Eastern District of California

SACRAMENTO, Calif. —Michael Lott, 39, of Vallejo, was sentenced to 14 years in prison yesterday after entering guilty pleas to drug trafficking charges in a wide-ranging conspiracy to distribute MDMA and crack cocaine, United States Attorney Benjamin B. Wagner announced.  In imposing sentence, Chief United States District Judge Morrison C. England, Jr. said the defendant was at the center of a massive drug conspiracy and his conduct warranted a significant sentence. 

Lott’s prosecution was part of a major federal investigation into drug trafficking throughout the United States by Vallejo-based rappers and associates of an entertainment label known as “Thizz Entertainment.”  In April 2012, as a result of the collaborative law enforcement effort, agents arrested a total of 25 individuals in Vallejo, Stockton, Fairfield, Oakland, Los Angeles, New York, and Oklahoma City.  During the investigation, agents seized approximately 45,000 MDMA pills, 4 pounds of crack cocaine, 2 pounds of heroin, and $200,000 in suspected drug proceeds.   Fourteen defendants have pleaded guilty, four have been sentenced and the rest are still pending completion.

According to court documents, the DEA-led investigation uncovered a network of drug distributors working in the “Crest” neighborhood of Vallejo, California, along with individuals transporting large quantities of drugs outside of California to realize a larger profit.  A number of the participants, including defendants Norton and Franklin, performed as rappers under the entertainment label known as “Thizz Entertainment.”  Many songs by artists on the Thizz Entertainment label include lyrics glorifying and promoting the use and distribution of MDMA pills.

This case is the product of an extensive investigation by the DEA Sacramento District Office, the Vallejo Police Department, the El Dorado County Sheriff’s Department, and the Sacramento FBI Safe Streets Task Force.  Assistant United States Attorney Jason Hitt is prosecuting the case.  It was part of an Organized Crime Drug Enforcement Task Force (“OCDETF”).  The OCDETF Program was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations.  The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.

SACRAMENTO, Calif. — Rudy Angelo Trujillo, 36, of Stockton, was sentenced by U.S. District Judge Morrison C. England Jr. today to six years in prison for three counts of aggravated identification theft, United States Attorney Benjamin B. Wagner announced.

According to court documents, Trujillo and his wife, Regina L. Perea, 34, possessed hundreds of pieces of stolen U.S. mail, along with hundreds of stolen checks, credit cards and identification documents at their Stockton residence. During the January 21, 2014, search of their residence, law enforcement recovered the stolen mail and found evidence indicating that the defendants were altering checks, and manufacturing credit cards. During the search, Trujillo and Perea successfully fled from law enforcement, and a high-speed chase ensued through Stockton residential streets. On March 7, 2014, Trujillo and Perea were arrested in San Jose. Upon arrest, the defendants were driving a stolen vehicle and were again in possession of a large quantity of stolen U.S. mail, checks, credit cards, and identification documents.

On May 15, 2014, Perea and Trujillo each pleaded guilty to three counts of aggravated identity theft. On October 2, 2014, Perea was sentenced to six years in federal prison.

This case was the product of an investigation by the U.S. Postal Inspection Service and the San Joaquin County Sheriff's Office, with assistance from the Stockton Police Department, the San Jose Police Department, the Placer County Sheriff's Office, and the Delta Regional Auto Theft Task Force. Assistant United States Attorney Michelle Rodriguez prosecuted the case.

SACRAMENTO, Calif. — A federal grand jury returned a 13-count indictment today against William Glenn Green, 48, of Sacramento, charging him with assisting in the preparation of false tax returns, United States Attorney Benjamin B. Wagner announced.

According to court documents, Green was a tax preparer and assisted eight taxpayers in preparing 13 fraudulent tax returns claiming over $150,000 in false deductions and credits to which he knew the taxpayers were not entitled.

This case is the product of an investigation by the Internal Revenue Service, Criminal Investigation. Assistant United States Attorney Christopher S. Hales is prosecuting the case.

If convicted, Green faces a maximum statutory penalty of three years in prison and a $100,000 fine for each count. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — A federal grand jury returned a 27-count indictment today against Thomas Romeo, 51, of Sacramento, charging him with a scheme to defraud the United States by evading customs duties owed by his Citrus Heights import business, United States Attorney Benjamin B. Wagner announced. Romeo is charged with conspiracy to defraud the United States, four counts of wire fraud, 11 counts of entry of falsely classified goods, and 11 counts of entry of goods by means of a false statement.

Romeo owned and operated Romeo & Juliette Inc., a company that imported footwear manufactured in China and distributed under the brand names BearPaw and Attix. According to the indictment, from at least 1994 through 2011, Romeo engaged in a scheme to avoid paying the full amount of duty owed on the shoes by having employees and others create false invoices that substantially undervalued the footwear that was being imported, sometimes at 50 percent of the actual value and other times even less. Romeo had his employees submit the false invoices to U.S. Customs for purposes of calculating the customs duties and fees Romeo & Juliette was required to pay. Romeo allegedly avoided paying approximately $5.6 million in customs duties legally owed to the United States.

According to the indictment, during the course of the investigation, Romeo submitted to federal agents a false document that attempted to justify the lower duty that Romeo & Juliette paid to the United States. He also instructed employees to make false statements to federal investigators about the value of the footwear that was imported.

This case is the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant United States Attorney Todd A. Pickles is prosecuting the case.

If convicted, Romeo faces a maximum statutory penalty of 20 years in prison and a $250,000 fine or twice the loss or gain caused by the fraud on the wire fraud counts. The maximum statutory prison term is five years on the conspiracy count and two years for causing the entry of goods falsely classified and causing the entry of goods by false statements. 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. — Joshua Anthony Bond, 25, of Grants Pass, Oregon, was sentenced this morning by U.S. District Judge Troy L. Nunley to 15 years in prison for trafficking in controlled substances and for being a felon in possession of firearms, United States Attorney Benjamin B. Wagner announced.

This case was the product of an investigation by the Federal Bureau of Investigation, the California Highway Patrol, and the Glenn County Sheriff's Office. Assistant United States Attorney Michelle Rodriguez prosecuted the case.

According to court documents, on July 11, 2013, a CHP officer observed Bond speeding on Interstate 5 near County Road 57 in Glenn County. The CHP officer followed Bond at high speeds as Bond turned off the highway and through residential neighborhoods in Willows. During his flight, Bond threw a loaded .380-caliber handgun onto a residential street. Bond eventually lost control in a residential cul-de-sac; he was then taken into custody.

Law enforcement officers seized a 9 mm sub-machine gun, a 12 gauge pump shotgun, various types of ammunition, 210 grams of methamphetamine, and two body armor plates from his vehicle.

FRESNO, Calif. — A federal grand jury returned an indictment today against Matthew Faron Blair, 30, of Modesto, charging him with assaulting a security guard assigned to protect a Social Security Administration office in Fresno, Calif., United States Attorney Benjamin B. Wagner announced.

According to court documents, on October 14, 2014, Blair went to the Social Security Administration office in Fresno to attempt to collect Supplemental Security Income (SSI) benefits. He was advised that his benefits had stopped, but could be renewed by completing additional paperwork. Blair became agitated, and a security guard was called to escort him of the office. As the guard attempted to escort Blair out of the office, Blair allegedly punched the guard in the mouth and on the top of his head as he dropped to the ground. Blair then fled and was apprehended 12 days later. The guard suffered serious bodily injury requiring medical treatment.

This case is the product of an investigation by the Federal Protective Services with assistance from the Social Security Administration, Office of the Inspector General; the California Department of Corrections and Rehabilitation, Adult Parole Division; and the Stockton Police Department. Assistant United States Attorney Karen A. Escobar is prosecuting the case.

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

SACRAMENTO, Calif. —Nicholas Robert Bowen, 63, of Grizzly Flat, pleaded guilty today to receipt and distribution of child pornography, United States Attorney Benjamin B. Wagner announced.

According to court documents, Bowen took a woman to a Davis park and had her expose herself to 10-12 year old boys while Bowen filmed using a spy camera built into his glasses. They were arrested by Davis police. A subsequent search of Bowen’s phone and computer discovered over 600 images and videos of minors engaged in sexually explicit conduct.

This case is the product of an investigation by the Davis Police Department, the Yolo County District Attorney’s Office, and the Sacramento Internet Crimes Against Children (ICAC) Task Force. ICAC is a federally and state-funded task force managed by the Sacramento Sheriff’s Department with agents from federal, state, and local agencies. The Sacramento ICAC investigates online child exploitation crimes, including child pornography, enticement, and sex trafficking. Assistant United States Attorney Todd A. Pickles is prosecuting the case.

Bowen is scheduled to be sentenced by Judge Troy L. Nunley on February 19, 2015. Bowen faces a maximum statutory penalty of 20 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

This case 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 grand jury indicted Mark Threet, 52, of Modesto, today, charging him with making a false claim for a tax refund, United States Attorney Benjamin B. Wagner announced.

According to court documents, Threet filed more than 860 false tax returns for himself and others for the tax years 2008 to 2011. Each return included false statements regarding income, tax credits, and refund amounts. In sum, the returns claimed more than $600,000 was claimed for these false tax refunds.

This case is the product of an investigation by the Internal Revenue Service, Criminal Investigation. Assistant United States Attorney Patrick R. Delahunty is prosecuting the case.

