Eastern District of California
Press releases recorded for this federal judicial district.
Man Sentenced to over 7 Years in Prison for Armed Robbery of Mail Carrier in Rancho CordovaRead the Press Release
SACRAMENTO, Calif. — Juan Carlos Maldonado, 22, originally of Michoacán, Mexico, was sentenced today to seven years and three months in prison by U.S. District Judge John A. Mendez for the armed robbery of a U.S. mail carrier, participation in a bank fraud scheme, and aggravated identity theft, U.S. Attorney Phillip A. Talbert announced.
According to court documents, on June 21, 2016, Maldonado and others followed a U.S. letter carrier in a Rancho Cordova neighborhood using a sport utility vehicle with its plates removed. They pulled alongside the postal truck and when the carrier stepped out to deliver mail, Maldonado wielded a pistol at the carrier and robbed him at gunpoint. During the robbery, Maldonado and his associates raided the postal truck, stealing over 800 items of U.S. Mail. Following the robbery, they rifled through the stolen mail for personal identification and financial information, which Maldonado used and provided to others for use to defraud financial institutions.
On June 30, 2016, Maldonado was arrested by the El Dorado County Sheriff’s Office at the Red Hawk Casino while attempting to access proceeds from credit cards stolen during the robbery. Maldonado pleaded guilty to the charges on June 6, 2017.
San Francisco Division Inspector in Charge Rafael Nunez stated: “Working with the U.S. Attorney’s Office and our partners in law enforcement, Postal Inspectors arrested this individual for the armed robbery of a U.S. Postal Service Letter Carrier. Protecting postal employees from harm is the U.S. Postal Inspection Service’s top priority.”
This case was the product of an investigation by the United States Postal Inspection Service and the United States Postal Inspection Service’s Narcotic and Economic Crimes Investigations Task Force (NECI) with assistance from the El Dorado County Sheriff’s Office, the El Dorado County District Attorney’s Office, and the Rancho Cordova Police Department. NECI is a partnership between local and federal law enforcement to combat theft and unlawful use of the U.S. Mail. The Placer County District Attorney’s Office and Sutter County Sheriff’s Office have each dedicated law enforcement personnel to the task force. Assistant United States Attorney Michelle Rodriguez prosecuted the case.
Elk Grove Man Pleads Guilty to Producing Child PornographyRead the Press Release
SACRAMENTO, Calif. —Alexander Jordan Miller, 21, of Elk Grove, pleaded guilty today to producing child pornography, U.S. Attorney Phillip A. Talbert announced.
According to court documents, in 2015, Miller, under various pseudonyms, used social media and a smartphone messaging application to persuade minor victims to take and then provide to him nude photos of themselves engaged in sexually explicit conduct. In each instance, after Miller obtained one or more nude photos of the victim, Miller demanded that the victim provide additional, and increasingly graphic, nude videos and photos. Miller told each victim that if she did not provide more nude videos or photos, he would send the victim’s friends and family the nude photos that the victim provided previously, or he threatened to post the victim’s nude photos on the internet. As part of this extortion scheme, Miller used at least 12 minor victims to produce child pornography. One of the victims was 11 years old at the time of the offense.
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorney Brian A. Fogerty is prosecuting the case.
Miller is scheduled to be sentenced by Judge John A. Mendez on January 9, 2018. Miller faces a mandatory minimum sentence of 15 years in prison, and a maximum statutory sentence of 30 years in prison. The maximum fine that the court may impose is $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.
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 nternet safety education.
Riverside County Woman Pleads Guilty to Marijuana Cultivation in the Sequoia National ForestRead the Press Release
FRESNO, Calif. —Coral Herrera, 21, of Perris, pleaded guilty today to conspiring to manufacture, distribute and possess with intent to distribute, and manufacturing marijuana in connection with two separate large-scale marijuana cultivation operations in Kern County in the Sequoia National Forest, U.S. Attorney Phillip A. Talbert announced.
Herrera also agreed to pay restitution to the U.S. Forest Service for the damage to public land and natural resources caused by the marijuana cultivation activities.
According to court documents, Herrera was linked to grow sites in the Lucas Creek drainage and an area known as the Box 6 site after a four-month investigation. The investigation revealed that she was supplying material, equipment, and personnel to the grow sites, which consisted of 10,396 marijuana plants, and that she was also responsible for transporting co-defendants Abel Toledo-Villa, 34, and Alfredo Cardenas-Suastegui, 56, both natives and citizens of Mexico, away from the Box 6 grow site after it was raided. The marijuana cultivation operations caused extensive damage to the land and natural resources. Harmful pesticides and large amounts of trash were found at both sites. Native trees and vegetation were also removed to make room for the marijuana plants.
This case is the product of an investigation by the U.S. Forest Service, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Southern Tri‑County High Intensity Drug Trafficking Area (HIDTA) task force, California Department of Justice’s Campaign Against Marijuana Planting (CAMP), California Department of Fish and Wildlife, Kern County Sheriff’s Office, Riverside County Sheriff’s Department, Fontana Police Department, and Victorville Police Department. Assistant U.S. Attorney Karen Escobar is prosecuting the case.
Herrera is scheduled for sentencing on December 4, 2017, by U.S. District Judge Lawrence J. O’Neill. She faces a maximum penalty of 20 years in prison and a fine of $1 million. 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. Toledo-Villa previously entered a guilty plea and was sentenced to five years in prison. Charges against Cardenas-Suastegui and Maldonado-Soto are still pending. The charges are only allegations; Cardenas-Suastegui and Maldonado-Soto are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Multi-agency Operation in Fresno Results in Multiple Arrests for Drug and Firearm OffensesRead the Press Release
FRESNO, Calif. — On Thursday, following a 10-month-long investigation targeting local criminal street gangs in Fresno conducted by several federal law enforcement agencies and the Fresno Police Department, 15 defendants were arrested on federal charges and at least 14 defendants were arrested on state charges. The various charges include drug trafficking, conspiracy to traffic illegally in firearms, and transportation for the purpose of prostitution. The 104-page federal criminal complaint charges 18 defendants with criminal activity ranging from firearms trafficking, drug trafficking, and prostitution-related offenses. According to court documents, the investigation uncovered multiple sales of methamphetamine, cocaine, and firearms by the various defendants between January and August 2017.
U.S. Attorney Phillip A. Talbert, Drug Enforcement Administration (DEA) Special Agent in Charge John J. Martin, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Special Agent in Charge Ryan L. Spradlin, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Special Agent in Charge Jill Snyder, Federal Bureau of Investigation (FBI) Special Agent in Charge Sean Ragan, and Fresno Chief of Police Jerry Dyer made the announcement today.
The investigation has resulted in the seizure of more than 30 firearms and multiple pounds of methamphetamine. On September 7, 2017, in addition to the arrests, nine search warrants and multiple probation and parole searches were executed on the target gang members and their associates.
U.S. Attorney Talbert stated: “This operation demonstrates how law enforcement partners at the federal, state and local level are working as one to pursue criminal gangs and their associates. All of these agencies will work tirelessly to protect our communities and to hold accountable those who threaten our safety.”
DEA Special Agent in Charge John J. Martin stated; “Drug, firearms and human trafficking bring blight to the community and tear at the fabric of society. DEA will continue to conduct investigations with our counterparts that send the message these activities will not be tolerated in our neighborhoods.”
“The FBI is dedicated to working with all law enforcement partners to effectively target gang violence in all of its forms,” said Special Agent in Charge Sean Ragan of the FBI Sacramento Field Office. “We are committed to keeping illegal firearms and drugs off of our streets and preventing victimization to ensure a brighter future for our community's families.”
“This investigation and today’s enforcement actions show the extraordinary multi-agency coordination and cooperation that is being brought to bear locally to take back our streets and combat gang-related violence and crime,” said Ryan L. Spradlin, the special agent in charge for Homeland Security Investigations who oversees the agency’s enforcement actions throughout northern California. “With its global reach and broad legal authorities, Homeland Security Investigations is uniquely equipped to tackle that mission and we’ll continue to work with our law enforcement partners to leverage those tools to help protect our communities from the significant public safety threat posed by criminal street gangs.”
“Firearms trafficking is one of the most pressing issues today,” said Special Agent in Charge Jill Snyder, ATF, San Francisco Field Division. “It is our duty to make this community a safer place for families. The safety of the public is at the core of ATF’s mission and through partnerships, law enforcement agencies create a unified front against violent crime, which make operations of this nature successful.”
The federal defendants, all Fresno residents, are as follows:
Carlos Montano, 27; Filibert Chavez, 35; Robin Gill, 31; Gabriel Gomez, 26; Juan Carlos Briceno, 36; Nicholas Bolanos, 25; Daniel Villanueva, 19; Gerrick Travis Tyrell Franklin, 27; Amina Padilla, 34; Robert Lockhart, 52; Idelfonso Soto, 19; Carlos Melgar, 36; Jeni Fries, 23; Cisco Hernandez, 23; Miguel Murrillo, 22; Adolfo Jesus Mendoza, 23; Jesus Melgarejo Jr., 26; and Cesar Gutierrez, 24. All are in custody except for Gabriel Gomez, Daniel Villanueva and Gerrick Travis Tyrell Franklin.The charges are the product of an investigation by the DEA, FBI, HSI, ATF, the Fresno Police Department, the Fresno County Sheriff’s Office, and the Multi-Agency Gang Enforcement Consortium (MAGEC) with assistance from the California Department of Corrections and Rehabilitation. Assistant U.S. Attorneys Kimberly A. Sanchez and Jeffrey Spivak are prosecuting the case.
This case was 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.
As currently charged, if convicted, certain federal defendants face a mandatory minimum of ten years in prison and up to life in prison, while others face a minimum of five years in prison and up to a maximum of 40 years in prison for the conspiracy to distribute methamphetamine depending on the quantity of drugs involved; 20 years in prison and a $1 million fine for possession of a controlled substance with intent to distribute; 10 years in prison and a $250,000 fine for the charge of being a felon in possession of a firearm, the charge of possession of an unregistered firearm, the charge of interstate transportation for the purposes of prostitution; and five years in prison and a $250,000 fine for using a facility of interstate commerce to promote prostitution or for conspiracy to deal firearms without a license. 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.
Manteca Man Sentenced for Fraud Scheme Involving Identity Theft and Stolen U.S. MailRead the Press Release
SACRAMENTO, Calif. — Matthew Gene Ballard, 38, of Manteca, was sentenced on Friday, September 8, 2017, by U.S. District Judge Garland E. Burrell Jr. to six years and three months in prison for executing a bank fraud and identity theft scheme and for numerous violations of his supervised release for a prior conviction, U.S. Attorney Phillip A. Talbert announced.
San Francisco Division Inspector in Charge Rafael Nunez of the U.S. Postal Inspection Service stated, “Postal Inspectors work closely with the U.S. Attorney’s Office and our partners in law enforcement to arrest and prosecute those individuals responsible for thefts of mail and identity theft crimes committed against the public.”
Ballard pleaded guilty to the offenses on February 10, 2017.
According to court documents, Ballard had been released from federal prison on March 27, 2015, after serving three years in prison for similar offenses and was on supervised release. Between July 2015 and April 2016, Ballard, working with others, obtained stolen U.S. Mail and stolen property, and using the identification information and mail contents, made counterfeit identifications. Ballard used the identities to fraudulently open accounts, obtain lines of credit, and get cash and goods at the expense of banks and merchants. As part of his scheme, Ballard stole his own landlord’s identity and used unauthorized credit cards to pay for personal expenses.
This case was the product of an investigation by the U.S. Postal Inspection Service with the assistance of the U.S. Probation Office. Assistant U.S. Attorney Michelle Rodriguez prosecuted the cases.
