Northern District of California
Press releases recorded for this federal judicial district.
San Francisco Resident Pleads Guilty to Filing A False Tax ReturnRead the Press Release
SAN FRANCISCO – Richard Chong pleaded guilty today to a charge involving the failure to disclose the existence of foreign bank accounts on his tax returns, United States Attorney Melinda Haag and Internal Revenue Service Criminal Investigation (IRS-CI) Special Agent in Charge José M. Martínez announced.
According to the plea agreement, Richard Chong, of San Francisco, filed U.S. Individual Income Tax Returns in 2005, 2006, and 2007 in which he falsely stated on Schedule B that he had “no” foreign bank accounts. Chong, in fact, had multiple foreign bank accounts, including an account at LGT Bank in the Principality of Liechtenstein. Chong admitted that he did not disclose these accounts to the person preparing his income tax returns although he knew he was required to disclose them to the IRS.
In pleading guilty, Chong agreed to resolve all civil liability for failing to file Reports of Foreign Bank and Financial Accounts, Form TD F 90-22.1, and other foreign information reporting obligations under the United States law, for the tax years 1999 through 2007. He will also pay a 50% penalty with respect to the funds held in the undeclared offshore accounts for the one year with the highest balance in the account for the calendar years 1999 through 2007. He agreed to pay this penalty prior to sentencing.
Chong, who was charged on July 8, 2013, with one count of filing a false tax return in violation of 26 U.S.C. 7206(1), is scheduled to be sentenced on December 13, 2013.
The maximum statutory penalty for each count of filing a false tax return, in violation of Title 26, U.S.C § 7206(1) 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.
Thomas Newman is the Assistant U.S. Attorney who is prosecuting this case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
Pleasanton Woman Pleads Guilty to Filing False Claim with the IRSRead the Press Release
OAKLAND – Denise LaShawn Reed, also known as Brooke Nicholson, Lauren Roberts, Denise Berry, Savana Jones, and Neyce Roberts, pleaded guilty to a charge related to a false tax refund scheme, United States Attorney Melinda Haag and Internal Revenue Service-Criminal Investigation Special Agent in Charge José M. Martinez announced.
According to the plea agreement, from January 2009 through February 2010, Reed, 45, of Pleasanton, California, filed 14 false and fraudulent federal income tax returns with the IRS. These claims were all filed as Forms 1040, U.S. Individual Income Tax Returns. The total amount of the false claims was $94,700. Reed knowingly prepared and electronically filed the returns with the IRS. The claims listed on the returns were all fictitious, with the exception of the individual’s identities. As part of the scheme, some of the returns reported that the taxpayer earned income as part of a business that they operated when Reed knew the taxpayer did not own or operate a business. The fourteen false tax returns fraudulently reported that a refund was due. Reed admitted to receiving the tax refunds for 13 of the false claims.
Reed was charged on December 18, 2012, with 14 counts of filing false claims. She pleaded guilty to one count.
The maximum penalty for filing a false claim, in violation of Title 18, United States 287, is five 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.
In response to these types of cases, the Justice Department’s Tax Division issued a new directive to further the efforts of the Tax Division and help U.S. Attorneys’ Offices respond quickly and effectively to the challenges in stolen identity refund fraud (SIRF) cases. To further this goal, Tax Division Directive 144, which took effect on Oct. 1, 2012, was issued to streamline the process for prosecuting these offenses.
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.
(Reed Indictment )
Man Claiming to Be Son of the President of the Congo Pleads Guilty to Defrauding Victims Out of $1.6 MillionRead the Press Release
SAN FRANCISCO – Blessed Marvelous Herve pleaded guilty in federal court in San Francisco today to wire fraud, United States Attorney Melinda Haag announced.
In pleading guilty, Herve admitted that from 2006 through 2012, he devised and executed a scheme to defraud victims out of approximately $1.6 million through a series of false and fraudulent statements, representations, and promises. Herve admitted that he falsely represented to victims that his father was the President of the Congo and a multi-billionaire.
Herve falsely represented that the United States government had recently seized more than $43 million of his money, and as part of his scheme, he sought the victim’s financial assistance in order to prevail in a federal court case to gain access to the funds. Herve admitted to signing four promissory notes in which he promised to pay one victim bonus sums of $500,000 and $1 million in exchange for the victim’s financial support of Herve’s purported quest to obtain the $43 million that the government had supposedly seized.
Herve also admitted that he falsely represented to victims that because of his federal court case, he was in federal prison from 2009 through 2012. During this time, Herve fraudulently solicited funds from a second victim. Herve promised this victim full repayment of her money plus a bonus of $1 million and a luxury car upon the completion of his federal case and the release of his seized funds. On or about October 2012, Herve solicited and received $47,000 from the second victim. He falsely claimed that he needed the funds to pay the Internal Revenue Service to satisfy the final judgment entered against him, and that this final payment of $47,000 would result in the release of his seized millions.
Herve, 41, of San Francisco, was charged by Criminal Complaint and arrested on April 24, 2013. He has been in custody since his arrest. He was indicted by a federal grand jury on May 7, 2013. Herve was charged with one count of wire fraud in violation of 18 U.S.C § 1343, to which he pleaded guilty under a plea agreement.
Herve’s sentencing hearing is scheduled for November 22, 2013, before The Honorable Jon S. Tigar, U.S. District Court Judge, in San Francisco. The maximum statutory penalty for wire fraud, in violation of 18 U.S.C § 1343, is 20 years in prison and a fine of $250,000. In his plea agreement, Herve agreed to pay restitution to the victims in the amount of approximately $1.7 million. 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.
Hallie Hoffman is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Elizabeth Garcia, Bridget Kilkenny, and Muffy Mallory. The prosecution is the result of an investigation by the Federal Bureau of Investigation and the United States Department of Homeland Security.
Seaside Partner in Monterey Investment Company Convicted of Defrauding Investors Out of Millions of DollarsRead the Press Release
SAN JOSE - A federal jury in San Jose convicted Michael Swanson, of Seaside, Calif., yesterday with mail fraud, wire fraud, securities fraud, and conspiracy to commit mail and wire fraud, United States Attorney Melinda Haag announced.
According to the evidence at trial, Swanson, 62, was a partner in the management of an investment company called APS Funding, Inc. (“APS”). APS engaged in the business of offering short-term, high-interest loans, also known as “hard money lending,” for business and real estate development purposes. The three APS partners, including Swanson, established several investment funds under the APS umbrella, including GCF Investment, L.L.C. and the Greenlight Fund. The partners recruited investors to purchase shares in these funds and assured investors that their investments would be used to fund the loans. According to the evidence at trial, however, the partners attracted few borrowers and made few hard money loans with the invested funds, but instead diverted investor money to pay for the partners’ personal expenses. From 2007 to 2009 APS received more than $5 million from investors, over 90% of which was diverted to the partners for their personal use.
Swanson was convicted of one count of Conspiracy to Commit Mail and Wire Fraud in violation of Title 18, United States Code, Section 1349, twelve counts of Mail Fraud, in violation of Title 18, United States Code, Section 1341, fourteen counts of Wire Fraud, in violation of Title 18, United States Code, Section 1343, and one count of Securities Fraud, in violation of Title 15, United States Code, Sections 78j(b) and 78ff, and Title 17, Code of Federal Regulations, Sections 240.10b-5 and 240.10b5-2. Swanson was acquitted of one count of mail fraud and one count of securities fraud. He is scheduled to be sentenced on December 18, 2013, before the Honorable Lucy H. Koh, U.S. District Judge. Beth Pina, one of Swanson’s partners, pleaded guilty on December 17, 2012, and is scheduled to be sentenced on March 14, 2014.
