Northern District of California
Press releases recorded for this federal judicial district.
Ten Alleged Members of Surenos Gang Charged with Murder and Related CrimesRead the Press Release
SAN FRANCISCO- A federal grand jury indicted ten people alleged to be members of a racketeering enterprise described as “the 19th Street/16th Street Surenos” for their respective roles in seven alleged murders, announced Acting United States Attorney Alex G. Tse and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Special Agent in Charge Ryan L. Spradlin. The indictment, filed March 20, 2018, was unsealed today following the arrest of six defendants. A seventh defendant was taken into custody from the Santa Clara County Jail. Three other defendants are currently in the custody of the U.S. Bureau of Prisons, and are expected to make their appearances in court in the coming weeks.
According to the indictment, the 19th Street/16th Street Surenos is a racketeering enterprise made up affiliated members of Surenos gangs with adjoining territory in the Mission District of San Francisco. The Surenos gangs have roots in Southern California and Latin America and recognize the primacy of the Mexican Mafia prison gang. The indictment alleges that the two allied gangs maintain control of turf in areas of San Francisco by engaging in illegal activities such as the sale of narcotics, robberies, and other violent crimes, including murder. The 19th Street/16th Street Surenos also uses violence to enforce its own rules and to attack members of rival gangs, principally members of the Norteno gang. Nine of the defendants are alleged to have been directly involved in at least one murder, and a tenth is alleged to have helped plan a ”hunt” which led to one of the murders.
“The seven murders described in the indictment unsealed this morning refer to events going back for more than a decade,” said Acting U.S. Attorney Tse. “It is a priority of this office to prosecute gangs for the violence that can tear apart our community. This operation is proof that we will use the full power of law enforcement to uphold justice for the victims of violent crime. Successful law enforcement requires that our federal government work closely with our state and local law enforcement partners to eradicate gang violence in our communities. I commend the extraordinary work and coordination that went into executing this phase of the operation to bring these defendants to justice.”
“As the largest investigative arm of the Department of Homeland Security, leveraging its vast array of authorities and global resources, Homeland Security Investigations is well equipped in taking accused murderers, who are part of larger transnational criminal organizations, off the streets when we work closely with local law enforcement agencies,” said Ryan L. Spradlin, Special Agent in Charge of the San Francisco field office. “Of course, I would be remiss if I didn’t recognize the countless hours and unyielding commitment of the men and women of HSI & the United States Attorney’s Office during the course of this long term investigation – but it’s the public who should commend the SFPD for pushing aside misconceptions about our mission and partnering with us in the interest of taking advantage of the critical public safety work HSI does.”
According to the indictment, the crimes alleged therein all are related to the activities of the 19th Street/16th Street Surenos. The defendants allegedly participated in acts of violence to defend their collective territory against rival gangs and to enhance the enterprise’s reputation. Among the acts described in the indictment are the following: participating in “hunting” for, shooting at, and murdering rival gang members and suspected rival gang members; selling drugs—whether crack cocaine, cocaine powder, heroine, or some combination of them—in and outside gang territory; committing assaults and strong arm robberies; carrying firearms and other dangerous weapons; and wearing distinctive tattoos to promote the gang and the defendant’s role as a member.
The age and precise charges against each defendant are set out in the chart below.
Defendant Age/Residence Charges Statute
JONATHAN AGUILAR, a/k/a “Trompo”
31
RICO Conspiracy
18 U.S.C. § 1962(d)
Conspiracy to Commit Murder in Aid of Racketeering
18 U.S.C. § 1959(a)(5)
Murder in Aid of Racketeering (2 counts)
18 U.S.C. §§ 1959(a)(1) and 2
Conspiracy to Commit Assault with a Dangerous Weapon in Aid of Racketeering
18 U.S.C. § 1959(a)(6)
Use/Possession of a Firearm Causing Murder
18 U.S.C. §§ 924(j)(1) and 2
LUIS CID-SALINAS, a/k/a “Lonely,” a/k/a “Lonely Boy”
33
Murder in Aid of Racketeering (2 counts)
18 U.S.C. §§ 1959(a)(1) and 2
Use/Possession of a Firearm Causing Murder (2 counts)
18 U.S.C. §§ 924(j)(1) and 2
JUAN CARLOS GALLARDO, a/k/a “Huero”
29
RICO Conspiracy
18 U.S.C. § 1962(d)
Conspiracy to Commit Murder in Aid of Racketeering
18 U.S.C. § 1959(a)(5)
Conspiracy to Commit
Assault with a Dangerous Weapon in Aid of Racketeering
18 U.S.C. § 1959(a)(6)
Murder in Aid of Racketeering: 1 count, plus add 924(j)(1)
18 U.S.C. §§ 1959(a)(1) and 2
JOSUE GONZALEZ, a/k/a “Ghost,” a/k/a “Fedi”
36
RICO Conspiracy
18 U.S.C. § 1962(d)
Conspiracy to Commit Murder in Aid of Racketeering
18 U.S.C. § 1959(a)(5)
Murder in Aid of Racketeering (2 counts)
18 U.S.C. §§ 1959(a)(1) and 2
Conspiracy to Commit Assault with a Dangerous Weapon in Aid of Racketeering
18 U.S.C. § 1959(a)(6)
Use/Possession of a Firearm Causing Murder
18 U.S.C. §§ 924(j)(1) and 2
ORLANDO HERNANDEZ, a/k/a “Chisto”
35
Murder in Aid of Racketeering
18 U.S.C. §§ 1959(a)(1) and 2
Use/Possession of a Firearm Causing Murder
18 U.S.C. §§ 924(j)(1) and 2
MICHAEL REBOLLEDO, a/k/a “Gallo”
30
RICO Conspiracy
18 U.S.C. § 1962(d)
Conspiracy to Commit Murder in Aid of Racketeering
18 U.S.C. § 1959(a)(5)
Murder in Aid of Racketeering (3 counts)
18 U.S.C. §§ 1959(a)(1) and 2
Conspiracy to Commit Assault with a Dangerous Weapon in Aid of Racketeering
18 U.S.C. § 1959(a)(6)
Use/Possession of a Firearm Causing Murder (2 counts)
18 U.S.C. §§ 924(j)(1) and 2
MARIO REYES, a/k/a “Shy Boy”
38
RICO Conspiracy
18 U.S.C. § 1962(d)
Conspiracy to Commit Murder in Aid of Racketeering
18 U.S.C. § 1959(a)(5)
Conspiracy to Commit Assault with a Dangerous Weapon in Aid of Racketeering
18 U.S.C. § 1959(a)(6)
LUIS ROJAS, a/k/a “Grizz,” a/k/a “Grizzly”
31
RICO Conspiracy
18 U.S.C. § 1962(d)
Conspiracy to Commit Murder in Aid of Racketeering
18 U.S.C. § 1959(a)(5)
Murder in Aid of Racketeering (2 counts)
18 U.S.C. §§ 1959(a)(1) and 2
Conspiracy to Commit Assault with a Dangerous Weapon in Aid of Racketeering
18 U.S.C. § 1959(a)(6)
Use/Possession of a Firearm Causing Murder
18 U.S.C. §§ 924(j)(1) and 2
EDDY URBINA, a/k/a “Rhino”
29
RICO Conspiracy
18 U.S.C. § 1962(d)
Conspiracy to Commit Murder in Aid of Racketeering
18 U.S.C. § 1959(a)(5)
Murder in Aid of Racketeering (2 counts)
18 U.S.C. §§ 1959(a)(1) and 2
Conspiracy to Commit Assault with a Dangerous Weapon in Aid of Racketeering
18 U.S.C. § 1959(a)(6)
Use/Possession of a Firearm Causing Murder
18 U.S.C. §§ 924(j)(1) and 2
WESTON VENEGAS, a/k/a “Cartoon”
30
Murder in Aid of Racketeering
18 U.S.C. §§ 1959(a)(1) and 2
Use/Possession of a Firearm Causing Murder
18 U.S.C. §§ 924(j)(1) and 2
An indictment merely alleges that crimes have been committed, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt. The maximum statutory penalties for the crimes of which the defendants have been accused are as follows:
Charge
Statute
Maximum Statutory Penalty
RICO Conspiracy
18 U.S.C. § 1962(d)
Life imprisonment, $250,000 fine, five years’ supervised release
Conspiracy to Commit Murder in Aid of Racketeering
18 U.S.C. § 1959(a)(5)
10 years’ imprisonment, $250,000 fine, three years’ supervised release
Conspiracy to Commit Assault with a Dangerous Weapon in Aid of Racketeering
18 U.S.C. § 1959(a)(6)
3 years’ imprisonment, $250,000 fine, one year of supervised release
Murder in aid of Racketeering
18 U.S.C. §§ 1959(a)(1) and 2
Death, or mandatory life imprisonment, $250,000 fine, five years’ supervised release
Use/Possession of a Firearm Causing Murder
18 U.S.C. §§ 924(j)(1) and 2
Death, or up to life imprisonment, $250,000 fine, five years’ 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.
Several of the defendants were arrested April 5, 2018, as part of a coordinated criminal enforcement operation. All the defendants except Luis Cid-Salinas, Orlando Carlos Hernandez, and Weston Venegas, appeared before the Honorable Elizabeth D. Laporte, U.S. Magistrate Judge, this morning. Appearances have been tentatively scheduled for April 10, 2018, and April 13, 2018, before U.S. Magistrate Judge Laporte for identification of counsel and other pretrial issues. No appearance has yet been scheduled for Luis Cid-Salinas, Orlando Carlos Hernandez, and Weston Venegas. The case has been assigned to the Honorable Richard Seeborg, U.S. District Judge. No appearances have yet been scheduled before District Judge Seeborg. All defendants remain in federal custody.
Assistant U.S. Attorneys Andrew Scoble and Kimberly Hopkins are prosecuting the case. The prosecution is the result of an investigation by the HSI and the police departments of San Francisco and Richmond.
Saratoga Orthopedic Surgeon Sentenced to A Year in Prison for Providing False Billing Statement to Health Care Benefit ProgramRead the Press Release
SAN JOSE- Gregory Belcher was sentenced today to 12 months and a day in prison for making a false statement related to a health care benefits program, announced Acting United States Attorney Alex G. Tse and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The sentence was handed down by the Honorable Lucy H. Koh, U.S. District Judge, following an eight-week trial in which Belcher and his wife, Dr. Vilasini Ganesh, were convicted of making false statements to a health care benefit program.
On December 15, 2017, Belcher, 56, and his wife, Ganesh, 47, both of Saratoga, Calif., were convicted of crimes related to making misrepresentations related to health care matters. The evidence at trial demonstrated Belcher submitted a false claim in connection with a billing matter related to the physical therapy practice he conducted from the offices of the Campbell Medical Group in Saratoga, Calif. Evidence also demonstrated Ganesh, Belcher’s wife and office partner, submitted false and fraudulent claims to several health care benefit programs for services that she knew were not properly payable. For example, Ganesh included claims for days when a patient had not been seen by the provider. She also submitted claims for patients who had been seen by another physician provider who no longer was affiliated with her practice.
On July 13, 2017, a federal grand jury indicted the defendants, charging them with one count of conspiracy to commit health care fraud, in violation of 18 U.S.C. § 1349; one count of conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h); multiple counts health care fraud, in violation of 18 U.S.C. § 1347 and 2; and making a false statement relating to health care matters, in violation of 18 U.S.C. § 1035. The jury convicted Belcher of one count of making a false statement relating to health care matters and convicted Ganesh of five counts of health care fraud and five counts of making false statements. The jury acquitted the defendants of the remaining counts.
In addition to the prison term, Judge Koh sentenced Belcher to a 3-year term of supervised release. Belcher will begin serving the sentence June 6, 2018.
Judge Koh scheduled Ganesh’s sentencing hearing for April 25, 2018, at 9:15 a.m., in San Jose.
Assistant U.S. Attorneys Patrick Delahunty and Jeff Nedrow are prosecuting the case with the assistance of Susan Kreider and Nina Burney Williams. The prosecution is the result of an investigation by the FBI.
Yevgeniy Nikulin Appears in U.S. Court Following ExtraditionRead the Press Release
SAN FRANCISCO – Yevgeniy Aleksandrovich Nikulin made his initial appearance in federal court today following his extradition from the Czech Republic, announced Acting United States Attorney Alex G. Tse and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. He appeared before Jaqueline Scott Corley, United States Magistrate Judge in San Francisco.
Nikulin, 30, of Moscow, Russia, was charged in a 2016 indictment with illegally accessing computers belonging to LinkedIn, Dropbox, and Formspring, each of which has its headquarters in the San Francisco Bay area. The indictment further alleges that the defendant accessed the computers without authorization and that he obtained information from the computers. According to the indictment, the defendant also caused damage to computers belonging to a LinkedIn employee and to Formspring by transmitting a program, information, code, or command. Nikulin is alleged to have used the credentials of LinkedIn and Formspring employees without their knowledge or authorization in connection with the computer intrusions. The indictment charges that Nikulin engaged in a conspiracy with unnamed co-conspirators to traffic stolen Formspring user credentials.
Nikulin was arrested on October 5, 2016, by Czech Republic law enforcement officials pursuant to an Interpol Red Notice, and has been in Czech custody since that time. The United States submitted an official request to the Czech government for his extradition in November 2016. On March 29, 2018, the Minister of Justice of the Czech Republic ordered Nikulin extradited to the United States. Nikulin was transported to the United States by agents of the Federal Bureau of Investigation.
“Computer hacking is not just a crime, it is a direct threat to the security and privacy of Americans,” Attorney General Jeff Sessions said. “In this case, the defendant, a Russian national, is accused of breaking into the computer system of several important American companies using stolen identities, and potentially gaining access to the personal information of millions of Americans. This is deeply troubling behavior once again emanating from Russia. We will not tolerate criminal cyber-attacks and will make it a priority to investigate and prosecute these crimes, regardless of the country where they originate.
“I want to thank our partners in the Czech Republic for their cooperation in the extradition process, and I also want to thank the FBI, the Department of Justice’s Office of International Affairs, and Assistant U.S. Attorneys Michelle Kane and Matt Parella for their hard work. The Department of Justice will continue our work to defend the safety, property, and privacy of the American people from the threat of foreign hackers.”
“The Department of Justice is committed to investigating and bringing to justice hackers who illegally access computer systems to steal information,” said Acting U.S. Attorney Alex G. Tse. “Hackers cause millions of dollars of damage to computer systems and victimize innocent users. We will use the considerable means at our disposal to find, capture, and bring to justice computer hackers who commit crimes against U.S. computer systems and the people who use and rely on those systems, regardless of where those hackers commence their attacks. The arrest and extradition of Nikulin is the result of effective cooperation between U.S. and our international law enforcement partners to combat computer crime.”
“The FBI will not allow international cyber criminals to operate with impunity,” said FBI Special Agent in Charge John F. Bennett. “Nikulin allegedly targeted three Bay Area companies through cyber-attacks, and will now face prosecution in the United States. This extradition is a success for U.S. law enforcement and our partners overseas.”
Nikulin is charged with three counts of computer intrusion, in violation of 18 U.S.C. § 1030(a)(2)(C); two counts of intentional transmission of information, code, or command causing damage to a protected computer, in violation of 18 U.S.C. § 1030(a)(5)(A); two counts of aggravated identity theft, in violation of 18 U.S.C. § 1028A(a)(1); one count of trafficking in unauthorized access devices, in violation of 18 U.S.C. § 1029(a)(2); and one count of conspiracy, 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, the defendant faces the following maximum penalties:
- 18 U.S.C. § 371 (conspiracy): Five years of imprisonment, $250,000 fine, three years of supervised release, $100 special assessment, forfeiture, and restitution.
- 18 U.S.C. § 1028A(a)(1) (aggravated identity theft): Two-year mandatory minimum sentence of imprisonment to run consecutive to any other sentence and in addition to the sentence for the underlying felony, $250,000 fine, three years of supervised release, $100 special assessment, restitution.
- 18 U.S.C. § 1029(a)(2) and (c)(1)(A)(i) (trafficking in unauthorized access devices): Ten years of imprisonment, $250,000 fine, three of years supervised release, $100 special assessment, forfeiture, and restitution.
- 18 U.S.C. § 1030(a)(2)(C) and (c)(2)(B) (computer intrusion): Five years of imprisonment, $250,000 fine, three years of supervised release, $100 special assessment, forfeiture, and restitution.
- 18 U.S.C. § 1030(a)(5)(A) and (c)(4)(B)(i) (causing damage to a protected computer): Ten years of imprisonment, $250,000 fine, three years of supervised release, $100 special assessment, forfeiture, and restitution.
However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Nikulin pleaded not guilty to the charges. Magistrate Judge Corley scheduled Nikulin’s next appearance for April 4, 2018, for a detention hearing.
Michelle J. Kane and Matt Parrella are the Assistant U.S. Attorneys who are prosecuting the case, with the assistance of Vanessa Quant and Elise Etter. The prosecution is the result of a four-year investigation by the Federal Bureau of Investigation with the assistance of authorities in the Czech Republic and the U.S. Department of Justice’s Criminal Division, Office of International Affairs.
Humboldt County Resident Indicted for Alleged Bank Robberies and Hobbs Act RobberyRead the Press Release
SAN FRANCISCO – A federal grand jury indicted Harwood Francis McCovey for his alleged role in four bank robberies and the armed robbery of a Shell Gas Station in Humboldt County, announced Acting United States Attorney Alex. G. Tse and Federal Bureau of Investigation Special Agent in Charge John F. Bennett.
According to the indictment, in the summer of 2016, McCovey, 33, of Hoopa, Calif., committed four bank robberies and a robbery of a Shell Gas Station. McCovey is alleged to have used a dangerous weapon in the commission of each robbery. The alleged robberies occurred on the following dates and locations:
- July 20, 2016 – Bank in Eureka, CA
- July 27, 2016 – Credit union in Eureka, CA
- July 31, 2016 – Shell Gas Station in McKinleyville, CA
- August 4, 2016 – Credit union in Eureka, CA
- August 12, 2016 – Bank in Fortuna, CA
In sum, McCovey was charged with four counts of armed bank robbery, in violation of 18 U.S.C. § 2113(a) and (d), and one count of robbery affecting interstate commerce (Hobbs Act robbery), in violation of 18 U.S.C. § 1951(a).
An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces a maximum statutory penalty of 25 years in prison for each bank robbery and 20 years in prison for the Hobbs Act robbery charge. Additional fines, forfeitures, restitution, and special assessments also may be imposed. However, any sentence after 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 defendant currently is in state custody and will be transferred to federal custody to appear on these charges. A hearing for defendant’s arraignment has not yet been scheduled.
Assistant U.S. Attorney Randy Leonard is prosecuting the case with the assistance of Marina Ponomarchuk. The prosecution is the result of investigations by the Eureka Police Department, the Fortuna Police Department, and the Humboldt County Sheriff’s Office with support from the Federal Bureau of Investigation’s Eureka Resident Agency.
