Central District of California
Press releases recorded for this federal judicial district.
Compton Man Sentenced to More Than Ten Years in Prison for Illegal Firearm and Methamphetamine SalesRead the Press Release
LOS ANGELES – A Compton man has been sentenced to more than ten years in federal prison for illegal methamphetamine and firearms sales.
Luis Rodriguez Jr., 29, was sentenced on Monday to 121 months in federal prison by United States District Judge R. Gary Klausner. Rodriguez pled guilty earlier this year to distribution of methamphetamine and illegal firearm sales without a license.
Rodriguez pled guilty to selling methamphetamine and three firearms to a Bureau of Alcohol, Tobacco, Firearms and Explosives confidential informant on multiple occasions. The firearms included a Smith & Wesson, Model 66 .357 caliber Magnum revolver, a Ceska Zbrojovka (CZ) Model CZ 52 7.62mm caliber Tokarev rifle, a Ruger Model 22/45 MK III .22 caliber pistol, which had been reported stolen in Texas, and a Colt Model 1911 U.S. Army .45 caliber pistol.
Rodriguez obtained the firearms from his sister and co-defendant, Laura Salas, who was sentenced on April 25, 2016 to 120 months’ imprisonment for her participation in the crimes. The government stated in its sentencing position that, for one of the firearms transaction, a young boy who appeared to be Salas’s son handled the firearm.
“The actions of this defendant were intended to place dangerous drugs and guns on the streets,” said United States Attorney Eileen M. Decker. “Having illegal drugs and guns readily available contributes to violence in our community. This case is an example of my office’s commitment to curbing violent crime by eliminating its sources.”
Rodriguez was one of eight defendants charged last year with various counts of distributing methamphetamine, distributing methamphetamine in a premises with children, selling firearms without a license, being a felon in possession of firearms and ammunition, and possessing an unregistered firearm.
“This investigation served the most vulnerable victims of firearm and drug crimes,” said ATF Special Agent in Charge Eric D. Harden. “The challenge of reducing gun violence in our communities today and for future generations is much greater when the underground market is a family business.”
The investigation into Rodriguez was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
This case is being prosecuted by Assistant United States Attorneys Aron Ketchel of the Violent and Organized Crime Section and Eddie Jauregui of the General Crimes Section.
Two Leaders of El Monte Street Gang Receive 15-Year Prison Terms for Federal Racketeering, Narcotics and Money Laundering OffensesRead the Press Release
LOS ANGELES – A Mexican Mafia member who was the primary “shotcaller” of the El Monte Flores street gang, and another man who was a key leader of the gang, have each received 15-year prison terms after pleading guilty to federal racketeering offenses. A third man who was a member of the gang has received a sentence of nearly 11 years in prison.
The three gang members were sentenced yesterday as part of a 2014 racketeering case that targeted the El Monte Flores gang, an organization that takes direction from the Mexican Mafia prison gang and controls criminal activity in the cities of El Monte and South El Monte.
James “Chemo” Gutierrez, 53, of El Monte, who is the Mexican Mafia member and the lead defendant in the indictment, and Kenneth Cofer, 37, also of El Monte, were sentenced to 180 months in prison by United States District Judge John A. Kronstadt.
Gutierrez and Coffer pleaded guilty in April to conspiring to violate the federal Racketeer Influenced and Corrupt Organizations (RICO) Act. They also each pleaded guilty to conspiring to distribute controlled substances, including methamphetamine and heroin, and conspiring to launder money. Additionally, Cofer pleaded guilty to possession of a firearm in furtherance of a drug trafficking crime.
The third gang member sentenced yesterday – John Rivera, 54, of El Monte – pleaded guilty in December 2015 to conspiring to violate the RICO Act and conspiring to distribute narcotics Judge Kronstadt ordered Rivera to serve 130 months in prison.
The RICO indictment alleged that members of the El Monte Flores gang committed crimes that included acts of violence (ranging from battery to murder), drug trafficking, robbery, burglary, carjacking, witness intimidation, kidnapping, weapons trafficking, credit card fraud, identity theft and money laundering.
“We now have secured lengthy prison terms for key members of one of the oldest street gangs in Los Angeles County after using the federal racketeering statute to dismantle the organization’s leadership structure,” said United States Attorney Eileen M. Decker. “Even with significant gains made by law enforcement, street gangs remain one of the most dangerous criminal elements in the region and a significant contributor to violent crime. We are committed, however, to restoring order in neighborhoods affected by the violence and drug trafficking perpetrated by street gangs like the El Monte Flores gang.”
In a plea agreement filed with the court, Gutierrez admitted that he “regularly received extortionate ‘tax’ payments from individuals trafficking narcotics in the neighborhoods controlled by the El Monte Flores gang.” Gutierrez “knew that the narcotics traffickers would be subject to violent attacks if they failed to pay the extortionate taxes to the El Monte Flores gang.” Gutierrez acknowledged in his plea agreement that he authorized an attack on a rival gang member.
Prosecutors said in a sentencing memorandum that Gutierrez deserved a lengthy prison term due to his “pivotal role in the gang’s drug distribution, extortion, and violent activity.” The court filing notes that Gutierrez has a long criminal record, including a racketeering-related murder that resulted in a 20-year federal prison term.
Cofer admitted in his plea agreement that he “managed and supervised the extortion and drug trafficking activities…[and] directed the use of violence on behalf” of the criminal enterprise. Cofer specifically admitted that he authorized the shooting of a person who had a dispute with another member of the gang.
Gutierrez and Cofer admitted their roles in threats to use violence to extort “taxes” from drug dealers and fraudulent document vendors at “Crawford’s Plaza,” a shopping center at Valley Boulevard and Garvey Avenue.
When Rivera pleaded guilty, he admitted collecting “taxes” from gang members and transferring that money to Gutierrez. He also acknowledged distributing large quantities of methamphetamine. “[D]espite spending the majority of the last 31 years in custody, [Rivera] has not learned his lesson and continues to commit new crimes,” prosecutors wrote in a court filing.
In addition to Gutierrez, Cofer and Rivera, 31 other defendants named in the RICO indictment have pleaded guilty.
The investigation into the El Monte Flores gang was conducted by a task force that included the Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms and Explosives; IRS Criminal Investigation; and the El Monte Police Department.
This case is being prosecuted by Assistant United States Attorneys Jeff Mitchell and Aron Ketchel of the Violent and Organized Crime Section.
Moreno Valley Woman Indicted by Federal Grand Jury on Charges Alleging She Helped Her Husband Flee to MexicoRead the Press Release
Update:
RIVERSIDE, California – A federal grand jury has indicted a Moreno Valley woman on charges related to assistance she provided to her husband, who fled to Mexico while pending sentencing in a federal immigration case.
Elba Soto, 36, was named in a two-count indictment returned by a grand jury on Wednesday. The indictment charges Soto with being an accessory after the fact and with making false statements to the United States Marshals Service.
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.
Soto is scheduled to be arraigned on the indictment in United States District Court on October 19. Until that time, Soto will remain in custody without bond.
If she is convicted of both counts in the indictment, Soto will face a statutory maximum sentence of 15 years in federal prison.
Original Release:
Inland Empire Woman Arrested on Federal Charges of Helping Her Husband Flee United States While He Was Pending Sentencing
RIVERSIDE, California – A Moreno Valley woman was arrested this morning (September 14) on federal charges after she allegedly helped her husband flee the United States after he had pleaded guilty in a federal criminal case.
Elba Soto, 36, was arrested without incident this morning by the U.S. Marshals Service. Soto made her initial appearance this afternoon in United States District Court in Riverside, where she was ordered detained (held without bond). An arraignment in the case was scheduled for October 19.
Soto was arrested pursuant to a criminal complaint that charges her with being an accessory after the fact for allegedly driving her husband to Mexico so he could avoid being sentenced after pleading guilty to illegal reentry after deportation.
Soto’s husband, Jose Guadalupe Vega-Zuniga, pleaded guilty on August 3 and remains scheduled to be sentenced on October 17. Vega-Zuniga admitted that he was in the United States without authorization after being deported to his native Mexico on four occasions between 2000 and 2008. When he pleaded guilty before United States District Judge Michael W. Fitzgerald in Los Angeles, Vega-Zuniga admitted that he previously had been convicted of drug trafficking and assault with a deadly weapon in state court, as well as being found guilty in 2000 of a felony offense of illegally being in the United States. At the time of his guilty plea, Vega-Zuniga was free on a $100,000 unsecured bond and was subject to electronic location monitoring.
According to the criminal complaint filed against Soto, Vega-Zuniga removed his location monitoring bracelet about four days after pleading guilty. On August 8, a person resembling Soto went to the court’s Pretrial Services Office and returned the electronic monitoring bracelet, explaining that Vega-Zuniga had removed the device and she did not know his whereabouts.
An investigation by the U.S. Marshals Service revealed that Soto’s vehicle entered Mexico through the Otay Mesa port of entry on August 18. Photographs taken during the crossing show Soto in the driver’s seat of the vehicle, with Vega-Zuniga in the passenger seat.
“The evidence in this case indicates the defendant knowingly transported her husband to Mexico while he was pending sentencing in the latest of his criminal cases,” said United States Attorney Eileen M. Decker. “If these allegations are proven, the defendant knowingly assisted a convicted felon avoid justice. As a result, the defendant now faces her own criminal case and a significant prison term.”
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
If she is found guilty of being an accessory after the fact by helping Vega-Zuniga flee the United States, Soto would face half of the maximum prison sentence that Vega-Zuniga faces as a result of his guilty plea. Vega-Zuniga faces a statutory maximum sentence of 20 years in prison, so therefore Soto would face a sentence of up to 10 years in prison.
The case against Soto is being prosecuted by Assistant United States Attorney Bilal A. Essayli of the Riverside Branch Office.
Disbarred Attorney Indicted in Mortgage Modification SchemeRead the Press Release
SANTA ANA, California – A disbarred California attorney was arrested this morning on federal charges of running a mortgage modification scheme that defrauded more than 75 distressed homeowners in Orange County by inducing them to pay more than $1.4 million for services he never provided.
Moses S. Hall, 60, a resident of Blackwood, New Jersey, who formerly had a law practice in Fullerton, was arrested without incident this morning at his residence after being indicted this week on fraud and tax offenses.
According to the 16-count indictment returned Wednesday by a federal grand jury, Hall operated his mortgage modification scheme from 2008 until 2012 through his law offices, as well as businesses called “Salva Casas” and “Loan Modifications of America.” The indictment alleges that Hall told distressed homeowners to stop making their mortgage payments, and instead direct their monthly mortgage payments to him, purportedly so he could use that money to negotiate with the banks. Instead, as detailed in the indictment, Hall used the victims’ money for himself.
The indictment alleges that Hall concealed from victims that he was using their money to pay for personal expenses and that he was a previously convicted felon who had served years in state prison in New Jersey prior to being admitted as an attorney in California.
Over the course of the fraudulent scheme, more than 75 victims were cheated out of more than $1 million, and some subsequently lost their homes. One married couple entrusted Hall with $400,000 to help them modify their mortgages. According to the indictment, Hall spent that $400,000 on personal expenses in only six months. That couple subsequently lost their home to foreclosure.
As further alleged in the indictment, Hall withdrew more than $1 million in cash from the bank accounts into which the victims’ payments had been deposited. Hall allegedly wrote checks to himself and his daughter, and used $25,000 cash to purchase a Mercedes Benz.
“This defendant allegedly used his position as a licensed attorney to persuade victims that he could help them with their financial problems,” said United States Attorney Eileen M. Decker. “Instead of working for his clients, the defendant simply pocketed their money to fund an extravagant lifestyle. He has lost his license to practice law, and now he faces a significant prison term for the alleged crimes.”
Hall is also charged with interfering with the administration of the tax laws. Hall allegedly failed to file tax returns for the years 2008 through 2012, thereby failing to report more than $1 million in income. Hall was further charged with failing to report more than $400,000 in income for 2009 by failing to file a federal tax return for that year. Moreover, the indictment alleges that when Hall was interviewed in December 2015, he lied to IRS Special Agents about his use of that money.
“As set forth in today’s indictment, Mr. Hall allegedly preyed on struggling and trusting homeowners, literally stealing the American Dream out from under them,” said Acting Special Agent in Charge Anthony J. Orlando, IRS Criminal Investigation. “IRS CI, along with our federal law enforcement partners, remains committed to investigating and prosecuting those who commit mortgage fraud and line their pockets with profits from these schemes.”
“Schemes like this have heartbreaking consequences for the victims and we need to make it clear in no uncertain terms that this kind of criminal activity will not be tolerated,” said David Prince, acting special agent in charge for HSI Los Angeles. “HSI will continue to work closely with its federal, state, and local law enforcement partners to aggressively target those who, motivated by greed, engage in activities that harm consumers and undermine the integrity of our financial system.”
According to the California State Bar, Hall was disbarred in 2012 for “misconduct in three loan modification matters.”
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.
Hall is expected to make his initial court appearance this afternoon in United States District Court for the District of New Jersey.
If convicted of the 16 charges in the Indictment – one count of mail fraud, 13 counts of wire fraud, and the two tax charges – Hall would face a statutory maximum penalty of 284 years in federal prison.
This investigation was conducted by IRS Criminal Investigation, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, and the United States Secret Service. The State Bar of California, Office of Chief Trial Counsel, provided assistance during the investigation.
Assistant United States Attorney Charles E. Pell of the Santa Ana Branch Office is prosecuting the case.
Inland Empire Man Linked to O.C. Gas Station Robberies ArrestedRead the Press Release
SANTA ANA, California – After conducting surveillance on a suspect in a series of armed robberies that targeted Orange County gas stations, federal agents and local authorities last night arrested a Fontana man on federal charges after he allegedly used what appeared to be a handgun to rob a Chevron station in Stanton.
Cyril Wallace, 49, was arrested in Stanton immediately after the robbery by special agents with the Bureau of Alcohol, Tobacco, Firearms and Explosive (ATF) and officers with the Brea Police Department.
After being held in custody overnight, Wallace was charged today in federal court with one count of interference with commerce by robbery (Hobbs Act robbery). At his initial appearance in United States District Court this afternoon, Wallace was ordered held without bond and was ordered to appear for an arraignment on October 31.
The criminal complaint charges Wallace with using an “airsoft” pistol last night to rob a Chevron gas station on Beach Boulevard in Stanton. The clerk behind the counter – who was forced to open the cash register after being threatened with a realistic-looking gun – identified Wallace as the robber minutes after he fled with approximately $111 in cash, according to the affidavit in support of the complaint.
A search warrant attached to the complaint shows that Wallace is the suspect in eight other gas station robberies that took place between August 25 and October 6 in the cities of Fullerton, La Habra, Anaheim, Placentia, Westminster and Buena Park. Authorities linked Wallace to the string of robberies after an investigator with the California Lottery identified Wallace in a “wanted” notice issued by the La Habra Police Department.
“Armed robberies victimize businesses, terrorize employees, and create fear in the community,” said United States Attorney Eileen M. Decker. “The case filed today is the result of excellent work by the ATF and local law enforcement agencies partnering to identify and apprehend a suspect believed to be responsible for a string of robberies which heightened anxiety in the community.”
“ATF prioritizes working with our state and local partners to investigate firearms and violent crimes that victimize businesses and endanger the public,” said ATF Special Agent in Charge Eric D. Harden. “Offenders cannot hide behind shifting geographic jurisdictions when agencies work in concert.”
According to documents filed in the federal case, Wallace has three prior robbery convictions, each of which led to state prison sentences.
A criminal 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 charge of interference with commerce by robbery carries a statutory maximum sentence of 20 years in federal prison.
The case against Wallace is being prosecuted by Assistant United States Attorney Scott D. Tenley.
Former Chief of Los Angeles Port Police Sentenced to Two Years in Federal Prison for False Statement and Tax Evasion Charges Related to Corruption CaseRead the Press Release
LOS ANGELES – The former Port of Los Angeles Chief of Police was sentenced today to two years in federal prison for tax evasion and for lying to FBI Agents who were investigating his acceptance of a bribe in connection with the development of an official smart phone app to be marketed to other law enforcement agencies.
Ronald Jerome Boyd, 58, of Torrance, was sentenced today by United States District Judge R. Gary Klausner, who also ordered the defendant to pay $305,054 in restitution.
Boyd pleaded guilty on February 3 to felony charges of tax evasion and making a false statement to the FBI, as well as a misdemeanor offense of failing to file a federal tax return.
Boyd pleaded guilty to the three offenses on the day he was scheduled to go to trial on a 16-count grand jury indictment. Boyd admitted to lying to federal investigators about a scheme related to a smart phone app called Portwatch, which was developed to provide information to the public and to allow citizens to report criminal activity at the port.
In 2011, Boyd and two business partners formed BDB Digital Communications, a company that entered into a revenue-sharing agreement with the company developing Portwatch. The parties involved with BDB intended to generate revenues by marketing and selling a similar app – called Metrowatch – to other government agencies. Boyd was set to receive approximately 13.33 percent of all gross revenues generated by the sale of the Metrowatch application.
“It's of paramount importance that public officials, particularly those in law enforcement, maintain the standards of honesty and trust they owe to the public,” said Lawrence Middleton, the Chief of the Criminal Division at the United States Attorney's Office. “The sentence imposed by the court in this case demonstrates that those who betray such trust shall be met with serious consequences.”
According to the indictment in this case, Boyd received his financial interest in return for guaranteeing that the Portwatch contract would be awarded to the company.
Boyd admitted that he lied to FBI Agents in October 2014 when he denied having any financial interest in Metrowatch or having engaged in a conflict of interest.
“The citizens of Los Angeles must be able to trust that government officials will make decisions based on the needs of the community, rather than using their position of authority to serve their own best interest,” said Deirdre Fike, Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The FBI and our partners will continue to work on restoring that trust by addressing corruption by public officials.”
Boyd also pleaded guilty to tax evasion in relation to his 2011 personal income tax return. In his plea agreement, Boyd admitted receiving income from a security business he operated, At Close Range. The income came from the owner of a company doing business with the Port, American Guard Services. Boyd admitted that he failed to report that income on his personal income tax returns for years 2007 through 2011.
Additionally, Boyd pleaded guilty to a misdemeanor count of failing to file a 2011 tax return for At Close Range. While he pleaded guilty to one only count of failing to file a tax return for At Close Range, Boyd admitted in his plea agreement that he failed to file tax returns for the business for years 2007 through 2011.
The estimated loss of tax revenue to the Internal Revenue Service for Boyd’s conduct was more than $300,000.
“While occupying a position of trust in the community, Mr. Boyd actively concealed his outside business interests by not disclosing certain income he received on his federal income tax returns,” stated Anthony J. Orlando, Acting Special Agent in Charge for IRS Criminal Investigation. “IRS Criminal Investigation will continue to vigorously pursue those who unjustly enrich themselves in violation of their fiduciary duties.”
The case against Boyd is the product of an investigation by the Federal Bureau of Investigation and IRS Criminal Investigation.
The case was prosecuted by Assistant United States Attorney Daniel J. O’Brien of the Public Corruption and Civil Rights Section and Assistant United States Attorney Scott Paetty of the General Crimes Section.
Statement from the US AttorneyRead the Press Release
Last week law enforcement within the Central District of California suffered multiple tragedies as peace officers were victimized by senseless violence. The murders of Sergeant Steve Owen of the Los Angeles County Sheriff’s Department, and Officers Jose Gilbert Vega and Lesley Zerebny of the Palm Springs Police Department serve as a dark reminder of the dangers that police officers face every minute of every day that they are on duty. These three brave officers made the ultimate sacrifice while making the community safer for all of us. Our community is diminished by their absence, but their examples should inspire all of us to work harder to achieve a better society, one worthy of their memories.
The United States Attorney’s Office for the Central District of California and the Department of Justice offer our thoughts, prayers, and condolences to the families and loved ones of the slain officers. They will not be forgotten.
United States Attorney’s Office Participating in Events to Mark National Community Policing Week Including ‘Coffee with a Cop’ TodayRead the Press Release
LOS ANGELES – President Obama has designated this week as National Community Policing Week to “reaffirm our commitment to supporting and advancing the practice of community policing and to fortifying the bonds between police officers and communities.”
