Northern District of California
Press releases recorded for this federal judicial district.
Two Former Twitter Employees and A Saudi National Charged in Plot to Provide Saudi Government with Information About UsersRead the Press Release
SAN FRANCISCO –Ali Alzabarah, Ahmad Abouammo, and Ahmed Almutairi, a/k/a Ahmed Aljbreen, were charged for their respective roles in fraudulently accessing private information in the accounts of certain Twitter users and providing that information to officials of the Kingdom of Saudi Arabia, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. 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.
“The criminal complaint unsealed today alleges that Saudi agents mined Twitter's internal systems for personal information about known Saudi critics and thousands of other Twitter users,” said U.S. Attorney Anderson. “U.S. law protects U.S. companies from such an unlawful foreign intrusion. We will not allow U.S. companies or U.S. technology to become tools of foreign repression in violation of U.S. law.”
“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, including their email addresses, IP addresses, and dates of birth, of persons some of whom published posts deemed by the Saudi Royal Family to be critical of the regime. This information could have been used to identify and locate the Twitter users who published these posts. The complaint alleges that Alzabarah and Abouammo were compensated for their illicit conduct, including the provision of a luxury watch, cash, and other benefits in exchange for their agreement to violate Twitter policies by accessing and providing the information. 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. 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 November 5, 2019, and is making his initial federal court appearance in Seattle at 2:00 p.m., this afternoon. 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 obstruction of justice, 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.
East Bay Firearms Trafficker Sentenced to Three Years in Prison for Being Alien in Possession of A Firearm and AmmunitionRead the Press Release
OAKLAND – Victor Covian-Perez was sentenced to 36 months in prison today for being an alien 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 Yvonne Gonzalez Rogers, United States District Judge.
Covian-Perez, 23, of Oakland, pleaded guilty to the firearm charge on July 18, 2019. According to his plea agreement, Covian-Perez admitted that on November 29, 2018, he possessed three firearms and numerous rounds of ammunition, including a semi-automatic Springfield Armory XD .45 caliber handgun and two Charter Arms .38 caliber revolvers. At the time, Covian-Perez was unlawfully and illegally in the United States and not eligible to possess a firearm or ammunition. Covian-Perez further admitted that the government could prove that he possessed and sold approximately fifteen additional firearms between June and November 2018 that he sold to persons whose possession of a firearm would be illegal. At sentencing, Judge Gonzalez Rogers assessed an enhancement against Covian-Perez for trafficking firearms and another enhancement for possessing between eight and twenty-four firearms.
On July 16, 2019, Covian-Perez was charged by superseding indictment with being an alien in possession of a firearm, in violation of 18 U.S.C. § 922(g)(5). Covian-Perez pleaded guilty to the charge.
In addition to the prison term, Judge Gonzalez Rogers ordered Covian-Perez to serve a three-year term of supervised release to begin at the conclusion of his prison term.
Assistant United States Attorney Thomas R. Green is prosecuting the case with the assistance of Jessica Rodriguez. The prosecution is the result of an investigation by the ATF.
Florida Man and Canadian National Plead Guilty to Hacking/Extortion ConspiracyRead the Press Release
SAN JOSE – Brandon Charles Glover and Vasile Mereacre pleaded guilty in federal court today to their respective roles in an extortion conspiracy involving a plot to extract bounties from victim corporations in exchange for the defendants’ promise to delete stolen confidential data, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The defendants admitted making extortion demands of several victim corporations including Uber and LinkedIn. The plea was accepted by the Honorable Lucy H. Koh, United States District Judge.
In pleading guilty, Glover, 26, of Winter Springs, FL, and Mereacre, 23, of Toronto, Canada, admitted that from October 2016 through January 2017, they engaged in a conspiracy to use stolen credentials to gain access to confidential corporate databases being stored on Amazon Web Services, a cloud-based storage platform After downloading confidential information from Amazon Web Services accounts belonging to the victim-corporations, Glover and Mereacre notified the victim corporations that they had found vulnerabilities in the corporations’ employees’ use of the systems. The defendants then demanded money in exchange for deleting the stolen data.
“Companies like Uber are the caretakers, not the owners, of customers’ personal information,” said U.S. Attorney Anderson. “What gets stolen in a computer extortion belongs to your neighbors, not to yourselves. Don’t be so concerned with your image or reputation. Be concerned with the real losses others have suffered. Report the intrusion promptly. Cooperate with law enforcement.”
“We’re dealing with the most sophisticated cyber actors in the world,” said FBI Special Agent in Charge Bennett. “In order to take on those people on the front lines of the cyber security battle, we rely heavily on our valued relationships and open dialogue with private sector companies in cyber industries. Their willingness to speedily report intrusions to our investigators allows us to find and arrest those who commit data breaches.
To induce payments, the defendants used an alias and an encrypted email account to contact the victim corporations and report that their data was vulnerable. The defendants sent a sample of the stolen data to the corporations as proof their systems had been breached and then demanded payment in exchange for deletion of the data.
The plea agreements describe in some detail the defendants’ communications with two companies: Uber and Lynda.com. With respect to Uber, defendants admitted they provided credentials regarding Uber’s Amazon Web Services account to a “technically proficient hacker.” The hacker identified archive files that contained 57 million Uber user records consisting of customer data and driver data. Defendants admitted they illegally accessed and downloaded the records from Amazon Web Services and, on November 14, 2016, contacted Uber claiming to have found a major vulnerability in Uber’s computer security systems. Defendants provided a portion of the database to prove the information had been exfiltrated and then demanded payment in exchange for deleting the stolen data. The defendants’ plea agreements state that on November 16, 2016, Uber agreed to pay $100,000 in bitcoin to the defendants through a third party but that, as part of the agreement, Uber demanded that the defendants also sign a confidentiality agreement. According to the plea agreements, Uber demanded that the payment for the data breach remain confidential and that the defendants destroy the data that they stole. After three weeks of negotiation, Uber made two $50,000 payments, one on December 8 and the other on December 14, 2016. Then, in January 2017, Uber informed the defendants that it had discovered Glover’s true identity. On January 3, 2017, a representative from Uber met with Glover at his Florida home, where Glover admitted his role in the data breach exfiltration and signed a confidentiality agreement in his true name. On January 5, 2017, a representative from Uber met with Mereacre at a hotel restaurant in Toronto, Canada, where Mereacre admitted his role in the data breach exfiltration and signed a confidentiality agreement in his true name.
The defendants employed a similar strategy in an aborted attempt to extort funds from Lynda.com’s parent company, LinkedIn. Glover and Mereacre admit that in December of 2016, they possessed information regarding over 90,000 confidential Lynda.com user accounts that the defendants had illegally accessed and downloaded from Lynda.com’s Amazon Web Services account. On December 11, 2016, defendants emailed a portion of the user account information to the security team at LinkedIn. Defendants also demanded compensation in exchange for deleting the stolen data. Rather than pay the bounty, LinkedIn sought to identify the source of the extortionist email. Specifically, LinkedIn tried to lure the writer of the email to enroll with a third party to assist in the negotiation of terms for payment to the defendants. In this way, LinkedIn hoped to identify the extortionist and notify law enforcement of the plot. Defendants told LinkedIn’s representatives, “[p]lease keep in mind, we expect a big payment as this was hard work for us, we already helped a big corp which paid close to 7 digits, all went well.” The defendants stopped communicating with LinkedIn in January 2017, and the company did not pay defendants for the data or for confidentiality.
Glover and Mereacre both were charged by a Superseding Information on October 30, 2019. Each defendant was charged with one count of conspiracy to commit extortion involving computers, in violation of 18 U.S.C. §§ 1030(a)(7)(B) and (c)(3)(A). Today, Glover and Mereacre pleaded guilty to their respective roles in the conspiracy.
The defendants have been released on bond pending sentencing. Judge Koh has scheduled a status conference regarding sentencing for March 18, 2020. The maximum statutory penalty for conspiracy to commit extortion involving computers is five years imprisonment and a fine of $250,000. The court may also order an additional term of supervised release and restitution; however, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorneys Susan Knight and Amie Rooney are prosecuting the case with the assistance of Elise Etter and Lakisha Holliman. The prosecution is being handled by the Office of the U.S. Attorney, Northern District of California’s new Corporate Fraud Strike Force and is the result of an investigation by the FBI.
Concord Man Charged with Possession of Child PornographyRead the Press Release
OAKLAND –Ruben Eric Calle has been charged with possession of child pornography announced United States Attorney David L. Anderson and Homeland Security Investigations Special Agent in Charge Tatum King.
Calle, 54, of Concord, was charged in a criminal complaint filed October 29, 2019, and unsealed today. According to the affidavit of a task force officer and member of the Silicon Valley Internet Crimes Against Children Task Force filed in connection with the criminal complaint, Calle possessed more than 600 sexually explicit images of child pornography. Law enforcement agents found the child pornography when they executed a search warrant at Calle’s residence on July 11, 2018. The images found in Calle’s possession are alleged to include depictions of an adult engaging in sexually explicit conduct with prepubescent children, including an infant or toddler. Allegedly, the images also include depictions of sadistic and/or masochistic conduct.
The investigation into Calle’s conduct began in 2018 when the National Center for Missing and Exploited Children received two CyberTips. Based on the information provided, investigators traced the uploading of child pornography on a peer-to-peer service to Calle’s residence.
Calle was arrested today in Concord and made his initial appearance in federal court in Oakland before U.S. Magistrate Judge Donna M. Ryu. Calle’s next appearance is set for November 5 at 10:30 a.m. for a status and detention hearing before U.S. Magistrate Judge Kandis A. Westmore.
A complaint merely alleges that crimes have been committed and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces a maximum sentence of 10 years (20 years if the images depict prepubescent children), and a fine of $250,000, plus restitution for each violation of 18 U.S.C. § 2252. 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 Jonathan U. Lee is prosecuting the case with the assistance of Jessica Gonzalez Rodriguez and Kathleen Turner. The prosecution is the result of an investigation by the Silicon Valley Internet Crimes Against Children Task Force, Concord Police Department, and United States Department of Homeland Security.
Two Foreign Shipping Companies and First Assistant Engineer Charged with Offenses Related to Oily Waste DumpsRead the Press Release
OAKLAND - A federal grand jury in Oakland indicted FGL Moon Marshall Limited (“FGL Moon”), Unix Line Pte Ltd. (“Unix”), and Gilbert Dela Cruz today, charging the defendants with failing to maintain an Oil Record Book for bilge water discharges into the sea and with obstruction of justice, announced United States Attorney David L. Anderson and U.S. Coast Guard Investigative Service Special Agent in Charge Kelly S. Hoyle.
The indictment alleges that the Zao Galaxy, a 16,408 gross-ton, ocean-going motor tanker, was owned by FGL Moon Marshall Limited, a Marshall Islands company, and operated by Unix Line Pte Ltd., a Singapore company. An affidavit filed by an agent of the Coast Guard Investigative Service in connection with an earlier-filed criminal complaint further alleges that, on January 21, 2019, the Zao Galaxy set sail from the Philippines and, on February 10, 2019, the ship arrived at a port in Richmond, Calif., bearing a cargo of palm oil. According to the indictment, Dela Cruz, 37, a citizen of the Philippines, was the First Assistant Engineer on the Zao Galaxy’s vessel crew and acted as an employee and agent of both FGL Moon and Unix. Dela Cruz was responsible for making entries into the ship’s Oil Record Book and for the operation of the ship’s equipment used for treatment and discharge of oil-contaminated water.
The complaint affidavit further alleges that, when the ship reached Richmond, examiners from the Coast Guard boarded the ship to conduct an inspection and previously-scheduled examination. As a result of that examination, investigators discovered videos showing that approximately four illegal overboard discharges of oily waste had occurred from the Zao Galaxy’s engine room between the last week of January 2019 and February 11, 2019. According to the affidavit, the ship’s location data suggested that one of the illegal dumping events occurred when the Zao Galaxy was approximately three nautical miles west of the Golden Gate Bridge.
The complaint affidavit additionally alleges that Dela Cruz had ordered another crew member to perform the illegal overboard discharge at night to facilitate the emptying, cleaning, and repainting of the Zao Galaxy’s Primary Bilge Tank prior to the Coast Guard’s examination. Dela Cruz is also alleged to have ordered another crew member to use a flange/hose system to facilitate the dumping of the oily waste while avoiding the ship’s normal oily waste management system. The Zao Galaxy’s Oil Record Book contained no entries documenting these illegal discharges of oily waste. The indictment also alleges that Dela Cruz attempted to persuade a lower-level crewmember to withhold relevant information regarding the dumping from the Coast Guard.
Complaints and indictments merely allege that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendants face the following maximum penalties:
33 U.S.C. § 1908(a)
- 6 years imprisonment for Dela Cruz
- $250,000 for Dela Cruz; $500,000 for FGL and Unix
- 3 years of supervised release
- Potential forfeiture
- $100 special assessment
18 U.S.C. § 1519
- 20 years imprisonment for Dela Cruz
- $250,000 for Dela Cruz; $500,000 for FGL and Unix
- 3 years of supervised release
- Potential forfeiture
- $100 special assessment
18 U.S.C. § 1505
- 5 years imprisonment for Dela Cruz
- $250,000 for Dela Cruz; $500,000 for FGL and Unix
- 3 years of supervised release
- Potential forfeiture
- $100 special assessment
However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The defendants are scheduled to appear on October 29, 2019, at 10:30 a.m., for an initial federal court appearance and arraignment before U.S. Magistrate Judge Donna Ryu.
The prosecution is being handled by Assistant United States Attorney Katherine Lloyd-Lovett and Special Assistant United States Attorney Andrew Briggs, with the assistance of Jessica Rodriguez. The prosecution is the result of an investigation by the Coast Guard Investigative Service and the Investigations Division of Coast Guard Sector San Francisco.
Sacramento County Resident Indicted for Illegally Exporting Turtles to Hong KongRead the Press Release
SAN JOSE - A federal grand jury indicted Keri Zhang Wang with smuggling wildlife from the United States and false labeling of exports, announced United States Attorney David L. Anderson and United States Fish and Wildlife Service Office of Law Enforcement Special Agent in Charge Daniel Crum.
The indictment was filed October 21 and unsealed earlier today. According to the indictment, Zhang Wang, 21, of Elk Grove, Calif., smuggled at least eleven packages containing box turtles and map turtles from California to Hong Kong between September 13, 2016, and June 2019. Box turtles and map turtles are protected under the Convention on International Trade in Endangered Species of Wild Fauna and Flora, an international treaty to which the United States and Hong Kong are signatories. The treaty is enforced in the United States under the Endangered Species Act, 16 U.S.C. § 1531, et seq.
The indictment alleges that Zhang Wang did not have the required permits to export the turtles from the United States. Zhang Wang allegedly secured each turtle inside a sock so that its movement was restrained, hindering each turtle’s ability to make noise and concealing its presence in each package. She then allegedly placed each turtle in a shoebox with packing materials and placed the shoebox under bags of snacks and chips for shipping. The indictment further alleges that Zhang Wang labeled each package but did not label the packages as containing turtles, nor did she obtain a permit to export the turtles or declare them to a U.S. official upon shipping.
In sum, Zhang Wang was charged with four counts of smuggling goods from the United States, in violation of 18 U.S.C. § 554, and four counts of Lacey Act false labeling, in violation of 16 U.S.C. §§ 3372(d)(2) and 3373(d)(3)(A)(i).
Zhang Wang is scheduled to make her initial appearance in federal court in the Northern District of California on October 29, 2019, in San Jose.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Zhang Wang faces a maximum sentence of ten years’ imprisonment and a fine of $250,000 for the 18 U.S.C. § 554 violation and a maximum sentence of five years’ imprisonment and a fine of $250,000 for the 16 U.S.C. §§ 3372(d) and 3373(d)(3)(A)(i) violation. In addition, the court may order the defendant to serve an additional period of supervised release and restitution, if appropriate. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Maia Perez is prosecuting the case. The prosecution is the result of an investigation by the United States Fish and Wildlife Service Office of Law Enforcement.
Attorney General William Barr Recognizes Department Employees and Others for Their Service at 67Th Annual Attorney General AwardsRead the Press Release
WASHINGTON – Attorney General William P. Barr recognized 295 department employees for their distinguished public service today at the 67th Annual Attorney General’s Awards Ceremony. Sixty-two other individuals outside of the department were also honored for their work. This annual ceremony recognizes employees and other individuals who have demonstrated exceptional achievements, leadership, and service to the Department of Justice and the American people.
“Our greatest strength in our fight for justice is our people – the thousands of men and women who have dedicated their careers, often at great personal sacrifice, to working for justice in America,” said Attorney General William P. Barr. “As we reflect on the contributions of each of the 357 individuals we honor today, we should hold them up as examples of excellence that continue to inspire our own commitment, and also as reminders of the professionalism and the qualities exhibited throughout the Department.”
This year’s program honors individuals across the department and our federal, state, local, and tribal partners for their self-less efforts, protecting our national security and our civil rights, addressing rising violent crime in our communities, going after gangs and those trafficking in dangerous narcotics and human beings. The awards also honor the work of civil and environmental litigation, which enforces the rule of law and upholds our Constitution. They also recognize employees whose ideas and efforts save taxpayer dollars and help our government operate more effectively and efficiently, among other contributions to public safety and good governance.
U.S. Attorney Announces Statistics on Cases Charged in the Northern District of CaliforniaRead the Press Release
SAN FRANCISCO – U.S. Attorney David L. Anderson released statistics today from the U.S. Department of Justice reporting on the numbers of criminal defendants charged in the Northern District of California during the 2019 fiscal year ended September 30, 2019. Also presented were statistics identifying the numbers of defendants charged in fiscal year 2018.
