Northern District of California
Press releases recorded for this federal judicial district.
Three San Francisco Residents Plead Guilty to Crimes in Firearms Trafficking SchemeRead the Press Release
SAN FRANCISCO –John Dillon Sembrano, Kelly Mean, and Ryan Vinhnavong Chantha pleaded guilty today to crimes stemming from their respective roles in a firearms trafficking scheme, announced United States Attorney Ismail J. Ramsey and Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) Acting Special Agent in Charge Joshua Jackson. The pleas were accepted by the Hon. Charles R. Breyer, Senior United States District Judge.
On August 9, 2022, a federal grand jury indicted the defendants, charging all three with dealing firearms without a license between August 6, 2020, and November 16, 2021. Sembrano and Mean also were charged with being a felon in possession of a firearm. According to their plea agreements, all three defendants admitted to the charges that were pending against them.
Sembrano admitted in his plea agreement that he engaged in the business of dealing firearms in San Francisco. He admitted that he purchased or otherwise acquired dozens of firearms from a variety of sources and that he had another unlicensed firearms dealer sell them by using advertisements on Snapchat and Instagram. In addition, Sembrano admitted on November 16, 2021, he possessed seventeen firearms—four of which were stolen—that he stored in both the bedroom of his Bayview neighborhood residence and his vehicle. At the time Sembrano possessed the firearms, he already had been convicted of a felony and therefore was not permitted to possess weapons. Sembrano pleaded guilty to one count of dealing firearms without a license, in violation of 18 U.S.C. § 922(a)(1)(A), and one count of being a felon in possession of a firearm, in violation of 18 U.S.C. § 922(g)(1).
For his part, Mean admitted that he also engaged in the business of dealing firearms without a license between August 6, 2020, and November 16, 2021, and that he acquired firearms from a variety of sources and then re-sold them. Mean admitted that on November 16, 2021, he possessed two Glock 9 mm caliber pistols with high-capacity magazines in connection with his firearms dealing business. Mean also admitted that he also had been convicted of a felony and was ineligible to possess the firearms. Like Sembrano, Mean pleaded guilty to one count of dealing firearms without a license, in violation of 18 U.S.C. § 922(a)(1)(A), and one count of being a felon in possession of a firearm in violation of 18 U.S.C. § 922(g)(1).
Chantha admitted that he posted advertisements on social media applications Snapchat and Instagram to sell dozens of firearms. Chantha also admitted he had reason to believe that at least two of the firearms he sold would be transferred to a person who could not lawfully possess a firearm or who would use the firearm unlawfully or would dispose of the firearm unlawfully. Chantha pleaded guilty to dealing firearms without a license in violation of 18 U.S.C. § 922(a)(1)(A).
Sembrano and Mean face a maximum statutory sentence of up to ten years in prison and Chantha faces a maximum statutory sentence of up to five years in prison. In addition, as part of sentencing, the court also may order that the defendants serve additional periods of supervised release as well as pay fines and special assessments. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Judge Breyer scheduled Sembrano’s sentencing hearing for June 7, 2023, and scheduled Chantha and Mean’s sentencing hearings for July 12, 2023.
Assistant United States Attorneys George Hageman and Daniel Kassabian are prosecuting the case with the assistance of Kevin Costello. The prosecution is the result of an investigation by the ATF and the San Francisco Police Department.Bay Area Resident Convicted of Production of Child Pornography and Sex Trafficking of A MinorRead the Press Release
SAN FRANCISCO – Kenneth Orlando Sparks was convicted of production of child pornography and sex trafficking of a minor by a federal jury, announced United States Attorney Ismail J. Ramsey and Federal Bureau of Investigation (FBI) Special Agent in Charge Robert K. Tripp. The verdicts followed a week-long jury trial before the Hon. Vince Chhabria, United States District Judge.
The jury found that Sparks, 36, of Oakland, Calif., produced child pornography by recording multiple videos of himself having sex with a minor victim in July 2019. The jury also found that Sparks engaged in sex trafficking of a minor for his actions enticing, recruiting, and transporting the minor victim to Oakland and San Francisco to engage in commercial sex work on “the Blade” (a generic term used to describe both cities’ commercial sex strips).
Evidence at trial highlighted Sparks’ text messages and social media communications with the minor victim and others, in which Sparks arranged to transport the minor to and from the Blade and offered her advice and instruction while she was working on the Blade. Evidence at trial also demonstrated that Sparks provided the minor accommodation in the Bay Area (including at the location where the child pornography was filmed) in furtherance of her engaging in commercial sex. Trial evidence also demonstrated Sparks had been warned about the minor’s age and nevertheless transported her to the Bay Area for commercial sex on three occasions after receiving the warning.
The investigation began after Sparks and the minor victim were stopped by San Francisco Police Department officers in July 2019. During the traffic stop, SFPD officers learned the passenger in the car was a minor and observed evidence of her involvement in commercial sex work.
A federal grand jury indicted Sparks on September 29, 2021, charging him with one count each of production of child pornography, in violation of 18 U.S.C. § 2251(a); sex trafficking of a minor, in violation of 18 U.S.C. § 1591(a)(1), (b)(2), (c); coercion and enticement of a minor, in violation of 18 U.S.C. § 2422(b); and receipt of child pornography, in violation of 18 U.S.C. § 2252(a)(2). The government dismissed the receipt of pornography charge before trial and the jury acquitted Sparks of the enticement charge.
Sparks faces a maximum statutory sentence of 30 years in prison and a minimum of 15 years in prison, a lifetime term of supervised release, a $250,000 fine, plus restitution and a special assessment for the production of child pornography conviction. Sparks faces life in prison, a minimum of 10 years in prison, a lifetime term of supervised release, a $250,000 fine, as well as restitution and a special assessment for the sex trafficking of a minor conviction. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Judge Chhabria has not yet scheduled Sparks’s sentencing hearing. He remains free on bond, pending further hearings.Assistant U.S. Attorneys Ilham Hosseini and Alethea Sargent are prosecuting the case with the assistance of Veronica Hernandez and Megan Pagaduan. The prosecution is the result of an investigation by the FBI and San Francisco Police Department.
Former Federal Prison Warden Sentenced for Sexual Abuse of Three Female InmatesRead the Press Release
A former prison warden was sentenced today in the Northern District of California to 70 months in prison, 15 years of supervised release and $15,000 in restitution for sexually abusive conduct against three female victims who were serving prison sentences and one count of making false statements to government agents.
Ray J. Garcia, 55, of Merced, California, was sentenced following his conviction by a federal jury in December 2022.
Trial evidence showed that Garcia was employed as an associate warden and later as the warden of the Federal Correctional Institute in Dublin, California (FCI Dublin), an all-female low security federal correctional institution. All three of Garcia’s victims were incarcerated and serving their prison sentences at FCI Dublin under the custodial, supervisory and disciplinary authority of Garcia when the crimes occurred.
“The defendant in this case abused his authority as a warden and violated his oath to protect those in the custody of the Bureau of Prisons,” said Deputy Attorney General Lisa O. Monaco. “The sentence he received today is another step forward in our ongoing efforts to root out sexual misconduct within the BOP. This prosecution should serve as both warning and reassurance that the Department of Justice will not waver in holding accountable BOP employees and executives who abuse their authority — whether they be a correctional officer, chaplain, or warden — and in pursuing justice for their victims.”
“Rather than ensuring that female inmates at the Dublin prison were safe and secure, Garcia used his position as warden to sexually abuse three inmates over multiple years, intimidated inmates and lied to cover up his crimes, and created a heinous culture that failed to protect female inmates from widespread sexual abuse and violence at the hands of other Dublin employees. The Department of Justice Office of the Inspector General will continue to aggressively investigate this type of egregious criminal conduct and we will do everything within our authority to bring perpetrators to justice,” said Department of Justice Inspector General Michael E. Horowitz.
“Corrections officials are sworn to protect people and preserve civil rights — the extreme opposite of this defendant's heinous actions,” said FBI Deputy Director Paul Abbate. “Garcia assaulted and harmed those in his care and custody, attempted to intimidate them into silence, and then lied in an effort to cover up his crimes. The FBI is grateful to the brave women who came forward to report these vile offenses, and we hope today’s sentence is one more step towards justice and healing.”
“The evidence in this case paints a disturbing picture of a former warden who abused the trust placed in him, as well as authority granted to him, all while thinking he could get away with his crimes by lying to investigators and intimidating his victims,” said U.S. Attorney Ismail J. Ramsey for the Northern District of California. “Today’s sentence demonstrates that prison walls present no impediment to justice. The Department of Justice will hold accountable any prison official who violates their duty to protect those in federal custody.”
The trial evidence established that Garcia abused inmates from December 2019 until July 2021. Garcia’s sexual abuse and abusive sexual contact against Victim 1 began in December 2019 and extended through March 2020, the abuse of Victim 2 occurred January to July 2021 and the abuse of Victim 3 occurred during the period of March to September 2020. The jury convicted Garcia of three counts sexual abuse and one count of sexually abusive contact as to Victim 1, two counts of abusive sexual contact as to Victim 2, and one count of abusive sexual contact as to Victim 3.
The government’s sentencing memorandum described how Garcia also sought to deter his victims from coming forward. For example, Garcia told his victims he was friends with the person in charge of investigating sexual abuse of inmates, boasted that he could “never be fired,” and warned them that he worked for “Washington, D.C.” Garcia also instructed a victim to “get rid of any evidence” and reported falsely to another victim that a different inmate was sent back to FCI Dublin after pictures of a correctional officer were found on her phone. According to the government’s memorandum, Garcia created and perpetuated a culture of abuse. The government also pointed out that four other correctional officers at FCI Dublin have been charged with sexually abusing inmates while Garcia was associate warden or warden.
The trial evidence also demonstrated Garcia made false statements to federal investigators. On July 22, 2021, Garcia was interviewed and told investigators he never asked inmates to be undressed for him and that he had never touched an inmate inappropriately. Trial evidence showed that Garcia had already asked multiple inmates to undress for him and had also touched Victim 1, Victim 2 and Victim 3 in a sexual manner.
Garcia was initially charged with sexual abuse of an inmate on Sept. 24, 2021. A federal grand jury issued a superseding indictment on Aug. 23, 2022, charging Garcia with three counts of sexual abuse and four counts of abusive sexual contact against three female inmates. The superseding indictment also charged Garcia with one count of making false statements to a government agency during the investigation of the criminal acts. On Dec. 8, 2022, a jury convicted Garcia of all counts.
Judge Gonzalez Rogers ordered Garcia to report to surrender on or before May 19 to begin serving his prison term.
The Justice Department Office of Inspector General and the FBI are investigating the case, with the cooperation of the Bureau of Prisons.
Assistant U.S. Attorneys Molly Priedeman and Andrew Paulson for the Northern District of California, with the assistance of Madeline Wachs, Leeya Kekona and Sara Slattery are prosecuting the case.
Former Federal Prison Warden Sentenced to More Than Five Years in Prison for Sexual Abuse of Three Female InmatesRead the Press Release
OAKLAND – Former prison warden Ray J. Garcia was sentenced today to 70 months in prison following his convictions for sexually abusive conduct against three female victims who were serving prison sentences and for making false statements to government agents. The sentence was handed down by the Hon. Yvonne Gonzalez Rogers, U.S. District Judge, who presided over the trial that resulted in the convictions.
Garcia, 55, of Merced, Calif., was convicted of the charges in December of 2022. The evidence at trial demonstrated Garcia was employed as an associate warden and later as the warden of the Federal Correctional Institute in Dublin, Calif. (FCI Dublin), an all-female low security federal correctional institution. All three of Garcia’s victims were incarcerated and serving their prison sentences at FCI Dublin under the custodial, supervisory and disciplinary authority of Garcia when the crimes occurred.
“The defendant in this case abused his authority as a warden and violated his oath to protect those in the custody of the Bureau of Prisons,” said Deputy Attorney General Lisa O. Monaco. “The sentence he received today is another step forward in our ongoing efforts to root out sexual misconduct within the BOP. This prosecution should serve as both warning and reassurance that the Department of Justice will not waver in holding accountable BOP employees and executives who abuse their authority — whether they be a guard, chaplain or warden — and in pursuing justice for their victims.”
“The evidence in this case paints a disturbing picture of a former warden who abused the trust placed in him, as well as authority granted to him, all while thinking he could get away with his crimes by lying to investigators and intimidating his victims,” said U.S. Attorney Ismail J. Ramsey for the Northern District of California. “Today’s sentence demonstrates that prison walls present no impediment to justice. The Department of Justice will hold accountable any prison official who violates their duty to protect those in federal custody.”
“Rather than ensuring that female inmates at the Dublin prison were safe and secure, Garcia used his position as warden to sexually abuse three inmates over multiple years, intimidated inmates and lied to cover up his crimes, and created a heinous culture that failed to protect female inmates from widespread sexual abuse and violence at the hands of other Dublin employees,” said Department of Justice Inspector General Michael E. Horowitz. “Today’s 70-month sentence holds Garcia accountable for his disgraceful actions and sends a clear message to every BOP employee about the serious consequences of engaging in such conduct. The Department of Justice Office of the Inspector General will continue to aggressively investigate this type of egregious criminal conduct and we will do everything within our authority to bring perpetrators to justice.”
“Corrections officials are sworn to protect people and preserve civil rights - the extreme opposite of this defendant's heinous actions,” said FBI Deputy Director Paul Abbate. “Garcia assaulted and harmed those in his care and custody, attempted to intimidate them into silence, and then lied in an effort to cover up his crimes. The FBI is grateful to the brave women who came forward to report these vile offenses, and we hope today’s sentence is one more step towards justice and healing.”
“Garcia will now spend the next 70 months in federal prison for his abhorrent misconduct,” said FBI Special Agent in Charge of the San Francisco Field Office Robert Tripp. “Corrections officials who abuse their position are not above the law they have sworn to uphold. The FBI and our partners will continue to vigorously enforce our civil rights laws and hold prison officials who break the law accountable.”
The trial evidence established that Garcia abused inmates from December 2019 until July 2021. Garcia’s sexual abuse and abusive sexual contact against Victim 1 began in December 2019 and extended through March 2020, the abuse of Victim 2 occurred January to July 2021, and the abuse of Victim 3 occurred during the period of March to September 2020. The jury convicted Garcia of three counts sexual abuse and one count of sexually abusive contact as to Victim 1, two counts of abusive sexual contact as to Victim 2, and one count of abusive sexual contact as to Victim 3.
The government’s sentencing memorandum described how Garcia also sought to deter his victims from coming forward. For example, Garcia told his victims he was friends with the person in charge of investigating sexual abuse of inmates, boasted that he could “never be fired,” and warned them that he worked for “Washington, D.C.” Garcia also instructed a victim to “get rid of any evidence” and reported falsely to another victim that a different inmate was sent back to FCI Dublin after pictures of a correctional officer were found on her phone. According to the government’s memorandum, Garcia created and perpetuated a culture of abuse. The government also pointed out that four other correctional officers at FCI Dublin have been charged with sexually abusing inmates while Garcia was associate warden or warden.
The trial evidence also demonstrated Garcia made false statements to federal investigators. On July 22, 2021, Garcia was interviewed and told investigators he never asked inmates to be undressed for him and that he had never touched an inmate inappropriately. Trial evidence showed that Garcia had already asked multiple inmates to undress for him and had also touched Victim 1, Victim 2 and Victim 3 in a sexual manner.
Garcia was initially charged with sexual abuse of an inmate on Sept. 24, 2021. A federal grand jury issued a superseding indictment on Aug. 23, 2022, charging Garcia with three counts of sexual abuse and four counts of abusive sexual contact against three female inmates. The superseding indictment also charged Garcia with one count of making false statements to a government agency during the investigation of the criminal acts. On Dec. 8, 2022, a jury convicted Garcia of all counts.
In addition to the prison term, Judge Gonzalez Rogers ordered Garcia to pay $15,000 and to serve 15 years’ supervised release which begin after the prison term. Judge Gonzalez Rogers ordered Garcia to report to surrender on or before May 19, 2023, to begin serving his prison term.
DOJ-OIG and the FBI are investigating the case, with the cooperation of the Bureau of Prisons.
Assistant U.S. Attorneys Molly Priedeman and Andrew Paulson for the Northern District of California, with the assistance of Madeline Wachs, Leeya Kekona and Sara Slattery are prosecuting the case.
Ismail J. Ramsey Sworn in as United States Attorney for the Northern District of CaliforniaRead the Press Release
SAN FRANCISCO – Ismail J. Ramsey took the oath of office today to become the United States Attorney for the Northern District of California. President Joseph Biden announced the nomination of Mr. Ramsey on November 29, 2022, and the United States Senate confirmed Mr. Ramsey on March 7, 2023. Hon. Thelton Henderson, Senior United States District Judge (ret.) and Chief District Judge Richard Seeborg oversaw the private ceremony.
From 1999 to 2003, Mr. Ramsey served as an Assistant United States Attorney in the office he now leads. Since 2006, he has been a partner at Ramsey & Ehrlich LLP in Berkeley, Calif. He also has served as an adjunct professor at the University of California at Berkeley School of Law.
From 1997 to 1999 and 2003 to 2005, Mr. Ramsey worked as an associate at the law firm Keker, Van Nest & Peters LLP. In 1996 and 1997, he served as a law clerk for Judge Harry T. Edwards.
Mr. Ramsey earned a Bachelor of Arts from Harvard College in 1989, a Master of Business Administration from the Haas School of Business in 1996, and a Juris Doctor from Harvard Law School in 1996. He is a veteran of the United States Air Force.San Jose Resident Faces Charge of Distributing FentanylRead the Press Release
OAKLAND – Ian Edward Parrish appeared today in United States District Court to face a federal charge that he distributed fentanyl in the form of counterfeit “M30” pills, announced United States Attorney Stephanie M. Hinds and Federal Bureau of Investigations (FBI) Special Agent in Charge Robert K. Tripp. Parrish made his initial appearance today in United States District Court in Oakland before United States Magistrate Judge Kandis A. Westmore.
The charge was set out in a criminal complaint filed March 14, 2023, and unsealed in federal court today. According to the criminal complaint, Parrish, 28, of San Jose, Calif., sold two counterfeit Percocet pills to an individual in a bar in Fremont. The complaint alleges that the counterfeit pills were in fact laced with fentanyl. The complaint alleges that the individual who purchased the pills consumed one and shortly thereafter died of an overdose.
The complaint charges Parrish with distribution of fentanyl, in violation of 21 U.S.C. 841(a)(1), (b)(1)(C). The statutory maximum for the charge is a maximum 20 years’ imprisonment, a maximum fine of $250,000, a maximum of 3 years’ supervised release, and a $100 special assessment. However, any sentence following a conviction would be imposed by a court only after considerations of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. 3553.
The charges contained in the criminal complaint are only allegations. As in any criminal case, the defendant is presumed innocent unless and until proven guilty in a court of law.
At today’s hearing, Parrish was ordered detained. His next federal court appearance is scheduled for March 21, 2023, before Magistrate Judge Westmore for a status conference to consider detention and additional issues.
Assistant U.S. Attorney Evan M. Mateer of the Oakland Branch of the United States Attorney’s Office is prosecuting the case with the assistance of Karina Ruiz. The prosecution is the result of an investigation by FBI and the Fremont Police Department.
One Pill Can Kill: Beware of pills bought on the street: One Pill Can Kill. Fentanyl, a Schedule II controlled substance, is a highly potent opiate that can be diluted with cutting agents to create counterfeit pills that purport to mimic the effects of Oxycodone, Percocet, and other drugs, but can be obtained at a lower cost. However, very small variations in the amount or quality of fentanyl create huge effects on the potency of the counterfeit pills and can easily cause death. Fentanyl has now become the leading cause of drug overdose deaths in the United States. Counterfeit, fentanyl-laced pills are usually shaped and colored to resemble pills that are sold legitimately at pharmacies.
Alameda County Firefighter Indicted for Possession of Child PornographyRead the Press Release
OAKLAND - Charles Johnathen Harris made his initial federal court appearance today to face charges that he was in possession of child pornography in violation of federal law, announced United States Attorney Stephanie M. Hinds and Federal Bureau of Investigation Special Agent in Charge Robert K. Tripp. Harris appeared before U.S. Magistrate Judge Kandis A. Westmore.
On March 2, 2023, a federal grand jury handed down the indictment containing the charge against Harris, 42, of Coulterville, Calif., who is employed as a firefighter with Alameda County Fire Department. According to the indictment, Harris is alleged to have possessed images of child pornography on his iPhone, including images of prepubescent children. Additional information about the case was submitted by the government in connection with Harris’s appearance today. Specifically, the case allegedly was initiated after federal authorities received a tip from the National Center for Missing and Exploited Children and an investigation uncovered that Harris allegedly uploaded child pornography over social media platform Kik—even while present at fire stations in Alameda County.
The defendant surrendered to federal authorities earlier today and was released on bond with the condition that his access to the internet will be restricted. Defendant’s next scheduled appearance is scheduled for 2:00 p.m. on April 19, 2023, for status conference before the Honorable Haywood S. Gilliam, Jr., U.S. District Court Judge.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendants face a maximum sentence of 20 years of imprisonment, and a fine of $250,000, plus restitution as ordered by the Court. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Kelly Volkar is prosecuting the case with the assistance of Nina Burney and Karina Ruiz. The prosecution is the result of an investigation by the Federal Bureau of Investigation, San Jose Police Department, and Mariposa County Sheriff’s Office.
Two California Men Sentenced to Prison for Conspiracy to Attack Democratic Headquarters in SacramentoRead the Press Release
SAN FRANCISCO – Today, Ian Benjamin Rogers was sentenced to 108 months in prison and Jarrod Copeland was sentenced to 54 months in prison for their respective roles in crimes including a conspiracy to destroy the Democratic Headquarters in Sacramento, announced United States Attorney Stephanie M. Hinds and FBI Special Agent in Charge Robert K. Tripp. The sentences were handed down by the Honorable Charles R. Breyer, Senior United States District Judge.
Rogers, 46, of Napa, and Copeland, 39, of Vallejo, pleaded guilty to their crimes on May 26, 2022, and November 16, 2021, respectively. Rogers was sentenced for conspiracy as well as multiple federal weapons violations while Copeland was sentenced for his role in the conspiracy and for obstruction of justice.
“The defendants in this case admitted that they intended to destroy the headquarters of a political organization by firebombing it,” said U.S. Attorney Hinds. “Their decision to ‘go to war’ was based on their thought that they would rather destroy their political opponents’ building than acknowledge they lost an election and rely on the political process to make change. Ian Rogers and Jarrod Copeland will now have plenty of time to reflect on the fact that resorting to violence is not an acceptable means of making political change in our democracy. Prosecution and imprisonment await those who attempt to supplant the political process with fear and violence.”
“Rogers and Copeland devised a plan of attack to put innocent lives in danger. Today's sentences make clear that those actions have serious consequences,” said FBI Special Agent in Charge Robert K. Tripp. “The FBI’s partnership with the Napa County Sheriff’s Office was critical in thwarting their plot. We will not stop our pursuit of extremists who advocate for violence over constitutionally protected discourse and imperil our communities."
