Eastern District of California
Press releases recorded for this federal judicial district.
Bakersfield Man Sentenced to over 3 Years in Prison for Firearm OffenseRead the Press Release
FRESNO, Calif. — Bryson LaPaul Blair, 30, of Bakersfield, was sentenced today by United States District Judge Lawrence J. O'Neill to three years and 10 months in prison for being a felon in possession of a firearm and ammunition, Acting United States Attorney Phillip A. Talbert announced.
According to court documents, on April 21, 2015, while investigating a shooting near an elementary school, Bakersfield police officers located a bullet-ridden vehicle at Blair’s residence that matched the description of one of the vehicles involved in the shooting. During the subsequent execution of a search warrant, officers found a stolen, loaded Russian assault weapon under Blair’s bed and 145 rounds of ammunition. Blair was previously convicted in Kern County of second degree robbery and was prohibited from possessing firearms and ammunition.
This case was the product of an investigation by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Bakersfield Police Department. Assistant United States Attorney Karen A. Escobar prosecuted the case.
Mexican National Convicted of Operating Methamphetamine Lab in FresnoRead the Press Release
FRESNO, Calif. — On Wednesday, after a two-day trial, a jury found Humberto Bucio Delgado, 41, of Mexico, guilty of conspiracy to distribute methamphetamine and possession with the intent to distribute methamphetamine, Acting United States Attorney Phillip A. Talbert announced.
According to court documents, on September 30, 2014, Delgado was arrested at a methamphetamine conversion lab inside a Fresno residence. Agents recovered over 60 pounds of methamphetamine from the house as well as materials used in the manufacturing and distribution of methamphetamine.
Sentencing is set for August 29, 2016, before Chief United States District Judge Lawrence J. O’Neill. Delgado faces a sentence of 10 years to life in prison. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
This case is the product of an investigation by the Fresno Methamphetamine Task Force, the California Department of Justice, and the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant United States Attorneys Kathleen A. Servatius and Daniel J. Griffin are prosecuting the case.
San Joaquin County Man Sentenced to 12 Years in Prison for Attempting to Join ISILRead the Press Release
SACRAMENTO, Calif. — Nicholas Michael Teausant, 22, of Acampo, was sentenced today by U.S. District Judge John A. Mendez to 12 years in prison, to be followed by 25 years of supervised release, for attempting to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, announced Assistant Attorney General for National Security John P. Carlin and Acting U.S. Attorney Phillip A. Talbert.
According to court documents, on March 17, 2014, Teausant was arrested near the Canadian border en route to Canada with the intent of continuing to travel to Syria to join ISIL. On March 26, 2014, Teausant was indicted on one count of attempting to provide material support or resources to a terrorist organization. He pleaded guilty on December 1, 2015, to the single count in the indictment without a plea agreement.
In sentencing, Judge Mendez stated: “Terrorism has to become a zero-tolerance crime. There is no margin for error. It is the court’s responsibility to fashion a sentence to reduce any risk you might pose in the future.”
“With this sentence, Nicholas Michael Teausant will be held accountable for attempting to travel overseas to join ISIL and to provide material support to the designated terrorist organization,” said Assistant Attorney General Carlin. “The National Security Division’s highest priority is countering terrorist threats, and we will continue to work to stem the flow of foreign fighters abroad and bring to justice those who attempt to provide material support to designated foreign terrorist organizations.”
Acting U.S. Attorney Talbert stated: “Mr. Teausant was fixated on violence as documented by his social media posts, his pre-arrest statements, and the nature of the group he attempted to join. His conduct was misguided and unacceptable. We appreciate the court’s thoughtful consideration of this case and its recognition of the seriousness of this offense. With the assistance of our investigative partners, we will continue to vigorously prosecute those who seek to provide material support to terrorist organizations.”
“The FBI actively investigates individuals intent on joining terrorist organizations or otherwise aiding violent extremist organizations with their plots to harm U.S. citizens. Violent extremists of all kinds—foreign and domestic—actively recruit disillusioned youth who can be radicalized and motivated to harm others,” said Special Agent in Charge Monica M. Miller of the Federal Bureau of Investigation’s Sacramento field office. “Everyone should increase their awareness of this issue and consider how they can lead from where they stand by reaching out to individuals before their fascination evolves into recruitment by a violent extremist group. ‘Don’t be a Puppet: Pull Back the Curtain on Violent Extremism,’ for example, is an FBI-produced educational resource designed to help youth navigate the host of propaganda they may be exposed to online and aid misguided peers long before misinformation leads them to commit an unlawful act.”
This case was the product of an investigation by the Federal Bureau of Investigation, the Modesto Police Department, and the San Joaquin County Sheriff’s Office, who are members of the Modesto/Stockton Joint Terrorism Task Force, with significant assistance from U.S. Customs and Border Protection. Assistant United States Attorneys Jean M. Hobler and Jason Hitt and Trial Attorney Andrew Sigler of the National Security Division’s Counterterrorism Section prosecuted the case.
California Man Sentenced to 12 Years in Prison for Attempting to Join ISILRead the Press Release
Nicholas Michael Teausant, 22, of Acampo, California, was sentenced today by U.S. District Judge John A. Mendez of the Eastern District of California to 12 years in prison for attempting to provide material support to Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, announced Assistant Attorney General for National Security John P. Carlin and Acting U.S. Attorney Phillip A. Talbert of the Eastern District of California.
According to court documents, on March 17, 2014, Teausant was arrested traveling to Canada, near the border, with the intent of continuing to travel to Syria to join ISIL. On March 26, 2014, Teausant was indicted on one count of attempting to provide material support or resources to a terrorist organization. He pleaded guilty to the single count in the indictment without a plea agreement. In addition to the prison term, Judge Mendez also sentenced Teausant to 25 years of supervised release.
“With this sentence, Nicholas Michael Teausant will be held accountable for attempting to travel overseas to join ISIL and to provide material support to the designated terrorist organization,” said Assistant Attorney General Carlin. “The National Security Division’s highest priority is countering terrorist threats, and we will continue to work to stem the flow of foreign fighters abroad and bring to justice those who attempt to provide material support to designated foreign terrorist organizations.”
“Mr. Teausant was fixated on violence as documented by his social media posts, his pre-arrest statements, and the nature of the group he attempted to join,” said Acting U.S. Attorney Talbert. “His conduct was misguided and unacceptable. We appreciate the court’s thoughtful consideration of this case and its recognition of the seriousness of the offense. With the assistance of our investigative partners, we will continue to vigorously prosecute those who seek to provide material support to terrorist organizations.”
This case was the result of an investigation by the FBI; the Modesto, California, Police Department; and the San Joaquin, California, Sheriff’s Office, who are members of the Modesto/Stockton Joint Terrorism Task Force, with significant assistance from U.S. Customs and Border Protection. The case is being prosecuted by Assistant U.S. Attorneys Jean M. Hobler and Jason Hitt of the Eastern District of California and Trial Attorney Andrew Sigler of the National Security Division’s Counterterrorism Section.
Two Arrested for Nationwide Casino and Credit Card Fraud SchemeRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a nine-count indictment Thursday against Vivian Wang, 53, of Lilburn, Georgia, and Frank Luo, 48, of Las Vegas, Nevada, charging them both with wire fraud and charging Wang with aggravated identity theft, Acting United States Attorney Phillip A. Talbert announced. The defendants were arrested today at their residences in Georgia and Nevada.
According to court documents, between August 5, 2008 and August 2014, Wang and 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. The defendants 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. Moreover, the defendants 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.
According to the indictment, the defendants expended the fraudulently obtained credit on jewelry, precious metals, home appliances, international flights, luxury goods and clothing. The defendants closed and depleted the bank accounts provided to the casinos in their marker applications to prevent the casinos from recovering the money secured by the checks they had written against those accounts, and they did not pay back the credit card balances. The combined fraud led to over $1.2 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 United States Attorney Matthew M. Yelovich is prosecuting the case.
If convicted, Wang and Luo face a maximum statutory penalty of 20 years in prison and a $250,000 fine as to each count of wire fraud. If convicted of aggravated identity theft, Wang faces a mandatory minimum sentence of 24 months in prison consecutive to any other sentence imposed. 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.
Turlock Man Pleads Guilty to Conspiracy to File False Claims in Prison Tax Fraud SchemeRead the Press Release
SACRAMENTO, Calif. — Daniel Allen Coats, 34, of Turlock, pleaded guilty today to one count of conspiracy to defraud the United States by filing false claims for federal tax refunds, Acting United States Attorney Phillip A. Talbert announced.
According to court documents, beginning in 2011, Coats and three fellow inmates in the California Correctional Center in Susanville obtained the personal identification information of other inmates and provided it to co-defendants located outside the prison. The co-defendants then used that information to prepare and file false income tax returns with the Internal Revenue Service, claiming refunds to which the inmates were not entitled. Coats also filed three false tax returns in his own name.
According to court documents, the fraudulently obtained refund checks were deposited into various bank accounts and onto prepaid debit cards that the defendants controlled. The refunds were used for personal expenditures, added to the inmates’ commissary accounts, and used to purchase prepaid debit cards. In all, the conspiracy resulted in at least 247 false claims for income tax returns in tax years 2008 through 2011. Although the IRS stopped some of these refunds, approximately 138 fraudulent refunds totaling approximately $219,984 were issued.
This case is 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 is prosecuting the case.
Coats is scheduled to be sentenced by United States District Judge Garland E. Burrell Jr. on August 19, 2016. Coats 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.
On July 8, 2015, Edwin Ludwig IV was sentenced to seven years in prison for his role in the scheme. The charges against the remaining five co-defendants are pending. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Fresno- and Visalia-Based Health Care Company President Charged with Fraud, Embezzlement and Money LaunderingRead the Press Release
FRESNO, Calif. — A federal grand jury returned a 20-count indictment today against Mark Merrill Reynolds, 60, of Fresno, charging him with embezzlement, mail fraud, and money laundering, Acting United States Attorney Phillip A. Talbert announced.
According to court documents, Reynolds was the president and sole shareholder of Ben-E-Lect and Ben-E-Lect of Visalia. These companies operated in Fresno and Tulare Counties. Ben-E-Lect processed health care claims on behalf of its clients, which were small- to medium-sized businesses that purchased high deductible, fully insured group medical plans from independent insurance carriers and then self-insured beneficiaries for amounts up to the amount of the high deductible. Ben-E-Lect processed the claims using funds that its clients paid into an account known as the Ben-E-Lect Employer Elect account. Ben-E-Lect was required to hold these funds in a fiduciary capacity and to withdraw clients’ funds only for specific purposes, none of which included Ben-E-Lect’s own operational expenses or Reynold’s personal gain.
According to the indictment, Reynolds embezzled funds from the Ben-E-Lect Employer Elect account over a five-year period. He allegedly used the embezzled funds for Ben-E-Lect’s business operating expenses, personal mortgage payments, personal vehicle loan payments, personal credit card payments, the purchase of a 30 percent interest in a payroll company, deposits into a personal investment account, and cash withdrawals. All the funds diverted from the Ben-E-Lect Employer Elect account were allegedly first moved into different accounts to conceal their source before being used and spent. The indictment alleges that Reynolds embezzled approximately $6,089,500 from the Ben-E-Lect Employer Elect account, but reimbursed that account approximately $1,613,500, netting a loss of approximately $4,476,000. During the time period alleged in the indictment, Ben-E-Lect serviced over 3,200 clients across 22 states.
This case is the product of an investigation by the Federal Bureau of Investigation and the California Department of Insurance. Assistant United States Attorneys Mark J. McKeon and Patrick Delahunty are prosecuting the case.
If convicted of embezzlement, Reynolds faces a maximum statutory penalty of 10 years in prison and a $250,000 fine. If convicted of mail fraud, Reynolds faces a maximum statutory penalty of 20 years in prison and a $250,000 fine. If convicted of money laundering, Reynolds faces a maximum statutory penalty of 20 years in prison and a fine of $500,000 or twice the value of the property involved in the transaction, whichever is greater. 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 Caltrans Employee Sentenced to 6.5 Years in Prison for Bid Rigging and Contracting FraudRead the Press Release
SACRAMENTO, Calif. — Clint Gregory, 53, of Sacramento, was sentenced today by United States District Judge Morrison C. England Jr. to six and a half years in prison for a mail fraud scheme involving bid rigging in connection with contracts issued by the California Department of Transportation (Caltrans), Acting U.S. Attorney Phillip A. Talbert announced.
