Northern District of California

SAN FRANCISCO- On August 7, 2019, U.S. Attorney David L. Anderson announced a new federal initiative to address crime in San Francisco’s Tenderloin District. The program, called the Federal Initiative for the Tenderloin (FIT), has brought together the resources of more than 15 federal law enforcement agencies to combat endemic drug trafficking, firearms offenses, robberies and other crime in the neighborhood. U.S. Attorney Anderson pledged to assign 15 federal prosecutors to handle cases brought against offenders violating federal law in the neighborhood.

“The Tenderloin is a wonderful neighborhood mostly populated by good people leading law-abiding lives,” said U.S. Attorney Anderson.  “It is not fair to tolerate lawlessness in the Tenderloin that we simply would not accept in other neighborhoods in San Francisco.  The good people of the Tenderloin should have equal access to schools, stores, transportation, and other services without having to run a gauntlet of crime.”     

The Tenderloin neighborhood encompasses about 50 square blocks of downtown San Francisco.  Generally, it is bounded on the north by Geary Street, on the east by Powell Street, on the south by Mission Street, and on the west by Van Ness Avenue.  The FIT initiative has prioritized federal charges for criminal misconduct with a nexus to the Tenderloin.

Since announcing the initiative, cases have involved a broad array of criminal conduct ranging from mail theft to attempted murder.  Cases brought against defendants also include charges of bank fraud, escape, firearms offenses, transportation of child pornography and conspiracy to commit sex trafficking of a minor.  So far, 244 defendants have been charged and 114 have been sentenced.  Sixteen cases were resolved in just the past six months, including the following:

Defendant Name

Sentence imposed

Charges

Manuel Arteaga (aka Angel David Centeno)

36 months

Conspiracy to Distribute methamphetamine, cocaine base, and heroin, in violation of 21 U.S.C. §§ 841(a), 846

Arturo Salamanca

65 months

 

Possession of Child Pornography, in violation of 18 U.S.C. § 2252(a)

Darwin Villatoro

28 months

Possession with Intent to Distribute heroin and cocaine base, in violation of 21 U.S.C. § 841(a)

Brazil Harris

40 months

Possession with Intent to Distribute methamphetamine, in violation of 21 U.S.C. § 841(a), and Felon in Possession of a Firearm and Ammunition, in violation of 18 U.S.C. § 922(g)(1)

Chantel Williams

81 months

Conspiracy to Commit Sex Trafficking of a Minor, in violation of 18 U.S.C. § 1594(C)

U.S. Attorney Anderson pledged to continue with the effort for a minimum of one year and there are no current plans to terminate or provide an end date for the initiative.

SACRAMENTO, Calif. — A federal grand jury returned a two-count indictment today against Tyson Farrell, 26, of Redding, charging him with being a felon in possession of a firearm, U.S. Attorney McGregor W. Scott announced.

According to court documents, Farrell was arrested twice in the span of five months and found to be in possession of a firearm each time. Farrell has multiple felony convictions and may not legally possess firearms.

On Sept. 16, 2020, while driving without a valid license, Farrell was stopped by a law enforcement officer who noticed that Farrell’s car had a nonfunctioning brake light, in violation of the California Vehicle Code. Farrell was on post release community supervision from a prior conviction and found to have a partially dismantled Ruger Model 77/17 in the back seat.

On Jan. 10, 2021, a police officer stopped a car in which Farrell was a passenger, having recognized the driver and knowing he was driving on a restricted license. The officer also recognized Farrell and confirmed through a records check that Farrell was the subject of a pending felony warrant. The officer searched the car and recovered a Colt .38 caliber revolver from a laundry bag in the car’s back seat where Farrell had been sitting.

This case is the product of an investigation by the Redding Police Department, the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Shasta County District Attorney’s Office. Assistant U.S. Attorney James Conolly is prosecuting the case.

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

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally based strategies to reduce violent crime. To learn more about Project Safe Neighborhoods, go to www.justice.gov/psn.

A federal grand jury issued a superseding indictment charging Chen Song with visa fraud, obstruction of justice, destruction of documents, and false statements in connection with a scheme to conceal and lie about her status as a member of the People’s Republic of China’s military forces while in the United States, the Justice Department announced yesterday. 

“We allege that while Chen Song worked as a researcher at Stanford University, she was secretly a member of China’s military, the People’s Liberation Army,” said U.S. Attorney David L. Anderson for the Northern District of California. “When Song feared discovery, she destroyed documents in a failed attempt to conceal her true identity. This prosecution will help to protect elite institutions like Stanford from illicit foreign influences.”

"Members of the Chinese People's Liberation Army cannot lie on their visa applications and come to the United States to study without expecting the FBI and our partners to catch them." said Assistant Director Alan E. Kohler Jr. of the FBI's Counterintelligence Division. "Time and again, the Chinese government prioritizes stealing U.S. research and taking advantage of our universities over obeying international norms."

“The FBI’s investigation revealed Song Chen took active steps to destroy evidence of her official affiliation with the Chinese military, including her current PLA credentials depicting her in military dress uniform,” said Special Agent in Charge Craig D. Fair of the FBI's San Francisco Field Office. “The FBI is committed to protecting academic institutions in the Bay Area from PRC military officers who knowingly and willfully lie about their military affiliations to access American research and development. We will exhaust all investigative techniques and measures to ensure the safety, security, and hard work of American universities.”

The superseding indictment expands on the allegations set out in an affidavit supporting a criminal complaint filed on July 17, 2020, and an indictment filed on Jan. 7, 2021. According to the superseding indictment, Song, 39, a Chinese national, entered the United States on Dec. 23, 2018, using a J-1 non-immigrant visa to conduct research at Stanford University. Song obtained the J-1 visa, a document “for individuals approved to participate in work-and study-based exchange visitor programs” with an application she submitted in November 2018.

In that application, Song described herself as a neurologist who was coming to the United States to conduct research at Stanford University related to brain disease. As part of the application, Song stated that she had served in the Chinese military only from Sept. 1, 2000, through June 30, 2011. She further stated that her employer was “Xi Diaoyutai Hospital” located at “No. 30 Fucheng Road, Beijing, 100142,” and that her highest rank was “STUDENT.” The superseding indictment alleges that these were lies, and that Song was a member of the People’s Liberation Army (PLA), the Chinese military, when she entered and while she was in the United States, and that the hospital she listed on her visa as her employer was a cover for her true employer, the PLA Air Force General Hospital in Beijing. 

The superseding indictment also adds allegations and charges of obstructive conduct by Song. Specifically, the superseding indictment alleges that Song found out about a case against another PLA member, who was charged on June 7, 2020, in the Northern District of California with visa fraud. The superseding indictment alleges that she then attempted to delete a digital folder of documents on an external hard drive that she possessed containing records relating to her military service and visa fraud, including:

1. A digital version of a letter from Song, written in Chinese and addressed to the People’s Republic of China consulate in New York, in which Song explained that her stated employer, “Beijing Xi Diaoyutai Hospital” was a false front, and that because relevant approval documents were classified, she had attempted to mail them;
2. An image of Song’s PLA credentials, with a photograph of her in military dress uniform, covering the time period from July 2016 to July 2020; and
3. A digital version of a resume for Song, written in Chinese, again with a photograph of her in military dress uniform and listing her employer as the Air Force General Hospital.

Further, according to the superseding indictment, Song lied to FBI agents when interviewed, denying any affiliation with the PLA after 2011, and information associating Song with the PLA or Air Force General Hospital began to disappear from the Internet after the FBI’s investigation of Song was known to her. Finally, the superseding indictment alleges that, after Song had been charged by criminal complaint in this case, she selectively deleted relevant emails from that account, including certain emails relevant to her military service, employment, and affiliations.

Song is charged with visa fraud, in violation of 18 U.S.C. § 1546(a); obstruction of official proceedings, in violation of 18 U.S.C. § 1512(c)(2); two counts of alteration, destruction, mutilation, or concealment of records, in violation of 18 U.S.C. § 1512(c)(1); and making false statements to a government agency, in violation of 18 U.S.C. § 1001(a)(2).   

An indictment merely alleges that a crime has been committed and Song, like all defendants, is presumed innocent until proven guilty beyond a reasonable doubt.

If convicted, she faces a maximum statutory penalty of up to 10 years in prison and a fine of $250,000 for the visa fraud count; up to 20 years in prison and a fine of $250,000 for each of the obstruction and alteration charges; and up to five years in prison and a fine of $250,000 for the false statements charge. In addition, the court may order additional terms of supervised release. 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.

Song’s next appearance is scheduled for April 7, 2021, at 12:00 p.m. PST, before the Honorable William Alsup, U.S. District Judge, for pretrial conference, with a trial scheduled to begin on April 12, 2021.

The FBI San Francisco Field Office led the investigation. The U.S. Attorney’s Office Special Prosecutions Section is prosecuting the case.

SAN FRANCISCO – A federal grand jury issued a superseding indictment charging Chen Song with visa fraud, obstruction of justice, destruction of documents, and false statements in connection with a scheme to conceal and lie about her status as a member of the People’s Republic of China’s military forces while in the United States, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge Craig D. Fair.   

“We allege that while Chen Song worked as a researcher at Stanford University, she was secretly a member of China’s military, the People’s Liberation Army,” said U.S. Attorney Anderson.  “When Song feared discovery, she destroyed documents in a failed attempt to conceal her true identity.  This prosecution will help to protect elite institutions like Stanford from illicit foreign influences.”

“The FBI’s investigation revealed Song Chen took active steps to destroy evidence of her official affiliation with the Chinese military, including her current PLA credentials depicting her in military dress uniform,” said FBI Special Agent in Charge Craig Fair. “The FBI is committed to protecting academic institutions in the Bay Area from PRC military officers who knowingly and willfully lie about their military affiliations to access American research and development. We will exhaust all investigative techniques and measures to ensure the safety, security, and hard work of American universities.”

The superseding indictment expands on the allegations set out in an affidavit supporting a criminal complaint filed on July 17, 2020, and an indictment filed on January 7, 2021.  According to the superseding indictment, Song, 39, a Chinese national, entered the United States on December 23, 2018, using a J-1 non-immigrant visa to conduct research at Stanford University.  Song obtained the J-1 visa, a document “for individuals approved to participate in work-and study-based exchange visitor programs” with an application she submitted in November 2018.  In that application, Song described herself in her visa application as a neurologist who was coming to the U.S. to conduct research at Stanford University related to brain disease.  As part of the application, Song stated that she had served in the Chinese military only from September 1, 2000, through June 30, 2011.  She further stated that her employer was “Xi Diaoyutai Hospital” located at “No. 30 Fucheng Road, Beijing, 100142,” and that her highest rank was “STUDENT.”  The superseding indictment alleges that these were lies, and that Song was a member of the People’s Liberation Army (PLA), the Chinese military, when she entered and while she was in the United States, and that the hospital she listed on her visa as her employer was a cover for her true employer, the PLA Air Force General Hospital in Beijing. 

The superseding indictment also adds allegations and charges of obstructive conduct by Song.  Specifically, the superseding indictment alleges that Song found out about a case against another PLA member, who was charged on June 7, 2020, in the Northern District of California with visa fraud.  The superseding indictment alleges that she then attempted to delete a digital folder of documents on an external hard drive that she possessed containing records relating to her military service and visa fraud, including:

1. A digital version of a letter from Song, written in Chinese and addressed to the People’s Republic of China consulate in New York, in which Song explained that her stated employer, “Beijing Xi Diaoyutai Hospital” was a false front, and that because relevant approval documents were classified, she had attempted to mail them;
2. An image of Song’s PLA credentials, with a photograph of her in military dress uniform, covering the time period from July 2016 to July 2020; and
3.  A digital version of a resume for Song, written in Chinese, again with a photograph of her in military dress uniform and listing her employer as the Air Force General Hospital.

Further, according to the superseding indictment, Song lied to FBI agents when interviewed, denying any affiliation with the PLA after 2011, and information associating Song with the PLA or Air Force General Hospital began to disappear from the Internet after FBI’s investigation of Song was known to her.  Finally, the superseding indictment alleges that, after Song had been charged by criminal complaint in this case, she selectively deleted relevant emails from that account, including certain emails relevant to her military service, employment, and affiliations.

Song is charged with visa fraud, in violation of 18 U.S.C. § 1546(a); obstruction of official proceedings, in violation of 18 U.S.C. § 1512(c)(2); two counts of alteration, destruction, mutilation, or concealment of records, in violation of 18 U.S.C. § 1512(c)(1); and making false statements to a government agency, in violation of 18 U.S.C. § 1001(a)(2).   

An indictment merely alleges that a crime has been committed and Song, like all defendants, is presumed innocent until proven guilty beyond a reasonable doubt.

If convicted, she faces a maximum statutory penalty of up to 10 years in prison and a fine of $250,000 for the visa fraud count; up to 20 years in prison and a fine of $250,000 for each of the obstruction and alteration charges; and up to 5 years in prison and a fine of $250,000 for the false statements charge.  In addition, the court may order additional terms of supervised release.  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.

Song’s next appearance is scheduled for April 7, 2021, at 12:00 p.m., before the Honorable William Alsup, United States District Judge, for pretrial conference, with a trial scheduled to begin on April 12, 2021.

The United States Attorney’s Office Special Prosecutions Section is prosecuting the case.  The prosecution is the result of an investigation by the FBI.

SAN JOSE - Salvatore A. La Rosa pleaded guilty today in federal court in San Jose to intentional damage to a protected computer, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge Craig D. Fair.

La Rosa, 41, of San Jose, admitted in his guilty plea to intentionally accessing Spectra Food Services and Hospitality’s (Spectra) on-line concessions management account for the Earthquakes Stadium without permission on February 29, 2020.  The Earthquakes Stadium is home to the San Jose Earthquakes, a Major League Soccer team, and their first home game of the 2020 season was February 29, 2020.  Spectra, headquartered in Philadelphia, Pennsylvania, was the concessions contractor for the stadium, and employees used Spectra’s mobile tablets as their Point-of-Sale terminals to sell food and other concession items.  The tablets displayed menus and payment selections from an online-based application developed for sports stadiums. 

La Rosa admitted in his plea agreement that he was a former employee of Spectra and worked at the stadium from February 14, 2015, until his termination on January 6, 2020.  He admitted that he thereafter logged into the administrative port for the Earthquakes Stadium from his residence and used a password, without authority, to access Spectra’s concession menu and payment selections.  During his unauthorized access, he intentionally deleted Spectra’s concession menu and payment selections.  This act caused all of the Point-of-Sale tablets used by Spectra’s staff to stop working.  Spectra’s ability to accept credit cards was also disabled.  During the soccer match on February 29, 2020, Spectra’s staff had to resort to handwriting orders and using calculators to complete cash transactions, with the resulting delay leading to lost sales and verbal abuse from customers.  In some instances, Spectra had to provide free food and beverages to club members because of its inability to process credit card transactions.

On March 7, 2020, Spectra and the San Jose Earthquakes, in an attempt to regain the trust and business of customers, offered a fifty-percent discount on all concessions at that day’s game. 

According to the charging document filed in the case, Spectra suffered a loss of over $268,000 in damages, consisting of lost revenue, concession discounts offered at the March 7 game, employee time to repair the damage to the data, and labor costs.

“Once a computer hack has been discovered, it is critically important for business leaders to report the intrusion promptly and to cooperate fully with law enforcement,” said U.S. Attorney Anderson.  “I want to thank Spectra and the San Jose Earthquakes for their good corporate citizenship.  La Rosa’s conviction follows their prompt reporting and effective cooperation.”

“Insider threats can be incredibly damaging to companies, their data, and intellectual property even after an individual is no longer employed by the company,” said FBI San Francisco Special Agent in Charge Craig Fair. “It is important that companies take the necessary steps to ensure that the security of their networks and operations remain intact and that they are only available to those with authorized access."

On October 27, 2020, La Rosa was charged by Information with one count of Intentional Damage to a Protected Computer, in violation of 18 U.S.C. §§ 1030(a)(5)(A) and (c)(4)(B)(i).  Under the plea agreement, La Rosa pled guilty to the sole count of the Information.  La Rosa remains out of custody on bond.

La Rosa’s sentencing hearing is scheduled for 9:15 a.m. on May 19, 2021, before United States District Judge Lucy H. Koh in San Jose.  The maximum statutory penalty for each count in violation of Intentional Damage to a Protected Computer, in violation of 18 U.S.C. §§ 1030(a)(5)(A) and (c)(4)(B)(i), is ten years imprisonment and a fine of $25,000, plus restitution if appropriate.  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.

Susan Knight is the Assistant U.S. Attorney who is prosecuting the case with the assistance of legal tech Elise Etter and paralegal Rebecca Shelton.  The prosecution is the result of an investigation by the Federal Bureau of Investigation.

SAN JOSE – Liliana Moreno, a Spanish translator hired as a contractor by the Drug Enforcement Administration (DEA) in a drug trafficking investigation, appeared today in United States District Court to face federal charges that she intentionally disclosed the investigation and its court-ordered wiretap to the investigation’s target, announced United States Attorney David L. Anderson, Department of Justice Office of the Inspector General Los Angeles Field Office Special Agent in Charge Zachary Shroyer, and Drug Enforcement Administration Special Agent in Charge Daniel C. Comeaux. 

“We trusted Liliana Moreno to keep her work confidential,” said U.S. Attorney Anderson.  “Law enforcement needs confidentiality to protect the rights of the innocent and the guilty.  We allege Moreno violated that trust.”

“Moreno jeopardized an investigation when she allegedly tipped off the subject of a court-authorized wiretap.  DOJ employees and contractors who share confidential law enforcement information will be held accountable for their actions,” said Zachary Shroyer, Special Agent in Charge of the Department of Justice Office of the Inspector General Los Angeles Field Office.

“Releasing sensitive government information can have devastating consequences. Not only does it damage a case, often beyond repair, but more importantly, it also endangers the lives of those agents and officers assigned to the investigation,” said DEA Special Agent in Charge Daniel Comeaux. “In instances such as these we will ensure justice is served without delay.”

According to the federal complaint unsealed today, Moreno, age 35, of Modesto, California, worked for a private company that contracts with DEA to provide translation services.  DEA regularly uses interpreters in court-authorized wiretaps to monitor and translate intercepted telephone calls in a foreign language.  DEA hired Moreno as a contractor, and she promised in DEA employment contracts never to disclose any investigative information without authorization and to notify DEA if she had any personal association with a target of an investigation.  

The complaint outlines that DEA assigned Moreno as the lead monitor and Spanish translator for a court-authorized wiretap in an investigation of a drug trafficking organization whose membership included numerous Spanish-speaking members.  During February and March of 2018, the complaint alleges that while monitoring calls Moreno recognized an individual on a call who she knew from the individual’s romantic relationship with a friend of Moreno.  DEA agents also displayed a surveillance photo and name of that individual, deemed Wire Target 2 in the complaint, in the wire room where Moreno worked.  Despite this, Moreno did not notify DEA about her knowledge and association with Wire Target 2, the complaint outlines.  Instead, Moreno met with her friend on March 17, 2018, and according to the complaint’s allegations, warned the friend that Wire Target 2’s calls were being intercepted in a DEA wiretap investigation and that DEA had a photo of Wire Target 2.  Moreno’s friend relayed this information to Wire Target 2, and the complaint describes how Wire Target 2 and another drug-trafficking organization member thereafter discarded their wiretapped cell phones, frustrating and significantly delaying the investigation. 

Moreno made her initial appearance on the complaint, which was unsealed today, before the Honorable Virginia K. DeMarchi, United States Magistrate Judge.  Moreno remains out of custody on a $50,000 bond.  Moreno’s next scheduled appearance is on February 19, 2021, for appointment of counsel before United States Magistrate Judge DeMarchi. 

A complaint merely alleges that a crime has been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt. 

Moreno is charged with one count of unlawful disclosure of electronic surveillance, in violation of 18 U.S.C. § 2232(d).  If convicted, the defendant faces a maximum sentence of 5 years in prison and a fine of $250,000.  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. 

The United States Attorney’s Office Special Prosecutions Section is prosecuting the case.  The prosecution is the result of an investigation by the Department of Justice Office of the Inspector General and the Drug Enforcement Administration.

SAN FRANCISCO – Miranda Devlin, aka Miranda Martin, aka Miranda Petrillo, has been charged in a federal criminal complaint with mail fraud and with making false statements on an application for coronavirus relief funds, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge Craig D. Fair.

“We allege Miranda Devlin committed serial fraud,” said U.S. Attorney Anderson.  “Among the schemes alleged in the complaint, Devlin used a shell company to defraud the Paycheck Protection Program, known as PPP, out of pandemic relief funds.  PPP funds provide a critically important safety net for legitimate businesses suffering real losses.  Anyone considering PPP fraud should know law enforcement is watching, and federal prosecution can follow.”

“By allegedly defrauding the Paycheck Protection Program, a program designed to assist our local businesses as they navigate stressful, uncertain times, Miranda Devlin violated the trust of her community,” said FBI San Francisco Special Agent in Charge Fair.  “By allegedly exploiting this program and further straining resources designated for pandemic relief, she cheated legitimate, hardworking business owners and their employees.”

The criminal complaint alleges that Devlin, 37, of San Francisco, impersonated multiple California licensed attorneys by using their names and license numbers.  The complaint states that Devlin assumed the name of “Miranda Martin” and later “Miranda Petrillo” and used those names to act as a criminal defense attorney.  She was retained by two defendants facing serious criminal charges in Marin County Superior Court.  Devlin initially appeared in court as “Miranda Martin.”  The complaint alleges that when questioned, she thereafter pivoted and assumed the identity of another attorney who also shared her first name, Miranda Petrillo.  Devlin was arrested for impersonating an attorney after a court appearance on November 26, 2019, in Marin County.  The complaint alleges that the true Miranda Martin and Miranda Petrillo are licensed attorneys with the State Bar of California and are both victims of Devlin’s identity thefts.

The complaint further alleges that, in the course of investigating Devlin’s attorney impersonations, investigators uncovered that Devlin had recently defrauded the Small Business Administration by submitting a loan application to the Paycheck Protection Program (PPP) in the name of a shell business.  The PPP arose out of the CARES Act passed by Congress in March 2020 which authorized forgivable PPP loans to small businesses to promote job retention and certain other expenses during the pandemic.  A PPP loan must be used for payroll costs, interest on mortgages, rent, and utilities, and the applications for such loans, administered by the U.S. Small Business Administration, must meet certain requirements and be made under oath. 

The complaint alleges that Devlin submitted an application for a PPP loan in the amount of $32,700 on behalf of an entity she created, the Common Nucleus of Cancer, LLC (CNC).  In CNC’s application, Devlin made multiple false statements and provided false IRS documents to support the statements.  For example, Devlin claimed that she was Miranda Martin, that CNC was managed by Miranda Martin, that Miranda Martin owned 100% of the entity, that CNC had two employees and a monthly payroll of $13,115, that it had paid employee salary and payroll taxes throughout the four quarters of 2019, and that CNC was in operation on February 15, 2020.  Each of statements were made under oath.  None of them are true.  Once the loan was funded, Devlin used the money for a variety of unauthorized non-payroll expenses, such as purchases from Amazon, Bloomingdale’s, and Tiffany & Co., and for purchases of stock. 

Devlin made her initial appearance in federal court on February 12, 2021, before the Honorable Laurel Beeler, United States Magistrate Judge.  Devlin was released on bond and her next scheduled appearance is on March 8, 2021, for a status hearing before the Honorable Sallie Kim, United States Magistrate Judge.             

The charges contained in the criminal complaint are mere allegations.  As in any criminal case, the defendant is presumed innocent unless and until proven guilty in a court of law.

Devlin is charged with false statements on an application in violation of Title 18, United States Code Section 1014, and mail fraud in violation of Title 18, United States Code Section 1341.  If convicted of making false statements on an application, she faces a maximum penalty of 30 years in prison and a fine of $1,000,000.  If convicted of mail fraud, she faces a maximum penalty of 20 years in prison, a fine of $250,000.  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.

