Central District of California
Press releases recorded for this federal judicial district.
Oregon Man Pleads Guilty to Hacking Apple E-Mail AccountsRead the Press Release
LOS ANGELES – An Oregon man has pleaded guilty to a felony computer hacking charge related to a phishing scheme that gave him illegal access to 363 Apple and Google e-mail accounts, including those belonging to members of the entertainment industry in Los Angeles.
Andrew Helton, 29, of Portland, pleaded guilty yesterday to a felony violation of the Computer Fraud and Abuse Act, specifically a charge of unauthorized access to a protected computer to obtain information.
Helton pleaded guilty before United States District Judge John A. Kronstadt, who scheduled a sentencing hearing for June 2. As a result of yesterday’s guilty plea, Helton faces a statutory maximum sentence of five years in federal prison.
“In today’s digital world, people use their e-mail and online accounts to store photos, music, notes, calendars, contacts, financial, and health information,” said United States Attorney Eileen M. Decker. “Through prosecutions such as the one announced here today, the United States Attorney’s Office is committed to assisting the continuing efforts of private companies to protect this sensitive and personal information from the malicious actions of sophisticated hackers and cyber criminals.”
According to his plea agreement, from March 2011 to May 2013, Helton engaged in a phishing scheme to obtain usernames and passwords for his victims. He sent e-mails to victims that appeared to be from Apple or Google and asked victims to “verify” their accounts by clicking on a link. Once the victims clicked on the link, they were taken to a malicious website that looked like an Apple or Google login page. When the victims entered usernames and passwords on the malicious website, Helton then had access to the victims’ e-mail accounts.
As a result of his scheme, Helton obtained approximately 448 usernames and passwords for approximately 363 e-mail accounts. Helton used this information to access and view the contents of the e-mail accounts.
Many of Helton’s victims were members of the entertainment industry in Los Angeles. By illegally accessing the e-mail accounts, Helton obtained 161 sexually explicit, nude and/or partially nude images of approximately 13 victims, some of whom were celebrities.
“The thought of a stranger accessing your private communications for sport or monetary gain can be devastating,” said David Bowdich, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “This insidious crime has distressed scores of average individuals, as well as celebrity victims. The FBI is committed to holding accountable those who illegally intrude upon the cyber landscape, and to educating consumers about strengthening passwords and employing two-factor authentication, among other safeguards.”
The case against Helton is the product of an investigation by the Federal Bureau of Investigation.
Sacramento Man Found Guilty of Federal Charge of Producing Child Pornography that Was Used in Online Ads for Prostitution ServicesRead the Press Release
LOS ANGELES – A federal jury this afternoon convicted a Sacramento man of producing child pornography in a case in which his co-defendant previously pleaded guilty to the sex trafficking of the 16-year-old victim.
Antonio Dickerson, 26, was found guilty of one count of sexual exploitation of a minor for production of child pornography, an offense that carries a mandatory minimum sentence of 15 years and a maximum sentence of 30 years in federal prison.
Dickerson – who was also known by several aliases, including “Girbaud,” “Bohanlin” and “Mayor Marlow” – is scheduled to be sentenced by United States District Judge Stephen V. Wilson on May 2.
Previously in this case, Dickerson’s co-defendant – D’Antoine Thomas, 26, also of Sacramento – pleaded guilty to sex trafficking of a minor. Thomas faces a mandatory minimum sentence of 10 years and a maximum sentence of life in federal prison when he is sentenced by Judge Wilson on March 14.
The victim in the case was 16 when she met Thomas in Sacramento in 2010. She soon started working for Thomas as a prostitute in Northern California. In April 2011, Dickerson transported Thomas, the victim and another prostitute to Orange County. During this trip, Dickerson directed the 16-year-old victim and another prostitute to simulate sex acts, which he photographed and posted on a website to advertise prostitution services.
“No child should be subjected to this type of exploitation,” said United States Attorney Eileen M. Decker. “Protecting our nation’s most vulnerable, especially minors, by aggressively investigating and prosecuting child exploitation crimes is a top priority of the Justice Department.”
The jury that convicted Dickerson today of producing child pornography also acquitted him of a charge of sex trafficking of a minor.
This case is the result of an investigation by the FBI and Sacramento Sherriff’s Department.
Federal Inmate who Orchestrated Stolen Check Scheme from Prison Sentenced to Another 9+ Years in Multi-Million Dollar Fraud CaseRead the Press Release
LOS ANGELES – A former Las Vegas resident who was incarcerated in the federal prison in Victorville while he oversaw a scheme to obtain and cash stolen checks has been sentenced to another 110 months in prison for conspiring to commit bank fraud.
Kingsley Osemwengie, 30, was sentenced Monday by United States District Judge R. Gary Klausner for orchestrating a fraud ring that attempted to negotiate millions of dollars in Los Angeles County warrants – which are essentially checks issued by the municipality – that had been stolen by a corrupt postal employee.
The corrupt postal employee – Sabrina Pittman, 44, a resident of Watts – pleaded guilty on Monday before Judge Klausner to conspiring to commit bank fraud.
Osemwengie pleaded guilty in November in relation to an indictment that also charged his brother, Nelson Osemwengie, and two other defendants. The other three defendants have pleaded guilty and are pending sentencing before Judge Klausner.
Members of the conspiracy recruited dozens of bank customers who were willing to provide their ATM cards and access to their accounts in exchange for a share of the proceeds. The warrants were altered to change the name of payees to the names of the recruited account holders. The warrants were deposited into the bank accounts, and members of the conspiracy withdrew as much money as they could before the banks learned the warrants had been fraudulently deposited.
When Osemwengie pleaded guilty, he specifically admitted that a stolen Los Angeles County warrant for $729,340 was deposited into an account at Bank of America in 2014. Other federally-insured financial institutions that suffered losses included Chase Bank, Navy Federal Credit Union and Wells Fargo Bank.
“This scheme sought to victimize county taxpayers and banks insured by the United States," said United States Attorney Eileen M. Decker. "This crime warranted extending the term of imprisonment by more than nine years.”
The court found that Osemwengie’s scheme attempted to cause losses of more than $1.5 million, which represents the face value of the checks that were fraudulently deposited. However, authorities are continuing to assemble information related to losses in this case. Judge Klausner scheduled a restitution hearing for April 11, at which time he will determine the victims’ actual losses, and Osemwengie will be ordered to repay victims.
The investigation in this case also revealed that co-conspirators attempted to use a drone to smuggle a cell phone into the prison yard at the Federal Correctional Institute in Victorville. The attempt was unsuccessful.
While incarcerated at FCI Victorville, Osemwengie was serving a 172-year sentence for trafficking in prescription narcotics.
Pittman is scheduled to be sentenced by Judge Klausner on May 9.
The bank fraud case against Osemwengie was investigated by the United States Postal Inspection Service. The Henderson (Nevada) Police Department, the Los Angeles Office of County Investigations, the United States Bureau of Prisons and the U.S. Postal Service’s Office of Inspector General provided substantial assistance.
Attorney General Lynch to Travel to Los Angeles as Part of National Community Policing TourRead the Press Release
WASHINGTON – Attorney General Loretta E. Lynch will travel to Los Angeles in the coming months as part of her national Community Policing Tour.
In this phase, the Attorney General will visit six jurisdictions around the country that have excelled in each of the six pillars discussed in the President’s Task Force on 21st Century Policing final report: (1) Building Trust and Legitimacy; (2) Policy and Oversight; (3) Technology and Social Media; (4) Community Policing and Crime Reduction; (5) Officer Training and Education; and (6) Officer Safety and Wellness (see: Community Policing Tour). The stop in Los Angeles will highlight Pillar 3—Technology and Social Media.
The Attorney General is kicking off her tour THURSDAY, FEBRUARY 11, and FRIDAY, FEBRUARY 12, in Miami-Dade County, Florida, to highlight Pillar 1 – Building Trust and Legitimacy. In addition to Miami-Dade County and Los Angeles, Attorney General Lynch will also visit Portland, Oregon; Indianapolis, Indiana; Fayetteville, North Carolina; and Phoenix, Arizona
“One of my top priorities as Attorney General is strengthening relationships between law enforcement officers and the communities we serve and protect,” said Attorney General Loretta Lynch. “During the second phase of my community policing tour, I will be highlighting some of the innovative efforts underway around the country to build trust, foster cooperation, and enhance public safety. I look forward to meeting with law enforcement officers, local leaders, and residents in the weeks and months ahead to discuss how we can ensure that every American benefits from neighborhoods that are supportive, safe, and strong.”
United States Attorney Eileen M. Decker said she was extremely pleased that Los Angeles has been selected as one of the stops on the Attorney General’s community police tour. “We look forward to participating in the Attorney General’s visit to Los Angeles later this year,” Ms. Decker said. “Fostering relationships between police and the communities they serve is an important step in improving transparency and confidence in law enforcement."
The Attorney General’s national Community Policing Tour builds on President Obama’s commitment to engage with law enforcement and other members of the community to implement key recommendations from the President’s Task Force on 21st Century Policing final report. The first phase of the tour launched on May 19, 2015, in Cincinnati, Ohio, and also included visits to Birmingham, Alabama; Pittsburgh, Pennsylvania; East Haven, Connecticut; Seattle, Washington; and Richmond, California.
Former L.A. County Sheriff Lee Baca Agrees to Plead Guilty to Lying to Federal Authorities during Investigation into His DepartmentRead the Press Release
LOS ANGELES – Former Los Angeles County Sheriff Lee Baca has agreed to plead guilty to a felony charge of making a false statement to federal authorities who were conducting a wide-ranging corruption and civil rights investigation into the Sheriff’s Department.
In a plea agreement filed this morning in United States District Court, Baca admitted that he lied to the FBI and the United States Attorney’s Office when he falsely stated that he did not know that LASD officials were going to approach the FBI’s lead agent on the investigation in 2011. In fact, Baca was aware that his deputies were going to contact the agent, and he directed that they “should do everything but put handcuffs” on her, according to his plea agreement.
During an April 12, 2013 meeting with FBI agents and Assistant United States Attorneys, Baca falsely stated that he was not made aware of his deputies contacting the FBI case agent until he received a phone call from the FBI’s then-Assistant Director in Charge of the Los Angeles Field Office, who told Baca that deputies had threatened to arrest the agent. In the plea agreement, Baca admitted that he knew his statement was untrue and that it was illegal to lie to federal investigators.
“Today’s charge and plea agreement demonstrate that illegal behavior within the Sheriff’s Department went to the very top of the organization,” said United States Attorney Eileen M. Decker. “More importantly, this case illustrates that leaders who foster and then try to hide a corrupt culture will be held accountable.”
The threat to arrest the FBI case agent was part of an extensive scheme to obstruct justice which previously has resulted in eight LASD deputies with ranks as high as captain being convicted of federal charges. The ninth person to be charged in relation to conspiracy to obstruct justice – former Undersheriff Paul Tanaka – is currently scheduled to go on trial on March 22.
During the course of the investigation that was being conducted by the FBI, the U.S. Attorney’s Office and a federal grand jury, a sheriff’s deputy assigned to the Men’s Central Jail accepted a bribe to smuggle a cell phone into the facility. The phone was delivered to an inmate who was working as an FBI informant. Jail officials later discovered the phone, linked it to the FBI and determined that the inmate was an informant. This led to a month-long scheme to obstruct the investigation, which included members of the conspiracy concealing the informant from the FBI, the United States Marshals Service and the grand jury. Members of the conspiracy also engaged in witness tampering and harassing the FBI agent.
Baca participated in a September 25, 2011 meeting in which senior members of the department discussed approaching the FBI case agent. The next day, two LASD sergeants approached the agent and threatened her with arrest.
During the 2013 meeting with the FBI and Assistant United States Attorneys, Baca denied knowing about the plan to approach the case agent, and he also denied participating in conversations about “keeping the FBI and Inmate AB away from each other,” according to the statement of facts in the plea agreement.
“One of the measures of an organizational culture is how it handles its allegations of misconduct,” said David Bowdich, Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Mr. Baca set the wrong command climate and allowed that culture to fester, instead of fostering an environment of accountability. In short, he did not lead when he had the opportunity to do so.”
In the plea agreement, the parties agree that the federal sentencing guidelines call for a sentence of up to six months in federal prison, and they have agreed that Baca should not receive a sentence above the guideline range. Once he pleads guilty, the actual sentence will be determined by the federal judge presiding over the case. But if the court decides to impose a sentence greater than six months, Baca would be allowed to withdraw from the plea agreement and face a possible indictment.
Baca made his initial appearance this morning in federal court, and he is expected to formally enter his guilty plea this afternoon at 2:30.
The case against Baca is the result of an investigation by the FBI, 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, 17 current or former members of the Los Angeles Sheriff’s Department have now been convicted of federal charges. If a federal judge accepts the plea agreement this afternoon, Baca would become the 18th person to be convicted.
O.C. Attorney Sentenced to Prison for Obstructing Justice by Helping Witness in ‘Chinese Birthing House’ Investigation Try to Flee the U.S.Read the Press Release
SANTA ANA, California – An Irvine-based immigration attorney has been sentenced to 21 months in federal prison for obstructing justice in relation to a scheme in which he agreed to help a Chinese national flee from the United States after the woman had been designated as a “material witness” in a criminal investigation into “birthing houses” operating in Southern California.
Ken Zhiyi Liang, 39, of Irvine, was sentenced yesterday afternoon by United States District Judge Andrew J. Guildford.
Liang was found guilty in September of conspiring to obstruct justice, obstructing justice, and tampering with a witness, who is referred to in court papers as “D.L.”
Liang “was caught on hours of video and audio recordings selling and marketing his abilities to D.L. to help smuggle her out of the United States in violation of court orders, in exchange for a $6,000 fee to himself and a $1,500 to $3,000 fee for three co-conspirators that would assist him,” prosecutors wrote in a sentencing brief filed with the court.
The Chinese national had been designated as a material witness in the federal investigation, meaning she was subject to a court order preventing her from leaving the United States without authorization from the government or court. Liang had represented the witness in the matter for about a month until the court removed him as attorney of record, over his objections, in April 2015.
"As an attorney and officer of the court, Mr. Liang owed a heightened duty to respect and follow court orders," said United States Attorney Eileen M. Decker. "Instead Mr. Liang chose to violate those court orders, and induced others to violate court orders, for his own personal profit. Today's sentence is a reminder of the importance of court orders and protecting the integrity of federal investigations."
The federal investigation, which became known when authorities executed dozens of search warrants nearly a year ago, focuses on so-called birthing houses that “provided services to Chinese nationals, who travelled into the United States from China, for the purpose of giving birth to children so that the children could obtain United States citizenship,” according to court documents.
Unbeknownst to Liang at the time, D.L. was cooperating with federal agents with U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, who were monitoring conversations between Liang and the witness. Liang was arrested on May 15 by federal authorities as he was walking with the witness towards his car, supposedly to begin a trip to a coffee shop in Corona, where he was going to introduce D.L. to the co-conspirators. After his arrest, Liang led agents back to his office, where he returned the $6,000 he had accepted from the witness. Liang has remained in custody since his arrest last spring.
According to court documents, Liang provided assistance to two other material witnesses who fled to China, and to another material witness who was intercepted at Los Angeles International Airport on April 15.
The investigation into the birthing houses is being conducted by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and IRS – Criminal Investigation.
Orange County Man Faces Nearly 200 Years in Prison after Being Convicted of Federal Charges in Mortgage Fraud SchemeRead the Press Release
SANTA ANA, California – A federal jury today convicted an Orange County man for leading a “builder bailout” real estate scheme that resulted in the fraudulent purchase of more than 100 condominium units around the country with mortgages that mostly went into default, resulting in foreclosures and millions of dollars in losses.
Momoud Aref Abaji, 34, of Huntington Beach, was convicted this afternoon in United States District Court of conspiracy to commit bank fraud and wire fraud, five counts of wire fraud, and two counts of tax evasion. Five of Abaji’s co-conspirators have already been convicted, and one, Wajieh Tbakhi, remains a fugitive.
“Abaji’s fraud cost these financial institutions millions of dollars and put taxpayer funds at risk,” said United States Attorney Eileen M. Decker. “The Department of Justice is dedicated to protecting the public fisc from this type of fraud.”
Abaji and his co-conspirators operated the scheme through Excel Investments and related companies in Santa Ana and then Irvine. In the scheme, Abaji and his co-conspirators identified condominium developments in which the developers were struggling to sell units and then arranged with the developers to purchase the units in return for large commissions. The developers benefitted by making it appear that their condos were selling and maintaining their value, while Abaji and his co-conspirators benefitted from the hefty commissions that they received, which were concealed from the mortgage lenders. The defendants recruited a number of straw buyers to purchase the properties as “investors,” and ensured that they qualified for financing by filing false loan applications on their behalf.
Abaji and his co-conspirators negotiated with condominium developers in California, Florida and Arizona to purchase condominium units in exchange for a hefty commission, which they often misleadingly referred to as “marketing fees” and did not disclose to the lenders. The defendants bought units for themselves, their relatives, and on behalf of “investors” with good credit scores who served as “straw buyers.” They recruited the straw buyers by presenting the scheme as an investment opportunity that required no down payment and would generate income through rental payments.
To obtain mortgages for the properties, Abaji and his co-conspirators prepared loan applications with false information about the straw buyers – inventing fake employment, income and assets for these individuals to qualify them for loans. They also submitted fabricated and altered W2 forms, pay stubs and bank statements in support of those applications, and they concealed the huge commissions from mortgage lenders by submitting false and misleading purchase and sale agreements and fake HUD-1 settlement statements. Based on these false statements, mortgage lenders funded more than $21 million in loans
Many of these loans went into default, and mortgage lenders lost millions after foreclosing on the properties, with current losses estimated at approximately $9 million. The Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal National Mortgage Association (Fannie Mae) purchased dozens of these loans on the secondary mortgage market and suffered losses of at least $2.37 million as a result of delinquencies, defaults and foreclosures on the properties.
“Whether you call it a marketing fee, commission, or kickback, all forms of income are taxable,” stated IRS Criminal Investigation’s Special Agent in Charge Erick Martinez. “As today’s verdict shows, the law is clear on the issue of taxable income and who is required to file and pay taxes.”
United States District Judge Andrew Guilford, who presided over the trial, set sentencing for May 23. At his sentencing, Abaji faces a statutory maximum sentence of 190 years in prison.
In addition to the guilty verdicts today, the jury found Abaji not guilty of one count of wire fraud.
This case is the result of an investigation by the Federal Bureau of Investigation, the Federal Housing Finance Agency’s Office of Inspector General, and IRS Criminal Investigation.
Operator of ‘Document Mill’ that Produced Bogus Credentials for Port Workers and Other Fake IDs Arrested on Federal ChargesRead the Press Release
LOS ANGELES – A Porter Ranch man who allegedly operated a “document mill” in Sylmar that produced fake IDs – including the credentials used to access secure areas of the Port of Los Angeles – has been arrested on federal charges of illegally manufacturing the counterfeit documents.
Brian Allen Dunmore, 54, was arrested Wednesday by special agents with the United States Coast Guard Investigative Services (CGIS), which is involved in an ongoing investigation into document mills that manufacture fraudulent identification, such as Transportation Worker Identification Credentials (TWICs), which are needed to access secure areas of the Port of Los Angeles.
Dunmore was arrested pursuant to a criminal complaint filed on Monday that charges him with one count of unlawfully possessing and producing an authentication feature. At his initial appearance Wednesday afternoon in United States District Court, Dunmore was ordered detained (held without bond), in part because he is a previously convicted felon who had a cache of firearms at his Porter Ranch residence.
“Our national security depends in part upon our ability to restrict access to sensitive areas, including significant transportation hubs such as the Port of Los Angeles,” said United States Attorney Eileen M. Decker. “Here, false identification documents were given to unauthorized individuals by a person who also illegally possessed an arsenal of high-powered weapons, making this crime extremely serious.”
Special agents with CGIS yesterday arrested a second man allegedly involved in the trafficking of counterfeit documents. A man charged in a second criminal complaint under the name Ricardo Gama-Diaz, also known as “Coy,” appeared in federal court yesterday afternoon and said his true name was Ricardo Rios-Gama.
Rios-Gama, 51, who resides in South Park neighborhood of Los Angeles, is charged with producing a false identification document. An affidavit filed in support of the criminal complaint alleges that Rios-Gama sold undercover agents counterfeit identification documents – including bogus TWICs, California driver’s licenses, Social Security cards and “Green Cards” – on three occasions.
“Transportation Worker Identification Credentials are an important component of our overall port and transportation security system,” said Rear Admiral Joe Servidio, Commander of the Eleventh Coast Guard District. “Taking swift and decisive action sends a strong message deterring future criminal activity.”
Dunmore operated a document mill in Sylmar, according to an affidavit filed in his case. Dunmore allegedly agreed to sell to undercover agents a computer program, printer, and card stock with microchips to produce and manufacture TWIC cards and other government identification documents, such as Social Security cards, Mexican identification cards, and California driver’s licenses. According to the case affidavit, Dunmore himself produced a TWIC card and Mexican identification card for the agents.
