Central District of California
Press releases recorded for this federal judicial district.
Veteran Charged with Defrauding Navy Out of More Than $9 Million by Bid-Rigging and False Billing with Insider Who Was Paid KickbacksRead the Press Release
LOS ANGELES – A Navy veteran has been charged with defrauding the Navy out of more than $9 million through a bid-rigging and contract steering scheme that involved paying kickbacks and other benefits to a co-conspirator, who was a Navy insider at the time, the Justice Department announced today.
Cory Taylor Wright, 49, of Columbus, Georgia, is charged in a single-count information with wire fraud.
In a separate court filing, Wright agreed to plead guilty to the felony charge, which carries a statutory maximum sentence of 20 years in federal prison. Wright has agreed to cooperate with federal prosecutors in this matter.
Wright is expected to plead guilty in the coming weeks.
According to his plea agreement, Wright was enlisted in the Navy from February 1997 until his retirement in May 2017. At various points from 2005 to 2017, Wright worked for the Navy’s Mobile Utilities Support Equipment division (Muse), located at the naval base in Port Hueneme in Ventura County. Muse was responsible for providing management, technical, and logistics support for power systems, including large generators, for U.S. Department of Defense operations around the world, including active combat zones.
To accomplish its mission, Muse engaged with prime contractors to procure goods and services, typically by tasking orders to subcontractors.
When Wright neared retirement in late 2016, he and an individual listed in court documents as “Co-Conspirator 1” agreed to create a Georgia-based company, C&C Power Solutions LLC (CCP). Co-Conspirator 1 was a fellow Navy enlistee who ultimately retired from the Navy in 2021 and held various positions at Muse, including supervisory positions that allowed him to exercise considerable influence over naval contracts. The scheme lasted from December 2016 to August 2022.
Wright and Co-Conspirator 1 created the company with the understanding that Co-Conspirator 1 would be a 50% partner in the business once he retired from the Navy. Co-Conspirator 1 told Wright that he would ensure CCP received Navy contracts, including task orders from a prime contractor. In exchange for directing the Navy contracts to CCP, Wright paid Co-Conspirator 1 thousands of dollars in kickback payments and other benefits, including payments to a sporting club operated by Co-Conspirator 1.
To provide initial funding for CCP’s business operations, Co-Conspirator 1 caused a prime contractor and subcontractors to issue payments to CCP for products and services that CCP did not provide. Once CCP was operational, Wright and Co-Conspirator 1 engaged in a bid-rigging scheme to ensure CCP received subcontracts from a prime contractor. For example, in connection with a 2017 task order worth approximately $790,496, Wright and Co-Conspirator 1 caused the submission of multiple fake contract bids that contained estimated project costs that were significantly higher than the bid that CCP submitted.
Wright also generated false and fraudulent invoices that represented CCP had completed work and delivered products to Muse when, in fact, CCP had not completed its contractual obligations. In turn, this caused the prime contractor to submit invoices containing Wright’s false information, causing the Navy to issue payments on the invoices.
Starting in September 2017, Wright and Co-Conspirator 1 conspired to secure CCP as Muse’s next prime contractor, which they knew would be worth tens of millions of dollars to their company. Wright and Co-Conspirator 1 worked together to generate bogus documents – including a fraudulent past performance questionnaire – to obtain the contract. They also hid from the Navy Co-Conspirator 1’s role and financial interest in CCP, including his direct involvement in the company’s successful bid proposal for the prime contract with the Navy.
From the time the Navy awarded CCP this lucrative contact in July 2019 until it terminated three task orders awarded to the company in late 2022 and early 2023, Wright continued to submit false documents, including invoices, to the Navy for obtaining money that his company and he were not entitled to receive.
In total, Wright and his co-schemers defrauded the Navy out of approximately $9,128,515.
The Defense Criminal Investigative Service and the Naval Criminal Investigative Service are investigating this matter.
Assistant United States Attorneys Ian V. Yanniello of the Terrorism and Export Crimes Section and Thomas F. Rybarczyk of the Public Corruption and Civil Rights Section are prosecuting this case.
Federal Grand Jury Charges Pico Rivera Man with Impeding Immigration Officers Arresting Illegal Alien in Parking LotRead the Press Release
SANTA ANA, California – A federal grand jury returned an indictment today charging a Pico Rivera man with impeding immigration officers from conducting enforcement actions in the parking lot of a Pico Rivera shopping center in June.
Adrian Andrew Martinez, 20, is charged with one count of conspiracy to impede a federal officer, a felony that carries a statutory maximum sentence of six years in federal prison.
Martinez’s arraignment is scheduled for Thursday in United States District Court in downtown Los Angeles.
“Today, a federal grand jury returned an indictment against this defendant for conspiracy to impede federal agents,” said Acting United States Attorney Bill Essayli. “He now faces up to six years in prison for his conduct. Make no mistake: There are serious, life-altering consequences for impeding law enforcement.”
According to the indictment and court documents previously filed in this case, on June 17 in Pico Rivera, federal agents were arresting a person believed to be an illegal alien residing in the United States. Martinez, who worked at a nearby Walmart, stopped and exited his vehicle and confronted the United States Border Patrol agents.
A crowd of several other individuals also stopped their vehicles and parked near the agents, partially blocking the lanes in the parking lot as the agents attempted to leave the area with the arrestee.
The hostile crowd collectively honked at the agents from their cars and shouted at them. The crowd – both in vehicles and on foot – surrounded the agents, blocking them from leaving the area. One of these vehicles was the one that Martinez had driven. Martinez positioned his vehicle to block the agents’ vehicle.
Martinez grabbed a large trash can and moved it in front of the agents’ vehicle, blocking it from leaving.
An indictment contains allegations. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Homeland Security Investigations is investigating this matter.
Assistant United States Attorney Alexander P. Robbins of the Criminal Appeals Section is prosecuting this case.
Chinese National Sentenced for Acting at North Korea’s Direction to Export Firearms, Ammo, Tech to N. KoreaRead the Press Release
An illegal alien from China was sentenced yesterday to 96 months in prison for illegally exporting firearms, ammunition, and other military items to North Korea by concealing them inside shipping containers that departed from the Port of Long Beach, and for committing this crime at the direction of North Korean government officials, who wired him approximately $2 million for his efforts.
Shenghua Wen, 42, of Ontario, was sentenced by U.S. District Court Judge Stephen V. Wilson for the Central District of California
Wen, who has been in federal custody since December 2024, pleaded guilty on June 9 to one count of conspiracy to violate the International Emergency Economic Powers Act (IEEPA) and one count of acting as an illegal agent of a foreign government.
Wen is a citizen of the People’s Republic of China who entered the United States in 2012 on a student visa and remained in the U.S. illegally after his student visa expired in December 2013.
Prior to entering the United States, Wen met with officials from North Korea’s government at a North Korean embassy in China. These government officials directed Wen to procure goods on behalf of North Korea.
In 2022, two North Korean government officials contacted Wen through an online messaging platform and instructed him to buy and smuggle firearms and other goods — including sensitive technology — from the United States to North Korea via China.
In 2023, at the direction of North Korean government officials, Wen shipped at least three containers of firearms out of the Port of Long Beach to China en route to their ultimate destination in North Korea. Wen took steps to conceal that he was illegally shipping firearms to North Korea by, among other things, filing false export information regarding the contents of the containers.
In May 2023, Wen purchased a firearms business in Houston, paid for with money sent through intermediaries by one of Wen’s North Korean contacts. Wen purchased many of the firearms he sent to North Korea in Texas and drove the firearms from Texas to California, where he arranged for them to be shipped.
In December 2023, one of Wen’s weapons shipments — which falsely reported to U.S. officials that it contained a refrigerator — left the Port of Long Beach and arrived in Hong Kong in January 2024. This weapons shipment was later transported from Hong Kong to Nampo, North Korea.
In September 2024, Wen — once again acting at the direction of North Korean officials — bought approximately 60,000 rounds of 9mm ammunition that he intended to ship to North Korea.
In furtherance of the conspiracy and at the direction of North Korean officials, Wen also obtained sensitive technology that he intended to send to North Korea. This technology included a chemical threat identification device and a handheld broadband receiver that detects known, unknown, illegal, disruptive or interfering transmissions.
Wen also acquired or offered to acquire a civilian airplane engine and a thermal imaging system that could be mounted on a drone, helicopter, or other aircraft, and could be used for reconnaissance and target identification.
During the scheme, North Korean officials wired approximately $2 million to Wen to procure firearms and other goods for their government.
Wen admitted in his plea agreement that at all relevant times he knew that it was illegal to ship firearms, ammunition, and sensitive technology to North Korea. He also admitted to never having the required licenses to export ammunition, firearms, and the above-described devices to North Korea. He further admitted to acting at the direction of North Korean government officials and that he had not provided notification to the Attorney General of the United States that he was acting in the United States at the direction and control of North Korea as required by law.
The FBI; Homeland Security Investigations; DCIS; the Bureau of Alcohol, Tobacco, Firearms and Explosives; and the Department of Commerce Bureau of Industry and Security investigated this matter.
Assistant U.S. Attorney Sarah E. Gerdes for the Central District of California’s Terrorism and Export Crimes Section and Trial Attorney Ahmed Almudallal of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.
North Hollywood Woman Agrees to Plead Guilty to Federal Drug Charges, Including Selling Ketamine that Killed Actor Matthew PerryRead the Press Release
LOS ANGELES – A San Fernando Valley woman has agreed to plead guilty to five federal criminal charges, including that she provided the ketamine that ultimately resulted in the overdose death of actor Matthew Perry in October 2023, the Justice Department announced today.
Jasveen Sangha, 42, a.k.a. “Ketamine Queen,” of North Hollywood, has agreed to plead guilty to one count of maintaining a drug-involved premises, three counts of distribution of ketamine, and one count of distribution of ketamine resulting in death or serious bodily injury.
Sangha, who is a dual citizen of the United States and the United Kingdom, has been in federal custody since August 2024. She is expected to formally enter a guilty plea in the coming weeks.
Upon entering her guilty plea, Sangha will face at her sentencing hearing – which is expected to occur in the coming months – a statutory maximum sentence of 20 years in federal prison on the drug-involved premises count, up to 10 years in federal prison for each ketamine distribution count, and up to 15 years in federal prison for the count of distribution of ketamine resulting in death or serious bodily injury.
According to her plea agreement, Sangha worked with Erik Fleming, 55, of Hawthorne, to knowingly distribute ketamine to Perry, a successful actor and author whose struggles with drug addiction were well documented. In October 2023, Sangha and Fleming sold Perry 51 vials of ketamine, which were provided to Kenneth Iwamasa, 60, of Toluca Lake, Perry’s live-in personal assistant.
Leading up to Perry’s death, Iwamasa repeatedly injected Perry with the ketamine that Sangha supplied to Fleming. Specifically, on October 28, 2023, Iwamasa injected Perry with at least three shots of Sangha’s ketamine, which caused Perry’s death.
After learning from news reports of Perry’s death, Sangha called Fleming on Signal to discuss how to distance themselves from it. That day, Sangha updated the settings on the Signal apps to automatically delete her messages with Fleming. She further instructed Fleming to “Delete all our messages.”
Two days after Perry’s death, Fleming left Sangha a voicemail on Signal and texted, “Please call . . . Got more info and want to bounce ideas off you. I’m 90% sure everyone is protected. I never dealt with [Perry]. Only his Assistant. So the Assistant was the enabler. Also they are doing a 3 month tox screening . . . Does K stay in your system or is it immediately flushed out[?].”
In her plea agreement, Sangha also admitted to selling four vials ketamine to victim Cody McLaury in August 2019. McLaury died hours later from a drug overdose.
Sangha also admitted in her plea agreement to possessing with intent to distribute various drugs at her North Hollywood residence. In March 2024, law enforcement searched the residence and found 1.7 kilograms of pressed pills containing methamphetamine, 79 vials of liquid ketamine, MDMA (Ecstasy) tablets, counterfeit Xanax pills, baggies containing powdered ketamine and cocaine, and other drug trafficking items such as a gold money counting machine, a scale, a wireless signal and hidden camera detector, drug packaging materials, and $5,723 in cash.
She further admitted to using her North Hollywood residence to store, package, and distribute narcotics, including ketamine and methamphetamine, since at least June 2019.
The other defendants charged in this matter are:
- Mark Chavez, 55, of San Diego, a physician, pleaded guilty in October 2024 to one count of conspiracy to distribute ketamine. He faces up to 10 years in federal prison at his sentencing hearing, which is scheduled for September 17.
- Fleming, who pleaded guilty in August 2024 to one count of conspiracy to distribute ketamine and one count of distribution of ketamine resulting in death. His sentencing hearing is scheduled for November 12, at which time he will face up to 25 years in federal prison.
- Iwamasa, who pleaded guilty in August 2024 to one count of conspiracy to distribute ketamine causing death. His sentencing hearing is scheduled for November 19, at which time he will face a statutory maximum sentence of 15 years in federal prison.
- Salvador Plasencia, 43, a.k.a. “Dr. P,” of Santa Monica, pleaded guilty on July 23 to four counts of distribution of ketamine. His sentencing hearing is scheduled for December 3, at which time he will face up to 10 years in federal prison for each count.
The Los Angeles Police Department, the Drug Enforcement Administration, and the United States Postal Inspection Service are investigating this matter.
Assistant United States Attorneys Ian V. Yanniello of the Terrorism and Export Crimes Section and Haoxiaohan H. Cai of the Major Frauds Section are prosecuting this case.
Chinese National Sentenced to 8 Years in Federal Prison for Acting at North Korea’s Direction to Export Firearms, Ammo, Tech to N. KoreaRead the Press Release
LOS ANGELES – An illegal alien from China was sentenced today to 96 months in federal prison for illegally exporting firearms, ammunition and other military items to North Korea by concealing them inside shipping containers that departed from the Port of Long Beach, and for committing this crime at the direction of North Korean government officials, who wired him approximately $2 million for his efforts.
Shenghua Wen, 42, of Ontario, was sentenced by United States District Judge Stephen V. Wilson.
Wen, who has been in federal custody since December 2024, pleaded guilty on June 9 to one count of conspiracy to violate the International Emergency Economic Powers Act (IEEPA) and one count of acting as an illegal agent of a foreign government.
Wen is a citizen of the People’s Republic of China who entered the United States in 2012 on a student visa and remained in the U.S. illegally after his student visa expired in December 2013.
Prior to entering the United States, Wen met with officials from North Korea’s government at a North Korean embassy in China. These government officials directed Wen to procure goods on behalf of North Korea.
In 2022, two North Korean government officials contacted Wen through an online messaging platform and instructed him to buy and smuggle firearms and other goods – including sensitive technology – from the United States to North Korea via China.
In 2023, at the direction of North Korean government officials, Wen shipped at least three containers of firearms out of the Port of Long Beach to China en route to their ultimate destination in North Korea. Wen took steps to conceal that he was illegally shipping firearms to North Korea by, among other things, filing false export information regarding the contents of the containers.
In May 2023, Wen purchased a firearms business in Houston, paid for with money sent through intermediaries by one of Wen’s North Korean contacts. Wen purchased many of the firearms he sent to North Korea in Texas and drove the firearms from Texas to California, where he arranged for them to be shipped.
In December 2023, one of Wen’s weapons shipments – which falsely reported to U.S. officials that it contained a refrigerator – left the Port of Long Beach and arrived in Hong Kong in January 2024. This weapons shipment was later transported from Hong Kong to Nampo, North Korea.
In September 2024, Wen – once again acting at the direction of North Korean officials – bought approximately 60,000 rounds of 9mm ammunition that he intended to ship to North Korea.
In furtherance of the conspiracy and at the direction of North Korean officials, Wen also obtained sensitive technology that he intended to send to North Korea. This technology included a chemical threat identification device and a handheld broadband receiver that detects known, unknown, illegal, disruptive or interfering transmissions.
Wen also acquired or offered to acquire a civilian airplane engine and a thermal imaging system that could be mounted on a drone, helicopter, or other aircraft, and could be used for reconnaissance and target identification.
During the scheme, North Korean officials wired approximately $2 million to Wen to procure firearms and other goods for their government.
Wen admitted in his plea agreement that at all relevant times he knew that it was illegal to ship firearms, ammunition, and sensitive technology to North Korea. He also admitted to never having the required licenses to export ammunition, firearms, and the above-described devices to North Korea. He further admitted to acting at the direction of North Korean government officials and that he had not provided notification to the Attorney General of the United States that he was acting in the United States at the direction and control of North Korea as required by law.
The FBI; Homeland Security Investigations; DCIS; the Bureau of Alcohol, Tobacco, Firearms and Explosives; and the Department of Commerce Bureau of Industry and Security investigated this matter.
Assistant United States Attorney Sarah E. Gerdes of the Terrorism and Export Crimes Section and Trial Attorney Ahmed Almudallal of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.
Latin Music Conglomerate CEO Sentenced to 4 Years in Federal Prison for Doing Business with Drug Cartel-Linked Concert PromoterRead the Press Release
LOS ANGELES – The CEO of a Latin music conglomerate was sentenced today to 48 months in federal prison for conspiring to violate the Foreign Narcotics Kingpin Designation Act by conducting business with a Guadalajara-based concert promoter with ties to Mexican drug cartels.
José Ángel Del Villar, 45, of Huntington Beach, the CEO of Del Records and its related talent agency Del Entertainment Inc., was sentenced by United States District Judge Maame Ewusi-Mensah Frimpong, who also fined Del Villar $2 million.
Judge Frimpong today also sentenced co-defendant Del Entertainment to three years of probation and fined the company $1.8 million.
At the conclusion of a nine-day trial, a federal jury on March 27 found Del Villar and Del Entertainment guilty of one count of conspiracy to transact in property of specially designated narcotics traffickers in violation of the Kingpin Act and 10 counts of violating the Kingpin Act.
In April 2018, the defendants did business with Jesús Pérez Alvear, a.k.a. “Chucho,” of Guadalajara, Mexico, a music promoter who controlled Gallistica Diamante, a.k.a. Ticket Premier. Pérez promoted concerts for Del Entertainment in Mexico until March 2019.
The U.S. Treasury Department listed Pérez and his company as “specially designated narcotics traffickers” under the Kingpin Act on April 6, 2018, after concluding he facilitated money laundering for the Cartel de Jalisco Nueva Generación (CJNG) and the Los Cuinis drug trafficking organization. The Kingpin Act prevents people in the United States from conducting business with sanctioned persons and entities.
Even though Del Villar and Del Entertainment were aware that it was illegal to engage in transactions or dealings with Pérez, they willfully did business with him by continuing to have a Del Entertainment musical artist perform at concerts in which Pérez and Del Entertainment had a financial interest.