The United States Attorney’s Office Special Prosecutions Team is prosecuting the case.  The prosecution is the result of an investigation by the Federal Bureau of Investigation and the Treasury Inspector General for Tax Administration (TIGTA).

The FBI believes that there may be more victims in this case and is urging the public to contact the FBI San Francisco at (415) 553-7400 if they believe they are a victim, have information about potential victims, or have information related to this ongoing case.  Calls can remain anonymous.

SAN FRANCISCO – Florence Kong was sentenced today to one year and one day in prison and ordered to pay a $95,000 fine for bribery of a public official and making false statements to Federal Bureau of Investigation agents, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge Craig D. Fair.  The sentence was handed down by the Honorable William H. Orrick, United States District Judge.

“The sentence handed down today recognizes the seriousness of Florence Kong’s offenses,” said U.S. Attorney Anderson.  “Both corrupt officials and those who corrupt them are accountable for their crimes.  Our City Hall prosecutions are not over.  The investigation continues.”

“The FBI’s ongoing public corruption investigation continues to uncover a pernicious pattern of criminal activity committed by San Francisco city contractors, motivated by greed, who exploit their relationships with public officials,” said FBI Special Agent in Charge Craig D. Fair.  “In this case, a Bay Area millionaire used her wealth to bribe Mr. Nuru and secure her own company’s contract; leaving honest, hardworking contractors unable to compete for business and ultimately compromising the entire system of fair competition.”

Kong, 63, of Hayward and formerly of Hillsborough, California, pleaded guilty to the bribery and false statement charges on October 8, 2020.  As part of the guilty plea, Kong admitted in her plea agreement to bribing Mohammed Nuru, then-Director of San Francisco’s Department of Public Works (DPW), by giving him a gold Rolex watch she purchased for him for $36,550 on or about December 19, 2019.  Kong bribed Nuru in return for past and future actions benefitting her businesses, including as a reward for directing business to her company SFR Recovery Inc.  SFR Recovery Inc. is a recycling plant that had a public contract with the City and County of San Francisco to dispose of construction debris.  Kong admitted she believed that Nuru was one of the most powerful public officials in San Francisco who, as DPW Director, wielded tremendous influence over San Francisco’s public contracts, permits, and DPW business as well as other City departments and agencies.  Kong also admitted to making false statements repeatedly to FBI agents who interviewed her during the investigation, falsely stating that Nuru was her friend but they never discussed business, that he never helped her with contracts, and that she never gave Nuru money.

In a filed sentencing memorandum, the government asserted facts providing a broader description of the investigation.  The government stated the investigation developed information that Kong is a multi-millionaire owner of a group of construction and real estate businesses in the San Francisco Bay Area, of which SFR Recovery Inc. is only one.  In 2018, Kong began pressuring Nuru to award SFR Recovery Inc. a permit to accept work from DPW and, once awarded, repeatedly pressed Nuru to increase the business DPW did with SFR Recovery Inc.  During this time, Kong showered Nuru with gifts, including the $36,550 gold Rolex watch that Kong gave Nuru in return for official actions on Kong’s behalf.

In January 2020, Mohammed Nuru was arrested and charged with fraud and lying to investigators.  According to the government’s sentencing memorandum, three months after that, on March 20, 2020, FBI agents interviewed Kong at her home in Hillsborough, California.  Kong repeatedly lied to and attempted to mislead the agents.  The agents, who by that time had substantial evidence through emails and recorded phone calls that Kong was bribing Nuru, warned Kong that providing false statements to the FBI was a crime.  Kong stuck with her falsehoods.

A photograph of the gold Rolex watch is attached to the government’s sentencing memo and printed below:

 

 

 

 

 

 

 

 

On June 1, 2020, Kong was charged in United States District Court by a Complaint, with one count of False Statements to a Government Agency, in violation of 18 U.S.C. § 1001(a)(2).  On September 16, 2020, Kong was further charged via an Information with the false statements charge and with the additional charge of Bribery, in violation of 18 U.S.C. § 666(a)(1).  On October 8, 2020, Kong pled guilty to the charges in the Information, that is, one count of Bribery, in violation of 18 U.S.C. § 666(a)(1), and one count of False Statements to a Government Agency, in violation of § 18 U.S.C. 1001(a)(2).

This case is part of a larger federal investigation targeting public corruption in the City and County of San Francisco.  To date, ten individuals have been charged, including two high-ranking San Francisco public officials, Mohammed Nuru and Harlan Kelly.  Multiple city contractors and facilitators have been charged.  According to the charges earlier filed against Mohammed Nuru and others, Nuru allegedly took hundreds of thousands of dollars in bribes, including cash, meals, and work on his vacation home from contractors who obtained San Francisco public contracts.  According to allegations in the complaint filed earlier against Harlan Kelly, he similarly received thousands of dollars in airfare, meals, jewelry, and travel expenses, along with repair work on his house.                      

In addition to the prison term, United States District Judge Orrick also sentenced the defendant to a three-year period of supervised release.  Kong is out of custody and will begin serving her prison sentence on Aug 13, 2021.

The case is being prosecuted by the Corporate Fraud Strike Force of the U.S. Attorney’s Office. The case is being investigated by the FBI and the Internal Revenue Service-Criminal Investigation (IRS-CI).

SAN FRANCISCO – A federal grand jury issued a superseding indictment charging fourteen defendants, mostly South Bay residents, with crimes related to two conspiracies—one to transport drugs from Mexico to the San Jose Area, the other to transport firearms illegally from the United States to Mexico, announced United States Attorney David L. Anderson, Drug Enforcement Administration (DEA) Special Agent in Charge Daniel C. Comeaux, and Federal Bureau of Investigation Special Agent in Charge Craig D. Fair.  In a press conference earlier today, U.S. Attorney Anderson announced all the charges were the culmination of a federal investigation—one of four simultaneous investigations into the movement of drugs from Mexico to the streets of the San Jose area.

“One methamphetamine seizure outlined in this indictment represents the largest federal seizure of methamphetamine ever in the Northern District of California,” said U.S. Attorney Anderson.  “The vast majority of these drugs were acquired in Mexico, including from Mexico’s Sinaloa Cartel.  Firearms and their components, as described in the indictment, are acquired in the United States to export to Mexico.  The two-way flow of drug shipments heading north and firearms, including assault weapons, sniper rifles and grenade launchers, heading south is a potently dangerous situation.  It is impossible to characterize this alleged conduct as victimless.”

“Methamphetamine that is pure, potent and cheap has flooded the American market and drug trafficking organizations see an opportunity to profit. They utilize distribution hubs, like the Bay Area, to distribute their poison,” said DEA Special Agent in Charge Daniel C. Comeaux. “As methamphetamine overdoses rise, the significant drug seizures in this investigation has undoubtedly saved lives. DEA will continue to target and to bring to justice these criminal organizations who traffic drugs in our community to keep Americans safe.”

“As a result of Operation Burnt Orange, the FBI and DEA successfully seized 16 firearms, 17.4 pounds of heroin, and 817.7 pounds of methamphetamine from this dangerous organization - which ranks as one of the largest methamphetamine seizures in recent memory here in the Northern District of California,” said FBI Special Agent in Charge Fair.  “Simply put, we won’t allow dangerous and violent groups to use our neighborhoods as a thoroughfare to traffic drugs or as a venue to conduct illegal activity.”

The superseding indictment, filed February 4, 2021, charges David Campoy as the leader of two related conspiracies: a drug trafficking conspiracy and a firearms trafficking conspiracy.  With respect to the drug trafficking conspiracy, David Campoy, his adult son, Jose Melchor Campoy, and co-conspirators David Wilcott Greenman, Kimberly Carrasco, Lamberto (a Mexican national whose last name currently is unknown), Juan Carlos Velazquez Ortiz, Ignacio Espinoza, Jose Manuel Rodriguez Naranjo, and Nicolas Ardanuy are charged with conspiracy to distribute and possess with intent to distribute methamphetamine, heroin, cocaine, and marijuana.   David Campoy allegedly used connections with the Cártel de Sinaloa (or Sinaloa Cartel) in Mexico as well as connections in Southern California to obtain methamphetamine and heroin. The indictment alleges David Campoy and Jose Campoy delivered controlled substances to other members of the drug trafficking organization for distribution.  In addition to the conspiracy charge, several of the defendants face additional charges in connection with individual drug sales and use of a communication facility to assist in such sales. 

The facts disclosed in the indictment and additional court documents depict a prolific drug distribution operation.  The indictment describes a drug ledger in which drug purchase orders are recorded in quantities such as of hundreds of kilograms of methamphetamine, and payments are made in the hundreds of thousands of dollars.  In addition, during his arrest in January 2021 with his son and others, law enforcement seized approximately 572 pounds of methamphetamine, several pounds of heroin, and 16 firearms.  In additional court filings the government argues that based on intercepts and intelligence obtained during the investigation, David Campoy, through the quantity he controlled and trafficked, exercised market power over the price and availability of methamphetamine in Northern California. 

With respect to the firearms conspiracy, the indictment alleges David Campoy, Michael Ozuna Guizar, Roberto Campoy Robles, Luis Guillermo Sendino, and Ivan Campoy Morales orchestrated illegal exports to Mexico of weapons and components of firearms for sale in the black market.  The defendants manufactured, exported, and dealt in weapons including assault weapons.  The superseding indictment describes how defendants allegedly unlawfully purchased firearms and components of firearms in the United States through licensed federal firearm dealers.  The defendants allegedly combined the firearms with grenade launchers assembled in Mexico, and attempted to obtain .50 caliber sniper rifles and grenade launchers for resale on the black market.

In sum, the defendants are charged with the crimes and face maximum penalties as indicted in the chart below:

Defendant/Age

Charges

Statute

Maximum Penalties

David Campoy, 46

 

Conspiracy to distribute and possess with the intent to distribute methamphetamine, heroin, cocaine, and marijuana; Distribution and possession with the intent to distribute methamphetamine; Possession with the intent to distribute heroin; Use of a communication facility in facilitating the commission of a felony under the Controlled Substances Act; Felon in possession of firearms and ammunition; Possession of a firearm in furtherance of a drug trafficking crime; Conspiracy to manufacture and deal in firearms; Conspiracy to manufacture and deal in firearms; Conspiracy to export arms and munitions; Unlawfully manufacturing and dealing in firearms; Arms export control act export of arms and munitions

21 U.S.C.

§§ 846, 841(a)(1), (b)(1)(A), and (b)(1)(B)

 

21 U.S.C. § 843(b)

 

 

 

18 U.S.C. § 922(g)(1)

 

 

18 U.S.C. §  924(c)(1)(A)

 

 

18 U.S.C. § 371

 

 

 

18 U.S.C. §§ 922(a)(1)(A) and 924(n) 

 

22 U.S.C. §§ 2778(b)(2) and (c) and 22 C.F.R. §§ 121.1, 123.1, and 127.1  

Lifetime imprisonment

$10 million fine

Lifetime supervised release

 

 

4 years’ imprisonment

$30,000 fine

1 year supervised release

 

10 years’ imprisonment

$250,000 fine

3 years’ supervised release

 

Lifetime imprisonment

$250,000 fine

5 years’ supervised release

 

5 years’ imprisonment

$250,000 fine

3 years’ supervised release

 

10 years’ imprisonment

$250,000 fine

3 years’ supervised release

 

20 years’ imprisonment

$1 million fine

3 years’ supervised release

Jose Melchor Campoy, 21

Conspiracy to distribute and possess with the intent to distribute methamphetamine, heroin, cocaine, and marijuana; Distribution and possession with the intent to distribute methamphetamine; Possession with the intent to distribute heroin; Use of a communication facility in facilitating the commission of a felony under the Controlled Substances Act

21 U.S.C.

§§ 846, 841(a)(1), (b)(1)(A), and (b)(1)(B)

 

21 U.S.C. § 843(b)

Lifetime imprisonment

$10 million fine

Lifetime supervised release

 

 

4 years’ imprisonment

$30,000 fine

1 year supervised release

David Wolcott Greenman, 34

Conspiracy to distribute and possess with the intent to distribute methamphetamine, heroin, cocaine, and marijuana; Attempt to possess with the intent to distribute heroin; Distribution and possession with the intent to distribute methamphetamine

21 U.S.C.

§§ 846, 841(a)(1), (b)(1)(A), and (b)(1)(B)

Lifetime imprisonment

$10 million fine

Lifetime supervised release

Kimberly Carrasco, 27

Conspiracy to distribute and possess with the intent to distribute methamphetamine, heroin, cocaine, and marijuana; Distribution and possession with the intent to distribute methamphetamine;

21 U.S.C.

§§ 846, 841(a)(1) and (b)(1)(A)

Lifetime imprisonment

$10 million fine

Lifetime supervised release

Lamberto LNU, age unknown

Conspiracy to distribute and possess with the intent to distribute methamphetamine, heroin, cocaine, and marijuana; Use of a communication facility in facilitating the commission of a felony under the Controlled Substances Act

21 U.S.C.

§§ 846, 841(a)(1) and (b)(1)(A)

 

21 U.S.C. § 843(b)

Lifetime imprisonment

$10 million fine

Lifetime supervised release

 

4 years’ imprisonment

$30,000 fine

1 year supervised release

Juan Carlos Velazquez Ortiz, 32

Conspiracy to distribute and possess with the intent to distribute methamphetamine, heroin, cocaine, and marijuana;

21 U.S.C.

§§ 846, 841(a)(1) and (b)(1)(A)

Lifetime imprisonment

$10 million fine

Lifetime supervised release

Ignacio Espinoza, 30

Conspiracy to distribute and possess with the intent to distribute methamphetamine, heroin, cocaine, and marijuana; Use of a communication facility in facilitating the commission of a felony under the Controlled Substances Act

21 U.S.C.

§§ 846, 841(a)(1) and (b)(1)(A)

 

21 U.S.C. § 843(b)

Lifetime imprisonment

$10 million fine

Lifetime supervised release

 

4 years’ imprisonment

$30,000 fine

1 year supervised release

Jose Manuel Rodriguez Naranjo, 39

Conspiracy to distribute and possess with the intent to distribute methamphetamine, heroin, cocaine, and marijuana; Distribution and possession with the intent to distribute methamphetamine

21 U.S.C.

§§ 846, 841(a)(1) and (b)(1)(A)

Lifetime imprisonment

$10 million fine

Lifetime supervised release

Nicholas Ardanuy, 52

Conspiracy to distribute and possess with the intent to distribute methamphetamine, heroin, cocaine, and marijuana; Distribution and possession with the intent to distribute methamphetamine

21 U.S.C.

§§ 846, 841(a)(1) and (b)(1)(A)

Lifetime imprisonment

$10 million fine

Lifetime supervised release

Michael Ozuna Guizar, 40

Use of a communication facility in facilitating the commission of a felony under the Controlled Substances Act; Conspiracy to manufacture and deal in firearms; Conspiracy to export arms and munitions; Unlawfully manufacturing and dealing in firearms; Arms export control act export of arms and munitions

21 U.S.C. § 843(b)

 

 

 

18 U.S.C. § 371

 

 

 

18 U.S.C. §§ 922(a)(1)(A) and 924(n) 

 

22 U.S.C. §§ 2778(b)(2) and (c) and 22 C.F.R. §§ 121.1, 123.1, and 127.1  

4 years’ imprisonment

$30,000 fine

1 year supervised release

 

5 years’ imprisonment

$250,000 fine

3 years’ supervised release

 

10 years’ imprisonment

$250,000 fine

3 years’ supervised release

 

 

20 years’ imprisonment

$1 million fine

3 years’ supervised release

Miguel Angel Carrizal Zamora, 23

Possession with the intent to distribute and distribution of methamphetamine

21 U.S.C.

§§ 841(a)(1) and (b)(1)(A)

 

Lifetime imprisonment

$10 million fine

Lifetime supervised release

Roberto Campoy Robles, 48

Conspiracy to manufacture and deal in firearms; Conspiracy to export arms and munitions; Unlawfully manufacturing and dealing in firearms; Arms export control act export of arms and munitions

18 U.S.C. § 371

 

 

 

18 U.S.C. §§ 922(a)(1)(A) and 924(n) 

 

22 U.S.C. §§ 2778(b)(2) and (c) and 22 C.F.R. §§ 121.1, 123.1, and 127.1  

5 years’ imprisonment

$250,000 fine

3 years’ supervised release

 

10 years’ imprisonment

$250,000 fine

3 years’ supervised release

 

20 years’ imprisonment

$1 million fine

3 years’ supervised release

Luis Guillermo Sendino, 48

Conspiracy to manufacture and deal in firearms; Conspiracy to export arms and munitions; Unlawfully manufacturing and dealing in firearms; Arms export control act export of arms and munitions

18 U.S.C. § 371

 

 

 

18 U.S.C. §§ 922(a)(1)(A) and 924(n) 

 

22 U.S.C. §§ 2778(b)(2) and (c) and 22 C.F.R. §§ 121.1, 123.1, and 127.1  

5 years’ imprisonment

$250,000 fine

3 years’ supervised release

 

10 years’ imprisonment

$250,000 fine

3 years’ supervised release

 

20 years’ imprisonment

$1 million fine

3 years’ supervised release

Ivan Campoy Morales, age unknown

Conspiracy to manufacture and deal in firearms; Conspiracy to export arms and munitions; Unlawfully manufacturing and dealing in firearms; Arms export control act export of arms and munitions

18 U.S.C. § 371

 

 

 

18 U.S.C. §§ 922(a)(1)(A) and 924(n) 

 

22 U.S.C. §§ 2778(b)(2) and (c) and 22 C.F.R. §§ 121.1, 123.1, and 127.1  

5 years’ imprisonment

$250,000 fine

3 years’ supervised release

 

10 years’ imprisonment

$250,000 fine

3 years’ supervised release

 

20 years’ imprisonment

$1 million fine

3 years’ supervised release

Juan Leopoldo Garate Aguirre, 25

Possession with the intent to distribute and distribution of methamphetamine

21 U.S.C.            §§ 841(a)(1) and (b)(1)(A) 

Lifetime imprisonment

$10 million fine

Lifetime supervised release

Jose Manuel Rodriguez Naranjo, 39

Distribution and possession with the intent to distribute methamphetamine

21 U.S.C.            §§ 841(a)(1) and (b)(1)(A) 

Lifetime imprisonment

$10 million fine

Lifetime supervised release

Miguel Martin Pacheco Martinez, 34

Conspiracy to distribute and possession with the intent to distribute methamphetamine

21 U.S.C.

§§ 846, 841(a)(1) and (b)(1)(A)

Lifetime imprisonment

$10 million fine

Lifetime supervised release

Alberto Martinez Navarro, 36

Conspiracy to distribute and possession with the intent to distribute methamphetamine

21 U.S.C.

§§ 846, 841(a)(1) and (b)(1)(A)

Lifetime imprisonment

$10 million fine

Lifetime supervised release

Miguel Angel Moreno, 46

Distribution and possession with the intent to distribute 500 grams or more of a mixture and substance containing methamphetamine

21 U.S.C.            §§ 841(a)(1) and (b)(1)(A) 

Lifetime imprisonment

$10 million fine

Lifetime supervised release

An indictment and a criminal complaint merely allege that crimes have been committed, and each defendant must be presumed innocent until proven guilty beyond a reasonable doubt.  The court may order additional terms of supervised release and restitution, if appropriate; 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.

The defendants who are scheduled to appear before the court are as follows:

Defendant

Next Court Date

David Campoy, David Wolcott Greenman, Kimberly Carrasco

 

February 12, 2021

Jose Melchor Campoy, Ignacio Espinoza, Nicholas Ardanuy, Michael Ozuna Guizar, Miguel Angel Carrizal Zamora, Luis Guillermo Sendino, Juan Leopoldo Garate Aguirre, Miguel Martin Pacheco Martinez

February 11, 2021

Miguel Angel Moreno

March 3, 2021

The case is being prosecuted by the Organized Crime Drug Enforcement Task Force (OCDETF) of the United States Attorney’s Office for the Northern District of California. The investigation of this case was conducted by the DEA and the FBI San Francisco Division. Assistance was provided by FBI Los Angeles, Phoenix and Tuscon; LA IMPACT Group 1; California Highway Patrol; San Jose Police Department the police departments of Santa Clara, Watsonville, Vallejo; the Sheriff’s Offices of Santa Clara County and Santa Cruz County; and the U.S. Marshal Service.

This investigation and prosecution is part of 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.
 

SAN FRANCISCO – A federal grand jury issued an indictment charging Mark Ogo, Anthony Christian Valdovinos, and William Reidy with conspiracy in relation to a scheme to transport methamphetamine from Mexico to the San Jose area for distribution, announced United States Attorney David L. Anderson and Drug Enforcement Administration (DEA) Special Agent in Charge Daniel C. Comeaux.  In a separate criminal complaint, Johnathan Ratcliff was charged with distributing methamphetamine in San Francisco.  In a press conference earlier today, U.S. Attorney Anderson announced that the charges against all of these defendants were the culmination of a federal investigation—one of four simultaneous investigations into the movement of drugs from Mexico to the streets of the San Jose area.

“The charges announced today involve large shipments of methamphetamine from Mexico to the Bay Area and reveal the ruthless capitalism of modern drug trafficking,” said U.S. Attorney Anderson.  “Drug traffickers have no regard for the personal destruction caused by their sales.  It is impossible to characterize their alleged conduct as victimless.  Many drug users suffer miserable lives and early deaths.  Neighborhoods populated by good people living law-abiding lives suffer from the crime and misery that drug trafficking brings.  The crimes charged in these cases undermine the healthy aspirations of whole communities of law-abiding people.”

“Methamphetamine that is pure, potent and cheap has flooded the American market and drug trafficking organizations see an opportunity to profit. They utilize distribution hubs, like the Bay Area, to distribute their poison,” said DEA Special Agent in Charge Daniel C. Comeaux. “As methamphetamine overdoses rise, the significant drug seizures in this investigation has undoubtedly saved lives. DEA will continue to target and to bring to justice these criminal organizations who traffic drugs in our community to keep Americans safe.”

The indictment, filed February 9, 2021, alleges that in July of 2020, Ogo, 54, and Valdovinos, 27, made arrangements to fly from the Bay Area to Calexico, Calif., where they met Riedy, 57, and bought more than 26 pounds of methamphetamine from him.  Documents filed in the case describe intercepted wire communications in which the defendants made arrangements for the drug transfer.  Riedy allegedly retrieved the drugs from Mexico and brought them into the United States; indeed, on the day the drugs were transferred to Ogo and Valdovinos, Riedy allegedly crossed the border into Mexico to bring a second batch of controlled substances from Mexico into the United States.  Riedy crossed the border back into Mexico after delivering approximately 28 to 30 packages of methamphetamines to Ogo and Valdavinos.

Ogo and Valdovinos allegedly packed the methamphetamine inside Ogo’s rental car and drove the methamphetamine to the Bay Area.  Wire communications describe how some of the drugs were hidden inside a spare tire of the rented car Ogo and Valdovinos used to travel back to Northern California.   

In sum, Ogo, Valdovinos, and Reidy are charged with one count of conspiracy to distribute and possess with intent to distribute 5 grams and more of methamphetamine, in violation of 21 U.S.C. §§ 846, 841(a)(1), and (b)(1)(B), as well as one count of distribution and possession with intent to distribute 5 grams and more of methamphetamine, in violation of 21 U.S.C. §§ 841(a)(1) and (b)(1)(B).  If convicted, the defendants face a minimum of 5 years and a maximum of 40 years in prison for each count and a $5,000,000 fine.