El Dorado County Man Indicted for Distributing a Designer Drug that Caused the Death of a MinorRead the Press Release
SACRAMENTO, Calif. — On August 31, 2017, a federal grand jury returned a two-count indictment against Elijah Lee Richter, 26, of Camino, charging him with distribution of a controlled substance known as 25i-nBOME that caused death, and possession of a controlled substance, U.S. Attorney Phillip A. Talbert announced.
According to the indictment, on September 8, 2012, Richter knowingly and intentionally distributed 25i-nBOME, a controlled substance analogue, which caused the death of a juvenile named A.A.
This case is the product of an investigation by the El Dorado County Sheriff’s Department, El Dorado County District Attorney’s Office, and the Drug Enforcement Administration 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 United States Attorneys Jason Hitt and Paul Hemesath are prosecuting the case.
If convicted on the distribution charge, Richter faces a maximum statutory penalty of life in prison, a mandatory minimum of 20 years 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 defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Sacramento Man Convicted of Traveling to the Philippines to Have Sex with Minors, Conspiring to Produce Child Pornography, and Buying ChildrenRead the Press Release
SACRAMENTO, Calif. — A federal jury today found Michael Carey Clemans, 57, of Sacramento, guilty of attempted travel and travel with intent to engage in illicit sexual conduct, conspiracy to travel with intent to engage in illicit sexual conduct, and buying of children, U.S. Attorney Phillip A. Talbert announced. On the first day of trial, Clemans pleaded guilty to three additional counts: conspiracy to produce child pornography, attempted production and production of child pornography, and receipt of child pornography.
According to court documents, beginning in June 2014, Clemans conspired with a woman in the Philippines to produce child pornography. During much of the conspiracy, Clemans was temporarily residing in Bangkok, Thailand, where he worked as an airline pilot. In April 2015, Clemans returned to his Sacramento residence and continued his overseas conspiracy using his online account to chat with the Filipino woman. In these chats, Clemans discussed various strategies to obtain minor girls whom he could rape. Clemans instructed the Filipino woman on how to find vulnerable victims, directing her to look for orphans and victims of typhoons. Clemans paid nearly $6,000 to the woman so she could buy photographic equipment and find discreet locations to conduct sexually explicit photo shoots of the victims, who were as young as seven. He gave her explicit instructions on how to photograph their naked bodies so he could determine which ones he would come to the Philippines to rape. He indicated in the chats with the Filipino woman that he was particularly interested in very young virgins. On multiple occasions, Clemans paid a co-conspirator to obtain temporary custody of the children in the Philippines and produce child pornography for him.
According to evidence introduced at trial, Clemans engaged in another scheme with separate individuals in November 2013, in which he traveled from the United States to Manila for the purpose of engaging in illicit sexual conduct with minors, including an 11-year-old girl, after requesting and receiving pornographic images of minors whom he expected to rape.
This case is the product of an investigation by the Federal Bureau of Investigation and the Philippine National Bureau of Investigation. Assistant U.S. Attorneys André M. Espinosa and Colleen M. Kennedy are prosecuting the case.
Clemans is scheduled to be sentenced on December 12, 2017, by U.S. District Judge John A. Mendez. Clemans faces a mandatory minimum sentence of 30 years in prison for the “buying children” charge, a maximum statutory penalty of life 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.
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.
Oklahoma Man Sentenced for His Role in Prison Tax Fraud SchemeRead the Press Release
SACRAMENTO, Calif. — Edwin Forrest Ludwig III, 61, of Oklahoma, was sentenced today by U.S. District Judge Garland E. Burrell Jr. to a year and a day in prison and ordered to pay $191,465 in restitution for conspiring to defraud the United States with false claims for federal tax refunds, U.S. Attorney Phillip A. Talbert announced.
According to court documents, beginning in 2011, the defendant’s son, Edwin Forrest Ludwig IV, ran a tax fraud scheme out of the California Correctional Center in Susanville that involved at least seven co-conspirators. Four of the conspirators who were incarcerated at the correctional center obtained personal identification information of other inmates. Co-conspirators who were not incarcerated took this information and prepared and filed false income tax returns with the IRS, claiming refunds that they knew to be false and to which the inmates were not entitled. Ludwig III, who was not an inmate, assisted the scheme by opening bank accounts to deposit the fraudulently obtained refunds and transferring the money for use by the incarcerated co-conspirators.
This case was the product of an investigation by the Internal Revenue Service, Criminal Investigation, the Federal Bureau of Investigation, and the Investigative Unit at the California Correctional Center. Assistant United States Attorney Amy Schuller Hitchcock prosecuted the case.
To date, five co-conspirators have pleaded guilty. Four have been sentenced for their participating in this scheme, including Ludwig IV, who was sentenced to seven years in prison, and one defendant is set to be sentenced later this month. Charges are pending against one remaining co‑defendant. The charges are only allegations; he is presumed innocent until and unless proven guilty beyond a reasonable doubt.Alleged Marijuana Growers in Siskiyou County Charged for Conspiring to Bribe SheriffRead the Press Release
SACRAMENTO, Calif. — Chi Meng Yang, 31, of Montague, and his sister Gaosheng Laitinen, 36, of Mt. Shasta Vista, were charged today for conspiring to commit bribery, bribery of a public official, conspiracy to manufacture marijuana, and manufacturing marijuana, U.S. Attorney Phillip A. Talbert announced.
According to the criminal complaint, on May 17, 2017, Yang met with Siskiyou County Sheriff Jon Lopey in Yreka. During the meeting, Yang offered $1 million to the Sheriff in exchange for his assistance with an interstate marijuana distribution business that Yang and others were in the process of organizing. Yang explained his role to be that of a representative for several families, himself included, that were currently cultivating marijuana in Siskiyou County. After the meeting, the Sheriff immediately reported it to the Federal Bureau of Investigation and the Drug Enforcement Administration. Federal agents asked the Sheriff to continue meeting with Yang.
At the request of, and in conjunction with the FBI and DEA, the Sheriff contacted Yang and indicated a willingness to work with him and the marijuana growers he represented. The subsequent meetings were audio and video recorded by the FBI. Laitinen attended some of those meetings. During those meetings, Yang and Laitinen talked with the Sheriff about how he could assist them. Because Yang’s offer of $1 million was contingent on Yang securing and profiting from certain out-of-state marijuana licenses, Yang and Laitinen promised to pay the Sheriff a total of $80,000 if he would exempt eight properties from the Siskiyou County ban against outdoor marijuana grows. They sought protection from raids or other law enforcement actions on these eight properties where outdoor marijuana was being grown. In furtherance of this plan, Yang and Laitinen gave the Sheriff several initial payments, totaling $10,500 in cash. These funds were immediately turned over to the FBI as evidence.
This case is the product of an investigation by the Federal Bureau of Investigation, the Drug Enforcement Administration, and the Siskiyou County Sheriff’s Office with assistance from the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Enforcement and Removal Operations (ERO), Bureau of Land Management (BLM), U.S. Forest Service (USFS), North State Marijuana Investigation Team (NSMIT), Tehama Interagency Drug Enforcement (TIDE), Shasta Interagency Narcotics Task Force (SINTF), Siskiyou Unified Major Investigations Team (SUMIT), and California Highway Patrol (CHP). Assistant U.S. Attorney Michael M. Beckwith is prosecuting the case.
Yang was arrested today and is scheduled to make an initial court appearance on September 1, 2017, in Sacramento. If convicted of the charges in the complaint, Yang and Laitinen face the following maximum statutory penalties: (1) five years in prison and a $250,000 fine for the conspiracy charge; (2) 10 years in prison and a $250,000 fine for the bribery charge; and (3) a minimum of five years and up to 40 years in prison and a $5 million fine for the drug charges. 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.
Indictment Unsealed Charging Sacramento CEO for Retirement Fund Embezzlement and False StatementsRead the Press Release
SACRAMENTO, Calif. — An indictment has been unsealed today that charges David L. Bonuccelli, 63, of Sacramento, with embezzlement from his employees’ retirement funds and false statements regarding those retirement funds, U.S. Attorney Phillip A. Talbert announced.
A federal grand jury returned the five-count indictment last Thursday. According to court documents, Bonuccelli is the founder and CEO of a real estate and investment advisory corporation that provides retirement benefit plans for its employees. On December 4, 2012, Bonuccelli embezzled approximately $517,000 from one of his firm’s employee retirement funds, protected under the Employee Retirement Income Security Act of 1974 (ERISA). Bonuccelli also made false statements on forms required under ERISA regarding the 2011 and 2012 end-of-year balances, indicating that certain transfers had not occurred when in fact they had.
This case is the product of an investigation by the Department of Labor – Employee Benefits Security Administration. Assistant U.S. Attorney Matthew M. Yelovich is prosecuting the case.
If convicted, Bonuccelli 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.
Former IRS Employees Plead Guilty to Tax Fraud in FresnoRead the Press Release
FRESNO, Calif. — Two long-time IRS employees pleaded guilty today to aiding others in the preparation of false tax returns, and making their own fraudulent tax returns as an employee of the United States, U.S. Attorney Phillip A. Talbert announced.
According to court documents, Della Ornelas, 49, and Randall Ruff, 53, both of Fresno, are a married couple. Between 2005 and 2012, they filed false tax returns for family and friends that added dependents, generating large tax refunds that were diverted into bank accounts they controlled, sometimes without the knowledge of the taxpayer. They also filed false tax returns for themselves by fraudulently adding dependents. Over a seven-year period, Ornelas defrauded the United States of approximately $76,897 and Ruff defrauded the United States of approximately $53,227.
This case is the product of an investigation by the Treasury Inspector General for Tax Administration and the Internal Revenue Service-Criminal Investigation. Assistant U.S. Attorney Mark J. McKeon is prosecuting the case.
Ornelas and Ruff are scheduled to be sentenced by U.S. District Judge Dale A. Drozd on November 13, 2017. They each face a maximum statutory sentence of three years in prison for aiding and abetting false tax returns and five years in prison for making fraudulent tax return by an employee of the United States. 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.
Action for Defrauding a Program for Individuals with Developmental Disabilities Settles for Approximately $2 MRead the Press Release
SACRAMENTO, Calif. — Two Bay Area companies and the two individuals who head them will pay approximately $2 million to resolve federal and state False Claims Act allegations that they knowingly overbilled a program designed to serve Californians with developmental disabilities, U.S. Attorney Phillip A. Talbert announced today.
A federal lawsuit, filed by whistleblower Beverly McCaffery, contends that Alternative Learning Center, its president Alice Soard, Adult Educational Technologies Inc., and its executive director Wendell James defrauded California’s Department of Developmental Services (DDS) by billing for services that were never provided. The lawsuit was brought in the Eastern District of California because the false claims were submitted to the DDS in Sacramento.
“These defendants took advantage of a government program designed to help some of our most vulnerable citizens, diverting funds over a number of years that may have been used to provide services to others in need,” said U.S. Attorney Talbert. “My office will continue to work closely with our federal and state partners to safeguard the integrity of this important program, and results like this one help accomplish that objective. We encourage anyone who has additional information about abuse of this program to come forward.”
“It is reprehensible that Adult Educational Technologies, Alternative Learning Center, Alice Soard, and Wendell James charged Medicaid for services that were never provided to developmentally disabled patients — services that were badly needed,” said Special Agent in Charge Steven J. Ryan of U.S. Department of Health and Human Services Office of Inspector General, San Francisco Regional Office. “Such repulsive scams, which cheat both patients and taxpayers, will not be tolerated. Thanks to our hardworking investigators and our law enforcement partners, these companies and executives will pay dearly for their heartless behavior.”
DDS administers programs that enable individuals with developmental disabilities to live in the community instead of being institutionalized. DDS contracts with nonprofit regional centers around the state, who in turn contract with “vendors,” such as Alternative Learning Center and Adult Educational Technologies Inc., who commit to provide in-home support to these individuals, including personal care and homemaking.