According to court documents, Gregory worked for Caltrans in Stockton as a Senior Transportation Engineer Supervisor. Over a five-year period, Gregory received cash, a Persian rug, a cellphone, and other gifts in exchange for awarding Caltrans contracts to a primary corporate contractor. Gregory and others also arranged for third-party companies to submit straw bids for contracts for which the primary contractor was also competing, permitting Gregory to award the contracts to either a straw bidder or the primary contractor and create the illusion of true competition. The straw companies, who performed no work, were paid a commission for their assistance, and this arrangement was not disclosed to Caltrans. As a result of the fraud, Caltrans incurred a loss of more than $1.2 million.
According to Gregory’s guilty plea, he used his authority at Caltrans to approve fraudulent invoices submitted by the primary contractor and others. As a result, the primary contractor and the straw-bidder companies received payment for work that was never performed. He also requested that the primary contractor provide him with a fictitious invoice to conceal an unlawful purchase he made for parts for his personal airplane.
In imposing sentence, the Court found that Gregory had obstructed justice by making false statements to law enforcement about specific purported bribe payments made to accounts he had set up in the name of shell companies. A restitution hearing has been scheduled for July 21, 2016.
This case was the product of an investigation by the FBI and the San Joaquin County District Attorney’s Office. Caltrans assisted with the investigation. Assistant United States Attorneys Philip A. Ferrari, Michele M. Beckwith, and André M. Espinosa prosecuted the case.
Former Bakersfield Police Department Detective Pleads Guilty to Bribery, Drug Trafficking, and Filing a False Tax ReturnRead the Press Release
FRESNO, Calif. — Damacio Diaz, 44, of McFarland, formerly a detective with the Bakersfield Police Department, pleaded guilty today to bribery, possession and attempted possession with the intent to distribute methamphetamine, and making and subscribing a false income tax return, Acting United States Attorney Phillip A. Talbert announced.
According to court documents, between April 2012 and February 2015, while employed as a police officer with the Bakersfield Police Department (BPD), Diaz handled a criminal informant who was involved in the large-scale sale and distribution of methamphetamine. Diaz continued to operate the informant even though he was fully aware of the informant’s ongoing criminal activity. During this time, Diaz received bribes from the informant in return for intelligence on law enforcement activities as well as protection from investigation and arrest.
In addition to accepting illegal bribes, Diaz also engaged in drug trafficking while with the BPD. On September 20, 2012, while on duty, Diaz stopped a vehicle operated by two individuals from Yakima, Washington and used a BPD dog handler and police dog to search the vehicle. The search uncovered an ice chest containing approximately 10 pounds of methamphetamine divided into multiple bags. The BPD dog handler did not seize any of the drugs from the vehicle, but turned the scene over to Diaz and his partner to secure the methamphetamine and oversee the investigation of the incident. A week later, Diaz booked approximately one pound of methamphetamine from the vehicle stop into evidence. Diaz and his partner maintained possession of the remaining nine pounds of methamphetamine, and they ultimately sold it for their own personal gain.
According to the plea agreement, Diaz also filed a joint income tax return for the calendar year 2012 that falsely reported total income of $168,485 and did not include additional income of at least $97,900.
Acting U.S. Attorney Talbert stated: “The defendant attempted to take advantage of the trust placed in law enforcement officers for his personal gain. Law enforcement officers who accept bribes put the public and other law enforcement officers in danger. We appreciate the full cooperation of the Bakersfield Police Department and Chief Williamson, as well as our federal partners, in the investigation of this case.”
“Law enforcement officers who abuse their authority for personal gain betray the community they have been sworn to protect,” stated DEA Special Agent in Charge John J. Martin. “DEA is committed to working with our law enforcement partners to hold those accountable who participate in criminal activity that tarnishes the badge.”
“When individuals working in an official capacity violate the trust of their communities by abusing that power, they undermine the hard work of the entire law enforcement community,” said Michael T. Batdorf, Special Agent in Charge, IRS Criminal Investigation. “In exchange for cash, Detective Damacio Diaz agreed to tip-off and protect a known drug dealer. IRS CI followed the funds in his accounts and determined how much of the illegal proceeds did not make it to his tax returns. IRS-CI will continue to work with our law enforcement partners to ensure that those who attempt to illegally profit from their trusted positions are brought to justice.”
“The public rightfully expects every law enforcement officer to obey all laws they are sworn to enforce. Damacio Diaz’s illegal activities were in conflict with public safety, the law, and the safety of his fellow officers,” said Special Agent in Charge Monica M. Miller of the Federal Bureau of Investigation Sacramento field office. “Such illegal and dangerous activity is not tolerable—especially when committed by an officer sworn to protect and service his community—and the FBI will continue to work with its partners to ensure any officer who engages in illegal activities and damages public trust in law enforcement faces justice.”
Diaz has also agreed to the forfeiture of $128,000, which constitutes property which was derived from, or is traceable to the proceeds obtained directly or indirectly from the commission of his criminal conduct. This case is the product of an investigation by the Federal Bureau of Investigation, the Drug Enforcement Administration, the Internal Revenue Service-Criminal Investigation, and the Bakersfield Police Department. Assistant United States Attorneys Brian K. Delaney and Angela Scott are prosecuting the case.
Diaz is scheduled to be sentenced by Judge Lawrence J. O'Neill on September 26, 2016. Diaz faces a maximum statutory penalty of life in prison and a $10 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Final Bakersfield Defendants Plead Guilty in Bank Fraud ConspiracyRead the Press Release
FRESNO, Calif. — Edgar Alexander Gomez, 41, and Jennifer Grace Barthel, 36, both of Bakersfield, pleaded guilty today to conspiracy to commit bank fraud, Acting United States Attorney Phillip A. Talbert announced. Gomez additionally pleaded guilty to aggravated identity theft.
According to court documents, between July and September 2012, Gomez and Barthel stole identity documents from the U.S. mail, including driver's licenses, social security cards, and credit and debit cards. On several occasions, Gomez and Barthel attempted to open bank accounts at federally insured financial institutions using the identities of people whose mail they had stolen. In connection with one of their attempts to fraudulently open bank accounts, Gomez and Barthel attempted to negotiate a check after forging the payee’s signature.
San Francisco Division Inspector in Charge Rafael Nunez of the U.S. Postal Inspection Service stated: “We are working closely with the U.S. Attorney’s Office and our partners in law enforcement to arrest and prosecute those responsible for complex identity fraud schemes and to protect postal customers' mail and personal information from theft.”
This case is the product of an investigation by the U.S. Postal Inspection Service. Assistant United States Attorneys Megan Richards and Christopher Baker are prosecuting the case.
Co-defendant Augustine Castro Salazar, 47, also of Bakersfield, pleaded guilty on November 16, 2015, to theft of U.S. mail. In his plea agreement, Salazar admitted that he and Gomez, on five occasions in August 2012, broke open and stole mail from mail boxes at several U.S. Postal Service facilities in Bakersfield. Salazar remains in custody awaiting sentencing.
Gomez and Barthel are scheduled to be sentenced by U.S. District Judge Lawrence J. O'Neill on September 26, 2016. They face a maximum statutory penalty of 30 years in prison and a $1 million fine for conspiracy to commit bank fraud. Gomez additionally faces a mandatory minimum sentence of two years in prison for aggravated identity theft. Salazar is scheduled to be sentenced on July 25, 2016, and faces a maximum statutory penalty of five years in prison and a $250,000 fine. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Serial Bank Robber Known as "the Well Dressed Man" Pleads Guilty to Bank Robbery in Five CountiesRead the Press Release
SACRAMENTO, Calif. — David James Lira, 39, of Roseville, pleaded guilty today to robbing five banks in Northern California, Acting U.S. Attorney Phillip A. Talbert announced.
According to court documents, between December 2015 and January 2016, Lira robbed five banks. For his bank robberies and attempted bank robberies, Lira used various disguises including coats, fake beards, hats, and glasses. For some of his robberies, Lira obtained rental cars to vary his getaway vehicles. In total, Lira stole over $31,000.
Lira robbed the following banks:
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On December 3, 2015, he robbed the Umpqua Bank at 1801 Douglas Blvd. in Roseville;
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On December 11, 2015, he robbed the Wells Fargo Bank at 3456 McHenry Avenue in Modesto;
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On December 17, 2015, he robbed the Wells Fargo Bank at 4400 Tassajara Road in Dublin;
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On December 23, 2015, he robbed the U.S. Bank at 2111 Oroville Dam Blvd. East in Oroville;
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On January 6, 2016, he robbed the U.S. Bank at 2175 W. Grant Line Road in Tracy.
Lira also attempted to rob two other banks:
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On December 1, 2015, he attempted to rob the Bank of the West at 1112 Galleria Blvd. in Roseville;
- On December 11, 2015, he attempted to rob the Delta Bank at 2711 McHenry Avenue in Modesto.
This case is the product of an investigation by the Federal Bureau of Investigation with assistance from the Roseville Police Department, the Tracy Police Department, the Oroville Police Department, the Modesto Police Department, and the Alameda County Sheriff's Department. Assistant U.S. Attorney Michelle Rodriguez is prosecuting the case.
Lira is scheduled to be sentenced by U.S. District Judge Garland E. Burrell Jr. on August 12, 2016. Lira faces a maximum statutory sentence of 20 years in prison and a $250,000 fine for 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.
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Newcastle Man Sentenced to over 5 Years in Prison for Defrauding the United Auburn Indian CommunityRead the Press Release
SACRAMENTO, Calif. — Gregory Scott Baker, 48, of Newcastle, was sentenced on Thursday by United States District Judge Troy L. Nunley to five years and four months in prison and ordered to pay $18 million in restitution for defrauding the United Auburn Indian Community (UIAC), conspiring to launder monetary instruments, and filing a false tax return, Acting United States Attorney Phillip A. Talbert announced.
According to court documents, between October 2006 and December 2007, Baker and Bart Wayne Volen, 54, of San Diego and Haiku, Hawaii, and Darrell Patrick Hinz, 48, of Cameron Park, engaged in a scheme to defraud the UIAC. An indictment from August 2012 charged the defendants with conspiring to commit mail and wire fraud and various money laundering violations. A superseding indictment from April 2013 added additional charges, alleging that Volen and Hinz filed false tax returns in 2006 and 2007, and that Baker filed false tax returns from 2006 through 2009. The defendants ultimately stole over $18 million from the UAIC through their scheme.
“With the help of his co-defendants, Gregory Scott Baker used his position as Tribal Administrator to steal over $18 million from the UAIC,” said Michael T. Batdorf, Special Agent in Charge, IRS Criminal Investigation. “By concealing and disguising the proceeds of the fraud, the defendant received numerous assets and personal property, totaling over $1.4 million. This sentencing should send a clear message that those involved in these types of schemes will be held accountable.”
According to court documents, in October 2006, the UAIC hired Volen, a developer, to finish construction on a school, a community center, and administrative offices on UAIC‑owned property on Indian Hills Road in Auburn. Volen submitted false and inflated invoices to the UAIC, and Baker and Hinz, both UAIC employees, approved the fraudulent invoices based on a kickback agreement between the three men. Volen supported his invoices with inflated cost proposals from his general contractor’s company, Sequoia Pacific Builders (SPB), and, at times, inflated invoices from various subcontractors. At Volen’s direction, over 160 SPB cost proposals were fraudulently inflated.
Baker was the UAIC tribal administrator whose duties included overseeing the Indian Hills office project. In this position of trust, he was subordinate only to the UAIC tribal council. Hinz was a contract employee hired by the UAIC to manage the construction at the Indian Hills office project site. Both Baker and Hinz were required to approve all invoices before the UAIC tribal council would sign checks to pay for completed work. During the scheme to defraud the tribe, both Baker and Hinz engaged in conduct to ensure that the tribal council would pay for the inflated and fraudulent invoices submitted by Volen. They were later paid by Volen for their participation in the scheme.
In order to disguise the proceeds of the fraud, Hinz sent a number of fraudulent invoices to Volen. These invoices were for consulting work that Hinz claimed he did for Volen. After the issuance of the false invoices, Volen sent Hinz 29 checks, totaling approximately $7.5 million. Hinz paid Baker indirectly for his assistance in the scheme, using money he received from Volen.
