Eastern District of California
Press releases recorded for this federal judicial district.
Central Valley Defendants Sentenced to Prison for $33 Million Tax Refund SchemeRead the Press Release
FRESNO, Calif. — United States District Judge Anthony W. Ishii sentenced four defendants today after being found guilty in a November 2015 trial for a tax refund scheme that claimed over $33 million in refunds, United States Attorney Benjamin B. Wagner announced.
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Gaylene Lynnette Bolanos, 58, of Fresno, was sentenced to 10 years in prison and ordered to pay $429,300 in restitution;
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Leroy Donovan Combs, 74 of Fresno, was sentenced to three years and nine months in prison;
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Charles Wayne Uptergrove, 57 of Madera County; was sentenced to three years and three months in prison; and
- Ladonna Lee Moon, 55, of Texas, was sentenced to one year and nine months in prison. All four defendants were convicted of submitting false claims against the IRS and conspiracy.
Prior to trial, three co-defendants pleaded guilty to submitting false claims to the IRS and were sentenced. On February 29, 2016, Judge Ishii sentenced Louis Calles, 67, of Fresno to 16 months in prison and James Schwartz, 61, of Fresno, to one year and a day of in prison. On January 11, 2016, Oswald Georgner, was sentenced to 18 months in prison.
According to court documents and testimony at trial, between August 2008 and October 16, 2008, Bolanos and Georgner, with the assistance of their co-defendants submitted false tax returns utilizing IRS Form 1099-OID in an attempt to eliminate their debts and receive sizable tax refunds. Specifically, the tax returns were fraudulent because the defendants listed their debts, bills, and other non-income items as interest income. The defendants then claimed that almost all of that interest income had been withheld and paid to the IRS, even though none of the purported interest income was ever withheld. Based on the reported withholdings, the defendants claimed they were owed millions of dollars in refunds by the IRS.
In all, the defendants submitted false tax returns to the IRS seeking more than $33 million in fraudulent tax refunds, and in response the IRS issued approximately $400,000 in unearned refunds
U.S. Attorney Wagner stated: “These defendants submitted bogus tax forms to the IRS claiming enormous unearned refunds. Through their fraud, they sought to enrich themselves and victimize American taxpayers. The U.S. Attorney’s Office will continue to work with IRS Criminal Investigation to enforce our nation’s tax laws and stop fraud and abuse.”
“With more than $33 million in federal tax refunds claimed, this was not your typical false claims case against the government — it exceeded most salaries of hard-working, tax-abiding citizens,” said Special Agent in Charge Michael T. Batdorf, IRS Criminal Investigation. “Plain and simple, this was fraud. Today‘s sentencings reflect the seriousness of these crimes, promotes respect for the law and provides just punishment.”
This case was the product of an investigation by the Internal Revenue Service‑Criminal Investigation. Assistant United States Attorneys Grant B. Rabenn and Henry Z. Carbajal III prosecuted the case with assistance from Trial Attorney Karen J. Sharp, of the Department of Justice, Antitrust Division.
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Orangevale Man Arrested Today for Child Pornography ChargesRead the Press Release
SACRAMENTO, Calif. — An Orangevale resident was arrested today after a federal grand jury returned a four-count indictment on Thursday charging him with distribution, receipt and possession of child pornography and obstruction of justice, United States Attorney Benjamin B. Wagner announced. Dennis Boyle, 52, was arraigned today and pleaded not guilty. He is in custody, and a detention hearing has been scheduled for March 10, 2016.
According to court documents, law enforcement agents identified a user on a messenger service who was offering videos of child pornography in an online chat room. The investigation led to the residence of Boyle. Between August and October of 2015, Boyle allegedly distributed and received depictions of minors engaged in sexually explicit conduct. Boyle is alleged to have obstructed justice when he attempted to persuade a friend to delete electronic evidence stored on a laptop computer and on remote servers.
This case is the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Special Assistant United States Attorney Josh F. Sigal is prosecuting the case.
If convicted, Boyle faces a maximum statutory penalty of 20 years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Nevada City Man Pleads Guilty to Possession with Intent to Distribute MethamphetamineRead the Press Release
SACRAMENTO, Calif. — Donald Henry Dugan, 55, of Nevada City, pleaded guilty today to possession with intent to distribute at least 50 grams of a mixture or substance containing a detectable amount of methamphetamine, United States Attorney Benjamin B. Wagner announced.
According to court documents, on July 15, 2014, task force officers served a state search warrant of Dugan’s residence that resulted in the seizure of over a pound of methamphetamine, along with various items associated with controlled substance distribution such as baggies, a funnel, and a digital scale. In addition, a loaded handgun and ammunition were found in a backpack underneath Dugan’s desk. Dugan was previously convicted of a state felony in 1997 for possession of a controlled substance while carrying a loaded firearm.
This case is the product of an investigation by the Drug Enforcement Administration and the Nevada County Sheriff’s Narcotics Task Force. Assistant United States Attorney Matthew M. Yelovich is prosecuting the case.
Dugan remains in custody. He is scheduled to be sentenced by U.S. District Judge Garland E. Burrell Jr. on June 17, 2016. Dugan faces a maximum statutory penalty of 40 years in prison, a mandatory minimum of five years in prison, and a $5 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.
Identity Thief Sentenced to 9 Years in PrisonRead the Press Release
SACRAMENTO, Calif. — Gurpinder Sandhu, 47, of Hercules, was sentenced today by United States District Judge Garland E. Burrell, Jr. to nine years in prison for possession of device-making equipment and aggravated identity theft, United States Attorney Benjamin B. Wagner announced.
According to court documents, in September 2014 law enforcement began investigating reports of numerous vehicles fraudulently purchased with stolen identities from car dealerships throughout the Northern and Eastern Districts of California. The investigation led to Sandhu’s residence, where law enforcement located three of the fraudulently obtained vehicles: a 2014 Nissan Rogue, a 2014 Dodge Challenger, and a Harley Davidson motorcycle.
Inside Sandhu’s residence, law enforcement agents found many counterfeit items, including credit cards and California driver licenses. Law enforcement agents also found device-making equipment to manufacture these counterfeit items. This equipment included an embossing machine, cameras, printers, scanners, materials and chemicals used to produce identification cards, state seals, and a blue backdrop on the wall to imitate a California Department of Motor Vehicles ID photo background. Agents also found documents containing the names of real people, such as rental agreements, Comcast bills and sales receipts.
Based on the fraudulent documents found in the apartment, law enforcement identified at least 50 victims of identity theft. Sandhu and a co-defendant, used these identities to fraudulently purchase vehicles from car dealerships and retail goods from commercial stores such as Macy’s.
Sandhu succeeded in getting at least seven vehicles in this manner. In addition to the three vehicles named above, Sandhu fraudulently obtained a 2013 Yamaha motorcycle, a 2010 Chevrolet Corvette, a 2013 Dodge Challenger and a 2013 Dodge Charger.
This case was the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the California Highway Patrol. Special Assistant United States Attorney Josh F. Sigal prosecuted the case.
Sandhu was also ordered to pay $45,115 in restitution. He has remained in custody since his arrest on March 6, 2015. Charges remain pending against co-defendant Simone Aguilar, who is next scheduled to appear in court on April 8, 2016. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Immigrant Smuggler Indicted for Kidnapping Persons Seeking to Enter the United States, and Defrauding Their Relatives in the United StatesRead the Press Release
FRESNO, Calif. — A federal grand jury returned a 10-count indictment today against Martin Carranza-Sanchez, 45, resident of Mexico, charging him with kidnapping Mexican citizens seeking assistance in entering the United States without documentation, and with a scheme to defraud the families of persons seeking to enter the country, United States Attorney Benjamin B. Wagner announced. Carranza-Sanchez is charged with conspiracy to commit hostage taking, conspiracy to commit wire fraud, wire fraud, interstate communications to obtain ransom or reward, and carrying a firearm during a crime of violence. He was arrested at the border on January 21, 2016, and currently is in federal custody in Fresno, based on a complaint previously issued in this case.
The indictment alleges that Carranza-Sanchez and others conspired to obtain payment from people residing in the United States through various means, including by taking hostage their undocumented immigrant family members and friends who were seeking entry into the United States, and by falsely representing to the U.S. residents that their relatives had been smuggled into the United States. In five instances between December 2010 and November 2015, involving six victims, the indictment alleges that Carranza-Sanchez held the undocumented immigrants hostage in Mexico, threatened to harm them, and, on occasion, did harm them. He allegedly told the U.S. residents that he would harm or kill the immigrants if the U.S. residents did not pay him immediately. Carranza-Sanchez also is charged with fraud for falsely representing to U.S. residents that he would release the undocumented immigrants and deliver them to the United States upon receipt of payment by the U.S. residents.
“Kidnapping and fraud are serious federal crimes, regardless of the legal status of the victims in this country,” said U.S. Attorney Wagner. “The abuse and exploitation of undocumented immigrants is unacceptable, and we will continue to investigate and prosecute those who engage in such criminal conduct.”
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 Angela L. Scott is prosecuting the case. The investigation is ongoing.
Carranza-Sanchez is currently detained in the Eastern District of California. If convicted, Carranza-Sanchez faces a maximum statutory penalty of life in prison. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Stockton Bank Robber Sentenced to over 15 Years in PrisonRead the Press Release
SACRAMENTO, Calif. — Phillip Dale Selfa, 63, of Stockton, was sentenced today to 15 years and eight months in prison for six counts of bank robbery, United States Attorney Benjamin B. Wagner announced.
On July 7, 2015, Selfa pleaded guilty to robbing the following banks:
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December 27, 2010, Bank of Stockton in Pine Grove for $2,000;
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January 13, 2011, Bank of the West in Lockeford for $4,000;
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February, 25, 2011, Farmers and Merchants Bank in Linden for $351;
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March 30, 2011, Westamerica Bank in Turlock, CA for $4,500;
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April 29, 2011, Bank of the West in Ripon for $3,050, and
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May 5, 2011, Bank of the West in Lodi for $4,037.
In each of his six robberies, Selfa carried boxes, bags, and satchels into the financial institutions. He also displayed a purported detonator during his robberies and claimed to bank personnel that he could set off explosives that were supposedly in his boxes and bags that he left in the banks as he exited. After each robbery, each bank was closed and streets neighboring the banks were barricaded for bomb squad personnel. The bombs and detonators were each determined to be fake. During his robberies, Selfa also wore various disguises and head coverings.
This case was the product of an investigation by the FBI with the assistance from the Stockton Police Department, the Modesto Police Department, the Amador County Sheriff’s Office, the San Joaquin County Sheriff’s Office, and the Stanislaus County Sheriff’s Office. Assistant U.S. Attorneys William Wong and Michelle Rodriguez prosecuted the case.
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Former Firefighter Sentenced to Five Years in Prison for Wildland Arson Fire on Federal LandRead the Press Release
SACRAMENTO, Calif. — Benjamin Cunha, 33, of Placerville, was sentenced today to five years in prison for arson, United States Attorney Benjamin B. Wagner announced. In addition, United States District Judge John A. Mendez ordered Cunha to pay $246,862 in restitution to Cal Fire.
According to court documents, Cunha, a seasonal CAL FIRE firefighter from 2001 to 2003, admitted to setting at least 30 wildland fires during the summers of 2006 and 2007. Two of these fires burned onto federal land. Cunha indicated that his motivation for setting the fires was to overcome boredom, to earn overtime pay for fighting the fires, and to impress his peers.
“As he admitted in his plea agreement, this defendant set a multitude of fires with a callous disregard for the danger to life and property that he was inflicting,” said U.S. Attorney Wagner. “Today’s sentence is a just result that takes a serial arsonist off the streets.”
“Benjamin Cunha set over 30 fires in El Dorado and Amador Counties. ATF worked with our local partners and utilized several resources to perfect an investigation for federal prosecution,” said Special Agent in Charge Jill A. Snyder. “Cunha had no consideration for CAL FIRE fighters’ safety when he set the fires, placing them in grave danger during the fire suppression efforts.”
On October 6, 2015, Cunha pleaded guilty to one count of arson for the July 6, 2007, Mine Fire, a vegetation fire that burned approximately 80 acres including federally owned land. Cunha admitted to using a distinctive time-delay incendiary device, which he had also used to start many of his other fires.
This case was the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, with assistance from CAL FIRE. Assistant United States Attorneys William S. Wong and Audrey B. Hemesath prosecuted the case.