According to the settlement agreement, Alternative Learning Center and Adult Educational Technologies Inc. were authorized to provide services in Alameda and Contra Costa counties. It is alleged that the defendants submitted claims for payment for services that were never performed, fraudulently retained overpayments to which they knew they were not entitled and intentionally falsified documents to reflect services that were never actually performed in order to provide support for their false claims for payment.
The terms of the settlement require each defendant to make substantial up-front payments to the United States and California, along with additional payments over a period of time, plus interest. Alternative Learning Center will pay a total of $562,600, Adult Educational Technologies, Inc. will pay $322,500, Alice Soard will pay $159,400, and Wendell James will pay $107,500. Alice Soard has also agreed to sell her primary residence and remit the proceeds to the government.
The False Claims Act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery. Ms. McCaffery will receive a 20 percent share of all settlement proceeds paid to the United States.
This case was investigated by the United States Office of Inspector General of the U.S. Department of Health and Human Services, the Federal Bureau of Investigation, and the California Department of Justice, Office of the Attorney General, Bureau of Medi-Cal Fraud and Elder Abuse. Assistant U.S. Attorney Colleen M. Kennedy handled the case.
Sacramento Man Sentenced to over Four Years in Prison for Filing False Tax ReturnsRead the Press Release
SACRAMENTO, Calif. — Omar Kabiljagic, 46, of Sacramento, was sentenced today by U.S. District Judge Garland E. Burrell Jr. to four years and three months in prison for filing fraudulent tax returns, U.S. Attorney Phillip A. Talbert announced.
According to evidence presented during a four-day trial, Kabiljagic submitted a series of fraudulent tax returns to the Internal Revenue Service falsely reporting that in 2008 and 2009, he earned interest from “original issue discount” (OID) bonds. He falsely reported that this interest income had been withheld by various financial institutions, and claimed that this entitled him to hundreds of thousands of dollars in tax refunds. The IRS repeatedly warned Kabiljagic that his filings were frivolous and that he risked criminal charges if he persisted. Nevertheless, on June 25, 2009, Kabiljagic filed two more tax returns that falsely claimed refunds totaling $863,520.
Kabiljagic’s co-defendant, Suvada Mahmutovic, 67, pleaded guilty to filing a false claim using the same scheme. One of Mahmutovic’s claims resulted in a fraudulent refund of more than $263,000, which Kabiljagic helped her cash. On July 6, 2017, Mahmutovic was sentenced to 21 months in prison.
“Despite being warned several times, Mr. Kabiljagic repeatedly and persistently filed false tax returns with IRS,” said Michael T. Batdorf, Special Agent in Charge IRS Criminal Investigation. “When his scheme finally worked, he helped his co-defendant open a bank account, carried the cash home in a duffle bag, and wired it overseas through his own bank accounts. Once again this shows the severe nature of fraudulent tax refund schemes perpetrated against the IRS. Today’s sentencing sends a clear message that those involved in these types of schemes will be held accountable for their crimes.”
On April 4, 2017, a jury found Kabiljagic guilty of two counts of filing fraudulent tax returns. In sentencing Kabiljagic, Judge Burrell found that Kabiljagic had obstructed justice by testifying falsely at trial.
This case was the product of an investigation by the IRS Criminal Investigation. Assistant U.S. Attorneys Matthew G. Morris and Amy Schuller Hitchcock prosecuted the case.
Former Bookkeeper and Associate Arrested for Embezzling More Than $1 Million Dollars from Fresno BusinessRead the Press Release
FRESNO, Calif. — A Fresno bookkeeper and her associate were arrested today for their roles in embezzling over $1 million from a Fresno business, U.S. Attorney Phillip A. Talbert announced.
On Thursday, a federal grand jury returned a 15-count indictment against Brandi Marshall, 41, and Daniel Barrios Jr., 37, charging them with conspiracy, wire fraud, bank fraud and money laundering.
According to court documents, Marshall was employed as the company’s bookkeeper between October 2014 and March 2016 and was responsible for, among other things, receiving and depositing payment checks from customers to pay their invoices. During that time, she and Barrios misappropriated more than 100 checks and fraudulently deposited them into Barrios’s personal bank account. Marshall and Barrios used money derived from the fraudulently deposited checks for personal purchases, including more than $35,000 to purchase and accessorize a 2016 Ford Mustang GT, and more than $25,000 for a 2012 Dodge Challenger. Marshall created fictitious entries in the company’s computer accounting application to attempt to conceal the embezzlement. Together, Marshall and Barrios embezzled more than $1 million dollars.
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorney Christopher D. Baker is prosecuting the case.
If convicted, Marshall and Barrios face a maximum statutory penalty of 30 years in prison and a $1 million fine for each of the wire fraud and bank fraud charges, and 10 years in prison and a $250,000 fine for conspiracy to launder money. 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.
Benicia Woman Sentenced to Prison for Tax FraudRead the Press Release
SACRAMENTO, Calif. — Sherrell Davis, 43, of Benicia, was sentenced today by U.S. District Judge Garland E. Burrell Jr. to 18 months in prison and ordered to pay $210,320 in restitution for submitting false claims for tax refunds, U.S. Attorney Phillip A. Talbert announced. Davis was ordered to surrender to start serving her sentence on October 20, 2017.
According to court documents, from February 2011 through May 2013, Davis repeatedly engaged in tax fraud by submitting over 50 fraudulent claims for tax refunds in the names of other people to the Internal Revenue Service. The tax returns used fraudulent W-2 tax forms listing false wages and false withholdings in order to generate tax refunds to which the people named on the returns were not entitled. The fraudulent returns also claimed tax credits to which the taxpayers were not entitled, including the Earned Income Credit, the American Opportunity Credit, and the Making Work Pay Credit. In furtherance of her tax fraud scheme, Davis took over bank accounts in the name of another person and used those accounts to receive proceeds from the fraud.. In all, Davis submitted fraudulent tax returns seeking over $350,000 in tax refunds, of which at least $210,320 were paid out by the IRS.
“We want everyone who files a tax return to take advantage of the deductions and credits to which they are entitled by law, however, no one is entitled to defraud the United States and the American taxpayers,” said Michael T. Batdorf, Special Agent in Charge, IRS Criminal Investigation. “For approximately three years, Ms. Davis repeatedly filed numerous false income tax returns with the IRS claiming refunds based on false information. IRS CI will continue to aggressively pursue those who file false tax returns to claim refunds to which they are not entitled.”
Attempted tax refund fraud has been a significant problem in recent years, leading to increased efforts by the IRS and IRS Criminal Investigation to combat it. For example, the IRS has estimated that from 2011 through October 2014, it stopped 19 million suspicious returns and blocked more than $63 billion in fraudulent refunds. Many such tax refund fraud schemes depend on the use of stolen identities. For more information about tax-related identity theft, including warning signs, how to reduce your risk, and what to do if you suspect you have become a victim, visit the IRS Taxpayer Guide to Identity Theft at https://www.irs.gov/uac/taxpayer-guide-to-identity-theft.
This case was the product of an investigation by the IRS Criminal Investigation. Assistant U.S. Attorney Christopher S. Hales prosecuted the case.
Texas Man Charged with Online Enticement of a Minor and Traveling to Engage in Illicit Sexual Conduct with a Sacramento MinorRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a two-count indictment today against Christopher L. Crawford, 36, of Houston, Texas, charging him with online enticement of a minor and traveling in interstate commerce to engage in illicit sexual conduct with minor, U.S. Attorney Phillip A. Talbert announced.
According to the indictment, between March 7, 2017, and April 21, 2017, Crawford enticed a minor online to engage in sexual activity, and between April 18, 2017, and April 21, 2017, Crawford traveled from Harris County in Texas to Sacramento County for the purpose of engaging in illicit sexual conduct with a minor.
This case is the product of an investigation by the Internet Against 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. The Sacramento ICAC investigates online child exploitation crimes, including child pornography, enticement, and sex trafficking. Assistant U.S. Attorney Rosanne Rust is prosecuting the case.
If convicted of the federal charges, Crawford faces a mandatory minimum of 10 years in prison and 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 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.
Former Fresno Resident and Teacher Sentenced to 9 Years in Prison for Child Pornography OffensesRead the Press Release
FRESNO, Calif. — Jack Mootz, 63, of Sacramento, formerly of Fresno, was sentenced on Wednesday to nine years in prison for receipt and distribution of child pornography, U.S. Attorney Phillip A. Talbert announced.
U.S. District Judge Dale A. Drozd also imposed a term of supervised release of 15 years during which Mootz will be required to register as a sex offender and his access to the internet, computers, and children will be restricted.
According to court documents, a law enforcement officer in Plano, Texas detected that Mootz was sharing thousands of images of child pornography through the BitTorrent network. Most of the images depicted children as young as infants and toddlers being sexually abused by adults.
Mootz had been employed in numerous school districts throughout Central California as a teacher, often working with special needs students. Mootz had been living in Fresno but relocated to Sacramento after a search warrant was executed at his residence. Mootz was indicted on March 9, 2017, and pleaded guilty without a plea agreement on May 31, 2017.
This case was the result of an investigation by the Federal Bureau of Investigation offices in Dallas, Texas and Fresno, California as well as the Plano Police Department. 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.
Tulare County Woman Pleads Guilty to Tax Fraud and Investment FraudRead the Press Release
FRESNO, Calif. — Marie E. Sherrill, 56, of Porterville, pleaded guilty today to one count of wire fraud and one count of aiding the preparation of a false tax return, U.S. Attorney Phillip A. Talbert announced.
According to the plea agreement, Sherrill promoted a fraudulent investment program that promised the victims of the scheme that their money would be put into “pooled investments” with the money of other investors, to earn a high rate of return. The money was, in fact, never invested. Instead, it was used to pay Sherrill’s personal expenses, including gambling, and to make lulling payments to earlier investors to make them believe their money was earning a profit. As a result of this scheme, victims were defrauded of at least over $1.3 million.
In addition to the investment fraud scheme, Sherrill also committed tax fraud. According to court documents, Sherrill was a registered tax return preparer operating a bookkeeping and tax preparation business in Porterville under the name Sherrill Financial Services. Between January 2011 and December 2014, Sherrill prepared false tax returns for her clients containing false deductions to maximize their tax refunds, causing a loss to the IRS of approximately $255,900.
This case is the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation. Assistant U.S. Attorney Mark J. McKeon is prosecuting the case.
Sherrill is scheduled to be sentenced by U.S. District Judge Dale A. Drozd on November 13, 2017. Sherrill faces a maximum statutory penalty of 20 years in prison for wire fraud and three years in prison for the tax charge. She also faces a $250,000 fine on each 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.
Nationwide Scheme to Defraud Casinos and Credit Card Companies Leads to 3-Year Prison SentenceRead the Press Release
SACRAMENTO, Calif. — Frank Luo, 49, of Las Vegas, Nevada, was sentenced today by U.S. District Judge Kimberly J. Mueller to three years in prison for wire fraud related to a nationwide casino and credit card fraud scheme, U.S. Attorney Phillip A. Talbert announced.
According to court documents, between August 2008 and August 2014, Luo participated in a scheme to defraud casinos and credit card companies across the country. The scheme involved using false identities in the names and Social Security numbers of migrant workers to apply for casino credit called “markers” and to open credit card accounts. A marker is a cash advance provided by a casino to a patron, and it is often secured by a check from the patron’s bank account. Luo, working in concert with co-defendant Vivian Wang 54, of Lilburn, Georgia, initially timely repaid several markers at different casinos and several credit cards in order to give the impression of creditworthiness to future casinos and credit card companies. Luo and Wang recruited “clients” to participate in the scheme to induce the casinos and credit card companies to part with even more money under fraudulent pretenses.
