairman E,” a Chinese billionaire who runs a multinational development firm and who owns a hotel in Huizar’s district.
In 2014, Individual 1 facilitated an arrangement whereby Chairman E provided $600,000 in collateral to fund a settlement of a sexual harassment lawsuit filed against Huizar by a former CD-14 staffer, allegations that threatened his 2015 re-election campaign. In addition, Huizar directly and indirectly accepted cash and casino gambling chips on more than a dozen lavish trips to Las Vegas – trips that included rides on private jets and stays at luxurious casino villas, one of which cost over $38,000 per night. The complaint also alleges Huizar accepted a trip to Australia and other benefits from Chairman E. In exchange, Chairman E asked for a series of favors from Huizar over time.
Ultimately, Chairman E provided over $800,000 in benefits to Huizar so that Huizar would assist Chairman E’s ambitious plans to redevelop his property in CD-14 and build the tallest building west of the Mississippi River, according to the affidavit.
In a second scheme, “Developer C” agreed to pay a $500,000 cash bribe to secure Huizar’s help in resolving a labor organization’s appeal of a major real estate development which, when resolved, would save the developer millions of dollars. After a middleman, Justin Jangwoo Kim, collected $500,000 cash from Developer C, Kim and Esparza decided to keep some of the money for themselves. Kim pleaded guilty on June 3 to bribery charges and admitted facilitating the bribe from Developer C.
A third major bribery scheme outlined in the affidavit involves “Company D,” another Chinese real estate firm that wanted to develop a large mixed-used project in CD-14. In exchange for Huizar’s support of the project, Company D agreed to hire Huizar “Associate 1” as a consultant to perform work – real estate reports that discussed development opportunities – that actually was completed by Chiang. The affidavit alleges that Company D also financed part of a Huizar family trip to China and agreed to contribute $100,000 to a political action committee that would benefit the campaign of Huizar’s close relative, who Huizar intended to replace him on the City Council after he was termed out in 2020.
Other developers made donations to two PACs that would benefit “Relative A-1’s” campaign in exchange for Huizar taking official action to support their projects, the complaint alleges. One series of donations was made by “Company M” and facilitated by “Executive M,” who allegedly furnished Huizar with opposition research against two female staffers who had sued Huizar for sexual harassment in 2018. With Huizar’s help, Company M was able to get final approval in the fall of 2018 to construct a 35-story project in the Arts District with “minimal” affordable housing units and union labor requirements that saved the company an estimated $14 million, the affidavit alleges. Company M later bragged to its employees that this was a “truly amazing” feat “in a wealthy opinionated hipster community,” according to the affidavit.
The complaint alleges a series of additional corrupt acts, including bribes to Huizar from “Businessperson A,” who wanted to develop business opportunities with Huizar’s help. Businessperson A allegedly provided Huizar a $10,000 monthly cash retainer, $10,000 worth of hotel accommodations on 21 separate occasions, and approximately $18,000 in lavish gifts that included suits, shoes and meals.
Huizar allegedly leveraged his official position to pressure developers to make donations to Relative A-1’s campaign to ensure Huizar’s continued influence in the city and to steer work towards companies linked to his associates, including the law firm that employed Relative A-1, regardless of any legitimate business need.
The complaint affidavit concludes by outlining Huizar’s concealment of illicit benefits, including by instructing his special assistant on how to avoid bank reporting requirements, using his family members to launder hundreds of thousands of dollars in bribes, making false statements on a bank loan application and failing to report his illicit benefits on tax returns and ethics disclosure forms. The complaint also alleges that Huizar engaged in obstructionist conduct, including attempting to influence other witnesses and lying to federal prosecutors and the FBI.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
The RICO conspiracy charge alleged in the complaint carries a statutory maximum sentence of 20 years in federal prison.
The cases against Huizar and his associates in the CD-14 Enterprise are being prosecuted by Assistant United States Attorney Mack E. Jenkins, Chief of the Public Corruption and Civil Rights Section, and Assistant United States Attorneys Veronica Dragalin and Melissa Mills, also of the Public Corruption and Civil Rights Section.
Huizar is the fifth person to be charged in the ongoing corruption investigation being conducted by the FBI and U.S. Attorney’s Office. The other four defendants have agreed to plead guilty.
Chiang is scheduled to plead guilty on June 26 before United States District Judge John F. Walter.
The court has yet to schedule a hearing for Esparza to plead guilty.
Kim is scheduled to be sentenced by Judge Walter on August 17.
Former Los Angeles City Councilman Mitchell Englander is scheduled to plead guilty on July 7 to charges of scheming to falsify material facts related to trips he took to Las Vegas and Palm Springs that were funded by Businessperson A.
