Eastern District of California

FRESNO, Calif. —David Ruem, 32, of Tacoma, Wash., pleaded guilty today to one count of conspiring to distribute oxycodone and hydrocodone, one count of conspiring to structure cash deposits, and one count of aggravated structuring, United States Attorney Benjamin B. Wagner announced.

According to court documents, Ruem’s co-conspirators obtained prescriptions for oxycodone and hydrocodone from a doctor in Visalia, Calif., filled those prescriptions at pharmacies in Modesto, and then transported and mailed the pills to Washington for distribution on the black market. Ruem illegally sold the oxycodone and hydrocodone and then deposited the cash proceeds of those sales into bank accounts held by co-conspirators in California. He made the cash deposits in amounts of $10,000 or less to attempt to prevent Currency Transactions Reports from being filed by the banks on his cash deposits. Currency Transactions Reports are reports prepared by financial institutions for any transaction involving more than $10,000 in cash. These reports are filed with the Department of Treasury and are made available to law enforcement.

Ruem is scheduled to be sentenced by Judge Anthony W. Ishii on June 2, 2014. Ruem faces up to 20 years in prison and a $1 million fine for conspiring to distribute oxycodone, up to five years in prison and a $250,000 fine for conspiring to structure, and up to 10 years in prison and a $500,000 fine for aggravated structuring. 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 being brought as part of Operation Footprint, a nationwide law enforcement initiative led by the U.S. Attorney’s Offices, the Internal Revenue Service – Criminal Investigation, the Drug Enforcement Administration, and the United States Postal Inspection Service. Operation Footprint targets large drug trafficking organizations by identifying the transfer of drug proceeds through financial institutions, bulk cash smuggling and other forms of money transfers. Operation Footprint is focused on bringing criminal charges based on Bank Secrecy Act violations in addition to violations of the Controlled Substances Act and the Money Laundering Control Act. This case is also the product of the Organized Crime Drug Enforcement Task Force (OCDETF), a focused multi-agency, multijurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies. Assistant U.S. Attorney Grant B. Rabenn is prosecuting the case.

FRESNO, Calif. — Bounseuth Thourakhone, 54, of Laos, was sentenced to three years and three months in prison and Bounhome Singharath, 63, of Las Vegas, entered a guilty plea today for their involvement in a marijuana cultivation operation in Squaw Valley in eastern Fresno County, U.S. Attorney Benjamin B. Wagner announced.

According to court documents, law enforcement officers found 1,429 marijuana plants at a grow site on Ripple Lane in Squaw Valley. Singharath was leaving the grow site in knee high rubber boots and camouflage pants and Thourakhone was hiding in the bathroom of a trailer on the property. Singharath said he is a resident of Las Vegas and had been living at the grow site for approximately two months for the purpose of growing marijuana. Thourakhone also admitted to growing marijuana there.

Singharath is scheduled for sentencing on May 19, 2014. He faces a mandatory minimum prison term of 10 years, a maximum prison term of life and a $10 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

This case is the product of an investigation by the U.S. Drug Enforcement Administration and Fresno County Sheriff’s Office. Assistant U.S. Attorney Karen A. Escobar is prosecuting the case.

FRESNO, Calif. — Stephen J. Johnson, 66, of Linden, was sentenced today by United States District Judge Lawrence J. O'Neill to 15 months in prison for committing perjury before a federal grand jury and making false statements to the FBI United States Attorney Benjamin B. Wagner announced.

According to court documents, Johnson, a law enforcement dog trainer who worked in the Central Valley, was charged with conspiring to obstruct an FBI investigation into Bob Holloway, former owner of Road Dog Cycle in Denair, along with Holloway, retired Stanislaus County Deputy Sheriff Dave Swanson, and Gary Ermoian, a private investigator from Stanislaus County. Johnson was also charged with two counts of making false statements to the FBI and six counts of perjury before a federal grand jury.

At trial, the wiretap evidence revealed that in September 2007, Ermoian, acting on confidential law enforcement information received from Swanson, alerted Holloway that search warrants might be executed at Holloway's residence and business. Thereafter, Ermoian and Holloway discussed how to hide evidence from law enforcement, and, along with Johnson, discussed possible law enforcement surveillance activity at Road Dog Cycle. However, when interviewed by the FBI in 2008, Johnson denied assisting Holloway in hiding evidence and informing Holloway about law enforcement surveillance. Johnson then testified under oath before a federal grand jury later in 2008 and further denied assisting Holloway.

Ermoian and Johnson were convicted at trial on all charges, but Swanson was acquitted. Holloway had pleaded guilty to racketeering charges prior to trial. Last year, the Ninth Circuit Court of Appeals reversed the obstruction of justice count against Ermoian and Johnson. Johnson therefore had to be re-sentenced on the perjury and false statement counts of which he was convicted.

This case was the product of an investigation by the Central Valley Gang Impact Task Force, a task force composed of state and federal law enforcement agencies, including the Modesto Police Department, the Stanislaus County Sheriff's Department, the Stanislaus County District Attorney's Office and the FBI. Assistant United States Attorneys Mark E. Cullers and Laurel J. Montoya prosecuted the case.

FRESNO, Calif. — Sergio Patrick Rodriguez, 26, of Clovis, Calif., was sentenced today to 14 years in prison for aiming a laser pointer at Fresno police helicopter Air 1, and attempting to interfere with its operation, United States Attorney Benjamin B. Wagner announced. Calling him a “walking crime spree,” United States District Judge Lawrence J. O'Neill said the crime was serious with potentially deadly consequences.

Rodriguez and his girlfriend, Jennifer Lorraine Coleman, 23, were both convicted by a federal jury after a three–day trial in Fresno in December 2013.

According to evidence presented at trial, Rodriguez and Coleman used a high-powered green laser pointer to repeatedly strike the cockpit of Air 1 during a clear summer night in 2012. Air 1 had responded to the apartment complex where Rodriguez and Coleman resided near the Fresno Yosemite International Airport to investigate the report of laser strikes on Air George, an emergency transport helicopter for Children’s Hospital of Central California. The laser pointer that Rodriguez and Coleman used was 13 times more powerful than the permissible power emission level for hand-held laser devices. The crew members of both Air 1 and Air George testified that the laser strikes caused significant visual interference.

In imposing the sentence, Judge O’Neill considered not only the severity of the offenses but Rodriguez’s significant criminal history, numerous probation violations, and Bulldog gang affiliation. In addition, Dr. Leon McLin, a Senior Research Optometrist for the Air Force Research Laboratory who testified at trial, indicated at sentencing that the laser pointer that Rodriguez used was an instrument capable of inflicting serious bodily injury and, indirectly, death due to a high potential for crash caused by visual interference.

“We in federal law enforcement understand the dangers posed by laser strikes on aircraft,” U.S. Attorney Wagner stated. “This is not a game. It is dangerous, and it is a felony. Those who aim lasers at aircraft should know that we will seek to convict them, and we will seek to send them to prison. The safety of aircraft and the people in them demands no less.”

“Lasing aircraft is not a joke or a casual prank. It is reckless behavior that can have fatal consequences for air crew, passengers and the public on the ground,” said Special Agent in Charge Monica M. Miller of the FBI’s Sacramento field office. “Rodriguez’s sentence clearly demonstrates the seriousness of his actions and that the FBI will work with its law enforcement partners to locate and arrest those who engage in dangerous, improper use of hand-held lasers that puts us all at risk.”

“Deliberately pointing a laser at an aircraft is a criminal act with serious safety repercussions,” said FAA Administrator Michael Huerta. “We applaud law enforcement agencies and the U.S. Attorney's Office for their efforts to combat this serious problem.”

This case is the product of an investigation by the Federal Bureau of Investigation with assistance from the Clovis and Fresno Police Departments, the Federal Aviation Administration, and the National Institute of Standards and Technology of the U.S. Department of Commerce. Assistant United States Attorneys Karen A. Escobar and Michael G. Tierney are prosecuting the case.

Sentencing for co-defendant Coleman is set for May 12, 2014. She faces a maximum statutory penalty of five years in prison and a $250,000. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

According to the FAA, there were 3,960 reports of people shining lasers at aircraft in the United States in 2013. The Eastern District of California, which encompasses 34 counties in the eastern portion of California, reported 94 laser strikes, with the largest number of laser incidents reported by the Fresno Yosemite International Airport and Bakersfield Meadows Field Airport. Law enforcement and emergency transport helicopters are particularly vulnerable, since they typically fly at lower altitudes. Their convex-shaped windows also cause greater refraction and visual interference when the beam of a laser strikes. Night-vision goggles can also amplify the beam and pose a greater threat of visual interference.

On February 11, 2014, in 12 cities, the FBI, in collaboration with the Air Line Pilots Association International and the FAA, announced the Laser Threat Awareness campaign, a nationwide effort to alert the public to the threat that aircraft laser illumination poses and the penalties for such activity. The FBI will offer up to $10,000 for information leading to the arrest of any individual who intentionally aims a laser at an aircraft. If you have information about a laser strike, contact your local FBI office. Tips can also be submitted online at https://tips.fbi.gov. If you see someone pointing a laser at an aircraft, call 911.

FRESNO, Calif. — A federal grand jury returned a four-count indictment today against Emilio Perez-Solis, 39, of Oakland, and Hernan Cortes, 53, of Tulare, charging them with criminal copyright infringement for private financial gain, criminal copyright infringement, trafficking in counterfeit labels, documentation and packaging, and conspiracy, United States Attorney Benjamin B. Wagner announced.

According to court documents, the defendants used an agriculture building in Fresno as a distribution point for counterfeit CDs and counterfeit DVDs. From the building, Perez-Solis sold counterfeit CDs and DVDs, including movies that were only in theatrical release and not yet available on DVD. Cortes assisted Perez-Solis in distributing counterfeit media from the building. On February 21, 2014, the building in Fresno County was found to contain approximately 70,000 counterfeit music CDs and movie DVDs.

This case is the product of an investigation by the U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), with assistance from the Fresno County Sheriff's Department. Assistant United States Attorneys Henry Z. Carbajal III and Patrick R. Delahunty are prosecuting the case.

"Commercial piracy and product counterfeiting undermine the U.S. economy, rob Americans of jobs, stifle American innovation and promote other types of crime," said Mike Prado, resident agent in charge of HSI Fresno. "Intellectual property theft amounts to economic sabotage, which is why HSI will continue to aggressively pursue product counterfeiters and those who sell counterfeit products."

Perez-Solis and Cortes are currently in custody, and are scheduled to be arraigned in Fresno on March 10, 2014, at 1:30 p.m. If convicted, Perez-Solis and Cortes face a maximum statutory penalty of five years in prison and a $250,000 fine for the conspiracy, copyright infringement for financial gain, and trafficking in counterfeit labels charges. Criminal copyright infringement carries a maximum statutory penalty of three years in prison. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

Individuals can provide invaluable assistance to HSI by reporting suspicious criminal activity to the HSI Tip Line at 866-DHS-2ICE (866-347-2423).

SACRAMENTO, Calif. — Susan Yvonne Eversoll, 46, of Sacramento, was sentenced this morning by U.S. District Court Judge Troy L. Nunley to 18 months in prison, to be followed by three years of supervised release and a $5,000 fine, for conspiring to traffic in counterfeit goods, United States Attorney Benjamin B. Wagner announced.

This case is the product of an investigation by the Federal Bureau of Investigation and the Sacramento County Sheriff’s Hi-Tech Crimes Task Force. Assistant United States Attorney Michelle Rodriguez is prosecuting the case.

According to court documents, law enforcement received information about “Viagra” and “Cialis” being offered for sale through the Internet on Craigslist. Law enforcement later conducted controlled drug purchases of counterfeit Viagra from co-defendant Rickey Lee Campbell, 60, of Sacramento, who used the alias “Diamond Jim.” Eversoll and Campbell’s residences were searched and more than 6,000 counterfeit tablets resembling Viagra and Cialis in shape, size, and color were found. Authorities also recovered computers and electronic devices the conspirators used to sell the counterfeit goods.

Campbell has pleaded guilty to the conspiracy and is scheduled to be sentenced on May 8, 2014. He faces up to 10 years in prison for his leadership role in the conspiracy. His 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 two-count indictment today against Brian Caputo, 25, of Arvin, charging him with sexual exploitation of a minor and receipt and distribution of child pornography, United States Attorney Benjamin B. Wagner announced.

According to court documents, Caputo for the past eight years has used social media accounts with Facebook, Kik Messenger, Text Me! as well as Yahoo! and Dropbox accounts to communicate with dozens of minor females throughout the United States while posing as a minor female. Soon after establishing communication with the minor females, Caputo would threaten to reveal sexually explicit images of their friends unless the minor females created and sent to him images of themselves nude or engaging in sexually explicit conduct. In June 2013, Caputo contacted a 12-year-old girl in El Paso, Texas and threatened to distribute sexually explicit pictures of her 11-year-old friend unless she sent nude images of herself to Caputo. She told a family member who contacted the El Paso Police Department, and they started an investigation.

When law enforcement investigators traced the threatening communications to Caputo, they discovered that he had been victimizing many other minor females across the United States. For example, Caputo convinced one minor female to take and then upload more than 660 sexually explicit images of herself to a Dropbox account controlled by Caputo. When agents executed a search warrant at his residence in Arvin, on February 28, 2014, Caputo's cell phone contained hundreds of images of girls ages 11-15 undressing, nude, or engaging in sexually explicit conduct. Caputo then traded the images with other Internet users.