Rogers and Copeland entered into separate plea agreements in which they admitted their role in the crimes. Both defendants admitted in their plea agreements that after the 2020 Presidential election they conspired together to destroy the John L. Burton Democratic Headquarters in Sacramento. They admitted that between November 2020 and January 2021 they discussed attacking the Democratic Headquarters building with cans of gasoline, including by throwing gas cans through the front windows of the building and igniting the gasoline to burn down the building. They also acknowledged that Rogers viewed the Democratic Headquarters building on the internet and sent a map of the location to Copeland, discussing the building’s proximity to a fire department and certain law enforcement in devising their plan, all to refine the method of attack to ensure they caused the greatest damage to the building while allowing their escape without detection. Rogers and Copeland also admitted discussing how they would wait until after the presidential inauguration on Jan. 20, 2021, before carrying out the attack.
Papers filed by the government describe how law enforcement officers seized a cache of weapons, including 45 to 50 firearms, thousands of rounds of ammunition, and five pipe bombs from Rogers’s home and business on Jan. 15, 2021. Just days earlier, Rogers wrote to Copeland, “after the 20th we go to war.” Rogers admitted in his plea agreement that he had constructed the pipe bombs and anticipated using them against the property of those whose political views differed from his, including the Democratic Headquarters building in Sacramento. He further admitted that he possessed at least three fully automatic machine guns and considered using one of them in the attack on the building.
At a hearing for the defendants’ sentencings, Judge Breyer described the defendants’ conduct as “an act of terrorism.” Judge Breyer stated, “this is a very serious offense . . .. But for the intervention of law enforcement, it's the Court's view that there was no impediment to the act of terrorism; and whether it was one or multiple, the evidence that was obtained certainly shows that there was a plan, a design, an opportunity and ability to carry out the firebombing of the Democratic Headquarters located in Sacramento, California, the John Burton Building.”
On July 7, 2021, a federal grand jury handed down an indictment charging Copeland with one count of conspiracy to destroy by fire or explosive a building used in or affecting interstate commerce, in violation of 18 U.S.C. § 844(i) and (n); and one count of obstruction of justice, in violation of 18 U.S.C. § 1512(c). The grand jury also charged Rogers with the conspiracy charge as well as one count of possession of unregistered destructive devices, in violation of 26 U.S.C.§ 5861(d), and three counts of possession of machine guns, in violation of 18 U.S.C. § 922(o). Copeland pleaded guilty to both charges pending against him. Rogers pleaded guilty to the conspiracy charge, one count of possession of unregistered destructive devices, and one count of possessing an illegal machine gun. At the sentencing, Judge Breyer dismissed the remaining charges with respect to Rogers.
In addition to the prison terms, Judge Breyer also ordered Rogers and Copeland to each serve three years of supervised release, to begin after they serve their prison terms. Rogers has remained in custody since his arrest in January 2021 and Copeland has been in federal custody since his arrest in July 2021. Both defendants will begin serving their prison sentences immediately.
The Special Prosecutions Section of the Northern District of California is prosecuting the case, with assistance from the National Security Division’s Counterterrorism Section. The FBI’s San Francisco Field Office investigated the case, with valuable assistance provided by the FBI Sacramento Field Office and Napa County Sheriff’s Department.
Rohnert Park Resident Convicted of East Bay Bank Robbery SpreeRead the Press Release
OAKLAND – A federal jury convicted William Mulligan today of two counts of bank robbery and two counts of attempted bank robbery relating to an East Bay bank robbery spree in January of 2021, announced United States Attorney Stephanie M. Hinds and Federal Bureau of Investigation Special Agent in Charge Robert K. Tripp. The conviction follows a four-day trial before the Honorable Yvonne Gonzalez Rogers, United States District Judge.
Mulligan, 36, of Rohnert Park, was charged on May 13, 2021, in a federal indictment alleging multiple counts of bank robbery and attempted robbery, all taking place in January of 2021. At trial, the government showed that on January 11, 2021, Mulligan entered a Bank of America branch in Dublin, Calif., presented a robbery note to the teller, and walked away with $8,650 in cash. Then, on January 25, 2021, Mulligan robbed or attempted to rob three East Bay banks. First, Mulligan entered a Bank of America branch in Pleasant Hill, Calif., presented the robbery note, but the teller refused to give him any money. Twenty minutes later, Mulligan entered a Bank of America branch in Walnut Creek, Calif., presented the robbery note to the teller, who retreated to the bank’s vault room without giving Mulligan any money. Shortly thereafter, Mulligan entered a Wells Fargo branch in Concord, Calif., presented the robbery note and obtained $1,160 from the bank teller. Three days later, on January 28, 2021, Mulligan was pulled over while driving a white Nissan with a black spoiler, distinctive stickers, and no license plates, the same car seen on surveillance footage at the Dublin and Walnut Creek robberies. After Mulligan’s arrest, officers discovered a robbery note in his wallet and a subsequent FBI search of his car revealed clothing matching that worn during all four bank robberies and attempted bank robberies.
On May 13, 2021, a federal grand jury indicted Mulligan, charging him with five counts of robbery and attempted bank robbery, in violation of 18 U.S.C. § 2113(a). At trial, the government presented evidence demonstrating Mulligan was guilty of four of the counts and the jury convicted Mulligan of all the counts tried.
Mulligan faces a maximum sentence of 20 years in prison per count, as well as a $250,000 fine. In addition, the court may order restitution and an additional term of supervised release. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Judge Gonzalez Rogers ordered that Mulligan remain detained pending sentencing and has not yet scheduled a sentencing date.
Assistant United States Attorneys Abraham Fine and Benjamin K. Kleinman of the Oakland Branch of the United States Attorney’s Office are prosecuting the case with assistance from Kay Konopaske, Kathleen Turner, Jessie Chelsea and Margoth Turcios. The prosecution is a result of an investigation by the FBI.
Pennsylvania Resident Convicted of Conspiracy in Scheme to Defraud and Extort Crypotocurrency ExecutivesRead the Press Release
SAN FRANCISCO – Today, Anthony Francis Faulk pleaded guilty to a federal charge of conspiracy in connection with a scheme to defraud more than a dozen executives of cryptocurrency-related companies and cryptocurrency investors of money and other property, announced United States Attorney Stephanie M. Hinds and FBI Special Agent in Charge Robert K. Tripp. The guilty plea was accepted by the Honorable William H. Orrick, United States District Judge.
Faulk, 26, of Latrobe, Penn., acknowledged his role in the conspiracy in a written plea agreement filed with the Court. According to his plea agreement, Faulk admitted from October 2016 through May 2018, he conspired with others to defraud and extort cryptocurrencies and other money from executives of cryptocurrency-related companies and cryptocurrency investors. Faulk acknowledged that the scheme involved extortion as well as “SIM swapping,” whereby Faulk and his co-conspirators gained access to their victims’ email, electronic storage, and other accounts to defraud the victims of their property.
SIM stands for Subscriber Identity Module or Subscriber Identification Module. A SIM card is a technology used to identify and authenticate subscribers on mobile phone devices. According to his plea agreement, Faulk admitted that he used fraud, deception, and social engineering techniques to induce representatives of cellphone service providers to transfer or port cellphone numbers from SIM cards in the devices possessed by victims into SIM cards of devices possessed by members of the conspiracy. Once in possession of the illegally obtained information, members of the conspiracy reset passwords of their victims’ email, electronic storage, and other accounts. The co-conspirators then were able to control the accounts, access cryptocurrency accounts, and transfer cryptocurrencies from accounts owned by the victims to accounts, or wallets, controlled by Faulk and his co-conspirators.
Further, Faulk admitted that in addition to transferring cryptocurrencies, the co-conspirators also contacted some of their victims by telephone and threatened to compromise further accounts unless the victims paid additional money to the fraudsters.
In the plea agreement, Faulk agreed to forfeit a home in Pennsylvania valued at approximately $942,500, two bank accounts with a combined value of more than $18,500,000, luxury cars, jewelry, and other property – all constituting or is derived from proceeds traceable to the conspiracy.
On December 10, 2019, a federal grand jury indicted Faulk, charging him with one count of conspiracy to commit wire fraud, in violation of 18 U.S. C. § 1349, and one count of interstate communications with intent to extort, in violation of 18 U.S.C. § 875(d). Pursuant to his plea agreement, Faulk pleaded guilty to the conspiracy count. If Faulk complies with the terms of the agreement, the extortion count will be dismissed at sentencing.
Faulk remains free on bail pending his sentencing. Judge Orrick scheduled the sentencing for June 8, 2023. Faulk faces a statutory maximum sentence of 20 years in prison and a maximum fine of twice the gain or loss realized from his crimes. In addition, the court could order Faulk to serve a maximum three-year term of supervised release, restitution, and other penalties. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant United States Attorney Robert Leach is prosecuting the case. This case is the result of an investigation from FBI, along with significant assistance from the Santa Clara County District Attorney's Office's REACT Task Force.
Former San Quentin Prison Guard Sentenced to 20 Months in Prison for Accepting Bribes to Smuggle Contraband into Death RowRead the Press Release
SAN FRANCISCO – Former Corrections Officer Keith Christopher was sentenced today to 20 months in prison for his role in a conspiracy to smuggle contraband into San Quentin State Prison (SQP), announced United States Attorney Stephanie M. Hinds and Federal Bureau of Investigation Special Agent in Charge Robert K. Tripp. The sentence was handed down by the Hon. Susan Illston, United States Senior District Judge.
Christopher, 38, of Pittsburg, Calif., pleaded guilty to crimes related to the conspiracy on September 16, 2022. Christopher was employed as a Correctional Officer at SQP and, as described in the indictment, worked in SQP’s East Block, known as Death Row. He admitted in his plea agreement that he accepted payments as bribes in exchange for smuggling at least 25 contraband cell phones into SQP. Cell phones are deemed contraband for prisoners in all parts of the prison as they create safety and security risks for prison employees, other inmates, and the public at large when used by inmates to direct criminal activity outside the prison. The California Code of Regulations accordingly prohibits prisoners from possessing cell phones.
Christopher admitted in his plea agreement that he delivered cell phones and accessories, such as chargers, to a condemned inmate who then sold many of the phones to other inmates. Christopher acknowledged that as early as 2019, he orchestrated a conspiracy involving an inmate; co-conspirators Isaiah Wells, 32, of Tracy, Calif., Tanisa Smith-Symes, 46, of Las Vegas, NV, and Dustin Albini, 37, of Pittsburg, CA; and others. Christopher’s plea agreement includes descriptions of two instances in which he arranged to receive bribes in exchange for smuggling cell phones into the prison. In the first instance, the prison inmate working with Christopher arranged for 10 cell phones to be shipped to the Nevada residence of an associate. That associate was Smith-Symes. According to Christopher, in December 2019, the inmate arranged for a package containing 10 cell phones to be delivered to Smith-Symes’ residence in Nevada. Christopher acknowledged that he directed Smith-Symes to send the phones to Albini who delivered the phones to Christopher. Christopher further admitted that he sent a text message to Smith-Symes establishing that he would smuggle the cell phones into the prison for $5,000 and that the money should be sent using Venmo and Walmart money transfers—some of the money through Albini and some through Wells. The second incident described in Christopher’s plea agreement involves an agreement in May of 2020, in which Christopher arranged to smuggle an additional 15 cell phones into SQP for a payment of $7,500. The cell phones again were delivered first to Smith-Symes, but this time were routed through Wells who then delivered them to Christopher. Christopher agreed with the inmate to reduce his fee for this second smuggling transaction and, ultimately, Christopher delivered the phones to the inmate for a $6,500, a small portion of which went to Wells in exchange for his participation in the conspiracy.
On September 29, 2021, federal grand jury indicted Christopher, Wells, Albini, and Smith-Symes charging each with conspiracy to commit honest services fraud (bribery), in violation of 18 U.S.C. §§ 1341, 1343, 1346, and 1349, and various other crimes in accordance with their particular role in the scheme. Christopher pleaded guilty to the count alleging conspiracy to commit honest services fraud and to two counts of accepting bribes, in violation of 18 U.S.C. § 666(a)(1)(B).
In addition to Christopher’s prison term, Judge Illston ordered Christopher to serve three years of supervised release that will begin after the conclusion of his prison term. Judge Illston ordered Christopher to surrender on or before May 25, 2023, to begin serving his prison term.
The case is being prosecuted by the Special Prosecutions Section of the U.S. Attorney’s Office. The prosecution is the result of an investigation by the FBI and the California Department of Corrections and Rehabilitation’s Office of Internal Affairs.
United States Attorney Stephanie M. Hinds Announces Implementation of New Voluntary Self-Disclosure PolicyRead the Press Release
United States Attorney Stephanie M. Hinds announced that the U.S. Attorney’s Office for the Northern District of California has implemented the new United States Attorney’s Offices’ Voluntary Self-Disclosure Policy released earlier today. The policy, which is effective immediately, details the circumstances under which a company will be considered to have made a voluntary self-disclosure (VSD) of misconduct to a United States Attorney’s Office (USAO), and provides transparency and predictability to companies and the defense bar concerning the concrete benefits and potential outcomes in cases where companies voluntarily self-disclose misconduct, fully cooperate and timely and appropriately remediate.
The goal of the policy is to standardize how VSDs are defined and credited by USAOs nationwide, and to incentivize companies to maintain effective compliance programs capable of identifying misconduct, to expeditiously and voluntarily disclose and remediate misconduct, and to cooperate fully with the government in corporate criminal investigations. The policy was developed pursuant to the Deputy Attorney General’s September 15, 2022 memorandum, “Further Revisions to Corporate Criminal Enforcement Policies Following Discussions with Corporate Crime Advisory Group” (Monaco Memo), which directed each Department of Justice (DOJ) component that prosecutes corporate crime to review its policies on corporate voluntary self-disclosure and, if there was no formal written policy to incentivize self-disclosure, draft and publicly share such a policy.
Under the new VSD policy, a company is considered to have made a VSD if it becomes aware of misconduct by employees or agents before that misconduct is publicly reported or otherwise known to the DOJ, and discloses all relevant facts known to the company about the misconduct to a USAO in a timely fashion prior to an imminent threat of disclosure or government investigation. A company that voluntarily self-discloses as defined in the policy and fully meets the other requirements of the policy, by—in the absence of any aggravating factor—fully cooperating and timely and appropriately remediating the criminal conduct (including agreeing to pay all disgorgement, forfeiture, and restitution resulting from the misconduct), will receive significant benefits, including that the USAO will not seek a guilty plea; may choose not to impose any criminal penalty, and in any event will not impose a criminal penalty that is greater than 50% below the low end of the United States Sentencing Guidelines (USSG) fine range; and will not seek the imposition of an independent compliance monitor if the company demonstrates that it has implemented and tested an effective compliance program.
The policy identifies three aggravating factors that may warrant a USAO seeking a guilty plea even if the other requirements of the VSD policy are met: (1) if the misconduct poses a grave threat to national security, public health, or the environment; (2) if the misconduct is deeply pervasive throughout the company; or (3) if the misconduct involved current executive management of the company. The presence of an aggravating factor does not necessarily mean that a guilty plea will be required; instead, the USAO will assess the relevant facts and circumstances to determine the appropriate resolution. If a guilty plea is ultimately required, the company will still receive the other benefits under the VSD policy, including that the USAO will recommend a criminal penalty of at least a 50% and up to a 75% reduction off the low end of the USSG fine range, and that the USAO will not require the appointment of a monitor if the company has implemented and tested an effective compliance program.
In cases where a company is being jointly prosecuted by a USAO and another DOJ component, or where the misconduct reported by the company falls within the scope of conduct covered by VSD policies administered by other DOJ components, the USAO will coordinate with, or, if necessary, obtain approval from, the DOJ component responsible for the VSD policy specific to the reported misconduct when considering a potential resolution. Consistent with relevant provisions of the Justice Manual and as allowable under alternate VSD policies, the USAO may choose to apply any provision of an alternate VSD policy in addition to, or in place of, any provision of its policy.
The Attorney General’s Advisory Committee (AGAC), under the leadership of United States Attorney for the Southern District of New York Damian Williams, requested that the White Collar Fraud Subcommittee of the AGAC, under the leadership of United States Attorney for the Eastern District of New York Breon Peace, develop policies in response to the Deputy AG’s memo. The policy announced today was prepared by a Corporate Criminal Enforcement Policy Working Group on which U.S. Attorney Hinds sits. In addition to U.S. Attorney Hinds, the Working Group is comprised of U.S. Attorneys from geographically diverse districts, including U.S. Attorney Peace, U.S. Attorney for the Eastern District of Virginia Jessica Aber, U.S. Attorney for the District of Connecticut Vanessa Avery, U.S. Attorney for the District of Hawaii Clare Connors, U.S. Attorney for the Eastern District of North Carolina Michael F. Easley, Jr., U.S. Attorney for the Western District of Virginia Christopher Kavanaugh, and U.S. Attorney for the District of New Jersey Philip Sellinger. Assistant U.S. Attorney Amanda Riedel, White Collar Crimes Coordinator for the Executive Office for U.S. Attorneys, also participated in the development of the policy.
Alamo Resident Faces Possession with Intent to Distribute Fentanyl ChargeRead the Press Release
OAKLAND – Ozymandias Troy Watson appeared today in United States District Court to face a federal charge that he possessed with intent distribute fentanyl in the form of counterfeit “M30” pills, announced United States Attorney Stephanie M. Hinds and Drug Enforcement Administration (DEA) Acting Special Agent in Charge Bob P. Beris. Watson made his initial appearance today in United States District Court in Oakland before United States Magistrate Judge Donna M. Ryu.
The charge was set out in a criminal complaint filed February 10, 2023, and unsealed in federal court today. According to the criminal complaint, Watson, 18, of Contra Costa County, possessed numerous fentanyl “M30” pills and intended to distribute them. The complaint describes a drug transaction where “M30 pills,” that are alleged to have been provided by Watson, were sold to an individual who subsequently died of an overdose. The complaint alleges that Watson possessed approximately 130 “M30” fentanyl tablets.
In sum, the complaint charges Watson with possession with intent to distribute fentanyl in violation of 21 U.S.C. 841(a)(1), (b)(1)(C). The statutory maximum for the charge is a maximum 20 years’ imprisonment, a maximum fine of $250,000, a maximum of 3 years’ supervised release, and a $100 special assessment. However, any sentence following a conviction would be imposed by a court only after considerations of the U.S. Sentencing Guidelines and the federal statue governing the imposition of a sentence, 18 U.S.C. 3553.
The charges contained in the criminal complaint are only allegations. As in any criminal case, the defendant is presumed innocent unless and until proven guilty in a court of law.
Assistant U.S. Attorney Kenneth Chambers of the Oakland Branch of the United States Attorney’s Office is prosecuting the case with the assistance of Leeya Kekona. The prosecution is the result of an investigation by DEA and the Dublin Police Department.
One Pill Can Kill: Beware of pills bought on the street: One Pill Can Kill. Fentanyl, a Schedule II controlled substance, is a highly potent opiate that can be diluted with cutting agents to create counterfeit pills that purport to mimic the effects of Oxycodone, Percocet, and other drugs, but can be obtained at a lower cost. However, very small variations in the amount or quality of fentanyl create huge effects on the potency of the counterfeit pills and can easily cause death. Fentanyl has now become the leading cause of drug overdose deaths in the United States. Counterfeit, fentanyl-laced pills are usually shaped and colored to resemble pills that are sold legitimately at pharmacies.
Concord Man Charged with Receipt of Child PornographyRead the Press Release
OAKLAND - Javier Antonio Ramirez made his initial appearance today on a federal complaint charging him with receipt of child pornography, announced United States Attorney Stephanie M. Hinds and Homeland Security Investigations (“HSI”) Special Agent in Charge Tatum King.
According to the affidavit supporting the complaint, in January 2023, a student, identified in the complaint as “Minor Victim 1,” suffered from a suspected fentanyl overdose at a school in Contra Costa County. A school nurse administered multiple doses of Narcan to the minor victim in an attempt to save her life. When law enforcement officers arrived, the minor victim was conscious and was subsequently transported to a local hospital for treatment.
The complaint describes the investigation leading law enforcement officers to conclude Ramirez, a 28-year-old Concord, California resident, provided the fentanyl to the minor victim, including taking her to San Francisco to obtain fentanyl. Further, the complaint affidavit alleges that law enforcement reviewed Ramirez’s cell phone and that this search revealed multiple videos and images taken of him having sexual intercourse or engaging in sexually explicit conduct with a minor. As alleged in the complaint affidavit, on Ramirez’s cell phone, law enforcement also found other files containing child pornography, including a file Ramirez received on January 3, 2023, with an approximately nine-minute video depicting a child, approximately 6- to 8-years-old, being sexually exploited by an unidentified male.
Ramirez is charged with receipt of child pornography, in violation of 18 U.S.C. § 2252(a)(2). Ramirez remains in federal custody pending a detention hearing set for February 16, 2023, at 10:30 a.m. before, U.S. Magistrate Judge Donna M. Ryu.
A complaint merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces a statutory minimum of 5 years’ and a maximum sentence of 20 years’ imprisonment. Ramirez also faces an additional term of supervised release, restitution, and additional financial assessments; however, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Kelly Volkar of the Oakland Branch of the United States Attorney’s Office is prosecuting the case, with the assistance of Leeya Kekona. The prosecution is the result of an investigation by Homeland Security Investigations and the Contra Costa Sherriff’s Office.
Concord Resident Responsible for Teen’s Fentanyl Poisoning Death Sentenced to Eight Years in PrisonRead the Press Release
OAKLAND – Alejandro Valentino Urias was sentenced today to 96 months in prison after admitting he supplied a fentanyl-laced counterfeit M30 pill that caused the overdose death of a 14-year-old girl, announced U.S. Attorney Stephanie M. Hinds and Drug Enforcement Administration (DEA) Acting Special Agent in Charge Bob P. Beris. The sentence was handed down by the Hon. Yvonne Gonzalez Rogers, United States District Judge.
Urias, 22, of Concord, Calif., pleaded guilty to a single charge of distribution of fentanyl on July 21, 2022. According to his plea agreement, on August 20, 2021, Urias sold two light blue counterfeit “M30” pills containing fentanyl to a minor teenage girl in the parking lot of a commercial plaza near Concord High School. The minor teenage girl then gave one of the pills to a second teenager—identified in court documents only as “Victim 1.” Victim 1 ingested one-half of the fentanyl-laced pill, which caused her to fatally overdose. Victim 1’s father discovered her the next morning. Victim 1 was 14-years-old at the time of her death.
Urias admitted in his plea agreement that he continued to sell counterfeit M30 pills following Victim 1’s death. Indeed, four days later, on August 25, 2021, Urias sold roughly 150 counterfeit M30 pills to an undercover DEA agent for $950. The defendant acknowledged in his plea agreement that the pills he sold to the agent were tested at a DEA laboratory and found to contain fentanyl.
In addition to the prison term, Judge Gonzalez Rogers ordered Urias to serve 36 months of supervised release that will begin after the conclusion of Urias’s prison term. Urias has been in custody since his arrest on September 8, 2021, and will begin serving his prison term immediately.
This investigation and prosecution are part of the Organized Crime Drug Enforcement Task Force (“OCDETF”), which identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
One Pill Can Kill: Beware of pills bought on the street: One Pill Can Kill. Fentanyl, a Schedule II controlled substance, is a highly potent opiate that can be diluted with cutting agents to create counterfeit pills that purport to mimic the effects of Oxycodone, Percocet, and other drugs, but can be obtained at a lower cost. However, very small variations in the amount or quality of fentanyl create huge effects on the potency of the counterfeit pills and can easily cause death. Fentanyl has now become the leading cause of drug overdose deaths in the United States. Counterfeit, fentanyl-laced pills are usually shaped and colored to resemble pills that are sold legitimately at pharmacies. For example, the counterfeit pills involved in this case, known as M30s, mimic Oxycodone, but when sold on the street they routinely contain fentanyl. These tablets are round and often light blue in color, though they may be made in many colors, and have “M” and “30” imprinted on opposite sides of the pill.
