Eastern District of California

FRESNO, Calif. — A former IRS employee was arraigned Wednesday in Fresno on an indictment charging her with conspiracy to defraud the United States, theft of public funds, and unauthorized access of computer information, United States Attorney Benjamin B. Wagner announced.

On October 8, 2015, a federal grand jury returned an indictment against Maria Mora, 55, of Fresno, and her ex-husband, Uriel Perez, 51, of Spring, Texas. Both defendants were arrested Wednesday. Mora pleaded not guilty, and a status conference is scheduled for December 14, 2015. Perez was charged with five counts of theft of public funds, and he will make his initial appearance in Texas.

According to court documents, Mora, an IRS employee since 1993, conspired with Perez to defraud the United States by falsely claiming Perez’s niece as a dependent on his tax returns in order to qualify for the Earned Income Credit. Mora prepared false tax returns for Perez for tax years 2008 through 2012. When the IRS did not issue the tax refunds for the 2008, 2009, and 2010 tax years, Mora prepared and submitted forged letters allegedly from Perez’s sister, claiming that his niece was Perez’s dependent. Mora also used her position as an IRS employee to access without authority tax records of Perez’s sister and brother to further the scheme to defraud the United States and steal funds. In total, Mora and Perez stole approximately $13,000 in tax refunds from the United States.

This case is the product of an investigation by the United States Treasury Inspector General for Tax Administration. Assistant United States Attorney Mia A. Giacomazzi is prosecuting the case.

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

FRESNO, Calif. — Three Bakersfield residents were sentenced Tuesday by Senior United States District Judge Anthony W. Ishii in connection with a mortgage fraud scheme in Bakersfield, United States Attorney Benjamin B. Wagner announced.

Eliseo Jara Jr., 36, was sentenced to six and a half years in prison for conspiracy to commit bank fraud, mail fraud, and wire fraud, and was ordered to pay $4.3 million in restitution. Sergio Jara, 34, was sentenced to six and a half years in prison for conspiracy to commit bank fraud, mail fraud, and wire fraud, and was ordered to pay $3,249,624 in restitution. Melissa Rochelle Jara, 34, was sentenced to time served and five years on supervised release for wire fraud, and was ordered to pay $271,171 in restitution. The Jaras were also ordered to forfeit their interests in six properties in Bakersfield, a 2007 Lexus, and approximately $110,419 seized from a bank account, and to pay personal forfeiture money judgments of $5,664,250 as to Eliseo Jara, $4,743,500 as to Sergio Jara, and $534,750 as to Melissa Jara. Prior to sentencing, Sergio and Melissa Jara also deposited approximately $148,000 with the Court toward their restitution obligations.

According to court documents, from 2007 to 2010, the Jaras conspired with other defendants to use straw buyers to purchase residential properties in Bakersfield developed by Jara Brothers Investments (JBI), owned by Eliseo Jara and Sergio Jara, and Pershing Partners LLC, owned by co-defendant Lucia Chavez. The conspirators paid straw buyers to purchase the properties from JBI and Pershing Partners, and funded the purchases using loans they obtained for the straw buyers from lenders based on false and fraudulent loan applications. Eliseo Jara and Sergio Jara owned and operated JBI, Paragon Home Mortgage, and Paragon Realty, and developed and sold residential real properties in the Bakersfield area using these companies. Melissa Jara was employed as a real estate broker at Paragon Realty and also owned and operated a limited liability company through which she sold a real property in furtherance of the scheme to defraud.

The loan applications in the names of straw buyers frequently contained false statements concerning the straw buyers’ employment status, income, assets, intent to occupy the properties as their personal residences, and source of down payments for the purchase of the properties. The conspirators concealed from the lenders that the property developers funded certain of the straw buyers’ down payments. The conspirators also submitted false supporting documentation to lenders such as false and altered bank account statements purporting to show that straw buyers had high bank account balances, false verifications of the straw buyers’ bank account funds, false verifications of rent purporting to be from straw buyers’ landlords, false pay stubs, and false verifications of employment.

This case is the product of an investigation by the Internal Revenue Service - Criminal Investigation and the Federal Bureau of Investigation. Assistant U.S. Attorneys Kirk E. Sherriff and Henry Z. Carbajal III prosecuted the case.

Co-defendant Antonio Perez-Marcial was sentenced on May 12, 2014 to 46 months in prison, and co-defendant Arlene Jeanette Mojardin was sentenced on May 18, 2015 to 30 months in prison, for their roles in the conspiracy. Co-defendants Lucia Chavez, Joseph Chavez, and Candace Gonzales previously pleaded guilty to conspiracy to commit bank fraud, mail fraud, and wire fraud, and their sentencing hearings are set for October 19, 2015, as to Lucia and Joseph Chavez, and October 26, 2015, as to Candace Gonzales. Co-defendant Ricardo Salinas previously pleaded guilty to bank fraud, and his sentencing is also set for October 26, 2015.

A Colorado man was sentenced today to life in prison for kidnapping a toddler and 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 and Special Agent in Charge Ryan L. Spradlin of ICE-HSI San Francisco Office.

Shawn McCormack, 31, of Colorado Springs, Colorado, was found guilty in April 2015 by a federal jury of four counts of sexual exploitation of a child and two counts of kidnapping.  Senior U.S. District Judge Anthony W. Ishii of the Eastern District of California presided over the trial and imposed the sentence. 

“McCormack’s depraved actions in this case are the stuff of nightmares.  While posing as a trusted friend and house guest, McCormack kidnapped his hosts’ toddler child and sexually abused the child in local motels and parked cars,” said Assistant Attorney General Caldwell.  “Through tireless efforts, law enforcement was able to rescue the victim from further abuse and ensure that McCormack never again will victimize another child.” 

“McCormack’s acts were both vile and heart-breaking, and they may have continued undetected for years but for the imaginative, dogged, and painstaking work of the investigators who brought him to justice,” said U.S. Attorney Wagner.  “We are gratified by the sentence McCormack received today, which is both severe and just, and while the harm that he inflicted cannot be undone, we can be assured that he will not be able to inflict further harm upon our most vulnerable.” 

“The sexual exploitation of children is a heinous crime that leaves lifelong emotional scars on young victims,” said Special Agent in Charge Spradlin.  “It is our duty to protect those who cannot protect themselves.  Together with our law enforcement partners, we will continue to pursue child predators and make them accountable for their dark and monstrous deeds.”

According to evidence presented at trial, McCormack, feigning to be a friend, traveled to a couple’s residence in Bakersfield, California, and stayed as an overnight guest on multiple occasions.  During several of the overnight stays, in the middle of the night, McCormack removed the couple’s toddler from the house and sexually abused the toddler in nearby motels and other locations, and then returned the toddler to the house before the parents awoke.  The evidence demonstrated that McCormack photographed and recorded the sexual abuse and distributed the images and videos to others online, including to an undercover officer with the Toronto Police Services.  McCormack also recorded his sexual abuse of a second toddler and distributed those images as well.

The trial evidence showed that, in 2010, during forensic analysis of the computer of another individual, Homeland Security Investigations (HSI) agents in Boston, discovered images and recordings distributed by McCormack.  After the agents identified the date, time and motel room in which one of the videos had been produced, they learned that McCormack had rented that motel room on the night when the recording was created. 

This case is part of an ongoing HSI-led investigation being conducted by U.S. Immigration and Customs Enforcement’s Field Offices in Bakersfield, California; Colorado Springs, Colorado; and Boston, Massachusetts; the Bakersfield Police Department; the Colorado Springs Police Department; Toronto Police Services and the FBI.  This case was prosecuted by Trial Attorney Maureen C. Cain of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorneys Patrick R. Delahunty and Megan A.S. Richards of the Eastern District of California.  

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 U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims.  For more information about Project Safe Childhood, please visit www.justice.gov/psc.

FRESNO – Shawn McCormack, 31, of Colorado Springs, Colorado, was sentenced today by United States District Judge Anthony W. Ishii to life in prison for four counts of sexual exploitation of a child and two counts of kidnapping, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Benjamin B. Wagner and Special Agent in Charge Ryan L. Spradlin of ICE-HSI San Francisco Office.

McCormack was found guilty in April 2015 by a federal jury of kidnapping and producing child pornography involving two toddlers. According to evidence presented at trial, McCormack, feigning to be a friend, traveled to a couple’s residence in Bakersfield, and stayed as an overnight guest on multiple occasions. During several of the overnight stays, in the middle of the night, McCormack snuck the couple’s toddlers out of the house and recorded his sexual abuse of them at a variety of locations, including a nearby motel, outdoors and in his truck. McCormack then returned the toddlers to the house before the parents awoke. The evidence demonstrated that McCormack distributed the images and videos of his abuse to others online, including an undercover officer with the Toronto Police Services.

Homeland Security Investigations agents in Boston found images and recordings distributed by McCormack on a separate defendant’s computer in Massachusetts. The agents were able to identify the date, time and specific hotel room where one of the videos had been produced. When agents visited that hotel, they learned that McCormack had rented that hotel room on the night when the recording was created. During the investigation, agents uncovered evidence that McCormack had recorded his abuse of both of the couple’s children.

The case is part of an ongoing HSI-led investigation that originated in Boston in 2010 when the U.S. Attorney’s Office of the District of Massachusetts and HSI Boston arrested and convicted Robert Diduca on child pornography production charges. Forensic analysis of Diduca’s computer led investigators to the Netherlands where a Dutch national was arrested and charged with production, distribution and possession of child pornography, as well as the sexual assault of 87 minors. Since that time, a worldwide network of child pornographers has been, and continues to be, unraveled, as multiple offenders are prosecuted, including McCormack. Defendants and victims continue to be identified around the world. To date, more than 140 children have been rescued and 43 perpetrators arrested worldwide as a result.

“McCormack’s depraved actions in this case are the stuff of nightmares. While posing as a trusted friend and house guest, McCormack kidnapped his hosts’ toddler child and sexually abused the child in local motels and parked cars,” said Assistant Attorney General Caldwell. “Through tireless efforts, law enforcement was able to rescue the victim from further abuse and ensure that McCormack never again will victimize another child.”

“McCormack’s acts were both vile and heart-breaking, and they may have continued undetected for years but for the imaginative, dogged, and painstaking work of the investigators who brought him to justice,” said U.S. Attorney Wagner. “We are gratified by the sentence McCormack received today, which is both severe and just, and while the harm that he inflicted cannot be undone, we can be assured that he will not be able to inflict further harm upon our most vulnerable.”

“The sexual exploitation of children is a heinous crime that leaves lifelong emotional scars on young victims,” said HSI Special Agent in Charge Spradlin. “It is our duty to protect those who cannot protect themselves. Together with our law enforcement partners, we will continue to pursue child predators and make them accountable for their dark and monstrous deeds.”

This case was the product of an investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) field offices in Bakersfield, California; Colorado Springs, Colorado; and Boston, Massachusetts; the Bakersfield Police Department; the Colorado Springs Police Department; and the Toronto Police Services. Assistant U.S. Attorneys Patrick R. Delahunty and Megan A.S. Richards of the Eastern District of California and Trial Attorney Maureen C. Cain of the Criminal Division’s Child Exploitation and Obscenity Section prosecuted the case.

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

SACRAMENTO, Calif. — Denise Wasicki, 40, of Yuba City, was sentenced today by Chief U.S. District Judge Morrison C. England Jr. to two years and nine months in prison, to be followed by three years of supervised release, for two counts of mail fraud in a scheme to defraud a payroll staffing company out of more than $500,000, United States Attorney Benjamin B. Wagner announced.

According to court documents, Wasicki had been employed by a staffing and payroll services agency based in Hanover, Maryland to fill a temporary position at a hospital in Yuba City. When she was terminated by the hospital, Wasicki created a fictional company called Healthcare Quality Management Group (HQMG) with a fictional client that was purportedly a medical office in Yuba City. Posing as “Jackie Stemmons,” Wasicki engaged the staffing agency to provide staff for the medical office and gave them an alias she had used in the past, “Denise Erika Moutrey,” as the person who should be hired. Because Wasicki had been employed by the agency previously, posing as Moutrey, they were able to expedite her hiring and ultimately placed her in an office manager position.

Between July 28, 2009, and May 12, 2010, Wasicki sent time cards and requests for expense reimbursements to the agency for herself and for an assistant office manager at the fictional medical office. As part of the scheme, Wasicki sent the agency fraudulent checks to reimburse it for payroll services it provided, all of which were drawn on fictitious accounts and all of which bounced. As a result of her actions, the agency sustained a loss of approximately $400,000 and spent an additional $100,000 investigating the fraud.

