Eastern District of California

SACRAMENTO, Calif. — A federal grand jury returned a 10-count indictment against Reginald Lamont Thomas, 44, of Fairfield, charging him with bank fraud and aggravated identity theft, U.S. Attorney McGregor W. Scott announced.

According to court documents, Thomas used a victim’s personally identifiable information to take over the victim’s checking and savings account and make various unauthorized transactions, including incurring $112,874 in debit card charges.

This case is the product of an investigation by the U.S. Postal Inspection Service. Assistant U.S. Attorneys Tanya B. Syed and Matthew Morris are prosecuting the case.

If convicted of bank fraud, Thomas faces a maximum statutory penalty of 30 years in prison and a $1 million fine. If convicted of aggravated identity theft, Thomas faces a mandatory statutory penalty of two years in prison consecutive to any other sentence imposed and a fine of up to $250,000. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

FRESNO, Calif. — Hacel Alfredo Alvarez, 35, of Bakersfield, pleaded guilty today to possessing with intent to distribute methamphetamine and heroin, U.S. Attorney McGregor W. Scott announced.

According to court documents, Alvarez admitted that he was storing for the purpose of distribution 21 pounds of methamphetamine and over 1 pound of heroin that officers found at his residence in Bakersfield during the execution of a search warrant. The officers also found $8,980 in cash under the mattress in his bedroom.

This case is the product of an investigation by the Southern Tri-County High Intensity Drug Trafficking Area (HIDTA) task force, which consists of agents from Homeland Security Investigations and the Kern County Sheriff’s Office. Assistant U.S. Attorney Karen A. Escobar is prosecuting the case.

Alvarez is scheduled to appear in federal court in Fresno for sentencing on May 18. He faces a mandatory minimum statutory penalty of 10 years and a maximum penalty of life in prison, and a $10 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. — The owners of DC Solar, a Benicia-based company, pleaded guilty today to charges related to a billion dollar Ponzi scheme— the biggest criminal fraud scheme in the history of the Eastern District of California. The government’s investigation has resulted in the largest criminal forfeiture in the history of the District with over $120 million in assets forfeited that will go to victims, and has returned $500 million to the United States Treasury, with more to come, U.S. Attorney McGregor W. Scott announced.

Jeff Carpoff, 49, of Martinez, pleaded guilty today to conspiracy to commit wire fraud and money laundering. His wife, Paulette Carpoff, 46, pleaded guilty today to conspiracy to commit an offense against the United States and money laundering. According to court documents, between 2011 and 2018, DC Solar manufactured mobile solar generator units (MSG), solar generators that were mounted on trailers that were promoted as able to provide emergency power to cellphone towers and lighting at sporting events. A significant incentive for investors were generous federal tax credits due to the solar nature of the MSGs.

The conspirators pulled off their scheme by selling solar generators that did not exist to investors, making it appear that solar generators existed in locations that they did not, creating false financial statements, and obtaining false lease contracts, among other efforts to conceal the fraud. In reality, at least half of the approximately 17,000 solar generators claimed to have been manufactured by DC Solar did not exist.

U.S. Attorney Scott stated: “This billion dollar Ponzi scheme hurt investors and took money from the United States Treasury. This case represents not only the largest criminal fraud scheme in the history of the District, it also represents the largest criminal forfeiture in the history of the District with over $120 million in assets forfeited. All of this money will be returned to the victims. This scheme also targeted the United States Treasury, and we have returned $500 million to the Treasury to date. Agents, investigators and attorneys from various federal agencies are still working to continue to return money to victims and the United States Treasury. Today’s guilty pleas sends a strong message that fraudsters will get caught and will pay for their crimes. You can run, but you cannot hide.”

The forfeiture included seizing and auctioning 148 of the Carpoffs’ luxury and collector vehicles, including the 1978 Firebird previously owned by actor Burt Reynolds. This historical auction resulted in recouping approximately $8.233 million for victims. In addition to their collection of luxury and collector vehicles, Jeff and Paulette Carpoff used money from the scheme to pay for a minor-league professional baseball team and a NASCAR racecar sponsorship; to purchase luxury real estate in California, Nevada, the Caribbean, Mexico, and elsewhere; a subscription private jet service; a suite at a professional football stadium; and jewelry.

“The Carpoffs and their co-conspirators wove a web of lies and deceit in a massive fraud scheme. Meticulous review and analysis of millions of documents revealed the operation and true intention of the scheme,” said Special Agent in Charge Sean Ragan. “The FBI is committed to our partnerships with the Internal Revenue Service Criminal Investigation, Federal Deposit Insurance Corporation Office of Inspector General, and U.S. Marshals Service. Together, we seek to uncover fraud that exploits investors and taxpayers, ensuring criminals face justice.”

“By all outer appearances this was a legitimate and successful company,” said Kareem Carter, Special Agent in Charge IRS Criminal Investigation. “But in reality it was all just smoke and mirrors — a Ponzi scheme touting tax benefits to the tune of over $900 million. IRS CI is committed to investigating those who take advantage and impact the financial well-being of others for their own personal gain.”

 “The Federal Deposit Insurance Corporation, Office of Inspector General (FDIC-OIG) is pleased to join our law enforcement colleagues in announcing these guilty pleas,” stated Special Agent in Charge Wade Walters for the FDIC OIG San Francisco Regional Office. “The defendants conspired with others to create a fraudulent business venture that duped unsuspecting entities, including banks, to invest approximately $1 billion, which the two later used to support a lavish lifestyle. They also knowingly engaged in a money laundering transaction involving criminally derived property. The FDIC-OIG is committed to ensuring that those who use our Nation’s banks to undermine the integrity of the financial system will be held accountable.”

Four defendants have previously pleaded guilty to federal criminal charges related to the fraud scheme since October. Joseph W. Bayliss, 44, of Martinez, and Ronald J. Roach, of Walnut Creek, each pleaded guilty to related charges on Oct. 22, 2019. Robert A. Karmann, 53, of Clayton, pleaded guilty to related charges on Dec. 17, 2019. Ryan Guidry, 53, of Pleasant Hill, pleaded guilty to related charges on Jan. 14, 2020. A seventh co-conspirator is scheduled to plead guilty on Feb. 11. The investigation into the fraud remains ongoing.

This case is the product of an investigation by the Federal Bureau of Investigation, IRS‑Criminal Investigation, and the Federal Deposit Insurance Corporation Office of Inspector General. Assistant U.S. Attorneys André M. Espinosa and Kevin C. Khasigian are prosecuting the case.

Jeff and Paulette Carpoff are scheduled to be sentenced by U.S. District Judge John A. Mendez on May 19. Jeff Carpoff faces a maximum statutory penalty of 30 years in prison. Paulette Carpoff faces a maximum statutory penalty of 15 years in prison. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

FRESNO, Calif. — A federal grand jury returned a three-count indictment today against Saul Giovanni Solis Ontiveros, 24, of Pixley, and Eduardo Garcia, 20, of McFarland, charging them with conspiring to distribute over 160 pounds of methamphetamine and approximately 300 fentanyl pills, U.S. Attorney McGregor W. Scott announced. 

According to court documents, the defendants were stopped in a routine traffic stop in Pixley. Through the rear windows of the car, officers saw two buckets with a white crystalline substance on the rim of the lids. Eventually, further searches of the car and two residences located over 160 pounds of methamphetamine, over 200 pounds of liquid methamphetamine, and approximately 300 pills containing fentanyl. Inside both residences law enforcement officers found active methamphetamine conversion laboratories.

This case is the product of an investigation by the Drug Enforcement Administration and the Tulare County Sheriff’s Office with assistance from the California Department of Justice. Assistant U.S. Attorney Katherine Schuh is prosecuting the case.

If convicted, Ontiveros and Garcia face a mandatory minimum sentence of 10 years in prison, a maximum statutory penalty of life in prison and a $10 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

FRESNO, Calif. — The Medicine Chest Pharmacy in Fresno has agreed to pay $27,500 to resolve allegations that it violated the Controlled Substances Act, U.S. Attorney McGregor W. Scott announced today. The settlement was reached in October, the sale of the pharmacy and its assets has recently been completed.

According to the settlement agreement, the Medicine Chest Pharmacy improperly dispensed Schedule III and IV drugs and committed multiple recordkeeping violations. The Medicine Chest’s owner has also agreed to divest herself from any ownership interest in the pharmacy and will refrain from owning or operating any pharmacy for a period of five years.

The settlement relates to a Drug Enforcement Administration (DEA) investigation of the Medicine Chest beginning in Sept. 2018. A DEA administrative audit and inspection of the Medicine Chest revealed that the Pharmacy had dispensed multiple prescriptions in violation of the Controlled Substance Act and California law, including some prescriptions using the improper DEA registration number and prescriber’s name. Investigators also found that the Medicine Chest failed to complete an initial inventory when issued a DEA registration number and kept inaccurate records. The pharmacy failed to document the date on which certain controlled substances were received on invoices for Schedule III – V drugs.

“Pharmacies are a critical link in the drug distribution chain,” said U.S. Attorney Scott. “They have an obligation to ensure that controlled substances are only dispensed in accordance with the law. They also must ensure that all drug transactions are properly documented and tracked to prevent drug diversion and abuse of powerful opioids and other potentially dangerous drugs. This settlement highlights our commitment to enforcing the Controlled Substances Act and protecting our citizens.”

“Accurate recordkeeping is an important part of the accountability chain in the distribution of controlled prescription drugs. When that chain is broken, it opens the door to the diversion of potentially addictive pharmaceuticals,” stated DEA Special Agent in Charge Daniel C. Comeaux. “DEA will continue to pursue those who do not carry out their due diligence, as required by law, to ensure compliance with the Controlled Substances Act.”

This settlement resulted from a coordinated effort by the Drug Enforcement Administration and the U.S. Attorney’s Office for the Eastern District of California. It was handled by Assistant U.S. Attorney Geoffrey D. Wilson.

The claims resolved by this settlement are allegations only. There has been no determination of liability.

FRESNO, Calif. — David Jahve Nin, 40, of Salida, was sentenced today by U.S. District Judge Lawrence J. O’Neill to 16 years and eight months in prison for receiving child pornography, U.S. Attorney McGregor W. Scott announced.

According to court documents, from approximately October 2014 through approximately July 2017, in Stanislaus County, Nin was found to have received through the internet over 200 videos of minors engaged in sexually explicit conduct. The videos also involved the portrayal of sadistic, masochistic, and other depictions of violence, and included depictions of minors as young as toddlers being sexually abused.

This case was the product of an investigation by both the Stockton, California and Phoenix, Arizona Offices of Homeland Security Investigations (HSI). Assistant U.S. Attorney Brian W. Enos prosecuted the case.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about internet safety education.

SACRAMENTO, Calif. — A federal grand jury returned an indictment on Jan, 16 against Bryan Paul Tamblyn, 36, of Sacramento, charging him with receipt of child pornography, U.S. Attorney McGregor W. Scott announced.

The indictment alleges that between July 4, 2018 and Aug. 20, 2019, Tamblyn knowingly received visual depictions of children engaging in sexually explicit conduct.