If convicted, Threet faces a maximum statutory penalty of five years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

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

FRESNO, Calif. — Chief United States District Judge Morrison C. England Jr. sentenced Jeffrey Randall Metcalfe, 47, of Turlock, to 30 years in prison, to be followed by a lifetime term of supervised release, for receiving and distributing child pornography, United States Attorney Benjamin B. Wagner announced.

According to court documents, agents received information that Metcalfe had used an Internet connection to create at least 17 accounts on a photo-sharing website. Metcalfe had posted numerous images to the site and made comments about his interest in child pornography. When a search warrant was executed at his residence on December 19, 2013, investigators found a computer that contained a screen saver with images of children being sexually exploited as well as thousands of printed and digital images of child pornography. Metcalfe admitted in a plea agreement that between January 2012 and December 1, 2013, he knowingly used a computer and the Internet to receive and distribute images of child pornography. He also admitted that on January 24, 2000, he had suffered a previous conviction in federal court in Fresno for possession of child pornography. He has been detained as a danger to the community and flight risk since his initial appearance in federal court on December 23, 2013.

“Tragically, this case is not unusual — it’s all too common for defendants in child sexual exploitation cases to reoffend,” said Michael J. Toms, the acting assistant special agent in charge who oversees HSI Fresno. “That’s why HSI and its law enforcement partners must remain vigilant. It’s the only way to protect our youth and ensure that individuals, like this defendant, are held accountable for their crimes.”

In sentencing, Judge England referenced the “extremely serious nature of the offense” and that this sentence was necessary to address the defendant’s “level of participation in the process” of the sexual exploitation of minors.

This case was the product of an investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), with assistance from the Turlock Police Department. Assistant U.S. Attorney David Gappa prosecuted the case.

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

FRESNO, Calif. — Hernan Cortez Villasenor (Cortez), 40, of Michoacàn, Mexico, was sentenced today to 10 years in prison for his involvement in a toxic marijuana cultivation operation in the Greenhorn Creek area of the Sequoia National Forest in Kern County, United States Attorney Benjamin B. Wagner announced. Cortez was also ordered to pay $3,328 in restitution to the U.S. Forest Service for the damage caused by his marijuana cultivation operation.

On July 7, 2014, Cortez pleaded guilty to conspiring to manufacture, distribute and possess with intent to distribute marijuana and distributing unregistered pesticides, in violation of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). According to court documents, Cortez supplied toxic rat poison and other chemicals and materials to support the 8,876 marijuana plants growing on public land. The site sustained extensive damage as a result of the cultivation activities. Native oak trees and other vegetation were cut down or otherwise killed to make room for the marijuana plants. The soil was tilled, and fertilizers and pesticides, including Fosfuro de Zinc, a common Mexican rat poison containing zinc phosphide, were spread throughout the site. Law enforcement officers also found 30 containers of Fosfuro de Zinc at Cortez’s residence in Arvin, California.

The EPA has designated zinc phosphide as a restricted-use pesticide, which means that it may only be purchased and used by, or under the supervision of, a certified applicator. Zinc phosphide is banned for residential sale due to its acute toxicity. A single swallow can be fatal to a small child.

Upon completion of his prison sentence, Cortez is subject to deportation to Mexico.

This case was the product of an investigation by the U.S. Forest Service, U.S. Drug Enforcement Administration, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), U.S. Environmental Protection Agency Criminal Investigation Division (EPA-CID), and the Kern County Sheriff’s Office. Assistant United States Attorney Karen Escobar prosecuted the case.

FRESNO, Calif. — Ismael Martinez, 26, of Reno, Nevada, was sentenced today by United States District Judge Lawrence J. O'Neill to eight years and one month in prison for traveling from Reno to Fresno with the intent of engaging in illicit sexual conduct with a 14-year-old, United States Attorney Benjamin B. Wagner announced.

According to court documents, in August 2013 the parents of the minor female victim reported to the Fresno County Sheriff’s Office that they discovered text messages on a cellphone suggesting that their daughter was engaging in sexual relations with someone with a phone number with an out-of-state area code. Further investigation revealed this person to be Martinez, and that he had traveled from Reno to Fresno on multiple occasions in order to engage in sexual relations with the minor.  On December 19, 2013, Martinez was indicted, and he pleaded guilty to the charge on September 15, 2014.

This case was the product of an investigation by 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.

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

" As this case underscores, parents need to talk to their kids about how to stay safe in cyberspace — cautioning them to always think before they click," said Michael J. Toms, the acting assistant special agent in charge who oversees HSI Fresno. "Young people, who would never approach a stranger in person, think nothing of interacting with someone they don't know online. The predators who are lurking on the Internet, exploit that trust. Homeland Security Investigations will continue to aggressively target online child predators, but parents, because of their proximity, are the first line of defense."

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the United States 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, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. Click on the “resources” tab for information about Internet Safety.

FRESNO, Calif. — United States District Judge Lawrence J. O’Neill sentenced Maria Vega, 54, of Ceres, today to six months in prison, to be followed by six months of home confinement, for filing a false tax return, United States Attorney Benjamin B. Wagner announced.

Judge O’Neill also ordered Vega to pay $179,465 in restitution to the Internal Revenue Service. Vega has already repaid approximately $161,000 of that amount.

According to her plea agreement, Vega owned and operated Vega's Financial Services and was licensed as a broker by the California Department of Corporations. Vega earned income from working as a loan officer on mortgage transactions at Vega's Financial Services, and she also earned income as real estate agent in connection with the purchase, sale, and refinancing of residential properties. Although Vega received substantial income in tax years 2005, 2006 and 2007, she did not file federal income tax returns for tax years 2005 and 2006 until 2008. When Vega did file federal income tax returns in April 2008 for tax years 2005, 2006, and 2007, she substantially underreported both her income and tax due for those tax years. Vega reported taxable income of $0 for 2005, $21,692 for 2006, and $0 for 2007, but in fact she had substantially higher taxable income for each of these three years.

This case was the product of an investigation by the Internal Revenue Service – Criminal Investigation. Assistant United States Attorneys Kirk E. Sherriff and Michael G. Tierney prosecuted the case.

FRESNO, Calif. — Cruz Soria, 29, of Bakersfield, pleaded guilty today to conspiring to manufacture, distribute and possess with intent to distribute marijuana in the Fay Canyon area of the Canebrake Ecological Reserve, United States Attorney Benjamin B. Wagner announced.

The Canebrake Ecological Reserve is located 10 miles east of Lake Isabella in northeastern Kern County. It was first inhabited in about 1000 B.C. by the Tubatulabel culture and is currently home to numerous rare and protected plants and animals, including the federally protected golden and bald eagles and peregrine falcon, the federally threatened California red-legged frog and Valley elderberry longhorn beetle, and the endangered Southwestern willow flycatcher.

In pleading guilty, Soria acknowledged he was responsible for cultivating 454 marijuana plants in the ecological reserve. Law enforcement officers arrested Soria at the grow site and seized the plants and about 12 pounds of processed marijuana. Among the plants, the officers also found several highly toxic chemicals, including Fosfuro de Zinc or zinc phosphide, a rat poison illegal to use in the United States without a license, and Furadan, an insecticide banned by the EPA for usage on crops consumed by humans. The defendant has agreed to pay $2,568 in restitution to cover the costs incurred by the High Sierra Trail Volunteer Crew to clean up the damage to the reserve caused by the marijuana grow.

Soria is scheduled for sentencing on February 9, 2015, before Senior U.S. District Judge Anthony W. Ishii. Soria faces a mandatory minimum prison term of five years and a maximum prison term of 40 years, along with a fine of up to $5 million. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

This case is the product of an investigation by the U.S. Forest Service, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), California Department of Fish and Wildlife, and Kern County Sheriff’s Office. Assistant United States Attorney Karen Escobar is prosecuting the case.

FRESNO, Calif. — A federal jury in Fresno stayed late into the evening on Friday, November 21, and returned guilty verdicts on all counts in the trial of Evelyn Brigget Sanchez, 32, and Darling Arlette Montalvo, 33, both of Bakersfield, United States Attorney Benjamin B. Wagner announced. The case against the two sisters focused on their involvement in an extensive mortgage fraud scheme that ran from October 2005 to May 2007.

Sanchez and Montalvo were both convicted of conspiracy to commit mail fraud, wire fraud, and bank fraud. Sanchez was also convicted of 11 counts of mail fraud. Montalvo was also convicted of 10 counts of mail fraud and one count of money laundering.

According to court documents, between October 2005 and May 2007, Sanchez and Montalvo conspired with co-defendants Eric Hernandez, Monica Hernandez, and Patricia King to defraud mortgage lenders by submitting false loan applications and fraudulent supporting documentation, causing the lenders to fund mortgage loans for the defendants’ benefit on the basis of false and misleading information. During this time, Eric Hernandez and Evelyn Sanchez were employed at mortgage brokerages in Bakersfield. The defendants submitted loan applications to lenders that included material misstatements concerning the borrowers’ income, assets, and employment, and false statements concerning the borrowers’ intent to reside in the properties as owner-occupiers, among other false statements. The defendants also fabricated false supporting documentation and submitted it to lenders in support of the loan applications. The total losses in the scheme were approximately $6 million.