A TWIC is a worker identification card issued by the Transportation Security Administration (TSA) that allows individuals to access secure areas of the Port of Los Angeles. Those who are issued TWICs undergo a security background check. Because some people are ineligible to obtain a TWIC, due to a lack of immigration status or another reason, a black market for these documents has developed, according to the USGIS investigation.
“The fraudulent manufacturing and sales of official identification documents required to gain access to secure areas directly threatens and undercuts efforts in maintaining security within our nation's ports” said CGIS Special Agent in Charge Jon Finnegan. “The United States Coast Guard Investigative Service shall continue to aggressively pursue those violators and work with the United States Attorney's Office seeking prosecution to the fullest extent of the law.”
In conjunction with Dunmore’s arrest, CGIS agents executed a search warrant at his residence and recovered equipment that appeared to be used to create false identifications. The agents also recovered as a small arsenal of weapons and ammunition, including a fully-automatic Tec-9, two AR-15 rifles with over 2,000 rounds of ammunition, and an AK-47. The Bureau of Alcohol, Tobacco, Firearms and Explosives is assisting with this part of the investigation. At the court hearing on Wednesday, federal prosecutors successfully argued that Dunmore posed a danger to the community because he was a felon illegally in possession of a host of weapons. Eleven of the guns were unregistered and among the thousands of rounds of ammunition, agents recovered at least 15 high capacity magazines.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
At Dunmore’s court appearance on Wednesday, a United States Magistrate Judge scheduled a preliminary hearing for February 17 and an arraignment February 23.
At his court hearing yesterday, Rios-Gama was ordered freed on a $10,000 bond, but he will be subject to electronic monitoring. Rios-Gama was ordered back to federal court on February 25 for a preliminary hearing and on March 2 for an arraignment.
If they are convicted of the charges against them, each defendant would face a statutory maximum penalty of 15 years in federal prison.
This ongoing investigation is being conducted by the United States Coast Guard Investigative Service.
Glendora Doctor Pleads Guilty to Distributing Addictive Painkillers and Transferring Proceeds to an Off-Shore Bank AccountRead the Press Release
LOS ANGELES – A medical doctor who served as the face of a sham Los Angeles clinic pleaded guilty today to federal drug trafficking and money laundering charges connected to her illegal distribution of the powerful painkiller best known by the brand name OxyContin.
Dr. Madhu Garg, 64, of Glendora, pleaded guilty to one count of illegally distributing oxycodone and one count of money laundering for transferring the proceeds of criminal activity to a Malaysian bank account.
Garg pleaded guilty before Untied States District Judge John A. Kronstadt, who scheduled a sentencing hearing for May 26. As a result of today’s guilty pleas, Garg faces a statutory maximum sentence of 30 years in federal prison.
Garg was arrested in January 2015, along with the other operators of the now-defunct Southfork Medical Clinic in Los Angeles. A federal grand jury indictment charged seven defendants with conspiring to sell medically unnecessary prescriptions for drugs that included oxycodone, hydrocodone (commonly sold under the brand names Vicodin, Norco and Lortab), alprazolam (best known by the brand name Xanax), carisoprodol (a muscle relaxant sold under the brand name Soma) and promethazine with codeine (a cough syrup sold on the street as “purple drank” and “sizzurp”).
As part of her guilty plea, Garg admitted that she issued prescriptions for those drugs to Southfork “patients” at the instructions of the owner of the clinic, Jagehauel Gillespie, and that she knew the “patients” did not actually need the drugs. In a plea agreement filed in United States District Court, Garg “acknowledges that she intentionally prescribed the drugs outside the usual course of professional practice and without a legitimate medical purpose.”
“Doctors are duty-bound to do everything they can to protect the health of their patients,” said United States Attorney Eileen M. Decker. “Issuing prescriptions for powerful and addictive drugs for no medical purpose undermines this basic principle. Medical professionals who violate federal law by trafficking narcotics put lives at risk and compromise our health care system.”
Records maintained by the State of California show that Garg issued more than 10,000 prescriptions for controlled drugs – the vast majority of which were for hydrocodone or alprazolam – over the year-long period that she worked at Southfork. Financial records show that, over the same time period, Garg received more than $300,000 in cash and transferred more than $90,000 to bank accounts held in Thailand and Malaysia.
“When doctors abuse their professional license for financial gain they put the public at risk, in this case by dispensing highly addictive controlled substances,” stated IRS Criminal Investigation’s Special Agent in Charge Erick Martinez. “IRS Criminal Investigation is proud to contribute our financial expertise in an effort to halt the illegal sale and distribution of prescription drugs.”
During the investigation, Garg issued prescriptions for oxycodone and promethazine with codeine to undercover agents on eight occasions. During one of the meetings, Garg gave a prescription to an undercover witness, and then Garg agreed to issue a new prescription to the witness the following week under a false name.
“The abuse of prescriptions drugs continue to take a horrific toll on public health and safety in our communities,” said Stephen G. Azzam, Acting Special Agent in Charge of DEA’s Los Angeles Field Division. “The DEA will continue to work with our partner agencies to identify and investigate doctors who are using their medical licenses to illegally deal drugs.”
The conspirators also used Los Angeles as a base of operations to acquire and deliver bulk shipments of prescription drugs to Texas, according to court documents. Furthermore, according to court records, Garg continued to assist Gillespie in acquiring oxycodone from international wholesalers even after the Medical Board of California revoked Garg’s license in December 2013.
Previously in this case, five of the other defendants have pleaded guilty, including Gillespie, who was sentenced by Judge Kronstadt in November to six years in federal prison. One other defendant is pending trial, which is scheduled for later this year.
The investigation into Garg was conducted by the Drug Enforcement Administration’s Los Angeles and Houston field divisions, IRS - Criminal Investigation, the Los Angeles Police Department, the Los Angeles County Sheriff’s Department, the California Department of Justice, and the Texas Department of Public Safety.
Former Chief of Los Angeles Port Police Pleads Guilty to False Statement and Tax Evasion Charges Related to Corruption CaseRead the Press Release
LOS ANGELES – The former chief of police for the Port of Los Angeles pleaded guilty today to federal charges of tax evasion and making false statements to FBI agents who were investigating his acceptance of a bribe in connection with the development of a social networking program that would become the official smartphone app for the Port and would then be marketed to other law enforcement agencies.
Ronald Jerome Boyd, 58, of Torrance, pleaded guilty this afternoon to three offenses and as a result faces a statutory maximum prison term of 11 years in federal prison.
Boyd pleaded guilty before United States District Judge R. Gary Klausner on the day he was scheduled to go to trial on a 16-count indictment that was returned by a grand jury last year.
Boyd pleaded guilty to lying to federal investigators about a scheme related to a smartphone app called Portwatch, which was developed to provide information to the public and to allow citizens to report criminal activity at the port.
In 2011, Boyd and two business partners formed BDB Digital Communications, a company that entered into a revenue-sharing agreement with the company developing Portwatch. The parties involved with BDB intended to generate revenues by marketing and selling a similar app – called Metrowatch – to other government agencies. Boyd was set to receive approximately 13.33 percent of all gross revenues generated by the sale of the Metrowatch application.
According to the indictment in this case, Boyd received his financial interest in return for guaranteeing that the Portwatch contract would be awarded to the company. Prosecutors and the defense have agreed to submit evidence regarding the bribery arrangement to Judge Klausner at sentencing.
Boyd pleaded guilty today to making false statements to special agents with the FBI during an interview in October 2014. Boyd admitted that he lied to the investigators when he denied having any financial interest in Metrowatch or having engaged in a conflict of interest.
“Public officials who use their position of leadership for unlawful personal gain erode the public’s trust in government,” said David Bowdich, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Law enforcement officials at all levels have an obligation to uphold the law and remain loyal to the citizens they swore to serve.”
Boyd also pleaded guilty to tax evasion in relation to his personal income tax return for 2011. In his plea agreement, Boyd admitted receiving income from a security business he operated, At Close Range. The income came from the owner of a company doing business with the Port, American Guard Services, and Boyd admitted that he failed to report that income on his personal income tax returns for years 2007 through 2011.
Additionally, Boyd pleaded guilty to a misdemeanor count of failing to file a 2011 tax return for At Close Range. While he pleaded guilty to one only count of failing to file a tax return for At Close Range, Boyd admitted in his plea agreement that he failed to file tax returns for the business for years 2007 through 2011.
The estimated loss of tax revenue to the Internal Revenue Service for Boyd’s conduct was more than $300,000.
“Our largest enforcement program is directed at the portion of American taxpayers who willfully and intentionally violate their known legal duty of filing and paying their fair share of taxes,” said IRS Criminal Investigation’s Special Agent in Charge Erick Martinez.
Judge Klausner scheduled a sentenced hearing for July 25.
The case against Boyd is the product of an investigation by the Federal Bureau of Investigation and IRS – Criminal Investigation.
9 Charged in Federal Court with Circumventing Smog Check Program by ‘Clean Piping’ over 1,300 Vehicles that Were Never TestedRead the Press Release
LOS ANGELES – A federal grand jury has returned a 44-count indictment that charges nine defendants with violating the Clean Air Act by conducting hundreds of fraudulent smog check inspections that falsely certified vehicles had passed emissions tests when different cars and trucks had actually been tested.
The indictment, which was filed yesterday afternoon in United States District Court, focuses on Smogz R Us, a shop that operated on West 54th Street in South Los Angeles. The defendants – who are charged with conspiracy and various counts of making false statements in a record – allegedly performed more than 1,300 fraudulent smog checks at Smogz R Us.
“Environmental protection programs, such as California’s smog check program, are designed to protect our health and safety,” said United States Attorney Eileen M. Decker. “The operator and employees of this smog check facility – one of many on the front lines of limiting air pollution – willfully circumvented testing procedures and allowed as many as 1,300 hundred cars and trucks to emit harmful levels of pollutants.”
The federal Clean Air Act gives primary responsibility for meeting “ambient air quality” standards for pollutants such as ozone, lead, sulfur dioxide and carbon monoxide to the states. As part of California’s plan to meet these air quality standards, the state’s Bureau of Automotive Repair oversees a vehicle inspection program that requires many vehicles in the state – and in the Los Angeles metropolitan area, where ozone pollution is particularly severe – to undergo an emissions test commonly called a smog check. The Clean Air Act prohibits a person from knowingly making false statements and certifications in relation to programs mandated under the Clean Air Act, which includes the California smog check program.
The indictment alleged that the nine defendants engaged in a form of fraudulent smog testing known as “clean piping.” To do this, the defendants entered vehicle identification information into the smog testing equipment, known as the Emissions Inspection System (EIS), to make it appear that a particular vehicle was being tested, but then they performed the emissions test on a second “substitute vehicle” to obtain a passing result for the vehicle that was not actually tested. This process of “clean piping” was allegedly used to conduct more than 1,300 fraudulent smog checks at Smogz R Us, and nearly all of the vehicles supposedly being tested were not even at the testing station. According to the indictment, once the bogus tests were completed, the defendants caused fraudulent Certificates of Compliance to be submitted to California’s Vehicle Information Database, falsely certifying that vehicles passed the smog checks when they were never tested.
The defendants named in the indictment are:
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Jermaine Elroy Williams, also known as “Aria,” 32, of Woodland Hills, who allegedly conducted fraudulent smog inspections at Smogz R Us after his license had been revoked and a Los Angeles Superior Court judge in a criminal case ordered Williams not to have any employment related to smog checks;
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Cheerline May Young, also known as Cheerline Williams, 52, of Athens, who is the mother of Jermaine Williams and was the owner and operator of Smogz R Us;
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Mario Mesa, 47, of Bell Gardens, a licensed smog check technician who allegedly conducted fraudulent smog check inspections at Smogz R Us;
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Jaime Patrick Alvarez, 55, of Baldwin Park, another licensed smog check technician who allegedly conducted fraudulent smog checks;
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Darnell Tyrone Usher, also known as “Who Knew,” 26, of South Los Angeles, who along with Williams was previously ordered by a Los Angeles Superior Court judge not to be employed in the smog or emissions industry;
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Lavell Fay Davenport, also known as “Precept,” 54, of South Los Angeles, who allegedly conducted fraudulent smog inspections;
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Miguel Angel Espinoza, 67, of Maywood, who allegedly facilitated and assisted in fraudulent smog checks;
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Mark Anthony Young, 23, of Woodland Hills, who is the son of Cheerline May Young and allegedly facilitated and assisted in fraudulent smog checks; and
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Cheerline Marie “Cici” Young, 26, of South Los Angeles, who is the daughter of Cheerline May Young and who also allegedly conducted fraudulent smog inspections.
The nine defendants will be summoned to appear for arraignment in United States District Court in the coming weeks.
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 charge of conspiracy of conspiracy carries a statutory maximum penalty of five years in federal prison, and the charge of making false statements in a record carries a statutory maximum penalty of two years.
The indictment targeting Smogz R Us is the product of an investigation by the United States Environmental Protection Agency, Criminal Investigation Division.
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Two L.A. County Sheriff’s Deputies Involved in Use-of-Force Incident Against Shackled Inmate Found Guilty of Obstruction of JusticeRead the Press Release
LOS ANGELES – Two Los Angeles Sheriff’s deputies who were assigned to the 3000 Floor of the Men’s Central Jail were found guilty this afternoon of falsifying reports with the intent to obstruct justice. The false reports were filed after an incident in which a shackled inmate was struck, kicked, repeatedly hit by a flashlight, and pepper-sprayed by the defendants.
Concluding a two-week trial, a federal jury convicted former deputies Joey Aguiar, 28, and Mariano Ramirez, 40. Both men were found guilty of one count of falsifying records with the intent to obstruct justice, a charge that carries a statutory maximum penalty of 20 years in federal prison.
The jury in the case was unable to reach a unanimous decision on a civil rights offense that alleges the deputies unlawfully beat the victim during the incident on February 11, 2009. The jury reported in open court that it was split 10-2 in favor of guilt.
The jury acquitted Aguiar and Ramirez of conspiring to violate the inmate’s civil rights.
United States District Judge Beverly Reid O’Connell scheduled a sentencing date for April 25. Federal prosecutors have yet to decide if they will retry Aguiar and Ramirez on the unresolved civil rights charge.
Aguiar was convicted of one count of falsification of records for submitting a report that falsely stated the inmate, Bret Phillips, who is now 44, was beaten after he had attempted to headbutt deputy Aguiar’s face and that Phillips violently kicked at Aguiar. Mr. Phillips did neither, according to testimony presented at the trial.
It was undisputed that Mr. Phillips was waist-chained with handcuffs binding his hands to a chain around his stomach throughout the entire beating.
During the trial, Chaplin Paulino Juarez, who was an eyewitness to the event, testified that he repeatedly raised concerns about what he had seen with senior LASD officials, but was rebuffed. Chaplin Juarez ultimately relayed his concerns to the ACLU. The information provided to the ACLU by the chaplain later came to the attention of the FBI. By this time the FBI had begun a wide-ranging investigation into civil rights abuses by the LASD in custodial settings, particularly excessive uses of force by deputies on the 3000 Floor of the Men’s Central Jail. Another witness, who was an inmate when Mr. Phillips was beaten, testified that he hid in the shower to avoid being seen by LASD personnel as he watched the deputies beat a defenseless and unmoving inmate.
Ramirez was found guilty of one count of falsification of records for submitting a report that falsely stated the victim had “viciously kicked his legs at deputies.”
During the incident – which allegedly involved an excessive and unreasonable use of force, according to the still-pending charge in the case – Aguiar and Ramirez punched and kicked the victim before using pepper spray on him and then hitting him repeatedly with a flashlight, according to the testimony at trial.
Soon after the incident, the deputies wrote the false reports, which formed the basis of a referral to the Los Angeles County District Attorney’s Office for potential criminal prosecution of Mr. Phillips.
“These defendants failed to report accurately the circumstances surrounding the beating of an inmate who was restrained with waist chains in an attempt to obstruct a subsequent investigation,” said United States Attorney Eileen M. Decker. “This failure to tell the truth and attempt to thwart oversight tarnishes the outstanding work of law enforcement officers everywhere.”
The case against Aguiar and Ramirez is the result of an investigation by the FBI, 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, 17 current or former members of the Los Angeles Sheriff’s Department have now been convicted of federal charges.
Justice Department and Consumer Financial Protection Bureau Reach Settlement to Resolve Allegations of Auto Lending Discrimination by ToyotaRead the Press Release
WASHINGTON – The Department of Justice and the Consumer Financial Protection Bureau (CFPB) announced today a settlement to resolve allegations that Toyota Motor Credit Corporation (Toyota) engaged in a pattern or practice of discrimination against African-American and Asian/Pacific Islander borrowers in auto lending. Toyota, based in Torrance, California, is the nation’s largest captive auto lender, and the fifth largest auto lender overall.
Through the settlement, Toyota agrees to limit significantly the discretion of car dealers to charge interest rate markups on Toyota loans. Notably, Toyota has also committed that it will not increase the interest rates it quotes to car dealers in order to fund additional nondiscretionary dealer compensation implemented as part of the settlement. The settlement also provides $19.9 million in compensation for borrowers who took out loans between January 2011 and January 2016 and paid higher markup based on the alleged discrimination. Additionally, Toyota will pay up to $2 million to African-American and Asian/Pacific Islander borrowers with markup disparities while Toyota is preparing to implement the new policies. The new policies must be in place by August 2016.
“Toyota’s reforms will level the playing field to ensure that all eligible borrowers – regardless of their race or national origin – can sign auto loans with fair terms and reasonable interest rates,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “While dealerships deserve fair compensation for the valuable customer service they provide, federal law protects consumers against higher price markups simply because of what they look like or where they come from. We commend Toyota for crafting a new compensation system that strikes an appropriate balance for dealers and consumers.”
Toyota is known as an indirect auto lender because, rather than taking applications directly from consumers, the company makes most of its loans through car dealers nationwide who help their customers pay for their new or used car by submitting their loan application to Toyota. It is also a captive auto lender because it is owned by an auto manufacturer and provides consumers with financing for the primary purpose of facilitating sales by the manufacturer and its associated franchised dealers. Toyota’s business practice, like most other major auto lenders, allows car dealers discretion to vary a loan’s interest rate from the price Toyota initially sets based on the borrower’s objective credit-related factors. Dealers receive greater payments from Toyota on loans that include a higher interest rate markup. The coordinated investigations by the department and the CFPB that preceded today’s settlement determined this system of subjective and unguided pricing discretion directly results in Toyota’s qualified African-American and Asian/Pacific Islander borrowers paying more than qualified non-Hispanic white borrowers.
To address this system, Toyota has agreed in today’s settlement to change the way it prices its loans by limiting dealer markup to 125 basis points (or 1.25 percentage points) for loans of 60 months or less, and to 100 basis points (or 1 percentage point) for loans greater than 60 months. The department and CFPB anticipate that Toyota’s new caps on discretionary markups will substantially reduce or eliminate disparities in markups based on race or national origin.
The settlement resolves claims by the department and the CFPB that Toyota discriminated by charging thousands of African-American and Asian/Pacific Islander borrowers higher interest rates than non-Hispanic white borrowers. The agencies claim that Toyota charged borrowers higher interest rates because of their race or national origin, and not because of the borrowers’ creditworthiness or other objective criteria related to borrower risk. The United States’ complaint alleges that the average African-American victim was obligated to pay over $200 more during the term of the loan because of discrimination, and the average Asian/Pacific Islander victim was obligated to pay over $100 more during the term of the loan because of discrimination. The Equal Credit Opportunity Act (ECOA) prohibits such discrimination in all forms of lending, including auto lending. Toyota’s settlement with the Justice Department, which is subject to court approval, was filed today in the U.S. District Court of the Central District of California in conjunction with the Justice Department’s complaint. Toyota resolved the CFPB’s claims by entering into a public administrative settlement.
“We are dedicated to promoting fair and equal access to credit in the auto finance marketplace,” said Director Richard Cordray of CFPB. “Toyota Motor Credit is among the largest indirect auto lenders, and we commend its industry leadership in shifting to reduced discretion to address the significant fair lending risks.”
“No consumer should be forced to pay more money for a loan because of their race or national origin,” said U.S. Attorney Eileen M. Decker of the Central District of California. “This settlement resolves our claims by providing compensation for affected consumers and seeking to ensure that future loans funded by Toyota reflect equal terms.”
In addition to the payments of at least $19.9 million to African-American and Asian/Pacific Islander borrowers, the settlement also requires Toyota to improve its monitoring and compliance systems. The settlement allows Toyota to experiment with different approaches toward lessening discrimination and requires it to regularly report to the department and the CFPB on the results of its efforts as well as discuss potential ways to improve results. The department commends Toyota for working cooperatively to reach an appropriate resolution of this case.
The settlement provides for an administrator to locate victims and distribute payments of compensation at no cost to borrowers whom the department and the CFPB identify as victims of Toyota’s discrimination. The department and the CFPB will make a public announcement and post information on their websites once more details about the compensation process become available. Borrowers who are eligible for compensation from the settlement will be contacted by the administrator, and do not need to contact the department or the CFPB at this time.
The Civil Rights Division, the U.S. Attorney’s Office of the Central District of California and the CFPB are members of the Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information about the task force, please visit www.StopFraud.gov.