This case is the product of an investigation by the Sacramento Sheriff’s Department, and the Sacramento Internet Crimes Against Children Task Force, a federally and state-funded task force managed by the Sacramento Sheriff’s Department with agents from federal, state, and local agencies. Assistant U.S. Attorney Christina McCall is prosecuting the case.

If convicted, Tamblyn faces a maximum statutory penalty of 20 years in prison, a minimum sentence of five years in prison, up to a lifetime of supervised release following a custodial sentence, a $250,000 fine, and restitution to the victims of the offense. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

FRESNO, Calif. — A federal jury returned a verdict on Thursday finding Jose Roberto Arreola-Serrato, 31, of Tulare, guilty of a conspiracy to distribute methamphetamine and possession of methamphetamine with intent to distribute, U.S. Attorney McGregor W. Scott announced.

According to court documents and evidence produced at trial, Arreola-Serrato worked with other members of a Tulare County-based conspiracy to supply methamphetamine for a large-scale drug trafficking organization, which was responsible for distributing methamphetamine, cocaine, and heroin in California and Washington.

As the result of investigation, law enforcement seized a large amount of controlled substances, including 14 kilograms of methamphetamine, 2 kilograms of cocaine, and 1 kilogram of heroin.

Ten co-defendants charged in October 2015 pleaded guilty to various drug charges and have been sentenced to the following prison terms:  Olegario Trujillo, 33, of Fresno, 20 years; Edgar Valencia-Farias, of Tulare, four years; Gladys Ramos, 34, of Woodlake, four years; Carlos Tafoya-Ramos, 22, of Woodlake, six years; Marcos Diaz, 23, of Madera, 11 years; Ramiro Salas Munoz, 37, of Lindsay, time served (10 months); Arthur Allen Walker, 32, of Poplar, three years reduced to time served; Francisca Torres-Guisar, 51, of Visalia, three years; Gary Passmore, 65, of Washington state, three years and nine months in prison, and Jorge Martinez Jr., 23, of Tulare, four years.

Arrest warrants remain outstanding for Arnold Martinez Valencia, 39, of Woodlake, and Pedro Delgado-Montenegro, 36, of Porterville. The charges against them are only allegations, and they are presumed innocent until and unless proven guilty beyond a reasonable doubt.

This case is the product of a Central Valley High Intensity Drug Trafficking Area (HIDTA) investigation conducted by the Central Valley Marijuana Investigation Team (CVMIT). CVMIT was composed of Homeland Security Investigations (HSI), California Department of Justice-Bureau of Investigation, California Fish and Wildlife, Tulare County Sheriff’s Office, Kings County Sheriff’s Office, and Fresno County Sheriff’s Office. Assistant U.S. Attorneys Kathleen Servatius and Mira Chernick are prosecuting the case.

Arreola-Serrato will appear in district court for sentencing on April 10. Arreola-Serrato faces a mandatory minimum statutory penalty of 10 years and up to life in prison. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. — A federal grand jury returned a one-count indictment Thursday against Mario Gonzalez, 37, of Manteca, charging him with being a felon in possession of a firearm, U.S. Attorney McGregor W. Scott announced.

According to court documents, on Dec. 16, 2019, the Manteca Police Department found Gonzalez to be in possession of a loaded .45-caliber Ruger New Vaquero revolver. Gonzalez has six prior felony convictions, three of which are related to domestic violence.

This case is the product of an investigation by the Manteca Police Department, the San Joaquin District Attorney’s Office, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Michael W. Redding is prosecuting the case.

If convicted, Gonzalez faces a maximum statutory penalty of life in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime. To learn more about Project Safe Neighborhoods, go to www.justice.gov/psn.

This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see www.justice.gov.

SACRAMENTO, Calif. — The U.S. Attorney’s Office collected $104,469,755 in criminal and civil actions during the fiscal year ending Sept. 30, 2019, U.S. Attorney McGregor W. Scott announced today. Of this amount, $78,774,806 was in civil actions and $25,694,949 was in criminal actions.

This office worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $1,947,052 in cases pursued jointly by these offices. Of this amount, $1,928,713 was collected in civil actions and $18,339 was collected in criminal actions. Working with other partner agencies and divisions, the office collected $23,712,892 in asset forfeiture actions. These figures represent funds actually received during the year, not judgments or settlements that have not yet been paid.

“Financial recoveries are a critical part of our mission to protect the public treasury and hold those who violate the law accountable for the injury they cause,” said U.S. Attorney Scott. “Each year, our recoveries for victims and taxpayers dwarf the total cost of operating our office. We will continue to aggressively pursue compensation from those who commit crimes and other wrongs in our district, to take the profit out of crime and to ensure that wrongdoers—not the public—bear the costs of unlawful conduct. I am enormously proud of these recoveries and other great accomplishments this year by all the dedicated public servants who work in this office.”

Major recoveries during this period include: $50.5 million from Health Net Federal Services for false claims submitted to the Department of Veterans Affairs under a contract to provide veterans with health care, $13.4 million in fraud proceeds forfeited from NBA executive Jeff David and restored to the Sacramento Kings, $9 million from Kernen Construction Co. and Bundy & Sons Logging for damages caused by a fire that burned more than 1,600 acres of the Shasta-Trinity National Forest, and $10 million from BMO Harris Bank N.A. to resolve allegations that the bank violated the Financial Institutions Reform, Recovery and Enforcement Act by engaging in a fraud.

U.S. Attorneys’ Offices and the Justice Department’s litigating divisions enforce and collect debts owed to the United States and to victims of federal crimes. Federal law requires defendants convicted of certain crimes to pay restitution to the victims for physical injury or financial loss. Criminal fines and felony assessments are distributed by the Department of Justice Crime Victims’ Fund to state victim-compensation and victim-assistance programs. Assets recovered through forfeitures are used to restore lost funds to crime victims, to reimburse forfeiture-related investigative expenses, and for other law-enforcement purposes authorized by Congress.

Most civil recoveries were from enforcement actions seeking compensation and penalties for frauds on federal programs or federally insured financial institutions, negligent destruction of National Forest land by fire, and violations of federal health, safety, civil rights, or environmental laws. Recoveries in civil enforcement actions are used primarily to return taxpayer funds to defrauded programs and for restoration of damaged public resources.

FRESNO, Calif. — Erik Quiroz Razo (Quiroz), 28, an illegal alien from Michoacán, Mexico residing in Merced, was sentenced today to 21 months in prison for conspiring with others to assist Paulo Virgen Mendoza’s flight from California to Mexico after he allegedly committed a felony: the murder of Newman Police Corporal Ronil Singh during a traffic stop, U.S. Attorney McGregor W. Scott announced.

“The murder of a police officer in the line of duty is an assault on the entire community. This defendant, a convicted felon and previously deported alien, played a critical role in helping a man accused of killing a police officer to elude apprehension,” said U.S. Attorney Scott. “He disposed of the murder weapon, and he urged those close to him to not tell anyone about his activities. The successful prosecution of this defendant sends a message to the community that this behavior will not be tolerated.”

Last September, a jury found Quiroz guilty, along with Virgen Mendoza’s brother, Conrado Virgen Mendoza, 34, an illegal alien from Colima, Mexico, residing in Chowchilla. The evidence at trial established that Quiroz helped Paulo Virgen Mendoza conceal the truck that he was driving at the time of Corporal Singh’s murder, disposed of the firearm used to kill the officer, and lied to Stanislaus County Sheriff officers about Paulo’s whereabouts.

A court hearing for Conrado Virgen Mendoza has been scheduled for Jan. 21 where a sentencing date will be set for his involvement in the conspiracy to help his brother flee. He faces a maximum statutory penalty of five years in prison and a $250,000 fine for conspiring to aid in his brother’s flight from authorities. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

This case is the product of an investigation by Homeland Security Investigations and the Stanislaus County Sheriff’s Office with assistance from the Immigration and Customs Enforcement, Enforcement and Removal Operations; Central Valley High Intensity Drug Trafficking Area (HIDTA) task force; Southern Tri-County HIDTA; Bureau of Alcohol, Tobacco, Firearms, and Explosives; California Highway Patrol; California Department of Justice, the Sheriffs’ Offices for Kern, Merced, and Santa Cruz Counties; and the Police Departments for Merced, Turlock, Modesto, and Santa Cruz. Assistant U.S. Attorneys Karen A. Escobar, Laura D. Withers, and Michael G. Tierney are prosecuting the case.

SACRAMENTO, Calif. — Domingo Ene, 28; Joshua Hopoi, 24; and Raymond Su, 31, pleaded guilty today to conspiring to steal U.S. mail, U.S. Attorney McGregor W. Scott announced. Ene also pleaded guilty to possession of a stolen firearm.

According to court documents, from April 2018 to July 2018, the three men conspired to steal mail that was passing through Sacramento International Airport. All three defendants worked at Sacramento International Airport as employees of a company that provided ground services. Their positions involved handling baggage and mail. They loaded mail from the Sacramento area onto departing flights, as well as unloading incoming mail from arriving flights. The defendants stole mail, especially cash and gift cards, and they used the gift cards to make purchases. According to court documents, the defendants obtained at least 95 stolen gift cards and at least $3,295 in cash.

According to court documents, Ene also used his position as an employee at Sacramento International Airport to steal items from checked luggage. One of the items that he stole was a pistol that had been checked on a flight departing from Sacramento.

This case is the product of an investigation by the U.S. Postal Inspection Service with assistance from the Narcotics and Economic Crime Investigations Task Force, Roseville Police Department, Citrus Heights Police Department, Sacramento County Sheriff’s Department, and Sacramento Police Department. Assistant U.S. Attorney Miriam R. Hinman is prosecuting the case.

The defendants are scheduled to be sentenced by U.S. District Judge John A. Mendez on May 5. They face a maximum statutory penalty of five years in prison and a $250,000 fine for the conspiracy count. Ene also faces a maximum statutory penalty of 10 years in prison and a $250,000 fine for possession of the stolen firearm. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. — Ryan Guidry, 43, of Pleasant Hill, pleaded guilty today to participating in a massive fraud scheme involving a solar energy company in Benicia that defrauded investors of approximately $1 billion, U.S. Attorney McGregor W. Scott announced.

Those losses resulted from investment transactions in solar energy hardware valued at approximately $2.5 billion. Guidry also pleaded guilty to aiding and abetting money laundering. Guidry is the fourth person to plead guilty to federal criminal charges relating to the fraud scheme since October.

According to court documents, between 2011 and 2018, the solar energy company manufactured mobile solar generator units (MSG), solar generators that were mounted on trailers. The company touted the versatility and environmental sustainability of the MSGs and claimed that they were used by cellphone companies to provide emergency power to cell towers in the case of a power failure. They were also claimed to be used to power lights at sporting and other events.

The company solicited investors by claiming that there were very favorable federal tax benefits associated with investments in alternative energy. The company structured the transactions in order to maximize the tax benefits to the investors. Investors would buy the MSGs without ever taking possession of them. They would pay a percentage of the sales price and finance the balance with the company. Then the investors would lease the MSGs back to the company, which in turn leased them to third parties. A portion of the lease revenue would be used to pay the investors’ debts to the company and to the investors. The third‑party leases, however, generated little income and the company paid early investors with funds contributed by later investors.