South Bay Methamphetamine Trafficker Sentenced to Ten Years in PrisonRead the Press Release
SAN JOSE – Jose Jesus Munoz was sentenced today to 120 months in prison for possessing with the intent to distribute methamphetamine announced Acting United States Attorney Alex G. Tse and U.S. Drug Enforcement Administration (DEA) Special Agent in Charge John J. Martin. The sentence was handed down by the Honorable Lucy H. Koh, U.S. District Judge, following the entry of Munoz’s guilty plea to the charge on September 6, 2017.
Munoz, 46, of San Jose, admitted that he sold methamphetamine to persons he later discovered were undercover law enforcement officers. He sold the drugs in several transactions, five of which occurred in September and October of 2013, as well as in January, July, and September of 2014. The amount of methamphetamine sold as a result of the five transactions amounted to 3483.1 grams of methamphetamine in exchange for a total of $57.000. Munoz further admitted that beginning in January 2015, he entered into an agreement with others to distribute and to possess with the intent to distribute 500 grams or more of a substance containing methamphetamine. In sum, Munoz agreed that he conspired to distribute and possess with the intent to distribute 4.5 kilograms or more of actual methamphetamine.
On March 29, 2016, a federal grand jury indicted Munoz and charged him with one count of conspiracy to manufacture, distribute, and possess with intent to distribute methamphetamine, in violation of 21 U.S.C. § 846; six counts of distribution of methamphetamine, in violation of 21 U.S.C. § 841(a)(1); and one count of using a communication facility to commit a felony drug offense, in violation of 21 U.S.C. § 843(b). Pursuant to his plea agreement, Munoz pleaded guilty to the conspiracy charge and the remaining charges were dismissed.
In addition to the prison term, Judge Koh ordered Munoz to serve a five-year period of supervised release.
Assistant U.S. Attorney Jeffrey Backhus is prosecuting the case with the assistance of Laurie Worthen. The prosecution is the result of an investigation by the DEA, the Concord Police Department and the Internal Revenue Service.
South San Francisco Resident Pleads Guilty to Money Transmission and Tax SchemeRead the Press Release
SAN FRANCISCO – Subhash Jay pleaded guilty today to operating an unlicensed money transmitting business and filing a false tax return announced Acting United States Attorney Alex G. Tse and Internal Revenue Service, Criminal Investigation (IRS-CI), Special Agent in Charge Michael T. Batdorf. The plea was accepted by the Honorable Charles R. Breyer, United States District Judge, in San Francisco.
According to the plea agreement, Jay, 59, of South San Francisco admitted to operating a money transmitting business known as Force Services, Inc., without obtaining required state or federal licenses. Jay admitted that, during 2010 through 2014, he caused two domestic bank accounts held in the name of Force Services to receive international wire transfers on behalf of a client. The wire transfers had an aggregate value of at least $4,515,236. Jay forwarded most of those funds to the client, but retained $817,734 as commissions. Jay willfully filed corporate tax returns for Force Services for the years 2010 through 2014, which failed to report the commissions as gross receipts. Jay also willfully filed individual income tax returns for the years 2010 through 2014, which failed to report the commissions as income.
A federal grand jury indicted Jay on April 6, 2017, charging him with one count of operating an unlicensed money transmitting business, in violation of 18 U.S.C. § 1960; ten counts of filing false tax returns, in violation of 26 U.S.C. § 7206(1); one count of making false statements to a government agency, in violation of 18 U.S.C. § 1001(a)(2); and one count of structuring financial transactions to evade reporting requirements, in violation of 31 U.S.C. § 5324(a)(3). Today Jay pleaded guilty to one count of operating an unlicensed money transmitting business, and one count of filing false tax returns. Judge Breyer scheduled Jay’s sentencing hearing for July 18, 2018. Jay faces a maximum sentence of five years in prison and a fine of $250,000 for operating an unlicensed money transmitting business, and three years in prison and a fine of $250,000 for filing false tax returns. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.Assistant United States Attorney Michael G. Pitman is prosecuting the case. The prosecution is the result of an investigation by the IRS-CI.
Oakley Resident Sentenced to 30 Months in Prison for Conspiracy to File False Federal Tax ReturnsRead the Press Release
OAKLAND – Yvonne Palmore was sentenced today to 30 months in prison and ordered to pay $366,269.50 in restitution for conspiring to file false federal tax returns, announced Acting United States Attorney Alex G. Tse and Internal Revenue Service, Criminal Investigation (IRS-CI), Special Agent in Charge Michael T. Batdorf. The sentence was handed down by the Honorable Yvonne Gonzalez Rogers, U.S. District Judge, following the entry of Palmore’s guilty plea to the charge.
Palmore, 53, of Oakley, Calif., pleaded guilty on October 5, 2017, to one count of conspiracy to file false claims. According to her plea agreement, Palmore admitted she was involved in filing 131 false federal income tax returns using the names and identities of individuals without their knowledge or consent. Palmore inserted account depository numbers on the tax returns that directed the IRS to pay refunds into bank accounts that she controlled. Palmore attempted to obtain refunds of $1,238,346. The IRS paid $366,269.50. Some of the depository accounts were linked to pre-paid debit cards that Palmore used to purchase postal money orders that she used for her own personal use.
A federal grand jury indicted Palmore on November 10, 2016, charging her 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. Pursuant to her plea agreement, Palmore pleaded guilty to the conspiracy count and the remaining counts were dismissed.
In addition to the prison term, Judge Gonzalez Rogers also sentenced the defendant to a 3-year period of supervised release. The defendant will begin serving the sentence on June 1, 2018.
Assistant U.S. Attorney Cynthia Stier is prosecuting the case. The prosecution is the result of an investigation by the IRS-CI.
Medical Doctor Pleads Guilty to Unlawful Distribution of OxycodoneRead the Press Release
SAN FRANCISCO –Christopher Owens pleaded guilty in federal court in San Francisco today to unlawfully prescribing oxycodone hydrochloride without a medical purpose, announced Acting United States Attorney Alex G. Tse and U.S. Drug Enforcement Administration (DEA) Acting Special Agent in Charge Jerry Miller. The plea was accepted by the Honorable William Alsup, U.S. District Judge.
According to his open plea application, Owens, 50, of Indianapolis, Ind., was a medical doctor when he prescribed oxycodone hydrochloride, a Schedule II controlled substance, to an individual. Owens acknowledged he prescribed the drugs without a legitimate medical need and outside of the course of medical practice. On July 11, 2017, a federal grand jury indicted Owens charging him with 36 counts of distributing oxycodone without a medical need, in violation of 21 U.S.C. § 841(a)(1) and (b)(1)(C). Owens pleaded guilty to Count 36 of the indictment in open court today, but the court may consider evidence relating to Counts 1 through 35 at sentencing.
Judge Alsup scheduled Owens’s sentencing hearing for July 17, 2018, at 2:00 pm. The maximum statutory penalty for the violation of 21 U.S.C. § 841(a)(1) and (b)(1)(C) is 20 years’ imprisonment and a fine of $1,000,000 plus restitution, if appropriate. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Sheila A.G. Armbrust is prosecuting the case with the assistance of Linda Love. The prosecution is the result of an investigation by the DEA with assistance from the University of California San Francisco Police Department.
East Bay Resident Sentenced to over Four Years in Prison for Wire Fraud, Bank Fraud, and Related Charges in Embezzlement SchemeRead the Press Release
OAKLAND – Celia Nipper, aka Celia Arrand, was sentenced this afternoon to 51 months in prison for committing wire fraud, bank fraud, and filing false tax returns in connection with a scheme to embezzle funds from a real estate technology company, announced Acting United States Attorney Alex G. Tse; Federal Bureau of Investigation (FBI) Special Agent in Charge John F. Bennett; and Internal Revenue Service, Criminal Investigation (IRS-CI), Special Agent in Charge Michael T. Batdorf. The sentence was handed down by the Honorable Haywood S. Gilliam, Jr., U.S. District Judge, following Nipper’s entry of a plea agreement on September 18, 2017.
According to her plea agreement, Nipper, 62, from Discovery Bay, Calif., admitted that while employed as an office manager, she used her position of financial control at the company to redirect funds intended for her employer to accounts that she controlled. Nipper acknowledged that from 2005 to 2011, while she managed her company’s accounts payable and accounts receivable, invoicing, and bill paying, she opened bank accounts in the name of her employer without disclosing their existence to her employer. She then directed customer payments to those accounts and used that money for her own personal gain. Nipper also admitted as part of the plea agreement that she misappropriated funds from her employer’s legitimate corporate bank accounts and used money belonging to her employer to pay for her own personal expenses and deposited funds into her personal bank accounts. Nipper acknowledged that her scheme defrauded the company of more than $2 million.
In addition, as part of the plea agreement, Nipper admitted that she overstated her income in connection with two mortgage loan applications in June of 2008. Further, Nipper admitted that she filed false U.S. Income Tax Returns for the tax years 2009, 2010, and 2011. In each case, she understated her income, resulting in a failure to report more than $1 million of income and a tax loss to the United States of at least $290,000.
On April 7, 2016, a federal grand jury charged Nipper by Superseding Indictment with three counts of wire fraud, in violation of 18 U.S.C. § 1343; two counts of bank fraud, in violation of 18 U.S.C. § 1344(2); and three counts of filing a false tax return, in violation of 26 U.S.C. § 7206(1). Pursuant to her plea agreement, Nipper pleaded guilty to three counts of wire fraud, two counts of bank fraud and two counts of filing a false tax return.
In addition to the prison term, Judge Gilliam issued a forfeiture money judgment in the amount of $2,029,068 against Nipper and has ordered an April 30, 2018 hearing to determine the amount Nipper will be ordered to pay in restitution. In addition, Judge Gilliam ordered Nipper to serve 36 months of supervised release following her prison term during which time the defendant may not undertake, without prior permission, a position of fiduciary capacity. Nipper currently is released on a bond and has been ordered to self-surrender on or before April 30, 2018, to begin serving her prison term.
Assistant United States Attorney Tom Green is prosecuting this case with the assistance of Noble Hughes and Katie Turner. This prosecution is the result of an investigation by the FBI and the IRS.
Hayward Resident Sentenced to Two Years in Prison for Making Harassing and Obscene Telephone Calls to Law Enforcement Agencies WorldwideRead the Press Release
OAKLAND– Sammy Sultan was sentenced to two years in prison for making hundreds of obscene and harassing phone calls to law enforcement agencies, announced Acting United States Attorney Alex G. Tse and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The Honorable Phyllis J. Hamilton, Chief U.S. District Judge, handed down the sentence yesterday, after Sultan entered a guilty plea on December 13, 2017.
According to his plea agreement, from February 2015 through September 2017, Sultan, 44, of Hayward, Calif., admitted he made hundreds of obscene or harassing phone calls to various law enforcement agencies throughout the United States and abroad, including Canada and Great Britain. He typically requested to speak with a female officer or sergeant. Sultan further admitted that he made a variety of false claims to convince officers that he was a threat to others or himself; he did so, in part, to engage the female officers in protracted conversations. Sultan admitted that he sometimes would claim to have escaped from a mental hospital and that he might harm himself or others if the person on the other end of the line refused to answer his questions. He sometimes claimed he possessed a handgun, an AK-47, or an automatic rifle. At times, he claimed he had a women hostage.
Sultan also admitted he took several steps to conceal his identity. He acknowledged he did not disclose his identity during the calls and refused to inform the persons he called of his identity when asked. Sultan also admitted he knew his calls would result in extensive efforts by law enforcement officers, in the United States and abroad, to trace the calls and try to identify him, his location, and the location and identity of any hostage. In an effort to avoid being detected, he used a variety of different phones and routed calls over the internet using Voice Over Internet Protocol (“VOIP”) technology and “spoofing” services to create “burner” phone numbers so that the actual phone numbers for his phones would be concealed. He also admitted he knew his actions would result in a substantial disruption of public, governmental, and business functions.
On November 21, 2017, Sultan was charged by information with one count of making obscene or harassing telephone calls, in violation of 47 U.S.C. § 223(a)(1)(C), and one count of making threatening interstate communications, in violation of 18 U.S.C. § 875(c). Pursuant to his plea agreement, Sultan pleaded guilty to making obscene or harassing calls and the threat charge was dismissed.
In addition to the prison term, Chief District Judge Hamilton also ordered Sultan to serve a year of supervised release following his incarceration, during which time he has been ordered to enroll in a computer monitoring program and participate in mental health counseling. Sultan has been in custody since September 12, 2017, and will begin serving his sentence immediately.
Assistant U.S. Attorney Thomas Green is prosecuting the case. The prosecution is the result of an investigation by the FBI.
Two Oakland Gang Members Sentenced to 43 Years in Prison for Racketeering Conspiracy and Use of Firearms to Commit MurderRead the Press Release
OAKLAND – Two members of the West Oakland gang, Acorn, were sentenced to 43 years in prison for their respective roles in a criminal racketeering conspiracy, announced Acting United States Attorney Alex G. Tse and Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) Special Agent in Charge Jill Snyder. The Honorable Phyllis J. Hamilton, Chief United States District Judge, sentenced Dionte Houff, a/k/a “Bird,” a/k/a “Birdman,” a/k/a “Tay,” and Houston Nathaniel, III, a/k/a “No No,” a/k/a “Lil No,” yesterday, following guilty pleas entered by the defendants on August 9, 2017. Both defendants admitted being involved with murder, distribution of controlled substances, and use of firearms.
According to his plea agreement, Nathaniel, 28, of Oakland, admitted that he became involved with the Acorn gang in or before 2008. He acknowledged that he agreed to participate in the Acorn gang’s activities to help achieve its objectives, such as shooting members of rival gangs and distributing drugs. Among the crimes Nathaniel committed for Acorn were two shootings that occurred on November 6, 2011, and another shooting on November 28, 2011. Nathaniel admitted that on the morning of November 6, he carried a firearm to a rival gang’s neighborhood and shot a victim. That victim suffered multiple gunshot wounds and has permanent injuries inhibiting his ability to walk. On the evening of the same date, Nathaniel shot a second victim. That victim was riding a bicycle through an area in West Oakland that the Acorn gang claims as its territory. Nathaniel also admitted his involvement in a shooting that occurred on November 28, 2011. On that day, Nathaniel knew a large group of people had gathered to film a music video. Nathaniel and other Acorn members believed that the music video was being filmed in an area where rival gang members lived and that the music video disrespected the Acorn gang. Nathaniel and others drove to the area with firearms and fired into the crowd. As a result, seven people suffered gunshot wounds, including a child who later died from the gunshot wound.
A federal grand jury indicted Nathaniel on July 19, 2012, and a superseding indictment was subsequently filed on June 18, 2015. On August 9, 2017, Nathaniel pleaded guilty to the following charges from that superseding indictment: racketeering conspiracy, in violation of 18 U.S.C. § 1962(d); maiming in aid of racketeering, in violation of 18 U.S.C. § 1959(a)(2); assault with a dangerous weapon in aid of racketeering, in violation of 18U.S.C. § 1959(a)(2); attempted murder in aid of racketeering, in violation of 18 U.S.C. § 1959(a)(5); using a firearm during and in relation to a crime of violence causing death, in violation of 18 U.S.C. § 924(j)(1); and using a firearm during and in relation to a crime of violence, in violation of 18 U.S.C. § 924(c).
Houff, 36, of Oakland, also admitted he was a member of the Acorn gang. Houff admitted he participated in the November 28, 2011 shooting that resulted in the death of a child and gunshot wounds to six others. For his part, Houff admitted he got into a car with other Acorn-affiliated persons and rode to the area where the music video was being filmed. Houff acknowledged he got out of the car, walked toward the group of people, and fired his gun into the group. Houff also admitted he was engaged in narcotics trafficking as part of his support for the Acorn gang.
Houff was named as a defendant in the July 19, 2012 indictment, and the June 18, 2015, superseding indictment. On August 9, 2017, Houff pleaded guilty to the following charges from the superseding indictment: racketeering conspiracy, in violation of 18 U.S.C. § 1962(d); assault with a dangerous weapon in aid of racketeering, in violation of 18U.S.C. § 1959(a)(3); attempted murder in aid of racketeering, in violation of 18 U.S.C. § 1959(a)(5); using a firearm during and in relation to a crime of violence causing death, in violation of 18 U.S.C. § 924(j)(1); and using a firearm during and in relation to a crime of violence, in violation of 18 U.S.C. § 924(c).
In addition to the prison terms, Chief District Judge Hamilton also ordered each of the defendants to serve five years of supervised release.
The case is the result of an investigation by the ATF and the Oakland Police Department (OPD).
Former DOJ Attorney Sentenced to 30 Months in Prison for Obstruction of Justice and Interstate Transportation of Stolen PropertyRead the Press Release
SAN FRANCISCO– Jeffrey Wertkin was sentenced this afternoon to 30 months in prison for obstruction of justice and transportation of stolen property, announced Acting United States Attorney Alex G. Tse; Department of Justice Office of the Inspector General, Fraud Detection Office Special Agent in Charge Lewe Sessions; and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The Honorable Maxine M. Chesney, U.S. District Judge, handed down the sentence after Wertkin pleaded guilty to the charges last November.
“Mr. Wertkin has betrayed the trust placed in him by the Department of Justice, his colleagues, and the American people,” said Acting U.S. Attorney Alex Tse. “Today’s sentence hopefully restores the confidence in public servants who take an oath to serve their government and demonstrates that no one is above the law. Those who run afoul of the rules established to ensure the proper function of government will be prosecuted without fear or favor.”
“Wertkin abused his position for personal gain and violated the nation’s trust. The DOJ-OIG will continue to work tirelessly with its partners at the FBI and the U.S. Attorney’s Offices to ferret out corruption and hold accountable those who engage in theft and obstruction of justice,” stated DOJ-OIG Fraud Detection Office Special Agent in Charge Lewe F. Sessions.
According to his plea agreement, Wertkin, 41, of Washington, D.C., worked for the Civil Fraud Section of the Department of Justice from October 24, 2010, until April 12, 2016. During that time, he worked on qui tam actions pursuant to which the government investigated companies suspected of breaking the law. Federal courts often order qui tam complaints “sealed” and therefore kept from public view until it is appropriate for the complaints to become public. In his plea agreement, Wertkin admitted that during the last month of his employment as a trial attorney with the Department of Justice, he began secretly reviewing and collecting sealed qui tam complaints that were not assigned to him. Further, Wertkin has admitted that after he left the Department of Justice, he used the stolen information improperly to solicit clients that were the subject of the sealed complaints. Wertkin acknowledged that in one instance, he was successful in using the information from a sealed complaint to convince the company that it was the subject of a lawsuit and to retain him as an attorney to represent it in the lawsuit. Wertkin also acknowledged he lied to the Department of Justice in documents he completed during his exit process regarding whether he stole the complaints.
The plea agreement also describes two occasions in which Wertkin attempted to sell information to companies that were the subject of government investigations. On November 30, 2016, Wertkin offered to sell a complaint to the corporation named in the lawsuit. Then, between November 30, 2016, and January 31, 2017, Wertkin engaged in multiple conversations with a representative of the corporation to negotiate the sale of the sealed complaint for $310,000. Similarly, on January 23, 2017, Wertkin contacted a second corporation and offered to mail to the representative a copy of the face sheet of the complaint. Wertkin actually mailed a redacted copy of the face sheet and promised that, for a fee, he would provide the entire complaint.
