Central District of California
Press releases recorded for this federal judicial district.
Two L.A. County Crews Who Allegedly Used Darknet to Traffic Narcotics Face Federal Criminal Conspiracy ChargesRead the Press Release
LOS ANGELES – Members of two alleged Los Angeles County crime rings have been charged in separate federal criminal cases alleging they conspired to use the Darknet to illicitly and secretly sell methamphetamine and other illegal narcotics nationwide, including one shipment of heroin in a stuffed animal that led to the fatal overdose of a customer in Tennessee.
In a nine-count indictment returned last week, five members of the Los Angeles-based “Drugpharmacist” drug trafficking organization, named for the moniker it used on the Darknet marketplaces Wall Street Market and Dream, have been charged with, among other things, conspiracy to distribute methamphetamine, heroin, cocaine, and crack cocaine. The defendants, all of them from Lancaster, are:
- Jerrell Eugene Anderson, 28;
- Christopher Carion Van Holton, 31;
- Adan Sepulveda, 26;
- Kenneth Lashawn Hadley, 31; and
- Jackie Walter Burns, 20
All five defendants were arrested on a criminal complaint earlier this month and are out on bond. Their arraignments are expected in the coming weeks.
According to an affidavit filed with a criminal complaint in the case, the defendants sold controlled substances to Drugpharmacist customers via the Darknet, and distributed them inside stuffed animals through the United States Postal Service. One shipment of heroin on August 7, 2018 resulted in the fatal overdose of a victim in Knoxville, Tennessee. An investigation into the organization confirmed that the ring was using stash houses in the San Fernando Valley to package drugs for delivery to customers throughout the United States. If convicted on all counts, each defendant faces a statutory maximum sentence of life in federal prison.
In a separate case, three members of the Darknet vendor “Aeirla” have agreed to plead guilty to conspiracy to distribute controlled substances. The group conducted 2,289 sales of methamphetamine and cocaine as of November 28, 2018, according to an affidavit filed with the case’s criminal complaint. Undercover federal agents conducted 26 purchases of methamphetamine from Aeirla between March 2017 and December 2018, the affidavit states. The defendants charged are:
- Anh Pham, 49, of Hawaiian Gardens,
- Joseph Michael Gifford, 43, of La Crescenta; and
- Carlos Miguel Gallardo, 59, of Hawaiian Gardens
Pham allegedly sold pound quantities of methamphetamine on the Darknet while Gifford and Gallardo packaged them in toys, a beach ball, and boxes of Christmas cards and chocolates, and shipped them to customers nationwide, including to a customer in Pittsburgh who in reality was an undercover agent, court papers state. Pham and Gallardo are in custody while Gifford, who signed a plea agreement today, is free on bond. The statutory maximum sentence each defendant faces is life in federal prison. Gifford also faces a narcotics distribution charge in a separate criminal case brought by the United States Attorney’s Office for the Western District of Pennsylvania.
“Law enforcement continues to shine a spotlight on criminals who use the Darknet,” said United States Attorney Nick Hanna. “My office will continue to target drug peddlers who use increasingly sophisticated means in their misguided notion they can avoid detection.”
An indictment and a criminal complaint contain allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
The Aeirla matter is being investigated by the Federal Bureau of Investigation in Pittsburgh and Los Angeles as well as the Drug Enforcement Administration and the U.S. Postal Inspection Service. The Drugpharmacist case is being investigated by the U.S. Postal Inspection Service, the Federal Bureau of Investigation, and the Los Angeles Police Department.
The Aeirla case is being prosecuted by Assistant United States Attorney Christopher Kendall of the Organized Crime Drug Enforcement Task Force Section and the Drugpharmacist case is being prosecuted by Assistant United States Attorney Robyn Bacon of the Cyber & Intellectual Property Crimes Section.
Lawyer Michael Avenatti Arrested on Federal Bank Fraud and Wire Fraud ChargesRead the Press Release
LOS ANGELES – Attorney Michael Avenatti was arrested today pursuant to a criminal complaint alleging he embezzled a client’s money in order to pay his own expenses and debts — as well as those of his coffee business and law firm — and also defrauded a bank by using phony tax returns to obtain millions of dollars in loans.
Avenatti, 48, of Century City, was arrested today pursuant to a two-count felony complaint charging him with wire fraud and bank fraud. He also was arrested pursuant to a separate federal case filed in New York.
According to an affidavit filed with the criminal complaint in this case, Avenatti negotiated a settlement which called for $1.6 million in settlement money to be paid on January 10, 2018, but then gave the client a bogus settlement agreement with a false payment date of March 10, 2018. The affidavit states that Avenatti misappropriated his client’s settlement money and used it to pay expenses for his coffee business, Global Baristas US LLC, which operated Tully’s Coffee stores in California and Washington state, as well as for his own expenses. When the fake March 2018 deadline passed and the client asked where the money was, Avenatti continued to conceal that the payment had already been received, court documents said.
Avenatti also allegedly defrauded a bank in Mississippi by submitting to the lender false tax returns in order to obtain three loans totaling $4.1 million for his law firm and coffee business in 2014. According to the affidavit, Avenatti obtained the loans by submitting fabricated individual income tax returns (Forms 1040) for 2011, 2012, and 2013, reporting substantial income even though he had never filed any such returns with the Internal Revenue Service. The phony returns stated that he earned $4,562,881 in adjusted gross income in 2011, $5,423,099 in 2012, and $4,082,803 in 2013, according to the affidavit. Avenatti allegedly also claimed he paid $1.6 million in estimated tax payments to the IRS in 2012 and paid $1.25 million in 2013. In reality, Avenatti never filed personal income tax returns for 2011, 2012 and 2013 and did not make any estimated tax payments in 2012 and 2013. Instead of the millions of dollars he claimed to have paid in taxes, Avenatti still owed the IRS $850,438 in unpaid personal income tax plus interest and penalties for the tax years 2009 and 2010, court papers state. The affidavit also alleges that, as part of his loan applications, Avenatti also submitted a fictitious partnership tax return for his law firm.
“A lawyer has a basic duty not to steal from his client,” said United States Attorney Nick Hanna. “Mr. Avenatti is facing serious criminal charges alleging he misappropriated client trust funds for his personal use and he defrauded a bank by submitting phony tax returns in order to obtain millions of dollars in loans.”
“Professionals, including attorneys, who create elaborate schemes that have no purpose other than to mislead others and defraud both their clients and federally insured financial institutions, run the very high risk of prosecution,” said Special Agent in Charge Ryan Korner of IRS-Criminal Investigation. “The criminal complaint unsealed today shows a pattern of selfish behavior that paints Mr. Avenatti as a lawyer who only represents his own self interests.”
If convicted on both charges, Avenatti will face a statutory maximum sentence of 50 years in federal prison. Avenetti’s initial court appearance will be today in New York. He is expected to face the criminal charges in the California case in United States District Court in Santa Ana at a later date.
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.
This matter is being investigated by Internal Revenue Service-Criminal Investigation.
This case is being prosecuted by Assistant United States Attorneys Julian L. André of the Major Frauds Section and Brett A. Sagel of the Santa Ana Branch Office.
ComplaintSoCal Trio Indicted for Allegedly Conspiring to Sell 100 Pounds of Methamphetamine at Luxury Orange County HotelRead the Press Release
SANTA ANA, California – A federal grand jury has returned a four-count superseding indictment charging three men with conspiring to sell 100 pounds of methamphetamine at a luxury hotel in Huntington Beach.
The grand jury on Tuesday charged Rami Haddad, 38, of Costa Mesa, Steven Barragan, 37, of Montebello, and Ernest Tyrone Walton, Jr., 37, of Anaheim, with conspiracy to distribute 100 pounds of methamphetamine, and possession with intent to distribute 39.94 kilograms, or 88 pounds, of methamphetamine. Haddad has been charged with using a firearm in furtherance of a drug trafficking crime and now faces an additional charge of knowingly distributing 4.5 kilograms, or 9.9 pounds, of methamphetamine. The defendants’ arraignment on the indictment is scheduled for April 1 in Santa Ana.
According to an affidavit filed with a criminal complaint in the case, on January 16, Haddad agreed to sell 10 pounds of methamphetamine for more than $15,000 but first requested the buyer meet at his home. During the meeting at Haddad’s home, Haddad allegedly showed the buyer a .38-caliber revolver. Haddad later delivered the 10 pounds of methamphetamine in a black duffel bag to the buyer, who was staying at the Kimpton Shorebreak Huntington Beach Resort, court papers state.
On January 28, Haddad allegedly informed the buyer that he had ordered 100 pounds of methamphetamine through his supplier. A few days later, Haddad packaged methamphetamine in his garage, where he kept the .38 caliber revolver for protection, according to the affidavit. On February 4, law enforcement observed Haddad and Walton walking out of Haddad’s home carrying large black boxes, and loading the boxes into Walton’s car, court papers state. Haddad and Walton then drove separately to the Kimpton Shorebreak Huntington Beach Resort for the delivery and sale of the 100 pounds of methamphetamine, according to court documents. Haddad was arrested in the hotel lobby as he made his entrance, while Walton later was arrested nearby, court papers state.
After his arrest, Haddad admitted to picking up the shipment of methamphetamine a few days earlier with Barragan’s assistance, and discussing with Barragan the possibility of diluting the methamphetamine to make it appear larger than it was, the affidavit states. Haddad then admitted to packaging the narcotics into small plastic bags and putting them into boxes so they could be delivered to the buyer, court papers state. The narcotics seized in that arrest totaled 39.94 kilograms, or 88 pounds, of methamphetamine, according to the indictment.
If convicted on all charges, each defendant faces a statutory maximum sentence of life 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 case was investigated by the Federal Bureau of Investigation.
This matter is being prosecuted by Assistant United States Attorney Daniel S. Lim of the Santa Ana Branch Office.
Accountant Pleads Guilty to Wire Fraud Charge for Running Ponzi Scheme that Cheated Investors Out of More than $27.5 MillionRead the Press Release
LOS ANGELES – A certified public accountant pleaded guilty today to a federal wire fraud charge for running a Ponzi scheme that defrauded her victims, many of whom were clients of her accounting firm, out of tens of millions of dollars over a span of two decades.
Carol Ann Pedersen, 66, of Long Beach, entered her plea before United States District Judge Dolly M. Gee, who scheduled a July 10 sentencing hearing, where Pedersen will face a statutory maximum sentence of 20 years in federal prison.
According to her plea agreement, between 1996 and September 2017, Pedersen executed her scheme by serving as her victims’ unlicensed investment advisor – even though she only was licensed to be a CPA. Through her firm, Carol A. Pedersen, C.P.A., she solicited her accounting clients’ investments through two types of investment opportunities that she offered: “Time Deposit” and “Client Pool,” the plea agreement states. The victims were told that Time Deposit would invest in low-risk securities providing a fixed return on their money after a period of time while Client Pool would invest their money in the stock market through an investment pool Pedersen had established with other investors’ funds, court papers state. During the course of the scheme, Pedersen’s victims invested more than $40 million into these accounts and the total loss to the victims was at least $27,550,720.40, according to court documents.
Pedersen admitted in her plea agreement that after she took her victims’ money, she deposited the funds into her personal accounts, and then used that money to pay her credit card bills, establish trust accounts for her family, and purchase real estate. In an effort to avoid detection and in the classic hallmark of a Ponzi scheme, Pedersen used some of her victims’ money to make distribution payments to her other victims, and she falsely represented the payments as returns on their investments. Pedersen also admitted to avoiding detection by creating fraudulent documents, including false account statements and an online “virtual portfolio” that she falsely represented enabled her victims to track their investments’ progress, court papers state.
For example, on July 30, 2015, Pedersen wired $3 million from a purported “Client Pool” account to a personal account that she controlled, the plea agreement states.
This matter was investigated by the Federal Bureau of Investigation and the Los Angeles County Sheriff’s Department. The Securities and Exchange Commission today filed a civil complaint against Pedersen in connection with the fraudulent scheme.
This case is being prosecuted by Assistant United States Attorneys Julian Andre and Alexander Wyman of the Major Frauds Section.
U.S. Attorney’s Office Based in Los Angeles Collects over $317 Million in Civil and Criminal Actions During Fiscal Year 2018Read the Press Release
LOS ANGELES – United States Attorney Nicola T. Hanna announced today that the United States Attorney’s Office for the Central District of California collected over $317 million in criminal, civil and forfeiture actions in Fiscal Year 2018.
Included in the total amount of $317,453,521 collected during the fiscal year that ended on September 30, 2018 was more than $61.2 million of restitution and fines ordered in criminal cases. The majority of this money was owed to victims of federal crimes, and some of the money helps fund programs that support victim services. As part of its commitment to collecting restitution owed to victims, the United States Attorney’s Office has shown consistent annual increases in the amount of money collected in this area, and last year’s $61.2 million is more than double the amount recovered in fiscal year 2016.
Last year’s collections also include over $235 million worth of assets forfeited to the United States for crimes committed both here and abroad, including more than $100 million recovered as part of the ongoing 1MDB international kleptocracy investigation. Prosecutors in the Asset Forfeiture Section also collected millions of dollars – including cash, numerous high-end and collectible vehicles, and residential properties – from a parking lot operator who defrauded the Veterans Administration. Forfeited assets – money and the proceeds of property that will be sold – are deposited into the Department of Justice Asset Forfeiture Fund, and that money is used to compensate crime victims and fund a variety of law enforcement activities, including federal task forces and education initiatives.
The balance of the money collected during the preceding fiscal year – $21.2 million – was secured through civil enforcement matters in which prosecutors recovered federal funds lost primarily through fraud or other misconduct.
Additionally, the office’s Civil Division worked with other U.S. Attorney’s Offices and colleagues in Washington to collect an additional $162.2 million in civil cases that were pursued in conjunction with these other Justice Department components, a figure that includes a $65 million settlement with Prime Healthcare Services and its chief executive officer to resolve allegations of Medicare fraud.
“We are focused on securing restitution for crime victims, recovering taxpayer money obtained by fraud, and stripping criminals of their ill-gotten gains,” said United States Attorney Nick Hanna. “The hundreds of millions of dollars we recovered in 2018 stand as a tribute to the tenacity and hard work of our prosecutors and staff.”
The United States Attorney’s Office for the Central District of California is based in Los Angeles and has branch offices in Santa Ana and Riverside. Currently, approximately 275 Assistant United States Attorneys serve about 20 million people who reside in the counties of Los Angeles, Orange, Riverside, San Bernardino, Ventura, Santa Barbara and San Luis Obispo.
The lawyers in the Financial Litigation Section in the Civil Division, headed by Assistant United States Attorney Indira Cameron-Banks, collect restitution, fines, civil settlements, penalties and defaulted federal loans owed to victims of federal crimes and to the United States. These efforts include locating and securing debtors’ assets through investigation, discovery and enforcement actions.
The prosecutors in the Criminal Division’s Asset Forfeiture Section, led by Assistant United States Attorney Steven R. Welk, are responsible for handling all criminal and civil forfeiture matters. These attorneys work closely with federal investigating agencies and task forces, in this district and elsewhere, to deprive criminals and their organizations of the proceeds generated by their illicit activities and the property used to facilitate those crimes.
Australian Woman Convicted at Trial of Assault and Interference with Crew on Flight That Landed at Los Angeles International AirportRead the Press Release
LOS ANGELES – An Australian woman who assaulted a flight attendant during a United Airlines flight from Melbourne to Los Angeles International Airport earlier this year has been found guilty of federal charges.
Adau Akui Atem Mornyang, 24, of Victoria, Australia, was convicted on Thursday in relation to a January 21 incident in which she appeared to be intoxicated and was verbally and physically abusive to personnel and other passengers during the flight. The jury found Mornyang guilty of a felony charge of interference with a flight crew and a misdemeanor assault count.
According to the evidence presented at trial, several hours into the flight, passengers approached a flight attendant to complain about Mornyang’s disruptive behavior, which included flailing her arms and yelling obscenities and racial slurs. When the flight attendant approached to assess the situation, Mornyang began to shout at the flight attendant and then slapped him across his face. The flight attendant attempted to restrain Mornyang until federal air marshals could assist. The federal air marshals were forced to stay with Mornyang in the rear galley of the plane for the remainder of the flight.
Mornyang is scheduled to be sentenced on June 24 by United States District Judge Cormac J. Carney. As a result of the guilty verdicts returned on March 14, Mornyang faces a statutory maximum sentence of 21 years in federal prison.
This case was investigated by the FBI, which received assistance from the Federal Air Marshals and the Los Angeles Airport Police Department.
The case against Mornyang is being prosecuted Assistant United States Attorneys MiRi Song and Kevin Reidy of the General Crimes Section.
Hesperia Man Who Allegedly Brought Rifle into Victorville Restaurant after Being Denied Alcohol Indicted on Firearms and Drug ChargesRead the Press Release
LOS ANGELES – A convicted felon who allegedly brought an assault rifle into a Victorville restaurant after employees refused to serve him an alcoholic drink has been indicted on federal firearms and methamphetamine charges.
Francisco Alvarado Felix, 32, of Hesperia, pleaded not guilty today to the two-count indictment in United States District Court. An August 20 trial date was scheduled.
A superseding indictment, which was returned by a federal grand jury on March 6, adds one felony charge of possession with intent to distribute methamphetamine. Felix initially was indicted in January on one count of being a felon in possession of a firearm and ammunition.
According to the indictment and a criminal complaint previously filed in this case, at around 1:00 a.m. on December 29, Felix visited a BJ’s Restaurant and Brewhouse in Victorville with his girlfriend. He attempted to order an alcoholic beverage, but BJ’s employees declined to serve him because he did not have proper identification. When restaurant employees later saw Felix sipping from his girlfriend’s alcoholic drink, the manager warned Felix he was not allowed to drink alcohol without identification and he would be forced to leave the restaurant if he did it again.
Felix left the restaurant and shortly returned. When the manager opened the doors that had been locked because of the late hour, he saw Felix remove a black rifle from under a blanket, court documents allege. Fearing for his life, the manager ran out of the restaurant after seeing Felix brandish the rifle. Felix allegedly tried to follow the manager out the lobby door, but the manager slammed the door on the rifle and grabbed the weapon. While the two men struggled for control of the rifle, a round was discharged into the ground just in front of the restaurant. Felix then pushed the manager to the ground and fled the scene in a dark-colored SUV, leaving his girlfriend behind to be interviewed by law enforcement officials, according to the affidavit in support of the criminal complaint.
The following morning, San Bernardino County Sheriff’s deputies executed a search warrant at Felix’s residence, recovering approximately 37 grams of methamphetamine packaged in two separate baggies. Officers also found in Felix’s Lincoln Navigator SUV a black Smith & Wesson model M&P – an AR-15-type rifle which had a 30-round magazine filled to capacity and one round in the chamber.
After his arrest, Felix admitted that he was upset at being denied an alcoholic beverage and went back out to his car to retrieve his identification, according to the affidavit. He also admitted to grabbing the rifle for an unknown reason and claimed he simply wanted to scare the restaurant manager, the affidavit states.
The felon-in-possession charge in the indictment alleges that Felix was previously convicted in San Bernardino County Superior Court for felony DUI and three felony possession with intent to sell methamphetamine charges.
If convicted on both charges in the superseding indictment, Felix would face a statutory maximum sentence of 50 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 case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the San Bernardino County Sheriff’s Department.
This matter is being prosecuted by Assistant United States Attorney Jerry Yang of the Riverside Branch Office.
Two Owners of West L.A. Pharmacy Who Made Millions Illegally Distributing Prescription Drugs Sentenced to over a Decade in PrisonRead the Press Release
LOS ANGELES – Two brothers who owned a West Los Angeles pharmacy and were convicted of illegally selling prescription opioids and other narcotics to black market customers across the United States were sentenced late Wednesday, with each man being ordered to serve 121 months in federal prison.
Berry Kabov, 48, and his brother Dalibor “Dabo” Kabov, 35, both residents of Brentwood, were sentenced by United States District Judge Dolly M. Gee. The Kabov brothers operated Global Compounding Pharmacy, a pharmacy that was located in West Los Angeles.