The maximum penalty for each count of Conspiracy to Commit Mail and Wire Fraud in violation of Title 18, United States Code, Section 1349, and for the substantive Mail and Wire Fraud counts, is 20 years imprisonment and a fine of $250,000 fine, or twice the gross gain or gross loss from the offense, plus restitution. The maximum penalty for each count of Securities Fraud in violation of Title 15, United States Code, Sections 78j(b) and 78ff, and Title 17, Code of Federal Regulations, Sections 240.10b-5 and 240.10b5-2, is 20 years imprisonment and a fine of $5,000,000 fine, 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.
Jeff Schenk and Amber Rosen are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Nina Burney. The prosecution is the result of an investigation by the Federal Bureau of Investigation, Securities and Exchange Commission, and the Monterey County District Attorney’s Office.
Gunman in Armed Bank Robbery Sentenced to 10 years in PrisonRead the Press Release
OAKLAND – Gary Casdell Fite, II, was sentenced today to 10 years in prison for armed bank robbery and brandishing a firearm in furtherance of a crime of violence, United States Attorney Melinda Haag announced.
In pleading guilty, Fite admitted to robbing the Mechanics Bank on Pinole Valley Boulevard in Pinole, Calif., on March 1, 2013, with the help of a getaway driver and a lookout. Fite admitted that he was the gunman in the armed robbery. According to the plea agreement, Fite entered the bank, brandished his loaded firearm, and ordered everyone to get down on the ground. Fite then jumped over the teller counter and demanded money from two victim tellers. While demanding money, Fite pointed his loaded gun at the head of one of the victim tellers. Fite stole $3,292 from the bank.
Fite, 23, of Oakland, was indicted by a federal Grand Jury on March 28, 2013, and is currently in federal custody. The sentence was handed down by U.S. District Court Judge Phyllis J. Hamilton. In addition to his prison term, Fite was also sentenced to a 5-year period of supervised release.
Co-defendant and getaway driver Regina Dean, 37, of Antioch, was sentenced on August 21, 2013, to 5 years in prison. The alleged lookout, Kevin Tyrone Buford, 27, of Vallejo, was indicted on August 30, 2013, and his next court appearance is scheduled before Judge Hamilton on September 18, 2013, at 1:30 p.m.
Brian C. Lewis is the Assistant U.S. Attorney who is prosecuting the case with the assistance Legal Assistant Janice Pagsanjan. The prosecution is the result of an investigation by the FBI.
Danville Resident Ordered DenaturalizedRead the Press Release
SAN FRANCISCO – Jie Zhong’s naturalization was revoked and set aside by the United States District Court on Thursday, August 29, 2013, United States Attorney Melinda Haag announced. The court’s decision followed a trial before the Honorable Maria-Elena James, U.S. Magistrate Judge.
Evidence at trial showed that Zhong, 37, of Danville, Calif., falsely claimed to be a Falun Gong practitioner, and obtained asylum based on that false claim. He then applied for permanent residency; however, after waiting four years for that application to be approved, Zhong divorced his Chinese national wife and married a United States citizen for the purpose of obtaining an immigration benefit. Zhong’s first asylum-based application for permanent residency was approved, and he received naturalization based on that status. In late 2010, an officer with U.S. Citizenship and Immigration Services (USCIS) began investigating Zhong because she believed there were some indications of marriage fraud.
Judge James found in favor of the United States on all counts alleged in the complaint. Specifically, Judge James found that Zhong illegally procured citizenship because he engaged in marriage fraud and asylum fraud. Judge James further found that Zhong illegally procured citizenship because he provided false testimony under oath and thus lacked the good moral character requisite for naturalization, and because he procured naturalization by concealment of a material fact.
“The prosecution of this case demonstrates the commitment of this office to preventing immigration fraud,” said United States Attorney Melinda Haag. “Both naturalization and asylum are precious immigration benefits, and it is important to ensure that the path to each is secure.”
“When people enter the United States, immigrate and later become citizens, all done through fraud, their unlawful actions harm the integrity of our immigration system,” said San Francisco District Fraud Detection and National Security Chief Rebecca Galindo. “We at USCIS are proud of having discovered this double fraud, and of having developed the case for successful prosecution.”
Assistant U.S. Attorney Melanie L. Proctor prosecuted the case with the assistance of Paralegal Tiffani Chiu, and Legal Assistants Tina Louie and Kathy Terry. Trial Attorney Stacey Young, Office of Immigration Litigation, Civil Division, U.S. Department of Justice, served as co-counsel on the case. The prosecution is the result of a one-year investigation by USCIS and U.S. Immigration and Customs Enforcement, both part of Department of Homeland Security.
(Zhong order )
“Dirty DUI” Cop Convicted of Extortion and Honest Services FraudRead the Press Release
Stephen Tanabe, a former deputy with the Contra Costa County Sheriff’s Office, was convicted today by a federal jury in San Francisco, United States Attorney Melinda Haag announced. The jury found Tanabe guilty of two counts of extortion under color of official right, in violation of 18 U.S.C. § 1951; three counts of wire fraud on a deprivation of honest services theory, in violation of 18 U.S.C. §§ 1343 and 1346; and one count of conspiracy to commit honest services fraud, in violation of 18 U.S.C. § 1349. Tanabe was acquitted on one extortion count.
According to evidence presented at trial, Tanabe conspired to and engaged in a scheme to take bribes in exchange for his services as a deputy sheriff, thereby depriving the people of Contra Costa County of their right to his honest services. Specifically, the evidence showed that Christopher Butler, a former Antioch Police Officer turned private investigator, was hired by wives and ex-wives engaged in divorce and child custody proceedings to arrange “stings” against their spouses, whom they told Butler had a propensity to drive under the influence of alcohol. Butler used “decoys” to entice the sting targets to bars in downtown Danville, where Tanabe was assigned to patrol, and encourage them to drink.
For one sting, Tanabe joined Butler in a bar while off-duty, watching two attractive young women working for Butler drink with a sting target. Evidence showed that, in exchange for a promise of cocaine, Tanabe notified an on-duty Deputy that the sting target was about to drive away, having been lured by the prospect of a hot tub with the two women. For two other stings, the evidence showed that Tanabe, then on-duty, waited outside the Vine Bar in Danville and then arrested the targets in exchange for a Glock handgun.
“This conviction confirms that Stephen Tanabe did not serve his community with honor or integrity, but instead set up unsuspecting citizens and abused the public trust,” said United States Attorney, Melinda Haag. “Law enforcement officers are hard-working, honorable men and women who work selflessly every day to keep us safe. Stephen Tanabe is the exception, and he does not deserve the badge he was wearing.”
The maximum statutory penalties for honest services wire fraud under 18 U.S.C. §§ 1343 and 1346, conspiracy to commit same under 18 U.S.C. § 1349, and extortion under color of official right under 18 U.S.C. § 1951, are 20 years imprisonment; $250,000 fine; and five years of supervised release. However, any sentence following this conviction 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.
Butler entered into a cooperation plea agreement with the government on May 7, 2012, and was sentenced on September 25, 2012, to 96 months in prison.