To date, at least eight minor females have been identified, although law enforcement is attempting to confirm the identity of many other victims. Caputo established Facebook accounts, and contacted minor females, using the names Giavanna Derann, Catness Love, Melissa Harpson, Cristal Dafnie, and Britt Any. Anyone who believes that they might have been a victim of Caputo's offenses is encouraged to contact the FBI's Bakersfield office at (661) 323-9665.

The investigation of this case is ongoing and has been done by the Federal Bureau of Investigation Offices in El Paso, Texas and Bakersfield, Calif., with assistance from the El Paso Police Department and the FBI's Violent Crimes Against Children Task Force. Assistant United States Attorney David Gappa is prosecuting the case. Caputo is scheduled to appear before United States Magistrate Judge Sheila K. Oberto on Monday, March 10, 2014, at 1:30 p.m. for arraignment and to determine whether he should remain detained or be released on bond.

If convicted, Caputo faces a maximum statutory penalty of 30 years in prison for sexual exploitation of a minor and 20 years in prison for receipt or distribution of child pornography and a $250,000 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.

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

SACRAMENTO, Calif. — Joshua Anthony Bond, 25, of Grants Pass, Ore., pleaded guilty today to illicit trafficking in controlled substances and being a felon in possession of firearms, United States Attorney Benjamin B. Wagner announced.

This case is the product of an investigation by the Federal Bureau of Investigation, the Willows office of the California Highway Patrol, and the Glenn County Sheriff's Department. Assistant United States Attorney Michelle Rodriguez is prosecuting 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.

Bond is scheduled to be sentenced by U.S. District Judge Troy L. Nunley on May 22, 2014. The charges to which Bond pleaded guilty carry a possible sentence of up to life in prison. The plea agreement contemplates a sentence of 15 to 17.5 years in prison. The actual sentence, however, will be determined at the discretion of the court at the hearing.

SACRAMENTO, Calif. —Kyle Michael Hall, 24, of Woodland, pleaded guilty today to distribution of child pornography, United States Attorney Benjamin B. Wagner announced.

According to the plea agreement filed in the case, on November 28, 2012, Hall was arrested after attempting to force a woman into his truck that was parked in a Raley’s parking lot in Woodland. Hall was a transient living out of his truck in the Woodland area. Upon his arrest, Hall turned his personal property over to a friend.

The next day, Hall’s friend brought Hall’s computer to the Woodland police station. He said that he had been looking through it and found some “disgusting” things. Located on the computer were approximately 108 images and 115 videos of child pornography. In addition, forensic analysts with the Yolo County District Attorney’s Office located multiple instant messages on the computer. In these messages, Hall discussed child pornography and traded images and videos.

The computer forensic analysis also identified multiple Skype chats in which Hall spoke with minors about sexually explicit topics. In one exchange with a 17-year-old from Santa Fe, New Mexico, Hall asked if he could drive to New Mexico to pick up the girl. In other chats, Hall offered money to minors in an attempt to entice them into sending him sexually explicit photos or videos.

This case is the product of an investigation by the Woodland Police Department and the Yolo County District Attorney’s Office. Assistant United States Attorneys Kyle Reardon and Olusere Olowoyeye are prosecuting the case.

Hall is scheduled to be sentenced by Judge Lawrence K. Karlton on May 20, 2014. Hall faces a penalty of five to 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 prosecution is part of the Department of Justice’s ongoing Project Safe Childhood initiative which was launched to increase federal prosecutions of sexual predators of children, and to reduce the number of Internet crimes against children including child pornography trafficking. As a part of PSC, the United States Attorney’s Office has teamed with state and local agencies and organizations to increase law enforcement presence on the Internet, and to educate the public about safe Internet use, thereby reducing the risk that children might fall prey to online sexual predators. For additional information on the PSC initiative, please go to www.projectsafechildhood.gov.

SACRAMENTO, Calif. —John Hagener, 77, of Granite Bay, and Dawn C. Powers, 43, of Lincoln, separately pleaded guilty today to conspiracy charges, United States Attorney Benjamin B. Wagner announced.

According to court documents, Hagener pleaded guilty to conspiring to commit mail fraud, and Powers pleaded guilty to conspiring to commit wire fraud for their involvement in a mortgage fraud conspiracy and a large-scale Ponzi scheme in Northern California allegedly run by Lawrence Lee Loomis, aka Lawrence Leland Loomis. Loomis and his father-in-law, Hagener, operated a Ponzi scheme in 2007 and 2008 that victimized more than 100 people and caused more than $7 million of losses related to the sale of shares in an investment program called the Naras Funds.

A previously filed indictment charged Loomis and four other defendants, including Powers, in two related mortgage fraud schemes that caused more than $10 million in losses to mortgage lenders and others. The charges are pending against Loomis and three other defendants. An October 2014 trial date has been set before Judge John A. Mendez in Sacramento. The charges are only allegations; they are presumed innocent until and unless proven guilty beyond a reasonable doubt.

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 Paul A. Hemesath is prosecuting the case. The Securities and Exchange Commission has filed separate proceedings against Hagener in an ongoing case.

Hagener and Powers are scheduled to be sentenced by Judge John A. Mendez on June 10, 2014. They face 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.

FRESNO, Calif. —Travis Raymond Wilson, 38, of Huntington Beach, Calif., was sentenced yesterday by Judge Anthony W. Ishii to two years of probation for structuring, United States Attorney Benjamin B. Wagner announced.

The Bank Secrecy Act requires financial institutions, such as banks, to file Currency Transaction Reports (CTR) on any cash transaction in an amount greater than $10,000. CTRs are filed with the United States Department of Treasury and are made available to law enforcement agencies, such as the Federal Bureau of Investigation. It is a federal crime to make cash deposits in an amount of $10,000 or less with the intent to prevent a financial institution from filing CTRs such transactions.

According to court documents, Wilson was a special agent with the Federal Bureau of Investigation beginning in 2004 and continuing through 2013. He was most recently a supervisory special agent in the FBI Long Beach Resident Office of the Los Angeles Field Office until his resignation from the FBI in December 2013. Between January 2008 and February 2013, Wilson regularly gambled at casinos in California, Nevada, Arizona, and West Virginia. Even though he frequently left the Casinos with more than $10,000 cash, Wilson regularly made deposits in amounts of $10,000 or less into his bank account. Wilson structured his cash deposits to attempt to prevent CTRs from being filed on him because he did want not the FBI to become aware of his gambling activities. In total, Wilson structured more than $488,000 in cash into his bank account over this time period.

This case was the product of an investigation by the Internal Revenue Service, Criminal Investigation, the Department of Justice Office of Inspector General, and the Central California Financial Crimes Task Force. Assistant United States Attorney Grant B. Rabenn prosecuted the case.

SACRAMENTO, Calif. — A federal grand jury returned a sealed three-count indictment on February 27, 2014, against Kamyar Soltani, 45, of El Dorado Hills, charging him with attempted tax evasion, United States Attorney Benjamin B. Wagner announced. The pending indictment was unsealed today.

Soltani was arrested on Monday, March 3, 2014. He was arraigned and pleaded not guilty. He was released on a $100,000 bond.

According to IRS-Criminal Investigation Special Agent in Charge José M. Martinez, “All Americans have a duty to pay their fair share. The prosecution of individuals who intentionally conceal income and evade taxes is a vital element in maintaining public confidence in our tax system. We should not expect the honest taxpayer to foot the bill for those who hide income from the IRS."

According to court documents, Soltani attempted to evade his tax obligations for the tax years of 2005, 2006, and 2007. In each of those years, Soltani received income subject to taxation of well-over $200,000, and failed to file timely income tax returns for the tax years of 2005 and 2006. He ultimately filed tax returns for all three tax years in March 2008, but those returns were false; the resulting tax due and owing over three years totaled more than $150,000. Moreover, as alleged in the indictment, Soltani attempted to evade the proper assessment of his tax obligations by, among other things: receiving compensation in cash; having his compensation paid directly to, or in the names of, nominees, family members, and a creditor; concealing his income in his parents’ bank account; and filing three false tax returns in March 2008.

This case was the product of an investigation by the Internal Revenue Service – Criminal Investigation. Assistant United States Attorney Nirav Desai is prosecuting the case.

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

SACRAMENTO, Calif. — Steven K. Zinnel, 50, of Gold River, was sentenced today by United States District Judge Troy L. Nunley to 17 years and eight months in prison and a $500,000 fine, for 15 counts of bankruptcy fraud and money laundering, United States Attorney Benjamin B. Wagner announced. Judge Nunley also ordered Zinnel to forfeit to the United States real estate and corporate interests worth over $2.8 million.

U.S. Attorney Wagner stated: “Mr. Zinnel attempted to escape his financial responsibilities through the fraudulent misuse of the Bankruptcy Court. Today’s sentence, believed to be the longest prison sentence ever imposed in a bankruptcy fraud case in this district, holds him responsible for his crimes and helps protect the integrity of the federal bankruptcy process.”

“Zinnel knowingly broke laws in a spiteful attempt to deprive his former spouse and children of his support,” said Special Agent in Charge Monica M. Miller of the FBI’s Sacramento field office. “Today he is seeing the cost of his creative scheme to intentionally conceal his assets.”

“Today’s sentencing sends a clear message to those who use the bankruptcy system to evade their debt obligations to the government and their creditors,” said José M. Martínez, Special Agent in Charge, IRS-Criminal Investigation. “This was a serious, long-running crime committed by a man who gave it a lot of thought and purpose. Mr. Zinnel’s crimes were filled with fraud and deceit, and he deserves the punishment handed down today.”

Trial testimony established that Zinnel concealed assets from the bankruptcy court by putting his property in other people’s names. One of the things that Zinnel hid from the bankruptcy court was an investment in an electrical infrastructure company in which he had invested as a “silent partner.” Zinnel invested hundreds of thousands of dollars and prepared the corporate filings, but his name did not appear in any public filing of this company. For years, the company paid distributions to Zinnel as an owner, but those distributions were disguised as payments to a shell company, Done Deal, Inc., held in the name of co-defendant Derian Eidson. The court noted that the purpose of establishing Done Deal was to “raid the coffers” of the electrical infrastructure company without being identified anywhere. The court ordered Zinnel’s interest in that company forfeited, and the government is to receive $2.8 million from its sale to its records owner.

After the successful concealment of the property and the discharge of Zinnel’s bankruptcy, Zinnel laundered funds back to himself through attorney Derian Eidson’s company, Done Deal Inc., her attorney-client trust account, and her personal bank account. Zinnel throughout this time used several different corporations registered in others’ names, including one registered with a forged signature, to disguise his control of property and to direct the disposition of money. Eidson gave Zinnel signature authority over her company’s bank account, which he used for his personal expenses.

At today’s sentencing hearing, Zinnel’s ex-wife explained how the investigation of Steven Zinnel began with Zinnel’s call to the FBI asking that the FBI investigate her. According to papers on file with the court, when agents followed up on Zinnel’s call to the FBI, his own bankruptcy crimes were discovered.

Calling Zinnel “narcissistic,” Judge Nunley cited Zinnel’s repeated deception of the bankruptcy court, the bankruptcy trustee, and family court as evidence of Zinnel’s culpability in the complex bankruptcy fraud and money laundering scheme. Even after the bankruptcy, Zinnel laundered his money through shell corporations in order to disguise income that otherwise would have affected his child support obligations.

“You don’t lie before a court of law,” Judge Nunley admonished Zinnel. “You don’t continue to lie, which is what you did.” Judge Nunley found that Zinnel’s gifts of being articulate and charismatic were used toward promoting Zinnel’s “own selfish ends.”

This case is the product of an investigation by the FBI and IRS Criminal Investigation. Assistant United States Attorneys Matthew D. Segal and Audrey B. Hemesath prosecuted the case. The Office of the U.S. Trustee provided important support and expertise in the course of the prosecution.

Zinnel’s restitution hearing is set for March 31, 2014, at 9:00 a.m. At that time, Judge Nunley will also sentence Zinnel’s co-defendant, attorney Derian Eidson, for her role in Zinnel’s scheme.

FRESNO, Calif. — Senior United States District Judge Anthony W. Ishii sentenced Leonel Martinez Caballero, 31, of Modesto, today to four years in prison, United States Attorney Benjamin B. Wagner announced. Caballero pleaded guilty on November 25, 2013 to conspiracy to commit criminal copyright infringement and traffic in counterfeit labels and counterfeit documentation and packaging.

According to court documents, from April 2011 to July 25, 2011, Caballero was involved in an extensive scheme with others to store and distribute counterfeit DVD movies and audio CDs. Caballero managed a warehouse in Modesto that served as a distribution point for counterfeit music CDs and counterfeit movie DVDs. On July 25, 2011, the warehouse was found to contain over 100,000 counterfeit CDs and DVDs.

This case is the product of a joint investigation by the Federal Bureau of Investigation and the Sacramento Valley Hi-Tech Crimes Task Force, with assistance from the Stanislaus County Sheriff’s Department. Assistant United States Attorney Henry Z. Carbajal III prosecuted the case.

