Northern District of California
Press releases recorded for this federal judicial district.
Oakland Resident Sentenced to More Than Eight Years in Prison for 19 Bank Robberies Across Northern CaliforniaRead the Press Release
SAN FRANCISCO – Duane Kurt Makela was sentenced to 97 months in prison in connection with ten armed bank robberies, seven unarmed bank robberies, and two attempted bank robberies across Northern California, announced Northern District of California Acting U.S. Attorney Adam A. Reeves, U.S. Attorney McGregor W. Scott of the Eastern District of California, and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The sentence was handed down by the Honorable Charles R. Breyer, Senior U.S. District Judge.
Makela, 50, of Oakland, pleaded guilty to the charges on October 3, 2019. Makela admitted in open court that between March 2018 and February 2019, he committed or attempted to commit 19 robberies of banks and credit unions largely located in the San Francisco Bay Area but also in towns in or near the Sierra Nevada Mountains. As part of his plea, Makela agreed that he entered the banks and credit unions and demanded that employees hand over money. Makela further acknowledged that during each armed robbery, he brandished what appeared to be a handgun and directed employees of the banks and credit unions to hand over money. In total, Makela stole $69,002.
Makela robbed or attempted to rob the following banks and credit unions on the following dates:
CHARGE
DATE
BANK OR CREDIT UNION
LOCATION
1. Armed Bank Robbery
March 21, 2018
Pacific Service Credit Union
Pleasant Hill, CA
2. Bank Robbery
March 24, 2018
Wells Fargo Bank
South Lake Tahoe, CA
3. Bank Robbery
March 30, 2018
U.S. Bank
Oakland, CA
4. Armed Bank Robbery
April 11, 2018
Pacific Service Credit Union
San Ramon, CA
5. Armed Bank Robbery
April 13, 2018
Comerica Bank
Palo Alto, CA
6. Bank Robbery
April 17, 2018
Bank of the West
Orinda, CA
7. Attempted Bank Robbery
May 11, 2018
U.S Bank
San Ramon, CA
8. Armed Bank Robbery
May 12, 2018
Chase Bank
Oakland, CA
9. Bank Robbery
May 24, 2018
Sierra Central Credit Union
South Lake Tahoe, CA
10. Bank Robbery
June 6, 2018
U.S. Bank
Roseville, CA
11. Armed Bank Robbery
June 12, 2018
U.S. Bank
Pollock Pines, CA
12. Armed Bank Robbery
August 25, 2018
Wells Fargo Bank
Mill Valley, CA
13. Attempted Bank Robbery
October 18, 2018
First Republic Bank
Burlingame, CA
14. Armed Bank Robbery
October 19, 2018
Meriwest Credit Union
Mountain View, CA
15. Armed Bank Robbery
October 22, 2018
Chase Bank
South San Francisco, CA
16. Bank Robbery
November 3, 2018
Wells Fargo Bank
Orinda, CA
17. Armed Bank Robbery
November 5, 2018
U.S. Bank
Alameda, CA
18. Armed Bank Robbery
December 23, 2018
U.S. Bank
Castro Valley, CA
19. Bank Robbery
February 4, 2019
Wells Fargo Bank
Palo Alto, CA
On May 7, 2019, a federal grand jury indicted Makela, charging him with four counts of armed bank robbery, in violation of 18 U.S.C. § 2113(a) and (d), and one count of unarmed bank robbery, in violation of 18 U.S.C. § 2113(a). On September 25, 2019, Makela waived his right to indictment and to venue for those charges arising out of the Eastern District of California, and he was arraigned on a superseding information alleging the above-listed crimes. On October 3, 2019, Makela pleaded guilty to all 19 counts in the superseding information.
In addition to the prison term, Judge Breyer ordered Makela to serve a three-year period of supervised release and ordered full restitution to the victim banks and credit unions.
Northern District of California Assistant U.S. Attorney Nicholas Walsh is prosecuting the case with the assistance of Rosario Calderon and Margoth Turcios. Eastern District of California Assistant U.S. Attorney Michelle Rodriguez assisted.
The prosecution is the result of investigations by the FBI with assistance from the police departments of Pleasant Hill, Orinda, Daly City, South Lake Tahoe, Oakland, San Ramon, Palo Alto, Roseville, Burlingame, Mountain View, South San Francisco, and Alameda, as well as the Contra Costa County, El Dorado County, Marin County, and Alameda County Sheriff’s Offices.
Former Marin Boy Scout Leader Sentenced to 33 Months in Prison for Possession of Child PornographyRead the Press Release
SAN FRANCISCO – John Blecka was sentenced to 33 months in prison for possession of child pornography, announced United States Attorney David L. Anderson and Homeland Security Investigations (HSI) Special Agent in Charge Tatum King. The sentence was handed down today by the Honorable William Alsup, U.S. District Court Judge.
Blecka, 65, of San Rafael, Calif., pleaded guilty to the charge on October 1, 2019. In his plea agreement, Blecka admitted that in May 2019, he possessed more than 150 images and videos containing child pornography. At the time of the charged conduct, Blecka was a volunteer with the Boy Scouts of America and had served in a local leadership position with the organization.
A federal grand jury indicted Blecka on July 16, 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).
In addition to the term of imprisonment, Judge Alsup sentenced Blecka to a 10-year term of supervised release and also ordered him to pay $9,000 in restitution and to register as a sex offender. Judge Alsup ordered Blecka to begin serving his sentence on April 30, 2020.
Christina Liu and Ross Weingarten are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Margoth Turcios. The prosecution is the result of an investigation by HSI at the U.S. Department of Homeland Security, with the assistance of the San Rafael Police Department.
California Aviator Convicted of Making False StatementsRead the Press Release
SAN FRANCISCO – Nicholas King Beyer was convicted in United States District Court today of making false statements to the Federal Aviation Administration (FAA) on pilot medical certification forms, announced United States Attorney David L. Anderson; U.S. Department of Veterans Affairs Office of Inspector General, Criminal Investigations Division, Special Agent in Charge James Wahleithner; and U.S. Department of Transportation Office of Inspector General Regional Acting Special Agent in Charge Susan Ocampo. The verdict was handed down today following a half-day bench trial before the Honorable Charles R. Breyer, U.S. District Judge.
Judge Breyer found Beyer, 34, of Discovery Bay, Calif., guilty on two counts of making false statements to the FAA, in violation of 18 U.S.C. § 1001(a)(2), and two counts of falsifying, concealing, or covering up material facts by trick, scheme, or device, in violation of 18 U.S.C. § 1001(a)(1).
Evidence at trial showed that Beyer made false statements on applications for an airman medical certificate, FAA Form 8500-8, which he submitted to the FAA in 2016, and again in 2018. The FAA’s airman medical certificate process is the mechanism by which the FAA evaluates whether pilots are mentally and physically fit to fly. The evidence showed that Beyer falsely stated on both of his Form 8500-8s that he had never been diagnosed with, did not have, and had never had a mental disorder of any sort; when in fact Beyer had been diagnosed with Major Depressive Disorder by the Department of Veterans Affairs (VA) in 2016. The evidence also showed that Beyer falsely stated on the forms that he was only receiving disability benefits for knee and back injuries from the VA, when he was also receiving disability benefits for Major Depressive Disorder.
A federal grand jury indicted Beyer on August 23, 2018, charging him with two counts of making false statements to the FAA, in violation of 18 U.S.C. § 1001(a)(2), and two counts of falsifying, concealing, or covering up material facts by trick, scheme, or device, in violation of 18 U.S.C. § 1001(a)(1). Judge Breyer convicted Beyer on all four counts.
Judge Breyer scheduled the defendant’s sentencing hearing for April 22, 2020.
Beyer faces maximum statutory penalties of five (5) years imprisonment and a fine of $250,000, plus restitution for each violation of 18 U.S.C. § 1001(a)(2) and each violation of 18 U.S.C. § 1001(a)(1). 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 U.S. Attorney Alexandra Shepard and Assistant U.S. Attorney David Ward are prosecuting the case with the assistance of Hector Lopez. The prosecution is the result of an investigation by the Department of Transportation Office of Inspector General and the Department of Veterans Affairs, Office of Inspector General.
Oakland Man Sentenced to over Three Years in Prison for Possession of Firearm and AmmunitionRead the Press Release
OAKLAND – Mekivil Julius Franklin was sentenced today to 41 months in prison for being a felon in possession of a firearm and ammunition, announced United States Attorney David L. Anderson and Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) Special Agent in Charge Rayfield Roundtree. The sentence was handed down by the Honorable Haywood S. Gilliam, Jr., U.S. District Judge.
Franklin, 49, of Oakland, Calif., pleaded guilty to the charge on October 11, 2019. According to papers filed by the government, Franklin was driving in Oakland in the early morning hours on August 2, 2018, when police attempted to stop him. Rather than yielding to the police, Franklin drove away. Franklin led police on a lengthy chase, at times reaching speeds of 90 or 100 MPH on the I-880 freeway. The pursuit ended when Franklin crashed into a police vehicle in the intersection of 9th Avenue and East 12th Street in Oakland. Two Oakland Police Department officers sustained minor injuries as a result of the crash. Franklin seriously injured himself as well. Police found that Franklin was in possession of a loaded Ruger pistol. According to his plea agreement, Franklin acknowledged he had been previously convicted of felonies, and therefore he was not eligible to possess a firearm or ammunition.
A federal grand jury indicted Franklin on September 18, 2018, charging him with being a felon in possession of a firearm and ammunition, in violation of 18 U.S.C. § 922(g)(1). Franklin pleaded guilty to the charge.
In addition to the prison term, Judge Gilliam sentenced the defendant to a three-year period of supervised release. The defendant is in custody and will begin serving his sentence immediately.
Assistant U.S. Attorney Philip Kopczynski is prosecuting the case with the assistance of Helen Yee and Adrienne DelaPena. The prosecution is the result of an investigation by ATF and the Oakland Police Department.
UK Resident Pleads Guilty to Possession of Stolen Credit Card CredentialsRead the Press Release
SAN FRANCISCO – Malik Mohsan Abdullah pleaded guilty to the possession of counterfeit access devices in connection with his receipt and transfer of stolen credit card information, announced United States Attorney David L. Anderson and United States Secret Service Special Agent in Charge Thomas C. Edwards.
According to the plea agreement, Abdullah, 36, a resident of the United Kingdom, received 5,674 stolen credit card credentials via email during the period from January through March 2017. These credentials included cards issued by U.S. banks and belonging to individuals in the Northern District of California. The stolen credentials included full credit card numbers, expiration dates, verification numbers, addresses, and the countries connected to the accounts. According to the plea agreement, Abdullah knew that a significant number of the stolen credentials were used to defraud the rightful cardholders. In the plea agreement, Abdullah acknowledged that as of May 13, 2019, approximately $124,579.53 in unauthorized charges had been attributed to the stolen cards after Abdullah received them.
According to an affidavit filed by a special agent of the U.S. Secret Service, investigators working with a cooperator identified a vendor offering stolen credit cards for sale on a dark web Internet forum. Investigators were able to trace digital currency transactions with the vendor to an email address, whose owner supervised and controlled the flow of stolen credit cards to multiple suspects across the United States, Europe, and the Middle East. That account owner transferred thousands of stolen payment card numbers to Abdullah. Abdullah was arrested by authorities in the United Kingdom and extradited to the United States.
Abdullah was charged by information on December 16, 2019, with one count of possession of fifteen or more counterfeit access devices, in violation of 18 U.S.C. § 1029(a)(3). Abdullah pleaded guilty to that count.
The sentencing hearing for Abdullah is scheduled for February 26, 2020, before the Honorable Edward M. Chen, United States District Judge. Pursuant to the terms of his plea agreement, Abdullah has agreed that a reasonable and appropriate disposition of his case would include a term of imprisonment of two (2) years, three (3) years of supervised release, payment of a $100 special assessment, and a fine to be imposed by the court. 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.
This prosecution is the result of an investigation by the U.S. Secret Service and is being prosecuted by the Special Prosecutions Section of the U.S. Attorney’s Office.
San Anselmo Resident Pleads Guilty in ID Theft and Tax Fraud SchemeRead the Press Release
SAN FRANCISCO – Parnian Djafarzadeh, aka Parnian Clark, aka Saundra Djafarzadeh, pleaded guilty to possessing stolen mail, filing a false claim, and committing wire fraud in connection with a multi-year tax fraud scheme, announced United States Attorney David L. Anderson and Internal Revenue Service (IRS), Criminal Investigation, Special Agent in Charge Kareem Carter. The guilty pleas were accepted by the Honorable Charles R. Breyer, Senior United States District Judge.
According to the plea agreement, Djafarzadeh, 42, of San Anselmo, Calif., admitted she devised and executed a scheme to defraud the United States by filing false federal income tax returns with the IRS from 2010 through 2012. Djafarzadeh further admitted she wrongfully obtained personal identifying information, including names and social security numbers, of Marin County residents. She then used that information to prepare and electronically file false tax returns in their names without their knowledge or consent. In addition, according to the plea agreement, Djafarzadeh filed fraudulent federal income tax returns claiming a total of $219,635.89, as a result of which the IRS paid refunds of at least $90,822.30. Djafarzadeh also admitted in the plea agreement that she obtained and knowingly possessed stolen mail from one of her neighbors.
A federal grand jury indicted Djafarzadeh on April 21, 2016, charging her with one count of possession of stolen mail, in violation of 18 U.S.C. § 1708; fourteen counts of false claims, in violation of 18 U.S.C. § 287; three counts of wire fraud, in violation of 18 U.S.C. § 1343; and three counts of aggravated identity theft, in violation of 18 U.S.C. § 1028A. Djafarzadeh pleaded guilty to one count of possession of stolen mail, one count of filing a false claim, and one count of wire fraud. If she complies with the plea agreement, the remaining counts will be dismissed at sentencing.
Judge Breyer scheduled Djafarzadeh’s sentencing hearing for April 29, 2020. Pursuant to the plea agreement, Djafarzadeh has agreed to pay restitution of at least $90,952.48. The maximum statutory penalty for possession of stolen mail, in violation of 18 U.S.C. § 1708, is five years in prison and a fine of $250,000. The maximum sentence for false claims, in violation of 18 U.S.C. § 287, is five years in prison and a fine of $250,000. The maximum sentence for wire fraud, in violation of 18 U.S.C. § 1343, is twenty years in prison and a fine of $250,000. Additional fines, forfeitures, restitution, and special assessments also may be imposed. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Thomas Moore is prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation, with the assistance of the U.S. Postal Inspection Service.
Federal Firearms Charges Filed Against Two San Francisco Residents for Respective Roles in Shootout Resulting in MurderRead the Press Release
SAN FRANCISCO – A federal grand jury issued a superseding indictment charging Robert Manning and Jamare Coats for their respective roles in the March 23, 2019, shootout at the Fillmore Heritage Center, announced United States Attorney David L. Anderson and Federal Bureau of Investigation, Special Agent in Charge John F. Bennett. U.S. Attorney Anderson announced the charges as part of a press conference scheduled to coincide with Law Enforcement Appreciation Day (LEAD).
“We are all safer when federal and local law enforcement are allowed to work together,” said U.S. Attorney Anderson. “Cases clear faster when we remove obstacles to cooperation. There is no greater contributor to public safety than professional investigations and prompt charging decisions.”
"The streets of San Francisco cannot be used as a playground for gang warfare," said FBI Special Agent in Charge Bennett. "We work side-by-side with our state and local partners with a collaborative focus on keeping our neighborhoods safe."
"I am grateful for the assistance of the U.S. Attorney’s Office and the San Francisco office of the Federal Bureau of Investigations," said San Francisco Police Chief Scott. "Through the efforts of San Francisco's finest working in collaboration with our federal partners, we were able to obtain indictments in a violent crime that impacted the residents of our City, especially those who reside in the Fillmore District."
According to the superseding indictment, San Francisco residents Manning, 28, and Coats, 26, were members of a street gang called Mac Block that operated in San Francisco’s Western Addition. The indictment alleges Mac Block was an enterprise whose members engaged in racketeering activity, including murder, attempted murder, and robbery. According to the indictment, on March 23, 2019, Manning and Coats used and carried a firearm in connection with the murder of a victim. The indictment alleges that Manning and Coats used and carried a firearm for the purpose of maintaining and increasing their position in the Mac Block street gang.
Additional facts about the alleged crime appear in an order filed September 3, 2019, directing that Coats will remain detained pending further proceedings. For example, in the order, U.S. Magistrate Judge Elizabeth D. Laporte recites that the government proffered several facts at a hearing during which issues about detention were discussed. Among the facts proffered by the government were the following: Coats fired a weapon in front of the Fillmore Heritage Center, the victim died, and multiple bystanders were struck by gunfire. In addition, other court documents make clear that one bystander was paralyzed as a result of being struck by a bullet during the shootout.
Manning and Coats are charged with use of a firearm in furtherance of a crime of violence causing death, in violation of 18 U.S.C. § 924(j). In addition, each defendant is charged with one count of being a felon in possession of a firearm, in violation of 18 U.S.C. § 922(g).
Both defendants are in custody. Coats is scheduled to be arraigned on January 10, 2020, before U.S. Magistrate Judge Sallie Kim, while Manning made his initial federal court appearance on January 2, 2020, in Fresno, California.
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 924(j) charge, the defendants face the maximum statutory sentence of the death penalty. If convicted of a 922(g) charge, the defendants face a maximum statutory sentence of 10 years in prison, 3 years of supervised release, 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.
The United States Attorney’s Office’s Organized Crime Strike Force is prosecuting the case. The prosecution is the result of an investigation by the Federal Bureau of Investigation and the San Francisco Police Department.
LEAD was organized by Concerns of Police Survivors and was created to support the needs of local law enforcement officers. The event first was observed in 2015 and has been celebrated each year to address officer wellness, resilience, and suicide prevention efforts.
Two Associates of Nuestra Familia Prison Gang Plead Guilty to Federal RICO ConspiracyRead the Press Release
SAN JOSE – Erik Lopez, a/k/a Bimbo, and Alejo Alex Alegre, IV, a/k/a Chino, 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 Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The guilty pleas were accepted by the Honorable Beth L. Freeman, United States District Judge. Five additional members of the prison gang have pleaded guilty to related conspiracy charges, one of whom Judge Freeman sentenced today to seven years in prison.
According to the plea agreements, between December 2, 2012, and April 14, 2014, Lopez, 25, and Alegre, 28, both were members of the Nuestra Familia/Salinas Norteños 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, Lopez and Alegre admit to participating in the distribution of narcotics to other inmates at Monterey County Jail. Also, the plea agreements 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.
Alegre admitted that he participated in the November 13, 2013, removal of a victim from one of the housing units of the Monterey County Jail. Alegre admitted that he was the hitter for the removal and repeatedly stabbed the victim in the head, torso, and arms. Alegre acknowledged that immediately after the victim was stabbed, two bombers began punching and kicking the victim to allow Alegre to escape being caught by guards with the stabbing weapon.
Lopez admitted that he participated in the December 2, 2012, removal of a victim from one of the housing units at the Monterey County Jail. Lopez admitted that he was a bomber in the attack and that he and another bomber punched and kicked the victim to inflict the maximum damage possible and to allow the hitter to escape. Lopez acknowledged that the victim was stabbed in the chest and back over 20 times by the hitter. Lopez also admitted being a bomber on the February 25, 2013, removal of a victim. Lopez punched and kicked the victim after a hitter stabbed the victim in the head.