Tanabe, 50, was originally indicted on December 15, 2011. The Superseding Information on which he was tried filed June 12, 2013. Sentencing is scheduled for December 11, 2013, at 10:00 a.m., before U.S. District Judge Charles R. Breyer.
The U.S. Attorney specifically thanks Contra Costa County District Attorney Mark Peterson for his invaluable assistance and leadership into the investigation and prosecution of this case. The District Attorney and his office are vital partners in the federal efforts to address public safety in Contra Costa County.
Hartley M. K. West and Philip J. Kearney are the Assistant U.S. Attorneys who prosecuted the case with the assistance of Alycee Lane, Rosario Calderon, and Harriet Marmah. The prosecution is the result of a lengthy investigation by the Federal Bureau of Investigation and the California Department of Justice.
Michigan Resident Convicted of Obstructing SEC InvestigationRead the Press Release
SAN FRANCISCO – A federal jury convicted Karim Iskander Bayyouk today of obstruction of justice, United States Attorney Melinda Haag announced.
The jury found that on or about May 31, 2007, Bayyouk obstructed and impeded an investigation by the Securities and Exchange Commission (“SEC”) into securities fraud and insider trading relating to Biosite Incorporated securities. The guilty verdict followed a five-day jury trial before the Honorable Edward M. Chen, U.S. District Court Judge.
The indictment stems from an 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.
Evidence at trial showed that on or about March 23, 2007, Bayyouk purchased approximately $100,000 in Biosite call options. Two days later, on March 25, 2007, Biosite announced it was merging with another company. After the merger announcement, Bayyouk sold the options and realized a profit of approximately $947,922. On or about May 31, 2007, attorneys from the SEC’s Division of Enforcement in San Francisco, Calif., conducted a telephone interview of Bayyouk as part of an insider trading investigation. During the interview, Bayyouk falsely stated, among other things, that he did not speak to anyone before investing in Biosite, that no one suggested Biosite to him, and that he did not suggest Biosite to his brother, who also traded Biosite call options on March 23, 2007. Evidence showed that the defendant traded in Biosite based on a tip from an individual who was tipped by Michael Kara, who had received inside information from his brother, Maher Kara.
“Fairness is fundamental to our financial markets and critical to everyday investors,” said U.S. Attorney Melinda Haag. “Karim Bayyouk benefited from an insider trading scheme and made approximately $1 million based on information only available to a select few insiders. This verdict should send a strong message to those who might be tempted to obstruct efforts to insure a level playing field for all investors.”
Bayyouk, 49 of Livonia, Michigan, was indicted by a federal grand jury on May 29, 2012. He was charged with one count of obstructing proceedings before the SEC, in violation of 18 U.S.C. § 1505. Bayyouk is currently released on bond.
Bayyouk’s sentencing hearing is scheduled for January 15, 2014, at 2:30 p.m. before Judge Chen in San Francisco. The maximum statutory penalty for a violation of 18 U.S.C. § 1505 is five years in prison and a fine of $250,000. Maher and Michael Kara each pleaded guilty in July 2011 to one count of conspiracy, in violation of 18 U.S.C. § 371, and one count of securities fraud, in violation of 15 U.S.C. §§ 78j(b) and 78ff. They are awaiting sentencing. Any sentence ordered in these cases 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.
Adam A. Reeves and Robert S. Leach 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 Federal Bureau of Investigation with substantial assistance from the Division of Enforcement of the SEC’s San Francisco Regional Office.
Lookout in Armed Bank Robbery IndictedRead the Press Release
OAKLAND – Yesterday, a federal grand jury in San Francisco returned an indictment charging Kevin Tyrone Buford with one count of aiding and abetting armed bank robbery, announced United States Attorney Melinda Haag.
The Indictment alleges that on March 1, 2013, Kevin Tyrone Buford, 27, of Vallejo, Calif., participated in the armed robbery of the Mechanics Bank on Pinole Valley Boulevard.
Buford was arrested on August 19, 2013, and made his initial appearance in federal court in Oakland on August 20, 2013. Buford is currently in custody. His next scheduled appearance is on September 26, 2013, at 9:30 a.m. before The Honorable Jeffrey S. White, U.S. District Judge.
The maximum statutory penalty for armed bank robbery, in violation of 18 U.S.C. § 2113(a) and (d), is 25 years in prison. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
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 FBI and the Pinole Police Department.
Please note, an indictment contains only allegations against an individual and, as with all defendants, Buford must be presumed innocent unless and until proven guilty.
Former Campbell Businessman Pleads Guilty to Tax EvasionRead the Press Release
SAN JOSE – Stephen Joseph Heuer pleaded guilty in federal court in San Jose today to tax evasion, United States Attorney Melinda Haag announced.
According to the plea agreement, Heuer, 52, of Greer, South Carolina, owned and operated Cocoon Nutrition, a company located in Cupertino and Campbell, Calif. Heuer admitted that between January 2002 and April 2005, he attempted to avoid paying taxes on income he received through the operation of Cocoon Nutrition. Heuer admitted that, as a part of his scheme, he established a corporation in the state of Washington in the name of Alchemy Ministries to conceal income he derived from Cocoon Nutrition. He claimed Cocoon Nutrition was being run by Alchemy Ministries, and that Alchemy Ministries was a tax-exempt religious organization. Under the appearance of being a religious organization, Heuer’s claim had the effect of making Cocoon Nutrition exempt from federal, state, and local tax laws.
Heuer admitted that he willfully failed to report $381,182 of taxable income, which resulted in $136,552 of additional tax due, and pleaded guilty to one count of tax evasion.
Heuer’s sentencing hearing is scheduled for December 9, 2013, at 1:30 p.m. before The Honorable Edward J. Judge Davila, U.S. District Judge, in San Jose. The maximum statutory penalty for one count of attempting to evade taxes, in violation of 26 U.S.C. § 7201, is five years and a fine of $250,000, plus restitution. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Jeff Nedrow is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Susan Kreider. The prosecution is the result of a two-year investigation by the Internal Revenue Service, Criminal Investigation, and the Food and Drug Administration, Office of Criminal Investigations.
United States Settles False Claims Act Allegations Against Billing ManagerRead the Press Release
SAN FRANCISCO – A billing manager, her billing company, and her son have agreed to pay $1.7 million to settle allegations that they violated the civil False Claims Act in connection with claims submitted to the Department of Labor, Office of Workers’ Compensation Programs (DOL-OWCP), United States Attorney Melinda Haag announced.
The settlement resolves a whistleblower lawsuit filed in the United States District Court for the Northern District of California. In July 2012, the United States settled with six other defendants for $3.15 million -- Advanced Physical Medicine & Rehab Group Inc. (located in Oakland, Calif. and Rhonert Park, Calif.), Advanced Occupational Rehabilitation, Inc. (located in Oklahoma), Advanced Medicine and Rehabilitation of Texas, Inc. (located in Texas), Advanced Medicine and Rehabilitation of Texas, P.A. (located in Texas), and the two physicians located in Oakland who own these clinics. The remaining three defendants – Farideh Heidarpour, her billing company A.B.C. Billing Inc., and her son Ali Heidarpour (who was also her employee) – will pay an additional $1.7 million.