For example, on April 19, 2018, FBI agents approached a well-known musician and explicitly told him about Pérez’s designation under the Kingpin Act and how that prohibited him from conducting business with Pérez and performing concerts that Pérez promoted.
On April 28, 2018, the musician performed at a concert that Pérez organized. Del Villar’s credit card was used to pay for a private jet that brought the musician from Van Nuys Airport to the performance in Aguascalientes, Mexico.
On multiple other occasions in 2018 and 2019, Pérez and Del Villar continued to do business by arranging for the musician to perform at concerts throughout Mexico – including Mexicali and San José Iturbide, Guanajuato.
“Far from being an unwitting participant in a ‘gotcha’ crime, [Del Villar] orchestrated a sophisticated criminal scheme sustained over a lengthy period of time and involving myriad unlawful transactions,” prosecutors argued in a sentencing memorandum.
Co-defendant Luca Scalisi, 59, of West Hollywood, pleaded guilty on May 23 to one count of conspiracy to transact in property of specially designated narcotics traffickers in violation of the Kingpin Act. His sentencing hearing is scheduled for October 22.
Co-defendant Pérez, who previously pleaded guilty to conspiracy to transact in property of specially designated narcotics traffickers, was murdered in Mexico in December 2024.
Last week, the U.S. Treasury Department listed another recording artist affiliated with Del Villar’s music businesses as a “specially designated narcotics trafficker” under the Kingpin Act. “Narco-rapper” Ricardo Hernández Medrano, known by his stage names “El Makabelico” or “Comando Exclusivo,” was added to the sanctions list based on the Treasury Department’s determination that he used concerts and royalties to launder funds for the Cartel del Noreste, formerly known as Los Zetas.
The FBI and IRS Criminal Investigation investigated this matter. The Treasury Department’s Office of Foreign Assets Control provided significant assistance in this matter.
Assistant United States Attorneys Benedetto L. Balding of the Transnational Organized Crime Section and Alexander B. Schwab, Deputy Chief of the Criminal Division, are prosecuting this case.
This case is part of Operation Take Back America, a nationwide initiative that marshals the full resources of the Department of Justice to repel the invasion of illegal immigration, achieve the total elimination of cartels and transnational criminal organizations (TCOs), and protect our communities from the perpetrators of violent crime. Operation Take Back America streamlines efforts and resources from the Department’s Organized Crime Drug Enforcement Task Forces (OCDETF) and Project Safe Neighborhood (PSN).
This case is part of an OCDETF operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
Chinese National Sentenced to More than Two Years in Federal Prison for Laundering Approximately $3.5 Million Stolen from Fraud VictimsRead the Press Release
LOS ANGELES – A Chinese national was sentenced today to 28 months in federal prison for laundering approximately $3.5 million in money stolen from victims of investment scams as part of so-called “pig butchering” schemes, including opening bank accounts used to launder the money and picking up packages of bulk cash sent by fraud victims.
Li Liu, 27, a.k.a. “Qiunan Li” and “Xiaoying Zhao,” of the Koreatown neighborhood of Los Angeles, was sentenced by United States District Judge Fernando M. Olguin.
She pleaded guilty on June 4 to one count of conspiracy to commit money laundering.
“Pig butchering” fraud schemes (a term derived from a foreign-language phrase used to describe these crimes) consist of scammers encountering victims on dating services or social media, or via unsolicited messages or calls, often masquerading as a wrong number. Scammers initiate relationships with victims and slowly gain their trust, eventually introducing the idea of making a business investment.
Victims are then directed to other members of the scheme operating fraudulent investment platforms and applications, where victims are persuaded to transfer money for the purpose of financial investments. Once funds are sent to scammer-controlled accounts, the purported investment platform often falsely shows significant gains on the purported investment, and the victims are thus induced to send more money for additional investments.
Ultimately, the victims are unable recover their money, often resulting in significant losses for the victims.
In September 2024, Liu – using a fake passport under the alias “Xia Ran” and other documents – opened a bank account for a sham company named Ocean X Trading Ltd Inc. and had access to the account until April 2025. Multiple investment scam victims wired their money to this account. During October 2024 alone, Liu transferred $83,461 out of this bank account to a Hong Kong-based company called Alamo Tech Ltd.
As part of the conspiracy, Liu and her co-conspirators also used fake IDs – including passports and California driver’s licenses – to open accounts at mail receiving facilities and pick up package of bulk currency sent by wire fraud victims.
For example, in March 2025, Liu – using a fake passport with the name “Qiunan Li” along with other documents for a business called Sunny South Trading Inc. – opened an account at a shipping company located in the Koreatown neighborhood of Los Angeles. During two days in April 2025, six packages containing bulk cash – were received at this location. Liu picked up, opened, and photographed the packages’ content then consolidated the money and sent it to co-defendant Shaui Lyu, 28, of Koreatown, and other co-conspirators.
Lyu possessed on his cellphone approximately 46 images of bulk currency, many of which Liu sent to him. Law enforcement estimated that the bulk currency in the images totaled approximately $3.5 million of laundered money.
Finally, the conspiracy used couriers to deliver bulk cash from fraud victims. In March 2025, Liu was involved with someone transporting from Dallas to Los Angeles more than $200,000 in bulk currency of wire fraud victims. The co-conspirators also used an image of a serialized U.S. dollar bill for each courier pick up of currency, with the courier and the victim each showing the same serialized dollar bill to confirm the courier’s identity at pick up. In April 2025, Lyu on his cellphone, possessed more than 100 images of serialized dollar bills, each representing a different pick up of bulk cash.
Liu admitted in her plea agreement that she received payment for laundering the fraudulently obtained money. Law enforcement searching Liu’s residence found $104,000 in cash from fraud victims that had not yet been sent to other co-conspirators. Law enforcement also recovered 27 packages that Liu and Lyu had not picked up from mail receiving facilities, which were found to contain about $285,000 in cash and $87,000 in gold bars.
Lyu – who is an illegal alien from China – also pleaded guilty on June 4 to one count of conspiracy to commit money laundering and will face up to 20 years in federal prison at his September 4 sentencing hearing.
Homeland Security Investigations investigated this matter.
Assistant United States Attorney Erik M. Silber of the Post-Conviction and Special Litigation Section prosecuted this case.
Lead Defendant in Whittier-Based Quiet Village Racketeering Case Pleads Guilty to Federal Charges, Admits to 2022 Gun MurderRead the Press Release
SANTA ANA, California – A shot caller in the Whittier-based Quiet Village (QV) street gang pleaded guilty today to federal charges, including shooting a woman to death while attempting to murder a law enforcement source in Commerce in March 2022 and the attempted murder of a rival gang member in El Monte earlier that year.
Chase Carrillo, 36, a.k.a. “Sicko,” of Santa Fe Springs, the lead defendant in a 16-count superseding indictment targeting the gang, pleaded guilty to one count of conspiracy to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act and one count of using a firearm during and in relation to a crime of violence, resulting in death. He has been in federal custody since July 2023.
According to his plea agreement, Carrillo participated in Quiet Village gang activities from at least 2014 until June 2023, including his assault of two California corrections officers while he was serving a sentence in state prison in September 2014. The plea agreement further outlines the history of QV and its close alliance with another street gang, Whittier Varrio Locos (WVL).
On January 13, 2022, Carrillo got involved in an argument with a rival gang member in El Monte. That altercation ended with Carrillo and a co-conspirator shooting the rival gangster, who was struck eight to 10 times by bullets and was severely wounded.
In early March 2022, a co-conspirator obtained a police report about the incident that named a victim identified in court documents as “J.P.” as a person who provided authorities information about the El Monte shooting, and asked an accomplice to distribute the report, stating it should go “to all the homies,” which was interpreted as a message to fellow gang members that J.P. should be murdered for cooperating with law enforcement.
On March 5, 2022, two days after the police report began circulating among gang members, Carrillo and a co-conspirator – who were driving a car rented with a stolen credit card – encountered J.P. in Commerce. Carrillo got out of the rental car and fired at least two rounds into the vehicle J.P. was riding in with the intent to kill him. J.P. was not hit, but the driver of the vehicle – a woman identified in court documents as M.F. – was fatally wounded.
Carrillo admitted in his plea agreement that his purpose in committing the murder was to maintain and increase his position in the QV enterprise by killing J.P., a person that he believed was cooperating with law enforcement.
Carrillo further admitted that he caused at least $150,000 in losses and damages to the El Monte shooting victim and at least $150,000 in losses and damages to M.F.’s next of kin and heirs.
United States District Judge Fred W. Slaughter scheduled a February 26, 2026, sentencing hearing, at which time Carrillo will face a statutory maximum sentence of life in federal prison.
The investigation was conducted by the FBI’s San Gabriel Valley Safe Streets Task Force and involved agents and officers assigned to the Task Force from the FBI, the El Monte Police Department, the Los Angeles County Sheriff’s Department, the Pomona Police Department and the California Department of Corrections and Rehabilitation’s Special Service Unit. The Bureau of Alcohol, Tobacco, Firearms and Explosives also participated in the investigation.
Assistant United States Attorneys Wilson Park and Kellye Ng of the Violent and Organized Crime Section and Assistant United States Attorney Danbee Kim of the Environmental Crimes and Consumer Protection Section are prosecuting this case.
11 Charged in Federal Indictment Alleging Extensive Sex Trafficking of Minors and Young Women Along South L.A.’s Figueroa CorridorRead the Press Release
LOS ANGELES – Federal and local law enforcement today arrested six members and associates of the South Los Angeles-based Hoover Criminal Gang charged in a 31-count indictment that charges them with racketeering conspiracy including sex trafficking of children and adults through force, fraud, or coercion – including runaways and children from the foster care system – on the Figueroa Corridor of Los Angeles, recruiting victims through social media and branding them with tattoos.
Today’s takedown is the first major takedown of a sex trafficking operation on the Figueroa Corridor, which is an area notorious for prostitution.
The following defendants are charged with one count of conspiracy to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act:
- Amaya Armstead, 25, a.k.a. “Lady Duck,” of South Los Angeles, the case’s lead defendant and the de facto leader of the 112 set of the Hoover Criminal Gang and who is accused of sex trafficking a 14-year-old girl;
- Kenyondre Young, 22, a.k.a. “Yunkg Poke,” of South Los Angeles;
- Naziz Harris, 19, a.k.a. “N4,” of South Los Angeles;
- Avery Amoako, 27, a.k.a. “Handz,” of Long Beach;
- Jared Evans, 29, a.k.a. “Jmoney,” of the Mid-City area of Los Angeles;
- Mathew Brooks, 22, a.k.a. “Vermont Star,” of Riverside;
- Derail Robinson, 22, a.k.a. “Popkorn,” of South Los Angeles;
- Jalon Phillips, 22, a.k.a. “Chop Em,” of South Los Angeles;
- Bryan Isrel, 31, a.k.a. “4Loc,” of South Los Angeles;
- Tejohn Gray, 25, a.k.a. “Tiny3,” of South Los Angeles; and
- Tommy Crockham, 30, a.k.a. “Tommy Gunz,” of South Los Angeles.
The defendants are charged with various other crimes, including sex trafficking of minors, sex trafficking through force, fraud, or coercion; transportation of a minor for sex trafficking; sexual exploitation of a child; drug trafficking conspiracy; money laundering to promote specified unlawful activity; and conspiracy to straw purchase firearms.
Amoako, Evans, Brooks, Phillips, and Crockham were arrested this morning and are expected to make their initial appearances and be arraigned this afternoon in federal court in downtown Los Angeles. Armstead was transferred from state custody to federal custody and is expected to make her initial appearance and be arraigned this afternoon in Los Angeles federal court. Law enforcement is looking for Isrel.
“The U.S. Department of Justice, under the leadership of Attorney General Pamela Bondi, is making Los Angeles safer by arresting prolific gang members who are viciously trafficking young woman and children for sex,” said Acting United States Attorney Bill Essayli. “There are no meaningful consequences for their conduct under state law, so the federal government – aided by its local law enforcement partners – will step in to make sure these criminals face lengthy prison sentences. Today’s operation is the first step in returning the Figueroa Corridor – long known as prostitution haven – back to its residents who have suffered for too long while criminals were allowed to run amok.”
“Human trafficking is among the most heinous crimes perpetuated throughout the world,” said Homeland Security Investigations (HSI) Los Angeles Special Agent in Charge Eddy Wang. “No human should be for sale – not here in Los Angeles or anywhere in our society. Today’s operation is a result of our commitment to identify and rescue victims of trafficking and to hold accountable these criminal organizations exploiting them.”
“These violent gang members profited from horrific crimes and used online apps to move their money and further their criminal enterprise,” said Special Agent in Charge Tyler Hatcher of the IRS Criminal Investigation Los Angeles Field Office. “Special Agents at IRS-CI are experts in tracing illegal funds and linking criminals to their illegal acts. IRS-CI is committed to protecting victims and prosecuting criminal offenders involved in money laundering, sex trafficking, and other violent crime.”
“The exploitation of vulnerable women and children through sex trafficking is one of the most heinous crimes our society faces,” said Los Angeles Police Chief Jim McDonnell. “The victims in this case – many of them minors, runaways, or from the foster care system – were preyed upon by individuals who sought to profit from their pain. The Los Angeles Police Department remains steadfast in its commitment to working with our federal partners to dismantle these criminal networks, bring their perpetrators to justice, and ensure survivors receive the protection and support they deserve.”
According to the indictment, from February 2021 to August 2025, the Hoovers largely controlled sex trafficking and prostitution in the Figueroa Corridor of South Los Angeles. Members and associates of the gang acted as pimps to promote and manage sex trafficking. The defendants facilitated each other’s pimping by managing and monitoring their victims, pooling resources to rent several motel rooms for commercial sex dates, disciplining each other’s victims, driving each other’s victims to and from the street where victims solicited commercial sex work, sourcing third parties to create online profiles for sex advertisements, and sending each other money via Cash App and Apple Pay.
Victims were required to remit all proceeds from commercial sex dates to the pimp. A victim who refused or who otherwise disobeyed a pimp faced discipline, including assaults, berating, public humiliation, and withholding of affection, drugs or food. Victims also were branded with tattoos of a defendant’s moniker.
The defendants also worked together to recruit new victims via social media or in person, focusing on vulnerable minor girls and young women, particularly those with financial or emotional struggles or who had run away from home. Pimps also plied their victims with drugs ranging from oxycodone to amphetamines. Victims were recruited via false promises of a luxurious lifestyle, intimidation, and actual or threatened violence.
For example, in April 2022, Gray and two accomplices drove to an area of San Bernardino which is notorious for prostitution activities and attempted to force two female victims into their car, grabbing them. Ultimately, both victims broke free.
In April 2024, Armstead and Evans utilized rooms at the Stadium Inn, a South Los Angeles motel, to traffic their victims. One victim included a 14-year-old girl. Armstead gave the victim – who was sex trafficked for at least three consecutive days – condoms to use for commercial sex dates with “Johns” or sex buyers.
Some members of the Hoovers criminal enterprise produced rap music and videos, which often glorified the gang, sex trafficking, drug sales, and firearms possession. Members of the gang also posted videos and photographs of their assaults on others to social media, in order to intimidate their victims and ensure their compliance in performing commercial sex work for the enrichment of their pimps and the Hoover gang itself.
An indictment contains allegations. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
If convicted, some defendants would face a mandatory minimum sentence of 15 years in federal prison and would face a statutory maximum sentence of life imprisonment.
Homeland Security Investigations, IRS Criminal Investigation, the Los Angeles Police Department, and the United States Attorney’s Office are investigating this matter. The investigation was supported by the Nebraska State Patrol, Keith County Attorney’s Office, Nebraska Department of Justice Office of the Attorney General, California Highway Patrol, the Los Angeles Department of Children and Family Services, the National Center for Missing and Exploited Children, and Saving Innocence.
Assistant United States Attorneys Chelsea Norell of the Violent and Organized Crime Section and Mirelle Raza of the General Crimes Section are prosecuting this case.
Carson Woman and Former U.S. Postal Service Employee Pleads Guilty to Stealing Checks and Credit Cards from the MailRead the Press Release
LOS ANGELES – A South Bay woman who formerly worked as a letter carrier for the United States Postal Service in Torrance pleaded guilty today to stealing checks and debit and credit cards from the mail then selling them to her accomplices for three years, using the illicitly obtained funds to take international trips and buy luxury goods, and then flaunting the cash on Instagram.
Mary Ann Magdamit, 31, of Carson, pleaded guilty to one count of conspiracy to commit bank fraud.
Magdamit, who has been in federal custody since July 1, is a former letter carrier at the Torrance Main Post Office.
According to her plea agreement and court documents previously filed in this case, from at least 2022 until July 2025, Magdamit stole mail containing checks, personal identifying information (PII), and debit and credit cards. She then activated the stolen bank-issued cards online, used the cards to make purchases, and sold some stolen cards to her co-conspirators.
She also arranged to have her co-conspirators cash the stolen checks, usually by people using counterfeit identity documents in the name of the check’s payee. Federally insured banks and credit unions were victimized in this scheme.
Law enforcement searched Magdamit’s apartment in December 2024, and seized 133 stolen credit and debit cards,16 U.S. Department of Treasury checks, and a loaded, un-serialized Glock-clone, with an extended 27-round magazine, commonly referred to as a “ghost gun.” Agents also discovered luxury goods purchased with cards she stole from the mail. She also used stolen cards on international trips she took to Turks and Caicos and Aruba.
Agents arrested Magdamit on July 1, after learning that she continued to make purchases with victims’ credit cards. A second search of Magdamit’s apartment that day yielded more stolen cards. Magdamit remains in federal custody.
Magdamit posted on Instagram her luxury purchases and vacations, and flaunted stacks of hundred-dollar bills. Magdamit has agreed to forfeit a Rolex watch and other luxury goods.
United States District Judge John F. Walter scheduled an October 27 sentencing hearing, at which time Magdamit will face a statutory maximum sentence of 30 years in federal prison.
The U.S. Postal Service Office of Inspector General, the U.S. Postal Inspection Service, and the Treasury Inspector General of Tax Administration investigated this matter.
Assistant United States Attorney Andrew Brown of the Major Frauds Section is prosecuting this case.
Orange County Man Pleads Guilty to Using Semi-Automatic Rifle to Shoot at Sheriff’s Department Helicopter After His Birthday PartyRead the Press Release
SANTA ANA, California – A Laguna Niguel man pleaded guilty today to using a semi-automatic rifle to repeatedly shoot at an Orange County Sheriff’s Department helicopter last year from a second-story window at his home.
Justin Derek Jennings, 40, pleaded guilty to one count of attempting to damage, destroy, disable, or wreck an aircraft in the special aircraft jurisdiction of the United States.
According to his plea agreement, on March 9, 2024, Jennings – from a second-story window of his residence – used a semi-automatic rifle to shoot at a helicopter operated by the Orange County Sheriff’s Department.