Luo and his co-schemers coordinated their gambling activity in order to give the appearance of losing money (and thereby encouraging the casinos to issue future markers) when in fact one schemer would “lose” money while another would gain the same. In other instances, one schemer would surreptitiously deliver the issued gambling chips to another in order to give the appearance of having spent them. At the end of the scheme, Luo and his co-schemers did not repay the casino markers or the significant outstanding credit card balances accrued in a short amount of time once creditworthiness had been established. The combined fraud led to over $1.1 million in losses to casinos and credit card companies.
This case is the product of an investigation by the Federal Bureau of Investigation and the California Department of Justice’s Bureau of Gambling Control. Assistant U.S. Attorney Matthew M. Yelovich is prosecuting the case.
Charges are pending against Wang. She is scheduled for trial in March 2018. The charges against her are only allegations; she is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Former Bakersfield Union Officer Sentenced to 21 Months for EmbezzlementRead the Press Release
Bakersfield, Calif. —Edward Padilla, 56, of Bakersfield, was sentenced today to 21 months in prison for his embezzlement of union funds, U.S. Attorney Phillip A. Talbert announced.
Chief U.S. District Judge Lawrence J. O’Neill also ordered Padilla to pay $168,780.22 in restitution to the union.
According to court documents, from at least September 2012 to on or about December 31, 2014, while Padilla was the Secretary Treasurer/Business Manager of the Bakersfield office of a construction workers’ union, he embezzled approximately $168,780.22 from the union in the form of unearned salary checks, unauthorized sick leave payments, and personal expenditures on his union credit cards.
This case was the product of an investigation by the United States Department of Labor, Office of Labor-Management Standards. Assistant United States Attorney Angela Scott prosecuted the case.
Two Men Indicted for Growing Marijuana on Public Land in Tehama CountyRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a three-count indictment today against Gabriel Sanchez-Madris, 41, and Mark Espinoza, 26, charging them with manufacturing marijuana and conspiring to do the same, U.S. Attorney Phillip A. Talbert announced.
According to court documents, Sanchez-Madris and Espinoza were arrested by law enforcement on August 1, 2017, following a search of a marijuana-cultivation site in the Cub Creek area of Lassen National Forest in Tehama County. The site contained approximately 2,640 marijuana plants.
This case is the product of an investigation by the United States Forest Service, the Tehama County Sheriff’s Office, and the California Department of Fish and Wildlife.
If convicted of the marijuana charges, Sanchez-Madris and Espinoza both face a mandatory minimum penalty of 10 years in prison, 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 several variables. The charges are only allegations; the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.
Two Men Charged with Growing Marijuana on Public LandsRead the Press Release
FRESNO, Calif. — A federal grand jury returned a two-count indictment today against Uriel Madrigal-Perez, 23, of Bakersfield, and Silviano Madrigal-Herrera, 27, of Perris, charging them with cultivation of marijuana and conspiring to cultivate marijuana, U.S. Attorney Phillip A. Talbert announced.
According to court documents, both men were arrested in the early morning hours of August 4, 2017, as they left an area that was used to drop off supplies and personnel for a remote clandestine marijuana grow in the in the Upper Kern Canyon area of Sequoia National Forest in Tulare County. The grow was found to contain in excess of 1,000 marijuana plants.
This case is the product of an investigation by the U.S. Forest Service. Assistant U.S. Attorney Laurel J. Montoya is prosecuting the case.
If convicted, both defendants faces a maximum statutory penalty of a minimum of 10 years to 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 defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Solano County Man Sentenced to 10 Years in Prison for Possessing Gun as a FelonRead the Press Release
SACRAMENTO, Calif. — Markell Darrell Davis, 31, of Solano County, was sentenced today by United States District Judge Morrison C. England Jr. to 10 years in prison for being a felon in possession of a firearm, U.S. Attorney Phillip A. Talbert announced.
According to court documents, on February 17, 2014, Davis was involved in a shooting in a residential neighborhood in Fairfield. Davis was driving on a residential block when a car pulled alongside him and an occupant of that car fired shots at Davis, then drove away. Davis returned fire with his .40-caliber Glock semi-automatic pistol in the direction of the other car as it drove away. One of the bullets that Davis fired struck and injured a bystander. At the time of the shooting, Davis was a convicted felon who was prohibited by law from possessing a firearm.
This case was the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Fairfield Police Department. Assistant U.S. Attorney Brian A. Fogerty prosecuted the case.
Six Indicted for Large-Scale Drug Distribution via the Dark WebRead the Press Release
FRESNO, Calif. — A federal grand jury returned an indictment today charging six defendants in a scheme to distribute controlled substances throughout the United States via the dark web, U.S. Attorney Phillip A. Talbert announced.
William James Farber, aka Bill Danzerian, 37, of Los Angeles, and Bryan Anthony Lemons, 29, of Los Angeles, were charged with conspiracy to possess and distribute controlled substances and conspiracy to launder money. Richard Thomas Martinsen, 29, of Studio City; Michael Angelo Palma, 22, of Los Angeles; Michele Pickerell, 47, of Altadena; and Faysal Mustafa Alkhayat, 31, of Woodland Hills, were charged with conspiracy to possess and distribute controlled substances.
According to court documents, Farber and his co-conspirators, operating under the name PureFireMeds, sold narcotics including marijuana, cocaine, oxycodone, hydrocodone, psilocybin, MDMA (Ecstasy), LSD, Xanax, and ketamine on dark web marketplaces, including Silk Road and Pandora. After Silk Road was shut down by law enforcement in October 2013, it is alleged that Farber and his co-conspirators began selling on the AlphaBay dark web marketplace under the name HumboldtFarms. It became one of the largest vendors on AlphaBay, allegedly completing more than 78,000 orders of marijuana on the site to customers throughout the United States and the world. Palma, Martinsen and others allegedly used Pickerell’s home to assemble an estimated 1,000 parcels of marijuana a week that were mailed throughout the United States. Farber and Lemons allegedly exchanged at least $7 million in bitcoin for cash that was allegedly the proceeds of the HumboldtFarms drug distribution.
Dark web sites such as AlphaBay operate on “The Onion Router” or “TOR” network, a special network of computers on the internet, distributed around the world, that is designed to conceal the true Internet Protocol (IP) addresses of the computers accessing the network, and, thereby, the locations and identities of the network’s users and computer servers hosting the websites, which are referred to as “hidden services.” The “hidden services” have complex web addresses, generated by a computer algorithm, ending in “.onion” and can only be accessed through specific web browser software designed to access the TOR network. AlphaBay was shut down by U.S. law enforcement on July 5, 2017, and is no longer in operation.
This case is the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the U.S. Postal Inspection Service in Los Angeles, the Los Angeles Police Department, and the Bakersfield Police Department with assistance from the Los Angeles Joint Regional Intelligence Center. Assistant U.S. Attorneys Grant B. Rabenn and Ross Pearson are prosecuting the case.
This case was 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.
If convicted of conspiracy to possess controlled substance, all six defendants face a maximum statutory penalty of 40 years in prison and a $5 million fine. If convicted of conspiracy to distribute controlled substance, each defendant faces a maximum statutory penalty of five years in prison and a $250,000 fine. If convicted of the money laundering conspiracy, Farber and Lemons each face a maximum statutory penalty of 20 years in prison and a fine up to $500,000 or up to twice the value of the property involved in the transactions, whichever is greater. Any sentence, however, would be determined at the discretion of the district court after considering any applicable statutory factors and the Federal Sentencing Guidelines. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Fresno Man Charged with Laundering over $800,000 in Marijuana Trafficking ProceedsRead the Press Release
FRESNO, Calif. — A federal grand jury returned a seven-count indictment today against Omar Manuel Ramirez, 34, of Fresno, charging him with conspiracy to distribute marijuana, manufacture of marijuana, money laundering conspiracy, and money laundering, U.S. Attorney Phillip A. Talbert announced.
According to court documents, Ramirez grew marijuana in Fresno County and shipped it to states around the country, including Illinois, Virginia, and North Carolina. Ramirez’s customers deposited their payments for the marijuana into a bank account in Ramirez’s name. Typically within a day, Ramirez withdrew the deposits in Fresno. Over the course of two and a half years, Ramirez and co-conspirators used this technique to launder more than $800,000 in proceeds from selling marijuana.
This case is the product of an investigation by the Drug Enforcement Administration, the Internal Revenue Service Criminal Investigation, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and the Fresno County Sheriff’s Office. Assistant U.S. Attorney Ross Pearson is prosecuting the case.
If convicted, Ramirez faces a mandatory minimum penalty of five years in prison, a maximum statutory penalty of 40 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.
Four Defendants Indicted for Growing Marijuana in Lassen National ForestRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a three-count indictment today against Guillermo Rubio-Alvarado, 43; Omar Rubio-Alvarado, 28; Sebastian Rubio-Aboyte, 23, all of Sinaloa, Mexico; and Fortino Chavarin-Parra, 19, of Jalisco, Mexico, charging them with conspiring to manufacture marijuana and manufacturing marijuana, and damaging public lands, U.S. Attorney Phillip A. Talbert announced.
According to court documents, all four defendants were arrested by law enforcement on July 31, 2017, following a search of a marijuana-cultivation site in the Lassen National Forest in Tehama County. Law enforcement eradicated approximately 15,000 marijuana plants at this cultivation site. A large quantity of additional plants was left undisturbed after agents discovered they were allegedly contaminated with Carbofuran (Furadan), a dangerous neurotoxic pesticide that has been banned in the United States, Canada, and the European Union.
This case is the product of an investigation by the United States Forest Service, the Tehama County Sheriff’s Office, and the California Department of Fish and Wildlife. Assistant U.S. Attorney Katherine T. Lydon is prosecuting the case.
If convicted of the marijuana charges, the defendants face a mandatory minimum penalty of 10 years in prison, and a maximum penalty of life in prison and a $10 million fine. If convicted of damaging public lands, all four 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 several variables. The charges are only allegations; the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.
Marijuana Grower Sentenced to 5 Years in Prison for Cultivation in Sequoia National ForestRead the Press Release
FRESNO, Calif. — Abel Toledo-Villa (Toledo), 35, a native and citizen of Mexico, was sentenced today by Chief U.S. District Judge Lawrence J. O’Neill to five years in prison, U.S. Attorney Phillip A. Talbert announced.
Toledo pleaded guilty in May to conspiring to manufacture, distribute and possess with intent to distribute 3,850 marijuana plants grown in the Sequoia National Forest in Kern County. When law enforcement officers searched the grow site, Toledo was found leaving the area in a vehicle that contained about 8.5 pounds of processed marijuana, fertilizer, a rifle, and 106 rounds of ammunition.
At the grow site, agents found significant deforestation, large piles of trash, discarded chemical bottles, and miles of plastic irrigation lines. During the course of the offense, Toledo caused damage to public land and natural resources in the amount of $5,233. In sentencing Toledo, Judge O’Neill ordered Toledo to make restitution to the U.S. Forest Service in that amount.
This case was the product of an investigation by the U.S. Forest Service, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Southern Tri-County High Intensity Drug Trafficking Area (HIDTA) task force, California Department of Justice’s Campaign Against Marijuana Planting (CAMP), California Department of Fish and Wildlife, Kern County Sheriff’s Office, Riverside County Sheriff’s Department, Fontana Police Department, and Victorville Police Department. Assistant U.S. Attorney Karen Escobar prosecuted the case.
Last of 4 Defendants Sentenced for Growing Marijuana at an Archaeological Site in the Sequoia National ForestRead the Press Release
FRESNO, Calif. — Rafael Torres-Armenta (Torres), 30, a native and citizen of Mexico, was sentenced today to three years and one month in prison for conspiring to manufacture, distribute and possess with intent to distribute marijuana in connection with a large-scale cultivation operation that impacted a prehistoric site, U.S. Attorney Phillip A. Talbert announced.