In a separate complaint, Johnathan Ratcliff, 49, was charged with distributing drugs to an undercover officer.  Specifically, on July 23, 2020, Ratcliff met the officer in San Francisco, and sold him or her 198.4 grams of methamphetamine and 25.4 grams of heroin in exchange for $3,700.  Ratcliff is charged with distributing at least 5 grams of methamphetamine, in violation of 21 U.S.C. §§ 841(a)(1) and (b)(1)(B).  If convicted the maximum statutory penalty for the offense is 40 years’ imprisonment and a $5,000,000 fine.

An indictment and a criminal complaint merely allege that crimes have been committed, and each defendant must be presumed innocent until proven guilty beyond a reasonable doubt.  The court may order additional terms of supervised release and restitution, if appropriate; 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. 

Ogo’s next court appearance is scheduled for February 11, 202, and Ratcliff’s next court appearance is scheduled for February 22, 2021.  The remaining defendants do not yet have court appearances scheduled. 

The case is being prosecuted by the Organized Crime Drug Enforcement Task Force (OCDETF) of the United States Attorney’s Office for the Northern District of California. The investigation of this case was conducted by the DEA with assistance from Vacaville Police Department, the Redwood City Police Department, the San Mateo County Narcotics Task Force, the San Francisco Police Department, the Tracy Police Department, and Homeland Security Investigations, Calexico.

This investigation and prosecution is part of 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.

SAN FRANCISCO – In five related indictments, federal grand juries charged fifteen South Bay residents with crimes related to the distribution of narcotics including heroin, methamphetamine, cocaine, and fentanyl in the San Jose area, announced United States Attorney David L. Anderson, Drug Enforcement Administration (DEA) Special Agent in Charge Daniel C. Comeaux.  In a press conference earlier today, U.S. Attorney Anderson announced all the charges were the culmination of a federal investigation—one of four simultaneous investigations into the movement of drugs from Mexico to the streets of the San Jose area.  

“These cases announced today provide insight into the ruthless capitalism of modern drug trafficking and the entire ecosystem of narcotics trafficking in Northern California,” said U.S. Attorney Anderson.  “Their allegations reflect drug trafficking from procurement, to transportation, to distribution to mid-level dealers, and all the way down to street level sales.  Countless individuals and entire communities suffer, but drug traffickers have no regard for the destruction caused in their path.” 

“Methamphetamine that is pure, potent and cheap has flooded the American market and drug trafficking organizations see an opportunity to profit. They utilize distribution hubs, like the Bay Area, to distribute their poison,” said DEA Special Agent in Charge Daniel C. Comeaux. “As methamphetamine overdoses rise, the significant drug seizures in this investigation has undoubtedly saved lives. DEA will continue to target and to bring to justice these criminal organizations who traffic drugs in our community to keep Americans safe.”

The most recent indictment, filed January 21, 2021, charges Raudel Macias, Anthony Macias, Benito Macias, Oscar Macias, and Fawn Larance with various crimes in connection with an alleged conspiracy to distribute methamphetamine, cocaine, heroin, and fentanyl in the San Jose area.  According to the indictment, Raudel Macias is the central figure of the drug distribution organization, referred to in the indictment as the Macias DTO.  The indictment alleges the Macias DTO was a street-level drug distribution group, responsible for distributing narcotics to numerous street level customers and resellers in the Northern District of California. Raudel Macias allegedly handled all aspects of ensuring there was sufficient supplies of drugs for the group to distribute. Other members of the Macias DTO were responsible for delivering drugs to customers and collecting the proceeds.  Court documents describe how wiretap information from the Macias DTO investigation led investigators to several other defendants, described in court documents as higher-level distributors and drug sources. 

The remaining four indictments were filed December 1, 2020.  One indictment charges Francisco Ricardo Miranda, Jesus Alberto Rojas-Vega, Gelacio Perez-Rojas, Uriel Soto, and Leonel Cisneros-Sosa with crimes in connection with a cocaine distribution conspiracy.  According to the indictment, Miranda was the leader of the organization distributing the drugs.  Court documents describe how Miranda allegedly used his ties to suppliers in Mexico to sustain the flow of drugs into the Bay Area.  Miranda also allegedly obtained large quantities of cocaine and methamphetamine from Southern California-based suppliers. 

Two of the December 1, 2020, indictments charge Juvencio Gamez Cid with crimes involving his efforts to obtain large amounts of methamphetamine. One indictment is based on Gamez Cid’s attempt to obtain 25 pounds of methamphetamine in June 2020.  Gamez Cid’s co-defendants in that case, Alfredo Villalobos Cisneros and Sergio Villalobos-Cisneros are charged with actually possessing the drugs that Gamez Cid sought to obtain and distribute.  According to court papers, the drugs were intercepted as they were being transported from Southern California. The other indictment charging Gamez Cid also charges Cristian Alvarado in connection with an alleged attempted delivery of five kilograms of methamphetamine.  When Gamez Cid was arrested on November 17, 2020, law enforcement officials seized approximately 6 pounds of methamphetamine from his residence, a pistol that had been reported stolen, ammunition, six cellular telephones, and fraudulent documents including a California driver’s license and a California identity card with fake names. 

The last indictment charges Jazmin Alejandra Cuevas-Capetillo with allegedly making the sale in San Jose of two kilograms of methamphetamine to a confidential source.

In sum, the defendants are charged with the crimes and face maximum penalties as indicted in the chart below:

Defendant/Age

Charges

Statute

Maximum Penalties

(per count)

Raudel Macias, 56

Conspiracy to distribute and possess with the intent to distribute heroin, methamphetamine, and fentanyl; Distribution of methamphetamine; and Distribution of 100 grams or more of heroin

21 U.S.C.

§§ 846, 841(a)(1) and (b)(1)(B) and (b)(1)(C)

40 years’ imprisonment

$5 million fine

Lifetime supervised release

 

 

Anthony Macias, 29

Conspiracy to distribute and possess with the intent to distribute heroin, methamphetamine, and fentanyl; Distribution of methamphetamine; and Distribution of 100 grams or more of heroin

21 U.S.C.

§§ 846, 841(a)(1) and (b)(1)(B) and (b)(1)(C)

40 years’ imprisonment

$5 million fine

Lifetime supervised release

 

Benito Macias-Lopez, 30

Conspiracy to distribute and possess with the intent to distribute heroin, methamphetamine, and fentanyl; Distribution of methamphetamine; and Distribution of 100 grams or more of heroin

21 U.S.C.

§§ 846, 841(a)(1) and (b)(1)(B) and (b)(1)(C)

40 years’ imprisonment

$5 million fine

Lifetime supervised release

 

Oscar Macias, 32

Conspiracy to distribute and possess with the intent to distribute heroin, methamphetamine, and fentanyl; Distribution of fentanyl; and Distribution of methamphetamine

21 U.S.C.

§§ 846, 841(a)(1) and (b)(1)(B) and (b)(1)(C)

40 years’ imprisonment

$5 million fine

Lifetime supervised release

 

Fawn Larance, 41

Conspiracy to distribute and possess with the intent to distribute heroin, methamphetamine, and fentanyl; Distribution of fentanyl; and Distribution of methamphetamine

21 U.S.C.

§§ 846, 841(a)(1) and (b)(1)(B) and (b)(1)(C)

40 years’ imprisonment

$5 million fine

Lifetime supervised release

 

Francisco Ricardo Miranda, 34

Conspiracy to distribute and possess with the intent to distribute a mixture and substance containing cocaine

21 U.S.C. §§ 846, 841(a)(1), and 841(b)(1)(A) 

Lifetime imprisonment

$10 million fine

Lifetime supervised release

Jesus Alberto Rojas-Vega, 27

Conspiracy to distribute and possess with the intent to distribute a mixture and substance containing cocaine

21 U.S.C. §§ 846, 841(a)(1), and 841(b)(1)(B) 

40 years’ imprisonment

$5 million fine

Lifetime supervised release

 

Gelacio Perez-Rojas, 36

Conspiracy to distribute and possess with the intent to distribute a mixture and substance containing cocaine

21 U.S.C. §§ 846, 841(a)(1), and 841(b)(1)(A) 

Lifetime imprisonment

$10 million fine

Lifetime supervised release

Uriel Soto, 51

Conspiracy to distribute and possess with the intent to distribute a mixture and substance containing cocaine; Possession with the intent to distribute a mixture and substance containing cocaine

21 U.S.C. §§ 846, 841(a)(1), and 841(b)(1)(C) 

20 years’ imprisonment

$1,000,000 fine

Lifetime supervised release

Leonel Cisneros-Sosa, 47

Conspiracy to distribute and possess with the intent to distribute a mixture and substance containing cocaine

21 U.S.C. §§ 846, 841(a)(1), and 841(b)(1)(C) 

20 years’ imprisonment

$1,000,000 fine

Lifetime supervised release

Juvencio Gamez Cid, 42

Attempt to possess with intent to distribute 500 grams or more of a mixture and substance containing methamphetamine; Possession with the intent to distribute 500 grams or more of a mixture and substance containing methamphetamine

21 U.S.C.            §§ 841(a)(1) and 841(b)(1)(A) 

Lifetime imprisonment

$10 million fine

Lifetime supervised release

Jose Alfredo Villalobos Cisneros, 48

Possession with the intent to distribute 500 grams or more of a mixture and substance containing methamphetamine

21 U.S.C.            §§ 841(a)(1) and 841(b)(1)(A) 

Lifetime imprisonment

$10 million fine

Lifetime supervised release

Sergio Villalobos-Cisneros, 34

Possession with the intent to distribute 500 grams or more of a mixture and substance containing methamphetamine

21 U.S.C.            §§ 841(a)(1) and 841(b)(1)(A) 

Lifetime imprisonment

$10 million fine

Lifetime supervised release

Cristian Alvarado, 26

Attempt to possess with intent to distribute 500 grams or more of a mixture and substance containing methamphetamine; Possession with the intent to distribute 500 grams or more of a mixture and substance containing methamphetamine

21 U.S.C.            §§ 841(a)(1) and 841(b)(1)(A) 

Lifetime imprisonment

$10 million fine

Lifetime supervised release

Jazmin Alejandra Cuevas-Capetillo, 25

Distribution of 50 grams or more of a mixture and substance containing methamphetamine

21 U.S.C. §§ 841(a)(1) and (b)(1)(B) 

40 years’ imprisonment

$5 million fine

Lifetime supervised release

 

Teo Magana Sanchez, 52

Distribution and possession with the intent to distribute cocaine

21 U.S.C. §§ 841(a)(1) and (b)(1)(C) 

20 years’ imprisonment

$1,000,000 fine

Lifetime supervised release

An indictment and a criminal complaint merely allege that crimes have been committed, and each defendant must be presumed innocent until proven guilty beyond a reasonable doubt.  The court may order additional terms of supervised release and restitution, if appropriate; 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.

The next court appearance for the defendants is scheduled for March 10, 2021, except Teo Magnana Sanchez, who is scheduled for a preliminary hearing on March 26, 2021.

The case is being prosecuted by the Organized Crime Drug Enforcement Task Force (OCDETF) of the United States Attorney’s Office for the Northern District of California. The investigation of this case was conducted by the DEA and the San Mateo County Narcotics Task Force.  Additional assistance was provided by the police departments of Redwood City, Santa Clara, and San Jose; the San Mateo County Narcotics Task Force; the Sheriff’s Offices of San Mateo County and Santa Clara County; the U.S. Administration of Alcohol, Tobacco, Firearms and Explosives; and the Santa Clara County Specialized Enforcement Team.

This investigation and prosecution is part of 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.

SAN FRANCISCO – The Office of the United States Attorney filed criminal complaints against Ramon Covarrubias Rangel, Jorge Lozano Guzman, Alejandro Alvarez, Kelman David De La Cruz Pedroza, and Erick Alexandro Torres Cruz for their alleged respective roles in drug distribution schemes in the San Jose area, announced United States Attorney David L. Anderson, Drug Enforcement Administration (DEA) Special Agent in Charge Daniel C. Comeaux, and Homeland Security Investigations (NorCal) Special Agent in Charge Tatum King.  In a press conference earlier today, U.S. Attorney Anderson announced that the complaints were the culmination of one of four simultaneous federal investigations into the movement of drugs from Mexico to the streets of the San Jose area.  

“We describe in these charging documents mid-level dealers operating in a thriving and deadly local market for methamphetamine and cocaine,” said U.S. Attorney Anderson.  “The crimes and sheer lawlessness of their activity is a profound threat to individuals and neighborhoods, undermining the safety and aspirations of whole communities of law-abiding people.”

“Methamphetamine that is pure, potent and cheap has flooded the American market and drug trafficking organizations see an opportunity to profit. They utilize distribution hubs, like the Bay Area, to distribute their poison,” said Special Agent in Charge Comeaux. “As methamphetamine overdoses rise, the significant drug seizures in this investigation has undoubtedly saved lives. DEA will continue to target and to bring to justice these criminal organizations who traffic drugs in our community to keep Americans safe.”

“Homeland Security Investigations is committed to combating the illegal trafficking of  firearms and drugs that fuel violence in the United States and abroad. Our investigation of 5 locations yielded: 4 arrests, 4 guns, over 7 kg of methamphetamine and 2 kg cocaine,” said Special Agent in Charge King. “Partnerships are a key facet of HSI’s approach to countering illegal activity. We are grateful for the important contributions of or partners with the DEA, FBI, CBP, California Highway Patrol, Alameda County Narcotics Task Force, Salinas Police Department, Soledad Police Department, Gilroy Police Department, and the U.S. Attorney’s Office – Northern District of California.”

The drug distribution charges are contained in three separate complaints.  The first complaint, filed January 26, 2021, alleges Rangel, Lozano, and Alvarez conspired to distribute more than 500 grams of methamphetamine in the San Jose area.  According to the complaint, the DEA, HSI, and the Federal Bureau of Investigation were conducting an investigation into the drug trafficking activities of these defendants when in December of 2019, investigators used confidential sources to make controlled purchases.  The complaint describes how Lozano met the confidential source in a parking lot in San Jose and sold the source one ounce of cocaine for $860 and one kilogram of methamphetamine for $3,000.  On February 26, 2020, a similar transaction occurred; however, on this occasion, confidential sources spoke with all three defendants.  Covarrubias made initial contact with the confidential source, Lozano negotiated the price, and Alvarez made the delivery in a parking lot in San Jose. On that day, a confidential source purchased an additional kilogram of methamphetamine from the defendants for $2,700.  Rangel, Lozano, and Alvarez are charged with conspiracy to distribute and possess with intent to distribute cocaine and more than 500 grams of methamphetamine, in violation of 21 U.S.C. §§ 846, 841(a)(1), (b)(1)(A)(viii).  If convicted, the defendants each face a minimum 10 years and a maximum of life in prison, as well as a maximum $10,000,000 fine. 

In the second complaint, De La Cruz is charged with selling a pound of methamphetamine to a confidential source in August of 2020.  According to the complaint, after completing the transaction, De La Cruz informed the source that it would cost $34,000 for a kilogram of cocaine and that if the source needed cocaine, the source should call De La Cruz.  De La Cruz is charged with distribution of 50 grams or more of methamphetamine, in violation of 21 U.S.C. §§ 841, 841(a)(1), (b)(1)(B)(viii).  If convicted, De La Cruz faces a minimum 5 years and a maximum 40 years in prison as well as a maximum $5,000,000 fine. 

In addition, Torres Cruz is charged with distributing a half kilogram of methamphetamine to a confidential source for $2,600 in January of 2021.  The complaint alleges that the transaction occurred in a parking lot in San Jose and that after the transaction was completed, Torres Cruz offered to reduce the price of the methamphetamine if the source were willing to buy larger quantities.  Like De La Cruz, Torres Cruz is charged with distribution of 50 grams or more of methamphetamine, in violation of 21 U.S.C. §§ 841, 841(a)(1), (b)(1)(B)(viii).  If convicted, Torrez Cruz faces a minimum 5 years and a maximum 40 years in prison as well as a maximum $5,000,000 fine.

A criminal complaint merely alleges that crimes have been committed, and each defendant must be presumed innocent until proven guilty beyond a reasonable doubt.  The court may order additional terms of supervised release and restitution, if appropriate; 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. 

The defendants are scheduled for court appearances as follows:

Defendant

Next Court Date

Covarrubia Rangel

March 11, 2021

Lozano

February 16, 2021

Alvarez

None Scheduled

De La Cruz

February 24, 2021

Torres Cruz

February 18, 2021

The case is being prosecuted by the Organized Crime Drug Enforcement Task Force (OCDETF) of the United States Attorney’s Office for the Northern District of California. The investigation of this case was conducted by the DEA and HSI with assistance from the Federal Bureau of Investigation; the California Highway Patrol; the police departments of Hawthorne, Salinas, Soledad, and Gilroy; LA IMPACT; the Alameda County Narcotics Task Force; and U.S. Customs and Border Patrol Tactical Analysis Unit.

This investigation and prosecution is part of 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.

SAN FRANCISCO – The United States obtained a settlement in its lawsuit today in which the City and County of San Francisco consented to the forfeiture of its two Thai lintels to the United States, announced United States Attorney David L. Anderson of the Northern District of California and Homeland Security Investigations (NorCal) Special Agent in Charge Tatum King.

On October 27, 2020, the United States filed a complaint to forfeit the two Thai lintels which are housed in and have been displayed at the San Francisco Asian Art Museum.  The Thai lintels are two 1,500-pound hand-carved decorative relics which, according to the complaint, were originally part of ancient religious temples in Thailand and are prime examples of the decorative lintel and material art traditions of Southeast Asian art.  These religiously-significant lintels are alleged to have been exported from Thailand in violation of Thai law over 50 years ago and thereafter were donated to San Francisco and displayed at its Asian Art Museum. 

In 2017, the United States learned about the illegal exportation from Thailand of these relics, which renders them forfeitable under federal law, as the complaint alleges.  The United States and the City and County of San Francisco entered into a settlement agreement, today signed by U.S. District Court Magistrate Donna M. Ryu, in which San Francisco consents to the forfeiture to the United States of the Thai lintels and, upon the completion of the San Francisco Asian Art Museum’s deaccessioning process, their repatriation to Thailand.  The United States will thereafter coordinate with Thai authorities to ensure the safe return of the lintels to Thailand.

“I want to thank San Francisco and the Asian Art Museum for their agreement to forfeit these treasures so they may be returned to Thailand,” said U.S. Attorney Anderson.  “The United States is committed to returning stolen relics to nations seeking to preserve their heritage.  We will use all our power, including civil forfeiture, to ensure that misappropriated cultural items are returned to their rightful owners.”  

Federal importation law provides Homeland Security Investigations (HSI), which led this investigation, with the authority to lead investigations into crimes involving the illicit importation and distribution of cultural property and art. Customs law allows HSI to seize cultural property and art in the United States illegally, such as when it is reported lost or stolen.

“The successful outcome of this investigation helps restore Thailand’s cultural heritage for the appreciation and study of this and future generations,” said Homeland Security Investigations (NorCal) Special Agent in-Charge Tatum King. “The theft and trafficking of cultural artifacts is a tradition as old as the cultures they represent. Returning a nation’s precious cultural antiquities promotes goodwill with foreign governments and citizens, while significantly protecting the world’s cultural history and knowledge of past civilizations. Through our work in this investigation in partnership with the U.S. Attorney’s Office in the Northern District of California, we have diligently sought to ensure the relationship between the United States and Thailand remains one of mutual respect and admiration.”

The Thai lintels, according to the agreement, will be returned to Thailand through the U.S. Department of Justice’s victim remission program.  Upon their return, the lintels will be placed on exhibition for the religious and cultural appreciation of the people of Thailand.          

Chris Kaltsas is the Assistant U.S. Attorney in the Northern District of California prosecuting this forfeiture with Amanda M. Bettinelli of the Central District of California, and with the assistance of Irene Zhu.  The forfeiture action is the result of a three-year investigation by Homeland Security Investigations.

OAKLAND – Terrence Patrick Goggin was sentenced today to one year and one day in prison and ordered to pay $685,000 in restitution for money laundering, announced United States Attorney David L. Anderson, Federal Bureau of Investigation Special Agent in Charge Craig D. Fair, and Internal Revenue Service, Criminal Investigation, Acting Special Agent in Charge Michael Daniels.  The sentence was handed down by the Honorable James Donato, United States District Judge.

Goggin, 79, of Dunsmuir, California, who is a former California State Assemblyman as well as a California-licensed attorney, pleaded guilty to the federal charge of money laundering on December 4, 2019.  According to the plea agreement, Goggin admitted that he was the founder and CEO of Metropolitan Coffee and Concession Company, LLC (MC2).  From July 2007 to February 26, 2014, Goggin solicited investor money for MC2 to build Peet’s Coffee retail centers, including two centers to be built at the Civic Center and Balboa Park BART stations.  Among other investors in the MC2 projects, a group of four private equity investors invested $585,000 in the Civic Center project in September 2013, and an individual investor invested $100,000 in the Balboa Park project, also in September 2013.  Goggin admitted that he falsely represented to those investors that their money would be used to build out those specific future Peet’s Coffee retail centers when, in truth, he planned to use the funds otherwise.  He also failed to provide the investors with accurate information about the strained relationship between MC2 and BART and about the state of MC2’s finances. 

Goggin further admitted as part of his guilty plea that in September 2013 he diverted and directed his employees to divert nearly all of the $685,000 in investment funds to other bank accounts associated with other business ventures into which the investors had neither agreed nor intended to invest.  For one example, on September 12, 2013, the same day MC2 received $585,000 from the private equity investors, Goggin directed the transfer of $15,000 from the MC2 bank account to the business bank account of Aegis Atlantic LLC, a Delaware company of which Goggin was also the CEO.  That money was never used for the agreed-upon BART projects and was instead spent for other purposes.

A Superseding Indictment returned by the grand jury on September 13, 2018, charged Goggin with four counts of wire fraud, in violation of 18 U.S.C. § 1343, and nine counts of money laundering, in violation of 18 U.S.C. § 1957.  Under the plea agreement, Goggin pled guilty to one count of money laundering. 

United States District Judge James Donato also sentenced Goggin to a three-year period of supervised release to follow his imprisonment.  The defendant is presently out of custody and is ordered to surrender on June 28, 2021, to begin serving his sentence.

Katherine Lloyd-Lovett and Katie Medearis are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Kay Konopaske.  The prosecution is the result of an investigation by the Federal Bureau of Investigation and Internal Revenue Service – Criminal Investigation.

OAKLAND – Christina Burden was arrested today on a federal criminal complaint charging her with bank fraud in connection with a scheme to illegally obtain more than $4.5 million in pandemic relief loans, announced United States Attorney David L. Anderson; Treasury Inspector General for Tax Administration J. Russell George; Federal Bureau of Investigation, Special Agent in Charge Craig D. Fair; and Internal Revenue Service, Criminal Investigation, Acting Special Agent in Charge Michael Daniels.   

Christina Burden, 31, of Oakland, is charged in the complaint with one count of committing bank fraud on or about June 20, 2020, when she applied for and later received $684,375 in a forgivable loan from the government’s Paycheck Protection Program (PPP) for her shell entity “Blessing Box Co LLC.”  The complaint further describes a scheme in which Burden submitted nine other fraudulent applications for PPP loans between April and June of 2020, one of which resulted in her receiving an additional $307,916 in PPP funds. In total, Burden attempted to obtain over $4.5 million in PPP forgivable loans for four different shell entities. 

During this time, Burden also submitted one fraudulent Economic Injury Disaster Loan Program (EIDL) application for one of the same shell entities, for which she received $150,900 in funds.  The four entities had recently been created by Burden, according to the complaint, and do not appear to engage in any legitimate business nor to have any employees.  Loan applications for both PPP and EIDL loans are required to be certified by the applicant as true, and the criminal complaint describes how Burden’s applications contained false information and misleading statements as well as doctored bank statements and fictitious tax forms.

Burden ultimately obtained a total of over $1 million in fraudulent pandemic relief loans, including almost $1 million in PPP funds.  The PPP requires that its funds be used for legitimate business and payroll expenses, and the complaint describes how Burden spent the bulk of the loan money on personal indulgences, including private jet travel, hotel stays, boat rentals, expensive automobiles, luxury goods purchased from Louis Vuitton and Neiman Marcus, and specialty items purchased from the Sunglass Hut and the San Francisco Giants Dugout Store.