The United States alleges that, from 2005 through 2008, Heidarpour, her company, and her son submitted or caused to be submitted to DOL-OWCP false claims by the clinics for supplies and services not provided, not supported by medical documentation and/or not medically necessary, resulting in millions of dollars of damages to the United States. The majority of the patients at issue were United States Postal Service (USPS) employees claiming work-related injuries.
“This settlement demonstrates this office’s continued commitment to protecting the federal health care programs from fraud and false claims,” U.S. Attorney Haag, said.
A physician who formerly worked at the clinic in Texas filed the case pursuant to the qui tam provisions of the False Claims Act. Under those provisions, private citizens, called “relators,” may file lawsuits on behalf of the United States and receive a portion of the proceeds of a settlement or judgment. The relator will receive $323,000 as her share of the government’s recovery from the three defendants. This is in addition to the relator’s share of $598,000 from the earlier settling defendants.
Assistant U.S. Attorneys Sara Winslow and Melanie Proctor handled the matter on behalf of the U.S. Attorney’s Office for the Northern District of California, with assistance from Financial Fraud Investigator Michael Zehr and Legal Assistants Yvette Baird and Kathy Terry. The matter was investigated by DOL-OWCP and the USPS Office of Inspector General.
(Settlement Agreement Heidarpour Executed )
(Settlement Agreement Heidarpour Exhibits )
Former Los Gatos Convent Employee Sentenced to 14 Months Imprisonment for EmbezzlementRead the Press Release
SAN JOSE, Calif. – A former employee for the Sisters of the Holy Names of Jesus and Mary Catholic Convent in Los Gatos, Calif., was sentenced yesterday to 14 months in prison and ordered to pay $110,000 in restitution for embezzling from the Convent, United States Attorney Melinda Haag announced.
Linda Gomez (a/k/a Linda Surrett), 67, formerly of Sunnyvale, Calif. and currently of Chandler, Ariz., pleaded guilty on October 25, 2012. In pleading guilty, Gomez admitted that she used her administrative positions to embezzle cash and to charge personal expenses to a Convent charge card. According to the indictment and evidence presented at sentencing, between 1987 and 2010, Gomez worked for the Convent in various administrative capacities, including as the director of food services and the manager of an on-site convenience store. As part of her professional responsibilities, Gomez made purchases for the 75 Catholic nuns and 60 lay employees at the Convent.
Between March 2008 and her resignation in May 2010, Gomez used various methods to embezzle from the Convent, including obtaining fraudulent reimbursements or credits for products she falsely claimed she had purchased for the Convent and its nuns. In addition to embezzling more than $47,000 in cash, Gomez also diverted more than $53,000 of Convent funds for personal expenses such as jewelry, high-end cutlery, purses, shoes, kitchen appliances and numerous purchases on the QVC and Home Shopping Networks.
Gomez was charged by Indictment filed on Dec. 22, 2011. The Indictment, alleged 14 counts of wire fraud, in violation of 18 U.S.C. Section 1343, and 3 counts of mail fraud, in violation of 18 U.S.C. Section 1341. Gomez pleaded guilty, with no plea agreement, to all 17 counts in the indictment.
The sentence was handed down by U.S. District Court Judge D. Lowell Jensen. In imposing sentence, Judge Jensen found that the defendant had abused a private position of trust to facilitate her offense and had also made misrepresentations regarding acting on behalf of a religious organization. The defendant was also sentenced to a 3-year period of supervised release with conditions that limit her ability to hold fiduciary roles, and also ordered to pay over $110,000 in restitution. At the sentencing hearing, Judge Jensen ordered Gomez to self-surrender by December 4, 2013, to begin serving her prison sentence.
Assistant U.S. Attorney Joseph Fazioli is prosecuting the case with the assistance of Laurie Worthen. The prosecution is the result of an investigation by the Federal Bureau of Investigation.
Santa Rosa Man Sentenced to 64 Months for Ponzi SchemeRead the Press Release
SAN FRANCISCO - Douglas Hollingsworth was sentenced yesterday to 64 months in prison and ordered to pay $4.9 million in restitution for defrauding numerous individuals in connection with an approximately five-year long Ponzi scheme, United States Attorney Melinda Haag announced.
Hollingsworth, 64, of Santa Rosa, Calif., pleaded guilty on February 13, 2013, to wire fraud and money laundering. According to the plea agreement, from approximately June 2007 through October 2012, Hollingsworth solicited money from numerous individuals by falsely representing that his business entities, Baytree Investors, Inc. and Capsule Partners, LLC, had developed a sophisticated computer system that permitted him to identify financial market trends and generate substantial profits from trading activity. In soliciting money from the victims, Hollingsworth falsely stated that if they loaned him money, he could pay them significant monthly interest payments from the profits earned from successful trading activity.
As part of the fraud scheme, Hollingsworth took money from some of the victims after he intentionally failed to tell them that the Federal Bureau of Investigation had searched his residence in July 2010 and that he had been charged with wire fraud in August 2011. In addition, Hollingsworth did not use the money received from the victims to engage in trading, but instead spent the money on personal expenses, including jewelry, and to make monthly interest payments to other individuals who had provided him with money.
Hollingsworth was originally indicted by a federal Grand Jury on August 16, 2011. On August 28, 2012, and December 18, 2012, the grand jury returned superseding indictments. In the Second Superseding Indictment, Hollingsworth was charged with 2 counts of mail fraud, in violation of 18 U.S.C. Section 1341; 21 counts of wire fraud, in violation of 18 U.S.C. Section 1343; and 4 counts of money laundering, in violation of 18 U.S.C. Section 1957. Under the plea agreement, Hollingsworth pleaded guilty to one count of wire fraud and one count of money laundering.
The sentence was handed down by The Honorable Charles R. Breyer, U.S. District Court Judge. Judge Breyer also sentenced the defendant to a 3-year period of supervised release with conditions that limit his ability to hold fiduciary roles and to receive or manage money of third parties, and ordered forfeiture of approximately $80,000 that was in bank accounts seized in July 2010 during the course of the investigation.
At the sentencing hearing, Judge Breyer ordered Hollingsworth to surrender immediately to begin serving his prison sentence. Hollingsworth is now in custody.
Denise Marie Barton is the Assistant United States Attorney who is prosecuting the case with the assistance of Denise Oki, Rayneisha Booth, Elizabeth Garcia and Assistant United States Attorney Patricia Kenney. The prosecution is the result of an investigation by the Federal Bureau of Investigation.
Getaway Driver Sentenced to 5 Years in Prison for Aiding and Abetting Armed Bank RobberyRead the Press Release
OAKLAND – Regina Lynn Dean was sentenced yesterday to 5 years in prison for aiding and abetting armed bank robbery, United States Attorney Melinda Haag announced.
Dean, who had no plea agreement with the government, pleaded guilty on May 15, 2013. During the plea hearing, Dean admitted that she was the getaway driver for her co-defendant Gary Casdell Fite, II, who robbed at gunpoint the Mechanics Bank branch on Pinole Valley Boulevard in Pinole, Calif., on March 1, 2013, taking more than $3,000.
Dean, 37, of Antioch, was indicted by a federal grand jury on March 28, 2013, and was ordered to surrender into federal custody immediately after her sentencing. The sentence was handed down by U.S. District Court Judge Phyllis J. Hamilton. In addition to her prison term, Dean was also sentenced to a 3-year period of supervised release.
Co-defendant Fite, 23, of Oakland, pleaded guilty pursuant to a plea agreement on June 19, 2013, and is scheduled to be sentenced on September 4, 2013.