Loan Officer Pleads Guilty to Concealing Mortgage Fraud ConspiracyRead the Press Release
SACRAMENTO, Calif. — Christian Parada-Renteria, 40, of Woodland, pleaded guilty today to one count of concealing a widespread conspiracy to commit wire fraud and one count of concealing a mail fraud transaction in connection with a mortgage fraud scheme, United States Attorney Benjamin B. Wagner announced.
According to court documents, Parada-Renteria was a loan officer at Delta Homes and Lending Inc., a Sacramento-based real estate and mortgage lending company. Delta Homes opened one office in 2003 and eventually had five offices in Sacramento and Woodland.
Between October 2004 and May 2007, Delta Homes’ founder and president Moctezuma Tovar, 46, and other real estate agents, loan officers, and loan processors engaged in a mortgage fraud conspiracy. Parada-Renteria, a loan officer, assisted the conspirators with loan applications that contained lies, including false statements regarding a borrower’s income, employment, rent history, credit rating, etc. Parada-Renteria concealed the scheme by taking steps to make sure the truthfulness of the loan applications and supporting documentation provided by Delta Homes was not questioned by the lenders.
According to the plea agreement, in August or September 2006, Parada-Renteria handled the loan file for the purchase of a Citrus Heights property. The borrower did not have sufficient funds required by the lender to fund the loan. Parada-Renteria concealed the fraudulent loan of $6,000 by a co-conspirator to the borrower that would inflate the borrower’s bank account balance so that the lender would fund the loan. Once the loan had closed, Parada-Renteria took the repayment from the borrower and reimbursed the co-conspirator from his own bank account.
The aggregate sales price of the homes involved in the conspiracy was in excess of $10 million, and as a result of the conspiracy, mortgage lenders and others suffered losses of at least $4 million.
Parada-Renteria is scheduled to be sentenced by Senior U.S. District Judge William B. Shubb on June 6, 2016, along with co-defendants, Tovar and Manuel Herrera, 36, both of Sacramento, Sandra Hermosillo, 53, of Woodland, and Jun Michael Dirain, 43, of Antelope, who have already pleaded guilty in this case. Parada-Renteria faces a maximum statutory penalty of six years in prison and a $500,000 fine. Each of the other defendants faces a maximum statutory penalty of 30 years in prison and a $1 million 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.
Co-defendants Jaime Mayorga, 36, and Ruben Rodriguez, 38, both of Sacramento, have a trial date of April 5, 2016. The charges against Mayorga and Rodriguez are only allegations; they are presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorneys Jean M. Hobler and Brian A. Fogerty are prosecuting the case.
Central Valley Antidrug Trafficking Program Recognizes District ProsecutorRead the Press Release
SACRAMENTO, Calif. — On Thursday, February 18, 2016, Assistant U.S. Attorney Karen A. Escobar received the High Intensity Drug Trafficking Area’s national Outstanding Prosecutor Award today for her leadership in the prosecution of rural trespass marijuana growers for their environmental crimes, exposing violators to criminal and civil penalties, and for bringing public attention to the environmental destruction caused by large-scale marijuana growers, United States Attorney Benjamin B. Wagner announced.
The annual HIDTA Awards Banquet, which was held in the Wardman Park Marriott in Washington D.C., recognizes outstanding investigative achievements across the country. The Outstanding Prosecutor Award is presented to the prosecutor whose work is particularly notable in advancing the mission of the HIDTA program.
The HIDTA program, created by Congress with the Anti-Drug Abuse Act of 1988, provides assistance to Federal, state, local, and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States. There are currently 28 HIDTA’s, which include approximately 17.2 percent of all counties in the United States and a little over 60 percent of the U.S. population. HIDTA-designated counties are located in 48 states, as well as in Puerto Rico, the U.S. Virgin Islands, and the District of Columbia. The Central Valley HIDTA covers 12 counties in the Eastern District of California, and funds several federal/state/local task forces in the region.
William Ruzzamenti, Executive Director of the Central Valley California HIDTA stated: “The National Prosecutor of the Year is a very significant and prestigious award. It recognizes that Ms. Escobar is not only one of this country's most outstanding prosecutors, but also as a special person within her community. Ms. Escobar blends a tremendous legal intellect with old fashion common sense in an extraordinary way to assure criminals are held accountable.”
U.S. Attorney Wagner echoed those sentiments, saying, “Karen Escobar has long been one of the most productive federal narcotics prosecutors in this district. She has been a particular leader in combatting the environmental devastation caused by marijuana cultivators in National Forests and National Parks. I am very pleased that her work is now being recognized on a national level. This award is well-deserved.”
Karen Escobar has been an Assistant U.S. Attorney in Fresno for more than 26 years, specializing in the prosecution of drug trafficking organizations plaguing California’s Central Valley. She has prosecuted more than 2,000 federal cases with a conviction rate of 99 percent. She pioneered the pursuit of environmental crime charges against illegal marijuana growers whose toxic cultivation practices endanger wildlife, the environment, and public health; holding them responsible for their actions and bringing much-needed public attention to the issue. She contributed to the development of national sentencing guidelines for environmental harm caused by illegal marijuana grows.
Stockton Man Sentenced for Trafficking Guns and MethamphetamineRead the Press Release
SACRAMENTO, Calif. — Brandon Johnson, 26, of Stockton, was sentenced today to 10 years in prison for distributing methamphetamine and selling firearms without a license, United States Attorney Benjamin B. Wagner announced.
According to court documents, special agents conducted an extensive investigation into Johnson’s gun and drug dealing activities. From August 2013, to October 2013, Johnson met repeatedly with an undercover agent. During the course of four separate meetings, Johnson sold the undercover agent more than half a pound of methamphetamine and although Johnson did not have a license to sell firearms, he sold the undercover agent five firearms, including four pistols and one AK-type DC Industries 7.62 x39 caliber rifle.
This case was the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Christiaan Highsmith prosecuted the case.
Former Chief Operating Officer of Davis Bio-Pesticide Company Indicted for Securities FraudRead the Press Release
SACRAMENTO, Calif. — Hector Absi, 47, of Las Vegas, Nevada, was arrested today by FBI agents at his home in Las Vegas. He is charged in a 16-count indictment, unsealed today, that was returned by a federal grand jury in Sacramento on February 11. The indictment charges Absi with conspiracy to commit mail fraud, wire fraud, and securities fraud; substantive counts of mail, wire, and securities fraud; and with other securities-related charges, United States Attorney Benjamin B. Wagner announced.
According to court documents, Absi is the former head of the sales department of Marrone Bio Innovations Inc. (MBI), a company that developed and sold “bio-based” pesticides and is headquartered in Davis, California. Absi also served as MBI’s Chief Operating Officer from January 2014 until his resignation in August 2014. MBI is a publicly traded company; its stock trades on the NASDAQ exchange under the ticker symbol “MBII.” As a publicly traded company, it is required to file quarterly and annual reports with the Securities and Exchange Commission (SEC). In its reports, MBI stated that it recorded revenue in accordance with generally accepted accounting principles (GAAP).
The indictment alleges that, in order to increase sales of MBI products, Absi sold MBI products to customers with side agreements that offered “inventory protection,” under which MBI agreed to either repurchase the product from the customer or extend the terms of payment if the customer was still in possession of the product after a specified time period. Under GAAP, revenue from sales that include such agreements cannot be recognized on the company’s books. The indictment alleges that between March 2013 and July 2014, Absi conspired with at least one other MBI employee to misrepresent to MBI’s accounting department, its external auditors, and the investing public that MBI had made sales under such terms. By concealing the practice, Absi caused MBI to report a doubling of its revenue in 2013 in comparison to 2012. Absi also allegedly conspired with others to backdate the delivery of certain shipments of MBI’s products to enhance MBI’s reported revenues for the quarter. Absi received a performance-based bonus and exercised stock options during a time when MBI’s inflated revenue figures were being reported.
“It is critical to the integrity of the securities markets that we criminally prosecute those who act to profit by deceiving those markets and the investing public who rely on the accuracy of publicly filed reports,” said U.S. Attorney Wagner. “I am pleased that we have been able to coordinate effectively with the SEC in this matter.”
“We thank the SEC for their partnership in this successful investigation. Such collaboration is essential to the success of securities fraud investigations and ultimately protecting the integrity of the securities market,” said Assistant Special Agent in Charge Manuel Alvarez of the Federal Bureau of Investigation’s Sacramento field office. “Securities fraud is something most associate with Wall Street, not our region; however, our region is home to many successful, publicly traded companies. Unfortunately, this success also attracts greed-based crime and we will work with our partners to root out those who seek to deceive investors by manipulating revenue data.”
“We allege that Marrone Bio misled investors to make itself look like a fast-growing new public company,” said Jina L. Choi, Director of the SEC’s San Francisco Regional Office. “Public companies and their officers should know better that taking shortcuts to recognize revenue in the near term is harmful to investors and can be damaging to a company’s long-term success.”
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorney Todd A. Pickles is prosecuting the case.
The Securities and Exchange Commission has also conducted an investigation into the conduct of Hector Absi while he was an officer of MBI. Today it filed a civil complaint against Absi in the U.S. District Court for the Eastern District of California, alleging that Absi violated the Securities Act of 1933, and the Securities Exchange Act of 1934, and federal rules issued under the Exchange Act, and seeking an injunction against Absi, disgorgement of wrongfully obtained benefits, and civil penalties.
If convicted, Absi faces a maximum statutory penalty of 25 years in prison and a $5 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Former Chief Operating Officer of Davis Bio-Pesticide Company Indicted for Securities FraudRead the Press Release
SEC Files Separate Civil Complaint
Hector Absi, 47, of Las Vegas, Nevada, was arrested today by FBI agents at his home in Las Vegas. He is charged in a 16-count indictment, unsealed today, that was returned by a federal grand jury in Sacramento, California, on February 11. The indictment charges Absi with conspiracy to commit mail fraud, wire fraud and securities fraud; substantive counts of mail, wire and securities fraud; and with other securities-related charges, U.S. Attorney Benjamin B. Wagner for the Eastern District of California announced.
According to court documents, Absi is the former head of the sales department of Marrone Bio Innovations Inc. (MBI), a company that developed and sold “bio-based” pesticides and is headquartered in Davis, California. Absi also served as MBI’s Chief Operating Officer from January 2014 until his resignation in August 2014. MBI is a publicly traded company; its stock trades on the NASDAQ exchange under the ticker symbol “MBII.” As a publicly traded company, it is required to file quarterly and annual reports with the Securities and Exchange Commission (SEC). In its reports, MBI stated that it recorded revenue in accordance with generally accepted accounting principles (GAAP).
The indictment alleges that, in order to increase sales of MBI products, Absi sold MBI products to customers with side agreements that offered “inventory protection,” under which MBI agreed to either repurchase the product from the customer or extend the terms of payment if the customer was still in possession of the product after a specified time period. Under GAAP, revenue from sales that include such agreements cannot be recognized on the company’s books. The indictment alleges that between March 2013 and July 2014, Absi conspired with at least one other MBI employee to misrepresent to MBI’s accounting department, its external auditors and the investing public that MBI had made sales under such terms. By concealing the practice, Absi caused MBI to report a doubling of its revenue in 2013 in comparison to 2012. Absi also allegedly conspired with others to backdate the delivery of certain shipments of MBI’s products to enhance MBI’s reported revenues for the quarter. Absi received a performance-based bonus and exercised stock options during a time when MBI’s inflated revenue figures were being reported.
“It is critical to the integrity of the securities markets that we criminally prosecute those who act to profit by deceiving those markets and the investing public who rely on the accuracy of publicly filed reports,” said U.S. Attorney Wagner. “I am pleased that we have been able to coordinate effectively with the SEC in this matter.”
“We thank the SEC for their partnership in this successful investigation,” said Assistant Special Agent in Charge Manuel Alvarez of the FBI’s Sacramento Field Office. “Such collaboration is essential to the success of securities fraud investigations and ultimately protecting the integrity of the securities market. Securities fraud is something most associate with Wall Street, not our region; however, our region is home to many successful, publicly traded companies. Unfortunately, this success also attracts greed-based crime and we will work with our partners to root out those who seek to deceive investors by manipulating revenue data.”