According to court documents, Hinz paid for a $12,500 weekend trip that he and Baker took in Hawaii and for certain obligations owed by Baker. Hinz also purchased a number of things for Baker, including various assets, personal property — a $70,000 BMW and a mobile home — several investment properties, a vacation condominium in South Lake Tahoe, and various improvements to property, such as a $54,000 pool at his primary residence. All of these transactions were conducted for the purpose of concealing and disguising the proceeds from the UAIC fraud. During the course of the scheme, Baker received over $1.4 million.
According to court documents, Baker filed tax returns that failed to report the income he derived from the scheme. As a result, the United States suffered a tax loss of between $250,000 and $550,000.
This case is the product of an investigation by the Internal Revenue Service, Criminal Investigation. Assistant United States Attorneys Michael M. Beckwith, John K. Vincent, and Kevin C. Khasigian are prosecuting the case.
Hinz and Volen previously pleaded guilty to similar charges in this case and are scheduled to be sentenced on June 16, 2016 and August 4, 2016, respectively. Chris W. Eatough, the owner of Sequoia Pacific Builders, previously pleaded guilty to a felony related to this case on June 20, 2013 (case number 2:13-cr-214 TLN). Eatough is scheduled to be sentenced on July 28, 2016. Both Hinz and Volen have agreed to pay at least $17 million in restitution to the UAIC. Eatough has agreed to pay between $600,000 and $950,000 in restitution to the UAIC.
These defendants face a maximum sentence of 20 years in prison, a $250,000 fine, or twice the value of the gross gain or loss, and a three-year term of supervised release for conspiring to commit mail and wire fraud. The maximum statutory penalty for conspiring to launder monetary instruments is 20 years in prison, a $500,000 fine or twice the value of the laundered money, and a three-year term of supervised release. The maximum statutory penalty for the tax violation is three years in prison, a $100,000 fine, or a fine of twice the value of the gross gain or loss, and a one-year term of supervised release. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Lemoore Man Convicted of Receipt and Distribution of Child Pornography After Four-Day Jury TrialRead the Press Release
FRESNO, Calif. — After a four–day trial, a federal jury found Robert Wallace Smith, 37, of Lemoore, guilty today of one count of receipt and distribution of child pornography, Acting U.S. Attorney Phillip A. Talbert announced. The trial was held before U.S. District Judge Dale A. Drozd.
According to evidence presented at trial, Smith’s laptop computer, which was seized pursuant to a federal search warrant on December 23, 2011, contained a collection of 388 videos and pictures of children being sexually abused.
This case is the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant United States Attorneys Megan A. S. Richards and John R. Edwards are prosecuting the case.
Smith was remanded into custody after the jury reached its verdict.
Smith is scheduled to be sentenced by Judge Drozd on September 12, 2016. Smith faces a mandatory minimum statutory penalty of five years in prison, a maximum statutory penalty of 20 years in prison, and a $100,000 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 is 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.justice.gov/psc. Click on the “resources” tab for information about internet safety education.
Jury Convicts Georgia Woman of Laundering and Structuring More Than $200,000 for California Drug Trafficking OrganizationRead the Press Release
FRESNO, Calif. — After a three day trial, Ashley Starling Thomas, 29, of Atlanta, Georgia, was convicted today by a federal jury of conspiring to launder money, conspiring to structure cash transactions, five counts of money laundering, and four counts of structuring cash transactions, Acting United States Attorney Phillip A. Talbert announced.
According to the evidence presented at trial, Thomas moved more than $200,000 in drug money through her bank accounts in a 22-day period in the summer of 2013. Thomas, who resided in Houston, Texas at the time, flew to Northern California on airline tickets paid for by a drug trafficking organization and made cash withdrawals of drug money from her bank accounts at dozens of bank branches in Sacramento, Eureka, and San Francisco. Thomas also traveled to Fresno where the drug trafficking organization was located. All of the cash withdrawals made by Thomas were in amounts less than $10,000, for the purpose of preventing her banks from filing Currency Transaction Reports on her cash withdrawals.
Following her conviction, U.S. District Judge Lawrence J. O’Neill ordered Thomas remanded into custody.
This case is being brought as part of Operation Footprint, a nationwide law enforcement initiative led by the U.S. Attorney’s Offices, the Internal Revenue Service- Criminal Investigation, the Drug Enforcement Administration, and the United States Postal Inspection Service. Operation Footprint targets large drug trafficking organizations by identifying the transfer of drug proceeds through financial institutions, bulk cash smuggling and other forms of money transfers. Operation Footprint is focused on bringing criminal charges based on Bank Secrecy Act violations in addition to violations of the Controlled Substances Act and the Money Laundering Control Act.
This case is also the product of the Organized Crime Drug Enforcement Task Force (OCDETF), a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations in the U.S. by leveraging the combined expertise of federal, state and local law enforcement agencies. Assistant U.S. Attorneys Grant B. Rabenn and Vincente A. Tennerelli are prosecuting the case.
Thomas is scheduled to be sentenced by Judge O’Neill on August 29, 2015. The maximum statutory penalty for money laundering conspiracy and money laundering is 20 years in prison and a $500,000 fine (or twice the value of the involved property). The maximum statutory penalty for structuring is 10 years in prison and a $500,000 fine. The maximum statutory penalty for structuring conspiracy is five 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.
Elk Grove Man Sentenced to 11 Years in Prison for Distribution of Prescription Pills and HeroinRead the Press Release
SACRAMENTO, Calif. — Michael Deshone Mathews, 42, of Elk Grove, was sentenced today by U.S. District Judge Garland E. Burrell Jr. to 11 years in prison for conspiracy to distribute oxycodone and possession with intent to distribute heroin, Acting U.S. Attorney Phillip A. Talbert announced.
According to court documents, law enforcement began investigating reports in 2014 that Mathews was purchasing prescription medications from individuals in the Sacramento area. At the same time, investigators learned that Mathews was receiving cash deposits into various bank accounts from another state.
The investigation revealed that Mathews was meeting individuals with apparently legitimate prescriptions and paying those individuals in exchange for pills obtained from pharmacies. Mathews would then transport the pills to Washington state and receive payment for their resale through bank deposits.
When law enforcement officers searched Mathew’s home, vehicle, and storage locker, they found large quantities of methamphetamine, heroin, and prescription medications. Agents also found a large number of firearms and body armor.
This case was the product of an investigation by the Drug Enforcement Administration, the United States Department of Health and Human Services, the California Highway Patrol, the Sacramento County Probation Department, the Nevada County Sheriff’s Department, the United States Marshals Service, the California Bureau of Medi-Cal Fraud and Elder Abuse, the Sacramento Police Department, and the Elk Grove Police Department. Assistant United States Attorney Paul Hemesath prosecuted the case.
Sacramento Man Charged with Arson for Setting Fire to Sacramento Nail SalonRead the Press Release
SACRAMENTO, Calif. — Paul La, 58, of Sacramento, was arraigned today on a 10-count indictment charging him with arson of a commercial structure, arson to commit a federal felony, and mail fraud, Acting United States Attorney Phillip A. Talbert announced.
According to the indictment, on February 6, 2011, La intentionally set fire to Golden Nails & Hair, a salon that he owned at 8335 Folsom Boulevard in Sacramento. La then knowingly lied about the cause of the fire and the extent of his destroyed business property in order to obtain payment from his insurance company.
This case is the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant United States Attorneys Michael D. Anderson and Amanda Beck are prosecuting the case.
If convicted, La faces a minimum five years and a maximum of 20 years in prison for arson to a commercial structure; a consecutive 10 years in prison for arson to commit another felony; and a maximum of 20 years in prison for each count of mail fraud. Each count also carries a maximum fine of $250,000. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
Two Solano County Women Charged with Fraud Conspiracy, Filing Fraudulent Income Tax Returns, and Aggravated Identity TheftRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a six-count indictment on May 19, 2016, against Pamela Dawn Pierson, 50, of Vallejo, and Michelle Louise Travis, 50, of Suisun City. The indictment, which was unsealed today, charges both Pierson and Travis with conspiracy to commit wire fraud, conspiracy to defraud the United States government, filing false claims against the United States government, and aggravated identity theft, Acting United States Attorney Phillip A. Talbert announced.
According to court documents, Pierson and Travis used identity theft victims’ personal identifying information to file fraudulent tax returns in order to obtain income tax refunds to which they were not entitled.
This case is the product of an investigation by the Internal Revenue Service – Criminal Investigation, the Federal Bureau of Investigation, and the Fairfield Police Department, with assistance from the University of California – San Francisco Police Department. Assistant United States Attorney Brian A. Fogerty is prosecuting the case.
If convicted, Pierson and Travis face a maximum statutory penalty of 20 years in prison for the conspiracy to commit wire fraud charge, a maximum of 10 years in prison for conspiracy to defraud the United States government, a maximum of five years in prison for the false claims charges, and a mandatory term of two years in prison for the aggravated identity theft charges. Each of the charges carries a maximum fine of $250,000. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Shasta County Man Sentenced to 18 Months in Prison for Defrauding the VA by Falsely Claiming He Was a Decorated VeteranRead the Press Release
SACRAMENTO, Calif. — John Cal Howe II, 42, of Lakehead, was sentenced today to 18 months in prison after being convicted of 23 misdemeanor counts in a scheme to obtain thousands of dollars in veterans’ benefits to which he was not entitled, Acting United States Attorney Phillip A. Talbert announced.
According to court documents, Howe was engaged in a scheme to defraud the VA for over three years. He falsely claimed he was a decorated United States Marine Corps veteran, although he had never enlisted or served in the armed forces of the United States. He stole $13,623.02 in benefits from the Veterans Affairs (VA) and sought to further defraud the VA by applying for a service-related pension. In connection with his scheme, he repeatedly lied about serving in the United States Marine Corps, including lying about being wounded in combat; about completing 12 tours of duty in operation Desert Shield, the Persian Gulf War, Somalia, Afghanistan, and Iraq; and about being awarded three Purple Heart medals. Further, when the VA began to question Howe’s lies, Howe tried to have a Congressman’s office intervene on his behalf.
This case was the product of an investigation by the Veterans Affairs Office of the Inspector General. Special Assistant United States Attorney Elliot Wong prosecuted the case.
IRS Employee Found Guilty for Filing Multiple Fraudulent Tax ReturnsRead the Press Release
FRESNO, Calif. — After a four-day trial, a federal jury found Kimberly English, 53, of Fresno, guilty today of two counts of filing a fraudulent tax return by an employee of the United States and four counts of making an opportunity for a person to defraud the United States, Acting U.S. Attorney Phillip A. Talbert announced.
According to evidence presented at trial, English was an employee of the IRS in Fresno when she prepared and filed her own fraudulent tax returns for tax years 2011 and 2012. She also prepared and filed false and fraudulent tax returns for others, including her daughter and her daughter’s boyfriend, for the same tax years. The returns identified in court included fraudulent claims for false deductions and credits, such as the number of dependents and eligibility for the child tax credit. The false returns allowed English and other taxpayers to obtain undue tax refunds or improperly reduce their tax liabilities.
This case is the product of an investigation by the Treasury Inspector General for Tax Administration and the Tax Division of the Department of Justice. Assistant United States Attorneys Patrick R. Delahunty and Angela L. Scott are prosecuting the case.
English is scheduled to be sentenced by U.S. District Judge Dale A. Drozd on August 15, 2016. English faces a sentence of up to five years in prison, a $10,000 fine, and mandatory dismissal from her job. 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.
Chico Man Found Guilty of Child Pornography OffenseRead the Press Release
SACRAMENTO, Calif. — After a three–day trial, a federal jury found Frank W. Coon, 51, of Chico, guilty today of one count of receipt of child pornography, Acting United States Attorney Phillip A. Talbert announced. The trial was held before United States District Judge Garland E. Burrell Jr.
According to evidence presented at trial, when agents executed a search warrant in March 2012, they found Coon inside his apartment at the keyboard of a computer. That computer was later found to be filled with child pornography videos. It was ultimately determined that over the course of approximately seven months, Coon used peer-to-peer software to download 117 child pornography videos. Several videos involved the portrayal of sadistic, masochistic, and other depictions of violence, and included depictions of pre-pubescent minors.
This case is the product of an investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant United States Attorneys Matthew G. Morris and Rosanne Rust are prosecuting the case.
After the jury verdict, the defendant was remanded into custody.
Coon is scheduled to be sentenced by Judge Burrell on August 5, 2016. Coon faces a mandatory minimum sentence of five years and a maximum possible penalty of 20 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
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.justice.gov/psc. Click on the “resources” tab for information about Internet safety.