According to the statistics, the Office of the United States Attorney filed cases against a total of 671 defendants in FY 2019, an increase of more than 24% from the 540 defendants charged the previous year. The increase in criminal case filings includes the highest ever number of defendants charged federally in the Northern District of California in two categories of cases: violent crime (up 35% from 163 defendants in FY 2018 to 220 defendants in FY 2019) and firearms violations (up 19% from 159 defendants in FY 2018 to 187 defendants in FY 2019). Cases filed against defendants in drug cases also increased during FY 2019: in 2018, the Northern District of California charged drug offenses against 145 defendants whereas in FY 2019, the office charged 230 defendants in drug cases, an increase of 53% in the number of defendants charged in drug cases. Immigration filings decreased by 5% from 39 defendants in FY 2018 to 37 in FY 2019. White collar filings increased 8% from 102 defendants in FY 2018 to 111 defendants in FY 2019.
“Our objective is to serve the community, vindicate federal interests, and uphold the rule of law," stated U.S. Attorney Anderson. "Although the most recent statistics reflect a massive acceleration of our practice, the case charging statistics are one but only one of the many ways we use to measure our achievement of that objective.”
“The acceleration of our case charging statistics is equally balanced between expanded outreach and practice improvement.”
“Amidst a background of gun violence and gun debate, our job is to vigorously enforce the gun laws that Congress has passed and the Courts have upheld,” Anderson said.
South Bay Doctor Sentenced to Two Years in Prison for Unlawfully Distributing Hydrocodone and Committing Health Care FraudRead the Press Release
SAN JOSE – South Bay doctor Venkat Aachi was sentenced today to 24 months in prison for health care fraud and for distributing hydrocodone outside the scope of his professional practice and without a legitimate medical need, announced United States Attorney David L. Anderson, Drug Enforcement Administration (DEA) Special Agent in Charge Chris Nielsen, Federal Bureau of Investigation Special Agent in Charge John F. Bennett, U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG) Special Agent in Charge Steven J. Ryan, and the California Department of Justice Bureau of Medi-Cal Fraud and Elder Abuse (BMFEA). The sentence was handed down by the Honorable Edward J. Davila, U.S. District Judge.
Aachi, 52, of Saratoga, pleaded guilty to the charges on March 25, 2019. According to the plea agreement, Aachi was a licensed physician who operated a pain clinic in San Jose and maintained a DEA registration number authorizing him to prescribe controlled substances. Aachi admitted that from September 18, 2017, through July 2, 2018, he wrote hydrocodone-acetaminophen prescriptions that were outside the scope of his professional practice and not for a legitimate medical purpose.
“Dr. Venkat Aachi went from doctor to drug dealer when he prescribed highly addictive painkillers without a physical examination or legitimate medical need,” stated DEA Special Agent in Charge Chris Nielsen. “Regardless of title or degree, no one is above the law. DEA will hold medical practitioners accountable if they operate outside the scope of their professional practice, putting patients and lives others at risk.”
“Physicians who unlawfully prescribe opioids are directly contributing to the opioid crisis,” said FBI Special Agent in Charge John F. Bennett. “Venkat Aachi violated his oath and the trust of our community by illicitly pushing controlled substances to persons without need. The FBI, along with our local, state and federal partners, will continue to investigate and pursue medical professionals who violate the public's trust and defraud our healthcare system.”
“Aachi abused his medical license to prescribe controlled substances and, as a result, will be serving time behind bars,” said Steven J. Ryan, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “This sentence is a warning to criminals who knowingly commit fraud and perpetuate the nation’s opioid epidemic.”
“The message we are sending today is clear: if you prescribe dangerous drugs in an irresponsible manner, we are coming after you,” said Attorney General Becerra. “Medical professionals should be safeguarding the welfare of their patients, not risking their lives. My office will continue to work with our law enforcement partners to fight against all forms of healthcare fraud in California.”
The plea agreement describes transactions in which Aachi improperly distributed hydrocodone. For example, in November of 2017, he wrote a prescription enabling a patient to receive 90 hydrocodone-acetaminophen pills. Aachi did not conduct a physical examination of the patient nor discuss the patient’s pain or response to prior medication. Aachi acknowledged that he knew the prescriptions were not for a legitimate medical purpose and that he did not write the prescriptions in the usual course of his professional practice. Aachi also admitted that on July 2, 2018, he falsely submitted to an insurance company a false and fraudulent claim for payment for healthcare benefits, items, and services. Aachi admitted he acted with the intend to defraud the insurance company.
In filings submitted by the government in connection with Aachi’s sentencing, the government wrote that over the course of just one year, Aachi wrote 5,992 prescriptions for controlled substances, the majority of which were for narcotics. Further, from September 2017, to July 2018, four undercover law enforcement agents posed as new patients. They visited Aachi about four times each, and after each visit, they received a prescription for a schedule II controlled substance with little to no physical examination.
A federal grand jury indicted Aachi on October 9, 2018, charging him with six counts of distributing drugs outside the scope of professional practice, in violation of 21 U.S.C. § 841(a)(1) and (b)(1)(C), and one count of health care fraud, in violation of 18 U.S.C. § 1347. Aachi pleaded guilty to one count under each statute.
In addition to the prison term, Judge Davila ordered Aachi to serve 3 years of supervised release and ordered him to pay $82,616.85 in restitution. Judge Davila ordered Aachi to begin serving his sentence on January 22, 2020.
Assistant U.S. Attorney Shailika Kotiya is prosecuting the case with the assistance of Andy Ding. This prosecution is the result of investigations by the DEA, FBI, HHS-OIG, and the BMFEA. Through the BMFEA, the California Department of Justice regularly works with other law enforcement agencies to investigate and prosecute fraud perpetrated on the Medi-Cal program against a wide variety of healthcare providers, including doctors and pharmaceutical companies.
California Resident Sentenced to Prison for Selling Fraudulent Financial Instruments and Tax FraudRead the Press Release
Kenneth Taylor, a California resident, was sentenced to 36 months in prison and ordered to pay $90,000 in victim restitution for conspiracy to commit wire fraud and $1,100,774 in restitution to the Internal Revenue Service for tax fraud, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division, United States Attorney David L. Anderson, Federal Bureau of Investigation Special Agent in Charge John F. Bennett, and Internal Revenue Service (IRS), Criminal Investigation Special Agent in Charge Kareem Carter. The Honorable Jon S. Tigar, United States District Court Judge, imposed the sentence.
On March 1, 2019, Taylor pleaded guilty to filing a false income tax return and to conspiring with codefendants Sharon Ringgenberg and Craig Scott to commit wire fraud. Taylor admitted that from 2009 through 2012, he conspired with his codefendants to sell to customers fraudulent standby letters of credit and proof of funds statements for submission to banks. These financial instruments were fraudulent because they reported false client creditworthiness and client balances that exceeded Success Bullion USA, LLC’s (SBUSA) assets.
The fraudulent financial instruments were issued by SBUSA, an entity for which Taylor established a website, and which falsely purported to be an authorized U.S. subsidiary of a large Hong Kong financial institution. The fraudulent financial instruments were transmitted to banks by Centerlink LLC, another entity Taylor controlled, in a format that rendered the instruments unenforceable. Taylor sent proceeds he received through SBUSA and Centerlink to an account in Belize that he controlled. Taylor admitted that he received more than $3 million from the scheme, and that his false returns caused a tax loss of more than $550,000.
Taylor’s co-conspirators, Ringgenberg and Scott, each pleaded guilty to conspiring to commit wire fraud and are scheduled to be sentenced Dec. 6, 2019.
In addition to the prison term and restitution, Judge Tigar also sentenced Taylor to three years of supervised release.
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.
East Bay Man Sentenced to 14 Years in Prison for Transporting A Minor Across State Lines to Prostitute in OaklandRead the Press Release
OAKLAND– Eugene Latrell McNeely, aka Sleepy, aka Slim Sleep da Mac, was sentenced to 14 years in prison for transporting a minor with intent to prostitute, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The Honorable James Donato, U.S. District Judge, handed down the sentence.
McNeely, 37, of Oakland, pleaded guilty to the charge on June 27, 2019. According to public filings, McNeely admitted that on October 3, 2015, he drove from Oakland to Salem, Oregon, picked up a 14-year old minor female that he had been communicating with by text message and through Facebook messenger, and drove her across state lines back to Oakland, California to work as one of his prostitutes. For approximately three months thereafter, the minor female worked as a prostitute and McNeely was her pimp. According to documents filed by the government, from October 2015 until January 2016, at least one other victim, not including the 14-year old, worked as a prostitute for the defendant, who was their pimp. Defendant forced the victims to work for him as prostitutes seven days a week, performing sex acts on strangers and then giving all of their earnings to the defendant. Both victims were raped, on separate occasions, while working for the defendant. The defendant regularly physically beat them, and he used guns to intimidate them and make them continue working for him. The defendant also gave one of the victims heroin, knowing that she was addicted, so that she would continue to prostitute for him.
On November 1, 2018, a federal grand jury issued a superseding indictment charging McNeely with one count of transportation of a minor for prostitution, in violation of 18 U.S.C. § 2423(a); one count of sex trafficking of children, in violation of 18 U.S.C. §§ 1591(a)(1), (b)(2), and (c); and two counts of sex trafficking by force, fraud, or coercion, in violation of 18 U.S.C. §§ 1591(a)(1) and (b)(1). McNeely pleaded guilty to the first count. The remaining counts are pending.
In addition to the prison term, Judge Donato ordered McNeely to serve 15 years of supervised release. McNeely has been in federal custody since May of 2017 and will begin serving his sentence immediately.
Assistant U.S. Attorneys Ross Weingarten and Shailika Kotiya are prosecuting the case with the assistance of Madeline Wachs. The prosecution is the result of an investigation by the FBI and the Oakland Police Department.
Former Informix Executive Hauled into Court on 19-Year-Old Indictment Regarding Alleged Investment Fraud SchemeRead the Press Release
SAN FRANCISCO – This morning, former Informix executive Walter Konigseder appeared in federal court to face investment fraud charges laid out in an 11-count indictment filed in October of 2000, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett.
A federal grand jury indicted Konigseder, 67, a German national, on October 5, 2000. According to the indictment, in the early 1990s, Konigseder was the Sales Director and Country Manager for Germany of Menlo Park-based Informix, a multinational, publicly held computer software developer, support, training, and consulting company. From 1992 through 1996, Konigseder had authority over Informix’s sales force, finance, and legal staff within all of Central and Eastern Europe. The indictment alleges that Konigseder caused Informix to record false and illusory sales, to make false statement to Informix’s auditors and management, and to book license revenue in advance, rather than over the period of maintenance contracts.
The indictment describes how Konigseder engaged in numerous acts of alleged wrongdoing in connection with Informix’s restatement in 1997 of its 1996 earnings. The indictment alleges that Konigseder’s fraud contributed to the need for Informix to restate its 1996 earnings. Between April and September of 1997, Informix therefore restated its previous year’s growth. The result was a 60% drop in its stock value—a change to the company’s value from approximately $2.5 billion to as low as $975 million. For example, the indictment describes six illusionary sales between June of 1996 and January of 1997 in which Konigseder, contrary to Generally Accepted Accounting Principles, directed Informix to recognize more than $25 million in revenue on contracts that contained contingencies. Further, the indictment describes how Konigseder allegedly concealed material facts from Informix’s auditors. In July of 1997, for example, Konigseder allegedly reported to Informix’s auditors that a client did not make a multi-million dollar payment because the client was hoping to expand on the existing contract with Informix. In truth, Konigseder was aware that the client had exercised a side agreement canceling the contract with Informix altogether. The indictment also alleges Konigseder caused Informix to make false statements to the Securities and Exchange Commission overstating the company’s earnings in the second, third, and fourth quarters of 1996.
In sum, Konigseder was charged with three counts of wire fraud, in violation of 18 U.S.C. §§ 1343 and 2; four counts of accounting fraud, in violation of 15 U.S.C. §§ 78m(b) and 78ff(a), 17 C.F.R. 240.13b2-1, and 18 U.S.C. § 2; and three counts of false statements to accountants, in violation of 15 U.S.C. §§ 78m(b)(2) and 78ff(a), 17 C.F.R. 240.13b2-2, and 18 U.S.C. § 2.
A bench warrant was issued for Konigseder’s arrest on October 5, 2000. At that time he was residing in Germany and remained there for almost 19 years after being indicted. Konigseder was arrested by Mauritius authorities in August while on a trip to that country. He was handed over to United States authorities on October 9 and arrived in the United States on Friday, October 11. He made his initial federal court appearance at 10:30 this morning before U.S. Magistrate Judge Jacqueline Scott Corley.
An indictment merely alleges that crimes have been committed and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces a maximum sentence of 5 years’ imprisonment and a $250,000 fine for each count of wire fraud, 10 years’ imprisonment and up to $1 million for each count of falsification of accounting records and false statements to accountants. In addition, the court may order additional periods of supervised release, fines, 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 is prosecuting the case. The prosecution is the result of an investigation by the Federal Bureau of Investigation with assistance from the Department of Justice Office of International Affairs, Mauritius, and the United States Marshal Service.
Michigan Resident Appears in Bay Area Federal Court on Hacking ChargesRead the Press Release
SAN FRANCISCO – Alleged hacker Anthony Tyler Nashatka, a/k/a “psycho,” appeared today in federal court on charges of conspiracy to commit computer fraud and abuse, conspiracy to commit wire fraud, aggravated identity theft and other charges related to a scheme to defraud victims of at least $1.4 million in cryptocurrency in December of 2017, announced United States Attorney David L. Anderson and U.S. Secret Service Special Agent in Charge Thomas Edwards. Nashatka was arraigned before U.S. Magistrate Judge Jacqueline Scott Corley and was released on bond pending further proceedings.
A federal grand jury indicted Nashatka, a current resident of Michigan, along with his co-conspirator, United Kingdom resident Elliott Gunton, a/k/a “planet,” a/k/a “Glubz,” on August 13, 2019. According to the indictment, in December of 2017, Nashatka conspired to target a cryptocurrency exchange platform to obtain the private keys and other information of hundreds of its users as part of a scheme to steal the users’ cryptocurrency. The indictment further describes how the defendants unlawfully used the identity of a victim to gain access to the platform’s domain name settings, caused the transmission of a command to disable all of the cryptocurrency company’s servers, diverted users from the actual platform to a fake website, and fraudulently induced victims to input their cryptocurrency addresses and private keys into the fake website. The indictment alleges between December 20 and 21, 2017, Nashatka and his co-conspirators logged the credentials of hundreds of victims, stole their cryptocurrency, and transferred approximately $600,000 in cryptocurrency to one cryptocurrency address controlled by Nashatka and his co-conspirators. In addition, using this fraud scheme, Nashatka and his co-conspirators stole and additional $800,000 from a single victim on December 26, 2017. The investigation to identify additional victims is continuing.
In sum, each defendant was charged with one count each of the following crimes: conspiracy to commit computer fraud and abuse, in violation of 18 U.S.C. § 1030(b); transmission of a program, information, code, and command to cause damage to a protected computer, in violation of 18 U.S.C. §§ 1030(a)(5)(A), (c)(4)(B)(i) and (c)(4)(A)(i)(VI); unauthorized access to a protected computer to obtain value, in violation of 18 U.S.C. §§ 1030(a)(4) and (c)(3)(A); conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349; and aggravated identity theft, in violation of 18 U.S.C. § 1028A(a)(1).
Nashatka was arrested in New York on September 6, 2019. His next court appearance is scheduled for November 13, 2019, before the Honorable Edward M. Chen, U.S. District Judge for a status conference.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces the following maximum statutory sentences:
CHARGE
MAXIMUM PENALTY
Conspiracy to Commit Computer Fraud and Abuse
10 years in prison and a $250,000 fine or twice the gross gain or loss resulting from the scheme
Transmission of a Program, Information, Code, and Command to Cause Damage to a Protected Computer
10 years in prison and a $250,000 fine or twice the gross gain or loss resulting from the scheme
Unauthorized Access to a Protected Computer To Obtain Value
5 years in prison and a $250,000 fine or twice the gross gain or loss resulting from the scheme
Conspiracy to Commit Wire Fraud
20 years in prison and a $250,000 fine or twice the gross gain or loss resulting from the scheme
Aggravated Identity Theft
2 years in prison (to run consecutive to any other term imposed) and a $250,000 fine or twice the gross gain or loss resulting from the scheme
The court also may order additional periods of supervised release, fines, and restitution, if appropriate, for each violation. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
This case is being prosecuted by the Special Prosecutions Section of the United States Attorney’s Office. The prosecution is the result of an investigation by the United States Secret Service and the Federal Bureau of Investigation.
California Real Estate Developer Convicted of Making Conduit Contributions in Two U.S. Congressional CampaignsRead the Press Release
Today, a federal jury found an Oakland-area real estate developer guilty for funneling tens of thousands of dollars through straw donors into two consecutive congressional campaigns for a member of the U.S. House of Representatives.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, United States Attorney David L. Anderson for the Northern District of California and Special Agent in Charge John F. Bennett of the FBI’s San Francisco Field Office made the announcement.