Co-defendants Eric Hernandez, Monica Hernandez, and Patricia King previously pleaded guilty for their roles in the scheme. Eric Hernandez was sentenced on Sept. 16, 2013, to 10 years and 10 months in prison. King was sentenced on April 23, 2012, to three years and one month in prison. Monica Hernandez is scheduled to be sentenced on January 5, 2015.

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 Sherriff and Henry Carbajal III are prosecuting the case.

Sanchez and Montalvo are to be sentenced on February 2, 2015, by United States District Judge Anthony W. Ishii. The maximum statutory penalty for conspiracy to commit mail fraud, wire fraud, and bank fraud is 30 years in prison and a $1 million fine. The maximum statutory penalty for one count of mail fraud is 30 years in prison and a $1 million fine, and for money laundering is 10 years in prison and a $250,000 fine. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

This case was investigated and prosecuted in coordination with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. For more information on the task force, please visit www.StopFraud.gov.

FRESNO, Calif. — Minerva Sanchez, 48, of Fremont, pleaded guilty today to conspiracy to commit bank fraud, United States Attorney Benjamin B. Wagner announced.

According to court documents, Sanchez was a licensed real estate agent who represented the seller of a home in Patterson, California in March 2010. Sanchez recommended that the seller undertake a short-sale of his home using her son as the straw buyer. Following the sale, the plan was for the seller to regain ownership of the property but with a smaller outstanding loan balance. The seller, acting on Sanchez’s advice, submitted false and fraudulent short-sale applications to Tri Counties Bank and Freddie Mac, and caused these financial institutions to approve the charge-off of funds for the short-sale of the seller’s home.

With Sanchez’s knowledge, the seller provided the straw buyer with the full purchase price of the home ($355,000). Sanchez provided the seller with a “hardship letter” for him to use in connection with the short-sale application that he was unable to make his monthly mortgage payments. In fact, Sanchez knew that the seller could make his monthly mortgage payments with proceeds from a pending sale of other property he owned.

Sanchez, along with the seller and straw buyer, made other misrepresentations to the financial institutions in connection with the short-sale, including false statements that the transaction was “arm’s length,” and false statements concerning the parties’ hidden agreement that the seller would provide the straw buyer with the purchase money for the short-sale and ultimately regain ownership of his home following the short-sale. In her plea agreement, Sanchez admitted that her criminal conduct caused the financial institutions to lose more than $316,000.

“Minerva Sanchez was a trusted real estate agent who had a responsibility to uphold the law and advise clients in good faith,” said Laura S. Wertheimer, Inspector General for the Federal Housing Finance Agency (FHFA). “Our law enforcement agents and our partners, working together, assembled a case that showed Ms. Sanchez failed to honor her responsibilities and her breaches caused significant harm. We will continue to work with law enforcement agents across the federal government to root out individuals engaging in fraud in an attempt to alleviate the damage that is being done to both the institutions and taxpayers footing the bill for this fraud.”

Thomas McMahon, Acting Special Agent in Charge IRS Criminal Investigation, Oakland Field Office, added: “Bank fraud threatens the financial health of our communities. IRS Criminal Investigation is committed to following the money trail to ensure that those who engage in these illegal activities are vigorously investigated and brought to justice.”

This case is the product of an investigation by the FHFA - Office of Inspector General and IRS Criminal Investigation. Assistant United States Attorney Christopher Baker is prosecuting the case.

Sanchez is scheduled to be sentenced by Senior U.S. District Judge Anthony W. Ishii on February 17, 2015. Sanchez faces a maximum statutory penalty of 30 years in prison and a $1,000,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

On June 10, 2013, the seller of the Patterson property, Agustin Simon, 52, of Gustine, pleaded guilty to conspiring to commit bank fraud in connection with this scheme. He is scheduled to be sentenced on December 1, 2014, before U.S. District Judge Lawrence J. O’Neill.

FRESNO, Calif. — Bay Area resident William James Kenney, 68, was sentenced today by United States District Judge Anthony W. Ishii to 24 months in prison for filing a false tax return with the Internal Revenue Service, United States Attorney Benjamin B. Wagner announced.

According to court documents, Kennedy sent tax returns to the Fresno IRS office in 2002, 2003, 2004 and 2005, in which he underreported his taxable income. As a financial advisor, Kennedy touted a variety of tax avoidance schemes to his clients, such as the use of corporation “soles” (a corporate form that enables religious leaders to hold property and conduct business for the religious entity) and debt elimination programs. Kennedy was compensated by his clients for his financial services, but failed to properly report that income on his tax returns. In 2002, he claimed an improper charitable deduction to an entity that was one of his own corporation soles. As a result of Kennedy’s conduct, the United States incurred a tax loss of approximately $627,000. As part of his plea agreement, Kennedy was ordered to pay restitution to the IRS in this amount.

Judge Ishii stated that the sentence he imposed was warranted because Kennedy committed a serious scheme that continued for at least four years, resulting in a loss to the IRS of over $600,000. This case was the product of an investigation by the Internal Revenue Service, Criminal Investigation. Assistant U.S. Attorney Mark J. McKeon prosecuted the case.

SACRAMENTO, Calif. — Two former California National Guard members recently pleaded guilty to charges of wire fraud stemming from a fraud scheme involving recruiting bonuses United States Attorney Benjamin B. Wagner announced. Brian Kaps, 40, of Chico, pleaded guilty today to one count of wire fraud. Sarah Nattress, 27, of Paradise, pleaded guilty on October 23, 2014, to one count of wire fraud.

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.

Nattress and Kaps served in the California National Guard as recruiting assistants. In separate cases, they pleaded guilty to taking part in a scheme to cause DOCUPAK to issue unearned recruiting compensation by falsely claiming that various enlistees had been referred to recruiting offices by them, when in fact they had not.

These cases are 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 Matthew G. Morris is prosecuting the cases.

Nattress is scheduled to be sentenced by United States District Judge Troy L. Nunley on January 8, 2015. Kaps is scheduled to be sentenced by United States District Judge Garland E. Burrell Jr. on February 6, 2015. They face a maximum statutory penalty of 20 years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

Six other National Guard members were also indicted in May 2014 in Fresno and Sacramento. The charges against them are only allegations; they are presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — Two defendants were sentenced today in the Northern District of Texas for conspiring to bribe public officials in Afghanistan and Texas in furtherance of an ongoing effort to secure government contracts through graft, U.S. Attorney Benjamin B. Wagner and U.S. Attorney Sarah R. Saldaña of the Northern District of Texas announced.

United States District Judge Barbara M.G. Lynn in the Northern District of Texas sentenced Lida Amin, 40, of Dubai, United Arab Emirates, and Dublin, California, and Sohail Amin, 30, of Dubai, United Arab Emirates, and Fremont, California, to three years and six months in prison. Judge Lynn ordered Lida Amin’s sentence to be served consecutively to a previous sentence for a total of five and a half years in prison.

On October 22, 2013, a federal grand jury in the Northern District of Texas indicted Lida Amin, Sohail Amin, and Jeron Shelton Rochon, 32, of Houston, Texas, charging them with conspiracy to bribe public officials. On June 17, 2014, Lida Amin and Sohail Amin pleaded guilty, but the charges against Rochon remain pending. The charges against Rochon are only allegations; he is presumed innocent until proven guilty.

According to court documents, between 2007 and 2010, Sohail Amin and Lida Amin, both private government contractors, conspired with Rochon, a member of the U.S. Air Force, and others to bribe U.S. Air Force contracting officers in order to obtain military procurement contracts. Between October 2007 and June 2008, in exchange for bribe offers and bribe payments made by Sohail Amin, Rochon issued government contracts and provided contract bid coaching to Sohail Amin and Lida Amin. Sohail Amin paid bribes to Rochon in cash in both Afghanistan and Dallas, Texas, and instructed Rochon not to deposit large sums of money into the banking system to avoid the reporting of such deposits by banks. According to court documents, the U.S. Air Force paid nearly $1 million for defective M-16 cleaning kits and a security fence that fell down shortly after it was installed.

In sentencing the defendants, Judge Lyn described the crime as sordid, shameful, and disgusting. She said, “In the court’s view, the bad here is really bad. This is a very serious offense.

Lida Amin was ordered to report to begin serving her sentence in December 5, 2014. Sohail was ordered to report to begin serving his sentence on January 13, 2015.

This case was filed in Texas with the assistance of the U.S. Attorney’s Office for the Northern District of Texas. Lida Amin and her brother Nabil Amin have also been charged in a separate federal criminal case in Sacramento, which relates to similar charges. Lida Amin previously entered a guilty plea in the Sacramento case and was sentenced on September 24, 2014, to a two-year term of imprisonment. Nabil Amin’s case is currently scheduled for a status conference on December 10, 2014. The charges against him are pending and are only allegations. He is presumed innocent unless and until proven guilty.

The charges filed in the Eastern District of California and the Northern District of Texas are the product of an investigation by the Federal Bureau of Investigation; the U.S. Air Force, Office of Special Investigations; the Fremont Police Department; and the U.S. Drug Enforcement Administration. Assistance was provided by the U.S. Department of Justice, Office of International Affairs; and the Czech National Police. Assistant United States Attorney Michael M. Beckwith is prosecuting the case.

SACRAMENTO, Calif. — A federal grand jury returned a four-count indictment today against Stockton residents Rigoberto Cecena, 24, Yusen Valenzuela-Herrera, 25, and Elisabet Perez, 25, charging them with conspiracy to distribute methamphetamine, possession with intent to distribute methamphetamine and heroin, and distribution of methamphetamine, United States Attorney Benjamin B. Wagner announced.

