Eastern District of California
Press releases recorded for this federal judicial district.
Los Angeles and Sacramento Men Sentenced to Two Years in Prison for Trafficking in Counterfeit Credit CardsRead the Press Release
FRESNO, Calif. — Gevorg Meroyan, 35, of Los Angeles, was sentenced today by United States District Judge Lawrence J. O'Neill to two years in prison for conspiracy to traffic in counterfeit credit cards and credit card fraud, United States Attorney Benjamin B. Wagner announced.
On November 16, 2015, co-defendant David Manukyan, 39, of Sacramento, was sentenced by Judge O’Neill to serve one year and one day in prison.
Both defendants pleaded guilty in July 2015. According to court documents, Meroyan conspired from 2009 to 2011 to produce, use, and traffic in counterfeit credit cards from the Los Angeles area to Sacramento. In 2009, Meroyan and Manukyan were caught in Fresno with 42 counterfeit cards bearing false names and with computer and other electronic equipment that can be used to manufacture counterfeit credit cards. In 2011, Meroyan was arrested in Los Angeles after attempting to buy auto parts with a counterfeit credit card.
This case was the product of an investigation by the Federal Bureau of Investigation, Fresno County Sheriff, and California Highway Patrol. Assistant United States Attorney Matthew G. Morris prosecuted the case.
Meroyan was ordered to surrender to the Bureau of Prisons on February 8, 2016, to begin serving his sentence. Manukyan was previously ordered to surrender to the Bureau of Prisons on January 5, 2016, to begin his sentence.
Federal Jury Finds Placer County Women Guilty in Multimillion Dollar Mortgage Fraud SchemeRead the Press Release
SACRAMENTO, Calif. -- After a 16-day trial, a federal jury today found Vera Kuzmenko, 45, of Loomis, and Rachel Siders, 40, of Roseville, guilty of multiple counts of mail and wire fraud associated with their involvement in a mortgage fraud scheme that cost financial institutions over $16 million, United States Attorney Benjamin B. Wagner announced.
Vera Kuzmenko was also found guilty of witness tampering and money laundering associated with the scheme.
According to evidence presented at trial, from late 2006 through early 2008, the defendants engaged in a mortgage fraud scheme involving over 30 properties in the Sacramento area. The defendants were responsible for securing more than $30 million in residential mortgage loans on more than 30 homes purchased through straw buyers. Records introduced at trial showed Vera Kuzmenko received millions of dollars and Rachel Siders received hundreds of thousands of dollars.
Vera Kuzmenko, who had been a licensed real estate agent for part of the scheme, created fraudulent loan applications on behalf of the straw buyers. The loan applications contained materially false information as to the straw buyers’ income, employment, assets, and intent to occupy the residences. The loan paperwork also hid from lenders millions of dollars of payments that went to the defendants. Vera Kuzmenko also served as a straw-buyer herself. With respect to the witness tampering count, the evidence showed that after Kuzmenko learned the FBI was investigating her, she told various witnesses to lie to the FBI and blame a dead woman for the fraud.
Rachel Siders ran the Rocklin office of the escrow company used on the majority of the transactions. She helped funnel millions of dollars to the defendants, which was not disclosed to the lenders.
“Vera Kuzmenko was a major figure in a network of fraudsters responsible for a wave of mortgage fraud that hit the Sacramento area,” said U.S. Attorney Benjamin B. Wagner. “As the guilty verdicts in this case demonstrate, mortgage fraudsters who believe they can escape accountability for their crime by blaming others and offering false alibis are mistaken.”
“Vera Kuzmenko and her associates intentionally victimized their community, abusing trust to significantly damage the financial wellbeing of victims and negatively impact regional economy. This greed-fueled, multimillion dollar fraud scheme had a lasting, negative effect on the regional real estate market,” said Assistant Special Agent in Charge Manuel Alvarez of the FBI’s Sacramento field office. “We hope today’s verdict serves as a warning to would-be fraudsters that the FBI will aggressively pursue perpetrators of large, complex financial fraud to protect regional economies and ensure justice for their victims.”
“Mortgage fraud is an incredibly destructive crime that leaves many victims in its wake,” said IRS-Criminal Investigation Acting Special Agent in Charge, Andrew Toth. “The impact on homeowners and communities is devastating. While this verdict cannot reverse the damage caused by these defendants, it highlights the ongoing commitment of IRS-CI to hold accountable those involved in these types of crimes.”
This case is the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation. Assistant U.S. Attorneys Lee S. Bickley and Michael D. Anderson and Special U.S. Attorney David J. Ward are prosecuting the case.
The defendants are scheduled to be sentenced by United States District Judge John A. Mendez on March 15, 2016. Each defendant faces a maximum statutory penalty of 20 years in prison on each of their counts of conviction for wire and mail fraud. Vera Kuzmenko faces an additional 20 years for each count of conviction for witness tampering and money laundering. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
On October 20, 2015, Judge Mendez sentenced co-defendants Peter Kuzmenko, 37, of West Sacramento, to 19 years in prison; Aaron New, 41, of Sacramento, to 11 years and three months in prison; Nadia Kuzmenko, 36, formerly of Loomis, to eight years in prison; and Edward Shevtsov, 51, of North Highlands, to eight years in prison. They were found guilty on February 13, 2015, after a 21-day trial, of multiple counts of mail and wire fraud associated with the mortgage fraud scheme. In addition, Peter Kuzmenko, Edward Shevtsov, and Aaron New were found guilty of money laundering associated with the scheme, and Nadia Kuzmenko was found guilty of witness tampering.
U.S. Attorney Attends White House Summit Entitled “A Cycle of Incarceration” on the Disproportionate Impact on the Poor of High Fines and Fees in the Criminal Justice SystemRead the Press Release
SACRAMENTO, Calif. — United States Attorney Benjamin B. Wagner is pleased to be in attendance at a summit today hosted by the White House and the Department of Justice in Washington, D.C. called “A Cycle of Incarceration: Prison, Debt and Bail Practices.” This event was designed to bring public attention to the disproportionate impact that high fines and fees in the criminal justice system have on the poor. The White House Council of Economic Advisers also released an issue brief exploring the economic inefficiency of fines, fees and bail in particular situations as well as the disproportionate impact such sanctions can have on the poor.
U.S. Attorney Wagner stated, “The inability of many poor people to pay high fines, fees and bail for minor infractions can have disastrous consequences both for them and for society. For individuals, it can result in the loss of a driver's license, the loss of a job, increasing debt, incarceration and a criminal record. For society, it can lead to costly incarceration of many indigent persons for minor offenses. This conference is focused on identifying and reforming the complex web of practices within the criminal justice system that can trap the poor in a cycle of noncompliance and punishment, in order to create a fairer and more efficient justice system.”
Today’s event follows an event the Justice Department hosted on Wednesday that addressed the effect and fairness of fees and fines. The department convened judges, academics and practitioners to develop a research and policy agenda that will inform jurisdictions in their efforts to reform court practices.
Participants in the conference heard from judges, court administrators, academics, experts and others about the impact of excessive fines and fees in minor cases, and various efforts to reform justice systems, including in California. Three citizens described years of entanglement with the justice systems of Alabama, Michigan and Missouri, including suspended drivers licenses, lost jobs, incarceration and homelessness, all originating from unpaid fines for minor infractions.
Additional information about this issue can be found at http://go.usa.gov/cBahC.
Nevada City Woman Sentenced to over Five Years in Prison for Marijuana Cultivation and Structuring Currency TransactionsRead the Press Release
SACRAMENTO, Calif. — Patricia Jane Albright, 64, of Nevada City, was sentenced by United States District Judge Troy L. Nunley to five years and five months in prison for conspiring to manufacture marijuana, manufacturing marijuana, and structuring currency transactions to evade federal reporting requirements, United States Attorney Benjamin B. Wagner announced.
On July 21, 2015, Albright pleaded guilty to the charges. Albright’s son and co‑conspirator, Jordan Wirtz, 29, previously pleaded guilty to possession of a firearm in furtherance of a drug trafficking crime, for possessing a loaded Northern England 12 gauge shotgun and ammunition in his residence at the grow site. On February 26, 2015, Judge Nunley sentenced him to five years in prison.
According to court documents, between 2008 and September 2010, Albright and others manufactured marijuana on two properties she owned near Nevada City and Georgetown. Marijuana from Albright’s operation was regularly shipped out of state under fake names and addresses. At the time of her arrest on September 28, 2010, investigators found marijuana plants, cash, processed marijuana, and two firearms.
When Albright purchased the property near Georgetown in 2008 for growing marijuana, she structured 21 cash transactions at six different financial institutions over three days so she could avoid federal reporting requirements related to cash deposits.
This case was the product of an investigation by the Internal Revenue Service, Criminal Investigation; the U.S. Drug Enforcement Administration; the California Department of Justice; the Grass Valley Police Department, and the sheriff’s offices of Nevada County, Placer County, and El Dorado County. Assistant United States Attorneys Michael M. Beckwith and Justin Lee prosecuted the case.
During the course of the investigation which involved the execution of 16 search warrants in three different counties, law enforcement seized over 4,100 marijuana plants, over 200 pounds of processed marijuana, and numerous firearms. A number of the defendants were armed at the time of their arrest, and several of the defendants had prior felony convictions for narcotics offenses. One defendant was arrested in a marijuana grow with a firearm while on pretrial release from an earlier arrest. He was facing charges for manufacturing marijuana in Southern California in 2009. Documents and items found at a number of the search locations show hundreds of thousands of dollars in financial transactions, and the interstate shipment of cash and narcotics.
Jury Convicts Modesto Tri Counties Bank RobberRead the Press Release
FRESNO, Calif. — After a three–day trial, a federal jury found Lloyd George Kenney, 65, of San Jose, guilty today of armed bank robbery, using a firearm during a crime of violence, and of being felon in possession of a firearm, United States Attorney Benjamin B. Wagner announced.
According to evidence presented at trial, on the morning of May 25, 2012, Kenney robbed the Tri Counties Bank located inside the Raley’s grocery store at Roselle and Floyd Avenues, in Modesto. Kenney was armed with a semi-automatic handgun and was heavily disguised, wearing a hockey helmet, facemask, long black coat and gloves. After taking $2,872 from tellers at gunpoint, he fled on a bicycle into a neighborhood and rode to where he had parked a van earlier.
Within minutes of being alerted to the robbery, a Modesto police officer saw Kenney, who was still wearing the helmet, enter his van and begin to drive away. Officer Parsons pulled the van over and Kenney was taken into custody. During a search of the van, officers found cash the taken from the Tri Counties Bank, Kenney’s bike, a hockey helmet, a mask, a loaded Glock handgun and a loaded Browning handgun. While searching Kenney, officers found a police scanner set to channels used by the Modesto Police Department.
Court records reflect that Kenney had federal felony convictions in 1984 and 1985, as well as a felony conviction in San Mateo Superior Court in 1974.
This case is the product of an investigation by the Modesto Police Department and the Federal Bureau of Investigation. Assistant United States Attorneys Michael Frye and Mia Giacomazzi are prosecuting the case.
Kenney is scheduled to be sentenced by United States District Judge Anthony W. Ishii on March 14, 2016. Kenney faces a maximum statutory penalty of life in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Alaska Resident Sentenced to 7 Years in Prison for Drug Dealing and Money LaunderingRead the Press Release
SACRAMENTO, Calif. — Today, United States District Judge Troy L. Nunley sentenced DuWayne LeDoux, 55, of Kodiak, Alaska, to seven years in prison for possession with intent to distribute methamphetamine and conspiracy to structure cash deposits, United States Attorney Benjamin B. Wagner announced.
According to court documents, LeDoux enlisted Sacramento resident Jennifer MacDougal, 45, to obtain and ship methamphetamine and crack cocaine to LeDoux at various addresses in Kodiak and under various names, so that LeDoux could sell the drugs. LeDoux paid for the drugs by depositing cash into a Wells Fargo account held by MacDougal in amounts designed to avoid bank reporting requirements.
Kodiak, Alaska is on Kodiak Island off the southern coast of Alaska. The island has a total of approximately 14,000 residents, with approximately 6,000 of them in Kodiak.
Co-defendant MacDougal pleaded guilty in November 2012, and was sentenced to five years in prison.
This case is the product of an investigation by the Drug Enforcement Administration and the Internal Revenue Service’s Financial Crimes Task Force. Assistant United States Attorneys Jason Hitt and Jean M. Hobler are prosecuting the case.
