Northern District of California
Press releases recorded for this federal judicial district.
Sonoma Man Indicted for $1.6 Million Fraud SchemeRead the Press Release
SAN FRANCISCO - A federal Indictment charging Michael Thomas Hamilton, a/k/a Thomas Smith, with 22 counts of mail fraud, wire fraud, and money laundering was unsealed today in federal court, announced United States Attorney Melinda Haag.
Hamilton, 49, of Sonoma, California, was indicted by a federal grand jury on November 19, 2013. According to the Indictment, Hamilton engaged in a scheme to obtain money and property by means of materially false and fraudulent pretenses, representations, and promises regarding a book-selling business, Small Leaf, Hamilton claimed to own and operate. Hamilton represented to prospective investors that Small Leaf was a company engaged in the sale of “proprietary Books, etc. on Amazon.com and other internet websites” and that, for their investment, they would receive intellectual property rights for a number of “performing products of Small Leaf Inc.” By October 2013, according to the Indictment, Hamilton had solicited approximately $1,616,000 from more than 20 investors in California, Oregon, and Massachusetts.
As part of the scheme to defraud, Hamilton allegedly misrepresented that investors would earn high rates of return through the sale of books on Amazon and other platforms; that, if investors did not recoup their investment by a certain date, Small Leaf would reimburse the investor with interest of 10%; and that his book-selling business generated over one million dollars in yearly revenue. Hamilton also allegedly made periodic payments to investors, which he informed investors were royalties earned on the sale of books through Amazon. According to the Indictment, however, Hamilton’s book-selling business generated very little revenue, and most of the payments made to investors were from investments by new victims or additional investments by existing victims.
Hamilton was arrested on December 3, 2013, in Sonoma, California. He made his initial appearance in federal court in San Francisco today, when he was released on bond. Bail was set at $75,000. Hamilton’s next scheduled appearance is on December 12, 2013, at 9:30 a.m., before The Honorable Maria-Elena James, United States Magistrate Judge in San Francisco.
The maximum statutory penalty for each count of mail and wire fraud, in violation of 18 U.S.C. §§ 1341 and 1343, is 20 years’ imprisonment and a fine of $250,000 or twice the gross gain or loss from the offense, plus restitution. The maximum statutory penalty for each count of money laundering, in violation of 18 U.S.C. § 1956, is 20 years’ imprisonment and a fine of $500,000 or twice the value of the property involved in the transaction. 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.
Robert S. Leach is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Mary Mallory and Rayneisha Booth. The prosecution is the result of a one-year investigation by the Federal Bureau of Investigation.
Please note, an indictment contains only allegations against a person and, as with all defendants, Michael Thomas Hamilton must be presumed innocent unless and until proven guilty.
United States Attorney Announces Sentencings in Two Bankruptcy Fraud CasesRead the Press Release
SAN FRANCISCO – United States Attorney Melinda Haag announced that defendants in two unrelated cases were sentenced to terms of imprisonment for committing bankruptcy fraud.
In the first case, Patricia Bonavito was sentenced on November 13, 2013, to six months in prison for giving false statements in a bankruptcy proceeding.
Bonavito pleaded guilty on August 20, 2013 to making numerous false statements, under the penalty of perjury, in furtherance of a bankruptcy petition through which she sought relief of $308,249.00 in debts. According to the plea agreement, Bonavito admitted to knowingly making these false statements concerning matters material to the determination of whether the Bankruptcy Court would forgive her debt. The false statements included the following: Bonavito denied that anyone owed her any money, when in fact someone owed her a 50% interest in a $150,000 promissory note; she denied having any other income or transferring any property during the two years prior to filing her bankruptcy petition, when in fact she had received more than $500,000 from the sale of properties in San Francisco and New York; she denied that her name was on any real property not listed on her original petition, when in fact she purchased a property in New York for $385,000 shortly after filing for bankruptcy in San Francisco; finally Bonavito denied giving any money to friends or relatives in the year prior to filing, when in fact she had transferred $200,000 to her daughter mere months before filing.
Bonavito, 59, formerly of San Francisco and currently from New York City, was indicted by a federal Grand Jury on April 17, 2013. She was charged with eight counts of false statements in bankruptcy proceedings, in violation of 18 U.S.C. § 152(3), and one count of false testimony under oath in a bankruptcy proceeding, in violation of 18 U.S.C. § 152(2).
Bonavito’s sentence was handed down by The Honorable Judge William H. Alsup, United States District Court Judge, in San Francisco following a guilty plea on four counts of false statements in bankruptcy proceedings, in violation of 18 U.S.C. § 152(3). Judge Alsup also sentenced the defendant to a three year period of supervised release. The defendant will begin serving the sentence on January 7, 2014.
Hallie Hoffman is the Assistant U.S. Attorney who is prosecuting the Bonavito case with the assistance of Bridget Kilkenny. The prosecution is the result of an investigation by the Federal Bureau of Investigation with assistance from the United States Bankruptcy Trustee.
In a second case, Walter Bruce Harrell was sentenced on November 26, 2013, to ten months in prison for bankruptcy fraud and for giving false statements in a bankruptcy proceeding.
Harrell pleaded guilty on August 2, 2013 to filing bankruptcy petitions in furtherance of a scheme to defraud creditors owning mortgages and to making false statements in a bankruptcy petition. According to the plea agreement and indictment, the defendant operated a scheme in which he would pay individuals to file bankruptcy petitions in U.S. Bankruptcy Court. At the same time, the defendant had his clients – who were homeowners facing foreclosures of their properties – deed fractional interests in those properties to the bankruptcy filers. When the bankruptcy petitions were filed, Harrell would notify the creditors who were seeking to foreclose on his clients’ properties that the properties were part of a bankruptcy. Because of the “automatic stay” provisions of the U.S. Bankruptcy Code, the creditors were prohibited from proceeding with any foreclosure sales. Instead, the creditors were required to have their attorneys file motions to lift that automatic stay in the Bankruptcy Court. Although these motions were invariably granted, Harrell’s actions caused delays in the foreclosure process and caused the creditors to incur attorneys’ fees in moving to lift the automatic stay.
Harrell, 72, of Montara, was indicted by a federal Grand Jury on February 14, 2013. He was charged with eight counts of bankruptcy fraud, in violation of 18 U.S.C. § 157, and two counts of making false statements in a bankruptcy proceeding, in violation of 18 U.S.C. § 152(3).
“The integrity of evidence received by our bankruptcy courts is critical to the courts’ ability to function effectively,” United States Attorney Melinda Haag stated. “This office will vigorously prosecute people who intentionally submit false and misleading information in federal bankruptcy proceedings.”
Harrell’s sentence was handed down by The Honorable Judge Susan Illston, United States District Court Judge, in San Francisco following a guilty plea on one count of bankruptcy fraud, in violation of 18 U.S.C. § 157, and one count of making false statements in a bankruptcy proceeding, in violation of 18 U.S.C. § 152(3). Judge Illston also sentenced the defendant to a three year period of supervised release. The defendant will begin serving the sentence on January 31, 2014.
Kyle F. Waldinger is the Assistant U.S. Attorney who is prosecuting the Harrell case with the assistance of Rayneisha Booth. The prosecution is the result of an investigation by the Federal Bureau of Investigation, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), and the Alameda County District Attorney’s Office, with assistance from the United States Bankruptcy Trustee.
(Bonavito indictment )
(Harrell indictment )
San Francisco Man Sentenced to Twelve Months for Structuring Currency Transactions to Evade Reporting RequirementsRead the Press Release
SAN FRANCISCO – Tailiang Li was sentenced today to twelve months in prison for unlawfully structuring cash transactions, United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation Special Agent in Charge José M. Martinez announced.
Li, 63, of San Francisco, pleaded guilty on August 6, 2013. According to the plea, Li knowingly structured financial transactions at a domestic financial institution with the purpose of avoiding the currency reporting requirements. Between February 14, 2008 and May 1, 2009, Li purchased, with cash, 174 - $1,000 money orders ($174,000) from the United States Postal Service. He purchased money orders from the following post offices: Millbrae Main Station, Chinatown Station, Sunset Station, Irving Station, Golden Gate Station, Steiner Station, and Geary Station. He typically purchased money orders from at least two or more post offices in one day. However, if he did purchase money orders from the same post office on the same day, he took particular care not to purchase from the same window clerk.
Li was charged on February 12, 2013 with 20 counts of structuring transactions to evade reporting requirements. He pleaded guilty to 2 counts. Li was also ordered to forfeit $174,000. This sum represents the funds that were involved in the structuring violations.
Thomas Moore is the Assistant United States Attorney who is prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
(Li indictment )
Marin County Man Sentenced to 142 Months in Prison for Trafficking MethamphetamineRead the Press Release
SAN FRANCISCO – Jesse James Starr, was sentenced on November 25, 2013, to nearly 12 years in prison for trafficking methamphetamine, United States Attorney Melinda Haag announced.
Starr, 40, of San Rafael, pleaded guilty on August 30, 2013, to a violation of 21 U.S.C. § 841(a)(1). According to the plea agreement, Starr admitted that he possessed three ounces of methamphetamine in March of 2013, and almost four ounces of methamphetamine in August of 2012. Starr also admitted that, in March of 2013, he fled from police and crashed his car during the pursuit. Starr’s criminal history, as well as his history of leading police in high speed pursuits, contributed to the length of his sentence.
“This case shows the importance my office places on the community’s safety,” United States Attorney Melinda Haag said. “It also shows the importance of the partnership between federal and state law enforcement. The Marin County Major Crimes Task Force identified Starr as a dangerous, repeat offender, and my office worked with the Task Force to prosecute this case.”
Marin County District Attorney Edward S. Berberian, Jr., similarly called Starr’s prosecution “an excellent example of state and federal authorities working together to remove a dangerous narcotics distributor from the streets,” and thanked the U.S. Attorney’s Office for its efforts in prosecuting the case.
The sentence was handed down by the Honorable Charles R. Breyer, United States District Court Judge. Judge Breyer also sentenced Starr to 5 years of supervised release. Starr was in custody at the time of sentencing and will begin serving his sentence immediately.
The prosecution is the result of a joint investigation by the Marin County Major Crimes Task Force, led by Marin County Deputy Sheriff Mike Dobbins, and the federal Drug Enforcement Administration, led by Special Agent Geoff Kolanowski.
(Starr indictment )
Forty-Fifth Defendant in Operation Garlic Press SentencedRead the Press Release
SAN JOSE – Zanaida Perales, one of 45 defendants charged federally in Operation Garlic Press, a multi-agency law enforcement initiative that was conducted in Gilroy, California in October 2011, was sentenced yesterday in federal court, United States Attorney Melinda Haag announced.
The sentence was handed down by The Honorable D. Lowell Jensen, United States District Court Judge, in San Jose. Perales pleaded guilty on August 1, 2013, to using an interstate facility in furtherance of a drug felony, in violation of 21 U.S.C. Section 843(b). She was sentenced to 36 months in prison to be followed by one year of supervised release.
Another Garlic Press defendant, Adolpho Cornejo Vasquez, absconded after receiving pretrial release, and remains a fugitive. He is charged with conspiracy to distribute methamphetamine, and distribution of methamphetamine. A warrant has issued for his arrest in criminal case number CR 11-00658 LHK. Anyone with information on his whereabouts should contact the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) at (408) 882-5200 or the Gilroy Police Department at (408) 846-0300.
In March, 2010, the ATF began an undercover operation with the Gilroy Police Department and the California Highway Patrol. That operation targeted individuals, including gang members, who commit violent criminal acts. The investigation focused on individuals operating in the California counties of Santa Clara, Santa Cruz, Monterey and San Benito. Prosecutors from the United States Attorney’s Office and the Santa Clara District Attorney’s Office, working together, charged a total of 118 defendants. The federal operation’s primary objective was to target subjects who traffic in firearms and narcotics, primarily methamphetamine, while the state focused on vehicles that had been stolen or were the subject of insurance fraud. Among the items seized were 86 vehicles, 52 firearms (including several sawed off shotguns, stolen firearms, and firearms with obliterated serial numbers) and methamphetamine, much of which was extremely pure (some100%), with a street value of more than $100,000.
In addition to Perales, 44 other federal defendants in this case have been convicted and sentenced as detailed below. For reference, Title 21 offenses address distribution and/or possession with the intent to distribute controlled substances (in these cases methamphetamine); Title 18 and Title 26 offenses address illegal possession and/or sale of firearms.
- Arianna Baca pled guilty on July 26, 2012, to violations of 21 USC 841 and 846. Baca was sentenced November 1, 2012, to 78 months in prison, to be followed by 48 months of supervised release
- Izaeus Banda pled guilty on March 12, 2012, to a violation of 21 USC 841. Banda was sentenced on June 4, 2012, to 60 months in prison, to be followed by 60 months of supervised release.
- Scott Burns pled guilty on March 12, 2012, to violations of 18 USC 922(g)(1), 26 USC 5861, and 21 USC 841. Burns was sentenced on June 4, 2012, to 100 months in prison, to be followed by 60 months of supervised release.
- Frank Cardenas pled guilty on April 23, 2012, to violations of 18 USC 922(g)(1) and 21 USC 841. Cardenas was sentenced on July 9, 2012, to 60 months in prison to be followed by 60 months of supervised release.
- Arturo Cervantes pled guilty on April 2, 2012, to violations of 26 USC 5861 and 21 USC 841. Cervantes was sentenced on August 6, 2012, to 60 months in prison to be followed by 60 months of supervised release.
- Christina Chavez, pled guilty on Aug 6, 2012, to a violation of 21 USC 844(a). Chavez was sentenced on November 5, 2012, to 24 months in prison to be followed by 12 months of supervised release.
- Yvonne Chavez pled guilty on July 9, 2012, to violations of 21 USC 841 and 846. Chavez was sentenced on February 25, 2013, to 96 months in prison to be followed by 60 months of supervised release.
- Juan Chavez-Ornelas pled guilty on March 5, 2012, to violations of 21 USC 841 and 846, as well as 8 USC 1326. Chavez-Ornelas was sentenced on August 6, 2012 to 87 months in prison, to be followed by 60 months of supervised release.
- Rodolfo Contreras pled guilty on March 14, 2012, to a violation of 21 USC 841. Contreras was sentenced on May 30, 2012, to 60 months in prison, to be followed by 60 months of supervised release.
- Melissa Duarte pled guilty on July 19, 2012, to violations of 21 USC 841 and 846. Duarte was sentenced on February 14, 2013 to 74 months in prison, to be followed by 48 months of supervised release.
- Dagoberto Duran pled guilty on March 22, 2012, to violations of 21 USC 841 and 846. Duran was sentenced on August 9, 2012 to 72 months in prison, to be followed by 60 months of supervised release.
- Desiree Flores pled guilty on June 28, 2012, to violations of 21 USC 841 and 846. Flores was sentenced on November 15, 2012, to 60 months in prison, to be followed by 60 months of supervised release.
- Joshua Flores pled guilty on March 7, 2012, to violating 21 USC 841. He was sentenced on May 23, 2012, to 180 months in prison, to be followed by120 months of supervised release.
- Raymond Gallegos pled guilty on Oct. 1, 2012, to violations of 21 USC 841; and 846. He was sentenced on February 23, 2012, to 100 months in prison, to be followed by120 months of supervised release.
- Adrian Gamino pled guilty on Dec. 21, 2011, to violations of 21 USC 841 and 846. He was sentenced on March 7, 2012, to 240 months in prison, to be followed by120 months of supervised release.
- Lorenzo Garcia pled guilty on April 18, 2012, to violations of 21 USC 841 and 846. He was sentenced on June 5, 2013, to 120 months in prison, to be followed by 60 months of supervised release.
- Jose Gonzalez pled guilty on Aug. 29, 2012, to violations of 18 USC 922(g)(1) and 21 USC 841 and 846. He was sentenced on January 23, 2013, to 80 months in prison, to be followed by 48 months of supervised release.
- Miguel Gonzalez pled guilty on December 21, 2011, to violations of 21 USC 841 and 846. He was sentenced on March 7, 2012 to 240 months in prison, to be followed by 120 months of supervised release.
- Gustavo Hernandez pled guilty on May 14, 2012, to violations of 21 USC 841 and 846. He was sentenced on Sept. 10, 2012 to 60 months in prison, to be followed by 48 months of supervised release.
- Maria Hernandez pled guilty on October 31, 2012, to violations of 21 USC 841 and 846. She was sentenced on March 20, 2013, to 60 months in prison, to be followed by 48 months of supervised release.
- Simon Hernandez pled guilty on May 21, 2012, to violating 21 USC 841. He was sentenced on Aug 6, 2012, to 84 months in prison, to be followed by 120 months of supervised release.
- Frank Herrera pled guilty on April 2, 2012, to violations of 18 USC 922(g)(1) and 922(k). He was sentenced on June 18, 2012, to 57 months in prison, to be followed by 36 months of supervised release.
- Henry Jones pled guilty on March 5, 2012, to violations of 18 USC 922(g)(1) and 922(k). He was sentenced on May 21, 2012, to 57 months in prison, to be followed by 36 months of supervised release.
- Ricardo Landecho pled guilty on Dec. 3, 2012, to violations of 21 USC 841and 846. He was sentenced on April 18, 2013, to 100 months in prison, to be followed by 48 months of supervised release.
- Frank Machado pled guilty on Jan. 19, 2012, to violations of 21 USC 841 and 846. He was sentenced on March 22, 2012 to 60 months in prison, to be followed by 60 months of supervised release.