FRESNO, Calif. — Noe Alvarez Ramirez (Alvarez), 28, and Carlos Adan Lupia-Lua, 26, both of Michoacàn, Mexico, entered guilty pleas today for their involvement in separate marijuana cultivation operations in Kern and Tulare Counties, according to U.S. Attorney Benjamin B. Wagner.

7,302 Marijuana Plants Seized from Sequoia National Forest (1:13CR172 AWI)

Alvarez pleaded guilty to conspiring to manufacture, distribute, and possess with intent to distribute marijuana grown in the Gibboney Canyon area of the Sequoia National Forest in Kern County. The area is also within the federally designated Domeland Wilderness area. According to court documents, U.S. Forest Service agents seized 7,302 marijuana plants from the site and found 5,000 marijuana plant stalks consistent with a prior harvest in 2012. During the execution of a federal search warrant at the site, agents found Alvarez sleeping in a tent. In entering his guilty plea, Alvarez agreed to pay $2,675 in restitution to the U.S. Forest Service to pay for the negative environmental impact of the cultivation operation. Trash and fertilizer bags were scattered about the area and the ground was terraced after native vegetation, including oak trees, was cut down to make room for the marijuana plants. Trash was also found in the waterway of Gibboney Creek. Alvarez is subject to deportation to Mexico after he serves his sentence.

This case is the product of an investigation by the U.S. Forest Service, U.S. Drug Enforcement Administration, California Department of Fish and Wildlife, and Kern County Sheriff’s Office.

1,313 Marijuana Plants/Firearms Seized From Tulare County Ag Grow (1:12cr341 LJO)

Lupian-Lua pleaded guilty to cultivating marijuana on agricultural land in Terra Bella. According to court records, drug agents discovered the cultivation operation after following a supplier to the property. The supplier had previously delivered equipment and material for other marijuana cultivation operations on public lands in Ventura, San Luis Obispo, and Kern Counties. During the execution of a federal search warrant at the Terra Bella property, agents seized 1,313 marijuana plants, two firearms, and arrested six people, including Lupian-Lua. The marijuana had a wholesale value of $1.5 million.

The case is the product of an investigation by the U.S. Forest Service, Homeland Security Investigations (HSI) of Immigration and Customs Enforcement (ICE), and the sheriff’s offices of Tulare and Ventura Counties.

Alvarez is scheduled for sentencing on May 12, 2014, and Lupian-Lua is scheduled for sentencing on May 27, 2014. Both Alvarez and Lupian-Lua face a sentence of 10 years to life in prison and a $10 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

Assistant U.S. Attorney Karen A. Escobar is prosecuting the above cases.

FRESNO, Calif. —Phary David Chim, 31, of Kent, Wash., pleaded guilty today to one count of conspiracy to structure cash transactions and one count of aggravated structuring, United States Attorney Benjamin B. Wagner announced.

According to court documents, Chim’s co-conspirators obtained prescriptions for oxycodone and hydrocodone from pharmacies in Modesto, Calif. and then transported and mailed the pills to Washington for distribution on the black market. Chim deposited the cash proceeds of the oxycodone and hydrocodone sales into bank accounts held by co-conspirators in California. He made the cash deposits in amounts of $10,000 or less to attempt to prevent Currency Transactions Reports from being filed by the banks on his cash deposits. Currency Transactions Reports are reports prepared by financial institutions for any transactions involving more than $10,000 in cash. These reports are filed with the Department of Treasury and are made available to law enforcement.

This case is being brought as part of Operation Footprint, a nationwide law enforcement initiative led by the U.S. Attorney’s Offices, the Internal Revenue Service- Criminal Investigation, the Drug Enforcement Administration, and the United States Postal Inspection Service. Operation Footprint targets large drug trafficking organizations by identifying the transfer of drug proceeds through financial institutions, bulk cash smuggling and other forms of money transfers. Operation Footprint is focused on bringing criminal charges based on Bank Secrecy Act violations in addition to violations of the Controlled Substances Act and the Money Laundering Control Act.

This case is also the product of the Organized Crime Drug Enforcement Task Force (OCDETF), a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies. Assistant U.S. Attorney Grant B. Rabenn is prosecuting the case.

Chim is scheduled to be sentenced by Judge Anthony W. Ishii on May 12, 2014. He faces a maximum statutory penalty of five years in prison and a $250,000 fine for structuring conspiracy, and a maximum statutory penalty of 10 years in prison and a $500,000 fine for aggravated structuring. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

BAKERSFIELD, Calif. — A federal grand jury returned a three-count indictment today against Keyvan Asari, 43, charging him with theft of U.S. mail, United States Attorney Benjamin B. Wagner announced.

According to court documents, Asari knowingly possessed checks in February and March of 2013 that he knew had been stolen from the mail.

Last month in a separate case, a federal grand jury returned an indictment against Christine Marie Fritzler, 44, of Kerman, for theft of U.S. mail. According to the five-count indictment, Fritzler stole mail from collection boxes at Bakersfield post offices on 2525 East Brundage Lane and 3200 Larson Lane on several occasions between June and August 2013. Fritzler’s next court appearance is on March 17, 2014.

San Francisco Division Inspector in Charge Rafael Nunez of the U.S. Postal Inspection Service stated, “We are working closely with the U.S. Attorney’s Office and our partners in law enforcement to arrest and prosecute those responsible for mail theft and to protect postal customer’s mail from theft.”

Both cases are the product of investigations by the United States Postal Inspection Service, and are part of Operation Mailbox, an ongoing effort to work with local law enforcement partners to investigate and prosecute stolen mail offenses. To date, Operation Broken Mailbox has resulted in at least 22 arrests, 33 searches, the recovery of 10 counterfeit or stolen postal keys, and the identification of more than 2,100 victims and nearly $400,000 in losses. Assistant United States Attorney Megan A. S. Richards is prosecuting the cases.

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

SACRAMENTO, Calif. — Myron Jacobs, 41, of San Leandro, was sentenced today by United States District Judge Morrison C. England Jr. to 27 months in prison and ordered to pay $66,748 in restitution for mail fraud, associated with a student aid fraud scheme, United States Attorney Benjamin B. Wagner announced.

According to court documents, between August 1, 2009, and December 31, 2011, Stacey and Myron Jacobs engaged in a scheme to defraud the Department of Education by recruiting individuals to act as straw students at various community colleges and applying for financial aid assistance in their names. The recruited straw students were not active students at these schools and many did not intend to become active students at these schools. Stacey Jacobs had the financial aid funds sent to addresses associated with her or to others with whom she was associated. Due to the scheme, the Department of Education lost at least $66,748.

This case is the product of an investigation by the U.S. Department of Education OIG. Assistant United States Attorney Lee S. Bickley prosecuted the case.

Myron Jacobs is currently in custody. His co-defendant Stacey Jacobs is next scheduled for a status conference on May 22, 2014. The charges against her are only allegations; she is presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — A federal grand jury indicted brothers Luis Cortez-Garcia, 44, and Emiliano Cortez-Garcia, 37, of Sacramento, today charging them with unlawful manufacturing and sales of firearms, conspiracy to unlawfully manufacture and sell firearms, and several counts each related to the unlawful possession, manufacturing, and sale of short-barreled rifles, machine guns, and silencers, announced U.S. Attorney Benjamin B. Wagner; Bureau of Alcohol, Tobacco, Firearms, and Explosives Special Agent in Charge Joseph M. Riehl; Assistant Special Agent in Charge for Homeland Security Investigations Daniel Lane; and California Department of Justice Bureau of Firearms Chief Stephen Lindley. Both defendants are charged with being an alien in possession of firearms, and Emiliano Cortez-Garcia is also charged with being a felon in possession of firearms.

During the course of a joint investigation by the United States Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), and the California Department of Justice, Bureau of Firearms (BOF), undercover agents and at least one convicted felon purchased manufactured-to-order assault weapons from the defendants. These firearms did not have any manufacturer markings or serial numbers, making them untraceable should they be involved in criminal activity. The purchases were for cash, and no background check, waiting period, or required transaction paperwork was completed.

According to search warrants unsealed today, Luis Cortez-Garcia and Emiliano Cortez-Garcia are part of a network of individuals engaged in the illegal manufacture and sale of firearms. On October 9, 2013, eleven locations were searched in Sacramento, West Sacramento, Antelope, Auburn, Ione, Placerville, and Fresno. During those searches, agents seized 345 guns, including multiple fully automatic assault rifles, illegal short-barreled rifles, and silencers.

"The conduct alleged in this case involves the systematic evasion of federal firearms laws, for profit, in a manner that created a real threat to public safety," said U.S. Attorney Wagner. "The unregistered, untraceable firearms created and sold by these defendants included multiple AR-15-style assault rifles, similar to the guns used in shootings in Newtown, Connecticut and Aurora, Colorado. Our investigation is ongoing, and we expect to charge additional persons involved in similarly dangerous commercial sales of illegal guns."

"Manufacturing and selling unmarked firearms is illegal and poses grave danger to our communities," said ATF Special Agent in Charge Riehl. "These unmarked firearms used in violent crimes are difficult, if not impossible to trace back to perpetrators of the offense."

"The federal regulations involving the manufacture, sale and export of firearms are designed to ensure that guns and other weapons don't end up in the hands of criminals and others bent on doing us harm," said Daniel Lane, assistant special agent in charge for ICE Homeland Security Investigations in Sacramento. "As this case demonstrates, HSI, together with our law enforcement partners, are aligned in the effort to target those who seek to profit by circumventing these laws with zero regard for the public's safety."

According to court records, the defendants operated shops in Sacramento and Fresno and manufactured and sold AR-15-style pistols and rifles. The defendants did not have a license to manufacture or sell firearms. Further, the defendants sold firearms without filling out required ATF or BOF firearm transaction reports or subjecting the buyer to a background check or waiting period. In addition, as an illegal alien and a felon, the defendants were prohibited from possessing firearms.

According to federal law, a person may manufacture a firearm for personal use without including a serial number on the firearm, provided that the firearm is not sold or transferred to another person. Otherwise, to manufacture a firearm requires a license from ATF. A firearm that is transferred to another person must bear a serial number.

Most firearm parts are not subject to regulation by ATF and can be bought and sold without reporting the sales and without requiring a background check. According to court documents, the defendants and others involved in the scheme sold the parts necessary to assemble a firearm. The parts included a metal casting of an incomplete lower receiver called a "blank," which is not considered a firearm by ATF. The blank is eventually converted into a lower receiver using a drill press or automated machine that creates the precise shape and space necessary for the lower receiver to accept the parts that will allow the firing of a projectile. These parts (e.g., the hammer, bolt or breechblock, and firing mechanism) are the internal mechanical parts that combine with a trigger, firing pin, and other parts to form a functioning firearm. Once the blank is milled into a completed lower receiver, it is considered firearm by statute even if there is no barrel, handle, or trigger, and it is subject to federal regulation.

According to the search warrant affidavit, once a customer purchased the firearm parts including a blank lower receiver, he was directed to Emiliano Cortez-Garcia who operated the drill press. Once Emiliano Cortez-Garcia had completed machining the lower receiver, he or Luis Cortez-Garcia would assemble the completed AR-15. Customers paid cash to receive a complete firearm that bore no serial number. No ATF paperwork or background checks were completed. During the course of the investigation, ATF conducted seven undercover purchases of AR-15 firearms.

The investigation is continuing. Additional search warrants were executed yesterday at three locations in Sacramento, Rancho Cordova and Orangevale. It is anticipated that additional defendants will be charged in connection with the conduct under investigation.

This case is the product on an investigation by ATF, HSI, and the California Department of Justice's BOF, with assistance from the Sacramento Police Department, the Sacramento County Sheriff's Department, and California Highway Patrol. Assistant U.S. Attorney Justin Lee is prosecuting the case.

Search Warrant Package

Indictment

FRESNO, Calif. — A federal grand jury returned a two-count indictment today, charging Juan Carlos Martinez-Vargas, 29, of Modesto, with possession with intent to distribute methamphetamine, United States Attorney Benjamin B. Wagner announced.

The according to court documents, on February 9, 2014, Martinez-Vargas was arrested when he was attempting to deliver one pound of methamphetamine to a customer at a Modesto-area motel. A subsequent search of his car and residence resulted in the seizure of approximately 7.5 pounds of methamphetamine.

This case is the product of an investigation by the Drug Enforcement Administration and the Modesto Police Department Narcotics Team. Assistant United States Attorney Melanie L. Alsworth is prosecuting the case.

If convicted, Martinez-Vargas faces 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 and the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

FRESNO, Calif. — A federal grand jury returned a six-count indictment today against two brothers, Rudy Alberto Gonzalez-Rocha, 28, and Eloy Damian Gonzalez-Rocha, 32, both of Jalisco, Mexico, charging them with three marijuana cultivation crimes, being aliens in possession of firearms, and possessing a firearm with an obliterated serial number, United States Attorney Benjamin B. Wagner announced. Eloy Gonzalez-Rocha was also charged with being a deported alien found in the United States.

According to court documents, on January 8, 2014, Fresno County Sheriff deputies investigated complaints about a strong smell of marijuana and various activities at a property in Dunlap in Fresno County. They found the brothers, who are undocumented, in a rented mobile home on the property. After obtaining a search warrant, narcotics detectives found 260 marijuana plants, more than 200 pounds of processed marijuana, $15,160 in cash, and three firearms, one of which was reported stolen from Arkansas and another having an obliterated serial number. Eloy Gonzalez-Ramirez had been deported from the United States nearly one year before he was found in Dunlap. Under federal law, illegal aliens are prohibited from possessing firearms.