Court documents previously filed in this case stated that Jennings and his family were celebrating his birthday party on that day. Jennings had been drinking and became angry. As anger grew, family members in attendance left the home. After most of his family left, Jennings removed a rifle from his gun safe and fired an entire magazine worth of ammunition inside the home. The rest of Jennings’ family fled and reported the incident to law enforcement.
The Orange County Sheriff’s Department responded with several deputies and a police helicopter that flew in circles around the area. Jennings then went to the home’s second story and began shooting a rifle upwards in the sky, firing only when the helicopter was visible to him. The shooting continued intermittently for at least 20 minutes. After speaking with an Orange County sheriff’s deputy, Jennings exited the residence and surrendered.
During a search of Jennings’ residence, law enforcement seized two revolvers, two handguns, and two rifles along with multiple rounds of ammunition. Bullet casings were scattered throughout the floor and law enforcement also seized two magazines and a box of ammunition that was on a couch beneath the window from where Jennings fired the weapon.
United States District Judge John W. Holcomb scheduled a January 30, 2026, sentencing hearing, at which time Jennings will face a statutory maximum sentence of 20 years in federal prison.
The Orange County District Attorney’s Office charged Jennings in connection with this incident but dismissed the case so the federal case against him could proceed.
The FBI and the Orange County Sheriff’s Department investigated this matter.
Assistant United States Attorneys Caitlin J. Campbell and Lisa J. Lindhorst of the Orange County Office are prosecuting this case.
Grand Jury Returns 4-Count Indictment Charging Two Defendants with Assaulting Federal Officers at Immigration Protest in Downtown Los AngelesRead the Press Release
LOS ANGELES – A federal grand jury today indicted a Los Angeles woman and a South Bay man on charges that they assaulted federal officers stationed at a federal building in downtown Los Angeles – property that one of them defaced – during an anti-immigration enforcement protest last month.
Erin Petra Escobar, 34, of the Palms neighborhood of Los Angeles, is charged with one felony count of assault on a federal officer or employee and one misdemeanor count of depredation of government property.
Nick Elias Gutierrez, 20, of Hawthorne, is charged with two felonies: one count of assault on a federal officer or employee and one count of assault on a federal officer or employee resulting in bodily injury.
The defendants’ arraignments are scheduled for August 15 in United States District Court in Los Angeles. Both Escobar and Gutierrez are free on $5,000 bond.
According to the indictment and court documents previously filed in this case, a small group of protesters on July 17 gathered near the Edward R. Roybal Federal Building and United States Courthouse in downtown Los Angeles. The group was protesting federal immigration enforcement operations that had recently been occurring. Various entrances to the Roybal building clearly indicate that it is federal property.
A federal officer saw a protester – later identified as Escobar – using a permanent marker to write on and damage federal property. Minutes later, officers approached Escobar and attempted to detain her.
While the officers attempted to detain Escobar, a second protester – later identified as Gutierrez – used both hands to grab the shoulder straps of an officer’s bulletproof vest and began shaking the officer. The officer, helped by two other federal officers, attempted to detain Gutierrez. During the ensuing struggle, one of the officers dislocated his left ring finger.
Escobar and Gutierrez eventually were detained and arrested. While in custody and en route to a nearby holding cell, Escobar audibly filled her throat with saliva and spat into the face of one of the officers.
An indictment contains allegations. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
If convicted, Escobar would face a statutory maximum sentence of eight years in federal prison for the assault charge and up to one year in federal prison on the depredation charge. If convicted, Gutierrez would face up to 20 years in federal prison for the assault resulting in injury count and a maximum sentence of eight years in federal prison for the assault count.
The United States Department of Homeland Security’s Federal Protective Service is investigating this matter.
The General Crimes Section is prosecuting this case.
Film Production Accountant Charged in Six-Count Federal Indictment with Embezzling More Than $1.9 Million from Indie FilmsRead the Press Release
LOS ANGELES – A film production accountant from the San Fernando Valley has been charged in a federal grand jury indictment alleging he embezzled more than $1.9 million from the film productions that employed him, using the illicitly obtained funds to stay at Las Vegas hotels and socialize with pornographic actresses, the Justice Department announced today.
Joshua Mandel, 46, of Woodland Hills, is charged with six counts of wire fraud. He is expected to make his initial appearance and be arraigned on September 10 in United States District Court in Los Angeles.
According to the indictment returned on Thursday, Mandel owned the Woodland Hills-based company First J Productions Inc., where he served as both its CEO and chief financial officer. He also worked as a film production accountant who specialized in accounting services for independent films. As a production accountant, Mandel oversaw cash flow, payroll, and expenses for the film productions. He also added funds to prepaid debit cards issued by CASHét Card that are commonly used in the film industry and was an authorized user for bank accounts belonging to the production companies.
From 2019 to 2023, Mandel misappropriated funds belonging to the film productions by writing unauthorized checks, making unauthorized wire transfers, and moving funds into a CASHét Card account he controlled called “Fun Fun Fun.”
Mandel also used the embezzled money to maintain his lifestyle, including paying hundreds of thousands of dollars to various young women, including pornographic actresses, and more than $129,000 to a woman he met through a “sugar daddy” website; spending more than $24,000 at Las Vegas hotels, clubs, and shows; and purchasing more than $12,000 in luxury items from Louis Vuitton. To hide his scheme, Mandel used funds from one production company to pay expenses incurred by another.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
If convicted of all charges, Mandel would face a statutory maximum sentence of 20 years in prison for each count.
The FBI is investigating this matter.
Assistant United States Attorney Alexander B. Schwab, Deputy Chief of the Criminal Division, is prosecuting this case.
Paramount Man Indicted by Federal Grand Jury for Throwing Chunks of Cinderblock at and Injuring Border Patrol OfficerRead the Press Release
LOS ANGELES – A federal grand jury has indicted a Paramount man on a federal charge that he threw pieces of cinderblock and injured a Border Patrol officer last June when a protest against immigration enforcement turned into a riot, the Justice Department announced today.
Jacob Daniel Terrazas, 30, of Paramount, is charged with one count of assault on a federal employee by using a deadly and dangerous weapon resulting in bodily injury.
Terrazas is scheduled to go to trial on September 23.
“We will not stand by while our brave federal agents and officers get hurt,” said Acting United States Attorney Bill Essayli. “If you injure an official enforcing immigration law, you may serve 20 years in a federal prison cell. It’s just not worth it.”
According to the indictment returned Tuesday and in other court documents previously filed in this case, a protest occurred on June 7 near a Homeland Security Investigations (HSI) facility in Paramount and turned violent. Terrazas was one of several individuals who threw hard objects – including cinderblocks and rocks – at federal agents. Terrazas used both a makeshift shield and nearby trees for cover and repeatedly rushed toward the agents to throw remnants of cinderblock at them.
One of the pieces of cinderblock Terrazas threw hit a Border Patrol agent in his left shin, injuring the agent and causing him to bleed. The injured agent removed himself from the front lines to mend his injury but – after realizing he could still walk and stand – returned to the front lines. Another Border Patrol agent was struck by rocks but was uninjured.
Terrazas – who wore a dark beanie and black mask covering the lower half of his face – and other individuals threw rocks at Border Patrol agents for approximately three hours. Law enforcement used less-lethal force pepper bells against Terrazas and other rock throwers. Eventually, law enforcement detained, identified, and arrested Terrazas.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
If convicted, Terrazas would face a statutory maximum sentence of 20 years in federal prison.
HSI is investigating Terrazas.
Assistant United States Attorneys Eric Mackie and Brenda Galván of the General Crimes Section are prosecuting this case.
Alameda County Man Charged in Federal Complaint with Stealing Rare and Historical Chinese Manuscripts from University LibraryRead the Press Release
LOS ANGELES – A San Francisco Bay Area man has been charged in a federal criminal complaint with stealing approximately $216,000 worth of rare and historical Chinese manuscripts from a university’s library system, the Justice Department announced today.
Jeffrey Ying, 38, a.k.a. “Jason Wang,” “Alan Fujimori,” and “Austin Chen,” of Fremont, is charged with theft of major artwork, a felony punishable by up to 10 years in federal prison.
Ying, who is in state custody, is expected to make his initial appearance in United States District Court in Los Angeles in the coming days.
According to an affidavit filed with the complaint, from December 2024 to July 2025, Ying stole the rare manuscripts from the university’s library. Ying rented the manuscripts, brought them home for days at a time, then returned a dummy manuscript instead of the authentic one. He typically then traveled to and from China within several days of the thefts.
The library noticed that several rare Chinese manuscripts were missing, and an initial investigation revealed the books were last viewed by a visitor who identified himself as “Alan Fujimori.” Due to the rarity and value of the books, they are not in regular circulation in the library and must be reserved and checked out.
Law enforcement searched Ying’s Brentwood hotel room and found blank manuscripts and paperwork in the style and manner of the books that Ying had checked out from the university. Law enforcement also found pre-made labels known as asset tags associated with the same manuscripts that could be used to create “dummy” books to return to the library in place of the original books.
Upon Ying’s arrest on Monday, they found a fraudulent California identification card in the name of “Austin Chen” along with two library cards in the names of “Austin Chen” and “Jason Wang.”
A criminal complaint contains allegations. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The FBI’s Art Crime Team is investigating this matter with valuable assistance from the UCLA Police Department.
Assistant United States Attorney Mark A. Williams of the Environmental Crimes and Consumer Protection Section is prosecuting this case.
Convicted Felon Federally Charged with Fraudulently Obtaining More Than $800,000 in COVID Funds by Hiding Criminal HistoryRead the Press Release
LOS ANGELES – A San Bernardino County man was arrested today on a federal criminal complaint alleging that he fraudulently obtained more than $800,000 in taxpayer funded COVID-19 relief funds by concealing his recent federal mail fraud conviction.
Justin Konikow, 38, of Ontario, is charged with wire fraud. He is expected to make his initial appearance this afternoon in U.S. District Court in downtown Los Angeles.
According to an affidavit filed with the complaint, in April 2020 Konikow applied for an Economic Injury Disaster Loan (EIDL), a program which provided low-interest funding to small businesses affected by the COVID-19 pandemic. The application was submitted on behalf of an entity called “Trendsetters” and listed Konikow as its sole owner.
The April 2020 application contained representations that neither Konikow nor the business had ever been criminally charged or convicted of a crime. In fact, Konikow had been convicted in January 2020 of mail fraud in Los Angeles federal court for scheming to defraud the United States, the State of California and its Employment Development Department out of more than $250,000 by filing false unemployment and disability insurance claims using synthetic identities and fake companies. Konikow was sentenced in January 2021 to 35 months’ imprisonment and began serving his sentence in February 2022.
The affidavit alleges that between 2021 and 2022, three EIDL modifications to increase the total proceeds were submitted, each identifying Konikow as Trendsetter’s sole owner. Each application contained a certification that all representations in the loan application (including in the original application) were true, correct, and complete, under penalty of perjury. None of the modification applications provided any information that Konikow was a convicted criminal.
The Small Business Administration (SBA) approved the EIDL and each modification application and wired the loan proceeds totaling approximately $805,000 into Konikow’s bank account. Konikow then quickly wired substantial amounts of the COVID funds out of his bank account to pay off his credit card debt, car payments, and a transfer of approximately $47,000 to his Robinhood stock trading account.
A criminal complaint contains allegations. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
If convicted, Konikow would face a statutory maximum sentence of 20 years in federal prison.
The SBA Office of Inspector General is investigating this matter.
Assistant United States Attorney Gregg Marmaro of the Major Frauds Section is prosecuting this case.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at (866) 720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Two Chinese Nationals Arrested on Federal Complaint Alleging They Illegally Shipped to China Sensitive Microchips Used in AI ApplicationsRead the Press Release
LOS ANGELES – Two Chinese nationals – one of them an illegal alien – have been arrested on a federal criminal complaint alleging they knowingly exported to China tens of millions of dollars’ worth of sensitive microchips used in artificial intelligence (AI) applications, the Justice Department announced today.
Chuan Geng, 28, of Pasadena, and Shiwei Yang, 28, of El Monte, are charged with violating the Export Control Reform Act, a felony that carries a statutory maximum sentence of 20 years in federal prison. Geng surrendered to federal authorities on Saturday. Yang was arrested earlier that day.
At their initial appearance late Monday in United States District Court in Los Angeles, a federal magistrate judge ordered Geng released on $250,000 bond and scheduled an August 12 detention hearing for Yang. Arraignment is scheduled for September 11. No pleas were taken Monday.
Geng is a lawful permanent resident. Yang is an illegal alien who overstayed her visa.
According to an affidavit filed with the complaint, from October 2022 to July 2025, the defendants – through their El Monte-based company, ALX Solutions Inc. – knowingly and willfully exported from the United States to China sensitive technology, including graphic processing units (GPUs) – specialized computer parts used for modern computing – without first obtaining the required license or authorization from the U.S. Department of Commerce. According to the complaint, ALX Solutions Inc. was founded shortly after the Commerce Department began requiring licenses for the advanced microchips that Yang and Geng are alleged to have illegally exported.
A review of export records, business records, and company websites indicates that a December 2024 shipment and at least 20 previous shipments by ALX Solutions involved exports from the U.S. to shipping and freight-forwarding companies in Singapore and Malaysia, which commonly are used as transshipment points to conceal illegal shipments to China.
ALX Solutions has not received payments from the entities to which they purportedly exported goods. Instead, ALX Solutions received numerous payments from companies based in Hong Kong and China, including a $1 million payment from a China-based company in January 2024.
For example, in December 2024, ALX Solutions sent a shipment that falsely labeled that it was sending GPUs subject to federal laws and regulations. In fact, the shipment contained GPUs that required a license for export to China. Neither the defendants nor their company applied for, nor did they obtain a license from the Commerce Department.
According to the complaint and public information, the chip – made by a manufacturer of high-performance AI chips – is the “most powerful GPU chip on the market,” and is “designed specifically for AI applications,” such as “to develop self-driving cars, medical diagnosis systems, and other AI-powered applications.”
Last week, law enforcement searched ALX Solutions’ office and seized the phones belonging to Geng and Yang that revealed incriminating communications between the defendants, including communications about shipping export-controlled chips to China through Malaysia to evade U.S. export laws.
A complaint contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
The United States Department of Commerce’s Bureau of Industry and Security and the FBI are investigating this matter.
Assistant United States Attorney Colin S. Scott, Joseph Guzman, and Jenna Long of the Terrorism and Export Crimes Section are prosecuting this case with assistance from Trial Attorney Chantelle Dial from the Counterintelligence and Export Control Section of the National Security Division.
Two Chinese Nationals Arrested on Complaint Alleging they Illegally Shipped to China Sensitive Microchips Used in AI ApplicationsRead the Press Release
Two Chinese nationals – one of them an illegal alien – have been arrested on a federal criminal complaint alleging they knowingly exported to China tens of millions of dollars’ worth of sensitive microchips used in artificial intelligence (AI) applications.
Chuan Geng, 28, of Pasadena, and Shiwei Yang, 28, of El Monte, are charged with violating the Export Control Reform Act, a felony that carries a statutory maximum penalty of 20 years in prison. Geng surrendered to federal authorities on Saturday. Yang was arrested earlier that day.
At their initial appearance late Monday in U.S. District Court in Los Angeles, a federal magistrate judge ordered Geng released on $250,000 bond and scheduled an Aug. 12 detention hearing for Yang. Arraignment is scheduled for Sept. 11. No pleas were taken Monday.
Geng is a lawful permanent resident. Yang is an illegal alien who overstayed her visa.
According to an affidavit filed with the complaint, from October 2022 to July 2025, the defendants – through their El Monte-based company, ALX Solutions Inc. – knowingly and willfully exported from the United States to China sensitive technology, including graphic processing units (GPUs) – specialized computer parts used for modern computing – without first obtaining the required license or authorization from the U.S. Department of Commerce. According to the complaint, ALX Solutions Inc. was founded shortly after the Commerce Department began requiring licenses for the advanced microchips that Yang and Geng are alleged to have illegally exported.
A review of export records, business records, and company websites indicates that a December 2024 shipment and at least 20 previous shipments by ALX Solutions involved exports from the U.S. to shipping and freight-forwarding companies in Singapore and Malaysia, which commonly are used as transshipment points to conceal illegal shipments to China.
ALX Solutions has not received payments from the entities to which they purportedly exported goods. Instead, ALX Solutions received numerous payments from companies based in Hong Kong and China, including a $1 million payment from a China-based company in January 2024.
For example, in December 2024, ALX Solutions sent a shipment that falsely labeled that it was sending GPUs subject to federal laws and regulations. In fact, the shipment contained GPUs that required a license for export to China. Neither the defendants nor their company applied for, nor did they obtain a license from the Commerce Department.
According to the complaint and public information, the chip – made by a manufacturer of high-performance AI chips – is the “most powerful GPU chip on the market,” and is “designed specifically for AI applications,” such as “to develop self-driving cars, medical diagnosis systems, and other AI-powered applications.”
Last week, law enforcement searched ALX Solutions’ office and seized the phones belonging to Geng and Yang that revealed incriminating communications between the defendants, including communications about shipping export-controlled chips to China through Malaysia to evade U.S. export laws.
Assistant Attorney General for National Security John A. Eisenberg, U.S. Attorney Bilal A. Essayli for the Central District of California, and Assistant Director Roman Rozhavsky of the FBI Counterintelligence Division made the announcement.
The U.S. Department of Commerce’s Bureau of Industry and Security and the FBI are investigating this matter.
Assistant U.S. Attorneys Colin S. Scott, Joseph Guzman, and Jenna Long for the Central District of California are prosecuting this case with assistance from Trial Attorney Chantelle Dial of the National Security Division’s Counterintelligence and Export Control Section.
A criminal complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Glendale Woman Sentenced to 9 Years in Federal Prison for $10.6 Million Hospice Fraud Scheme Involving Kickbacks for PatientsRead the Press Release
LOS ANGELES – A Glendale woman was sentenced today to 108 months in federal prison for participating in a scheme in which hundreds of thousands of dollars in illegal kickbacks were paid and received for patient referrals that resulted in the submission of approximately $10.6 million in fraudulent claims to Medicare for purported hospice care.
Nita Almuete Paddit Palma, 75, of Glendale, was sentenced by United States District Judge Dolly M. Gee, who also ordered her to pay $8,270,032 in restitution.
At a separate hearing today, Judge Gee sentenced Percy Dean Abrams, 75, of Lakewood, to three years of probation, which will include two years of home confinement.
At the conclusion of a six-day trial, a federal jury in December 2024 found Palma guilty of 12 counts of health care fraud and 16 counts of paying illegal kickbacks for health care referrals. The jury also found Abrams guilty of six counts of receiving illegal kickbacks for health care referrals.