This case is the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorney André M. Espinosa is prosecuting the case.

Wasicki is scheduled to self-surrender to begin serving her sentence on January 5, 2016.

FRESNO, Calif. — A federal grand jury returned a three-count indictment today against Rich Xiongpao, 42, of Fresno, charging him with conspiring to manufacture marijuana, manufacturing marijuana in connection with a large-scale cultivation operation in a national forest, and depredation of public lands and resources, United States Attorney Benjamin B. Wagner announced.

According to court documents, on September 29, 2015, Xiongpao was arrested after he was observed by U.S. Forest Service agents tending a marijuana site in the Sierra National Forest in Madera County. Agents removed approximately 428 marijuana plants from the site.

According to the criminal complaint filed in this case, the damage to the national forest land and resources caused by the marijuana cultivation operation will exceed $1,000. Throughout the site, multiple species of natural vegetation had been cut to accommodate the cultivation operation. Additionally, in order to water the marijuana cultivation, a water reservoir diverted the flow of pristine spring water from a riparian area to the site. A large amount of trash, numerous containers of chemicals, fertilizers, and unknown substances were found throughout the area.

This case is the product of an investigation by the U.S. Forest Service. Assistant United States Attorney Daniel Griffin is prosecuting the case.

Xiongpao is scheduled to be arraigned on the indictment on October 14, 2015, in federal court in Fresno. If convicted of the drug offenses, Xiongpao faces a minimum statutory penalty of five years and a maximum statutory penalty of 40 years in prison and a $5 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — A former web producer for KTXL FOX40, a Tribune Company-owned television station in Sacramento, was convicted today for his role in a conspiracy to hack into the servers of the Los Angeles Times and the Tribune Company, following an eight-day trial before U.S. District Judge Kimberly J. Mueller, United States Attorney Benjamin B. Wagner and FBI Special Agent in Charge Monica M. Miller announced.

Matthew Keys, 28, of Vacaville, was found guilty by a federal jury in Sacramento of one count of conspiracy to make unauthorized changes to the Tribune Company’s websites, and damage its computer systems; one count of transmitting malicious code; and one count of attempted transmission of malicious code.

“Although this case has drawn attention because of Matthew Keys’ employment in the news media, this was simply a case about a disgruntled employee who used his technical skills to taunt and torment his former employer,” said U.S. Attorney Wagner. “Although he did no lasting damage, Keys did interfere with the business of news organizations, and caused the Tribune Company to spend thousands of dollars protecting its servers. Those who use the Internet to carry out personal vendettas against former employers should know that there are consequences for such conduct.”

“This case demonstrates the FBI’s commitment to identify and investigate those who harass former employers by using insider knowledge to intentionally exploit computer systems—whether directly or by proxy—to damage the reputation and operations of a business,” said Special Agent in Charge Monica M. Miller of the Federal Bureau of Investigation’s Sacramento field office. “Individuals who use ‘bully’ tactics to attack computer networks will face justice for their actions.”

According to evidence presented at trial, in December 2010, Keys provided members of the hacker group Anonymous with login credentials for a computer server belonging to FOX40’s corporate parent, the Tribune Company. Keys identified himself on an Internet chat forum as a former Tribune Company employee and provided members of Anonymous with a login and password to the Tribune Company server. After providing login credentials, Keys encouraged the Anonymous members to disrupt several Tribune companies and urged that the Los Angeles Times should be “demolished.” According to the evidence at trial, at least one of the computer hackers used the credentials provided by Keys to log in to the Tribune Company server and make changes to the web version of a Los Angeles Times news feature. In addition, according to the trial evidence, Keys changed the access credentials of FOX40 employees, interfering with their ability to access company servers, and obtained email addresses for FOX40 viewers, to whom he sent disparaging emails about the company. Keys’ actions caused the defaced story to be on the mobile version of the L.A. Times for a day, and resulted in thousands of dollars in costs for the Tribune Company in responding to the breach of its systems by shutting backdoor access credentials and assessing the full extent of the damage.

The case is the product of an investigation by the Federal Bureau of Investigation. Deputy Chief James A. Silver of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorneys Matthew D. Segal and Paul A. Hemesath of the Eastern District of California are prosecuting the case.

Keys is scheduled to be sentenced on January 20, 2016 by Judge Mueller. The 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.

SACRAMENTO, Calif. — Cory Kasinger, 42, of Jackson, the Chief Operating Officer of Mariah Resources Inc., pleaded guilty today to one misdemeanor count of embezzling funds from a health care benefit program and agreed to pay $36,980 in restitution, United States Attorney Benjamin B. Wagner announced.

According to court documents, between March 1, 2010, and May 31, 2010, Kasinger withheld approximately $19,628 from the paychecks of Mariah Resources employees, which was to be applied towards the premiums of their health care benefit program. Instead of Kasinger paying the premiums, he returned these funds to the company’s general fund. As a result, the employees’ health care benefit program was terminated. The termination date was retroactive to March 1, 2010, which caused Mariah Resources employees to incur approximately $16,569 in out-of-pocket medical costs. Additionally, when the insurer sent $782 to Mariah Resources to reimburse former employees who were paying into the company’s COBRA program, Kasinger put the money into the general fund and did not pass it back to the former employees as he should have.

This case is the product of an investigation by the Department of Labor, Employee Benefits Security Administration. Special Assistant United States Attorney Elliot Wong is prosecuting the case.

Kasinger is scheduled to be sentenced on January 6, 2016 by United States Magistrate Judge Kendall J. Newman. Kasinger faces a maximum sentence of one year in prison, a fine of $100,000, and a one-year term of supervised release. 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.

SACRAMENTO, Calif. — The lead defendant in a shoplifting ring that stole over $2.5 million in retail goods and resold them on eBay was sentenced today to seven years in prison, United States Attorney Benjamin B. Wagner announced. A restitution hearing is set for December 1, 2015.

Jason Samuel Schroeder, 36, of Sacramento, is the sixth defendant sentenced to prison in this case. Kirk Arthell Sanderson, 37, of Walnut Creek, was previously sentenced to four years in prison; John Judah Young, 34, of Sacramento, was sentence to two and one half years in prison; and David Reed, 29, of Vacaville, was sentenced to one year in prison. Two others, Andrea Lynn Turner, 34, of Roseville, and Joshua Roy Payne, 30, of Vacaville, were also sentenced to two months in prison. Jason Nathaniel Reed, 36, of Portland, Oregon, is scheduled for sentencing later this year.

On March 3, 2015, Schroeder pleaded guilty to interstate transportation of stolen property. According to the plea agreement, in October 2012, a sporting goods company with retail stores in Sacramento called the FBI stating that an eBay account was listing items for sale it suspected were stolen. Follow-up investigation revealed that the account was controlled by Schroeder using co-defendant Young’s name, and since 2009, it listed more than 17,000 items for sale, including sporting goods, household items, recreational equipment and pet care products. Most of the items were listed as new or with tags. Virtually all of the items sold on the account were stolen by Schroeder, Young, or others, and were sold at a discount to buyers across the country.

The proceeds of the sales were deposited into a PayPal account also controlled by Schroeder and then laundered through ATM withdrawals, cash-back purchases, and the purchase of more than $600,000 in money orders. Surveillance of Schroeder revealed that he spent multiple hours a day traveling to different stores and appearing to steal a variety of items. Those items were later listed on his eBay account.

Wiretaps and surveillance also revealed the specific roles of other members of the conspiracy. According to court documents, David Reed assisted Schroeder with the packaging and shipment of the stolen merchandise. Sanderson assisted in moving items away from Schroeder’s residence when he learned of the federal investigation. Turner and Payne provided false statements to federal agents upon being interviewed regarding their assistance to Schroeder.

“This case is a result of a combined law enforcement effort against a criminal organization motivated by greed and profit,” said Thomas McMahon, Acting Special Agent in Charge, IRS Criminal Investigation. “These defendants stole millions of dollars from retailers, which ultimately got passed down to the American consumer. IRS Criminal Investigation will continue to provide its financial expertise as we work alongside our law enforcement partners to bring criminals to justice.”

“Schroeder—well known to the loss prevention professionals in California and other states—brazenly and habitually shoplifted from retailers for the sole purpose of selling the stolen merchandise to unsuspecting customers online. The ring’s impact was significant and forever changed how a variety of goods are displayed at retail locations in both states,” said Special Agent Brandon Simpson of the Federal Bureau of Investigation’s Sacramento field office. “We are thankful to IRS-Criminal Investigation, the United States Postal Inspection Service, and eBay for their partnership in this successful investigation.”

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 in law enforcement on this investigation and will continue to protect the public and the U.S. Mail against all forms of criminal misuse.”

This case is the product of an investigation by the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigation, and the United States Postal Inspection Service. Assistant United States Attorney Jared C. Dolan is prosecuting the case.

FRESNO, Calif. — Jonathan Cornelius Bourne, 59, of Mammoth Lakes, was arraigned today after a federal grand jury returned a 21-count indictment against him, charging him with violations of the Archeological Resources Protection Act, United States Attorney Benjamin B. Wagner announced.

According to counts one through eight of the indictment, in 2010 and 2011, Bourne transported archeological resources from Nevada into California that were found on public lands and were over 100 years old. Among the items removed were obsidian biface tools, Steatite pendants, and glass beads allegedly removed from a tribal cremation and burial site. Counts nine through 14 charge Bourne with unauthorized excavation and removal damage or defacement of archaeological resources in Death Valley National Park, Inyo National Forest, and Sierra National Forest. The Native American cultural artifacts taken in 2010, 2011, and 2014, such as dart points, stone tablets, and a juniper bow stave were over 100 years old.

According to counts 15 through 20 in the indictment, Bourne willfully injured property of the United States by excavating, removing damaging and defacing cultural artifacts on land administered by the United States Forest Service and the National Park Service in the Counties of Mono, Inyo, and Fresno.

At the arraignment, Bourne pleaded not guilty to the charges and was released on his own recognizance. His next court hearing is a status conference before United States Magistrate Judge Sheila Oberto on December 7, 2015.

This case is the product of an investigation by the United States Forest Service, National Park Service, and the Bureau of Land Management. Assistant United States Attorney Laurel J. Montoya is prosecuting the case.

If convicted, Bourne faces a maximum statutory penalty of 98 years in prison and a $2,030,000 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.

SACRAMENTO, Calif. — Kimberly Jones, 50, of West Sacramento, pleaded guilty today to wire fraud and agreed to submit to a restitution order of at least $1.5 million, United States Attorney Benjamin B. Wagner announced.

According to court documents, from September 2001 through August 2011, Jones was employed as a Senior Claims Representative, or claims adjuster, at Gallagher Bassett Services Inc. in its Sacramento office. Gallagher Bassett was a third-party administrator that managed, among other things, workers’ compensation claims in California on behalf of Pennsylvania Manufacturers’ Association Insurance Group (PMA). Co-defendant Marcus Buckley, 42, of Weatherford, Texas, played professional football in the National Football League between 1993 and 2000 for seven seasons with the New York Giants. During this time period, the Giants had workers’ compensation insurance coverage through PMA.

In 2006, Buckley filed a worker’s compensation claim against the Giants for cumulative stress injuries sustained while playing football, in part, in California. In November 2010, the claim was settled for $300,000.

After his claims had been settled, however, between late 2010 and June 2011, Buckley prepared and filed numerous additional requests for reimbursement under his closed claim. He prepared fictitious invoices and statements from medical providers for medical services purportedly provided to him and fictitious credit collection notices from collection agencies purportedly seeking payment from Buckley for past due medical bills. Buckley sent the fictitious invoices, statements, and credit collection letters to Jones who had Gallagher Bassett checks made payable to Buckley. In total, Buckley received more than $1,588,000 to which he was not entitled.

This case is the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorney Michael M. Beckwith is prosecuting the case.

Jones is scheduled to be sentenced on January 7, 2016, by United States District Judge Troy L. Nunley. Jones faces a maximum sentence of 20 years in prison, a fine of $250,000 or twice the gross gain or loss in the case, and a three-year term of supervised release. 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.

Charges against Buckley are pending. The charges are only allegations; he is presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — A federal grand jury returned an indictment today against Matthew D. Muller, 38, of South Lake Tahoe, charging him with one count of kidnapping, United States Attorney Benjamin B. Wagner announced.