After a 10-day trial, James Tong, 74, of Fremont, California, was found guilty of two counts of making conduit contributions. According to the evidence presented at trial, in 2012 and 2013 Tong used two primary straw donors as recruiters for his conduit scheme. Tong leveraged financial obligations and the implied loss of business opportunities to induce these individuals to distribute cash in the community to be donated to the initial and reelection campaigns of a candidate who was running for office in the U.S. House of Representatives. The network of straw donors included dozens of conduits who agreed to write checks in exchange for a commensurate amount of cash sourced from Tong. Tong provided envelopes of cash to the two intermediaries and directed them to reimburse individuals for their contributions. Tong also directed an intermediary to conceal the scheme by instructing the conduits not to deposit the cash and later directed the intermediary to withhold information from the FBI after he was interviewed.
Sentencing has been scheduled for Dec. 13.
The FBI conducted the investigation. Trial Attorneys Amanda R. Vaughn and Rebecca G. Ross of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney S. Waqar Hasib of the Northern District of California prosecuted the case.
California Real Estate Developer Convicted of Making Conduit Contributions in Two U.S. Congressional CampaignsRead the Press Release
OAKLAND – A federal jury found Oakland area real estate developer James Tong guilty for funneling tens of thousands of dollars through straw donors into two consecutive congressional campaigns for a member of the U.S. House of Representatives, announced United States Attorney David L. Anderson, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, and Special Agent in Charge John F. Bennett of the FBI’s San Francisco Field Office. The verdict came down today after an 8-day trial before the Hon. Jon S. Tigar, United States District Judge.
Tong, 74, of Fremont, Calif., was found guilty of two counts of making contributions to a federal campaign in the name of other individuals. According to the evidence presented at trial, in 2012 and 2013 Tong used two primary straw donors as recruiters for his scheme. Tong gave thousands of dollars in cash to his chosen middlemen and instructed them to recruit straw donors to write checks to a candidate who was running for office in the U.S. House of Representatives. Tong induced the individuals to distribute cash in the community to be donated to the initial and reelection campaigns of the candidate. The network of straw donors included dozens of conduits who agreed to write checks in exchange for a commensurate amount of cash sourced from Tong. Tong provided envelopes of cash to the two intermediaries and directed them to reimburse individuals for their contributions. Tong also directed an intermediary to conceal the scheme by instructing the conduits not to deposit the cash and later directed the intermediary to withhold information from the FBI after he was interviewed. Evidence at trial demonstrated that members of the campaign, including the candidate, were unaware of the defendant’s illegal contribution scheme.
On August 31, 2017, a federal grand jury indicted Tong charging him with two counts of making and causing campaign contributions in the name of another, in violation of 52 U.S.C. §§ 30122 and 30109(d)(1)(D). The jury found Tong guilty of both counts.
Judge Tigar scheduled Tong’s sentencing for Dec. 13. Tong faces a maximum statutory penalty of two years in prison and 1000% of the amount involved in the violation for each count.
The FBI conducted the investigation. Trial Attorneys Amanda R. Vaughn and Rebecca G. Ross of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney S. Waqar Hasib of the Northern District of California prosecuted the case.
Three Members of “Central Divisadero Players” Gang Sentenced to 22 Years or More in Prison for Racketeering and MurderRead the Press Release
SAN FRANCISCO – Alfonzo Williams (a/k/a “Fonz” or “Relly”), Antonio Gilton (a/k/a “TG” or “Tone”), and Reginald Elmore (a/k/a “Fat Reg”), were each sentenced to 22 or more years in prison for their respective roles in a racketeering conspiracy, announced United States Attorney David L. Anderson and FBI Special Agent in Charge John F. Bennett. Williams was sentenced to 25 years in prison, Gilton was sentenced to 22 years, and Elmore was sentenced to 22 years. The sentences were handed down by the Honorable William H. Orrick, U.S. District Judge, in a case in which a total of eleven defendants have been charged for crimes committed by a San Francisco gang known as Central Divisadero Players, aka “Central Divis Playas,” aka “CDP.”
The eleven-defendant, 22-count second superseding indictment filed on August 14, 2014, in this case described CDP as a racketeering organization that worked collectively with other gangs in the Western Addition of San Francisco to preserve and protect power, territory, reputation, and profits of the enterprise through the use of intimidation, violence, assaults, and murder.
The three defendants sentenced today pleaded guilty in May 2019. As part of their guilty pleas, Williams, 42, and Gilton, 33, admitted that they were active members of CDP from at least 2000 through July 2012, when they were arrested for murder. They belonged to CDP knowing that its members and associates committed numerous crimes, including murder, attempted murder, pimping, robbery, firearms offenses, witness intimidation, drug trafficking, and the enticement of individuals to travel in interstate commerce for prostitution.
In addition, Williams and Gilton admitted their involvement in the murder of Calvin Sneed. Sneed, 22 at the time of his death, was a resident of Los Angeles who visited San Francisco in June 2012. Williams and Gilton had plotted with others in advance to kill Sneed. In the early morning hours of June 4, 2012, they found Sneed driving near the intersection of Le Conte and Meade Avenues in San Francisco. One of them shot Sneed. Sneed died from his gunshot wounds. Williams and Gilton admitted that a substantial purpose of this murder was to maintain and increase their position in CDP.
Elmore, 30, admitted that he, too, was a member of CDP, and that he joined CDP understanding that its members engaged in acts of racketeering, including murder. Elmore also admitted that he was liable, through principles of co-conspirator liability, for the use of a firearm in the double-homicide of Andre Helton and Isiah Turner that took place by the University of San Francisco on August 14, 2008.
Williams, Gilton, and Elmore were each convicted of conspiring to conduct the affairs of an enterprise through a pattern of racketeering activity, in violation of 18 U.S.C. § 1962(d), and using and possessing a firearm in murder, in violation of 18 U.S.C. § 924(j).
In addition to the prison terms, Judge Orrick sentenced Williams, Gilton, and Elmore each to serve five years of supervised release following their terms of incarceration.
The defendants are already in custody and will begin serving their sentences immediately.
Six defendants have previously been convicted and sentenced in this case. Charles Heard (a/k/a “Cheese”) was sentenced to four life sentences. Jaquain Young (a/k/a “Loc”) was sentenced to four life sentences, plus additional terms of years. Adrian Gordon (a/k/a “Tit”) was sentenced to 27 years in prison. Esau Ferdinand (a/k/a “Sauce”) was sentenced to 20 years in prison. Monzell Harding, Jr. was sentenced to 12 years in prison. Paul Robeson (a/k/a “P World”) was sentenced to six years in prison.
Two defendants, Barry Gilton (a/k/a “Prell”) and Lupe Mercado, remain in the case. They have pleaded not guilty and are set to stand trial beginning on February 3, 2020. They are presumed innocent until proven guilty beyond a reasonable doubt.
The prosecution is the result of joint investigation by the Federal Bureau of Investigation; the San Francisco Police Department’s Gang Task Force, Homicide Detail, Robbery Detail, Special Victims Unit, and the Northern, Park, and Bayview Stations; the San Francisco District Attorney’s Office; and the San Pablo Police Department.
East Bay Man Sentenced to Eight Years in Prison for His Role in Firearms Trafficking and Robbery of Undercover Federal AgentRead the Press Release
OAKLAND – Jesus Angel Sanchez was sentenced to 96 months in prison for using, carrying and brandishing a firearm during and in relation to a crime of violence, 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 today by the Honorable Haywood S. Gilliam, Jr., U.S. District Judge.
Sanchez, 20, of Oakland, pleaded guilty to the charge on June 11, 2019. According to his plea agreement and other court filings, the charges against Sanchez arise from two separate, but related, conspiracies.
The first conspiracy was an agreement between multiple individuals in the East Bay to sell firearms without a license. Between January 2018 and October 2018, the ATF acquired 35 firearms from Sanchez; Anthony Reed, 23, of San Leandro; Rahsaan Faison, 23, of San Leandro; and Benjamin Gormley, 22, of Hayward. Sanchez’s co-conspirators acquired firearms in Nevada, brought them to the Northern District of California to sell, and advertised the firearms for sale on social media. Sanchez was personally responsible for the sale of at least 21 firearms to an undercover ATF agent.
With respect to the second conspiracy, in November of 2018, Sanchez agreed with Reed; James Medeiros, 25, of San Leandro; and Marcos Antonio Martenez, 25, of Oakland, to rob one of the firearms buyers. The buyer was, in fact, an undercover ATF agent. Sanchez coordinated a ruse transaction with the ATF agent, persuading the ATF agent to travel to a building in Oakland to purchase firearms for $8,000. Sanchez knew that his co-conspirators were carrying firearms to conduct the robbery. When the agent arrived, Sanchez met the agent in front of the building and instructed the agent to follow him to the back of the building. Medeiros and Martenez were waiting at the back of the building, and when the agent arrived, the co-conspirators robbed him. Medeiros and Martenez brandished firearms and pointed them at the agent while Sanchez demanded the agent’s money. Reed, Sanchez, and Medeiros were apprehended leaving the scene of the robbery. Martenez was arrested on November 23, 2018.
On November 29, 2018, a federal grand jury returned a superseding indictment, charging Sanchez, Reed, Medeiros, Martenez, Faison, and Gormley with multiple crimes related to the two conspiracies in which Sanchez admitted participating.
Sanchez and his co-conspirators have been sentenced as follows:
DEFENDANT
CONVICTIONS
SENTENCE
Anthony Reed
- Using, Carrying, and Brandishing a Firearm During and in Relation to a Crime of Violence, in violation of 18 U.S.C. § 924(c)(1)(A)(ii)
96 months’ imprisonment, 5 years supervised release, $100 special assessment
Jesus Angel Sanchez
- Using, Carrying, and Brandishing a Firearm During and in Relation to a Crime of Violence, in violation of 18 U.S.C. § 924(c)(1)(A)(ii)
96 months’ imprisonment, 5 years supervised release, $100 special assessment
James Medeiros
- Using, Carrying, and Brandishing a Firearm During and in Relation to a Crime of Violence, in violation of 18 U.S.C. § 924(c)(1)(A)(ii)
84 months’ imprisonment, 3 years supervised release, $100 special assessment
Marcos Antonio Martenez
- Using, Carrying, and Brandishing a Firearm During and in Relation to a Crime of Violence, in violation of 18 U.S.C. § 924(c)(1)(A)(ii)
84 months’ imprisonment, 3 years supervised release, $100 special assessment
Benjamin Gormley
- Conspiracy to Deal in Firearms without a License, in violation of 18 U.S.C. § 371
3 years’ probation including 6 months’ home confinement, $2200 fine, $100 special assessment
Rahsaan Faison
- Conspiracy to Deal in Firearms without a License, in violation of 18 U.S.C. § 371
Sentencing scheduled November 4, 2019
Also charged in the firearms trafficking conspiracy was Julaan Faison who remains a fugitive. He, like all defendants, is presumed innocent until proven guilty beyond a reasonable doubt.
Assistant U.S. Attorney Samantha Schott is prosecuting the case with the assistance of Jessica Rodriguez Gonzalez. The prosecution is the result of an investigation by the ATF, with the assistance of the Alameda County Sheriff’s Office, California Highway Patrol, and the Oakland Police Department.
Oakland Resident Pleads Guilty to 19 Bank Robberies Across Northern CaliforniaRead the Press Release
SAN FRANCISCO, Calif. – Duane Kurt Makela pleaded guilty in federal court today to 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, Eastern District of California U.S. Attorney McGregor W. Scott, and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The plea was accepted by Charles R. Breyer, Senior U.S. District Judge.
Makela, 50, of Oakland, 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 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
Pollack 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 crimes. Today, he pleaded guilty to all 19 counts in the Superseding Information.
Judge Breyer scheduled Makela’s sentencing for January 15, 2020. The maximum statutory penalties for each armed bank robbery in violation of 18 U.S.C. § 2113(a) and (d), are 25 years in prison and a $250,000 fine. The maximum statutory penalties for each unarmed bank robbery and attempted bank robbery in violation of 18 U.S.C. § 2113(a), are 20 years in prison and a $250,000 fine. In addition, the court may order a term of supervised release, 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.
Northern District of California Assistant U.S. Attorneys Nicholas Walsh and Alex Tse are 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.
Walnut Creek Woman Sentenced to More Than Two Years in Prison for Mail Theft Conspiracy Targeting San Francisco Apartment ComplexRead the Press Release
SAN FRANCISCO/SAN JOSE/OAKLAND – Jesslyn Felix was sentenced today to 28 months in prison, and ordered to pay restitution for her role in a conspiracy to commit wire fraud stemming from a mail theft scheme, announced United States Attorney David L. Anderson and United States Postal Inspection Service Inspector in Charge Rafael Nuñez. The Honorable Maxine M. Chesney, U.S. District Judge, handed down the sentence.
Felix, 35, of Walnut Creek, Calif., pleaded guilty to the charge on May 29, 2019. According to her plea agreement, Felix admitted that she and her co-defendant, Tyler Goforth, 35, also of Walnut Creek, traveled repeatedly to the Beacon Apartment Complex, a large apartment building in San Francisco, to steal mail from Beacon residents. The defendants visited the Beacon more than a dozen times between August 2017 and February 2018. Felix and Goforth would enter one of the mailrooms at the Beacon, force open mailboxes, and then steal mail. They then used personal information and documents found in the stolen mail to steal money from Beacon residents, which they spent for personal gain. Specifically, Felix and Goforth activated credit and debit cards in the victims’ names, stole checks and gift cards, accessed bank accounts belonging to Beacon residents, and stole photo identifications which they then used to carry out their scheme to steal money. In total, Felix and Goforth stole mail from more than 80 residents of the Beacon and stole more than $40,000 from them.
Mr. Goforth was sentenced for his role in the conspiracy on August 14, 2019, to 27 months in prison, to be followed by a three-year period of supervised release, and ordered to pay restitution.
A federal grand jury indicted Felix and Goforth on January 15, 2019. The 14-count indictment charged each defendant with one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349; five counts of wire fraud, in violation of 18 U.S.C. §1343; six counts of theft of mail, in violation of 18 U.S.C. §1708; one count of aggravated identity theft, in violation of 18 U.S.C. §1028A; and one count of possession with intent to use or transfer five or more documents or authentication features, in violation of 18 U.S.C. §1028(a)(3). Felix and Goforth both pleaded guilty to the conspiracy charge on May 29, 2019.
In addition to the prison term, Judge Chesney ordered Felix to serve a three-year period of supervised release to begin at the completion of the prison term. Felix has been in custody since May 1, 2019.
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 United States Postal Inspection Service.
East Bay Woman Sentenced to Three Years in Prison for Embezzlement Scheme from Her EmployerRead the Press Release
SAN FRANCISCO – Karen Posey was sentenced today to 36 months in prison, and ordered to pay restitution for stealing more than $200,000 from her former employer, announced United States Attorney David L. Anderson and FBI Special Agent in Charge John F. Bennett.
Posey pleaded guilty on December 11, 2018 to four counts of wire fraud, one count of bank fraud, and one count of access device fraud. According to the plea agreement, Posey worked from July 2016-December 2017 as the business manager at a San Francisco-based architecture firm that designs schools and other public spaces nationwide with a focus on making them accessible to the disabled. While employed there, Posey stole approximately $235,000 from the company. She did so using various methods, including by writing unauthorized company checks to herself and then depositing them into her personal bank account, by using a corporate credit card to pay for personal expenses, and by using a corporate ATM card to withdraw large sums of cash. In addition, as part of her plea agreement Posey admitted that, prior to working at the architecture firm, she worked at another San Francisco-based conservation company, where she embezzled more than $48,000 using similar means.
Posey, 58 of Martinez, CA, was indicted by a federal grand jury on August 30, 2018. The seven count Indictment charged her with four counts of Wire Fraud, in violation of 18 U.S.C. § 1343 (Counts One through Four), one count of Aggravated Identity Theft, in violation of 18 U.S.C. § 1028A; one count of Bank Fraud, in violation of 18 U.S.C. § 1344(2) (Count Six); and one count of Fraudulent Use of Unauthorized Access Devices, in violation of 18 U.S.C. § 1029(a)(2) (Count Seven).
The sentence was handed down by the Honorable Charles R. Breyer, U.S. District Court Judge. Judge Breyer also sentenced the defendant to a three year period of supervised release to begin at the completion of the prison term, and ordered her to pay restitution to the two companies from which she stole money. The defendant will begin serving the sentence on October 4, 2019.
Ross Weingarten is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Marina Ponomarchuk. The prosecution is the result of an investigation by the Federal Bureau of Investigation.
Antioch Man Sentenced to 102 Months in Prison for Distribution of Child PornographyRead the Press Release
SAN FRANCISCO – Freddy Jorge Horna was sentenced yesterday to 102 months in prison for distribution of child pornography, announced United States Attorney David L. Anderson and Special Agent in Charge Tatum King, Homeland Security Investigations. The sentence was handed down by the Honorable Jeffrey S. White, U.S. District Judge.
Horna, 39, of Antioch, pleaded guilty to the charge on April 9, 2019.
During 2018, Horna distributed child pornography using a social media platform to an adult woman in Peru. The images depicted the woman’s two daughters, who were approximately 7 and 14 years old who resided in Peru, engaged in sexually explicit conduct. Horna and the woman in Peru transmitted over 900 sexually explicit images and over 60 sexually explicit videos of the minor victims.
On August 1, 2018, a Criminal Complaint was filed charging Horna with distribution of child pornography in violation of 18 U.S.C. § 2252(a)(2). On August 16, 2018, a federal grand jury returned an indictment charging Horna with one count of distribution of child pornography in violation of 18 U.S.C. § 2252(a)(2). The woman in Peru was charged by the Peruvian government. Following Horna’s arrest in 2018, she absconded. Peruvian authorities continue to search for her. At that same time, Peruvian authorities took the minor victims into protective custody.
In addition to the prison term, Judge White sentenced Horna to a 5-year term of supervised release and ordered Horna to pay a special assessment of $5,100.