- Diana Mayoral pled guilty on May 10, 2012, to violations of 21 USC 841 and 846. She was sentenced on November 29, 2012 to 6 months in prison, to be followed by 48 months of supervised release.
- Rosa Martinez pled guilty of June 7, 2012, to violations of 21 USC 841 and 846. She was sentenced on November 15, 2012, to 70 months in prison, to be followed by 48 months of supervised release.
- Joshua Moore pled guilty on April 19, 2012, to violations of 21 USC 841 and 21 USC 846. He was sentenced on Nov. 29, 2012 to 60 months in prison, to be followed by 60 months of supervised release.
- Addel Montero pled guilty on June 18, 2012, to violating of 21 USC 841 and was sentenced on October 1, 2012, to 72 months in prison, to be followed by 48 months of supervised release.
- Hugo Mora pled guilty on July 11, 2012, to violating of 21 USC 841. He was sentenced on September 26, 2012, to 68 months in prison, to be followed by 48 months of supervised release.
- KC Pries pled guilty on March 12, 2012, to violations of 18 USC 922(g)(1) and 26 USC 5861. Pries was sentenced in June 4, 2012 to 63 months in prison, to be followed by 36 months of supervised release.
- Enrique Quintero pled guilty on July 9, 2012, to violations of 21 USC 841 and 846. He was sentenced on October 15, 2012, to 240 months in prison, to be followed by 120 months of supervised release.
- Rigoberto Ramirez pled guilty on July 16, 2012, to violations of 18 USC 922(g)(1) and 21 USC 841. He was sentenced on October 22, 2012 to 60 months in prison, to be followed by 120 months of supervised release.
- Robert Reddick pled guilty on Feb. 23, 2012, to violating 18 USC 922(g)(1). He was sentenced on June 7, 2012, to 9 months in prison, to be followed by 24 months of supervised release.
- Cala Remick pled guilty on July 12, 2012, to violations of 21 USC 841 and 846. She was sentenced on December 12, 2012, to 30 months in prison, to be followed by 36 months of supervised release.
- Everardo Robles pled guilty on February 16, 2012, to violations of 18 USC 922(g)(1) and 21 USC 846. He was sentenced on May 3, 2012, to 108 months in prison, to be followed by 120 months of supervised release.
- Jose Romero pled guilty on July 26, 2012, to violations of 18 USC 922(g)(1), 26 USC 5861(d) and 21 USC 841. He was sentenced on November 5, 2012, to 84 months in prison, to be followed by120 months of supervised release.
- Michael Ruelas pled guilty on April 18, 2012, to violations of 18 USC 922(g)(1) as well as 21 USC 841 and 846. He was sentenced on April 17, 2013, to 90 months in prison, to be followed by 48 months of supervised release.
- David Sainz pled guilty on July 26, 2012, to violations of 21 USC 841 and 846. He was sentenced on November 5, 2012, to 188 months in prison, to be followed by 60 months of supervised release.
- Jimmy Sandoval pled guilty on March 1, 2012, to violations of 21 USC 841 and 846. He was sentenced on May 31, 2012, to 70 months in prison, to be followed by 48 months of supervised release.
- Leonardo Silga pled guilty on March 19, 2012, to violations of 18 USC 922(g)(1) and 21 USC 846. He was sentenced on October 1, 2012, to 240 months in prison, to be followed by 120 months of supervised release.
- Lilia Valderrama pled guilty on December 21, 2012, to violations of 21 USC 841 and 846, and 18 USC 922(g)(1). She was sentenced on March 13, 2013, to 68 months in prison, to be followed by 48 months of supervised release.
- Paul Zabala pled guilty on March 29, 2012, to violations of 21 USC 841 and 846. He was sentenced on July 12, 2012, to 180 months in prison, to be followed by 120 months of supervised release.
- Ruben Macias Chavez convicted of 18 USC 922(g). He was sentenced on April 8, 2013, to 12 months in prison, to be followed by 3 years of supervised release.
Please note: Any sentence following conviction is 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.
Thomas O’Connell and Daniel Kaleba are the Assistant U.S. Attorneys who are prosecuting the cases with the assistance of Tracey Andersen and Nina Williams. The prosecution is the result of a one and one-half year investigation by ATF and the Gilroy Police Department.
In addition to the ATF and the Gilroy Police Department, the following agencies provided support to this investigation: the California Highway Patrol; Salinas Police Department; Morgan Hill Police Department; Monterey County Sheriff’s Office; auto theft task forces from Monterey County, Santa Cruz County and Santa Clara County; the National Insurance Crime Bureau; the Western States Information Network; the High Intensity Drug Trafficking Area task force; the United States Marshal’s Service; and U.S. Immigration and Customs Enforcement (ICE).
(Perales information )
Ten San Jose Gang Members and Associates Arrested on Federal Drug Trafficking ChargesRead the Press Release
SAN JOSE – Raul Morfin was arraigned today in federal court in San Jose on methamphetamine distribution charges, United States Attorney Melinda Haag announced.
Morfin represents the tenth defendant arrested on federal drug trafficking charges as part of a proactive operation by the Federal Bureau of Investigation’s Santa Clara County Violent Gang Task Force targeting gang members selling methamphetamine in Santa Clara County.
The defendants include the reputed “matriarch” of the Sureño gang “8th Street Gilroy” (Maria Salinas), alleged co-conspirator brothers affiliated with the Sureño gang “Varrio Mexicanos Locos” (Jairo and Filiberto Quintana), an alleged co-conspirator mother and daughter combination associated with the Sureño gang “Varrio Sur Town” (Laura Garcia and Vanessa Pulido), and known members and associates of the Sureño gangs “Colonias,” “Poco Way,” and “Varrio Paisanos Locos.” All but one of the defendants has thus far been detained pre-trial, thereby disrupting a substantial gang presence within Santa Clara County.
As set forth below, the ten defendants are charged in eight separate indictments with distributing and conspiring to distribute methamphetamine and, in one case, possessing a firearm in furtherance of drug trafficking.
Defendant Charges Docket Number Next Court Appearance EDUARDO ARRIAGA a/k/a “Moreno” Distribution of Methamphetamine and Possession of a Firearm in Furtherance of Drug Trafficking CR 13-00510 EJD 12/02/2013 LAURA GARCIA
a/k/a “Blinky” and
VANESSA PULIDO
a/k/a “Bunny” Distribution of Methamphetamine and Conspiracy to Distribute Methamphetamine CR 13-00508 LHK 12/04/2013 RAFAEL MEDINA
a/k/a “Conejo” Distribution and Conspiracy to Distribute Methamphetamine CR 13-00507 LHK 12/04/2013 RAUL VALLE MORFIN a/k/a “Green Eyes” Distribution of Methamphetamine CR 13-00509 DLJ 11/26/2013 JESUS QUINONES
a/k/a “Canas” Distribution of Methamphetamine CR 13-00503 DLJ 01/09/2014 JAIRO QUINTANA
a/k/a “Hido” and FILIBERTO QUINTANA a/k/a “Peewee” Distribution of Methamphetamine and Conspiracy to Distribute Methamphetamine CR 13-00506 LHK 12/18/2013 MARIA SALINAS
a/k/a “Grumpy” Distribution of Methamphetamine CR 13-00504 LHK 02/12/2014 ULYSSES VASQUEZ a/k/a “Dreamer” Distribution and Conspiracy to Distribute Methamphetamine CR 13-00502 RMW 11/25/2013The maximum penalty that defendants Vasquez and Arriaga face upon conviction is life imprisonment. At this time, the other eight defendants face a maximum penalty of 40 years in prison. 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 Stephen Meyer and Special Assistant U.S. Attorney Casey O’Neill are prosecuting these cases with the assistance of Nina Burney, Tracey Andersen and Susan Kreider. The prosecution is the result of an investigation by the Federal Bureau of Investigation’s Santa Clara County Violent Gang Task Force.
Please note, an indictment contains only allegations against an individual and, as with all defendants, these defendants must be presumed innocent unless and until proven guilty.
(Arriaga indictment )(Garcia & Pulido indictment )(Morfin indictment )
(Medina indictment )(Quinones indictment )(Quintana indictment )
(Salinas indictment )(Vasquez indictment )
Former Federal Agent Charged with Embezzlement and Thirty Counts of Making False StatementsRead the Press Release
SAN FRANCISCO – A federal grand jury in Seattle indicted former ATF Special Agent and Group Supervisor James Contreras today with embezzlement of public funds and making false statements, United States Attorney Melinda Haag and Special Agent in Charge Frank J. Cabibi, United States Department of Justice, Office of the Inspector General, Los Angeles Field Office, announced.
The indictment alleges that during the time Contreras was working as an agent and supervisor at the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) office in Seattle, he embezzled money from a cash fund for which he was responsible and prepared and submitted falsified reports when accounting for the money in the fund.
According to the indictment, Contreras, 51, of Maple Valley, Washington, was a Special Agent and Group Supervisor with ATF in Seattle. He was also responsible for an Agent Cashier Fund, a cash fund that was to be used for investigative purposes such as purchasing evidence or making subsistence payments to confidential informants working with the ATF. Contreras was responsible for reviewing and approving requests by Special Agents under his supervision to use money from the fund for authorized purposes and for requesting replenishment of the fund from ATF Headquarters on a monthly basis.
The indictment alleges that between March 10, 2010 and April 30, 2012, Contreras knowingly embezzled and converted to his own use money from the Agent Cashier Fund. Specifically, the indictment states that in connection with thirty alleged payments from the fund, Contreras falsified required records and forms by writing what appeared to be the signatures of agents who were supposedly requesting and receiving money from the fund from Contreras, and by signing forms falsely representing that payments were being made to informants working for the ATF on specific investigations. In addition to the embezzlement count, the indictment also charges Contreras with thirty counts of making false statements in connection with records and reports accounting for the money in the fund.
The ATF is a component of the United States Department of Justice. The United States Attorney’s Office in San Francisco, California, is investigating and prosecuting this case with the San Francisco Bay Area office of the United States Department of Justice, Office of Inspector General, Investigations Division. The United States Attorney’s Office for the Western District of Washington is recused from this matter.
Contreras will make his initial appearance before the assigned U.S. District Court Judge in Seattle in December.
The maximum statutory penalty for embezzlement in violation of 18 U.S.C. § 641 is ten years imprisonment, a $250,000 fine, and restitution. The maximum penalty for each count of making a false statement in violation of 18 U.S.C. § 1001(a)(3) is five years imprisonment and a $250,000 fine. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Susan Badger is the Assistant United States Attorney who is prosecuting the case with the assistance of Rosario Calderon. The prosecution is the result of a 1½ year investigation by the United States Department of Justice, Office of Inspector General, Investigations Division and the ATF Office of Professional Responsibility and Security Operations.
Please note, an indictment contains only allegations against an individual and, as with all defendants, James Contreras must be presumed innocent unless and until proven guilty.
(Contreras indictment )
Jury Convicts San Francisco Man of AssaultRead the Press Release
OAKLAND – Yesterday, a federal jury convicted Antonio Chavez of assaulting a private security guard who was assisting a federal officer, United States Attorney Melinda Haag announced.
The jury found that on December 8, 2012, Chavez assaulted a security guard who was protecting the Ronald V. Dellums Federal Building at 1301 Clay Street in Oakland, after the guard went to investigate apparent vandalism of the building. The guilty verdict followed a 4-day jury trial before The Honorable Phyllis J. Hamilton, United States District Court Judge.
Evidence at trial showed that on December 8, 2012, at about 3 a.m., private security guards noticed on surveillance video a group of six or seven people vandalizing the guard house next to the federal building on the corner of 12th Street and Jefferson Street in Oakland. One of the guards went to the guard house to investigate the vandalism. With the exception of two people, the group dispersed as the guard approached the guard house. As the guard continued his investigation, one of the individuals who remained at the guard house attempted to grab the guard’s flashlight, and a struggle ensued. During that struggle, Chavez attacked the guard with an electric stun gun, striking the guard in the neck and chest and knocking him to the ground. Chavez later brandished and activated the stun gun while threatening the security guard. Chavez was ultimately apprehended later that night by the Oakland Police Department.
Chavez, 21, of San Francisco, was charged by criminal complaint on February 12, 2013, and was indicted by a federal grand jury on February 21, 2013. Chavez was remanded into custody following his conviction.
Chavez’s sentencing hearing is scheduled for February 26, 2014, before Judge Hamilton, in Oakland. The maximum statutory penalties for a violation of 18 U.S.C. § 111(a)(1) and (b) are a prison term of 20 years, a fine of $250,000, and 3 years 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.
Assistant U.S. Attorney Brian C. Lewis and Special Assistant United States Attorney Manish Kumar prosecuted this case with the assistance of Janice Pagsanjan and Noble Hughes. This prosecution is the result of an investigation by the Federal Protective Service, the Oakland Police Department, and the Federal Bureau of Investigation.
(Chavez indictment )
Former Marin County Mortgage Brokers Indicted for $2.4 Million FraudRead the Press Release
SAN FRANCISCO – A federal Indictment charging Diane Cobb and Paul Sloane Davis with fifteen counts of conspiracy, mail fraud, and wire fraud, and charging Diane Cobb with five counts of aggravated identity theft, was unsealed today in federal court, announced United States Attorney Melinda Haag.
Cobb, 56, and Davis, 74, were indicted by a federal grand jury on October 31, 2013. According to the Indictment, Cobb and Davis operated a financial services company in Marin County known as DM Financial. Through DM Financial, Cobb and Davis offered investors the opportunity to fund purported short-term “bridge loans” to borrowers who, according to Cobb and Davis, needed short-term financing for residential real estate transactions. Cobb and Davis allegedly fraudulently provided to these investors, among other things, the identity of the purported borrower, a promissory note reflecting the amount and terms of the loan, and a deed of trust securing the loan to the borrower’s real property. Based upon these documents and other representations made by Cobb and Davis, the investors believed that Cobb and Davis were directing their funds into secured loans with borrowers.
The Indictment further alleges that, in fact, the purported borrowers received none of the investors’ money, and did not even know that their identities were being used to solicit investments. Instead, Cobb and Davis allegedly diverted substantially all the money—approximately $2.4 million—for their own personal use or to make interest payments to prior investors to keep them from discovering the true nature of the scheme.
Cobb and Davis were arrested on November 13, 2013, in Las Vegas, Nevada. They both made their initial appearances in federal court in Las Vegas on that day, when they were released on bond. Bail was set at $100,000. Cobb and Davis are next scheduled to appear on November 26, 2013, at 9:30 a.m., for their initial appearance in the Northern District of California, before The Honorable Jacqueline Scott Corley, United States Magistrate Court Judge, in San Francisco.
The maximum statutory penalty for each count of mail fraud, wire fraud, and conspiracy, in violation of Title 18, United States Code, Sections 1341, 1343, and 1349, respectively, is 20 years’ imprisonment and a fine of $250,000 or twice the gross gain or loss from the offense, plus restitution. The statutory penalty for each count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A(a)(1), is two years’ imprisonment. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Thomas Stevens and Benjamin Kingsley are the Assistant United States Attorneys who are prosecuting the case, with the assistance of Phillip Villanueva and Rayneisha Booth. The prosecution is the result of a one year investigation by the Federal Bureau of Investigation.
Please note, an indictment contains only allegations against an individual and, as with all defendants, Diane Cobb and Paul Davis must be presumed innocent unless and until proven guilty.
(Cobb and Davis unsealed indictment )
The Riddler and the Penguin Charged with Conspiracy and Kidnapping; Duo Faces Long Prison Terms Thanks to BatkidRead the Press Release
SAN FRANCISCO/GOTHAM – Edward “E.” Nigma, aka, “The Riddler,” and Oswald Chesterfield Cobblepot, aka, “The Penguin” were formally arrested today and charged with multiple counts of conspiracy and kidnapping for their all too familiar villainous ways in Gotham City, according to Melinda Haag, U.S. Attorney for the Northern District of California and FBI Special Agent in Charge David J. Johnson.
The unique and somewhat unprecedented indictment not only outlines the charges against “The Riddler” and “The Penguin” but it also includes a special thanks to a certain caped crusader who was pivotal in making this day a reality.
“We’ve been chasing Nigma and Cobblepot for years and just when I was about to give up hope that we would ever bring them to justice, wouldn’t you know it – Batkid shows up and saves the day,” said United States Attorney Melinda Haag. “I’ve been involved in some unbelievable cases and I’ve worked with some pretty remarkable law enforcement officers, but the bravery displayed by Batkid is off the charts. I’m absolutely certain that there is no villain this remarkable super-hero can’t defeat.”
According to the indictment, “The Penguin” and “The Riddler” thought it was a good idea to put an unnamed female in the path of a cable car, rob a bank, and kidnap San Francisco Giants mascot Lou Seal. Somehow they thought these latest stunts would go undetected by Batkid. However, at approximately 9 p.m. last night, the bat signal went up and predictably the crime rate began to go down in Gotham and San Francisco.
“I’ve talked a lot about cooperation in the past with other outstanding law enforcement partners, but I can honestly say we broke some new ground today,” said FBI Special Agent in Charge David J. Johnson. “The FBI and the San Francisco Police Department are good, but if it wasn’t for Batkid, I guarantee you that these two villains would still be at-large on the streets of Gotham today. Citizens of this great city are not only safer tonight because of Batkid, but they will undoubtedly be humbled by the courage he has displayed in battles he has taken on and won.”