Stockton Woman Sentenced to over 4 Years in Prison for Participation in Bank Fraud and Identity Theft Scheme Using Mail Stolen from Sutter County and Sacramento County Post OfficesRead the Press Release
SACRAMENTO, Calif. — U.S. District Judge Kimberly J. Mueller sentenced Breneth L. Chase, 44, of Stockton, today to four years and 10 months in prison for bank fraud, aggravated I.D. theft, and possession of counterfeit I.D. documents, United States Attorney Benjamin B. Wagner announced.
According to court documents, Chase and others obtained U.S. mail and postal keys stolen during burglaries of post offices in Sutter County and Sacramento County. She used the stolen mail to manufacture checks and identification documents to cash phony checks, apply for lines of credit, and make purchases at local department stores. According to court documents, Chase possessed over five different manufactured identifications including U.S. Military identifications and badges. Chase admitted that she possessed personal and financial information for numerous Sutter and Sacramento County residents.
San Francisco Division Inspector in Charge Rafael Nunez of the U.S. Postal Inspection Service stated: “Postal Inspectors work closely with the U.S. Attorney’s Office and our partners in law enforcement to arrest and prosecute those individuals responsible for thefts of mail, postal property and complex financial crimes committed against the public and the Post Office.”
This case was the product of an investigation of the United States Postal Inspection Service, Sutter County Sheriff's Office, Stockton Police Department, and Sutter Creek Police Department, with the assistance from the Sacramento County Sheriff's Office. Assistant United States Attorney Michelle Rodriguez prosecuted the case.
San Joaquin County Man Pleads Guilty to Attempting to Provide Material Support to ISILRead the Press Release
SACRAMENTO, Calif. — Nicholas Michael Teausant, 22, of Acampo, pleaded guilty today to attempting to provide material support or resources to a foreign terrorist organization, announced Assistant Attorney General for National Security John P. Carlin and United States Attorney Benjamin B. Wagner.
According to court documents, on March 17, 2014, Teausant was arrested near the Canadian border en route to Canada with the intent of continuing to travel to Syria to join the Islamic State of Iraq and the Levant (ISIL), a foreign terrorist organization. On March 26, 2014, Teausant was indicted on one count of attempting to provide material support or resources to a terrorist organization. He pleaded guilty to the single count in the indictment without a plea agreement. Teausant is scheduled to be sentenced by United States District Judge John A. Mendez on March 8, 2016.
“Nicholas Michael Teausant attempted to travel overseas to join ISIL and to provide material support to the terrorist organization,” said Assistant Attorney General Carlin. “The National Security Division’s highest priority is counterterrorism, and we are committed to stemming the flow of foreign fighters abroad and holding accountable those who attempt to provide material support to designated foreign terrorist organizations.”
“This case, like others in communities across the United States and around the world, is an example of how a young person from any place and any background might make the terrible decision to try and become part of a terrorist organization,” U.S. Attorney Wagner stated. “Fortunately, the FBI intervened in this case before any harm could be inflicted upon innocent persons. We hope that this case will be a reminder to us all to stay vigilant and involved in the lives of our youth, and in particular with respect to the dangerous influences they may be subject to on the Internet where these organizations are very active.”
This case was the product of an investigation by the Federal Bureau of Investigation, the Modesto Police Department, and the San Joaquin Sheriff’s Office, who are members of the Modesto/Stockton Joint Terrorism Task Force, with significant assistance from U.S. Customs and Border Protection. Assistant United States Attorneys Jean M. Hobler and Jason Hitt and Trial Attorney Andrew Sigler of the National Security Division’s Counterterrorism Section are prosecuting the case.
Teausant faces a maximum statutory penalty of 15 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.
California Man Pleads Guilty to Attempting to Provide Material Support to ISILRead the Press Release
Nicholas Michael Teausant, 22, of Acampo, California, pleaded guilty today to attempting to provide material support or resources to a foreign terrorist organization, announced Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Benjamin B. Wagner of the Eastern District of California.
According to court documents, on March 17, 2014, Teausant was arrested en route to Canada, near the border, with the intent of continuing to travel to Syria to join the Islamic State of Iraq and the Levant (ISIL), a foreign terrorist organization. On March 26, 2014, Teausant was indicted on one count of attempting to provide material support or resources to a terrorist organization. He pleaded guilty to the single count in the indictment without a plea agreement.
“Nicholas Michael Teausant attempted to travel overseas to join ISIL and to provide material support to the terrorist organization,” said Assistant Attorney General Carlin. “The National Security Division’s highest priority is counterterrorism, and we are committed to stemming the flow of foreign fighters abroad and holding accountable those who attempt to provide material support to designated foreign terrorist organizations.”
“This case, like others in communities across the United States and around the world, is an example of how a young person from any place and any background might make the terrible decision to try and become part of a terrorist organization,” said U.S. Attorney Wagner. “Fortunately, the FBI intervened in this case before any harm could be inflicted upon innocent persons. We hope that this case will be a reminder to us all to stay vigilant and involved in the lives of our youth, and in particular with respect to the dangerous influences they may be subject to on the Internet where these organizations are very active.”
Teausant is scheduled to be sentenced by U.S. District Judge John A. Mendez of the Eastern District of California on March 8, 2016. Teausant faces a maximum statutory penalty of 15 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 the product of an investigation by the FBI, the Modesto, California, Police Department and the San Joaquin, California, Sheriff’s Office, who are members of the Modesto/Stockton Joint Terrorism Task Force, with significant assistance from U.S. Customs and Border Protection. The case is being prosecuted by Assistant U.S. Attorneys Jean M. Hobler and Jason Hitt of the Eastern District of California and Trial Attorney Andrew Sigler of the National Security Division’s Counterterrorism Section.
Serial Armed Robber Sentenced to 30 Years in PrisonRead the Press Release
FRESNO, Calif. — Rozelle Summerise, 39, of Fresno, was sentenced today by United States District Judge Anthony W. Ishii to 30 years in prison for nine armed robberies, United States Attorney Benjamin B. Wagner announced.
According to court documents, during a one-month period in the fall of 2012, Summerise committed armed robberies of Kmart in Clovis, Check N’ Go in Madera, and the following businesses in Fresno: CVS, Check N’ Go (twice), Foods Co., Crossland Economy Motel, Arco Minimart, and Motel 6. A search of Summerise’s residence uncovered several items used in the robberies including a revolver and a wig.
ATF Special Agent in Charge Jill A. Snyder stated, “ATF remains committed to reducing violent crime in our community by targeting those who use firearms to potentially harm our citizens. We will continue to work closely with our partners at the Fresno Police Department and the US Attorney’s Office to remove violent offenders from the community.”
Fresno Police Chief Jerry Dyer stated: “Removing Summerise from society before he killed one of his robbery victims was a top priority for our agency and could not have been done without the incredible teamwork of local law enforcement, ATF and the U.S. Attorney’s Office.”
This case was the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and Fresno Police Department. This was a collaborative effort as part of Project Safe Neighborhoods, a joint effort among local, state and federal law enforcement authorities aimed at reducing gang and gun violence. Assistant United States Attorneys Kimberly A. Sanchez and Melanie Alsworth prosecuted the case.
Patterson Man Sentenced for Wells Fargo Bank RobberyRead the Press Release
FRESNO, Calif. — Jose Valadez Jr., 35, of Patterson, was sentenced today to nearly 10 years in prison today for an armed bank robbery, United States Attorney Benjamin B. Wagner announced.
United States District Judge Anthony W. Ishii sentenced Valadez to two years and 10 months in prison for armed bank robbery and a consecutive sentence of seven years in prison for brandishing a firearm during a crime of violence.
According to court documents, on June 19, 2014, Juan Carlos Reyes, 25, of Tracy, and Valadez robbed the Wells Fargo Bank located inside the Save Mart Supermarket in Patterson. Customers and employees were held at gunpoint as Reyes instructed tellers to “open the drawers” and demanded that money be placed in a bag. Reyes and Valadez fled the area separately with law enforcement in pursuit. Valadez was arrested shortly thereafter and assisted officers in locating the firearm and clothing he discarded after fleeing the scene of the robbery.
Officers located a firearm, clothing and the money stolen from the bank in another location. DNA evidence from the clothing provided law enforcement with Reyes’ identity. Reyes was arrested on October 11, 2014, in Manteca. Reyes pleaded guilty and was sentenced on October 19, 2015, to two years and six months in prison for armed bank robbery, and a consecutive sentence of seven years in prison for brandishing a firearm during a crime of violence.
This case was the product of an investigation by the Federal Bureau of Investigation and the Stanislaus County Sheriff’s Office. Assistant United States Attorney Melanie L. Alsworth prosecuted the case.
Ohio Man Pleads Guilty to Structuring More Than $200,000 in Proceeds of Drug TraffickingRead the Press Release
FRESNO, Calif. -- Jeremy Michael Murphy, 26, of Monroe, Ohio, pleaded guilty today to one count of conspiring to structure cash transactions, United States Attorney Benjamin B. Wagner announced.
According to court documents, Murphy and seven co-defendants opened and maintained bank accounts for the purpose of funneling cash proceeds of marijuana that had been shipped from Fresno and other cities in California and sold in Florida and other states. Murphy withdrew more than $240,000 in cash proceeds of this marijuana trafficking from his bank accounts in amounts of $10,000 or less to prevent the banks from filing Currency Transaction Reports, which are prepared for any transaction over $10,000 in cash. In total, Murphy and his co-conspirators structured more than $7.5 million of proceeds of drug trafficking.
This case is being brought as part of Operation Footprint, a nationwide law enforcement initiative led by the U.S. Attorney’s Offices, the Internal Revenue Service- Criminal Investigation, the Drug Enforcement Administration, and the United States Postal Inspection Service. Operation Footprint targets large drug trafficking organizations by identifying the transfer of drug proceeds through financial institutions, bulk cash smuggling and other forms of money transfers. Operation Footprint is focused on bringing criminal charges based on Bank Secrecy Act violations in addition to violations of the Controlled Substances Act and the Money Laundering Control Act.
This case is also the product of the Organized Crime Drug Enforcement Task Force (OCDETF), a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies. Assistant U.S. Attorneys Grant B. Rabenn, Patrick R. Delahunty, and Jeffrey Spivak are prosecuting the case.
On February 11, 2015, Chad Riffle, 23, of Citrus Springs, Florida, was sentenced to five years in prison after pleading guilty to the structuring conspiracy. Peter Capodieci, 24, of Crystal River, Florida; Miguel Gonzalez, 32, of Fresno; and Bree Benson, 21, of Citrus Springs, Florida, have pleaded guilty to conspiring to structure financial transactions and are awaiting sentencing. Charges are pending against Brandon Michael Thomas, 25, of Fresno, California. Ashley Starling Thomas, 28, of Lake Charles, Louisiana; and Aseel Al-Saber, 26, of Orange County, California, are scheduled for trial on April 26, 2016. The charges against Brandon Thomas, Ashley Starling Thomas, and Al-Saber are only allegations; they are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Murphy is scheduled to be sentenced by United States District Judge Lawrence J. O’Neill on March 7, 2016. The maximum statutory penalty for conspiracy to structure is 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.
Placer County Man Sentenced to over 4 Years in Prison for Multimillion Dollar Loan FraudRead the Press Release
SACRAMENTO, Calif. — United States District Judge Morrison C. England Jr. sentenced Ryan Costo, 40, of Roseville, to four years and three months in prison for bank fraud in a scheme to defraud lenders, United States Attorney Benjamin B. Wagner announced.
According to court documents, Costo overstated his income and financial assets in connection with a $1.35 million loan from Bank of America related to the acquisition of a classic aircraft. Costo not only made false statements about his income and various bank and stock account balances on the loan application, but also caused various false and fraudulent account statements and tax returns to be given to the Bank of America in order to procure the loan. Costo made various false representations and submitted false documents to obtain three other loans: a $1.95 million loan from CitiMortgage Inc. related to a Granite Bay residence; a $3 million loan from Washington Mutual Bank, now Chase, related to another Granite Bay residence, and a $267,000 loan from San Diego Private Bank. Costo pleaded guilty to bank fraud on October 3, 2013.
This case was the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorney Shelley D. Weger prosecuted the case.
Final Defendant Pleads Guilty in United Auburn Indian Community Fraud SchemeRead the Press Release
SACRAMENTO, Calif. — Darrell Patrick Hinz, 48, of Cameron Park, pleaded guilty today to conspiring to commit mail and wire fraud, conspiring to launder monetary instruments, and filing a false tax return, United States Attorney Benjamin B. Wagner announced.
In August 2012, Hinz, Gregory Scott Baker, 48, of Newcastle, and Bart Wayne Volen, 54, of San Diego and Haiku, Hawaii, were charged with conspiring to commit mail and wire fraud and various money laundering charges as part of a scheme to defraud the United Auburn Indian Community (UAIC) of more than $17 million. In April 2013, a superseding indictment additionally charged Volen and Hinz with filing false tax returns in 2006 and 2007, and charged Baker with filing false tax returns from 2006 through 2009 in connection with the fraud.
