Central District of California

          SANTA ANA, California – A spinal surgeon was sentenced today to 30 months in federal prison for participating in a long-running health care fraud scheme in which he received at least $5 million in kickbacks for performing hundreds of spinal surgeries. The overall scheme resulted in more than $580 million in fraudulent bills being submitted, mostly to California’s worker compensation system.

          Dr. Daniel Capen, 70, of Manhattan Beach, was sentenced by United States District Judge Josephine L. Staton, who also ordered Capen to forfeit $5 million to the United States and pay a $500,000 fine.

          Capen, an orthopedic surgeon specializing in spinal surgeries, pleaded guilty in August 2018 to conspiracy to commit honest services fraud, and soliciting and receiving kickbacks for health care referrals.

          The kickback scheme centered on Pacific Hospital in Long Beach, which specialized in surgeries, especially spinal and orthopedic procedures. Pacific Hospital’s owner, Michael D. Drobot, conspired with doctors, chiropractors and marketers to pay kickbacks in return for the referral of thousands of patients to Pacific Hospital for spinal surgeries and other medical services paid for primarily through the California workers’ compensation system.

          Capen received kickbacks for referring surgeries to Pacific Hospital and also for using medical hardware from a Pacific Hospital-affiliated entity during the spinal surgeries he performed. He also received kickbacks for referring medical services such as urine and drug testing to Pacific Hospital-affiliated entities.

          In total, between 1998 and 2013, Capen accounted for approximately $142 million of Pacific Hospital’s claims to insurers, on which the hospital was paid approximately $56 million. Capen admitted to receiving at least $5 million in kickbacks during the course of his crimes.

          Drobot is serving a five-year prison sentence for conspiracy and paying illegal kickbacks, and has admitted that he orchestrated a wide-ranging fraudulent kickback scheme where paid more than $50 million in bribes to doctors to steer hundreds of millions of dollars in spinal surgeries to his hospital. Drobot ultimately profited millions of dollars from the scheme. Drobot currently faces additional federal criminal charges for allegedly violating a court forfeiture order by illegally selling his luxury cars.

          Seventeen defendants have been charged in connection with the scheme, and 10 of them have been convicted, including Drobot and his son. Another doctor – Timothy James Hunt, 55, of Palos Verdes Estates – was sentenced in late September to two years in federal prison after he admitted taking illegal kickbacks.

          The investigation into the spinal surgery kickback scheme was conducted by the FBI; IRS Criminal Investigation; the California Department of Insurance; and the United States Postal Service, Office of Inspector General.

          This case is being prosecuted by Assistant United States Attorneys Joseph T. McNally of the Violent and Organized Crime Section, Scott D. Tenley of the Santa Ana Branch Office, Ashwin Janakiram of the Major Frauds Section, and Victor A. Rodgers of the Asset Forfeiture Section.

          LOS ANGELES – A former employee of a marijuana distribution warehouse was found guilty by a jury today of federal criminal charges that he conspired with a corrupt Los Angeles County Sheriff’s Department deputy to rob his former employer of $2 million dollars’ worth of marijuana and cash through an armed robbery staged to look like a legitimate law enforcement operation.

          Christopher Myung Kim, 29, of Walnut, was found guilty of conspiracy to distribute marijuana, possession with intent to distribute marijuana, conspiracy against rights, deprivation of rights under color of law, and brandishing a firearm in furtherance of a drug trafficking crime.

          According to evidence presented at his four-day trial, at approximately 3 a.m. on October 29, 2018, LASD Deputy Marc Antrim, 42, of South El Monte, and six co-conspirators, robbed a marijuana distribution warehouse in downtown Los Angeles. Antrim, who was assigned to the LASD station in Temple City, was arrested by federal authorities for his role in the robbery and agreed to cooperate with the government. Antrim, who was dressed as an armed deputy, flashed his badge and a fake search warrant to gain access to the warehouse and detain the warehouse’s security guards in a cage in the back of an LASD Ford Explorer.

          Days before the robbery, Kim had supplied Antrim with inside information about the robbery, including key details about the warehouse’s layout, operation and security. Kim also gave Antrim the warehouse’s blueprints, noting where security guards likely would be stationed and which rooms Antrim and their co-conspirators should “hit” to ensure that the most valuable items were stolen.

          During the two-hour robbery, Antrim and the fake law enforcement team absconded with more than 1,200 pounds of marijuana, two large commercial safes containing more than $600,000 in cash and money orders, and other items of value from the warehouse.

          Hours after the robbery, Antrim drove a rental truck to a storage facility in Walnut, where Kim had rented a storage unit the day of the robbery. Antrim and co-conspirator Kevin McBride, 44, of Glendora, delivered $1.5 million dollars’ worth of stolen marijuana and marijuana products to Kim to resell for profit. The next day, Kim and others unloaded the stolen marijuana from the storage unit into Kim’s white Lexus RX, a Subaru SUV, and a U-Haul moving truck.

          Kim had worked at the warehouse for years, but a dispute with its owners left him “bitterly disgruntled,” according to court documents. Evidence admitted at trial, including Kim’s social media communications, showed that Kim left his job just weeks before the robbery and conspired with Antrim to orchestrate the raid both for profit and to get revenge against his own bosses.

          Antrim, who was arrested on November 8, 2018 on a federal criminal complaint, pleaded guilty on March 4 to multiple felonies in connection with the armed robbery. His sentencing is scheduled for March 16. Five other defendants, including McBride, also have pleaded guilty for their involvement in the robbery and will be sentenced early next year.

          United States District Judge Virginia A. Phillips scheduled a February 10 sentencing hearing, at which time Kim will face a statutory maximum sentence of life in federal prison and a mandatory minimum sentence of 12 years in prison.

          The jury acquitted Kim of possession with intent to distribute cocaine and possessing a firearm in furtherance of a drug trafficking crime.

          This case was investigated by the Drug Enforcement Administration, the FBI, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. LASD’s Internal Criminal Investigations Bureau provided substantial assistance to the federal investigation.

          This matter is being prosecuted by Assistant United States Attorneys Lindsey Greer Dotson of the Public Corruption and Civil Rights Section and Joseph D. Axelrad of the Violent and Organized Crime Section.

          LOS ANGELES – A former executive at StyleHaul Inc., a digital marketing company that represents “influencers” on Instagram and YouTube, pleaded guilty today to federal criminal charges for embezzling more than $22 million from his employer and then using the stolen money for personal expenses and crypto-currency gambling.

          Dennis Blieden, 30, formerly of Santa Monica and now a resident of Cincinnati, pleaded guilty to one count of wire fraud and one count of aggravated identity theft.

          According to his plea agreement, between October 2015 and March 2019, Blieden was the controller and vice president of accounting and finance for StyleHaul, a digital company once based in Hollywood, but which relocated to London earlier this year.

          As part of his job, Blieden had control over the company’s bank accounts, and he abused this authority to wire company money to his personal bank account, according to a plea agreement. Blieden then used the stolen money to pay for personal expenses and to fund his crypto-currency accounts.

          To conceal his scheme, Blieden made fraudulent entries in StyleHaul’s accounting records, falsely representing that the illegal wire transfers he made were authorized payments of money due to StyleHaul clients. Blieden also falsely indicated on one of StyleHaul’s bank accounts that wire transfers to Blieden’s personal bank account were “equity” draws that the company owed him, according to court documents. Furthermore, Blieden created fictitious wire transfer letters that purported to be from Western Union and were designed to make it appear that he had caused wire transfers from StyleHaul to pay money it purportedly owed to a client, the plea agreement states.

          Blieden also disguised his fraud by creating a fictitious lease in May 2018 for the rental of a condominium in Rosarito Beach, Mexico, which bore a forged signature of a StyleHaul executive, according to the plea agreement. Blieden admitted that he illicitly transferred $230,000 of StyleHaul’s funds by falsely representing that the condominium was being rented for business purposes for StyleHaul’s clients and employees. This conduct forms the basis of the aggravated identity theft charge.

          Blieden, who has entered and won professional poker tournaments, also frequently engaged in online gambling with crypto-currency he purchased with embezzled money, according to court documents. During the course of the alleged scheme, Blieden used money he stole from his employer to write $1,204,000 in personal checks to poker players, $1,134,956 was used to pay off his credit cards, and $8,473,734 was transferred to Blieden’s crypto-currency accounts, according to court documents.

          On February 21 and 22, shortly before his dismissal from StyleHaul, Blieden entered into two poker tournaments, wherein the buy-in amounts were $52,000 and $103,000, respectively, court papers state.

          United States District Judge André Birotte Jr. scheduled a March 20 sentencing hearing, at which time Blieden will face a statutory maximum sentence of 22 years in federal prison.

          The FBI investigated this case.

          This matter is being prosecuted by Assistant United States Attorney Valerie L. Makarewicz of the Major Frauds Section.

CRIMINAL INFORMATION         PLEA AGREEMENT         FACTUAL BASIS         DPA          CONDITIONS OF PROBATION

          LOS ANGELES – Monsanto Company has agreed to plead guilty to illegally using a banned pesticide known as Penncap-M on research crops at one of its facilities on the Hawaiian island of Maui.

          In court documents filed today in United States District Court in Honolulu, Monsanto agreed to plead guilty to a misdemeanor offense of unlawfully spraying a banned pesticide – specifically methyl parathion, the active ingredient in Penncap-M –which the company used on corn seed and research crops at its Valley Farm facility in Kihei, Hawaii in 2014.

          Monsanto admitted in the court documents that it used Penncap-M, even though the company knew its use was prohibited after 2013 pursuant to a “cancellation order” issued by the Environmental Protection Agency. The company further admitted that, after the 2014 spraying, it told employees to re-enter the sprayed fields seven days later – even though Monsanto knew that workers should have been prohibited from entering the area for 31 days.

          The documents filed today also include a deferred prosecution agreement related to two felony counts of unlawfully storing an acute hazardous waste. Pursuant to the agreement, Monsanto will pay $10 million – a $6 million criminal fine and $4 million in community service payments to Hawaiian government entities. The government agreed to dismiss the felony charges in two years if Monsanto abides by the agreement, which includes paying a total of $10.2 million, successfully completing a two-year period of compliance with the agreement’s terms, and maintaining a comprehensive environmental compliance program at all of its facilities in Hawaii to ensure compliance with all federal environmental laws.

          “The illegal conduct in this case posed a threat to the environment, surrounding communities and Monsanto workers,” said United States Attorney Nick Hanna. “Federal laws and regulations impose a clear duty on every user of regulated and dangerous chemicals to ensure the products are safely stored, transported and used.”

          In a statement of facts filed in court today, Monsanto admitted that it knowingly used, transported and stored Penncap-M in violation of federal law. The pesticide “had to be managed as an acute hazardous waste in compliance with the Resource Conservation and Recovery Act (RCRA),” which prohibited the storage or transportation of the pesticide without a permit after 2013.

          From March 2013 through August 2014, even though the pesticide was on the company’s lists of chemicals that needed disposal, Monsanto stored 160 pounds of Penncap-M hazardous waste at its Molokai facility, which under RCRA made Monsanto a “Large Quantity Generator” of hazardous waste.

          In addition to spraying the banned pesticide at one of its three facilities on Maui, Monsanto also stored a total of 111 gallons of Penncap-M at Valley Farm and sites known as Maalaea and Piilani. Just like on Molokai, the storage of Penncap-M at the three Maui sites made Monsanto a “Large Quantity Generator” of acute hazardous waste at the three locations, according to court documents. Furthermore, when it transported Penncap-M to its Valley Farm site in 2014, the company violated federal law when it failed to use a proper shipping manifest to identify the hazardous material and when it failed to obtain a permit to accept hazardous waste at that site.

          “To protect human health and the environment, pesticides must be properly applied and stored,” said Special Agent-in-Charge Jay M. Green of EPA’s criminal enforcement program in Hawaii. “EPA will continue to work in close partnership with our state and local counterparts to bring cases against those who knowingly threaten the health and safety of Hawaiian communities.”

          In addition to $6 million criminal fine, Monsanto has agreed to make a total of $4 million in community service payments. The five Hawaiian agencies that each will receive $800,000 are: the Hawaii Department of Agriculture, to create and fund a Pesticide Disposal Program and for training and education purposes; the Hawaii Department of Land and Natural Resources, Maui Division of Aquatic Resources, for use in its marine programs; the Hawaii Department of Health, Hazardous Waste Branch, for use in its training and education programs; the Hawaii Department of Health, Environmental Management Division, for water quality monitoring, water quality improvements, and training and education purposes; and the Kahoolawe Island Reserve Commission, for use in the clean-up of the island of Kahoolawe.

          In relation to the criminal count Monsanto to which has agreed to plead guilty, the company has agreed to be on probation for two years and to pay the maximum possible fine of $200,000.

          This case is the result of an investigation by the U.S. Environmental Protection Agency, Criminal Investigation Division.

          This matter is being prosecuted by Mark A. Williams and Dennis Mitchell, who are special attorneys appointed by the Attorney General pursuant to 28 USC § 515. The United States Attorney’s Office for the District of Hawaii was recused from this investigation.

          LOS ANGELES – A Gardena man was found guilty by a jury today of federal criminal charges that he attempted to smuggle live corals that are protected by an international treaty known as the Convention on the International Trade of Endangered Species of Wild Fauna and Flora (CITES).

          Jose Torres, 44, was found guilty of one count of attempting to illegally export wildlife, and two counts of making and submitting a false record for wildlife intended to be exported.

          According to the evidence presented at his three-day trial, in January 2013, a Mexican company named Gabriela Herlinda Medina asked to purchase fish and coral from Torres, who identified himself as the owner of the company Orca International. Medina decided that it did not want to wait for the CITES permits and requested that the coral be shipped immediately. On January 31, 2013, Torres attempted to ship the coral without the CITES permit. Reef-building coral are protected under CITES because of their importance to ocean ecosystems and their vulnerability.

          In furtherance of his scheme, Torres visited the U.S. Fish and Wildlife Service district office in Torrance on January 31, 2013. During that visit, Torres made a false declaration that he was shipping 16 cartons of fish. In reality, Torres personally packed 40 boxes for shipment and he knew they contained protected coral.

          That night, Torres went to Los Angeles International Airport and provided to AeroMexico the false paperwork and 40 cartons to be transported to Mexico. Fish and Wildlife Service officials inspected the cartons and seized 474 undeclared items, including many CITES-protected coral.

          United States District Judge Otis D. Wright II has scheduled a February 10 sentencing hearing, at which time Torres will face a statutory maximum sentence of 20 years in federal prison.

          United States Fish and Wildlife Service investigated this case, which was charged as part of Operation Jungle Book, a law enforcement initiative that targeted wildlife smuggling.

          This matter is being prosecuted by Assistant United States Attorneys Erik M. Silber of the Environmental and Community Safety Crimes Section and David R. Friedman of the General Crimes Section.

          LOS ANGELES – A former executive at Hawthorne-based semiconductor company OSI Systems Inc. was indicted today on charges of using inside information to “short” his employer’s stock and, later, to illegally purchase shares of a company OSI confidentially had targeted for acquisition, in a scheme that allegedly netted a total of more than $567,000 in illicit gains.

          Mark A. Loman, 58, of Hermosa Beach, was named in a federal grand jury indictment that charges him with five counts of securities fraud and five counts of insider trading. Loman is scheduled to be arraigned on the indictment on December 10 in United States District Court in downtown Los Angeles.

          Loman was OSI’s vice president of finance and corporate controller from 2006 until 2017. In these roles, Loman had advance knowledge of OSI’s revenue and earnings and, as controller, was responsible for compiling and internally reporting the company’s confidential financial results.

          The indictment alleges that, in October 2015, Loman received confidential information that OSI and its subsidiaries were financially underperforming and would fall far short of their earnings and revenue forecast for its second quarter of fiscal year 2016. Acting on this information in November and December of 2015, Loman shorted 3,000 shares of OSI stock with the intent of profiting when OSI’s share price declined, according to the indictment. During this time, Loman also allegedly purchased a series of option contracts with the intention of profiting when OSI’s stock price fell.

          On January 27, 2016, OSI announced its disappointing second-quarter earnings, and also lowered its sales and earnings guidance for the remainder of its fiscal year. On the day of this announcement, OSI shares plunged 35 percent in value from their previous closing day price. As a result, Loman allegedly gained $446,436 in illegal profits from this scheme.

          The indictment further alleges that in February and March of 2016, Loman misused nonpublic information by purchasing stock of American Science & Engineering Inc., a Billerica, Massachusetts-based manufacturer of X-ray equipment that OSI had targeted for acquisition. Once OSI publicly announced in June 2016 its agreement to acquire ASEI, Loman immediately sold his ASEI shares and made approximately $120,900 in illegal gains, the indictment alleges. In September 2016, OSI formally acquired ASEI for $269 million.

          In total, Loman made $567,335 in illicit gains through this scheme, according to the indictment.

          In July 2019, the Securities and Exchange Commission filed a lawsuit against Loman, charging him with insider trading.

          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 charge of securities fraud carries a statutory maximum sentence of 25 years in federal prison. The statutory maximum sentence for each count of insider trading is 20 years in federal prison.

          The FBI investigated this matter.

          This case is being prosecuted by Assistant United States Attorneys Ashwin Janakiram and Alexander C.K. Wyman of the Major Frauds Section.

          LOS ANGELES – Two Gardena Police officers were found guilty by a jury today of federal criminal charges for scheming to purchase “off-roster” firearms not available to the general public and then illegally reselling the firearms for profit.

          Carlos Miguel Fernandez, 44, of Norwalk, and Edward Yasushiro Arao, 49, of Eastvale, were found guilty of conspiracy to engage in the business of dealing firearms without a license and of substantive counts of engaging in an unlicensed firearms business. Fernandez also was convicted of an additional conspiracy count, selling firearms to a convicted felon, and of making false statements about the sales on federal firearms licensing paperwork.  

          According to evidence presented at their six-day trial, Fernandez, whose Instagram handle was “the38superman,” advertised firearms for sale – guns being offered by both himself, Arao and others – on his Instagram account. The vast majority of posts on the account contained images of firearms. Arao, who was the CEO of Ronin Tactical Group, which was a federal firearms licensee (FFL), similarly advertised off-roster guns on the company’s Instagram account that he then re-sold in his individual capacity. Additionally, both defendants marketed firearms at gun shows. Neither defendant was licensed individually to engage in the business of dealing in firearms when the illegal gun sales alleged in the indictment took place.