Palma was excluded from Medicare, a federal health insurance program for people aged 65 and older, because of prior federal convictions for receiving illegal kickbacks. While she was excluded from Medicare, Palma purchased Magnolia Gardens Hospice through her daughter and bought C@A Hospice through her husband in 2015 and concealed her ownership interest in both hospices from Medicare.
Palma then paid “marketers”, including Abrams, hundreds of thousands of dollars in illegal kickbacks for patient referrals that Palma could bill to Medicare for purported hospice care.
Hospice is only for those who are terminally ill and have a life expectancy of six months or less. Hospice provides comfort care to a patient instead of trying to cure the patient’s illness, and a patient forfeits certain benefits under Medicare when electing hospice.
Consistent with instructions provided by Palma, Abrams falsely represented to prospective patients that they did not need to be dying to be on hospice. After collecting personal identifying information from prospective patients that were not dying, Abrams sent the information to Nita Palma so she could bill Medicare for purported hospice care.
Through Magnolia Gardens Hospice and C@A Hospice, Palma caused the submission of approximately $10.6 million in fraudulent claims to Medicare beginning in 2015 for purported hospice care for patients that were not dying. Palma received approximately $6,000 each month a patient was billed to Medicare for hospice. In turn, Palma paid Abrams and other marketers up to $1,000 per month in illegal kickbacks for each patient referred to her that was billed to Medicare for hospice. Many of the patients that were billed to Medicare through Magnolia Gardens Hospice did not know they were signed up for hospice, and some patients only found out after they were denied medical coverage for services they needed.
During the health care fraud scheme, Medicare requested additional documentation from Magnolia Gardens Hospice to support the purported hospice claims. In response, Palma and her husband directed employees to create fake patient charts and had those fake patient charts submitted to Medicare. Court documents allege that while awaiting trial in this matter, Palma took control of three other hospices and caused the submission of approximately $4.8 million in claims for purported hospice care.
The United States Department of Health and Human Services Office of Inspector General and the FBI investigated this matter.
Assistant United States Attorney Roger A. Hsieh of the Major Frauds Section and Matt Coe-Odess of the Domestic Security and Immigration Crimes Section prosecuted this case.
Former West Adams Man Extradited from Guatemala to Face Federal Charges Alleging He Produced Child Sexual Abuse MaterialRead the Press Release
LOS ANGELES – A Guatemalan national and former resident of the West Adams neighborhood of Los Angeles was extradited from Guatemala and arraigned today on federal criminal charges alleging that he produced child sexual abuse material of five children.
Miguel Angel Batz Jr., 43, a.k.a. “Mike Batz,” was transported to the United States this morning from Guatemala and arrived at Los Angeles International Airport.
Batz is charged with 12 counts of production of child pornography. At his arraignment this afternoon in United States District Court in Los Angeles, he pleaded not guilty to all counts. A federal magistrate judge ordered him jailed without bond and scheduled a trial to begin October 7.
According to the indictment that a federal grand jury returned in June 2022 and was unsealed today, Batz knowingly enticed and coerced five minor victims – all under the age of 18 years old – to engage in sexually explicit conduct for the purpose of producing a visual depiction of that conduct.
The depictions were produced and transmitted using means of interstate and foreign commerce, including by computer, cellphone, and the internet.
Batz originally was charged in Los Angeles Superior Court with contacting a minor to commit a lewd act and later fled to Guatemala. He had legal status in the United States at the time of the alleged offenses.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
If convicted, Batz would face a mandatory minimum sentence of 15 years in federal prison and a statutory maximum sentence of 30 years in federal prison for each count.
The FBI is investigating this matter. The U.S. Attorney’s Office thanks the Guatemalan National Civil Police Transnational Anti-Gang Unit and FBI Legal Attaché suboffice in Guatemala City for their assistance in this matter. The Justice Department’s Office of International Affairs working with Guatemalan law enforcement authorities provided critical assistance in securing the arrest and extradition of Batz to the United States.
Assistant United States Attorney Brandon E. Martinez-Jones of the Violent and Organized Crime Section is prosecuting this case.
Romanian Man Sentenced to 10 Years in Federal Prison for Skimming Tens of Thousands of Welfare Cards at ATMsRead the Press Release
LOS ANGELES – An illegal alien from Romania was sentenced today to 120 months in federal prison for skimming tens of thousands of Electronic Benefit Transfer (EBT) cards in California and New York.
Catalin-Marius Graur, 43, whose last known residence was in Hollywood, was sentenced by United States District Judge Mark Scarsi, who also ordered him to pay $165,697 in restitution.
Graur pleaded guilty in October 2024 to one count of conspiracy to commit bank fraud.
Graur is a Romanian citizen who entered the U.S. on a tourist visa in 2020 but overstayed his visa. Graur travelled across Los Angeles and the Inland Empire installing sophisticated skimming devices in ATMs and point-of-sale terminals to record the account information of individuals who used those devices.
Graur was arrested in New York City in an Airbnb rental apartment in June 2024. In his possession, Graur had more than $37,000 in cash, and 1,488 stolen access device numbers.
Graur worked with multiple members of a transnational criminal organization from Romania to carry out this scheme. A search warrant for the residence of one of Graur’s accomplices revealed that Graur had sent him more than 36,000 stolen EBT card numbers over three years.
EBT card recipients, whom Graur specifically targeted, receive benefits designed specifically to help low-income households pay for housing, food, and other necessities.
The FBI, the United States Secret Service, the San Bernardino County Sheriff’s Department, the California Department of Social Services, and the Romanian National Police investigated this matter.
Assistant United States Attorney Andrew Brown of the Major Frauds Section prosecuted this case.
Financial TV Analyst and One-Time Fugitive Sentenced to 5 Years in Federal Prison for Multimillion-Dollar Con of Victim InvestorsRead the Press Release
LOS ANGELES – A former San Gabriel Valley resident – who was a frequent guest on financial television news programs then became a fugitive from justice after being accused of scamming investors – was sentenced today to 60 months in federal prison for defrauding his victims out of millions of dollars.
James Arthur McDonald Jr., 53, was sentenced by United States District Judge Dale S. Fischer, who will order restitution in this case at a hearing to take place on a future date.
McDonald pleaded guilty on April 7 to one count of securities fraud.
McDonald was the CEO and chief investment officer of two companies headquartered in Los Angeles: Hercules Investments LLC and Index Strategy Advisors Inc. (ISA). He frequently appeared as an analyst on the CNBC financial television news network.
In late 2020, McDonald lost tens of millions of dollars of Hercules client money after adopting a risky short position that effectively bet against the health of the United States economy in the aftermath of the U.S. presidential election. McDonald projected that the COVID-19 pandemic and the election would result in major selloffs that would cause the stock market to drop. When the market decline didn’t occur, Hercules clients lost between $30 million and $40 million. By December 2020, Hercules clients were complaining to company employees about the losses in their accounts.
In early 2021, McDonald solicited millions of dollars' worth of funds from investors in the form of a purported capital raise for Hercules but misrepresented how the funds would be used and failed to disclose the massive losses Hercules previously sustained. As part of the capital raise, McDonald obtained $675,000 in investment funds from one victim group on March 9, 2021. He misappropriated most of those funds in various ways, including spending $174,610 at a Porsche dealership and transferring $109,512 to the landlord of a home McDonald was renting in Arcadia.
McDonald also defrauded clients of ISA, his other firm, using less than half of the approximately $3.6 million he raised for trading purposes. Instead, McDonald frequently commingled ISA client funds with funds from his personal bank account, which he used to purchase luxury cars and to pay rent on his home, personal credit card charges, and Hercules operating expenses and to make Ponzi-like payments to ISA clients – such as paying some ISA clients using funds from other clients.
In total, prosecutors argue that McDonald caused his victims more than $3 million in losses.
McDonald failed to appear before the United States Securities and Exchange Commission (SEC) in November 2021 to testify after allegations arose that he had defrauded investors and remained a fugitive until his arrest in June 2024 at a residence in Port Orchard, Washington. McDonald has been in custody since then. At McDonald’s Washington state hideout, law enforcement found, among other things, a fake Washington, D.C., driver’s license bearing McDonald’s photograph and the name “Brian Thomas,” according to court documents.
“To his victims, [McDonald] seemed to embody the American Dream,” prosecutors argued in a sentencing memorandum. “But looks can be deceiving, and as [McDonald’s] victims learned, their trust had been betrayed.”
The FBI and IRS Criminal Investigation investigated this matter.
In September 2022, the SEC filed a civil complaint charging McDonald and Hercules with violations of federal securities law. In April 2024, United States District Judge Percy Anderson found McDonald and Hercules liable and ordered that they pay several million dollars in disgorgement and civil penalties.
Assistant United States Attorney Alexander B. Schwab, Deputy Chief of the Criminal Division, and Assistant United States Attorney Nisha Chandran of the Major Frauds Section prosecuted this case.
Victorville Man Found Guilty of Transporting 15-Year-Old Girl from San Luis Obispo County to Mexico for Illicit Sexual ActivityRead the Press Release
LOS ANGELES – A San Bernardino County man who posed online as a teenage boy and enticed a 15-year-old girl to have a sexual relationship before bringing her to Mexico has been found guilty on all federal charges he faced at the conclusion of a four-day trial, the Justice Department announced today.
Daniel Navarro, 41, of Victorville, who sometimes posed online as “Angel,” was found guilty late Thursday of two counts of sexual exploitation of a child for the purpose of producing a sexually explicit visual depiction, one count of attempted enticement of a minor to engage in criminal sexual activity, one count of transporting a minor with intent to engage in criminal sexual activity, one count of distribution of child pornography, and one count of transportation of child pornography.
Navarro was arrested in July 2022 as he entered the United States from Mexico 10 days after he brought the victim to Mexico just before her quinceañera. The victim, an Arizona girl who was spending the summer in the Central Coast town of Nipomo – was rescued by Mexican authorities from a Tijuana residence after Navarro’s arrest. He remains in federal custody.
According to evidence presented at trial, Navarro had an online relationship with this victim. A review of one of his Instagram accounts revealed conversations between Navarro and this victim on her Instagram account in which Navarro professed his love for this victim and discussed having sex with her to impregnate her.
Navarro transported this victim from San Luis Obispo County to Tijuana, Mexico, with the intent to engage in criminal sexual activity. Navarro also used Instagram to distribute child pornography to this minor and with transporting child pornography on his phone as he traveled from Tijuana, Mexico, up to San Luis Obispo County before making the return trip to Tijuana. The evidence at trial also showed that Navarro used Instagram to persuade, induce, and entice another second victim to send him sexual images.
United States District Judge André Birotte Jr. scheduled an October 24 sentencing hearing, at which time Navarro will face a mandatory minimum sentence of 15 years in federal prison and a statutory maximum sentence of life imprisonment.
The FBI and the San Luis Obispo County Sheriff’s Office are investigating this matter. The San Luis Obispo County District Attorney’s Office provided substantial assistance. The FBI’s Legal Attaché in Mexico City and Mexican law enforcement authorities provided assistance during this investigation. DHS Homeland Security Investigations provided assistance at the southern border and during Navarro’s arrest.
Assistant United States Attorney Kevin Reidy of the Major Frauds Section and Assistant United States Attorney Kathy Yu are prosecuting this case.
Long Beach Man Arrested on Federal Criminal Complaint Charging Him with Sending a Dozen Payments to Suspected ISIS TerroristsRead the Press Release
LOS ANGELES – A Long Beach man was arrested today on a federal criminal complaint alleging he sent a dozen payments to the Islamic State of Iraq and Syria (ISIS), a designated foreign terrorist organization.
Mark Lorenzo Villanueva, 28, is charged with attempting to provide material support to a foreign terrorist organization, a felony offense that carries a statutory maximum sentence of 20 years in federal prison.
Villanueva, who is a lawful permanent resident from the Philippines, is scheduled to make his initial appearance this afternoon in United States District Court in Los Angeles.
“Supporting a terrorist group, whether at home or abroad, is a serious risk to our national security,” said Acting United States Attorney Bill Essayli. “We will aggressively hunt down and prosecute anyone who provides support or comfort to our enemies.”
“Mr. Villanueva is alleged to have financially supported and pledged his allegiance to a terror group that targets the United States and our interests around the world,” said Patrick Grandy, the Acting Assistant Director in Charge of the FBI's Los Angeles Field Office. “Thanks to the proactive efforts by the Joint Terrorism Task Force, the FBI and our partners safely arrested Mr. Villanueva today and prevented further support and spreading of ISIS ideology.”
According to an affidavit filed with the complaint, Villanueva communicated via social media with two individuals who self-identified as ISIS fighters. During these communications, Villanueva discussed his desire to support ISIS, and offered to send money to the ISIS fighters to support their terrorist activities.
Villanueva told one of the self-identified ISIS fighters that Villanueva wanted to fight for ISIS himself, stating, “It’s an honor to fight and die for our faith. It’s the best way to go to heaven.” Villanueva also stated, “Someday soon, I’ll be joining.” Villanueva told the other individual that Villanueva possessed a bomb and knives. According to prosecutors, during Villanueva’s arrest this morning, the FBI recovered what appeared to be a bomb from Villanueva’s bedroom.
In a February 2025 message with one of the self-identified ISIS fighters, Villanueva offered to send the individual money, and asked whether the money would “cover your equipment and your weapons.” Villanueva discussed sending the money through an intermediary.
According to Western Union records, Villanueva then sent 12 payments totaling $1,615 during a five-month period to two intermediaries who accessed the money overseas.
A complaint contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
The FBI’s Joint Terrorism Task Force is investigating this matter.
Assistant United States Attorney Colin S. Scott of the Terrorism and Export Crimes Section is prosecuting this case, with substantial assistance from Trial Attorney Patrick Cashman of the National Security Division’s Counterterrorism Section.
Burbank Man Found Guilty of Federal Criminal Charges for Embezzling $2.2 Million in Money and Property Left to Elderly VictimRead the Press Release
SANTA ANA, California – A San Fernando Valley man was found guilty by a jury today of embezzling approximately $2.2 million from an estate left to an elderly victim by the victim’s late brother.
Jamal Nathan Dawood, 54, a.k.a. “Jimmy Dawood,” of Burbank, was found guilty of six counts of wire fraud and nine counts of money laundering.
According to evidence presented at a seven-day trial, during the second half of 2019, Dawood offered to assist the victim with the management of real estate properties and retirement savings that the victim had inherited from the victim’s deceased brother. Specifically, Dawood helped the victim open a trust account at a bank for the purpose of managing the retirement savings.
Without the victim’s knowledge or authorization, Dawood then initiated wire and online banking transfers from the victim’s trust account to Dawood-controlled accounts. Without the victim’s knowledge or permission, Dawood also wired money from the victim’s trust account to people with whom Dawood had personal and business relationships.
Dawood convinced the victim to transfer ownership of his home and his late brother’s real estate holdings to various companies. Dawood falsely represented that the victim would retain an ownership interest in his residence and the inherited real estate through these companies. In fact, Dawood and other individuals close to him controlled these companies.
In total, Dawood fraudulently obtained at least $2,202,688 in the victim’s money and property. The illicitly obtained funds were used to purchase real estate in La Crescenta and Fontana.
United States District Judge James V. Selna scheduled a December 8 sentencing hearing, at which time Dawood will face a statutory maximum sentence of 20 years in federal prison for each wire fraud count and up to 10 years in federal prison for each money laundering count.
The FBI investigated this matter.
Assistant United States Attorneys Kristin N. Spencer and Melissa S. Rabbani of the Orange County Office are prosecuting this case.
If you or someone you know is age 60 or older and has been a victim of financial fraud, help is available at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311). This Department of Justice hotline, managed by the Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim and identifying relevant next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis. Reporting is the first step. Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses. The hotline is staffed seven days a week from 3 a.m. to 8 p.m. Pacific Time. English, Spanish, and other languages are available.
Information about the Department of Justice’s Elder Fraud Initiative is available at www.justice.gov/elderjustice.
Former NBA Star, Suspected Israeli Crime Figure Arrested on Federal Indictment Alleging High-Stakes Illegal Poker Games at Encino MansionRead the Press Release
LOS ANGELES – Former NBA star Gilbert Arenas and five other defendants – including a suspected high-level member of an Israeli transnational organized crime group – were arrested today on a federal indictment alleging they operated an illegal gambling business in which high-stakes poker games were played at an Encino mansion Arenas owned.
Arenas, 43, a.k.a. “Agent Zero,” of Woodland Hills, is charged with one count of conspiracy to operate an illegal gambling business, one count of operating an illegal gambling business, and one count of making false statements to federal investigators.
He is scheduled to make his initial appearance and be arraigned this afternoon in United States District Court in downtown Los Angeles.
Also charged in the indictment and arrested today in connection with the illegal gambling business charges are:
- Yevgeni Gershman, 49, a.k.a. “Giora,” of Woodland Hills; a suspected organized crime figure from Israel;
- Evgenni Tourevski, 48, a.k.a. “Eugene,” of Tarzana;
- Allan Austria, 52, a.k.a. “Elica,” of West Hills;
- Yarin Cohen, 27, a.k.a. “YC,” of Tarzana; and
- Ievgen Krachun, 43, of Tarzana.
Each of these defendants is charged with one count of conspiracy to operate an illegal gambling business and one count of operating an illegal gambling business. Their initial appearances and arraignments are scheduled for this afternoon in United States District Court in Los Angeles.
According to the indictment returned on July 15 and unsealed today, from September 2021 to July 2022, Gershman, Arenas, and the other defendants operated an illegal gambling business. Arenas rented out an Encino mansion he owned for the purpose of hosting high-stakes illegal poker games. At Arenas’ direction, Arthur Kats, 51, of West Hollywood, staged the mansion to host the games, found co-conspirators to host the games, and collected rent from the co-conspirators on Arenas’ behalf.
Gershman, Tourevski, Austria, and Cohen managed illegal “Pot Limit Omaha” poker games, among other illegal games, at the Encino mansion, collected a “rake” – a fee the house charged from each pot either as a percentage or a fixed amount per hand – and invited players to compete.
Gershman hired young women who, in exchange for tips, served drinks, provided massages, and offered companionship to the poker players. The women were charged a “tax” – a percentage of their earnings from working the games. Chefs, valets, and armed security guards also were hired to staff these illegal poker games.
Krachun worked as a “chip runner,” in which he tracked players’ wins and losses, distribute poker chips to players, and pay employees.
Gershman, an Israeli citizen, also is charged along with Valentina Cojocari, 35, of Woodland Hills, with three additional counts – conspiracy to commit marriage fraud, marriage fraud, and making a false statement on an immigration document. In early 2022, Gershman conspired with Cojocari to enter into a sham marriage for the purposes of obtaining permanent legal status in the United States and lied to immigration authorities to procure legal status for Gershman, who provided financial support to Cojocari in exchange for her participation in the sham marriage.