Brian C. Lewis is the Assistant U.S. Attorney who is prosecuting the case with the assistance Legal Assistant Janice Pagsanjan. The prosecution is the result of an investigation by the FBI.
French Citizen Sentenced to 108 Months for Transporting Child PornographyRead the Press Release
SAN FRANCISCO – Nicolas Perret was sentenced yesterday to nine years in prison for transporting child pornography, announced United States Attorney Melinda Haag.
Perret, 43, of Saint Laurent Du-Pape, France, was indicted by a federal grand jury on May 17, 2012. He was charged with four counts of sexual exploitation of children and transportation of child pornography.
Perret pleaded guilty on May 7, 2013, to a violation of 18 U.S.C. § 2252(a)(1), transportation of child pornography. According to the plea agreement, Perret admitted to possessing recordings of live video chats he had conducted with three minors whom he had convinced to engage in sexually explicit conduct after developing lengthy online relationships with the victims posing as a 15 year old boy.
The U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI) attaché in Ottawa, Canada, was alerted to Perret’s activities by Canadian authorities, who had been investigating Perret in connection with a trip Perret took to Ontario, Canada, to meet an underage girl with whom he had developed an online relationship posing as a teenage boy.
According to a court document filed by the government related to this sentencing, Perret lured young girls, barely in their teens, into performing sex acts on a video camera. Over 100 videos, featuring suspected underage girls on webcams in sexually exploitative situations, were recovered on the Perret’s laptop. The government’s sentencing memorandum further indicates that Perret established contact and engaged in communication with his victims through popular social media and video chat websites. Perret, according to the government, also invaded his victims’ bedrooms with texts and phone calls, imploring them to undress and perform sexual acts, all while hiding behind a fictitious teenager identity he knew they had grown to trust.
"As this case vividly illustrates, the advent of the Internet means youth are now vulnerable to exploitation by sexual predators not just around the corner, but around the globe," said Clark Settles, Special Agent in Charge for HSI San Francisco. "This new reality means that as parents and as law enforcement, we must be mindful of the risks facing children when they go online and use every tool at our disposal to keep them safe."
The sentence was handed down by The Honorable William H. Alsup, U.S. District Court Judge, following a guilty plea on one count in violation of 18 U.S.C. § 2252(a)(1). Judge Alsup also sentenced the defendant to a 5-year period of supervised release, and Perret is required to register as a sex offender. In addition, Perret was ordered to pay over $28,000 to the family of one of his victims to compensate them for the costs of psychological treatment incurred as a result of the offense. Perret has been in custody since his arrest in March of 2012.
Carolyn Silane is the Special Assistant U.S. Attorney who is prosecuting the case with the assistance of Bridget Kilkenny. The prosecution is the result of a year-long investigation by ICE HSI.
East Bay Residents Charged in Tax Fraud SchemeRead the Press Release
OAKLAND – Jessika Green, Khyber Law, and Starkisha Benson were charged in a 22 count indictment on August 20, 2013, with wire fraud, conspiracy to file false claims, filing false claims, effecting fraudulent transactions with an access device, theft of public money, 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 indictment, Green, Law, and Benson, of Oakley, Antioch, and Berkeley, Calif., respectively, filed or helped others file false claims with the IRS requesting refunds in the names of other people. As part of the scheme, the defendants and their co-conspirators allegedly procured the names and identities of individuals through illegal means or by agreement with participants in the scheme. The filed returns claimed falsely wages and withholdings. The defendants also requested that the IRS transmit the fraudulent refunds into accounts linked to debit cards. These debit cards were used to access the proceeds derived from the conspiracy.
The maximum statutory penalty for each count of wire fraud, in violation of 18 U.S.C § 1343, is twenty years in prison and a fine of $250,000. The maximum statutory penalty for each count of conspiracy to file false claim, in violation of 18 U.S.C § 286, is ten years in prison and a fine of $250,000. The maximum statutory penalty for each count of filing false claims, in violation of 18 U.S.C § 287, is five years in prison and a fine of $250,000. The maximum statutory penalty for each count of effecting fraudulent transactions with access device, in violation of 18 U.S.C § 1029(a)(5), is fifteen years in prison and a fine of $250,000. The maximum penalty for theft of public money, in violation of 18 U.S.C § 641, is ten years in prison, consecutive to the underlying felony and a fine of $250,000. The maximum penalty for aggravated identity theft, in violation of 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 only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Thomas Newman is prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
New York Woman Pleads Guilty to Bankruptcy FraudRead the Press Release
SAN FRANCISCO – Patricia Bonavito pleaded guilty yesterday in federal court in San Francisco to giving false statements in a bankruptcy proceeding, United States Attorney Melinda Haag announced.
In pleading guilty, Bonavito admitted to making numerous false statements, under the penalty of perjury, in furtherance of a bankruptcy petition through which she sought relief of $308,249 in debts. She admitted to knowingly making these false statements concerning matters material to the determination of whether the Bankruptcy Court should forgive her debt. The false statements included the following: she 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; and she 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 just 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). Under the plea agreement, Bonavito pleaded guilty to four counts of false statements in bankruptcy proceedings.
Bonavito’s sentencing hearing is scheduled for November 12, 2013, 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 false statements in bankruptcy proceedings, in violation of 18 U.S.C. § 152(3), is 5 years in prison and a fine of $250,000. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Hallie Hoffman is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Elizabeth Garcia. The prosecution is the result of a 20-month investigation by the Federal Bureau of Investigation with substantial assistance from the United States Bankruptcy Trustee.
San Jose CPA Convicted of Tax FraudRead the Press Release
SAN JOSE, Calif. – On August 16, 2013, a federal jury convicted Steven Frank Boitano with filing false tax returns, announced United States Attorney Melinda Haag and Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division.
According to evidence presented at trial, beginning in 2004, Boitano, a Certified Public Accountant and partner with the accounting firm of Boitano, Sargent & Lily, was responsible for preparing the tax returns for his firm. As a part of these responsibilities, Boitano prepared Schedules K-1, which detailed each partner’s share of the firm’s income, in addition to his tax return preparation duties and other accounting related responsibilities for his clients. Boitano’s gross income for the years 2001 through 2007 was at least $275,000 for each year.
Between the years 1991 and 2007, Boitano failed to timely file his individual federal income tax returns. Instead, for each of these years, he submitted a request for an extension of time to file his tax returns from April until August or October, including a payment with the extension requests. Thereafter, as the extended due dates for each year passed, Boitano failed to file his individual income tax returns.
Boitano was audited by the IRS at least twice between 1991 and 2007. In 1995, the IRS prepared Substitutes for Returns and made tax assessments on Boitano’s behalf for 1991, 1992 and 1993. Despite the contact with the IRS, Boitano continued to fail to file personal income tax returns. In 2005, the IRS again prepared a Substitute for Return and tax assessment on Boitano’s behalf for 2004. In June of 2009, the case was assigned to an IRS Revenue Agent. The Revenue Agent met with Boitano three times. During the third meeting, Boitano provided the Revenue Agent with signed married filing-jointly federal income tax returns [Forms 1040] for 2001, 2002, and 2003. On each of these returns, Boitano falsely and fraudulently reported making estimated tax payments of $26,000, $38,000, and $57,000, respectively. As a result of these fabricated estimated tax payments, each return claimed a refund to which Boitano was not entitled.
