Northern District of California
Press releases recorded for this federal judicial district.
Hayward Resident Sentenced to Four Years for Acting as an Agent of the People’s Republic of ChinaRead the Press Release
SAN FRANCISCO – Xuehua (Edward) Peng a/k/a Edward Peng was sentenced today to 48 months in prison and ordered to pay a $30,000 fine for acting as an agent of the People’s Republic of China’s Ministry of State Security (MSS) in connection with a scheme to conduct pickups known as “dead drops” and transport Secure Digital (SD) cards from a source in the United States to the MSS operatives in China, announced United States Attorney David L. Anderson, Assistant Attorney General for National Security John C. Demers, and Federal Bureau of Investigation San Francisco Division Special Agent in Charge John F. Bennett. The sentence was handed down by the Honorable Haywood S. Gilliam, Jr., U.S. District Judge.
Peng pleaded guilty to the charge on November 25, 2019. According to his plea agreement, Peng, a 56 year-old U.S. citizen living in Hayward, Calif., acted at the direction and under the control of MSS officials in China in retrieving information passed to him and leaving money behind for the source. Peng admitted that in March of 2015, an official from the People’s Republic of China (PRC) introduced himself to Peng while Peng was on a business trip to China. The official asked Peng to use his citizenship in the United States to assist the official with matters of interest to the PRC. Peng eventually came to understand that the official was employed as an intelligence or security services officer of the PRC, specifically of the Ministry of State Security (“MSS”), and nevertheless agreed to perform activities in the United States on behalf of the PRC. Peng’s plea acknowledged that he knew he was acting on behalf of the government of the PRC.
“Today Xuehua Peng suffers the consequences of acting in the United States at the direction of a foreign government,” said U.S. Attorney Anderson. “This day of reckoning comes from Peng’s decision to execute dead drops, deliver payments, and personally carry to Beijing, China, secure digital cards containing classified information related to the national security of the United States. Peng will now spend years in prison for compromising the security of the United States.”
“This case exposed one of the ways that Chinese intelligence officers work to collect classified information from the United States without having to step foot in this country. Peng acted as an agent of the Chinese Ministry of State Security in the United States, conducting numerous dead drops here on their behalf and delivering classified information to them in China. He pled guilty and is now being held accountable for his criminal actions and his betrayal of his oath of citizenship,” said Assistant Attorney General Demers. “This case is but one example of the Chinese government’s multi-faceted espionage efforts and it both illustrates our determination to thwart those efforts and serves as a warning to other potential co-optees that we will find you and ensure you are punished.”
"This sentence serves as a powerful deterrent to both Communist China, who will continue to attempt to recruit others to act on its behalf, and those who attempt to carry out such tasks at the direction of its intelligence services” said Special Agent in Charge Bennett. “These actions are illegal and inexcusable. By working jointly with our partners, we will never stop our fight against hostile intelligence services and our determination to protect the national security of the United States should never be in doubt.”
Peng admitted that in March of 2015, he received instructions regarding how to use dead drops to exchange money for items to deliver to the PRC. Peng admitted that the official directed him to locate and reserve hotel rooms where he was to leave money and then depart for several hours. Peng was instructed to return later and retrieve small electronic storage devices that would be left for him. Thereafter, he was to fly to the PRC and deliver the retrieved devices to the PRC official. Peng never met nor interacted with the individual who left the devices for him and was instructed not to access the information was stored on the SD cards.
According to his plea agreement, Peng participated in five dead drops involving drop-offs of cash and/or pick-ups of SD cards, after a practice run in June 2015. After he participated in two dead drops in the San Francisco Bay Area between October 2015 and April 2016, Peng began making dead drops in Columbus, Georgia. After three dead drops in Georgia, Peng informed the PRC official that he wanted to resume dead drops in the San Francisco Bay Area. Peng did not complete a seventh dead drop before his arrest by federal authorities in September 2019. The dead drops described in Peng’s plea agreement are as follows:
Dates
Action
June 2015
A PRC official directs Peng to perform a dead drop at a hotel in Newark, Calif. Peng describes this first dead drop as “practice.” The PRC official instructs Peng to retrieve a package left for him at the front desk of the hotel by an individual that Peng had not met.
October 2015
A PRC official calls Peng and directs him to participate in another dead drop at the same hotel in Newark. On October 24, 2015, Peng goes to the hotel receptionist and retrieves a package that was left for him there. The package contains a secure digital (SD) memory card. The next day, October 25, 2015, Peng drives to the San Francisco International Airport and flies directly to Beijing, PRC. In Beijing, Peng meets with agents of the MSS, including the PRC official with whom Peng had been communicating, and delivers the SD card to MSS.
April 2016
A PRC official uses coded language to tell Peng that another dead drop will occur on April 23, 2016. The official directes Peng to book a hotel room where he will conduct the exchange. The PRC official directed Peng to leave $20,000 cash in the hotel room and that Peng be will be reimbursed for the payment. The PRC official instructs Peng to return to the PRC on April 24, and to fly directly to Beijing, Shanghai, or Guangdong. Peng is informed that the PRC official with whom he is communicating would meet Peng when he landed. Peng complied with the instructions. On April 23, 2016, Peng drives to an Oakland hotel, reserves a room, and leaves a key to the room at the front desk. Peng leaves $20,000 concealed on the underside of a dresser in the room. Hours later, Peng returns, observes that the money had been retrieved and determines that a cigarette pack with an SD card inside of it has been left for him in place of the money. Peng travels on a direct flight from San Francisco to Beijing the next day where he meets with agents of the MSS, including the PRC official.
Late 2016 to January 2017
Peng travels to Columbus, Georgia and selects a hotel for future dead drops. Peng flies to PRC to report to MSS officers the new location.
June 30, 2017 to July 1, 2017
Peng leaves $20,000 taped to the underside of a dresser in the hotel room and leaves a key to his room at the front desk. Returning to the hotel approximately 90 minutes later, Peng checks to ensure the money was taken, checks out of the hotel, and returns to his home in Hayward.
August 23, 2017 to September 10, 2017
The PRC official calls Peng on August 23, 2017. The official instructs Peng in coded language to conduct a dead drop on September 9, 2017, at the Columbus hotel. This dead drop entailed Peng leaving $10,000 in exchange for an SD card. Peng transfers money from an account he controls in PRC to an individual who provides Peng with $10,000 in cash. Peng travels to Columbus on September 8, 2017, and on the next day puts $10,000 cash in an envelope and tapes it to the underside of a dresser in the hotel room. Peng leaves the room and leaves a key at the front desk. When he returns approximately three hours later, Peng confirms that the cash had been retrieved and an SD card has been left in its place. Peng returns home and on September 10, 2017, flies from San Jose International Airport on a nonstop flight to Beijing. Peng meets with agents of the MSS, including the PRC official, and provides them with the SD card.
June 20, 2018 to July 2, 2018
June 20, 2018, a PRC official calls Peng with instructions regarding a third dead drop in Georgia. The official uses coded language to instruct Peng to leave $20,000 on June 30, 2018, and retrieve an SD card. Peng travels to the same Columbus hotel on June 29, 2018, and the next day tapes $20,000 to a dresser drawer in the hotel room. Peng leaves a key at the front desk, returns three hours later, and finds an SD card where he had left the money. Peng returns home and, on July 2, 2018, flies from San Francisco International Airport to Beijing to meet with agents of the MSS, including the PRC official, to whom he delivers the SD card.
August 2019 to September 27, 2019
Peng reserves a room at the same hotel in Newark, Calif., that he had used for the two dead drops in 2015. Peng prepares to leave funds and collect an SD card, however, he is later informed by the PRC official that the dead drop would be delayed. Peng is arrested at his residence in Hayward on September 27, 2019, before the seventh dead drop is completed.
Peng also admitted that the PRC official paid him at least $30,000 for the acts he performed as a courier for the MSS.
Federal law requires people acting within the United States on behalf of a foreign government to file with the Attorney General a notice and documentation of their activities. Peng acknowledged that he never filed with the Attorney General of the United States any notice or documentation of his actions as an agent of the People’s Republic of China or the Ministry of State Security.
Peng was charged by Information with one count of acting as an agent of a foreign government without notice to the Attorney General, in violation of 18 U.S.C. § 951. He pleaded guilty to the charge. Peng has been in custody since his arrest on September 27, 2019, and will begin serving his prison term immediately.
This case is being prosecuted by the Special Prosecutions Section of the United States Attorney’s Office for the Northern District of California and the Counterintelligence and Export Control Section of the Department of Justice, National Security Division. The prosecution is the result of an investigation by the Federal Bureau of Investigation and Internal Revenue Service-Criminal Investigation.
San Francisco Acupuncturist Sentenced to 12 Months in Prison for Health Care FraudRead the Press Release
SAN FRANCISCO – Haichao Huang was sentenced to 12 months in prison for committing health care fraud and making false statements relating to health care matters, announced United States Attorney David L. Anderson, Office of Personnel Management Office of the Inspector General Deputy Assistant Inspector General for Investigations Thomas W. South, and U.S. Department of Labor Office of Inspector General Special Agent-in-Charge Quentin Heiden. The Honorable Susan Illston, United States District Judge, handed down the sentence.
Huang, 46, of San Francisco, Calif., pleaded guilty on December 6, 2019, to health care fraud and making false statement relating to health care matters.
According to the plea agreement, Huang was a health care provider who offered acupuncture, physical therapy, massage, and other services to patients in and around San Francisco, Calif. Beginning no later than February 2013 and continuing through at least June 2018, Huang knowingly and willfully executed a scheme to defraud healthcare benefit programs. Huang submitted and caused to be submitted false claims for reimbursement from health care benefit programs that he knew were not properly payable, including from programs provided through federal government and labor union healthcare plans. Huang included false and inaccurate billing codes that artificially inflated both the type of service the patient received and the time he spent with the patient. The plea agreement gives examples of the ways in which Huang submitted false and inaccurate billings for reimbursement. Huang submitted requests for reimbursement for acupuncture treatment when, in fact, the patient had received much shorter periods of treatment, no acupuncture treatment, or no care of any kind at all. Huang also submitted claims for services rendered on days when patients had not been seen by him at all—including days when Huang was not in California. Further, after a patient reached the limit of acupuncture sessions allowed by the relevant insurance program or plan, Huang falsely and inaccurately billed for other types of treatments and services that were not provided, or billed under a patient’s family member’s health plan who never received treatment through his practice, in order to continue receiving improper reimbursements.
In addition to the prison term, Judge Illston ordered Huang to serve two years of supervised release to begin after his prison term has concluded and to pay restitution of $807,785.38 and a $10,000 fine.
Huang had been released on a $100,000 bond, which remains in place until he surrenders to begin serving his prison term on or before May 29, 2020.
Assistant U.S. Attorneys Lina Peng and Ross Weingarten prosecuted the case with the assistance of Marina Ponomarchuk and Morgan Bryne. This prosecution is the result of investigations by the Office of Personnel Management Office of Inspector General and the Department of Labor Office of Inspector General, with assistance from the San Mateo County District Attorney’s Office-Bureau of Investigation.
17 Alleged Members and Associates of MS-13 in San Francisco Charged Federally with Racketeering Conspiracy, Attempted Murder, Assault, and Weapons ChargesRead the Press Release
SAN FRANCISCO- A federal grand jury indicted 17 Bay Area residents for a broad range of racketeering crimes including RICO conspiracy, attempted murder, and assault, announced United States Attorney David L. Anderson and Homeland Security Investigations (HSI) Special Agent in Charge Tatum King. The Superseding Indictment handed down February 18, 2020 and unsealed today catalogues a litany of crimes allegedly perpetrated in and around the Mission District of San Francisco.
“San Francisco continues to suffer from gang violence and gang claims on our public spaces,” said U.S. Attorney Anderson. “I am grateful to the men and women of Homeland Security Investigations and the San Francisco Police Department for their professionalism and teamwork. San Francisco is safer when we all work together. We will oppose gang activity with professional law enforcement and vigorous prosecutions.”
“MS-13 gang members prey upon the communities they live in, committing the most heinous violent acts against their victims. The streets of San Francisco and the surrounding communities are safer when criminal gang members are held to account for their crimes,” said Special Agent In Charge King. “I’m proud of our agents’ exhaustive investigative work, together with the San Francisco Police Department and the U.S. Attorney’s Office, in bringing these subjects to justice. We also appreciate the law enforcement assistance with yesterday’s successful criminal arrests provided by the South San Francisco Police Department, the Mountain View Police Department and the San Mateo County Gang Intelligence Unit.”
According to the superseding indictment, the defendants were members of the transnational criminal organization MS-13. MS-13 operates in El Salvador, Honduras, Guatemala, Mexico, and at least 20 states in the United States. The superseding indictment describes how the 20th Street clique of MS-13 relies on crime to operate, including to avoid detection by law enforcement, to initiate new recruits, to enhance the reputation of the gang and individual gang members, to maintain control of drug distribution channels, and to intimidate people who might testify against or otherwise defy the gang.
In this case, the superseding indictment alleges 14 of the defendants conspired to engage in racketeering for the purpose of preserving the power, territory, reputation, and profits of the local MS-13 clique, known as MS-13 20th Street. The superseding indictment describes how MS-13 20th Street members bear tattoos, wear certain colors, and display gang signs to demonstrate allegiance to the clique. Also described in the superseding indictment is how the gang seeks to maintain control of drug “turf” by relying on robbery, extortion, and other violent crimes, including stabbings and shootings.
Listed in the superseding indictment are dates on which particular defendants allegedly committed crimes to further the purposes of the gang. For example, the superseding indictment alleges that, on September 16, 2016, defendants Alexis Cruz Zepeda, a/k/a Zorro, and Kevin Reyes Melendez, a/k/a Neutron, fired shots at a suspected gang rival. Cruz Zepeda and Reyes Melendez then fled the scene in a vehicle allegedly driven by Ronaldy Dominguez, a/k/a “Smokey,” who, after a high-speed chase, evaded police by driving the wrong way down the Vermont Street off ramp of Highway 101. The victim suffered five gunshot entry and exit wounds but survived. Similarly, the superseding indictment alleges that, on November 26, 2017, when MS-13 gang members attempted to extort cash and drugs from street dealers, defendant Elmer Rodriguez, a/k/a Gordo, shot a victim in the chest at close range with a 12-gauge shotgun. Documents filed by the government in the case include a memorandum arguing that the violent nature of the alleged crimes should be considered when the court makes decisions regarding pre-trial detention. The government’s filings include surveillance footage allegedly depicting an attack described in paragraph 26 of the superseding indictment. The video of the incident can be viewed at the following link: https://youtu.be/waUtxpqZEGM.
In all, the superseding indictment charges 10 crimes of violence allegedly perpetrated by the defendants. The charges pending against each defendant are as follows:
Defendant
Age
Charges
Maximum Statutory Penalty
ROGELIO BELLOSO ALEMAN
a/k/a “Smiley”
26
Racketeering Conspiracy
18 U.S.C. § 1962(d)
20 years in prison
Fine of $250,000
Assault with a Dangerous Weapon in Aid of Racketeering
18 U.S.C. §§ 1959(a)(3) and 2
20 years in prison
Fine of $250,000
EDWIN ALVARADO AMAYA
a/k/a “Muerte”
22
Racketeering Conspiracy
18 U.S.C. § 1962(d)
Life in prison
Fine of $250,000
Attempted Murder in Aid of Racketeering
18 U.S.C. §§ 1959(a)(5) and 2
10 years in prison
Fine of $250,000
FERNANDO ROMERO BONILLA
a/k/a “Black”
22
Racketeering Conspiracy
18 U.S.C. § 1962(d)
20 years in prison
Fine of $250,000
Assault with a Dangerous Weapon in Aid of Racketeering
18 U.S.C. §§ 1959(a)(3) and 2
20 years in prison
Fine of $250,000
KENNETH CAMPOS,
a/k/a “Nesio”
30
Racketeering Conspiracy
18 U.S.C. § 1962(d)
20 years in prison
Fine of $250,000
Assault with a Dangerous Weapon in Aid of Racketeering (two counts)
18 U.S.C. §§ 1959(a)(3) and 2
20 years in prison
Fine of $250,000
EVERT
GALDAMEZ
CISNEROS
a/k/a “Talentoso”
22
Racketeering Conspiracy
18 U.S.C. § 1962(d)
20 years in prison
Fine of $250,000
Assault with a Dangerous Weapon in Aid of Racketeering
18 U.S.C. §§ 1959(a)(3) and 2
20 years in prison
Fine of $250,000
LUIS VELIS DIAZ
a/k/a “Popa”
21
Racketeering Conspiracy
18 U.S.C. § 1962(d)
20 years in prison
Fine of $250,000
Assault with a Dangerous Weapon in Aid of Racketeering
18 U.S.C. §§ 1959(a)(3) and 2
20 years in prison
Fine of $250,000
RONALDY DOMINGUEZ,
a/k/a “Smokey”
24
Racketeering Conspiracy
18 U.S.C. § 1962(d)
Life in prison
Fine of $250,000
Attempted Murder in Aid of Racketeering
18 U.S.C. § 1959(a)(5) and 2
10 years in prison
Fine of $250,000
Assault with a Dangerous Weapon in Aid of Racketeering (two counts)
18 U.S.C. §§ 1959(a)(3) and 2
20 years in prison
Fine of $250,000
OSCAR ESPINAL
a/k/a “Chuy”
29
Racketeering Conspiracy
18 U.S.C. § 1962(d)
Life in prison
Fine of $250,000
Attempted Murder in Aid of Racketeering
18 U.S.C. §§ 1959(a)(5) and 2
10 years in prison
Fine of $250,000
WILFREDO IRAHETA LANDAVERDE
a/k/a “Wally”
20
Racketeering Conspiracy
18 U.S.C. § 1962(d)
20 years in prison
Fine of $250,000
KEVIN REYES MELENDEZ
a/k/a “Neutron”
26
Racketeering Conspiracy
18 U.S.C. § 1962(d)
Life in prison
Fine of $250,000
Attempted Murder in Aid of Racketeering
18 U.S.C. §§ 1959(a)(5) and 2
10 years in prison
Fine of $250,000
Discharge of a Firearm During and in Furtherance of a Crime of Violence
18 U.S.C. § 924(c)
Life in prison
(Mandatory minimum of 5 years (7 years if brandished, 10 years if discharged))
Fine of $250,000
Assault with a Dangerous Weapon in Aid of Racketeering
18 U.S.C. §§ 1959(a)(3) and 2
20 years in prison
Fine of $250,000
MISSAEL MENDOZA
19
Assault with a Dangerous Weapon in Aid of Racketeering (two counts)
18 U.S.C. §§ 1959(a)(3) and 2
20 years in prison
Fine of $250,000
CHRISTIAN QUINTANILLA
19
Assault with a Dangerous Weapon in Aid of Racketeering (two counts)
18 U.S.C. §§ 1959(a)(3) and 2
20 years in prison
Fine of $250,000
ELMER RODRIGUEZ
a/k/a “Gordo”
30
Racketeering Conspiracy
18 U.S.C. § 1962(d)
Life in prison
Fine of $250,000
Attempted Murder in Aid of Racketeering
18 U.S.C. §§ 1959(a)(5) and 2
10 years in prison
Fine of $250,000
Discharge of a Firearm During and in Furtherance of a Crime of Violence
18 U.S.C. § 924(c)
Life in prison
(Mandatory minimum of 5 years (7 years if brandished, 10 years if discharged)
Fine of $250,000
MARVIN OSEGUEDA SARAVIA
a/k/a “Chiquis”
19
Assault with a Dangerous Weapon in Aid of Racketeering (two counts)
18 U.S.C. §§ 1959(a)(3) and 2
20 years in prison
Fine of $250,000
KEVIN RAMIREZ VALENCIA
a/k/a “Delincuente”
22
Racketeering Conspiracy
18 U.S.C. § 1962(d)
20 years in prison
Fine of $250,000
Assault with a Dangerous Weapon in Aid of Racketeering
18 U.S.C. §§ 1959(a)(3) and 2
20 years in prison
Fine of $250,000
ALEXIS
CRUZ
ZEPEDA
a/k/a “Zorro”
26
Racketeering Conspiracy
18 U.S.C. § 1962(d)
Life in prison
Fine of $250,000
Attempted Murder in Aid of Racketeering
18 U.S.C. §§ 1959(a)(5) and 2
10 years in prison
Fine of $250,000
Discharge of a Firearm During and in Furtherance of a Crime of Violence
18 U.S.C. § 924(c)(1)
Life in prison
(Mandatory minimum of 5 years (7 years if brandished, 10 years if discharged))
Fine of $250,000
KEVIN GUATEMALA ZEPEDA
a/k/a “Mision”
23
Racketeering Conspiracy
18 U.S.C. § 1962(d)
20 years in prison
Fine of $250,000
Assault with a Dangerous Weapon in Aid of Racketeering
18 U.S.C. §§ 1959(a)(3) and 2
20 years in prison
Fine of $250,000
The court also may order additional terms of supervised release, fines, and restitution. Nevertheless, 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.
An indictment merely alleges that crimes have been committed, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt.
The defendants are scheduled to make initial federal court appearances before U.S. Magistrate Court Judge Jacqueline Scott Corley today at 11:30 a.m.
This case is being prosecuted by the Organized Crime Strike Force of the Office of the United States Attorney. The prosecution is the result of an investigation by HSI and the San Francisco Police Department.