Both Gershman and Cojocari submitted false information on their U.S. immigration forms, including Gershman’s answers of “no” as to whether he had ever been detained by any law enforcement official and as to whether he intended to engage in illegal gambling or any other form of commercialized vice.
Cojocari also was arrested today and is scheduled to make her initial appearance and be arraigned this afternoon in United States District Court in Los Angeles.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
If convicted, the defendants would face a statutory maximum sentence of five years in federal prison for each count.
Homeland Security Investigations’ Northridge Office, the Los Angeles Police Department’s Major Crimes Division – Transnational Organized Crime Section, and IRS Criminal Investigation are investigating this matter.
Assistant United States Attorney Samuel J. Diaz of the Transnational Organized Crime Section is prosecuting this case. Assistant United States Attorney Ryan J. Waters of the Asset Forfeiture and Recovery Section is handling the asset forfeiture-related portion of this case.
Arizona Man Pleads Guilty to Money Laundering Charges Related to a $13M Ponzi SchemeRead the Press Release
An Arizona man pleaded guilty today to money laundering and conspiracy to obstruct justice for his role in a scheme to defraud investors.
According to court documents, Vincent Anthony Mazzotta Jr., 54, also known as Vincent Midnight, Delta Prime, and Director Vinchenzo, formerly of the Hollywood Hills area of Los Angeles but residing in Arizona, conspired with his co-defendant and others to defraud investors by falsely promising high-yield profits from investments in cryptocurrency markets using automated trading robots powered by artificial intelligence.
“Vincent Mazzotta defrauded investors in a sophisticated cryptocurrency scheme and then doubled down by using a fake government entity to further victimize those who had entrusted him with their money,” said Acting Assistant Attorney General Matthew R. Galeotti of the Justice Department’s Criminal Division. “Combatting fraud in digital assets is critical to the Criminal Division’s efforts to vindicate victims’ interests and to keep bad actors out of the crypto markets. The Department and its law enforcement partners will aggressively pursue and hold accountable fraudsters who use the veneer of legitimacy and public trust to steal from investors.”
“New types of investments such as Bitcoin and other cryptocurrencies may seem alluring, but they also carry the risk of criminals using their relative novelty to prey on victims,” said U.S. Attorney Bill Essayli for the Central District of California. “I encourage investors to be skeptical when approached by anyone promising novel riches. An ounce of prevention is worth a pound of cure.”
“The defendants in this case purported to be U.S. governmental entities to legitimize their scams, before ultimately attracting the scrutiny of actual federal authorities who were special agents from IRS Criminal Investigation,” said Special Agent in Charge Tyler Hatcher of the IRS Criminal Investigation (IRS-CI) Los Angeles Field Office. “Today’s admission of guilt is another example of our resolve and unique ability to unravel complex financial transactions regardless of how sophisticated the scheme may be.”
Mazzotta and his co-defendant, David Saffron, falsely promised victims short-term, high-yield returns from cryptocurrency trading if the victims invested with cryptocurrency investment companies Mind Capital, Cloud9Capital and others. They also created a fictitious government entity called the Federal Crypto Reserve (FCR) and further victimized the investors by soliciting thousands of dollars to hire the FCR to “investigate” Mind Capital, Cloud9Capital and other crypto-investment firms that had disappeared with the victims’ investments. Mazzotta and Saffron defrauded victims of more than $13 million.
According to court documents, Mazzotta also conspired with others to obstruct justice. Specifically, Mazzotta worked with other co-conspirators after Saffron’s initial arrest to conceal and destroy evidence at Saffron’s apartment, including an iPad and the contents of a personal safe. Mazzotta also conspired to falsify the records of his business, Runway Beauty Inc., to conceal his involvement in the investment fraud scheme from a federal grand jury.
Mazzotta pleaded guilty to one count of money laundering and one count of conspiracy to obstruct justice. He faces a maximum penalty of 10 years in prison on the money laundering count and a maximum penalty of five years in prison on the conspiracy to obstruct justice count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
IRS-CI is investigating the case.
Trial Attorneys Theodore Kneller and Siji Moore of the Criminal Division’s Fraud Section and Assistant U.S. Attorney James Hughes for the Central District of California are prosecuting the case.
If you believe you are a victim in this case, please contact the Fraud Section’s Victim Witness Unit toll-free at (888) 549-3945 or by email at [email protected]. To learn more about victims’ rights, please visit www.justice.gov/criminal/criminal-vns/victim-rights-derechos-de-las-v-ctimas.
Arizona Man Pleads Guilty to Money Laundering Charges Related to Ponzi Scheme that Resulted in $13 Million in Investor LossesRead the Press Release
LOS ANGELES – An Arizona man pleaded guilty today to money laundering and conspiracy to obstruct justice for his role in a scheme to defraud investors.
Vincent Anthony Mazzotta Jr., 54, a.k.a. “Vincent Midnight”, “Delta Prime,” and “Director Vinchenzo,” formerly of Hollywood Hills but currently residing in Arizona, conspired with his co-defendant and others to defraud investors by falsely promising high-yield profits from investments in cryptocurrency markets using automated trading robots powered by artificial intelligence, according to court documents.
Mazzotta pleaded guilty to one count of money laundering and one count of conspiracy to obstruct justice.
United States District Judge Dale S. Fischer scheduled a December 15 sentencing hearing, at which time Mazzotta will face a maximum penalty of 10 years in federal prison on the money laundering count and a maximum penalty of five years in federal prison on the conspiracy to obstruct justice count.
“New types of investments such as Bitcoin and other cryptocurrencies may seem alluring, but they also carry the risk of criminals using their relative novelty to prey on victims,” said United States Attorney Bill Essayli. “I encourage investors to be skeptical when approached by anyone promising novel riches. An ounce of prevention is worth a pound of cure.”
“Vincent Mazzotta defrauded investors in a sophisticated cryptocurrency scheme and then doubled down by using a fake government entity to further victimize those who had entrusted him with their money,” said Acting Assistant Attorney General Matthew R. Galeotti of the Justice Department’s Criminal Division. “Combatting fraud in digital assets is critical to the Criminal Division’s efforts to vindicate victims’ interests and to keep bad actors out of the crypto markets. The Department and its law enforcement partners will aggressively pursue and hold accountable fraudsters who use the veneer of legitimacy and public trust to steal from investors.”
“The defendants in this case purported to be U.S. governmental entities to legitimize their scams, before ultimately attracting the scrutiny of actual federal authorities who were special agents from IRS Criminal Investigation,” said Special Agent in Charge Tyler Hatcher of the IRS Criminal Investigation (IRS-CI) Los Angeles Field Office. “Today’s admission of guilt is another example of our resolve and unique ability to unravel complex financial transactions regardless of how sophisticated the scheme may be.”
Mazzotta and his co-defendant, David Saffron, falsely promised victims short-term, high-yield returns from cryptocurrency trading if the victims invested with cryptocurrency investment companies Mind Capital, Cloud9Capital and others. They also created a fictitious government entity called the Federal Crypto Reserve (FCR) and further victimized the investors by soliciting thousands of dollars to hire the FCR to “investigate” Mind Capital, Cloud9Capital and other crypto-investment firms that had disappeared with the victims’ investments. Mazzotta and Saffron defrauded victims of more than $13 million.
According to court documents, Mazzotta also conspired with others to obstruct justice. Specifically, Mazzotta worked with other co-conspirators after Saffron’s initial arrest to conceal and destroy evidence at Saffron’s apartment, including an iPad and the contents of a personal safe. Mazzotta also conspired to falsify the records of his business, Runway Beauty Inc., to conceal his involvement in the investment fraud scheme from a federal grand jury.
IRS Criminal Investigation is investigating this matter.
Assistant United States Attorney James C. Hughes of the Major Frauds Section and Justice Department Trial Attorneys Theodore Kneller and Siji Moore of the Criminal Division’s Fraud Section are prosecuting this case.
Two Staffers at Ontario Surgery Center Charged in Federal Complaint Alleging They Assaulted and Interfered with ICE InvestigationRead the Press Release
RIVERSIDE, California – Two staff members at a surgery center in San Bernardino County have been charged via a federal criminal complaint alleging they assaulted and interfered with United States immigration officers attempting to lawfully detain an illegal alien, the Justice Department announced today.
Jose de Jesus Ortega, 38, of Highland, was arrested this morning and is expected to make his initial appearance this afternoon in U.S. District Court in Riverside.
Law enforcement is looking for Danielle Nadine Davila, 33, of Corona.
Ortega and Davila are charged with assaulting a federal officer and conspiracy to prevent by force and intimidation a federal officer from discharging his duties.
“This story is another example of a false narrative echoed in the media in furtherance of an agenda to delegitimize federal agents,” said United States Attorney Bill Essayli. “The illegal alien arrested inside the surgery center was not a patient. He ran inside for cover and these defendants attempted to block his apprehension by assaulting our agents. It doesn’t matter who you are or where you work, if you assault our agents or otherwise interfere with our operations, you will be arrested and charged with a federal crime.”
According to an affidavit filed Thursday with the complaint, on July 8, two U.S. Immigration and Customs Enforcement (ICE) officers conducted roving immigration-related operations as part of their duties in Ontario. The officers wore government-issued equipment, including law enforcement vests, and were in an unmarked government-operated vehicle.
The officers were following a truck with three adult men when the truck made a quick turn into the parking lot of a surgery center in Ontario. Officers approached the men after the men had exited the truck, and two of the men ran away. One of the fleeing men – an illegal alien from Honduras – was partially detained near the surgery center’s front entrance before he resisted and pulled away, causing both him and the ICE officer to fall to the ground. Shortly afterward, a medical staffer helped the alien off the ground and helped pull him away from the officer. The alien proceeded inside the surgery center and was pursued by the ICE officer, who eventually stopped him.
Ortega and Davila, both dressed in medical scrubs, impeded and interfered with the arrest – Davila by wedging herself in between the officer and the alien, pushing the officer, and shouting, “Let him go!” and “Get out!”; Ortega by grabbing the officer’s arm and then his vest.
The officer called for assistance and another ICE officer arrived on scene and saw multiple staff members grabbing the first officer. The officers eventually detained and handcuffed the alien, then exited the surgery center with him.
A criminal complaint contains allegations. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
If convicted, the defendants would face a statutory maximum sentence of eight years in federal prison on the assault count and up to six years in federal prison on the conspiracy count.
Homeland Security Investigations is investigating this matter.
Assistant United States Attorney Cory Burleson of the Riverside Branch Office is prosecuting this case.
Whittier Man Arrested on Federal Indictment Alleging He Used Dating Apps to Con Victims Out of More Than $2 MillionRead the Press Release
SANTA ANA, California – A Whittier man was arrested today on a 14-count federal indictment alleging that he used dating apps and websites such as Tinder, Hinge, and Bumble to con victims of his romance scams out of more than $2 million.
Christopher Earl Lloyd, 39, is expected to make his initial appearance and be arraigned on the felony charges this afternoon in United States District Court in Santa Ana.
Lloyd is charged with 13 counts of wire fraud and one count of engaging in a monetary transaction in property derived from the fraud.
According to the indictment that a federal grand jury returned on July 2, from April 2021 to February 2024, Lloyd used dating apps and websites to befriend and engage in romantic relationships with his victims. Lloyd lied to his victims to give them the impression that he was financially successful and knowledgeable about investments.
Lloyd’s falsehoods included that he had closed on multiple properties, that he had been a financial manager for years, that he was the vice president of a company called Planet 13 Holdings, and that he worked for an investment company called Landmark Associates. None of these statements was true.
Lloyd fraudulently induced his victims to provide money and property to him, including in the form of purported investments, by telling them he knew of investment opportunities that would benefit them. Lloyd also told his victims that he would invest their money, that they would receive regular returns on these investments, and that they could withdraw these investments at any time.
He supported his false statements by signing contracts with victims that specified the investments that the victims were to make and setting a false schedule of investment returns. Lloyd’s victims then sent him money, including via wire transfers, Cash App, Zelle, or cash payments. Lloyd used the victims’ money for his own personal benefit. For example, in May 2023, Lloyd allegedly withdrew $40,000 in funds a victim sent him to write a check to a Lexus car dealership in Mission Viejo.
In total, Lloyd caused his victims to suffer more than $2 million in losses.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
If convicted, Lloyd would face a statutory maximum sentence of 20 years in federal prison for each wire fraud count and up to 10 years in federal prison for the monetary transaction count.
The FBI is investigating this matter.
Assistant United States Attorney Kevin Fu of the Orange County Office is prosecuting this case.
Engineer Pleads Guilty to Stealing for Chinese Government’s Benefit Trade Secret Technology Designed for Missile Launch and DetectionRead the Press Release
A Santa Clara County man and former engineer at a Southern California company pleaded guilty today to stealing trade secret technologies developed for use by the U.S. government to detect nuclear missile launches, track ballistic and hypersonic missiles, and to allow U.S. fighter planes to detect and evade heat-seeking missiles.
Chenguang Gong, 59, of San Jose, pleaded guilty to one count of theft of trade secrets. He remains free on $1.75 million bond.
According to his plea agreement, Gong – a dual citizen of the United States and China – transferred more than 3,600 files from a Los Angeles-area research and development company where he worked – identified in court documents as the victim company – to personal storage devices during his brief tenure with the company last year.
The files Gong transferred include blueprints for sophisticated infrared sensors designed for use in space-based systems to detect nuclear missile launches and track ballistic and hypersonic missiles, as well as blueprints for sensors designed to enable U.S. military aircraft to detect incoming heat-seeking missiles and take countermeasures, including by jamming the missiles’ infrared tracking ability. Some of these files were later found on storage devices seized from Gong’s temporary residence in Thousand Oaks.
In January 2023, the victim company hired Gong as an application-specific integrated circuit design manager responsible for the design, development and verification of its infrared sensors. Beginning on approximately March 30, 2023, and continuing until his termination on April 26, 2023, Gong transferred thousands of files from his work laptop to three personal storage devices, including more than 1,800 files after he had accepted a job at one of the victim company’s main competitors.
Many of the files Gong transferred contained proprietary and trade secret information related to the development and design of a readout integrated circuit that allows space-based systems to detect missile launches and track ballistic and hypersonic missiles and a readout integrated circuit that allows aircraft to track incoming threats in low visibility environments.
Gong also transferred files containing trade secrets relating to the development of “next generation” sensors capable of detecting low observable targets while demonstrating increased survivability in space, as well as the blueprints for the mechanical assemblies used to house and cryogenically cool the victim company’s sensors. This information was among the victim company’s most important trade secrets that are worth hundreds of millions of dollars. Many of the files had been marked “[VICTIM COMPANY] PROPRIETARY,” “FOR OFFICIAL USE ONLY,” “PROPRIETARY INFORMATION,” and “EXPORT CONTROLLED.”
Law enforcement also discovered that, between approximately 2014 and 2022, while employed at several major technology companies in the United States, Gong submitted numerous applications to ‘Talent Programs’ administered by the People’s Republic of China (PRC). The PRC government has established these talent programs as a means to identify individuals who have expert skills, abilities, and knowledge of advanced sciences and technologies in order to access and utilize those skills and knowledge in transforming the PRC’s economy, including its military capabilities.
In 2014, while employed at a U.S. information technology company headquartered in Dallas, Gong sent a business proposal to a contact at a high-tech research institute in China focused on both military and civilian products. In his proposal, translated from Chinese, Gong described a plan to produce high-performance analog-to-digital converters like those produced by his employer. In another Talent Program application from September 2020, Gong proposed to develop “low light/night vision” image sensors for use in military night vision goggles and civilian applications. Gong’s proposal included a video presentation that contained the model number of a sensor developed by an international defense, aerospace, and security company where Gong worked from 2015 to 2019.
Gong travelled to China several times to seek Talent Program funding in order to develop sophisticated analog-to-digital converters. In his Talent Program applications, Gong underscored that the high-performance analog-to-digital converters he proposed to develop in China had military applications, explaining that they “directly determine the accuracy and range of radar systems” and that “[m]issile navigation systems also often use radar front-end systems.” In a 2019 email, translated from Chinese, Gong remarked that he “took a risk” by traveling to China to participate in the Talent Programs “because [he] worked for…an American military industry company” and thought he could “do something” to contribute to China’s “high-end military integrated circuits.”
According to his plea agreement, the intended economic loss from Gong’s criminal conduct exceeds $3.5 million.
U.S. District Judge John F. Walter scheduled sentencing for Sept. 29, at which time Gong faces a statutory maximum penalty of 10 years in prison.
The FBI’s Los Angeles Field Office through the Counterintelligence Task Force in partnership with the State Department’s Diplomatic Security Service and Homeland Security Investigations is investigating this matter. The FBI’s San Francisco Field Office and the U.S. Attorney’s Office for the Northern District of California also provided substantial assistance.
Assistant U.S. Attorneys David C. Lachman and Nisha Chandran for the Central District of California and Trial Attorney Brendan Geary of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.
Engineer Pleads Guilty to Stealing Trade Secret Technology Designed for Missile Launch DetectionRead the Press Release
LOS ANGELES – A Santa Clara County man and former engineer at a Southern California company pleaded guilty today to stealing trade secret technologies developed for use by the United States government to detect nuclear missile launches, track ballistic and hypersonic missiles, and to allow U.S. fighter planes to detect and evade heat-seeking missiles.
Chenguang Gong, 59, of San Jose, pleaded guilty to one count of theft of trade secrets. He remains free on $1.75 million bond.
According to his plea agreement, Gong – a dual citizen of the United States and China – transferred more than 3,600 files from a Los Angeles-area research and development company where he worked – identified in court documents as the victim company – to personal storage devices during his brief tenure with the company in 2023.
The files Gong transferred include blueprints for sophisticated infrared sensors designed for use in space-based systems to detect nuclear missile launches and track ballistic and hypersonic missiles, as well as blueprints for sensors designed to enable U.S. military aircraft to detect incoming heat-seeking missiles and take countermeasures, including by jamming the missiles’ infrared tracking ability. Some of these files were later found on storage devices seized from Gong’s temporary residence in Thousand Oaks.
In January 2023, the victim company hired Gong as an application-specific integrated circuit design manager responsible for the design, development and verification of its infrared sensors. Beginning on approximately March 30, 2023, and continuing until his termination on April 26, 2023, Gong transferred thousands of files from his work laptop to three personal storage devices, including more than 1,800 files after he had accepted a job at one of the victim company’s main competitors.
Many of the files Gong transferred contained proprietary and trade secret information related to the development and design of a readout integrated circuit that allows space-based systems to detect missile launches and track ballistic and hypersonic missiles and a readout integrated circuit that allows aircraft to track incoming threats in low visibility environments.