Assistant United States Attorney Jonathan U. Lee is prosecuting the case with the assistance of Jessica Rodriguez Gonzalez. The prosecution is the result of an investigation by Homeland Security Investigations (San Francisco and Northern California); the Silicon Valley Internet Crimes Against Children Task Force; and the Peruvian National Police.
Suspected child sexual exploitation or missing children may be reported to the National Center for Missing & Exploited Children via its toll-free 24-hour hotline, 1-800-THE-LOST.
Northern California Resident Charged with Acting as an Illegal AgentRead the Press Release
The Department of Justice unsealed charges today in a criminal complaint charging Xuehua Peng, also known as Edward Peng, 56, for acting as an illegal foreign agent in delivering classified United States national security information to officials of the People’s Republic of China’s Ministry of State Security (MSS).
“According to the allegations, Peng conducted numerous dead drops here in the United States on behalf of Chinese intelligence officers and delivered classified information to them in China. His arrest exposes and disrupts an operation by those Chinese intelligence officers to collect such information without having to step foot in this country,” said Assistant Attorney General of National Security John C. Demers. “Coming on top of our many recent Chinese espionage cases—involving both national defense and intellectual property information—this case illustrates the seriousness of Chinese espionage efforts and the determination of the United States to thwart them.”
“The conduct charged in this case alleges a combination of age-old spycraft and modern technology,” said U.S. Attorney David L. Anderson for the Northern District of California. “Defendant Xuehua (Edward) Peng is charged with executing dead drops, delivering payments, and personally carrying to Beijing, China, secure digital cards containing classified information related to the national security of the United States.” U.S. Attorney Anderson further stated, “The charges announced today provide a rare glimpse into the secret efforts of the People’s Republic of China to obtain classified national security information from the United States and the battle being waged by our intelligence and law-enforcement communities to protect our people, our ideas, and our national defense.”
"The FBI, along with our partners, will aggressively pursue foreign agents operating illegally in the United States attempting to steal our country's most sensitive information." said Assistant Director John Brown of the Counterintelligence Division. "This case should serve as a warning to the government of China as well as any other foreign adversary looking to replicate this activity. The FBI, and our intelligence and law enforcement partners, will not waiver. We will bring all of our resources to bear to defeat hostile foreign intelligence services and protect our nation's security. I would like to thank FBI counterintelligence personnel throughout the country who tirelessly worked this investigation over the course of many years, particularly those personnel in our Counterintelligence and San Francisco Divisions."
“Putting an end to Mr. Peng’s alleged actions are an important and significant step in dismantling the PRC’s overall efforts against our country,” said Special Agent in Charge Bennett of the FBI San Francisco Division. "Our message is clear: the FBI, along with our intelligence community partners, will pursue foreign adversaries -at any level of an operation- and disrupt their malicious activity when it is detected."
According to the complaint filed Sept. 24, 2019, and unsealed this morning, Peng, 56, a U.S. citizen living in Hayward, California, acted at the direction and under the control of MSS officials in China in retrieving classified information passed to him by a confidential human source (the source), leaving money behind for the source, or both. His activities included one dry run and at least five successful “dead drops” between October 2015 and July 2018. The dead drops occurred in the Bay Area and in Columbus, Georgia.
The table below summarizes the allegations in the complaint about each successful dead drop, including the date of the dead drop, the location of the dead drop, what Peng left in the hotel room, and what Peng retrieved from the hotel:
Date
Location
Peng Left in the Hotel
Peng Retrieved from the Hotel
6/23/2015
Newark, CA
n/a
Empty package (dry run)
10/24/2015
Newark, CA
n/a
SD card
4/23/2016
Oakland, CA
$20,000
SD card
7/1/2017
Columbus, GA
$20,000
n/a
9/9/2017
Columbus, GA
$10,000
SD card
6/30/2018
Columbus, GA
$20,000
SD card
In the June 23, 2015, “dry run,” no information or money was exchanged. Instead, an empty package was left by the source for Peng at the front desk of a hotel, and Peng later retrieved it. In the first successful dead drop, Peng retrieved a package containing an SD card from the front desk of a hotel. In each of the other four successful dead drops, Peng booked hotel rooms and left a room key to be picked up by the source. Peng then left envelopes of cash in the room, retrieved a secure digital card left there by the source, or both.
In each instance in which he retrieved an SD card from the hotel room, Peng then traveled to Beijing, China, shortly thereafter. The complaint further alleges that Peng was told by an MSS handler, in coded language, where and when to conduct the dead drops, how much money to leave in exchange for the SD cards, and when to return to China to deliver them. As alleged in the Complaint, the FBI secretly filmed Peng conducting some of the dead drops, and intercepted Peng’s telephone conversations with his MSS handlers in China.
On Friday, Sept. 27, 2019, Peng was arrested at his residence in Hayward and made his initial appearance in federal court in San Francisco before U.S. Magistrate Judge Joseph C. Spero. Magistrate Judge Spero ordered Peng held without bond pending further proceedings. Peng’s next hearing has been scheduled for Oct. 2, 2019, at 10:30 am before the Honorable Jacqueline Corley, 450 Golden Gate Ave., 15th Floor, for a detention hearing and identification of counsel.
A complaint merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Peng faces a maximum sentence of 10 years, and a fine of $250,000 for acting as an agent of a foreign government without notifying the United States Attorney General in violation of 18 U.S.C. § 951. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
This case is being prosecuted by the Special Prosecutions Section of the United States Attorney’s Office for the Northern District of California and the Counterintelligence and Export Control Section of the Department of Justice, National Security Division. The prosecution is the result of an investigation by the FBI.
Relevant footage is linked here: Exhibit 2A and Exhibit 2B.
Hayward Resident Charged with Acting as an Illegal Agent for ChinaRead the Press Release
SAN FRANCISCO – The United States Attorney’s Office for the Northern District of California unsealed charges today in a criminal complaint charging Xuehua Peng, a/k/a Edward Peng, for acting as an illegal foreign agent in delivering classified United States national security information to officials of the People’s Republic of China’s Ministry of State Security (MSS), announced United States Attorney David L. Anderson, Assistant Attorney General for the Department of Justice National Security Division, John C. Demers, and Federal Bureau of Investigation San Francisco Division Special Agent in Charge John F. Bennett.
“The conduct charged in this case alleges a combination of age-old spycraft and modern technology,” said U.S. Attorney Anderson. “Defendant Xuehua (Edward) Peng is charged with executing dead drops, delivering payments, and personally carrying to Beijing, China, secure digital cards containing classified information related to the national security of the United States.” U.S. Attorney Anderson further stated, “The charges announced today provide a rare glimpse into the secret efforts of the People’s Republic of China to obtain classified national security information from the United States and the battle being waged by our intelligence and law-enforcement communities to protect our people, our ideas, and our national defense.”
“According to the allegations, Peng conducted numerous dead drops here in the United States on behalf of Chinese intelligence officers and delivered classified information to them in China. His arrest exposes and disrupts an operation by those Chinese intelligence officers to collect such information without having to step foot in this country,” said AAG Demers. “Coming on top of our many recent Chinese espionage cases—involving both national security and intellectual property information—this case illustrates the seriousness of Chinese espionage efforts and the determination of the United States to thwart them.”
"The FBI, along with our partners, will aggressively pursue foreign agents operating illegally in the United States attempting to steal our country's most sensitive information." said FBI Assistant Director John Brown of the Counterintelligence Division. "This case should serve as a warning to the government of China as well as any other foreign adversary looking to replicate this activity. The FBI, and our intelligence and law enforcement partners, will not waiver. We will bring all of our resources to bear to defeat hostile foreign intelligence services and protect our nation's security. I would like to thank FBI counterintelligence personnel throughout the country who tirelessly worked this investigation over the course of many years, particularly those personnel in our Counterintelligence and San Francisco Divisions."
“Putting an end to Mr. Peng’s alleged actions are an important and significant step in dismantling the PRC’s overall efforts against our country,” said Special Agent in Charge Bennett. "Our message is clear: the FBI, along with our intelligence community partners, will pursue foreign adversaries—at any level of an operation—and disrupt their malicious activity when it is detected."
According to the complaint filed September 24, 2019, and unsealed this morning, Peng, 56, a U.S. citizen living in Hayward, Calif., acted at the direction and under the control of MSS officials in China in retrieving classified information passed to him by a confidential human source (“the source”), leaving money behind for the source, or both. His activities included one dry run and at least five successful “dead drops” between October 2015 and July 2018. The dead drops occurred in the Bay Area and in Columbus, Georgia.
The table below summarizes the allegations in the complaint about each successful dead drop, including the date of the dead drop, the location of the dead drop, what Peng left in the hotel room, and what Peng retrieved from the hotel:
Date
Location
Peng Left in the Hotel
Peng Retrieved from the Hotel
6/23/2015
Newark, CA
n/a
Empty package (dry run)
10/24/2015
Newark, CA
n/a
SD card
4/23/2016
Oakland, CA
$20,000
SD card
7/1/2017
Columbus, GA
$20,000
n/a
9/9/2017
Columbus, GA
$10,000
SD card
6/30/2018
Columbus, GA
$20,000
SD card
In the June 23, 2015 “dry run,” no information or money was exchanged. Instead, an empty package was left by the source for Peng at the front desk of a hotel, and Peng later retrieved it. In the first successful dead drop, Peng retrieved a package containing an SD card from the front desk of a hotel. In each of the other four successful dead drops, Peng booked hotel rooms and left a room key to be picked up by the source. Peng then left envelopes of cash in the room, retrieved a secure digital card left there by the source, or both.
In each instance in which he retrieved an SD card from the hotel room, Peng then traveled to Beijing, China, shortly thereafter. The complaint further alleges that Peng was told by an MSS handler, in coded language, where and when to conduct the dead drops, how much money to leave in exchange for the SD cards, and when to return to China to deliver them. As alleged in the Complaint, the FBI secretly filmed Peng conducting some of the dead drops, and intercepted Peng’s telephone conversations with his MSS handlers in China.
On Friday, September 27, 2019, Peng was arrested at his residence in Hayward and made his initial appearance in federal court in San Francisco before U.S. Magistrate Judge Joseph C. Spero. Magistrate Judge Spero ordered Peng held without bond pending further proceedings. Peng’s next hearing has been scheduled for October 2, 2019, at 10:30 am before the Honorable Jacqueline Corley, 450 Golden Gate Ave., 15th Floor, for a detention hearing and identification of counsel.
A complaint merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Peng faces a maximum sentence of 10 years and a fine of $250,000 for acting as an agent of a foreign government without notifying the United States Attorney General, in violation of 18 U.S.C. § 951. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines, as applicable, and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
This case is being prosecuted by the Special Prosecutions Section of the United States Attorney’s Office for the Northern District of California and the Counterintelligence and Export Control Section of the Department of Justice, National Security Division. The prosecution is the result of an investigation by the Federal Bureau of Investigation.
A video filed in this case can be found at the following websites:
- https://youtu.be/Op5nROF7IAo
- https://youtu.be/HKweGYTguB0
Former Yahoo Software Engineer Pleads Guilty to Using Work Access to Hack into Yahoo Users’ Personal AccountsRead the Press Release
SAN JOSE – Reyes Daniel Ruiz pleaded guilty in federal court in San Jose today to hacking into the accounts of thousands of Yahoo users in search of private and personal records, primarily sexual images and videos of the account holders, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett.
In pleading guilty, Ruiz, a former Yahoo software engineer, admitted to using his access through his work at the company to hack into about 6,000 Yahoo accounts. Ruiz cracked user passwords, and accessed internal Yahoo systems to compromise the Yahoo accounts. Ruiz admitted to targeting accounts belonging to younger women, including his personal friends and work colleagues. He made copies of images and videos that he found in the personal accounts without permission, and stored the data at his home. Once he had access to the Yahoo accounts, Ruiz admitted to compromising the iCloud, Facebook, Gmail, DropBox, and other online accounts of the Yahoo users in search of more private images and videos. After his employer observed the suspicious account activity, Ruiz admitted to destroying the computer and hard drive on which he stored the images.
Ruiz, 34, of Tracy, California, was indicted by a federal Grand Jury on April 4, 2019. He was charged with one count of Computer Intrusion, in violation of 18 U.S.C. § 1030(a)(2)(C), and one count of Interception of a Wire Communication, in violation of 18 U.S.C. § 2511(1)(a) and (4)(a). Under the plea agreement, pled guilty to the count of Computer Intrusion.
Ruiz is currently on release pursuant to the conditions of an unsecured $200,000 bond.
Ruiz’s sentencing hearing is scheduled for February 3, 2020 at 1:30 p.m. before The Honorable Edward J. Davila, U.S. District Court Judge, in San Jose. The maximum statutory penalty for each count in violation of Computer Intrusion, 18 U.S.C. § 1030(a)(2)(C), is five years imprisonment and a fine of $250,000, plus restitution. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Daniel Kaleba is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Tong Zhang. The prosecution is the result of an investigation by the Federal Bureau of Investigation.
Heroin and Methamphetamine Trafficker Sentenced to 210 Months in PrisonRead the Press Release
SAN FRANCISCO – Jesus Guadalupe Salazar was sentenced yesterday to 17.5 years in prison for engaging in a conspiracy to commit drug trafficking, announced United States Attorney David L. Anderson, Drug Enforcement Administration Special Agent in Charge Chris Nielsen, and Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Rayfield Roundtree.
Salazar, age 33, of San Mateo, California, was indicted by a federal grand jury on June 12, 2018, with engaging in a conspiracy to distribute and possess with intent to distribute methamphetamine, in violation of 21 U.S.C. §§ 846 and 841(a)(1) and (b)(1)(A)(viii). He pleaded guilty in an open plea before the Court on June 9, 2019.
Salazar, who was the target of a federal wiretap operation, initially was arrested after being found with approximately 20 pounds of methamphetamine and nearly 5 pounds of heroin in his car. Agents also seized multiple firearms, magazines, and ammunition from his home. After his arrest and initial pretrial release, Salazar attempted to deliver an additional 17 pounds of methamphetamine to an individual in Seattle, Washington, where he was arrested again and has remained in continuous federal custody.
The sentence was handed down by The Honorable William H. Orrick, III, U.S. District Court Judge, following Salazar’s open plea application. Judge Orrick also sentenced the defendant to a 5 year period of supervised release.
AUSA Sheila Armbrust is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Linda Love. The prosecution is the result of a year-long investigation by the Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms and Explosives, the San Mateo County Sheriff’s Office Gang Intelligence Unit, and the San Mateo County Narcotics Task Force.
Attorney General Barr Appoints U.S. Attorney David L. Anderson to Advisory CommitteeRead the Press Release
SAN FRANCISCO – Attorney General William P. Barr today announced the appointment of U.S. Attorney David L. Anderson as one of nine new U.S. Attorneys to serve on the Attorney General’s Advisory Committee (AGAC). The other eight members include the following: Scott Brady, Western District of Pennsylvania; Maria Chapa Lopez, Middle District of Florida; Halsey Frank, District of Maine; Erica MacDonald, District of Minnesota; Christina Nolan, District of Vermont; Zach Terwilliger, Eastern District of Virginia; Tom Kirsch, Northern District of Indiana; and Nicholas A. Trutanich, District of Nevada.
“I am pleased to appoint these nine outstanding U.S. Attorneys to this key advisory committee. I am confident that they will serve with distinction,” Attorney General William P. Barr said. “The U.S. Attorneys who comprise the Attorney General’s Advisory Committee play a critical role in carrying out the Department of Justice’s important work, including its efforts to reduce violent crime, combat the opioid crisis, protect the most vulnerable, and enforce the rule of law.”
“I am grateful to the Attorney General and to my teammates here in the Northern District of California,” Anderson said. “As the U.S. Attorney, I get the recognition. But it is a fact that our AUSAs and staff do the work.”
The Attorney General also thanked the following U.S. Attorneys who have completed their terms and are rotating off the committee: Louis Franklin, Middle District of Alabama; Robert Higdon, Eastern District of North Carolina; John Huber, District of Utah; Rob Hur, District of Maryland; Jeff Jensen, Eastern District of Missouri; Andrew Lelling, District of Massachusetts; Joshua Minkler, Southern District of Indiana; Richard Moore, Southern District of Alabama; Bryan Schroder, District of Alaska; and David Weiss, District of Delaware.
Chaired by U.S Attorney for the District of Columbia, Jessie K. Liu, the AGAC represents the voice of the U.S. Attorneys and provides advice and counsel to the Attorney General on policy, management, and operational issues impacting U.S. Attorneys’ Offices.
Attorney General Barr also announced that U.S. Attorney for the Northern District of Texas Erin Nealy Cox, a current member, will replace U.S. Attorney John Huber as the Vice Chair of the AGAC.
The bios of all U.S. Attorneys are available here.
Federal Jury Convicts East Bay Subcontractor of Defrauding Matrix Service CompanyRead the Press Release
OAKLAND – A federal jury found Brian Federico guilty of mail fraud conspiracy and mail fraud, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The guilty verdicts followed a two-week trial before the Honorable Yvonne Gonzalez Rogers, United States District Judge.
Federico, 54, of Tracy, Calif., was project manager for Imperial Shotcrete, a company hired to perform concrete construction services as a subcontractor for Matrix Service Company. Matrix constructs tanks and provides tank maintenance and repair services to petrochemical companies. The evidence at trial showed that between 2006 and 2010, Matrix and the FBI uncovered a complex fraudulent invoicing scheme in its Suisun City, Calif., office. Evidence uncovered during the investigation caused Matrix to reimburse over $1.3 million to its customers.