Following a three-week jury trial in early 2017, the brothers were convicted of illegally selling the opioid narcotics oxycodone, hydromorphone and hydrocodone. The wide-ranging conspiracy, which also illegally imported anabolic steroids, resulted in the Kabov brothers earning more than $3 million and cheating the Internal Revenue Service by failing to report $1.5 million on their federal tax returns.
“It is disturbing that both defendants claim to have done nothing wrong. That is a mirage. There was overwhelming evidence of guilt,” Judge Gee said at Wednesday’s hearing, adding that the Kabov brothers showed “no remorse” for their crimes.
The Kabov brothers were found guilty of conspiracy to distribute narcotics, distribution of oxycodone, conspiracy to import controlled drugs, importation of anabolic steroids, money laundering and subscribing to false tax returns.
“In the midst of a national opioid epidemic, these defendants used a seemingly legitimate pharmacy as a front to flood the black market with dangerous opioids for their own personal profit,” said United States Attorney Nick Hanna. “The lengthy sentences imposed should send a resounding message that medical and pharmacy professionals who seek to profit from the spread of opiate addiction will be met with severe punishment.”
“Our nation is facing what is arguably the worst drug crisis in American history, in large part due to the ravenous greed of illicit prescription drug traffickers like the Kabov brothers,” said DEA Special Agent in Charge David J. Downing. “Their sentences should serve as a warning to others that would defraud and exploit the public. The DEA and its law enforcement partners will not tolerate creative rackets that profit from the opioid epidemic.”
Prosecutors argued in court documents that the Kabovs orchestrated a “years-long scheme to exploit the nation’s epidemic-level addiction to powerful prescription opioids,” and that the brothers “rose from mail-order drug dealers – sending drug parcels to Ohio for cash – to owners of a Los Angeles pharmacy that sold millions of dollars of oxycodone, hydromorphone, and hydrocodone on the black market.”
The Kabov brothers used Global Compounding to sell bulk quantities of oxycodone to customers across the country. During the investigation, authorities seized shipments containing thousands of oxycodone pills sent by the Kabov brothers to customers in and around Columbus, Ohio. These customers in turn made cash deposits into Kabov-controlled bank accounts or simply shipped bulk cash to the brothers in Southern California.
The evidence also included recorded calls between Berry Kabov and a cooperating informant, during which Berry Kabov described oxycodone pills as “gold” selling for as much as “50 bucks a pill” in areas like New York. Berry Kabov offered to ship as many as 4,000 oxycodone pills per week to the informant, bragging that “we have a thing that we can move easy.”
After drug wholesalers cut off Global Compounding, the Kabovs began manufacturing their own opioid pills after obtaining a $20,000 pill press from China and acquiring enough bulk powder to make 100,000 maximum-strength pills. “In total, from the wholesale orders and on-site manufacturing, the Kabovs disseminated over 300,000 pills of opiates to the black market during the conspiracy, which accounts only for what they sold after opening Global Compounding,” prosecutors wrote in their sentencing brief.
To conceal the black market drug sales that brought them approximately $3 million, the Kabovs conspired with a doctor to create fraudulent prescriptions in the names of identity theft victims. The Kabovs also reported false information to California authorities making it appear that drugs had been dispensed to those identity theft victims. Prosecutors said in court documents that planting that fraudulent information “ma[de] the victims falsely appear to be narcotic addicts,” thus putting them at risk of being denied necessary treatment from a legitimate physician checking their prescription histories. Global Compounding also failed to report sales of 98,000 pills of opiates to California authorities who track prescription drug sales.
As part of the scheme, the brothers also used the names of other identity theft victims – members of a longshoremen labor union’s health insurance plan – to submit fraudulent claims that generated another $2.6 million from the plan, prosecutors said in court papers. In October 2017, the owner of a Long Beach “medi-spa” involved in the fraud scheme, Erica Carey, pleaded guilty to a federal wire fraud charge and admitted conspiring with the Kabovs in exchange for more than $300,000 in kickbacks.
In addition to the charges related to oxycodone, the brothers were found guilty of illegally importing anabolic steroids purchased from a wholesale drug distributor located in Hubei, China. The brothers used the pharmacy to illegally order bulk quantities of testosterone, oxandrolone and nandrolone. Those drugs were shipped in parcels that were falsely labeled to make the drugs appear to be industrial powders.
On federal tax returns, the Kabovs understated their income by approximately $1.5 million. They falsely claimed to have suffered net losses in 2011 and 2012, while they were flying in private jets, staying in penthouse suites, and purchasing new luxury cars, including a $100,000 Corvette.
In addition to the prison sentences, Judge Gee ordered the Kabovs to pay $350,834 in restitution to the Internal Revenue Service, with each brother being ordered to pay just over $175,000.
Global Compounding was found guilty of 17 counts including drug trafficking, drug importation, and tax fraud. Judge Gee sentenced the now-defunct pharmacy to a one-year term of probation.
The investigation into the Kabov brothers and Global Compounding was conducted by the Drug Enforcement Administration, IRS Criminal Investigation, the United States Postal Inspection Service, the Los Angeles Police Department, and the California Board of Pharmacy.
The case is being prosecuted by Assistant United States Attorney Benjamin R. Barron of the Organized Crime Drug Enforcement Task Force, and Assistant United States Attorney Matthew O’Brien of the Environmental and Community Safety Crimes Section.
South L.A. Man Sentenced to More than 10 Years in Federal Prison for Armed Robbery of Undercover Secret Service AgentRead the Press Release
LOS ANGELES – A South Los Angeles man was sentenced today to 121 months in federal prison for charges related to the armed robbery of an undercover United States Secret Service agent who was conducting an investigation into the trafficking of counterfeit money.
Tyre Jordan Simmons, a.k.a., “Reckless,” 23, was sentenced by United States District Judge John A. Kronstadt.
Simmons pleaded guilty in September to robbery, assault with a deadly weapon on a federal officer and using a firearm in furtherance of a crime of violence in relation to the March 26, 2018 incident.
According to court documents, Simmons arranged to meet with the undercover federal agent, who was posing as a criminal who wanted to purchase counterfeit U.S. currency. But, instead of conducting a deal for bogus money, Simmons planned to rob the agent of genuine currency that Simmons expected him to bring to the illicit deal.
During the incident, Simmons brought a duffel bag filled with clothes to simulate the appearance of counterfeit money and got into the front passenger seat of the agent’s car. When Simmons demanded to see the genuine currency, the agent retrieved $4,500 from the trunk and got back into the car, at which point Simmons pulled a loaded 9mm handgun from his bag, pointed it at the agent’s head and demanded the cash and the car keys. As Simmons was getting out of the car, other agents arrived on scene and knocked the gun and money from Simmons’s hands. Simmons escaped into the surrounding neighborhood, but he was arrested three days later.
Simmons’s co-defendant in the case – Richard Taron Henderson, a.k.a. “Profit,” 23, also of South Los Angeles – last month was sentenced to 90 months in federal prison after he pleaded guilty to selling counterfeit money, conspiracy, robbery, assault with a deadly weapon on a federal officer, and using a firearm in furtherance of a crime of violence.
This investigation was conducted by the United States Secret Service.
This matter was prosecuted by Assistant United States Attorney Khaldoun Shobaki of the Cyber and Intellectual Property Crimes Section.
Federal Grand Jury Indicts Long Beach Man on Four Felony Offenses Related to Aliso Viejo Spa Bombing that Killed His Ex-GirlfriendRead the Press Release
SANTA ANA, California – A federal grand jury today issued a four-count indictment against a Long Beach man for his role in the May 15, 2018 bombing of the Magyar Kozmetica spa in Aliso Viejo that killed the man’s ex-girlfriend and seriously injured two other people.
Stephen William Beal, 59, who was arrested earlier this month pursuant to a criminal complaint, was charged with four felonies:
- use of a weapon of mass destruction resulting in death,
- malicious destruction of a building resulting in death,
- use of a destructive device in relation to a crime of violence, and
- possession of an unregistered destructive device.
Beal, who is currently being held without bond in federal custody, is scheduled to be arraigned on the indictment on March 25.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
The charges of use a weapon of mass destruction resulting in death and malicious destruction of a building resulting in death each carry a potential sentence of life without parole in federal prison. The charge of use of a destructive device in relation to a crime of violence carries an additional consecutive penalty of 30 years in federal prison. The charge of possession of an unregistered destructive device carries a statutory maximum penalty of 10 years in prison.
This matter is being investigated by the FBI’s Joint Terrorism Task Force, which includes special agents with the FBI and deputies with the Orange County Sheriff’s Department. Task Force members who participated in the investigation included IRS Criminal Investigation; the Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; the Los Angeles Police Department; the Long Beach Police Department; the Irvine Police Department; the Anaheim Police Department; and the Orange County Fire Authority.
The case against Beal is being prosecuted by Assistant United States Attorneys Mark Takla and Annamartine Salick of the Terrorism and Export Crimes Section.
Ringleader of ‘Palm Tree Bandits’ that Committed Nine Armed Bank Robberies in Six Months Sentenced to More than 32 Years in PrisonRead the Press Release
LOS ANGELES – A Las Vegas, Nevada man who led the “Palm Tree Bandits” armed robbery crew that victimized a series of bank branches in Los Angeles and Kern counties in 2016, netting more than $85,000 in stolen money, has been sentenced to 387 months in federal prison.
Gary Lamar Henry, a.k.a. “G-Thing,” 38, was given the 32-year, 4-month term on Monday by United States District Judge Robert H. Whaley.
After a six-day trial in May 2018, Henry was found guilty of his role in bank robberies that occurred in Brentwood, Santa Monica, San Marino, Arcadia, South El Monte, Bakersfield, Stevenson Ranch and Hacienda Heights. The jury found Henry guilty of 11 felonies: one count of conspiracy to commit armed bank robbery, seven counts of bank robbery and three counts of using a firearm in furtherance of a crime of violence.
Between April 14, 2016 and October 7, 2016, Henry contacted his co-conspirators, organized the crews, planned the robberies, and gave his co-conspirators the guns for the robberies, according to the evidence presented at trial. Henry watched outside the bank branches while he sent his armed co-conspirators inside to rob them. On some occasions, the co-conspirators pointed the firearms at bank employees and customers. Though no bank employees or customers suffered physical injuries during the robberies, Henry’s actions placed innocent lives in danger and inflicted considerable emotional trauma on the dozens of victims present during the robberies, according to court documents. In total, the robberies netted Henry and his co-conspirators $85,354, according to the government’s sentencing memorandum.
All of Henry’s co-defendants in the case already have been sentenced with three of them receiving prison terms in excess of 12 years.
This case was investigated by the Federal Bureau of Investigation and the Los Angeles County Sheriff’s Department.
This matter is being prosecuted by Assistant United States Attorney Jeffrey M. Chemerinsky and Joseph D. Axelrad of the Violent and Organized Crime Section.
Mizrahi-Tefahot Bank LTD. Admits Its Employees Helped U.S.Taxpayers Conceal Income and AssetsRead the Press Release
Mizrahi-Tefahot Bank Ltd., (Mizrahi-Tefahot) and its subsidiaries, United Mizrahi Bank (Switzerland) Ltd. (UMBS) and Mizrahi Tefahot Trust Company Ltd. (Mizrahi Trust Company), entered into a deferred prosecution agreement (DPA) with the Department of Justice filed today in the U.S. District Court for the Central District of California, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Department of Justice’s Tax Division, First Assistant United States Attorney Tracy L. Wilkison, and Chief Don Fort for Internal Revenue Service-Criminal Investigation. As part of the agreement, Mizrahi-Tefahot will pay $195 million to the United States.
Mizrahi-Tefahot is one of Israel’s largest banks, with more than 4,000 employees, and is publicly traded on the Tel-Aviv Stock Exchange. During the relevant period of criminal activity, Mizrahi-Tefahot had branches in Los Angeles, California, the Cayman Islands, and London, England. In 2014, the Cayman Islands branch surrendered its license and was closed. UMBS, a subsidiary of Mizrahi-Tefahot, had one branch in Zurich, Switzerland. Mizrahi Trust Company, a fully owned subsidiary of Mizrahi-Tefahot, operated under the regulatory authority of the Bank of Israel. Collectively, Mizrahi-Tefahot, UMBS, and Mizrahi Trust Company provided private banking, wealth management, and financial services to high-net-worth individuals and entities around the world, including U.S. citizens, resident aliens and permanent residents.
“Mizrahi-Tefahot’s admission of guilt and agreement with the United States to pay significant penalties and pay over the fees earned from knowingly assisting tax evading Americans reflects the continuing efforts of the Tax Division to end the criminal role of international financial institutions in perpetuating offshore tax fraud,” said Principal Deputy Assistant Attorney General Zuckerman. “A financial institution is not a faceless entity, but is the embodiment of the acts of its bankers, relationship managers and all employees. When a bank’s employees, at any level, facilitate U.S. tax fraud, the bank facilitates tax fraud and will be held responsible.”
“For over a decade, this Israeli bank, through its employees, engaged in conduct designed to hide its clients’ funds so they could avoid paying U.S. income taxes,” said First Assistant United States Attorney Tracy L. Wilkison, “Mizrahi-Tefahot solicited customers in Los Angeles and other U.S. cities to open offshore accounts with the hope they would never be linked to the American clients. As a result of this criminal conduct, the bank will surrender fees it earned, repay the United States for lost tax revenue, and pay a substantial fine.”
“Today’s announcement sends a clear message that banks, who promote the use of offshore tax schemes against the United States, will be held accountable and face substantial fines and penalties,” said Don Fort, Chief, IRS-Criminal Investigation. “Any financial institution – no matter where it operates – will be held accountable if it helps U.S. residents dodge their tax responsibilities. This agreement with Mizrahi-Tefahot is the latest notice to American taxpayers, who might flout the law, that we can and will uncover your hidden assets.”
In the DPA and related court documents, Mizrahi-Tefahot admitted that from 2002 until 2012 the actions of its bankers, relationship managers, and other employees defrauded the United States and specifically the Internal Revenue Service (IRS) with respect to taxes by conspiring with U.S. taxpayer-customers and others. Mizrahi-Tefahot employees’ acts of opening and maintaining bank accounts in Israel and elsewhere around the world and violating Mizrahi-Tefahot’s Qualified Intermediary Agreement (QI Agreement) with the IRS enabled U.S. taxpayers to hide income and assets from the IRS.
According to the filed statement of facts and the DPA, these employees took steps to assist U.S. customers in concealing their ownership and control of assets and funds held at Mizrahi-Tefahot, Mizrahi Trust Company and UMBS, which enabled those U.S. customer-taxpayers to evade their U.S. tax obligations, including:
- Assisting and referring U.S. customers to professionals to open and maintain accounts at Mizrahi-Tefahot and UMBS in the names of pseudonyms, code names, Mizrahi Trust, and foreign nominee entities in offshore locations, such as St. Kitts and Nevis (Nevis), Liberia, Turks & Caicos, and the British Virgin Islands (BVI), and thereby enabling those U.S. taxpayers to conceal their beneficial ownership in the accounts and maintain undeclared accounts;
- Opening customer accounts at Mizrahi-Tefahot and UMBS for known U.S. customers using non-U.S. forms of identification, and failing to maintain copies of required identification and account opening documents;
- Opening and maintaining foreign nominee bank accounts for certain U.S. clients holding U.S. securities, enabling those U.S. taxpayers to evade U.S reporting requirements on securities’ earnings in violation of Mizrahi-Tefahot’s QI Agreement with the IRS;
- Entering into “hold mail” agreements with U.S. customers whereby Mizrahi-Tefahot and UMBS employees held bank statements and other account-related mail in their offices in Israel and Switzerland, and by doing so enabling documents reflecting the existence of the offshore accounts to remain outside the U.S.;
- Until 2008, providing U.S. customers at Mizrahi-Tefahot’s Los Angeles branch use of their funds held in offshore Mizrahi-Tefahot and UMBS accounts (pledge accounts) through back-to-back loans, while excluding any record of the offshore pledge account at its Los Angeles branch to take advantage of Israeli and Swiss privacy laws and prevent disclosure of the funds to U.S tax authorities;
- Failing to adhere to the requirements of Mizrahi-Tefahot’s QI Agreement by (i) permitting U.S. customers who refused to provide the bank with the proper IRS Forms W-8BEN and/or W-9 to continue trading in accounts holding U.S. securities, (ii) transferring assets to foreign entity accounts controlled by U.S. customers to avoid the proper QI reporting requirements, and (iii) failing to timely address compliance deficiencies in U.S. customer accounts holding U.S. securities; and
- Until 2008, periodically sending “Roving Representatives,” to the United States to solicit new customers and to meet with existing U.S. customers in Los Angeles, California, New York, and other locations in the U.S. for the purposes of opening accounts and surreptitiously reviewing and managing existing customers’ offshore accounts.
According to the terms of the DPA, Mizrahi-Tefahot, UMBS, and Mizrahi Trust Company will cooperate fully, subject to applicable laws and regulations, with the United States, the IRS, and other U.S. authorities. The DPA provides that Mizrahi-Tefahot will ensure that all of its overseas branches and other companies under its control that provide financial services to customers covered by the Foreign Account Tax Compliance Act, 26 U.S.C. §§ 1471-1474 (FATCA), will continue to implement and maintain an effective program of internal controls with respect to compliance with FATCA in their affiliates and subsidiaries. The DPA also requires Mizrahi-Tefahot and its subsidiaries affirmatively to disclose certain material information it may later uncover regarding U.S.-related accounts, as well as to disclose certain information consistent with the Department’s Swiss Bank Program with respect to accounts closed between Jan. 1, 2009, and October 2017. Under the DPA, prosecution against the bank for conspiracy will be deferred for an initial period of two years to allow Mizrahi-Tefahot, UMBS, and Mizrahi Trust Company to comply with the DPA’s terms.
The $195 million payment consists of: 1) restitution in the amount of $53 million, representing the approximate unpaid pecuniary loss to the United States as a result of the criminal conduct; 2) disgorgement in the amount of $24 million, representing the approximate gross fees paid to the bank by U.S. taxpayers with undeclared accounts at the bank from 2002 through 2012; and 3) a fine of $118 million.
This agreement marks the second time an Israeli bank has admitted to similar criminal conduct. In December 2014, the Bank Leumi Group entered into a DPA with the Department of Justice admitting that it conspired to aid and assist U.S. taxpayers to prepare and present false tax returns to the IRS by hiding income and assets in offshore bank accounts in Israel and elsewhere around the world.
Principal Deputy Assistant Attorney General Zuckerman, First Assistant United States Attorney Wilkison and Chief Fort commended special agents of IRS-Criminal Investigation, who investigated this case, and Western Criminal Enforcement Section Chief Larry J. Wszalek and Trial Attorneys Melissa S. Grinberg and Lisa L. Bellamy of the Tax Division, who prosecuted this case. Principal Deputy Assistant Attorney General Zuckerman also thanked the United States Attorney’s Office for the Central District of California for their substantial assistance.
5 Arrested in Scheme that Hired People to Take English Proficiency Exam on Behalf of Chinese Nationals Seeking Student VisasRead the Press Release
LOS ANGELES – Federal authorities this morning arrested five defendants linked to a scheme that helped Chinese nationals obtain student visas by hiring individuals who used fake Chinese passports to take an English proficiency test for the foreign students.
The arrests were made pursuant to a 26-count indictment returned on Friday by a federal grand jury. The indictment charges the 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.
The five defendants were taken into custody this morning without incident. They are:
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Liu Cai, 23, of Woodland Hills, who allegedly facilitated the scheme, took at least five TOEFL exams himself and is residing in the United States on a student visa;
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Quang Cao, 24, of San Francisco, who allegedly took at least four TOEFL exams with false identification, and who was arrested today in Stockton, California;
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Elric Zhang, 24, of Los Angeles, who allegedly took at least five TOEFL exams as part of the scheme;
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Mohan Zhang, 24, of Cerritos, who allegedly took at least two TOEFL exams under the names of foreign nationals; and
- Samantha Wang, 24, of Corona, who allegedly took at least two TOEFL exams.