On the first day of trial, Boitano pleaded guilty in open court to Counts Four, Five and Six of the Indictment, charging him with failing to file federal income tax returns for 2005, 2006 and 2007. The Jury convicted him of counts One, Two, and Three of the Indictment, charging him with filing false tax returns for 2001, 2002 and 2003.
Boitano, 58, of San Jose, was indicted on August 25, 2011.
The maximum statutory penalty for each count of filing a false tax return, in violation of Title 26, U.S.C § 7206(1), is three years in prison and a fine of $250,000. The maximum statutory penalty for each count of failure to file a 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 this conviction will be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant United States Attorney Michael G. Pitman and Trial Attorney Charles O’Reilly of the Justice Department Tax Division are prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
Pleasant Hill Man Sentenced to 15 Years for Distribution of Child PornographyRead the Press Release
OAKLAND – Laurence Pullen was sentenced today to 15 years in prison for distribution of child pornography, announced United States Attorney Melinda Haag.
Pullen, 60, of Pleasant Hill, was indicted by a federal grand jury on November 29, 2012. He pleaded guilty on April 22, 2013. According to the plea agreement, Pullen admitted to distributing over the Internet videos of minors engaged in sexually explicit conduct with adults.
The sentence was handed down by U.S. District Court Judge Claudia Wilken following a guilty plea on Count One of the Indictment in violation of 18 U.S.C. § 2252(a)(2). Judge Wilken also sentenced the defendant to a ten year period of supervised release and ordered him to register as a sex offender and to participate in a sex offender treatment program.
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 Homeland Security Investigations.
Texas Businessman Admits to Stealing Millions from InvestorsRead the Press Release
SAN JOSE – Keven Chen Chieh Yang pleaded guilty in federal court in San Jose yesterday to defrauding millions from investors of his West Texas cotton businesses, United States Attorney Melinda Haag announced.
In pleading guilty, Yang admitted to making false, material statements causing several people to invest more than $5,000,000 in “cotton recycling businesses” located in the Lubbock, Texas area. Yang’s companies included WestCal, Triangle SuperGin, and OK Sourcing, among others. The investors resided in California, North Carolina, and China, among other places. Yang promised to invest the money in the businesses. Rather than doing so, however, Yang spent millions at casinos and diverted funds to offshore accounts.
Yang, 42, a citizen of Taiwan, Republic of China, and a former resident of Roland Heights, California, was indicted by a federal Grand Jury on July 13, 2011. He was charged with seven counts of wire fraud, in violation of 18 U.S.C. § 1343. Under the plea agreement, Yang pleaded guilty to three counts of wire fraud. Yang is currently in custody in San Jose.
Yang’s sentencing hearing is scheduled for November 12, 2013, before The Honorable Ronald M. Whyte, U.S. District Court Judge, in San Jose. The maximum statutory penalty for each count in violation of 18 U.S.C. § 1343, is 20 years imprisonment. Yang also agrees to pay restitution to the victims in an amount not less than $3,444,000, as determined by the Court. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Daniel Kaleba and Special Assistant U.S. Attorney Edward Fluet are prosecuting the case with the assistance of Nina Burney and Lakisha Holliman. The prosecution is the result of an investigation by the Federal Bureau of Investigation.
East Bay Trio Charged in Identity Theft SchemeRead the Press Release
OAKLAND – East Bay residents Sean Lucas Cowgill, Juanco Tango Andres, and Guadalupe Nieves, Jr., made their initial appearance on August 9, 2013, in federal court on charges of wire 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 indictment, unsealed on August 9, 2013, from about May 27, 2011 to February 24, 2012, Sean Lucas Cowgill allegedly carried out a scheme to obtain money by filing false tax returns claiming refund payments. In order to carry out the scheme, Cowgill created an identification form (“ID-Doc”) which included questions requiring personal information, such as name, income, birthday, Social Security number, number of dependents, expenses, and type of work.
Cowgill trained and used recruiters to convince people to complete the ID-Doc form in order to determine if they were eligible for a stimulus program sponsored by President Obama. Cowgill used the completed ID-Doc forms to prepare and electronically file false federal individual income tax returns, claiming fraudulent tax credits and refunds. Cowgill directed the refunds to be paid in a manner that enabled him to exercise control over the refunds. Cowgill paid recruiters $50 to $100 for each completed ID-Doc form that resulted in a tax refund.
According to the indictment, from about September 17, 2011 to about February 24, 2012, Cowgill taught Juanco Tango Andres and Guadalupe Nieves, Jr. to use information from ID-Doc forms to prepare false federal income tax returns claiming tax credits and refunds. Andres and Nieves allegedly followed Cowgill’s scheme, training and using recruiters to convince people to complete the ID-Doc form. Andres and Nieves paid Cowgill a $50 “franchise fee” for each tax refund.
All three defendants were indicted on July 23, 2013. Cowgill was charged with 13 counts of wire fraud and three counts of aggravated identity theft. Andres was charged with 10 counts of wire fraud and eight counts of aggravated identity theft. Nieves was charged with 10 counts of wire fraud and one count of aggravated identity theft.
The maximum statutory penalty for each count of wire fraud, in violation of Title 18, U.S.C § 1343, 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 two years in prison, consecutive to the underlying felony and a fine of $250,000.
Thomas Moore is the Assistant U.S. Attorney who is prosecuting this case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
(Cowgill indictment )
Vice President of Motorcycle Gang Sentenced to Six Years in Prison for Firearms OffenseRead the Press Release
SAN FRANCISCO – Michael Warren of Santa Rosa was sentenced yesterday to six years in prison, United States Attorney Melinda Haag announced. According to information presented in court, Warren was the Vice President of the Barbarian Brotherhood gang, also known as BBH, a gang operating in Santa Rosa.
Warren, 39, of California, was indicted by a federal grand jury on July 10, 2012. He was charged in the Indictment with one count of being a felon in possession of a firearm, in violation of Title 18, United States Code, Section 922(g). Warren pleaded guilty to the offense on December 14, 2012.
The sentence was handed down by the Honorable Jeffrey S. White, U.S. District Court Judge. Judge White also sentenced the Warren to a three-year period of supervised release, the terms of which prohibit him from associating with other members of the Barbarian Brotherhood gang. Warren will begin serving his sentence on September 23, 2013.
Randy Luskey is the Assistant U.S. Attorney who prosecuted the case with the assistance of Daniel Charlier-Smith. The prosecution is the result of a joint investigation by the Federal Bureau of Investigation and the Santa Rosa Police Department.
Former Bay Area Resident Agrees to Repay $180,452 as Restitution for Conspiracy and Filing a False Claim for Tax RefundsRead the Press Release
SAN FRANCISCO – Cyrinthia Gary, aka Cyrinthia Adams, pleaded guilty yesterday to conspiring to file false tax returns, announced United States Attorney Melinda Haag and IRS-CI Special Agent in Charge José M. Martinez.
According to the plea agreement, beginning in June 2008, Gary, 41, of Sacramento, helped several people obtain tax refunds based on false tax returns that were filed with the IRS. As part of the scheme, Gary recruited others to provide their personal identifying information for use on the false tax returns. Gary knew the returns were false because the person whose name appeared on the tax returns did not supply the information used to support the refund. Furthermore, Gary used bank accounts of others whom she recruited for this purpose. When the fraudulent tax refunds were issued, the money would be withdrawn by the account holder and they would split the proceeds.