For his part in the scheme, Federico caused Matrix to pay fraudulent invoices. The evidence at trial showed that Federico created false and fraudulent invoices both by using the name and logo of a real company without its authorization and by using bogus invoices from CEMS, another company Federico controlled. In addition, Federico submitted fraudulent invoices to two Matrix project managers who were receiving downstream payments from Imperial—these project managers often were the same persons responsible for authorizing Matrix to pay the Imperial invoices. Most of the funds that Matrix paid on the fraudulent invoices eventually were deposited into bank accounts that Federico controlled. Pursuant to his part of the scheme, Federico defrauded Matrix of a total of $1,289,403. Federico directed that more than $875,000 of the payments be deposited into bank accounts of his choosing, many of which he controlled.
On December 6, 2012, a federal grand jury indicted Federico and his co-defendants, charging each with various financial crimes related to the scheme. The two Matrix project managers Federico conspired with will be, or have been, sentenced for their respective roles in the scheme as follows:
Defendant’s name
Age/residence
Charge
Sentence
Kevin Laney
51/
Three Forks, Montana
Conspiracy to Commit Fail Fraud, 18 U.S.C. § 1349
Scheduled to be sentenced on December 12, 2019.
Brandon Hourmouzus
44/
Vacaville, California
Conspiracy to Commit Fail Fraud, 18 U.S.C. § 1349
Sentenced 10/08/2015 to three years and six months probation, $100 special assessment, and $196,410 restitution
Charles Burnette
38/
Aliso Viejo, California
Conspiracy to Commit Fail Fraud, 18 U.S.C. § 1349
Sentenced 09/11/2014 to
five years’ probation, $100 special assessment, and $145,149 restitution
Judge Gonzalez Rogers scheduled Federico’s sentencing hearing for December 18, 2019. The maximum statutory penalties for a violation of 18 U.S.C. §§ 1341 and 1349 are a maximum prison term of 20 years, a fine of $250,000, 3 years of supervised release, and restitution. 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 Thomas R. Green and Jonathan U. Lee are prosecuting this case with the assistance of Jessica Rodriguez Gonzalez, Tina Rosenbaum, and Noble Hughes. This prosecution is the result of an investigation by the Federal Bureau of Investigation.
Four Defendants Charged in $70 Million Wire Fraud Conspiracy Involving Black Market HIV MedicationsRead the Press Release
SAN FRANCISCO - A federal grand jury returned a superseding indictment charging Edvin Ovasapyan, Hakob Kojoyan, Lorik Papyan, and Stephen Silverman for their respective roles in an alleged scheme to defraud purchasers of prescription drugs, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett.
The multi-count superseding indictment was returned on September 5, 2019, and unsealed September 10, 2019. It alleges Ovasapyan, 41, of Los Angeles; Kojoyan, 27, of Los Angeles; Papyan, 36, of Los Angeles; and Silverman, 77, of Los Angeles, each played a role in a conspiracy to operate a large-scale clearing house to divert drugs, primarily those used in the treatment of the Human Immunodeficiency Virus (“HIV”). The superseding indictment describes how Ovasapyan, Kojoyan, and Papyan conspired to acquire large quantities of diverted prescription HIV medications on the black market, and then created false documentation claiming that the medications had been acquired from licensed suppliers. All four defendants allegedly then conspired to sell these diverted prescription drugs to retail pharmacies and wholesalers across the United States. The drugs were sold through a company called Mainspring Distribution, LLC (“Mainspring”), and the defendants provided their customers with false documentation regarding the origin of those drugs. The indictment alleges Silverman, an attorney, was aware of the illicit nature of the operation and assisted his co-defendants by, among other things, agreeing to launder the proceeds of the fraud. Mainspring’s customers were never informed that they were purchasing prescription drugs acquired on the black market. Over the course of the conspiracy, Mainspring earned more than $70,000,000 through sales to its customers. According to the indictment, the defendants also disguised the destination of these funds, routing a portion of Mainspring’s earnings through misleadingly named bank accounts designed to create the appearance of a lawful supply chain.
All four defendants have been charged with one count each of conspiracy to commit wire fraud, in violation of § 18 U.S.C. § 1349; conspiracy to commit money laundering, in violation of § 18 U.S.C. § 1956(h); and conspiracy to engage in the unlawful wholesale distribution of drugs, in violation of 18 U.S. C. § 371.
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 conspiracy to commit wire fraud, the defendants face a maximum sentence of 20 years in prison, a fine of $250,000 (or twice the gross gain or loss), and restitution. If convicted of conspiracy to commit money laundering, the defendants face a maximum sentence of 20 years in prison, a fine of $500,000 (or twice the value of the property involved in the transaction), and restitution. If convicted of conspiracy to engage in the unlawful wholesale distribution of drugs, the defendants face a maximum sentence of 5 years in prison, a fine of $250,000 (or twice the gross gain or loss), and restitution. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant United States Attorneys Andrew F. Dawson and Briggs Matheson are prosecuting the case with the assistance of Patricia Mahoney. The prosecution is the result of an investigation led by the Federal Bureau of Investigation, with the assistance of the Food and Drug Administration.
Alameda Resident Charged with Illegally Importing NarcoticsRead the Press Release
OAKLAND – The U.S. Attorney’s Office charged James Heyward Silcox III today with illegally importing controlled substances, announced United States Attorney David L. Anderson, Homeland Security Investigations Special Agent in Charge Tatum King, Coast Guard Investigative Service Special Agent in Charge Kelly Hoyle, and Customs and Border Protection Director of Field Operations Brian J. Humphrey.
According to the complaint, Silcox, 41, of Alameda, Calif., is alleged to have illegally imported Tramadol from Singapore and Germany. Tramadol is a Schedule IV controlled substance and narcotic.
The complaint describes three illegal shipments of Tramadol to Silcox from overseas. In July 2019, Customs and Border Protection (CBP) officers at the JFK International Air Mail Facility inspected a package from Singapore that contained approximately 865 grams of Tramadol. In August 2019, CBP officers at the San Francisco Air Mail Facility intercepted a package from Germany that contained 650 tablets containing Tramadol. On September 13, 2019, CBP officers in the San Francisco Air Mail Facility intercepted a package from Singapore that contained 458 grams of Tramadol. All three packages were addressed to post office boxes held by Silcox.
The complaint alleges that law enforcement officers removed the Tramadol from the August package and delivered it with substitute material to Silcox’s post office box on September 16, 2019. The same day, Silcox picked up the package.
Silcox, a U.S. Coast Guard Commander, was arrested September 17, 2019, at Coast Guard Island, in Alameda. He made his initial appearance in federal court in San Francisco this morning and was released on a personal recognizance bond. Silcox’s next scheduled appearance is at 10:30 a.m. on September 26, 2019, for identification of counsel and a preliminary hearing before the Honorable Kandis A. Westmore, U.S. Magistrate Judge.
A complaint merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces a maximum sentence of 5 years in prison, and a fine of $250,000, for each violation of 21 U.S.C. § 952(a). However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Sarah E. Griswold is prosecuting the case with the assistance of Elise Etter. The prosecution is the result of an investigation by the Homeland Security Investigations; the High Intensity Drug Trafficking Area-Transnational Narcotics Team (HIDTA-TNT); the U.S. Postal Inspection Service; the Department of Homeland Security Office of Inspector General; and the Coast Guard Investigation Service. The prosecution is part of the Organized Crime Drug Enforcement Task Force (OCDETF) National Heroin Initiative to combat the opioid crisis.
Korean National Pleads Guilty to East Bay-Based Foreign Exchange Trading ScamRead the Press Release
OAKLAND – Jin K. Chung pleaded guilty in federal court in Oakland to money laundering, 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 Jeffrey S. White, U.S. District Judge.
According to his plea agreement, Chung, 56, of Seoul, Korea, admitted he laundered money he obtained from a foreign exchange trading scam. Chung admitted that in 2003, he and codefendant Peter Son, 47, of Portland, Ore., started two companies, SNC Asset Management, Inc. and SNC Investments, Inc., both headquartered in Pleasanton, Calif. Chung admitted 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 that the defendants 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. Chung also transferred funds from the accounts to pay purported investment returns and redemptions to investors, to pay sales commissions and other expenses related to the scheme.
By October 2008, the defendants depleted the funds in the companies' accounts and closed both businesses without advance notice to employees or clients. Chung admitted that in the four months before closing the businesses, he transferred more than $630,000 from the businesses into his personal accounts.
In the aggregate, at least 400 victims invested and lost approximately $60,300,000 in the trading scheme during Chung and Son’s operation of SNC Asset Management, Inc. and SNC Investments, Inc.
On July 8, 2019, Chung was charged by information with a single count of engaging in monetary transactions in property derived from specified unlawful activity (money laundering), in violation of 18 U.S.C. § 1957. On Tuesday, September 3, 2019, Chung pleaded guilty to the charge.
Judge White scheduled Chung’s sentencing hearing for November 19, 2019, at 1:00 p.m. Chung faces a maximum statutory penalty of 10 years in prison and a fine of $250,000, or twice the amount of the criminally derived property involved in the transactions. The court also may order a term of supervised release, special assessments, forfeiture, restitution, and deportation. 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.
For his part in the scheme, Son pleaded guilty on April 9, 2010, 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. On July 30, 2010, the Honorable D. Lowell Jensen, then-U.S. District Judge, sentenced Son to a prison term of 180 months.
Assistant U.S. Attorney Jonathan U. Lee is prosecuting the case with the assistance of Jessica Rodriguez Gonzalez. 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.
Cupertino Man Convicted of Embezzling More Than $7.5 Million in Donated FundsRead the Press Release
SAN JOSE - A federal jury convicted Jonathan Chang of four counts of wire fraud and three counts of money laundering, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The verdict follows a four-week trial before the Honorable Edward J. Davila, United States District Judge.
The evidence at trial demonstrated that Jonathan Chang, 63, of Cupertino, Calif., engaged in a scheme to defraud a wealthy donor of money intended to support the Home of Christ 4 Christian Church (HOC4), located in Saratoga, Calif. Chang, who served as an “elder” responsible for managing the finances of the church, furthered his scheme by establishing charitable organizations with names similar to the church. He then directed more than $6 million from the donor to his own organizations rather than to the HOC4. In addition, Chang embezzled approximately $900,000 from HOC4-related bank accounts in his scheme to defraud.
The jury concluded that Chang solicited funds from the wealthy donor for the stated purpose of acquiring a new HOC4 building (church house) and purported missionary work. In response to Chang’s requests, the donor provided $2.25 million in one-time donations, a $3 million loan to acquire the new building, and approximately $1.5 million total in monthly donations. Chang did not use the funds as directed and authorized by the donor. Instead, he commonly used the funds for personal enrichment. For example, Chang used the funds to buy a number of houses in the Bay Area, purchase luxury vehicles, obtain 15 timeshare interests, invest in commercial real estate, and pay for his health insurance and athletic club dues. The evidence also showed that Chang purchased a home in Fremont with the donor’s funds and then leased the house to one of the donor’s companies, thereby collecting rent on a house that was purchased with funds the donor earmarked for religious purposes. Similarly, Chang purchased another home with donor funds that were designated for religious purposes, but ultimately rented the home to one of his children. In total, between 2004 and January 2016, Chang obtained more than $7.5 million in funds from the donor and HOC4.
Chang also concealed the proceeds of his scheme to defraud by committing money laundering. The evidence at trial demonstrated Chang created fraudulent entities to conceal the wire fraud scheme and forwarded the funds to a variety of other bank accounts he controlled before spending the money on personal purchases.
On February 4, 2016, a federal grand jury indicted Chang and his wife, Grace Chang, 60, charging each with one count of conspiracy to commit wire or mail fraud, in violation of 18 U.S.C. § 1349; four counts of wire fraud, in violation of 18 U.S.C. § 1343; one count of conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h); and three counts of money laundering, in violation of 21 U.S.C. § 1956(a). The jury found Jonathan Chang guilty of all the wire fraud and money laundering counts. The jury did not reach a verdict as to the two charged conspiracy counts, nor did the jury reach a verdict as to the counts filed against Grace Chang.
Jonathan Chang faces a maximum sentence of 20 years imprisonment and a fine of $250,000 for each violation of 18 U.S.C. § 1343. He also face a maximum of 20 years imprisonment and fine of $500,000 or twice the value of the laundered funds, whichever is greater, for each violation of 18 U.S.C. § 1956(a)(1)(B). Additional periods of supervised release, fines and restitution may apply. 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.
Jonathan and Grace Chang are scheduled to appear before Judge Davila on September 17, 2019 for a status conference.
Assistant U.S. Attorneys Patrick R. Delahunty and Sarah E. Griswold are prosecuting the case with the assistance of Susan Kreider. The prosecution is the result of an investigation by the FBI.
Child Sex Trafficker Sentenced to over 17 Years in PrisonRead the Press Release
SAN JOSE – Damari William Singleton was sentenced today to 210 months (17.5 years) in prison and ordered to pay restitution to child victims of his sex trafficking scheme, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The sentence was handed down by the Honorable Beth L. Freeman, U.S. District Judge.
On January 22, 2019, Singleton, 29, of Sacramento, pleaded guilty to sex trafficking of children. According to the plea agreement, from December of 2014 thorough early 2016, Singleton, along with various co-conspirators, operated a prostitution business throughout the state of California. Singleton sold the commercial sexual services of underage girls and adult women. Using primarily social media websites, Singleton repeatedly recruited and exploited girls and women from troubled homes with histories of sexual abuse. Singleton arranged for the recruited women and girls to serve as prostitutes for his sex trafficking venture, transporting them throughout the state of California and across state borders to provide sexual services to adult customers. Specifically, Singleton corresponded with potential clients for the girls and women, posted advertisements for their sexual services on “backpage.com,” transported them to and from their prostitution dates, and secured apartments, condominiums, and hotel rooms for use during the prostitution dates. He also provided condoms and lubricant, set rates for specific services, and collected the profits made by the girls and women after their prostitution dates.
As described in the government’s sentencing memorandum, in approximately May of 2019, three months after Singleton pleaded guilty to sex trafficking of children, the government became aware of Singleton’s intention to establish and operate another sex trafficking enterprise. Singleton was in custody and awaiting sentencing in this case. The government began collecting and reviewing Singleton’s jail calls. These calls revealed that from February 2019 to July 2019, Singleton attempted to recruit young female inmates straight from jails throughout California and Nevada to work as prostitutes after they were released. Singleton repeatedly emphasized to his out-of-custody accomplices the importance of picking up the women directly from jail so that they would not have any opportunity to escape his influence. He wanted them “straight from the gates, straight into my house.”
Singleton deliberately targeted young women between the ages of 18 and 25. While in custody, he sent public records requests to several sheriff’s offices and detention facilities throughout California and Nevada, including Fresno County, Placer County, Sacramento County, and Washoe County in Nevada, seeking biographical information on young female inmates, including their photographs, bail amounts, and projected release dates. On the calls, he emphasized that his prime targets were the most vulnerable: foster kids, former drug addicts, and women who had nowhere else to go. Singleton stated that he was “gonna get an empire.”
A federal grand jury indicted Singleton on December 15, 2016, charging him with conspiracy, in violation of 18 U.S.C. § 371; sex trafficking of children, in violation of 18 U.S.C. § 1591; transportation of minors for transportation, in violation of 18 U.S.C. § 2423; and coercion and enticement, in violation of 18 U.S.C. § 2422. On January 22, 2019, Singleton pleaded guilty to the sex trafficking of children charge.
In addition to the prison term and restitution to his child victims, Judge Freeman also ordered Singleton to a seven-year term of supervised release.
Assistant U.S. Attorney Marissa Harris is prosecuting the case with the assistance of Tong Zhang. The prosecution is the result of an investigation by the FBI and the San Jose Police Department with assistance from agencies belonging to the Santa Clara County Human Trafficking Task Force. Several local police agencies including the Santa Clara Police Department and the Sunnyvale Police Department assisted with recovery of the minor victims.
Bay Area’s Largest Home Health Care Agency and 28 Health Care Industry Workers Charged in Patients-For-Cash Kickback SchemeRead the Press Release
SAN FRANCISCO – Federal complaints have been filed against 30 defendants charged in a patients-for-cash kickback scheme, announced United States Attorney David L. Anderson, Federal Bureau of Investigation Special Agent in Charge John F. Bennett, and Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services (HHS-OIG), Steven J. Ryan.
The complaints, unsealed this morning, describe a wide-ranging patients-for-kickback scheme. At the center of the scheme are Amity Home Health Care, the largest home health care provider in the San Francisco Bay Area, and Advent Care, Inc., a provider of hospice care. According to the complaints, all the defendants participated in the scheme whereby Amity, under the leadership of Chief Executive Officer Ridhima “Amanda” Singh, paid kickbacks to marketers, doctors, and other medical professionals in exchange for the certification or referral of patients for home health or hospice services. Also charged are 28 people including doctors, nurses, marketers, a social worker, and additional employees of Amity. According to the complaints, every single defendant charged was recorded by law enforcement officers either offering or accepting, or approving illegal payments for patient referrals.
Title 42, United States Code, Section 1320a-7b, makes it a crime for any person to knowingly solicit, offer, or pay a kickback, bribe, or rebate for furnishing services under a Federal health care program. Because many of the patients were insured by Medicare, a taxpayer-funded insurance plan, the referral of patients through the kickback scheme violated the statute.
“The complaints allege a scheme for doctors, nurses, and other medical care professionals to trade patients for cash,” said U.S. Attorney Anderson. “This is the largest cash-for-patients scheme ever charged criminally in the Northern District of California.”