Assistant U.S. Attorney Daniel Pastor is prosecuting the case, with the assistance of Andy Ding. The prosecution is the result of an investigation by the DEA with assistance of the Concord Police Department.
Berkeley Resident Sentenced to Four Years in Prison in Tenderloin Fentanyl Distribution SchemeRead the Press Release
SAN FRANCISCO – David Ordonez was sentenced to 48 months in prison for his role in a scheme to distribute fentanyl and methamphetamine in the Tenderloin District of San Francisco, announced United States Attorney Stephanie M. Hinds and Drug Enforcement Administration (DEA) Acting Special Agent in Charge Bob P. Beris. The sentence was handed down by the Honorable William H. Orrick, United States District Judge.
Ordonez, 20, of Berkeley, California, pleaded guilty to the charges on September 19, 2022. According to his plea application, Ordonez admitted he was guilty of conspiring to distribute fentanyl and distributing fentanyl and methamphetamine on multiple occasions in San Francisco’s Tenderloin neighborhood.
The government’s sentencing memorandum describes three separate sales, on February 9, February 24, and March 9, 2022, in which Ordonez sold drugs to an undercover officer working with the DEA and the San Francisco Police Department. The government argued that each of the transactions happened in the Tenderloin and in violation of state stay-away orders against Ordonez. The government argued that Ordonez sold the undercover officer around 59 grams of fentanyl and 30 grams of methamphetamine in exchange for $1,200 on February 24, 2022. The government also argued in its sentencing memorandum that Ordonez sold the same undercover officer around 28 grams of fentanyl and 71 grams of methamphetamine in exchange for $1,000 on March 10, 2022, after telling the undercover officer in a text message the day before the deal that Ordonez had “good” fentanyl. The government further argued that at his arrest in Berkeley on April 19, 2022, Ordonez ran from the police with a backpack containing around 1,118.8 grams—nearly 2.5 pounds—of fentanyl and around 98 grams of methamphetamine, along with other illegal drugs.
In his plea application, Ordonez admitted to conspiring with another person to work to sell more than 40 grams of fentanyl from February 9, 2022, to the date of his arrest on April 19, 2022. Ordonez also admitted to traveling to the area near 7th and Market Streets in San Francisco’s Tenderloin neighborhood, where he sold more than 40 grams of fentanyl to an undercover agent on February 24, 2022, and more than 50 grams of methamphetamine on March 10, 2022. Ordonez admitted that on April 19, 2022, he ran from police, dropping his backpack, which contained more than 40 grams of fentanyl. In its sentencing memorandum, the government argued that physical surveillance and cell phone data showed that Ordonez and his brother, Juan Carlos Hernandez-Ordonez, routinely travelled together from their shared apartment in Berkeley into the Tenderloin before their April 2022 arrests. The government argued that the location data supported the inference that Ordonez made a living selling fentanyl on a regular basis at particular times of day and night in the Tenderloin.
On May 3, 2022, a federal grand jury handed down an indictment charging Ordonez with one count of conspiracy to possess with intent to distribute 40 grams and more of fentanyl, in violation of 21 U.S.C. §§ 846, 841(a)(1) and (b)(1)(B)(vi), two counts of possession with intent to distribute and distribution of 40 grams and more of fentanyl, in violation of 21 U.S.C. §§ 841(a)(1) and (b)(1)(B)(vi), and one count of possession with intent to distribute and distribution of 50 grams and more of a mixture and substance containing methamphetamine, in violation of 21 U.S.C. §§ 841(a)(1) and (b)(1)(B)(viii). Ordonez pleaded guilty to each of these counts. In addition to the prison term of 48 months, Judge Orrick also ordered Ordonez to serve four years of supervised release to begin after his prison term. Ordonez has been detained since his arrest and will begin serving his sentence immediately.
On September 29, 2022, Ordonez’s brother, Juan Carlos Hernandez Ordonez, pleaded guilty to count four of the indictment, charging him with possession with intent to distribute and distribution of 40 grams and more of fentanyl, in violation of 21 U.S.C. §§ 841(a)(1) and (b)(1)(B)(vi). On January 12, 2023, Judge Orrick sentenced Hernandez-Ordonez to a prison term of 18 months, followed by four years of supervised release.
Assistant U.S. Attorney Lauren Harding is prosecuting the case with the assistance of Jasmine Sanders and Amala James. The prosecution is the result of an investigation by DEA and the San Francisco Police Department.
One Pill Can Kill: Beware of pills bought on the street: One Pill Can Kill. Fentanyl, a Schedule II controlled substance, is a highly potent opiate that can be diluted with cutting agents to create counterfeit pills that purport to mimic the effects of Oxycodone, Percocet, and other drugs, but can be obtained at a lower cost. However, very small variations in the amount or quality of fentanyl creates huge effects on the potency of the counterfeit pills and can easily cause death. Fentanyl has now become the leading cause of drug overdose deaths in the United States. Counterfeit, fentanyl-laced pills are usually shaped and colored to resemble pills that are sold legitimately at pharmacies. For example, counterfeit pills known as M30s mimic Oxycodone, but when sold on the street they routinely contain fentanyl. These tablets are round and often light blue in color, though they may be made in many colors, and have “M” and “30” imprinted on opposite sides of the pill.
Former Correctional Officer Sentenced to 20 Months in Prison for Abusive Sexual Contact with InmateRead the Press Release
OAKLAND – Enrique Chavez was sentenced today to 20 months in prison for having abusive sexual contact with a female prison inmate while he was employed as a correctional officer at the Federal Correctional Institute Dublin (FCI Dublin) in Alameda County. The sentence was handed down by Hon. Yvonne Gonzalez Rogers, United States District Judge.
Chavez, 50, formerly of Manteca, California, pleaded guilty to the charge on October 27, 2022. Chavez was employed in October 2020 as a correctional officer at FCI Dublin. FCI Dublin is a correctional institution operated by the Federal Bureau of Prisons that houses female prisoners. According to his plea agreement, Chavez admitted that during October 2020 he met a female prisoner— identified only as Victim 1 in the plea agreement—in the food service pantry at FCI Dublin. Chavez acknowledged that Victim 1 was in detention at FCI Dublin and that she was under Chavez’s supervision and disciplinary authority at the time. After they met in the pantry, Chavez locked the door and the lights were turned off. Chavez admitted that he put his hand inside Victim 1’s underwear and touched her genitals; Chavez also admitted he touched the victim’s breasts.
A federal grand jury indicted Chavez on March 10, 2022, charging him with two counts of abusive sexual contact, in violation of 18 U.S.C. § 2244(a)(4). Chavez pleaded guilty to one of the counts. Judge Gonzalez Rogers dismissed the remaining count during the sentencing hearing.
In addition to the prison term, Judge Gonzalez Rogers also ordered the defendant to serve ten years of supervised release to begin after the prison term. Judge Gonzalez Rogers ordered the defendant to surrender on or before April 7, 2023, to begin serving his prison term.
U.S. Attorney Stephanie M. Hinds, DOJ Office of the Inspector General Los Angeles Field Office Special Agent in Charge Zachary Shroyer, and FBI Special Agent in Charge Robert K. Tripp made the announcement.
Assistant U.S. Attorneys Andrew Paulson and Molly K. Priedeman are prosecuting the case, with the assistance of Kay Konopaske and Leeya Kekona. The prosecution is the result of an investigation by the DOJ Office of the Inspector General and the FBI.Oakland Resident Sentenced to Four Years in Prison for Role in Tenderloin Fentanyl and Methamphetamine Distribution SchemeRead the Press Release
SAN FRANCISCO – Dixis Archaga-Reyes, a/k/a Pepe, was sentenced today to 48 months in prison for his role in a scheme to distribute fentanyl and methamphetamine near the Tenderloin District of San Francisco, announced United States Attorney Stephanie M. Hinds and Drug Enforcement Administration (DEA) Acting Special Agent in Charge Bob P. Beris. The sentence was handed down by the Hon. Charles R. Breyer, Senior United States District Judge.
Archaga-Reyes, 27, of Oakland, pleaded guilty to the charges on September 21, 2022. According to his plea agreement, Archaga-Reyes admitted he was guilty of four counts of distributing drugs near the Tenderloin District of San Francisco.
The plea agreement describes transactions in which Achaga-Reyes sold, or attempted to sell, drugs to an undercover Task Force Officer working with the DEA and the San Francisco Police Department. The transactions occurred on December 22, 2021, and February 17, 2022. Specifically, Archaga-Reyes admitted that on December 22, 2021, he used text messages to communicate with the officer and agreed to sell to him two ounces of fentanyl for $1,000 and two ounces of methamphetamine for $500. Archaga-Reyes acknowledged that he agreed with the officer to conduct the transaction near the intersection of 7th and Mission Streets in San Francisco. Archaga-Reyes met with the officer on the evening of December 22 on 7th Street just north of Minna Alley, got into the passenger side of the vehicle the undercover officer was driving, and received $1,500 in cash from the officer. Archaga-Reyes then handed the officer numerous clear plastic bags containing approximately 61.1 grams of fentanyl and approximately 59 grams of methamphetamine.
Similarly, Archaga-Reyes admitted that on February 17, 2022, he coordinated with the same undercover officer to sell to him fentanyl and methamphetamine. The two agreed to complete the transaction near 7th and Minna Streets on the afternoon of February 17. At about 1:42 p.m., Archaga-Reyes contacted the undercover officer by text message to let the officer know Archaga-Reyes was on his way into San Francisco. This time, as Archaga-Reyes exited his apartment in Oakland, he was arrested. Archaga-Reyes admitted that when he was arrested, he was carrying a plastic bag containing over 500 grams of methamphetamine. Agents also found in Archaga-Reyes’s car an additional 90.5 grams of fentanyl, and in his apartment over 130 grams of fentanyl, more than 37 grams of cocaine, and $2,759 in cash that Archaga-Reyes acknowledged was the proceeds of illicit sales of illegal drugs.
On March 2, 2022, a federal grand jury handed down a four-count indictment charging Archaga-Reyes with two counts of possession with intent to distribute and distribution of 5 grams and more of methamphetamine, in violation of 21 U.S.C. § 841(a)(1) and (b)(1)(B)(viii) and two counts of possession with intent to distribute and distribution of 40 grams and more of fentanyl, in violation of 21 U.S.C. § 841(a)(1) and (b)(1)(B)(vi). Pursuant to his plea agreement, Archaga-Reyes pleaded guilty to all four counts.
In addition to the prison term, Judge Breyer also ordered Archaga-Reyes to serve four years of supervised release to begin after his release from prison. Archaga-Reyes has been detained since his arrest and will begin serving his sentence immediately.
Assistant U.S. Attorney Andrew Paulson is prosecuting the case with the assistance of Soana Katoa, Leeya Kekona, and Mark DiCenzo. The prosecution is the result of an investigation by DEA and the San Francisco Police Department.
Former Bank Vice President Sentenced to Fifteen Months in Prison After Falsifying Documents in Hopes of Attaining Leniency from Federal JudgeRead the Press Release
SAN JOSE– Former Silicon Valley Bank vice president Mounir Gad was sentenced today to fifteen months in prison after having submitted several falsified letters of reference in connection with his sentencing for a previous securities fraud conviction, announced U.S. Attorney Stephanie M. Hinds and Federal Bureau of Investigation Special Agent in Charge Robert K. Tripp. Today’s sentence was handed down by the Hon. Edward J. Davila, United States District Judge.
Gad, 36, of Los Gatos, pleaded guilty to the document-falsification-related charges on October 27, 2022. In pleading guilty, Gad acknowledged he previously had been charged with, and pleaded guilty to, securities fraud violations in connection with an insider trading scheme. The securities case involved Gad’s decision as a trained investment banking professional to violate insider trading laws on two occasions. Gad made a federal court appearance on November 3, 2021, before United States District Judge Lucy H. Koh to be sentenced for his securities fraud crimes. At that time, Gad argued he should not be sent to prison, and instead should be sentenced only to probation, in part because “[Gad’s] friends and family—including his ex-fiancée—all roundly attest to Mr. Gad’s strength of character, loyalty, and dedication to his community.” In support of this argument, Gad submitted twelve letters of reference. Gad now acknowledges that six of the twelve letters he submitted to the judge in connection with his November 3, 2021, sentencing were not authentic. With respect to three of the letters, Gad made changes to the versions he had received from his references before submitting them to the court, without the references’ knowledge or permission. With respect to the three others, Gad submitted them on behalf of individuals who had not written any support letter in connection with his sentencing—two of the letters were written for reasons having nothing to do with the sentencing and were altered by Gad before they were submitted, and one, purportedly written by his ex-fiancée, was written by Gad in its entirety without the knowledge or permission of the purported author.
The inauthenticity of the letters came to light after Gad’s November 3, 2021, sentencing hearing. At the hearing, Judge Koh described on the record her thoughts regarding a story from a falsified portion of a letter—a letter purportedly written from someone who attended the hearing. The purported author later informed Gad’s attorney that she had not written the information that Judge Koh referenced at the hearing. A subsequent hearing took place on November 10, 2021, at which Judge Koh explained that the portions of the letter she found very compelling were “lies that Mr. Gad put in the letter.” Still, Gad did not admit during the November 10, 2021, hearing that six of his twelve reference letters were, in fact, falsified. Instead, he stated to Judge Koh, “I promise you, Your Honor, that was the only one. Every other letter is as it is.” A subsequent investigation revealed this statement was untrue.
On January 13, 2022, a federal grand jury indicted Gad, charging him with three counts of tampering with documents, in violation of 18 U.S.C. § 1512(c)(1); three counts of tampering, in violation of 18 U.S.C. § 1512(c)(2); six counts of identity theft, in violation of 18 U.S.C.§ 1028(a)(7) and (b)(2)(B); and one count of criminal contempt, in violation of 18 U.S.C. § 401(1). Gad pleaded guilty to all the charges without a plea agreement.
In addition to the prison term, Judge Davila also ordered Gad to serve thirty-six months of supervised release and imposed a $10,000 fine and a $1,300 special assessment. Judge Davila ordered Gad to surrender on or before May 24, 2023 to begin serving his prison term.
Special Assistant U.S. Attorney E. Wistar Wilson and Assistant U.S. Attorneys John Bostic and Sarah E. Griswold are prosecuting this case with assistance from Veronica Hernandez, Lynette Dixon, and Susan Kreider. The case is being investigated by the FBI.
Orinda Man Sentenced to 40 Months for Bank Fraud, Wire Fraud, Money LaunderingRead the Press Release
SAN FRANCISCO – Alan Safahi was sentenced today to 40 months in federal prison following fraud and money laundering convictions arising from a fraudulent prepaid debit card scheme which created $2.7 million in unfunded liabilities, announced United States Attorney Stephanie M. Hinds and Internal Revenue Service-Criminal Investigation (IRS-CI) Special Agent in Charge Darren Lian.
Safahi, 62, of Orinda, was convicted on June 30, 2022, following a four week bench trial before Senior United States District Judge Susan Illston. In a 39-page order, Senior U.S. District Judge Illston found Safahi guilty of one count of bank fraud, four counts of wire fraud, and one count of money laundering. As detailed in the court order, Safahi developed an elaborate fraud scheme in which he collected money from clients to buy prepaid debit cards and, while accurately reporting the cards’ balances to his clients, he in turn used a “funding on demand” scheme to defraud the bank that supported his cards. In Safahi’s scheme, legitimate clients paid Safahi’s company CardEx in full for prepaid debit cards, but Safahi reported to the bank only the amount that the clients had spent on the card as the card’s “balance.” He fraudulently diverted to himself the remaining balance of the card’s value. As an example, a client of Safahi’s company CardEx would buy a prepaid debit card for $100 and then spend $10 of that $100 balance. Safahi’s fraudulent “funding on demand” system would report to the bank the “balance” of that card as $10 instead of $100. In this example, Safahi’s fraud scheme allowed him access to the additional $90. Using the scheme, Safahi fraudulently appropriated unspent funds for scores of such pre-paid cards.
Safahi’s fraud scheme unraveled on September 25, 2014. On that day, as Safahi was shutting down his CardEx business, he directed an employee to provide the accurate balances of the prepaid debit cards to the bank. According to the evidence, Safahi had earlier reported to the bank a false total balance of $93,734 on the cards that he had sold. The true total balance on the cards reported to the bank that day was $2,774,953. The difference was nearly $2.7 million in unfunded liability.
Evidence showed that Safahi had appropriated the fraud scheme’s proceeds for, among other things, purchasing an Orinda home. Just two days before reporting the true total balance of all the cards to the bank, Safahi issued an $80,000 cashier’s check to himself from his company’s account that, along with other fraudulently obtained funds, he used to purchase the Orinda house. The transaction provided the basis for his money laundering conviction.
In a sentencing memo filed for today’s hearing, the government described that Safahi tricked both his bank and his clients. His clients entrusted their customers’ money to him, having been misled to believe it was protected and secure. Through lies and his fraudulent “funding on demand” scheme, Safahi also misled his bank. Safahi then profligately spent the fraud proceeds to fund a lavish lifestyle, to pay previous debts, and to purchase the expensive Orinda home.
In addition to the 40 months imprisonment, Senior U.S. District Judge Illston imposed a $100,000 fine on Sahafi and ordered three years of supervision of him following his release from prison. Safahi was ordered to surrender on May 4, 2023, to begin serving his prison sentence. A hearing to determine the amount of Safahi’s restitution obligation is set for March 31.
Robert David Rees and Benjamin Kurtis Kleinman are the Assistant U.S. Attorneys who prosecuted the case, with the assistance of Llessica Chan Fierro, Veronica Hernandez, Olivia Hawkins, Leeya Kekona, and Karina Ruiz. The prosecution is the result of an investigation by IRS-CI.
Drug Organization Dispatcher Sentenced to Seven Years for Trafficking MethamphetamineRead the Press Release
SAN JOSE – Raul Jimenez-Verduzco was sentenced today to 84 months in federal prison for conspiring to distribute and to possess with the intent to distribute more than 500 grams of methamphetamine, announced United States Attorney Stephanie M. Hinds and Drug Enforcement Administration (DEA) Acting Special Agent in Charge Bob P. Beris. The sentence was handed down by United States District Judge Beth L. Freeman.
Jimenez-Verduzco, 24, a resident of San Jose and Milpitas, pleaded guilty on November 1, 2022. In his plea agreement, he admitted that from October 2020 to October 2021 he worked with a drug trafficking organization to distribute large amounts of controlled substances. In total, he conspired to distribute 198 pounds of methamphetamine, 10 pounds of heroin, and 40 pounds of cocaine. According to the government’s sentencing memorandum, the values of these drugs approximated $495,000 of methamphetamine, $63,000 of heroin, and $540,000 of cocaine.
Jimenez-Verduzco acted principally as a dispatcher who took phone orders from the drug trafficking organization’s customers and contacted couriers to deliver the drugs to the customers. He described that he engaged in hundreds of calls each week with customers ordering drugs and with couriers who he directed to deliver the drugs.
Jimenez-Verduzco admitted in his plea agreement that he also performed other tasks for the drug trafficking organization. For example, he kept drug shipments in his apartment until a co-conspirator could take the drugs to a larger stash house. He picked up money from customers and delivered it to another co-conspirator in charge of money handling. He also delivered drugs to customers. For these tasks, he was paid a weekly salary.
In his plea agreement, Jimenez-Verduzco described multiple drug deliveries that he made. On October 20, 2020, he met with a customer who was, unbeknownst to Jimenez-Verduzco, an undercover law enforcement agent. He delivered three ounces of pure methamphetamine and one ounce of heroin to the undercover agent. On August 18, 2021, Jimenez-Verduzco delivered drugs to a man parked in front of a parking complex on Harvard Avenue in Santa Clara. Jimenez-Verduzco put a trash bag containing 20 kilograms (44 pounds) of methamphetamine into the man’s car. Law enforcement officers stopped the car minutes later and seized the drugs. Lab testing determined the methamphetamine was 96% pure.
On October 21, 2021, Jimenez-Verduzco was arrested when a Santa Clara deputy sheriff conducted a traffic stop on the car he was driving in alone. Jimenez-Verduzco had $4,000 in cash with him and, inside a backpack on the front passenger’s seat, a pound of methamphetamine. Officers also found a cardboard box in the car’s trunk containing 19 pounds of methamphetamine along with heroin. Jimenez-Verduzco admitted in his plea agreement that he intended to distribute these drugs.
In addition to 84 months imprisonment, U.S. District Judge Freeman ordered three years of supervision of Jimenez-Verduzco following his release from prison. Jimenez-Verduzco was in custody at the sentencing hearing and begins serving his sentence immediately.
Assistant U.S. Attorneys Joseph Tartakovsky, Lina Peng, and Ross E. Weingarten prosecuted the case with the assistance of Laurie Worthen. The prosecution is the result of an investigation by DEA, the Santa Clara Police Department, the Santa Clara County Sheriff’s Office, and the San Jose Police Department.
This prosecution is part of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
Alameda County Resident Sentenced to Five Years in Prison for Conspiring to Sell MethamphetamineRead the Press Release
SAN FRANCISCO – Ernesto Madrigal, a/k/a Tiger, a/k/a Tigre, was sentenced to serve 60 months in federal prison for his part in a methamphetamine distribution conspiracy, announced United States Attorney Stephanie M. Hinds and Drug Enforcement Administration (DEA) Acting Special Agent in Charge Bob P. Beris. The sentence was handed down by United States District Judge James Donato.
Madrigal, 28, formerly of Alameda County, pleaded guilty to the charge on May 9, 2022. According to his plea agreement, Madrigal admitted that in early March of 2020, he offered to sell a pound of methamphetamine to a person he believed to be a customer. Madrigal used his telephone and text messages to arrange for the transaction. Specifically, on March 5, 2020, Madrigal sent a text message to the informant with information regarding a meeting for the transaction. Further, prior to the transaction, Madrigal provided the informant with the phone number of another individual who Madrigal said would be delivering the drugs on his behalf. Madrigal also told the informant over the phone that the courier would arrive at a prearranged location in Emeryville, Calif. on March 6, 2020. Madrigal told the informant that the courier would arrive with five pounds of methamphetamine and that he would separate out one pound of the drugs for the sale. The informant and an undercover officer met with the courier on March 6, 2020. The courier provided over 1,350 grams of a substance containing methamphetamine in exchange for $1,250.
In addition to the sale of the drugs on March 6, 2020, Madrigal also acknowledged that he asked the informant whether he was interested in purchasing counterfeit pills for sale and offered to provide the informant with 10 pounds of methamphetamine so that the informant could sell the drugs and provide a portion of the proceeds to Madrigal. On April 24, 2020, Madrigal arranged another sale with the informant for 250 counterfeit pills laced with fentanyl.
A federal grand jury indicted Madrigal on April 29, 2021, charging him with conspiracy to distribute and possess with intent to distribute methamphetamine, in violation of 21 U.S.C. §§ 846, 841(a)(1) and (b)(1)(C). Madrigal pleaded guilty to the charge.
In addition to the prison term, Judge Donato ordered Madrigal to serve three years of supervised release following his release from prison. Madrigal was in custody at his sentencing hearing and will begin serving his sentence immediately.
Assistant U.S. Attorneys Ross Weingarten and Joseph Tartakovsky prosecuted the case, with the assistance of Linda Love. The prosecution is the result of an investigation by DEA.