According to court documents, Guidry joined the company in 2012 and became its Vice President of Operations. Guidry and his co-conspirators used fraudulent financial statements and other false information to hide from investors the company’s use of later investor payments to pay financial obligations the company made to earlier investors — in a classic Ponzi scheme. Additionally, Guidry accepted $1 million from a co-conspirator to obtain an unauthorized signature on a false contract his co-conspirator later used to induce investments by victims. In another instance, Guidry accepted $20,000 from that co-conspirator to obtain a signature on a related false contract, which the co-conspirator also used to induce an investment by victims. Guidry and another conspirator signed that second contract using a fake name and shared the $20,000. During the conspiracy, Guidry also worked with co-conspirators to frustrate certain investors’ inspections of MSGs to conceal from those investors the fact that the company had not built the MSGs it sold to those investors. For example, in advance of an inspection, Guidry and certain co-conspirators scraped off VIN number stickers identifying MSGs sold to one investor and replaced them with VIN number stickers identifying MSGs sold to a later investor. On another occasion, Guidry and his co-conspirators coordinated the delivery of MSGs to field inspection sites before and on the day of an inspection to trick the inspectors into believing those MSGs had been deployed at those sites all along, when they had not.

Joseph W. Bayliss, 44, of Martinez, and Ronald J. Roach, of Walnut Creek, each pleaded guilty to related charges on Oct. 22, 2019. Robert A. Karmann, 53, of Clayton, pleaded guilty to related charges on Dec. 17, 2019. The investigation into the fraud remains ongoing.

This case is the product of an investigation by the Federal Bureau of Investigation, IRS‑Criminal Investigation, and the Federal Deposit Insurance Corporation Office of Inspector General. Assistant U.S. Attorneys André M. Espinosa and Kevin C. Khasigian are prosecuting the case.

Guidry is scheduled to be sentenced by U.S. District Judge John A. Mendez on April 21. Guidry faces a maximum statutory penalty of 15 years in prison. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. — Juan Carlos Montalbo, 57, of San Antonio, Texas, pleaded guilty today to conspiracy to commit wire fraud in connection with a timeshare fraud in Mexico, U.S. Attorney McGregor W. Scott announced.

According to court documents, Montalbo, while working in the timeshare industry in Puerto Vallarta, Mexico, would tell timeshare owners that he could guarantee the sale of their existing timeshare vacation rentals, often to pay for other timeshare products Montalbo was attempting to sell them. He and his coconspirators would guarantee the sales and would represent that buyers were already arranged who were ready to pay for the timeshares. In truth, no buyers had actually been arranged. Instead, other coconspirators would convince the victims of the fraud to wire additional money from bank accounts in the United States and Canada to bank accounts in Mexico for alleged up-front payments including taxes, fees, and commissions to make the sale of the timeshare occur. The conspirators would assure victims that the non-existent buyers had already deposited money into trust accounts and that the sellers’ up-front fees would be fully reimbursed from those funds after the sale was complete.

This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Matthew G. Morris is prosecuting the case.

Montalbo is scheduled to be sentenced by U.S. District Judge John A. Mendez on April 21. Montalbo faces a maximum statutory penalty of 20 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

Co-defendant Marco Antonio Ramirez Zuno pleaded guilty in March 2017, and is scheduled for a status hearing regarding sentencing on March 17, 2020. Co-defendant Wayne Arthur York II pleaded guilty in November 2019, and is scheduled for a sentencing on March 3, 2020.

SACRAMENTO, Calif. — Elijah Richter, 28, of Camino, pleaded guilty today to distribution of a controlled substance known as 25I-NBOMe that caused death, U.S. Attorney McGregor W. Scott announced.

According to court documents, during September 2012, Richter imported hallucinogenic drugs, including a controlled substance known as 25I-NBOMe, from Europe to his residence in El Dorado County, by placing orders on his computer through Silk Road, a now-defunct “dark” website.

Through Silk Road, Richter was able to use bitcoin currency and an anonymous interface to execute drug deals. Shortly before Sept. 8, 2012, Richter imported a number of doses of 25I‑NBOMe from Europe. He then distributed some to Jesse Roberts, who in turn, distributed some to a juvenile male. The boy took four doses and died as a result of an overdose.

When a search warrant was served at Richter’s home, law enforcement officers recovered 2.61 grams of MDMA (Ecstasy), three digital scales, 3.81 grams of suspected hash oil, 42.25 grams of marijuana, 89 pink colored tabs of suspected 25I-NBOMe on paper, and seven additional tabs of suspected 25I-NBOMe in aluminum foil, as well as a handwritten list of drugs and their proper dosage units. Richter admitted to supplying the hits of 25I-NBOMe that killed the juvenile.

According to the plea agreement, Richter imported doses of 25I-NBOMe for the purpose of distributing that substance to others for human consumption and some of those doses ultimately were distributed to the juvenile in El Dorado County and lead to his overdose death.

The El Dorado County District Attorney’s Office prosecuted Roberts. He was convicted of involuntary manslaughter on March 3, 2017, and sentenced to six years in prison.

This case is the product of an investigation by the Drug Enforcement Administration, the El Dorado County Sheriff’s Office, and the El Dorado County District Attorney’s Office as part of an Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF Program was established in 1982 to conduct comprehensive, multilevel attacks on major drug trafficking and money laundering organizations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply. Assistant U.S. Attorneys Jason Hitt and Paul Hemesath are prosecuting the case.

Richter is scheduled to be sentenced by U.S. District Judge Kimberly J. Mueller on April 27. Richter faces a maximum statutory penalty of life in prison, a mandatory minimum sentence of 20 years in prison, and a $10 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. — A two-count indictment was unsealed yesterday that charges William Francis Stevens, 52, of San Joaquin County, with theft of government property and aggravated identity theft, U.S. Attorney McGregor W. Scott announced.

According to the indictment, beginning in January 2017, and continuing through July 2019, Stevens transferred, possessed, and used, without lawful authority, the name, date of birth, and social security number of his brother in connection with stealing government money, including benefits from the Social Security Administration.

This case is the product of an investigation by the Social Security Administration – Office of the Inspector General and the California Department of Health Care Services – Investigations Section. Special Assistant U.S. Attorney Robert J. Artuz is prosecuting the case.

On Dec. 12, 2019, a federal grand jury returned the indictment, which was sealed until Stevens’ arrest on Thursday in Stockton.

If convicted, Stevens faces a maximum statutory penalty of 12 years in prison and a $500,000 fine, including a mandatory two-year term of imprisonment. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — U.S. District Judge Troy L. Nunley sentenced Ricardo Gabriele-Plage, 39, to four years in prison for an identity theft scheme, U.S. Attorney McGregor W. Scott announced.

According to court documents, in 2017, Gabriele-Plage, a Venezuelan national, traveled to the United States for the purpose of stealing bank customers’ account information. During the course of the scheme, at least five times Gabriele-Plage and his co-conspirators placed skimming devices in ATMs and installed covert cameras to record ATM users’ personal identification numbers. While the skimmers were in place, hundreds of bank customers used the ATMs. Gabriele-Plage’s co‑conspirators used the stolen account information to create fraudulent credit and debit cards and make unauthorized charges.

On Aug. 5, 2017, Gabriele-Plage and co-defendant Luis Jose Ruiz Gainza, 45, a Venezuelan national then-residing in Mexico, were arrested in Sacramento County. During a subsequent search of their hotel room in Rancho Cordova, law enforcement found a magnetic stripe reader and encoder, skimmers, covert cameras, and tools used to repair skimmers and install the devices in ATMs.

This case was the product of an investigation by Homeland Security Investigations and the Sacramento County Sheriff’s Department. Assistant U.S. Attorney Brian A. Fogerty prosecuted the case.

On Nov. 21, 2019, Ruiz Gainza was sentenced to four and a half years in prison.

FRESNO, Calif. — Elfego Alcala, 47, Tamilene Cisneros, 49, and Aida Corona, 38, of Visalia, pleaded guilty today to conspiracy and production of false identification documents, U.S. Attorney McGregor W. Scott announced.

According to court documents, between Feb. 2018 and Aug. 8, 2018, the defendants conspired to produce and sell false identification documents. On March 12, 2018, they engaged in a transaction in which they manufactured and sold three false Lawful Permanent Resident (LPR or “green card”) and three false Social Security cards that appeared to be issued by and under the authority of the United States.

This case is the product of an investigation by Homeland Security Investigations. Assistant U.S. Attorney Laura D. Withers is prosecuting the case.

Co-conspirator Maria Elena Soriano Salinas, 58, previously pleaded guilty to the same offenses and to being a deported alien found in the United States. On Nov. 4, 2019, she was sentenced to 27 months in prison.

Alcala, Cisneros, and Corona are scheduled to be sentenced by U.S. District Judge Dale A. Drozd on March 27. They each face a maximum statutory penalty of 15 years in prison and a $25,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

FRESNO, Calif. — Joseph Vasquez Jr., 32, of Modesto, was sentenced today to 26 years and eight months in prison for an operation that distributed methamphetamine from Modesto to Juneau, Alaska, U.S. Attorney McGregor W. Scott announced.

According to court documents and evidence produced at trial, Vasquez was part of a drug trafficking organization operating in the Central Valley, Alaska, and Tacoma, Washington between Jan. 1, 2015, and April 11, 2018. As a result of the year-long investigation, 45 pounds of methamphetamine, 4 pounds of heroin and 3 pounds of cocaine were seized. On Oct. 3, 2019, after a three-day trial, a federal jury in Fresno found Vasquez guilty of conspiring to distribute methamphetamine and distribution of methamphetamine.

Five co-defendants charged on April 5, 2018, pleaded guilty to conspiracy to distribute and possess with intent to distribute controlled substances, including methamphetamine, cocaine, and heroin. Alecia Trapps, 56, of Manteca, is scheduled to be sentenced on March 30, 2020. Jimmy Brantley, 42, of Manteca, was sentenced on Oct. 28, 2019, to 10 years in prison. On Oct. 21, 2019, Carmen Conejo, 53, of Long Beach, was sentenced to five years of probation; Ernest Westley, 62, of Modesto, was sentenced to two years and eight months in prison; and Sheena Taylor, 41, of Modesto, was sentenced to 12.5 years in prison.

This case is the product of an investigation by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the United States Postal Inspection Service, Homeland Security Investigations, the Central Valley Gang Impact Task Force, Modesto Police Department, Manteca Police Department, California Highway Patrol, Stanislaus County District Attorney’s Office, Whatcom County Sheriff’s Department (Washington), Pierce County Sheriff’s Department (Washington), and Juneau Police Department (Alaska). Assistant U.S. Attorneys Melanie L. Alsworth and Laurel J. Montoya are prosecuting the case.