The four Southern California defendants are expected to be arraigned on the indictment this afternoon in United States District Court in downtown Los Angeles. Cao is expected to make an initial appearance this afternoon in the Eastern District of California.
The sixth defendant in the case – Tuan Tran, 33, who allegedly took at least one TOEFL exam with a false identification document – is believed to be currently residing in Taiwan.
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, many 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. According to the indictment, all six defendants used counterfeit People’s Republic of China passports to impersonate 19 different Chinese nationals at various TOEFL testing locations in and around Los Angeles.
The indictment further alleges that Cai paid for and registered 14 Chinese nationals for TOEFL exams over a one-year period in 2015 and 2016. Following the tests, Cai allegedly paid three co-defendants approximately $400 per test from his PayPal and Venmo accounts.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
The conspiracy count in the indictment carries a statutory maximum penalty of five years in federal prison. The charge of using a false passport carries a maximum sentence of 10 years. Aggravated identity theft carries a mandatory consecutive two-year sentence.
This case is being investigated 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 Special Assistant United States Attorney Kyle J. Ryan of the General Crimes section.
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Former West Covina Resident Pleads Guilty to Advertising Pornographic Images of Children on Russian Photo-Sharing WebsiteRead the Press Release
LOS ANGELES – A former West Covina resident pleaded guilty today to knowingly creating and publishing an advertisement that sought to exchange sexually-explicit images of children on a Russian photo-sharing website frequently used to trade child pornography.
Christopher Clay Roman-Tuttle, 38, now of Spokane, Washington, who told the court he now goes by the name Christopher Clay Tuttle, faces a 15-year mandatory minimum prison sentence and a statutory maximum sentence of 30 years’ imprisonment for his guilty plea to one felony count of advertising child pornography. United States District Judge Percy Anderson scheduled a May 20 sentencing hearing.
According to Roman-Tuttle’s plea agreement, in March 2015 he created an account with a Russian photo-sharing website and used this account to knowingly publish an advertisement seeking to receive, exchange, and distribute child pornography. Roman-Tuttle admitted to posting two photo albums: one that featured non-pornographic images of a minor known to him, and one password-protected album that contained pornographic images of unknown child victims. Roman-Tuttle advertised these images by posting a statement, which read, in part, “preteens and tween’s [sic] in diapers is cool too. I’d love to meet up with a parent that wants to share their daughter (of course id make it worth their w[h]ile).”
In response to Roman-Tuttle’s advertisement, he received numerous emails over the course of two days from dozens of individuals seeking to exchange child pornography with him, the plea agreement states. Roman-Tuttle also admitted to sending and receiving images and videos of child pornography to many of these individuals, at times requesting child pornography videos depicting girls between 5 and 8 years old. In other emails, Roman-Tuttle described his desire to sexually abuse children, including the minor known to him, whom he admitted to having sexually abused in the past, according to his plea agreement. Roman-Tuttle also admitted to knowingly possessing more than 9,000 images and 330 videos of child pornography on his computer and on other devices, including images depicting the sexual abuse and exploitation of infants or toddlers. He also admitted to knowingly possessing a sexually explicit image of the minor known to him.
As part of his plea agreement, Roman-Tuttle will have to register as a sex offender, undergo counseling, and be subject to lifetime supervised release once he is out of federal prison.
This matter was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
This case is being prosecuted by Assistant United States Attorney Damaris Diaz of the Violent and Organized Crime Section.
Former Glendale Police Officer Sentenced to Prison for Taking Bribes, Obstructing Justice and Lying about His Ties to Organized CrimeRead the Press Release
LOS ANGELES – A former Glendale police officer was sentenced today to 21 months in federal prison after he pleaded guilty to a series of charges and admitted that he provided information to the Mexican Mafia that allowed an associate of the prison gang to escape justice for a time and that he also repeatedly mislead investigators who were probing his connections to the Mexican Mafia and Armenian organized crime.
John Saro Balian, 46, of Seal Beach, was sentenced today by United States District Judge John F. Walter.
Balian pleaded guilty last July to federal charges of bribery, obstruction of justice and making false statements.
When he pleaded guilty, Balian admitted that he agreed to accept $10,000 – and actually received a $2,000 down payment – from a convicted felon who wanted Balian to locate individuals responsible for stealing property from the person’s business. As a result of the payment, Balian caused law enforcement resources to be expended as he attempted to locate the suspected burglars.
Balian also admitted that he obtained information about a task force takedown targeting street gangs under the control of the Mexican Mafia. After receiving the information, Balian contacted associates within the Mexican Mafia and informed them that authorities were planning on arresting the “shotcaller” of one of the targeted gangs. As a result, that gang member – who was the lead defendant in a federal racketeering indictment – fled and was a fugitive for a month before he was taken into custody. Balian “acted corruptly with the specific intent to subvert the due administration of justice for the purpose of enhancing his reputation with the Mexican Mafia,” he admitted in a plea agreement.
In relation to the false statement charge, Balian repeatedly lied to special agents with the FBI and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), who, along with the Los Angeles Police Department, were investigating the relationship between the Mexican Mafia and Armenian organized crime, a probe that was also looking into several murders. Among other things, Balian denied receiving money from the convicted felon, denied having a criminal business relationship with a Mexican Mafia associate, and covered up a close relationship with a member of the Mexican Mafia.
Balian “had a successful career as a law enforcement officer and small business owner, but then made a conscious decision to turn to a life of crime and join forces with Armenian Organized Crime and the Mexican Mafia,” prosecutors wrote in a sentencing memorandum filed with the court. “[Balian] blatantly disregarded his sworn oath to protect and serve, and instead chose to subvert law enforcement, place other officers at risk, and live the life of a gang member.”
The case against Balian is the result of an investigation by the Eurasian Organized Crime Task Force, which is made up of special agents with the FBI, HSI, IRS Criminal Investigation and the Department of Health and Human Services’ Office of Inspector General, as well as officers with the Los Angeles Police Department, the Los Angeles County Sheriff’s Department, the Glendale Police Department, the Burbank Police Department and the California Department of Health Care Services.
This matter was prosecuted by Assistant United States Attorney Jeff Mitchell of the Violent and Organized Crime Section.
Downey Man Arrested on Armed Robbery Charges in Thefts at Local GameStop Stores that Netted $135,000 in Cash and MerchandiseRead the Press Release
LOS ANGELES – A Downey man has been arrested on federal criminal charges for his role in four armed robberies of GameStop video game stores in Los Angeles and Orange counties that resulted in the theft of $135,000 in merchandise, cash and employees’ cellphones.
Frederick Lopez Jr., 27, was arrested at his residence on Thursday and remains in custody pursuant to a criminal complaint charging him with four counts of interference with commerce by robbery.
According to an affidavit filed with the complaint, Lopez took part in armed robberies of GameStop stores in Lynwood, Rowland Heights, West Covina and Brea between August 28, 2018 and October 26, 2018. Lopez allegedly entered the stores at night, sometimes accompanied by another suspect, and made small talk with the GameStop store clerks before brandishing a gun and demanding merchandise and money from the cash register. Lopez and the other suspect allegedly also stole victims’ cell phones and, on two occasions, ordered the victims to help load the stolen merchandise into a silver minivan registered to Lopez. Lopez’s fingerprint was found on a Nintendo entertainment system recovered from the scene of the Brea robbery, and witnesses and victims later identified Lopez as one of the suspects, the complaint states.
Lopez is expected to be arraigned in early April.
A complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
Each of the robbery counts in the complaint carries a statutory maximum sentence of 20 years in federal prison.
This case is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Brea Police Department.
This matter is being prosecuted by Assistant United States Attorneys Jeffrey M. Chemerinsky and Bruce K. Riordan of the Violent and Organized Crime Section.
Three SoCal Men Arrested in Scheme in Which Chinese Money Allegedly Funded Seven Inland Empire Marijuana Grow HousesRead the Press Release
LOS ANGELES – Three men were arrested this morning on federal charges alleging they took part in a scheme that used millions of dollars wired from China to purchase seven residential homes in San Bernardino County that were converted into illegal marijuana grow houses.
The three defendants arrested today pursuant to a federal criminal complaint are:
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Lin Li, a.k.a. Aaron Li, 37, of Chino, the U.S.-based coordinator of the alleged scheme;
- Ben Chen, 42, of Alhambra, who allegedly took care of the marijuana grows; and
- Jimmy Yu, 44, of Pasadena, a second alleged grow house caretaker.
The complaint charges the three defendants with one count of manufacturing, distributing, and possessing with the intent to distribute marijuana. The three men are expected to make their initial appearances this afternoon in United States District Court in Los Angeles.
In conjunction with the arrests, law enforcement executed search warrants at Li’s home and seven marijuana grow houses in Chino, Ontario and Chino Hills. As a result of the searches, authorities seized approximately 1,650 marijuana plants from several grow houses, as well as cash at Li’s house currently estimated to be at least $80,000.
Today’s takedown is the result of a 14-month investigation that was initiated by the San Bernardino County Sheriff’s Department and soon after was joined by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI).
In relation to the criminal charges, the U.S. Attorney’s Office, in coordination with the HSI’s Asset Identification and Removal Group, has begun the process to forfeit the seven homes where marijuana was being grown. The properties are cumulatively worth more than $5 million.
According to a 120-page affidavit in support of the criminal complaint, Li, a real estate agent, orchestrated a scheme that purchased residential properties through transactions designed to conceal the homes’ true owners, converted the houses to marijuana grow operations, and trafficked marijuana, with most of the processed marijuana being sold to customers in California and Nevada.
After receiving financing from sources in China, Li “acted as the realtor for the purchase of [seven residences], which he then converted into illegal marijuana grow houses,” the affidavit states. “Li coordinated the purchase of the properties, managed them after purchase, paid their utilities and taxes, and established shell companies for the purpose of managing the properties’ finances.”
Investigators believe Li attempted to distance himself from the conspiracy by using Chen and Yu to manage day-to-day operations at the grow houses, to help with out-of-state distribution of the marijuana, and to return marijuana sale proceeds. Li also used bypasses to physically divert electricity directly from power lines, thus stealing power from the electric companies, hiding the grow houses’ high power usage from law enforcement, and creating fire risks in neighborhoods. According to the affidavit, Li’s attempts to insulate himself from culpability went as far as creating fake leases for some of the properties, documents that included fake tenants, forged electronic signatures, and special clauses that purported to prohibit the fake tenants from cultivating marijuana at the homes.
“In states that have decriminalized marijuana, we have seen an influx of foreign money used to establish grow operations, with much of the marijuana being destined for out-of-state consumers,” said United States Attorney Nick Hanna. “By establishing illegal drug operations in residential neighborhoods, the defendants increased the risks to law-abiding homeowners, caused neighborhood blight, and stole power from utilities.”
“HSI, together with our law enforcement partners, will continue to target transnational criminal organizations that think they can use our neighborhoods as locations for criminal activity,” said Joseph Macias, Special Agent in Charge for HSI Los Angeles. “Today’s arrests and searches, coordinated jointly with the San Bernardino Sheriff’s Department and the U.S. Attorney’s office, are the next step in shutting down criminals who would trash our communities for their own greed.”
“Deputies and detectives from the San Bernardino County Sheriff’s Department assisted HSI with multiple narcotic search warrants. We assist our federal law enforcement partners regularly when requested,” said Sheriff John McMahon. “Our county does not support criminal operations like this and will make every effort to eliminate these threats to our local communities.”
According to the affidavit, down payments for most of the grow houses were traced back to wire transfers from China, and several of the properties were bought by “straw buyers” who actually had nothing to do with the transaction. The titles for most of the homes were transferred, shortly after they were purchased, to limited liability companies associated with Li, who served as the homes’ property manager.
For example, in relation to one of the homes, the affidavit describes how a straw buyer purchased a Chino Hills residence in 2015 for $782,000. The purported buyer was named as chief executive officer of an LLC that Li had established, and that LLC received a $1 million wire transfer from a Hong Kong-based investment group. The vast majority of the purchase price of the house was then wired from the LLC’s bank account. Li received a commission check as the realtor for the sale and also served as the home’s property manager, the affidavit alleges. In early 2018, a neighbor complained to law enforcement about the “overwhelming” smell of marijuana coming from the Chino Hills home and how no one seemed to live there, court papers state.
The total purchase price for the seven homes, which were bought between July 2013 and September 2017, was $4,067,882, according to the affidavit.
In June 2018, deputies and HSI agents executed a search warrant and seized 1,038 marijuana plants at an eighth grow house in Chino Hills believed to be part of the same criminal scheme.
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.
This matter is being prosecuted by Assistant United States Attorneys Carley Palmer of the Organized Crime Drug Enforcement Task Force Section and Jonathan Galatzan of the Asset Forfeiture Section.
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Former U.S. Navy Contract Official Pleads Guilty in Bribery Scheme in Which He Received more than $1.2 Million in KickbacksRead the Press Release
LOS ANGELES – A former civilian employee of the United States Navy who was a senior procurement official for Naval Base Ventura County pleaded guilty in federal court today and admitted receiving kickbacks totaling more than $1.2 million.
Fernando Barroso Sr., 69, of Oxnard, pleaded guilty before United States District Judge John F. Walter to one count of conspiracy and one count of subscribing to a false federal income tax return. As part of the conspiracy, Barroso admitted he defrauded the United States, submitted false claims for payment and accepted bribes.
For approximately 22 years, Barroso worked as the master scheduler for the Public Works Department at the Naval Base, which included three facilities – Point Mugu, Port Hueneme and San Nicolas Island. As master scheduler, Barroso was an “approving official” responsible for approving material purchases, service contracts, vendors and payments to vendors.
According to court documents, Barroso conspired with Theodore Bauer, a Ventura County businessman who operated three entities that received contracts from the Navy. In 2008, Barroso and Bauer entered into an arrangement in which Barroso would issue and approve work orders and purchase orders for Bauer’s companies. Bauer submitted false invoices on behalf of his companies, and Barroso approved invoices and payments to Bauer’s companies – even though work was not being performed. In return, Bauer gave Barroso 50 percent of all proceeds generated by the scheme.
Prior to September 13, 2011, Bauer paid Barroso in cash – a figure that exceeded $375,000. Beginning on September 14, 2011, when Barroso created F. Barroso & Sons, Bauer paid the kickbacks by issuing checks payable to Barroso’s corporation. In December 2013, Barroso purchased a majority stake in a maintenance company, and Bauer paid kickbacks in the form of checks to that company as well. The total amount of kickbacks paid by Bauer to Barroso in the form of checks was $856,350.
In his plea agreement, Barroso also admitted that he violated government procurement regulations and violated conflict of interest laws by approving contract payments to the maintenance company he controlled. Barroso further admitted that some of the invoices issued by the maintenance company were simply fraudulent.
In relation to the tax offense, Barroso admitted that he failed to report $95,200 of kickbacks on his 2011 tax return, and that he claimed $331,225 of fictitious deductions on his 2012 tax returns. These violations caused a tax loss to the government of $105,039.
When he is sentenced by Judge Walter on June 3, Barroso will face a statutory maximum sentence of eight years in federal prison and a fine of $500,000. Barroso may also be ordered to pay restitution of $846,150 with respect to the bribery offense and $105,039 in relation to the tax offenses.
Bauer pleaded guilty in November to conspiracy to commit bribery and is scheduled to be sentenced by Judge Walter on June 10.
The case is a product of an investigation by IRS Criminal Investigation, the Defense Criminal Investigative Service, and the Naval Criminal Investigative Service.
The cases against Barroso and Bauer are being prosecuted by Assistant United States Attorney Daniel J. O’Brien of the Public Corruption and Civil Rights Section.
Justice Dept. Obtains $80,000 Settlement against Orange County Auto Lender for Illegally Repossessing Servicemembers’ CarsRead the Press Release
SANTA ANA, California – The Justice Department today announced that California Auto Finance, a subprime auto lending company based in the City of Orange, has agreed to enter into a court-enforceable consent order to resolve allegations that it illegally repossessed two servicemembers’ cars without court orders while they were on active duty.
The Justice Department filed a lawsuit against California Auto Finance and a related entity called 3rd Generation Inc. on March 28, 2018 alleging that their repossession practices violated the Servicemembers Civil Relief Act (SCRA). Under the proposed consent order, which is still subject to approval by a federal judge, California Auto Finance must adopt new repossession policies, pay one servicemember $30,000 – which is the highest amount ever recovered by the Department for a single servicemember in an automobile repossession case – and pay a $50,000 civil penalty to the United States.
“Individuals who take up the call to protect our nation by serving in the armed forces make an enormous sacrifice for us all,” said United States Attorney Nick Hanna. “We have a legal and moral duty to safeguard the rights of our men and women in uniform. California Auto Finance failed to uphold this duty through its repossession practices. Today’s consent order demonstrates that we will tolerate no abuses of servicemembers’ rights in our district.”
“This case sends a message to financial institutions, large and small, that they must live up to their obligations to our servicemembers,” said Assistant Attorney General Eric Dreiband for the Department of Justice’s Civil Rights Division. “We will continue to vigorously pursue lenders who fail to take the simple steps necessary to determine, before repossessing a car, whether it belongs to a servicemember. Servicemembers who are going through basic training or another kind of military service should not have to worry that their cars will be repossessed with no court supervision during their time of service to our country.”
The Justice Department initiated its investigation of California Auto Finance after receiving a complaint in November 2016 from United States Army Private Andrea Starks. The United States alleges that in April 2016, Private Starks notified California Auto Finance that she would be entering the military the following month. Despite this advance notice, California Auto Finance repossessed Private Starks’ vehicle without a court order on May 9, 2016, her first day of military training duty at Fort Leonard Wood, Missouri. At the time of repossession, the vehicle was parked at the home of Private Starks’ grandmother in Cedar Rapids, Iowa.
The Justice Department’s investigation corroborated Private Starks’ complaint, found that California Auto Finance had no policies related to SCRA compliance, and revealed that California Auto Finance had also violated the SCRA rights of U.S. Army Specialist Omar Martinez. The United States alleges that Specialist Martinez informed California Auto Finance that he would be entering the military, and that he would have limited means of communication during basic training. Nonetheless, California Auto Finance repossessed Specialist Martinez’s vehicle during his first month of military service. The repossession severely damaged Specialist Martinez’s credit, and, as a result, he was unable to purchase a new car. For over a year while living on base at Fort Benning, Georgia, Specialist Martinez had to rely on rideshares and taxis to buy groceries and take care of other personal needs. In March 2018, Specialist Martinez deployed to Afghanistan, where he served until November 2018.
The proposed consent order requires California Auto Finance to pay $30,000 in compensation to Specialist Martinez, and to take steps to repair his credit. In addition, the proposed consent order requires California Auto Finance to take steps to ensure it does not repossess servicemembers’ cars without court orders in the future. Private Starks reached a private settlement with California Auto Finance before the proposed consent order was filed.
The SCRA protects servicemembers against certain civil proceedings that could affect their legal rights while they are in military service. It requires a court to review and approve any repossession if the servicemember took out the loan and made a payment before entering military service. The court may delay the repossession or require the lender to refund prior payments before repossessing. The court may also appoint an attorney to represent the servicemember, require the lender to post a bond with the court and issue any other orders it deems necessary to protect the servicemember. By failing to obtain court orders before repossessing motor vehicles owned by protected servicemembers, California Auto Finance prevented servicemembers from obtaining a court’s review of whether their repossessions should have been delayed or adjusted to account for their military service.
The Justice Department’s enforcement of the SCRA is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section, often in partnership with United States Attorney’s Offices. Housing and Civil Enforcement Section attorneys worked jointly with the Civil Rights Section within the Civil Division of the United States Attorney’s Office in this action.
Since 2011, the Justice Department has obtained over $469 million in monetary relief for over 119,000 servicemembers through its enforcement of the SCRA. The SCRA provides protections for servicemembers in areas such as evictions, rental agreements, security deposits, prepaid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance, and income tax payments. For more information about the Justice Department’s SCRA enforcement, please visit www.servicemembers.gov.
