Central District of California

            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.

            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.

            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.”

            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.

            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.

            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:

• Ricardo Quinones, 32, of Santa Ana;

• Juan C. Rosas Santillana, 32, of Chino Hills;

• Ramon Salvador Vasquez, 27, of Santa Ana;

• Manuel Galindo Jr., 26, of Santa Ana;

• Gibram Rene Lopez, also known as “Ivan,” 26, of Anaheim;

• Agustin Sanchez Jr., 32, of Santa Ana;

• Luis Alberto Flores Guillen, also known as “Bills,” 26, of Santa Ana;

• Oscar Centeno, also known as “Mosquito,” 26, of Santa Ana;

• Javed Asefi, also known as “Joey,” 43, of Ladera Ranch;

• Jeff Reynes Fernandez, also known as “Lean,” 24, of Fullerton; and

• 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.

           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.

            SANTA ANA, California – A Rancho Mirage woman who was the executive director of a cosmetic surgery center has been named in a superseding indictment that adds new fraud and identity theft charges to a case in which she is accused of participating in a scheme that billed insurance companies $50 million for cosmetic surgeries that were falsely claimed to be “medically necessary.”

            Linda Morrow, 64, was named in a 31-count superseding indictment that was returned on August 31 by a federal grand jury. Morrow and her husband, who pleaded guilty earlier this year, were initially charged a year ago with participating in a scheme to defraud health insurance companies by submitting bills for more than $50 million for procedures that were claimed as “medically necessary” – but in fact were cosmetic procedures such as “tummy tucks,” “nose jobs,” breast augmentations, and vaginal rejuvenation.

            The superseding indictment adds nine new charges against Morrow – three new mail fraud charges, three counts of identity theft and three counts of aggravated identity theft charges. The new indictment expands on forfeiture allegations in the original indictment that would require Morrow, if she is convicted, to forfeit all of the ill-gotten gains obtained from the scheme, a figure that may exceed $20 million.

            The superseding indictment outlines a scheme in which patients were lured to The Morrow Institute (TMI) in Rancho Mirage, where Morrow was the executive director, with promises that cosmetic procedures would be paid for by their union or PPO health insurance plans. TMI allegedly submitted bills to insurance companies seeking as much as $100,000 for individual surgeries, and as much as $700,000 for multiple surgeries. The indictment further alleges that some patients who underwent multiple surgeries at TMI suffered severe medical complications from the procedures.

            “As part of the scheme charged in this indictment, the defendant allegedly used the names and signatures of patients without their knowledge to obtain payments for procedures that were not covered by insurance,” said United States Attorney Eileen M. Decker. “Health care fraud schemes that defraud insurance companies in this manner victimize both the insurers and the insured who are forced to pay higher premiums.  This case seeks both to punish the defendants and to deprive them of their illegal profits."

            In March, Morrow’s husband – Dr. David M. Morrow, 71, of Rancho Mirage, a cosmetic surgeon and dermatologist who was the owner of TMI – pleaded guilty to conspiracy to commit mail fraud and filing a false tax return. Dr. Morrow agreed to pay more than $1 million in restitution to victims. When he pleaded guilty, Dr. Morrow admitted that he had altered a medical record by handwriting “hernias” over the original text in the document, which had correctly listed the cosmetic procedure of “abdominoplasty” (tummy tuck).

            To obtain reimbursement for cosmetic procedures, the doctors at TMI completely fabricated diagnoses – such as a “hernia” – in the patients’ official medical records, according to the indictment. The doctors also allegedly fabricated test results and symptoms on medical records to cover up the actual medical procedures being performed. For example, “tummy tucks” were fraudulently billed as hernia repair or abdominal reconstruction surgeries, rhinoplasties (“nose jobs”) were fraudulently billed as deviated septum repair surgeries, and breast lifts and augmentations were fraudulently billed as “tuberous breast deformity.”

            The victim health insurance companies included Anthem Blue Cross, Blue Cross/Blue Shield of California, Blue Cross/Blue Shield of Massachusetts, Regional Employer/Employee Partnership for Benefits, formerly known as Riverside Employer/Employee Partnership (REEP) and Cigna.

            “The FBI devotes many resources to hold health care fraud cheats responsible, as demonstrated in the charges against Linda Morrow, regardless of whether they are doctors, business partners or marketers,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Linda Morrow’s crimes not only victimized insurance companies, but the public entities that ultimately had to foot the bill to pay the outrageous billings, which include the California Highway Patrol and multiple public school districts.”

            When insurance companies refused to pay for the cosmetic procedures for patients who happened to be employed by public entities such as school districts, TMI made formal claims against those public entities, demanding payments totaling more than $15 million from the California Highway Patrol, the Desert Sands Unified School District, the Palm Springs Unified School District and the City of Palm Springs.

            The superseding indictment further alleges that after the FBI executed a federal search warrant at TMI in March 2011, Morrow went to the home of a TMI employee and asked whether the employee had been “the mole” who had reported TMI to the FBI.

            “We are relentless in our pursuit to uncover, investigate, and prosecute those who rip-off of the healthcare system, leaving California consumers to foot the bill through higher premiums,” said Insurance Commissioner Dave Jones. “I congratulate Department of Insurance detectives who worked this case since it began and partnered with the FBI and insurers to uncover Doctor Morrow’s multi-million dollar crimes and his wife Linda’s alleged role.”

            Morrow is scheduled to be arraigned on the superseding indictment in United States District Court in Santa Ana on September 12. United States District Judge Josephine L. Staton previously ordered Morrow to stand trial on January 24, 2017.

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

            The superseding indictment charges Morrow with 24 mail fraud counts, including conspiracy to commit mail fraud. Each of those 24 charges carries a statutory maximum penalty of 20 years in federal prison.

            Morrow is additionally charged with three identity theft charges, each of which carry a statutory maximum penalty of 15 years in prison. She is also charges with three counts of aggravated identity theft, which carry a mandatory two-year prison term that must run consecutive to any other sentence imposed in the case.

            Count 31 in the superseding indictment is another new count that charges Morrow with misprision of a felony for allegedly failing to report the health care fraud scheme to authorities. This charge carries a statutory maximum penalty of three years in prison.

            Dr. Morrow is scheduled to be sentenced by Judge Staton on December 2, at which time he will face a statutory maximum sentence of 23 years in federal prison.

          The investigation into the Morrows and TMI was conducted by the FBI, IRS Criminal Investigation and the California Department of Insurance.

          The case is being prosecuted by Assistant United States Attorney Charles Pell of the Santa Ana Branch Office.

A Sun Valley, California, man pleaded guilty today to charges related to a 2013 shooting at Los Angeles International Airport (LAX) in which he murdered a Transportation Security Administration (TSA) officer.

Attorney General Loretta E. Lynch, Secretary Jeh Johnson of the Department of Homeland Security, U.S. Attorney Eileen M. Decker of the Central District of California and Assistant Director in Charge Deirdre Fike of the FBI’s Los Angeles Field Office made the announcement.

Paul Anthony Ciancia, 26, 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, before U.S. District Judge Philip S. Gutierrez of the Central District of California. 

“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.”

“Our Transportation Security Officers put their lives on the line each and every day to keep the flying public safe,” said Secretary 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 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 U.S. 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.”

“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 Assistant Director in Charge 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, in early 2013, Ciancia purchased a semiautomatic rifle, 500 rounds of ammunition and 10 magazines for the rifle.  On the morning of Nov. 1, 2013, Ciancia modified two pieces of luggage and zip-tied them together to conceal his loaded rifle inside.   

Ciancia admitted that later that morning, he entered LAX Terminal Three, removed the loaded rifle from his modified luggage and fired at and killed TSA Officer Gerardo Hernandez while he was checking passengers’ travel documents.  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 as a civilian, Brian Ludmer, he admitted, all of whom sustained serious injuries and required surgery but survived the attack.  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.

The Los Angeles Joint Terrorism Task Force (JTTF) investigated the case.  The JTTF is led by the FBI and includes agents and officers from 45 other local, state and federal agencies.

The Los Angeles Airport Police; the Los Angeles Police Department; the Los Angeles County Sheriff's Department; TSA; the Federal Air Marshal Service; the Los Angeles Port Police; the Long Beach, California, Police Department; the Air Force Office of Special Investigations; the Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Customs and Border Protection; the U.S. Secret Service; the Los Angeles Fire Department; Los Angeles International Airport Operations; the U.S. Marshals Service; the U.S. Postal Inspection Service; and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations provided substantial assistance in the investigation.

First Assistant U.S. Attorney Patrick R. Fitzgerald of the Central District of California, Assistant U.S. Attorney Melissa Mills of the Central District of California’s Terrorism and Export Crimes Section, Assistant U.S. Attorney Joanna M. Curtis of the Central District of California’s Violent and Organized Crime Section and Trial Attorney Michael S. Warbel of the Criminal Division’s Capital Crimes Section prosecuted the case.

            LOS ANGELES – The United States Attorney’s Office is hosting a conference next week that will bring together first responders and experts who will provide their insights on last year’s terrorist attack in San Bernardino and important lessons learned that can be applied to other large-scale incidents.

            Importantly, the conference on Tuesday, September 6, will feature discussions on better serving the victim population after a large-scale event. The San Bernardino terror attacks of December 2, 2015 will be the primary case study.

            During the conference, experts will provide an overview of the initial response to the San Bernardino attacks, lessons learned from the coordinated response by first responders, the variety of issues that the victims will face, the need for victim-support teams, and how the victim-support teams can be most effective in their unique roles.

            “While we hope to never again experience an event like the San Bernardino attack, there are important lessons we can learn and share about responding to such attacks. These lessons can be applied to a variety of incidents that we may face in this district and will help us be more prepared for large-scale events in the future,” said United States Attorney Eileen M. Decker. “The speakers at our conference will highlight the best practices for responding to large-scale incidents, with an important focus on providing services to victims. The victim-oriented presentations will focus on everything from providing the initial medical care to information about court proceedings. Our goal is to increase our ability to provide the maximum available assistance to the victims of such an incident, both during the incident and over the longer term. The victims of such incidents deserve nothing less.”

            Speakers at the event will include United States Attorney Eileen M. Decker; San Bernardino Assistant Chief of Police Eric McBride; Dr. Michael Neeki, Chief of Emergency Services at Arrowhead Medical Center and members of the FBI’s Victim Services team who responded to the incident in San Bernardino. The event will be on Tuesday, September 6, at the California Endowment Center, 1000 North Alameda Street in downtown Los Angeles. The news media is invited to attend ONLY the opening session of the conference from 8:30 a.m. to 9:00 a.m.

            LOS ANGELES – The president of an Anaheim-based bulk mailing company this week paid the United States $3 million to resolve a federal investigation into allegations that the mailer systematically misclassified postage and defrauded the U.S. Postal Service (USPS) out of millions of dollars in postage fees.

            The payment, which was made on Wednesday and announced today, resolves a civil investigation into Advantage Mailing, LLC, which handles bulk mailings and provides design, printing and mailing services for a broad range of customers. An investigation by Postal authorities determined that Advantage had submitted to the USPS false postage statements that misrepresented, among other things, the type and amount of postage affixed to millions of pieces of mail handled by the company. As a result, Advantage paid less to the USPS – millions of dollars less – than was actually due in postal fees.

            “By misclassifying postage and submitting false statements to the Postal Service, this company avoided paying millions of dollars,” said United States Attorney Eileen M. Decker. “The settlement and the resulting multi-million dollar payment to the government puts others on notice that postal violations will not be tolerated and every entity that attempts to defraud the United States will be held accountable.”

            Under USPS regulations, mailers must complete and submit a postage statement to the Postal Service that identifies the particulars of each mailing, such as type of postage used, the amount of pre-paid postage and number of pieces mailed. The USPS relies upon these postage statements to determine the amount of postage fees due, so mailers such as Advantage are required to truthfully and accurately complete the statements.

            “A theft from the Postal Service is a theft from the American public,” said Postal Inspector in Charge Robert Wemyss. “Postal Inspectors will vigorously pursue and bring to justice anyone who cheats the Postal Service out of revenue. The Postal Inspection Service appreciates the strong stance the United States Attorney’s Office has taken against those who seek to take advantage of the Postal Service by underpaying postage.”

            Advantage agreed to the civil settlement without admitting any wrongdoing. Advantage’s president, Thomas C. Ling, paid the settlement on August 31.

            The government’s investigation was conducted by the U.S. Postal Inspection Service and the U.S. Postal Service Office of Inspector General.

            The settlement was handled by Assistant United States Attorney Deborah Yim of the Civil Division’s Civil Fraud Section.

            LOS ANGELES – The former operator of the Normandie Club in Gardena has been ordered to pay a $1 million criminal fine and to forfeit nearly $1.4 million after pleading guilty to violating the Bank Secrecy Act by failing to report large cash transactions to federal authorities.

            During a federal court hearing yesterday, United States District Judge S. James Otero imposed the sentence on the Normandie Club, a partnership that sold the casino last month after state gaming authorities revoked its license to operate the facility.

            As a result of a plea agreement between federal prosecutors and the Normandie Club, the casino pleaded guilty in January to violating anti-money laundering provisions of the Bank Secrecy Act. The partnership specifically pleaded guilty to failing to maintain an effective anti-money laundering program and conspiring to avoid reporting to the government the large cash transactions of some of the casino’s “high-roller” gamblers. Judge Otero ordered the Normandie Club to pay a $500,000 fine for each of the two counts, for a total fine of $1 million.

            Judge Otero also ordered the Normandie Club to forfeit $1,383,530, which represents cash transactions in 2013 that were over $10,000 and were not reported properly to federal authorities.

            Under federal law – specifically, the Bank Secrecy Act – casinos like the Normandie Club are required to implement and maintain programs designed to prevent criminals from using the casino to launder the large sums of cash that illegal activity can generate. For example, casinos must record and report to the government the details of transactions involving more than $10,000 by any one gambler in a 24-hour period.

            “Our money laundering laws were enacted to prevent criminals from concealing the source of large sums of cash generated by illegal activity,” said United States Attorney Eileen M. Decker. “Casinos and cardrooms such as Normandie are cash-intensive businesses that are particularly attractive for use by criminals seeking to launder their ill-gotten gains, so they must be vigilant in meeting their obligations under those laws.”

            In the plea agreement filed earlier this year, the Normandie Club admitted that its casino engaged independent gambling “promoters” to locate high-rollers and then steer those gamblers to the casino. As part of the conspiracy, “high-level personnel” at the casino, including the casino’s president and chief operating officer, agreed to avoid reporting to the government the large sums of cash certain high-rollers would bring to the casino. According to the plea agreement, the casino avoided reporting transactions related to the high-rollers by submitting Currency Transaction Reports that named the promoter instead of the gambler, by “structuring” transactions so that they appeared to be less than $10,000, or simply by failing to record large transactions.

            During one six-week period in 2013, a single high-roller won more than $1 million from another party at the casino, and the casino conspired to conceal the identity of that high-roller.