Wertkin was arrested on January 31, 2017, after traveling from the Washington, D.C. Area to the San Francisco Bay Area with a copy of a sealed complaint. On that day, Wertkin believed he was meeting at a Cupertino hotel with a representative from a company and that he was exchanging the complaint for a duffel bag filled with $310,000. In truth, Wertkin was meeting with an undercover employee of the FBI. Wertkin described the meeting in his sentencing memorandum as follows: “As part of his escapist fantasy, Mr. Wertkin donned a wig and sunglasses and went to a hotel in Sunnyvale with complaint in hand, whereupon he was arrested by the FBI.”
Further, Wertkin admitted that after his arrest, he took steps in an effort to obstruct the ongoing criminal investigation. Specifically, after being released from custody, Wertkin returned to his office, purportedly to retrieve his personal belongings, and removed and destroyed documents from his office that he knew could further incriminate him. Wertkin also acknowledged he “placed two complaints in a used FedEx envelope in an attempt to make it appear that sealed complaints had been accidentally mailed to him by a DOJ employee.” Wertkin acknowledged he took these and additional other steps in an effort to corruptly obstruct the ongoing investigation and proceedings against him.
In sum, on November 1, 2017, Wertkin was charged by information with two counts of obstruction of justice, in violation of 18 U.S.C. § 1505, and one count of interstate transportation of stolen goods, in violation of 18 U.S.C. § 2314. Pursuant to his plea agreement, Wertkin pleaded guilty to all counts.
Assistant U.S. Attorneys Robin L. Harris and William Frentzen are prosecuting the case. The prosecution is the result of an investigation by the FBI and the Department of Justice Office of the Inspector General.
East Bay Resident Pleads Guilty to Wire Fraud in Scheme to Defraud Concert PromotersRead the Press Release
OAKLAND – Quincy Krashna pleaded guilty this afternoon to committing wire fraud as part of a scheme to defraud European concert promoters, announced Acting United States Attorney Alex G. Tse and Federal Bureau of Investigation (FBI) Special Agent in Charge John F. Bennett. The plea was accepted by the Honorable Jeffrey S. White, U.S. District Judge.
According to the plea agreement, Krashna, 49, from Berkeley, Calif., admitted that he misrepresented to concert promoters his connections to the Red Hot Chili Peppers. The victims were interested in promoting Red Hot Chili Peppers concerts in Eastern Europe. Krashna further admitted he told the concert promoters that he would hold in an escrow account a $450,000 down payment to secure the band’s services and that the money would be returned to the promoters if Krashna was unable to secure the band’s services. Krashna admitted in the plea agreement that he created a fraudulent “Escrow Agreement” that had the appearance of being an escrow agreement used by Chase Bank, when in fact the alleged escrow account was a personal bank account that he controlled. The concert promoters wired $450,000 into the fake escrow account after receiving Krashna’s assurances.
Krashna admitted in the plea agreement that he continued to inform the concert promoters that their money was in an escrow account controlled by Chase Bank, when in fact he had transferred the money out of his personal account into other accounts that he controlled. Krashna admitted that he continued to misrepresent the whereabouts of the victims’ money until March 2012.
On January 12, 2017, a federal grand jury indicted Krashna, charging him with seven counts of wire fraud, in violation of 18 U.S.C. § 1343. Pursuant to today’s plea agreement, Krashna pleaded guilty to Count One of the indictment. Krashna also agreed to make restitution to the victims for their losses.
Judge White has scheduled Krashna’s sentencing for July 10, 2018. The maximum statutory penalties for wire fraud are 20 years in prison, a $250,000 fine, and 3 years of supervised release. Additional fines, forfeitures, restitution, and special assessments also may be imposed. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorneys Tom Green and Michelle Kane are prosecuting the case with the assistance of Noble Hughes and Katie Turner. The prosecution is the result of an investigation by the FBI.
Five Members of “Central Divisadero Players” Gang Convicted of Various Racketeering Crimes Including MurderRead the Press Release
SAN FRANCISCO - A federal jury convicted Adrian Gordon (aka “Tit”), Charles Heard (aka “Cheese”), Esau Ferdinand (aka “Sauce”), Monzell Harding, Jr., and Jaquain Young (aka “Loc”) today of racketeering, murder, and conspiracy charges, announced Acting United States Attorney Alex Tse and FBI Special Agent in Charge John F. Bennett. The verdict follows a 14-week trial in which the jury heard evidence about the San Francisco gang referred to as Central Divisadero Players, aka Central Divis Playas, aka CDP.
“This office is 100% committed to eradicating violent gang activity from our community, for the safety of all who live and visit the Bay Area,” said Acting U.S. Attorney Tse. “The evidence produced at the trial in this case makes crystal clear why we must not flinch from pursuing this goal with all necessary resources. I want to express my sincere gratitude to the FBI, the police departments of San Francisco and San Pablo, and the San Francisco DA for their partnership, hard work, and commitment to bring these criminals to justice. I also want to acknowledge the brave victims who came forward during trial despite threats against their safety, and the well-being of their loved ones. Combatting gang violence is a dangerous endeavor, and as a community we must work together and stand tall to defeat the gangs.”
“Today marks a victory in our tireless and collective effort to rid our neighborhoods of violent gangs whose brazen activities pervade our community and threaten the safety of our citizens,” said Special Agent in Charge Bennett. “These convictions send a clear message that we are committed to dismantling dangerous criminal enterprises and will hold their members accountable for their actions.”
Gordon, 29; Heard, 33; Ferdinand, 35; Young, 44; and Harding, 26, were the first five defendants to stand trial for crimes alleged in an eleven-defendant, 22-count second superseding indictment filed on August 14, 2014. The indictment 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. During the trial, the jury heard evidence that the five defendants, all from San Francisco, each played a role in the racketeering conspiracy whose crimes ranged from murder to pimping. The jury concluded that the five defendants were guilty of the following specific crimes:
Defendant
Found Guilty of the Following Charges
Maximum Penalties
All Five Defendants
Racketeering conspiracy
in violation of 18 U.S.C. § 1962(d)
Life in prison and a $250,000 fine
Racketeering, including murder,
in violation of 18 U.S.C. § 1962(d)
Life in prison and a $250,000 fine
Gordon
Attempted racketeering murder of Victim 3 on May 20, 2011,
in violation of 18 U.S.C. § 1959(a)(5)
10 years in prison and a $250,000 fine
Racketeering assault with a dangerous weapon May 20, 2011,
on Victim 3, in violation of 18 U.S.C. § 1959(a)(3)
20 years in prison and a $250,000 fine
Use, carry, brandishing, or discharge of a firearm during a crime of
violence during the May 20, 2011, assault with a deadly weapon
of Victim 3, in violation of 18 U.S.C. § 924(c)
Life in prison with a mandatory minimum of 10 years in prison consecutive to every term of imprisonment for other offenses
Heard
Racketeering murder of Andre Helton on August 14, 2008, in violation of 18 U.S.C. § 1959(a)(1)
Mandatory life in prison and a $250,000 fine
Racketeering murder of Isiah Turner on August 14, 2008, in violation of 18 U.S.C. § 1959(a)(1)
Mandatory life in prison and a $250,000 fine
Use of a firearm in aid of the August 14, 2008, racketeering murders of Andre Helton and Isiah Turner, in violation of 18 U.S.C. § 924(j)(1)
Life in prison and a $250,000 fine
Young
Racketeering murder of Jelvon Helton on November 1, 2010, in violation of 18 U.S.C. § 1959(a)(1)
Mandatory life in prison and a $250,000 fine
Use, carry, brandishing, or discharge of a firearm in connection with November 1, 2010, murder in aid of racketeering of Jelvon Helton, in violation of 18 U.S.C. § 924(c)
Life in prison with a mandatory minimum of 10 years in prison consecutive to every term of imprisonment for other offenses
Use of a firearm in aid of the November 1, 2010, racketeering murder of Jelvon Helton, in violation of 18 U.S.C. § 924(j)(1)
Life in prison and a $250,000 fine
Attempting to entice and persuade an individual to travel for prostitution (from August 9, 2012, to March 11, 2013), in violation of 18 U.S.C. § 2422(a)
20 years in prison and fine of $250,000
Attempting to entice and persuade a minor to engage in prostitution (from
August 9, 2012, to March 11, 2013),
in violation of 18 U.S.C. § 2422(b)
Life in prison (10 years mandatory minimum) and fine of $250,000
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.
As described in the chart above, the jury concluded that Charles Heard murdered Andre Helton and Isiah Turner, that Jaquain Young murdered Jelvon Helton, and that Adrian Gordon attempted to murder another victim. The evidence at trial also demonstrated that the gang intimidated victims, potential victims, and community members through violence and threats of violence.
The defendants all are in custody pending sentencing. Judge Orrick has not yet scheduled a date for sentencing.
The prosecution is the result of joint investigation by the Federal Bureau of Investigation; San Francisco Police Department’s Gang Task Force, Homicide Detail, Robbery Detail, Special Victims Unit, and the Northern, Park, Southern, Central, Taraval, and Bayview Stations; San Francisco District Attorney’s Office; and the San Pablo Police Department.
Monterey Airbus, Inc. Agrees to Ensure Full Accessibility of Airport Shuttle ServiceRead the Press Release
SAN FRANCISCO – Monterey Airbus, Inc. has entered into a settlement agreement with the United States Attorney’s Office to resolve allegations that the Monterey-based company violated Title III of the Americans with Disabilities Act (ADA) by discriminating against customers with disabilities, announced Acting United States Attorney Alex G. Tse. As part of the settlement, Monterey Airbus will take steps to ensure that it provides equivalent service to individuals with disabilities.
Monterey Airbus, a private transportation company with its principal place of business in Monterey, provides airport shuttle service between the Monterey Peninsula, San Francisco International Airport, and San Jose International Airport. Customers may request rides through the company’s on-line reservation system and a Monterey Airbus vehicle stops at pre-determined locations for customers with a reservation. After the U. S. Attorney’s Office conducted an investigation, Monterey Airbus acknowledged that prior to 2017, it did not provide services for passengers who required wheelchair transportation. Monterey Airbus also admitted that from 2005 to 2015 it purchased at least five new 13-passenger vehicles and five new 24-passenger vehicles for use in its services in the San Francisco Bay Area, none of which were readily accessible to and usable by individuals with disabilities, including individuals who use wheelchairs.
“Passengers with disabilities are entitled to equal access to the different airport shuttle services that facilitate travel to and from the Bay Area,” said Acting United States Attorney Tse. “With the agreement being announced today, Monterey Airbus has pledged its commitment to ensure individuals with disabilities receive the same service as other passengers. We acknowledge Monterey Airbus’s cooperation throughout this investigation and are glad that we were able to reach this resolution without litigation.”
As a result of the U.S. Attorney’s Office’s investigation and this settlement, Monterey Airbus will make the following changes:
- Operate sufficient readily accessible vehicles to ensure individuals with disabilities receive equivalent service.
- Permit passengers with disabilities, including individuals who use wheelchairs, to book a Monterey Airbus trip either on-line or by phone.
- Conduct ADA training for employees to include instruction on the ADA requirements for private entities operating a transportation system and Monterey Airbus’s policies and practices regarding accommodation of individuals with disabilities.
Assistant U.S. Attorney Rebecca A. Falk is handling the matter on behalf of the U.S. Attorney’s Office for the Northern District of California.
Three Gang Members Sentenced for Shooting an Oakland Police Officer and A Rival Gang MemberRead the Press Release
OAKLAND – Three members of the “Sem City” street gang in East Oakland were sentenced today for their respective roles in the shooting of an Oakland police officer on January 21, 2013, and, just 28 hours earlier, shooting a rival gang member in a street-corner ambush in the Seminary neighborhood of Oakland, announced Acting United States Attorney Alex G. Tse and FBI Special Agent in Charge John F. Bennett. The Honorable Phyllis J. Hamilton, Chief United States District Judge, sentenced Purvis Ellis (aka “Bot”) to 20 years in prison, Deante Kincaid (aka “Tay-Tay”) to 23 years in prison, and Joseph Pennymon (aka “Junkie”) to 18 years in prison. On September 20, 2017, Judge Hamilton sentenced co-defendant Damien McDaniel to 33 years in prison for his role in the same crimes. Along with the sentence Judge Hamilton imposed upon McDaniel last fall, today’s sentences bring the case of the attempted murder and assault against the police officer to a close.
“Messrs. Ellis, Kincaid, McDaniel, and Pennymon and the Sem City criminal enterprise posed a significant threat to the public,” said Acting U.S. Attorney Tse. “Today’s just sentences assure the public that brazen acts of violence against our communities and the peace officers sworn to protect them will not be tolerated. This office will continue to prosecute violent and dangerous criminals to the fullest extent of the law. I want to thank all of our federal and state law enforcement partners whose cooperation and efforts helped bring these violent criminals to justice.”
The defendants, all from Oakland, pleaded guilty to their respective roles in the crimes. Ellis, 31; Kincaid, 33; Pennymon, 27; and McDaniel, 27, all admitted they were gang members from East Oakland’s Seminary neighborhood, known as “Sem City.” Ellis, Pennymon, and McDaniel admitted they attempted to murder a member of a rival gang found on their gang’s “turf.” The three men converged on the victim who was standing at a bus stop and fired 13 shots, striking the man in the forehead and leg. In addition, Kincaid and McDaniel admitted assaulting an Oakland police officer the next day. The police officer received a tip that the get-away car was located in an apartment complex in East Oakland. When the officer went to investigate the tip, he was attacked by Kincaid and McDaniel. The officer resisted their attack, but Kincaid restrained him, struck the officer in the head, and threatened to kill him. McDaniel shot the officer in the arm when the officer refused to give up his service pistol. The officer sustained injuries to the head and forearm.
A federal grand jury indicted the defendants on December 19, 2013. On April 24, 2017, McDaniel pleaded guilty to racketeering conspiracy, in violation of 18 U.S.C. § 1962(d); attempted murder in aid of racketeering, in violation of 18 U.S.C. § 1959(a)(5) and 2; discharging a firearm in furtherance of a crime of violence, in violation of 18 U.S.C. § 924(c); and assault with a dangerous weapon resulting in serious bodily injury in aid of racketeering, in violation of 18 U.S.C. § 1959(a)(3) and 2. Pennymon and Ellis pleaded guilty to the first three crimes. Pennymon pleaded guilty on August 31, 2017, and Ellis pleaded guilty on September 21, 2017. For his role in the crimes, Kincaid, pleaded guilty on August 31, 2017, to the racketeering conspiracy, assault with a dangerous weapon, and brandishing a firearm charges.
In addition to the prison terms, as part of today’s sentences, Judge Hamilton also sentenced Ellis, Kincaid, and Pennymon to 5-year periods of supervised release to follow the prison terms. The defendants have been in custody since 2013 and will begin serving their sentences immediately.
Assistant U.S. Attorneys Joseph Alioto and Scott Joiner are prosecuting the case, with the assistance of Kevin Costello. The prosecution is the result of an investigation led by the Federal Bureau of Investigation and the Oakland Police Department.
San Francisco Resident Sentenced to Ten Years in Prison for Conspiracy to Distribute Methamphetamine, Firearms Possession and Related ChargesRead the Press Release
SAN FRANCISCO – Vincente Cruz was sentenced today to 120 months in prison for conspiring to distribute and possess with intent to distribute methamphetamine, being a felon in possession of a firearm, and related charges, announced Acting United States Attorney Alex G. Tse and Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) Special Agent in Charge Jill Snyder. The sentence was handed down today by the Honorable Edward M. Chen, United States District Judge.
Cruz, 36, of San Francisco, pleaded guilty on November 15, 2017, to the drug distribution-related and firearms possession-related charges. According to his plea agreement, on September 26, 2016, Cruz possessed and sold more than 55 grams of methamphetamine. Cruz further admitted that on October 25, 2016, he possessed a .22 caliber Ruger pistol as well as methamphetamine that he intended to distribute. Cruz admitted that at the time he possessed the pistol, he was legally disqualified from doing so because of a prior felony conviction. Additionally, Cruz admitted that on October 27, 2016, he sold another 92.9 grams of a substance containing a detectable amount of methamphetamine.
On June 29, 2017, a federal grand jury indicted Cruz and co-defendant Etevati Levi, charging them both with conspiracy to distribute and possess with intent to distribute 50 grams or more of a mixture and substance containing methamphetamine, in violation of 21 U.S.C. §§ 846, 841(a)(1) and (b)(1)(B)(viii), and possession with intent to distribute 50 grams or more of a mixture and substance containing a detectable amount of methamphetamine, in violation of 21 U.S.C. §§ 841(a)(1) and (b)(1)(B)(viii). In addition, Cruz was charged in the indictment with one count of distribution and possession with intent to distribute 50 grams or more of methamphetamine, in violation of 21 U.S.C. § § 841(a)(1) and (b)(1)(A)(viii), and being a felon in possession of a firearm, in violation of 18 U.S.C. § 922(g)(1). Pursuant to his plea agreement, Cruz pleaded guilty to all four counts with which he was charged in the indictment.
In addition to the prison term, Judge Chen also sentenced the defendant to a five-year period of supervised release. Cruz has been in federal custody since entering his guilty plea on November 15, 2017, and will begin serving his sentence immediately.
For his part in the scheme, Levi pleaded guilty on September 27, 2017, to the two charges filed against him in the indictment. On December 13, 2017, Judge Chen sentenced Levi to 60 months in prison and four years of supervised release. Levy is in federal custody and has been serving his sentence since August 23, 2017.
Assistant U.S. Attorney Karen Kreuzkamp is prosecuting the case with the assistance of Tong Zhang. The prosecution is the result of an investigation by the ATF and concludes another case brought as part of Operation Cold Day, an effort spearheaded by the ATF to bring federal resources to bear in support of ongoing state and local efforts to combat gun and drug-related crime.
Norteño Gang Member Sentenced to 17 Years and Six Months in Prison for RICO Conspiracy and Use of FirearmsRead the Press Release
SAN JOSE – Julian Ruiz was sentenced today to 210 months in prison for his role in a racketeering conspiracy and for using or possessing firearms in furtherance of a crime of violence, announced United States Attorney Alex G. Tse and Federal Bureau of Investigation (FBI) Special Agent in Charge John F. Bennett. The sentence was handed down earlier today by the Honorable Lucy H. Koh, U.S. District Judge.
“Mr. Ruiz and the East Las Casitas gang have committed horrible acts of violence against the public,” said Acting U.S. Attorney Tse. “This prosecution and today’s appropriate sentence will hopefully provide solace to the victims, their families, and the Salinas community.”
“This sentencing is a testament to our dedication to get members of violent gangs and criminal organizations off the street and out of our communities," said Special Agent in Charge Bennett of the FBI's San Francisco Division. “Those who facilitate violent acts by racketeering and other means cannot and will not be tolerated.”
On December 6, 2017, Ruiz, 29, of Salinas, pleaded guilty to two counts of racketeering conspiracy; using or possessing a firearm in furtherance of a crime of violence, in violation of 18 U.S.C. § 924(c)(1)(A); and aiding and abetting the use or possession of a firearm in furtherance of a crime of violence, in violation of 18 U.S.C. § 924(c)(1)(A) and 2. According to the plea agreement, Ruiz admitted to being a member of the Norteño street gang clique known as “East Las Casitas” or “ELC” since at least 2006. Along with other Norteño cliques in Salinas, the ELC committed acts of violence for the benefit of the gang including murder, attempted murder, and robbery. Among other acts of violence, members of ELC sought to attack and kill members of rival Sureño gangs, as well as members of other rival gangs.