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Major Tobacco Distributor Sentenced to Five Years in Prison for $16 Million Excise Tax Fraud SchemeRead the Press Release
SACRAMENTO, Calif. — Moo Hoon “Steve” Kim, 54, of Cypress, was sentenced today to five years in prison and ordered to pay over $16 million in restitution for mail fraud related to a scheme to avoid paying excise tax on tobacco products, Acting United States Attorney Phillip A. Talbert announced.
According to court documents, between 2006 and 2009, Kim was responsible for bringing over $35 million in untaxed other tobacco products (OTP) into California. OTP is any tobacco product other than cigarettes and consists primarily of cigars, chewing tobacco, and leaf tobacco. A federal jury found Kim guilty after a seven–day trial in March 2015 before United States District Judge William B. Shubb.
The evidence at trial showed that Kim used front companies, set up by others at his direction, to disguise his illegal purchases and subsequent sales of untaxed OTP from out-of-state sources. These companies included KS Wholesale in Vernon, California, and Cheap Cig Distributor in Paramount, California. Kim also used another front company – Discounted Tobacco in Long Beach, California – as a retail outlet for some of the untaxed OTP that he sold through his company, Jobber’s Wholesale. As a result of Kim’s scheme, California was defrauded of over $16 million in excise taxes. A large percentage of the revenue from the excise tax is used to fund California’s early childhood development program, First 5 California.
“Many resources were utilized to combat the unlawful trafficking of tobacco products by Moo Hoo Kim who was ultimately found guilty of mail fraud,” said Special Agent in Charge Jill A. Snyder. “ATF and our partners stopped the illegal activities by Kim which resulted in a loss of over $16 million dollars in excise taxes for state of California. Today’s sentencing reflects this significant prosecution.”
“This sentence is a huge victory in our fight against underground economic activity in our state,” said Board of Equalization Member Jerome E. Horton. “It reinforces the need for continued prosecution of these types of crimes.”
This case was the result of the efforts of a joint task force involving the U.S. Attorney’s Office, the California Department of Justice, the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), and the California State Board of Equalization (BOE). To date, 27 defendants have been sentenced in 16 criminal cases. Over $50 million in restitution has been ordered to be repaid to BOE. Nineteen civil forfeiture cases have resulted in over $16 million in assets seized for repayment to BOE for lost tax revenue. For the last several years, these offices have supported a task force dedicated to combating the systemic problem of tobacco excise tax evasion in California. In 2007, the BOE estimated that the state lost approximately $90 million in unstamped tobacco excise taxes to contraband distributors and approximately $120 million in excise taxes for taxed stamped tobacco like cigarettes. Because California has a relatively high tobacco excise tax rate, it is a frequent target for contraband tobacco smugglers and tax evaders. Assistant United States Attorney Michael D. Anderson and U.S. Department of Justice Antitrust Division Trial Attorney Richard A. Powers, designated as a Special Assistant United States Attorney, prosecuted the case.
Kern County Man Pleads Guilty to Receipt and Distribution of Child Pornography in “Sextortion” CaseRead the Press Release
FRESNO, Calif. — Brian Caputo, 27, of Arvin, pleaded guilty today to receipt and distribution of child pornography, Acting United States Attorney Phillip A. Talbert announced.
According to court documents, between December 2008 and February 2014, Caputo used various social media accounts to pose as a girl and communicate with dozens of minor females throughout the United States. Soon after establishing communication with the minors, Caputo would threaten to reveal sexually explicit images of their friends unless they created and sent him images of themselves posing nude or otherwise engaging in sexually explicit conduct. In June 2013, Caputo contacted a 12-year-old girl in El Paso, Texas and threatened to distribute sexually explicit pictures of her 11-year-old friend unless she sent nude images of herself to Caputo. The victim told a family member who contacted the El Paso Police Department.
When law enforcement investigators traced the threatening communications to Caputo, they discovered that he had been victimizing other minors across the United States. For example, Caputo convinced one victim to take more than 660 sexually explicit images of herself and upload them to a Dropbox account that Caputo controlled.
This case is the product of an investigation by the Federal Bureau of Investigation with assistance from the El Paso Police Department and the FBI’s Violent Crimes Against Children Task Force. Assistant United States Attorney Michael Tierney is prosecuting the case.
Caputo is scheduled to be sentenced on August 8, 2016. Caputo faces a maximum statutory penalty of 20 years in prison for receipt or distribution of child pornography and a $250,000 fine for 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.
This case is 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.justice.gov/psc.
Click on the “resources” tab for information about Internet safety education.
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Former Fresno County Administrator Indicted for Health Care FraudRead the Press Release
FRESNO, Calif. —Christina Hernandez, 39, resident of Las Vegas, Nevada, appeared in court today and pleaded not guilty to an eleven-count indictment charging her with health care fraud and embezzlement from a health care benefits program, Acting United States Attorney Phillip A. Talbert announced.
According to court documents, Hernandez was a provider relations specialist at the Fresno County Department of Behavioral Health, which is responsible for administering mental health services to Fresno County’s Medi-Cal beneficiaries. Hernandez was responsible for reviewing and approving claim forms from private mental health care providers who provided services to Medi-Cal beneficiaries. The indictment alleges that Hernandez submitted claim forms for medical services that were never actually provided and that she subsequently cashed the reimbursement checks for her own benefit. The indictment also alleges that Hernandez stole reimbursement checks that the county issued to doctors for actual medical services provided. In total, it is alleged that Hernandez stole approximately $98,560 from the Fresno County Department of Behavioral Services.
This case was the product of an investigation by the Federal Bureau of Investigation and the Fresno County Sheriff’s Office. Assistant United States Attorney Grant B. Rabenn is prosecuting the case.
If convicted, Hernandez faces a maximum statutory penalty of ten years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
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Bakersfield Man Sentenced to over 12 Years in Prison for Possession of Child PornographyRead the Press Release
FRESNO, Calif. — Ralph Dale Shepherd, 58, of Bakersfield, was sentenced today to 12 years and seven months in prison for possession of child pornography, Acting U.S. Attorney Phillip A. Talbert announced.
According to court documents, on May 6, 2014, Shepherd was found to have possessed within his cellphone between 300 and 600 images of minors engaged in sexually explicit conduct. The images also involved the portrayal of sadistic, masochistic, and other depictions of violence, and included depictions of pre-pubescent minors.
“We are gratified by the sentence imposed which will provide some measure of justice,” said Ryan L. Spradlin, special agent in charge for HSI San Francisco. “Together, with our local law enforcement partners, we will continue to put predators behind bars and continue our efforts to create a safer community for our children.”
This case was the product of an investigation by the Bakersfield Office of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant United States Attorney Brian W. Enos prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about Internet safety education.
Former DMV Employee Pleads Guilty to Conspiring to Commit BriberyRead the Press Release
SACRAMENTO, Calif. — Andrew Kimura, 31, of Sacramento, pleaded guilty today to two counts of conspiracy to commit bribery, Acting United States Attorney Phillip A. Talbert announced.
According to court documents, Kimura was an employee of the California Department of Motor Vehicles, working in Sacramento as a Licensing-Registration Examiner. He processed applications for Class A and Class B commercial driver’s licenses (CDLs) and Class C noncommercial driver’s licenses.
According to the plea agreement, between April 2013 and July 2015, Kimura received money from various brokers in order to provide CDLs for individuals who had not taken or passed the necessary DMV examinations. Kimura then accessed the DMV’s database to alter records indicating those individuals had passed certain tests. As a result, the individuals were able to obtain CDLs without having taken or passed the requisite written or behind-the-wheel driving tests. Additionally, Kimura also altered DMV records to provide for renewal of various CDLs in exchange for money from brokers.
This case is the product of an investigation by the Federal Bureau of Investigation, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and the California DMV. Assistant United States Attorney Todd A. Pickles and Rosanne Rust are prosecuting the case.
Emma Klem, another DMV employee, and Kulwinder Dosanjh Singh, a broker, previously pleaded guilty to conspiracy to commit bribery as part of the same investigation in United States v. Klem, 2:15-cr-139 GEB, and United States v. Kulwinder Dosanjh, 2:15-cr-146 GEB, respectively. No sentencing date has been set for them.
Co-defendants Robert Turchin, Mangal Gil, and Pavitar Dosangh Singh are awaiting trial. The charges against them are only allegations; they are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Kimura is scheduled to be sentenced by United States District Judge Garland E. Burrell Jr. on August 12, 2016. Kimura 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.
Former Air Force Member Arrested, Charged with Assaulting and Sexually Abusing His Spouse While Both Were Stationed AbroadRead the Press Release
SACRAMENTO, Calif. — Christopher Mroz, 23, of Sacramento, was arrested today at his residence, charged with aggravated sexual abuse, and assault resulting in serious bodily injury, Acting United States Attorney Phillip A. Talbert announced.
Mroz is scheduled to be arraigned today at 2:00 p.m. before U.S. Magistrate Judge Kendall J. Newman. On Thursday, a federal grand jury returned a two-count indictment against Mroz.
According to court documents, Mroz was a member of the Air Force stationed in Lakenheath, England in 2012 through 2014. Although he was discharged in 2014, he remained on base with his wife, who was an active duty member of the Air Force. The indictment alleges that during the course of their time in England, Mroz forcibly raped his wife and, on another occasion, broke her arm. Mroz is subject to prosecution for these alleged offenses based on the Military Extraterritorial Jurisdiction Act of 2000.
This case is the product of an investigation by the Air Force Office of Special Investigations and the FBI. Assistant United States Attorneys Jill Thomas and Michele Beckwith are prosecuting the case.
If convicted, Mroz faces a maximum statutory penalty of life in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Alaska Man Sentenced to 6½ Years in Prison for Trafficking Oxycodone and MorphineRead the Press Release
SACRAMENTO, Calif. —Charles Connor, 35, of Anchorage, Alaska, was sentenced today by United States District Judge Troy L. Nunley to six years and six months in prison for conspiracy to distribute and to possess with intent to distribute oxycodone, Acting United States Attorney Phillip A. Talbert announced.
According to court documents, on December 17, 2012, the United States Postal Service in Anchorage intercepted a package sent to Connor from co-defendant Stacy Mistler, a resident of Marysville, California. The package contained 300 oxycodone 30‑mg tablets. Law enforcement delivered the package to Connor and then arrested him.
Further investigation revealed that between November 7, 2011, and December 17, 2012, Mistler sent prescription drugs from Northern California to Connor in Alaska. Connor made deposits into Mistler’s bank account to pay for the pills. In total, Mistler shipped approximately 9,600 pills to Connor. About two-thirds of the pills were oxycodone and one‑third of the tablets were morphine. In exchange for the pills, Connor deposited approximately $125,000 into Mistler’s bank account.
On April 21, 2016, Judge Nunley sentenced Mistler to 35 months in prison.
This case was the product of an investigation by the Drug Enforcement Administration, the United States Postal Service, the Alaska State Troopers, the California Department of Justice Bureau of Medi-Cal Fraud & Elder Abuse, the U.S. Department of Health & Human Services, and the U.S. Marshals Service. Assistant United States Attorney Christiaan Highsmith prosecuted 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. OCDETF’s principal mission 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.
Final Defendant in Stockton Methamphetamine Conspiracy Sentenced to 12 Years in PrisonRead the Press Release
SACRAMENTO, Calif. — Thomas Jaime Orozco, 35, of Stockton, was sentenced Wednesday by U.S. District Judge Kimberly J. Mueller to 12 years in prison for conspiring to distribute methamphetamine, Acting United States Attorney Phillip A. Talbert announced.
According to court documents, Orozco was the leader of a methamphetamine distribution conspiracy in San Joaquin County in 2012. He supplied five co-defendants with methamphetamine that they, in turn, sold to an undercover agent and others. On two occasions, an undercover agent purchased a total of about 1.7 pounds of methamphetamine from Orozco’s co-conspirators. On November 29, 2012, the undercover agent agreed to meet with Orozco in Lodi to purchase 10 pounds of methamphetamine. Co-conspirators Vincent Camarillo, 29, and Theodore Ohagen IV, 25, both of Stockton, came with Orozco. Agents arrested all three at the site of the deal and discovered that Camarillo was carrying a stolen, loaded handgun concealed in his waistband.