“We allege that Marrone Bio misled investors to make itself look like a fast-growing new public company,” said Director Jina L. Choi for the SEC’s San Francisco Regional Office. “Public companies and their officers should know better that taking shortcuts to recognize revenue in the near term is harmful to investors and can be damaging to a company’s long-term success.”
This case is the product of an investigation by the FBI. Assistant U.S. Attorney Todd A. Pickles is prosecuting the case.
SEC has also conducted an investigation into the conduct of Hector Absi while he was an officer of MBI. Today it filed a civil complaint against Absi in the U.S. District Court for the Eastern District of California, alleging that Absi violated the Securities Act of 1933 and the Securities Exchange Act of 1934 and federal rules issued under the Exchange Act and seeking an injunction against Absi, disgorgement of wrongfully obtained benefits, and civil penalties.
If convicted, Absi faces a maximum statutory penalty of 25 years in prison and a $5 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Veterans Affairs Official Sentenced for Accepting Gifts in Relation to His Job DutiesRead the Press Release
SACRAMENTO, Calif. —Anthony Castaneda, 45, of Oakdale in Stanislaus County, was sentenced today by Judge Morrison C. England Jr. to serve five months of house arrest and two years of probation for receipt of a gratuity by a public official, United States Attorney Benjamin B. Wagner announced.
According to court documents, while working as a contracting official at the Department of Veterans Affairs, Castaneda was in a position to influence the award of construction contracts at VA facilities, including the VA hospital at the former Mather Field in Sacramento. In 2010, Castaneda received from a construction contractor a prepaid vacation package at a theme park worth approximately $2,250. Castaneda and his family traveled to the theme park for five days in October 2010. At the time that he accepted that gift, Castaneda was in a position to influence the award of construction contracts by making recommendations about which contractors should be given VA business. Court records also show that Castaneda received a second vacation package from the same contractor, worth approximately $1,440, in 2008.
In addition to his period of house arrest, Castaneda was ordered to forfeit the value of the 2010 vacation package and to pay a $2,000 fine.
The contractor in question has been charged separately in federal court in San Jose: United States v. Herrera, case number 5:14-cr-219. He pleaded guilty and on December 16, 2015, was sentenced to three years’ probation.
This case was the product of an investigation by the Veterans Affairs Office of Inspector General and the Federal Bureau of Investigation. Assistant United States Attorney Matthew G. Morris prosecuted the case.
Two Indicted in Fresno for Drugs and Firearms OffensesRead the Press Release
FRESNO, Calif. — A federal grand jury returned two indictments today charging two individuals with drug trafficking offenses and one with an additional firearms charge, United States Attorney Benjamin B. Wagner announced.
In the first indictment, Michael Paul Lopez, 32, of Fresno, was charged with with being a felon in possession of a firearm and ammunition and with possession of a controlled substance with the intent to distribute. According to court documents, on January 12, 2016, Lopez, a previously convicted felon, was in possession of a Raven Arms MP .25-caliber handgun that was loaded with .25-caliber ammunition. He was also in possession of methamphetamine.
This case is the product of an investigation by the Federal Bureau of Investigation and the Fresno Police Department. It was brought as part of Project Safe Neighborhoods (PSN), an initiative that brings together federal, state and local law enforcement to combat gun and gang crime. At the core of PSN is increased federal prosecution to incapacitate chronic violent offenders as well as to communicate a credible deterrent threat to potential gun offenders.
In the second indictment, the federal grand jury returned a two-count indictment against Ivan Vizcarra, 28, of Los Angeles, charging him with federal drug trafficking offenses. According to court documents, on November 19, 2015, Vizcarra was arrested by the Fresno Police Department after he attempted to deliver 12 pounds of methamphetamine.
This case is the product of an investigation by the Drug Enforcement Administration and the Fresno Police Department. Assistant United States Attorney Daniel J. Griffin is prosecuting both cases.
If convicted, both defendants face a maximum statutory penalty of 20 years in prison and a $1 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Final Two Defendants Sentenced to Federal Prison in Stockton Gun and Drug Trafficking CaseRead the Press Release
SACRAMENTO, Calif. — Melissa Torres, 29, and Sally Evans, 28, both of Stockton, were sentenced today by United States District Judge Morrison C. England Jr. for their involvement in the distribution of methamphetamine and firearms from a residence in Stockton, United States Attorney Benjamin B. Wagner announced.
Torres was sentenced to nine years in prison for distribution of methamphetamine and dealing firearms without a license. Evans was sentenced to seven years and three months in prison for distribution of methamphetamine.
“Criminals who traffic illegal drugs often possess firearms as a part of their unlawful enterprise. Targeting armed narcotic traffickers remains a top priority for ATF,” said Special Agent in Charge Jill A. Snyder.
According to court documents, in January, February, and March of 2014, Melissa Torres met with an undercover agent on eight separate occasions. During each of those meetings, Torres either sold or assisted in the sale of methamphetamine or firearms to the undercover agent. In total, Torres was involved in selling more than a half pound of methamphetamine and eight firearms to the undercover agent. The firearms included four pistols, a handgun, two rifles, and a shotgun. During that same time frame, Evans was involved in the sale of more than one pound of methamphetamine to the undercover agent. Co-defendant Jorge Magana supplied much of the methamphetamine sold by Torres and Evans. Co-defendants Donovan Torres and Johnny Torres supplied several of the firearms sold by Melissa Torres. Donovan Torres and Johnny Torres also sold the undercover ATF agent several firearms.
Melissa Torres and Sally Evans are the final defendants sentenced in this case. Three co-defendants have already been sentenced in this case – Jorge Magana, Johnny Torres, and Donovan Torres. On October 8, 2015, Jorge Magana was sentenced to eight years and one month in prison. On March 26, 2015, Johnny Torres was sentenced to two years in prison. On April 9, 2015, Donovan Torres was sentenced to 10 months in prison.
This case was the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Stockton Police Department. Assistant United States Attorney Christiaan Highsmith prosecuted the case.
Elk Grove Man Arrested, Charged for Adult Adoption Scheme to Defraud Undocumented ImmigrantsRead the Press Release
SACRAMENTO, Calif. — Helaman Hansen, 63, of Elk Grove, was arrested today after a federal grand jury returned a 13-count indictment charging him with conspiracy to commit mail fraud and wire fraud, 11 counts of mail fraud, and one count of wire fraud for operating a fraudulent adult-adoption program that targeted undocumented aliens, United States Attorney Benjamin B. Wagner announced.
According to court documents, between October 2012 and January 2016, Hansen and others used various entities such as Americans Helping America (AHA) to sell members of immigrant communities memberships in what he called a “Migration Program.” A central feature of the program was the fraudulent claim that immigrant adults could achieve U.S. citizenship by being legally adopted by an American citizen and completing a list of additional tasks. At first, memberships were sold for annual fees of $150, but that fee gradually grew and eventually was as high as $10,000.
According to the indictment, although some victims completed the adoption stage of the “Migration Program,” not one person obtained citizenship. As early as October 2012, Hansen had been informed by the U.S. Citizenship and Immigration Services that aliens adopted after their sixteenth birthdays could not obtain citizenship in the manner Hansen was promoting. Despite that notification, Hansen and his co-conspirators induced approximately 500 victims to pay more than $500,000 to join the fraudulent program.
“The indictment returned today alleges a particularly predatory and manipulative type of fraud that takes advantage of the hopes and dreams of undocumented immigrants to extract fees based on false promises,” stated U.S. Attorney Wagner. “The adoption of adult aliens is not a legitimate path to U.S. citizenship. While the charges against this defendant are only allegations at this point, no one should pay fees to anyone making false promises of citizenship through adult adoption.”
“This alleged crime victimized vulnerable, would-be immigrants seeking a legitimate pathway to U.S. citizenship. The victims trusted an individual who misrepresented the success of adult adoption in such matters,” said Special Agent in Charge Monica M. Miller of the Federal Bureau of Investigation’s Sacramento field office. “The Federal Bureau of Investigation is committed to work with its law enforcement partners to investigate and disrupt fraudulent schemes that exploit vulnerable people for financial gain.”
“It is very unfortunate that some in our communities would choose to misrepresent the American immigration system to deceive and hurt those who are trying only to make a better life for themselves and their families,” said Ryan L. Spradlin, special agent in charge for HSI San Francisco. “It is our entrusted duty to hold these criminals accountable for their actions – and so we shall.”
This case is the product of an investigation by the Federal Bureau of Investigation and the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant U.S. Attorney André M. Espinosa is prosecuting the case.
If convicted, Hansen 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. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Victims are encouraged to call the FBI at 916-977-2479.
California Man Arrested, Charged for Adult Adoption Scheme to Defraud Undocumented ImmigrantsRead the Press Release
Americans Helping America Chamber of Commerce Promised Citizenship to Members of Its “Migration Program” for a Price
Helaman Hansen, 63, of Elk Grove, California, was arrested today after a federal grand jury returned a 13-count indictment charging him with conspiracy to commit mail fraud and wire fraud, 11 counts of mail fraud and one count of wire fraud for operating a fraudulent adult-adoption program that targeted undocumented aliens, U.S. Attorney Benjamin B. Wagner for the Eastern District of California announced.
According to court documents, between October 2012 and January 2016, Hansen and others used various entities such as Americans Helping America (AHA) to sell members of immigrant communities memberships in what he called a “Migration Program.” A central feature of the program was the fraudulent claim that immigrant adults could achieve U.S. citizenship by being legally adopted by an American citizen and completing a list of additional tasks. At first, memberships were sold for annual fees of $150, but that fee gradually grew and eventually was as high as $10,000.
“The indictment returned today alleges a particularly predatory and manipulative type of fraud that takes advantage of the hopes and dreams of undocumented immigrants to extract fees based on false promises,” said U.S. Attorney Wagner. “The adoption of adult aliens is not a legitimate path to U.S. citizenship. While the charges against this defendant are only allegations at this point, no one should pay fees to anyone making false promises of citizenship through adult adoption.”
“It is very unfortunate that some in our communities would choose to misrepresent the American immigration system to deceive and hurt those who are trying only to make a better life for themselves and their families,” said Special Agent in Charge Ryan L. Spradlin for Homeland Security Investigation’s (HSI) San Francisco Field Office. “It is our entrusted duty to hold these criminals accountable for their actions – and so we shall.”
According to the indictment, although some victims completed the adoption stage of the “Migration Program,” not one person obtained citizenship. As early as October 2012, Hansen had been informed by the U.S. Citizenship and Immigration Services that aliens adopted after their sixteenth birthdays could not obtain citizenship in the manner Hansen was promoting. Despite that notification, Hansen and his co-conspirators induced approximately 500 victims to pay more than $500,000 to join the fraudulent program.
This case is the product of an investigation by the Federal Bureau of Investigation and the U.S. Immigration and Customs Enforcement’s (ICE) HSI. Assistant U.S. Attorney André M. Espinosa is prosecuting the case.
If convicted, Hansen 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. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Victims are encouraged to call the FBI at 916-977-2479.
Stockton Man Sentenced for Fraud in Auto Engine ScamRead the Press Release
SACRAMENTO, Calif. —John Steven Keplinger, 56, of Stockton, was sentenced today by United States District Judge Kimberly J. Mueller to two years and three months in prison and a $100,000 fine for mail fraud in connection with an auto engine scam, United States Attorney Benjamin B. Wagner announced.
On September 23, 2015, Keplinger pleaded guilty. The total estimated loss from the fraud is up to $470,000. A hearing for the final determination of restitution for the fraud victims is scheduled for March 30, 2016.
According to court documents, from 2010 to 2014, Keplinger carried out a fraud scheme by purporting to sell used auto engines from Japan, but failing to provide customers what he promised. Over 300 paying customers across 44 states and the District of Columbia were defrauded. Keplinger used three companies and websites to carry out the fraud scheme: Rising Sun Engines Inc. (www.risingsunengines.com), Shop 4 Engines LP (shop‑4‑engines.com), and Your Parts Manager (yourpartsmanager.com). Most of the time, Keplinger’s customers paid by check sent via UPS. After Keplinger accepted payment, he either sent no engine at all or sent the customer a defective engine obtained in the United States, often from a junkyard. United States Customs and Border Protection records indicate that Keplinger had stopped importing engines in 2007.
In August 2013, Keplinger faced legal action from the San Joaquin County District Attorney’s Office and he was ordered to stop conducting an auto parts sales business of any kind and to cease using any website to conduct such a business. Instead, Keplinger continued the fraud scheme well into 2014.