            “This sentence demonstrates the government’s ability to enforce the anti-money laundering laws used to ensure that certain high-rollers do not remain below the radar,” stated Anthony J. Orlando, Acting Special Agent in Charge for IRS Criminal Investigation. “In partnership with the U.S. Attorney’s Office, IRS CI will continue to protect the United States financial system through the investigation and prosecution of individuals and organizations that attempt to launder their criminally derived proceeds.”

            The investigation into the Normandie Club was conducted by IRS Criminal Investigation and the California Department of Justice’s Bureau of Gambling Control. This case was handled by Assistant United States Attorney Christina T. Shay of the Violent and Organized Crime Section and Assistant United States Attorney John J. Kucera of the Asset Forfeiture Section.

          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.

          LOS ANGELES – The last of six defendants who conspired to use stolen identities to file fraudulent tax returns with the Internal Revenue Service that sought more than $1.5 million in false tax refunds was sentenced today to 51 months in federal prison.

          Wesley Wade Hunter, 47, a former Los Angeles resident who was in a California prison when he committed the federal tax offense, was sentenced by United States District Judge George H. Wu. In addition to the prison term, Judge Wu ordered Hunter to pay the IRS $104,283 in restitution.

          Hunter, who also goes by the moniker “Godfather,” pleaded guilty in April to one count of conspiracy to defraud the United States by obtaining the payment of false claims, namely tax refunds.

          “This defendant was able to victimize both the United States government and individuals who had tax returns fraudulently filed in their names while an inmate in a state prison,” said United States Attorney Eileen M. Decker. “Fortunately, the hard work of IRS personnel enabled them to identify and reject the majority of the defendant’s fraudulent tax refund claims. The defendant’s persistent criminal conduct warranted the significant federal sentence imposed today.”

          According to court documents, during the course of the scheme that was shut down in May 2012, Hunter filed or assisted in the filing of fraudulent tax returns that sought refunds using the identities of over 250 individuals. Hunter and the other co-conspirators obtained the names, Social Security numbers, dates of birth, and other personal identification information of individuals without their knowledge and consent.  Hunter and others knowingly filed false federal income tax returns that claimed fraudulent tax refund payments based upon fraudulent wage and withholding amounts under their own names and under the names and Social Security numbers of the identity theft victims. Members of the conspiracy cashed the fraudulently obtained refund checks.

          In all, Hunter’s conduct resulted in an intended loss of more than $1.5 million and an actual loss of approximately $104,283 to the United States government.

          “Using the names and identities of over 250 taxpayers, Mr. Hunter operated a massive tax fraud and identity theft conspiracy scheme which attempted to defraud the U.S. government of over $1.5 million,” stated Anthony J. Orlando, Acting Special Agent in Charge of IRS Criminal Investigation. “Let this conviction serve as a warning to others contemplating the same type of scheme – IRS Criminal Investigation will continue to vigorously pursue those who unjustly enrich themselves by stealing identities and filing false income tax returns.”

          Hunter is one of six defendants who pleaded guilty to this scheme, which operated in both San Luis Obispo and Los Angeles counties. In January of 2015, a federal grand jury returned a 17-count indictment charging Hunter and five others with identity theft and the tax refund conspiracy scheme.  The others named in the indictment are:

• Crystal Coleman, 59, of Los Angeles, who pleaded guilty to conspiracy, was sentenced to 17 months in prison and was ordered to pay restitution in the amount of $207,071;

• Latasha Coates, 36, of Los Angeles, who pleaded guilty to conspiracy, was sentenced to two months in prison and was ordered to pay $65,648 in restitution;

• Guadalupe Flores, 34, of Los Angeles, who pleaded guilty to theft of public money, was sentenced to three years of probation and was ordered to pay restitution in the amount of $153,169;

• Lisa Tavra, 44, of Las Vegas, Nevada, who pleaded guilty to conspiracy, was sentenced to three years of probation and was ordered to pay $30,026 in restitution; and

• Lourdes Brown, 48, of Modesto, who pleaded guilty to conspiracy, also was sentenced to three years of probation and was ordered to pay $124,234 in restitution.

          This investigation was conducted by IRS Criminal Investigation. The case was prosecuted by Assistant United States Attorney Ryan White of the General Crimes Section.

          RIVERSIDE, California – Four individuals associated with the Eastside Riva gang – including its leader, Ernie “Gordo” Hernandez, 55 – were arrested yesterday after being charged earlier this week in federal court with distribution of methamphetamine.

          The other defendants arrested– Angel “Bundy” Hernandez, 34, who is the son of Ernie Hernandez; Gilberto Diaz, 30; and Bryan Deniz, 25 – are also named in a criminal complaint that alleges they distributed methamphetamine from July 20 through August 9. Several of the drug transactions discussed in the complaint affidavit occurred at Primestone Tires Auto Repair on 14th Street in Riverside.

          “Criminal street gangs like Eastside Rivera bring violence and drugs into our communities,” said United States Attorney Eileen M. Decker. “As yesterday’s arrests demonstrate, law enforcement will continue to prosecute gang leaders and members to make our neighborhoods safer.”

          The case against the four defendants is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Los Angeles Division.

          “Criminal street gangs that claim its territory and attempt to traffic drugs and use firearms to bring violence into our communities for their profit will not be tolerated,” said ATF Los Angeles Special Agent in Charge Eric Harden. “ATF has zero tolerance for this criminal activity and will continue to eradicate it from our communities.”

          Yesterday’s arrests stem from an investigation targeting violent activity in and around the Riverside area, where the Eastside Riva gang claims territory. The criminal complaint filed by the United States Attorney’s Office on Wednesday alleges that the defendants engaged in two transactions each involving approximately one pound of methamphetamine and another transaction involving about one-half pound of the drug.

          The four defendants arrested appeared in federal court yesterday afternoon in Riverside. The defendants remain in custody and are set for arraignment in Los Angeles on September 29, 2016 at 1 PM PDT. 

          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.

          If they are convicted of the drug trafficking offense alleged in the indictment, Ernie Hernandez, Deniz and Diaz would each face a mandatory minimum sentence of 10 years in federal prison and a sentence of up to life. If convicted, Angel Hernanez would face a mandatory minimum sentence of five years and a sentence of up to 40 years in federal prison.

          The Riverside Police Department and Los Angeles Police Department were both instrumental in the Eastside Riva investigation.

          This case is being prosecuted by Assistant United States Attorney Reema El-Amamy.

          LOS ANGELES – Thirty-three defendants were charged as part of a sweep targeting criminal activity that has victimized the United States Postal Service (USPS) and its customers. Most of the defendants charged as part of the sweep are USPS employees who allegedly stole mail, embezzled from the agency or, in one case, failed to deliver nearly 50,000 pieces of mail.

          Arrest warrants were issued for 6 of the 33 defendants, who were recently charged as a result of investigations by the USPS’s Office of Inspector General. Most of the defendants were charged in indictments that were returned by federal grand juries on Wednesday and Thursday this week.

          The 33 defendants are charged across 28 cases, about half of which allege mail theft and/or possession of stolen mail by USPS employees and contractors. Other cases charge USPS employees with conspiracy, embezzlement, bank fraud, and false statements. Five of the cases allege crimes by non-employees, including mail theft and fraud related to the use of credit cards that had been stolen from the mail.

          In one case announced today, the former local area president of the Mail Handlers Union was charged with conspiracy and possession of stolen mail. Jarol Garcia, 33, of Hemet, who formerly worked at the Moreno Valley Delivery Distribution Center as a mail handler, stole mobile phones from parcels going through the center and traded the phones after offering them for exchange on a website, according to an indictment, which also alleges that Garcia, in December 2015, possessed at least 166 mobile phones stolen from the mail.

          Another case charges a mail carrier from the Mid-City District of Los Angeles with conspiracy to commit access device (credit card) fraud and to steal mail.  The indictment alleges that Norman A. Muschamp, 48, was part of a conspiracy to use information belonging to identity theft victims to order pre-paid PayPal debit cards that were sent to primarily non-existent addresses on his mail route.  Muschamp allegedly participated in the scheme by obtaining the PayPal debit cards from the mail and delivering them to co-conspirators in exchange for cash. Investigators who are continuing to investigate the overall scheme believe it caused hundreds of thousands of dollars in losses.

          In another case, a postal carrier from the Sawtelle District of Los Angeles was charged with delaying the mail by effectively hoarding the mail she was entrusted to deliver. Sherry Naomi Watanabe, 48, was found to have more than 48,000 pieces of mail in her residence, according to a plea agreement, that was supposed to be delivered to mail customers on her route in Placentia.

          “The mail system plays an important role in our country's commerce and social communication.  Maintaining its integrity is vital,” said United States Attorney Eileen M. Decker. “Mail theft across Southern California has increased recently, which is significant since this type of crime tends to be a precursor to other crimes like identity theft and drug offenses.  As a result, we are stepping up enforcement activities, including dealing aggressively with corruption within the Postal Service.”

          “The overwhelming majority of Postal Service employees are honest and dedicated public servants who are worthy of our trust. However, when employees engage in criminal activity, our agency will aggressively investigate these matters to protect the overall integrity of the Postal Service,” said U.S. Postal Service Office of Inspector General Special Agent in Charge Brian Washington.

          Other cases filed as part of the sweep include the following:

• Vince Johnson, 30, of Carson, who worked for a USPS contractor, was charged with possession of stolen mail;

• Jose Hernandez, 35, of Long Beach, who worked for a USPS contractor, was charged with mail theft;

• Tamika Deloach, 38, of Wilmington, a mail carrier, was charged with possessing stolen mail related to checks she allegedly stole from the mail and deposited into her credit union account;

• Charell Watson, 32, of West Covina, formerly a mail processing clerk, was charged with theft of mail by a postal employee;

• Nicole Elwood, 45, of Atascadero, was charged with theft of mail by a postal employee for allegedly stealing mail items containing medications, including medications sent from the U.S. Department of Veterans Affairs to veterans;

• Kayla Young, 23, of Diamond Bar, was charged with mail theft by a postal employee;

• Michael Smith, 43, of Lake Elsinore, was charged with mail theft by a postal employee for allegedly stealing money orders from a mail envelope;

• Justin Brewster, 25, of Lake Elsinore, a USPS mail processing clerk, was charged with mail theft by a postal employee for allegedly stealing video games that were mailed to or from Gamefly;

• Christian Wesley Johnson, 27, of Los Angeles (90044), a postal clerk, was charged with mail theft by a postal employee for stealing mobile phones, which, according to his plea agreement, were valued at approximately $15,000; and

• Deion Deshazier, 27, a former mail carrier, of Hawthorne, was charged with dumping and delaying mail;

• Betty Owens, 73, of Oakland, a former mail handler, was charged with a misdemeanor offense of theft of government property (for fraudulent mileage reimbursements).

• Lisa Thornberry, 31, of Rancho Cucamonga, and Ian McCown, 34, of Alta Loma, were charged with conspiring with each other to steal mail and possessing stolen mail;

• Chelsea Green, 24, of Canoga Park, a former mail carrier, was charged with bank fraud for allegedly misusing a USPS-issued gas card and fraudulently using the PIN of another USPS employee to fuel her personal vehicle;

• James Freeman, 30, of Lakewood, a former mail carrier, was charged with bank fraud for allegedly misusing a USPS-issued gas card;

• Mary Williams, 60, of Los Angeles (90002), a former USPS sales associate, was charged with making a false entry in an official record related to her alleged embezzlement of funds from USPS;

• Victoria Uribe, 48, of Rancho Cucamonga, a former USPS sales associate, was charged with making a false entry in an official record related to her alleged embezzlement of funds from USPS;

• Lucy Plambeck, 66, of Paso Robles, a former USPS sales associate, was charged with making a false entry in an official record related to her alleged embezzlement of funds from USPS;

• Monica Cavalier, 40, of Victorville, a former sales associate, was charged with making a false entry in an official record related to the sale of stamps related to her alleged embezzlement of funds from USPS;

• Johnnie Macon, 34, of Los Angeles (90011), a former postal support employee, who was charged with embezzlement of postal funds and making a false entry in an official record related to the fraudulent voiding of postal money orders;

• Gary Nygard, 49, of Mission Hills, a former contract driver, was charged with conspiracy to steal government property by siphoning approximately 385 gallons of diesel fuel (paid for by USPS) from contractor trucks;

• Raymond Coffin, 24, of Adelanto, a mail carrier, was charged with bank fraud for allegedly misusing a USPS-issued gas card;

• Eugene Brown, 43, of Compton, was charged with making a false statement relating to his criminal history in his employment application to work for the USPS;

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

          Defendants charged as part of the sweep will be arraigned in the United States District Court in Los Angeles, Santa Ana, and Riverside.

          The cases announced today were filed by Special Assistant United States Attorney Ashwin Janakiram of the General Crimes Section.

            LOS ANGELES – A Long Beach man has pleaded guilty to a federal fraud charge related to a long-running mortgage rescue scheme that involved nearly $3 million in illegal fees charged to distressed homeowners and about 200 fraudulent bankruptcy petitions.

            Karl Robinson, 52, pleaded guilty Tuesday to one count of bankruptcy fraud before United States District Judge Manuel Real.

            Robinson operated the foreclosure rescue scheme from 2008 until 2013 under his own name and other names, including “Stay In Your Home Today,” “21st Century Development” and “Genesis Ventures Corporation.” The businesses provided illegal foreclosure- and eviction-delay services to homeowners who had defaulted on their mortgages. The purpose of the scheme was to obtain money from distressed homeowners, and in exchange Robinson was able to hinder, delay and obstruct lawful foreclosure and eviction actions against property owners who had defaulted on their mortgages.

            As part of the scheme, Robinson filed bogus grant deeds in county records offices and other fake documents in formal eviction proceedings to make it appear that fictional people held interests in distressed properties. He then fraudulently filed bankruptcy petitions in the names of the fictional people to trigger an “automatic stay” in the bankruptcy cases. The filing of a bankruptcy petition has the effect of suspending all creditor actions, including foreclosure proceedings commenced by mortgage lenders and eviction actions commenced by purchasers of foreclosed properties.

            “This defendant filed scores of fraudulent bankruptcy actions – sometimes on multiple occasions in relation to a single property,” said United States Attorney Eileen M. Decker. “He took advantage of distressed homeowners by stealing identities and lying to them about what he could do for their properties as long as they continued to pay his fees.”

            Robinson admitted that as part of his scheme he obtained nearly $3 million from distressed homeowners and filed more than 200 fake bankruptcies.

            “Mr. Robinson used his position as a pastor gain the trust of distressed homeowners, only to lure them with false hope while he worked the system to get rich,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The FBI and our partners with the FHFA-OIG and the U.S Attorney's Office will continue to combat schemes targeting vulnerable homeowners.”

            As a result of today’s guilty plea, Robinson faces a statutory maximum sentence of five years in federal prison when he is sentenced by Judge Real on November 28.