This investigation and prosecution are part of the Organized Crime Drug Enforcement Task Force (“OCDETF”), which identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
Mill Valley Man Sentenced to More Than Three Years for Unlicensed Firearms TraffickingRead the Press Release
SAN FRANCISCO – James William Palmer was sentenced today to 37 months in federal prison for dealing firearms without a license, announced United States Attorney Stephanie M. Hinds and Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) Acting Special Agent in Charge Joshua E. Jackson. The sentence was handed down by United States District Judge James Donato.
Palmer, 38, of Mill Valley, pleaded guilty on August 15, 2022. In his plea agreement, he admitted that from May 2020 to January 2021 he engaged in the business of manufacturing and selling firearms. He acknowledged that he ran the business for profit and without a license, knowing it was unlawful to do so. Palmer described that he manufactured firearms at his Mill Valley home, where he maintained an area in his garage for firearms manufacturing and had on hand numerous tools and parts necessary to do so. He admitted in his plea agreement that he also sold marijuana during this time period.To run his firearm business, Palmer communicated with buyers and sellers of firearms via text messages in which firearm prices, meeting places for transactions, and amounts owed were discussed. He utilized a white board to write down customer names and numbers along with amounts owed or paid by customers. As an example of his firearms sales, Palmer described in his plea agreement his October 2020 sale of a Glock 17 semi-automatic pistol to a customer for $780.
Palmer also described that on January 27, 2021 – the day of his arrest – he was driving his car and had a loaded Glock Model 26 .45 ACP caliber semi-automatic pistol in the car, with two loaded .45 caliber magazines in the center console and ammunition in his pants pocket. He bought the Glock pistol for $900 at a gun show, paying a higher price to avoid paperwork and to get the handgun immediately.
Palmer further admitted that on the day of his arrest he had multiple firearm receivers in various stages of handgun construction in his garage. In a memo filed for the sentencing hearing, the government described that Palmer had 71 items connected to firearms manufacturing and dealing at his Mill Valley residence. In addition to the firearm receivers, Palmer had privately manufactured firearm (PMF) jigs, firearms parts, assorted ammunition, a Glock pistol frame with its serial number plate removed, standard and high-capacity magazines for various calibers, and multiple tools for firearms manufacturing. Palmer also had a loaded P80 .45 caliber Glock-style semi-automatic handgun in the garage.
The government also described some of the texts in which Palmer communicated with firearms buyers and sellers about prices, locations for exchanges, and amounts owed. In one text, Palmer said, “What about getting that 17 so I can resume business? I got 6 people waiting.” In another, Palmer wrote that he had been dealing in firearms in Marin County “for 20 years off and on.”
In addition to the 37 months imprisonment, U.S. District Judge Donato imposed three years of supervision for Palmer following his release from prison. Palmer was ordered to surrender on February 6, 2023, to begin serving his sentence.
Assistant U.S. Attorneys Ilham A. Hosseini and Alexis J. James prosecuted the case with the assistance of Maribel Gallegos. The prosecution is the result of an investigation by ATF and the Marin County Sheriff’s Office.
This case follows the U.S. Department of Justice’s launch in five key regions of Cross-Jurisdictional Firearms Trafficking Strike Forces that are focused on disrupting illegal firearms trafficking. One of the five Strike Forces was launched here, in the San Francisco Greater Bay Area and Sacramento Region. The Strike Force identifies sources of illegally trafficked firearms and disrupts straw purchasing as well as firearms trafficking networks by collaborating in cross-jurisdictional efforts that include multiple federal agencies and multiple states and their local law enforcement agencies.
David J. Miller and Minnesota Independent Cooperative, Inc., Convicted in Multi-Million-Dollar Prescription Drug Diversion SchemeRead the Press Release
SAN FRANCISCO – A federal jury convicted David Jess Miller and his company, Minnesota Independent Cooperative (“MIC”), of a wide array of charges relating to the unlicensed and fraudulent distribution of prescription drugs, announced United States Attorney Stephanie M. Hinds; Federal Bureau of Investigation Special Agent in Charge Robert K. Tripp; Internal Revenue Service, Criminal Investigation (IRS-CI), Special Agent in Charge of the Oakland Field Office Darren Lian; U.S. Postal Inspection Service (USPIS) Pittsburgh Division Inspector in Charge Lesley Allison; and U.S. Food and Drug Administration Office of Criminal Investigations (FDA-OCI) Special Agent in Charge of the Metro Washington Field Office George A. Scavdis. The verdicts were handed down after a two-week trial before the Hon. Charles R. Breyer, Senior U.S. District Judge.
“The health and safety of American patients are critical, and Americans are entitled to trust that the prescription drugs they take are safe,” said U.S. Attorney Hinds. “Those who undermine the safety of the prescription drug supply chain for their own gain by laundering diverted drugs put those patients at risk, and they will be prosecuted.”
“FDA is responsible for oversight of the prescription drug supply chain; when criminals breach the security around that chain, patients can no longer be assured of the safety or effectiveness of the stolen drugs that are returned illegally to the legitimate supply pipeline,” said Special Agent in Charge Scavdis. “We will continue to pursue and bring to justice those who would put the public health at risk through their criminal actions.”
“When medical practitioners prescribe and patients receive medication, their focus should be on the effectiveness of the medication for the intended treatment and not the authenticity or legitimacy of the pills they get from pharmacies. The speedy guilty verdict shows the community’s intolerance of those who betray this basic trust in our healthcare system for greed and personal enrichment. IRS Criminal Investigation is committed to work with our law enforcement partners to dismantle and disrupt these criminal schemes and to instill trust and confidence in the system,” said Special Agent in Charge Lian. “I truly commend the case agents and the trial team who worked tirelessly on this case to bring justice to light.”
"The illegal conduct of David Miller was reprehensible," said FBI Special Agent In Charge Robert Tripp. "He and his co-conspirators undermined safeguards designed to protect the public, reintroduced diverted prescription drugs into the supply chain, and compromised patient safety for personal gain.”
The trial was the result of indictments filed in two separate districts—the Northern District of California and the Southern District of Ohio. The convictions included charges handed down in a second superseding indictment by a grand jury in the Northern District of California on February 11, 2016, and by a separate indictment handed down on May 6, 2015, in the Southern District of Ohio. Both indictments involved additional defendants and charges that were not presented at the trial.
The evidence at trial established that Miller, 58, of Santa Ana, Calif., was at the center of a vast racketeering enterprise responsible for the fraudulent distribution of hundreds of millions of dollars’ worth of diverted prescription drugs, including instances in which Miller and his co-conspirators distributed tampered medication that posed a health risk to consumers. The scheme targeted brand-name prescription drugs designed to treat HIV, hepatitis C, mental disorders, and various other serious conditions. Miller and MIC lied to their customers about the nature and sources of the prescription drugs being sold, falsely claiming that the drugs had been maintained in the safe, federally and state-regulated supply chain. The evidence at trial established that Miller and his company agreed with many others, including Mihran Stepanyan, 37, and Artur Stepanyan, 45, to conduct the affairs of their wide-ranging and long-lasting criminal enterprise. The evidence established that the enterprise, operating primarily out of Southern California and Minnesota, was responsible for distributing diverted prescription drugs to unsuspecting pharmacies throughout the county. In finding Miller guilty, the jury concluded that he played a role in promoting the racketeering conspiracy. For example, as the owner and operator of MIC between 2007 and 2015, Miller bought approximately $157 million of diverted prescription drugs from codefendants Mihran Stepanyan and Artur Stepanayan. Miller and MIC also knew that the Stepanyans were not licensed to sell prescription drugs and that the Stepanyans procured their drugs from street suppliers. Miller and MIC nevertheless purchased the diverted drugs from the Stepanyans and lied to their customers about the sources and nature of those drugs.
Further, the jury concluded Miller engaged in a money laundering conspiracy. The evidence established that Miller and others laundered hundreds of millions of dollars between approximately 2007 and 2015 to promote their criminal activities and to conceal the nature of their scheme. For example, to hide the fact Miller was paying the Stepanyans for the illegally sourced drugs they were distributing, Miller made payments to the Stepanyans’ company GC National Wholesale through companies in Puerto Rico he controlled. As to another supplier, Miller authorized payments to accounts held in the names of various front companies at banks in multiple countries. In this way, Miller and his co-conspirators sought to obscure the illicit sources of MIC drugs and to conceal the true identities of the suppliers.
In sum, at the conclusion of the trial, Miller was convicted of one count of racketeering conspiracy, in violation of 18 U.S.C. § 1962(d); one count of conspiracy to commit mail, wire, and bank fraud, in violation of 18 U.S.C. § 1349; one count of conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h); ten counts of mail fraud, in violation of 18 U.S.C. § 1341; and one count of conspiracy to engage in the unlicensed wholesale distribution of drugs and making false statement to the FDA, in violation of 21 U.S.C. §§ 331(t), 333(b)(1)(D), 353(e)(2)(A), and 18 U.S.C. § 371.
Miller remains out of custody pending sentencing. Miller faces a maximum statutory term of life in prison; however, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The Stepanyans and 38 other defendants have pleaded guilty to their respective roles in the conspiracies.
Assistant United States Attorneys Claudia Quiroz, Andrew Dawson, and Chris Kaltsas are prosecuting the case with the assistance of Kevin Costello. The prosecution is the result of an investigation by the FBI, the IRS, the FDA, and USPIS. The United States Attorney’s Office notes the extraordinary contributions and commitment of IRS-CI Special Agent Bryan Wong in this case.
Former Energy Company Executive Sentenced for $15 Million Investment FraudRead the Press Release
A California man was sentenced today to five years in prison for defrauding investors of more than $15 million in connection with a scheme to misappropriate investor funds for his own personal use.
Joey Stanton Dodson, 58, formerly of Indio, pleaded guilty in the Northern District of California to one count of wire fraud on June 14, 2022.
According to court documents, between November 2012 and May 2015, Dodson engaged in a scheme to defraud investors while serving as the executive chairman and managing partner of Citadel Energy (Citadel), which purported to provide fluid-management services to oil and gas companies. In his role, Dodson was responsible for raising funds, controlling the bank accounts, and disseminating financial information to investors for three limited partnerships affiliated with Citadel. As part of the scheme, Dodson made materially false and misleading representations and omissions to prospective and existing investors about the intended use of investor funds, the status of a potential acquisition by a private-equity firm, and Dodson’s own compensation.
After inducing victims to invest, Dodson pooled the funds from the limited partnerships and conducted multiple transfers between Citadel-related accounts in order to divert investor funds for his own benefit and to conceal his actions. In total, Dodson fraudulently raised over $15.6 million from more than 50 investors and misappropriated $1.3 million in investor funds, which he used to pay for his personal expenses and to repay earlier investors in unrelated entities known collectively as Duke Equity. After Dodson’s misappropriation was discovered, the limited partnerships were placed into bankruptcy and the investors suffered a total loss of their investments.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, U.S. Attorney Stephanie M. Hinds for the Northern District of California, and Special Agent in Charge Robert R. Tripp of the FBI San Francisco Field Office made the announcement.
The FBI San Francisco Field Office investigated the case.
Trial Attorney Theodore M. Kneller of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Sarah Griswold and Marissa Harris for the Northern District of California prosecuted the case.
Former Energy Company Executive Sentenced to Five Years in Prison for $15 Million Investment FraudRead the Press Release
SAN JOSE – Joey Stanton Dodson was sentenced today to five years in prison for defrauding investors of more than $15 million in connection with a scheme to misappropriate investor funds for his own personal use. The sentence was handed down by the Hon. Beth Labson Freeman, U.S. District Judge.
Dodson, 58, formerly of Indio, pleaded guilty to one count of wire fraud on June 14, 2022. According to court documents, Dodson engaged in a scheme between November 2012 and May 2015 to defraud investors while serving as the executive chairman and managing partner of Citadel Energy Partners, which purported to provide fluid-management services to oil and gas companies. In his role, Dodson was responsible for raising funds, controlling the bank accounts, and disseminating financial information to investors for three limited partnerships: Fort Berthold Water Partners L.P., Citadel Watford City Disposal Partners L.P., and H20 Partners L.P. As part of the scheme, Dodson made materially false and misleading representations and omissions to prospective and existing investors about the intended use of investor funds, the status of a potential acquisition by a private-equity firm, and Dodson’s own compensation.
After inducing victims to invest, Dodson pooled the funds from the limited partnerships and conducted multiple transfers between Citadel-related accounts to divert investor funds for his own benefit and conceal his actions. In total, Dodson fraudulently raised over $15.6 million from more than 50 investors and misappropriated $1.3 million in investor funds, which he used to pay for his personal expenses and to repay earlier investors in an unrelated entity known as Duke Equity. After Dodson’s misappropriation was discovered, the limited partnerships were placed into bankruptcy and the investors suffered a total loss of their investments.
In addition to the prison term, Judge Freeman also ordered Dodson to serve three years supervised release and to pay restitution in the amount of $15,636,392.
U.S. Attorney for the Northern District of California Stephanie M. Hinds, Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, and Special Agent in Charge Robert R. Tripp of the FBI San Francisco Field Office made the announcement.The FBI San Francisco Field Office investigated the case.
Assistant U.S. Attorneys Sarah Griswold and Marissa Harris for the Northern District of California and Trial Attorney Theodore M. Kneller of the Criminal Division’s Fraud Section prosecuted the case.
Oakland Resident Sentenced to Three Years for Selling Fentanyl and Methamphetamine in San Francisco’s TenderloinRead the Press Release
SAN FRANCISCO – Alex Murillo was sentenced today to 36 months in federal prison for selling fentanyl and methamphetamine in San Francisco’s Tenderloin District, announced United States Attorney Stephanie M. Hinds and Drug Enforcement Administration (DEA) Acting Special Agent in Charge Bob P. Beris. The sentence was handed down by Senior United States District Judge Susan Illston.
Murillo, 25, a resident of Oakland, was charged by an eight count federal indictment on July 21, 2022. According to the charges and other documents filed by the government, Murillo sold drugs on the street in the Tenderloin on five occasions in the spring of 2022. On April 7, 2022, Murillo met two undercover police officers near 8th and Market Streets in the Tenderloin and sold the officers 5 grams of fentanyl for $100 on the San Francisco Civic Center BART staircase. On March 23, 2022, and on April 21, 2022, Murillo sold $40 of yellow fentanyl and $750 of pink fentanyl, respectively, to undercover officers in the Tenderloin. On May 12, 2022, Murillo sold approximately one ounce of fentanyl along with two ounces of methamphetamine to an undercover police officer for $800, again in the Tenderloin. On June 8, 2022, Murillo communicated again with one of the undercover police officers, met that officer again near the Civic Center BART platform, and sold the officer two ounces of fentanyl and three ounces of methamphetamine for $1,400.
Law enforcement officers arrested Murillo on June 21, 2022, outside of his apartment in Oakland and seized nearly four ounces of methamphetamine and 139 grams of fentanyl from his backpack.
In addition to the 36 month sentence, Murillo was sentenced to a four year sentence of supervision following release from prison. Murillo was in custody at his sentencing hearing and begins serving his sentence immediately.
Assistant U.S. Attorney Christa Hall is prosecuting the case, with the assistance of Lance Libatique. The prosecution is the result of an investigation by DEA and the San Francisco Police Department.
One Pill Can Kill: Avoid pills bought on the street because One Pill Can Kill. Fentanyl is a highly potent opioid that drug dealers dilute with cutting agents to create counterfeit pills purporting to be Oxycodone, Percocet, Xanax, and other drugs. Fentanyl is used because it is cheap. However, very small variations in the quantity or quality of fentanyl in counterfeit pills create huge variations in their potency, and the pills can kill. Fentanyl is now the leading cause of drug overdose deaths in the United States. Counterfeit, fentanyl-laced pills are usually shaped and colored to look like pills sold at pharmacies. For example, counterfeit pills known as “M30s” imitate Oxycodone, but when sold on the street they routinely contain fentanyl. These are usually round tablets and often light blue in color, though they can come in a rainbow of colors, and they have “M” and “30” imprinted on opposite sides of each pill. Do not take these or any other pills bought on the street – they can be poisonous, and you won’t know until it’s too late.
Oakland Man Sentenced to 16 Months in Prison for Multi-Million Dollar Fraud Targeting Foreign InvestorsRead the Press Release
OAKLAND - Thomas Henderson was sentenced today to 16 months in prison for making a false statement to the U.S. Citizenship and Immigration Services (USCIS) and for his role in a conspiracy to defraud foreign investors who were investing in Oakland-based businesses as a means to obtain permanent U.S. residency announced United States Attorney Stephanie M. Hinds; U.S. Department of State’s Diplomatic Security Service (DSS) Special Agent in Charge William Chang; Homeland Security Investigations Special Agent in Charge Tatum King; and Federal Bureau of Investigation Special Agent in Charge Robert K. Tripp. The sentence was handed down by Chief United States District Judge Richard Seeborg.
Henderson, 72, of Oakland, pleaded guilty to the charges on July 21, 2021. According to his plea agreement, Henderson admitted he formed the San Francisco Regional Center, LLC (SFRC) in 2010 to raise money from foreign investors through the “EB-5” visa program, a job-creation and immigration program administered by U.S. Citizenship and Immigration Services (USCIS). Under the USCIS program, foreign nationals may obtain permanent United States residency, commonly known as a Green Card, by investing in qualifying U.S. businesses and creating jobs for U.S. citizens and residents. To receive a two-year grant of conditional permanent residency status, foreign investors must meet certain requirements for an entry visa, comply with program requirements and make an investment of a minimum of $1 million, or $500,000 if the investment is made in certain areas of high unemployment. After two years, the foreign investor and immediate family can petition for permanent residency after meeting program requirements, including the creation of at least 10 jobs for United States citizens and residents through the business funded by the investment.
From 2011 to 2017, SFRC raised more than $100 million from foreign investors for seven commercial enterprises approved under the EB-5 program. In his plea agreement, Henderson admitted that he conspired with his business associate, Cooper Lee, and others to defraud investors who sought to avail themselves of the EB-5 program. Specifically, Henderson admitted that by at least the middle of 2014, SFRC began using investor funds for purposes and projects other than the specific enterprise corresponding to the investment, and that investors were not specifically told that their investment funds would be or were used for those purposes. For example, Henderson admitted that funds raised from 42 investors for the enterprise North America 3PL LP were used for other projects and businesses, including to fund the operation of earlier struggling projects. Henderson also admitted that he made false statements to USCIS when he submitted a declaration to the agency regarding the use of North America 3PL investor funds.
Lee also pleaded guilty to participating in the conspiracy. According to Lee’s plea agreement, from about August 2016 to January 2017, Lee conspired with Henderson to divert some funds raised for the EB-5 enterprise operating as California Gold Medal LP to other EB-5 enterprises and businesses controlled by Henderson. Lee admitted that he transferred funds and prepared documents to make it appear that the transfers were for legitimate business transactions.
On August 15, 2019, a federal grand jury indicted Henderson and Lee, charging both with conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349. In addition, Henderson was charged with 12 counts of wire fraud, in violation of 18 U.S.C. § 1343; conspiracy to commit offenses against the United States, in violation of 18 U.S.C. § 371; making a false statement to a government agency, in violation of 18 U.S.C. § 1001(a)(2); and making false writings to a government agency, in violation of 18 U.S.C. § 1001(a)(3). Lee, in addition to being charges with conspiracy, also was charged with six counts of wire fraud.
Pursuant to Henderson’s plea agreement, he pleaded guilty to the conspiracy to commit wire fraud count and the false statements count. The remaining counts against Henderson were dismissed at sentencing. In addition to the prison term, Judge Seeborg also ordered Henderson to serve three years on supervised release. Restitution will be determined at a later date.
On July 21, 2021, Lee pleaded guilty to the conspiracy count and on April 26, 2022, Judge Seeborg sentenced Lee to serve three years’ probation and to pay $20,000 restitution to a receiver appointed by the court in a separate action to recover assets for the victim investors. The remaining counts against Lee were dismissed.
Assistant U.S. Attorneys Lloyd Farnham is prosecuting the case, with the assistance of Patricia Mahoney. The prosecution was the result of an investigation led by the U.S. Department of State Diplomatic Security Service’s representative to the Document and Benefit Fraud Task Force (DBFTF), overseen by the HSI, with the participation of the Federal Bureau of Investigation. The DBFTF is a multi-agency task force that coordinates investigations into fraudulent immigration documents. U.S. Citizenship and Immigration Service’s Office of Fraud Detection and National Security also assisted with the investigation. Additional assistance was provided by the San Francisco Regional Office of the Securities and Exchange Commission.
Castro Valley Resident Pleads Guilty to Illegally Exporting American Aviation Technology to Beijing UniversityRead the Press Release
SAN FRANCISCO – Jonathan Yet Wing Soong pleaded guilty today to violating export control laws in connection with a scheme to secretly funnel sensitive aeronautics software to a Beijing university, announced United States Attorney Stephanie M. Hinds; Federal Bureau of Investigation Special Agent in Charge Robert K. Tripp; Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement (BIS), Special Agent in Charge John D. Masters; Defense Criminal Investigative Service (DCIS) Special Agent in Charge Bryan D. Denny. The plea was accepted by the Hon. Susan Illston, United States District Judge.
Between August 2016 and September 2020, Soong, 35, of Castro Valley, Calif., was employed as a program administrator by Universities Space Research Association (USRA), a nonprofit research corporation focusing on advancing space science and technology. In April of 2016, USRA contracted with the National Aeronautics and Space Administration (NASA) to, among other things, license and distribute aeronautics-related Army flight control software for a fee. Soong’s duties included, among other things, conducting and servicing software license sales, conducting export compliance screening of customers, generating software licenses, and exporting software pursuant to purchased licenses. As part of his duties, Soong was responsible for vetting customers to ensure they did not appear on certain restrictive lists—including the Department of Commerce’s Entity List and other U.S. government lists—that placed limitations on the transfer of products to identified entities. In pleading guilty, Soong admitted that he willingly exported and facilitated the sale and transfer of restricted software to Beihang University knowing that the university was on the Department of Commerce’s Entity List. According to government filings in the case, Beihang University was added to the Entity List due to the University’s involvement in People’s Republic of China military rocket systems and unmanned air vehicle systems. In his plea agreement, Soong acknowledged he used an intermediary to complete the export of the program to avoid detection that the real purchaser was on the Entity List.
At issue in the case is a software package referred to as CIFER, a tool that allows a user to develop a dynamic model of an aircraft, based on collective flight test data using system identification techniques. According to government filings, the package could be used to analyze and design aircraft control systems. According to his plea agreement, Soong was aware in April of 2017 that the CIFER software was subject to Export Administration Regulations and that Beihang University was on the Entity List thus making it necessary to obtain a license prior to exporting the CIFER software to the university. Soong acknowledged that he nonetheless arranged to sell and transfer the CIFER software package to the entity without obtaining a license.
The plea agreement describes how, on May 1, 2017, a representative of the university communicated with Soong and expressed an interest in exploring an arrangement in which rather than use Beihang University as the purchaser of the CIFER software, the purchase would be made in the name of a third-party small company. For the next several months, Soong communicated with the representative and then, in late 2017, Soong communicated with a representative from Beijing Rainbow Technical Development Ltd. (Beijing Rainbow), identified as being the third-party intermediary for the sale of the CIFER software to Beihang University. Soong ultimately exported directly to Beihang University. In July 2018, Soong also arranged to have the passcodes for the CIFER software package forwarded to Beihang University with payment coming from Beijing Rainbow.