On September 27, 2018, a federal grand jury indicted Lopez, Alegre, and several other defendants with racketeering conspiracy, in violation of 18 U.S.C. § 1962(d). Both Lopez and Alegre also were 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). Alegre 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). Lopez was also charged with felon in possession of a firearm and ammunition, in violation of 18 U.S.C. § 922(g)(1). Both 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 Lopez for April 7, 2020, and the sentencing hearing for Alegre for May 5, 2020. Pursuant to the terms of their plea agreements, both Lopez and Alegre have agreed that a reasonable and appropriate disposition of their respective cases 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 are scheduled to be sentenced in the case:
Name
Charges
Sentencing
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
Additionally, today, Judge Freeman sentenced Alberto Moreno, a/k/a Doughboy, to seven years in prison for his role in the criminal RICO Enterprise. Moreno, 26, pleaded guilty to racketeering conspiracy on November 12, 2019. In his plea agreement, Moreno admitted that he was a member of the Enterprise and that he participated in the distribution of narcotics to other inmates at Monterey County Jail. Moreno also admitted that he participated as a bomber in an April 29, 2013, attack, in which the victim was stabbed in the head by the hitter.
Assistant 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.
East Bay Drug Trafficker Sentenced to Five Years in Prison for Possession of FirearmsRead the Press Release
OAKLAND – Donta Lashaun Perry was sentenced today to 60 months and one day in prison for being a felon in possession of a firearm and for possessing firearms in connection with drug trafficking, announced United States 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 Jeffrey S. White, U.S. District Judge.
Perry, 31, of San Leandro, Calif., pleaded guilty to the charges on October 1, 2019. According to his plea agreement, Perry admitted that he possessed a 9mm handgun and an AR 15 short barreled rifle when the California Highway Patrol arrested him on March 7, 2018. In the agreement, Perry also admitted that on that date he was a convicted felon who was not eligible to possess a firearm. Perry further admitted that he possessed marijuana, that he intended to distribute the drugs, and that he possessed his firearms in furtherance of his drug trafficking, including to defend his drugs against potential theft.
Perry initially was charged by the Alameda County District Attorney’s Office, but absconded after posting bail. He remained a fugitive for approximately 10 months until his arrest in the Western District of Oklahoma in March 2019.
A superseding information was filed on September 30, 2019, charging Perry with one count of felon in possession of a firearm, in violation of 18 U.S.C. § 922(g)(1), and one count of using, carrying, or possessing a firearm during and in furtherance of a drug trafficking crime, in violation of 18 U.S.C. § 924(c). Perry pleaded guilty to both charges.
In addition to the prison term, Judge White ordered Perry to serve a three-year period of supervised release and to pay a $200 special assessment.
Special Assistant United States Attorney Christopher Vieira is prosecuting the case, with the assistance of Lenora Hamilton. This case is the result of an investigation by the ATF and the California Highway Patrol.
Ukrainian National Admits Piloting 590-Foot Vessel in San Francisco Bay While IntoxicatedRead the Press Release
SAN FRANCISCO – Vadim Humenyuk pleaded guilty to operating a commercial cargo ship while intoxicated, announced United States Attorney David L. Anderson and U.S. Coast Guard Captain of the Port Marie Byrd. The plea was accepted by U.S. Magistrate Judge Thomas S. Hixon.
In pleading guilty, Humenyuk, 51, of Izmail, Ukraine, admitted that he was intoxicated while serving as the Master, or head officer, of the Rainbow Quest, a Gibraltar-flagged bulk carrier. The 590-foot long Rainbow Quest was in San Francisco Bay and preparing to sail to South Korea when Humenyuk was found to be intoxicated.
“I appreciate the outstanding collaboration from the San Francisco Bar Pilots, Customs and Border Protection, and the U.S. Attorney’s office for ensuring safety on our waters, and protecting the maritime public, property, and environment,” said Captain Byrd. “The Coast Guard and our partners will not tolerate operating a vessel under the influence from any mariner, much less a commercial ship captain preparing to get a large cargo ship underway in San Francisco Bay.”
The investigation began on Tuesday, December 10, 2019, when a San Francisco Bar Pilot contacted Coast Guard Sector San Francisco Vessel Traffic Service personnel reporting that the captain of the Rainbow Quest appeared to be intoxicated. Investigators of the U.S. Coast Guard administered sobriety tests to Humenyuk late on the evening of December 10, 2019, and the early morning of December 11, 2019. After Humenyuk failed the sobriety tests, he was charged with operating a non-recreational vessel under the influence of alcohol, in violation of 46 USC 2302(c), a Class A misdemeanor.
Humenyuk faces a maximum statutory penalty of up to one year of incarceration, an additional year of supervised release, and a fine of up to $100,000. Magistrate Judge Hixson scheduled Humenyuk’s sentencing hearing for January 3, 2019 at 10:00 a.m.
The case is being prosecuted by Special Assistant United States Attorney Alexandra Shepard. This case is being investigated by the United States Coast Guard.
Sonoma County CEO Pleads Guilty to Charges Stemming from $25-65 Million Student Loan Repayment Services ScamRead the Press Release
SAN FRANCISCO – Brandon Frere pleaded guilty today to wire fraud and money laundering charges in connection with a multi-million-dollar scheme to use deceptive sales tactics to convince people to enroll in his companies’ student loan repayment services programs, announced United States Attorney David L. Anderson and Federal Bureau of Investigation, Special Agent in Charge John F. Bennett. The plea was accepted by the Hon. Susan Illston, United States District Judge.
Frere, 42, of Sonoma County, owned and operated three companies—American Financial Benefits Center (AFBC), the Financial Education Benefits Center (FEBC), and Ameritech Financial (Ameritech)—all based in Rohnert Park, Calif. According to his plea agreement, between January of 2014 and November of 2018, Frere used the companies to market student loan document preparation services for borrowers who wished to apply for programs through the Department of Education. Frere targeted potential customers who were seeking federal loan forgiveness, loan consolidation, and reduced-payment programs. When Frere’s companies sold consumers “document preparation” services, they also sold them a purportedly optional membership in a “financial education benefits program.” The so-called benefits program provided the opportunity to customers to sign up for services such as LifeLock identity theft protection and roadside assistance.
Frere admitted he instructed his employees to follow misleading sales scripts and to employ deceptive sales tactics so that people would enroll for services without fully understanding what they were paying for. For example, when initially enrolling consumers in the document preparation service and signing them up for the financial education benefits program, Frere hid the fees for the financial education benefits program and described the benefits program in a way that made it seem like the cost of the program was included in the document preparation services. Further, Frere admitted he instructed enrollment associates not to present the benefits program as an optional or additional service to the document preparation service; this way, consumers would purchase the benefits packages without knowing they were doing so.
In sum, Frere instructed his employees (1) to make false statements concerning the companies’ ability to deliver fixed payments for the life of student loans and loan forgiveness under alternative repayment plans; (2) to engage in enrollment practices that improperly inflated a consumers’ family size to reduce their prospective payments under federal alternative repayment plans (and therefore make it appear to the consumer that their monthly payments would be lower than what they would have been if the family size were not inflated); and (3) to hide the monthly fees that consumers would pay for a purportedly optional financial education benefits program while leading victims to believe that the benefits program was already included in the document preparation service. Frere admitted for the purposes of sentencing that the amount of losses attributable to his scheme was no less than $25,000,000 and up to $65,000,000.
Moreover, Frere admitted that in order to conceal the proceeds of his wire fraud scheme, in 2015, he began transferring to overseas bank accounts that he controlled large sums of the funds that he had received through the scheme. He continued this process in August 2017, after he became involved in litigation with the Federal Trade Commission (“FTC”) and became concerned the FTC or a court might be able to seize the proceeds of his fraud. The FTC filed a civil complaint in February 2018 against Frere and his companies in federal court in Oakland. (Federal Trade Commission v. American Financial Benefits, et al., Case No. CV 18-00806-SBA).
Frere was arrested December 5, 2018, at SFO as he attempted to board a flight to Cancun, Mexico. He is now free on bond pending sentencing. Judge Illston scheduled Frere’s sentencing for March 27, 2020 at 11:00 AM.
Frere was charged by information on October 1, 2019 with one count of wire fraud, in violation of 18 U.S.C. § 1343, and one count of money laundering, in violation of 18 U.S.C. § 1956(a)(2)(B). Frere pleaded guilty to both counts. Frere faces a maximum sentence of 20 years in prison, for each count. In addition, with respect to the fraud count, Frere faces a fine of $250,000, or the greater of twice the gross gain or twice the gross loss from the fraud. With respect to the money laundering count, Frere faces a fine of $500,000, or the greater of twice the gross gain or twice the value of the money instruments involved. In addition, restitution, supervised release, and additional fines may be ordered. However, any sentence following conviction will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Scott Joiner is prosecuting the case with the assistance of Kimberly Richardson. The prosecution is the result of an investigation by the Federal Trade Commission, Federal Bureau of Investigation, and Internal Revenue Service Criminal Investigation, with assistance from the U.S. Department of Education Office of Inspector General.
Former Chairman and Managing Partner Charged for Role in $15 Million Ponzi SchemeRead the Press Release
A California man who was the chairman and managing partner of an energy company was charged in an indictment unsealed today for his alleged operation of a Ponzi scheme involving approximately 50 victims and more than $15 million.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney David L. Anderson of the Northern District of California and Special Agent in Charge John F. Bennett of the FBI’s San Francisco Field Office made the announcement.
Joey Stanton Dodson, 55, of Indio, California, was charged in an indictment filed in the Northern District of California with four counts of wire fraud, three counts of mail fraud and three counts of money laundering. Dodson was arrested this morning and made an initial appearance before U.S. Magistrate Judge Shashi H. Kewalramani of the Central District of California.
The indictment alleges that between November 2012 and May 2015, Dodson used several related companies and partnerships, collectively known as Citadel Energy, to fraudulently raise $15 million by soliciting investments in three limited partnerships that would purportedly provide water-related services to oil and gas companies in North Dakota. The indictment further alleges that Dodson induced investors by making numerous materially false misrepresentations about these partnerships, including regarding how the investor funds would be used, the amount of his compensation and the status of a potential acquisition of the partnerships by a private equity firm.
According to the allegations in the indictment, Dodson routinely commingled the monies between the three partnerships, which resulted in investor funds being used to pay the expenses of unrelated projects. Furthermore, the indictment alleges that Dodson misappropriated and diverted more than $1.3 million of investor funds for his own personal benefit, which included repaying former investors in unrelated Dodson-led investments, gambling activity, his wife’s BMW and other expenses.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The FBI’s San Francisco Field Office investigated this case. Trial Attorney Jason M. Covert of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Sarah Griswold of the Northern District of California are prosecuting the case.
The Enforcement Division of the U.S. Securities and Exchange Commission provided valuable assistance.
The Fraud Section plays a pivotal role in the Department of Justice’s fight against white collar crime around the country.
Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website for more information.
Former Chairman and Managing Partner Charged for Role in $15 Million Ponzi SchemeRead the Press Release
SAN FRANCISCO – A federal grand jury indicted Joey Stanton Dodson, chairman and managing partner of an energy company, charging him with crimes related to an alleged $15 million Ponzi scheme involving approximately 50 victims.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, United States Attorney David L. Anderson of the Northern District of California, and Special Agent in Charge John F. Bennett of the FBI’s San Francisco Field Office made the announcement.
According to the indictment, between November 2012 and May 2015, Dodson, 55, of Indio, Calif., used several related companies and partnerships, collectively known as Citadel Energy, to fraudulently raise $15 million by soliciting investments in three limited partnerships that would purportedly provide water-related services to oil and gas companies in North Dakota. The indictment further alleges that Dodson induced investors by making numerous materially false misrepresentations about these partnerships, including regarding how the investor funds would be used, the amount of his compensation, and the status of a potential acquisition of the partnerships by a private equity firm.
According to the allegations in the indictment, Dodson routinely commingled the monies between the three partnerships, which resulted in investor funds being used to pay the expenses of unrelated projects. Furthermore, the indictment alleges that Dodson misappropriated and diverted more than $1.3 million of investor funds for his own personal benefit, which included repaying former investors in unrelated Dodson-led investments, gambling activity, his wife’s BMW, and other expenses.
The indictment charges Dodson with four counts of wire fraud, in violation of 18 U.S.C. § 1343, three counts of mail fraud, in violation of 18 U.S.C. § 1341, and three counts of money laundering, in violation of 18 U.S.C. §§ 1957 and 2.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law. If convicted of the wire fraud charges, Dodson faces a maximum statutory sentence of 20 years in prison and a fine in the amount of $250,000. If convicted of the mail fraud charges, Dodson faces a maximum statutory sentence of 20 years in prison and a fine in the amount of $250,000. If convicted of the money laundering charges, Dodson faces a maximum statutory sentence of 10 years in prison and a fine in the amount of $250,000. The court also may order a term of supervised release, fines or other assessments, restitution, and forfeiture, if appropriate. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Dodson was arrested this morning and made an initial appearance before the Hon. Shashi H. Kewalramani, U.S. Magistrate Judge for the Central District of California. Dodson’s next appearance is expected before the Hon. Nathanael M. Cousins, U.S. Magistrate Judge for the Northern District of California.
Trial Attorney Jason M. Covert of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Sarah Griswold of the Northern District of California are prosecuting the case. The prosecution is the result of an investigation by the FBI’s San Francisco Field Office, with the assistance of the Enforcement Division of the U.S. Securities and Exchange Commission.
Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website for more information.
Louisiana Man and Oakland Man Admit Murder-For-Hire Plot Leading to Death of TargetRead the Press Release
SAN FRANCISCO – Marcus Etienne, a.k.a. Hitler, and Mario Robinson, both pleaded guilty to conspiracy charges stemming from the activities of a marijuana distribution organization, announced United States Attorney David L. Anderson and Federal Bureau of Investigation (FBI) Special Agent in Charge John F. Bennett. The plea was accepted by the Hon. William H. Alsup, United States District Judge.
According to the plea agreements, Etienne, 38, of St. Martin Parish, La., and Robinson, 36, of Opelousas, La., and Oakland, Calif., were involved in an enterprise based in St. Martin Parish, Louisiana, consisting of more than seven members who conducted a continuing and extensive narcotics distribution conspiracy. Etienne admitted that he was the leader of the enterprise beginning as early as 2009. The defendants both acknowledged that the enterprise engaged in narcotics distribution, assault, robbery, extortion, extortionate collection of extensions of credit, murder for hire, murder, money laundering, illegal firearms possession, gambling on dogfighting, and obstruction of justice. Robinson further admitted that in 2015, he moved from California to Louisiana and began receiving marijuana from the enterprise to distribute in Louisiana.
Etienne and Robinson admitted their respective roles in the 2016 murder of another enterprise member, Trince Thibodeaux. According to the plea agreements, Etienne ordered the murder of Thibodeaux because Etienne believed Thibodeaux had stolen money and narcotics from the enterprise. Etienne offered Robinson $5,000 to murder Thibodeaux, and Robinson accepted. Robinson then contracted with a third party to complete the murder. On March 22, 2016, Robinson lured Thibodeaux to a location in Oakland where the third party shot and killed Thibodeaux. A week later, Robinson sent a $1,250 wire transfer to the individual who shot Thibodeaux. Robinson acknowledged that he expected to remain in good standing with Etienne and the enterprise by completing the murder at Etienne’s direction.
The plea agreements describe additional activities the defendants engaged in to promote the enterprise. For example, the plea agreements describe how the enterprise purchased marijuana in California and used the United States Postal Service to ship the drugs to Louisiana and Texas. Robinson admitted he received packages containing between one and ten pounds of marijuana every one or two months. Robinson and Etienne used cash proceeds from the narcotics trafficking to purchase marijuana and other controlled substances in California. Robinson also purchased money orders in Louisiana to pay the enterprise’s marijuana suppliers in California. Both Etienne and Robinson admitted that they conducted financial transactions with proceeds of narcotics trafficking to conceal the nature, source, and ownership of the enterprise’s profits.
In addition, Etienne admitted he purchased and maintained dogs used for fighting in Breaux Bridge, Louisiana, on a property owned by another member of the enterprise. At the property, Etienne and other members of the enterprise hosted dog-fighting events at which attendees would pay a cover fee and bet money on the dogfights. Dogs, including dogs owned by Etienne, were seriously injured and even killed either during the events or as a result of the training leading up to the events.
On December 18, 2018, a federal grand jury indicted Etienne, Robinson, and one other for their respective roles in the enterprise. Both defendants pleaded guilty to conspiracy to distribute marijuana, in violation of 21 U.S.C. §§ 841(a)(1), (b)(1)(A)(vii), and 846; racketeering conspiracy, in violation of 18 U.S.C. § 1962(d); and conspiracy to launder monetary instruments in violation of 18 U.S.C. § 1956(h).
The defendants face maximum statutory penalties as follows:
CHARGE
STATUTE
MAXIMUM STATUTORY PENALTY
Conspiracy to Distribute and possess with intent to distribute 1,000 kilograms or more of marijuana
21 U.S.C. § 846, 841, and (b)(1)(A)
Not less than 10 years or more than life in prison
$10,000,000 fine
After filing of prior conviction, if applicable, not less than 20 years or more than life in prison and
$20,000,000 fine
Conspiracy to conduct the affairs of an enterprise through a pattern of racketeering activity
18 U.S.C. § 1962(d)
Life in prison
$250,000 fine
Conspiracy to commit money laundering
18 U.S.C. § 1956(h)
20 years in prison
$250,000 fine
Additional fines, forfeitures, restitution, and special assessments also may be imposed. 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 defendants will remain in federal custody pending sentencing. Judge Alsup has scheduled the sentencing hearing for both defendants for April 7, 2020 at 2:00 p.m.
The case is being prosecuted by Assistant United States Attorneys Meredith Osborn, Claudia Quiroz, and William Frentzen and with the assistance of Jessica Meegan. This case is being investigated by the Federal Bureau of Investigation’s Oakland Division, the Internal Revenue Service, and the Oakland Police Department, with assistance from the St. Landry Parish, Louisiana, Sheriff’s Office, and the Opelousas, Louisiana, Police Department.
Tracy Resident Sentenced to Three Years in Prison for “H-1B” Visa Fraud and Aggravated Identity TheftRead the Press Release
SAN FRANCISCO —Abhijit Prasad was sentenced today to 36 months in prison following his conviction at trial for visa fraud and aggravated identity theft. The sentence was handed down by the Honorable Charles R. Breyer, U.S. District Judge in the Northern District of California.
U.S. Attorney David Anderson for the Northern District of California and U.S. Attorney McGregor W. Scott for the Eastern District of California made the announcement.
Prasad, 52, was found guilty by a jury on August 5, 2019, of 19 counts of visa fraud, two counts of fraudulent obtainment of foreign visas, and two counts of aggravated identity theft. The case originated in Sacramento where a federal grand jury indicted Prasad in 2016. The case ultimately was tried in San Francisco following a court order transferring the case there. According to the evidence at trial, Prasad filed 19 petitions for H-1B nonimmigrant visas containing false statements, made under penalty of perjury, as to purported work projects to be performed at locations in California, including Cisco Systems. The evidence at trial showed that Cisco had no expectation that the foreign workers who were the beneficiaries of the visa petitions would actually work at Cisco on an existing work project. The evidence at trial further showed that the defendant knowingly submitted forged Cisco documents to United States Citizenship and Immigration Services in support of his claims that the beneficiaries would work at Cisco.