Rodeo Resident Charged in Alleged Bank RobberyRead the Press Release
OAKLAND – A federal complaint charges Jose Miguel Rodriguez Montano with committing bank robbery and using, carrying, and possessing a firearm during and in relation to a crime of violence, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett.
According to the complaint, filed on March 6, 2020, Montano entered a Comerica Bank in San Leandro on January 7, 2020, and repeatedly demanded that a bank employee at a teller window give him money. The robber was wearing a Chewbacca mask to disguise his identity and was carrying a shotgun inside a tennis racket case. The teller passed Montano bundles of cash in response to his demands, an amount later calculated to be $35,990. As the robber exited the bank, surveillance cameras filmed the shotgun falling out of the tennis racket case as the robber caught it and carried it out of the building.
The complaint describes features of the investigation that led to Montano’s arrest. Significantly, surveillance cameras inside and outside the bank, as well as from local businesses, captured many of the robber’s movements including the arrival of a car at a nearby parking lot prior to the robbery and the departure of the car shortly after the robbery. Additional investigation led to the identity of the car owner and recovery of several items that resembled the items used by the robber during the theft.
The complaint charges Montano with bank robbery, in violation of 18 U.S.C. § 2113, and using, carrying, and possessing a firearm in relation to a crime of violence, in violation of 18 U.S.C. § 924(c).
A complaint merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. The maximum penalty defendant faces upon conviction for the bank robbery charge is 20 years’ imprisonment. Further, upon conviction, the maximum penalty Montano faces for using, carrying or possessing a firearm in relation to a crime of violence is life imprisonment, with a minimum mandatory sentence of 5 years’ imprisonment. Additionally, periods of supervised release, fines, forfeitures, and special assessments also could be imposed. 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.
Montano made his initial federal court appearance on the charges before U.S. Magistrate Judge Donna M. Ryu. Magistrate Judge Donna M. Ryu ordered defendant Montano to appear on March 13, 2020, for a status hearing regarding detention and arraignment.
Assistant U.S. Attorney Thomas R. Green is prosecuting the case with the assistance of Kay Konopaske. The prosecution is the result of a joint investigation by the FBI and the San Leandro Police Department.
Associates of Western Addition “CDP” Gang Convicted of RICO Conspiracy and AccessoryRead the Press Release
SAN FRANCISCO – Earlier today, a federal grand jury convicted Barry Gilton, a/k/a “Prell,” of participating in a racketeering conspiracy, announced United States Attorney David L. Anderson and Federal Bureau of Investigation (FBI) Special Agent in Charge John F. Bennett. The jury further found Gilton’s codefendant, Lupe Mercado, guilty of being an accessory to a murder committed by members of the San Francisco gang referred to as the Central Divisadero Players, a/k/a “Central Divis Playas” or “CDP.” The guilty verdicts follow a four-week jury trial before the Honorable William H. Orrick, U.S. District Judge, and represent the tenth and eleventh convictions in this racketeering case.
“The jury found that Gilton and Mercado participated in or assisted gang activity on San Francisco streets,” stated U.S. Attorney Anderson. “The jury’s verdict adds to nine prior convictions in the same case. Although much more work remains to be done, the verdicts are another significant step forward in dismantling a street gang that has imposed itself on San Francisco for far too long.”
“Gang members operate outside of the rule of law that allows our community to function as it should,” said FBI Special Agent in Charge Bennett. “Members of CDP showed no hesitation to use violence to further their activities, and as public servants sworn to protect our community we cannot and will not let that happen unchallenged.”
Evidence at trial showed that Gilton, 46, and Mercado, 45, both of San Francisco, Calif., associated with members of CDP. The evidence showed that CDP was a racketeering organization that worked collectively with other gangs in the Western Addition of San Francisco to preserve and protect the power, territory, reputation, and profits of the enterprise using intimidation, violence, assaults, and murder. CDP members and associates committed numerous crimes, including murder, attempted murder, pimping, robbery, firearms offenses, witness intimidation, drug trafficking, and the enticement of individuals to travel in interstate commerce for prostitution.
The eleven-defendant, 22-count second superseding indictment filed on August 14, 2014, in this case charged Gilton and Mercado with murder in aid of racketeering, in violation of 18 U.S.C. § 1959(a)(1); use, possession, brandishing, or discharge of a firearm in furtherance of a crime of violence, in violation of 18 U.S.C. § 924(c)(1)(A); and use or possession of a firearm in a murder, in violation of 18 U.S.C. § 924(j). Gilton was also charged with racketeering conspiracy, in violation of 18 U.S.C. § 1962(d); and Mercado was also charged as an accessory after the fact, in violation of 18 U.S.C. § 3. The jury convicted Gilton of the racketeering conspiracy and Mercado of being an accessory after the fact of a murder.
Judge Orrick has not yet scheduled Gilton’s and Mercado’s sentencing.
Gilton and Mercado face maximum statutory penalties of life in prison and 15 years, respectively. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The other nine defendants in this case have already been convicted and sentenced. Charles Heard (a/k/a “Cheese”) was sentenced to four life sentences; Jaquain Young (a/k/a “Loc”) was sentenced to four life sentences, plus additional terms of years; Adrian Gordon (a/k/a “Tit”) was sentenced to 27 years in prison; Alfonzo Williams (a/k/a “Fonz” or “Relly”) was sentenced to 25 years in prison; Antonio Gilton (a/k/a “TG” or “Tone”) was sentenced to 22 years in prison; Reginald Elmore (a/k/a “Fat Reg”) was sentenced to 22 years in prison; Esau Ferdinand (a/k/a “Sauce”) was sentenced to 20 years in prison; Monzell Harding, Jr. was sentenced to 12 years in prison; and Paul Robeson (a/k/a “P World”) was sentenced to six years in prison.
The U.S. Attorney’s Office’s Organized Crime Strike Force is prosecuting the case. The prosecution is the result of joint investigation by the FBI; the San Francisco Police Department’s Gang Task Force, Homicide Detail, Robbery Detail, Special Victims Unit, and the Northern, Park, and Bayview Stations; the San Francisco District Attorney’s Office; and the San Pablo Police Department.
Founder of Russian Bank Charged with Tax FraudRead the Press Release
The founder of a Russian bank was arrested last week in London in connection with an indictment charging him with filing false tax returns, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division, U.S. Attorney David L. Anderson for the Northern District of California, and Internal Revenue Service (IRS) Criminal Investigation, Special Agent in Charge Kareem Carter. The Sept. 26, 2019, indictment was unsealed today.
According to the indictment, Oleg Tinkov was the indirect majority shareholder of a branchless online bank that provided its customers with financial and bank services. The indictment alleges as a result of an initial public offering (IPO) on the London Stock Exchange in 2013, Tinkov beneficially owned more than $1 billion worth of the bank’s shares. The indictment further alleges that three days after the IPO, Tinkov renounced his U.S. citizenship – a taxable event requiring Tinkov to report to the IRS the constructive sale of his worldwide assets, report the gain on the constructive sale of those assets to the IRS, and pay tax on such gain to the IRS. Although Tinkov allegedly beneficially owned more than $1 billion of TCS shares at the time of his expatriation through a British Virgin Island structure, the indictment charges that Tinkov filed a false 2013 tax return with the IRS that reported income of less than $206,000, and a false 2013 Initial and Annual Expatriation Statement reporting that his net worth was $300,000.
If convicted, Tinkov faces a maximum sentence of three years in prison on each count. He also faces a period of supervised release, restitution, and monetary penalties.
An indictment merely alleges that crimes have been committed. The defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Trial Attorney Christopher S. Strauss of the Tax Division and Assistant U.S. Attorneys Michelle J. Kane and Katherine Lloyd-Lovett , are prosecuting the case with the assistance of Katie Turner and Rebecca Shelton. The prosecution is the result of an investigation by IRS–Criminal Investigation. The Criminal Division’s Office of International Affairs of the Justice Department is assisting with the extradition.
Additional information about the Tax Division and its enforcement efforts may be found on the Division’s website.
Founder of Russian Bank Charged with Tax FraudRead the Press Release
OAKLAND – Oleg Tinkov, the founder of a Russian bank, was arrested in London in connection with an indictment charging him with filing false tax returns, announced U.S. Attorney David L. Anderson, Principle Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division, and Internal Revenue Service (IRS) Criminal Investigation, Special Agent in Charge Kareem Carter. The indictment issued Sept. 26, 2019, by a federal grand jury, was unsealed following yesterday’s arrest.
According to the indictment, Tinkov was the chairman and beneficial majority shareholder of Tinkoff Credit Systems (TCS), a branchless online bank that provided its customers with financial and bank services. On October 25, 2013, TCS held its initial public offering (“IPO”) on the London Stock Exchange. TCS’s per share price opened at $17.50. The indictment states s that of TCS’s IPO, Tinkov owned, through multiple British Virgin Islands entities, more than 92 million TCS shares, making him the beneficial owner of more than $1 billion worth of TCS shares. The indictment alleges that three days later, on October 28, 2013, Tinkov, a Russian national, renounced his U.S. citizenship. Tinkov’s decision to renounce his citizenship was a taxable event requiring him to report to the IRS the constructive sale of his worldwide assets, report the gain on the constructive sale of those assets to the IRS, and pay tax on such gain to the IRS. According to the indictment, despite knowing he beneficially owned more than $1 billion of TCS shares at the time of his expatriation, Tinkov filed a 2013 U.S. Individual Income Tax Return with the IRS that reported total income of less than $206,000. In addition, Tinkov filed a 2013 Initial and Annual Expatriation Statement reporting his net worth was $300,000. The indictment charges Tinkov with two counts of tax fraud, in violation of 26 U.S.C. § 7206(1).
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces a maximum sentence of three years in prison and a fine of $250,000 for each count. He also faces a period of supervised release, restitution, and monetary penalties. 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 is seeking Tinkov’s extradition from the United Kingdom.
Assistant U.S. Attorneys Michelle J. Kane and Katherine Lloyd-Lovett and Trial Attorney Christopher Strauss of the U.S. Department of Justice Tax Division are prosecuting the case with the assistance of Katie Turner and Rebecca Shelton. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation. The Criminal Division’s Office of International Affairs of the Justice Department is assisting with the extradition.
San Mateo Doctor Charged with Unlawful Distribution of Opioids and Health Care FraudRead the Press Release
SAN FRANCISCO – A federal grand jury indicted Timothy Mulligan for the unlawful distribution of opioids, including fentanyl, outside the scope of professional practice and health care fraud, announced United States Attorney David L. Anderson and Drug Enforcement Administration (DEA) Special Agent in Charge Daniel C. Comeaux.
According to the indictment, Mulligan, 67, of Santa Clara, Calif., is a licensed physician practicing in San Mateo County. A substantial part of Mulligan’s medical practice involved providing prescriptions for controlled substances—primarily opioids. As alleged in the indictment, Mulligan issued an unusually high volume of prescriptions for potent opioids, including fentanyl. For example, according to a state government database, from about August 2014 through June 2018, Mulligan issued more than 9,000 prescriptions for opioids (totaling over 700,000 dosage units) to more than 250 patients. Overall, Mulligan predominantly prescribed the strongest strength dosages when prescribing fentanyl, oxycodone, and hydrocodone. In certain instances, Mulligan issued opioid prescriptions in quantities that significantly exceeded generally accepted daily quantities for the drug. The indictment states that because of the unusual pattern and volume of prescriptions issued by Mulligan and other warning signs, certain pharmacies declined to fill prescriptions issued by Mulligan or restricted the types of Mulligan’s prescriptions that they would fill.
As further alleged in the indictment, some individuals who obtained medically unnecessary prescriptions from Mulligan used private insurance or Medi-Cal to cover their office visits or pay for the drugs; others paid with cash. As alleged in the indictment, the insurance companies and Medi-Cal would not have paid for the office visits or paid out the pharmacy claims had they known the prescriptions were not medically necessary or were over-prescribed.
The Honorable Charles R. Breyer, Senior District Judge, scheduled Mulligan’s next appearance for April 29, 2020, at 1:30 p.m.
The indictment filed on February 27, 2020, charges Mulligan with three counts of distributing controlled substances outside the scope of professional practice, in violation of 21 U.S.C. §§ 84l(a)(l) & 841(b)(l)(C); and two counts of health care fraud, in violation of 18 U.S.C. § 1347.
The indictment merely alleges that crimes have been committed, and the defendant must be presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces a maximum sentence of 20 years in prison, a $1,000,000 fine, and a life term of supervised release for each count of distributing controlled substances; and 10 years in prison, a $250,000 fine, and a three-year term of supervised release for each count of health care fraud. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Ross Weingarten is prosecuting this case with the assistance of Linda Love. This prosecution is the result of an investigation by the DEA with assistance from the San Mateo District Attorney’s Office and the California Department of Health Care Services.
Anyone, including pharmacists and medical professionals, with information about prescriptions issued without a legitimate medical purpose is urged to contact the FBI Tip Line at (415) 553-7400.
Husband and Wife Plead Guilty to Social Security Fraud SchemeRead the Press Release
OAKLAND – Erick and Kimberly Dominguez pleaded guilty in federal court today to conspiracy to commit wire fraud in connection with their scheme to defraud the Social Security Administration (SSA), announced United States Attorney David L. Anderson and SSA Office of Inspector General Special Agent in Charge Robb Stickley. The plea was received by the Honorable Haywood S. Gilliam Jr., U.S. District Judge.
According to the defendants’ plea agreements, Kimberly Dominguez, 37, of Vallejo, Calif., was an employee at the SSA’s Oakland Teleservice Center. From September 2015 until October 2019, Ms. Dominguez used her employment at the SSA to divert Social Security direct deposit payments from recipients’ bank accounts to bank accounts that she controlled. After the diverted benefits were deposited, Erick Dominquez, 39, withdrew money from the accounts, primarily via ATM cash withdrawals. In two instances, Ms. Dominguez reinstated suspended Social Security benefits before diverting them. In total, Ms. Dominguez diverted at least $247,784.70 in Social Security payments from more than 30 recipients.
A federal grand jury indicted the defendants on November 7, 2019, charging them both with one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349, and Ms. Dominguez with an additional seven counts of wire fraud, in violation of 18 U.S.C. § 1343. Both defendants pleaded guilty to the conspiracy count; and if Ms. Dominquez complies with her plea agreement, the additional charges against her will be dismissed at sentencing.
Judge Gilliam scheduled the defendants’ sentencing hearing for July 13, 2020, in Oakland, Calif. The maximum statutory penalty for conspiracy to commit wire fraud is twenty years’ imprisonment, a $250,000 fine, and a three-year term of supervised release. 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.
Special Assistant United States Attorney Christopher Vieira is prosecuting the case with the assistance of Marina Ponomarchuk. The prosecution is the result of an investigation by the SSA Office of the Inspector General with assistance from the FBI.
The defendants charged in this case are among the 400 defendants charged nationwide by federal prosecutors this year in connection with financial schemes that targeted or largely affected seniors.
Today Attorney General William P. Barr announced the launch of a National Elder Fraud Hotline, which will provide services to seniors who may be victims of financial fraud. The Hotline will be staffed by experienced case managers who can provide personalized support to callers. Case managers will assist callers with reporting the suspected fraud to relevant agencies and by providing resources and referrals to other appropriate services as needed. When applicable, case managers will complete a complaint form with the Federal Bureau of Investigation Internet Crime Complaint Center (IC3) for Internet-facilitated crimes and submit a consumer complaint to the Federal Trade Commission on behalf of the caller. The Hotline’s toll free number is 833-FRAUD-11 (833-372-8311).
Santa Rosa Doctors Indicted for Tax FraudRead the Press Release
SAN FRANCISCO - A federal grand jury returned a superseding indictment against Robert Rowen and Teresa Su, charging them with conspiracy to defraud the United States, announced United States Attorney David L. Anderson and Internal Revenue Service (IRS) Special Agent in Charge Kareem Carter. In addition, each defendant also was charged with a separate count of tax evasion.
According to the indictment, Rowen and Su, ages 69 and 66, respectively, of Sebastopol, Calif., are a married couple who practiced medicine from their clinic in Santa Rosa. The medical doctors allegedly conspired to evade payment of Rowen’s federal income tax liabilities by concealing Rowen’s ability to pay his 1992 through 1997 and 2003 through 2008 federal income tax liabilities. Specifically, Rowen and Su allegedly placed his assets out of the reach of the United States Government, placed assets in the names of other persons or entities, deposited Rowen’s revenue into nominee bank accounts, used cash to conduct personal and professional business, converted his revenue into gold and silver coins, and provided false information to the IRS.
The indictment provides a description of various methods the couple allegedly used to conceal Rowen’s income. For example, the indictment describes how the couple instructed patients to make their checks for medical services payable to gold dealers who, in turn, purchased gold and silver coins. In addition, the indictment alleges Rowen formed a company named Lotus Management LLC to receive revenue from a different company. Rowen then deposited the funds into a bank account opened in the name of Lotus Management LLC, and used the proceeds to purchase gold and silver coins. Further, the couple allegedly used cash to pay the rent for the medical practice as well as to pay the balance on credit cards used to cover various business and personal expenses.
In sum, the indictment alleges that between January 3, 2007, and April 11, 2014, Rowen, both individually and through nominees, converted over $3,900,000 of his revenue to gold and silver coins. Count one of the superseding indictment charges Rowen and Su with conspiracy to defraud the United States, in violation of 18 U.S.C. § 371, and counts two and three of the superseding indictment charges the defendants each with one count of tax evasion, in violation of 26 U.S.C. § 7201.
A superseding indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted of the conspiracy count, the defendants face a maximum sentence of five years imprisonment, and a fine of $250,000, plus restitution. If convicted of tax evasion, the defendant faces a maximum sentence of three years in prison and 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.
Rowen and Su made a federal court appearance on the superseding indictment on February 26, 2020. The defendants currently are released on a $200,000 bond. The matter was assigned to the Honorable Charles R. Breyer, U.S. District Judge who scheduled the trial in the case to begin on February 22, 2021.
Assistant U.S. Attorney Cynthia Stier is prosecuting the case. The prosecution is the result of an investigation by the IRS.
Last of Five East Bay Contractors Sentenced in Mail Fraud SchemeRead the Press Release
OAKLAND – Kevin Laney was the last of five defendants sentenced for their respective roles in a mail fraud scheme, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The Honorable Yvonne Gonzalez Rogers, United States District Judge, sentenced Laney to the 25 months he had already served in prison for his role in the scheme.
Laney, 52, of Bozeman, Montana, pleaded guilty to the charge on August 15, 2019. Specifically, Laney admitted he conspired with Brian Federico, 54, of Tracy, Calif., to defraud Laney’s employer at the time, Matrix Service Company. The mail fraud scheme also was the subject of a two-week trial in September of 2019, at the conclusion of which a jury found Federico guilty of one count of mail fraud conspiracy and two counts of mail fraud.
According to documents submitted at trial, Matrix provides tank construction, maintenance and repair services to petrochemical companies. Federico was a project manager for Imperial Shotcrete, a company hired to perform concrete construction services as a subcontractor for Matrix. The evidence at trial showed that Matrix and the FBI uncovered a complex scheme that took place between 2007 and 2010, in Matrix’s Suisun City, Calif., office, where Laney worked as a Senior Project Manager.
As part of the scheme, Federico caused Matrix to pay fraudulent and inflated invoices to Imperial, with the proceeds of the scheme then being paid downstream to Laney and Federico. Federico created false and fraudulent invoices both by using the name and logo of a real company without its authorization, and by using bogus invoices from C.E.M.S., another company Federico controlled. Federico also instructed Laney and another Matrix Project Manager to submit fraudulent invoices from fake companies to Imperial, and persuaded his employer, Imperial, to pass those bogus charges onto Matrix for payment. Most of the funds that Matrix paid on the fraudulent invoices eventually were deposited into bank accounts that Federico controlled. Pursuant to his scheme, Federico defrauded Matrix of a total of $1,289,403, with more than $875,000 of the payments ultimately being deposited into bank accounts he controlled. After Matrix and the FBI uncovered the scheme, Matrix reimbursed its customers more than $1.3 million in charges they unwittingly passed on to their customers as a result of the fraud scheme.
Many of the fraudulent invoices Federico and Imperial submitted to Matrix were submitted for payment approval to Laney and another Matrix project manager, Brandon Hourmouzus. For his role in the scheme, Laney submitted fraudulent invoices totaling $1.01 million under the name of his fake company, Rogue Consultants, for work not performed. Those invoices were paid in full by Imperial, but only after it had successfully passed the costs onto Matrix, and been paid by Matrix. The scheme continued under a third Matrix Project Manager, Charles Burnette, who passed fake costs through Imperial and its owner, Miguel Ibarria, onto Matrix for payment
On December 6, 2012, a federal grand jury indicted Federico, Laney, and their co-defendants, charging each with various financial crimes related to the scheme. Hourmouzus, Burnette, and Ibbaria all pleaded guilty to conspiracy charges related to their respective role in the scheme. In addition, all three testified at Federico’s trial.