Gong also transferred files containing trade secrets relating to the development of “next generation” sensors capable of detecting low observable targets while demonstrating increased survivability in space, as well as the blueprints for the mechanical assemblies used to house and cryogenically cool the victim company’s sensors. This information was among the victim company’s most important trade secrets that are worth hundreds of millions of dollars. Many of the files had been marked “[VICTIM COMPANY] PROPRIETARY,” “FOR OFFICIAL USE ONLY,” “PROPRIETARY INFORMATION,” and “EXPORT CONTROLLED.”
Law enforcement also discovered that, between approximately 2014 and 2022, while employed at several major technology companies in the United States, Gong submitted numerous applications to ‘Talent Programs’ administered by the People’s Republic of China (PRC) government. The PRC government has established these talent programs as a means to identify individuals who have expert skills, abilities, and knowledge of advanced sciences and technologies in order to access and utilize those skills and knowledge in transforming the PRC’s economy, including its military capabilities.
In 2014, while employed at a U.S. information technology company headquartered in Dallas, Gong sent a business proposal to a contact at a high-tech research institute in China focused on both military and civilian products. In his proposal, translated from Chinese, Gong described a plan to produce high-performance analog-to-digital converters like those produced by his employer.
In another Talent Program application from September 2020, Gong proposed to develop “low light/night vision” image sensors for use in military night vision goggles and civilian applications. Gong’s proposal included a video presentation that contained the model number of a sensor developed by an international defense, aerospace, and security company where Gong worked from 2015 to 2019.
Gong also travelled to China to seek Talent Program funding in order to develop sophisticated analog-to-digital converters. In his Talent Program applications, Gong underscored that the high-performance analog-to-digital converters he proposed to develop in China had military applications, explaining that they “directly determine the accuracy and range of radar systems” and that “[m]issile navigation systems also often use radar front-end systems.” In a 2019 email, translated from Chinese, Gong remarked that he “took a risk” by traveling to China to participate in the Talent Programs “because [he] worked for…an American military industry company” and thought he could “do something” to contribute to China’s “high-end military integrated circuits.”
According to his plea agreement, the intended economic loss from Gong’s criminal conduct exceeds $3.5 million.
United States District Judge John F. Walter scheduled a September 29 sentencing hearing, at which time Gong will face a statutory maximum sentence of 10 years in federal prison.
The FBI’s Los Angeles Field Office through the Counterintelligence Task Force in partnership with the State Department’s Diplomatic Security Service and Homeland Security Investigations is investigating this matter. The FBI’s San Francisco Field Office and the U.S. Attorney’s Office for the Northern District of California also provided substantial assistance.
Assistant United States Attorneys David C. Lachman of the Terrorism and Export Crimes Section and Nisha Chandran of the Major Frauds Section are prosecuting this case, with valuable assistance from Department of Justice Trial Attorney Brendan P. Geary of the National Security Division’s Counterintelligence and Export Control Section.
Swedish Man Who Licensed Rights to Late Colombian Drug Lord Pablo Escobar Pleads Guilty to Fraud, Money Laundering ChargesRead the Press Release
LOS ANGELES – A Swedish national who licensed the rights of the late Colombian narco-terrorist Pablo Escobar pleaded guilty today to six federal criminal charges for defrauding investors by marketing and selling products – including flamethrowers and cellphones – that he never delivered.
Olof Kyros Gustafsson, 32, a.k.a. “El Silencio,” pleaded guilty to one count of conspiracy to commit wire fraud and mail fraud, one count of wire fraud, one count of mail fraud, one count of conspiracy to commit money laundering, one count of concealment money laundering, and one count of international concealment money laundering.
Gustafsson has been in federal custody since March 28, when he was extradited to the United States from Spain, where he was arrested in December 2023.
According to his plea agreement, Gustafsson was the CEO of Escobar Inc., a corporation registered in Puerto Rico that held successor-in-interest rights to the persona and legacy of Pablo Escobar, the deceased Colombian narco-terrorist and late head of the Medellín Cartel. Escobar Inc. used Pablo Escobar’s likeness and persona to market and sell purported consumer products to the public.
From July 2019 to November 2023, Gustafsson identified existing products in the marketplace that were being manufactured and sold to the public. He then used the Escobar persona to market and advertise similar and competing products purportedly being sold by Escobar Inc., advertising them at a price substantially lower than existing counterparts being sold by other companies.
Gustafsson then purportedly sold the products – including an Escobar Flamethrower, an Escobar Fold Phone, an Escobar Gold 11 Pro Phone, and Escobar Cash (marketed as a “physical cryptocurrency”) – to customers, receiving payments via PayPal, Stripe, Coinbase, among other payment processors, as well as bank and wire transfers.
Despite receiving customer payments, Gustafsson did not deliver the Escobar Inc. products to paying customers because the products did not exist.
In furtherance of the scheme, Gustafsson sent crudely made samples of the purported Escobar Inc. products to online technology reviewers and social media influencers to attempt to increase the public’s demand for them. For example, Gustafsson sent Samsung Galaxy Fold Phones wrapped in gold foil and disguised as Escobar Inc. phones to online technology reviewers to attempt to induce victims who watched the online reviews into buying the products that never would be delivered.
Also, rather than sending paying customers the actual products, Gustafsson mailed them a “Certificate of Ownership,” a book, or other Escobar Inc. promotional materials so there was a record of mailing from the company to the customer. When a paying customer attempted to obtain a refund when the product was never delivered, Gustafsson fraudulently referred the payment processor to the proof of mailing for the Certificate of Ownership or other material as proof that the product itself was shipped and that the customer had received it so the refund requests would be denied.
Gustafsson also caused bank accounts to be opened under his name and entities he controlled to be used as funnel accounts – bank accounts into which he deposited and withdrew proceeds derived from his criminal activities. The purpose was to conceal and disguise the nature, location, source, ownership, and control of the proceeds. The bank accounts were located in the United States, Sweden, and the United Arab Emirates.
United States District Judge Fernando L. Aenlle-Rocha scheduled a December 5 sentencing hearing, at which time Gustafsson will face a statutory maximum sentence of 20 years in federal prison for each fraud-related count and up to 10 years in federal prison for each money laundering-related count.
As part of his plea agreement, Gustafsson agreed to pay up to $1.3 million in restitution to victims, as well as to forfeiture to funds that were proceeds of the fraud schemes, including money currently held in a bank account in Sweden.
IRS Criminal Investigation, the FBI, and the Federal Deposit Insurance Corporation-Office of Inspector General are investigating this matter, with assistance from the Department of Justice’s Office of International Affairs, the United States Marshals Service, Eurojust, Spanish authorities, and French judicial authorities.
Assistant United States Attorney Joshua O. Mausner of the Violent and Organized Crime Section is prosecuting this case.
Mexican Illegal Alien Who Killed Two California Teenagers in DUI Car Crash Arraigned on Federal Criminal Immigration ChargeRead the Press Release
SANTA ANA, California – A Mexican national and twice-deported illegal alien, whose criminal history includes nine arrests and a vehicular manslaughter conviction for killing two teenagers in Orange County, was arraigned today on a felony federal charge.
Oscar Eduardo Ortega, 43, pleaded not guilty to one count of being an illegal alien found in the United States following removal.
United States Magistrate Judge John D. Early ordered Ortega detained and scheduled a September 8 trial date in this matter.
“After being deported to Mexico twice, he returned to our country, where he killed two young people in a DUI accident and where he served only 3½ years out of a 10-year sentence in California state prison,” said United States Attorney Bill Essayli. “Governor Newsom let down the victims’ families by allowing this criminal to be released from prison after barely serving a third of his sentence. The state of the criminal justice system in California is dire, the prisons are being emptied at lighting speed. Thankfully, the federal government is able to step in and help deliver justice for the victims and their families in this case.”
“Ortega never should have been in our country, and he should never have been given an early release after killing Anya Varfolomeev and Nikolay Osokin,” U.S. Department of Homeland Security Deputy Secretary Troy Edgar said in a statement. “Today, a small amount of justice has been done. The grief will never go away, but we continue to pray for Anya and Nikolay’s families as well as all Americans harmed by illegal immigration.”
According to the single-count indictment, Ortega previously was removed from the United States in December 2016 and June 2018. In November 2021, Ortega – while under the influence of alcohol and drugs and driving at speeds of 100 mph on the 405 freeway in Seal Beach – crashed into another car, killing the two 19-year-old victims inside.
In 2022, Ortega was convicted in Orange County Superior Court of two counts of gross vehicular manslaughter while intoxicated and was sentenced to 10 years in California state prison. He was released from state prison after serving approximately 3½ years of his sentence.
On Thursday, he was taken into custody by U.S. immigration officials and is now in federal custody.
Ortega’s criminal history also includes felony convictions in October 2005 in Los Angeles Superior Court for grand theft of personal property and unlawful taking of a vehicle. In February 2014, Ortega was convicted in Orange County Superior Court of a felony charge of false imprisonment by violence and deceit.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
If convicted, Ortega would face a statutory maximum sentence of 10 years in federal prison.
United States Immigration and Customs Enforcement is investigating this matter.
Assistant United States Attorney Lawrence E. Kole of the Orange County Office is prosecuting this case.
Mexican National Charged in Federal Criminal Complaint with Staging Fake Immigration ‘Kidnapping’Read the Press Release
LOS ANGELES – An illegal alien from Mexico has been charged in a federal criminal complaint with orchestrating a phony kidnapping – which she blamed on federal agents or people working with federal agents – to generate public sympathy and solicit donations, the Justice Department announced today.
Yuriana Julia Pelaez Calderon, 41, of South Los Angeles, is charged with conspiracy and making false statements to federal officers.
Calderon, who is now U.S. immigration custody, is expected to make her initial appearance in the coming weeks in United States District Court in downtown Los Angeles.
“Dangerous rhetoric that ICE agents are ‘kidnapping’ illegal immigrants is being recklessly peddled by politicians and echoed in the media to inflame the public and discredit our courageous federal agents,” said United States Attorney Bill Essayli. “The conduct alleged in today’s complaint shows this hoax ‘kidnapping’ was a well-orchestrated conspiracy. The defendant and all those involved will face the full consequences of their conduct under federal law. I thank our partners at Homeland Security Investigations and all federal agents facing unprecedented levels of assaults for once again providing cool heads and professionalism during these difficult times.”
According to an affidavit filed with the complaint filed Wednesday, an attorney representing Calderon’s family held a press conference on June 30 to announce that Calderon had reportedly been kidnapped five days earlier at a Jack in the Box restaurant parking lot in downtown Los Angeles and brought to San Ysidro, where “she was presented to [a U.S. Immigration and Customs Enforcement] staffer” and “presented with voluntary self-deportation paperwork.” The attorney then said Calderon refused to sign the paperwork and demanded to speak to a judge and a lawyer. In response, “she was punished” and was sent to a warehouse in an undisclosed location.
The press conference garnered media attention and stoked fear in the community. Meanwhile, Calderon’s daughter set up a GoFundMe page, requesting $4,500 and stating that Calderon “was taken by masked men in an unmarked vehicle…when she was on her way to work.” According to the complaint, this entire story was fabricated.
On July 3, when Calderon was still purportedly missing, federal agents grew concerned after confirming that Calderon was not in immigration custody. Homeland Security Investigations (HSI) began searching for Calderon over the holiday weekend.
On July 5, HSI agents tracked Calderon down in a shopping plaza parking lot in Bakersfield. Calderon continued to falsely claim she was taken by masked men and held in custody with others.
Video surveillance – including video of Calderon leaving the Jack in the Box parking lot and getting into a nearby sedan – as well as telephone records demonstrate Calderon fabricated the entire story. Calderon and her family knew that law enforcement was searching for her and feared for her safety, but Calderon and her family did not come forward. Instead, Calderon created what law enforcement believe to be fabricated photos of her “rescue,” made to look as if she was abused while in ICE custody and planned to hold a press conference on July 6 to increase donations to the GoFundMe page and to obtain other benefits.
“Diverting critical law enforcement resources is not only reckless and irresponsible, but it also endangers the community. Since early July, my office invested valuable time and resources working this alleged kidnapping investigation only to discover that it was a hoax,” said HSI Los Angeles Special Agent in Charge Eddy Wang. “The real cost of a fraud like this is the amount of fentanyl not seized, child predators not removed from the communities, and human trafficking victims not rescued because law enforcement re-directed resources to recover the defendant. We want to assure the public that allegations of criminal activity will be thoroughly investigated by HSI and our law enforcement partners and that those who engage in fraud and deception will be prosecuted to the fullest extent of the law.”
A criminal complaint contains allegations. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
If convicted of all charges, Calderon would face a statutory maximum sentence of five years in federal prison for conspiracy and up to five years in federal prison on the false statements charge.
Homeland Security Investigations Los Angeles is investigating this matter with support from the Garden Grove Police Department.
The Transnational Organized Crime Section is prosecuting this case.
Former Amtrak Employee Sentenced to over 2 Years in Prison for Crimes, Including Near-$1 Million COVID Jobless Benefits FraudRead the Press Release
LOS ANGELES – A former Amtrak employee was sentenced today to 25 months in federal prison for conspiring with her husband to steal nearly $1 million in COVID-19 pandemic-related unemployment insurance (UI) benefits and for fraudulently obtaining more than $63,000 in sickness benefits while she worked at the passenger railroad company.
Lizette Berrios Lathon, 48, of Moreno Valley, was sentenced by United States District Judge Fernando M. Olguin, who also ordered her to pay $1,061,667 in restitution.
In November 2022, Lizette Lathon pleaded guilty to one count of conspiracy to commit mail fraud and wire fraud, one count of aggravated identity theft, and one count of wire fraud.
Previously, in July 2024, Judge Olguin sentenced Lathon’s husband, Kenneth Andrew Lathon, 50, also of Moreno Valley, to 54 months in federal prison and ordered him to pay $998,630 in restitution.
Kenneth Lathon pleaded guilty in November 2022 to one count of conspiracy to commit mail fraud and wire fraud, one count of aggravated identity theft, and one count of unlawful possession of a firearm by a convicted felon.
From 2014 until at least September 2022, Lizette Lathon, in addition to her one-time duties as a service attendant for Amtrak, operated at least three tax preparation businesses: Miracle Tax Service, which was located on Los Angeles’ Miracle Mile; Hardcore Corp., which did business as “Hardcore Taxes”; and Lathon LLC, which did business as “LL Taxes.” The latter two companies were in Moreno Valley.
Lathon and her husband took advantage of the expanded eligibility for UI benefits made possible by the Coronavirus Aid, Relief, and Economic Security (CARES) Act signed into law in 2020. The CARES Act also established the Pandemic Unemployment Assistance program, which provided additional UI benefits to qualified individuals during the COVID-19 pandemic, including people who did not otherwise qualify for UI such as business owners, self-employed workers, independent contractors, and those with a limited work history.
In some instances, Lizette Lathon submitted fraudulent applications with the California Employment Development Department (EDD) for UI benefits using names, Social Security numbers, and dates of birth that she obtained from former clients of her tax preparation businesses without the permission of those former clients. On the applications, she falsely asserted inflated income for the named claimants – many of whom had never lived in California – to receive the maximum benefit amount.
As a result of the fraudulent claims she filed, EDD authorized Bank of America to issue debit cards in the names of Lizette Lathon’s former clients, but the cards were mailed to addresses she and her family controlled. She and her husband then used the debit cards to make cash withdrawals at ATMs and to make purchases at retail stores.
During the conspiracy, which lasted from the spring of 2020 until March 2021, Lathon and her husband caused at least 44 fraudulent unemployment claims to be filed, resulting in losses to EDD and the United States Treasury of approximately $998,630.
Lizette Lathon, who was employed at Amtrak from 2000 to 2021, also schemed to defraud the Railroad Retirement Board out of sickness benefit payments by filing forged and false claims that stated she was being treated by a medical professional for pain and anxiety. Through this scheme, which lasted from September 2014 to January 2020, she fraudulently obtained approximately $63,047 in sickness benefit payments.
Kenneth Lathon possessed a .22-caliber rifle and 12-gauge shotgun despite his criminal history, which includes felony convictions in California state court for theft, cocaine possession, and fraud.
These matters were investigated by the Amtrak Office of Inspector General; the United States Railroad Retirement Board Office of Inspector General; the United States Department of Labor Office of Inspector General; the United States Department of Labor Employee Benefits Security Administration; the California Employment Development Department; the Bureau of Alcohol, Tobacco, Firearms and Explosives; Homeland Security Investigations; and the United States Postal Inspection Service.
Assistant United States Attorney Cory L. Burleson of the Riverside Branch Office prosecuted these cases.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at (866) 720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
One LASD Deputy Charged, Another Pleads Guilty to Conspiring to Violate Civil Rights While Providing Off-Duty Security for ClientsRead the Press Release
LOS ANGELES – Federal prosecutors today secured a guilty plea from a Los Angeles County Sheriff’s Department (LASD) deputy and charged and filed a plea agreement with another LASD deputy – both of whom used their positions in law enforcement while acting as private security for their off-duty clients, including a now-jailed cryptocurrency businessman who proclaimed himself “The Godfather.”
David Anthony Rodriguez, 43, of La Verne, pleaded guilty today to one count of conspiracy against rights.
Relatedly, Christopher Michael Cadman, 33, of Fullerton, agreed to plead guilty to a two-count information charging him with conspiracy against rights and subscribing to a false tax return. Cadman, who will face up to 13 years in federal prison at his sentencing hearing after he pleads guilty, is expected to make his initial appearance in United States District Court in the coming days.
Rodriguez and Cadman formerly were employed by Adam Iza, 24, who resided in Beverly Hills and Newport Beach, a cryptocurrency businessman who has been in federal custody since September 2024. Iza pleaded guilty on January 30 to one count of conspiracy against rights, one count of wire fraud, and one count of tax evasion. His sentencing hearing is scheduled for December 15.
According to court documents, in August 2021, Cadman and a law enforcement officer identified as “LASD Deputy 6” intimidated and threatened a victim who was one of Iza’s adversaries. LASD Deputy 6 held the victim at gunpoint during a meeting at Iza’s office inside his Bel Air mansion. Immediately afterward, the victim transferred approximately $25,000 from his bank account to Iza’s bank account in response to the threat and demand.
In September 2021, Cadman and other law enforcement officers orchestrated a traffic stop in Paramount to arrest the same victim. Cadman admitted in his plea agreement to helping organize the traffic stop and arrest on Iza’s behalf and to receiving cash payments while he worked for Iza.
Cadman also received income he knowingly failed to report – at least $40,500 – on his 2021 federal tax return, which he signed and filed with the IRS in February 2022. Cadman admitted to owing approximately $11,000 in federal taxes for that year.