“The Paycheck Protection Program provides a financial lifeline to needy businesses and their employees,” said U.S. Attorney Anderson.  “We allege that Christina Burden obtained PPP funds by fraud, submitting false business information, false employee numbers, false bank statements, and false tax returns.  She used those funds for a spending spree on entertainment, luxury goods, and high end excursions, including travel by private jet.”  

“The Treasury Inspector General for Tax Administration aggressively pursues those who endeavor to defraud taxpayer-funded Coronavirus Aid, Relief, and Economic Security Act programs, which were established to provide assistance to American business owners during these unprecedented times,” said J. Russell George, the Treasury Inspector General for Tax Administration.  “We appreciate the efforts of the U.S. Department Justice and our law enforcement partners in this effort.”

“As we begin a second round of PPP loans for small businesses who are struggling during this pandemic, we will be on alert for fraudsters who seek to take advantage of the program,” said FBI San Francisco Special Agent in Charge Craig Fair. “Those who wish to defraud programs designed to help those in need should know that the FBI and our partners will pursue every investigative tool available to us to ensure the integrity of those programs and that they remain available to our community’s small business owners.”

“Christina Burden allegedly used fraudulently obtained funds from the Paycheck Protection Program and Economic Injury Disaster Loan program to unjustly enrich herself.  According to the criminal complaint, she submitted false documents and records to banks showing that she had employees, paid wages to those employees, and paid employment tax payments to the IRS – none of which is true,” said Michael Daniels, Acting Special Agent in Charge of IRS Criminal Investigation's Oakland Field Office.  “IRS-CI is proud to work with our law enforcement partners by lending our expertise in complex financial cases like this one.

As outlined in the complaint, the PPP is administered by the U.S. Small Business Administration (SBA) as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.  The CARES Act is a federal law enacted in March 2020 to provide emergency financial assistance to the millions of Americans suffering from the economic effects caused by the COVID-19 pandemic.  PPP loan proceeds must be used by the business on certain permissible business expenses, including payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and principal on a PPP loan to be entirely forgiven if the business spends the loan proceeds on these business expense items within a designated period of time and uses at least 60% of the PPP loan proceeds on payroll expenses.  Loans made through the PPP are 100% guaranteed by the SBA. 

Similarly, the EIDL Program provides low-interest non-forgivable loans to small businesses, among others, in regions affected by disasters.  In March 2020 the President of the United States extended the availability of EIDL funds to all states and territories due to the magnitude and severity of the COVID-19 pandemic. 

According the complaint, Burden’s loan applications contained multiple false statements certified as true.  Among those, Burden falsely affirmed that each business was in operation before February 15, 2020, and her businesses had up to 89 employees and monthly payroll expenses of over $700,000.  The complaint alleges, however, that the entities’ tax records reveal that none of them paid payroll taxes nor submitted any payroll tax forms.  Bank records submitted in Burden’s applications as evidence of the four shell entities’ payroll expense payments were revealed to be doctored when compared against the actual bank records, per the complaint’s allegations. 

The complaint lastly alleges that once Burden received the funds, she did not use the money to pay allowable PPP business expenses but instead spent it on personal indulgences: $184,000 on airfare, private jet travel, and hotel expenses; $124,000 on luxury purchases from Louis Vuitton and Neiman Marcus as well as purchases from Nordstrom, the San Francisco Giants Dugout Store, Sunglass Hut, Tumi, and Wayfair; $16,000 on boat and car rentals; and $14,000 on various restaurant and entertainment expenses, among other purchases.  In addition, the complaint alleges Burden wired hundreds of thousands of dollars to friends and family, $150,000 of which was spent in part on Mercedes and Land Rover vehicles.

The charges in the complaint are merely allegations and the defendant is presumed innocent unless proven guilty in a court of law.  

Burden is charged with one count of bank fraud, in violation of 18 U.S.C. § 1344.  Burden faces a maximum penalty of 30 years in prison and a one million dollar fine, if convicted.  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.

Burden was arrested this morning in Austin, Texas. Her initial appearance in United States District Court will be in the Western District of Texas on Monday, February 8, 2021, before United States Magistrate Judge Mark Lane, who sits in Austin.  It is anticipated that Burden will be ordered at that hearing to appear in the United States District Court in Oakland, California, to face the charge in the federal complaint.  The date for her initial appearance in Oakland federal court is as yet unscheduled. 

Abraham Fine is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Kay Konopaske and Laurie Worthen.  The prosecution is the result of an investigation by TIGTA, IRS-CI, and the FBI.

SAN FRANCISCO – Ian Benjamin Rogers was charged yesterday in a federal criminal complaint with possessing five pipe bombs that were unregistered destructive devices, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge Craig D. Fair.

“We allege that Ian Benjamin Rogers possessed homemade pipe bombs and the materials to make more,” said U.S. Attorney Anderson.  “We draw a bright line between lawlessness and our constitutional freedoms.  We will prosecute illegal weapons stockpiles regardless of the motivation of the offender.”   

“The FBI’s Joint Terrorism Task Force, the Napa County Sheriff’s Office, and the Napa Special Investigations Bureau discovered five pipe bombs and other explosive material during our joint investigation,” said FBI Special Agent in Charge Craig D. Fair. “The FBI investigates all credible threats, and our highest priority is ensuring public safety. We urge the public to remain vigilant. We need the community’s support in reporting threatening behavior and suspicious activity to local law enforcement or the FBI.”

The criminal complaint alleges that Rogers, 43, of Napa, possessed five pipe bombs discovered by law enforcement officers and agents during a search of his business on January 15, 2021.  The complaint states that on that date, Rogers was arrested and a search warrant was served on Roger’s home and business in Napa County.  Upon his arrest, at Roger’s business officers found a large gun safe.  Inside the safe, the officers and agents discovered and seized several guns and the five pipe bombs.  They also identified other materials at the scene that could be used to manufacture destructive devices, including black powder, pipes, endcaps, and manuals, including The Anarchist Cookbook, U.S. Army Improvised Munitions Handbook, and Homemade C-4 A Recipe for Survival. 

At least 49 guns were seized from Roger’s home and business along with thousands of rounds of ammunition.  Officers and agents also discovered a sticker on Roger’s vehicle window that is commonly used by so-called “Three-Percenters,” people who ascribe to extreme anti-government, pro-gun beliefs. 

Rogers was arrested on January 15, 2021, and appeared in Napa County state criminal court on state illegal firearm charges.  He is being held in state custody in lieu of a $5 million bail as he awaits a preliminary hearing.  Federal prosecutors intend to seek Rogers’s appearance in federal court on the charges in the complaint upon the issuance of a federal order to transfer Rogers to the United States District Court in San Francisco.  The date of such appearance has not yet been set. 

The charges contained in the criminal complaint are mere allegations.  As in any criminal case, the defendant is presumed innocent unless and until proven guilty in a court of law.

Rogers is charged with unlawful possession of unregistered destructive devices, in violation of 26 U.S.C. §§ 5861(d), 5845(a)(8), and 5845(f).  If convicted, the charge carries a maximum penalty of 10 years in prison and a fine of $250,000.  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.   

The United States Attorney’s Office Special Prosecutions Section is prosecuting the case.  The prosecution is the result of an investigation by the Federal Bureau of Investigation, the Napa County Sheriff’s Office, and the Napa Special Investigations Bureau.

SAN JOSE – Jerry Ji Guo was sentenced today for his role is a scheme to defraud his clients of cash and cryptocurrency in connection with an initial coin offering, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge Craig D. Fair.  Guo was ordered to pay $4,392,636.14 in restitution, and was sentenced to a term of six months in prison. The sentence was handed down by the Honorable Beth Labson Freeman, U.S. District Judge. 

Guo, 33, of San Francisco, pleaded guilty to the charge on August 26, 2019.  In pleading guilty, Guo admitted he represented himself as an initial coin offering consultant and promised his clients he would perform marketing and publicity services.  Rather than perform these services, Guo embezzled the clients’ cash and cryptocurrency. 

“Some criminals believe mistakenly that cryptocurrency is beyond the reach of law enforcement,” said U.S. Attorney Anderson.  “This case shows we can use criminal forfeiture to compensate fraud victims even when cryptocurrency is used in the fraud.”

“The FBI is tasked with pursuing crimes and the various means and methods that criminals use to commit those crimes,” said FBI San Francisco Special Agent in Charge Craig D. Fair. “In the financial sector, cryptocurrency has emerged as a significant threat as it affords criminals with a space to conduct activity that is particularly difficult to trace and detect,” he said. “In this case, the FBI relied upon partners in the private sector to respond appropriately to legal process so the FBI could make efforts to locate and seize stolen cryptocurrency.”

A federal grand jury indicted Guo on November 15, 2018, charging him with eight counts of wire fraud, in violation of 18 U.S.C. § 1343. Guo pleaded guilty to one count and the remaining counts were dismissed. 

In addition to pleading guilty, Guo agreed to cooperate with the government in the identification and return of property through the forfeiture process.  On November 14, 2019, the government obtained a stipulated application for a preliminary order of forfeiture.  Further, the government obtained warrants to seize the stolen cash and cryptocurrency, and on February 26, 2020, obtained a final order of forfeiture against the stolen property.  Accordingly, the government now is in a position to return the stolen property to the victims. 

According to papers filed by the government, the current value of the cash and cryptocurrency is now estimated to be more than $20 million.  The Money Laundering and Asset Recovery Section, a component of the Department of Justice’s Criminal Division in Washington, D.C., will use the victim restoration process to return stolen property to victims. 

In addition to the prison term and restitution, Judge Freeman also sentenced the defendant to a three-year period of supervised release.

Assistant United States Attorneys Daniel Kaleba and Chris Kaltsas prosecuted the case with the assistance of Elise Etter.  The prosecution is the result of an investigation by the FBI.

SAN FRANCISCO – Jontae Carlos Sandifer was sentenced today to 138 months in prison for possessing a firearm in furtherance of a drug trafficking crime, possession with the intent to distribute heroin, and being a felon in possession of a firearm and ammunition, announced United States Attorney David L. Anderson and Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) Special Agent in Charge Patrick Gorman.  The sentence was handed down by the Honorable Vince Chhabria, United States District Judge.

Sandifer, 40, of Patterson, California, pleaded guilty to the charges on March 10, 2020.  As part of the guilty plea, Sandifer admitted in a plea agreement that on August 12, 2019, he was in an argument with a man in the Tenderloin neighborhood of San Francisco and pulled a semiautomatic handgun out of the trunk of his car.  He fired one shot across Leavenworth Street in the man’s direction.  The bullet missed the man.  Sandifer further admitted that he possessed twenty-five plastic twists of heroin found in his nearby parked car and that he intended to distribute that heroin.  Sandifer also admitted that he possessed fourteen additional rounds of ammunition with the pistol he fired and that he possessed the weapon and ammunition to further his intended heroin distribution.  In addition, Sandifer admitted he knew he previously had been convicted of multiple felony offenses which made it illegal for him to possess firearms or ammunition.

The government filed a sentencing memorandum asserting additional facts providing a broader description of Sandifer’s crimes.  The government stated Sandifer fired the shot toward the man at approximately 6:45 p.m. while the man was crossing the street near the corner of Leavenworth Street and Golden Gate Avenue, a time when pedestrians were passing by.  The bullet missed the man and all the passers-by, and it struck a building.  Inside the building, children were practicing for an upcoming play.  The building where the children were practicing is the home of a non-profit tutoring facility for under-resourced students and, according to the government, the bullet struck the outside and narrowly missed hitting the ground floor window.  The government’s memorandum further describes that Sandifer left the scene immediately but police shortly detained him.  The police located and searched his parked car.   

“The Tenderloin belongs to the families, businesses, workers, and others who are fostering a community in this wonderful neighborhood,” said U.S. Attorney Anderson.  “For too long drug dealers and users have descended on the Tenderloin as a convenient place to commit their crimes. The Tenderloin desperately needs vigorous prosecutions to carry forward the work of professional law enforcement.  We will continue to do all we can in federal court.”

“ATF is committed to making the Tenderloin a safer place for everyone,” said Special Agent in Charge Gorman, San Francisco Field Division, ATF.  “Protecting the public is at the core of ATF’s mission.  The San Francisco Field Division will continue to work diligently with our partners to eradicate the illegal possession and use of firearms.  This investigation is an example of the dedication and importance ATF and our partners place in honoring our commitment to this community.”

A federal grand jury indicted Sandifer on October 10, 2019. He was charged with possession with intent to distribute heroin, in violation of 21 U.S.C. § 841(a)(1) and (b)(1)(C); possessing a firearm in furtherance of a drug trafficking crime, in violation of 18 U.S.C. § 924(c)(1)(A); and being a felon in possession of a firearm and ammunition, in violation of 18 U.S.C. § 922(g).  He pleaded guilty to all counts.  Sandifer has been in custody since August 12, 2019, and will begin serving his sentence immediately.

In addition to the prison term, United States District Judge Chhabria also ordered Sandifer to serve a three-year period of supervised release.

Assistant U.S. Attorney Noah Stern is prosecuting the case with the assistance of Marina Ponomarchuk and Ralph Banchstubbs.  The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the San Francisco Police Department. 

This investigation and prosecution is part of the Federal Initiative for the Tenderloin, a multi-agency effort spearheaded by the U.S. Attorney’s Office focusing on fighting crime in the Tenderloin neighborhood of San Francisco.

SAN FRANCISCO – The United States Attorney’s Office for the Northern District of California filed an indictment charging defendant Rodney L. Stevenson II with wire fraud, mail fraud, and money laundering for his operation of an e-commerce site that claimed to have N95 masks for sale during the current COVID-19 epidemic, announced United States Attorney David L. Anderson, U.S. Postal Inspector in Charge Rafael E. Nuñez, and Federal Bureau of Investigation Special Agent in Charge Craig Fair.  Stevenson was previously arrested and charged via criminal complaint.

According to the indictment, Stevenson operated EM General, a Michigan limited liability company created in September 2019, which purported to sell N95 masks with N99 filters.  At the onset of the COVID-19 pandemic in February 2020, EM General and its website, controlled by Stevenson, advertised that it had N95 masks “in stock” and available for shipping.  EM General sold many of these masks for as much as $24.95 each.  Also according to the indictment, to bolster the legitimacy of EM General, Stevenson created a professional-looking website that included the names, backstories, and stock photographs of a group of fake EM General executives.  It also falsely described how long the company had been in business, its sales volume, and its reputation.  Stevenson also used fictitious names in emails to customers.

The indictment alleges that, as the pandemic worsened and demand for N95 masks increased dramatically, EM General’s sales skyrocketed.  EM General’s total sales from approximately on or about February 11, 2020, to approximately on or about March 8, 2020, were approximately $3,500,000 involving over 25,000 customers, the vast majority of which were sales of N95 masks that were never delivered to customers.  This amount included over $900,000 in sales on February 28, 2020, alone. 

According to the indictment, Stevenson and EM General delivered almost none of the masks.  Instead, when customers complained and asked for refunds, Stevenson, at times communicating with Gmail accounts he created under the names of fake identities, generally refused to refund customers and instead offered a series of lies to fraudulently prolong his scheme while he continued selling masks.  These lies included that EM General could not offer refunds because it had already paid for the customer’s order from a manufacturer, that products would ship soon, and that customers would receive tracking orders soon.  For a small number of customers, Stevenson eventually fraudulently substituted masks that did not meet the standards set by the National Institutes of Occupational Safety and Health for N95 or N99 masks, meaning that they did not filter out 95 or 99 percent of particulate matter from the air.

Stevenson is charged with nine counts of wire fraud, in violation of 21 U.S.C. § 1343; one count of mail fraud, in violation of 18 U.S.C. § 1341; five count of laundering of monetary instruments, in violation of 18 U.S.C. § 1956(a)(1)(A)(i); and one count of money laundering, in violation of 18 U.S.C. § 1957. 

An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, the defendant faces a maximum sentence of 20 years of prison, 5 years of probation, and a fine of $250,000 for each count of wire fraud or mail fraud, and a maximum sentence of 10 years of prison, 3 years of probation, and a fine of $250,000 for each count of laundering of monetary instruments or money laundering.  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. 

Stevenson was charged by criminal complaint with one count of wire fraud on April 22, 2020.  He is currently scheduled for arraignment on the indictment on January 15, 2021, before Alex Tse, U.S. Magistrate Judge.

The case is being prosecuted by the Special Prosecutions Section the United States Attorney’s Office for the Northern District of California.

SAN FRANCISCO - A federal grand jury in San Francisco indicted Christian Guardado on one count of the distribution of child pornography, announced United States Attorney David L. Anderson and Homeland Security Investigations NorCal Special Agent in Charge Tatum King.  Guardado made his initial appearance in federal court on the indictment yesterday.

According to the indictment, Guardado, 24, of San Mateo, is alleged to have distributed a video on or about February 21, 2019, of a minor engaged in sexually explicit conduct. 

The government filed a motion, now unsealed, to detain Guardado in custody pending trial.  In the motion, the government asserts that Guardado sexually abused a 15 year old male victim during the fall of 2018 and filmed video of the minor victim engaged in sex acts.  The government alleges Guardado distributed one of the videos to another adult male, then followed up with the message, “This is some other 15 year old.”  The government also alleges Guardado filmed a pornographic video with at least one other suspected underage male victim and sent it to another person in exchange for payment.

The government further states that Guardado traveled to Spain in part because of Spain’s lower age of sexual consent than the United States.

The government also asserts that Guardado contacted other suspected minor victims online on social media applications and that he formerly was associated with a children’s camp.

Investigators are asking anyone who has further information about Christian Guardado or his activities that may be relevant to this case to call Homeland Security Investigations tip line at (866) 347-2423.

Guardado has been charged with distribution of child pornography, in violation of 18 U.S.C. 2252(a)(2).  Defendant was arrested on Friday, January 8, 2021, and made his initial appearance in federal court yesterday in San Francisco before United States Magistrate Judge Alex G. Tse.  Defendant is currently being held at Santa Rita Jail pending a detention hearing scheduled for January 14, 2021, before United States Magistrate Judge Alex G. Tse.          

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted on the distribution of child pornography charge, the defendant faces a minimum sentence of five years imprisonment, a maximum sentence of 20 years imprisonment, a supervised release term of five years, a fine of $250,000, a special assessment of $100, possible criminal forfeiture, and restitution.  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. 

Yoosun Koh is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Jasmine Sanders and Daniel Fuentes.  The prosecution is the result of an ongoing investigation by Homeland Security Investigations NorCal and the San Mateo Police Department. 

SAN FRANCISCO - A federal complaint was unsealed today charging Ardit Ferizi with wire fraud and aggravated identity theft, announced United States Attorney David L. Anderson and Federal Bureau of Investigation, Special Agent in Charge Rachel L. Rojas, of the Jacksonville, Florida, FBI Division.

Ardit Ferizi, 25, a Kosovo citizen, last resided in Malaysia before being brought to the Eastern District of Virginia (EDVA) in 2016 to face federal criminal charges.  Ferizi pleaded guilty to unauthorized access of computer information and to providing material support to a foreign terrorist group by providing personally identifiable information of United States government personnel to the Islamic State of Iraq and al-Sham (ISIS).  He was sentenced to 20 years incarceration in the federal Bureau of Prisons. 

According to the complaint, Ferizi’s sentence was reduced in December 2020 to time-served, plus 10 years of supervised release to be served in Kosovo, following the granting of a motion for compassionate release by an EDVA federal judge.  Ferizi was awaiting deportation when the FBI determined he continued his criminal activities and had committed multiple new federal offenses while incarcerated at the Federal Correctional Institute in Terre Haute, Indiana.

“We allege Ferizi provided access to personal information of U.S. citizens, even as he was serving his prison sentence for providing similar information to ISIS,” said U.S. Attorney Anderson. “Ferizi’s alleged criminal conduct continued in prison notwithstanding his petition for an early prison release.”

"Ardit Ferizi is an admitted criminal who endangered the lives of over 1,000 Americans by sharing their personal information with members of a dangerous terrorist organization," said Special Agent in Charge Rojas, in charge of the FBI Jacksonville Division.  “The FBI has never wavered in our commitment to seek justice for his innocent victims, and we will continue to vigorously investigate him and anyone else who is intent on harming our nation and citizens.”

According to an FBI agent’s affidavit filed in support of the criminal complaint, in 2017 and 2018 Ferizi had been involved in multiple fraudulent schemes from prison by coordinating with a family member who was operating Ferizi’s email accounts while Ferizi was incarcerated.  Ferizi instructed the family member to “keep my email alive and not expiring” and passed his email addresses and passwords on to his family member.  The FBI was able to determine that at least one email account included large databases of stolen personally identifiable information, extensive lists of stolen email accounts, partial credit card numbers, passwords, and other confidential information.  According to the complaint affidavit, the databases of stolen personal information were the fruits of Ferizi’s criminal hacking activity.  Based on an IP address resolving to Kosovo, login activity to Ferizi’s other e-mail accounts, and other investigative information, it was determined the family member downloaded the databases of stolen information to liquidate the proceeds of Ferizi’s previous criminal hacking activity. 

In the course of these new crimes, Ferizi and his family member are alleged to have used electronic services of Google, PayPal, and Coinbase, each of which is located in the Northern District of California.  The affidavit further alleges that Ferizi continued to communicate with others to further this scheme while in custody.  It is alleged that electronic communications were used to further the scheme and that personal data and information used belonged to real individuals who were victimized.

Ferizi is charged with one count of aggravated identity theft in violation of Title 18, United States Code, Section 1028A, and one count of wire fraud in violation of Title 18, United States Code, Section 1343.  If convicted of wire fraud, he faces a maximum penalty of 20 years in prison and a fine of $250,000.  If convicted of aggravated identity theft, he faces a mandatory penalty of 2 years in prison in addition to the punishment imposed for a wire fraud conviction.  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.

The charges contained in the criminal complaint are mere allegations.  As in any criminal case, the defendant is presumed innocent unless and until proven guilty in a court of law.

Ferizi currently is in federal custody and will be transported to the Northern District of California to face the new federal charges.  His initial federal court appearance to face the new charges has not yet been scheduled. 

The Corporate Fraud Strike Force of the Northern District of California U.S. Attorney’s Office is prosecuting the case.  The prosecution is the result of an investigation by the Federal Bureau of Investigation Jacksonville and Washington field offices. 

OAKLAND –Shawn Jamison Prichard was charged in a criminal complaint with possession of child pornography announced United States Attorney David L. Anderson and Homeland Security Investigations (HSI) Special Agent in Charge Tatum King.

According to the complaint filed December 22, 2020, and unsealed this morning, Prichard, 41, of Antioch, allegedly possessed at least one image of child pornography involving the use of a prepubescent minor engaged in sexually explicit conduct.  Prichard is a licensed nurse in California.  The criminal investigation in this case began with a tip from a social media company based on defendant’s use of a messaging service to send images of child pornography. Prichard is charged with possession of child pornography, in violation of 18 U.S.C. § 2252. 

Prichard made his initial federal court appearance in federal court this morning before U.S. Magistrate Judge Susan van Keulen.  His next appearance is a detention hearing scheduled for December 29, 2020, at 10:30 a.m., before U.S. Magistrate Judge Laurel Beeler.

A criminal 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 maximum sentence of 10 years (20 years if the images depict pre-pubescent children), and a fine of $250,000, plus restitution, if appropriate.  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 Jonathan U. Lee is prosecuting the case with the assistance of Jessica Rodriguez Gonzalez and Kathleen Turner.  The prosecution is the result of an investigation by the Silicon Valley Internet Crimes Against Children Task Force and HSI.