According to court documents, between September 23, 2014, and October 16, 2014, Cecena, Valenzuela-Herrera, and Perez conspired to distribute methamphetamine. Valenzuela-Herrera and Perez are also being charged with possessing heroin for distribution. Additionally, Cecena and Valenzuela-Herrera are being charged with distributing methamphetamine.

This case is the product of an investigation by the San Joaquin County Metropolitan Narcotic Task Force (METRO). Special Assistant United States Attorney Josh F. Sigal is prosecuting the case.

The defendants are currently in custody. If convicted, all three defendants face a maximum statutory penalty of life in prison and a $10 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

FRESNO, Calif. — A federal grand jury returned an 11-count indictment today against Fresno residents Jose Ortiz-Medrano, 25; Luciano Ramirez-Santa Cruz; and Jose Alberto Flores, 27, charging them with methamphetamine trafficking offenses, United States Attorney Benjamin B. Wagner announced. Luciano Ramirez-Santa Cruz was also charged with being an unlawful alien in possession of a firearm. 

According to court documents, the defendants were involved in selling methamphetamine. On November 13, 2014, agents served search warrants at each of the defendant’s residences and on Ramirez’s car.  In total, they seized more than $14,000 in cash, a pound of marijuana, several cellphones, approximately a kilogram of methamphetamine, and two gallons of methamphetamine in solution.  They also seized three firearms allegedly possessed by Ramirez.

This case was the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Multi-Agency Gang Enforcement Consortium (MAGEC). Assistant United States Attorney Kimberly A. Sanchez is prosecuting the case.

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

FRESNO, Calif. — A federal grand jury returned a one-count indictment today against Wenceslao Cruz Ochoa, 34, of Sacramento, charging him with possession with intent to distribute methamphetamine, United States Attorney Benjamin B. Wagner announced.

According to court documents, on November 13, 2014, Ochoa was stopped by a Fresno County Sheriff’s deputy on Interstate 5 for a moving violation. A canine trained in the detection of controlled substances alerted the deputy to the presence of drugs, which prompted a search of his vehicle. Approximately 19 pounds of methamphetamine was located inside  a suitcase.

This case is the product of an investigation by the United States Drug Enforcement Administration and the Fresno County Sheriff’s Office. Assistant United States Attorney Michael Frye is prosecuting the case.

If convicted, Ochoa faces a maximum statutory penalty of 20 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. —Oneal Damar Hamilton, 36, of Los Angeles, pleaded guilty today to access device fraud, United States Attorney Benjamin B. Wagner announced.

According to court documents, Hamilton’s accomplice would impersonate bank card customers and request changes in the account holder’s contact information. The accomplice would then request that duplicate credit cards, with Hamilton listed as an authorized user, be sent to Hamilton’s address. Hamilton took cash advances off the cards and used the cards to acquire merchandise at stores in the Sacramento area until the fraud was detected and the cards were deactivated.

This case is the product of an investigation by the United States Secret Service. Assistant United States Attorney Matthew G. Morris is prosecuting the case.

Hamilton has been in custody since his arrest in Los Angeles on March 15, 2014.

Hamilton is scheduled to be sentenced by United States District Judge Troy L. Nunley on February 5, 2015. Hamilton faces a maximum statutory penalty of 10 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

FRESNO, Calif. — A federal grand jury returned a 32-count indictment today against Jennifer Crystal Downing, 39, of Fresno, charging her with 16 counts of first degree burglary and 16 counts of theft, United States Attorney Benjamin B. Wagner announced.

According to court documents, Downing entered rooms in the Ahwahnee Hotel and stole cash from the hotel’s customers. The burglaries and thefts began in March 2014 and continued through October 2014. At the time, Downing was working on the Ahwahnee’s housekeeping staff.

This case is the product of an investigation by the National Park Service. Assistant United States Attorney Mark J. McKeon is prosecuting the case.

If convicted of burglary, Downing faces a maximum statutory penalty on each count of six years in prison and a $250,000 fine, and if convicted of theft, she faces a maximum statutory penalty on each count of one year in prison and a $100,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — A federal grand jury returned an indictment today against Aljamario Willoughby, 21, of Athens, Georgia, charging him with possession of marijuana with intent to distribute, United States Attorney Benjamin B. Wagner announced.

According to court documents and agents at the scene, on October 29, 2014, Willoughby was arrested in the Sacramento airport on his way to Atlanta, Georgia when 50 pounds of marijuana was found in sealed bags in his luggage.

This case is the product of an investigation by the Sacramento County Sheriff’s Office and the Transportation Security Administration. Assistant United States Attorney Paul Hemesath is prosecuting the case.

Willoughby is currently detained at the Sacramento County Jail.

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

FRESNO, Calif. — A federal grand jury returned a three-count indictment today against Kevin Nouthai Yang, 47, of Fresno, charging him with conspiring to cultivate and distribute marijuana, cultivating marijuana, and possessing marijuana with intent to distribute, United States Attorney Benjamin B. Wagner announced.

According to court documents, Yang, a high school teacher’s aide for the Central Unified School District, is the owner of property that he purchased earlier this year in the Shasta Trinity National Forest in Hay Fork, California in Trinity County. At the beginning of November, U.S. Forest Service agents executed a search warrant at Yang’s property after seeing hundreds of large, mature marijuana plants growing there. The agents found Yang in the process of harvesting marijuana and seized 324 pounds of marijuana, 200 marijuana plants, and a firearm. Some of the marijuana grown on Yang’s property had already been distributed to Fresno.

This case is the product of an investigation by the U.S. Forest Service and Trinity County Sheriff’s Office. Assistant United States Attorney Karen A. Escobar is prosecuting the case.

Yang is currently detained but has been ordered released on a secured bond. He is scheduled to appear in federal court for arraignment on the indictment on November 21, 2014.

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

SACRAMENTO, Calif. — Saravy Yem, 30, of Stockton, pleaded guilty today to conspiracy and theft of the mail by a postal employee, United States Attorney Benjamin B. Wagner announced.

According to court documents, Yem was an employee of the Postal Service at a bulk mail processing facility in West Sacramento from 2010 to 2011. Over the course of approximately a year, Yem and another postal employee, co-defendant Angel Pantoja‑Lopez, stole approximately 384 smart phones being shipped by a cellular phone service provider to its customers around the country. The defendants would sell the stolen phones for cash in the greater Sacramento area.

This case was the product of an investigation by the United States Postal Service, Office of Inspector General. Assistant United States Attorney Matthew G. Morris is prosecuting the case.

Pantoja-Lopez was sentenced on May 22, 2014, to two years and four months in prison and two additional months of home detention, and to pay $6,514 in restitution to postal customers who lost money because of his crimes.

Yem is scheduled to be sentenced by Judge Troy L. Nunley on February 5, 2015. Yem faces a maximum statutory penalty of five years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. — United States District Judge Troy L. Nunley sentenced James O. Molen, 70, of Chico, today to three years in prison to be followed by three years of supervised release, for dodging taxes, defying court orders, and retaliating against federal officials involved in his case, United States Attorney Benjamin B. Wagner announced.

On May 27, 2014, after a four-day trial, a federal jury returned a guilty verdict. According to evidence presented at trial, Molen ran Touch of Class Florist in Chico, and beginning in 2000, he stopped withholding and paying federal employment and unemployment taxes. After years of collection efforts by the IRS, Molen filed false liens in 2004 against people who had been involved in his case: two federal judges, the United States Attorney, two civil Department of Justice attorneys, an IRS revenue officer, and a witness. The liens claimed collateral of more than $93 billion. After a 2007 court order prohibited him from filing more false liens against federal officers, in 2010, Molen filed false liens against two revenue officers assigned to collect his taxes, claiming more than $199,000 in collateral. Molen ignored several court orders, sent a bogus tax payment to the IRS that he called an “International Bill of Exchange,” and sought to frustrate collections by placing his residence and bank accounts in trusts.

At sentencing, Judge Nunley called the filing of retaliatory false liens against federal employees “absolutely absurd.” He referred to Molen’s many frivolous filings and statements about the authority of the federal courts concluding, “The defendant has said things that are simply stupid.” Judge Nunley further noted that in light of Molen’s deteriorating health, “Thirty-six months is not a drop in the bucket. That is a significant sentence.”

“Mr. Molen thought he could evade the federal tax laws that apply to every American by objecting to federal jurisdiction, ignoring his obligations, and attempting to harass and intimidate federal officials,” said U.S. Attorney Wagner. “The sentence imposed today reflects the fact that such tactics are both ineffective and criminal.”

This case was the product of an investigation by the Internal Revenue Service –Criminal Investigation and the United States Treasury Inspector General for Tax Administration (TIGTA). Assistant United States Attorneys Matthew D. Segal and Sherry D. Hartel Haus prosecuted the case.

SACRAMENTO, Calif. — A federal grand jury returned an 11-count indictment today against David Schell, 54, and Teri Schell, 59, both of Durham, charging them with conspiracy to manufacture, distribute and possess with intent to distribute marijuana, United States Attorney Benjamin B. Wagner announced. David Schell is further charged with nine counts of distribution of marijuana.