According to court documents, it is alleged that in the early morning hours of March 23, 2015, Muller broke into a residence in Vallejo, restrained the male occupant and kidnapped the female occupant. It is further alleged that he demanded a $15,000 ransom, held her for two days, and ultimately released her in Huntington Beach. Muller was identified as a suspect in the Vallejo kidnapping following an investigation and his arrest on residential home-invasion burglary charges that occurred in Alameda County on June 5, 2015.

“The bizarre circumstances of the events in Vallejo in March complicated the investigation of this matter,” said U.S. Attorney Wagner. “But the Vallejo Police Department, the FBI, and our law enforcement allies in Alameda County have done excellent work in recent months to bring this investigation to a conclusion.”

This case is the product of an investigation by the Federal Bureau of Investigation, the Alameda County Sheriff’s Office, the Alameda County District Attorney’s Office, the Dublin Police Services and the Vallejo Police Department. Assistant United States Attorney Matthew D. Segal and Heiko P. Coppola are prosecuting the case.

Muller is currently being held in the Sacramento County Jail. He is scheduled to be arraigned on Monday, October 5, 2015, before United States Magistrate Judge Kendall J. Newman at 2:00 p.m.

If convicted, Muller 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. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — United States District Judge Morrison C. England Jr. sentenced Mohammad Nawaz Khan, 60, today to 12 and a half years in prison for his role in a $14 million unemployment and disability benefits fraud scheme, United States Attorney Benjamin B. Wagner announced.

In sentencing, Judge England said that this was “one of the longest-running, most sophisticated fraud schemes that I have ever seen.” Judge England ordered Khan to be taken into custody at the end of today’s hearing.

According to court documents, Mohammad Nawaz Khan and other family members operated a scheme that sold fake paystubs to other people in the community and used the companies they controlled to report false wages for the individuals who purchased those paystubs. At times the Khans instructed the purchasers how to use the fake paystubs to fraudulently claim unemployment and disability benefits. The Khans set up a storefront in Yuba City and sold the fraudulent paystubs on a walk-in basis. Purchasers found out about the opportunity to commit fraud with the Khans in a number of ways. Some purchasers approached the Khans looking for work and were told to commit fraud instead. Over the course of the conspiracy, the defendants reported wages for over 400 separate individuals that resulted in more than 2,000 fraudulent claims for unemployment and disability benefits. The loss in this case is more than $14 million.

U.S. Attorney Wagner stated: “This defendant was part of a massive and brazen fraud that corrupted many members of their community. The fraud occurred over the course of decades and involved hundreds of individuals who, but for the defendants running the scheme, would likely never have become involved in criminal conduct.”

“Khan and his co-conspirators defrauded the State of California for more than 20 years,” said Special Agent in Charge Monica Miller of the FBI's Sacramento field office. “He victimized California taxpayers and placed a burden on deserving benefits claimants. This sentence is a fitting reflection of the severity of his crimes and the efforts of the FBI and our partners to end to Khan’s scheme.”

“The Employment Development Department is proud to have partnered with the investigations that stopped this criminal defrauding of programs so vital to unemployed and disabled workers,” said EDD’s Director Patrick W Henning Jr.

“Today’s sentencing sends a powerful message that combating unemployment insurance fraud remains a high priority for the Office of Inspector General. We will continue to work with our law enforcement partners to safeguard unemployment insurance benefits from illicit enrichment schemes and conspiracies carried out against Department of Labor programs,” stated Abel Salinas, Special Agent-in-Charge, U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations in Los Angeles.

To date, 28 individuals have been charged and 24 have pleaded guilty to various offenses connected to the scheme. Last week, Judge England sentenced co-defendants Mohammad Adnan Khan, 35, of Live Oak, to nine years in prison; Iqila Begum Khan, 34, of Live Oak, to five years in prison; and Mohammad Shahbaz Khan, 50, of Yuba City, to seven years and three months in prison and a $50,000 fine. Each was also ordered to serve a term of three years of supervised release following the service of their prison terms. A hearing will be held November 5, 2015 to determine the amount of restitution owed to the California Employment Development Department. Parole has been abolished in the federal system, and each defendant will be required to serve at least 85 percent of the prison time imposed.

This case is the product of an investigation by the Federal Bureau of Investigation; the U.S. Department of Labor, Office of Inspector General; and the California Employment Development Department, Investigations Division. Assistant United States Attorneys Jared C. Dolan and Sherry D. Haus are prosecuting the case.

SACRAMENTO, Calif. — DuWayne LeDoux, 55, of Kodiak, Alaska, pleaded guilty today to 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 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 an island off the southern coast of Alaska, with approximately 14,000 residents.

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.

Co-defendant MacDougal pleaded guilty in November 2012, and is currently serving a five-year sentence.

LeDoux is scheduled to be sentenced by United States District Judge Troy L. Nunley on January 7, 2016. LeDoux faces a maximum statutory penalty 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.

SACRAMENTO—Federal inmate Joseph Cabrera Sablan, 47, was sentenced today to life in prison without the possibility of release for the murder of United States Correctional Officer Jose Rivera, U.S. Attorney Benjamin Wagner announced.

On July 22, 2015, Sablan pleaded guilty to murdering Officer Rivera. According to court documents, on June 20, 2008, Officer Rivera was conducting his daily count at the United States Penitentiary in Atwater when Sablan attacked him with an eight‑inch homemade knife. Officer Rivera tried to flee, but was knocked backwards by Sablan and tackled by Sablan’s co-defendant, James Ninete Leon Guerrero. Leon Guerrero held Rivera down as Sablan stabbed him. Sablan and Leon Guerrero were indicted for the murder on August 14, 2008, in Fresno, but the case was transferred to Los Angeles in the Central District of California on December 19, 2014. On May 30, 2014, Leon Guerrero was sentenced to life in prison without the possibility of release for his part in the murder.

“With today’s sentencing, both of the defendants who carried out this reprehensible and senseless act have received life sentences without the possibility of release, and have been held accountable,” U.S. Attorney Wagner stated. “Those who work within our correctional facilities walk in harm’s way every day, and when one of them is attacked, we will respond vigorously.”

The case was investigated by the Bureau of Prisons and the Federal Bureau of Investigation. Assistant U.S. Attorney Duce Rice of the Eastern District of California and Trial Attorney Robert Feitel of the Criminal Division’s Capital Case Section prosecuted the case.

FRESNO, Calif. -- Tony Huy Havens, 42, of Modesto, pleaded guilty today to mail fraud and wire fraud in two mortgage fraud schemes, United States Attorney Benjamin B. Wagner announced.

According to court documents, in the first scheme Havens devised an “advance fee” scheme that targeted victims in at least eight states who were seeking multimillion dollar loans for large construction projects that were in danger of foreclosure. Havens provided the victims with fraudulent documents that showed a third-party lender was prepared to make a loan to the victim. On Havens' instructions, the victims wired money into a bank account controlled by Havens to pay in advance certain costs associated with the loans. No loans were ever made. In total, Havens represented that he could arrange at least $1.1 billion in financing for at least 15 victim borrowers and collected at least $248,750 by wire transfers from them.

According to court documents, in the second scheme Havens arranged to purchase a single-family residence in Modesto using two relatives as straw buyers. He obtained a loan in the name of the straw buyers that exceeded the actual selling price of the property and arranged to have a portion of the purchase price sent back to him, which he used as the down payment for the purchase.

These cases are the product of investigations by the Federal Bureau of Investigation, the Stanislaus County District Attorney's Office, and the Federal Housing Finance Agency, Office of Inspector General. Assistant United States Attorneys Mark J. McKeon and Mia Giacomazzi are prosecuting the cases.

Havens is scheduled to be sentenced by United States District Judge Lawrence J. O'Neill on January 11, 2016. Havens 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.

FRESNO, Calif. —Sarith Chim, 34, of Long Beach, was sentenced today to six years and four months in prison by U.S. District Judge Anthony W. Ishii for conspiring to distribute oxycodone and hydrocodone pills, United States Attorney Benjamin B. Wagner announced.

According to court documents, in April 11, 2013, Chim and his co-defendants were indicted for a scheme where the defendants obtained prescriptions for oxycodone and hydrocodone from a doctor in Visalia, filled those prescriptions at pharmacies in Modesto, and then transported and mailed the pills to others involved in the conspiracy in Washington state for distribution on the black market. After illegally selling the pills, the defendants deposited the cash proceeds of the sales into bank accounts held by Chim and co‑defendants in California from which the funds were then withdrawn by Chim. Deposits and withdrawals were made in amounts of $10,000 or less to prevent Currency Transactions Reports from being filed by the banks on their cash deposits. Banks are required to file these reports on transactions greater than $10,000, and the reports are filed with the Department of the Treasury and are made available to law enforcement.

Co-defendants in this case were sentenced as follows:

David Ruem, 10 years in prison;

Phary Chim, four years and three months in prison;

Sdey Chim, four years in prison;

Chanrath Yath, three years and four months in prison;

Chanrou Yath, three years in prison;

Phally Thach, 2.5 years in prison;

Raeb Chou, two years in prison;

Loc Huu Chau, one year in prison;

Cindy Doeum, three years of probation; and

Chantha Chim, three years of probation.

In addition, the doctor responsible for writing the prescriptions to the defendants in this case, Terrell Brown, 63, was sentenced to by United States District Judge Lawrence J. O’Neill to four years and nine months in prison for illegally distributing oxycodone and structuring financial transactions. He is currently in federal custody.

One remaining defendant, Say Eng, the mother of Sarith Chim, is scheduled for trial on March 29, 2016. The charges against her are only allegations; she is presumed innocent until and unless proven guilty beyond a reasonable doubt.

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. Attorney Grant B. Rabenn is prosecuting the case.

FRESNO, Calif. — Barry Lee Bowser Jr., 52, of Bakersfield, was sentenced today to 21 months in prison for shining a powerful green laser at the pilot of a Kern County Sheriff’s helicopter, United States Attorney Benjamin B. Wagner announced.

In June, a federal jury found Bowser guilty of aiming the beam of a laser at Air-1, a Kern County Sheriff’s helicopter that was providing support to ground units responding to a man armed with a gun. At trial, the evidence established that the mission was diverted when the pilot of Air-1 was struck by direct hits from a powerful green laser that illuminated the cockpit and tracked the aircraft near the approach path to Meadows Field Airport. The laser strikes caused the pilot to experience flash blindness, eye discomfort, and pain that lasted several hours.

In imposing sentence, U.S. District Judge Lawrence J. O’Neill found that Bowser had obstructed justice before trial by concealing the laser and providing false statements to law enforcement and at trial through his false testimony about the offense.

The federal statute used to charge Bowser is part of legislation signed into law in 2012 by President Obama that makes it a federal crime to knowingly aim the beam of a laser pointer at an aircraft or its flight path. 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 (FAA) 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 laser incidents, with Bakersfield and Fresno leading in the number of reported incidents. Lasers can cause visual interference even at great distances and can completely incapacitate pilots who are trying to fly safely to their destination. Laser strikes pose a serious threat to air safety, endangering crew members, passengers and people on the ground.

The case against Bowser was investigated by the Federal Bureau of Investigation, the Kern County Sheriff’s Office, and the Bakersfield Police Department. Assistant U.S. Attorney Karen Escobar and Special Assistant U.S. Attorney Bayleigh Pettigrew prosecuted the case.

A federal grand jury returned a four-count indictment today against Justin Whittington, 24, of Bakersfield, California, charging him with interfering with a person’s housing rights because of his race, color or national origin by use of force or threat of force, use of a firearm during a crime of violence, unlawful possession of a prohibited firearm and making a false statement to a special agent of the FBI, announced Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division, and U. S. Attorney Benjamin B. Wagner of the Eastern District of California.

According to court documents, on Dec. 19, 2012, Whittington shouted racist slurs at a Latino man outside the Latino man’s home in Oildale, California, and fired a sawed off shot gun in an attempt to intimidate and interfere with the victim’s occupancy of his home because of his race, color or national origin.

This case is the product of an investigation by the FBI and the Kern County, California, Sheriff’s Office. Trial Attorney Samantha Trepel of the Justice Department’s Civil Rights Division and Assistant U. S. Attorney Brian K. Delaney of the Eastern District of California are prosecuting the case.

If convicted, Whittington faces a maximum statutory penalty of life in prison and a $250,000 fine.

An indictment is merely an accusation, and the defendant is presumed innocent unless and until proven guilty.

BAKERSFIELD, Calif. — Justin Whittington, 24, of Bakersfield, was arrested today charged with interfering with a person’s housing rights because of his race, color, or national origin by use of force or threat of force, use of a firearm during a crime of violence, unlawful possession of a prohibited firearm, and making a false statement to a special agent of the Federal Bureau of Investigation, announced Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division, and U.S. Attorney Benjamin B. Wagner.