In addition, the evidence at trial showed that Prasad fraudulently used the digital signature of a Cisco employee, who was not authorized to sign Cisco employment documents, to create a document that would leave the impression that two of the H-1B workers had an existing work project at Cisco. Prasad obtained two of the H-1B visas using this fraudulent document that purports to be a fully executed Cisco contract.
In addition to the prison term, Judge Breyer ordered Prasad to forfeit $1,193,440.87. Prasad is in federal custody and will begin serving his prison term immediately.
Assistant U.S. Attorneys Audrey B. Hemesath, Michael A. Rodriguez, and Karen Beausey are prosecuting the case. The case is the product of an investigation by the U.S. Department of State, Diplomatic Security Service’s representative to the Document and Benefit Fraud Task Force (DBFTF), overseen by Homeland Security Investigations. The DBFTF is a multi-agency task force that coordinates investigations into fraudulent immigration documents. U.S. Citizenship and Immigration Service’s Office of Fraud Detection and National Security also assisted with the investigation.
Former IT Administrator Pleads Guilty to Insider Trading Conspiracy Relating to Palo Alto Networks, Inc.Read the Press Release
SAN JOSE – Janardhan Nellore pleaded guilty today to conspiracy to commit securities fraud, announced United States Attorney David L. Anderson and Federal Bureau of Investigation, Special Agent in Charge John F. Bennett. The guilty plea was accepted by the Honorable Lucy H. Koh, United States District Judge.
In pleading guilty, Janardhan Nellore admitted to participating in an insider trading scheme by trading on material, nonpublic, inside information that he learned through his employment at Palo Alto Networks, Inc. (“PANW”), where Nellore worked as an IT administrator. Nellore admitted that he obtained confidential information about PANW’s quarterly financial performance and traded on that information before PANW disclosed its financial results to the public. Nellore admitted that he placed illegal inside trades in the brokerage accounts of other people for his own benefit and for the benefit of the account holders around PANW’s quarterly earnings announcements.
Nellore also admitted that he tipped PANW’s nonpublic information to other people who then traded PANW securities around the company’s earnings announcements using this inside information. Nellore admitted that the members of the conspiracy made more than $7 million as a result of their illegal insider trading.
Nellore was indicted by a federal Grand Jury on December 12, 2019, and arraigned on December 17, 2019. Nellore was charged with one count of conspiracy to commit securities fraud, in violation of 18 U.S.C. § 1349, six counts of securities fraud and aiding and abetting, in violation of 18 U.S.C. §§ 1348 and 2, and three counts of aggravated identity theft, in violation of 18 U.S.C. § 1028A(a)(1). Under the plea agreement, Nellore pled guilty to Count One, conspiracy to commit securities fraud.
Nellore is currently in the custody of the United States Marshal.
Nellore’s next appearance is scheduled for February 26, 2020, before Judge Koh for a status conference on sentencing. The maximum statutory penalty for a violation of 18 U.S.C. § 1349 is 25 years and a fine of $250,000, plus restitution and forfeiture, if appropriate. However, any sentence will be imposed by the court only after consideration of the United States Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorneys Daniel Kaleba and Patrick R. Delahunty are prosecuting the case with the assistance of Susan Kreider. The prosecution is the result of an investigation by the FBI, with the assistance of the San Francisco Regional Office of the Securities and Exchange Commission.
Two South Bay Residents Indicted for Securities Fraud Relating to Palo Alto Networks, Inc.Read the Press Release
SAN FRANCISCO – A federal grand jury indicted Janardhan Nellore and Sivannarayana Barama with one count of conspiracy to commit securities fraud and six counts of securities fraud, and Nellore with three counts of aggravated identity theft, announced United States Attorney David L. Anderson and Federal Bureau of Investigation, Special Agent in Charge John F. Bennett.
“As alleged in this indictment, Janardhan Nellore worked in an information technology department and repeatedly used his access to his employer’s confidential information to profit on option trades in his employer’s stock,” said U.S. Attorney Anderson. “Corporate insiders who abuse their access to inside information for personal gain will face the consequences for their actions, whether they sit in the executive suite or the IT department. The integrity of our financial markets requires everyone to follow the rules.”
“The defendants unlawfully made millions of dollars by concocting a complex trading scheme using valuable inside information to profit by trading ahead of authorized disclosures to the investing public,” said FBI Special Agent in Charge John F. Bennett. “By arresting these individuals, we set a clear example that we will not tolerate those who undermine the integrity of the markets and fair trade.”
According to the superseding indictment unsealed today, Nellore, 42, of Santa Clara, Calif., and Barama, 45, of Fremont, Calif., are alleged to have participated in an insider trading scheme in which Nellore traded on and provided Barama and others with confidential, non-public, material, inside information about the financial performance of Palo Alto Networks, Inc. (“PANW”), headquartered in Santa Clara, Calif. Nellore worked in PANW’s Operations and Support group, an information technology department. Using his position at PANW, Nellore accessed and obtained material nonpublic information regarding PANW’s quarterly financial performance, including PANW’s target and actual billings, bookings, revenue, and growth rate. With that inside information, Nellore acted as both a trader and a tipper. Nellore traded PANW securities using inside information before the company disclosed its financial results to the public. In a number of “straddle trades,” Nellore placed call and put options before earnings announcements and sold the options after the announcements.
As alleged in the superseding indictment, Nellore shared the inside information with Barama and others, who Nellore knew would trade PANW securities using the inside information he had provided. Nellore also sometimes tried to conceal this scheme to defraud by using the brokerage accounts of others.
According to the superseding indictment, from March 2015 through September 2018, Nellore, Barama, and others placed approximately 800 straddle trades of PANW securities, generating illegal profits in excess of $7 million as a result of the insider trading scheme. When making non-straddle trades of PANW securities or trading in other stocks, the conspirators lost money.
Barama was arrested this morning in Fremont and will make his initial appearance in federal court in San Jose today before U.S. Magistrate Judge Virginia K. DeMarchi, where Barama and Nellore will be arraigned on the superseding indictment.
Nellore was previously detained as a flight risk by United States Magistrate Judge Nathanael M. Cousins, after Nellore was arrested at the San Francisco International Airport with a ticket to leave the United States and without any apparent intention to return. The FBI interviewed Nellore in connection with this investigation on May 7, 2019. After the interview, Nellore purchased one-way tickets to New Delhi, India, for himself and his family on an Air India flight departing the very next morning, May 8, 2019, at 11:30 a.m. FBI agents intercepted Nellore while he was trying to board the flight.
The indictment charges both Nellore and Barama with one count of conspiracy to commit securities fraud, in violation of 18 U.S.C. § 1349, and six counts of securities fraud and aiding and abetting, in violation of 18 U.S.C. §§ 1348 and 2. The indictment also charges Nellore with three counts of aggravated identity theft, in violation of 18 U.S.C. § 1028A(a)(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 of the conspiracy to commit securities fraud charge, both Nellore and Barama face a maximum statutory sentence of 25 years in prison and a fine in the amount of $250,000. If convicted of the securities fraud charges, both Nellore and Barama face a maximum statutory sentence of 25 years in prison and a fine in the amount of $250,000. If convicted of the aggravated identity theft charges, Nellore faces a mandatory minimum statutory sentence of 2 years in prison and a fine in the amount of $250,000. The court also may order an additional term of supervised release, fines or other assessments, restitution, and forfeiture, if appropriate. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The United States Securities and Exchange Commission filed a separate civil action against Nellore, Barama, and three others today in the Northern District of California.
Assistant U.S. Attorneys Daniel Kaleba and Patrick R. Delahunty are prosecuting the case with the assistance of Susan Kreider. The prosecution is the result of an investigation by the FBI, with the assistance of the San Francisco Regional Office of the Securities and Exchange Commission.
Corcoran Resident Sentenced to 10 Years in Prison for Role in Methamphetamine Distribution ConspiracyRead the Press Release
SAN JOSE – Angel Lopez-Rivera was sentenced today to 10 years in prison for his role in a conspiracy to distribute methamphetamine, announced United States Attorney David L. Anderson and Drug Enforcement Administration (DEA) Acting Special Agent in Charge William C. Fallin. The sentence was handed down by the Honorable Beth Labson Freeman, United States District Judge.
Lopez-Rivera, 24, of Corcoran, Calif., pleaded guilty on June 25, 2019, to one count of distribution of methamphetamine. In pleading guilty, Lopez-Rivera admitted he agreed to deliver methamphetamine to a drug buyer in Gilroy. The defendant drove to a parking lot in Gilroy, met the buyer in a parked car, then handed over the drugs in a cardboard box in exchange for cash. The drugs consisted of approximately 446 grams of pure methamphetamine.
A federal grand jury indicted Lopez-Rivera on May 4, 2017, charging him with one count of conspiracy to distribute methamphetamine and one count of possession with intent to distribute methamphetamine. A superseding information filed on June 20, 2019, charged Lopez-Rivera with one count of distribution of methamphetamine, in violation of 21 U.S.C. § 841, the count to which he pleaded guilty.
In addition to the prison term, Judge Freeman also sentenced the defendant to a five-year period of supervised release. The defendant was remanded into custody and will begin serving his prison term immediately.
Lopez-Rivera is member of a drug trafficking organization (DTO) that participated in illegal drug activities in and around Fresno and Gilroy from June 2016 to April 2017. In total, the DTO was responsible for distributing over 24 pounds of methamphetamine, or “crystal meth,” and possessed additional methamphetamine, heroin, and cocaine for intended distribution. Lopez-Rivera the third member of the DTO to have been sentenced. On June 18, 2019, Judge Freeman sentenced codefendant Sergio Antonio Padilla-Lopez to 36 months in prison for delivering methamphetamine on a separate occasion. Further, on March 5, 2019, Judge Freeman sentenced the organizer and leader of the DTO, codefendant Ricardo Rios-Angulo, to 220 months in prison for his role in the drug conspiracy. When arrested, Rios-Angulo also was in possession of firearms and ammunition, including a Cobra .380-caliber handgun, a loaded Springfield Armory 1911 .38-caliber handgun, and an AR-style assault rifle without a serial number.
This case is being prosecuted by the San Jose Branch of the U.S. Attorney’s Office for the Northern District in California. The prosecution is the result of an investigation by the DEA.
Stockton Man Sentenced to More Than 12 Years in Prison for Drug Distribution Conspiracies and Possessing A Machine GunRead the Press Release
OAKLAND – Joel Salcedo was sentenced to 151 months in prison for drug and gun charges, announced United States Attorney David L. Anderson and Drug Enforcement Administration (DEA) Acting Special Agent in Charge William C. Fallin. The sentence was handed down by the Honorable Haywood S. Gilliam, Jr., U.S. District Judge.
The sentencing follows a May 2019 trial in which Salcedo, 37, of Stockton, was found guilty by a federal jury of participating in two overlapping drug conspiracies – to manufacture and distribute 100 or more marijuana plants, in violation of 21 U.S.C. §§ 846, 841(a)(1) and (b)(1)(B) (Count One), and to distribute or possess with the intent to distribute 100 grams or more of heroin, and 500 grams or more of a mixture and substance containing methamphetamine in violation of 21 U.S.C. §§ 846, 841(a)(1) and (b)(1)(A) (Count Two). The drug conspiracy charges carried mandatory minimum sentences of five years and ten years, respectively. Salcedo was also convicted of possession and transfer of a machine gun, in violation of 18 U.S.C. § 922(o) (Count Three).
Evidence at trial showed that Salcedo was a supplier of marijuana, methamphetamine, and heroin to a drug distribution organization headed by co-defendant Oscar Escalante. During a wiretap on Escalante’s phones in 2016, agents intercepted a series of calls that indicated Escalante ordered and Salcedo agreed to supply, one kilogram of heroin and two pounds of methamphetamine. Pole camera footage and physical surveillance demonstrated Salcedo delivered the drugs to Escalante on May 16, 2016. In addition, other evidence proved that Salcedo operated an outdoor marijuana grow at his residence in Stockton, CA. Salcedo also attempted to diagnose why Escalante’s full-auto Glock pistol was not working properly, by having an associate film him (Salcedo) while he repeatedly fired the gun in his backyard.
Salcedo was originally charged by criminal complaint on August 17, 2016. He and twenty-one other defendants were later charged in a Superseding Indictment, which alleged broad, overlapping drug conspiracies, money laundering, and various firearms offenses. Twenty defendants pleaded guilty, and one defendant remains a fugitive. Salcedo was the only defendant to go to trial. The following are examples of substantial sentences imposed in this case to date:
Defendant
Age
Charges
Sentence of Imprisonment
Oscar Escalante
43
21 U.S.C. §§ 846, 841(a)(1), (b)(1)(B) – Marijuana Trafficking Conspiracy; 21 U.S.C. §§ 846, 841(a)(1), (b)(1)(A)—Heroin and Methamphetamine Trafficking Conspiracy; 18 U.S.C. § 924(c) – Possession of a Firearm in Furtherance of Drug Trafficking; 18 U.S.C. § 1956(h) – Money Laundering Conspiracy
235 months
Michael Vicochea
26
21 U.S.C. §§ 846, 841(a)(1), (b)(1)(B) – Marijuana Trafficking Conspiracy; 21 U.S.C. §§ 846, 841(a)(1), (b)(1)(A)—Heroin and Methamphetamine Trafficking Conspiracy; 18 U.S.C. § 924(c) – Possession of a Firearm in Furtherance of Drug Trafficking; 18 U.S.C. § 1956(h) – Money Laundering Conspiracy
180 months
David Vigil
46
21 U.S.C. §§ 846, 841(a)(1), (b)(1)(B) – Marijuana Trafficking Conspiracy; 21 U.S.C. §§ 846, 841(a)(1), (b)(1)(A) – Heroin and Methamphetamine Trafficking Conspiracy
121 months
Christian Vanleer
26
21 U.S.C. §§ 846, 841(a)(1), (b)(1)(B)—Heroin and Methamphetamine Trafficking Conspiracy; 18 U.S.C. § 924(c) – Possession of a Firearm in Furtherance of Drug Trafficking
120 months
Phillip Jiunti
43
21 U.S.C. §§ 846, 841(a)(1), (b)(1)(B) – Marijuana Trafficking Conspiracy; supervised release violation in separate 18 U.S.C. § 922(g)(1) – Felon in Possession of Firearm case
70 months
Daniel Medina
25
21 U.S.C. §§ 841(a)(1), (b)(1)(C) – Distribution of Heroin; 18 U.S.C. § 924(c) – Possession of a Firearm in Furtherance of Drug Trafficking
66 months
Oswaldo Escalante
46
21 U.S.C. §§ 846, 841(a)(1), (b)(1)(B) – Marijuana Trafficking Conspiracy; 18 U.S.C. § 1956(h) – Money Laundering Conspiracy
65 months
Christopher Mir
26
21 U.S.C. §§ 846, 841(a)(1), (b)(1)(C) – Marijuana Trafficking Conspiracy; 18 U.S.C. § 924(c) – Possession of a Firearm in Furtherance of Drug Trafficking
60 months, 1 day
Ignacio Gonzalez
31
21 U.S.C. §§ 846, 841(a)(1), (b)(1)(C) – Marijuana Trafficking Conspiracy; 18 U.S.C. § 924(c) – Possession of a Firearm in Furtherance of Drug Trafficking
60 months, 1 day
Jorge Gomez
39
21 U.S.C. §§ 846, 841(a)(1), (b)(1)(B) – Marijuana Trafficking Conspiracy
60 months
Adan Gonzalez
47
21 U.S.C. §§ 846, 841(a)(1), (b)(1)(B) – Marijuana Trafficking Conspiracy
60 months
Assistant U.S. Attorneys Frank Riebli and Katherine Wawrzyniak are prosecuting the case with the assistance of Patricia Mahoney and Hector Lopez. The prosecution is the result of an investigation by the DEA. This case was 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.
Owners of South Bay Business Convicted of Visa Fraud Conspiracy and Related CrimesRead the Press Release
SAN JOSE – A federal jury convicted Jennifer Yang and her business partner Daniel Wu of conspiracy to defraud the United States and a number of related crimes in connection with a scheme to fraudulently obtain immigration benefits through the government’s “EB-5” visa program, announced United States Attorney David L. Anderson; U.S. Department of State, Diplomatic Security Service, San Francisco Field Office Special Agent in Charge Matthew Perlman; and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Special Agent in Charge Tatum King. The verdict was handed down today following a five-week trial before the Honorable Lucy H. Koh, U.S. District Judge.
The jury found that Yang, 52, of Palo Alto, and Wu, 56, of Las Vegas, submitted to the government fraudulent documents that claimed applicants were creating new commercial enterprises when, in fact, the documents contained information about fake jobs and bogus investments.
“The EB-5 program allows qualified foreign investors to become earnest stakeholders in local U.S. economies,” said U.S. Attorney Anderson. “In this case, the defendants subverted the EB-5 program by submitting fraudulent documents to make it falsely appear that investments were made and jobs were created. Schemes like this are cynical, sad, and economically destructive.”
“The Diplomatic Security Service (DSS) is pleased with this successful prosecution. These hard-fought convictions send a clear message that criminals who attempt to exploit the U.S. visa process for illegal profit will be punished,” said SAC Matthew Perlman of the DSS San Francisco Field Office. “DSS, alongside our federal partners, is committed to rooting-out and prosecuting criminal enterprises involving U.S. travel documents.”
“Fraudulent schemes like these threaten our National Security and public safety,” said Tatum King, special agent in charge, San Francisco, Homeland Security Investigations. “They also have substantial impacts on the victims of these callous crimes. HSI special agents work diligently to not only protect National Security interests, but also the victims of fraud.”
Evidence at trial showed that Yang, a lawyer and licensed member of Bar of the District of Columbia, held herself out as a legal specialist for persons interested in applying for EB-5 visa benefits. Between 2007 and 2016, the defendants filed EB-5 visa petitions for at least seven foreign investors who supplied Yang and Wu with at least four-million dollars for the stated purpose of investment into a commercial enterprise. Instead of making legitimate investments that created real jobs, the evidence at trial showed that the defendants created and submitted fraudulent records to deceive the government into issuing benefits on the basis of fake employees. In at least some cases, the information about the bogus employees was created using the personal identifying information of third-parties, without the third-party individuals’ knowledge.
In addition, the evidence at trial showed that the defendants created documents that misstated the true manner in which the investment monies were used, which in some cases was not for the new enterprises, but instead for the personal benefit of defendants. In this way, evidence at trial demonstrated that the defendants obtained benefits for clients based on jobs and businesses that did not, in fact, exist. The trial evidence further demonstrated that the defendants used funds fraudulently obtained through the scheme for personal expenditures, such as the purchase of cars, stays in luxury hotels, and to pay college tuition for a family member.