On September 26, 2022, Soong was charged by information with one count of violating the International Emergency Economic Powers Act (IEEPA), in violation of 50 U.S.C. §§ 1702 and 1705. Pursuant to today’s agreement, Soong pleaded guilty to the count.
The IEEPA violation carries a statutory maximum penalty of 20 years in prison and a $1,000,000 fine. In addition, as part of any sentence, the court may order restitution and up to three years of supervised release. However, any sentence after conviction will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Soong remains out of custody pending sentencing. Judge Illston scheduled Soong’s sentencing hearing for April 28, 2023. Assistant United States Attorney Barbara Valliere of the United States Attorney’s Office’s Special Prosecutions Section is prosecuting the case with the assistance of Maddi Wachs and Kathy Tat. The prosecution is the result of an investigation by the BIS, DCIS, and the FBI with assistance from the NASA Office of Inspector General; U.S. Army Criminal Investigation Division; the U.S. Army Counterintelligence; and the Department of Homeland Security, Homeland Security Investigations.
Two Oakland Residents Indicted Following Seizures of Fentanyl, Heroin, and CocaineRead the Press Release
SAN FRANCISCO – Melvin Alexis Diaz Arteaga appeared in federal court to face an indictment charging him with conspiracy to distribute fentanyl and possessing fentanyl, heroin, and cocaine with the intent to distribute it, and Luis Almicar Erazo-Centeno also appeared to face the indictment’s charges against him of possession of fentanyl with the intent to distribute and for accessory after the fact, announced United States Attorney Stephanie M. Hinds and Drug Enforcement Administration Acting Special Agent in Charge Bob P. Beris. The indictment also charges Diaz Arteaga with two counts of distributing methamphetamine, including one occurring in San Francisco’s Tenderloin District.
The indictment charges Diaz Arteaga, 27, a resident of Oakland, with engaging in a conspiracy to distribute fentanyl from September 16 to November 16, 2022. He is also charged with three separate counts of possessing fentanyl, heroin, and cocaine on November 16, 2022, with the intent to distribute each drug. According to a detention memo filed by the government, Diaz Arteaga was arrested on November 16, 2022, outside of a house in Berkeley. Police allegedly seized approximately two pounds of fentanyl and a combined total of one pound of heroin and cocaine at the arrest scene.
The indictment further charges Diaz Arteaga with two earlier sales of methamphetamine, one occurring on September 20, 2022, and the other on October 5, 2022. The government’s detention memo alleges that in the earlier sale, Diaz Arteaga sold methamphetamine in San Francisco’s Tenderloin District. In the later sale, the government’s detention memo alleges Diaz Arteaga again sold methamphetamine, this time in Richmond, California.
The indictment separately charges Erazo-Centeno, 31, a resident of Oakland, with one count of possessing fentanyl on November 16, 2022, with the intent to distribute it. According to the government’s detention memo, police arrested Erazo-Centeno on November 16, 2022, at a residence in Oakland where officers found him attempting to dispose of drugs. For that conduct, Erazo-Centeno is charged with one count of accessory after the fact.
The charges contained in the indictment are only allegations. The defendants are presumed innocent unless and until proven guilty in a court of law.
Diaz Arteaga is charged in the indictment with one count each of conspiracy to distribute more than 400 grams of fentanyl and possession of more than 400 grams of fentanyl for purposes of distribution, each of which carries a maximum sentence of life and a minimum sentence of 10 years in prison. The indictment also charges Diaz Arteaga with one count each of possessing more than 100 grams of heroin for distribution and more than 500 grams of cocaine for distribution, and each of these counts carries a maximum sentence of 40 years and a minimum of 5 years in prison. The indictment also charges Diaz Arteaga with two counts of distributing methamphetamine. One count carries a maximum sentence of 40 years and a minimum sentence of 5 years in prison, and the other count carries a maximum of 20 years in prison.
Erazo-Centeno is charged in the indictment with one count of possession of fentanyl for distribution, which carries a maximum of 20 years in prison. The indictment also charges Erazo-Centeno with being an accessory after the fact to Diaz Arteaga’s possession of fentanyl for distribution, and that count carries a maximum sentence of 10 years in prison.
Assistant U.S. Attorney Nicholas Parker is prosecuting the case, with the assistance of paralegal Jessie Chelsea and legal assistant Soana Katoa. The prosecution is the result of an investigation by DEA and the San Francisco Police Department.
One Pill Can Kill: Avoid pills bought on the street because One Pill Can Kill. Fentanyl is a highly potent opioid that drug dealers dilute with cutting agents to make counterfeit prescription pills that appear to be Oxycodone, Percocet, Xanax, and other drugs. Fentanyl is used because it’s cheap. Small variations in the quantity or quality of fentanyl in a fake prescription pill can accidentally create a lethal dosage. Fentanyl is the leading cause of drug poisoning deaths in the United States. Fake prescription pills laced with fentanyl are usually shaped and colored to appear to be pills sold at pharmacies, like Percocet and Xanax. For example, fake prescription pills known as “M30s” imitate Oxycodone obtained from a pharmacy, but when sold on the street the pills routinely contain fentanyl. These particular pills are usually round tablets and often light blue in color, though they may be in different shapes and a rainbow of colors. They often have “M” and “30” imprinted on opposite sides of the pill. Do not take these or any other pills bought on the street – they are routinely fake and poisonous, and you will not know until it is too late.
Oakland Resident Who Sold Fentanyl in San Francisco’s Tenderloin Sentenced to Four YearsRead the Press Release
SAN FRANCISCO – Jose Alvarado, a/k/a Chepe, was sentenced today to 48 months in federal prison for distribution of fentanyl in San Francisco’s Tenderloin District and for possession with the intent to distribute fentanyl, announced United States Attorney Stephanie M. Hinds and Drug Enforcement Administration (DEA) Acting Special Agent in Charge Bob P. Beris. The sentence was handed down by United States District Judge Charles R. Breyer.
Alvarado, 27, an Oakland resident, pleaded guilty on July 8, 2022, to charges of distributing fentanyl and possessing fentanyl with the intent to distribute it. In his plea agreement, Alvarado described selling fentanyl to undercover law enforcement agents on four occasions in the Tenderloin District from November 2021 to February 2022. He admitted that on November 30, 2021, at the corner of Eddy Street and Polk Street in the Tenderloin, he sold approximately seven grams of fentanyl for $40 to an undercover law enforcement officer and then advised the officer “don’t die.” On January 13, 2022, near the corner of the Tenderloin’s Eddy Street and Larkin Street, Alvarado described that he sold just more than 12 grams of fentanyl for $200 and seven grams of methamphetamine for $100 to an undercover officer. A week later on January 20, 2022, and a few blocks away at Ellis Street and Van Ness Boulevard, he sold approximately two ounces of fentanyl to an undercover officer for $1,000. Alvarado further described that on February 10, 2022, at the corner of Golden Gate Avenue and Polk Street, Alvarado met up with another undercover officer and sold the officer approximately two ounces of fentanyl and one ounce of methamphetamine for $1,200.
Alvarado was arrested outside his Oakland residence on March 31, 2022. In his backpack and inside his residence, law enforcement officers found approximately 18 ounces (518 grams) of a substance containing fentanyl and 45 grams of a substance containing methamphetamine. Alvarado admitted in his plea agreement that he possessed the fentanyl and methamphetamine with the intent to distribute it in the Tenderloin.
Officers also seized more than $38,000 inside the residence. Alvarado admitted the cash was proceeds from past drug sales. The money was forfeited as part of his sentence.
In addition to the prison term, Judge Breyer ordered a four year term of supervision for Alvarado following his release from prison. Alvarado was in custody at the sentencing hearing and will begin serving his sentence immediately.
Assistant U.S. Attorney Kaitlin Paulson prosecuted the case, with the assistance of Jessie Chelsea. The prosecution is the result of investigations by DEA and the San Francisco Police Department.
One Pill Can Kill: Avoid pills bought on the street because One Pill Can Kill. Fentanyl is a highly potent opioid that drug dealers dilute with cutting agents to make counterfeit prescription pills that appear to be Oxycodone, Percocet, Xanax, and other drugs. Fentanyl is used because it’s cheap. Small variations in the quantity or quality of fentanyl in a fake prescription pill can accidentally create a lethal dosage. Fentanyl has now become the leading cause of drug poisoning deaths in the United States. Fake prescription pills laced with fentanyl are usually shaped and colored to appear to be pills sold at pharmacies, like Percocet and Xanax. For example, fake prescription pills known as “M30s” imitate Oxycodone obtained from a pharmacy, but when sold on the street the pills routinely contain fentanyl. These particular pills are usually round tablets and often light blue in color, though they may be in different shapes and a rainbow of colors. They often have “M” and “30” imprinted on opposite sides of the pill. Do not take these or any other pills bought on the street – they are routinely fake and poisonous, and you will not know until it is too late.
Oakland Resident Pleads Guilty to Distributing Fentanyl and Methamphetamine in San Francisco’s Tenderloin DistrictRead the Press Release
SAN FRANCISCO – Elio Hernandez-Zuniga pleaded guilty in federal court today to three counts of drug distribution in San Francisco’s Tenderloin District, including two counts of possessing with intent to distribute 40 grams and more of fentanyl and a third count of distributing 50 grams and more of methamphetamine, announced U.S. Attorney Stephanie M. Hinds and Drug Enforcement Administration (DEA) Special Agent in Charge Bob P. Beris. The plea agreement was accepted by the Honorable Charles R. Breyer, Senior United States District Judge.
In his plea agreement, Hernandez-Zuniga, 25, of Oakland, admitted that he has been involved in distributing drugs in the Tenderloin district since at least May of 2022. Hernandez-Zuniga’s plea agreement describes six transactions that occurred between May 26, 2022, and July 27, 2022; in each case, Hernandez-Zuniga communicated with a customer that, unbeknownst to Hernandez-Zuniga, was an SFPD officer working in an undercover capacity (“the UC”). Hernandez-Zuniga sold drugs to the UC on multiple occasions. For example, on June 7, 2022, the UC contacted Hernandez-Zuniga and arranged to purchase $100 worth of methamphetamine and $100 worth of fentanyl. That afternoon, the UC met Hernandez-Zuniga on the 800 block of Geary Street in the Tenderloin and handed Hernandez-Zuniga $200 in exchange for a bag containing 10 individually wrapped rocks of methamphetamine. After the UC reminded Hernandez-Zuniga that he wanted $100 worth of fentanyl, the defendant said he could “make it up” to the UC next time. Then, after the UC began to walk away, Hernandez-Zuniga caught up to the UC and said he (Hernandez-Zuniga) could get the remaining $100 worth of what he owed. A few minutes later, Hernandez-Zuniga handed the UC $100 worth of methamphetamine in a plastic bag. Similarly, on July 6, 2022, Hernandez-Zuniga agreed to sell the UC two ounces of fentanyl for $1,500 the next day. On July 7, 2022, the UC drove a vehicle and parked at the southeast corner of Post and Larkin Streets. Hernandez-Zuniga approached and entered the UC’s vehicle. Hernandez-Zuniga handed the UC two large bags containing approximately 56.8 grams of fentanyl and, in exchange, the UC handed Hernandez-Zuniga $1,500.The plea agreement also described the results of arrest and search warrants that law enforcement officers executed on Hernandez-Zuniga, his residence, and his vehicle on August 4, 2022. In sum, officers found in Hernandez-Zuniga’s possession 162.2 gross grams of fentanyl, 180 gross grams of methamphetamine, 120.7 gross grams of cocaine base, 35.3 gross grams of heroin, $2,100 in cash, packaging materials, and multiple digital scales. Hernandez-Zuniga admitted that he possessed the drugs with the intention of distributing them to others and acknowledged that the cash was the proceeds of drug sales.
On August 17, 2022, a federal grand jury handed down an indictment charging Hernandez-Zuniga with six counts of possession with intent to distribute drugs. The six counts included one count each of possession with intent to distribute, and distribution of, methamphetamine and fentanyl, in violation of 21 U.S.C. § 841(a)(1) and (b)(1)(c); two counts of possession with intent to distribute, and distribution of, 40 grams and more of fentanyl, in violation of 21 U.S.C. § 841(a)(1) and (b)(1)(B)(vi); and two counts of possession with intent to distribute, and distribution of, 50 grams and more of methamphetamine, in violation of 21 U.S.C. § 841(a)(1) and (b)(1)(B)(viii). Pursuant to today’s plea agreement, Hernandez-Zuniga pleaded guilty to both counts of distributing 40 grams and more of fentanyl, and one of the counts of distributing 50 grams and more of methamphetamine. If Hernandez-Zuniga complies with the agreement, the remaining counts will be dismissed at sentencing.
Judge Breyer scheduled Hernandez-Zuniga’s sentencing for April 5, 2023. Hernandez-Zuniga faces a statutory maximum prison term of 40 years and a statutory minimum prison term of five years for each of the three counts for which he has pleaded guilty. In addition, Hernandez-Zuniga faces a minimum term of four years of supervised release and a maximum fine of $5 million for each of the three counts. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Hernandez-Zuniga remains in custody pending sentencing.
Assistant U.S. Attorney Kevin Yeh is prosecuting this case with assistance from Mimi Lam. This case is the result of an investigation by the DEA with assistance from the San Francisco Police Department.
Former San Francisco Building Inspection Commission President Pleads Guilty to Multiple Fraud Schemes, Providing False Documents to FBI, and Tax EvasionRead the Press Release
SAN FRANCISCO –Rodrigo Santos pleaded guilty today in federal court to bank fraud, honest services fraud, evading taxes on more than $1.6 million of unreported income, and falsifying records in a federal investigation, announced United States Attorney Stephanie M. Hinds, Federal Bureau of Investigation Special Agent in Charge Robert K. Tripp, and Internal Revenue Service-Criminal Investigation (IRS-CI) Special Agent in Charge Darren Lian.
Santos, 64, of San Francisco, was originally charged in a federal complaint on May 11, 2020, with bank fraud. Santos, a licensed civil and structural engineer, was the co-founder and a principal of the San Francisco-based company Santos and Urrutia Structural Engineers, Inc (S&U). His business provided engineering services and managed the process of obtaining building permits from municipal authorities for his clients. The complaint described that Santos was appointed in 2000 as a member of the San Francisco Building Inspection Commission by then Mayor Willie Brown and was promoted in 2004 to be the Commission’s President by Mayor Gavin Newsom. Mayor Ed Lee appointed Santos in 2012 to the San Francisco City College Board of Trustees.
An indictment (CR 21-268 SI) followed the complaint and charged Santos with committing bank fraud and with providing false records to the FBI in its investigation, among other charges. A grand jury thereafter issued a second, separate indictment (CR 21-453 SI) against Santos, charging him with honest services fraud for repeatedly soliciting donations from his clients to a favored non-profit athletic association of a San Francisco senior building inspector to obtain favorable treatment for the clients from the building inspector. Santos was most recently further charged by an information (CR 22-345 SI) with five counts of tax evasion for the tax years 2015 through 2019.Today Santos pleaded guilty in indictment (CR 21-268 SI) to ten counts of bank fraud involving the commission of fraud against his own clients and his business. In his plea agreement, Santos described that from 2012 to 2019 he engaged in a scheme in which he collected numerous checks from his clients that they made payable to San Francisco’s municipal agencies, including the Department of Building Inspection (DBI) and the Department of Public Works, to private companies and to individuals. Santos led his clients to believe these checks would be used to pay the fees or costs of their building projects. Santos instead deposited the checks into his personal bank account. To do so, he either fraudulently altered the checks by editing the “pay to the order of” section of the checks to appear as if the checks had been written to him personally or he fraudulently endorsed the checks to himself by signing the back of the check on behalf of the payee. By depositing the checks into his personal bank account, he obtained his clients’ funds for himself. Santos admitted that from 2012 to 2019 he deposited approximately 445 checks of his clients’ checks into his personal bank account and fraudulently obtained more than $775,000 of his clients’ money.
Santos also admitted that from 2012 to 2018 he fraudulently deposited into his personal bank account approximately 378 checks written as “pay to the order” of S&U, his engineering firm. By depositing theses checks into his personal account, Santos admitted that he caused a loss to S&U of more than $718,000.
Santos further pleaded guilty in the same indictment to falsifying records in a federal investigation. Santos described in his plea agreement that on March 2, 2020, two FBI agents served him with a grand jury subpoena requesting documents related to six client checks connected to the above-described fraud schemes. In response, Santos altered S&U invoices to make it falsely appear that his clients had been credited for the checks, though Santos had fraudulently deposited them into his own personal bank account and had never credited his clients for those checks. He admitted that he forwarded the falsified invoices to the FBI knowing they were false and intending to obstruct the FBI’s investigation.
In the second indictment (CR 21-453 SI), Santos pleaded guilty today to one count of honest services wire fraud. In his plea agreement, Santos admitted he engaged in a scheme to defraud the public of the honest services of his co-defendant Bernard Curran, who was a senior building inspector at DBI. Santos knew Curran supported and favored a local non-profit athletic organization. Santos, intending to influence Curran in the performance of his official duties, arranged for his clients to make charitable contributions to the non-profit athletic organization. Santos ensured Curran knew about these donations by either personally delivering the clients’ checks to Curran or by otherwise informing him of the donations. Santos described that his clients received favorable official treatment from Curran on their projects in exchange for the donations. In total, from 2017 to 2020 Santos arranged for 13 of his clients to make a total of $9,600 in donations to the non-profit athletic association, and all 13 clients received at least on one official action from Curran in his capacity as a DBI senior building inspector.
In the third case against Santos (CR 21-345 SI), Santos today pleaded guilty to five counts of tax evasion. Santos admitted that from 2012 to 2019 he deposited more than $1.6 million into his personal account and that he deliberately omitted this income on his tax returns for the tax years 2012 to 2019, thereby evading taxes. Santos admitted the source of the $1.6 million in unreported income was the above-described bank fraud scheme through which Santos fraudulently deposited 823 client checks into his personal bank account. Santos further admitted that he willfully submitted false and fraudulent tax forms for each year from 2012 to 2019, resulting in a tax avoidance of more than $564,000.
Santos entered his guilty pleas today before United States District Judge Susan Illston, who scheduled a sentencing hearing for Santos on June 30, 2023. Santos remains out of custody pending his sentencing hearing.
In summary, Santos pleaded guilty to ten counts of bank fraud, one count of honest services wire fraud, one count of falsifying records in a federal investigation, and five counts of tax evasion. Each count of bank fraud in violation of 18 U.S.C. § 1344 carries a statutory maximum sentence of 30 years in prison. The count of honest services wire fraud in violation of 18 U.S.C. §§ 1343 and 1346 carries a statutory maximum sentence of 20 years. The count of falsifying records in a federal investigation in violation of 18 U.S.C. § 1519 carries a maximum sentence of 20 years. Each count of tax evasion in violation of 26 U.S.C. § 7201 carries a maximum sentence of 5 years. However, any sentence following conviction imposed by the court will occur only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
As part of his guilty plea, Santos agreed to pay more than $1 million in restitution to victims.
The Special Prosecutions Section of the U.S. Attorney’s Office for the Northern District of California is prosecuting the case. The prosecution is the result of an investigation by the FBI and IRS-CI. The San Francisco City Attorney has also alleged in a state civil lawsuit unsealed in March 2020 that Santos engaged in check fraud.
This case is part of a larger federal investigation targeting public corruption in the City and County of San Francisco. To date, twelve individuals have been charged, including high-ranking San Francisco public officials Harlan Kelly and Mohammed Nuru. Nuru was sentenced to seven years in federal prison in August 2022. Multiple city contractors and facilitators have also been charged and several have been sentenced to prison.
East Bay Resident Sentenced to Ten Years in Prison for Selling Child PornographyRead the Press Release
OAKLAND – Tariq Lamont Johnson was sentenced today to 120 months in prison for using private social media to sell and distribute child sex abuse materials, announced United States Attorney Stephanie M. Hinds and Homeland Security Investigations (HSI) San Francisco Special Agent in Charge Tatum King. The sentence was handed down by the Honorable Jon S. Tigar, U.S. District Judge.
Johnson, 24, of Richmond, Calif., pleaded guilty on June 3, 2022, to the charge. According to the plea agreement Johnson admitted to using the social media site Telegram to sell visual depictions of a minor engaged in sexually explicit conduct to another person in exchange for a $45 Amazon gift card. Specifically, Johnson admitted that he operated numerous Instagram accounts that were linked together, and to his Telegram account, which he would use to post images; he then offered access to Telegram groups where he would provide child sexual abuse material in exchange for money.
According to the plea agreement, on November 5, 2021, Johnson was contacted by a person he later learned to be a government agent. Johnson admitted that he agreed to sell the undercover agent access to a Telegram chatroom, as well as a link to child sexual abuse material saved on a cloud-storage site, in exchange for a $25 Amazon gift card. Further, Johnson admitted that at about the same time he sold the agent a second link to child sexual abuse material saved on a cloud-storage site in exchange for a $45 Amazon gift card. Johnson admitted that the second link contained more than 600 depictions of minors engaged in sexually explicit conduct, and that these included depictions of infants and/or toddlers engaged in sexual acts.
Johnson was charged by Information on March 4, 2022, with one count of distribution of child pornography, in violation of 18 U.S.C. §§ 2252(a)(2) and (b)(1). Pursuant to his plea agreement, Johnson pleaded guilty to the charge.
In addition to the prison term, Judge Tigar sentenced Johnson to a 10-year period of supervised release that will commence after the prison term is concluded. The defendant was immediately remanded into custody. Judge Tigar ordered that a hearing to determine restitution to Johnson’s victims will be held on April 6, 2023.
Assistant U.S. Attorney Evan M. Mateer is prosecuting the case with the assistance of Karina Ruiz. The prosecution is the result of an investigation by Homeland Security Investigations.
San Francisco MS-13 Associates Sentenced to Prison for Roles in Gang-Related Murders and Attempted Cover-UpRead the Press Release
SAN FRANCISCO- Kevin Guatemala Zepeda, a/k/a “Mision,” and Fernando Romero Bonilla, a/k/a “Black,” were sentenced today to 204 and 84 months in prison, respectively, for their separate roles in planning and covering up a MS-13 gang-related murder announced United States Attorney Stephanie M. Hinds and Homeland Security Investigations (HSI) Special Agent in Charge Tatum King. The sentences were handed down by the Hon. Richard Seeborg, Chief U.S. District Judge.
Zepeda and Bonilla were two of 13 defendants named in a second superseding indictment filed on November 4, 2021. The indictment described a broad range of racketeering crimes committed by the transnational criminal organization MS-13. Among the crimes described in the indictment is the murder of a suspected gang rival in the parking lot of the Gray Whale Cove trail in Pacifica. On September 13, 2022, Bonilla pleaded guilty to racketeering conspiracy and a January 24, 2019, assault on a family in the Mission District of San Francisco that included a 15-year-old boy. Bonilla admitted that as part of the racketeering conspiracy, he attempted to cover up the murder at Gray Whale Cove by removing a piece of potentially incriminating evidence. On October 4, 2022, Zepeda pleaded guilty to racketeering conspiracy and his participation in the January 24, 2019, assault. Zepeda admitted to participating in the planning of the murder at Gray Whale Cove and providing the weapons that his associates used to commit the murder. He further admitted that he helped remove potentially incriminating evidence from the scene of the murder.