On September 24, 2015, a federal grand jury returned the four-count indictment, which was unsealed after Whittington’s arrest. According to the indictment, on December 19, 2012, Whittington shouted racist slurs and fired a sawed-off shotgun at a Latino man while the man and his family were standing outside their home in Oildale. The indictment alleges that Whittington took these actions in an attempt to intimidate and interfere with the victim’s occupancy of his home because of the victim’s race, color or national origin.

The indictment further states that Whittington later made false statements to an FBI agent when he falsely claimed that on the evening of the incident, he had been paid by someone to keep the sawed-off shotgun in the trunk of his car.

“The use of racially motivated violence and threats of violence to intimidate persons in connection with their choice of housing is a criminal act,” said United States Attorney Wagner. “Investigating and prosecuting those who violate the civil rights of others will continue to be one of the core missions of this office.”

This case is the product of an investigation by the Federal Bureau of Investigation and the Kern County Sheriff’s Office. Assistant U.S. Attorney Brian K. Delaney is prosecuting the case with the assistance of Trial Attorney Samantha Trepel of the Justice Department’s Civil Rights Division.

If convicted, Whittington 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. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — Four residents of Sutter County, California were sentenced to prison today for their roles in a $14 million unemployment and disability benefits fraud scheme based out of Yuba City and Live Oak, California, United States Attorney Benjamin B. Wagner announced.

United States District Judge Morrison C. England Jr. sentenced Mohammad Adnan Khan, 35, of Live Oak, to nine years in prison; Iqila Begum Khan, 32, of Live Oak, to five years in prison; and Mohammad Shahbaz Khan, 50, of Yuba City, to seven years and three months in prison and a $50,000 fine. Each was also ordered to serve a term of three years of supervised release following the service of their prison terms. A hearing will be held November 5, 2015 to determine the amount of restitution owed to the California Employment Development Department. Parole has been abolished in the federal system, and each defendant will be required to serve at least 85 percent of the prison time imposed. A fourth defendant, Mohammad Nawaz Khan, 60, is scheduled to be sentenced on October 1, 2015.

According to court documents, the Khans sold fake paystubs to other people in the community and used the companies they controlled to report false wages for the individuals who purchased those paystubs. At times the Khans instructed the purchasers how to use the fake paystubs to fraudulently claim unemployment and disability benefits. The Khans set up a storefront in Yuba City and sold the fraudulent paystubs on a walk-in basis. Purchasers found out about the opportunity to commit fraud with the Khans in a number of ways. Some purchasers approached the Khans looking for work and were told to commit fraud instead. Others learned of the fraud at public places in the community, like the grocery store.

Over the course of the conspiracy, the defendants reported wages for over 400 separate individuals that resulted in more than 2,000 fraudulent claims for unemployment and disability benefits. The loss in this case is more than $14 million. To date, 28 individuals have been charged and 24 have pleaded guilty to various offenses connected to the scheme.

U.S. Attorney Wagner stated: “The defendants sentenced today committed a massive and brazen fraud that corrupted many members of their community. Collectively, their conduct occurred over the course of decades and involved hundreds of individuals who, but for the defendants’ conspiracy, would likely never have become involved in criminal conduct.”

“The scheme which led to these sentences involved more than bending a rule or exaggerating a claim,” stated Monica Miller, Special Agent in Charge of the Sacramento FBI Field Office. “It was the systematic fabrication of employment histories on a massive scale. I am proud of the work the FBI and our partners on this investigation. By working together, we all put a stop to the scheme which stole money intended for people who earned support from the state in a time of need.”

“This week’s sentencings send a powerful message that combating unemployment insurance fraud remains a high priority for the Office of Inspector General. We will continue to work with our law enforcement partners to safeguard unemployment insurance benefits from illicit enrichment schemes and conspiracies carried out against Department of Labor programs” stated Abel Salinas, Special Agent-in-Charge, U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations in Los Angeles.

“To defraud vital programs that serve as a lifeline for unemployed and disabled workers is unconscionable,” said EDD Director Patrick W. Henning, Jr. “Today’s sentencing highlights the commitment of EDD investigators, the U.S. Attorney’s Office, and our law enforcement partners to safeguard these programs.”

Of the 28 individuals, charged in this investigation, three remain pending trial. A trial date is set for Mohammad Riaz Khan, Mohammad Shahbaz Khan, and Harjit Johal on November 10, 2015, at 9:00 a.m. before United States District Judge Garland E. Burrell Jr. The charges against those individuals are only allegations; they are presumed innocent until and unless proven guilty beyond a reasonable doubt.

This case is the product of an investigation by the Federal Bureau of Investigation; the U.S. Department of Labor, Office of Inspector General; and the California Employment Development Department, Investigations Division. Assistant United States Attorneys Jared C. Dolan and Sherry D. Haus are prosecuting the case.

FRESNO, Calif. — A federal grand jury returned a seven-count indictment today against Juan Penaloza-Ramirez, aka Juan Penaloza-Herrera, aka Juan Penaloza (Penaloza), 44, of Michoacán, Mexico, residing in Taft, California, and Russell Lee Riggs, 67, of Weldon, charging them with conspiring to manufacture, distribute and possess with intent to distribute, manufacturing, and two counts of possessing with intent to distribute marijuana in connection with a large-scale cultivation operation in the Fay Creek drainage in Tulare and Kern Counties in the Sequoia National Forest, United States Attorney Benjamin B. Wagner announced. Penaloza was also charged with damaging public land and natural resources as a result of the marijuana cultivation activities and being an illegal alien in possession of a firearm. Riggs was charged separately with possessing an unregistered short-barreled shotgun.

According to court documents, it is alleged that Penaloza and Riggs were supplying material, equipment, and personnel to a cultivation site at Fay Creek drainage, which consisted of over 3,000 marijuana plants, and were also responsible for transporting processed marijuana away from the grow site. It is further alleged that the marijuana cultivation operation caused extensive damage to the land and natural resources. Fay Creek supports a variety of ecosystems and resources, including riparian habitat supporting trout, wildflowers and grasses, and willow, alder and cottonwood trees. Fay Creek also serves as the primary drinking water source for many wildlife in the area. Springs were dammed and diverted to irrigate the marijuana plants and large amounts of trash were scattered throughout, including in a flowing stream.

This case is the product of an investigation by the U.S. Forest Service, the U.S. Drug Enforcement Administration, the Bureau of Land Management, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Bureau of Alcohol, Tobacco Firearms and Explosives, the Southern Tri-County High Intensity Drug Trafficking Area (HIDTA) task force, California Department of Justice’s Campaign Against Marijuana Planting (CAMP), and the Kern County Sheriff’s Office. Assistant United States Attorney Karen Escobar is prosecuting the case.

Penaloza and Riggs were ordered detained and are scheduled for arraignment on the indictment on September 28, 2015, in federal court in Fresno. If convicted of the most serious drug offenses as charged in counts one through three, Penaloza faces a mandatory minimum statutory penalty of 10 years and a maximum statutory penalty of life in prison and a $10 million fine, and Riggs faces a mandatory minimum statutory penalty of five years and a maximum statutory penalty of 40 years in prison and a $5 million fine. If convicted of the environmental crime, Penaloza faces a maximum statutory penalty of 10 years in prison and a $250,000 fine. If convicted of the firearms offenses, the defendants face a maximum statutory penalty of 10 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.

SACRAMENTO, Calif. — Three persons were arrested today on felony charges contained in a 42-count indictment returned by a federal grand jury in Sacramento on September 10, 2015, United States Attorney Benjamin B. Wagner announced.

The indictment, unsealed today, charges John Michael DiChiara, 57, of Nevada City; James C. Castle, 51, formerly of Santa Rosa; Remus A. Kirkpatrick, 58, formerly of Oceanside; George B. Larsen, 54, formerly of San Rafael; Laura Pezzi, 59, of Roseville; Larry Todt, 63, formerly of Malibu; and Michael Romano, 68, of Benicia, charging them with conspiracy, bank fraud, false making of documents, and money laundering. Tisha Trites, 49, and Todd Smith, 44, both of San Diego, pleaded guilty to related charges before U.S. District Judge Garland E. Burrell Jr. on September 4, 2015.

DiChiara was arrested today in Cool, and Pezzi and Romano were arrested at their homes. The other four defendants listed in the indictment have yet to be arrested.

According to the indictment, DiChiara held himself out as the Archbishop of a spiritual organization named Shon-te-East-a, Walks With Spirit, the mission of which was to help individuals spiritually by alleviating them of their home mortgages. DiChiara and Castle (along with Trites who pleaded guilty to a related charge) are alleged to have orchestrated a mortgage-elimination program that fraudulently altered the chain of title on residential properties, selling the properties, and receiving the sales proceeds. Kirkpatrick, Larsen, Todt, Romano, and others allegedly recruited homeowners into the program with the promise of relief from foreclosure and a share of the sales proceeds. DiChiara and others used Shon-te-East to control the sale of the properties.

The indictment alleges that, once the homeowners were enrolled in the program, Pezzi and others created fictitious deeds of trust, a falsely made deed of reconveyance, and, where necessary, a falsely made notice of rescission of notice of default. The fictitious deed of trust was recorded at the county recorder’s office, and gave the appearance that the homeowner had refinanced the mortgage with a new lender. Todd Smith (who pleaded guilty to one count of conspiracy) or an entity controlled by the defendants was listed as the new lender, ensuring that when the properties were sold, the defendants would receive the sales proceeds. The defendants then caused to be recorded at the county recorder’s office a falsely made deed of reconveyance, indicating that the mortgage debt had been repaid to the financial institution holding the mortgage and reconveying title back to the homeowner. With these fraudulent documents on file at the county recorder’s office, a title search on the property would give the impression that the homeowner had refinanced, and no other debt was owing on the property. When the defendants caused the sale of these properties, they were able to divert the sale proceeds away from the lending institutions to their own benefit.

The defendants are alleged to have sold 37 properties through the mortgage elimination program, and attempted to sell at least an additional 97 properties, obtaining profits in excess of $8 million. They attempted to extinguish in excess of $60 million in legitimate mortgage loans.

This case is the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorney Audrey Hemesath is prosecuting the case.

If convicted of the conspiracy count, the defendants face a maximum penalty of five years in prison and a $250,000 fine. The maximum penalty for bank fraud is 30 years and a $1 million fine. The maximum penalty for false making of documents is 10 years and a $250,000 fine. The maximum penalty for money laundering is 10 years and an additional fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. —John Steven Keplinger, 56, of Stockton, pleaded guilty today to mail fraud in connection with an auto engine scam, United States Attorney Benjamin B. Wagner announced.

According to court documents, from 2010 to 2014, Keplinger carried out a fraud scheme by purporting to sell used auto engines from Japan, but failing to provide customers what he promised. Over 300 paying customers across 44 states and the District of Columbia were defrauded. Keplinger used three companies and websites to carry out the fraud scheme: Rising Sun Engines Inc. (www.risingsunengines.com), Shop 4 Engines LP (shop‑4‑engines.com), and Your Parts Manager (yourpartsmanager.com). Most of the time, Keplinger’s customers paid by check sent via UPS. After Keplinger accepted payment, he either sent no engine at all or sent the customer a defective engine obtained in the United States, often from a junkyard. United States Customs and Border Protection records indicate that Keplinger had stopped importing engines in 2007. The total estimated loss from Keplinger’s fraud is approximately $470,000.

This case is the product of an investigation by the Federal Bureau of Investigation and the United States Postal Inspection Service, with assistance from the San Joaquin County District Attorney’s Office and the California Bureau of Automotive Repair. Assistant United States Attorney Christopher S. Hales is prosecuting the case.

Keplinger is currently in custody. He is scheduled to be sentenced by United States District Judge Kimberly J. Mueller on December 16, 2015. Keplinger 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.

FRESNO, Calif. — Two Bakersfield residents pleaded guilty today to drug trafficking offenses, United States Attorney Benjamin B. Wagner announced.

Guillermo Magallanes, 36, pleaded guilty to conspiracy to distribute methamphetamine, and Pasqual Gonzales Magallanes, 44, pleaded guilty to distribution of methamphetamine.