A federal grand jury indicted Yang and Wu on October 19, 2017, charging both with one count of conspiracy to defraud the United States and to commit visa fraud, mail fraud, and aggravated identity theft, all in violation of 18 U.S.C. § 371; three counts of visa fraud, in violation of 18 U.S.C. § 1546(a); two counts of mail fraud, in violation of 18 U.S.C. § 1341; and two counts of aggravated identity theft, in violation of 18 U.S.C. § 1028A. In addition, Yang was charged with two counts of money laundering, in violation of 18 U.S.C. § 1957. The jury convicted both Yang and Wu of the conspiracy count. The jury also convicted Yang of two counts of visa fraud, one count of mail fraud, and one count of aggravated identity theft. The jury convicted Wu of two counts of visa fraud, one count of mail fraud, and one count of aggravated identity theft.
Judge Koh ordered each of the defendants released on a $500,000 bond, pending sentencing. Judge Koh scheduled the defendants’ sentencing hearing for April 29, 2020.
The defendants face maximum statutory penalties for each count of conviction as follows:
DEFENDANT
STATUTE
CHARGE
MAXIMUM PENALTY
Yang and Wu
18 U.S.C. § 371
Conspiracy to Commit Visa Fraud, Mail Fraud, Aggravated Identity Theft, and to Defraud the United States
Maximum term of imprisonment: 5 years
Maximum fine: $250,000
Maximum term of supervised release: 3 years
Restitution
Forfeiture
Yang and Wu
18 U.S.C. § 1546(a)
Visa Fraud
Maximum term of imprisonment: 10 years
Maximum fine: $250,000
Maximum term of supervised release: 3 years
Restitution
Forfeiture
Yang and Wu
18 U.S.C. § 1341
Mail Fraud
Maximum term of imprisonment: 20 years
Maximum fine: $250,000 Maximum term of supervised release: 3 years
Restitution
Forfeiture
Yang and Wu
18 U.S.C. § 1028A
Aggravated Identity Theft
Maximum term of imprisonment: 2 years (to run consecutive to any other underlying felony)
Maximum fine: $250,000
Maximum term of supervised release: 3 years
However, any sentence will 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. Attorneys Patrick Delahunty and John Bostic are prosecuting the case with the assistance of Lakisha Holliman, Mimi Lam, Susan Kreider, and Tong Zhang. The prosecution is the result of an investigation by the United States Department of State, Diplomatic Security Service, U.S. Immigration and Customs Enforcement, Homeland Security Investigations, and U.S. Citizenship and Immigration Services Fraud Detection and National Security Office.
East Bay Men Charged with Selling Counterfeit Pills Laced with FentanylRead the Press Release
SAN FRANCISCO – Jose Ricardo Loza and Randy Lee Walker were charged in a criminal complaint with distributing fentanyl and heroin, announced United States Attorney David L. Anderson and Postal Inspector in Charge Rafael E. Nuñez, United States Postal Inspection Service.
An affidavit filed in the case by an agent of the United States Postal Inspection Service alleges that Loza sold blue counterfeit oxycodone pills that were laced with Fentanyl. According to the affidavit, Loza sold to a third party 50 Fentanyl-laced pills on August 22, 2019, when at the auto body shop where he works in Pittsburg, Calif. Loza allegedly did not initially have enough pills to sell, so he texted Walker, who arrived with more Fentanyl-laced pills. The affidavit alleges that during the transaction, Loza warned the customer to be careful when taking these pills because he (Loza) gave the same pills to a mutual friend who overdosed and died. According to the affidavit, a laboratory test verified that a sample of the pills Loza sold contained fentanyl.
In addition, the affidavit alleges that on November 22, 2019, Loza sold 500 more counterfeit pills to an undercover officer and then told the officer that he had 10,000 more of the same pills for sale. Further, the affidavit alleges Loza sold two ounces of heroin on September 10, 2019.
Loza and Walker are charged with distribution of controlled substances, in violation of 21 U.S.C. §§ 841(a)(1) and (b)(1)(C).
Loza and Walker were arrested on December 12, 2019. At the time of Loza’s arrest, law enforcement agents found more than 2,000 counterfeit oxycodone pills hidden in hallowed out compartments of his furniture.
Defendants Loza and Walker made their initial appearances this morning before U.S. Magistrate Judge Thomas S. Hixson. Both defendants currently are in custody. Walker’s next court appearance is scheduled for Monday, December 16, 2019, for appointment of counsel. Loza’s next court appearance is scheduled for Wednesday, December 18, 2019, for a hearing to address detention issues.
If convicted, the defendants face a maximum statutory penalty of up to 20 years 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 Ross Weingarten is prosecuting the case with the assistance of Linda Love. The prosecution is the result of an investigation by the United States Postal Inspection Service.
Three North Bay Defendants Charged in Fentanyl Overdose Death CaseRead the Press Release
SAN FRANCISCO – The U.S. Attorney’s Office has charged Leanna Zamora, Lindsay Williams, and Shane Cratty with distribution of fentanyl, announced United States Attorney David L. Anderson and Drug Enforcement Administration (DEA) Acting Special Agent in Charge William “Curt” Fallin. The charges were made in a complaint filed today.
The complaint, described by U.S. Attorney Anderson in a press conference today, describes how Zamora, 29, Williams, 32, and Cratty, 26, all from Santa Rosa, each are alleged to have played a role in supplying the fentanyl that resulted in the death of a 13-month-old boy and his father in Santa Rosa.
“Drug dealers sometimes justify themselves by claiming that their conduct is ‘harmless’ or ‘victimless,’” said U.S. Attorney Anderson. “As this case demonstrates, these claims are false. The dark reality for many opioid drug users is that their lives are short and miserable, and their deaths are horrible. Street drugs are not ‘medicine,’ and drug dealers are not ‘doctors.’ The day-to-day work of a drug dealer consists of pushing his victim-customers into a downward spiral of dependency and despair.”
“This case involves fentanyl and a $125 drug transaction that led to the untimely deaths of a father and his 13-month old son,” stated Acting Special Agent in Charge Fallin. “The circumstances surrounding this investigation are arguably the most tragic we have seen. It not only serves as a reminder, but also underscores our commitment to do everything in our power to prevent these bold criminals from destroying any more lives.”
According to the complaint, Cratty drove Williams to meet with Zamora. Zamora sold the fentanyl to Williams, and Williams gave it to Cratty. Cratty then delivered it to the baby’s father. Late that night or early the next morning, the father and the baby ingested some of the drug and died. According to the complaint, the fentanyl that ultimately found its way to the victims’ house was obtained by Zamora in the open-air drug markets of the Tenderloin in San Francisco.
Zamora, Williams, and Cratty each are charged with distribution of controlled substances, in violation of 21 U.S.C. §§ 841(a)(1) and (b)(1)(C). If convicted, the defendants face a maximum statutory penalty of up to 20 years 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.
Zamora and Williams are in state custody. Shane Cratty is in custody on a federal arrest warrant. Appearances for the defendants in federal court have not yet been scheduled.
The prosecution is the result of an investigation by the Santa Rosa Police Department, with assistance from the DEA.
Pennsylvania Man Indicted in “SIM Swapping” Scheme to Steal CryptocurrencyRead the Press Release
SAN FRANCISCO – A federal grand jury indicted Anthony Francis Faulk with conspiracy to commit wire fraud and extortion, announced United States Attorney David L. Anderson and Federal Bureau of Investigation, Special Agent in Charge John Bennett.
The indictment, unsealed today, alleges that Faulk, 23, of Latrobe, Penn., engaged in a scheme to obtain cryptocurrencies and other money and property by fraud and extortion. According to the indictment, Faulk targeted assets owned and controlled by executives of cryptocurrency-related companies and cryptocurrency investors. The indictment alleges Faulk and others engaged in a “SIM swapping” scheme. A SIM card—short for Subscriber Identity Module or Subscriber Identification Module—is a technology used to identify and authenticate subscribers on mobile phone devices. According to the indictment, Faulk and others used fraud, deception, and social engineering techniques to induce representatives of cellphone service providers to transfer or port cellphone numbers from SIM cards in the devices possessed by victims to SIM cards in devices possessed by the conspirators, a practice known as SIM swapping. The indictment further alleges that after Faulk and his co-conspirators gained control of victims’ cellphone numbers, the conspirators used additional deceptive techniques to gain access to email, electronic storage, and other accounts of victims and ultimately to cryptocurrency accounts of victims. Faulk and his co-conspirators also allegedly extorted victims of the SIM swapping scheme.
The indictment charges Faulk with one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349, and one count of interstate communications with intent to extort, in violation of 18 U.S.C. § 875(d).
In addition, the indictment alleges that Faulk used the proceeds of the SIM swapping scheme to obtain real and personal property for his own use and benefit, including a house, a Ferrari and three other cars, jewelry, a Rolex watch, and royalty rights in twenty songs. According to the indictment, the property obtained with the proceeds of the SIM swapping scheme is subject to criminal forfeiture.
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 conspiracy to commit wire fraud charge, Faulk faces a maximum statutory sentence of 20 years in prison and a fine in the amount of $250,000. If convicted of the extortion charge, Faulk faces a maximum statutory sentence of 2 years in prison and a fine in the amount of $250,000. The court also may order an additional term of supervised release, fines or other assessments, restitution, and forfeiture, if appropriate. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Faulk was arrested today in Latrobe, Penn., and made his initial appearance in the Western District of Pennsylvania on December 11, 2019. He was released on a $250,000 bond. His next scheduled appearance is at 10:30 a.m. on January 9, 2020, before the Honorable Sallie Kim, U.S. Magistrate Judge.
Assistant U.S. Attorney Robert S. Leach is prosecuting the case with the assistance of Mimi Lam, Rebecca Shelton, and Kimberly Richardson. The prosecution is the result of an investigation by the FBI.
East Bay Residents Sentenced in Scheme to Sell Fraudulent Financial InstrumentsRead the Press Release
OAKLAND - Sharon Ringgenberg was sentenced to 15 months in prison for her role in a scheme to commit wire fraud, announced United States Attorney David L. Anderson, Federal Bureau of Investigation Special Agent in Charge John F. Bennett, and Internal Revenue Service, Criminal Investigation, Special Agent in Charge Kareem Carter. In addition to the prison term, Ringgenberg was ordered to pay restitution totaling $705,000 to victims of the scheme. The sentence was handed down by the Hon. Jon S. Tigar, U.S. District Judge on December 6, 2019.
Ringgenberg, 70, of Martinez, Calif., pleaded guilty to the charge on August 10, 2018. According to her plea agreement, Ringgenberg conspired with codefendants Craig Scott, 53, of Oakland, and Kenneth Taylor, 57, of San Ramon, to commit wire fraud. In her plea agreement, Ringgenberg admitted that from November 2008 through May 2012, she and Taylor sold fraudulent standby letters of credit and proof of funds statements to clients of a company called Success Bullion USA, LLC (“Success Bullion”). These financial instruments were fraudulent because they reported false client creditworthiness and client balances that exceeded Success Bullion’s assets. Success Bullion falsely purported to be a subsidiary of a large Hong Kong financial institution. Ringgenberg acted as an officer of Success Bullion and signed and provided false documents on behalf of the company. Success Bullion used brokers, including co-defendant Scott, to find clients.
A federal grand jury indicted Taylor, Ringgenberg, and Scott on April 13, 2017, charging them with one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349, two counts of wire fraud, in violation of 18 U.S.C. § 1343, and two counts of subscribing to a false tax return, in violation of 26 U.S.C. § 7206(1).
In addition to the prison term and restitution, Judge Tigar ordered Ringgenberg to serve a three-year period of supervised release and forfeit $295,000 in additional proceeds that she received from the scheme.
Scott pleaded guilty to his part in the scheme on August 12, 2018. In his plea agreement, Scott admitted that from 2009 to May 2012, he was a broker for Success Bullion. Scott solicited customers and acted as a broker for fraudulent standby letters of credit and proof of funds statements sold by Success Bullion. Judge Tigar sentenced him on December 6, 2019, to five years of probation with a year of home confinement and ordered him to pay restitution of $527,575 to victims of the scheme, to forfeit $20,000 in additional proceeds he received from the scheme, and not to sell securities as part of his term of probation.
Similarly, Taylor, pleaded guilty to his part in the scheme on March 1, 2019. Judge Tigar sentenced him on October 18, 2019, to 36 months of prison, three years of supervised release, and ordered to him to forfeit $3,436,002 and to pay $1,100,774 to the Internal Revenue Service and $90,000 to a victim of the fraud scheme. Before handing down the three-year sentence against Taylor, Judge Jon S. Tigar found that “Mr. Taylor enriched himself greatly, and he did so out of greed [. . . t]hat’s all,” and that “[t]his was a sophisticated, day-in-day-out fraud scheme that lasted for many years.”
Assistant United States Attorney Colin Sampson and Tax Division Trial Attorney Charles A. O’Reilly are prosecuting the case. This case is the result of an investigation by the FBI and IRS-Criminal Investigation.
San Francisco Man Sentenced to 97 Months for Receiving Child Pornography from MinorsRead the Press Release
OAKLAND – Michael Anthony LeBoeuf was sentenced to 97 months in prison for receipt and possession of child pornography, announced United States Attorney David L. Anderson and U.S. Homeland Security Investigations (HSI) San Francisco Special Agent in Charge Tatum King. The sentence was handed down by the Hon. Phyllis J. Hamilton, U.S. District Judge.
LeBoeuf, 38, of San Francisco, pleaded guilty to the charges on September 4, 2019. According to the plea agreement, LeBoeuf admitted that he communicated with two minor victims via text messaging. He knew the minors were 16 and 17 years of age. LeBoeuf admitted that in 2012 he asked the 17-year-old minor to send photos of himself in the nude including photos showing the minor’s genitals. The minor sent at least two nude photos to LeBoeuf, at LeBoeuf’s request, via text communication. LeBoeuf also admitted that he invited the minor to his San Francisco residence. The minor traveled from Marin County to meet LeBoeuf at his San Francisco residence where the two had sexual intercourse.
Similarly, LeBoeuf admitted that in 2013 he asked the 16-year-old minor to send photos of himself in the nude including photos showing the minor’s genitals. The minor sent at least two nude photos to LeBoeuf via text communication. LeBoeuf admitted that he invited the minor to his San Francisco residence and that the minor traveled from Oakland to San Francisco where the two had sexual intercourse in LeBoeuf’s residence. After the minor departed, LeBoeuf sent a text message asking if the minor had friends his age or younger that LeBoeuf could meet.
Federal law enforcement agents executed a search warrant at LeBoeuf’s apartment on May 3, 2018. In the apartment, the agents located several of LeBoeuf’s computers and electronic devices on which were more than 75 sexually explicit images of children that constituted child pornography as defined in 18 U.S.C. § 2256(8), including photographs and videos of the two minors described above.
A federal grand jury indicted LeBoeuf on May 2, 2019, charging him with to two counts of receipt of child pornography, in violation of 18 U.S.C. §§ 2252(a)(2) and (b)(1), and one count of possession of child pornography, in violation of 18 U.S.C. §§ 2252(a)(4)(B) and (b)(2). LeBoeuf pleaded guilty to all three counts.
In addition to the prison term, Judge Hamilton also ordered the defendant to serve a 10-year period of supervised release. The defendant was remanded into custody immediately upon sentencing. In addition, Judge Hamilton scheduled a hearing for February 20, 2020, at 1:30 p.m., in Oakland, to determine issues regarding restitution.
Assistant U.S. Attorney Jonathan U. Lee is prosecuting the case with the assistance of Jessica Rodriguez Gonzalez and Kathleen Turner. The prosecution is the result of an investigation by HSI.
San Francisco Acupuncturist Pleads Guilty to Health Care Fraud in False Billing SchemeRead the Press Release
SAN FRANCISCO – Haichao Huang pleaded guilty today to 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 guilty plea was accepted by the Honorable Susan Illston, United States District Judge.
“Haichao Huang stole money set aside for union members’ health benefit plans by fraudulently billing union trust funds for acupuncture services not performed. The U.S. Department of Labor Office of Inspector General will continue to work with our law enforcement partners to safeguard the union benefit funds from those who seek to exploit it for personal gain,” said Quentin Heiden, Special Agent-in-Charge, Los Angeles Region, U.S. Department of Labor Office of Inspector General.
According to the plea agreement, Huang, 46, of San Francisco, 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.
On March 7, 2019, a federal grand jury indicted Huang with six counts of health care fraud, in violation of 18 U.S.C. § 1347, and one count of false statement relating to health care matters, in violation of 18 U.S.C. § 1035(a)(2). Huang pleaded guilty to all seven counts.
Pursuant to the terms of his plea agreement, Huang has agreed to pay restitution in an amount to be set by the court at the time of sentencing, but in no event less than $807,785.38. Judge Illston scheduled the sentencing hearing for March 13, 2020. In addition to restitution, the defendant faces a maximum statutory sentence of 10 years in prison and $250,000 for each violation of 18 U.S.C. § 1347. Further, the defendant faces up to five years in prison and a fine of $250,000 for the violation of 18 U.S.C. § 1035(a)(2). The court also may order additional fines and additional periods of supervised release at sentencing. However, any sentence following conviction will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorneys Lina Peng and Ross Weingarten are prosecuting the case with the assistance of Marina Ponomarchuk and Lenora Hamilton. 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.
Carolina Liquid Chemistries, Inc., Sentenced to Pay $50,000 for Developing and Marketing Drug Tests Without FDA ApprovalRead the Press Release
SAN FRANCISCO – Carolina Liquid Chemistries, Inc. (CLC), was sentenced today to pay $50,000 for selling adulterated medical devices, announced United States Attorney David L. Anderson and Food and Drug Administration-Office of Criminal Investigations (FDA-OCI) Special Agent in Charge Special Agent in Charge Los Angeles Field Office Lisa Malinowski. The sentence was handed down by U.S. Magistrate Judge Joseph C. Spero. Magistrate Judge Spero also ordered CLC to serve a two-year period of probation during which time CLC will be required to develop and submit to the court an effective compliance and ethics program.
CLC, based in Winston-Salem, North Carolina, and Brea, Calif., pleaded guilty to the charge on September 3, 2019. According to the plea agreement, CLC admitted that it developed systems for testing human urine for drugs of abuse and then, from 2010 to 2014, marketed the systems, all without FDA approval.
“FDA's device approval requirements are designed to ensure the safety and effectiveness of devices used by Americans,” said Special Agent in Charge Malinowski. “Today’s announcement serves as a reminder of the FDA’s continued focus on taking action against companies that put profits ahead of the public health.”
CLC admitted that it purchased devices, referred to as reagents, from a company in the Northern District of California, and that it purchased automated photometric chemistry analyzers from a Japanese company and a Chinese company. CLC admitted that it combined the reagents with the chemistry analyzers and then marketed the combined test system as a product for testing human urine for drugs of abuse. CLC acknowledged that such a test system required approval by the FDA before being marketed, and that, to obtain approval from the FDA, the sponsor of an application to the FDA for approval would need to demonstrate that there were specific medical indications for which these devise were useful and that the test systems could safely and effectively perform these analyses. CLC admitted it did not file for FDA approval for its system.
CLC was charged by an information on August 26, 2019. The company was charged with one count of marketing adulterated medical devices, in violation of 21 U.S.C. §§ 331(a) and 333(a)(1). CLC pleaded guilty to that charge.