This case was the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and Fresno County Sheriff’s Office, with assistance from the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant United States Attorney Karen A. Escobar is prosecuting the case.

Both defendants have been ordered detained pretrial following a finding by a U.S. Magistrate Judge that the men are a flight risk and danger to the community. They are scheduled for arraignment and plea on the indictment on February 28, 2014.

If convicted of the drug offenses, the defendants face a sentence of five to 40 years in prison and a $5 million fine. They face a maximum term of 10 years in prison and a $250,000 fine for being illegal aliens in possession of firearms, and five years in prison and a $250,000 fine for possessing a firearm with an obliterated serial number. Eloy Gonzalez-Rocha faces a maximum prison term of two years in prison and a $250,000 fine if convicted of being a deported alien found in the U.S. 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 defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. —Otto Godinez-Sales, 22, of San Jose; Francisco Martinez-Cruz, 34, of Orland; and Soledad Garcia-Venegas, 31, of Orland, pleaded guilty today to conspiracy to commit criminal copyright infringement, United States Attorney Benjamin B. Wagner announced.

According to court documents, Godinez-Sales maintained a number of warehouses in the San Jose area where he sold CDs and DVDs containing counterfeit music and movies. The music and movies on the CDs and DVDs were protected under United States copyright laws. In many instances, the copyrighted movies being trafficked by the defendants were still in theatrical release and not yet available for purchase in the home DVD market. Martinez-Cruz and Garcia-Venegas were two of Godinez-Sales’s customers at his San Jose warehouses, and they would transport the CDs and DVDs to sell at the Gonzalez Flea Market in Glenn County and the Marysville Flea Market in Yuba County. Over the course of the conspiracy, Martinez-Cruz and Garcia-Venegas were responsible for trafficking approximately 25,000 CDs or DVDs containing counterfeit copyrighted works.

This case is the product of an investigation by the Federal Bureau of Investigation and the Sacramento Valley Hi-Tech Crimes Task Force, which combines the efforts of 32 local, state, and federal law enforcement agencies in the Eastern District of California. Assistant United States Attorney Matthew G. Morris is prosecuting the case.

All three defendants have been in custody since their arrests in February 2013. The defendants are scheduled to be sentenced by United States District Judge Kimberly J. Mueller on May 14, 2014. They each face 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. — An indictment was unsealed Wednesday after the arrest of three of seven defendants charged in a conspiracy that used the identification of prison inmates to make fraudulent tax refund claims, United States Attorney Benjamin B. Wagner announced.

On February 20, 2014, a federal grand jury returned a 10-count indictment charging the following individuals with conspiring to defraud the United States: Edwin Forrest Ludwig IV, 32; Daniel Allen Coats, 32; Scott Albert Johnson, 34; and Joseph Robert Sharpe, 35; (all were inmates in the California Correctional Center in Susanville at the time of the fraud scheme), together with Judy Ruth Mullin, 24, of Azusa and Elk Grove; Donald Loyde Harned, 68, of Oklahoma City, Okla.; and Edwin Forrest Ludwig III, 57, of Tulsa, Okla.

Mullin, Harned and Ludwig III were arrested Wednesday at their residences in Southern California, Oklahoma City and Tulsa, respectively. The other defendants are incarcerated at institutions in California and Oklahoma.

According to court documents, beginning in March 2011, Ludwig IV, with help from fellow inmates Sharpe, Coats and Johnson, obtained personal identification information of other inmates at the correctional center. Ludwig IV then provided the information to Harned and Mullin, who prepared and filed false income tax returns with the Internal Revenue Service, claiming refunds to which the inmates were not entitled. False tax returns also were filed in some of the defendants’ own names. The defendants caused the false refund checks to be deposited to various bank accounts controlled by them, including some controlled by Ludwig III. According to the indictment, the investigation to the conspiracy began on January 11, 2012, when a correctional officer found some records behind Ludwig IV’s personal locker.

According to the indictment, the refunds were used for personal expenditures, the purchase of prepaid debit cards, and adding money to inmates’ commissary accounts. The indictment further alleges that, as part of the conspiracy, approximately 247 false income tax returns were filed with the IRS, resulting in the erroneous issuance of approximately 138 refunds totaling over $219,000.

This case is the product of an investigation by the Internal Revenue Service, Criminal Investigation, the Federal Bureau of Investigation, and the Investigative Service Unit at the California Correctional Center. Assistant United States Attorney Sherry D. Hartel Haus is prosecuting the case.

If convicted of conspiracy, each defendant faces a maximum statutory penalty of 10 years in prison and a $250,000 fine. Ludwig IV, Harned, Coats, and Johnson face additional counts of false claims, each count of which carries a maximum sentence 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.

SACRAMENTO, Calif. — United States District Judge John A. Mendez sentenced Fausto Diaz-Lozano, 45, of Sacramento, on Tuesday, February 24, 2014, to 17 and a half years in prison for his involvement in a conspiracy to distribute methamphetamine, United States Attorney Benjamin B. Wagner announced.

According to court documents and evidence from trial, Diaz-Lozano was a trusted member with high-level connections to La Familia Michoacàn, a Mexican drug cartel. The evidence at trial indicated he had ties to a “boss” in the organization. With a phone call to him, Diaz-Lozano was able to modify the “authorized” area for a huge distribution and supply hub controlled by the cartel in Gilroy. Before that call, to the “boss” in Mexico, the hub was only authorized to distribute in the South Bay Area. After the call, the hub delivered directly to Diaz-Lozano in Sacramento. According to court documents, Diaz-Lozano also recruited new members and associates for the cartel, flaunting the organization’s ruthlessness in the process.

When the Gilroy supply hub was searched on August 19, 2010, investigators seized over 610 pounds of methamphetamine, 16 pounds of cocaine, two firearms, and ledgers that detailed the distribution of over 3,300 pounds of methamphetamine in a four-to-five month period. Approximately 80 pounds of the methamphetamine was tested by the DEA and found to be approximately 98 percent pure.

Judge Mendez found that Diaz-Lozano directed others in connection with this international drug conspiracy. He also found that, as a member of the conspiracy, Diaz-Lozano was responsible for the drugs and guns found in Gilroy.

Diaz-Lozano is the sixth defendant to be sentenced in this case. Hector Salazar Borrayo, of Gilroy, was sentenced to 14 years and four months in prison. Martin Solorio, of Sacramento, was sentenced to nine years in prison. Roberto Bermudez-Ornelas, of Sacramento, was sentenced to three years and three months in prison. Sergio Murillo-Valencia was sentenced to 16 years in prison. Fabian Figueroa-Ayala, of Gilroy, was sentenced to 12.5 years in prison. Three other defendants are charged in this case. The against them are allegations; they are presumed innocent until and unless proven guilty beyond a reasonable doubt.

This case is the product of an investigation by the Drug Enforcement Administration, the Sacramento County Sheriff’s Department, and the California Department of Justice (Cal-MMET). Assistant United States Attorney Michael M. Beckwith prosecuted the case.

FRESNO, Calif. — Raeb Chou, of Modesto, pleaded guilty today to one count of conspiracy to structure cash transactions and one count of structuring, and co-defendant Chantha A. Chim, of Murietta, pleaded guilty today to one count of structuring, United States Attorney Benjamin B. Wagner announced.

According to court documents, Chou, Chim and co-conspirators obtained prescriptions for oxycodone and hydrocodone from pharmacies in Modesto, and then transported and mailed the pills to Washington and other states for distribution on the black market. In addition, Chou and co-defendant Phally Thach opened bank accounts into which co-conspirators deposited the cash proceeds of the oxycodone and hydrocodone sales in amounts of $10,000 or less.

After receiving the cash deposits from co-conspirators, Chou and Chim withdrew the cash from those accounts in amounts of $10,000 or less to attempt to prevent Currency Transactions Reports from being filed by the banks on her cash deposits. Currency Transactions Reports are reports prepared by financial institutions for any transactions involving more than $10,000 in cash. These reports are filed with the Department of Treasury and are made available to law enforcement. Chou withdrew more than $120,000 cash proceeds of drug distribution from her bank accounts; Chim withdrew more than $70,000 cash proceeds of drug distribution from her bank accounts.

Both defendants are scheduled to be sentenced by Judge Anthony W. Ishii on May 5, 2014. Chou faces a maximum statutory penalty of five years in prison and a $250,000 fine for conspiracy and a maximum statutory penalty of 10 years in prison and a $500,000 fine for aggravated structuring. Chim faces a maximum statutory penalty of five years in prison and a $250,000 fine for structuring. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

This case is being brought as part of Operation Footprint, a nationwide law enforcement initiative led by the U.S. Attorney’s Offices, the Internal Revenue Service – Criminal Investigation, the Drug Enforcement Administration, and the United States Postal Inspection Service. Operation Footprint targets large drug trafficking organizations by identifying the transfer of drug proceeds through financial institutions, bulk cash smuggling and other forms of money transfers. Operation Footprint is focused on bringing criminal charges based on Bank Secrecy Act violations in addition to violations of the Controlled Substances Act and the Money Laundering Control Act. This case is also the product of the Organized Crime Drug Enforcement Task Force (OCDETF), a focused multi-agency, multijurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies.

This case is also the product of the Organized Crime Drug Enforcement Task Force (OCDETF), a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies. Assistant U.S. Attorney Grant B. Rabenn is prosecuting the case.

FRESNO, Calif. — Julio Cesar Villanueva Cornejo, 33, of Michoacàn, Mexico was sentenced today to six years in prison for possessing a firearm and distributing illegal rat poison and insecticides in connection with a large marijuana cultivation operation in the Lilly Canyon area of the Sequoia National Forest, U.S. Attorney Benjamin B. Wagner announced. Villanueva was also ordered to pay $4,294 in restitution to the U.S. Forest Service for the damage to public land and natural resources caused by the cultivation operation. He is subject to deportation after he serves his prison sentence.

“Increasingly, dangerous, unregistered pesticides are being encountered by law enforcement officers who investigate illegal marijuana grows,” said Jay M. Green, Special Agent-in-Charge of EPA’s criminal enforcement program in California. “Through their indiscriminate application, these unregistered pesticides pollute our lands and waters, create a significant safety risk to humans and animals, and present a mounting cleanup expense for taxpayers. Today’s sentence demonstrates the government’s commitment to hold accountable those individuals who traffic unregistered pesticides onto our public lands.”

Villanueva’s sentence follows his guilty plea last December. According to court documents, Villanueva delivered chemicals and supplies to a marijuana cultivation operation in the Lilly Canyon area of the Sequoia National Forest. The cultivation operation caused extensive environmental damage. Native oak trees and other vegetation were killed or cut down to make room for the 9,746 marijuana plants planted there. The soil was tilled, and fertilizers, and illegal pesticides, and rodenticides containing zinc phosphide and carbofuran were spread throughout the site. In addition to the illegal pesticides, two firearms, marijuana seeds, and other items associated with the cultivation operation were found.

The EPA has designated zinc phosphide as a restricted use pesticide that may only be purchased and used by, or under the supervision of, a certified applicator. In 2011, the EPA announced that it would ban zinc phosphide for residential sale due to its acute toxicity. Zinc phosphide is highly toxic to humans and wildlife. A single swallow can be fatal to a small child. Carbofuran is highly toxic to vertebrates and particularly toxic to birds. In granular form, a single grain will kill a bird; for humans, one quarter of a teaspoon is a sufficient dose to be fatal. Effective December 31, 2009, EPA cancelled all food tolerances for carbofuran and determined carbofuran is no longer eligible for re-registration.

This case is the product of an investigation by the U.S. Forest Service, U.S. Drug Enforcement Administration, 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 Department. Assistant United States Attorney Karen Escobar handled the prosecution.

FRESNO, Calif. — United States District Judge Lawrence J. O’Neill sentenced Bakersfield residents Carlyle “Carl” Lee Cole, 66, to 17 years and seven months in prison and Caleb Lee Cole, 37, to six months in prison for charges stemming from their involvement in an extensive mortgage fraud scheme that ran from January 2004 to September 2007, United States Attorney Benjamin B. Wagner announced.

Carl Cole was ordered to pay $28,516,887 in restitution to lenders. He was taken into custody after today’s hearing. Caleb Cole was ordered to pay $663,950 in restitution and was ordered to self-surrender to begin serving his sentence on April 21, 2014. His six months in custody will be followed by 21 months of electronic monitoring.

U.S. Attorney Wagner stated: “Carl Cole is the second defendant to be sentenced for the illegal activities of the Crisp, Cole & Associates real estate firm. During the fraud scheme, Cole enlisted the help of office workers to falsify documents and asked others, even his own son, to lend their names as straw buyers. Today’s sentence is fitting for someone who embodies the recklessness in the mortgage industry in the mid-2000s.”

“While today’s sentences cannot reverse damage that has been done to the real estate industry, mortgage industry, and consumer confidence in the Central Valley, they ensure that the Coles will be punished for their egregious crimes. As a licensed real estate broker, Carl Cole was well aware that this scheme was illegal and callously disregarded the damage he was causing to his own community,” said Special Agent in Charge Monica M. Miller of the Federal Bureau of Investigation’s Sacramento division.