The Justice Department’s enforcement of fair lending laws and the Servicemembers Civil Relief Act (SCRA) is conducted by the Housing and Civil Enforcement Section in the Civil Rights Division. Since 2010, the Civil Rights Division has provided approximately $1.4 billion in monetary relief for individual borrowers and impacted communities through its enforcement of the Fair Housing Act, ECOA and the SCRA. The Attorney General’s annual reports to Congress regarding ECOA highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications.
Justice Department and Consumer Financial Protection Bureau Reach Settlement to Resolve Allegations of Auto Lending Discrimination by ToyotaRead the Press Release
The Department of Justice and the Consumer Financial Protection Bureau (CFPB) announced today a settlement to resolve allegations that Toyota Motor Credit Corporation (Toyota) engaged in a pattern or practice of discrimination against African-American and Asian/Pacific Islander borrowers in auto lending. Toyota, based in Torrance, California, is the nation’s largest captive auto lender, and the fifth largest auto lender overall.
Through the settlement, Toyota agrees to limit significantly the discretion of car dealers to charge interest rate markups on Toyota loans. Notably, Toyota has also committed that it will not increase the interest rates it quotes to car dealers in order to fund additional nondiscretionary dealer compensation implemented as part of the settlement. The settlement also provides $19.9 million in compensation for borrowers who took out loans between January 2011 and January 2016 and paid higher markup based on the alleged discrimination. Additionally, Toyota will pay up to $2 million to African-American and Asian/Pacific Islander borrowers with markup disparities while Toyota is preparing to implement the new policies. The new policies must be in place by August 2016.
“Toyota’s reforms will level the playing field to ensure that all eligible borrowers – regardless of their race or national origin – can sign auto loans with fair terms and reasonable interest rates,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “While dealerships deserve fair compensation for the valuable customer service they provide, federal law protects consumers against higher price markups simply because of what they look like or where they come from. We commend Toyota for crafting a new compensation system that strikes an appropriate balance for dealers and consumers.”
Toyota is known as an indirect auto lender because, rather than taking applications directly from consumers, the company makes most of its loans through car dealers nationwide who help their customers pay for their new or used car by submitting their loan application to Toyota. It is also a captive auto lender because it is owned by an auto manufacturer and provides consumers with financing for the primary purpose of facilitating sales by the manufacturer and its associated franchised dealers. Toyota’s business practice, like most other major auto lenders, allows car dealers discretion to vary a loan’s interest rate from the price Toyota initially sets based on the borrower’s objective credit-related factors. Dealers receive greater payments from Toyota on loans that include a higher interest rate markup. The coordinated investigations by the department and the CFPB that preceded today’s settlement determined this system of subjective and unguided pricing discretion directly results in Toyota’s qualified African-American and Asian/Pacific Islander borrowers paying more than qualified non-Hispanic white borrowers.
To address this system, Toyota has agreed in today’s settlement to change the way it prices its loans by limiting dealer markup to 125 basis points (or 1.25 percentage points) for loans of 60 months or less, and to 100 basis points (or 1 percentage point) for loans greater than 60 months. The department and CFPB anticipate that Toyota’s new caps on discretionary markups will substantially reduce or eliminate disparities in markups based on race or national origin.
The settlement resolves claims by the department and the CFPB that Toyota discriminated by charging thousands of African-American and Asian/Pacific Islander borrowers higher interest rates than non-Hispanic white borrowers. The agencies claim that Toyota charged borrowers higher interest rates because of their race or national origin, and not because of the borrowers’ creditworthiness or other objective criteria related to borrower risk. The United States’ complaint alleges that the average African-American victim was obligated to pay over $200 more during the term of the loan because of discrimination, and the average Asian/Pacific Islander victim was obligated to pay over $100 more during the term of the loan because of discrimination. The Equal Credit Opportunity Act (ECOA) prohibits such discrimination in all forms of lending, including auto lending. Toyota’s settlement with the Justice Department, which is subject to court approval, was filed today in the U.S. District Court of the Central District of California in conjunction with the Justice Department’s complaint. Toyota resolved the CFPB’s claims by entering into a public administrative settlement.
“We are dedicated to promoting fair and equal access to credit in the auto finance marketplace,” said Director Richard Cordray of CFPB. “Toyota Motor Credit is among the largest indirect auto lenders, and we commend its industry leadership in shifting to reduced discretion to address the significant fair lending risks.”
“No consumer should be forced to pay more money for a loan because of their race or national origin,” said U.S. Attorney Eileen M. Decker of the Central District of California. “This settlement resolves our claims by providing compensation for affected consumers and seeking to ensure that future loans funded by Toyota reflect equal terms.”
In addition to the payments of at least $19.9 million to African-American and Asian/Pacific Islander borrowers, the settlement also requires Toyota to improve its monitoring and compliance systems. The settlement allows Toyota to experiment with different approaches toward lessening discrimination and requires it to regularly report to the department and the CFPB on the results of its efforts as well as discuss potential ways to improve results. The department commends Toyota for working cooperatively to reach an appropriate resolution of this case.
The settlement provides for an administrator to locate victims and distribute payments of compensation at no cost to borrowers whom the department and the CFPB identify as victims of Toyota’s discrimination. The department and the CFPB will make a public announcement and post information on their websites once more details about the compensation process become available. Borrowers who are eligible for compensation from the settlement will be contacted by the administrator, and do not need to contact the department or the CFPB at this time.
The Civil Rights Division, the U.S. Attorney’s Office of the Central District of California and the CFPB are members of the Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information about the task force, please visit www.StopFraud.gov.
The Justice Department’s enforcement of fair lending laws and the Servicemembers Civil Relief Act (SCRA) is conducted by the Housing and Civil Enforcement Section in the Civil Rights Division. Since 2010, the Civil Rights Division has provided approximately $1.4 billion in monetary relief for individual borrowers and impacted communities through its enforcement of the Fair Housing Act, ECOA and the SCRA. The Attorney General’s annual reports to Congress regarding ECOA highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications.
Toyota ComplaintToyota Consent Order
Orange County Man Operating Phone Room in Debt Relief Scam Pleads Guilty to Defrauding ConsumersRead the Press Release
LOS ANGELES – An Orange County man pleaded guilty today for his role in operating fraudulent debt relief firms that offered to settle credit card debts but instead took victims’ payments as undisclosed up-front fees, the Justice Department and U.S. Postal Inspection Service announced.
Jeremy Nelson, 30, pleaded guilty to one count of an indictment alleging conspiracy to commit mail fraud and wire fraud in connection with companies known as Nelson Gamble & Associates (Nelson Gamble) and Jackson Hunter Morris & Knight LLP (Jackson Hunter). According to the indictment, Nelson and his employees portrayed the debt relief companies as law firms and attorney-based companies that would negotiate favorable settlements with creditors. Clients made monthly payments expecting the money to go toward settlements. Nelson and his co-conspirators instead took at least 15 percent of the total debt as company fees, with the first six months of payments going almost entirely toward undisclosed up-front fees.
“Debt relief scams prey on vulnerable consumers trying to climb out of tough financial situations,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Justice Department will continue to investigate those who take advantage of consumers facing hard times, and prosecute unlawful schemes that bleed desperate consumers of their remaining resources.”
“This scheme victimized people already in financial distress,” said U.S. Attorney Eileen M. Decker of the Central District of California. “As today’s guilty plea shows, the Justice Department is committed to protecting consumers, particularly those who are vulnerable to fraud schemes designed to prey upon people already in perilous economic condition.”
“Protecting our customers from fraud is one of our agency’s biggest priorities,” said Acting Inspector in Charge Daniel Brubaker of the U.S. Postal Inspection Service. “The U.S. Postal Inspection Service will continue to vigorously pursue those who use our nation’s mail system to commit fraud or other illegal activity.”
Jeremy Nelson’s scheme ran from February 2010 to September 2012. Nelson admitted he changed the name of his company from Nelson Gamble to Jackson Hunter in 2011. Nelson and his co-conspirators told victims that Nelson Gamble had gone bankrupt and that Jackson Hunter was an unrelated company that had taken over some of the accounts. Nelson and his co-conspirators blamed past problems on Nelson Gamble and denied requests for refunds of money paid to Nelson Gamble. Some victims who previously demanded refunds accepted the explanation that Nelson Gamble was bankrupt and did not pursue complaints against Jackson Hunter.
Nelson faces a statutory maximum penalty of 20 years in prison. United States District Judge Dale S. Fischer has not yet scheduled a sentenced date.
One of Nelson’s co-defendants, Elias Ponce, pleaded guilty in October 2015. Two other defendants, Athena Maldonado and Christopher Harati, pleaded guilty in June 2015 in a related case. Trial against the remaining defendant charged in the scheme, John Vartanian, is set for September 13 in Los Angeles.
In September 2012, the Federal Trade Commission brought a civil case against Nelson and his companies, alleging that the defendants misrepresented debt relief services offered to consumers. (See https://www.ftc.gov/enforcement/cases-proceedings/122-3030-x120048/nelson-gamble-associates-llc-et-al). The case was settled by entry of a consent decree in August 2013.
Principal Deputy Assistant Attorney General Mizer commended the U.S. Postal Inspection Service team assigned to the Civil Division’s Consumer Protection Branch for their investigative efforts and thanked the U.S. Attorney’s Office of the Central District of California for their contributions to the case. The case is being prosecuted by trial attorneys Alan Phelps and James Harlow of the Consumer Protection Branch.
Hermosa Beach Couple Arrested on Federal Charges Related to Tax Scam and Passing False ‘Checks’ and ‘Bonds’ to Pay Off DebtsRead the Press Release
LOS ANGELES – Two Hermosa Beach residents were taken into custody yesterday after being indicted by a federal grand jury on a host of charges related to a scheme to defraud the Internal Revenue Service, which included passing bogus checks and bonds as a way to pay off debt for themselves and others.
Sean David Morton, 58, and his wife, Melissa Ann Morton, 50, are expected to be arraigned this afternoon in federal court in Los Angeles on a 56-count superseding indictment that was returned by a grand jury on January 27. The couple was arrested by special agents with IRS - Criminal Investigation in San Pedro Sunday morning after disembarking from a “Conspira-Sea Cruise.”
According to the superseding indictment, Sean David Morton filed a series of false income tax returns for the years 2005 and 2010 that sought millions of dollars in refunds. Melissa Morton allegedly filed several false tax returns for the year 2007. The couple “caused multiple copies and multiple versions of their income tax returns to be submitted to various IRS service centers throughout the United States in 2009 and 2010,” according to the indictment, which alleges they attached false Forms 1099-OID to support their claims for refunds.
The indictment specifically alleges that Sean David Morton filed a false 2006 income tax return 2010 that requested a refund of $2,809,921, and that in 2012 he filed a document that sought a tax refund of $1,560,634 for 2006.
In relation to the scheme, the indictment alleges that Sean David Morton on multiple occasions submitted to the IRS documents he called “Coupon for Setoff, Settlement, and Closure” in the amounts of $5,286,867 and $8,429,763. “These fictitious financial instruments were a purported bond in exchange for the refunds they sought from the IRS,” according to the indictment.
“Those who try to defraud the tax system often try to use complicated ‘legal’ filings to hide their true goal – stealing money paid by other taxpayers,” said United States Attorney Eileen M. Decker. “IRS agents and federal prosecutors have the tools to investigate and prosecute these sophisticated schemes, which undermine the entire tax system and ultimately victimize law-abiding taxpayers.”
Melissa Morton allegedly presented to the IRS in 2010 a “Coupon for Setoff, Settlement, and Closure” in the amount of $44,450 as a purported bond in exchange for a $14,450 refund that she sought. And, in 2013, both defendants allegedly presented to the IRS two “Non-Negotiable Discharging Bond and Indemnity” in the amounts of $10 million for Sean David Morton and $600,000 for Melissa Morton.
In relation to the tax returns and other documents submitted to the IRS, the Mortons are each charged with one count of conspiracy to defraud the United States and two counts of making false claims to the United States.
The indictment also charges Sean David Morton and Melissa Morton each with 24 counts of presenting false and fictitious instruments and documents – specifically items called “Non-Negotiable Discharging Bond and Indemnity” – which purported to be actual securities and financial instruments issued under the authority of the United States. These documents were submitted to the IRS, the California Franchise Tax Board, banks, mortgage companies, student loan companies, and county tax collectors, supposedly as a means to pay off debt. Melissa Ann Morton was charged with 25 counts of presenting or passing these documents. The Mortons allegedly also assisted others in presenting these false and fictitious instruments in amounts as high as $1.5 million.
“Driven by insatiable greed and a blatant disregard for the tax code, Mr. and Mrs. Morton have a long history of allegedly filing bogus tax returns and fictitious instruments claiming fraudulent refunds,” stated Erick Martinez, Special Agent in Charge of the IRS - Criminal Investigation. “People who create elaborate schemes that have no purpose other than to defraud the IRS run the very high risk of prosecution.”
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
If they are convicted of the charges in the superseding indictment, Sean David Morton would face a statutory maximum sentence of 650 years in federal prison, and Melissa Morton would face a statutory maximum sentence of 625 years.
The investigation into the Mortons was conducted by IRS - Criminal Investigation.
13 People Arrested after Law Enforcement Intercepts Nearly 3,000 Pounds of Marijuana being Smuggled into U.S. by Panga BoatRead the Press Release
LOS ANGELES – Federal authorities on Saturday arrested 13 people after law enforcement authorities interdicted nearly 3,000 pounds of marijuana that they were trying to smuggle into the United States by panga boat at Arroyo Quemada Beach in southern Santa Barbara County, just north of the city of Santa Barbara. All 13 defendants were named in a criminal complaint filed Sunday that charges them with possession of marijuana with the intent to distribute.
“Smuggling by panga boat endangers the lives of both the smugglers and authorities interdicting the boats and their payloads,” said United States Attorney Eileen M. Decker. “Law enforcement has and will continue to use all available means to curtail this dangerous activity.”
According to the affidavit in support of the criminal complaint filed yesterday, the United States Coast Guard first observed the panga boat at Arroyo Quemada Beach early Saturday morning. The affidavit notes that drug-traffickers commonly use panga boats at night in an effort to evade law enforcement.
In this case, authorities believe that three people were in the boat, and approximately 15 people were observed on shore helping to unload the bales of marijuana. Two vans and a pick-up truck separately drove to the beach, and bales of marijuana were loaded into the pick-up and one of the vans. The vehicles then departed the beach at about the same time, but they went in separate directions. One van, which was being used to transport the marijuana, was stopped in Camarillo; the second van, which was being used to transport people, was stopped when it returned to Arroyo Quemada Beach; and the pick-up, which was being used to transport marijuana, was stopped in Carpinteria. Law enforcement seized 114 bales of marijuana from the van stopped in Camarillo and the pick-up truck stopped in Carpinteria.
Authorities arrested the following individuals:
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Hector Raul Bernal-Lara, 41;
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Ricardo Sanchez-Marquez, 36;
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Daniel Aguilar, 25;
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Mark Garcia, 23;
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Susana Tobaldo, 42;
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Kevin Tes, 22;
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Josh Rubio, 21;
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Alfonso Aguilar-Ballestros, 48;
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Jesus Moreno-Sepulveda, 31;
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Santiago Galvan-Carrillo, 48;
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Paul Armenta-Bueno, 34;
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Bryan Castro, 18; and
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Daniel Fernando-Huizar, 26.
All 13 defendants are expected to make their initial appearances today in federal court in Los Angeles.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
The statutory maximum penalty for a violation of possession nearly 3,000 pounds of marijuana with the intent to distribute it is life in prison.
The investigation in this case was conducted by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the United States Coast Guard, the United States Border Patrol, the Los Angeles County Sheriff’s Department, the Santa Barbara County Sheriff’s Department, and the Ventura County Sheriff’s Department.
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Riverside Man Faces 10-Year Mandatory Federal Prison Term after Being Convicted for Third Time of Possessing Child PornographyRead the Press Release
LOS ANGELES – A Riverside resident has pled guilty to possessing child pornography and now faces a 10-year mandatory minimum sentence in federal prison.
James Gregory O’Neill, 58, of Riverside pleaded guilty on Monday, January 25 before United States District Judge R. Gary Klausner to possession of child pornography.
Because O’Neill has twice before been convicted of possessing child pornography, he will face a 10-year mandatory minimum prison term – and could be sentenced to as much as 20 years – when he is sentenced on April 18.
“Despite being convicted twice previously for possessing child pornography, Mr. O’Neill continued to victimize children by creating a market for child pornography,” said United States Attorney Eileen M. Decker. “It is one of the highest priorities of my office to prosecute those who would seek to victimize children, and in particular those who do so repeatedly.”
O’Neill pleaded guilty to possessing an SD memory card containing as many as 97 images of child pornography which he accessed on his cellphone. He possessed the memory card despite his convictions in 2003 in federal court for possessing child pornography – for which he was sentenced to 40 months in prison – and in 2011 in Riverside County Superior Court.
The case against O’Neill was investigated by the Riverside Police Department and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
Former Owner and Operator of Long Beach Medical Equipment Supply Company Sentenced for Their Roles in $1.5 Million Medicare Fraud SchemeRead the Press Release
LOS ANGELES – The former owner and the former operator of a durable medical equipment supply company based in Long Beach have been sentenced for their roles in a $1.5 million Medicare fraud scheme.
Amalya Cherniavsky, 41, and her husband, Vladislav Tcherniavsky, 46, both of Long Beach, were ordered to pay $614,418 in restitution at a hearing yesterday afternoon before United States District Judge Terry J. Hatter Jr.
Judge Hatter ordered Tcherniavsky to serve 51 months in prison at yesterday’s hearing, while Cherniavshy was placed on probation.
On October 15, 2015, a federal jury convicted both defendants of one count of conspiracy to commit health care fraud and five counts of health care fraud.
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, Special Agent in Charge Chris Schrank of the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG) Los Angeles Region, Assistant Director in Charge David Bowdich of the FBI’s Los Angeles Division and Special Agent in Charge Joseph Fendrick of the California Department of Justice’s Bureau of Medi-Cal Fraud and Elder Abuse made the announcement.
The evidence at trial demonstrated that Cherniavsky owned JC Medical Supply, a purported durable medical equipment supply company that she co-operated with Tcherniavsky. Evidence further showed that the defendants paid illegal kickbacks to patient recruiters in exchange for patient referrals and paid kickbacks to physicians for fraudulent prescriptions – primarily for expensive, medically unnecessary power wheelchairs – which the defendants then used to support fraudulent bills to Medicare.
Between 2006 and 2013, the defendants submitted $1,520,727 in claims to Medicare and received $783,756 in reimbursement for those claims, according to evidence presented at trial.
“The sole purpose of JC Medical Supply was to obtain fraudulent prescriptions and submit bills to Medicare for unneeded but expensive durable medical equipment,” said United States Attorney Eileen M. Decker. “The defendants attempted to hide their activity from Medicare by seeking reimbursement for a variety of equipment. Prosecutors saw through that deception, resulting in today’s sentences and restitution orders.”
The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Central District of California. HHS-OIG’s Los Angeles Regional Office, the FBI and the California Department of Justice’s Bureau of Medi-Cal Fraud and Elder Abuse investigated the case. Attorneys Blanca Quintero and Kevin R. Gingras of the Criminal Division’s Fraud Section prosecuted the case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 2,300 defendants who have collectively billed the Medicare program for more than $7 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to Health Care Fraud Unit.
Former Owner and Operator of Long Beach Medical Equipment Supply Company Sentenced for Their Roles in $1.5 Million Medicare Fraud SchemeRead the Press Release
LOS ANGELES – The former owner and the former operator of a durable medical equipment supply company based in Long Beach have been sentenced for their roles in a $1.5 million Medicare fraud scheme.
Amalya Cherniavsky, 41, and her husband, Vladislav Tcherniavsky, 46, both of Long Beach, were ordered to pay $614,418 in restitution at a hearing yesterday afternoon before United States District Judge Terry J. Hatter Jr.
Judge Hatter ordered Tcherniavsky to serve 51 months in prison at yesterday’s hearing, while Cherniavshy was placed on probation.
On October 15, 2015, a federal jury convicted both defendants of one count of conspiracy to commit health care fraud and five counts of health care fraud.
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, Special Agent in Charge Chris Schrank of the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG) Los Angeles Region, Assistant Director in Charge David Bowdich of the FBI’s Los Angeles Division and Special Agent in Charge Joseph Fendrick of the California Department of Justice’s Bureau of Medi-Cal Fraud and Elder Abuse made the announcement.
The evidence at trial demonstrated that Cherniavsky owned JC Medical Supply, a purported durable medical equipment supply company that she co-operated with Tcherniavsky. Evidence further showed that the defendants paid illegal kickbacks to patient recruiters in exchange for patient referrals and paid kickbacks to physicians for fraudulent prescriptions – primarily for expensive, medically unnecessary power wheelchairs – which the defendants then used to support fraudulent bills to Medicare.
Between 2006 and 2013, the defendants submitted $1,520,727 in claims to Medicare and received $783,756 in reimbursement for those claims, according to evidence presented at trial.