Gary also pleaded guilty to filing a false 2007 tax return in her own name on August 7, 2008. Gary admitted the tax return was false because it indicated that she received Social Security benefits in an amount that she knew was inflated. The return also stated that she had Form 1099 withholdings, which was not true.
As part of her plea agreement, Gary agreed to pay restitution in the amount of $180,452. The plea agreement further provides that Gary cannot prepare a tax return for anyone other than herself, and bars her from possessing other individuals’ identifying information without lawful authorization.
Gary, who was indicted on July 12, 2012, and was charged one count of conspiracy to file false claims and one count of filing a false claim, is scheduled for sentencing on November 20, 2013. She pleaded guilty to both counts in the indictment.
The maximum statutory penalty for each count of conspiracy to file false claim, in violation of Title 18, U.S.C § 286, is ten years in prison and a fine of $250,000. The maximum statutory penalty for each count of filing a false claim, in violation of Title 18, U.S.C § 287, is five years in prison and a fine of $250,000. However, any sentence will be imposed by the court only after consideration of the U.S. sentencing guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Thomas Newman is the Assistant U.S. Attorney who is prosecuting this case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
San Francisco Investment Adviser Sentenced to 56 Months for Fraud SchemeRead the Press Release
SAN FRANCISCO - Hausmann-Alain Banet (a/k/a Anzoumana Ousmann Gbane, a/k/a Gbane Anzoumana a/k/a Ousmann Gbane, a/k/a Ousmann Gbane Anzounan Banet, a/k/a Ousmann-Alain Gbane) of San Francisco, California, was sentenced yesterday to 56 months in prison and ordered to pay $1.2 million in restitution for defrauding former investment clients, United States Attorney Melinda Haag announced.
Banet pleaded guilty on May 21, 2013, to wire fraud and mail fraud. According to the Plea Agreement, from approximately June 2008 through July 2012 Banet induced numerous individuals to give him money by falsely representing that he, on behalf of his investment management company, Lion Capital Management Group, LLC, would invest the money in hedge funds. Instead, Banet spent the money for personal and business expenses, all unrelated to investment income. As part of his scheme, Banet sent quarterly investment account statements to victims in which he falsely stated that the funds had been invested and that the accounts had realized gains. At sentencing, the Court also found that Banet had attempted to obstruct a related civil investigation by making false statements to the Securities and Exchange Commission.
Banet, 50, was originally indicted by a federal grand jury on October 2, 2012. He was charged with six counts of wire fraud, eleven counts of mail fraud, and six counts of money laundering. Under the Plea Agreement, Banet pleaded guilty to two counts of wire fraud and two counts of mail fraud. Banet has been in custody since approximately January 3, 2013.
The sentence was handed down by The Honorable William H. Alsup, U.S. District Court Judge. Judge Alsup also sentenced the defendant to a 3 year period of supervised release and ordered forfeiture of Banet’s interest in his San Francisco condominium, bank and trading accounts totaling approximately $78,000, and his Mercedes Benz.
Denise Marie Barton is the Assistant United States Attorney who is prosecuting the case with the assistance of Allen Williams, Pat Mahoney, and Elizabeth Garcia. The prosecution is the result of an approximately five month investigation by the Federal Bureau of Investigation, with the assistance of the San Francisco Office of the Securities and Exchange Commission and Immigration and Customs Enforcement.
Milpitas Man Pleads Guilty to Illegal SF Bay Shark Sale SchemeRead the Press Release
SAN FRANCISCO - Dean Trinh pleaded guilty in federal court in San Francisco today to Conspiracy, Lacey Act violations, and Wire Fraud, for his involvement in the illegal capture and sale of California leopard sharks and nurse sharks, United States Attorney Melinda Haag announced.
In pleading guilty, Mr. Trinh admitted to taking undersized California leopard sharks from the San Francisco Bay and selling them to customers in Canada and Florida, through his business, AquatopUSA LLC, High Tech Auctions and Hightechauction.com. Trinh also admitted that he conspired to transport, sell, receive, acquire, and purchase illegally collected nurse shark pups over the internet, knowing that they were taken, possessed, transported, sold, and intended to be sold in violation of the laws and regulations of the State of Florida.
Trinh, 43, of Milpitas, California, was indicted by a federal Grand Jury on May 23, 2013, in the Northern District of California, with three counts of violating the Lacey Act, in violation of 16 U.S.C. § 3372(a)(2)(A) and § 3372(a)(4), and nine counts of Wire Fraud, in violation of 18 U.S.C. § 1343. On November 1, 2012, in the Southern District of Florida, Trinh was charged with one count of Conspiracy in violation of 18 U.S.C. § 371. Under the plea agreement, Mr. Trinh pled guilty to all counts in both cases.
The sentencing of Mr. Trinh is scheduled for November 12, 2013, before The Honorable Richard Seeborg, United States District Court, Judge in San Francisco. The maximum statutory penalty for each count in violation of the Lacey Act, 16 U.S.C. §§ 3372(a)(2)(A), 3372(a)(4), is 5 years imprisonment, 3 years supervised release, a fine of $250,000, plus restitution; for each count of Wire Fraud, 18 U.S.C. § 1343, the maximum penalty is 20 years imprisonment, three years supervised release, a $250,000 fine, plus restitution. The statutory maximum penalty for Conspiracy in violation of 18 U.S.C. § 371 is 5 years imprisonment, 3 years supervised release, a $250,000 fine, 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.
Maureen Bessette and Thomas Watts-FitzGerald (from the U.S. Attorney’s Office for the Southern District of Florida) are the Assistant U.S. Attorneys prosecuting the case with the assistance of supervisory legal technician Kathleen Turner. The prosecution is the result of a three year investigation by the U.S. Fish & Wildlife Service.
Oakland Man Indicted for Robbing Five Banks and Attempting to Rob Two Banks in the East BayRead the Press Release
OAKLAND, Calif. - A federal grand jury in Oakland indicted Amanuel Moreno today with five counts of bank robbery and two counts of attempted bank robbery, announced United States Attorney Melinda Haag.
The superseding indictment alleges that Moreno, 20, of Oakland, robbed or attempted to rob the following banks:
Date Bank Location Amount Stolen 6/29/2012 Bank of the West 24299 Southland Drive, Hayward $25 12/6/2012 Bank of the West 4900 Telegraph Avenue, Oakland $506 12/6/2012 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 1/16/2013 Bank of the West 4900 Telegraph Avenue, Oakland $3,321Moreno was arrested on January 25, 2013, by local law enforcement and remained in local custody pursuant to a probation violation. He was originally charged by criminal complaint on a single count of bank robbery on February 22, 2013, and he was indicted on that same count on July 11, 2013. Moreno made his initial appearance in federal court in Oakland on July 5, 2013, and he is currently in federal custody. His next scheduled appearance is at 2:00 p.m. on September 5, 2013, for a status hearing before U.S. District Judge Yvonne Gonzalez Rogers.
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 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.
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.
Please note, an indictment contains only allegations against an individual and, as with all defendants, Moreno must be presumed innocent unless and until proven guilty.