After the arrests, police found at the site of the last deal, which was a home occupied by co-conspirator Jeffrey Lamendola, 53, of Lodi, two additional loaded handguns, four pistol magazines, 70 rounds of ammunition, 55 grams of methamphetamine, a digital scale, baggies, needles, and 215 grams of marijuana. A Lodi residence shared by Camarillo and Ohagen contained two bulletproof vests, seven rifle magazines, one pistol magazine, about 700 rounds of ammunition, nearly $15,000 in cash, 12 cellphones, 24 grams of cocaine, and nearly 10 kilograms of marijuana.
This case was the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant United States Attorney Amanda Beck prosecuted the case.
“This sentence is a direct result of the tireless work HSI agents and our local law enforcement partners have carried out to disrupt and dismantle drug trafficking rings in a joint effort to keep our communities safe,” said Ryan L. Spradlin, Special Agent in Charge of HSI San Francisco.
After pleading guilty to conspiracy to distribute methamphetamine, Camarillo was sentenced to 10 years in prison on October 28, 2016, and Lamendola was sentenced to seven and a half years in prison on January 6, 2016.
The following defendants in the conspiracy pleaded guilty to using a cellphone for the purpose of drug trafficking and were sentenced as follows: On January 20, 2016, Sarah Torreblanca, 29, of San Jose, was sentenced to four years in prison; on April 9, 2014, Lisa Elliott, 55, of Lodi, was sentenced to three years in prison; and on March 2, 2016, Ohagen was sentenced to four years in prison.
Southern California Man Pleads Guilty to Making Illegal Contributions to His Son’s Congressional CampaignRead the Press Release
SACRAMENTO, Calif. — Babulal Bera, 83, of La Palma, pleaded guilty today to making excessive campaign contributions and making campaign contributions in the name of another.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting United States Attorney Phillip A. Talbert made the announcement.
The charges were filed in the District Court in Sacramento on Monday. Earlier today, Bera was arraigned and pleaded guilty to both counts before United States District Judge Troy L. Nunley.
According to court documents, in 2010 and 2012, Bera’s son was a candidate for a seat in the United States Congress representing District 3 (2010) and District 7 (2012) from the state of California. With respect to both elections, the candidate’s official federal campaign committee was headquartered in Elk Grove. With respect to both elections, the defendant made the maximum allowable individual contributions to his son’s campaign, and he also solicited friends, family members and acquaintances to make contributions, which he then reimbursed with his own funds. Bera did this to make contributions to his son’s campaign in excess of the contribution limits established by federal law. With respect to the 2010 and 2012 elections, the government has identified over 130 improper campaign contributions involving approximately 90 contributors. To date, the government has identified over $220,000 in reimbursed contributions relating to the 2010 campaign, and over $40,000 in reimbursed contributions relating to the 2012 campaign.
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorneys John Vincent and Philip Ferrari, and Department of Justice Public Integrity Section Trial Attorney Richard Evans are prosecuting the case.
Bera, who was ordered released on his own recognizance, is scheduled to be sentenced by Judge Nunley on August 4, 2016. Bera faces a maximum statutory penalty of five years in prison 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.
Lodi Oncologist and Office Administrator Pay $300,000 to Settle False Claims Act AllegationsRead the Press Release
SACRAMENTO, Calif. — A Lodi oncologist and his wife, who served as the doctor’s office administrator, have paid the United States $300,000 to settle allegations that they improperly billed Medicare for certain chemotherapy drugs purchased from an unlicensed foreign pharmaceutical distributor, Acting United States Attorney Phillip A. Talbert announced today.
The United States alleged that, between October 2010 and May 2011, Dr. John F. Kiraly and Rena Kiraly billed and received reimbursement from Medicare for such drugs in violation of the federal False Claims Act. Specifically, the Kiralys purchased chemotherapy drugs from Warwick Healthcare Solutions Inc., also known as Richards Pharma, a former United Kingdom-based drug distributer that distributed non-FDA approved drugs throughout the United States. The Kiralys administered certain of these drugs to their patients, billing Medicare. One medication they purchased from Warwick was Altuzan, a drug not approved by the FDA. In addition, the FDA tested a batch of Altuzan that the Kiralys had purchased from Warwick and determined that it was counterfeit, lacking the active ingredient bevacizumab.
“Our District has now pursued and resolved False Claims Act allegations against three doctors for improperly billing Warwick drugs to public insurers,” said Acting U.S. Attorney Talbert. “These cases demonstrate the commitment of our district to preserving the integrity of federal health care programs and ensuring that doctors participating in such programs provide their patients with safe and effective care.”
“Patients getting life-saving prescriptions from their doctors must be able to trust that their medicines have been FDA-proven as safe and effective,” said Steven Ryan, Special Agent in Charge of the Office of Inspector General of the U.S. Department of Health and Human Services. “Our investigators tirelessly pursue those who ignore requirements protecting patient health in order to increase profits.”
“Patients receiving cancer treatment drugs should be able to trust that these drugs have been the subject of the FDA-approval process, which requires that the drugs have been proven to be safe and effective for treating their medical conditions,” said Lisa L. Malinowski, Special Agent in Charge, FDA Office of Criminal Investigations’ Los Angeles Field Office. “The FDA will continue its vigilance over the prescription-drug supply chain to ensure that the drugs reaching patients have been proven to be both safe and effective, and that those who attempt to circumvent the agency’s oversight will be brought to justice.”
The case was investigated by the U.S. Department of Health and Human Services Office of Inspector General and the FDA’s Office of Criminal Investigations. Assistant United States Attorney Vincente A. Tennerelli represented the United States in this matter. The claims settled by this agreement are allegations only, and there has been no determination of liability.
Fresno Man Pleads Guilty to Conspiring to Distribute HeroinRead the Press Release
FRESNO, Calif. — Rafael Guzman, 42, of Fresno, pleaded guilty today to conspiracy to distribute and possess with intent to distribute heroin, Acting United States Attorney Phillip A. Talbert announced.
Guzman was indicted on April 9, 2015, with six other defendants including Keith Foster, a former deputy chief of the Fresno Police Department. According to Guzman’s plea agreement, between December 23, 2014, and February 2, 2015, he conspired with Foster to acquire and distribute heroin.
This case is the product of an investigation by the Federal Bureau of Investigation and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorneys Melanie L. Alsworth and Duce W. Rice are prosecuting the case.
Guzman is scheduled to be sentenced by United States District Judge Anthony W. Ishii on August 15, 2016. Guzman 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.
Co-defendant Sarah Ybarra previously pleaded guilty to conspiring to distribute marijuana and was sentenced to a one year in prison. The charges against all of the remaining defendants, including Foster, are allegations only; they are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Fresno County Man Sentenced to over 12 Years in Prison for Enticement of a MinorRead the Press Release
FRESNO, Calif. — Juan Martin Torres, 28, of Firebaugh, was sentenced today by United States District Judge Anthony W. Ishii to 12 years and seven months in prison for enticing a minor to engage in unlawful sexual activity, Acting United States Attorney Phillip A. Talbert announced.
According to evidence presented at trial in February 2016, Torres was the director of the Firebaugh Boys and Girls Club. Torres was supervising a 14-year-old boy who often came to that Boys and Girls Club after school to complete 120 hours of community service. Torres sent the boy messages over Facebook that offered to shortcut his community‑service-hours requirement if the boy would agree to sexual acts with Torres. The boy reported the messages to law enforcement.
This case was the product of an investigation by the Firebaugh Police Department, the Fresno County Sheriff’s Office, and the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant United States Attorneys Michael Tierney and Vincenza Rabenn prosecuted the case.
“We trust those in positions like the one held by the defendant to protect our children,” said Acting U.S. Attorney Talbert. “In committing this crime, the defendant committed an incredible breach of trust with the community, and we are grateful for the hard work by our partners in federal and local law enforcement to bring him to justice.”
“Torres’ heinous violation of the trust afforded to him as a mentor and protector remains appalling,” said Ryan L. Spradlin, special agent in charge of HSI San Francisco. “The sentence is befitting of his disturbing crime and should be seen as a clear message that HSI and our law enforcement partners will make certain that anyone who chooses to exploit innocent children will be held accountable for their actions.”
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.
Florida Resident Pleads Guilty to Fraudulent Shipments of Synthetic Drugs from Lab in StocktonRead the Press Release
FRESNO, Calif. — Timothy New, 33, of Pensacola, Florida, pleaded guilty today to shipping in interstate commerce, with intent to defraud, misbranded synthetic drugs, commonly known as “spice,” Acting United States Attorney Philip A. Talbert announced.
According to court documents, between September 2012 and May 2103, New and his co‑defendants utilized a manufacturing and distribution operation at a processing lab in Stockton to ship 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 as a result of the fraudulent sales.
Operating under the guise of legitimacy by companies called Zencense Incense Works LLC, ZenBio LLC, and Biozen LLC, New and his co-defendants received falsely invoiced raw synthetic cannabinoids from China that they used to manufacture and distribute as smokeable synthetic cannabinoids. The drugs were sold under the brand names Bizarro, Orgazmo, Headhunter, Defcon, Neutronium, Sonic Zero, Sonic Boom, Sonic Blast, Shockwave, Hampster, and Posh. To evade detection by federal law enforcement authorities, New and his co-defendants deliberately misbranded and marketed their product as “potpourri” or “herbal incense” that they claimed was “not for human consumption,” but fully intended to be used as a narcotic. New and his co-defendants distributed the drugs to the Stuffed Pipe smoke shops located throughout the Central Valley of California, as well as to numerous other retail establishments throughout the United States.
At the time of the illicit enterprise, AM-2201 was a Schedule I controlled substance and XLR11 was a controlled substance analogue that was publically noticed for scheduling in April, 2013, and was placed under Schedule I as a controlled substance in May, 2013.
Public health and law enforcement agencies have seen the emergence of synthetic drug use. State and local public health departments note that synthetic cannabinoids cause serious adverse health effects, including agitation, anxiety, nausea, vomiting, tachycardia, elevated blood pressure, tremor, seizures, hallucinations, and paranoid behavior. DEA scheduled XLR11 based, in part, on findings of the Center for Disease Control and Prevention that the drug causes kidney damage.
This case is the product of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation by the Drug Enforcement Administration, 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. Assistant United States Attorney Karen A. Escobar is prosecuting the case.
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 United States Attorney General's drug 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.
New is scheduled for sentencing on August 1, 2016, by United States District Judge Dale A. Drozd. 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 Douglas Jason Way, 41, of Evanston, Illinois, Timothy Ortiz, 45, of Waukegan, Illinois, and Natalie Middleton, 28, of Clovis, California, have entered not guilty pleas and are next scheduled to appear in federal court in September. They are charged with drug and money laundering offenses, in addition to the misbranding charge, and face a maximum penalty of 20 years in prison and a $10 million fine. The charges against them are only allegations; Way, Ortiz, and Middleton are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Yuba City Man Sentenced to 16 Years in Prison for Producing Child PornographyRead the Press Release
SACRAMENTO, Calif. — Nathan Penner, 26, of Yuba City, was sentenced today to 16 years and three months in prison for producing child pornography, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Phillip A. Talbert of the Eastern District of California, Special Agent in Charge Ryan Spradlin of the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) San Francisco Field Division and Chief of Police Robert D. Landon of the Yuba City Police Department.
Penner pleaded guilty on November 5, 2015, to one count of production of child pornography. U.S. District Judge Troy L. Nunley sentenced Penner today and also ordered him to serve a lifetime term of supervised release.
In connection with his plea, Penner admitted to producing sexually explicit images and videos of a five-year-old girl in September and October of 2012. During the sentencing hearing, evidence revealed that Penner downloaded hundreds of files of child pornography located on his computer and distributed such material using an online chat messaging service.
“We are gratified by the sentence imposed today, which provides a measure of justice in response to a crime that inflicts tremendous suffering upon the most vulnerable of victims and sends a strong message that all children deserve a childhood free from such exploitation and harm,” said Acting U.S. Attorney Talbert. “We are grateful for the hard work and collaboration of our local and federal law enforcement partners, and we will continue to aggressively investigate and prosecute those who engage in the exploitation of our children.”
Chief Robert D. Landon stated: “The Yuba City Police Department extends sincere appreciation to all agencies involved in this case. The collaborative effort of all who worked on the thorough investigation and successful prosecution of this child predator should be commended.”