“The sole purpose of JC Medical Supply was to obtain fraudulent prescriptions and submit bills to Medicare for unneeded but expensive durable medical equipment,” said United States Attorney Eileen M. Decker. “The defendants attempted to hide their activity from Medicare by seeking reimbursement for a variety of equipment. Prosecutors saw through that deception, resulting in today’s sentences and restitution orders.”
The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Central District of California. HHS-OIG’s Los Angeles Regional Office, the FBI and the California Department of Justice’s Bureau of Medi-Cal Fraud and Elder Abuse investigated the case. Attorneys Blanca Quintero and Kevin R. Gingras of the Criminal Division’s Fraud Section prosecuted the case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 2,300 defendants who have collectively billed the Medicare program for more than $7 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to Health Care Fraud Unit.
Canadian Man Sentenced to Nearly Four Years in U.S. Prison for Mass Marketing Schemes Targeting U.S. CitizensRead the Press Release
LOS ANGELES – A Canadian man has been sentenced to nearly four years in prison on a federal fraud charge for targeting American victims in several schemes, including a fake lottery scam, one involving “secret shopper” pitch letters, and another involving bogus credit repair services.
Peter Omagbemi, 45, of Montreal, was sentenced yesterday to 47 months in prison by United States District Judge George H. Wu. In addition to the federal prison term, Judge Wu ordered Omagbemi to pay just over $1 million in restitution.
“The border between the United States and Canada did not protect Mr. Omagbemi from prosecution,” said United States Attorney Eileen M. Decker. “My office will pursue foreign nationals who seek to profit by defrauding people in the United States. In this case, Mr. Omagbemi’s fraud was particularly harmful as it caused the arrest of one of his victims.”
Omagbemi operated a MoneyGram outlet in Montreal and engaged in a mass marketing fraud scheme by targeting victims – primarily in the United States – and fraudulently claiming that the victims had won a lottery or sweepstakes. In some cases, Omagbemi claimed the victim had been offered a job as a mystery shopper, or that he could repair the victim’s credit.
In the lottery scheme, Omagbemi claimed that the victim had won a lottery or sweepstakes, but, in order to claim the funds, the victim needed to send money through MoneyGram to pay for taxes, fees and other purported expenses. In the mystery shopper scheme, Omagbemi falsely told the victim that they had been selected as a mystery shopper, which he followed up with by sending the victim a counterfeit check to deposit and directing them to send some of the money to MoneyGram. Finally, in the credit repair scheme, the defendant would claim that he could repair the victim’s credit in exchange for a fee. All of these claims were false.
Omagbemi’s schemes caused 294 victims to send him money. After the victims deposited the counterfeit checks and sent money to Omagbemi, the banks would reverse payment and would debit the amount against the victim’s own bank funds. Some victims fell behind on their bills, and, in one case, a victim was arrested for passing a fraudulent check.
The case against Omagbemi was investigated by the Federal Bureau of Investigation and the United States Postal Inspection Service. The case originated from an investigation by the Royal Canadian Mounted Police.
Long Beach Youth Soccer Coach Indicted on Federal Charges of Possessing and Distributing Child PornographyRead the Press Release
SANTA ANA, California – An Orange County man who coached a Long Beach youth soccer team has been arraigned on a six-count federal indictment that accuses him of possessing and distributing child pornography.
Robert “Bob” Warden Phillips, 65, of Lake Forest, made his initial appearance in federal court Monday and pleaded not guilty to the charges. He was released on a $50,000 bond pending trial, which is slated to begin March 22.
In the fall of 2014, Phillips served as a volunteer for the American Youth Soccer Organization (AYSO), coaching 12- to 14-year-old girls.
The charges against Phillips are the result of a probe by the multiagency Orange County Child Exploitation Task Force, which is overseen by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
“Fighting the exploitation of children is one of the top priorities of my office,” said United States Attorney Eileen M. Decker. “In the case of child pornography, victimization takes place when an image is generated and every time it is distributed. We have and will continue to prosecute vigorously individuals who endanger children by creating a market for their victimization.”
The Task Force began investigating Phillips after receiving multiple tips from the National Center for Missing and Exploited Children (NCMEC) about sexually explicit images of minors associated with an email address that traced back to the defendant. In June 2015, Task Force investigators executed a search warrant issued by a state court judge at Phillips’ Lake Forest home, at which time they seized three computers, an iPad, an iPhone, and several media devices. The indictment alleges two of the computers and a thumb drive were found to contain images of child pornography.
According to the affidavit filed in support of the search warrant, HSI obtained records of online instant message chats in which the defendant fantasized about young female soccer players and discussed grooming and molesting girls as young as 14.
“This case is particularly disturbing given the defendant’s former position as a coach and his close contact with children,” said Joseph Macias, special agent in charge for HSI Los Angeles. “HSI will continue to work closely with its partners on the Task Force to investigate those who sexually exploit young people and ensure that those found guilty of such offenses feel the full weight of the law.”
HSI special agents alerted AYSO’s national office about the allegations and AYSO cooperated fully with the investigation. As soon as AYSO learned of the allegations, the defendant was made ineligible for further service pending the outcome of the case.
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.
Phillips is charged with three counts of distribution of child pornography and three counts of possession of child pornography. If he was convicted of the six felony offenses, he would face a statutory maximum sentence of 90 years in federal prison. Each count of distribution of child pornography carries a mandatory minimum sentence of five years in federal prison.
At this time, authorities do not have any evidence that Phillips molested any of his players; however, investigators have reason to believe there may be unidentified victims in the case. Task Force investigators are asking anyone who may have information relevant to the investigation to contact HSI’s 24-hour toll free tip line at 1-866-DHS-2ICE (1-866-347-2423) or use the agency’s online tip form. Information may be provided anonymously.
The Orange County Child Exploitation Task Force – which also included investigators from the Orange County Sheriff’s Department, the Federal Bureau of Investigation, the Newport Beach Police Department, and the U.S. Postal Inspection Service – investigates Internet-related crimes against children, as well as crimes involving the possession, production and distribution of child pornography.
Former Owner and Operator of California Medical Equipment Supply Company Sentenced for Their Roles in $1.5 Million Medicare Fraud SchemeRead the Press Release
The former owner and the former operator of a durable medical equipment supply company based in Long Beach, California, were sentenced today for their roles in a $1.5 million Medicare fraud scheme.
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, Special Agent in Charge Chris Schrank of the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG) Los Angeles Region, Assistant Director in Charge David Bowdich of the FBI’s Los Angeles Division and Special Agent in Charge Joseph Fendrick of the California Department of Justice’s Bureau of Medi-Cal Fraud and Elder Abuse made the announcement.
Amalya Cherniavsky, 41, and her husband, Vladislav Tcherniavsky, 46, both of Long Beach, were ordered to pay $614,418 in restitution. U.S. District Judge Terry J. Hatter Jr. of the Central District of California ordered Tcherniavsky to serve 51 months in prison. On Oct. 15, 2015, a federal jury convicted both defendants of one count of conspiracy to commit health care fraud and five counts of health care fraud.
The evidence at trial demonstrated that Cherniavsky owned JC Medical Supply, a purported durable medical equipment supply company that she co-operated with Tcherniavsky. Evidence further showed that the defendants paid illegal kickbacks to patient recruiters in exchange for patient referrals and paid kickbacks to physicians for fraudulent prescriptions—primarily for expensive, medically unnecessary power wheelchairs—which the defendants then used to support fraudulent bills to Medicare.
Between 2006 and 2013, the defendants submitted $1,520,727 in claims to Medicare and received $783,756 in reimbursement for those claims, according to evidence presented at trial.
The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Central District of California. HHS-OIG’s Los Angeles Regional Office, the FBI and the California Department of Justice’s Bureau of Medi-Cal Fraud and Elder Abuse investigated the case. Attorneys Blanca Quintero and Kevin R. Gingras of the Criminal Division’s Fraud Section prosecuted the case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 2,300 defendants who have collectively billed the Medicare program for more than $7 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
10 Charged in Relation to $15 Million Scheme to Defraud Medicare by Billing for Physical Therapy Services Never ProvidedRead the Press Release
LOS ANGELES – Federal authorities this morning arrested three defendants who are charged in relation to a scheme that fraudulently sought approximately $15 million from Medicare for physical therapy services that were never provided to “patients.”
The three men arrested today are among 10 defendants who have been charged in recent months for their roles in the scheme that led Medicare to pay approximately $7.8 million after receiving fraudulent bills.
The scheme revolved around clinics called Rehab Dynamics, RSG Rehab and Innovation Physical Therapy that operated at various locations in Los Angeles and Orange counties. These clinics were owned and operated by two men – Joseff Sales, 39, of Buena Park, a licensed physical therapist, and Daniel Goyena, 38, of Buena Park, a licensed physical therapist assistant – who were indicted in October.
Sales pleaded guilty on January 25, and Goyena pleaded guilty on December 17. Both men pleaded guilty to health care fraud and paying illegal kickbacks before United States District Judge Dean D. Pregerson, who is scheduled to sentence the defendants later this year.
A third man indicted in October – David Y. Kim, 53, of the Arlington Heights district of Los Angeles, a licensed chiropractor and former owner/operator of New Hope Clinic – is a fugitive who is currently being sought by federal authorities. Kim is charged with four counts of health care fraud, five counts of receiving illegal kickbacks and two counts of aggravated identity theft.
Today’s announcement is the result of this morning’s arrests of three defendants related to the scheme who were indicted over the past two weeks. The men taken into custody today are:
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Byong Chun “David” Min, 67, of Irvine, co-owner/operator of Glory Rehab Team, which operated as Dream Hospital in Orange County;
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Jason S. Min, 34, of Irvine, David Min’s son, who was the other owner/operator of Glory Rehab; and
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Simon Hong (who is also known as Seong Wook Hong), 54, of Brea, who was the owner of several clinics in Walnut, Torrance and other Southland locations that operated under companies called Hong’s Medical Management, CMH Practice Solution, and HK Practice and Solution.
The Mins and Hong are expected to be in United States District Court this afternoon to be arraigned in their respective cases.
“Health care fraud affects all Americans by driving up medical costs and, in the case of Medicare fraud, stealing money from taxpayers,” said United States Attorney Eileen M. Decker. “Medicare is regularly targeted by fraud, but the Department of Justice is diligently investigating and prosecuting those responsible for defrauding this important public health care program.”
The indictment against the Mins alleges that over a two-year period they provided Medicare beneficiary information to Rehab Dynamics and RSG Rehab. The Medicare beneficiary information was used to submit fraudulent bills to Medicare for services supposedly provided at Glory Rehab – services that were never provided. Rehab Dynamics and RSG Rehab allegedly received nearly $600,000 as a result of these fraudulent claims to Medicare, and approximately $323,380 was paid in kickbacks to the Mins. The indictment charges the Mins with six counts of health care fraud, six counts of receiving illegal kickbacks and two counts of aggravated identity theft.
The case against Hong alleges that Medicare beneficiaries who came to his clinics sometimes received massages, acupuncture or therapy treatment plans, but they did not receive any services that are reimbursable under Medicare rules. Nevertheless, according to the indictment, from the spring of 2009 until November 2013, bills were submitted to Medicare that claimed the “patients” had received physical therapy treatment from Rehab Dynamics and RSG Rehab, which led Medicare to pay nearly $3 million. The indictment alleges that Hong received $1,640,674 as a result of the fraudulent scheme. Hong is charged with eight counts of health care fraud, nine counts of receiving illegal kickbacks and two counts of aggravated identity theft.
Taxpayers are the ultimate victims and pay the price when superficial claims for treatment are paid to scam artists,” said David Bowdich, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The FBI and our partners rely on the public and the medical community to report fraudulent schemes so that we can hold accountable those who steal funds appropriated for legitimate medical conditions.”
According to court documents, the scheme involving Rehab Dynamics and RSG Rehab ran from early 2008 until early 2014. In some cases, Medicare beneficiaries who went to Rehab Dynamics, RSG Rehab and the other companies involved in the scheme received massages or acupuncture – services that were not covered by Medicare – from practitioners who were not licensed to perform physical therapy. In exchange for patient referrals, the principals in Rehab Dynamics and RSG Rehab paid kickbacks that were about 55 percent of the reimbursement they received from Medicare.
“The OIG and our law enforcement partners will continue to aggressively pursue both licensed providers, such as physical therapists, and the management companies who operate such clinics that steal from the Medicare system,” said Christian J. Schrank, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General.
Previously in this investigation, four other defendants pleaded guilty and are pending sentencing. They are:
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Marlon Songco, 39, of Sylmar, the president of Rehab Dynamics, pleaded guilty in June to conspiracy;
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Eddieson Legaspi, 39, of Lomita, an employee of Rehab Dynamics, pleaded guilty in August to conspiracy to commit health care fraud;
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Ohun Kwon, 49, of Fullerton, the owner/operator of E.K. Medical Management, which referred patients to Rehab Dynamics, pleaded guilty in August to conspiracy to commit health care fraud; and
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Leovigildo Sayat, 39, of Torrance, an employee of RSG Rehab, pleaded guilty in October to conspiracy to commit health care fraud.
The charge of conspiracy carries a statutory maximum sentence of five years in federal prison, conspiracy to commit health care and the substantive health care fraud counts carry a maximum sentence of 10 years in prison, the kickback counts carry a maximum sentence of five years in prison, and aggravated identity theft carries a mandatory two-year sentence.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
The investigation in the cases involving Rehab Dynamics was conducted by the Federal Bureau of Investigation and the U.S. Department of Health and Human Services – Office of Inspector General.
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During National Slavery and Human Trafficking Prevention Month, United States Attorney’s Office Works to Raise Awareness of the Cruel Practice that Exploits the Most Vulnerable Members of SocietyRead the Press Release
LOS ANGELES – United States Attorney Eileen M. Decker marked January as National Slavery and Human Trafficking Prevention Month by renewing the commitment of the United States Attorney’s Office to combat all forms of human trafficking and to engage all of our diverse communities to raise awareness about the inhumane practice.
“Those who engage in any form of human trafficking are exploiting the most vulnerable among us by inducing or forcing their victims to engage in commercial sex or by subjecting them to forced labor,” United States Attorney Decker said.
Human trafficking takes many forms, but generally targets the most vulnerable in our society – our children, those who suffered past abuse, people with physical or mental disabilities, the poor and those without legal immigration status.
The United States Attorney’s Office and its federal, state, local, and tribal partners are working diligently to identify and support victims – and to bring their abusers to justice. Authorities are working to bring freedom to all victims of human trafficking – whether they are adults or children; male, female, or transgender individuals; citizens or noncitizens – regardless of the trafficking they endured.
Anti-trafficking efforts have been bolstered with the recent establishment of the multi-agency Los Angeles Human Trafficking Task Force, which is being jointly led by the United States Attorney’s Office and the Los Angeles County Sheriff’s Department. The Task Force was established in September 2015 as the result of $1.5 million grant from the Department of Justice (see: http://go.usa.gov/cPbAe). This partnership will enhance coordination and collaboration between agencies and will expand the capacity to provide comprehensive services to victims.
The United States Attorney’s Office is committed to prosecuting individuals who prey upon trafficking victims. Among the criminal cases recently in federal court:
• a Long Beach man received a 20-year federal prison sentence last year for running a sex trafficking operation that victimized young women (see: http://go.usa.gov/cPjuR);
• A former special agent with U.S. Immigration and Customs Enforcement’s Homeland Security Investigations pleaded guilty in December to accepting a bribe from a man being investigated for human trafficking (see: http://go.usa.gov/cExGF);
• a mother and son team pleaded guilty to sex trafficking charges last year and admitted to trafficking in minors and young women in California and Nevada (see: http://go.usa.gov/cEabe);
• a South Bay man was sentenced to nearly five years in prison for lying to federal investigators about hiring a minor for commercial sex in the first federal prosecution in the Los Angeles-area of a “john” in a teen human trafficking investigation (see: http://go.usa.gov/cEavJ); and
• a trial began this week in the case of a man charged with travelling to Cambodia to have sex with children.
For more information on human trafficking and victim services, including a recently released video series and resource guide to raise awareness about the many forms of human trafficking in the United States, please visit the website of the Department of Justice’s Office for Victims of Crime website – http://ovc.ncjrs.gov/humantrafficking/. Materials are available in Spanish, Thai, Hindi and Tagalog.
President Obama issued a proclamation on New Year’s Eve that designated January as National Slavery and Human Trafficking Prevention Month (see: http://go.usa.gov/cPjJm). The President called upon all Americans to play a role to end all forms of human trafficking, and he pledged that the United States will continue to lead the effort to root out human trafficking around the world.
To report suspected human trafficking, connect with anti-trafficking services in your area or find anti-trafficking resources, contact the National Human Trafficking Resource Center hotline at 1-888-373-7888, [email protected], or www.traffickingresourcecenter.org. The toll-free hotline is available to answer calls from anywhere in the United States, 24 hours a day/7 days a week, in more than 200 languages.
Former Manager at HBO Agrees to Plead Guilty to Federal Fraud and Tax Charges in Scheme that Stole about $1 Million from CompanyRead the Press Release
LOS ANGELES – A San Fernando Valley woman was charged today with three federal offenses in relation to a scheme in which she submitted fraudulent bills and illegally took approximately $1 million from HBO, where she worked as manager in the Talent Relations Department.
In court documents filed today, Jennifer Choi, 38, of Valley Village, agreed to plead guilty to two counts of wire fraud and one count of tax evasion.
Choi, who worked at HBO for nearly 10 years, where she was responsible for scheduling services – such as hairstyling, wardrobe and make-up – for actors associated with HBO. Choi set up a company called Shine Glossy, LLP, which she used to submit bogus invoices to HBO for style and make-up services supposedly provided to actors. But, according to court documents, the services were never actually provided, and HBO funds instead went directly into a bank account she had established. Through Shine Glossy, Choi submitted nearly 300 fraudulent invoices that led HBO to pay approximately $940,000.
“Ms. Choi has admitted to bilking her employer out of nearly a million dollars through a fraud scheme that used a fake company that provided no services,” said United States Attorney Eileen M. Decker. “This long-term scheme violated both her duty to her employer as well as federal law, and Ms. Choi now faces serious consequences beyond losing her job.”
Choi also admitted in a plea agreement filed today that she used a car service for herself, her family and her friends and provided HBO’s account information, which led the car service to bill HBO for the unauthorized rides. In this part of the scheme, Choi fraudulently obtained approximately $63,000 in car services that were paid for by HBO.
Choi was terminated by HBO in September 2014.
“The defendant stole $1 million from her employer by concocting a scheme to conceal her misdeeds – enriching herself by choosing greed over good judgment,” said David Bowdich, the Assistant Director in Charge of the FBI's Los Angeles Field Office. “The FBI will continue to work with our partners to ensure that those who engage in this kind of financial fraud are held accountable.”
In her plea agreement, Choi also admitted that she failed to file federal income tax returns for several years, even though she earned hundreds of thousands of dollars in the years 2011, 2013 and 2014. She also admitted significantly under-reported her income when she did file tax returns for the years 2010 and 2012.
“Spanning more than six years, Ms. Choi stole funds from her employer by creating phony invoices for services which were never provided,” stated Erick Martinez, Special Agent in Charge of IRS - Criminal Investigation. “Our office will vigorously investigate individuals who line their pockets with fraudulently obtained funds and then file fraudulent tax returns.”
Choi is expected to make her first court appearance in this case on February 19.
The three charges alleged in this case carry a statutory maximum penalty of 45 years, although the parties in this case believe that her actual sentence will be significantly less than that. The actual sentence to be imposed after she pleads guilty will be determined solely by the judge presiding over the case.
The investigation into Choi was conducted by the Federal Bureau of Investigation and IRS – Criminal Investigation.
Mother and Son Named in Federal Grand Jury Indictments that Allege Smuggling of Ammunition and Firearm Parts to PhilippinesRead the Press Release
LOS ANGELES – A Long Beach woman and her son have been named in federal grand jury indictments that charge them with illegally shipping hundreds of thousands of dollars’ worth of firearms parts and ammunition to their native Philippines – munitions that were concealed in shipments they falsely claimed to be household goods.
Marlou Mendoza, 60, and Mark Louie Mendoza, 30, are named in separate indictments that were returned by a federal grand jury on December 10.
Marlou Mendoza was arrested last week at Los Angeles International Airport as she returned from a trip to the Philippines. The case against Marlou Mendoza, which charges her with illegally shipping ammunition, was unsealed after she was taken into custody on January 20 by special agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
Meanwhile, Mark Mendoza, who is a citizen of the Philippines, remains at large and is believed to be in the Philippines. The United States Attorney’s Office today learned that a federal judge has unsealed the case against Mark Medoza, who is named in an eight-count indictment that charges him with conspiracy, the unlawful export of munitions, smuggling and money laundering.
Mark Mendoza, who was the president of a “tools and equipments” company known as Last Resort Armaments, ordered more than $100,000 worth of ammunition and firearms accessories, much of which was delivered to his parent’s Long Beach residence over a six-month period in 2011. The items that Mark Mendoza ordered included parts for M-16 and AR-15-type rifles, and these parts are listed as defense articles on the United States Munitions List. Pursuant to the Arms Export Control Act, items on the Munitions List may not be shipped to the Philippines without an export license issued by the Department of State.