The Assistant U.S. Attorneys all want to prosecute this case, and are currently drawing straws to see who will have the honor. This will presumably be the easiest case in U.S. Attorney history thanks to Batkid, who pretty much was able to not only capture the humanity of this great city, but was also able to capture all of the Riddler’s and Penguin’s crimes on video. The prosecution is the result of a multi-agency investigation led from a cave in a location we cannot disclose.
Please note, an indictment contains only allegations against a person and, as with all defendants, Edward “E.” Nigma, aka, “The Riddler,” and Oswald Chesterfield Cobblepot, aka, “The Penguin” must be presumed innocent unless and until proven guilty.
(Riddler & Penguin indictment )
SF Garage Company Owner Pleads Guilty to Tax FraudRead the Press Release
SAN FRANCISCO – John Clifford Pollard pleaded guilty today to one count of aiding and assisting in the preparation and presentation of a false U.S. Income Tax Return United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation Special Agent in Charge José M. Martinez announced.
According to the plea agreement, Pollard, 46, of San Francisco, is the owner and operator of 5 12 Construction, Inc., doing business as SF Garage Company. SF Garage Co. specializes in residential and commercial construction in San Francisco. Pollard admitted that during the 2009 and 2010 tax years he willfully aided and assisted in the preparation and filing of the four quarterly employment tax returns [Forms 941] for the 2009 tax year, reporting wages paid to SF Garage employees. The tax returns were all false because they omitted wages that had been paid to SF Garage employees.
Pollard was charged on November 5, 2013, with one count of assisting in the filing of false tax returns. He pleaded guilty to the one count. Sentencing is scheduled for February 20, 2014, at 1:30 p.m., before The Honorable William H. Orrick, United States District Court Judge, in San Francisco. Pollard’s attorney stated in open court today that Pollard has agreed to pay his civil tax liabilities which exceed $300,000.
The maximum statutory penalty for each count of aiding and assisting in the preparation and presentation of a false U.S. income tax return, in violation of Title 26, U.S.C. § 7206(2), is three years in prison and a fine of $250,000. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Cynthia Stier is the Assistant United States Attorney who is prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
(Pollard information )
Milpitas Man Sentenced to Five Months Custody, Ordered to Pay A $10,000 Fine, and Restitution for Illegal Shark SalesRead the Press Release
SAN FRANCISCO – Dean Tuan Trinh was sentenced yesterday to 5 months home detention, and ordered to pay a $10,000 fine to the Lacey Act Reward Fund, along with $14,400 in restitution for his involvement in the illegal take and sale of California leopard sharks from the San Francisco Bay and nurse sharks from Florida State waters, United States Attorney Melinda Haag announced.
Trinh, 44, of Milpitas, Calif., pleaded guilty on August 8, 2013, to violations of Wire Fraud, the Lacey Act, and Conspiracy to violate the Lacey Act. According to the plea agreement, Trinh admitted that he ran a wholesale fish business known as Aquatop USA in Milpitas, from 2009 through 2012. Trinh stated that he knew there was a lucrative market for undersized (less than 36”) California leopard sharks and used his fishing vessel, the “Shark Hunter,” to fish for the sharks in the San Francisco Bay. Trinh offered the sharks for sale on his website and sold them to customers throughout the United States and abroad. To facilitate the sale of these illegal sharks, Trinh caused wires to be sent, including emails to customers, and electronic filings with the U.S. Fish & Wildlife Service.
During the same time period, Trinh admitted that he had advertised undersized nurse shark pups for sale on eBay and Craigslist, knowing that these sharks were taken in violation of Florida State law – the shark pups were harvested from Florida state waters without the required licenses and permits and out of the lawful season. Trinh conspired with an individual in Florida to obtain these sharks.
Trinh was indicted by a federal grand jury in Florida on November 1, 2012, and charged with Conspiracy to violate the Lacey Act. On May 23, 2013, Trinh was indicted by a federal grand jury in California, and charged with Wire Fraud and Lacey Act violations.
The sentence was handed down by The Honorable Richard Seeborg, United States District Court Judge, following a guilty plea on three counts of violating the Lacey Act, in violation of 16 U.S.C. § 3372(a)(2)(A), six counts of Wire Fraud, in violation of 18 U.S.C. § 1343, and Conspiracy, in violation of 18 U.S.C. § 371. Judge Seeborg sentenced the defendant to three years of probation with 5 months home detention, and ordered him to pay a $10,000 fine to the Lacey Act Reward Fund, which provides money to those who provide information leading to an arrest or criminal conviction for a violation of the Lacey Act. Judge Seeborg also ordered the defendant to pay $14,400 in restitution: $5,400 to be paid to the California Academy of Sciences, and $9,000 to be paid to the National Fish and Wildlife Foundation, created by Congress to protect and restore fish and wildlife and their habitats. Trinh was also ordered to forfeit his truck and fishing vessel, and ordered to relinquish all rights he has to any state fishing, hunting or other wildlife collecting licenses.
Northern District of California AUSA Maureen Bessette and Southern District of Florida AUSA Thomas A. Watts-Fitzgerald prosecuted the case with the assistance of Janice Pagsanjan. The prosecution is the result of a two year investigation by the U.S. Fish & Wildlife Service and the National Oceanic and Atmospheric Administration Office of Law Enforcement.
(Trinh indictment 5/15/2013 )
(Trinh indictment leopard shark )
Justice Department Officials Raise Awareness of Disaster Fraud Hotline Following Typhoon HaiyanRead the Press Release
WASHINGTON – The Department of Justice, the FBI, and the National Center for Disaster Fraud (NCDF) remind the public that there is a potential for disaster fraud in the aftermath of a natural disaster. Suspected fraudulent activity pertaining to relief efforts associated with Typhoon Haiyan should be reported to the toll-free NCDF hotline at 866-720-5721. The hotline is staffed by a live operator 24 hours a day, seven days a week, for the purpose of reporting suspected scams being perpetrated by criminals in the aftermath of disasters.
NCDF was originally established in 2005 by the Department of Justice to investigate, prosecute and deter fraud associated with federal disaster relief programs following Hurricanes Katrina, Rita and Wilma. Its mission has expanded to include suspected fraud related to any natural or man-made disaster. More than 20 federal agencies – including the Justice Department’s Criminal Division, U.S. Attorney’s Offices, Department of Homeland Security Office of Inspector General, FBI, U.S. Postal Inspection Service and the U.S. Secret Service – participate in the NCDF, allowing the center to act as a centralized clearinghouse of information related to disaster relief fraud.
In the wake of natural disasters, many individuals feel moved to contribute to victim assistance programs and organizations across the country. The Department of Justice and the FBI remind the public to apply a critical eye and conduct due diligence before giving to anyone soliciting donations on behalf of hurricane victims. Solicitations can originate as emails, websites, door-to-door collections, mailings, telephone calls and similar methods.
Before making a donation of any kind, consumers should adhere to certain guidelines, including the following:
- Do not respond to any unsolicited (spam) incoming emails, including by clicking links contained within those messages, because they may contain computer viruses.
- Be cautious of individuals representing themselves as victims or officials asking for donations via email or social networking sites.
- Beware of organizations with copycat names similar to but not exactly the same as those of reputable charities.
- Rather than following a purported link to a website, verify the existence and legitimacy of non-profit organizations by using Internet-based resources.
- Be cautious of emails that claim to show pictures of the disaster areas in attached files, because those files may contain viruses. Only open attachments from known senders.
- To ensure that contributions are received and used for intended purposes, make donations directly to known organizations rather than relying on others to make the donation on your behalf.
- Do not be pressured into making contributions; reputable charities do not use coercive tactics.
- Do not give your personal or financial information to anyone who solicits contributions. Providing such information may compromise your identity and make you vulnerable to identity theft.
- Avoid cash donations if possible. Pay by debit or credit card, or write a check directly to the charity. Do not make checks payable to individuals.
- Legitimate charities do not normally solicit donations via money transfer services.
- Most legitimate charities maintain websites ending in .org rather than .com.
If you believe that you have been a victim of fraud by a person or organization soliciting relief funds on behalf of disaster victims, contact the NCDF by phone at (866) 720-5721, fax at (225) 334-4707 or email at [email protected].
You can also report suspicious e-mail solicitations or fraudulent websites to the FBI’s Internet Crime Complaint Center at www.ic3.gov.
Violent Norteño Street Gang Member Sentenced to Five Life Terms Plus Sixty Years in Federal PrisonRead the Press Release
SAN FRANCISCO – Joseph Ortiz was sentenced to five consecutive life terms plus 60 months in federal prison today after pleading guilty last July, to twenty-five federal charges, including three counts of racketeering murder, eight counts of attempted racketeering murder, two counts of robbery affecting interstate commerce, racketeering conspiracy, conspiracy to commit racketeering murder, multiple firearms violations, and multiple violations related to the obstruction of justice, announced United States Attorney Melinda Haag.
According to court records, Ortiz, 23, of South San Francisco, is a member of the 500 Block gang, a Norteño street gang in South San Francisco. Members of the 500 Block gang are allied with members of another Norteño gang in South San Francisco, the C Street gang, and the united 500 Block/C Street Gang engaged in crimes such as robbery, narcotics trafficking, and murder. Among other acts of violence, members of the 500 Block/C Street Gang sought to attack and kill members of rival Sureño gangs, as well as members of other rival gangs.
The racketeering-related murders and attempted murders to which Ortiz pleaded guilty, took place over a four-day period in December 2010. During the evening of December 18, 2010, in Saint Francis Square in Daly City, Ortiz saw four individuals he suspected of being Sureño gang members in a car. As a result, Ortiz went to his own car, retrieved a gun, and fired at the car carrying the suspected Sureño as it drove away. Three of the occupants were wounded by this attack.
Four days later, on December 22, 2010, Ortiz and several other members of the 500 Block/C Street Gang were looking for rival gang members to attack. As they drove along Eighth Lane in South San Francisco, Ortiz saw a group of young men he suspected of being rival gang members. Ortiz and his co-conspirators got out of their car with guns and fired into the group of suspected rivals, killing three and wounding three; one victim was uninjured.
In addition, Ortiz pleaded guilty to racketeering-related conspiracies based on his participation in the conduct of the affairs of the 500 Block/C Street Gang, and robbing at gunpoint a South San Francisco jewelry store on April 5, 2010, and a Pacifica 7-Eleven convenience store on April 9, 2010. He also pleaded guilty to various charges arising from his efforts to obstruct the investigation of the December 22, 2010 shooting in South San Francisco, including fleeing to Mexico to avoid arrest and prosecution.
“We offer our condolences to the victims’ families. Nothing we can do can erase their pain and sorrow,” stated U.S. Attorney Melinda Haag. “We hope, however, that today’s sentencing brings some measure of closure for them. And today’s sentence sends the clear message that we will work tirelessly with our local, state, and federal law enforcement partners to bring to justice those who would terrorize their communities with senseless and brutal acts of violence.”
“This defendant was a shot caller for a violent criminal enterprise that exacted a heavy toll on several Bay Area communities,” said Clark Settles, special agent in charge for HSI San Francisco. “It’s doubtful today’s sentence will ease the heartache of those who were victimized, but perhaps they can find solace in knowing this defendant’s spree of terror and intimidation has come to an end. HSI is gratified to have played a part in a multi-agency enforcement effort that succeeded in bringing one of the Bay Area’s most dangerous gangs to its knees.”
“The City of South San Francisco is pleased to see that justice has been served in this case and we hope that the families who have been affected by this event can find closure knowing that one of the persons responsible for the murder of their loved ones will be spending the rest of his life in custody. I would also like to thank the members of Homeland Security Investigations and the Daly City Police Department for their assistance to the South San Francisco Police Department in bringing this case to justice,” stated South San Francisco Police Department Chief Michael Massoni.
The sentence was handed down by The Honorable Susan Illston, United States District Court Judge, in San Francisco. Ortiz was given three consecutive life sentences, one for each of the December 22, 2010 murder victims, to be followed by a consecutive life sentence for using a firearm to commit the murders. The Court also imposed an additional consecutive life sentence for the other crimes Ortiz committed, as well as 60 consecutive years imprisonment for using a firearm in relation to those crimes.
Acadia L. Senese and W.S. Wilson Leung are the Assistant United States Attorneys who prosecuted the case, with the assistance of Kevin Costello, Ponly Tu, Marina Ponomarchuk, and Daniel Charlier-Smith. This prosecution is the result of an investigation by the Daly City Police Department and the South San Francisco Police Department, working with Homeland Security Investigations, and with the assistance of the San Mateo County Sheriff’s Office Gang Intelligence and Investigations Unit. Of the nineteen defendants originally charged as a result of this investigation, fourteen have pled guilty to racketeering-related offenses and/or offenses related to the obstruction of justice. The remaining defendants are scheduled to go to trial on March 31, 2014 before The Honorable Susan Illston.
(Ortiz second superseding indictment )
Owner of San Francisco Construction Company Pleads Guilty to Tax FraudRead the Press Release
SAN FRANCISCO – Brian Kenny pleaded guilty yesterday to one count of aiding and assisting in the preparation and presentation of a false U.S. Income Tax Return, United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation Special Agent in Charge José M. Martinez announced.
According to the plea agreement, Kenny, 40, of San Francisco, incorporated his business, SF Bay Construction, Inc. on or about February 17, 2005. SF Bay Construction is a subchapter “S” corporation, located in San Francisco, Calif. Kenny has been the sole shareholder of SF Bay Construction from its incorporation through at least December 31, 2007. Kenny admitted that during the 2006 tax year, SF Bay Construction performed a variety of construction-related jobs for clients and received $1,309,833.77 in business income from those jobs. Kenny knew the amount of business gross receipts reported on SF Bay Construction’s income tax returns was material to the calculation of income tax owed on his personal income tax return because he was required to pay tax on SF Bay Construction’s business income. Kenny knew that his tax return preparer filed a 2006 federal income tax return that failed to report more than $470,000 in gross receipts and instead contained the false business income figure that Kenny had provided to the tax preparer.
Kenny was charged on July 25, 2013, with six counts of assisting in the filing of false tax returns. He pleaded guilty to one count. Sentencing is scheduled for February 11, 2014, at 2:00 p.m., before The Honorable William H. Alsup, U.S. District Court Judge, in San Francisco. The maximum statutory penalty for each count of aiding and assisting in the preparation and presentation of a false U.S. income tax return, in violation of Title 26, U.S.C. § 7206(2), is three years in prison and a fine of $250,000. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Cynthia Stier is the Assistant United States Attorney who is prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
(Kenny indictment )
Oakland Man Sentenced to Seventeen Years in Prison for Conspiracy to Rob A Stash House Using Loaded FirearmsRead the Press Release
OAKLAND – George Branch was sentenced today to 204 months in prison, for conspiring to possess with intent to distribute 5 kilograms or more of cocaine; conspiring to commit robbery affecting interstate commerce; and possessing a firearm during and in relation to and in furtherance of a crime of violence and drug trafficking crime, United States Attorney Melinda Haag and Bureau of Alcohol, Tobacco, Firearms and Explosives, Special Agent in Charge Joseph M. Riehl announced.
Mr. Branch, 36, of Oakland, pleaded guilty to all three charges on July 10, 2013. During his change of plea hearing, evidence showed that Mr. Branch, and two co-conspirators, planned to rob a stash house containing over 5 kilograms of cocaine using loaded firearms. Evidence further showed that on several occasions Mr. Branch met with an undercover agent from the Bureau of Alcohol, Tobacco, Firearms, and Explosives to discuss the plans for the upcoming armed robbery.
“This sentence should serve to deter those who would seek to use firearms during robberies in Oakland or elsewhere. We thank the ATF and the Oakland Police Department for their investigation and dedication to battling gun violence through Operation Gideon," said U.S. Attorney Melinda Haag.
“Armed robbery crews prey on the neighborhoods in which they operate, and they instill fear through intimidation and violence,” said Bureau of Alcohol, Tobacco, Firearms and Explosives, Special Agent in Charge Joseph M. Riehl. “ATF’s priority is to combat violent criminals and by partnering with the Oakland Police Department we are successfully targeting, disarming, and removing them from our communities.”
The sentence was handed down by The Honorable Phyllis J. Hamilton, U.S. District Court Judge in Oakland. Judge Hamilton also sentenced the defendant to a ten-year period of supervised release. The defendant is already in custody and will begin serving the sentence immediately.
Natalie Lee and William Frentzen are the Assistant U.S. Attorneys who prosecuted the case with the assistance of Daniel Charlier-Smith.
(Branch indictment )
New Jersey Man Convicted of Distribution of Child Pornography Involving Oakland TeenagerRead the Press Release
OAKLAND – Alex Gonzalez pleaded guilty in federal court today to distribution and possession of child pornography, United States Attorney Melinda Haag announced.
In pleading guilty, Gonzalez, 21, of Wenonah, New Jersey, admitted to meeting the victim, a 15-year old high school student, through the internet. The victim resided in Oakland. According to the statements made in court, Gonzalez instructed the victim to take nude photos of herself and to send them to him. He also instructed her to engage in sexually explicit conduct while on internet video chats. Gonzalez secretly recorded these encounters. When the 15-year old high school student stopped communicating with him, Gonzalez created a false identity on a social media website and uploaded the victim’s nude images to the social media website for the specific purpose of distributing those nude images to the high school student’s classmates.
Gonzalez was charged by Indictment on February 21, 2013, with one count of distribution of child pornography and one count of possession of child pornography. He pleaded guilty to all counts. Gonzalez’ sentencing is scheduled for February 19, 2014, before The Honorable Phyllis J. Hamilton, United States District Court Judge, in Oakland. The maximum statutory penalty for distribution of child pornography in violation of 18 U.S.C. § 2252(a)(4)(B) is 40 years’ imprisonment with a mandatory minimum sentence of 5 years and a fine of $250,000. 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.