Chief U.S. District Judge Lawrence J. O’Neill also ordered Torres to pay $5,233 in restitution to the U.S. Forest Service for the damage to public land and natural resources caused by their cultivation activities.
According to court documents, Torres conspired with Carlos Piedra-Murillo (Piedra), 30, of Michoacán, Mexico, Juan Carlos Lopez, 33, of Flagstaff, Arizona; and Javier Garcia-Castaneda (Garcia), 38, of Michoacán, Mexico, to cultivate marijuana in the Domeland Wilderness. The Domeland Wilderness is a federally designated wilderness area about 55 miles northeast of Bakersfield and is known for its many granite domes and unique geologic formations. Law enforcement officers seized over 8,000 marijuana plants, 17 pounds of processed marijuana, a .22‑caliber rifle, a pellet rifle, and hundreds of rounds of .22‑caliber ammunition.
In June 2017, Piedra was sentenced to two years and one month in prison, Lopez was sentenced to five years in prison, and Garcia was sentenced to three years and one month in prison.
The marijuana cultivation operation caused extensive environmental damage. It covered about 10 acres and was within the burned area of the 2000 Manter Fire. Some of the new vegetation and trees that sprouted after the fire had been cut and trimmed to make room for the marijuana plants. Water was diverted from a tributary stream of Trout Creek, a major tributary to the Kern River. Fertilizer and pesticides, including illegal carbofuran and zinc phosphide, highly toxic pesticides from Mexico, were found at the site. Large piles of trash were found near the campsite. The moving of soil to accommodate a basin around each marijuana plant caused extensive damage to a large prehistoric Tűbatulabal archaeological site. Holes were dug in the middle of the archaeological site and artifacts were found scattered on the surface among the marijuana plants.
This case was the product of an investigation by the U.S. Forest Service, the Bureau of Land Management, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and the California Department of Fish and Wildlife. Assistant U.S. Attorney Karen Escobar prosecuted the case.
Illinois Resident Pleads Guilty to Synthetic Drug ConspiracyRead the Press Release
FRESNO, Calif. — Timothy Ortiz, aka Michael Fitton, 46, of Waukegan, Illinois, pleaded guilty today for his role in a large-scale smokeable synthetic cannabinoids trafficking organization that shipped misbranded synthetic drugs interstate from a processing lab in Millbrae, California, U.S. Attorney Phillip A. Talbert announced.
Smokeable synthetic cannabinoids, commonly known as “spice” or “K2,” is falsely touted as legal alternatives to controlled substances. In some instances, they are far more lethal.
In pleading guilty, Ortiz acknowledged that from 2011 to 2013, he was involved in the importation of raw synthetic cannabis from China that was processed and distributed from warehouses in Pensacola, Florida and Millbrae and Stockton, California. Ortiz set up the Millbrae processing lab and served as its director of operations and production manager. The drugs were sold under various brand names such as “Bizarro,” “Orgazmo,” or “Headhunter.” To evade detection by federal law enforcement, Ortiz and his co-defendants deliberately misbranded and marketed their product as “potpourri” or “herbal incense” that they claimed was “not for human consumption,” even though they knew that it would be used as an intoxicant.
According to the plea agreement, Ortiz and his co-defendants shipped at least 24 tons of misbranded smokeable synthetic cannabinoids that contained the synthetic drugs AM-2201 and XLR11 to smoke shops and retail outlets throughout the United States. They generated in excess of $33 million in sales. At the time of the illicit enterprise, AM-2201 was a schedule I controlled substance and XLR11 was a controlled substance analogue that was placed under schedule I as a controlled substance in May, 2013. Ortiz has agreed to forfeit $137,110, which represents the proceeds that he derived during his participation in the illegal operation. Ortiz and his co‑defendants distributed the drugs to the Stuffed Pipe smoke shops in the Central Valley and to numerous retail establishments throughout the United States.
This case is the product of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation by the Drug Enforcement Administration; the Internal Revenue Service, Criminal Investigation, and the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), with assistance from the Food and Drug Administration and the Fresno County Sheriff’s Office. The OCDETF program was established in 1982 to mount a comprehensive attack against organized drug traffickers. Today, the OCDETF program is the centerpiece of the U.S. Attorney General’s strategy to reduce the availability of drugs by disrupting and dismantling major drug trafficking organizations and money laundering organizations and related criminal enterprises. This OCDETF investigation was also part of a nationwide law enforcement effort coordinated by the DEA’s Special Operations Division. Assistant U.S. Attorney Karen A. Escobar is prosecuting the case.
Ortiz is scheduled for sentencing on October 30, 2017. He faces a maximum statutory penalty of three years in prison and a $250,000 fine, or twice the gross gain from the crime. 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-defendants Timothy New, 34, of Pensacola, Florida, pleaded guilty to the fraudulent shipment of misbranded drugs, and Natalie Middleton, 31, of Clovis, pleaded guilty to money laundering. In December 2016, New was sentenced to two and a half years in prison and Middleton was sentenced to four months in prison. Douglas Jason Way, aka Jason Way, 44, of Evanston, Illinois, is scheduled for a jury trial in February 2018. Way is charged with multiple controlled substance offenses and the misbranding charge, and if found guilty, faces a maximum penalty of 20 years in prison and a $10 million fine. The charges against him are only allegations; Way is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Fresno Man Sentenced to 18 Months in Prison for a Conspiracy to Distribute MarijuanaRead the Press Release
FRESNO, Calif. — U.S. District Judge Anthony W. Ishii sentenced Iran Dennis “Denny” Foster, 46, of Fresno, today to 18 months in prison for conspiring to distribute and possessing with intent to distribute marijuana, U.S. Attorney Phillip A. Talbert announced.
Iran Foster is one of seven defendants named in a multicount indictment returned on April 9, 2015, charging them with a variety of drug trafficking offenses. One of the defendants was former Fresno deputy police chief Keith Foster. His nephew, Iran Foster, regularly traveled to Northern California to purchase marijuana for distribution. Iran Foster pleaded guilty to one count of conspiracy to distribute and possess with intent to distribute marijuana. According to the plea agreement, Iran Foster admitted that his primary source of income was derived from marijuana sales.
Keith Foster proceeded to trial, and on May 23, 2017, a jury found him guilty of conspiracy to distribute and possess with intent to distribute heroin and conspiracy to distribute and possess with intent to distribute marijuana. He is scheduled to be sentenced on November 13, 2017.
This case is the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Federal Bureau of Investigation. Assistant U.S. Attorneys Melanie L. Alsworth and Dawrence W. Rice Jr. are prosecuting the case.
Five co-defendants have pleaded guilty and have either been sentenced or are awaiting sentencing. Ricky Reynolds is scheduled to be sentenced on November 13, 2017. Randy Flowers, 51, was sentenced on July 10, 2017 to two years and nine months in prison. On October 11, 2016, Rafael Guzman, 43, of Fresno was sentenced to three years and four months in prison. Jennifer Donabedian, 38, of Fresno, pleaded guilty to concealing a felony and served 12 months’ probation. Sarah Ybarra, 39, of Fresno, pleaded guilty to conspiracy to distribute marijuana and served one year in prison.
Bay Area Man Sentenced to Prison for Participating in Mortgage Fraud Scheme Involving Sacramento HouseRead the Press Release
FRESNO, Calif. — Mahendra Prasad, 55, of Fremont, was sentenced today by U.S. District Judge Lawrence J. O’Neill to 15 months in prison and ordered to pay $328,000 in restitution for his role in a mortgage fraud scheme, U.S. Attorney Phillip A. Talbert announced.
On May 22, 2017, Prasad pleaded guilty to one count of mail fraud affecting a financial institution. According to court documents, in 2006, Prasad caused loan application packages that contained false statements to be submitted to a mortgage lender in order to buy a property in Sacramento. The false statements included statements concerning Prasad’s employer, income, and purported intention to occupy the property as his primary residence. Following his fraudulent purchase, Prasad, with the assistance of others, rented the property as Section 8 housing and collected rents. Prasad did not reside in or occupy the property as his primary residence.
In 2013, Prasad applied to a bank to sell the property to another person at a loss to the bank. He falsely claimed to the bank that the “short” sale was an “arm’s length” transaction, and that neither he nor the buyer were related by commercial enterprise. Prasad’s conduct caused a loss to a financial institution of approximately $328,000.
This case was the product of an investigation by the Federal Bureau of Investigation, the Stanislaus County District Attorney’s Office, the Federal Housing Finance Agency Office of Inspector General, and the Federal Deposit Insurance Corporation Office of Inspector General, with assistance from the Office of the Special Inspector General for the Troubled Asset Relief Program. Assistant U.S. Attorneys Henry Z. Carbajal III and Christopher D. Baker are prosecuting the case.
Co-defendants Jyoteshna Karan, Praveen Singh, Sunita Singh and Nani Isaac are scheduled for a jury trial in U.S. District Court in Fresno, on Monday, December 11, 2017. The charges against the four remaining defendants are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Bakersfield Man Sentenced for Structuring over $4.2 M in Proceeds of Synthetic Drug SalesRead the Press Release
FRESNO, Calif. — Ramsey Jeries Farraj, 41, of Bakersfield, was sentenced today to 18 months in prison for conspiring with his former business partner, Majed Bashir “Mike” Akroush, 49, also of Bakersfield, to structure $4,204,965 obtained from the sale of smokeable synthetic drugs, U.S. Attorney Phillip A. Talbert announced.
Smokable synthetic cannabinoids are commonly known as K-2 or spice. They are sometimes marketed as incense or potpourri but contain powerful hallucinogenic chemicals. Consumption of smokable synthetic cannabinoids can lead to illness or even death.
Farraj’s sentence follows his guilty plea in May. According to court documents, Farraj and Akroush obtained synthetic cannabinoids from Haitham Eid Habash, aka Eddie Habash, 54, of Hawthorne, and Zaid Elodat, 30, of Lawndale, and sold the drugs over the internet through their online businesses Blue Whale and World of Incense. They deposited over $4.2 million in proceeds in amounts under $10,000 into various bank accounts they maintained in order to avoid filing a currency transaction report, or CTR, that is required for amounts over $10,000.
In sentencing Farraj, U.S. District Judge Dale A. Drozd ordered the forfeiture of over $5 million seized from various bank accounts, seven properties, a 1962 Chevrolet Impala, one Rolex watch, and the domain names and websites utilized to conduct the illicit drug sales.
The case is part of a nationwide synthetic drug takedown in connection with Project Synergy Phase III that targeted the synthetic designer drug industry, including wholesalers, money launderers and other criminal facilitators. In connection with this case, federal law enforcement officers arrested and charged Farraj, along with Akroush, Habash, and Elodat, and executed 12 search warrants in Bakersfield and the Los Angeles area. Over 1,000 pounds of synthetic drugs, nearly a half a million dollars in cash and four firearms were seized.
Elodat previously pleaded guilty and is scheduled for sentencing later this year. The charges against Akroush and Habash are pending; they are scheduled to appear in federal court in Fresno for a status conference on September 25. If convicted, they face a maximum statutory penalty of 20 years in prison and a $1 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. As to Akroush and Habash, the charges are only allegations; they are presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case is the product of an investigation by the U.S. Drug Enforcement Administration, the Internal Revenue Service-Criminal Investigation, and the California Highway Patrol, with assistance from the Federal Bureau of Investigation, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); the U.S. Postal Inspection Service, the California Department of Motor Vehicles, the Kern County Probation, the Kern County Sheriff’s Office, the Bakersfield Police Department, and the Los Angeles County Sheriff’s Office. Assistant U.S. Attorneys Karen A. Escobar, Grant B. Rabenn, and Jeffrey A. Spivak are prosecuting the case.