Any member of the public who has information related to this or any other public corruption matter in the City of Los Angeles is encouraged to send information to the FBI’s email tip line at [email protected] or to contact the FBI’s Los Angeles Field Office at (310) 477-6565.
L.A. County Public Official Sentenced to One Year in Federal Prison for Accepting Bribes and Cheating on Income Tax ReturnsRead the Press Release
LOS ANGELES – A public official in Los Angeles County’s Internal Services Department was sentenced today to 12 months and one day in federal prison for accepting nearly $300,000 in bribes from an electrical contractor and then failing to report the income he received from those bribes and a side business on his federal tax returns.
Mohammad R. Tirmazi, 51, of Upland, was sentenced by United States District Judge R. Gary Klausner, who also ordered Tirmazi to pay $420,010 in restitution to the County of Los Angeles and the Internal Revenue Service.
In May 2019, Tirmazi pleaded guilty to a two-count information charging him with federal program bribery and subscribing to a false tax return.
Tirmazi worked for the county, first as a supervising telecom engineer and then in 2016 as a section manager for the voice video and application division of the county’s Internal Services Department. He accepted bribes from Enrique Contreras, 40, of Newbury Park, the owner of Tel-Pro Voice & Data, Inc., a vendor that performed low voltage electrical wiring for the county. From late 2014 to 2016, the owner of Tel-Pro paid defendant with cash, checks and gifts. In sum, the bribes totaled $299,707.
In exchange for the bribes, Tirmazi approved change orders requested by Contreras for, among other things, work that did not occur and materials that were not used on county projects.
Tirmazi did not report, or did not force Contreras to correct, violations of the county’s Building and Safety Code or the National Electrical Code that Tirmazi uncovered during inspections of Tel-Pro’s work. Some of those violations related to asbestos removal and Tel-Pro’s failure to properly install cables. Tirmazi admitted in his plea agreement that he generally considered Tel-Pro’s work to be “shoddy,” but he overlooked its poor work because of the bribes Contreras paid him.
Tirmazi formed a Whittier-based company called TEQ Solutions, LLC as a way to conceal bribe payments from Contreras, court filings state. Contreras, who bribed Tirmazi with cash and gifts, also paid Tirmazi with checks made payable to TEQ Solutions that were disguised to look like payment for legitimate services rendered. Because TEQ Solutions did no work for Contreras or Tel-Pro, the checks were nothing more than bribes.
To hide his ownership of TEQ Solutions, Tirmazi used a third party to file the business paperwork and open a bank account. To lower TEQ Solutions’ taxable income, and thus keep more of the bribe money he received, Tirmazi issued sham IRS Form 1099s to make it appear as though other individuals had received income from TEQ Solutions for work legitimately performed.
Tirmazi failed to report on his tax returns for years 2014 to 2016 a total of $355,107 of income he received from bribe payments and a side business selling IT equipment.
Contreras pleaded guilty in May 2019 to federal program bribery and subscribing to a false tax return. He admitted in his plea agreement that he failed to report a total of $636,454 of income he received from 2013 to 2017 as a result of his improper deduction of bribe payments and other personal expenses.
In his plea agreement, Contreras also admitted to bribing two county officials—Tirmazi and Thomas M. Shepos, 70, of Palmdale, a public official formerly employed by the county in the Real Estate Division. Shepos pleaded guilty in November 2018 to accepting bribes and is scheduled to be sentenced on December 7. Contreras’s sentencing hearing is scheduled for July 27.
From 2013 to 2016, Contreras made cash payments to Shepos, totaling approximately $200,000 to $300,000, in exchange for Shepos providing non-public county information to Contreras and helping Contreras secure county contracts.
One of the individuals from whom Shepos admitting receiving bribes was real estate developer Arman Gabaee, 59, of Beverly Hills. Gabaee was arrested and subsequently indicted on federal bribery charges in 2018. His trial is currently scheduled for November 3 before United States District Judge George H. Wu.
Tirmazi, Contreras, and Shepos have agreed to cooperate with federal investigators.
These cases were investigated by the FBI and IRS Criminal Investigation.
These cases are being prosecuted by Assistant United States Attorneys Ruth C. Pinkel and Lindsey Greer Dotson of the Public Corruption and Civil Rights Section.
Mexican Mafia Associate Sentenced to 17½ Years in Federal Prison for Ordering Murders and Assaults in Orange County Jail SystemRead the Press Release
LOS ANGELES – A Mexican Mafia associate who ordered murders and assaults in Orange County’s jail system on the prison gang’s behalf was sentenced today to 210 months in federal prison for his racketeering conspiracy conviction.