MS-13 operates in El Salvador, Honduras, Guatemala, Mexico, and at least 20 states in the United States. The MS-13 clique in San Francisco is the 20th Street clique. The second superseding indictment filed in this case describes how the 20th Street clique relies on crime to operate, including to avoid detection by law enforcement, to initiate new recruits, to enhance the reputation of the gang and individual gang members, to maintain control of drug distribution channels, and to intimidate people who might testify against or otherwise defy the gang. The second superseding indictment also describes several violent crimes to which numerous defendants have pleaded guilty. According to his plea agreement, Zepeda acknowledged that he retrieved from his house the gun and machete used in the murder. In addition, after fellow gang members committed the murder, Zepeda drove to the murder scene to remove a piece of evidence that would have implicated his clique mates. For his part, Bonilla admitted in his plea agreement that he accompanied Zepeda after the murder to remove the incriminating evidence from the scene. Both defendants pleaded guilty to racketeering conspiracy, in violation of 18 U.S.C. § 1962(d), and assault with a dangerous weapon in aid of racketeering, in violation of 18 U.S.C. § 1959(a)(3) and 2.
In addition to the prison terms, Chief Judge Seeborg ordered a five-year term of supervised release for Zepeda and a three-year term of supervised release for Bonilla.
Several of Zepeda’s and Bonilla’s co-defendants pleaded guilty to crimes in connection with the racketeering conspiracy and have been sentenced as follows:
Defendant
Age
Charges
Sentence
EVERT
GALDAMEZ
CISNEROS
a/k/a “Talentoso”
25
Racketeering Conspiracy
18 U.S.C. § 1962(d)
60 months in prison
Assault with a Dangerous Weapon in Aid of Racketeering
18 U.S.C. §§ 1959(a)(3) and 2
OSCAR ESPINAL a/k/a “Chuy”
32
Racketeering Conspiracy
18 U.S.C. § 1962(d)
144 months in prison
Attempted Murder in Aid of Racketeering
18 U.S.C. §§ 1959(a)(5) and 2
MISSAEL MENDOZA
22
Assault with a Dangerous Weapon in Aid of Racketeering
18 U.S.C. §§ 1959(a)(3) and 2
36 months in prison
CHRISTIAN QUINTANILLA
22
Assault with a Dangerous Weapon in Aid of Racketeering
18 U.S.C. §§ 1959(a)(3) and 2
36 months in prison
BRIGIDO JOSUE GONZALES SALES a/k/a “Inocente” or “Kiko”
22
Racketeering Conspiracy
18 U.S.C. § 1962(d)
144 months in prison
Attempted Murder in Aid of Racketeering
18 U.S.C. § 1959(a)(5) and 2
Assault with a Dangerous Weapon in Aid of Racketeering
18 U.S.C. §§ 1959(a)(3) and 2
ALEXIS CRUZ ZEPEDA a/k/a “Zorro”
29
Racketeering Conspiracy
18 U.S.C. § 1962(d)
192 months in prison
Attempted Murder in Aid of Racketeering
18 U.S.C. §§ 1959(a)(5) and 2
In addition, the following defendants have pleaded guilty to their role in the racketeering conspiracy and are awaiting sentencing:
Defendant
Age
Charges
Maximum Statutory Penalty
ROGELIO BELLOSO ALEMAN
a/k/a “Smiley”
29
Racketeering Conspiracy
18 U.S.C. § 1962(d)
Life in prison
Fine of $250,000
Assault with a Dangerous Weapon in Aid of Racketeering
18 U.S.C. §§ 1959(a)(3) and 2
20 years in prison
Fine of $250,000
ABNER MARROQUIN ALEGRIA
a/k/a “Coche” or “Chapin”
42
Racketeering Conspiracy
18 U.S.C. § 1962(d)
Life in prison
Fine of $250,000
EDWIN ALVARADO AMAYA
a/k/a “Muerte”
25
Racketeering Conspiracy
18 U.S.C. § 1962(d)
Life in prison
Fine of $250,000
Attempted Murder in Aid of Racketeering
18 U.S.C. §§ 1959(a)(5) and 2
10 years in prison
Fine of $250,000
KENNETH CAMPOS,
a/k/a “Nesio”
33
Racketeering Conspiracy
18 U.S.C. § 1962(d)
Life in prison
Fine of $250,000
Assault with a Dangerous Weapon in Aid of Racketeering (two counts)
18 U.S.C. §§ 1959(a)(3) and 2
20 years in prison
Fine of $250,000
KEVIN REYES MELENDEZ
a/k/a “Neutron”
30
Racketeering Conspiracy
18 U.S.C. § 1962(d)
Life in prison
Fine of $250,000
Attempted Murder in Aid of Racketeering (two counts)
18 U.S.C. §§ 1959(a)(5) and 2
10 years in prison
Fine of $250,000
Discharge of a Firearm During and in Furtherance of a Crime of Violence
18 U.S.C. § 924(c)
Life in prison
(Mandatory minimum of 5 years (7 years if brandished, 10 years if discharged))
Fine of $250,000
Assault with a Dangerous Weapon in Aid of Racketeering
18 U.S.C. §§ 1959(a)(3) and 2
20 years in prison
Fine of $250,000
This case is being prosecuted by the Organized Crime Strike Force of the Office of the United States Attorney. The prosecution is the result of an investigations by HSI, the San Francisco Police Department Homicide Unit and Community Violence Reduction Team, San Mateo County Sheriff’s Office Gang Intelligence Unit and Investigations Bureau, Daly City Police Department, Pinole Police Department, Redwood City Police Department Street Crimes Reduction Team, and San Pablo Police Department.
Former San Francisco Resident Sentenced to More Than Three Years in Prison for Multi-Year Campaign of CyberstalkingRead the Press Release
SAN FRANCISCO – Ramajana Hidic Demirovic was sentenced to 37 months in prison for cyberstalking and conspiracy to commit cyberstalking in connection with a scheme to harass and intimidate victims, including teenagers who had romantic relationships with the defendant’s co-conspirator, announced United States Attorney Stephanie M. Hinds and Federal Bureau of Investigation Special Agent in Charge Robert K. Tripp. The sentence was handed down by the Hon. Vince Chhabria, U.S. District Judge after the defendant admitted she was guilty of the federal criminal charges.
Demirovic, 47, of San Francisco at the time she committed the offenses and currently of Brentwood, pleaded guilty to the charges on August 4, 2022. According to her plea agreement, Demirovic admitted she sent hundreds of malicious, deceptive, and abusive communications intended to sabotage the personal relationships, social reputation, academic life, and work prospects of her intended victims. In all, Demirovic pleaded guilty to seven counts of cyberstalking as well as an eighth count of conspiracy to commit cyberstalking. She acknowledged in her plea agreement that between 2016 and 2019 she and a co-conspirator attempted to cause and did cause substantial emotional distress to their victims. The principal targets of the scheme were persons with whom her co-conspirator (her daughter) had a falling out after a relationship or friendship. In each case, after the relationship ended, Demirovic engaged in a campaign to punish the victims.
Examples of Demirovic’s cyberstalking and additional conduct are described in her plea agreement and in the government’s sentencing memorandum. The descriptions are disturbing. Demirovic’s first victim was a 14-year-old high school student who dated Demirovic’s co-conspirator for only a few days in February 2016. Demirovic went to the victim’s school, located him, accosted him, and, in front of other students, threatened him. Demirovic also contacted the victim’s mother using text messages and falsely accused him of being violent against Demirovic’s co-conspirator.
A second victim was a close female friend of Demirovic’s daughter until the two teenagers had a falling out. In response, Demirovic began sending harassing text messages to her and leaving threatening voicemail messages. Demirovic threatened to send fabricated incriminating evidence to the police and to arrange to have this victim disciplined by her school.
A third victim became Demirovic’s target after he briefly “dated” her daughter in 2016. Demirovic sent vicious text messages to this victim and threatened to seek a restraining order against him that would prejudice his college applications. She made false reports to his employer accusing the victim of being physically abusive, using drugs, and having a problem with alcohol—leading the victim to quit his job. She contacted administrators at the victim’s school and repeated these false allegations. Demirovic also used Instagram spoof accounts that used the victim’s name and images of him.
Demirovic acknowledged in her plea agreement that her tactics escalated throughout the rest of 2016 and 2017; by May of 2018, Demirovic and her co-conspirator began a 17-month course of conduct that was intended to humiliate and destroy the social relationships of a fourth victim. This time, Demirovic created and used social media accounts—some that impersonated the victim and others that used pseudonyms—to systematically transmit hundreds of communications and postings about the victim. Messages were sent to the victim, his family, friends, school officials, and strangers. For example, Demirovic created social media postings suggesting, among other things, that the victim was high on drugs, that he was emotionally and psychologically abusive, and that he was engaged in online bullying and anonymous messaging. Demirovic also submitted a complaint about the victim to Title IX officers at his university, falsely alleging he had "harassed and stalked" girls. Demirovic’s harassing conduct continued even after a judicial officer issued a temporary restraining order directing Demirovic to refrain from harassing the victim and his family.
A more detailed description of the defendant’s conduct and the effect on her multiple victims is included in the government’s memorandum filed in connection with the defendant’s sentencing.
On March 10, 2022, a federal grand jury issued a superseding indictment charging Demirovic with seven counts of cyberstalking, in violation of 18 U.S.C. § 2261A(2), and one count of conspiracy to commit cyberstalking, in violation of 18 U.S.C. § 371. Pursuant to her plea agreement, Demirovic pleaded guilty to all counts.
In addition to the prison term, Judge Chhabria ordered Demirovic to serve a three-year term of supervised release to begin after her prison term. Judge Chhabria ordered the defendant to surrender on March 10, 2023, to begin serving her prison term rand scheduled a hearing for February 15, 2023, to determine issues regarding restitution.
Assistant U.S. Attorneys Joseph Tartakovsky and Lauren Harding are prosecuting the case with assistance from Lance Libatique. The prosecution is the result of an investigation by the FBI.
Jury Convicts Fremont Man of Insider Trading Scheme That Generated $7 Million in Illicit ProfitsRead the Press Release
SAN FRANCISCO – A federal jury convicted Sivannarayana Barama, a former IT professional at multiple Silicon Valley technology firms, of four counts of securities fraud for using a publicly traded company’s confidential inside information about its financial performance to trade in the company’s securities, announced United States Attorney Stephanie M. Hinds and Federal Bureau of Investigation Special Agent in Charge Robert K. Tripp. The guilty verdicts followed a one-week trial before Chief United States District Judge Richard Seeborg.
Barama and a co-defendant were charged with securities fraud and conspiracy to commit securities fraud by a superseding indictment in December 2019. The co-defendant pleaded guilty plea to related charges in 2019. Barama proceeded to jury trial, and the jury returned its verdicts against Barama on December 13, 2022.
Palo Alto Networks Inc. is a public company headquartered in Santa Clara, Calif., and listed on the NASDAQ exchange. According to the superseding indictment’s allegations, Barama, 48, of Fremont, Calif., participated in an insider trading scheme in which he learned inside information about the quarterly financial performance of Palo Alto Networks before that information was released to the public and then traded in that company’s stock while that information was still confidential.
According to evidence presented at trial, Barama formerly worked as a contractor at Palo Alto Networks. During that time he met an employee who worked in the company’s information technology department. From at least October 2016 through September 2017, the employee learned confidential inside information about the company’s quarterly revenue and financial performance through his employment.
Trial evidence demonstrated that the Palo Alto Networks employee traded on that confidential information himself in nominee accounts and also provided Barama with the information along with trading instructions. Barama used the confidential information and trading instructions to purchase Palo Alto Networks stock options. Once the company publicly announced its earnings for a prior quarter, the stock price reacted to the public disclosure and Barama’s earlier option trades promptly became highly profitable. Barama’s trades based on confidential inside information at times resulted in profits of more than five times the amount he invested. Barama ultimately made profits of $7.3 million on his options trades based on confidential information obtained ahead of four different Palo Alto Networks earnings announcements.
The jury convicted Barama of four counts of securities fraud in violation of 18 U.S.C. § 1348. For each count, Barama faces a maximum statutory sentence of 25 years in prison. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The jury acquitted Barama of one count of conspiracy to commit securities fraud in violation of 18 U.S.C. § 1349.
Chief U.S. District Judge Seeborg has not yet set a sentencing hearing date for Barama. Barama remains free on bond pending his sentencing hearing.
Barama and other traders and participants in the insider trading scheme were named in enforcement actions brought by the United States Securities and Exchange Commission in 2019.
Assistant U.S. Attorneys Garth Hire and Lloyd Farnham prosecuted the case with the assistance of Mark DiCenzo. The prosecution is the result of an investigation by the FBI, with the assistance of the San Francisco Regional Office of the Securities and Exchange Commission. The U.S. Attorney’s Office acknowledges and appreciates the assistance at trial provided by the SEC’s Division of Economic and Risk Analysis and by the Financial Industry Regulatory Authority (FINRA) and its Criminal Prosecution Assistance Group.Two Biotech Firms and Their Co-Founder to Pay $10 Million to Resolve Allegations of Mischarging Federal GrantsRead the Press Release
SAN FRANCISCO – Two biotechnology companies and their co-founder will pay more than $10 million to the United States to resolve allegations under the False Claims Act that they engaged in improper billing to federal grants, announced United States Attorney Stephanie M. Hinds, Special Agent in Charge Steven J. Ryan of the Department of Health and Human Services Office of Inspector General (HHS-OIG), Special Agent in Charge L. Scott Moreland of the Major Procurement Fraud Field Office of the Department of the Army Criminal Investigation Division (Army CID), and Special Agent in Charge Bryan Denny of the Western Field Office of the Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS).
Dr. Paul Andrew Rhodes co-founded two technology companies, iSense, LLC (iSense) and Specific Diagnostics, Inc. (Specific). iSense, a Florida-based company with offices at one time in Mountain View, designs and develops applications for colorimetric sensor arrays. Specific, headquartered in San Jose, designs antimicrobial susceptibility tests. Dr. Rhodes, iSense, and Specific entered into a settlement agreement to resolve allegations by the United States that the firms mischarged federal grants by billing for costs incurred by another business and by billing for compensation in amounts exceeding authorized federal limits. The settlement also resolves allegations of backdating services and cost-sharing agreements and knowingly presenting a backdated agreement to the United States.
The total amount of the settlement to be paid is $10,068,875. Of that amount, iSense will pay $4,000,000, Specific will pay $4,000,000, and Dr. Rhodes will pay $2,068,875.
“This office continues to combat fraud wherever it lurks in Silicon Valley,” said U.S. Attorney Stephanie M. Hinds. “Federal awards for biotech research are a critical aspect of this country’s strategy to promote and support innovation and research. Regrettably, some recipients mislead auditors and divert funds to enrich themselves – misconduct that we will tirelessly pursue.”
“Recipients of HHS-provided awards are expected to be responsible, honest stewards of the funds,” stated Steven J. Ryan, Special Agent in Charge with HHS-OIG. “Our agency and law enforcement partners readily and thoroughly investigate allegations of improper claim submission related to these awards.”
“The settlement restores credibility to the federal acquisition process by resolving allegations that the contractor improperly billed the Department of Defense and others for disallowed, unreasonable, or mischaracterized costs,” said Bryan D. Denny, Special Agent in Charge of the DCIS Western Field Office. “DCIS and its law enforcement partners will continue our collective efforts to root out all forms of procurement and contracting irregularities affecting the federal procurement process that waste invaluable taxpayer resources.”
“Today’s announcement highlights our continued commitment to work closely and seamlessly with our outstanding fellow law enforcement agencies to protect the financial interests of the United States Army and the United States Government as a whole,” said Special Agent in Charge L. Scott Moreland, Army CID.
This settlement agreement resolves multiple allegations. First, the settlement agreement resolves allegations that from January 1, 2015, to December 31, 2019, iSense, owned primarily by Dr. Rhodes, knowingly misallocated to itself costs incurred by Specific, which was partially owned by Dr. Rhodes. In one example, the United States alleges that in 2016 iSense shared space with Specific but the costs for that space were allocated to iSense and submitted for payment under DOD grants. Similarly, iSense shared a controller with Specific; however, the United States alleges the controller’s salary was allocated to iSense and submitted for payment under DOD grants. The United States also alleges that iSense and Dr. Rhodes knowingly submitted backdated cost-sharing agreements with Specific to the federal government.
The settlement agreement further resolves allegations relating to National Institutes of Health grants in which iSense submitted the costs for employee work hours from July 1, 2014, to June 30, 2019, in amounts that exceeded the applicable salary cap and otherwise overcharged for hours worked by employees. Specific is alleged to have engaged in similar conduct from February 1, 2017, to December 31, 2018, and the settlement agreement also resolves those allegations.
Lastly, the settlement agreement resolves allegations that from February 1, 2018, to July 28, 2020, Specific and Dr. Rhodes knowingly submitted backdated services agreements with iSense as properly dated.
Assistant U.S. Attorney Benjamin J. Wolinsky handled this matter for the government. The investigation and settlement resulted from a coordinated effort by the U.S. Attorney’s Office for the Northern District of California, HHS-OIG, DCIS, and the Major Procurement Fraud Field Office of Army-CID.
The investigation and resolution of this matter illustrates the government’s emphasis on combating fraud in federal grants. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at (800) 447-8477 and to the Department of Defense at (800) 424-9098.
The claims resolved by the settlement are allegations only; there has been no determination of liability.
East Bay Convenience Store Owner Sentenced to More Than Three Years in Prison for Role in Food Stamp Fraud ConspiraciesRead the Press Release
OAKLAND –Ali Mugalli Hassan was sentenced to 37 months in prison for his role in multiple schemes to defraud government benefits programs, announced United States Attorney Stephanie M. Hinds and United States Department of Agriculture Office of Inspector General (USDA-OIG) Western Region Special Agent in Charge Shawn Dionida. The sentence was handed down by United States District Judge Phyllis J. Hamilton following a week-long jury trial resulting in Hassan’s conviction of the crimes.
At trial, the government presented evidence that Ali Mugalli Hassan, 32, of Alameda, defrauded the United States Department of Agriculture (USDA) by unlawfully trafficking federal food stamp benefits from 2014 through 2017. According to evidence presented at trial, Hassan owned and operated a convenience store on International Boulevard in Oakland. Members of Hassan’s family, including his father Mugalli Ahmed Hassan, 50, of Alameda, served as cashiers at the store. The convenience store was an authorized vendor for the USDA’s Supplemental Nutritional Assistance Program (SNAP) (formerly known as the Food Stamp Program) which helps economically disadvantaged persons pay for essential food items for themselves and their families. Trial evidence showed that Hassan and his family members conducted fraudulent SNAP transactions through his convenience store by charging purchases on the customers’ EBT cards when, in reality, the customers received few or no SNAP-eligible products. In addition, the evidence demonstrated Hassan kept approximately half the value of the fraudulent transactions and returned the remainder in cash to the customers. As part of the scheme, Hassan engaged in transactions in which he kept customers’ EBT cards and used the federal benefits assigned to those cards at other stores to purchase items to sell at his convenience store. At sentencing, Judge Hamilton found the loss amount from the conspiracy to be over $1 million.
On March 14, 2019, a federal grand jury indicted Ali Hassan and Mugalli Hassan, charging both with various crimes in accordance with their roles in the scheme. On June 14, 2022, Mugalli Hassan pleaded guilty to nine counts of wire fraud, in violation of 18 U.S.C. § 1343, and proceeded to trial along with Ali Hassan on several of the remaining counts pending against them. On June 29, 2022, a jury convicted both Ali Hassan and Mugalli Hassan of one count of conspiracy to commit benefits fraud and to defraud the United States, in violation of 18 U.S.C. § 371; one count of benefits fraud greater than $5,000, in violation of 7 U.S.C. § 2024(b); one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349; and one count of wire fraud, in violation of 18 U.S.C. § 1343.
In addition to the prison term, Chief Judge Hamilton ordered Ali Hassan to serve three years of supervised release, to begin after his release from prison, and to pay a fine of $15,000.
Judge Hamilton scheduled Mugalli Hassan’s sentencing hearing for February 2, 2023.
Assistant U.S. Attorneys Abraham Fine and Molly Priedeman prosecuted the case at trial with the assistance of Patricia Mahoney, Kay Konopaske, and Leeya Kekona. The prosecution is the result of an investigation by the USDA-OIG with the assistance of the Oakland Police Department, U.S. Marshals Service, and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
Norteño Gang Member Sentenced to 15 Years for Conspiracies to Commit Assaults and Murders in Monterey County JailRead the Press Release
SAN JOSE – Jorge Jasso was sentenced today to 180 months (15 years) in federal prison following his convictions for multiple conspiracies involving gang violence in the Monterey County Jail, announced United States Attorney Stephanie M. Hinds and Federal Bureau of Investigation Special Agent in Charge Robert K. Tripp. The sentence was handed down by United States District Judge Beth L. Freeman.
Jasso is the last of 15 gang members who were charged, convicted, and sentenced in this case for wide ranging criminal conspiracies involving violence and drug trafficking.
On June 7, 2022, Jasso, age 30, of Soledad, California, was convicted by a federal jury of all charges against him. The charges consisted of engaging in a racketeering (RICO) conspiracy; engaging in a conspiracy to commit murder in aid of racketeering; and engaging in a conspiracy to commit assault with a dangerous weapon in aid of racketeering.
In the same jury trial, Jasso’s co-defendant Vincent Gerald Garcia was convicted of the same charges. Garcia was sentenced on November 1, 2022, to 306 months (25 years, 6 months) in federal prison.
Trial evidence showed that Jasso was an active member of the Norteño street gang beginning in 2007. From at least May 2012 to September 2013, Jasso was incarcerated in the Monterey County Jail. During a portion of that time in jail, Jasso was a squad leader in his Norteño housing pod. Garcia, Jasso’s co-defendant, was also incarcerated there and held the position of Regiment Commander for the prison gang Nuestra Familia (“NF”). NF was in charge and controlled the criminal activities of gang inmates throughout the Monterey County Jail. The Norteño street gang is affiliated with and subordinate to the NF, and Norteño gang members pledge loyalty to the NF. Evidence showed that inside prisons and local jails, all members and affiliates of the NF, including Norteños, worked together to maintain gang structure and to follow the gang’s rules.
Trial evidence showed that Jasso conspired with other gang members to engage in attempted murders and assaults that took the form of “removals.” A removal refers to the removal of a gang member from the gang and consists of an organized attack upon the targeted victim. Any gang member in a Norteño housing unit who committed a serious violation of the rules could be subject to a removal. A removal first had to be authorized by the NF leader of the jail. The removal was then planned by the Norteño in charge of the housing unit and executed by the unit’s Norteño gang members. In the attack, one or more “hitters” stabbed the victim. The hitters were immediately followed by at least two “bombers.” Bombers viciously beat the victim. The beating by the bombers inflicted further injury to the target and continued a chaotic distraction, allowing time for the hitters to hide their weapons and wash off.
The trial focused on ten removals in the Monterey County Jail between December 2012 and April 2014. Most of the removals occurred in “K-Pod,” a cell block of housing units in Monterey County Jail that housed active Norteño members and associates exclusively. Three of the removals occurred in the jail’s main yard, during the recreation period for inmates who were housed in the lockdown pods for Norteños.
Evidence showed that Jasso played the role of a bomber in at least three removals. On December 2, 2012, one gang member, referred to as Victim-1, was removed in Monterey County Jail’s K-16 housing unit. During the removal, Victim-1 was stabbed over 20 times in the chest and back by a hitter. Immediately thereafter Jasso and another gang member punched and kicked the victim to inflict as much injury as possible, allowing the hitter to escape being caught by guards with the stabbing weapon. On February 25, 2013, another person,Victim-2, was also removed from the K-16 housing unit. The hitter in that removal stabbed Victim-2 in the head and face using a shank made from an electrical outlet plate sharpened into a stabbing instrument. Immediately thereafter the bombers – Jasso and another gang member – punched and kicked the victim to allow the hitter to escape. The wounds to Victim-2 required eight staples to his scalp and numerous stitches to his face and hand.