“John Keplinger defrauded hundreds of financially challenged individuals who struggled to afford engines to keep their cars running. He leveraged the Internet to victimize people across the United States,” said Assistant Special Agent in Charge Manuel Alvarez of the Federal Bureau of Investigation’s Sacramento field office. “We thank the U.S. Postal Inspection Service for their partnership in this investigation and both the San Joaquin County District Attorney’s Office and California Bureau of Automotive Repair for their assistance with the investigation.”
San Francisco Division Inspector in Charge Rafael Nunez of the U.S. Postal Inspection Service stated: “Postal Inspectors work closely with the U.S. Attorney’s Office and our partners in law enforcement to arrest and prosecute those individuals responsible for fraud schemes committed against the public.
This case was the product of an investigation by the Federal Bureau of Investigation and the United States Postal Inspection Service, with substantial assistance from the San Joaquin County District Attorney’s Office and the California Bureau of Automotive Repair. Assistant United States Attorney Christopher S. Hales prosecuted the case.
Former Sacramento Man Indicted for Selling Firearms and NarcoticsRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a 38-count indictment today against David Guevara-Pimentel, 22, of Fort Drum, New York, formerly of Sacramento, charging him with dealing and manufacturing firearms without a license, illegal possession of a machine gun, possession of an unregistered short-barreled shotgun, possession of a firearm with an obliterated serial number, and distribution of methamphetamine, cocaine, and heroin, United States Attorney Benjamin B. Wagner announced. Guevara-Pimentel was arrested on January 22, 2016, in New York, where he was stationed as a U.S. Army Private. U.S. Army Criminal Investigation Command made the arrest.
According to court documents, on 19 separate occasions between August 11, 2014, and April 29, 2015, Guevara-Pimentel met with an undercover agent and sold him a variety of firearms, including a short-barreled shotgun, unserialized AR-15-style rifles, and handguns. On many of these occasions, Guevara-Pimentel sold the agent methamphetamine, cocaine, or heroin. Altogether, Guevara-Pimentel sold the undercover agent 49 firearms, many of which lacked a serial number or other identifying markings. On January 22, 2016, Guevara-Pimentel was found to possess a fully automatic machine gun.
This case was the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the West Sacramento Police Department, and the Woodland Police Department. Assistant United States Attorney Ross K. Naughton is prosecuting the case.
If convicted, Guevara-Pimentel faces the following possible penalties: a maximum statutory penalty of five years in prison and a $250,000 fine for the charges of dealing firearms without a license and possession of a firearm with an obliterated serial number, 10 years in prison and a $250,000 fine for illegal possession a machine gun, 10 years in prison and a $10,000 fine for possession of an unregistered short-barreled shotgun, 20 years in prison and a $1 million fine for any of the narcotics-distribution charges. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Bakersfield Man Agrees to Forfeit 3,804 Lower Receiver FirearmsRead the Press Release
SACRAMENTO, Calif. — Christopher Cook, of Bakersfield, agreed to forfeit to the United States approximately 3,804 polymer AR-15 lower receivers manufactured in violation of federal firearms laws, United States Attorney Benjamin B. Wagner announced. AR-15 lower receivers are classified as firearms under federal law.
The AR-15 style rifle is composed of both an upper and lower receiver. The lower receiver contains the trigger control group, hammer and firing mechanism, and contains mounting points for the upper receiver. Federal law classifies AR-15 lower receivers as firearms and, thus, requires that they must be manufactured with serial numbers by a licensed manufacturer, and that they can only be sold by a licensed firearms dealer. In addition, dealers must perform background check on prospective buyers before they can be sold. The unregulated sale of unserialized AR-15 style firearms assembled using similar lower receivers has been a focus of several recent criminal prosecutions in the Eastern District of California.
According to documents filed by the Government in the civil forfeiture case, Christopher Cook manufactured and sold unserialized polymer AR-15 lower receivers online and from his retail store in Bakersfield. Cook also distributed his product to other dealers who sold them at gun shows. Cook’s lower receivers were made of polymer and contained cavities with different color polymer, making it easier for purchasers to mill out the cavities and convert the lower receiver to an operational firearm. Cook holds a dealer’s license and was trained on the laws governing the manufacture and sale of firearms. Cook does not, however, have a manufacturer’s license.
Starting in January 2014, undercover federal agents purchased approximately 33 lower receivers directly from Cook’s retail store, through his company’s online store, or from one of his distributors. Not one of the lower receivers purchased by undercover agents were serialized for later identification, nor did Cook or his distributors initiate background checks. In April 2014, federal agents executed warrants at Cook’s business and personal residence, seizing the 3,804 lower receivers. According to the Government’s complaint, Cook contracted with a Southern California plastics company to manufacture approximately 40,000 of the multi-colored polymer lower receivers. In the stipulation in which he agreed to the forfeiture of the lower receivers, Cook did not admit to the allegations in the Government’s complaint.
“The construction of high-powered firearms with no serial numbers, and the sale of such firearms with no background checks or other regulatory oversight, has become a serious threat to public safety in this area,” said U.S. Attorney Wagner. “As a result of this agreement, over 3,800 unserialized lower receivers will never hit the streets as components in illegally sold firearms.”
“Targeting the illegal manufacturing and distribution of unfinished lower receivers continues to be a priority for ATF. Keeping these untraceable firearms out of the hands of criminals is paramount to protecting the public,” said ATF Special Agent in Charge Jill A. Snyder.
This case was the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Kevin C. Khasigian prosecuted the case.
Shasta County Man Pleads Guilty to Defrauding the VA by Falsely Claiming He Was a Decorated VeteranRead the Press Release
SACRAMENTO, Calif. — John Cal Howe II, 42, of Lakehead, pleaded guilty today to 23 misdemeanor counts in a scheme to obtain thousands of dollars in veterans’ benefits to which he was not entitled, United States Attorney Benjamin B. Wagner announced.
According to court documents, Howe pleaded guilty to one count of theft in connection with a healthcare program, 20 counts of theft of government property, one count of making a fraudulent demand against the United States, and one count of making a fraudulent representation about the receipt of military decorations or medals.
According to the superseding information filed on January 14, 2016, between February 2012 and April 2015, Howe obtained health care benefits from the Veterans Affairs Health Benefits Program. He also obtained fraudulent travel reimbursements from the VA, and applied for a VA pension. He falsely claimed he was a decorated United States Marine Corps veteran and the recipient of three Purple Heart medals, although he had never enlisted or served in the armed forces of the United States.
This case is the product of an investigation by the Department of Veterans Affairs Office of Inspector General. Special Assistant United States Attorney Elliot Wong is prosecuting the case.
Howe is scheduled to be sentenced on April 25, 2016, by United States Magistrate Judge Edmund F. Brennan. Howe faces a maximum statutory penalty of one year in prison, a $100,000 fine, and a one-year term of supervised release 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.
Former Maintenance Manager at Foster Farms Pleads Guilty to Conspiring to Commit Mail FraudRead the Press Release
FRESNO, Calif. — Surjit Toor, 61, of Hilmar, pleaded guilty today to conspiring to commit mail fraud in a scheme that defrauded Foster Farms of nearly $47,000, United States Attorney Benjamin B. Wagner announced.
According to court documents, Surjit Toor was a maintenance manager at the Foster Farms processing plant in Livingston and was responsible for selecting third-party vendors to perform work at the plant. From February 2012 to April 2012, he conspired with his son, Raju Toor, 34, who ran a construction company, to bill Foster Farms for work that the construction company never performed. The falsely billed projects included the construction of an inspection catwalk and the modification of a large metal tank designed to hold ammonia. After fraudulently receiving payment from Foster Farms, Raju Toor transferred the majority of the funds back to his father.
As part of his plea agreement, Surjit Toor agreed to pay $46,979 in restitution to Foster Farms, which he provided to the court today. Raju Toor entered into a deferred prosecution agreement with the United States, which was approved by the court on January 29, 2016. According to the agreement, if Raju Toor does not engage in any fraudulent conduct, does not commit any crime, and the restitution amount is paid by the time of the sentencing of Surjit Toor, then after a 12 month period, the United States will seek dismissal of the charges against Raju Toor in the indictment.
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorney Grant B. Rabenn is prosecuting the case.
Surjit Toor is scheduled to be sentenced by United States District Judge Dale A. Drozd on May 16, 2016, at 10:00 a.m. Surjit Toor faces a maximum statutory penalty of 20 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Defendant Sentenced to 5 Years in Prison for Marijuana Cultivation Operation in the Sierra National ForestRead the Press Release
FRESNO, Calif. — Juan Pedro Jimenez, 40, of Mexico, was sentenced today to five years in prison for conspiring to manufacture, distribute and possess with intent to distribute, manufacturing, and possess with intent to distribute marijuana in connection with a large-scale cultivation operation on Chowchilla Mountain in Mariposa County in the Sierra National Forest in Mariposa County, United States Attorney Benjamin B. Wagner announced.
According to court documents, Jimenez was found at the cultivation site on public land in July. Agents removed 6,919 marijuana plants from the site and found fertilizer, trash, water lines, and propane tanks. The cultivation activities caused extensive damage to the land and natural resources. Native trees and plants were cut down and steep hillsides were terraced to plant the marijuana. Water was diverted from a nearby creek to irrigate the plants. Jimenez pleaded guilty on November 18, 2015.
This case was the product of an investigation by the U.S. Forest Service and the Mariposa County Sheriff’s Office. Assistant United States Attorney Karen Escobar prosecuted the case.
Stockton Loan Officer Pleads Guilty to Mortgage Fraud OffenseRead the Press Release
SACRAMENTO, Calif. —Jeffrey T. Crothers, 50, of Stockton, pleaded guilty today to conspiracy to commit bank fraud, United States Attorney Benjamin B. Wagner announced.
According to court documents, Crothers, while working for National City Mortgage in Stockton, conspired with at least one other person to defraud National City Bank, which funded the mortgages. In 2006, Crothers submitted a loan application that falsely represented that the loan applicant was the actual borrower, that the loan applicant’s monthly income was higher than it actually was, and that the property being purchased was to be the loan applicant’s primary residence when it was not. The loan applicant was selected because of his good credit, but was unable to make the monthly payments for the loan.
Crothers also submitted a letter that contained a false explanation as to why the loan applicant was purchasing the property. The false letter was used to satisfy a condition for the issuance of the loan. National City Bank sustained a loss of approximately $87,000.
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorneys John K. Vincent and Christiaan H. Highsmith are prosecuting the case.
Crothers is scheduled to be sentenced by U.S. District Judge Garland E. Burrell Jr. on May 20, 2016. Crothers faces a maximum statutory penalty of 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.
Former Fresno Teacher’s Aide Pleads Guilty to Marijuana Cultivation Operation in Trinity CountyRead the Press Release
FRESNO, Calif. —Kevin Nouthai Yang, 48, of Fresno, pleaded guilty today to conspiring to cultivate, distribute and possess with intent to distribute marijuana grown on property that he owned in Hayfork in the Shasta Trinity National Forest, United States Attorney Benjamin B. Wagner announced.
According to court documents, Yang, who was then a high school teacher’s aide for the Central Unified School District, was found at the Hayfork property during the execution of a federal search warrant. U.S. Forest Service agents had obtained the search warrant after seeing hundreds of large, mature marijuana plants growing on Yang’s property. Yang was in the process of harvesting marijuana and was in possession of 324 pounds of marijuana, 200 marijuana plants, and a firearm. Some of the marijuana grown on Yang’s property had already been distributed to Fresno. In pleading guilty, Yang also agreed to the forfeiture of the property and the seized firearm.
Yang is scheduled for sentencing on May 2, 2016. He faces a maximum prison term of 20 years in prison and a $1 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
This case is the product of an investigation by the U.S. Forest Service and Trinity County Sheriff’s Office. Assistant United States Attorney Karen A. Escobar is prosecuting the case.
Sacramento Man Sentenced to 35 Years in Prison for Sex TraffickingRead the Press Release
SACRAMENTO, Calif. — Today U.S. District Judge Troy L. Nunley sentenced Percy Love III, 34, of Sacramento, to 35 years in prison for five counts of sex trafficking related to multiple victims, United States Attorney Benjamin B. Wagner announced.
On December 23, 2014, after an 11-day trial, a federal jury found Love guilty of three counts of sex trafficking by force and one count of sex trafficking of a minor.