          The evidence presented at trial demonstrated how the defendants exploited their position as police officers to ensure the success of their illegal gun selling business. Specifically, Fernandez purchased “off-roster” firearms – mostly Colt .38-caliber handguns that were not available to the general public, but which could be legally purchased by law enforcement officers – and sold dozens of these weapons through private-party transfers. Similarly, Arao obtained “off-roster” weapons by transferring them to himself individually from the inventory of Ronin Tactical Group. Through messages on Instagram and other means, Fernandez and Arao negotiated the prices and terms of firearm sales, and they accepted payment for the guns once they were delivered.

          For example, between May 2016 and December 2017, Fernandez negotiated and arranged the sale of 10 firearms to a convicted felon, Oscar Maravilla Camacho Jr., 36, of Salinas. With respect to every sale, Fernandez communicated directly with Camacho Jr. about the firearms purchases and understood that Camacho Jr., as a felon, could not legally buy the weapons. Nevertheless, Fernandez transferred the weapons to Camacho Jr. in violation of federal law.

          United States District Judge S. James Otero scheduled a March 2 sentencing hearing, at which time Fernandez will face a statutory maximum of 35 years in federal prison and Arao will face a statutory maximum sentence of 10 years in federal prison.

          Six other defendants in this case have pleaded guilty to federal criminal charges for distribution of cocaine, conspiracy to dispose of firearms to a felon, and making false statements that led to the straw purchase of several firearms.

          The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated this case. The Gardena Police Department provided its full cooperation during the investigation.

          This case is being prosecuted by Assistant United States Attorneys Katherine A. Rykken of the Major Frauds Section and Veronica Dragalin of the Public Corruption and Civil Rights Section.

          LOS ANGELES – A resident of the Central Valley town of Orosi was arrested this morning on federal charges related to skin care creams containing dangerous levels of mercury that she sold through advertisements on Facebook with promises that the illegal products could lighten skin color, remove age spots and treat acne.

          Maria Estela Esparza Magallanes, 30, who allegedly smuggled the creams into the United States from Mexico and marketed the products under the names Crema Esparza and Crema Jimena, was arrested pursuant to a three-count criminal complaint filed on November 13 in United States District Court in Los Angeles. Magallanes is expected to make her first court appearance this afternoon in federal court in Fresno.

          The complaint, which is the result of an investigation by special agents with the United States Food and Drug Administration, Office of Criminal Investigations (FDA-OCI), charges Magallanes with selling adulterated and misbranded skin care products and smuggling the unapproved creams into the United States.

          The affidavit in support of the complaint details how Magallanes sold the smuggled products to two specific victims and an undercover FDA-OCI agent with promises that the creams would treat various skin conditions and would lighten skin color. The Facebook page she used to market the products contained purported testimonials from customers and included before-and-after photos. According to the affidavit, Magallanes sold the creams to the two victims in hand-to-hand transactions in parking lots in Tulare County, and she used the United States Postal Service to ship products on several occasions to the undercover agent.

          During online communications with one of the victims and the undercover agent, Magallanes said she guaranteed her “natural” products – one of which she claimed contained standard cosmetics ingredients, including lanolin, rose water and bee pollen, and one of which purportedly was made of “stem cells,” the affidavit states. Magallanes allegedly told one victim that the products did not contain mercury and were sold pursuant to a license issued by California.

          However, the creams allegedly sold by Magallanes to one of the victims and the undercover agent contained dangerous levels of mercury. The second victim was tested, which revealed mercury in her system.

          In fact, according to the affidavit, a doctor with the U.S. Food and Drug Administration, who tested the products sent to the undercover agent, concluded: “The amounts of mercury in these products are very high. There is risk to the user, especially with chronic use, and there is risk to those around/in the user, especially infants and children and unborn babies. It is important to note that infants and children who are held by or rub up against a mother using these products can get it on their skin. The mercury will also evaporate from the product and be inhaled by the user and those around her.”

          “This defendant allegedly marketed her illegal products on Facebook, intentionally misleading customers with false claims that the products were legal and safe to use,” said United States Attorney Nick Hanna. “These dangerous creams, which were marketed to women in immigrant communities, jeopardized the safety of women and children across California and in several other states.”

          “Selling products with toxic levels of ingredients with unproven claims to treat medical conditions can put users’ health at serious risk,” said Lisa L. Malinowski, Special Agent in Charge, FDA Office of Criminal Investigations, Los Angeles Field Office. “The FDA will continue to investigate and bring to justice those who put profits above the public’s health and safety.”

          The FDA has issued cautionary statements about skin lightener and anti-aging treatments being contaminated with mercury. 

          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 she were to be convicted of all three counts in the complaint, Magallanes would face a statutory maximum penalty of 26 years in federal prison.

          The investigation in this case is being conducted by FDA-OCI.

          The California Department of Public Health (CDPH) has published a wide array of information about mercury-tainted face creams. In the wake of at least one serious injury resulting from mercury poisoning, the CDPH is actively involved in outreach effort to provide educational materials, health information, and community-based resources to support women who may have used mercury face creams and their children who may have been exposed via skin-to-skin contact.

          This matter is being prosecuted by Assistant United States Attorney Amanda M. Bettinelli of the Environmental and Community Safety Crimes Section.

          LOS ANGELES – A Los Angeles man and his long-time girlfriend were sentenced today to federal prison terms for collecting and storing extortionate “taxes” for the man’s brother, an imprisoned Mexican Mafia member, and for acting as the brother’s eyes and ears on the street, delivering coded messages to him, including one message that resulted in an individual being marked for death.

          Thomas Gonzales, 61, and Gloria Valerio, 66, both of the Elysian Valley neighborhood of Los Angeles, were sentenced today by United States District Judge Philip S. Gutierrez. Gonzales was sentenced to 66 months in federal prison. Valerio was sentenced to 60 months in federal prison. Both defendants were immediately remanded into custody.

          After a two-week trial, Gonzales and Valerio were found guilty by a jury on March 4 of conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act (RICO). Gonzales also was found guilty of making a false statement to a law enforcement officer.

          Gonzales and Valerio were named in a 2015 federal RICO indictment that charged 22 defendants and outlined how Gonzales’s brother, Mexican Mafia member and senior Frogtown gang member Arnold “Arnie” Gonzales, 59, had ordered the unification of the traditional rival Los Angeles street gangs of Frogtown, Toonerville, and Rascals.

          The inter-gang alliance began in 2010 and resulted in the three gangs controlling the narcotics trade and other illegal activities in an area along the Los Angeles River that ran from Elysian Park nearly to Burbank. Through violence and threats of violence, senior members collected money, or “taxes,” from legitimate and illegal businesses in the area for Arnie Gonzales’s benefit.

          Gonzales and Valerio acted as “secretaries,” or people who act as the bridge between imprisoned members of the Mexican Mafia prison gang and the gang members on the street. “Secretaries” often are not gang members themselves and have normal jobs and minimal criminal histories, which is why the Mexican Mafia targets them to be used as intermediaries, as they are able to make prison visits to Mexican Mafia members without arousing suspicion. In this case, Valerio worked as an insurance analyst and Thomas Gonzales was an HVAC technician.

          Valerio and Thomas Gonzales visited Arnie Gonzales, who was serving a life sentence at Pelican Bay State Prison for a murder conviction. As Arnie Gonzales’s eyes and ears on the streets, Thomas Gonzales and Valerio stored the extortionate “tax” money gang leaders had collected from street gangs in Arnie Gonzales’s name within the territories controlled by him. Valerio deposited some of that money into Arnie Gonzales’s prison account. A search warrant executed at the defendants’ residence in June 2015 resulted in the seizure of more than $22,000 in cash.

          Gonzales and Valerio used coded language to inform Arnie Gonzales about an individual who was falsely claiming to have the authority to collect “taxes” on Arnie Gonzales’s behalf. That individual later was marked for death.

          A total of 21 people have been convicted in this case.

          This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; the California Department of Corrections and Rehabilitation - Special Service Unit; the Glendale Police Department; and the Los Angeles Police 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 Attorneys Carol Alexis Chen, chief of the International Narcotics, Money Laundering, and Racketeering Section, and Alexander B. Schwab of the Major Frauds Section.

          LOS ANGELES – A member of the Pueblo Bishop Bloods street gang was sentenced today to life -- plus an additional 10 years -- in federal prison for racketeering offenses that included the murder of a man in front of the victim’s 2-year-old son.

          Rondale Young, a.k.a. “Pueblo Grump,” 37, of South Los Angeles, was sentenced today by United States District Judge S. James Otero.

          In May, after a 10-day trial, a federal jury found Young guilty of conspiring to violate the Racketeer Influenced and Corrupt Organizations Act (RICO) in relation to the August 2, 2009 murder of Francisco Cornelio. Mr. Cornelio was a 23-year-old man with no gang affiliation and was shot to death at point-blank range while vacuuming his car in front of his toddler son.

          The jury also found Young guilty of conspiracy to commit a violent crime in aid of racketeering (VICAR); VICAR murder; and possessing, using and discharging a firearm resulting in death in relation to a crime of violence.

          On the day of Mr. Cornelio’s murder, Young, accompanied by other armed gang members, drove his mother’s black Chrysler 300 car into rival gang territory, seeking retaliation for a fatal drive-by shooting of a Pueblo Bishop Bloods gang member. Mr. Cornelio was targeted simply because he was Latino and was in rival gang territory.

          “The seriousness of (Young’s) offense is among the most egregious in the federal code, among the few punishable by death,” prosecutors wrote in the government’s sentencing memorandum. “The ultimate consequences of the murder...included to: rob a young wife of her husband; rob a young son of his father and of his childhood; and to further inflame racial and gang tensions in combustible South Los Angeles, thereby putting the entire community at risk.”

          Local authorities originally charged Young in 2009 with killing Mr. Cornelio, but he was acquitted by a state jury.

          An August 2010 indictment charged Young and 44 other members and associates of the gang with being members of a criminal enterprise that engaged in drug dealing, firearms trafficking, murder, witness intimidation and armed robbery as part of the gang’s efforts to control and terrorize the Pueblo del Rio Housing Projects in South Los Angeles.

          In 2013, Young was convicted of racketeering charges in connection to the indictment and Mr. Cornelio’s murder and was sentenced to life in federal prison. That conviction was vacated in 2017 by the U.S. Court of Appeals for the Ninth Circuit, which cited evidentiary errors during the first trial. The case was sent back to the district court for a retrial. Young has been in federal custody since the 2010 indictment.

          With Young’s conviction, all 45 defendants charged in this matter have been convicted of federal RICO and related charges, and have been held responsible for multiple murders.

          This matter was investigated by the FBI; the Los Angeles Police Department; the United States Department of Housing and Urban Development, Office of Inspector General; the California Department of Corrections and Rehabilitation; and the Los Angeles County District Attorney’s Office.

          This case was prosecuted by Assistant United States Attorney Mack E. Jenkins, Chief of the Public Corruption and Civil Rights Section; Assistant United States Attorney Frances S. Lewis of the Public Corruption and Civil Rights Section; and Assistant United States Attorney Julia S. Choe of the Cyber and Intellectual Property Crimes Section.

          LOS ANGELES – A former nanny was sentenced today to 360 months in federal prison for producing child pornography with at least five children – most of whom were eight and nine years old – who had been placed under his care.

          Travis Elconin, 35, of Burbank, was sentenced today by United States District Judge Terry J. Hatter Jr., who also placed Elconin on supervised release for the rest of his life after he completes serving his prison sentence. Elconin pleaded guilty on March 18 to a two-count criminal information charging him with production of child pornography.

          Elconin used his position as a nanny to exploit and abuse the children in his care, holding himself out as the “perfect caretaker,” which induced numerous families – including his friends – to hire him, according to court documents. Elconin placed advertisements on websites, one of which stated, “I know how important it is as a parent to know that your children are safe when you’re not around. That would by my top priority.”

          Between August 2016 and November 2018, Elconin ingratiated himself with several families, only to sexually abuse their minor children and make sexually explicit videos of his crimes with his iPhone 8. In his plea agreement, Elconin admitted to producing child pornography with four children placed under his care. Since his arrest on January 9, the government has identified eight victims directly connected to him.

          In November 2018, German law enforcement contacted the FBI about Elconin, who had exchanged more than 10,000 messages via encrypted chatting programs and the dark web over the previous two years with suspected child sex abusers in Germany. Those messages discussed child sex abuse and the exchange of such images. The FBI also obtained warrants and searched his digital devices.

          This matter was investigated by the FBI. Germany’s Bundeskriminalamt (BKA) Police and the Santa Barbara County Sheriff’s Office provided assistance in this matter.

          This case was prosecuted by Assistant United States Attorney Devon A. Myers of the Cyber and Intellectual Property Crimes Section.

          LOS ANGELES – A West Hollywood man has been sentenced to 110 months in federal prison for defrauding investors, lenders, friends and family members out of approximately $6.7 million, including via a series of scams he ran while out on bond after pleading guilty in a prior federal case.

          Jeffrey Craig Yohai, 37, was sentenced late Friday by United States District Judge André Birotte Jr., who, when describing Yohai, said, “This is an individual who has an evil mind.” Judge Birotte also ordered Yohai to pay $6.7 million in restitution to his victims.

          Yohai pleaded guilty to two counts of conspiracy to commit wire fraud, stemming from two separate cases.

          The first case, which resulted in a guilty plea in February 2018, involved more than $6 million in real estate loans and investments that supposedly would be used to purchase and rehabilitate properties in the Hollywood Hills and New York City. Yohai defaulted on the loans and the properties went into foreclosure – which Yohai tried to delay with bankruptcy filings.

          While free on bond and awaiting sentencing in the first federal case, Yohai committed additional crimes. The second case, which resulted in a guilty plea in June 2019, involved a loan fraud scheme related to two of the properties at issue in the original federal case. Here, Yohai submitted a loan request that contained inflated appraisals. He also attempted to defraud another lender as he attempted to refinance the two properties, and Yohai contacted yet another lender with dramatically inflated appraisals to obtain refinancing – an effort that was rebuffed when that third lender learned of Yohai’s guilty plea earlier this year.

          Also in the second case, Yohai defrauded the owner of a rental property and attempted to lull the owner by showing him a $60,000 check he falsely claimed had been remitted from his ex-wife’s account. There are additional fraudulent acts outlined in the complaint which, including a scam in which he sold non-existent artist passes to the music festival in Coachella.

          “(Yohai)…chose…to prey on those who trusted him, including friends and even family, taking their savings so he could splash out on luxury housing, automobiles, and high-living,” the prosecution wrote in the government’s sentencing memorandum. “He did not restrict his marks to big businesses. He was just as likely to use his intelligence and charm to con families out of their life savings, or to steal from individuals whatever they would trust him with. Predictably, this resulted in emotional scars, financial devastation, changes in personality, and strains in partnerships and marriages.”

          Yohai has been in federal custody since November 2018 one week after the Los Angeles Police Department arrested him on cases filed by local prosecutors.

          These matters were investigated by the FBI and the Los Angeles Police Department’s Major Crimes Division Transnational Organized Crime Section.

          The two cases against Yohai were prosecuted by Assistant United States Attorney Andrew G. Brown of the Major Frauds Section.

          RIVERSIDE, California – A San Bernardino County woman has been arrested on a federal criminal complaint alleging she produced child pornography of her boyfriend’s daughter, who is under the age of 12 years old.

          Stefani Kasey Marie Stevens, 28, of Yucaipa, was arrested at her home on Friday afternoon. During her initial court appearance this afternoon in United States District Court in Riverside, she was ordered detained.

          Stevens has been charged with one count of production of child pornography. Her arraignment is scheduled for December 17.

          According to an affidavit filed with the complaint, on November 8, law enforcement officers executed two search warrants at Stevens’s home. Stevens agreed to be interviewed by law enforcement and she admitted to using her iPhone to take sexually explicit photographs of a minor girl, the affidavit states. Stevens allegedly told law enforcement that she had taken between eight and 10 sexually explicit images of the victim and later sent them to someone on the online messaging service Kik.

          Kik previously identified a user account as having uploaded child exploitation material to its platform, the affidavit states. That user account was identified as belonging to Stevens, the affidavit states.

          During the search, law enforcement seized Stevens’s iPhone, two tablets, a desktop computer, and bedding that matched bedding depicted in the sexually explicit photographs, 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 of this charge, Stevens would face a mandatory minimum sentence of 15 years in federal prison and a statutory maximum sentence of 30 years in federal prison.

          This matter was investigated by Homeland Security Investigations and the San Bernardino County Sheriff’s Department.

          This case is being prosecuted by Assistant United States Attorney Robert S. Trisotto of the Riverside Branch Office.

          LOS ANGELES – Three Saudi nationals have been charged in two separate indictments for allegedly violating federal export laws by purchasing more than $100,000 in weapons parts in the United States while on student visas and then smuggling the parts to the Kingdom of Saudi Arabia.

          A five-count indictment returned Wednesday by a federal grand jury in Riverside charges Hatim Humeed Alsufyani, 36, and Mosab Alzahrani, 27, both formerly of San Bernardino, with one count of conspiracy to smuggle goods out of the United States without obtaining export licenses. Alsufyani also was charged with three counts of knowingly exporting weapons parts without a license, while Alzahrani also was charged with one count of knowingly exporting weapons parts without a license.

          Between May 2014 and July 2018, Alsufyani and Alzahrani allegedly conspired to smuggle firearms parts from the U.S. to Saudi Arabia by concealing rifle barrels, rifle triggers, and other items related to firearms in their checked luggage on flights from Los Angeles to Saudi Arabia. They allegedly also would falsely identify rifle barrels, rifle triggers, and other items related to firearms as “shower curtain rods” or “car parts,” or other false names before exporting the items to Saudi Arabia.

          For example, on December 10, 2016, Alzahrani attempted to board a flight from Los Angeles to Riyadh with 30 firearms parts concealed in his checked luggage, including 12 rear sight leaf assemblies and six New England Custom Gun single set rifle triggers, the indictment alleges. Alzahrani also lied to U.S. customs officials about possessing rifle barrels in the United States that were intended to be exported to Saudi Arabia, according to the indictment.