The money laundering charge against Mark Mendoza alleges that during the first six months of 2011, Mark Mendoza transferred more than $650,000 in proceeds generated by the illegal ammunition exports from an account in the Philippines to a money remitter in Los Angeles.
Marlou Mendoza is named in a three-count indictment that accuses her of failing to provide the required written notice to freight forwarders that she was shipping ammunition. The indictment cites three instances in 2011 when Marlou Mendoza allegedly shipped tens of thousands of rounds of .22-caliber ammunition and bullets.
“The Arms Export Control Act is designed to keep weapons out of the hands of people who may act against the interests of the United States,” said United States Attorney Eileen M. Decker. “The weapons shipments charged in the indictments allowed firearm parts and ammunition to leave the United States and travel to the Philippines, where they could have been sold to anyone. Controlling the trafficking of weapons abroad is critical to protecting American interests abroad.”
The charges against the Mendozas are the product of a joint probe by HSI and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) that began in 2011 after U.S. Customs and Border Protection (CBP) officers uncovered a cache of ammunition and firearms parts in an outbound crate being shipped by Marlou Mendoza that had falsely been declared to be household effects. In July 2011, CBP and the Philippine Bureau of Customs (BOC) intercepted and seized three separate shipments from Last Resort Armaments containing approximately 180,000 rounds of .22-caliber ammunition, and more than three dozen receivers for AR-15 and M-16 assault rifles. In November 2012, specials agents with HSI and ATF special agents executed a search warrant at a location associated with Last Resort Armaments, seizing more than 120,000 rounds of .22-caliber ammunition, along with AR-15 trigger assemblies, magazines, sights and rifle barrels.
“The ammunition and accessories seized in this case represent quite an arsenal. Once these goods reached the Philippines, we can’t be certain where they wound up – whether it’s in the hands of hobbyists or those with more menacing intentions,” said Joseph Macias, Special Agent in Charge for HSI Los Angeles. “That’s why such exports are closely regulated, to help prevent sensitive items from falling into the hands of those who might seek to harm America or its interests.”
ATF Los Angeles Special Agent in Charge Eric D. Harden said, “ATF is making clear that it if you are engaged in the business of selling firearms or dealing in munitions, you must comply with industry standards and regulations, no matter where you conduct your business – from a store, at gun shows, or over the Internet.”
Anne Maricich, Acting Director of Field Operations for CBP in Los Angeles, commented: “CBP’s LA/LB Seaport Outbound Team’s expertise in reviewing manifests and determining which shipments to physically inspect are noteworthy. One pattern they encounter is a significant number of illegal firearms, firearms parts and ammunition manifested as ‘household goods and personal effects’ destined for the Philippines. In this case, they flagged such a shipment and seized a substantial quantity of rounds, bullets, weapon parts and accessories in it – which all allegedly lacked required licenses or exemptions in violation of International Traffic in Arms and Export Administration Regulations. It’s rewarding when our partnerships with HSI and ATF advance from intercepting to halting illegal schemes that could jeopardize the public’s safety.”
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.
Marlou Mendoza was arraigned in federal court on January 20 and was ordered released on a $10,000 bond pending trial, which is scheduled for March 1 before United States District Judge George H. Wu. If convicted of all three counts contained in the indictment, she faces a statutory maximum penalty of 15 years in federal prison.
Mark Mendoza is charged with conspiracy, three counts of unlawful export of munitions, three counts of export smuggling and one count of money laundering. If he was convicted of all counts in the indictment, Mark Mendoza would face a statutory maximum sentence of 115 years in federal prison.
Inland Empire Man Who Threatened to Kill U.S. Forest Service Officer Investigating Trash Dumping Sentenced to 18 Months in PrisonRead the Press Release
LOS ANGELES – A man who repeatedly threatened to kill a United States Forest Service Law Enforcement Officer who contacted the man in relation to an investigation into trash dumped in the San Bernardino National Forest was sentenced today 18 months in federal prison.
Richard Latka, 57, of Hemet, was sentenced this morning by United States District Judge Dale S. Fischer.
Latka was found guilty by a federal jury in October of threatening to assault and murder the federal officer. According to the evidence presented at the trial, the Forest Service Officer went to a residence on Persimmons Lane in Hemet in October 2014 to investigate a large amount of trash that had recently been dumped in the nearby national forest. The officer encountered Latka in the front yard of the residence, and Latka reacted angrily when the officer said he wished to speak to the owner of the home. Latka then ran toward the officer with clenched fists. Believing that Latka intended to hit him, the officer drew his Taser and ordered Latka to stop. Latka stopped running but continued screaming at the officer. The officer tried to diffuse the situation by retreating to his car, but Latka followed the officer, continued to scream at him, and then pounded with both fists on the driver’s side window of the officer’s marked law enforcement vehicle. The officer drove away, but Latka pursued the officer in his own car, screaming that he was going to kill the officer. At one, Latka pulled up beside the officer and yelled, “Next time you’re dead!” Witnesses reported that Latka later returned to the home and screamed to them that he was going to kill the officer.
“This federal law enforcement officer faced serious threats of assault and murder. The officer did everything he could to de-escalate the situation,” said United States Attorney Eileen M. Decker. “Instead of de-escalating, Mr. Latka made repeated threats to harm the officer, who was acting both lawfully and prudently. As a result of his dangerous conduct, his unwillingness to comply with law enforcement, and his failure to accept responsibility for his crime, Mr. Latka has earned this prison term.”
The case against Latka was the product of an investigation by the United States Forest Service.
Normandie Casino Operator Agrees to Plead Guilty to Federal Felony Charges of Violating Anti-Money Laundering StatutesRead the Press Release
LOS ANGELES – The operator of the Normandie Casino in Gardena agreed in court papers filed this morning to plead guilty to charges that it violated anti-money laundering provisions of the Bank Secrecy Act. As part of an agreement with federal prosecutors, the casino agreed to pay nearly $2.4 million for failing to report large cash transactions to federal authorities.
In a plea agreement filed this morning in United States District Court, the Normandie Club, the partnership operating the Normandie Casino, agreed to plead guilty to two felony offenses – 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.
Under federal law – specifically, the Bank Secrecy Act – casinos like the Normandie 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.
“The United States has an array of anti-money laundering statutes designed to prevent criminals from using the American financial system to launder the large sums of cash generated by illegal activity such as organized crime, drug trafficking and human trafficking,” said United States Attorney Eileen M. Decker. “Casinos that fail to follow these rules are particularly vulnerable to criminals who seek to disguise illegal cash as gambling winnings.”
In the plea agreement, the Normandie 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 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.
Under the plea agreement, prosecutors and the Normandie agree that the casino should pay the maximum fine of $500,000 for each of the two counts, which would result in a total fine of $1 million. Additionally, the casino agreed to forfeit to the government $1,383,530, which it admitted receiving in 2013 while failing to file Currency Transactions Reports.
The Normandie also agreed to cooperate in ongoing criminal investigations, and to create, implement, and maintain an effective anti-money laundering program.
The Normandie Club is being arraigned on this case this afternoon. The formal entry of the guilty pleas will take place at a later date.
The investigation into the Normandie was conducted by IRS – Criminal Investigation and the California Department of Justice’s Bureau of Gambling Control.
Vallejo Man Sentenced to More Than 12 Years in Prison for Multiyear, Multistate Bank Fraud and Identity Theft SchemeRead the Press Release
SACRAMENTO, Calif. — Deshawn A. Ray, 43, of Vallejo, was sentenced today by Chief United States District Judge Morrison C. England Jr. to 12 years and one month in prison for conspiracy to commit bank fraud, bank fraud, and aggravated identity theft, United States Attorney Benjamin B. Wagner announced.
According to evidence presented at trial, from March 2008 until July 2010, Ray and co-conspirator Reginald L. Thomas conducted a multistate “account takeover” scheme that identified high-value accounts at several banks. Members of the conspiracy used the personal information of high-value account holders to open joint accounts in the names of the high-value account holders and co-conspirators. The defendants also changed the contact information so that the account holders would not receive notice of account activity. The defendants then transferred funds from the high-value accounts to the joint accounts and then to individual accounts held by members of the conspiracy. Members of the conspiracy—many of whom Ray recruited and supervised—withdrew the proceeds of the fraudulent transfers in cash, cashiers’ checks or wire transfers before the transfers were noticed by the banks and reversed.
This case was the product of an investigation by the United States Secret Service, the Pinellas County (Florida) Sheriff’s Office, and the Walnut Creek (California) Police Department. Assistant United States Attorneys Matthew G. Morris and Brian A. Fogerty prosecuted the case.
Co-defendant Reginald L. Thomas, 40, of Richmond, pleaded guilty to conspiracy to commit bank fraud and aggravated identity theft and was sentenced to serve three years and nine months in prison. Co-defendant Damion Edgerson, 40, of Oakland, pleaded guilty to bank fraud and was sentenced to serve 18 months in prison. Co-defendant Tiffany Tung, 27, of Oakland, pleaded guilty to accepting a bribe as a bank employee. Tung was sentenced to a two-year term of probation.
Riverside Woman Convicted of Stealing the Identities of Residents of Medical Facility in Long BeachRead the Press Release
LOS ANGELES – A Riverside woman has been convicted on federal identity theft charges for possessing the identities of more than 50 patients of a residential medical facility in Long Beach formerly known as the Hillcrest Care Center.
Bridgette Jackson, 45, was convicted by a jury yesterday afternoon in United States District Court of conspiring to possess more than 15 identities, possessing more than 15 identities, and aggravated identity theft.
Jackson’s aunt, who testified against her at the trial, was an employee at the Hillcrest Care Center and had access to all of the patient files. According to the testimony at trial, Jackson approached her aunt and asked for personal identifying information of patients. Jackson’s aunt copied or wrote down personal identifying information and provided it to Jackson on three separate occasions. Jackson then used that information to help others file false tax returns in the names of the patients and keep the refunds for themselves. When law enforcement executed a search warrant on Jackson’s residence, officers seized approximately 56 Hillcrest medical records, along with almost 70 other identity profiles, which included names, social security numbers, and dates of birth of individuals other than Jackson. Law enforcement also seized over 50 prepaid debit cards in names of people other than Jackson.
“This identity theft scheme targeted vulnerable victims,” said United States Attorney Eileen M. Decker. “The victims included elderly patients at a convalescent home and a 28-year-old woman with a traumatic brain injury who has lived in a 24-hour nursing facility since she was 16.”
After Jackson’s conviction yesterday, United States District Judge Manuel L. Real scheduled a sentencing hearing for March 7. At that time, Jackson will face a mandatory minimum sentence of two years in federal prison and a statutory maximum sentence of 17 years.
In an unrelated case, Jackson pled guilty last year to conspiring to commit credit card fraud in the United States District Court in Riverside and faces up to five years when she is sentenced in that case on March 28.
The Los Angeles case was investigated by the United States Secret Service, and the Riverside case was investigated by the United States Postal Inspection Service.
Former Pilot for Alaska Airlines Arrested on Federal Charges of Flying Passenger Aircraft while under the Influence of AlcoholRead the Press Release
LOS ANGELES – Federal authorities have arrested a former captain with Alaska Airlines on federal charges of piloting a plane with passengers while under the influence of alcohol.
David Hans Arntson, 60, a resident of Newport Beach, was arrested yesterday morning and was arraigned on the felony charge yesterday afternoon in federal court in Los Angeles.
Arntson was released on a $25,000 bond and was ordered to appear for an arraignment on February 10.
According to a criminal complaint filed Tuesday in United States District Court, Arntson was the pilot of two Alaska Airlines flights on June 20, 2014. The first flight was from San Diego International Airport to Portland, Oregon. He then flew a plane from Portland, Oregon, to John Wayne Airport in Orange County.
After landing at John Wayne Airport, Arntson was selected for random drug and alcohol testing by Alaska Airlines. A technician for Alaska Airlines performed two tests on Arntson and received results that the pilot had a blood alcohol concentration of 0.134 percent and 0.142 percent. After the technician informed Alaska Airlines of the test results, it removed Arntson from all safety-sensitive duties.
According to federal law, a person operating a “common carrier,” such as a commercial airliner, is presumed to be under the influence of alcohol when his or her blood alcohol content is 0.10 percent or higher.
Arntson’s co-pilot on the two flights on June 20 remembered seeing the drug tester when the plane landed at John Wayne Airport and recalled Arntson say “I bet it’s for me,” according to the complaint.
Following the June 20, 2014, incident, Arntson retired from Alaska Airlines.
“Those in command of passenger jets, or any other form of public transportation, have an obligation to serve the public in the safest and most responsible way possible,” said United States Attorney Eileen M. Decker. “We cannot and will not tolerate those who violate the trust of their passengers by endangering lives.”
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
The charge of operating a common carrier while under the influence of alcohol or drugs carries a statutory maximum penalty of 15 years in federal prison.
The investigation into Arntson was conducted by the United States Department of Transportation, Office of Inspector General.
Glendale Men Charged with Bank Fraud Conspiracy Related to Trademark ScamRead the Press Release
WASHINGTON – Two Glendale residents have been charged in a superseding indictment in connection with a bank fraud scheme involving the proceeds of a mass mailing scam targeting holders of U.S. trademarks.
Artashes Darbinyan, 36, and Orbel Hakobyan, 41, were charged in a superseding indictment that was unsealed today in Los Angeles. The superseding indictment charges both defendants with one count of conspiracy to commit bank fraud. Darbinyan was also charged with four counts of mail fraud, three counts of aggravated identity theft, two counts of concealment money laundering and one count of bank fraud for a separate scheme. Hakobyan was also charged with one count of bank fraud.
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; Inspector in Charge Robert Wemyss of the U.S. Postal Inspection Service (USPIS), Los Angeles Division; Inspector in Charge David G. Bowers of the USPIS, Washington, D.C. Division; and Special Agent in Charge Erick Martinez of the IRS-Criminal Investigation, Los Angeles Field Office made the announcement.
“These defendants are charged with taking money from victims for services they never intended to render,” said United States Attorney Eileen M. Decker. “Although they used technology in an attempt to further and to conceal their crimes, they will now face prosecution.”
According to the superseding indictment, Darbinyan operated and controlled Trademark Compliance Center (TCC) and Trademark Compliance Office (TCO), which purported to offer trademark registration and monitoring services. The superseding indictment alleges that, through TCC and TCO, Darbinyan sent mass solicitations offering, for a fee, trademark registration and monitoring services to holders of trademarks recently registered with the U.S. Patent and Trademark Office, services which Darbinyan did not intend to, and did not, provide. To accomplish this scheme, Darbinyan used the names of other persons to open accounts for TCC and TCO at “virtual office centers” (i.e., businesses that offered call answering and mail forwarding services) in the Washington, D.C., and Los Angeles areas, and directed employees of the Washington, D.C.-area virtual office centers to forward mail addressed to TCC and TCO – envelopes containing payments from trademark holders – to the virtual office centers in the Los Angeles area, the superseding indictment alleges.
The superseding indictment alleges that from September 2013 through September 2015, the defendants perpetrated a bank fraud scheme by passing the mass mailing scam’s proceeds through fake bank accounts, primarily at a Wells Fargo branch in Glendale. According to allegations in the superseding indictment, Darbinyan opened bank accounts using false identities; Hakobyan and Darbinyan deposited the trademark holders’ payments into the Wells Fargo bank accounts and, with the assistance of Wells Fargo bank employees, transferred the funds to other accounts under Darbinyan’s control and either made cash withdrawals or purchased gold with cashier’s checks and wire transfers.
Hakobyan’s separate bank fraud charge arises from allegations that he made a fraudulent withdrawal while impersonating one of the supposed account holders.
“Using false identities, bogus business names, and virtual office centers, the defendants allegedly scammed trademark holders and turned the proceeds to cash and gold,” said Erick Martinez, Special Agent in Charge of the IRS-Criminal Investigation’s Los Angeles Field Office. “This joint investigation continues to demonstrate our efforts to ensure that our financial institutions will not be abused by those serving their own selfish greed at the expense of others.”
The charges and allegations in the superseding indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The USPIS and IRS-CI investigated the case. Trial Attorney William E. Johnston of the Criminal Division’s Fraud Section in Washington is prosecuting the case.
California Men Charged with Bank Fraud Conspiracy Related to Trademark ScamRead the Press Release
Two residents of Glendale, California, were charged in a superseding indictment in connection with a bank fraud scheme involving the proceeds of a mass mailing scam targeting holders of U.S. trademarks.
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, Inspector in Charge Robert Wemyss of the U.S. Postal Inspection Service (USPIS) Los Angeles Division, Inspector in Charge David G. Bowers of the USPIS Washington, D.C., Division and Special Agent in Charge Erick Martinez of the Internal Revenue Service-Criminal Investigation (IRS-CI) Los Angeles Field Office made the announcement.
Artashes Darbinyan, 36, and Orbel Hakobyan, 41, were charged in a superseding indictment that was unsealed today in the Central District of California with one count of conspiracy to commit bank fraud. Darbinyan was also charged with four counts of mail fraud, three counts of aggravated identity theft, two counts of concealment money laundering and one count of bank fraud for a separate scheme. Hakobyan was also charged with one count of bank fraud.
According to the superseding indictment, Darbinyan operated and controlled Trademark Compliance Center (TCC) and Trademark Compliance Office (TCO), which purported to offer trademark registration and monitoring services. The superseding indictment alleges that, through TCC and TCO, Darbinyan sent mass solicitations offering, for a fee, trademark registration and monitoring services to holders of trademarks recently registered with the U.S. Patent and Trademark Office, services which Darbinyan did not intend to, and did not, provide. To accomplish this scheme, Darbinyan used the names of other persons to open accounts for TCC and TCO at “virtual office centers” (i.e., businesses that offered call answering and mail forwarding services) in the Washington, D.C., and Los Angeles areas, and directed employees of the Washington, D.C.-area virtual office centers to forward mail addressed to TCC and TCO – envelopes containing payments from trademark holders – to the virtual office centers in the Los Angeles area, the superseding indictment alleges.
The superseding indictment alleges that from September 2013 through September 2015, the defendants perpetrated a bank fraud scheme by passing the mass mailing scam’s proceeds through fake bank accounts, primarily at a Wells Fargo branch in Glendale. According to allegations in the superseding indictment, Darbinyan opened bank accounts using false identities; Hakobyan and Darbinyan deposited the trademark holders’ payments into the Wells Fargo bank accounts and, with the assistance of Wells Fargo bank employees, transferred the funds to other accounts under Darbinyan’s control and either made cash withdrawals or purchased gold with cashier’s checks and wire transfers.
Hakobyan’s separate bank fraud charge arises from allegations that he made a fraudulent withdrawal while impersonating one of the supposed account holders.
The charges and allegations in the superseding indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The USPIS and IRS-CI investigated the case. Trial Attorney William E. Johnston of the Criminal Division’s Fraud Section is prosecuting the case.
Man Who Tried to Run over Deputy U.S. Marshal with a Minivan Found Guilty of Assaulting a Federal OfficerRead the Press Release
LOS ANGELES – A man who was on the run after failing to abide by the terms of his release after serving a prison sentence in a narcotics case was found guilty this afternoon of assaulting a Deputy U.S. Marshal by trying to run him over with a minivan.
Keith Leon Smith, 47, was found guilty by a federal jury of one count of assaulting a federal officer with a deadly and dangerous weapon.
“Law enforcement officers put their lives at risk every day in the line of duty,” said United States Attorney Eileen M. Decker. “Those who increase this risk and intentionally put the lives of law enforcement officers in jeopardy will be prosecuted.”
According to the evidence presented during a three-day trial in United States District Court, on March 11, 2015, six Deputy U.S. Marshals went to a residence on East 220th Street in Carson, where they believed Smith was residing. The Deputy Marshals were conducting an investigation with the goal of taking Smith into custody after a federal judge in 2013 had issued a bench warrant. Smith was wanted because he had violated the terms of his supervised release after serving more than seven years in prison for being convicted of manufacturing methamphetamine.
While conducting the surveillance, the Deputy Marshals observed Smith exit the residence, get into a minivan and leave the location. The Deputy Marshals, who were in several vehicles, followed Smith and executed a traffic stop. As the Deputy Marshals approached the minivan that Smith was driving and identified themselves as law enforcement officers, Smith reversed his vehicle toward some of the Marshals Service vehicles. Smith then suddenly accelerated his vehicle toward one of the Deputy Marshals, who was in front of the minivan. The Deputy Marshal, now in the way of the oncoming minivan, fired his weapon at the windshield and fell backward.
Smith briefly stopped the vehicle as the shots hit the windshield, and then accelerated the minivan toward the Deputy Marshal on the ground. The Deputy Marshal was able to jump out of the way of the minivan and fire several shots at the vehicle. According to court documents, the Deputy Marshal “believes that he would be dead if he had not stumbled out of the way of defendant’s oncoming vehicle.”
Smith then sped away as the Deputy Marshals gave chase. But, due in part to his dangerous driving, which included swerving into oncoming traffic, Smith was able to elude capture that day. However, deputies with the Los Angeles Sheriff’s Department located Smith’s minivan the next day and took him into custody. During a subsequent interview with Sheriff’s Deputies, Smith stated that he did not “stop” for the Marshals because he did not “want to go back to prison,” according to the evidence presented at trial.