This case was investigated by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Yuba City Police Department. Trial Attorney Reginald E. Jones of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Special Assistant U.S. Attorney Josh F. Sigal of the Eastern District of California prosecuted the case. CEOS’ High Technology Investigative Unit assisted with computer forensic analysis for the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by the U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Woodland Husband and Wife Indicted for Tax EvasionRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a four-count indictment today against Virendra “Vic” Maharaj, 49, and his wife, Rosalin Prasad, 40, both of Woodland, charging them with one count of conspiring to defraud the United States by impeding the IRS’s assessment of their income tax liability, and further charging Maharaj with three counts of tax evasion, Acting U.S. Attorney Phillip A. Talbert announced.
According to court documents, between January 2005 and January 2010, Maharaj and Prasad conspired to defraud the United States by impeding the Internal Revenue Service in its attempt to assess the couple’s tax obligations for the years 2005, 2006, and 2007. Additionally, Maharaj, who worked at multiple car dealerships in Sacramento and Woodland, attempted to evade or defeat the assessment of his tax obligations for those same tax years. In an attempt to conceal the source and amount of his income, Maharaj caused part of his wages to be paid directly to Prasad. He caused Wage and Tax Statements on W-2 forms to be issued in Prasad’s name for wages actually paid to him, and in amounts that recorded only part of the wages he received. Maharaj took some of his compensation from the car dealerships in cash, and this compensation was not recorded on the W‑2 forms. Maharaj also caused the dealership to pay some of his compensation directly to one of Prasad’s creditors to pay for a loan, and these payments were not recorded on the W‑2 forms.
According to the indictment, tax returns were filed for Prasad for the tax years 2005, 2006, and 2007, reporting the wages on the W-2 forms that underreported the income received for Maharaj’s work. Maharaj failed to file tax returns for any of the years in question.
This case is the product of an investigation by the Internal Revenue Service, Criminal Investigation. Assistant U.S. Attorney Nirav Desai is prosecuting the case.
The defendants are scheduled to be arraigned on the indictment on May 6, 2016.
If convicted of the conspiracy offense, Maharaj and Prasad each face a maximum statutory penalty of five years in prison and a $250,000 fine. If convicted on the tax evasion counts, Maharaj faces a maximum statutory penalty of five years in prison and a $100,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Three Defendants Charged for Timeshare Resale FraudRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a 22-count indictment today against Juan Carlos Montalbo, 54, of San Antonio, Texas; Wayne Arthur York II, 47, of Albuquerque, New Mexico; and Marco Antonio Ramirez-Zuno, 31, of Cancun, Mexico, charging them with wire fraud and conspiracy to commit wire fraud in relation to a timeshare-resale scheme, Acting U.S. Attorney Phillip A. Talbert announced.
According to court documents, between 2011 and 2012, the defendants conducted a timeshare resale fraud scheme based in Puerto Vallarta, Mexico. Montalbo conducted sales meetings to convince prospective customers to purchase a timeshare vacation package marketed under the names Platinum Access Program or World Luxury Destinations. If customers had existing timeshare properties, Montalbo (also known as John Monte) assured them that another company, Continental Resources, would arrange for their sale. When the customers returned from Mexico, they were contacted by York (also known as Tim Hamick or Michael Halston), who claimed to represent companies named Property Marketing Group or Eagle Market Solution and claiming that a bona fide purchaser had been found and was ready to purchase their existing timeshares. Others were contacted directly by York without first giving their information to Montalbo.
According to court documents, York and others would then extract a series of upfront payments from the victims, which York claimed were required to be wired to bank accounts in Mexico in order for the guaranteed sale to be completed. York and the others would falsely claim that a buyer for the timeshare had already been located, and that all the prepaid fees wired to Mexico were being held in escrow and would be refunded to the victims as soon as the transaction was completed. After the victims wired the money to Mexico, York and the others would break off all contact with them. According to court documents, Ramirez Zuno managed the Mexican bank accounts used in the fraud, trained co-conspirators on how to conduct the fraud, and managed the disbursement of the proceeds of the fraud.
This case is the product of an extensive and ongoing investigation by the Federal Bureau of Investigation. Assistant United States Attorney Matthew G. Morris is prosecuting the case.
On October 15, 2015, Montalbo was arrested in Phoenix, Arizona and has been released on bond. His next scheduled court appearance is May 12, 2016, before U.S. Magistrate Judge Kendall J. Newman.
On March 30, 2016, York was arrested in Albuquerque, New Mexico, and was ordered held without bond. On April 14, 2016, Ramirez Zuno was arrested in Miami, Florida and remains in custody pending further proceedings.
York and Zuno were arraigned today in Sacramento before U.S. Magistrate Judge Edmund F. Brennan and entered pleas of not guilty. They are next scheduled for a status conference on June 28, 2016, before U.S. District Judge John A. Mendez at 9:15 a.m.
If convicted, each defendant faces a maximum statutory penalty of 20 years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Sacramento Dentist Sentenced to over 3 Years in Prison for Billing for Unnecessary or Unperformed Dental WorkRead the Press Release
SACRAMENTO, Calif. — David M. Lewis, 62, of Sacramento, was sentenced today by United States District Judge Morrison C. England Jr. to three years and 10 months in prison and a $75,000 fine for health care fraud, Acting United States Attorney Phillip A. Talbert announced.
According to court documents, beginning approximately in late 2008, Lewis, a dentist practicing in Sacramento, began targeting United Parcel Service employees for dental treatment because their health care plan under the Northern California General Teamsters Security Fund provided 100 percent coverage without any annual limits. Lewis offered cash and other incentives to UPS patients for receiving dental treatment or for recruiting other UPS employees to receive such treatment.
The UPS health care plan was administered by Delta Health Systems. In some instances, Lewis caused claims to be submitted to Delta that falsely billed the plan for work that was never performed. In many other instances, Lewis performed unnecessary dental work on UPS employees, including root canals, and claims were submitted to Delta for payment for these unnecessary services.
Lewis created false narratives for dental work that was not performed or created false statements about purported pre-existing dental conditions to justify the work performed. In some instances, Lewis drilled into teeth to install temporary filings and instructed his assistants to take X-rays of the temporary filings. Lewis then submitted claims to Delta with X-rays of the temporary fillings, falsely claiming that the X-rays depicted tooth decay justifying further restorative procedures.
“This defendant went well beyond the lies one normally finds at the root of a fraud scheme,” said Acting U.S. Attorney Talbert. “He not only plundered funds meant to provide essential services, he inflicted pain and suffering on his patients through the performance of unnecessary medical procedures, all in the name of additional profit. We are gratified by today’s sentence, and thankful for the critical work done by our partners in the Department of Labor and the State of California.”
“Today’s sentencing demonstrates that those who commit heath care fraud will be held criminally accountable. We will continue to work with our law enforcement partners to safeguard the health benefits of union workers from medical providers seeking self‑enrichment,” stated Abel Salinas, Special Agent-in-Charge of the Los Angeles Regional Office of the U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.
“Dr. Lewis put his own financial interests ahead of his patients’ dental health, causing them harm instead of healing,” commented Jean Ackerman, Regional Director for EBSA. “This case is indicative of our close and continued partnership with fellow federal agencies to vigorously pursue those who commit crimes against employee benefit plan participants.”
A restitution hearing is set for June 23, 2016, and Lewis is scheduled to self‑surrender to begin serving his sentence on July 14, 2016.
An employee at Lewis’s dental practice, Nichol Ramirez aka Nichol Lomack, previously pleaded guilty to one count of health care fraud for her part in the fraud scheme in a separate case. (2:14-cr-056 MCE) Lomack is scheduled to be sentenced on September 1, 2016. She faces a maximum statutory penalty of 10 years in prison and a fine of $250,000 or twice the gross loss or gain of the scheme. 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.
These cases are the product of an investigation by the U.S. Department of Labor, Office of Inspector General-Office of Labor Racketeering and Fraud Investigations and the U.S. Department of Labor, Employee Benefits Security Administration, with assistance from the California Dental Board and the California Attorney General’s Office. Assistant United States Attorney Todd A. Pickles is prosecuting the cases.
Cleveland Man Pleads Guilty to Transporting Minors to California to Engage in Commercial Sex ActsRead the Press Release
SACRAMENTO, Calif. —Jarrail Lamont Smith, 23, of Cleveland, Ohio, pleaded guilty today to two counts of interstate transportation of a minor for the purpose of prostitution, Acting United States Attorney Phillip A. Talbert announced.
According to court documents, in August 2015, Smith traveled from Cleveland to California with two minor victims with the expectation that they would engage in commercial sex acts with others for his benefit. Once they arrived in Northern California, he directed them to post advertisements for sexual services online. The investigation revealed multiple advertisements posted in the Bay area and Sacramento that featured photographs of both victims. After receiving a tip that one of the minors was being trafficked at a motel in Sacramento, the FBI initiated a sting operation to recover her. The operation was successful, and agents also found the other minor victim in the same hotel room. One of the minors had two black eyes when the FBI located her.
This case is the product of an investigation by the FBI’s Child Exploitation Task Force, which is made up of FBI agents and detectives from the Sacramento Police Department. Assistant United States Attorney Michele Beckwith is prosecuting the case.
Smith is scheduled to be sentenced by United States District Judge Troy L. Nunley on August 4, 2016. Smith faces 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.
Sutter County Man Found Guilty of Two Violations of the Migratory Bird Treaty ActRead the Press Release
SACRAMENTO, Calif. — A federal jury found William Louis Filter, 46, of Live Oak, guilty on Tuesday of unlawful baiting and unlawful taking of a migratory game bird by aid of bait, Acting United States Attorney Phillip A. Talbert announced.
The evidence at the two-day trial showed that Filter baited a field on his family’s hunting ranch in the Sutter Buttes by covering it with birdseed to attract mourning doves. On September 1, 2015, which is opening day of mourning dove season, Filter returned to that baited field with his three hunting buddies. Altogether, Filter and his friends shot and killed 34 mourning doves over the baited fields.
Mourning doves are a migratory game bird. It is lawful to hunt mourning doves during the appropriate hunting season. It is unlawful, however, to hunt mourning doves using bait. Baiting means placing, distributing, or scattering of salt, grain, or other feed that could serve as a lure or attractions for migratory game birds to any areas where hunters are attempting to take them.
This case is the product of an investigation by the United States Fish and Wildlife Service and California Department of Fish and Wildlife. Special Assistant United States Attorneys Benjamin Nelson and Elliot Wong prosecuted the case.
Filter is scheduled to be sentenced on June 6, 2016, by United States Magistrate Judge Allison Claire. Filter faces a maximum statutory penalty of one year in prison, a $100,000 fine, and a one-year term of supervised release. The actual sentenced 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.
Previously Deported Foreign National Pleads Guilty to Passport FraudRead the Press Release
SACRAMENTO, Calif. — Leonardo Cesar Pulido-Escamilla, 39, a Mexican national who previously resided in Yuba City and other California cities, pleaded guilty today to making a false statement in an application for a United States Passport, Acting United States Attorney Phillip A. Talbert announced.
According to court documents, Pulido-Escamilla fraudulently applied for a U.S. Passport in 2012, using another person’s name and birth certificate in connection with the application. Pulido-Escamilla had been deported from the United States in 1997 and 2004, and on March 20, 2016, he was apprehended by border patrol agents in Arizona.
This case is the product of an investigation by the U.S. Department of State’s Diplomatic Security Service. Assistant U.S. Attorney Nirav Desai is prosecuting the case.
Pulido-Escamilla is scheduled to be sentenced by United States District Judge Kimberly J. Mueller on July 20, 2016. Pulido-Escamilla 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.
Menlo Worldwide Services Inc. and Its Subcontractor Estes Pay the U.S. $13 Million to Resolve False Claims Act AllegationsRead the Press Release
SACRAMENTO, Calif. — A company and its subcontractor have paid a total of $13 million to resolve allegations under the False Claims Act that they overcharged the government in various ways under the Defense Transportation Coordination Initiative contract in part by billing the cost of moving freight by air when it was actually shipped by ground, Acting United States Attorney Phillip A. Talbert announced today.
Menlo Worldwide Services Inc. has paid the United States $10 million, and Estes Forwarding Worldwide, on behalf of itself and its parent Estes Express Lines, has paid $3 million.
“This settlement demonstrates our commitment to protecting the integrity of federal contracts and ensuring the government only pays for the actual services rendered as required under the contract,” said Acting U.S. Attorney Talbert.
The civil settlement resolves a lawsuit filed in the Eastern District of California under the qui tam, or whistleblower, provisions of the False Claims Act. These provisions allow private citizens to bring civil actions on behalf of the United States for false claims and share in a portion of the government’s recovery. The whistleblowers in this case will collectively receive $2.86 million of the recovery proceeds.