Servicemembers and their dependents who believe that their rights under the SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at http://legalassistance.law.af.mil/.
Justice Department Obtains $80,000 Settlement Against Subprime Auto Lender in Orange County, California, for Illegally Repossessing Servicemembers’ CarsRead the Press Release
The Justice Department today announced that California Auto Finance, a subprime auto lending company based in Orange County, California, has agreed to enter into a court-enforceable consent order to resolve allegations that it illegally repossessed two servicemembers’ cars without court orders while they were on active duty. The Justice Department filed a lawsuit against California Auto Finance and a related entity called 3rd Generation Inc., on March 28, 2018, alleging that their repossession practices violated the Servicemembers Civil Relief Act (SCRA). Under the proposed consent order, which is still subject to approval by the United States District Court for the Central District of California, California Auto Finance must adopt new repossession policies, pay one servicemember $30,000, which is the highest amount ever recovered by the Department for a single servicemember in an automobile repossession case, and pay a $50,000 civil penalty to the United States.
“This case sends a message to financial institutions, large and small, that they must live up to their obligations to our servicemembers,” said Assistant Attorney General Eric Dreiband. “We will continue to vigorously pursue lenders who fail to take the simple steps necessary to determine, before repossessing a car, whether it belongs to a servicemember. Servicemembers who are going through basic training or another kind of military service should not have to worry that their cars will be repossessed with no court supervision during their time of service to our country.”
“Individuals who take up the call to protect our nation by serving in the armed forces make an enormous sacrifice for us all,” said United States Attorney Nicola T. Hanna. “We have a legal and moral duty to safeguard the rights of our men and women in uniform. California Auto Finance failed to uphold this duty through its repossession practices. Today’s consent order demonstrates that we will tolerate no abuses of servicemembers’ rights in our district.”
The Justice Department initiated its investigation of California Auto Finance after receiving a complaint in November 2016 from United States Army Private Andrea Starks. The United States alleges that in April 2016, Private Starks notified California Auto Finance that she would be entering the military the following month. Despite this advance notice, California Auto Finance repossessed Private Starks’ vehicle without a court order on May 9, 2016, her first day of military training duty at Fort Leonard Wood, Missouri. At the time of repossession, the vehicle was parked at the home of Private Starks’ grandmother in Cedar Rapids, Iowa.
The Justice Department’s investigation corroborated Private Starks’ complaint, found that California Auto Finance had no policies related to SCRA compliance, and revealed that California Auto Finance had also violated the SCRA rights of U.S. Army Specialist Omar Martinez. The United States alleges that Specialist Martinez informed California Auto Finance that he would be entering the military, and that he would have limited means of communication during basic training. Nonetheless, California Auto Finance repossessed Specialist Martinez’s vehicle during his first month of military service. The repossession severely damaged Specialist Martinez’s credit, and, as a result, he was unable to purchase a new car. For over a year while living on base at Fort Benning, Georgia, Specialist Martinez had to rely on rideshares and taxis to buy groceries and take care of other personal needs. In March 2018, Specialist Martinez deployed to Afghanistan, where he served until November 2018.
The proposed consent order requires California Auto Finance to pay $30,000 in compensation to Specialist Martinez, and to take steps to repair his credit. In addition, the proposed consent order requires California Auto Finance to take steps to ensure it does not repossess servicemembers’ cars without court orders in the future. Private Starks reached a private settlement with California Auto Finance before the proposed consent order was filed.
The SCRA protects servicemembers against certain civil proceedings that could affect their legal rights while they are in military service. It requires a court to review and approve any repossession if the servicemember took out the loan and made a payment before entering military service. The court may delay the repossession or require the lender to refund prior payments before repossessing. The court may also appoint an attorney to represent the servicemember, require the lender to post a bond with the court and issue any other orders it deems necessary to protect the servicemember. By failing to obtain court orders before repossessing motor vehicles owned by protected servicemembers, California Auto Finance prevented servicemembers from obtaining a court’s review of whether their repossessions should have been delayed or adjusted to account for their military service.
The Justice Department’s enforcement of the SCRA is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section, often in partnership with United States Attorney’s Offices. Housing and Civil Enforcement Section attorneys worked jointly with the Civil Rights Section within the Civil Division of the United States Attorney’s Office in this action. Since 2011, the Justice Department has obtained over $469 million in monetary relief for over 119,000 servicemembers through its enforcement of the SCRA. The SCRA provides protections for servicemembers in areas such as evictions, rental agreements, security deposits, prepaid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance, and income tax payments. For more information about the Justice Department’s SCRA enforcement, please visit www.servicemembers.gov.
Servicemembers and their dependents who believe that their rights under the SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at http://legalassistance.law.af.mil/.
Two Mexican Mafia ‘Secretaries’ Found Guilty of RICO Charge for Being Street Intermediaries for Member of Violent Prison GangRead the Press Release
LOS ANGELES – A Los Angeles man and his long-time girlfriend have been found guilty of racketeering conspiracy 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, 60, and Gloria Valerio, 66, both of the Elysian Valley neighborhood in the City of Los Angeles, were found guilty Monday of conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act (RICO) after a two-week federal jury trial. 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, 58, 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. Prosecutors previously obtained 19 convictions in this case with some defendants receiving sentences of up to 25 years in federal prison. Gonzales and Valerio were the last two defendants still facing charges.
According to the evidence presented at trial, 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.
At trial, jurors saw more than 35 video clips from 11 prison visits in 2012 and 2013 where 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.
The evidence at trial also showed that the defendants 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, the jury heard.
United States District Judge Philip S. Gutierrez has scheduled a June 3 sentencing hearing for both defendants. Gonzales and Valerio face a statutory maximum sentence of 20 years in federal prison on the racketeering conspiracy count. Gonzales faces an additional statutory maximum sentence of five years in prison on the false statements count.
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 case is being prosecuted by Assistant United States Attorneys Carol Alexis Chen of the Organized Crime Drug Enforcement Task Force and Alexander B. Schwab of the Major Frauds Section.
Victorville Correctional Officer Arrested on Federal Charges Alleging He Took Bribes and Smuggled Contraband into PrisonRead the Press Release
RIVERSIDE, California – A Bureau of Prisons (BOP) correctional officer who was a lieutenant assigned to investigate wrongdoing by inmates and officers at the Federal Correctional Complex, Victorville, has been arrested on federal charges alleging he took thousands of dollars in cash bribes in exchange for smuggling contraband into the prison.
Paul James Hayes II, 49, of Victorville, who voluntarily has been on leave from his job since October 2018, was arrested on Thursday and has been charged with two felonies: acceptance of a bribe by a public official, and conspiracy to provide and possess contraband in prison. Hayes was a lieutenant with the Bureau of Prisons Special Investigation Services (SIS), which investigates illegal activity by correctional officers and inmates. He made his initial court appearance on Friday in United States District Court and is expected to be released today on $170,000 bond.
According to an affidavit filed with a criminal complaint on Thursday, beginning in June 2018, SIS employees reviewed suspicious emails and telephone conversations between an inmate and his girlfriend, Angel Marie Wagner, 42, of Buena Park. The conversations referenced Wagner meeting a BOP staff member outside a Home Depot store in Victorville on July 15, 2018, the affidavit states. A review of other inmate communications revealed that money transfers were being made to Wagner, according to court documents. On July 15, agents covertly watched Hayes arrive at the Victorville Home Depot in his Hyundai Santa Fe SUV, the affidavit said. The agents allegedly also observed Wagner walk from her rental vehicle to Hayes’s SUV, then hand Hayes a brown-colored envelope, which Hayes took and placed inside his vehicle.
When federal agents interviewed Wagner on Thursday, she identified Hayes from a photographic lineup and said she had met him multiple times in 2018, the affidavit said. Wagner also said she believed she provided Hayes with a total of approximately $40,000 in cash across their various meetings in 2018, court documents state. Wagner allegedly also admitted to receiving wire transfers of money, which she later would withdraw in cash and place in an envelope and give to Hayes. On other occasions, Wagner said she received from third parties envelopes with cash as well as wrapped items that she suspected were controlled substances or cellular telephones, the affidavit said. Wagner allegedly admitted giving the cash and the wrapped items to Hayes.
A review of money transfer service records and emails showed that Wagner received money from people associated with the bribery conspiracy, the affidavit said. There allegedly also were cash deposits totaling $12,520 made into Hayes’s bank account on at least seven occasions between March 8 and August 7, 2018, including one deposit for $4,800 on May 29, 2018.
Wagner, who was arrested on Friday, has been charged with conspiracy to bribe a public official, bribery of a public official, and conspiracy to provide and possess contraband in prison. She was released on $50,000 bond.
If convicted of all charges, Hayes faces a statutory maximum sentence of 20 years in federal prison while Wagner faces a statutory maximum sentence of 25 years in federal prison.
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.
This matter is being investigated by the U.S. Department of Justice Office of the Inspector General and the Federal Bureau of Investigation.
This case is being prosecuted by Assistant United States Attorney Sean D. Peterson of the Riverside Branch Office.
San Diego County Man Who Laundered Ransom Money Paid by Kidnapping Victims’ Families Sentenced to 18 Months in PrisonRead the Press Release
LOS ANGELES – A National City man convicted of conspiracy was sentenced to 18 months in federal prison today for laundering the money of a violent kidnapping organization that held two dozen Mexican nationals hostage.
Luis Francisco Murillo Morfin, 33, also was ordered by United States District Judge John F. Walter to pay $62,000 in restitution to the victims. After a two-day bench trial in October 2018, Walter found Murillo guilty of conspiracy to commit money laundering.
In August 2015, Murillo’s co-conspirators recruited victims in Mexico under the false pretense of being smuggled into the United States. The victims were picked up in northern Mexico, were driven in the trunks of cars through a fake border “checkpoint,” then were taken to a Tijuana stash house where they were threatened, beaten and raped, according to trial testimony.
The kidnappers then extorted their victims’ relatives in the United States for ransom money, ordering them to send the money via wire transfers to Mexico or to make cash deposits into U.S. bank accounts – including an account that belonged to Murillo, a lawful permanent resident of the United States. Extortion victims testified at trial that they were threatened that their relatives would be beaten, murdered or disemboweled if the ransom money wasn’t paid.
As the kidnapping victims’ relatives deposited the money, Murrillo twice drove from Mexico to the United States and withdrew ransom payments from his bank account so he could deliver the money to his co-conspirators in Mexico.
Murillo opened a Wells Fargo bank account in his name on April 30, 2015, and made monthly payments to keep it open, but did not use the account until August 4, 2015 – one day after his co-conspirators kidnapped and held for ransom nine of their victims, according to evidence presented at trial.
On August 4 and 5, 2015, extortion victims deposited $62,000 in ransom money into Murillo’s account from bank branches in Ontario, Santa Maria, Northern California, Idaho and Mississippi. Less than 48 hours later, Murillo had withdrawn all $62,000, leaving only the $10 minimum to keep the account open, and lied to a Wells Fargo bank employee about how he needed the money to pay for cars.
After his arrest, Murillo told law enforcement that he believed the money he withdrew from the Wells Fargo account was from illegal activity, specifically, human smuggling, according to the government’s sentencing memorandum.
Murillo was charged along with four other Mexican nationals, all of whom are believed to be residing in Mexico. The other defendants are: Jesus Antonio Rivera Gaxiola, a.k.a. “The Cook”; Manuel Roman Velazquez, a.k.a. “The Caller”; Alberto Jimenez Bautista, a.k.a. “Jefe”; and Luis Perez Martinez.
This case was investigated by the Federal Bureau of Investigation and IRS Criminal Investigation, with the assistance of U.S. Customs and Border Protection.
This case is being prosecuted by Assistant United States Attorneys Victoria Degtyareva and Carley Palmer of the Organized Crime Drug Enforcement Task Force Section.
Long Beach Man Who Led Crew That Committed 10 Armed Robberies of Verizon Stores in Two States Pleads Guilty to Federal ChargesRead the Press Release
SANTA ANA, California – The ringleader of a crew that committed 10 armed robberies of Verizon stores across Southern California and Arizona, netting approximately $340,000 worth of stolen smartphones and other merchandise in the process, pleaded guilty on Friday to three federal felonies.
Zachary David Wade, 41, of Long Beach, pleaded guilty to conspiracy to interfering with commerce by robbery, attempted interference with commerce by robbery, and brandishing a firearm in furtherance of a crime of violence. United States District Judge David O. Carter has scheduled a July 8 sentencing hearing, where Wade will face a statutory maximum sentence of life imprisonment.
According to his plea agreement, from July 2017 until February 2018, Wade planned, organized and supervised the armed robberies of Verizon stores in Tarzana, Torrance, Fullerton, Long Beach, Corona, San Pedro, Corona del Mar, as well as in Arizona.
Wade admitted to selecting which Verizon stores would be robbed and instructing his co-conspirators on how the robberies should occur, including identifying entrance and exit routes. He also admitted to providing equipment such as duffle bags and loaded firearms, which his co-defendants then used during the robberies. Wade also admitted to exclusively determining how much each robbery participant would get paid. The typical robbery netted tens of thousands of dollars’ worth of smartphones and other merchandise, which Wade later sold to a buyer in Glendale, California, the plea agreement states.
On January 31, 2018, Wade planned and organized the robbery of a Verizon retailer in Tucson, Arizona, but was arrested the next day in Glendale, California while attempting to sell the stolen smartphones and other merchandise for cash.
Eight of Wade’s co-defendants have pleaded guilty to felony conspiracy, robbery, and firearms charges. They are: Daniel Joseph Smith, 30, of Long Beach; Sean Keith Rivers, Jr., 25, of Long Beach; Marques Alphonse Petty-Wright, 31, of Long Beach; Randall Lee Tate, Jr., 30, of Long Beach; Andre Dierre Stovall II, 24, of Long Beach; Drae Tamar Wright, 27, of Long Beach; Sylvester Edwards, Jr., 29, of Lancaster; and Jeffrey Kevin Duran, 50, of Bellflower.
Tate was sentenced in September 2018 to 51 months in federal prison. The other co-defendants await sentencing.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
This case is being prosecuted by Assistant United States Attorneys Scott D. Tenley and Daniel S. Lim of the Santa Ana Branch Office.
Long Beach Man Arrested on Federal Charges for Bombing Aliso Viejo Spa that Killed Ex-GirlfriendRead the Press Release
SANTA ANA, California – Law enforcement authorities associated with the FBI’s Joint Terrorism Task Force on Sunday arrested a Long Beach man on federal charges stemming from an explosion last year that destroyed a day spa in Aliso Viejo, killed the man’s former girlfriend, and caused serious injuries to two spa clients.
Stephen William Beal, 59, was arrested pursuant to a federal criminal complaint filed on Friday that charges him with malicious destruction of a building resulting in the death of Ildiko Krajnyak.
“This was a horrific intentional attack that killed an innocent woman and severely injured two others who will live with the physical and emotional scars for the rest of their lives,” said United States Attorney Nick Hanna. “We will do everything we can to obtain justice for these victims and hold the perpetrator accountable.”
“The FBI and the Orange County Sheriff’s Department, with the assistance of many JTTF partners, brought full forensic resources to bear on the case in order to process an enormous amount of evidence recovered from the crime scene and related searches,” said Paul Delacourt, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Though Mr. Beal has been charged, our work will continue to ensure justice is done in this case for the victims who continue to endure the loss and the pain of this horrific attack.”
“During this extensive investigation, we have worked seamlessly with our local and federal partners,” said Orange County Sheriff Don Barnes. “We are grateful for the many dedicated agencies who worked together to meticulously investigate and arrest the suspect. This will provide much-needed closure to our community.”
The charge against Beal relates to the May 15, 2018 explosion at the Magyar Kozmetica spa in Aliso Viejo. When first responders arrived on the scene, they discovered human remains outside of the building and noted major damage to building, according to the affidavit in support of the criminal complaint. A woman who survived the blast told investigators that the explosion was the result of the spa’s owner/operator, Ms. Krajnyak, opening a cardboard box.
Later that day, Beal contacted the Orange County Sheriff’s Department and identified himself as the co-owner of the spa that was operated by his “ex-wife.” Sheriff’s deputies and FBI personnel responded to Beal’s residence, where he consented to a search that led to the discovery of chemicals used to manufacture explosives, according to the affidavit. Pursuant to a search warrant obtained the day after the explosion, investigators recovered approximately 130 pounds of explosive precursors.
Further investigation at the scene of the bombing led to the recovery of a partially destroyed battery and bits of wire that the FBI laboratory determined were part of the explosive device, according to the affidavit. FBI laboratory personnel determined that there were “no meaningful differences” between the bits of wire recovered from the explosion site and wire removed from a homemade device found at Beal’s residence, according to the affidavit. Investigators determined that Beal purchased a battery consistent with the partially destroyed battery found at the blast scene at a store in Long Beach one week prior to the explosion. And, eight days before the explosion, Beal purchased three cardboard boxes very similar to the box the deceased victim was opening when the bomb detonated.
Furthermore, chemicals detected at the explosion scene were similar to those detected inside Beal’s car, which he purchased only three months before the incident and which he drove to Magyar Kozmetica spa four days before the blast, the affidavit states.
In addition to the forensic evidence, the affidavit outlines statements of three friends of Ms. Krajnyak. One of those witness told investigators that Ms. Krajnyak said “that her boyfriend was jealous, controlling, and possessive of her,” and “she was scared because he would threaten her.” While that witness did not know the name of the boyfriend, Ms. Krajnyak had sent her a photo of the boyfriend, which was identified as Beal.
Beal is expected to make his initial appearance in this case this afternoon in United States District Court in Santa Ana.
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 he were to be convicted of the crime of malicious destruction of a building resulting in death, Beal would face a potential sentence of life without parole in federal prison.
This matter is being investigated by the FBI’s Joint Terrorism Task Force, which includes special agents with the FBI and deputies with the Orange County Sheriff’s Department. Task Force members who participated in the investigation included IRS Criminal Investigation; the Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; the Los Angeles Police Department; the Long Beach Police Department; the Irvine Police Department; the Anaheim Police Department; and the Orange County Fire Authority.
The case against Beal is being prosecuted by Assistant United States Attorneys Mark Takla and Annamartine Salick of the Terrorism and Export Crimes Section.
Crew Who Allegedly Robbed Eight Inland Empire AutoZone Stores Indicted on Federal Conspiracy, Robbery and Firearms ChargesRead the Press Release
RIVERSIDE, California – A federal grand jury today returned a 13-count indictment today against two men and a woman from Moreno Valley who allegedly committed at least eight armed robberies at AutoZone stores in the Inland Empire and made off with more than $11,000 in cash.
Daeon Raishawn Cox, 20; Dashon Raymond White, 24; and Jada Shardae Allen, 18, were charged with conspiracy to interfere with commerce by robbery. Cox and White are in local custody and are expected to be turned over to federal law enforcement officials on Monday. Allen, who was turned over to federal authorities on February 25 pursuant to a criminal complaint previously filed in this case, was freed on a $40,000 bond, and her arraignment is scheduled for March 13.
According to the indictment, over the course of three months late last year, Cox – who was alternately aided by White, Allen and an unindicted juvenile – robbed AutoZone stores in Riverside, San Bernardino, Grand Terrace, Redlands, Hemet and Fontana. Typically, the robbers entered the AutoZone stores at night, wearing black hoodies, black pants, gloves and with their faces covered by bandanas, according to the affidavit in support of the criminal complaint. The robbers allegedly pointed guns at AutoZone employees and forced them to hand over money from the cash register or from the store safe. The robberies netted the defendants around $1,000 per incident, the affidavit states.