According to court documents, between October 2006 and December 2007, Baker, Volen and Hinz executed a scheme to defraud the UAIC. In October 2006, the UAIC hired Volen, a developer, to finish construction on four tribal buildings — a school, a community center, and administrative offices – on UAIC-owned property in Auburn. Volen submitted inflated invoices to the UAIC knowing that Baker and Hinz, both UAIC employees, would approve them based on a kickback agreement the three men had reached earlier. Volen supported his invoices with inflated cost proposals from his general contractor’s company, Sequoia Pacific Builders (SPB), and, at times, inflated invoices from various subcontractors. At Volen’s direction, over 160 SPB cost proposals were fraudulently inflated. Volen’s work on the Indian Hills Office Project began in late 2006 and ended in early 2008. The inflated invoices nearly doubled the cost of the project.
Baker was the UAIC tribal administrator. His duties included overseeing the Indian Hills Office Project. Hinz was a contract employee hired to manage the construction project. Both Baker and Hinz were required to approve all invoices before the UAIC tribal council would sign checks to pay for work done on the project. During the scheme to defraud the tribe, both Baker and Hinz engaged in conduct to insure that the tribal council would pay for the inflated and fraudulent invoices submitted by Volen. They were later paid by Volen for their participation in the scheme. According to court documents, Baker, Volen and Hinz ultimately stole over $17 million from the UAIC through their inflated invoice scheme.
According to court documents, in order to disguise the proceeds of the fraud, Hinz sent a number of fraudulent invoices to Volen for consulting work he claimed he did for Volen. In response, Volen sent Hinz 29 checks, totaling approximately $7.5 million over the course of 10 months. In an effort to further conceal the movement of the fraud proceeds, Volen and Hinz distributed the proceeds between three different companies owned by Hinz.
According to court documents, Hinz then paid Baker indirectly for his assistance in the scheme, using money he received from Volen. Hinz paid for a $12,500 weekend trip he and Baker took in Hawaii and certain obligations owed by Baker. Hinz also purchased a number of things for Baker, including various assets, personal property — a $70,000 BMW and a mobile home — several investment properties and a vacation condominium in South Lake Tahoe, and improvements to property, such as a $54,000 pool at his primary residence. All of these transactions were conducted for the purpose of concealing and disguising the proceeds from the UAIC fraud. During the course of the scheme, Baker received over $1.4 million.
According to court documents, Hinz filed tax returns containing a Schedule C in which he failed to report the income he derived from the scheme. As a result, the United States suffered a tax loss of over $830,000.
This case is the product of an investigation by the Internal Revenue Service, Criminal Investigation. Assistant United States Attorneys Michael M. Beckwith, John K. Vincent and Kevin C. Khasigian are prosecuting the case.
Hinz is scheduled to be sentenced by U.S. District Judge Troy L. Nunley on February 18, 2016. Baker pleaded guilty to similar charges in this case on November 5, 2015, and is scheduled to be sentenced on March 17, 2016. Co-defendant Volen pleaded guilty to similar charges in this case on June 12, 2014, and is scheduled to be sentenced on April 28, 2016. Chris W. Eatough, the owner of Sequoia Pacific Builders, pleaded guilty to a felony related to this case on June 20, 2013, and is scheduled to be sentenced on March 17, 2016 (case number 2:13-cr-214 TLN). Hinz, Baker and Volen have agreed to pay at least $17 million in restitution to the UAIC.
The defendants face a maximum sentence of 20 years in prison, a $250,000 fine, or twice the value of the gross gain or loss, and a three-year term of supervised release for conspiring to commit mail and wire fraud. The maximum statutory penalty for conspiring to launder monetary instruments is 20 years in prison, a $500,000 fine or twice the value of the laundered money, and a three-year term of supervised release. The maximum statutory penalty for the tax violation is three years in prison, a $100,000 fine, or a fine of twice the value of the gross gain or loss, and a one-year term of supervised release. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Bakersfield, California, Police Narcotics Detective Charged with Bribery, Drug Trafficking, Obstruction and Filing False Tax ReturnsRead the Press Release
Damacio Diaz, 43, of McFarland, California, a detective with the Bakersfield, California, Police Department (BPD), was arrested today, charged with abusing his position of trust as a police detective when he conspired with and assisted a narcotics dealer in the operation of the dealer’s drug organization, announced U.S. Attorney Benjamin B. Wagner of the Eastern District of California, Special Agent in Charge Monica M. Miller of the FBI’s Sacramento Division, DEA Special Agent in Charge John J. Martin, Acting Special Agent in Charge Thomas McMahon of the Internal Revenue Service-Criminal Investigation (IRS-CI) and Bakersfield Police Chief Greg Williamson. The charges are contained in a 16-count indictment returned by a federal grand jury yesterday.
The indictment charges that Diaz, in exchange for bribes from the dealer, provided the dealer with intelligence on law enforcement practices and activities, disclosed the names and identities of police informants, tipped the dealer off as to police investigations and attempted to provide the dealer protection from search, seizure, arrest and prosecution. The indictment also charges Diaz with bribery, retaining seized narcotics on multiple occasions for his own unlawful gain, disclosing contents of a wiretap investigation and two counts of filing false tax returns.
Diaz has been on paid administrative leave from the BPD since this investigation was initiated. He is scheduled to be arraigned today before U.S. Magistrate Judge Jennifer L. Thurston of the Eastern District of California in Bakersfield at 2:30 p.m.
“When a police officer misuses his badge to commit crimes for personal profit, it is the ultimate betrayal of public trust,” said U.S. Attorney Wagner. “While it is a sad day for the Bakersfield Police Department, the department should be proud of the outstanding work it has done, together with the FBI, DEA, and IRS-CI, effectively investigating this case over the last few months.”
“No one is above the law,” said Special Agent in Charge Miller. “The alleged criminal activity put law enforcement officers at grave risk and significantly undermines public trust in law enforcement. The FBI is committed to working with its enforcement partners to root out officers who have abused their trusted role, and we thank the Bakersfield Police Department, DEA and IRS for their assistance with this extensive investigation.”
“The criminal behavior alleged in this case is reprehensible,” said Special Agent in Charge Martin. “Officers take an oath to protect, serve and uphold the law. Actions like those alleged in the indictment shatter that promise and threaten the safety of fellow officers and the communities we are sworn to protect. DEA is proud to partner with the many law enforcement officers and agencies that won’t stand for criminal conduct within the ranks.”
"Law enforcement officers are held to a higher standard”, said Acting Special Agent in Charge McMahon. “Having knowledge of the laws, there is an even greater expectation to follow those laws. When individuals working in an official capacity violate the trust of their communities by abusing that power, they undermine the hard work of the entire law enforcement community.”
“I am deeply disappointed by the indictment and arrest of Bakersfield Police Detective Damacio Diaz,” said Chief Williamson. “The behavior and criminal activity stated in the indictment is not reflective of the commitment and awesome public service the over 500 employees of the Bakersfield Police Department provide to our community on a consistent basis. Detectives from the department’s investigative and internal administrative divisions have worked side by side with the FBI and the U.S. Attorney’s Office during the entirety of this investigation. I am proud of their work and diligence in first bringing this case forward and seeing it through to completion.”
According to count one of the indictment, from April 18, 2012, to Feb. 20, 2015, Diaz conspired with a narcotics dealer to distribute methamphetamine. Counts two through four charge Diaz with accepting over $5,000 in bribes in each calendar year of 2012, 2013 and 2014 in return for being influenced and rewarded in connection with his official acts as a BPD police detective. Counts five through 13 charge Diaz with possession with intent to distribute methamphetamine, wherein Diaz retained methamphetamine for his own personal gain that came into his care and control in the course of his duties as a BPD narcotics detective. Count 14 charges Diaz with the intentional disclosure of wiretap information in order to obstruct, impede or interfere with a criminal investigation. The indictment also alleges that Diaz filed false tax returns for tax years 2012 and 2013.
This case is the product of an investigation by the FBI, DEA, IRS-CI and the BPD. Assistant U.S. Attorneys Brian K. Delaney and Angela Scott of the Eastern District of California are prosecuting the case.
If convicted of the charges in the indictment, Diaz faces a maximum statutory penalty of life in prison for the conspiracy, 10 years in prison for each count of bribery, 20 years in prison to life for possession of methamphetamine with intent to distribute, five years in prison for each count of intentional disclosure of wiretap information, and three years in prison for each count of making a false income tax return. 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 Police Narcotics Detective Charged with Bribery, Drug Trafficking, Obstruction, and Filing False Tax ReturnsRead the Press Release
BAKERSFIELD, Calif. — Damacio Diaz, 43, of McFarland, a detective with the Bakersfield Police Department (BPD) was arrested today, charged with abusing his position of trust as a police detective when he conspired with and assisted a narcotics dealer in the operation of the dealer’s drug organization, announced United States Attorney Benjamin B. Wagner, FBI Special Agent in Charge Monica M. Miller, DEA Special Agent in Charge John J. Martin, IRS-CI Acting Special Agent in Charge Thomas McMahon, and Bakersfield Police Chief Greg Williamson. The charges are contained in a 16-count indictment returned by a federal grand jury yesterday.
The indictment charges that Diaz, in exchange for bribes from the dealer, provided the dealer with intelligence on law enforcement practices and activities, disclosed the names and identities of police informants, tipped the dealer off as to police investigations, and attempted to provide the dealer protection from search, seizure, arrest and prosecution. The indictment also charges Diaz with bribery, retaining seized narcotics on multiple occasions for his own unlawful gain, disclosing contents of a wiretap investigation, and two counts of filing false tax returns.
Detective Diaz has been on paid administrative leave from the Bakersfield Police Department since this investigation was initiated. He is scheduled to be arraigned today at 2:30 p.m. in Bakersfield before U.S. Magistrate Judge Jennifer L. Thurston.
U.S. Attorney Wagner stated: “When a police officer misuses his badge to commit crimes for personal profit, it is the ultimate betrayal of public trust. While it is a sad day for the Bakersfield Police Department, the department should be proud of the outstanding work it has done, together with the FBI, DEA, and IRS-CI, effectively investigating this case over the last few months.”
“No one is above the law. The alleged criminal activity put law enforcement officers at grave risk and significantly undermines public trust in law enforcement,” said Special Agent in Charge Monica M. Miller of the Federal Bureau of Investigation, Sacramento Field Office. “The FBI is committed to working with its enforcement partners to root out officers who have abused their trusted role, and we thank the Bakersfield Police Department, DEA, and IRS for their assistance with this extensive investigation.”
DEA Special Agent in Charge John J. Martin stated, “The criminal behavior alleged in this case is reprehensible. Officers take an oath to protect, serve and uphold the law. Actions like those alleged in the indictment shatter that promise and threaten the safety of fellow officers and the communities we are sworn to protect. DEA is proud to partner with the many law enforcement officers and agencies that won’t stand for criminal conduct within the ranks.”
"Law enforcement officers are held to a higher standard,” said Acting Special Agent in Charge Thomas McMahon, IRS Criminal Investigation. “Having knowledge of the laws, there is an even greater expectation to follow those laws. When individuals working in an official capacity violate the trust of their communities by abusing that power, they undermine the hard work of the entire law enforcement community.”
“I am deeply disappointed by the indictment and arrest of Bakersfield Police Detective Damacio Diaz,” said Bakersfield police Chief Greg Williamson. “The behavior and criminal activity stated in the indictment is not reflective of the commitment and awesome public service the over 500 employees of the Bakersfield Police Department provide to our community on a consistent basis. Detectives from the department’s investigative and internal administrative divisions have worked side by side with the FBI and the U.S. Attorney’s office during the entirety of this investigation. I am proud of their work and diligence in first bringing this case forward and seeing it through to completion.”
According to count one of the indictment, from April 18, 2012, to February 20, 2015, Diaz conspired with a narcotics dealer to distribute methamphetamine. Counts two through four charge Diaz with accepting over $5,000 in bribes in each calendar year of 2012, 2013 and 2014 in return for being influenced and rewarded in connection with his official acts as a BPD police detective. Counts five through 13 charge Diaz with possession with intent to distribute methamphetamine, wherein, Diaz retained methamphetamine for his own personal gain that came into his care and control in the course of his duties as a BPD narcotics detective. Count 14 charges Diaz with the intentional disclosure of wiretap information in order to obstruct, impede or interfere with a criminal investigation. The indictment also alleges that Diaz filed false tax returns for tax years 2012 and 2013.