According to court documents, Carl Cole, a licensed real estate broker, and David Crisp owned and operated Crisp & Cole Real Estate (CCRE), a real estate brokerage, 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 conspiracy to defraud mortgage companies and federally insured financial institutions. They used straw purchasers to acquire properties at inflated prices with funds borrowed from lenders, often using 100 percent financing and based on false and fraudulent loan applications. The conspirators frequently resold the properties from one straw buyer to another, each time at an inflated, higher price in order to extract the purported increased “equity” from the property for their benefit. Ultimately, most of the properties were foreclosed upon after the defendants failed to make the mortgage payments when due. Carl Cole admitted in his plea agreement that he and the co-conspirators caused losses of at least $29,884,498 to the defrauded lenders due to the conspiracy.

According to his plea agreement, Caleb Cole acted as a straw buyer for CCRE and knowingly made material misstatements and omitted material information in loan applications he submitted to lenders to obtain funds to purchase several properties.

Sentencing dates for the remaining defendants are as follows: Jennifer Anne Crisp on March 3, 2014; Michael Angelo Munoz on March 17, 2014; Jayson Peter Costa on March 24, 2014; David Marshall Crisp on March 31, 2014; Jeriel Salinas on May 12, 2014; and Sneha Mohammadi on June 9, 2014. Robinson Nguyen has completed his 27-month sentence. A trial for co-defendant Julie Dianne Farmer is set for April 8, 2014. The charges are only allegations; she is presumed innocent until and unless proven guilty beyond a reasonable doubt.

Before Carl Cole and the other defendants were indicted, five separate cases were brought, in 2009 and 2010, against five defendants who pleaded guilty to charges relating to this scheme. Three are scheduled to be sentenced on March 24, 2104: Jerald Allen Teixeira
(1:09-cr-375 – one count of wire fraud for false statements on loan documents), Megan Balod (1:10-cr-016 – four counts of wire fraud for acting as a straw buyer), and Christopher Lance Stovall (1:10-cr-271 – four counts of mail fraud for making false statements on loan documents). Two are scheduled to be sentenced on March 31, 2014: Kevin Patrick Sluga (1:10-cr-001 – four counts of wire fraud for false verification of employment letters), and Leslie Sluga (1:10-cr-002 – two counts of wire fraud for acting as a straw buyer).

The maximum statutory penalty for mail fraud is 30 years in prison and a $1 million fine. The maximum statutory penalty for wire fraud is 20 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 is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Kirk Sherriff, Henry Carbajal III, and Christopher Baker are prosecuting the case.

This case was done 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’s 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.

FRESNO, Calif. — Sergio Reyna, 36, and Juan Carlos Perez-Gonzales, both of Michoacàn, Mexico, and Thounethepmith Vongsenekeo, 58, of Savannakhet, Laos, were sentenced today for their involvement in separate marijuana cultivation operations in Kern, Tulare, and Stanislaus Counties, U.S. Attorney Benjamin B. Wagner announced.

7,302 Marijuana Plants Seized from Sequoia National Forest (1:13-cr-172 AWI)
Reyna was sentenced today to two and a half years in prison following his guilty plea last November to conspiring to manufacture, distribute, and possess with intent to distribute marijuana grown in the Gibboney Canyon area of the Sequoia National Forest in Kern County. The area is also within the federally designated Domeland Wilderness area. According to court documents, U.S. Forest Service agents seized 7,302 marijuana plants from the site and found 5,000 marijuana plant stalks consistent with a prior harvest in 2012. During the execution of a federal search warrant at the site, agents found Reyna sleeping in a tent. In addition to his prison sentence, Reyna was ordered to pay restitution in the amount of $2,675.57 to the U.S. Forest Service caused by the negative environmental impact of the cultivation operation. Trash and fertilizer bags were scattered about the area and the ground was terraced after native vegetation, including oak trees, was cut down to make room for the marijuana plants. Trash was also found in the waterway of Gibboney Creek. Reyna is also subject to deportation to Mexico after he serves his prison term.

The case was investigated by the U.S. Forest Service, DEA, California Department of Fish and Wildlife, and Kern County Sheriff’s Office.

1,313 Marijuana Plants/Firearms Seized from Tulare County Ag Grow (1:12-cr-341 LJO)
Following his guilty plea last year, Juan Carlos Perez-Gonzales was sentenced to 18 months in prison for his involvement in a marijuana cultivation operation on agricultural land in Terra Bella. According to court records, drug agents discovered the cultivation operation after following a supplier to the property. The supplier had previously delivered equipment and material for other marijuana cultivation operations on public lands in Ventura, San Luis Obispo, and Kern Counties. During the execution of a federal search warrant at the Terra Bella property, agents seized 1,313 marijuana plants, two firearms, and arrested six people, including Perez. The marijuana had a wholesale value of $1.5 million.

This case was investigated by the U.S. Forest Service, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Tulare and Ventura Counties’ Sheriff’s Offices.

San Joaquin River Diverted to Grow Marijuana (1:12-cr-342 AWI)
Thounethepmith Vongsenekeo was sentenced today to three years and one month in prison for a marijuana cultivation operation alongside the San Joaquin River near the town of Newman. Water from the river was diverted to irrigate the 907 marijuana plants growing there. Agents also seized a firearm abandoned along the river. Vongsenekeo’s sentence follows his guilty plea last December. The case was investigated by the DEA and the Stanislaus Drug Enforcement Agency, a multi-agency drug task force in Modesto.

Assistant U.S. Attorney Karen A. Escobar is prosecuting the above cases.

SACRAMENTO, Calif. — Rickey Lee Campbell, 60, of Sacramento, pleaded guilty Thursday to conspiracy to traffic in counterfeit goods, United States Attorney Benjamin B. Wagner announced.

This case is the product of an investigation by the Federal Bureau of Investigation and the Sacramento County Sheriff’s Hi-Tech Crimes Task Force. Assistant United States Attorney Michelle Rodriguez is prosecuting the case.

According to court documents, law enforcement received information about “Viagra” and “Cialis” being offered for sale through the Internet on Craigslist. Law enforcement later conducted controlled drug purchases of counterfeit Viagra from Campbell, who used the alias “Diamond Jim.” The residences of Campbell and his co-conspirator, Susan Yvonne Eversoll, 47, were later searched and more than 6,000 counterfeit tablets resembling Viagra and Cialis in shape, size, and color were found. Authorities also recovered computers and electronic devices the conspirators used to sell the counterfeit goods.

Campbell is scheduled to be sentenced by United States District Judge Troy L. Nunley on May 8, 2014. Eversoll, who pleaded guilty to the conspiracy on December 5, 2013, is scheduled to be sentenced by Judge Nunley on March 6, 2014. Each defendant faces up to 10 years in prison for their role in the conspiracy. 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. —Shiraz Malik, 36, a Pakistani national residing in Warsaw, Poland, was sentenced today by United States District Judge Lawrence K. Karlton to 15 years in prison for conspiring to distribute controlled substances and listed chemicals, conspiring to import controlled substances and ephedrine into the United States, and conspiring to launder money, United States Attorney Benjamin B. Wagner announced today.

According to court documents, from June 1, 2008, through September 8, 2011, Malik sold pharmaceuticals and highly regulated chemicals to customers in the United States, Europe, Mexico, and other countries and conspired to launder the profits of that activity. Malik took orders from customers via the Internet and coordinated with people in Pakistan to fill the orders. The drugs were sent from Pakistan to the customers, and Malik emailed the tracking numbers that his co-conspirators in Pakistan gave him to the customers. Malik sold large quantities of ephedrine to customers in Mexico, the country of origin for most of the methamphetamine sold in the United States.

In May 2008, DEA agents learned of two business-to-business Internet websites where businesses were offering to sell and illegally import into the United States pharmaceutical drugs, such as oxycontin, that are controlled substances under U.S. law, and regulated chemicals, such as ephedrine HCL, which is a precursor chemical used to manufacture methamphetamine. Two businesses that were offering controlled substances through the websites were Shama Medical Store in Karachi, Pakistan and Good Luck Trading Company in the United Kingdom. Both businesses referred customers to email addresses associated with Malik.

According to court documents, in the course of the three-year investigation, agents made eight undercover purchases of various drugs from Malik that were shipped from a post office in Lahore, Pakistan to addresses in the Sacramento area. In each instance, the purchase request was sent to Malik via email and payment instructions were sent by Malik to the undercover agent. Malik maintained at least two bank accounts in Poland that he used to receive payments for Internet drug purchases from undercover agents.

According to documents filed in the case, undercover agents met with Malik on three separate occasions in Milan, Italy (June 2009), Vienna, Austria (November 2009), and in Budapest, Hungary (August 2010). During those meetings, with the cooperation of law enforcement officials in the host countries, the agents posed as U.S.-based illegal drug dealers and had discussions with Malik about future purchases and possible collaborative efforts. In the meetings, Malik explained that his operation sold a variety of pharmaceutical and controlled substances including: steroids, OxyContin, ketamine, diazepam, lidocaine, illegal drugs including heroin from Pakistan, Ecstasy from Holland, methamphetamine (believed to be made in the Czech Republic), and ephedrine from India or China.

“Mr. Malik operated an international supermarket for illegal drugs,” said U.S. Attorney Benjamin Wagner. “As the Internet allows everyone access to international markets, federal law enforcement officials will be vigilant in protecting this country from overseas predators who profit off the addiction of others. Here, the defendant supplied addictive drugs, including oxycontin and heroin, to other drug traffickers in the U.S. and around the world, and supplied materials needed to make methamphetamine to clandestine producers in Mexico and Africa. Malik had never set foot in this country before he was arrested and extradited here on these charges. This should serve as a lesson to those drug traffickers who ship illegal drugs into the United States and who think they are untouchable.”

Drug Enforcement Administration Special Agent in Charge Jay Fitzpatrick stated, “Shiraz Malik led an elaborate international drug trafficking network using the anonymity of the Internet to distribute dangerous controlled substances, pharmaceutical narcotics, and substances for illicit drug manufacture to customers around the world. The outstanding assistance and support DEA received from our foreign and domestic counterparts led to the successful prosecution of Malik. This sentencing sends a clear message that law enforcement will work across international borders to seek justice against criminal organizations.”

“Today’s sentence reflects the seriousness of this crime,” said José M. Martínez, Special Agent in Charge, IRS-Criminal Investigation. “The defendant used sophisticated methods to move large quantities of drug money around the world. CI is committed to following the money to financially disrupt and dismantle narcotics trafficking organizations.”

“This sentence is entirely fitting given the serious health risks associated with this defendant’s criminal activities,” said Dan Lane, assistant special agent in charge for Homeland Security Investigations (HSI) Sacramento. “The illegal sale of controlled substances and prescription drugs over the Internet represents a major safety threat for consumers who buy medications online. HSI will continue to work closely with its law enforcement partners here and overseas to identify and dismantle highly dangerous schemes such as this one.”

Malik was arrested at the Prague International Airport on September 8, 2011, and was extradited on June 22, 2012, from the Czech Republic to the United States. He pleaded guilty to the conspiracy counts on October 7, 2013.

This case is the product of an investigation by the U.S. Drug Enforcement Administration, the Internal Revenue Service, Criminal Investigation, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and the El Dorado County Sheriff’s Office. Assistant U.S. Attorney Richard J. Bender and former Assistant U.S. Attorney Daniel S. McConkie prosecuted the case with the assistance of attorneys from the U.S. Department of Justice’s: Office of International Affairs, the Narcotics and Dangerous Drugs Section, and the Organized Crime and Drug Enforcement Task Force Section.

This case was part of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. The OCDETF program was established in 1982 to conduct comprehensive, multilevel attacks on major drug trafficking and money laundering organizations. The principal mission of OCDETF 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. — A federal grand jury returned an 18-count indictment today against David M. Lewis, 60, of Sacramento, charging him with one count of conspiracy to commit health care fraud and mail fraud and 17 counts of health care fraud, United States Attorney Benjamin B. Wagner announced.

According to court documents, Lewis was a dentist who operated a dental practice in Sacramento. Beginning in late 2008 or early 2009, Lewis began targeting United Parcel Service employees for dental treatment because their health care plan under the Northern California General Teamsters Security Fund provided 100 percent coverage without any annual limits. Lewis offered cash and other incentives to UPS patients for receiving dental treatment from Lewis, or for recruiting other UPS employees to receive such treatment.

The indictment alleges that in some instances, Lewis caused claims to be submitted to Delta Health Systems, which administered the UPS health care plan, that falsely billed the plan for work that was never performed. In many other instances, Lewis performed unnecessary dental work on healthy teeth of the UPS employees, including root canals, and claims were submitted to Delta for payment for these unnecessary services.

The indictment also alleges that Lewis created false narratives for work that was not performed or created false statements about purported pre-existing dental conditions of the UPS employee’ teeth to justify the work performed. In some instances, Lewis drilled into healthy teeth, installed a temporary filling, instructed his assistants to take X-rays of the temporary fillings, and then submitted claims to Delta with X-rays of the temporary fillings, falsely claiming that the X-rays depicted tooth decay justifying further restorative procedures.

The total amount of fraudulent billings submitted to Delta as a result of the conspiracy and health care fraud was more than $1 million.