The defendants were caught after an attempted robbery on December 12 was interrupted by Fontana police, who had been conducting surveillance at an AutoZone store in that city. A Fontana police officer witnessed Cox and White exit White’s gray Saturn SUV while Allen was seated in the back of the vehicle, according to the affidavit. Cox and White allegedly approached the AutoZone wearing black hooded sweatshirts and masks on their faces, while Cox carried an AR-15-type rifle and handed it to White. After the police officer identified himself, the defendants fled the scene, driving away in White’s SUV at a high rate of speed, court papers state. During the pursuit, the rifle was thrown from the SUV’s front passenger window onto the I-15 and I-210 freeway interchange. The car chase ended when White’s SUV crashed in Rancho Cucamonga and the defendants fled on foot. Cox was caught while hiding in a nearby garbage can, while White and Allen were arrested the next day at their residences, the affidavit states. Fontana police later recovered the rifle – which was loaded with eight rounds – from the shoulder of the freeway, court papers said.
In addition to the conspiracy count, Cox was charged with six substantive counts of interfering with commerce by robbery and six counts of using a firearm in furtherance of a violent crime. White also faces two robbery counts and two firearms counts, while Allen also was charged with one count of robbery and one firearm count.
If convicted, each defendants would face a statutory maximum sentence of 20 years in federal prison for each of the robbery-related charges, as well as a mandatory seven-year consecutive sentence for the firearms offenses.
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 case was investigated by the Federal Bureau of Investigation, the Fontana Police Department, the San Bernardino County Sheriff’s Department, the Riverside Police Department, the Hemet Police Department, the Redlands Police Department, the Moreno Valley Police Department, the Riverside County District Attorney’s Office and the San Bernardino County District Attorney’s Office.
This case is being prosecuted by Assistant United States Attorney Jerry Yang of the Riverside Branch Office.
Two Chinese Nationals Indicted on Federal Kidnapping and Extortion Charges in Scheme Involving $2 Million Ransom DemandRead the Press Release
LOS ANGELES – Two Chinese nationals have been indicted on federal charges that allege they kidnapped another Chinese national and attempted to collect $2 million in ransom from the victim’s family in exchange for the victim’s life.
Guangyao Yang, 25, and Peicheng Shen, 33, whose last known U.S. residences were in West Covina, were charged in a four-count indictment returned by a federal grand jury on February 22. The indictment charges the two defendants with conspiracy to kidnap, kidnapping, attempted extortion in violation of the Hobbs Act, and threat by foreign communication.
According to court documents, Shen, using an alias, met the victim, a Santa Ana resident, several times on the pretense that Shen would help the victim collect a debt from another individual. During their third meeting, at a San Gabriel shopping center on July 16, 2018, Shen allegedly kidnapped the victim and then, along with Yang, held the victim hostage at a house in Corona. At that house, Shen and Yang allegedly confined the victim by binding his legs together, taping his eyes shut, restraining his arms behind him, and confining him in a closet.
The day after the kidnapping, the victim’s father received a demand for a $2 million ransom in exchange for the victim’s life, with the money to be deposited into three Chinese bank accounts within three hours, court documents allege. The victim’s father also received photographs of the victim, who was physically restrained in a closet, according to court documents.
Investigators believe the victim died during the course of the kidnapping, and they are seeking the public’s assistance in locating his body.
The indictment further alleges that on July 18, defendants Shen and Yang attempted to conceal evidence of the crime. Specifically, defendants Shen and Yang drove to the area of Mojave, California, to bury or otherwise dispose of the victim’s body or other physical evidence involved in the crime. Further, on that same day, Shen allegedly had the closet of the Corona house re-carpeted. Yang also performed an Internet search to determine, in effect, how fast a corpse decomposes in soil, court papers state.
Shen and Yang currently are believed to be in China.
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 two kidnapping-related charges carry a statutory maximum penalty of life in federal prison. The extortion and threat by foreign communication charges each carry a statutory maximum penalty of 20 years in prison.
The investigation into the kidnapping and extortion is being conducted by the Federal Bureau of Investigation.
This case is being prosecuted by Assistant United States Attorney Julia Choe of the Cyber and Intellectual Property Crimes Section and Special Assistant United States Attorney Ryan Adams of the General Crimes Section.
The FBI is seeking information regarding the suspects charged in this case and to determine the whereabouts of the victim. While search efforts are focused in the Mojave Desert, the FBI would like to hear from anyone who may have information about this alleged crime or about associated suspicious activity. Anyone with information may call the FBI’s Los Angeles Field Office at (310) 477-6565.
San Fernando Valley Brothers Arrested in Stolen Refund Check Scheme that Allegedly Involved International Money LaunderingRead the Press Release
LOS ANGELES – Federal authorities have arrested two brothers from Woodland Hills who are charged in a stolen tax refund check scheme involving hundreds of thousands of dollars in fraudulently obtained federal income tax refunds, some of which were then laundered through bank accounts held in the United Kingdom.
Victor A. Ohiri, 50, and Stephen O. Danielson-Ohiri, 49, were arrested late Tuesday pursuant to a 13-count indictment returned by a federal grand jury on January 29 that charges them with conspiracy, theft of government property, and international money laundering.
The Ohiri brothers were arraigned on the indictment Wednesday afternoon in United States District Court in downtown Los Angeles. Both defendants pleaded not guilty and were ordered to stand trial on April 23.
The indictment alleges that between March 2014 and March 2015, Victor and Stephen Ohiri, together with two unidentified co-conspirators, conspired to use bank accounts to launder hundreds of thousands of fraudulently obtained federal income tax refunds. During the course of the conspiracy, at least $294,000 in federal income tax refunds was deposited into accounts controlled by the Ohiris.
According to the indictment, the unidentified co-conspirators filed fraudulent federal income tax returns with the Internal Revenue Service in the names of taxpayers who were identity theft victims. The co-conspirators used fake documents, such as bogus Forms W-2, and information from the Ohiris’ bank accounts to file the fraudulent returns, which sought large tax refunds, often between $8,000 and $10,000.
Based on the false and fraudulent returns, the IRS issued tax refunds, which were electronically transmitted not to the named taxpayers, but instead to the bank accounts controlled by Victor and Stephen Ohiri, and others. Victor and Stephen Ohiri then withdrew the funds and/or transferred the funds to other bank accounts. In relation to most of the tax refunds, the majority of the funds were wired overseas to the unidentified co-conspirators in the United Kingdom.
During the investigation, IRS investigators seized approximately $181,000 in 2014 from two of Stephen Ohiri’s bank accounts – money that came from just one fraudulently obtained tax return.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
If the Ohiris were to be convicted of the charges alleged in the indictment, each defendant would face a statutory maximum sentence of 145 years in federal prison.
During Wednesday’s arraignment, a United States Magistrate Judge ordered Victor Ohiri detained without bond pending trial, while Stephen Ohiri was ordered released on a $75,000 bond.
The case against the Ohiris is part of an ongoing investigation being conducted by IRS Criminal Investigation and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
This case is being prosecuted by Assistant United States Attorney Kristen A. Williams of the Major Frauds Section.
California Couple Sentenced to Prison Terms on Federal Child Exploitation ChargesRead the Press Release
WASHINGTON – Jorge Castillo, 37, and his girlfriend, Katherine Briones, 43, both of Inglewood, Calif., were sentenced today to prison terms of 25 years and 15 years, respectively, after earlier pleading guilty in the District of Columbia to child exploitation charges.
The announcement was made by U.S. Attorney for the District of Columbia Jessie K. Liu, U.S. Attorney for the Central District of California Nicola T. Hanna, Nancy McNamara, Assistant Director in Charge of the FBI’s Washington Field Office, Peter Newsham, Chief of the Metropolitan Police Department (MPD), and Veronica Allende, Director of the New Jersey Division of Criminal Justice.
Both defendants pled guilty on Dec. 18, 2017, to charges of transportation of a minor with intent to engage in criminal activity and production of child pornography. They were sentenced by the Honorable Trevor N. McFadden of the U.S. District Court for the District of Columbia. Following their prison terms, the defendants must register as sex offenders for a period of 25 years. Castillo also will be placed on supervised release for the rest of his life, and Briones will be placed on supervised release for seven years. Briones also was ordered to pay $5,000 to a fund for the victims of sex trafficking.
Castillo is facing pending state charges in New Jersey of first-degree conspiracy to commit child trafficking and second-degree distribution of child pornography.
According to the government's evidence, on March 13, 2017, Castillo contacted an undercover officer with the FBI’s Washington Field Office’s Child Exploitation and Human Trafficking Task Force, through a social network site. Castillo and Briones then continued communications with this undercover officer over the next few weeks, attempting to set up a meeting with an underage girl. During the course of the communications, Castillo also referenced a person on the East Coast who he believed had a similar interest in children; unbeknownst to Castillo, that person was an undercover detective with the New Jersey State Police, who claimed to have access to an underage girl.
Castillo and Briones arranged to have the two girls transported to Los Angeles for the purpose of engaging in sexual acts with them. The defendants planned to provide a hotel room for the purported girls and the two undercover officers. On the day this meeting was to take place – April 4, 2017 - both defendants were arrested at the Los Angeles International Airport. In a search of their cellular telephones, authorities found images of child pornography.
Castillo and Briones have been in custody since their arrests.
This case was brought as part of the Department of Justice's Project Safe Childhood initiative and investigated by the FBI's Child Exploitation and Human Trafficking Task Force, which includes members of the FBI's Washington Field Office and MPD. In February 2006, the Attorney General created Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorney's Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case was initiated and investigated by the FBI’s Washington Field Office’s Child Exploitation and Human Trafficking Task Force, which is composed of FBI Agents, along with Detectives from the Metropolitan Police Department, Fairfax County, Va., Police, Arlington County Va., Police, Prince William County Va., Police, Alexandria Va., Police, Loudoun County, Va. Sheriff’s Department, Leesburg, Va., Police Department, the U.S. Marshals Service. Additional assistance in this case was provided by the New Jersey Division of Criminal Justice, the New Jersey State Police, the FBI’s Los Angeles Field Office, the Los Angeles Police Department, the U.S. Department of Homeland Security - Homeland Security Investigations, and the U.S. Attorney’s Office for the Central District of California.
The case was prosecuted by Assistant U.S. Attorney Andrea L. Hertzfeld, of the U.S. Attorney’s Office for the District of Columbia, with assistance from Criminal Investigator John Marsh. Assistance also was provided by the U.S. Attorney’s Office for the Central District of California.
Southern California Pharmacy Owner Sentenced to Prison for Her Role in Health Care and Wire Fraud SchemeRead the Press Release
A Southern California pharmacy owner was sentenced today to 48 months in prison for her role in a Medicare fraud scheme involving more than $1.5 million in fraudulent claims for prescription drugs.
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 D. Delacourt of the FBI’s Los Angeles Division and Special Agent in Charge Christian J. Schrank of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Los Angeles Regional Office made the announcement.
Tamar Tatarian, 39, of Pasadena, California, was sentenced by U.S. District Judge John F. Walter of the Central District of California, who also ordered Tatarian to pay $1,537,710.73 in restitution to Medicare. On Dec. 14, 2018, Tatarian was convicted of one count of health care fraud and two counts of wire fraud following a four-day jury trial.
Tatarian was an owner of Akhtamar Pharmacy in the Pasadena, California area. According to evidence presented at trial and sentencing, from approximately October 2015 through June 2018, Tatarian engaged in a scheme involving the submission of fraudulent claims to Medicare Part D plan sponsors for prescription drugs that Akhtamar Pharmacy never ordered from wholesalers, and thus never dispensed to Medicare beneficiaries. Tatarian attempted to conceal the fraud through the creation of fake invoices, reflecting wholesale drug purchases by Akhtamar Pharmacy which had, in fact, never taken place, the evidence showed. As a result of this scheme, Tatarian, through Akhtamar Pharmacy, submitted claims to Medicare for more than $1.5 million in prescription drugs that she never purchased or dispensed to patients, the evidence showed.
This case was investigated by the FBI and HHS-OIG. Trial Attorney Alexis Gregorian and Assistant Chief A. Brendan Stewart of the Criminal Division’s Fraud Section are prosecuting the case.
The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.
Long Beach Man Sentenced to 10 Years in Federal Prison for Traveling to Mexico to Engage in Illicit Sexual Conduct with MinorRead the Press Release
LOS ANGELES – A Long Beach resident who traveled to Mexico to engage in illicit sexual conduct with a minor – and also enticed his victim to produce child pornography – was sentenced today to 120 months in federal prison.
Jonathan Sandoval-Lepe, 32, was sentenced this morning by United States District Judge George H. Wu.
Sandoval-Lepe pleaded guilty in November 2018 to federal charges of engaging in illicit sexual conduct in a foreign place and receiving child pornography depicting other victims.
According to his plea agreement, over the course of about two years that began in the spring of 2015, Sandoval-Lepe traveled to Baja California to have sex with the victim, who was 13 when the illicit sexual conduct started.
Sandoval-Lepe also admitted that in September 2017 he enticed the victim, who was then 15, to produce child pornography while he was in the United States. The victim sent that child pornography to Sandoval-Lepe in California.
In August 2017, Sandoval-Lepe knowingly received child pornography that he downloaded onto his computer from a peer-to-peer network, the plea agreement states. The investigation found more than 600 images and videos of child pornography, some of which depicted children who were under 12 years of age, according to court documents.
In addition to the prison term, Judge Wu ordered Sandoval-Lepe to pay $15,000 in restitution to his victims, including $10,000 to the Mexican victim. Judge Wu also ordered him to pay a $10,000 special assessment paid to the Domestic Trafficking Victims’ Fund. Following his release from custody, Sandoval-Lepe will remain on federal supervised release for the remainder of his life.
This case was investigated by the Federal Bureau of Investigation and the Los Angeles County Sheriff’s Department. Mexican law enforcement officers in Baja California provided assistance in this investigation.
This case was prosecuted by Assistant United States Attorneys Joshua O. Mausner and Lana Morton-Owens of the Violent and Organized Crime Section.
Former Arizona Official Who Accepted Bribes from Culver City Debt Collection Outfit Pleads Guilty to Federal Criminal ChargeRead the Press Release
LOS ANGELES – A former Arizona public official pleaded guilty today to accepting tens of thousands of dollars in cash bribes from a now-defunct Culver City-based debt collection company in exchange for disclosing confidential information that helped the company collect nearly $1 million in outstanding debts.
Leslie Gene Nelson, 59, of Phoenix, pleaded guilty to one count of bribery, a felony offense that carries a statutory maximum sentence of 10 years in federal prison. United States District Judge S. James Otero scheduled a June 24 sentencing hearing.
Nelson was an employee of the Arizona Department of Economic Security (AZ DES), a state agency that provides unemployment benefits. In a plea agreement filed in this case, Nelson admitted he accepted at least $26,000 in cash bribes from Michael S. Flowers and Flowers’ employer, Professional Collection Consultants (PCC), from approximately September 2010 until August 2013. In exchange for the bribes, Nelson provided Flowers and PCC with wage and earnings information for thousands of specific Social Security numbers that Flowers provided, according to court documents. AZ DES maintained wage and employment-related data in its computer systems, which were linked with federal and state databases that contained confidential information for people nationwide.
Nelson admitted that he received the Social Security numbers from Flowers and that he sent confidential information found on each individual or advised that no wages existed for a specific Social Security number. Armed with the confidential information, PCC analyzed the collectability of each debtor’s debt and determined whether it was financially reasonable to sue the debtor to obtain a court judgment that would allow the company to garnish the debtor’s wages.
During the first eight months of 2013, the confidential information that Nelson provided helped PCC collect $946,770 in debts owed.
Flowers, 58, of the Mid-City district of the City of Los Angeles, deposited Nelson’s bribe payments into a local bank and he also received a 10 percent commission on the recoveries made by PCC. Flowers and PCC each pleaded guilty to conspiracy to commit federal program bribery. Flowers was sentenced to three years’ probation. PCC was fined $350,000 and ordered to forfeit $946,770.
This matter was investigated by the United States Department of Labor, Office of the Inspector General, which received assistance from the Federal Bureau of Investigation and the Arizona Department of Economic Security.
The case is being prosecuted by Assistant United States Attorney Elisa Fernandez of the Public Corruption and Civil Rights Section.
Ex-Pasadena Police Lieutenant Sentenced to One Year in Federal Prison for Unlicensed Selling of Firearms and Lying on ATF FormRead the Press Release
LOS ANGELES – A former lieutenant in the Pasadena Police Department was sentenced today to one year and one day in federal prison for exploiting his status as a police officer to engage in the unlicensed sale of more than 100 firearms and for making a false statement during the purchase of a firearm.
Vasken Kenneth Gourdikian, 50, of Sierra Madre, was sentenced by United States District Judge Stephen V. Wilson, who also ordered Gourdikian to pay a $10,000 fine.
Judge Wilson said he didn’t find credible Gourdikian’s claims of being “a hobbyist who got out of control.” In imposing the prison sentence, Judge Wilson noted, “This was a way for him to make money.”
In September 2018, Gourdikian pleaded guilty to federal charges of engaging in the business of dealing in firearms without a license and making a false statement during the purchase of a firearm.
Gourdikian engaged in the unlicensed sale of at least 108 firearms between March 2014 and February 2017 and used his official status as a police officer to purchase restricted “off roster” firearms. “Off roster” firearms are firearms that in California are not available for purchase by the general public directly from a licensed federal firearms dealer. While police officers are not prohibited from selling “off roster” firearms to the general public, Gourdikian unlawfully engaged in the business of selling firearms without a license.
In advertisements to sell firearms that he posted to an online firearms marketplace, Gourdikian sought to increase the purchase price and desirability of his firearms by describing them as “off roster,” “BNIB” (brand new in box), and “never fired.” Gourdikian admitted in his plea agreement that 80 of the 108 firearms were “off roster” firearms he sold in third-party transactions to non-law enforcement customers. Had Gourdikian possessed a federal firearms license, he would have been unable to sell nearly 75 percent of the 108 firearms he admitted to selling because California law prohibits federal firearms licensees from selling “off roster” firearms to non-law enforcement buyers, court papers state.
Gourdikian also abused his law enforcement position in other ways to benefit his gun-selling scheme. He admitted to circumventing the usual 10-day waiting period required for firearms purchases by using his position as police officer to bypass this state law. Because California law also exempts law enforcement from a general rule that prohibits the purchase of more than one firearm within a 30-day period, Gourdikian often purchased multiple firearms in a single transaction as a means of restocking his sales inventory. Gourdikian re-sold 79 firearms within six days after he purchased them, according to the government’s sentencing memorandum.
Another one of Gourdikian’s admitted offenses was making a false statement on a “re-certification” form for the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives that he signed in 2014 when he took possession of a handgun. He misrepresented on the form that he was the buyer of a firearm when he actually purchased it for another individual, according to his plea agreement. Gourdikian re-sold the gun to another person on the same day he bought it from a gun dealer, court documents state. The purpose of this form is to ensure community safety by allowing law enforcement to monitor who purchases firearms and to track the sales of guns.
Highlighting the danger of Gourdikian’s conduct, court filings also described how, in 2016, one of the firearms that Gourdikian purchased was recovered by local police at the site of a narcotics investigation.
“Mr. Gourdikian’s side business of selling off-roster firearms violated federal law and endangered the public,” said United States Attorney Nick Hanna. “Police officers are permitted to purchase off-roster weapons for their own use and protection, but the law was not designed to give officers a lucrative second career as unlicensed firearms dealers flooding our communities with weapons not available to the general public.”
“The goal of ATF’s illegal firearms trafficking enforcement efforts is to reduce violent crime by stemming the flow of firearms to prohibited individuals,” said the Bureau of Alcohol, Firearms, Tobacco and Explosives (ATF) Los Angeles Field Division Special Agent in Charge Carlos A. Canino. “ATF’s Crime Gun Intelligence Center routinely looks at crime guns recovered at scenes and multiple purchases by individuals. Through analysis, ATF discovered this individual was engaged in the business of dealing in firearms without a license which is a federal violation.”
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
This case is being prosecuted by Assistant United States Attorneys Elisa Fernandez of the Public Corruption and Civil Rights Section and Jennifer Chou of the Violent and Organized Crime Section.
Ex-NASA Contractor Who Hacked into Women’s Accounts and Threatened to Publish Nude Photos Sentenced to Nearly 5 YearsRead the Press Release
LOS ANGELES – A former NASA contractor was sentenced today to 57 months in federal prison for hacking into the email, social media accounts and computers of women he knew and then using the information, including nude photographs of the women, to anonymously threaten and harass them for additional explicit pictures.