According to court documents, the defendants conspired with Juan Lascano Jr. 32, of Bakersfield, to distribute pound-quantities of methamphetamine in the Bakersfield area. In addition to the criminal charges, the United States is seeking the forfeiture of $31, 242, a 2014 Lexus IS250 F Sport, and a 2012 Acura TL sedan as proceeds of the illegal drug trafficking activity. Lascano pleaded guilty on July 27, 2015, to distribution of methamphetamine.

This case is the product of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation by: the Drug Enforcement Administration, the Federal Bureau of Investigation, the Kern County Sheriff’s Office, and the Bakersfield Police Department. Assistant United States Attorney Brian K. Delaney is prosecuting the case.

Guillermo Magallanes and Pasqual Gonzales Magallanes are scheduled to be sentenced by Judge Lawrence J. O'Neill on December 14, 2015. Lascano is scheduled to be sentenced October 19, 2015. Guillermo Magallanes faces a maximum statutory penalty of life in prison and a $5 million fine and Pasqual Gonzales Magallanes and Juan Lascano Jr. face a maximum statutory penalty of 40 years in prison and a $2 million fine. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

FRESNO, Calif. —Jose Luis Montoya-Salazar, aka Rafael Salazar-Sanchez (Montoya), 43, a native and citizen of Mexico, was sentenced today to five years in prison for conspiring with Jimmy Gil, 35, of Shafter; and Luis Ricardo Eslava-Corral (Eslava), 42, of Sinaloa, Mexico, to import, distribute, and possess with intent to distribute 38 kilograms, or about 84 pounds, of cocaine, United States Attorney Benjamin B. Wagner announced. In a prior civil proceeding, U.S. District Judge Lawrence J. O’Neill ordered the forfeiture of $3,104,661 in cash that drug agents seized during the investigation of the criminal case.

Montoya’s sentence follows his guilty plea in May. In pleading guilty, Montoya admitted that he had conspired to offload the cocaine in Bakersfield that had been smuggled into the United States from Mexico. Follow-up investigation resulted in the seizure of over $3 million in cash hidden in an asphalt roller. The seized cocaine has a street value of over $3 million.

On July 27, 2015, Gil was sentenced to five years in prison, and on July 20, 2015, Eslava was sentenced to 20 months in prison.

This case was the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the U.S. Drug Enforcement Administration, the Southern Tri-County High Intensity Drug Trafficking Area (HIDTA) task force, the Kern County Sheriff’s Office, the Tulare County Sheriff’s Office, and the Bakersfield Police Department. Assistant United States Attorney Karen Escobar prosecuted the criminal case, and Assistant United States Attorney Kevin Khasigian handled the civil forfeiture proceeding.

SACRAMENTO, Calif. — Attorney General Loretta Lynch today announced that the Justice Department has awarded grants totaling more than $23.2 million to 73 local and tribal agencies in 32 states to expand the use of body-worn cameras and explore their impact. The body-worn camera pilot program announced in May 2015 includes $19.3 million to purchase body-worn cameras, $2 million for training and technical assistance and $1.9 million to examine the impact of their use. The grants, awarded by the department’s Office of Justice Programs (OJP), build on President Obama’s proposal to purchase 50,000 body-worn cameras for law enforcement agencies within three years. In the Eastern District of California, the City of Sacramento received a substantial grant under the program.

“This vital pilot program is designed to assist local jurisdictions that are interested in exploring and expanding the use of body-worn cameras in order to enhance transparency, accountability and credibility,” said Attorney General Lynch. “The impact of body-worn cameras touches on a range of outcomes that build upon efforts to mend the fabric of trust, respect and common purpose that all communities need to thrive.”

The grants, which require a 50/50 in-kind or cash match, can be used to purchase equipment and require that applicants establish a strong implementation plan and a robust training policy before purchasing cameras. Each agency awarded a grant is responsible for developing a plan for long-term storage, including the cost of storing data.

OJP’s Bureau of Justice Statistics is collecting data on body-worn camera usage through surveys of law enforcement agencies.  It is also designing data collection forms for future surveys of prosecutors and public defenders to measure how body-worn camera footage is being used by the courts in criminal cases.

For additional information about the BWC Pilot Implementation Program, visit http://www.bja.gov/bwc/pdfs/BWCPIP-Award-Fact-Sheet.pdf. More information about OJP can be found at www.ojp.gov.

SACRAMENTO, Calif. — Today, U.S. Attorney General Loretta Lynch announced Office of Community Oriented Policing Services (COPS Office) funding awards to 10 cities in the Eastern District of California, aimed at creating, and in some cases protecting, 47 law enforcement positions. Over $107 million will be awarded nationally, through the COPS Hiring Program, including $7,651,542 for local law enforcement agencies in the Eastern District of California.

This year’s grantees include the following jurisdictions, with funding for the number of positions noted: Avenal (1), Dinuba (1), Fresno (15), Mendota (1), Sacramento (15), Vacaville (2), Vallejo (6), Wasco (1), West Sacramento (2), and Woodland (3).

“The COPS Office is pleased to assist local law enforcement agencies throughout the country in addressing their most critical public safety issues,” said Ronald L. Davis, Director of the COPS Office. “These grants are not simply about putting more officers on the street, they are about expanding the capacity of law enforcement agencies to engage in community policing.”

CHP provides grants to state, local and tribal law enforcement agencies to hire or rehire community policing officers. The program provides salaries and benefits for officer and deputy hires for three years.

“These grants will provide meaningful assistance to law enforcement agencies large and small in this region,” said United States Attorney Benjamin B. Wagner.

Priority consideration was given this year to agencies that selected any of the Building Trust focus areas or School Based Policing through School Resource Officers.  All applicants were encouraged to refer to the report of the President's Task Force on 21st Century Policing for suggested actions to incorporate into their proposed community policing strategy.

The COPS Office is a federal agency within the U.S. Department of Justice responsible for advancing community policing nationwide. Since 1995, COPS has invested over $14 billion to advance community policing, including grants awarded to more than 13,000 state, local, and tribal law enforcement agencies to fund the hiring and redeployment of approximately 127,000 officers and provide a variety of knowledge resource products including publications, training, and technical assistance.

For the entire list of grantees and additional information about the 2015 COPS Hiring Program, visit the COPS website at www.cops.usdoj.gov.

FRESNO, Calif. — Manuel Riviera-Felix, aka Felipe Garcia, 27, of Mexico, was sentenced today by United States District Judge Lawrence J. O'Neill to 10 years and 11 months in prison for distribution of methamphetamine, United States Attorney Benjamin B. Wagner announced.

According to court documents, Rivera-Felix was a leader of a large scale drug organization in Bakersfield responsible for the importation and sale of large quantities of methamphetamine. Between March 1, 2014, and July 10, 2014, Rivera-Felix conspired with Juan Angel Lopez, 33, of Bakersfield, Edi Vega Bustamante 22, of Mexico, and others to distribute up to 45 kilograms of methamphetamine. Lopez pleaded guilty to conspiring to distribute and possess with intent to distribute methamphetamine and was sentenced to seven years and six months in prison. Bustamante pleaded guilty to possession with intent to distribute methamphetamine and was sentenced to five years in prison.

This case was the product of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation by the Drug Enforcement Administration, the Kern County Sheriff’s Office, the Bakersfield Police Department, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Southern Tri-County High Intensity Drug Trafficking Area Task Force. Assistant United States Attorney Brian K. Delaney prosecuted the case.

FRESNO, Calif. — Four of seven defendants were arrested today on federal charges related to their alleged involvement in a scheme that defrauded insurance companies of at least $1.2 million by staging car crashes and submitting false insurance claims, United States Attorney Benjamin B. Wagner announced.

A federal grand jury returned the sealed indictment on August 27, 2015, which was unsealed after the arrests today.

The indictment charges Juan Ortiz Rivas, 38, of Ceres; Oscar Diaz Landa, 45, of San Jose; Victor Hugo Soriano-Villafan, 25, of Modesto; Liobigildo Vargas, 45, of Turlock; Juan Marquez Cadenas, 29, of Patterson; Cristopher Santiago Sanchez-Becerra, 31, of Stockton; and, Alfonso Apu, 47, of Modesto with conspiracy to commit mail fraud and mail fraud. Landa, Sanchez-Becerra, and Apu were arrested this morning at their residences, and Vargas was arrested at his business Vargas Auto Body in Turlock. Soriano-Villafan was arrested last week in Las Vegas and arraigned in U.S. District Court in Fresno.

According to court documents, from October 2011 until August 2014, the defendants conspired to stage dozens of car accidents and submit false claims seeking compensation for the damage caused by the staged accidents. In each staged accident, the defendants damaged two or three vehicles and caused about $5,000 to $10,000 of damage to each vehicle. After each staged collision, all parties involved submitted a similar cover story to an insurer that concealed the true cause of the accident and commonly used aliases, false identities, and false addresses. The defendants usually used different vehicles in the staged collisions by obtaining many different vehicles and using false identities to both register the vehicles with the Department of Motor Vehicles and obtain insurance policies for the vehicles.

The indictment further alleges that the defendants were able to repeat the scheme in dozens of crashes by recruiting other individuals in the staged collisions. These individuals would allow their vehicles to be damaged in a staged collision and submit their own claim for damages after receiving instructions from the defendants about the cover story to use. In many instances, false claims were submitted to the recruited individual’s insurance company. Commonly, the defendants would also offer to repair the recruited individual’s vehicle at one of their automobile repair shops, usually with less-than-complete repair work, for a fee less than the payment from an insurance company on the damaged vehicle.

This case is the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the California Department of Insurance, Fraud Division. Assistant United States Attorneys Patrick R. Delahunty and Henry Z. Carbajal III are prosecuting the case.

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

FRESNO, Calif. — Nicholas Huerta, 33, of Fresno, pleaded guilty today to one count of wire fraud for a fraud scheme involving military recruiting bonuses, United States Attorney Benjamin B. Wagner announced.

According to court documents, the United States Army contracted with Document and Packaging Broker Inc. (DOCUPAK) to administer the Guard Recruiting Assistance Program (G-RAP). Under G-RAP, members of the California National Guard served as Recruiting Assistants. If a Recruiting Assistant referred a potential Guard member to a recruiting office and that person ultimately enlisted, the Recruiting Assistant was eligible to receive monetary compensation disbursed by DOCUPAK.

Huerta served in the California National Guard as a recruiter.  In that position, he had access to names of recruits who had not been referred by any Recruiting Assistant.  Huerta pleaded guilty to taking part in a scheme that caused DOCUPAK to issue compensation that was not earned by claiming that various enlistees had been referred by Recruiting Assistants when, in fact, they had not.

This case is the product of an ongoing investigation by the Army Criminal Investigative Command Major Procurement Fraud Unit, the Defense Criminal Investigative Service, and the Federal Bureau of Investigation. Assistant United States Attorney Michael G. Tierney is prosecuting the case.

“As today's guilty plea shows, the Defense Criminal Investigative Service and its law enforcement partners will continue to identify and investigate those individuals who seek to defraud the U.S. taxpayer,” said Special Agent In Charge Chris D. Hendrickson, Defense Criminal Investigative Service, Western Field Office. “Any individual, regardless of position, who attempts to prosper at the expense of the American taxpayer, will be brought to justice.”

“The California National Guard has fully cooperated with the U.S. Attorney's Office and the U.S. Army Criminal Investigation Command regarding these matters, and will continue to do so moving forward, as we expect any who contradict the California National Guard's core values to be held accountable,” said Capt. Will Martin, Public Affairs Officer for the California Military Department.

Huerta is scheduled to be sentenced by United States District Court Judge Lawrence J. O’Neill on December 7, 2015. Huerta 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.

Seven other National Guard members have been charged in six separate indictments for their roles in similar recruiting‑fraud scheme in Fresno and Sacramento. Brian Kaps, 40, of Chico, pleaded guilty on November 21, 2014, to one count of wire fraud; Sarah Nattress, 27, of Paradise, pleaded guilty on October 23, 2014, to one count of wire fraud, and Leonardo Pesta, 47, of Mountain View, pleaded guilty on July 27, 2015, to one count of wire fraud. The pending charges against the remaining four defendants are only allegations; they are presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — After a 10-day trial before Chief United States District Judge Morrison C. England Jr., a jury returned its verdict today finding a Sacramento couple guilty on all four counts related to the arson of their former home in Antelope, United States Attorney Benjamin B. Wagner announced.

The jury found Alexander Sakhanskiy, 43, and Larisa Sakhanskiy, 46, guilty of arson to commit another felony, two counts of mail fraud, and arson affecting interstate commerce. After today’s verdict, the judge ordered the defendants to be taken into custody.