“The transition to a home health agency should be based on medical and personal needs – not cash payments or thinly disguised referral bribes as alleged in these cases,” said Special Agent in Charge Ryan. “We will continue working with law enforcement partners to guard these vital government health programs as patients and taxpayers deserve better.”
The criminal complaints describe how Amity and some of its employees bribed individuals associated with hospitals, skilled nursing facilities, and doctors’ offices to induce those individuals to send patients to Amity and Advent. Amity and the other defendants often disguised the kickbacks as payroll, phony medical directorships, and, at other times, as “entertainment,” reimbursements,” “gifts”, or “donations.” Further, several of the defendants are doctors and other health care professionals who allegedly received bribes in exchange for making referrals to Amity and Advent and other home health agencies so that the companies could provide and bill for services. In the case of Amity, Singh and her employees allegedly compensated these professionals in cash for each patient referral and for making introductions to physicians, case managers, or other health care professionals who could refer patients.
In addition, some of the defendants are described as “marketers.” Marketers received from Amity and others cash and gifts, such as tickets to Warriors games, in exchange for patient referrals. Marketers had clients that consisted of case managers at hospitals, social workers at skilled nursing facilities, doctors, and office staff at doctors’ offices. Singh allegedly instructed marketers to take clients out to elaborate meals, sporting events, and purchase gifts for individuals willing to provide Amity with patients, mainly Medicare patients. When patient referrals were slow, Singh allegedly directed the marketer to incentivize clients with gifts in an effort to induce them to refer more patients to Amity.
In sum, the following individuals and companies have been changed in the scheme:
Defendant
Role
Age/Residence
Case Number
AMITY HEALTH CARE
Home Health Care Provider
19-71440
ADVENT CARE, INC.
Hospice Care Provider
19-71459
SINGH, AMANDA
CEO of Amity
33, Livermore
19-71430
ADDISON, BRENDA
Amity employee
49, Oakland
19-71431
BHANDARI, BHUPINDER
Doctor
59, Pleasanton
19-71441
DEGUZMAN, MERVINA
Nurse/Case Manager
41, San Jose
19-71447
HICKS, KIMBERLY
Doctor
59, Oakland
19-71451
KABANSKAYA, YELENA
Doctor
39, San Jose
19-71452
MYINT, GERALD
Doctor
68, Union City
19-71448
NGUYEN, TAM
Doctor
44, San Jose
19-71453
POSADA, JUAN
Doctor
58, Cupertino
19-71449
SCZENDZINA, EWELINA
Marketer
42, Gilroy
19-71434
TAYLOR, SCOTT
Doctor
61, Oakland
19-71455
WATSON, HENRY
Doctor
63, Oakland
19-71423
ZHANG, ZHENG
Doctor
62, Saratoga
19-71457
SANTOS, GLENNDA
Marketer
47, Castro Valley
19-71433
MANCUSO, APRIL
Doctor
38, Los Gatos
19-71445
REYNOLDS, KERISIMASI
Doctor
37, Los Gatos
19-71446
CARIAGA, CATHERINE
Nurse/Case Manager
31, Fremont
19-71458
TIRONA, TERENCE
Nurse/Case Manager
33, Hayward
19-71454
DEL ROSARIO, SAL
Case Manager
44, San Jose
19-71456
GAY, ANDRE NICOLAS
Doctor
39, Union City
19-71460
HASAN, MARIAM
Doctor
37, Milpitas
19-71450
ROY, BELINDA
Nurse/Case Manager
59, Fremont
19-71443
SUNO, NICOLE
Marketer
38, San Leandro
19-71421
TEODORO, STELLA
Nurse/Case Manager
37, Union City
19-71444
TACORDA, HILDA
Marketer
40, Hayward
19-71432
PINA, REBECCA
Marketer
38, Redwood City
19-71442
SINGH, VINEETA
Social Worker
42, Hayward
19-71422
PRESCOTT, CAROLINE
Marketing Director
53, San Ramon
19-71420
Each defendant is charged with illegally influencing patient referrals for federally funded health care through payments, in violation of 42 U.S.C. § 1320a-7b(b)(2)(A). In addition, Singh is charged with lying to investigators, in violation of 18 U.S.C. § 1001, and tampering with witnesses in violation of 18 U.S.C. § 1512(b)(3).
The complaints merely allege that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendants face a maximum sentence of 10 years in prison and a maximum $500,000 fine. The corporations are subject to a $1,000,000 for each violation. In addition, Singh faces a maximum statutory penalty of 5 years and a $250,000 fine for the § 1001 charge and a maximum statutory penalty of 20 years and a $250,000 fine for the § 1512 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.
The prosecution is being handled by the Office of the U.S. Attorney, Northern District of California’s new Corporate Fraud Strike Force and is the result of an investigation by the FBI and HHS-OIG.
Jose Inez Garcia-Zarate Remains Under Federal Firearm Charges in the Northern District of CaliforniaRead the Press Release
SAN FRANCISCO – On December 5, 2017, a federal grand jury indicted Jose Inez Garcia-Zarate for being a felon in possession of a firearm and ammunition, and for being an illegally present alien in possession of a firearm and ammunition.
According to the indictment, on July 1, 2015, Garcia-Zarate, a citizen of Mexico who reportedly is 48 years old, possessed a semi-automatic pistol and multiple rounds of ammunition in violation of 18 U.S.C. § 922(g)(1) (felon in possession of a firearm) and 18 U.S.C. § 922(g)(5) (unlawfully present alien in possession of a firearm). As the government alleged in a public filing in this case, on July 1, 2015, Garcia-Zarate was on Pier 14 on the Embarcadero in San Francisco. Also on the pier were 31-year old Kathryn Steinle, her father James Steinle, and Frances “Kaye” Williams, a family friend. The three were sightseeing. At approximately 6:30 p.m., Garcia-Zarate possessed and fired a semi-automatic pistol. The bullet fired by Garcia-Zarate hit Kathryn Steinle in the back and killed her. At the time of the shooting, Garcia-Zarate was a felon, an illegal alien, and was on federal supervised release from a prior conviction in 2011 in the Western District of Texas.
On November 30, 2017, a jury in San Francisco county convicted Garcia-Zarate of being a felon in possession of a firearm, in violation of California state law. On August 30, 2019, the California state Courts of Appeal overturned Garcia-Zarate’s state conviction based on the failure of the state trial court to instruct the jury on the state affirmative defense of momentary possession.
“The state-court ruling has no legal effect on the federal prosecution, which will continue,” stated United States Attorney David Anderson. “A repeatedly deported, previously convicted felon has no right to possess a firearm under federal law, even if California extends him sanctuary.”
An indictment merely alleges that a crime has been committed and Garcia-Zarate, like all defendants, is presumed innocent until proven guilty beyond a reasonable doubt. Garcia-Zarate currently is in federal custody awaiting trial on these charges. If convicted of either violation of 18 U.S.C. § 922(g), Garcia-Zarate faces a maximum statutory penalty of 10 years in prison. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
East Bay Resident Sentenced to Three Years in Prison for Conspiring to File False Tax ReturnsRead the Press Release
OAKLAND – Brandon Jones was sentenced today to 36 months in prison, and ordered to pay $109,394.79 in restitution for conspiracy to file false claims, announced United States Attorney David L. Anderson and Internal Revenue Service, Criminal Investigation (IRS-CI), Special Agent in Charge Kareem Carter. The sentence was handed down by the Honorable Jeffrey S. White, U.S. District Court Judge,
Jones, 44, formerly of Hayward, Calif., pleaded guilty to the charge on June 12, 2019. According to the plea agreement, Jones admitted he conspired to file 94 fraudulent tax returns, each of which sought payment of a tax refund from the IRS. Jones admitted that to file the false returns, he obtained personal identifying information from individuals who were transient, homeless or incarcerated with him. In 2011, Jones was incarcerated at Santa Rita jail and in 2012, Jones was incarcerated at California State Hospital Prison in Patton, Calif.
A federal grand jury indicted Jones on January 19, 2017, charging him with conspiracy to file false claims, in violation of 18 U.S.C. § 286; filing false claims, in violation of 18 U.S.C. § 287; theft of government property, in violation of 18 U.S.C. § 641; and aggravated identity theft, in violation of 18 U.S.C. § 1028A. Jones pleaded guilty to the conspiracy count and the remaining counts were dismissed at sentencing.
In addition to the prison term, Judge White also sentenced the defendant to a three-year period of supervised release. The defendant was remanded to federal custody on April 21, 2017, and will remain in custody to serve the remainder of his sentence.
Assistant U.S. Attorneys Cynthia Stier and Jose Olivera are prosecuting the case. The prosecution is the result of an investigation by the IRS-CI.
Teachers’ Union Treasurer Indicted for Bank Fraud and Stealing Union FundsRead the Press Release
SAN FRANCISCO - A federal grand jury handed down an eight-count felony indictment charging Kenneth Morris with bank fraud and theft of union assets, announced United States Attorney David L. Anderson and U.S. Department of Labor, Office of Labor Management Standards (DOL OLMS) Supervisory Investigator Kenric Michel.
According to the indictment filed August 22, 2019, and unsealed earlier today, Morris, 50, of Alameda, CA, was the treasurer of the American Federation of Teachers Local 2240 (AFT 2240). AFT 2240 represents teachers, counselors, and librarians employed by the Catholic Diocese of San Jose and the Catholic Archdiocese of San Francisco.
As AFT 2240’s treasurer, Morris received the union’s dues checks from the Archdiocese of San Francisco and the Diocese of San Jose. The indictment alleges that instead of depositing the checks into AFT 2240’s bank account, Morris endorsed the checks and deposited them into his own personal bank account under false pretenses. The indictment describes five such deposits, each between $1,000 and $4,000, that Morris is alleged to have made between September 10, 2018, and December 10, 2018. Furthermore, the indictment charges Morris with stealing union property on three additional occasions between November 13, 2017 and January 12, 2018. According to the indictment, the combined value of the additional property stolen amounts to $18,720.75. In sum, Morris is charged with five counts of bank fraud, in violation of 18 U.S.C. § 1344(2), and three counts of theft of union assets, in violation of 29 U.S.C. § 501(c).
Morris made his initial federal court appearance this morning before U.S. Magistrate Judge Elizabeth Laporte. He was arraigned, pleaded not guilty to the charges, and was released on bond. Morris’s next appearance, a status conference before Senior U.S. District Judge Charles Breyer, is scheduled for September 18, 2019.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces maximum terms of imprisonment of 30 years for each bank fraud count and 5 years for each count of theft of union assets. 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.
Special Assistant U.S. Attorney Christopher Vieira is prosecuting the case with the assistance of Kimberly Richardson. This case is brought as a result of an investigation by the DOL OLMS.
German National Charged with Traveling to United States to Engage in Illicit Sexual Conduct with A MinorRead the Press Release
OAKLAND– Adam Soboll has been charged with traveling to the United States with the intent to engage in illicit sexual conduct with a minor, announced United States Attorney David L. Anderson and U.S. Homeland Security Investigations (HSI) San Francisco Special Agent in Charge Tatum King. Soboll was arrested in Brentwood, Calif., on August 25, 2019, and charged by complaint on August 28, 2019.
According to the complaint, Soboll, 31, of Germany, identified himself as a fifth grade teacher in Germany. The complaint alleges Soboll met the then-14-year-old minor online in October 2018, and communicated with the minor from Germany using Snapchat and online gaming platforms, as well as over other messaging applications.
In January 2019, Soboll began discussing the possibility of visiting the minor in Brentwood, Calif. Soboll and the minor discussed where he should stay in the area and the various forms of sexual conduct in which they would engage when he arrived.
On July 31, 2019, Soboll traveled from Europe to the United States. Soboll stayed at a hotel in Brentwood, Calif. Soboll engaged in sexual conduct with the minor at the hotel. On August 25, 2019, police responded to the hotel following a report from the minor’s mother and arrested Soboll.
Soboll is charged with traveling with the intent to engage in illicit sexual conduct, in violation of 18 U.S.C. § 2423(b).
A complaint merely alleges that crimes have been committed, and all defendants, including Soboll, are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces a maximum statutory sentence of 30 years. Further, additional terms of supervised release, fines, and restitution 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.
Defendant made an initial federal court appearance this morning before the Honorable Donna M. Ryu, U.S. Magistrate Judge. Magistrate Judge Ryu ordered the defendant detained pending further proceedings. His next court appearance is scheduled for September 4, 2019, before the Honorable Kandis A. Westmore, U.S. Magistrate Judge, for a detention hearing.
The case is being prosecuted by Assistant U.S. Attorney Samantha Schott. The case is being investigated by HSI, the Contra Costa District Attorney’s Office, and the Brentwood Police Department.
North Carolina Man Sentenced to 15 Years in Prison for Charges Relating to North Bay Armed Home Invasion Robbery SchemeRead the Press Release
SAN FRANCISCO – Jaray Simmons was sentenced today to 15 years in prison, and ordered to pay $20,275.73 in restitution, for his role in a scheme to conduct armed home invasion robberies in Northern California to obtain marijuana for resale on the East Coast, announced United States Attorney David L. Anderson and Federal Bureau of Investigation (FBI) Special Agent in Charge John F. Bennett. The sentence was handed down by the Honorable Edward M. Chen, U.S. District Judge.
Simmons, 29, of Winston-Salem, N.C., pleaded guilty to the charges on May 7, 2019. According to his plea agreement, Simmons was one of eight codefendants who agreed to target houses in northern California he believed contained bulk quantities of marijuana and the cash proceeds of marijuana sales. The eight codefendants agreed to conduct armed home invasion robberies of the targeted homes and to distribute for a profit on the East Coast the marijuana they were able to steal.
In March of 2018, Simmons traveled by car with three codefendants from Winston-Salem to California to carry out the plan. When the four codefendants reached Sacramento, they obtained multiple weapons and one of the codefendants purchased supplies, including jackets, duffel bags, scissors, a vacuum sealer, and vacuum bags. The codefendant purchased these items to package for shipment the marijuana stolen during the home invasion robberies. Meanwhile, four co-defendants traveled from Richmond, Va., to Washington, D.C., and then from Washington by plane to San Francisco. After arriving in Northern California, the four Virginia codefendants obtained a supply of firearms and ammunition.
All eight defendants met in Novato, Calif., on March 12, 2019, and traveled in two cars from Novato to a residential street in Petaluma. The plea agreements provide the following facts regarding the events of the evening:
A codefendant kicked open the front door of the first residence and six of the coconspirators entered. The residence was occupied by a man and a woman who were forced inside the bathroom and bound with duct tape. At least one codefendant threatened to kill the victims if they did not cooperate, at least one codefendant pointed a firearm at the victims to threaten them into providing the location of marijuana and money, and at least one codefendant struck the male victim inside the bathroom in an effort to get him to disclose the location of marijuana and money. The victims explained they did not have any marijuana and that the defendants were in the wrong house.
Six of the defendants then walked to a nearby second house. The group separated into two smaller groups and broke into the second house through both the front door and a side door. A codefendant grabbed a telephone from a woman occupant and threw it on the floor. At least one codefendant questioned the female victim about the location of marijuana and money. The woman was dragged by the hair and locked inside a closet. The woman said there was no marijuana in the house but that she had money in a drawer.
Two codefendants who were outside the second house encountered a neighbor. They brought the neighbor into the second house, pointed a gun at the victim, tied him with an electrical extension cord, and repeatedly struck him while asking where the marijuana and money was located. The male victim repeated that the defendants were in the wrong house.
The defendants heard the police approaching and left the house. The defendants attempted to escape in the two vehicles in which they arrived. The police gave chase. Eventually, all the codefendants were apprehended, some as they abandoned their vehicle, others when they arrived at San Francisco International Airport later in the afternoon of March 12, 2018, and one defendant several days later.
On April 26, 2018, a federal grand jury indicted Simmons and seven codefendants, charging all with conspiracy to commit robbery affecting interstate commerce, in violation of 18 U.S.C. § 1951(a); conspiracy to possess with intent to distribute marijuana, in violation of 21 U.S.C. § 846; two counts of attempted robbery affecting interstate commerce, in violation of 18 U.S.C. § 1951(a) and 2; and possession or use of a firearm during and in relation to and in furtherance of a crime of violence and a drug trafficking crime, in violation of 18 U.S.C. § 924(c)(1)(A)(i) and 2. Simmons pleaded guilty to both conspiracy charges and to the firearm possession charge.
In addition to the prison term, Judge Chen sentenced the defendant to a three-year period of supervised release and ordered that Simmons pay restitution of $20,275.73. Simmons has been in custody since his arrest on March 12, 2018, and will begin serving his sentence immediately.
Simmons is the second defendant to be sentenced in connection with the conspiracies. Other defendants who have pleaded guilty for their role in the scheme include the following:
Defendant
Age/Residence
Pleaded guilty (date)
Status
Siddiq Abdullah
22/Richmond, VA
May 7, 2019
Sentenced on
August 21, 2019 to 84 months in prison
Nakia Jones
23/Richmond, VA
May 7, 2019
To be sentenced September 11, 2019
Melvin Corbin
20/Richmond, VA
May 9, 2019
To be sentenced September 4, 2019
Ledarrell Crockett
29/Winston-Salem, NC
May 29, 2019
To be sentenced September 25, 2019
Chrishawn Beal
22/Winston-Salem, NC
July 31, 2019
To be sentenced October 23, 2019
Assistant U.S. Attorney Christiaan Highsmith is prosecuting the case with the assistance of Lance Libatique. The prosecution is the result of an investigation by the FBI, the Sonoma County Sheriff’s Department, and the Santa Rosa Police Department. The investigation was conducted and funded in part by the Organized Crime Drug Enforcement Task Force, a multi-agency task force that coordinates long-term narcotics trafficking investigations.