The racketeering-related attempted murders to which Ruiz pleaded guilty took place over a one-month period in 2009. On September 15, 2009, Ruiz was in a car hunting for Sureños to shoot, and spotted a suspected Sureño on a bicycle in front of an apartment complex. Ruiz used a handgun to fire multiple shots at the suspected Sureño as he fled on foot. A few weeks later, on October 3, 2009, Ruiz participated in the attempted murder of a rival gang member from the Fremont gang. After learning that an ELC hang out was shot into, and suspecting the shooting was done by Fremont gang members, Ruiz agreed to shoot at and attempted to kill additional Fremont gang members. Ruiz went to the home of a Fremont gang member, kicked the front door open, and opened fire at two Fremont gang members inside. Ruiz shot one victim in the stomach and shoulder and the other victim in the left arm.
On October 28, 2015, a grand jury charged Ruiz with one count of racketeering conspiracy, in violation of 18 U.S.C. § 1962(d); one count of conspiracy to commit murder in aid of racketeering, in violation of 18 U.S.C. § 1959(a)(5); one count of conspiracy to commit assault with a dangerous weapon in aid of racketeering, in violation of 18 U.S.C. § 1959(a)(6); and one count of use of firearm in furtherance of a crime of violence, in violation of 18 U.S.C. § 924(c)(1)(A) and 2. Pursuant to his plea agreement, Ruiz pleaded guilty to one of the racketeering charges and the firearms charge. The investigation leading to the indictment was part of the FBI’s crackdown on Norteño gangs in Monterey County.
In addition to the prison term, Judge Koh also sentenced Ruiz to a five-year period of supervised release, to commence after Ruiz completes his prison sentence. Ruiz has been in federal custody since December 1, 2015, and will begin serving his sentence immediately.
Assistant U.S. Attorneys Kimberly Hopkins, Christiaan Highsmith, and Stephen Meyer are prosecuting the case with the assistance of Nina Burney Williams, Adria Trgovich, and Lance Libatique. The prosecution is the result of an investigation by the FBI and Salinas Police Department.
East Bay Cocaine Trafficker Sentenced to More Than Seven Years in PrisonRead the Press Release
OAKLAND – Antonio Avila was sentenced today to seven years and three months in prison for his role in a conspiracy to distribute and possess with intent to distribute cocaine announced Acting United States Attorney Alex G. Tse and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Special Agent in Charge Ryan L. Spradlin. The sentence was handed down by the Honorable Jeffrey S. White, U.S. District Judge.
Avila, 37, of Oakland, pleaded guilty on September 13, 2017. As part of this plea agreement, Avila admitted that on March 31, 2017, he delivered approximately two kilograms of cocaine to an undercover law enforcement officer as part of a previously arranged cocaine deal. Avila drove in a Honda Accord to a pre-arranged location with his co-defendant, Enrique Diaz Santiago, 42, of Oakland, sitting next to him in the front passenger’s seat of the car. Avila brought two kilograms of cocaine, which was stored inside a backpack in the backseat of the car. When Avila and Santiago arrived at the location for the deal, the undercover officer approached the defendants and asked them for the cocaine. Avila asked the undercover officer if he had the money. Shortly thereafter, law enforcement authorities arrested Avila and Santiago, and seized the two kilograms of cocaine from the backpack in the rear of the car.
In a subsequent search of Avila’s apartment, the following items were found: a .380 caliber semi-automatic Ruger handgun, a box of .380 caliber ammunition containing approximately 44 round, approximately one kilogram of cocaine, a digital scale with white residue on it, eight plastic baggies containing a total of 218 grams of methamphetamine, and a money counter. As part of his plea agreement, Avila has acknowledged that all the items belonged to him.
On June 15, 2017, a federal grand jury indicted Avila and Santiago. Both defendants were charged with two counts: (1) conspiracy to distribute and possess with intent to distribute 500 grams or more of cocaine, in violation of 21 U.S.C. §§ 846 and 841(a)(1)(B), and (2) possession with intent to distribute 500 grams or more of cocaine, in violation of 21 U.S.C. §§ 841(a)(1) and 841(b)(1)(B). Both defendants pleaded guilty to the conspiracy count and the substantive possession count was dismissed.
In addition to the prison term, Judge White sentenced Avila to a four-year period of supervised release.
For his role in the scheme, Santiago pleaded guilty to the conspiracy count on September 13, 2017. On January 23, 2017, the Judge White sentenced Santiago to five years in prison and a four-year term of supervised release. Both Avila and Santiago have been in custody since their arrests on March 31, 2017.
Assistant U.S. Attorney Christiaan Highsmith is prosecuting the case with the assistance of Theresa Benitez. The prosecution is the result of an investigation by HSI, the Alameda County Narcotics Task Force, and the California Highway Patrol.
South Bay Resident Convicted of Illegal Dumping in Wetlands and Other Protected WatersRead the Press Release
OAKLAND – Today, a federal jury convicted James Philip Lucero of three counts of violating the Federal Clean Water Act for illegally discharging pollutants into waters of the United States, including wetlands, announced Acting United States Attorney Alex G. Tse, Environmental Protection Agency Special Agent in Charge Jay Green, and Federal Bureau of Investigation Special Agent in Charge John F. Bennett.
Lucero, of Carmel, California, a self-described “dirt broker,” orchestrated the illegal discharge of pollutants into waters of the United States adjacent to Mowry Slough, near the Don Edwards San Francisco Bay National Wildlife Refuge located in Newark, California. As a dirt-broker, Lucero charged a fee to contractors and trucking companies in exchange for providing open space to dump fill material, including construction debris. The defendant caused a minimum of 1000 industrial-sized truckloads of construction debris and fill material to be dumped on private property containing federally-protected wetlands and other waters of the United States. He did so without obtaining permission of the landowner and without applying for or obtaining a permit from the U.S. Army Corps of Engineers or the Environmental Protection Agency.
“Illegal pollution of our wetlands will be prosecuted vigorously by this office,” said Acting U.S. Attorney Tse. “The verdicts returned by the jury today demonstrate that our community will not tolerate illegal dumping.”
On January 31, 2017, a federal grand jury issued a Superseding Indictment charging Lucero with three counts of unpermitted filling of wetlands and tributaries, in violation of 33 U.S.C. §§ 1311, 1319(c)(2)(A), and 1344. Pursuant to today’s verdict, Lucero was convicted of all three counts.
Assistant U.S. Attorneys Philip J. Kearney and Shiao Lee prosecuted the case with the assistance of Alycee Lane and Helen Yee. The prosecution is the result of an investigation by the Environmental Protection Agency’s Criminal Investigation Division, the Federal Bureau of Investigation, the Alameda County District Attorney’s Office, and the Newark Police Department.
Former Southwest Airlines Baggage Handler Pleads Guilty to Violating Airport Security Requirements, Drug Smuggling, and Money LaunderingRead the Press Release
OAKLAND – Former Southwest Airlines baggage handler Keith Ramon Mayfield pleaded guilty in federal court in Oakland today to entering an airport area in violation of security requirements, conspiracy to distribute marijuana, and conspiracy to launder money, announced Acting United States Attorney Alex G. Tse; Federal Bureau of Investigation Special Agent in Charge John F. Bennett; and Internal Revenue Service, Criminal Investigation (IRS-CI), Special Agent in Charge Michael T. Batdorf. The Honorable Phyllis J. Hamilton, Chief United States District Judge, accepted the plea.
In his plea agreement, Mayfield, 37, of Oakland, admitted that he conspired with others to violate airport security requirements for the purpose of narcotics trafficking. Mayfield specifically admitted that on at least 40 occasions from 2013 to 2015 he used his access to the Oakland International Airport as a baggage handler for Southwest Airlines to smuggle luggage containing a total of at least 250 kilograms of marijuana around the Transportation Security Administration (TSA) checkpoint to outbound passengers who had already cleared the TSA security checkpoint. These passengers then flew to their destinations with unscreened luggage containing marijuana that was then sold in destination cities throughout the United States. Mayfield also admitted shipping a total of over 100 kilograms of marijuana via Southwest Cargo to various cities throughout the United States for distribution. Mayfield also admitted that, as a baggage handler for Southwest Airlines, he abused a position of public and private trust in a manner that significantly facilitated the commission and concealment of his crimes. In addition, Mayfield admitted that he conspired to launder money by having co-conspirators make cash deposits of drug trafficking proceeds totaling at least $51,000 at bank branches in Texas and that he subsequently withdrew most of those funds as cash in Northern California.
On May 28, 2015, a federal grand jury indicted Mayfield along with 12 co-defendants. On January 16, 2018, the government filed a superseding information charging Mayfield with one count of conspiracy to distribute, and to possess with intent to distribute, marijuana, in violation of 21 U.S.C. § 846; one count of entering an airport area in violation of security requirements, in violation of 49 U.S.C. §§ 46314(a), (b)(2); and one count of conspiracy to launder money, in violation of 18 U.S.C. § 1956(h). Under his plea agreement, Mayfield pleaded guilty to all three counts.
Chief Judge Hamilton scheduled Mayfield’s sentencing hearing for 2:30 p.m. on June 6, 2018. Defendant will remain free on a $200,000 secured bond pending sentencing.
The maximum statutory penalty for a violation of 49 U.S.C. §§ 46314(a), (b)(2) is ten years’ imprisonment and a fine of $250,000. The maximum statutory penalty for a violation of 21 U.S.C. §§ 846, 841(b)(1)(B)(vii) is 40 years’ imprisonment, a mandatory minimum sentence of five years’ imprisonment, and a fine of $5,000,000. The maximum statutory penalty for a violation of 18 U.S.C. § 1956(h) is 20 years’ imprisonment and a fine of $500,000. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Garth Hire is prosecuting the case with the assistance of Kathleen Turner and Vanessa Quant. The prosecution is the result of an investigation by the FBI, the IRS-CI, and the Alameda County Sheriff’s Office. This case is the product of an extensive investigation by the Organized Crime Drug Enforcement Task Force, a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies.
Former CEO of Sunnyvale-Based Tech Company Pleads Guilty to Insider Trading in His Company’s SecuritiesRead the Press Release
SAN JOSE – The founder and former chief executive officer of a Sunnyvale-based fiber optics equipment maker, Peter C. Chang, pleaded guilty today to insider trading and tender offer fraud, announced Acting United States Attorney Alex G. Tse and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The Honorable Lucy H. Koh, United States District Judge, accepted Chang’s guilty plea earlier today.
Chang, 59, of Los Altos, Calif., was the President, Chief Executive Officer (CEO), and Chair of the Board of Directors of Alliance Fiber Optic Products, Inc. (AFOP), a manufacturer of fiber optic components based in Sunnyvale, Calif. AFOP is publicly traded on the NASDAQ. As part of his guilty plea, Chang admitted he used two brokerage accounts, held in the names of his brother and his wife, to purchase and sell AFOP stock. He further admitted that he had access to material nonpublic information about the company, and that his duty of confidentiality and company policies regarding insider trading prevented him from trading on the information.
Further, as part of his plea agreement, Chang admitted that on October 28, 2015, and February 18, 2016, he sold AFOP stock prior to two public announcements of the company’s earnings. The timing of these sales allowed Chang to avoid losses he would otherwise have incurred when the stock price dropped after the announcements. Chang further admitted that in March 2016, he purchased AFOP stock while he knew material nonpublic information about a potential acquisition of the company by a larger public company. The acquisition of AFOP was publicly announced on April 7, 2016.
Pursuant to today’s plea agreement, Chang pleaded guilty to all counts in a superseding information filed today charging Chang with three counts of securities fraud and insider trading, in violation of in violation of 15 U.S.C. §§ 78j(b) and 78ff and 17 C.F.R. §§ 240.10b-5 and 240.10b5-2, and one count of fraud in connection with a tender offer, in violation of 15 U.S.C. §§ 78n(e) and 78ff and 17 C.F.R. §§ 240.14e-3(a) and 240.14e-3(d).
Judge Koh scheduled Chang’s sentencing for May 30, 2018. Chang faces a maximum statutory penalty for securities fraud and fraud in connection with a tender offer of 20 years in prison and a fine of $5 million, per count. Additional fines, periods of supervised release, and restitution also may be ordered, however, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Lloyd Farnham is prosecuting the case with the assistance of Jeremy Acala and Claudia Hyslop. The prosecution is the result of an investigation by the FBI. Additional assistance was provided by the San Francisco Regional Office of the Securities and Exchange Commission.
Central Valley Drug Dealer Sentenced to More Than Sixteen Years in PrisonRead the Press Release
OAKLAND – Ismael Mendoza Rodriguez was sentenced today to 200 months in prison for conspiracy to distribute and possess with intent to distribute methamphetamine and cocaine, and possession of a firearm in furtherance of drug trafficking, announced Acting United States Attorney Alex G. Tse and U.S. Drug Enforcement Administration (DEA) Special Agent in Charge John J. Martin. The sentence was handed down by the Honorable James Donato, U.S. District Judge.
Mendoza Rodriguez, 37, of Turlock, pleaded guilty to the charges on July 14, 2017. As part of his plea agreement, Mendoza Rodriguez acknowledged that he participated in a conspiracy to traffic methamphetamine and cocaine. Specifically, Mendoza Rodriguez admitted that on four separate occasions in 2015 – March 10, May 1, July 14, and August 17 – he met with an undercover police officer and sold him a total of two pounds of methamphetamine and one-half kilogram of cocaine.
On November 13, 2015, law enforcement authorities executed a search warrant at Mendoza Rodriguez’s home in Turlock. Inside, authorities found approximately ten pounds of methamphetamine underneath the bathroom sink. In the master bedroom, law enforcement found approximately $34,455. Mendoza Rodriguez admitted that the cash represented the proceeds of his drug sales. Agents also found three firearms in the master bedroom: a loaded .22 caliber pistol on a bedside dresser, a .30 caliber rifle in the closet, and a Mossberg 12-gauge shotgun with an obliterated serial number also in the closet. Mendoza Rodriguez admitted that he possessed the .22 pistol in furtherance of drug trafficking. On the floor of the master bedroom, agents found a cooler containing more than 50 grams of methamphetamine. Agents arrested Mendoza Rodriguez while executing the search warrant and he has remained in custody since then.
On November 19, 2015, a federal grand jury indicted Mendoza Rodriguez charging him and twelve co-defendants with conspiracy to distribute and possess with intent to distribute controlled substances, in violation of 21 U.S.C. §§ 846 & 841(a)(1). The indictment also charged Mendoza Rodriguez with possession of a firearm in furtherance of drug trafficking, in violation of 21 U.S.C. § 924(c). Pursuant to his plea agreement, Mendoza Rodriguez pleaded guilty to both charges.
Mendoza Rodriguez’s sentence brings to seven the number of defendants sentenced as part of the conspiracy to distribute and possess with intent to distribute controlled substances. The six other defendants sentenced include the following:
Defendant
Age/
Residence
Charges
Status
Jesus Guadalupe Rojas
32/
Turlock
Distribution of methamphetamine,
21 U.S.C. §§ 841(a)(1)
Sentenced on June 14, 2017, to 24 months in prison and 3 years supervised release.
Jose Armando Mendoza Linares
42/
Turlock
Conspiracy to distribute and possess with intent to distribute methamphetamine,
21 U.S.C. §§ 846 & 841(a)(1)
Sentenced on October 25, 2017, to 60 months in prison and 5 years supervised release.
Gabriel Estrada
41/
Compton
Conspiracy to distribute and possess with intent to distribute cocaine,
21 U.S.C. §§ 846 & 841(a)(1)
Sentenced on December 13, 2017, to 70 months in prison and 3 years supervised release
Vanessa Valdez
31/ Chula Vista
Conspiracy to distribute and possess with intent to distribute methamphetamine and cocaine,
21 U.S.C. §§ 846 & 841(a)(1)
Sentenced on December 13, 2017, to 22 months in prison and 3 years supervised release.
Elias Dominguez
46/
Patterson
Conspiracy to distribute and possess with intent to distribute methamphetamine,
21 U.S.C. §§ 846 & 841(a)(1)
Sentenced on January 24, 2018, to 55 months in prison and 5 years supervised release.
Carlos Martinez
26/
Hayward
Conspiracy to distribute and possess with intent to distribute cocaine,
21 U.S.C. §§ 846 & 841(a)(1)
Sentenced on February 21, 2018, to 30 months in prison and 3 years supervised release.
Assistant U.S. Attorneys Christiaan Highsmith, Sheila Armbrust, Katie Burroughs Medearis, and Gregg Lowder are prosecuting the case with the assistance of Theresa Benitez, Ana Guerra, and Michelle Alter Eck. The prosecution is the result of a investigation by the DEA, the Concord Police Department, and the IRS Criminal Investigations. The investigation was conducted and funded by the Organized Crime Drug Enforcement Task Force, a multi-agency task force that coordinates long-term narcotics trafficking investigations.
San Jose Resident Sentenced to Two Years in Prison for Passport Fraud and Related CrimesRead the Press Release
SAN JOSE – Donald Laurence Jason-White was sentenced to 24 months in prison for passport fraud, mail fraud, and wire fraud, announced Acting United States Attorney Alex G. Tse and Special Agent in Charge Matthew Perlman of the U.S. State Department’s Diplomatic Security Service (DSS) San Francisco Field Office. The sentence was handed down today by the Honorable Beth Labson Freeman.
Jason-White, 80, of San Jose, pleaded guilty on November 21, 2017, to passport fraud, wire fraud, and mail fraud. According to the plea agreement, in approximately 1992, Jason-White obtained a certified copy of a birth certificate that he knew belonged to a deceased person. Between 2005 and 2015, Jason-White used the identity of the deceased person to apply for a United States passport and to apply for and obtain benefits from the Social Security Administration and the Department of Housing and Urban Development (HUD). Jason-White admitted he obtained housing from HUD’s Section 8 program. He also admitted he defrauded the federal government out of more than $250,000 in cash and other benefits.
A federal grand jury indicted Jason-White on May 5, 2016, charging him with passport fraud, aggravated identity theft, social security fraud, making false statements to an agency of the United States, five counts of wire fraud, and six counts of mail fraud. Pursuant to his plea agreement, Jason-White pleaded guilty to one count each of passport fraud, in violation of 18 U.S.C. § 1542; wire fraud, in violation of § 1343; and mail fraud, in violation of 18 U.S.C. § 1341.
In addition to the prison term, Judge Freeman also sentenced the defendant to a five-year period of supervised release and ordered him to pay $274,765.49 in restitution. Jason-White will begin serving his sentence on April 4, 2018.Assistant U.S. Attorney Scott Simeon is prosecuting the case with the assistance of Ryka Barghi. The prosecution is the result of an investigation by the U.S. Department of State’s Diplomatic Security Service and the Office of Inspector General of the Department of Housing and Urban Development and the Office of Inspector General of the Social Security Administration.