FRESNO, Calif. — A federal indictment was unsealed today that charges Jesus “Shotgun” Paniagua, 37, of Bakersfield, with being a felon in possession of a firearm and failing to register a firearm in the National Firearms Registry, U.S. Attorney McGregor W. Scott announced.

On Dec. 19, 2019, a federal grand jury returned the two-count indictment. According to court documents, on Oct. 4, Paniagua, a previously convicted felon, was found in possession of an unregistered 20 gauge shotgun that was less than 26 inches long in violation of federal law.

This case is the product of an investigation by the Bakersfield Police Department. Assistant U.S. Attorney Anthony Yim is prosecuting the case.

If convicted, Paniagua faces a maximum statutory penalty of 20 years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime. To learn more about Project Safe Neighborhoods, go to www.justice.gov/psn.

This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see www.justice.gov.

Criminal charges have been filed against multiple Mongolian Boys Society gang members in both the Fresno County Superior Court and in the United States District Court related to the murders of four (4) victims and the attempted murders of twelve (12) victims at a Sunday Night football watch party on the evening of November 17, 2019, the Fresno County District Attorney’s Office and the United States Attorney’s Office have announced.

The Federal Felony Complaint filed in U.S. District Court today alleges that Fresno residents Pao Vang, 30; Jhovanny Delgado, 19; and Johnny Xiong, 25, conspired to commit murder in aid of racketeering, in violation of Title 18, United States Code, Section 1959(a)(5).

According to the criminal complaint, on Nov. 17, 2019, members and associates of the Mongolian Boys Society conspired to commit murder. At a meeting, the defendants and others selected a target residence, chose shooters, provided them with guns, and drove to the target location. Vang, Delgado, and Xiong attended the meeting outlining the planned retaliation and understood that the objective was to murder individuals at the designated target residence. They were designated as lookouts and positioned themselves on street corners near the target residence to report the presence of law enforcement.

The partnership of federal agencies with local law enforcement is critical in the fight against violent crime. Federal agencies investigating this case are the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, Homeland Security Investigations, and the U.S. Marshals Service.

If convicted, the defendants face a maximum statutory penalty of 10 years in prison and a fine of up to $250,000. Any sentence, however, would be determined at the discretion of the court.

The Felony Complaint filed in Superior Court alleges that Ger Lee (27, of Fresno), Anthony Montes (27, of Fresno), Porge Kue (26, of Fresno), and Billy Xiong (25, of Fresno) committed the crimes of:

1. Four Counts of Murder [P.C. § 187(a)];
2. One Count of Conspiracy to Commit Murder [P.C. § 182/187(a)]; and
3. Twelve Counts of Attempted Murder [P.C. § 664/187(a)].

The murder charges also include two (2) special circumstances as to the four named defendants pursuant to Penal Code section 190.2 that allege:

            1.)  The defendants committed multiple murders [P.C. § 190.2(a)(3)]; and

            2.)  The murders were committed for the benefit of a criminal street gang [P.C. § 190.2(a)(22)].

That Complaint also contains the additional allegations that the four named defendants committed the crimes for the benefit of, at the direction of, or in association with a criminal street gang [P.C. § 186.22(b)], that they personally and intentionally discharged a firearm that caused great bodily injury or death [P.C. § 12022.53(d)], and that they personally and intentionally discharged a firearm [P.C. § 12022.53(c)].

If convicted of these charges in State Court, these defendants face a sentence of either Death or Life in Prison.  The District Attorney’s Office is currently conducting a necessary investigation, and will make a determination and announcement regarding the death penalty at a later date.

The Media may email [email protected] with questions.

The charges are allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

FRESNO, Calif. — A federal grand jury returned a 10-count indictment today against two Fresno residents, U.S. Attorney McGregor W. Scott announced.

Felipe Barajas, 25, was charged with interfering with commerce by robbery, brandishing a firearm in the commission of a violent crime, felon in possession of a firearm and ammunition, and possession of an unregistered firearm. Brittney Manzo, 24, is charged with two counts of interference with commerce by robbery.

According to court documents, between Oct. 30 and Nov. 21, 2019, Barajas robbed at gunpoint three commercial establishments in Fresno, and attempted to take money from one other. On Nov. 21, Manzo drove the vehicle in which Felipe Barajas fled after two of the incidents. Manzo led police on a pursuit and ultimately both she and Felipe Barajas were apprehended after the vehicle crashed and both attempted to run away.

The stores where the armed robberies were committed/attempted are: Oct. 30 — El Parian Grocery Market at 3804 E. Butler Ave., Fresno
Nov. 19 — Valley Gas & Mini Mart at 2139 S. Elm Ave., Fresno
Nov. 21 — Andres Liquor at 3953 N. Blackstone Ave., Fresno (attempted)
Nov. 21 — Star Smoke Shop at 453 N. Blackstone Ave., Fresno

This case is the product of an investigation by the Fresno Police Department with assistance from the Bureau of Alcohol, Tobacco and Firearms and Explosives. Assistant U.S. Attorney Stephanie Stokman is prosecuting the case.

If convicted, Barajas and Manzo face a maximum statutory penalty of 20 years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime. To learn more about Project Safe Neighborhoods, go to www.justice.gov/psn.

This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws.  Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see https://www.justice.gov.

FRESNO, Calif. — A federal grand jury returned a one-count indictment today against Mario Alberto Rangel, 28, of Fresno, charging him with unlawfully possessing a firearm after being convicted of a felony crime, U.S. Attorney McGregor W. Scott announced.

According to court documents, on Oct. 22, 2019, law enforcement officers attempted to stop Rangel for a traffic violation, but he failed to yield and fled in the vehicle at a high rate of speed. Out of concern for public safety, the officers ceased their pursuit but continued to drive in the direction that the vehicle had last been seen. Moments later, officers came upon a multiple vehicle collision involving Rangel’s vehicle. Rangel had exited his car and fled on foot but was eventually arrested. A loaded shotgun was found in the back seat of the vehicle that Rangel abandoned. Rangel is prohibited from possessing firearms because of his prior criminal record.

This case is the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Fresno Police Department. Assistant U.S. Attorney Justin J. Gilio is prosecuting the case.

If convicted, Rangel faces a maximum statutory penalty of 10 years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime. To learn more about Project Safe Neighborhoods, go to www.justice.gov/psn.

This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws.  Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see https://www.justice.gov.

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SACRAMENTO, Calif. — Kari Sonovich, 48, of Meadow Vista, was sentenced today to two years and three months in prison for an investment fraud scheme, U.S. Attorney McGregor W. Scott announced.

On Jan. 31, 2014, a federal grand jury returned a three-count indictment, charging Sonovich with mail fraud. According to court documents, between July 2008 and April 2009, Sonovich recruited investors to invest with her Las Vegas company, B&B Consulting Group LLC, by telling them that she could place their funds with an international trader who operated at an extremely high level, promising returns of up to 500% every 90 days. When investors deposited funds with her, Sonovich kept $454,000 of the funds for herself, even though she told the investors that all of their funds would be invested. No investor ever received the promised returns, and in most or all instances, no investor received any of their initial investment back.

Some investors in Sonovich’s scheme became involved at the same time that an earlier investment fraud scheme in which they had invested was collapsing. Anthony Vassallo, 40, and Kenneth Kenitzer, 76, ran that Folsom-based Ponzi scheme through their company Equity Investment Management & Trading (EIMT). Both were convicted for that scheme, Vassallo is serving a 16‑year prison sentence and Kenitzer was sentenced to 6 years in prison was released on July 5, 2019.

“The role of IRS - Criminal Investigation becomes even more important in Ponzi schemes and fraud cases due to the complex financial transactions that can take time to unravel,” said Kareem Carter, IRS - CI Special Agent in Charge, Oakland Field Office. ”The scheme targeted by Sonovich was conducted in a way that her victims suffered substantial financial losses. Today’s sentencing emphasizes the partnership between IRS and the U.S. Attorney’s Office and the pursuit of those who violate these types of federal laws.”

This case was the product of an investigation by IRS - Criminal Investigation. Assistant U.S. Attorneys Matthew Thuesen and Audrey B. Hemesath prosecuted the case.

SACRAMENTO, Calif. — Yaniv Gohar, 36, formerly of Berkeley, was sentenced today to three years and nine months in prison for conducting an illegal gambling business, conspiracy to commit money laundering, and failure to appear, U.S. Attorney McGregor W. Scott announced.

According to court documents, Gohar created and led an organization that installed and maintained video slot machines at businesses open to the public across Northern California. Gohar then created a system by which he could launder the proceeds of his lucrative gambling business, involving shell companies and paying cash to employees of a co-defendant’s business in exchange for money transfers from that co-defendant. In total, Gohar laundered at least $492,475 through that business from Jan. 2015 through Dec. 2017. Gohar also laundered his gambling proceeds by acquiring a boat and real estate in the San Francisco Bay Area.

Court documents also detail Gohar’s escape from the United States by charter jet through Mexico, France, and Israel. Gohar was first arrested on Dec. 8, 2017, in connection with his initial charges and released two weeks later on bond over the government’s objection. Four days later, he violated the terms of his release by failing to stop after allegedly crashing his Porsche Panamera into a parked car in Berkeley. He was cited by Berkeley police for reckless driving. On Jan. 3, 2018, he failed to appear in federal court for the violation hearing, and he remained at large for more than a year. In Sept. 2018, a superseding indictment charged Gohar with failure to appear and other offenses. Gohar was arrested and extradited from Israel in July 2019.

This case is the product of an investigation by the Federal Bureau of Investigation and California Department of Justice – Bureau of Gambling Control. Assistance was provided by the Department of Justice’s Office of International Affairs and Israeli authorities. Assistant U.S. Attorney Miriam R. Hinman is prosecuting the case.

Co-defendant Orel Gohar, 29, also fled the United States in Dec. 2017, was recently arrested in Israel and remains in Israel pending extradition to the United States. Co‑defendants Eran Buhbut, 34, of Oakland, and Raz Razla, 49, of Sherman Oaks, pleaded guilty await sentencing. The remaining co-defendants have pleaded guilty and have been sentenced.

SACRAMENTO, Calif. — A federal grand jury returned a seven-count indictment today against Frank Jonathan Guzman, 27, and Jose Cruz Ivan Aispuro, 34, both of Stockton, charging them with distributing heroin and fentanyl, possessing heroin and fentanyl for distribution, and conspiracy to do the same, U.S. Attorney McGregor W. Scott announced.

According to court documents, between November 2018 and November 2019, Guzman met with an undercover agent four times. During three of the meetings, he sold the agent heroin, and during the fourth meeting, Guzman sold the agent approximately 500 pills containing fentanyl. Surveillance units saw Guzman meeting with Aispuro before and/or after each transaction. In all, law enforcement bought over a pound of heroin and 500 fentanyl pills from Guzman. When agents searched Guzman’s and Aispuro’s homes on Dec. 11, they found over 9.7 pounds of heroin and approximately 10,000 fentanyl pills in Guzman’s home, and another 10.9 pounds of heroin in Aispuro’s home.

This case is the product of an investigation by the U.S. Drug Enforcement Administration. 