As a result of today’s conviction, Smith faces a statutory maximum sentence of 20 years in federal prison. United States District Judge R. Gary Klausner, who presided over the trial, is scheduled to sentence Smith on April 18.
The investigation in the assault case was conducted by the Federal Bureau of Investigation and the Los Angeles County Sheriff’s Department.
The case was prosecuted by Assistant United States Attorneys Anil J. Antony and Kimberly D. Jaimez of the General Crimes Section.
Mexican Mafia Member who Oversaw Latino Street Gangs in Orange County for Decades Found Guilty of Federal Racketeering OffensesRead the Press Release
SANTA ANA, California – A longtime member of the Mexican Mafia prison gang who exerted control over Latino street gangs in Orange County for 30 years was convicted today of federal racketeering offenses, with a jury finding that he ordered murders and assaults while incarcerated in federal prison for a prior racketeering conviction.
Peter Ojeda, 73, who has been in federal custody since he was indicted in a prior racketeering case in 2005, was found guilty of two counts: conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act (RICO) and conspiracy to commit violent crimes in aid of racketeering.
Ojeda, who is also known as “Sana” and “The Big Homie,” was one of 99 defendants charged in 2011 in relation to Operation “Black Flag,” an investigation conducted by the Santa Ana Gang Task Force (see: http://go.usa.gov/cQTMm).
The jury, which began hearing evidence about two months ago in United States District Court, found that both conspiracies involved plots to murder other gangsters as part of a turf war with a rival Mexican Mafia member who attempted to assert control over local street gangs after Ojeda was imprisoned in his prior case.
In relation to the RICO conspiracy, the jury found that Ojeda was involved in the operation and management of the Mexican Mafia’s activities in Orange County, which included conspiring to commit murder, narcotics trafficking and extortion. Ojeda ordered Latino street gangs in Orange County to pay “taxes” that consisted of a portion of the proceeds the gangs earned from various criminal activities, including drug trafficking. In return, gang members were permitted to exert influence over their neighborhoods and territories and seek protection or assistance from the Mexican Mafia.
Ojeda’s girlfriend, Suzie Rodriguez, 53, was also found guilty in the RICO and VICAR conspiracies for acting as a messenger between Ojeda and local gang leaders while Ojeda was housed in a federal prison in Pennsylvania. During the trial, prosecutors argued that Rodriguez acted as Ojeda’s eyes, ears and voice on the streets of Orange County. Following today’s verdict, Rodriguez, who had been free on bond, was remanded into custody.
“Today’s verdict demonstrates our ongoing commitment to using all available tools to dismantle the Mexican Mafia and the street gangs associated with it,” said United States Attorney Eileen M. Decker. “No one associated with the Mexican Mafia – whether they are an actual member of the prison gang or the member of a gang affiliated with Mexican Mafia – is beyond the reach of the law. Whether their crimes are committed on the streets or in our prisons, gang members will be brought to justice.”
The Mexican Mafia is a powerful and violent prison gang that controls drug distribution and other illegal activities within the California penal system and on the streets of Southern California by organizing Latino street gang members for the purpose of establishing a larger network for the Mexican Mafia’s illegal activities. If a street gang does not comply with the demands of the Mexican Mafia, the prison gang will order the assault or murder the offending gang’s members, whether they are in custody or on the streets.
“The guilty verdicts today serve as an affirmation that should resonate with criminal gang enterprises that law enforcement will relentlessly pursue them to keep violence out of our communities and bring those involved to justice,” said Carlos Rojas, Chief of the Santa Ana Police Department. “This investigation and prosecution is an example of seamless cooperation between local, state and federal law enforcement. The Santa Ana Police Department looks forward to continuing our partnerships to impact these violent criminal enterprises impacting our community.
Ojeda and Rodriguez are scheduled to be sentenced by United States District Judge James V. Selna on May 9. At that time, both defendants face potential sentences of life without parole in federal prison.
In the prior federal case, Ojeda pleaded guilty to conspiring to violate RICO and conspiring to distribute narcotics. In late 2006, he was sentenced to 14 years in federal prison. It was while in federal prison that he participated in the subsequent conspiracy that led to his indictment in Operation Black Flag and today’s guilty verdicts.
With the guilty verdicts today against Ojeda and Rodriguez, 59 defendants now have been convicted on federal charges related to Operation Black Flag (the remaining 40 defendants charged in the case were prosecuted by the Orange County District Attorney’s Office).
The Santa Ana Gang Task Force is made up of agents and officers with the Federal Bureau of Investigation; the Santa Ana Police Department; the Orange County Sheriff’s Department; the Bureau of Alcohol, Tobacco and Firearms and Explosives; and the California Department of Corrections and Rehabilitation. The Anaheim Police Department, the Los Angeles Sheriff’s Department and the United States Bureau of Prisons provided substantial assistance.
Executive at Now-Defunct Mirae Bank Indicted in Loan Fraud Case that Caused $33 Million in Losses and Contributed to Failure of BankRead the Press Release
LOS ANGELES – The former chief marketing officer at Mirae Bank was arrested this morning on federal bank fraud charges that allege he was responsible for the bank issuing $150 million in fraudulent loans – loans that caused the bank to suffer $33 million in losses and were “a significant factor in Mirae Bank’s failure as a financial institution in 2009.”
Ataollah Aminpour, 57, of Beverly Hills, was arrested without incident pursuant to an eight-count indictment returned by a federal grand jury on January 7.
Aminpour, who is also known as John and Johnny Aminpour, is expected to be arraigned on the indictment this afternoon in United States District Court in downtown Los Angeles.
According to the indictment, Aminpour held himself out as a successful businessman who could help people obtain financing for gas station and car wash businesses with little or no down payment. In some cases, Aminpour personally identified businesses to be purchased and negotiated a sale price, but he allegedly overstated the actual purchase price to buyers. For these buyers and others whom Aminpour introduced to Mirae Bank, the indictment alleges that Aminpour oversaw the loan process and provided loan officers with information and documentation that contained false facts and figures, including the actual purchase price of the business and the source of the down payment. As a result, Mirae Bank funded inflated loans, with excess funds secretly going to Aminpour, borrowers and/or “hard money lenders” who had surreptitiously provided funds used to make down payments.
The indictment alleges that, as part of the scheme, Aminpour arranged for fake down payments – money that came from hard money lenders who made short-term, high-interest loans or, in some cases, from Aminpour himself. Aminpour also allegedly arranged for bogus lender information to be submitted to Mirae Bank in documents that falsely represented borrower assets, their experience in the business being purchased or the income expected from the business. In one instance detailed in the indictment, Aminpour allegedly caused a document to be submitted to Mirae Bank showing that a borrower had more than $1.4 million on deposit at another bank, when Aminpour himself had provided the borrower with $1.3 million – money that was in the borrower’s account for only one day.
“Mr. Aminpour allegedly orchestrated a scheme in which Mirae Bank funded loans based on applications that were rife with misstatements and false information,” said United States Attorney Eileen M. Decker. “Over the course of nearly four years, Mr. Aminpour was able to skim money from many of these loans, which allowed him to profit at the expense of the bank and taxpayers who had to bail out the failed financial institution.”
The indictment alleges that Aminpour concealed information and provided false information that led Mirae Bank to issue approximately 90 loans with principal exceeding $150 million and that these loans generated commissions for Aminpour of more than $1.4 million. As a result of the fraudulent activity, which ran from the fall of 2005 until June 2009 when the bank failed, Mirae suffered losses of approximately $33 million.
“The losses that Mirae Bank suffered and was facing on the fraudulent loans were a significant factor in Mirae Bank’s failure as a financial institution in 2009, and the FDIC’s resulting takeover of Mirae Bank as receiver,” according to the indictment. “The losses incurred on these loans were suffered in part by Mirae Bank, in part by the FDIC, and in part by Wilshire State Bank (now doing business as Wilshire Bank), which acquired Mirae Bank’s assets from the FDIC, after its holding company Wilshire Bancorp Inc. had received $62,158,000 in taxpayer funds from the Troubled Asset Relief Program.”
Aminpour is charged with six counts of bank fraud for causing Mirae Bank to issue fraudulent loans for gas stations and car washes in Vernon, Maywood, Lomita, Whittier, Carson and El Monte.
Aminpour is also charged with two counts of making false statements to a financial institution in relation to loan applications for two gas stations.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
If he is convicted, Aminpour would face a statutory maximum sentence of 30 years in federal prison for each of the eight counts.
The case against Aminpour is the result of an investigation by the Federal Deposit Insurance Corporation’s Office of Inspector General, the Federal Bureau of Investigation, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), and the Federal Housing Finance Agency’s Office of Inspector General.
Glendale Man Found Guilty of 32 Counts of Stealing and Distributing Avionics Trade Secrets Belonging to Former EmployerRead the Press Release
LOS ANGELES – An electrical engineer from Glendale has been convicted of 32 counts of violating the Economic Espionage Act for stealing trade secrets belonging to his former employer – a Pasadena-based aircraft avionics company – and distributing the proprietary material to three competitors.
Derek Wai Hung Tam Sing, 44, was found guilty by United States District Judge Christina A. Snyder, who presided over a bench trial in September. Judge Snyder yesterday issued a 28-page ruling in which she convicted Sing of 32 counts and acquitted him of one charge.
Sing worked at Rogerson Kratos (RK) in 2012. Until he was fired by the company, Sing had access to RK trade secrets, and he signed a confidentiality agreement that prohibited him from disclosing any confidential information and trade secrets that belonged to the company. According to Judge Snyder’s ruling, Sing’s “performance at RK was marked by delays in completing assignments, late attendance and an unprofessional attitude.”
After being terminated, Sing retained materials that he had collected while working at RK, despite being specifically asked to return all trade secrets. Instead, Sing “packaged the trade secrets with sufficient supporting documentation and instructions so that other competitor companies would be able to use the trade secrets and reverse engineer RK’s products,” according to Judge Snyder’s ruling, which noted that Sing testified at trial that he “wanted to get back at Rogerson Kratos” for not appreciating his work as an employee.
Sing prepared packages that included schematics of RK products and prepared a “readme” document that explained the importance of the proprietary information and instructed competitors to reverse engineer the products. Using email addresses created under a false name and a public wi-fi connection at a Starbucks, Sing sent the stolen trade secrets in early 2013 to other companies that produced avionics, including a company outside of the United States. Sing also used physical flash drives to send the trade secrets to companies. Judge Snyder found that Sing illegally sent seven schematics to three different companies, and that he illegally possessed four of those schematics.
“Sing attempted to hurt his former employer by stealing its trade secrets, making the material easily understood by engineers at other companies, and using an assumed identity to send the propriety information in the hope it would be used to develop a product to compete with his former employer,” said United States Attorney Eileen M. Decker. “If not for the ethical conduct of one competitor, Mr. Sing might have succeeded in delivering a crippling blow to the company that once employed him. The Department of Justice recognizes that intellectual property is a vital part of the economy of both Southern California as well as the nation.”
Judge Snyder acquitted Sing of one count of illegally possessing trade secrets from Precision Engine Controls Corporation, where Sing worked as a contract employee in 2010 and 2011. Judge Snyder wrote that there was no evidence that Sing had shared the trade secret information with third parties.
At a hearing Monday afternoon in which Judge Snyder announced her tentative decision in the case – a ruling that was made final with Tuesday’s written order – the court modified Sing’s $20,000 bond to impose conditions of home detention with electronic monitoring.
Judge Snyder is scheduled to sentence Sing on March 21, at which time the defendant will face a statutory maximum penalty of 10 years in federal prison for each of the 32 counts on which he was found guilty.
The case against Sing was investigated by the Federal Bureau of Investigation.
Four Arrested on Federal Mail Fraud Charges Related to $8 Million Embezzlement from Southland Commercial Laundry CompanyRead the Press Release
LOS ANGELES – Four men from Southern California have been arrested on charges that they embezzled more than $8 million from an industrial launderer based in Gardena that provided finishing services for Citizens of Humanity, a manufacturer of high-end designer jeans.
Luis Mariano Rodriguez, 48, of East Los Angeles, the one-time president of CM Laundry, LLC, and three associates were taken into custody yesterday morning for allegedly causing the laundry to pay fraudulent invoices that contained fictitious and inflated charges, and concealed Rodriguez’s role in the underlying transactions.
Since 2007, CM Laundry has been owned by Citizens of Humanity, LLC, a Huntington Park company that manufactures more than 1 million pairs of high-end denim jeans every year.
The other three defendants arrested yesterday by special agents with the FBI and officers with the Los Angeles Police Department are:
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Antonio Anguiano, 48, of Riverside, the owner of FI Products, which sold personal protective equipment;
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Terry Jay Mink, 62, of Rancho Palos Verdes, the owner of H&T Industrial Products, a hardware company that serviced CM Laundry; and
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Rene Exequiel Bautista, 43, of Sylmar, the owner of Valley Star Realty, which was used in the scheme under the fictitious business name “K&R Industrial Supplies.”
All four defendants made their initial appearances late yesterday afternoon in United States District Court in downtown Los Angeles. All four defendants were released on bond and were ordered to return to court for arraignments on February 1.
According to a criminal complaint filed on December 30, Rodriguez caused CM Laundry to pay more than $8 million after fraudulent invoices were submitted to the company.
“Mr. Rodriguez allegedly orchestrated a long-running scheme that took millions of dollars from his employer,” said United States Attorney Eileen M. Decker. “The scheme involved other defendants who also allegedly stole proceeds generated through fraudulently issued bills. All of these individuals must now face the criminal justice system for their criminal conduct.”
According to the affidavit in support of the criminal complaint, Anguiano, through his company, FI Products, billed CM Laundry for over $3.6 million during the period of the scheme, which allegedly ran from about May 2007 to about September 2013. During this period, FI Products transferred approximately $2.3 million to Rodriguez and his company, Genesis Electronics, Inc.
Mink, through his company, H&T Industrial Products, billed CM Laundry for over $5.5 million and transferred approximately $3.6 million to Rodriguez and Genesis.
Bautista, a real estate agent participated in this scheme through his company, K&R Industrial Supplies, which he established in 2012 at the behest of Rodriguez and was used to submit invoices from Genesis to CM Laundry. Over an 18-month period, K&R Industrial Supplies billed CM Laundry for approximately $640,000 and transferred approximately $493,000 to Rodriguez and Genesis. “Bautista admitted Rodriguez produced and submitted all of the K&R Industrial Supplies invoices that were submitted to CM Laundry and paid by Citizens,” according to the complaint affidavit. “Bautista stated [in a deposition related to a civil lawsuit] that he did not create any of the K&R Industrial Supplies invoices, did not know what any of the invoiced items were, and did not supply anything to CM Laundry.”
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 complaint charges Rodriguez with three counts of mail fraud. The other three defendants are charged with one count of mail fraud. If they are convicted, each of the four defendants would face a statutory maximum sentence of 20 years in federal prison for each count.
As a result of civil litigation brought by CM Laundry and Citizens of Humanity, a Los Angeles Superior Court judge in November 2015 ordered Rodriguez and several other defendants to pay a total of $9,563,786, according to the criminal complaint.
The investigation into the embezzlement scheme was conducted by the Federal Bureau of Investigation and the Los Angeles Police Department, Major Crimes Division, Criminal Investigations Section.
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Doctor Who Pre-Signed Thousands of Prescriptions in $20 Million Health Care Fraud Scheme Sentenced to Nine Years in PrisonRead the Press Release
LOS ANGELES – The medical doctor at the center of a conspiracy linked to a sham medical clinic in Glendale was sentenced today to nine years in federal prison for his role in a $20 million scheme to defraud the Medicare and Medi-Cal programs.
Dr. Kenneth Johnson, 49, of Ladera Heights, received a 108-month prison term from United States District Judge S. James Otero.
Johnson was sentenced for his role in a scheme that, among other things, fraudulently prescribed expensive anti-psychotic medications and then re-billed the government for those drugs over and over. Johnson pre-signed thousands of prescriptions that were later used to fill millions of dollars in fraudulent prescriptions for anti-psychotic drugs.
Observing that Johnson’s involvement in the conspiracy caused “significant loss by any measure,” Judge Otero stated that the sentence was necessary to “deter others from engaging in this type of conduct, especially physicians.”
Johnson is one of three people found guilty after a trial in 2014 – and one of a total of 16 defendants who have been convicted – in relation to the scheme run out of Manor Medical Imaging in Glendale. The scheme generated fraudulent billings of more than $20 million, of which Medi-Cal and Medicare actually paid more than $9 million.
Using prescriptions that were pre-signed by Johnson, employees of Manor Medical generated thousands of prescriptions for identify theft victims – such as elderly Vietnamese beneficiaries of Medicare and Medi-Cal, military veterans who were recruited from drug rehab programs, and denizens of Skid Row. Members of the conspiracy created or doctored patient files to make it falsely appear the drugs were necessary and the patients were legitimately treated. After the prescriptions were filled at pharmacies and paid for by Medicare and Medi-Cal, they were sold on the black market and redistributed to pharmacies, where the drugs would be subject to new claims made to Medicare and Medi-Cal as though they were new bottles of drugs.
“Dr. Johnson essentially sold his prescription pad when he became part of the conspiracy that defrauded the government out of millions of dollars,” said United States Attorney Eileen M. Decker. “Johnson played a crucial role in this scheme, which could not have functioned without his medical license lending an air of legitimacy to the clinic.”
The case was the first in the nation involving an organized scheme to defraud government health care programs through fraudulent claims for expensive anti-psychotic medications. At a prior hearing, Judge Otero noted that the conspiracy was “particularly devious,” because the participants believed they targeted “under-the-radar” drugs in an effort to evade the attention of law enforcement.
In its sentencing brief, the government argued that Johnson “used his skill and professional licensure – issued in order to help people – to fraudulently take millions of dollars from programs designed to help the nation’s most vulnerable citizens.”
Previously in this case, another leader of the conspiracy – Lianna “Lili” Ovsepian, 35, of Tujunga, the manager and owner of Manor Medical – was sentenced to eight years in prison after pleading guilty to health care fraud charges. Her brother Artak Ovsepian, 34, of Tujunga – who was convicted with Johnson at trial – received a 15-year prison term in August. The third person convicted at trial – Nuritsa Grigoryan, 51, of Glendale – the holder of an Armenian medical license, who pretended to be an American doctor when she saw homeless “patients” and who filled out the bogus prescriptions pre-signed by Johnson – fled the United States after being found guilty and remains a fugitive.
The investigation in this case, which was called Operation “Psyched Out,” was conducted by the San Marino Police Department; the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse; the United States Food and Drug Administration, Office of Criminal Investigations; IRS-Criminal Investigation; the United States Department of Health and Human Services, Office of the Inspector General; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; the Glendale Police Department, Organized Crime Team; and the California Department of Health Care Services, Audits and Investigations Branch.
Owner of Three Los Angeles Clinics Sentenced to 78 Months in Prison for Medicare FraudRead the Press Release
WASHINGTON – The former owner and operator of three medical clinics located in Los Angeles was sentenced today to 78 months in prison for his role in a scheme that submitted more than $4.5 million in fraudulent claims to Medicare.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Eileen M. Decker of the Central District of California, Assistant Director in Charge David Bowdich of the FBI’s Los Angeles Division and Special Agent in Charge Chris Schrank of the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG) Los Angeles Region made the announcement.
Hovik Simitian, 48, of Los Angeles, pleaded guilty to one count of conspiracy to commit health care fraud on Aug. 18, 2015, and was sentenced today by U.S. District Court Judge Beverly Reid O’Connell of the Central District of California, who also ordered Simitian to pay $1,668,559 in restitution to Medicare.
Simitian owned and operated Columbia Medical Group Inc., Life Care Medical Clinic and Safe Health Medical Clinic, three medical clinics in Los Angeles. In connection with his guilty plea, Simitian admitted that from approximately February 2010 through June 2014, he and his co-conspirators paid illegal cash kickbacks to patient recruiters who brought Medicare beneficiaries to the clinics. Simitian also admitted that he and his co-conspirators then billed Medicare for lab tests and other services that were not medically necessary or were not actually provided to the Medicare beneficiaries, which they supported with false documentation they created. Simitian admitted that he submitted a total of $4,526,791 in false and fraudulent claims to Medicare and Medicare paid $1,668,559 on those claims.
“Not only is it illegal to pay for patient referrals – it potentially compromises patient care,” said United States Attorney Eileen M. Decker. “This scheme took nearly $1.7 million from the taxpayer-funded Medicare program, which paid bills submitted for services that in some cases were never provided. We will continue to fight health care fraud to protect Medicare – an important system that provides access to health care for millions of Americans.”
The FBI and HHS-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Central District of California. Trial Attorneys Blanca Quintero and Alexander F. Porter of the Criminal Division’s Fraud Section are prosecuting the case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,300 defendants who collectively have billed the Medicare program for over $7 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to Health Care Fraud Unit.