U.S. Attorney Wagner stated: “This defendant forced his will upon weaker people for profit using threats and violence. Percy Love should spend the next several decades reflecting on how his abuse and humiliation of his victims has resulted in a life behind bars. He is a dangerous predator and the sentence imposed today will protect society from him.”
This case was the product of an investigation by the FBI’s Child Exploitation Task Force, a multijurisdictional task force composed of representatives from the FBI and the Sacramento Police Department, with assistance from the Sacramento County District Attorney’s Office. Assistant United States Attorneys Michele Beckwith and Jason Hitt prosecuted the case.
“Percy Love strategically preyed upon vulnerable young women and underage girls, luring them into a cycle of exploitation, brutal violence, and intimidation for his financial benefit. He exhibited complete disregard for the wellbeing of his victims and the laws. Today’s sentence will not erase the physical and emotional scars Love inflicted upon his victims but it will offer them time to heal,” said Special Agent in Charge Monica M. Miller of the Federal Bureau of Investigation Sacramento field office. “Our Innocence Lost Task Force, which includes officers from the Sacramento Police Department, is committed to identifying men and women who exploit our community’s most vulnerable adults and children.”
Sacramento Police Chief Sam Somers Jr. stated: “Due to a coordinated effort of various dedicated law enforcement detectives, this predator will no longer have the opportunity to exploit or harm young women in our community. The conviction of Mr. Love sends a strong, clear message that this type of criminal conduct will not be tolerated in our communities.”
Two victims appeared at the sentencing hearing and described the lasting impact that the defendant’s crimes had on their lives. In sentencing the defendant, Judge Nunley described the defendant as a “gorilla pimp” who had attempted to beat the spirit out of his victims and, based on the trial evidence, earned every year that he would serve in prison.
According to evidence produced at trial, Love targeted vulnerable young women and underage girls to work as prostitutes for him since at least 2007. The testimony of witnesses at trial, including the victims, revealed a pattern of conduct where Love used charm to recruit and brute force to control the women and girls who worked for him.
According to court documents, on July 22, 2013, Sacramento police officers were called to a report of domestic violence and found Love asleep in the front seat of a car with a woman, whose sister had called in the report. The woman explained to officers that she was in a “working relationship” with Love. She reported that Love had beaten her many times, and she had bruises and cigarette burns on her hand, arm and stomach. Love was arrested that night for domestic violence and possession of Ecstasy.
On September 12, 2013, a federal grand jury indicted Love, charging him with two counts of sex trafficking by force, fraud, or coercion. After further investigation revealed more victims, a superseding indictment was brought on March 13, 2014. Love has been in custody since his arrest and represented himself during trial.
Jury Convicts Fresno County Man of Enticement of a MinorRead the Press Release
FRESNO, Calif. — After a two–day trial, a federal jury found John Torres, 28, of Firebaugh, guilty today of one count of enticement of a minor, United States Attorney Benjamin B. Wagner announced. The trial was held before United States District Judge Anthony W. Ishii.
According to evidence presented at trial, 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, and who was volunteering at the Boys and Girls Club 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, 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.
Torres is presently in state custody on other charges. Torres is scheduled to be sentenced by Judge Ishii on May 9, 2016. He faces a statutory penalty of no less than 10 years and up to life in prison 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.
Antelope Couple Sentenced to 15 Years in Prison for the Arson of Their HomeRead the Press Release
SACRAMENTO, Calif. — An Antelope couple was sentenced today by Chief United States District Judge Morrison C. England Jr. to 15 years in prison each for four felony counts related to the arson of their former home and home-based business, United States Attorney Benjamin B. Wagner announced.
After a 10-day trial, a jury found Alexander Sakhanskiy, 43, and Larisa Sakhanskiy, 45, guilty of arson to commit another felony, two counts of mail fraud, and arson affecting interstate commerce. Judge England also ordered the defendants to pay nearly $540,000 in restitution to the insurance company that had paid their fraudulent claim.
According to evidence introduced at trial, on May 22, 2010, a gasoline-fueled fire destroyed the Sakhanskiys’ home in Antelope, a single-family residence at 5745 Hawkeye Lane, that was also the business location of “Alex’s Plumbing.” Prior to the fire, the Sakhanskiys removed most of their personal belongings from the house. Firefighters testified that the residential fire sprinkler system and smoke detectors had been deactivated. Although the fire resulted in the total destruction of the house, firefighters were able to prevent the fire from spreading to neighboring homes.
Evidence at trial showed that the Sakhanskiys had set the fire or caused the fire to be set to collect insurance money from Farmers Insurance Group, Mid-Century Insurance Company for hundreds of thousands of dollars of property they claimed was destroyed in the fire. In filing the claim, the defendants falsely claimed that hundreds of thousands of dollars of property was destroyed in the fire, when most of the contents of the house had been removed and hidden before the fire.
“For-profit arsonists like the Sakhanskiys allow their own personal greed to lead them to intentional acts that endanger the lives of themselves, their neighbors, and the first responders who are diverted from the accidental hazards of everyday life,” said U.S. Attorney Wagner. “We are pleased with today’s sentences, which reflect the gravity this offense, and are grateful for the hard work and cooperation of the ATF, the Sacramento Metropolitan Fire District, and the Sacramento County District Attorney’s Office in securing this result.”
“The Sakhanskiys committed arson in an attempt to defraud their insurance company, in turn placing their neighbors, firefighters and first responders in serious danger,” said ATF Special Agent in Charge Jill A. Snyder. “This investigation was a joint effort with our state and local partners.”
John Barsdale, Metro Fire Supervising Fire Investigator stated: “Keeping our communities safe is Metro Fire’s top priority, whether that means rapidly mitigating an emergency or working with our partner agencies to thoroughly investigate a fire scene and put an arsonist behind bars. Metro Fire's investigation team spent several hundred hours investigating this fire and conducting follow up investigations in order to successfully make an arrest and close the case.”
This case was the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Sacramento Metropolitan Fire District. The Sacramento County District Attorney’s Office assisted investigators with the initial fire investigation. Assistant U.S. Attorneys Michael D. Anderson and Nirav Desai prosecuted the case.
Sacramento Man Sentenced to 18 Months in Prison for Tax Refund SchemeRead the Press Release
SACRAMENTO, Calif. — United States District Judge Kimberly J. Mueller sentenced Manuel Ruiz, 47, of Sacramento, to 18 months in prison for making false claims for tax refunds on federal income tax returns, United States Attorney Benjamin B. Wagner announced. Ruiz pleaded guilty on May 26, 2015.
According to court documents, Ruiz engaged in a scheme to fraudulently prepare tax returns for clients of a tax preparation business he operated from his home. As part of the scheme, Ruiz reported false wages and listed false dependents on his clients’ returns to qualify them for the Earned Income Credit (EIC) when they would not otherwise have been eligible, and to maximize the tax benefits of the EIC beyond the legitimate amounts to which his clients were actually qualified.
In total, between tax years 2009 and 2011, Ruiz made false claims on more than 180 returns, including returns that he filed on his own behalf and on behalf of others, which resulted in over $650,000 in fraudulent refunds paid out by the IRS. During that period, Ruiz directed more than $460,000 in tax refunds from the false claims into bank accounts he controlled. After payments to clients, Ruiz retained at least $192,000 from the false claims.
This case was the product of an investigation by the Internal Revenue Service, Criminal Investigation. Assistant United States Attorneys Sherry D. Hartel Haus and André M. Espinosa prosecuted the case.
Mendocino National Forest Marijuana Cultivator Sentenced to More than Five Years in PrisonRead the Press Release
SACRAMENTO, Calif. — Pablo Barreto-Cruz, 39, of Mexico, was sentenced today by United States District Judge John A. Mendez to five years and three months in prison and ordered to pay $22,800 in restitution for cultivating marijuana on public land and depredation of public lands and resources, United States Attorney Benjamin B. Wagner announced.
According to court documents, between March 2015 and May 2015, Barreto-Cruz grew 2,998 marijuana plants in the Mendocino National Forest. The marijuana cultivation operation caused significant harm to the habitat and water quality of the National Forest.. Following Barreto-Cruz’s arrest on May 12, 2015, authorities searched the marijuana cultivation site and discovered approximately 1,000 pounds of irrigation pipe, approximately 1,000 pounds of camp debris, and several fertilizers and pesticides, including the highly toxic pesticide Carbofuran, which is dangerous to both humans and animals. The U.S. Forest Service estimates that the marijuana cultivation site diverted approximately 18,000 gallons of water per day.
This case was the product of an investigation by the United States Forest Service, the Glenn County Sheriff’s Office and the California Department of Fish and Wildlife. Assistant United States Attorney Christiaan Highsmith prosecuted the case.
Final Defendant in Shoplifting Ring Sentenced to PrisonRead the Press Release
SACRAMENTO, Calif. — The final defendant in a shoplifting ring that stole over $2.5 million in retail goods and resold them on eBay was sentenced today to three years in prison, United States Attorney Benjamin B. Wagner announced.
Jason Nathaniel Reed, 36, of Aspen, Colorado, previously of Vacaville, California, is the seventh defendant sentenced to prison in this case. Jason Schroeder, 36, of Sacramento, was previously sentenced to seven years in prison, Kirk Arthell Sanderson, 37, of Walnut Creek, was previously sentenced to four years in prison; John Judah Young, 34, of Sacramento, was sentence to two and a half years in prison; and David Reed, 29, of Vacaville, was sentenced to one year in prison. Two others, Andrea Lynn Turner, 34, of Roseville, and Joshua Roy Payne, 30, of Vacaville, were each sentenced to two months in prison.
On June 16, 2015, Schroeder pleaded guilty to one count of mail fraud. According to the plea agreement, in October 2012, a sporting goods company with retail stores in Sacramento called the FBI stating that an eBay account was listing items for sale it suspected were stolen. Follow-up investigation revealed that the account was controlled by co-defendant Schroeder using co-defendant Young’s name, and since 2009, it listed more than 17,000 items for sale, including sporting goods, household items, recreational equipment and pet care products. Most of the items were listed as new or with tags. Virtually all of the items sold on the account were stolen by Reed or others, and were sold at a discount to buyers across the country.
According to the plea agreement, Jason Reed and Jason Schroeder took a road trip across the country to Miami to attend the Super Bowl. On that trip, Schroeder and Reed were stealing items on a daily basis, listing the items for sale on eBay in the evenings, and shipping the items out via FedEx.
Wiretaps and surveillance also revealed the specific roles of other members of the conspiracy. According to court documents, David Reed assisted Schroeder with the packaging and shipment of the stolen merchandise. Sanderson assisted in moving items away from Schroeder’s residence when he learned of the federal investigation. Turner and Payne provided false statements to federal agents upon being interviewed regarding their assistance to Schroeder.
This case was the product of an investigation by the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigation, and the United States Postal Inspection Service. Assistant United States Attorneys Jared C. Dolan and Jeremey J. Kelley are prosecuting the case.
Federal Jury in Fresno Finds Former Fresno National Guard Recruiter Guilty of Recruiting FraudRead the Press Release
FRESNO, Calif. — On Monday, February 1, 2016, after a seven-day trial, a federal jury found Joaquin Cuenca, 38, of San Diego, guilty of three counts of wire fraud in a scheme to fraudulently obtain bonuses in a recruitment program for the California National Guard, United States Attorney Benjamin B. Wagner announced.
According to evidence produced at trial, Cuenca was a full-time recruiter for the California National Guard in Fresno and defrauded a military recruiting program out of thousands of dollars. The program, the Guard Recruiting Assistance Program (G-RAP), offered a financial incentive to members of the National Guard and others (called Recruiting Assistants, or RAs) who nominated new soldiers. If an RA referred a potential Guard member to a recruiting office and that person ultimately enlisted, the RA was typically eligible to receive $1,000 when a nominee enlisted and $1,000 more when the nominee left for basic training. Because the point of the program was to encourage other soldiers to join in the recruiting effort, G‑RAP incentives were not available for soldiers employed by the Guard as recruiters. Ultimately, G-RAP was discontinued following the discovery of widespread fraud.
According to court documents and evidence presented at trial, Cuenca, was a recruiter and not eligible for bonuses through G-Rap. However, he fed information about new recruits to soldiers who were eligible for G-RAP. Those soldiers (or Cuenca himself) then would enter the information about the new solder online and claim a bonus even though the RA had not in fact referred the new soldier at all. Cuenca would often receive a portion of the bonuses.