            The criminal case against Robinson is the result of an investigation by the Federal Bureau of Investigation and the Federal Housing Finance Agency, Office of the Inspector General (FHFA-OIG).

            “Karl Robinson engaged in a complicated fraud scheme that preyed on others misfortune to line his own pockets,” stated FHFA-OIG’s Special Agent in Charge Leslie Demarco. “Today’s guilty plea is the first step toward taking responsibility for his criminal activity.”

            The case against Robinson was prosecuted by Special Assistant United States Attorney Kerry L. Quinn of the Major Frauds Section.

            LOS ANGELES – The insurance carrier for a defunct, for-profit cosmetology school has paid the United States $8,631,000 to resolve civil allegations that the school obtained federal student loan funds for ineligible students who received bogus high school diplomas.

            B&H Education, Inc. (B&H), which operated the Marinello Schools of Beauty in locations across Southern California, was accused in a “whistleblower” lawsuit of improperly assisting adult students who did not have high school diplomas to obtain bogus high school diplomas. B&H allegedly allowed students seeking high school diplomas to take their tests without proctors, to use their phones and workbooks to look up answers during tests, and to repeat the same tests until they passed.

            Many of the students who received their high school diplomas through this program then enrolled at B&H, and, with B&H’s assistance, applied for and received federal student loans for which they were not eligible. Under U.S. Department of Education (ED) regulations, a student must have a valid high school diploma or its equivalent in order to receive federal student loans.

            “The operator of this school manipulated the system in order to fraudulently secure student aid funds without which the school could not function,” said United States Attorney Eileen M. Decker. “Today’s settlement demonstrates my office’s commitment to ensuring the integrity of federal programs, and the public monies used to support them.”

            “Our students depend on higher education institutions to prepare them for careers through a quality education. Unfortunately, some schools violate their trust through deceptive marketing practices and defraud taxpayers by giving out student aid inappropriately. These unscrupulous institutions use questionable business practices or outright lie to both students and the federal government,” said ED Under Secretary Ted Mitchell. “In these cases we are taking aggressive action to protect students and taxpayers from further harm by these institutions.”

            The allegations against B&H first surfaced in a qui tam, or whistleblower, lawsuit filed by six former B&H employees in 2013 under the False Claims Act. Pursuant to the provisions of the False Claims Act, as a result of the settlement announced today, the six whistleblowers collectively will receive $2.5 million for filing the lawsuit on behalf of the United States.

            The settlement is with the insurance carrier because B&H went out of business earlier this year after the ED denied B&H’s recertification application to continue participating in federal student financial assistance programs. B&H’s only remaining non-secured asset was its insurance policy issued by Philadelphia Indemnity Insurance Company. In April, United States District Judge R. Gary Klausner allowed the insurer to intervene in the civil lawsuit.

            In February, the ED cut off Marinello's participation in the federal student aid program after determining that the institution was knowingly requesting federal aid for students based on invalid high school diplomas, underawarding federal student aid to students, charging students for excessive overtime and engaging in other acts of misrepresentation. This action included 23 Marinello campuses in Las Vegas, Nevada; Los Angeles; Burbank, California; Moreno Valley, California; and Sacramento, California. The entire Marinello school chain – with 56 campuses across the nation – received more than $87 million in Pell Grants and federal student loans for the 2014-15 school year. The entire chain closed shortly after the action was initiated.

            In addition to the $8.6 million payment to the United States, pursuant to the False Claims Act, the insurer will also pay $2,369,000 to the six whistleblowers’ attorneys, who have litigated the case since January 2015 and partnered with the U.S. Department of Justice to negotiate the settlement.

            Philadelphia Indemnity agreed to the civil settlement without admitting any wrongdoing by its insured, B&H, and paid the settlement on August 15. On August 22, Judge Klausner dismissed the case against B&H, United States ex rel. Caron, et al. v. B&H Education, Inc., et al., CV13-5256-RGK.

            The government’s investigation was conducted by the U.S. Department of Education’s Multi-Regional School Participation Division, the Administrative Actions and Appeals Service Group, the Office of the General Counsel, and the Office of Inspector General.

            The settlement was handled by Assistant United States Attorney Abraham Meltzer of the Civil Division’s Civil Fraud Section.

            LOS ANGELES – A Salvadoran national from Van Nuys has been sentenced to 145 months in federal prison after being convicted of using the Internet to distribute child pornography.

            Denis Aviles Salguero, 31, was sentenced on August 18 by United States District Judge Fernando M. Olguin. Following the completion of his sentence, Salguero will be on supervised release for 15 years.

            Following a three-day trial in September 2013, Salguero was found guilty of 17 counts of distributing child pornography, one count of receiving child pornography and one count of possessing child pornography.

            The evidence presented at his trial showed that Salguero traded child pornography with others, sharing images in his possession to obtain new pictures and video files.

            “This defendant freely shared his child pornography collection for the purpose of obtaining additional images, which resulted in his conviction for distribution of child pornography,” said United States Attorney Eileen M. Decker. “The demand for child pornography drives a black market industry that relies on the sexual abuse of children and causes the continued victimization of those children as the images as spread around the world via the Internet.”

            The case against Salguero stemmed from him uploading more than a dozen images of child pornography to a Yahoo usergroup page. Yahoo reported the postings to the National Center for Missing and Exploited Children, which alerted law enforcement officials. Authorities executed a search warrant at Salguero’s residence on July 20, 2010 and recovered a laptop computer that showed Salguero had used email to receive and send child pornography on numerous occasions in 2009 and 2010. An examination of the laptop revealed 402 still images and 67 videos depicting child pornography, most of which involved boys between the ages of 6 and 14. Some of the images and videos were of boys being molested and raped.

            The investigation in this case was conducted by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI).

            “The sexual exploitation of innocent children is unconscionable, and together with our law enforcement partners we will exhaust every resource to ensure these predators are punished,” said Joseph Macias, special agent in charge of HSI Los Angeles. “We owe it to the young victims in these cases, who will carry the emotional and physical scars of these crimes with them for the rest of their lives.”

            This case was prosecuted by Assistant United States Attorney Christina T. Shay of the Violent and Organized Crime Section.

            SANTA ANA, California – A Santa Ana man who intentionally aimed a laser pointer at a law enforcement helicopter investigating a serious traffic accident was sentenced yesterday afternoon to 15 months in federal prison.

            Mario Deleon Lopez, 35, was sentenced yesterday by United States District Judge Andrew J. Guilford, who said the offense was a “distraction” to the people in the air and that “people could die.”

            Lopez pleaded guilty in March to a felony offense of aiming a laser pointer at an aircraft and admitted that he pointed a green laser at a helicopter operated by the Orange County Sheriff’s Department (OCSD).

            On the evening of November 14, 2015, OCSD tactical flight deputies responded to a traffic accident in Santa Ana involving an overturned vehicle. The deputies were searching the area to see whether anyone had been thrown from the vehicle when their helicopter was struck with laser beam. The helicopter was struck multiple times with a green laser that illuminated the helicopter’s cockpit in an attack the tactical flight officer called “relentless.”

            Following the laser attacks, the deputies, along with the Santa Ana Police Department, successfully tracked the source of the laser to a suspect located in the backyard of a residence in Santa Ana. Police on the ground responded to the residence and took Lopez into custody on state charges of pointing a laser at an aircraft. Lopez subsequently posted bail and was released from local custody while the federal investigation continued and culminated with the filing of the indictment.

“This defendant knew that pointing the laser at the helicopter could cause the pilot blindness and endanger those operating the aircraft, but committed the crime anyway,” said United States Attorney Eileen M. Decker. “This was a senseless crime that warrants the sentenced imposed by the court.”

            The investigation into Lopez was conducted by the Orange County Sheriff’s Department, the Santa Ana Police Department and the FBI.

            The case was prosecuted by Assistant United States Attorney Mark Takla of the Terrorism and Export Crimes Section.

            Reports of laser attacks have increased dramatically in recent years as laser devices have become more affordable and widely available. In addition, technology has improved the effectiveness of laser devices, with a resulting increase in the potential safety hazards for pilots operating aircraft, as well as their passengers and crew. Such safety hazards include temporary distraction and impaired vision, which is particularly dangerous during the critical takeoff or landing phase of flight. California consistently leads the nation in reports of laser attacks.

            LOS ANGELES – A Riverside man who pleaded guilty to being a convicted felon in possession of a stolen handgun has been sentenced to four years in federal prison.

            Joseph Sanchez, 37, received the 48-month sentence at a hearing yesterday before United States District Judge Virginia A. Phillips.

            Sanchez pleaded guilty on May 16 to one count of being a felon in possession of a firearm and ammunition.

            This case stemmed from a September 18, 2015 probation search by the Riverside Police Department. When officers entered the residence, Sanchez was sitting on a couch with a bag on his lap. Inside the bag, officers found a loaded 9mm Glock. Investigators determined that the handgun was reported stolen from a Riverside County Sheriff’s Deputy on July 3, 2015. In addition to the loaded handgun, police also found Sanchez to be in possession of another bag that contained another nine 9mm rounds.

            “This defendant has a lengthy and serious criminal record which disqualifies him from possessing a firearm,” said United States Attorney Eileen M. Decker. “His new prison sentence was warranted because, not only was he in possession of a handgun and ammunition, he knew the gun had been stolen from a police officer and he was under court supervision at the time after being convicted in a narcotics case.”

            This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives.

            “Agents learned Mr. Sanchez did not hesitate to engage in criminal activity, even after being previously convicted of similar offenses,” said ATF Special Agent in Charge Eric D. Harden. “ATF will investigate and pursue prosecution of those that continue to threaten the safety of our neighborhoods.”

            This case was prosecuted by Special Assistant United States Attorneys Stephen T. Merrill and Deana L. Bohenek of the Riverside Branch Office.

            LOS ANGELES – A Studio City man was sentenced today to 65 months in federal prison for possessing more than 1,400 credit card profiles that had been stolen from consumers who used gas pumps equipped with illegal “skimmers.”

            Koren Robert Kechedzian, 25, was further ordered by United States District Judge Philip S. Guttierez to pay restitution of $114,135 to victim financial institutions that suffered losses when the stolen credit card numbers were used for fraudulent purchases.

            At the conclusion of a one-week trial in March, Kechedzian was convicted of two counts of credit card fraud (specifically, two counts of possession of 15 or more counterfeit access devices) and two counts of aggravated identity theft.

            The federal jury found that Kechedzian possessed two USB flash drives – which are commonly called “thumb drives” – that contained stolen credit card information. The portable drives were found at Kechedzian’s residence when federal authorities executed a search warrant in June 2013. At that time, investigators also recovered an illegal skimming device designed to be installed in gas station pumps to steal credit card data.

            Bank records examined by investigators established that the stolen credit cards numbers on the USB flash drives came from Chevron gas stations in Palmdale and Moorpark, and testimony at trial showed that the data on portable drives was consistent with the output from a credit card skimming device.

            “Stolen credit card information found in this defendant’s residence was used to obtain products at gas stations and other retail outlets,” said United States Attorney Eileen M. Decker. “The investigation also linked the defendant to senior members of Armenian Power, a gang that has been involved in credit card schemes. This type of fraud harms millions of Americans and can be used to fund other illegal activity, which is why law enforcement is committed to uncovering these schemes and prosecuting the perpetrators.”

            The investigation in this case was conducted by special agents with IRS Criminal Investigation, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the United States Secret Service. The investigation into Kechedzian stemmed from the discovery in 2013 of two counterfeit credit cards that were embossed with Kechedzian’s name.

            “Today’s sentencing sends a clear message to the defendant and others thinking about taking such action that credit card fraud will be taken seriously and the punishment will involve a long prison sentence,” stated IRS Criminal Investigation’s Acting Special Agent in Charge Anthony J. Orlando. “As credit card fraud becomes more prevalent, IRS Criminal Investigation will continue to use our forensic skills to protect consumers from fraud artists committed to taking the identities of innocent victims.”

            Special agents testifying at trial said that credit card fraud rings install skimming devices in gas station pumps and obtain credit card numbers from the devices and transmit the stolen data with Bluetooth technology. Customers who use these compromised gas pumps are the unwitting victims of the credit card fraud.

            “As this case demonstrates, those who steal the personal information of unsuspecting citizens to feed their own greed will get the justice they deserve,” said Joseph Macias, special agent in charge for HSI Los Angeles. “HSI will continue to work closely with its federal and local law enforcement partners to target these schemes that not only harm merchants and financial institutions, but cause considerable pain and ongoing headaches for the innocent consumers whose information has been stolen.”

            The case against Kechedzian was prosecuted by Special Assistant United States Attorney Kerry L. Quinn of the Major Frauds Section and Assistant United States Attorney Scott Paetty of the General Crimes Section.

            LOS ANGELES – A doctor from Pasadena who falsely certified that at least 79 Medicare and Medi-Cal patients were qualified for hospice care because they were terminally ill – when, in fact, the vast majority of them were not dying – has been sentenced to four years in federal prison.

            Boyao Huang, 43, was sentenced on Monday by United States District Judge S. James Otero. In addition to the prison term, Judge Otero ordered Huang to pay $1,344,204 in restitution.

            At the conclusion of a two-week trial in May, Huang was found guilty of four counts of health care fraud for participating in a scheme related to the Covina-based California Hospice Care (CHC). Between March 2009 and June 2013, CHC submitted approximately $8.8 million in fraudulent bills to Medicare and Medi-Cal for hospice-related services, and the public health programs paid nearly $7.4 million to CHC.

            A second doctor who was convicted at trial – Sri Wijegoonaratna, known as Dr. J., 61, of Anaheim, who was found guilty of seven counts of health care fraud – is scheduled to be sentenced by Judge Otero on February 13, 2017.

            “This scheme preyed upon dozens of patients and their families who were led to believe that their worst nightmare had come true – that they had life-ending illnesses,” said United States Attorney Eileen M. Decker. “Criminals such as the defendants in this case who steal from taxpayers by defrauding the Medicare system and who victimize vulnerable individuals like medical patients deserve significant prison sentences.”

            In addition to the two doctors, eight other defendants were charged in the scheme and have pleaded guilty to health care fraud charges. Those other defendants include a Placentia woman who purchased CHC in 2007 and operated the facility after being charged and incarcerated in another health care fraud scheme. Priscilla Villabroza, 70, who pleaded guilty in December 2015 to one count of health care fraud, was sentenced in June to eight years in federal prison.

            As part of the CHC fraud scheme, Villabroza and her daughter – who was the nominal owner while Villabroza was in custody – paid patient recruiters known as “marketers” or “cappers” to bring in Medicare and Medi-Cal beneficiaries. CHC nurses performed “assessments” to determine whether the beneficiaries were terminally ill and, regardless of the outcome, Wijegoonaratna and Huang certified that the beneficiaries were terminally ill – even though the vast majority of them were not dying. CHC personnel altered medical records in response to Medicare audits to make the beneficiaries appear sicker.