If convicted of the most significant charges, each defendant faces a mandatory minimum penalty of 10 years in prison, and a maximum penalty of life in prison and a $10 million fine. Any sentence would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account several variables. These charges are only allegations; the defendants are presumed innocent until proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — Marquez Jeter, 42, of Stockton, was sentenced today to seven years and eight months in prison for being a felon in possession of a firearm, U.S. Attorney McGregor W. Scott announced.

According to court documents, on March 13, Jeter sold a Glock pistol to a confidential informant in exchange for $1,200. On April 10, 2019, Jeter offered the confidential informant access to a new supply of firearms. The next day, Jeter sold him 15 guns for $16,500. Jeter is a previously convicted felon and cannot lawfully possess firearms.

This case was the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Michael W. Redding prosecuted the case.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime. To learn more about Project Safe Neighborhoods, go to www.justice.gov/psn.

This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws.  Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see https://www.justice.gov.

SACRAMENTO, Calif. — A federal grand jury returned a one-count indictment today against Jose Victor Rodriguez, 36, of San Leandro, charging him with possession with intent to distribute at least 50 grams of methamphetamine, U.S. Attorney McGregor W. Scott announced.

According to court documents, on Oct. 25, Rodriguez led Manteca police officers on a high‑speed car chase during which he reached speeds of 110 miles per hour and covered 11.5 miles in 7 minutes. He then ran from his vehicle and was seen carrying a black bag that was later recovered and found to contain approximately 84 grams of methamphetamine in multiple separate packages.

This case is the product of an investigation by the FBI, Manteca Police Department, and the San Joaquin County Sheriff’s Office. Assistant U.S. Attorney David Spencer is prosecuting the case.

If convicted, Rodriguez faces a maximum statutory penalty of 40 years in prison and a mandatory minimum of five years in prison, and a $5 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime. To learn more about Project Safe Neighborhoods, go to www.justice.gov/psn.

SACRAMENTO, Calif. — A federal grand jury returned a 10-count indictment today against nine defendants, charging them with various drug and firearms offenses, U.S. Attorney McGregor W. Scott announced.

The defendants are:

Jose Encarnacion Mayo Rodriguez, 32, of Lathrop;

Sylvia Zambrano, 56, of Lathrop;

Yesenia Lopez, 38, of Lathrop;

Maria Luisa Escamilla-Lopez, 39, of Stockton;

Juan Chavarria, 19, of Stockton;

Juan Ramon Lopez, 39, of Stockton;

Nereyda Alvarez, 32, of Stockton;

Phillip Allen Bailey, 48, of Stockton; and

Charles James Billingsley Jr., 51, of Stockton.

According to court records, Mayo led a drug trafficking organization in San Joaquin County that included several family members and associates. Mayo and his co-defendants met with an undercover agent five times between March and Oct. 2019 and sold undercover law enforcement officers heroin and methamphetamine. Law enforcement seized 28 pounds of methamphetamine and 2 pounds of heroin from co-defendant Yesenia Lopez during a traffic stop. On Dec. 5, agents executed search warrants at eight locations, which resulted in the seizure of over 44 pounds of methamphetamine, 10 pounds of heroin, 2 pounds of cocaine, 10 firearms, and $128,000 in cash.

This case is the product of an investigation by the U.S. Drug Enforcement Administration with assistance from the California Highway Patrol. 

This case was part of an Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF program was established in 1982 to conduct comprehensive, multi-level attacks on major drug-trafficking and money laundering organizations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.

If convicted of the most significant charges, each defendant faces a mandatory minimum penalty of 10 years in prison, and a maximum penalty of life in prison and a $10 million fine. Any sentence would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account several variables. These charges are only allegations; the defendants are presumed innocent until proven guilty beyond a reasonable doubt.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime. To learn more about Project Safe Neighborhoods, go to www.justice.gov/psn.

This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws.  Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see https://www.justice.gov.

SACRAMENTO, Calif. — As part the U.S. Attorney’s Office for the Eastern District of California’s strategy to reduce violent crime by focusing on firearms prosecutions, U.S. Attorney McGregor W. Scott announced that a federal grand jury returned indictments today in the following cases involving firearms offenses:

Roderick Darnell Harris, 45, of Fairfield, was charged with being a felon in possession of a firearm. According to court documents, on Oct. 19, police officers tried to stop Harris, who was riding his bicycle on the sidewalk in violation of a city ordinance. Harris disregarded the officer’s many requests to yield at first, but eventually stopped. A loaded 9 mm pistol was concealed in his jacket. Harris cannot lawfully possess firearms or ammunition because he has previously been convicted of five felony offenses.

This case is the product of an investigation by the Fairfield Police Department with assistance from the FBI’s Solano County Violent Crimes Task Force and the Solano County District Attorney’s Office. 

Fred Lavender, 44, of Stockton, was charged with being a felon in possession of a firearm. According to court documents, on Oct. 31, Lavender was arrested for a parole violation. In the car he had been driving, police officers found a Glock Model 23 handgun. Lavender has several prior convictions – including a misdemeanor conviction for domestic violence battery – which prohibit him from possessing a firearm.

This case is the product of an investigation by the San Joaquin County District Attorney’s Office, the Stockton Police Department, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Michael W. Redding is prosecuting the case.

Joshua Wayne Thompson, 25, of Vallejo, was charged with being a felon in possession of a firearm. According to court documents, on Nov. 18, Thompson had several outstanding warrants. When law enforcement officers saw Thompson in front of his home in Vallejo, they tried to apprehend him. Thompson got into a car and tried to flee, ramming a law enforcement vehicle in the process. When Thompson was arrested, he had a pistol with an extended magazine in his waistband. Thompson cannot lawfully possess firearms or ammunition because he has previously been convicted of a felony offense.

This case is the product of an investigation by U.S. Marshals Service, ATF, Vallejo Police Department, and California Highway Patrol.

Daniel Andrew Walker, 60, of Mount Shasta, was charged with being a felon in possession of a firearm. According to court documents, in April 2018, Walker filed a Petition for Certificate of Rehabilitation, seeking a court recommendation for a retroactive pardon of his prior felonies. As part of his application, Walker submitted a questionnaire in which he indicated that he did not possess any firearms. Walker has multiple felony convictions with both felony and misdemeanor convictions for domestic violence and is prohibited from possessing firearms. An ensuing investigation by the Siskiyou County District Attorney’s Office uncovered that Walker did in fact possess multiple firearms. In March 2019, law enforcement officers executed a search warrant at Walker’s home. In total, officers seized 39 firearms, including 10 weapons without serial numbers, six short-barreled AR-style rifles, multiple shotguns and handguns, and an improvised silencer.

This case is the product of an investigation by Siskiyou County District Attorney’s Office, California Department of Justice, Siskiyou County Sheriff’s Office, Siskiyou County Child Protection Services, and ATF. Assistant U.S. Attorney James Conolly is prosecuting the case.

If convicted, each of the defendants face a maximum statutory penalty of 10 years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime. To learn more about Project Safe Neighborhoods, go to www.justice.gov/psn.

This case is also part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws.  Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information-sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information, please see https://www.justice.gov.

SACRAMENTO, Calif. — David Sun, 65, of Davis, was sentenced today to three years and one month in prison for a scheme to fraudulently obtain California Class A and Class B commercial driver licenses (CDLs) for the students of his commercial driving school, U.S. Attorney McGregor W. Scott announced.

“He not only knowingly and willfully abused his position of trust for personal gain, but did so at the expense of others, in this document fraud scheme,” said Tatum King, special agent in charge, San Francisco, Homeland Security Investigations. “HSI will continue working with our law enforcement partners to identify and disrupt document fraud and bring to justice those involved in these illegal schemes.”

On Sept. 13, after a seven-day trial, a jury found Sun guilty of one count of conspiracy to commit unauthorized access of a computer and to produce identification documents without lawful authority, eight counts of production of identification documents without lawful authority, and one count of conspiracy to produce identification documents without lawful authority and to transfer identification documents produced without lawful authority.

According to court documents and evidence produced at trial, Sun operated a driving school named Commercial Driver Institute USA in the East Bay with a parking lot in Richmond. Sun primarily catered to Mandarin and Cantonese speaking students. He helped students get Class A or Class B commercial driver licenses that allowed them to drive large vehicles like tractor-trailer trucks and buses. Sun typically charged $2,500 to $6,500 per student.

Sun committed two different types of fraud: a testing conspiracy where Sun helped his California students fraudulently bypass the required written and/or behind the wheel driving tests to get commercial licenses, and a residency conspiracy where Sun recruited students from New York and helped them pose as California residents to get a California CDL. Sun would arrange for the licenses to be mailed to the students who had returned to their actual home state of New York.

Sun’s students struggled with the written tests because of their English language limitations so he helped them bypass the written testing requirements for learner’s permits. Those permits were issued from DMV’s Walnut Creek office under one employee’s login from at least November 2014 through January 2016. None of Sun’s students in the conspiracy or charged counts ever went to that Walnut Creek DMV office or passed the tests on the dates indicated in DMV’s records. Sun instructed his students to attempt the written tests, which they did at various DMV offices in the Bay Area. If they failed, Sun often took their DMV receipt, which would show their unique California DMV number, and a fraudulent permit would issue from the Walnut Creek DMV after fraudulent passing scores were entered under the Walnut Creek employee login.

On occasion, Sun provided his students with a Bluetooth device to wear during the driving test, and instructed them to wear a beanie to conceal it, so that Sun could tell the student what to say and do during the test. In addition, on many occasions Sun took his students to a particular licensing registration examiner at the DMV in Santa Rosa with whom Sun had a personal relationship. Evidence at trial showed that Sun was paid extra money to guarantee his students would pass the driving tests.

This case was the product of an investigation by the California Department of Motor Vehicles Office of Internal Affairs and Homeland Security Investigations. Assistant U.S. Attorneys Rosanne L. Rust and Christopher S. Hales prosecuted the case.

SACRAMENTO, Calif. — A federal grand jury returned an 11-count indictment today against Maurice “Buddy” Shoe, 57, formerly of Palo Cedro, charging him with embezzlement from his employees’ retirement funds and false statements regarding those retirement funds, U.S. Attorney McGregor W. Scott announced.

According to court documents, Shoe was the founder and CEO of Joined Inc., a corporation formerly based in Shasta County that provided student recruiting and retention services to Christian colleges and universities throughout the United States. The company provided a 401(k) retirement benefit plan for its employees. From February through November 2015, Shoe embezzled approximately $122,832 from the employee retirement benefit fund, protected under the Employee Retirement Income Security Act of 1974 (ERISA), by withholding funds from employees’ paychecks for 401(k) contributions, but failing to forward those contributions to the 401(k) plan. Shoe also made false statements on a form required under ERISA as to whether there had been a failure to forward participant contributions during the 2015 plan year.

This case is the product of an investigation by the U.S. Department of Labor – Employee Benefits Security Administration, San Francisco Regional Office. Assistant U.S. Attorney Shea J. Kenny is prosecuting the case.