The United States Attorney’s Office in Los Angeles is marking National Community Policing Week by participating in numerous programs across the Southland that strengthened the relationship between law enforcement and the communities it serves. This morning federal prosecutors across the Southland participated in “Coffee with a Cop” day, where police officers shared coffee with community members, and United States Attorney Eileen M. Decker participated in a “virtual ride along” with the Los Angeles Police Department’s Community Relations Team.
Throughout the week federal prosecutors were out in the community, building relationships and continuing to open dialogues at community fairs, read-alongs at elementary schools, and a screening and discussion of the FBI film “Chasing the Dragon,” which chronicles the horror of prescription drug abuse.
The United States Attorney and Assistant United States Attorneys are partnering with law enforcement agencies around the region, including the South Pasadena Police Department, the El Monte Police Department, the Drug Enforcement Administration, the Redondo Beach Police Department, the LAPD, the Los Angeles City Attorney’s Office and the San Marino Police Department.
Community policing is a public safety philosophy based on partnership and cooperation between law enforcement and the communities that they are sworn to protect. At the center of community policing is the idea that all members of the community – both sworn officers and civilians – have a stake in the safety of their neighborhoods where they live and work.
The Department of Justice has invested heavily in the concept of community policing. Earlier this week, United States Attorney General Loretta E. Lynch announced $119 million in grant money to 184 law enforcement agencies for the hiring of Community Policing Officers. The grant recipients included the City of Los Angeles ($3.125 million), the City of Santa Ana ($1.25 million), and the San Bernardino Police Department ($2.85 million).
Monday’s announcement follows several grants made in the last two months by the Department of Justice to local governments to improve police community relations:
Recipient
Grant Amount
Purpose of Grant
City of Compton
$95,747
Hire and Train Neighborhood Leaders
City of Covina
$10,645
Community Services Officer
City of Covina
$186,635
Body Worn Cameras
City of Downey
$26,358
Neighborhood Preservation Program, Neighborhood Watch Program, Crime Impact Team
City of El Monte
$28,492
Community Policing Programs
City of Lancaster
$68,883
Good Citizenship Program for At-Risk Youth
City of Long Beach
$259,000
Safe Schools Strategy
City of Los Angeles
$1.87 Million
Community and Law Enforcement Recovery (CLEAR) Program
City of Los Angeles
$331,041
Gang Reduction and Youth Development Program
City of Norwalk
$30,840
Equipment to Increase Safety in City Parks and Other Areas
City of Riverside
$150,000
Body Worn Cameras
City of Rosemead
$11,712
School Resources Officer
City of San Luis Obispo
$74,060
Body Worn Cameras
City of Simi Valley
$187,500
Body Worn Cameras
City of South Gate
$41,484
Overtime for Officers Dealing with Mentally Ill and Homeless Population
City of West Hollywood
$21,903
Overtime for Law Enforcement Presence in Parks
Los Angeles County
$999,600
Body Worn Cameras
County of Riverside
$577,900
Body Worn Cameras
National Community Policing Week builds on President Obama’s efforts to engage with law enforcement and other members of the community to implement key recommendations from the 21st Century Policing Task Force report. Yesterday the Attorney General recognized the LAPD, which was represented by Deputy Chief William Scott and Captain Ruby Flores, for its community policing efforts at the inaugural Attorney General’s Awards for Distinguished Service in Community Policing in Washington, D.C. These awards were given to those “who exemplify remarkable achievements in innovative community policing strategies, criminal investigations, and field operations.”
“National Community Policing Week is an important opportunity to highlight the Department of Justice’s outreach to the communities we serve,” said United States Attorney Eileen M. Decker. “Developing and maintaining relationships between law enforcement and the communities that it serves are vital to improving transparency and community confidence. Such dialog is critical to addressing both the needs of law enforcement and the concerns of the community."
For more information on National Community Policing Week or the Community Policing Tour, please visit https://www.justice.gov/ag/community-policing-tour.
Riverside County Man Indicted on Federal Charges of Producing Child Pornography by Filming Sexual Molestation of Young BoyRead the Press Release
RIVERSIDE, California – A federal grand jury has indicted a San Jacinto man on charges of producing child pornography for allegedly making videos while he sexually molested a 5-year-old boy.
Steve Alonso Marquez, 31, of San Jacinto, was named in a four-count indictment returned by the grand jury Wednesday. The indictment alleges two counts of producing child pornography videos that were distributed to other people.
In addition to the production of child pornography, Marquez is charged with possessing child pornography at his residence and using the Internet in an attempt to have illegal sexual conduct with a young girl.
Marquez was arrested in the Southern District of California on August 12 after he arrived at a hotel in Fallbrook, allegedly for the purpose of engaging in sexual activity with the girl. Marquez was subsequently indicted by a federal grand jury in San Diego, where he is currently being held without bond.
The child pornography charges contained in this week’s indictment stem from a search warrant executed at Marquez’s residence on August 23. At that time, FBI agents recovered digital devices that contained the alleged child pornography, which included videos Marquez is charged with making while molesting a young boy at a location investigators believe is in Hemet.
“This defendant is charged with filming and sharing heinous acts against a child,” said United States Attorney Eileen M. Decker. “This type of behavior has unimaginable impacts on young victims, and the distribution of images documenting child abuse only seeks to inspire additional abuse of children. This criminal behavior cannot be tolerated and will be subject to the most aggressive prosecution available.”
“The disturbing allegations against Mr. Marquez remind us of the predatory threat targeting the most vulnerable members of our society and the need to remain vigilant,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The federal government takes the production of child pornography very seriously. In addition to the horrific abuse suffered by the minor victim, the further distribution of images leads to the continued suffering of that victim and supplies the global demand for such images.”
The indictment charges Marquez with two counts of production of child pornography, possession of child pornography, and attempted enticement of a minor to engage in criminal sexual activity. Each count of producing child pornography carries a mandatory minimum sentence of 15 years in federal prison and a statutory maximum penalty of 30 years. The charge of possessing child pornography carries a maximum penalty of 20 years in prison because the images allegedly depict children under the age of 12. The charge of attempted enticement of a minor carries a mandatory minimum sentence of 10 years and a maximum possible penalty of life without parole. Therefore, if he is convicted of all four counts in the indictment, Marquez would face a sentence of at least 40 years in federal prison and could be sentence to as much as life in federal prison.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty in court.
The case against Marquez is the product of an investigation by the Federal Bureau of Investigation. This case is being prosecuted by Special Assistant United States Attorney Teresa K.B. Beecham.
Prosecutors Secure Guilty Pleas and File Asset Forfeiture Actions in International Money Laundering and Identity Theft Scheme involving Fraudulent Tax Returns that Sought $38 Million in RefundsRead the Press Release
SANTA ANA, California – Federal prosecutors have secured guilty pleas from seven defendants who participated in a large-scale international identity theft scheme that laundered more than $14 million in fraudulently obtained tax refunds by using bogus Republic of Armenia passports.
This week, special agents with IRS Criminal Investigation posted a forfeiture notice on a Woodland Hills residence that prosecutors are seeking to forfeit based on allegations that it was purchased with illegally obtained money. Last month, the United States Attorney’s Office filed a civil asset forfeiture lawsuit against three Van Nuys properties and alleged criminal forfeiture against the Woodland Hills property, which cumulatively have more than $1 million in equity. According to the civil complaint, some of those properties were purchased with cash with fraudulent Armenian passports used as identification.
And, in a third development stemming from the investigation, a federal grand jury in Santa Ana last month returned an indictment charging an eleventh defendant with mortgage fraud, bank fraud, and aggravated identity theft. While not directly related to the stolen identity refund fraud (SIRF) case, Aramais Airapetian, 24, of Woodland Hills, was charged as a result of the same investigation with using fraudulent documents, including fake pay stubs and altered bank statements, to obtain a mortgage from loanDepot.com. Criminal forfeiture is also alleged against the Woodland Hills house that Airapetian allegedly purchased using the mortgage proceeds he fraudulently obtained. If he is convicted, Airapetian could face decades in federal prison.
With the indictment of Airapetian, 11 defendants now have been charged as a result of the investigation. Seven defendants have pleaded guilty, one is a fugitive, and three (including Airapetian) are pending trial.
“Stolen identity refund fraud schemes have become a significant, nationwide problem that victimize the United States government, individuals who are identity theft victims and all taxpayers who end up paying for these fraudulent schemes,” said United States Attorney Eileen M. Decker. “These defendants created a complex, international scheme in an effort to conceal their fraud, but it was not sufficient to shield them from discovery and prosecution.”
Authorities initially announced this case in April when nine of the 10 defendants accused of being part of a money laundering ring were arrested. According to court documents, those defendants used hundreds of bank accounts that had been opened with stolen identities to launder millions of dollars in fraudulently obtained tax refunds. The IRS has identified approximately 7,000 fraudulent tax returns related to this scheme that cumulatively sought about $38 million in refunds. The IRS issued about $14 million in refunds, which were deposited into and laundered through bank accounts used in this scheme. The fraudulent tax returns were filed and the bank accounts were opened with personal identifying information (PII) that had been stolen from thousands of victims.
“Identity theft and tax refund fraud were the lifeblood that these defendants used to further their massive money laundering fraud scheme,” stated Acting Anthony J. Orlando, Special Agent in Charge for IRS Criminal Investigation. “IRS Criminal Investigation will not rest until this investigation has been fully adjudicated and those responsible for these felonious crimes are held accountable.”
The 10 defendants initially charged, each of whom was named in a separate criminal complaint, allegedly used fraudulent foreign passports to commit identity theft by opening numerous bank accounts and mailbox addresses with the stolen identities. According to the criminal complaints, they used fraudulent passports from the Republic of Armenia, Georgia, and the Czech Republic that had the names of identity theft victims but the defendants’ photographs. The mailboxes and bank accounts were opened across Los Angeles and Orange counties.
“The complexity and audacity of this scheme were truly astounding and illustrate the lengths to which fraudsters will go to game the system for financial gain,” said Joseph Macias, special agent in charge of HSI Los Angeles. “Identity theft and tax fraud result in billions of dollars in losses every year in this country and cause tremendous heartache and financial harm to law-abiding consumers. We owe it to them to pursue these cases aggressively, making it clear that those who brazenly enrich themselves on the back of the American taxpayer, as these defendants allegedly did, will be held accountable for their crimes.”
The seven defendants who have pleaded guilty before United States District Judge Andrew J. Guilford are:
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Konstantin Galstyan, 23, of Lake View Terrace, who pleaded guilty on September 30 to bank fraud and identity theft and is scheduled to be sentenced on December 5;
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Artash Stepanyan, 31, of Glendale, who pleaded guilty in June to identity theft, admitted causing losses of more than $1 million and is scheduled to be sentenced on January 27;
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Sargis “Sergio” Tabadzhyan, 54, of West Hollywood, who pleaded guilty in June to identity theft and is scheduled to be sentenced on November 7;
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Arman Galstyan, aka “Mkhitar Mkrtchyan,” 43, of Sylmar, who pleaded guilty in June to identity theft and is scheduled to be sentenced on November 14;
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Armen Khachkalyan, 48, of Glendale, who pleaded guilty in July to identity theft and is scheduled to be sentenced on October 24;
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Eduard Astvatsatryan, 34, of Glendale, who pleaded guilty to identity theft in August and is scheduled to be sentenced on December 12; and
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Hripsime Avagyan, 24, of Burbank, who pleaded guilty to identity theft in June and is scheduled to be sentenced on January 30.
The identity theft charges to which the seven defendants have pleaded guilty carry a statutory maximum sentence of 15 years in federal prison and a $250,000 fine.
The civil asset forfeiture action filed last month seeks forfeiture of three Van Nuys condominiums and alleges that the purchases of those real properties facilitated the concealment of the proceeds from the SIRF scheme in a process that included purchases and sales of gold.
The ongoing investigation into money laundering involving fraudulently obtained tax refunds and related frauds is being conducted by IRS Criminal Investigation, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, and the Federal Bureau of Investigation.
The case is being prosecuted by Assistant United States Attorney Charles Pell of the Santa Ana Branch Office. Assistant United States Attorney Frank Kortum represents the United States in the civil forfeiture action.
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Owner of Los Angeles Medical Supply Company Sentenced to 60 Months in Prison for Multimillion-Dollar Medicare Fraud SchemeRead the Press Release
A Los Angeles man who was the owner of a medical supply company was sentenced to 60 months in prison for his role in a scheme that fraudulently billed more than $4 million to Medicare.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Eileen M. Decker of the Central District of California, Assistant Director in Charge Deirdre L. Fike of the FBI’s Los Angeles Field Office and Special Agent in Charge Christian Schrank of the U.S. Department of Health and Human Services-Office of Inspector General’s (HHS-OIG) Los Angeles Region made the announcement.
Valery Bogomolny, 44, was convicted of six counts of health care fraud following a jury trial on Nov. 6, 2015, before U.S. District Court Judge S. James Otero of the Central District of California. In addition to the prison sentence, Judge Otero ordered Bogomolny to pay $1,266,860.03 in restitution.
According to evidence presented at trial, between January 2006 and October 2009, Bogomolny used his company, Royal Medical Supply, to bill Medicare $4 million for power wheelchairs (PWCs), back braces and knee braces that were medically unnecessary, not provided to beneficiaries or both. The evidence further showed that Bogomolny created false documentation to support his false billing claims, including creating fake reports of home assessments that never occurred. PWCs were delivered to beneficiaries who were able to walk without assistance and Bogomolny signed documents stating that he had delivered equipment when, in fact, the equipment was not actually delivered.
The FBI and HHS-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Central District of California. Fraud Section Trial Attorneys Ritesh Srivastava and Claire Yan are prosecuting the case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,900 defendants who collectively have billed the Medicare program for over $10 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
Owner of Los Angeles Medical Supply Company Sentenced to 5 Years in Federal Prison for Multimillion-Dollar Medicare Fraud SchemeRead the Press Release
LOS ANGELES – A West Los Angeles man who was the owner of a medical supply company has been sentenced to five years in federal prison for his role in a scheme that fraudulently billed more than $4 million to Medicare.
Valery Bogomolny, 44, of Westwood, was sentenced yesterday by United States District Judge S. James Otero, who also ordered the defendant to pay $1,266,860 in restitution.
The sentencing of Bogomolny was announced today by Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; United States Attorney Eileen M. Decker; Assistant Director in Charge Deirdre L. Fike of the FBI’s Los Angeles Field Office; and Special Agent in Charge Christian Schrank of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), Los Angeles Region.
Bogomolny was found guilty by a federal jury in November 2015 of six counts of health care fraud. According to evidence presented at trial, between January 2006 and October 2009, Bogomolny used his company, Royal Medical Supply in the Beverly Grove district of Los Angeles, to bill Medicare $4 million for power wheelchairs, back braces and knee braces that were medically unnecessary, not provided to beneficiaries or both.
The evidence further showed that Bogomolny created false documentation to support his false billing claims, including creating fake reports of home assessments that never occurred. Power wheelchairs were delivered to beneficiaries who were able to walk without assistance. In other cases, Bogomolny signed documents stating that he had delivered equipment when, in fact, the equipment was not actually delivered.
“Royal Medical Supply was a complete fraud,” said United States Attorney Eileen M. Decker. “Many purported patients lived over 100 miles away from the storefront, most of the prescriptions were issued under the names of doctors either associated with or the victims of fraud, and most of the patients never received the equipment paid for by Medicare. Mr. Bogomolny supervised this scheme victimizing U.S. taxpayers, warranting this significant sentence.”
The FBI and HHS-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Central District of California. DOJ Fraud Section Trial Attorneys Ritesh Srivastava and Claire Yan prosecuted the case.
Since its inception in March 2007, the Medicare Fraud Strike Force, which now operates in nine cities across the country, has charged over 2,900 defendants who collectively have billed the Medicare program for more than $10 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
West Hollywood Store and Owner Sentenced for Violating Endangered Species Act by Illegally Importing SeahorsesRead the Press Release
LOS ANGELES – Necromance, a West Hollywood shop that sells novelty wildlife items, and its owner were sentenced today in federal court for violating the Endangered Species Act by unlawfully importing seahorses.
Necromance and Nancy Delap Smith, 56, of Studio City pleaded guilty in July to misdemeanor violations of the Endangered Species Act. Both defendants illegally imported items that were protected under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).
During today’s sentencing hearing, Necromance was ordered to pay a $20,000 fine and was placed on probation for two years.
Smith was placed on probation for a period of one year and ordered to serve 200 hours of community service.
Both defendants were sentenced by United States Magistrate Judge John E. McDermott.
“The defendant and her store participated in illegal wildlife trafficking, which is prohibited by the United States, international treaties and nearly every nation on the planet,” said United States Attorney Eileen M. Decker. “These laws and international agreements are designed to protect species that are subject to senseless killing and poaching simply to meet the demands of individuals who want to possess unusual animals.”
In plea agreements filed in court, Necromance and Smith admitted to unlawfully importing seahorses, as well as bat skulls, that had been imported from Indonesia in 2011. Smith and Necromance also unlawfully imported other wildlife, such as scorpions and tree frogs, without declaring those items to the U.S. Fish and Wildlife Service, which was responsible for the investigation in this case.
“Illegal trafficking in protected wildlife species will not be tolerated in this country,” said Jill Birchell, special agent in charge of the Pacific Southwest Region of the U.S. Fish and Wildlife Service. “This case demonstrates that officers of the U.S. Fish and Wildlife Service will continue their diligent efforts to investigate and prosecute those who seek to profit by illegally exploiting the world’s wildlife resources.”
This case was prosecuted by Dennis Mitchell of the Environmental and Community Safety Crimes Section.
Two Colombian Nationals Extradited to Los Angeles on Charges of Leading Multi-Ton Cocaine Conspiracy via Clandestine Air ShipmentsRead the Press Release
LOS ANGELES – Two Colombian drug kingpins have been extradited to Los Angeles on federal charges of overseeing shipments of thousands of pounds of cocaine from Colombian laboratories to Central American distribution hubs, ultimately destined for sale in Los Angeles and elsewhere in the United States, including more than $70 million in cocaine recovered by international law enforcement.
In an indictment that was unsealed late yesterday, Dicson Penagos-Casanova, 36, and Juan Gabriel Rios Sierra, 34, are charged with spearheading the conspiracy to “coordinate aerial shipments of ton-quantities of cocaine” for sale to “cocaine-trafficking syndicates” in Central America.
Specifically, Penagos and Rios would “transport the cocaine via overland routes from production laboratories outside Meta, Colombia, to underground storage facilities near clandestine airstrips in the western Apure Department of Venezuela.” They would “arrange for bribes to be paid to Venezuelan military and government officials” in an effort to ensure that aircraft carrying cocaine loads “enjoyed safe passage through Venezuelan airspace.” Using jets that they acquired “through straw purchasers in the United States,” Penagos and Rios would hire pilots to fly the cocaine to the “Central American distribution hubs,” where the drugs would be offloaded “for further distribution” in Los Angeles and elsewhere in the United States and Mexico.
"By taking key players out of commission, we are disrupting the drug cartels’ ability to import their dangerous narcotics into our country,” said United States Attorney Eileen M. Decker. “These defendants’ arrival in the U.S. for prosecution marks a significant victory for law enforcement here and in Central and South America, which have worked in concert to ensure justice is achieved in this case.”
The indictment focuses on two air shipments in January and May of 2015 with a combined 2,880 kilograms (approximately 3.2 tons) of cocaine, which has a black market wholesale value of approximately $72 million. Both shipments were ultimately recovered by international law enforcement after two aircraft crashed. The January 2015 cocaine shipment was shot down by the Venezuelan Air Force shortly after takeoff. Soon thereafter, Dutch law enforcement recovered kilogram-sized packages of cocaine that were floating in the Caribbean Sea near Aruba. The May 2015 aircraft crashed into the Caribbean Sea near the Colombian port of Barranquilla after its engine failed.