This case is the product of an investigation by the Federal Bureau of Investigation, the Drug Enforcement Administration, the Internal Revenue Service-Criminal Investigation, and the Bakersfield Police Department. Assistant United States Attorneys Brian K. Delaney and Angela Scott are prosecuting the case.
If convicted of the charges in the indictment, Diaz faces a maximum statutory penalty of life in prison for the conspiracy, 10 years in prison for each count of bribery, 20 years in prison to life for possession of methamphetamine with intent to distribute, five years in prison for each count of intentional disclosure of wiretap information, and three years in prison for each count of making a false income tax return. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Sacramento Man Charged with Conspiracy to Produce Child Pornography Using Children in the PhilippinesRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a four-count indictment today against Michael Carey Clemans, 55, of Sacramento, charging him with a conspiracy to produce child pornography, production and receipt of child pornography, and the buying of children, United States Attorney Benjamin B. Wagner announced.
According to court documents, beginning in June 2014, Clemans conspired with a woman in the Philippines to produce child pornography. During most of the conspiracy, Clemans resided in Bangkok, Thailand, where he worked as an airline pilot. In April 2015, Clemans returned to his Sacramento residence and continued his overseas conspiracy using his Yahoo! account to chat online with the Filipino woman. In these chats, Clemans discussed various strategies to obtain minor females to engage in sexually explicit conduct. They discussed details of the photo shoots, with Clemans asking for additional photos and expressing his desire to have sex with girls as young as eight years old. Over the course of the conspiracy, Clemans paid thousands of dollars to the woman so she would orchestrate sexually explicit photo shoots of underage girls, buy photographic equipment, and rent discrete photo shoot locations, among other things. The government alleges that on multiple occasions, payments were made to the guardians of children in the Philippines in exchange for temporary custody of the children so that the child pornography could be produced. Clemans was arrested by federal authorities in July 2015.
This case is the product of an investigation by the Federal Bureau of Investigation and the Philippine National Bureau of Investigation. Special Assistant United States Attorney Josh F. Sigal is prosecuting the case.
If convicted, Clemans faces a maximum statutory penalty of life in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Los Banos Woman Indicted for Stealing Social Security BenefitsRead the Press Release
FRESNO, Calif. — Alice Pigg, 63, of Los Banos, was indicted yesterday by a federal grand jury charging her with stealing benefits paid by the United States Social Security Administration (SSA) and concealing material information from the SSA to obtain benefits, United States Attorney Benjamin B. Wagner announced.
According to the indictment, from December 2008 to June 2014, Pigg stole money paid by the SSA by failing to disclose, despite multiple inquiries from the SSA, that she lived with her husband and shared financial resources with her husband. Pigg shared a bank account that received her husband’s salary, which was at least $140,000 a year during the time period in which Pigg stole money from the SSA, and which later received his pension benefit payments. As a result, Pigg obtained SSA benefits to which she was otherwise not entitled and used them for her own personal expenses.
This case is the product of an investigation by the U.S. Social Security Administration, Office of Inspector General. Assistant United States Attorney Patrick R. Delahunty is prosecuting the case.
If convicted of stealing public money, Pigg faces a maximum statutory penalty of 10 years in prison and a $250,000 fine. If convicted of concealing material information for use in obtaining SSA benefit payments, Pigg 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 defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Mexican National Pleads Guilty to Marijuana Cultivation Operation in Sierra National ForestRead the Press Release
FRESNO, Calif. —Juan Pedro Jimenez, 39, of Ensenada, Mexico, entered a guilty plea today to conspiring to manufacture, distribute and possess with intent to distribute, manufacturing, and possessing 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. In pleading guilty, Jimenez agreed to reimburse the U.S. Forest Service for the cost of cleaning up the site.
Jimenez is scheduled for sentencing on February 1, 2016, before U.S. District Judge Lawrence J. O’Neill. He faces a mandatory minimum statutory penalty of five years in prison, a maximum of 40 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.
This case is the product of an investigation by the U.S. Forest Service and Mariposa County Sheriff’s Office. Assistant U.S. Attorney Karen Escobar is prosecuting the case.
Jury Finds Redding Interstate Marijuana Trafficker Guilty on All CountsRead the Press Release
SACRAMENTO, Calif. — After a five–day trial, a federal jury today found John James Kash, 52, of Redding, guilty of three counts of conspiracy to distribute marijuana, manufacturing marijuana, and conspiracy to launder money, United States Attorney Benjamin B. Wagner announced. The trial was held before United States District Judge Kimberly J. Mueller.
According to evidence presented at trial, in May 2013, Kash and his three business partners shipped approximately $700,000 worth of marijuana from Benicia, California to the Pittsburgh, Pennsylvania area. Law enforcement authorities tracked the shipment from California to Pennsylvania and watched Kash and his business partners collect the shipment from the freight company and deliver it to a warehouse outside of Pittsburgh. Authorities arrested Kash and his three co-conspirators at the warehouse. That same day, authorities executed search warrants at six separate locations associated with Kash and his business partners seizing over $1 million worth of marijuana and more than $150,000 in cash.
Three months later, after Kash and his business partners had been released from custody in Pennsylvania, law enforcement authorities executed multiple search warrants at a warehouse and residences in and around Redding. Authorities found Kash living inside a warehouse that had been converted into an active marijuana cultivation operation. Authorities seized approximately 468 growing marijuana plants from the warehouse. Meanwhile, authorities searched the residence of Kash’s co-conspirators and found processed, packaged marijuana ready for distribution as well as pay/owe ledgers reflecting marijuana cultivation and sales and several firearms.
This case was the product of an investigation by the Internal Revenue Service – Criminal Investigation, Sacramento Police Department, Pennsylvania State Police, Utah Highway Patrol, and the U.S. Drug Enforcement Administration. Assistant United States Attorneys Michele Beckwith, Justin Lee, and Christiaan Highsmith are prosecuting the case.
Kash is in custody pending sentencing. Co-defendants Glen Meyers, Aimee Burgess, and James Massery have all pleaded guilty and are in custody.
Kash is scheduled to be sentenced by Judge Mueller on February 3, 2016. Kash faces a maximum sentence of 40 years in prison and a $5 million fine on the conspiracy to distribute marijuana charge and on the manufacture of marijuana change, and 20 years in prison and a $500,000 fine or twice the value of the funds involved in the money laundering offense. 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.
Bakersfield Resident Pleads Guilty to Laser Strike of Sheriff’s HelicopterRead the Press Release
FRESNO, Calif. —Jose Javier Rosas, 62, of Bakersfield, entered a guilty plea today to aiming the beam of a laser pointer at Air-1, a Kern County Sheriff’s Office helicopter, United States Attorney Benjamin B. Wagner announced.
In pleading guilty, Rosas acknowledged that at the beginning of this year he 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 disengage from a robbery investigation.
Reports of laser attacks have increased dramatically in recent years as powerful laser devices have become more affordable and widely available to the public. In 2014, there were 3,894 reports of incidents involving laser strikes on aircraft. This year, there have been 5,530 laser incidents reported in the United States through October 23, 2015 (or more than 18 per day). In the Eastern District of California, which encompasses 34 counties, including Kern County, there were 150 reported incidents in 2014. This year, in the Eastern District of California, Bakersfield has the highest number of reported laser incidents. Lasers can completely incapacitate pilots who are trying to fly safely to their destination, endangering their crew members, passengers and people on the ground.
Rosas is scheduled for sentencing on February 1, 2016, before U.S. District Judge Lawrence J. O’Neill. Rosas faces a maximum prison term of five years and a fine of up to $250,000. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
This case is the product of an investigation by the Federal Bureau of Investigation, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and Kern County Sheriff’s Office. Assistant U.S. Attorney Karen A. Escobar is prosecuting this case.
Sacramento Man Sentenced to 15 Years in Prison for Child Pornography OffensesRead the Press Release
SACRAMENTO, Calif. — Daniel L. Bonnett, 40, of Sacramento, was sentenced today by United States District Judge John A. Mendez to 15 years in prison, to be followed by 30 years of supervised release, United States Attorney Benjamin B. Wagner announced.
Bonnett pleaded guilty on February 10, 2015. According to court documents, between January 27, 2013, and February 14, 2013, Bonnett sent and received images depicting the sexual exploitation of children over peer-to-peer file sharing networks and by using other Internet applications. When he was arrested, he had multiple computers with thousands of images and videos of child pornography in each. When sentencing Bonnett, Judge Mendez observed that the combination of prison time and supervision will result in Bonnett effectively spending the rest of his life under observation, which Judge Mendez observed was necessary to protect the public from future crimes by Bonnett.
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 Matthew Morris is prosecuting 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.
Oroville Man Pleads Guilty to Aggravated Identity Theft While on Federal Supervised ReleaseRead the Press Release
SACRAMENTO, Calif. — Melvin Lee Gregory, 32, of Oroville, pleaded guilty on Tuesday to aggravated identity theft and violation the conditions of supervised release, United States Attorney Benjamin B. Wagner announced.
According to court documents, on April 2, 2015, Gregory was released from federal prison after serving a four-year sentence for a previous conviction. Between April 2, 2015, and August 22, 2015, while on probation, Gregory opened a bank account and deposited several forged checks. On August 22, 2015, Gregory was observed attempting to break into and steal U.S. Mail from a Roseville mailbox, and minutes later he successfully stole U.S. Mail from a Rocklin mailbox. When Gregory was arrested by Rocklin Police, he was in possession of stolen U.S. Mail, burglary tools, and stolen identification documents.
This case is the product of an investigation of the United States Postal Inspection Service and the Rocklin Police Department, with the assistance of the United States Probation Office in the Eastern District of California. Assistant United States Attorney Michelle Rodriguez is prosecuting the case.
Gregory is scheduled to be sentenced by United States District Judge John A. Mendez on February 23, 2016. Gregory faces at least two years in prison for his aggravated identity theft conviction and up to an additional year for his violation of conditions of federal release. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Fresno Man Found Guilty of Filing False Liens on Federal Bankruptcy JudgesRead the Press Release
FRESNO, Calif. — After a one-day bench trial, Barry Halajian, 56, of Fresno, was found guilty of two counts of filing false liens on federal bankruptcy judges, United States Attorney Benjamin B. Wagner announced.
The District and Magistrate Judges in the Eastern District of California were recused and U.S. District Judge Stanley A. Bastian from the Eastern District of Washington heard the case. Halajian waived his right to a jury trial, and after hearing the evidence, Judge Bastian returned his verdict late Tuesday afternoon.
According to court documents and evidence presented at trial, in 2010, Halajian initiated a Chapter 7 bankruptcy proceeding in the U.S. Bankruptcy Court in Fresno. Two years later, he initiated a Chapter 9 bankruptcy proceeding in the same court. On June 29, 2012, the Chapter 9 bankruptcy was dismissed. On July 17, 2012, Halajian filed with the California Secretary of State a series of liens on the personal property of two federal bankruptcy judges in the Eastern District of California, listing them as debtors and himself as the secured party
“Filing bogus liens against federal officials for purposes of harassment is a crime,” said U.S. Attorney Wagner. “Those who commit it are asking to be prosecuted.”
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorneys Patrick Delahunty and Duce Rice are prosecuting the case.
Halajian will be scheduled for sentencing by Judge Bastian in February or March of 2016. Halajian faces a maximum statutory penalty on each count of 10 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Six Tulare County Residents Indicted on Drug Trafficking and Firearms ChargesRead the Press Release
FRESNO, Calif. — A federal grand jury returned a 20-count indictment today against Rudolfo Delgadillo, 35, of Woodlake; Alejandro Zavala, 22, of Cutler; and Fabian Magana, 24, of Orosi, charging them with conspiracy to distribute and possess with intent to distribute methamphetamine and various other drug trafficking and firearms offenses. The grand jury also returned a separate eight-count indictment against Josh Soto, 34, of Salinas Valley Prison; Desarae Granillo, 22, and Salina Granillo, 24, both of Visalia, charging them with conspiring to distribute methamphetamine, distribution of methamphetamine and possession with intent to distribute methamphetamine, United States Attorney Benjamin B. Wagner announced.
The cases are the product of an investigation of the Federal Bureau of Investigation, the United States Postal Inspector Service, California Department of Justice Special Operations Unit, the Tulare County Sheriff’s Office, the Tulare Police Department, the Visalia Police Department, the Tulare Area Regional Gang Enforcement Team (TARGET), and the California Highway Patrol (CHP). Assistant United States Attorney Kimberly A. Sanchez is prosecuting both cases.
Rudolfo Delgadillo, Alejandro Zavala, Josh Soto, and Desarae Granillo are in custody. Fabian Magana and Salina Granillo have been ordered released.