Richard Gregory Bauer, 28, who resides in the Mid-Wilshire district of Los Angeles, was sentenced by United States District Judge John F. Walter, who called the crimes “disgusting and harmful.”
Bauer pleaded guilty in October to federal charges of stalking, computer hacking and aggravated identity theft. In a plea agreement filed in this case, Bauer admitted that he spent years obtaining unauthorized access to the online accounts of his victims, who included family, friends, high school and college acquaintances, co-workers and friends of friends.
Bauer’s “crimes represent a long-running course of behavior, not a one-off event, or for that matter a brief spree,” prosecutors wrote in a sentencing memorandum.
Starting in early 2015 and continuing through early 2018, Bauer sent his victims anonymous online messages that threatened to publish their nude photographs on the Internet or to the victims’ family and co-workers if they did not send him additional explicit pictures of themselves. As part of the threats, Bauer included in his emails details that made it clear he knew about his victims’ lives, work and families, according to the sentencing memorandum.
Bauer targeted his victims using two methods. In some cases, he used his true identity and contacted victims on Facebook, posing a series of questions purportedly as part of a “human societies” project he claimed he was working on for a class. Some of the questions included ones frequently used to reset online passwords, including the name of the city where your parents met, the name of your first pet, or the brand and model of your first car. In reality, there was no class and Bauer then used the information he obtained to reset passwords, and to gain access to his victims’ online accounts, primarily cloud-based iPhone backups. From those backups, he gathered his victims’ photographs, videos and documents containing passwords for their other accounts.
Other times, Bauer again used his true identity and convinced his victims to install malware that he claimed was software he had written and needed help testing. Once the malware had been installed on the victims’ computers, Bauer used it to harvest account logins, passwords, photographs and videos from his victims’ compromised computers.
Bauer is a former contractor at NASA’s Neil A. Armstrong Flight Research Center, an aeronautical research center located at Edwards Air Force Base. He is a former resident of the High Desert communities of Lancaster and Palmdale.
This case was investigated by NASA’s Office of Inspector General.
This matter was prosecuted by Assistant United States Attorney Khaldoun Shobaki of the Cyber and Intellectual Property Crimes Section.
U.S. Seeks to Recover Approximately $38 Million Allegedly Obtained from Corruption Involving Malaysian Sovereign Wealth FundRead the Press Release
LOS ANGELES – The Justice Department announced today the filing of civil forfeiture complaints seeking the forfeiture and recovery of approximately $38 million in assets allegedly associated with an international conspiracy to launder funds misappropriated from 1Malaysia Development Berhad (1MDB), a Malaysian sovereign wealth fund. Combined with civil forfeiture complaints filed in July 2016 seeking more than $1 billion in assets, and civil forfeiture complaints filed in June 2017 seeking approximately $540 million in assets, this case represents the largest action brought under the Department’s Kleptocracy Asset Recovery Initiative. Assets now subject to forfeiture in this case total approximately $1.7 billion.
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 Robert Johnson of the FBI’s Criminal Investigative Division and Chief Don Fort of the IRS Criminal Investigation (IRS-CI) made the announcement.
According to the 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. 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.
“These new lawsuits target assets collected by corrupt officials and their associates through a massive scheme that stole billions of dollars from the people of Malaysia and laundered the proceeds across the world,” said U.S. Attorney Nick Hanna. “Through a series of cases filed over the past three years, we have pursued a wide variety of assets purchased with stolen 1MDB funds, and so far we have successfully forfeited hundreds of millions of dollars. Collectively, these cases send a strong message that the United States cannot be used as a safe haven or a conduit for money pilfered by corrupt officials.”
“The complaints filed today demonstrate the Department of Justice’s steadfast commitment to recovering assets traceable to the alleged multi-billion dollar looting of Malaysia’s sovereign wealth fund,” said Assistant Attorney General Benczkowski.“The Criminal Division and our law enforcement partners are committed to protecting the U.S. financial system and ensuring that the proceeds of overseas corruption and other criminal conduct find no safe haven here.”
“Today’s announcement is a testament to the FBI’s relentless effort to investigate kleptocracy and hold corrupt foreign officials accountable,” said FBI Assistant Director Johnson. “At the onset of this investigation, we promised to work with our foreign and domestic partners to identify and return stolen assets to the Malaysian people.This filing demonstrates our unwavering commitment to keep that promise. We want to thank our partners, both domestic and foreign, for their hard work in helping to bring justice for the Malaysian people. The recovery of these assets is another step in that direction.”
“The investigation into the misappropriation of the 1MDB funds represents a model for international cooperation in significant cross-border money laundering matters, and sends a message that criminals cannot evade law enforcement authorities simply by laundering money through multiple jurisdictions and through a web of shell corporations,” said IRS-CI Chief Fort. “We are proud of the investigative work on this case and the work of our fellow law enforcement agencies in this and other complex financial investigations.”
As alleged in the complaints, the members of the conspiracy – which included officials at 1MDB, their relatives and other associates – diverted more than $4.5 billion in 1MDB funds. Using fraudulent documents and representations, the co-conspirators allegedly laundered the funds through a series of complex transactions and shell companies with bank accounts located in the U.S. and abroad. These transactions allegedly served to conceal the origin, source and ownership of the funds, and ultimately passed through U.S. financial institutions to then be used to acquire and invest in assets located in the U.S. and overseas.
As alleged in the earlier complaints, in 2009, 1MDB officials and their associates embezzled approximately $1 billion that was supposed to be invested to exploit energy concessions purportedly owned by a foreign partner. Instead, the funds were allegedly transferred through shell companies and were used to acquire a number of assets, as set forth in the complaints. The complaints also allege that the co-conspirators misappropriated close to $1.4 billion in funds raised through bond offerings in 2012, and more than $1.2 billion following another bond offering in 2013. The complaints also allege that in 2014, the co-conspirators misappropriated approximately $850 million in 1MDB funds under the guise of repurchasing certain options that had been given in connection with a guarantee of the 2012 bonds.
The complaints filed today in the Central District of California identify additional assets traceable to the 2012 and 2013 bond offerings. These assets include luxury real estate in London, proceeds from the sale of luxury real estate in New York City, and converted equity in a facilities management company headquartered in Kentucky.
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, Jonathan Baum, Barbara Levy and Joshua L. Sohn of the Criminal Division’s Money Laundering and Asset Recovery Section and Assistant U.S. Attorneys John Kucera and Michael R. Sew Hoy 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.
Federal Authorities Arrest Three Men Charged with Conspiring with L.A. Sheriff’s Deputy to Steal Marijuana and Cash in Sham SearchRead the Press Release
LOS ANGELES – Three men were arrested this morning on federal drug distribution charges alleging they conspired with a Los Angeles County sheriff’s deputy and others to steal more than 1,200 pounds of marijuana and $645,000 in cash and money orders during an armed robbery of a downtown Los Angeles warehouse that was staged to look like law enforcement was executing a search warrant.
Matthew James Perez, a.k.a. “Neer,” 42, of Ontario; Daniel Aguilera, 31, of East Los Angeles; and Jay Colby Sanford, a.k.a. “Monte Jay,” 41, of Pomona, were arrested this morning without incident. They are scheduled to make their initial court appearances this afternoon in United States District Court.
According to a criminal complaint unsealed today, Perez, Aguilera, and Sanford conspired with LASD Deputy Marc Antrim, 41, of South El Monte, and others to commit the early morning armed robbery on October 29. The off-duty Antrim, Perez and a third man arrived at the warehouse at 3:00 a.m. in an unmarked Ford Explorer registered to LASD. All three men were dressed as LASD deputies, were carrying holstered firearms, and posed as legitimate law enforcement officers executing a search warrant of the warehouse, court documents state. Perez, a convicted felon, also allegedly brandished a rifle.
After Antrim detained the warehouse’s three security guards inside the LASD Ford Explorer, Aguilera drove a large rental truck into the warehouse parking lot, which later was used to transport the stolen marijuana, two cash-filled safes and other items from the warehouse, according to court documents. During the robbery, Sanford allegedly served as a nearby look-out, scouting for potential law enforcement and remaining in contact with his co-conspirators via phone and walkie-talkie radios.
While the two-hour robbery was in progress, Los Angeles Police Department officers legitimately responded to a call for service at the warehouse, the complaint states. When LAPD officers arrived, Perez and the other man posing as a deputy discarded their LASD jackets and fled through a back door, along with Aguilera, according to court documents. Antrim allegedly remained at the warehouse, showed the LAPD officers his LASD badge, and falsely claimed that he was conducting a legitimate search.
Antrim then allegedly handed his phone to one of the LAPD officers so that the officer could speak to someone on the phone claiming to be Antrim’s LASD sergeant. According to court documents, however, the individual on the phone was not Antrim’s sergeant, and Antrim did not have a legitimate search warrant for the warehouse. Antrim’s falsehoods ultimately prompted the LAPD officers to leave the warehouse, thereby allowing Antrim and his co-conspirators time to complete the heist, court documents state.
According to the complaint, text messages between Antrim and another conspirator suggest that, for their assistance the night of the robbery, Perez was going to be paid $30,000, Sanford $10,000, and Aguilera $5,000.
Perez, Aguilera, and Sanford are charged with conspiracy to distribute controlled substances. If convicted of this offense, each man would face a statutory maximum sentence of 40 years in federal prison and a mandatory minimum of five years in prison.
Antrim and two other men who participated in the robbery were arrested in November. They since have signed plea agreements admitting to drug trafficking and gun charges related to the sham search, and are expected to enter guilty pleas in the coming weeks.
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.
This case is being investigated by the Federal Bureau of Investigation; the Drug Enforcement Administration; 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 Attorney Lindsey Greer Dotson of the Public Corruption and Civil Rights Section and Assistant United States Attorney Joseph D. Axelrad of the Violent and Organized Crime Section.
DEA-Led Crackdown on Prescription Opioid Diversion Targets Medical Professionals with Criminal Charges, License RevocationsRead the Press Release
LOS ANGELES – A series of investigations led by the Drug Enforcement Administration has resulted in the arrests of nine defendants, most of whom are medical professionals, on federal charges of diverting dangerous narcotics – primarily highly addictive opioids – to the black market.
Operation “Hypocritical Oath” targeted medical professionals with criminal charges, search warrants and administrative actions that led to the revocation of DEA licenses. The targets of the investigations – doctors, physician assistants, nurse practitioners and clinic operators – are suspected of illegally providing controlled substances to “patients” and black market customers in violation of their oaths to “do no harm.” Working with prosecutors from the United States Attorney’s Office, the DEA initiated the operation to combat the nationwide opioid epidemic by identifying, investigating and stopping entities responsible for the illicit diversion of large amounts of pharmaceutical controlled substances. The U.S. Department of Health and Human Services, Office of Inspector General worked in partnership with the DEA during Operation Hypocritical Oath.
Over the past week, DEA agents arrested six doctors, physician assistants and suspected drug traffickers on federal narcotics charges. In conjunction with the recent arrests, authorities executed 10 search warrants. Operation Hypocritical Oath also resulted in criminal cases against three other defendants – two of them doctors – and a series of administrative actions by the DEA that led to four medical practitioners losing their licenses.
“As we battle the opioid crisis with interdictions, the dismantling of trafficking organizations and community outreach, we cannot ignore corrupt medical professionals who flood our communities with those same drugs that are killing people each and every day across America,” said United States Attorney Nick Hanna. “Doctors and trained practitioners know better than anyone the twin dangers of addiction and overdose that come with powerful narcotics. Prosecutors in my office have targeted these drug dealers in lab coats for many years, and we will not rest until we see the end of abusive prescribing practices.”
“The successful conclusion of Operation Hypocritical Oath is a testament to not only the hard work of the men and women of the DEA, but is indicative of the terrific partnership with the U.S. Attorney’s Office and our federal, state, and local partners,” said DEA Los Angeles Special Agent in Charge David J. Downing. “Today’s arrests and administrative actions should put crooked medical professionals and street dealers alike on notice – we will not tolerate opioids being illegal pushed onto our streets.”
Recently Filed Cases
In a series of cases filed over the past week that allege the distribution of drugs while acting outside the usual course of professional practice and without a legitimate medical purpose, prosecutors have charged doctors, a physician assistant, and a nurse practitioner with illegally writing prescriptions, sometimes with the full knowledge that their “patients” were addicted to the drugs they were providing. In other cases, practitioners took advantage of their insider status to obtain illicit narcotics.
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Dr. Michael Anthony Simental, 47, of Corona, who practices at the Kaiser Permanente facility in Riverside, was arrested this morning on charges of illegally distributing hydrocodone, an opioid found in drugs such as Vicodin.
The investigation into Simental began after one of his patients died of a drug overdose last June. Records from the California Medical Board and Kaiser showed a string of disciplinary actions, complaints about his prescribing practices, and questions about his sobriety while working. A criminal complaint filed this week outlines numerous communications between Simental and the overdose victim, some of which indicate that Simental “was aware he was prescribing excessive volumes of opiate drugs” to the woman and her husband.
After the DEA executed search warrants in November, the husband of the overdose victim said he and his wife had been under Simental’s care for years, both had become addicted to opioids prescribed by Simental, and that “Simental would prescribe them whatever drugs they wanted,” according to the affidavit in support of the complaint. An outside expert who reviewed the medical records of the dead woman and her husband said they “were filled with confusing data and…made absolutely no sense.” A wider review of Simental’s prescribing history caused the expert to identify 100 patients who were “receiving potentially unlawful controlled drug prescriptions.”
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Gabriel Hernandez, 58, of Anaheim, a physician assistant who works at a Long Beach pain management clinic known as Vortex Wellness & Aesthetics, was arrested on Wednesday pursuant to a criminal complaint that charges him with distributing oxycodone without a legitimate medical purpose. Over a two-year period that ended in November, Hernandez prescribed nearly 6,000 controlled substances – more than half of which were for maximum-strength oxycodone, which means he was responsible for approximately 446,000 oxycodone pills being dispensed, according to court documents.
Hernandez often wrote prescriptions for drug cocktails known as the “holy trinity” – a narcotic, a tranquilizer and/or a muscle relaxant – which are sought out by drug addicts and are particularly dangerous because of the threat of fatal overdose, according to the affidavit in support of the complaint. In 2017, according to records maintained by the state of California, Hernandez wrote a “holy trinity” prescription to a 41-year-old man who died a week later from the combined effects of alcohol and two of the prescribed drugs, according to the criminal complaint. A San Diego pharmacist contacted investigators late last year about suspicious and identical prescriptions Hernandez wrote to three people who appeared to be living in the same house over a hundred miles away from the Vortex clinic.
A medical expert who reviewed data on Hernandez’s prescription history and tapes of two office visits by a law enforcement source concluded that Hernandez’s “actions are much closer to that of an illegal drug dealer than that of a physician, and the patient visits are a sham.”
Hernandez made his initial court appearance Wednesday afternoon before a United States Magistrate Judge, who released Hernandez on bond and scheduled an arraignment for March 28.
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Dr. Reza Ray Ehsan, 60, of Bel-Air, was arrested this morning on charges that allege he unlawfully sold controlled drugs to an agent posing as a patient during undercover meetings in December 2018 and January 2019. As documented in an affidavit in support of a search warrant for Ehsan’s medical files, he sold more than 700,000 pills – mostly opioid painkillers – in 2015 and 2016, and he did not report the sales to the Controlled Substance Utilization Review and Evaluation System (CURES), a prescription drug monitoring program that California uses to track the distribution of prescription medication.
Ehsan ordered large quantities of maximum-strength hydrocodone – the kind most sought after on the black market – and sold the pills directly to his “patients,” according to court documents that note many of Ehsan’s “patients” traveled long distances to his Westside medical office and paid for prescriptions in cash or with credit cards instead of through their health insurance plan.
An 18-count indictment also alleges that Ehsan structured cash deposits to prevent banks from submitting mandatory reports for currency transactions exceeding $10,000. Subpoenaed bank records show that, between January 2014 and February 2018, Ehsan deposited more than $1 million in cash into accounts held in the names of himself, his business and his close relatives – all of which were less than $10,000. Most of the deposits during that time were between $9,000 and $9,960, according to the indictment.
Ehsan is charged with two counts of knowingly and intentionally distributing the buprenorphine (a powerful opioid sold under the brand name Subutex), one count of illegally distributing diazepam (best known under the brand name Valium), one count of distributing amphetamine salts (often sold under the brand name Adderall), and 14 counts of structuring financial transactions to evade detection by law enforcement.
UPDATE
The description of the case against Saloumeh Rahbarvafaei, below, erroneously states that agents purchased prescriptions from Rahbarvafaei and references a report that concluded she was providing prescriptions for large monetary gain. In fact, the undercover officers did not directly pay Rahbarvafaei, but actually paid cash at the front desk before their visits with Rahbarvafaei. On August 18, 2022, a federal jury found Rahbarvafaei not guilty of all criminal charges filed against her.
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Saloumeh Rahbarvafaei, 40, of Northridge, a nurse practitioner employed at several locations, including the Good Neighbor Clinic in Leimert Park, was arrested this morning on charges of unlawfully distributing hydrocodone.
According to the criminal complaint filed in this case, undercover agents purchased prescriptions from Rahbarvafaei during five separate transactions last year. Rahbarvafaei allegedly did not examine either of the two undercover federal agents, and her meetings with them lasted a few minutes each. In each of the five meetings, the agents paid Rahbarvafaei in cash and in return she provided them prescriptions for several narcotics, including hydrocodone, court documents state.
Undercover video of the medical office where Rahbarvafaei worked showed the waiting room usually was overflowing with patients who typically were seen for very short periods of time in Rahbarvafaei’s office, not in an examination room, court papers state. A physician conducting an expert review of the CURES data in this case wrote that Rahbarvafaei has “abandoned the practice of legitimate medicine” and she was selling dangerous narcotics to large numbers of people for “large monetary gain.”
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Monica Ann Berlin, 41, of Del Mar, a former employee at a doctor’s office in Beverly Hills and who is presently with a Del Mar-based company that offers perioperative care services, was arrested last Thursday pursuant to a criminal complaint charging her with distribution and possession of a controlled substance. Berlin allegedly stole a signature stamp and prescription pads belonging to the doctor who employed her, and she used them to write fraudulent prescriptions and distribute controlled substances to others.
Between April 2015 and April 2017, Berlin allegedly forged at least 44 prescriptions for controlled substances that another person filled at pharmacies in Beverly Hills and Rancho Santa Fe. In exchange for the drugs, Berlin’s buyer treated her to lavish dinners and bought her gifts. According to the complaint, Berlin sent text messages to her buyer using coded language by describing the drugs as “candies” and “Tic Tacs.”
Berlin made her initial appearance in United States District Court in San Diego on February 14, at which time she was ordered released on a $1 million bond. Berlin is expected to appear in federal court in Los Angeles next month.
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Ana Leblanc, 33, of Chino Hills, who worked at a Santa Ana clinic for two weeks last year, was arrested this morning on charges of fraudulently obtaining prescription drugs.
According to a criminal complaint, Leblanc, who has no authority to handle or prescribe controlled substances, used a prescription pad from her employer to write prescriptions for controlled substances, including oxycodone, to herself and others without the knowledge or approval of the doctor listed on the prescription script. In addition, she created a patient chart for herself at her place of employment, “diagnosed” herself with anxiety, and ordered Xanax from the clinic’s medication supply.
The defendants arrested this morning are expected to make their first court appearances this afternoon in United States District Court in Los Angeles, Riverside and Santa Ana.
Previously Filed Cases
As part of Operation Hypocritical Oath, prosecutors previously charged two doctors and a third man who allegedly engaged in a sophisticated scheme to obtain drugs that he subsequently sold on the internet.
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Dr. Robert Tinoco Perez, 57, of Westminster, is scheduled to plead guilty on Monday to a conspiracy charge in which he admits writing fraudulent prescriptions to a drug dealer, who then sold the drugs for cash and shared the profits with Perez.