The indictment also outlines intercepted communications in which Penagos and Rios coordinated the cocaine shipments and discuss the two downed aircraft, including sharing an article from a Honduran newspaper reporting on the January 2015 shoot-down and speculating on whether the May 2015 crash was also the product of “intervention by the Venezuelan military.”
“The vast majority of cocaine imported to the U.S. originates in Colombia, and a substantial amount of it transits the Los Angeles area,” said DEA Special Agent in Charge Steve Comer. “This investigation penetrated the highest levels of multiple drug cartels and disrupted the entire cocaine supply chain, from the production in Colombia to the distribution in the U.S. Continued collaboration between DEA and our foreign and domestic law enforcement partners will deliver similar blows to the cocaine industry, which is already being forced to rethink its logistics.”
Penagos and Rios were delivered to United States custody yesterday after Colombian courts approved the extradition request. They are expected to be arraigned on the indictment this afternoon in United States District Court in Los Angeles. If convicted of the charges in the indictment, Penagos and Rios each face a statutory maximum prison term of life in federal prison.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.
The investigation in this case was conducted by the Drug Enforcement Administration, both in Los Angeles and Colombia; the Los Angeles High Intensity Drug Trafficking Area Task Force; and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. The Colombian, Aruban and Dutch governments provided substantial assistance.
The case is being prosecuted by Assistant United States Attorneys Benjamin Barron, Carol Alexis Chen and Ryan Weinstein of the Organized Crime Drug Enforcement Task Force Section.
Thousand Oaks Man Sentenced to Nearly 5 Years in Federal Prison for Illegal Gun Sales Months After Firearm Conviction in State CourtRead the Press Release
LOS ANGELES – A Ventura County man who illegally sold five firearms in less than a month and agreed to sell three more during an undercover operation last year has been sentenced to nearly five years in federal prison.
Joshua Pineda, 24, of Thousand Oaks, was sentenced on Monday to 57 months in prison after admitting that he illegally sold five rifles during transactions in October and November of 2015 that took place in parking lots in Simi Valley and Thousand Oaks. After selling the rifles for thousands of dollars, Pineda agreed to sell three more to an undercover law enforcement officer.
Most of the eight firearms in this case were AR-15-type assault rifles, several of which did not have serial numbers. According to court documents, Pineda also sold more than 1,000 rounds of ammunition to the undercover agent.
“Parking lot sales of untraceable assault rifles by a convicted felon pose a serious danger to the community,” said United States Attorney Eileen M. Decker. “Transactions like these supply an illegal market for firearms that endangers law-abiding citizens when the deadly weapons make their way into the hands of criminals.”
Pineda pleaded guilty in February to federal offenses of selling firearms without a license and being a felon in possession of a firearm. Pineda previously pleaded guilty in Los Angeles Superior Court in February 2015 to a felony offense involve an assault rifle.
Pineda was sentenced this week by United States District Judge Dale S. Fischer.
“Illegal acquisition and disposition of untraceable firearms presents a significant challenge and a major concern to our community” said ATF Special Agent in Charge Eric D. Harden. “These offenses circumvent regulations in place intended to thwart firearm possession by prohibited individuals.”
The case against Pineda was investigated by the Bureau of Tobacco, Alcohol, Tobacco, Firearms and Explosives, which received substantial assistance from the Ventura County Sheriff’s Department.
This case was prosecuted by Gregory S. Scally of the Santa Ana Branch Office
Thousand Oaks Man Sentenced to Nearly 5 Years in Federal Prison for Illegal Gun Sales Months After Firearm Conviction in State CourtRead the Press Release
LOS ANGELES – A Ventura County man who illegally sold five firearms in less than a month and agreed to sell three more during an undercover operation last year has been sentenced to nearly five years in federal prison.
Joshua Pineda, 24, of Thousand Oaks, was sentenced on Monday to 57 months in prison after admitting that he illegally sold five rifles during transactions in October and November of 2015 that took place in parking lots in Simi Valley and Thousand Oaks. After selling the rifles for thousands of dollars, Pineda agreed to sell three more to an undercover law enforcement officer.
Most of the eight firearms in this case were AR-15-type assault rifles, several of which did not have serial numbers. According to court documents, Pineda also sold more than 1,000 rounds of ammunition to the undercover agent.
“Parking lot sales of untraceable assault rifles by a convicted felon pose a serious danger to the community,” said United States Attorney Eileen M. Decker. “Transactions like these supply an illegal market for firearms that endangers law-abiding citizens when the deadly weapons make their way into the hands of criminals.”
Pineda pleaded guilty in February to federal offenses of selling firearms without a license and being a felon in possession of a firearm. Pineda previously pleaded guilty in Los Angeles Superior Court in February 2015 to a felony offense involve an assault rifle.
Pineda was sentenced this week by United States District Judge Dale S. Fischer.
“Illegal acquisition and disposition of untraceable firearms presents a significant challenge and a major concern to our community” said ATF Special Agent in Charge Eric D. Harden. “These offenses circumvent regulations in place intended to thwart firearm possession by prohibited individuals.”
The case against Pineda was investigated by the Bureau of Tobacco, Alcohol, Tobacco, Firearms and Explosives, which received substantial assistance from the Ventura County Sheriff’s Department.
This case was prosecuted by Gregory S. Scally of the Santa Ana Branch Office
Former President of San Fernando Valley Brokerage Firm Sentenced to 15 Years in Federal Prison for Wire Fraud and Tax Convictions for Misappropriating Investor FundsRead the Press Release
LOS ANGELES – The former president and CEO of the Sherman Oaks-based Morgan Peabody, Inc. brokerage and investment firm was sentenced yesterday to 15 years in prison for federal wire fraud charges stemming from an investment scam in which defendant misappropriated nearly $6 million from more than 100 investors.
David Williams, 54, of Studio City, a licensed securities dealer and investment adviser, was sentenced by United States District Judge Dale S. Fischer. In May 2015, in the midst of a jury trial, Williams pleaded guilty to three counts of wire fraud and two counts of tax evasion. As part of his plea agreement, Williams admitted that he directed Morgan Peabody representatives to sell securities in a fund that Williams personally had created, purportedly to invest in real estate. The Sherwood Secured Investment Fund, LLC, a Studio City business that Williams owned, offered a 9 percent annual return on investments. Williams used the majority of the $3.75 million investors put in the Sherwood Fund to pay for personal expenses, including lavish vacations and a $50,000/month lease on a $6 million residence in Toluca Lake.
The defendant was also held responsible for misappropriated funds from two other securities offerings that he created, for a total of almost $6 million in investor funds that he bilked from the three offerings. Williams was also found to have obstructed justice by lying to the Securities & Exchange Commission in its investigation of the offerings, and lying to the Judge and the Probation Office in seeking to withdraw his guilty plea.
"This sentence serves as a warning to criminals who commit fraud that they face very serious consequences," said United States Attorney Eileen M. Decker. "The defendant callously stole the hard-earned retirement savings of numerous victims and spent it on himself. His greed and lack of remorse will continue to harm his victims for many years to come, but now he too will be paying a price for more than a decade."
"While the defendant's sentence is significant, it will not compensate for the monetary investments lost to the dozens of people he victimized through false representations," said Deirdre Fike, the Assistant Director in Charge of the FBI's Field Office. "The FBI will continue to collaborate with our partners at the IRS and the United States Attorney's Office to address significant investment fraud matters."
In his plea agreement, Williams admitted that he used investor money for personal purposes and committed tax evasion by failing to file returns with the IRS for tax years 2007 and 2008, and failing to report the more than $2.3 million in income he received. Williams agreed in the plea agreement to pay additional taxes of $777,881 for those tax years. Defendant subsequently moved to withdraw his plea, but the Court denied his motion and ordered him to pay restitution in the amount of $5,125,137.60 to victims of the fraud scheme, $777,881 to the IRS, and $258,940 to the California Franchise Tax Board.
"Mr. Williams squandered the life savings of his investors, putting his own selfish greed above the wellbeing of his victims," stated Acting Special Agent in Charge Anthony J. Orlando of IRS Criminal Investigation. "As yesterday’s sentencing demonstrates, fraudsters like Mr. Williams will be held accountable for their actions as they are unacceptable to both investors and the taxpaying public."
The investigation into Williams’ scheme was conducted by special agents with the Federal Bureau of Investigation and IRS - Criminal Investigation. The case was prosecuted by Assistant United States Attorney Keri Axel.
United States Citizen Extradited to Los Angeles from Tonga to Face Investment Fraud ChargesRead the Press Release
LOS ANGELES – A U.S. citizen who formerly resided in Turlock, California, and Auckland, New Zealand, was returned to the United States by Tonga and is expected to appear in court today to face federal investment fraud charges.
Antone Thomas Pedras, who also went by Chris Pedras, 64, arrived at LAX last Friday in the custody of the United States Marshals Service. Pedras was returned to the United States to face eleven counts of wire fraud in connection with several fraudulent investment schemes.
In a first superseding indictment returned by a federal grand jury on August 6, 2014, Pedras is charged with inducing investors to give money to “Maxum Gold Trade Program,” which he claimed was a “low-risk investment with monthly returns ranging between 4 to 8 percent.” Pedras is also charged with soliciting investments in the “FMP Renal Program,” which he claimed “would be publicly traded and would operate kidney dialysis clinics in New Zealand.” To bolster his false claims to his investors, Pedras created false account statements for the Maxum website, www.maxumgoldbnkpcpt.com.
“Those who commit fraud against residents of the United States will not escape punishment simply by residing overseas,” said United States Attorney Eileen M. Decker. “This case and the extradition demonstrate the commitment of the Department of Justice to holding responsible for their actions criminals both here and outside of the country who commit fraud against U.S. residents.”
If convicted of the charges in the indictment, Pedras faces a statutory maximum sentence of 220 years in prison.
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.
"The FBI is committed to investigating complex high-yield investment schemes," said Deirdre Fike, the Assistant Director in Charge of the FBI's Los Angeles Field Office. "As the return of Mr. Pedras makes clear, we are also committed to seeking justice for victims within the U.S. and beyond its borders."
The U.S. Securities and Exchange Commission has filed a parallel civil case against Pedras.
The investigation into Pedras is being conducted by the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney Ivy Wang of the Santa Ana office.
United States Attorney Announces Launch of Outreach Program to Address Heroin and Opioid AbuseRead the Press Release
LOS ANGELES – United States Attorney Eileen M. Decker announced today the launch of a new community outreach program to address the growing epidemic of heroin and prescription opioid abuse.
Because of the public health crisis stemming from the abuse of prescription drugs such as OxyContin and Vicodin and in conjunction with the Department of Justice’s recent Heroin and Opioid Awareness campaign, prosecutors and staff from the United States Attorney’s Office, partner law enforcement agencies and public health officials will present programs and panel discussions to area colleges. Over the coming weeks and months, the expert team will discuss this public health threat, highlight a multi-prong approach designed to save lives, and work to reduce the terrible impact these drugs have on individuals and families.
“The increased use of heroin and opioids has infected communities from coast to coast and in many neighborhoods within our district. At the United States Attorney’s Office, we are committed to stemming the flow of illegal opioids and heroin both in the courtroom and in the community,” said United States Attorney Eileen M. Decker. “Prosecutors in my office have targeted drug traffickers who import heroin and doctors who issue prescriptions for addictive painkillers without any medical purpose. We are working with our law enforcement colleagues to develop new strategies to investigate drug trafficking organizations that import and distribute opioids and heroin, to better track prescription drugs that may be diverted to street users, and to confront new challenges that include the increasing abuse and death rates associated with even more powerful narcotics such as fentanyl. Our enforcement efforts have helped reduce the availability of opioids on the street and have had a deterrent effect, particularly in the medical community.”
“Law enforcement agencies throughout the country are seizing record amounts of heroin and other opioids and first responders are witnessing the devastating effects of these substances in numbing proportions,” said DEA Special Agent in Charge John S. Comer. “DEA will continue to target the illicit trafficking organizations responsible for these detriments, but we’re also committed to educating the public about the dangers of drug misuse and reducing demand – awareness is a crucial element in combatting this epidemic.”
Beginning this week, federal prosecutors will be joined by agents from the Drug Enforcement Agency (DEA), expert physicians and public health officials on college campuses. These events are designed to educate students on the dangers of prescription drugs, the presence of counterfeit drugs, and what to do in the event of a potential overdose. Those participating in the discussion will be able to view excerpts from the FBI-produced film “Chasing the Dragon: The Life of an Opioid Addict,” which illustrates the harsh reality of opioid addiction. Following confirmed presentations at Occidental College, Cal State Los Angeles and Chapman University, prosecutors hope to bring the program to other campuses across the region. During these meetings, prosecutors hope to hear ideas from the members of the public on what more the Justice Department can do to combat this problem.
For further information or to schedule a presentation at your college or community organization, please contact the United States Attorney’s Office at [email protected].
Mission Viejo Man Agrees to Plead Guilty to $2.3 Million Real Estate Investment Fraud SchemeRead the Press Release
LOS ANGELES – A Mission Viejo man has agreed to plead guilty to taking more than $2,300,000 from investors in a fraudulent real estate investment scheme in which he used investor funds to pay for personal expenses, including travel and cosmetic surgery, to make cash withdrawals, and to make Ponzi-style payments to other investors.
Francisco “Frank” Hobson, 39, was named in a criminal information last Friday charging him with wire fraud. A plea agreement in the case was also filed, and, in the plea agreement, Hobson has agreed to plead guilty to the information and pay at least $1,584,941 to the victims of his crime. Hobson is expected to appear to be arraigned on the charge in the information this afternoon.
The information charges Hobson, who was at the time a licensed real estate agent, in connection with his scheme of luring victims to give him money, between December 2010 and June 2016, with his promises that their investments would be used to purchase properties. In reality, the properties that Hobson advertised to his victims were not actually for sale or simply did not exist, and Hobson sent victims purported purchase agreements for the properties which were fraudulent or forged.
Hobson continued to engage in the scheme for months after being interviewed in November 2015 by the Federal Bureau of Investigation in connection with complaints from two of his victims.
“The defendant made simple promises to his victims, promises he never intended to fulfill,” said United States Attorney Eileen M. Decker. “The defendant then used his victims’ hard-earned money to fund his personal lifestyle. That he continued to do so after law enforcement had interviewed him was all the more egregious.”
As detailed in the plea agreement, Hobson would tell investors to transfer money to “escrow accounts,” which were, in reality, his own bank accounts that he alone controlled. After the investors’ money was deposited in his accounts, Hobson used the money for personal purchases at grocery stores, chain restaurants, and retail stores, as well as making cash withdrawals. Hobson also used their money to pay his landlord, and for travel, laser hair removal, and plastic surgery. Furthermore, Hobson paid approximately $757,031 of the $2,339,473 he collected in the scheme to his victims as Ponzi-style payments designed to conceal and extend the length of the scheme.
“The defendant targeted Hispanic individuals and presented himself as someone they could trust in a classic affinity scheme, only to spend their money to live lavishly,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Mr. Hobson’s chronic criminal behavior even after an investigation was underway is a reminder that caution should be exercised before handing over large sums of money, even when someone appears to be in a position of trust, or when someone with a similar background is offering an investment opportunity.”
Wire fraud carries a statutory maximum penalty of 20 years in federal prison. The case against Hobson was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Anil J. Antony of the Cyber and Intellectual Property Crimes Section.
Justice Department Reaches $4 Million Settlement with Wells Fargo Dealer Services for Illegally Repossessing Servicemembers’ CarsRead the Press Release
The Justice Department announced today that Wells Fargo Bank N.A., doing business as Wells Fargo Dealer Services, has agreed to change its policies and pay over $4.1 million to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA) by repossessing 413 cars owned by protected servicemembers without obtaining a court order.
The settlement, which is still subject to court approval, was filed in the U.S. District Court for the Central District of California. The department launched an investigation after it received a complaint in March 2015 from the U.S. Army’s Legal Assistance Program alleging that Wells Fargo had repossessed Army National Guardsman Dennis Singleton’s used car in Hendersonville, North Carolina, while he was preparing to deploy to Afghanistan to fight in Operation Enduring Freedom. After Wells Fargo repossessed the car, it sold it at a public auction and then tried to collect a deficiency balance of over $10,000 from Singleton and his family. In October 2014, while seeking assistance with debt consolidation, Army National Guardsman Singleton met with a National Guard attorney, who informed him of his rights under the SCRA. The attorney requested information from Wells Fargo about the original loan and repossession, and asked for copies of the correspondence and payment history. The attorney never received a response from Wells Fargo. The department’s subsequent investigation corroborated Singleton’s complaint and found a pattern of unlawful repossessions spanning over more than seven years.
“Wells Fargo Bank unlawfully repossessed hundreds of servicemembers’ cars without the proper process, and the bank will now rightfully pay for its violations,” said Principal Deputy Associate Attorney General Bill Baer. “The Justice Department is committed to protecting our country’s servicemembers as they continue to fight for our freedom.”
“Auto lenders cannot repossess the cars of the brave men and women who risk their lives to defend our freedom without providing them the required legal protections under the SCRA,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “I commend Wells Fargo for owning up to its shortcomings and providing all the information we requested after learning of our investigation. This settlement should help ensure that servicemembers are not penalized financially for protecting our nation.”
“We all have an obligation to ensure that the women and men who serve our country in the Armed Forces are afforded all of the rights they are due,” said U.S. Attorney Eileen M. Decker of the Central District of California. “Wells Fargo failed in that obligation. The settlement announced today, however, vindicates the rights of our servicemembers and will help ensure better lending practices in the future by one of the nation's largest motor vehicle lenders.”
The SCRA protects servicemembers against certain civil proceedings that could affect their legal rights while they are in military service. It requires a court to review and approve any repossession if the servicemember took out the loan and made a payment before entering military service. The court may delay the repossession or require the lender to refund prior payments before repossessing. The court may also appoint an attorney to represent the servicemember, require the lender to post a bond with the court and issue any other orders it deems necessary to protect the servicemember. By failing to obtain court orders before repossessing motor vehicles owned by protected servicemembers, Wells Fargo prevented servicemembers from obtaining a court’s review of whether their repossessions should be delayed or adjusted to account for their military service.
The settlement covers repossessions that occurred between Jan. 1, 2008 and July 1, 2015. The agreement requires Wells Fargo to pay $10,000 to each of the affected servicemembers, plus any lost equity in the vehicle with interest. Wells Fargo also must repair the credit of all affected servicemembers. Wells Fargo sent payments to many of the affected servicemembers in August 2016. Wells Fargo will locate additional victims and distribute payments through this settlement in the upcoming months, at no cost to the servicemembers. The agreement also requires Wells Fargo to pay a $60,000 civil penalty to the United States and to determine, in the future, whether any vehicle it is planning to repossess is owned by an active duty servicemember. If so, Wells Fargo will not repossess the vehicle without first obtaining a court order. The agreement also contains provisions ensuring that all eligible servicemembers will receive the benefit of the SCRA’s six percent interest rate cap on their auto loans.
The department’s enforcement of the SCRA and other fair lending laws is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section. Since 2010, the division has provided over $1.5 billion in monetary relief for individual borrowers and affected communities through its enforcement of the Fair Housing Act, the Equal Credit Opportunity Act and the SCRA. The SCRA provides protections for active duty servicemembers in areas such as evictions, rental agreements, security deposits, prepaid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance and income tax payments. For more information about the department’s SCRA enforcement, please visit www.servicemembers.gov. Servicemembers and their dependents who believe that their rights under SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at legalassistance.law.af.mil/content/locator.php.
Wells Fargo Complaint Wells Fargo Consent OrderJustice Department Reaches $4 Million Settlement with Wells Fargo Dealer Services for Illegally Repossessing Servicemembers’ CarsRead the Press Release
LOS ANGELES – The Justice Department announced today that Wells Fargo Bank N.A., doing business as Wells Fargo Dealer Services, has agreed to change its policies and pay over $4.1 million to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA) by repossessing 413 cars owned by protected servicemembers without obtaining a court order.