According to court documents, law enforcement agents discovered an Internet Protocol (IP) address that was accessing “Silk Road 2.0,” an illicit network of websites that facilitated the trafficking of contraband, particularly controlled substances, until its worldwide dismantlement on November 6, 2014. On the same day the website was taken down, agents executed a search warrant at the Schells’ residence and found more than 450 marijuana plants and quantities of processed marijuana and marijuana wax, which is a highly potent marijuana-based substance made from extracting THC from marijuana leaves. Agents also found more than $12,000 in cash and packaging and shipping materials. According to court documents, David Schell mailed more than 100 packages overseas between January and September of this year, using a variety of different return addresses.

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

The defendants are currently out of custody. They are scheduled to be arraigned on November 26, 2014, in Sacramento.

If convicted, the defendants face a maximum statutory penalty of 20 years in prison and a $1 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — U.S. Attorney Benjamin B. Wagner announced today that the Eastern District of California collected a record amount for American taxpayers in Fiscal Year 2014, which ended September 30, 2014. The office, on its own and with other U.S. Department of Justice components, collected over $9 billion in Fiscal Year 2014. These figures reflect actual amounts collected, not judgment amounts.

The office collected $21,303,839 in criminal and civil actions it handled alone in the fiscal year. Of this amount, $8,183,129 was collected in criminal actions, including both fines and restitution for victims, and $13,120,710 was collected in civil actions. Additionally, the Eastern District worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $8,979,244,434 in cases pursued jointly with those offices. Almost this entire amount is attributable to recoveries resulting from the settlement of the JPMorgan Chase case, including a $2 billion penalty directly attributable to this office’s investigation of wrongdoing relating to the sale of residential mortgage-backed securities by JPMorgan Chase. The total settlement was announced last November.

For the nation as a whole, Attorney General Eric Holder announced today that the Justice Department collected $24.7 billion in civil and criminal actions in Fiscal Year 2014. The more than $24 billion in collections in FY 2014 represents nearly eight and a half times the appropriated $2.91 billion budget for the 94 U.S. Attorneys’ offices and the main litigating divisions in that same period.

“Every day, the Justice Department’s federal prosecutors and trial attorneys work hard to protect our citizens, to safeguard precious taxpayer resources, and to provide a valuable return on investment to the American people,” said Attorney General Holder. “Their diligent efforts are enabling us to achieve justice and recoup losses in virtually every sector of the U.S. economy. And this result shows the fruits of the Justice Department’s tireless work in enforcing federal laws; in protecting the American people from violent crime, national security threats, discrimination, exploitation, and abuse; and in holding financial institutions accountable for their roles in causing the 2008 financial crisis.”

“This year was a record year for collections by this office, and I congratulate my team for the hard work reflected in these numbers” said U.S. Attorney Wagner. “We will remain dedicated to protecting the public, vigorously pursuing funds that rightfully belong to U.S. taxpayers, and seeking compensation for victims of federal crimes.”

The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.

The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.

Included in the recovery figures, is a $9.9 million settlement with Medtronic Inc. of Fridley, Minnesota, to resolve allegations under the False Claims Act that the company used various types of payments to induce physicians to implant pacemakers and defibrillators manufactured and sold by Medtronic. The settlement was the result of a coordinated effort among the Department of Justice’s Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Office for the Eastern District of California; and the Office of Inspector General of the U.S. Department of Health and Human Services.

Additionally, the U.S. Attorney’s office in the Eastern District of California, working with partner agencies and divisions, collected $25,637,920 in asset forfeiture actions in FY 2014. The fiscal year was also a record for judicial asset forfeitures in the Eastern District of California. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.

In one asset forfeiture that arose in a criminal case this past May, this office recovered more than $6.6 million as part of the forfeiture agreement in the U.S. v. Victor Anthony Nottoli case. Nottoli pleaded guilty to a conspiracy to distribute at least 24 tons of misbranded smokable synthetic cannabinoids in retail outlets throughout the U.S. and from his six smoke shops in Fresno and Bakersfield.

SACRAMENTO, Calif. — A federal jury returned a guilty verdict today, finding Donald J. Peel, 64, of Las Vegas, Nevada, guilty of transportation of a minor with the intent to engage in unlawful sexual activity, United States Attorney Benjamin B. Wagner announced.

According to court documents and evidence presented during the five-day trial, Peel initiated a sexual relationship with a 16-year-old girl in Las Vegas in late 2013. In February 2014, he took her on a trip lasting almost a month, through five states, including Nevada, Arizona, California, Oregon, and Washington. Peel had sex with the minor in each of the five states. The trip ended with Peel’s arrest in Weed, California on March 19, 2014. The minor was still accompanying him.

Evidence at trial showed that Peel targeted the teenager, who had a developmental disability and a drug problem. During the five-state trip he provided her with drugs, including heroin, methamphetamine (which he administered intravenously), and marijuana. He engaged in sexual activity with the teenager nearly every day of the trip. Also presented during the trial was evidence that Peel attempted to keep his girlfriend in Las Vegas from testifying at trial, though she ultimately testified.

This case is the product of an investigation by the Federal Bureau of Investigation, the California Highway Patrol, the Weed Police Department, Siskiyou Juvenile Probation Department, and the Franklin County Sheriff’s Office in Washington. Assistant United States Attorneys Michael M. Beckwith, Sherry D. Haus, and Matthew D. Morris are prosecuting the case.

Peel is scheduled to be sentenced by United States District Judge Garland E. Burrell Jr. on February 6, 2015. Peel faces a sentence of at least 10 years, and up to life in prison, and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. — James Berghuis, 42, of Sacramento, was sentenced to 14 years in prison for orchestrating a Ponzi scheme in the Sacramento area that defrauded family members, friends, and other acquaintances of more than $2.7 million, United States Attorney Benjamin B. Wagner announced.

On October 18, 2013, a jury convicted Berghuis of four counts of mail fraud, four counts of wire fraud, and one count of money laundering. According to evidence presented at trial, between 2005 and 2008, Berghuis convinced certain investors to take out home‑equity loans to make their investments. Berghuis promised these investors he would use their money to invest in hard-money loans, real estate transactions, or the purchase of real estate franchises. He also offered several victims a deed of trust on his commercial property, promising each that they would be in second position on the title.

In fact, Berghuis used investors’ money to pay back other investors and to buy himself luxury goods, including several Mercedes Benz cars. Berghuis purchased a top of the line S65 Mercedes Benz worth more than $200,000 by signing over a check that he had received from an investor earlier the same day. He then made a series of excuses to the investors as to why he could not pay them back on the promised dates. Some victims lost their homes or continue to pay on mortgages they took out to make their investments with Berghuis.

“Ponzi schemes like this one are devastating to the victims, and prosecuting the perpetrators of such schemes is one of our highest priorities,” U.S. Attorney Wagner said. “This office will continue to work closely with the FBI and IRS CI to root out fraudsters, and hold them accountable for their actions.”

“This is a case about lying, cheating, and stealing,” Acting IRS CI Special Agent in Charge Thomas McMahon said. “In a three-year period, Berghuis defrauded family, friends and trusting investors out of millions of dollars. Today‘s sentence reflects the seriousness of the crimes, promotes respect for the law and provides just punishment.”

“Today’s sentence should send a message to both investors and the criminals who often prey upon the victims. Berghuis’ victims lost homes and savings to an elaborate Ponzi scheme disguised as an investment opportunity,” said Special Agent in Charge Monica Miller of the Sacramento FBI. “The FBI continues to work with our law enforcement and business partners to identify and investigate fraudsters whose greed-based schemes rob individuals of their hard-earned savings and assets.”

In sentencing Berghuis to 14 years in prison, United States District Judge William B. Shubb commented that Berghuis preyed upon his family, friends and others and that they continue to suffer the consequences. Judge Shubb stated that Berghuis had “no conscience” and that rather than the giver Berghuis claimed to be, he was a “taker.” Judge Shubb explained that there was a need to deter Berghuis and others like him from perpetrating similar fraud schemes.

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 Todd A. Pickles prosecuted the case.

FRESNO, Calif. — Michael Seguine, 63, of Bakersfield, pleaded guilty today to structuring cash deposits, United States Attorney Benjamin B. Wagner announced.

Seguine is the owner of Mike’s Coin & Stamp in Bakersfield. According to court documents, from July 2009 to May 2012, Seguine made a series of cash deposits in amounts less than $10,000 for the purpose of avoiding regulations that require banks to report all deposits over $10,000. The total amount Seguine structured during that time was between $1 million and $2.5 million.

In a related civil forfeiture action, Seguine agreed to forfeit approximately $305,000 to the United States.

This case is the product of an investigation by the Internal Revenue Service-Criminal Investigation and the Bakersfield Police Department. Assistant United States Attorney Michael G. Tierney is prosecuting the case.

Seguine is scheduled to be sentenced by United States District Judge Lawrence J. O’Neill on January 26, 2015. Seguine faces a maximum statutory penalty of up to five years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables.

FRESNO, Calif. – United States District Judge Lawrence J. O’Neill sentenced Sneha Ramesh Mohammadi, 52, of Bakersfield, to 18 months in prison, to be followed by five years of supervised release, for her involvement in an extensive mortgage fraud scheme that ran from January 2004 to September 2007, United States Attorney Benjamin B. Wagner announced today.  Judge O’Neill also ordered her to join her co-defendants in paying $10,747,073 in restitution.