OAKLAND - David Leveren Quinn has been charged in a federal criminal complaint with robbery affecting interstate commerce, announced United States Attorney David L. Anderson and United States Postal Inspection Service Inspector in Charge Rafael Nunez.

The criminal complaint alleges that between August 11, 2020, and September 25, 2020, Quinn, 31, of Oakland, committed at least six robberies or attempted robberies of United States Postal Service (USPS) letter carriers in East Oakland with one or more unknown conspirators. While the circumstances vary, the complaint alleges that in most of the robberies Quinn and one other person surveilled a USPS letter carrier and then parked near the letter carrier’s mail truck. Quinn or his co-conspirator would get out of their vehicle, confront the letter carrier, and take or attempt to take trays of mail and packages from the mail truck.  In several of the robberies, Quinn or his co-conspirator carried, showed, or pointed a suspected firearm at the letter carrier during the robbery.  The complaint alleges that Quinn committed the robberies, at least in part, to engage in identity theft, including by stealing unemployment benefits issued during the COVID-19 global pandemic.

The complaint specifically charges Quinn with a September 19, 2020, robbery of a USPS letter carrier near the corner of 66th Avenue and Avenal Avenue in Oakland. At around three in the afternoon, according to the complaint, a silver Infinity sedan, with its front license plate removed, parked near a letter carrier who was at the back of his mail truck retrieving mail. Quinn got out of the Infinity, approached the letter carrier, and placed a suspected firearm at the letter carrier’s right side and told him not to move.  Quinn was joined by his crime partner, and they took mail trays from the mail truck and fled in the Infinity sedan.

According to the complaint, shortly after the robbery, surveillance footage from an ATM in Oakland shows Quinn using a California Employment and Development Department (EDD) debit card to withdraw $1,000 in cash.  That debit card had been mailed to an address on the mail route of the letter carrier who Quinn had just robbed.  The next day Quinn used the same prepaid debit card to purchase a Cadillac SUV that he used in a subsequent attempted robbery.  A law enforcement search of Quinn’s phone showed that Quinn also tried to activate another EDD debit card that had been mailed to an address also on the mail route of the letter carrier that Quinn had robbed on September 19, 2020.    

Quinn made his initial appearance in federal court today before United States Magistrate Judge Laurel Beeler.  Quinn is in custody and his next scheduled appearance is at 10:30 am on December 22, 2020, before United States Magistrate Judge Beeler for a status hearing regarding his detention.            

A complaint merely alleges that crimes have been committed, and Quinn is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Quinn faces a maximum sentence of 20 years in prison and a maximum fine of $250,000, or twice the gross pecuniary gain to the defendant or twice the gross pecuniary loss inflicted on victims, and restitution.  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. 

Noah Stern is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Kay Konopaske and Kathleen Turner.  The prosecution is the result of an investigation by the United States Postal Inspection service and the Oakland Police Department.

SAN FRANCISCO – Lewis Wallach pleaded guilty today in federal court to fraud charges for his role in a large-scale fraud involving the Marin County real estate company Professional Financial Investors, or PFI, announced United States Attorney David L. Anderson and Federal Bureau Investigation Special Agent in Charge Craig D. Fair.  The plea was accepted by the Hon. Maxine M. Chesney, U.S. District Judge.

Wallach, 64, of Los Angeles, is the former CEO of PFI.  He was charged in a criminal information filed on September 29, 2020, alleging that he and PFI’s now-deceased founder ran the company as a Ponzi scheme.  The information charged Wallach with one count of wire fraud and one count of conspiracy to commit wire fraud, in a scheme to defraud and conspiracy that went back to at least 2015.

According to his plea agreement, Wallach admitted that he was hired by the founder of PFI and related entity Professional Investors Security Fund, or PISF, in 1990, and that he was later named president and CEO of PFI.  Both companies were based in Novato, California. Wallach admitted that PFI and PISF investors were told that the investors’ regular interest and distribution payments would be paid from income on the residential and commercial properties owned and managed by PFI.  In fact, as Wallach admitted, he knew that PFI was not profitable and that income from the properties was not sufficient to pay both interest and distributions.  In fact, both Wallach and the company founder knew that PFI and PISF had to raise new investments to pay existing investors. 

Wallach admitted that he lied to investors, including falsely telling investors that PFI had significant reserves to allow it to survive and expand during the economic downturn caused by the COVID 19 pandemic. He admitted that he conspired with the PFI founder to mislead investors and solicit investor funds using false statements.

Wallach also admitted that he engaged in a years-long scheme to embezzle funds from PFI and PISF in which he took more than $26 million from 2015 until June 2020, including money he used for large investments, the purchase of real estate, and payment of personal expenses. 

Under a plea agreement entered by Wallach and the United States Attorney’s Office, Wallach agrees to the entry of an order by the court requiring him to pay restitution of no less than $26.7 million.  Pursuant to the agreement, Wallach also agrees to continue to cooperate in the criminal investigation and to assist prosecutors with identifying, securing, and transferring any assets derived from or related to the charged offense. 

Wallach was charged by information on September 29, 2020, with one count of wire fraud, in violation of 18 U.S.C. § 1343, and one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349. Wallach pleaded guilty to both counts. 

The maximum statutory penalties for each of the two counts, wire fraud under 18 U.S.C. § 1343 and conspiracy to commit wire fraud under 18 U.S.C. § 1349, are 20 years in prison, a fine of $250,000, and restitution.  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.

Wallach is currently on pretrial release after posting a $500,000 bond.  The case was set for a status hearing on March 24, 2020, at 2:15 p.m., before the Honorable Maxine M. Chesney, U.S. District Judge; no sentencing hearing has been scheduled.

The case is being prosecuted by the Corporate Fraud Strike Force of the U.S. Attorney’s Office.  The prosecution is the result of an investigation by the Federal Bureau of Investigation.  The United States Attorney’s Office and the Federal Bureau of Investigation also thank the San Francisco Regional Office of the Securities and Exchange Commission.

SAN FRANCISCO – A federal grand jury indicted seven East Bay residents, charging them with crimes related to a scheme to supply drug users and dealers in San Francisco’s Tenderloin District with narcotics, including fentanyl and heroin, announced United States Attorney David L. Anderson, Drug Enforcement Administration (DEA) Special Agent in Charge Daniel C. Comeaux, Homeland Security Investigations (HSI) NorCal Special Agent in Charge Tatum King, and Federal Bureau of Investigation Special Agent in Charge Craig D. Fair.  In a press conference earlier today, U.S. Attorney Anderson announced the indictment and announced that charges were filed in a related criminal complaint against an eighth defendant.

The seven indicted defendants are Emilson Jonathan Cruz Mayorquin, aka “Playboy” (Cruz), 23; Leydis Yaneth Cruz (Leydis), 42; Ivan Mauro Mayorquin (Mayorquin), 35; Pamela Carrero aka “Nicole,” aka “Kendra,” 20; Ana Maldonado, 22; Adonis Torres, 33; and Mayer Benegas-Medina, 27.  According to the indictment, from at least July to December 2020, the defendants conspired to distribute fentanyl.  Court documents describe how defendants were members of a drug trafficking organization (DTO) being run primarily by Cruz and his mother, Leydis.  Cruz and Leydis allegedly worked with other associates including Cruz’s significant other (Maldonado); Cruz’s sister (Carrero) and her significant other (Torres); and another family member (Mayorquin) to engage in street level drug sales and to supply narcotics for resale to multiple local narcotics re-distributors.  The defendants allegedly lived in the East Bay, but routinely traveled to the Tenderloin to sell drugs, primarily fentanyl, on the streets of San Francisco. 

“Parents and children who are sheltering in place against the Covid virus find it impossible to leave their own homes because of open-air drug use and drug trafficking by people who have come to the Tenderloin from outside the neighborhood,” said U.S. Attorney Anderson.  “No neighborhood should be designated a law-free zone where dangerous drugs can be bought and sold with impunity.”

“The Federal Initiative in the Tenderloin began more than a year ago with a focus on eradicating the open air drug markets operating in the area with impunity. This case is another example that our sustained efforts are making a difference and we do not intend to take our foot off the gas,” stated DEA Special Agent in Charge Daniel C. Comeaux. “The people who live and work in this community deserve a neighborhood in which the rule of law prevails.”

“Fentanyl and heroin are a scourge on our nation, poisoning and killing our family and friends. The trail of destruction in human lives and community blight inevitably leads to the doorsteps of the criminals illegally trafficking these narcotics. Anyone involved in destroying lives just to make an illicit profit by selling drugs in Northern California will not remain free,” said Special Agent in Charge King. “Homeland Security Investigations Special Agents worked closely with our partners at the DEA, FBI, U.S. Customs and Border Protection, San Francisco Police Department, and San Ramon Police Department to disrupt and take down this criminal enterprise. Through U.S. Attorney Anderson’s Federal Initiative for the Tenderloin, HSI agents will continue leading and supporting this and other federal criminal investigations in the region.”

In court documents, the government has alleged that multiple members of the DTO sold a variety of drugs—including powder fentanyl, counterfeit pharmaceutical pills containing fentanyl, and heroin—to a DEA agent acting in an undercover capacity. The documents describe how members of the DTO often referred to the diverse types of fentanyl being sold by their various colors, such as blue, pink, and yellow.  Further, the government has alleged that members of the DTO communicated by cell phone to discuss all aspects of running the drug business, including the availability of the various types of fentanyl, the public demand for different varieties of drugs, and the price at which drugs could be sold.  They even discussed how they could grow their drug business (e.g., “the gram customers recommended other good customers who got more.”)  The members of the organization also discussed the presence of police in the Tenderloin, the amounts of each type of fentanyl they had available for sale, and, on at least one occasion, whether another member of the organization could travel to San Francisco to bring a particular variety of fentanyl that another member forgot on his commute from the East Bay.

Papers filed in the case also describe the dangers of fentanyl in stark terms.  Fentanyl is about 50 times stronger than heroin and about 100 times stronger than morphine.  Further, according to the Centers of Disease Control and Prevention, two out of three of the 46,802 opioid overdose deaths in 2018 involved synthetic opioids such as fentanyl.  In addition, the San Francisco Office of the Medical Examiner published data indicating that approximately 300 people in city of San Francisco died between January and August 2020 due to accidental overdoses from fentanyl. According to the DEA, two milligrams of fentanyl can be a fatal dose. In this case, the DTO allegedly sold approximately $45,000 worth of drugs to an undercover agent, including over 200 grams of powder fentanyl. 

Court documents describe how federal investigators used a variety of tools including physical surveillance, undercover purchases, and interception of communications on cell phones used by Cruz, Leydis, and Carrero, to further the investigation.  In one example of an October 2020 cell phone exchange between Mayorquin and Cruz, Mayorquin reported that another individual wanted to work for Cruz as a street-level dealer.  Cruz responded that he could keep the person busy.  During the same call, Cruz asked Mayorquin to lend him (Cruz) an ounce of yellow fentanyl for resale.   

Court documents also describe how Mayer Benegas-Medina was arrested as part of the law enforcement operation that led to the indictment.  Benegas was arrested in the Oakland residence where Ivan Mauro Mayorquin also was arrested.  The indictment alleges Benegas used a cellular telephone to facilitate drug transactions. 

In addition to the seven defendants in the indictment, Gustabo Alfonso Ramos, 22, was arrested in Oakland and charged in connection with a drug sale that occurred near the corner of Franklin Street and Golden Gate Avenue in San Francisco.  According to the complaint, on October 8, 2020, Ramos distributed approximately four ounces of fentanyl in exchange for $4,000. 

In sum, the defendants are charged with the crimes and face maximum penalties as indicted in the chart below:

Charges

Statute

Defendant(s)

Maximum Penalties

(per count)

Conspiracy to Distribute and Possess with Intent to Distribute Fentanyl

21 U.S.C.

§§ 846, 841(a)(1) and (b)(1)(C)

All defendants

except Gustabo Alfonso Ramos

20 years in prison and a $1,000,000 fine

Distribution of Fentanyl

21 U.S.C. §§ 841(a)(1) and (b)(1)(C)

Pamela Carrero (5 counts)

Leydis Yaneth Cruz

20 years in prison and a $1,000,000 fine

Distribution of 40 Grams or More of Fentanyl

21 U.S.C. §§ 841(a)(1) and (b)(1)(B)

Pamela Carrero

Leydis Yaneth Cruz

40 years in prison (maximum), a minimum of 5 years in prison, and a $5,000,000 fine

Distribution of 100 Grams or More of Heroin

21 U.S.C. §§ 841(a)(1) and (b)(1)(B)

Emilson Jonathan Cruz Mayorquin

40 years in prison (maximum), a minimum of 5 years in prison, and a $5,000,000 fine

Illegal Use of a Communication Facility

21 U.S.C. § 843(b)

Mayer Benegas-Medina

4 years in prison and a

$250,000 fine

Distribution of Fentanyl

21 U.S.C. §§ 841(a)(1) and 841(b)(1)(C)

Gustabo Ramos

20 years in prison and a $1,000,000 fine

An indictment and a criminal complaint merely allege that crimes have been committed, and each defendant must be presumed innocent until proven guilty beyond a reasonable doubt.  The court may order additional terms of supervised release and restitution, if appropriate; 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.

The defendants are scheduled for court appearances as follows:

Defendant

Next Court Date

Emilson Cruz Mayorquin

December 21, 2020, at 10:30 a.m.

Leydis Yaneth Cruz

December 18, 2020, at 10:30 a.m.

Pamela Carrero

December 18, 2020, at 10:30 a.m.

Ivan Mauro Cruz Mayorquin

December 21, 2020, at 10:30 a.m.

Ana Maldonado

December 22, 2020, at 10:30 a.m.

Adonis Torres

December 17, 2020, at 10:30 a.m.

Mayer Benegas-Medina

December 17, 2020, at 10:30 a.m.

Gustabo Ramos

December 22, 2020 at 10:30 a.m.

The case is being prosecuted by the Organized Crime Drug Enforcement Task Force (OCDETF) of the United States Attorney’s Office for the Northern District of California. The investigation of this case was conducted by the DEA, HSI, the FBI, U.S. Customs and Border Patrol, the San Francisco Police Department, and the San Ramon Police Department.

This investigation and prosecution is part of 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.

SAN FRANCISCO - A federal grand jury in San Francisco charged Fernando Madrigal, AKA “Nando,” Alvaro Reina Cordero, AKA “G-Boy,” and Oscar Guadron Diaz, AKA “Cutty,” in a superseding indictment with charges of a racketeering conspiracy involving three murders and a shooting; the use and the discharge of a firearm during violent offenses; and the possession of a machinegun, announced United States Attorney David L. Anderson, and Federal Bureau of Investigation Special Agent in Charge Craig D. Fair.

In the original indictment filed August 20, 2020, the defendant Madrigal, 22, of San Francisco, was identified as a member of a street gang known as the San Francisco Mission District (SFMD) Norteños and charged with the July 8, 2019, shooting murder in the Mission District of a 15 year old who was mistaken as a rival gang member.   

In the superseding indictment unsealed December 11, 2020, the federal grand jury charged Madrigal and two others, Reina Cordero, 23, of Daly City and Guadron Diaz, 21, of Oakland, with charges of firearm violence and of engaging in a racketeering conspiracy that involved committing multiple violent acts to support the SFMD Norteño gang, of which they are alleged to be members.  Norteño gang members work together to support their gang by acts such as “hunting” to find and kill members of rival gangs, armed robberies, shootings, and other violence, all of which enhances the gang’s reputation as being strong, powerful, and dominant.  Norteño gang members also commit crimes to enhance the financial strength of their gang, such as drug trafficking, theft, and firearms trafficking.

The racketeering conspiracy charge against the three defendants Madrigal, Reina Cordero, and Guadron Diaz describes the violent acts the defendants engaged in as part of and in furtherance of the conspiracy to support their Norteño gang. 

The superseding indictment charges that on or about January 23, 2018, Reina Cordero and Guadron Diaz, with others, murdered one victim and attempted to murder a second victim, who are identified in the superseding indictment as Victim-1 and Victim-2, respectively. 

The superseding indictment alleges that the attack occurred at approximately 5:11 pm near Leese Street and Richland Avenue, an intersection near Mission Street in San Francisco, while vehicle traffic and pedestrians were nearby.  Multiple gunshots were fired during the attack. 

The superseding indictment alleges Reina Cordero and Guadron Diaz targeted and murdered Victim-1 because they believed he associated with a rival Sureño gang.  Victim-2, who was with Victim-1, suffered a gunshot wound to the face but survived.                       

The superseding indictment also charges that on July 12, 2018, Madrigal, with others, murdered Victim-3.  The superseding indictment alleges that on the date of July 12, 2018, Victim-3’s car was located unattended near Candlestick Park in San Francisco.  Days later, Victim-3’s cell phone was recovered near the San Mateo Bridge.  It had blood on it.  Over a year later, on February 20, 2020, tree trimmers found human remains in a wooded area in Oakland.  The body’s skull was missing but located later, on or about March 25, 2020.  The remains were submitted for DNA comparisons and determined to be those of Victim-3.  Information from Victim-3’s cell phone indicates that Madrigal had arranged to meet Victim-3 at Candlestick Park, claiming he wanted to buy marijuana from the victim.

The superseding indictment further charges the murder of July 8, 2019 – charged earlier in the original indictment – in which Madrigal, with others, shot and killed Victim-4.  The superseding indictment details that this murder occurred just after midnight and within two blocks of the 24th Street and Mission Street BART station in San Francisco.  Police identified the 15-year old murder victim by a student identification card in his pocket and determined that he lived in the area claimed by Army Street.  The superseding indictment alleges Madrigal targeted Victim-4 because Madrigal believed Victim-4 was associated with the Army Street gang.  Nine rifle casings were recovered from the scene.  Immediately after the murder on July 8, Madrigal and others allegedly drove to the Bernal Dwellings Apartments, which is claimed by the Army Street gang as its territory, and fired another shot from the same gun used in the murder, and immediately thereafter led San Francisco Police Department officers on a high-speed chase down Highways 101 and 280 before getting away near John Daly Boulevard. 

The superseding indictment also charges Reina Cordero and Guadran Diaz together in a separate count with the crime of the use of a firearm in the murder of Victim 1 and in another count charges them with the discharge of a firearm in the attempted murder of Victim-2.  The superseding indictment also separately charges Madrigal with the use of a firearm in the murder of Victim-3 and in another count charges Madrigal with the use of a firearm in the murder of Victim-4. 

The superseding indictment further charges Guadron Diaz with possession of a machinegun on January 25, 2018.  

Reina Cordero was arrested and made his initial appearance on these charges in federal court on December 11, 2020.  He remains in custody and is set for a detention hearing on December 18.  Guadron Diaz went into FBI custody last night and made his initial appearance today in federal court before United States Magistrate Judge Laurel Beeler.  He remains in custody, and his next appearance is scheduled on December 18 for a detention hearing.  Madrigal remains in federal custody and is scheduled for his next appearance on December 17.        

A superseding indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.  The following chart outlines the charges and maximum sentences:

Fernando Madrigal,

AKA “Nando”

18 U.S.C. § 1962(d) – Racketeering Conspiracy

 

18 U.S.C. §§ 924(j)(1) and 2 – Use of a Firearm Causing Murder of Victim-3

 

18 U.S.C. §§ 924(j)(1) and 2 – Use of a Firearm Causing Murder of Victim-4

 

Death or life imprisonment

Alvaro Reina Cordero, AKA “G-Boy”

18 U.S.C. § 1962(d) – Racketeering Conspiracy

 

18 U.S.C. §§ 924(j)(1) and 2 – Use of a Firearm Causing Murder of Victim-1

 

18 U.S.C. §§ 924(c)(1)(A) and 2 – Discharge of a Firearm in Furtherance of the Attempted Murder of Victim-2

 

Death or life imprisonment

Oscar Guadron Diaz,

AKA “Cutty”

18 U.S.C. § 1962(d) – Racketeering Conspiracy

 

18 U.S.C. §§ 924(j)(1) and 2 – Use of a Firearm Causing Murder of Victim-1

 

18 U.S.C. §§ 924(c)(1)(A) and 2 – Discharge of a Firearm in Furtherance of the Attempted Murder of Victim-2

 

8 U.S.C. §§ 922(o) – Possession of a Machinegun

 

Death or life imprisonment

The maximum sentences are reflected above; 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. 

The United States Attorney’s Office Organized Crime Gang Strike Force is prosecuting this case.  The prosecution is the result of a multi-year investigation by the FBI, together with San Francisco Police Department’s Gang Task Force and Homicide Detail

OAKLAND - Chu-Chiang Ho, a/k/a Kevin Ho, pleaded guilty in federal court today to illegally importing automobile headlights that failed to meet U.S. safety standards, announced United States Attorney David L. Anderson and Homeland Security Investigations (HSI) Special Agent in Charge (San Francisco and Northern California) Tatum King.  The plea was accepted by the Honorable Jon S. Tigar, U.S. District Judge.

Ho, 44, of Fremont, Calif., admitted that he has known since 2005 that the headlights and other headlight kit parts he had been importing from China were illegal, when he acknowledged in a report to the National Highway Transportation Safety Administration that the High-Intensity Discharge (“HID”) lights he imported from China were too bright and that they did not meet regulatory photometric requirements.  Ho claimed at the time that he was discontinuing the sale of all illegal headlights.  Nevertheless, for more than 13 years thereafter, he continued to smuggle the illegal parts into the United States and sell them through websites including HIDExtra.com, kalex.us, and opt7.com.

In the plea agreement, Ho admitted that the HID kit components that he imported are prohibited from importation into the United States under 49 U.S.C. §§ 30112 and 30115 because they violate Department of Transportation (DOT) safety laws, including those promulgated at 49 C.F.R. § 571.108, as they emit much brighter light than conventional headlights and can create a public safety hazard.

Ho also admitted that for more than a decade he engaged in various acts designed to conceal his scheme.  For example, Ho changed company names numerous times to avoid detection by U.S. Customs and Border Protection (CBP) and he listed a variety of family members as corporate officers of his companies despite maintaining control over the business at all times.  Ho also admitted that he misstated to CBP the nature of the merchandise he was importing to deceive the agency into believing the merchandise was legal.

Ho admitted that he profited from his scheme and used the proceeds of the illegal HID Kits to assist in his purchase of various properties in the Bay Area.  He admitted that at least $1.7 million in proceeds from sales of his businesses was traceable to products he illegally smuggled into the United States.

A federal grand jury indicted Ho on March 14, 2019, charging him with seven counts of smuggling illegal headlights into United States, in violation of 18 U.S.C. § 545.  Under the plea agreement, Ho pleaded guilty to one count.  If Ho complies with the plea agreement, the remaining counts will be dismissed.  Also as part of the plea agreement, Ho agreed to forfeit at least $1.7 million in criminal proceeds and all of the property he had smuggled into the United States that failed to meet the safety standards of 49 CFR 571.108.

Defendant was released on a bond secured by real property.  Bail was set at $750,000.

Judge Tigar scheduled Ho’s sentencing for March 19, 2020.  The maximum statutory penalty for a violation of 18 U.S.C. § 545 is twenty 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. Attorney Thomas R. Green is prosecuting the case with the assistance of Noble Hughes and Kay Konopaske.  The prosecution is the result of an investigation by the Department of Homeland Security, Homeland Security Investigations.

SAN JOSE - Jonathan Chang, an elder at a South Bay church, was sentenced to 48 months in prison for stealing more than $7.5 million in donated funds intended for the church, announced United States Attorney David L. Anderson and Federal Bureau of Investigation and Special Agent in Charge Craig D. Fair.  The sentence was handed down by the Honorable Edward J. Davila, United States District Judge.

The sentence follows a guilty verdict after a five-week trial in United States District Court.  The evidence at trial demonstrated that Jonathan Chang, 64, of Cupertino, California, engaged in a scheme to defraud a wealthy donor of money intended to support the Home of Christ 4 Christian Church (HOC4), located in Saratoga, California.  Chang, who served as an elder responsible for managing the finances of the church, furthered his scheme by creating entities with names similar to the church.  He then directed more than $6.7 million from the donor to his own organizations rather than to the HOC4.  In addition, Chang embezzled more than $750,000 from HOC4-related bank accounts in his scheme to defraud.