According to evidence introduced at trial, on May 22, 2010, a gasoline-fueled fire destroyed the defendants’ home, a single-family house at 5745 Hawkeye Lane, in Antelope, California; the home was also being used as the business location of “Alex’s Plumbing.” Prior to the fire, the defendants removed most of their personal belongings from the house. Firefighters testified that the residential fire sprinkler system and smoke detectors had been deactivated. The fire resulted in the total destruction of the house, however, firefighters were able to prevent the fire from spreading to neighboring homes.

Evidence at trial showed that the defendants had set the fire or caused the fire to be set in order to collect insurance money from Farmers Insurance Group, Mid-Century Insurance Company. In filing the claim, the defendants falsely claimed that hundreds of thousands of dollars of property was destroyed in the fire, when in reality, most of the contents of the house had been removed and hidden before the fire.

Eric Harden, ATF Acting Special Agent in Charge of the San Francisco Field Division, said: “Arson is an act of violence and endangers our communities. Let this case be a warning, we are committed to aggressively pursue arson investigations with our law enforcement partners.”

This case is the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Sacramento Metropolitan Fire District. The Sacramento County District Attorney’s Office assisted investigators with the initial fire investigation. Assistant U.S. Attorneys Michael D. Anderson and Nirav Desai are prosecuting the case.

The defendants are scheduled to be sentenced on December 4, 2015. They face a minimum statutory penalty of 10 years in prison, a $250,000 fine, and a three-year term of supervised release for the charge of arson to commit another felony. The mail fraud counts carry a potential penalty of up to 20 years in prison, a $250,000 fine, and a three-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.

SACRAMENTO, Calif. — A federal grand jury in Sacramento brought two indictments today against three defendants, charging them for their involvement in sex trafficking of minors, United States Attorney Benjamin B. Wagner announced.

The grand jury charged Jeremy Ray Warren, 22, of Vallejo, and Alyssa Tegan Brulez, 22, of Vacaville, with sex trafficking of children or by force, threats of force or coercion. A separate indictment charged Jarrail Lamont Smith, 23, of Cleveland, Ohio, with transportation of minors with intent to engage in prostitution.

According to court documents in the first case, between February 1, 2012, and April 18, 2013, Warren trafficked two minor victims, knowing that means of force, threats of force, and coercion would be used to cause the minors to engage in prostitution. And between April 23 and April 25, 2013, Warren and Brulez conspired to traffic a third minor victim, and to benefit financially from commercial sex acts by the third minor victim. Brulez recruited and enticed the third minor victim, knowing that force and threats of force would be used to cause the third minor to engage in prostitution.

This case is the product of an investigation by the Federal Bureau of Investigation the California Highway Patrol, the Vacaville Police Department and the Las Vegas Metropolitan Police Department. Assistant United States Attorneys Michael M. Beckwith and Michele M. Beckwith are prosecuting the case. (Docket # 2:15-cr-189 TLN)

According to the second indictment, between August 3, 2015 and August 25, 2015, Smith transported two minor girls from Cleveland to Northern California with the intent that they engage in prostitution. Smith was arrested after the two minors were discovered in a hotel room in Sacramento. One of the victims had two black eyes when she was recovered.

This case is the product of an investigation by the Federal Bureau of Investigation, with assistance from the Sacramento Police Department. Assistant United States Attorney Michele Beckwith is prosecuting the case. (Docket # 2:15-cr-188 TLN)

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

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

SACRAMENTO, Calif. — A Modesto man was sentenced today to 23.5 years in prison for producing child pornography, and a Shasta County man was sentenced today to eight years and one month in prison for receiving child pornography, United States Attorney Benjamin B. Wagner announced.

“Protecting the most vulnerable members of society is one of this office’s top priorities, and no one is more vulnerable than child victims of sexual exploitation crimes,” said U.S. Attorney Wagner.

“All children deserve a safe and healthy childhood free from abuse and exploitation.  These crimes are among the most heartbreaking and abhorrent we investigate, especially when such are committed by someone the child trusts,” said Assistant Special Agent in Charge Manuel Alvarez of the Federal Bureau of Investigation’s Sacramento field office. “We are committed to identifying and investigating individuals who commit crimes against children to ensure justice for the young victims and safety for others.”

“The sexual exploitation of children is wrong and will not be tolerated,” said Tatum King, deputy special agent in charge of HSI San Francisco. “Together with our law enforcement partners, Homeland Security Investigations will bring to justice anyone involved in such heinous acts.”

United States District Judge Troy Nunley sentenced Danny M. Shatswell Jr., 44, of Modesto, to 23 years and six months in prison for producing visual depictions of a minor engaged in sexually explicit conduct. According to court documents, Shatswell used a webcam to produce sexually explicit images of a minor. The minor victim reported to law enforcement that Shatswell was abusing her, and when Shatswell’s electronic devices were searched, sexually explicit images were found that Shatswell produced of his victim in 2010 and 2011.

This case was the product of an investigation by the Federal Bureau of Investigation, the Modesto Police Department, and the Sacramento County Sheriff's Office’s High Tech Crimes Task Force. Assistant U.S. Attorney Michelle Rodriguez prosecuted the case.

Judge Nunley also sentenced Jason B. Scarcello, 45, of Anderson, today to eight years and one month in prison for receipt of child pornography. According to court documents, between April and June 2012, Scarcello used a file-sharing program to download multiple movies depicting the sexual exploitation of children. Scarcello was arrested on July 25, 2012, after agents executed a federal search warrant at his residence and discovered CDs and DVDs containing sexually explicit images and videos of children. According to the search warrant affidavit, suspicions about Scarcello first arose after investigators determined that he had engaged in computer chats with a previously charged suspect in Kansas. From August 2010 through March 2012, Scarcello and the Kansas man discussed in computer chats the abuse of child victims.

This case was the product of an ongoing investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant United States Attorney Matthew Morris prosecuted the case.

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

SACRAMENTO, Calif. — Ken Sarna, 50, of Vallejo, was sentenced today by United States District Judge Troy L. Nunley to two years and six months in prison for one count of selling unregistered securities, United States Attorney Benjamin B. Wagner announced.

According to court documents, Sarna was the Director of Operations for Heaven Investments Holding Corporation (HIHC), a Sacramento company that was family-owned and operated by, among others, codefendants Akbar Bhamani, Zain Bhamani, and Aly Bhamani. From February 2007 through August 2008, HIHC solicited investors to participate in its investment programs, including the Tenants in Common (TIC) program. The TIC program was to use investor money to develop four properties, including a hotel in Oakland. HIHC sold fractionalized ownership interests to investors in each of the properties. These fractionalized interests qualified as securities, but were never registered with the SEC. Investors in HIHC lost between $2.5 million and $7 million.

In sentencing memoranda previously filed with the District Court in this case, the government argued that the sale of unregistered securities was related to the operation of HIHC as a Ponzi scheme, and that the company made various misrepresentations to investors about its holdings and how the investors’ money would be secured. At the sentencing of Akbar Bhamani, the government argued that none of the investors were told that HIHC was on the verge of collapse, and as late as May and June of 2008 — just months before the company declared bankruptcy — the defendants were still bringing in large investments with promises that HIHC was a “slam dunk” investment.

The court previously sentenced Akbar Bhamani, the founder and CEO of HIHC, to eight years in prison after hearing from a number of investors who described the devastating impact of their losses to HIHC. In some cases, investors lost their retirement and life savings. The court sentenced co-defendants, Zain Bhamani to two years and nine months in prison and Aly Bhamani to 11 months in prison. Shaun Bhamani was sentenced to four months in prison for his failure to report a mortgage fraud that was related to HIHC’s failed investment programs. Judge Nunley has ordered the defendants to pay restitution, the amount of which will be determined at a later proceeding.

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 Michele Beckwith prosecuted the case.

FRESNO, Calif. — Ernest Garza Reyes, 32, of Madera, was sentenced today by United States District Judge Anthony W. Ishii to eight years in prison for distributing child pornography, United States Attorney Benjamin B. Wagner announced.

According to court documents, from July 2, 2011, through December 1, 2011, Reyes sent and received over 200 email messages that contained over 2,800 images depicting minors engaged in sexually explicit conduct. The images also involved the portrayal of sadistic and masochistic violence, and included depictions of prepubescent minors. Reyes was charged with receiving or distributing child pornography on May 9, 2013, and pleaded guilty to this charge on September 8, 2014.

This case was the product of an investigation by the Central California Internet Crimes Against Children Task force, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and the Fresno County Sheriff’s Office. Assistant United States Attorney Brian W. Enos prosecuted the case.

“Today’s sentencing is another victory in the fight against the sexual exploitation of children,” said Ray Greenlee, assistant special agent in charge for HSI Sacramento. “Homeland Security Investigations works tirelessly with its law enforcement counterparts, including the Fresno County Sheriff’s Department, to identify those who prey on innocent children and hold them accountable for their actions.”

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

FRESNO, Calif. — A federal grand jury returned a two-count indictment today against Marcus Anthony Maluhia Araiza Jr., 18, of Rancho Cucamonga, charging him with aggravated sexual abuse of a child and abusive sexual contact with a child under 12 years of age, United States Attorney Benjamin B. Wagner announced.

According to allegations in a criminal complaint previously filed against Araiza, during the early morning hours of August 26, 2015, National Park Service rangers responded to a call that an 11-year-old boy was molested while in a restroom at Camp Curry in Yosemite National Park. The boy reported being in the restroom when an unknown man grabbed him and touched his genitals. The boy was able to escape from the bathroom get to his mother. Flyers posted in Curry Village led to Araiza’s arrest later that morning.

This case is the product of an investigation by the National Park Service. Assistant United States Attorney Michael S. Frye is prosecuting the case.

If convicted, Araiza faces a statutory penalty of up to 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.

SACRAMENTO, Calif. — A superseding indictment has been unsealed that charges three defendants for participating a large-scale scheme to defraud over 119,000 credit card account holders by making false charges on their accounts, United States Attorney Benjamin B. Wagner announced.

The original indictment was returned on March 20, 2014, and charged Mihran Melkonyan, 35, of Sacramento, and Rouslan Akhmerov, 41, of Los Angeles, with 23 counts of wire fraud and mail fraud. Akhmerov pleaded guilty to credit card fraud on December 15, 2014, and is awaiting sentencing.

The superseding indictment charges Melkonyan and adds defendants Ruslan Kirilyuk, 37, of Los Angeles, and Aleksandr Maslov, 34, of Sacramento, to the indictment, charging all three defendants with 24 counts of wire fraud and two counts of mail fraud. Kirilyuk is also charged with one count of aggravated identity theft. Melkonyan has been in custody since his arrest on April 15, 2015. Maslov was arrested on Tuesday and released on bond. Kirilyuk has yet to appear, and there is a warrant for his arrest.

According to court documents, between October 5, 2011, and March 5, 2014, the defendants participated in a scheme to obtain money from credit card holders, credit card companies, and third-party credit card payment processors by charging individuals’ credit cards without their permission or knowledge for goods and services that were not provided.

The defendants created at least 70 fictitious businesses for the purpose of billing stolen credit cards, using names that sounded legitimate such as 24 Quick Stop, Best Box, Chevran, Marshall Store, Stop Shop Market, Walt Mart, and Whole Store. In some cases, the fictitious businesses had Internet domain names and email addresses associated with them that were used to create the appearance of a legitimate business. Some of these fictitious businesses were established in the names of unknowing victims; for example, the defendants obtained stolen or misappropriated copies of student transcripts from a Sacramento-area high school and used the students’ identities to establish the fictitious businesses.

According to the superseding indictment, the defendants obtained information for credit card accounts and processed a large number of small payments from different credit cards in a relatively short period of time. The credit card providers such as American Express and third-party payment processors such as PayPal credited the businesses’ accounts based on the processed credit card transactions for the purported sales.

As part of the scheme, the defendants opened multiple bank accounts that they controlled using the identity theft victims. These accounts were linked directly to the businesses’ merchant accounts with credit card providers and third-party credit card payment processors. The defendants transferred money from the businesses’ merchant accounts to the bank accounts of the victims, and then withdrew cash from these accounts through ATM withdrawals, using debit cards and other means.

This case is the product of an investigation by the Federal Bureau of Investigation and the United States Secret Service. Assistant United States Attorneys Michael D. Anderson and Matthew M. Yelovich are prosecuting the case.