            By the time the scheme was shut down in June 2013, Medicare and Medi-Cal had paid millions of dollars for medically unnecessary hospice-related services.

            The investigation into California Hospice was conducted by the United States Department of Health and Human Services, Office of Inspector General; the Federal Bureau of Investigation; the California Bureau of Medi-Cal Fraud & Elder Abuse; and IRS Criminal Investigation.

            This case is being prosecuted by Assistant United States Attorney Steven M. Arkow of the Major Frauds Section and Assistant United States Attorney Leon W. Weidman, Special Counsel to the United States Attorney.

            LOS ANGELES – A Northern California nurse’s assistant was arrested this morning on federal cyberstalking and hacking charges related to harassment and threats targeting television personality Kristen Jenner, members of her family and two assistants.

            Christina Elizabeth Bankston, 36, of Newark, California, was arrested at her residence Thursday morning by special agents with the Federal Bureau of Investigation.

            Bankston was arrested pursuant to a 15-count indictment that was returned by a federal grand jury on July 26 and unsealed today. Bankston is scheduled to make her first appearance Friday morning in United States District Court in Oakland.

            “This defendant is charged with stalking her victims over six months,” said United States Attorney Eileen M. Decker. “The defendant’s criminal conduct included hacking personal accounts, impersonating her victims, extortion, and ‘swatting.’ This case illustrates that stalking is a very serious criminal offense. Such conduct can put lives in danger, cause considerable stress and anxiety to victims, and consume considerable law enforcement resources to respond to the false emergency calls. We take seriously the defendant's reckless and outrageous electronic intrusion into the private lives of the victims, and will prosecute such conduct to the fullest extent of the law.”

            Most of the stalking and hacking was conducted anonymously while Bankston was in Northern California and consisted of her sending large numbers of text messages and e-mails, as well as making harassing phone calls, according to the indictment. Bankston allegedly used a variety of electronic means that caused or were intended to cause substantial emotional distress to the victims and their families.

            “The defendant in this case went to great lengths to stalk and even impersonate her victims to concoct disturbing scenarios that could have put lives in danger,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office.  “The violations alleged are egregious and the criminal charges should serve as a warning to anyone contemplating similar behavior targeting victims, whether they are celebrities or not.”

            According to the indictment, among other things, Bankston:

            · made multiple phone calls in which she impersonated Kristen Jenner, some of which involved false claims that Kristen Jenner had cancer and needed help, and one in which Bankston falsely told law enforcement that a family member was attempting to commit suicide at Kristen Jenner's residence;

            · sent numerous electronic messages to Kristen Jenner, in which Bankston claimed to be tracking Kristen Jenner and to have put tracking devices on Kristen Jenner’s vehicle, with some messages specifically referencing that Bankston was stalking Kristen Jenner and her family;

            · sent harassing and threatening text messages to Caitlyn Jenner;

            · gained unauthorized access to Kristen Jenner’s iCloud account, which allowed Bankston to impersonate Kristen Jenner in text messages to Caitlyn Jenner and one of Kristen Jenner’s children, some of which Bankston later threatened to release publically;

            · hacked into the email account of another member of the Jenner family;

            · made Internet postings that published telephone numbers for Kristen Jenner, two family members and a friend;

            · gained unauthorized access to Kristen Jenner’s Instagram account and publicly posted comments under Kristen Jenner's name and likeness that include disparaging comments about a member of Jenner’s family; and

            · falsely told law enforcement that someone was going to Kristen Jenner's residence to commit a massacre.

            Bankston specifically is charged with six counts of stalking, one count for each victim discussed in the indictment – Kristen Jenner, Caitlyn Jenner, two of Kristen Jenner assistants and two unnamed Jenner family members. The indictment further charges four counts of computer hacking, one count of extortion by threat targeting one of Kristen Jenner’s assistants, and four counts of aggravated identity theft related to the computer hacking offenses.

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

            Each of the cyberstalking and computer hacking offenses carries a statutory maximum penalty of five years in federal prison. The aggravated identity theft charge carries a mandatory two-year consecutive sentence.

            This case is being investigated by the FBI.

The former vice president of a California wholesale tool company was sentenced to 63 months in prison today for his role in a scheme to defraud East West Bank that resulted in losses of over $9 million.

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 Deidre Fike of the FBI’s Los Angeles Division, Acting Special Agent in Charge Anthony J. Orlando of Internal Revenue Service-Criminal Investigation’s (IRS-CI) Los Angeles Field Office and Special Inspector General Christy Goldsmith Romero of the Troubled Asset Relief Program (SIGTARP) made the announcement.

Chung Yu Yeung, aka Louis Yeung, 39, of San Dimas, California, was sentenced by U.S. District Judge Christina A. Snyder of the Central District of California.  Judge Snyder also ordered Yeung to pay $9,618,908.34 in restitution and to forfeit a San Dimas property that was purchased with proceeds of the scheme.  On March 30, 2016, Yeung pleaded guilty to one count of conspiracy to commit bank fraud and four counts of bank fraud.

As part of his guilty plea, Yeung, a former vice president of Eastern Tools & Equipment Inc. (Eastern Tools) of Ontario, California, admitted that he and his co-conspirators defrauded East West Bank by making material misrepresentations about Eastern Tools’ accounts receivable and its financial statements to obtain and maintain a loan with the bank.  The conspirators created numerous shell corporations to act as purported suppliers and retailers doing business with Eastern Tools, when, in reality, these shell corporations were entirely under the control of Yeung and existed for the sole purpose of creating the illusion of such business, he admitted.  Yeung also admitted that the fictitious companies allowed Yeung and other conspirators to falsely inflate Eastern Tools’ accounts receivable and financial statements in representations to East West Bank. 

Yeung admitted that in order to further the scheme, he and others opened post office boxes, phone accounts and email accounts purportedly associated with the shell retail companies, and provided information about them to East West Bank auditors, to promote the illusion that these shell customers were independent entities. 

Eastern Tools defaulted on the loan after East West Bank discovered the fraud, causing more than $9 million in losses to the bank, Yeung admitted. 

The FBI, IRS-CI and SIGTARP investigated the case.  Senior Litigation Counsel David A. Bybee of the Criminal Division’s Fraud Section prosecuted the case.

            LOS ANGELES – The former vice president of an Ontario-based wholesale tool company was sentenced today to 63 months in federal prison for his role in a scheme to defraud East West Bank that resulted in more than $9 million in losses.

            Chung Yu Yeung (also known as Louis Yeung), 39, of San Dimas, was sentenced this afternoon by United States District Judge Christina A. Snyder. In addition to the prison term, Judge Snyder ordered Yeung to pay $9,618,908 in restitution and to forfeit a property in San Dimas that was purchased with proceeds of the scheme.

            The sentencing of Yeung 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 Deidre Fike of the FBI’s Los Angeles Division, Acting Special Agent in Charge Anthony J. Orlando of Internal Revenue Service-Criminal Investigation’s (IRS-CI) Los Angeles Field Office and Special Inspector General Christy Goldsmith Romero of the Troubled Asset Relief Program (SIGTARP).

            Yeung pleaded guilty on March 30 to one count of conspiracy to commit bank fraud and four counts of bank fraud. Yeung, a former vice president of Eastern Tools and Equipment, Inc. (Eastern Tools), admitted that he and his co-conspirators defrauded East West Bank by making material misrepresentations about Eastern Tools’ accounts receivable and its financial statements to obtain and maintain a loan with the bank. The conspirators created numerous shell corporations to act as purported suppliers and retailers doing business with Eastern Tools, when, in reality, these shell corporations were entirely under the control of Yeung and existed for the sole purpose of creating the illusion of such business, he admitted. Yeung also admitted that the fictitious companies allowed Yeung and other conspirators to falsely inflate Eastern Tools’ accounts receivable and financial statements in representations to East West Bank.

            Yeung admitted that in order to further the scheme, he and others opened post office boxes, phone accounts and email accounts purportedly associated with the shell retail companies, and provided information about them to East West Bank auditors, to promote the illusion that these shell customers were independent entities. 

            Eastern Tools defaulted on the loan after East West Bank discovered the fraud, causing more than $9 million in losses to the bank.

            “Yeung created companies and profits that were nothing but illusions, tricking a bank into loaning him millions of dollars,” said United States Attorney Eileen M. Decker. “This was a sophisticated crime that caused substantial losses, warranting the punishment imposed by the Court today.”

            “Today, Yeung was held accountable for his illegal actions involving a massive loan fraud scheme that generated millions of dollars through the use of corporations that existed on paper only,” said Acting Special Agent in Charge Anthony J. Orlando of IRS Criminal Investigation. “The audacity of this scheme was truly astounding and illustrates the lengths to which fraudsters will go to game the financial system for personal gain.  IRS Criminal Investigation is proud to work with our law enforcement partners by lending our financial expertise in these complex investigations.”

            Yeung’s co-defendant, Guo Xiang Fan, who was the owner and president of Eastern Tools, is a fugitive.

            The FBI, IRS-CI and SIGTARP investigated the case. Senior Litigation Counsel David A. Bybee of the Criminal Division’s Fraud Section prosecuted the case.

            SANTA ANA, California – An Orange County man who pleaded guilty to embezzling approximately $1.4 million from his employer – while he was pending sentencing in another $2.6 million embezzlement case – has been sentenced to 121 months in federal prison.

            Peter Suk Lee, 49, a resident of the City of Orange, was sentenced late yesterday by United States District Judge David O. Carter.

            Lee pleaded guilty earlier this year to a bank fraud charge and admitted that he embezzled company funds from Contempo Inc. USA, a family-owned, Los Angeles-based business that imports and distributes fashion accessories.

            Judge Carter noted that the founders of Contempo, who had immigrated from South Korea, had grown Contempo into a successful business that “created jobs and hope” for other immigrants. But Lee had destroyed their “great American dream,” Judge Carter said.

            From August 2014 through September 2015, Lee was the controller at Contempo. During this time, Lee embezzled money by forging the signatures of the company officers on 92 unauthorized checks that were made out to him and several associates. The total value of these checks was $1.38 million. Lee admitted that he deposited $393,400 embezzled from Contempo into his personal TD Ameritrade account, and caused other embezzled funds to be wired to casinos for his use.

            When he embezzled the funds from Contempo, Lee was pending sentencing in another federal case in which he admitted embezzling approximately $2.65 million from Glovis America, Inc., an Irvine-based automotive logistics company where Lee had been employed as the accounting manager. In the Glovis case, Lee pleaded guilty in April 2015 to three counts of wire fraud for the embezzlement that spanned October 2009 through June 2011.

            When he pleaded guilty in May in the Contempo case, Lee also admitted that he stole approximately $70,000 from Orion Technology, Inc. in Anaheim, where he worked in 2014, between his stints at Glovis and Contempo.

            “Mr. Lee’s crimes caused significant damage to three different employers, one of which was forced to lay off 20 employees and is struggling to keep its doors open,” said United States Attorney Eileen M. Decker. “This defendant went to great lengths to continue his theft, including attempting to hide his second embezzlement from court officers preparing a pre-sentence report regarding his first embezzlement.”

            Lee “admitted that he used embezzled Glovis money to pay personal bills, for instance for his auto insurance, his credit cards and his mortgage, as well as for gambling,” prosecutors wrote in a sentencing memorandum filed with the court. “Likewise, defendant used the money he embezzled from Contempo for more than just gambling; he transferred substantial sums to his personal brokerage account and gave large amounts to a female associate who used the money to pay her rent; purchase jewelry, home furnishings and appliances; and cover her living expenses.”

            As part of Lee’s sentence, Judge Carter ordered Lee to pay $2,890,527 in restitution to his victims.

            Judge Carter yesterday also sentenced another participant in in the Glovis fraud. John Wootae Kim, 46, of Irvine, who opened a fraudulent bank account as part of the embezzlement scheme, was sentenced to 30 months in federal prison.

            In relation to the scheme that targeted Contempo, a second defendant has pleaded not guilty and is scheduled to go on trial before Judge Carter in January. Hyemi Kim, 35, of Los Angeles (Mid-Wilshire), is charged in a grand jury indictment with bank fraud and interstate transportation of stolen property.

            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.

            These cases were investigated by the Federal Bureau of Investigation. The cases are being prosecuted by Assistant United States Attorneys Ranee Katzenstein of the Major Frauds Section and Mark Takla of the Terrorism and Export Crimes Section.

            LOS ANGELES – The 16th and final defendant in a racketeering indictment that targeted the East Coast Crips (ECC) street gang, which claims a large swath of territory in South Los Angeles, pleaded guilty today in United States District Court to federal charges.

            Gregory Sutton Jr., 40, of South Los Angeles, pleaded guilty to conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act (RICO), conspiracy to distribute marijuana and being a felon in possession of a firearm. As a result of the guilty pleas, Sutton, who was an associate of the gang, faces a statutory maximum sentence of 35 years in federal prison when he is sentenced by United States District Judge Beverly Reid O’Connell on November 7.

            Previously in this case, 15 other ECC members and associates have pleaded guilty, with most of them admitting to being part of the RICO conspiracy. The ECC indictment was the third in a series of racketeering indictments brought by federal grand juries following investigations by the FBI into the criminal activities of Blood and Crips gangs that claim territories in Los Angeles

            “Criminal street gangs make their livelihood by distributing narcotics and preying on the people that live in the neighborhoods they claim as territory,” said United States Attorney Eileen M. Decker. “Today’s guilty plea marks the end of one phase of the prosecution of the East Coast Crips, but my office will continue to bring cases like this one seeking to cripple street gangs operating in our community.”

            The ECC racketeering indictment arises out of an investigation that started in March 2011 when the FBI and the Los Angeles Police Department (LAPD) began looking into the racketeering activities of the gang, which claims a large swath of South Los Angeles running from 1st Street to 190th Street, between the 110 Freeway and Central Avenue. The ECC gang is believed to have approximately 850 members and is comprised of multiple “sets.” According to various court documents, members of the gang engage in a variety of violent crimes, home invasion robberies, firearms violations and the sale of narcotics, including crack cocaine and marijuana. According to court documents, members of the gang routinely engage in the distribution of crack cocaine near elementary schools.

            “The successful outcome of this case is the result of a strong partnership among federal and local law enforcement officials and prosecutors utilizing a variety of statutes including RICO,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The FBI will continue to work with local police to identify gangs whose members terrorize their communities with violence and intimidation to further their criminal enterprise.”

            Previously in this case, Rashaad Howard, a senior member of the ECC and the lead defendant in the indictment, pleaded guilty to conspiring to violate RICO and possession with the intent to distribute crack cocaine. Howard, 38, of South Los Angeles, was sentenced earlier this year to five years in prison by Judge O’Connell.

            Many of the other 14 defendants in the indictment who have pleaded guilty have been sentenced to prison terms of as long as 80 months. In addition to Sutton, three other defendants are pending sentencing.

            The case against ECC is being prosecuted by Assistant United States Attorney Reema El-Amamy of the Organized Crime Drug Enforcement Task Force.