The jury concluded that Chang solicited funds from the wealthy donor for the stated purpose of acquiring a new HOC4 church house and conducting missionary work.  In response to Chang’s requests, the donor provided $2.25 million in one-time donations, a $3 million loan to acquire the new building, and approximately $1.5 million total in monthly donations.

Chang did not use the funds as intended and directed by the donor.  Instead, he personally enriched himself with the money.  For example, Chang used the funds to make all-cash purchases of multiple houses for himself in the Bay Area, to purchase luxury vehicles, to obtain 15 timeshare interests, to invest in commercial real estate, and to pay for his health insurance and athletic club dues.  The evidence also showed that Chang purchased a home in Fremont with the donor’s funds and then leased the house to one of the donor’s companies, thereby personally collecting rent on a house purchased with stolen funds the donor earmarked for the church.  Similarly, Chang purchased another home with donor funds intended for religious purposes but ultimately rented the home to his son and collected the rent.  With an average annual salary reported as $65,000, Chang purchased millions of dollars in real property, owned a Mercedes, and lived a luxurious life.  In total, between 2004 and January 2016, Chang obtained more than $7.5 million in funds from the donor and HOC4.

The evidence at trial demonstrated that Chang created fraudulent entities to conceal the wire fraud scheme and forwarded the funds to a variety of bank accounts he controlled before spending the money on personal purchases and investments.  Documents submitted in connection with the sentencing established that Chang was able to buy three additional houses with over $1.6 million in a money laundering scheme that involved transferring funds back to the United States from overseas bank accounts.

When discussing the reasons for imposing the 48-month prison term, Judge Davila made clear that Chang’s decade long scheme was an “enormous betrayal” of his church and his community.

On February 4, 2016, a federal grand jury indicted Chang and his wife, Grace Chang, 60, charging each with one count of conspiracy to commit wire or mail fraud, in violation of 18 U.S.C. § 1349; four counts of wire fraud, in violation of 18 U.S.C. § 1343; one count of conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h); and three counts of money laundering, in violation of 21 U.S.C. § 1956(a).  The jury found Jonathan Chang guilty of all the wire fraud and money laundering counts.  The jury did not reach a verdict as to the two charged conspiracy counts, nor did the jury reach a verdict as to the counts filed against Grace Chang.

In addition to the prison term, Judge Davila also ordered Jonathan Chang to serve a three year term of supervised release to begin after the prison term.  He was also ordered Chang to pay $11,701,262 in restitution to his victims and to forfeit his interest in five real properties which will result in a forfeited amount of at least $8,841,749.

Assistant U.S. Attorneys Patrick R. Delahunty and Sarah E. Griswold are prosecuting the case with the assistance of Susan Kreider. Assistant U.S. Attorney David Countryman assisted in the forfeiture.  The prosecution is the result of an investigation by the FBI.

SAN FRANCISCO – Michael Livingston Henry was sentenced yesterday to 48 months in prison and ordered to pay restitution for stealing more than $800,000 from his former employer and her family’s charitable foundation, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge Craig D. Fair.  The sentence was handed down by United States District Judge Charles R. Breyer.  

Henry, 45, of Oakland, pleaded guilty on January 22, 2020.  According to the plea agreement, Henry worked from June 2006 to August 2018 as an assistant to a Marin-based philanthropist, assisting her with personal matters and administration of her family’s charitable foundation.  While employed there, Henry stole in excess of $800,000 by forging the philanthropist’s signature on hundreds of checks, many of which were made out to Henry personally or to his side business, Hella.  The philanthropist was seriously ill with cancer in 2016 and 2017 – a time when Henry continued to be entrusted with full access to financial and account records – and she discovered the embezzlement only after her recovery in 2018.

Henry was indicted by a federal grand jury on February 28, 2019.  The fourteen-count Indictment charged him with ten counts of bank fraud, in violation of 18 U.S.C. § 1344(2), and four counts of aggravated identity theft, in violation of 18 U.S.C. § 1028A.  Pursuant to the plea agreement, Henry pleaded guilty to two counts of bank fraud, and the government agreed to dismiss the remaining charges. 

United States District Court Judge Charles R. Breyer also sentenced the defendant to a five-year period of supervised release to begin at the completion of the prison term and ordered him to pay restitution to the charitable foundation and the philanthropist personally.  The defendant will begin serving his sentence on April 19, 2021.

Katherine L. Wawrzyniak is the Assistant U.S. Attorney prosecuting the case, with the assistance of Claudia Hyslop and Kimberly Richardson.  The prosecution is the result of an investigation by the Federal Bureau of Investigation.

Defendants allegedly used real and counterfeit mailbox keys to gain access to identification documents for fraudulent use.

SAN FRANCISCO - A federal grand jury in San Francisco has returned an indictment charging six individuals with numerous crimes associated with a long-running conspiracy to steal mail and commit fraud in connection with identification documents, announced United States Attorney David L. Anderson and United States Postal Inspection Service Inspector in Charge Rafael Nuñez.  The indictment was filed on November 17, 2020, and unsealed today. 

The six defendants are Mark Guardado, Jr., 38, of San Jose; Ashley Overton, 34, of Palo Alto; Juan Dagio, 40, of San Jose; Brian Clapp, 37, of San Jose; Andrew Perez, 30, of San Jose; and Jaime Valencia-Arias, 23, of San Jose.  According to the 18-count indictment, beginning no later than January of 2018, and continuing through August of 2019, the defendants conspired to steal mail and commit fraud in connection with hundreds of stolen or fraudulent identification documents.  Specifically, the indictment alleges that the defendants conspired to steal United States mail by using actual or counterfeit postal keys to gain access to cluster mailboxes in apartment buildings.  The defendant allegedly raided mailboxes throughout the South Bay, including in Sunnyvale, Palo Alto, Santa Clara, Redwood City, Menlo Park, and San Jose.  The indictment describes text messages exchanged between the defendants regarding the use of real or counterfeit postal keys—some of which Guardado is alleged to have discussed making himself—to go out on “missions,” meaning outings in which they stole mail in bulk from apartment buildings.  Defendants then obtained personal identifying information, such as names, addresses, telephone numbers, and dates of birth, from the stolen mail and other sources and used that information to create counterfeit California state driver’s licenses in the names of the victims of the stolen mail.  The counterfeit licenses had photographs depicting the defendants.  Using the counterfeit driver’s licenses, defendants activated and used stolen or fraudulent credit cards, negotiated checks, and used other stolen or fraudulently obtained access devices to obtain money and other things of value, including hotel rooms and cash advances at a casino.

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.  The indictment charges the defendants with the crimes and maximum statutory sentences as follows:

Count

Defendant

Charge

Statute

Maximum Sentence

One

Guardado

Overton

Dagio

Clapp

Perez

 

Conspiracy to Commit Mail Theft and to Commit Fraud in Connection with Identification Documents

18 U.S.C. § 371

5 years’ imprisonment; $250,000 fine

Two

Guardado

Fraud in Connection with Identification Documents – Production 

18 U.S.C. § 1028(a)(1)

15 years’ imprisonment; $250,000 fine  

Three

Guardado

Overton

Fraud in Connection with Identification Documents – Possession of Five or More

18 U.S.C. § 1028(a)(3)

5 years’ imprisonment; $250,000 fine

Four

Guardado

Fraud in Connection with Identification Documents – Document-Making Implements

18 U.S.C. § 1028(a)(5)

15 years’ imprisonment; $250,000 fine

Five

Guardado

Fraud in Connection with Identification Documents – Trafficking

18 U.S.C. § 1028(a)(8)

15 years’ imprisonment; $250,000 fine

Six

Guardado

Overton

Possession of 15 or More Unauthorized Access Devices

18 U.S.C. § 1029(a)(3)

10 years’ imprisonment; $250,000 fine

Seven

Dagio

Fraudulent Use of Unauthorized Access Devices

18 U.S.C. § 1029(a)(2)

10 years’ imprisonment; $250,000 fine

Eight

Guardado

Unlawful Possession of Postal Keys and Locks

18 U.S.C. § 1704

10 years’ imprisonment; $250,000 fine

Nine

Guardado

Valencia-Arias

Mail Theft

18 U.S.C. § 1708

5 years’ imprisonment; $250,000 fine

Ten

Guardado

Possession of Stolen Mail

18 U.S.C. § 1708

5 years’ imprisonment; $250,000 fine

Eleven

Overton

Possession of Stolen Mail

18 U.S.C. § 1708

5 years’ imprisonment; $250,000 fine

Twelve

Overton

Possession of Stolen Mail

18 U.S.C. § 1708

5 years’ imprisonment; $250,000 fine

Thirteen

Dagio

Possession of Stolen Mail

18 U.S.C. § 1708

5 years’ imprisonment; $250,000 fine

Fourteen

Overton

Aggravated Identity Theft 

18 U.S.C. § 1028(A)

2 years’ imprisonment consecutive to any other sentence; $250,000 fine 

Fifteen

Overton

Aggravated Identity Theft 

18 U.S.C. § 1028(A)

2 years’ imprisonment consecutive to any other sentence; $250,000 fine 

Sixteen

Guardado

Aggravated Identity Theft 

18 U.S.C. § 1028(A)

2 years’ imprisonment consecutive to any other sentence; $250,000 fine 

Seventeen 

Guardado

Aggravated Identity Theft

18 U.S.C. § 1028(A)

2 years’ imprisonment consecutive to any other sentence; $250,000 fine 

Eighteen

Dagio

Aggravated Identity Theft 

18 U.S.C. § 1028(A)

2 years’ imprisonment consecutive to any other sentence; $250,000 fine 

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. 

All the defendants are in either federal or state custody except Perez, who remains at large.  Guardado and Clapp made their initial federal court appearances this morning before U.S. Magistrate Judge Laurel Beeler.  Judge Beeler ordered that Guardado be detained pending a bail study and a further hearing for December 14, 2020.   Clapp was released on a $25,000 bond.  Valencia-Arias will make his initial appearance before U.S. Magistrate Judge Susan van Keulen on Thursday, December 10, 2020.  The defendants next scheduled appearance is at 10:30 a.m. on January 12, 2021, for a status hearing before the before the Honorable Vince Chhabria, U.S. District Judge.      

The prosecution is being handled by the Special Prosecutions Section of the United States Attorney’s Office.  The prosecution is the result of an investigation by the United States Postal Inspection Service.  

SAN JOSE – Sudhish Kasaba Ramesh was sentenced today to 24 months in prison and ordered to pay a $15,000 fine for intentionally accessing a protected computer without authorization and recklessly causing damage, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge Craig D. Fair.  The sentence was handed down by the Honorable Lucy H. Koh, U.S. District Judge.

Ramesh, 31, of San Jose, pleaded guilty on August 26, 2020, to one count of intentionally accessing a protected computer without authorization and recklessly causing damage to Cisco.  Ramesh worked for Cisco but resigned in approximately April 2018.  According to the plea agreement, Ramesh admitted to intentionally accessing the Cisco Systems cloud infrastructure that was hosted by Amazon Web Services without Cisco’s permission on September 24, 2018.  Ramesh further admitted that during his unauthorized access he deployed a code from his Google Cloud Project account that resulted in the deletion of 456 virtual machines for Cisco’s WebEx Teams application, which provides video meetings, video messaging, file sharing, and other collaboration tools.  He admitted that he acted recklessly in deploying the code and consciously disregarded the substantial risk that his conduct would harm Cisco.  As a result of Ramesh’s conduct, over 16,000 WebEx Teams accounts were shut down for up to two weeks and caused Cisco to spend approximately $1,400,000 in employee time to restore the damage to the application and refund over $1,000,000 to affected customers.  No customer data was compromised as a result of the defendant’s conduct.

Ramesh was charged by an information on July 13, 2020, with one count of  Intentionally Accessing a Protected Computer Without Authorization and Recklessly Causing Damage, in violation of 18 U.S.C. §§ 1030(a)(5)(B) and (c)(4)(A)(i)(I).

U.S. District Judge Koh sentenced Ramesh today, following his guilty plea on August 26, 2020, to one count of Intentionally Accessing a Protected Computer Without Authorization and Recklessly Causing Damage, in violation of 18 U.S.C. §§ 1030(a)(5)(B) and (c)(4)(A)(i)(I).  The defendant was further sentenced to serve a one year period of supervised release following the 24 months in prison and to pay a $15,000 fine.  The defendant is out of custody and will begin serving the sentence on February 10, 2021.

Susan Knight is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Elise Etter.  The prosecution is the result of an investigation by the Federal Bureau of Investigation.  Cisco Systems, Inc. fully cooperated with the U.S. Attorney’s Office and Federal Bureau of Investigation.

SAN FRANCISCO – Ismael Garcia, a/k/a “Playboy,” was sentenced to 15 years in prison for trafficking methamphetamine, dealing in firearms without a license, and being a felon in possession of firearms, announced United States Attorney David L. Anderson, Drug Enforcement Administration (DEA) Special Agent in Charge Daniel C. Comeaux, and Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) Special Agent in Charge Patrick Gorman. The sentence was handed down by the Honorable Richard Seeborg, U.S. District Judge.

Garcia, 35, of Redwood City, pleaded guilty to the charges on January 17, 2020.  According to his application to the court to plead guilty, Garcia admitted that between June and August of 2019 he was a member of a conspiracy to traffic methamphetamine.  Garcia’s participation in the conspiracy included arranging three one-pound methamphetamine transactions that took place on June 19, July 24, and August 20, 2019.  In each instance, Garcia worked with his co-conspirator to obtain the methamphetamine, which Garcia sold to an undercover law enforcement agent.

Garcia also admitted that on June 13, 2019, he sold a fully-automatic machine gun pistol and a 30-round magazine to the same undercover agent.  During additional transactions in June of 2019, Garcia sold the undercover agent more illegal guns.  At the time, Garcia was a convicted felon and did not have a license to sell firearms. 

A federal grand jury indicted Garcia on November 12, 2019, charging him with one count of conspiracy to distribute and possess with intent to distribute 500 grams and more of a mixture and substance containing a detectable amount of methamphetamine, in violation of 21 U.S.C. §§ 846, 841(a)(1) and (b)(1)(A)(viii); three counts distribution of fifty grams and more of a mixture and substance containing a detectable amount of methamphetamine, in violation of 21 U.S.C. §§ 841(a)(1) and (b)(1)(B)(viii); one count of dealing in firearms without a license, in violation of 18 U.S.C. § 922(a)(1)(A); one count of possession and transfer of a machine gun, in violation of 18 U.S.C. § 922(o); and one count of being a felon in possession of a firearm, in violation of 18 U.S.C. § 922(g)(1).  Garcia pleaded guilty to all  charges.

In addition to the prison term, Judge Seeborg also ordered the defendant to serve a five-year period of supervised release.  The defendant will begin serving the sentence immediately.

The case is being prosecuted by the Organized Crime Drug Enforcement Task Force (OCDETF) of the United States Attorney’s Office for the Northern District of California. The investigation of this case was conducted by the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the San Mateo County Sheriff’s Office Narcotics Task Force. 

This investigation and prosecution is part of 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.

SAN FRANCISCO – The United States Attorney’s Office charged Gage Pascoe with the distribution of pills containing fentanyl that resulted in the overdose death of his customer, announced United States Attorney David L. Anderson and Special Agent in Charge Daniel C. Comeaux, Drug Enforcement Administration (DEA).

The federal complaint alleges that Pascoe, 22, of Pittsburg, California, sold counterfeit pills that appeared to be Oxycodone but instead contained the lethal drug fentanyl.  The young adult customer purchased the pills from Pascoe and shortly after taking the apparent Oxycodone pills at a Walnut Creek home died from an overdose of fentanyl. 

“This sad, tragic death shows how easy it is to die from drugs bought from drug dealers,” said U.S. Attorney Anderson.  “Counterfeit pills marked and sold as one drug, such as Oxycodone pills with “M30” stamps, commonly contain fentanyl instead.  Even a tiny amount of fentanyl is deadly.  Drug buyers must be aware that pills bought from drug dealers may be laced with fentanyl.  Drug dealers should know we vigorously prosecute those who sell drugs that cause fentanyl overdoses.”        

“Fentanyl is cheap, man-made and potent. Overdose can occur in the smallest amount and in this case it left a family with unimaginable loss,” stated DEA Special Agent in Charge Daniel C. Comeaux. “We will pursue those who distribute this deadly drug and continue to seek justice for those lives that have been lost.”

The complaint charging Pascoe describes how he was a repeat dealer of illegal drugs to the victim.  The complaint outlines that Pascoe communicated in the days before the death through a series of text messages with the victim, who he knew from attending the same high school, to sell Oxycodone to the victim.  The texts, outlined in the complaint, show that Pascoe offered “more oxy” to his victim customer and they eventually met up in Pittsburg at night for Pascoe to sell the purported Oxycodone pills to the victim.  The next day, June 17, 2020, the victim was found dead at a Walnut Creek home.  The complaint describes how the victim’s father found pills in the victim’s room with “M30” stamped on them, which is a common stamp on counterfeit Oxycodone pills containing fentanyl.  A lab analysis found those pills to contain fentanyl.  As the complaint further describes, an analysis of the victim’s body showed the victim died from a fatal fentanyl overdose.

Pascoe was arrested on Saturday, December 5, 2020, and made an initial appearance today in San Francisco federal court before United States Magistrate Judge Laurel Beeler.  Pascoe is currently being held in custody pending further proceedings.  He is scheduled to appear for a detention hearing before United States Magistrate Laurel Beeler on December 14, 2020, at 10:30 am. 

The charges contained in the criminal complaint are mere allegations.  As in any criminal case, the defendant is presumed innocent unless and until proven guilty in a court of law.

Pascoe is charged with one count of distribution of fentanyl resulting in death or great physical injury, in violation of 21 U.S.C. § 841(a)(1) and (b)(1)(C).  If convicted of this count, he faces a maximum penalty of life in prison and a mandatory minimum of 20 years in prison, and a maximum fine of $1,000,000.  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.

The case is being prosecuted by the Organized Crime Drug Enforcement Task Force (OCDETF) of the United States Attorney’s Office for the Northern District of California. The investigation of this case was conducted by the Drug Enforcement Administration, the Concord Police Department, and the Walnut Creek Police Department. 

This investigation and prosecution is part of 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.

SAN FRANCISCO – Robert Kohlman and Gabriel Riddle have been charged in a criminal complaint with wire fraud in connection with a scheme to use dozens of fraudulently programmed credit and debit terminals to make unlawful transactions, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge Craig D. Fair. 

The criminal complaint, filed August 19, 2020, was accompanied by an affidavit filed by an FBI agent.  According to the affidavit, Kohlman, 38, and Riddle, 34, both of Novato, Calif., obtained more than 90 point-of-sale terminals, which are devices used by merchants to read and process credit or debit cards to accept payments for goods or services.  Kohlman and Riddle then programmed the terminals to believe they were associated with an actual merchant, and then submitted requests for refunds even though there was no initial purchase.  The merchant’s bank or processing company, believing a legitimate refund was being requested, then transmitted money to accounts controlled by Kohlman and Riddle.  Kohlman and Riddle then depleted the accounts by making purchases, making ATM cash withdrawals, or purchasing money orders.  The affidavit indicates that Kohlman and Riddle initiated at least 100 fraudulent refunds that transferred more than $400,000 to their personal bank accounts.

Kohlman and Riddle allegedly used this scheme to defraud numerous victims around the country, including a U.S. Army Hospital dining facility.  The affidavit describes transactions involving the dining facility at the Winn Army Community Hospital at Fort Stewart in Fort Stewart, Georgia, which is operated by the United States Army.  According to the affidavit, the dining facility was tricked into issuing a refund worth $7,925.03 on December 3, 2018, to a debit card controlled by Riddle and a second refund, on December 16, 2018, worth $9,989.39 to a debit card controlled by Kohlman. 

The defendants were charged with wire fraud, in violation of 18 U.S.C. § 1343.

The charges contained in the criminal complaint are mere allegations.  As in any criminal case, the defendant is presumed innocent unless and until proven guilty in a court of law.  The defendants face a maximum sentence of 20 years in prison, and a fine of $250,000, plus restitution if appropriate.  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.

Defendants were arrested on August 26, 2020 in Las Vegas, Nevada, and made their initial appearance in federal court there on August 27, 2020.  They made their initial appearance in San Francisco on November 27, 2020.  Defendants’ next scheduled appearance is on December 16, 2020 for a status conference before the Honorable Laurel Beeler, U.S. Magistrate Court Judge.

Assistant U.S. Attorneys Kevin Rubino and Ross Weingarten are prosecuting the case with the assistance of Morgan Byrne.  The prosecution is the result of an investigation by the FBI, along with the Army Criminal Investigation Command, Major Procurement Fraud Unit, and the Marin County Coordination of Probation Enforcement Team.  

SAN FRANCISCO – Marc Nunez made an initial appearance today in federal court on a criminal complaint for possession of child pornography, announced David L. Anderson and Homeland Security Investigations (HSI) Special Agent in Charge Tatum King.  Nunez made his initial appearance before U.S. Magistrate Judge Laurel Beeler.

According to the complaint filed December 1, 2020, and unsealed today, on August 27, 2019, agents from HSI served a federal search warrant at a residence in San Francisco and seized, among other things, a cell phone containing communications between the person whose residence was being searched and Nunez.  As the investigation proceeded, federal agents uncovered additional evidence that Nunez was a substitute teacher, after school helper, and kindergarten assistant at a private elementary school for boys in San Francisco.  In addition, federal investigators discovered Nunez corresponded with several individuals with whom he traded sexually explicit files of children.  The complaint further describes cell phone messages and Skype messages in which Nunez received and discussed pornographic images of minors. Nunez believed that at least one of the persons with whom he was corresponding was a minor.

Nunez is charged with possession of child pornography, in violation of 18 U.S.C. §§ 2252(a)(4)(B) and (b)(2).

The charges contained in the criminal complaint are mere allegations.  As in any criminal case, the defendant is presumed innocent unless and until proven guilty in a court of law. 

If convicted of the charge, Nunez faces a maximum statutory sentence of 10 years in prison, 3 years’ supervised release, and a $250,000 fine.

Magistrate Judge Laurel Beeler ordered Nunez released on a $50,000.  Nunez’s next court appearance is scheduled for December 15, 2020, before Judge Beeler, for a bond hearing.

Assistant U.S. Attorney Ankur Shingal is prosecuting the case with the assistance of Alexa Leisure.  The prosecution is the result of an investigation by the HSI with assistance from the San Francisco Police Department, the office of the Contra Costa District Attorney, and the United States Secret Service.  

SAN FRANCISCO – Ergonomic office furniture maker Workrite Ergonomics LLC, a Delaware company, and its parent, Knape & Vogt Manufacturing Co. (collectively, Workrite), have agreed to pay $7.1 million to resolve allegations under the False Claims Act that they overcharged the federal government for office furniture under General Services Administration (GSA) contracts, the Department of Justice announced today.

“Companies that do business with the United States are expected to charge the government appropriately for their services,” said Acting Assistant Attorney General Jeffrey Bossert Clark of the Department of Justice’s Civil Division.  “We will continue to protect the American taxpayers and hold accountable those who misuse federal funds.”

“Federal contractors must be honest and forthcoming,” said U.S. Attorney David L. Anderson of the Northern District of California.  “Contractors that overcharge the American taxpayer will be held accountable.”

“American taxpayers deserve fair prices and accurate information from GSA contractors,” said GSA Inspector General Carol Fortine Ochoa.  “I appreciate the hard work and dedication that led to this significant recovery.”