According to court documents, David Crisp and Carl Cole owned and operated Crisp & Cole Real Estate (CCRE) and Tower Lending, an affiliated mortgage brokerage.  Between January 2004 and September 2007, these defendants and others at CCRE and Tower Lending carried out a scheme to defraud mortgage companies and federally insured financial institutions, in part by using straw purchasers to acquire properties with funds borrowed from lenders based on false and fraudulent loan applications. The properties were nominally owned in the names of the straw buyers, but were controlled by the defendants and CCRE, and held for the benefit of the defendants and CCRE.  According to her plea agreement, Mohammadi, who worked as the office manager at Tower Lending and then as a financial officer at CCRE between March 2005 and April 2007, admitted causing lenders losses of more than $10 million based on her involvement in the conspiracy.  In addition to her role as an employee of CCRE, Mohammadi also admitted purchasing properties as a straw buyer based on false and fraudulent applications and receiving cash payments for acting as a straw buyer, all in furtherance of the conspiracy.

Mohammadi is the last defendant to be sentenced among nine others who were indicted in 2011 for their roles in the Crisp & Cole mortgage fraud scheme.  David Crisp and Carl Cole each were sentenced to 17 years and seven months in prison.  CCRE Chief Operations Officer Julie Farmer, the only defendant who took her case to trial, was sentenced to three years in prison.  Loan officer Jayson Peter Costa was sentenced to six years and six months in prison.  Real estate agent Michael Munoz was sentenced to two years in prison.  Caleb Cole was sentenced to five months in prison.  Jennifer Crisp was sentenced to five years of probation.   Robinson Nguyen has completed his 27-month sentence.

Before Mohammadi and the other Crisp & Cole defendants were indicted, five separate cases were brought, in 2009 and 2010, against five defendants who pleaded guilty to charges relating to the Crisp & Cole scheme.  Jerald Allen Teixeira is scheduled to be sentenced on February 9, 2015.  The sentences for the other defendants are as follows:  Megan Balod – 36 months’ probation; Christopher Lance Stovall – one year in prison; Kevin Patrick Sluga – 20 months in prison; and Leslie Sluga – three years’ probation.

The Crisp & Cole case was prosecuted by Assistant U.S. Attorneys Kirk E. Sherriff, Henry Z. Carbajal III, and Christopher D. Baker.

This case was investigated and prosecuted in coordination with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.

SACRAMENTO, Calif. — A federal grand jury returned a four-count indictment today against Jan Alan Shafer, 63, of Oroville, charging him with receipt of child pornography, United States Attorney Benjamin B. Wagner announced.

According to court documents, for more than two years, Shafer engaged in conversations of a sexual nature via email and an Internet instant messenger service with an adult who was posing as a 10-year-old boy. During their email exchanges, Shafer received images of child pornography, including sexually explicit images of prepubescent children.

This case is the product of an investigation by the Federal Bureau of Investigation and the Butte County Sheriff’s Office. Assistant United States Attorney Brian A. Fogerty is prosecuting the case.

Shafer was arrested on October 30, 2014, and remains in custody. He is scheduled to be arraigned before U.S. Magistrate Judge Edmund F. Brennan on November 14, 2014.

If convicted, Shafer faces a maximum statutory penalty of 40 years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

This case was brought as part of Project Safe 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.

SACRAMENTO, Calif. — Deepal Wannakuwatte, 63, of Sacramento, was sentenced today to 20 years in prison for a long-running fraud scheme, announced United States Attorney Benjamin B. Wagner, Special Agent in Charge Monica M. Miller of the FBI’s Sacramento Field Office, Acting Special Agent in Charge Thomas McMahon for the IRS-Criminal Investigation, and Special Agent in Charge Wade V. Walters of the Federal Deposit Insurance Corporation Office of Inspector General.

In addition to the prison term, United States District Judge Troy L. Nunley ordered Wannakuwatte to forfeit multiple properties, vehicles, business interests, and bank accounts to be used to provide restitution to victims. The total value of the properties, vehicles, business interests, and bank accounts is estimated to be at least $3.5 million.

According to court documents, from 2002 to 2014, Wannakuwatte convinced nearly 200 victims, including individuals, corporate entities, and financial institutions, to invest in a number of business opportunities by misrepresenting the financial worth of himself and his companies. Wannakuwatte’s companies, IMG and Relyaid, were involved in the international manufacture, shipment, and distribution of latex gloves. He falsely claimed that these companies did tens of millions of dollars in business with federal agencies every year, most notably the Department of Veterans Affairs. In 2013, Wannakuwatte claimed to have more than $125 million in VA contracts alone. In fact, while he did have a contract with the VA, it was only worth up to $25,000 a year.

Ultimately, Wannakuwatte obtained well over $230 million from his victims. Contrary to his representations, Wannakuwatte used much of the money he obtained to pay himself and his family, make lulling payments to participants in his fraudulent investment schemes, and pay outstanding debts unrelated to his false representations. A former owner of the Sacramento Capitals professional tennis team, Wannakuwatte purchased properties in Hawaii, Oregon and California.

In order to establish his financial credibility, Wannakuwatte showed investors his personal and corporate tax returns where he actually reported and paid taxes that falsely overstated his annual personal income and the annual gross receipts and sales for IMG. He used investors’ money to pay the overstated tax returns.

In sentencing Wannakuwatte, Judge Nunley told the defendant, “You embody true evil. … There is no amount of time I can sentence you to that would appease your victims.”

“This sentence brings to an end to one of the longest running, most extensive, and most damaging fraud schemes our region has ever seen,” said U.S. Attorney Wagner. “The total losses to investor victims exceeds $100 million. The sentence imposed today is tantamount to a life sentence, although no amount of prison time will undo the harm he caused to so many victims. I want to commend the FBI and IRS-CI for detecting and swiftly stopping this scheme before it caused even greater losses.”

“Wanakuwatte’s victims — individuals, businesses, government agencies, venture funds, and financial institutions — suffered as his elaborate scheme collapsed. In his high‑profile pursuit for prestige and financial gain, Wannakuwatte had no regard for public trust and the financial stability of his victims,” said Special Agent in Charge Monica M. Miller of the Sacramento Division of the Federal Bureau of Investigation. “We thank the IRS Criminal Investigation and FDIC Office of Inspector General for their partnership throughout this investigation. We are committed to aggressively pursue those who attempt to circumvent the law for personal gain.”

“This case shows that the appearance of success can mask a tangled financial web of lies,” said Acting Special Agent in Charge Thomas McMahon, IRS-Criminal Investigation. “Today’s sentencing represents the severity of the fraud committed by Wannakuwatte and those he hurt the most: the victims who fell prey to the massive fraud scheme. The victims will never be whole again from the fraud totaling more than $230 million, but rest assured they will have the comfort of knowing Wannakuwatte will be incarcerated for many years to come. This case should serve as a warning to those thinking of committing fraud.”

FDIC OIG Special Agent in Charge Wade V. Walters stated, “The sentencing of Mr. Wannakuwatte today reflects fitting punishment for a fraud scheme that victimized so many trusting individuals, businesses, government agencies, financial institutions, and others. We are pleased to have played a part in bringing Mr. Wannakuwatte to justice and value our cooperative working relationships with the U.S. Attorney's Office, FBI, and IRS-CI.”

This case is the product of an investigation by the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation, and the Federal Deposit Insurance Corporation, Office of Inspector General, Office of Investigations. Assistant United States Attorneys Michael Beckwith and Kevin Khasigian are prosecuting the case.

SACRAMENTO, Calif. —Johnny Torres, 22, of Stockton, pleaded guilty today to dealing firearms without a license, United States Attorney Benjamin B. Wagner announced.

According to court documents, Torres sold five firearms to an undercover agent at a house in Stockton. On January 15, 2014, Torres sold three firearms to the undercover agent for $1,200: a .22-caliber Ruger Mark 1 pistol, a 9 mm Hi-Point pistol, and a 9 mm KEL-TEC P11 pistol. On February 20, 2014, Torres sold the undercover agent the following firearms for $550: a Mossberg 500 12-gauge shotgun and a short-barreled Ruger 10/22 rifle. Torres never had a license to sell firearms.

This case is the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Christiaan Highsmith is prosecuting the case.

Torres currently is out of custody. Co-defendants, Donovan Torres, Melissa Torres, and Sally Evans are also out of custody pending trial. Co-defendant Jorge Magana is in custody pending trial.

Torres is scheduled to be sentenced by United States District Judge Morrison C. England Jr. on February 5, 2015. Torres faces a maximum statutory penalty of five years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. — Devon Gregory Biggs, 38, formerly of Reno, Nevada, pleaded guilty today to theft of government property, United States Attorney Benjamin B. Wagner announced.

According to court documents, while a civilian employee at the Sierra Army Depot (SIAD) in Herlong in Lassen County, Biggs stole numerous items of sophisticated military equipment, including: machine gun components, night vision goggles, laser GHOST Illumination technology, and low-light video recording equipment. On at least one occasion, Biggs sold the stolen equipment for marijuana.

This case is the product of an investigation by the Law Enforcement Division of the United States Army, Naval Criminal Investigative Service, and the Federal Bureau of Investigation. Assistant United States Attorneys Jean Hobler and Christiaan Highsmith are prosecuting the case.

Biggs is scheduled to be sentenced by United States District Judge Kimberly J. Mueller on January 28, 2015. Biggs faces a maximum statutory penalty of 10 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. — Three former Oakland residents have been arraigned in Sacramento on charges of using stolen identities to defraud the State of California of disability insurance benefits, United States Attorney Benjamin B. Wagner announced.