        LOS ANGELES – A man who trafficked a 17-year-old girl from Nevada to Southern California and forced her to work as a prostitute has been sentenced to 87 months in federal prison.

        Kenyati Jakeen Rahh-Potts, 27, of Hahira, Georgia, was sentenced on Monday by United States District Judge Michael W. Fitzgerald.

        Rahh-Potts pleaded guilty in February 2015 to one count of sex trafficking.

        A second defendant in the case – Tabitha Samaria Walls, 24, of Elk Grove, California – was sentenced last year to 27 months in prison after pleading guilty to conspiring to engage in sex trafficking.

        According to court documents, Rahh-Potts and Walls trafficked the victim from Las Vegas to California and forced her to engage in acts of prostitution in Los Angeles, Hollywood, Pomona and Ontario over an 11-day period in 2013. Rahh-Potts and Walls, who were living in Apple Valley when they were arrested in August 2013, created online advertisements on backpage.com to prostitute the victim and then took all of the money that the child earned through the acts of prostitution. 

        No child should be subject to this type of abuse,” said United States Attorney Eileen M. Decker. “These defendants showed no concern for the humanity of this young person, whose body was sold via online ads strictly for their own profit.”

        “The defendants in this case stole their victim’s youthful innocence, as well as the money they forced her to make,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The FBI is committed to ending the victimization caused by those who callously advertise and sell minors as sex slaves.”

        This case was investigated by the Federal Bureau of Investigation, which receive substantial assistance from the San Bernardino County Sheriff’s Department.

        The case was prosecuted by Assistant United States Attorney Tritia L. Yuen.

            LOS ANGELES – A San Pedro man who responded to an Internet advertisement to have sex with a young girl and sent a photograph of his genitals has pleaded guilty to a federal obscenity charge.

            Joshua Paul Crouch, 28, pleaded guilty yesterday to attempted transfer of obscene material to a minor.

            As a result of the guilty plea before United States District Judge John F. Walter, Crouch faces a statutory maximum sentence of 10 years in federal prison when he is sentenced on October 24.

            According to court documents, special agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and other law enforcement agencies, posted an advertisement for commercial sex acts on backpage.com. Crouch responded to the ad on March 30 and agreed to pay $60 to receive oral sex from what he thought was a 13-year-old girl, but who in fact was an undercover law enforcement officer.

            During the text conversation with the undercover agent and another “girl” that Crouch thought was 15, he sent a photograph of his genitals to the older “girl” to entice the younger “girl” to engage in prohibited sexual conduct, according to the plea agreement filed in this case.

Crouch followed the directions provided by the undercover agent and was arrested when he arrived at hotel room in San Pedro to have oral sex with the 13-year-old girl in exchange for $60.

“Men who solicit sex from minors are an integral part of the underground sex trade that victimizes young people,” said United States Attorney Eileen M. Decker. “This undercover investigation and federal prosecution demonstrates that we are focusing on identifying customers and commercial sex traffickers who prey upon women and children.”

            “As this case makes clear, sexual predators who believe they can stalk minors online anonymously and with impunity are very much mistaken,” said Joseph Macias, special agent in charge for HSI in Los Angeles. “The coercion of minors into prostitution is unconscionable under any circumstances and HSI is using every tool and resource at its disposal to hold the perpetrators in these cases accountable for their crimes.”

            As a result of his conviction in this case, Crouch will be required to register as a sex offender.

            This case was investigated by HSI’s Human Trafficking Group, the Los Angeles Police Department, the Los Angeles Sheriff's Department, and the U.S. Department of State.

            RIVERSIDE, California –The United States Postal Inspection Service (USPIS) has arrested six Inland Empire residents who are charged in indictments that allege federal crimes related to mail theft. The six arrested over the past two weeks are among 11 defendants who have been charged by a federal grand jury as the result of an operation in which Postal Inspectors recovered approximately 1,167 pieces of stolen mail.

            Most of the defendants are charged with using checks and personal information stolen from the mail to commit financial crimes, including bank fraud and aggravated identity theft.

            The 11 defendants are charged in seven indictments that were returned by a federal grand jury in Riverside over the past month. The cases were announced today after Postal Inspectors yesterday arrested two of the defendants. Three of the defendants are already in state custody on unrelated charges, and federal prosecutors will seek to have those three brought into federal court. The USPIS is continuing to search for two fugitives.

            In one of the cases, Robert Kujaun Thomas, 40, of Hemet, is charged with possessing more than 850 pieces of stolen mail belonging to hundreds of victims who reside in at least 17 Inland Empire cities. Thomas was also charged with possessing stolen credit and debit cards with the intent to commit fraud. Thomas was arrested on Tuesday and is expected to make his initial court appearance this afternoon in United States District Court in Riverside. If convicted of the two counts, Thomas faces a statutory maximum sentence of 15 years in federal prison.

            “The recent rise in mail theft in the Inland Empire poses a serious problem for the community which relies on the mail for the full range of business and personal matters,” said United States Attorney Eileen M. Decker. “The cases being announced today demonstrate my office’s commitment to combatting this problem, and we will continue to partner with the United States Postal Inspection Service and local law enforcement to see that criminals who steal mail in the Inland Empire are punished.”

            “This operation is a fine example of law enforcement partnerships working together to protect the citizens of the Inland Empire from mail theft,” said Inspector in Charge Robert Wemyss. “The U.S. Postal Inspection Service and the United States Attorney’s Office are aggressively pursuing and prosecuting individuals that attempt to target America’s mail stream for criminal gain. Mail theft is a federal offense and that means federal prison time. The U.S. Postal Inspection Service remains vigilant in protecting the U.S. Mail with traditional and innovative law enforcement efforts.”

            In addition to Thomas, 10 other defendants were charged in the grand jury indictments. They are:

            • Kimberly Ann Hernandez, 34, of Fontana; Julian Tapia, 26, of Colton; and Anthony Garcia Jr., 22, of Fontana, who are charged with possessing approximately 281 pieces of stolen mail and attempting to cash or deposit altered checks totaling more than $9,000. All three defendants are charged in an eight-count indictment with conspiracy to commit bank fraud, at least one count of bank fraud, conspiracy to commit mail theft, and possession of stolen mail. Hernandez was arrested on July 26 and was subsequently ordered to stand trial on September 13. Tapia and Garcia were both arrested yesterday. If convicted on all counts, each defendant faces a statutory maximum sentence of at least 70 years in federal prison.

            • Hubert Salvador Salazar Jr., 25, of San Bernardino, who is charged in a four-count indictment with cashing and depositing altered checks stolen from the U.S. Mail – as well as counterfeit checks made with information obtained from stolen mail – into his own checking account. The total value of the fraudulent checks discussed in the indictment is $5,497. Salazar is charged with four counts of bank fraud. Each count carries a maximum possible sentence of 30 years in federal prison. Salazar is currently a fugitive being sought by authorities.

            • Mark Alexander Gonzales, 30, of Homeland, who is charged with cashing stolen checks, making purchases using a stolen credit card and causing losses of nearly $4,000. Gonzales is charged with seven counts of bank fraud and one count of unauthorized use of an access device (a credit card). Gonzalez was arrested on July 25, later pleaded not guilty and was ordered to stand trial on September 27. If convicted, Gonzalez could be sentenced to decades in federal prison.

            • Alfred Zamorano Jr., 41, of Rialto, and Alicia Ann Palomares, 33, also of Rialto, who are charged with burglarizing the Calimesa Post Office by using a “fishing device” to steal mail placed in the outgoing mailbox. A two-count indictment that charges both defendants with conspiracy and mail theft also alleges that they broke into several post office boxes located inside the post office. Zamorano is currently in state custody, and Palomares was arrested on Tuesday. If convicted of both counts, each defendant faces a statutory maximum sentence of 10 years in federal prison.

            • Pricila Mayora Deleon, 28, of Moreno Valley, who is charged with fraudulently depositing stolen checks into bank accounts and possessing more than a dozen items of stolen mail. Deleon, who is currently in state custody, is charged with three counts of bank fraud, aggravated identity theft and possession of stolen mail. If she is convicted on all five counts, she could be sentenced to as much as 97 years in federal prison.

            • William Jason Leonard, 37, of Hemet, and Michael Joseph Tomassacci, 39, of San Jacinto, who are each charged in a 16-count indictment with conspiracy, wire fraud, possession of stolen mail and aggravated identity theft. Leonard additionally is charged with bank fraud. These defendants allegedly used fraudulent identities and hundreds of fraudulently obtained bank account numbers to create checks that they used in a scheme to purchase merchandise at retail stores with the intent to later return the merchandise for cash. If convicted of all counts, each defendant would face potential sentences of decades in federal prison. Leonard is currently in state custody, and Tomassacci is a fugitive being sought by authorities.

            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 seven indictments announced today are the result of investigations conducted by the United States Postal Inspection Service. The Riverside County Sheriff’s Department and the Hemet Police Department provided substantial assistance.

            Members of the public who may have information about either of the two fugitives are encouraged to contact the U.S. Postal Inspection Service at 1-877-876-2455 (select Option 2) reference case number 2026956 (Tomassacci) or case number 2137584 (Salazar).

            These cases are being prosecuted by Assistant United States Attorneys Bilal A. Essayli (six of the cases) and Tritia Yuen (the Leonard/Tomassacci indictment) of the Riverside Branch Office.

            LOS ANGELES – A longtime U.S. Customs and Border Protection (CBP) officer has been arrested on federal charges that allege that he stole mail from the International Mail Facility (IMF) in Torrance and arranged to have an accomplice deposit checks obtained from the stolen mail.

            Carlos Canjura, 54, of Van Nuys, was arrested yesterday without incident by special agents with the FBI. The arrest came after Canjura, who has been a CBP officer since 2008, was named in an eight-count indictment that was returned by a federal grand jury on August 4.

            At an arraignment yesterday afternoon in United States District Court, Canjura pleaded not guilty to the charges in the indictment and was released on his own recognizance.

            According to the indictment, Canjura was a CBP Officer assigned to the IMF, where his duties included examining mail and parcels coming into the United States for contraband, counterfeit goods, and possible fraudulent financial checks or credit cards.  The IMF is operated by the United States Postal Service and serves as a location where international mail is processed by CBP officers and other personnel to ensure compliance with federal law before being delivered to addresses in the United States.

            "The public should be able to use the mail without fear that officials charged with safeguarding the system are not abusing it for their own benefit," said United States Attorney Eileen M. Decker. "Mr. Canjura not only abused his position as a federal officer by stealing international mail, he also sought to use the stolen mail in an elaborate scheme to defraud banks and line his own pockets. In so doing, he violated the public trust he swore to uphold."  

            According to the indictment, while working at the IMF, Canjura stole mail that contained traveler’s checks and third-party checks. Canjura allegedly provided the stolen checks to other people, who altered the checks and deposited them into bank accounts at Bank of America.

            The indictment specifically alleges that Canjura stole four checks with a cumulative value of more than $15,000.

            “Americans must be able to trust officials handling their mail which conveys highly valuable information, to include our identification and financial data,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The FBI is committed to holding accountable those, like Mr. Canjura, who abuse their positions of trust and threaten our security for personal gain.”

            The indictment against Canjura charges him with four counts of bank fraud and four counts of possession of stolen mail. The case has been assigned to United States District Judge Beverly Reid O’Connell, who has ordered the parties to appear on August 15 for a trial setting conference.

            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.

            Each charge of bank fraud carries a statutory maximum penalty of 30 years in prison, and each charge of possession of stolen mail carries a maximum sentence of five years in prison.

            The investigation of this case was conducted by the Federal Bureau of Investigation, which received assistance from U.S. Immigration and Customs Enforcement’s Office of Professional Responsibility and CBP’s Office of Professional Responsibility.

            SANTA ANA, California – A Brea man pleaded guilty this morning to federal charges related to his role as the owner and operator of a multi-million dollar fraudulent mortgage modification scheme that posed as a successful law firm to defraud struggling homeowners. 

            Bryan D’Antonio, 50, pleaded guilty to one count of conspiracy to commit mail and wire fraud for his role as owner and operator of Rodis Law Group (RLG) and America’s Law Group (ALG).

            D’Antonio pleaded guilty before United States District Judge David O. Carter, who is scheduled to sentence the defendant on January 30, 2017.

            “D’Antonio preyed on vulnerable victims – struggling homeowners,” said United States Attorney Eileen M. Decker. “Pretending to offer legal assistance to their victims, D’Antonio and his cohorts actually offered nothing but false hopes and empty promises.  Now, he will be held accountable in federal court for the damage he has caused so many victims.”

            D’Antonio admitted that, between October 2008 and June 2009, he participated in a scheme that induced homeowners to pay as much as $5,500 for the services of RLG and its successor entity, ALG. RLG and ALG advertised on radio stations across the country and urging struggling homeowners to call a toll-free number. The companies purportedly consisted of “a team of experienced attorneys” who were “highly skilled in negotiating lower interest rates and even lowering your principal balance.”

            In fact, RLG and ALG were telemarketing operations that never had teams of experienced attorneys. During much of the scheme, one man – co-defendant Ronald Rodis – was the only attorney at RLG.

            In a plea agreement filed in federal court, D’Antonio admitted that the RLG and ALG schemes fraudulently obtained approximately $9 million from more than 1,500 victims.

            “At the height of the mortgage crisis, this defendant, a convicted felon who was prohibited from any business engaged in telemarketing, created two fake law firms that promised struggling homeowners assistance saving their homes and modifying their mortgages,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Despite the many promises, these were telemarketing sales operations that took homeowners’ money and provided no meaningful assistance.”

            D’Antonio was previously convicted of mail and wire fraud and sentenced to four years in federal prison for his participation in a medical billing scheme. He was also subject to a permanent injunction prohibiting him from having any involvement with any business that engaged in telemarketing or misrepresented the services it would provide.  In conjunction with his guilty plea today, D’Antonio admitted that he started RLG while he was still on supervised release from his prior conviction. In violation of D’Antonio’s permanent injunction, RLG and ALG sold their services through an extensive telemarketing operation and employees routinely misrepresented the services RLG and ALG would provide. The telemarketers did not disclose to homeowners that RLG and ALG were owned and operated by D’Antonio, who was prohibited from engaging in telemarketing

            RLG and ALG telemarketers working for D’Antonio made numerous misrepresentations regarding the companies’ ability to negotiate loan modifications from the homeowners’ mortgage lenders. For example, the telemarketers stated that RLG and ALG had been in business for 11 years when in fact the company had only opened in October 2008. They falsely stated that RLG and ALG routinely obtained positive results for homeowners, including lower monthly payments, reductions in principal balance and lower interest rates. In fact, positive results were rarely achieved for any RLG or ALG clients. Telemarketers also falsely reiterated that homeowners would have a team of attorneys and real estate professionals assigned to their case.       

            D’Antonio’s co-defendants, Charles Wayne Farris and Ronald Rodis, both previously pleaded guilty to one count of conspiracy to commit mail and wire fraud.