The settlement, which is still subject to court approval, was filed in the U.S. District Court for the Central District of California. The department launched an investigation after it received a complaint in March 2015 from the U.S. Army’s Legal Assistance Program alleging that Wells Fargo had repossessed Army National Guardsman Dennis Singleton’s used car in Hendersonville, North Carolina, while he was preparing to deploy to Afghanistan to fight in Operation Enduring Freedom. After Wells Fargo repossessed the car, it sold it at a public auction and then tried to collect a deficiency balance of over $10,000 from Singleton and his family. In October 2014, while seeking assistance with debt consolidation, Army National Guardsman Singleton met with a National Guard attorney, who informed him of his rights under the SCRA. The attorney requested information from Wells Fargo about the original loan and repossession, and asked for copies of the correspondence and payment history. The attorney never received a response from Wells Fargo. The department’s subsequent investigation corroborated Singleton’s complaint and found a pattern of unlawful repossessions spanning over more than seven years.
“We all have an obligation to ensure that the women and men who serve our country in the Armed Forces are afforded all of the rights they are due,” said U.S. Attorney Eileen M. Decker of the Central District of California. “Wells Fargo failed in that obligation. The settlement announced today, however, vindicates the rights of our servicemembers and will help ensure better lending practices in the future by one of the nation's largest motor vehicle lenders.”
“Wells Fargo Bank unlawfully repossessed hundreds of servicemembers’ cars without the proper process, and the bank will now rightfully pay for its violations,” said Principal Deputy Associate Attorney General Bill Baer. “The Justice Department is committed to protecting our country’s servicemembers as they continue to fight for our freedom.”
“Auto lenders cannot repossess the cars of the brave men and women who risk their lives to defend our freedom without providing them the required legal protections under the SCRA,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “I commend Wells Fargo for owning up to its shortcomings and providing all the information we requested after learning of our investigation. This settlement should help ensure that servicemembers are not penalized financially for protecting our nation.”
The SCRA protects servicemembers against certain civil proceedings that could affect their legal rights while they are in military service. It requires a court to review and approve any repossession if the servicemember took out the loan and made a payment before entering military service. The court may delay the repossession or require the lender to refund prior payments before repossessing. The court may also appoint an attorney to represent the servicemember, require the lender to post a bond with the court and issue any other orders it deems necessary to protect the servicemember. By failing to obtain court orders before repossessing motor vehicles owned by protected servicemembers, Wells Fargo prevented servicemembers from obtaining a court’s review of whether their repossessions should be delayed or adjusted to account for their military service.
The settlement covers repossessions that occurred between Jan. 1, 2008 and July 1, 2015. The agreement requires Wells Fargo to pay $10,000 to each of the affected servicemembers, plus any lost equity in the vehicle with interest. Wells Fargo also must repair the credit of all affected servicemembers. Wells Fargo sent payments to many of the affected servicemembers in August 2016. Wells Fargo will locate additional victims and distribute payments through this settlement in the upcoming months, at no cost to the servicemembers. The agreement also requires Wells Fargo to pay a $60,000 civil penalty to the United States and to determine, in the future, whether any vehicle it is planning to repossess is owned by an active duty servicemember. If so, Wells Fargo will not repossess the vehicle without first obtaining a court order. The agreement also contains provisions ensuring that all eligible servicemembers will receive the benefit of the SCRA’s six percent interest rate cap on their auto loans.
The department’s enforcement of the SCRA and other fair lending laws is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section. Since 2010, the division has provided over $1.5 billion in monetary relief for individual borrowers and affected communities through its enforcement of the Fair Housing Act, the Equal Credit Opportunity Act and the SCRA. The SCRA provides protections for active duty servicemembers in areas such as evictions, rental agreements, security deposits, prepaid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance and income tax payments. For more information about the department’s SCRA enforcement, please visit www.servicemembers.gov. Servicemembers and their dependents who believe that their rights under SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at legalassistance.law.af.mil/content/locator.php.
In June of this year, U.S. Attorney Eileen M. Decker announced the formation of a Civil Rights Section focused on affirmative civil enforcement and outreach within the Civil Division of the U.S. Attorney’s Office. https://www.justice.gov/usao-cdca/pr/us-attorney-eileen-decker-announces-formation-civil-rights-section-focused-affirmative More information on the new Section can be found here https://www.justice.gov/usao-cdca/civil-division/civil-rights.
New Indictment Charges West L.A. Pharmacy and its Owners with Drug Trafficking and Using Stolen Identities to Conceal the OffenseRead the Press Release
LOS ANGELES – A federal grand jury has issued a superseding indictment that charges a West Los Angeles pharmacy and its owners with operating a years-long narcotic drug trafficking, money laundering, and tax fraud conspiracy.
Under the new indictment, Brentwood residents Berry Kabov, 45, and his brother Dalibor Kabov (also known as “Dabo”), 33, are charged with operating Global Compounding Pharmacy for the purpose “of concealing and growing” their conspiracy to profit from black market sales of narcotics including oxycodone (best known by the brand name OxyContin), hydromorphone (also known as Dilaudid), and hydrocodone (commonly known as Vicodin or Norco).
The prior indictment, as further detailed in a search warrant unsealed on October 1, 2015, charged the Kabov brothers with using Los Angeles as a base to sell bulk shipments of prescription drugs – including oxycodone, which is commonly sold under the brand name OxyContin – to black market customers across the country. Investigators seized parcels containing thousands of hidden oxycodone pills that the Kabov brothers attempted to ship to black market customers in and around Columbus, Ohio, according to the search warrant affidavit, which states that the customers in turn made cash deposits into Kabov-controlled bank accounts or simply shipped bulk cash to the brothers in Southern California.
The new indictment charges that, to conceal those black market drug sales, the Kabovs would use the pharmacy to “generate records” falsely showing that prescriptions “had been filled in the names of identity theft victims, that is, persons who did not in fact receive or fill” the prescriptions. Similarly, the new indictment charges that, from June 2012 through December 2014, the pharmacy ordered nearly 100,000 pills of oxycodone, yet its reported prescription records only account for half of those pills, resulting in a shortfall of more than 45,000 pills of unaccounted oxycodone, along with parallel disparities for the pharmacy’s orders of other narcotic drugs.
“These defendants are charged with using their pharmacy to vastly increase the volume of their drug dealing and multiple bank accounts to hide their illicit proceeds from federal authorities,” said United States Attorney Eileen M. Decker. “Prescription drug abuse is an epidemic in this country that causes harm and in some cases death, and these defendants’ use of their pharmacy in the scheme increased significantly the amount of these types of drugs on the street, posing a serious danger to the community.”
The indictment also charges the Kabovs with laundering more than $1 million in unlawful cash proceeds, which the Kabov brothers attempted to conceal in structured cash deposits into multiple bank accounts that they controlled. New tax counts added to the indictment also charge that the Kabovs falsely underreported this income to the IRS in tax years 2012 through 2014.
“Law enforcement agencies throughout the country are seizing record amounts of heroin and other opioids and first responders are witnessing the devastating effects of these substances in numbing proportions,” said DEA Special Agent in Charge John S. Comer. “DEA will continue to target the illicit trafficking organizations responsible for these detriments, but we’re also committed to educating the public about the dangers of drug misuse and reducing demand – awareness is a crucial element in combatting this epidemic.”
In addition to the charges related to oxycodone and other narcotic drugs, the indictment alleges that the brothers illegally imported anabolic steroids purchased from a wholesale drug distributor located in Hubei, China. The indictment details how the brothers used the pharmacy to illegally order bulk quantities of testosterone, oxandrolone, and nandrolone.
If convicted of the charges in the indictment, Berry Kabov faces a 479-year maximum prison term and Dalibor Kabov faces a 485-year maximum prison term.
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.
The investigation into the Kabov brothers and Global Compounding is being conducted by the Drug Enforcement Administration, the Internal Revenue Service – Criminal Investigation, the United States Postal Inspection Service, the Los Angeles Police Department, and the California Board of Pharmacy.
The case is being prosecuted by Assistant United States Attorneys Benjamin Barron and Ryan Weinstein of the Organized Crime Drug Enforcement Task Force.
Illinois Man Pleads Guilty to Hacking Apple iCloud and Gmail Accounts Belonging to More Than 300 People, including Many CelebritiesRead the Press Release
CHICAGO – An Illinois man pled guilty yesterday to felony computer hacking related to a phishing scheme that gave him illegal access to over 300 Apple iCloud and Gmail accounts, including those belonging to members of the entertainment industry in Los Angeles.
Edward Majerczyk, 28, who resides in Chicago and Orland Park, Illinois, was charged on July 1 in a criminal information filed in United States District Court in Los Angeles. Pursuant to a plea agreement, Majerczyk pled guilty yesterday in United States District Court in Chicago to a felony violation of the Computer Fraud and Abuse Act, specifically, one count of unauthorized access to a protected computer to obtain information.
The court set Majerczyk’s sentencing hearing for January 10, 2017. At the time of sentencing, Majerczyk will face a statutory maximum sentence of five years in federal prison.
“This defendant invaded the privacy of hundreds of victims, stealing extremely personal data,” said United States Attorney Eileen M. Decker. “Defendant’s violation of federal law harmed both his individual victims, whose private matters were unknowingly exposed to the defendant, and the Internet Service Providers, which were entrusted with the victims’ personal data and forced to remediate defendant’s intrusions.”
According to the factual basis in the plea agreement, from November 23, 2013 through August 2014, Majerczyk engaged in a phishing scheme to obtain usernames and passwords for his victims. He sent e-mails to victims that appeared to be from security accounts of internet service providers that directed the victims to a website that would collect the victims’ usernames and passwords. After victims responded by entering information at that website, Majerczyk had access to victims’ usernames and passwords. After illegally accessing the iCloud and Gmail accounts, Majerczyk obtained personal information including sensitive and private photographs and videos, according to his plea agreement.
“The defendant's acceptance of responsibility for his role in the intrusion of his victims' accounts and their personal lives is a welcome development in this continuing investigation," said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “All of us who use personal phones or devices must protect our data with strong passwords and two-factor authentication, as well as to be cautious of solicitations that can compromise our private information."
The charge against Majerczyk stems from the investigation into the leaks of photographs of numerous female celebrities in September 2014 known as “Celebgate.” However, investigators have not uncovered any evidence linking Majerczyk to the actual leaks. Many of Majerczyk’s victims were members of the entertainment industry in Los Angeles. Majerczyk accessed at least 300 accounts, and at least 30 accounts belonging to celebrities.
The case against Majerczyk is the product of an investigation by the Federal Bureau of Investigation in Los Angeles. The case was brought by Assistant United States Attorneys Ryan White and Vicki Chou of the Los Angeles United States Attorney’s Office.
Federal Jury Convicts Man Who Took over $1.5 Million from Distressed Homeowners in Bogus Loan Modification SchemeRead the Press Release
SANTA ANA, California – An Orange County man who deceived distressed homeowners with false promises that he could help them avoid foreclosure by obtaining modifications to their mortgages – or even completely eliminating their loans – was convicted today on federal fraud charges.
Antonio Marquette, who went by “Alan Le” and “Anthony Le,” 56, of Midway City, was convicted this afternoon in United States District Court in Santa Ana of nine counts of mail fraud, one count of wire fraud, and one count of money laundering. Marquette was taken into custody after the verdicts were taken, and United States District Judge Andrew J. Guilford set the sentencing hearing for January 30, 2017, at which time Marquette will face a statutory maximum sentence of 220 years.
According to evidence at trial, Marquette operated Bolsa Marketing Group in Garden Grove in 2010 and 2011 and charged homeowners up to $100,000 in cash for services that the homeowners did not receive. Through Bolsa Marketing, Marquette ran a scheme that targeted distressed homeowners, most of whom were members of Vietnamese communities in Southern California, the Bay Area and Houston, and induced them to pay large up-front fees to obtain mortgage relief services.
“This defendant was convicted today of victimizing vulnerable homeowners who were desperate to avoid foreclosure of their homes,” said United States Attorney Eileen M. Decker. “While the defendant convinced his victims to pay exorbitant fees with lofty, false promises, he in fact did nothing to help them, and many victims subsequently lost their homes.”
The evidence showed that Marquette operated the scheme by “falsely promising homeowners mortgage loan modifications that would substantially reduce their mortgage payments, avoid foreclosure, or eliminate their mortgage loans entirely.” The trial evidence further showed that Marquette took in more than $1.5 million from victim-homeowners.
As part of the scheme, Marquette made various promises to homeowners, including making guarantees that he could reduce their outstanding debt to 25 percent of the loan balance in only four months. Marquette also sent fraudulent checks to “pay off” mortgages and filed bogus documents with county recorders’ offices, according to court documents.
“The defendant operated this affinity scheme by targeting Vietnamese homeowners with false promises via Vietnamese-language radio advertisements, which added a veneer of legitimacy to his scheme,” said Deirdre Fike the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Homeowners are encouraged to thoroughly research solicitations, including those advertised through the media, before placing their trust and their money with anyone in advance of receiving services.”
The case against Marquette was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant United States Attorney Greg Staples.
British Man Who Came to U.S. to Have Sex with Pre-Teen Boys Pleads Guilty and Agrees to 13-Year SentenceRead the Press Release
LOS ANGELES – A British man who traveled to the Coachella Valley to have sex with pre-teen boys pleaded guilty today to transportation of child pornography and agreed to a 13-year prison sentence.
Paul Charles Wilkins, 70, of Littleport in East Cambridgeshire, England, a dual United States-United Kingdom citizen, was charged earlier this year in a four-count indictment for traveling with the intent to engage in illicit sexual conduct, attempted sex trafficking of children, transportation of child pornography, and possession of child pornography.
During the guilty plea hearing, Wilkins admitted that he traveled to the United States from the United Kingdom in January 2016 for the purpose of having sex with two brothers, 10 and 12 years old. Wilkins also admitted that in February 2016 he attempted to solicit a 9-year-old boy for anal intercourse in exchange for $250 at an apartment he had rented. In addition, Wilkins admitted he possessed child pornography on his computer and brought child pornography from the United Kingdom into the United States, including graphic sexual images of boys between the ages of 5 and 8 years old. Under the plea agreement filed in advance of Wilkins’s guilty plea hearing, Wilkins agreed to a sentence of 13 years’ imprisonment and a lifetime of supervised release.
“This defendant’s conduct was extremely dangerous,” said United States Attorney Eileen M. Decker. “He sought to have sex with another boy immediately after his original arrangements to have sex with the two pre-teen boys fell apart. It is critical, therefore, that today’s guilty plea will keep defendant in prison for well-over a decade.”
Wilkins, who has been ordered held without bond, is currently scheduled to be sentenced before United States District Judge Dolly M. Gee on January 11, 2017.
“This defendant learned firsthand the fate that awaits predators who come to this country to sexually exploit our children,” said Joseph Macias, special agent in charge for U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Los Angeles. “HSI special agents continue to work tirelessly to identify individuals who’re engaged in this reprehensible practice and ensure they’re held accountable for their actions. Above all, our collaborative efforts have prevented countless children from falling prey to these traveling pedophiles, who wrongly believe that purchasing an airline ticket and boarding a plane puts them out of the reach of the law.”
The investigation into Wilkins was conducted by special agents with U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI). The case was prosecuted by Assistant United States Attorney Christina T. Shay.
Lancaster Man Sentenced and Ordered to Pay More Than $1 Million for Illegally Uploading Screeners of ‘The Revenant’ and ‘The Peanuts Movie’Read the Press Release
LOS ANGELES – A Lancaster man was sentenced yesterday in federal court for criminal copyright infringement for illegally posting screener versions of two movies – “The Revenant” and “The Peanuts Movie” – to a publicly accessible website. As a result of the illegal upload, “The Revenant” was available for download six days before its limited release in theaters and more than 1 million people were able to download the film within a six-week period, which caused Twentieth Century Fox Film Corporation to suffer losses of well over $1 million.
William Kyle Morarity, 31, who used the screen name “clutchit,” pled guilty earlier this year to felony copyright infringement and was sentenced this week by United States District Court Judge Stephen V. Wilson to eight months’ home detention and 24 months’ probation. He was also ordered to pay $1.12 million in restitution to Twentieth Century Fox.
Morarity agreed to assist the FBI in the production of a public service announcement to assist the government in educating the public about the harms of copyright infringement and the illegal uploading of movies that are the legal property of the movie studio.
Morarity obtained the screeners without authorization while at work on a studio lot. He copied the screeners onto a portable drive and uploaded the movies from his home computer on December 17 and 19, 2015, to a BitTorrent website called “Pass the Popcorn,” which allowed downloading via a peer-to-peer network.
“The film industry creates thousands of jobs in Southern California,” said United States Attorney Eileen M. Decker. “The defendant’s illegal conduct caused significant harm to the victim movie studio. The fact that the defendant stole these films while working on the lot of a movie studio makes his crime more egregious.”
"Mr. Morarity used his position of trust to gain access to sensitive intellectual property, then shared that content online and incurred large-scale losses to the owner of that property," said Deirdre Fike, the Assistant Director in Charge of the FBI's Los Angeles Field Office. "The theft of intellectual property - in this case, major motion pictures - discourages creative incentive and affects the average American making ends meet in the entertainment industry."
The case against Morarity was investigated by the Federal Bureau of Investigation and prosecuted by Assistant United States Attorney Jennie Wang.
Defendant in Los Angeles-Area Synthetic Drug Ring Sentenced to 16 Months in Federal Prison for Manufacture and Distribution of ‘Spice’Read the Press Release
LOS ANGELES – A Glendale man has been sentenced to 16 months in federal prison for his role in the large-scale manufacture and distribution of synthetic drugs that are commonly called “spice.”
Yesterday afternoon, Faisal Iqbal, 34, one of 16 defendants arrested in connection with a synthetic drug ring operating out of Los Angeles, was sentenced by U.S. District Court Judge Manuel L. Real. Iqbal and his co-conspirators were charged with conspiring to manufacture and distribute synthetic cannabinoids, which are designed to mimic the effects of THC, the psychoactive agent in marijuana, and with structuring financial transactions. Iqbal pled guilty to conspiracy to distribute synthetic cannabinoids and to structuring a financial transaction to avoid a reporting requirement.
“Although these are called ‘synthetic’ drugs, the dangers they pose are very real,” said United States Attorney Eileen M. Decker. “Without controls on the ingredients and manufacture of these drugs, the defendant’s products could cause severe harm to users, including death.”
Over the past several years, the DEA has identified more than 400 new designer drugs in the United States – most of which are manufactured in rogue labs in China and sold on the Internet or in retail outlets such as smoke shops, gas station convenience stores and bodegas. These substances are generally sold in brightly colored packaging, marketed to young people, and billed as “safe” alternatives to marijuana or dangerous party drugs such as MDMA (ecstasy). The synthetic drugs are commonly marked with the disclaimer “not for human consumption” and/or “DEA compliant” which is an attempt to shield distributors from prosecution. Abuse of these psychoactive substances has resulted in increasing numbers of overdose incidents, emergency room visits and even deaths.
A total of 16 defendants were charged in three separate indictments with manufacturing and distributing synthetic cannabinoids. The chemicals are mixed with agents – often acetone – to create a mixture that is sprayed onto plant material – typically marshmallow leaf or damania leaf – to create synthetic marijuana, which is commonly referred to as “spice” or “herbal incense.” Such synthetic cannabinoids are smoked or orally ingested, and are referred to in three indictments as smokable synthetic cannabinoids (SSCs). The SSCs discussed in the indictment were sold under brand names that included “Sexy Monkey,” “Crazy Monkey,” “Scooby Snax,” “Bizarro” and “Mad Hatter.”
The case was investigated by agents from the Drug Enforcement Administration and prosecuted by Assistant United States Attorney Karen Escalante.
More information about synthetic designer drugs can be found on the Drug Fact Sheets at www.DEAdiversion.usdoj.gov.
American Living in Australia Charged in Securities Fraud Case Involving Scheme to Fraudulently Inflate by Nearly $100 Million the Cost of Santa Monica Software Company Being Purchased by Computer Sciences Corp.Read the Press Release
LOS ANGELES – A former executive at Commonwealth Bank of Australia (CBA) was charged today in federal court with participating in a scheme to fraudulently generate revenue for a software company that was being purchased by Computer Sciences Corporation (CSC), which was misled into paying a $98 million incentive bonus as a result of the scheme.