This case was also designated an Organized Crime Drug Enforcement Task Force (OCDETF) case. 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.
Yuba County Man Pleads Guilty to Aggravated Identity TheftRead the Press Release
SACRAMENTO, Calif. — Earnest Marshall Badman, 31, of Marysville, pleaded guilty today to aggravated identity theft, U.S. Attorney Phillip A. Talbert announced.
According to court documents, in January 2016 and February 2016, Badman executed a scheme to defraud banks by using credit cards and checks and identification documents of others obtained from stolen mail and burglaries.
On February 9, 2016, Badman was arrested after a high speed chase in a stolen vehicle in Colusa County. The vehicle pursuit ended in the backyard of an Arbuckle home. Badman attempted to flee on foot but was arrested. At the time of his arrest, Badman possessed burglary tools, credit cards in the names of others, and stolen mail. He possessed the mail and identity information of over 40 victims and over 15 different access devices and credit cards for fraudulent use.
This case is the product of an investigation of the U.S. Postal Inspection Service with assistance from the Yuba County Sheriff's Office, California Highway Patrol, Butte County Sheriff’s Office, and the Yuba County Probation Department. Assistant U.S. Attorney Michelle Rodriguez is prosecuting the case.
Badman is scheduled to be sentenced by U.S. District Judge Garland E. Burrell Jr. on November 3, 2017. Badman faces a minimum mandatory penalty of two 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 Man Sentenced to 5.5 Years in Prison for Illegally Manufacturing and Selling Assault RiflesRead the Press Release
SACRAMENTO, Calif. — Luis Cortez-Garcia, 44, of Sacramento, was sentenced today to five and a half years in prison by U.S. District Judge Garland E. Burrell Jr. for unlawful manufacturing and sales of firearms, possession of a machine gun, and possession of a unregistered firearm, U.S. Attorney Phillip A. Talbert announced.
On December 9, 2016, Judge Burrell sentenced Luis Cortez-Garcia’s brother and co‑defendant Emiliano Cortez‑Garcia to six years in prison for unlawful manufacturing and dealing in firearms, possession of a machine gun, and possession of an unregistered firearm.
According to court records, Cortez-Garcia ran a firearm parts business called LCG AR‑15 Parts and Custom Accessories on Florin Road in Sacramento. Through this business, he sold AR-15-style firearms that were manufactured in the metal shop at the rear of the business. Cortez-Garcia did not have a license to manufacture or sell firearms and as an illegal alien and a felon, Cortez-Garcia was prohibited from possessing firearms.
During the investigation, undercover agents and at least one convicted felon purchased manufactured-to-order assault weapons from the defendants. These firearms did not have any manufacturer markings or serial numbers, making them untraceable should they be involved in criminal activity. During a search of the business on October 9, 2013, law enforcement officers seized 312 guns, including multiple fully automatic assault rifles, illegal short-barreled rifles, and silencers.
Most firearm parts are not subject to regulation by ATF and can be bought and sold without reporting the sales and without requiring a background check. According to court documents, the defendants and others involved in the scheme sold the parts necessary to assemble a firearm. The parts included a metal casting of an incomplete lower receiver called a “blank,” which is not considered a firearm by ATF. The blank is eventually converted into a lower receiver using a drill press or automated machine that creates the precise shape and space necessary for the lower receiver to accept the parts that will allow the firing of a projectile. These parts (e.g., the hammer, bolt or breechblock, and firing mechanism) are the internal mechanical parts that combine with a trigger, firing pin, and other parts to form a functioning firearm. Once the blank is milled into a completed lower receiver, it is considered a firearm by statute even if there is no barrel, handle, or trigger, and it is subject to federal regulation.
According to court records, once a customer purchased the firearm parts including a blank lower receiver, the customer was directed to Emiliano Cortez-Garcia who operated the metal shop at the business. Once Emiliano Cortez-Garcia had completed machining the lower receiver, he or Luis Cortez-Garcia would assemble the completed AR-15. Customers paid cash to receive a complete firearm that bore no serial number. No ATF paperwork or background checks were completed. During the course of the investigation, ATF conducted seven undercover purchases of AR-15 firearms.
This case was the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and the California Department of Justice, Bureau of Firearms with assistance from the Sacramento Police Department, the Sacramento County Sheriff’s Department, and the California Highway Patrol. Assistant U.S. Attorney Justin Lee prosecuted the case.
Two Men Charged with Growing Marijuana in Stanislaus National ForestRead the Press Release
FRESNO, Calif. — A federal grand jury returned a two-count indictment today against Fresno residents Alfonso Arreguin Alvarado, 20, and Victor Barragan Gonzalez, 33, charging them with cultivating marijuana and conspiring to cultivate marijuana, U.S. Attorney Phillip A. Talbert announced.
According to court documents, the clandestine marijuana grow in the Stanislaus National Forest was seen by the air in June 2017. When law enforcement officers entered the grow site on August 1, 2017, the defendants were found processing harvested marijuana. The officers eradicated over 3,000 marijuana plants in two connected plots.
This case is the product of an investigation by the U.S. Forest Service. Assistant U.S. Attorney Laurel J. Montoya is prosecuting the case.
If convicted, both defendants face a mandatory minimum penalty of 10 years in prison, with a maximum of up to 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 defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Solano County Man Indicted for Possessing Marijuana and Cocaine for Distribution Near a School ZoneRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a three-count indictment today against Maurice Antoine Jefferson, 42, of American Canyon, charging him with possessing marijuana and cocaine for distribution within 1,000 feet of the Will C. Wood High School on Marshall Road in Vacaville and for possessing a firearm as a felon, U.S. Attorney Phillip A. Talbert announced.
According to court documents, Jefferson was the sole proprietor of Shredders Federation clothing store in Vacaville and allegedly used the business as a cover to distribute marijuana and cocaine to high school students and others and as a front for money laundering. When law enforcement officers executed a search warrant at the store in August 2016, they found 6.4 pounds of marijuana, 129 grams of cocaine, and other indicia of drug distribution. Jefferson was carrying a 9 mm pistol with him when Vacaville Police Officers arrived at the business. Jefferson has a felony conviction and is not allowed to possess any firearms.
This case is the product of an investigation by the Federal Bureau of Investigation’s Solano County Violent Crime Task Force, the Vacaville Police Department and the Napa Special Investigations Bureau with assistance from the Solano County District Attorney’s Office. Assistant U.S. Attorney Jason Hitt is prosecuting the case.
If convicted of possessing marijuana with intent to distribute near a school zone, Jefferson faces a maximum statutory penalty of 20 years in prison and a $1 million fine. If convicted of possessing cocaine with intent to distribute near a school zone, Jefferson faces a maximum statutory penalty of 60 years in prison and a $20 million fine. If convicted of possessing a firearm as a felon, he faces a maximum statutory penalty of 10 years in prison and a $250,000 fine. Any sentence would be determined at the discretion of the district court after considering any applicable statutory factors and the Federal Sentencing Guidelines. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
San Joaquin County Man Convicted of 5 Felony Counts in International Drug-Trafficking ConspiracyRead the Press Release
SACRAMENTO, Calif. — A jury found Francisco Felix, 44, of Mountain House, guilty today of five felony counts for his role in leading a large, multi-defendant drug-trafficking conspiracy that moved significant quantities of methamphetamine from Mexico into California and throughout the United States, and that controlled at least three marijuana grows in the Central Valley of California, U.S. Attorney Phillip A. Talbert announced.
On February 13, 2014, Felix and 13 other defendants were charged with a number of drug-trafficking crimes. Today the jury found Felix guilty on all five counts submitted to the jury: one count of conspiracy to distribute methamphetamine; one count of conspiracy to manufacture, distribute, and to possess with intent to distribute marijuana; and three counts of using a telephone to facilitate a drug-trafficking crime. Felix is the only defendant to go to trial; 10 co-defendants pleaded guilty and three are fugitives.
This case arose from a year-long investigation that revealed a drug-trafficking organization with connections to the state of Sinaloa in Mexico. The organization was based in the Central Valley of California, and actively imported large amounts of methamphetamine into the United States. Evidence at trial established that Felix and his network were capable of importing 50 pounds of methamphetamine (with a wholesale value of approximately $200,000) into the United States every eight days.
In addition, the evidence at trial also established that the organization was cultivating substantial quantities of marijuana at many properties in both Stanislaus and San Joaquin counties.
Over nine months, investigators acquired over 80 pounds of methamphetamine, approximately 20 pounds of marijuana, and six firearms, including three assault rifles and a “Desert Eagle” .50-caliber handgun, from members of the organization. Finally, on the day of Felix’s arrest, investigators seized over 2,100 growing marijuana plants at properties under Felix’s control.
This case is the product of an investigation by the California Department of Justice’s Mountain and Valley Marijuana Investigation Team (MAVMIT), under the auspices of the Central Valley High Intensity Drug Trafficking Area (HIDTA) Program; U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); the Placer County District Attorney’s Office; the Placer County Special Investigations Unit (SIU); the Sheriff’s Departments from Placer, El Dorado and Sacramento Counties; the California Department of Fish and Wildlife; the California Department of Corrections and Rehabilitation; the California National Guard, Counterdrug Task Force; and the Yolo Narcotic Enforcement Team (YONET). In addition, at the conclusion of the investigation, hundreds of law enforcement officers from several states took part in a 28-location takedown.
Assistant U.S. Attorneys Justin Lee, Ross Naughton, and Michael Beckwith are prosecuting the case.
This case was 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.
Felix is scheduled to be sentenced by U.S. District Judge William B. Shubb on December 4, 2017. Felix faces a maximum statutory penalty of life in prison, with a mandatory minimum sentence of 10 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.
Merced Man Pleads Guilty to Distributing Marijuana and Cocaine Nationwide Through Dark Web MarketplacesRead the Press Release
FRESNO, Calif. — David Ryan Burchard, 40, of Merced, pleaded guilty today to conspiracy to distribute and to possess with intent to distribute marijuana on dark web marketplaces, U.S. Attorney Phillip A. Talbert announced.
According to the criminal complaint, Burchard, using the moniker “Caliconnect,” was a major narcotics vendor on the Silk Road and other dark web marketplaces, including Agora, Abraxas, and AlphaBay. Dark-web marketplaces are operated on computer networks designed to conceal the true Internet Protocol (IP) address of the computers accessing the network. In addition, dark web marketplaces allow for payments to be made only in the form of digital currency, most commonly in bitcoin. While not inherently illegal, digital currency is used by dark web marketplaces because online transactions in digital currency can be completed without a third-party payment processor and are therefore perceived to be more anonymous and less vulnerable to law enforcement scrutiny.
According to the complaint, Burchard accepted orders for marijuana and cocaine on dark web marketplaces and then mailed the narcotics from post offices in Merced and Fresno County to his customers throughout the United States. Burchard was paid primarily in bitcoin. Burchard conducted sales in excess of $1.4 million on Silk Road before that dark web marketplace was closed. The complaint alleges that after federal law enforcement shut down the Silk Road website and arrested its founder in October 2013, Burchard transferred his narcotics business to Agora and then to AlphaBay, which are other dark web marketplaces.
This case is the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Internal Revenue Service-Criminal Investigation, the U.S. Postal Inspection Service, and the Fresno Police Department. Assistant U.S. Attorney Grant Rabenn is prosecuting the case.
This case was 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.
Burchard is scheduled to be sentenced by U.S. District Judge Lawrence J. O’Neill on October 30, 2017. Burchard faces a maximum statutory penalty 20 years in prison and a $1 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.
Former Kern County Sheriff’s Deputies Sentenced for Marijuana TraffickingRead the Press Release
FRESNO, Calif. — Two former deputies with the Kern County Sheriff’s Office were sentenced today for conspiracy to distribute and possess with the intent to distribute marijuana, U.S. Attorney Phillip A. Talbert announced.