Windsor Man Charged with Theft of Government Property and Aggravated Identity Theft in Connection with VA Grant FraudRead the Press Release
OAKLAND – William Michael Andrews made an initial appearance in federal court this morning after a federal grand jury indicted him with theft of government property and aggravated identity theft, announced Acting United States Attorney Alex G. Tse and Department of Veterans Affairs (VA) Office of Inspector General Special Agent in Charge James Wahleithner.
According to the indictment, Andrews, 50, of Windsor, California, is alleged to have used his position as a case-worker at an East Bay non-profit agency to acquire the personal information of homeless veterans to pay his personal expenses. The indictment alleges Andrews used the veterans’ personal information, including their social security numbers, to illegally direct VA grant money to his landlord to pay his own rent, rather than its intended purpose of paying for short-term rental apartments for homeless veterans. In total, Andrews allegedly stole more than $26,000 in VA grant funds. Andrews was charged in the indictment with one count of theft of government property, in violation of 18 U.S.C. § 641, and one count of aggravated identity theft, in violation of 18 U.S.C. § 1028A.
Andrews was arrested in San Francisco and made his initial appearance this morning in federal court before Kandis A. Westmore, U.S. Magistrate Judge, in Oakland. Andrews was released on an unsecured $50,000 bond. Andrews’ next scheduled appearance is at 10:30 AM on March 14, 2018, for an appearance before the Honorable James Donato, U.S. District Judge.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces a maximum statutory sentence of ten years in prison, plus a fine and restitution for the violation of 18 U.S.C. § 641. In addition, the defendant faces a mandatory minimum of two years in prison to be served consecutive to any other prison term imposed as well as a maximum $250,000 if convicted of the 18 U.S.C. § 1028A violation. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Ross Weingarten is prosecuting the case. The prosecution is the result of an investigation by the VA Office of Inspector General, Criminal Investigations Division.
Federal Jury Convicts San Francisco Man of Credit Card Fraud and Identity TheftRead the Press Release
SAN FRANCISCO – Marcus Dieter Felder was convicted of access device fraud and aggravated identity theft, announced Acting United States Attorney Alex G. Tse, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Special Agent in Charge Ryan L. Spradlin, and Secret Service Special Agent in Charge David Murray. The guilty verdict was returned late yesterday following a six-day jury trial before the Honorable Maxine M. Chesney, U.S. District Judge
The jury found that Felder, 51, of San Francisco, had engaged in numerous instances of credit card fraud in San Francisco; Hawaii; Placer County, Calif.; and elsewhere in April 2013, June 2014, and October 2014. With respect to the aggravated identity charge, the jury found that Felder had illegally used personal information associated with another individual who shared his first and last names during and relation to the credit card fraud that he had committed in June 2014.
Evidence at trial showed that Felder used Visa, MasterCard, and American Express credit cards issued to other persons to engage in transactions at high-end or boutique hotels, including the Four Seasons Resort in Maui and several venues in San Francisco including the Fairmont Hotel, the Hotel Nikko, the Hilton Union Square, the Grand Hyatt, and the Hotel Metropolis. The evidence at trial also showed that, among other transactions, the defendant used credit cards issued to other persons to pay for first-class air travel from San Francisco to Maui on United Airlines and to rent an exotic car from Enterprise Rent-A-Car. Felder was arrested on October 30, 2014, at the Thunder Valley Casino Resort in Placer County for presenting a counterfeit credit card. He was handed over to federal authorities shortly thereafter.
A federal grand jury issued a superseding indictment on September 19, 2017, charging Felder with one count of fraudulent use of unauthorized access devices, in violation of 18 U.S.C. § 1029(a)(2); two counts of effecting transactions with access devices issued to other persons, in violation of 18 U.S.C. § 1029(a)(5); and one count of aggravated identity theft, in violation of 18 U.S.C. § 1028A(a)(1).
Felder is currently on release on a bond.
Felder’s sentencing hearing is scheduled for May 30, 2018, before Judge Chesney in San Francisco. The maximum statutory penalty for the count in violation of 18 U.S.C. § 1029(a)(2) is 10 years’ imprisonment and a fine of $250,000, plus restitution if appropriate. The maximum statutory penalty for each of the two counts in violation of 18 U.S.C. § 1029(a)(5) is 15 years’ imprisonment and a fine of $250,000 plus restitution, if appropriate. The statutory penalty for the count in violation of 18 U.S.C. § 1028A(a)(1) is a mandatory two-year consecutive term of imprisonment and a fine of $250,000 plus restitution, if appropriate. 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 Katherine M. Lloyd-Lovett and Kyle F. Waldinger are prosecuting the case with the assistance of Lilian ArauzHaase and Jeremy Acala. The prosecution is the result of a five-year investigation by HSI and the United States Secret Service.
Bay Area Defendants Indicted in Alleged Drug Trafficking ConspiracyRead the Press Release
SAN FRANCISCO – A federal grand jury indicted three Bay Area men for their respective roles in an alleged conspiracy to possess and distribute methamphetamine, announced Acting United States Attorney Alex G. Tse, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Special Agent in Charge Ryan L. Spradlin, Drug Enforcement Administration (DEA) Special Agent in Charge John J. Martin, and Federal Bureau of Investigation (FBI) Special Agent in Charge John F. Bennett. One defendant also is charged in the indictment with possessing with the intent to distribute cocaine. All three defendants have been arrested and are in custody. Complaints were also filed against each of these defendants in connection with these charges.
According to the indictment, between December 8, 2016, and January 30, 2018, Sergio Steven Vasquez-Gonzalez (a/k/a Checo, a/k/a Checks a/k/a Number One), 26, of Bay Point, California; Arturo Vazquez, 33, of Stockton, California; and Sergio Rubalcaba, 23, of Bay Point, California, conspired to distribute and possess with intent to distribute 500 grams or more of methamphetamine in the Northern District of California and elsewhere. In addition, the indictment alleges that on May 16, 2017, Vasquez-Gonzalez distributed 50 grams or more of pure methamphetamine, and on January 29, 2018, possessed with the intent to distribute 500 or more grams or more of cocaine. In addition, A. Vazquez is alleged to have distributed 50 grams of methamphetamine on November 29, 2017, and Rubalcaba is alleged to have possessed with intent to distribute 500 grams or more of the drug on January 30, 2018.
According to the complaint filed against him, Vasquez-Gonzalez was arrested on January 29, 2018, when a traffic stop of the vehicle he was driving resulted in the seizure of a kilogram of cocaine. According to the complaint filed against him, Rubalcaba was arrested the following day when law enforcement searched his vehicle and seized a kilogram of methamphetamine, ten pounds of marijuana, and two ounces of black tar heroin. A. Vazquez was arrested in Stockton pursuant to a federal complaint alleging that he distributed methamphetamine on November 29, 2017.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. The charges carry the maximum statutory sentences indicated in the chart below:
Charge
Defendants Charged
Maximum Statutory Sentence
Count One:
Conspiracy to distribute and possess with intent to distribute 500 grams or more of a mixture and substance containing methamphetamine
(21 U.S.C. § 846)
All Three Defendants
Life in prison
Count Two:
Distribution of 50 grams or more of methamphetamine
(21 U.S.C. § 841(a)(1))
Sergio Steven Vasquez-Gonzalez
Life in prison
Count Three:
Possession with intent to distribute 500 grams or more of a mixture and substance containing cocaine
(21 U.S.C. § 841(a)(1))
Sergio Steven Vasquez-Gonzalez
40 years in prison
Count Four:
Distribution of 50 grams or more of a mixture and substance containing methamphetamine
(21 U.S.C. § 841(a)(1))
Arturo Vazquez
40 years in prison
Count Five:
Possession with intent to distribute 500 grams or more of a mixture and substance containing methamphetamine
(21 U.S.C. § 841(a)(1))
Sergio Rubalcaba
Life in prison
In addition, any defendant convicted of the conspiracy charge will face a mandatory 10-year term of imprisonment. The remaining counts carry the following mandatory minimum terms of imprisonment: Count Two–10 years; Count Three–5 years; Count Four–5 years; Count Five–10 years. Any sentences following the defendants’ convictions 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.
Vasquez-Gonzalez and Rubalcaba appeared on the indictment this morning before the Honorable Kandis A. Westmore, U.S. District Magistrate Judge. Vazquez was previously arraigned in Stockton, California, and is being transported to the Northern District of California. All of the defendants remain in federal custody. The parties are scheduled to appear before the District Court on March 9, 2018.
Assistant U.S. Attorneys Andrew Dawson and Nikhil Bhagat are prosecuting the case with the assistance of Patricia Mahoney and Rawaty Yim. The prosecution is the result of an investigation by HSI, the DEA, and the FBI. The investigation was conducted and funded by the Organized Crime Drug Enforcement Task Force, a multi-agency task force that coordinates long-term narcotics trafficking investigations.
South San Francisco Man Convicted of Selling MethamphetamineRead the Press Release
SAN FRANCISCO – On February 12, 2018, a federal jury convicted Jose Alejandro Vasquez Robledo of conspiracy to distribute methamphetamine and distribution of methamphetamine, announced Acting United States Attorney Alex G. Tse and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Special Agent in Charge Jill Snyder. The guilty verdict followed a three-day jury trial before the Honorable Vince Chhabria, U.S. District Judge.
Evidence at trial showed that on November 16 and 17, 2015, Robledo, 32, of South San Francisco, and a co-defendant sold two ounces of methamphetamine in South San Francisco. At trial, the jury saw video and audio recordings from the drug transaction as captured by the ATF, as well as audio recordings of the phone conversations that led up to the deal. A federal grand jury indicted Robledo and his co-defendant on July 18, 2017, charging each with one count of conspiracy to distribute methamphetamine, in violation of 21 U.S.C. §§ 846, 841(a)(1) and (b)(1)(B)(viii), and one count of distribution of methamphetamine, in violation of 21 U.S.C. §§ 841(a)(1) and (b)(1)(B)(viii).
The investigation that led to the prosecution of the defendants was part of a larger ATF operation targeting criminal activity in the area of South San Francisco where the drug deal occurred.
Judge Chhabria ordered Robledo remanded to federal custody pending his sentencing hearing, which is scheduled for May 15, 2018. The counts of conviction carry a statutory mandatory minimum sentence of five years’ imprisonment, a statutory maximum sentence of 40 years’ imprisonment, and a maximum fine of $5,000,000 for each count. 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 Julie Garcia and Randall Leonard are prosecuting the case, with the assistance of Alycee Lane and Tong Zhang. The prosecution is the result of an investigation by the ATF.
San Francisco Woman Who Helped Sell Counterfeit Oxycodone Pills Sentenced to 151 Months in PrisonRead the Press Release
SAN FRANCISCO – Candelaria Vazquez was sentenced in absentia today to over 12 years in prison for her role in a conspiracy to manufacture, distribute, and possess with intent to distribute fentanyl, announced Acting United States Attorney Alex Tse and Drug Enforcement Administration Special Agent in Charge John J. Martin. The sentence was handed down by the Honorable Susan Illston, U.S. District Judge.
Vazquez, 42, of San Francisco, pleaded guilty on November 8, 2016, to conspiracy to distribute fentanyl and conspiracy to launder drug proceeds. According to the plea agreement, Vazquez admitted that for two years, she and her husband operated a pill press that generated thousands of fake oxycodone pills. Although stamped to appear like genuine oxycodone, the pills were in fact laced with fentanyl. Vazquez helped with the pill pressing operation and packaged, mailed, and delivered fentanyl pills for two years before the pair was arrested on June 10, 2016. She also conspired to launder the drug proceeds, which were received in bitcoin and exchanged for cash using unlicensed bitcoin brokers.
“Fentanyl is a potent drug that can be deadly for users,” said acting U.S. Attorney Tse. “Today’s sentence is just and reflects the grave danger when, as in this case, Fentanyl was used as an ingredient in counterfeit prescription medicines. This office will vigorously prosecute cases to address this threat that has devastated lives in our community.”
On June 21, 2016, a federal grand jury indicted Vasquez charging her with conspiracy to manufacture, possess with intent to distribute, and distribute 40 grams or more of fentanyl, in violation of 21 U.S.C. § 846 and distribution and possession with intent to distribute fentanyl, in violation of 21 U.S.C. § 841(a)(1) and (b)(1)(C). Pursuant to her plea agreement, Vasquez pleaded guilty to one count of conspiracy to manufacture, distribute, and possess with intent to distribute fentanyl, in violation of 21 U.S.C. § 846, and one count of conspiracy to launder drug proceeds in violation of 18 U.S.C. § 1956(h). After pleading guilty, Vazquez fled in April 2017 and became a fugitive. She was sentenced in absentia, and is still a fugitive.
Vazquez and her husband had distributed hundreds of thousands of fentanyl-laced pills via online marketplaces. Fentanyl is a dangerous and highly potent opiate about 100 times more powerful than morphine. Just two milligrams of fentanyl can constitute a lethal dose. Fentanyl is particularly dangerous when it is used to create counterfeit pills. Illegal pill press operations will sometimes use fentanyl, which is cheaper than other opiates, to create fake pills that stamped to look like genuine oxycodone pills. Because fentanyl is such a powerful opiate, a small difference in the amount of fentanyl in a homemade pill can make a huge difference in its potency. Counterfeit pills containing fentanyl have already been linked to numerous unintentional overdoses by users who believed they were ingesting a much less powerful opiate.
In addition to the prison term, Judge Illston sentenced Vasquez to a three-year period of supervised release. The defendant will begin serving the sentence upon her apprehension.
Assistant U.S. Attorney Rita Lin is prosecuting the case with the assistance of Amanda Martinez, Rawaty Yim, and Theresa Benitez. The prosecution is the result of an investigation by the Drug Enforcement Administration, United States Postal Inspector, Homeland Security Investigations, and the Internal Revenue Service. This case is the product of the Organized Crime Drug Enforcement Task Force, a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies.
Former Southwest Airlines Baggage Handler Sentenced to 21 Months in Prison for Violating Airport Security Requirements, Drug Smuggling, and Money LaunderingRead the Press Release
OAKLAND – Former Southwest Airlines baggage handler Kenneth Wayne Fleming, Jr. was sentenced today to 21 months in prison for entering an airport area in violation of security requirements, conspiring to distribute marijuana, and conspiring to launder money, announced Acting United States Attorney Alex G. Tse, Internal Revenue Service, Criminal Investigation (IRS-CI), Special Agent in Charge Michael T. Batdorf, and Federal Bureau of Investigation (FBI) Special Agent in Charge John F. Bennett. The sentence was handed down by the Honorable Phyllis J. Hamilton, Chief U.S. District Judge.
Fleming, 35, of Oakland, pleaded guilty on October 25, 2017, to one count of conspiracy to distribute, and to possess with intent to distribute, marijuana; one count of entering an airport area in violation of security requirements; and one count of conspiracy to launder money. In his plea agreement, Fleming admitted that in 2013 and 2014 he was a baggage handler for Southwest Airlines at the Oakland International Airport. He acknowledged he used his access as a baggage handler to smuggle marijuana into the airport and distributed that marijuana to outbound passengers in violation of airport security requirements. Specifically, Fleming admitted that on four occasions he delivered unscreened baggage to outbound passengers who already cleared the TSA security checkpoint. The baggage contained a total of 16 kilograms of marijuana. As part of his plea agreement, Fleming further admitted he abused a position of public and private trust. Specifically, Fleming admitted he used his access to the secured areas of the airport granted to him as an employee of Southwest Airlines to commit and conceal his crimes. Fleming also admitted that he conspired with others to launder $51,400 in drug trafficking proceeds through his bank account.
On September 25, 2017, Fleming was charged in a superseding information with one count of conspiracy to distribute, and possess with intent to distribute, marijuana, in violation of 21 U.S.C. § 846; one count of entering an airport area in violation of security requirements, in violation of 49 U.S.C. §§ 46314(a) and 46314(b)(2); and one count of conspiracy to launder money, in violation of 18 U.S.C. § 1956(h). Pursuant to this plea agreement, Fleming pleaded guilty to all the charges.
In addition to the prison term, Chief Judge Hamilton sentenced the defendant to a three-year period of supervised release. During this period of supervised release, Fleming will be barred from seeking or obtaining employment with any commercial air carrier or airport. The Court also ordered Fleming to pay a forfeiture money judgment of $51,400. Fleming will begin serving the sentence on April 2, 2018.
Fleming’s sentence brings to 10 the number of defendants sentenced as part of the scheme to violate airport security and distribute marijuana. The other nine defendants sentenced include the following:
Defendant
Age, Residence
Charges
Status
Michael Herb Videau
30, of Oakland
Distribution and possession with intent to distribute, marijuana,
21 U.S.C. § 841(a)(1)
Entering an airport area in violation of security requirements,
49 U.S.C. §§ 46314(a) and 46314(b)(2)
Sentenced on
November 9, 2016, to
15 months in prison and
3 years supervised release.
Major Alexander Session III
27, of Oakland
Distribution and possession with intent to distribute, marijuana,
21 U.S.C. § 841(a)(1)
Entering an airport area in violation of security requirements,
49 U.S.C. §§ 46314(a) and 46314(b)(2)
Sentenced on
November 15, 2017, to
24 months in prison and
3 years supervised release.
Clyde Barry Jamerson
44, of Oakland
Entering an airport area in violation of security requirements,
49 U.S.C. §§ 46314(a) and 46314(b)(2)
Sentenced on
September 21, 2016, to
3 months in prison and
3 years supervised release.
Kameron Kordero Eldridge Davis
28, of Dublin, Calif.
Entering an airport area in violation of security requirements,
49 U.S.C. §§ 46314(a) and 46314(b)(2)
Sentenced on
June 29, 2016, to
6 months in prison and
3 years supervised release.
Ronnell Lamar Molton
39, of Oakland
Entering an airport area in violation of security requirements,
49 U.S.C. §§ 46314(a) and 46314(b)(2)
Sentenced on
August 10, 2016, to
3 months in prison and
3 years of supervised release.
Sophia Cherise West
46, of Castro Valley
Distribution and possession with intent to distribute, marijuana,
21 U.S.C. § 841(a)(1)
Entering an airport area in violation of security requirements,
49 U.S.C. §§ 46314(a) and 46314(b)(2)
Sentenced on
June 1, 2016, to
12 months and one day in prison and 3 years supervised release.
Donald Ray Holland II
44, of Discovery Bay
Distribution and possession with intent to distribute, marijuana,
21 U.S.C. § 841(a)(1)
Entering an airport area in violation of security requirements,
49 U.S.C. §§ 46314(a) and 46314(b)(2)
Sentenced on
November 16, 2016, to
27 months in prison and
3 years supervised release.
Brandon Jarred Davillier
29, of Slidell, Louisiana
Distribution and possession with intent to distribute, marijuana,
21 U.S.C. § 841(a)(1)
Sentenced on
August 3, 2016, to
24 months in prison and
3 years supervised release.
Travon Jahmal Franzwa Baker
25, of Oakland
Distribution and possession with intent to distribute, marijuana,
21 U.S.C. §§ 841(a)(1) and (b)(1)(D)
Sentenced on
May 4, 2016, to
10 months in prison and
3 years supervised release.