Rodney C. Villazor is the Assistant U.S. Attorney who is prosecuting the case with the assistance of legal assistant Vanessa Quant. The prosecution is the result of an investigation by the Federal Bureau of Investigation.
(Gonzalez indictment )
Martinez Resident Sentenced to More Than 5 Years in Prison for Conspiracy to Commit Sex Trafficking of A Minor and Being A Felon in Possession of A FirearmRead the Press Release
OAKLAND – Eric Demetrius Smith was sentenced yesterday to 70 months in prison for conspiracy to commit sex trafficking of a minor and, separately, for being a felon in possession of a firearm, United States Attorney Melinda Haag announced.
On August 12, 2013, Smith, 26, of Martinez, pleaded guilty to two charges: (1) conspiracy to commit sex trafficking of a minor, and (2) felon in possession of a firearm. According to the plea agreement, Smith admitted that, in March 2013, he recruited a minor to become a prostitute. He advertised the prostitution services on the internet and arranged for commercial sex at various motels in Contra Costa County. Smith also admitted that on April 7, 2012 he was a felon in possession of a firearm.
Smith was indicted by a federal grand jury on May 16, 2013 for conspiracy to commit sex trafficking. He was indicted by a federal grand jury on March 21, 2013 for being a felon in possession of a firearm.
The sentence was handed down by The Honorable Claudia Wilken, U.S. District Court Chief Judge, following a guilty plea to Count One of the Indictment in case number CR-13-00315, in violation of 18 U.S.C. § 1594(c), and to Count One of the Indictment in case number CR-13-00185, in violation of 18 U.S.C. § 922(g)(1). Judge Wilken also sentenced the defendant to a three year period of supervised release.
Rodney C. Villazor is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Vanessa Quant. The prosecution is the result of an investigation by the Federal Bureau of Investigation.
(Smith 922 indictment )
(Smith 1594 indictment )
Johnson & Johnson to Pay More Than $2.2 Billion to Resolve Criminal and Civil InvestigationsRead the Press Release
WASHINGTON - Global health care giant Johnson & Johnson (J&J) and its subsidiaries will pay more than $2.2 billion to resolve criminal and civil liability arising from allegations relating to the prescription drugs Risperdal, Invega and Natrecor, including promotion for uses not approved as safe and effective by the Food and Drug Administration (FDA) and payment of kickbacks to physicians and to the nation's largest long-term care pharmacy provider. The global resolution is one of the largest health care fraud settlements in U.S. history, including criminal fines and forfeiture totaling $485 million and civil settlements with the federal government and states totaling $1.72 billion.
"The conduct at issue in this case jeopardized the health and safety of patients and damaged the public trust," said Attorney General Eric Holder. "This multibillion-dollar resolution demonstrates the Justice Department's firm commitment to preventing and combating all forms of health care fraud. And it proves our determination to hold accountable any corporation that breaks the law and enriches its bottom line at the expense of the American people."
The resolution includes criminal fines and forfeiture for violations of the law and civil settlements based on the False Claims Act arising out of multiple investigations of the company and its subsidiaries.
"When companies put profit over patients' health and misuse taxpayer dollars, we demand accountability," said Associate Attorney General Tony West. "In addition to significant monetary sanctions, we will ensure that non-monetary measures are in place to facilitate change in corporate behavior and help ensure the playing field is level for all market participants."
In addition to imposing substantial monetary sanctions, the resolution will subject J&J to stringent requirements under a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG). This agreement is designed to increase accountability and transparency and prevent future fraud and abuse.
"As patients and consumers, we have a right to rely upon the claims drug companies make about their products," said Assistant Attorney General for the Justice Department's Civil Division Stuart F. Delery. "And, as taxpayers, we have a right to ensure that federal health care dollars are spent appropriately. That is why this Administration has continued to pursue aggressively - with all of our available law enforcement tools -- those companies that corrupt our health care system."
J&J Subsidiary Janssen Pleads Guilty to Misbranding Antipsychotic Drug
In a criminal information filed today in the Eastern District of Pennsylvania, the government charged that, from March 3, 2002, through Dec. 31, 2003, Janssen Pharmaceuticals Inc., a J&J subsidiary, introduced the antipsychotic drug Risperdal into interstate commerce for an unapproved use, rendering the product misbranded. For most of this time period, Risperdal was approved only to treat schizophrenia. The information alleges that Janssen's sales representatives promoted Risperdal to physicians and other prescribers who treated elderly dementia patients by urging the prescribers to use Risperdal to treat symptoms such as anxiety, agitation, depression, hostility and confusion. The information alleges that the company created written sales aids for use by Janssen's ElderCare sales force that emphasized symptoms and minimized any mention of the FDA-approved use, treatment of schizophrenia. The company also provided incentives for off-label promotion and intended use by basing sales representatives' bonuses on total sales of Risperdal in their sales areas, not just sales for FDA-approved uses.
In a plea agreement resolving these charges, Janssen admitted that it promoted Risperdal to health care providers for treatment of psychotic symptoms and associated behavioral disturbances exhibited by elderly, non-schizophrenic dementia patients. Under the terms of the plea agreement, Janssen will pay a total of $400 million, including a criminal fine of $334 million and forfeiture of $66 million. Janssen's guilty plea will not be final until accepted by the U.S. District Court.
The Federal Food, Drug, and Cosmetic Act (FDCA) protects the health and safety of the public by ensuring, among other things, that drugs intended for use in humans are safe and effective for their intended uses and that the labeling of such drugs bear true, complete and accurate information. Under the FDCA, a pharmaceutical company must specify the intended uses of a drug in its new drug application to the FDA. Before approval, the FDA must determine that the drug is safe and effective for those specified uses. Once the drug is approved, if the company intends a different use and then introduces the drug into interstate commerce for that new, unapproved use, the drug becomes misbranded. The unapproved use is also known as an "off-label" use because it is not included in the drug's FDA-approved labeling.
"When pharmaceutical companies interfere with the FDA's mission of ensuring that drugs are safe and effective for the American public, they undermine the doctor-patient relationship and put the health and safety of patients at risk," said Director of the FDA's Office of Criminal Investigations John Roth. "Today's settlement demonstrates the government's continued focus on pharmaceutical companies that put profits ahead of the public's health. The FDA will continue to devote resources to criminal investigations targeting pharmaceutical companies that disregard the drug approval process and recklessly promote drugs for uses that have not been proven to be safe and effective."
J&J and Janssen Settle Civil Allegations of Targeting Vulnerable Patients with the Drugs Risperdal and Invega for Off-Label Uses
In a related civil complaint filed today in the Eastern District of Pennsylvania, the United States alleges that Janssen marketed Risperdal to control the behaviors and conduct of the nation's most vulnerable patients: elderly nursing home residents, children and individuals with mental disabilities. The government alleges that J&J and Janssen caused false claims to be submitted to federal health care programs by promoting Risperdal for off-label uses that federal health care programs did not cover, making false and misleading statements about the safety and efficacy of Risperdal and paying kickbacks to physicians to prescribe Risperdal.
"J&J's promotion of Risperdal for unapproved uses threatened the most vulnerable populations of our society - children, the elderly and those with developmental disabilities," said U.S. Attorney for the Eastern District of Pennsylvania Zane Memeger. "This historic settlement sends the message that drug manufacturers who place profits over patient care will face severe criminal and civil penalties."
In its complaint, the government alleges that the FDA repeatedly advised Janssen that marketing Risperdal as safe and effective for the elderly would be "misleading." The FDA cautioned Janssen that behavioral disturbances in elderly dementia patients were not necessarily manifestations of psychotic disorders and might even be "appropriate responses to the deplorable conditions under which some demented patients are housed, thus raising an ethical question regarding the use of an antipsychotic medication for inappropriate behavioral control."
The complaint further alleges that J&J and Janssen were aware that Risperdal posed serious health risks for the elderly, including an increased risk of strokes, but that the companies downplayed these risks. For example, when a J&J study of Risperdal showed a significant risk of strokes and other adverse events in elderly dementia patients, the complaint alleges that Janssen combined the study data with other studies to make it appear that there was a lower overall risk of adverse events. A year after J&J had received the results of a second study confirming the increased safety risk for elderly patients taking Risperdal, but had not published the data, one physician who worked on the study cautioned Janssen that "[a]t this point, so long after [the study] has been completed . we must be concerned that this gives the strong appearance that Janssen is purposely withholding the findings."
The complaint also alleges that Janssen knew that patients taking Risperdal had an increased risk of developing diabetes, but nonetheless promoted Risperdal as "uncompromised by safety concerns (does not cause diabetes)." When Janssen received the initial results of studies indicating that Risperdal posed the same diabetes risk as other antipsychotics, the complaint alleges that the company retained outside consultants to re-analyze the study results and ultimately published articles stating that Risperdal was actually associated with a lower risk of developing diabetes.
The complaint alleges that, despite the FDA warnings and increased health risks, from 1999 through 2005, Janssen aggressively marketed Risperdal to control behavioral disturbances in dementia patients through an "ElderCare sales force" designed to target nursing homes and doctors who treated the elderly. In business plans, Janssen's goal was to "[m]aximize and grow RISPERDAL's market leadership in geriatrics and long term care." The company touted Risperdal as having "proven efficacy" and "an excellent safety and tolerability profile" in geriatric patients.
In addition to promoting Risperdal for elderly dementia patients, from 1999 through 2005, Janssen allegedly promoted the antipsychotic drug for use in children and individuals with mental disabilities. The complaint alleges that J&J and Janssen knew that Risperdal posed certain health risks to children, including the risk of elevated levels of prolactin, a hormone that can stimulate breast development and milk production. Nonetheless, one of Janssen's Key Base Business Goals was to grow and protect the drug's market share with child/adolescent patients. Janssen instructed its sales representatives to call on child psychiatrists, as well as mental health facilities that primarily treated children, and to market Risperdal as safe and effective for symptoms of various childhood disorders, such as attention deficit hyperactivity disorder, oppositional defiant disorder, obsessive-compulsive disorder and autism. Until late 2006, Risperdal was not approved for use in children for any purpose, and the FDA repeatedly warned the company against promoting it for use in children.
The government's complaint also contains allegations that Janssen paid speaker fees to doctors to influence them to write prescriptions for Risperdal. Sales representatives allegedly told these doctors that if they wanted to receive payments for speaking, they needed to increase their Risperdal prescriptions.
In addition to allegations relating to Risperdal, today's settlement also resolves allegations relating to Invega, a newer antipsychotic drug also sold by Janssen. Although Invega was approved only for the treatment of schizophrenia and schizoaffective disorder, the government alleges that, from 2006 through 2009, J&J and Janssen marketed the drug for off-label indications and made false and misleading statements about its safety and efficacy.
As part of the global resolution, J&J and Janssen have agreed to pay a total of $1.391 billion to resolve the false claims allegedly resulting from their off-label marketing and kickbacks for Risperdal and Invega. This total includes $1.273 billion to be paid as part of the resolution announced today, as well as $118 million that J&J and Janssen paid to the state of Texas in March 2012 to resolve similar allegations relating to Risperdal. Because Medicaid is a joint federal-state program, J&J's conduct caused losses to both the federal and state governments. The additional payment made by J&J as part of today's settlement will be shared between the federal and state governments, with the federal government recovering $749 million, and the states recovering $524 million. The federal government and Texas each received $59 million from the Texas settlement.
Kickbacks to Nursing Home Pharmacies
The civil settlement also resolves allegations that, in furtherance of their efforts to target elderly dementia patients in nursing homes, J&J and Janssen paid kickbacks to Omnicare Inc., the nation's largest pharmacy specializing in dispensing drugs to nursing home patients. In a complaint filed in the District of Massachusetts in January 2010, the United States alleged that J&J paid millions of dollars in kickbacks to Omnicare under the guise of market share rebate payments, data-purchase agreements, "grants" and "educational funding." These kickbacks were intended to induce Omnicare and its hundreds of consultant pharmacists to engage in "active intervention programs" to promote the use of Risperdal and other J&J drugs in nursing homes. Omnicare's consultant pharmacists regularly reviewed nursing home patients' medical charts and made recommendations to physicians on what drugs should be prescribed for those patients. Although consultant pharmacists purported to provide "independent" recommendations based on their clinical judgment, J&J viewed the pharmacists as an "extension of [J&J's] sales force."
J&J and Janssen have agreed to pay $149 million to resolve the government's contention that these kickbacks caused Omnicare to submit false claims to federal health care programs. The federal share of this settlement is $132 million, and the five participating states' total share is $17 million. In 2009, Omnicare paid $98 million to resolve its civil liability for claims that it accepted kickbacks from J&J and Janssen, along with certain other conduct.
"Consultant pharmacists can play an important role in protecting nursing home residents from the use of antipsychotic drugs as chemical restraints," said U.S. Attorney for the District of Massachusetts Carmen Ortiz. "This settlement is a reminder that the recommendations of consultant pharmacists should be based on their independent clinical judgment and should not be the product of money paid by drug companies."
Off-Label Promotion of the Heart Failure Drug Natrecor
The civil settlement announced today also resolves allegations that J&J and another of its subsidiaries, Scios Inc., caused false and fraudulent claims to be submitted to federal health care programs for the heart failure drug Natrecor. In August 2001, the FDA approved Natrecor to treat patients with acutely decompensated congestive heart failure who have shortness of breath at rest or with minimal activity. This approval was based on a study involving hospitalized patients experiencing severe heart failure who received infusions of Natrecor over an average 36-hour period.
In a civil complaint filed in 2009 in the Northern District of California, the government alleged that, shortly after Natrecor was approved, Scios launched an aggressive campaign to market the drug for scheduled, serial outpatient infusions for patients with less severe heart failure - a use not included in the FDA-approved label and not covered by federal health care programs. These infusions generally involved visits to an outpatient clinic or doctor's office for four- to six-hour infusions one or two times per week for several weeks or months.
The government's complaint alleged that Scios had no sound scientific evidence supporting the medical necessity of these outpatient infusions and misleadingly used a small pilot study to encourage the serial outpatient use of the drug. Among other things, Scios sponsored an extensive speaker program through which doctors were paid to tout the purported benefits of serial outpatient use of Natrecor. Scios also urged doctors and hospitals to set up outpatient clinics specifically to administer the serial outpatient infusions, in some cases providing funds to defray the costs of setting up the clinics, and supplied providers with extensive resources and support for billing Medicare for the outpatient infusions.
As part of today's resolution, J&J and Scios have agreed to pay the federal government $184 million to resolve their civil liability for the alleged false claims to federal health care programs resulting from their off-label marketing of Natrecor. In October 2011, Scios pleaded guilty to a misdemeanor FDCA violation and paid a criminal fine of $85 million for introducing Natrecor into interstate commerce for an off-label use.
"This case is an example of a drug company encouraging doctors to use a drug in a way that was unsupported by valid scientific evidence," said First Assistant U.S. Attorney for the Northern District of California Brian Stretch. "We are committed to ensuring that federal health care programs do not pay for such inappropriate uses, and that pharmaceutical companies market their drugs only for uses that have been proven safe and effective."
Non-Monetary Provisions of the Global Resolution and Corporate Integrity Agreement
In addition to the criminal and civil resolutions, J&J has executed a five-year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG). The CIA includes provisions requiring J&J to implement major changes to the way its pharmaceutical affiliates do business. Among other things, the CIA requires J&J to change its executive compensation program to permit the company to recoup annual bonuses and other long-term incentives from covered executives if they, or their subordinates, engage in significant misconduct. J&J may recoup monies from executives who are current employees and from those who have left the company. The CIA also requires J&J's pharmaceutical businesses to implement and maintain transparency regarding their research practices, publication policies and payments to physicians. On an annual basis, management employees, including senior executives and certain members of J&J's independent board of directors, must certify compliance with provisions of the CIA. J&J must submit detailed annual reports to HHS-OIG about its compliance program and its business operations.
"OIG will work aggressively with our law enforcement partners to hold companies accountable for marketing and promotion that violate laws intended to protect the public," said Inspector General of the U.S. Department of Health and Human Services Daniel R. Levinson. "Our compliance agreement with Johnson & Johnson increases individual accountability for board members, sales representatives, company executives and management. The agreement also contains strong monitoring and reporting provisions to help ensure that the public is protected from future unlawful and potentially harmful off-label marketing."
Coordinated Investigative Effort Spans Federal and State Law Enforcement
This resolution marks the culmination of an extensive, coordinated investigation by federal and state law enforcement partners that is the hallmark of the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which fosters government collaborations to fight fraud. Announced in May 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius, the HEAT initiative has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.
The criminal cases against Janssen and Scios were handled by the U.S. Attorney's Offices for the Eastern District of Pennsylvania and the Northern District of California and the Civil Division's Consumer Protection Branch. The civil settlements were handled by the U.S. Attorney's Offices for the Eastern District of Pennsylvania, the Northern District of California and the District of Massachusetts and the Civil Division's Commercial Litigation Branch. Assistance was provided by the HHS Office of Counsel to the Inspector General, Office of the General Counsel-CMS Division, the FDA's Office of Chief Counsel and the National Association of Medicaid Fraud Control Units.
This matter was investigated by HHS-OIG, the Department of Defense's Defense Criminal Investigative Service, the FDA's Office of Criminal Investigations, the Office of Personnel Management's Office of Inspector General, the Department of Veterans Affairs, the Department of Labor, TRICARE Program Integrity, the U.S. Postal Inspection Service's Office of the Inspector General and the FBI.