Alleged Fraudster Indicted in $2.7 Million Scam Against BankRead the Press Release
SAN FRANCISCO – A federal grand jury indicted Alan Safahi on charges related to an alleged bank fraud scheme, announced United States Attorney David L. Anderson and Internal Revenue Service, Criminal Investigation (IRS-CI), Special Agent in Charge Kareem Carter.
The indictment alleges that between June 2013 and September 2014, Safahi, 58, of Orinda, Calif., fraudulently entered into an agreement with a bank by which the bank was to be a backer for prepaid charge cards. According to the agreement, Safahi’s company, Card Express, would issue and service the charge cards. Further, the agreement required Card Express to fund 100% of the value of the cards and to turn over to the bank the total amount that the cards were supposed to be worth. Instead of complying with the agreement, Safahi allegedly directed the employees of Card Express to maintain two sets of books. One set of books maintained by Card Express was accessible to the cardholders and accurately reported the total amount for which the prepaid charge card was purchased, as well as the balance after any purchases. The second set of books, however, was provided to the bank and fraudulently stated that the amount the cardholder spent on the day the card was used was the total value of the prepaid card. Thus, Safahi caused the bank to believe the sponsored cards had much lower balances overall than they actually did have.
The indictment further alleges Safahi fraudulently diverted funds that should have been turned over to the bank, i.e., the difference between the value of the cards and the amount Card Express reported to the bank was prepaid for the cards. Safahi allegedly used some of the diverted funds to fund Card Express. Safahi allegedly used other diverted funds to maintain his personal lifestyle, including by purchasing his home. According to the indictment, on or about September 24, 2014, Safahi no longer was able to maintain sufficient cash flow to conceal his fraud and reported the true overall balance of the prepaid charge cards to the bank. After reporting the true balance of the cards to the bank, Safahi promptly shut down Card Express, causing the bank and its customers to lose money. According to the indictment, the overall balance of the charge cards Safahi reported to the banks on September 24, 2014, was approximately $2,735,531.27 larger than previously reported.
In sum, the indictment charges Safahi with bank fraud, in violation of 18 U.S.C. § 1344, four counts of wire fraud, in violation of 18 U.S.C. § 1343, and one count of money laundering, in violation of 18 U.S.C. § 1957. Safahi made his initial appearance today and was released on a $250,000 bond. The defendant was ordered to appear on September 13, 2019, at 11:00 a.m. before the Honorable Susan Illston for a status and trial setting conference.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces a maximum sentence of 30 years in prison and a maximum $1,000,000 fine on each count of bank and wire fraud. If convicted of money laundering, the defendant faces a maximum sentence of 10 years in prison and a maximum $250,000 fine. 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 Robert David Rees is prosecuting this case with the assistance of Kathy Tat. This prosecution is the result of an investigation by the Internal Revenue Service. Criminal Investigations.
Former Uber Self-Driving Car Executive Indicted for Alleged Theft of Trade Secrets from GoogleRead the Press Release
SAN JOSE - A federal grand jury in San Jose has indicted Anthony Scott Levandowski on theft of trade secrets charges, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett.
The indictment was returned on August 15, 2019, and unsealed on August 26, 2019. The indictment alleges Levandowski, 39, of Marin County, was a Google engineer and one of the founding members of the group that worked on Google’s self-driving car project. Levandowski worked on the project from 2009 until he resigned from Google without notice on January 27, 2016.
“All of us have the right to change jobs,” said U.S. Attorney Anderson, “none of us has the right to fill our pockets on the way out the door. Theft is not innovation.”
At the time of his resignation, Levandowski was the lead of Google’s Light Detecting and Ranging (LiDAR) engineering team. The indictment alleges that in the months before his departure, Levandowski downloaded from secure Google repositories numerous engineering, manufacturing, and business files related to Google’s custom LiDAR and self-driving car technology. The files downloaded included circuit board schematics, instructions for installing and testing LiDAR, and an internal tracking document. The indictment also alleges that at the time he took the files, Levandowski was involved with two companies competing with Google in the self-driving space: Tyto LiDAR LLC and 280 Systems, Inc., the latter of which would become Ottomotto. Ottomotto acquired Tyto in May 2016, shortly after Uber Technologies, Inc. agreed to acquire Ottomotto and hire Levandowski.
The indictment charges Levandowski with 33 counts of theft and attempted theft of trade secrets, in violation of 18 U.S.C. § 1832. He is scheduled to be arraigned on the charges on August 27, 2019, at 1:30 p.m. before U.S. Magistrate Judge Nathanael M. Cousins.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces a maximum sentence of 10 years and a fine of $250,000, plus restitution, for each violation of 18 U.S.C. § 1832. 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 prosecution is being handled by the Office of the U.S. Attorney, Northern District of California’s new Corporate Fraud Strike Force and is the result of an investigation by the FBI.
Former Hillsborough Resident Sentenced to 51 Months in Prison for Investment Fraud SchemeRead the Press Release
SAN FRANCISCO—Michael James Frew was sentenced to 51 months in prison on wire fraud, mail fraud, and money laundering charges in connection with a fraudulent real estate investment scheme, announced United States Attorney David L. Anderson, Federal Bureau of Investigation Special Agent in Charge John F. Bennett, and Special Agent in Charge of the Internal Revenue Service, Criminal Investigation (IRS-CI), Kareem Carter. The sentence was handed down by the Honorable Vince Chhabria, U.S. District Judge, and included 3 years of supervised release to follow imprisonment, $500 in special assessments, and restitution in an amount to be determined.
According to the plea agreement, Frew, 70, formerly of Hillsborough, Calif., admitted that between 2010 and March of 2014, he solicited investments from numerous individuals on the false premise that he would invest their money in real estate. Frew sometimes claimed the real estate was in foreign countries and usually explained that the areas in which he would invest recently had been struck by a natural disaster. In truth, Frew did not invest his victims’ money in real estate. Instead, he used the money to speculate in the stock market, to make expenditures for personal expenses, and to repay other victim “investors.” Frew admitted that on several occasions he paid some of the money back to investors to make it seem like their investments were legitimate, which lulled his victims into a false sense of security that their money was properly invested. He further admitted he caused losses to his victims of up to $3.5 million.
A federal grand jury indicted Frew on July 26, 2018, charging him with two counts each of wire fraud, in violation of 18 U.S.C. § 1343; mail fraud, in violation of 18 U.S.C. § 1341; and money laundering, in violation of 18 U.S.C. § 1957. Frew pleaded guilty to all the charges except one count of mail fraud. Judge Chhabria dismissed the remaining charge at sentencing. Judge Chhabria scheduled a hearing to determine issues regarding restitution for October 16, 2019, at 1:30 p.m.
Assistant U.S. Attorney Robert David Rees is prosecuting the case with assistance from Kathy Tat. The prosecution is the result of an investigation by the Federal Bureau of Investigation and the IRS-CI.
San Francisco Man Sentenced to More Than Five Years in Prison for Assaulting A U.S. Postal Worker and Possessing Ammunition as A Convicted FelonRead the Press Release
SAN FRANCISCO – Herman Murillo was sentenced today to 63 months in prison for assaulting a U.S. Postal Service (USPS) letter carrier and illegally possessing ammunition as a convicted felon, 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 Maxine M. Chesney, Senior U.S. District Judge.
Murillo, 35, of San Francisco, pleaded guilty to the charges on April 24, 2019. According to his plea agreement, Murillo admitted that on January 14, 2019, he approached a USPS letter carrier delivering mail in his neighborhood, pulled out a 9mm semiautomatic pistol loaded with six rounds of Wolf 9mm ammunition, and pointed it directly at the letter carrier.
A federal grand jury indicted Murillo on March 19, 2019, charging him with one count of being a felon in possession of ammunition, in violation of 18 U.S.C. § 922(g)(1), and one count of assaulting a federal employee, in violation of 18 U.S.C. § 111(b). Murillo pleaded guilty to both counts.
Judge Chesney also sentenced the defendant to a three-year period of supervised release to begin at the conclusion of his prison term.
Assistant U.S. Attorney Briggs Matheson is prosecuting the case with the assistance of Margoth Turcios. The prosecution is the result of an investigation by the ATF and the San Francisco Police Department.
San Francisco Regional Center Owner Charged in $110 Million Fraud SchemeRead the Press Release
OAKLAND - A federal grand jury in Oakland indicted Thomas Henderson, Kexing Hu (a/k/a Peter Hu), and Cooper Lee on charges of conspiracy and wire fraud for their respective roles in a scheme to defraud investors in a jobs creation program administered by the United States Citizenship and Immigration Service (USCIS), announced United States Attorney David L. Anderson; U.S. Department of State’s Diplomatic Security Service (DSS) Special Agent in Charge Matthew Perlman; U.S. Homeland Security Investigations (HSI) San Francisco Special Agent in Charge Tatum King; and Federal Bureau of Investigation Special Agent in Charge John F. Bennett.
The multi-count indictment, unsealed today, alleges that Henderson, 70, of Oakland; Hu, 40, of Ningbo, China; and Lee, 42, formerly of Oakland, conspired to misappropriate investor funds, to lie to foreign investors about the use of their funds, and to make false statements to USCIS in connection with the Employment-Based Immigration, Fifth Preference Category Program, referred to as the EB-5 visa program. The indictment also alleges that Henderson fraudulently abused the EB-5 visa program and jeopardized the creation of over 2,000 jobs in Oakland and surrounding areas.
According to the indictment, Henderson was the founder and owner of the San Francisco Regional Center, LLC (SFRC), which he used to solicit investments from foreign investors through the EB-5 visa program. From 2011 to 2017, Henderson and Hu raised more than $110 million from more than 200 foreign investors, with each of the investors believing they were paying capital to fund one of seven EB-5 businesses sponsored by SFRC. Henderson, assisted by Hu and Lee, allegedly improperly diverted funds raised for one business and used them for other purposes. The indictment also alleges that Henderson diverted more than $17 million of $21 million raised for one of the projects and spent it in part on earlier money-losing projects. Henderson also allegedly made false statements and submitted false documents to the USCIS, falsely stating investor funds would be used for the start-up and operation of the EB-5 projects described in business plans.
“The Diplomatic Security Service is committed to protecting the integrity of all U.S. visas,” said Special Agent in Charge Matthew Perlman of the DSS San Francisco Field Office. “Together, with our law enforcement and prosecutorial partners, DSS was able to stop prominent local businessmen from further exploiting the U.S. visa process, and bilking foreign investors for illegal profit.”
"The FBI is committed to assisting our local partners in protecting the integrity of our visa processes," said FBI San Francisco Special Agent in Charge John F. Bennett. "Businesses seeking to exploit these processes should know that we are vigilant and that we will work to bring them to justice."
“This case serves as a clear warning to all criminals who seek to profit off of the United States’ legal immigration system. We will locate, arrest, and aid in their prosecution in order to recoup any and all illicit gains,” said Tatum King, Special Agent in Charge, Homeland Security Investigations for San Francisco and Northern California. “Besides posing a significant threat to national security and public safety, immigration benefit fraud and related schemes seriously rob immigrants who are deserving of these benefits while deterring investors who genuinely want to assist them.”
USCIS administers the EB-5 program. Under the program, foreign nationals may obtain permanent United States residency, commonly known as a Green Card, by investing in qualifying American businesses and creating jobs for U.S. citizens and residents. To receive a two-year grant of conditional permanent residency status, foreign investors must meet certain requirements for an entry visa, comply with program requirements and make an investment of a minimum of $1 million, or $500,000 if the investment is made in certain areas of high unemployment. After two years, the foreign investor can petition for permanent residency. The granting of permanent legal residency for the foreign investor and immediate family is dependent, in part, on the creation of at least 10 jobs for United States citizens and residents through the business funded by the investment.
In this case, Henderson and Hu are charged with 12 counts of wire fraud, in violation of 18 U.S.C. § 1343, and Lee is charged with six counts of wire fraud. Henderson, Hu, and Lee are charged with conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349, and conspiracy to commit offenses against the United States, in violation of 18 U.S.C. § 371. Henderson is also charged with one count of making a false statement to a government agency, in violation of 18 U.S.C. § 1001(a)(2), and one count of false writings to a government agency, in violation of 18 U.S.C. § 1001(a)(3).
Henderson and Lee were arrested this morning. Henderson was arrested in Oakland, Calif., and made his initial appearance before U.S. Magistrate Judge Donna Ryu. He is scheduled to appear October 1, 2019, before the Honorable Jeffrey S. White, U.S. District Judge for a status conference. Lee was arrested in Laguna Beach, Calif. The date he will appear on the charges in the Northern District of California has not yet been set. Hu has not been arrested.
An indictment merely alleges that crimes have been committed, and all defendants, including Henderson, Hu, and Lee, are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendants face a maximum penalty of 20 years in prison and a $250,000 fine (or twice the gross gain or loss) for each wire fraud count and the conspiracy to commit wire fraud count. The defendants face a maximum of five years in prison for each conspiracy to commit offenses against the United States count and false statements or writings count. Further, additional fines, forfeitures, and restitution 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.
Assistant United States Attorney Lloyd Farnham is prosecuting the case with the assistance of Sarah Lamparelli and Patricia Mahoney. The prosecution is the result of an investigation led by the U.S. Department of State Diplomatic Security Service’s representative to the Document and Benefit Fraud Task Force (DBFTF), overseen by the HSI, with the participation of the Federal Bureau of Investigation. The DBFTF is a multi-agency task force that coordinates investigations into fraudulent immigration documents. U.S. Citizenship and Immigration Service’s Office of Fraud Detection and National Security also assisted with the investigation. Additional assistance was provided by the San Francisco Regional Office of the Securities and Exchange Commission.
Walnut Creek Man Sentenced to More Than Two Years in Prison for Mail Theft Conspiracy Targeting San Francisco Apartment ComplexRead the Press Release
SAN FRANCISCO – Tyler Goforth was sentenced to 27 months in prison and ordered to pay restitution for his role in a conspiracy to commit wire fraud stemming from a mail theft scheme, announced United States Attorney David L. Anderson and United States Postal Inspection Service Inspector in Charge Rafael Nuñez. The Honorable Maxine M. Chesney, U.S. District Judge, handed down the sentence.
Goforth, 35, of Walnut Creek, Calif., pleaded guilty to the charge on May 29, 2019. According to his plea agreement, Goforth admitted that he and his co-defendant, Jesslyn Felix, 35, also of Walnut Creek, traveled repeatedly to the Beacon Apartment Complex, a large apartment building in San Francisco, to steal mail from Beacon residents. The defendants visited the Beacon more than a dozen times between August 2017 and February 2018. Goforth and Felix entered one of the mailrooms at the Beacon, forced open mailboxes, and then stole mail. They then used personal information and documents found in the stolen mail to steal money from Beacon residents, which they spent for personal gain. Specifically, Goforth and Felix activated credit and debit cards in the victims’ names, stole checks and gift cards, accessed bank accounts belonging to Beacon residents, and stole photo identifications which they then used to carry out their scheme to steal money. In total, Goforth and Felix stole mail from more than 80 residents of the Beacon and stole more than $40,000 from them.
A federal grand jury indicted Goforth and Felix on January 15, 2019. The 14-count indictment charged each defendant with one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349; five counts of wire fraud, in violation of 18 U.S.C. §1343; six counts of theft of mail, in violation of 18 U.S.C. §1708; one count of aggravated identity theft, in violation of 18 U.S.C. §1028A; and one count of possession with intent to use or transfer five or more documents or authentication features, in violation of 18 U.S.C. §1028(a)(3). Goforth and Felix both pleaded guilty to the conspiracy charge on May 29, 2019.
In addition to the prison term, Judge Chesney ordered Goforth to serve a three-year period of supervised release to begin at the completion of the prison term. Goforth has been in custody since May 6, 2019.
Judge Chesney scheduled Felix’s sentencing for September 18, 2019. Like Goforth, if Felix complies with the plea agreement, the remaining counts pending against her will be dismissed at sentencing.
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 United States Postal Inspection Service.
Tenderloin Drug Dealer Sentenced to Three Years in PrisonRead the Press Release
SAN FRANCISCO – Luis Villarreal was sentenced to 36 months in federal prison and three years of supervised release for possessing with intent to distribute fentanyl, announced United States Attorney David L. Anderson and Drug Enforcement Administration Special Agent in Charge Chris Nielsen. The sentence was handed down by the Honorable Edward M. Chen, United States District Judge.
Villarreal, 23, of San Francisco, pleaded guilty to the charge on May 8, 2019. According to the plea agreement, Villarreal admitted that on February 25, 2019, he was arrested on an outstanding warrant while outside the Bill Graham Civic Auditorium in the Tenderloin neighborhood of San Francisco. At the time of Villarreal’s arrest, San Francisco Police Department officers found him in possession of 160 individually wrapped baggies of fentanyl, 37 individually wrapped baggies of methamphetamine, 29 individual bindles of heroin, and 25 Zubsolv pills—a controlled substance that generally may not be possessed without a license or prescription. In the plea agreement, Villarreal admitted that he knowingly possessed and intended to distribute all of the recovered narcotics.
On March 21, 2019, a federal grand jury indicted Villarreal, charging him with one count of possession with intent to distribute fentanyl, one count of possession with intent to distribute heroin, and one count of possession with intent to distribute methamphetamine. Villarreal pleaded guilty to the fentanyl charge and the remaining charges were dismissed at sentencing.