“The settlement is a positive outcome that holds Workrite accountable for its questionable business practices,” said Special Agent in Charge Bryan D. Denny, Defense Criminal Investigative Service (DCIS), Western Field Office.  “This is but one example of the law enforcement and oversight communities’ on-going, joint efforts to be good stewards of American taxpayer dollars.”

This settlement relates to a contract under which Workrite provided office furniture to government entities from 2009 to 2017 through GSA’s Multiple Award Schedule (MAS) program.  The MAS program provides the government with a streamlined process to procure commonly used commercial goods and services.  The settlement resolves allegations that Workrite did not fulfill its contractual obligations to provide GSA with accurate information about its commercial sales practices during contract negotiations, and did not subsequently extend lower prices to government customers as required by the GSA contract’s price reduction clause.

The allegations were originally made in a lawsuit filed under the whistleblower provisions of the False Claims Act by Michael J. Franchek, of Park City, Utah, a former Workrite sales manager.  The Act permits private parties to sue for false claims on behalf of the United States and to share in any recovery.  Franchek will receive approximately $1.27 million from the settlement proceeds.

The settlement with Workrite was the result of a coordinated effort among the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Northern District of California, the GSA’s Office of the Inspector General, the Department of State’s Office of Inspector General, the DCIS, the Defense Contract Audit Agency, and the U.S. Department of Veterans Affairs’ Office of Inspector General.

The lawsuit is captioned United States ex rel. Franchek v. Workrite Ergonomics, LLC, No. 16-cv-02789 (N.D. Cal.).  The claims resolved by the settlement are allegations only and there has been no determination of liability.

SAN FRANCISCO – Robert Jesus Blancas, a/k/a “Orgotloth” a/k/a “MuskOx,” made his initial appearance today after being charged in a federal criminal complaint alleging the enticement of a minor to engage in sexual activity, that is, the production of child pornography, announced U.S. Attorney David L. Anderson and FBI Special Agent in Charge Craig D. Fair. 

According to the criminal complaint, Blancas, 33, a transient resident of the Bay Area, was identified as a member of an anti-government citizen militia group associated with the so-called “boogaloo” movement.  A search of his electronic devices revealed not only evidence of his association with this group and communications related to acts of violence against law enforcement, but also evidence of his activities related to child pornography. 

The criminal complaint alleges that in or about May 2020, Blancas met a 15-year-old minor female on an online forum.  Through at least August 2020, Blancas exchanged thousands of text messages over multiple online and text message platforms with the minor victim, instructing her to send him pornographic photographs and videos of herself. 

The criminal complaint further alleges that photographs and videos of the minor victim sent to Blancas depict a young girl and the bedroom of a young girl.  The criminal complaint also describes examples of Blancas’s prior conversations of a sexually explicit nature with additional users who identified their ages to him as 13, 15, and 16.

Blancas is charged with the enticement of a minor to engage in sexual activity in violation of 18 U.S.C. § 2422(b).  If convicted, Blancas faces a minimum penalty of 10 years to a maximum of lifetime in prison, a minimum of 5 years to a maximum of lifetime of supervised release, and a maximum of a $250,000 fine.  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.

A complaint merely alleges that a crime has been committed, and the defendant is presumed innocent unless proven guilty beyond a reasonable doubt in a court of law. 

Blancas was arrested on December 1, 2020, and made his initial appearance in federal court earlier today before U.S. Magistrate Judge Laurel Beeler.  Blancas is currently held in custody pending further proceedings.  His next federal court appearance is scheduled for a detention hearing on December 8, 2020, before U.S. Magistrate Judge Laurel Beeler.

The prosecution is being handled by the Special Prosecutions Section of the U.S. Attorney’s Office for the Northern District of California.  The prosecution is the result of an investigation by the Federal Bureau of Investigation. 
 

SAN FRANCISCO – Harlan Kelly, the General Manager of the San Francisco Public Utilities Commission (SF PUC), has been charged in a federal criminal complaint with honest services wire fraud, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge Craig D. Fair. 

The complaint alleges that Kelly, 58, of San Francisco, engaged in a long-running bribery scheme and corrupt partnership with Walter Wong, a San Francisco construction company executive and permit expediting consultant who ran or controlled multiple entities doing business with the City of San Francisco.  The complaint alleges that as part of the scheme, Wong provided items of value to Kelly in exchange for official acts by Kelly that benefited or attempted to benefit Wong’s business ventures.  

“Public officials owe their honest services to the people of San Francisco,” said U.S. Attorney Anderson.  “Bribery scams undermine our faith in City government.  Our investigation into City Hall corruption will continue.”         

“The allegations against Harlan Kelly and the nine other individuals charged in this case are extremely troubling. The citizens of San Francisco deserve nothing less than transparency, honesty, and integrity from their city officials.  However, through the course of this ongoing investigation, the FBI has uncovered a pattern of criminal activity committed by those in positions of trust,” said FBI Special Agent in Charge Craig D. Fair. “The FBI is surging our resources in this investigation, and we urge anyone with information on this matter, or any other suspected public corruption, to come forward and contact the FBI.”

The complaint alleges that Kelly, appointed in 2012 to be the SF PUC’s General Manager by Mayor Ed Lee, developed an extensive relationship with Wong that involved coded text messages, multiple international trips paid for or subsidized by Wong, cash exchanges, free meals, and even personal car service provided by Wong or by Wong’s employees to Kelly.  One example in the complaint alleges that Wong paid travel and expenses for Kelly and his family during a March 2016 vacation that the Kelly family took to Hong Kong and China.  The complaint alleges Wong paid for hotel expenses and incidentals such as meal and jewelry purchases.  The complaint also alleges that Kelly’s airfare was purchased with a credit card to create a record of the expense, but the airfare was later reimbursed by Wong with cash deposited into Kelly’s bank account.  The complaint further alleges that Kelly acknowledged the gifts he received from Wong in China using an encrypted messaging application, writing to Wong: “Thank you for the best family vacation ever! A little something for everyone!”

The complaint further alleges that during this same time Wong was seeking a multi-million dollar contract from the SF PUC for Green Source Trading, LLC, a company Wong ran through his son, to convert thousands of San Francisco city streetlights to smart LED technology.  Shortly after the bidding for that contract ended, the complaint alleges Wong performed extensive repair work on Kelly’s personal residence, provided to Kelly at a substantial discount.

As part of Wong’s agreement with the government, he pleaded guilty to conspiracies to commit honest services fraud and money laundering and is now providing information to the government.  According to the complaint, Wong provided evidence that he gave these benefits to Kelly because of Kelly’s position at the PUC, and Wong expected that Kelly would in return use his official position to benefit Wong’s business ventures, including helping Wong’s attempts to win business from the PUC to convert streetlights to LED.  The complaint alleges Kelly and Wong repeatedly communicated about the project before it was bid, and during the bid process Kelly provided Wong with confidential non-public information, including documents containing inside information that were hand-delivered to Wong.  Kelly engineered at least one delay in the process, the complaint alleges, to benefit Wong.  These acts gave Wong an unfair competitive advantage in the bid process, though in the end Wong withdrew his bid due to multiple contract changes.    

The charges contained in the criminal complaint are mere allegations.  As in any criminal case, the defendant is presumed innocent unless and until proven guilty in a court of law.

Kelly is charged with one count of honest services wire fraud, in violation of 18 U.S.C. §§ 1343 and 1346.  If convicted of this count, he faces a maximum penalty of 20 years in prison and a fine of $250,000, or not more than the greater of twice the gross gain or twice the gross loss. 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.

Kelly is out of custody and is expected to make his initial appearance in federal court in San Francisco on December 8, 2020, before U.S. Magistrate Judge Laurel Beeler.  

The case is being prosecuted by the Corporate Fraud Strike Force of the U.S. Attorney’s Office.  The case is being investigated by the FBI and IRS Criminal Investigation.

 

SAN FRANCISCO – Andrew Chapin has been charged in a criminal complaint with multiple counts of fraud in connection with a multi-million-dollar scheme to amass funds for a digital advertising company based on false information, announced U.S. Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge Craig Fair.

Chapin, 32, of San Francisco, was the co-founder and Chief Executive Officer of Benja, a digital advertising company. Benja created “shoppable media”, placing digital ads on websites that allowed a shopper to purchase products in the ad itself without being redirected to another website. Benja claimed to help well-known companies sell overstock inventory through these ad placements. According to the criminal complaint unsealed today, since July of 2019, Chapin engaged in a number of ploys to lure potential investors to provide over a million dollars worth of capital to Benja on the basis of false information and to obtain fraudulent bank loans. Chapin portrayed Benja as a successful company to investors and creditors, claiming Benja generated $6.2 million in revenue in 2018 and $13.2 million in revenue in 2019. The complaint charges Chapin with bank fraud, wire fraud, and securities fraud.

“We cannot allow tech financing to become a lemon’s market,” said U.S. Attorney Anderson.  “Silicon Valley needs capital, and investors need facts not fiction.  We will prosecute lies, omissions and frauds.  Investors must have confidence in the truthfulness of startup representations.”

“This morning, the FBI arrested Mr. Chapin for allegedly running an elaborate, multimillion-dollar scheme to mislead investors and creditors,” said Special Agent in Charge Fair.  “FBI San Francisco, along with our partners at the SEC and the U.S. Attorney’s Office, actively investigates these types of financial crimes to ensure that corporate fraud is uncovered, disrupted, and punished under the federal legal system.”

With respect to the bank fraud charge, the complaint alleges Chapin made false statements to a bank to secure a line of credit that grew from $1 million to $5 million. The line of credit was primarily secured by Benja’s account receivables. The account receivables and financial statements Chapin provided to the bank were misstated and false and a majority of the purported revenue was fabricated. Bank records from 2018 to 2020 indicate that Benja was generating almost no revenue from its purported ad placement business and almost all the customers Chapin claimed Benja had were lies. For example, Chapin falsely claimed to have revenue from Nike, Patagonia, and other well-known companies when, in truth, Benja had no relationship with those companies. Chapin used almost the full $5 million line of credit to pay off other creditors and investors, to pay Chapin’s credit cards and personal expenses, and to send funds to a personal crypto-currency exchange account.

With respect to wire fraud, the complaint alleges Chapin used an elaborate ruse to convince a venture capital firm in New York to provide Benja $1 million in funding.  Chapin presented the same false account receivables and financial statements to the venture capital firm, and fabricated millions in revenue/account receivables from well-known companies with which Benja never did business.  Chapin also had individuals pose as employees from the well-known companies in order to provide false references about Benja to investors.

With respect to securities fraud, the complaint describes how in December of 2018, Chapin allegedly convinced an investor to purchase $100,000 worth of securities in Benja by representing, among other things, that a venture capitalist would soon be making a $1.5 million investment in the company.  When the investor asked to communicate with the venture capitalist directly, Chapin allegedly created a bogus email address and provided it to the investor.  The investor emailed who he believed was the venture capitalist a series of questions about the shareholder’s agreement and the phony email account responded to the questions. After receiving satisfactory answers, the investor purchased the securities.

In sum, Chapin is charged with bank fraud, in violation of 18 U.S.C. § 1344; wire fraud, in violation of 18 U.S.C. § 1343; and securities fraud, in violation of 15 U.S.C. §§ 78j(b) and 78ff and 17 C.F.R. § 240.10b-5.

A complaint merely alleges that crimes have been committed, and Chapin is presumed innocent until proven guilty beyond a reasonable doubt.  If convicted of bank fraud under 18 U.S.C. § 1344, Chapin faces a maximum sentence of 30 years’ imprisonment, a fine of $1,000,000, and restitution, if appropriate.  If convicted of wire fraud under 18 U.S.C. § 1343, Chapin faces a maximum sentence of 20 years’ imprisonment, a fine of $250,000, and restitution, if appropriate.  If convicted of securities fraud under 15 U.S.C. § 78j(b) and 78ff, and 17 C.F.R. § 240.10b-5, Chapin faces a maximum sentence of 20 years’ imprisonment, a fine of $5,000,000, and restitution, if appropriate.  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.

Chapin is scheduled to make his initial federal court appearance on November 24, 2020, before U.S. Magistrate Judge Jacqueline S. Corley. 

The case is being prosecuted by the Corporate Fraud Strike Force of the U.S. Attorney’s Office.  The prosecution is the result of an investigation by the Federal Bureau of Investigation.  The United States Attorney’s Office and the Federal Bureau of Investigation also thank the San Francisco Regional Office of the Securities and Exchange Commission, which conducted a parallel investigation that was also announced today.

SAN FRANCISCO - Paul Fredrick Giusti, the former Group Government & Community Relations Manager for Recology’s San Francisco Group, has been charged in a federal criminal complaint with bribery and money laundering, announced United States Attorney David L. Anderson, IRS Criminal Investigation Special Agent in Charge Kareem Carter, and Federal Bureau of Investigation Special Agent in Charge Craig D. Fair.

The complaint alleges that Giusti, 64, of San Francisco, engaged in a long-term scheme to defraud the public of its rights to honest services and laundered money in the process.  The complaint alleges that Giusti was a central actor in Recology providing Mohammed Nuru, then San Francisco’s Director of Public Works, with a continuous stream of money and benefits, ultimately worth over $1 million, to influence Nuru to act in Recology’s favor.  According to the complaint, among other payments, Giusti agreed to give $20,000 to Nuru to secure his support for Recology’s efforts to implement a price increase on the “tipping fees” it charged the City to dump materials at a Recology facility.  As part of the scheme, Giusti concealed the bribe as a “holiday donation” from Recology to the Lefty O’Doul’s Foundation for Kids, a non-profit organization for underprivileged children in San Francisco.  Nick Bovis, the head of the Foundation, used the money to pay for an annual holiday party organized by Nuru for select DPW employees and other invited guests.  The payment was one of several over the years intended to influence Nuru with respect to official actions important to Recology.  

“Today's complaint alleges that Paul Giusti bribed Mohammed Nuru with more than $1 million of party funds and other benefits,” said U.S. Attorney David L. Anderson.  “These bribes were laundered through non-profit organizations to disguise their source and to create the false appearance of a legitimate charitable intent.  In return for these bribes, Nuru helped Recology obtain garbage fee increases approved by the City but paid by an unsuspecting public.  As our investigation continues, each charge sheds new light on the ways and means of City Hall corruption.”

“Following the money is key in a case like this,” said Kareem Carter, Special Agent in Charge IRS Criminal Investigation. “The defendant used non-profit organizations to layer complex financial transactions in an attempt to conceal the payments to a city official.  IRS CI will continue to work with our law enforcement partners to ensure that any individual or company involved in this scheme shall be held accountable for their actions and not go unpunished.”

“The FBI takes seriously any actions of individuals who seek to improperly influence public officials at the expense of the rate-paying public, and will hold accountable those who attempt to gain an unfair advantage in the public contracting process,” said Craig D. Fair, FBI Special Agent in Charge.      

According to the complaint, Giusti disguised several Recology payments as charitable donations.  Part of the alleged scheme involved Giusti arranging for Recology to “donate” to the Lefty O’Doul’s Foundation for Kids from 2016 to 2019, money which was used at Nuru’s direction to pay for DPW holiday parties.  Another part of the scheme involved Giusti, also at Nuru’s direction, arranging for Recology to provide approximately $1 million in regular payments over several years to a local non-profit organization.  This non-profit immediately funneled the payments to a second non-profit organization, and those funds were then controlled and used by Nuru.  In yet another part of the scheme, Giusti arranged a job for Nuru’s son at Recology and, once that benefit was discovered, terminated him and promptly secured for him a Recology-funded internship at yet another non-profit, paid for by a grant for a summer youth internship program.  Finally, the complaint alleges Giusti arranged for Recology to secretly pay for the funeral of a DPW employee by having a non-profit pay the mortuary bill and creating a fake donation invoice.  The complaint outlines that Giusti timed several “donations” and other benefits to coordinate with key decision points in Recology’s requests for assistance and approvals from DPW, particularly Recology’s successful 2017 application to increase rates to San Francisco residents for garbage service. 

The charges contained in the criminal complaint are mere allegations.  As in any criminal case, the defendant is presumed innocent unless and until proven guilty in a court of law.

Giusti is charged with one count of bribery, in violation of 18 U.S.C. § 666(a)(2), and one count of laundering the proceeds of honest services fraud, in violation of 18 U.S.C. § 1956(a)(1)(B)(i).  If convicted of bribery, he faces a maximum penalty of 10 years in prison and a fine of $250,000.  If convicted of concealment money laundering, he faces a maximum penalty of 20 years in prison, a fine of $500,000 or twice the value of the property involved in the transaction, or both.  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.

Giusti is expected to be scheduled to make his initial appearance in federal court in San Francisco on November 23, 2020 before U.S. Magistrate Judge Jacqueline Scott Corley.            

The case is being prosecuted by the Corporate Fraud Strike Force of the U.S. Attorney’s Office.  The case is being investigated by IRS Criminal Investigation and the FBI.
 

OAKLAND – Kevin Fuqua was sentenced to 120 months in prison after pleading guilty to sex trafficking of children, announced United States Attorney David L. Anderson and Homeland Security Investigations (NorCal) Special Agent in Charge Tatum King.  The sentence was handed down by the Honorable James Donato, U.S. District Judge.

In pleading guilty, Fuqua, 33, of Oakland, admitted that between August 8, 2018, and January 1, 2019, he caused a minor to engage in sex in exchange for money. 

“No girl’s teenage years should be spent on the streets of Oakland turning tricks to satisfy her pimp,” said U.S. Attorney Anderson. “Fuqua’s case demonstrates how important it is for us all to be on the lookout for child sex trafficking.  Sadly, this case demonstrates that there will always be those in our community who will take advantage of minors to profit from the commercial sex trade.”

“Human trafficking, especially of minors, is a reprehensible crime and the facts of this case are truly alarming,” said Special Agent in Charge King. “Homeland Security Investigations and our dedicated law enforcement partners, including the Alameda County Sheriff’s Office, will never stop our determined pursuit of anyone who thinks they can abuse and force a child into prostitution here in America or in any corner of the world. Justice was brought to bear through the vigorous prosecution by the U.S. Attorney’s Northern District of California Office, which led to this important sentencing. Now the victim can begin the process of recovery.”

Fuqua admitted that he prostituted the minor victim by driving her to an area in Oakland known for prostitution and dropping her off.  Fuqua then monitored the minor’s location by requiring her to share cell phone location data with him. Fuqua admitted that he required the minor victim to earn $500 a night before allowing her to come in. Fuqua admitted that he knew that the victim was under 18 at the time. The government submitted documents in connection with Fuqua’s sentencing that described how Fuqua and his minor victim exchanged text messages describing his physical abuse of her.  For example, the messages describe how Fuqua justified hitting and choking her to demonstrate he had control of her.            

Fuqua was charged by Information on August 27, 2020, with one count of sex trafficking of children, in violation of 18 U.S.C. §§ 1591(a)(1) and (b)(2).  Fuqua pleaded guilty to the charge. 

At the time of the offense, Fuqua was on supervised release for a 2014 conviction for illegally possessing a firearm in violation of 18 U.S.C. § 922(g)(1). 

In addition to the prison term, Judge Donato also ordered Fuqua to a 5-year term of supervised release. A hearing to determine the amount of restitution owed to the minor victim is set for February 17, 2020.

Assistant U.S. Attorney Maya Karwande is prosecuting the case with the assistance of Ralph Banchstubbs.  The prosecution is the result of an investigation by the HSI and the Alameda County Sheriff’s Office. 

SAN JOSE – Johnny Magdaleno, a/k/a “Soldier Boy,” was sentenced today to 30 years in prison for his federal RICO conspiracy conviction, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge Craig D. Fair.  Magdaleno was a high-ranking Norteño gang member who orchestrated and participated in multiple attempted murders in the Monterey County Jail. 

Magdaleno, 33, of Salinas, pleaded guilty on February 13, 2020, to a RICO conspiracy charge and admitted in his plea agreement to being a member of the Nuestra Familia/Salinas Norteños, known legally as an enterprise.  The enterprise consisted of members and associates of the Nuestra Familia prison gang as well as Norteño street gangs in Salinas and the surrounding areas.  Norteño gang members pledge their allegiance and loyalty to Nuestra Familia and are instructed on its rules, rituals, and obligations.  Members agree to commit crimes such as murder, narcotics trafficking, and other acts of violence as a pattern of their racketeering activity.

Gang rules and discipline are maintained by threatening and assaulting those individuals who violate the rules or pose a threat to the organization.  Inside prisons and local jails, all members and associates of Nuestra Familia and the Norteños work together to maintain the structure and follow the rules of the enterprise.

In his plea agreement, Magdaleno admitted that while in jail he conspired with enterprise members to commit murder by approving “removals” of inmates as a means of enforcing the gang’s most important rules.  The term “removal” refers to a weapons-based assault designed to remove (from both the custodial housing unit and the gang itself) a member of the gang who committed a serious violation of the gang’s rules.  A removal is accomplished by having one or more “hitters” stab the victim and then having at least two “bombers” assault the target by punching and kicking the victim.  The purpose of the subsequent bombers’ beating is to inflict maximum injury on the victim while giving time to the hitters to wash blood off of themselves and to get rid of the weapons.
 
Magdaleno admitted that during the RICO conspiracy period he was a high-ranking member of the Norteños group called La Casa.  In that role, he had the power, authority, and responsibility to authorize removals in the Monterey County Jail.  Magdaleno admitted that while in custody at the Monterey County jail he committed the following removals:

o On December 2, 2012, Magdaleno orchestrated and directly participated in the removal of an inmate referred to as Victim-1 by stabbing Victim-1 in the chest and back over 20 times.  Immediately thereafter two bombers punched and kicked the victim to inflict maximum damage and to allow Magdaleno to escape from being caught with the stabbing weapon by guards. 

o On February 25, 2013, Magdaleno orchestrated and directly participated in the removal of Victim-2 by first giving marijuana to the victim so that he would let his guard down and then stabbing the victim in the head with a shank made from an electrical outlet plate sharpened into a stabbing instrument.  Three bombers then punched and kicked the victim to allow Magdaleno to take the shank away. Magdaleno disposed of the shank and returned to join the bombers in beating Victim-2. 

o On April 29, 2013, Magdaleno orchestrated the removal of Victim-3 by falsely assuring him that he would not be harmed if he returned to his housing pod and by directing others also to assure the victim of his safety.  During the ensuing removal, Victim-3 was stabbed in the head several times by a hitter using a metal shank and punched and kicked by bombers to allow the hitter to dispose of the shank.    

o On November 13, 2013, Magdaleno orchestrated the removal of Victim-6 that resulted in the hitter stabbing Victim-6 in the head, torso, and arms approximately ten times and two bombers setting upon the victim, punching and kicking him. 

o On April 14, 2014, Magdaleno orchestrated and directly participated in the removal of Victim-7 in the Monterey County Jail Main Yard by stabbing the inmate in the head and thereafter joining two bombers in punching and kicking the victim.

Magdaleno further admitted to overseeing and actively participating in a narcotics distribution conspiracy within Monterey County Jail.

Magdaleno and 14 other Norteño gang members were indicted by a federal grand jury on September 27, 2018.  They were charged with one count of a RICO racketeering conspiracy, in violation of 18 U.S.C. § 1962(d); one count of conspiracy to commit attempted murder in aid of racketeering, in violation of 18 U.S.C. § 1959(a)(5); and one count of conspiracy to commit assault with a dangerous weapon in aid of racketeering, in violation of 18 U.S.C. § 1959(a)(6).  In addition, some of the defendants, but not Magdaleno, were charged with attempted murder in aid of racketeering, in violation of 18 U.S.C. § 1959(a)(5) and assault with a dangerous weapon, in violation of 18 U.S.C. § 1959(a)(3). 