          If convicted of all charges, Alsufyani would face a statutory maximum sentence of 65 years in federal prison, and Alzahrani would face 25 years in federal prison.

          In a separate indictment returned on November 1 and unsealed today, Abdulwahab Mohammed A. Alabdulwahab, 30, formerly of Los Angeles, was charged with 15 counts of smuggling and 15 counts of knowingly exporting firearms parts from the United States without first having obtained an export license from the State Department.

          Between December 2015 and January 2018, Alabdulwahab contacted U.S.-based firearms parts retailers to purchase firearms parts for the purpose of illegally exporting those components to Saudi Arabia, the indictment alleges. Specifically, Alabdulwahab purchased .223-caliber and .308-caliber rifle barrels, which by federal law require a license to be exported from the United States to any other country, according to the indictment. At no time did Alabdulwahab apply for, receive, or possess such a license, the indictment alleges.

          If convicted of all charges, Alabdulwahab would face a statutory maximum sentence of 10 years in federal prison for each smuggling count, and 20 years’ imprisonment for each violation of the Arms Export Control Act.

          All three defendants are believed to be in Saudi Arabia.

          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 FBI-led Joint Terrorism Task Force and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations investigated both cases, with support from U.S. Customs and Border Protection.

          The Alsufyani case is being prosecuted by Assistant United States Attorney Reema El-Amamy of the Terrorism and Export Crimes Section. The Alabdulwahab case is being prosecuted by Assistant United States Attorney Christopher Grigg, Chief of the Terrorism and Export Crimes Section. Supporting both cases is Trial Attorney Matthew Chang of the Justice Department’s National Security Division, Counterintelligence and Export Control Section.

          LOS ANGELES – The Justice Department has announced the formation of the Procurement Collusion Strike Force (PCSF) that will focus on deterring, detecting, investigating and prosecuting antitrust crimes – such as bid-rigging conspiracies and related fraudulent schemes – which undermine competition in government procurement, grant and program funding. The United States Attorney’s Office for the Central District of California will be among participants on the PCSF.

          In making the announcement on Tuesday, Justice Department officials said the PCSF will be an interagency partnership consisting of prosecutors from the Antitrust Division, prosecutors from 13 U.S. Attorneys’ Offices, and investigators from the FBI, the Department of Defense Office of Inspector General, the U.S. Postal Service Office of Inspector General and other partner federal Offices of Inspector General.

          “I am proud that my office will participate in the new Strike Force and will play a role in ensuring that taxpayer money being paid to contractors will be protected from bid-rigging and other anti-competitive schemes,” said United States Attorney Nick Hanna.

          The PCSF will lead a national effort to protect taxpayer-funded projects at the federal, state and local level from antitrust violations and related crimes, starting with a focus on 13 districts throughout the country. Prosecutors from the Antitrust Division and the participating U.S. Attorneys’ Offices, along with agents from the FBI and partner Offices of Inspector General, will work together to conduct outreach and training for procurement officials and government contractors on antitrust risks in the procurement process. In addition, prosecutors and investigators will jointly investigate and prosecute cases that result from their targeted outreach efforts.

          “To protect taxpayer dollars, the Justice Department is doing its part to eliminate anticompetitive collusion, waste and abuse from government procurement,” said Deputy Attorney General Jeffrey A. Rosen. “To ensure taxpayers the full benefits of competitive bidding, experienced investigators and prosecutors with the necessary expertise will partner in this Strike Force to deter, detect and prosecute antitrust crimes and related schemes in government procurements.”

          “The investigation and prosecution of individuals and organizations that cheat, collude and seek to undermine the integrity of government procurement are priorities for this administration,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. “The PCSF will train and educate procurement officials nationwide to recognize and report suspicious conduct in procurement, grant and program funding processes. We will aggressively investigate and prosecute those who violate our antitrust laws to cheat the American taxpayer.”

          The Antitrust Division and its law enforcement partners have a history of prosecuting criminal antitrust conspiracies that take advantage of government contracts. In late 2018 and early 2019, for instance, five South Korean oil companies agreed to plead guilty for their involvement in a decade-long bid-rigging conspiracy that targeted contracts to supply fuel to U.S. military bases in South Korea. The Antitrust Division also indicted seven individuals for conspiring to rig bids and to defraud the government, and one executive was also charged with obstruction of justice. In total, the companies have agreed to pay $156 million in criminal fines and over $205 million in separate civil settlements. This year, the Justice Department, in partnership with the GSA Office of Inspector General, also indicted individuals for involvement in rigging bids submitted to the GSA.

          The PCSF’s investigative partners include the Department of Defense, Office of Inspector General; the Federal Bureau of Investigation; the General Services Administration, Office of Inspector General; the Department of Justice, Office of the Inspector General; and the U.S. Postal Service, Office of Inspector General.

          The PCSF has launched a publicly available website at https://www.justice.gov/procurement-collusion-strike-force, where government procurement officials and members of the public can review information about the federal antitrust laws and training programs, and report suspected criminal activity affecting public procurement.

          Individuals and companies are encouraged to contact the PCSF if they have information concerning anticompetitive conduct involving federal taxpayer dollars by emailing [email protected].

          LOS ANGELES – A federal grand jury has indicted two men in a scheme to obtain lawful permanent resident status for South Korean nationals by submitting fraudulent visa applications that falsely claimed American businesses wanted to hire skilled foreign workers.

          The indictment, returned on Nov. 1, alleges that the defendants exploited the EB-2(a) visa program by submitting bogus Alien Worker Petitions on behalf of companies – some legitimate, some created specifically for the scheme – that purportedly wanted to hire foreign nationals after exhausting attempts to find suitable workers in the United States. According to court documents, those South Korean visa applicants simply wanted to immigrate to the United States, and they paid between $30,000 and $70,000 to the defendants in the hopes of obtaining a visa.

          The indictment charges the two defendants with conspiracy to commit visa fraud. The defendants are:

• Weon Keuk Lee, 49, a South Korean national, a licensed California attorney who previously operated an immigration law firm in Los Angeles; and
• Young Shin Kim, 59, a naturalized United States citizen, who previously operated an accounting firm in Diamond Bar and is now a farmer in Hesperia.

          Kim was arrested in this case on October 3 pursuant to a criminal complaint. During a court hearing the next day, Kim was ordered released on a $50,000 bond and was ordered to appear for an arraignment on November 8. Lee, 50, is believed to be currently residing in Vietnam.

          According to the indictment, between 2007 and 2015, Lee and Kim filed approximately 117 fraudulent Alien Worker Petitions with U.S. Citizenship and Immigration Services, which resulted in the agency issuing more than 125 visas for alien workers, their spouses and their children.

          The indictment alleges that Lee accepted payment from South Korean nationals who wanted to obtain EB-2(a) visas that would allow them to live and work in the United States. Kim allegedly identified United States businesses to act as the purported petitioner for the beneficiary, either by misappropriating information from his accounting firm’s clients or by forming shell corporations solely for the purpose of petitioning authorities for visas. The indictment also alleges that Kim fabricated documents – including bogus tax returns – for the domestic companies and that Lee used those documents to submit the fraudulent Alien Worker Petitions. Lee allegedly paid Kim nearly $300,000 for preparing the fraudulent documents used with the visa applications.

          An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

          The charge of conspiracy to commit visa fraud carries a statutory maximum sentence of five years in federal prison.

          This matter is being investigated by the Document Benefit Fraud Task Force, which includes representatives of the U.S. Department of State’s Diplomatic Security Service; U.S. Citizenship and Immigration Services, Fraud Detection National Security Unit; and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.

          This case is being prosecuted by Assistant United States Attorney Scott D. Tenley of the Santa Ana Branch Office.

          LOS ANGELES – Law enforcement this morning arrested a Los Angeles man on child sexual exploitation charges alleging that he met at least eight teenage girls on the internet and pressured them – sometimes by threatening suicide – into sending him sexually explicit images of themselves.

          Francisco Sanchez, 30, of Koreatown, is scheduled to be arraigned this afternoon on an 11-count federal grand jury indictment in United States District Court in downtown Los Angeles.

          Sanchez is charged in the indictment with seven counts of production of child pornography, one count of distribution of child pornography, one count of possession of child pornography, and two counts of cyberstalking.

          According to the indictment, between January 2014 and September 2016, Sanchez, posing as a teenage boy, contacted teenage girls online, using the pseudonym “Eddie Nash” to conceal his identity. He allegedly coerced some of them into producing sexually explicit photos and videos of themselves, sometimes by threatening suicide or threatening to post compromising pictures of the girls online.

          In June 2016, Sanchez, while concealing his identity, allegedly sent a victim a text message and threatened to make her “internet famous” if she continued to ignore him. When the victim replied, “If you do that u will get arrested for child pornography,” Sanchez texted back, “so, but u will be famous” and “so be nice to me, i love u so much, i dont want to hurt u,” 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.

          The charge of production of child pornography carries a 15-year mandatory minimum federal prison sentence. The charge of distributing child pornography carries a mandatory minimum sentence of five years in federal prison. If convicted of all charges, Sanchez would face a statutory maximum sentence in excess of 200 years in federal prison.

          This matter was investigated by the FBI and the Los Angeles Child Exploitation and Human Trafficking Task Force.

          This case is being prosecuted by Assistant United States Attorneys Damaris Diaz of the Violent and Organized Crime Section, and Julia S. Choe of the Cyber and Intellectual Property Crimes Section.

          LOS ANGELES – A close associate of a Whittier street gang has been sentenced to 180 months in federal prison for committing a series of drug-related and violent acts, including the attempted murder of a Whittier Police officer during a narcotics transaction.

          Frankie Vasquez, 40, of Carson, was sentenced on Monday by United States District Judge Virginia A. Phillips.

          Vasquez pleaded guilty on June 24 to conspiring to violate the federal Racketeer Influenced and Corrupt Organizations Act (RICO), committing a violent crime in aid of racketeering (VICAR), conspiring to distribute methamphetamine, and carrying a firearm in furtherance of a crime of violence and drug trafficking.

          The charges against Vasquez are contained in an indictment that charges him and 50 other members and associates of the Canta Ranas organization, a wide-ranging criminal enterprise which operates primarily in Santa Fe Springs and Whittier under the control of a member of the Mexican Mafia. Vasquez is a member of the Carson-based Varrio Keystone street gang, but he admitted to being a key supplier of narcotics to the Canta Ranas organization.

          The racketeering indictment, which was unsealed in June 2016 and superseded in October 2017 to add additional charges, alleges that an incarcerated member of the Mexican Mafia prison gang exerted control over the Canta Ranas street gang and other gangs, and that he received compensation in the form of “rent” or “taxes” generated by drug trafficking and other offenses committed in gang territory. When law enforcement authorities arrested Vasquez in this case in May 2018, they found in his possession a copy of the indictment, with certain sections highlighted.

          In a plea agreement filed in federal court, Vasquez admitted being associated with the Canta Ranas Organization, which attempted to control its claimed territory by conspiring and actually committing “acts of violence, including assaults, murders, extortion, and acts of intimidation; engaging in narcotics trafficking, extortion, and robberies; and ‘taxing’ narcotics sales and other profitable illegal activity occurring within the territory.”

          In addition to participating in the organization’s drug-trafficking business, Vasquez admitted he attempted to murder the undercover police officer, who Vasquez thought was trying to rob him during a drug deal. In fact, the undercover detective was conducting surveillance as part of a narcotics investigation.

          Most of the defendants named in the federal RICO indictment have been convicted, either by guilty plea or trial. The lead defendant in the case, Jose Loza, was found guilty in August on a host of charges, including murder. Loza is facing a life prison term when he is sentenced on February 24.

          The investigation into the Canta Ranas organization was called Operation “Frog Legs” and resulted in the seizure of narcotics and 51 firearms Operation Frog Legs was conducted 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. Participants on the Task Force include personnel from U.S. Immigration and Customs Enforcement’s 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 RICO case resulting from Operation Frog Legs is being prosecuted by Assistant United States Attorneys Carol Alexis Chen, Chief of the International Narcotics, Money Laundering, & Racketeering Section (INMLR); Kathy Yu of the INMLR Section; and Victoria A. Degtyareva of the Cyber and Intellectual Property Crimes Section.

The Department of Justice has reached a settlement of its civil forfeiture cases against assets acquired by Low Taek Jho, aka Jho Low, and his family using funds allegedly misappropriated from 1Malaysia Development Berhad (1MDB), Malaysia’s investment development fund, and laundered through financial institutions in several jurisdictions, including the United States, Switzerland, Singapore and Luxembourg. 

These assets, located in the United States, the United Kingdom and Switzerland, are estimated to be worth more than $700 million.  With the conclusion of this settlement, together with the prior disposition of other related forfeiture cases, the United States will have recovered or assisted in the recovery of more than $1 billion in assets associated with the 1MDB international money laundering and bribery scheme.  This represents the largest recovery to date under the Department’s Kleptocracy Asset Recovery Initiative and the largest civil forfeiture ever concluded by the Justice Department. 

“As alleged in the complaints, Jho Low and others, including officials in Malaysia and the United Arab Emirates, engaged in a brazen multi-year conspiracy to launder money embezzled or otherwise misappropriated from 1MDB, and he used those funds, among other things, to engage in extravagant spending sprees, acquiring one-of-kind artwork and luxury real estate, gambling freely at casinos, and propping up his lavish lifestyle,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.  “This settlement agreement forces Low and his family to relinquish hundreds of millions of dollars in ill-gotten gains that were intended to be used for the benefit of the Malaysian people, and it sends a signal that the United States will not be a safe haven for the proceeds of corruption.”

“A staggering amount of money embezzled from 1MDB at the expense of the people of Malaysia was laundered through the purchase of big-ticket assets in the U.S. and other nations. Thanks to this settlement, one of the men allegedly at the center of this massive scheme will lose all access to hundreds of millions of dollars,” said U.S. Attorney Nicola T. Hanna of the Central District of California. “The message in this case is simple: the United States is not a safe haven for pilfered funds. Our strict anti-money laundering controls are effective, and we will seize assets used by criminals to conceal ill-gotten gains.”

“Today's settlement with Jho Low demonstrates the continued commitment of the FBI to root out the fraud and selfishness of the corrupt individuals who conspired to pay bribes and launder funds which belong to the Malaysian people,” said FBI Assistant Director Terry Wade of the Criminal Investigative Division. “The FBI's dedicated International Corruption Squads will continue to combat foreign corruption which reaches our shores. We will not allow criminals, foreign or domestic, to use the United States in furtherance of their criminal activities.”

“The action announced today will allow the United States government to deny Mr. Low the use of the assets purchased with this extraordinarily large sum of money he allegedly misappropriated from 1MDB and the people of Malaysia,” said Chief Don Fort of IRS Criminal Investigations (IRS-CI). “Mr. Low allegedly attempted to launder these funds through multiple international jurisdictions and a web of shell corporations, but his greed finally caught up with him.  This case is a model for international cooperation in significant cross-border money laundering investigations”

According to the civil forfeiture complaints, from 2009 through 2015, more than $4.5 billion in funds belonging to 1MDB were allegedly misappropriated by high-level officials of 1MDB and their associates, including Low, through a criminal conspiracy involving international money laundering and bribery.  1MDB was created by the government of Malaysia to promote economic development in Malaysia through global partnerships and foreign direct investment, and its funds were intended to be used for improving the well-being of the Malaysian people. 

Under the terms of the settlement, Low, his family members, and FFP, a Cayman Islands entity serving as the trustees overseeing the assets at issue in these forfeiture actions, agreed to forfeit all assets subject to pending forfeiture complaints in which they have a potential interest.  The trustees are also required to cooperate and assist the Justice Department in the orderly transfer, management and disposition of the relevant assets.  From the assets formerly managed by FFP, the United States will release $15 million to Low’s counsel to pay for legal fees and costs. Under the agreement, none of those fees may be returned to Low or his family members.  The assets subject to the settlement agreement include high-end real estate in Beverly Hills, New York and London; a luxury boutique hotel in Beverly Hills; and tens of millions of dollars in business investments that Low allegedly made with funds traceable to misappropriated 1MDB monies.   

Low separately faces charges in the Eastern District of New York for conspiring to launder billions of dollars embezzled from 1MDB and for conspiring to violate the Foreign Corrupt Practices Act (FCPA) by paying bribes to various Malaysian and Emirati officials, and in the District of Columbia for conspiring to make and conceal foreign and conduit campaign contributions during the United States presidential election in 2012.  The charges in the indictments are merely allegations, and defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.  This agreement does not release any entity or individual from filed or potential criminal charges.

The assets being forfeited subject to this settlement are in addition to the nearly $140 million in assets the U.S. previously forfeited in connection with Low’s investment in a business entity related to the Park Lane Hotel in New York, as well as a super-yacht, valued at over $120 million, seized by law enforcement authorities in Indonesia at the request of the Justice Department and recovered by Malaysian authorities directly from Indonesia.  Following conclusion of today’s settlement, several civil forfeiture complaints arising out of the 1MDB criminal conspiracy remain pending against assets associated with other alleged co-conspirators.

The FBI’s International Corruption Squads in New York City and Los Angeles and the IRS-CI are investigating the case.  Deputy Chief Woo S. Lee and Trial Attorneys Kyle R. Freeny, Joshua L. Sohn, Barbara Levy and Jonathan Baum of the Criminal Division’s Money Laundering and Asset Recovery Section and Assistant U.S. Attorneys John Kucera, Michael R. Sew Hoy and Steven R. Welk of the Central District of California are prosecuting the case.  The Criminal Division’s Office of International Affairs is providing substantial assistance.

The Department also appreciates the significant assistance provided by the Attorney General’s Chambers of Malaysia, the Royal Malaysian Police, the Malaysian Anti-Corruption Commission, the Attorney General’s Chambers of Singapore, the Singapore Police Force-Commercial Affairs Division, the Office of the Attorney General and the Federal Office of Justice of Switzerland, the judicial investigating authority of the Grand Duchy of Luxembourg and the Criminal Investigation Department of the Grand-Ducal Police of Luxembourg.