“Cuenca joins the ranks of others who have been brought to justice for defrauding G‑RAP and the Army National Guard,” said U.S. Attorney Wagner. “Cuenca and his co-schemers discovered a natural flaw in the program and exploited it. The U.S. Attorney’s Office will continue to uncover and prosecute fraud and abuse of taxpayer money.”
“Joaquin Cuenca's greed and criminal activity permanently tarnished his military career and disrespected the sacrifice of the many men and women who serve our country with honor,” said FBI Special Agent in Charge Monica Miller of the Federal Bureau of Investigation Sacramento field office. “We thank Army Criminal Investigative Command for their continued partnership, ensuring criminals face justice when they allow greed to eclipse their duty to fellow serve members and the American people.”
Chris Hendrickson, Special Agent in Charge of the Western Field Office, Defense Criminal Investigative Service, said: “Corruption strikes at the heart of good government and erodes public trust. The investigation of these offenses is a top priority for the DCIS, its investigative partners, and the U.S. Attorney's Office. Today's verdict demonstrates that there is zero tolerance for this type of shameful misconduct.”
"When individuals fail to live up to the values of the U.S. Armed Forces, they should be held accountable," said Maj. Gen. David S. Baldwin, California's Adjutant General. "We applaud the U.S. Attorney's Office and the law enforcement community in helping us keep the Cal Guard a force of which our communities can be proud."
Cuenca is the second person to be convicted in this district in the last 10 days in connection with fraud with G-RAP. On January 22, 2016, Richard Sihner, 54, of Elk Grove was convicted by a jury in Sacramento of 18 counts of wire fraud and making false statements.
Cuenca is scheduled to be sentenced by United States District Judge Dale A. Drozd on May 16, 2016. Cuenca faces a maximum statutory penalty of 20 years in prison and a $250,000 fine for each count of wire fraud. 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 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 Attorney Michael Tierney and Department of Justice Trial Attorney Alexis Loeb are prosecuting 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 February 4, 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. A status conference for sentencing is set for February 4, 2016.
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1:14-cr-107 DAD — Leonardo Pesta, 47, of Mountain View, pleaded guilty on July 27, 2015, to one count of wire fraud. Sentencing is set for April 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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2:14-cr-151 JAM — Richard C. Sihner, 54, of Elk Grove, was found guilty of 18 counts of wire fraud and one count of making false statements. Sentencing is set for May 3, 2016.
Charges are pending against the following (the charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt):
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2:15-cr-005 TLN — Steel A. Davis, 43, of Paradise, was charged with eight counts of wire fraud on January 8, 2015. A status conference is set for February 4, 2016.
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1:14-cr-109 LJO — Jimmy Maldonado, 35, a recruiter, and his wife Mayra Garcia Maldonado, 29, a recruiting assistant, both of Fresno, are allegedly responsible for causing $40,000 in fraudulent bonuses. Trial is scheduled for May 3, 2016.
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Bakersfield Resident Sentenced for Pointing a Laser at Kern County Sheriff HelicopterRead the Press Release
FRESNO, Calif. — Jose Javier Rosas, aka Jose Javier Rosas Jimenez 62, of Bakersfield, was sentenced today to 18 months in prison for aiming the beam of a high-powered laser pointer at Air-1, a Kern County Sheriff’s helicopter, United States Attorney Benjamin B. Wagner announced.
The sentence follows Rosas’s guilty last fall. According to court documents, Rosas struck and tracked Air-1 with a green laser pointer during the evening hours. As a result, the pilot experienced glare, flash blindness, significant loss of night vision, watering eyes, and eye pain and was forced to divert attention from assisting in the search for a robbery suspect.
“Pointing a laser at any aircraft is a reckless action which has potential to cause a catastrophic incident affecting both the air crew and community. In this case, the airmen were impaired by the laser but were able to safely divert from the planned operation,” said Special Agent in Charge Monica M. Miller of the FBI Sacramento field office. “Due to the risk to public safety, anyone who witnesses an individual shining a laser at aircraft or any vehicle should immediately report the activity to law enforcement to protect the safety of the community.”
“As this sentence makes clear, Mr. Rosas’ actions put the life of this aircraft’s pilot and the safety of the general public in peril,” said Ryan Spradlin, special agent in charge for HSI San Francisco, which oversees HSI’s enforcement efforts throughout northern California. “In addition to the jail term, this defendant will face removal to his native Mexico upon completion of his prison time. HSI will continue to use its resources and unique enforcement authorities to protect our communities from those who engage in criminal activity that endangers our citizens.”
Reports of laser attacks on aircraft have increased dramatically in recent years as powerful laser devices have become more affordable and widely available to the public. Last year, there were 7,702 laser strikes, or 21.16 laser incidents per day, reported in the United States. In the Eastern District of California, which encompasses 34 counties, including Kern County, in the eastern portion of California, there were 214 reported incidents. So far this year, the Federal Aviation Administration reports over 24 laser incidents per day nationwide. Aviators, such as helicopter pilots, are particularly vulnerable to laser illuminations when conducting low-level flight operations at night.
This case was 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 Kern County Sheriff’s Office. Assistant U.S. Attorney Karen A. Escobar prosecuted this case.
Roseville Wealth Advisor Pleads Guilty to Wire FraudRead the Press Release
SACRAMENTO, Calif. — Lee Loomis, 58, of Granite Bay, pleaded guilty today to wire fraud, United States Attorney Benjamin B. Wagner announced.
According to court documents, Loomis was president of a company called Loomis Wealth Solutions. Through seminars and face-to-face meetings, he induced individuals to invest money in the Naras Funds, which he claimed were liquid, savings account-like investments that yielded a 12 percent annual return. He also claimed the investment was secured by a third party that was using the money to make loans secured by residential properties.
In fact, investors in the Naras Funds lost their investments. In his plea agreement, Loomis admitted that the funds were not used as was promised to investors. Instead, Loomis and his co-defendants used the funds to pay for ongoing operations and to pay previous investors. Loomis took in more than $10 million in investor funds, defrauding more than 50 individuals. At the time law enforcement executed search warrants at the business, only $4,313 was left in investor accounts.
“This guilty plea brings to an end Lee Loomis’s long and destructive scheme to defraud investors,” said U.S. Attorney Wagner. “While it is doubtful that investor victims will ever be made whole, Loomis has been brought to justice, and he will never again be in a position to cause financial harm to others.”
This case is the product of an investigation by the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigation, the United States Securities and Exchange Commission, and the California Bureau of Real Estate. Assistant United States Attorneys Paul Hemesath and Jared Dolan are prosecuting the case.
Loomis has been in custody since September 14, 2012. He will remain in custody pending sentencing. Co-defendants Dawn C. Powers, 45, of Lincoln, John Hagener, 79, of Granite Bay, and Joseph Gekko, 47, of Yorba Linda, have previously pleaded guilty and are awaiting sentencing. Co-defendants Michael Llamas, 31, of Tracy, and Peter Woodard, 47, of Ventura, are also named co-defendants in the mortgage fraud allegations in the indictment. A trial against Llamas and Woodard is set for September 12, 2016. The charges against them are allegations: the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.
Loomis is scheduled to be sentenced by United States District Judge John A. Mendez on May 10, 2016. Loomis faces a maximum statutory penalty of 20 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Residents from Modesto and Southern California Indicted for Large Scale Statewide Drug Trafficking ConspiracyRead the Press Release
FRESNO, Calif. — A federal grand jury returned an 11-count indictment today against Antonio Castellanos, 32, of Whittier; Jose Reyes-Pineda, 43, of Anaheim; and Modesto residents Genaro Serrato-Calles, 45; Antonio Valencia-Hernandez, 60; Lorena Mariscal Velasquez, 46; Nora Lizbet Garcia, 29; and Melissa Velasquez, 25, charging them in a methamphetamine and heroin trafficking conspiracy, U.S. Attorney Benjamin B. Wagner announced.
According to court documents, between June 2014 and January 2016, the defendants conspired to distribute methamphetamine and heroin brought from Southern California to Stanislaus County. On April 8, 2015, agents seized six kilograms of methamphetamine obtained from Reyes-Pineda, transported by Valencia-Hernandez and Lorena Velasquez, and intended for Serrato-Calles. In addition, agents seized 16 kilograms of methamphetamine in June 15, 2015 that had been transported to Stanislaus County from Southern California as arranged by Castellanos and Serrato-Calles.
This case is the product of an investigation by the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Stanislaus Drug Enforcement Agency, the Central Valley HIDTA, the San Joaquin METRO Task Force, and the Orange County Sheriff’s Special Investigations Bureau. Assistant U.S. Attorney Kathleen A. Servatius is prosecuting the case.
All defendants have been arrested. Castellanos, Reyes-Pineda, Lorena Velasquez, Melissa Velasquez, and Garcia have been ordered released pending trial. All defendants are scheduled to appear in court before U.S. Magistrate Judge Stanley A. Boone for arraignment on Friday, January 29, 2016.
If convicted, Castellanos, Serrato-Calles, and Valencia-Hernandez face a sentence of 10 years to life in prison and a $10 million fine. If convicted, the remaining defendants face a maximum statutory penalty of 20 years in prison and a $1 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case was part of an Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF program was established in 1982 to conduct comprehensive, multilevel attacks on major drug trafficking and money laundering organizations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
Tenth and Final Defendant from Butte County Methamphetamine Trafficking Organization Sentenced to Federal PrisonRead the Press Release
SACRAMENTO, Calif. — Manuel Garcia Navarro, 33, of Fresno, was sentenced today by United States District Judge Kimberly J. Mueller to two years in prison for conspiring to distribute methamphetamine, United States Attorney Benjamin B. Wagner announced.
According to court documents, Navarro was a methamphetamine courier. On June 29, 2013, Navarro was stopped by the California Highway Patrol for a vehicle code violation. A subsequent search of Navarro’s vehicle resulted in the seizure of four pounds of methamphetamine concealed within the airbag compartment.
Federico Aguilar was the head of this drug trafficking organization that was responsible for distributing pound-quantities of methamphetamine on a weekly basis in Butte County. Over a four-month period in 2013, Aguilar’s organization distributed over 49 pounds of methamphetamine. Aguilar was arrested at his residence in August 2013, where law enforcement officers found 15 cellphones, five guns, and $50,000 in cash concealed within a bathroom air vent.
Navarro is the tenth and final defendant to be sentenced in this case. Nine other defendants have been sentenced this year:
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On October 14, 2015, Federico Aguilar was sentenced to 17 and a half years in prison.
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On September 30, 2015, Rafael Medina was sentenced to six years and eight months in prison.
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On August 19, 2015, David Eleazar was sentenced to six years and eight months in prison.
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On July 8, 2015, Neng Xiong was sentenced to four years and five months in prison.
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On February 25, 2015, Alejandro Corona was sentenced to three years and six months in prison.
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On October 28, 2015, Rickey Xiong was sentenced to three years and six months in prison.
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On March 25, 2015, Jaime Dominguez was sentenced to two years in prison.
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On May 20, 2015, Sou Xiong was sentenced to two years in prison.
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On June 10, 2015, Cindy Hunter was sentenced to one year of supervised release.
This case was the product of an investigation by the Drug Enforcement Administration, the Butte Interagency Narcotics Task Force (BINTF), the Butte County Sheriff’s Office, the Butte County Probation Department, the Butte County District Attorney’s Office, the California Highway Patrol, the California Department of Justice Bureau of Gambling Control, the Chico Police Department, and the United States Marshals Service. Assistant United States Attorney Justin Lee 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, multi-level attacks on major drug trafficking and money laundering organizations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
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Placer County Man Sentenced to 5 Years in Prison for Receiving Child PornographyRead the Press Release
SACRAMENTO, Calif. — United States District Judge Kimberly J. Mueller sentenced Paul Ross Pacini, 46, of Rocklin, to five years in prison, to be followed by 15 years of supervised release, for receiving child pornography, United States Attorney Benjamin B. Wagner announced.
According to court documents, an undercover investigation revealed that from June 2013 through August 2013, Pacini used a peer-to-peer file-sharing network to make available more than 300 files of pictures and videos depicting the sexual exploitation of children. A search warrant executed at Pacini’s home revealed that his computers contained more than 2,500 images and more than 900 videos depicting the sexual abuse of children, and that at various times, many of those videos were made available to others over the Internet. The images and videos Pacini possessed involved the portrayal of sadistic, masochistic, and other depictions of violence, and included depictions of prepubescent minors under 12 years old.