Federico, Laney and their co-defendants were sentenced as follows:
Defendant's Name Age/Residence Charge(s) Sentence Brian Federico54/Tracy, California
Conspiracy to Commit Fail Fraud, 18 U.S.C. § 1349
Mail Fraud,18 U.S.C. § 1341 (two counts)
Sentenced 1/24/20 to 60 months in prison, three years of supervised release, a $50,000 fine, a $300 special assessment, and $1,287,000 in restitution. Kevin Laney52/Bozeman, Montana
Conspiracy to Commit Mail Fraud, 18 U.S.C. § 1349
Sentenced 2/27/20 to time served of 25 months in prison, one year of supervised release, a $100 special assessment, and restitution to be determined. Brandon Hourmouzus45/Vacaville, California
Conspiracy to Commit Fail Fraud, 18 U.S.C. § 1349 Sentenced 10/08/2015 to three years and six months probation, $100 special assessment, and $196,410 restitution. Charles Burnette38/Aliso Viejo, California
Conspiracy to Commit Fail Fraud, 18 U.S.C. § 1349Sentenced 09/11/2014 to five years’ probation, $100 special assessment, and $145,149 restitution.
Miguel Ibarria60/Tracy California
Conspiracy to Commit Fail Fraud, 18 U.S.C. § 1349 Sentenced 12/15/15 to four years’ probation, and a $100 special assessment.Judge Gonzalez Rogers concluded that both Federico and Laney were deserving of sentencing enhancements for using sophisticated means to accomplish the illegal goals of the conspiracy. Federico also received a sentencing enhancement for being the leader organizer of the conspiracy, and Laney received a sentencing enhancement for abusing the trust of his employer, Matrix.
Judge Gonzalez-Rogers ordered the parties to return to Court on April 2, 2020, for a further hearing regarding restitution.
Assistant U.S. Attorneys Thomas R. Green and Jonathan U. Lee are prosecuting this case with the assistance of Jessica Rodriguez Gonzalez, Tina Rosenbaum, and Noble Hughes. This prosecution is the result of an investigation by the Federal Bureau of Investigation.
Eight Members of South Bay-Backed Drug Trafficking Organizations Charged in Federal IndictmentsRead the Press Release
SAN FRANCISCO – Eight defendants were indicted on narcotics trafficking charges, announced United States Attorney David L. Anderson, Drug Enforcement Administration (DEA) Special Agent in Charge Daniel C. Comeaux, and Homeland Security Investigations (HSI) Special Agent in Charge Tatum King. The defendants were arrested on November 6, 2019, and February 11, 2020, in the areas of San Jose and Tracy, Calif. In addition to the two indictments—one filed on November 14, 2019, and the other filed February 21, 2020—four criminal complaints have been filed in this investigation.
According to the complaints, DEA and HSI have been engaged in an investigation since early 2019 into two South Bay-based drug trafficking organizations. The federal agencies used several tools—including a confidential source to conduct controlled purchases of methamphetamine and court-ordered telephonic communications intercepts—to gather evidence regarding certain targets. For example, one of the complaints describes how on May 5, 2019, a confidential source sought to purchase from Eleazar Garcia, aka Jr, three pounds of methamphetamine. According to that complaint, Garcia obtained the drugs in Mountain View from co-defendant Misael Barajas and then exchanged the drugs in Gilroy with the confidential source for $5,100. Garcia then arranged to have proceeds from the sale of the drugs delivered to Barajas. Similarly, one of the complaints describes how in August of 2019 a confidential source called Garcia to purchase two ounces of cocaine. On this occasion, Garcia allegedly arranged to obtain the drugs from co-defendant Miguel Gallardo Pacheco. According to one of the complaints, the confidential source met with Garcia and Gallardo in a BMW parked in a pre-determined location in San Jose. The confidential source allegedly entered the car, took the cocaine from the middle console of the car and handed $2,200 to Garcia. Garcia counted the money and gave it to Gallardo.
The complaints describe additional transactions involving the possession, sale, and distribution of methamphetamine and cocaine in October and November of 2019. Further, one of the complaints describes the November 6, 2019, arrest of co-defendant Omar Fernando Peralta Sanchez at which time federal agents retrieved 10 pounds of crystal methamphetamine and five gallons of liquid methamphetamine from his residence. In sum, the indictments charge the defendants with the following crimes:
Defendant Age/Residence Charges Maximum PenaltiesMisael Barajas
(charged in the Nov. 14, 2019, and Feb. 20, 2020, indictments)
31/Sunnyvale, Calif.21 U.S.C. §§ 846, 841(a)(1), and (b)(1)(C) – Conspiracy to Distribute and Possess with Intent to Distribute Methamphetamine
Maximum 20 years imprisonment; maximum $1 million fine
21 U.S.C. § 841(a)(1) and (b)(1)(A)(viii) – Possession with Intent to Distribute and Distribution of 500 Grams and More of a Mixture Containing Methamphetamine [two counts] Not less than 10 years imprisonment and up to life; maximum $10 million fine 21 U.S.C. §§ 846, 841(a)(1), (b)(1)(A)(viii), and (b)(1)(C) – Conspiracy to Distribute and Possess with Intent to Distribute 500 Grams and More of a Mixture Containing Methamphetamine, and Cocaine Not less than 10 years imprisonment and up to life; maximum $10 million fineDavid Pecina Garcia
(charged in the Feb. 20, 2020, indictment) 39/San Jose, Calif.21 U.S.C. §§ 846, 841(a)(1), and (b)(1)(C) – Conspiracy to Distribute and Possess with Intent to Distribute Methamphetamine
Maximum 20 years imprisonment; maximum $1 million fine
21 U.S.C. § 841(a)(1) and (b)(1)(A)(viii) – Possession with Intent to Distribute and Distribution of 500 Grams and More of a Mixture Containing Methamphetamine Not less than 10 years imprisonment and up to life; maximum $10 million fineEleazar Garcia, aka Jr
(charged in the Feb. 20, 2020, indictment)
36/Tracy, Calif.21 U.S.C. §§ 846, 841(a)(1), and (b)(1)(C) – Conspiracy to Distribute and Possess with Intent to Distribute Methamphetamine
Maximum 20 years imprisonment; maximum $1 million fine
21 U.S.C. § 841(a)(1) and (b)(1)(A)(viii) – Possession with Intent to Distribute and Distribution of 500 Grams and More of a Mixture Containing Methamphetamine Not less than 10 years imprisonment and up to life; maximum $10 million fine 21 U.S.C. § 841(a)(1) and (b)(1)(C) – Possession with Intent to Distribute and Distribution of Cocaine Maximum 20 years imprisonment; maximum $1 million fineEleazar Garcia, aka Senior
(charged in the Feb. 20, 2020, indictment) 68/Modesto, Calif.21 U.S.C. §§ 846, 841(a)(1), and (b)(1)(C) – Conspiracy to Distribute and Possess with Intent to Distribute Methamphetamine
Maximum 20 years imprisonment; maximum $1 million fineJesus Garcia-Cano, aka Chuche
(charged in the Feb. 20, 2020, indictment) 25/San Jose, Calif.21 U.S.C. §§ 846, 841(a)(1), and (b)(1)(C) – Conspiracy to Distribute and Possess with Intent to Distribute Methamphetamine
Maximum 20 years imprisonment; maximum $1 million fine
21 U.S.C. § 841(a)(1) and (b)(1)(A)(viii) – Possession with Intent to Distribute and Distribution of 500 Grams and More of a Mixture Containing Methamphetamine Not less than 10 years imprisonment and up to life; maximum $10 million fineMiguel Gallardo Pacheco
(charged in the Feb. 20, 2020, indictment) 22/San Jose, Calif. 21 U.S.C. § 841(a)(1) and (b)(1)(C) – Possession with Intent to Distribute and Distribution of Cocaine Maximum 20 years imprisonment; maximum $1 million fineOctavio Paque
(charged in the Nov. 14, 2019, indictment) 35/San Jose, Calif. 21 U.S.C. §§ 846, 841(a)(1), (b)(1)(A)(viii), and (b)(1)(C) – Conspiracy to Distribute and Possess with Intent to Distribute 500 Grams and More of a Mixture Containing Methamphetamine, and Cocaine Not less than 10 years imprisonment and up to life; maximum $10 million fineOmar Fernado Peralta Sanchez
(charged in the Nov. 14, 2019, indictment) 36/San Jose, Calif.21 U.S.C. §§ 846, 841(a)(1), (b)(1)(A)(viii), and (b)(1)(C) – Conspiracy to Distribute and Possess with Intent to Distribute 500 Grams and More of a Mixture Containing Methamphetamine, and Cocaine
Not less than 10 years imprisonment and up to life; maximum $10 million fine
21 U.S.C. § 841(a)(1) and (b)(1)(A)(viii) – Possession with Intent to Distribute and Distribution of 500 Grams and More of a Mixture Containing Methamphetamine Maximum 20 years imprisonment; maximum $1 million fineThe indictments and complaints merely allege that crimes have been committed, and each defendant must be presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendants face maximum sentences and fines described in the table above. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Sarah Griswold is prosecuting these cases with the assistance of Laurie Worthen and Jessica Leung. These cases were investigated and prosecuted by member agencies of the Organized Crime Drug Enforcement Task Force, a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state, and local law enforcement agencies.
Singaporean Shipping Company Convicted for Concealing Illegal Discharges of Oily WaterRead the Press Release
Unix Line PTE Ltd., a Singapore-based shipping company, pleaded guilty in federal court today to a violation of the Act to Prevent Pollution from Ships.
Assistant Attorney General Jeffrey Bossert Clark of the Justice Department’s Environment and Natural Resources Division, U.S. Attorney David L. Anderson of the Northern District of California and U.S. Coast Guard Investigative Service Special Agent in Charge Kelly S. Hoyle made the announcement.
In pleading guilty, Unix Line admitted that its crew members onboard the Zao Galaxy, a 16,408 gross-ton, ocean-going motor tanker, knowingly failed to record in the vessel’s oil record book the overboard discharge of oily bilge water without the use of required pollution-prevention equipment, during the vessel’s voyage from the Philippines to Richmond, California.
According to the plea agreement, Unix Line is the operator of the Zao Galaxy, which set sail from the Philippines on Jan. 21, 2019, heading toward Richmond, California, carrying a cargo of palm oil. On Feb. 11, 2019, the Zao Galaxy arrived in Richmond, where it underwent a U.S. Coast Guard inspection and examination. Examiners discovered that during the voyage, a Unix Line-affiliated ship officer directed crew members to discharge oily bilge water overboard, using a configuration of drums, flexible pipes, and flanges to bypass the vessel’s oil water separator. The discharges were knowingly not recorded in the Zao Galaxy’s oil record book.
Unix Line’s sentencing hearing is scheduled for March 20 before U.S. District Court Judge Jon S. Tigar in Oakland, California.
Senior Trial Attorney Kenneth Nelson of the Environmental Crimes Section, with the assistance of Kay Konopaske and Katie Turner, Assistant U.S. Attorney Katherine Lloyd-Lovett and Special Assistant U.S. Attorney Andrew Briggs of the Northern District of California are prosecuting the case. The prosecution is the result of a year-long investigation by the Coast Guard Investigative Service and the Investigations Division of Coast Guard Sector San Francisco.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Singapore Shipping Company Pleads Guilty to Concealing Discharge of Oily WasteRead the Press Release
OAKLAND – Unix Line PTE, Ltd., a Singapore-based shipping company, pleaded guilty in federal court today to a violation of the Act to Prevent Pollution from Ships. The plea was received by the Honorable Jon S. Tigar, U.S. District Judge.
United States Attorney David L. Anderson, Assistant Attorney General Jeffrey Bossert Clark of the Justice Department’s Environment and Natural Resources Division, and U.S. Coast Guard Investigative Service Special Agent in Charge Kelly S. Hoyle made the announcement.
In pleading guilty, Unix Line admitted that its crew members onboard the Zao Galaxy, a 16,408 gross-ton, ocean-going motor tanker, knowingly failed to record in the vessel’s oil record book the overboard discharge of oily bilge water without the use of required pollution-prevention equipment, during the vessel’s voyage from the Philippines to Richmond, Calif.
According to the plea agreement, Unix Line is the operator of the Zao Galaxy, which set sail from the Philippines on January 21, 2019, heading toward Richmond, carrying a cargo of palm oil. On February 11, 2019, the Zao Galaxy arrived in Richmond, where it underwent a U.S. Coast Guard inspection and examination. Examiners discovered that during the voyage, a Unix Line-affiliated ship officer directed crew members to discharge oily bilge water overboard, using a configuration of drums, flexible pipes, and flanges to bypass the vessel’s oil water separator. The discharges were knowingly not recorded in the Zao Galaxy’s oil record book.
On October 24, 2019, a federal grand jury indicted Unix Line. On February 19, 2020, Unix Line was charged by superseding information with one count of violating the Act to Prevent Pollution from Ships, 33 U.S.C. § 1908(a). Under the plea agreement, Unix Line pled guilty to violating the Act to Prevent Pollution from Ships.
Judge Tigar scheduled Unix Line’s sentencing hearing for March 20, 2020, at 9:30 a.m. in Oakland. The maximum statutory penalty for a violation of the Act to Prevent Pollution from Ships is six years’ imprisonment and a fine of twice the gross gain or loss derived from the offense. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The prosecution is being handled by Assistant United States Attorney Katherine Lloyd-Lovett and Special Assistant United States Attorney Andrew Briggs of the Northern District of California and Senior Trial Attorney Kenneth Nelson of the Environmental Crimes Section, with the assistance of Kay Konopaske and Katie Turner. The prosecution is the result of a year-long investigation by the Coast Guard Investigative Service and the Investigations Division of Coast Guard Sector San Francisco.
Belarus Man Indicted for Mailing Ricin and Threats to Pelican Bay State PrisonRead the Press Release
SAN FRANCISCO – A federal grand jury in San Francisco indicted Vladislav Victorvic Timoshchuk with attempted transfer of a toxin for use as a weapon, mailing threatening communications, and mailing an injurious article, announced United States Attorney David L. Anderson and Federal Bureau of Investigation (FBI) Special Agent in Charge John F. Bennett.
According to the indictment, Timoshchuk, 34, of Belarus, is alleged to have sent two envelopes containing ricin to Pelican Bay State Prison. One of the envelopes was addressed to the Warden and contained ricin and a note, which read: “WARNING! TOXIC! THIS LETTER IS LACED WITH DEADLY RICIN POWDER.” The other envelope was addressed to inmate A.C. and contained ricin and a note, which read in part: “Release inmate A.C.”
The indictment further alleges that Timoshchuk had previously been incarcerated in California state prison facilities, after which he was deported from the United States to Belarus. In 2016 and into 2018, Pelican Bay State Prison intercepted letters postmarked from Belarus to members of a prison gang, including to inmate A.C. In that same timeframe, in 2017, the Anaheim Police Department investigated a school shooting threat, which demanded the release of inmate A.C. from Pelican Bay State Prison in order to avoid the “execution” of a student every day until that release occurred. Later, in 2019, the Bureau of Prisons intercepted a Christmas card sent from Belarus to inmate Theodore Kaczynski, the Unabomber, in which Timoshchuk claimed responsibility for the threats to Anaheim schools and discussed a plan to mail ricin to the United States.
The indictment, filed on February 20, 2020, charges Timoshchuk with two counts of attempted transfer of a toxin for use as a weapon, in violation of 18 U.S.C. § 175(a); two counts of interstate and foreign communication of a threat, in violation of 18 U.S.C. § 875(c); and two counts of mailing an injuries article, in violation of 18 U.S.C. § 1716(j)(1). Timoschuk is not charged for threats other than the two mailings to Pelican Bay.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces a maximum sentence of life for each attempted transfer of a toxin for use as a weapon; a maximum of five years for each interstate and foreign communication of a threat; and a maximum sentence of one year for each mailing of an injurious article. Each charge also carries a potential term of supervised release, a fine of $250,000, and restitution as ordered by the court. 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 Special Prosecutions Section of the United States Attorney’s Office. The prosecution is the result of an investigation by the FBI with the assistance of state and local law enforcement partners and the U.S. Postal Service.
Oakland Man Sentenced to 30 Months in Prison for Possessing Former San Francisco Deputy Sheriff’s FirearmRead the Press Release
SAN FRANCISCO – Antoine Lamar Fowler was sentenced to 30 months in prison for being a felon in possession of a firearm, announced United States Attorney David L. Anderson and Federal Bureau of Investigation (FBI) Special Agent in Charge John F. Bennett. The sentence was handed down by the Honorable Richard Seeborg, U.S. District Judge.
Fowler, 34, of Oakland, Calif., pleaded guilty on May 14, 2019, to one count of being a felon in possession of a firearm, in violation of 18 U.S.C. § 922(g)(1). On June 26, 2019, a federal jury convicted Fowler’s co-defendant, former Deputy Sheriff April Myres, 55, of San Francisco, Calif., of mail and wire fraud following an eight-day trial. According to the evidence presented at Myres’ trial, Fowler was arrested while in possession of a firearm issued by the San Francisco Sheriff’s Department (SFSD) to Myres.
The evidence presented at trial demonstrated Myres and Fowler began a romantic relationship while Fowler was an inmate at the San Francisco County Jail and under Myres’ supervision. After Fowler was released from custody in January 2016, he moved in with Myres at her San Francisco home. On March 25, 2016, Myres reported a burglary of her home to the San Francisco Police Department. As part of her report to the police, she claimed numerous items were stolen, including her SFSD-issued firearm and radio and a number of luxury goods.
In May 2016, Myres filed an insurance claim under her homeowner’s insurance policy. Myres asserted in her insurance claim that she was entitled to over $67,000 in reimbursement for all of the items stolen. The evidence at trial demonstrated that Myres’ insurance claim included numerous false statements. For example, Myres falsely claimed she owned the SFSD-issued firearm and SFSD-issued radio that she claimed had been stolen; and she provided false details about the purchase prices and locations of the allegedly stolen items to bolster her claim. Myres also falsely claimed that three luxury items—a Louis Vuitton purse, a pair of Gucci boots, and a fox fur vest—were stolen; however, all three items were located in her house when the FBI conducted a search in February 2017. The FBI arrested Myres and Fowler on February 2, 2017. When Fowler was arrested, the FBI found Myres’ SFSD-issued firearm in his possession.
In addition to the prison term, Judge Seeborg ordered Fowler to serve three years of supervised release to begin after his prison term is concluded.
Judge Seeborg ordered Fowler released on a $50,000 bond until he surrenders to begin serving his prison term on or before March 31, 2020.
For her part in the events, Judge Seeborg sentenced Myres on November 19, 2019, to 14 months in prison for committing mail and wire fraud.
Assistant U.S. Attorneys Laura Vartain and Nicholas Walsh are prosecuting the case with the assistance of Helen Yee, Kimberly Richardson, Margoth Turcios, Rosario Calderon, Sutton Pierce, and Ian Meader. The prosecution is the result of an investigation by the FBI.
Fraudster Sentenced to Three-And-A-Half Years in Prison for Romance ScamRead the Press Release
SAN FRANCISCO – Randall Elijah Shumpert, a/k/a Randall Turner, a/k/a Randy Goodman, a/k/a Randall Slaughter, a/k/a Rico Fitzgerald, was sentenced to 42 months in prison for wire fraud charges in connection with a romance fraud scheme, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The sentence was handed down by the Honorable Vince Chhabria, U.S. District Judge.
Shumpert pleaded guilty to the charges on November 5, 2019. According to the plea agreement, in 2015, Shumpert, 51, of Long Beach, CA, met an individual online using an alias on a dating website. Shumpert communicated with the victim who lived in Northern California on the phone, through text messages, and in person. Shumpert convinced the victim that she was in a romantic relationship with him and told her that he owned an entertainment company. Eventually, Shumpert solicited money from her, claiming he would use the money to fund projects undertaken by his company and that she would be repaid through the company’s proceeds. Shumpert admitted in the plea agreement that his representations to the victim were false. Specifically, he never told his victim his real name, he did not operate an entertainment company, he did not promote any of the musical events that he described, and he used the money he received from the victim to make purchases for his own benefit, and not for any business purposes.
In addition, Shumpert admitted he defrauded several other victims. The plea agreement describes how Shumpert met another woman online who resides in Southern California. Shumpert again convinced this victim she was in a romantic relationship with him and that he owned an entertainment company. This time, Shumpert told his Southern California victim that his first victim was his colleague at the entertainment company. After convincing his Northern California victim to send funds to the victim in Southern California, Shumpert eventually convinced his Southern California victim to forward to him both the money from the first victim and additional funds of her own. Shumpert acknowledged that he repeated this fraud scheme on no fewer than six occasions with no fewer than six separate female victims. According to the plea agreement, Shumpert agreed that his scheme caused victims to lose more than $550,000, causing substantial financial hardship to at least one of his victims.
A federal grand jury indicted Shumpert on December 4, 2018, charging him with three counts of wire fraud, in violation of 18 U.S.C. § 1343. Shumpert pleaded guilty to all three counts.
At the sentencing hearing, Judge Chhabria commented on Shumpert’s conduct describing it as a “campaign” to identify and defraud his victims. The government’s sentencing memorandum highlighted examples of how Shumpert emotionally manipulated his victims. For example, he told one of his victims that he bought her an engagement ring. The government’s memorandum also discussed examples of the real harm Shumpert’s scheme caused, including the fact that one victim lost over $380,000 and another victim lost all the money she had set aside for her young daughter’s education.
In addition to the prison term, Judge Chhabria ordered Shumpert to pay restitution in the amount of $679,181.74 and ordered Shumpert to serve a 3-year period of supervised release. Shumpert is in custody and will begin serving his prison term immediately.
Assistant U.S. Attorneys Sailaja Paidipaty and Patrick O’Brien are prosecuting this case with the assistance of Marina Ponomarchuk and Morgan Byrne. This prosecution is the result of an investigation by the FBI.