Assistant U.S. Attorney Garth Hire is prosecuting the case with the assistance of Vanessa Quant. The prosecution is the result of an investigation by the FBI, the IRS-CI, and the Alameda County Sheriff’s Office. This case is the product of an extensive investigation by the Organized Crime Drug Enforcement Task Force, a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies.
Former Silicon Valley CEO Pleads Guilty to Defrauding Employees of Tech Company Start-UpRead the Press Release
The founder and chief executive officer of a now-defunct Silicon Valley technology company start-up known publicly as WrkRiot pleaded guilty today for defrauding several of his company’s former employees by luring them to join his company based on false and misleading statements about his educational, professional and financial background, and by enticing them to continue working for his company through forged documents purportedly reflecting salary payments that were never made.
Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Acting U.S. Attorney Alex G. Tse of the U.S. Attorney’s Office 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.
Isaac Choi aka Yi Suk Choi, Yisuk Choi, Yi Suk Chae and Isaac Chae (Choi), 36, most recently of Orange County and previously of Santa Clara, California, pleaded guilty to one count of wire fraud before U.S. District Judge Edward J. Davila of the Northern District of California. Sentencing has been scheduled for May 24 before Judge Davila.
As part of his guilty plea, Choi admitted that while attempting to recruit potential employees, he made false and misleading statements about various topics, including his educational and professional history, and the amount of his wealth. Choi admitted in his plea that, in truth, he never attended any business school, that he was never employed in any capacity by any financial institution, and that he exaggerated his wealth. He further admitted that in August 2016, while at WrkRiot’s office in Santa Clara, he emailed several of his employees fake wire transfer confirmation documents purporting to reflect their salary payments for the purpose of convincing his employees to continue working for his privately failing company.
This case was investigated by the FBI’s San Jose Resident Agency. Trial Attorney Cory E. Jacobs of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Jeff Schenk of the U.S. Attorney’s Office for the Northern District of California are prosecuting the case.
Former Silicon Valley CEO Pleads Guilty to Defrauding Employees of Tech Company Start-UpRead the Press Release
SAN FRANCISCO – The founder and chief executive officer of a now-defunct Silicon Valley technology company start-up pleaded guilty today to wire fraud, announced Acting U.S. Attorney Alex G. Tse, Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The Honorable Edward J. Davila, United States District Judge, accepted the guilty plea of Isaac Choi, aka Yi Suk Choi, Yisuk Choi, Yi Suk Chae, and Isaac Chae (Choi) this afternoon.
According to the plea agreement, Choi, 36, most recently of Orange County and previously of Santa Clara, Calif., was founder and chief executive officer of a company known publicly as WrkRiot. As part of his guilty plea, Choi admitted that while attempting to recruit potential employees, he made false and misleading statements about various topics, including his educational and professional history, and the amount of his wealth. Choi admitted in his plea that, in truth, he never attended any business school, that he was never employed in any capacity by any financial institution, and that he exaggerated his wealth. He further admitted that in August 2016, while at WrkRiot’s office in Santa Clara, he emailed several of his employees fake wire transfer confirmation documents purporting to reflect their salary payments for the purpose of convincing his employees to continue working for his privately failing company.
On June 1, 2017, a federal grand jury indicted Choi charging him with five counts of wire fraud, in violation of 18 U.S.C. § 1343. Pursuant to today’s plea agreement, Choi pleaded guilty to one count and the remaining charges will be dismissed.
Choi faces a maximum statutory penalty of 20 years’ imprisonment and a $250,000 fine or twice the gross gain or loss from the offense. Judge Davila also may order an additional period of supervised release. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Judge Davila scheduled Choi’s sentencing for May 24, 2018.
Assistant U.S. Attorney Jeff Schenk and Trial Attorney Cory E. Jacobs of the Criminal Division’s Fraud Section are prosecuting the case. This case was investigated by the FBI’s San Jose Resident Agency.
Former Pacifica Resident Sentenced to Prison for Bank and Tax FraudRead the Press Release
SAN FRANCISCO – Krisinda Messer was sentenced today to 27 months in prison and was ordered to pay $541,617.52 in restitution for bank fraud and making and subscribing a false tax return, announced Acting United States Attorney Alex G. Tse and Internal Revenue Service, Criminal Investigation (IRS-CI), Special Agent in Charge Michael T. Batdorf. The sentence was handed down by the Honorable Charles R. Breyer, U.S. District Court Judge, following Messer’s plea of guilty to the charges.
A federal grand jury indicted Messer, 38, of Pope Valley, Calif., and formerly of Pacifica, Calif., on May 12, 2015, charging her with twelve counts of bank fraud, in violation of 18 U.S.C. § 1344(2); four counts of aggravated identity theft, in violation of 18 U.S.C. § 1028A(a)(1); and three counts of making and subscribing false tax returns, in violation of 26 U.S.C. § 7206(1). On May 10, 2017, Messer pleaded guilty to one count of bank fraud and one count of making and subscribing a false tax return.
According to the plea agreement, Messer admitted that from 2007 until 2011, she was employed as a bookkeeper by delicatessens in San Francisco. Beginning in May 2008, and continuing through August 2011, Messer created 130 fraudulent checks totaling $436,396.52, 128 of which were payable by the delicatessens to American Backflow Company, a company owned by Messer’s relative. American Backflow Company was not a creditor of Messer’s employers and there was no business relationship between them. Messer forged the signature of the owner of the delicatessens on most of the checks. In order to conceal these checks from her employer, Messer created a fake company account on QuickBooks and used the fake company to produce checks written to American Backflow Company so that they would not appear in the books.
In addition to the prison term, Judge Breyer also sentenced the defendant to a three-year period of supervised release. The defendant will begin serving the sentence on May 1, 2018.
Assistant U.S. Attorney Cynthia Stier is prosecuting the case. The prosecution is the result of an investigation by the IRS-CI.
Three Defendants Sentenced for Their Respective Roles in Trafficking Guns from Nevada to Oakland, CaliforniaRead the Press Release
OAKLAND – Richard Straight, Jenna Jeanne Allec, and Kenneth Lee Kemp were each sentenced today for their respective roles in an interstate firearms trafficking scheme announced Acting United States Attorney Alex G. Tse and Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) Special Agent in Charge Jill Snyder. The sentences were handed down by the Honorable Haywood S. Gilliam, United States District Judge, following the entry in September of 2017 by each defendant of a guilty plea.
On April 20, 2017, a federal grand jury indicted Straight, 27, of Oakland; Allec, 26, of Oakland; Kemp, 32, of Elko, Nev.; and others in a Second Superseding Indictment for their respective roles in trafficking scores of firearms from Nevada to Oakland, Calif. Straight, Allec, and Kemp each entered into plea agreements in which they acknowledged committing crimes related to the interstate gun trafficking scheme.
According to his plea agreement, Straight, admitted that between March of 2015 and May of 2017, he engaged in the business of dealing firearms without a license. Straight admitted he acted as the middleman for firearms purchases in Nevada and that his conduct was intended to assist buyers who travelled from outside the state for the purpose of firearms trafficking. According to his plea agreement, Straight also admitted he was responsible for the sale of about 39 firearms. Straight admitted buyers paid him for the price of the firearm plus, on average, an extra $50 to $100. Straight pleaded guilty to one count of dealing in firearms without a license, in violation of 18 U.S.C. § 922(a)(1)(A), and one count of aiding and abetting traveling interstate to promote illegal firearms trafficking, in violation of 18 U.S.C. § § 924(n) and 2. Today, Judge Gilliam sentenced Straight to 42 months in prison and three years of supervised release.
Allec admitted that she, too, engaged in the business of dealing in firearms without a license. According to her plea agreement, she purchased firearms in Nevada from licensed firearm dealers and then sold the firearms to others. Allec admitted that she sold about 18 firearms during the period of October 2015 to June of 2016 earning approximately $50 to $100 per firearm. Allec pleaded guilty to one count of dealing in firearms without a license, in violation of 18 U.S.C. § 922(a)(1)(A). Today, Judge Gilliam sentenced Allec to 48 months of probation with a special condition of 24 months of home confinement and 200 hours of community service.
According to his plea agreement, Kemp admitted he engaged in a conspiracy to deal in firearms without a license. Specifically, he agreed to engage in an illegal operation to traffic firearms from the Reno, Nev. area to Oakland, Calif. He admitted he purchased firearms in Nevada and sold firearms to others who lived in California or who could provide the firearms to others in California. Kemp admitted he trafficked approximately 21 firearms. Kemp pleaded guilty to one count of conspiracy to deal in firearms without a license, in violation of 18 U.S.C. § 371. Judge Gilliam sentenced Kemp to 14 months in prison and three years of supervised release.
In addition to these defendants, on November 27, 2017, Judge Gilliam sentenced Edgar de La Cruz for his role in the scheme, as well as his other crimes of Hobbs Act robbery, in violation of 18 U.S.C. §1951, and use of a firearm in furtherance of a crime of violence, in violation of 18 U.S.C. §924(c). Judge Gilliam sentenced de La Cruz to 120 months in prison and five years of supervised release.
This prosecution is the result of an investigation by the ATF Crime Gun Intelligence Center, San Francisco Field Division (SFFD). Additional assistance was provided by the Reno and Sparks Police Departments.
Sacramento Resident Sentenced to over Seven Years in Prison After Committing Four Armed Bank RobberiesRead the Press Release
OAKLAND – Clayton Quiz Smith was sentenced today to 87 months in prison for the armed robbery of three banks in the East Bay and one bank in Folsom, Calif., announced Acting United States Attorney Alex G. Tse and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The sentence was handed down today by the Honorable Jon S. Tigar, U.S. District Judge.
Smith, 45, from Sacramento, pleaded guilty on October 6, 2017, to four separate counts of armed bank robbery. According to the plea agreement, Smith began the robbery spree on February 6, 2017, when he robbed a bank in San Ramon. Smith admitted he entered a bank wearing a jacket, hooded sweater, beanie, and gloves, and was carrying a black laptop bag. He placed the bag on the counter in front of the bank tellers and removed from his pocket what appeared to be a small silver pistol. Smith displayed the apparent pistol to a teller and demanded the $100 bills and $20 bills from the teller’s drawer. Smith escaped with $7,434.
Smith committed a second armed robbery at the same bank in San Ramon on March 21, 2017. He encountered the same victim whom he forced to accompany him out of the bank on February 6, 2017. This time, Smith pointed the object that appeared to be a revolver toward the victim and demanded the bills from her drawer. Smith escaped with $3,500.
According to the plea agreement, Smith admitted he committed two additional armed robberies—one on April 4, 2017, and the other on April 20, 2017. During the April 4 robbery, Smith brandished what appeared to be a 6-inch silver-colored blade at a Concord, Calif. bank. Smith repeatedly yelled, “Hands up!” while brandishing the knife. He told two tellers to give him the money in their drawers and ordered them not to pull any alarms until he left. Smith escaped with $5,275. Similarly, during the April 20 robbery, Smith entered a bank in Folsom, Calif., wielding what appeared to be a steak knife. Smith approached the four tellers on duty, pointing the object at the first victim. Smith told the victim, “Don’t call the cops. Don’t set off any alarms. Take the money and set it down on the counter.” He stole a total of $11,895 from the drawers of the four tellers on duty that day.
Smith was charged in an Information filed August 16, 2017, with four counts of armed bank robbery, in violation of 18 U.S.C. § 2113(a) and (d). Pursuant to his plea agreement, Smith pleaded guilty to all four counts.
In addition to the prison term, Judge Tigar also sentenced the defendant to a five-year period of supervised release and ordered him to pay $28,104 in restitution. Smith has been in custody since his arrest on May 4, 2017, and will begin serving his sentence immediately.
Assistant U.S. Attorney Christina McCall is prosecuting the case with the assistance of Vanessa Quant and Noble Hughes. The prosecution is the result of an investigation by the Federal Bureau of Investigation, the San Ramon Police Department, the Concord Police Department, and the Folsom Police Department.
Las Vegas Resident Pleads Guilty to Filing False Tax ClaimsRead the Press Release
OAKLAND - Eric Oase pleaded guilty in federal court in Oakland today to filing false claims with the United States, announced Acting United States Attorney Alex G. Tse and Internal Revenue Service, Criminal Investigation (IRS-CI), Special Agent in Charge Michael T. Batdorf.
In pleading guilty, Oase, 52, of Las Vegas, Nev., admitted he owned and operated E&K Tax Solutions in San Leandro, Calif. Oase acknowledged he knowingly prepared and filed numerous false federal income tax returns for others with the Internal Revenue Service. Specifically in 2012, Oase prepared 2008, 2009, 2010, and 2011 federal income tax returns for his customers that reported false wages, false education expenses, or both, which generated tax refunds. Regardless of the amount of wages or expenses provided by the customers, Oase falsely reported income and education expenses for his customers that generated tax refunds. Oase electronically filed with the IRS the false 2011 tax returns. He directed his customers to mail their 2008 through 2010 tax returns to the IRS. In total, Oase directed his clients to claim fraudulent tax refunds in the amount of $477,333.
A federal grand jury indicted Oase on January 17, 2017, charging him with six counts of filing false claims, in violation of 18 U.S.C. § 287. Pursuant to today’s agreement, Oase pleaded guilty to two of the counts.
Oase is currently free on bond. His sentencing hearing is scheduled for May 24, 2018, before the Honorable Yvonne Gonzalez Rogers, U.S. District Judge, in Oakland. The maximum statutory penalty for each count of filing a false claim in violation of 18 U.S.C. § 287 is five years in prison and a fine of $250,000. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney José A. Olivera is prosecuting the case. The prosecution is the result of an investigation by the IRS-CI.
Salinas Resident Pleads Guilty to Bank RobberyRead the Press Release
SAN JOSE– Nathan James Garcia, aka “Bones,” pleaded guilty to conspiracy to commit robbery affecting interstate commerce and armed bank robbery in connection with the 2012 robbery of a Salinas, Calif., bank, announced Acting United States Attorney Alex G. Tse and Federal Bureau of Investigation (FBI) Special Agent in Charge John F. Bennett. The guilty plea was accepted this morning by the Honorable Lucy H. Koh, United States District Judge.
According to his guilty plea, on May 19, 2012, Garcia, 26, of Salinas, committed an armed bank robbery. During the robbery, a firearm was brandished and over $13,000 in cash was stolen. In the days leading up to the bank robbery and in preparation for robbing it, Garcia rehearsed the robbery and cased the bank.
On May 11, 2017, a federal grand jury indicted Garcia, charging him with one count each of conspiracy to commit robbery affecting interstate commerce, in violation of 18, U.S.C. § 1951(a); conspiracy to commit armed bank robbery, in violation of 18 U.S.C. §§ 2113(a) and (d), and 371; robbery affecting interstate commerce, in violation of 18 U.S.C. §§ 1951(a) and 2; and armed bank robbery, in violation of 18 U.S.C. §§ 2113(a) and (d), and 2. Pursuant to today’s plea agreement, Garcia pleaded guilty to the conspiracy to commit robbery affecting interstate commerce and the armed bank robbery counts. The remaining counts will be dismissed.
Garcia faces a maximum sentence of 20 years’ imprisonment and $250,000 for the conspiracy count and a maximum sentence of 25 years’ imprisonment and $250,000 for the armed bank robbery count. Further, additional terms of supervised release, penalties, and restitution may be ordered. 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. Garcia has been in federal custody since his arrest in May of 2017. Judge Koh has scheduled Garcia’s sentencing hearing for May 2, 2018.
Assistant U.S. Attorney Claudia A. Quiroz is prosecuting this case with assistance from Jessica Meegan and Lance Libatique. The prosecution is the result of an investigation by the FBI.
Two California Urologists Agree to Pay More than $1 Million to Settle False Claims Act Allegations Related to Radiation Therapy ReferralsRead the Press Release
Drs. Aytac Apaydin and Stephen Worsham, urologists based in Northern California, will pay $1.085 million to resolve allegations that they submitted and caused the submission of false claims to Medicare for image guided radiation therapy (IGRT) that was referred and billed in violation of the physician self-referral law (commonly known as the “Stark Law”) and the Anti-Kickback Statute, the Department of Justice announced. Drs. Apaydin and Worsham own and operate Salinas Valley Urology Associates (SVUA) in Salinas, California. They also owned Advance Radiation Oncology Center (AROC), located in Salinas, California, which dissolved in 2016. IGRT is used to treat patients who are diagnosed with cancer, including prostate cancer patients.
“Health care laws prevent health care providers, and physicians in particular, from referring Medicare services in exchange for financial incentives,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “The Department of Justice is committed to enforcing those laws and preventing physicians from improperly injecting profit motives into their decisions about patient care.”
The Anti-Kickback Statute and the Stark Law are intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives. The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by federal health care programs, including Medicare. The Stark Law forbids health care providers from billing Medicare for certain services referred by physicians who have a financial relationship with the entity performing the service, unless an exception applies.
“The United States Attorney’s Office is committed to protecting the residents of the district from unlawful financial schemes that compromise patient care,” said Acting U.S. Attorney Alex G. Tse. “Patients who use our federal health care programs deserve care that is free from fraud. The few doctors who choose to engage in this type of conduct not only undermine the system, but impugn the many honest and dedicated medical professionals who serve our community.”
The United States alleged that Drs. Apaydin and Worsham knowingly caused eight urologists in Monterey and Salinas, California (the “Lessee Urologists”) to violate the Anti-Kickback Statute and the Stark Law. Drs. Apaydin and Worsham allegedly solicited the Lessee Urologists to enter into lease agreements with AROC under which the Lessee Urologists could bill for, and thereby profit from, their referrals of IGRT performed at AROC. The United States also alleged that Drs. Apaydin and Worsham violated the Stark Law by improperly billing Medicare for their own IGRT referrals to AROC, despite the fact that AROC and SVUA were separate entities and their financial arrangements did not comply with any exceptions to the Stark Law.
The Lessee Urologists previously entered into settlement agreements pertaining to their IGRT claims, under which they collectively agreed to pay the United States $900,000.
The United States’ investigation was a coordinated effort by the Civil Division of the Department of Justice, the U.S. Attorney’s Office for the Northern District of California, and the Department of Health and Human Services Office of Inspector General.
The claims settled by this agreement are allegations only; there has been no determination of liability.
Two California Urologists Agree to Pay More Than $1 Million to Settle False Claims Act Allegations Related to Radiation Therapy ReferralsRead the Press Release
SAN FRANCISCO – Drs. Aytac Apaydin and Stephen Worsham, urologists based in Northern California, will pay $1.085 million to resolve allegations that they submitted and caused the submission of false claims to Medicare for image guided radiation therapy (IGRT) that was referred and billed in violation of the physician self-referral law (commonly known as the “Stark Law”) and the Anti-Kickback Statute, the Department of Justice announced today. Drs. Apaydin and Worsham own and operate Salinas Valley Urology Associates (SVUA) in Salinas, California. They also owned Advance Radiation Oncology Center (AROC), located in Salinas, California, which dissolved in 2016. IGRT is used to treat patients who are diagnosed with cancer, including prostate cancer patients.