In addition to the $50,000 fine and the order to develop a compliance and ethics program, Magistrate Judge Spero’s sentence included additional terms that CLC must follow during the two-year probation period. Among the terms of probation CLC must follow are: (1) to refrain from committing another federal, state, or local crime; (2) to notify the court or probation officer immediately upon learning of any civil litigation, criminal prosecution, or administrative proceeding against the organization; and (3) to submit to unannounced examinations of its books and records by the probation officer or experts engaged by the court.
This case is being prosecuted by the Special Prosecutions Section of the U.S. Attorney’s Office for the Northern District in California. The prosecution is the result of an investigation by the FDA-OCI with assistance from the Federal Bureau of Investigation and the U.S. Department of Health and Human Services Office of the Inspector General.
Twelve Members of Drug Trafficking Organization Charged in Federal IndictmentRead the Press Release
SAN FRANCISCO – Twelve defendants were indicted on narcotics trafficking charges, announced United States Attorney David L. Anderson, Federal Bureau of Investigation Special Agent in Charge John F. Bennett, and Homeland Security Investigations Special Agent in Charge Tatum S. King. The indictment follows the arrest of several defendants on November 19, 2019, and the execution of search warrants at eleven locations, including ten residences in Sonoma County.
In addition to the arrests and execution of search warrants, law enforcement officials seized more than approximately 25 kilograms of methamphetamine over the course of the investigation.
Eleven of the 12 defendants named in the indictment originally were charged by complaint. According to the now-unsealed complaints, law enforcement agencies have been investigating the drug trafficking activities of a drug trafficking organization (DTO) headed by Eduardo Guzman, who was arrested on November 19, 2019. The complaints describe the controlled purchases of drugs from the conspirators by an undercover officer and an informant acting under law enforcement supervision and telephone communications intercepted pursuant to court orders. The complaints allege that law enforcement officials made seizures of drugs, including the seizure of approximately 11 ½ pounds of methamphetamine on October 15, 2019. According to the complaints, communications were intercepted revealing that customers ordered and received drugs from the DTO and sometimes complained about the quality and quantity of the drugs they had purchased.
The following defendants were charged in the indictment:
Defendant
Age/Residence
Charges
Maximum Penalties
EDUARDO GUZMAN TORRES,
a/k/a “Miguel” a/k/a “Mikey” a/k/a “Michael” a/k/a “Ramon Guzman-Jimenez” a/k/a “Fortino” a/k/a “Ramon Jimenez” a/k/a “Fabian Cisneros” a/k/a “Hernan Torres Garcia” a/k/a “Potes” a/k/a “Alex”
33 / Winton, California
Conspiracy to Distribute and Possess with Intent to Distribute Controlled Substances (Count 1)
21 U.S.C. § 846
Not less than 10 years imprisonment and up to life
$10 million fine
Distribution of and Possession with Intent to Distribute Controlled Substances (Counts 2-4, 6-9, 11-13, 17, 21-23)
21 U.S.C. § 841(a)(1)
Not less than 5 years imprisonment and up to life
$5 million
JUAN DIEGO GALLEGOS-MOYA
23 / Santa Rosa, California
Conspiracy to Distribute and Possess with Intent to Distribute Controlled Substances (Count 1)
21 U.S.C. § 846
Not less than 10 years imprisonment and up to life
$10 million fine
Distribution of Controlled Substances (Counts 2-4, 6-7)
21 U.S.C. § 841(a)(1)
Not less than 5 years imprisonment and up to life
$5 million
ERNESTO OCHOA
33 / Sacramento, California
Conspiracy to Distribute and Possess with Intent to Distribute Controlled Substances (Count 1)
21 U.S.C. § 846
Not less than 10 years imprisonment and up to life
$10 million fine
Distribution of Controlled Substances (Counts 5, 14-15)
21 U.S.C. § 841(a)(1)
Not less than 5 years imprisonment and up to life
$5 million
ALFREDO TAPIA SANDOVAL,
a/k/a “Fredi Tapia-Sandoval” a/k/a “Fredi”
20 / Windsor, California
Conspiracy to Distribute and Possess with Intent to Distribute Controlled Substances (Count 1)
21 U.S.C. § 846
Not less than 10 years imprisonment and up to life
$10 million fine
Distribution of and Possession with Intent to Distribute Controlled Substances (Counts 8-9, 11, 17)
21 U.S.C. § 841(a)(1)
Not less than 5 years imprisonment and up to life
$5 million
MARCOS ALVAREZ CORONA
20 / Sacramento, California
Conspiracy to Distribute and Possess with Intent to Distribute Controlled Substances (Count 1)
21 U.S.C. § 846
Not less than 10 years imprisonment and up to life
$10 million fine
Distribution of Controlled Substances (Counts 10, 16, 18-19)
21 U.S.C. § 841(a)(1)
Not less than 5 years imprisonment and up to life
$5 million
ANTONIO RAMIREZ-JIMENEZ
36 / Santa Rosa, California
Conspiracy to Distribute and Possess with Intent to Distribute Controlled Substances (Count 1)
21 U.S.C. § 846
Not less than 10 years imprisonment and up to life
$10 million fine
Distribution of Controlled Substances (Count 20)
21 U.S.C. § 841(a)(1)
Not less than 5 years imprisonment and up to life
$5 million
JUAN CARLOS GUZMAN,
a/k/a “Jose Rosa-Perez”
30 / Winton, California
Conspiracy to Distribute and Possess with Intent to Distribute Controlled Substances (Count 1)
21 U.S.C. § 846
Not less than 10 years imprisonment and up to life
$10 million fine
Distribution of and Possession with Intent to Distribute Controlled Substances (Counts 21-22)
21 U.S.C. § 841(a)(1)
Not less than 5 years imprisonment and up to life
$5 million
ANGEL RINCON-MENETA
27 / Winton, California
Conspiracy to Distribute and Possess with Intent to Distribute Controlled Substances (Count 1)
21 U.S.C. § 846
Not less than 10 years imprisonment and up to life
$10 million fine
Distribution of and Possession with Intent to Distribute Controlled Substances (Counts 21-23)
21 U.S.C. § 841(a)(1)
Not less than 5 years imprisonment and up to life
$5 million
MARIO LAST NAME UNKNOWN
Unknown / Unknown
Conspiracy to Distribute and Possess with Intent to Distribute Controlled Substances (Count 1)
21 U.S.C. § 846
Not less than 10 years imprisonment and up to life
$10 million fine
Distribution of Controlled Substances (Count 23)
21 U.S.C. § 841(a)(1)
Not less than 5 years imprisonment and up to life
$5 million
ADILENE RAMIREZ
27 / Keyes, California
Conspiracy to Distribute and Possess with Intent to Distribute Controlled Substances (Count 1)
21 U.S.C. § 846
Not less than 10 years imprisonment and up to life
$10 million fine
Distribution of Controlled Substances (Count 24)
21 U.S.C. § 841(a)(1)
Not less than 5 years imprisonment and up to life
$5 million
ERICA LAGUNAS
36 / Stockton, California
Conspiracy to Distribute and Possess with Intent to Distribute Controlled Substances (Count 1)
21 U.S.C. § 846
Not less than 10 years imprisonment and up to life
$10 million fine
Distribution of Controlled Substances (Count 24)
21 U.S.C. § 841(a)(1)
Not less than 5 years imprisonment and up to life
$5 million
TERESA GUZMAN-RODRIGUEZ,
a/k/a “Mono” a/k/a “Monos”
38 / Winton, California
Conspiracy to Distribute and Possess with Intent to Distribute Controlled Substances (Count 1)
21 U.S.C. § 846
Not less than 10 years imprisonment and up to life
$10 million fine
The indictment and complaints merely allege that crimes have been committed, and each defendant must be presumed innocent until proven guilty beyond a reasonable doubt. These prosecutions are the result of investigations by the FBI in coordination with the Department of Homeland Security, Homeland Security Investigations, Drug Enforcement Administration, U.S. Postal Inspection Service, Sonoma County Sheriff’s Office, and Martinez Police Department. Additional assistance was provided by the U.S. Marshals Service, California Highway Patrol, California Counterdrug Task Force, Milpitas Police Department, and the Sheriff’s Offices of Marin, Contra Costa, and Merced Counties.
This case was 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.
Former California State Assemblyman Pleads Guilty to Money Laundering in Fraud Scheme Involving BART Coffee ShopsRead the Press Release
OAKLAND – Terrence Patrick Goggin pleaded guilty in federal court in San Francisco today to money laundering, announced United States Attorney David L. Anderson, Federal Bureau of Investigation Special Agent in Charge John F. Bennett, and Internal Revenue Service, Criminal Investigation (IRS-CI), Special Agent in Charge Kareem Carter. The plea was accepted by the Honorable James Donato, U.S. District Judge.
Goggin, 78, of San Francisco, is a former California State Assemblyman and current California-licensed attorney. According to his guilty plea, he admitted that, in 2013 and 2014, he was the founder and CEO of Metropolitan Coffee and Concession Company, LLC (“MC2”). From July 2007 to February 26, 2014, Goggin solicited investor money to build Peet’s Coffee retail centers, including two future centers that he claimed he would build at the Civic Center and Balboa Park BART stations. The investors for the MC2 projects included a group of four private equity investors who provided financing in September 2013 of $585,000 for the Civic Center project and an individual who invested $100,000 in September 2013 for the Balboa Park project. Goggin falsely represented to those investors that their money would be used to build out those specific future Peet’s Coffee retail centers, when, in truth, he planned to use the funds for other purposes. Goggin further admitted that he also failed to provide the investors with accurate information about the relationship between MC2 and BART and about the state of MC2’s finances. In addition, Goggin admitted that in September 2013 he diverted, and directed his employees to divert, nearly all of the $685,000 in investment funds to other business bank accounts associated with business ventures into which the investors had not agreed, or intended, to invest. Among other transfers, on September 12, 2013, the same day MC2 received $585,000 from the private equity investors, Goggin knowingly directed the transfer of $15,000 from the MC2 bank account to the business bank account of Aegis Atlantic LLC, a Delaware company of which Goggin was also CEO. That money was never used for the agreed-upon BART projects and was instead spent on other purposes.
On September 13, 2018, a federal grand jury returned a superseding indictment charging Goggin with four counts of wire fraud, in violation of 18 U.S.C. § 1343, and nine counts of money laundering, in violation of 18 U.S.C. § 1957. Under the plea agreement, Goggin pleaded guilty to one count of money laundering and agreed to pay restitution of at least $685,000.
Goggin remains free on bond, pending sentencing. Judge Donato scheduled Goggin’s sentencing hearing for April 1, 2020. Goggin faces a maximum statutory penalty of ten years in prison and a fine of $250,000, plus restitution, for the money laundering conviction. 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 Katherine Lloyd-Lovett is prosecuting the case with the assistance of Rebecca Shelton. The prosecution is the result of an investigation by the FBI and the IRS-CI.
Antioch Man Sentenced to 41 Months for Possession of AmmunitionRead the Press Release
OAKLAND – David Leigh Cook was sentenced today to 41 months in prison for being a felon in possession of 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 James Donato, U.S. District Judge.
Cook, 51, of Antioch, Calif., pleaded guilty to the charge on July 17, 2019. According to the plea agreement, Cook admitted that at approximately 3:45 p.m. on Super Bowl Sunday, February 3, 2019, he was in possession of a firearm and ammunition in Antioch, Calif., when he became involved in a dispute with another person. The dispute escalated, and the defendant fired his gun at the other man, striking him at least once. The defendant walked away, returned to his vehicle, and drove off. The defendant was arrested the next day. At the time of his arrest, the defendant did not possess a firearm; the firearm used in the Super Bowl Sunday shooting has never been recovered. The defendant acknowledged that at the time of the Super Bowl Sunday shooting, he knew he previously had been convicted of felonies in 2008, 2010, 2011, 2012, and 2014, and therefore was not eligible to possess a firearm or ammunition.
A federal grand jury indicted Cook on April 11, 2019. He was charged with being a felon in possession of ammunition, in violation of 18 U.S.C. § 922(g)(1).
The investigation began when emergency medical personnel responded to the scene of the Super Bowl Sunday shooting and rendered emergency medical treatment to stem the victim’s life-threatening blood loss. Emergency medical personnel and responding law enforcement officers observed spent ammunition casings in close proximity to the victim’s location.
In addition to the prison term, Judge Donato sentenced the defendant to a three-year period of supervised release. After today’s sentencing hearing, the defendant was returned to state custody where he faces additional charges.
Assistant U.S. Attorney Jonathan U. Lee is prosecuting the case with the assistance of Jessica Rodriguez Gonzalez and Kathleen Turner. The prosecution is the result of an investigation by the Federal Bureau of Investigation and the Antioch Police Department.
Two Associates of Nuestra Familia Prison Gang Plead Guilty to Federal Rico ConspiracyRead the Press Release
SAN JOSE- Juan Alvarez, a/k/a Chucky, and Ramon Montoya, a/k/a Little Ray, 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 Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The guilty pleas were accepted by the Honorable Beth L. Freeman, United States District Judge.
“Defendants Juan Alvarez and Ramon Montoya admitted that they have committed heinous crimes for the purpose of enhancing their membership in the Norteño prison gang,” said U.S. Attorney Anderson. “This case should serve as yet another reminder to people tempted by the allure of gang membership that gangs provide no benefits for their members other than long prison terms and lives of unpredictable violence.”
“Violent street gangs are a plague to our society,” said FBI San Francisco Special Agent in Charge John F. Bennett. “They prey on and terrorize our citizens and lay waste to our communities. These guilty pleas stand as a step towards ensuring justice is served and as a reminder that such behavior will not be tolerated.”
According to the plea agreements, between December 2, 2012, and April 14, 2014, Alvarez, 39, and Montoya, 36, both were members of the Nuestra Familia/Salinas Norteños 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, Alvarez and Montoya admit to participating in the distribution of narcotics to other inmates at Monterey County Jail. Also, the plea agreements 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.
Montoya and Alvarez both admitted that they participated in the October 23, 2013, removal of a victim from one of the housing units at the Monterey County Jail. Montoya admitted that he transmitted the order from the Norteño leadership that the removal was authorized. Alvarez admitted that he was a hitter in the attack and that he used a weapon made out of plexiglass to stab the victim in the neck. Both Montoya and Alvarez acknowledged that immediately after the victim was stabbed, two bombers began punching and kicking the victim to allow Alvarez to escape being caught by guards with the stabbing weapon. Montoya also admitted being a bomber on the November 13, 2013, removal of a victim. Montoya punched and kicked the victim after a hitter stabbed the victim approximately ten times. The victim was stabbed in the head, torso, and arms before Montoya began punching and kicking the victim to inflict the maximum damage possible.
On September 27, 2018, a federal grand jury indicted Alvarez, Montoya, and several other defendants with racketeering conspiracy, in violation of 18 U.S.C. § 1962(d). Both Alvarez and Montoya also were 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). Both 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 hearings for both defendants for March 31, 2020. The defendants face a maximum statutory sentence of life in prison, five years of supervised release, and a fine of $250,000. Pursuant to the terms of their plea agreements, both Montoya and Alvarez have agreed that a reasonable and appropriate disposition of their respective cases 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.
Assistant 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.
Justice Department Honors Rank-And-File Law Enforcement Officers and Deputies in Third Annual Attorney General’s Award for Distinguished Service in PolicingRead the Press Release
SAN FRANCISCO – Attorney General William P. Barr and Justice Department leadership today announced the recipients of the Third Annual Attorney General’s Award for Distinguished Service in Policing, recognizing the exceptional work of 19 law enforcement officers and deputies from 12 jurisdictions across the country.
Alameda County Sheriff’s Deputy Richard Hassna was among those law enforcement officers recognized at the ceremony. Deputy Hassna received the award for his innovative use of Small Unmanned Aerial Systems (sUAS) for public safety operations around the United States. Deputy Hassna has personally assisted hundreds of public safety agencies around the nation with establishing their own sUAS programs to provide close-air support to public safety agencies in dangerous situations. Deputy Hassna participated in the development of a general order, operations manual, and maintenance program, some of which are being used by agencies throughout the nation. Further, in 2018, Deputy Hassna assisted in the deadly Camp Fire in Butte County, which left 85 people dead and became the most deadly wildland fire in California history. Through Deputy Hassna’s leadership, more than 16 unmanned aerial vehicle teams conducted 517 flights in two days and took more than 70,000 images, which were later stitched into a map that allowed residents to see the damage to their property without being exposed to danger. This response was likely the largest response of small unmanned aerial vehicles to a disaster scene in U.S. history.
“Honoring and supporting the work of law enforcement of¬ficers and deputies is a top priority for the Trump Administration, and today is an opportunity for me to personally express my gratitude and commitment to those who risk their lives daily to protect our communities,” said Attorney General Barr. “The Attorney General’s Award for Distinguished Service in Policing honors exceptional police officers and the vital public service they provide. The brave men and women in law enforcement are engaged in an unrelenting and often unacknowledged fight to keep our communities safe each and every day. It is an honor to thank them for their service.”
President Donald J. Trump established clear directives for the Department of Justice – with three Executive Orders – demonstrating his strong support of the law enforcement community. These Executive Orders commit the Department to working in tandem with state and local law enforcement to restore the rule of law, reduce violent crime, dismantle criminal gangs, and combat the growing drug epidemic. Today the Department of Justice continues to support the President’s directive to honor law enforcement officers by announcing the third annual Attorney General’s Award for Distinguished Service in Policing.
The Attorney General’s Award recognizes individual state, local, and tribal sworn rank-and-file police officers and deputies for exceptional efforts in policing. The awarded officers and deputies have demonstrated active engagement with the community in one of three areas: criminal investigations, field operations or innovations in community policing. The Department received 199 nominations for 414 individuals ranging from state police departments, to local police, to campus public safety agencies. This award highlights the work that troopers, officers and deputies do to prevent, intervene in, and respond to crime and public safety issues.
East Bay Resident Charged with Making False Statements to Gain Admittance for Military ServiceRead the Press Release
SAN FRANCISCO – Ross Anthony Farca was charged in a criminal complaint with making a false statement to a government agency, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F Bennett.
In a complaint filed November 19, 2019, a redacted version of which was unsealed today, Farca, 23, of Concord, was charged with making a false statement on an online background check application in his bid to join the U.S. Army. According to the complaint, on June 22, 2017, Farca traveled to a U.S. Army Recruitment Center in Mountain View, Calif., where he completed and submitted the background check application, also known as an SF-86. The SF-86 contains language specifically warning that falsifying or concealing a material fact on the application is a felony which may result in fines or imprisonment. In this case, the criminal complaint alleges that Farca nevertheless knowingly made false statements about his mental health when completing the form. Specifically, he affirmatively stated that he had not received mental health treatment, which the complaint alleges was not true.
According to the complaint, Farca had been in regular contact with a psychiatrist since 2011. In addition, Farca allegedly had received prescriptions for various medications and had received treatments to manage his mental disorders. Further, according to the complaint, Farca understood that because of his diagnosis, he needed a letter of clearance from a mental health professional before he would be qualified to enlist in the army. The complaint alleges that Farca requested a letter of clearance from both his psychiatrist and a caseworker familiar with his condition; both mental health professionals, however, denied Farca’s request for a clearance letter. The complaint further alleges that when Farca completed the SF-86, rather than admit he had been seeing a psychiatrist and that he was unable to obtain a letter clearing him for duty, Farca instead denied he had ever had counseling for his psychological or emotional health. According to the complaint, Farca reported to basic training on August 28, 2017, and was discharged October 3, 2017. The discharge paperwork cited "failed medical / physical / procurement standards" and noted, "erroneous enlistment; medical condition disqualifying for military service, with no medical waiver approved."