One of the most powerful tools in the fight against Medicare and Medicaid financial fraud is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $16.7 billion through False Claims Act cases, with more than $11.9 billion of that amount recovered in cases involving fraud against federal health care programs.
The department enforces the FDCA by prosecuting those who illegally distribute unapproved, misbranded and adulterated drugs and medical devices in violation of the Act. Since 2009, fines, penalties and forfeitures that have been imposed in connection with such FDCA violations have totaled more than $6 billion.
The civil settlements described above resolve multiple lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the government and to share in any recovery. From the federal government's share of the civil settlements announced today, the whistleblowers in the Eastern District of Pennsylvania will receive $112 million, the whistleblowers in the District of Massachusetts will receive $27.7 million and the whistleblower in the Northern District of California will receive $28 million. Except to the extent that J&J subsidiaries have pleaded guilty or agreed to plead guilty to the criminal charges discussed above, the claims settled by the civil settlements are allegations only, and there has been no determination of liability.
Motivational Speaker Pleads Guilty to Failing to File Tax ReturnsRead the Press Release
OAKLAND – William H. Paris, Jr., aka Bubba Paris, pleaded guilty yesterday to one count of failing to file a federal income tax return with the IRS, announced United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation Special Agent in Charge José M. Martinez.
Paris, 53, of Discovery Bay, Calif., started Paris Enterprises in 1985, a business where he earned income as a motivational speaker and by selling autographed memorabilia. He was the Chief Executive Officer since its inception until present. Paris also controlled all of the bookkeeping and finances of the business since the year 2006.
According to the plea agreement, Paris admitted that between 2006 and 2008, he willfully failed to file a U.S. Individual Income Tax Return despite earning income. Specifically, Paris earned at least $57,187 in 2006, $83,856 in 2007, and $41,700 in 2008, but failed to report that income to the IRS. Paris also agreed to pay restitution to the IRS in the amount of $126,530.
Paris was charged on February 11, 2013, with three counts of failing to file tax returns. He pleaded guilty to one count. Sentencing is scheduled for February 21, 2014 in front of The Honorable Kandis A. Westmore, U.S. Magistrate Court Judge.
The maximum statutory penalty for each count of failure to file a federal tax return, in violation of Title 26, U.S.C. § 7203, is one year in prison and a fine of $100,000. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Special Assistant United States Attorney Charles Parker and Assistant United States Attorney Thomas Newman are prosecuting this case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
(Paris information )
23 Year Old Man Arrested for Sex Trafficking of Local TeenagersRead the Press Release
SAN JOSE - A federal grand jury in San Jose returned an Indictment on October 16, 2013, charging Jamal Raphael Broussard with sex trafficking of children, transportation of minors for prostitution, and coercion and enticement of minors for prostitution, announced United States Attorney Melinda Haag.
According to the six-count Indictment, Broussard, 23, of Hercules, Calif., beginning in August 2010 and continuing at least through May 2013, is alleged to have recruited, enticed, or transported two minor females using force, fraud, or coercion to cause them to engage in commercial sex acts, knowing that they were younger than 18-years-old. Broussard benefited financially by these commercial sex acts. Further, Broussard is alleged to have arranged or induced the travel of these minor victims, sending them from California to multiple states across the country for the purpose of engaging in prostitution.
Broussard was arrested yesterday morning at his home in Hercules, and made his initial appearance in federal court in San Jose in front of The Honorable Nathanael Cousins, U.S. Magistrate Curt Judge. Broussard is currently in federal custody pending further hearings. Broussard’s next scheduled appearance is on November 5, 2013, at 1:30 p.m. for a detention hearing before The Honorable Howard R. Lloyd, U.S. Magistrate Court Judge.
The maximum statutory penalty for each count of sex trafficking of children, in violation of 18 U.S.C. §§ 1591(a) and 1594(a), is lifetime imprisonment, a mandatory minimum 15 years in prison, a fine of $250,000, and restitution. The maximum statutory penalty for each count of transportation of minors for prostitution, in violation of 18 U.S.C. § 2423(a) and (d), is 30 years imprisonment, a mandatory minimum 10 years imprisonment, a fine of $250,000, and restitution. The maximum statutory penalty for each count of coercion and enticement for prostitution, in violation of 18 U.S.C. § 2422(a) and (b), is lifetime imprisonment, mandatory minimum 10 years imprisonment, a fine of $250,000, and restitution. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Amie Rooney is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Nina Burney and Tracey Andersen. The prosecution is the result of a 10-month joint investigation by the Federal Bureau of Investigation and the San Jose Police Department Human Trafficking Task Force.
(Broussard indictment )
Oakland Man Sentenced to More Than Five Years in Prison for Trafficking MethamphetamineRead the Press Release
OAKLAND – John Alan Hunt was sentenced yesterday to five and a half years in prison for trafficking methamphetamine, United States Attorney Melinda Haag announced.
Hunt, 52, of Oakland, Calif., was indicted by a federal grand jury on April 23, 2013. The three-count Indictment charged Hunt and co-defendants Daniel Artinger, and Nile Glenn with Conspiracy to Distribute and Possess with the Intent to Distribute Methamphetamine, in violation of 21 U.S.C. § 846, and Distribution and Possession with the Intent to Distribute Methamphetamine, in violation of 21 U.S.C. § 841(a)(1).
Hunt pleaded guilty on July 29, 2013, to Distribution and Possession with the Intent to Distribute Methamphetamine. According to the plea agreement, Hunt admitted that on August 2, 2012, and again on August 30, 2012, he knowingly and intentionally sold a total of approximately 48.4 grams of actual methamphetamine to an undercover officer in the in the vicinity of High Street in Oakland.
“One of ATF’s top priorities is to rid our neighborhoods of dangerous criminals who plague our community by selling drugs,” said Bureau of Alcohol, Tobacco, Firearms and Explosives, Special Agent in Charge Joseph M. Riehl. “The success of this investigation is attributed to the excellent undercover work that was conducted and the solid partnership between ATF, Oakland Police Department, and the United States Attorney’s Office.”
Artinger pleaded guilty on October 21, 2013, and is scheduled to be sentenced on January 6, 2014. Glenn pleaded guilty in the District of Oregon on October 24, 2013, and is scheduled to be sentenced there on February 5, 2014.
The sentence was handed down by The Honorable Claudia Wilken, U.S. District Court Chief Judge, Judge Wilken also sentenced the defendant to a 4 year period of supervised release.
Hunt has been in federal custody since his initial appearance on May 6, 2013.
Chinhayi Cadet is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Elizabeth Garcia. The prosecution is the result of a 10 month investigation by the ATF and the Oakland Police Department.
(Hunt indictment )
Richmond Man Sentenced to 21 Months for Failing to Report to Serve A Previously Imposed SentenceRead the Press Release
OAKLAND – Dontae Jerome Jones was sentenced today to 21 months in prison for failing to surrender to serve a previously imposed sentence, United States Attorney Melinda Haag announced.
Jones, 31, of Richmond, admitted in his plea agreement that he had been previously convicted of being a felon in possession of a firearm and ammunition and had been sentenced to 72 months in custody. Jones was allowed to voluntarily surrender to serve his sentence on November 5, 2012. Jones also admitted that he failed to report to serve his sentence as ordered, and he later evaded capture by the U.S. Marshals, who had located him at a residence in Vallejo, Calif. Jones was finally caught on April 29, 2013, in Vallejo by the Vallejo Police Department.
Jones was indicted by a federal grand jury on May 9, 2013. He pleaded guilty on August 12, 2013. The sentence was handed down by The Honorable Claudia Wilken, U.S. District Court Chief Judge. In addition to his prison term, Jones was also sentenced to a 3-year period of supervised release.
Brian C. Lewis is the Assistant U.S. Attorneys who is prosecuting the case with the assistance of Legal Assistant Janice Pagsanjan. The prosecution is the result of an investigation by the FBI, the U.S. Marshals, and the Vallejo Police Department.
(Jones indictment )
Nationwide Prescription Drug Take-Back Event – October 26Read the Press Release
SAN FRANCISCO – The Drug Enforcement Administration (DEA) and its national, tribal, and community partners will hold a seventh National Prescription Drug Take Back Day at thousands of sites across the country on Saturday, October 26, 2013. These Take Back Day events give the public the opportunity to prevent prescription drug abuse and theft by ridding their homes of potentially dangerous expired, unused, or unwanted prescription drugs.
Prescription drugs that languish in medicine cabinets create a public health and safety concern because they are highly susceptible to diversion, misuse, and abuse. Rates of prescription drug abuse in the U.S. are alarmingly high; almost twice as many Americans (6.8 million) currently abuse prescription drugs than the number of those abusing cocaine, hallucinogens, heroin, and inhalants combined, according to the 2012 National Survey on Drug Use and Health. Studies show that a majority of abused prescription drugs are obtained from family and friends, including from the home medicine cabinet.
“Prescription drug abuse brings harm to our community, endangering those who obtain these controlled substances without proper medical supervision,” stated U.S. Attorney Melinda Haag. “By properly removing these outdated and dangerous products from our medicine cabinets, we eliminate a temptation that often has disastrous consequences. The U.S. Attorney’s Office commends the DEA for addressing this challenging topic and for their efforts in organizing this Prescription Drug Take-Back Event.”
“The DEA’s San Francisco Field Division is committed to the National Prescription Drug Take Back Day and we are proud to host more than 226 collection sites with our law enforcement and corporate partners. Cumulatively, Northern California residents have turned in more than 65 tons of prescription drugs during the past six National Prescription Drug Take Back Days, and we expect that this Saturday will be even more successful than the prior events. Prescription drug abuse is a serious health issue that should concern all parents. Studies show that more than 54 percent of children 12 and older abuse pain relievers they get from friends or family, so it only makes sense to dispose of unused, unneeded, expired prescription medications from the home,” said Acting Special Agent in Charge Bruce C. Balzano.
Americans participating in the DEA’s six previous Take-Back Days turned in nearly 2.8 million pounds—almost 1,409 tons—of prescription drugs, most recently at more than 5,800 sites operated by over 4,300 of DEA’s law enforcement partners.
The public can find a nearby collection site by visiting www.dea.gov, clicking on the “Got Drugs?” icon, and following the links to a database where they can enter their zip code. Or, they can call 1-800-882-9539 for additional information. The service is free and anonymous.
Saratoga Man Sentenced to 16 Months for Tax EvasionRead the Press Release
SAN JOSE – Jonathan Jianguo Jiang was sentenced yesterday to 16 months imprisonment for failing to report capital gains for the sale of his company, announced United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation Special Agent in Charge José M. Martinez.
Jiang, 48, of Saratoga, Calif., incorporated SecureM in the Cayman Islands on January 28, 2004. He was the director, president, and sole shareholder of SecureM. On April 17, 2004, SecureM was sold to a UK company for at least $8,600,000. Jiang willfully omitted the capital gains from his 2004, 2005 and 2006 federal income tax returns, notwithstanding the fact that he received capital gains of at least $2.9 million between 2004 and 2006 from the sale of SecureM. Jiang’s willful omissions resulted in $467,336 of additional tax due.
Jiang, was charged on March 6, 2012, with one count of income tax evasion for the 2004 tax year. He pleaded guilty on March 3, 2013.
The sentence was handed down by The Honorable Lucy H. Koh, U.S. District Court Judge. Jiang was also sentenced to a three-year period of supervised release and ordered to pay $467,336 in restitution. Jiang will begin serving the sentence on March 14, 2014.
Jiang also paid his civil tax liability, which includes penalties and interest, of over $3,000,000.
Cynthia Stier is the Assistant United States Attorney who is prosecuting this case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
(Jiang information )
Marin County Duo Charged with Filing Tax Returns Using Prison Inmates Personal InformationRead the Press Release
OAKLAND – Clifford Dale Bercovich and Howard Webber were charged on October 3, 2013, with conspiracy, mail fraud, and aggravated identity theft, announced United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation Special Agent in Charge José M. Martinez.
According to the 31 count Indictment, Bercovich, 66, of San Rafael, and Webber, who resided in Marin County and Milwaukee, Wisconsin, filed false federal income tax returns for prison inmates that claimed tax refunds based on the Earned Income Credit and/or Making Work Pay Credit. In carrying out the fraud scheme, Bercovich allegedly created an information sheet for “Inmate Assets Recovery and Liquidation Services” to obtain personal identifying information from prison inmates. Bercovich allegedly used this information to prepare and file false federal income tax returns for the inmates. The tax returns reported fictitious figures for “wages, salaries, and tips,” which fraudulently inflated the Earned Income Credit and/or Making Work Pay Credit resulting in false tax refunds. The tax refunds were deposited into a bank account established by Bercovich. The defendants split a fee of $250 or 25% of the fraudulent refund.
The maximum statutory penalty for each count of conspiracy, in violation of Title 18, U.S.C § 1349, is 20 years in prison and a fine of $250,000. The maximum statutory penalty for each count of mail fraud, in violation of 18 U.S.C § 1341, is 20 years in prison and a fine of $250,000. The maximum penalty for aggravated identity theft in violation of Title 18, U.S.C § 1028A, is a mandatory consecutive sentence of two years in prison, and a fine of $250,000 plus restitution. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant United States Attorney Cynthia Stier is prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
Please note, an indictment contains only allegations against a person and, as with all defendants, Clifford Dale Bercovich and Howard Webber must be presumed innocent unless and until proven guilty.
(Bercovich indictment )
Richmond Man Sentenced to More Than 12 Years in Federal Prison for Holding Undercover Agent at Gunpoint During Attempted RobberyRead the Press Release
OAKLAND – Khusar Mobley was sentenced today to 147 months’ imprisonment, for conspiracy to commit robbery; assault on a federal officer; robbery; and brandishing a firearm during a crime of violence, United States Attorney Melinda Haag announced.
Mobley, 20, of Richmond, was convicted after a four-day jury trial on June 20, 2013. During the trial, evidence showed that Mobley held a loaded gun to the head of an undercover agent from the Bureau of Alcohol, Tobacco, Firearms, and Explosives. As the agent attempted to push the gun away, Mobley – with his finger on the trigger – demanded that the agent empty his pockets. When nearby government agents came to the rescue, Mobley attempted to pull the trigger several times, but he was prevented from doing so by a heroic person who jammed his thumb under the trigger of the gun.
Mobley’s co-defendants – Otis Mobley and D’Marce Hutcherson – pleaded guilty and were sentenced to 114 months’ and 108 months’ imprisonment respectively in May 2013.
“The defendant’s conduct in this case should remind us all of the grave danger that law enforcement officers face every day when they do their jobs of keeping the public safe,” said United States Attorney, Melinda Haag. “The substantial sentence that the court imposed today should demonstrate that the U.S. Attorney’s Office will prosecute violent offenders to the full extent of the law and hold them accountable for their crimes.”
“This case shows how firearms used by violent criminals terrorize our communities and put the public at risk,” stated Bureau of Alcohol, Tobacco, Firearms, and Explosives, Special Agent in Charge Joseph M. Riehl. “We are grateful for the safety of our agent who worked in an undercover capacity and was robbed at gunpoint. I would like to thank the cover team and the undercover agent for their brave response to a dangerous situation. I would also like to thank the United States Attorney’s Office for their diligent work in prosecuting this case. Let this sentencing be a message to those who pose a threat to our community that ATF will hold them accountable.”
The sentence was handed down by The Honorable Yvonne Gonzalez Rogers, U.S. District Court Judge. The defendant was also sentenced to a five-year period of supervised release. Mr. Mobley is already in custody and will begin serving his sentence immediately.
James C. Mann and Natalie Lee are the Assistant U.S. Attorneys who prosecuted the case with the assistance of Vanessa Vargas.
(Mobley indictment )
Philadelphia Woman Sentenced to More Than Three Years for Identity TheftRead the Press Release
SAN JOSE – Vernina Adams was sentenced today to 38 months in prison for wire fraud and aggravated identity theft, United States Attorney Melinda Haag announced.
On January 9, 2013, pursuant to a plea agreement with the government, Adams pleaded guilty to one count of wire fraud and one count of aggravated identity theft. Adams admitted that beginning in March 2010, and continuing to approximately June 2010, she carried out a scheme to defraud Paymate, which was a credit card processing company for people who bought and sold goods on the Internet located in Woodside, Calif.
As part of her guilty plea, Ms. Adams, 31, of Philadelphia, Pennsylvania, admitted that she had created several fictitious businesses on the Internet using the names of other people without authorization, and also opened bank accounts for each of those fictitious businesses, again using the names of real people without authorization. Adams also admitted that she had opened Paymate accounts in the names of those fictitious Internet businesses. She then used her own credit cards, as well as credit cards belonging to her relatives and friends, to pretend to purchase goods and services in amounts ranging from $1,000 to $7,000 from the fictitious businesses. Paymate processed those payments.
After Paymate deposited funds from the fraudulent sales into the bank accounts associated with the fictitious businesses, Adams immediately withdrew the fraudulently-acquired funds from various automated teller machines in Pennsylvania. She then contacted the credit card companies and reported that she had not received the goods or services. Adams also instructed her friends and relatives to do the same. The credit card companies then initiated a “charge-back” and recovered the amounts fraudulently charged from Paymate. When Paymate attempted to reclaim the funds from the bank accounts associated with the fictitious businesses, there were insufficient funds in the bank accounts because Adams had already withdrawn all of the money from the purported sales.