Former Technology Company Employee Indicted for Scheme to Steal from Former EmployerRead the Press Release
SAN FRANCISCO – A federal grand jury indicted Kush Ghanshyam Patel for mail fraud in connection with an alleged scheme to defraud his former employer, announced United States Attorney David L. Anderson and United States Secret Service Special Agent in Charge Thomas C. Edwards.
According to the indictment, Patel, 28, of San Francisco, Calif., worked as an event coordinator from 2013 to 2016 at a streaming-video company headquartered in San Francisco. During his time at the company, and continuing for two years afterward, Patel engaged in a scheme to steal from his former employer. In 2014, the company’s Corporate Controller authorized Patel to make a single purchase with the company’s corporate credit card for a company marketing event. Beginning around March 2015, however, Patel started making additional unauthorized purchases. As alleged in the indictment, Patel used the corporate card to make a number of fraudulent purchases, including roundtrip international airline tickets to Milan, Italy, and high-end Air Jordan and Yeezy footwear. Patel’s unauthorized purchases allegedly continued until about August 2018—years after he left the company in 2016. According to information presented to the court at Patel’s initial appearance, the proceeds from Patel’s fraudulent scheme totaled more than $350,000.
The indictment, filed on January 9, 2020, charges Patel with two counts of mail fraud, in violation of 18 U.S.C. § 1341.
Patel was arrested in Munster, Ind. on January 30, 2020, and made his initial federal court appearance on February 14, 2018, in San Francisco. Patel was released on $100,000 bond. Patel’s next appearance is scheduled for March 31, 2020, before the Honorable William Alsup, United States District Judge.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Patel faces a maximum sentence of 20 years in prison and a fine of $250,000, plus restitution, for each count of mail fraud. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Abraham Fine is prosecuting the case with the assistance Margoth Turcios. The prosecution is the result of an investigation by the United States Secret Service.
Bay Area Resident Pleads Guilty to Wire Fraud and Embezzlement from Employee Pension PlanRead the Press Release
SAN FRANCISCO – William Ace Remas pleaded guilty in federal court in San Francisco to wire fraud and embezzlement charges related to the misappropriation of funds from an ERISA pension plan over which he presided as trustee, announced United States Attorney David L. Anderson and U.S. Department of Labor, Employee Benefits Security Administration, San Francisco Regional Director Klaus Placke. The guilty plea was accepted by the Honorable Vince Chhabria, U.S. District Judge.
A federal grand jury indicted Remas, 79, of Larkspur, Calif., on April 30, 2019. Remas was charged with four counts of wire fraud, in violation of 18 U.S.C. § 1343, and two counts of theft or embezzlement from an employee pension benefit plan, in violation of 18 U.S.C. § 664. Remas pled guilty to all counts.
According to the indictment, in 1994, Remas formed a pension plan for the employees of his companies, and as the sole trustee, Remas had the ability to disburse funds from the plan accounts. The indictment alleges that, between approximately January 2013 and April 2016, Remas unlawfully transferred plan funds totaling $550,542.88—nearly all of the assets held in the plan accounts—to his personal bank account. The indictment further alleges that Remas made these transfers without the knowledge of the plan participants and that he concealed his actions by, among other things, failing to inform plan participants that he had fraudulently initiated payments from the plan to himself.
Judge Chhabria scheduled a status conference regarding Remas’s sentencing for April 21, 2020. The maximum statutory penalty for each wire fraud count is 20 years in prison and a fine of $250,000, plus restitution. The maximum statutory penalty for each theft or embezzlement count is five years in prison and a fine of $250,000, plus restitution. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorneys Jason Kleinwaks and Michael Rodriguez are prosecuting the case with the assistance of Morgan Byrne. The prosecution is the result of an investigation by the U.S. Department of Labor, Employee Benefits Security Administration.
Three Associates of Nuestra Familia Prison Gang Plead Guilty to Federal RICO ConspiracyRead the Press Release
SAN JOSE – Johnny Magdaleno, a/k/a Soldier Boy, Rodney Luis Romero, a/k/a Speedy, and Carlos Cervantes, a/k/a Lil Huero, a/k/a Doug, pleaded guilty today to racketeering conspiracy charges for their respective roles as associates of the Nuestra Familia prison gang, announced United States Attorney David L. Anderson and John F. Bennett, Special Agent in Charge of the Federal Bureau of Investigation’s San Francisco Field Division. The guilty pleas were accepted by the Honorable Beth L. Freeman, United States District Judge.
According to the plea agreements, between December 2, 2012, and April 14, 2014, Magdaleno, 32, Romero, 35, and Cervantes, 31, were members of the Nuestra Familia/Salinas Norteños enterprise (the “Enterprise”). The Enterprise consisted of members and associates of the Nuestra Familia prison gang as well as Norteño street gangs in Salinas, Calif., and the surrounding areas. Members and associates of the Enterprise agreed to commit crimes such as murder, narcotics trafficking, and other acts of violence through a pattern of racketeering activity. Norteño gang members pledge their allegiance and loyalty to Nuestra Familia and are instructed on its rules, rituals, and obligations. Gang rules and discipline are maintained by assaulting and threatening 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 Norteños work together to maintain the structure and follow the rules of the Enterprise.
In their plea agreements, Magdaleno, Romero, and Cervantes admit to participating in the distribution of narcotics to other inmates at Monterey County Jail. The plea agreements also describe the roles of the defendants in “removals” as a means of violently enforcing the most important of the gang’s rules while they were in the jail. The term “removal” refers to a violent attack 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 without weapons. The purpose of the subsequent beating is to inflict upon the victim maximum damage while giving the hitters time to wash themselves and get rid of weapons.
Magdaleno admitted that he orchestrated four removals of victims from housing units of the Monterey County Jail and directly participated in two of those removals as the hitter. For example, Magdaleno admitted that he orchestrated and participated as the hitter in the December 2, 2012, removal of a victim from the jail. Magdaleno admitted that he stabbed the victim in the chest and back over 20 times. Magdaleno acknowledged that immediately after the victim was stabbed, two bombers began punching and kicking the victim to allow Magdaleno to escape being caught by guards with the stabbing weapon. Magdaleno also admitted that he orchestrated and participated as the hitter in the February 25, 2013, removal of a victim from the jail. Magdaleno admitted that he gave the victim marijuana to use so that he would be more vulnerable and let his guard down; and after doing so, Magdaleno stabbed the victim in the head with a shank. Immediately after the victim was stabbed, three bombers began punching and kicking the victim to allow Magdaleno to escape being caught by guards with the stabbing weapon. Magdaleno admitted that after he disposed of the shank, he joined the other bombers in beating the victim.
Romero admitted that he approved the February 25, 2013, removal of a victim from one of the housing units of the Monterey County Jail. Romero admitted that during the removal, the hitter stabbed the victim in the head, and immediately thereafter three bombers began to punch and kick the victim to inflict the maximum damage possible and to allow the hitter to escape without being caught by guards with the stabbing weapon. Romero also admitted to helping plan two other removals on April 29 and October 23, 2013. Romero admitted that he relayed the leadership’s approval for the removals, which involved a hitter stabbing the April 29 victim in the head with a metal shank and a hitter stabbing the October 23 victim in the neck with a weapon made out of plexiglass. In both removals, bombers punched and kicked the victim to inflict the maximum damage possible and to allow the hitters to escape without being caught by guards with the stabbing weapons.
Cervantes admitted that he participated in the April 29, 2013, removal of a victim from one of the housing units at the Monterey County Jail. Cervantes admitted that he was the hitter for the removal and stabbed the victim in the head. Cervantes acknowledged that immediately after the victim was stabbed, at least four bombers began punching and kicking the victim to allow Cervantes to escape being caught by guards with the stabbing weapon. Cervantes also admitted that he was a bomber in the February 25, 2013, removal of a victim, and that he punched and kicked the victim to inflict the maximum damage possible and to allow the hitter to escape.
On September 27, 2018, a federal grand jury indicted Magdaleno, Romero, Cervantes, and several other defendants with racketeering conspiracy, in violation of 18 U.S.C. § 1962(d). Magdaleno, Romero, and Cervantes were also charged with conspiracy to commit murder in aid of racketeering, in violation of 18 U.S.C. § 1959(a)(5), and conspiracy to commit assault with a dangerous weapon in aid of racketeering, in violation of 18 U.S.C. § 1959(a)(6). Romero was also 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 aid of racketeering, in violation of 18 U.S.C. § 1959(a)(3). All three defendants pleaded guilty to the racketeering conspiracy charge, wherein they admitted that murder was an object of the conspiracy. If they comply with their plea agreements, the additional charges will be dismissed at sentencing.
Judge Freeman scheduled the sentencing hearing for Cervantes for May 19, 2020; and the sentencing hearings for Magdaleno and Romero for June 23, 2020. Pursuant to the terms of their plea agreements, Magdaleno has agreed that a reasonable and appropriate disposition of his case would include a term of imprisonment of 30 years to run concurrently with sentences imposed in connection with a number of state court convictions; Romero has agreed that a reasonable and appropriate disposition of his case would include a term of imprisonment of 18 years; and Cervantes has agreed that a reasonable and appropriate disposition of his case would include a term of imprisonment of 10 years. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The following additional defendants have pleaded guilty to crimes as part of the criminal Enterprise and have been sentenced or are scheduled to be sentenced in the case:
Name Charges Sentence Alberto Moreno, a/k/a Doughboy Racketeering Conspiracy, 18 U.S.C. § 1962(d) Sentenced to seven years in prison Michael James Rice a/k/a Redwood Racketeering Conspiracy, 18 U.S.C. § 1962(d) Scheduled for March 3, 2020 Jeffrey Lopez, a/k/a T-Bone Racketeering Conspiracy, 18 U.S.C. § 1962(d) Scheduled for March 17, 2020 Juan Alvarez, a/k/a Chucky Racketeering Conspiracy, 18 U.S.C. § 1962(d) Scheduled for March 31, 2020 Ramon Montoya, a/k/a Little Ray Racketeering Conspiracy, 18 U.S.C. § 1962(d) Scheduled for March 31, 2020 Erik Lopez, a/k/a Bimbo Racketeering Conspiracy, 18 U.S.C. § 1962(d) Scheduled for April 7, 2020 Alejo Alex Alegre, IV, a/k/a Chino Racketeering Conspiracy, 18 U.S.C. § 1962(d) Scheduled for May 5, 2020Assistant U.S. Attorneys Claudia A. 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 Resident Indicted on Sex Tourism Related ChargesRead the Press Release
SAN FRANCISCO – Paul Marshall Bodner was arrested on charges related to sex tourism in Vietnam, announced United States Attorney David L. Anderson and Homeland Security Investigations (HSI) Special Agent in Charge Tatum King. In an indictment filed on January 30, 2020, and unsealed yesterday, a federal grand jury charged Bodner with repeatedly traveling to Vietnam in order to engage in illicit sexual conduct.
According to the indictment, Bodner, 64, of San Francisco, Calif., traveled to Vietnam during the period from July 2015 through August 2016, where he engaged in illicit sexual conduct. The indictment also states that Bodner traveled to Vietnam in March and July 2016 for the purpose of engaging in illicit sexual conduct. According to information presented to the court at his initial appearance on February 13, 2020, Bodner met Vietnamese boys as young as 11 or 12 years old and engaged in sex acts with them at a hotel located in Ho Chi Minh City when he traveled to Vietnam.
The indictment charges Bodner with three counts of travel with intent to engage in illicit sexual conduct, in violation of 18 U.S.C. § 2423(b); and one count of engaging in illicit sexual conduct in foreign places, in violation of 18 U.S.C. § 2423(c).
Bodner was arraigned in federal court before the Honorable Joseph C. Spero, U.S. Magistrate Judge. Judge Spero scheduled a hearing for today, February 14, 2020, to determine Bodner’s detention status pending trial.
Anyone with information about Bodner or his alleged sexual interest in children should contact the HSI Tip Line at 1-866-DHS-2-ICE and ask to be directed to the case agent.
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 charges in the indictment, the defendant would face for each count a maximum sentence of 30 years imprisonment, a life term of supervised release, and a fine of $250,000, plus 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.
Assistant U.S. Attorney Lina Peng is prosecuting the case with the assistance of Morgan Byrne. The prosecution is the result of an investigation by HSI.
San Francisco Resident Indicted for Possession of A Firearm and Ammunition as A Felon with Three Prior Violent OffensesRead the Press Release
SAN FRANCISCO - A federal grand jury in San Francisco indicted Raya Man with possessing a firearm and ammunition as a convicted felon, announced United States Attorney David L. Anderson and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) San Francisco Special Agent in Charge Rayfield Roundtree. Man is charged with having previously been convicted of three violent felonies; therefore, if convicted, Man faces a mandatory minimum sentence of 15 years in prison.
Details about the incident leading to the charge appear in an affidavit from a Task Force Officer with the ATF filed January 28, 2020. According to the affidavit, on September 6, 2019, Man, 40, of San Francisco, engaged in a verbal argument with the proprietor of a nearby bar located in the Tenderloin neighborhood. Man allegedly walked away from the argument saying words to the effect of, “I will show you what a gangster is.” When Man returned a short time later, he allegedly followed the proprietor into his bar, drew a pistol, and pointed it at the proprietor while saying, “Would you believe I could kill you now?” The affidavit further alleges Man left the bar, immediately entered the single-occupancy restroom of a nearby bar, and exited the restroom seconds later. When Man exited the restroom, San Francisco Police Department officers detained him. Officers located a .45 caliber pistol loaded with seven live rounds of ammunition in the restroom’s wastebasket. In addition, the affidavit alleges Man was convicted of three violent felonies prior to September 6, 2019.
Man is charged with being in possession of a firearm and ammunition with three prior violent felony convictions, in violation of 18 U.S.C. §§ 922(g)(1) and 924(e). Man has remained in custody since his arrest on September 6, 2019. He made his initial appearance in federal court in San Francisco on February 4, 2020. His next scheduled appearance is at 10:30 a.m., on February 20, 2020, for a status conference before U.S. Magistrate Judge Joseph C. Spero.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Man faces a maximum sentence of life 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.
This case is part of the Federal Initiative for the Tenderloin, a multi-agency effort focusing on fighting crime in the Tenderloin neighborhood of San Francisco.
Assistant U.S. Attorney Richard Ewenstein is prosecuting the case with the assistance of Morgan Byrne. The prosecution is the result of an investigation by the ATF and the San Francisco Police Department.
Chinese Telecommunications Conglomerate Huawei and Subsidiaries Charged in Racketeering Conspiracy and Conspiracy to Steal Trade SecretsRead the Press Release
A superseding indictment was returned yesterday in federal court in Brooklyn, New York, charging Huawei Technologies Co. Ltd. (Huawei), the world’s largest telecommunications equipment manufacturer, and two U.S. subsidiaries with conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act (RICO).
Brian A. Benczkowski, Assistant Attorney General of the Justice Department’s Criminal Division; John C. Demers, Assistant Attorney General of the Justice Department’s National Security Division; Richard P. Donoghue, U.S. Attorney for the Eastern District of New York and Christopher A. Wray, Director, FBI, announced the charges.
The 16-count superseding indictment also adds a charge of conspiracy to steal trade secrets stemming from the China-based company’s alleged long-running practice of using fraud and deception to misappropriate sophisticated technology from U.S. counterparts.
The indicted defendants include Huawei and four official and unofficial subsidiaries — Huawei Device Co. Ltd. (Huawei Device), Huawei Device USA Inc. (Huawei USA), Futurewei Technologies Inc. (Futurewei) and Skycom Tech Co. Ltd. (Skycom) — as well as Huawei’s Chief Financial Officer (CFO) Wanzhou Meng (Meng). The new superseding indictment also contains the charges from the prior superseding indictment, which was unsealed in January 2019.
As revealed by the government’s independent investigation and review of court filings, the new charges in this case relate to the alleged decades-long efforts by Huawei, and several of its subsidiaries, both in the U.S. and in the People’s Republic of China, to misappropriate intellectual property, including from six U.S. technology companies, in an effort to grow and operate Huawei’s business. The misappropriated intellectual property included trade secret information and copyrighted works, such as source code and user manuals for internet routers, antenna technology and robot testing technology. Huawei, Huawei USA and Futurewei agreed to reinvest the proceeds of this alleged racketeering activity in Huawei’s worldwide business, including in the United States.
The means and methods of the alleged misappropriation included entering into confidentiality agreements with the owners of the intellectual property and then violating the terms of the agreements by misappropriating the intellectual property for the defendants’ own commercial use, recruiting employees of other companies and directing them to misappropriate their former employers’ intellectual property, and using proxies such as professors working at research institutions to obtain and provide the technology to the defendants. As part of the scheme, Huawei allegedly launched a policy instituting a bonus program to reward employees who obtained confidential information from competitors. The policy made clear that employees who provided valuable information were to be financially rewarded.
Huawei’s efforts to steal trade secrets and other sophisticated U.S. technology were successful. Through the methods of deception described above, the defendants obtained nonpublic intellectual property relating to internet router source code, cellular antenna technology and robotics. As a consequence of its campaign to steal this technology and intellectual property, Huawei was able to drastically cut its research and development costs and associated delays, giving the company a significant and unfair competitive advantage.
When confronted with evidence of wrongdoing, the defendants allegedly made repeated misstatements to U.S. officials, including FBI agents and representatives from the U.S. House Permanent Select Committee on Intelligence, regarding their efforts to misappropriate trade secrets. Similarly, the defendants engaged in obstructive conduct to minimize litigation risk and the potential for criminal investigations, including the very investigation that led to this prosecution.
The superseding indictment also includes new allegations about Huawei and its subsidiaries’ involvement in business and technology projects in countries subject to U.S., E.U. and/or U.N. sanctions, such as Iran and North Korea – as well as the company’s efforts to conceal the full scope of that involvement. The defendants’ activities, which included arranging for shipment of Huawei goods and services to end users in sanctioned countries, were typically conducted through local affiliates in the sanctioned countries. Reflecting the inherent sensitivity of conducting business in jurisdictions subject to sanctions, internal Huawei documents allegedly referred to such jurisdictions with code names. For example, the code “A2” referred to Iran, and “A9” referred to North Korea.
Huawei employees also allegedly lied about Huawei’s relationship to Skycom, falsely asserting it was not a subsidiary of Huawei. The company further claimed that Huawei had only limited operations in Iran and that Huawei did not violate U.S. or other laws or regulations related to Iran. In fact, the indictment alleges Skycom was Huawei’s unofficial subsidiary that, among other services, assisted the Government of Iran in performing domestic surveillance, including during the demonstrations in Tehran in 2009.
The charges in the superseding indictment are allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The government’s investigation is ongoing. Individuals with knowledge of misconduct by Huawei, its subsidiaries, employees or agents should contact the FBI’s New York Field Office at 1-800-CALL-FBI.
The FBI’s New York Field Office, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations’ (HSI) New York Field Office, U.S. Department of Commerce Office of Export Enforcement’s (OEE) New York Field Office and the Defense Criminal Investigative Service’s (DCIS) Southwest and Northeast Field Offices are jointly conducting the investigation. Agents from the FBI, HSI and OEE offices in Dallas provided significant support and assistance. The government’s case is being handled by the U.S. Attorney’s Office for the Eastern District of New York, the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) and the National Security Division’s Counterintelligence and Export Control Section (CES).
Assistant U.S. Attorneys Alexander A. Solomon, Julia Nestor, David K. Kessler and Sarah Evans, MLARS Trial Attorneys Laura Billings and Christian Nauvel and CES Trial Attorneys Thea D. R. Kendler and David Lim are in charge of the prosecution, with assistance provided by Assistant U.S. Attorney Brendan G. King of the Civil Division of the U.S. Attorney’s Office for the Eastern District of New York and Trial Attorneys Margaret O’Malley and John Riesenberg of the Criminal Division’s Office of International Affairs. Additional Criminal Division and National Security Division Trial Attorneys and Assistant U.S. Attorneys within U.S. Attorney’s Offices for the Northern District of Texas, the Northern District of Illinois, the Eastern District of Texas, the Western District of Washington and the Northern District of California have provided valuable assistance with various aspects of this investigation.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Part Owner of International Trading Business Sentenced to Three Years in Prison for Tax FraudRead the Press Release
A Saratoga, California, businessman was sentenced to 36 months in prison today, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney David L. Anderson for the Northern District of California.
“The integrity of our tax system relies on all taxpayers filing accurate tax returns and dealing honestly with the Internal Revenue Service,” said Principal Deputy Assistant Attorney General Zuckerman. “Those who commit tax crimes by cheating on their returns and dealing falsely with the IRS expose themselves to criminal prosecution and prison.”
“The defendant’s luxury residence and vehicle reflect his true income, not the income he falsely underreported to the IRS,” said Kareem Carter, Special Agent in Charge IRS Criminal Investigation. “His crime was compounded by lying to the IRS when he was audited. Today’s sentence sends a clear message that those who intentionally conceal income and evade taxes will be held accountable for their crimes.”
According to the evidence presented at trial and information provided to the Court, Jyh-Chau “Henry” Horng was a minority owner of a home-based international trading business that sold scrap metal to China while that country was undergoing its economic and infrastructure boom. From 1999 through 2008, Horng failed to report on his tax returns millions of dollars in profits from the business. Horng and his wife used the business profits to buy residential properties in New York City and the San Francisco Bay area, invest over $5 million in a Milpitas shopping center, and purchase a Bentley. During an IRS audit of the returns, Horng made false statements to the Internal Revenue Service (IRS), including that neither he nor his wife had any foreign bank accounts. After the audit, Horng failed to file any tax returns from 2009 through 2018.