The complaint suggests that evidence of Farca’s false statements on the SF-86 was obtained during the June 10, 2019, search of his home. Officers from the Concord Police Department executed warrants to arrest Farca and to search his home while investigating messages Farca posted on an online video game website. The complaint describes several messages Farca allegedly posted using his online name “Adolf Hitler (((6 MILLION)))” about carrying out a mass shooting of synagogues and praising terrorists who have perpetrated recent mass shootings at houses of worship. During the search of Farca’s home, paperwork relating to his psychiatric condition and his military service discharge were found.
The complaint charges Farca with knowingly making false statements to a government agency, in violation of 18 U.S.C. § 1001(a)(2). The charges contained in the criminal complaint are mere allegations. As in any criminal case, the defendant is presumed innocent unless and until proven guilty in a court of law.
Farca currently is in federal custody pending a continued detention hearing currently scheduled before U.S. Magistrate Judge Sallie Kim on Tuesday, November 26, 2019 at 10:30. If convicted, Farca faces a maximum statutory penalty maximum sentence of five years imprisonment and a fine of $250,000, plus restitution, for each violation of 18 U.S.C. § 1001(a)(2). 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 case is being prosecuted by the Special Prosecutions and National Security Unit of the U.S. Attorney’s Office in San Francisco and investigated by the FBI and the Concord Police Department.
Korean National Sentenced to 10 Years in Prison for Role in Foreign Exchange Trading ScamRead the Press Release
OAKLAND – Jin K. Chung was sentenced to 120 months in prison for money laundering, 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 Jeffrey S. White, U.S. District Judge.
On September 3, 2019, Chung, 56, of Seoul, Korea, pleaded guilty to laundering money he obtained from a foreign exchange trading scam. According to his guilty plea, Chung acknowledged more than 400 victims lost approximately $60,302,886.59 as a result of the scam. Chung admitted that, in 2003, he and codefendant Peter Son, 47, of Portland, Oregon, started two companies, SNC Asset Management, Inc., and SNC Investments, Inc., both headquartered in Pleasanton, California. Chung admitted that he falsely advertised both companies as highly successful in foreign exchange trading. Further, Chung promised potential investors they would receive annual investment returns of between 24% and 36%. Chung knew that these representations were false and made with the intention of attracting individuals to invest in the two companies. Chung acknowledged that hundreds of investors opened accounts and deposited money into the two companies based upon the fraudulent representations. Chung and Son deposited the clients’ funds into bank accounts they controlled. While directing employees of the companies to send monthly statements to the investors that falsely reported accrued earnings, Chung regularly cashed checks or arranged wire transfers in amounts over $10,000 for his own benefit. By October 2008, the defendants depleted the funds in the companies’ accounts and closed both businesses without advance notice to employees or clients.
Chung originally was charged in connection with this scheme on May 29, 2009. The defendant was extradited from the Republic of Korea in February of 2019. Chung was charged by information on July 8, 2019. The information alleged a single count of engaging in monetary transactions in property derived from money laundering, in violation of 18 U.S.C. § 1957. Chung pleaded guilty to the charge.
Son is currently serving a prison term of 180 months for his role in the scheme. On April 9, 2010, Son pleaded guilty to conspiracy to commit wire fraud and conspiracy to engage in monetary transactions with the proceeds of wire fraud, in violation of 18 U.S.C. §§ 1349 and 1956(h), respectively. The Honorable D. Lowell Jensen, U.S. District Judge, ret., sentenced Son to the prison term on July 30, 2010, and on October 14, 2011, ordered Son to pay $60,302,886.59 in restitution to his victims.
Assistant U.S. Attorney Jonathan U. Lee is prosecuting the case with the assistance of Jessica Rodriguez Gonzalez and Kathleen Turner. The prosecution is the result of an investigation by the Securities and Exchange Commission, U.S. Commodities Futures Trading Commission, the FBI and the IRS.
Sureno Gang Member Sentenced to More Than Eight Years in Prison for Drug TraffickingRead the Press Release
SAN JOSE – Edgar Gaspar was sentenced today to 97 months in prison for possession with the intent to distribute methamphetamine, 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 Lucy H. Koh, U.S. District Judge.
Gaspar, 21, of San Jose, Calif., pleaded guilty to the charge on September 18, 2019. In his plea agreement, Gaspar admitted that he is a Sureño gang member who, on July 15, 2018, was the subject of a traffic stop by officers of the San Jose Police Department. Gaspar was arrested after the officers found a handgun in his vehicle.
Further, on November 27, 2018, law enforcement officers executed a search warrant at his San Jose residence where agents found and seized four assault rifles with high capacity magazines and ammunition, approximately 500 grams of crystal methamphetamine and drug trafficking materials, as well as additional Sureno gang indicia. Gaspar admitted that all the items belonged to him and that he possessed the firearms in connection with his drug trafficking.
A grand jury indicted Gaspar on February 5, 2019, charging him with possession with intent to distribute methamphetamine, in violation of 21 U.S.C. § 841(a)(1). He pleaded guilty to the charge.
In addition to the prison term, Judge Koh also sentenced Gaspar to a five-year period of supervised release and a $100 special assessment. Gaspar currently is in custody and will begin serving his sentence immediately.
Assistant United States Attorneys Stephen James Meyer and Meredith Osborn are prosecuting the case with the assistance of Lance Libatique and Nina Williams. The prosecution is the result of an investigation by the FBI and the San Jose Police Department.
Former San Francisco Deputy Sheriff Sentenced to 14 Months Imprisonment for Scheme to Defraud Insurance CompanyRead the Press Release
SAN FRANCISCO – Former San Francisco Deputy Sheriff April Myres was sentenced to 14 months in prison for committing mail and wire fraud, 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.
The sentence follows an eight-day trial that resulted in a jury convicting Myres, 55, of San Francisco, of the two crimes on June 26, 2019. The evidence at trial demonstrated that Myres reported a burglary of her home to the San Francisco Police Department on March 25, 2016. As part of her report to the police, she claimed numerous items were stolen, including the firearm, her San Francisco Sheriff’s Department (SFSD)-issued radio, and numerous luxury goods. After making the report, Myres repeatedly refused to cooperate with the investigation. Then, in May 2016, Myres filed an insurance claim under her homeowner’s policy. In her claim, Myres stated that the SFSD-issued firearm, the SFSD-issued radio, and the luxury goods had been stolen. Myres asserted in her insurance claim that she was entitled to over $67,000 in reimbursement for all of the items stolen.
An investigation by the FBI revealed that Myres made numerous false statements in her insurance claim. For example, Myres told the insurance company she had no suspects in the burglary and no estranged boyfriends who might have been responsible. Nevertheless, the evidence showed that while she had been working at the San Francisco County Jail, Myres had carried on a romantic relationship with an inmate, Antoine Fowler. Immediately after Fowler was released from custody in January 2016, he went to Myres’ house where he lived until March 24, 2016, the morning of the claimed burglary, when he moved out after a late-night dispute with Myres.
In addition, the evidence demonstrated Myres made numerous false statements in the insurance claim about the items she claimed had been stolen. For example, she falsely claimed she owned the SFSD-issued firearm and SFSD-issued radio that she said had been stolen, and provided false details about the purchase prices and locations to bolster her claim. She also made false statements about items that had been stolen, including claiming that three items – a Louis Vuitton purse, Gucci boots, and a fox fur vest – were stolen; all three of these items were located in her house when the FBI conducted a search in February 2017.
Following its investigation into Myres and Fowler, the FBI arrested Myres and Fowler on February 2, 2017, and found Myres’ SFSD-issued firearm in Fowler’s possession.
On April 11, 2017, a federal grand jury indicted Myres and Fowler. The grand jury charged Myres with one count each of mail fraud, in violation of 18 U.S.C. § 1341, and wire fraud, in violation of 18 U.S.C. § 1343. The grand jury also charged Myres with misprision of a felony, in violation of 18 U.S.C. § 4, for deliberately concealing from law enforcement that Fowler had her firearm. The trial jury found Myres guilty of the wire fraud and mail fraud counts and acquitted her of the misprision of a felony charge.
In addition to the prison term, Judge Seeborg ordered Myres to serve 14 months of supervised release to begin after the prison term is concluded. Judge Seeborg described Myres’ conduct as “shameful” and agreed with a court document assessing Myres’ role in the offenses—the document contained the following assessment: “when those sworn to uphold the law become the very ones who break the law, the entire criminal justice system is undermined.”
Judge Seeborg ordered Myres released on a $1,000,000 secured bond until she surrenders to the Bureau of Prisons to begin serving her prison term. Judge Seeborg ordered Myres to surrender on or before January 28, 2020.
For his part in the events, Fowler 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). Fowler was released on a $50,000 bond and remains out of custody pending sentencing. Judge Seeborg scheduled Fowler’s sentencing for January 7, 2020. The maximum statutory penalty for felon in possession of a firearm, in violation of 18 U.S.C. § 922(g)(1), is 10 years imprisonment, three years of supervised release, and a fine of $250,000. However, any sentence will 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. Attorneys Laura Vartain and Nicholas Walsh are prosecuting the case with the assistance of Helen Yee, Kimberly Richardson, Margoth Turcios, Sutton Pierce, and Ian Meader. The prosecution is the result of an investigation by the FBI and the San Francisco Police Department.
Hawaii Resident Pleads Guilty to Wire Fraud in Connection with Scheme to Defraud East Bay BusinessesRead the Press Release
OAKLAND – Rodney Ticanis Sparrow pleaded guilty today to committing wire fraud in connection with a scheme to defraud business owners of fees for promised business loans announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The plea was accepted by the Honorable Haywood S. Gilliam, Jr., U.S. District Judge.
According to the plea agreement, Sparrow, 38, of Kahului, Maui, Hawaii, admitted that between 2012 and 2015, he implemented an “Advanced Fee” scheme in which he used fake identities of supposed New York-based Goldman Sachs bankers to convince his victims to pay fees in exchange for business improvement loans. Sparrow admitted he never had the means nor intent to provide the loans.
While living in Hawaii, Sparrow pretended to be a New York banker, using Goldman Sachs and “GS Financial Co.” in email correspondence with victims. He never used his own name and instead used the names of “Brad Schuller” and “Chad Edwardson,” two persons that did not exist. Sparrow promised to process and provide business loans in exchange for substantial fees. In emails and telephone calls with his victims, Sparrow directed his victims to pay the fees by wire and other electronic means into a Bank of America account he represented was a business account affiliated with Goldman Sachs. In truth, Sparrow controlled the Bank of America account, he never worked for Goldman Sachs, and he never worked in the financial industry in any capacity. Pursuant to the scheme, Sparrow defrauded at least ten victims into paying him approximately $298,350 in bogus advanced fees.
On March 26, 2019, a federal grand jury indicted Sparrow, charging him with ten counts of wire fraud, in violation of 18 U.S.C. § 1343. Sparrow pleaded guilty to one count. If Sparrow complies with his plea agreement, the remaining counts will be dismissed at sentencing.
Judge Gilliam has scheduled Sparrow’s sentencing for March 9, 2020. The maximum statutory penalty for wire fraud is 20 years in prison, a $250,000 fine, and 3 years of supervised release. Additional fines, forfeitures, and special assessments also may be imposed, however, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant United States Attorney Thomas R. Green is prosecuting this case with the assistance of Katie Turner. This prosecution is the result of an investigation by the FBI.
Alleged Cryptocurrency Fraudster Extradited from Thailand to Face Charges in Multi-Million Dollar Investment SchemeRead the Press Release
SAN FRANCISCO – Roger Nils-Jonas Karlsson, a citizen of Sweden, has been extradited from Thailand to stand trial for alleged securities fraud, wire fraud, and money laundering, announced United States Attorney David L. Anderson; Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division; and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Washington, D.C. Field Office.
On July 25, 2019, a federal grand jury indicted Roger Nils-Jonas Karlsson, 45, and his company, Eastern Metal Securities (EMS), charging the defendants with engaging in a scheme to defraud victims of more than $11 million. Karlsson was arrested June 17, 2019, in Thailand.
According to a complaint filed March 4, 2019, in connection with the case, Karlsson, also known by several aliases including Steve Heyden, Euclid Deodoris, Joshua Millard, Lars Georgsson, Paramon Larasoft, and Kenth Westerberg, used websites to communicate false representations to victims in a scheme to defraud potential investors. For example, one website, www.easternmetalsecurities.com, allegedly was registered to a fictitious person and advertised shares in a product called a “Pre Funded Reversed Pension Plan” (PFRPP). The complaint alleges Karlsson used the website to invite potential investors to purchase shares of the plan for $98 per share in exchange for an eventual payout of 1.15 kilograms of gold per share, even though as of January 2, 2019, 1.15 kilograms of gold was worth more than $45,000.
Karlsson also allegedly advised investors that, in the unlikely event that the gold payout did not happen, he guaranteed to them 97% of the amount they invested. According to the complaint, the government found no evidence of any accounts held by Karlsson that would allow him to pay off the investors. Instead, the complaint alleges, the funds provided by victims were transferred to Karlsson’s personal bank accounts and now appear to be tied up in real estate in Thailand.
The complaint further describes how Karlsson allegedly used a second website, www.hci25.com, to make multiple false communications to potential investors. Karlsson allegedly brought the investors in HCI25 together with the investors in the PFRPP and posted multiple communications to delay the moment investors would realize there would be no payout. For example, on one occasion, Karlsson allegedly explained that a payout had not occurred because releasing so much money all at once could cause a negative effect on financial systems throughout the world. Karlsson also falsely represented that EMS was working with the U.S. Securities and Exchange Commission to prepare the way for a payout.
The complaint alleges Karlsson directed his victims to make investments using virtual currencies, such as Bitcoin. Karlsson allegedly defrauded no less than 3,575 victims of more than $11 million.
The indictment charges Karlsson with wire fraud, in violation of 18 U.S.C. § 1343; securities fraud, in violation of 15 U.S.C. §§ 78j(b) and 78ff and 17 C.F.R. § 240.10b-5; and money laundering, in violation of 18 U.S.C. § 1957. Karlsson was arrested June 17, 2019, in Thailand and arrived in the United States today to face the charges.
An indictment and a criminal complaint merely allege that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.
Karlsson made his initial federal court appearance this morning before U.S. Magistrate Judge Sallie Kim. Magistrate Judge Kim ordered Karlsson detained and pending a further detention hearing scheduled for Friday, November 22, 2019.
If convicted, the defendant faces a maximum sentence of 20 years in prison and a maximum $250,000 fine for the wire fraud and securities fraud charges, and 20 years in prison and a $500,000 maximum fine for the money laundering charge. In addition, the court also may order an additional term of supervised release, fines or other assessments, and restitution, if appropriate. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney William Frentzen and Trial Attorney Catherine Alden Pelker of the Department of Justice Criminal Division’s Computer Crime and Intellectual Property Section are prosecuting this case. This prosecution is the result of an investigation by the IRS-CI Washington, D.C. Cyber Crimes Unit. The Criminal Division’s Office of International Affairs, the FBI Legal Attaché Office in Thailand, the IRS Criminal Investigation Attaché Office in Hong Kong and the Royal Thai Police Crime Suppression Division provided significant assistance.
Federal-State Law Enforcement Partnership Results in Multiple Arrests in South Bay CountiesRead the Press Release
SAN FRANCISCO – Officials from over a dozen law enforcement agencies arrested and charged more than two dozen defendants with a variety of state and federal crimes pursuant to a joint federal-state effort to combat crime in South Bay counties, announced U.S. Attorney David L. Anderson and Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) San Francisco Field Division Special Agent in Charge Rayfield Roundtree.
The investigation was spearheaded by the ATF. The agency coordinated operations with the U.S. Marshal Service; the Homeland Security Investigations, the Federal Bureau of Investigations, the San Mateo County Sheriff’s Office; the San Joaquin County Sherriff’s Office; the California Department of Corrections; the California Highway Patrol; and the police departments of Redwood City, San Mateo, San Francisco, and Daly City to arrest and charge the defendants. In addition to the arrests, law enforcement officials seized more than 130 firearms, 39 pounds of methamphetamine, and about 20 pounds of marijuana over the course of the operation.
“Guns and drugs are a dangerous combination,” said U.S. Attorney Anderson. “Public safety demands the kind of law enforcement cooperation we see in this enforcement action.”
“Combating violent crime is at the core of ATF’s mission and we stand at the frontline of eradicating violent crime from our streets,” said Special Agent in Charge Ray Roundtree, San Francisco Field Division, ATF. “It is our duty to make this community a safer place for you and your families. This operation was years in the making. Years ago, ATF and the San Mateo County Gang Intelligence Unit began laying the foundation for the culmination you see here today. We believe that one firearm in the hand of a criminal or prohibited person is one firearm too many. The work you see here today is about making neighborhoods safer because to us the most important thing is that you and your loved ones make it home safely every day. Today ATF and our partners stand united in honoring that promise to you. Through everyone’s hard work and dedication, this large-scale operation has been a true success. These are also our neighborhoods and today they are a safer place.”