If convicted, the defendants face a maximum statutory penalty of 20 years in prison and a $250,000 fine for each count of wire and mail fraud. Kirilyuk faces an additional two years in prison consecutive to any other penalty if convicted on the aggravated identity theft count. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — Brent Lee Newbold, 58, of Granite Bay, pleaded guilty today to wire fraud and agreed to submit to a restitution order of at least $2.9 million, United States Attorney Benjamin B. Wagner announced.

Newbold was employed as chief executive officer of Holy Cow, a Rocklin-based business that produced a “green” cleaning product, marketed to stores such as Wal‑Mart, ACE Hardware, and Bed, Bath & Beyond.

According to court documents, between October 2007 and January 2010, Newbold engaged in a scheme to defraud investors and lenders. He made a variety of misrepresentations to investors about the financial health of the company, including the company’s debt levels and how invested funds would be used. In fact, Holy Cow bore a significant amount of debt, and Newbold continued to assume additional debt related to Holy Cow. Newbold used investor funds for nonbusiness purposes, diverting it to himself and his wife, paying his mortgage, and paying previous investors.

Based on Newbold’s claims, a corporate investor, Spence Enterprises, invested $2 million in Holy Cow. According to the plea agreement, Newbold, without authorization, diverted over $950,000 from Holy Cow corporate accounts to himself, his wife, his mortgage company, and his previous lenders and investors. Over $550,000 of that money had been invested by Spence Enterprises. When Spence Enterprises learned of Newbold’s diversion of money, they reprimanded him and told him to repay the money.

After he was confronted by Spence Enterprises, Newbold opened a secret account at American River Bank in the name of Holy Cow Inc. Newbold was the sole signatory on the account, and the account statements were sent to Newbold’s residence. Newbold used the bank account to receive funds from undisclosed individual investors in Holy Cow.

Between July 2008 and January 2010, Newbold solicited over 10 individual investors. Newbold falsely claimed that he was authorized to act on behalf of Holy Cow; that he owned Holy Cow; he owned the majority of Holy Cow stock; Holy Cow was financially sound, stable and profitable. In some cases, Newbold provided his individual investors with false Holy Cow stock certificates, false Holy Cow purchase order reports, and corporate promissory notes.

By December 2009, Spence Enterprises put Holy Cow into bankruptcy as a result of the unauthorized and undisclosed debt Newbold was taking on in connection with Holy Cow. The gross loss amount in this case is over $2.9 million.

“The defendant raised money from investors through misrepresentations and false promises,” said Thomas McMahon, Acting Special Agent in Charge, IRS Criminal Investigation. “Then, without authorization, the defendant diverted approximately $1 million to himself, his wife, his mortgage company, and his previous lenders and investors. This chain of events led the company into bankruptcy. Those who line their pockets with profits from these schemes should know they will not go undetected and will be held accountable.”

This case is the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation. Assistant United States Attorney Michael M. Beckwith is prosecuting the case.

Newbold is scheduled to be sentenced on December 3, 2015, by United States District Judge Morrison C. England Jr. Newbold faces a maximum sentence of 20 years in prison, a $250,000 fine, and a three-year term of supervised release. 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.

FRESNO, Calif. — A federal grand jury returned a 20-count indictment today against Franklyn Collier Jones, 52, of Fresno, charging him with health care fraud and making false statements relating to a health care matter, United States Attorney Benjamin B. Wagner announced.

According to court documents, Jones practiced podiatry in Fresno. Between 2010 and 2015, Jones allegedly billed Medicare for surgical procedures called avulsions and matrixectomies that he did not perform. In fact, Jones allegedly performed only routine foot care on the patients, such as clipping of toe nails. Jones allegedly billed more than $141,000 for these surgical procedures during this time period.

This case is the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorneys Mark J. McKeon and Patrick R. Delahunty are prosecuting the case.

If convicted, Jones faces a maximum statutory penalty of 10 years in prison and a $250,000 fine for each count of health care fraud; and 5 years in prison and a $250,000 fine for each count of making a false statement. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

FRESNO, Calif. — A federal grand jury returned a six-count indictment today against Larry Landseadal, 46, of Clovis, charging him with production of false identification documents, possession of false identification documents, possession of document-making implements, possession of 15 or more fraudulent counterfeit access devices, counterfeiting United States currency and possession of images for counterfeiting United States currency, United States Attorney Benjamin B. Wagner announced.

According to court documents, Landseadal possessed over 260 profiles of individuals, including their names, social security numbers, and other personal identifying information. He also produced false California driver’s licenses and possessed both counterfeit United States currency and images used to counterfeit United States currency.

This case is the product of an investigation by the United States Secret Service, the Clovis Police Department, and the Fresno Police Department. Assistant United States Attorney Mia A. Giacomazzi is prosecuting the case.

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

FRESNO, Calif. — Former bank manager Sylvia Ochoa, 33, and Shanne Leavell, 23, both of Orange Cove, were arrested today for an embezzlement scheme that defrauded the Bank of America of over $600,000, United States Attorney Benjamin B. Wagner announced.

A federal grand jury returned a six-count indictment on August 27, 2015, against them, charging Ochoa with conspiracy to commit bank fraud, bank fraud, and embezzlement by a bank manager, and charging Leavell with conspiracy to commit bank fraud and bank fraud.

According to court documents, Ochoa was the branch manager at Bank of America on East Tulare Street in Fresno. Between March 2013 and October 2013, Ochoa and Leavell conspired to defraud the bank. Contrary to the bank requirements, Ochoa prevented other bank employees from counting the cash in the vault. She entered the vault after hours and removed cash to spend on personal expenses. Ochoa also made fraudulent credits and transfers into accounts over which she controlled at Bank of America, including two accounts she opened in the name of her boyfriend, Leavell. Ochoa and Leavell then withdrew and spent the money Ochoa stole from the vault and fraudulently deposited into Leavell’s accounts on personal expenses and items, including the purchase of a truck, gambling at casinos, and buying expensive hand bags. In total, Ochoa and Leavell defrauded and embezzled from Bank of America over $600,000.

This case is the product of an investigation by the Federal Bureau of Investigation and the Fresno Police Department. Assistant United States Attorney Mia A. Giacomazzi is prosecuting the case.

If convicted, Ochoa and Leavell face a maximum statutory penalty of 30 years in prison and a $1 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — Gurpinder Sandhu, 47, of Vallejo, pleaded guilty today to possession of credit card making equipment and aggravated identity theft, United States Attorney Benjamin B. Wagner announced.

According to court documents, between July 2013 and September 2014 Sandhu and Simone Aguilar, 42, of Vallejo, used stolen identification information to manufacture credit cards and IDs. They used the stolen IDs and credit cards to obtain goods and credit from car dealerships and retail stores. Sandhu fraudulently obtained a 2014 Nissan Rogue, a 2014 Dodge Challenger a 2014 Harley Davidson motorcycle, a 2013 Yamaha motorcycle, a 2010 Chevrolet Corvette, a 2013 Dodge Challenger and a 2013 Dodge Charger.

According to the plea agreement, , law enforcement agents found many counterfeit items in Sandhu’s residence, including credit cards and California driver’s licenses. Agents also found equipment used to manufacture these counterfeit items such as an embossing machine, cameras, printers, scanners, material and chemicals used to produce identification cards, state seals, and a blue backdrop on the wall to imitate a California Department of Motor Vehicles ID photo background. Agents also found documents containing the names of real people, such as rental agreements, Comcast bills and sales receipts. Based on the fraudulent documents found in the residence, at least 50 victims have been identified.

“Identity theft poses a significant vulnerability and often wreaks havoc on the lives of innocent victims,” said Tatum King, acting special agent in charge for HSI San Francisco. “Today’s guilty plea sends a clear message that HSI and our law enforcement partners will work tirelessly to identify those responsible for such schemes and hold them accountable for the harm they cause.”

This case is the product of an investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the California Highway Patrol. Special Assistant United States Attorney Josh F. Sigal is prosecuting the case.

Sandhu is in federal custody. He is scheduled to be sentenced by U.S. District Judge John A. Mendez on December 8, 2015. Sandhu 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.

Aguilar is charged with conspiracy, possession of counterfeit credit cards, possession of credit card making equipment, passing fraudulent checks, and aggravated identity theft. She remains in custody with a status conference set for October 27, 2015. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — Keri S. Southwood, 21, of Elk Grove, pleaded guilty today to one count of bank fraud and one count of aggravated identity theft, United States Attorney Benjamin B. Wagner announced.

According to court documents, between October 1, 2014, and February 12, 2015, in Elk Grove and other places in Sacramento County, Southwood and co-defendants Leonard A. Velasco, 23, and Joseph D. Ryan, 20, both of Elk Grove, frequently damaged or destroyed U.S. Postal letter boxes and stole U.S. Mail. After cataloguing the stolen mail, the defendants targeted certain postal customers in order to return to the mail receptacles to steal the replacement credit or debit cards mailed to the postal customers. The defendants also used ID information found in the stolen mail to apply for credit cards and had the cards sent to an address they controlled. Posing as the victims, the defendants used the credit or debit cards, PINs, and victims’ names to get money, goods and services.

According to court documents, Southwood and her co-defendants possessed stolen U.S. Mail of over 1,000 victims and over 30 credit cards in victims’ names. As a result of the destruction of postal receptacles, customers suffered the loss of mail and mail services and the Postal Service suffered the loss of over $30,000.

This case is the product of an investigation by the United States Postal Inspection Service and the Elk Grove Police Department. Assistant United States Attorney Michelle Rodriguez is prosecuting the case.

Southwood is scheduled to be sentenced by United States District Judge John A. Mendez on December 8, 2015. Co-defendant Velasco pleaded guilty on August 25, 2015, to bank fraud and aggravated identity theft and is scheduled to be sentenced on December 15, 2015. Both Velasco and Southwood face up to 30 years in prison for the bank fraud conviction and two years in prison for the aggravated identity theft conviction. 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.

Ryan is scheduled for status hearing before Judge Mendez on September 15, 2015. The charges are only allegations; he is presumed innocent until and unless proven guilty beyond a reasonable doubt.

Brent Douglas Cole, 61, was sentenced to 29 years and seven months in prison today for an assault on law enforcement officers by U.S. District Judge Garland E. Burrell Jr., announced U.S. Attorney Benjamin B. Wagner for the Eastern District of California.

On Feb. 11, 2015, after a three-day trial, a federal jury found Cole guilty of assaulting a federal officer with a deadly weapon that inflicted bodily injury, assaulting a person assisting a federal officer with a deadly weapon that inflicted bodily injury and discharging a firearm during a crime of violence.

According to evidence presented at trial, on June 14, 2014, a Bureau of Land Management (BLM) ranger stopped Cole while he was driving a vehicle on a closed dirt road on BLM land near the South Yuba River campground.  The ranger gave Cole a warning and allowed him to leave without issuing him a citation.  The ranger continued up the dirt road and discovered a makeshift campsite with two motorcycles – one of which had been reported stolen and the other with expired tags.  The ranger requested the California Highway Patrol’s (CHP) help to impound the motorcycles.

While the ranger and a CHP officer were preparing to move the two motorcycles, Cole emerged from the brush surrounding the campsite and announced that he was coming to get his things.  The ranger asked Cole if he was armed and when Cole replied that he was, the ranger reached for his handcuffs.  Cole said he would not allow the ranger to place the handcuffs on him.  Cole then drew a Taurus .44-caliber revolver from the right side of his waist, pointed the weapon at the ranger and fired multiple rounds.  One round struck the Ranger in the left shoulder.  In response to Cole’s actions, the ranger and the CHP officer returned fire.  Cole fired multiple rounds at the CHP officer and one bullet struck the officer in the right leg.  Cole was struck several times by law enforcement.

After expending his ammunition and being shot multiple times, Cole gave up and was arrested. Cole, the BLM ranger and the CHP officer received medical attention and all survived their wounds.

“The defendant has repeatedly demonstrated that he lacks remorse and has no respect for the law,” said Judge Burrell in the sentencing.  “…He has a stunning lack of regard for anyone other than himself.”

“The men and women in law enforcement who serve our communities risk their lives every day they report to work,” said U.S. Attorney Wagner.  “The BLM ranger and CHP officer who were shot in this case were doing nothing more than carrying out routine duties.  We are gratified with today’s sentence, we appreciate the assistance and cooperation of the Nevada County District Attorney’s Office and we will continue to make prosecuting those who put officers at risk a top priority for our office.  More than anything, we are thankful that their injuries were not more severe and that the incident did not result in a loss of life.”