Keith Hunter, 62, of Surrey Hills, Australia, a United States citizen who was the executive general manager in charge of infrastructure and operations at CBA, was named in a two-count criminal information filed this morning. The information charges Hunter with two counts – conspiracy to commit securities fraud and wire fraud, and wire fraud.
The information alleges a scheme in which Hunter and several co-conspirators in Australia and the United States developed a plan to defraud CSC by inflating revenues for a Santa Monica-based company that CSC was purchasing – ServiceMesh, Inc., which provided cloud computer management software. In the scheme, members of the conspiracy in late 2013 and early 2014 caused CBA to purchase $10 million in goods and services from ServiceMesh. According to the court documents filed today, CBA employees, including Hunter, received undisclosed kickbacks from a senior executive of ServiceMesh in exchange for awarding the $10 million in contracts to ServiceMesh.
“Schemes like the one charged today compromise the integrity of our financial system, and this defendant’s fraud caused significant harm to CSC and its shareholders, all for his own personal profit,” said United States Attorney Eileen M. Decker. “Everyone who invests in American companies, especially American workers investing their hard-earned money directly or through a retirement plan, deserves protection from this kind of fraud.”
Solely as a result of the scheme described in the information, ServiceMesh reached a performance goal that triggered CSC to pay a $98 million “earnout payment” to ServiceMesh shareholders in March 2014. The information alleges that a portion of the “earnout payment” received by the senior executive of ServiceMesh who was involved in the scheme funded the kickbacks paid to CBA employees, including payments to Hunter of approximately $630,000.
“This scheme resulted in CSC, a publicly traded company, overpaying $98 million dollars to purchase ServiceMesh. Today's announcement sends a clear message to executives that accepting bribes with the intent to inflate revenue and generate a business advantage is a crime with serious consequences," said Deirdre Fike, the Assistant Director in Charge of the FBI's Los Angeles Field Office. "International boundaries do not limit the FBI from working with our foreign and domestic partners to hold accountable individuals who engage in commercial bribery and securities fraud."
The scheme allegedly caused CSC to suffer nearly $100 million in losses when it made the unwarranted earnout payment that followed a base payment of $163 million for ServiceMesh.
Hunter has pleaded guilty and is currently pending sentencing on bribery charges in an Australian court. Authorities in the United States expect Hunter to face the charges filed today after he completes any sentence he receives in Australia.
An information contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty in court.
The two counts in the information together carry a statutory maximum penalty of 45 years in federal prison.
The United States Securities and Exchange Commission today filed a civil complaint against Hunter charging him with securities fraud, along with a consent and proposed judgment.
The United States Attorney’s Office would like to thank the New South Wales Police Force, Fraud and Cybercrime Squad, in Australia for its assistance in this investigation.
The case against Hunter is the product of an ongoing investigation by the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorneys Stephen A. Cazares and Ann C. Kim of the Major Frauds Section.
Orange County Man Sentenced to 30 Years in Federal Prison for Conspiring to Join ISIL and Engaging in FraudRead the Press Release
SANTA ANA, CALIFORNIA – An Orange County man who attempted to travel to the Middle East to join the Islamic State of Iraq and the Levant (ISIL) was sentenced this afternoon to 30 years in federal prison for conspiring and attempting to provide material support to the terrorist organization.
United States District Judge David O. Carter imposed the sentence on defendant Nader Elhuzayel, 25 of Anaheim, following a two-week federal trial that ended in June when a federal jury returned guilty verdicts against Elhuzayel and co-defendant Muhanad Badawi after deliberating for just over an hour. When imposing sentence, Judge Carter said of Elhuzayel, “There’s no remorse, no repudiation of ISIL, only death and destruction.” Judge Carter also commented that the fact that the defendant made repeated calls for martyrdom “makes [him] especially dangerous.” In addition to the 360-month sentence, Judge Carter ordered supervised release for life.
In addition to the terrorism counts, the jury also found Elhuzayel guilty of committing 26 counts of bank fraud and found Badawi guilty of one count of financial aid fraud.
“Today’s sentence reflects the gravity of the defendant’s plan to betray his country and join a terrorist organization dedicated to the murder of innocent individuals,” said United States Attorney Eileen M. Decker. “As this case shows, the ability of individuals with the desire to support ISIL to use the Internet and social media to conspire with each other poses a grave threat to our national security. So-called ‘foreign fighters’ like this defendant pose a serious danger both overseas and here at home. There can be no doubt that law enforcement’s disruption of their plans saved lives, both in the United States and abroad.”
The evidence at trial showed Elhuzayel and Badawi used social media to discuss ISIL and terrorist attacks, expressed a desire to die as martyrs, and made arrangements for Elhuzayel to leave the United States to join ISIL. In recorded conversations, Elhuzayel and Badawi discussed how “it would be a blessing to fight for the cause of Allah, and to die in the battlefield,” and they referred to ISIL as “we.”
The trial evidence also showed that Elhuzayel used social media to communicate with ISIL supporters and operatives, to disseminate pro-ISIL information, and to assist ISIL supporters by distributing social media account information for those whose accounts had been suspended. Elhuzayel maintained a Facebook account with the ISIL flag as his profile picture. He used the account to ask Allah to grant him martyrdom and success in leaving the United States to fight for his cause and to ask Allah to “destroy your enemies and give the Islamic state victory.” Badawi also had a Facebook account, on which he made posts that supported ISIL and violence aimed at non-Muslims, and he indicated that he intended to join the terrorist organization.
According to the trial exhibits, on October 21, 2014, defendant Badawi made a video of defendant Elhuzayel swearing allegiance to the leader of ISIS, Abu Bakr al-Baghdadi. In the video, Elhuzayel pledged to travel to join ISIS to be a fighter for the organization, according to court documents.
The evidence at trial further showed that, on the day of the May 3, 2015, attack in Garland, Texas, Elhuzayel received social media communications from Elton Simpson, one of the perpetrators of the attack, and that Elhuzayel wrote to Simpson “I love you for the sake of Allah brother may Allah grant you Jannat al ferdaus [the highest level of Paradise reserved for martyrs].” In addition, Elhuzayel received and disseminated social media communications from ISIL operative Abu Hussain al Britani, also known as Junaid Hussain, including communications trumpeting the Garland, Texas, shootings. On May 7, 2015, four days after the Garland shootings, Elhuzayel and Badawi made travel arrangements and purchased Elhuzayel’s plane ticket to join ISIL.
Both Elhuzayel and Badawi were arrested on May 21, 2015, as Elhuzayel attempted to board a plane at Los Angeles International Airport to travel to Turkey to join ISIL. Badawi had purchased a one-way ticket on Turkish Airlines for Elhuzayel to travel to Israel, with a layover in Istanbul. In an interview with the FBI, Elhuzayel admitted that he intended to deplane in Turkey and seek contacts to facilitate joining ISIL.
“The defendant pledged allegiance to an avowed enemy of the United States and carried out a significant bank fraud scheme to fund his plans to join the terrorist group, which calls for the murder of Americans” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Office. “The efforts by the Joint Terrorism Task Force in thwarting this horrible plot cannot be overstated, and I commend federal prosecutors in bringing this defendant to justice.”
Elhuzayel was also convicted of obtaining cash through a scheme to defraud three different banks by depositing stolen checks into his personal checking accounts and then withdrawing cash at branch offices and ATMs in Orange County. The money generated from the bank fraud was intended to finance his travel to Syria to join ISIL.
Both men have been held in federal custody without bond since their arrests.
Judge Carter is scheduled to sentence Badawi on October 17 at which time he will face a statutory maximum sentence of 35 years in federal prison.
The investigation in this case was conducted by the FBI’s Joint Terrorism Task Force in Orange County, which includes the following agencies: the Anaheim Police Department, the California Highway Patrol, the Orange County Sheriff’s Department, the Orange County Intelligence Assessment Center, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the United States Secret Service, IRS – Criminal Investigation, the City of Orange Police Department, the Irvine Police Department, the Naval Criminal Investigative Service, the Orange County Regional Computer Forensics Laboratory, the United States Attorney’s Office, and the Federal Bureau of Investigation. The Department of Education’s Office of Inspector General provided significant assistance in the investigation and at trial.
The case was prosecuted by Assistant United States Attorneys Judith A. Heinz and Deirdre Z. Eliot of the Terrorism and Export Crimes Section, and Julius J. Nam of the General Crimes Section, with substantial assistance from Trial Attorney Michael Dittoe of the Justice Department’s Counterterrorism Section.
California Man Sentenced to 30 Years for Conspiring to Join ISIL and Engaging in FraudRead the Press Release
WASHINGTON – Nader Elhuzayel, 25, of Anaheim, California, was sentenced to 30 years in prison with a lifetime of supervised release for conspiring and attempting to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, and other federal offenses.
Assistant Attorney General John P. Carlin and U.S. Attorney Eileen M. Decker for the Central District of California made the announcement after Elhuzayel was sentenced by U.S. District Judge David O. Carter.
“Nader Elhuzayel was arrested while attempting to travel overseas to join ISIL. With this sentence, he is being held accountable for conspiring and attempting to provide material support to the designated terrorist organization, and other federal offenses,” said Assistant Attorney General Carlin. “The National Security Division’s highest priority is countering terrorist threats, and we will continue to work to stem the flow of foreign fighters abroad and bring to justice those who attempt to provide material support to designated foreign terrorist organizations.”
On June 21, 2016, a federal jury convicted Elhuzayel and co-defendant Muhanad Badawi, 24, also of Anaheim, of conspiring to provide material support to ISIL. Elhuzayel was also found guilty of attempting to provide material support and Badawi was found guilty of aiding and abetting the attempt to provide material support to ISIL. In addition to the terrorism-related counts, Elhuzayel was found guilty of 26 counts of bank fraud and Badawi was found guilty of one count of federal financial aid fraud. Judge Carter is scheduled to sentence defendant Badawi on October 17.
“Today’s sentence reflects the gravity of the defendant’s plan to betray his country and join a terrorist organization dedicated to the murder of innocent individuals,” said United States Attorney Eileen M. Decker. “As this case shows, the ability of individuals with the desire to support ISIL to use the Internet and social media to conspire with each other poses a grave threat to our national security. So-called ‘foreign fighters’ like this defendant pose a serious danger both overseas and here at home. There can be no doubt that law enforcement’s disruption of their plans saved lives, both in the United States and abroad.”
The evidence at trial showed Badawi and Elhuzayel used social media to discuss ISIL and terrorist attacks, expressed a desire to die as martyrs, and made arrangements for Elhuzayel to travel abroad to join ISIL. In recorded conversations, Badawi and Elhuzayel discussed how “it would be a blessing to fight for the cause of Allah, and to die in the battlefield,” and they referred to ISIL as “we.”
Badawi also had a Facebook account where he made posts that supported ISIL and violence aimed at non-Muslims, and indicated that he intended to join the terrorist organization. Elhuzayel used social media to communicate with ISIL supporters and operatives, to disseminate pro-ISIL information and to assist ISIL supporters by distributing social media information to those whose accounts had been suspended. Elhuzayel also maintained a Facebook account with the ISIL flag as his profile picture. He used the account to ask Allah to grant him martyrdom and success in leaving U.S. to fight for his cause and to ask Allah to “destroy your enemies and give the Islamic state victory.”
According to the trial exhibits, on Oct. 21, 2014, Badawi made a video of Elhuzayel swearing allegiance to the leader of ISIL, Abu Bakr al-Baghdadi. In the video, Elhuzayel pledged to travel to join ISIL to be a fighter for the terrorist organization.
Evidence at trial also showed that on May 3, 2015, the day of the attack in Garland, Texas, Elhuzayel received social media communications from Elton Simpson, one of the perpetrators of the attack, and that Elhuzayel wrote to Simpson “I love you for the sake of Allah brother may Allah grant you Jannat al ferdaus [the highest level of Paradise reserved for martyrs].”
In addition, Elhuzayel received and disseminated social media communications from ISIL operative Abu Hussain al Britani, also known as Junaid Hussain, including communications trumpeting the Garland, Texas, shootings. On May 7, 2015, four days after the Garland shootings, Elhuzayel and Badawi made travel arrangements and purchased Elhuzayel’s plane ticket to join ISIL.
Both Elhuzayel and Badawi were arrested on May 21, 2015, as Elhuzayel attempted to board a plane at Los Angeles International Airport to travel to Turkey to join ISIL. Badawi had purchased a one-way ticket on Turkish Airlines for Elhuzayel to travel to Israel, with a layover in Istanbul. In an interview with the FBI, Elhuzayel admitted that he intended to deplane in Turkey and seek contacts to facilitate joining ISIL.
Elhuzayel was also convicted of obtaining cash through a scheme to defraud three different banks by depositing stolen checks into his personal checking accounts and then withdrawing cash at branch offices and ATMs in Orange County. The money generated from the bank fraud was intended to finance his travel to Syria to join ISIL. Both men have been held in federal custody without bond since their arrests.
Badawi is scheduled to be sentenced on October 17 at which time he will face a statutory maximum sentence of 35 years in federal prison.
The investigation in this case was conducted by the FBI’s Joint Terrorism Task Force in Orange County, which includes the following agencies: the Anaheim Police Department, the California Highway Patrol, the Orange County Sheriff’s Department, the Orange County Intelligence Assessment Center, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the U.S. Secret Service, IRS – Criminal Investigation, the City of Orange Police Department, the Irvine Police Department, the Naval Criminal Investigative Service, the Orange County Regional Computer Forensics Laboratory, the U.S Attorney’s Office, and the FBI. The Department of Education’s Office of Inspector General provided significant assistance in the investigation and at trial.
The case was prosecuted by Assistant U.S. Attorneys Judith A. Heinz, Deirdre Z. Eliot and Julius J. Nam of the Central District of California, with substantial assistance from Trial Attorney Michael Dittoe of the National Security Division’s Counterterrorism Section.
Los Angeles Jury Convicts Medical Clinic Owner for Health Care Fraud and Tax FraudRead the Press Release
LOS ANGELES – A federal jury in Los Angeles has convicted the owner of a medical clinic for his role in a health care fraud scheme and for filing false income tax returns.
Michael Huynh, 57, of Encino, was convicted yesterday of one count of conspiracy to commit health care fraud and 11 counts of filing false tax returns after a seven-day trial before United States District Judge Otis D. Wright II. Huynh will be sentenced on January 30, 2017.
Evidence introduced at trial showed that Huynh, the office manager and part-owner of a medical clinic, provided false prescriptions to a pharmacist and co-conspirator, Farhad N. Dany Sharim, who submitted false claims to insurance companies for drugs that were never dispensed. Once Sharim received payments from the insurance companies, he paid Huynh for the false prescriptions. Trial evidence also showed that, between January 2004 and November 2009, Huynh received 82 checks from Sharim totaling over $1.1 million. Huynh filed false federal tax returns for tax years 2007 through 2011 that underreported by over $1.6 million in total the medical clinic’s gross receipts and sales on the corporate tax returns and income on the individual tax returns.
“This defendant played an integral role in a health care fraud scheme that netted over $1 million for drugs that were never prescribed or delivered,” said United States Attorney Eileen M. Decker. “Such massive fraudulent conduct impacts everyone who seeks medical care and who pays for health insurance, since it undermines the integrity of our health care system and preys on vulnerable members of our community. For that, this defendant and his co-conspirator must be held accountable.”
Sharim pleaded guilty to one count of conspiracy to commit health care fraud on November 18, 2013, and will be sentenced on December 5.
“The defendant carried out this fraud at the expense of many, to include his own family members whose identities were used to camouflage the scheme, as well as the patients at his clinic, many of whom are immigrants and did not know their insurance was being billed by a pharmacy they did not go to by a prescribing doctor they did not see, and for medications they did not receive,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Health care fraud investigators and prosecutors did an outstanding job of delivering justice to the defendant’s victims, including the patients at his clinic and the insurance companies who suffered losses.”
“The frauds engaged in by Mr. Huynh, both income tax fraud and health care fraud, have impacted programs that Americans depend upon as a part of their daily lives. These very same frauds have resulted in Mr. Huynh’s conviction,” stated IRS-Criminal Investigation Acting Special Agent in Charge Anthony J. Orlando. “Along with our law enforcement partners, IRS-Criminal Investigation is committed to bringing those who fraudulently take advantage of our nation’s programs to justice.”
The Federal Bureau of Investigation, IRS-CI and the Office of Personnel Management’s Office of Inspector General investigated the case, which was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office of the Central District of California and the Department of Justice’s Fraud Section. Assistant United States Attorney Steven Arkow and Fraud Section Trial Attorney Alexis Gregorian prosecuted the case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,900 defendants who have collectively billed the Medicare program for more than $10 billion. In addition, the Health and Human Services Centers for Medicare & Medicaid Services, working in conjunction with the Health and Human Services’ Office of Inspector General, are taking steps to increase accountability and decrease the presence of fraudulent providers.
“This conviction should act as a warning to those who believe they can defraud the government with impunity,” said Special Agent in Charge Scott Rezendes of the Office of Personnel Management Office of Inspector General (OPM-OIG). “The OPM Office of the Inspector General is committed to holding such individuals accountable for their actions.”
At sentencing, Huynh faces a statutory maximum sentence of 38 years in federal prison – five years for the conspiracy count and three years for each of 11 tax fraud counts. Sharim faces a maximum sentence of five years in federal prison.
Justice Department and Los Angeles County Superior Court Reach Agreement to Ensure Access to Justice for Limited English Proficient IndividualsRead the Press Release
LOS ANGELES – The Justice Department today announced an agreement with the Superior Court of California, County of Los Angeles (LASC) to ensure that limited English proficient (LEP) court users will have access to timely and accurate language assistance services.
The agreement resolves a Justice Department investigation of a complaint filed by the Legal Aid Foundation of Los Angeles that alleged the LASC failed to provide LEP individuals with meaningful access to its court services, including civil proceedings and court operations. The complaint alleged a violation of Title VI of the Civil Rights Act of 1964 and its implementing regulations, which prohibit discrimination on the basis of national origin.
“The Los Angeles County Superior Court has accepted the challenge of serving the needs of limited English proficient individuals in one of the most populous and linguistically diverse areas of the country,” said United States Attorney Eileen M. Decker. “Protecting the civil rights of all people within the Central District of California is one of my top priorities as United States Attorney, and today’s agreement serves that goal by giving greater access to the judicial system to individuals so that they may protect their own rights.”
During the investigation, the LASC steadily expanded its provision of interpreter services, which now includes all criminal and the vast majority of civil proceedings, as well as oral and written language assistance in court services. The LASC has agreed to expand free interpreter services to unlimited civil matters – the last remaining case type in which language services are currently not guaranteed – by December 1, 2017. Among other commitments, the court will translate additional documents, provide broader notice about the availability of free interpreter services for court proceedings and make it easier to request an interpreter. The LASC will also continue to seek input from community partners serving LEP populations. Under the terms of the agreement, LASC will provide periodic updates to the Justice Department until the end of 2017.
“We applaud the Los Angeles County Superior Court for committing to protect the rights of all people, whatever their national origin or level of English proficiency, to participate meaningfully, fully and fairly in state court proceedings,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “Providing effective language services is essential to vindicating the civil rights of court users and safeguarding the integrity of our justice system.”
While the department’s investigation focused on the LASC, the structure of the California judicial system required the department to review policies circulated and enforced at the state level through the California Judicial Council and its staff. In a 2013 letter sent to the LASC, the Chief Justice of the California Supreme Court and the California Administrative Office of the Courts, the Justice Department identified Title VI compliance concerns, made recommendations to improve compliance and offered to work collaboratively to ensure compliance. LASC representatives helped the California Judicial Council to develop and implement the Strategic Plan for Language Access in the California Courts to ensure meaningful access to court proceedings and other court operations throughout the state’s unified court system. The Justice Department is working separately with the Judicial Council to resolve the portion of the investigation focused on statewide compliance.
This matter was jointly investigated by Assistant United States Attorney Richard Park of the Civil Division in the Central District of California and Attorney Anna Medina of the Civil Rights Division’s Federal Coordination and Compliance Section (FCS).