This case is the product of an investigation by the U.S. Department of Labor ‑ Office of Inspector General’s Office of Labor Racketeering and Fraud Investigations and the U.S. Department of Labor ‑ Employee Benefits Security Administration with assistance from the Dental Board of California. Assistant United States Attorney Todd A. Pickles is prosecuting the case.

If convicted, Lewis faces a maximum statutory penalty of 20 years in prison and a fine of $250,000 or twice the gross gain from the fraud. 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. — Kwan Yong Choi, 73, pleaded guilty on Monday, February 10, 2014 to six counts of money laundering of illegal proceeds generated by his investment fraud scheme, United States Attorney Benjamin B. Wagner announced.

According to court documents, in 2002, Choi, formerly of Daejeon City, South Korea, began marketing an investment scheme whereby investors could invest money into his company, Sun Min Trading Inc. Choi told investors that the company bought souvenirs and sold them to the White House. He claimed that the venture would make 30 percent profit with 10 percent going to a purported charity named “International Christian Mission Center,” and 20 percent going to investors every quarter. He specifically targeted persons of Korean descent and marketed investment opportunities to potential clients in California and elsewhere by making various false representations, including that the “International Christian Mission Center” was an extension of the CIA, that he was an ordained minister, that he had a history of investment successes, and that the investments were secure.

“This week’s guilty plea is particularly gratifying for the HSI special agents in Seoul and Fresno who worked tirelessly for seven years to see this defendant returned to the U.S. to answer for his crimes,” said Clark Settles, special agent in charge for HSI San Francisco, which oversees the agency’s investigative activities in Fresno. “This development should also provide some solace to Mr. Choi’s victims, knowing that the man who defrauded them, in some cases of their life savings, is being held accountable for his actions.”

As alleged in the indictment, instead of investing the money as promised, Choi spent the funds on his own personal and business expenses, including payments for homes, cars, and credit card bills. He lulled investors into thinking that their investments were making a return by sending false account statements, sending payments, or giving excuses as to why payments were delayed. As admitted by Choi at the time of his plea, investors lost approximately $2 million as a result of the scheme.

This case is the product of extensive investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant United States Attorney Mark Cullers and Assistant United States Attorney Heather Mardel Jones are prosecuting the case.

Choi is scheduled to be sentenced on April 21, 2014 by United States District Judge Anthony W. Ishii. Choi faces a maximum penalty of 20 years in prison, a $500,000 fine or twice the value of the property involved in the transaction, whichever is greater, restitution to the victims, and forfeiture of assets. 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.

SACRAMENTO, Calif. — United States Attorney Benjamin B. Wagner announced the following prosecutions for violations of federal child exploitation laws.

A grand jury in Fresno returned a one-count indictment today against Tyler Certuche, 20, of Bakersfield, charging him with receiving and sharing child pornography in August and September 2013. According to a previously filed criminal complaint, an FBI agent in Oklahoma City obtained several child pornography video files through a file-sharing program from a computer subsequently traced to Certuche. When a search warrant was executed at Certuche’s residence in Bakersfield on February 12, 2014, Certuche admitted that he had used the file sharing program to obtain and view child pornography videos in 2013. Certuche is out of custody and scheduled for arraignment on February 26, 2014.

This case is the product of an investigation by the FBI. Assistant U.S. Attorney David L. Gappa is prosecuting the case. (1:14-cr-032-AWI-BAM)

Yuba City Defendant Sentenced to More Than 8 Years in Prison

Derrick Jason Pair, 29, of Yuba City, was sentenced on February 11, 2014, by United States District Judge John A. Mendez to eight years and one month in prison, to be followed by a lifetime period of supervised release. According to court documents, Pair came to the attention of law enforcement during the investigation of another defendant. A search warrant executed at Pair’s residence located approximately 2,000 images of child pornography and 50 videos on his computer. Some of the images and videos showed prepubescent children and toddlers and sadistic and masochistic conduct. (2:12-cr-422 JAM)

Oroville Defendant Sentenced to 10 Years in Prison

Michael Adam Cruz, 23, of Oroville, was sentenced on February 12, 2014, by United States District Judge Kimberly J. Mueller to 10 years in prison, to be followed by a 10-year term of supervised release. According to court documents, in May 2012, Cruz posted an advertisement on Craigslist seeking a young-looking female. He arranged to meet a minor for the purpose of having sex with her and was arrested upon his arrival at the designated meeting point. (2:11-cr-239 KJM)

Chico, Rocklin and Roseville Defendants Indicted on February 12, 2014

A federal grand jury returned a one-count indictment charging John Franklin Bye, 45, of Chico, with receiving images of child pornography between 2011 and 2012. Bye was arraigned on February 14, 2014 and pleaded not guilty. He is in custody, and his next court date is April 1, 2014. (2:14-cr-034 JAM)

A federal grand jury returned a one-count indictment charging Paul Ross Pacini, 45, of Rocklin, with receiving images of child pornography between December 28, 2009, and October 13, 2013. At his arraignment on February 12, 2014, Pacini pleaded not guilty.  He is in custody, and his next court date is March 11, 2014. (2:14-cr-033 LKK)

Robert Jones, 49, of Roseville, was indicted for receiving images of child pornography between October 23, 2011, and October 27, 2011. Jones pleaded not guilty at his arraignment on February 18, 2014. He was released on $50,000 bond. (2:14-cr-037 KJM)

The maximum statutory penalty for each violation of distributing or receiving child pornography is 20 years in prison and a $250,000 fine. A conviction for the violation would also carry a mandatory minimum term of five years in prison. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

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

These cases, other than the Bakersfield case, were investigated by 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 Kyle Reardon is prosecuting the cases other than the Bakersfield case

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

FRESNO, Calif. — Maria Vega, 53, a mortgage broker and real estate agent in Ceres, pleaded guilty today to filing a false tax return, United States Attorney Benjamin B. Wagner announced.

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. For example, Vega admitted that she underreported taxable income on her income tax return for the 2006 tax year of approximately $415,235.

According to IRS-Criminal Investigation Special Agent in Charge José M. Martinez, "All Americans have a duty to pay their fair share. The prosecution of individuals who intentionally conceal income and evade taxes is a vital element in maintaining public confidence in our tax system. We should not expect the honest taxpayer to foot the bill for those who hide income from the IRS."

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

Vega is scheduled to be sentenced by U.S. District Judge Lawrence J. O'Neill on June 9, 2014. The maximum statutory penalty for filing a false tax return is three years in prison. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

SACRAMENTO, Calif. — California Lawyer magazine has named four attorneys in the United States Attorney’s Office for the Eastern District of California to receive its California Lawyer Attorneys of the Year Awards, United States Attorney Benjamin B. Wagner announced. The attorneys being honored are: Assistant U.S. Attorney Colleen Kennedy; Kelli L. Taylor, who is Chief of the office’s Affirmative Civil Enforcement Unit; and David T. Shelledy, who is Chief of the office’s Civil Division; as well as the U.S. Attorney himself. The awards are presented each year to members of the California bar whose work has had significant impacts in the previous year.

California Lawyer identified as the basis for the awards the work of the U.S. Attorney’s office in investigating JPMorgan Chase over toxic mortgage debt, and in spearheading talks that led to a $13 billion fraud settlement last November with the bank. It was the largest settlement by the U.S. Department of Justice with a single entity in American history, and resolved federal and state civil claims arising out of the packaging, marketing, sale and issuance of residential mortgage-backed securities by JPMorgan, Bear Stearns and Washington Mutual prior to January 1, 2009. It required JPMorgan to pay $2 billion to the U.S. Department of Justice in connection with the allegations asserted by the U.S. Attorney’s Office, plus $7 billion total to five states and three federal agencies, and an additional $4 billion worth of relief to homeowners and to neighborhoods impacted by the financial crisis that began in 2008.

The U.S. Attorney’s Office investigation was conducted with assistance from special agents with the Federal Housing Finance Administration’s Office of Inspector General, and in conjunction with the Residential Mortgage-Backed Securities Working Group, a component of the Financial Fraud Enforcement Task Force. The Task Force was established by President Obama in 2009 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. — Albert Hood, 49, of Fresno, was sentenced today by United States District Judge Anthony W. Ishii to eight years in prison for being a felon in possession of a firearm, United States Attorney Benjamin B. Wagner announced.

Hood was found guilty by a jury on October 17, 2013. At trial, the government introduced evidence that on December 4, 2011, a Fresno police officer stopped Hood after seeing him commit a traffic violation. Hood ran from the officer, and the officer saw and heard the defendant drop an object that turned out to be a loaded Ruger, Model Vaquero, .44-caliber revolver. According to court documents, Hood has felony convictions for vehicle theft, felony domestic violence, and assault with a deadly weapon not a firearm and felon in possession of a firearm.

“Every time we seize a single firearm from a convicted felon, we prevent impending violent acts from occurring in our neighborhoods,” stated Bureau of Alcohol, Tobacco, Firearms and Explosives, Special Agent in Charge Joseph M. Riehl. “ATF and our partners will not surrender to those criminals who are a threat to our communities and  possess a firearm unlawfully.”

Fresno Police Chief Jerry Dyer stated: “This is yet another example of the strong partnership between the Fresno Police Department and the US Attorney's office toward prosecuting armed felons and removing firearms from the streets of Fresno.”

This case was the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Fresno Police Department under the Project Safe Neighborhoods initiative bringing together local and federal law enforcement agencies to combat gun violence. Assistant United States Attorney Kimberly A. Sanchez prosecuted the case.

FRESNO, Calif. —Miguel Sanchez-Mendoza (Sanchez), 46, of Mexico, pleaded guilty today to conspiring to distribute and to possess with the intent to distribute methamphetamine, heroin, and cocaine, United States Attorney Benjamin B. Wagner announced.

According to court documents, Sanchez and co-defendant Gamaliel Salas-Mendoza, aka Rene Salas Mendoza (Salas), 38, also of Mexico, maintained a stash house in Bakersfield from where law enforcement officers seized seven pounds of methamphetamine, one and a half pounds of cocaine, a half-pound of heroin, all packaged for sale. In addition to the drugs, officers found digital scales, cutting agents, a kilogram press, and $9,483 in cash.

This case is the product of an investigation by the U.S. Drug Enforcement Administration, Kern County Sheriff’s Office Narcotics Enforcement Team, Kern County Sheriff’s Office Major Violators Unit, and the California Multijurisdictional Methamphetamine Enforcement Team. Assistant United States Attorney Karen A. Escobar is prosecuting the case.

Salas has requested a jury trial, which is currently set for July 8. The charges against Salas are only allegations; he is presumed innocent until and unless proven guilty beyond a reasonable doubt.

Sanchez is scheduled to be sentenced by Senior U.S. District Judge Anthony W. Ishii on April 28, 2014. Sanchez faces 10 years to life in prison and a $10 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. In addition, both men are subject to deportation following the completion of any prison term imposed.

SACRAMENTO, Calif. — United States District Judge Garland E. Burrell Jr. sentenced Kenneth Kenitzer, 70, of Pleasanton, today to six years in prison, to be followed by three years supervised release, for wire fraud in connection with a Ponzi scheme that took in more than $80 million between April 2006 and December 2008, United States Attorney Benjamin B. Wagner announced.

According to court records, beginning in 2006, Anthony Vassallo and Kenneth Kenitzer ran Equity Investments Management & Trading (EIMT). Vassallo claimed that he had developed computer software that enabled him to make profits of approximately 3 percent per month, or 36 percent per year. Investors were told that this strategy had worked successfully for years with one loss situation that had been corrected so that it would not happen again. In fact, Vassallo’s strategy had been historically unsuccessful, losing money overall. Investors generally funneled money into EIMT through a number of sub-funds. Kenitzer was an officer of EIMT and the primary administrator of several of the sub-funds that invested with EIMT. He also was the primary point of contact for investors and sub-fund managers to actually transfer money to and from EIMT. Although Kenitzer was aware that EIMT never functioned as promised, and ultimately became aware that Vassallo was lying about the returns on investments, Kenitzer maintained to investors and sub-fund managers that EIMT was a profitable investment platform.

The scheme began to unravel in late 2008, and investors began demanding their money back. Vassallo and his intermediaries engaged in stalling tactics, claiming that Vassallo was “restructuring” the funds, TradeStation was conducting an audit, or the SEC had frozen the TradeStation account due to a baseless complaint. Vassallo continued to recruit new investments. One investor transferred $250,000 to Vassallo’s account less than two weeks before Vassallo admitted to a group of investors that he had ceased trading and their money had been lost.

More than 300 individuals invested in the EIMT scheme, contributing at least $83 million. Of that amount, more than $55 million was returned to investors, although nearly $17 million of that constituted amounts paid to some investors above the amount of their original investments. Thus, actual loss to the investors totaled more than $40 million.

U.S. Attorney Wagner said: “While Kenitzer wasn’t the primary salesman of EIMT, his administration of the money and of some sub-funds was a crucial part of keeping the scheme running as long as it did, and contributed to the breathtaking quantity of victims and funds lost. His sentence today is an important measure of justice for the victims of the EIMT scam, many of whom lost their homes, health, and retirements to this fraud.”