Perez, who has agreed to plead guilty to one count of conspiracy to distribute controlled substances, admitted in a plea agreement filed January 29 that he wrote prescriptions for Adderall, oxycodone and hydrocodone between December 2017 and June 2018 to a convicted felon and drug dealer. Perez used bogus patient names to write the fraudulent prescriptions to William Jason Plumley, who sold the prescribed drugs – and also heroin and methamphetamine – to an undercover law enforcement officer. Plumley pleaded guilty to conspiracy to distribute controlled substances and was sentenced in December to 70 months in federal prison.
Perez is scheduled to appear on Monday before United States District Judge Andrew J. Guilford in Santa Ana.
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Christopher James Lazenby, 28, of Homeland, allegedly stole physicians’ DEA numbers and their dates of birth, which allowed him to use the DEA’s online registration system to change the addresses of eight doctors to mailboxes he had rented in South Los Angeles and Carson. Lazenby changed the address of a ninth doctor to show his medical office was a room at a Motel 6 in Inglewood, according to an affidavit filed with the criminal complaint in the case.
With official records showing new addresses for the doctors, Lazenby allegedly forged the doctors’ signatures on counterfeit prescriptions and ordered oxycodone, hydrocodone and Adderall to be sent to the addresses he controlled. After receiving the narcotics, Lazenby used the dark web and Craigslist to advertise the drugs for sale, court documents allege.
Lazenby was arrested in October at a long-term hotel in Torrance. A criminal complaint charges Lazenby with fraudulently obtaining a controlled substance. Lazenby’s arraignment is scheduled for March 15.
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Dr. Dzung Ahn Pham, 57, of Tustin, was arrested late last year on federal charges of illegally distributing narcotics by writing prescriptions for the “holy trinity” cocktail for “patients” he didn’t examine. Pham has pleaded not guilty to charges contained in a six-count indictment that was returned by a federal grand jury on January 16. If Pham is convicted in this case, he would face a statutory maximum sentence of 120 years in federal prison. A trial in this case is scheduled for March 12.
Indictments and criminal complaints contain allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.
The charge of illegally distributing prescription narcotics carries a statutory maximum sentence of up to 20 years in federal prison.
In addition to the criminal cases being announced today, the DEA took administrative actions to suspend or revoke the ability to prescribe medications against several medical practitioners who are DEA registrants.
These cases were investigated by the Drug Enforcement Administration and the U.S. Department of Health and Human Services, Office of Inspector General.
This operation was assisted by the Department of Justice Criminal Division’s Fraud Section Health Care Fraud Strike Force in Los Angeles.
The following agencies provided substantial assistance during Operation Hypocritical Oath: The United States Department of Veterans Affairs, Office of Inspector General; IRS Criminal Investigation; the California Department of Consumer Affairs, Division of Investigation; the California Bureau of Medi-Cal Fraud and Elder Abuse; the California State Board of Pharmacy; the Medical Board of California; the California Department of Consumer Affairs, Division of Investigation; the California Department of Health Care Services; the Ventura County Combined Agency Narcotic Task Force; the Los Angeles County District Attorney’s Office, Bureau of Investigations; the Orange County Sheriff’s Department; the Los Angeles County Sheriff’s Department; the LASD Heath Authority Law Enforcement Task Force; Orange County Children & Family Services; the Irvine Police Department; the Santa Ana Code Enforcement Division; the Costa Mesa Police Department; and the Los Angeles Police Department.
Most of the cases announced today are being prosecuted by Assistant United States Attorney Ben Barron of the Organized Crime Drug Enforcement Task Force. AUSA Barron also coordinated Operation Hypocritical Oath for the United States Attorney’s Office.
Some of the cases are being prosecuted by or with Assistant United States Attorneys Sara B. Milstein (Berlin), Puneet V. Kakkar (Hernandez), Veronica M.A. Alegría (Ehsan), Benedetto Balding (Rahbarvafaei), Benjamin Weir (Leblanc), Rosalind Wang (Perez), Gregory Staples (Pham) and Brett Sagel (Pham).
In addition to the criminal actions announce today, the United States Attorney’s Office has an Opioid And Fentanyl Awareness Initiative in which federal prosecutors make presentations at schools and to community groups to educate the public on the dangers and the scope of the opioid epidemic.
Berlin Complaint
Ehsan Indictment
Ehsan Search Warrant
Hernandez Complaint
Lazenby Complaint
Leblanc Complaint
Perez Plea Agreement
Pham Indictment
Rahbarvafaei Complaint
Simental Complaint-
Federal Grand Jury Indicts Corona Lawyer Found with Illegal Guns, Silencers, Hand Grenade and Fake FBI CredentialRead the Press Release
LOS ANGELES – A California lawyer and former Rialto police officer was indicted today by a federal grand jury after he was found with a fake FBI credential, a hand grenade, silencers and several illegal firearms, including a loaded AR-type semiautomatic rifle.
Sergio Lopez de Tirado, 43, of Corona, was named today in a five-count indictment that charges him with two counts of possession of unregistered firearms, two counts of possession of firearms without a serial number, and one count of possession of a fraudulently made government seal.
A Riverside County sheriff’s deputy found Lopez de Tirado on December 21 asleep in the passenger’s side of a pickup truck that was parked with its doors wide open blocking a driveway in Norco. According to a criminal complaint previously filed in this case, Lopez de Tirado appeared intoxicated, had difficulty stepping out of the truck and identified himself as former “Rialto PD.” Lopez de Tirado was found to have multiple loaded firearms, a knife in a sheath on his person, and a hand grenade in a holster under his arm.
A subsequent search of the truck allegedly produced a fraudulent FBI credential. The search also produced multiple firearms, including an unregistered MK9 9mm semiautomatic rifle and two unregistered firearm silencers, according to the affidavit in support of the complaint. All of the firearms recovered from the vehicle are alleged to have been loaded, including the AR-type rifle with a mounted silencer. Lopez de Tirado was taken into state custody, and was subsequently released after posting bail.
During the early morning hours of January 30, a California Highway Patrol officer found Lopez de Tirado and a passenger in a pick-up truck parked the wrong way on the right shoulder of Interstate 15 in Corona, the affidavit states. The officer determined that Lopez de Tirado’s driver’s license had been suspended and ordered his truck impounded. A search of the truck produced a loaded and unregistered short barrel AR-type semiautomatic rifle, according to the affidavit.
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.
Lopez de Tirado is scheduled to be arraigned on the indictment on February 27 in United States District Court.
Lopez de Tirado, who has been in federal custody since he was arrested pursuant to the criminal complaint on February 1, faces a statutory maximum sentence of 10 years in federal prison for each of the four firearm-related charges and five years on the fraudulent government seal possession charge.
This case was investigated by the FBI’s Inland Empire Joint Terrorism Task Force and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Substantial assistance was provided by the Riverside County Sheriff’s Department, the Rialto Police Department and the California Highway Patrol.
This case is being prosecuted by Assistant United States Attorney Reema M. El-Amamy of the Terrorism and Export Crimes Section.
Former Cheerleading Coach Who Committed Sexual Assault on Cruise Ship Found Guilty of Two FeloniesRead the Press Release
LOS ANGELES – A former cheerleading coach has been found guilty of two federal felony charges for sexually assaulting an intoxicated woman on a cruise ship bound from Long Beach to Ensenada, Mexico during the summer of 2015.
Anthony Paul De La Torriente, 30, of Simi Valley, on Wednesday was found guilty by a jury of one count of sexual abuse and one count of abusive sexual contact. In reaching the verdict, the jury found that De La Torriente knew the victim was physically unable to decline participation or she had communicated unwillingness to engage in the sexual act.
United States District Judge Dale S. Fischer has scheduled a June 10 sentencing hearing, where De La Torriente faces a statutory maximum sentence of life in federal prison.
During the one-week trial, prosecutors presented evidence that De La Torriente volunteered to stay alone in the victim’s cabin with the victim, whose severe intoxication from a daytime excursion in Ensenada had worried their colleagues, while the colleagues got food on the cruise ship. Once alone with the victim, De La Torriente sexually assaulted her. When their colleagues returned, they found the victim’s cabin door had been double-locked from the inside. When De La Torriente eventually unlocked the door and allowed their colleagues inside, the victim identified De La Torriente as her assailant.
The victim reported the assault to the cruise ship’s medical and security staff. Swabs taken from the victim’s body matched De La Torriente’s DNA while swabs taken from inside and outside of his underwear matched the victim’s DNA.
This case was investigated by the Federal Bureau of Investigation.
This case is being prosecuted by Assistant United States Attorneys Cassie D. Palmer of the Public Corruption and Civil Rights Section and Jeffrey M. Chemerinsky of the Violent and Organized Crime Section.
Ex-Fannie Mae Employee Found Guilty in Multi-Million Dollar Scheme Involving Property Listings and Approval of Below-Market SalesRead the Press Release
SANTA ANA, California – A former employee of Fannie Mae in Irvine has been found guilty of federal fraud charges related to bribes and kickbacks she took from brokers in exchange for Fannie Mae real estate listings and her approval of discounted sales of Fannie Mae-owned properties.
Shirene Hernandez, 46, of Corona, was found guilty on Tuesday of two wire fraud counts that involved the deprivation of honest services. Following the guilty verdicts on Tuesday, a federal jury on Wednesday found that Hernandez must forfeit a piece of property she derived from her criminal conduct.
According to the evidence presented at a five-day trial, Hernandez was a sales representative at the Federal National Mortgage Association (Fannie Mae), a government-sponsored entity under the conservatorship of the Federal Housing Finance Agency (FHFA). As part of its operations, Fannie Mae acquires properties through foreclosures and other methods, and then manages and sells those properties for Fannie Mae’s benefit. Since at least 2012, Fannie Mae’s profits have gone to the United States Treasury Department for the benefit of the U.S. taxpayer.
As a sales representative, a position she held from 2010 until 2015, Hernandez assigned Fannie Mae-owned properties to real estate brokers and approved sales of the properties based on offers the brokers submitted. In violation of Fannie Mae rules and federal law, Hernandez approved sales of Fannie Mae-owned properties at discounted prices to herself and to the brokers who paid her kickbacks. She also received bribes – mostly in cash payments – in return for listings and commissions that brokers earned on real estate sales.
Hernandez also assigned listings to family members who received nearly $2 million in commissions in less than three years. For her part in the scheme, Hernandez received more than $1 million in benefits, including the cash kickbacks and equity in a property she obtained with kickback money.
As part of the scheme, Hernandez purchased a Fannie Mae-owned property in Sonoma that she was responsible for selling, after she rejected higher, market-priced offers in favor of her own below-market price. Hernandez purchased the Sonoma property through intermediaries and affiliates that she controlled, selling it first to a company affiliated with a broker who was bribing her, then directing the broker to transfer the property to her sister-in-law, who paid for the property with a duffel bag filled with $286,450 in cash she received from Hernandez – far below the market price. The Sonoma property was rented out and Hernandez received the rent proceeds. The jury on Wednesday found this property – which now is worth hundreds of thousands of dollars more than the purchase price – should be forfeited to the U.S. government.
United States District Judge Andrew J. Guilford has scheduled a May 13 sentencing hearing for Hernandez, who faces a statutory maximum of 20 years in federal prison on each of the two felony offenses.
The case was investigated by the Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG).
The prosecution is being handled by Assistant United States Attorney Kerry L. Quinn of the Major Frauds Section and Assistant United States Attorney Ian V. Yanniello of the General Crimes Section.
Ex-Accounting Manager Charged with Embezzling $36 Million from a Company Client Has Been Extradited from Costa RicaRead the Press Release
LOS ANGELES – A former accounting manager who is facing 10 wire fraud counts for allegedly embezzling more than $36 million from his employer’s client and then using the bulk of the ill-gotten funds to pay off tens of millions of dollars of his credit card debt has been extradited to the United States from Costa Rica.
Paul McDaniel, 42, a.k.a. “Edward Martin Karuku,” who resided in the City of Orange before fleeing to Costa Rica in early 2017, arrived this afternoon in Los Angeles after extradition proceedings in Costa Rica. McDaniel is scheduled to be arraigned Friday afternoon in United States District Court.
From July 2009 until December 2016, McDaniel allegedly embezzled the funds from Hypermedia Systems, Inc., a media technology services firm based in downtown Los Angeles. McDaniel was initially an independent contractor for and then an employee of E-Times Corp., a downtown Los Angeles-based professional services firm providing accounting assistance to Hypermedia Systems. McDaniel was assigned to work at Hypermedia as an accounting manager. As part of his job, he would request payments to be made from a Hypermedia account to pay purported Hypermedia vendors.
According to the indictment filed in September 2017, during the time he was working with Hypermedia McDaniel formed a Nevada corporation with a name similar to one of Hypermedia’s vendors and then opened a bank account – under which he had complete control – in that entity’s name. He then allegedly used his authority as Hypermedia’s accounting manager to approve and direct payments totaling more than $36 million to this bank account. To justify the payments, McDaniel allegedly created false and fictitious invoices on the letterhead of actual Hypermedia vendors, falsely stating that particular goods had been provided to the company. The fraudulent payments were wired to the McDaniel-controlled bank account.
McDaniel used the funds to pay off $23 million in credit card bills and transferred another $8 million to his personal bank accounts, according to the indictment. Investigators believe he spent additionally millions of dollars on miscellaneous expenses.
McDaniel was arrested in Costa Rica in 2017 pursuant to a provisional arrest warrant filed by the United States. He was held in custody during extradition proceedings.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Each of the 10 counts of wire fraud charges in the indictment carries a statutory maximum penalty of 20 years in federal prison.
This case was investigated by the Federal Bureau of Investigation. The United States Attorney’s Office extends its appreciation to the Costa Rican authorities who assisted in apprehending the defendant, and the Department of Justice Office of International Affairs for assisting with the extradition as well as the United States Department of State Diplomatic Security Service and the United States Marshals Service for their assistance in this matter.
This case is being prosecuted by Assistant United States Attorney Poonam G. Kumar of the Major Frauds Section.
Vineland Boys Street Gang Targeted in Federal Racketeering Indictment that Alleges Violence, Extortion and Narcotics TraffickingRead the Press Release
LOS ANGELES – Law enforcement authorities this morning arrested 25 members and associates of the San Fernando Valley-based Vineland Boys street gang who are charged in five federal grand jury indictments that allege a wide range of criminal activity, including shootings and assaults that targeted rivals, extortion and methamphetamine trafficking.
The five indictments charge a total of 45 defendants. The main indictment alleges that 31 Vineland Boys members and associates participated in a criminal enterprise and conspired to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act. To consolidate control over their “territory” in Sun Valley, North Hollywood and Burbank, the gang shot and brutally assaulted rival gang members, controlled and conducted drug and firearms trafficking activity, and extorted money in the form of “taxes” from drug dealers, and trafficked narcotics, the indictment alleges.
The RICO indictment details numerous violent incidents involving the gang, including an April 2016 incident where a rival gang member was shot on Lankershim Boulevard. The investigation revealed that the gang was heavily armed and often engaged in illegal firearm sales. One non-gang defendant allegedly manufactured “ghost guns” – AR-15-type weapons with no serial numbers, which makes them untraceable – that were sold to the gang to use in crimes because so many members were prohibited from legally purchasing firearms due their prior felony convictions.
The RICO indictment unsealed today detail multiple narcotics transactions, including two that each involve approximately two pounds of methamphetamine.
The other four indictments cumulatively charge 14 other defendants with supplying methamphetamine to the Vineland Boys, with some transactions taking place near an elementary school.
Today’s arrests come 14 years after law enforcement severely disrupted the Vineland Boys with a series of federal indictments that came in the wake of the 2003 murder of Burbank Police Officer Matthew Pavelka and the attempted murder of his partner, Detective Greg Campbell. Those indictments resulted in more than four dozen convictions, and led to two defendants receiving sentences of life without parole in federal prison.
“Our first attack on this street gang dealt a punishing blow to its operations and sent a message that law enforcement would not tolerate their violent acts and drug trafficking,” said United States Attorney Nick Hanna. “Unfortunately, a new generation of gangsters has come of age and tried to revive the organization’s control of drug trafficking through violence. This takedown will provide significant relief to the law-abiding residents of the east San Fernando Valley, and it sends a strong message to the gang that we will continue our efforts to crush their organization until they no longer pose any threat.”
“The tools of the gang trade are intimidation, violent crime and extortion,” said Paul Delacourt, the Assistant Director in Charge of the FBI's Los Angeles Field Office. “By announcing these distinct operations with our law enforcement partners, we hope to show that these tactics – and these gangs – are not tolerated in Los Angeles.”
“The Los Angeles Police Department is extremely grateful for the culmination of a collaborative task force with our federal partners that led to a well-planned, comprehensive and strategic operation,” said LAPD Assistant Chief Robert Arcos. “Today’s arrests focused on individuals who not only committed extremely violent crimes, but who also have been involved in violent attacks against innocent people in our communities. The Los Angeles Police Department stands committed, with our federal partners, to continue to reduce violent crime in Los Angeles, and to interrupt organizations and apprehend those responsible.”
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 25 defendants arrested today are scheduled to make their initial court appearances this afternoon in United States District Court.
In addition to the today’s arrests, 11 defendants were already in custody. Authorities are continuing to search for nine fugitives, four of whom are believed to be currently in Mexico.
The investigation targeting the Vineland Boys was conducted by the Federal Bureau of Investigation, the Los Angeles Police Department and IRS Criminal Investigation.
The case is being prosecuted by Assistant United States Attorney Jennifer Chou of the Violent and Organized Crime Section.
Federal Indictments Target South Los Angeles Street Gang Involved in Drug Trafficking, Extortion and Attempted MurderRead the Press Release
LOS ANGELES – Authorities have arrested 11 members and associates of the South Los Angeles-based Florencia-13 (F13) street gang on federal racketeering, narcotics and firearms charges. One of the indictments unsealed today alleges that defendants linked to the gang trafficked methamphetamine, heroin, cocaine and other drugs in their territory and attempted to smuggle narcotics into the state prison system.
Those arrested today are among 36 members and associates of the F13 gang named in six federal grand jury indictments. One of the indictments alleges that the gang is a criminal enterprise as defined by the Racketeer Influenced and Corrupt Organizations (RICO) Act. Twenty-six members and associates of the gang allegedly conspired to violate RICO and engaged in drug trafficking, illegal gambling, attempted murder and assault. The RICO indictment also alleges that the gang actively attempted to smuggle narcotics into the California state prison and Los Angeles County jail systems, including attempting to mail two shipments totaling 100 grams of heroin to an imprisoned Mexican Mafia member.
The lead defendant in RICO indictment – Leonel Laredo, a.k.a. “Wizard,” 47, who is currently incarcerated at a federal prison in Beaumont, Texas – allegedly directed F13’s operations in the unincorporated Florence-Firestone neighborhood of South Los Angeles, as well as parts of Lynwood, Maywood, Bell and other nearby communities. Laredo, who is serving a sentence for prior racketeering and drug convictions related to his F13 activities, is one of four members of the Mexican Mafia prison gang who allegedly had leadership roles in the gang. The indictment alleges that Laredo ran the street gang from prison with a goal of enriching himself, family members and associates through extortionate “taxes” taken from drug dealers and businesses in F13’s territory.
The RICO indictment also alleges that F13 members were responsible for the shooting and attempted murder of a rival gang member in South Los Angeles in December 2016. In April 2017, one defendant, Samuel Flores Mejia, a.k.a. “Menace,” shot and wounded a fellow F13 member to discipline him at one of the gang’s “casitas,” or illegal gambling houses.
A second indictment unsealed today alleges that five F13 members and associates, working out of a South Los Angeles hookah lounge, participated in a scheme to distribute methamphetamine. A third indictment charges two F13 members with being felons in possession of a firearm and ammunition, namely an AK-47-type rifle. The remaining three indictments charge three individual F13 members and associates with distributing of methamphetamine.
Out of the 36 defendants named in the six indictments, 11 were arrested today, 16 were already in custody, and authorities are searching for nine fugitives.
The defendants taken into custody this morning are scheduled to make their initial court appearance this afternoon in United States District Court.