This case was the product of an investigation by the Sacramento Internet Crimes Against Children (ICAC) Task Force, a federally and state-funded task force managed by the Sacramento Sheriff’s Department with agents from federal, state, and local agencies. The Sacramento ICAC investigates online child exploitation crimes, including child pornography, enticement, and sex trafficking. Assistant United States Attorney André M. Espinosa 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 Postal Inspector Sentenced to 3 Years in Prison for Possession of Stolen Mail and Marijuana TraffickingRead the Press Release
SAN JOSE, Calif. — Quan Pham Howard, 53, of Saratoga, California, a former supervisory postal inspector who worked at the San Jose Processing and Distribution Center was sentenced today by U.S. District Judge Lucy H. Koh to three years in prison for possession of stolen U.S. mail and possession with intent to distribute marijuana, United States Attorney Benjamin B. Wagner announced.
At sentencing, Judge Koh noted that as a sworn federal officer, Howard abused his position of trust, and that he obstructed justice when he interfered with the investigation into his criminal activity by attempting to influence or tamper with witnesses. Judge Koh set a hearing to decide restitution and any fine for March 16, 2016. She ordered Howard to begin serving his sentence on March 17, 2016.
According to court documents, on June 26, 2014, following an investigation and the execution of a search warrant at his house and office, Howard was arrested and charged with theft of mail. He pleaded guilty to the charges on July 22, 2015.
According to the plea agreement, between late 2010 and June 25, 2014, Howard unlawfully opened and stole United States mail that contained quantities of prescription drugs. He also possessed a variety of items that had been stolen from the mail distribution center including: a gun scope, a silver bar, jewelry, coins, gift cards, a gun silencer, a Rolex watch and other items. Howard also possessed over eight kilograms of marijuana with the intent to distribute. During this period, to conceal his theft and trafficking, Howard falsified postal records and disabled a surveillance camera at the distribution center.
After Howard was arrested and released on bond, he attempted to obstruct justice. On July 2, 2014, Howard contacted a former USPS employee whom he had supervised and attempted to influence the employee’s testimony with instructions regarding what to remember about Howard's prior supervision. In addition, Howard repeatedly contacted one of his former supervisors in an attempt to obtain her support for his false explanation of his possession of stolen property.
U.S. Attorney Wagner stated: “We are grateful for the assistance of the U.S. Postal Inspection Service in securing justice in this case. Mr. Howard violated the law, victimized postal customers, and endangered the critical trust between law enforcement and the community. We will continue our efforts to nurture that trust by working with our law enforcement partners to vigorously investigate and prosecute such cases.”
“When the USPS OIG receives these types of complaints, we take them very seriously and investigate them to their fullest. This sentencing serves as a deterrent to employees who think this type of behavior is acceptable and may be willing to compromise the integrity of the mail or their responsibility as a Postal Service employee,” says Special Agent in Charge Curtis Lembke.
U.S. Postal Inspection Service Special Agent in Charge Rafael E. Nunez stated: “It is disheartening to see a Postal Inspector accused and convicted of violating laws they were sworn to uphold, but it is reassuring that justice has been done today. Howard's actions should not diminish the fine work the men and women of the U.S. Postal Inspection Service do every day. We will continue to work with honor and integrity in a steadfast effort to maintain the safety and security of the U.S. Mail.”
This case was the product of an investigation by the United States Postal Service Office of Inspector General. Assistant United States Attorney Michelle Rodriguez, of the Eastern District of California, is prosecuting the case. Because Howard was a postal inspector who investigated cases in the Northern District of California, the U.S. Attorney’s Office for the Northern District was recused from this case. The case was heard in the U.S. District Court in San Jose.
Fresno Man Sentenced to 5 Years in Prison for Methamphetamine TraffickingRead the Press Release
FRESNO, Calif. — Jose Nicolas Olivas Zazueta, 35, of Fresno, was sentenced today by United States District Judge Lawrence J. O'Neill to five years in prison for possession with intent to distribute methamphetamine, United States Attorney Benjamin B. Wagner announced.
According to court documents, on August 2, 2014, Zazueta and co-defendant Jorge Hernandez, 35, of Fresno, brought six pounds of methamphetamine to a parking lot on east Kings Canyon Road, in Fresno, where they were arrested and the methamphetamine was seized. Hernandez was sentenced to five years by Judge O’Neill on January 19, 2016.
This case was the product of an investigation by the United States Drug Enforcement Administration and the Federal Bureau of Investigation. Assistant United States Attorney Michael S. Frye is prosecuting the case.
Final Defendant Pleads Guilty in Connection with Extensive Counterfeit Media Conspiracy in Central ValleyRead the Press Release
FRESNO, Calif. — Miguel Angel Gomez Rebolledo, 35, of San Jose, pleaded guilty today before U.S. District Judge Lawrence J. O’Neill to conspiracy to commit criminal copyright infringement and related crimes, United States Attorney Benjamin B. Wagner announced.
Gomez Rebolledo was the last defendant to plead guilty in connection with an extensive counterfeit media scheme involving a San Jose-based warehouse and counterfeit media distribution and resale activity throughout the Central Valley of California.
According to court documents, on March 13, 2015, warehouse and office space used by the defendants was found to contain more than 120,000 counterfeit music CDs and movie DVDs. The counterfeit materials included movie titles that were in theatrical release and not yet available for legitimate sale on DVD. The counterfeit CDs and DVDs were distributed by the defendants for resale in Atwater, Modesto, Stockton, Turlock, and throughout California. Gomez Rebolledo pleaded guilty to his role in the scheme, which involved manufacturing counterfeit motion picture DVDs for distribution and resale at the office space used by Gomez Rebelledo and his co-conspirators.
The status of the remaining co-defendants in the case is as follows:
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On December 7, 2015, co-defendants Efrain Lozada Rosas, and Victor Flores Fuentes, of San Jose, and Jesus Cuevas Lopez, of Southern California, pleaded guilty to conspiracy to commit criminal copyright infringement and related crimes. They will be sentenced on April 11, 2016.
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On December 14, 2015, co-defendant Antonio Morales, of San Jose, pleaded guilty to conspiracy to commit criminal copyright infringement and related crimes. He will be sentenced on March 28, 2016.
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On December 7, 2015, co-defendant Edgar Hipatl Rodriguez, of San Jose, was sentenced by Judge O’Neill to 27 months in prison for conspiracy to commit criminal copyright infringement and related crimes.
This case is the product of an investigation by the Sacramento Intellectual Property Rights Task Force composed of the Federal Bureau of Investigation and the Sacramento County Sheriff’s Office. Assistant U.S. Attorney Henry Z. Carbajal III is prosecuting the case.
The defendants pending sentencing face 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.
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Two Northern California Women Charged in Fraudulent Tax Refund SchemeRead the Press Release
SACRAMENTO, Calif. — Denna Chambers, 33, of Woodland, and Starsheka Mixon, 32, of Pinole, have been arrested for a scheme to submit false claims to the government for fraudulent tax refunds, United States Attorney Benjamin B. Wagner announced.
On Thursday, January 14, 2016, a federal grand jury returned a 16-count indictment charging Chambers and Mixon with conspiracy to submit false claims and submitting false, fictitious or fraudulent claims.
According to court documents, between January 2011 and June 2013, Chambers and Mixon obtained the names and personal identifying information of other persons and used this information to file false federal income tax returns. The tax returns included false statements about the taxpayers’ income, dependents, occupations, and entitlement to tax credits. In all, approximately 178 false income tax returns requesting more than $900,000 in fraudulent refunds were submitted as part of this scheme. Mixon is also charged with submitting a false claim for a tax refund in connection with her personal tax return.
This case is the product of an investigation by the IRS Criminal Investigation. Assistant United States Attorney Shelley D. Weger is prosecuting the case.
If convicted of the conspiracy to submit false claims each defendant faces a maximum statutory penalty of 10 years in prison and a $250,000 fine. If convicted of submitting false claims, each defendant faces 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.
Jury Finds Elk Grove Man Guilty of National Guard Recruiting FraudRead the Press Release
SACRAMENTO, Calif. — After a seven-day trial, a federal jury found Richard C. Sihner, 54, of Elk Grove, guilty of 18 counts of wire fraud and one count of false statements to a federal agent for a scheme to fraudulently obtain bonuses in a recruitment program for the California National Guard, United States Attorney Benjamin B. Wagner announced.
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. People who walked into recruiting offices entirely on their own initiative, without having been referred by an RA, were claimed by corrupt RAs in DOCUPAK’s system, often with the assistance of corrupt recruiters.
According to court documents and 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.
“Sihner and others who corrupted the G-RAP program were parasites on the Army National Guard, sucking dollars from the services that defend this country,” said U.S. Attorney Wagner. “Richard Sihner was the latest to be brought to justice in this district, but he won’t be the last.”
“When Richard Sihner decided to cheat the California Army National Guard by abusing the G-RAP recruitment incentive program, he threw away the honor earned during his entire career in uniform,” said FBI Special Agent in Charge Monica Miller of the Federal Bureau of Investigation's Sacramento field office. “Men and women in the armed services sacrifice much to protect our country. The FBI and our partners at Army Criminal Investigative Command will continue to honor such sacrifice by stopping criminals like Sihner, who place self-enrichment above the virtues of service and personal integrity.”
Special Agent in Charge Chris Hendrickson of the Defense Criminal Investigative Service stated, “While the vast majority of military service members are honest in their work and passionately committed to the mission of protecting this nation, some choose to abuse public trust. Public corruption is always unacceptable and the Defense Criminal Investigative Service will use all tools available to protect the public's trust and taxpayer interest.”
“Mr. Sihner's guilty verdict is further proof we will hold soldiers accountable should they partake in criminal behavior,” said Maj. Gen. David S. Baldwin, Adjutant General for the California National Guard. “I'd like to express our appreciation for the United States Attorney's painstaking efforts to account for these crimes.”
Sihner is scheduled to be sentenced by United States District Judge John A. Mendez on May 3, 2016. Sihner faces a maximum statutory penalty of 20 years in prison and a $250,000 fine for each count of wire fraud, and a maximum sentence of five years in prison and a $250,000 fine for false statements. 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 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 are prosecuting 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 January 28, 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. A status conference for sentencing is set for January 28, 2016.
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1:14-cr-107 DAD — Leonardo Pesta, 47, of Mountain View, pleaded guilty on July 27, 2015, to one count of wire fraud. Sentencing is set for April 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 January 26, 2016.
Charges are pending against the following (the charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt):
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1:14-cr-106 DAD — Joaquin Cuenca, 38, of San Diego, was a recruiter and allegedly is responsible for causing $30,000 in fraudulent bonuses. The trial in that case is currently ongoing in the U.S. courthouse in Fresno. The next date of the trial is January 26, 2016.
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2:15-cr-005 TLN — Steel A. Davis, 43, of Paradise, was charged with eight counts of wire fraud on January 8, 2015. A status conference is set for January 28, 2016.
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1:14-cr-109 LJO — Jimmy Maldonado, 35, a recruiter, and his wife Mayra Garcia Maldonado, 29, a recruiting assistant, both of Fresno, are allegedly responsible for causing $40,000 in fraudulent bonuses. Trial is scheduled for May 3, 2016.
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Jury Convicts Fresno Man for Receiving and Distributing Child PornographyRead the Press Release
FRESNO, Calif. — After a three–day trial, a federal jury found Shane Paul Young, 45, of Fresno, guilty today of receipt and distribution of child pornography, United States Attorney Benjamin B. Wagner announced. The trial was held before United States District Judge Dale A. Drozd.
According to evidence presented at trial, federal investigators in Fresno received a lead regarding an email address in Fresno that was distributing child pornography. Investigators determined that Young was the user of that Fresno email account. The evidence showed that Young sent and received hundreds of videos and images containing child pornography over the Internet with users across Europe and North America.
This case is the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Fresno County Sheriff’s Department, the Kings County District Attorney’s Office, and the Fresno Internet Crimes Against Children (ICAC) task force. ICAC is a federally and state-funded task force with agents from federal, state, and local agencies. The Fresno ICAC investigates online child exploitation crimes, including child pornography, enticement, and sex trafficking. Assistant United States Attorneys Mark J. McKeon and Jeffrey A. Spivak are prosecuting the case.