Adams, was indicted on July 25, 2012. She was charged with five counts of wire fraud, in violation of 18 U.S.C. § 1343, and two counts of aggravated identity theft, in violation of 18 U.S.C. §§ 1028A(a)(1)(A) and 1028A(c)(5). Under the plea agreement, Adams pleaded guilty to one count of wire fraud and one count of aggravated identity theft.
The sentence was handed down by The Honorable Lucy H. Koh, U.S. District Court Judge. Adams was also sentenced to a three-year period of supervised release and ordered to pay $32,500 in restitution to Paymate. Adams will begin serving the sentence on January 24, 2014.
Susan Knight is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Tracey Andersen. The prosecution is the result of a one-year investigation by the Federal Bureau of Investigation.
(Adams indictment )
Oakland Man Pleads Guilty to Robbing and Attempting to Rob Multiple Banks in the East BayRead the Press Release
OAKLAND – Amanuel Moreno pleaded guilty in federal court in Oakland today to five counts of bank robbery and two counts of attempted bank robbery, announced United States Attorney Melinda Haag.
In pleading guilty, Moreno admitted to robbing and attempting to rob the following banks:
DATE
BANK
LOCATION
STOLEN AMOUNT
06/29/2012
Bank of the West
24299 Southland Drive, Hayward
$25
12/06/2012
Bank of the West
4900 Telegraph Avenue, Oakland
$506
12/06/2012
Chase Bank
2270 Otis Drive, Alameda
Attempt
12/13/2012
Wells Fargo Bank
950 South Holland Drive, Hayward
$1,541
12/18/2012
Chase Bank
32101 Union Landing, Union City
Attempt
12/18/2013
U.S. Bank
1585 East 14th Street, San Leandro
$724
01/16/2013
Bank of the West
4900 Telegraph Avenue, Oakland
$3,321
Moreno, 21, of Oakland, was arrested on January 25, 2013, by local law enforcement and remained in local custody pursuant to a probation violation. He has been in federal custody since July 5, 2013. The superseding indictment charging Moreno with five counts of bank robbery and two counts of attempted bank robbery was filed on August 1, 2013. Under the plea agreement, Moreno pleaded guilty to all seven counts.
Moreno’s sentencing hearing is scheduled for February 6, 2014, before The Honorable Yvonne Gonzalez Rogers, U.S. District Judge, in Oakland. The maximum statutory penalty for each count of bank robbery and attempted bank robbery, in violation of 18 U.S.C. § 2113(a), is 20 years in prison. However, any sentence following this conviction will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Brian C. Lewis is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Janice Pagsanjan. The prosecution is the result of an investigation by the Federal Bureau of Investigation, the Oakland Police Department, the Hayward Police Department, the Alameda Police Department, the Union City Police Department, and the San Leandro Police Department.
(Moreno superseding indictment )
Convicted Santa Cruz Sex Offender Sentenced to Ten Years in Prison for Possessing Child PornographyRead the Press Release
SAN JOSE, CA – Steven Hibbett was sentenced yesterday afternoon to ten years in prison for possession of child pornography, United States Attorney Melinda Haag announced.
On July 29, 2013 Hibbett pleaded guilty to an Information alleging possession of child pornography in violation of 18 U.S.C. § 2252(a)(4)(B). In pleading guilty, Hibbett, 59, of Santa Cruz, admitted that he downloaded child pornography from the Internet onto a laptop computer that law enforcement seized from a Santa Cruz storage locker. Hibbett also admitted that he knowingly possessed over 600 images of child pornography, including images of prepubescent minors and images portraying sadistic or masochistic conduct. Hibbett also admitted that he possessed these images of child pornography while on state probation for a prior 2009 California felony conviction for possessing child pornography.
The Honorable Edward J. Davila, U.S. District Court Judge, handled down the ten year sentence. Judge Davila also sentenced the defendant to a five-year period of supervised release and ordered him to register as a sex offender and to participate in a sex offender treatment program. Hibbett has been in federal custody since was originally charged by complaint and made his initial appearance in federal court on April 18, 2013.
Assistant U.S. Attorney Joseph Fazioli prosecuted the case with the assistance of Laurie Worthen. The prosecution is a result of an investigation by the Federal Bureau of Investigation and the Santa Cruz Police Department.
Two Oakland Men Sentenced to 21 Months for Selling Crack Near Elementary SchoolRead the Press Release
OAKLAND – Adell Burrell and Antwon Graham were sentenced on October 3 and October 16, respectively, each to 21 months in prison, for possession with intent to distribute cocaine base within 1,000 feet of a school, United States Attorney Melinda Haag announced.
Burrell pleaded guilty on June 12, and Graham pleaded guilty on June 27, 2013. Both offenses occurred at a location on Sycamore Street in Oakland, which is within 1,000 feet of the St. Andrew’s Baptist Missionary Elementary School and Kindergarten. Burrell admitted at his change of plea hearing, that on November 5, 2012, he possessed 6.7 grams of cocaine base with the intent to distribute it to others. Graham admitted in a plea agreement, that on November 2, 2012, he knowingly sold 0.34 grams of cocaine base for $20.00.
Burrell, 26, and Graham, 24, both of Oakland, were indicted by a Federal Grand Jury on March 21, 2013.
Burrell’s sentence was handed down by The Honorable Yvonne Gonzalez Rogers, U.S. District Court Judge, following a guilty plea to one count of violation of 21 U.S.C. §§ 860(a) and 841(a)(1). Graham’s sentence was handed down by The Honorable Jeffrey S. White, U.S. District Court Judge, following a guilty plea to one count of violation of 21 U.S.C. §§ 860(a) and 841(a)(1). Both defendants were also sentenced to six years of supervised release following their time in custody. Burrell and Graham were prosecuted as part of Operation Safe Schools, an ongoing series of cases spearheaded by the U.S. Attorney’s Office targeting drug trafficking near schools in high-crime areas.
Burrell has been in custody since June 13, and Graham has been in custody since May 1, 2013.
(Burrell indictment & warrant )
(Graham indictment & warrant )
Four East Bay Individuals Indicted and Arrested on Drug ChargesRead the Press Release
OAKLAND – Oscar Gaxiloa-Vicencio, Rafael Verduzco-Perez, Jesus Campos-Zaragoza, and Jorge Gonzalez-Herrera, made their initial appearances on October 16, 2013, in U.S. District Court following law enforcement action on Tuesday October 15, 2013, for various narcotics charges, announced United States Attorney Melinda Haag, Special Agent in Charge David J. Johnson of the Federal Bureau of Investigation’s San Francisco Division, Administrator Michele M. Leonhart of the Drug Enforcement Administration’s San Francisco Division, and Sheriff David Livingston of Contra Costa County.
According to the Indictment, Gaxiloa-Vicencio, 41, of Oakley, Verduzco-Perez, 38, of Antioch, Campos-Zaragoza, 36, of Concord, and Gonzalez-Herrera, 47, of Pittsburg, were charged with one or multiple counts of the following: conspiracy to possess with intent to distribute and to distribute methamphetamine, conspiracy to possess with intent to distribute cocaine, possession with intent to distribute and distribution of methamphetamine, or possession with intent to distribute and distribution of cocaine. Moises Soltero-Pelayo a/k/a “El Burro”, 25, of Brentwood, Calif., is currently incarcerated but charged under the same Indictment.
Aaron Wegner is the Assistant United States Attorney who is prosecuting the case with the assistance of Jeanne Cartensen. The prosecution is the result of a one year joint investigation by the Federal Bureau of Investigation, Drug Enforcement Administration, and Contra Costa County’s Office of the Sheriff, with assistance from the Antioch Police Department.
This case is the product of an extensive investigation by the Organized Crime Drug Enforcement Task Force, which is 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.
Please note, an indictment contains only allegations against an individual and, as with all defendants, name must be presumed innocent unless and until proven guilty.
(Gaxiola-Vicencio et al indictment )
Vallejo Woman Sentenced to 27 Months in Prison for Bankruptcy and Mortgage Fraud SchemeRead the Press Release
SAN JOSE, CA — Myra Holmes was sentenced on October 7, 2013 to 27 months’ imprisonment and ordered to pay over $196,000 in restitution on bankruptcy and mortgage fraud related changes, United States Attorney Melinda Haag announced.
Following a three-week trial, on March 19, 2013, a federal jury convicted Myra Holmes, 56, of Vallejo, California, of one count of U.S.C. § 152(5)-bankruptcy fraud/concealment of assets, one count of 18 U.S.C. § 1344-bank fraud, and three counts of 18 U.S.C. 1014-making a false statement to a bank. The jury acquitted Holmes on two other false statement counts. Evidence at trial showed that Holmes enriched herself by knowingly receiving from her father his half-interest in a Vallejo residence in which she lived. Holmes knew at the time she received this property that her father had previously declared bankruptcy and that, as a result, his half-interest in the Vallejo property now belonged to his Chapter 7 bankruptcy estate. Holmes took this half-interest in the Vallejo property without paying anything to the bankruptcy estate and also without notifying or obtaining the permission of the United States Bankruptcy Court or the bankruptcy trustee. After Holmes received her father’s half-interest in the Vallejo property, she drained the equity from the property through a fraudulent refinancing mortgage loan application. The jury found that Holmes falsely told World Savings Bank in her refinancing mortgage applications: (1) that she earned $15,000 a month; (2) that she had a bank account balance of $15,000; and (3) that she was not a party to a lawsuit. Evidence at trial showed that Holmes knew at the time she filed her refinancing mortgage applications that she was overstating her monthly income and account balance and also knew that the bankruptcy trustee had recently filed a lawsuit against her seeking to recover the bankruptcy estate’s half-interest in the Vallejo property.
As a result of her bankruptcy fraud and mortgage fraud, Holmes received approximately $147,000 directly and arranged for personal debts to be paid (including her debts to Neiman Marcus, Lord & Taylor, Macy’s, and Spiegel). By the end of April 2006, Holmes had spent on personal expenses (including gambling and shopping) all of the approximately $147,000 that she had fraudulently received as a result of the November 2005 refinancing of the Vallejo property. To date, Holmes has not repaid the bankruptcy estate for the funds she took out of the Vallejo property in the November 2005 refinancing.
The Honorable Edward J. Davila, United States District Court Judge, handed down the 27-month sentence. Judge Davila also ordered Holmes to pay over $196,000 in restitution and to serve a three-year term of supervised release. Judge Davila denied Holmes' motion for bail pending appeal and ordered her to self-surrender by January 7, 2014 to begin serving her sentence.
Assistant U.S. Attorney Joseph Fazioli prosecuted the case with the assistance of Lakisha Holliman and Laurie Worthen. This prosecution is the result of a multi-year investigation by the Federal Bureau of Investigation.
(Holmes second superseding indictment )
Former Vice President of Finance Pleads Guilty to Fraud Scheme and Tax EvasionRead the Press Release
SAN FRANCISCO - Stella W. Kwan pleaded guilty to mail fraud and tax evasion in federal court in San Francisco yesterday, United States Attorney Melinda Haag announced.
In pleading guilty, Ms. Kwan admitted that she served as the Vice President of Finance for Bite Communications, a global marketing and management consulting company with offices around the world, including in San Francisco. Ms. Kwan was responsible for maintaining Bite’s financial books and records and handling incoming and outgoing funds. Ms. Kwan admitted that she prepared and signed more than 60 unauthorized checks payable to herself or for her benefit, including paying her personal American Express bills. In all, Ms. Kwan admitted that from 2008 until she was terminated in 2012, she defrauded her employer out of more than $2 million. Ms. Kwan also admitted that, during the same time period, she committed tax evasion by understating the taxable income on her federal income tax returns.
Ms. Kwan, 43, of San Francisco, was charged by Information on August 22, 2013, with one count of mail fraud, in violation of Title 18, United States Code, Section 1341, and one count of tax evasion, in violation of Title 26, United States Code, Section 7201. Under the plea agreement, Ms. Kwan pled guilty to both counts.
Ms. Kwan’s sentencing hearing is scheduled for January 28, 2014, before The Honorable William H. Alsup, U.S. District Court Judge, in San Francisco. The maximum statutory penalty for mail fraud, in violation of Title 18, United States Code, Section 1341, is 20 years in prison, a fine of $250,000, and restitution. The maximum statutory penalty for tax evasion, in violation of Title 26, United States Code, Section 7201, is 5 years in prison, a fine of $250,000, and restitution. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Doug Sprague is the Assistant U.S. Attorney who is prosecuting the case with the assistance of legal tech Rayneisha Booth The prosecution is the result of a six-month investigation by the Internal Revenue Service—Criminal Investigation and the Federal Bureau of Investigation.
Illinois Resident Convicted of Insider TradingRead the Press Release
SAN FRANCISCO – On Monday, September 30, 2013, a federal jury convicted Bassam Yacoub Salman of one count of conspiracy to commit securities fraud, in violation of 18 U.S.C. § 371, and four counts of securities fraud or insider trading, in violation of 15 U.S.C. §§ 78j(b) and 78ff, United States Attorney Melinda Haag announced.
The jury found that between 2004 and 2007, Salman, 54, of Orland Park, Illinois, engaged in securities fraud and insider trading relating to securities issued by United Surgical Partners International, Inc. (USPI) and Biosite Incorporated (BSTE). The guilty verdict followed a two week jury trial before the Honorable Edward M. Chen, U.S. District Court Judge.
The charges against Salman were part of a larger, $5.3 million, insider trading scheme first charged in 2009 against Maher Fayez Kara, of San Carlos, Calif., a former investment banker at Citigroup Global Markets Inc. in New York, and Maher Kara’s brother, Mounir Fayez Kara, also known as Michael F. Kara, of Walnut Creek, Calif. In July 2011, Maher Kara and Michael Kara both pled guilty to conspiracy and securities fraud charges and began cooperating with the government.
Evidence at trial showed that, on or about March 23, 2007, Salman, trading in an account owned by his brother-in-law, Karim Bayyouk, caused the purchase of approximately $100,000 in Biosite call options. Salman obtained the inside information about Biosite from Michael Kara, who had first obtained it from his brother, Maher Kara, who worked at Citigroup. Two days later, on March 25, 2007, Biosite announced it was merging with another company. After the merger announcement, Salman sold the options and realized a profit of approximately $947,922. Earlier, in the fall of 2006, evidence at trial showed that Salman purchased securities in United Surgical Partners International, Inc. using inside information obtained from Michael Kara and, initially, from Maher Kara.
On September 4, 2013, in a separate trial, another federal jury convicted Bayyouk, 49, of Livonia, Michigan, of obstructing and impeding an investigation by the Securities and Exchange Commission (“SEC”) into securities fraud and insider trading relating to Biosite Incorporated, in violation of 18 U.S.C. § 1505, arising from a telephone interview with the SEC on or about May 31, 2007.
Salman’s sentencing hearing is scheduled for January 15, 2014, at 2:30 p.m. before Judge Edward M. Chen in San Francisco. The maximum statutory penalty for a violation of 18 U.S.C. § 371 is a sentence of five years and a fine of $250,000. The maximum statutory penalty for a violation of 15 U.S.C. §§ 78j(b) and 78ff is a sentence of twenty (20) years and a fine of $5,000,000. However, any sentence will be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Adam A. Reeves and Katherine B. Dowling are the Assistant U.S. Attorneys prosecuting the case with the assistance of Maryam Beros, Rayneisha Booth, and Patricia Mahoney. The prosecution is the result of a lengthy investigation by the FBI with substantial assistance from the Division of Enforcement of the SEC’s San Francisco Regional Office.
(Salman unsealed indictment )
San Ramon Attorney Pleads Guilty to Tax Evasion and Eavesdropping ChargesRead the Press Release
SAN FRANCISCO - Mary Nolan, a family law attorney in San Ramon, California, pleaded guilty in federal court on September 27, 2013, to four counts of tax evasion and one count of unlawful interception of communications, announced United States Attorney Melinda Haag.
Nolan, 61, entered guilty pleas to all of the substantive counts in the indictment. According to her plea agreement, Nolan willfully evaded more than $400,000 in federal taxes between 2005 and 2009. Nolan agreed to pay $468,918.01 in restitution, and admitted having obstructed justice by submitting false contracts to the IRS during an audit. Additionally, according to the plea agreement, Nolan caused her staff to illegally eavesdrop by accessing a listening device that private investigator Christopher Butler had installed in a vehicle used by “N.F” (a victim). Nolan agreed to resign her bar license and never to practice law again.
Butler, who pleaded guilty to unlawful interception and several other offenses on May 4, 2012, admitted having installed approximately seventy-five to one hundred unlawful listening devices at the request of clients or their attorneys, including the listening device in “N.F.’s” vehicle in August 2007. Butler was sentenced to 60 months imprisonment on this charge, to be served concurrently with the 96-month sentence on his other counts of conviction.
Nolan was indicted on September 6, 2012, by a federal grand jury charging her with tax evasion for the years 2005 through 2009, in violation of 26 U.S.C. § 7201; unlawful interception of communication, in violation of 18 U.S.C. § 2511(1)(a) and (4)(a); and conspiracy to unlawfully intercept communications, in violation of 18 U.S.C. § 371.
Nolan’s sentencing hearing is scheduled for January 15, 2013, at 10:00 a.m., before the Honorable Charles R. Breyer, United States District Court Judge. The maximum penalties for each of the five counts to which Nolan pleaded guilty are five years’ imprisonment, $250,000 fine, three years supervised release, and a $100 special assessment. 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.