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 case was investigated by the Federal Bureau of Investigation and the Los Angeles Police Department. The California Department of Corrections and Rehabilitation provided substantial assistance. The Joint Regional Intelligence Center provided support during the investigation.
This case is being prosecuted by Assistant United States Attorney Christopher C. Kendall of the Organized Crime Drug Enforcement Task Force Section.
South Bay Man Who Trafficked Hundreds of Pounds of Cocaine from Mexico Sentenced to More than 11 Years in Federal PrisonRead the Press Release
LOS ANGELES – A Torrance man who led a drug ring that used couriers to traffic hundreds of pounds of cocaine from Mexico into the United States and Canada has been sentenced to 135 months in prison on federal felony drug- and money laundering-related charges.
Richard Manuel Pimentel, 45, received the sentence of 11 years and three months’ imprisonment on Monday and was fined $300,000 by United States District Judge Dale S. Fischer.
In October 2018, Pimentel pleaded guilty to one count of conspiracy to distribute cocaine and one count of conspiracy to engage in money laundering.
Pimentel is the fourth and final defendant sentenced in this case by Judge Fischer. His co-defendants, who each pleaded guilty to felony charges in the case, are:
Enrique Rodriguez, 47, of North Hills, who was sentenced to 145 months in federal prison;
Rodolfo Pimentel (Richard Pimentel’s brother), 46, of Palos Verdes Estates, who was sentenced to 87 months; and
Javier Rodriguez, 34, of Mar Vista, who received a 46-month prison sentence.
Between February 2013 and October 2014, Richard Pimentel coordinated with his co-defendants and other co-conspirators to distribute approximately 220 pounds (100 kilograms) of cocaine, according to court documents. He admitted in his plea agreement that he arranged for couriers to transport cocaine obtained from drug suppliers in Mexico to locations in the United States and Canada. He also admitted that he and his co-defendants arranged for the proceeds from cocaine sales – minus their fees – to be sent back to Mexico. Pimentel and his co-conspirators used their cocaine trafficking proceeds to buy vehicles, home improvement and jewelry, among other items of personal use, according to court documents.
He also admitted to arranging the cash payment of a $400,000 debt owed to a cocaine supplier in September 2013, his plea agreement states.
This case was investigated by the Drug Enforcement Administration and IRS Criminal Investigation, with assistance from the Torrance Police Department.
This case is being prosecuted by Assistant United States Attorneys Puneet V. Kakkar of the Organized Crime Drug Enforcement Task Force Section and Cassie D. Palmer of the Public Corruption and Civil Rights Section.
Members of Hacker Collective Face Federal Charges for Attacking Computer Systems, Emailing Mass Hoax Bomb and Shooting ThreatsRead the Press Release
LOS ANGELES – Federal authorities today arrested one of two defendants charged in a federal indictment with making false threats of violent attacks at many locations – including Los Angeles International Airport and numerous Southern California school districts – and staging attacks on computer systems belonging to institutions and companies, including a Long Beach-based company.
The two defendants allegedly are members of the Apophis Squad, a worldwide collective of computer hackers and swatters intent on using the internet to cause chaos. The collective caused disruptions by making threatening phone calls, sending bogus reports of violent school attacks via email, and launching distributed denial-of-service (DDoS) attacks on websites.
Timothy Dalton Vaughn, 20, of Winston-Salem, North Carolina – who used online handles that include “WantedbyFeds” and “Hacker_R_US” – was arrested this morning by special agents with the FBI.
The second defendant named in the indictment – George Duke-Cohan, 19, of Hertfordshire, United Kingdom, who used online handles that included “DigitalCrimes” and “7R1D3N7” – is currently serving a prison sentence in Britain for making a hoax threat targeting an airliner, a threat that is detailed in the indictment unsealed today.
The indictment alleges that Apophis Squad conducted cyber and swatting attacks against individuals, businesses, and institutions in the U.S. and the United Kingdom. Members made threats of bombs and school shootings that were “designed to cause fear of imminent danger and did cause the closure of hundreds of schools on two continents on multiple occasions,” according to the indictment.
The conspiracy alleged in the indictment spanned the first eight months of 2018, during which members of Apophis Squad communicated various threats – sometimes using “spoofed” email addresses to make it appear the threats had been sent by innocent parties, including the mayor of London. They also allegedly defaced websites and launched denial-of-service attacks. In addition, Vaughn allegedly conducted a DDoS attack that took down hoonigan.com, the website of a Long Beach motorsport company, for three days, and sent extortionate emails to the company demanding a Bitcoin payment to cease the attack.
The indictment also alleges that Duke-Cohan called the FBI field office in Omaha, Nebraska on multiple occasions, discussed the deployment of deadly pathogens in the office, and threatened to rape and kill the wife of the FBI personnel who answered the phone.
Vaughn bragged in an online forum that Apophis Squad had targeted over 2,000 schools in the United States and more than 400 in the United Kingdom, according to the indictment, which details threats about imminent shootings and bombs being sent to school districts across Southern and Central California. Duke-Cohan allegedly posted a message on Twitter taking credit for the hoax emails on behalf of Apophis Squad in which he said, “We are OPEN for request for school lockdowns / evacs.”
The Apophis Squad also took credit for hacking and defacing the website of a university in Colombia, resulting in visitors to the site seeing a picture of Adolf Hitler holding a sign saying “YOU ARE HACKED” alongside the message “Hacked by APOPHIS SQUAD.”
The 11-count indictment, which was returned by a federal grand jury on February 8 and unsealed today, charges Vaughn and Duke-Cohan with conspiracy and eight additional felony offenses, including making threats to injure in interstate commerce and making interstate threats involving explosives. Vaughn is additionally charged with intentionally damaging a computer and interstate threat to damage a protected computer with intent to extort.
Vaughn is expected to make his initial court appearance in the Middle District of North Carolina this afternoon.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
If he is convicted of all 11 charges in the indictment, Vaughn would face a statutory maximum sentence of 80 years in federal prison. If he is convicted of the nine charges in the indictment in which he is named, Duke-Cohan would face a statutory maximum sentence of 65 years in federal prison.
This case is the result of an investigation by the Federal Bureau of Investigation, with assistance provided by the United States Secret Service as part of the Electronic Crimes Task Force.
This case is being prosecuted by Assistant United States Attorney Jennie L. Wang of the Cyber & Intellectual Property Crimes Section.
Jewelry District Business Owner Pleads Guilty to Money LaunderingRead the Press Release
LOS ANGELES – A precious metals trader based in the Los Angeles Jewelry District pleaded guilty today to a money laundering charge after being caught in an undercover operation where he agreed to conceal what was described to him as more than $200,000 in drug trafficking proceeds.
Saeed Elyahouzadeh, 53, of Westwood, who owns and operates R.S.D. Trading Co., entered his guilty plea to one felony money laundering charge before United States District Judge Dale S. Fischer.
According to a plea agreement filed in this case, between April 2015 and December 2017 Elyahouzadeh took part in four financial transactions with the intent to launder illicit drug proceeds through the use of his jewelry business. An undercover federal agent told Elyahouzadeh that the proceeds being laundered were the result of drug trafficking, according to court documents.
For example, on April 22, 2015, Elyahouzadeh met with an undercover law enforcement agent who asked him to “clean” $18,000 that was generated through cocaine sales, the plea agreement states. Elyahouzadeh agreed to launder the $18,000 in exchange for a $1,000 fee. In the weeks that followed that meeting, Elyahouzadeh arranged for multiple checks to be deposited into a bank account provided by the undercover agent, according to court documents. On three subsequent occasions – in June 2015, November 2017 and December 2017 – Elyahouzadeh agreed to launder a total of $200,000 from the undercover agent in exchange for a total of $11,000, court papers state. Typically, Elyahouzadeh would agree to launder the money in exchange for between 5 percent and 6 percent of the given amount. In the weeks following each of those meetings with the undercover agent, Elyahouzadeh arranged for multiple checks to be deposited into the bank account that the undercover agent provided, according to his plea agreement.
Judge Fischer is scheduled to sentence Elyahouzadeh on July 15 at which time he will face a statutory maximum sentence of 20 years in federal prison.
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, IRS Criminal Investigation, and the Drug Enforcement Administration
This matter is being prosecuted by Assistant United States Attorney Aron Ketchel of the Public Corruption and Civil Rights Section.
Three Federal Cases Allege Illegal Importation and Sale of ‘Herbal’ Sexual Enhancement Pills that Contained Pharmaceutical DrugsRead the Press Release
LOS ANGELES – Four companies and three individuals have agreed to plead guilty to federal criminal charges related to the illegal importation and sale of $11 million worth of pharmaceutical-grade erectile dysfunction drugs that were falsely marketed as herbal remedies for men.
Federal prosecutors today filed two new cases against distributors of the misbranded drugs.
In one of the cases filed today in United States District Court, Jin Su Park, 40, of Hacienda Heights, agreed to plead guilty to one felony count of importing contraband into the United States and one felony count of introducing misbranded drugs into interstate commerce. Park’s company, RNG Global Management and Trading Group, Inc., based in Rowland Heights, agreed to plead guilty to two felony counts of introducing misbranded drugs into interstate commerce.
In another case filed today, Lancaster Distributors, Inc., a Salem, Oregon-based company, and one of its employees, Matthew Burroughs, 42, of Salem, each agreed to plead guilty to one misdemeanor count of conspiracy to introduce misbranded drugs into interstate commerce.
Last month, Park’s friend and former colleague, John Seil Lee, 40, of Walnut, agreed to plead guilty to a seven-count information that charged him with felony counts of conspiracy, importing contraband into the United States, filing a false tax return, and introducing misbranded drugs into interstate commerce. Lee’s companies – KHK International Trade Enterprise, Inc., and SHH World Trading Enterprises, Inc. – also agreed to plead guilty to the charges.
According to the documents filed in Lee’s case, from 2011 through early 2017, Lee illegally imported shipments of powder Tadalafil – a prescription drug used to treat erectile dysfunction and sold under the brand name Cialis – from suppliers in China. Lee then manufactured the powder Tadalafil into at least 5.5 million pills that he sold to distributors across the United States. In order to boost sales, Lee made the pills with up to 14 times the level of Tadalafil contained in Cialis, court papers state.
Lee sold at least $11 million worth of pills across the United States – under names such as “X Again,” “X Monster” and “Royal Master” – with labels that did not disclose the presence of Tadalafil and falsely stated that no prescription was necessary, according to court documents. Lee also continued selling the pills despite FDA announcements that the pills were tainted because they contained undeclared Tadalafil. In order to evade federal regulators, Lee relabeled the tainted pills in response to FDA announcements about their safety, the information states. For example, in August 2016, after the FDA announced that SHH’s “One More Knight” pills contained undisclosed Tadalafil, Lee rebranded the same pills as “Own the Knight” and continued selling them.
After Lee closed SHH following the execution of federal search warrants in February 2017, his friend Park set up RNG Global to operate as a copycat business, according to Park’s plea agreement. Park took 14,000 of Lee’s pills, rebranded them as “EEZZY UP PLATINUM,” and sold them to Lee’s former distributors across the country. EEZZY UP’s packaging also failed to disclose that the pills contained Tadalafil.
In its plea agreement, Lancaster admitted that it purchased from Lee at least 153,000 male sexual enhancement pills containing Tadalafil for approximately $362,000. Burroughs admitted to purchasing the mislabeled drugs on behalf of Lancaster.
The arraignments for Lee, KHK, and SHH have been scheduled for February 19. Once he pleads guilty, Lee will face a statutory maximum sentence of 20 years for the smuggling count, five years for the conspiracy count, and three years for the tax count.
The arraignments for Park, RNG Global, Burroughs, and Lancaster have been scheduled for March 18. Park faces a statutory maximum sentence of 20 years for the smuggling count and three years for the distribution count. Burroughs faces a statutory maximum sentence of one year in prison.
The FDA’s approval of Cialis is limited to the use under the supervision of a licensed professional. Due to toxicity and other potentially harmful effects – including life-threatening drops in blood pressure, loss of vision, loss of hearing and prolonged, painful erections that can result in permanent injury – drugs similar to Cialis are not safe for use except under the supervision of a medical practitioner.
The investigation into these cases was conducted by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Food and Drug Administration’s Office of Criminal Investigations and IRS Criminal Investigation.
The cases are being prosecuted by Assistant United States Attorney Matthew W. O’Brien of the Environmental and Community Safety Crimes Section.
Hidden active pharmaceutical ingredients have been identified in products promoted not only for sexual enhancement, but also for bodybuilding, pain relief and weight loss. The FDA has issued hundreds of public warnings and recall announcements related to these types of fraudulent products. The FDA’s Tainted Products database can help consumers identify some of these potentially harmful products. Even if a product is not included in the list, consumers should be cautious about using certain products, especially those promoted for sexual enhancement, weight loss, bodybuilding and pain relief.
Customs and Border Protection Officer Arrested on Federal Charges Alleging He Operated Unlicensed Business that Sold GunsRead the Press Release
LOS ANGELES – A U.S. Customs and Border Protection supervisory officer has been arrested on federal charges alleging that he engaged in the business of unlawfully selling firearms without a license and sold an illegal short-barreled rifle to an undercover investigator.
Wei Xu, 56, of Santa Fe Springs, an officer at the Los Angeles and Long Beach Seaport, was taken into custody Tuesday afternoon and is making his initial appearance this afternoon in federal court in downtown Los Angeles.
A criminal complaint unsealed this afternoon alleges that Xu sold or otherwise transferred at least 70 firearms through a federal firearms license (FFL) dealer since 2014. As detailed in the complaint affidavit, Xu allegedly exploited his status as a law enforcement officer to purchase and then transfer at least 14 “off-roster” handguns that cannot be sold to the general public by an FFL. Xu also sold or transferred firearms within days or weeks from the date he purchased them. Xu allegedly operated his business by posting advertisements on internet marketplaces.
According to the complaint affidavit, as part of the investigation, an undercover law enforcement officer posing as a buyer purchased a total of four firearms from Xu, three of which Xu unlawfully sold out of the trunk of his car. The firearms included an “off-roster” pistol, high-capacity magazines, and a short-barreled rifle.
Xu was arrested on Tuesday by special agents from the Federal Bureau of Investigations; the Bureau of Alcohol, Tobacco, Firearms and Explosives; and IRS Criminal Investigation.
Pursuant to a federal search warrant executed at Xu’s residence on Tuesday and unsealed today, federal authorities seized more than 300 firearms, including numerous assault rifles, two additional short-barreled rifles, and what appear to be machine guns.
A complaint contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty in court.
If convicted of the charge of dealing firearms without a license, Xu would face a statutory maximum sentence of five years in federal prison. The charge of possessing an unlicensed firearm carries a maximum sentence of 10 years in prison.
This case is being prosecuted by Assistant United States Attorneys Annamartine Salick of the Terrorism and Export Crimes Section and Valerie Makarewicz of the Major Frauds Section.
Yucaipa Man Who Participated in ‘White Glove Bandits’ Robbery Spree Sentenced to over 200 Months in Federal PrisonRead the Press Release
SANTA ANA, California – A San Bernardino County man who participated in a series of armed robberies attributed to the “White Glove Bandits” – because the thieves wore white, latex gloves in some of the robberies – was sentenced today to nearly 17 years in federal prison.
Sheyenne Lee Parsons, 38, of Yucaipa, was sentenced to 201 months in prison by United States District James V. Selna. In addition to the prison term, Judge Selna ordered Parsons to serve four years of supervised release and pay $34,656 in restitution to the victimized banks and stores.
Parsons pleaded guilty in August to two counts of armed bank robbery and one count of using a firearm in relation to a crime of violence. But in a plea agreement, Parsons admitted to participating in three armed bank robberies and three retail store robberies – two of which were armed.
During one of the armed robberies, a father and his 7-year-old son walked into a Toys “R” Us in Redlands while Parsons and his cohorts were robbing the store. Store employees had difficulty opening the register during the robbery, so the robbers took the entire register with them.
Parsons and his co-conspirators committed the robberies between April 14, 2015, and July 21, 2015. The spree started with a failed attempt to rob a bank on April 13, 2015. In addition to the Toys “R” Us robbery, Parsons was involved in robberies of a Community Valley Bank branch in Palm Desert, a Boot Barn in Upland, a David’s Bridal in Ontario, a Wells Fargo branch in Irvine, and a Chase Bank branch in Banning. During the take-over robbery of the Wells Fargo branch on June 11, 2015, Parsons collected more than $20,000 from victim-tellers, while another robber pointed a gun at bank employees and demanded money.
“These robberies – particularly the armed robberies – terrified the employees and any customers present at the time,” prosecutors wrote in a sentencing memo filed with the court.
In 2016, Parsons was convicted in Los Angeles Superior Court of robbing a U.S. Bank branch in Culver City on April 30, 2015. Parsons is currently serving a five-year state court sentence for robbing the bank by using a demand note and wearing white gloves. The federal prison sentence imposed today will run concurrent with the portion of the state prison sentence Parsons has yet to serve.
Two other men were charged with being part of the White Glove Bandits robbery spree. The cases against them are pending.
The case against Parsons is the result of an investigation by the Federal Bureau of Investigation. During this investigation, the FBI received substantial assistance from the Redlands Police Department, the Riverside County Sheriff’s Department, the Riverside Police Department, the Los Angeles County Sheriff’s Department, the Ontario Police Department, the Culver City Police Department, the Banning Police Department, the San Bernardino Sheriff's Department, the Irvine Police Department, and the Orange County Sheriff’s Department.
The case was prosecuted by Assistant United States Attorney Vibhav Mittal of the Santa Ana Branch Office.
Branch Manager for East West Bank Sentenced to Two Years in Federal Prison for Money Laundering SchemeRead the Press Release
LOS ANGELES – An East West Bank branch manager who conspired to launder over $25,000 in cash by converting the currency into cashier’s checks was sentenced today to 24 months in federal prison.
Vivian Tat, 54, of Hacienda Heights, who is a vice president at East West Bank currently on administrative leave, was sentenced by United States District Judge Otis D. Wright II. In addition to the prison sentence, Judge Wright ordered Tat to pay a $2,000 fine.
Tat and a co-defendant were found guilty by a federal jury in September of conspiring to commit money laundering. Tat was also convicted of two counts of causing a false statement in a bank record.
The co-defendant – Ruimin Zhao, 48, of Temple City, is scheduled to be sentenced by Judge Wright next Monday.
Today’s sentencing was a result of a scheme in which Tat, Zhao and Zhao’s husband – Raymond Tan, 62, of Temple City – laundered cash through East West Bank’s San Gabriel branch. According to court documents and the evidence presented at trial, Tat, Zhao and Tan led an informant into the bank’s conference room, where the informant provided $25,500 in cash that was then laundered into three “clean” cashier’s checks issued through the account of a bank client. The informant was wearing a secret recording device and throughout the transaction, the conspirators made statements demonstrating that they knew money laundering was illegal. To cover their tracks, Tat facilitated false entries to be made in East West Bank’s records, which made it appear that this transaction was legitimate.
Prosecutors argued in court papers that Tat was responsible for providing the location of the closed-door transaction, the account holder, the checks used to facilitate the money laundering and the unwitting tellers who issued the cashier’s checks.
Tat “also provided the knowledge necessary to ensure that this transaction would occur undetected by regulators or law enforcement,” prosecutors wrote in a sentencing memorandum that noted Tat trained other East West Bank employees on the Bank Secrecy Act and anti-money laundering rules.
Tan previously pleaded guilty to money laundering conspiracy and money laundering in this case and in two other cases. He is scheduled to be sentenced by Judge Wright on March 18.
This case is the result of Operation “Phantom Bank,” which resulted in six indictments that charge a total of 25 defendants. Nine of the defendants have been convicted, and 16 defendants are pending trial.
This case is the result of an investigation by the Federal Bureau of Investigation, IRS Criminal Investigation, and the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP).
The case against Tat was prosecuted by Assistant United States Attorneys Kim Meyer and Joseph D. Axelrad of the Violent and Organized Crime Section.