“The United States Attorney’s Office is committed to protecting the residents of the district from unlawful financial schemes that compromise patient care,” said Acting U.S. Attorney for the Northern District of California Alex G. Tse. “Patients who use our federal health care programs deserve care that is free from fraud. The few doctors who choose to engage in this type of conduct not only undermine the system, but impugn the many honest and dedicated medical professionals who serve our community.”
“Health care laws prevent health care providers, and physicians in particular, from referring Medicare services in exchange for financial incentives,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “The Department of Justice is committed to enforcing those laws and preventing physicians from improperly injecting profit motives into their decisions about patient care.”
The Anti-Kickback Statute and the Stark Law are intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives. The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by federal health care programs, including Medicare. The Stark Law forbids health care providers from billing Medicare for certain services referred by physicians who have a financial relationship with the entity performing the service, unless an exception applies.
The United States alleged that Drs. Apaydin and Worsham knowingly caused eight urologists in Monterey and Salinas, California, (the “Lessee Urologists”) to violate the Anti-Kickback Statute and the Stark Law. Drs. Apaydin and Worsham allegedly solicited the Lessee Urologists to enter into lease agreements with AROC under which the Lessee Urologists could bill for, and thereby profit from, their referrals of IGRT performed at AROC. The United States also alleged that Drs. Apaydin and Worsham violated the Stark Law by improperly billing Medicare for their own IGRT referrals to AROC, despite the fact that AROC and SVUA were separate entities and their financial arrangements did not comply with any exceptions to the Stark Law.
The Lessee Urologists previously entered into settlement agreements pertaining to their IGRT claims, under which they collectively agreed to pay the United States $900,000.
Assistant U.S. Attorney Kimberly Friday is handling this matter with assistance from Tina Louie and Garland He. The United States’ investigation was a coordinated effort by the U.S. Attorney’s Office for the Northern District of California, the Civil Division of the Department of Justice, and the Department of Health and Human Services Office of Inspector General.
The claims settled by this agreement are allegations only; there has been no determination of liability.
2 Men Charged with Conspiring to Illegally Obtain Technology and Computer Chips That Were Sent to ChinaRead the Press Release
Federal authorities arrested Yi-Chi Shih, 62, and Kiet Ahn Mai, 63, on Jan. 19, on federal charges that allege a scheme to illegally obtain technology and integrated circuits with military applications that were exported to a Chinese company without the required export license.
The announcement was made by Acting Assistant Attorney General for National Security Dana J. Boente; U.S. Attorney Nicola T. Hanna for the Northern District of California; Assistant Director in Charge Paul Delacourt of the FBI’s Los Angeles Field Office; Special Agent in Charge R. Damon Rowe of IRS Criminal Investigation; Special Agent in Charge Richard Weir of the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, Los Angeles Field Office.
“According to the complaint, the defendants allegedly schemed to illegally export semiconductors having military and civilian applications to a Chinese company,” said Acting Assistant Attorney General Boente. “Protecting this type of technology and preventing its illegal acquisition by our adversaries remains a key priority in preserving our national security.”
“This case outlines a scheme to secure proprietary technology, some of which was allegedly sent to China, where it could be used to provide companies there with significant advantages that would compromise U.S. business interests,” said U.S. Attorney Hanna. “The very sensitive information would also benefit foreign adversaries who could use the technology to further or develop military applications that would be detrimental to our national security.”
“The FBI, working jointly with our law enforcement partners, remains committed to bringing to justice those who seek to illegally export some of our nation’s most sensitive technologies to the detriment of our national security and hard-working United States companies,” said Assistant Director in Charge Delacourt. “Rest assured, the FBI will continue to diligently pursue any and all leads that involve the illegal exportation of U.S. technology which will cause harm to our long-term national security interests.”
“Today’s actions serve as a reminder that the government will hold individuals accountable who fraudulently procure and export unlawfully protected United States technology and attempt to conceal their criminal activity through international money laundering,” said Special Agent in Charge Rowe. “The IRS plays an important role in tracing illicit funds through both domestic and international financial intuitions. The IRS is proud to partner with the FBI and Department of Commerce and share its world-renowned financial investigative expertise in this investigation.”
“Today’s arrests demonstrate the Office of Export Enforcement’s strong commitment to enforcing our nation’s export control and public safety laws,” said Special Agent in Charge Weir. “We will continue to work with our law enforcement partners to identify, deter, and keep the most sensitive U.S. origin goods and technology out of the most dangerous hands.”
Shih, an electrical engineer who is a part-time Los Angeles resident and a naturalized U.S. citizen originally from Taiwan, and Mai who resides in Pasadena, California and is a naturalized U.S. citizen originally from Vietnam, were arrested on Jan. 19, without incident by federal agents.
Shih and Mai, who previously worked together at two different companies, are named in a criminal complaint unsealed on Jan. 19, that charges them with conspiracy. Shih is also charged with violating the International Emergency Economic Powers Act (IEEPA), a federal law that makes illegal, among other things, certain unauthorized exports.
The complaint alleges that Shih and Mai conspired to illegally provide Shih with unauthorized access to a protected computer of a U.S. company that manufactured specialized, high-speed computer chips known as monolithic microwave integrated circuits (MMICs). The conspiracy count also alleges that the two men engaged in mail fraud, wire fraud and international money laundering to further the scheme.
According to the affidavit in support of the criminal complaint, Shih and Mai executed a scheme to defraud the U.S. company out of its proprietary, export-controlled items, including technology associated with its design services for MMICs. As part of the scheme, Shih and Mai accessed the victim company’s computer systems via its web portal after Mai obtained that access by posing as a domestic customer seeking to obtain custom-designed MMICs that would be used solely in the United States. Shih and Mail allegedly concealed Shih’s true intent to transfer the U.S. company’s technology and products to the People’s Republic of China.
The victim company’s proprietary semiconductor technology has a number of commercial and military applications, and its customers include the Air Force, Navy and the Defense Advanced Research Projects Agency. MMICs are used in electronic warfare, electronic warfare countermeasures and radar applications.
The computer chips at the heart of this case allegedly were shipped to Chengdu GaStone Technology Company (CGTC), a Chinese company that established a MMIC manufacturing facility in Chengdu. Shih was the president of CGTC, which in 2014 was placed on the Commerce Department’s Entity List, according to the affidavit, “due to its involvement in activities contrary to the national security and foreign policy interest of the United States – specifically, that it had been involved in the illicit procurement of commodities and technologies for unauthorized military end use in China.” Because it was on the Entity List, a license from the Commerce Department was required to export U.S.-origin MMICs to CGTC, and there was a “presumption of denial” of a license.
The complaint outlines a scheme in which Shih used a Los Angeles-based company he controlled – Pullman Lane Productions, LLC – to funnel funds provided by Chinese entities to finance the manufacturing of MMICs by the victim company. The complaint affidavit alleges that Pullman Lane received financing from a Beijing-based company that was placed on the Entity List the same day as CGTC “on the basis of its involvement in activities contrary to the national security and foreign policy interests of the United States.”
Mai acted as the middleman by using his Los Angeles company – MicroEx Engineering – to pose as a legitimate domestic customer that ordered and paid for the manufacturing of MMICs that Shih illegally exported to CGTC in China, according to the complaint. It is the export of the MMICs that forms the basis of the IEEPA violation alleged against Shih. The specific exported MMICs also required a license from the Commerce Department before being exported to China, and a license was never sought or obtained for this export.
Shih and Mai are expected to made their first court appearances on Jan. 19, in U.S. District Court in downtown Los Angeles.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty. If convicted, Mai faces a maximum sentence of five years in prison, and Shih faces a maximum sentence of 25 years in prison. The maximum statutory sentences are prescribed by Congress and are provided here for informational purposes. If convicted of any offense, the sentencing of the defendants will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
This case is being investigated by the FBI; the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement; and IRS Criminal Investigation.
This case is being prosecuted by Assistant U.S. Attorneys Judith A. Heinz, Melanie Sartoris and Khaldoun Shobaki of the Northern District of California, and Trial Attorney Matthew Walczewski of the National Security Division Counterintelligence and Export Control Section.
San Francisco Resident Known as the Dreaded Bandit Sentenced to Twenty One Years in Prison for Armed Bank Robbery and Related CrimesRead the Press Release
SAN FRANCISCO – Andre Brown was sentenced today to 252 months in prison and ordered to pay $170,451 in restitution for four armed bank robberies and related crimes, announced Acting United States Attorney Alex G. Tse and Federal Bureau of Investigation (FBI) Special Agent in Charge John F. Bennett. The sentence was handed down by the Honorable Susan Illston, U.S. District Judge, following Brown’s plea of guilty to the charges.
Brown, 60, of San Francisco, pleaded guilty on September 1, 2017, to bank robbery, conspiracy to commit bank robbery, attempted armed bank robbery, and being a felon in possession of a firearm. According to the plea agreement, Brown admitted to committing four bank robberies in San Francisco and San Mateo at gunpoint between April 2016 and July 2016. Brown admitted to stealing $170,451 from bank teller drawers and vaults over the course of those four robberies. The plea agreement describes details of Browns crimes. For example, the plea agreement indicates that during a robbery in San Francisco on April 22, 2016, Brown pointed a revolver at a bank employee and ordered bank employees to the vault room. Brown also admitted to robbing a credit union in San Mateo on May 12, 2016, during which Brown ordered employees at gunpoint to the bank vault room. Similarly, on June 23, 2016, Brown robbed a bank in San Francisco and on July 11, 2016, returned to the bank to rob it again. Brown used a handgun during both robberies.
The FBI and the San Francisco Police Department identified Brown as a suspect in the robberies after the authorities dubbed the suspect the “Dreaded Bandit” because of the dreadlocked wig Brown wore during a robbery. The investigation ended in Brown’s arrest in August of 2016. Specifically, on August 12, 2016, Brown and a co-conspirator, Javier Jenkins, planned a fifth bank robbery in San Francisco after which Brown approached a bank wearing a disguise. Brown intended to rob the bank, however, both Brown and Jenkins were arrested before completing their plan.
A federal grand jury indicted Brown on February 28, 2017. Initially, Brown was charged with conspiracy to commit bank robbery, attempted armed bank robbery, using, carrying, and possessing a firearm during and in relation to a crime of violence, and being a felon in possession of a firearm. Pursuant to the guilty plea, Brown pleaded guilty to four counts of bank robbery, in violation of 18 U.S.C. §§ 2113(a) and (d), and one count each of conspiracy to commit bank robbery, in violation of 18 U.S.C. §§ 371 and 2113(a); attempted armed bank robbery, in violation of 18 U.S.C. §§ 2113(a) and (d); and being a felon in possession of a firearm, in violation of 18 U.S.C. § 922(g)(1).
In addition to the prison term and restitution, Judge Illston also ordered Brown to serve a three-year term of supervised release. Brown has been in custody since his arrest in August of 2016 and will begin serving the sentence immediately.
On August 18, 2017, Brown’s co-conspirator, Javier Jenkins, also known as Ollie Bryant, pleaded guilty to his role in the scheme. Jenkins admitted serving as Brown’s getaway driver during the attempted bank robbery in August 2016. On December 1, 2018, Judge Illston sentenced Jenkins to 63 months’ imprisonment for attempt to commit bank robbery and conspiracy to commit bank robbery.
Assistant U.S. Attorneys Katherine Lloyd-Lovett and Helen Gilbert are prosecuting the case with the assistance of Vanessa Vargas and Marina Ponomarchuk. The prosecution is the result of an investigation by the FBI and the San Francisco Police Department.
Lockheed Martin Agrees to Pay $4.4 Million to Resolve Claims It Provided Faulty Equipment to the Coast GuardRead the Press Release
SAN FRANCISCO - Defense contractor Lockheed Martin Corporation has agreed to a settlement valued at $4.4 million to resolve allegations that it violated the civil False Claims Act by providing defective communications systems for the United States Coast Guard’s National Security Cutters, announced Acting United States Attorney Alex G. Tse and Department of Homeland Security Office of the Inspector General Special Agent in Charge of the San Diego Field Office Amanda Thandi.
Lockheed, headquartered in Maryland, provided communications systems for the Coast Guard’s National Security Cutters. The United States alleges that the Radio Frequency Distribution System (RFDS) Lockheed provided fails to meet the requirement of transmitting and receiving several different radio signals at the same time without undue interference (known as simultaneous operations). The Coast Guard has taken delivery of the first six Cutters and three additional Cutters are under construction. All nine Cutters have versions of the same RFDS. To settle the allegations, Lockheed has agreed to pay $2.2 million, and to provide the Coast Guard with repairs to the RFDS on the nine Cutters at no charge. The repairs are valued at $2.2 million.
“This office remains committed to fighting fraud and false claims against the federal government,” said Acting U.S. Attorney Tse. “It is essential that the communications systems on the Coast Guard’s National Security Cutters work properly. I am pleased that Lockheed has agreed to repair the systems so that they fully function to support the Coast Guard’s important mission.”
The settlement, unsealed today, resolves a whistleblower lawsuit filed in the United States District Court for the Northern District of California. An engineer who formerly worked for Lockheed filed the case pursuant to the qui tam provisions of the False Claims Act. Under those provisions, private citizens, known as “relators,” may file lawsuits on behalf of the United States and receive a portion of the proceeds of a settlement or judgment. In this case, the relator will receive $990,000 as his share of the government’s recovery from Lockheed.
Assistant U.S. Attorney Sara Winslow is handling the case with the assistance of Kathy Terry. The settlement is the result of an investigation by the Department of Homeland Security Office of Inspector General and the U.S. Coast Guard Investigative Service. Technical aspects of the settlement were made possible by the verification and coordination of United States Navy engineers, led by the Principal Engineer from the Coast Guard.
Northern District of California Collects over $65 Million in Civil and Criminal Actions for U.S. Taxpayers in Fiscal Year 2017Read the Press Release
SAN FRANCISCO – Acting U.S. Attorney Alex G. Tse announced today that the Northern District of California collected $65,326,355.71 in criminal and civil actions in Fiscal Year 2017. Of this amount, $59,083,869.47 was collected in criminal actions and $6,242,486.24 was collected in civil actions.
Additionally, the Northern District of California worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $1,503,464,445.51 in cases pursued jointly with these offices. Of this amount, $2,378,828.59 was collected in criminal actions and $1,501,085,616.92 was collected in civil actions.
Overall, the Justice Department collected just over $15 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2017.
“Year in and year out, the United States Attorney’s Office delivers results for the people of the United States in the form of millions of dollars in recoveries from criminal and civil defendants,” said Acting U.S. Attorney Alex Tse. "This Office will continue the hard work of recouping victims’ losses from those who enrich themselves through crime and other violations of federal law.”
One example of the work being done in the Northern District of California involves criminal defendant Hien Minh Nguyen. Evidence in the criminal case showed that Nguyen stole at least $1,449,365 from the San Jose Diocese between 2005 and 2011. On October 3, 2017, after Nguyen was convicted of bank fraud and tax evasion charges, the district court ordered the defendant to pay $1,449,365 in restitution to the Diocese of San Jose, and an additional $434,518 in restitution to the IRS. The Office of the United States Attorney for the Northern District of California recovered the entire $1,883,883 in restitution from Nguyen.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Additionally, the U.S. Attorney’s office in the Northern District of California, working with partner agencies and divisions, collected $9,206,346 in asset forfeiture actions in FY 2017. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
Former Head of Barclays New York Foreign Exchange Operation Indicted for Orchestrating Multimillion-Dollar Front-Running SchemeRead the Press Release
Update: On March 4, 2019, Senior U.S. District Court Judge Charles Roberts Breyer of the Northern District of California granted the Rule 29 motion and granted an acquittal. Mr. Bogucki was acquitted on all charges.
SAN FRANCISCO – Robert Bogucki, the former head of Barclays Capital Inc.’s (Barclays) New York foreign exchange trading operation was charged yesterday in an indictment for his alleged role in a scheme to defraud a client of Barclays through a method commonly referred to as “front-running.” The charges relate to the manipulation of foreign exchange options in advance of an exceptionally large trade by the Palo Alto, California-based Hewlett-Packard Company (HP) in 2011.
Acting U.S. Attorney Alex G. Tse of the Northern District of California, Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, and Inspector General Jay N. Lerner of the Federal Deposit Insurance Corporation (FDIC) made the announcement.
Bogucki, 45, of East Setauket, New York, was charged in an indictment filed in the Northern District of California on Jan. 16, with one count of conspiracy to commit wire fraud and six counts of wire fraud. Bogucki will make his initial appearance on Wednesday, Jan. 17, at 2:00pm in Brooklyn, New York, before U.S. Magistrate Judge Cheryl L. Pollak of the Eastern District of New York.
“The indictment filed in this case alleges Bogucki and others corruptly manipulated the foreign exchange market for the benefit of his bank and his own pocket,” said Acting U.S. Attorney Tse. “This Office will continue to investigate and prosecute those who attempt to enrich themselves by corrupting our markets.”
“Robert Bogucki and others allegedly not only betrayed his client’s confidences, but also risked undermining public trust in the foreign exchange options market,” said Acting Assistant Attorney General Cronan. “The Criminal Division and our law enforcement partners remain committed to protecting American interests by investigating and prosecuting sophisticated schemes such as the one alleged in this indictment.”
“The indictment returned today charges a fraudulent manipulation scheme where the defendant betrayed Barclays’ client by lying and misusing the client information, and then masked the activities,” said Inspector General Lerner. “We are pleased to work with our law enforcement partners in investigating these matters and protecting the integrity of the banking system against such alleged abuses.”
According to the indictment, in September and October 2011, Bogucki misused information provided to him by HP, which had hired Barclays to execute a foreign exchange transaction related to the planned acquisition of a UK-based company. Barclays was selected to execute the foreign exchange transaction – which required the sale of 6 billion British pounds worth of options – in September 2011. The defendant and other Barclays employees assured HP and its employees that they understood the need to keep the planned transaction, which was exceptionally large, and therefore “market-moving,” confidential. Instead, Bogucki and other Barclays employees allegedly used the confidential information they received to manipulate the price of “volatility,” a metric that affects the value of foreign exchange options. During conversations with Bogucki, one Barclays trader stated that he and other traders would “bash the sh*t out of” and “spank the market” to depress the price of volatility. Other Barclays traders also discussed “hammer[ing] the market lower” in order to decrease the value of the HP’s options.
The indictment alleges that, as part of the scheme, Bogucki made misrepresentations to HP and its employees about Barclays’ activities and the state of the options market that concealed the self-serving nature of Barclays’ actions. Specifically, the indictment alleges that Bogucki directed options trading in a way that was designed to depress the price of volatility, to the benefit of Barclays and at HP’s expense.
The charges in the indictment are merely allegations, and the defendant is presumed innocent unless proven guilty beyond a reasonable doubt in a court of law. This is the second indictment brought against the head of a foreign exchange desk of a global financial institution related to the Criminal Division’s ongoing investigation of fraud and manipulation in the foreign exchange markets.
Assistant U.S. Attorney Robert Leach, Assistant Chief Brian Young of the Criminal Division’s Fraud Section, and Department of Justice Trial Attorney Justin Weitz are prosecuting the case. The investigation is being conducted by the FDIC’s Office of Inspector General.