Villarreal was taken into federal custody on March 28, 2019, and has remained in custody since that time. He will begin serving the sentence immediately.
Assistant United States Attorney Sloan Heffron is prosecuting the case with the assistance of Kimberly Richardson. The prosecution is the result of an investigation by the DEA and the San Francisco Police Department.
Internal Revenue Service Analyst Pleads Guilty to Making Unauthorized Disclosure of Suspicious Activity ReportsRead the Press Release
SAN FRANCISCO - John C. Fry pleaded guilty to illegally disclosing information from Suspicious Activity Reports (SARs), announced United States Attorney David L. Anderson, Financial Crimes Enforcement Network (FinCEN) Director Kenneth A. Blanco, and United States Department of the Treasury, Treasury Inspector General for Tax Administration (TIGTA), Special Agent in Charge Rod Ammari. The plea agreement was accepted by the Honorable Edward M. Chen, United States District Judge.
In May of 2018, Fry, 54, of San Francisco, was an Investigative Analyst for the Internal Revenue Services’ law enforcement arm, the Criminal Investigation Division. Fry’s responsibilities included supporting IRS Agents in the Northern District of California area and reviewing SARs for activity that could potentially lead to a criminal investigation. In his position with the IRS, he had access to various law enforcement databases, including the FinCEN database that manages the collection and maintenance of SARs and an analytic software used to integrate investigative data from multiple internal and external data sources. According to his plea agreement, he admitted he knowingly and willingly disclosed confidential SAR information to Michael Avenatti.
"Financial institutions trust that FinCEN will safeguard the sensitive information like SARs they are obligated to file, which is absolutely critical to protecting our national security” said FinCEN Director Blanco. “We take seriously our responsibility to protect this information, and we will not hesitate to investigate and help prosecute anyone who breaks the law by disclosing or misusing protected data.”
“When an IRS employee accesses and misuses government data, and then discloses that data for personal reasons, their selfish actions erode confidence in the IRS and in the institutions that are tasked with protecting this data,” said Special Agent in Charge Ammari. “The Treasury Inspector for Tax Administration, along with our law enforcement partners, are committed to prosecuting these individuals to the fullest extent to deter illegal disclosures in the future.”
According to the plea agreement, Fry admitted that on May 4, 2018, he logged onto the a private government database from his work computer and downloaded five SARs related to Michael Cohen and his company Essential Consultants. Fry further admitted he twice called Michael Avenatti, an attorney based in Newport Beach, Calif., from his personal cell phone. Fry acknowledged that during his phone conversations with Avenatti, he verbally provided information to Michael Avenatti that was contained in the five SARs. Fry further admitted that he used one of his personal email accounts to email screenshots of the SARs to Michael Avenatti.
Further, Fry admitted that on May 7, 2018, he logged on to the FinCEN database from his work computer and conducted additional searches related to Michael Cohen and Essential Consultants. He then called Michael Avenatti from his personal cell phone and verbally provided information contained in the searches. Fry admitted he had no official reason to disclose SAR records related to Cohen or the various companies listed in the SARs.
On February 28, 2019, a federal grand jury indicted Fry with one count of unauthorized disclosure of suspicious activity reports, in violation of 31 U.S.C. § 5322(a); two counts of misuse of a computer, in violation of 18 U.S.C. § 1030(a)(2); and one count of illegal use of a social security number, in violation of 42 U.S.C. § 408(a)(8). Fry pleaded guilty to the unauthorized disclosure count. If Fry complies with the plea agreement, the remaining counts will be dismissed at sentencing.
Judge Chen scheduled Fry’s sentencing for December 18, 2019. Fry faces a maximum sentence of 5 years in prison, and a fine of $250,000, for the violation. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
This case is being prosecuted by the Special Prosecutions Section of the United States Attorney’s Office for the Northern District of California. This case was investigated by FinCEN and TIGTA.
U.S. Attorney Announces “Federal Initiative for the Tenderloin” A New Federal Law Enforcement Partnership to Address Crime in San Francisco’s Tenderloin DistrictRead the Press Release
SAN FRANCISCO – In his first press conference since being sworn in as the U.S. Attorney for the Northern District of California, the Honorable David L. Anderson announced a new federal initiative to address crime in San Francisco’s Tenderloin District. The program, called the Federal Initiative for the Tenderloin, brings together the resources of more than 15 federal law enforcement agencies to combat endemic drug trafficking, firearms offenses, robberies, and other crime in the neighborhood. At today’s press conference, U.S. Attorney Anderson also announced charges against 32 individuals as the first steps in implementing the new program.
Since being sworn in on January 15, 2019, U.S. Attorney Anderson has been the lead law-enforcement officer in the Northern District of California. At today’s press conference, he was flanked by 13 law-enforcement partners including representatives from such agencies as the U.S. Marshal Service; the Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms, and Explosives; and the Federal Bureau of Investigation. The full list of federal participants is below. Each partnering agency has pledged resources to investigate federal crime in the Tenderloin neighborhood, as well as to prioritize investigations and support the resulting prosecutions that follow. For his part, U.S. Attorney Anderson announced that his office will devote 15 Assistant United States Attorneys (“AUSAs”) to the initiative.
The Tenderloin neighborhood encompasses about 50 square blocks of downtown San Francisco. Generally, it is bounded on the north by Geary Street, on the east by Powell Street, on the south by Mission Street, and on the west by Van Ness Avenue. U.S. Attorney Anderson described the Tenderloin as ethnically, socially, and racially diverse; relatively more affordable than other neighborhoods in San Francisco; and having one of the highest concentrations of school-aged children in San Francisco according to published reports. These attributes, argued U.S. Attorney Anderson, make for a wonderful neighborhood being “smothered by lawlessness.” “Innocent residents, commuters, tourists, and persons with business in one of the four major federal buildings in the Tenderloin should not be required to run a gauntlet of crime,” said U.S. Attorney Anderson.
During the press conference, U.S. Attorney Anderson also described some of the parameters of the initiative. The initiative will prioritize federal charges for criminal misconduct with a nexus to the Tenderloin including drug trafficking, firearms offenses, escape, Hobbs Act robberies, false passports and visas, postal crimes, crimes on federal land, human trafficking, identity theft, and benefits fraud. The initiative will not be directed against innocent homelessness. The initiative will not be focused on drug use or possession without distribution. The initiative will persist for a minimum of one year.
“The Tenderloin neighborhood deserves the benefits of the rule of law every bit as much as other neighborhoods in this city.” U.S. Attorney Anderson said.
U.S. Attorney Anderson also announced the existence of a number of law enforcement actions that already have taken place in connection with his plan. The cases include the following:
Case Name
Case Number
U.S. v. Eduar Ramos et al.
19-CR-0305 RS
U.S. v. Francisco Padilla
19-CR-0306 WHO
U.S. v. Carlos Vargas
19-CR-0360 CRB
U.S. v. Jose Vasquez Arteaga et al.
19-CR-0287 CRB
U.S. v. Julio Viera-Chirinos
19-mj-71156
U.S. v. Eduardo Alfonso Viera-Chirinos et al.
19-mj-71145
U.S. v. Andy Reanos-Moreno et al.
19-mj-71162
U.S. v. Moyses Raudales
19-mj-71171
U.S. v. Henry Jovany Sevilla Sevilla
19-mj-71192
U.S. v. Jose Diaz
19-mj-71169
Separate press releases for these cases can be found here:
- Thirteen Defendants Charged In Cross-Bay Drug Trafficking Conspiracy
- Nine Defendants Charged In International Drug Trafficking Conspiracy
“Today,” U.S. Attorney Anderson announced, “we announce the unsealing of ten cases. So far, there have been 32 individuals charged with more to come. While making no promises about the number or types of cases to be brought or the specific outcomes to be achieved, I can say that we intend to devote substantial federal resources over an extended period of time toward this initiative and the neighborhood that it will serve.”
PARTICIPANT REPRESENTATIVES
David L. Anderson, U.S. Attorney for the Northern District of California
Chris Nielsen, Special Agent in Charge, U.S. Drug Enforcement Administration
Jay Bieber, Chief Deputy U.S. Marshal
Jennifer Cicolani, Assistant Special Agent in Charge, U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives
Scott Schelble, Assistant Special Agent in Charge, Federal Bureau of Investigation
Tatum King, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations
Timothy McHugh, Deputy Regional Director, Federal Protective Service
Thomas Edwards, Special Agent in Charge, U.S. Secret Service
Mike Sena, Director, Northern California High Intensity Drug Trafficking Area/Northern California Regional Intelligence Center
Kareem Carter, Special Agent In Charge, Oakland Field Office, U.S Internal Revenue Service- Criminal Investigation
Steve Ryan, Special Agent in Charge, U.S. Department of Health and Human Services, Office of the Inspector General
Don Hoang, Special Agent in Charge, U.S. Forest Service
Richard Sheehan, Assistant Inspector in Charge, U.S. Postal Inspection Service
Julie Ryer, Special Agent, U.S. Food and Drug Administration
Garrett Shore, Special Agent, U.S. Social Security Administration, Office of the Inspector General
Thirteen Defendants Charged in Cross-Bay Drug Trafficking ConspiracyRead the Press Release
SAN FRANCISCO – The U.S. Attorney’s Office has charged thirteen defendants with engaging in a conspiracy to distribute controlled substances, announced United States Attorney David L. Anderson and Drug Enforcement Administration (DEA) Special Agent in Charge Chris Nielsen. The charges were made in a complaint filed July 31, 2019, and unsealed today following the arrest of 11 defendants.
The complaint, described by U.S. Attorney Anderson in a press conference today, is one of the first steps in the Federal Initiative for the Tenderloin (FIT). The initiative seeks to reduce crime in the Tenderloin neighborhood of San Francisco and is described here.
The complaint describes a conspiracy involving a large-scale drug-trafficking organization with networks extending across the Bay Area. According to the complaint, from at least January 15, 2019, to July 31, 2019, Andy Reanos-Moreno worked with Karol Erazo-Reanos to rent housing throughout the Easy Bay for persons, including “redistributors,” who were part of the drug-distribution network. Reanos-Moreno, Erazo-Reanos, and Manuel Arteaga allegedly also supplied the redistributors with heroin, methamphetamine, and cocaine. The redistributors, including Allan Josue Funez Osorto, Brayan Martinez, Josue Natanael Perdomo Moreno, Jose Franklin Rodriguez Garcia, Cesar Estrada Cruz, Arnold Cruz Rodriguez, Christian Rodriguez-Valle, Alex Gomez Barrientos, Eric Montoya Marquez, and Kevin Arteaga-Morales, allegedly traveled to the Tenderloin neighborhood to sell drugs, often by carpooling together across the Bay Bridge.
According to the criminal complaint, Reanos-Moreno, along with Arteaga, took drug orders on a nearly daily basis from the individuals living in houses across the East Bay. The persons living in the houses occasionally would negotiate prices and would specify daily the quantities of heroin, cocaine powder, cocaine base, and methamphetamine they wanted to receive. Reanos-Moreno and Arteaga would then deliver these drugs to redistributors who would travel to the Tenderloin neighborhood to sell the drugs, referring to the neighborhood as “Civic Cen.” The complaint describes numerous alleged seizures of heroin, cocaine, fentanyl, and methamphetamine from houses where the redistributors lived as well as numerous seizures of drugs from the redistributors in the Tenderloin, including near several federal buildings.
All defendants are charged with engaging in a conspiracy to distribute controlled substances, in violation of 21 U.S.C. §§ 846 and 841(a)(1) and (b)(1)(C). If convicted, the defendants face up to 20 years’ imprisonment and between 3 years and a lifetime term of supervised release. Further, additional fines, forfeitures, and restitution 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.
Several of the defendants were arrested on Tuesday, August 6, 2019, as part of a criminal enforcement operation.
Assistant U.S. Attorneys Julie Garcia, Sailaja Paidipaty, and Ryan Rezaei are prosecuting the case. The prosecution is the result of an investigation by the DEA, San Francisco Police Department, and Richmond Police Department.
Nine Defendants Charged in International Drug-Trafficking ConspiracyRead the Press Release
SAN FRANCISCO – The U.S. Attorney’s Office has charged nine defendants, many members of the same family, with engaging in a conspiracy to distribute controlled substances, announced United States Attorney David L. Anderson and Drug Enforcement Administration (DEA) Special Agent in Charge Chris Nielsen. The charges were made in a complaint filed July 26, 2019, and unsealed today following the arrest of eight defendants.
The complaint, described by U.S. Attorney Anderson in a press conference today, is one of the first steps in the Federal Initiative for the Tenderloin (FIT). The initiative seeks to reduce crime in the Tenderloin neighborhood of San Francisco and is described here.
The complaint describes a conspiracy involving a large-scale drug trafficking organization a network extending across the Bay Area. According to the complaint, between March 4, 2019, and July 26, 2019, Eduardo Alfonso Viera-Chirinos, a/k/a “Rojo”, worked with his family members Victor Viera-Chirinos, a/k/a “Mojarra”; Jorge Alberto Viera-Chirinos; Jorge Enrique Torres-Viera, a/k/a “Enrique”; and Karen Castro-Torres, a/k/a “Delany Ellieth Cardona Velasquez”, a/k/a “Belanie Elyzabeth Artiaga”, to obtain drugs. The defendants brought the drugs from Mexico through Los Angeles to the Bay Area. The defendants then repackaged the drugs for redistribution both in the Bay Area and in Seattle. The complaint also describes the execution of search warrants in June 2018 by the Richmond and San Francisco Police Departments and how Jorge Alberto Viera-Chirinos thereafter remained in the Bay Area to run the family drug-trafficking business while Eduardo Alfonso Viera-Chirinos and his partner, Karen Castro-Torres, moved to Seattle.
Also described in the complaint is how Karen Castro-Torres, Cilder Velasquez, and Jorge Enrique Torres-Viera coordinated housing for individuals who redistributed drugs for the drug-trafficking organization. Drug redistributors, including Gustavo Adolfo Gamez-Velasquez and Luis Almicar Erazo-Centeno, allegedly placed orders for drugs on a regular basis from Cilder Velasquez and Jorge Enrique Torres-Viera. The complaint includes excerpts from calls and text messages intercepted over federally authorized wiretaps. According to the complaint, the Viera family obtained drugs in Los Angeles, packaged them for local redistribution in Livermore, Calif., and then shipped the drugs to the Seattle area. Eduardo Alfonso Viera-Chirinos, speaking with an individual using a Honduras-based area code, also allegedly plotted to murder an individual in Honduras. The complaint also describes a traffic stop in Washington State during which Alexander Gonzalez-Vasquez and Eduardo Alfonso Viera-Chirinos allegedly concealed cocaine and heroin in a hidden compartment inside Gonzalez’s truck.
DEA Special Agent in Charge Chris Nielsen stated, “Street-level drug dealing has, unfortunately, become somewhat 'normalized' in the Tenderloin. As for me and my law enforcement partners, and I suspect most people in this community, we are tired of drug traffickers preying on and profiting from the vulnerable. This case and the Federal Initiative for the Tenderloin is a sustained effort, and we are focused on drug dealers, their sources of supply and anyone else who assists them, while keeping in mind we need to help those suffering from addiction. Our message is simple: we will continue to do our best to prevent these bold criminals from destroying any more lives. There is much work to be done.”
All defendants are charged with engaging in a conspiracy to distribute controlled substances, in violation of 21 U.S.C. §§ 846 and 841(a)(1) and (b)(1)(C). If convicted, defendants face up to 20 years’ imprisonment and between 3 years and a lifetime term of supervised release. Further, additional fines, forfeitures, and restitution 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.
Several of the defendants were arrested on July 26, 2019, as part of a criminal enforcement operation.
Assistant U.S. Attorneys Julie Garcia, Sailaja Paidipaty, and Ryan Rezaei are prosecuting the case. The prosecution is the result of an investigation by the DEA, San Francisco Police Department, and Richmond Police Department.
Tracy Resident Convicted of Visa Fraud and Aggravated Identity TheftRead the Press Release
SAN FRANCISCO – A federal jury convicted Abhijit Prasad of 21 counts of visa fraud and two counts of aggravated identity theft. 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. The verdict was handed down today after a one-week trial before Charles R. Breyer, United States District Judge.
According to the evidence at trial, Prasad, 52, of Tracy, 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. The evidence at trial also 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.
“This verdict sends a strong message: the Diplomatic Security Service is committed to making sure those who commit visa fraud face consequences for their criminal actions,” said Matthew Perlman, Special Agent in Charge of the DSS San Francisco Field Office. “Diplomatic Security’s strong relationship with the U.S. Attorney’s Office and with the Document and Benefit Fraud Task Force continues to be essential in the pursuit of justice.”
“Homeland Security Investigations remains laser focused to conduct document and benefit fraud investigations, arresting and bringing to justice individuals, like Prasad, who seek to undermine and abuse the laws of the United States,” said Tatum King, Special Agent in Charge of Homeland Security Investigations (San Francisco and Northern California). “These types of fraudulent activities pose a severe threat to national security and public safety as it creates vulnerabilities for terrorists and other criminals to exploit. HSI and our law enforcement partners will not tolerate such criminal activities and will hold violators accountable to the fullest extent of the law.”
Judge Breyer scheduled Prasad’s sentencing hearing for October 16, 2019. Prasad faces a maximum statutory penalty of 10 years in prison and a $250,000 fine for the visa fraud. He faces a two-year mandatory prison sentence and a $250,000 fine for the aggravated identity theft counts. Further, additional fines, forfeitures, and restitution 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.
Assistant U.S. Attorneys Audrey B. Hemesath and Michael A. Rodriguez 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.