Ramon Alvarez, 45, of Santa Ana, was sentenced by United States District Judge R. Gary Klausner. Alvarez pleaded guilty in June 2017 to one count of conspiracy to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act.
Alvarez admitted in his plea agreement that, from October 2008 until September 2013, he agreed to assist the Mexican Mafia while he was a jail inmate. Alvarez was given the power to place fellow inmates on “hard candy” or “green light” lists, which marked other inmates for murder or assault within the Orange County jail system.
In December 2011, Alvarez authorized a co-conspirator to stab and kill a jail inmate, according to court documents. In October 2012, Alvarez identified a jail inmate victim who was cooperating with law enforcement in another inmate’s murder trial, and other Mexican Mafia associates later assaulted that inmate at the Theo Lacy Facility in Orange.
The prison gang’s Orange County faction was headed by Peter Ojeda, a longtime Mexican Mafia member who controlled Latino street gangs in Orange County for at least three decades. Ojeda was found guilty in 2016 of racketeering offenses and was sentenced to 15 years in federal prison, where he died in 2018 at the age of 76.
Ojeda was involved in the operation and management of the Mexican Mafia’s activities in Orange County, which included orchestrating murder schemes, extortion and narcotics trafficking. Ojeda ordered Latino street gangs in Orange County to pay “taxes” that consisted of a portion of the proceeds the gangs earned from various criminal activities, including drug trafficking. In return, gang members were permitted to exert influence over their neighborhoods and territories and seek protection or assistance from the Mexican Mafia.
Alvarez was one of 25 defendants named in a RICO indictment brought as part of Operation “Smokin’ Aces,” which was a multi-agency operation that targeted the Orange County wing of the Mexican Mafia and led to charges against more than 80 defendants in federal court. In total, prosecutors have secured 76 convictions in these cases.
The investigation was jointly conducted by special agents of the Santa Ana Gang Task Force, which consisted of agents and officers with the FBI; IRS Criminal Investigation; the Santa Ana Police Department; the Orange County Sheriff’s Department; the Bureau of Alcohol, Tobacco, Firearms and Explosives; and the California Department of Corrections and Rehabilitation-Special Service Unit.
These cases were prosecuted by Assistant United States Attorney Daniel H. Ahn of the Santa Ana Branch Office.
Lyft Agrees to Resolve Allegations that It Violated Federal Law When Its Drivers Denied Rides to Individuals with DisabilitiesRead the Press Release
LOS ANGELES – Lyft, Inc., has agreed to resolve allegations it violated the Americans with Disabilities Act (ADA) when some of its drivers refused to give rides to people with disabilities who used foldable wheelchairs or walkers, the Department of Justice announced today.
The settlement agreement between the United States and the San Francisco-based ridesharing company seeks to ensure that individuals with disabilities who use collapsible mobility devices will have equal access to Lyft rides.
As part of the agreement, Lyft has pledged to revise its wheelchair policies, including notifying new drivers about them, communicate its wheelchair policies once each quarter to current drivers, and create an educational video for drivers.
The company also agreed to implement a complaint procedure that complies with federal law and hold its drivers accountable for failing to comply with its wheelchair policy, with punishment including possible termination.
Lyft agreed to refund charges and provide $10 credits to riders who make plausible complaints of discrimination under the company’s revised wheelchair policy.
Under the settlement agreement, Lyft will pay damages ranging from $4,000 to $30,000 to four complainants with disabilities and a $40,000 civil penalty to the United States.
For the next three years, Lyft will provide the Justice Department biannual written reports describing the activities it has taken to comply with the ADA.
Lyft fully cooperated with the Justice Department’s investigation, which was launched after a man who uses a wheelchair filed at least 12 complaints with the company regarding his treatment from specific drivers in the Los Angeles area. Eight of his complaints alleged that drivers either refused or could not transport him because he had a wheelchair, while four of his complaints alleged that drivers treated him rudely because he had a wheelchair, according to the settlement agreement.
Another Lyft customer, a veteran who lost both of his legs in combat, alleged that on one occasion in November 2018 a Lyft driver denied him a ride because he had a collapsible wheelchair.
Assistant United States Attorney Acrivi Coromelas of the Civil Division’s Civil Rights Section handled this matter.
Earlier this year, the City of San Clemente settled allegations that from October 2016 to March 2018, it violated the ADA when persons with disabilities who needed wheelchair-accessible vehicles could not use the city’s Lyft program because it did not offer such vehicles.
This year marks the ADA’s 30th anniversary. The Justice Department will continue to use its enforcement and technical assistance tools to eliminate unlawful discrimination against people with disabilities.
For more information on the ADA, 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.