The Kleptocracy Asset Recovery Initiative is led by a team of dedicated prosecutors in the Criminal Division’s Money Laundering and Asset Recovery Section, in partnership with federal law enforcement agencies, and often with U.S. Attorney’s Offices, to forfeit the proceeds of foreign official corruption and, where appropriate, to use those recovered assets to benefit the people harmed by these acts of corruption and abuse of office.  In 2015, the FBI formed International Corruption Squads across the country to address national and international implications of foreign corruption.  Individuals with information about possible proceeds of foreign corruption located in or laundered through the U.S. should contact federal law enforcement or send an email to [email protected] (link sends e-mail) or https://tips.fbi.gov/.

A civil forfeiture complaint is merely an allegation that money or property was involved in or represents the proceeds of a crime.  These allegations are not proven until a court awards judgment in favor of the United States.

          LOS ANGELES – The Department of Justice has reached a settlement in a series of civil forfeiture cases against assets acquired by Low Taek Jho – a financier best known as Jho Low – and his family using funds allegedly misappropriated from 1Malaysia Development Berhad (1MDB) and laundered through financial institutions in several jurisdictions, including the United States, Switzerland, Singapore and Luxembourg.

          The assets involved in settlements filed in 13 asset forfeiture cases are located in the United States, the United Kingdom and Switzerland, and are estimated to be worth more than $700 million. The assets subject to the settlement agreement include high-end real estate in Beverly Hills, New York and London; a luxury boutique hotel in Beverly Hills; and tens of millions of dollars in business investments that Low allegedly made with funds traceable to misappropriated 1MDB monies.

          With the settlements being filed today in United States District Court in Los Angeles, coupled with the prior disposition of other 1MDB-related forfeiture cases, the United States will have recovered or assisted in the recovery of more than $1 billion in assets associated with the international money laundering conspiracy related to Malaysia’s investment development fund. This represents the largest civil forfeiture ever concluded by the Justice Department.

          “A staggering amount of money embezzled from 1MDB at the expense of the people of Malaysia was laundered through the purchase of big-ticket assets in the U.S. and other nations. Thanks to this settlement, one of the men allegedly at the center of this massive scheme will lose all access to hundreds of millions of dollars,” said United States Attorney Nick Hanna. “The message in this case is simple: the United States is not a safe haven for pilfered funds. Our strict anti-money laundering controls are effective, and we will seize assets used by criminals to conceal ill-gotten gains.”

          According to the civil forfeiture complaints, from 2009 through 2015, more than $4.5 billion in funds belonging to 1MDB were misappropriated by high-level officials of 1MDB and their associates, including Low. 1MDB was created by the government of Malaysia to promote economic development in Malaysia through global partnerships and foreign direct investment, and its funds were intended to be used for improving the well-being of the Malaysian people.

          Under the terms of the settlement, Low, his family members, and FFP, a Cayman Islands entity serving as the trustees overseeing the assets at issue in these cases, agreed to forfeit all assets subject to pending forfeiture complaints in which they have a potential interest. The trustees are also required to cooperate and assist the Justice Department in the orderly transfer, management and disposition of the relevant assets. From the assets formerly managed by FFP, the United States will release $15 million to Low’s counsel to pay for legal fees and costs. Under the agreement, none of those fees may be returned to Low or his family members.

          “As alleged in the complaints, Jho Low and others, including officials in Malaysia and the United Arab Emirates, engaged in a brazen multi-year conspiracy to launder money embezzled or otherwise misappropriated from 1MDB, and he used those funds, among other things, to engage in extravagant spending sprees, acquiring one-of-kind artwork and luxury real estate, gambling freely at casinos, and propping up his lavish lifestyle,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “This settlement agreement forces Low and his family to relinquish hundreds of millions of dollars in ill-gotten gains that were intended to be used for the benefit of the Malaysian people, and it sends a signal that the United States will not be a safe haven for the proceeds of corruption.”

          “Today's settlement with Jho Low demonstrates the continued commitment of the FBI to root out the fraud and selfishness of the corrupt individuals who conspired to pay bribes and launder funds which belong to the Malaysian people,” said FBI Assistant Director Terry Wade of the Criminal Investigative Division. “The FBI’s dedicated International Corruption Squads will continue to combat foreign corruption which reaches our shores. We will not allow criminals, foreign or domestic, to use the United States in furtherance of their criminal activities.”

          “The action announced today will allow the United States government to deny Mr. Low the use of the assets purchased with this extraordinarily large sum of money allegedly embezzled from 1MDB and the people of Malaysia,” said Chief Don Fort of IRS Criminal Investigations. “Mr. Low allegedly attempted to launder these funds through multiple international jurisdictions and a web of shell corporations, but his greed finally caught up with him. This case is a model for international cooperation in significant cross-border money laundering investigations”

          The assets being forfeited subject to this settlement are in addition to the nearly $140 million in assets the U.S. previously forfeited in connection with Low’s investment in a business entity related to the Park Lane Hotel in New York, as well as a super-yacht, valued at over $120 million, seized by law enforcement authorities in Indonesia at the request of the Justice Department and recovered by Malaysian authorities directly from Indonesia. Several civil forfeiture complaints arising out of the 1MDB money laundering conspiracy remain pending against assets associated with other alleged co-conspirators.

          Low separately faces criminal charges in the Eastern District of New York and the District of Columbia. This agreement that resolves the asset forfeiture actions does not release any entity or individual from filed or potential criminal charges.

          The FBI’s International Corruption Squads in New York City and Los Angeles, as well as IRS Criminal Investigation, are investigating the case.

          The settlements being filed today were negotiated by Assistant United States Attorneys John Kucera, Michael R. Sew Hoy and Steven R. Welk of the Asset Forfeiture Section, and Justice Department trial attorneys Woo S. Lee, Kyle R. Freeny, Joshua L. Sohn, Barbara Levy and Jonathan Baum of Money Laundering and Asset Recovery Section. The Office of International Affairs is providing assistance.

          The Justice Department appreciates the significant assistance provided by the Attorney General’s Chambers of Malaysia, the Royal Malaysian Police, the Malaysian Anti-Corruption Commission, the Attorney General’s Chambers of Singapore, the Singapore Police Force-Commercial Affairs Division, the Office of the Attorney General and the Federal Office of Justice of Switzerland, the judicial investigating authority of the Grand Duchy of Luxembourg and the Criminal Investigation Department of the Grand-Ducal Police of Luxembourg.

          A civil forfeiture complaint is merely an allegation that money or property was involved in or represents the proceeds of a crime. These allegations are not proven until a court awards judgment in favor of the United States.

          LOS ANGELES – An Aliso Viejo man was sentenced today to 180 months in federal prison for traveling to China to engage in illegal sexual activity with a 16-year-old boy who was under his care and supervision at the time.

          Ezequiel Christopher Barragan, 53, was sentenced by United States District Judge André Birotte Jr., who said that Barragan abused his positions of trust to gain access to victims.

          Barragan pleaded guilty in October 2018 to one count of travel with intent to engage in illicit sexual conduct and one count of engaging in illicit sexual conduct in foreign places. He previously taught middle school and high school students, coached youth baseball, and at one-time was a court-appointed mentor and foster parent for abused or neglected children.

          Barragan admitted in his plea agreement that in August 2009 he traveled from the United States to China with the intent to engage in illicit sexual conduct. While in China, Barragan engaged in illicit and sexually explicit conduct with the 16-year-old victim. Barragan admitted he produced child pornography with the victim during this time.

          In his plea agreement, Barragan admitted that, on numerous occasions between 1998 and 2012, he traveled from the United States to foreign countries where he engaged in illicit sexual conduct with boys between the ages of 13 and 16 years old. He also admitted he often gave his victims food, cash and goods.

          This matter was investigated by the United States Postal Inspection Service, which received substantial assistance from the Los Angeles Joint Regional Intelligence Center and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.

          This case was prosecuted by Assistant United States Attorney Damaris Diaz of the Violent and Organized Crime Section.

          LOS ANGELES – A Hawthorne man was found guilty by a jury today of 14 federal felonies for intentionally driving his family off a wharf and into the water at the Port of Los Angeles in a scheme to collect money on insurance policies he had taken out on their lives.

          Ali F. Elmezayen, 45, was found guilty of four counts of mail fraud, four counts of wire fraud, one count of aggravated identity theft, and five counts of money laundering.

          “Dissatisfied with his financial and family situation, Mr. Elmezayen fraudulently purchased millions of dollars in insurance on his common-law wife and disabled young sons, and then drove them off a pier in order to cash in,” said United States Attorney Nick Hanna. “These two boys deserved a loving father; instead they got a man who put his greed and self-interest above their lives.”

          “A jury found that Mr. Elmezayen intentionally put his children in a deadly situation from which they could not escape,” said Paul Delacourt, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Today's verdict delivers justice and gives a voice to the young victims who deserved to be protected by their father, but instead were murdered so he could profit from their deaths.”

          According to the evidence presented at his nine-day trial, between July 2012 and March 2013, Elmezayen bought from eight different insurance companies more than $7 million worth of life and accidental death insurance policies on himself and his family. Elmezayen paid premiums in excess of $6,000 per year for these policies – even though he reported income of less than $30,000 per year on his tax returns. Elmezayen began purchasing the insurance policies the same year he exited a Chapter 11 bankruptcy proceeding.

          After purchasing the policies, Elmezayen repeatedly called the insurance companies – sometimes pretending to be his wife in whose name he had obtained some of the policies – to verify that the policies were active and that they would pay benefits if his wife died in an accident. Elmezayen also called at least two of the insurance companies to confirm they would not investigate claims made two years after the policies were purchased. These telephone calls were recorded and were played for the jury.

          On April 9, 2015, 12 days after the 2-year contestability period on the last of his insurance policies expired, Elmezayen drove a car with his wife and two youngest children off a wharf at the Port of Los Angeles. The site of the crash was a loading dock and worksite for commercial fishermen.

          Elmezayen swam out the open driver’s side window of the car. Elmezayen’s wife, who did not know how to swim, escaped the vehicle and survived when a nearby fisherman threw her a flotation device. Two of the couple’s three sons, who were 8 and 13 and who were both severely autistic, were strapped into the car and drowned. The third son was away at camp at the time and was not in the car at the time his father drove it into the water.

          Elmezayen then collected more than $260,000 in insurance proceeds from Mutual of Omaha Life Insurance and American General Life Insurance on the accidental death insurance policies he had taken out on the children’s lives. He used part of the insurance proceeds to purchase real estate in Egypt as well as a boat.  

          Prosecutors argued that Elmezayen was an abusive husband and parent who “hatched a plan” to make all of his financial problems disappear.

          “What he did on April 9 wasn’t an accident,” prosecutors said. “It was a long time coming.”

          “It’s a terrible tragedy that any father would jeopardize the lives of his family for his own financial gain,” stated Special Agent in Charge Ryan L. Korner of IRS Criminal Investigation. “IRS-CI is proud to flex our financial fraud expertise in bringing some closure in this horrific scheme.”

          In addition to posing as his wife in communications with the insurance companies without her knowledge, following the crash, Elmezayen repeatedly lied – to law enforcement officers, insurance companies, and in subsequent civil litigation he filed concerning the crash – about the extent of the insurance he had purchased on his family, and specifically about whether he had insured his disabled children’s lives. The evidence at trial also showed that he attempted to persuade witnesses to falsely tell law enforcement that he had given the insurance proceeds to charity.

          FBI agents arrested Elmezayen in November 2018 on a criminal complaint and he has been in custody ever since.

          Tomorrow, United States District Judge John F. Walter will schedule a sentencing hearing, at which time Elmezayen will face a statutory maximum sentence of 212 years in federal prison.

          This case was investigated by the FBI and IRS Criminal Investigation. The Los Angeles Police Department, the Los Angeles Port Police, and the Los Angeles City Attorney’s Office provided substantial assistance in this case.

          Assistant United States Attorneys Alexander C.K. Wyman of the Major Frauds Section and David T. Ryan of the Terrorism and Export Crimes Section are prosecuting this matter.

          RIVERSIDE, California – An Arizona man has been sentenced to 24 months in federal prison for involuntary manslaughter in a fatal bus crash that happened after he parked his truck – without any lights or warning cones – in the middle of a highway on the Fort Irwin Army Base in the Mojave Desert.

          Steven Kilty, 52, of Apache Junction, Arizona, was sentenced late Monday afternoon by United States District Judge Jesus G. Bernal.

          After a five-day trial that ended in early October 2018, a federal jury found Kilty of involuntary manslaughter. The evidence presented at trial showed that Kilty, who was delivering a military tactical vehicle, arrived at Army’s National Training Center at Fort Irwin on June 1, 2014. Kilty had arrived at the base the night before his scheduled delivery, and he parked his tractor-trailer in the right lane of the road on Fort Irwin property. Kilty turned off the lights on the truck and, instead of putting out any safety triangle reflectors or turning on his hazard lights, he went to sleep in the berth of his truck – while the truck was still parked in the middle of the roadway.

          Just after 5 a.m. on June 2, prior to sunrise, a Victor Valley Transit Authority bus transporting commuters to Fort Irwin collided with the parked truck. As a result of the collision, Dail Lee Keiper, 62, of Barstow, was killed and seven people suffered significant injuries, including one man who lost his arm.

          “The death was the direct result of defendant’s decision to park the semi-truck loaded with an armored vehicle in the middle of a moving lane of traffic,” prosecutors wrote in a sentencing memorandum filed with the court. “Rather than a single isolated decision, the accident was the culmination of a number of reckless decisions made by (the) defendant.”

          The evidence presented at trial showed that Kilty was “grossly negligent” because his truck was blocking traffic on the roadway and he failed to place any warning reflectors, both of which are violations of the California Vehicle Code.

          Kilty was indicted in this case in March 2016. He initially was tried in this matter in late 2017, but a jury was unable to reach a unanimous verdict, and a mistrial was declared.

          This case was investigated by the FBI, California Highway Patrol, the U.S. Army Criminal Investigation Command, and the Fort Irwin Police Department.

          This matter was prosecuted by Special Assistant United States Attorney Paul D. Levers and Assistant United States Attorney Jerry C. Yang of the Riverside Branch Office.

          LOS ANGELES – A Venice man who sold the powerful synthetic opioid fentanyl to a 19-year-old man who suffered a fatal overdose last year pleaded guilty today to a federal narcotics offense.

          Julian Miles Mayers-Johnson, 32, pleaded guilty to one count of possession with intent to distribute fentanyl. He has been in custody since his arrest on April 17.

          Mayers-Johnson admitted in his plea agreement that on October 19, 2018, outside a fast-food restaurant in Venice, he knowingly possessed fentanyl, intending to distribute it. That same evening, at the same location, Mayers-Johnson sold one-half gram of fentanyl to the victim, who was residing at a sober living home in the Beverlywood neighborhood of Los Angeles, according to court documents. The victim later ingested the fentanyl that Mayers-Johnson supplied, resulting in the victim’s overdose on October 20, and, one day later, the victim’s death, the plea agreement states.

          A search of the victim’s cell phone resulted in law enforcement determining that Mayers-Johnson sold the fatal dose of fentanyl to the victim, according to court documents.

          United States District Judge Otis D. Wright II scheduled a May 4, 2020 sentencing hearing, at which time Mayers-Johnson will face a statutory maximum sentence of 20 years in federal prison.

          This matter was investigated by the Drug Enforcement Administration and the High Intensity Drug Trafficking Area (HIDTA) Opioid Response Team, which is tasked with investigating suspected opioid-related overdose deaths in Los Angeles County.

          This case is being prosecuted by Assistant United States Attorneys J. Jamari Buxton and Ali Moghaddas of the General Crimes Section.

          SANTA ANA, California – An Orange County man was sentenced today to three months in federal prison for breaking into the Santa Ana Zoo after hours and stealing North America’s oldest ring-tailed lemur in captivity to keep the endangered animal as his pet.

          Aquinas Kasbar, 19, of Newport Beach, was given the 90-day prison sentence by United States District Judge Andrew J. Guilford, who also ordered him to pay $8,486 in restitution to the zoo.

          Kasbar pleaded guilty on July 8 to one misdemeanor count of unlawfully taking an endangered species. He broke into the Santa Ana Zoo on July 27, 2018 after it had closed for the day. He then used bolt cutters to cut a hole in the zoo’s enclosures for lemurs and capuchin monkeys, which enabled several of the animals to escape, though they were later recovered.

          While inside the zoo, Kasbar stole Isaac, a 32-year-old, ring-tailed lemur (lemur catta) and the oldest such lemur in captivity in North America. (Isaac turned 33 years old in July; a lemur’s lifespan typically is between 20 years and 25 years.) The ring-tailed lemur is native to Madagascar and is on a list of the 25 most endangered primates, according to court documents. Ring-tailed lemurs are endangered, in part, because of the illegal pet trade, court papers state.

          Kasbar then placed Isaac in a plastic drawer that lacked ventilation holes, court papers state. The next day, Kasbar abandoned the animal in front of a Newport Beach hotel, leaving him in the same plastic drawer with two notes placed on it, which read, “Lemur (with tracker)” and “This belongs to the Santa Ana Zoo it was taken last night please bring it to police,” according to court documents. Kasbar’s actions resulted in a loss to the Santa Ana Zoo of approximately $8,486. Isaac later was returned unharmed to the zoo.

         his case was investigated by the FBI, the U.S. Fish and Wildlife Service, the Newport Beach Police Department, and the Santa Ana Police Department.

          This matter was prosecuted by Assistant United States Attorneys Daniel H. Ahn of the Santa Ana Branch Office and Erik M. Silber of the Environmental and Community Safety Crimes Section.

          LOS ANGELES – The United States Attorney’s Office, the FBI, and a coalition of law enforcement agencies and community organizations today are hosting the 11th Annual Cybercrime Prevention Symposium at the California Endowment in downtown Los Angeles. The day-long seminar for more than 400 educators, parents, and middle and high school students will present a wide array of information on cyber safety, technology crime and digital reputation.

          This year’s Symposium will address a wide range of cybercrime topics with law enforcement and community speakers conducting age-appropriate interactive discussions on issues including smartphone safety, online behavior, online exploitation, harassment and peer pressure of children and teens, digital reputation, cyberbullying, internet dangers, and sextortion.