Horng was convicted by a jury in June 2018 of filing false tax returns and making false statements to an IRS agent while under audit. After the jury verdict, Horng also pleaded guilty to lying on a bank mortgage application.
In addition to the term of imprisonment, U.S. District Judge Beth Labson Freeman ordered Horng to serve three years of supervised release and to pay $1.1 million in restitution to the United States.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Anderson thanked special agents and a former special agent of IRS-Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Michael Pitman and Trial Attorney Christopher Magnani of the Tax Division, who prosecuted the case, and Paralegal Specialist Jonathan Deville for his assistance during the trial.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
San Jose Man Sentenced to 102 Months for Conspiracy to Distribute Drugs and Other CrimesRead the Press Release
SAN FRANCISCO – Efrain Torres was sentenced to 102 months in prison for his role in an extensive Bay Area drug trafficking network, announced United States Attorney David L. Anderson and Drug Enforcement Administration Special Agent in Charge Daniel C. Comeaux. The sentence was handed down by the Honorable William H. Orrick, III, U.S. District Judge.
Torres, 49, of San Jose, Calif., pleaded guilty on November 21, 2019. According to the plea agreement, Torres admitted that from January 2017 to April 2017, he conspired with others to distribute heroin, cocaine, and methamphetamine throughout the Bay Area. Torres admitted that on April 13, 2017, he was directed to deliver four kilograms of methamphetamine to a co-conspirator. Torres admitted that he loaded the methamphetamine into his car and started driving north from San Jose to San Francisco. Torres saw police lights behind him, sped away in an attempt to escape the police, and crashed on the highway. Torres admitted that he fled, but left the drugs behind at the scene of the crash, where they were recovered by the police.
Torres further admitted that he is a citizen of Mexico, who was deported from the United States to Mexico in January 2011 and again in September 2016. Following his second removal to Mexico, Torres admitted that he re-entered the United States without permission. Torres also admitted to possession of a 9mm handgun while he was in the United States illegally.
A federal grand jury originally indicted Torres on May 4, 2017. On November 19, 2019, the government filed a superseding information, charging Torres with one count of conspiracy to distribute and possess with intent to distribute 50 grams and more of methamphetamine, in violation of 21 U.S.C. §§ 846, 841(a)(1) and (b)(1)(B)(viii); one count of being found in the United States following removal, in violation of 8 U.S.C. § 1326(a) and (b)(1); and one count of alien in possession of a firearm and ammunition, in violation of 18 U.S.C. § 922(g)(5)(A). After waiving his right to prosecution by indictment, Torres consented to prosecution by information and then pleaded guilty on all counts.
In addition to the prison term, Judge Orrick sentenced Torres to a four-year period of supervised release.
Thirteen other defendants have pleaded guilty and received significant sentences in this case:
Name Charges Sentence Xavier Eriberto Sanchez Hernandez, a/k/a Xavi Possession with intent to distribute methamphetamine, 21 U.S.C. §§ 841(a)(1) and (b)(1)(B)(iii) Sentenced to 60 months in prison Henry Javier Lopez Alverto, a/k/a Waza Conspiracy to distribute and possess with intent to distribute methamphetamine, cocaine, and heroin, 21 U.S.C. §§ 846, 841(a)(1) and (b)(1)(A) Sentenced to 36 months in prison Jesus Chavez Espinoza Conspiracy to distribute and possess with intent to distribute methamphetamine, cocaine, and heroin, 21 U.S.C. §§ 846, 841(a)(1) and (b)(1)(A) Sentenced to 120 months in prison Felix Lopez-Galindo, a/k/a FantaPossession with intent to distribute cocaine, 21 U.S.C. §§ 841(a)(1) and (b)(1)(B)(iii)(II)
Conspiracy to distribute and possess with intent to distribute methamphetamine, cocaine, and heroin, 21 U.S.C. §§ 846, 841(a)(1) and (b)(1)(A)
Sentenced to 120 months in prison Pedro Lopez-Galindo, a/k/a ZorroPossession with intent to distribute cocaine, 21 U.S.C. §§ 841(a)(1) and (b)(1)(B)(iii)(II)
Conspiracy to distribute and possess with intent to distribute methamphetamine, cocaine, and heroin, 21 U.S.C. §§ 846, 841(a)(1) and (b)(1)(A)
Sentenced to 120 months in prison Ismael Rodriguez Loreto Conspiracy to distribute and possess with intent to distribute methamphetamine, cocaine, and heroin, 21 U.S.C. §§ 846, 841(a)(1) and (b)(1)(A) Sentenced to 42 months in prison Rafael Romero-Rodriguez Possession with intent to distribute cocaine, 21 U.S.C. §§ 841(a)(1) and (b)(1)(B)(iii)(II) Sentenced to 60 months in prison Juan Jose Flores, Jr., a/k/a Popeye Possession with intent to distribute cocaine, 21 U.S.C. §§ 841(a)(1) and (b)(1)(B)(iii)(II) Sentenced to 48 months in prison Jairo Puerto, a/k/a Luis Antonio Rodriguez ColonConspiracy to distribute and possess with intent to distribute methamphetamine, cocaine, and heroin, 21 U.S.C. §§ 846, 841(a)(1) and (b)(1)(A)
Sentenced to 41 months in prison Yader Rubi Morales, a/k/a SpeedyPossession with intent to distribute methamphetamine, 21 U.S.C. §§ 846, 841(a)(1) and (b)(1)(C)
Felon in possession of a firearm and ammunition, 18 U.S.C. § 922(g)(1)(A)
Sentenced to 65 months in prison Julio Covarrubias, a/k/a GalloConspiracy to distribute and possess with intent to distribute methamphetamine, cocaine, and heroin, 21 U.S.C. §§ 846, 841(a)(1) and (b)(1)(A)
Possession with intent to distribute methamphetamine, 21 U.S.C. § 841(a)(1) and (b)(1)(B)(viii) Sentenced to 135 months in prison Robert Zander Seaton Possession with intent to distribute methamphetamine, 21 U.S.C. §§ 841(a)(1) and (b)(1)(B)(viii)Sentenced to 60 months in prison to be served concurrently with a 120 month sentence in another case
Larry Amador Illegal use of communication facility, 21 U.S.C. § 843(b) Sentenced to 41 months in prisonAssistant U.S. Attorneys Sheila A.G. Armbrust and Sloan Heffron are prosecuting the case with the assistance of Linda Love and Andy Ding. The prosecution is the result of an investigation by the Drug Enforcement Administration, with assistance from the San Francisco Police Department, the Daly City Police Department, the Long Beach Police Department, the Milpitas Police Department, the South San Francisco Police Department, the San Jose Police Department, and the California Highway Patrol, as well as the United States Attorney’s Office for the Southern District of Texas, the Bureau of Alcohol, Tobacco, Firearms, and Explosives (Laredo, Texas Field Office), and the Laredo Texas Police Department. This case is the product of an extensive investigation by the Organized Crime Drug Enforcement Task Force, a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state, and local law enforcement agencies.
Escapee from County Courthouse Sentenced to 51 Months for Being A Felon in Possession of A FirearmRead the Press Release
SAN JOSE – John Penn Bivins, Jr. was sentenced to 51 months in prison for being a felon in possession of a firearm, announced United States Attorney David L. Anderson and United States Marshal Donald M. O’Keefe. The sentence was handed down by the Honorable Lucy H. Koh, U.S. District Judge.
Bivins, 49, formerly of East Palo Alto, Calif., pleaded guilty to the charge on November 6, 2019. According to his plea agreement, Bivins admitted that, on November 26, 2017, he possessed a Smith & Wesson 9mm pistol loaded with 15 rounds of ammunition. Bivins admitted he possessed the weapon and ammunition at the Fairmont Inn in San Leandro, Calif., where law enforcement officers from the U.S. Marshals Service led task force encountered him. Bivins also acknowledged that the pistol he possessed had been stolen and that when law enforcement officers apprehended him, he had escaped confinement for robbery charges in Santa Clara County 20 days earlier. Bivins agreed that he thus possessed the pistol in connection with another felony offense.
On November 6, 2019, the government filed a superseding information, charging Bivins with being a felon in possession of a firearm and ammunition, in violation of 18 U.S.C. § 922(g)(1). After waiving his right to prosecution by indictment, Bivins consented to prosecution by information and then pleaded guilty to the charge.
The defendant is currently in state custody, and his sentence will run concurrently with any anticipated state court sentence arising out of the escape charge. In addition to the prison term, Judge Koh sentenced Bivins to a three-year period of supervised release.
Assistant U.S. Attorney Chinhayi Coleman Cadet is prosecuting the case with the assistance of Jessica Leung. The prosecution is the result of an investigation by the United States Marshals Service, Santa Clara County Sheriff’s Office, California Highway Patrol, Vallejo Police Department, and in cooperation with the Santa Clara County District Attorney’s Office.
Hayward Resident Sentenced to More Than Ten Years for Drug TraffickingRead the Press Release
OAKLAND – Joseph Daniel Sandoval was sentenced to 130 months in prison for possession with intent to distribute methamphetamine, announced United States Attorney David L. Anderson and Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Rayfield Roundtree. The sentence was handed down by the Honorable Jeffrey S. White, U.S. District Judge.
Sandoval, 34, of Hayward, Calif., pleaded guilty to the charge on November 5, 2019. According to the plea agreement, Sandoval admitted to possessing 917.6 grams (approximately two pounds) of methamphetamine with the intent to distribute the drugs. Sandoval also admitted to possessing items related to drug trafficking, including $3,200 cash, a digital scale, and two boxes of clear plastic baggies.
A criminal complaint was filed on August 26, 2019, charging Sandoval with possession with intent to distribute methamphetamine, in violation of 21 U.S.C. § 841(a)(1). An information was later filed on September 12, 2019, charging Sandoval with possession with intent to distribute methamphetamine, in violation of 21 U.S.C. §§ 841(a)(1) and (b)(1)(C). The defendant pleaded guilty to the charge in the information.
According to the complaint, the Gang Suppression Unit of the Alameda County Sheriff’s Office began investigating Sandoval for suspected drug trafficking in June 2019. At the time, Sandoval had two outstanding warrants for his arrest. On July 31, 2019, the Gang Suppression Unit traced Sandoval to a room at the Quality Inn in Hayward, California, where he was arrested. Law enforcement seized 917.6 grams of methamphetamine, one digital scale, two boxes of clear plastic baggies, $3,200 cash, and one taser in connection with the arrest.
In addition to the prison term, Judge White sentenced Sandoval to a three-year period of supervised release to begin at the conclusion of his prison term. Sandoval will begin serving his federal sentence in April 2020 after he finishes serving a separate, unrelated sentence in Santa Clara County.
Special Assistant U.S. Attorney Andrew Briggs is prosecuting the case with the assistance of Kay Konopaske and Katie Turner. The prosecution is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Alameda County Sheriff’s Office.
Justice Department Settles with Child Care Providers to Protect the Rights of Children with DiabetesRead the Press Release
The Justice Department entered into two settlement agreements today to resolve allegations that two child care providers violated the Americans with Disabilities Act (ADA) by failing to reasonably modify its program to accommodate the needs of young children with Type 1 diabetes and disenrolling them on the basis of their disabilities. One agreement is with Lil’ Einstein’s Learning Academy, which operates child care facilities in Bear and Newark, Delaware and Chesapeake City and Elkton, Maryland. The second agreement is with the Community First School Corporation, which operates a child care facility in Sunnyvale, California. These settlements resolve allegations that two child care centers discriminated against children and their parents on the basis of their children’s disabilities shortly after each child was diagnosed with Type 1 diabetes.
“No child with a disability should be unlawfully denied access to a child care center on the basis of his or her disability. Simply put, no parent should have to worry that his or her child will be discriminated against in this way,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “These agreements reflect the Department’s continued commitment to ensuring that children with disabilities enjoy equal access to child care services.”
“Given the critical role that dependable child care plays in a parent’s ability to work or go to school, we are proud that this settlement will ease the struggle to find quality child care for families of children with disabilities,” said United States Attorney David C. Weiss for the District of Delaware.
“Parents who rely on child care need to know that their children will receive the care and support they need—particularly when their children have disabilities,” said United States Attorney David L. Anderson for the Northern District of California. “Child care providers need to meet their responsibilities to these kids and comply with the ADA. We appreciate the efforts of the Civil Rights Division working with our office to address these issues in our district.”
The complaint underlying the Lil’ Einstein’s Learning Academy matter alleged that a 16-month old child, who had been enrolled in the program since she was six months old, was disenrolled on the basis of her disability. Upon their daughter’s diagnosis with Type 1 diabetes, the child’s parents requested that Lil’ Einstein’s Learning Academy staff provide routine diabetes care, including supervision of her continuous glucose monitor (CGM) and insulin administration through her insulin pump. The complaint further alleged that Lil’ Einstein’s Learning Academy refused to administer insulin to their daughter through the pump, refused to permit their daughter’s personal, licensed nurse to accompany her at the day care to provide the needed diabetes care, and disenrolled their daughter on the basis of her disability.
Similarly, the complaint underlying the Community First School agreement alleged that the child care center discriminated against a child – then two years-old – and her parents on the basis of her disability. The toddler began attending Community First School before she was diagnosed with Type 1 diabetes. Upon her diagnosis, she was prescribed a CGM that provided electronic blood glucose readings on an iPhone application. The CGM comes with a remote device that picks up the CGM readings and then transmits it to any smartphone connected through an app. Her parents requested that Community First staff keep an iPhone or a small remote transmitter provided by the family near their daughter so that her CGM could transmit readings. If the CGM triggered an alarm signifying a low blood glucose level, the parents asked that a staff member provide their daughter juice. The complaint further alleged that Community First School denied the parents’ requests, and the parents had no choice but to disenroll their daughter.
In each case, the parents had to secure new child care settings for their children, resulting in great stress for both sets of parents, who depended upon the providers to properly care for their children while they worked to support their families.
Title III of the ADA prohibits discrimination on the basis of disability by public accommodations, including child care providers. Under the ADA, child care providers must make reasonable modifications to their policies, practices or procedures when necessary to provide equal access to a child with a disability unless they can demonstrate that such modifications amount to a fundamental alteration to the nature of their services.
Under the agreements, Lil’ Einstein’s Learning Academy agreed to pay $25,000 in compensatory damages to the aggrieved child and her parents and $2,500 in civil penalties, and Community First School agreed to pay $15,000 to the aggrieved child and her parents and $2,500 in civil penalties. Both child care centers also agreed to evaluate each request for reasonable modifications on an individualized basis, using objective evidence and current medical standards, and, where appropriate, to train child care staff members to assist with routine diabetes care tasks, such as monitoring a continuous glucose monitor, administering Glucagon in emergency situations, and administrating insulin by pen, syringe, or pump.
2020 marks the 30th Anniversary of the Americans with Disabilities Act. The Justice Department plays a central role in advancing the nation’s goal of equal opportunity, full participation, independent living, and economic self-sufficiency for people with disabilities. The Justice Department will continue to use its enforcement and technical assistance tools to eliminate unlawful discrimination against individuals with disabilities.
People interested in finding out more about the ADA or these settlement agreements can call the toll-free ADA Information Line at 800-514-0301 or 800-514-0383 (TDD), or access the ADA website at http://www.ada.gov.
South Bay Man Charged in Methamphetamine Distribution SchemeRead the Press Release
SAN FRANCISCO – Jesus Moises Rochin-Huerta is charged in a criminal complaint with possession with intent to distribute methamphetamine, announced United States Attorney David L. Anderson, Special Agent in Charge, Homeland Security Investigations Tatum King and Drug Enforcement Administration Special Agent in Charge Daniel C. Comeaux.
An affidavit filed in the case by an agent of the Homeland Security Investigations (HSI) alleges that Rochin-Huerta was caught with the drugs yesterday while driving on Highway 880 in San Jose. According to the affidavit, Rochin-Huerta’s car had no front license plate and tinted front windows when a California Highway Patrol (CHP) officer pulled him over for the traffic violations. The CHP officer allegedly observed that Rochin-Huerta was acting nervously and was in possession of two cell phones and so decided to conduct an open-air sniff of the defendant’s car with a K-9. After the dog gave a positive alert, the CHP officer found two black duffle bags containing drugs in the trunk of the car. Specifically, in the black bags were 58 packages of a white crystalline substance that was further wrapped in plastic, vacuum-sealed bags. The white substance tested positive for methamphetamine. Rochin-Huerta was arrested as a result of the traffic stop.
According to the affidavit, the combined weight of the substance in the trunk of Rochin-Huerta’s car amounts to approximately 66.4 pounds having an approximate wholesale value of between $72, 000 and $81,000.
Rochin-Huerta is charged with possession with intent to distribute and distribution of 500 grams or more of a mixture and substance containing methamphetamine in violation of 21 U.S.C. §§ 841(a)(1) and (b)(1)(A)(viii).
Rochin-Huerta will make his initial federal court appearance at 1:30 p.m., on January 31, 2020, before U.S. Magistrate Judge Nathanael M. Cousins.
If convicted, Rochin-Huerta faces a minimum statutory penalty of ten years imprisonment and a maximum statutory penalty of up to life in prison. A term of supervised release, fines, forfeitures, and restitution also may be ordered, 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 complaint contains allegations only and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.
Assistant U.S. Attorney Sarah Griswold is prosecuting the case with the assistance of Jessica Leung. The prosecution is the result of an investigation by HSI with assistance from the DEA, Southern Alameda County Major Crimes Task Force, and California Highway Patrol.
Department of Justice, EPA and the State of California Clean Air Act Settlement with Kohler Co. will Reduce Emissions by 3,600 TonsRead the Press Release
Today, the Department of Justice, Environmental Protection Agency (EPA) and the state of California announced a settlement with Kohler Co. (Kohler) resolving alleged violations of the Clean Air Act and California law. Under the terms of the settlement, Kohler will retire unlawfully generated hydrocarbon (HC) and oxides of nitrogen (NOx) emission credits. Retirement of these credits will result in approximately 3,600 tons of HC and NOx emissions reductions. In addition, the company will pay a $20 million civil penalty.
The violations pertain to Kohler’s manufacture and sale of millions of small, nonroad, nonhandheld spark-ignition (small SI) engines that did not conform to the certification applications Kohler was required to submit to the EPA and the California Air Resources Board (CARB). More than 144,000 of the engines were also equipped with a fueling strategy designed to cheat emissions testing standards (commonly referred to as a “defeat device”). Small SI engines are used in lawn mowers, ride-on mowers, commercial landscaping equipment, and generators.
“Today’s settlement holds Kohler accountable for flouting federal law, and evens the playing field for others in the regulated community who invest in compliance programs designed to prevent illegal and harmful emissions to the air,” said Assistant Attorney General Jeffrey Bossert Clark of the Justice Department’s Environment and Natural Resources Division. “This settlement is the result of the Justice Department’s and the EPA’s aggressive investigation of actors who thwart the emissions testing regime, and recognizes that Kohler self-reported some violations and cooperated with the government’s investigation.”
“We applaud the significant results of the work done by the partnership of the DOJ, EPA and CARB in this case,” said U.S. Attorney David L. Anderson of the Northern District of California. “With this successful state and federal cooperation, we can now breathe a sigh of relief that our air quality is being protected. Once again, the results have proved that we all are safer, and we are all better off, when we work together.”
“Today’s settlement will reduce air pollutants by 3,600 tons and require Kohler to implement procedures to help ensure future compliance with environmental regulations,” said EPA Assistant Administrator for Enforcement and Compliance Assurance Susan Bodine. “The settlement also sends a clear message that EPA will investigate and hold responsible those who seek to illegally circumvent engine emission requirements.”
“One of EPA’s top priorities is preventing vehicle and engine manufacturers from selling products that circumvent emissions requirements,” said EPA Pacific Southwest Regional Administrator Mike Stoker. “Today’s precedent setting settlement sends an unequivocal message to all types of engine manufacturers—from manufacturers of heavy-duty highway engines to manufacturers of small nonroad engines like those at issue in this settlement—that EPA will vigorously investigate and bring companies into compliance to reduce pollution and protect public health.”
“Kohler voluntarily disclosed some of the violations, mitigated the emissions, and agreed to new procedures to ensure future compliance,” said CARB Executive Officer Richard W. Corey. “In addition, Kohler will be funding an innovative program to supply free ultra-clean solar-powered generators to low-income Californians who live in areas that are subject to more frequent utility power outages. The solar-powered generators are capable of running refrigerators or lights, helping ease the impacts of power outages to those affected.”
In December 2015, Kohler self-disclosed to EPA and the CARB that it had been using the wrong test cycle to test many of its small SI engines. EPA and CARB’s subsequent investigation revealed that millions of additional small SI engines were noncompliant.
Examples of additional noncompliance that was discovered include:
- Not fully complying with the test procedures Kohler certified to;
- Failing to comply with the applicable emission limits;
- Failing to age emission-related components for deterioration factor testing;
- Failing to disclose auxiliary emission control devices and adjustable parameters equipped on the engines;
- Making changes to production engines without amending the certification application covering those engines; and
- Failing to comply with the applicable production line testing requirements.
The defeat device Kohler developed and deployed on at least 144,000 electronic fuel-injected small SI engines significantly reduced NOx emissions during certification testing when compared to real-world operation (i.e., ran rich during certification testing but lean during in-use operation). The fueling strategy in the calibration was not disclosed in Kohler’s certification applications and Kohler was aware that the fueling strategy was designed to reduce NOx emissions during certification testing even though the certification results were not representative of real-world operation.