U.S. District Judge Lawrence J. O’Neill sentenced Logan August, 30, of Bakersfield, to three years’ probation, $16,200 forfeiture, 1,500 hours of community service. Derrick Penney, 34, of Star, Idaho, received a sentence of three years’ probation, $1,200 forfeiture, 250 hours of community service.
U.S. Attorney Talbert stated: “The defendants in this case caused a significant breach of the public’s trust when they committed these crimes. Not only did they betray the community they were sworn to serve, but also their fellow, hard-working officers who protect the Kern County community every day. My office is thankful for the hard work and cooperation of our law enforcement partners in bringing this conduct to light. We are committed to investigating and prosecuting anyone who abuses their law enforcement position for their own selfish gain."
“An officer’s badge is the ultimate symbol of integrity, pride, trust, and authority to protect and serve the public. Every day across America thousands of brave men and women in law enforcement uphold the meaning of that symbol by working tirelessly and placing themselves in harm’s way to serve their communities. The criminal behavior demonstrated by Logan August and Derrick Penney endangered the public and their colleagues. Both August and Penney will now face the legal consequences for their actions,” stated DEA Special Agent in Charge John J. Martin. “DEA will work with our law enforcement counterparts to hold accountable those who tarnish the badge and betray public trust.”
According to court documents, between June 2014 and October 2014, while working with the Kern County Sheriff’s Office (KCSO) as sworn peace officers, August and Penney abused their positions of trust and authority by conspiring with former Bakersfield Police Department detective Patrick Mara and an individual who previously worked as a confidential informant for August, and others, to steal marijuana from a KCSO storage unit and sell it for unlawful personal gain. The marijuana had previously been seized during investigations into marijuana grown on public and private lands. Once August and Penney obtained the marijuana from the storage unit, they had it processed (trimmed) into approximately eight pounds of usable marijuana. August then delivered it to his former confidential informant, who sold it and provided August with part of the proceeds from those sales. August then shared the proceeds with Penney and Mara. August and Penney received approximately $1,200 each from the sale of this marijuana.
Additionally, according to August’s plea agreement and other court documents, between March 2014 and December 2014, while a sworn peace officer assigned to the KCSO Major Vendor Narcotics Unit, August routinely participated in law enforcement marijuana eradication operations on public and private lands. During this time, August abused his position of trust and authority as a KCSO deputy by conspiring with a former confidential informant to take marijuana plants and processed marijuana from these law enforcement marijuana eradication operations and sell that marijuana for unlawful personal gain. On 10 separate occasions between March 2014 and December 2014, August wrongfully took marijuana from a law enforcement eradication operation for personal gain. August distributed to his former confidential informant the equivalent of 25 pounds of usable marijuana wrongfully taken from these law enforcement eradication operations. August received $15,000 from the sale of this marijuana.
August and Penney have agreed to forfeit the proceeds of the marijuana trafficking.
This case was the product of an investigation by the Federal Bureau of Investigation, the Drug Enforcement Administration, and the Bakersfield Police Department. The Kern County Sheriff’s Office fully cooperated in this investigation. Assistant U.S. Attorneys Angela Scott and Brian Delaney are prosecuting the case.
Former El Dorado Hills Man Sentenced to Prison for Tax EvasionRead the Press Release
SACRAMENTO, Calif. — Kamyar “Kami” Soltani, 47, of Sacramento, formerly of El Dorado Hills, was sentenced today by U.S. District Judge Garland E. Burrell Jr. to six months in prison, six months home confinement with electronic monitoring, and ordered to pay $150,446 in restitution for tax evasion, U.S. Attorney Phillip A. Talbert announced.
“All Americans have a duty to pay their fair share,” said Michael T. Batdorf, Special Agent in Charge, IRS Criminal Investigation. “Soltani took advantage of the system and obtained refunds to which he was not entitled while all along living a lavish lifestyle. In today’s economic environment, it’s more important than ever that the American people feel confident that everyone is playing by the rules and paying the taxes they owe.”
According to court documents, Soltani attempted to evade his tax obligations for tax years 2005, 2006, and 2007. Soltani worked in the used car sales industry. In each of the tax years in question, Soltani received taxable income between $229,000 and $296,000 and failed to file timely income tax returns for the tax years of 2005 and 2006. He ultimately filed tax returns for all three tax years in March 2008, but those returns only reported income of approximately $14,000 to $18,500 in each year. As a result of his conduct and tax filings, Soltani evaded $150,446 in federal income taxes, paid no taxes for those years, and in each year fraudulently claimed and received tax refunds of over $2,000 by falsely claiming that he was entitled to an Earned Income Tax Credit reserved for taxpayers with low and moderate income. Soltani admitted he acted willfully to evade taxes, in part, through his filing of false tax returns and by receiving his income in the form of cash and through indirect payments made to third parties.
This case was the product of an investigation by Internal Revenue Service, Criminal Investigation. Assistant U.S. Attorneys Nirav K. Desai and Christopher S. Hales prosecuted the case.
Two Charged with Attempting to Sell 2 Kilograms of Heroin in BakersfieldRead the Press Release
FRESNO, Calif. — A federal grand jury returned a three-count indictment today against Omar Felix-Corrales, 38, and Valeria Silvas Villarreal, 23, both of Mexico, charging them with conspiracy to distribute and possess with intent to distribute heroin, and Felix-Corrales alone with possession of a firearm in relation to a drug trafficking crime, U.S. Attorney Phillip A. Talbert announced.
According to court documents, On July 28, 2017, the defendants met with a law enforcement informant in a home improvement store parking lot in Bakersfield to sell the informant two kilograms of China-white heroin for $56,000. When the informant gave a pre‑arranged signal to nearby agents that drugs were present, agents rushed to the scene and arrested the defendants. At the time of his arrest, Felix-Corrales was found to have a loaded 9 mm Berretta pistol tucked into the waistband of his pants.
This case is the product of an investigation by the Drug Enforcement Administration, the California Highway Patrol, and the Bakersfield Police Department. Assistant U.S. Attorney Brian K. Delaney is prosecuting the case.
If convicted, the defendants face 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.
Bakersfield Man with Sex Offense Priors Found Guilty of Receiving and Possessing Child PornographyRead the Press Release
FRESNO, Calif. — After a three-day trial, a federal jury found Colin Lovette Bosby, 50, of Bakersfield, guilty today of one count of receiving child pornography and two counts of possessing child pornography, U.S. Attorney Phillip A. Talbert announced. The trial was held before Chief U.S. District Judge Lawrence J. O'Neill.
According to evidence presented at trial, Bosby received child pornography through a peer-to-peer file-sharing program and possessed child pornography on thumb drives. Evidence at trial showed that the defendant sought out the child pornography by using search terms that are associated with the material.
This case is the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant U.S. Attorneys Megan A. S. Richards and Vincenza Rabenn are prosecuting the case.
Bosby is scheduled to be sentenced by Chief Judge O'Neill on October 25, 2017. Bosby faces a maximum statutory penalty of 40 years in prison and a $250,000 fine for receipt and distribution of child pornography, and 20 years for each count of possession of child pornography. In addition, because Bosby has a prior sex offense, he faces mandatory minimum prison sentences of 15 years for receipt and 10 years for possession of child pornography. 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 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.
Former City of Vallejo Employee Pleads Guilty to Accepting a BribeRead the Press Release
SACRAMENTO, Calif. — Donald Burton, 51, of Vallejo, pleaded guilty today for his part in a bribery scheme involving city contracts, U.S. Attorney Phillip A. Talbert announced.
According to court documents, Burton was previously employed in the Public Works Engineering Division of the City of Vallejo as the landscape manager. In that position, Burton regularly contracted with local landscape companies to provide services for Vallejo. The City of Vallejo received substantial federal funding, including over $500,000 in Community Development Block Grants from the U.S. Department of Housing and Urban Development.
In the Spring of 2017, Burton solicited a bribe from the owner of a company that provides maintenance services, requesting a 10 percent kickback in exchange for steering contracts to that company. The business owner complained to the Federal Bureau of Investigation and assisted in the investigation by meeting with Burton in an undercover capacity. During those meetings, Burton directed that additional days of work be added to contracted jobs so that Burton and the owner could divide up the profit. Burton stated that the excess amount in the contracts would generally add up to $5,000, and that Burton would take $2,000.
According to the plea agreement, the business owner provided the written contracts that inflated the number of days required to do a job from 10 days to 15, and Burton approved and signed the contracts. On June 7, 2017, the business owner met with Burton and gave him the $2,000 bribe payment. Burton was arrested after taking the payment.
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorney Jared C. Dolan is prosecuting the case.
Burton is scheduled to be sentenced by U.S. District Judge John A. Mendez on November 7, 2017. Burton faces a maximum statutory penalty of 10 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.
Barstow Man Charged with Killing a California CondorRead the Press Release
BAKERSFIELD, Calif. — A two-count criminal complaint was filed against Matthew Paul Gumz, 39, of Barstow, charging him with taking a California condor in violation of both the Endangered Species Act and the Migratory Bird Treaty Act, U.S. Attorney Phillip A. Talbert announced. Gumz made his initial appearance Monday before U.S. Magistrate Judge Jennifer L. Thurston and pleaded not guilty to both charges.
According to court documents, the California Department of Fish and Wildlife received an anonymous tip about the death of a male juvenile California condor. A U.S. Fish and Wildlife Service biologist located the dead condor, designated as Condor 780, on federal land in Kern County. Condor 780 had a large distinctive green tag on its left wing with “80” printed on it in large white numbers. On September 30, 2016, Gumz was deer hunting in the Bean Canyon area, which is managed by the Bureau of Land Management. Gumz field dressed a deer and hung it in a tree, and left. When he returned to the area, Gumz saw condors and other birds near his deer and allegedly shot and killed Condor 780 with a rifle.
The California condor is protected by the Endangered Species Act and the Migratory Bird Treaty Act. Condor 780 came from an egg laid at the World Center Birds of Prey in Boise, Idaho and was fostered in the wild by condors in a monitored nest in Southern California. The nest was managed by the Hopper Mountain National Wildlife Refuge as part of the California Condor Recovery Program.
This case is the product of an investigation by the U.S. Fish and Wildlife Service, the Bureau of Land Management, and the California Department of Fish and Wildlife. Assistant U.S. Attorney Laurel J. Montoya is prosecuting the case.
If convicted, Gumz faces a maximum statutory penalty of up to one year in prison and a $100,000 fine for the Endangered Species Act violation and up to six months in prison and a $15,000 fine for the Migratory Bird Treaty Act violation. Additionally, the court can order restitution and order the forfeiture of the firearm used in 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.
Former Truckee Resident Indicted for $1.7m Investment FraudRead the Press Release
SACRAMENTO, Calif. — Patrick Slavin, 55, formerly of Truckee, was arraigned today in federal court on a 21-count indictment charging him with mail and wire fraud for an investment scheme that he ran from 2008 through 2016, U.S. Attorney Phillip A. Talbert announced.
According to court documents, Slavin claimed to have developed a proprietary investment model that guaranteed returns of 12-18 percent that would be paid within one to two years of the investment. He persuaded some individuals to invest by representing that the money would be invested through a “social venture” fund or project that would earn returns by providing capital and services to nonprofit organizations. After the investments were made, Slavin assured investors that their money was earning profits. Based on these assurances, Slavin solicited additional investments or encouraged his investors to rollover their prior investments. In truth, Slavin used a large portion of the investors’ money to pay back other investors or for his own personal expenses and lost the rest in trading. Overall, investors lost at least $1.7 million.
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorney Todd A. Pickles is prosecuting the case.
If convicted, Slavin faces a maximum statutory penalty of 20 years in prison and a fine of $250,000 or twice the gross loss or gross gain from the fraud scheme. 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.