In a separate plea agreement, Rodriguez admitted to using his powers as a law enforcement officer in July 2022 to improperly obtain a court-authorized search warrant, lying to a judge that it was related to a robbery investigation, to obtain GPS location information associated with another victim’s cellular phone on behalf of a client – other than Iza – who hired Rodriguez as a private security guard.
After securing the GPS location information for the victim’s phone, Rodriguez shared the coordinates with co-conspirators, including Eric Chase Saavedra, 42, of Chino, an LASD deputy and former federal task force officer who ran a private security company, who pleaded guilty on February 6 to one count of conspiracy against rights and one count of subscribing to a false tax return. LASD deputies and other co-conspirators would use information obtained from the court-authorized search warrant to harass, threaten, and intimidate the victim.
Saavedra, who is free on $50,000 bond, is expected to be sentenced in the coming months.
United States District Judge Percy Anderson scheduled a November 10 sentencing hearing for Rodriguez, who faces a statutory maximum sentence of 10 years in federal prison.
The FBI and IRS Criminal Investigation are investigating this matter. The Los Angeles County Sheriff’s Department has assisted.
Assistant United States Attorney Maxwell K. Coll of the Cyber and Intellectual Property Crimes Section is prosecuting these cases.
California Man Pleads Guilty in Connection with $16M Hospice Fraud Scheme and Money Laundering SchemeRead the Press Release
A California man pleaded guilty today in connection with his role in defrauding Medicare of nearly $16 million through sham hospice companies and laundering the fraudulent proceeds.
According to court documents, Juan Carlos Esparza, 33, of Valley Village, schemed with others, including co-defendants Petros Fichidzhyan and Karpis Srapyan, to bill Medicare for hospice services that were not medically necessary and never provided. From July 2019 until January 2023, the defendant and his co-defendants operated four sham hospices, one of which, House of Angels Hospice, was owned by Esparza. The defendants controlled the other three hospices, even though the listed owners were foreign nationals. Fichidzhyan, Esparza, and Srapyan concealed the scheme by using foreign nationals’ personal identifying information to open bank accounts, submit information to Medicare, and sign property leases. They also controlled and used cell phones in the names of the foreign nationals in furtherance of the scheme. In total, Medicare paid the sham hospices nearly $16 million.
Fichidzhyan, Esparza, and Srapyan worked with others, including their co-defendants Susanna Harutyunyan and Mihran Panosyan, to launder the fraudulent proceeds. As part of the money laundering scheme, Esparza and his co-defendants maintained fraudulent identification documents and other documents associated with the sham hospices at the House of Angels office, and bank documents, checkbooks, and credit and debit cards in the names of purported foreign owners in a pair of residential properties. After defrauding Medicare, Esparza and his co-defendants moved the funds between various assets and accounts, including bank accounts in the names of shell companies, to conceal the scheme. Esparza spent $90,000 in fraudulent proceeds to purchase a vehicle.
Esparza pleaded guilty to health care fraud and transactional money laundering and is scheduled to be sentenced on Oct. 6. He faces a maximum penalty of 10 years in prison for healthcare fraud and a maximum penalty of 10 years in prison for transactional money laundering. A federal district court judge will determine his sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Co-defendant Petros Fichidzhyan previously pleaded guilty to health care fraud, aggravated identity theft, and money laundering. In May, Fichidzhyan was sentenced to 12 years in prison. Co-defendant Mihran Panosyan pleaded guilty to money laundering last month and is scheduled to be sentenced Sept. 8. Co-defendant Karpis Srapyan pleaded guilty to conspiracy to commit health care fraud and money laundering and is scheduled to be sentenced on Oct. 6. Co-defendant Susanna Harutyunyan pleaded guilty to money laundering and is scheduled to be sentenced on Nov. 17. Harutyunyan faces deportation.
The guilty plea today is the most recent conviction in the Justice Department’s ongoing effort to combat hospice fraud in the greater Los Angeles area. Last year, a doctor was convicted at trial for his role in a scheme to bill Medicare for hospice services patients did not need, and two other defendants were sentenced for their roles in a hospice fraud scheme.
Acting Assistant Attorney General Matthew R. Galeotti of the Justice Department’s Criminal Division, Assistant Director in Charge Akil Davis of the FBI Los Angeles Field Office, and Deputy Inspector General for Investigations Christian J. Schrank of the Department of Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.
The FBI and HHS-OIG are investigating the case.
Trial Attorneys Sarah E. Edwards, Allison L. McGuire, and Michael Bacharach of the Criminal Division’s Fraud Section are prosecuting the case, and Assistant U.S. Attorney Tara B. Vavere for the Central District of California is handling asset forfeiture.
The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,800 defendants who collectively have billed federal health care programs and private insurers more than $30 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
CEO of an Iranian Engineering Company Arrested for Allegedly Shipping Sophisticated Electronics from the U.S. to Iran in Violation of U.S. SanctionsRead the Press Release
An Iranian national and U.S. lawful permanent resident has been arrested on a four-count federal indictment charging him with unlawfully exporting electronics used in railway signaling and telecommunications systems from the United States to Iran, in violation the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions and Sanctions Regulations (ITSR).
Bahram Mohammad Ostovari, 66, a resident of Santa Monica and Tehran, Iran, was arrested Thursday afternoon upon his arrival at Los Angeles International Airport.
Ostovari is charged with one count of conspiracy to violate the International Emergency Economic Powers Act and three counts of violating the IEEPA.
According to the indictment unsealed today, Ostovari is the founder and CEO of a Tehran-based engineering company – identified in the indictment as “Company A” – that supplied signaling and communications systems to Iran and its government, including on projects for the Islamic Republic of Iran Railways. From at least May 2018 to July 2025, Ostovari and his co-conspirators obtained and shipped sophisticated computer processors, railway signaling equipment, and other electronics and electronic components to Company A in Iran. Many of these items were controlled under federal regulations, and their export to Iran without a license was prohibited.
To perpetrate his illegal export scheme, Ostovari used two front companies he controlled in the UAE – MH-SYS FZCO and Match Systech FZE – as conduits. Ostovari directed co-conspirators at these front companies to acquire the electronics and electronic components for Company A. Ostovari and his co-conspirators intentionally concealed from electronics suppliers in the United States and elsewhere that the goods were destined for Iran, falsely stating that MH-SYS and Match Systech in the UAE were the end users when in fact the true end user was Company A in Iran. Ostovari then directed his co-conspirators to arrange to ship the goods from the UAE to Company A in Iran.
After he became a lawful permanent resident of the United States in May 2020, Ostovari continued to export, sell, and supply electronics and electrical components to Company A in Iran.
As alleged, Ostovari knew of the U.S. sanctions against Iran, mentioning them in emails to co-conspirators and directing one co-conspirator to provide false information to a federal export control officer regarding the end use of U.S.-origin goods they had shipped to Company A in Iran.
The IEEPA and the ITSR impose controls and restrictions on transactions involving Iran based on the threats posed by Iran to the national security of the United States including, among others, its pursuit of nuclear weapons and sponsorship of terrorism. The IEEPA and ITSR, among other things, prohibit the export, re-export, sale, or supply, directly or indirectly, from the United States or by a United States person, wherever located, of any goods, technology, or services to Iran or the Government of Iran without first obtaining authorization from the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC).
At no time did Ostovari, his companies, or his co-conspirators apply for or obtain authorization from OFAC to export, sell or supply goods and technologies from the United States to Iran.
If convicted, Ostovari faces a maximum penalty of 20 years in prison for each count.
Homeland Security Investigations and the Department of Commerce’s Bureau of Industry and Security are investigating this case.
Assistant U.S. Attorneys David C. Lachman and Colin S. Scott for the Central District of California are prosecuting the case, with valuable assistance from Trial Attorney Kathryn DeMarco of the National Security Division’s Counterintelligence and Export Control Section.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
CEO of Iranian Engineering Company Arrested for Allegedly Shipping Sophisticated Electronics to Iran in Violation of U.S. SanctionsRead the Press Release
LOS ANGELES – An Iranian national and United States lawful permanent resident has been arrested on a four-count federal indictment charging him with unlawfully exporting electronics used in railway signaling and telecommunications systems from the United States to Iran, in violation of the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions and Sanctions Regulations (ITSR).
Bahram Mohammad Ostovari, 66, a resident of Tehran, Iran, and Santa Monica, was arrested Thursday afternoon upon his arrival at Los Angeles International Airport.
Ostovari is charged with one count of conspiracy to violate the International Emergency Economic Powers Act and three counts of violating the IEEPA.
He pleaded not guilty to the charges at his arraignment today in United States District Court in downtown Los Angeles. A federal magistrate judge ordered him released on $1.3 million bond and scheduled a September 2 trial date.
According to the indictment unsealed today, Ostovari is the founder and CEO of a Tehran-based engineering company – identified in the indictment as “Company A” – that supplied signaling and communications systems to Iran and its government, including on projects for the Islamic Republic of Iran Railways. From at least May 2018 to July 2025, Ostovari and his co-conspirators obtained and shipped sophisticated computer processors, railway signaling equipment, and other electronics and electronic components to Company A in Iran. Many of these items were controlled under federal regulations, and their export to Iran without a license was prohibited.
To perpetrate his illegal export scheme, Ostovari used two front companies he controlled in the UAE – MH-SYS FZCO and Match Systech FZE – as conduits. Ostovari directed co-conspirators at these front companies to acquire the electronics and electronic components for Company A. Ostovari and his co-conspirators intentionally concealed from electronics suppliers in the United States and elsewhere that the goods were destined for Iran, falsely stating that MH-SYS and Match Systech in the UAE were the end users when in fact the true end user was Company A in Iran. Ostovari then directed his co-conspirators to arrange to ship the goods from the UAE to Company A in Iran.
After he became a lawful permanent resident of the United States in May 2020, Ostovari continued to export, sell, and supply electronics and electrical components to Company A in Iran.
Ostovari knew of the U.S. sanctions against Iran, mentioning them in emails to co-conspirators and directing one co-conspirator to provide false information to a federal export control officer regarding the end use of U.S.-origin goods they had shipped to Company A in Iran.
The IEEPA and the ITSR impose controls and restrictions on transactions involving Iran based on the threats posed by Iran to the national security of the United States including, among others, its pursuit of nuclear weapons and sponsorship of terrorism. The IEEPA and ITSR, among other things, prohibit the export, re-export, sale, or supply, directly or indirectly, from the United States or by a United States person, wherever located, of any goods, technology, or services to Iran or the Government of Iran without first obtaining authorization from the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC).
At no time did Ostovari, his companies, or his co-conspirators apply for or obtain authorization from OFAC to export, sell or supply goods and technologies from the United States to Iran.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
If convicted, Ostovari would face a statutory maximum sentence of 20 years in federal prison for each count.
Homeland Security Investigations, the United States Department of Commerce’s Bureau of Industry and Security Office of Export Enforcement, and IRS Criminal Investigation are investigating this matter.
Assistant United States Attorneys David C. Lachman and Colin S. Scott of the Terrorism and Export Crimes Section are prosecuting this case. Trial Attorney Kathryn DeMarco of the Justice Department National Security Division’s Counterintelligence and Export Control Section provided valuable assistance.
Nigerian Man Sentenced to More Than 11 Years in Prison for Fraudulently Obtaining $1.3 Million in COVID-19 Jobless and Disability BenefitsRead the Press Release
LOS ANGELES – A Nigerian man living in the San Gabriel Valley was sentenced today to 135 months in federal prison for defrauding California and Nevada out of $1.3 million in COVID-19 pandemic unemployment and disability insurance benefits by submitting more than 100 fraudulent applications using stolen identities and using the money to build a nightclub and mall in Nigeria.
Abiola Femi Quadri, 43, of Pasadena, was sentenced by United States District Judge George H. Wu, who also ordered him to pay $1,356,229 in restitution and a $35,000 fine.
Quadri is a Nigerian citizen who acquired permanent residency in the United States through what he described – according to court documents – as a “fake wedding” in messages to a woman who was not his wife, pleaded guilty on January 2 to one count of conspiracy to commit bank fraud.
Quadri withdrew the fraudulent unemployment and disability benefits at ATMs from 2021 until his arrest in September 2024 at Los Angeles International Airport, where he was scheduled to fly to Nigeria. Quadri sent at least $500,000 abroad during the scheme. He also paid for the construction of a 120-room resort hotel in Nigeria, the Oyins International, that includes a nightclub, a mall, and additional high-end amenities. Quadri failed to disclose his ownership of the hotel as required when completing his financial disclosure to the court.
Investigators found on Quadri’s phone images of 17 counterfeit checks totaling more than $3.3 million, along with messages about negotiating the checks. Some of the checks were made payable to shell businesses held in the names of Quadri’s aliases.
California paid Quadri to provide daycare services to developmentally disabled children through his Altadena-based business, Rock of Peace. When agents searched Quadri’s residence, they found the children’s misappropriated food-aid debit cards.
The United States Postal Inspection Service, Homeland Security Investigations, and the California Employment Development Department Investigation Division investigated this matter.
Assistant United States Attorney Andrew Brown of the Major Frauds Section prosecuted this case.
Los Angeles County Sheriff’s Deputy Pleads Guilty to Heroin Possession, Admits to Attempting to Smuggle Drug into JailRead the Press Release
LOS ANGELES – A Los Angeles County Sheriff’s Department (LASD) deputy pleaded guilty today to possessing more than one pound of heroin that he admitted to attempting to smuggle inside a county jail in the Santa Clarita Valley last year.
Michael Meiser, 40, of Lancaster, pleaded guilty to one count of possession with intent to distribute heroin.
According to his plea agreement, in April 2024, Meiser was working as an LASD deputy at the North County Correctional Facility in Castaic. He had agreed with inmates to smuggle narcotics into the jail in exchange for cash and payments via the Cash App digital wallet that inmates would arrange for Meiser and one of his relatives to receive.
As part of that arrangement, on April 24, 2024, one of Meiser’s relatives received $1,500 via Cash App from an individual connected to an inmate and later informed Meiser about it.
Six days later, Meiser drove his BMW to a Chevron gasoline station in Valencia, parked it next to a Chevrolet SUV, exited his car and opened its trunk. Inside the Chevrolet were two women, one of whom was associated with a jail inmate.
Meiser walked to the Chevrolet’s driver side where one of the two women handed him a plastic grocery bag containing two Pringles cans loaded with approximately 511 grams (1.1 pounds) of heroin. The bag also contained two white envelopes that contained a total of $15,000 in cash, which represented Meiser’s payment from the inmates for smuggling heroin into the jail.
Later that day, Meiser took the grocery bag and put it into his green backpack, which also contained his loaded handgun, before driving to a fellow LASD deputy’s apartment complex. Once there, Meiser – with his green backpack in tow – got into that deputy’s truck and headed to the jail in Castaic. The other deputy drove his truck into the jail with Meiser in the passenger seat and parked the vehicle in the jail’s parking lot, which was past the jail’s initial security checkpoint.
Meiser then exited the deputy’s truck and took the green backpack – containing the heroin and the cash – and placed it inside the trunk of an LASD radio car. Eventually, Meiser placed the two heroin-containing Pringles canisters, which were hidden in a grocery bag, under computer towers inside the radio car’s trunk. By this time, he had removed the $15,000 in cash from the grocery bag and placed it in his green backpack. Meiser then closed the trunk, carried the green backpack to the other deputy’s truck, placed it inside that vehicle, and went to the jail’s gym with the other deputy. Later that day, Meiser met with an inmate participating in the smuggling scheme and spoke to him for several minutes.
At the end of that day, Meiser got in the passenger seat of the other deputy’s truck. LASD investigators stopped them as the other deputy began driving the truck outside the jail.
LASD investigators arrested Meiser and searched the other deputy’s truck, where they found the green backpack containing $15,000 in cash, Meiser’s loaded handgun, and his badge and LASD identification.
Investigators also search the radio car’s trunk and found the two heroin-containing Pringles canisters.
United States District Judge Fernando M. Olguin scheduled a December 11 sentencing hearing, at which time Meiser will face a mandatory minimum sentence of five years in federal prison and a statutory maximum sentence of 40 years in federal prison.
The FBI investigated this matter with assistance the from LASD’s Internal Criminal Investigations Bureau.
Assistant United States Attorney Thomas F. Rybarczyk of the Public Corruption and Civil Rights Section is prosecuting this case.
Former Banker Arrested for Allegedly Obtaining $2.7 Million in COVID Business-Relief Funds Using Stolen IDs of Disabled PersonsRead the Press Release
LOS ANGELES – A former Wells Fargo & Co. banker and his brother have been arrested on an eight-count federal grand jury indictment alleging they schemed to fraudulently obtain more than $2.7 million in taxpayer-funded COVID-19 relief funds and federally-guaranteed small business loans, including by submitting applications using the stolen identities of developmentally disabled persons who lived in long-term care facilities, the Justice Department announced today.
Norayr Madadi, 40, of Burbank, and Vazrik Madadi, 44, of Glendale, were arrested Wednesday morning.
Both men are charged with one count of conspiracy to commit wire fraud, two counts of wire fraud, and three counts of money laundering. Norayr Madadi is separately charged with one count of aggravated identity theft and one count of making a false statement to a government agent.
They pleaded not guilty at their arraignment Wednesday afternoon in United States District Court in Los Angeles. A federal magistrate judge ordered Norayr Madadi released on $25,000 bond, ordered Vazrik Madadi released on $50,000 bond, and scheduled a September 2 trial date.
According to the indictment returned on June 17 and unsealed Wednesday, Norayr Madadi was a banker at Wells Fargo and opened fraudulent accounts in the names of shell companies and persons including using stolen and fictious identities.
From March 2020 through April 2021, the defendants obtained millions in Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDL) loans by submitting loan applications with false statements about revenues, operations, and employees. The defendants used fake and stolen identities to further the fraudulent scheme, including the stolen identities of two victims who are developmentally disabled and live in long-term care facilities.
The Small Business Administration (SBA) and PPP participating lenders disbursed the loans into bank accounts controlled by the defendants, including the Wells Fargo bank accounts opened by Norayr Madadi. The Madadi brothers allegedly spent the loan proceeds at casinos, paying for luxury cars and jewelry, and cash withdrawals.
Law enforcement believes the losses caused by this scheme are approximately $2.7 million.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
If convicted, each defendant would face a statutory maximum sentence of 20 in federal prison for each wire fraud-related count and up to 10 years in federal prison for each money laundering count. Norayr Madadi would face up to five years in federal prison if convicted of the false statements count and would face a mandatory two-year consecutive prison term if convicted of the aggravated identity theft count.
The FBI is investigating this matter.