Jermila McCoy, 32, and Zeffrey Cain, 38, were arraigned today, and Timnesha Wilson, 21, was arraigned on Wednesday, November 5, 2014. All three defendants entered pleas of not guilty. McCoy remains in custody, and both Cain and Wilson were released on bond. Their next court date is December 18, 2014, at 9:00 a.m. before United States District Judge Morrison C. England Jr.

According to the indictment returned by a federal grand jury in Sacramento on October 23, 2014, the defendants used stolen identities of individuals throughout California to file for disability benefits with the California Employment Development Department (EDD). The defendants then caused those disability benefits claims to be certified using the stolen identities of doctors throughout the State of California. Many of the doctors whose identities were used do not certify any disability claims as part of their practice. For example, one such doctor works at a state prison and only treats inmates as part of her practice. After a claim was filed and certified, the defendants received the fraudulent disability benefits at addresses they controlled. Over 250 stolen identities were used and over $1.5 million in fraudulent benefits was received.

This case is the product of an investigation by the United States Postal Inspection Service, the United States Marshals Service, and the California Employment Development Department, Criminal Investigations. Assistant United States Attorney Jared C. Dolan is prosecuting the case.

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

FRESNO, Calif. — United States District Judge Lawrence J. O’Neill sentenced Charles Max Pollock, 43, of Las Vegas, to nine years in prison, to be followed by 20 years of supervised release, for travel in interstate commerce with the intent to engage in criminal sexual activity, United States Attorney Benjamin B. Wagner announced.

Pollock’s sentencing followed his guilty plea, which entered on August 27, 2014. According to court documents, Pollock used an alias and posed as a photographer to contact an adult female who had posted an advertisement on Craigslist in Bakersfield seeking a modeling opportunity. The ad noted that her minor son had experience as a model. Pollock traveled from Las Vegas to Bakersfield, rented a hotel room, and took sexually explicit images of the minor. Pollock returned to Las Vegas and continued to communicate with the minor and his mother. Pollock arranged to meet the minor and the minor’s girlfriend at a different hotel in Bakersfield on August 15, 2013. He encouraged the minors to engage in sexually explicit conduct for purposes of taking photographs of the minors. Pollock paid the minors for each of the “photo shoots” and encouraged them not to tell anyone about the conduct.

Pollock is an attorney who has been licensed to practice law in Nevada and California. He has been in custody since September 20, 2013, when he was arrested on state charges for a separate offense in Las Vegas. Pollock has also previously pleaded guilty to those state charges, and he will be sentenced by the state court in Nevada now that his federal court proceedings are completed.

This case was the product of an investigation by the FBI and the Bakersfield Police Department. Assistant United States Attorney David Gappa prosecuted the case.

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

FRESNO, Calif. — United States District Judge Lawrence J. O’Neill sentenced Gustavo Angel Salinas, 26, of Bakersfield, today to 21 months in prison for conspiring to violate federal narcotics laws, United States Attorney Benjamin B. Wagner announced today.

Salinas was sentenced following his guilty plea last August. According to court documents and proceedings, Salinas worked as a “budtender” at ANP Collective in East Bakersfield. Co-defendant Raymond Arthur Gentile, 53, is the owner of the marijuana storefront. The store came to the attention of Bakersfield police officers after complaints and a report of false imprisonment and assault of a customer who had been accused of stealing a gram of marijuana. In responding to the report, the officers found, among other things, a Glock firearm and evidence of an indoor marijuana cultivation operation. DEA agents responded with a search warrant and during the search found an indoor marijuana cultivation operation and seized 170 marijuana plants, 25 pounds of processed marijuana, a 12 gauge shotgun, and $68,173 in cash. The cash has been forfeited as proceeds of drug trafficking.

The case against Gentile is still pending. He is next scheduled to appear in federal court on March 9, 2015. The charges are only allegations; he is presumed innocent until and unless proven guilty beyond a reasonable doubt.

This case is the product of an investigation by the U.S. Drug Enforcement Administration and the Bakersfield Police Department. Assistant United States Attorney Karen A. Escobar is prosecuting this case.

SACRAMENTO, Calif. —Iqila Begum Khan, 34, of Live Oak, pleaded guilty today to conspiring to commit mail fraud in a fictitious employer scheme, United States Attorney Benjamin B. Wagner announced.

Iqila Khan is one of 28 defendants charged in a long-running Yuba City-based scheme that involves several family members. She is the daughter of defendant Mohammad Nawaz Khan, sister of Mohammad Adnan Khan, and niece of Mohammad Shahbaz Khan and Mohammad Riaz Khan. To date, 15 defendants have pleaded guilty to various charges. A jury trial for Mohammad Nawaz Khan and five others is scheduled for January 12, 2015.

According to court documents, the defendants set up farm labor contracting businesses that purported to provide labor to harvest various crops in Sutter and Yuba Counties. They registered the businesses with the California Employment Development Department and reported employees and their wages to EDD. The organizers of the scheme sold fraudulent paystubs to other people and reported the wages to EDD. The purchasers of the fake wages could then subsequently file for unemployment or disability benefits with EDD based on their fictitious “employment.” Because the amount of the benefit that EDD pays is based on the claimant’s prior earnings, customers were charged more for documents reflecting higher wages.

According to her plea agreement, Iqila Khan sold fake wages on behalf of the companies at a rate of $250 for every $1,000 of reported “wages.” Iqila Khan generally sold these fraudulent wages at an office on Palora Avenue in Yuba City. During the investigation, Iqila Khan was secretly recorded making a sale, where she explained to the undercover buyer how and when to file for unemployment benefits based on the fake wages and what to say if the buyer was contacted by the state. Law enforcement later executed a search warrant at the Palora Avenue office and found a black ledger providing lists of names and amounts that were to be listed as fictitious wages with EDD as well as hundreds of fraudulent paystubs associated with the scheme.

Over the course of the conspiracy, it is alleged that the defendants reported false wages for over 1,000 separate individuals that resulted in more than 2,000 fraudulent claims for unemployment benefits. The scheme is alleged to have defrauded EDD of more than $14 million.

The prosecution of this fraud scheme has consisted of two indictments in 2012, two in 2013, and a fifth indictment in 2014. The last indictment charges one of the original defendants and another man with a new scheme to sell false wages and two other individuals with committing perjury before the federal investigating grand jury.

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

Iqila Khan is scheduled to be sentenced by Chief United States District Judge Morrison C. England Jr. on January 29, 2015, and 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.

SACRAMENTO, Calif. — A federal grand jury returned a single-count indictment today against Frank Gowans III, 26, of Suisun City, charging him with felon in possession of a firearm, United States Attorney Benjamin B. Wagner announced.

According to court documents, Gowans was arrested by Vallejo police officers on October 12, 2014. The officers had observed Gowans walking with a black object in his hand. When the officers approached, Gowans discarded the object. An officer went to the area where Gowans had discarded the object and found a 9 mm handgun. Gowans was on parole at the time of arrest and is a convicted felon.

This case is the product of an investigation by the FBI and the Vallejo Police Department. Assistant United States Attorney Olusere Olowoyeye is prosecuting the case.

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

SACRAMENTO, Calif. —Daniel Gomez-Gonzalez, 32, of Mexico, pleaded guilty today to cultivating marijuana plants, United States Attorney Benjamin B. Wagner announced.

According to court documents, on July 11, 2014, United States Forest Service agents and Tehama County Sheriff’s deputies raided a marijuana cultivation site near the North Fork Antelope Creek in Tehama County in Lassen National Forest. Law enforcement counted and eradicated a total of 5,287 marijuana plants at the cultivation site. They also found a Remington shotgun, more than 1,000 pounds of trash and various types of fertilizers, insecticides, and animal poisons in the grow site. Gomez-Gonzalez was arrested on a forest trail west of the site. He told law enforcement that he was responsible for spraying, watering, and fertilizing the marijuana plants and that he expected to earn a portion of the profits generated from the marijuana grown at the site. Co-defendant Eric Perez was arrested the same day in the marijuana cultivation site.

This case is the product of an investigation by the United States Forest Service and Tehama County Sheriff’s Office. Assistant United States Attorney Christiaan Highsmith is prosecuting the case.

Gomez-Gonzalez is scheduled to be sentenced by United States District Judge Troy L. Nunley on January 22, 2015. He faces a maximum statutory penalty of 20 years in prison and a $1 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

Co-defendant Eric Perez has already pleaded guilty to manufacturing marijuana. He will be sentenced by Judge Troy L. Nunley on January 8, 2015.

FRESNO, Calif. — Anthony Lester, 51, of Fresno, was indicted today by a federal grand jury, charging him with mail fraud and money laundering, United States Attorney Benjamin B. Wagner announced.

According to court documents, Lester was the controller at Century Builders in Fresno, and later the Chief Financial Officer. During his employment, he had access to the financial accounts of another Fresno business, Highlands Energy Services. Between November 2010 and December 2011, Lester used this access to divert money from bank accounts and credit cards held by Highlands Energy Services into other financial accounts, including Lester’s own PayPal Inc. account. He attempted to conceal the embezzled funds by transferring them into his personal bank account. In total, Lester embezzled approximately $300,000 from Highlands Energy Services.