In addition to paying a $20 million civil penalty and retiring HC and NOx emission credits, Kohler has already taken the following steps to prevent future violations. The company has established an independent environmental regulatory compliance team, conducts annual compliance training for engine division employees, and maintains an employee code of conduct and an ethics helpline for employees to report noncompliance. Kohler will convene semiannual meetings with all engine division managers and regulatory personnel to discuss compliance with applicable regulatory requirements and the settlement. Kohler must also conduct annual audits and implement an emissions testing validation plan that includes third-party observation and emissions verification testing. Kohler estimates the compliance measures will cost approximately $3.7 million.
In a separate settlement agreement resolving California-only claims, Kohler will pay an additional $200,000 civil penalty and will fund a program that will supply $1.8 million worth of solar-battery generators to low-income residents in California that live in areas subject to public safety power shutoffs to mitigate wildfire risk.
The proposed settlements, lodged in the U.S. District Court for the Northern District of California, are subject to final court approval. The settlement among the United States, California and Kohler is also subject to a 30-day public comment period. Information on submitting comments is available at https://www.justice.gov/enrd/consent-decrees.
To learn more about this settlement, visit https://www.epa.gov/enforcement/kohler-co-clean-air-act-civil-settlement-information-sheet.
Members of the public can help protect our environment by identifying and reporting environmental violations. Learn more here: https://www.epa.gov/enforcement/report-environmental-violation-general-information.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Quebec Resident Pleads Guilty in Multi-Million Dollar Telemarketing SchemeRead the Press Release
SAN FRANCISCO – Athanasios Vouloukos pleaded guilty in federal court in San Francisco to conspiracy to commit mail fraud, announced United States Attorney David L. Anderson, U.S. Postal Inspection Service Inspector in Charge Rafael Nunez, and Internal Revenue Service, Criminal Investigation Special Agent in Charge Kareem Carter. The guilty plea was received by the Honorable Susan Illston, U.S. District Judge.
According to his plea agreement, Vouloukos, 47, of Ville St. Laurent, Quebec, Canada, admitted that he conspired with others in a telemarketing scheme to defraud small businesses in the United States. Vouloukos and others deceived thousands of small businesses into paying for a phony service to improve and enhance their online profile and presence. The phony service was variously described as, for example, “business listing optimization,” “business profile optimization,” or “online business listing optimization,” when in fact no such services were ever performed. Business were charged approximately $500 for the phony service.
As stated in the plea agreement, Vouloukos operated a calling center in Canada with his co-conspirator Nicholaos Menis. U.S. victims were cold-called from Canada and sent bogus invoices. According to the plea agreement, the telemarketing scheme involved calling businesses regarding the fraudulent invoices and falsely stating that the businesses had ordered “business listing optimization” or similar services and owed the amount on the invoice. Victims were directed to mail checks to addresses in the United States, which were actually United Parcel Service (UPS) mailboxes or virtual offices, including one mailbox at a UPS store in San Francisco. In pleading guilty, Vouloukos admitted that he and a co-conspirator used a firm called GreenGate to launder the proceeds of the fraudulent scheme.
According to the indictment, from about May 2009 to about June 2014, Vouloukos and others collected approximately $3.2 million from thousands of victims.
Menis, 47, of Dollard-des-Ormeaux, Quebec, Canada, was charged in a separate indictment and arrested on August 11, 2014. He pleaded guilty on December 5, 2014, and is awaiting sentencing.
A federal grand jury returned an indictment against Vouloukos on February 12, 2015. He was charged with one count of conspiracy to commit mail fraud, in violation of 18 U.S.C. § 1349; four counts of mail fraud, in violation of 18 U.S.C. § 1341; and one count of conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h). Vouloukos pleaded guilty to one count of conspiracy to commit mail fraud.
Vouloukos was arrested after entering the United States on January 25, 2019, and made his initial appearance before the Honorable Sallie Kim, U.S. Magistrate Judge. He was released on a $100,000 bond.
Judge Illston scheduled Vouloukos’ sentencing for October 30, 2020. The maximum statutory penalty for a violation of 18 U.S.C. § 1349 is 20 years in prison and a fine of $250,000, plus restitution. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorneys Robert S. Leach and Scott D. Joiner are prosecuting the case with the assistance of Rebecca Shelton and Kimberly Richardson. The prosecution is the result of an investigation by the United States Postal Inspection Service and IRS – Criminal Investigation.
East Bay Resident Sentenced to Eight Years in PrisonRead the Press Release
OAKLAND – Kevin Marshall Stevenson was sentenced on January 28, 2020, to eight years in prison for brandishing a firearm in furtherance of an armed bank robbery, announced United States Attorney David L. Anderson and John Bennett, Special Agent in Charge of the FBI’s San Francisco Field Division. The sentence was handed down by the Honorable Jeffrey S. White, U.S. District Judge.
Stevenson, 35, pleaded guilty to the charge on October 1, 2019. According to his plea agreement, Stevenson admitted that on January 19, 2018, he entered the East West Bank in Oakland, California, intending to rob it, and carrying an unloaded firearm. Stevenson pointed the firearm at multiple bank employees and demanded that they provide him money from the bank registers and the vault. Bank employees were forced to give Stevenson $302,462 in cash before he fled the scene.
Stevenson was apprehended by BART and Oakland police officers as he entered the Lake Merritt BART station. Both the stolen money and the firearm were recovered.
On May 3, 2018, a federal grand jury indicted Stevenson, charging him with one count of armed bank robbery, in violation of 18 U.S.C. §§ 2113(a) and (d); one count of being a felon in possession of a firearm, in violation of 18 U.S.C. § 922(g)(1); and one count of brandishing a firearm during and in relation to a crime of violence, in violation of 18 U.S.C. § 924(c)(1)(A)(ii). Stevenson pleaded guilty to brandishing the firearm during and in relation to a crime of violence, namely, armed bank robbery, and the remaining counts were dismissed.
In addition to the prison term, Judge White sentenced the defendant to a five-year period of supervised release to begin at the conclusion of his prison term. Stevenson has been in custody since his arrest and will begin serving his prison term immediately.
Assistant U.S. Attorney Samantha Schott is prosecuting the case with the assistance of Kay Konopaske. The prosecution is the result of an investigation by the FBI, BART Police Department, and Oakland Police Department.
Bay Area CEO Convicted of Fraud and Money LaunderingRead the Press Release
SAN FRANCISCO – Lawrence J. Gerrans was convicted by a federal jury in United States District Court today of wire fraud and money laundering in connection with a scheme to defraud the medical device company he ran, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett of the San Francisco Division. The verdict issued today following a two-week trial before the Honorable Edward M. Chen, U.S. District Judge.
“The defendant siphoned millions of dollars from the medical device company he was entrusted to run, and then tried to cover up that crime,” stated U.S. Attorney Anderson. “Insider schemes like these injure companies, employees, and investors, and undermine the public’s trust in our business community. The investigation and prosecution of corporate fraud is a priority for our office. Our corporate fraud strike force will continue to pursue speedy and certain justice for white collar criminals in the Bay Area and throughout the Northern District of California.”
The jury found Gerrans, 49, of San Anselmo, Calif., guilty on 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.
Evidence at trial showed that Gerrans, the president and chief executive officer of San Rafael-based medical device company Sanovas, employed a number of fraudulent methods to siphon funds out of Sanovas. From January 12, 2015, through March 16, 2015, 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. That money was then used for an all-cash purchase of a luxury home in San Anselmo, at a purchase price of $2,570,000. At least $2.3 million of this money was laundered through Hartford Legend before being paid to the escrow account to purchase the house.
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.
Judge Chen scheduled the defendant’s sentencing hearing for May 20, 2020.
Gerrans faces maximum statutory penalties of twenty years imprisonment and a $250,000 fine, plus restitution, for each violation of 18 U.S.C. § 1343; ten years imprisonment and a $250,000 fine or twice the amount of the criminally derived property, for each violation of 18 U.S.C. § 1957; five years imprisonment and a $250,000 fine, for each violation of 18 U.S.C. § 1001(3); twenty years of imprisonment and a $250,000 fine, for each violation of 18 U.S.C. § 1512(b)(1); ten years of imprisonment and a $250,000 fine, for each violation of 18 U.S.C. § 1503; and a term of imprisonment to be determined by the court and a $250,000 fine, for each violation of 18 U.S.C. § 401(3). However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorneys Robin Harris and Lloyd Farnham are prosecuting the case with the assistance of Patricia Mahoney, Kimberly Richardson, and Phillip Villanueva. The prosecution is the result of an investigation by the Federal Bureau of Investigation.
San Francisco Director of Public Works and Restauranteur Charged with Public CorruptionRead the Press Release
SAN FRANCISCO – San Francisco Director of Public Works Mohammed Colin Nuru and restauranteur Nick James Bovis have been charged in a criminal complaint with honest services wire fraud in connection with an alleged scheme to bribe a San Francisco Airport Commissioner, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett of the San Francisco Division.
According to the complaint filed January 16, 2020, Nuru, 58, of San Francisco, and Bovis, 57, of San Mateo, engaged in a scheme to bribe an unnamed San Francisco Airport Commissioner with cash and free travel in exchange for the commissioner’s assistance to win a bid for the right to run a restaurant in the San Francisco International Airport (SFO).
“The complaint describes a web of corruption involving bribery, kickbacks, and side deals by one of San Francisco’s highest-ranking city employees,” said U.S. Attorney Anderson. “The public is entitled to honest work from public officials, free from manipulation for the official’s own personal benefit and profit.”
“Government employees are entrusted and expected to protect the best interests of the American public with integrity. When that trust is betrayed, the security and stability of our government is put at risk,” said Special Agent in Charge Bennett. “The FBI will continue to investigate and hold accountable any public official who utilizes their position for personal gain.”
As part of the scheme, the defendants allegedly violated several rules relating to the bidding process for concessions at the airport. The five-person San Francisco Airport Commission awards leases from time to time that grant the right for vendors to operate businesses at the airport. For many businesses, the Airport Commission is required by law to allow vendors to bid competitively for opportunities, and then to select the vendor with the highest or best bid of all submitted proposals. Additional rules generally prohibit commissioners from communicating with vendors who have submitted bids until after a decision has been made. In this case, Nuru and Bovis are alleged to have violated rules requiring a fair competitive bidding process.
According to the complaint, Bovis is affiliated with a company that submitted a bid for a lease to provide concessions at SFO. The defendants allegedly then took steps to rig the bid. The complaint describes how the defendants met with an airport commissioner in hopes of influencing the members of the Airport Commission to award the contract to the Bovis-affiliated company. Further, the complaint describes how the defendants allegedly planned to offer the airport commissioner $5,000 and free travel, in exchange for the commissioner’s assistance to win the bid for the lease. Nuru allegedly hoped to receive benefits later by assisting Bovis and others to get the airport contract. Specifically, the complaint states Nuru mentioned to the concessioners his role as the Chair of the Joint Transbay Transit Authority (TJPA) and shared confidential information from the project to suggest that he (Nuru) would be able to direct contracts to the concessioners. In the end, however, the complaint explains that the defendants did not win the lease for the airport concessions.
The complaint further alleges several additional schemes engaged in by the defendants as evidence of their corrupt intent and modus operandi. These other schemes include: 1) Nuru using his official position to benefit a billionaire in China who was developing a large multimillion dollar mixed-use project in San Francisco, in exchange for travel and lodging, high-end liquor, and other gifts and benefits; 2) Nuru attempting to use his position as the chair of the TJPA to secure a desirable lease for Bovis in the Transbay Transit Center, in exchange for benefits provided by Bovis; 3) Nuru providing Bovis with inside information on city projects regarding portable bathroom trailers and small container-like housing units for use by the homeless, so that Bovis could win contracts for those projects; and 4) Nuru obtaining free and discounted labor and construction equipment from contractors to help him build a personal vacation home in Colusa County, California, while those contractors were also engaging in business with the City.
The complaint charges both Nuru and Bovis with one count of committing honest services wire fraud, in violation of 18 U.S.C. §§ 1343 and 1346.
The defendants were arrested yesterday and made their initial federal appearances before U.S. Magistrate Judge Sallie Kim this afternoon. The defendants have been arraigned and released, each on $2 million bond. Magistrate Judge Kim scheduled appearances for both defendants on February 6, 2020, at 11:30 a.m.
A complaint merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted of the charge, the defendants each face a maximum statutory sentence of 20 years in prison. Additional fines, penalties, and terms of supervised release also may be ordered; 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 prosecution is being handled by the Office of the U.S. Attorney, Northern District of California’s new Corporate Fraud Strike Force and is the result of an investigation by the FBI.
Electronic Health Records Vendor to Pay $145 Million to Resolve Criminal and Civil InvestigationsRead the Press Release
Practice Fusion Inc. (Practice Fusion), a San Francisco-based health information technology developer, will pay $145 million to resolve criminal and civil investigations relating to its electronic health records (EHR) software, the Department of Justice announced today.
As part of the criminal resolution, Practice Fusion admits that it solicited and received kickbacks from a major opioid company in exchange for utilizing its EHR software to influence physician prescribing of opioid pain medications. Practice Fusion has executed a deferred prosecution agreement and agreed to pay over $26 million in criminal fines and forfeiture. In separate civil settlements, Practice Fusion has agreed to pay a total of approximately $118.6 million to the federal government and states to resolve allegations that it accepted kickbacks from the opioid company and other pharmaceutical companies and also caused its users to submit false claims for federal incentive payments by misrepresenting the capabilities of its EHR software.
“Across the country, physicians rely on electronic health records software to provide vital patient data and unbiased medical information during critical encounters with patients,” said Principal Deputy Assistant Attorney General Ethan Davis of the Department of Justice’s Civil Division. “Kickbacks from drug companies to software vendors that are designed to improperly influence the physician-patient relationship are unacceptable. When a software vendor claims to be providing unbiased medical information – especially information relating to the prescription of opioids – we expect honesty and candor to the physicians making treatment decisions based on that information.”
The resolution announced today addresses allegations that Practice Fusion extracted unlawful kickbacks from pharmaceutical companies in exchange for implementing clinical decision support (CDS) alerts in its EHR software designed to increase prescriptions for their drug products. Specifically, in exchange for “sponsorship” payments from pharmaceutical companies, Practice Fusion allowed the companies to influence the development and implementation of the CDS alerts in ways aimed at increasing sales of the companies’ products. Practice Fusion allegedly permitted pharmaceutical companies to participate in designing the CDS alert, including selecting the guidelines used to develop the alerts, setting the criteria that would determine when a healthcare provider received an alert, and in some cases, even drafting the language used in the alert itself. The CDS alerts that Practice Fusion agreed to implement did not always reflect accepted medical standards. In discussions with pharmaceutical companies, Practice Fusion touted the anticipated financial benefit to the pharmaceutical companies from increased sales of pharmaceutical products that would result from the CDS alerts. Between 2014 and 2019, health care providers using Practice Fusion’s EHR software wrote numerous prescriptions after receiving CDS alerts that pharmaceutical companies participated in designing.
Practice Fusion executed a deferred prosecution agreement with the U.S. Attorney’s Office for the District of Vermont based on its solicitation and receipt of kickbacks from a major opioid company to arrange for an increase in prescriptions of extended release opioids by healthcare providers who used Practice Fusion’s EHR software. As detailed in the criminal Information made public today, Practice Fusion solicited a payment of nearly $1 million from the opioid company to create a CDS alert that would cause doctors to prescribe more extended release opioids. That payment was financed by the opioid company’s marketing department, and the CDS was designed with input from the marketing department. Practice Fusion and the opioid company entered the CDS sponsorship because they believed that the CDS would influence doctors’ prescriptions of extended release opioids. In marketing the “pain” CDS alert, Practice Fusion touted that it would result in a favorable return on investment for the opioid company based on doctors prescribing more opioids.
“Practice Fusion’s conduct is abhorrent. During the height of the opioid crisis, the company took a million-dollar kickback to allow an opioid company to inject itself in the sacred doctor-patient relationship so that it could peddle even more of its highly addictive and dangerous opioids,” said Christina E. Nolan, U.S. Attorney for the District of Vermont. “The companies illegally conspired to allow the drug company to have its thumb on the scale at precisely the moment a doctor was making incredibly intimate, personal, and important decisions about a patient’s medical care, including the need for pain medication and prescription amounts. This recovery is commensurate to the nature of Practice Fusion’s misconduct, represents the largest criminal fine in the history of this District, and requires Practice Fusion to admit to its wrongs. It is another example of pioneering healthcare fraud enforcement by the talented Assistant U.S. Attorneys and staff of this U.S. Attorney’s Office, working with their partners in law enforcement. We cannot — and will not — tolerate technology companies influencing patient treatment merely because a pharmaceutical company provided a kickback.”
The criminal Information charges Practice Fusion with two felony counts for violating the Anti-Kickback Statute (AKS), 42 U.S.C. § 1320a-7b(b)(1), and for conspiring with its opioid company client to violate the AKS, 18 U.S.C. § 371. This case is the first ever criminal action against an EHR vendor and the unique Deferred Prosecution Agreement imposes stringent requirements on Practice Fusion to ensure acceptance of responsibility and transparency as to its underlying conduct, and to invest heavily in compliance overhauls and an independent oversight organization. The Deferred Prosecution Agreement requires Practice Fusion to pay a criminal fine of $25,398,300 and forfeit criminal proceeds of nearly $1 million. In addition, the company will cooperate in any ongoing investigations of the kickback arrangement and report any evidence of kickback violations by any other EHR vendors. To ensure transparency and public awareness of the company’s activities while the nation continues to battle an epidemic of opioid addiction, the Deferred Prosecution Agreement requires Practice Fusion to make documents relating to its unlawful conduct available to the public through a website. Additionally, the Deferred Prosecution Agreement mandates that Practice Fusion retain an independent oversight organization that is required to review and approve any sponsored CDS before Practice Fusion may implement the CDS, and create a comprehensive compliance program designed to ensure such abuses are not repeated.
The civil settlement with the United States resolves Practice Fusion’s civil liability arising from the submission of false claims to federal healthcare programs tainted by the kickback arrangement between Practice Fusion and the opioid company. It also resolves allegations of kickbacks relating to thirteen other CDS arrangements where Practice Fusion agreed with pharmaceutical companies to implement CDS alerts intended to increase sales of their products. The $118.6 million settlement amount includes approximately $113.4 million to the federal government and up to $5.2 million to states that opt to participate in separate state agreements.
“Prescription decisions should be based on accurate data regarding a patient’s medical needs, untainted by corrupt schemes and illegal kickbacks,” said U. S. Attorney David L. Anderson of the Northern District of California. “In deciding what is best for patients, electronic health records software is an important tool for care providers. It is critically important that technology companies do not cheat when certifying that software.”
In addition to the kickback allegations, the civil settlement with the United States resolves allegations relating to two intersecting Department of Health and Human Services (HHS) programs, one at the Office of the National Coordinator for Health Information Technology (ONC) that regulates the voluntary health IT certification program, and one at the Centers for Medicare & Medicaid Services that oversees EHR incentive programs. Specifically, the United States alleged that Practice Fusion falsely obtained ONC certification for several versions of its EHR software by concealing from its certifying entity, known as an ONC-Authorized Certification Body, that the EHR software did not comply with all of the applicable requirements for certification. ONC’s certification criteria were designed to promote enhanced functionality, utility, and security of health information technology, and access to patient medical information across the care continuum. HHS implemented the certification criteria for EHR software in multiple stages, known as editions. To be certified under the 2014 Edition certification criteria, EHR software was required to allow users to electronically create a set of standardized export summaries for all patients. When Practice Fusion sought certification of this 2014 Edition criteria, Practice Fusion falsely represented to the certifying body that its software met this data portability requirement, when several versions of its software did not. The civil settlement resolves allegations that, at the time these versions of Practice Fusion’s software were certified, its software was unable to permit a user to create a set of standardized export summaries. Additionally, after obtaining certification of the 2014 Edition criteria, Practice Fusion disabled access to this feature altogether. Instead, Practice Fusion required users to contact it separately to request export of this critical patient data.
In addition to failing to satisfy the data portability requirement, Practice Fusion’s software allegedly did not incorporate standardized vocabularies as required for certification. The United States alleged that by fraudulently obtaining certification for its products, Practice Fusion knowingly caused eligible healthcare providers who used certain versions of its 2014 Edition EHR software to falsely attest to compliance with HHS requirements necessary to receive incentive payments from Medicare during the reporting periods for 2014 through 2016 and from Medicaid during the reporting periods for 2014 through 2017.
“As new technologies continue to develop and evolve, so too do new and innovative fraud schemes,” said Shimon R. Richmond, Assistant Inspector General for Investigations of the U.S. Department of Health and Human Services. “We will continue to be vigilant in detecting and investigating these schemes in order to protect the safety of patients in federal health programs and to ensure the appropriate use of electronic health records in providing their care.”
“Today's announcement shows that Practice Fusion exploited technology to profit at the expense of a vulnerable population – patients seeking medical advice," said Timothy M. Dunham, Special Agent in Charge of the FBI's Washington Field Office, Criminal Division. "The FBI is committed to working with our partners to bring to justice the perpetrators of healthcare fraud in all its forms, especially one that fans the flames of the already rampant opioid epidemic.”