For more information about FCS’s State Courts Language Access Initiative, a multi-pronged initiative focused on enforcement, technical assistance, outreach, resource development and policy efforts to ensure meaningful access to state courts receiving federal financial assistance, visit www.lep.gov or view a recently released Justice Department publication, “Language Access in State Courts.” To learn more about languages spoken in California or other parts of the United States, click on the language map app available here https://www.lep.gov/maps/.
Justice Department and Los Angeles County Superior Court Reach Agreement to Ensure Access to Justice for Limited English Proficient IndividualsRead the Press Release
The Justice Department announced today it has reached an agreement with the Superior Court of California, County of Los Angeles (LASC) to ensure that limited English proficient (LEP) court users will have access to timely and accurate language assistance services.
The agreement resolves a Justice Department investigation of a complaint filed by the Legal Aid Foundation of Los Angeles. The complaint alleged that LASC failed to provide LEP individuals with meaningful access to its court services, including civil proceedings and court operations, in violation of Title VI of the Civil Rights Act of 1964 and its implementing regulations, which prohibit discrimination on the basis of national origin.
“We applaud the Los Angeles County Superior Court for committing to protect the rights of all people, whatever their national origin or level of English proficiency, to participate meaningfully, fully and fairly in state court proceedings,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “Providing effective language services is essential to vindicating the civil rights of court users and safeguarding the integrity of our justice system.”
“The Los Angeles County Superior Court has accepted the challenge of serving the needs of limited English proficient individuals in one of the most populous and linguistically diverse areas of the country,” said U.S. Attorney Eileen Decker of the Central District of California. “Protecting the civil rights of all people within the Central District of California is one of my top priorities as United States Attorney, and today’s agreement serves that goal by giving greater access to the judicial system to individuals so that they may protect their own rights.”
During the investigation, LASC steadily expanded its provision of interpreter services, which now includes all criminal and the vast majority of civil proceedings, as well as oral and written language assistance in court services. LASC has agreed to expand free interpreter services to unlimited civil matters – the last remaining case type in which language services are currently not guaranteed – by Dec. 1, 2017. Among other commitments, the court will translate additional documents, provide broader notice about the availability of free interpreter services for court proceedings and make it easier to request an interpreter. LASC will also continue to seek input from community partners serving LEP populations. Under the terms of the agreement, LASC will provide periodic updates to the Justice Department until the end of 2017.
While the department’s investigation focused on LASC, the structure of the California judicial system required the department to review policies circulated and enforced at the state level through the California Judicial Council and its staff. In a 2013 letter sent to LASC and the chief justice of the California Supreme Court, as well as to the administrative arm of the courts, the department identified Title VI compliance concerns, made recommendations to improve compliance and offered to work collaboratively to ensure compliance. LASC representatives helped the California Judicial Council to develop and implement the Strategic Plan for Language Access in the California Courts to ensure meaningful access to court proceedings and other court operations throughout the state’s unified court system. The department is working separately with the judicial council to resolve the portion of the investigation focused on statewide compliance.
This matter was jointly investigated by Attorney Anna Medina of the Civil Rights Division’s Federal Coordination and Compliance Section (FCS) and Assistant U.S. Attorney Richard Park of the Central District of California.
For more information about FCS’s State Courts Language Access Initiative, a multi-pronged initiative focused on enforcement, technical assistance, outreach, resource development and policy efforts to ensure meaningful access to state courts receiving federal financial assistance, visit www.lep.gov or view a recently released Justice Department publication, “Language Access in State Courts.” To learn more about languages spoken in California or other parts of the United States, click on the language map app available here https://www.lep.gov/maps/.
LASC Letter and Agreement
Former Employee of Sporting Goods Distributor Sentenced to over 3 Years for Embezzling nearly $370,000 from Orange County CompanyRead the Press Release
SANTA ANA, California – A former office manager for an independent sporting goods distributor has been sentenced to 37 months in federal prison for embezzling nearly $370,000 from her Los Alamitos-based employer.
Julianna James England, 51, of Cedar Rapids, Iowa, was sentenced yesterday by United States District Judge James V. Selna. In addition to the prison term, Judge Selna ordered England to pay $368,152 in restitution.
Following a trial in February, England was found guilty of three wire fraud charges for using company checks and credit cards to embezzle money from her former employer, Callan Western Sales Company (CWS).
The evidence at trial showed that England used company credit cards and wrote company checks to herself to obtain the company’s funds. As part of her scheme, she altered company records and created false bank stubs to give to the company’s accountant.
“This defendant’s embezzlement required the owners to use personal funds in an attempt to keep the company afloat, but the business was forced to close,” said United States Attorney Eileen M. Decker. “This crime had a devastating impact on the company, its owners and its employees.”
England was hired by CWS in 2000 to be a part-time secretary and office manager in charge of office administration, which included preparing checks for the signature of Michael Callan, the company’s founder. England was also in charge of maintaining the company’s check ledger, coding the payments, and providing monthly bank statements to the company’s accountant.
From March 2003 until July 2007, England wrote at least 55 checks payable to either herself or her creditors totaling more than $33,000. To cover her tracks, England wrote false notations on the check stubs to indicate payment to a legitimate company vendor. After using these checks for her personal use, she altered the company’s bank statements and provided these altered statements to the CPA.
England also used company credit cards for unauthorized expenses which totaled nearly $280,000. She used Visa and American Express credit cards issued to CWS for personal expenses and made unauthorized online payments from the company’s bank account in an attempt to conceal the unauthorized purchases.
“Ms. England used her position of trust to take advantage of a small business whose owners employed her for several years and which, ultimately, was rendered insolvent due to her criminal actions,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Agents and detectives at the FBI and the Los Alamitos Police Department should be commended for their investigation of this fraud, and for building a case for prosecutors to deliver justice to the victim company.”
England has been in custody since her conviction earlier this year.
England is also facing federal charges in the Eastern District of Arkansas for making false statements to the Social Security Administration to obtain disability benefits. She is scheduled to go on trial in that case in January.
This case was the product of an investigation by Federal Bureau of Investigation and the Los Alamitos Police Department. This case was prosecuted by Assistant United States Attorney Gregory W. Staples.
Final Defendants in Multi-Million Dollar Health Care Fraud and Money Laundering Case Sentenced to Federal Prison TermsRead the Press Release
LOS ANGELES – With the final defendant receiving a prison term yesterday, six defendants who participated in a multi-million dollar health care fraud scheme or helped launder the illicit proceeds have now been sentenced to federal prison.
Edgar Pogosian, also known as “Edgar Hakobyan,” 32, of Glendale, was sentenced yesterday to 18 months in prison. Pogosian was found guilty earlier this year of conspiring to commit money laundering and one count of money laundering.
“Over the course of nearly seven years, this defendant engaged in a wide-ranging money laundering conspiracy in which he received 150 checks and personally laundered over $700,000 in health care fraud proceeds,” said United States Attorney Eileen M. Decker. “All of the defendants in this case played a vital role in a scheme that bilked the taxpayers who finance Medicare and utilized sophisticated money laundering techniques to hide their crimes.”
Over the past month, United States District Judge Philip S. Gutierrez sentenced two other defendants involved in the scheme:
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Karen “Gary” Sarkissian, 44, also of Glendale was sentenced on September 12 to 57 months in federal prison after the same jury that convicted Pogosian found him guilty of conspiring to commit money laundering, six counts of money laundering and five counts of health care fraud; and
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L’Tanya Smith, 58, of Ladera Heights, was sentenced on August 22 to 57 months imprisonment after she pleaded guilty to five counts of health care fraud.
Pogosian and Sarkissian were found guilty in February by a federal jury following a four-week trial before Judge Gutierrez. Smith pleaded guilty on the eve of trial.
Sarkissian operated a clinic on Sunset Boulevard in Echo Park and worked there with Smith, a physician’s assistant. Between July 2009 and March 2010, Smith prescribed or ordered medically unnecessary tests and services, some of which were never provided to the patients. Those prescriptions and orders led to more than $1.2 million in fraudulent claims to Medicare from the Sunset clinic. Other providers that received referrals from the Sunset clinic submitted another $10 million in fraudulent claims to Medicare.
“Laundering money does not make the criminals clean,” said Chris Schrank, Special Agent in Charge for the U.S. Department of Health and Human Services, Office of Inspector General. “Dirty money will be tracked down, reclaimed and those responsible will pay the price. We will work to protect Medicare from illicit drains on the resources it needs to care for the nation’s most vulnerable population.”
Sarkissian also participated in a scheme that laundered the fraudulent proceeds generated through the Sunset Clinic through five bogus corporations set up by two other men, Khachatour Hakobyan (Pogosian’s uncle) and Aram Aramyan, who were previously convicted and sentenced in this case.
Hakobyan, 48, of Glendale, who prosecutors argued was the overall leader of the scheme, was sentenced in January 2016 to 57 months in prison and was ordered to pay $606,681 in restitution after he pleaded guilty to conspiring to launder health care fraud proceeds through the five sham corporations and underreporting his income from the conspiracy on his federal income tax returns. Aramyan, 60, of Glendale, was sentenced in November 2015 to 51 months in prison on similar charges and was ordered to pay $353,669 in restitution.
Hakobyan and Aramyan deposited millions of dollars in fraudulent proceeds into bank accounts for the five sham companies and then wrote checks from these corporations to themselves and their relatives, including Pogosian, who was found guilty based on evidence that he received more than $700,000 in checks from the sham corporations that he either cashed or deposited in his own bank accounts.
“Federal benefit programs such as Medicare are for the benefit of the American taxpayer, not the benefit of the common criminal,” said Anthony J. Orlando, the Acting Special Agent in Charge of IRS Criminal Investigation. “The sentences handed down to the defendants in this case demonstrates that crime costs criminals their freedom. IRS Criminal Investigation, in conjunction with our law enforcement partners, will continue to pursue and prosecute those who take advantage of programs meant for the public good.”
With these most recent sentences, six defendants have now been sentenced in relation to a health care fraud scheme related to multiple medical clinics, a durable medical equipment supplier and an independent diagnostic testing facility.
The sixth defendant, a doctor associated with one of those clinics – Claude R. Cahen, 74, of Santa Monica – pleaded guilty to conspiring to commit health care fraud and was sentenced to 12 months and one day of imprisonment in March 2016.
This case is the product of an investigation by the Federal Bureau of Investigation; the U.S. Department of Health and Human Services, Office of Inspector General; and IRS Criminal Investigation.
The case was prosecuted by Assistant United States Attorneys Cathy J. Ostiller, Kristen A. Williams and Cassie D. Palmer.
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El Departamento De Justicia Y El Tribunal Superior Del Condado De Los Ángeles Llegan A Un Acuerdo Para Garantizar La Igualdad De Acceso A La Justicia Para Personas Con Conocimientos Limitados Del InglésRead the Press Release
El Departamento de Justicia anunció hoy que llegó a un acuerdo con el Tribunal Superior de California, Condado de Los Ángeles (LASC, por sus siglas en inglés) para garantizar que los usuarios del tribunal con dominio limitado del inglés [limited English proficient (LEP)] tengan acceso a servicios oportunos y precisos de asistencia idiomática.
El acuerdo resuelve una investigación del Departamento de Justicia sobre una demanda entablada por la Legal Aid Foundation of Los Angeles. La demanda alegaba que el LASC no les brindaba a las personas con LEP un acceso significativo a sus servicios judiciales, entre ellos procedimientos civiles y operaciones judiciales, en violación del Título VI de la Ley de Derechos Civiles de 1964 y sus regulaciones de implementación, que prohíben la discriminación por motivo de origen nacional.
“Felicitamos al Tribunal Superior del Condado de Los Ángeles por comprometerse a proteger los derechos de todas las personas, sin importar su origen nacional ni su nivel de conocimientos del inglés, para que participen de manera significativa, plena y justa en los procedimientos judiciales del estado,” declaró La Secretaria de Justicia Auxiliar Adjunta Principal Vanita Gupta, Jefa de la División de Derechos Civiles del Departamento de Justicia. “Ofrecer servicios idiomáticos eficaces es esencial para reivindicar los derechos civiles de los usuarios de los tribunales y resguardar la integridad de nuestro sistema judicial.”
“El Tribunal Superior del Condado de Los Ángeles ha aceptado el desafío de satisfacer las necesidades de personas con conocimientos limitados del inglés en una de las áreas más pobladas y con mayor diversidad lingüística del país,” declaró la Fiscal Federal Eileen Decker del Distrito Central de California. “Proteger los derechos civiles de todas las personas dentro del Distrito Central de California es una de mis prioridades principales como Fiscal Federal, y el acuerdo de hoy contribuye a ese objetivo al darles mayor acceso al sistema judicial a las personas para que puedan proteger sus propios derechos.”
Durante la investigación, el LASC expandió constantemente su oferta de servicios de intérpretes, que actualmente incluye todos los procesos penales y la gran mayoría de los procesos civiles, así como también asistencia idiomática oral y escrita en los servicios del tribunal. El LASC aceptó expandir los servicios de intérpretes gratuitos a asuntos civiles ilimitados – el último tipo de caso restante en el que actualmente no se garantizan los servicios idiomáticos – antes del 1 de diciembre de 2017. Entre otros compromisos asumidos, el tribunal traducirá documentos adicionales, ofrecerá avisos más amplios sobre la disponibilidad de servicios de interpretación gratuitos para los procedimientos judiciales y hará que sea más fácil solicitar un intérprete. El LASC también seguirá pidiendo la opinión de asociados comunitarios que brindan servicios a poblaciones con LEP. Bajo los términos del acuerdo, el LASC actualizará periódicamente al Departamento de Justicia hasta el final del 2017.
Si bien la investigación del departamento se enfocó en el LASC, la estructura del sistema judicial de California exigió que el departamento revisara políticas circuladas e implementadas a nivel estatal a través del Consejo Judicial de California y su personal. En una carta de 2013 al LASC, el juez principal de la Corte Suprema de California y el brazo administrativo de los tribunales, el departamento identificó inquietudes respecto del cumplimiento del Título VI, hizo recomendaciones para mejorar el cumplimiento y se ofreció a trabajar de manera colaborativa para asegurar el cumplimiento. Representantes del LASC ayudaron al Consejo Judicial de California a desarrollar e implementar el Plan Estratégico para el Acceso Lingüístico en los Tribunales de California para garantizar un acceso significativo a los procedimientos judiciales y otras operaciones de los tribunales en todo el sistema unificado de tribunales del estado. El departamento está trabajando por separado con el consejo judicial para resolver la parte de la investigación enfocada en el cumplimiento en todo el estado.
El caso fue investigado de manera conjunta por la abogada Anna Medina de la Sección de Coordinación y Cumplimiento Federal [Federal Coordination and Compliance Section (FCS)] de la División de Derechos Civiles y el Fiscal Federal Auxiliar Richard Park del Distrito Central de California.
Para obtener más información sobre la Iniciativa de Acceso Lingüístico a los Tribunales Estatales de la FCS, una iniciativa múltiple enfocada en la coacción, la asistencia técnica, la extensión pública, el desarrollo de recursos y los esfuerzos a nivel de políticas para garantizar un acceso significativo a los tribunales estatales que reciben asistencia financiera federal, visite www.lep.gov o consulte la publicación recién divulgada del Departamento de Justicia, “Language Access in State Courts” [Acceso Lingüístico en los Tribunales Estatales]. Para obtener más información sobre los idiomas hablados en California y otras partes de los Estados Unidos, haga clic en la aplicación de mapa de idiomas disponible aquí: https://www.lep.gov/maps/.
Defendant Involved in Multi-Million Dollar ‘High-Yield Prime Bank’ Scheme Found Guilty of Federal Fraud ChargesRead the Press Release
SANTA ANA, California – A Marina Del Rey man has been found guilty of federal fraud charges for participating in a “high-yield prime bank” scam by bringing in approximately $5 million from victims who were promised huge returns on investments, purportedly with little or no risk.
Mark Gelazela, who was also known as Mark Zella, 43, of Marina Del Rey, who operated IDLYC Holdings Trust, was found guilty yesterday afternoon by a federal jury of two counts of wire fraud related to the scheme.
Gelazela lured victims to invest in a scheme that claimed to be using money to lease and monetize bank guarantees. According to Gelazela, once the bank instruments were leased, a credit line would be drawn from the instruments that would then be used for trading, leading to extraordinary profits.
Once money came in from investors, Gelazela and his co-conspirators almost immediately used the money to pay themselves. In some cases, money from new victims was used to pay off older investors to keep the scheme running. When victims began inquiring about the status of payouts under the program and then began seeking the return of their capital, Gelazela lulled them with falsehoods and took steps to conceal the fraud.
The evidence presented at trial showed that Gelazela brought 18 victims into the scheme with false promises of astronomical returns on their investments.
“The victims in this case suffered losses of approximately $5 million after the defendant convinced them to invest with a series of lies,” said United States Attorney Eileen M. Decker. “This scheme was based on extravagant promises of high returns, which underscores the importance of exercising extreme caution when a deal sounds too good to be true.”
Gelazela was found guilty following a five-day trial before United States District Judge David O. Carter, who is scheduled to sentence Gelazela on December 12. At sentencing, Gelazela faces a statutory maximum sentence of 40 years in federal prison.
“Mr. Gelazela and his co-defendants solicited victims by claiming to be an international finance guru, only to lie about how investors’ money would be used, make excuses for delays in payment and convince victims to avoid cooperating with investigators,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “As is typical of Ponzi schemes, investors did not receive returns on their investments.”
Previously in this case, a co-defendant who participated in the scheme pleaded guilty. Francis Wilde, 65, of Mountain View, California, who was the chief executive officer of Riptide Worldwide Inc. and the owner of Matrix Holdings, LLC, pleaded guilty in May to wire fraud and admitted that he was involved in 26 deals that cost victims more than $6.3 million. Judge Carter is scheduled to sentence Wilde on December 5, at which time he faces a statutory maximum sentence of 20 years in federal prison.
Charges against two other defendants named in a grand jury indictment are still pending. Those defendants are Steven Woods, a 55-year-old Missouri man, who operated company called BMW Majestic, and attorney Bruce Haglund, a 65-year-old Irvine resident, who acted as an escrow “paymaster” in deals made by his co-defendants.
“Financial fraud schemes are often described as a house of cards. The underlying structure can fall apart at any time and expose the individuals responsible,” stated IRS Criminal Investigation’s Acting Special Agent in Charge Anthony J. Orlando. “IRS Criminal Investigation is proud to bring our forensic accounting skills to this joint investigation and help put a stop to this and other types of white collar crime.”
This case was investigated by the Federal Bureau of Investigation and IRS Criminal Investigation. The case is being prosecuted by Assistant United States Attorney Daniel H. Ahn of the Santa Ana Branch Office.
Two Doctors Arraigned after Being Indicted on Federal Charges of Illegally Distributing Prescription NarcoticsRead the Press Release
Update:
After being named in separate indictments returned by a federal grand jury on September 6, two doctors who had medical offices in Lynwood were arraigned this afternoon and entered not guilty pleas.
Edward Ridgill, 64, of Ventura, is charged in a 26-count indictment that alleges the illegal distribution of hydrocodone, alprazolam and carisoprodol. If convicted of all charges, he faces a maximum possible sentence of 239 years in prison.
Oparah is charged in a 14-count indictment that alleges illegal distribution of codeine, alprazolam and promethazine with codeine. If convicted, he faces a statutory maximum sentence of 51 years.
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.
Both defendants were ordered to stand trial on November 1.
Original Release:
Two Doctors Face Federal Charges of Illegally Writing Prescriptions for Addictive Narcotics Connected to Gang’s Drug Trafficking
LOS ANGELES – Two doctors who each operated medical offices in Lynwood have been arrested on federal drug charges that allege they issued prescriptions for narcotics and sedatives without a medical purpose.
The two doctors were charged by the United States Attorney’s Office in conjunction with an operation conducted by the Torrance Police Department and the Los Angeles District Attorney’s Office that targeted members and associates of the East Coast Crips criminal street gang.
The two doctors – Sonny Oparah, 75, of Long Beach, and Edward Ridgill, 64, of Ventura – surrendered to federal authorities on Friday and were released on bond that afternoon after making their first appearances in United States District Court. Both men were ordered to again appear in federal court for arraignments on September 15.