            This case was investigated by the FBI. The case is being prosecuted by Assistant U.S. Attorney Joseph T. McNally and Trial Attorney John W. Burke of the Civil Division’s Consumer Protection Branch.

LOS ANGELES – A federal jury has returned guilty verdicts against a Los Angeles burger stand owner who distributed cocaine base in the form of crack cocaine.

Brian Sawyers, 57, of Los Angeles, was found guilty yesterday of two felony offenses of distribution of cocaine base in the form of crack cocaine after selling crack cocaine to a confidential informant working with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).

According to the evidence presented at the three-day trial, in two separate instances, Sawyers sold 26.9 grams and 70.6 grams of crack cocaine to a ATF confidential informant at his business, B.D. Burgers, in South Los Angeles.  In the first transaction, on February 8, 2012, following a series of recorded phone calls in which the informant and defendant discussed the purchase of crack cocaine, Sawyers met the informant at the burger stand, and sold the informant approximately one ounce of crack cocaine for $700.  On March 1, 2012, law enforcement officers and the informant conducted a second operation during which the informant went to the burger stand, where he met Sawyers.  They then went to Sawyers’ home, where Sawyers sold approximately two-and-a-half ounces of crack cocaine to the informant for $1,700.

“Narcotics trafficking poses a serious threat to the health and safety of our local communities,” said United States Attorney Eileen M. Decker.  “Mr. Sawyers chose to conduct his sales of crack cocaine despite having been previously convicted of a federal narcotics offense.  As a result of his misguided choices, he shall now be facing a lengthy prison sentence.”   

The jury convicted Sawyers after a three-day trial before United States District Judge Ronald S. W. Lew in United States District Court.

After the jury returned its verdicts, Judge Lew scheduled a sentencing hearing on November 1.  Sawyers currently faces a five-year mandatory minimum sentence but, at sentencing, he could face a ten-year mandatory minimum sentence due to his prior drug trafficking conviction.  Sawyers faces a statutory maximum sentence of life in federal prison.

The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Los Angeles Police Department, and the Drug Enforcement Administration. The case was prosecuted by Assistant United States Attorneys Anil J. Antony and Ann C. Kim.

            LOS ANGELES – A federal grand jury today indicted former Los Angeles County Sheriff Lee Baca on federal charges alleging that he conspired to obstruct justice, obstructed justice, and lied to the federal government.

            The case against Baca is the result of an investigation by the Federal Bureau of Investigation, and is one in a series of cases resulting from an investigation into corruption and civil rights abuses at county jail facilities in downtown Los Angeles. As a result of the investigation, 20 current or former members of the Los Angeles Sheriff’s Department were convicted of federal charges.

            Baca, 74, of San Marino, California, was charged today in a three-count superseding indictment, with one count of conspiracy to obstruct a federal grand jury investigation, one count of obstruction of justice, and one count of making false statements.

             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 conspiracy charge carries a maximum term of five years in prison, the obstruction of justice carries a maximum term of 10 years in prison and the charge of making a false statement carries a maximum term of five years in prison. If convicted on all counts, the total maximum Baca faces is 20 years in federal prison. 

            Baca is expected to be arraigned on the superseding indictment at a later date in United States District Court in Los Angeles.

            The investigation of this case was conducted by the Federal Bureau of Investigation.  The case is being prosecuted by Assistant United States Attorney Brandon Fox, Chief of the Public Corruption and Civil Rights Section; Assistant United States Attorney Lizabeth A. Rhodes, Chief of the General Crimes Section; and Assistant United States Attorney Eddie A. Jauregui of the General Crimes Section.

LOS ANGELES – Today United States Attorney for the Central District of California Eileen M. Decker issued the following statement regarding the ruling of the Ninth Circuit Court of Appeals in the consolidated Los Angeles County Sheriff’s cases: 

“The Ninth Circuit Court of Appeals' categorical rejection of the arguments raised by the seven former members of the Los Angeles County Sheriff's Department speaks volumes. Although the actions of these seven defendants tarnished the department they claimed to serve, we recognize that their criminal actions are not reflective of the conduct of the entire Los Angeles Sheriff’s Department, the vast majority of whom serve our community with integrity and honor every day.”

LOS ANGELES - The U.S. Attorney’s Office for the Central District of California and the Federal Drug Administration (FDA) announced today that the United States Marshals Service seized more than 100 cases of products labeled as containing the dangerous and unapproved ingredient Kratom.

The products are distributed by Nature Therapeutics LLC, which does business as Kratom Therapy and is located in Grover Beach, California. The seized products are marketed under the brand name Kratom Therapy, and are worth approximately $150,000.  The U.S. Attorney’s Office filed a civil forfeiture complaint in the U.S. District Court for the Central District of California, alleging that the seized Kratom products are unapproved new drugs and misbranded drugs under the Federal Food, Drug, and Cosmetic Act.

The FDA is warning consumers not to use any products labeled as containing the botanical substance Kratom. Mitragyna speciosa, commonly known as Kratom, grows naturally in Thailand, Malaysia, Indonesia and Papua New Guinea. Serious concerns exist regarding the toxicity of Kratom in multiple organ systems. Consumption of Kratom can lead to a number of health impacts including, respiratory depression, vomiting, nervousness, weight loss and constipation. Kratom has been indicated to have both narcotic and stimulant-like effects and withdrawal symptoms may include hostility, aggression, excessive tearing, aching of muscles and bones and jerky limb movements.

            ​"Kratom is a drug that has very serious health effects on users,” said United States Attorney Eileen Decker. “We will continue to partner with the FDA to protect the public from the distribution of unapproved and mislabeled substances like Kratom.”

Prior to the complaint being filed, the FDA inspected the Grover Beach facility and also found that Nature Therapeutics’ website and social media sites included claims establishing that the company’s Kratom Therapy products are drugs because they are intended for use in the cure, mitigation, or treatment of various diseases. The FDA has not approved Nature Therapeutics’ products for any use. In addition, the complaint alleged that Nature Therapeutics’ products are also misbranded drugs because their labeling fails to provide adequate directions for use. The California Department of Public Health embargoed the products on behalf of the FDA.

“The FDA will continue to take aggressive enforcement action to safeguard the public from harmful drug products illegally marketed as treatments for which they have not been studied or approved,” said Melinda Plaisier, the FDA’s associate commissioner for regulatory affairs.

In February 2014, the FDA issued an import alert regarding the use of imported dietary supplements and bulk dietary ingredients that are, or contain, Kratom without a physical examination.

Health care professionals and consumers should report any adverse events related to products containing Kratom to the FDA’s MedWatch Adverse Event Reporting program. To file a report, use the MedWatch Online Voluntary Reporting Form. The completed form can be submitted online or via fax to 1-800-FDA-0178.

This case was handled in the United States Attorney’s office by Assistant United States Attorney Katie Schonbachler.

LOS ANGELES – A Florida man accused of filing false and fraudulent tax returns with the Internal Revenue Service claiming nearly $470,000 in fictitious tax refunds and then attempting to file false liens and encumbrances in retaliation against IRS employees for not paying his tax refund claims has been found guilty by a federal jury in Los Angeles.

Taquan Gullett, who also goes by Maalik Rashe El, 38, of Jacksonville, Florida, was convicted this afternoon in United States District Court.  The jury deliberated for two hours before finding Gullett guilty of two counts of making false claims against the United States government and two counts of retaliation against a federal employee or official by attempting to file a false lien or encumbrance.

“Unsatisfied with fraudulently submitting a false tax refund claim for 2009, this defendant doubled down by filing a second fraudulent return for 2010 and by retaliating against the IRS employees who properly rejected his false returns,” said United States Attorney Eileen M. Decker. “As today's jury verdicts reinforce, everyone has an obligation to report their income accurately to the IRS.  Furthermore, it is unlawful to retaliate against IRS employees who are simply doing their job, and our office will take such actions seriously and prosecute such behavior to the fullest extent of the law.”

The evidence presented at trial showed that in March, 2010, Gullett filed a 2009 income tax return with the IRS.  On that return, Gullett, an exercise physiologist who holds a Master’s degree in Kinesiology, reported that he earned $52,591 in wages, and falsely represented that he generated $221,306 in interest income from three financial institutions.  Gullett further represented that the federal tax withheld from his earnings and interest income totaled $221,687, and that he was therefore due a tax refund of $149,296.  Gullett requested that the refund be paid via electronic transfer to his personal checking account.

“The belief that you can make up your own rules and file bogus tax returns to get the government to pay you money to which you are not entitled isn’t just wrong, it’s criminal,” stated IRS Criminal Investigation’s Acting Special Agent in Charge Anthony J. Orlando.  “Today’s guilty verdict proves that people who file false claims will be held accountable for their deceit.  It further demonstrates that the IRS, TIGTA and the U.S. Attorney’s Office are duty bound to protect the integrity of the U.S. tax administration system, and to make sure everyone complies with the nation’s tax laws.”

Once the Internal Revenue Service determined Gullet’s 2009 tax return was frivolous and denied his claim for refund, Gullett retaliated by filing false documents with the California Secretary of State claiming that certain IRS officials and employees were indebted to him.  One document was styled as a “commercial lien.”  In the purported lien, Gullett falsely asserted that two IRS employees owed him over $20 million for his “lawful 2009 claim refund,” for “hindering, impeding, obstruction and/or delaying” his rights, and for “harassment, coercion defrauding, and/or defamation.” 

Not deterred by the IRS notifying him that his 2009 tax return and refund claim was frivolous, Gullett attempted the same scheme again in 2011 by filing a fraudulent 2010 tax return.  The 2010 tax return claimed a fraudulent tax refund of $320,336.  Ultimately, Gullett’s 2010 tax return was also deemed frivolous by the IRS, and a frivolous return penalty was assessed. 

“When individuals file fraudulent liens against IRS employees and public officials in retaliation for doing their jobs and in an attempt to intimidate IRS employees, this illegal conduct will not be tolerated.  TIGTA and our partners at IRS CI will work to ensure these individuals are prosecuted to the fullest extent of the law”, stated Rod Ammari, Special Agent in Charge, Treasury Inspector General for Tax Administration.

Gullett is scheduled to be sentenced by United States District Judge Christine A. Snyder on November 14, 2016.  At sentencing, Gullett faces a statutory maximum sentence of 30 years in federal prison and fines totaling $1,000,000.

The case against Gullett was investigated by IRS Criminal Investigation and the Treasury Inspector General for Tax Administration and prosecuted by Assistant United States Attorneys Julian Andre and Paul Stern.

            LOS ANGELES – A California man who was found guilty at trial of traveling to Cambodia to have illicit sexual conduct with young girls was sentenced today to 70 years in federal prison and $40,000 restitution to a victim.

            Ronald Gerard Boyajian, 55, who previously resided in Menlo Park and has spent time on the Palos Verdes peninsula, was sentenced this afternoon by United States District Judge Christina A. Snyder.

            At today’s hearing, Judge Snyder observed that “the conduct was extremely serious.” In imposing the maximum sentence, the court stated that it is “obvious that the reason for the sentence is for the protection of the public and to deter such behavior in the future.”    

            Following a six-week trial earlier this year, Boyajian was found guilty of three child exploitation crimes – traveling to Cambodia with the intent to engage in illicit sexual conduct, engaging in illicit sexual conduct with a nine-year-old girl in Cambodia, and committing these offenses while being required to register as a sex offender under California law.

            Boyajian was arrested by the Cambodian National Police (CNP) in February 2009, while he was on his 35th trip to Asia over a nine-year period.  Boyajian began traveling to Cambodia shortly after completing his parole following convictions on 22 counts of illegal sex with a minor and oral sex with a minor in 1995.

            “Pedophiles will not escape punishment by crossing international borders to sexually assault children,” said United States Attorney Eileen M. Decker. “After being convicted of sexually exploiting two children here in California, this defendant tried to evade justice by traveling to Cambodia to victimize even younger children.  As today’s sentence demonstrates, however, if you travel anywhere in the world for sex with children, the U.S. Department of Justice will be tenacious in prosecuting you and pursuing justice for the young victims of this hideous crime.”

            Four victims whom Boyajian had sexually assaulted testified against him at trial.  Each girl was between 8 and 11 years old when Boyajian purchased them from their mother and grandmothers to sexually abuse them. One victim, who was approximately 8 when Boyajian assaulted her, testified at trial that “he was abusive, he was cruel, he treated me like I wasn’t even human.”

            At a hearing last week, the four testifying victims appeared before Judge Snyder. The youngest victim, who is now approximately 16 years old, asked for a strong sentence: “I would like the court not to allow him to leave prison because there are possibly other children out there who could be harmed, just like it happened to me.”

            Boyajian paid pimps and relatives from impoverished families to gain access to his victims, which he preferred to weigh less than 70 pounds.  While the attacks took place in the village of Svay Pak – a notorious destination for pedophiles from around the world, the victims were Vietnamese immigrants who lived in the poor community.  A CNP anti-human trafficking officer testified at trial that Svay Pak was well known as a place where foreigners went to have sexual contact with females, often young girls. Boyajian went to Svay Pak to have “unlimited access to young girls for sex,” prosecutors said in court. 

“Given the defendant’s age, this prison term amounts to a life sentence and assures no more children will be fall prey to this serial pedophile,” said Joseph Macias, special agent in charge for HSI Los Angeles. “Successful prosecutions are crucial to combatting child sex tourism, but HSI is also focused on strategies to prevent such crimes from occurring, including Operation Angel Watch where HSI alerts foreign law enforcement when a convicted child predator is planning to travel to their country. Last fiscal year, HSI made over 2,100 notifications to more than 90 countries.”

            According to a sentencing brief filed by prosecutors, Boyajian was convicted in 1995 of unlawful sex with two 16-year-old girls, making him “a repeat and dangerous sex offender against minors.”

            Boyajian’s sentencing follows lengthy sentences imposed on other sex tourists who were prosecuted in Los Angeles, including Michael Joseph Pepe, who was sentenced to 210 years in federal prison after being convicted of abusing seven victims in Cambodia, and Stanley Dan Reczko, who received a mandatory life-without-parole sentence for producing child pornography with a minor victim in the Philippines. 

            The case against Boyajian is the result of an investigation by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Los Angeles and HSI’s Attaché Offices in Bangkok, Phnom Penh and Ho Chi Minh, with the assistance of the United States Embassy in Phnom Penh.

            The case against Boyajian was prosecuted by David M. Herzog and Vanessa Baehr-Jones of the Violent and Organized Crime Section.

            WASHINGTON – A Los Angeles, California, businessman was charged today in an information, which charges one count of conspiracy to defraud the United States and one count of corruptly endeavoring to impair and impede the due administration of the internal revenue laws, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division.