“I thank the Department of Justice, Office of the U.S. Attorney and the many jurisdictions at the federal, state and local level who worked together to successfully prosecute this case,” said California State Director Jim Kenna for BLM.  “On behalf of the BLM, thank you to all the brave men and women who risk their lives, backing each other up to protect America’s public lands and the people who visit them.”

“This case is illustrative of the risk law enforcement officers face on a daily basis” said Special Agent in Charge Monica M. Miller of the Sacramento’s Field Office for the FBI.  “Cole violently assaulted both a Bureau of Land Management officer and the CHP officer who was assisting him in his lawful duties.  Cole will now have decades to consider his willful disregard for the officer’s duty to uphold the law.  The FBI stands ready to investigate such violent crimes against federal officers and thank our law enforcement partners for their collaboration.”

“Every day, our officers go to work not knowing what dangers they may face,” said Commissioner Joe Farrow for CHP.  “This case demonstrated not only the challenges and dangers, but also the cooperation and teamwork among agencies that protect the people of California.  On behalf of the CHP, I would like to express my appreciation to U.S. District Judge Burrell for his deliberations in pronouncing the nearly 30-year sentence.”

This case was the product of an investigation by the Bureau of Land Management, the Federal Bureau of Investigation, the California Highway Patrol, the Nevada County Sheriff’s Office and the Nevada County District Attorney’s Office.  Former Assistant U.S. Attorney Michael D. McCoy and Assistant U.S. Attorney Heiko Coppola prosecuted the case.

SACRAMENTO, Calif. — United States District Judge Garland E. Burrell Jr. sentenced Brent Douglas Cole, 61, to 29 years and seven months in prison today for an assault on law enforcement officers, United States Attorney Benjamin B. Wagner announced.

On February 11, 2015, after a three-day trial, a federal jury found Cole guilty of assaulting a federal officer with a deadly weapon that inflicted bodily injury, assaulting a person assisting a federal officer with a deadly weapon that inflicted bodily injury, and discharging a firearm during a crime of violence.

According to evidence presented at trial, on June 14, 2014, a Bureau of Land Management (BLM) ranger stopped Cole while he was driving a vehicle on a closed dirt road on BLM land near the South Yuba River campground. The ranger gave Cole a warning and allowed him to leave without issuing him a citation. The ranger continued up the dirt road and discovered a makeshift campsite with two motorcycles — one of which had been reported stolen, and the other with expired tags. The ranger requested the California Highway Patrol’s help to impound the motorcycles.

While the ranger and a CHP officer were preparing to move the two motorcycles, Cole emerged from the brush surrounding the campsite and announced that he was coming to get his things. The ranger asked Cole if he was armed, and when Cole replied that he was, the ranger reached for his handcuffs. Cole said he would not allow the ranger to place the handcuffs on him. Cole then drew a Taurus .44-caliber revolver from the right side of his waist, pointed the weapon at the ranger and fired multiple rounds. One round struck the Ranger in the left shoulder. In response to Cole’s actions, the ranger and the CHP officer returned fire. Cole fired multiple rounds at the CHP officer and one bullet struck the officer in the right leg. Cole was struck several times by law enforcement.

After expending his ammunition and being shot multiple times, Cole gave up and was arrested. Cole, the BLM ranger, and the CHP officer received medical attention, and all survived their wounds.

In sentencing, Judge Burrell stated: “The defendant has repeatedly demonstrated that he lacks remorse and has no respect for the law. … He has a stunning lack of regard for anyone other than himself.”

“The men and women in law enforcement who serve our communities risk their lives every day they report to work,” said U.S. Attorney Wagner. “The BLM ranger and CHP officer who were shot in this case were doing nothing more than carrying out routine duties. We are gratified with today’s sentence, we appreciate the assistance and cooperation of the Nevada County District Attorney’s Office, and we will continue to make prosecuting those who put officers at risk a top priority for our office. More than anything, we are thankful that their injuries were not more severe, and that the incident did not result in a loss of life.”

“I thank the Department of Justice, Office of the United States Attorney and the many jurisdictions at the federal, state and local level who worked together to successfully prosecute this case," said BLM California State Director Jim Kenna. “On behalf of the BLM, thank you to all the brave men and women who risk their lives, backing each other up to protect America’s public lands and the people who visit them.”

“This case is illustrative of the risk law enforcement officers face on a daily basis.  Cole violently assaulted both a Bureau of Land Management officer and the CHP officer who was assisting him in his lawful duties.  Cole will now have decades to consider his willful disregard for the officer’s duty to uphold the law,” said Special Agent in Charge Monica M. Miller of the Federal Bureau of Investigation’s Sacramento field office. “The FBI stands ready to investigate such violent crimes against federal officers and thank our law enforcement partners for their collaboration.”

“Every day, our officers go to work not knowing what dangers they may face.  This case demonstrated not only the challenges and dangers, but also the cooperation and teamwork among agencies that protect the people of California,” California Highway Patrol Commissioner Joe Farrow said. “On behalf of the CHP, I would like to express my appreciation to United States District Judge Burrell for his deliberations in pronouncing the nearly 30-year sentence.”

This case was the product of an investigation by the Bureau of Land Management, the Federal Bureau of Investigation, the California Highway Patrol, the Nevada County Sheriff’s Office, and the Nevada County District Attorney’s Office. Former Assistant U.S. Attorney Michael D. McCoy and Assistant U.S. Attorney Heiko Coppola prosecuted the case.

SACRAMENTO, Calif. —Matthew Sarad, 42, of Bakersfield, was sentenced today to four years in prison for securities fraud, United States Attorney Benjamin B. Wagner announced.

According to court documents, Sarad lived in Folsom and was the founder and chief executive officer of Rancho Cordova-based Telomolecular Corporation. It purported to be a biotechnology startup company and claimed to have developed nanoparticle technology that could eradicate cancer and treat other age-related diseases. Between November 2005 and July 2008, Sarad solicited investors nationwide, offering them stock in Telomolecular. In selling the Telomolecular stock, Sarad made untrue statements, such as telling investors that the company believed its cancer curing products would complete clinical trials, obtain requisite government approval and make it to the market in less than three years. He also claimed Telomolecular had a deep management team with experience taking companies public. Sarad collected about $6.7 million from approximately 400 investors. Telomolecular never developed a marketable cancer-curing product, never conducted any clinical trials, never had a deep management team with experience taking companies public, and never went public.

Between January 2009 and December 2009, Sarad also owned a Folsom-based company called Sun Nanosystems. It purported to install solar energy systems for residential and commercial customers. It claimed to have developed nanoparticle technology that vastly increased the efficiency of solar panels. In selling the solar panels, Sarad falsely claimed that Sun Nanosystems worked with state-of-the-art proprietary technology that could increase the efficiency of conventional solar panels by as much as 50 percent. He claimed that Sun Nanosystems had a great deal of experience installing solar panels and had satisfied past customers. Sarad collected approximately $300,000 from customers but failed to complete installation of any solar panels.

In sentencing, United States District Judge Kimberly J. Mueller found that Sarad had engaged in a “pattern of purveying false information” and that a “significant sentence is warranted.”

“The FBI is committed to identifying and investigating corporate fraud cases and encourage those who have information about such illegal activity, wherever it may be found, to come forward,” said Supervisory Special Agent David Hanzal of the FBI's Sacramento field office. “Approximately 400 people fell victim to Sarad’s inaccurate claims and false promises regarding his company’s investment opportunities and products, resulting in significant and unacceptable losses.”

This case was the product of an extensive investigation by the Federal Bureau of Investigation. Assistant United States Attorneys Lee S. Bickley and Christopher Hales prosecuted the case.

SACRAMENTO, Calif. — Quest Diagnostics Inc. and Quest Diagnostics Clinical Laboratories Inc. (collectively “Quest Diagnostics”) have paid the United States $1,79 million to settle claims that it violated the False Claims Act, United States Attorney Benjamin B. Wagner announced today.

This settlement resolves allegations that Quest Diagnostics submitted duplicative claims to Medicare for certain venipuncture services and diagnostic tests and certain panel tests and select components of those panels. The United States alleged that these payments violated the False Claims Act.

“We are committed to fighting fraud and abuse to help preserve scarce Medicare funds for those who need it the most, the sick and the elderly.” said U.S. Attorney Wagner.

The settlement announced today resolves a lawsuit filed in the Eastern District of California under the qui tam, or whistleblower, provisions of the False Claims Act. These provisions allow private citizens to bring civil actions on behalf of the United States and share in any recovery. The whistleblower in this case will receive $358,000 of the recovery proceeds.

This case was investigated by the United States Attorney’s Office for the Eastern District of California. Assistant United States Attorney Catherine Swann handled the matter for the United States. The claims settled by this agreement are allegations only, and there has been no determination of liability.

SACRAMENTO, Calif. — Anderson residents John Wesley Lane, 35, and Kelsey Ann Lane, 28, pleaded guilty today to charges related to marijuana cultivation and distribution, United States Attorney Benjamin B. Wagner announced. John Lane pleaded guilty to possession with intent to distribute at least 50 kilograms of marijuana, and Kelsey Lane pleaded guilty to concealment of a felony.

According to court documents, on December 13, 2012, law enforcement agents executed federal search warrants at three properties owned, leased, or associated with John and Kelsey Lane: a warehouse in Anderson, the Lanes’ residence, and the California Patients Collective marijuana dispensary in Redding.

From the marijuana manufacturing operation inside the Anderson warehouse, agents seized approximately 2,700 mature marijuana plants, 1,300 marijuana clones, and approximately 40 kilograms of processed marijuana. Agents seized approximately 130 pounds of processed marijuana, numerous firearms, and $51,860 from the couple’s home, and nearly 200 marijuana plants, processed marijuana, concentrated cannabis, edible marijuana, and $4,673 from the marijuana dispensary.

Federal search warrants were again executed in May 2013, after law enforcement learned the Lanes were continuing to grow marijuana. During the execution of the search warrants, agents seized 2,329 mature marijuana plants and 1,724 clones at the warehouse.

The defendants are scheduled to be sentenced by U.S. District Judge John A. Mendez on February 16, 2016. John Lane faces a maximum sentence of 10 years in prison and Kelsey Lane faces up to three years in prison. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

This case is the product of an investigation by the North State Marijuana Investigation Team, the Siskiyou County Narcotics Task Force, the Drug Enforcement Administration, the Bureau of Land Management, the Alcoholic Beverage Control, Shasta County Sheriff's Office, Trinity County Sheriff’s Office, Shasta Interagency Narcotic Task Force, the California Department of Justice, and the FBI. Assistant U.S. Attorney Justin Lee is prosecuting the case.

SACRAMENTO, Calif. — Three of nine defendants were arrested today for participating in a credit card fraud conspiracy aimed at Target REDcard account holders across the United States and involving hundreds of fraudulent transactions and at least 1,000 victims, United States Attorney Benjamin B. Wagner announced.

A 12-count indictment, unsealed today, charges nine defendants with conspiracy, credit card fraud, aggravated identity theft, and illegal possession of credit card-making equipment. The indictment alleges that Stockton residents Boon B. Khoonsrivong, 38; Thongchone Vongdeng, 35; Daisy Sysengrat, 29; Vuthiya Tim, 30; Meghan Paradis, 31; Sequoia Valverde, 32; Amber Collins, 30; Somaly Siv, 29; and Jaffrey Brown, 31, conspired to make and use unauthorized credit cards at large retailers, relying on fraudulently obtained victims’ identities. Today, law enforcement agents arrested Vongdeng, and Brown, in Stockton. Agents arrested Siv in Reno, Nevada. The other six defendants remain at large.

According to the indictment, between March 2014 and September 2014, the nine conspirators obtained personal information from victims through various methods. The conspirators then used that information to create unauthorized credit card accounts and used those cards and accounts to obtain things of value in excess of $1,000. Part of the scheme involved using unauthorized Target REDcard account numbers to buy large amounts of electronics, prepaid gift cards, and other goods at Target locations throughout the Sacramento area, northern California, and elsewhere. The indictment further alleges that one of the defendants, Boone B. Khoonsrivong, possessed device-making equipment with the intent to defraud and engaged in aggravated identity theft.

In all, the indictment alleges that more than 300 counterfeit and unauthorized credit card account numbers were created, used, or sold by members of the conspiracy, and over 1,000 victims have been identified as having had their identities compromised as a result of the conspiracy.

This case is the product of an investigation by the United States Postal Inspection Service and the Stockton Police Department. Assistant United States Attorneys André M. Espinosa and Rosanne L. Rust are prosecuting the case.

If the defendants are convicted, they face maximum statutory penalties ranging from five to 15 years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.