If convicted, Delgadillo, Zavala, and Magana face a maximum sentence of life in prison. If convicted, Soto faces a maximum penalty of 80 years in prison, Desarae Granillo faces a maximum penalty of 220 years in prison, and Salina Granillo faces a maximum penalty of 40 years in prison. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Los Angeles Area Woman Charged with Methamphetamine Trafficking and Firearm OffenseRead the Press Release
BAKERSFIELD, Calif. — A federal grand jury returned a two-count indictment today against Manuela Guadalupe Lizarraga-Hernandez, 32, of Downey, charging her with possession with intent to distribute methamphetamine and possessing a firearm in furtherance of that crime, United States Attorney Benjamin B. Wagner announced.
According to court documents, on February 15, 2015, Lizarraga-Hernandez possessed 440.9 grams of 97 percent pure methamphetamine along with a pink 9 millimeter handgun in the car that she was driving northbound through Kern County on the SR-99 highway.
This case is the product of an investigation by the Drug Enforcement Administration and the California Highway Patrol. Assistant United States Attorney Angela Scott is prosecuting the case.
If convicted, Lizarraga-Hernandez faces a maximum statutory penalty of life 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.
Kern County Man Indicted for Illegal Possession of a Destructive Device and FirearmsRead the Press Release
FRESNO, Calif. — A federal grand jury returned a four-count indictment today against Kenneth William Kirkland, 47, of California City, charging him with being a felon in possession of firearms, a destructive device and explosives, and failing to register a destructive device in the National Firearms Registry, United States Attorney Benjamin B. Wagner announced.
According to court documents, Kirkland possessed a bomb, various explosives, and three firearms at his residence in California City.
This case is the product of an investigation by the Federal Bureau of Investigation, the California City Police Department, the Kern County Sheriff’s Office and the California Highway Patrol. Assistant United States Attorney Angela Scott is prosecuting the case.
If convicted, Kirkland faces a maximum statutory penalty of 20 years in prison and a $260,000 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 Man Sentenced to Two Years in Prison for Aggravated Identity TheftRead the Press Release
SACRAMENTO, Calif. — Glenn Litton, 47, resident of Carson City, Nevada, was sentenced today by United States District Judge Morrison C. England Jr. to two years in prison for aggravated identity theft, United States Attorney Benjamin B. Wagner announced.
According to court documents, on November 19, 2014, Litton submitted an application for a U.S. passport to a passport acceptance officer in Sacramento. In the application, Litton used the identity of another individual, including that individual’s name, birthdate, and Social Security number. Litton also presented supporting documentation such as a birth certificate, a debit card, and employment ID card bearing the name of the individual whose identity he had assumed. As a result of the application, Litton was issued a U.S. passport in a false name.
This case was the product of an investigation by the U.S. State Department’s Diplomatic Security Service with assistance from the Federal Bureau of Investigation, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and the Nevada Department of Motor Vehicles. Assistant United States Attorney Shelley D. Weger prosecuted the case.
Methamphetamine Trafficker Sentenced to 11 Years in PrisonRead the Press Release
SACRAMENTO, Calif. — Miguel Sotelo, 41, of Sacramento, was sentenced today by United States District Judge Morrison C. England Jr. to 11 years in prison and a $25,000 fine for possessing methamphetamine with the intent to distribute it, United States Attorney Benjamin B. Wagner announced.
According to court documents, in April 2014, Sacramento County Sheriff’s detectives spotted a Honda Accord speeding northbound on Interstate 5 near Twin Cities Road in Sacramento County. Detectives stopped the car and spoke with the passenger, defendant Miguel Sotelo, who stated that the car belonged to his wife who was not present. Shortly afterward, a narcotic detection K9 unit alerted on the rear left wheel well. Officers later found more than 14 pounds of methamphetamine stored in two bags located in the car’s trunk. Officers also found $23,000 in cash.
Based on the amount of methamphetamine and currency found in the car, detectives executed a state search warrant at Sotelo’s business called “Sotelo’s Tree Care.” At the business, officers found about 266 grams of cocaine, a pistol and a digital scale.
This case was the product of an investigation by the Drug Enforcement Administration and the Sacramento County Sheriff’s Office. Special Assistant United States Attorney Josh F. Sigal prosecuted the case.
Sotelo has remained in custody since his arrest on April 9, 2014.
Fair Oaks Man Sentenced to over Five Years in Prison for Mortgage FraudRead the Press Release
SACRAMENTO, Calif. — Today, United States District Judge Morrison C. England Jr. sentenced Anthony Salcedo, 34, of Fair Oaks, to five years and four months in prison for a mortgage fraud scheme. Salcedo was found guilty by a federal jury of one count of conspiracy and four counts of mail fraud after a five-day trial in June 2015.
According to court documents and evidence produced at trial, Anthony Salcedo worked in the real estate industry beginning in 2000 and was licensed as a real estate agent in 2004. He was licensed as a mortgage broker in 2006 and worked for two different mortgage lenders for five years. When selling his personal properties in 2005 and 2006, Salcedo worked with mortgage broker Sean McClendon, 49, of Fair Oaks, and Anthony Williams, 47, previously of Memphis, Tennessee, to find buyers. As an incentive to complete the sales transactions, Salcedo paid kickbacks to the buyers and to McClendon outside of escrow. Salcedo artificially inflated the value of his properties and paid the kickbacks out of the excess financing paid by the lenders who were deceived as to the true value of the purchases they were underwriting. The kickback payments were never disclosed to the lenders as part of the purchase and sale agreements, and the buyers’ income and assets were falsified in order to qualify for the loans.
In all, approximately $2.6 million in fraudulently obtained loans were involved in the scheme, while Salcedo and his family got out from under their $1.6 million in mortgage debt and made over $600,000 of profit at a time when Salcedo knew the real estate market was slowing down. Salcedo was remanded to the custody of the U.S. Marshals after the verdict, and has been awaiting sentencing in the Sacramento County Jail since that time.
According to a Sentencing Agreement on file with the Court, after trial the government’s continuing investigation indicated Salcedo might be hiding assets and manufacturing a drug problem in an effort to avoid restitution payments and influence the amount of time he ultimately served in prison. To resolve those issues, Salcedo agreed the Court need not consider his purported drug problem, which may have qualified him for a drug treatment program and a reduction of his sentence. He also agreed to repay the United States Federal Defenders for the costs of his defense, make a $300,000 payment toward a total restitution obligation of over $700,000, and pay a $50,000 fine before sentencing.
In sentencing Salcedo, Chief Judge England noted, “You really believed that you were going to beat the system. You’re not smarter than everyone else in the world.”
“Anthony Salcedo was a licensed real estate professional who decided to game the system so that he could profit in the midst of the then looming financial crisis, to which his actions contributed,” said U.S. Attorney Wagner. “We are gratified by the sentence imposed by the Court, which should serve as notice that mortgage fraud remains a serious offense for which there can and should be severe consequences.”
“Beyond the dishonesty and collusion involved, this is significant because of the exchange of money outside of escrow,” said Thomas McMahon, Acting Special Agent in Charge, IRS Criminal Investigation. “Through kickbacks, the defendant and his family managed to avoid $1.6 million in mortgage debt while a few buyers declared bankruptcy and not only lost their investment properties but also their homes. IRS-CI is committed to hold accountable those involved in these types of schemes.”
Co-defendant McClendon pleaded guilty and was sentenced on November 5, 2015, to 20 months in prison. He is expected to begin serving that sentence in January 2016. Co‑defendant Williams pleaded guilty, and is currently serving his sentence of two years and nine months in prison.
This case was the product of an investigation by the Internal Revenue Service‑Criminal Investigation and the Federal Bureau of Investigation. Assistant United States Attorneys Jean M. Hobler and Marilee Miller prosecuted the case.
Vacaville Man Pleads Guilty to Defrauding California Air National Guard of Approximately $200,000 in Leave and False Expenses SchemeRead the Press Release
SACRAMENTO, Calif. — Thomas Venable, 46, of Vacaville, pleaded guilty today to theft concerning programs receiving federal funds in connection with his operation of a sustained leave and false expenses scheme while he was a Major in the California Air National Guard, United States Attorney Benjamin B. Wagner announced.
According to court documents, between April 2008 and April 2010, Venable obtained nearly $195,528 from the California Air National Guard (CA ANG) in wages, benefits, and expense reimbursements to which he was not entitled. Venable was assigned to a detail with the California Emergency Management Authority (Cal-EMA) that was available only to active duty CA ANG members. At the same time, Venable was frequently deployed for training and duty with the U.S. Air Force, and he was employed full time by the University of California-San Francisco Police Department (UCSF-PD). While deployed on federal duty or while working for the UCSF-PD between April 2008 and April 2010, Venable intentionally failed to use required military or other leave and collected double compensation from the federal government and the state of California. During the same period, Venable also filed at least 19 false travel and expense reimbursement claims that were unrelated to his CA ANG work but that were paid as though they were legitimate.
Venable also admitted that, for more than a year, he concealed from his direct supervisors at the CA ANG that he had joined the Texas Air National Guard in February 2009, resulting in Venable’s discharge from the CA ANG and his ineligibility for employment with Cal-EMA. In doing so, Venable affirmatively misrepresented his duty status to CA ANG staff.
This case is the product of an investigation by the United States Department of Defense, Defense Criminal Investigative Service, and the California Highway Patrol, Office of Internal Affairs. Assistant United States Attorney André M. Espinosa is prosecuting the case.
Venable is scheduled to be sentenced by U.S. District Judge John A. Mendez on February 16, 2016. Venable faces a maximum statutory penalty of 10 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Seven Defendants Convicted for Their Roles in $33 Million Tax Refund SchemeRead the Press Release
FRESNO, Calif. — After a three-and-a-half week trial, a federal jury in Fresno has found four defendants guilty of participating in a tax refund scheme claiming more than $33 million in federal tax refunds, United States Attorney Benjamin B. Wagner announced.
Fresno residents Gaylene Lynette Bolanos,58; and Leroy Donovan Combs, 74; Madera County resident Charles Wayne Uptergrove, 57; and Ladonna Lee Moon, 55, of Texas, were convicted of submitting false claims against the United States. Bolanos was also found guilty of conspiracy to defraud. The jury was unable to reach a verdict as to Rodney Edwin Moon, of Texas.
Prior to trial, co-defendants James Karam Schwartz, 60, and Louie Calles, 65, pleaded guilty to submitting false claims against the United States. Another co-defendant, Oswald Georgner, 66, of Fresno, pleaded guilty to the conspiracy to defraud. Each of the defendants is awaiting sentencing.
According to court documents and testimony at trial, between August 2008 and October 16, 2008, Bolanos and Georgner conspired to submit false claims for income tax refunds. Bolanos and Georgner worked with others, including Combs, Uptergrove, Calles, Schwartz, and Ladonna Lee Moon to submit false tax returns in an attempt to eliminate their debts and receive sizable tax refunds by submitting their tax returns with false claims of interest income and withholding citing IRS Form 1099-OID.
As part of the scheme, the defendants submitted false tax returns to the IRS seeking more than $33 million in fraudulent tax refunds. As a result of these fraudulent tax refund claims, the IRS issued approximately $400,000 in fraudulent refunds. 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.
“These defendants went well beyond cheating on their taxes to avoid paying their fair share,” said U.S. Attorney Wagner. “They sought to steal millions in taxpayer funds meant to provide services for us all. We are pleased by the jury’s verdict and we will continue our efforts to bring to justice those who would plunder the public fisc.”
“Plain and simple, this was fraud,” said Acting Special Agent in Charge Thomas McMahon, IRS Criminal Investigation. “Today’s conviction should send a clear message that those involved in these schemes will not go undetected. It is more important than ever that the American people feel confident that everyone is playing by the rules and paying the taxes they owe.”
This case is the product of an investigation by the Internal Revenue Service‑Criminal Investigation. Assistant United States Attorneys Grant B. Rabenn and Henry Z. Carbajal III are prosecuting the case with assistance from Trial Attorney Karen J. Sharp, of the Department of Justice, Antitrust Division.
The four defendants convicted at trial are scheduled to be sentenced my United States District Judge Anthony W. Ishii on March 7, 2016. They face a maximum statutory penalty of five years in prison on each false claims charge. Bolanos and Georgner face a maximum statutory penalty of 10 years in prison for the conspiracy charge. 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.
Federal Jury Finds 2 Guilty of All Counts in Sacramento-Area Builder Bailout Mortgage Fraud SchemeRead the Press Release
SACRAMENTO, Calif. — A federal jury found two defendants guilty today of mail fraud and making false statements on loan applications in a scheme that provided financial incentives to straw buyers to get them to purchase homes that developers were having difficulty selling, United States Attorney Benjamin B. Wagner announced.