          Highlights of today’s Symposium will include a collaborative presentation by students from the Theatre Department at California State University, Northridge called “Improvising Online,” and the traditional lunchtime appearance of surprise celebrity guests from Disney television programs.

          “Cyberspace has become a dangerous place for adults and children alike. It is incumbent on law enforcement to provide the community with the necessary skills to stay safe in this online world,” said United States Attorney Nick Hanna. “This important Symposium plays a vital role in presenting a variety of relevant approaches and tactics that will guide children and adults to safer online behavior.”

          “Say ‘no’ to anyone who pressures you online for sexual images or information about yourself, and say something to a trusted adult if your information has been compromised,” said Paul Delacourt, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “We urge parents to monitor their child’s activity online, discuss the speed with which information spreads on the Internet, and ensure awareness of the life-altering consequences of making the wrong choices. Our annual Cyber Symposium in Los Angeles provides us an opportunity to teach hundreds of kids about the latest dangers targeting them online so that they can serve as ambassadors in their communities and help us prevent the ability of sexual predators to operate in cyberspace.”

          Cybercrime Safety Challenge 2018-2019 awards will be presented at the Symposium to the winning schools from last year’s contest. The Technology and Research Award will be presented to Our Lady of Refuge School in Long Beach. The Impact Award will be given to St. Charles Borromeo School in North Hollywood, and the Creativity Award will be awarded to St. Thomas More School in Alhambra.

          “The Archdiocese of L.A. is proud to be a partner in this ongoing and collaborative effort to keep young people safe online – we are especially grateful that students in our schools are taking what they learn at the symposium and transforming that knowledge into creative and impactful programs they then deliver at their parishes and schools,” said Heather T. Banis, Victims Assistance Ministry Coordinator for the Archdiocese of Los Angeles.

          Student teams from each of the schools attending this year’s Symposium will be invited to participate in the 9th Annual Cyber safety Challenge. This contest asks students to develop a cyber safety program at their respective schools to educate the entire student body on the various risks associated with cybercrime. The contest promotes good cyber etiquette by challenging students to engage in creating the cyber safety programs. Students participating in this challenge will have their contest entries judged by a panel of experts, and the winning school will be announced in June 2020.

          “With the ever emerging new frontiers of technology can also come peril,” said Los Angeles City Attorney Mike Feuer. “My office and our law enforcement partners continue to work tirelessly to keep our kids safe when they are online.”

          Coming together under the umbrella of the Inter-Agency Council on Child Abuse and Neglect (ICAN), law enforcement agencies participating in this year’s Symposium include the United States Attorney’s Office, the FBI, the Los Angeles City Attorney’s Office, the Los Angeles County District Attorney’s Office, the Los Angeles County Sheriff’s Department and the Los Angeles Police Department - Internet Crimes Against Children Task Force (ICAC).

          “Children growing up in this high tech age are being targeted by online predators at an alarmingly high rate,” said Deanne Tilton Durfee, Executive Director for the ICAN. “Each year, this Symposium provides participants with resources and tools to help children learn how to protect themselves and be safe in the cyber world, while enjoying all of the benefits of the fast-growing technologies.”

          The Cybercrime Prevention Symposium is hosted this year by the Archdiocese of Los Angeles. The planning committee also includes representatives from Santa Monica-UCLA Medical Center, the Anti-Defamation League, Fox Entertainment Group, The Walt Disney Co., and Warner Bros. Entertainment.

          LOS ANGELES – A former United States Postal Service employee was sentenced today to 132 months in federal prison for participating in two armed robberies and one theft of USPS trucks carrying cash – incidents that caused nearly a quarter million dollars in losses and significant trauma to one of its victims who later took his own life.

          William Crosby IV, 33, of Inglewood, was sentenced this morning by United States District Judge S. James Otero, who also ordered Crosby to pay $238,457 in restitution.

          On July 31, Crosby pleaded guilty to one count of robbery of United States property and one count of brandishing a firearm in furtherance of a violent crime.

          Between August 2017 and March 2018, while a USPS employee, Crosby conspired with others to plan two armed robberies and a theft of USPS trucks carrying cash. The armed robberies and theft caused cash losses of $238,457, Crosby admitted in his plea agreement.

          “These violent episodes left lasting impressions on the (victim) USPS drivers, including one, who according to his loved ones and his supervisor, suffered extreme emotional trauma after the robbery before he apparently tragically took his own life,” prosecutors wrote in the government’s sentencing memorandum.

          Crosby is a former acting USPS supervisor and knew when the agency transported cash generated from the sale of money orders and USPS merchandise – information that is not known to all of its employees, according to court documents.

          On August 1, 2017, Crosby signaled to his co-conspirators that a USPS truck carrying a large amount of cash was on the loading dock at the Dockweiler Post Office in South Los Angeles. A co-conspirator wearing a USPS shirt walked onto the loading dock and stole a container inside the truck that contained approximately $128,236 in cash.

          On February 1, 2018, Crosby – who then was assigned to the Wagner Post Office in Los Angeles near the city boundary with Inglewood -- provided information to co-conspirators that a USPS truck carrying cash was leaving the facility. During the robbery, in which Crosby acted as a lookout, a minivan blocked the USPS truck just outside the Wagner Post Office, the robber threatened the truck driver at gunpoint, and the robber stole $37,658 in cash.

          On March 1, 2018, while Crosby was taking sick leave without pay from his job at the Wagner Post Office, he again conspired to rob a post office, this time the Dockweiler Post Office, where he previously worked. Less than one hour before the robbery, Crosby parked at a grocery store parking lot across the street from the Dockweiler Post Office in a spot where he could see the post office’s loading dock area.

          After the USPS truck left the facility, Crosby, along with his co-conspirators, followed the truck, according to the plea agreement. Crosby’s co-defendant -- his half-brother, Myron Crosby, 28, of Athens -- used a rented a Mercedes-Benz SUV to box in the USPS truck as it exited the southbound 110 Freeway at Slauson Avenue. At that time, another co-conspirator exited another vehicle, brandished a gun to control the USPS driver, and stole $72,563 in cash.

          Myron Crosby pleaded guilty on August 19 to one count of robbery of United States property. Myron Crosby’s sentencing hearing is scheduled for November 25, at which time he will face a statutory maximum sentence of 25 years in federal prison.

          This matter was investigated by the United States Postal Inspection Service and the United States Secret Service.

          The case is being prosecuted by Assistant United States Attorneys Thomas F. Rybarczyk of the Public Corruption and Civil Rights Section and Jeffrey M. Chemerinsky of the Violent and Organized Crime Section.

          RIVERSIDE, California – Six men have been arrested on federal charges alleging they committed a spree of armed robberies this year at Southern California cellphone stores, holding store employees at gunpoint, sometimes zip-tying them, then stealing a total of nearly $200,000 worth of electronic devices and cellular telephones.

          The defendants were named in a five-count federal grand jury indictment unsealed yesterday that alleges conspiracy to interfere with commerce in violation of the Hobbs Act, two specific Hobbs Act violations, and two counts of using a firearm during the robberies. A December 17 trial date has been set in this case.

          Anthony Wimbley, 27, of Irvine, was arraigned this afternoon in United States District Court in Riverside. He pleaded not guilty and was ordered released on $80,000 bond. The other defendants are:

• Robert Wimbley, 26, of Pomona, and Darron Wimbley, 28, of Fontana, both of whom were arraigned in federal court yesterday and have been ordered detained;
• Edward Eugene Robinson, 48, of Long Beach; and Aaron Tremmell Hardrick, 32, of Fort Worth, Texas, who are in custody in Texas, and who also face charges there based on their alleged violations of the Hobbs Act; and
• Djovonte Lewis, 22, of Pomona, who is in local custody.

          The indictment alleges that between March 18 and September 8, the defendants conspired to rob cellular phone stores in Chino, Fullerton, Long Beach, Victorville and Beaumont. The defendants allegedly targeted for theft cell phones that did not contain tracking devices.

          For example, on August 19, Hardrick and two unidentified co-conspirators, wearing masks and with one of them brandishing a handgun, stole approximately $65,000 worth of electronic devices and cellular telephones from a Sprint store in Victorville, the indictment alleges. During the robbery, one of the store’s employees was bound with zip-ties and was forced to lay on the ground.

          In total, the defendants allegedly stole approximately $191,053 in cell phones and electronic devices, and approximately $2,434 in cash.

          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.

          A violation of the Hobbs Act carries a statutory maximum penalty of 20 years in federal prison. The offense of brandishing a firearm during a crime of violence carries a statutory maximum sentence of life imprisonment.

          This matter was investigated by the FBI, the United States Attorney’s Office for the Northern District of Texas, the Orange County District Attorney’s Office, the San Bernardino County District Attorney’s Office, the Chino Police Department, the Fullerton Police Department, the Long Beach Police Department, the San Bernardino County Sheriff’s Department, the Beaumont Police Department, and the Pomona Police Department.

          This case is being prosecuted by Assistant United States Attorney Jerry C. Yang of the Riverside Branch Office.

INFORMATION

 

PLEA AGREEMENT

          LOS ANGELES – Federal prosecutors today filed a criminal case charging Imaad Shah Zuberi, a Southern California campaign fundraiser, with falsifying records to conceal his work as a foreign agent while lobbying high-level U.S. government officials. The criminal charges allege that Zuberi engaged in lobbying efforts that earned him millions of dollars, much of which was pilfered from his clients.

          In addition to violating the Foreign Agents Registration Act (FARA), Zuberi is charged in a criminal information with tax evasion and making almost $1 million in illegal campaign contributions that included funneling money from foreign entities and individuals to influence U.S. elections.

          Zuberi, a 49-year-old resident of Arcadia, California, has agreed to plead guilty to the three counts in the information. A plea agreement also filed today in United States District Court notes that Zuberi faces a statutory maximum sentence of 15 years in federal prison once he pleads guilty to the charges.

          Zuberi, who operated a venture capital firm called Avenue Ventures, solicited foreign nationals and representatives of foreign governments with claims he could use his influence in Washington, D.C. to change United States foreign policy and create business opportunities for his clients and himself. According to court documents, clients gave Zuberi money for consulting fees, to make investments, or to fund campaign contributions. As part of his efforts to influence public policy, Zuberi hired lobbyists, retained public relations professionals and made campaign contributions – which gave him access to high-level U.S. officials, some of whom took action in support of his clients. As evidence of his access and influence, Zuberi distributed to his clients photographs of himself discussing policy with elected officials.

          While some U.S. officials were willing to take action on issues Zuberi put forward, most of Zuberi’s business efforts were unsuccessful and his clients suffered significant losses. Many of the lobbyists, public relations consultants, and other subcontractors also suffered losses when Zuberi refused to pay them, according to the information.

          Zuberi, on the other hand, became wealthy, primarily as the result of fraudulent representations about his background, influence, and the use of client funds, much of which constituted an “outright conversion of client money for defendant Zuberi’s own personal benefit,” the information states.

          The information details dozens of illegal campaign contributions – including those paid by Zuberi using the names of other people, “conduit contributions” made by others that Zuberi reimbursed, and contributions to U.S. political campaigns that were financed by foreign entities and individuals.

          The information further states that Zuberi accepted money from two foreign companies with promises that the funds would be used to contribute to political campaigns, but Zuberi took the majority of the money – more than $1.1 million – for his own personal use.

          “Mr. Zuberi’s multi-faceted scheme allowed him to line his pockets by concealing the fact that he was representing foreign clients, obtaining access for clients by making a long series of illegal contributions, and skimming money paid by his clients,” said United States Attorney Nick Hanna. “Mr. Zuberi circumvented laws designed to insulate U.S. policy and our election process from foreign intervention. This investigation has halted his illegal conduct, will result in several felony convictions, and could send him to prison for a lengthy period of time.”

          “American influence is not for sale,” said Paul Delacourt, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Mr. Zuberi lured individuals who were seeking political influence in violation of U.S. law, and in the process, enriched himself by defrauding those with whom he interacted.”

          The information details other aspects of Zuberi’s scheme through which he personally profited. Zuberi mounted efforts to convince the government of Bahrain to lift sanctions on a citizen of Bahrain in connection with the development of a large resort in that country. The scheme falsely created the appearance that Avenue Ventures had made a major investment in the Bahrain project. Zuberi lobbied members of Congress to apply political pressure on Bahrain to cease its interference in the project, claiming that it was adversely affecting him as a U.S. investor. In fact, Zuberi designed these efforts to assist the citizen of Bahrain. Zuberi illegally received compensation for these efforts because he failed to register as a foreign agent of the Bahraini citizen.

          Zuberi also converted to his own benefit money invested in U.S. Cares, a company established to export humanitarian items to Iran, according to the information. In 2013 and 2014, investors put approximately $7 million into U.S. Cares, but Zuberi used over 90 percent of the investor funds for his personal benefit – to purchase real estate, pay down mortgages, remodel properties, invest in brokerage accounts, donate $250,000 to a non-profit organization established by a former high-ranking elected official, and to pay down personal credit card debt, according to court documents.

          In 2014, Zuberi entered into a contract with the government of Sri Lanka to rehabilitate Sri Lanka’s image in the United States, which had suffered as a result of allegations of persecution of the country’s minority Tamil population. Zuberi promised to make substantial expenditures on lobbying efforts, legal expenses and media buys, which prompted Sri Lanka to agree to pay Zuberi a total of $8.5 million over the course of six months in 2014. According to court documents, days after Sri Lanka made an initial payment of $3.5 million, Zuberi transferred $1.6 million into his personal brokerage accounts and used another $1.5 million to purchase real estate.

          The information states that Sri Lanka wired a total of $6.5 million pursuant to the contract, and Zuberi directed more than $5.65 million of that money to the benefit of himself and his spouse. Zuberi paid less than $850,000 to lobbyists, public relations firms and law firms, and certain subcontractors did not receive full payment after Zuberi falsely claimed that Sri Lanka had not provided sufficient funds to pay invoices, according to the information.

          “This case should deter individuals who seek to provide false statements to the Department and covertly influence our political process on behalf of foreign governments,” said Assistant Attorney General for National Security John C. Demers. “Through misrepresentations in his FARA filing, Mr. Zuberi attempted to deceive our elected officials and the American public on behalf of Sri Lanka. The Department of Justice treats these crimes with the gravity that they deserve and will continue to aggressively identify, investigate and prosecute FARA violations.”

          “Mr. Zuberi was the primary organizer of paid political efforts to mold the opinion of political officials, including members of Congress, to benefit Sri Lanka. Instead, he used shell business entities to divert millions of dollars for his own personal use,” stated Special Agent in Charge Ryan L. Korner of IRS Criminal Investigation’s Los Angeles Field Office. “Today's announcement of Mr. Zuberi’s anticipated guilty plea to tax and campaign finance violations demonstrates IRS-CI’s continued commitment to work alongside our federal law enforcement partners to ensure the system remains fair for everyone.”

          In relation to the FARA charge in the information, Zuberi agreed to plead guilty to submitting false registration statements in which he concealed his direction of the Sri Lanka lobbying effort, as well as the millions of dollars he received.

          In relation to the tax charge in the information, Zuberi agreed to plead guilty to one count of tax evasion for failing to report on his 2014 tax return millions of dollars in income he received from Sri Lanka. While the 2014 income tax return claimed income of $558,233, Zuberi failed to report more than $5.65 million he received in relation to the Sri Lanka lobbying effort. Zuberi admits in his plea agreement that his tax evasion over the course of four years – 2012 through 2015 – caused tax losses of at least $3.5 million and as much as $9.5 million.

          In relation to the campaign finance charge, Zuberi agreed to plead guilty to a charge of violating the Federal Election Campaign Act in 2015 by making conduit contributions in the names of other people, reimbursing contributions made by others, and being reimbursed for contributions he made. In his plea agreement, Zuberi admits that over a five-year period – 2012 through 2016 – he made or solicited more than $250,000 in illegal campaign contributions.

          Zuberi is expected to make his initial appearance in this case in United States District Court in downtown Los Angeles on October 30.

          This matter is being investigated by the FBI and IRS Criminal Investigation.

          This case is being prosecuted by Assistant United States Attorneys Daniel J. O’Brien and Elisa Fernandez of the Public Corruption and Civil Rights Section. The National Security Division of the Department of Justice provided assistance to the prosecutors.

Federal prosecutors today filed a criminal case charging Imaad Shah Zuberi, a Southern California campaign fundraiser, with falsifying records to conceal his work as a foreign agent while lobbying high-level U.S. government officials. The criminal charges allege that Zuberi engaged in lobbying efforts that earned him millions of dollars, most of which was pilfered from his clients, and Zuberi has agreed to plead guilty to those charges at a later date, pursuant to a plea agreement.

“This case should deter individuals who seek to provide false statements to the Department and covertly influence our political process on behalf of foreign governments,” said Assistant Attorney General of National Security John C. Demers. “Through misrepresentations in his FARA filing, Mr. Zuberi attempted to deceive our elected officials and the American public on behalf of Sri Lanka. The Department of Justice treats these crimes with the gravity that they deserve and will continue to aggressively identify, investigate and prosecute FARA violations.” 

“Mr. Zuberi’s multi-faceted scheme allowed him to line his pockets by concealing the fact that he was representing foreign clients, obtaining access for clients by making a long series of illegal contributions, and skimming money paid by his clients,” said United States Attorney Nick Hanna. “Mr. Zuberi circumvented laws designed to insulate U.S. policy and our election process from foreign intervention. This investigation has halted his illegal conduct, will result in several felony convictions, and could send him to prison for a lengthy period of time.”

“American influence is not for sale,” said Paul Delacourt, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Mr. Zuberi lured individuals who were seeking political influence in violation of U.S. law, and in the process, enriched himself by defrauding those with whom he interacted.”

“Mr. Zuberi was the primary organizer of paid political efforts to mold the opinion of political officials, including members of Congress, to benefit Sri Lanka. Instead, he used shell business entities to divert millions of dollars for his own personal use,” stated Special Agent in Charge Ryan L. Korner of IRS Criminal Investigation’s Los Angeles Field Office. “Today's announcement of Mr. Zuberi’s anticipated guilty plea to tax and campaign finance violations demonstrates IRS-CI’s continued commitment to work alongside our federal law enforcement partners to ensure the system remains fair for everyone.”