This settlement was the result of a coordinated effort among the U.S. Attorney’s Office for the Eastern District of California, the United States Transportation Command, the Defense Criminal Investigative Service, the Defense Contract Audit Agency, the U.S. Army Criminal Investigation Command, and the Department of Justice’s Civil Division, Commercial Litigation Branch. Assistant United States Attorneys Kelli Taylor and Colleen Kennedy handled the matter for the United States.
The claims settled by this agreement are allegations only, and there has been no determination of liability. Menlo Worldwide Services Inc., Estes Forwarding Worldwide, and Estes Express Lines cooperated with the United States’ investigation of this matter.
Elk Grove Man Sentenced to Two and a Half Years in Prison for National Guard Recruiting FraudRead the Press Release
SACRAMENTO, Calif. — Richard C. Sihner, 54, of Elk Grove, was sentenced today to two years and six months in prison for a scheme to fraudulently obtain bonuses in a recruitment program for the California National Guard, Acting United States Attorney Phillip A. Talbert announced.
On January 22, 2016, after a seven-day trial, a jury found Sihner guilty of 18 counts of wire fraud relating to his scheme to receive unearned recruiting bonuses relating to California National Guard enlistees. The jury also convicted Sihner of one count of making false statements to a federal agent.
In sentencing Sihner, United States District Judge John A. Mendez rejected the suggestion that any blame for the crime rested with others involved in the process. “You, and you alone, are responsible,” said Judge Mendez.
“Integrity is a California National Guard core value, and we're committed to holding our soldiers and airmen accountable if they elect to commit fraud,” said Maj. Gen. David S. Baldwin, Adjutant General for the California National Guard. “These cooperative efforts by the U.S. Attorney's Office continue to help us ensure we remain not only a capable force, but also an ethical force worthy of the people's trust.”
Sihner is a retired member of the California National Guard and participated in the Guard Recruiter Assistant Program (G-RAP). The United States Army contracted with Document and Packaging Broker Inc. (DOCUPAK) to administer G-RAP. Under G-RAP, members of the California National Guard served as recruiting assistants (RA). If an RA referred a potential Guard member to a recruiting office and that person ultimately enlisted, the RA was eligible to receive monetary compensation disbursed by DOCUPAK. RAs would typically receive a $1,000 payment when a nominee enlisted and a second $1,000 payment when the nominee left for boot camp. Ultimately, the G-RAP program was discontinued following the discovery of widespread fraud. Recruits who walked into recruiting offices entirely on their own initiative and were not referred by an RA, were claimed by corrupt RAs in DOCUPAK’s system, often with the assistance of corrupt recruiters.
According to evidence produced at trial, from December 27, 2007 to April 16, 2010, Sihner was an RA in the G-RAP program. A recruiter gave him information about new recruits so that Sihner could falsely claim to have referred them. Sihner made false claims and wrote elaborate falsehoods in the notes section of the DOCUPAK online portal indicating that he had referred the recruits. In fact, the recruits had made contact with the Guard to discuss potential enlistment for reasons entirely unrelated to Sihner. Sihner was paid $95,000 in compensation for purportedly referring 51 soldiers to enlist. Of the 39 recruits federal agents contacted prior to indictment, none had been referred to the Guard by Sihner. When confronted, Sihner lied to federal law enforcement agents investigating the fraud by repeatedly claiming that he had personally referred all of the new soldiers and that he had taken them to the recruiting office to introduce them.
This case was the product of an ongoing investigation by the Army Criminal Investigative Command Major Procurement Fraud Unit, the Defense Criminal Investigative Service, and the Federal Bureau of Investigation. Assistant United States Attorneys Matthew G. Morris and Katherine T. Lydon prosecuted the case.
Other National Guard members and recruiters have been charged in similar recruiting‑fraud schemes in the Eastern District of California. The following defendants have pleaded guilty and await sentencing.
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2:14-cr-153 TLN — Brian Kaps, 42, of Chico, pleaded guilty on November 21, 2014, to one count of wire fraud. Sentencing is set for August 18, 2016.
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2:14-cr-152 TLN — Sarah Nattress, 28, of Paradise, pleaded guilty on October 23, 2014, to one count of wire fraud. Sentencing is set for May 26, 2016.
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1:14-cr-108-LJO — Nicholas Huerta, 33, of Fresno, pleaded guilty on September 14, 2015, to one count of wire fraud. Sentencing is set for November 14, 2016.
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1:14-cr-106 DAD — Joaquin Cuenca, 38, of San Diego, was a recruiter. On February 2, 2016, a jury found him guilty of three counts of wire fraud for fraudulent bonuses. He is scheduled for sentencing on July 18, 2016.
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Nuestra Familia Leader and Associates Sentenced on Racketeering ChargesRead the Press Release
FRESNO, Calif. — Two Nuestra Familia gang members were sentenced today for racketeering offenses, and a third defendant who held a leadership role in the gang was also recently sentenced, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting U.S. Attorney Phillip A. Talbert of the Eastern District of California announced.
Earlier today, United States District Judge Lawrence J. O’Neill sentenced Joe Anthony Felix, 36, of Modesto, to 12 years and seven months in prison for conspiring to engage in racketeering and sentenced him to an additional, consecutive term of nine months in prison for a supervised release violation on a 2004 case. Judge O’Neill also sentenced Jesus Gomez Felix, 32, of Modesto, today to two and a half years in prison for assault with a deadly weapon in aid of racketeering. Previously, on April 11, Gary Anthony Romero, 50, of Stockton, was sentenced to 20 years in prison for conspiring to engage in racketeering.
According to court documents, Nuestra Familia is a prison gang that originally formed in the California state prison system in the 1960s. Nuestra Familia leaders control and direct the gang’s criminal activities both inside and outside of the prison system.
According to court documents, Romero has been a member of Nuestra Familia for approximately 20 years and reached one of the highest levels of authority in Nuestra Familia. He ordered various crimes to be committed for the benefit of the gang in Stanislaus County, including aggravated assaults, robberies and drug dealing. Romero ordered a home invasion robbery in Turlock in which the robbers wielded firearms and made off with a vehicle and several other items. While Romero was in custody at the Stanislaus County Jail, he ordered the “removal” of several Nortenos who had violated Nuestra Familia rules. A “removal” involved assaulting the individuals with homemade weapons, as well as fists and feet. Several of the victims suffered stab wounds. Romero also directed a gang member to set up subsets of the gang throughout Stanislaus County to collect money from the members, including proceeds of their drug trafficking activities, and to put the funds in Romero’s account at Stanislaus County Jail.
Joe Felix was a Norteno, a gang under the Nuestra Familia umbrella, who provided direction to other Nortenos to commit various crimes, including attempted murder and drug trafficking in Modesto. Joe Felix participated and directed others to participate in an assault on two individuals who had dropped out of the gang. Jesus Felix participated in this assault and exchanged gunfire with someone from the opposing side during the incident. No one was shot, but as a result of the attack, one of the victims suffered a fractured orbital bone and injury to his eye. Joe Felix also directed the sales of methamphetamine by other Nortenos, and profited from the drug trafficking operation.
This case was the product of an investigation by the Central Valley Gang Impact Task Force under the FBI’s Safe Streets Initiative, with the assistance of the Stanislaus County District Attorney’s Office, the Stanislaus County Sheriff’s Office, the Modesto Police Department, the Ceres Police Department, the California Highway Patrol, the California Department of Corrections and Rehabilitation, the Bureau of Prisons, and the Stanislaus County Probation Department.
Stanislaus County District Attorney Birgit Fladager said, “I would like to thank the United States Department of Justice and the hard work of the federal prosecutors who prosecuted this case. We will remain committed to working collaboratively with our federal partners to pursue criminal gang members who commit violent crimes and pose a threat to the citizens of Stanislaus County.”
The case was prosecuted by Trial Attorneys Louis A. Crisostomo and Kelly Pearson of the Criminal Division’s Organized Crime and Gang Section and Assistant United States Attorneys Kimberly A. Sanchez and Laurel J. Montoya of the Eastern District of California.
Fresno Teacher’s Aide Sentenced for Marijuana Cultivation Operation in Trinity CountyRead the Press Release
FRESNO, Calif. — Kevin Nouthai Yang, aka Thai Yang, 49, of Fresno, was sentenced today to three years and 10 months in prison, to be followed by three years of supervised release, for conspiring to cultivate, distribute and possess with intent to distribute marijuana grown on property that he owned in Hay Fork in the Shasta Trinity National Forest, Acting United States Attorney Phillip A. Talbert announced.
In sentencing Yang, U.S. District Judge Lawrence J. O’Neill also ordered the forfeiture of the property and a firearm.
According to court documents, Yang, who was then a high school teacher’s aide for the Central Unified School District, was found armed at the Hay Fork property during the execution of a federal search warrant. Yang was in the process of harvesting marijuana and was in possession of 324 pounds of marijuana and 200 marijuana plants. He was also in possession of restricted-use pesticides that had been transported across public land for use in the marijuana cultivation operation. Yang has since resigned from his teaching position.
U.S. Forest Service agents obtained the search warrant after seeing hundreds of large, mature marijuana plants growing on Yang’s property. Some of the marijuana grown on Yang’s property had already been transported to Fresno for distribution.
This case was the product of an investigation by the U.S. Forest Service and the Trinity County Sheriff’s Office. Assistant United States Attorney Karen A. Escobar prosecuted the case.
Ripon Man Arraigned for Bankruptcy Fraud IndictmentRead the Press Release
SACRAMENTO, Calif. — Kulvir Singh Cheema, 55, of Ripon, was arraigned today before U.S. Magistrate Judge Edmond F. Brennan on bankruptcy fraud charges, United States Attorney Benjamin B. Wagner announced.
On March 31, 2016, a federal grand jury returned an indictment against Cheema, charging him with false bankruptcy declaration, concealment of bankruptcy assets, and fraudulent transfer. At the arraignment, Cheema entered a plea of not guilty. A status conference is scheduled for May 20, 2016 before U.S. District Judge Garland E. Burrell Jr.
According to court documents, when Cheema filed for bankruptcy in April 2011, he provided false information about his employment and wages that he received, his current income, his residence, and whether he had lost a piece of property in the past. He is also alleged to have concealed income that he received, as well as assets such as trucks and bank accounts that he controlled and that were held in other names. In January 2010, in contemplation of filing for bankruptcy, Cheema knowingly and fraudulently transferred ownership of his residence in Ripon from himself to another person.
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys John K. Vincent and Brian A. Fogerty are prosecuting the case.
If convicted, Cheema faces a maximum statutory penalty of five years in prison for each of the three bankruptcy counts and up to 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.
El Dorado County Man Found Guilty of Failing to Surrender for Service of SentenceRead the Press Release
SACRAMENTO, Calif. — Cesar Caballero, 46, of Diamond Springs, was found guilty on Tuesday after a two-day jury trial for failing to surrender for service of sentence, United States Attorney Benjamin B. Wagner announced.
According to court documents, on August 30, 2011, Caballero was convicted of obstruction of mail for submitting Official Federal Mail Forwarding Change of Address Order forms to the U.S. Postal Service for the purpose of diverting mail addressed to the Shingle Springs Band of Miwok Indians to himself. After he was sentenced, Caballero appealed, and the Ninth Circuit affirmed his conviction on two of the three counts against him. He was resentenced on June 29, 2015, to a sixty day term of incarceration. He was ordered to surrender to begin serving his sentence by September 8, 2015.
As the evidence at trial demonstrated, Caballero failed to surrender as ordered on September 8, 2015, or any day thereafter. He was subsequently arrested by the El Dorado County Sheriff’s Office on February 28, 2016.
This case is the product of an investigation by the United States Marshals Service, with the assistance of the United States Postal Inspection Service, the Federal Bureau of Prisons, and the El Dorado County Sheriff’s Office. Special Assistant United States Attorneys Elliot Wong and Benjamin Nelson prosecuted the case.
Caballero is scheduled to be sentenced on May 17, 2016, by United States District Judge John A. Mendez. Caballero faces a maximum statutory penalty of one year in prison, a $100,000 fine, and a one-year term of supervised release. The actual sentenced 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.