Edward Khalfin, 58, of San Mateo, was found guilty of 12 counts of mail fraud and 11 counts of making false statements on loan applications. Robin Dimiceli, 53, of Brentwood, was found guilty of six counts of mail fraud and six counts of making false statements on loan applications.
According to court documents, from August 2006 through May 2008, two brothers, Volodymyr Dubinsky, 56, formerly of Folsom, and Leonid Doubinski, 50, formerly of Copperopolis, built, developed, and sold real estate in Carmichael, Sacramento, and Copperopolis. As the real estate market declined, the brothers recruited family members, employees, and associates with good credit to act as straw buyers for residential properties. The Dubinsky brothers have not been apprehended and are fugitives thought to be residing in Ukraine.
Khalfin was a licensed mortgage broker; his company was called Bay Financial Co. Dimiceli was a licensed real estate salesperson and was self-employed at Trinity Mortgage Capital, which was affiliate with Windsor Mortgage Capital. Khalfin and Dimiceli assisted in the scheme by submitting the loan applications for the straw buyers. They allegedly prepared and submitted applications to lenders that falsely stated the straw buyers’ income, assets, and intent to occupy the homes as their primary residences. Dimiceli was a straw buyer for at least two properties involved in the scheme.
This case is the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation. Assistant United States Attorneys Todd A. Pickles and Roger Yang are prosecuting the case.
Three other indictments were brought relating to this scheme. Four defendants have pleaded guilty and are scheduled to be sentenced: Svetlana Dubinsky, 51, of Boca Raton, Fla.; Serge Doubinski, 32, of San Francisco; Zinayda Chekayda, 52, of Antelope, (docket # 2:12-cr-327 WBS); and Kory Schmidli, 37, of Linden (docket # 2:12-cr-330 GEB). A trial is pending for Diana Woods, 58, of Citrus Heights, on March 8, 2016 (docket # 2:12-cr-329). Volodymyr Dubinsky and Leonid Doubinski are fugitives. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Sentencing is set for Khalfin and Dimiceli for February 1, 2016, by United States District Judge William B. Shubb. The defendants face a maximum statutory penalty of up to 20 years in prison and a $250,000 fine for mail fraud and 30 years in prison and a $1 million fine for false statements on a loan or credit application. 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.
Delano Man Sentenced to 6.5 Years in Prison for Receiving and Distributing Child PornographyRead the Press Release
FRESNO, Calif. — Michael David Wilson, 32, of Delano, was sentenced late Monday afternoon by Senior United States District Judge Anthony W. Ishii to six and a half years in prison for receiving and distributing child pornography, United States Attorney Benjamin B. Wagner announced.
According to court documents, between September 2012 and April 2013, Wilson received and distributed more than 1,400 images and video files depicting minors engaged in sexually explicit conduct. The illicit files also involved the portrayal of sadistic, masochistic, and other depictions of violence, and included depictions of prepubescent minors. On July 25, 2013, Wilson was charged with receiving and distributing child pornography, and he pleaded guilty to the charge on August 27, 2014.
“The actions of child predators cause irreparable harm to children across our nation,” said Ryan L. Spradlin, special agent in charge for HSI San Francisco. “The victims of these criminals deserve outcomes like today. With the tireless efforts made by HSI and our law enforcement partners, we will continue to hunt down predators and hold them accountable for their disturbing actions.”
This case was the product of an investigation by the Bakersfield office of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant United States Attorney Brian W. Enos prosecuted the case.
Tulare Man Pleads Guilty to Stealing Social Security BenefitsRead the Press Release
FRESNO, Calif. — Larry Ramirez, 52, of Tulare, pleaded guilty today to stealing benefits paid by the United States Social Security Administration (SSA), United States Attorney Benjamin B. Wagner announced.
According to court documents, Ramirez failed to disclose income he had made from owning and operating an auto body repair business in numerous applications to the SSA for benefits. During the process of determining his benefits, he made a false statement to the SSA that he had not worked in over 15 years, which he knew to be false at the time. As a result, and over the course of approximately 15 years, Ramirez stole approximately $90,000 in SSA benefits.
This case is the product of an investigation by the U.S. Social Security Administration, Office of Inspector General. Assistant United States Attorneys Patrick R. Delahunty and Henry Z. Carbajal III are prosecuting the case.
Ramirez is scheduled to be sentenced by United States District Judge Anthony W. Ishii on March 28, 2016. Ramirez faces a maximum statutory penalty of 10 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Silk Road Drug Dealer Sentenced to 9 Years in Federal PrisonRead the Press Release
SACRAMENTO, Calif. — Matthew Luke Gillum, 32, of Meadow Vista, was sentenced today by United States District Judge Morrison C. England Jr. to nine years in prison for conspiring to distribute marijuana and avoiding a currency transaction reporting requirement, United States Attorney Benjamin B. Wagner announced.
According to court documents, Gillum, was the leader of a drug trafficking organization (DTO) that operated in the greater Sacramento area. The Gillum DTO shipped marijuana through the United States mail to various locations outside of California. In order to conduct his drug trafficking operation, Gillum solicited, hired, and utilized the services of at least five individuals to open post office boxes, collect drug trafficking proceeds, ship marijuana parcels, manufacture and supply marijuana, and facilitate the clandestine communications of the DTO.
The Gillum DTO solicited marijuana orders via the Silk Road website. Marijuana purchasers shipped cash payments to various post office boxes controlled by the Gillum DTO throughout the Sacramento region. Once payment was received, the Gillum DTO would ship the selected type and quantity of marijuana to the purchaser. Between August 2012 and July 2013, the Gillum DTO distributed at least 600 pounds of marijuana, much of it through Express Mail parcels sent from the Sacramento region to 16 different states. During the course of the investigation, the United States seized over $700,000 from a bitcoin account controlled by Gillum.
On February 27, 2013, Gillum purchased a diamond ring from Tiffany and Co. for $105,900 in cash. Because the transaction involved more than $10,000 in cash, Tiffany was required to file an IRS Form 8300 (Report of Cash Payments Over $10,000 Received in a Trade or Business) in Gillum’s name. However, although Gillum paid for the ring, he used a nominee to fill out the paperwork as if the nominee purchased the ring.
This case was the product of an investigation by the United States Postal Inspection Service, the Internal Revenue Service-Criminal Investigation, the Sacramento County Sheriff’s Office, the Central Valley HIDTA Task Force, CAL-MET, Placer County Special Investigations Unit, and Rocklin Police Department. Assistant United States Attorneys Justin Lee and Kevin Khasigian prosecuted the case.
Yuba City Man Pleads Guilty to Producing Child PornographyRead the Press Release
SACRAMENTO, Calif. — A Yuba City man pleaded guilty today to producing child pornography, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Benjamin B. Wagner of the Eastern District of California, Special Agent in Charge Ryan Spradlin of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) San Francisco Field Division, and Chief of Police Robert D. Landon of the Yuba City Police Department.
Nathan Penner, 25, pleaded guilty today before United States District Judge Troy L. Nunley to one count of production of child pornography. The sentencing hearing is set for January 21, 2016.
In connection with his plea, Penner admitted that he produced sexually explicit photos and videos of a five-year-old girl in September and October of 2012. Penner further acknowledged that he had downloaded child pornography. Subsequent forensic analysis of Penner’s computer and digital media revealed both the child pornography that he produced and hundreds of other child pornography files.
This case is being investigated by HSI and the Yuba City Police Department. This case is being prosecuted by Trial Attorney Reginald E. Jones of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Special Assistant U.S. Attorney Josh F. Sigal of the Eastern District of California. CEOS’ High Technology Investigative Unit assisted with computer forensic analysis for the case.
Penner faces a maximum statutory penalty of 30 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 to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. 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 via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Three Sentences Handed Down in Mortgage Fraud CasesRead the Press Release
SACRAMENTO, Calif. — As part of the ongoing effort by U.S. Attorney’s Office to prosecute mortgage fraud, three defendants were sentenced today for their roles in separate mortgage fraud schemes, United States Attorney Benjamin B. Wagner announced.
West Sacramento Man Sentenced for Mortgage Fraud (2:11-cr-353 MCE)
United States District Judge Morrison C. England Jr. sentenced Sean McClendon, 49, of Elk Grove, today to one year and eight months in prison. On October 18, 2012, McClendon pleaded guilty to a conspiracy to commit mail fraud for his involvement in a Sacramento area mortgage fraud scheme with Anthony Salcedo and Anthony Williams. According to court documents, McClendon and Williams recruited straw buyers to purchase four properties owned by Salcedo or his associates using kickbacks, false financial information for the buyers, and payments outside of escrow. All properties involved were foreclosed by the lenders, resulting in losses of over $1 million. In June 2015, a jury found Salcedo guilty of four counts of mail fraud and one count of conspiracy to commit mail fraud. He is scheduled to be sentenced on November 12, 2015. On January 29, 2015, Williams was sentenced to two years and nine months in prison.
This case is the product of an investigation by the Internal Revenue Service – Criminal Investigation and the Federal Bureau of Investigation. Assistant United States Attorneys Jean M. Hobler and Marilee Miller are prosecuting the case.
Mortgage Broker Sentenced for False Statements on a Loan Application (2:13-cr-131 MCE)
United States District Judge Morrison C. England Jr. sentenced Valeri Kalyuzhnyy, 44, of Citrus Heights, to two years in prison. On June 25, 2015, Kalyuzhnyy pleaded guilty to making a false statement on a loan application. According to court documents, Kalyuzhnyy, while working as a mortgage broker, bought two homes using the credit information of a straw buyer. The loan applications that were used to secure the properties contained numerous false statements regarding the buyer’s intent to occupy the property, employer, occupation, and monthly income. In order to support the inflated monthly income listed on the loan application, fraudulent tax returns were submitted. On July 17, 2007, Kalyuzhnyy gave the straw buyer a check for $29,000.
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 Jared C. Dolan prosecuted the case.
San Joaquin County Man Sentenced for Mortgage Fraud Scheme (2:11-cr-468 TLN)
United States District Judge Troy L. Nunley sentenced Stephen Pirt, 37, of Mountain House, to two years and one month in prison for his participation in a large-scale mortgage fraud scheme. According to evidence presented at the trial for co-defendant Erik Hermann Green, 33, of Roseville, Pirt and Green defrauded the New Century Mortgage Company by submitting false documentation about borrowers’ employment, income and assets, including fraudulent loan applications and other altered bank documents. On September 19, 2013, Stephen Pirt pleaded guilty to wire fraud.
Judge Nunley told Pirt, “You were an organizer and leader of the scheme, and you need to be punished for that.” The judge also explained the need for a proper deterrent effect.
Green is scheduled to be sentenced by Judge Nunley on November 19, 2015. Green 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.
This case is the product of an investigation by the Internal Revenue Service – Criminal Investigation and the Alameda County District Attorney’s Office. Assistant United States Attorney Michael D. Anderson and Special Assistant United States Attorney Josh F. Sigal are prosecuting the case.
Sacramento Couple Sentenced for Theft and Possession of Stolen MailRead the Press Release
SACRAMENTO, Calif. — A Sacramento couple was sentenced today by United States District Judge Troy L. Nunley for a smash and grab vehicle burglary in South Sacramento, United States Attorney Benjamin B. Wagner announced.
Keo Seng Saechao, 33, was sentenced to 21 months in prison, and his wife Pang Shoua Xiong, 33, was sentenced to 30 months in prison.
According to court documents, on September 26, 2012, a postal vehicle was burglarized in South Sacramento. The back window of the vehicle was smashed in with a tire iron and all of the mail in the truck was stolen. At the time of the burglary, 531 postal customers were left on the route. Saechao was driving the car during the burglary and Xiong was in the front seat.
On October 11, 2012, California Probation officers and CHP officers conducted a probation search of the defendants’ home as part of an unrelated investigation. They found evidence linking the couple to the postal vehicle burglary, as well as numerous other instances of mail theft in the South Sacramento area. A second search turned up large piles of stolen mail from the addresses that would have been in the vehicle in South Sacramento on September 26, 2012. A search of the computers in the apartment showed false IDs with the defendants’ pictures superimposed on it, “Check Designer” software that allows users to create and print checks, and the names and account numbers associated with several of the fraud victims whose identifiers were found on papers in the apartment.
On July 30, 2015, Saechao and Xiong pleaded guilty to theft of the mail.
This case is the product of an investigation by the U.S. Postal Inspection Service. Assistant United States Attorney Matthew Morris prosecuted the case.