To date, 11 of the charged defendants have pleaded guilty and nine have been sentenced, while four defendants remain scheduled for a trial set to commence on August 30, 2021.  Each of the 11 defendants listed below pleaded guilty to a RICO conspiracy, and their status is as follows:

Defendant

Date of Sentencing

Sentence

JOHNNY MAGDALENO, a/k/a “Soldier Boy”

November 10, 2020

30 years in prison

RODNEY LUIS ROMERO,

a/k/a “Speedy”

November 17, 2020

TBD – pending sentencing

RAMON MONTOYA, a/k/a “Ray Ray”

October 27, 2020

10 years in prison

MICHAEL JAMES RICE,

a/k/a “Redwood”

March 3, 2020

156 months in prison

ALEJO ALEX ALEGRE, IV,

a/k/a “Chino”

October 13, 2020

10 years in prison

CARLOS CERVANTES, a/k/a “Lil Huero”

September 22, 2020

10 years in prison

ALBERTO MORENO,

a/k/a “Doughboy”

January 7, 2020

7 years in prison

STEVEN ANTHONY DORADO,

a/k/a “Castro”

July 14, 2020

7 years in prison

JEFFREY LOPEZ,

a/k/a “T-Bone”

May 11, 2020

7 years in prison

JUAN ALVAREZ,

a/k/a “Chucky”

January 5, 2021

TBD – pending sentencing

ERIK LOPEZ,

a/k/a “Bimbo”

August 18, 2020

10 years in prison

The sentence for Magdaleno was handed down today by The Honorable Beth Labson Freeman, U.S. District Court Judge, following a guilty plea on one count of engaging in a racketeering conspiracy, in violation of 18 U.S.C. § 1962(d).   Judge Freeman also sentenced the defendant to a five year period of supervised release following release from prison.

Assistant U.S. Attorneys Claudia Quiroz and Stephen Meyer are prosecuting the case.  The prosecution is the result of an investigation by the FBI with assistance from the Salinas Police Department, the Monterey County Sheriff’s Office, the California Highway Patrol, and the California Department of Corrections and Rehabilitation. 

SAN FRANCISCO – James Calvert was sentenced today to 12 years in prison followed by a lifetime of supervised release for distribution and receipt of child pornography, announced United States Attorney David L. Anderson and FBI Special Agent in Charge Craig D. Fair.  The sentence was handed down by the Honorable Susan Illston, U.S. District Judge. 

Calvert, 27, of San Bruno, California, pleaded guilty to the charges on August 14, 2020.  According to the plea agreement, Calvert admitted that in May of 2019, he posted a video that depicted a prepubescent minor female performing oral sex on an adult male and a video of a prepubescent minor being raped by an adult male in the “Babyprn” group chat-room of Kik, an instant messaging application used on mobile telephones. 

Calvert also admitted in the plea agreement that in December 2019, he encouraged a fifteen-year-old female victim to perform a sex act on camera and to send him a video of her performing that sex act to his Kik account.  Calvert admitted that he knew the victim was a minor when he encouraged her to send him the video.  The government pointed out in additional filed papers that Calvert engaged in the December 2019 conduct after he had been charged with the May 2019 offense and had been released under supervision. 

Calvert was arraigned on August 13, 2020, on a Superseding Information charging him with one count of distribution of child pornography, in violation of 18 U.S.C. §§ 2252(a)(2) and (b)(2), and one count of receipt of child pornography, in violation of 18 U.S.C. §§ 2252(a)(2) and (b)(2). 

In addition to the 12 year prison term, Judge Illston ordered Calvert to serve a lifetime term of supervised release, to begin after the prison term ends.  The defendant, who has been in custody since February of 2020, is presently serving his sentence. 

Ajay Krishnamurthy and Barbara J. Valliere are the Assistant U.S. Attorneys who prosecuted the case with the assistance of Margoth Turcios.  The prosecution is the result of an investigation by the Federal Bureau of Investigation and the Pottawatomie County Sheriff’s Office in Oklahoma.

SAN FRANCISCO - The United States filed a civil complaint today to forfeit thousands of Bitcoins, valued at over $1 billion dollars, seized by law enforcement on November 3, 2020, announced United States Attorney David L. Anderson of the Northern District of California and Special Agent in Charge of the Washington DC Field Office, Internal Revenue Service Criminal Investigation (IRS-CI) Kelly R. Jackson. The seizure represents the largest seizure of cryptocurrency in the history of the Department of Justice.

“Silk Road was the most notorious online criminal marketplace of its day,” said U.S. Attorney Anderson.  “The successful prosecution of Silk Road’s founder in 2015 left open a billion-dollar question.  Where did the money go?  Today’s forfeiture complaint answers this open question at least in part.  $1 billion of these criminal proceeds are now in the United States’ possession.”         

“Criminal proceeds should not remain in the hands of the thieves.  Through CI’s expertise in following the money, we were able to track down the illicit funds,” said IRS-CI Special Agent in Charge Kelly R. Jackson.  “The Washington DC Cyber Crimes Unit is uniquely specialized in tracing virtual currency transactions and we will continue to hone our skills to combat illegal activity.”

According to the allegations of the civil forfeiture complaint, from 2011 until October 2013 when it was seized by law enforcement, Silk Road was the most sophisticated and extensive criminal marketplace on the Internet.  It served a sprawling black market bazaar where unlawful goods and services were bought and sold regularly by the site’s users. The complaint alleges that while in operation, Silk Road was used by thousands of drug dealers and other unlawful vendors to distribute hundreds of kilograms of illegal drugs as well as other unlawful goods and services to well over 100,000 buyers, and to launder hundreds of millions of dollars derived from these unlawful transactions.  At the time it was taken down in 2013, Silk Road had nearly 13,000 listings for controlled substances and many more listings offering illegal services, such as computer hacking and murder for hire, which generated sales revenue totaling over 9.5 million Bitcoins and commissions from these sales totaling over 600,000 Bitcoins.  The complaint further alleges that Silk Road used a so-called “tumbler” to process Bitcoin transactions in a manner designed to frustrate the tracking of individual transactions through the cryptocurrency Blockchain. 

The Silk Road creator Ross Ulbricht, following his arrest in San Francisco, was convicted in 2015 by a New York federal jury of seven criminal counts, including conspiracy to distribute narcotics and money laundering. 

The complaint further alleges that in 2020 agents of the IRS CI used a third party bitcoin attribution company to analyze bitcoin transactions executed by Silk Road and were able to identify 54 previously undetected bitcoin transactions executed by Silk Road, all of which appear to represent bitcoin, which was the proceeds of unlawful activity, that was stolen from Silk Road in or about 2012 and 2013.

The complaint alleges that these funds were traced to a bitcoin address.  Further investigation of that bitcoin address by the United States Attorney’s Office and IRS CI agents revealed that the funds were connected to Individual X.  It was further determined that Individual X had hacked the funds from Silk Road.  Pursuant to that investigation of the hack, law enforcement seized several thousand Bitcoins on November 3, 2020.  On November 4, 2020, the seized Bitcoin had a value of over $1 billion.   

The civil complaint merely alleges that certain property is subject to forfeiture.  The United States must prove, by a standard of preponderance of the evidence, that the items are subject to forfeiture.  If the United States prevails, the court will order all interests of any potential claimant forfeited.

Assistant U.S. Attorneys Claudia Quiroz, William Frentzen, David Countryman, and Chris Kaltsas of the Northern District of California are prosecuting the forfeiture with the assistance of Carolyn Jusay.  The forfeiture action is the result of an investigation by IRS – Criminal Investigation Cyber Crimes Unit with assistance from Chainalysis and Excygent.

SAN FRANCISCO – Lawrence J. Gerrans, former chief executive officer of a San Rafael-based medical device company, was sentenced to 135 months in prison for wire fraud, money laundering, and related charges announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge Craig D. Fair.  The sentence was handed down by the Honorable Edward M. Chen, U.S. District Judge.

The sentence follows a guilty verdict after a two-week trial in January 2020.  Evidence at trial showed that Gerrans, 50, of San Anselmo, Calif., was the president and chief executive officer of San Rafael-based medical device company Sanovas.  From January 12, 2015, through March 16, 2015, Gerrans employed a number of fraudulent methods to siphon funds out of Sanovas.  For example, Gerrans systematically transferred more than $2.6 million from Sanovas to himself and two shell companies he controlled, Halo Management Group and Hartford Legend Capital Enterprises, and then used the money to make an all-cash purchase of a luxury home in San Anselmo.  The home was purchased for more than $2.5, at least $2.3 million of which was laundered through Hartford Legend before being paid to the escrow account for the purchase. 

Evidence at trial also showed that Gerrans made false statements to a newly-created board of directors to seek their approval for a lucrative compensation plan and for reimbursement of retirement account funds that Gerrans had liquidated in 2013 and 2014.  Evidence at trial showed that Gerrans had used the retirement account funds for personal expenditures, including a Maserati, a diamond ring, and rent on his personal residence, but he told the board of directors he had used the retirement account funds to benefit Sanovas.  In another part of the scheme to defraud, evidence also showed that in 2017 Gerrans used a Sanovas corporate credit card for lavish personal expenditures, including a $44,000 vacation timeshare, $12,500 for high-end carpets for his home, and $32,000 to pay the property taxes on his personal residence. 

Evidence at trial further showed that Gerrans provided false documents to the FBI during the criminal investigation, and that after he was first charged in the case he violated a court-ordered bond condition, attempted to tamper with a witness, and obstructed justice.

A federal grand jury indicted Gerrans on August 27, 2019, by a second superseding indictment, charging him with five counts of wire fraud, in violation of 18 U.S.C. § 1343; one count of engaging in monetary transactions in criminally derived property, in violation of 18 U.S.C. § 1957; three counts of making false statements to a government agency, in violation of 18 U.S.C. § 1001(3); one count of contempt of court, in violation of 18 U.S.C. § 401(3); one count of witness tampering, in violation of 18 U.S.C. § 1512(b)(1); and one count of obstruction of justice, in violation of 18 U.S.C. § 1503.  The jury convicted Gerrans on all counts. 

In addition to the prison term, Judge Chen also ordered Gerrans to serve a three-year term of supervised release to begin after the prison term. 

Assistant U.S. Attorneys Robin Harris and Lloyd Farnham are prosecuting the case with the assistance of Patricia Mahoney and Kimberly Richardson.  The prosecution is the result of an investigation by the Federal Bureau of Investigation.   

The United States has seized 27 domain names that Iran’s Islamic Revolutionary Guard Corps (IRGC) unlawfully used to further a global covert influence campaign.

As described in the seizure documents, all 27 domains were being used in violation of U.S. sanctions targeting both the Government of Iran and the IRGC. Four of the domains purported to be genuine news outlets but were actually controlled by the IRGC and targeted audiences in the United States, to covertly influence United States policy and public opinion, in violation of the Foreign Agents Registration Act (FARA). The remainder targeted audiences in other parts of the world.  This seizure warrant follows an earlier seizure of 92 domains used by the IRGC for similar purposes.

“Within the last month we have announced seizures of Iran’s weapons, fuel, and covert influence infrastructure,” said John C. Demers, Assistant Attorney General for National Security.  “As long as Iran’s leaders are trying to destabilize the world through the state-sponsorship of terrorism and the taking of hostages, we will continue to enforce U.S. sanctions and take other legal steps to counter them.”

“Today's 29 seizures are another important step against Iran's worldwide disinformation campaign,” said U.S. Attorney Anderson.  “This work will continue.  We cannot allow Iran's attachment to fake news to overtake our commitment to the rule of law.”

“The FBI is aggressively investigating any evidence of foreign influence and the unlawful spread of disinformation by hostile nations.  Today, we seized 27 additional domains that Iran’s IRGC was illegally using in attempt to manipulate public opinion in other countries, including the United States,” said FBI Special Agent in Charge Craig D. Fair.  “Thanks to our ongoing collaboration with Google, Facebook, and Twitter, the FBI was able to disrupt this Iranian propaganda campaign and we will continue to pursue any attempts by foreign actors to spread disinformation in our country.” 

The seizure warrant, issued on Nov. 3, 2020, describes how the 27 seized domain names were being operated in violation of federal law.  Control of the domains by the IRGC violated the International Emergency and Economic Powers Act (IEEPA) and the Iranian Transactions and Sanctions Regulations (ITSR), which prohibit U.S. persons from providing services to the Government of Iran without a license.  Further, the United States has found that the IRGC has provided material support to a number of terrorist groups, including Hizballah, Hamas, and the Taliban.  As such, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) added the IRGC to its list of Specially Designated Nationals, imposing additional licensing requirements.  As described in the seizure documents, the 27 domains were registered with U.S.-based domain registrars and used top-level domains owned by U.S.-based registries.  Neither the IRGC nor the Government of Iran obtained a license from OFAC prior to using the domain names and obtaining services from the U.S. providers. 

In addition, four of the 27 domain names, “rpfront.com,” “ahtribune.com,” “awdnews.com,” and “criticalstudies.org,” were also seized pursuant to FARA.  FARA establishes a registration, reporting, and disclosure regime for agents of foreign principals (including foreign governments and their agencies) so that the U.S. government and the people of the United States are informed of the source of information and the identity of persons attempting to influence U.S. public opinion, policy, and law. 

FARA requires, among other things, that persons subject to its requirements submit periodic registration statements containing truthful information about their activities and the income earned from them.  Disclosure of the required information allows the federal government and the American people to evaluate the statements and activities of such persons in light of their function as foreign agents.  Here, the four domains purported to be independent news outlets, but they were actually operated by or on behalf of the IRGC to target the United States with pro-Iranian propaganda in an attempt to covertly influence the American people to change United States policy concerning Iran and the Middle East. 

These domains targeted a United States audience without proper registration pursuant to FARA and without notifying the American public with a conspicuous label that the content of the domains was being published on behalf of foreign principals, the IRGC and the Government of Iran.

Visitors to the sites received the following message:

This seizure was investigated by the Federal Bureau of Investigation.

The Special Prosecutions Section and Asset Forfeiture Unit of the United States Attorney’s Office for the Northern District of California, and the Counterespionage Section of the Department of Justice’s National Security Division, are prosecuting the seizure. 

SAN FRANCISCO – The United States has seized 27 domain names that Iran’s Islamic Revolutionary Guard Corps (IRGC) unlawfully used to further a global covert influence campaign.

As described in the seizure documents, all 27 domains were being used in violation of U.S. sanctions targeting both the Government of Iran and the IRGC. Four of the domains purported to be genuine news outlets but were actually controlled by the IRGC and targeted audiences in the United States, to covertly influence United States policy and public opinion, in violation of the Foreign Agents Registration Act (FARA). The remainder targeted audiences in other parts of the world.  This seizure warrant follows an earlier seizure of 92 domains used by the IRGC for similar purposes.

“Today's 27 seizures are another important step against Iran's worldwide disinformation campaign,” said U.S. Attorney Anderson.  “This work will continue.  We cannot allow Iran's attachment to fake news to overtake our commitment to the rule of law.”

“Within the last month we have announced seizures of Iran’s weapons, fuel, and covert influence infrastructure,” said John C. Demers, Assistant Attorney General for National Security.  “As long as Iran’s leaders are trying to destabilize the world through the state-sponsorship of terrorism and the taking of hostages, we will continue to enforce U.S. sanctions and take other legal steps to counter them.” 

 “The FBI is aggressively investigating any evidence of foreign influence and the unlawful spread of disinformation by hostile nations.  Today, we seized 27 additional domains that Iran’s IRGC was illegally using in attempt to manipulate public opinion in other countries, including the United States,” said FBI Special Agent in Charge Craig D. Fair.  “Thanks to our ongoing collaboration with Google, Facebook, and Twitter, the FBI was able to disrupt this Iranian propaganda campaign and we will continue to pursue any attempts by foreign actors to spread disinformation in our country.”

The seizure warrant, issued on Nov. 3, 2020, describes how the 27 seized domain names were being operated in violation of federal law.  Control of the domains by the IRGC violated the International Emergency and Economic Powers Act (IEEPA) and the Iranian Transactions and Sanctions Regulations (ITSR), which prohibit U.S. persons from providing services to the Government of Iran without a license.  Further, the United States has found that the IRGC has provided material support to a number of terrorist groups, including Hizballah, Hamas, and the Taliban.  As such, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) added the IRGC to its list of Specially Designated Nationals, imposing additional licensing requirements.  As described in the seizure documents, the 27 domains were registered with U.S.-based domain registrars and used top-level domains owned by U.S.-based registries.  Neither the IRGC nor the Government of Iran obtained a license from OFAC prior to using the domain names and obtaining services from the U.S. providers. 

In addition, four of the 27 domain names, “rpfront.com,” “ahtribune.com,” “awdnews.com,” and “criticalstudies.org,” were also seized pursuant to FARA.  FARA establishes a registration, reporting, and disclosure regime for agents of foreign principals (including foreign governments and their agencies) so that the U.S. government and the people of the United States are informed of the source of information and the identity of persons attempting to influence U.S. public opinion, policy, and law. 

FARA requires, among other things, that persons subject to its requirements submit periodic registration statements containing truthful information about their activities and the income earned from them.  Disclosure of the required information allows the federal government and the American people to evaluate the statements and activities of such persons in light of their function as foreign agents.  Here, the four domains purported to be independent news outlets, but they were actually operated by or on behalf of the IRGC to target the United States with pro-Iranian propaganda in an attempt to covertly influence the American people to change United States policy concerning Iran and the Middle East. 

These domains targeted a United States audience without proper registration pursuant to FARA and without notifying the American public with a conspicuous label that the content of the domains was being published on behalf of foreign principals, the IRGC and the Government of Iran.

Visitors to the sites received the following message:

 
This seizure was investigated by the Federal Bureau of Investigation.

The Special Prosecutions Section and Asset Forfeiture Unit of the United States Attorney’s Office for the Northern District of California, and the Counterespionage Section of the Department of Justice’s National Security Division, are prosecuting the seizure. 

SAN JOSE – Annie Corbett has been charged in a criminal complaint with wire fraud in connection with a scheme to defraud local county governments of funds entrusted to her for the benefit of foster children, announced U.S. Attorney David L. Anderson; FBI Special Agent in Charge Craig Fair; Special Agent in Charge of the Internal Revenue Service, Criminal Investigation (IRS-CI), Kareem Carter; and U.S. Department Health and Human Services – Office of Inspector General (HHS-OIG) Special Agent in Charge Steven J. Ryan.

According to the complaint, Corbett, 53, of Redwood City, Calif., owned and operated Corbett Group Homes, Inc. (CGH), a company with the stated mission to provide residential care for children and adolescents.  According to the complaint, CGH received funds from local county governments, including Santa Clara County, for the benefit of foster children.  The complaint explains that from 2011 through 2018, CGH operated three group homes and received funds from local county governments under a federal program entitled Title IV-E, Aid to Families with Dependent Children- Foster Care. 

Under the program, the local county governments provided the funds to CGH that received the funds on behalf of minors residing in the group homes.  The complaint alleges that Corbett used wire transfers to convert funds intended for foster children and to use the money for her personal enrichment, including credit card payments, personal expenses, and personal retail business payments.  Corbett is charged with wire fraud, in violation of 18 U.S.C. § 1343.

The charges contained in the criminal complaint are mere allegations.  As in any criminal case, the defendant is presumed innocent unless and until proven guilty in a court of law.  If convicted of the charge, Corbett faces a maximum statutory sentence of 20 years imprisonment, a three-year term of supervised release, and a $1,000,000 fine.

Corbett is scheduled to make her initial federal court appearance on November 19, 2020, before U.S. Magistrate Judge Virginia K. DeMarchi. 

Assistant U.S. Attorney Chinhayi Cadet is prosecuting the case with the assistance of Jessica Leung.  The prosecution is the result of an investigation by the FBI, IRS-CI, and HHS-OIG with assistance from the office of Santa Clara County District Attorney Jeffrey F. Rosen.

SAN JOSE – Rufino Costales Jr. made his initial appearance today after being charged in a criminal complaint alleging he possessed an unregistered firearm silencer, announced United States Attorney David L. Anderson and Bureau of Alcohol, Tobacco, Firearms, and Explosives Special Agent in Charge Patrick Gorman. 

An affidavit filed by an agent of the Bureau of Alcohol, Tobacco, Firearms, and Explosives in connection with the criminal complaint alleges that Costales, 45, of Salinas, claimed to own firearms and to manufacture firearm silencers, also known as sound suppressors.  The complaint further alleges Costales made a series of threats to the safety of law enforcement officers and other people.  Costales threatened to use self-manufactured weapons, including an explosive device. 

Law enforcement officers discovered the silencer in a storage unit rented to Costales.   The silencer bore no manufacturer mark nor any serial number and was not registered as required by law. 

Costales was arrested on October 30, 2020, and had his initial appearance in federal court in San Jose this morning.  His next scheduled appearance is at 10:30 a.m. on Thursday, November 5, 2020, for a detention hearing before U.S. Magistrate Judge Virginia K. DeMarchi.

Costales is charged with possession of an unregistered firearm silencer, in violation of 26 U.S.C. § 5861(d).  If convicted of the offense charged in the complaint, he faces a maximum sentence of 10 years and a fine of $250,000.  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. 

The charges contained in the criminal complaint are mere allegations.  As in any criminal case, the defendants are presumed innocent unless and until proven guilty in a court of law.

Assistant U.S. Attorney Patrick R. Delahunty is prosecuting the case with the assistance of Susan Kreider.  The prosecution is the result of an investigation by Bureau of Alcohol, Tobacco, Firearms, and Explosives.

OAKLAND – Dayna Lynn Alexander, also known as Dayna Lyn Huntsman, and Alicia Amanda Roberts, also known as Alicia Roberts Canal, have been charged in a criminal complaint with an alleged conspiracy to commit mail fraud, announced United States Attorney David L. Anderson and United States Postal Inspection Service San Francisco Division Inspector in Charge Rafael Nunez. Alexander made her initial federal court appearance today before U.S. Magistrate Judge Nathanael M. Cousins.

According to the affidavit filed with the criminal complaint, Alexander, 47, of Vallejo and San Pablo, reviewed obituaries in order to identify individuals who had recently suffered “sudden deaths.”  Alexander would then find their personal identifying information from online sources and use that information to place holds on their U.S. Postal Service mail and to change their mailing addresses.  Alexander would cause checks and debit cards to be mailed from the victims’ accounts, and she would obtain them from the victims’ new mailing address.  Alexander also opened bank accounts using the victims’ information.  She and her co-conspirators would deposit funds into these accounts and write checks to themselves from the accounts.  Alexander would then assume yet another victim’s identity in order to obtain and spend those funds. 

Alexander and her co-conspirators, including Roberts, 41, of San Pablo, would also use the victims’ legitimate credit cards and other online payment accounts, including PayPal, to make purchases at Amazon and other vendors.  Roberts assumed one victim’s identity in order to rent storage units in which Alexander and Roberts stored stolen access devices and counterfeit identification cards as well as stolen mail and financial documents in the names of the victims.

While incarcerated in county facilities, Alexander continued to identify potential victims and relayed that information to Roberts.  Alexander discussed using the deceased victims as potential sureties for bail bonds in order to secure her release from custody.  Alexander also drafted a handwritten guide to educate others on how to commit the fraud scheme, which she mailed to a co-conspirator.

Alexander and Roberts are charged with conspiracy to commit mail fraud, in violation of 18 U.S.C. § 1349.  If convicted, they will face a maximum statutory sentence of 20 years.  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.

Alexander is scheduled to appear before Magistrate Judge Virginia K. DeMarchi on November 5, 2020, at 10:30 a.m., for a detention hearing.

Alicia Amanda Roberts, who is also known as Alicia Roberts Canal, has not been arrested nor made an initial appearance.  Anyone with information regarding her location is encouraged to contact the U.S. Postal Inspection Service.

The charges contained in the criminal complaint are mere allegations.  As in any criminal case, the defendants are presumed innocent unless and until proven guilty in a court of law.

Assistant U.S. Attorney Samantha Bennett is prosecuting the case with the assistance of Jessica Rodriguez Gonzalez.  The prosecution is the result of an investigation by the U.S. Postal Inspection Service, the U.S. Postal Service Office of Inspector General, and the Danville Police Department.