Three Individuals, Including Former General Manager and Controller, Charged in Embezzlement Scheme at Sonnen MotorcarsRead the Press Release
SAN FRANCISCO – Amir Bakhtiari, Arlette Casino, and Austin Caba were arrested today for their respective roles in an alleged conspiracy and fraud scheme, announced Acting United States Attorney Alex G. Tse; Federal Bureau of Investigation (FBI) Special Agent in Charge John F. Bennett; and Internal Revenue Service, Criminal Investigation (IRS-CI), Special Agent in Charge Michael T. Batdorf.
According to the indictment, from at least 2010 to 2016, Bakhtiari, 50, a resident of Newport Beach, Calif. and formerly of Marin County, Calif., orchestrated an embezzlement scheme at Sonnen Motorcars (“Sonnen”). Sonnen owned and operated three car dealerships in Marin County—Sonnen Volkswagen, Audi Marin, and Porsche Marin. From 2009 to 2016, Bakhtiari managed the Volkswagen and Audi dealerships. Bakhtiari allegedly used his role to initiate a scheme wherein Sonnen made payments on fraudulent invoices to fake advertising vendors who then forwarded the majority of the proceeds from Sonnen back to Bakhtiari. The indictment alleges that Casino, 47, a resident of Santa Rosa, Calif., who served as controller of Sonnen from 2013 to 2016, and Caba, 38, a resident of Burlingame, Calif., who controlled one of the fake advertising vendors, conspired with Bakhtiari and participated in the scheme since at least 2013.
According to the indictment unsealed today, Bakhtiari caused others to create shell entities with names suggesting that the shell companies were in the business of advertising. The shell companies were controlled by friends or associates of Bakhtiari’s, including Caba. These entities were Advision Advertisers, Elite Marketing and Advertising, Pacific Blue Advertising, and ARC Sierra Promotional & Incentive Co. (ARC Sierra). The indictment alleges ARC Sierra was controlled by Caba. Bakhtiari then allegedly created or caused the creation of fake invoices from each of the fake advertising vendors to Sonnen, purporting to bill Sonnen for advertising work. Along with the controller, which from 2013 to 2016 was Casino, Bakhtiari approved the payments on these fake invoices from Sonnen’s bank accounts, in the form of checks written to the fake vendors. In sum, the indictment alleges that from 2010 to 2016, Bakhtiari directed approximately $6.3 million in fraudulent transfers in this manner. When the money reached the vendor bank accounts, the individuals who controlled these accounts wrote checks back to Bakhtiari for a majority of the funds. In total, Bakhtiari received approximately $3.6 million via checks in this manner. Caba also allegedly used funds embezzled from the ARC Sierra bank account to pay the balance on an American Express credit card account that he shared with Bakhtiari. The indictment alleges Bakhtiari and Caba spent approximately $1.7 million on this American Express credit card account.
According to the indictment, Bakhtiari and Casino also initiated other fraudulent payments to themselves, including bonuses that Bakhtiari falsely claimed were funded by the corporate offices of Volkswagen or Audi. Bakhtiari and Casino approved the payment of these fraudulent bonuses, knowing they were not authorized by the majority owner of Sonnen Motorcars.
Bakhtiari, Casino, and Caba were all charged with conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349, and wire fraud, in violation of 18 U.S.C. § 1343. Bakhtiari and Caba were also charged with conspiracy to engage in monetary transactions in property derived from specified unlawful activity, in violation of 18 U.S.C. § 1956(h), and engaging in monetary transactions in property derived from specified unlawful activity, in violation of 18 U.S.C. § 1957.
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 maximum penalty for each count of conspiracy to commit wire fraud and wire fraud is twenty years’ imprisonment and a $250,000 fine. The maximum penalty for each count of conspiracy to engage in monetary transactions in property derived from specified unlawful activity and engaging in monetary transactions in property derived from specified unlawful activity is ten years’ imprisonment and a $250,000 fine. 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.
All three defendants were arrested today in California by the FBI – Bakhtiari was arrested in Newport Beach, Caba was arrested in Burlingame, and Casino was arrested in Santa Rosa.
Assistant U.S. Attorney Benjamin Kingsley is prosecuting the case with the assistance of Bridget Kilkenny. The prosecution is the result of an investigation by the FBI and the IRS-CI.
Mendocino County Resident Indicted for Illegally Importing Leopard Hunting Trophy from South AfricaRead the Press Release
OAKLAND - A federal grand jury indicted Adam Thatcher Lawrence today with importing wildlife contrary to law and mislabeling wildlife intended for importation, announced Acting United States Attorney Alex G. Tse and United States Fish and Wildlife Service Office of Law Enforcement Region 8 Assistant Special Agent in Charge Daniel Crum.
According to the indictment, Lawrence, 38, of Willits, Calif., traveled to the Republic of South Africa in August 2011, where he hunted and killed a leopard. Leopards are a protected species under both the Endangered Species Act, 16 U.S.C. § 1531 et seq., and the Convention on International Trade in Endangered Species of Wild Fauna and Flora, an international treaty to which the United States, South Africa, and Mozambique are signatories.
The indictment alleges Lawrence did not have the required permits to kill the leopard in South Africa, or to bring the leopard back into the United States. Lawrence allegedly secretly transported the leopard’s skin and skull into the Republic of Mozambique in May 2012 and thereafter falsely claimed to the U.S. Fish and Wildlife Service that he had hunted and killed the leopard in Mozambique in 2012. Lawrence then allegedly applied for permit paperwork from Mozambique, South Africa, and the United States in order to import the leopard skin and skull into the United States; each document falsely stated that the leopard was killed in Mozambique. The indictment alleges that in April 2013, Lawrence imported the leopard parts into the United States based on his false statements. In sum, Lawrence was charged with one count of importing wildlife contrary to law, in violation of 18 U.S.C. § 545 and 18 U.S.C. § 2(b), and one count of mislabeling wildlife intended for importation, in violation of 16 U.S.C. §§ 3372(d) and 18 U.S.C. § 2(b).
Lawrence is scheduled to make his initial appearance in federal court in Oakland on January 18, 2018.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Lawrence faces a maximum sentence of twenty years’ imprisonment, and a fine of $250,000, plus restitution, for a violation of 18 U.S.C. § 545 and a maximum sentence of five years’ imprisonment, and a fine of $250,000, plus restitution, for a violation of 16 U.S.C. §§ 3372(d). 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 Katherine Lloyd-Lovett is prosecuting the case with the assistance of Vanessa Quant. The prosecution is the result of a three-year investigation by the United States Fish and Wildlife Service Office of Law Enforcement.
Southbay Resident Sentenced to over Three Years in Prison for Role in Conspiracy to Transport Stolen Wine in Interstate CommerceRead the Press Release
SAN JOSE - Alfred Georgis was sentenced this morning to 37 months in prison for his role in a conspiracy to transport stolen goods in interstate commerce, announced Acting United States Attorney Alex G. Tse and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The sentence was handed down by the Honorable Beth L. Freeman, United States District Judge, following a guilty plea in which Georgis admitted to conspiring in the transportation of high-end wines stolen from a number of businesses in the Bay Area, including, The French Laundry in Yountville, Calif., and Alexander’s Steakhouse in Cupertino, Calif., and which he sold to a buyer in North Carolina.
According to his plea agreement, Georgis, 53, of Mountain View, conspired with Davis Kiryakoz, 44, of Modesto, and others, to steal approximately 29 bottles of high-end wines from Alexander’s Steakhouse in the early morning hours of November 8, 2014. Georgis acknowledged the wines had a value of approximately $32,000. Georgis admitted he and Kiryakoz made arrangements to sell the wines to a buyer in North Carolina and shipped approximately 17 bottles, worth about $25,000, of the wine to the buyer. In addition, Georgis admitted conspiring with Kiryakoz to steal approximately 110 bottles of high-end wines, valued at the time at approximately $549,447, from The French Laundry in the early morning hours of December 26, 2014. Georgis and Kiryakoz sold approximately 63 bottles of the stolen wines, valued at approximately $221,374, to the same buyer in North Carolina, and transported some of those wines on December 26, 2014, and December 29, 2014. As part of his plea, Georgis also agreed that conduct relevant to his sentencing included the transportation of wines valued at $290,000 stolen shortly after midnight on March 27, 2013, from Fine Wines International in San Francisco and sold to a buyer in North Carolina.
A federal grand jury charged Georgis and Kiryakoz with one count of conspiracy to transport stolen goods, in violation of 18 U.S.C. § 371, and two counts of transportation of stolen goods, in violation of 18 U.S.C. §§ 2314 and 2. Both defendants pleaded guilty to the conspiracy charge and the remaining charges were dismissed. On March 28, 2017, Judge Freeman sentenced Kiryakoz to 15 months in prison, three years of supervised release, and ordered that he pay $585,715 in restitution for his role in the scheme. This morning, in addition to the prison term, Judge Freeman ordered that Georgis also pay $585,715 in restitution, jointly and severally with his co-defendant, and to serve three years of supervised release as part of his sentence.
Assistant U.S. Attorney Cynthia Frey is prosecuting the case with the assistance of Elise Etter. The prosecution is the result of an investigation by the Federal Bureau of Investigation and the Napa County Sheriff's Office, with assistance from the Santa Clara County Sheriff's Office, Los Gatos Monte Sereno Police Department, San Francisco Police Department, Walnut Creek Police Department, and Carmel Police Department.
Eight Defendants Sentenced to Prison for Crimes Charged in Shrimp Boy IndictmentRead the Press Release
SAN FRANCISCO- Defendants Leslie Yun, James Pau, Rinn Roeun, Kevin Siu, Michael Mei, Elaine Liang, Tina Liang, and Barry House were sentenced for crimes committed in connection with the same indictment that eventually led to the trial and conviction of Raymond “Shrimp Boy” Chow, announced Acting United States Attorney Alex G. Tse and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The sentences were handed down yesterday by the Honorable Charles R. Breyer, U.S. District Judge, after the defendants each pleaded guilty to their respective roles in a scheme that resulted in a 230-count Second Superseding indictment filed by a federal grand jury on January 29, 2015.
The Second Superseding indictment charged Chow and 28 other individuals with crimes including money laundering, drug trafficking, trafficking in stolen liquor, firearms trafficking, and a host of other offenses. In addition, seventeen of the defendants were charged with conspiring to use a San Francisco Chinatown-based organization, the Chee Kung Tong, or CKT, to conduct the affairs of an enterprise through a pattern of racketeering activity. At yesterday’s sentencing, Judge Breyer announced his finding that the government demonstrated by clear and convincing evidence that a part of the membership of CKT had engaged in a criminal racketeering enterprise as alleged in the Second Superseding indictment. In addition, Judge Breyer found that seven defendants—George Nieh, Leslie Yun, James Yat Wah Pau, Michael Mei, Elaine Liang, Tina Liang, and Kevin Siu—conspired with that enterprise.
The Second Superseding indictment was amended and eventually led to the trial and January 8, 2016, conviction of Raymond Chow, 56, of San Francisco. The jury found Chow guilty of every one of the 162 charges leveled against him.
Each defendant sentenced yesterday pleaded guilty prior to the Chow trial to crimes alleged in the Second Superseding indictment. In most cases, the defendant pleaded guilty to fewer than all the charges pending against that defendant. The offenses to which the defendants did not plead guilty remain pending. As to all such charges, the Second Superseding indictment merely alleges that crimes have been committed, and all the defendants are presumed innocent until proven guilty beyond a reasonable doubt.
Judge Breyer handed down these defendants’ sentences as set out below:
Defendant
Age/ Residence
Charged in the Second Superseding Indictment
Crimes to Which the Defendant Pleaded Guilty
Sentence Imposed/ Charges pending
Leslie Yun
51/Oakland
18 U.S.C. § 1962
conspiracy to engage in RICO (1 count)
18 U.S.C. § 1956(a)(3)(A) money laundering
(34 counts)
18 U.S.C. § 371
conspiracy to traffic contraband cigarettes
(3 counts)
21 U.S.C. § 846 Possession, manufacture and distribution of marijuana
(2 counts)
18 U.S.C. § 1956(a)(3)(A)
(5 counts)
18 U.S.C. § 371
(3 counts)
21 U.S.C. § 846
(3 counts)
84 months in prison
18 U.S.C.
§ 1962
James Pau
58/Oakland
18 U.S.C. § 1962
conspiracy to engage in RICO
(1 count)
18 U.S.C. § 1956(a)(3)(A) money laundering
(18 counts)
18 U.S.C. § 371
conspiracy to traffic contraband cigarettes (2 counts)
21 U.S.C. § 846
Possession, manufacture and distribution of marijuana
(1 count)
18 U.S.C. § 371
(2 counts)
72 months in prison
All other charges remain pending
Rinn Roeun
34/San Francisco
18 U.S.C. § 922(a) weapons trafficking
(4 counts)
18 U.S.C. § 371
conspiracy to trafficking in weapons
(1 count)
18 U.S.C. § 1958
murder for hire
(1 count)
18 U.S.C. § 922(a)
(2 counts)
72 months in prison
All other charges remain pending
Barry House
48/Pittsburg CA
18 U.S.C. § 922(a) weapons trafficking
(2 counts)
18 U.S.C. § 371
conspiracy to trafficking in weapons
(1 count)
18 U.S.C. § 922(g)(1)
felon in possession
(2 counts)
18 U.S.C. § 922(g)(1)
(1 count)
48 months in prison
All other charges remain pending
Michael Mei
33/San Francisco
18 U.S.C. § 1962 conspiracy to engage in RICO
(1 count)
21 U.S.C. § 841(b)(1)(B) possession and manufacture of marijuana (2 counts)
21 U.S.C. § 841(b)(1)(B)
(2 counts)
60 months in prison
All other charges remain pending
Elaine Liang
55/San Francisco
18 U.S.C. § 1956(a)(1)(A) money laundering
(16 counts)
18 U.S.C. § 1962 conspiracy to engage in RICO
(1 count)
18 U.S.C. § 1956(a)(1)(A)
(1 count)
36 months in prison
All other charges remain pending
Tina Liang
43/San Francisco
18 U.S.C. § 1962 conspiracy to engage in RICO
(1 count)
18 U.S.C. § 371
conspiracy to transport stolen liquor
(1 count)
21 U.S.C. § 841(a)(1) possession and manufacture of marijuana
18 U.S.C. § 371
(1 count)
21 U.S.C. § 841(a)(1)
(1 count)
18 months in prison
18 U.S.C. § 1962 (one count) remains pending
All other charges remain pending
Kevin Siu
34/Daly City
18 U.S.C. § 1962 conspiracy to engage in RICO
(1 count)
18 U.S.C. § 1956(a)(1)(A) money laundering
(24 counts)
18 U.S.C. § 1956(a)(1)(A)
(8 counts)
12 months and 1 day in prison
All other charges remain pending
In addition to the prison terms, Judge Breyer sentenced each defendant identified above, except for Micheal Mei, to three years of supervised release. Mei was sentenced to four years supervised release. The last remaining defendant to be sentenced is George Nieh; Judge Breyer scheduled Nieh’s sentencing hearing for July 11, 2018.
Assistant U.S. Attorneys William Frentzen, Susan Badger, S. Waqar Hasib, Kimberly Hopkins, and David Countryman prosecuted the case with the assistance of Rosario Calderon, Kurk Kosek, Ana Guerra, Marina Ponomarchuk, Victoria Etterer, Lance Libatique, and Bridget Kilkenny. The prosecution is the result of an investigation by Federal Bureau of Investigation; the U.S. Marshal Service, San Francisco Police Department Gang Task Force; Oakland Police Department; Internal Revenue Service, Criminal Investigation; Antioch Police Department; New York Police Department; Mercer County New Jersey Sheriff's Office; and the San Francisco and Alameda County Sheriff’s Departments.
Alex G. Tse Acting United States Attorney for the Northern District of CaliforniaRead the Press Release
SAN FRANCISCO – This morning, upon Brian Stretch’s resignation, Alex G. Tse became the Acting United States Attorney for the Northern District of California in accordance with the Vacancy Reform Act. Mr. Tse formerly served as the First Assistant United States Attorney under Brian Stretch and the Chief of the Office’s Civil Division from 2012 – 2015. Previously, Mr. Tse served as an Assistant United States Attorney in the Northern District of California from 1994 – 2006. Between 2006 and 2012 Mr. Tse worked for the San Francisco City Attorney’s Office.
South Carolina Man Pleads Guilty to Conspiracy to Distribute Marijuana and Identity TheftRead the Press Release
SAN FRANCISCO – Peyton Erwin Eidson pleaded guilty in federal court in San Francisco today to aggravated identity theft and conspiracy to distribute marijuana, announced United States Attorney Brian J. Stretch, Special Agent in Charge Matthew Perlman of the U.S. State Department’s Diplomatic Security Service (DSS) San Francisco Field Office, and Drug Enforcement Administration (DEA) Special Agent in Charge John J. Martin. The plea was accepted by the Honorable Susan Illston, U.S. District Judge.
In pleading guilty, Eidson, 73, of Aiken, S.C., admitted that he had conspired with others to import thousands of pounds of marijuana from Thailand into the United States in the mid-80s, and then to distribute that marijuana once it arrived. Eidson further admitted that, after he and his co-conspirators were caught, he obtained a passport using another person’s identity and then fled the country. Eidson was a fugitive for 32 years. The State Department identified and located Eidson in 2011, and in 2017, he was returned to the United States to face the pending drug and passport fraud charges.
“Criminals who travel far and hide for a long time will not be shielded from prosecution,” said U.S. Attorney Stretch. “We commend the steadfast work of our federal law enforcement partners whose hard work has brought this criminal to justice.”
“The successful return and prosecution of this longtime fugitive from halfway around the world are a clear demonstration of both the investigative diligence and global reach of the Diplomatic Security Service,” said DSS Special Agent in Charge Perlman. DEA Special Agent in Charge Martin agreed: “This case demonstrates that DEA remains willing and able to support the prosecution of those who violate our nation’s drug laws, even when they manage to evade capture for three decades.”
Eidson was indicted by a federal grand jury on January 14, 1985. He was charged with conspiracy to import marijuana, in violation 21 U.S.C. § 963; conspiracy to distribute marijuana, in violation of 21 U.S.C. § 846; and two counts of distribution and possession of marijuana with intent to distribute it, in violation of 21 U.S.C. § 841. Under today’s agreement, Eidson pleaded guilty to the conspiracy to distribute marijuana charge. A federal grand jury also indicted Eidson on September 15, 2017, in a second case charging him with two counts of passport fraud, in violation of 18 U.S.C. § 1542; two counts of aggravated identity theft, in violation of 18 U.S.C. § 1028A; and one count of conspiracy to commit passport fraud, in violation of 18 U.S.C. § 371. Under today’s plea agreement, Eidson pleaded guilty to one count of aggravated identity theft.
Eidson remains in custody pending sentencing. Judge Illston scheduled his sentencing hearing for April 27, 2018. The maximum statutory penalty for the drug charge is 15 years in prison, followed by 3 years of parole, and a $125,000 fine. The penalty for the passport fraud case is two years in prison consecutive to any other sentence, a $250,000 fine, and one year of supervised release. However, any sentence will be imposed by the court only after consideration of and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
This case is the product of an extensive investigation by the Organized Crime Drug Enforcement Task Force, a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state, and local law enforcement agencies.