San Francisco Division Inspector in Charge Rafael Nunez of the U.S. Postal Inspection Service stated, “Postal Inspectors worked closely with the U.S. Attorney’s Office to arrest and prosecute the individuals responsible for the theft of U.S. Mail and damage to Postal property and equipment.
Newcastle Man Pleads Guilty in Scheme to Defraud United Auburn Indian CommunityRead the Press Release
SACRAMENTO, Calif. — Gregory Scott Baker, 48, of Newcastle, pleaded guilty today to conspiring commit mail and wire fraud, conspiring to launder monetary instruments, and filing a false tax return, United States Attorney Benjamin B. Wagner announced.
In August 2012, Baker, Bart Wayne Volen, 54, of San Diego and Haiku, Hawaii, and Darrell Patrick Hinz, 48, of Cameron Park, were charged with conspiring to commit mail and wire fraud and various money laundering charges as part of a scheme to defraud the United Auburn Indian Community (UAIC) of more than $17 million. In April, 2013, the government filed a superseding indictment which additionally charged Baker with filing false tax returns from 2006 through 2009 in connection with the fraud.
According to court documents, in October 2006, the UAIC hired Volen, a developer, to finish construction on four tribal buildings – a school, a community center, and administrative offices – on UAIC-owned property in Auburn. Volen submitted false and inflated invoices to the UAIC knowing that Baker and Hinz, both UAIC employees, would approve the fraudulent invoices based on an agreement the three men had reached earlier. Volen supported his invoices with inflated cost proposals from his general contractor’s company, Sequoia Pacific Builders (SPB), and, at times, inflated invoices from various subcontractors. At Volen’s direction, over 160 SPB cost proposals were fraudulently inflated.
Baker was the UAIC tribal administrator, and his duties included overseeing the Indian Hills Office Project. Hinz was a contract employee hired by the UAIC to manage the construction at the Indian Hills Office Project site. Both Baker and Hinz were required to approve all invoices before the UAIC tribal council would pay for work done on the Project. The indictment alleges that during the scheme to defraud the tribe, Baker engaged in conduct to insure that the tribal council would pay for the inflated and fraudulent invoices submitted by Volen. He was aware of what Volen was doing and was later paid by Volen for his participation in the scheme. According to court documents, a total of over $17 million was ultimately stolen from the UAIC, and Baker received over $1.4 million for his participation.
With regard to the tax offense, according to court documents, Baker filed tax returns contained a Schedule C in which Baker failed to report the income he derived from the scheme. As a result, the United States suffered a tax loss of between $250,000 and $550,000.
This case is the product of an investigation by the Internal Revenue Service, Criminal Investigation. Assistant United States Attorneys Michael M. Beckwith, John K. Vincent and Kevin C. Khasigian are prosecuting the case.
Hinz is scheduled for trial in Sacramento on February 29, 2016. The charges against him are only allegations; Hinz is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Baker is scheduled to be sentenced by United States District Judge Troy L. Nunley on March 17, 2016. Volen previously pleaded guilty to similar charges in this case on June 12, 2014. Chris W. Eatough, the owner of Sequoia Pacific Builders, previously pleaded guilty to a felony related to this case on June 20, 2013, in case number 2:13-cr-214 TLN. Volen and Eatough are scheduled to be sentence by Judge Nunley on April 28, 2016 and March 17, 2016, respectively. Both Baker and Volen have agreed to pay at least $17 million in restitution to the United Auburn Indian Community.
Baker faces a maximum sentence of 20 years in prison and a $250,000 fine, or twice the value of the gross gain or loss for conspiring to commit mail and wire fraud. The maximum statutory penalty for conspiring to launder monetary instruments is 20 years in prison and a $500,000 fine or twice the value of the laundered money Any sentence imposed in this case, however, will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Vallejo Woman Pleads Guilty to Tax Refund Fraud and ID TheftRead the Press Release
SACRAMENTO, Calif. — Leticia A. Roque, 48, of Vallejo, pleaded guilty today to conspiring to submit false claims against the United States and aggravated identity theft, United States Attorney Benjamin B. Wagner announced.
San Francisco Division Inspector in Charge Rafael Nunez of the U.S. Postal Inspection Service stated, “Postal Inspectors worked closely with the U.S. Attorney’s Office and our partner in law enforcement on this investigation and will continue to protect the public and the U.S. Mail against all forms of misuse.”
“IRS Criminal Investigation has made investigating refund fraud and identity theft a top priority,” said Acting Special Agent in Charge Thomas McMahon, IRS-Criminal Investigation. “Filing fraudulent tax returns in the names of other individuals may result in significant harm to those individuals whose identities were stolen, as well as a monetary loss against the U.S. Treasury.”
According to court documents, between January 7, 2012, and May 19, 2012, Roque along with co-defendants Marcus A. Cooper, 29, and Tiana E. Naples, 28, also of Vallejo, submitted at least 60 fraudulent tax returns to the Internal Revenue Service. The returns were filed in other people’s names and contained false representations about those persons’ income, employer, tax credits, and tax withholding. The returns were filed without the permission or knowledge of the taxpayers. The 60 tax returns requested approximately $209,713 in tax refunds, of which approximately $102,521 was sent to the defendants in the form of prepaid debit cards.
This case is the product of an investigation by the United States Postal Inspection Service and the Internal Revenue Service – Criminal Investigation. Assistant United States Attorney Matthew G. Morris is prosecuting the case.
Roque is scheduled to be sentenced on February 9, 2016, by United States District Judge John A. Mendez. She faces a maximum statutory penalty of 10 years in prison and a $250,000 fine for the false claim conviction and a mandatory consecutive two-year term for aggravated ID 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.
Cooper and Naples are scheduled to appear in court for a status conference on December 8, 2015. The charges against them are only allegations; they are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Four Fresno Residents Sentenced for Their Roles in Methamphetamine Trafficking ConspiracyRead the Press Release
FRESNO, Calif. — United States District Judge Anthony W. Ishii sentenced the final two defendants on Monday for a conspiracy to sell multiple pounds of methamphetamine to a confidential source, United States Attorney Benjamin B. Wagner announced.
On Monday, Veronda Creasy, 32, was sentenced to five years in prison, and Juventino Galindo, 41, was sentenced to eight years and nine months in prison for conspiracy to distribute and possess with intent to distribute methamphetamine.
On October 19, 2015, Touch Peang, 35, was sentenced to 12 years in prison for conspiracy to distribute methamphetamine and marijuana. Bruce Hunt, 60, was sentenced on October 13, 2015, to four years in prison for using a telephone to facilitate the commission of a felony. All defendants pleaded guilty in July and August 2015.
According to court documents, on April 29, 2014, Creasy and Hunt arranged to sell methamphetamine to a confidential source who wanted to purchase 10 pounds. Creasy sought the assistance of Galindo to obtain the substantial quantity of methamphetamine and Galindo arranged for Peang to sell the methamphetamine. On May 1, 2014, Hunt called the confidential source to notify him that the methamphetamine was available. Galindo, Creasy and Hunt led the confidential source to Peang’s place of employment, where Peang showed the methamphetamine to him. Shortly thereafter, officers of the Fresno Police Department executed a search warrant at the location, resulting in the arrest of the defendants and the seizure of eight pounds of methamphetamine, 13 pounds of marijuana, and two firearms.
San Francisco Division Inspector in Charge Rafael Nunez of the U.S. Postal Inspection Service stated, “Postal Inspectors worked closely with the U.S. Attorney’s Office and our partners at the Fresno Police Department on this investigation and will continue to protect the public and the U.S. Mail against all forms of criminal misuse.”
This case was the product of an investigation by the United States Postal Inspection Service and the Fresno Police Department. Assistant United States Attorney Melanie L. Alsworth prosecuted the case.
U.S. Attorney’s Office Awarded Funding for Reentry and Prevention Outreach Coordinator Positions to Further Department of Justice’s “Smart on Crime” InitiativeRead the Press Release
SACRAMENTO, Calif. — The Office of the United States Attorney for the Eastern District of California announced today that it is seeking applications for two Reentry and Prevention Outreach Coordinators to work in the Sacramento and Fresno offices to help in the development and implementation of the U.S. Department of Justice’s Smart on Crime initiative.
The selected applicants will focus on reentry and prevention efforts as part of the office’s implementation of the Smart on Crime Initiative. Supporting effective crime prevention strategies and working to reduce recidivism among persons who have paid their debt to society and are rehabilitating and reintegrating back into their communities are key components of the initiative. Recidivism rates for offenders leaving prison are high. A reduction in the recidivism rate of even one or two percentage points can create long-lasting benefits for formerly incarcerated individuals and their communities.
“This office’s main function is, and will remain, the prosecution of serious and violent offenders,” said U.S. Attorney Wagner. “But prosecutions alone will not ensure public safety over the long term. This office has been increasing its involvement in community-based crime prevention and reentry strategies. I am very pleased that we are now hiring dedicated professionals to help lead these efforts. When hired, these persons should bring new expertise to this office, increasing our capacity to assist in prevention and reentry, while minimizing the impact on our prosecutorial resources.”
In 2013, then Attorney General Eric Holder launched a comprehensive review of the criminal justice system in order to identify reforms that would ensure federal laws are enforced more fairly and more efficiently. This review was part of the Department of Justice’s Smart on Crime Initiative, which has five principal goals: 1) ensuring that finite federal resources are devoted to the most important law enforcement priorities; 2) promoting fairer enforcement of the laws and alleviating disparate impacts of the criminal justice system; 3) ensuring just punishments for low-level, nonviolent convictions; 4) bolstering reentry and prevention efforts to deter crime and reduce recidivism; and 5) strengthening protections for vulnerable populations.
Since the initiative’s announcement, the U.S. Attorney’s Office for the Eastern District has worked with our federal, state, and local law enforcement partners to focus our federal prosecutions on those crimes and criminals in our district that pose the greatest threats to our citizens and involve clear federal interests. To support the implementation of the reentry and prevention aspects of the initiative, the office sought and was awarded funding for two specialist positions. The Reentry and Prevention Outreach Coordinators will help the office to engage with youth and with at-risk populations to help prevent criminal activity, and they will also work with other agencies to support programs and strategies to facilitate the reentry of convicted persons into our communities in ways that maximize their chances of becoming productive citizens. It is anticipated that one coordinator will be based in the Sacramento office and one in the Fresno office.
The job postings for the Reentry and Prevention Outreach Coordinator positions can be found at: https://www.usajobs.gov/GetJob/ViewDetails/420327700 for Sacramento and https://www.usajobs.gov/GetJob/ViewDetails/420328700 for Fresno.
Additional information on the Department of Justice’s Smart on Crime initiative can be found at: http://www.justice.gov/sites/default/files/ag/legacy/2013/08/12/smart-on-crime.pdf.
The President, appearing in Newark, New Jersey today, announced a range of actions to promote rehabilitation and reintegration of formerly incarcerated persons. That announcement can be found at: https://www.whitehouse.gov/the-press-office/2015/11/02/fact-sheet-president-obama-announces-new-actions-promote-rehabilitation.
The United States Government does not discriminate in employment on the basis of race, color, religion, sex, national origin, political affiliation, sexual orientation, marital status, status as a parent, genetic information, disability, age, membership or nonmembership in an employee organization, or on the basis of personal favoritism.
Guilty Plea of Sequoia Forest Marijuana CultivatorRead the Press Release
FRESNO, Calif. —Uriel Silva-Garcia (Silva), 24, of Turicato, Michoacán, Mexico, pleaded guilty today to conspiring to manufacture, distribute and possess with intent to distribute marijuana and possessing firearms in furtherance of a large-scale cultivation operation located near Little Poso Creek in the Sequoia National Forest, United States Attorney Benjamin B. Wagner announced.
According to court documents, Silva was paid to plant and tend about 8,596 marijuana plants on public land. To facilitate the cultivation activities, Silva possessed a loaded rifle and handgun. The cultivation 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. Pesticides, including malathion, fertilizer, water lines, trash, clothing and camping equipment were scattered throughout the site. Silva has agreed to reimburse the U.S. Forest Service for the cleanup costs.
Co-defendant Antonio Garcia-Villa, 46, pleaded guilty on October 26, 2015. Both defendants are scheduled to be sentenced on January 19, 2016, by Senior U.S. District Judge Anthony W. Ishii. They face a maximum statutory penalty of 20 years in prison and a $1 million fine for the drug conspiracy and a mandatory minimum consecutive term of five years in prison for the firearm charge. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables. They also face deportation to Mexico upon completion of any prison term imposed.
This case is the product of an investigation by the U.S. Forest Service, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and the Kern County Sheriff’s Office. Assistant United States Attorney Karen Escobar is prosecuting the case.