According to the indictment, employees of Highlands Energy Services and Century Builders questioned Lester about payments to some vendors because they were inconsistent with company practices. One of the questionable vendors was American Products, which was in fact a fictitious company invented by Lester to conceal his embezzlement. In response to such questions, Lester attempted to make it appear that American Products was a legitimate vendor. First, he visited a local supply company near Fresno claiming to be from “Valley Builders” (also a fictitious company). Then, he purchased weather stripping, dead bolts, spring hinges and thresholds. He packaged the goods for delivery to Highlands and labeled them as coming from American Products in New York. Then Lester sent the goods from a Fresno UPS facility.

This case is the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Fresno Police Department. Assistant United States Attorney Patrick R. Delahunty is prosecuting the case.

If convicted of mail fraud, Lester faces a maximum penalty of 20 years in prison, a $250,000 fine, and three years of supervised release. If convicted of money laundering, he faces a maximum penalty of 20 years in prison, and a fine of $500,000 or twice the value of the property involved, whichever is greater, and three years of supervised release. 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. – Biotronik Inc. of Lake Oswego, Oregon, has agreed to pay the United States $4.9 million to resolve allegations under the False Claims Act that the company made various improper payments to induce physicians to use devices manufactured and sold by Biotronik, United States Attorney Benjamin B. Wagner and the Justice Department announced today.

“When medical device manufacturers make improper payments to physicians, they encourage medical decision-making based on financial gain rather than the best interests of patients,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “Today’s resolution demonstrates the Department of Justice’s continuing commitment to ensuring that beneficiaries of federal health care programs receive appropriate medical care.”

The settlement resolves allegations that Biotronik, through the payment of kickbacks to physicians, caused hospitals and ambulatory surgery centers to submit false claims to Medicare and Medicaid for the implantation of Biotronik pacemakers, defibrillators, and cardiac resynchronization therapy devices. Biotronik allegedly induced electrophysiologists and cardiologists practicing in Nevada and Arizona to continue using Biotronik devices, or to convert to Biotronik devices, by paying the implanting physician in the form of repeated meals at expensive restaurants and inflated payments for membership on a physician advisory board.

“Today’s resolution of claims underscores one of the key purposes of the Anti-Kickback law – to ensure that the judgment exercised by health care providers in treating Medicare and Medicaid patients is not influenced by illegal payments,” said, U.S. Attorney Wagner.

The settlement announced today stems from a whistleblower complaint filed by a former Biotronik employee, Brian Sant, pursuant to the qui tam provisions of the False Claims Act, which permit private persons to bring a lawsuit on behalf of the United States and to share in the proceeds of the suit. The act permits the United States to intervene and take over the lawsuit, as it did in this case as to some of Sant’s allegations. Sant will receive approximately $840,000 of the federal settlement.

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $23 billion through False Claims Act cases, with more than $14.8 billion of that amount recovered in cases involving fraud against federal health care programs.

The settlement with Biotronik Inc. was the result of a coordinated effort among the Department of Justice’s Civil Division, the U.S. Attorney’s Office for the Eastern District of California; the U.S. Department of Health and Human Services, Office of Inspector General, and the FBI.

The claims settled by this agreement are allegations only, and there has been no determination of liability.

SACRAMENTO, Calif. — A 32-count indictment was unsealed today after the arrest of Carissa Carpenter, 51, formerly of Malibu, charging her with mail fraud, wire fraud, and three counts of making a false statement to a government agent, United States Attorney Benjamin B. Wagner announced.

According to court documents, from 1997 until October 24, 2014, Carpenter represented to investors and others that she had a project to build a movie studio in Northern California. As a result of the scheme, investors, firms who did work for Carpenter and municipalities collectively lost over $5 million on the project.

According to the indictment, Carpenter claimed that her projected movie studio complex would be profitable and environmentally friendly and was supported by well‑connected people in the entertainment industry. She said that she had invested hundreds of millions of dollars of her own money in the project and that she had arranged financing for the project but needed investment or bridge loans until the alleged financing was complete. The locations of the project varied: El Dorado Hills, north of the Sacramento International Airport in Sutter County, Lathrop, the former naval base on Mare Island in Vallejo, and Dixon, among other places. Additionally, Carpenter represented that reputable architecture, construction, design, and public relations firms were involved in the project, and that she had or was in the process of finalizing the purchase of the land where the studio would be built. As a result, investors gave Carpenter millions of dollars to invest in her studio project.

The indictment alleges that in fact, Carpenter used investor money to fund her personal expenses and extravagant lifestyle. Contrary to her claims, the Hollywood people were not involved in the project at all or had little involvement. Similarly, the architecture, construction, design, and public relations firms were not involved or had done only preliminary work on the project. She also did not own or purchase property for the studio.

Further, during the investigation in July 2013, Carpenter told an FBI agent that she told investors that she was going to use their money for personal expenses, that she had used 50-75 percent of investor money for the project, and that two well-known Hollywood producers had committed to her Lathrop project and that she had spoken to one of them. All of these statements were false.

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 Todd A. Pickles is prosecuting the case.

If convicted, Carpenter faces a maximum statutory penalty of 20 years in prison and a fine of $250,000 or twice the gross loss or gain from the fraud scheme. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — U.S. District Judge Kimberly J. Mueller sentenced Gerald Steven Kronberger, 35, of Redding, today to three years in prison for possessing images of minors engaged in sexually explicit conduct, United States Attorney Benjamin B. Wagner announced.

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

According to court documents, on June 19, 2012, HSI executed a federal search warrant at Kronberger’s residence. Forensic analysis of seized electronic equipment later indicated that Kronberger possessed many images and videos of child pornography.

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.

SACRAMENTO, Calif. — Mark E. Leung, 60, of South Lake Tahoe, was sentenced today by United States District Judge John A. Mendez to one year in prison and ordered to pay $160,000 in restitution for making a false statement to obtain workers’ compensation benefits, United States Attorney Benjamin B. Wagner announced.

According to court documents, Leung worked for the United States Postal Service until 1987 when he claimed he sustained a work-related injury. Leung never returned to full-time employment with the Postal Service and began receiving workers’ compensation benefits in 1987. From September 2007 through November 2012, Leung received approximately $160,000 in benefits from the Department of Labor, which administers the program for the United States Postal Service. To obtain the benefits, Leung submitted an annual certification form and also had his medical providers attest that he could not perform any work due to the pain that limited his mobility and range of movement. In fact, Leung was not so disabled. Among other things, while claiming he was totally disabled from employment, Leung maintained a yearly ski pass for Heavenly Ski Resort in Lake Tahoe where he regularly skied for at least 40 days per ski season. Moreover, Leung was as also observed performing arduous physical labor on numerous days.

This case was the product of an investigation by the United States Postal Service, Office of Inspector General and the Department of Labor, Office of Inspector General. Assistant United States Attorney Todd Pickles prosecuted the case.

SACRAMENTO, Calif. — Scott Edward Cavell, 31, of Sacramento, was sentenced today by United States District Judge John A. Mendez to five years in prison and ordered to pay $7.4 million in restitution, for committing wire fraud, United States Attorney Benjamin B. Wagner announced.

Scott Cavell and co-defendant Christopher Warren defrauded Florida-based lender Taylor, Bean and Whitaker Mortgage Corporation of $7.4 million. As part of the mortgage fraud scheme, Warren and Cavell transferred the stolen funds out of their various bank accounts and converted the funds into more “travel friendly” gold and coins. Warren and Cavell then fled outside the United States with the money they wrongfully acquired from TB&W. Cavell fled to Ireland on a commercial flight. He was apprehended by Irish authorities and spent nine months in an Irish jail before voluntarily agreeing to return to the United States to face justice.

Warren fled first to Ireland and then on to Lebanon in a private charter aircraft. He was arrested attempting to reenter the United States under a fraudulently obtained passport with tens of thousands of dollars hidden in his cowboy boots. He pleaded guilty and on September 11, 2012, was sentenced to 14 years in prison

This case was the product of an investigation by the Internal Revenue Service-Criminal Investigation, the Federal Bureau of Investigation, and the Department of State Diplomatic Security Service. Assistant United States Attorneys Russell L. Carlberg and Paul A. Hemesath prosecuted the case.

SACRAMENTO, Calif. — United States District Court Judge William B. Shubb today sentenced Sacramento residents Raymell Lamar Eason, 44, to 18 years and eight months in prison; and Keith Lamont Smith, 38, to 17 years and eight months in prison for conspiring to rob an armored car and attempted robbery of an armored car, U.S. Attorney Benjamin B. Wagner announced.

This case was the product of an investigation by the Sacramento Violent Crimes Task Force, which includes the Federal Bureau of Investigation, Sacramento Police Department, and the Sacramento County Sheriff’s Office. Assistant United States Attorneys William S. Wong and Michelle Rodriguez prosecuted the case.

According to court documents, on April 17, 2012, Eason and Smith planned to rob an armored car in the Wal-Mart parking lot on Florin Road in Sacramento. Having conducted surveillance on prior occasions, the two men planned to use a Taser gun on an armored car guard. They waited for the guard to leave the Wal-Mart with its currency deposits, and then Eason shot the guard with the Taser. Smith waited nearby in the getaway vehicle. However, the guard recovered faster than anticipated and was able to shoot Eason. Eason was arrested after the botched robbery, and Smith was arrested later the same day.

Both defendants were on federal supervision for prior criminal felony offenses at the time of the attempted robbery.