If convicted, Shoe faces a maximum statutory penalty of five years in prison and a $250,000 fine as to each count. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — Abhijit Prasad was sentenced today to three years in prison for visa fraud and aggravated identity theft. In addition, the Honorable Charles R. Breyer, U.S. District Judge in the Northern District of California, ordered the forfeiture of $1,193,440.

The case originated in Sacramento when the grand jury there indicted Prasad in 2016, but the case was ultimately tried in San Francisco following a court order transferring the case. U.S. Attorney David Anderson for the Northern District of California and U.S. Attorney McGregor W. Scott for the Eastern District of California made the announcement.

Prasad, 52, was found guilty by a jury on Aug. 5 of 19 counts of visa fraud, two counts of fraudulent obtainment of foreign visas, and two counts of aggravated identity theft. According to the evidence at trial, Prasad filed 19 petitions for H-1B nonimmigrant visas containing false statements, made under penalty of perjury, as to purported work projects to be performed at locations in California, including Cisco Systems. The evidence at trial showed that Cisco had no expectation that the foreign workers who were the beneficiaries of the visa petitions would actually work at Cisco on an existing work project. The evidence at trial further showed that the defendant knowingly submitted forged Cisco documents to United States Citizenship and Immigration Services in support of his claims that the beneficiaries would work at Cisco.

Finally, the evidence at trial showed that Prasad fraudulently used the digital signature of a Cisco employee, who was not authorized to sign Cisco employment documents, to create a document that would leave the impression that two of the H-1B workers had an existing work project at Cisco. Prasad obtained two of the H-1B visas using this fraudulent document that purports to be a fully executed Cisco contract.

The case is the product of an investigation by the U.S. Department of State, Diplomatic Security Service’s representative to the Document and Benefit Fraud Task Force (DBFTF), overseen by Homeland Security Investigations. The DBFTF is a multi-agency task force that coordinates investigations into fraudulent immigration documents. U.S. Citizenship and Immigration Service’s Office of Fraud Detection and National Security also assisted with the investigation. Assistant U.S. Attorneys Audrey B. Hemesath and Michael A. Rodriguez prosecuted the case. Assistant U.S. Attorney Karen D. Beausey handled the forfeiture.

SACRAMENTO, Calif. — Peter Wong, 61, founder and former CEO of Sunrise Shoes and Pedorthic Service Corporation, was sentenced Tuesday by U.S. District Judge John A. Mendez to five years in prison for health care fraud and conspiracy to commit wire fraud, U.S. Attorney McGregor W. Scott announced.

According to court documents and evidence presented at trial, between March 2008 and Feb. 2015, Wong and Anthony Lazzarino, 69, former Chief of Podiatry for the Veterans Affairs’ (VA) Northern California Health Care System, engaged in a scheme to defraud the VA by billing for custom work and services that were prescribed but not supplied in shoes delivered to veterans. In addition, they and Wong’s former employee Jai Aing Chen, who separately pleaded guilty on Dec. 6, 2016, agreed to make materially false statements to the VA regarding where the shoes were manufactured, in the course of applying for a national contract worth over $11 million per year. A federal jury found Wong and Lazzarino guilty of health care fraud and conspiracy to commit wire fraud on May 17, 2019.

This case is the product of an investigation by the Department of Veterans Affairs Office of Inspector General, Department of Veterans Affairs Police Service, Homeland Security Investigations, and Federal Bureau of Investigation. Assistant U.S. Attorney Lee S. Bickley is prosecuting the case.

Lazzarino is scheduled to be sentenced by Judge Mendez on Feb. 11, 2020. He faces a maximum statutory penalty of 10 years in prison and a $250,000 fine for each health care fraud count, and five years in prison and a $250,000 fine for the wire fraud conspiracy count. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. Mendez sentenced Chen to one year and one day in prison on Aug. 6, 2019.

FRESNO, Calif. — Rocky Cottrell, 37, a former resident of Clovis, was sentenced on Dec. 6 by U.S. District Judge Dale A. Drozd to 20 years in prison, to be followed by 15 years of supervised release, for production of child pornography, U.S. Attorney McGregor W. Scott announced.

According to court documents, between Jan. 2016 and Aug. 2016, Cottrell persuaded two minors to engage in sexually explicit conduct and produced visual depictions of that conduct. In addition, Cottrell transmitted some of the images via the internet.

This case was the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Michael Tierney and Laura Withers prosecuted the case.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about internet safety education.

SACRAMENTO, Calif. — Robert A. Karmann, 53, of Clayton, pleaded guilty today to his participation in a massive fraud scheme involving a solar energy company in Benicia that defrauded investors of approximately $1 billion, U.S. Attorney McGregor W. Scott announced.

Those losses resulted from investment transactions in solar energy hardware valued at approximately $2.5 billion. Karmann is the third person to plead guilty to federal criminal charges relating to the fraud scheme since October.

According to court documents, between 2011 and 2018, the solar energy company manufactured mobile solar generator units (MSG), solar generators that were mounted on trailers. The company touted the versatility and environmental sustainability of the MSGs and claimed that they were used by cellphone companies to provide emergency power to cell towers in the case of a power failure. They were also claimed to be used to power lights at sporting and other events.

The company solicited investors by claiming that there were very favorable federal tax benefits associated with investments in alternative energy. The company structured the transactions in order to maximize the tax benefits to the investors. Investors would buy the MSGs without ever taking possession of them. They would pay a percentage of the sales price and finance the balance with the company. Then the investors would lease the MSGs back to the company, which in turn leased them to third parties. A portion of the lease revenue would be used to pay the investors’ debts to the company and to the investors. The third‑party leases, however, generated little income and the company paid early investors with funds contributed by later investors.

According to court documents, Karmann, a certified public accountant, joined the company in 2014 and became its Chief Financial Officer (CFO). Karmann and his co-conspirators used fraudulent financial statements and other false information to hide from investors the company’s use of later investor payments to pay financial obligations the company made to earlier investors—in a classic Ponzi scheme. In his role as CFO, Karmann managed and directed the periodic transfers of new investor money to pay the company’s obligations to existing investors. Karmann also disseminated false financial and other information to investors to mislead them about material aspects of the MSG investments. Karmann’s criminal conduct was intended to create the false impression for investors that the MSG investments were operating as promised, which helped lull existing investors, lured prospective investors, and caused investors to seek more than $1 billion in tax benefits from the Internal Revenue Service to which they were not entitled. Karmann also pleaded guilty to securities violations associated with the same investment fraud scheme.

On Oct. 22, Joseph W. Bayliss, 44, of Martinez, and Ronald J. Roach, of Walnut Creek, each pleaded guilty to related charges. The investigation into the fraud is ongoing.

This case is the product of an investigation by the Federal Bureau of Investigation, IRS‑Criminal Investigation, and the Federal Deposit Insurance Corporation Office of Inspector General. Assistant U.S. Attorneys André M. Espinosa and Kevin C. Khasigian are prosecuting the case.

Karmann is scheduled to be sentenced by U.S. District Judge John A. Mendez on March 31, 2020. Karmann faces a maximum statutory penalty of 15 years in prison. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. — On Thursday, Dec. 12, a federal jury returned indictments against six defendants who made false claims for benefits in connection with the 2018 Camp Fire and received funds from FEMA to compensate for their losses, U.S. Attorney McGregor W. Scott announced.

U.S. Attorney Scott stated: “In 2018, in the aftermath of the Carr Fire and Camp Fire, we encouraged the public to report any suspected fraudulent activity and promised to aggressively pursue and prosecute fraud and abuse. Today we are announcing federal charges against individuals who abused the goodwill of the taxpayers and claimed losses that they had not incurred. These investigations are ongoing, and we are not done holding people accountable for fraudulent claims.”

Amanda Thandi, Special Agent in Charge Department of Homeland Security, OIG, Office of Investigations, of the San Diego Field Office stated: “The Department of Homeland Security (DHS), Office of Inspector General (OIG) remains committed to eradicating these and other cases of disaster fraud. As a result of the recent indictments, these individuals will no longer benefit from illegally manipulating the programs designed for assessing the critical needs, home repairs, replacement of personal property, and shelter for persons displaced from their residences due to the California wildfires.”

“Disaster fraud re-victimizes communities devastated physically and emotionally by natural disaster by diverting federal funds from communities and stealing from the victims with significant needs. This is why the FBI is committed to working closely with our local, state, and federal partners to identify and investigate allegations of fraud related to disaster recovery and we want people to both protect themselves and report fraud as it is discovered,” said Special Agent in Charge Sean Ragan of the FBI Sacramento Field Office. “Together, we continue to aggressively pursue those who prey upon innocent victims of natural disasters and the people who want to help them.”

On Nov. 8, 2018, the “Camp Fire” started in Butte County and burned for approximately 18 days. It burned approximately 153,336 acres, destroyed approximately 13,972 residential structures and caused approximately 85 deaths. The Camp Fire is known as the deadliest and most destructive wildfire in California history. On Nov. 12, 2018, the President declared that a major disaster existed in California, and as a result of this declaration, some residents of Butte County who were affected by the fire were eligible to apply for disaster assistance from FEMA.

FEMA provides Direct Housing Assistance to eligible applicants, such as a manufactured home or trailer for use as temporary housing. FEMA also may provide rental assistance to rent alternative housing accommodations. This assistance is available to eligible individuals whose primary residence was damaged or destroyed by the fire regardless of whether they own or rent the home. In certain circumstances, residents can also receive benefits to replace or repair personal property (including standard appliances, essential clothing, standard room furnishing, and essential tools) damaged or destroyed due to a disaster.

The following defendants have been charged with one count of fraud in connection with a major disaster or emergency benefit. According to the charges, they each falsely claimed that a residence in Paradise that had been destroyed in the fire was their primary residence.

Deborah Laughlin, 64, falsely claimed 7209 Skyway, Apt 18 in Paradise as her primary residence and received $9,674.70 in benefits and a FEMA trailer. According to court documents, on Nov. 3, 2018, Laughlin was arrested at her residence in Willows and remained in jail until Nov. 13, 2018, which was several days after the Camp Fire began.

Evan Palmer, 30, of Chico, falsely claimed 4440 Clark Road, #1 in Paradise as his primary residence and received $26,490.67 for his travel trailer that was destroyed in the fire. His primary residence, however, was in Chico.

Kristy Marie Tapp, 34, falsely claimed 5152 Pentz Road in Paradise as her primary residence and received $3,263.91 in benefits. She filed her application for assistance after the Butte County Sheriff had issued a public notification identifying a couple, aged 67 and 70, as deceased victims of the fire. Tapp falsely claimed they were her landlords.

Patrick Prigmore, 54, falsely claimed 1040 Pearson Road in Paradise as his primary residence and received $12,837.71 in benefits and a FEMA trailer.

Two indictments remain sealed.

These cases are the result of investigations by the Department of Homeland Security, Office of Investigations and the Federal Bureau of Investigation. Assistant U.S. Attorney Shelley Weger is prosecuting the cases.