The U.S. Attorney’s Office for the District of Vermont handled the criminal investigation and resolution. The civil investigation was jointly handled by the Civil Division’s Commercial Litigation Branch and the U.S. Attorneys’ Offices for the District of Vermont and the Northern District of California. The investigation was supported by the HHS Office of Inspector General and multiple HHS agencies and components. The FBI’s field office in Washington, DC, also provided significant investigative support.
Except for the conduct admitted in connection with the criminal resolution, the civil claims resolved by the settlement are allegations only, and there has been no determination of liability as to such civil claims.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Bay Area Residents Sentenced to Five Years for Counterfeit Currency and Credit Card Fraud SchemesRead the Press Release
SAN FRANCISCO – Nicole Dunlap and Marcus Smith were sentenced to approximately five years in prison for their roles in a currency counterfeiting and credit card fraud scheme, announced United States Attorney David L. Anderson and United States Secret Service Special Agent in Charge Thomas C. Edwards. Defendant Nicole Dunlap was sentenced to 57 months imprisonment; and defendant Marcus Smith was sentenced to 63 months imprisonment. The sentences were handed down by the Honorable Susan Illston, Senior United States District Judge.
Dunlap, 36, and Smith, 37, pleaded guilty to the charges on November 6, 2019. According to their plea agreements, Dunlap and Smith each took part in a conspiracy to manufacture and pass counterfeit one hundred dollar bills. The bills were manufactured in San Francisco and passed or used for payment around the Bay Area. For example, Dunlap admitted to using counterfeit currency at a business in San Francisco, and Smith admitted to carrying counterfeit one hundred dollar bills in Oakland; and each admitted doing so with the intent to defraud. Dunlap and Smith also acknowledged that the conspiracy involved the manufacture of more than 950 counterfeit one hundred dollar bills.
In addition, Dunlap and Smith admitted in their plea agreements to a credit card fraud scheme, involving the possession and use of hundreds of fraudulent credit and identification cards in the identities of numerous victims, as well as card-making equipment in the furtherance of their fraud. In their plea agreements, the defendants stated that they obtained personal information for victims from the Internet and created fraudulent access devices to rent cars, book hotel rooms, rent high-end purses for sale, and make other fraudulent purchases. For example, when Dunlap was arrested, she had in her possession more than one hundred fraudulent cards with various victims’ identities, as well as multiple pieces of access device-making equipment. Upon Smith’s arrest, he also had more than 1500 fraudulent cards with various victims’ identities, as well as multiple pieces of access device-making equipment. The defendants each acknowledged that the total losses from their credit card fraud conspiracy were no less than $250,000.
A federal grand jury indicted Dunlap and Smith in a superseding indictment on June 18, 2019, charging each of them with one count of conspiracy to counterfeit obligations of the United States, in violation of 18 U.S.C. § 371; one count of passing and possessing counterfeit obligations of the United States, in violation of 18 U.S.C. § 472; one count of conspiracy to commit access device fraud, in violation of 18 U.S.C. § 1029(b)(2); one count of fraudulent possession of fifteen or more counterfeit or unauthorized access devices, in violation of 18 U.S.C. § 1029(a)(3); one count of fraudulent possession of device-making equipment, in violation of 18 U.S.C. § 1029(a)(4); and one count of aggravated identity theft, in violation of 18 U.S.C. § 1028A. Dunlap and Smith pleaded guilty on all counts, except the aggravated identity theft counts, which were dismissed.
In addition to the prison terms, Judge Illston sentenced Dunlap and Smith to a three-year period of supervised release and ordered them to pay restitution to the victims of their crimes in amounts to be determined. Dunlap and Smith are in federal custody and will begin serving their sentences immediately.
Four additional co-conspirators have pleaded guilty to related charges for their roles in the counterfeiting conspiracy and await their sentences as indicated in the following chart:
Name Charges Sentence Joshua Barnes Conspiracy to Counterfeit Obligations of the United States, 18 U.S.C. § 371; Counterfeiting Obligations of the United States, 18 U.S.C. § 472; Passing and Possessing Counterfeit Obligations of the United States, 18 U.S.C. § 472 Sentencing pending Erasto Campos a/k/a Eric Campos Conspiracy to Counterfeit Obligations of the United States, 18 U.S.C. § 371; Passing and Possessing Counterfeit Obligations of the United States, 18 U.S.C. § 472 Sentencing scheduled for January 28, 2020 Michael Okeefe Conspiracy to Counterfeit Obligations of the United States, 18 U.S.C. § 371; Passing and Possessing Counterfeit Obligations of the United States, 18 U.S.C. § 472 Sentencing scheduled for April 10, 2020 Michael Suderman Conspiracy to Counterfeit Obligations of the United States, 18 U.S.C. § 371; Passing and Possessing Counterfeit Obligations of the United States, 18 U.S.C. § 472 Status conference regarding sentencing scheduled for February 14, 2020Assistant U.S. Attorney Eric Cheng is prosecuting the case with the assistance of Morgan Byrne. The prosecution is the result of an investigation by the U.S. Secret Service.
San Francisco Man Sentenced to More Than 16 Years in Prison for Crimes Related to Illegal Fentanyl Pill Manufacturing OperationRead the Press Release
SAN FRANCISCO - Kia Zolfaghari was sentenced today to 200 months in prison for conspiring to distribute fentanyl, announced United States Attorney David L. Anderson and Drug Enforcement Administration Special Agent in Charge Daniel C. Comeaux. The sentence was handed down by the Honorable Susan Illston, Senior United States District Judge.
Zolfaghari, 43, of San Francisco, pleaded guilty to the fentanyl conspiracy charge as well as weapons and money laundering charges on July 12, 2019. According to his plea agreement, Zolfaghari admitted that from May of 2014 until June of 2016 he agreed with others to distribute and possess with intent to distribute fentanyl.
Fentanyl, a Schedule II controlled substance, is a highly potent opiate that can be diluted with cutting agents to create counterfeit pills that attempt to mimic the effects of oxycodone. Typically, counterfeit pills made with fentanyl can be obtained at a lower cost than genuine oxycodone. However, small variations in the amount or quality of fentanyl can have significant effects on the potency of the counterfeit pills, raising the danger of overdoses. The San Francisco medical examiner’s office recently reported a large spike in fentanyl-related deaths—in 2019, 234 deaths in San Francisco are estimated to have involved fentanyl, compared with 90 in 2018.
In this case, Zolfaghari admitted that his role in the conspiracy included buying a pill press, using it to manufacture pills, and selling the pills, principally online. Zolfaghari admitted he stamped the pills in a manner consistent with genuine oxycodone and advertised the pills as oxycodone, but that the pills did not contain oxycodone and instead contained fentanyl.
In his plea agreement, Zolfaghari also described the roles of two of his co-conspirators in the drug trafficking conspiracy. For example, Zolfaghari acknowledged that one of his co-conspirators assisted him in the operation by packaging and mailing pills as well as cleaning up after he manufactured the pills. Additionally, Zolfaghari explained that another co-conspirator assisted him by maintaining a post office box for the delivery of the fentanyl powder that he used to make pills and by delivering the powder that arrived in that post office box. Zolfaghari admitted that over the course of the conspiracy he made over $400,000 through his sales, and sold at least 13,000 fentanyl pills. As described below, Zolfaghari spent the proceeds of his drug trafficking enterprise on luxury goods.
Zolfaghari also pleaded guilty to conspiring to launder the proceeds of the drug trafficking operation. Specifically, Zolfaghari admitted that sometime before May 1, 2014, he agreed with others to engage in several financial transactions to conceal the source and ownership of the proceeds of his drug sales. For example, he arranged to be paid in the digital currency bitcoin; he used unlicensed bitcoin brokers to exchange the bitcoin for cash; and he directed a co-conspirator to purchase gift cards with the cash. Zolfaghari further admitted that these transactions were intended to conceal the source and ownership of the funds. Zolfaghari also admitted he used the proceeds from his drug trafficking operation to make a $40,000 down payment (and additional monthly payments) on a 2015 Audi RS5 Coupe, which retailed for close to $80,000; to make payments on an apartment in San Francisco; and to purchase luxury goods such as high-end watches, designer shoes, and jewelry.
Zolfaghari was arrested on June 10, 2016. At the time of his arrest, Zolfaghari was found in possession of a Smith & Wesson handgun and 500 pills containing fentanyl.
On November 29, 2016, a federal grand jury returned a superseding indictment against Zolfaghari, charging him with four counts of distribution and possession with intent to distribute fentanyl, in violation of 21 U.S.C. §§ 841(a)(1) and (b)(1)(B); four counts of distribution and possession with intent to distribute 40 grams or more of fentanyl, in violation of 21 U.S.C. §§ 841(a)(1) and (b)(1)(B); four counts of engaging in money laundering in violation of 18 U.S.C. § 1957; and one count each of conspiracy to manufacture, to possess with intent to distribute, and to distribute 400 grams or more of fentanyl, in violation of 21 U.S.C. § 846; using, carrying, or possessing a firearm during and in relation to a drug trafficking crime, in violation of 18 U.S.C. § 924(c); and conspiracy to launder drug proceeds, in violation of 18 U.S.C. § 1956(h). Also charged in the case were King Edward Harris, II, 37, of Oxnard, and Zolfaghari’s wife, Candelaria Dagandan Vazquez, 44.
In April 2017, Zolfaghari and Vazquez jumped bail and failed to appear for hearings in this case. In February 2019, the United States Marshals Service and the Mexican Federal Police located Zolfaghari and Vazquez in Mexico and returned them to the United States.
In addition to the prison term, Judge Illston sentenced Zolfaghari to a five-year period of supervised release to follow his prison term, and ordered him to pay a $300 special assessment.
On February 9, 2018, Judge Illston sentenced Vazquez to 151 months imprisonment for her role in the conspiracy. On September 22, 2017, Judge Illston sentenced Harris to five years in prison for possession and distribution of 40 grams or more of fentanyl.
Assistant U.S. Attorney Nikhil Bhagat is prosecuting the case with the assistance of Linda Love. The prosecution is the result of an investigation by the Drug Enforcement Administration, Homeland Security Investigations, the Internal Revenue Service Criminal Investigation Division, the United States Postal Inspection Service, and U.S. Customs and Border Protection, with assistance from the United States Marshals Service, the San Francisco Police Department, the San Francisco Fire Department, and the Mexican Federal Police. This case is the product of an extensive investigation by the Organized Crime Drug Enforcement Task Force, a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies.
MS-13 Gang Member Pleads Guilty to Conspiracy to Commit Murder and ExtortionRead the Press Release
SAN FRANCISCO – Tomas Rivera, a/k/a Profugo, a/k/a Caballo, a/k/a Jonas Portillo Escobar pleaded guilty to racketeering conspiracy and conspiracy to commit murder and extortion for his role as an MS-13 gang member, announced United States Attorney David L. Anderson and Homeland Security Investigations (“HSI”) Special Agent in Charge Tatum King. The guilty plea was received by the Honorable Edward J. Davila, United States District Judge.
“Rivera’s arrest was a criminal arrest, although it was erroneously criticized at the time as being part of an immigration sweep,” stated United States Attorney David L. Anderson. “As the plea agreement shows, Rivera was a high-ranking participant in a criminal conspiracy perpetrating murder, extortion, and drug trafficking, and a member of the notorious transnational gang MS-13. Federal and local law enforcement need to work together to combat the threat of violence from street gangs like MS-13. We are all safer when law enforcement is allowed to work together.”
“Bringing this gang member to justice is a direct result of the strong partnerships between HSI agents and local law enforcement, most especially the Santa Cruz Police Department, in this complex federal criminal investigation,” said Tatum King, special agent in charge, HSI San Francisco. “Our agents will not rest until our communities are safe and these dangerous criminals are brought to justice.”
Chief Andrew Mills of the Santa Cruz Police Department said, “We are grateful to our federal partners for assisting Santa Cruz with taking a very violent criminal off our streets.”
The transnational street gang La Mara Salvatrucha, also known as MS-13, has local chapters, or “cliques,” throughout the world, including El Salvador, Honduras, Mexico, and the United States. MS-13 members and associates engage in crimes such as murder, narcotics trafficking, extortion, and obstruction of justice. The Santa Cruz Salvatrucha Locos (“SCSL”) is an MS-13 clique that operates in and around Santa Cruz, California.
According to his plea agreement, Rivera, 27, of El Salvador, arrived in Santa Cruz in April 2016, where he quickly stepped in as second in command of the SCSL clique of the MS-13 gang. From April 2016 through January 2017, Rivera and SCSL members engaged in drug trafficking and extortion. Rivera coordinated with MS-13 members in El Salvador and other places to carry out the directives of the gang’s leadership in and around Santa Cruz. Rivera acknowledged that he pushed for strict adherence to MS-13 rules, including the rule that required all people who wanted to join the gang to commit a murder to qualify for membership.
The plea agreement describes Rivera’s role in patrolling the area over which SCSL gang members asserted their control. Rivera admitted in the plea agreement that on one occasion he and other SCSL members beat up a suspected rival gang member they found in their territory. On another occasion, Rivera and other MS-13 members were in a car, when they spotted people they suspected of being rival gang members. One of the MS-13 members shot at and attempted to kill a member of the group.
In the plea agreement, Rivera admitted that he played a key role in a murder committed by SCSL gang members. Rivera admitted that in April 2016 he discussed seeking approval from El Salvador to kill a suspected rival gang member. The murder of the rival gang member was committed by SCSL members on September 22, 2016, and Rivera collected the murder weapons. At an October 2016 SCSL meeting, Rivera took charge of organizing the day-to-day efforts of SCSL members to kill additional rivals. The plea also describes Rivera’s involvement in burning clothing and a car involved in another murder by MS-13 members.
A federal grand jury returned a second superseding indictment against Rivera and others on August 16, 2018. The indictment charged Rivera with one count of racketeering conspiracy, in violation of 18 U.S.C. § 1962(d); one count of conspiracy to commit extortion by force, in violation of 18 U.S.C. § 1951(a); and one count of conspiracy to commit murder in aid of racketeering, in violation of 18 U.S.C. § 1959(a)(5). Rivera pleaded guilty to all three counts.
Judge Davila scheduled Rivera’s sentencing hearing for April 13, 2020, at 1:30 p.m. Pursuant to the terms of his plea agreement, Rivera has agreed that a reasonable and appropriate disposition of his case would include a term of 27 years in prison. The court also may order an additional term of supervised release, payment of a fine and restitution, and forfeiture. 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.
Seven of the other charged defendants have already pleaded guilty for their roles in the SCSL and MS-13 criminal enterprise and six have been sentenced as reflected in the following chart:
Name
Charges
Sentence
Ismael Alvarenga-Rivera, a/k/a Casper
Racketeering Conspiracy, 18 U.S.C. § 1962(d); Conspiracy to Commit Extortion by Force, 18 U.S.C. § 1951(a)
Sentenced on September 23, 2019, to 90 months in prison
Willfredo Ayala-Garcia, a/k/a Chino
Racketeering Conspiracy, 18 U.S.C. § 1962(d); Conspiracy to Commit Extortion by Force, 18 U.S.C. § 1951(a)
Sentenced on September 17, 2019, to 80 months in prison
Jose David Abrego-Galdamez, a/k/a Largo
Racketeering Conspiracy, 18 U.S.C. § 1962(d); Conspiracy to Commit Extortion by Force, 18 U.S.C. § 1951(a)
Sentenced on September 16, 2019, to 36 months in prison, consecutive to his sentence in CR 17-567 BLF
Gerber Morales, a/k/a Choco
Racketeering Conspiracy, 18 U.S.C. § 1962(d); Conspiracy to Possess with Intent to Distribute 50 Grams or More of Methamphetamine, 21 U.S.C. §§ 846, 841(a)(1), and 841(b)(1)(A)(viii)
Sentenced on September 17, 2019, to 72 months in prison
Emilio Escobar-Albarnga, a/k/a Diablo
Racketeering Conspiracy, 18 U.S.C. § 1962(d); Conspiracy to Possess with Intent to Distribute 50 Grams or More of Methamphetamine, 21 U.S.C. §§ 846, 841(a)(1), and 841(b)(1)(A)(viii)
Sentenced on January 20, 2020, to 60 months in prison
Josue Alcedis Escobar Cerritos, a/k/a Penguino
Racketeering Conspiracy, 18 U.S.C. § 1962(d); Conspiracy to Possess with Intent to Distribute 50 Grams or More of Methamphetamine, 21 U.S.C. §§ 846, 841(a)(1), and 841(b)(1)(A)(viii)
Sentenced on July 30, 2019, to 72 months in prison
Melvin Lopez, a/k/a Sharky
Racketeering Conspiracy, 18 U.S.C. § 1962(d); Conspiracy to Commit Extortion by Force, 18 U.S.C. § 1951(a); Conspiracy to Commit Murder, 18 U.S.C. § 1959(a)(5).
Sentencing currently scheduled for January 27, 2020
The United States Attorney’s Office’s Organized Crime Strike Force is prosecuting the case. This prosecution is the result of an investigation conducted by HSI with the assistance of the Santa Cruz Police Department.
East Bay Real Estate Developer Sentenced to 15 Months for Making Conduit Contributions in Two U.S. Congressional CampaignsRead the Press Release
SAN FRANCISCO – Oakland-area real estate developer James Tong was sentenced to 15 months in prison today for funneling tens of thousands of dollars of his own money through straw donors into two consecutive congressional campaigns for a member of the U.S. House of Representatives.
United States Attorney David L. Anderson for the Northern District of California, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, and Special Agent in Charge John F. Bennett of the FBI’s San Francisco Field Office made the announcement.
Tong, 74, of Fremont, Calif., was sentenced by U.S. District Judge Jon S. Tigar of the Northern District of California.
A federal jury convicted Tong on October 8, 2019, of two counts of making contributions to a federal campaign in the names of other individuals. According to the evidence presented at trial, in 2012 and 2013 Tong made $38,000 in conduit contributions to the initial and reelection campaigns of a candidate who was running for the U.S. House of Representatives. Tong provided envelopes of cash to his bank manager and another business associate and directed them to give the cash to individuals in the community, who then used Tong’s cash to write checks in their own names to the campaign for the U.S. congressional candidate Tong was supporting. Tong leveraged financial obligations and the implied loss of business opportunities to induce his bank manager and business associate to distribute cash in the community to be donated. The network of straw donors included dozens of conduits, including at least one foreign national who was not eligible to make donations to federal elections. Tong also directed his middlemen to conceal the scheme by instructing the straw donors not to deposit the cash; and he later directed one of the middlemen to withhold information from the FBI after he was interviewed.On August 31, 2017, a federal grand jury indicted Tong charging him with two counts of making and causing campaign contributions in the name of another, in violation of 52 U.S.C. §§ 30122 and 30109(d)(1)(D). The jury found Tong guilty of both counts.
As part of the sentence, Judge Tigar found that Tong obstructed justice when he told his middlemen not to deposit cash given to them. Judge Tigar also sentenced the defendant to a one-year period of supervised release and a $380,000 fine.
The FBI conducted the investigation. Trial Attorneys Amanda R. Vaughn and Rebecca G. Ross of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney S. Waqar Hasib of the Northern District of California prosecuted the case.
California Real Estate Developer Sentenced to 15 Months for Making Conduit Contributions in Two U.S. Congressional CampaignsRead the Press Release
Oakland-area real estate developer James Tong was sentenced to 15 months today for funneling tens of thousands of dollars of his own money through straw donors into two consecutive congressional campaigns for a member of the U.S. House of Representatives.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, United States Attorney David L. Anderson for the Northern District of California, and Special Agent in Charge John F. Bennett of the FBI’s San Francisco Field Office made the announcement.
Tong, 74, of Fremont, California, was sentenced by U.S. District Judge Jon S. Tigar of the Northern District of California.
A federal jury convicted Tong on Oct. 8, 2019, of two counts of making contributions to a federal campaign in the names of other individuals. According to the evidence presented at trial, in 2012 and 2013 Tong made $38,000 in conduit contributions to the initial and reelection campaigns of a candidate who was running for the U.S. House of Representatives. Tong provided envelopes of cash to his bank manager and another business associate and directed them to give the cash to individuals in the community, who then used Tong’s cash to write checks in their own names to the campaign for the U.S. congressional candidate Tong was supporting. Tong leveraged financial obligations and the implied loss of business opportunities to induce his bank manager and business associate to distribute cash in the community to be donated. The network of straw donors included dozens of conduits, including at least one foreign national who was not eligible to make donations to federal elections. Tong also directed his middlemen to conceal the scheme by instructing the straw donors not to deposit the cash; and he later directed one of the middlemen to withhold information from the FBI after he was interviewed.
On Aug. 31, 2017, a federal grand jury indicted Tong charging him with two counts of making and causing campaign contributions in the name of another, in violation of 52 U.S.C. §§ 30122 and 30109(d)(1)(D). The jury found Tong guilty of both counts.
As part of the sentence, Judge Tigar found that Tong obstructed justice when he told his middlemen to not deposit cash given to them. Judge Tigar also sentenced the defendant to a one-year period of supervised release and a $380,000 fine.
The FBI conducted the investigation. Trial Attorneys Amanda R. Vaughn and Rebecca G. Ross of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney S. Waqar Hasib of the Northern District of California prosecuted the case.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
U.S. Postal Service Contractor Arrested for TheftRead the Press Release
SAN FRANCISCO – Christopher Ernest Rocha was charged in a criminal complaint with theft of public money, announced United States Attorney David L. Anderson and Postal Inspector in Charge Rafael E. Nuñez, United States Postal Inspection Service. The criminal complaint was signed following Rocha’s arrest on January 21, 2020, and his appearance the next day before the Honorable Sallie Kim, U.S. Magistrate Judge.