“Greed and Ponzi schemes go hand in hand. Although Kenitzer and others have been sentenced, time in federal prison cannot restore the millions lost by victims. FBI special agents are highly skilled at investigating elaborate, complicated cases such as these but I am hopeful that investors will cast a wary eye when presented with investment opportunities that seem too good to be true,” said Special Agent in Charge Monica M. Miller of the Sacramento field office of the Federal Bureau of Investigation.

“Today’s sentencing marks the end of a saga that has stretched over many years,” said IRS-Criminal Investigation Special Agent in Charge José M. Martinez.  “This was a classic Ponzi scheme, the defendants preyed on investors with the promise of high returns with little risk. IRS-CI is committed to identifying and investigating those who line their pockets with profits from these schemes.”

This case was the product of an investigation by the Internal Revenue Service – Criminal Investigation and the Federal Bureau of Investigation. Assistant United States Attorneys Jean M. Hobler and Lee S. Bickley prosecuted the case.

This case is part of the President’s Financial Fraud Enforcement Task Force that 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’s 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. — Andres Reyes Valenzuela, 31, a Mexican national, was sentenced today by United States District Judge Garland E. Burrell, Jr. to three years and one month in prison for cultivating marijuana, United States Attorney Benjamin B. Wagner announced.

According to court documents, in June 2012, federal and state agents raided a marijuana grow site in the Trinity National Forest in Trinity County. Agents first spotted Valenzuela processing marijuana plants. Initially, Valenzuela ran away from law enforcement, but he and a co-defendant were caught and arrested after a short chase. Agents eradicated a total of 7,343 marijuana plants from the cultivation site.

This case was the product of an investigation by the United States Forest Service, Siskiyou County Sheriff’s Office, Trinity County Sheriff’s Office, and the Bureau of Land Management. Assistant United States Attorney Christiaan Highsmith prosecuted the case.

FRESNO, Calif. — United States Attorney Benjamin B. Wagner announced today last year’s results in a continuing effort by local, state and federal law enforcement agencies to prosecute gun violence in the Fresno area. The federal firearms prosecutions are a product of Project Safe Neighborhoods (PSN), a United States Department of Justice initiative that is an effort to join law enforcement agencies together in fighting gun violence. Under the Smart on Crime Initiative announced by U.S. Attorney General Eric Holder in August of last year, combatting gun crime is a high priority of the U.S. Department of Justice.

In 2013, at least 100 defendants were charged with federal firearms offenses by the U.S. Attorney’s Office for the Eastern District of California. The area in and around the City of Fresno, however, has been a particular focus of firearms prosecutions, and the U.S. Attorney’s Office is working closely with the Fresno Police Department, the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, the FBI, and other law enforcement partners to target armed and dangerous criminals in that region.

In 2013, thirty-four defendants in the City of Fresno and the surrounding Fresno County area were charged with federal firearms offenses. Two more persons from Tulare County and four more from Madera County were charged with federal firearms offenses, for a total of 40 defendants in the three-county area.

Ten of the defendants charged in 2013 have already pleaded guilty and been sentenced to prison, and five more have pleaded guilty and are awaiting sentencing. In addition, at least 30 more defendants from the City of Fresno and the surrounding Fresno County area who were charged in prior years with federal firearms offenses were sentenced since the beginning of 2013. Another two defendants from Madera County charged in prior years with federal firearms offenses were sentenced in 2013. During 2013, therefore, a total of 42 persons from Fresno, Tulare and Madera Counties were sent to federal prison on firearms convictions.

The federal firearms offenses charged in these cases are felonies; convictions often result in substantial, multiyear prison sentences. All 42 defendants from this area who were sentenced on federal firearms charges since the beginning of 2013 received prison sentences; more than half are now serving sentences of more than five years in prison. Parole has been abolished in the federal system, and defendants must serve at least 85 percent of the prison time imposed. Many convicted defendants serve their sentences at federal prisons far from the Fresno area. The firearms offenses include use of a firearm in the course of a drug trafficking offense or crime of violence; possession of a firearm by a felon; possession of an unregistered firearm such as a fully automatic assault rifle, a sawed‑off shotgun or an explosive device; or possession of a firearm by an illegal alien. Some defendants were also convicted of narcotics offenses or other federal crimes.

“In our effort to combat gun crime, we have worked closely with our law enforcement partners to target dangerous armed criminals,” said U.S. Attorney Wagner. “Thanks to an outstanding working relationship between federal and local law enforcement agencies in the Fresno area, this effort is taking large numbers of these criminals off the streets for long periods of time.”

“Through the PSN Project, ATF, along with our partners, can address those criminals who commit violent crime and who unlawfully possess the fire power that is keeping our communities under siege,” said Bureau of Alcohol, Tobacco, Firearms, and Explosives Special Agent in Charge Joseph M. Riehl.

“Targeting gangs and seizing firearms from violent criminals will continue to be the number one priority of the Fresno Police Department. Our partnership with the U.S. Attorney’s Office through Project Safe Neighborhoods has sent a strong message to gang members in our community that gun violence will not be tolerated."

A few examples of federal firearms convictions in 2013 resulting from this collaborative effort include the following:

• On November 12, 2013, Fernando Casas, 35, a Bond Street Bulldog gang member, was sentenced to seven years and eight months in prison after being convicted of being a felon in possession of a firearm. Bond had nine felony convictions between 1998 and 2011, including firearms, controlled substance and property offenses.
• On November 12, 2013, Robert Cervantes, 35, a Fresno/Clovis gang member, was sentenced to 15 years in prison after selling methamphetamine to a confidential informant in April 2011 and then being arrested in May 2011 in possessing a revolver and an ounce of methamphetamine that he intended to sell. Cervantes had five felony drug trafficking convictions between 1997 and 2008.
• On November 18, 2013, Luis Montoy, 35, was sentenced to six years and five months in prison after being convicted of being a felon in possession of ammunition. Montoy was arrested for being a parolee at large by members of the U.S. Marshals Service Fugitive Task Force. He was in possession of a black powder gun and ammunition. He had three felony convictions between 2001 and 2009 for firearms, domestic violence, and controlled substance offenses.
• On May 6, 2013, Nicholas Andronicous, 31, of Fresno, was sentenced to seven years and eight months in prison after being arrested for being a felon in possession of ammunition and possessing an unregistered short-barreled rifle. According to court documents, Andronicous was encountered in May 2012 in response to a domestic violence call, and was in possession of methamphetamine, multiple firearms and ammunition. He was then encountered in June of 2012 in a traffic stop and found in possession of another firearm and ammunition. Andronicous had three felony convictions between 2004 and 2006 for controlled substance and other offenses.
• On August 12, 2013, Eric Moore, 36, of Fresno, was sentenced to 10 years in prison for being a felon in possession of multiple firearms. As indicated in court documents, Moore and other defendants were involved in burglarizing firearms dealers in Torrance and Corona, Calif. and bringing 54 stolen rifles and handguns to Fresno to sell to gang members and others.
• On September 3, 2013, Ralph Haros, 49, of Fresno, was sentenced to six and a half years in prison for being a felon in possession of a firearm. Haros was arrested by members of the U.S. Marshals Service Fugitive Task Force on a parole warrant. He had five felony convictions between 1986 and 2003 for burglary, domestic violence, controlled substance, and firearms offenses.
• On September 23, 2013, Edward Mitchell, 33, of Fresno, was sentenced to eight years in prison for being a felon in possession of a firearm and possession with intent to distribute cocaine. According to court documents, Mitchell possessed two pistols, one of which he used to shoot and kill a cocaine customer who had shot Mitchell and several others at Mitchell’s apartment. Two others at the apartment were shot, one succumbed to his injuries and died.

These cases are the product of investigations by multiple agencies, including the Fresno Police Department; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the FBI; DEA; U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); and several other sheriff’s offices and police departments in Fresno, Tulare and Madera counties. The MAGEC task force and the Fresno County District Attorney’s office also played a critical role in multiple cases. The cases are being prosecuted by Assistant United States Attorneys Kim Sanchez, Laurel Montoya, Kathleen Servatius, Karen Escobar, Michael Frye, Melanie Alsworth, Grant Rabenn, and Kevin Rooney.

The charges against those defendants who have not been convicted are only allegations; each 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 Ronald Danny Ditlevson, 33, of Exeter, charging him with distributing oxycodone, also called oxycontin, United States Attorney Benjamin B. Wagner announced.

According to court documents, Ditlevson sold an undercover agent of the Drug Enforcement Administration a total of 355 oxycontin pills on three separate days between October and December 2013. The investigation resulted in the arrest of Ditlevson on January 30, 2014, after the undercover agent attempted to meet him for the fourth time to purchase 150 additional oxycontin pills.

This case is the product of an investigation by the Drug Enforcement Administration and the Tulare County Sheriff’s Office. Assistant United States Attorney Kathleen A. Servatius is prosecuting the case.

If convicted, Ditlevson faces 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. — A federal grand jury returned a 32-count indictment today against Francisco Felix, 40, of Mountain House; Alejandro Martinez, 25, of Patterson; Miguel Felix, 34, of Ceres; Martin Lopez, 48, of Rosemead; Gerardo Barraza, 19, of Stockton; Rafael Alcauter, 49, of Newman; Ramon Diaz, 33, of Ceres; Raul Rangel, 41, of San Jose; Sergio Modesto, 34, of Turlock; Martin Rubio, 49, of Stockton; and Patterson residents Leonaires Alcauter, 48, Alfonso Magana, 52, Antonio Ramirez, 35, and Augustin Ramirez, 62, charging them with a variety of federal drug offenses, United States Attorney Benjamin B. Wagner announced.

Combinations of these defendants were charged variously with conspiracy to distribute and to possess with intent to distribute methamphetamine; conspiracy to manufacture, distribute, and to possess with intent to distribute marijuana; conspiracy to distribute and to possess with intent to distribute cocaine; distribution of methamphetamine; manufacture of marijuana; and possession with intent to distribute marijuana.

This case arose from a year-long narcotics investigation that revealed a drug trafficking organization with connections to the Sinaloa Drug Cartel in Mexico was based in the Central Valley of California, and importing large amounts of methamphetamine and cocaine into the United States. The drug trafficking organization subsequently distributed those narcotics throughout California and the United States. In addition, the investigation revealed that the organization was cultivating marijuana at numerous properties in both Stanislaus and San Joaquin counties, which it similarly distributed throughout California and the United States.

“Through our joint enforcement efforts, we’ve dismantled a criminal organization that posed a serious public safety threat, as evidenced by the weapons and drugs seized during the course of this case,” said Dan Lane, assistant special agent in charge for Homeland Security Investigations (HSI) Sacramento. “The arrests and resulting indictments in this investigation have disrupted a potentially deadly supply chain and prevented an untold volume of dangerous drugs from reaching our streets.”

Over the last nine months, investigators acquired over 70 pounds of methamphetamine, approximately three pounds of high-grade marijuana, and six firearms, including three assault-style rifles and a .50-caliber handgun, from members of the organization. Moreover, an additional 10 pounds of methamphetamine were seized by law enforcement from a member’s Los Angeles area residence on December 9, 2013.

This case was the product of an investigation by the California Department of Justice’s Mountain and Valley Marijuana Investigation Team under the auspices of the Central Valley High Intensity Drug Trafficking Area (HIDTA) Program, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Placer County District Attorney’s Office, the Sheriff’s Departments from Placer, El Dorado and Sacramento counties; the California Department of Fish and Wildlife; and the California National Guard Joint Task Force Domestic Support-Counterdrug.

If convicted of the charged offenses, the defendants face a minimum of five years up to life in prison, as well as a fine of up to $10 million. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.

SACRAMENTO, Calif. — A federal grand jury returned a two-count indictment today against Randy L. Thompson, 65, of Anderson, charging him with fraud involving aircraft parts, United States Attorney Benjamin B. Wagner announced.

According to court documents and documents obtained by the U.S. Department of Transportation, in 2010, Thompson, an aircraft mechanic who operated under the business name “Thompson’s Air,” was hired to overhaul an aircraft engine for a customer in Pennsylvania. As part of the overhaul, Thompson installed an engine crankshaft on the customer’s private airplane. Prior to the installation, Thompson had twice sent the same crankshaft to FAA‑certified repair stations, and in both instances the repair stations had returned the part to Thompson with a tag documenting that the crankshaft was cracked and no longer suitable for use on an aircraft. Nevertheless, Thompson installed the crankshaft and falsely certified that he had performed the engine overhaul in compliance with the FAA regulations and the engine manufacturer’s specifications. After approximately 90 hours of operation, the crankshaft failed in flight, and the aircraft was forced to make an emergency landing in a field. No one was injured.

This case was the product of an investigation by the Department of Transportation and the Federal Bureau of Investigation. Assistant United States Attorney Matthew G. Morris is prosecuting the case.

If convicted, Thompson faces a maximum statutory penalty of 15 years in prison and a $500,000 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. — Sdey Chim, 37, of Modesto, pleaded guilty today to one count of conspiracy to structure cash transactions, United States Attorney Benjamin B. Wagner announced.

According to court documents, Chim and co-conspirators obtained prescriptions for oxycodone and hydrocodone from a doctor in Visalia. After obtaining the prescriptions, co-conspirators filed the prescriptions at pharmacies in Fresno and Modesto, California, and then arranged for the pills to be shipped to Washington for sale on the black market. Chim communicated with co-defendant David Ruem to have the cash proceeds of the pill sales deposited into certain bank accounts held by co-conspirators.