If convicted, the defendants face up to 30 years in prison and a fine of up to $250,000. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

The U.S. Department of Justice established the National Center for Disaster Fraud (NCDF) to investigate, prosecute, and deter fraud in the wake of Hurricane Katrina, when billions of dollars in federal disaster relief poured into the Gulf Coast region. Its mission has expanded to include suspected fraud from any natural or manmade disaster. More than 20 federal, state, and local agencies participate in the NCDF, which allows the center to act as a centralized clearinghouse of information related to disaster relief fraud.

California residents are encouraged to watch for and report any suspicious activity or potential fraud from scam artists, identity thieves, and other criminals who may try to prey on vulnerable survivors of this disaster. Anyone with knowledge of fraud, waste, or abuse may call the Federal Emergency Management Agency’s (FEMA) Disaster Fraud Hotline at (866) 720-5721 or report it to the Federal Trade Commission at ftccomplaintassistant.gov. You may also send an email to [email protected].

FRESNO, Calif. — Francisco Fernandez, 26, of Earlimart, was sentenced today to two and a half years in prison for possessing with the intent to distribute cocaine and possession of an unregistered firearm, U.S. Attorney McGregor W. Scott announced.

According to court documents, a search warrant was executed at Fernandez’s residence in April 2019. During the search, federal agents found and seized scales, drug paraphernalia and cocaine. Fernandez admitted to possessing the cocaine for sale to others. Apart from the narcotics, federal agents also found “auto-sear” devices that are used to convert semi-automatic firearms to fire as fully automatic machineguns. In a subsequent search of Fernandez’s storage unit, agents located and seized several firearms, which included a Glock handgun that Fernandez had converted into a machine gun.

Tulare County District Attorney Tim Ware stated, “We are extremely grateful for this partnership that takes violent offenders away from the communities they victimized. Tulare County streets are safer because of Project Safe Neighborhoods.”

This case was the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Homeland Security Investigations (HSI), and the Tulare County District Attorney’s Office. Assistant U.S. Attorney Thomas Newman is prosecuting the case.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime. To learn more about Project Safe Neighborhoods, go to www.justice.gov/psn.

FRESNO, Calif. — Forrest Awbrey, 29, formerly of Fresno, was sentenced today to 10 years in prison for receipt and distribution of child pornography, U.S. Attorney McGregor W. Scott announced.

The sentence imposed includes a lifetime term of supervised release during which, Awbrey’s access to minors, computers, and the internet will be restricted. He will also be required to register as a sex offender. A hearing has been scheduled for March 13, 2020, to address restitution to victims.

According to a criminal complaint, Awbrey was detected by law enforcement investigators when he was sharing numerous child pornography files on a BitTorrent file-sharing network from August through November 2016. He admitted to investigating agents that he had used file‑sharing programs for several years to obtain child pornography. He also admitted that he had attempted to make surreptitious video recordings of females using bathrooms in his home and at his church and that he had unsuccessfully attempted to take photos of young girls by holding a camera underneath their skirts.

This case was the product of an investigation by the FBI. Assistant U.S. Attorney David Gappa prosecuted the case.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about internet safety education.

FRESNO, Calif. — A federal grand jury returned a three-count indictment on Thursday, Dec. 12 against Joseph D. Sanford, 72, of Ceres, charging him with offenses involving cockfighting, U.S. Attorney McGregor W. Scott announced.

Sanford was arrested at his place of business this morning and will be arraigned in Fresno at 2:00 p.m. today.

According to court documents, Sanford is charged with conspiring to violate the Animal Welfare Act, unlawfully possessing animals for an animal fighting venture, and unlawfully selling animals for an animal fighting venture. The indictment seeks the forfeiture of thousands of game fowl at his business, Joe Sanford Gamefarm.

According to court documents, Sanford is the owner and operator of Joe Sanford Gamefarm, a 10.26 acre property in Ceres, where he breeds and sells gamecocks for cockfighting. Sanford also fights his own roosters. Following an undercover purchase of a trio of fighting birds, law enforcement officers searched Joe Sanford Gamefarm, where Sanford resides, and found a large cockfighting enterprise consisting of 2,956 game fowl. It is alleged in the indictment that Sanford was involved in the interstate shipments of game fowl. It is also alleged that Sanford acquired and maintained medical equipment, such as scalpels, syringes, thermometers, and medications for conditioning roosters and surgically altering them by removing their wattles, combs, spurs and other body parts.

This case is the product of an investigation by the U.S. Department of Agriculture, Office of Inspector General (USDA-OIG); the USDA Animal and Plant Health Inspection Service; the IRS Criminal Investigation; the U.S. Marshal Service; Homeland Security Investigations; the U.S. Forest Service; the Humane Society of the United States; the Stanislaus County Sheriff’s Office; the Placer County Animal Services, and the El Dorado County Animal Services. The Environmental Crimes Section of the U.S. Department of Justice also lent assistance. Assistant U.S. Attorney Karen A. Escobar is prosecuting the case.

If convicted, Sanford faces a maximum statutory penalty of five years in prison and a $250,000 fine as to each count. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — A federal grand jury returned a three-count indictment Thursday, Dec. 12 against Christopher Espinoza, 27, of Carmichael, charging him with two counts of sexual exploitation of a minor and one count of possession of child pornography, U.S. Attorney McGregor W. Scott announced.

According to court documents, in 2018, Espinoza sexually exploited two minor victims, and on Jan. 11, 2019, he was found in possession of several electronic devices that contained child pornography.

Espinoza was arrested and is currently in custody. On Dec. 13, he was arraigned and entered a plea of not guilty.

This case is the product of an investigation by the Internet Crimes Against Children Task Force, a federally and state-funded task force managed by the Sacramento Sheriff’s Office with agents from federal, state, and local agencies. The Sacramento ICAC investigates online child exploitation crimes, including child pornography, enticement, and sex trafficking. Assistant U.S. Attorney Roger Yang is prosecuting the case.

If convicted, Espinoza faces a maximum statutory penalty of 30 years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about internet safety education.

FRESNO, Calif. — On Thursday, a federal jury convicted Marcela Heredia, 46, of Riverside, of seven counts of wire fraud, four counts of aggravated identity theft, and one count of making a false tax return, U.S. Attorney McGregor W. Scott announced.

According to court documents and evidence introduced at trial, Heredia worked at the Fresno Economic Opportunities Commission’s Transitional Living Center, which houses at-risk youth, until 2014. Heredia also worked at the IRS as a Tax Examiner between 2008 and 2014. While working at the Transitional Living Center, Heredia stole residents’ personal identifying information and filed numerous tax returns that included false wage and withholding information, false educational expenses, and other false entries. Heredia directed the refunds for those returns to her personal bank account, spending the money on various personal expenses. Heredia failed to report any of the refund money she directed into her account on her 2011 tax return.

“Heredia misused her position of trust as a Youth Care Specialist to feed her greed by stealing the identities of the young homeless adults she cared for and using those identities to file fraudulent tax returns,” said Kareem Carter, Special Agent in Charge of the Oakland Field Office, IRS-CI. “Heredia then secured the fraudulent refunds and deposited them into her own bank account for her personal use. The IRS remains committed to the pursuit of identity theft and, together with our partners at the U.S. Attorney’s Office and Tax Inspector General for Tax Administration, we will hold those who engage in similar conduct accountable.”

This case is the product of an investigation by the U.S. Department of the Treasury Inspector General for Tax Administration and IRS Criminal Investigation. Assistant U.S. Attorneys Laura D. Withers and Vincente A. Tennerelli are prosecuting this case.

Heredia is scheduled to be sentenced on March 27, 2020. She faces a maximum statutory penalty of 20 years in prison and a $250,000 fine for wire fraud, a mandatory minimum of two years in prison to be served consecutive to any other sentence for aggravated identity theft, and up to three years in prison and a $250,000 fine for making a false tax return. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. — Today, U.S. District Judge John A. Mendez sentenced Gustavo Araujo Lerma, 64, a Sacramento resident, to three years and nine months in prison for aggravated identity theft, passport fraud, and voting by an alien, U.S. Attorney McGregor W. Scott announced.

“In 1992, Araujo Lerma began fraudulently using the identity of a living United States citizen. He used that identity to commit a long list of other crimes, lying to numerous local, state and federal agencies, and abusing government programs,” U.S. Attorney Scott stated. “Today’s sentence serves to protect the public’s confidence in the immigration system, passport security, and federal elections and will deter others from perpetrating this type of fraud.”

“Today’s sentencing sends a strong message that the Diplomatic Security Service, in partnership with the U.S. Attorney’s office, is committed to successfully prosecuting those criminals who perpetrate U.S. passport fraud,” said Matthew Perlman, Special Agent in Charge of DSS’s San Francisco Field Office.

According to court documents and evidence presented at trial, Araujo Lerma was born in Mexico in 1955. In the early 1990s he acquired and began fraudulently using the identity of a United States citizen named Hiram Velez. Araujo Lerma unlawfully obtained U.S. passports with the stolen identity and used the passports to fly back and forth to his hometown in Leon, Mexico. He lied on immigration applications to obtain legal permanent resident status and eventually United States citizenship for his Mexico-born wife and two children. In addition, he voted in numerous federal elections over the past 20 years. After a three-day trial, a jury convicted Araujo Lerma on all counts.

This case was the product of an investigation by the U.S. Department of State’s Diplomatic Security Service. Assistant U.S. Attorneys Katherine T. Lydon and Shea J. Kenny prosecuted the case.

SACRAMENTO, Calif. — Pamela Emanuel, 59, of San Jose, pleaded guilty today for her role in a scheme to defraud the state of California by filing false unemployment insurance claims, U.S. Attorney McGregor W. Scott announced.

Emanuel pleaded guilty to mail fraud and aggravated identity theft. According to court documents, Emanuel worked as a tax compliance representative for the California Employment Development Department (EDD) and had access to the personal identifying information of workers throughout California. Between July 22, 2015, and July 14, 2016, Emanuel and her co-conspirators used that information to file fraudulent unemployment claims in the names of the unknowing victims.

In total, the conspirators filed at least 269 false claims seeking over $2.4 million in fraudulent benefits. EDD’s actual overpayment was approximately $887,199.

“Pamela Emanuel stole information from the Employment Development Department database, thereby violating the public trust afforded to her as a California government employee. The stolen information was then used in a conspiracy to file fraudulent unemployment insurance claims. We will continue to work with our federal and state law enforcement partners to safeguard unemployment compensation benefits programs for those who need it,” said Quentin Heiden, Special Agent-in-Charge of the U.S. Department of Labor Office of Inspector General, Los Angeles Region.

This case is the product of an investigation by the U.S. Department of Labor Office of Inspector General, the Federal Bureau of Investigation and the California Employment Development Department, Investigations Division. Assistant U.S. Attorney Amy Schuller Hitchcock is prosecuting the case.

Four other co-conspirators have pleaded guilty and have been sentenced in relation to this scheme. On Aug. 16, 2018, Brittany Maunakea, 30, was sentenced to two and a half years in prison and ordered to pay $139,071 in restitution. On Sept. 20, 2018, Sergio Doriante Sanchez Reyna, 26, was sentenced to four years and three months in prison and ordered to pay $436,091 in restitution. On Feb. 22, 2019, Gregory Lee, 57, of Antioch was sentenced to nine years in prison and ordered to pay $353,458 in restitution. On Sept. 19, Russell White III, 38, of San Jose, was sentenced to four years and three months in prison and ordered to pay $212,071 in restitution.