In addition to violating the Foreign Agents Registration Act (FARA), Zuberi is charged in a criminal information with tax evasion and making almost $1 million in illegal campaign contributions that included funneling money from foreign entities and individuals to influence U.S. elections.

Zuberi, a 49-year-old resident of Arcadia, California, has agreed to plead guilty to the three counts in the information. A plea agreement also filed today in United States District Court notes that Zuberi faces a statutory maximum sentence of 15 years in federal prison once he pleads guilty to the charges.

Zuberi, who operated a venture capital firm called Avenue Ventures, solicited foreign nationals and representatives of foreign governments with claims he could use his influence in Washington, D.C. to change United States foreign policy and create business opportunities for his clients and himself. According to court documents, clients gave Zuberi money for consulting fees, to make investments, or to fund campaign contributions. As part of his efforts to influence public policy, Zuberi hired lobbyists, retained public relations professionals and made campaign contributions – which gave him access to high-level U.S. officials, some of whom took action in support of his clients. As evidence of his access and influence, Zuberi distributed to his clients photographs of himself discussing policy with elected officials.

While some U.S. officials were willing to take action on issues Zuberi put forward, most of Zuberi’s business efforts were unsuccessful and his clients suffered significant losses. Many of the lobbyists, public relations consultants, and other subcontractors also suffered losses when Zuberi refused to pay them, according to the information. Zuberi, on the other hand, became wealthy, primarily as the result of fraudulent representations about his background, influence, and the use of client funds, much of which constituted an “outright conversion of client money for defendant Zuberi’s own personal benefit,” the information states.

The information details dozens of illegal campaign contributions – including those paid by Zuberi using the names of other people, “conduit contributions” made by others that Zuberi reimbursed, and contributions to U.S. political campaigns that were financed by foreign entities and individuals.

The information further states that Zuberi accepted money from two foreign companies with promises that the funds would be used to contribute to political campaigns, but Zuberi took the vast majority of the money – more than $1.1 million – for his own personal use.

The information details other aspects of Zuberi’s scheme through which he personally profited. Zuberi mounted efforts to convince the government of Bahrain to lift sanctions on a citizen of Bahrain in connection with the development of a large resort in that country. The scheme falsely created the appearance that Avenue Ventures had made a major investment in the Bahrain project.  Zuberi lobbied members of Congress to apply political pressure on Bahrain to cease its interference in the project, claiming that it was adversely affecting him as a U.S. investor. In fact, Zuberi designed these efforts to assist the citizen of Bahrain. Zuberi illegally received compensation for these efforts because he failed to register as a foreign agent of the Bahraini citizen.

Zuberi also converted to his own benefit money invested in U.S. Cares, a company established to export humanitarian items to Iran, according to the information. In 2013 and 2014, investors put approximately $7 million into U.S. Cares, but Zuberi used over 90 percent of the investor funds for his personal benefit – to purchase real estate, pay down mortgages, remodel properties, invest in brokerage accounts, donate $250,000 to a non-profit organization established by a former high-ranking elected official, and pay down personal credit card debt, according to court documents.

In 2014, Zuberi entered into a contract with the government of Sri Lanka to rehabilitate Sri Lanka’s image in the United States, which had suffered as a result of allegations of persecution of the country’s minority Tamil population. Zuberi promised to make substantial expenditures on lobbying efforts, legal expenses and media buys, which prompted Sri Lanka to agree to pay Zuberi a total of $8.5 million over the course of six months in 2014. According to court documents, days after Sri Lanka made an initial payment of $3.5 million, Zuberi transferred $1.6 million into his personal brokerage accounts and used another $1.5 million to purchase real estate.

The information alleges that Sri Lanka wired a total of $6.5 million pursuant to the contract, and Zuberi directed more than $5.65 million of that money to the benefit of himself and his spouse. Zuberi paid less than $850,000 to lobbyists, public relations firms and law firms, and certain subcontractors did not receive full payment after Zuberi falsely claimed that Sri Lanka had not provided sufficient funds to pay invoices, according to the information.

In relation to the FARA charge in the information, Zuberi agreed to plead guilty to submitting false registration statements in which he concealed his direction of the Sri Lanka lobbying effort, as well as the millions of dollars he received.

In relation to the tax charge in the information, Zuberi agreed to plead guilty to one count of tax evasion for failing to report on his 2014 tax return millions of dollars in income he received from Sri Lanka. While the 2014 income tax return claimed income of $558,233, Zuberi failed to report more than $5.65 million he received in relation to the Sri Lanka lobbying effort. Zuberi admits in his plea agreement that his tax evasion over the course of four years – 2012 through 2015 – caused tax losses of at least $3.5 million and as much as $9.5 million.

In relation to the campaign finance charge, Zuberi agreed to plead guilty to a charge of violating the Federal Election Campaign Act in 2015 by making conduit contributions in the names of other people, reimbursing contributions made by others, and being reimbursed for contributions he made. In his plea agreement, Zuberi admits that over a five-year period – 2012 through 2016 – he made or solicited more than $250,000 in illegal campaign contributions.

Zuberi is expected to make his initial appearance in this case in United States District Court on October 30.

This matter is being investigated by the FBI and IRS Criminal Investigation.

This case is being prosecuted by Assistant United States Attorneys Daniel J. O’Brien and Elisa Fernandez of the Public Corruption and Civil Rights Section with support from the Counterintelligence and Export Control Section of the National Security Division.

          LOS ANGELES – A Texas man who was found guilty of hacking into the Los Angeles Superior Court (LASC) computer system, using the system to send approximately 2 million malicious phishing emails, and fraudulently obtaining hundreds of credit card numbers was sentenced this afternoon to 145 months in federal prison.

          Oriyomi Sadiq Aloba, 33, of Katy, Texas, was sentenced by United States District Judge R. Gary Klausner, who also ordered Aloba to pay $47,479 in restitution.

          In July 2017, Aloba and his co-conspirators targeted the LASC for a phishing attack. During the attack, the email account of one court employee was compromised and used to send phishing emails to co-workers purporting to be from the file-hosting service Dropbox. The email contained a link to a bogus website that asked for the users’ LASC email addresses and passwords. Thousands of court employees received the Dropbox email, and hundreds disclosed their email credentials to the attacker. The compromised email accounts then were used to send the roughly 2 million phishing emails.

          These additional phishing emails purported to be from American Express, Wells Fargo, and other companies. Hyperlinks in the fraudulent emails led victims to a webpage that asked for their banking login credentials, personal identifying information, and credit card information. The link for the fake American Express website used source code that designated Aloba’s email account as the delivery address for the information that the victims input into the fake website.

          After linking Aloba to the attack, investigators executed a search warrant at Aloba’s residence, which revealed a thumb drive in a toilet, a damaged iPhone in a bathroom sink, and a laptop computer with a smashed screen that was smeared with fresh blood. Nearby, agents found a broken mug, which apparently was used to smash the laptop computer, and observed blood on Aloba’s hands.

          Following a three-day jury trial in July, Aloba was found guilty of one count of conspiracy to commit wire fraud, 15 counts of wire fraud, one count of attempted wire fraud, one count of unauthorized impairment of a protected computer, five counts of unauthorized access to a protected computer to obtain information, and four counts of aggravated identity theft. Aloba was remanded into custody after the verdicts were read.

          Aloba’s targeting of the “largest court system in the world… merits special attention,” prosecutors wrote in a sentencing memorandum filed with the court. Aloba’s “conduct resulted in a substantial disruption to the administration of the LASC, including taking hundreds of employees offline for hours, at a minimum, and possibly days. His conduct diverted substantial resources from the critical tasks LASC personnel undertake daily, resulting in over $45,000 in losses to the LASC. And perhaps most importantly, he compromised the integrity of the LASC, which is a court system that thousands of people rely on to administer justice.”

          Aloba was initially charged by the Los Angeles County District Attorney, but the matter was referred to the United States Attorney’s Office for federal prosecution.

          A co-defendant, Robert Charles Nicholson, who used the online moniker “Million$Menace” and used stolen credit card information to make purchases, a 28-year-old resident of Brooklyn, New York, pleaded guilty in June to one count of conspiracy to commit wire fraud. Nicholson is scheduled to be sentenced by Judge Klausner on November 4. Three other defendants allegedly hired by Aloba to create the “phishing kits” remain at large outside the United States.

          This matter was investigated by the Federal Bureau of Investigation and the Los Angeles County District Attorney’s Office.

          This case is being prosecuted by Assistant United States Attorney Ryan White, Chief of the Cyber and Intellectual Property Crimes Section.

          SANTA ANA, California – An Aliso Viejo man was sentenced today to 57 months in federal prison for deliberating driving his Mercedes-Benz sedan into and severely injuring a U.S. Customs and Border Protection employee at the federal building in Laguna Niguel.

          Geoffrey Donald Rickner, 48, was sentenced by United States District Judge James V. Selna.

          Rickner pleaded guilty on May 14 to one felony count of assault on a federal employee by use of a dangerous and deadly weapon and inflicting bodily injury.

          On March 3, 2016, Rickner deliberately drove his Mercedes-Benz into CBP Security Specialist Jose Gutierrez at the Chet Holifield Federal Building, which is commonly known as the Ziggurat Building. Mr. Gutierrez was in a well-marked crosswalk and was wearing his federal employee identification card at the time of the attack. He suffered permanent and life-threatening injuries – including head trauma, broken ribs, internal bleeding and badly damaged legs – that put him in the hospital for nearly three weeks and continue to cause him pain and physical impairment.

          When Rickner struck Mr. Gutierrez, the vehicle was travelling at such a high rate of speed that it continued traveling into the Ziggurat, going through a metal garage door, and stopping only when it struck a concrete wall inside the building.

          By the time of the March 2016 attack, Rickner had been involved in a years-long dispute with the IRS regarding his tax situation, according to the prosecution’s sentencing memorandum. Though he had worked and earned money, Rickner, a certified financial planner, became involved in a “tax denial” group, stopped paying taxes, and began incurring large civil penalties for non-payment of tax.

          “Although the financial mess was entirely of his own making, the resulting stress made defendant frustrated and angry…with the IRS and, more generally, the U.S. government,” according to the government’s sentencing brief.

          In the hours leading up to the assault, Rickner had been seen behaving suspiciously, prompting building security personnel at one point to detain him. At that time, he made comments about owing money to the IRS. Rickner had shown up to the Ziggurat Building earlier that day to talk with someone at the IRS, despite not having an appointment. Rickner was told to leave the premises, and he did. But he returned later in the day, during which time he was seen pacing the building in an agitated manner, and he subsequently got into his car, later crashing into Mr. Gutierrez in the crosswalk.

          The investigation in this case was conducted by the FBI and the U.S. Treasury Inspector General for Tax Administration.

          This matter was prosecuted by Assistant United States Attorney Robert J. Keenan of the Santa Ana Branch Office.

          LOS ANGELES – A Manhattan Beach man pleaded guilty to a fraud charge this afternoon in United States District Court and admitted bilking foreign investment groups out of $14 million by falsely claiming the money would be used to produce a feature film that Netflix would distribute.

          Adam Joiner, 41, entered a guilty plea to one count of wire fraud before United States District Judge André Birotte Jr.

          As a result of the guilty plea, Joiner will face a statutory maximum sentence of 20 years in federal prison when he is sentenced by Judge Birotte on March 6, 2020.

          Joiner used fake documents and forged signatures to raise millions of dollars from foreign investment firms based in South Korea and China for a movie project he said would be called “Legends,” he admitted in a plea agreement filed in this case.

          Joiner, who operated a company called Dark Planet Pictures, LLC, defrauded Korea Investment Global Contents Fund, a South Korean investment fund whose assets are managed by Korean Investment Partners Co., Ltd. (KIP), which suffered $8 million in losses. Joiner also defrauded a Chinese investment firm called Star Century Pictures Co., Ltd. and a related company called PGA Yungpark Capital Ltd, which invested $6 million into “Legends.”

          As part of the scheme, Joiner falsely told the investors that Netflix had agreed to distribute the picture, a claim Joiner supported with a bogus distribution agreement that contained the forged signature of a Netflix executive. Joiner subsequently told the investors that he had terminated the distribution agreement with Netflix and had secured a new agreement with Amblin Partners, all of which was false.

          The FBI reviewed Dark Planet Pictures bank records and determined that approximately $5.2 million of the investors’ money was used to purchase Joiner’s Manhattan Beach residence and another $4.3 million was transferred to a bank account that may be linked to another film in development linked to Joiner.

          This matter was investigated by the FBI.

          This case is being prosecuted by Assistant United States Attorney Alexander B. Schwab of the Major Frauds Section.

A federal jury found a southern California doctor guilty yesterday for his role in a $12 million scheme to provide medically unnecessary procedures to Medicare beneficiaries, upcode claims submitted to Medicare, and re-package single-use catheters for reuse on patients.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Nicola T. Hanna of the Central District of California, Assistant Director in Charge Paul Delacourt of the FBI’s Los Angeles Field Office, Special Agent in Charge Timothy DeFrancesca of the U.S. Department of Health and Human Services Office of the Inspector General’s (HHS-OIG) Los Angeles Regional Office and Special Agent in Charge Lisa Malinowski of the U.S. Food and Drug Administration Office of Criminal Investigations’ (FDA-OCI) Los Angeles Field Office made the announcement.

After a six-day trial, Donald Woo Lee, 54, of Temecula, California, was found guilty of seven counts of health care fraud and one count of adulteration of a medical device.  Sentencing has been scheduled for March 19, 2020, before U.S. District Judge George Wu of the Central District of California, who presided over the trial. 

According to evidence presented at trial, from 2012 to 2015, Lee engaged in a scheme in which he recruited Medicare beneficiaries to his clinics, falsely diagnosed the beneficiaries with venous insufficiency and provided the beneficiaries with medically unnecessary vein ablation procedures.  The evidence further established that Lee billed these unnecessary procedures to Medicare using an inappropriate code in order to obtain a higher reimbursement, a practice known as “upcoding.”  In addition, the evidence showed that Lee repackaged used, contaminated catheters for re-use on patients.  These catheters had been cleared by the FDA for marketing as single-use only.  Lee submitted claims of approximately $12 million to Medicare for the vein ablation procedures he performed, and received $4.5 million as a result, the evidence showed.

This case was investigated by the FBI, HHS-OIG and FDA-OCI, and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.  Trial Attorneys Alexis Gregorian and Emily Culbertson of the Fraud Section are prosecuting the case. 

The Fraud Section leads the Medicare Fraud Strike Force.  Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

          LOS ANGELES – A Van Nuys man who sold the powerful synthetic opioid fentanyl to a 23-year-old man who suffered a fatal overdose has agreed to plead guilty to drug trafficking offense and serve 15 years in federal prison.

          James Dorion Rodriguez, 28, agreed to plead guilty to possession of fentanyl with intent to distribute in a plea agreement filed today in United States District Court.

          In the plea agreement, Rodriguez admits that he delivered fentanyl to the victim, who ingested the drug and suffered a fatal overdose in Sherman Oaks on the morning of March 18, 2018.

          Court documents filed in this case detail how investigators used surveillance video, phone records and witness statements to determine that Rodriguez supplied the narcotics to the victim only hours before he was found dead. Investigators believe that Rodriguez had intended to sell cocaine to the victim, but accidentally gave him fentanyl instead. The overdose was the result of him snorting the fentanyl.

          Rodriguez is expected to appear to enter his guilty plea before United States District Judge Cormac J. Carney later this month. The plea agreement calls for Judge Carney to impose a sentence of 15 years in federal prison. Should Judge Carney decide to impose a different sentence, either Rodriguez or the government could withdraw from the plea agreement and the case would proceed to trial.

          The investigation into Rodriguez was conducted by the Los Angeles Police Department and the Drug Enforcement Administration. The case initially brought against Rodriguez one year ago was the first pursuant to a law enforcement partnership established to aggressively investigate opioid overdose deaths and prosecute the responsible drug dealers. The Drug Enforcement Administration’s Opioid Response Team is part of the Southern California Drug Task Force, which operates under the auspices of the Los Angeles High Intensity Drug Trafficking Area (HIDTA) program.

          This case is being prosecuted by Assistant United States Attorney Benjamin Barron, Chief of the Santa Ana Branch Office.

          LOS ANGELES – A Pasadena man who falsely claimed to be a licensed attorney was sentenced today to 50 months in federal prison for his conviction on charges related to his representation of “clients” in federal and state courts.

          Kenneth Paul Ferreyro, 37, who resided in Glendale during most of the criminal conduct, also sought well over $100,000 in refunds on federal tax returns that falsely claimed substantial payroll taxes had been withheld and remitted to the IRS.

          United States District Judge John F. Walter imposed the sentence, calling Ferreyro’s criminal conduct “absolutely despicable.” In addition to the prison term, Judge Walter ordered Ferreyro to pay $190,887 in restitution to the IRS.

          Following a four-day trial in April, a federal jury convicted Ferreyro of four counts of wire fraud and four counts of making false claims on his tax returns. Judge Walter remanded Ferreyro into custody after the guilty verdicts were read.

          The evidence presented at trial showed that, from at least 2010 until 2017, Ferreyro told people, most of whom were affiliated with his father’s church, that he could represent them in United States Bankruptcy Court and other courts, and that he could perform work related to real estate refinancing and tax liens. While Ferreyro graduated from law school, he never received a license to practice law.

          In relation to several victims, Ferreyro prepared and/or filed bankruptcy petitions in Los Angeles, Sacramento and Phoenix. In relation to petitions filed in the Central District of California, Ferreyro concealed his participation by claiming that the victims were filing on their own behalf. Ferreyro also claimed he could “represent” a person in a child custody dispute in Idaho state court, and he charged another person $5,000 based on false claims he could remove federal tax liens so the victim could refinance a residence.

          Ferreyro, who at times described himself as a “tax attorney,” also defrauded the government by making false claims on tax returns he filed for the years 2013 through 2016. Ferreyro submitted tax returns to the IRS which falsely stated that he and his wife had already paid substantial amounts of payroll taxes. He also fraudulently sought refunds totaling $126,826, some of which was paid by the IRS.