Two criminal complaints unsealed on Friday charge Oparah and Ridgill with illegally prescribing the powerful painkillers hydrocodone (best known as Vicodin or Norco) and codeine (for example, promethazine with codeine cough syrup, which is known on the street as purple drank), alprazolam (commonly known as Xanax), and carisoprodol (a muscle relaxer best known as Soma). According to the affidavit filed in the cases, Oparah issued nearly 13,000 prescriptions for those drugs in a one-year period between July 2014 and July 2015, and Ridgill issued more than 21,000 such prescriptions in a three-year period between July 2011 and July 2014. All of the prescribed drugs were at or near maximum strength.
The affidavit describes 12 undercover operations during which Oparah or Ridgill sold prescriptions in exchange for cash fees. In most instances, the doctors sold the prescriptions without ever examining the undercover officer or cooperating witness. A medical expert’s independent review of the undercover recordings and seized patient files confirmed that there was no legitimate medical basis for the prescriptions. The expert, writing about Oparah, said his “actions are very alarming” and the evidence reflects “extreme departures from the standard of care,” according to the affidavit.
“The powerful drugs in this case, which include addictive painkillers, can kill users who abuse them,” said United States Attorney Eileen M. Decker. “The investigation determined that these doctors were significant suppliers of drugs to a street gang. As the charges in the indictments demonstrate, these doctors enabled the gang’s criminal activity just like street-level drug dealers.”
The arrests of Oparah and Ridgill occurred jointly with a sweep that targeted the East Coast Crips street gang in “Operation Money Bags.” The charges against gang members and their associates are being unsealed today. As described in the federal affidavit, the investigation into Oparah and Ridgill originated when the investigation into the East Coast Crips revealed evidence that “Oparah and Ridgill served as large-scale sources of supply to [gang] members and associates via their issuance of medically unnecessary controlled drug prescriptions.”
“These arrests demonstrate DEA’s resolve to target all drug traffickers regardless of their standing in the community,” said Anthony A. Chrysanthis, Assistant Special Agent in Charge of the DEA’s Los Angeles Field Division. “With our law enforcement partners, we will continue our pursuit of those that contribute to the opioid addiction crisis and poison our society under the guise of the medical profession.”
The federal investigation into Oparah and Ridgill showed that they operated cash businesses. Federal authorities made cash seizures from both doctors, and bank records showing that Ridgill deposited $500,000 in cash into his bank accounts over a period of less than three years.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.
The investigation in the federal cases against the doctors was conducted by the Drug Enforcement Administration, the Los Angeles Police Department, the Torrance Police Department, IRS - Criminal Investigation, the California Medical Board and the Los Angeles High Intensity Drug Trafficking Area.
The cases against Oparah and Ridgill is being prosecuted by Assistant United States Attorney Benjamin Barron of the Organized Crime Drug Enforcement Task Force.
Riverside ‘Prepper’ Who Stockpiled Arsenal near College Campus Pleads Guilty to Being a Felon in Possession of FirearmsRead the Press Release
LOS ANGELES – A Riverside man and self-proclaimed “Doomsday Prepper” who possessed an arsenal of weapons and thousands of rounds of ammunition has pleaded guilty in federal court to being a felon in possession of firearms and ammunition.
Hector Mariscal, 41, pleaded guilty Monday in United States District Court and admitted that he unlawfully possessed semi-automatic firearms, shotguns, rifles, a receiver for an AR-15 machine gun, and various types of ammunition. Mariscal also admitted in court that he was not legally allowed to possess these items because he previously sustained felony convictions for burglary – and being a felon in possession of a firearm.
According to court documents, law enforcement officers executed a federal search warrant at Mariscal’s residence near Riverside City College in June. During the search, law enforcement seized firearms, thousands of rounds of ammunition, tasers, silencers, body armor and a flare launcher.
According to an affidavit filed in the case, on the date of the search, Mariscal admitted that he was a convicted felon who illegally possessed multiple firearms and thousands of rounds of ammunition. Mariscal repeatedly described himself as a “Doomsday Prepper,” who in connection with his preparation also collected knives and other dangerous items, including a flare launcher. According to the affidavit, Mariscal told investigators that he regularly goes to the swap meet to obtain firearms and other dangerous weapons, stating, “You’d be surprised what you can find at a swap meet.”
“This defendant’s continued affinity for guns has earned him a second felony conviction, this time for illegally possessing firearms,” said United States Attorney Eileen M. Decker. “The defendant flagrantly violated laws designed to protect the public by keeping firearms away from convicted felons, and now he faces a substantial period of time in a federal prison.”
The case against Mariscal is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
“Mr. Mariscal previously admitted to a felony conviction for the same conduct,” said ATF Special Agent in Charge Eric D. Harden. “ATF works with our partner agencies to identify and prosecute those that choose to repeatedly circumvent regulations designed to protect our communities from gun violence.”
Mariscal pleaded guilty before United States District Judge Manuel Real, who is scheduled to sentence the defendant on November 21. At the time of sentencing, Mariscal faces a statutory maximum sentence of 10 years in federal prison.
The Riverside Police Department and the Los Angeles Police Department provided substantial assistance in the investigation.
This case is being prosecuted by Assistant United States Attorney Reema El-Amamy.
Inland Empire Woman Arrested on Federal Charges of Helping Her Husband Flee United States While He Was Pending SentencingRead the Press Release
RIVERSIDE, California – A Moreno Valley woman was arrested this morning on federal charges after she allegedly helped her husband flee the United States after he had pleaded guilty in a federal criminal case.
Elba Soto, 36, was arrested without incident this morning by the U.S. Marshals Service. Soto made her initial appearance this afternoon in United States District Court in Riverside, where she was ordered detained (held without bond). An arraignment in the case was scheduled for October 19.
Soto was arrested pursuant to a criminal complaint that charges her with being an accessory after the fact for allegedly driving her husband to Mexico so he could avoid being sentenced after pleading guilty to illegal reentry after deportation.
Soto’s husband, Jose Guadalupe Vega-Zuniga, pleaded guilty on August 3 and remains scheduled to be sentenced on October 17. Vega-Zuniga admitted that he was in the United States without authorization after being deported to his native Mexico on four occasions between 2000 and 2008. When he pleaded guilty before United States District Judge Michael W. Fitzgerald in Los Angeles, Vega-Zuniga admitted that he previously had been convicted of drug trafficking and assault with a deadly weapon in state court, as well as being found guilty in 2000 of a felony offense of illegally being in the United States. At the time of his guilty plea, Vega-Zuniga was free on a $100,000 unsecured bond and was subject to electronic location monitoring.
According to the criminal complaint filed against Soto, Vega-Zuniga removed his location monitoring bracelet about four days after pleading guilty. On August 8, a person resembling Soto went to the court’s Pretrial Services Office and returned the electronic monitoring bracelet, explaining that Vega-Zuniga had removed the device and she did not know his whereabouts.
An investigation by the U.S. Marshals Service revealed that Soto’s vehicle entered Mexico through the Otay Mesa port of entry on August 18. Photographs taken during the crossing show Soto in the driver’s seat of the vehicle, with Vega-Zuniga in the passenger seat.
“The evidence in this case indicates the defendant knowingly transported her husband to Mexico while he was pending sentencing in the latest of his criminal cases,” said United States Attorney Eileen M. Decker. “If these allegations are proven, the defendant knowingly assisted a convicted felon avoid justice. As a result, the defendant now faces her own criminal case and a significant prison term.”
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
If she is found guilty of being an accessory after the fact by helping Vega-Zuniga flee the United States, Soto would face half of the maximum prison sentence that Vega-Zuniga faces as a result of his guilty plea. Vega-Zuniga faces a statutory maximum sentence of 20 years in prison, so therefore Soto would face a sentence of up to 10 years in prison.
The case against Soto is being prosecuted by Assistant United States Attorney Bilal A. Essayli of the Riverside Branch Office.
Leader of Ring that Stole Dozens of Firearms during Burglaries of Southern California Gun Shops Pleads Guilty to Federal ChargesRead the Press Release
SANTA ANA, California – A Los Angeles man has pleaded guilty to federal charges related to a series of burglaries in which well over 100 firearms were stolen from businesses operated by federal firearms licensees.
Eddie Lee Harris Jr., 27, who lives in the Harvard Park district of Los Angeles, pleaded guilty yesterday to one count of conspiracy and one count of theft of firearms from a federally licensed firearms dealer. When he is sentenced by United States District Judge Cormac J. Carney on January 30, Harris faces a statutory maximum sentence of 15 years in federal prison.
Over a 2½-month period in late 2015, Harris conspired with several others to steal firearms from gun-related businesses in a series of burglaries and attempted burglaries in Orange, Riverside and Los Angeles counties, according to a plea agreement filed in United States District Court.
Also yesterday, another Los Angeles man who participated in the burglaries was sentenced to 18 months in federal prison. Faizon Azante Donnie, 20, who also resides in the Harvard Park district of Los Angeles, pleaded on June 6 to one count of theft of firearms from a federal firearms licensee (FFL) and admitted that he participated in two of the burglaries.
“Participants in this ring that targeted firearms dealers directly contributed to an increase in the number of illegal firearms available on the black market and, therefore, indirectly contributed to an increase in violent crime in our community,” said United States Attorney Eileen M. Decker. “This case is the latest example of our commitment to reducing violent crime by working with our federal and local law enforcement partners to curtail the illegal weapons trade and firearms theft.”
This case stems from a series of burglaries in which the thieves broke into gun stores in the early morning hours by breaking glass windows or doors to the businesses. Once inside, the burglars quickly stole handguns, rifles, shotguns and silencers, among other items. The burglaries often lasted less than three minutes. Following the thefts, those involved gathered at South Los Angeles residence, where the guns were divided up. During Donnie’s sentencing hearing, Judge Carney described the conduct as “mayhem.”
Donnie became the fourth person sentenced in relation to the spree that led to the theft of 128 firearms. Members of the conspiracy targeted seven firearms-related businesses between August 29 and November 7 last year, including Orange County Firearms and Rifle Gear Company in Fountain Valley, SureFire Institute in Yorba Linda, FMK Firearms in Placentia, Warrior One and American Pacific Rifleworks in Riverside, and ExaTactical Firearms in La Puente.
The three defendants previously sentenced by Judge Carney last month are:
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Kenneth Terell Mullen, 21, of the Mid-City section Los Angeles, who was sentenced to 57 months in federal prison;
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Davell Dejon Mena, 19, of Watts, who was sentenced to 30 months in federal prison; and
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Keon Mena, (Davell Mena’s cousin), 19, of the Florence district of Los Angeles, who was sentenced to 18 months in federal prison.
A sixth defendant in the case – Brittani Nicole Collins – pleaded guilty in January and is pending sentencing.
Another defendant, Derrick Smith, 27, of the Vermont-Slauson section of Los Angeles, is expected to plead guilty later this week.
The final defendant in the case, Teophelus Lee Usher, is currently at large and is wanted by law enforcement. The 20-year-old Usher is a fugitive after fleeing earlier this year from his Exposition Park residence. Usher had been under house arrest after being granted bond following his arrest in this case.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
“This burglary ring caused significant damage to local small businesses and caused a substantial threat to the public and law enforcement as stolen firearms all too often wind up in the hands of violent offenders in the commission of crimes,” said ATF Special Agent in Charge Eric D. Harden. “Members of the public should contact their local police department or ATF if they have any information on fugitive Teophelus Usher.”
Anyone with information about Usher is urged to contact the ATF at 1-800-ATF-GUNS.
The case is being prosecuted by Assistant United States Attorney Scott D. Tenley of the Santa Ana Branch Office.
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Federal Correctional Officer Arrested on Charges of Assaulting InmateRead the Press Release
RIVERSIDE, California – A correctional officer employed by the U.S. Bureau of Prisons at the Victorville Federal Correctional Complex has been arrested on federal civil rights and assault charges stemming from an incident in which she allegedly kicked a female inmate in the head.
Cynthia Flores, 34, of Victorville, was arrested yesterday afternoon and is scheduled to be arraigned this afternoon on charges in a four-count indictment.
Flores is charged in an indictment that was returned by a federal grand jury on September 7. The indictment accuses Flores of deprivation of rights under color of law, assault with a dangerous weapon with intent to do bodily harm, falsifying records and making false statements and concealing material facts in a matter within the jurisdiction of the United States Department of Justice.
The charges stem from an incident in which Flores allegedly assaulted an inmate at the women’s prison camp in Victorville on June 2, 2013. During the evening count, when correctional officers ensure that all inmates are present, Flores initiated a physical altercation with the victim inmate. After the inmate’s hands were placed in restraints behind her back, and she was held chest down on the floor, Flores allegedly kicked the inmate in the head.
“Law enforcement officers have a duty to uphold the civil rights of all Americans, and, when those rights are violated, we must act decisively,” said United States Attorney Eileen M. Decker. “No citizen should have to suffer the physical abuse by a law enforcement authority alleged in this case. Such abuse not only undermines the integrity of our justice system, but undermines the professional work being done by the vast majority of correctional officers.”
Following the incident, Flores allegedly submitted both a written incident report and a videotaped oral report in which she described a verbal and physical altercation with the inmate. The indictment alleges that Flores falsely stated that the inmate had assaulted her, when it was actually Flores who assaulted the inmate by pushing the inmate into a wall, striking her and kicking her in the head.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
If she is convicted on all counts, Flores would face up to 45 years in prison.
This case was investigated by the Justice Department’s Office of the Inspector General. The case is being prosecuted by Assistant United States Attorney Sean D. Peterson of the Riverside Branch Office.
Former State Assemblyman Tom Calderon Sentenced to Federal Prison for Laundering Bribe Payments Made to His BrotherRead the Press Release
LOS ANGELES – Thomas M. Calderon, a former member of the California State Assembly who became a political consultant, was sentenced this afternoon to one year and one day of incarceration after he pleaded guilty to money laundering for allowing bribe money to be funneled through his firm.
Tom Calderon was sentenced today by United States District Judge Christina A. Snyder, who ordered that the sentence be served half in federal prison and half in home detention. In addition to the period of incarceration, Judge Snyder ordered Tom Calderon to serve 100 hours of community service.
Tom Calderon, 62, of Montebello, pleaded guilty on June 6 to one count of money laundering and admitted that he agreed to conceal bribe payments coming from two undercover FBI agents by having the money go through his political consulting company, the Calderon Group.
The bribes were made to Tom Calderon’s brother, Ronald S. Calderon, who at the time was a California State Senator. Ron Calderon pleaded guilty on June 21 and admitted accepting bribes from the undercover agents and a businessman in exchange for performing official acts as a legislator. Ron Calderon, 59, also of Montebello, is scheduled to be sentenced by Judge Snyder next Monday, although he has asked to continue his sentencing date.
When he pleaded guilty, Tom Calderon specifically admitted that in 2013 he deposited a $30,000 bribe payment from an undercover agent into the Calderon Group’s bank account and then wrote a $9,000 check to Ron Calderon’s daughter.
“Tom Calderon was all too aware of the bribe payments to his brother and that his brother had agreed to a quid pro quo with the undercover agents,” said United States Attorney Eileen M. Decker. “Tom Calderon facilitated these bribe payments by helping to conceal his brother’s corrupt activities from the public.”
“Today's sentencing sends a message to those interested in using access to public office in order to reap personal benefits that they will be held responsible for their actions,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Mr. Calderon used his family ties to benefit personally at the expense of the constituents represented by his brother’s office.”
Tom Calderon and his brother were both indicted by a federal grand jury in 2014. Tom Calderon was charged with conspiring with his brother to commit money laundering and seven substantive counts of money laundering. The money laundering charge that Tom Calderon pleaded guilty to was count 22 in the indictment.
“IRS Criminal Investigation tirelessly untangled the web of illicit transactions that lead to Thomas Calderon being held accountable for his role in this scheme,” stated IRS Criminal Investigation’s Acting Special Agent in Charge, Anthony J. Orlando. “IRS CI remains committed to investigating those who engage in political corruption and tarnish our democratic system.”
The investigation into the Calderons was conducted by the Federal Bureau of Investigation and IRS Criminal Investigation.
This case is being prosecuted by Assistant United States Attorney Mack E. Jenkins of the Public Corruption and Civil Rights Section.
Three Lead Defendants in Large Racketeering Case Targeting Crips Gang Plead Guilty to Federal Charges, Including Murder ConspiracyRead the Press Release
LOS ANGELES – With guilty pleas this week by a leader of the Five Deuce Broadway Gangster Crips (BGC), the three lead defendants in the largest racketeering case currently pending in Los Angeles have now pleaded guilty.
Tyrine Martinez, also known as “Lil’ C-Bone,” 36, of Los Angeles, pleaded guilty Wednesday afternoon to racketeering conspiracy, conspiring to commit murder, conspiring to traffic crack cocaine, illegally possessing a firearm and selling crack cocaine near schools.
As a result of guilty pleas before United States District Judge S. James Otero, Martinez faces a potential life sentence and a mandatory minimum term of 15 years in federal prison.
Martinez was among 72 charged in a RICO indictment that targeted BGC, a street gang that claims territory in South Los Angeles and controls drug sales in an area just west of the “Skid Row” district of Los Angeles. The indictment outlined two decades of criminal conduct, including murders, robberies, extortion, illegal firearms possession, witness intimidation and narcotics trafficking.
Over the past several weeks, two other key defendants named in a 213-page RICO indictment have pleaded guilty. Tracy Harris, aka “Woody,” 51, of Inglewood, pleaded guilty on August 5 to racketeering conspiracy, conspiring to sell methamphetamine after having been convicted of a prior drug felony, and selling methamphetamine near schools. And, on July 27, Roosevelt Sumpter, aka “TuTu,” 43, of Los Angeles, pleaded guilty to racketeering conspiracy, conspiring to distribute crack cocaine, illegally possessing a firearm, and selling crack cocaine near schools. Harris and Sumpter also face potential life sentences and mandatory minimum sentences of 13 and 15 years, respectively.
In plea agreements filed in United States District Court, these defendants specifically admitted that:
Martinez and Harris were two of the gang’s supervisors, and Sumpter was a veteran “OG” member;
Martinez was a leader of the “Gremlin Riderz,” which served as the gang’s “hit squad” and whose members bore tattoos from the 1984 movie “Gremlins”;
Martinez conspired with other BGC members to murder a fellow gang member who had provided law enforcement information regarding a 2012 BGC gang shooting that killed an unarmed teenager with no gang affiliation and wounded three others, including a 10-year-old girl;
Martinez directed the group assault of another BGC member who had also provided information to law enforcement regarding a BGC murder (that fellow gang member was also later murdered in a case that remains under investigation);
Martinez “direct[ed] the killing of rivals” and discussed the stabbing of a man by a BGC member in front of the victim’s baby because the man was in BGC territory without permission;
Harris presided over large gang meetings in which he called for enhancing the operations of the gang and increasing punishments for those who violated gang rules; and
Martinez and Sumpter were two of the gang’s “central drug suppliers.”
In addition to the admissions, all three defendants agreed to be banned from living in the BGC territory after they are released from prison and to be subject to expansive search conditions.
Martinez and Harris are scheduled to be sentenced by Judge Otero on December 19. Sumpter is scheduled to be sentenced on November 7.
“These defendants have now pled guilty to orchestrating a campaign of violence and drug trafficking, bringing danger to the local community and to schools,” said United States Attorney Eileen M. Decker. “In addition to committing many acts of violence, this gang preyed upon the marginalized residents of Skid Row with illegal drug sales. Cases like this one targeting the leadership and membership of criminal street gangs show my office’s dedication to ridding neighborhoods of gang activity through partnerships with federal and local law enforcement agencies.”
Seventy-one of the defendants named in the indictment have now appeared in federal court to face charges in the indictment (the final defendant is in state custody), which include conspiracy to violate the federal Racketeer Influenced and Corrupt Organizations Act (RICO), violent crimes in aid of racketeering, a series of robberies that targeted bank customers, weapons offenses, and various drug trafficking charges. Six other top defendants in the case are scheduled to go on trial January 3.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty in court.