On April 29, 2013, Victim-3 was removed in the K-16 housing unit. As part the removal plan, Jasso falsely assured Victim-3 that Norteño leadership would not be punishing Victim-3 for his infraction, a tactic designed to cause Victim-3 to let his guard down and become an easier target. During the ensuing removal, the hitter stabbed Victim-3 repeatedly in the head. The bombers, which included Jasso, then descended upon Victim-3. As a result of the removal, Victim-3 suffered lacerations to his head requiring ten staples, a torn earlobe requiring seven sutures, and a facial droop.
Jasso was in custody at the time of his sentencing hearing and will begin to serve his sentence immediately.
The 15 defendants now convicted in this case are listed below with their charges and sentences:
Johnny Magdaleno
18 U.S.C. § 1962(d) – Racketeering Conspiracy
360 months imprisonment
Vincent Gerald Garcia
18 U.S.C. § 1962(d) - Racketeering Conspiracy
18 U.S.C. § 1959(a)(5) - Conspiracy to Commit Murder in Aid of Racketeering
18 U.S.C. § 1959(a)(6) - Conspiracy to Commit Assault With a Dangerous Weapon in Aid of Racketeering
306 months
imprisonment
Rodney Luis Romero
18 U.S.C. § 1962(d) – Racketeering Conspiracy
216 months
imprisonment
Ramon Montoya
18 U.S.C. § 1962(d) – Racketeering Conspiracy
120 months
imprisonment
Michael James Rice
18 U.S.C. § 962(d) - Racketeering Conspiracy
156 months
imprisonment
Alberto Cervantes
18 U.S.C. § 962(d) - Racketeering Conspiracy
18 U.S.C. § 1959(a)(5) - Conspiracy to Commit Murder in Aid of Racketeering
18 U.S.C. § 1959(a)(6) - Conspiracy to Commit Assault With a Dangerous Weapon in Aid of Racketeering
Custodial time already served, plus 5 years of supervised release with 730 days on home confinement
Alejo Alex Alegre, IV
18 U.S.C. § 1962(d) – Racketeering Conspiracy
120 months
imprisonment
Carlos Cervantes
18 U.S.C. § 1962(d) – Racketeering Conspiracy
120 months
imprisonment
Alberto Moreno
18 U.S.C. § 1962(d) – Racketeering Conspiracy
84 months
imprisonment
Steven Anthony Dorado
18 U.S.C. § 1962(d) – Racketeering Conspiracy
84 months
imprisonment
Michael Abraham Cazares
18 U.S.C. § 1962(d) - Racketeering Conspiracy
18 U.S.C. § 1959(a)(5) - Conspiracy to Commit Murder in Aid of Racketeering
18 U.S.C. § 1959(a)(6) - Conspiracy to Commit Assault With a Dangerous Weapon in Aid of Racketeering
96 months
imprisonment
Jeffrey Lopez
18 U.S.C. § 1962(d) – Racketeering Conspiracy
84 months
imprisonment
Juan Alvarez
18 U.S.C. § 1962(d) – Racketeering Conspiracy
120 months
imprisonment
Erik Lopez
18 U.S.C. § 1962(d) – Racketeering Conspiracy
120 months
imprisonment
Jorge Jasso
18 U.S.C. § 1962(d) - Racketeering Conspiracy
18 U.S.C. § 1959(a)(5) - Conspiracy to Commit Murder in Aid of Racketeering
18 U.S.C. § 1959(a)(6) - Conspiracy to Commit Assault With a Dangerous Weapon in Aid of Racketeering
180 months
Assistant U.S. Attorneys Stephen Meyer and Neal Hong prosecuted the case at trial with the assistance of Christine Tian, Mimi Lam, Laurie Worthen, Susan Krieder, Lynette Dixon, and Elise Etter. The prosecution is the result of an investigation by the FBI with assistance from the Monterey County Sheriff’s Office, the California Highway Patrol, the California Department of Corrections and Rehabilitation, the Salinas Police Department, the Soledad Police Department, and the Fresno Police Department.
Former Twitter Employee Sentenced to 42 Months in Federal Prison for Acting as a Foreign AgentRead the Press Release
A California man was sentenced yesterday to 42 months in federal prison for his role in accessing, monitoring and conveying confidential and sensitive information that could be used to identify and locate Twitter users of interest to the Saudi Royal Family.
Ahmad Abouammo, 45, formerly of Walnut Creek and currently residing in Seattle, was convicted of acting as a foreign agent without notice to the Attorney General, conspiracy, wire fraud, international money laundering and falsification of records in a federal investigation on Aug. 9 following a two-week jury trial.
“Mr. Abouammo violated the trust placed on him to protect the privacy of individuals by giving their personal information to a foreign power for profit. His conduct was made all the more egregious by the fact that the information was intended to target political dissidents speaking out against that foreign power,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “We are committed to holding accountable those who act unlawfully as unregistered foreign agents and advance hidden influence campaigns on behalf of foreign regimes.”
“This case revealed that foreign governments, here, the Kingdom of Saudi Arabia (KSA) will bribe insiders to obtain the user information that is collected and stored by our Silicon Valley social media companies,” said U.S. Attorney Stephanie M. Hinds for the Northern District of California. “In handing down today’s sentence, the Court emphasized that defendant shared the user information with a foreign government known for not tolerating dissidents, and he did so while working with his even more culpable co-defendant who fled to the KSA rather than face trial. This sentence sends a message to insiders with access to user information to safeguard it, particularly from repressive regimes, or risk significant time in prison.”
“This case exposes attempts by the Kingdom of Saudi Arabia to illegally obtain personally identifiable information in order to target critics and dissidents,” said Assistant Director Alan E. Kohler Jr. of the FBI’s Counterintelligence Division. “Anyone working to advance the agenda of a foreign government is required by law to register as a foreign agent of that country. Mr. Abouammo brazenly disregarded this law by exploiting his role at Twitter to not only locate and peddle user information, but to also launder money via the sale of gifts received from the Saudi Royal Family. His sentencing demonstrates the FBI’s unwavering dedication to protecting against any attempt by a foreign government to stalk, harass or intimidate the people within our borders.”
According to the evidence presented at trial, Abouammo began receiving bribes from an official of the KSA as early as December 2014. Abouammo was employed at Twitter as a Media Partnerships Manager for the Middle East and North Africa (MENA) region. Twitter policies required Abouammo to protect Twitter user information, as well as disclose conflicts of interest and report gifts from those with business with Twitter. Nevertheless, the evidence at trial demonstrated that Abouammo accepted bribes from officials of the KSA in exchange for accessing Twitter user accounts and conveying information on dissidents and critics of the KSA to their government officials and the Saudi Royal family, then lied to the FBI investigators and falsified a document when questioned about the transactions in October 2018. The official of the KSA was head of the “private office” of a royal family member who, during the relevant time, was a Minister of State and then became the Minister of Defense and Deputy Crown Prince.
The evidence showed that the foreign official met with Abouammo in London in December 2014 and provided Abouammo with a luxury Hublot watch. Abouammo later referenced the value of the watch at $42,000 when offering it for sale on Craigslist. After the meeting in London, Abouammo began repeatedly accessing private information about several Twitter accounts, at least one of which was the account of an influential user who was critical of members of the Saudi Royal Family and the KSA government. Abouammo also continued to communicate with the official of the Kingdom of Saudi Arabia, including regarding the influential critical account. Evidence at trial further showed that after Abouammo traveled to Lebanon in February 2015, a bank account was opened in the name of his father in Lebanon and Abouammo obtained access to that bank account. The account then received $100,000 in February 2015 from the foreign official and Abouammo laundered the money by sending it into the United States in small wire transfers with false descriptions. The account received another $100,000 shortly after Abouammo left Twitter for other employment, accompanied by a note from the official apologizing for the delayed payment.
In October 2018, FBI agents interviewed Abouammo at his residence about his involvement in the scheme with officials of the KSA. Evidence at trial showed that Abouammo provided false information to the FBI investigators and provided a false invoice for one of the payments he received from the foreign official.
In sentencing Abouammo, Judge Chen described Abouammo’s conduct as “serious” and “consequential” and stated that, “exposing dissident information is a serious offense.” In addition to the 42-month prison term, Judge Chen sentenced Abouammo to three years of supervision following release from prison; issued a judgment for forfeiture of $242,000, representing the watch and cash received by Abouammo as bribes; and ordered Abouammo to surrender on March 31, 2023, to begin serving his prison sentence.
The FBI investigated the case.
Assistant U.S. Attorneys Colin Sampson and Eric Cheng for the Northern District of California and Trial Attorney Christine Bonomo of the National Security Division’s Counterintelligence and Export Control Section prosecuted the case, with the assistance of Beth Margen and Alycee Lane.
Former Twitter Employee Sentenced to 42 Months in Federal Prison for Acting as A Foreign AgentRead the Press Release
SAN FRANCISCO – Ahmad Abouammo was sentenced today to 42 months in federal prison for his role in accessing, monitoring, and conveying confidential and sensitive information that could be used to identify and locate Twitter users of interest to the Saudi Royal Family, announced United States Attorney Stephanie M. Hinds, Matthew G. Olson, Assistant Attorney General, National Security Division, and Federal Bureau of Investigation Special Agent in Charge Robert K. Tripp. The sentence was handed down by Senior United States District Judge Edward M. Chen who presided over the two-week trial that concluded in Abouammo’s conviction of the crimes.
“This case revealed that foreign governments will bribe insiders to obtain the user information that is collected and stored by our Silicon Valley social media companies,” said U.S. Attorney Stephanie M. Hinds. “In handing down today’s sentence, the Court emphasized that defendant shared the user information with a foreign government known for not tolerating dissidents, and he did so working with his even more culpable co-defendant who fled the country rather than face trial. This sentence sends a message to insiders with access to user information to safeguard it, particularly from repressive regimes, or risk significant time in prison.”
“Mr. Abouammo violated the trust placed on him to protect the privacy of individuals living in the US by giving their personal information to a foreign power for profit. His conduct was made all the more egregious by the fact that the information was intended to deny US persons of their lawful rights,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division. “We are committed to holding accountable those who act unlawfully as unregistered foreign agents and advance hidden influence campaigns on behalf of foreign regimes.”
"The FBI works tirelessly to ensure foreign governments and their agents cannot interfere with the constitutionally protected right to free speech," said FBI San Francisco Special Agent in Charge Robert K. Tripp. "Today's sentence demonstrates the Bureau's dedication to following all leads to ensure perpetrators of transnational repression are brought to justice."
According to the evidence presented at trial, Abouammo, 45, formerly of Walnut Creek and currently residing in Seattle, began receiving bribes from an official of the Kingdom of Saudi Arabia (KSA) as early as December of 2014. Abouammo was employed at Twitter as a Media Partnerships Manager for the MENA region. Twitter policies required Abouammo to protect Twitter user information, as well as disclose conflicts of interest and report gifts from those with business with Twitter. Nevertheless, the evidence at trial demonstrated that Abouammo accepted bribes from officials of the KSA in exchange for accessing Twitter user accounts and conveying information on dissidents and critics of the KSA to their government officials and the Saudi Royal family, then lied to the FBI investigators and falsified a document when questioned about the transactions in October 2018. The official of the KSA was head of the “private office” of a royal family member who, during the relevant time, was a Minister of State and then became the Minister of Defense and Deputy Crown Prince.
The evidence showed that the foreign official met with Abouammo in London in December 2014 and provided Abouammo with a luxury Hublot watch. Abouammo later referenced the value of the watch at $42,000 when offering it for sale on Craigslist. After the meeting in London, Abouammo began repeatedly accessing private information about several Twitter accounts, at least one of which was the account of an influential user who was critical of members of the Saudi Royal Family and the KSA government. Abouammo also continued to communicate with the official of the Kingdom of Saudi Arabia, including regarding the influential critical account. Evidence at trial further showed that after Abouammo traveled to Lebanon in February 2015, a bank account was opened in the name of his father in Lebanon and Abouammo obtained access to that bank account. The account then received $100,000 in February 2015 from the foreign official and Abouammo laundered the money by sending it into the United States in small wire transfers with false descriptions. The account received another $100,000 shortly after Abouammo left Twitter for other employment, accompanied by a note from the official apologizing for the delayed payment.
In October 2018, FBI agents interviewed Abouammo at his residence about his involvement in the scheme with officials of the KSA. Evidence at trial showed that Abouammo provided false information to the FBI investigators and provided a false invoice for one of the payments he received from the foreign official.
Abouammo was arrested on November 5, 2019. On July 28, 2020, a federal grand jury issued a superseding indictment charging him with acting as an agent of a foreign government without providing notice to the Attorney General, in violation of 18 U.S.C. § 951; conspiracy to commit wire fraud and honest services fraud, in violation of 18 U.S.C. § 1349; six counts of honest services fraud, in violation of 18 U.S.C. § 1346; six counts of wire fraud, in violation of 18 U.S.C. § 1343; international money laundering, in violation of 18 U.S.C. § 1956(a)(2)(B)(i); falsification of records in a federal investigation, in violation of 18 U.S.C. § 1519;. On August 9, 2022, the jury acquitted Abouammo of five of the wire fraud and honest services counts and returned a verdict of guilty on all the remaining counts.
In sentencing Abouammo, Judge Chen described Abouammo’s conduct as “serious” and “consequential” and stated that, “exposing dissident information is a serious offense.” In addition to the 42-month prison term, Judge Chen sentenced Abouammo to three years of supervision following release from prison; issued a judgment for forfeiture of $242,000, representing the watch and cash received by Abouammo as bribes; and ordered Abouammo to surrender on March 31, 2023, to begin serving his prison sentence.
Assistant U.S. Attorneys Colin Sampson and Eric Cheng and National Security Division Trial Attorney Christine Bonomo prosecuted the case with the assistance of Beth Margen and Alycee Lane. The prosecution is the result of an investigation by the Federal Bureau of Investigation.
Southern California Man Pleads Guilty to Cryptocurrency FraudRead the Press Release
SAN FRANCISCO – Ryan Mark Ginster pleaded guilty today in federal court to wire fraud involving an online investment website designed to defraud investors, announced United States Attorney Stephanie M. Hinds and Special Agent in Charge Darrell J. Waldon of the Internal Revenue Service-Criminal Investigation Washington D.C. Field Office.
In a written plea agreement he entered today, Ginster, 35, of Corona, California, admitted that he operated a website beginning in February 2018 called Socialprofimatic.com. He designed the website with the intent to defraud investors by making false representations about cryptocurrency investment opportunities. On Socialprofimatic.com, Ginster represented that investments with Socialprofimatic.com would receive returns of 8% a day and claimed that “This will be JOB REPLACING income, the income that will pay you every hour of every day even when your [sic] sleeping or on holiday.” He further claimed on the website that investors could “request your profits at any time you want and they’ll be INSTANTLY paid to your Bitcoin/Litecoin wallet.” Ginster admitted these and numerous other claims on his website were entirely false and intended solely to influence investors to part with their money or property. In the 38 days that the Socialprofimatic.com website was active, the website received approximately 9,026 deposits of bitcoin totaling approximately 98.12089739 BTC, valued at the time at approximately $844,667. Ginster admitted he did not invest the funds but instead deposited these funds into his own cryptocurrency wallet. That cryptocurrency is now worth over $1.6 million.
Ginster entered his guilty plea before United States District Judge Jacqueline Scott Corley, who scheduled a sentencing hearing for Ginster on March 29, 2023, at 9:00 a.m. Ginster remains out of custody pending sentencing.
Ginster pleaded guilty to one count of wire fraud in violation of Title 18, United States Code, Section 1343, which carries a maximum sentence of 20 years in prison. Any sentence following conviction, however, would be imposed only by a court only after its consideration of the United States Sentencing Guidelines and the federal statute governing sentencing, 18 USC § 3553.
The case is being prosecuted by the Corporate and Securities Fraud Section of the U.S. Attorney’s Office for the Northern District of California. This prosecution is the result of an investigation by the IRS-CI Washington D.C. Cyber Crimes Unit.
The Los Angeles Regional Office of the Securities and Exchange Commission also filed a civil enforcement action against Ginster in the Central District of California. That action is pending.
If you believe you have been a victim of this fraud scheme, please contact IRS-Criminal Investigation at [email protected] or go to the following website:
https://www.justice.gov/usao-ndca/us-v-ryan-mark-ginster-22-cr-00374-jsc
The criminal complaint in this matter can be viewed on PACER or by visiting the website for the U.S. Attorney’s Office for the Northern District of California at www.justice.gov/usao-ndca where press releases are posted.
Washington State Felon Convicted of Unlawful Possession of an Assault Rifle and AmmunitionRead the Press Release
OAKLAND – James David Allen, II, was convicted of being a felon in possession of a firearm and ammunition by a federal jury, announced United States Attorney Stephanie M. Hinds and Federal Bureau of Investigation Special Agent in Charge Robert K. Tripp. The verdict follows a three-day jury trial before Honorable Haywood S. Gilliam, Jr., U.S. District Court Judge.
Evidence at trial showed that Allen, 37, of Everett, Washington, had been previously convicted of a felony and was found by Pinole Police Department officers asleep in a reported stolen vehicle in a residential neighborhood in Pinole, Calif. Allen told the officers he was on his way from Washington State to San Francisco, Calif. A search of the vehicle revealed a loaded AR-15-style semiautomatic rifle. The rifle was immediately accessible to the driver’s hand having been pointed barrel down with the rear stock leaning against the front edge of the passenger seat. The weapon was equipped with a loaded, high-capacity 30-round magazine. Upon taking possession of the rifle, the arresting officers found a live round chambered and the fire control switch set to “fire.” A second loaded, high-capacity 30-round magazine was taped to the first magazine; the second magazine was positioned opposite so that the shooter could drop the first magazine from the rifle and easily flip it over to insert the other loaded magazine. In addition, a third loaded, high-capacity magazine was found in the trunk of the vehicle.
Additional evidence at trial demonstrated that the rifle had hand-drawn markings on the rifle, including Allen’s initials (JDAII) and his alias. The arresting officers found a total of 79 rounds of 5.56 millimeter NATO caliber ammunition that matched the barrel of the rifle. Evidence submitted at trial included Allen’s statement when being transported to the Martinez Detention Facility that he wished the officers had done a traffic stop instead, because he would have “shot it out” with them.
A federal grand jury indicted Allen on July 23, 2020, charging him with one count of being a felon in possession of a firearm and ammunition, in violation of 18 U.S.C. 922(g)(1). Allen was convicted of the offense in November 2020; however, the original conviction was vacated on appeal after the Court of Appeals concluded the COVID-19 pandemic-related restrictions on public access to the courtroom during his trial violated federal constitutional guarantees to a public trial.
Judge Gilliam scheduled Allen’s sentencing hearing for March 1, 2023. The maximum statutory penalty for a violation of 18 U.S.C. § 922(g)(1) is 10 years’ imprisonment and a fine of $250,000. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorneys Noah Stern and Kelly Volkar are prosecuting the case with the assistance of Lance Libatique. The prosecution is the result of an investigation by the FBI and Pinole Police Department.
Leader of East Bay-Based Fentanyl Trafficking Organization Sentenced to 10 Years in PrisonRead the Press Release
OAKLAND – Javier Castro Banegas-Medina (Castro) was sentenced to 120 months in federal prison for leading a fentanyl drug trafficking organization in the East Bay, announced United States Attorney Stephanie M. Hinds and Federal Bureau of Investigation Special Agent in Charge Robert K. Tripp. The search of Castro’s residences led to what was then the largest seizure of fentanyl in the Bay Area. The sentence was handed down by the Hon. Yvonne Gonzalez Rogers, United States District Judge.
Castro, 41, and two of his two co-conspirators, Elmer Rosales-Montes, 29, and Jose Ivan Cruz-Caceres, 32, admitted in separate plea agreements to their respective roles in the scheme. On July 28, 2022, Castro entered into a written plea agreement in which he acknowledged that, as the leader of the organization, he conspired with others to distribute more than 10 kilograms (22 pounds) of fentanyl. The drug trafficking organization distributed fentanyl from two residences, one located in San Leandro and the other in Oakland, where Castro lived with Rosales-Montes and Cruz-Caceres. Castro admitted that he and his co-members of the drug trafficking organization fulfilled well over 100 orders for fentanyl between approximately April 21, 2021, and May 19, 2021. During the searches of the residences, investigators recovered approximately 10 kilograms of fentanyl and hundreds of rounds of ammunition in multiple calibers that had been hidden in fenceposts surrounding the Oakland property. Investigators also seized a total of $31,400 in drug trafficking proceeds, as well as other equipment associated with drug distribution including dyes, scales, and blenders.
On February 24, 2022, Castro was charged by information with one count of possession with intent to distribute 40 grams or more of fentanyl, in violation of 21 U.S.C. §§ 846, 841(a)(1) and (b)(1)(B)(vi). Pursuant to his plea agreement, he pleaded guilty to the charge.
In addition to the prison term, Judge Gonzalez Rogers also ordered Castro to serve four years of supervised release, to begin after his prison term is completed.
Judge Gonzalez Rogers also sentenced Rosales-Montes and Cruz-Caceres to 26- and 60-month prison terms, respectively, for their roles in the conspiracy.
Assistant U.S. Attorneys Benjamin Kleinman and Noah Stern prosecuted the case with the assistance of Katie Turner, Kay Konopaske, Leeya Kekona, Karina Ruiz, and Mimi Lam. The prosecution is the result of an investigation by the Federal Bureau of Investigation, the Drug Enforcement Administration, and the Alameda County Sheriff’s Office. This investigation and prosecution are being conducted under the auspices of the Organized Crime Drug Enforcement Task Force, which identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
San Francisco Senior Building Inspector Pleads Guilty to Accepting Illegal GratuitiesRead the Press Release
SAN FRANCISCO - Bernard Curran, a former San Francisco Senior Building Inspector, pleaded guilty today to two counts of accepting gratuity payments as rewards for approving building permits, announced United States Attorney Stephanie M. Hinds and Federal Bureau of Investigation Special Agent in Charge Robert K. Tripp.
Curran, 62, of San Francisco, was employed at the San Francisco Department of Building Inspection (DBI) from 2005 until he resigned from his supervisory position as Senior Building Inspector while on administrative leave in May 2021. Curran’s official duties included conducting physical inspections of buildings and construction sites in San Francisco. For a San Francisco property owner intending to shepherd a construction or remodeling project from inception to completion, the first hurdle is to obtain a permit from DBI. Once the permit is obtained and the work is underway, the next hurdle is to pass on-site physical inspections by DBI inspectors who determine whether the work completed complies with the work authorized by the permit. If a project passes all inspections and is deemed completed successfully, DBI inspectors “final” the permits and issue a certificate of final completion and occupancy (CFC), allowing the property to be used.