            Masud Sarshar, who owned and operated Apparel Limited, Inc., a business that designed, manufactured, and sold clothing and other apparel, signed a plea agreement admitting that he maintained several undeclared bank accounts at Bank Leumi and two other Israeli banks, both in his name and in the names of entities that he created.  For decades, with the assistance of at least two relationship managers from Bank Leumi and a second Israeli bank (Israeli Bank A), Sarshar hid tens of millions of dollars in assets in these accounts in an effort to conceal income and obstruct the Internal Revenue Service (IRS).  As alleged in the information, between 2006 and 2009, Sarshar diverted more than $21 million in untaxed gross business income to these undeclared bank accounts.  Between 2007 and 2012, Sarshar also earned more than $2.5 million in interest income from these accounts.  Sarshar omitted all of this income from his 2006 through 2011 individual and corporate tax returns and he failed to report his authority over and ownership of these bank accounts in false Reports of Foreign Bank and Financial Accounts (FBARs) that he submitted to the U.S. Department of Treasury.

            Sarshar signed a plea agreement to the charges in the information, agreeing to plead guilty and pay more than $8.3 million in restitution to the IRS.  If the court accepts the parties’ agreement, Sarshar will be sentenced to 24 months in prison.  In addition, Sarshar stipulated to a civil penalty in the amount of 50 percent of the high balance of his undeclared accounts to resolve his civil liability for not disclosing the existence of his Israeli bank accounts.

            “Mr. Sarshar stashed millions in secret foreign financial accounts in Israel and then sought to use these accounts to evade his U.S. tax obligations, seeking to cover his tracks along the way,” said Principal Deputy Assistant Attorney General Ciraolo.  “The message of this case is clear: There are no safe havens.  If you are concealing assets and income in undeclared offshore accounts – or are a banker, an asset manager or otherwise are assisting accountholders in such criminal conduct, your only viable option is to come forward and accept responsibility for your actions.  Those who continue to violate U.S. tax laws will be held accountable and pay a heavy price.”

            According to the information and statement of facts, Sarshar’s relationship managers at Israeli Bank A (RM1) and at Bank Leumi (RM2) visited him frequently in Los Angeles.  At his request, neither bank sent him account statements by mail, but rather, RM1 and RM2 provided Sarshar with his account information in person.  For example, RM2 loaded electronic copies of Sarshar’s Bank Leumi account statements on a USB drive, which she concealed in a necklace worn during her trips to the United States. To further maintain the secrecy of his accounts, Sarshar’s meetings with RM1 sometimes occurred in Sarshar’s car.  RM1 and RM2 also used these visits to Los Angeles to offer Sarshar other bank products, including “back-to-back” loans.  Through back-to-back loans, which Bank Leumi made to Sarshar through its branch in the United States and which Sarshar collateralized with funds from his account at Israeli Bank A, Sarshar was able to bring back to the United States approximately $19 million of his offshore assets without creating a paper trail or otherwise disclosing the existence of the offshore accounts to U.S. authorities.  At the direction of RM1 and RM2, Sarshar also obtained Israeli and Iranian passports in an effort to avoid being flagged as a U.S. citizen by the compliance departments at both banks.  After receiving both new passports and still being flagged as a U.S. citizen by their compliance departments, RM1 and RM2 advised Sarshar to transfer his remaining funds to yet another Israeli bank, which he did in late 2011.

            “As the filing of today’s criminal charges demonstrate, the days of bank secrecy is rapidly changing,” said Chief Richard Weber for IRS-Criminal Investigation.  “There's no safe place for taxpayers to divert and hide income anywhere in the world.  IRS-CI works vigorously to stop offshore tax schemes such as this one and is proud that our forensic accounting skills helped uncover over $21 million in untaxed gross business income in this investigation.”

            Principal Deputy Assistant Attorney General Ciraolo commended special agents from IRS-Criminal Investigation, who are investigating the case and Assistant Chief Tino M. Lisella and Trial Attorney Timothy M. Russo, of the Tax Division, who are prosecuting this case. The Tax Division thanks the U.S. Attorney’s Office of the Central District of California for its assistance.

            Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.

            LOS ANGELES – A businessman who defrauded more than 300 investors in a precious metal investment scam was sentenced today to 135 months in federal prison after pleading guilty to federal fraud and money laundering offenses in a case that caused victims to lose nearly $11 million.

            Bruce Richard Sands Jr., 54, of Valencia, was sentenced by United States District Judge George H. Wu, who also ordered the defendant to pay $11,039,404 in restitution.

            Today’s sentencing follows Sands pleading guilty in April to four counts of mail fraud, five counts of wire fraud and two counts of money laundering.

            Sands owned Superior Gold Group, LLC and Superior Equity Group, LLC, which had offices in Santa Monica, West Hills and Woodland Hills. At times, the companies used an address in Irvine.

            According to court documents, from about October 2007 through the end of 2010, the Superior Gold Companies solicited investments in precious metals and collectible coins. Individuals across the nation were solicited through national radio, television and Internet advertising.

            Sands falsely told investors that the precious metals they paid for would be delivered to them directly or sent to their retirement accounts, when Sands knew that Superior Gold would not be purchasing or delivering the precious metals. Many investors never received the metals they purchased.

            Sands induced more than 300 victims to invest approximately $24 million and to suffer losses of nearly $11 million while Sands funded his own lavish lifestyle and paid for his own personal expenditures, including payments on his home in Valencia, American Express bills, and luxury vehicles, including a Porsche, a Hummer and a Lincoln SUV.

            “For more than three years, Sands operated a large-scale scheme that bilked investors, many of whom were retirees looking for a safe place to invest their money after the market crash of 2008,” said United States Attorney Eileen M. Decker. “This scheme caused a number of elderly victims to suffer substantial financial hardships, including having to sell homes and losing money that could have sent children to college. Today’s sentence accounts for the suffering of Sands’ victims.”

            “Mr. Sands preyed on the elderly and trusting people around the United States, treating their hard-earned money like his personal ATM machine,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Investors in this case were defrauded through a series of false advertisements, which lent the appearance of legitimacy to the defendant’s scheme.”

            The investigation of Sands was conducted by IRS Criminal Investigation, the United States Postal Inspection Service, the Federal Bureau of Investigation and the United States Secret Service. The Santa Monica City Attorney’s Office, which was involved in a civil lawsuit against Sands and Superior Gold, provided assistance.

           "Investor fraud causes harm both to the individual investors who are victimized and to public confidence in the financial markets," says Robert Wemyss, Postal Inspector in Charge of the Los Angeles Division. "Mr. Sands violated the trust of his investors and he will now pay the price with a federal prison sentence. The United States Postal Inspection Service will continue to work with its partners in law enforcement to bring such criminals to justice."

            “This case exemplifies the high level of coordination and cooperation by the agencies involved to target perpetrators who are victimizing our community in a significant way,” said L. Robert Savage, U.S. Secret Service Special Agent in Charge of the Los Angeles Field Office.

            This case was prosecuted by Assistant United States Attorneys Sarah J. Heidel and Byron J. McLain of the Major Frauds Section.

            SANTA ANA, California – A federal grand jury has returned a superseding indictment that now accuses a Laguna Beach man of defrauding victims out of more than $3 million in an investment fraud scam related to green energy.

          Peter Heinrich Conrad Reinert, 61, was arrested in April 2015 after a grand jury charged him in two investment fraud schemes that allegedly caused $3.6 million in losses. Since that time, federal authorities have continued to investigate Reinert for additional crimes.

            According to the 35-count superseding indictment filed yesterday in United States District Court, in addition to the two scams outlined in the 2015 indictment, Reinert ran a third scheme out of the Irvine-based Income from Waste Corporation (IFW). Reinert told victims that IFW was developing a technology to convert used tires into oil. As part of the scheme, to gain legitimacy with victims, Reinert falsely claimed to be a United States Secret Service agent and a veteran.

            Between January 2014 and his arrest on April 14, 2015, Reinert used IFW to fraudulently obtain $3.2 million dollars from victims from across the country, including a family of farmers in Missouri. Instead of spending the money to develop the purported green energy technology, Reinert used the money to pay for personal expenses and luxury automobiles, sales commissions and purchases at Apple’s iTunes store, as well as sending money to an account in Poland.

            In addition to the IFW scam, the superseding indictment alleges that Reinert fraudulently obtained and used a United States passport in the name “Peter Michael Berger” after falsely claiming he was born in Maine. During the investigation, authorities learned that Reinert actually was born in Germany.

            Finally, the superseding grand jury adds charges alleging that Reinert failed to file a corporate tax return for 2010 for another company he controlled, Green Energy Enterprises, Inc.

            “This defendant is charged with operating a series of fraudulent companies, falsely claiming that the companies were good investments,” said United States Attorney Eileen M. Decker. “Worse still, Mr. Reinert’s schemes preyed upon his victims’ desire to contribute to the public good, either by improving the environment or increasing the security of identification documents. This defendant’s fraudulent activity was widespread and harmed victims across the United States.”

            Reinert has been in custody without bond since he was arrested on the original 14-count indictment, which alleges he fraudulently raised money for two other companies that were purportedly developing technology to increase gas mileage and prevent the counterfeiting of government-issued identity documents. The original charges were included as part of the superseding indictment.

            “These latest allegations against Mr. Reinert suggest he is a serial con artist who continues to cheat investors into funding his schemes and his lifestyle,” said Deirdre Fike, the Assistant Director in Charge of the FBI's Field Office. “Investors can verify federal and military employment and, in many cases, the legitimacy of an investment, by doing research before handing over their savings.”

            The superseding indictment, which alleges that victims cumulatively suffered losses of approximately $6.8 million, charges Reinert with 19 counts of wire fraud, 13 counts of mail fraud, two counts of passport fraud, and one misdemeanor tax count.

            Reinert is expected to be arraigned on the superseding indictment in United States District Court in Santa Ana on August 8. United States District Judge Josephine L. Staton previously ordered Reinert to stand trial on September 20.

            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 fraud charges for the investment scams each carry a statutory maximum penalty of 20 years in federal prison. The passport fraud charges each carry a statutory maximum penalty of 10 years. The charge of failure to file a tax return carries a statutory maximum penalty of one year.

          The investigation into Reinert was conducted by the Federal Bureau of Investigation and IRS Criminal Investigation.

          The case is being prosecuted by Assistant United States Attorney Vibhav Mittal of the Santa Ana Branch Office.

          LOS ANGELES – A North Hollywood man surrendered to U.S. Marshals this morning after an arrest warrant was issued on federal charges of aiding and abetting the illegal smuggling of protected elephant ivory.

          Cesar Ernesto Gutierrez, 75, was charged in a criminal complaint filed Wednesday in United States District Court with aiding and abetting the attempted illegal exportation from the United States to Taiwan of protected African elephant ivory.

          The affidavit in support of the criminal complaint alleges that Gutierrez, a well-known custom pool cue maker in the United States, operates Ginacue, a custom pool cue manufacturing business in North Hollywood. Gutierrez allegedly manufactured and sold two people approximately 41 sections of custom pool cues containing the protected elephant ivory inlays.  The two individuals were subsequently arrested at Los Angeles International Airport when agents with U.S. Customs and Border Protection and U.S. Fish and Wildlife Service discovered the pool cues in their luggage.  The seized pool cues were purchased from Gutierrez for approximately $75,000 to $85,000.  Gutierrez is charged with aiding and abetting the attempted illegal smuggling of the high-value pool cues.

          “The protection of threatened and endangered wildlife is an international concern,” said United States Attorney Eileen M. Decker. “Illegal trafficking of protected species, even small parts of them, creates a market and demand that can lead to the decimation of these vulnerable populations.”

          Gutierrez appeared this afternoon in United States District Court and was released on a $10,000 appearance bond.  Post-indictment arraignment was scheduled for August 24.

          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 alleged in the complaint carries a statutory maximum penalty of 10 years in federal prison.

          This case was investigated by the United States Fish and Wildlife Service, with assistance by United States Customs and Border Protection personnel. This case is being prosecuted by Assistant United States Attorney Amanda M. Bettinelli of the Environmental and Community Safety Crimes Section.

          LOS ANGELES – The Mayor of South El Monte was charged today with bribery for accepting money from a contractor doing business with the city, as well as accepting a bribe during an FBI undercover operation.

          In conjunction with the case filed today, Luis Aguinaga, 48, of South El Monte, agreed to plead guilty to one count of bribery.

          In a plea agreement filed today in United States District Court, Aguinaga admitted that, from 2005 to September 2012, he took bribes from a contractor doing work for the City of South El Monte and the payments were rewards in connection with the approval of city contracts for the contractor.

          The contractor – identified in the court documents as a confidential witness, or CW – made payments to Aguinaga approximately every two to three weeks, shortly after the contractor was paid by the City of South El Monte, according to the plea agreement. If the contractor failed to pay Aguinaga within a few days of being paid by the City, Aguinaga would call and ask for his payment.

          The bribe amounts were initially $500, and later they increased to $1,000. According to the plea agreement, the contractor made the bribe payments by placing cash in envelopes that were left in a bathroom at the South El Monte City Hall or were left inside the passenger side pocket of a car.

          The plea agreement describes a September 12, 2012 meeting monitored by the FBI where Aguinaga accepted a bribe:

          “Defendant was nervous about meeting with CW because Cudahy city officials, including the Mayor, had recently been arrested and charged with accepting bribes. While defendant was speaking with CW, defendant showed CW his cell phone on which he had written ‘don’t talk’ or ‘don’t saying anything,’ and defendant asked CW several times to accompany him to the bathroom. Once they went to the bathroom, CW left an envelope with $2,000 cash on the counter near the sink. Defendant took the envelope containing the money and kept at least $1,000 for himself.”  

          “This long-running corruption scheme compromised the effective governance of South El Monte,” said United States Attorney Eileen M. Decker. “Corruption like Mr. Aguinaga’s is a threat to government institutions and undermines the public’s trust in all government officials.  The residents of South El Monte deserve better.”

          Aguinaga admitted receiving at least $45,000 from the contractor.

          “Mr. Aguinaga abdicated his civic duty when he made decisions for the city based on bribes he demanded, instead of for the good of the people he was elected to serve,” said Deirdre Fike, the Assistant Director in Charge of the FBI's Los Angeles Field Office. “The FBI will not tolerate corruption by city officials, nor should the residents of South El Monte.”

          Aguinaga will be directed to appear for an arraignment in United States District Court in Los Angeles on August 10.

          The charge of bribery carries a statutory maximum sentence of 10 years in federal prison.

          This case was investigated by the Federal Bureau of Investigation.

          This case is being prosecuted by Assistant United States Attorney Ruth C. Pinkel of the Public Corruption and Civil Rights Section.

          LOS ANGELES – Two men who earned the moniker the “Cowboy Gun Bandits” for brandishing a large-caliber revolver during a series of robberies – starting with gas stations and culminating in a bank robbery that netted them over $55,000 – were convicted today in federal court.

          Dominic Dorsey, 48, of Hollywood, and Reginald Bailey, 71, of the Jefferson Park district of Los Angeles, were found guilty of 11 felony counts – conspiracy to interfere with commerce in violation of the Hobbs Act, five specific Hobbs Act robberies and five counts of using a firearm during the robberies.