          “Amazingly, even the indictment in this case could not deter defendant from continuing to commit fraud,” prosecutors wrote in a sentencing memorandum. Earlier this year – while free on bond in this case and under a court order prohibiting him from providing legal services to any California resident – Ferreyro falsely claimed to a California couple that he was he was an attorney and a member of the military’s Judge Advocate General Corps. Prosecutors alleged in the sentencing memo that Ferreyro “told the couple he could help them with their tax returns for $2,000, and help them protect assets by incorporating a trust or limited liability company.”

          The investigation into Ferreyro was conducted by IRS Criminal Investigation, the FBI, and the United States Postal Inspection Service. The United States Trustee Program offices in Los Angeles, Sacramento and Phoenix provided substantial assistance.

          The matter was prosecuted by Assistant United States Attorneys Monica E. Tait and Ashwin Janakiram of the Major Frauds Section.

          LOS ANGELES – A tax preparer and ex-California Franchise Tax Board employee was found guilty by a jury today of federal criminal charges accusing him of defrauding the IRS out of millions of dollars by declaring bogus withholdings used to fraudulently claim substantial tax refunds.

          Cubby Wayne Williams, 64, of Alhambra, was found guilty of 22 counts of assisting in the preparation of false tax returns for his clients and four counts of subscribing to false tax returns for himself.

          United States District Judge Percy Anderson has scheduled a December 16 sentencing hearing, at which time Williams will face a statutory maximum sentence of 78 years in federal prison.

          Williams, who owns and operates the Inglewood-based tax services company Williams Financial Network, filed tax returns claiming that his clients had accrued Original Issue Discount (OID) interest income, according to the evidence presented at his four-day trial. OID is a form of interest that accrues over the life of a bond or other debt instrument, but is not payable as it accrues. Financial institutions use IRS Forms 1099-OID to report this accrued, but unpaid, income, and any tax withholdings on it.

          Williams fraudulently claimed OID withholdings on 22 tax returns for his clients for the tax years 2013 through 2016, and sought hundreds of thousands in bogus tax refunds. Williams took a cut of many of these refunds often by directing the IRS to deposit a portion into a bank account under Williams’s control.

          When his clients complained that their returns had fallen under IRS scrutiny, had been corrected and that they now owed money to the IRS, Williams told them the IRS had made a mistake and they were still entitled to their tax refunds. When the same clients informed Williams they were being audited, he assured them he would represent them before the IRS and resolve any issues, but he ultimately did little other than to submit further fraudulent documentation to the IRS.

          According to prosecutors, Williams’ scheme included many false returns in addition to the returns charged in the indictment, through which Williams attempted to fraudulently obtain more than $5 million in tax refunds and, in fact, obtained nearly $3 million for himself and his clients.

          This case was investigated by IRS Criminal Investigation.

          This matter is being prosecuted by Assistant United States Attorneys James C. Hughes and Ranee A. Katzenstein of the Major Frauds Section.

A Beverly Hills, California, businessman was sentenced yesterday to 21 months in prison for filing false tax returns, which failed to report his offshore accounts in Germany and Israel and the income earned on those accounts, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Tax Division and U.S. Attorney Nicola T. Hanna for the Central District of California.

“Today’s prison sentence reinforces the message that the Tax Division alongside its strong partners in U.S. Attorneys’ Offices and the IRS is committed to prosecuting U.S. taxpayers, who willfully hide offshore accounts, and that the penalty for such criminal conduct is not just a financial penalty, but prison,” said Principal Deputy Assistant Attorney General Zuckerman.

According to court documents, Teymour Khoubian filed false tax returns for tax years 2009 and 2010, which failed to report foreign financial accounts in Germany and Israel and failed to report income earned on those accounts. Between 2005 and 2012, Khoubian jointly owned multiple accounts at Bank Leumi in Israel with his mother that held between $15 million and $20 million. Additionally, since at least 2005, Khoubian also owned a foreign account at Commerzbank AG in Germany. Despite his ownership interest in these accounts and a legal requirement to declare all offshore accounts containing $10,000 or more, Khoubian prepared false tax returns for tax years 2005 through 2011 that did not fully disclose his foreign accounts, nor report all the interest income earned on those accounts. Khoubian’s Bank Leumi accounts generated interest income in excess of $4 million between 2005 and 2010, none of which was reported to the Internal Revenue Service (IRS). The total tax loss associated with the Bank Leumi accounts is approximately $1.2 million.

Since at least 2009, Khoubian was aware of the IRS’s Offshore Voluntary Disclosure Program (OVDP).  The OVDP allowed U.S. taxpayers to voluntarily disclose unreported foreign accounts and pay a reduced penalty to resolve their civil liability for not declaring foreign accounts to U.S. authorities. During 2011 and 2012, Bank Leumi requested that Khoubian sign a Form W-9 for U.S. tax reporting purposes. In an August 13, 2012, recorded telephone conversation with a banker at Bank Leumi, Khoubian stated that the reason he did not want to sign a Form W-9, was "because you have to pay half of it."

In 2012 and 2014, Khoubian knowingly made multiple false statements to IRS special agents investigating his foreign accounts, including falsely stating that the Bank Leumi accounts were not in his name, that he did not own a bank account in Germany from 2005 to 2010, that he closed his German bank account and moved all of that money to the United States, and that none of the money in his German bank account was moved to Israel.

As part of his sentence, Khoubian was ordered to pay $612,310 in restitution to the IRS. Additionally, as part of his guilty plea, Khoubian paid a Foreign Bank and Financial Accounts (FBAR) penalty in the amount of $7,686,004 plus interest and penalties.

This case was prosecuted by Trial Attorneys Christopher S. Strauss and Ellen M. Quattrucci of the Justice Department’s Tax Division, with the assistance of Assistant United States Attorney Robert Conte of the U.S. Attorney’s Office for the Central District of California, and was investigated by the IRS-Criminal Investigation. 

          LOS ANGELES – A licensed acupuncturist pleaded guilty today to federal criminal charges and admitted fraudulently billing Amtrak’s health care plan for millions of dollars’ worth of acupuncture, massages and facials that either were medically unnecessary or were never provided.

          Guiqiong Xiao Gudmundsen, 52, a.k.a. “Kimi” Gudmundsen, of Anaheim Hills, pleaded guilty to one count of health care fraud and one count of money laundering.

          Gudmundsen owned Healthy Life Acupuncture Center, which operated in Riverside and in Los Angeles. From January 2008 until December 2015, Gudmundsen recruited Amtrak employees to visit Healthy Life and then, among other things, billed the Amtrak health care plan for acupuncture, which she knew wasn’t being provided, according to her plea agreement.

          Gudmundsen also admitted to billing the health plan for medically unnecessary services such as massages and facials, as well as for work-related injuries she knew the Amtrak plan did not cover. She also provided medical services to non-Amtrak health care plan participants and then billed the plan for it under the name of an actual Amtrak plan participant, the plea agreement states. Gudmundsen admitted that she regularly waived co-payments, co-insurance, and deductibles for Amtrak health care plan participants, something the plan did not permit.

          Gudmundsen also knowingly and routinely funneled her ill-gotten gains through bank accounts opened in the names of a shell company and her relatives, according to the plea agreement.

          The government estimates the total loss to the Amtrak health plan to be at least $3.8 million.

          United States District Judge Dolly M. Gee has scheduled a January 22 sentencing hearing, at which time Gudmundsen will face a statutory maximum sentence of 30 years in federal prison.

          This matter was investigated by Amtrak Office of Inspector General, IRS Criminal Investigation, and the U.S. Department of Labor, Employee Benefits Security Administration.

          This case is being prosecuted by Assistant United States Attorneys Scott D. Dubois and Jenna Williams of the General Crimes Section.

          SANTA ANA, California – Law enforcement has arrested six Orange County residents charged in an indictment alleging three defendants conspired to traffic more than two dozen firearms – including 12-gauge shotguns and AR-style rifles – while other defendants, including a convicted sex offender, illegally possessed firearms and ammunition.

          The 11-count indictment, unsealed today, charges seven defendants with multiple federal felonies, including conspiracy to sell firearm without a license, and selling firearms without a license. The arrested defendants are scheduled to make their initial court appearances this afternoon in United States District Court in Santa Ana.

          Over the course of the six-week investigation, law enforcement seized a total of 68 firearms – 30 of which were “ghost guns” or firearms that bore no serial numbers – more than 2,000 rounds of ammunition, and 1.3 pounds of methamphetamine.

          According to the indictment, between August 21 and September 18, the defendants illegally possessed and some conspired to illegally sell firearms such as a .40-caliber Glock pistol, a .243-caliber Savage Arms rifle, and a Mossberg 12-gauge shotgun, among other weapons, some of which bore no serial numbers.

          Pedro Javier Villalobos, 22, of Santa Ana, arranged to sell firearms to customers and eventually received a fee for brokering firearms sales, according to the indictment. The indictment further alleges that Villalobos enabled defendants Michael Rivera Delgado, 38, a.k.a. “Player,” of Anaheim, and Rosember Jiménez Jr., 29, a.k.a. “Junior,” of Santa Ana, and others to sell firearms to customers without being federally licensed.

          For example, on September 3, Villalobos allegedly agreed to sell firearms to a customer, who in fact was an undercover agent. The following day at Villalobos’s home, Jiménez allegedly sold the agent a Mossberg shotgun, a Spike’s Tactical rifle, and an AR-type rifle bearing no serial number, for $4,800. That same day, Villalobos accepted $300 from the agent for brokering the sale of the three firearms from Jiménez, the indictment alleges.

          In addition to the unlawful firearms dealing charges, the indictment alleges that other defendants, including Jiménez, were convicted felons in possession of firearms and ammunition. Jiménez’s criminal history includes convictions for unlawful sexual intercourse with a minor and aggravated assault on a firefighter or peace officer.

          The statutory maximum penalties for unlicensed firearms dealing and being a felon in possession of firearms or ammunition is 10 years in federal prison. A conviction on a conspiracy charge carries a statutory maximum sentence of five years in federal prison.

          An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

          This matter is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, and the Costa Mesa Police Department.

          This case is being prosecuted by Assistant United States Attorney Anne C. Gannon of the Santa Ana Branch Office.

          LOS ANGELES – A San Bernardino County tax preparer was sentenced this morning to 26 months in federal prison for filing fraudulent tax returns with the IRS as part of a scheme that illegally generated more than $1 million in refunds.

          Scott Douglas Cutting Sr., 70, of Apple Valley, was sentenced by United States District Judge George H. Wu, who also ordered Cutting to pay $1,392,765 in restitution to the IRS.

          After a three-day trial in April, a federal jury found Cutting guilty of six counts of aiding and assisting in the preparation of false and fraudulent tax returns.

          Cutting, who portrayed himself as a certified public accountant despite his CPA license expiring 30 years ago, prepared and filed fraudulent tax returns on behalf clients. Cutting had tax refunds – which typically were hundreds or thousands of dollars from each fraudulent tax return – directly deposited into his own bank accounts, often giving his clients nothing or only a small portion of the refund.

          Cutting filed tax returns on behalf of low- or no-income individuals that falsely claimed income or credits to create a tax refund. Cutting electronically filed the returns with the IRS, but he did not identify himself as the preparer of the tax returns. Cutting often filed tax returns for people when he had no authority to do so – including for dead people – using personal identifying information of individuals and their family members without their permission. He often hired “recruiters” to purchase taxpayers’ personal identifying information to use in his fraudulent tax returns.

          Between 2008 and 2016, Cutting prepared and filed approximately 477 false or fraudulent tax returns, and the IRS issued approximately $1,392,765 in refunds, according to the government’s sentencing memorandum.

          This case was investigated by IRS Criminal Investigation.

          This matter was prosecuted by Assistant United States Attorneys Veronica M.A. Alegría and Bryant Y. Yang of the International Narcotics, Money Laundering, and Racketeering Section.

          LOS ANGELES – A former Social Security Administration (SSA) employee pleaded guilty today to a federal criminal charge for stealing more than $176,000 in Social Security benefits designated for elderly and disabled beneficiaries.

          Rowena Isabel Lokeni, 36, of Garden Grove, pleaded guilty today to one count of wire fraud. Lokeni was hired as an SSA service representative in 2008 and worked in the administration’s field office in Fountain Valley. She resigned from SSA shortly after her September 6 arrest on a federal grand jury indictment in this matter.

          From her work cubicle, between April 2017 and August 2019, Lokeni accessed the SSA computer databases and queried the records of 10 Social Security beneficiaries, according to her plea agreement. Once she accessed the victims’ records, Lokeni fraudulently changed each victim’s direct deposit bank account and routing numbers to instead reflect her personal bank account’s routing and account numbers, the plea agreement states.

          Of the 10 victims whose Social Security benefits were affected by Lokeni’s fraud, eight victims were supposed to be receiving disabled adult children benefits because they were unmarried adults who had a disability that began prior to their 22nd birthday, court documents state. The ninth victim was supposed to be receiving disability insurance benefits, while the tenth victim was supposed to be receiving retirement insurance benefits, according to the plea agreement.

          Lokeni admitted to fraudulently obtaining a total of approximately $176,015 in Social Security payments.

          United States District Judge John F. Walter has scheduled a January 6, 2020 sentencing hearing, at which time Lokeni will face a statutory maximum sentence of 20 years in federal prison.

          This matter was investigated by the Social Security Administration – Office of the Inspector General.

          This case is being prosecuted by Special Assistant United States Attorney David H. Chao of the General Crimes Section.

          LOS ANGELES – A Southern California-based ophthalmology group, its former CEO and several of its physicians have paid the United States and California $6.65 million to settle False Claims Act allegations that they defrauded public health care programs by billing for unnecessary eye exams, improperly waiving Medicare co-payments, and violating other regulations, the Justice Department announced today.

          Retina Institute of California Medical Group (RIC), is a medical partnership of ophthalmologists who specialize in the treatment of retinal diseases. RIC operates in multiple locations in Los Angeles, Orange and Riverside counties. On October 2, the RIC and several other defendants paid the United States $6,353,410 and paid California $296,590 pursuant to a settlement agreement.

          The other defendants who participated in the settlement are:

• Dr. Tom S. Chang, of Pasadena;
• Tom S. Chang, M.D., Inc., a Pasadena-based company;
• Dr. Michael A. Samuel, of Arcadia;
• Dr. Michael J. Davis, also of Arcadia;
• Brett Braun, former CEO of Retina Institute of California Medical Group;
• California Eye and Ear Specialists, a Pasadena-based subsidiary of Trilogy Eye Medical Group Inc., a company for whom Chang and Samuel serve as senior executives; and
• San Gabriel Ambulatory Surgery Center LP, a San Gabriel-based company.

          Between January 2006 and August 2017, the defendants allegedly violated the False Claims Act by submitting bogus claims to Medicare and Medicaid/Medi-Cal, according to a settlement agreement signed in this case. Medicare reimburses physicians for examining patients, paying more money as the medical exams performed increase in complexity. RIC personnel allegedly improperly billed public health programs by misclassifying simpler exams as being more complex, using billing codes normally used for patients with severe or emergency conditions.

          RIC and the other defendants also allegedly waived Medicare co-payments and deductibles without proper documentation of patients’ financial hardship, which was intended to induce referrals. The defendants allegedly also billed Medicare and Medicaid for medical services that weren’t performed, were unnecessary, not documented in the medical record or were not in compliance with applicable rules and regulations.

          The allegations were made in a whistleblower lawsuit filed in United States District Court by Bobbette A. Smith and Susan C. Rogers, who formerly worked for RIC as administrators, under the qui tam – or whistleblower – provisions of the False Claims Act. These provisions permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The United States may intervene in the lawsuit, or, as in this case, the whistleblower may pursue the action. Smith and Rogers will receive a share of the settlement, but that amount has not yet been determined.

          The case, which was filed in May 2013 and unsealed in July 2016, was monitored by the United States Attorney’s Office, as well as the U.S. Department of Health and Human Services – Office of Inspector General.

          The claims settled are allegations only and the defendants did not admit liability.

          The lawsuit is captioned United States, et al., ex rel. Smith and Rogers v. Tom S. Chang, M.D., et al., No. 13-CV-3772-DMG (C.D.Cal.).

          LOS ANGELES – A Woodland Hills man pleaded guilty today to federal criminal charges in connection with a scheme where Chinese nationals fraudulently obtained student visas by hiring people with fake Chinese passports to take an English proficiency test on their behalf.

          Liu Cai, 24, pleaded guilty to two felony counts of using a false passport. United States District Judge John A. Kronstadt scheduled a February 13, 2020, sentencing hearing, at which time Cai will face a statutory maximum sentence of 20 years in federal prison.

          Cai is the lead defendant in a 26-count federal grand jury indictment returned in March, charging six defendants with conspiring to use false passports, using false passports, and aggravated identity theft, as part of the scheme to impersonate Chinese nationals who were required to take the Test of English as a Foreign Language (TOEFL) to obtain a student visa.

          According to his plea agreement, in March 2015 and October 2016, Cai knowingly and willfully used counterfeit passports of the People’s Republic of China, furnishing them to proctors of the TOEFL exam. Cai admitted that he took the TOEFL exams on behalf of two Chinese nationals who sought to enter and remain in the United States on student visas.

          Cai further admitted that he belonged to a network of U.S. citizens and permanent residents that were paid to impersonate TOEFL examinees. Cai impersonated a Chinese national on at least five occasions between March 2015 and October 2016, according to his plea agreement. Because of Cai’s conduct, college applicants fraudulently entered and remained in the United States on fraudulently obtained student visas, the plea agreement states.

          The United States requires foreign citizens who wish to enter the United States on a temporary basis to study at a college or university to first obtain an F-1 student visa. To obtain a student visa, foreign citizens must first apply to study at a school that has been authorized by the Student and Exchange Visitor Program (SEVP) to enroll foreign students. In the United States, SEVP-certified schools require foreign citizens whose first language is not English to certify proficiency in English by achieving a particular score on the TOEFL.

          When the foreign national goes to a TOEFL testing location, the test taker must present an original, non-expired, government-issued identification document recognized by their home country.

          All of Cai’s co-defendants – Quang Cao, 24, of San Francisco; Elric Zhang, 25, of Los Angeles; Mohan Zhang, 24, of Cerritos; Samantha Wang, 25, of Corona, and Tuan Tran, 33, of Taiwan – have pleaded guilty to criminal charges in this case and are scheduled to be sentenced in the coming months.