Owner of Three Los Angeles Clinics Sentenced to 78 Months in Prison for Medicare FraudRead the Press Release
The former owner and operator of three medical clinics located in Los Angeles was sentenced today to 78 months in prison for his role in a scheme that submitted more than $4.5 million in fraudulent claims to Medicare.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Eileen M. Decker of the Central District of California, Assistant Director in Charge David Bowdich of the FBI’s Los Angeles Division and Special Agent in Charge Chris Schrank of the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG) Los Angeles Region made the announcement.
Hovik Simitian, 48, of Los Angeles, pleaded guilty to one count of conspiracy to commit health care fraud on Aug. 18, 2015, and was sentenced today by U.S. District Court Judge Beverly Reid O’Connell of the Central District of California, who also ordered Simitian to pay $1,668,559 in restitution to Medicare.
Simitian owned and operated Columbia Medical Group Inc., Life Care Medical Clinic and Safe Health Medical Clinic, three medical clinics in Los Angeles. In connection with his guilty plea, Simitian admitted that from approximately February 2010 through June 2014, he and his co-conspirators paid illegal cash kickbacks to patient recruiters who brought Medicare beneficiaries to the clinics. Simitian also admitted that he and his co-conspirators then billed Medicare for lab tests and other services that were not medically necessary or were not actually provided to the Medicare beneficiaries, which they supported with false documentation they created. Simitian admitted that he submitted a total of $4,526,791 in false and fraudulent claims to Medicare and Medicare paid $1,668,559 on those claims.
The FBI and HHS-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Central District of California. Trial Attorneys Blanca Quintero and Alexander F. Porter of the Criminal Division’s Fraud Section are prosecuting the case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,300 defendants who collectively have billed the Medicare program for over $7 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
Federal Grand Jury Indicts Riverside Man on Charges of Conspiring with Shooter in San Bernardino Terrorist Attack to Provide Material Support to TerroristsRead the Press Release
RIVERSIDE, California – Enrique Marquez Jr., a longtime friend of Sayed Rizwan Farook, the male shooter in the San Bernardino terrorist attack, was named today in a federal grand jury indictment that charges him with conspiring with Farook in 2011 and 2012 to provide material support to terrorists.
Marquez, a 24-year-old Riverside resident, was also charged today with two counts of making a false statement in relation to the purchase of two assault rifles that were used in the deadly shooting at the Inland Regional Center (IRC) on December 2.
The five-count indictment additionally charges Marquez with marriage fraud and making a false statement on immigration paperwork in relation to an alleged sham marriage with a member of Farook’s family.
Marquez is currently being held in federal custody without bond and is scheduled to be arraigned in United States District Court in Riverside on January 6.
“This indictment demonstrates that we will hold accountable all individuals who collaborate with terrorists in executing their plans,” said United States Attorney Eileen M. Decker. “Defendant Marquez’s extensive plotting with Syed Rizwan Farook in 2011 and 2012, and his purchase of explosive powder and two firearms, provided the foundation for the murders that occurred this month. This indictment is the result of sustained and coordinated efforts by many federal and state prosecutors, agents and officers, and I thank them for their efforts.”
David Bowdich, the Assistant Director in Charge of the FBI’s Los Angeles Field Office, said: “Mr. Marquez is charged for his role in a conspiracy several years ago to target innocent civilians in our own backyard with cold-blooded terror attacks, and with providing weapons to an individual whose endgame was murder. The covert nature of the defendant’s alleged actions is a stark reminder of the challenges we face in preventing attacks planned in the name of violent jihad, and underscores the critical need for those with knowledge about terror plots to come forward.”
Today’s indictment charges Marquez with conspiring with Farook to provide material support and resources – including weapons, explosives and personnel – to terrorists, knowing and intending that such support was to be used in preparation for and in carrying out the use of fire or explosive to maliciously damage or destroy any institution or organization receiving federal financial assistance and property used in interstate or foreign commerce or in any activity affecting interstate or foreign commerce.
In addition to the conspiracy count, Marquez is charged with two counts of making a false statement when purchasing two assault rifles for Farook – a Smith and Wesson, model M&P-15 Sport, 5.56-caliber rifle that was bought on November 14, 2001, and a DPMS, model A-15, 5.56-caliber rifle that was bought on February 22, 2012 – which, according to an affidavit previously filed in this case, were used in the December 2 attack on the IRC that killed 14 people and wounded 22 others. Specifically, Marquez is charged with stating on a Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) form that he was the actual buyer, a statement that was, and which defendant knew to be, false.
The final two counts in the indictment allege that Marquez entered into a sham marriage with a member of Farook’s family in November 2014 and that on July 17, 2015, he signed an immigration form, under penalty of perjury, that he was living with the purported spouse in Corona, California, when he was not actually living there.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
The charge of providing material support to terrorists carries a maximum sentence of 15 years in federal prison. The charges of making a false statement in connection with acquisition of firearms each carry a statutory maximum penalty of 10 years in federal prison. The marriage fraud count carries a statutory maximum sentence of five years in prison, and the charge of making a false statement on immigration paperwork carries a statutory maximum sentence of 10 years in prison.
Today’s indictment in the result of an ongoing investigation that is being conducted by several members of the Inland Empire Joint Terrorism Task Force, including agents and detectives from the FBI, the San Bernardino Police Department, the San Bernardino County Sheriff’s Department, ATF, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Riverside County Sheriff’s Department, the Ontario Police Department and the Riverside Police Department.
Several agencies are providing considerable assistance to the investigation, including the San Bernardino County District Attorney’s Office and detectives with the Chino Police Department, the Redlands Police Department and the Corona Police Department. Additionally, investigators have collaborated with sister task forces in the region and throughout the country, as well as with the intelligence community, foreign law enforcement partners and various FBI Legal Attachés located overseas.
The case against Marquez is being prosecuted by the United States Attorney’s Office for the Central District of California and the Counterterrorism Section of the Department’s National Security Division.
Marquez Indictment (235.44 KB)
Seal Beach Man Who Defrauded Dozens of Distressed Homeowners in Foreclosure Rescue Scheme Sentenced to 8 Years in PrisonRead the Press Release
Riverside, California – A Seal Beach man who operated a bogus mortgage rescue scheme – in which he made false promises to dozens distressed homeowners, filed fraudulent bankruptcies to delay foreclosure and rented the properties to third parties as the foreclosure proceedings were delayed – was sentenced today to eight years in federal prison.
Terry Meisinger, 75, was sentenced by United States District Judge Virginia A. Phillips, who rejected Meisinger’s arguments that his age merited a lower sentence. Judge Phillips noted that, even if Meisinger was released from prison when he was 80 years old, he would still pose a danger to the public.
Judge Phillips also ordered Meisinger to pay $1.5 million in restitution to his victims.
Meisinger pleaded guilty in October to two counts of wire fraud.
“This man earned significant profits as the result of his scheme – profits that came as the result of significant financial harm inflicted upon victims,” said United States Attorney Eileen M. Decker. “This scheme operated for years and continued after my office filed a civil lawsuit and he was ordered to cease his fraudulent activities. This trail of victims, most of whom lost their homes, has earned this defendant the lengthy prison term imposed today.”
When he pleaded guilty, Meisinger specifically admitted that he defrauded a distressed homeowner by inducing him to sign a quitclaim in exchange for promises that included negotiating a short-sale agreement with his lender that would free the homeowner from his mortgage on a property in North Las Vegas, Nevada. But, instead, Meisinger caused a deed of trust to be recorded on the property, which was followed by a fraudulent bankruptcy on behalf of the person who supposedly now held an interest in the home. Meanwhile, Meisinger rented out the home to another person while foreclosure proceedings were stayed as a result of the fraudulent bankruptcy.
Meisinger “repeated the process of causing the recording of deeds of trusts in the names of various beneficiaries whose identities he controlled and causing the filing of bankruptcies on behalf of those lenders to delay the foreclosure proceedings, while collecting rents” on property in North Las Vegas, according to the plea agreement filed in this case.
In papers filed in relation to today’s sentencing, prosecutors said that there were more than 250 victims of the scheme, including homeowners, lenders, and renters. Meisinger “collected more than $1.5 million in illicit rent payments on more than 100 properties. Further, he caused more than 300 bogus bankruptcy petitions to be filed in the names of numerous individuals who had no knowledge their identity was being used.”
Meisinger also admitted that his illegal conduct violated Judge Phillips’ court order in a prior civil matter barring Meisinger from participating in the home finance or real estate industries for 10 years (see: http://go.usa.gov/3Sr23). In that order, Meisinger was also barred from filing bankruptcy petitions. Judge Phillips additionally imposed a $5 million civil fine on Meisinger.
“HUD-OIG continues to vigilantly protect FHA insured borrowers from those who conduct fraudulent loan modification schemes. This significant sentence demonstrates our commitment to protecting HUD’s important work in providing affordable home ownership,” said James Todak, Special Agent in Charge of Housing and Urban Development’s Office of the Inspector General.
The criminal case against Meisinger is the result of an investigation by the United States Department of Housing and Urban Development, Office of the Inspector General (HUD-OIG).
Former Administrator at Los Angeles Law Firm Sentenced to 5 Years in Federal Prison for Embezzling from Her EmployerRead the Press Release
LOS ANGELES – A former administrator of a Los Angeles law firm was sentenced today to 60 months in federal prison for embezzling more than $3.3 million from her employer.
Esterlina Santos, 53, who resides in the Ladera Heights district of Los Angeles, was also ordered by United States District Judge Beverly Reid O’Connell to pay $3,322,161 in restitution to her former employer and $781,109 to the Internal Revenue Service.
Santos pleaded guilty in June to one count of mail fraud and one count of subscribing to a false tax return.
According to court documents, from 2004 to August 2010, Santos fraudulently obtained approximately $3,322,161 from the Law Offices of Robert Smylie and Associates (RSA). While serving as the firm administrator for RSA, Santos used QuickBooks software to generate checks from RSA’s operating account to pay for expenses for her personal credit accounts, including those associated with American Express, Bank of America and Capital One.
After Santos generated checks from RSA’s operating account and mailed them to pay her personal credit accounts, she used QuickBooks to alter the checks to falsely reflect that they were paid to RSA’s vendors for services purportedly provided.
When she pleaded guilty, Santos admitted that she received $2,448,794 of income she failed to report to the IRS during the 2007 through 2010 tax years.
Santos was ordered to begin serving her sentence on January 4.
The investigation into Santos was conducted by IRS Criminal Investigation and the Federal Bureau of Investigation.
San Fernando Valley Man Convicted of Giving Illegal Gifts to Government Employees in Exchange for BusinessRead the Press Release
LOS ANGELES – A man who operated two businesses that sold office supplies to the federal government has been convicted by a federal jury of giving illegal gifts to federal employees who did business with his companies.
Ivan Greenhut, 57, of Tarzana, was convicted late yesterday afternoon in United States District Court of one count of conspiring to give gifts to federal officials who purchased products from Greenhut’s companies and one count of giving a gift to a public official, specifically a United States Army employee who purchased products from Greenhut’s companies.
“The public is entitled to impartial purchasing decisions by federal employees,” said United States Attorney Eileen M. Decker. “Mr. Greenhut’s illegal gift scheme cast doubt upon every purchase from his companies, thereby violating the public’s trust and confidence in its government. That scheme now has him facing a significant federal prison sentence.”
Greenhut operated two companies – Modern Data Products, which operated out of Canoga Park, and Modern Imaging Solutions, based out of the Philippines. These companies sold office supplies – for example, printer and photocopier supplies, toner cartridges, stationary and office furniture – to government and U.S. Army officials whose job it was to buy supplies on behalf of the federal government.
Greenhut was part of scheme to pay gratuities to government contracting officers who purchased supplies from his companies. “These gifts included electronics, such as laptop computers, digital cameras, iPads, iPods and gift certificates, worth hundreds of dollars, to retailers such as Amazon, Safeway, Target, and Best Buy,” according to court documents. “Many of these gifts were sent to the government official’s personal residence or personal email addresses.”
Testimony at trial showed that Greenhut also operated a “rewards” program in which government contracting officers earned “points” based on the amount they approved their agency to purchase.
The evidence at trial showed that Greenhut provided government officials who purchased supplies from his companies gifts with a total value of more than $36,000.
A witness testified that Greenhut knew that federal buyers could not accept gifts and that he was asked to stop. Greenhut also knew that the gifts could get him “in criminal trouble,” according to instant message communications shown to the jury. Greenhut refused to stop giving the gifts, however, because the gifts brought him “far too much business.”
United States District Judge Christina A. Snyder, who presided over the four-day trial, scheduled a sentencing hearing for March 21, 2016, at which time Greenhut will face a statutory maximum penalty of seven years in federal prison.
The jury that convicted Greenhut of the two felony charges also acquitted him of a witness tampering charge that alleged he attempted to persuade the businesses’ co-owner to lie about the gratuities to investigators.
The case against Greenhut is the product of an investigation by the Defense Criminal Investigative Service, which received substantial assistance from NASA’s Office of Inspector General and General Services Administration, Office of Inspector General.
Former HSI Special Agent Pleads Guilty to Taking Bribes from Korean Businessman Being Investigated for Human TraffickingRead the Press Release
LOS ANGELES – A former special agent with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) pleaded guilty this afternoon to accepting thousands of dollars in bribes from a man who had been accused of trafficking a woman into the United States to be a sex slave.
Joohoon David Lee, 43, who currently resides in Las Vegas, Nevada, pleaded guilty to one count of bribery before United States District Judge Michael W. Fitzgerald.
“Corrupt officials who abuse their positions of power to line their pockets compromise our entire system of government,” said United States Attorney Eileen M. Decker. “In this case, a federal law enforcement officer thwarted justice in exchange for just a few thousand dollars and hindered the ability of a possible trafficking victim to seek justice.”
Lee accepted money from a Korean man identified in court documents at “H.S.” According to a plea agreement filed in this case, 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 slave for a Korean businessman named H.S.
About a year later, according to the plea agreement, 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. H.S. agreed, and Lee accepted $3,000 in cash.
Approximately 10 days after receiving the money, Lee travelled to Seoul, where H.S. paid for Lee’s hotel and entertainment expenses. While in Korea, Lee asked for “a large sum of money, “according to the plea agreement, in which Lee admits accepting between $6,000 and $7,000.”
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.”
“There will be zero tolerance for public officials who abuse their authority and violate the public’s trust,” said Joe Jeronimo, special agent in charge for ICE’s Office of Professional Responsibility. “Guarding against illegal or unethical behavior by those in positions of public trust is not an option – it is an obligation we have to the people we serve. ICE’s Office of Professional Responsibility conducted the investigation in this case and we’ll continue to hold our employees to the highest standards of professional conduct.”
Lee is scheduled to be sentenced by Judge Fitzgerald on May 23, at which time he faces a statutory maximum sentence of 15 years in federal prison.
Riverside Man Charged with Conspiring to Provide Material Support to Terrorism, as well as Being ‘Straw Purchaser’ of Assault Rifles Later Used in San Bernardino Attack that Killed 14Read the Press Release
RIVERSIDE, California – Enrique Marquez Jr., a longtime friend of Syed Rizwan Farook, the male shooter in the San Bernardino terrorist attack, was charged today with conspiring with Farook in 2011 and 2012 to commit crimes of terrorism. Marquez was also charged today with the unlawful purchase of two assault rifles used in the deadly shooting two weeks ago.
A three-count criminal complaint filed this afternoon additionally charges Marquez with defrauding immigration authorities by entering into a sham marriage with a member of Farook’s family.
Marquez, a 24-year-old Riverside resident, was arrested today by special agents with the Federal Bureau of Investigation, and he is expected to make his initial court appearance this afternoon in federal court in Riverside.
The criminal complaint filed in United States District Court charges Marquez with conspiring with Farook to provide material support – including himself, a firearm and explosives – for crimes of terrorism; making a false statement in connection with acquisition of firearms; and immigration fraud.
“Mr. Marquez conspired with Mr. Farook to commit vicious attacks, as set forth in today’s charges,” said United States Attorney Eileen M. Decker. “Even though these plans were not carried out, Mr. Marquez’s criminal conduct deeply affected San Bernardino County, Southern California and the entire United States when the guns purchased by Marquez were used to kill 14 innocent people and wound many others. While there currently is no evidence that Mr. Marquez participated in the December 2 attack or had advance knowledge of it, his prior purchase of the firearms and ongoing failure to warn authorities about Farook’s intent to commit mass murder had fatal consequences. Today’s charges are the result of exceptional work by many prosecutors and law enforcement agencies, and I thank them for their tremendous effort so far in this case.”
The affidavit in support of the complaint provides details into parts of the exhaustive and ongoing investigation into the attack on December 2 that killed 14 people at the Inland Regional Center (IRC). The complaint does not allege that Marquez was involved in the December 2 terrorist attack at the IRC. The complaint does allege that Marquez purchased the AR-15-style rifles used in the shooting, that Marquez purchased explosive material ultimately used to construct a pipe bomb found at the IRC, and that in 2011 and 2012 Marquez and Farook planned terrorist attacks in the Inland Empire that were not carried out.
“Many dedicated law enforcement personnel have worked around the clock and side by side with their Joint Terrorism Task Force partners to gather evidence and build a solid terrorism case against Mr. Marquez over the past two weeks,” said Assistant Director in Charge David Bowdich of the FBI’s Los Angeles Field Office. “As we will continue to investigate the facts surrounding the terrible shooting in San Bernardino, we will leave no stone unturned in an effort to deliver answers and justice to the murdered victims and the families they left behind.”
According to the affidavit, in approximately 2005, Marquez moved to Riverside, where he met Farook, who was his next-door neighbor. After their initial meeting, Farook introduced Marquez to Islam, and, in 2007, Marquez converted to Islam. Farook later introduced Marquez to radical Islamic ideology, which included expressing disdain towards Muslims in the U.S. military who killed other Muslims, as well as discussing the extremist views of the now-deceased imam and Islamic lecturer Anwar al-Aulaqi. Over the next few years, Farook provided Marquez with radical Islamic materials, and by 2011, Marquez spent most of his time at Farook’s residence listening to lectures and watching videos involving radical Islamic content. Those materials included Inspire Magazine, the official publication of Al-Qaeda in the Arabian Peninsula (AQAP), and videos produced by Al-Shabaab. In August 2011, Farook informed Marquez of his interest in joining AQAP in Yemen.
In late 2011, according to the affidavit, Marquez and Farook started planning to use firearms and explosives to carry out terrorist acts – attacks that Marquez told investigators were designed to maximize the number of casualties that could be inflicted. The affidavit recounts a recent interview with Marquez in which he admitted making plans with Farook to attack the library or cafeteria at Riverside Community College (RCC), where both men had been students. The plan allegedly was to throw pipe bombs into the cafeteria area from an elevated position on the second floor, and then to shoot people as they fled.
Marquez and Farook also planned to attack eastbound lanes of State Route 91 (SR-91) during afternoon rush hour, the affidavit states. Marquez told investigators that they chose a particular section of the freeway because there were no exits, which would increase the number of targets in the eastbound lanes. The plan was for Farook to throw pipe bombs on to the freeway, which they believed would disable vehicles and stop traffic. Farook allegedly planned to then move among stopped vehicles, shooting into them, while Marquez shot into vehicles from a position on a nearby hillside. Marquez allegedly said that he would watch for law enforcement and emergency vehicles, and his priority was to shoot law enforcement before shooting life-saving personnel.
According to the affidavit, Marquez and Farook took steps to carry out their plans by purchasing firearms, ammunition and other tactical gear, as well as going to local firing ranges. In late 2011 and 2012, Marquez allegedly purchased two firearms and portrayed himself as the actual purchaser of the rifles, when he was in fact buying the weapons for Farook as part of the plan to attack RCC and SR-91. According to the affidavit, Marquez told investigators that he agreed to purchase the weapons because “his appearance was Caucasian, while Farook looked Middle-Eastern.” Investigators have determined that on November 14, 2011, Marquez purchased a Smith and Wesson M&P-15 Sport rifle for Farook. On February 22, 2012, Marquez purchased a DPMS model A-15 rifle, according to records in the affidavit, which states that each rifle cost approximately $750.
Around the same time as he purchased the firearms for Farook, Marquez purchased explosives – specifically smokeless powder – “in furtherance of his and Farook’s plans to create bombs and commit mass killings,” according to the affidavit.
In the first half of 2012, Marquez and Farook allegedly continued to prepare for terrorist attacks by going to firing ranges to practice shooting guns and further discussing extremist ideologies. After 2012, Marquez allegedly distanced himself from Farook and ceased plotting with Farook for a variety of reasons, including the arrest of Ralph Deleon and others on material support for terrorism charges in November 2012.
The complaint affidavit alleges the following timeline of events based on the investigation to date: On the morning of December 2, 2015, shortly after 9:00., Farook went to an event at the IRC and placed an item on a table. Following the shooting at the IRC, investigators discovered a remote-controlled improvised explosive device (IED) on a table – a pipe bomb constructed out of three galvanized steel pipes and smokeless powder that was armed and ready to detonate. A subsequent search of Farook’s residence led to the discovery of smokeless powder that Marquez allegedly admitted purchasing in 2011 while planning terrorist acts with Farook. In addition, a remote control was found in the sports utility vehicle after Farook and his wife Tafsheen Malik were killed. In his interview with investigators, Marquez allegedly stated that the smokeless powder was purchased to be used in the construction of an “explosive device.” According to the affidavit, Marquez described his familiarity with the use of remote-control devices to detonate IEDs, and said he and Farook reviewed instructions on how to make IEDs that were in Inspire Magazine.