In his plea agreement today, Curran admitted that he accepted illegal payments from two people in connection with his official duties. The first was a long time San Francisco real estate developer who Curran developed a friendship with in the 1990s. Over time, Curran inspected dozens of properties and projects connected to the developer. Curran admitted that during his DBI career, he received numerous financial benefits from the developer that he knew were improper. Upon Curran being promoted to Senior Building Inspector in 2009, he accepted cash payments as “rewards” from the developer in connection with final inspections and/or CFC issuances that Curran conducted at the developer’s properties. In one instance in March 2017, Curran accepted $260,000 from the developer to assist Curran in paying down his existing residential mortgage so he could obtain favorable refinancing rates. Though Curran intended to repay the money, he knew that accepting it was improper and created a forbidden conflict of interest. Moreover, though Curran paid most of the $260,000 back, he admitted the developer never required him to repay $30,000 of the outstanding balance. Curran understood that the $30,000 debt forgiveness was an improper reward for conducting past and future inspections at the developer’s building projects.
The second person Curran admitted receiving illegal gratuities from was an engineer who worked with project owners and contractors seeking building permits in San Francisco. The engineer worked frequently with Curran and knew he was a volunteer coach and supporter of a San Francisco non-profit adult and youth athletic organization. Curran admitted in his plea agreement that the engineer arranged for the engineer’s clients to make charitable donations to the athletic organization as rewards for and in connection with inspections by Curran of the clients’ properties. The donations were typically made by check and several times were delivered directly to Curran, who in turn delivered the checks to the athletic organization. According to the plea agreement, in several instances the engineer advised Curran of a client’s donation while asking for a final permit or inspection on the client’s property. From May 2017 through April 2019 the athletic organization received 13 such checks from the engineer’s clients, totaling $9,600. Curran admitted that he took official action for each of the clients who wrote the 13 checks, knowing this conduct was not permitted.
Curran entered his guilty pleas before United States District Judge Susan Illston, who scheduled a sentencing hearing for Curran on March 31, 2023. Curran remains out of custody pending his sentencing hearing.
Curran pleaded guilty to two counts of accepting illegal gratuities in violation of 18 U.S.C. § 666(a)(1)(B). Each count carries a maximum statutory term of imprisonment of 10 years. However, any sentence following conviction imposed by the court will occur only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The Special Prosecutions Section of the U.S. Attorney’s Office for the Northern District of California is prosecuting the case. The prosecution is the result of an investigation by the Federal Bureau of Investigation.
This case is part of a larger federal investigation targeting public corruption in the City and County of San Francisco. To date, twelve individuals have been charged, including high-ranking San Francisco public officials Harlan Kelly and Mohammed Nuru. Nuru was sentenced to seven years in federal prison in August 2022. Multiple city contractors and facilitators have also been charged and several have been sentenced to prison.
Jury Convicts Former Federal Prison Warden for Sexual Abuse of Three Female InmatesRead the Press Release
OAKLAND – A federal jury convicted former prison warden Ray J. Garcia of seven counts involving sexually abusive conduct against three female victims who were serving prison sentences and one count of making false statements to government agents.
“Today’s guilty verdict is one important step in our ongoing efforts to root out sexual misconduct within the Bureau of Prisons,” said U.S. Deputy Attorney General Lisa O. Monaco. “It also delivers justice to the victims in this case, who were repeatedly subjected to the defendant’s egregious sexual abuse and gross exploitation of power. As this verdict illustrates, the Department of Justice is committed to prosecuting cases of criminal misconduct by Bureau employees and to holding accountable all who violate their duty to protect those in their custody.”
“The evidence presented at trial demonstrated that FCI Dublin’s former warden, whose responsibility was not only to assure the care and welfare of individuals incarcerated at his institution but also to demonstrate to employees that unethical and illegal conduct from prison officials would not be tolerated, used his authority instead to prey sexually upon female inmates under his control,” said United States Attorney Stephanie M. Hinds. “The jury heard the evidence of these despicable acts, and its guilty verdicts hold the former warden accountable for his crimes. I thank the DOJ OIG and the FBI for their hard work on this case and the jury for its service and attentiveness to the evidence we presented.”
“Garcia exploited his authority, sexually abused three inmates, repeatedly lied to try to cover up his crimes, and fostered a culture of abuse at FCI Dublin. The Department of Justice Office of the Inspector General will continue to bring to justice any BOP employee who abuses inmates,” said Department of Justice Inspector General Michael E. Horowitz.
“Today, a jury convicted Ray J. Garcia of abusing his position at FCI Dublin to sexually abuse three female victims who were incarcerated and placed in his care. He betrayed his responsibility and the public’s trust,” said FBI Special Agent in Charge Robert K. Tripp. “The FBI is committed to protecting the civil rights of all victims, and hold accountable individuals in positions of trust who violate those rights under the color of law.”
Garcia, 55, of Merced, Calif., was initially charged with sexual abuse of an inmate on September 24, 2021. A federal grand jury issued a superseding indictment on August 23, 2022, charging Garcia with three counts of sexual abuse and four counts of abusive sexual contact against three female inmates. The criminal acts were alleged to have occurred from December 2019 to July 2021. The superseding indictment also charged Garcia with one count of making false statements to a government agency during the investigation of the criminal acts.
Today, a jury convicted Garcia of all counts.
Trial evidence showed that Garcia was employed as an Associate Warden and later as the Warden of the Federal Correctional Institute in Dublin, Calif. (FCI Dublin), an all-female low security federal correctional institution. All three of the victims were incarcerated and serving their prison sentences at FCI Dublin under the custodial, supervisory, and disciplinary authority of Garcia when the crimes occurred.
The jury convicted Garcia of three counts of sexual abuse and one count of sexually abusive contact against an inmate referred to as Victim 1. Trial evidence showed that Garcia’s sexual abuse and abusive sexual contact against Victim 1 began in December 2019 and extended through March 2020. During this time period, Garcia would encounter Victim 1 in and around the prison visitation room, including in an attached bathroom and an inmate changing stall. In these areas, Garcia would engage in sexual contact with Victim 1.
Garcia was also convicted of two counts of abusive sexual contact with Victim 2, both acts occurring in the time period of January to July 2021. Trial evidence showed that the acts occurred in a warehouse within the prison grounds and also in Victim 2’s prison cell. These areas, generally out of the immediate view of others, were where Garcia would engage in abusive sexual contact with Victim 2.
The jury also convicted Garcia of abusive sexual contact with Victim 3 during the period of March to September 2020. Garcia engaged in this sexual contact of Victim 3 in the prison’s electrical shop.
The jury lastly convicted Garcia of making false statements to a government agency on July 22, 2021. On that date, Garcia was interviewed by government law enforcement agents during the investigation of his sexual conduct with inmates. Evidence at trial showed that Garcia falsely claimed he had never asked inmates to be undressed for him and that had he never touched an inmate inappropriately. Trial evidence showed that Garcia had already asked multiple inmates to undress for him and had also touched Victim 1, Victim 2, and Victim 3 all in a sexual manner.
Garcia was convicted of three counts of sexual abuse of a ward in violation of 18 U.S.C. § 2243(b), and each count carries a maximum term of imprisonment of 15 years. The jury convicted Garcia of four counts of abusive sexual conduct in violation of 18 U.S.C. § 2244(a)(4), and each count carries a maximum term of two years imprisonment. The jury also convicted Garcia of making false statements to a government agency in violation of 18 U.S.C. § 1001(a)(2), which carries a maximum sentence of 8 years imprisonment. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing imposition of a sentence, 18 U.S.C. § 3553.
United States District Judge Yvonne Gonzalez Rogers, who presided over the trial, set a sentencing date for March 8, 2023, at 2 p.m. Garcia remains out of custody pending his sentencing hearing.
U.S. Deputy Attorney General Lisa O. Monaco, U.S. Attorney Stephanie M. Hinds, DOJ Inspector General Inspector General Michael E. Horowitz, and FBI Special Agent in Charge Robert K. Tripp made the announcement.
The case is being prosecuted by Assistant U.S. Attorneys Molly Priedeman and Andrew Paulson, with the assistance of Madeline Wachs, Leeya Kekona, and Sara Slattery. The prosecution is the result of an investigation by the DOJ OIG and the FBI.
Theranos President Sentenced to More Than 12 Years for Fraud That Jeopardized Patient Health and Bilked Investors of MillionsRead the Press Release
SAN JOSE – Ramesh “Sunny” Balwani was sentenced today to 155 months (12 years, 11 months) in federal prison for fraud that risked patient health by misrepresenting the accuracy of Theranos blood analysis technology and that defrauded Theranos investors of millions of dollars, announced United States Attorney Stephanie M. Hinds, Federal Bureau of Investigation Special Agent in Charge Robert K. Tripp, Food and Drug Administration (FDA) Assistant Commissioner for Criminal Investigations Catherine A. Hermsen, and U.S. Postal Inspection Service (USPIS) San Francisco Division Acting Inspector in Charge Kevin Rho. United States District Judge Edward J. Davila presided over his jury trial and imposed today’s sentence.
“Patient health is the highest priority of our healthcare system, and Silicon Valley has long been home to healthcare start-ups that enhance the care of patients through technological developments,” said U.S. Attorney Stephanie M. Hinds. “Ramesh Balwani, in a desire to become a Silicon Valley titan, valued business success and personal wealth far more than patient safety. He chose deceit over candor with patients in need of medical care, and he treated his investors no better. Today’s sentence should serve as a lesson to anyone considering fraud in their own push for success.” A link to a video statement by U.S. Attorney Hinds is available here: https://youtu.be/GmA6GqCng_8.
“Balwani not only deliberately concealed defects in Theranos' blood-testing technology to mislead investors, he knowingly put patients’ health at risk,” said FBI Special Agent in Charge Robert Tripp. “Today's sentence reflects years of dedication by the FBI and our partners to investigate fraud within Theranos and bring the company's leadership to justice.”
“Patients and their doctors rely on accurate, reliable test results to ensure a proper diagnosis of their condition. When individuals jeopardize patient health and put profits above the public health, the FDA will continue to investigate and bring them to justice,” said FDA Assistant Commissioner for Criminal Investigations Catherine A. Hermsen.
“Postal Inspectors and our law enforcement partners will continue to bring criminals to justice for schemes to defraud investors looking for innovation or concerned patients seeking health care,” said USPIS San Francisco Division Acting Inspector-In-Charge Kevin Rho. “Today’s sentence should be considered a serious message to anyone else who would engages in high tech medical quackery.”
Balwani, 57, of Fremont, Calif., was employed from September 2009 through July 2016 at Theranos, Inc. Over time he held the positions of board member, chief operating officer and president. Theranos, now defunct, was a blood testing company based in Palo Alto and Newark, Calif., that was founded in 2003 by Balwani’s former romantic partner Elizabeth Holmes, 38, of Woodside, Calif. Trial evidence showed that Balwani and Holmes, who was chairperson and CEO, claimed Theranos developed a revolutionary blood analyzer, variously referred to as the Theranos Sample Processing Unit (TSPU), the Edison, and the minilab. They described the Theranos blood analyzer device as a single device that could run any blood test run by conventional labs using only a small blood sample drawn via a fingerstick, rather than the traditional draw from a vein. Balwani and Holmes asserted that the Theranos proprietary analyzer produced results that were cheaper, more reliable and less variable than existing methods, and obtained results at a speed faster than ever before possible.
Among many other representations, Balwani reviewed and approved a 2013 Wall Street Journal article suggesting that Theranos had “devices that automate and miniaturize more than 1,000 laboratory tests” and stating that “Theranos’ processes are faster, cheaper, and more accurate than the conventional methods” and that “Theranos’ technology eliminates multiple lab trips because it can ‘run any combination of tests, including sets of follow-on tests,’ at once, very quickly, all from a single microsample.”
The descriptions approved by Balwani were false and misleading. Trial evidence demonstrated that both Balwani and Holmes knew that the analyzer performed only a few basic tests and was slower than existing devices. They repeatedly resorted to using conventional machines to obtain the blood test results that the Theranos analyzer was supposed to perform. However, they led investors and the public to believe that Theranos was conducting essentially all of its tests using only its Theranos analyzer. Evidence demonstrated that Balwani and Holmes were aware that the Theranos analyzer’s limited capabilities meant it could not compete in the market, but they nevertheless trumpeted false claims and representations about the analyzer’s capabilities and conspired to convince patients and investors that the claims were true.
Evidence at trial and examples in a sentencing memorandum filed by the government demonstrate the dark reality these misrepresentations created for patients. To portray Theranos as a legitimate enterprise, Theranos eventually offered the blood analyzer to the public to perform a “full range” of tests, despite internal protests from Theranos employees and even resignations by staff. Numerous misdiagnoses followed. A physician who testified at trial had sought Theranos testing and repeatedly received extremely elevated PSA results in comparison to earlier conventional tests. Elevated PSA is an indicator of prostate cancer. The Theranos results were later proved inaccurate when traditional, FDA-approved methods tests were run. In another example, a pregnant woman who had suffered multiple miscarriages obtained HCG values from Theranos testing that strongly indicated she was miscarrying again. However, confirmatory tests by conventional methods indicated a viable pregnancy, and the woman went on to deliver a healthy baby. This scenario played out with multiple pregnant women who received erroneous HCG results from Theranos tests. Even Theranos employees were not immune from inaccurate tests. One Theranos employee took blood-thinning medicine due to a history of blood clots and, when tested at Theranos, received a series of results that showed markedly different levels from previous conventional tests. As a result, a doctor adjusted employee’s medication. Confirmatory testing at a traditional lab showed the employee’s levels were normal; the medication adjustment had been unnecessary.
These types of test results occurred many times. Theranos itself eventually concluded a patient impact existed for every test run on a patient and voided all tests with its analyzer.
Amidst their repeated technology failures, trial evidence showed that Balwani and Holmes chose to continue deceiving their investor-victims and to proceed with the elaborate investor fraud conspiracy. They induced dozens of investors, many of whom were prominent public figures, to invest hundreds of millions of dollars in Theranos by using consistently glowing but false representations to investors and potential investors about the analyzer’s progress and its capabilities. Balwani and Holmes asserted to investors that the Theranos technology had been comprehensively validated by multiple major pharmaceutical companies and was being used by the Department of Defense to treat wounded soldiers where, it was represented, it “actually saved lives in the battlefield.” In truth, pharmaceutical companies did little work with Theranos and did not validate its technology, and the Department of Defense never used Theranos’ analyzer to clinically treat soldiers. False representations were also made that Theranos would dramatically increase its number of Wellness Centers within stores operated by its partner Walgreens from a few dozen to 900, despite Balwani and Holmes knowing at the time that the relationship with Walgreens was stagnating.
Trial evidence demonstrated that Balwani and Holmes continued to tout Theranos’ analyzer as a revolution in healthcare while misrepresenting the dire financial status of Theranos. Despite Theranos having zero revenue in 2012 and 2013, they represented to investors in late 2013 and 2014 that Theranos had hundreds of millions in revenue from a combination of pharmaceutical companies and the military. Balwani conspired to induce Walgreens and Safeway to invest in Theranos based on false pharmaceutical company endorsements and fantastical revenue projections. By March 2015, Theranos raised more than $730 million dollars from “Series C-1” and “Series C-2” investors who invested subsequent to Theranos’ public relations push in 2013.
Trial evidence showed the fraud brought spectacular personal wealth to Balwani. Balwani owned nearly 30 million shares of Theranos – over 6% of the company – which were worth hundreds of millions of dollars at the peak of the fraud. The government’s sentencing memo points out that, like Holmes, Balwani enjoyed the perks of serving as a Silicon Valley titan. Balwani’s yearned to “build the true American empire. A monopoly. Our obligation to USA.”Federal criminal charges were initially filed against Balwani and Holmes on June 14, 2018. On July 28, 2020, a federal grand jury returned a superseding indictment charging both with two counts of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349, and ten counts of wire fraud, in violation of 18 U.S.C. § 1343. Of the two conspiracy counts, one alleged Balwani and Holmes conspired to defraud investors and the second alleged Balwani and Holmes conspired to defraud patients who used Theranos services. Some of the ten counts of wire fraud alleged Balwani and Holmes committed fraud on individual investors while others alleged Balwani and Holmes defrauded patients who were induced to purchase Theranos services.
On July 7, 2022, after a four month trial, a federal jury convicted Balwani of all counts.
Balwani was tried separately from Holmes, and in her trial Holmes was not convicted of all counts. On January 3, 2022, a different federal jury convicted Holmes of one count of conspiracy to commit fraud on investors and three counts of committing fraud on individual investors, which involved wire transfers totaling more than $140 million. The jury acquitted Holmes of the patient-related fraud conspiracy count and the three counts of fraud against individual patients. The jury could not reach a unanimous verdict with respect to three individual investor fraud counts against Holmes. An additional count of wire fraud relating to a Theranos patient had been dismissed during trial. On November 18, 2022, U.S. District Judge Davila sentenced Holmes to 135 months (11 years, 3 months) in federal prison. She was ordered to surrender to begin serving her sentence on April 27, 2023.
In addition to the 155 month prison term, U.S. District Judge Davila sentenced Balwani to three years of supervision following release from prison. A hearing to determine the amount of restitution to be paid by Balwani is to be scheduled in the future. Balwani was ordered to surrender on March 15, 2023, to begin serving his prison sentence.
Assistant U.S. Attorneys Robert S. Leach, Jeff Schenk, John C. Bostic, and Kelly Volkar prosecuted the case with the assistance of Madeline Wachs, Lakisha Holliman, Sara Slattery, Elise Etter, Susan Kreider, and Leeya Kekona. The prosecution is the result of an investigation by the FBI, USPIS, and the FDA Office of Criminal Investigations.
San Jose Man Pleads Guilty to Illegally Possessing A Short-Barreled Rifle and AmmunitionRead the Press Release
SAN JOSE – Mark Dehart pleaded guilty in federal court today to possessing an unregistered short-barreled rifle and to being a felon in possession of ammunition, announced United States Attorney Stephanie M. Hinds and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Acting Special Agent in Charge Joshua E. Jackson.
In a plea agreement he entered today, Dehart, 45, of San Jose, admitted that he was a convicted felon and that on June 29, 2021, law enforcement officers engaged in a parole compliance check at his residence. The law enforcement officers found a rifle with a barrel less than 9 inches long that was privately made, unregistered, and illegal to possess. Law enforcement also found ammunition that Dehart, being a convicted felon, could not possess legally. During the search of his residence, law enforcement officers also discovered a loaded Polymer80 brand .22 caliber privately made pistol with no serial number, an AR-15 style 5.56 caliber rifle which was also privately made and bore no serial number, and four firearm silencers, also all lacking serial or registration numbers. Dehart further admitted in his plea agreement that he possessed two machinegun conversion devices commonly known as a “Glock switches” that convert Glock semi-automatic pistols into machineguns. He also admitted that he possessed at least an ounce of methamphetamine packaged in multiple individual baggies.
Dehart entered his guilty pleas before United States District Judge Edward J. Davila, who scheduled a sentencing status hearing for Dehart on February 27, 2023. Dehart remains out of custody pending his sentencing hearing.
Dehart pleaded guilty to one count of possessing an unregistered short-barreled firearm in violation of 26 U.S.C. § 5861(d), which carries a maximum statutory term of imprisonment of 10 years. He also pleaded guilty to one count of being a felon in possession of ammunition in violation of 18 U.S.C. § 922(g)(1), which also carries a 10 year maximum term of imprisonment. However, any sentence following conviction imposed by the court will occur only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Christoffer Lee is prosecuting the case, with the assistance of Lynette Dixon and Lance Libatique. The prosecution is the result of an investigation by ATF, the Department of Homeland Security - Homeland Security Investigations, the Santa Clara Police Department, and the Santa Clara County Specialized Enforcement Team.
This case follows the U.S. Department of Justice’s launch in five key regions of Cross-Jurisdictional Firearms Trafficking Strike Forces that are focused on disrupting illegal firearms trafficking. One of the five Strike Forces was launched here, in the San Francisco Greater Bay Area and Sacramento Region. The Strike Force identifies sources of illegally trafficked firearms and disrupts straw purchasing as well as firearms trafficking networks by collaborating in cross-jurisdictional efforts that include multiple federal agencies and multiple states and their local law enforcement agencies.
Two Men Sentenced to Life for Shootout on Crowded San Francisco Street That Killed One and Injured FourRead the Press Release
SAN FRANCISCO – Robert Manning and Jamare Coats were sentenced today to life in federal prison for a murder committed in a March 23, 2019, shootout in front of San Francisco’s Fillmore Heritage Center that also wounded four innocent bystanders, announced United States Attorney Stephanie M. Hinds and Federal Bureau of Investigation Special Agent in Charge Robert K. Tripp. The sentence was handed down by United States District Judge William Alsup.
Manning, 31, and Coats, 29, both of San Francisco, were each convicted by a federal jury on August 15, 2022, of murder in aid of racketeering and of being a felon in possession of a firearm. At trial, evidence showed that Manning and Coats were active members of an established criminal street gang called Mac Block. The gang operated in San Francisco’s Western Addition, and its members engaged in racketeering activities, including murder, attempted murder, robbery, drug dealing, and other crimes. Evidence at trial established that Mac Block qualified as a criminal racketeering enterprise under the Violent Crimes in Aid of Racketeering Activity (VICAR) statute.
The trial evidence focused on the events of the evening of March 23, 2019, outside of the Fillmore Heritage Center located in San Francisco’s Fillmore District. Manning and Coats, each a prior convicted felon, were armed with firearms at the time. On a crowded sidewalk in front of the Heritage Center, Coats and an associate engaged in a shootout with the murder victim, a young man, which involved the firing of at least 24 shots. Coats and the associate, with the aid of Manning, shot and killed the victim. During the shootout, four bystanders who were not involved in the dispute were struck by bullets.
In memorandums filed for sentencing, the government detailed the evidence at trial of the murder. On the evening of the murder, Manning and Coats and other Mac Block members and associates were inside the Heritage Center where a funeral repass was occurring. The victim acted disrespectfully towards them, branding a firearm and threatening Mac Block members and associates. Manning became the most agitated in response. He, Coats, and others left the Center and hurried several blocks south to parked cars. Manning opened his car, provided the associate with a semi-automatic pistol and kept an automatic Glock firearm for himself. Coats continued to his own car parked nearby in Mac Block territory and drove it to the Heritage Center, where he parked. Manning stormed back to the front of the Heritage Center and angrily pushed towards the victim, fighting to get past peacemakers who were trying to resolve the conflict. Coats got out of his car carrying a .45 caliber semi-automatic pistol and approached. The peacemakers attempted to push Coats back as he pushed forward towards the victim. Coats, Manning, and the associate were able to spread out around the victim. The victim fired a shot, and Coats ducked into an alcove. The associate exchanged gunfire with the victim. The victim went to the ground, and the associate ran. Coats then began shooting at the victim. He fired four shots in quick succession at the victim, paused several seconds, then fired two more times. The six shots fired by Coats all occurred after the victim and the associate had both stopped shooting.
The victim did not survive his wounds. One uninvolved bystander who was shot in the crossfire is now paralyzed from the waist down and expected to remain so for life. Three other innocent passersby were shot. Victim impact statements illustrate that despite surviving “minor” gunshot wounds, the shooting dramatically changed lives of some passersby and those of their families.
Coats was convicted of committing a VICAR murder as a principal, and Manning was convicted of aiding and abetting the VICAR murder. For their VICAR murder convictions, each defendant faced a mandatory sentence of life in prison. U.S. District Judge Alsup also sentenced them to 10 years for each defendant’s felon in possession of a firearm conviction, with those sentences running concurrent to their life sentences. The defendants were in custody at their sentencing hearings and will begin to serve their sentences immediately.
The Organized Crime Strike Force of the U.S. Attorney’s Office prosecuted the case. The prosecution is the result of an investigation by the Federal Bureau of Investigation and the San Francisco Police Department.