          The jury that heard evidence during a trial that lasted just over two weeks found Dorsey and Bailey guilty of five robberies:

          • a September 24, 2013, robbery at a Shell gas station in Woodland Hills;

          • an October 6, 2013, robbery at an ARCO gas station in Newhall;

          • an October 18, 2013, robbery at a Chevron gas station in Woodland Hills;

          • an October 25, 2013, robbery at an ARCO gas station in Encino; and

          • a November 5, 2013, robbery of a Citibank branch in Glendale that netted more than $55,000.

          In addition to these robberies, the jury heard evidence in relation to the conspiracy count that Dorsey and Bailey also committed robberies at three other gas stations in October 2013.

          Many of the robberies were captured by video surveillance, which allowed investigators to determine that one of the robbers was missing part of his ring finger on his left hand. The video surveillance evidence helped lead authorities to Bailey, whose left hand is missing a portion of his ring finger.

          “These defendants participated in a series of brazen robberies involving guns aimed at terrorized employees,” said United States Attorney Eileen M. Decker. “While the robbers were extremely careful in concealing their identities during the robberies, the excellent work of law enforcement authorities led to their identification and convictions at trial.”

          “Task Force members who partnered to work this case and others are able to identify and remove violent armed robbers from the streets of Los Angeles by utilizing resources at the state and federal level,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Field Office. “A collaborative effort by detectives, agents and prosecutors paid off as evidenced by today’s verdicts, and as scores of victims robbed at gunpoint during the defendants’ robbery spree receive justice.”

          “I am always impressed by the collective talents of our Robbery Homicide detectives who worked tirelessly on this case along with our law enforcement partners to identify and locate these violent offenders who preyed upon our communities” LAPD Chief Charlie Beck said. “This is truly another example of solid investigative police work,” Beck concluded.

          Each of the Hobbs Act violations – a total of six – carries a statutory maximum penalty of 20 years in federal prison. The gun violations carry potential life sentences, but also would bring mandatory minimum sentences of seven years for the first count and 25 years for each of the four additional counts, which means Dorsey and Bailey are expected to receive sentences of at least 107 years in federal prison.

          United States District Judge Christina A. Snyder, who presided over the trial, is scheduled to sentence the two defendants on November 14.

          The investigation into the string of robberies by the “Cowboy Gun Bandits” was conducted by Los Angeles Metropolitan Task Force on Violent Crime, which is made up of investigators with the Federal Bureau of Investigation, the Los Angeles Police Department and the Los Angeles Sheriff’s Department. The Glendale Police Department provided substantial assistance during the investigation.

          This case was prosecuted by Assistant United States Attorney Jeffrey M. Chemerinsky of the Violent and Organized Crime Section and Assistant United States Attorney Joseph D. Axelrad of the Organized Crime and Drug Enforcement Task Force.

          SANTA ANA, California – An Orange County man who allegedly posed as an agent with U.S. Immigration and Customs Enforcement (ICE) in an attempt to extort money from at least one female victim made his first federal court appearance this afternoon after being charged with impersonating a federal officer.

          Luis A. Flores-Mendoza, 26, of Santa Ana, was arrested Monday by Special Agents with ICE Homeland Security Investigations (HSI). He was charged in a criminal complaint that federal prosecutors filed last week.

          Flores-Mendoza was initially arrested and charged in state court earlier this month after an investigation by the Placentia Police Department.

          According to the federal complaint, the female victim told Placentia police detectives that Flores-Mendoza arrived at her workplace last month clad in police tactical gear, including a vest, badge, and a firearm, which later proved to be a pellet gun. After allegedly identifying himself as an ICE agent, the victim said Flores-Mendoza presented her with a letter, purportedly from ICE, stating there was an immigration case against her. The defendant then allegedly instructed the victim to pay him $5,000 to prevent her and her child from being deported. At the time of his original arrest on the state charge earlier this month, Flores-Mendoza was driving a vehicle equipped with police-style strobe lights and a siren.

          “Impersonating a federal agent not only harms the victim who encounters the impersonator, but it can also undermine the public’s confidence in law enforcement officers,” said United States Attorney Eileen M. Decker. “In this case, the defendant allegedly posed as a federal agent in an effort to extort money from a vulnerable victim, who fortunately reported it to police.”

          “We’re committed to safeguarding the public from scam artists and others who exploit people’s fears for no other reason than to enrich themselves,” said Joseph Macias, Special Agent in charge of HSI’s Los Angeles office. “We’re concerned this defendant may have preyed on others, and we’re asking anyone who may have been victimized by this individual to come forward.”

          HSI and the Placentia Police Department are continuing to investigate this case. Authorities urge members of the public who have information that may be relevant to this ongoing probe to contact the Placentia Police Department or ICE’s toll-free tip line – 1-866-DHS-2ICE – or use the agency’s online tip form.  

          At his court appearance this afternoon, Flores-Mendoza was ordered freed on a $10,000 bond, and he was directed to appear for his arraignment on August 29.

          A criminal complaint contains allegations that a defendant has committed a crime. The defendant is presumed to be innocent until and unless proven guilty in court.

          If convicted of the impersonation charge, Flores-Mendoza faces a statutory maximum penalty of three years in federal prison.

          This case is being prosecuted by Assistant United States Attorney Robert J. Keenan.

          LOS ANGELES – A longtime employee of two Los Angeles-area businesses involved in earring manufacturing was charged today with wire fraud for stealing approximately $2 million from the companies.

          In conjunction with the case filed today, Claudia Alvarez Calderon, 45, of La Crescenta, agreed to plead guilty to the wire fraud charge.

          In a plea agreement filed today in United States District Court, Calderon admitted that she used the names of several non-existent or former employees who were no longer entitled to receive pay to fraudulently obtain wages and expense reimbursements from Onyx, Inc., a Harbor City-based manufacturer of earrings and ear piercing equipment, and Quadrtech, Inc., a Gardena-based company that finished and packaged the earrings and ear-piercing systems.

          “At times, defendant would cause deposits of up to four fake employees into one bank account in her own name,” according to the plea agreement. “These direct deposits were often over $18,000 a month, and sometimes as high as $28,000 a month.”

          Over the course of nearly a decade, Calderon fraudulently entered information into a computer system that caused Automatic Data Processing, Inc. (ADP) to make direct deposits or issue checks for the bogus employees. Calderon maintained several bank accounts to receive the money from Onyx and Quadrtech.

          “Calderon stole money from her longtime employers to support a lifestyle that included multiple daily trips to restaurants, trips to Europe and Hawaii, cosmetic surgery and furnishing a second home in Florida,” said United States Attorney Eileen M. Decker. “Calderon’s violation of her employers’ trust cost the companies millions, money that should have gone to the companies and their employees.”

          Over the course of her scheme, Calderon fraudulently obtained approximately $2 million from Onyx and Quadrtech.

          Calderon will be directed to appear in United States District Court in Los Angeles, likely on August 8.

          “Our trusted private sector partnerships led to a thorough investigation culminating in the perpetrator’s guilty plea. Would-be fraudsters should be deterred from plotting similar schemes,” said L. Robert Savage, U.S. Secret Service Special Agent in Charge of the Los Angeles Field Office.

          The charge of wire fraud carries a statutory maximum sentence of 20 years in federal prison.

          This case was investigated by the United States Secret Service.

          This case is being prosecuted by Assistant United States Attorney Ruth C. Pinkel of the Public Corruption and Civil Rights Section.

          LOS ANGELES – A former special agent with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) was sentenced today to 10 months in federal prison for accepting thousands of dollars in bribes from a Korean businessman.

          Joohoon David Lee, 43, who currently resides in Las Vegas, Nevada, was sentenced by United States District Judge Michael W. Fitzgerald, who called the bribery “a very, very grave crime.”

          Lee pleaded guilty last December to one count of bribery.

          “This defendant sold his position of authority as a law enforcement officer for a few thousand dollars,” said United States Attorney Eileen M. Decker. “As a consequence of this abuse of trust, he will now pay a far more significant price. This defendant’s crime, however, should not cast a shadow over the tens of thousands of law enforcement officers across the country who are carrying out their duties with honor and dedication.”

          Lee accepted bribe money from a Korean man identified in court documents at “H.S.” According to court documents, Lee, who was assigned to HSI’s Human Trafficking unit in Los Angeles, interviewed a woman in March 2012 who claimed that she was entering the United States to be a sex slave for H.S.

          About a year later, according to court filings, Lee met with an attorney representing H.S. and told the lawyer that Lee could fly to Korea, interview H.S. and submit a favorable report – if H.S. would finance the trip.

          “Thereafter, H.S.’s family arranged to have a relative, who was living in Southern California, travel to Las Vegas, where, by this time, defendant Lee had been transferred, and hand defendant Lee $3,000 in cash,” according to a sentencing memo filed by prosecutors that notes Lee purchased a plane ticket to Seoul, Korea the following day.

          Lee travelled to Seoul, where H.S. paid for Lee’s hotel and entertainment expenses. While in Korea, “Lee asked [H.S.] for $100,000 to make HS’s immigration issues go away,” according to the sentencing memo. H.S. ultimately paid Lee between $6,000 and $7,000 in cash.

          Upon returning to the United States, Lee prepared a report related to the investigation of H.S. that read: “Subject was suspected of human trafficking. No evidence found and victim statement contradicts. Case closed. No further action required.”

          The case against Lee was investigated by ICE’s Office of Professional Responsibility.

          “Those who work in law enforcement are supposed to uphold our nation’s laws, not willingly break them,” said Jeffrey Gilgallon, assistant special agent in charge for ICE’s Office of Professional Responsibility in Los Angeles. “As this case shows, ICE has zero tolerance for public officials who abuse their authority and violate the public’s trust to feed their own greed. Guarding against illegal or unethical behavior is not an option; it’s an obligation we have to the people we serve.”

          The case against Lee was prosecuted by Assistant United States Attorney Lizabeth A. Rhodes, Chief of the General Crimes Section.

            SANTA ANA, California – An Orange County man who admitted that he attempted to provide material support to the Islamic State of Iraq and the Levant (ISIL) and making a false statement in a passport application was sentenced today to 15 years in federal prison.

            Adam Dandach, 22, of Orange, was sentenced this morning by United States District Judge James V. Selna. After he completes his 180-month prison term, Dandach will be on supervised release for the remainder of his life.

            In sentencing Dandach, Judge Selna said the defendant’s conduct was “serious,” required “significant planning,” and went on for more than a year.

            When he pleaded guilty in August 2015, Dandach admitted that, beginning in approximately November 2013 and continuing until July 2, 2014, he attempted to travel to Syria to join ISIL with the purpose of providing material support to the designated foreign terrorist organization. He further admitted that he knew that ISIL was a designated foreign terrorist organization that engaged in terrorist activity and terrorism.

            Dandach “read materials on achieving martyrdom through jihadi fighting,” communicated with others affiliated with ISIL in Syria to obtain information about joining the group, and made online posts that celebrated terrorists, prosecutors said in a sentencing memorandum filed with the court.

            “Terrorist organizations that reach into our nation via social media and other online recruiting efforts continue to pose a grave threat to our national security,” said United States Attorney Eileen M. Decker. “I commend the excellent work of the Joint Terrorism Task Force in this case, which discovered Dandach’s plan and prevented an American from becoming a fighter for the world's most dangerous terrorist organization.”

            “Mr. Dandach was deliberate in his planning to join the ranks of terrorists bent on killing Americans,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “This sentence makes it clear that the government will not tolerate support for terrorism by American citizens.”

            According to court documents, on July 1, 2014, Dandach purchased a ticket to fly from Orange County to Istanbul. The FBI intercepted Dandach at the John Wayne International Airport the following day. Dandach told FBI special agents that his ultimate destination was Syria and that he intended to pledge allegiance to ISIL’s leader, Abu Bakr al-Baghdadi. He explained that he wished to live under the control of ISIL and intended to undergo weapons training. 

            Dandach also admitted that he made a false statement in a passport application, namely that he had lost his previous passport. In fact, a family member had taken Dandach’s passport from him in 2013 when he expressed an interest in traveling to Syria.

            Dandach “had been planning for over a year to join ISIL, a murderous terrorist organization that he knew committed horrifically violent acts,” according to the government’s sentencing brief. “He possessed videos of their decapitations and pictures of their atrocities on his cellular telephone. Defendant admitted that ISIL committed these atrocities to instill fear in its enemies. He admitted that he intended to pledge allegiance to the leader of ISIL. And, he admitted that he would do whatever ISIL’s leader asked of him.”

            The investigation in this case was conducted by the FBI’s Joint Terrorism Task Force in Orange County.

            The case was prosecuted by Assistant United States Attorneys Celeste Corlett and Annamartine Salick of the Terrorism and Export Crimes Section.

Update:

            Today, Long Beach-based lobbyist Carl A. Kemp pleaded guilty to subscribing to a false tax return for the year 2012. Kemp entered the plea before United States District Judge Philip S. Gutierrez.

            Kemp is scheduled to be sentenced on November 7, at which time he will face a statutory maximum sentence of three years in federal prison.

Original News Release (June 8):

Long Beach Lobbyist Agrees to Plead Guilty to Federal Tax Offense for Failing to Report Income Received from Illegal Marijuana Stores

            LOS ANGELES – A Long Beach-based lobbyist, whose clients included illegal marijuana stores in Long Beach, has been charged with filing a false tax return and failing to report more than three-quarters of a million dollars in income over a six-year period.

            Carl A. Kemp, 43, of Long Beach, the owner of the public relations firm The Kemp Group, was charged yesterday with subscribing to a false tax return for the year 2012.

            “For years, Mr. Kemp failed to accurately report his income to the IRS, going so far as reporting zero taxable income for 2012 when his business brought in more than $200,000,” said United States Attorney Eileen M. Decker. “Everyone, no matter what business they are engaged in, has a responsibility to fully report their income on their income tax returns.”

            In a plea agreement also filed yesterday, Kemp agreed to plead guilty to the tax offense. As part of the plea agreement, Kemp admits receiving a total of $754,783 in income that he failed to report on his taxes for the years 2007 through 2012. Kemp admits that he owes the Internal Revenue Service a total of $210,661 to cover the back taxes due for those six years, as well as a civil fraud penalty.

            “As admitted by Kemp in documents filed with the court today, all forms of income are taxable, including cash payments received from illegal marijuana dispensaries and fees paid for lobbying services,” stated IRS Criminal Investigation Acting Special Agent in Charge Anthony J. Orlando. “Those Americans who file accurate, honest and timely returns can be assured that the government will hold accountable those who don’t.”

            The charge of subscribing to a false tax return carries a statutory maximum penalty of three years in federal prison.

            Kemp will be directed by the court to appear for an arraignment in this case, likely later this month.

            The case against Kemp was investigated by IRS Criminal Investigation and the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney Ruth C. Pinkel of the Public Corruption and Civil Rights Section.