The defendants have been charged with a variety of state and federal crimes. The defendants charged with federal crimes include the following:
Name
Age/Residence
Charges
Maximum Statutory Sentence
Francisco Garibay
21, South San Francisco
Distribution of fifty grams and more of methampheta-mine, in violation of 21 U.S.C. §§ 841(a)(1) and (b)(1)(B)(viii)
(two counts)
40 years in prison and a $5 million fine, per count
Jonathan Flores
20, San Mateo
Distribution of fifty grams and more of methampheta-mine, in violation of 21 U.S.C. §§ 841(a)(1) and (b)(1)(B)(viii)
(two counts)
40 years in prison and a $5 million fine
Vladimir Magallan- Gallegos
26, Modesto
Possession with intent to distribute fifty grams and more of methamphetamine, in violation of 21 U.S.C. §§ 841(a)(1) and (b)(l)(B)(viii)
40 years in prison and a $5 million fine
Jonathan Robert Figueroa
25, Redwood City
Conspiracy to deal firearms without a license, in violation of 18 U.S.C. § 371;
Dealing firearms without a license and aiding and abetting, in violation of 18 U.S.C. §§ 922(a)(1)(A) and 2
5 years in prison and a $250,000 fine, per count
Erizondo Mora-Tapia
25, East Palo Alto
Conspiracy to deal firearms without a license, in violation of 18 U.S.C. § 371;
Dealing firearms without a license and aiding and abetting, in violation of 18 U.S.C. §§ 922(a)(1)(A) and 2
5 years in prison and a $250,000 fine, per count
Jesus Antonio Tapia
19, Sunnyvale
Conspiracy to deal firearms without a license, in violation of 18 U.S.C. § 371;
Dealing firearms without a license and aiding and abetting, in violation of 18 U.S.C. §§ 922(a)(1)(A) and 2;
Possession of an unregistered firearm, in violation of 26 U.S.C. § 5861(d)
5 years in prison and a $250,000 fine
5 years in prison and a $250,000 fine
10 years in prison and a $10,000 fine
Hernan Padilla- Landa
25, Tracy
Conspiracy to deal firearms without a license, in violation of 18 U.S.C. § 371;
Dealing firearms without a license and aiding and abetting, in violation of 18 U.S.C. §§ 922(a)(1)(A) and 2;
Possession of a firearm with a removed serial number, in violation of 18 U.S.C. § 922(k)
5 years in prison and a $250,000 fine
5 years in prison and a $250,000 fine
10 years in prison and a $250,000 fine
William Alexis-Villa
22, Menlo Park
Conspiracy to deal firearms without a license, in violation of 18 U.S.C. § 371;
Dealing firearms without a license and aiding and abetting, in violation of 18 U.S.C. §§ 922(a)(1)(A) and 2;
Possession of a machine gun and aiding and abetting, in violation of 18 U.S.C. §§ 922(o) and 2;
Possession of an unregistered firearm, in violation of 26 U.S.C. § 5861(d)
(two counts)
5 years in prison and a $250,000 fine
5 years in prison and a $250,000 fine
10 years in prison and a $250,000 fine
10 years in prison and a $10,000 fine, per count
Francisco Nunez-Nepita
21, East Palo Alto
Conspiracy to deal firearms without a license, in violation of 18 U.S.C. § 371;
Dealing in firearms without a license and aiding and abetting, in violation of 18 U.S.C. §§ 922(a)(1)(A) and 2;
Possession of a machine gun and aiding and abetting, in violation of 18 U.S.C. § 922(o), and 2
5 years in prison and a $250,000 fine
5 years in prison and a $250,000 fine
10 years in prison and a $250,000 fine
Erik Acevedo-Cruz
19, Fremont
Conspiracy to deal firearms without a license, in violation of 18 U.S.C. § 371;
Dealing firearms without a license and aiding and abetting, in violation of 18 U.S.C. §§ 922(a)(1)(A) and 2;
Possession of an unregistered firearm, in violation of 26 U.S.C. § 5861(d)
5 years in prison and a $250,000 fine
5 years in prison and a $250,000 fine
10 years in prison and a $10,000 fine
Jaime Avina Barajas
19, East Palo Alto
Possession of a machine gun and aiding and abetting, in violation of 18 U.S.C. § 922(o) and 2;
Possession of an unregistered firearm, in violation of 26 U.S.C. § 5861(d)
10 years in prison and a $250,000 fine
10 years in prison and a $10,000 fine
Noe Robledo-Lopez, Jr.,
19, Redwood City
Possession of an unregistered firearm, in violation of 26 U.S.C. § 5861(d)
10 years in prison and a $10,000 fine
Jose Buenrostro
30, Redwood City
Conspiring to deal firearms without a license and dealing firearms without a license, in violation of 18 U.S.C. §§ 371 and 922(a)(1)(A);
Felon in possession of a firearm or ammunition, in violation of 18 U.S.C. § 922(g)(1);
Conspiring to distribute or possess with intent to distribute, and distributing or possessing with intent to distribute 50 grams and more of methamphetamine, in violation of 21 U.S.C. §§ 841(a), (b)(1)(B)(viii), and 846
5 years in prison and a $250,000 fine, per count
10 years in prison and a $250,000 fine
40 years in prison and a $5 million fine
Cristian Rafael Morales
23, San Mateo
Distribution of methamphetamine, in violation of 21 U.S.C. §§ 841(a)(1) and (b)(1)(C)
20 years in prison and a $1 million fine
Mario Carlos
24, Cottonwood
Felon in possession of a firearm or ammunition, in violation of 18 U.S.C. § 922(g)(1)
10 years in prison and a $250,000 fine
Daniel Zaragoza
32, Oakland
Felon in possession of a firearm or ammunition, in violation of 18 U.S.C. § 922(g)(1)
10 years in prison and a $250,000 fine
The indictments merely allege that crimes have been committed, and each defendant must be presumed innocent until proven guilty beyond a reasonable doubt. These prosecutions are the result of investigations by the ATF in coordination with Homeland Security Investigations (HSI) and the Federal Bureau of Investigation. Additional assistance was provided by the U.S. Marshal Service; the San Mateo County Sheriff’s Office; San Joaquin County Sherriff’s Office; the California Department of Corrections; the California Highway Patrol; and the police departments of Redwood City, San Mateo, San Francisco, and Daly City.
California Health System and Surgical Group Agree to Settle Claims Arising from Improper Compensation ArrangementsRead the Press Release
Several hospitals owned and operated by Sutter Health (Sutter), a California-based healthcare services provider, and Sacramento Cardiovascular Surgeons Medical Group Inc. (Sac Cardio), a practice group of three cardiovascular surgeons, have agreed to pay the United States a total of $46,123,516 to resolve allegations arising from claims they submitted to the Medicare program, the Department of Justice announced today.
The Physician Self‑Referral Law, commonly known as the Stark Law, prohibits a hospital from billing Medicare for certain services referred by physicians with whom the hospital has a financial relationship, unless that relationship satisfies one of the law’s statutory or regulatory exceptions. It is intended to ensure that medical decision-making is not influenced by improper financial incentives and is instead based on the best interests of the patient.
As part of the settlements announced today, one of Sutter’s hospitals, Sutter Memorial Center Sacramento (SMCS), has agreed to pay $30.5 million to resolve certain allegations that, from 2012 to 2014, it violated the Stark Law by billing Medicare for services referred by Sac Cardio physicians, to whom it paid amounts under a series of compensation arrangements that exceeded the fair market value of the services provided. Relatedly, Sac Cardio has agreed to pay $506,000 to resolve allegations that it knowingly submitted duplicative bills to Medicare for services performed by physician assistants that it was leasing to SMCS under one of those compensation arrangements.
“Improper financial arrangements between hospitals and physicians can influence the type and amount of health care that is provided,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “The Department is committed to taking action to eliminate improper inducements that can impact physician decision-making.”
“This office will continue to take all appropriate action to help ensure that the beneficiaries of federal health care programs receive services untainted by improper financial incentives,” said U.S. Attorney David L. Anderson for the Northern District of California.
“Providers must rigorously comply with the law and Medicare requirements” said U.S. Attorney McGregor W. Scott for the Eastern District of California. “This office is committed to pursuing enforcement actions that will ensure the integrity of federal health care programs.”
Separately, Sutter has agreed to pay $15,117,516 to resolve other conduct that it self‑disclosed to the United States, principally concerning additional violations of the Stark Law. Specifically, Sutter hospitals submitted Medicare claims that resulted from referrals by physicians to whom those hospitals (1) paid compensation under personal services arrangements that exceeded the fair market value of the services provided; (2) leased office space at below-market rates; and (3) reimbursed physician-recruitment expenses that exceeded the actual recruitment expenses at issue. Additionally, several Sutter ambulatory surgical centers double-billed the Medicare program by submitting claims that included radiological services for which Medicare separately paid another entity that had performed those services.
Certain allegations relating to SMCS and Sac Cardio were originally brought by Laurie Hanvey in a lawsuit filed under the whistleblower provisions of the False Claims Act, which allow private parties to bring suit on behalf of the federal government and to share in any recovery. The whistleblower will receive $5,891,140 as her share of the federal government’s recovery in this case. The case is captioned United States ex rel. Hanvey v. Sutter Health et al., Civil Action No. 14-4100 (N.D. Cal.).
These matters were handled on behalf of the government by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Northern District of California, and the U.S. Attorney’s Office for the Eastern District of California. Investigative support was provided by the Department of Health and Human Services’ Office of the Inspector General.
The claims resolved by these settlements are allegations only and there has been no determination of liability.
California Health Group and Surgical Group Agree to Settle Claims Arising from Improper Compensation ArrangementsRead the Press Release
SAN FRANCISCO – Several hospitals owned and operated by Sutter Health (“Sutter”), a California-based healthcare services provider, and Sacramento Cardiovascular Surgeons Medical Group, Inc. (“Sac Cardio”), a practice group of three cardiovascular surgeons, have agreed to pay the United States a total of $46,123,516.36 to resolve allegations related to reimbursement claims they submitted to the Medicare program, the Department of Justice announced today.
The Physician Self Referral Law, commonly known as the Stark Law, prohibits a hospital from billing Medicare for certain services referred by physicians with whom the hospital has a financial relationship, unless that relationship satisfies one of the law’s statutory or regulatory exceptions. The law is intended to ensure that medical decisions are not influenced by improper financial incentives.
As part of the settlements announced today, one of Sutter’s hospitals, Sutter Memorial Center Sacramento (“SMCS”), has agreed to pay $30.5 million to resolve allegations that, from 2012 to 2014, it violated the Stark Law by billing Medicare for services referred by Sac Cardio physicians, to whom it paid amounts under a series of compensation arrangements that exceeded the fair market value of the services provided. Relatedly, Sac Cardio has agreed to pay $506,000 to resolve allegations that it improperly submitted duplicative bills to Medicare for services performed by physician assistants that it was leasing to SMCS under one of those compensation arrangements.
“Improper financial arrangements between hospitals and physicians can influence the type and amount of health care that is provided,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “The Department is committed to taking action to eliminate improper inducements that can corrupt the integrity of physician decision-making.”
“Medical decisions should be based on the best interests of the patient, not improper financial incentives. In this case, the Stark Law is being enforced to ensure that Medicare recipients and other beneficiaries of federal health care programs receive care untainted by prohibited financial incentives,” said David L. Anderson, United States Attorney for the Northern District of California.
Separately, Sutter has agreed to pay $15,117,516.36 to resolve other conduct that the company itself disclosed to the United States, principally concerning additional violations of the Stark Law. Specifically, Sutter hospitals submitted Medicare claims that resulted from referrals by physicians to whom those hospitals (1) paid compensation under personal services arrangements that exceeded the fair market value of the services provided; (2) leased office space at below-market rates; and (3) paid reimbursements of physician-recruitment expenses that exceeded the actual recruitment expenses at issue. Additionally, several Sutter ambulatory surgical centers double-billed the Medicare program by submitting claims that included radiological services for which Medicare separately paid another entity that had performed those services.
“Providers must rigorously comply with the law and Medicare requirements” said United States Attorney McGregor Scott. “This office is committed to pursuing enforcement actions that will ensure the integrity of federal health care programs.”
The allegations relating to SMCS and Sac Cardio were originally brought by Laurie Hanvey in a lawsuit filed under the whistleblower provisions of the False Claims Act, which allow private parties to bring suit on behalf of the federal government and to share in any recovery. The whistleblower will receive $5,891,140 as her share of the federal government’s recovery in this case.
These matters were handled on behalf of the government by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Northern District of California, and the U.S. Attorney’s Office for the Eastern District of California. Investigative support was provided by the Department of Health and Human Services’ Office of the Inspector General.
The claims resolved by these settlements are allegations only and there has been no determination of liability.
Antioch Resident Sentenced to More Than 11 Years in Prison for Possession of Child PornographyRead the Press Release
OAKLAND – Sonny Mitchell was sentenced today to 135 months in prison for possession of child pornography, announced United States Attorney David L. Anderson and United States Secret Service Special Agent in Charge Thomas C. Edwards. The Honorable Jon S. Tigar, U.S. District Judge, handed down the sentence earlier today.
Mitchell, 45, of Antioch, pleaded guilty to the charge on August 16, 2019. According to his plea agreement, Mitchell admitted to possessing and distributing to others images of children as young as seven years old engaged in sexually explicit conduct. Mitchell used a social media platform to communicate with others and then distribute the images, which included videos and GIFs (Graphics Interchange Format). In one video, an adult male voice is heard giving directions to two minors who were engaged in sexually explicit conduct. Mitchell also agreed he was subject to a minimum sentence of ten years imprisonment because of his conviction in 1999 for unlawful sex with a minor.
A federal grand jury indicted Mitchell on May 9, 2019, charging him with two counts of distribution of child pornography, in violation of 18 U.S.C. § 2252(a)(2) and (b)(1), and one count of possession of child pornography in violation of 18 U.S.C. § 2252(a)(4)(B) and (b)(2). Mitchell pleaded guilty to the possession count and the distribution counts were dismissed at sentencing.
This investigation began when a member of the public called local police to report Mitchell’s transmission of child pornography using a social media platform. In addition, during the course of the investigation, Mitchell was identified as the user of a social media account that had been reported by the National Center for Missing and Exploited Children (NCMEC) as being used to transmit child pornography. NCMEC had received a cyber-tip indicating that an individual was using a social media platform to send child pornography to other users. Law enforcement eventually identified Mitchell as the user of the account transmitting the images.
In addition to the prison term, Judge Tigar sentenced Mitchell to seven years of supervised release. The defendant will begin serving the prison term immediately. In addition, Judge Tigar scheduled a hearing for January 24, 2020, to determine issues regarding restitution.
Assistant U.S. Attorney Jonathan U. Lee is prosecuting the case with the assistance of Jessica Rodriguez and Kathleen Turner. The prosecution is the result of an investigation by the U.S. Secret Service, the Silicon Valley Internet Crimes Against Children Task Force, the Contra Costa District Attorney’s Office, and the Antioch Police Department.
Former Marin Youth Film Educator Sentenced to Three Years in Prison for Possession of Child PornographyRead the Press Release
SAN FRANCISCO – John Morrison was sentenced to three years in prison for possessing child pornography, announced United States Attorney David L. Anderson. The sentence was handed down by the Honorable Charles R. Breyer, U.S. District Judge.
Morrison, 73 of San Francisco, pleaded guilty to the charge on June 19, 2019. According to his plea agreement, Morrison admitted that in March 2017, he possessed more than 600 videos and images that contained child pornography and that he used Skype to download the videos and images. Morrison further acknowledged that at the time he possessed the images, he worked with youth at the California Film Institute in San Rafael, Calif., as the Director of Education, where he taught film education to his students.
A federal grand jury indicted Morrison on June 5, 2018, charging him with receipt of child pornography, in violation of 18 U.S.C. § 2252(a)(2) and (b)(1), and possession of child pornography, in violation of 18 U.S.C. § 2252(a)(4)(B). Morrison pleaded guilty to the possession count and the receipt count was dismissed at sentencing.
This investigation began with cyber-tips made to the National Center for Missing and Exploited Children. The cyber-tips indicated that an individual was using Skype to upload child pornography. Law enforcement eventually identified the defendant as the user of the specific Skype account being used to upload the images.
In addition to the prison term, Judge Breyer sentenced the defendant to a five-year period of supervised release, ordered him to pay $2,500 in restitution, and required that he register as a sex offender as required by state law. Judge Breyer ordered the defendant to surrender and begin serving the prison term no later than January 13, 2020.
Assistant U.S. Attorney Ross Weingarten is prosecuting the case with the assistance of Marina Ponomarchuk. The prosecution is the result of an investigation by the San Francisco Police Department, Internet Crimes Against Children Unit.
Former Bank Employee Pleads Guilty to Fraud SchemeRead the Press Release
SAN FRANCISCO, Calif. – Raminder Singh Rekhi pleaded guilty to theft, embezzlement, or misapplication of bank funds in connection with a scheme to illegally make loans, announced Adam A. Reeves, Attorney for the United States (acting under authority conferred by 28 U.S.C. § 515), and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The plea was accepted on November 13, 2019, by Charles R. Breyer, Senior U.S. District Judge.
Rekhi, 41, of San Francisco, was a long-time employee of Wells Fargo Bank, N.A. (“Wells Fargo”). Pursuant to his plea agreement, Rekhi admitted that in 2017, he used his position at Wells Fargo to convince a Wells Fargo customer to purchase what he told her was a Wells Fargo certificate of deposit (“CD”). Rekhi acknowledged that there was no CD, and that instead, Rekhi diverted the customer’s money into other accounts under his control. Once the money was under his control, Rekhi entered into a series of transactions in which he used the funds as capital to make loans to three separate individuals. In so doing, Rekhi misappropriated the deposits entrusted to the care of Wells Fargo and, because the subsequent loans were not insured by the Federal Deposit Insurance Corporation, placed the deposits at risk.
On April 18, 2019, a federal grand jury indicted Rekhi, charging him with one count of theft, embezzlement, or misapplication of bank funds, in violation of 18 U.S.C. § 656. He pleaded guilty to the charge.
Judge Breyer ordered Rekhi released pending sentencing; the sentencing hearing is scheduled for March 18, 2020. Rekhi faces a maximum statutory sentence of 30 years in prison, 5 years supervised release, and a fine of $1,000,000, plus restitution and special assessments. However, any sentence following conviction will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Nicholas Walsh is prosecuting the case with the assistance of Rosario Calderon and Margoth Turcios. The prosecution is the result of an investigation by the Federal Bureau of Investigation and Wells Fargo’s internal investigation team.
Monterey County Doctor and Four Others Charged in Alleged Scheme to Distribute Opioids Outside Scope of Legitimate Medical PracticeRead the Press Release
SAN JOSE– A federal grand jury has indicted Monterey County doctor Deane Leo Crow, as well as Diane Lynn Crow, Erik Samuel Gonzales, Brittney Lynn Cardona, and Joe Anthony Bernal, for their respective roles in conspiracies to acquire and distribute oxycodone and hydrocodone, Schedule II opioids, announced United States Attorney David L. Anderson, Federal Bureau of Investigation Special Agent in Charge John F. Bennett, and California Department of Health Care Services Chief of Investigations Laura Wilbur.
According to the indictment returned October 31, 2019, and unsealed today, Deane Crow was a physician licensed to practice medicine in the State of California. The indictment alleges that since approximately August of 2014, Deane Crow acted outside the usual course of professional practice and without a legitimate medical purpose when he caused pharmacists to dispense more than 452,000 pills containing controlled substances, including the Schedule II opiates oxycodone and hydrocodone.
“Doctors occupy a unique position of trust in our health care system. We cannot allow doctors to betray that trust,” said U.S. Attorney Anderson. “As alleged in the indictment, Dr. Crow fed a conspiracy with empty prescriptions that put hundreds of thousands of pills onto the streets.”
“According to this indictment, Dr. Deane Crow and his co-conspirators illegally traded opioid prescriptions for cash,” said FBI Special Agent in Charge John F. Bennett. “Thanks to the joint investigation between the FBI and the California Department of Health Care Services Medi-Cal Fraud Investigations Branch, we have successfully dismantled an illegal network pushing opioids onto the streets of Northern California and endangering our local communities.”
The indictment describes how Deane Crow allegedly provided blank prescriptions to Gonzales and Bernal, sometimes in exchange for money, who then recruited individuals to visit pharmacies and fill prescriptions. Gonzales filled in the type of drugs to be obtained as well as other necessary information such as date of birth of the person to whom the prescription was issued, dosage instructions, and diagnosis codes reflecting the patient’s purported condition. In order to convince pharmacists to fill the prescriptions, Deane Crow falsely represented to pharmacy employees that the individuals in whose names the prescriptions were written were his patients and that the prescriptions had been issued for a legitimate medical purpose. Further, to ensure the prescriptions were filled, Diane Lynn Crow allegedly assisted in the communications between Bernal, Deane Crow, and the pharmacy employees.
In sum, each defendant was charged with one count of conspiracy to distribute a controlled substance, in violation of 21 U.S.C. § 841(a)(1) and 846, and one count of conspiracy to acquire and obtain possession of a controlled substance by misrepresentation or fraud, in violation of 21 U.S.C. § 843(a)(3) and 846.