          This case was by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the State Department’s Diplomatic Security Service, and U.S. Citizenship and Immigration Service’s Fraud Detection National Security Section. The Educational Testing Service, which administers the TOEFL exam, has provided assistance during the investigation.

          This matter is being prosecuted by Assistant United States Attorney Gabriel J. Podesta of the General Crimes Section.

          LOS ANGELES – Edward Buck was indicted this afternoon by a federal grand jury on a series of narcotics distribution offenses, including providing methamphetamine to two men who died after being injected with the drug.

          Buck, a 65-year-old West Hollywood resident, was named in a five-count indictment that charges him with two counts of distributing methamphetamine resulting in death.

          The indictment alleges that Buck provided methamphetamine to Gemmel Moore, who overdosed on the drug and died on July 27, 2017, and Timothy Dean, who also suffered a fatal overdose in Buck’s apartment, on January 7, 2019.

          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.

          Buck also faces three counts of distributing methamphetamine to men in May 2018, December 2018 and last month. Each of these three charges carries a maximum statutory penalty of 20 years in federal prison. Buck's arraignment has been scheduled for Oct. 10 in United States District Court in downtown Los Angeles.

          The indictment alleges 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.

          “Buck exerted power over his victims, often targeting vulnerable individuals who were destitute, homeless, and/or struggled with drug addiction, in order to exploit the relative wealth and power imbalance between them,” the indictment alleges.

          An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty in court.

          Buck also faces charges, including operating a drug house, that were filed last month 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 – Ten members and associates of the South Los Angeles-based Rollin’ 30s Harlem Crips street gang were arrested today pursuant to six federal grand jury indictments that charge a total of 21 defendants with conspiring to traffic narcotics, such as crack cocaine that allegedly was sold at a minimart and in front of a public library.

          The defendants arrested today are expected to be arraigned this afternoon in United States District Court in downtown Los Angeles.

          The main indictment stemming from the investigation into the Rollin’ 30s charges 14 gang members and associates with conspiracy to manufacture and distribute crack cocaine in the territories they claim to control. Specifically, this indictment alleges that the lead defendant – gang leader Angelo Gabriel Reed, 39, a.k.a., “Maniac” and “Yacc,” of Inglewood – “cooked” crack cocaine in his kitchen and then sold it through a variety of methods. Reed allegedly distributed the drug outside a Los Angeles Public Library branch in Exposition Park and in a nearby park, the indictment alleges.

          Between May 2017 and April 2018, Reed allegedly oversaw a crew that sold drugs on the street, delivered drugs to other distributors and customers, and collected illicit narcotics proceeds on Reed’s behalf. During the course of the conspiracy, Reed allegedly was involved in supplying, cooking and distributing more than 280 grams of crack cocaine.

          One of the other indictments alleges that Rollin’ 30s members last year sold cocaine at an Exposition Park minimart that appeared closed, but was widely known as gang hangout where illegal narcotics were sold. After law enforcement performed two undercover buying operations at the minimart, a search warrant resulted in the seizure of a .40-caliber semi-automatic pistol, dozens of rounds of live ammunition, drug paraphernalia, and baggies of cocaine, according to the indictment.

          In addition to the 10 defendants arrested today, one defendant currently is incarcerated in a California state prison, while another is in Los Angeles County jail on unrelated charges. Authorities continue to search for nine defendants named in the indictments.

          If convicted on all counts, the defendants would face decades in federal prison, with some of them facing a mandatory minimum sentence of 10 years in federal prison for conspiracy to distribute more than 280 grams of crack cocaine.

          An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

          This matter was investigated by the Drug Enforcement Administration, the Los Angeles County Sheriff’s Department, and the Los Angeles Police Department as part of the High Intensity Drug Trafficking Area (HIDTA) program.

          This case is being prosecuted by Assistant United States Attorney Damaris Diaz of the Violent and Organized Crime Section.

          LOS ANGELES – Three men were named today in a federal grand jury indictment that alleges they distributed narcotics, including counterfeit pharmaceutical pills containing fentanyl that resulted in the overdose death of hip-hop artist Mac Miller.

          Cameron James Pettit, 28, of West Hollywood; Stephen Andrew Walter, 46, of Westwood; and Ryan Michael Reavis, 36, a former West Los Angeles resident who relocated to Lake Havasu, Arizona earlier this year, were charged in a three-count indictment.

          All three defendants are charged with conspiring to distribute controlled substances resulting in death and distribution of fentanyl resulting in death – each of which carries a mandatory minimum sentence of 20 years in federal prison and a potential sentence of life without parole. Walter alone is charged with being a felon in possession of ammunition, which, if he were to be convicted, would result in a sentence of up to 10 years in federal prison.

          According to court documents, the three defendants distributed narcotics to 26-year-old Malcolm James McCormick – who recorded and performed under the name Mac Miller – approximately two days before McCormick suffered a fatal drug overdose in Studio City on September 7, 2018. The Los Angeles County Medical Examiner-Coroner later determined that McCormick died of mixed drug toxicity involving fentanyl, cocaine and alcohol.

          According to the indictment, late on the night of September 4, Pettit agreed to supply McCormick with 10 “blues” – a street term for oxycodone pills – as well as cocaine and the sedative Xanax. But, instead of providing McCormick with genuine oxycodone when he made the delivery during the early morning hours of September 5, Pettit allegedly sold McCormick counterfeit oxycodone pills that contained fentanyl – a powerful synthetic opioid that is 50 times more potent than heroin. The indictment alleges that Pettit ordered the fentanyl-laced pills from Walter, and then Reavis delivered the narcotics to Pettit.

          Investigators believe that McCormick died after snorting the counterfeit oxycodone pills containing fentanyl and that those pills had been provided by Pettit, according to court documents. While another individual allegedly supplied McCormick with other drugs prior to his death, those narcotics did not contain fentanyl, according to court documents.

          Less than one month after McCormick’s death, Walter agreed to sell Pettit another 10 “blues,” according to the indictment, which alleges other drug deals between the two men over the course of 2019, with one as recent as August 30.

          The indictment further alleges that Reavis was involved in drug trafficking activities in June and quotes a text message he sent after realizing he was negotiating a narcotics transaction with an unknown person that reads, in part: “People have been dying from fake blues left and right, you better believe law enforcement is using informants and undercover to buy them on the street do [sic] they can start putting ppl in prison for life for selling fake pills.”

          “It has become increasingly common for us to see drug dealers peddling counterfeit pharmaceuticals made with fentanyl. As a consequence, fentanyl is now the number one cause of overdose deaths in the United States,” said United States Attorney Nick Hanna. “These defendants allegedly continued to sell narcotics after Mr. McCormick’s death with full knowledge of the risks their products posed to human life. We will continue to aggressively target drug dealers responsible for the spread of this dangerous chemical.”

          Special Agent in Charge William D. Bodner of the DEA’s Los Angeles Field Division remarked, “Counterfeit pharmaceutical pills are especially dangerous because users are unable to verify what they are ingesting. The tragic death of Mac Miller is a high-profile example of the tragedy that is occurring on the streets of America every day. Today’s indictment highlights the efforts of DEA agents, local law enforcement officers, and prosecutors who work tirelessly to bring dangerous drug dealers to justice.”

          Pettit, who was previously ordered detained after being charged in a criminal complaint with distributing narcotics to McCormick, is scheduled to be arraigned on the indictment on October 10.

          Walter was arrested on September 23 pursuant to a criminal complaint alleging conspiracy to distribution narcotics, and he was also ordered held without bond. Walter also is scheduled to be arraigned on the indictment on October 10.

          Reavis was taken into federal custody in Arizona on September 26 on charges of being a felon in possession of a firearm. He is currently in custody and is being transported to Los Angeles by the United States Marshals Service.

          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 ongoing investigation in this matter is being conducted by the High Intensity Drug Trafficking Area’s (HIDTA) Opioid Response Team, which operates under the direction of the DEA. The Los Angeles Police Department provided substantial assistance in this matter.

          This case is being prosecuted by Assistant United States Attorney Matthew J. Jacobs of the General Crimes Section.

          LOS ANGELES – A long-time con artist was sentenced today to 240 months in federal prison for running a multimillion-dollar real estate scam that conned elderly people out of their homes, gouging them with fraudulent threats of litigation and extorting monthly payments for illegal foreclosure and eviction delay.

          Michael “Mickey” Henschel, 70, of Van Nuys, was sentenced by United States District Judge Virginia A. Phillips. A restitution hearing in this matter has been scheduled for December 2.

          Henschel pleaded guilty on May 13 to one count of mail fraud after spending years filing fraudulent documents on homeowners’ properties, and then using the fraudulent filings and fraudulent litigation to steal money from victims, sometimes stealing homes outright, and other times extorting settlement payments in actual or threatened civil litigation.

          Henschel – who used various aliases, including “Frank Winston,” “Steve Lopez” and “Ron Berman” – and his co-conspirators deceived vulnerable homeowners – typically elderly people in financial distress, some of whom spoke limited English. Henschel tricked the homeowners into signing fraudulent deeds on their properties with false promises that the deeds would help homeowners protect properties from creditors or enable them to get equity out of the properties. Unbeknownst to his victims, the deeds described fake loans that the homeowners were supposedly guaranteeing for third parties, and in signing the deeds, they were pledging their houses as collateral for these fake loans. Henschel used the fraudulent deeds to steal homes and money from the victims.

          In total, the scheme generated more than $17 million in profits. Henschel’s fraudulent conduct also caused losses to mortgage lenders in connection with lawful foreclosure actions and to purchasers of foreclosed properties in depriving them of lawful possession to those properties.

          Henschel’s criminal conduct devastated his victims, leaving some of them penniless. Many other victims had to face financial insecurity – even homelessness – in their old age as they struggled to pay for basic necessities such as food and clothing. Several victims lost homes that their families had owned for generations.

          One victim, who spent her entire career teaching developmentally disabled students, purchased a home and spent decades paying down most of her mortgage, only to have Henschel and his co-conspirators fraudulently steal it from her.

          The real estate fraud scheme had two parts: one involving property theft and litigation extortion, and the other involving illegal foreclosure and eviction delay.

          In the property theft and litigation extortion part of the scheme, Henschel filed fraudulent documents on titles to homeowners’ properties and used these fraudulent filings to steal properties from some victims outright and to extort settlement payments from other victims in civil litigation. Henschel weaponized the state court litigation system against homeowners, using his specialized training and knowledge of the law (he attended law school but never was admitted to practice) to extort settlements from homeowners by dragging them through stressful lawsuits.

          “Assault by legal paperwork, unscrupulous litigation tactics, and low-ball settlement demands were all part of the scheme, as victims often found it cheaper to pay defendant than to fight him, and defendant intentionally arbitraged the high cost of state court civil litigation to extort settlement payments,” the government wrote in its sentencing memorandum.

          In the foreclosure rescue part of the scheme, Henschel and his co-conspirators used fraudulent filings to charge homeowners fees to delay foreclosure and eviction actions. Henschel and the others had homeowners sign fraudulent deeds that transferred interests to debtors in bankruptcy cases – but the bankruptcies were fraudulent and used solely as part of the fraudulent scheme, not as part of any genuine effort to restructure or eliminate debts.

          Many of the fraudulent bankruptcies were filed in the names of fictional people and entities, and some involved stolen identities. Henschel and his co-conspirators sent fake deeds and fraudulent bankruptcy petitions to trustees to stop foreclosure sales. They delayed evictions in a similar way, mainly by filing fraudulent documents in state court unlawful detainer actions and then sending bogus documents to various county sheriff’s offices.

          Henschel charged homeowners monthly fees for the illegal foreclosure- and eviction-delay services, collecting more than $7 million through this part of the scheme. The property theft portion of the scheme netted Henschel $10 million in ill-gotten gains.

          A total of seven defendants linked to Henschel’s Van Nuys-based companies have been convicted of crimes related to the scheme. Those defendants are scheduled to be sentenced later this year.

          The case against Henschel and the others are the result of an investigation by the Federal Bureau of Investigation, and the Federal Housing Finance Agency - Office of Inspector General. The United States Trustee’s Office for the Central District of California initially referred the matter for investigation and has provided substantial assistance. Also providing assistance during the investigation were the Alameda County District Attorney’s Office, the Los Angeles County Recorder’s Office, the Alameda County Recorder’s Office, and the San Diego County Recorder’s Office.

          This case was prosecuted by Assistant United States Attorneys Kerry L. Quinn and Eddie A. Jauregui of the Major Frauds Section. The forfeiture part of the case is being handled by Assistant United States Attorney Jonathan S. Galatzan of the Asset Forfeiture Section.

          LOS ANGELES – A Riverside man was sentenced today to 70 months in federal prison for defrauding hundreds of victims, mainly distressed homeowners who paid thousands of dollars after attending seminars that promoted a “Free and Clear” program pitched by the defendant and his salespeople.

          James Ignatius Diamond, 69, was sentenced by United States District Judge R. Gary Klausner.

          At the conclusion of a six-day trial in June, Diamond was found guilty by a jury of 15 counts of mail fraud affecting a financial institution and 15 counts of wire fraud affecting a financial institution.

          Between 2010 and 2013, Diamond sold fraudulent debt-elimination services to desperate victims whose finances had been ravaged by the Great Recession. Diamond owned and operated a number of businesses – including the Riverside-based Transmitting Assets Inc., Operation Safe Haven, Buyer Beware, and Unlimited Logistics Corp. – through which he fraudulently offered services that he claimed could wipe out the debts of homeowners behind on their mortgage payments and other debts.

          Diamond personally pitched the “Diamond Home Reclamation Method” to solicit victims with false promises that his methods would entirely eliminate their mortgages and allow people to own their homes “free and clear.”

          Relying on the false representations, victims paid substantial fees, including an upfront fee – typically $3,500, payable only in cash, money orders or cashier’s checks – periodic program fees, and inflated notary fees. After paying the upfront fee, victims were required to sign and notarize documents, which they were instructed to send to financial institutions and government agencies – documents prosecutors described in court documents as “fraudulent and nonsensical.”

          When victims of the scheme in 2011 began receiving mortgage default notices and lost their homes, Diamond launched another debt-elimination scam called the “EFT Program,” under which Diamond claimed to be able to eliminate victims’ debt with “EFT” checks. This scam required victims to pay Diamond 13 percent of the debt that was to be eliminated.

          Diamond knew that his methods did nothing to discharge debts. In fact, when FBI agents searched his business in 2013, they recovered hundreds of “rejection letters” from financial institutions indicating that documents submitted as part of the debt-elimination programs did nothing to help the victims. Diamond’s email accounts contained numerous complaints and refund requests from victims – all of which he ignored.

          Investigators have identified more than 500 victims who suffered losses of at least $1.6 million. Diamond spent victims’ money on luxury hotels, jewelry, alcoholic beverages, and living expenses.

          Previously in this case, a Diamond associate – Tricia Mae Gruber, 43, also of Riverside – pleaded guilty to conspiracy to commit mail fraud and admitted helping operate the scheme. Her sentencing hearing is scheduled for October 21.

          This case was investigated by the FBI.

          This matter was prosecuted by Assistant United States Attorneys Marina A. Torres of the International Narcotics, Money Laundering, and Racketeering Section and Kevin B. Reidy of the General Crimes Section.

          LOS ANGELES – Authorities this morning arrested five defendants charged in a federal grand jury indictment alleging they took part in a drug trafficking ring that imported pound quantities of cocaine and heroin from Mexico, then used modified BMW “trap cars” to distribute those drugs throughout the United States.

          The four-count indictment charges a total of seven defendants with conspiracy to distribute controlled substances, and alleges a series of acts between December 2017 and July 2018.

          In today’s takedown, law enforcement seized approximately 22 kilograms (48.5 pounds) of cocaine, 22 firearms, two luxury vehicles purchased with drug proceeds, 3 Rolex watches and equipment for making butane honey oil, which contains a much higher percentage of tetrahydrocannabinol (THC) than found in traditional marijuana products.

          The five defendants arrested today are expected to make their initial court appearance this afternoon in United States District Court in downtown Los Angeles.

          Joel Antonio Villegas, a.k.a. “Junior,” 31, of Downey, and William Ariel Moreno, 29, also of Downey, are accused of being the operation’s ringleaders who obtained kilogram quantities of heroin and cocaine from Mexico for U.S. customers. Villegas and Moreno were found in possession of cocaine and guns in their homes at the time of their arrests this morning. Villegas is an alleged drug distributer who obtains drugs from a Mexican supplier and distributes the narcotics from the Los Angeles area to customers throughout the United States, using both trap cars and commercial shipping companies.

          According to the indictment, Villegas directed co-conspirators to buy two 2005 BMW X5 automobiles so they could be outfitted with secret compartments to carry narcotics. Villegas allegedly also arranged for the shipment of two crates containing 55 pounds of marijuana and honey oil to Orlando, Florida. He also advised other members of the conspiracy that commercially shipping, rather than mailing, marijuana and honey oil “better ensured that law enforcement would not intercept the packages and seize the drugs,” the indictment alleges.

          The two BMWs belonging to the Villegas organization were stopped on the same day in April 2018 at the U.S.-Mexico border, where officers found hidden compartments inside their engine manifolds, containing multiple kilograms of cocaine and heroin, intended for distribution throughout the United States. Last year, law enforcement seized at least $71,000 in cash, along with pound quantities of cocaine and heroin in connection with this organization.

          In addition to the conspiracy charge, Villegas and another co-conspirator also are charged with possessing with intent to distribute 13.3 pounds of cocaine. Two other co-defendants have been charged with possessing with intent to distribute 11 pounds of cocaine.

          If convicted on all counts, the defendants would face a statutory maximum sentence of life in federal prison and mandatory minimum sentences of at least 10 years in federal prison.

          An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

          This matter is being investigated by the FBI, the Drug Enforcement Administration, IRS-Criminal Investigation, U.S. Customs and Border Protection, the California Highway Patrol, the Pasadena Police Department, the South Gate Police Department, and the Jacksonville Sheriff’s Office with the support of the Organized Crime Drug Enforcement Task Force (OCDETF).

          This case is being prosecuted by Assistant United States Attorneys A. Carley Palmer of the International Narcotics, Money Laundering, and Racketeering Section and Jonathan S. Galatzan of the Asset Forfeiture Section.