DEA’s National Prescription Drug Take-Back Day Is SaturdayRead the Press Release
SACRAMENTO, Calif. – After collecting and destroying 5.5 million pounds—2,762 tons—of unused prescription drugs in the past five years, the U.S. Drug Enforcement Administration is continuing its efforts to take back unused, unwanted and expired prescription medications. The DEA invites the public to bring their potentially dangerous, unwanted medicines to one of over 5,000 collection sites around the country that are manned by more than 3,800 of DEA’s tribal and local law enforcement partners. This service is free of charge, with no questions asked.
The public can find a nearby collection site by visiting www.dea.gov, clicking on the “Got Drugs?” icon, and entering their zip code into the search window, or they can call 800-882-9539. Only pills and other solids, like patches, will be accepted—the public should not bring liquids, needles or other sharps to take back sites.
America is presently experiencing an epidemic of addiction, overdose and death due to abuse of prescription drugs, particularly opioid painkillers. 6.5 million Americans abuse prescription drugs, according to the most recent National Survey on Drug Use and Health, more than abuse cocaine, heroin, and hallucinogens combined.
“The abuse of prescription drugs is America’s fastest-growing drug problem, and too many people are dying or being seriously injured for the misuse of such drugs,” U.S. Attorney Wagner stated. “Young people are particularly at risk. Since most people who abuse prescription drugs say that they get them from family members or friends, it is imperative that we all take steps to dispose of unwanted drugs.”
“Unused prescription drugs that languish in the home are susceptible to diversion for misuse and abuse,” said DEA Special Agent in Charge John J. Martin. “You can make your home and our community safer by taking advantage of this free and anonymous service.”
Drug overdoses are now the leading cause of injury-related death in the United States, eclipsing deaths from motor vehicle crashes or firearms. The removal from homes of unwanted prescription pills that can be abused, stolen or resold is an easy way to help fight the epidemic of substance abuse and addiction.
According to the DEA, in the previous 10 take-back events, approximately 302,427 pounds or 151 tons of unused medication were collected from Northern California and Central Valley residents.
Vallejo Business Owner Arrested for Alleged Foreclosure-Rescue Fraud SchemeRead the Press Release
SACRAMENTO, Calif. — Sergio Roman Barrientos, 62, of Poway, was arrested on Wednesday in San Diego. On Thursday, April 14, a federal grand jury returned a six-count superseding indictment against Barrientos that added co-defendant Zalathiel Aguila, 42, of Fairfield, to the indictment originally brought on March 3, 2016, United States Attorney Benjamin B. Wagner announced.
According to the indictment, Barrientos, Aguila, and Omar Anabo, 53, of Vallejo, engaged in a foreclosure rescue fraud scheme that began in September 2004 and continued to February 2008. Barrientos and Aguila are charged with conspiracy to commit and the commission of wire fraud affecting a financial institution, bank fraud, and conspiracy to make and making false statements on loan applications. On January 15, 2016, Anobo pleaded guilty to conspiring to make false statements on loan applications (case number 2:16-cr-001 GEB). He is scheduled for sentencing on November 4, 2016.
According to court documents, Barrientos owned Capital Access LLC, in Vallejo, and along with Aguila and Anabo, preyed on homeowners nearing foreclosure. The defendants’ “Keep Your Home” program purported to be a temporary rescue plan whereby “qualified investors” took over the mortgages while the homeowners paid rent and worked on rebuilding their credit. It is alleged that he defendants convinced homeowners to sign over title to their homes, which were then sold to straw buyers. The straw buyers obtained loans under fraudulent pretenses by claiming on loan applications that, for example, they intended to occupy the homes as primary residences and that no part of the down payment for the purchase was borrowed. In fact, it is alleged that Capital Access provided the down payment amounts, and the straw buyers never intended to live in the properties. The defendants stripped the equity from the homes and used it to pay the operational expenses of the scheme and personal expenses. Vulnerable homeowners across California lost their homes as a result of the alleged scheme, and lenders lost an estimated $10.47 million from the fraud.
This case is the product of an investigation by the Federal Bureau of Investigation and the United States Postal Inspection Service. Assistant U.S. Attorney Matthew M. Yelovich is prosecuting the case.
If convicted, the defendants face a maximum statutory penalty of 30 years in prison and a $1 million fine for each count of wire fraud, bank fraud, and false statement, as well as for the conspiracy to commit wire and bank fraud count. If convicted of conspiracy to make false statements on loan applications, they face a maximum statutory penalty of five years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Siskiyou County Woman Pleads Guilty to Aggravated Identity TheftRead the Press Release
SACRAMENTO, Calif. — Stacy Miranda Phillips, 29, of Montague, pleaded guilty today to aggravated ID theft related to her participation in a bank fraud and identity theft scheme, United States Attorney Benjamin B. Wagner announced.
According to court documents, between September and December of 2015, Phillips worked with others in Siskiyou County to execute a scheme to steal from banks and merchants in the Siskiyou County. Phillips admitted that as part of her scheme she stole U.S. Mail and other personal property of local residents. Phillips and her associates targeted certain victims, postal customers, and mail receptacles utilized by those victims. Phillips used the checks, credit or debit cards, account numbers, names, PINs, and signatures found in the stolen mail to obtain cash and purchase items. Phillips also attempted to open a line of credit in the name of a Weed, California victim. Phillips stole mail from the following Siskiyou County Post Offices: Hornbrook, Grenada, and Montague.
This case is the product of an investigation by the United States Postal Inspection Service, the Siskiyou County Sheriff's Department, and the Yreka Police Department. Assistant United States Attorney Michelle Rodriguez is prosecuting the case.
Phillips is scheduled for sentencing on July 28, 2016, before U.S. District Judge Troy L. Nunley. Phillips faces a mandatory minimum sentence of two 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.
United States Attorney Wagner Announces His ResignationRead the Press Release
SACRAMENTO, Calif. — United States Attorney Benjamin B. Wagner has announced his resignation effective midnight on April 30, 2016. Wagner has served as the U.S. Attorney for the Eastern District of California for six and a half years, and he served as an Assistant U.S. Attorney and Supervisory AUSA for over 17 years before that.
During his tenure as United States Attorney, Wagner served for three years on the Attorney General’s Advisory Committee under Attorney General Eric Holder, and was appointed to co-chair the White Collar Crime Subcommittee of the AGAC by Attorney General Loretta Lynch. He served on numerous other AGAC subcommittees, and for five years was a co-chair of the Mortgage Fraud Working Group of the President’s Financial Fraud Enforcement Task Force.
“Serving as the United States Attorney for the Eastern District of California has been the most fulfilling and exciting experience of my professional career,” said Wagner. “I have the greatest respect for the women and men in this office who seek to do justice each day, and I am proud of all that we have been able to accomplish together.”
“Ben Wagner has served the people of the Eastern District of California with distinction for nearly a quarter of a century, spending more than 17 years as a prosecutor in the office before becoming U.S. Attorney in 2009,” said Attorney General Loretta Lynch. “Throughout his career with the Department of Justice, he has accepted a wide range of responsibilities – from coordinating his district’s anti-terrorism and hate crimes efforts to representing the department overseas as our Resident Legal Advisor in Indonesia. As U.S. Attorney, he has worked tirelessly to combat the most serious offenses, including gang violence and child exploitation. He has been a leader in the department’s outreach to Arab and Muslim Americans, helping to ensure strong relationships and defend against bigotry. He has vigorously prosecuted cases of mortgage fraud, securing record sums from banks for their role in the 2008 financial crisis. And he has provided critical insight and valuable advice as a member of my Advisory Committee, where I appointed him co-chair of the Subcommittee on White Collar Crime. I am grateful to Ben for his outstanding record of service to the Department of Justice and to the American people, and I wish him the very best in his future endeavors.”
In civil and asset forfeiture cases, the Eastern District had several years of record recoveries under Wagner’s leadership. A few of the significant civil cases handled by the office over the past six years include the following:
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The recent $5.06 billion multiparty settlement with Goldman Sachs relating to the securitization and sale of residential mortgage-backed securities. The settlement included a $2.385 billion payment to the Department of Justice as a result of efforts by attorneys in the Eastern District — the largest civil recovery in the history of the district.
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The $13 billion multiparty settlement with JPMorgan Chase announced in 2013 relating to the securitization and sale of residential mortgage-backed securities. The settlement included a $2 billion payment to the Department of Justice as a result of the Eastern District’s work.
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The settlement with Sierra Pacific Industries announced in 2012, valued at approximately $122 million, relating to its role in the huge Moonlight Fire that damaged tens of thousands of acres of U.S. Forest Service land. The settlement agreement required the transfer of 22,500 acres of wilderness to the USFS in California.
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Health care fraud and false billing settlements against Adventist Health, Catholic Health Care West, Medtronic Inc., Biotronik, and Quest Diagnostics, resulting in total recoveries of nearly $40 million between 2011 and 2015.
In criminal cases, the office expanded its prosecution of financial and health care fraud cases, firearms trafficking, human trafficking and child exploitation cases. In the area of narcotics enforcement, the office focused on the prosecution of high-level and violent offenders, while seeking more lenient sentences for lower-level and nonviolent offenders. A few of the significant criminal cases handled by the office include the following:
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The conviction of nearly 300 defendants in complex mortgage fraud cases, many involving schemes that fleeced homeowner victims of many millions of dollars. Sentences imposed ranged up to 30 years in prison.
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The convictions and lengthy sentences obtained in the Wannakuatte and Vassallo cases, involving the largest Ponzi schemes in the history of the district, in which investors lost about $150 million.
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The RICO conviction of Scott Salyer, CEO of SK Foods, and nine other officers of food product companies in a series of prosecutions involving fraud and commercial bribery in the tomato products industry.
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The conviction of approximately 70 leaders of the hyper-violent Nuestra Familia criminal organization in a series of prosecutions in both Fresno and Sacramento. Most defendants received lengthy prisons sentences.
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The extradition and prosecution of Shiraz Malik, the leader of an international drug trafficking organization, who was based in Poland.
During Wagner’s tenure, the number of Assistant U.S. Attorneys in the Eastern District increased by over 12 percent. He established a National Security Unit within the office, created a Civil Rights/Human Trafficking Working Group, expanded the White Collar Unit in the Fresno Division, and opened a new branch office in Bakersfield. He also conducted extensive outreach to underserved populations in the district, including the Muslim, Sikh, Southeast Asian, and LGBT communities.
As of May 1, 2016, Phillip A. Talbert will assume leadership of the office as Acting U.S. Attorney. Talbert, who is currently the First Assistant U.S. Attorney, has had a distinguished career in more than 13 years in the office. He previously served as Appellate Chief and as a prosecutor in the Narcotics and Violent Crime Unit, and served in the Department of Justice’s Office of Professional Responsibility before coming to the Eastern District of California. Before joining the Department of Justice, he was in private practice. He is a graduate of Harvard University and the UCLA School of Law.
As a supervisor and line prosecutor in the office before becoming U.S. Attorney, Wagner worked in all three units of the criminal division and prosecuted a wide range of cases, including investment fraud, tax evasion, violent crime, public corruption, money laundering, domestic terrorism, and hate crimes. He tried 19 cases to verdict and argued numerous appeals in the Ninth Circuit Court of Appeals. At various times he served as the district antiterrorism coordinator, the hate crimes and civil rights coordinator, and the Violence Against Women Act coordinator. He was awarded a national Director’s Award for Superior Performance by an AUSA three times, and was also presented with the national IRS Criminal Investigation Chief’s Award, and with a Meritorious Honor Award by the State Department. In 2005-06, he was stationed in Jakarta as the first Department of Justice Resident Legal Advisor in Indonesia.
Some of the notable cases which Wagner handled as an Assistant U.S. Attorney include the prosecution of Blue Shield of California in an audit obstruction case; the prosecution of reproductive health care clinic serial arsonists Rachelle Shannon and Richard Andrews; the prosecution of the leaders of Anderson Ark & Associates, an international money laundering and tax evasion organization; the prosecution of 10 defendants including doctors, a CPA and an attorney, in three offshore tax evasion scheme cases; the prosecution of 17 defendants, including a CPA and an attorney, in seven investment fraud cases; the prosecution of two corrupt State Department employees and several others in a scheme to obtain visas through bribes; the hate crime prosecution of the Williams brothers, who torched three synagogues in Sacramento; the public corruption prosecution of Monte McFall and various officials from San Joaquin County, including the elected sheriff; the prosecution of five defendants, including three attorneys, in an asylum application fraud scheme; and the prosecution of two cross-burning cases.
After his resignation, Wagner plans to seek employment at a law firm in the Northern California area.
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