Emanuel is scheduled to be sentenced on March 19, 2020. She faces a maximum statutory penalty of 20 years in prison and a fine of up to $250,000 for mail fraud, and a mandatory consecutive sentence of two years in prison and a fine of up to $100,000 for aggravated identity theft. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. — On Dec. 5, a federal grand jury brought a 14-count indictment against a physician, Edmund Kemprud, of Dublin, charging him with prescribing opioids to patients outside the usual course of professional practice and not for legitimate medical purpose, U.S. Attorney McGregor W. Scott announced.

According to court documents, Kemprud was a physician licensed to practice medicine in California and maintained a medical practice in Dublin and Tracy. On 14 occasions between Sept. 6, 2018 and March 13, 2019, Kemprud allegedly prescribed highly addictive, commonly abused prescription drugs, including Hydrocodone, Alprazolam, and Oxycodone – outside the usual course of professional practice and not for legitimate medical purpose. The controlled substances affect the central nervous system and may only be prescribed when medically required. Kemprud was arrested today and pleaded not guilty at his arraignment.

U.S. Attorney Scott stated: “Diversion of drugs with a legitimate purpose to those who abuse them or sell to abusers is a costly and dangerous enterprise. Fortunately, with the cooperative efforts of our state and local partners, we have the ability to track powerful prescription drugs and find those who attempt to divert them. The U.S. Attorney’s Office has made it a top priority to prosecute those who engage in prescription drug diversion.”

“Doctors who violate their position of trust must be held accountable,” said California Attorney General Xavier Becerra. “Prescription drug diversion and the resultant abuse has led to a public health crisis that affects communities and families across California and the nation. It takes all of us working together to combat this epidemic and heal our communities. Our office and special agents will continue to work with our federal, state, and local partners to investigate and prosecute bad actors. At the California Department of Justice, we stand ready to use the tools at our disposal to protect our communities.”

“Doctors take an oath to ‘first, do no harm.’ Prescribing powerful opiates without legitimate medical purpose violates that principle and the law. It places profits above patient welfare and the community suffers the consequences,” stated DEA Acting Special Agent in Charge William C. Fallin. “DEA and our counterparts will continue to work diligently to hold accountable those fueling the prescription drug crisis.”

“When doctors prescribe powerful and dangerous drugs for illegitimate purposes, the results can be deadly,” said Steven J. Ryan, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “Working closely with our Federal and State law enforcement partners, we continue fighting to protect beneficiaries, government healthcare programs, and taxpayers picking up the bills.”

This case is the product of an investigation by the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse Drug Diversion Team, the Drug Enforcement Administration, and the Office of Inspector General for the United States Department of Health and Human Services. Assistant U.S. Attorney Vincenza Rabenn is prosecuting the case.

If convicted, Kemprud faces a maximum statutory penalty of 20 years in prison. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — A federal grand jury returned an indictment on December 5, against Timothy Allen Horwath, 50, of Redding, charging him with receipt of child pornography, U.S. Attorney McGregor W. Scott announced.

According to court documents, between Feb. 25 and Oct. 10, Horwath knowingly received visual depictions of children engaging in sexually explicit conduct. Horwath was arrested today at his residence and made his initial appearance before U.S. Magistrate Judge Allison Claire.

This case is the product of an investigation by the California Highway Patrol’s Computer Crime Investigation Unit, the Federal Bureau of Investigation, and the Sacramento Internet Crimes Against Children Task Force, a federally and state-funded task force managed by the Sacramento Sheriff’s Department with agents from federal, state, and local agencies. Assistant U.S. Attorney Christina McCall is prosecuting the case.

If convicted, Horwath faces a maximum statutory penalty of 20 years in prison, a fine of up to $250,000, and restitution to the victims of the offense. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about internet safety education.

SACRAMENTO, Calif. — Laboratory Boston Heart Diagnostics Corporation (Boston Heart), of Framingham, Massachusetts, has agreed to pay $26.67 million to resolve False Claims Act allegations involving payments for patient referrals in violation of the Anti-Kickback Statute and the Stark Law and claims otherwise improperly billed to federal health care programs for laboratory testing, U.S. Attorney McGregor W. Scott announced today.

The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs. The Stark Law forbids a laboratory from billing Medicare and Medicaid for certain services referred by physicians that have a financial relationship with the laboratory. The Anti-Kickback Statute and the Stark Law are intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.

The settlement resolves allegations that Boston Heart provided physician practices with in-office dieticians in exchange for physician referrals for laboratory testing. These allegations were originally made in a case filed in the Eastern District of California under the whistleblower, or qui tam, provision of the False Claims Act. The Act permits private parties to sue for fraud on behalf of the United States and to share in any recovery. The settlement also resolves allegations that Boston Heart directly or indirectly paid processing and handling fees and waived patient copayments and deductibles. These allegations were originally made in the District of Columbia under the Act. Whistleblowers Chris Riedel and Claudia Bradshaw will receive approximately $4.36 million of the settlement.

In addition, the settlement resolves allegations that Boston Heart conspired with others to pay doctors kickbacks disguised as investment returns and conspired with certain Texas hospitals and others to submit claims for outpatient laboratory testing for patients who were not hospital outpatients, in order to receive higher reimbursements from federal health care programs.

“This office will continue to take all appropriate action to prevent improper inducements that can corrupt the integrity of physician decision-making,” said U.S. Attorney Scott.

The civil settlement was the result of an investigation by the U.S. Attorney’s Offices for the Eastern District of California, the Eastern District of Texas, and the District of Columbia, along with the Commercial Litigation Branch of the Justice Department’s Civil Division, OIG-HHS, and DCIS. The two lawsuits are captioned United States ex rel. FBH1 LLC v. Boston Heart Diagnostics Corp., No. 17-cv-206 (E.D. Cal.) and United States ex rel. Riedel v. Boston Heart Diagnostics Corp., No. 12-cv-1423 (D.D.C.). Assistant U.S. Attorney Catherine J. Swann handled the Eastern District of California matter for the United States. The claims resolved by the settlement are allegations only and there has been no determination of liability.

FRESNO, Calif. — Aric Matthew Salazar, 36, formerly of Clovis, was sentenced today to 10 years in prison, for receipt and distribution of child pornography, U.S. Attorney McGregor W. Scott announced.

According to a criminal complaint, Salazar was detected by law enforcement investigators when he was sharing numerous child pornography files on a BitTorrent file-sharing network in October 2016. He admitted to investigating agents that he had used file-sharing programs for several years to obtain child pornography. He admitted in a plea agreement that he had received and distributed more than 600 images of child pornography from at least July 2015 through July 2017. Some of the images were depictions of minors being subjected to violence or sadistic conduct.

The sentence imposed includes a term of supervised release of 15 years during which, Salazar’s access to minors, computers, and the internet will be restricted. He will also be required to register as a sex offender, pay restitution of $12,000 to five victims who filed claims, and pay penalty assessments totaling $5,100.

This case was the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorney David Gappa prosecuted the case.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about internet safety education.

SACRAMENTO, Calif. — Raz Razla, 49, of Sherman Oaks, pleaded guilty last Friday to making false statements to the grand jury, U.S. Attorney McGregor W. Scott announced.

According to court documents, Razla testified falsely before a grand jury in the Eastern District of California on March 1, 2018, regarding his co-defendant, Yaniv Gohar, 36, formerly of Berkeley. Gohar had led an organization that installed and maintained video slot machines at businesses open to the public across Northern California, and he had also laundered the proceeds of his gambling business. Gohar was arrested on Dec. 8, 2017, released over the government’s objection, and escaped from the United States by charter jet.

According to court documents, Razla testified falsely that he had only learned of the charge against Gohar for conducting an illegal gambling enterprise after Razla received the subpoena to the grand jury. Razla’s false testimony was material to the grand jury’s investigation of whether Razla or his work colleagues had aided and abetted Gohar’s failure to appear or harbored or concealed him, as well as whether Razla or his work colleagues had known of the unlawful source of Gohar’s money when engaging in real estate transactions and attempted real estate transactions on his behalf.

This case is the product of an investigation by the Federal Bureau of Investigation and the California Department of Justice – Bureau of Gambling Control. Assistant U.S. Attorney Miriam R. Hinman is prosecuting the case. Assistance was provided by the U.S. Department of Justice’s Office of International Affairs and Israeli authorities.

Co-defendant, Orel Gohar, 29, also fled the United States in Dec. 2017 and remains at large. Anyone with information about his whereabouts should call the Federal Bureau of Investigation at (916) 746-7000. The charges against Orel Gohar are only allegations; he is presumed innocent until and unless proven guilty beyond a reasonable doubt.

Co-defendant Yaniv Gohar was extradited from Israel, pleaded guilty in September to conducting an illegal gambling business, money laundering, and failure to appear, and awaits sentencing. Co-defendant Eran Buhbut, 34, of Oakland, pleaded guilty in August to conducting an illegal gambling business and awaits sentencing. Co-defendants May Levy, 28, of Walnut Creek, Atir Dadon, 35, of Sherman Oaks, Bar Shani, 27, of San Francisco, and Adam Atari, 36, of Sherman Oaks, have pleaded guilty and have been sentenced.

Razla is scheduled to be sentenced on Feb. 28, 2020. Razla faces a maximum statutory penalty of five years in prison and a fine of up to $250,000. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. — A federal grand jury returned a three-count indictment Thursday against Darrel Kieth Higginbotham, 53, of Fernley, Nevada, charging him with being a felon in possession of a firearm, U.S. Attorney McGregor W. Scott announced.

According to court documents, on Feb. 28, Yuba County Sheriff deputies responded to a report of a prowler attempting to enter a home in Olivehurst. When deputies arrived, they found Higginbotham near the home. A pat-down of Higginbotham revealed a .45-caliber handgun in his jacket pocket that was cocked with the hammer back and loaded with one round in the chamber and seven in the magazine.

Higginbotham had been convicted previously of violent felonies and had a domestic violence restraining order against him. The convictions and the restraining order prohibit his possession of firearms under federal law.

In addition to the handgun, Higginbotham had 10 firearms, including two short-barreled AR-15 rifles, a shotgun, and multiple handguns in his truck. All of the firearms were loaded or had loaded ammunition magazines nearby.

The following day, March 1, after Higginbotham was released on bail, he visited a storage facility. After securing a search warrant, deputies searched Higginbotham’s unit and found 15 additional firearms, including another AR-15 rifle, three shotguns, and multiple handguns. Again, deputies found most of the firearms loaded.

This case is the product of an investigation by the Federal Bureau of Investigation and the Yuba County Sheriff’s Office. Assistant U.S. Attorney James Conolly is prosecuting the case.

If convicted, Higginbotham faces a maximum statutory penalty of 10 years in prison and a $250,000 fine on each count. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime. To learn more about Project Safe Neighborhoods, go to www.justice.gov/psn.