“Dark and twisted predators who prey on the young and innocent will be identified and brought to justice,” said Ryan L. Spradlin, special agent in charge of HSI San Francisco. “Together with our law enforcement partners, we were able to apprehend this criminal and provide a safer community for our children.”
Young is scheduled to be sentenced by Judge Drozd on April 11, 2016. Young faces a maximum statutory penalty of 40 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.usdoj.gov/psc. Click on the “resources” tab for information about Internet safety education.
Former IRS Employee and Another Individual Charged with Stolen Identity Tax Refund Fraud SchemeRead the Press Release
FRESNO, Calif. — Lorita Marie Rocha, 35, of Fresno, and Nereida Rodriguez, 28, of Firebaugh, were indicted in connection with a long-term tax refund fraud scheme that involved the use of stolen identities and false and fraudulent tax returns, United States Attorney Benjamin B. Wagner announced today.
On January 14, 2016, a federal grand jury returned a five-count indictment against Rocha and Rodriguez charging them with conspiracy to commit wire fraud and four counts of wire fraud. A status conference was set for February 29, 2016, before Magistrate Judge Sheila K. Oberto.
According to court documents, between February 2008 and January 2012, Rocha and Rodriguez conspired to obtain, and help others obtain, payment of false and fraudulent claims for refunds from the IRS. Through her employment by the IRS as a seasonal tax examiner, Rocha obtained the personal information of numerous individuals. Rocha and Rodriguez misappropriated the personal information of more than two dozen individuals and prepared and submitted fraudulent tax returns, making fraudulent claims for refunds in excess of $100,000.
This case is the product of an investigation by the Treasury Inspector General for Tax Administration (TIGTA) and the Internal Revenue Service-Criminal Investigation. Assistant United States Attorney Henry Z. Carbajal III is prosecuting the case.
If convicted, Rocha and Rodriguez face a maximum statutory penalty of 20 years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Elk Grove Woman Sentenced to Prison for Stolen Mail Scheme, Ordered to Pay for Repairing Mail BoxesRead the Press Release
SACRAMENTO, Calif. — Keri S. Southwood, 21, of Elk Grove, was sentenced today to two years and eight months in prison for bank fraud and aggravated identity theft, United States Attorney Benjamin B. Wagner announced. U.S. District Judge Garland E. Burrell ordered Southwood to pay $12,300 in restitution, which includes $6,526 for repairing U.S. Postal Service mail boxes.
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 at the Elk Grove Police Department to arrest and prosecute those responsible for mail theft to protect postal customer’s mail and personal information from theft.”
Elk Grove Police Chief Robert Lehner stated: “We appreciate the working relationship with the Postal Inspector’s Office in this case. These crimes have an enormous impact on a community like ours and it’s important that offenders be held appropriately accountable for their actions. In this case, I don’t know that would have happened without the partnership.”
According to court documents, between October 1, 2014 and February 12, 2015, Southwood and her co-defendants Joseph D. Ryan, 21, and Leonard A. Velasco, 24, both of Elk Grove, participated in a scheme to obtain stolen financial and personal identification information and use such to defraud financial institutions and merchants. Southwood and her co-defendants stole U.S. mail by damaging or destroying mail boxes and neighborhood U.S. Postal Service receptacles. After cataloguing the stolen mail, the defendants targeted certain postal customers in order to return to the mail receptacles to steal the replacement credit or debit cards mailed to the postal customers. The defendants also used information found in the stolen mail to apply for credit cards and had the cards sent to an address they controlled. The defendants used the credit or debit cards, PINs, and victims’ names to get money, goods and services.
According to court documents, Southwood and her co-defendants possessed stolen U.S. mail of over 1,000 victims and over 30 credit cards in victims’ names. As a result of the destruction of postal receptacles, customers suffered the loss of mail and mail services and the Postal Service suffered loss. Southwood pleaded guilty on September 1, 2015.
Co-defendant Ryan is scheduled for trial before Judge Burrell on April 5, 2016. The charges against Ryan are only allegations; he is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Co-defendant Velasco pleaded guilty on August 25, 2015, to bank fraud and aggravated identity theft and is scheduled to be sentenced on February 5, 2016. Velasco faces up to 30 years in prison for bank fraud and two consecutive years in prison for aggravated identity theft. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
This case was the product of an investigation by the United States Postal Inspection Service and the Elk Grove Police Department. Assistant United States Attorney Michelle Rodriguez prosecuted the case.
Vallejo Resident Charged with Methamphetamine PossessionRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a one-count indictment today against Lino Jimenez, 34, of Vallejo, charging him with possession with intent to distribute methamphetamine, United States Attorney Benjamin B. Wagner announced.
According to court documents, on November 13, 2015, Jimenez possessed over five pounds of methamphetamine for sale in a storage locker in Vallejo.
This case is the product of an investigation by the Drug Enforcement Administration and Napa Special Investigations Bureau. Assistant United States Attorney Matthew M. Yelovich is prosecuting the case.
Jimenez is in custody. He is scheduled to be arraigned on January 25, 2016.
If convicted, Jimenez faces a maximum statutory penalty of life in prison and a $10 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Sacramento Woman Pleads Guilty to Credit Card Fraud and Aggravated Identity TheftRead the Press Release
SACRAMENTO, Calif. — Kay Lee, 27, of Sacramento, pleaded guilty today to conspiracy to commit access device fraud and aggravated identity theft, United States Attorney Benjamin B. Wagner announced.
According to court documents, from July 2014 through April 2015, Lee participated in a scheme that involved at least 500 unauthorized and counterfeit credit cards and debit cards, affecting at least 1,800 victims, and leading to an estimated loss of $186,000. The defendants stole or possessed stolen mail, created or received fraudulent credit and debit cards, and made fraudulent purchases totaling thousands of dollars using the cards at national retailers such as Target in various Sacramento-area locations.
According to the plea agreement, Lee altered one business’s check for over $1,700 and deposited it in her personal checking account, put a hold on a victim’s mail without that person’s permission, took over a victim’s Target store account using another victim’s identity, and proceeded to engage in further unauthorized purchases using that taken-over account. Finally, on one occasion in September 2014, Lee used one victim’s credit card account number to purchase over $1,000 in tires and related services for her car, while presenting a different victim’s identity as the purchaser.
This case is the product of an investigation by the United States Postal Inspection Service. Assistant United States Attorney Matthew M. Yelovich is prosecuting the case.
Lee remains in custody. Charges are pending against four co-defendants and a status conference is set for them on February 25, 2016. The charges against them are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Lee is scheduled to be sentenced by United States District Judge Troy L. Nunley on April 7, 2016. She faces a maximum statutory penalty of five years in prison and a $250,000 fine for the conspiracy count, as well as a mandatory two years in prison, to be served consecutively to any other prison sentence imposed, for the aggravated identity theft 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.
Sacramento Attorney Sentenced to 2 Years in Prison for Tax EvasionRead the Press Release
SACRAMENTO, Calif. — Today, U.S. Chief District Judge Morrison C. England Jr. sentenced James Stewart Richards, 69, of West Sacramento, to two years in prison for tax evasion, United States Attorney Benjamin B. Wagner announced.
According to court documents, Richards is a member of the California and Hawaii bar organizations. Between 1994 and 2003, Richards owed federal income taxes totaling over $170,000, which he did not pay. Instead, he took steps to evade payment of some or all of the taxes he owed. He filed a false “Offer in Compromise” to the IRS that omitted bank accounts and six rental properties. He used a client trust account to hold his own assets. When alerted by the bank that the IRS was making inquiries about the account, Richards called the bank and asked that the bank provide no records to the IRS. He also withdrew $100,000 from the account in the form of cashier’s checks. Richards purchased a yacht that he registered and titled in a nominee’s name in order to conceal that asset from the IRS. He also made false statements about his assets to a bankruptcy court and to the IRS.
Noting that Richards is an attorney who took three semesters of tax courses in law school, Chief Judge England found that Richards employed a “sophisticated scheme” to hide assets from the IRS. Chief Judge England also noted that all attorneys know client trust accounts cannot be in the manner employed by Richards.
This case was the product of an investigation by the Internal Revenue Service-Criminal Investigation. Assistant United States Attorneys Audrey B. Hemesath and Nirav K. Desai prosecuted the case.
Modesto Felon Faces Charges for Illegal Firearms PossessionRead the Press Release
FRESNO, Calif. — A federal grand jury returned an indictment today charging Reyes Lopez Magana, 37, of Modesto, with being a felon in possession of a firearm and ammunition, United States Attorney Benjamin B. Wagner announced.
According to the indictment, on July 27, 2015, Magana, a previously convicted felon, was in possession of a Jimenez Arms 9 millimeter handgun that was loaded with 9 millimeter ammunition.
This case is the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Modesto Police Department. Assistant United States Attorney Daniel Griffin is prosecuting the case.
If convicted, Magana faces a maximum statutory penalty of 10 years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case was brought as part of Project Safe Neighborhoods (PSN), an initiative that brings together federal, state and local law enforcement to combat gun and gang crime. At the core of PSN is increased federal prosecution to incapacitate chronic violent offenders as well as to communicate a credible deterrent threat to potential gun offenders.
Granite Bay Man Sentenced for Defrauding Investors in a “Green” Cleaning Product CompanyRead the Press Release
SACRAMENTO, Calif. — Brent Lee Newbold, 58, of Granite Bay, was sentenced today to four years and three months in prison and ordered to pay more than $2.9 million in restitution for defrauding 13 individuals and a corporate investor, United States Attorney Benjamin B. Wagner announced.
Newbold was the chief executive officer of Holy Cow, a Rocklin-based business that produced a “green” cleaning product, marketed to stores such as Wal‑Mart, ACE Hardware, and Bed, Bath & Beyond. On September 3, 2015, he pleaded guilty to a scheme to defraud investors that ran from October 2007 to January 2010.
In sentencing, U.S. District Judge Morrison C. England Jr. noted that this was a classic “Ponzi scheme” in which Newbold regularly took money from investors and “used it to pay other investors, his wife, and his mortgage.” One victim who spoke at sentencing noted that Newbold was able to gain her trust, but in the end turned out to be “nothing more than a common thief.” Another victim who spoke at sentencing told the court that the financial hardships he suffered at Newbold’s hands played a role in ending his marriage.
“Brent Newbold lied not only to gain the trust of investors; he twisted the truth to use investor money for his personal expenses and conceal his scheme,” said FBI Special Agent in Charge Monica Miller of the Federal Bureau of Investigation's Sacramento field office. “Newbold's lies caused significant personal and financial hardship for his victims. Today's sentencing demonstrates to Newbold and would-be fraudsters that such lies have consequences. By working with partners such as IRS Criminal Investigation, the FBI continues its work to protect the investing public and uphold the integrity of the U.S. financial system.”
“Mr. Newbold raised money from investors through misrepresentations and false promises,” said Michael Batdorf, Special Agent in Charge, IRS Criminal Investigation. “Then, without authorization, he diverted investor funds to himself and others for his own personal benefit. This chain of events led the company into bankruptcy and to Mr. Newbold’s sentence today. Those who line their pockets with profits from these schemes should know they will not go undetected and will be held accountable for their actions.”
According to court documents, Newbold made a variety of misrepresentations to investors about the financial health of the company, including the company’s debt levels and how invested funds would be used. Based on Newbold’s claims, a corporate investor, Spence Enterprises, invested $2 million in Holy Cow.
Between July 2008 and January 2010, Newbold solicited 13 individual investors that were not disclosed to Spence Enterprises. Newbold falsely claimed that he was authorized to act on behalf of Holy Cow; that he owned Holy Cow; that he owned the majority of Holy Cow stock; and that Holy Cow was financially sound, stable and profitable. In some cases, Newbold provided his individual investors with false Holy Cow stock certificates, false Holy Cow purchase order reports, and corporate promissory notes.
In fact, Holy Cow bore a significant amount of debt, and Newbold continued to take additional debt related to Holy Cow. Newbold used investor funds for nonbusiness purposes, diverting it to himself and his wife, paying his mortgage, and paying previous investors. By December 2009, Spence Enterprises put Holy Cow into bankruptcy as a result of the unauthorized and undisclosed debt. The loss amount was over $2.9 million.
This case was the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation. Assistant United States Attorney Michael M. Beckwith prosecuted the case.