Hartley M. K. West is the Assistant U.S. Attorney who prosecuted the case with the assistance of Helen Yee and Rosario Calderon. The prosecution is the result of an investigation by the FBI and the Internal Revenue Service – Criminal Investigation.
(Nolan indictment )
San Bruno Man Sentenced to 70 Months for Obstruction and Being an Accessory-After-The-Fact to Three MurdersRead the Press Release
SAN FRANCISCO – Michael Ortiz, Sr. was sentenced on September 27, 2013, to 70 months in federal prison for obstruction of justice and being an accessory-after-the-fact to three racketeering murders committed by his son, Joseph Ortiz, announced United States Attorney Melinda Haag.
Michael Ortiz, Sr., 50, of San Bruno, admitted that during the evening of December 22, 2010, his son, Joseph Ortiz, told him that he shot and killed several rival gang members in South San Francisco, California. Michael Ortiz, Sr. and other co-defendants agreed to hide or destroy the firearms used in the shootings in order to help Joseph Ortiz avoid arrest and prosecution as well as to hinder the investigation of the shootings. In addition, the next day, Michael Ortiz, Sr. drove his son out of the Bay Area and later helped him flee to Mexico. Michael Ortiz, Sr. also helped hide a critical witness from law enforcement in Mexico.
“This sentence should serve as a warning about the consequences facing gang members who use violence and intimidation to further their criminal enterprises,” said Clark Settles, Special Agent in Charge for Homeland Security Investigations, San Francisco. “Homeland Security Investigations will continue to use all of the resources and authorities at its disposal to attack and dismantle the dangerous transnational gangs operating in the Bay Area.”
Michael Ortiz, Sr., pleaded guilty on July 10, 2013, to being an accessory after the fact to racketeering murder, in violation of 18 U.S.C. §§ 3 and 1959(a)(1); conspiring to obstruct justice, in violation of 18 U.S.C. § 371; obstruction of justice, in violation of 18 U.S.C. §§ 1512(c)(2) and (2); and concealment of an object to obstruct an investigation, in violation of 18 U.S.C. §§ 1519 and 2.
The Honorable Susan Illston, United States District Court Judge, handed down the 70 month sentence. Judge Illston also ordered the defendant to serve a three-year term of supervised release during which he may be searched by any federal, state, or local law enforcement officer with or without cause.
Joseph Ortiz, AKA “Little Vicious,” member of the 500 Block/C Street Gang, pleaded guilty to the racketeering murders on July 19, 2013. He is scheduled to be sentenced by Judge Susan Illston on November 8, 2013.
Acadia L. Senese and W.S. Wilson Leung are the Assistant United States Attorneys who are prosecuting the case, with the assistance of Kevin Costello, Ponly Tu, Marina Ponomarchuk, and Daniel Charlier-Smith. This prosecution is the result of an investigation by the Daly City Police Department and the South San Francisco Police Department, working with Homeland Security Investigations, and with the assistance of the San Mateo County Sheriff’s Office. Of the nineteen defendants originally charged as a result of this investigation, fourteen have pleaded guilty to racketeering-related offenses and/or offenses related to the obstruction of justice.
(Ortiz second superseding indictment )
U.S. Attorney’s Office Receives $500,000 Grant to Help Oakland Police Department Curb Gangs and Reduce Gun ViolenceRead the Press Release
SAN FRANCISCO/OAKLAND – The Bureau of Justice Assistance (BJA) awarded a $500,000 grant to the Northern District of California to support the Oakland Police Department under the Project Safe Neighborhoods (PSN) program, United States Attorney Melinda Haag announced.
The BJA, a component of the Office of Justice Programs in the Department of Justice, awarded $5.1 million in PSN grants to sixteen communities. The U.S. Attorney’s Office, Northern District of California, applied for and received a $500,000 competitive grant award to assist the Oakland Police Department in curbing gangs and reducing gun violence. This was the only PSN award made in California and was one of only sixteen awards made from nearly seventy applications in a national competition. Grants ranged in size from $150,000 to $500,000. Only six awards of $500,000 were made in the country.PSN is a strategy for combating gun violence and gang crime that builds on the latest research, community partnerships, strategic planning, training, outreach and accountability. As part of the PSN program, the U.S. Attorney and federal partners work side-by-side with local and state law enforcement and others to tailor a PSN strategy to fit the unique gun and gang crime problems in a community. The program’s effectiveness is based on the cooperation of local, state and federal agencies engaged in a unified approach led by the U.S. Attorney.
“The U.S. Attorney’s Office’s commitment to combating violent crime in the City of Oakland continues with vigor. Every day Federal law enforcement works hand-in-hand with the Oakland Police Department and the Alameda County District Attorney’s Office to target perpetrators of gang, drug, and gun violence. The U.S. Marshal’s fugitive apprehension efforts, the ATF’s Operation Gideon, the DEA and the U.S. Secret Services’ takedown of the Burnout Family Mafia, the FBI’s Operation Red Dawn, which targeted members of the Nuestra Familia, and Project Safe Schools, which subjected peddlers of drugs near elementary schools, middle schools, and high schools to significant sentences, are but a handful of recent collaborative operations,” stated U.S. Attorney Melinda Haag. “PSN looks at the entire spectrum of violence in a community from prevention, intervention, suppression, enforcement, and re-entry. Today’s new grant of $500,000 is well-deserved and will substantially assist the City of Oakland in expanding upon a comprehensive violence reduction and prevention program,” added Ms. Haag.
This particular grant will assist the City of Oakland in coordinating the many entities that are needed in creating and maintaining an effective violence reduction strategy that focuses on the small group of serious offenders that drive the majority of the violence in Oakland. This grant provides funding for a full time senior level manager tasked with coordinating all of the necessary pieces for a proven violence reduction strategy that employs partnership among enforcement agencies, community leaders and the clergy to achieve near-term community-wide reductions in shootings.
The 16 awardees and districts are: California Emergency Management Agency (Northern District of California); Ohio Office of Criminal Justice Services (Northern District of Ohio); Illinois Criminal Justice Information Authority (Northern District of Illinois); Washington Association of Sheriffs and Police Chiefs (Western District of Washington); Governor’s Office of Crime Control and Prevention (District of Maryland); Safe City Commission (Northern District of Texas); City of Chattanooga Comprehensive Gang Task Force (Eastern District of Tennessee); New Mexico Department of Public Safety (District of New Mexico); Wisconsin Office of Justice Assistance (Western District of Wisconsin); City of Omaha, Neb. (District of Nebraska); Justice Grants Administration (District of Columbia); Hoyleton Youth and Family Services (Southern District of Illinois); City of Memphis (Western District of Tennessee); state of Maine (District of Maine); Public Safety Grant Administration Office (District of Rhode Island) and City of Erie Police Department (Western District of Pennsylvania).
The Northern District of California received $500,000 from the PSN program in 2012. Those grant funds went to the City of Salinas to implement a Violence Interrupter Program operated through a local non-profit, Second Chance.
More information on President Obama’s plan to reduce gun violence is available at: www.whitehouse.gov/issues/preventing-gun-violence
The Office of Justice Programs (OJP), headed by Assistant Attorney General Karol V. Mason, provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice and assist victims. OJP has six components: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering and Tracking. More information about OJP can be found at http://www.ojp.gov
Oakland Man Sentenced to Twenty-Three Years in Prison for Robbery and CarjackingRead the Press Release
OAKLAND - Ismael Eduardo Axtle was sentenced on September 23, 2013, to 276 months in federal prison for carjacking, robbery, possession of methamphetamine for sale, being a felon in possession of a firearm, and brandishing a firearm in furtherance of a crime of violence, United States Attorney Melinda Haag announced.
According to the plea agreement, Axtle, 31, of Oakland, Calif., and co-defendant Patrick Fiammetta-McConnell robbed a parking garage in San Francisco and stole an Acura TL from the garage on July 27, 2011. On August 5, 2011, Axtle carjacked a BMW from a driver in San Francisco. On September 9, 2011, Axtle carried methamphetamine and a firearm in the carjacked BMW down to Turlock, in the Eastern District of California. On November 17, 2011, Axtle and unknown co-conspirators robbed a massage parlor at gunpoint in Petaluma. On November 18, 2011, Axtle carjacked a family in an SUV at gunpoint during a police chase in Oakland that involved several law enforcement agencies.
Axtle also admitted to possession of two firearms and hundreds of rounds of ammunition in a storage locker in Oakland.
“The prosecution of this case illustrates the strong commitment the United States Attorney’s Office has in reducing violence caused by guns and the victimization of innocent people in the City of Oakland and in the Northern District of California as a whole,” stated U.S. Attorney Melinda Haag. “We will continue to combine our resources, skills, and efforts in partnership with federal and local law enforcement toward this important goal.”
“This case is indicative of how violent criminals use firearms to terrorize our citizens and subject them to danger,” stated Special Agent in Charge Joseph M. Riehl. “ATF will continue to focus on the suspects who commit these heinous crimes.”
Axtle, pleaded guilty on May 14, 2013, to two counts of carjacking, in violation of 18 U.S.C. § 2119; two counts of interference with commerce by robbery, in violation of 18 U.S.C. § 1951(a); possession with intent to distribute 50 grams or more of methamphetamine, in violation of 21 U.S.C. §§ 841(a)(1); being a felon in possession of a firearm, in violation of 18 U.S.C. § 922(g)(1); and brandishing a firearm in furtherance of a crime of violence, in violation of 18 U.S.C. § 924(c)(1)(A)(ii).
The Honorable Saundra Brown Armstrong, United States District Court Judge, handed down the 276-month. Judge Armstrong also ordered Axtle to forfeit all firearms and ammunition, and to serve a five-year term of supervised release during which he may be searched by any federal, state, or local law enforcement officer with or without cause. Axtle’s co-defendant, Fiammetta-McConnell, has been sentenced to 157 months in federal prison for his role in the January 27, 2011, robbery and carjacking, and other unrelated crimes.
Judge Armstrong ordered Axtle to begin serving his prison sentence immediately.
Brigid Martin is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Kathleen Turner. The conviction and sentence were the result of an investigation led by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Oakland Police Department, Alameda County Regional Auto Theft Task Force, California Highway Patrol, San Francisco Police Department, Petaluma Police Department, and Turlock Police Department.
(Axtle superseding information )
Richmond Resident Convicted of Possession of Child PornographyRead the Press Release
OAKLAND – A federal jury convicted David Busby of possessing child pornography yesterday, United States Attorney Melinda Haag announced. The guilty verdict followed a 3-day jury trial before The Honorable Judge Saundra Brown Armstrong, U.S. District Judge.
Evidence at trial showed that on April 20, 2010, a network security analyst detected internet traffic indicative of child pornography on the National Energy Research Scientific Computing Center (NERSC) computer network. The internet traffic was isolated to a single laptop computer being used by David Busby. Busby worked as a computer support employee at the Lawrence Berkeley National Laboratory (LBL), and as a part-time employee at NERSC, which is affiliated with LBL. Busby’s laptop computer and his other work computers were confiscated. Busby made two statements to law enforcement officers shortly after the April 20, 2010 incident, ultimately admitting that he did download child pornography to two of his work computers. Busby said he would store the child pornography for a period of time and then delete the images.
At trial, Busby’s defense claimed that he accidentally downloaded the child pornography onto his computers while trying to access legal child modeling sites. A forensic examination of two of Busby’s computers recovered approximately 1,400 images of child pornography that had been deleted.
Busby, 60 of Richmond, was indicted by a federal grand jury in a superseding Indictment on July 9, 2013. Busby was remanded into custody following his conviction at trial.
Busby’s sentencing hearing is scheduled for December 17, 2013, before Judge Armstrong in Oakland. The maximum statutory penalty for each count, in violation of 18 U.S.C. § 2252(a)(4)(B) and (b)(2), is a minimum term of imprisonment of 10 years, and a maximum term of 20 years, a fine of $250,000, and a life term of supervised release. 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.
Brian C. Lewis is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Special Assistant U.S. Attorney Kevin Lin, Janice Pagsanjan, and Patty Lau. This prosecution is the result of an investigation by the Department of Energy Office of Inspector General, University of California Police Department, and the Federal Bureau of Investigation.
(Busby superseding indictment )
Department of Justice Awards $3 Million to Support Tribal Justice and Safety in the Northern District of CaliforniaRead the Press Release
SAN FRANCISCO – The Department of Justice awarded grants totaling over $3 million to Native American tribes in the Northern District of California, announced United States Attorney Melinda Haag. The list of this year’s grantees within the Northern District of California includes the Hoopa Valley Tribe ($1,379,961), the Yurok Tribe ($924,999), the Round Valley Indian Tribes ($300,000), the Hopland Band of Pomo Indians ($300,000), and the Cahto Tribe of the Laytonville Rancheria ($299,966).
The awards were made through the Department's Coordinated Tribal Assistance Solicitation (CTAS), a single application for tribal-specific grant programs. The Department of Justice developed CTAS through its Office of Community Oriented Policing, Office of Justice Programs and Office on Violence against Women, and administered the first round of consolidated grants in September 2010. Over the past four years, it has awarded 989 grants totaling more than $437 million. Information about the consolidated solicitation is available at www.justice.gov/tribal/. A fact sheet on CTAS is available at www.justice.gov/tribal/ctas2013/ctas-factsheet.pdf. CTAS grants enhance law enforcement practices and sustain crime prevention and intervention efforts in various purpose areas including public safety and community policing; justice systems planning; alcohol and substance abuse; corrections and correctional alternatives; violence against women; juvenile justice; and tribal youth programs.
"These grants are crucial to establishing programs to ensure safe and secure native communities in the Northern District of California,” said United States Attorney Melinda Haag. She continued: “The grants announced today will enhance law enforcement practices, sustain crime prevention and intervention efforts, improve public safety, augment community policing, emphasize efforts to combat violence against women, assist tribes with justice system planning, and provide alcohol and substance abuse programs.”
The awards in the Northern District of California were made as follows:
Hoopa Valley Tribe
- Justice Systems, and Alcohol and Substance Abuse (BJA) $501,437
- Violence Against Women Tribal Governments Program (OVW) $878,524
- Hoopa Valley Tribe Total $1,379,961
Yurok Tribe
- Public Safety and Community Policing (COPS) $299,999
- Comprehensive Tribal Justice Systems Strategic Planning (BJA) $75,000
- Violence Against Women Tribal Governments Program (OVW) $550,000
- Yurok Tribe Total $924,999
Round Valley Indian Tribes
- Public Safety and Community Policing (COPS) $300,000
Hopland Band of Pomo Indians
- Public Safety and Community Policing (COPS) $300,000
Cahto Tribe of the Laytonville Rancheria
- Public Safety and Community Policing (COPS) $299,966
Thirty U.S. Attorneys from districts that include Indian country or one or more federally recognized tribes including, U.S. Attorney Haag, serve on the Native American Issues Subcommittee (NAIS). The NAIS focuses exclusively on Indian country issues, both criminal and civil, and is responsible for making policy recommendations to the Attorney General regarding public safety and legal issues.
Next month, the Justice Department will hold its annual consultation on violence against native women on Oct. 31st, 2013, in Bismarck, N.D. In addition, an Interdepartmental Tribal Justice, Safety and Wellness Session will be held in Bismarck on Oct. 29-30, 2013. It will include an important listening session with tribal leaders to obtain their views on the Department grants, as well as valuable training and technical assistance.
Today's announcement is part of the Justice Department's ongoing initiative to increase engagement, coordination and action on public safety in tribal communities. A complete list of the 2013 awards is available at http://www.justice.gov/tribal/docs/ctas-award-list-2013.pdf
San Jose Man Pleads Guilty to Impersonating DEA Agent and Securities FraudRead the Press Release
SAN JOSE - Jonathan Hoang, of San Jose, California, pleaded guilty in federal court in San Jose on September 16, 2013, to impersonating a U.S. Drug Enforcement Agency (DEA) Agent securities fraud, announced United States Attorney Melinda Haag.
Hoang, 48, was indicted on July 25, 2012, by federal grand jury charging him with Use of a Counterfeit Seal of an Agency of the United States, in violation of18 U.S.C. § 506(a)(2); Pretending to Be an Officer of the United States, in violation of 18 U.S.C. § 912; and Possession of a Counterfeit Seal of an Agency of the United States, in violation of 18 U.S.C. § 506(a)(3). He was also charged in a Superseding Information filed on September 12, 2013, with Securities Fraud in violation of 15 U.S.C. §§ 78j(b) and 78ff and 17 C.F.R. §§ 240.10b-5.
Hoang pleaded guilty to all four counts in the Indictment and Superseding Information without a plea agreement with the United States. During the plea hearing, Hoang admitted to the factual basis for the guilty pleas to all charges.
The charges to which Hoang pleaded guilty involving impersonating a DEA Special Agent, are based on the following among other evidence: during the early morning of July 20, 2012, San Jose Police Department Officers found Hoang in a parked truck and discovered law enforcement type equipment in the truck. Upon investigation, the DEA determined that Hoang had indicated to his landlord that he worked for DEA. Hoang also indicated to his landlord that in order to do to his job with the DEA, the landlord could not run a credit check on Hoang. Hoang also provided his landlord with a drug screening report, credit check, and verification of employment from the DEA. The documents Hoang provided to his landlord included documents on purported DEA letterhead containing a DEA seal. In addition, when Hoang was arrested on July 20, 2012, the officers found a counterfeit DEA employee identification card. This document identified “Vu H. Hoang”, “Agent ID# 860501” as a Special Agent of the U.S. Department of Justice Drug Enforcement Administration. The false Identification card contained a DEA seal and a photograph of Hoang.