Three Sentenced to Prison for Running “Star Reliable Mortgage” Foreclosure Rescue Scam in Bakersfield, Visalia and SalinasRead the Press Release
FRESNO, Calif. — Three defendants were sentenced today for running a foreclosure rescue scam in Bakersfield, Visalia and Salinas, U.S. Attorney Phillip A. Talbert announced.
Chief U.S. District Judge Lawrence J. O’Neill sentenced Martin Calzada, 30, of Norwalk, to nine years in prison; Juan Curiel, 38, of Visalia, to three years and five months in prison; and Santiago Palacios-Hernandez, 48, of Salinas, to two years and seven months in prison. On March 10, 2017, Calzada was convicted by a jury of one count of conspiracy and eight counts of mail fraud affecting a financial institution. In December 2014, Curiel and Palacios-Hernandez pleaded guilty to conspiracy to commit mail fraud
According to evidence presented during Calzada’s four-day trial, the defendants conspired to defraud homeowners facing foreclosure. The three men operated Star Reliable Mortgage, which had offices in Bakersfield, Visalia, and Salinas, and targeted distressed homeowners with a fraudulent “loan elimination” scheme. Between approximately August 2010 and October 2011, Star Reliable charged clients an upfront fee for its services — ranging from $2,500 up to $4,500 — as well as monthly fees, for ostensibly helping the clients own their homes “free and clear.” Clients paid hundreds of thousands of dollars to Star Reliable and at least $300,000 was transferred from Star Reliable into Calzada’s bank accounts.
To advance the scheme, Calzada, Curiel, and Palacios-Hernandez filed fraudulent documents at county recorders’ offices on behalf of the homeowner-clients. The fraudulent documents purported to replace the legitimate property trustees with fictitious trusts, all in an effort to “cloud title” and halt or stall the foreclosure process. The defendants and other employees working at their direction told Star Reliable clients to stop paying their mortgages. They also falsely represented that Star Reliable clients had $1 million in a U.S. government account that could be used to pay off a homeowner’s mortgage.
As part of their sentences, the defendants were ordered to pay more than $1.1 million dollars in restitution to former Star Reliable clients and mortgage loan owners Fannie Mae and Freddie Mac, which suffered financial losses upon the foreclosure of several clients’ homes.
These cases were the product of an investigation by the Federal Bureau of Investigation and the Tulare County District Attorney’s Office. Assistant U.S. Attorneys Christopher D. Baker and Patrick J. Suter prosecuted the cases.
Three Felons Plead Guilty to Illegal Firearms PossessionRead the Press Release
FRESNO, Calif. — Three defendants pleaded guilty today in three separate cases to being a felon in possession of a firearm, U.S. Attorney Phillip A. Talbert announced.
According to court documents, on March 19, 2016, Juan Gonzalez, 40, of Orosi, was driving a car and fled from officers who attempted to stop him for a traffic violation. He reached speeds of over 100 miles per hour before the officers cancelled the pursuit. During the chase, a deputy saw Gonzalez throw a dark object out of the window on Millerton Road near Lake View Estates. After the pursuit ended, the deputy returned to the location and found a Glock 27, .40‑caliber pistol. Gonzalez was stopped later that morning by Clovis police officers for failure to stop at a red light and arrested him for driving on a suspended license and possession of drug paraphernalia. He was also identified as the driver of the fleeing vehicle who tossed the gun. Gonzalez has prior felony convictions that prohibit him from possessing a firearm. (1:17‑cr‑031)
In the second case, court documents indicate that on May 4, 2016, Jerrett Newman, 27, of Fresno, possessed a Star Bonifacio Echeverria .22-caliber pistol he tossed while running from police. Newman has multiple prior felony convictions. (1:16‑cr‑086)
In the third case, court documents show that on May 2, 2017, the U.S. Marshals Service Fugitive Apprehension Team encountered Rodney Heather, 36, of Fresno, who was wanted for a probation violation. When deputies approached Heather, they saw him reaching for his waistband and removing a black object and tossing it on the driver’s side floorboard. Despite warnings to show his hands, Heather reached down and appeared to push something under the seat. The deputies arrested Heather and found a Glock Model F 22, .40-caliber handgun under the seat. Heather has multiple prior felony convictions. (1:17‑cr‑117)
These cases are the product of investigations by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Marshals Service Fugitive Apprehension Task Force, the Fresno County Sheriff’s Office, and the Clovis Police Department. Assistant United States Attorney Kimberly A. Sanchez is prosecuting the cases.
The cases were brought as part of Project Safe Neighborhoods (PSN), an initiative that brings together federal, state and local law enforcement to combat gun and gang crime. At the core of PSN is increased federal prosecution to incapacitate chronic violent offenders as well as to communicate a credible deterrent threat to potential gun offenders.
Gonzalez and Newman are scheduled to be sentenced by U.S. District Judge Dale A. Drozd on October 16, 2017. Heather is scheduled to be sentenced by Chief U.S. District Judge Lawrence J. O’Neill on October 16, 2017. Each defendant faces a maximum statutory penalty of 10 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.
Heroin and Cocaine Vendor on AlphaBay Sentenced to 6.5 Years in PrisonRead the Press Release
FRESNO, Calif. — Abudullah Almashwali, 31, a Yemeni national formerly residing in Brooklyn, New York, was sentenced today to six and a half years in prison for conspiracy to distribute and distribution of heroin and cocaine, U.S. Attorney Phillip A. Talbert announced.
According to court documents, Almashwali and co-defendant Chaudhry Ahmad Farooq, 24, a Pakistani national residing in Brooklyn, New York, were large-scale heroin and cocaine distributors on the dark web marketplace AlphaBay. Almashwali and Farooq used the vendor names “Area51” and “DarkApollo.”
According to the criminal complaint, Almashwali and Farooq accepted orders for heroin and cocaine on AlphaBay, and then mailed the narcotics from post offices in New York to customers throughout the United States. They received payment in Bitcoin. In May 2016, law enforcement officers made two undercover purchases of heroin from “Area51,” which were delivered to a post office box in the Eastern District of California. Postal records revealed that Almashwali purchased the postage for the two heroin parcels mailed to law enforcement, and that Farooq was involved in other mailings. Law enforcement agents were also able to determine that the encrypted email address used by “Area51” and “DarkApollo” was associated with actual Twitter, Instagram, and Facebook accounts used by Farooq.
Dark web marketplaces are operated on computer networks designed to conceal the true Internet Protocol (IP) addresses of the computers accessing the network. They allow for payments to be made only in the form of digital currency, most commonly Bitcoin. While not inherently illegal, digital currency is used by dark web marketplaces because online transactions in digital currency can be completed without a third-party payment processor and are therefore perceived to be more anonymous and less vulnerable to law enforcement scrutiny.
Last week, the Justice Department announced that AlphaBay, the largest criminal marketplace on the internet, was shut down and that its creator and administrator was arrested following an indictment (1:17-cr-144-LJO), filed in Fresno on June 1. The indictment charged racketeering and various narcotics, identity theft, and money laundering offenses. Law enforcement authorities in the United States worked with numerous foreign partners to freeze and preserve millions of dollars’ worth of cryptocurrencies that were proceeds of the AlphaBay organization’s illegal activities. A related civil forfeiture complaint has also been filed against numerous high value assets, including luxury vehicles, and real estate located throughout the world, including in Thailand, Cyprus, Lichtenstein, and Antigua & Barbuda.
U.S. Attorney Talbert stated: “The sentencing in this case is timely, as it closely follows our seizure and shut down of the AlphaBay criminal marketplace. That case resulted in an indictment filed in our district, but involved significant coordination and assistance from our partners in the Criminal Division’s Computer Crime and Intellectual Property Section, as well as the FBI and DEA. Although other markets are likely to open or continue to operate after AlphaBay’s demise, we have shown our ability to prosecute those who commit crimes using the dark web and to shut down the criminal enterprises that attempt to hide there. Today’s sentence highlights that people committing crimes on the dark web will be brought to justice.”
“Those who conduct criminal activity on the dark web under the guise of anonymity are mistaken, and this sentence serves as a reminder,” stated DEA Special Agent in Charge John J. Martin. “Recently, the DEA Fresno Resident Office worked tirelessly with our law enforcement counterparts to shut down the largest criminal marketplace on the internet, and we have no intention of stopping there. We will continue to investigate those who traffic drugs on the dark web or any place else.”
On January 17, 2017, Farooq pleaded guilty to conspiring to traffic heroin. According to the plea agreement, Farooq admitted to selling 636.5 grams of heroin on the dark web marketplace Alpha Bay in exchange for $145,807 in Bitcoin. He is scheduled to be sentenced on January 22, 2018. He faces a maximum statutory penalty of 20 years in prison and a $1 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.
This case is a product of an investigation by the Drug Enforcement Administration, with assistance provided by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), IRS Criminal Investigation, and the U.S. Postal Inspection Service. Assistant U.S. Attorneys Grant B. Rabenn and Ross Pearson are prosecuting the case.
This case is 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.
Fresno Business Operator Sentenced to Prison for Tax EvasionRead the Press Release
FRESNO, Calif. — Jeffrey G. Vincent, 68, of Madera, was sentenced today by Chief U.S. District Judge Lawrence J. O’Neill to four years and three months in prison for tax evasion, U.S. Attorney Phillip A. Talbert announced.
On April 7, 2017, a federal jury convicted Vincent on five counts of evading the assessment and payment of individual income taxes. According to evidence presented during the four-day trial, in 1991, Vincent began operating a Fresno-based engineering company called Veco Technologies, organized as Stafford Group Limited Partnership, for which Vincent was general partner. Vincent had not filed an individual income tax return since 1989, despite earning significant income from Stafford Group, including close to $500,000 between 2007 and 2010. Two federal tax liens were filed on Vincent’s assets in 1993 and 2000 when he failed to pay assessments made for earlier years’ tax delinquencies. Vincent signed tax returns for Stafford Group in which he falsely represented that he does not have a social security number. Vincent also funneled his income through various trusts and other entities.
“Mr. Vincent formed entities and trusts and funneled his income in a manner that enabled him to evade paying taxes,” said Michael T. Batdorf, Special Agent in Charge, IRS Criminal Investigation. “All taxpayers are required to follow the law and the law requires accurate reporting and timely payment of any tax due and owing. Today’s sentencing should send a clear message that those involved in these types of schemes will be held accountable for their crimes.”
This case was the product of an investigation by the IRS Criminal Investigation. Assistant U.S. Attorneys Christopher D. Baker and Kirk E. Sherriff prosecuted the case.
Two Indicted After Delivering 15 Pounds of Methamphetamine in Kern CountyRead the Press Release
FRESNO, Calif. — A federal grand jury returned a two-count indictment today against Oscar Ivan Salazar-Avalos (Salazar), 27, a native and citizen of Mexico, and Jose Manuel Sotelo-Mendoza, aka Jose Manuel Mendoza-Sotelo (Sotelo), 25, of Modesto, charging them with conspiring to distribute and possess with intent to distribute and possessing with intent to distribute methamphetamine, U.S. Attorney Phillip A. Talbert announced.
According to court documents, Salazar and Sotelo delivered 15 pounds of methamphetamine to an undercover officer in Delano, California after Salazar negotiated for the delivery of the drug for $3,400 per pound.
This case is the product of an investigation by the High Intensity Drug Area Fresno Methamphetamine Task Force, consisting the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the California Highway Patrol, the California Department of Justice’s Bureau of Investigation, the Fresno Police Department, and the Fresno County Sheriff’s Office. Assistant U.S. Attorney Karen A. Escobar is prosecuting the case.
If convicted, the defendants face a minimum statutory penalty of 10 years in prison and a maximum statutory penalty of life in prison, along with a $10 million fine for 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 defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.