According to the affidavit, subsequent investigation determined that on the morning of the shooting, a Facebook account associated with Malik searched for materials related to the Islamic State of Iraq and the Levant (ISIL). Shortly after the shooting, a post on a Facebook page associated with Malik said, “We pledge allegiance to Khalifa bu bkr al bhaghdadi al quraishi” which the affidavit alleges is a reference to the leader of ISIL.
After Farook and Malik were killed in the shooting that ended the pursuit, authorities recovered four firearms and thousands of rounds of ammunition. Among the firearms recovered were the two rifles that Marquez allegedly purchased for Farook several years earlier. Forensic testing has confirmed that the two rifles were used in the attack on the IRC.
Four days after the attack on the IRC, Marquez met with law enforcement officials investigating the incident. Marquez admitted a series of statements that are detailed in the affidavit.
In addition to the charges related to the straw purchase of the rifles and the plans to commit terrorist attacks, Marquez is charged with defrauding U.S. Citizenship and Immigration Services in relation to a sham marriage with a member of Farook’s extended family so that she could obtain legal status in the United States. In return for his participation in the fraud, she paid Marquez $200 per month.
The charges against Marquez were filed by prosecutors in the National Security Division of the United States Attorney’s Office for the Central District of California. Prosecutors from the National Security Division have been working closely with law enforcement in support of the investigation, beginning shortly after the attacks and continuing around the clock since then.
This investigation is being conducted by several members of the Inland Empire Joint Terrorism Task Force, including agents and detectives from the Federal Bureau of Investigation; the San Bernardino Police Department; the San Bernardino County Sheriff’s Department; the Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; the Riverside County Sheriff’s Department; the Ontario Police Department; and the Riverside Police Department. Several agencies are providing considerable assistance to the investigation, including the San Bernardino County District Attorney’s Office and detectives with the Chino Police Department, the Redlands Police Department, and the Corona Police Department. Additionally, investigators have collaborated with sister task forces in the region and throughout the country, as well as with the intelligence community, foreign law enforcement partners, and various FBI Legal Attachés located overseas.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
The charge of providing material support to terrorists carries a maximum sentence of 15 years. The charge of making a false statement in connection with acquisition of firearms carries a statutory maximum penalty of 10 years in federal prison. The visa fraud count carries a statutory maximum sentence of 10 years in prison.
Riverside Man Charged with Conspiring to Provide Material Support to Terrorism, as well as Being ‘Straw Purchaser’ of Assault Rifles Later Used in San Bernardino Attack that Killed 14Read the Press Release
RIVERSIDE, California – Enrique Marquez Jr., a longtime friend of Syed Rizwan Farook, the male shooter in the San Bernardino terrorist attack, was charged today with conspiring with Farook in 2011 and 2012 to commit crimes of terrorism. Marquez was also charged today with the unlawful purchase of two assault rifles used in the deadly shooting two weeks ago.
A three-count criminal complaint filed this afternoon additionally charges Marquez with defrauding immigration authorities by entering into a sham marriage with a member of Farook’s family.
Marquez, a 24-year-old Riverside resident, was arrested today by special agents with the Federal Bureau of Investigation, and he is expected to make his initial court appearance this afternoon in federal court in Riverside.
The criminal complaint filed in United States District Court charges Marquez with conspiring with Farook to provide material support – including himself, a firearm and explosives – for crimes of terrorism; making a false statement in connection with acquisition of firearms; and immigration fraud.
“Mr. Marquez conspired with Mr. Farook to commit vicious attacks, as set forth in today’s charges,” said United States Attorney Eileen M. Decker. “Even though these plans were not carried out, Mr. Marquez’s criminal conduct deeply affected San Bernardino County, Southern California and the entire United States when the guns purchased by Marquez were used to kill 14 innocent people and wound many others. While there currently is no evidence that Mr. Marquez participated in the December 2 attack or had advance knowledge of it, his prior purchase of the firearms and ongoing failure to warn authorities about Farook’s intent to commit mass murder had fatal consequences. Today’s charges are the result of exceptional work by many prosecutors and law enforcement agencies, and I thank them for their tremendous effort so far in this case.”
The affidavit in support of the complaint provides details into parts of the exhaustive and ongoing investigation into the attack on December 2 that killed 14 people at the Inland Regional Center (IRC). The complaint does not allege that Marquez was involved in the December 2 terrorist attack at the IRC. The complaint does allege that Marquez purchased the AR-15-style rifles used in the shooting, that Marquez purchased explosive material ultimately used to construct a pipe bomb found at the IRC, and that in 2011 and 2012 Marquez and Farook planned terrorist attacks in the Inland Empire that were not carried out.
“Many dedicated law enforcement personnel have worked around the clock and side by side with their Joint Terrorism Task Force partners to gather evidence and build a solid terrorism case against Mr. Marquez over the past two weeks,” said Assistant Director in Charge David Bowdich of the FBI’s Los Angeles Field Office. “As we will continue to investigate the facts surrounding the terrible shooting in San Bernardino, we will leave no stone unturned in an effort to deliver answers and justice to the murdered victims and the families they left behind.”
According to the affidavit, in approximately 2005, Marquez moved to Riverside, where he met Farook, who was his next-door neighbor. After their initial meeting, Farook introduced Marquez to Islam, and, in 2007, Marquez converted to Islam. Farook later introduced Marquez to radical Islamic ideology, which included expressing disdain towards Muslims in the U.S. military who killed other Muslims, as well as discussing the extremist views of the now-deceased imam and Islamic lecturer Anwar al-Aulaqi. Over the next few years, Farook provided Marquez with radical Islamic materials, and by 2011, Marquez spent most of his time at Farook’s residence listening to lectures and watching videos involving radical Islamic content. Those materials included Inspire Magazine, the official publication of Al-Qaeda in the Arabian Peninsula (AQAP), and videos produced by Al-Shabaab. In August 2011, Farook informed Marquez of his interest in joining AQAP in Yemen.
In late 2011, according to the affidavit, Marquez and Farook started planning to use firearms and explosives to carry out terrorist acts – attacks that Marquez told investigators were designed to maximize the number of casualties that could be inflicted. The affidavit recounts a recent interview with Marquez in which he admitted making plans with Farook to attack the library or cafeteria at Riverside Community College (RCC), where both men had been students. The plan allegedly was to throw pipe bombs into the cafeteria area from an elevated position on the second floor, and then to shoot people as they fled.
Marquez and Farook also planned to attack eastbound lanes of State Route 91 (SR-91) during afternoon rush hour, the affidavit states. Marquez told investigators that they chose a particular section of the freeway because there were no exits, which would increase the number of targets in the eastbound lanes. The plan was for Farook to throw pipe bombs on to the freeway, which they believed would disable vehicles and stop traffic. Farook allegedly planned to then move among stopped vehicles, shooting into them, while Marquez shot into vehicles from a position on a nearby hillside. Marquez allegedly said that he would watch for law enforcement and emergency vehicles, and his priority was to shoot law enforcement before shooting life-saving personnel.
According to the affidavit, Marquez and Farook took steps to carry out their plans by purchasing firearms, ammunition and other tactical gear, as well as going to local firing ranges. In late 2011 and 2012, Marquez allegedly purchased two firearms and portrayed himself as the actual purchaser of the rifles, when he was in fact buying the weapons for Farook as part of the plan to attack RCC and SR-91. According to the affidavit, Marquez told investigators that he agreed to purchase the weapons because “his appearance was Caucasian, while Farook looked Middle-Eastern.” Investigators have determined that on November 14, 2011, Marquez purchased a Smith and Wesson M&P-15 Sport rifle for Farook. On February 22, 2012, Marquez purchased a DPMS model A-15 rifle, according to records in the affidavit, which states that each rifle cost approximately $750.
Around the same time as he purchased the firearms for Farook, Marquez purchased explosives – specifically smokeless powder – “in furtherance of his and Farook’s plans to create bombs and commit mass killings,” according to the affidavit.
In the first half of 2012, Marquez and Farook allegedly continued to prepare for terrorist attacks by going to firing ranges to practice shooting guns and further discussing extremist ideologies. After 2012, Marquez allegedly distanced himself from Farook and ceased plotting with Farook for a variety of reasons, including the arrest of Ralph Deleon and others on material support for terrorism charges in November 2012.
The complaint affidavit alleges the following timeline of events based on the investigation to date: On the morning of December 2, 2015, shortly after 9:00., Farook went to an event at the IRC and placed an item on a table. Following the shooting at the IRC, investigators discovered a remote-controlled improvised explosive device (IED) on a table – a pipe bomb constructed out of three galvanized steel pipes and smokeless powder that was armed and ready to detonate. A subsequent search of Farook’s residence led to the discovery of smokeless powder that Marquez allegedly admitted purchasing in 2011 while planning terrorist acts with Farook. In addition, a remote control was found in the sports utility vehicle after Farook and his wife Tafsheen Malik were killed. In his interview with investigators, Marquez allegedly stated that the smokeless powder was purchased to be used in the construction of an “explosive device.” According to the affidavit, Marquez described his familiarity with the use of remote-control devices to detonate IEDs, and said he and Farook reviewed instructions on how to make IEDs that were in Inspire Magazine.
According to the affidavit, subsequent investigation determined that on the morning of the shooting, a Facebook account associated with Malik searched for materials related to the Islamic State of Iraq and the Levant (ISIL). Shortly after the shooting, a post on a Facebook page associated with Malik said, “We pledge allegiance to Khalifa bu bkr al bhaghdadi al quraishi” which the affidavit alleges is a reference to the leader of ISIL.
After Farook and Malik were killed in the shooting that ended the pursuit, authorities recovered four firearms and thousands of rounds of ammunition. Among the firearms recovered were the two rifles that Marquez allegedly purchased for Farook several years earlier. Forensic testing has confirmed that the two rifles were used in the attack on the IRC.
Four days after the attack on the IRC, Marquez met with law enforcement officials investigating the incident. Marquez admitted a series of statements that are detailed in the affidavit.
In addition to the charges related to the straw purchase of the rifles and the plans to commit terrorist attacks, Marquez is charged with defrauding U.S. Citizenship and Immigration Services in relation to a sham marriage with a member of Farook’s extended family so that she could obtain legal status in the United States. In return for his participation in the fraud, she paid Marquez $200 per month.
The charges against Marquez were filed by prosecutors in the National Security Division of the United States Attorney’s Office for the Central District of California. Prosecutors from the National Security Division have been working closely with law enforcement in support of the investigation, beginning shortly after the attacks and continuing around the clock since then.
This investigation is being conducted by several members of the Inland Empire Joint Terrorism Task Force, including agents and detectives from the Federal Bureau of Investigation; the San Bernardino Police Department; the San Bernardino County Sheriff’s Department; the Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; the Riverside County Sheriff’s Department; the Ontario Police Department; and the Riverside Police Department. Several agencies are providing considerable assistance to the investigation, including the San Bernardino County District Attorney’s Office and detectives with the Chino Police Department, the Redlands Police Department, and the Corona Police Department. Additionally, investigators have collaborated with sister task forces in the region and throughout the country, as well as with the intelligence community, foreign law enforcement partners, and various FBI Legal Attachés located overseas.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
The charge of providing material support to terrorists carries a maximum sentence of 15 years. The charge of making a false statement in connection with acquisition of firearms carries a statutory maximum penalty of 10 years in federal prison. The visa fraud count carries a statutory maximum sentence of 10 years in prison.
Marquez Criminal Complaint (800.47 KB)
California Man Charged with Conspiring to Provide Material Support to Terrorism and Being ‘Straw Purchaser’ of Assault Rifles Ultimately Used in San Bernardino, California, AttackRead the Press Release
Enrique Marquez Jr., 24, of Riverside, California, a longtime friend of Syed Rizwan Farook, the male shooter in the San Bernardino, California, terrorist attack, was charged today with conspiring to provide material support to terrorists based upon his role in terrorist plotting with Farook in 2011 and 2012, the unlawful purchase of the two assault rifles used in the deadly shooting two weeks ago and defrauding immigration authorities by entering into a sham marriage with a member of Farook’s family.
Marquez was arrested today by the FBI and is expected to make his initial court appearance later today in federal court in Riverside. Marquez was charged in a three-count criminal complaint filed in the U.S. District Court for the Central District of California with conspiring to provide material support – including personnel, firearms and explosives – to terrorists in 2011 and 2012; with making a false statement in connection with acquisition of firearms; and immigration fraud.
“Enrique Marquez Jr. is charged with conspiring to provide material support to terrorists for his role in plotting attacks on American soil in 2011 and 2012, attacks which were, fortunately, not carried out. He is also charged with a firearms violation for making a straw purchase of weapons for Syed Rizwan Farook – weapons that were eventually used to carry out the recent terrorist attack in San Bernardino,” said Assistant Attorney General Carlin. “We will continue to investigate, and seek to hold accountable anybody found to be involved in, that heinous act. I would like to extend my gratitude to all the members of law enforcement involved in this ongoing investigation.”
“Mr. Marquez conspired with Mr. Farook to commit vicious attacks, as set forth in today’s charges,” said U.S. Attorney Eileen M. Decker of the Central District of California. “Even though these plans were not carried out, Mr. Marquez’s criminal conduct deeply affected San Bernardino County, Southern California, and the entire United States when the guns purchased by Marquez were used to kill 14 innocent people and wound many others. While there currently is no evidence that Mr. Marquez participated in the Dec. 2, 2015 attack or had advance knowledge of it, his prior purchase of the firearms and ongoing failure to warn authorities about Farook’s intent to commit mass murder had fatal consequences. Today’s charges are the result of exceptional work by many prosecutors and law enforcement agencies, and I thank them for their tremendous effort so far in this case.”
“Many dedicated law enforcement personnel have worked around the clock and side by side with their Joint Terrorism Task Force partners to gather evidence and build a solid terrorism case against Mr. Marquez over the past two weeks,” said Assistant Director in Charge David Bowdich of the FBI’s Los Angeles Field Office. “As we will continue to investigate the facts surrounding the terrible shooting in San Bernardino, we will leave no stone unturned in an effort to deliver answers and justice to the murdered victims and the families they left behind.”
The affidavit in support of the complaint provides details into parts of the exhaustive and ongoing investigation into the attack on Dec. 2, 2015, that killed 14 people at the Inland Regional Center (IRC). The complaint does not allege that Marquez was involved in the terrorist attack at the IRC. The complaint does allege that Marquez purchased the AR-15-style rifles that were ultimately used in the shooting, that Marquez previously purchased explosive material that was ultimately used to construct a pipe bomb that was found at the IRC and that in 2011 and 2012, Marquez and Farook planned terrorist attacks in the Inland Empire, California, that ultimately were not carried out.
According to the affidavit, in approximately 2005, Marquez moved to Riverside, where he met Farook, who was his next-door neighbor. After their initial meeting, Farook introduced Marquez to Islam, and, in 2007, Marquez converted to Islam. Farook later introduced Marquez to radical Islamic ideology, which included expressing disdain towards Muslims in the U.S. military who killed other Muslims, as well as discussing the extremist views of the now-deceased imam and Islamic lecturer Anwar al-Aulaqi. Over the next few years, Farook provided Marquez with radical Islamic materials, and by 2011, Marquez spent most of his time at Farook’s residence listening to lectures and watching videos involving radical Islamic content. Those materials included Inspire Magazine, the official publication of Al-Qaeda in the Arabian Peninsula (AQAP), and videos produced by Al-Shabaab. In August 2011, Farook informed Marquez of his interest in joining AQAP in Yemen.
In late 2011, according to the affidavit, Marquez and Farook started planning to use firearms and explosives to carry out terrorist acts – attacks that Marquez told investigators were designed to maximize the number of casualties that could be inflicted. The affidavit recounts a recent interview with Marquez in which he admitted making plans with Farook to attack the library or cafeteria at Riverside Community College (RCC), where both men had been students. The plan allegedly was to throw pipe bombs into the cafeteria area from an elevated position on the second floor, and then to shoot people as they fled.
Marquez and Farook also planned to attack eastbound lanes of State Route 91 (SR-91) during afternoon rush hour, the affidavit states. Marquez told investigators that they chose a particular section of the freeway because there were no exits, which would increase the number of targets in the eastbound lanes. The plan was for Farook to throw pipe bombs on to the freeway, which they believed would disable vehicles and stop traffic. Farook allegedly planned to then move among stopped vehicles, shooting into them, while Marquez shot into vehicles from a position on a nearby hillside. Marquez allegedly said that he would watch for law enforcement and emergency vehicles, and his priority was to shoot law enforcement before shooting life-saving personnel.
According to the affidavit, Marquez and Farook took steps to carry out their plans by purchasing firearms, ammunition and other tactical gear, as well as going to local firing ranges. In late 2011 and 2012, Marquez allegedly purchased two firearms and portrayed himself as the actual purchaser of the rifles, when he was in fact buying the weapons for Farook as part of the plan to attack RCC and SR-91. According to the affidavit, Marquez told investigators that he agreed to purchase the weapons because “his appearance was Caucasian, while Farook looked Middle-Eastern.” Investigators have determined that on Nov. 14, 2011, Marquez purchased a Smith and Wesson M&P-15 Sport rifle for Farook. On Feb. 22, 2012, Marquez purchased a DPMS model A-15 rifle, according to records in the affidavit, which states that each rifle cost approximately $750.
Around the same time as he purchased the firearms for Farook, Marquez purchased explosives – specifically smokeless powder – “in furtherance of his and Farook’s plans to create bombs and commit mass killings,” according to the affidavit.
In the first half of 2012, Marquez and Farook allegedly continued to prepare for terrorist attacks by going to firing ranges to practice shooting guns and further discussing extremist ideologies. After 2012, Marquez allegedly distanced himself from Farook and ceased plotting with Farook for a variety of reasons, including the arrest of Ralph Deleon and others on material support for terrorism charges in November 2012.
The complaint affidavit alleges the following timeline of events based on the investigation to date. On the morning of Dec. 2, 2015, shortly after 9:00 a.m., Farook went to an event at the IRC and placed an item on a table. Following the shooting at the IRC, investigators discovered a remote-controlled improvised explosive device (IED) on a table – a pipe bomb constructed out of three galvanized steel pipes and smokeless powder that was armed and ready to detonate. A subsequent search of Farook’s residence led to the discovery of smokeless powder that Marquez allegedly admitted purchasing in 2011 while planning terrorist acts with Farook. In addition, a remote control was found in the sports utility vehicle after Farook and his wife Tafsheen Malik were killed. In his interview with investigators, Marquez allegedly stated that the smokeless powder was purchased to be used in the construction of an “explosive device.” Marquez described his familiarity with the use of remote-control devices to detonate IEDs, and said he and Farook reviewed instructions on how to make IEDs that were in Inspire Magazine, according to the affidavit.
According to the affidavit, subsequent investigation determined that on the morning of the shooting, a Facebook account associated with Malik searched for materials related to the Islamic State of Iraq and the Levant (ISIL). Shortly after the shooting, a post on a Facebook page associated with Malik said, “We pledge allegiance to Khalifa bu bkr al bhaghdadi al quraishi” which the affidavit alleges is a reference to the leader of ISIL.
After Farook and Malik were killed in the shooting that ended the pursuit, authorities recovered four firearms and thousands of rounds of ammunition. Among the firearms recovered were the two rifles that Marquez allegedly purchased for Farook several years earlier. Forensic testing has confirmed that the two rifles were used in the attack on the IRC.
Four days after the attack on the IRC, Marquez met with law enforcement officials investigating the incident. Marquez admitted a series of statements that are detailed in the affidavit.
In addition to the charges related to the straw purchase of the rifles and the plans to commit terrorist attacks, Marquez is charged with defrauding U.S. Citizenship and Immigration Services in relation to a sham marriage with a member of Farook’s extended family so that she could obtain legal status in the United States. In return for his participation in the fraud, she paid Marquez $200 per month.
The charge of conspiring to provide material support to terrorists carries a maximum sentence of 15 years in prison. The charge of making a false statement in connection with the acquisition of firearms carries a statutory maximum sentence of 10 years in prison. The charge of immigration fraud carries a statutory maximum sentence of 10 years in prison. If convicted, any potential sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal history, if any, the defendant’s role in the offense and the characteristics of the violation.
A criminal complaint is not a finding of guilt. An individual charged by complaint is presumed innocent unless and until proven guilty.
This investigation is being conducted by several partner agencies that are part of the Los Angeles FBI’s Inland Empire Joint Terrorism Task Force. Several agencies are providing considerable assistance to the investigation, including the San Bernardino County District Attorney’s Office and detectives with the Chino Police Department; the Redlands Police Department; and the Corona Police Department. In addition, investigators have collaborated with sister task forces in the region and throughout the country, as well as with the intelligence community; foreign law enforcement partners; and various FBI Legal Attachés located overseas. The case is being prosecuted by the U.S. Attorney’s Office of the Central District of California and the National Security Division’s Counterterrorism Section.
Marquez Complaint