Four Men Indicted for Marijuana Cultivation Operation at “the Needles” Within Sequoia National ForestRead the Press Release
FRESNO, Calif. — A federal grand jury returned a four-count indictment today against Armando Arnoldo Martinez-Tinoco, 36; his brother, Juan Carlos Martinez-Tinoco, 41; and Luis Enrique Flores, 23, all of Mexico; and Ivan De Jesus Jimenez, 30, of La Puente, California, charging them with a conspiracy to cultivate marijuana on public land, cultivating and possessing marijuana with intent to distribute, and damaging public land and natural resources, United States Attorney Benjamin B. Wagner announced.
According to court documents, on October 17, 2015, law enforcement officers entered the marijuana cultivation site that was near The Needles, a series of massive granite spires atop a ridge in the Sequoia National Forest in Tulare County. The defendants fled the grow site, but were later found in the Kernville and Weldon areas. Agents removed 2,608 marijuana plants from the site and found highly toxic chemicals, fertilizer, and trash strewn throughout. The cultivation activities caused extensive damage to the land and natural resources. Native trees and plants were cut down to make room for the marijuana. Water was diverted from a spring that supports a dwindling breed of indigenous trout, the Kern River Rainbow Trout.
This case is the product of an investigation by the U.S. Forest Service, the U.S. Drug Enforcement Administration, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the California Department of Fish and Wildlife, the Tulare County Sheriff’s Office, and the Kern County Sheriff’s Office. Assistant United States Attorney Karen Escobar is prosecuting the case.
The defendants are scheduled for arraignment on November 2, 2015, in Fresno. If convicted of the drug offenses, the defendants face a maximum statutory penalty of 20 years in prison and a $1 million fine. If convicted of the environmental crime, the defendants face a maximum statutory penalty of 10 years in prison, a $250,000 fine, and restitution. 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.
Former Roseville Resident Sentenced for Loan Modification and Foreclosure Rescue Scam That Targeted Spanish-Speaking CommunityRead the Press Release
SACRAMENTO, Calif. —Martin Wayne Flanders, 51, formerly of Roseville, was sentenced today by United States District Judge Troy L. Nunley to six years and five months in prison for a scheme that targeted distressed homeowners, United States Attorney Benjamin B. Wagner announced.
In February 2015, Flanders and his wife Ligia Sandoval Spafford (Sandoval), 48, of Roseville, pleaded guilty to mail fraud for their participation in the fraud scheme.
According to court documents, between 2008 and 2010, Flanders charged clients advance fees in exchange for a number of financial services, including loan modifications, mortgage loan audits, credit repair, debt relief, bankruptcy filings, and a program to sell homes to “investors” with a rent-to-own option. Flanders and Sandoval marketed these services to economically distressed homeowners with particular emphasis on those who were Spanish speakers. During a radio program aired twice weekly by a Bay Area Spanish‑language Christian radio station, Radio Luz, Sandoval promoted the services she and Flanders offered. Flanders also advertised on a Spanish-language television station, Univision, and in Spanish-language magazines. About 98 percent of the defendants’ clients were of Hispanic descent, some of whom spoke little to no English. Sandoval speaks Spanish, Flanders does not.
Flanders and Sandoval made numerous false statements to investors as to the success of the programs being offered or refunds that would be available if the programs were not successful. “Ghost offers” – i.e., fictitious offers to purchase the victim’s property through short sale – and “skeleton bankruptcies” – i.e., sham bankruptcy petitions that were quickly dismissed by the bankruptcy court – were also used by Flanders or Sandoval to try to stall the foreclosure process. At least 25 to 30 individuals paid for services and did not receive them or did not receive refunds when the programs failed to deliver as promised. The total loss to the victims is at least $125,000. Some homeowners who were not able to obtain relief were foreclosed upon by their lenders.
“By targeting people in financial distress with limited English proficiency, Flanders sought to enrich himself on the backs of those who could least afford it,” said United States Attorney Wagner. “We are gratified by the sentence imposed by the Court, and we will continue to focus our efforts on the prosecution of such predatory fraud schemes.”
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Todd A. Pickles and Shelley Weger are prosecuting the case.
Flanders has been detained since his arrest in October 2012. Sandoval is currently out of custody. Sandoval is scheduled to be sentenced by Judge Nunley on March 3, 2016. She 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.
Southern California Man Sentenced for Smuggling Synthetic Drugs into Federal PrisonRead the Press Release
FRESNO, Calif. — James Steven Harris, aka Steve Harris, 45, of Loma Linda, was sentenced today to two years and six months in prison for his involvement in smuggling smokeable synthetic cannabinoids, commonly known as “spice,” “K2, or “incense,” to his brother who was then an inmate of Taft Correctional Institution, United States Attorney Benjamin B. Wagner announced.
On August 10, 2015, Steve Harris sentence pleaded guilty to two counts of making false statements under penalty of prosecution on Federal Bureau of Prisons visitor forms that he was not in possession of contraband, knowing that he was in possession of smokeable synthetic drugs containing XLR11. According to court documents, on one occasion Steve Harris successfully smuggled 15.5 grams of XLR11 into TCI for his brother Tracy McArthur Harris, aka Trey Harris, 42, and later attempted to smuggle 34.3 grams of XLR11, along with four packages of rolling papers, into the prison. At the time, XLR11 was a controlled substance analogue, which has since been made a Schedule I controlled substance.
At sentencing, United States District Judge Anthony W. Ishii stated: “The serious nature of smuggling contraband into a federal prison has serious consequences.”
Tracy Harris was subject to a prison disciplinary proceeding that added more time to his current 11-year prison term that he is currently serving for a drug conspiracy conviction. He was also sentenced in May to a consecutive one-year prison term for his involvement in obtaining the synthetic drugs from his brother. Court documents indicate that Tracy Harris, in turn, distributed the drug to other inmates at Taft.
A report by the Office of the Inspector General of the U.S. Department of Justice found that drugs reach federal prisoners primarily through inmate visitors.
This case was the product of an investigation by the Federal Bureau of Investigation and the Special Investigative Supervisor’s Office of Taft Correctional Institution. Assistant United States Attorney Karen A. Escobar prosecuted the case.
Fresno Man Pleads Guilty to Laser Strike of Police HelicopterRead the Press Release
FRESNO, Calif. — Johnny Alexander Quenga, 28, of Fresno, Calif., entered a guilty plea today to aiming the beam of a laser pointer at Air 1, a Fresno Police helicopter, United States Attorney Benjamin B. Wagner announced.
In pleading guilty, Quenga acknowledged that he repeatedly struck Air 1 with a powerful green laser attached to an airsoft rifle. As a result, the airmen experienced visual interference, flash blindness, after-imaging, a persistent headache lasting several hours, and dizziness. Two Fresno Police officers, who were responding to calls to assist in the investigation of the laser incident, were also seriously hurt when their patrol vehicle was broadsided at a busy intersection in northeast Fresno.
Quenga is scheduled for sentencing before Senior U.S. District Judge Anthony W. Ishii on January 19, 2016. He 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. At his change of plea hearing, Quenga was remanded to the custody of the U.S. Marshals Service for failing to comply with conditions of his pretrial release.
Reports of laser attacks have increased dramatically in recent years as powerful laser devices have become more affordable and widely available to the public. In 2014, the Federal Aviation Administration received 3,894 reports of incidents involving laser strikes on aircraft. In the Eastern District of California, which encompasses 34 counties in the eastern portion of California, there were 150 reported incidents, with the majority in Bakersfield, Fresno, and Modesto. Lasers can completely incapacitate pilots who are trying to fly safely to their destination, endangering their crew members, passengers and people on the ground.
The case against Quenga was investigated by the Federal Bureau of Investigation and Fresno Police Department. Assistant U.S. Attorney Karen A. Escobar is prosecuting the case.
Cultivation of Marijuana on Public LandsRead the Press Release
FRESNO, Calif. — Two men from Michoacán, Mexico faced court action today for their involvement in growing marijuana in national forests, United States Attorney Benjamin B. Wagner announced.
In the first case, Jose Antonio Reyna-Chavez (Reyna), 20, of was sentenced today to six years in prison for conspiring to manufacture, distribute, and possess with intent to distribute marijuana and possessing a firearm in furtherance of a drug trafficking crime. Upon completion of his prison term, Reyna is subject to deportation to Mexico.
On August 10, 2015, Reyna pleaded guilty to his involvement in the cultivation of 1,539 marijuana plants in the Blue Canyon area of the Sierra National Forest. He also acknowledged that he possessed a firearm in furtherance of the drug conspiracy. The cultivation operation was close to recreation areas. According to court documents, law enforcement officers found growing plants, processed marijuana, an AK-47 style assault rifle with a loaded high-capacity magazine, and a 12 gauge pump-action shotgun. The marijuana cultivation caused significant damage to the land and natural resources of the forest. Six large helicopter-net loads of material and debris, including fertilizer, propane tanks, and poisons, were removed from the forest. Reyes was ordered to pay $10,093 to the U.S. Forest Service to compensate it for the cleanup costs.
This case was the product of an investigation by the U.S. Forest Service, the California National Guard, and Fresno County Sheriff’s Office.
In the second case, Antonio Garcia-Villa (Garcia), 46, pleaded guilty today to conspiring to manufacture, distribute and possess with intent to distribute marijuana and possessing firearms in furtherance of a large-scale cultivation operation.
According to court documents, Garcia was paid to tend and water about 8,596 marijuana plants near Little Poso Creek in the Sequoia National Forest. To facilitate the cultivation activities, Garcia possessed a loaded rifle and handgun. 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. Pesticides, including malathion, fertilizer, water lines, trash, clothing and camping equipment were scattered throughout the site. Garcia has agreed to reimburse the U.S. Forest Service for the cleanup costs.
Garcia is scheduled for sentencing on January 19, 2016, before Senior U.S. District Judge Anthony W. Ishii. Garcia faces a maximum statutory penalty of 20 years in prison and a $1 million fine for the drug conspiracy and a mandatory minimum consecutive term of five years in prison for the firearm charge. The actual sentence will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables. Garcia also faces deportation to Mexico upon completion of any prison term imposed.
This case is the product of an investigation by the U.S. Forest Service, Kern County Sheriff’s Office, and the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant United States Attorney Karen Escobar is prosecuting both cases.
Seven-Year Prison Sentence for Shasta-Trinity National Forest Marijuana CultivatorRead the Press Release
SACRAMENTO, Calif. — Arturo Alcazar-Tapia, 22, of Eureka, was sentenced today to seven years and three months in prison and ordered to pay $17,000 in restitution for conspiring to manufacture and possess with intent to distribute marijuana and for depredation of public lands and resources, United States Attorney Benjamin B. Wagner announced.
According to court documents, Arturo Alcazar-Tapia and his brother, Isidro Alcazar‑Tapia, 26, of Eureka, conspired to grow more than 20,000 marijuana plants at two sites in the Shasta-Trinity National Forest in Trinity County. The marijuana was packaged for distribution at a house in Eureka. On August 4, 2014, law enforcement executed a search warrant at the defendants’ home in Eureka and found 33 pounds of processed marijuana divided into one-pound packages and more than $6,000 in cash. At a cultivation site at Big French Creek, agents located and destroyed approximately 7,980 marijuana plants and arrested co‑defendant Ricky Martin Huerta, 21, of Eureka. At a site at Hobo Gulch Road, agents located and destroyed approximately 13,642 marijuana plants. The marijuana cultivation caused significant damage to the land and natural resources of the forest that provides habitat for several threatened and endangered animal species.
At the Big French Creek site, agents observed hundreds of holes dug in the dirt containing soluble fertilizer, bags of trash, empty fertilizer bags, propane tanks, and water lines diverting water from a stream into the marijuana garden. Analysts estimate that cleaning the Big French Creek site will cost the U.S. Forest Service more than $4,000. Agents observed similar destruction at the Hobo Gulch Road site. Analysts estimate that cleaning the Hobo Gulch Road site will cost the U.S. Forest Service approximately $13,000.
All three defendants pleaded guilty in January 2015. On June 16, 2015, Judge Garland E. Burrell Jr. sentenced Ricky Martin Huerta to two years and eight months in prison, and on August 7, 2015, Judge Burrell sentenced Isidro Alcazar-Tapia to 87 months in prison and ordered restitution of $17,000. A fourth defendant, Victor Manuel Alvarez‑Contreras is currently a fugitive.
This case was the product of an investigation by the U.S. Forest Service, the Humboldt County Drug Task Force, the North State Marijuana Team, and the Trinity County Sheriff’s Office. Assistant United States Attorney Christiaan Highsmith prosecuted the case.