The cash deposits and subsequent cash withdrawals were made in amounts of $10,000 or less to attempt to prevent Currency Transaction Reports from being filed by the banks on those cash transactions. Currency Transactions Reports are reports prepared by financial institutions for any transactions involving more than $10,000 in cash. These reports are filed with the Department of Treasury and are made available to law enforcement. In total, more than $1.5 million in cash was deposited into co-conspirators’ bank accounts in a structured manner.

This case is being brought as part of Operation Footprint, a nationwide law enforcement initiative led by the U.S. Attorney’s Offices, the Internal Revenue Service- Criminal Investigation, the Drug Enforcement Administration, and the United States Postal Inspection Service. Operation Footprint targets large drug trafficking organizations by identifying the transfer of drug proceeds through financial institutions, bulk cash smuggling and other forms of money transfers. Operation Footprint is focused on bringing criminal charges based on Bank Secrecy Act violations in addition to violations of the Controlled Substances Act and the Money Laundering Control Act.

This case is also the product of the Organized Crime Drug Enforcement Task Force (OCDETF), a focused multi-agency, multijurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies. Assistant U.S. Attorney Grant B. Rabenn is prosecuting the case.

Chim is scheduled to be sentenced by Judge Anthony W. Ishii on April 21, 2014. He faces a maximum statutory penalty of five years in prison and a $250,000 fine for conspiracy to structure. 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. — Steven Hamman, 52, of Modesto, pleaded guilty today to three counts of conspiracy and wire fraud in connection with a fraudulent check-cashing scheme, United States Attorney Benjamin B. Wagner announced.

According to his plea agreement, between January 2009 and January 2011, Hamman conspired with others to cash stolen or fraudulently procured checks at electronic check-cashing kiosks (known as “Vcom,” or “virtual commerce” machines). Hamman used fraudulently created Vcom accounts to attempt to cash the checks, sometimes using checks that other co-conspirators previously had attempted and failed to cash. On several occasions, Hamman attempted to cash the same check more than once. During the course of the conspiracy, Hamman’s check-cashing scheme caused or threatened to cause a loss of more than $47,000 to more than 50 victims, including financial institutions and others.

This case was the product of an investigation by the U.S. Postal Inspection Service. Assistant United States Attorney Christopher Baker is prosecuting the case.

Hamman is scheduled to be sentenced by Senior U.S. District Judge Anthony W. Ishii on April 28, 2014. Hamman faces a maximum statutory penalty of 30 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 sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables.

FRESNO, Calif. — Ernesto Salgado-Guzman, 47, of Madera, pleaded guilty to a violation of the Arms Export and Control Act by shipping firearms to Mexico, United States Attorney Benjamin B. Wagner announced.

According to court documents, Salgado-Guzman was part of a scheme to purchase in Madera more than 400 guns (mostly Ruger Model 10/22 and .22-caliber rifles) and sell them to various individuals in Oaxaca, Mexico. During the investigation, 85 of the firearms were seized (54 in Mexico and 31 in Madera).

According to court documents, between 2006 and 2009, Salgado-Guzman solicited and directed the assistance of co-conspirators to purchase firearms from a sport shop in Madera. Other co-conspirators and Salgado-Guzman transported the weapons to Mexico to be sold to individuals in Oaxaca, Mexico. Salgado-Guzman knew that a license or permit was required in order to export the firearms to Mexico, but he did not have any license or permit from the Unites States government to do so.

U.S. Attorney Wagner said: “This case involved cooperation between law enforcement officials in this district and in Mexico to prosecute participants in this gun trafficking scheme on both sides of the border. Stopping the illegal flow of guns from the Unites States to Mexico is an important objective in both countries.”

“Ernesto Salgado-Guzman will no longer be able to traffic firearms to Mexico to perpetuate the violence being committed,” stated Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Joseph M. Riehl. “This is another victory for law enforcement in the war on crime domestically and internationally.”

“Thwarting the illegal flow of guns into Mexico is crucial to reducing the violence and bloodshed in that country,” said Clark Settles, special agent in charge for HSI San Francisco, which oversees HSI’s enforcement activities in Fresno. “HSI will continue to work closely with its federal and local partners to ensure the Central Valley does not serve as a source of firearms being illicitly trafficked to Mexico or any other nation.”

This case is the product of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), and various Mexican law enforcement agencies with the assistance of Fresno Police Department. Assistant United States Attorney Kimberly A. Sanchez is prosecuting the case.

Salgado-Guzman is scheduled to be sentenced by United States District Judge Lawrence J. O’Neill on May 5, 2014. He faces a maximum statutory penalty 40 years in prison and a $2.5 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

Co-defendants Demetrio Sebastian Cortez-Ordaz, 47, of Madera pleaded guilty and is set for sentencing on February 24, 2014. Demetrio Cortez-Salgado, 36, of Madera, pleaded guilty and was sentenced to two years in prison.

Florencio Solanes-Morales, of Madera, pleaded guilty and was sentenced to 18 months in prison. Demetrio Sebastian Cortez-Ordaz is scheduled to appear before Judge O’Neill on February 24, 2014 for sentencing. Zeferina Salgado Guzman de Cortez, 44, of Madera, has a trial set for April 22, 2014. Gregorio Salgado-Lopez and Maria Lopez de Salgado, 50, both residents of Madera, were prosecuted in Mexico on related charges.

FRESNO, Calif. — Richard Melella, 44, of Clovis, was sentenced today by U.S. District Judge Lawrence J. O’Neill to 10 months in prison for conspiring to buy, receive, alter and pass counterfeit U.S. currency, United States Attorney Benjamin B. Wagner announced. Melella’s co-conspirator, Fresno resident Christina Williams, 25, is scheduled to be sentenced on April 7, 2014.

According to court documents, between August and October 2012, Melella and Williams purchased from a third-party approximately 54 counterfeit $100 Federal Reserve Notes. Williams received instructions from the seller on how to finish the bills and later used a counterfeiting device to make the bills appear more authentic. Williams and Melella shared this counterfeit currency, some of which Melella passed at a grocery store in Fresno County.

This case is the product of an investigation by the U.S. Secret Service. Assistant United States Attorney Christopher Baker is prosecuting the case.

FRESNO, Calif. — Jose Guadalupe Rodriguez, 19, of Terra Bella, and Erik Forest Basye, 34, of Sanger, were sentenced today for their involvement in separate agricultural marijuana cultivation cases, U.S. Attorney Benjamin B. Wagner announced.

1,313 Marijuana Plants, Two Firearms Seized from Tulare County Ag Grow
(1:12-cr-341 LJO)

Following his guilty plea last year, Jose Guadalupe Rodriguez was sentenced to one year and one day in prison, to be followed by two years supervised release, for his involvement in a marijuana cultivation operation on agricultural land in Terra Bella. According to court records, drug agents discovered the cultivation operation after following a supplier to the property. The supplier had previously delivered equipment and material for other marijuana cultivation operations on public lands in Ventura, San Luis Obispo, and Kern Counties. During the execution of a federal search warrant at the Terra Bella property, agents seized 1,313 marijuana plants, two firearms, and arrested six people, including Rodriguez. The marijuana had a wholesale value of $1.5 million.

This case was investigated by the U.S. Forest Service, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and the Sheriff’s Offices of Tulare and Ventura Counties.

327 Marijuana Plants/Firearm Seized from Fresno County Ag Grow (1:12CR365 AWI)

Following his guilty plea last year, Erik Forest Basye was sentenced to 21 months in prison, to be followed by three years supervised release, for his involvement in a marijuana cultivation operation on agricultural land in Sanger. According to court records, Fresno County Sheriff narcotic detectives discovered the marijuana operation after they responded to a call regarding men unloading marijuana from a pickup truck on East Ashlan Avenue in Sanger. In responding to the call, the detectives found four men unloading 150 pounds of marijuana from the flatbed of a pickup truck and hanging it in a barn. The detectives also noticed bullet holes in the truck. The four men told the detectives that they had been shot at with a rifle when they were stealing marijuana from a grow site in the area of Zediker and Shaw Avenues in Sanger. The detectives then confirmed that there was a large marijuana grow at Zediker and Shaw Avenues.

U.S. Drug Enforcement Administration agents then obtained a federal search warrant for the grow site and found 327 marijuana plants, 700 marijuana stalks, and a .22-caliber rifle. Basye was found near the grow. Basye acknowledged that he had been living in a tent on the property for about three and a half years and that he worked at the property hanging marijuana for processing and was paid with marijuana and food.

This case was investigated by the DEA and Fresno County Sheriff’s Office. Both of these cases were investigated under the umbrella of Operation Mercury, a multi-county marijuana enforcement effort in 2012 focused on the large-scale cultivation of marijuana on agricultural lands. To date, as a result of Operation Mercury, 84 individuals have been charged federally with 45 defendants sentenced. Further, as a result of Operation Mercury, law enforcement officers eradicated nearly half a million marijuana plants and seized approximately 4,714.64 pounds of processed marijuana, 82 weapons, and $113,783 in cash.

Assistant U.S. Attorney Karen A. Escobar prosecuted both cases.

FRESNO, Calif. — United States District Judge Lawrence J. O’Neill sentenced Gary Edward Collins, 46, of Ceres, to eight years and one month in prison, to be followed by 15 years of supervised release, for receipt of child pornography, United States Attorney Benjamin B. Wagner announced. Ceres will be required to register as a sex offender and his access to minors, computers, and the Internet will be restricted.

Collins was indicted on January 13, 2013 and pleaded guilty on November 18, 2013. He was remanded into custody on September 10, 2013, after a judge found that he violated the conditions of his pretrial release. Collins admitted in a plea agreement that between April 11, 2011, and May 12, 2012, in Stanislaus County he received at least 600 images of child pornography. Many of the images depicted prepubescent minors and some involved violence or sadistic or masochistic conduct or abuse.

This case was the result of an investigation by the Ceres Police Department. Assistant United States Attorney David Gappa prosecuted the case.

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

FRESNO, Calif. — The last five pending defendants in a series of huge cases targeting the Nuestra Familia organization pleaded guilty in U.S. District Court this week, U.S. Attorney Benjamin B. Wagner announced. Calixtro Israel Sanchez, aka Cali Killa, aka Cali, 26, of Hanford, pleaded guilty today to a drug trafficking offense. Jose Velez, aka Cisco, 31, of Delano; Felipe Ramirez, aka Casper, 33, of Visalia; Christopher Medrano, aka Bob, 32, of Hanford; and Florentino Acosta, of Mexico, all pleaded guilty earlier this week to drug trafficking offenses.

These five defendants are the last of 39 defendants to plead guilty to federal offenses in these coordinated cases. A jury trial that had been scheduled for March 11, 2014, has been vacated. All defendants were members or associates of the Nuestra Familia (NF). NF is a violent Hispanic prison gang based within the California prison system whose members exert control over street-level Norteño gang members engaged in drug trafficking and violent crime throughout the Central Valley.

According to court documents, during 2009 and 2010, the NF trafficked in methamphetamine, distributing the drugs and collecting debts in Kings, Tulare, Kern, Stanislaus, Merced, Madera and Fresno Counties. The NF obtained large shipments of methamphetamine from Mexico and distributed it among NF regiments throughout California and elsewhere. Some of the profits of the trafficking funded NF members in prison in order to maintain the NF’s power structure within the prison system.

“Numerous federal, state and local law enforcement agencies in this region came together to take on one of the most dangerous gangs in California,” said U.S. Attorney Wagner. “That battle will continue, but the guilty pleas taken this week are a major step forward in protecting the communities of the Central Valley from the violent drug traffickers of the Nuestra Familia.”

“Organized prison gangs and other criminals who traffic drugs are responsible for increased violence in our communities,” stated Bureau of Alcohol, Tobacco, Firearms and Explosives, Special Agent in Charge Joseph M. Riehl. “This investigation is a prime example of teamwork and superior collaboration among many law enforcement agencies with a successful investigative conclusion and prosecution.”

Twenty-six of the defendants who have pleaded guilty have already been sentenced to prison. Nine of them received sentences of between 10 and 16 years in prison, while the remaining 17 have received sentences of between four and 10 years in prison. Parole has been abolished in the federal system, and all defendants will be required to serve at least 85 percent of the prison time imposed.

This case is the product of an extensive series of investigations by the Bureau of Alcohol, Tobacco, Firearms and Explosives; the FBI; the DEA; Kings County Narcotic Task Force; the California Department of Justice; and the California Department of Corrections and Rehabilitation. Numerous local law enforcement agencies played key roles in the investigations, including the Police Departments of Hanford, Lemoore, Visalia, Los Banos, and Corcoran, the Kings County Sheriff’s Office, the California Highway Patrol, and the U.S. Marshals Service. Assistant United States Attorneys Kimberly A. Sanchez, Kathleen A. Servatius, and Melanie L. Alsworth are prosecuting the cases.

Calixtro Sanchez is scheduled to be sentenced by Judge O’Neill on April 21, 2014. Jose Velez is scheduled to be sentenced by Judge O’Neill on April 28, 2014. Felipe Ramirez, Christopher Medrano, and Florentino Acosta are scheduled to be sentenced by Judge O’Neill on April 21, 2014. The defendants face a maximum statutory penalty of life in prison and a mandatory minimum of 10 years in prison and a $4 million fine. The actual sentences, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.