An indictment merely alleges that crimes have been committed, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted of the charge of conspiracy to distribute a controlled substance, each defendant faces a maximum sentence of 20 years imprisonment and a $1,000,000 fine. In addition, if convicted of the charge of Conspiracy to Obtain Possession of a Controlled Substance by Misrepresentation or Fraud, each defendant faces a maximum sentence of four years imprisonment and a $250,000 fine. At sentencing, the Court may also order the payment of a fine, restitution, or a period of supervised release to follow any term of imprisonment. 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 defendants made an initial appearance this afternoon before U.S. Magistrate Judge Susan van Keulen. Magistrate Judge van Keulen scheduled an appearance for each defendant for November 15, 2019, except Bernal whose next appearance is scheduled for November 19, 2019.
Assistant U.S. Attorney Nikhil Bhagat is prosecuting the case with the assistance of Linda Love. This prosecution is the result of an ongoing investigation by the FBI and the California Department of Health Care Services Medi-Cal Fraud Investigations Branch (DHCS-IB), with the assistance of the DEA and the Monterey County District Attorney’s Office Bureau of Investigation. DHCS-IB fraud investigators are sworn law enforcement officers whose authority extends throughout the State of California. DHCS-IB fraud investigators conduct criminal, administrative and civil investigations into various types of suspected Medi-Cal program fraud.
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.
This case was 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.
Attorney General Announces Launch of Project Guardian — A Nationwide Strategic Plan to Reduce Gun ViolenceRead the Press Release
Today, Attorney General William P. Barr announced the launch of Project Guardian, a new initiative designed to reduce gun violence and enforce federal firearms laws across the country. Specifically, Project Guardian focuses on investigating, prosecuting, and preventing gun crimes.
Reducing gun violence and enforcing federal firearms laws have always been among the Department’s highest priorities. In order to develop a new and robust effort to promote and ensure public safety, the Department reviewed and adapted some of the successes of past strategies to curb gun violence. Project Guardian draws on the Department’s earlier achievements, such as the “Triggerlock” program, and it serves as a complementary effort to the success of Project Safe Neighborhoods (PSN). In addition, the initiative emphasizes the importance of using all modern technologies available to law enforcement to promote gun crime intelligence.
“Gun crime remains a pervasive problem in too many communities across America. Today, the Department of Justice is redoubling its commitment to tackling this issue through the launch of Project Guardian,” said Attorney General William P. Barr. “Building on the success of past programs like Triggerlock, Project Guardian will strengthen our efforts to reduce gun violence by allowing the federal government and our state and local partners to better target offenders who use guns in crimes and those who try to buy guns illegally.”
“Neighborhoods throughout the United States are becoming increasingly aware of the deep scars being left upon victims of gun violence. The Northern District of California is no exception. Project Guardian, announced today by Attorney General Barr, provides critical tools that this office will use to keep guns out of the hands of those who are not entitled to them and to coordinate with our federal, state, local, and tribal partners prosecutions of those who violate our gun laws.”
“ATF has a long history of strong partnerships in the law enforcement community,” said Acting Director Regina Lombardo. “Make no mistake, the women and men of ATF remain steadfast to our core mission of getting crime guns off of our streets. ATF and U.S. Attorneys nationwide will leverage these partnerships even further through enhanced community outreach initiatives and coordination with local, state, and tribal law enforcement and prosecutors to cut the pipeline of crime guns from those violent individuals who seek to terrorize our communities. Project Guardian will enhance ATF’s Crime Gun Intelligence, to include identifying, investigating and prosecuting those involved in the straw purchases of firearms, lying on federal firearms transaction forms, and those subject to the mental health prohibition of possessing firearms.”
Project Guardian’s implementation is based on five principles:
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Coordinated Prosecution. Federal prosecutors and law enforcement will coordinate with state, local, and tribal law enforcement and prosecutors to consider potential federal prosecution for new cases involving a defendant who: a) was arrested in possession of a firearm; b) is believed to have used a firearm in committing a crime of violence or drug trafficking crime prosecutable in federal court; or c) is suspected of actively committing violent crime(s) in the community on behalf of a criminal organization.
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Enforcing the Background Check System. United States Attorneys, in consultation with the Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) in their district, will create new, or review existing, guidelines for intake and prosecution of federal cases involving false statements (including lie-and-try, lie-and-buy, and straw purchasers) made during the acquisition or attempted acquisition of firearms from Federal Firearms Licensees.
Particular emphasis is placed on individuals convicted of violent felonies or misdemeanor crimes of domestic violence, individuals subject to protective orders, and individuals who are fugitives where the underlying offense is a felony or misdemeanor crime of domestic violence; individuals suspected of involvement in criminal organizations or of providing firearms to criminal organizations; and individuals involved in repeat denials. -
Improved Information Sharing. On a regular basis, and as often as practicable given current technical limitations, ATF will provide to state law enforcement fusion centers a report listing individuals for whom the National Instant Criminal Background Check System (NICS) has issued denials, including the basis for the denial, so that state and local law enforcement can take appropriate steps under their laws.
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Coordinated Response to Mental Health Denials. Each United States Attorney will ensure that whenever there is federal case information regarding individuals who are prohibited from possessing a firearm under the mental health prohibition, such information continues to be entered timely and accurately into the United States Attorneys’ Offices’ case-management system for prompt submission to NICS. ATF should engage in additional outreach to state and local law enforcement on how to use this denial information to better assure public safety.
Additionally, United States Attorneys will consult with relevant district stakeholders to assess feasibility of adopting disruption of early engagement programs to address mental-health-prohibited individuals who attempt to acquire a firearm. United States Attorneys should consider, when appropriate, recommending court-ordered mental health treatment for any sentences issued to individuals prohibited based on mental health. -
Crime Gun Intelligence Coordination. Federal, state, local, and tribal prosecutors and law enforcement will work together to ensure effective use of the ATF’s Crime Gun Intelligence Centers (CGICs), and all related resources, to maximize the use of modern intelligence tools and technology. These tools can greatly enhance the speed and effectiveness in identifying trigger-pullers and finding their guns, but the success depends in large part on state, local, and tribal law enforcement partners sharing ballistic evidence and firearm recovery data with the ATF.
Federal law enforcement represents only about 15% of all law enforcement resources nationwide. Therefore, partnerships with state, local, and tribal law enforcement and the communities they serve are critical to addressing gun crime. The Department recognizes that sharing information with our state, local, and tribal law enforcement partners at every level will enhance public safety, and provide a greater depth of resources available to address gun crime on a national level.
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Two Associates of Nuestra Familia Prison Gang Plead Guilty to Federal RICO ConspiracyRead the Press Release
SAN JOSE- Michael Rice, a/k/a Redwood, and Alberto Moreno, a/k/a Doughboy, pleaded guilty today to racketeering conspiracy charge for their respective roles as associates of the Nuestra Familia prison gang, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The guilty pleas were accepted by the Honorable Beth L. Freeman, United States District Judge.
“Defendants Rice and Moreno conspired and racketeered while in county jail to punish gang members who did not follow gang rules,” said U.S. Attorney Anderson. “Their conduct underscores the risks of depending on county jails to deter and punish serious criminal offenders. I hope and trust that a federal sentence will send a stronger message to these and other would-be offenders.”
“Michael Rice and Alberto Moreno have admitted today to participating in brutally violent attacks and other crimes to further the control and criminal activities of the Nuestra Familia prison gang,” said FBI Special Agent in Charge Bennett. “The FBI would like to thank our Monterey County law enforcement partners for working with us to identify, stop, and prosecute this organized violence.”
According to the plea agreements, between December 2, 2012, and April 14, 2014, both defendants were members of the Nuestra Familia/Salinas Norteños 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, Rice, 35, and Moreno, 26, admit to participating in the distribution of narcotics to other inmates at Monterey County Jail. Also, the plea agreements 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. Rice admitted that in February of 2013, he was the prison gang’s “Overall Authority” in one of Monterey County Jail’s housing units and he consented to the removal of a gang prisoner who committed a serious violation of gang rules. The victim was stabbed in the head by a hitter and immediately thereafter was punched and kicked by several bombers. Rice further admitted that he approved the removal of another victim who was assaulted on April 29, 2013. On that day, the victim was stabbed in the head by the hitter and then punched and kicked by several bombers. Moreno admitted that he participated as a bomber in the April 29, 2013, attack.
On September 27, 2018, a federal grand jury indicted Rice, Moreno and several other defendants with racketeering conspiracy, in violation of 18 U.S.C. § 1962(d). Both Rice and Moreno also were 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). Both 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 defendant Moreno’s sentencing for January 7, 2020, and defendant Rice’s sentencing for March 3, 2020. The defendants face a maximum statutory sentence of life in prison, five years of supervised release, and a fine of $250,000. Pursuant to their plea agreements, defendant Rice has agreed to a sentence of 13 years and defendant Moreno has agreed to a sentence of seven years, both subject to final approval by the Court at their respective sentencings. 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 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.
Richmond Man Sentenced to Seven Years in Custody for Possessing Loaded GunRead the Press Release
OAKLAND – Saul Espinoza was sentenced today to seven years 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 Jeffrey S. White, U.S. District Judge.
Espinoza, 32, of Richmond, pleaded guilty to the charge on August 20, 2019. According to his plea agreement, Espinoza admitted he was driving a Toyota 4Runner in Richmond, Calif., on October 4, 2018, when he turned at a high rate of speed and flipped his vehicle on its driver’s side. Espinoza’s car came to a rest after colliding with an unoccupied van parked along the curb. He remained in the car while officers approached and found him in possession of a Springfield XD-40 0.40 caliber semi-automatic pistol, with a fully loaded 16 round magazine. Espinoza admitted that at the time of these events he was a convicted felon and therefore was not eligible to possess a firearm.
A federal grand jury indicted Espinoza on February 28, 2019, charging him with being a felon in possession of a firearm and ammunition, in violation of 18 U.S.C. § 922(g)(1).
In addition to the prison term, Judge White sentenced the defendant to a three-year term of supervised release. The defendant will begin serving the sentence immediately.
Assistant U.S. Attorney Jonathan U. Lee is prosecuting the case with the assistance of Jessica Rodriguez and Kathleen Turner. The prosecution is the result of an investigation by the Federal Bureau of Investigation and Richmond Police Department.
Two Former Twitter Employees and a Saudi National Charged as Acting as Illegal Agents of Saudi ArabiaRead the Press Release
Ali Alzabarah, Ahmad Abouammo, and Ahmed Almutairi, aka Ahmed Aljbreen, were charged for their respective roles in accessing private information in the accounts of certain Twitter users and providing that information to officials of the Kingdom of Saudi Arabia. Abouammo was arrested in Seattle, Washington, on Nov. 5, 2019. All three defendants are charged with acting as illegal agents of a foreign government; and Abouammo also is charged with destroying, altering, or falsifying records in a federal investigation.
“Acting in the United States under the direction and control of Saudi officials, the defendants are alleged to have obtained private, identifying information about users of Twitter who were critical of the Saudi government,” said Assistant Attorney General for National Security John C. Demers. “Two of the defendants – Alzabarah and Abouammo – are former Twitter employees who violated their terms of employment to access this information in exchange for money and other benefits. Aside from being criminal, their conduct was contrary to the free speech principles on which this country was founded.”
“These charges make clear that the FBI will diligently pursue those who show a blatant disregard for the laws and democratic principles that define us as a country," said Executive Assistant Director Jay Tabb of the FBI’s National Security Branch. “We will continue to use all of the tools at our disposal to carry out our mission. I would like to thank the men and women of the FBI's San Francisco and Seattle Field Offices as well as the Counterintelligence Division for their tireless commitment to bring these individuals to justice.”
“The FBI will not stand by and allow foreign governments to illegally exploit private user information from U.S. companies. These individuals are charged with targeting and obtaining private data from dissidents and known critics, under the direction and control of the government of Saudi Arabia,” said FBI Special Agent in Charge John F. Bennett. “Insider threats pose a critical threat to American businesses and our national security.”
Alzabarah, 35, of Saudi Arabia, and Abouammo, 41, of Seattle, Washington, were Twitter employees. According to the complaint, between November of 2014 and May of 2015, Almutairi, 30, of Saudi Arabia, and foreign officials of the Kingdom of Saudi Arabia convinced Abouammo and Alzabarah to use their employee credentials to gain access without authorization to certain nonpublic information about the individuals behind certain Twitter accounts. Specifically, representatives of the Kingdom of Saudi Arabia and the Saudi Royal Family sought the private information of Twitter users who had been critical of the regime. Such private user information included their email addresses, phone numbers, IP addresses, and dates of birth. This information could have been used to identify and locate the Twitter users who published these posts. The complaint alleges that Abouammo was compensated for his illicit conduct, including through the provision of a luxury watch and cash. Almutairi is alleged to have arranged meetings, acted as a go-between, and facilitated communications between the Saudi government and the other defendants.
The complaint also contains allegations regarding the reaction of Alzabarah upon being confronted by Twitter about his violations of Twitter policy. According to the complaint, when Alzabarah was confronted by Twitter’s management about accessing users’ information, he sought assistance from Almutairi and others to flee the United States. Alzabarah left the country the next day and submitted his resignation from Twitter by email while en route. Shortly after his return to Saudi Arabia, Alzabarah obtained employment through which he continued to work on behalf the Kingdom. With respect to Abouammo, the complaint alleges FBI agents confronted him in October 2018 about his activities on behalf of officials of the Kingdom of Saudi Arabia. In response, Abouammo allegedly lied to the agents and provided them with a falsified invoice in an effort to obstruct the investigation.
Abouammo was arrested in Seattle, Washington, on Nov. 5, 2019, and made his initial federal court appearance in Seattle at 2:00 p.m.on Nov. 6, 2019. Alzabarah and Almutairi are believed to be in Saudi Arabia. Federal warrants have been issued for their arrest.
A complaint merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, all three defendants face maximum statutory sentence of 10 years in prison and a $250,000 fine for acting as an agent of a foreign government without notification to the Attorney General, in violation of 18 U.S.C. § 951. In addition, Abouammo faces an additional 20 years in prison and a $250,000 fine for destroying, altering, or falsifying records, in violation of 18 U.S.C. § 1519. Further, the court may order restitution, if appropriate, and additional periods of supervised release. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The case is being prosecuted by the Special Prosecutions and National Security Unit of the United States Attorney’s Office for the Northern District of California and the Counterintelligence and Export Control Section of the National Security Division. The prosecution is the result of an investigation by the Federal Bureau of Investigation.
Oakland Resident Wing Wo Ma Convicted of Federal Murder, Drug Distribution, Conspiracy, and Bribery ChargesRead the Press Release
SAN FRANCISCO - A federal jury in San Francisco convicted Wing Wo Ma, a/k/a Mark Ma, a/k/a Fat Mark, of murder, drug distribution conspiracy, weapons, and bribery charges, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The verdict follows a three-week trial before the Honorable Charles R. Breyer, United States District Judge.
“The jury’s verdict makes clear that Wing Wo Ma will answer for the brutal killings of Jim Tat Kong and Cindy Bao Feng Chen,” said U.S. Attorney Anderson. “The verdict also ensures that Ma’s personal crime wave, including murder, drug distribution, bribery, and conspiracy, has come to an end.”
“This trial brings a measure of justice for the families of Jim Tat Kong and Cindy Bao Feng Chen. Wing Wo Ma committed these homicides in cold blood and showed a blatant disregard for the rule of law,” said Special Agent in Charge Bennett. “The arrest and conviction of Wing Wo Ma shows the FBI’s commitment to get dangerous criminals off the street and protect Northern Californians from violent threats.”
According to the evidence submitted at trial, Ma, 53, of Oakland, shot and killed Jim Tat Kong and Cindy Bao Feng Chen on October 17, 2013, in Ft. Bragg, Calif., while the couple was seated in their minivan. Beginning in January of 2013, Ma had borrowed money from Kong for several business ventures including a marijuana grow and a real estate scheme in Mendocino County. Fearing retribution from Kong upon finding himself unable to repay the money, Ma met with Kong and Chen on Chen’s birthday. While seated in the car, Ma shot each of the victims with a single gunshot to the head and then left their bodies in the minivan parked in a secluded, wooded area in Mendocino County.
Further, Ma was convicted of bribery. The evidence demonstrated that Ma bribed Harry Hu, an inspector employed by the Alameda County District Attorney and a former Lieutenant in the Oakland Police Department. Ma bribed the inspector with airfare for multiple trips to Las Vegas, free accommodation at high-end suites and hotel rooms at Las Vegas casinos, meals and entertainment in Las Vegas and San Francisco, female hostesses at private room bars in Las Vegas and San Francisco, music concert tickets, use of a new Mercedes Benz, and labor for the remodel of the DA investigator’s personal residence. Ma bribed Hu in an effort to protect himself from prosecution and investigation by Hu and other law enforcement agencies. Ma also collected money from criminal associates for the purpose of bribing Hu and represented to criminal associates that Hu was an investor in Ma’s fraudulent investment projects. As part of the bribery scheme, Ma used Hu’s name and reputation to attract investors to Ma’s fraudulent schemes.
On April 6, 2017, a federal grand jury indicted Ma, charging him with one count each of conspiracy to cultivate, distribute, and possess with intent to distribute marijuana, in violation of 21 U.S.C. §§ 846 and 841(a)(1) and (b)(1)(B); discharging a firearm during and in relation to a drug trafficking crime, in violation of 18 U.S.C. § 924(c)(1)(A); and use of a firearm causing murder, in violation of 18 U.S.C. § 924(j). On October 11, 2018, the grand jury handed down a superseding indictment adding one count of conspiracy to commit honest services fraud and bribery, in violation of 18 U.S.C. §§ 371, 666, 1343, and 1346. In finding Hu guilty of all charges, the jury found that Ma’s conspiracy included the intent to possess 100 or more marijuana plants, that he discharged his gun in connection with his drug trafficking crimes, and that he murdered Kong and Chen with malice aforethought and premeditation.
Judge Breyer scheduled Ma’s sentencing for February 12, 2020. Ma faces the following maximum statutory sentences:
- Conspiracy to cultivate and distribute and to possess with intent to distribute marijuana: maximum term of forty years imprisonment, maximum fine of $5,000,000, at least four years, but up to lifetime, supervised release. (Mandatory minimum prison term of five years.)
- Use of Firearm Causing Murder: maximum lifetime imprisonment, maximum fine of $250,000, maximum three years of supervised release.
- Use of a firearm during and in relation to a drug trafficking crime: maximum life imprisonment, maximum fine of $250,000, maximum five years of supervised release. (Minimum consecutive penalties include the following: 5 years consecutive mandatory minimum, 7 years if the firearm is brandished, and 10 years if the firearm is discharged.)
- Bribery: maximum penalty of ten years imprisonment, maximum $250,000 fine, maximum three years of supervised release.
However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant United States Attorneys Christiaan Highsmith and William Frentzen are prosecuting the case with the assistance of Jessica Meegan, Kimberly Richardson, Morgan Byrne, and Lance Libatique. The prosecution is the result of an investigation by the Federal Bureau of Investigation, Mendocino County Sheriff’s Office, California Department of Justice, and Oakland Police Department.