According to an affidavit filed by a postal inspector of the U.S. Postal Inspection Service, Rocha, 50, of Fresno, Calif., was employed as a driver by an independent trucking company that supplies transportation services to the U.S. Postal Service (“USPS”). Rocha transported U.S. mail, as well as money and other USPS property, from post offices in Sonoma County to a USPS processing and distribution center in San Francisco.
As stated in the affidavit, on January 21, 2020, Rocha took custody of and signed for a mail bag from the Healdsburg Post Office. Surveillance showed Rocha carry what appeared to be the same bag to the cab of his truck before leaving Healdsburg. Rocha then drove to the Santa Rosa Main Post Office, where surveillance indicated that he disposed of a torn USPS remittance pouch used to store cash for transport. From Santa Rosa, Rocha drove to San Francisco, where he was arrested. A search of the cab of Rocha’s truck revealed a stack of over $5,000 in cash. Serial numbers on the bills matched those placed in the mail bag at the Healdsburg Post Office.
The affidavit suggests that Rocha has stolen the cash inside of mail bags on a number of occasions and that he used the money to pay bills, buy drugs, and buy a Corvette.
Rocha is charged with one count of theft of public money, in violation of 18 U.S.C. § 641.
Rocha made his initial appearance this morning in federal court before Magistrate Judge Sallie Kim. Magistrate Judge Kim released Rocha on a $50,000 bond and scheduled his next court appearance for February 11, 2020, for preliminary hearing or arraignment.
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 on the charge in the criminal complaint, the defendant would face a maximum sentence of 10 years’ imprisonment, three (3) years’ supervised release, and a fine of $25,000, plus restitution if appropriate. However, any sentence following conviction would only 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 Kevin Rubino is prosecuting the case. The prosecution is the result of an investigation by the U.S. Postal Inspection Service.
San Mateo Man Charged with Making False Statements in Application for PassportRead the Press Release
SAN FRANCISCO – A San Francisco grand jury returned an indictment charging Mustapha Traore, aka Olivier Adella, with making false statements in an application for a passport, announced United States Attorney David L. Anderson; U.S. State Department, Diplomatic Security Service (DSS), San Francisco Field Office Special Agent in Charge Matthew Perlman; and Homeland Security Investigations (HSI) Special Agent in Charge Tatum King.
Today’s indictment follows Traore’s arrest by federal authorities on a criminal complaint on February 10, 2020. According to the complaint, Traore, of Burlingame, Calif., made false statements about his true name and birthplace in his December 2011 application for a U.S. passport. The complaint alleges that in February 2002, Traore used a fake French passport with the name Olivier Adella to enter the United States.
Further, the criminal complaint alleges that after Traore used the fake passport to enter the United States, he then used it to obtain immigration status and eventually a naturalization certificate. Then, after obtaining a California driver’s license under the name Olivier Adella, Traore applied for and obtained a U.S. passport. In May 2016, Troare signed an application to renew his passport and again provided false information. In sum, the complaint and indictment charge Traore with knowingly making false statements in an application for a passport with the intent to induce and secure the issuance of a passport, in violation of 18 U.S.C. § 1542.
Traore made his initial federal court appearance on January 13, 2020. After a detention hearing on January 15, 2020, U.S. Magistrate Judge Sallie Kim ordered that he be detained as a serious risk of flight. Magistrate Judge Kim has scheduled Traore’s next appearance for tomorrow morning at 10:30 for arraignment on the indictment.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted of the charge, Traore faces a maximum statutory sentence of 10 years in prison and a $250,000 fine. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant United States Attorney Daniel Pastor is prosecuting the case with assistance from Marina Ponomarchuk. The prosecution is the result of an investigation by the DSS and HSI.
Pinole Woman Sentenced to More Than Two Years in Prison for Wire Fraud Embezzlement SchemeRead the Press Release
SAN FRANCISCO – Sherryl Santos-Tan was sentenced to 25 months in prison and ordered to pay restitution for wire fraud after defrauding her former employer and another individual of more than $300,000, announced United States Attorney David L. Anderson and United States Secret Service Special Agent in Charge Thomas C. Edwards. The sentence was handed down by the Honorable Edward M. Chen, U.S. District Judge.
Santos-Tan, 36, of Pinole, pleaded guilty to the charges on October 18, 2019. According to her plea agreement, Santos-Tan admitted that over the course of more than two years she executed a scheme by which she defrauded her former employer and another individual by exploiting her access to credit cards and other funds that belonged to the employer. Santos-Tan admitted she diverted money to accounts under her control and made purchases for her personal use. Further, she admitted she used the stolen money at casinos and for other personal expenditures such as funding prepaid charge cards. She also admitted she concealed her actions by falsifying and manipulating information in expense reports. Santos-Tan acknowledged that the money and property she obtained through this scheme totaled more than $300,000.
A federal grand jury indicted Santos-Tan on July 18, 2019, charging her with six counts of wire fraud, in violation of 18 U.S.C. § 1343, and one count of aggravated identity theft, in violation of 18 U.S.C. § 1028A. Santos-Tan pleaded guilty to the wire fraud counts and the identity theft count was dismissed.
In addition to the prison term, Judge Chen sentenced the defendant to a three-year period of supervised release to begin at the completion of the prison term, and ordered her to pay restitution to the victims of her crimes. Judge Chen ordered the defendant to surrender on or before April 21, 2020, to begin serving her prison term.
Assistant U.S. Attorney Eric Cheng is prosecuting the case with the assistance of Morgan Byrne. The prosecution is the result of an investigation by the Secret Service.
Multiple Bay Area Residents Convicted and Sentenced for Forced Refund Fraud SchemeRead the Press Release
SAN JOSE– Monica Mason, the lead defendant in a seven-defendant bank fraud conspiracy, was sentenced to 106 months prison and ordered to pay over $3 million in restitution for a wide ranging refund fraud conspiracy, announced United States Attorney David L. Anderson and FBI Special Agent in Charge, John F. Bennett. The sentence was handed down by the Honorable Lucy H. Koh, U.S. District Judge.
Mason, 40, of Oakland, pleaded guilty to the charges on August 14, 2019. According to her plea agreement, Mason admitted that she, along with Brandon Bodine, Jennifer Prince, Katherine Baldridge, Raymundo Ramos, Lakhinder Singh, and Armida Ruelas, participated in a refund fraud scheme that is thought to have originated in the Bay Area around 2014 and has since spread to neighboring areas. Pursuant to the scheme, fraudsters exploit the credit card refund process by using stolen or reprogrammed electronic point of sale (“POS”) terminals to “force” refunds from merchant bank accounts for products or services that were never actually purchased from the victim merchant. The fraudulent refunds then are loaded to credit and debit cards controlled by the fraudsters, who spend the illicit funds via credit card charges, wire transfers, and ATM withdrawals from affiliated bank accounts. These refund fraud schemes have caused significant disruption to banks and payment processors servicing the targeted merchants, who must divert resources and funds to investigate and remediate the financial losses suffered by their merchant clients. The victims collectively report a total loss of over $20 million since authorities began to track this type of fraud in 2014.
In this case, Mason admitted in her plea agreement that in early 2016, she and her codefendants used a stolen POS terminal to launch refund attacks against several businesses and franchises located throughout the nation. Mason further admitted that the defendants loaded fraudulently obtained refunds onto debit and credit cards under their control. The defendants registered some of the credit and debit cards in their own names and registered many cards in the names of other people using stolen identity information. The defendants attempted to force over $525,000 in fraudulent refunds from various merchant bank accounts using one POS terminal alone. Sixteen additional POS terminals were later recovered from a storage locker associated with Mason and Ruelas.
In addition, Mason, Bodine, Baldridge, and Ruelas acknowledged in their publicly filed plea agreements that they were involved in a second refund fraud scheme that took place from mid-2017 to early 2018. According to the plea agreements, Mason, Bodine, Baldridge, Ruelas and others caused over $3.5 million in fraud loss to a payment processor pursuant to this scheme. They have all accepted responsibility for their conduct during the 2017-2018 time period and agreed to be sentenced based on the combined loss suffered by victims in both cases.
On February 8, 2018, a federal grand jury indicted Mason, Bodine, Prince, Baldridge, Ramos, Singh, and Ruelas, charging them for their respective roles in the conspiracy. Mason was charged with conspiracy, nine substantive counts of bank fraud, unlawful possession of personal identification information, and aggravated identity theft. Mason pleaded guilty to the conspiracy charge and the remaining charges were dismissed.
As of January 22, 2020, all seven defendants have been convicted of conspiracy to commit bank fraud, in violation of 18 U.S.C. § 1349. The following five defendants have now been sentenced by the Judge Koh:
Defendant
Place of Birth
Date of Sentencing
Sentence Imposed
Monica Mason
Oakland, CA
January 22, 2020
- 106 months in prison;
- Over $3.3 million in restitution to victims;
- 3 years supervised release;
- $100 Special Assessment Fee;
- Forfeiture.
Brandon Bodine
Hayward, CA
November 27, 2019
- 94 months in prison;
- Over $3.9 million in restitution to victims;
- 3 years supervised release;
- $100 Special Assessment Fee;
- Forfeiture.
Katherine Baldridge
Berkeley, CA
October 11, 2019
- 87 months in prison;
- Over $3.6 million in restitution to victims;
- 3 years supervised release;
- $100 Special Assessment Fee;
- Forfeiture.
Armida Ruelas
Hayward, CA
November 27, 2019
- 84 months in prison;
- Over $4.3 million in restitution to victims;
- 3 years supervised release;
- $100 Special Assessment Fee;
- Forfeiture.
Raymundo Ramos
San Leandro, CA
December 4, 2019
- 30 months in prison;
- Over $270,000 in restitution to victims;
- 3 years supervised release;
- $100 Special Assessment Fee;
- Forfeiture.
Prince and Singh have not yet been sentenced.
Assistant U.S. Attorney Marissa Harris is prosecuting the case with the assistance of Susan Kreider, Nina Burney-Williams, and Jessica Leung. The prosecution is the result of an investigation by the R.E.A.C.T. Taskforce, a joint federal and state taskforce targeting identity theft crimes in the Bay Area that includes the Santa Clara County District Attorney’s Office and Berkeley Police Department. Special Agents from the Federal Bureau of Investigation and the U.S. Secret Service also assisted the investigation.
Humboldt County Resident Sentenced to More Than Six Years in Prison for Illegally Possessing Firearms as A Convicted FelonRead the Press Release
SAN FRANCISCO – Joshua Wentworth was sentenced to 77 months in prison for being a felon in possession of a firearm and ammunition, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The sentence was handed down by the Honorable Charles R. Breyer, U.S. District Judge.
Wentworth, 31 of Eureka, pleaded guilty to the charge on October 16, 2019. According to the plea agreement, Wentworth admitted that on May 12, 2019, he possessed seven firearms, including two AR-15 assault rifles and one pistol with an attached Glock switch conversion device. According to documents filed by the government during sentencing, the conversion device made the pistol operate as a fully automatic firearm. In addition to the firearms, Wentworth admitted he possessed over 400 rounds of ammunition, some of which were loaded in various high-capacity magazines, including two 30-round magazines for the assault rifles and a 50-round drum magazine for a .40 caliber pistol. Wentworth also admitted that at the time he possessed the weapons and ammunition, he was a convicted felon and therefore was ineligible to possess the items.
A federal grand jury indicted Wentworth on August 20, 2019, charging him with one count of being a felon in possession of a firearm and ammunition in violation of 18 U.S.C. § 922(g)(1). Wentworth pleaded guilty to the charge.
At the sentencing hearing, Judge Breyer described the nature of the firearms found in the Wentworth’s possession as “scary.” In addition, the government’s sentencing memorandum highlighted text messages in which Wentworth discussed purchasing firearms, his efforts to locate a trailer with a large amount of cash in it, driving to San Francisco to find a “target,” and his need to borrow another person’s bullet proof vest.
In addition to the prison term, Judge Breyer sentenced the defendant to a 3-year period of supervised release and ordered him to pay a $100 special assessment. Wentworth is in federal custody and will begin serving his sentence immediately.
Assistant U.S. Attorney Patrick O’Brien is prosecuting the case with the assistance of Morgan Byrne. The prosecution is the result of an investigation by the FBI, the Humboldt County Sheriff’s Office, and the Humboldt County District Attorney’s Office.
Pleasant Hill Resident Charged with Production and Possession of Child PornographyRead the Press Release
OAKLAND - A federal grand jury indicted Daniel Joseph Feliciano charging him with producing and possessing child pornography, announced United States Attorney David L. Anderson and Homeland Security Investigations (HSI) San Francisco Special Agent in Charge Ryan L. Spradlin.
According to the indictment, Feliciano, 29, of Pleasant Hill, Calif., is alleged to have coerced a minor to engage in sexually explicit conduct in order to produce a visual depiction of the conduct. Feliciano is also alleged to have knowingly possessed child pornography.
According to a criminal complaint filed December 12, 2019, in connection with this case, this investigation began with a series of tips sent in October and December 2019 to the CyberTipline maintained by the National Center for Missing and Exploited Children (NCMEC). The tips, referred to as CyberTips by the NCMEC, contained reports from internet service providers to NCMEC as well as the actual files from the accounts being reported. Investigators from the Silicon Valley Internet Crimes Against Children Task Force traced the files, that included depictions of minors engaged in sexually explicit conduct, to an email account and an IP address in defendant’s name.
According to the complaint, the first CyberTip came from Dropbox in October 2019. It contained a report and approximately 182 files, including three videos of prepubescent girls engaged in sexually explicit conduct. Investigators discovered that the last IP address used to access the account could be traced to Feliciano.
In December 2019, several CyberTips alerted NCMEC regarding child pornography stored in a Google account. The files included two videos of a 9-10 year old child engaged in sexually explicit conduct. Investigators traced the Google account and the videos to Feliciano.
The indictment charges Feliciano with one count of production of child pornography, in violation of 18 U.S.C. § 2251(a), and one count of possession of child pornography, in violation of 18 U.S.C. § 2251(a)(4)(B) and (b)(2).
Feliciano is next scheduled to appear on February 18, 2020, at 1 p.m. before the Hon. Jeffrey S. White, U.S. District Judge.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted on the production of child pornography charge, the defendant faces a maximum sentence of 30 years imprisonment, a minimum sentence of 15 years, five years to a life term supervised release, a fine of $250,000, a special assessment of $5,100, criminal forfeiture, and restitution. If convicted on the possession of child pornography charge, the defendant faces a maximum sentence of 20 years imprisonment, five years to a life term supervised release, a fine of $250,000, a special assessment of $5,100, 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.
Suspected child sexual exploitation may be reported to the National Center for Missing & Exploited Children, via its toll-free 24-hour hotline, 1-800-843-5678. Indeed, a NCMEC tip led to the investigation in this case.
Assistant U.S. Attorney Jonathan Lee is prosecuting the case with the assistance of Kay Konopaske and Kathleen Turner. The prosecution is the result of an investigation by the HSI, the Silicon Valley Internet Crimes Against Children Task Force, and the Pleasant Hill Police Department.
Bay Area Man Sentenced to Four Years in Prison for Possessing Child PornographyRead the Press Release
SAN FRANCISCO – Mark Miner was sentenced to 48 months in prison for possessing child pornography, announced United States Attorney David L. Anderson and Federal Bureau of Investigation (FBI) Special Agent in Charge John F. Bennett. The sentence was handed down by the Honorable Edward M. Chen, U.S. District Judge.
Miner, 51, of San Francisco, Calif., pleaded guilty to the charge on July 17, 2019. In pleading guilty, Miner admitted he possessed more than 800 images and videos of child pornography that he stored online with an internet file-hosting service. According to the plea agreement, Miner sent links to his online account via texts and other electronic communications in order to try to distribute the images and videos to others.
A federal grand jury indicted Miner on April 25, 2019, charging him with one count of possession of child pornography, in violation of 18 U.S.C. § 2252(a)(4)(B) and (b)(2). Miner pleaded guilty to the count.
In addition to the prison term, Judge Chen sentenced the defendant to a five-year period of supervised release. The defendant was immediately remanded into custody.
Assistant United States Attorney Aseem Padukone is prosecuting the case with the assistance of Margoth Turcios. The prosecution is the result of an investigation by the San Francisco Police Department.
South Bay Veteran Pleads Guilty to Impersonating A Federal OfficerRead the Press Release
SAN JOSE – Alexander Taylor pleaded guilty today to impersonating a federal officer, announced United States Attorney David L. Anderson and Drug Enforcement Administration Special Agent in Charge Daniel C. Comeaux. The Honorable Lucy H. Koh, U.S. District Judge, accepted the guilty plea.
According to the plea agreement, Taylor, 49, of San Jose, Calif., conducted a vehicle stop using his personal vehicle (identified as a Volkswagen Jetta in other filings by the government) that Taylor had equipped with emergency lights and a siren, similar to a law enforcement equipment. After pulling the vehicle over, Taylor falsely identified himself to the driver as a DEA Special Agent and displayed a fake DEA badge that he had purchased on the internet. According to the plea agreement, Taylor told the driver that he was going to write her a traffic citation; but when the driver responded that she did not believe that DEA Special Agents could issue traffic citations, Taylor left the scene.
A federal grand jury indicted Taylor on July 11, 2019, with one count of false impersonation of a federal officer, in violation of 18 U.S.C. § 912, and one count of possession of a counterfeit seal of an agency of the United States, in violation of 18 U.S.C. § 506(a)(3). Under the plea agreement, Taylor pleaded guilty to false impersonation of a federal officer; if Taylor complies with the plea agreement, the remaining count will be dismissed at sentencing.
Judge Koh scheduled Taylor’s sentencing hearing for May 27, 2020. The maximum statutory penalty for impersonating a federal officer is three (3) years in prison and a fine of $250,000. Additional periods of supervised release, fines, and restitution also may be imposed 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.
Assistant U.S. Attorney Jeffrey Backhus is prosecuting the case with assistance from Elise Etter. This prosecution is the result of an investigation by the DEA.
San Jose Man Sentenced to 72 Months in Prison for Illegally Possessing Firearm as A Convicted FelonRead the Press Release
SAN JOSE – Michael Anthony Lamb was sentenced today to 72 months in prison for being a felon in possession of a firearm, announced U.S. Attorney David L. Anderson and Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) Special Agent in Charge Rayfield Roundtree. The sentence was handed down by the Honorable Lucy H. Koh, U.S. District Judge.
Lamb, 28, of San Jose, pleaded guilty to the charge on July 18, 2019. According to the plea agreement, Lamb was drinking a can of beer while sitting on a planter box on a light rail platform in San Jose, when he noticed two law enforcement officers approaching him. One of the officers waived at Lamb and asked him to approach. Instead, Lamb picked up his backpack and ran. According to the plea agreement, Lamb ran because he knew he would get in trouble if he were arrested. Lamb was a convicted felon and knew he was not entitled to possess a firearm, but he still was carrying a loaded 9mm Kel-Tec PF-9 pistol with seven full-metal jacket 9mm rounds in the magazine. Lamb was also carrying approximately four grams of cocaine and a jar containing approximately 53 grams of marijuana. While running away, Lamb heard the officers order him to stop. Instead of stopping, Lamb continued to run, threw the loaded gun into some nearby bushes, and threw his backpack aside. Lamb was quickly arrested and the gun and backpack were recovered.
On June 27, 2019, Lamb was charged by information with one count of being a felon in possession of a firearm and ammunition, in violation of 18 U.S.C. § 922(g)(1). Lamb pleaded guilty to the charge. Lamb has been in custody since March 11, 2019.
In addition to the prison term, Judge Koh ordered Lamb to serve a three-year period of supervised release and to pay a $100 special assessment.
Assistant United States Attorney Jeff Nedrow is prosecuting the case with the assistance of Susan Kreider. The prosecution is the result of an investigation conducted by the ATF and the Santa Clara County Sheriff’s Office.
San Jose Gang Member Sentenced to Two Years in Prison for Illegally Possessing Firearm as A Convicted FelonRead the Press Release
SAN JOSE – Marcos Barajas was sentenced today to 24 months in prison for being a felon in possession of a firearm, announced U.S. Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John Bennett. The sentence was handed down by the Honorable Lucy H. Koh, U.S. District Judge.
Barajas, 34, of San Jose, pleaded guilty to the charge on October 10, 2019. According to the plea agreement, Barajas posted a picture on Facebook of him holding the gun. At a later point, he wrapped the gun in a bandana and stored it in an air conditioning vent above a bedroom in his residence in San Jose, where it was subsequently discovered by law enforcement. Following his arrest, Barajas admitted to knowingly possessing the gun.
According to a complaint filed in the case, Barajas was a self-identified and documented Sureño street gang member and member of the “East Side Clanton” or “ESC” branch of the gang in San Jose.
On October 4, 2019, Barajas was charged by information with one count of being a felon in possession of a firearm and ammunition, in violation of 18 U.S.C. § 922(g)(1). Barajas pleaded guilty to the charge. Barajas has been in custody since May 23, 2019.
In addition to the prison term, Judge Koh ordered Barajas to serve a three-year period of supervised release and to pay a $100 special assessment.
Assistant United States Attorney Jeff Nedrow is prosecuting the case with the assistance of Susan Kreider. The prosecution is the result of an investigation conducted by the FBI and the San Jose Police Department.