The investigation into BGC was conducted by agents and officers with the Federal Bureau of Investigation and the Los Angeles Police Department. Considerable assistance was provided during this investigation by the California Department of Corrections and Rehabilitation, the Torrance Police Department, the Buena Park Police Department, the El Segundo Police Department, the San Bernardino Police Department and the Los Angeles City Attorney’s Office.
Operation Gremlin Riderz is a result of a partnership between the FBI and the Los Angeles Police Department under the auspices of the FBI’s Task Force on Violent Crime in the City of Los Angeles. This task force is one of dozens of such partnerships throughout the United States, known as Safe Streets Task Forces, funded for the purpose of assisting local police in identifying and addressing violent crime in America.
This case is being prosecuted by Assistant United States Attorney Mack Jenkins of the Public Corruption and Civil Rights Section, and Assistant United States Attorneys Max Shiner and Wilson Park of the Violent and Organized Crime Section.
Statement of the United States Attorney for the Central District of California after the release of the Critical Incident Review of the San Bernardino Public Safety Response to the December, 2015 Terrorist Shooting IncidentRead the Press Release
LOS ANGELES – Today United States Attorney for the Central District of California Eileen M. Decker issued the following statement regarding the Critical Incident Review of the San Bernardino Public Safety Response to the Terrorist Shooting on December 2, 2015:
“This report highlights the extraordinary bravery of all of the first responders who put their lives on the line in the midst of a terrorist rampage. The report also underscores the horror and suffering of the many victims during this calculated and vicious attack. These victims had no chance to protect themselves as a result of the callous perpetration of violence, while others heroically sacrificed themselves in an attempt to stop the shooting. In the face of this unfathomable suffering, the law enforcement personnel and citizens who put themselves in harm’s way to help others exemplifies the very best that our country has to offer. This report records the lessons learned from the tragic events of December 2, 2015, and also stands as a testament to the bravery and skills of our first responders.”
L.A. Nursing Home, Two Physicians Pay over $3.5 Million to Resolve Allegations They Participated in Illegal Patient-Transfer SchemeRead the Press Release
LOS ANGELES – A Los Angeles nursing home and two physicians who worked at the facility have paid $3,563,140 to resolve civil allegations that they participated in a scheme to improperly transfer patients recruited from the “Skid Row” district to a hospital for medically unnecessary services, and then transfer the patients from the hospital to the nursing home for medically unnecessary stays.
Westlake Convalescent Hospital; Dr. Jasvant Modi, who worked at Westlake; and Jasvant Modi’s wife, Dr. Meera Modi, paid the settlement on August 3 to resolve a federal “whistleblower” lawsuit. The settlement was announced today after United States District Judge Beverly Reid O’Connell dismissed the action.
Between 2008 and 2010, AJIT Healthcare, Inc., doing business as Westlake Convalescent Hospital, allegedly paid illegal kickbacks to a “care consortium” on Skid Row in exchange for patient referrals to Westlake. During that period and after, Jasvant Modi allegedly readmitted patients from Westlake to the now-closed Temple Community Hospital and then back to Westlake to extend the patients’ Medicare-covered stays at Westlake, knowing the patients did not require further services at either facility. Meera Modi allegedly signed medical orders for non-payable services for these same patients. Westlake allegedly billed Medicare and Medi-Cal for medically unnecessary services provided to these patients.
“Patient-transfer schemes such as this victimize vulnerable members of our society as well as taxpayer-funded programs designed to aid them,” said United States Attorney Eileen Decker. “Such schemes are a clear abuse of the physician/patient trust and a fraud on American taxpayers.”
Westlake and the Modis were named in a lawsuit that alleged the nursing home and the Modis knowingly submitted false claims to Medicare and Medi-Cal for services to patients for medically unnecessary services.
“This round-robin system of moving mostly homeless and vulnerable people from the hospital to a nursing home and back, purely for profit not patient care is unacceptable. As this case illustrates, we will work diligently to investigate providers who abuse the system and take advantage of the elderly and disabled,” said Chris Schrank, Special Agent in Charge for the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “These were medically unnecessary services which placed the ‘patients’ and federal health care systems at risk and this type of conduct will not be tolerated.”
This case is related to a large-scale scheme to defraud Medicare and Medi-Cal through the illegal recruitment of Skid Row residents for medically unnecessary medical procedures at area hospitals and medically unnecessary stays at nursing homes. In December 2013, Dr. Ovid Mercene pleaded guilty to a tax offense related to his admission of patients, most of whom where homeless, to Temple Community after they had been referred from a purported “care consortium.” After a short hospital stay, Mercene discharged the “patients” to skilled nursing facilities, even though they did not require such care.
The settlement announced today resolves a lawsuit brought by a former Westlake employee under the qui tam – or whistleblower – provisions of the False Claims Act, which allows private citizens to bring suit on behalf of the government and share in any recovery. The whistleblower, Ricardo Gonzales, has received $534,471 from the settlement in the lawsuit, United States of America and the State of California ex rel. Gonzales v. Dr. Jasvant Modi, et al., CV 11-02987-BRO.
The claims resolved by the settlement are allegations only; there has been no determination of liability.
HHS-OIG and former Assistant United States Attorney and current Justice Department Trial Attorney Shana T. Mintz, of the Civil Division’s Fraud Section, investigated this case.
Utah Man Arrested in Real Estate Investment Scheme that Targeted Orange County Investors, Who Lost Millions of DollarsRead the Press Release
SANTA ANA, California – A Utah man has been arrested for his role in a real estate fraud scheme in which Southern California investors collectively suffered nearly $3.5 million in losses.
Shawn Patrick Watkins, 46, of Layton, Utah, was taken into custody on September 1 when he surrendered to FBI agents in Orange County. Watkins had been charged with mail fraud, wire fraud and money laundering in a nine-count indictment returned on August 17 by a federal grand jury.
Watkins and others offered investments in a company known as The Equity Growth Group (TEGG) between approximately 2007 through 2014. According to the indictment, the victims were solicited during seminars in Orange County hotels offered by Investor Workshops, Inc., in which Watkins presented himself as an expert in the field of real estate investment. In order to lend credibility to the scheme, Watkins attempted to gain trust by telling investors that he was formerly employed as a law enforcement officer.
As part of the solicitations, Watkins made omissions and false promises to investors. For example, the indictment alleges that Watkins falsely told investors that TEGG controlled hundreds of properties that generated rental income and TEGG would continue its growth by acquiring new properties. Watkins led investors to believe that they would receive substantial interest payments or that their money would be secured by collateral through the filing of deeds of trust on properties.
In reality, over the course of the several years, until the scheme collapsed in the spring of 2014, TEGG was not acquiring new properties and had a negative cash flow. Investor money was not used to acquire new properties, nor was it secured by collateral, and many victims did not receive interest payments. In fact, money that was paid to some victims as purported interest or a return on their investment came from investments made by other victims.
Over the course of the scheme, more than 50 investors lost approximately $3.4 million with TEGG, the indictment alleges.
“This defendant took great pains to lend legitimacy to his scheme, such as holding elaborate seminars and presenting himself as an expert investor,” said United States Attorney Eileen M. Decker. “But, as we see all too often, the false claims were designed to support a Ponzi scheme that took money from unsuspecting victims for a number of years. We are committed to seeking justice in these cases and doing whatever we can to recover money lost by victims to such schemes.”
“Mr. Watkins greatly overstated his relationship with law enforcement as a way to gain the trust of investors, only to get the attention of law enforcement by stealing their money,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Anyone who believes they may have been targeted by the defendant is urged to contact the FBI."
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.
If convicted of the nine charges in the indictment – four counts of mail fraud, two counts of wire fraud and two counts of money laundering, Watkins would face a statutory maximum penalty of 180 years in federal prison.
Watkins was arraigned on the indictment on September 1 and entered not guilty pleas to the charges. He was ordered freed on a $35,000 bond and was ordered to stand trial on October 25 before United States District Judge Cormac J. Carney.
Investigators believe Watkins may have been involved in another investment scheme and may have victimized investors in Utah, California and possibly other states. Anyone who may have invested money with Watkins and believes they may be a victim of fraud is urged to contact the FBI’s Los Angeles Field Office at (310) 477-6565.
The investigation in this case was conducted by the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney Gregory W. Staples of the Santa Ana Branch Office.
A Dozen People, including Former O.C. Superior Court Clerk, Indicted in Bribery Scheme to ‘Fix’ Criminal Cases and Traffic ChargesRead the Press Release
SANTA ANA, California – After a grand jury issued a federal racketeering indictment alleging corruption by a former clerk in the Orange County Superior Court, authorities this morning arrested 10 defendants on charges stemming from a bribery scheme in which the clerk improperly and illegally resolved cases on terms favorable to hundreds of defendants without the knowledge of prosecutors or judges. Authorities expect to soon have two remaining defendants in custody.
According to the 38-count indictment unsealed this morning, the court clerk allegedly “fixed” criminal cases in exchange for cash bribes as high as $8,000. As a result of the scheme detailed in the indictment, hundreds of defendants had charges dismissed, had fees reduced, or avoided mandatory jail time in drunk driving cases after paying bribe money to the clerk or middlemen who took bribes on his behalf.
The man at the center of the scheme – former clerk Jose Lopez Jr. – is charged with being at the center of a racketeering enterprise that engaged in bribery. Lopez, a 36-year-old resident of Anaheim, allegedly “resolved” cases by entering information into the court’s computers to make it appear that a defendant had paid required fees or had performed community service.
In some cases, Jose Lopez illegally created records to indicate that a defendant had pleaded guilty to reckless driving and that drunk driving charges had been dismissed – thereby avoiding the consequences of a drunk driving charge. According to the indictment, in other cases, Jose Lopez illegally entered court records that it made it appear second-time DUI offenders had served mandatory jail time, when they had not.
“The racketeering indictment charges the former court clerk with accepting bribes to falsify court records on the court’s computer system,” said United States Attorney Eileen M. Decker. “Some of the records indicated that a case had been resolved, when no such action had been approved by any judge of the court, and some records included signatures that appeared to be those of officers of the court, but were in fact forged. This defendant allegedly assumed the roles of judges, prosecutors and defense attorneys to line his pockets in a staggering abuse of his position. Very simply, he compromised the entire justice system in Orange County.”
Lopez is charged with receiving bribes from individuals who had been prosecuted for drunk driving or traffic-related offenses, according to the indictment. Those who paid the bribes were solicited directly by Lopez or one of a team of recruiters. The 11 recruiters charged in the indictment are:
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Ricardo Quinones, 32, of Santa Ana;
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Juan C. Rosas Santillana, 32, of Chino Hills;
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Ramon Salvador Vasquez, 27, of Santa Ana;
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Manuel Galindo Jr., 26, of Santa Ana;
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Gibram Rene Lopez, also known as “Ivan,” 26, of Anaheim;
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Agustin Sanchez Jr., 32, of Santa Ana;
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Luis Alberto Flores Guillen, also known as “Bills,” 26, of Santa Ana;
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Oscar Centeno, also known as “Mosquito,” 26, of Santa Ana;
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Javed Asefi, also known as “Joey,” 43, of Ladera Ranch;
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Jeff Reynes Fernandez, also known as “Lean,” 24, of Fullerton; and
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Jesus Saldana, 28, of Garden Grove.
This morning, federal authorities arrested 10 of the defendants, including Jose Lopez. Guillen is expected to surrender later this morning. Sanchez is believed to be out of the state, but he is expected to be taken into custody in the near future.
The defendants arrested today are expected to be arraigned on the indictment this afternoon in United States District Court in Santa Ana.
“Mr. Lopez used his position of trust for personal gain and, in the process, conspired with others to pervert the legal system,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Today's arrest should send a message that fixing tickets and tampering with witnesses is taken seriously by law enforcement and corruption by public officials will result in serious consequences.”
The racketeering indictment alleges a scheme in which Lopez allegedly accepted bribes and illegally resolved criminal cases over a five-year period. The conspiracy ended in the spring of 2015 when the court learned about the misconduct and took steps to reopen many of the cases.
In addition to the bribes and falsified court records, Jose Lopez also allegedly forged the signatures of prosecutors. Several members of the conspiracy allegedly attempted to persuade witnesses to lie about the scheme if they were questioned by authorities.
The indictment alleges that Lopez improperly resolved more than 1,000 cases, including 69 driving-under-the-influence cases. Lopez allegedly received hundreds of thousands of dollars in bribes, and investigators continue to review evidence obtained during the investigation to determine the total amount he received.
According to the indictment, Lopez used bribe money to pay for, among other things, international vacations, trips to Las Vegas, and the opening of a restaurant in Garden Grove.
“This investigation demonstrates IRS Criminal Investigation's ability to trace the cash payments made to Jose Lopez and uncover the disposition of those funds,” stated IRS Criminal Investigation Acting Special Agent in Charge Anthony J. Orlando. “IRS Criminal Investigation will continue to work with the U.S. Attorney’s Office and the FBI to bring to justice those who have enriched themselves in this scheme and in the process corrupted the Orange County Superior Court.”
All 12 defendants named in the indictment are charged with participating in a conspiracy to violate the federal Racketeer Influenced and Corrupt Organizations Act (RICO). This charge outlines 139 overt acts that outline bribe payments and official court documents that memorialized actions that simply never occurred.
The indictment also alleges 26 counts of bribery in which Jose Lopez either solicited money or one of seven of the recruiters paid money to him.
Jose Lopez is additionally charged with five counts of money laundering.
The indictment further charges Vasquez with conspiring to tamper with witnesses and two counts of witness tampering. Santillana and Fernandez are also charged with witness tampering.
Asefi is charged with making false statements to the FBI last year during its investigation into the bribery scheme.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.
If they are convicted of the RICO conspiracy, each defendant would face a statutory maximum sentence of 20 years in federal prison. The money laundering and witness tampering charges also carry a 20-year maximum penalty. The bribery charges carry a statutory maximum penalty of 10 years in prison.
This case is being investigated by special agents with the Federal Bureau of Investigation and IRS Criminal Investigation.
The case is being prosecuted by Assistant United States Attorney Vib Mittal of the Santa Ana Branch Office.
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San Fernando Valley Man Pleads Guilty in 2013 Shooting Spree at LAX and Admits First-Degree Murder of TSA OfficerRead the Press Release
LOS ANGELES – A Sun Valley man pleaded guilty this afternoon to 11 federal charges related to a 2013 shooting at Los Angeles International Airport in which he murdered Transportation Security Administration Officer Gerardo Hernandez.
Paul Anthony Ciancia, 26, pleaded guilty to first-degree murder in the fatal shooting of TSA Officer Hernandez on November 1, 2013.
As a result of the guilty pleas, Ciancia is expected to receive a sentence of at least life in federal prison, plus 60 years. The defendant could be sentenced to multiple life terms and additional years in prison. There is no parole in the federal system.
The guilty pleas were announced by Attorney General Loretta E. Lynch; Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; United States Attorney Eileen M. Decker; and Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office.
“The 2013 murder of TSA Officer Gerardo Hernandez was a tragic and reprehensible act of violence,” said Attorney General Lynch. “With this guilty plea, the Department of Justice is making clear that wrongdoers who target our nation’s brave law enforcement officers will be held accountable for their crimes. I want to thank the many federal, state, and local law enforcement officers who contributed to this critical investigation – including my colleagues in the ATF and the U.S. Marshals Service – and I want to once again express the Justice Department’s unwavering support for the brave men and women who wear the badge.”
“The guilty pleas entered in court today will hopefully bring some justice to the victims of this horrific attack that senselessly ended the life of a federal officer and injured several others,” said United States Attorney Decker. “Mr. Ciancia now faces a life-without-parole sentence in federal prison, ensuring he will be punished for his crimes and never again have the ability to harm other innocent people. Today’s guilty plea is also a reminder of the tremendous acts of bravery and heroism demonstrated by law enforcement at LAX on the day of the shooting. I commend the hundreds of law enforcement personnel from the Los Angeles Airport Police, the Los Angeles Police Department, the TSA, the FBI and many other agencies who responded to this incident, conducted a thorough and professional investigation, and played a key role in reaching today’s resolution.”
According to a plea agreement file last week, in early 2013, Ciancia purchased a semiautomatic rifle, 500 rounds of ammunition and 10 magazines for the rifle. On the morning of November 1, 2013, Ciancia modified two pieces of luggage and zip-tied them together to conceal his loaded rifle.
Later that morning, Ciancia entered Terminal Three at LAX, removed the loaded rifle from his modified luggage and fired at and killed Officer Hernandez, who was checking passengers’ travel documents as part of his duties as a TSA Officer. Ciancia admitted that he then went upstairs to a TSA checkpoint, by which time many TSA officers and passengers had fled the airport. He fired his weapon at TSA Officers Tony Leroy Grigsby and James Maurice Speer, as well at a civilian, Brian Ludmer, all of whom sustained serious injuries and required surgery but survived the attack.
“Mr. Ciancia’s guilty plea is a welcome development toward reaching justice for the victims of this violent attack, one of whom was murdered as he carried out his duties as a TSA officer, and several others who were wounded when Mr. Ciancia brutally targeted them with his weapon,” said FBI Assistant Director Fike. “I’m proud of the JTTF members and prosecutors for their diligence over the past few years in getting to this point.”
According to the plea agreement, as Ciancia passed passengers hiding in or fleeing the terminal during the attack, he asked if they were TSA and when they said no, he passed without shooting at them.
“Our Transportation Security Officers put their lives on the line each and every day to keep the flying public safe,” said Secretary of Homeland Security Jeh Johnson. “We still remember the awful day that Officer Gerardo Hernandez became known as the first slain-on-duty officer. Today’s threat environment demands that we all remain vigilant, and this guilty plea should remind everyone that if you harm one of our officers, you will be brought to justice.”
“The Transportation Security Administration appreciates the hard work of the Justice Department in addressing a tragedy that significantly impacted the men and women of our agency, and brought unspeakable pain to the family of one of our most devoted officers,” said Keith Jeffries, Transportation Security Administration Federal Security Director. “Officer Gerardo Hernandez was known as a hard-working, brave, dedicated officer and devoted family man who was a proud member of the TSA family. He is missed each day. Our thoughts and prayers remain with his family.”
Appearing today before United States District Judge Philip S. Gutierrez, Ciancia pleaded guilty to one count of murder of a federal officer; two counts of attempted murder of a federal officer; four counts of violence at an international airport; one count of discharging of a firearm during a crime of violence causing death; and three counts of discharging a firearm during a crime of violence,
The first degree murder charge carries a mandatory sentence of life in federal prison. The two additional charges based on the killing of Officer Hernandez – violence at an international airport that resulted in death and using a firearm to murder and cause death – each carry potential sentences of life in federal prison.
The two attempted-murder charges and each of the three charges based on violence against the surviving victims all carry a statutory maximum penalty of 20 years in federal prison.
The first count of using a firearm carries a mandatory minimum sentence of 10 years, and the other two use-of-a-firearm charges each carry mandatory sentences of 25 years. The cumulative 60-year sentences for these charges would be served consecutively to any other sentences that are imposed.
Judge Gutierrez is scheduled to sentence Ciancia on November 7.
This case is the product of an investigation by members of the Los Angeles Joint Terrorism Task Force (JTTF), which is led by the Federal Bureau of Investigation and includes agents and officers from 45 other local, state and federal agencies.
The following agencies provided considerable assistance during the investigation: the Los Angeles Airport Police; the Los Angeles Police Department; the Los Angeles County Sheriff's Department; the Transportation Security Administration; the Federal Air Marshal Service; the Los Angeles Port Police; the Long Beach Police Department; the Air Force Office of Special Investigations; the Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Customs and Border Protection; the United States Secret Service; the Los Angeles Fire Department; Los Angeles International Airport Operations; the United States Marshals Service; the United States Postal Inspection Service; and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
This case is being prosecuted by First Assistant United States Attorney Patrick R. Fitzgerald, Assistant United States Attorneys Melissa Mills of the Terrorism and Export Crimes Section, Joanna M. Curtis of the Violent and Organized Crime Section, and DOJ Trial Attorney Michael S. Warbel of the Criminal Division’s Capital Crimes Section.