Hoang has never been employed as a law enforcement officer with the DEA, nor has he ever been authorized by the DEA to hold himself out as a Special Agent of the DEA.
The charge to which Hoang pleaded guilty involving securities fraud is based on the following among other evidence. On or about November 8, 2012, Hoang sold purported stock to an investor. Hoang offered to the investor 2,500 shares of stock in Utherverse Digital, Inc. that Hoang claimed to own. The investor signed a purported “Subscription Agreement” to document the sale, and gave Hoang a check for $2,500 as the purchase money for the stock. Hoang represented to the investor that Utherverse Digital operated a website called Redlight Center, Utherverse Digital was in the process of being acquired by another company, and the shares of Utherverse Digital would dramatically increase in value after the acquisition. At the time Hoang made these representations, he did not own stock issued by Utherverse Digital. Also, Utherverse Digital was not involved in negotiations with another person or entity for the acquisition of Utherverse Digital. Federal Bureau of Investigation agents found the purchase money check and purported “Subscription Agreement” in Hoang’s car on November 9, 2013, while executing a search warrant.
Hoang has been in custody since November 9, 2012.
Hoang’s sentencing hearing is scheduled for December 10, 2013, at 9:00 a.m., before The Honorable Edward J. Davila, U.S. District Court Judge, in San Jose. The following are the maximum statutory penalties for each count:
- Count One of the Indictment: 18 U.S.C. § 506(a)(2) – Use of a Counterfeit Seal of an Agency of the United States: Statutory Penalties: a maximum prison sentence of five years, a maximum fine of $250,000, a maximum period of supervised release of three years, and a $100 special assessment.
- Count Two of the Indictment: 18 U.S.C. § 912 – Pretending to Be an Officer of the United States: Statutory Penalties: a maximum prison sentence of three years, a maximum fine of $250,000, a maximum period of supervised release of one year, and a $100 special assessment.
- Count Three of the Indictment: 18 U.S.C. § 506(a)(3) – Possession of a Counterfeit Seal of an Agency of the United States: Statutory Penalties: a maximum prison sentence of five years, a maximum fine of $250,000, a maximum period of supervised release of three years, and a $100 special assessment.
- Count One of Information: 15 U.S.C. §§ 78j(b) and 78ff and 17 C.F.R. §§ 240.10b-5 – Securities Fraud: Statutory Penalties: a maximum prison sentence of 20 years, a maximum fine of $5,000,000, a maximum period of supervised release of three years, and a $100 special assessment.
However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The prosecution is the result of an investigation by the FBI, the DEA, the San Jose Police Department, and Internal Revenue Service – Criminal Investigation.
(Hoang information )
(Hoang indictment )
Manager of Commodities Fund Sentenced to 30 MonthsRead the Press Release
SAN JOSE - Rodney Hatfield was sentenced late yesterday afternoon to 30 months in federal prison in connection with his role in a conspiracy to commit wire fraud, United States Attorney Melinda Haag announced.
Hatfield pled guilty to the charge on January 30, 2013. According to the plea agreement, Hatfield admitted that he conspired with his co-defendant to obtain money from investors by means of materially false representations about the value of their investment accounts. Mr. Hatfield admitted that he defrauded members of his own Jehovah’s Witness congregation in Watsonville, California. As part of the fraud scheme, he solicited millions of dollars in investment money from his fellow congregants and others to invest in Landmark Trading Company, LLC (“Landmark”). This company was set up as a holding company for the purpose of trading in foreign currency exchange by Hatfield and his co-defendant.
Initially, Landmark did engage in some legitimate currency trades on behalf of its investors; however, the company quickly began to run a negative return on its trading activity. Rather than accurately report this negative trading activity to investors, Hatfield and his co-defendant distributed false reports to investors in e-mails that their trading accounts were profitable and increasing in value. While some investors did receive all or most of their principal back, Hatfield admitted his actions resulted in a net loss to investors of more than $1 million.
The sentence was handed down by the Honorable Edward J. Davila, United States District Court Judge, following a guilty plea on the first count of the indictment, a violation of 18 U.S.C. § 1349. Judge Davila also sentenced the defendant to three years of supervised release following his term of imprisonment. Judge Davila did not impose a fine in light of the defendant’s financial circumstances. However, Judge Davila set a hearing for November 8, 2013, to determine the amount of restitution as well as set a reporting date for Hatfield to begin serving his sentence.
Timothy J. Lucey is the Assistant United States Attorney who is prosecuting the case with the assistance of Laurie Worthen. The prosecution is the result of a multi-year investigation by the United States Postal Inspection Service. The United States Attorney’s Office also wishes to recognize the assistance of the Commodities Future Trading Commission and the United States Trustee for the Northern District of California.
(Hatfield indictment )
(Hatfield plea agreement )
Former Vice President of Wells Fargo Advisors and Morgan Stanley & Co. Pleads Guilty in $1.8 Million Fraud SchemeRead the Press Release
SAN FRANCISCO – Adorean Boleancu pleaded guilty in federal court in San Francisco on September 13, 2013, to one count of wire fraud, United States Attorney Melinda Haag announced.
In pleading guilty, Boleancu, Vice President and Senior Financial Consultant in the Wealth Management Group of Wells Fargo Advisors, LLC., admitted to writing more than $1.8 million in checks on accounts of an elderly, widowed client for his personal benefit. He signed the victim’s name to checks drawn on the victim’s brokerage account and home equity lines of credit without the victim’s knowledge or authorization. The checks were payable to Boleancu’s family members, his girlfriend, another female acquaintance, cash, and financial companies where Boleancu had credit card accounts.
Boleancu, 47, of Napa, California, was indicted by a federal Grand jury on July 9, 2013. He was charged with 14 counts of bank fraud, in violation of 18 U.S.C. § 1344; 4 counts of wire fraud, in violation of 18 U.S.C. § 1343; 5 counts of money laundering, in violation of 18 U.S.C. § 1957; and 4 counts of aggravated identity theft, in violation of 18 U.S.C. § 1028A.
Boleancu is currently released on an $800,000 bond.
Boleancu’s sentencing hearing is scheduled for December 17, 2013, before the Honorable Richard Seeborg, U.S. District Court Judge, in San Francisco. The maximum statutory penalty for wire fraud, in violation of 18 U.S.C. § 1343, is 30 years and a fine of $1,000,000, plus restitution. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Robert S. Leach and Kyle F. Waldinger are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Rayneisha Booth and Mary Mallory. The prosecution is the result of an 18-month investigation by the Federal Bureau of Investigation.
(Boleancu indictment )
Department of Justice Awards Hiring Grants to Support Northern Disctrict of California Law EnforcementRead the Press Release
SAN FRANCISCO – The Department of Justice awarded grants totaling over $9 million to cities and counties in the Northern District of California, aimed at creating 30 new law enforcement positions, announced United States Attorney Melinda Haag.
The list of this year’s grantees within the Northern District of California includes Oakland, Alameda County, Hayward, East Palo Alto, Clearlake, Greenfield, Kings City, Marina, and Watsonville.
"The federal law enforcement agencies and U.S. Attorney's Office embrace the opportunity to work with local law enforcement to ensure the safety and security of the residents of the Northern District of California," said U.S. Attorney Melinda Haag. "The additional officers who will be hired as a result of these grants will bring much needed reinforcements to those cities and counties who can use them most. In particular, the City of Oakland and Alameda County will benefit from 18 new officers placed on the streets. The grants announced today are further building blocks that strengthen the partnerships among the federal, state, and local law enforcement organizations."
The Department of Justice Community Oriented Policing Services Service (COPS) Hiring Program offers grants to state, local and tribal law enforcement agencies to hire or rehire community policing officers. The program provides salaries and benefits for officer and deputy hires for three years. Grantees for the 2013 hiring program were selected based on their fiscal needs, local crime rates, and community policing plans.
The COPS Office is a federal agency responsible for advancing community policing nationwide. Since 1995, COPS has awarded over $14 billion to advance community policing, including grants awarded to more than 13,000 state, local, and tribal law enforcement agencies to fund the hiring and redeployment of approximately 125,000 officers and provide a variety of knowledge resource products including publications, training, and technical assistance.
Additional information about the 2013 COPS Hiring Program can be found on the COPS website at www.cops.usdoj.gov.
Oakland Gang Member Sentenced to 12 Years for Firearm Possession Related to A Shoot-OutRead the Press Release
SAN FRANCISCO – Diandre Cummings, a member of the Oakland “Money Team” gang, was sentenced yesterday to serve a sentence of 144 months of imprisonment, United States Attorney Melinda Haag announced.
Cummings was indicted by federal grand jury on January 10, 2013, and charged with two counts being a Felon in Possession of a Firearm and Ammunition, in violation of 18 U.S.C. § 922(g). Cummings pleaded guilty to both counts in the Indictment on June 5, 2013.
Evidence showed that on October 21, 2012, Cummings engaged in a shoot-out on the street in Oakland with a rival gang member. The rival gang member was in a car with his family while the two men shot at each other. Cummings was not apprehended on the scene. Rather, on November 8, 2012, officers of the Oakland Police Department conducted surveillance on Cummings and caught him with a pistol in his vehicle. Cummings had previously been convicted of at least one felony offense and the ammunition and firearm had previously moved in interstate or foreign commerce. The sentence was imposed for the defendant’s possession of a firearm and ammunition during a shoot-out with a rival gang member and subsequent possession of a different firearm.
The sentence was handed down by The Honorable Phyllis J. Hamilton, U.S. District Judge. In addition to his prison term, Cummings was also sentenced to a 3-year period of supervised release and was also banned from any contact with members of Oakland’s Money Team gang during his period of supervision.
“This substantial sentence should send a strong message that we are dedicated to curbing gang violence, shootings, and the illegal use and possession of firearms in the City of Oakland. This case is a perfect example of the effectiveness of cooperative work between federal and local law enforcement– in this case the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Oakland Police Department. My office, and the numerous federal agencies working alongside the Oakland Police Department, will continue these ongoing efforts for maximum impact on violence reduction and making Oakland a safer city for all of its residents,” said United States Attorney Melinda Haag.
The case was prosecuted by Assistant United States Attorney James Mann with the assistance of Vanessa Vargas. The prosecution is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Oakland Police Department.
(Cummings indictment )
Multiple Defendants Charged in Fraud Scheme to Obtain Federal Student AidRead the Press Release
OAKLAND – A federal grand jury in Oakland returned an Indictment on August 15, 2013, charging Kyle Edward Moore, Cortio Detrice Wade, Marcel Devon Bridges, and Derricka Lynn Fluker with conspiracy to commit financial aid fraud and multiple counts of wire fraud, announced United States Attorney Melinda Haag and Natalie Forbort, Special Agent in Charge of the United States Department of Education, Office of Inspector General’s Western Regional Office.
According to the Indictment, which was unsealed yesterday, Moore is alleged to have conspired with Wade, Bridges, and Flucker to obtain federal student aid funds offered under the Title IV Federal Student Assistance Program. Moore and his co-defendants obtained the aid, in the form of loans and grants, by preparing and transmitting fraudulent Free Applications for Federal Student Aid (FAFSAs) to the U.S. Department of Education.
In carrying out the fraud scheme, Moore, Wade, Bridges, and Flucker recruited third-parties to serve as “straw students” and then assisted the straw students in preparing, signing, and transmitting fraudulent FAFSAs knowing that many of the straw students were not eligible to obtain Title IV funds. Among other things, the straw students had not obtained high school diplomas or a recognized equivalent, and had no intention of attending school or using the funds for educational purposes. After receiving the fraudulently obtained student loan funds, Moore and his co-defendants would share the funds among themselves and sometimes with the straw students.
Moore, Bridges, and Fluker were arrested on September 11, 2013, in the Northern District of California and made their initial appearances in federal court in Oakland yesterday morning. Wade was arrested in Phoenix, Arizona, and made her initial appearance in the District of Arizona yesterday as well. The three defendants that appeared in federal court in Oakland were each released on bonds. Moore, Bridges, and Fluker are scheduled to appear next on October 18, 2013, at 9:30 a.m. before The Honorable Jon S. Tigar, U.S. District Judge.
The maximum statutory penalty for each count of conspiracy to commit financial aid fraud, in violation of 18 U.S.C. § 371, is five years in prison, a fine of $250,000 or twice the gross gain or loss, whichever is greater, and restitution. The maximum penalty for each count of wire fraud, in violation of 18 U.S.C. § 1343, is twenty years in prison, a fine of $250,000 or twice the gross gain or loss, whichever is greater, 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.
Wade M. Rhyne is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Janice Pagsanjan. The prosecution is the result of an investigation by the Department of Education, Office of the Inspector General and the Federal Bureau of Investigation and the U.S. Department of Housing and Urban Development, Office of the Inspector General.
(Moore indictments )
Former Pacific Palisades Man Sentenced to Four Years in Prison for Investment and Mortgage Fraud SchemeRead the Press Release
SAN FRANCISCO – Robert Hans Schenk was sentenced on September 6, 2013, to four years in prison for wire fraud, United States Attorney Melinda Haag announced.
Schenk pleaded guilty on September 2, 2011, to one count of conspiracy to commit wire fraud and eight counts of wire fraud. In his plea agreement, Schenk admitted that he fraudulently induced numerous individuals to invest millions of dollars in his businesses, Griffin Digital Services and Smartworld Solutions. Schenk admitted to using much of those funds to pay his family’s personal expenses. In addition to this investment fraud scheme, Schenk also admitted to using the identity of one of the investors without his knowledge and fraudulently obtained a $1.7 million mortgage refinancing loan in that investor’s name. The mortgage refinancing loan was used for the home in which Schenk and his family lived in Pacific Palisades, California.
Schenk, 52, was arrested on January 4, 2011, and has been in federal custody since that date. He was indicted by a federal grand jury on January 11, 2011. He was charged in an Indictment with one count of conspiracy to commit wire fraud, eight counts of wire fraud, and two counts of aggravated identity theft.
The sentence was handed down by The Honorable Susan Illston, U.S. District Judge, following a guilty plea to one count of conspiracy to commit wire fraud, in violation of Title 18, United States Code, Section 1349, and eight counts of wire fraud, in violation of Title 18, United States Code, Section 1343. Judge Illston also sentenced the defendant to a three-year period of supervised release and ordered him to pay a total of approximately $4.5 million in restitution to various individual victims and to the mortgage lender that suffered a loss with respect to the $1.7 million mortgage refinancing loan.
Kyle F. Waldinger is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Rayneisha Booth. The prosecution is the result of an investigation by the Federal Bureau of Investigation.
Castro District Resident Sentenced for Methamphetamine DistributionRead the Press Release
SAN FRANCISCO – Jonathan Gildart was sentenced on September 4, 2013, to 87 months in prison for distributing methamphetamine in San Francisco’s Castro District, United States Attorney Melinda Haag announced.
Gildart pleaded guilty on May 22, 2013, to distribution and possession with intent to distribute methamphetamine. According to the plea agreement, Gildart admitted that on February 15, 2013, at a shipping business on Castro Street in San Francisco, he sold methamphetamine to an individual in exchange for $3,000. On that same date, at his apartment in the Castro District, Gildart possessed additional methamphetamine with the intent to distribute it to others. Both the shipping business and Gildart’s apartment were within 1,000 feet of two schools.
Gildart, age 31, was charged by Information on May 14, 2013, in anticipation of his guilty plea. The defendant has been in continuous federal custody since April 15, 2013.
“Methamphetamine has become a large problem in our communities, and has had a significant impact in various San Francisco neighborhoods. Our office is committed to seeking serious consequences for those dealing methamphetamine in our neighborhoods, particularly where methamphetamine is sold near schools,” said Ms. Haag.
The sentence was handed down by The Honorable Maxine M. Chesney, U.S. District Judge, following a guilty plea to one count of violation of distribution and possession with intent to distribute methamphetamine, 21 U.S.C. § 841(a)(1) and (b)(1)(B)(viii). Judge Chesney also sentenced the defendant to a four-year period of supervised release.
The prosecution is the result of an operation by the San Francisco Police Department and investigation by the Drug Enforcement Administration.
(Gildart Information )
San Jose Man Sentenced to 21 Months for Destroying EvidenceRead the Press Release
SAN JOSE – Randy Daniel Shattuck was sentenced on September 5, 2013 to 21 months in prison for destroying evidence, United States Attorney Melinda Haag announced.
Shattuck pleaded guilty on January 10, 2013. According to the plea agreement, Shattuck admitted that after he had learned of the existence of a criminal investigation into his internet activities, he intentionally destroyed certain files that were stored on his external hard drive, just minutes before the arrival of federal agents to his residence.
Shattuck, 29, of San Jose, was indicted by a federal grand jury on September 26, 2012, and charged with a single count of the destruction of evidence.
“The severity of this sentence should send a strong message of deterrence to anyone considering destroying evidence. This Office will investigate and prosecute persons that obstruct investigations by our partners in federal law enforcement,” said United States Attorney Melinda Haag.
The sentence was handed down by The Honorable D. Lowell Jensen, U.S. Senior District Court Judge, following a guilty plea on the single count of the indictment, violation of 18 U.S.C. 1519. Judge Jensen also imposed a fine of $3,000 and sentenced the defendant to three years of supervised release. The defendant will begin serving the sentence on November 5, 2013.
Timothy J. Lucey is the Assistant United States Attorney who is prosecuting the case with the assistance of Laurie Worthen. The prosecution is the result of an investigation by the Homeland Security Investigations, Department of Homeland Security.