Assistant United States Attorney Jason Pang of the General Crimes Section is prosecuting this case, with substantial assistance from Assistant United States Attorney Ryan Waters of the Asset Forfeiture and Recovery Section.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at (866) 720-5721 or via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
U.S. Department of Justice Sues California for Violations of Title IX and for Denying Athletic Opportunities to GirlsRead the Press Release
SANTA ANA, California – The Justice Department’s Civil Rights Division today filed a lawsuit to enforce Title IX and protect California female student athletes from unfair competition and reckless endangerment by male participation on female high-school sports teams.
According to the complaint filed in United States District Court in Santa Ana, the California Department of Education (CDE) and the California Interscholastic Federation (CIF) have engaged in illegal sex discrimination against female student athletes by allowing males to compete against them, depriving these girls of the equal education and athletic opportunities afforded to them by federal civil rights law. Thus, the suit seeks declaratory, injunctive, and damages relief for violations of Title IX, which prohibits sex-based discrimination in any education program or activity that receives federal funding.
As alleged in the complaint, the U.S. Department of Education’s “current allocation of funds to CDE for fiscal year 2025 totals approximately $44.3 billion, of which approximately $3.8 billion remains available for drawdown by CDE, including both discretionary grants and formula grants.”
“The Governor of California has previously admitted that it is ‘deeply unfair’ to force women and girls to compete with men and boys in competitive sports,” said Attorney General Pamela Bondi. “But not only is it ‘deeply unfair,’ it is also illegal under federal law. This Department of Justice will continue its fight to protect equal opportunities for women and girls in sports.”
“California is on the wrong side of the law and the wrong side of history,” said United States Attorney Bill Essayli of the Central District of California. “Women deserve dignity, respect, and an equal opportunity to compete on their own sports teams. The time for talk is over. California must comply with Title IX and end its civil rights violations against women. No person, no state, is above the law.”
“Title IX was enacted over half a century ago to protect women and girls from discrimination. The Justice Department will not stand for policies that deprive girls of their hard-earned athletic trophies and ignore their safety on the field and in private spaces,” said Assistant Attorney General Harmeet K. Dhillon. “Young women should not have to sacrifice their rights to compete for scholarships, opportunities, and awards on the altar of woke gender ideology.”
CDE has authority over CIF and local school districts’ interscholastic athletic policies, and CIF oversees 1.8 million students and more than 750,000 student-athletes in grades 9 through 12.
The complaint is available here.
Assistant United States Attorney Richard M. Park of the Civil Division’s Civil Rights Section, Senior Counsel Robert J. Keenan and Trial Attorneys Matthew J. Donnelly and Aaron I. Henricks of the Justice Department’s Civil Rights Division are handling this case.
Two California Residents Plead Guilty in Connection with $16M Hospice Fraud Scheme and Money Laundering SchemeRead the Press Release
Two California residents pleaded guilty yesterday in connection with their roles in defrauding Medicare of nearly $16 million through sham hospice companies and to laundering the proceeds of the fraud as part of a multi-year scheme.
According to court documents, Karpis Srapyan, 35, of Winnetka, California, conspired with others, including co-defendants Petros Fichidzhyan and Juan Carlos Esparza, to bill Medicare for hospice services that were not medically necessary and never provided. To conduct their fraudulent scheme, they used a series of four sham hospice companies: one owned by Esparza and the other three owned by foreign nationals but controlled by the defendants. Srapyan and his co-defendants concealed the scheme by using foreign nationals’ personal identifying information to open bank accounts, submit information to Medicare, and sign property leases. They also misappropriated names and other identifying information of several doctors, two of whom were deceased, to fraudulently bill Medicare for purported hospice services. In total, Medicare paid the fake hospice companies nearly $16 million.
Fichidzhyan, Esparza, and Srapyan worked with others to launder the fraudulent proceeds from their hospice scheme. Susanna Harutyunyan, 39, of Winnetka, was aware that her husband and co-defendant Mihran Panosyan was involved in illegal activity with Srapyan and Fichidzhyan. As part of the money laundering scheme, Harutyunyan and her co-defendants maintained fraudulent identification documents, bank documents, checkbooks, and credit and debit cards in the names of purported foreign owners in the residence where she and Panosyan lived and another residence that was owned in her name. Srapyan conducted dozens of financial transactions, totaling approximately $3.2 million, moving funds between accounts in the names of the sham hospice companies, accounts in the names of foreign nationals that were controlled by the defendants, and other accounts involved in the money laundering scheme. Harutyunyan knowingly spent fraudulent proceeds on personal expenses, including payments for a BMW automobile.
Srapyan pleaded guilty to conspiracy to commit health care fraud and money laundering and is scheduled to be sentenced on Oct. 6. He faces a maximum penalty of 20 years in prison. Harutyunyan pleaded guilty to money laundering and is scheduled to be sentenced on Nov. 17; she faces a maximum penalty of 10 years in prison. A federal district court judge will determine their sentences after considering the U.S. Sentencing Guidelines and other statutory factors. Harutyunyan faces deportation.
Co-defendant Petros Fichidzhyan previously pleaded guilty to health care fraud, aggravated identity theft, and money laundering. In May, Fichidzhyan was sentenced to 12 years in prison. Co-defendant Mihran Panosyan pleaded guilty to money laundering in June and is scheduled to be sentenced Sept. 8. Co-defendant Juan Carlos Esparza’s change of plea hearing is scheduled for July 14.
The guilty pleas today are the most recent convictions in the Justice Department’s ongoing effort to combat hospice fraud in the greater Los Angeles area. Last year, a doctor was convicted at trial for his role in a scheme to bill Medicare for hospice services patients did not need, and two other defendants were sentenced for their roles in a hospice fraud scheme.
Matthew R. Galeotti, Head of the Justice Department’s Criminal Division, Assistant Director in Charge Akil Davis of the FBI Los Angeles Field Office, and Deputy Inspector General for Investigations Christian J. Schrank of the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG) made the announcement.
The FBI and HHS-OIG are investigating the case.
Trial Attorneys Michael Bacharach, Sarah E. Edwards, and Allison L. McGuire of the Criminal Division’s Fraud Section are prosecuting the case, and Assistant U.S. Attorney Tara B. Vavere for the Central District of California is handling asset forfeiture.
The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, currently comprised of 9 strike forces operating in 27 federal districts, has charged more than 5,800 defendants who collectively have billed federal health care programs and private insurers more than $30 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.
Former Northridge Insurance Agent Sentenced to More Than 4 Years in Prison for $3.7 Million Fine Art Insurance Policy ScamRead the Press Release
LOS ANGELES – A Nevada woman was sentenced today to 50 months in federal prison for defrauding a lender out of $3.7 million by submitting bogus applications for fine art insurance policies for commercial clients, but instead using the money for herself.
Tonja Van Roy, 59, of Las Vegas, but who formerly operated a Northridge-based insurance agency, was sentenced today by United States District Judge Stephen V. Wilson, who also ordered her to pay $1,880,237 in restitution.
Van Roy pleaded guilty on January 6 to one count of wire fraud.
According to court documents, Van Roy owned and ran Pegasus Insurance, a Northridge company that specialized in insurance policies covering art collections. From January 2021 to December 2023, Van Roy created and submitted dozens of fraudulent finance agreements to AFCO Credit Corp., a Lake Forest, Illinois-based provider of insurance premium finance, purportedly to finance insurance policies she claimed to have sold to art galleries.
Van Roy made up the insurance policy numbers she used and forged the electronic signatures for fictitious insureds. She used the borrowed money to fund her lifestyle, which included payments on dozens of credit cards. When the loans from AFCO came due, Van Roy submitted additional fraudulent finance agreements to AFCO, and used the proceeds from the new loans to make it appear as though the old loans had been repaid.
“[Van Roy] embarked on a sophisticated, multiyear scheme to borrow fraudulently over $3.7 million dollars using her insider’s knowledge of the insurance industry,” prosecutors argued in a sentencing memorandum. “[She] has more than 25 years of experience working as an insurance agent, during which time she sold countless insurance policies and worked for many different insurance agencies before founding her own; she had an expert’s understanding of the industry, which allowed her to manipulate her victims and avoid detection for years.”
Homeland Security Investigations and the California Department of Insurance investigated this matter.
Assistant United States Attorney Andrew Brown of the Major Frauds Section prosecuted this case.
Inglewood Woman Arrested on Federal Indictment Alleging Scheme to Fraudulently Obtain $1.3 Million in COVID-19 Jobless BenefitsRead the Press Release
LOS ANGELES – An Inglewood woman has been arrested on a 14-count federal grand jury indictment alleging she fraudulently obtained more than $1.3 million in COVID-19 pandemic relief funds by submitting more than 100 fraudulent applications for unemployment insurance (UI) benefits using stolen identities, including those of California state prisoners, the Justice Department announced today.
Selena Stewart, 45, was arrested and arraigned on Wednesday.
At her arraignment, she pleaded not guilty to 10 counts of mail fraud, one count of use of unauthorized access devices, two counts of aggravated identity theft, and one count possession of at least 15 unauthorized access devices. An August 26 trial date is scheduled for this case.
A federal magistrate judge ordered Stewart released on $10,000 bond.
According to the indictment, from March 2020 to December 2020, Stewart and co-defendants Toby Brazier, 48, of the Westlake area of Los Angeles, and Tony Queen, 67, of Culver City, filed with the California Employment Development Department (EDD) fraudulent applications for UI benefits in the names of other people. EDD administers California’s unemployment benefits program. The applications were filed using the personal identifying information (PII) obtained from individuals whose information was used without their permission, as well as individuals who did not qualify for UI benefits because they were in the custody of California state prisons.
The fraudulent applications falsely stated that the purported applicants had been negatively affected by the COVID-19 pandemic, which triggered eligibility for UI benefits under federal law. The applications also falsely stated that the named claimants resided and had worked in California. In fact, most identity theft victims in this scheme did not live in California. The applications also provided false mailing addresses, false annual income information, and representations that the named claimants were self-employed individuals who were adversely impacted by COVID-19.
As a result of the bogus UI applications that Stewart, Queen, and Brazier filed, EDD authorized Bank of America to issue debit cards in the names of dozens of victims and straw claimants. Once in possession of the debit cards, the defendants withdrew the UI benefits loaded onto the debit cards by making cash withdrawals at ATMs and bank branches and by using the debit cards to buy items sold at businesses.
In total, Stewart, Brazier and Queen, caused at least 101 fraudulent applications for UI benefits to be filed, causing losses to EDD and the United States Treasury exceeding $1.3 million.
Brazier and Queen are charged with 10 counts of mail fraud. Queen is expected to appear next week in U.S. District Court in Los Angeles for his arraignment and initial appearance. Brazier is considered a fugitive.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
If convicted, Stewart would face a statutory maximum sentence of 20 years in federal prison for each mail fraud count, up to 10 years in federal prison for the unauthorized access device count, a mandatory two-year consecutive prison sentence for each aggravated identity theft count and 10 years in federal prison for the possession of least 15 unauthorized access device count.
The United States Department of Labor Office of Inspector General; the U.S. Department of Homeland Security Office of Inspector General; and the California Employment Development Department Investigation Division are investigating this matter.
Assistant United States Attorneys Clifford Mpare of the Domestic Security and Immigration Crimes Section and Christina Lopez of the General Crimes Section are prosecuting this case.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at (866) 720-5721 or via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Former FBI Procurement Official Agrees to Plead Guilty to Bid-Rigging Scheme to Obtain Electronics ContractsRead the Press Release
LOS ANGELES – A former electronics technician at the FBI’s Los Angeles Field Office and his sister were charged today with conspiring to defraud the United States to obtain at least $350,000 in low-bid electronics equipment contracts from the FBI.
Jeffrey Spencer, 51, of Canyon Country, and Christy Evereklian, 43, of Temecula, were charged via a single-count information filed today with conspiracy to defraud the United States. In plea agreements also filed today, Spencer and Evereklian both agreed to plead guilty to the felony offense, which carries a statutory maximum sentence of five years in federal prison.
Spencer and Evereklian are expected to enter their guilty pleas in the coming weeks in United States District Court in downtown Los Angeles.
According to their plea agreements, from August 2015 through August 2020, Spencer and Evereklian conspired to defraud the United States by impeding the solicitation of competitive bids for electronic equipment by deceitful and dishonest means. Spencer, who was an FBI procurement official and solicited bids for electronic equipment, conspired with Evereklian to submit purportedly independent and competitive bids from Evereklian’s several companies for FBI contracts.
In fact, Spencer and Evereklian already had decided which company would submit the lowest – and presumably winning – bid for a contract. Evereklian submitted bids from her own companies to the FBI using the names of her relatives to conceal her control over bidding companies, and she used a random number generator to create the fraudulent bids.
Evereklian further admitted in her plea agreement that during the conspiracy, her companies won at least $350,000 in contracts from the FBI.
The United States Department of Justice Office of Inspector General conducted the investigation in this matter as part of the Procurement Collusion Strike Force (PCSF).
Assistant United States Attorney Jason Pang of the General Crimes Section is prosecuting this case.
Orange County Man Charged in Federal Complaint Alleging He Helped $270 Million Medi-Cal Scam Involving Medication ReimbursementRead the Press Release
LOS ANGELES – An Orange County man has been charged via federal criminal complaint with submitting over an 11-month span nearly $270 million in fraudulent claims to Medi-Cal for expensive prescription drugs containing generic ingredients that were not medically necessary and, in many instances, not provided to the purported recipients, the Justice Department announced today.
Paul Richard Randall, 66, of Orange, is charged with health care fraud, a felony that carries a statutory maximum penalty of 10 years in federal prison.
Randall made his initial appearance in United States District Court in Los Angeles on Friday and was ordered jailed without bond. His arraignment is scheduled for July 17.
Today’s announcement was made as part of the Justice Department’s 2025 National Health Care Fraud Takedown, which resulted in criminal charges against 324 defendants, including 96 doctors, nurse practitioners, pharmacists, and other licensed medical professionals, in 50 federal districts and 12 State Attorneys General’s Offices across the United States, for their alleged participation in various health care fraud schemes involving over $14.6 billion in intended loss. The Takedown involved federal and state law enforcement agencies across the country and represents an unprecedented effort to combat health care fraud schemes that exploit patients and taxpayers.
Demonstrating the significant return on investment that results from health care fraud enforcement efforts, the government seized more than $245 million in cash, luxury vehicles, cryptocurrency, and other assets as part of the coordinated enforcement efforts. As part of the whole-of-government approach to combating health care fraud announced today, the Centers for Medicare and Medicaid Services (CMS) also announced that it successfully prevented more than $4 billion from being paid in response to false and fraudulent claims and that it suspended or revoked the billing privileges of 205 providers in the months leading up to the Takedown. Civil charges against 20 defendants for $14.2 million in alleged fraud, as well as civil settlements with 106 defendants totaling $34.3 million, were also announced as part of the Takedown.
“This record-setting Health Care Fraud Takedown delivers justice to criminal actors who prey upon our most vulnerable citizens and steal from hardworking American taxpayers,” said Attorney General Pamela Bondi. “Make no mistake – this administration will not tolerate criminals who line their pockets with taxpayer dollars while endangering the health and safety of our communities.”
“Public health programs are designed to help the sick and needy, not to help unscrupulous individuals pad their pockets,” said United States Attorney Bill Essayli. “Working with our federal and state law enforcement partners, we will continue to crack down on those who cheat taxpayers via health care fraud.”
According to an affidavit filed with the complaint, Randall, Kyrollos Mekail, 37, of Moreno Valley, and Patricia Anderson, 57, of West Hills, took advantage of Medi-Cal’s suspension of its requirement that health care providers obtain prior authorization before providing certain health care services or medications as a condition of reimbursement. The suspension of the prior authorization requirements was part of an ongoing transition of Medi-Cal’s prescription drug program to a new payment system.
Through a business called Monte Vista Pharmacy, Randall and his co-schemers exploited Medi-Cal’s prior authorization suspension by billing Medi-Cal tens of millions of dollars per month for dispensing high-reimbursement, non-contracted, generic drugs through Monte Vista Pharmacy. Some prescription medications purportedly were to treat pain and included Folite tablets, a vitamin available over the counter.
Normally, these high-cost reimbursement medications would have required prior authorization under Medi-Cal’s old payment system. Medication involved in this scheme was medically unnecessary, frequently was not dispensed to patients, and procured by kickbacks.
From May 2022 to April 2023, Monte Vista billed Medi-Cal more than $269 million and was paid more than $178 million for 19 expensive, non-contracted drugs containing low-cost, generic ingredients that were not medically necessary, not provided, or both.
Randall and others then laundered their illicit proceeds by transferring the proceeds of the Medi-Cal fraud scheme to a third party to pay kickbacks to Anderson, to promote the fraud scheme and to conceal and disguise the transfers from detection by law enforcement.
A criminal complaint contains allegations. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Relatedly, Anderson was charged in a two-count information charging her with health care fraud for her role in the scheme which was unsealed last week. Mekail pleaded guilty to criminal charges in August 2024 and awaits sentencing.
The United States Department of Health and Human Services Office of Inspector General (HHS-OIG), the FBI, and the California Department of Justice are investigating this matter.
Assistant United States Attorney Roger A. Hsieh of the Major Frauds Section and Assistant Chief Niall M. O’Donnell and Trial Attorney Siobhan M. Namazi of the U.S. Department of Justice, Criminal Division, Fraud Section are prosecuting this case. Assistant United States Attorney James E. Dochterman of the Asset Forfeiture and Recovery Section is handling asset forfeiture matters in this case.
Corona Man Sentenced to One Year and One Day in Federal Prison for $1.2 Million Tax Fraud Involving the Sale of Stan Lee MemorabiliaRead the Press Release
RIVERSIDE, California – A Riverside County man was sentenced today to 12 months and one day in federal prison for filing false income tax returns after selling Stan Lee-signed memorabilia and receiving more than $1.2 million in proceeds which he never reported to the IRS.
Mac Martin Anderson, 59, of Corona, was sentenced by United States District Judge Kenly Kiya Kato, who also ordered him to pay $482,833 in restitution.
Anderson pleaded guilty on March 11 to two counts of willfully subscribing to a false tax return.
From 2015 to 2018, Anderson had a personal relationship with Marvel Comics publisher Stan Lee and sold Marvel-related items bearing Lee’s autograph to various dealers, brokers and fans at comic conventions.
In exchange for selling these memorabilia, Anderson received payments from buyers, typically in the form of cash or checks. These payments were considered regular income by the IRS and should have been reported on Anderson’s income tax return each year that he received money.
For tax years 2015 through 2018, Anderson received reportable income from memorabilia sales of at least approximately $1,236,485 for the tax years 2015 through 2018, Anderson admitted that the tax due and owing on such income was approximately $482,833.
IRS Criminal Investigation investigated this matter.
Assistant United States Attorneys Mark Aveis of the Major Frauds Section and Sarah E. Spielberger of the Asset Forfeiture and Recovery Section prosecuted this case.