(Moreno Complaint )
(Moreno Superseding Indictment )
(Moreno Indictment )
Former Immigration Consultant Convicted of Encouraging Illegal Immigration and Mail FraudRead the Press Release
SAN JOSE - Evelyn Sineneng-Smith was convicted of three counts of encouraging or inducing illegal immigration for private financial gain and three counts of mail fraud by a federal jury on Tuesday, July 30th, announced United States Attorney Melinda Haag. The guilty verdict followed a 13-day jury trial before The Honorable Ronald M. Whyte, U.S. District Court Judge.
Evidence at trial showed that Sineneng-Smith operated an immigration consultation business in San Jose, Calif., from 1990 to 2008. She advised foreign nationals, mainly Filipino citizens who came to the United States on visitors’ visas, to apply for a labor certification from the United States Department of Labor as path towards obtaining lawful permanent residence. She charged her victims $5,900 to file such applications all the while knowing that the law had changed, and that her clients did not qualify under existing immigration regulations to obtain lawful permanent residence. According to the testimony of several victims, Sineneng-Smith failed to inform them that they were ineligible to obtain permanent residence. In addition, Sineneng-Smith encouraged victims to overstay the time allowed under their tourist visas and work illegally in residential healthcare facilities.
Evidence at trial showed that Sineneng-Smith deposited over $3.3 million dollars in payments from clients from August 2004 through 2007.
"Those who corrupt the integrity of our nation's legal immigration system must understand there are serious consequences for those actions," said Joseph Vincent, Assistant Special Agent in Charge of Homeland Security Investigations, San Jose. "We will continue to work with our counterparts to investigate those who manipulate and exploit that system for their own personal financial gain."
Sineneng-Smith, 66, of San Jose, Calif., was indicted by a federal grand jury on July 14, 2010. She was charged with three counts of encouraging and inducing illegal immigration for private financial gain, in violation of 8 U.S.C. §§ 1324(a)(1)(A)(iv) and (B)(I), and three counts of mail fraud, in violation of 18 U.S.C. § 1341.
The sentencing of Sineneng-Smith will be scheduled on November 4, 2013, after the court considers post-trial motions. The maximum statutory penalty for each count of encouraging and inducing illegal immigration for private financial gain, in violation of 8 U.S.C. §§ 1324(a)(1)(A)(iv) and (B)(I), is 10 years imprisonment 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 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.
Susan Knight and Philip Guentert are the Assistant U.S. Attorneys who prosecuted the case with the assistance of Tracey Andersen and Nina Burney. The prosecution is the result of a three-year investigation by the Department of Homeland Security, Immigration and Customs Enforcement, United States Citizenship and Immigration Services, the United States Department of Labor, Internal Revenue Service - Criminal Investigation, and the United States Postal Inspection Service.
(Sineneng-Smith superseding indictment)
Convicted Bank Robber Sentenced to over 15 years in Prison for Robbing Bank of America in PleasantonRead the Press Release
OAKLAND – Royland Rice was sentenced yesterday to 15 ½ years in prison for bank robbery, announced United States Attorney Melinda Haag.
Rice, who had no plea agreement with the government, pleaded guilty on February 28, 2013, to the bank robbery charge. During the plea hearing, Rice admitted that he robbed the Bank of America branch at 6005 Stoneridge Drive in Pleasanton, Calif., on September 11, 2012. He confessed to handing the victim teller a note that said, “We know where you live and hand over the money,” and to stealing more than $1700 from the bank.
Rice was captured on video running to, and driving away from, the bank robbery scene. On September 19, 2012, officers from the Pleasanton Police Department arrested Rice.
Rice, 62, of Oakland, was indicted by a federal grand jury on November 15, 2012. The sentence was handed down by The Honorable Phyllis J. Hamilton, U.S. District Court Judge. In addition to his prison term, Rice was also sentenced to a 3-year period of supervised release.
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 and Janice Pagsanjan. The prosecution is the result of an investigation by the Federal Bureau of Investigation.
Convicted Santa Cruz Sex Offender Pleads Guilty to Possessing Child PornographyRead the Press Release
SAN JOSE – Steven Hibbett pleaded guilty in federal court in San Jose yesterday to possession of child pornography, United States Attorney Melinda Haag announced.
In pleading guilty, Hibbett, 59, of Santa Cruz, California, 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 admitted that he possessed these images of child pornography while on state probation for a prior 2009 California state felony conviction for possessing child pornography.
Hibbett was originally charged by complaint and has been in custody since his initial appearance in federal court on April 18, 2013. On July 25, 2013, Hibbett was charged with an Information alleging possession of child pornography in violation of 18 U.S.C. § 2252(a)(4)(B). Hibbett pleaded guilty to the sole count of the Information and agreed to receive a 10 year prison sentence followed by 5 years of supervised release.
Hibbett’s sentencing is scheduled for October 21, 2013, at 1:30 p.m. before The Honorable Edward J. Davila, U.S. District Court Judge, in San Jose. Since Hibbett has a prior conviction for a child pornography offense, he faces a mandatory minimum sentence of 10 years imprisonment and a maximum statutory penalty of 20 years imprisonment, a $250,000 fine, restitution, and registration as a sex offender. However, any sentence following conviction will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Joseph Fazioli is prosecuting 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.
Bay Area Man Sentenced to 25 Years in Prison for Methamphetamine and Weapons ChargesRead the Press Release
SAN FRANCISCO - Arnoldo Sanchez Farias was sentenced on Tuesday to 25 years in prison for methamphetamine trafficking and possession of a firearm in furtherance of a drug crime, announced U.S. Attorney Melinda Haag.
Sanchez Farais, most recently of Richmond, Calif., pleaded guilty on May 7, 2013, to one count of possessing 50 grams or more of methamphetamine with intent to distribute, in violation of 21 U.S.C. § 841(a)(1) and (b)(1)(A)(viii), and one count of possessing a firearm in furtherance of a drug trafficking crime, in violation of Title 18 U.S.C § 924(c).
According to the plea agreement, on August 9, 2011, Sanchez Farias had nearly 50 pounds of methamphetamine, packaged in individual one-pound bags, hidden in a tool chest in his apartment in Richmond, Calif., as well as seven firearms. Among the weapons were three 9mm pistols, a .357 magnum revolver, two shotguns, and an SKS assault rifle. The weapons were located in Sanchez Farias’ bedroom, including a loaded pistol on his bedside table. Sanchez Farias admitted possessing these weapons in the event a rival drug dealer, drug customer, supplier, or other person sought to rob or harm him.
Sanchez Farias was indicted by the Grand Jury on September 8, 2011.
The sentence was handed down by The Honorable Richard Seeborg, U.S. District Court Judge. Judge Seeborg also sentenced Sanchez Farias to a 10-year period of supervised release and ordered that he forfeit the firearms and approximately $16,000 in cash that agents and officers found with the methamphetamine and the weapons. The defendant has been in custody since August 9, 2011 and will begin serving the sentence immediately.
This case is being prosecuted by Assistant U.S. Attorney Kevin Barry with the assistance of Assistant U.S. Attorney David Countryman and Erica Doerr. The prosecution is the result of a joint investigation by the California Bureau of Narcotics Enforcement, the West Contra Costa Narcotics Enforcement Team, and ICE Homeland Security Investigations.
(Farias Indictment )
Union City Man Pleads Guilty to Drugs and Weapons ChargesRead the Press Release
OAKLAND - Ruben Reynoso pleaded guilty in federal court in Oakland yesterday to four counts of possession with intent to distribute and distribution of methamphetamine and cocaine, and being an alien in possession of ammunition, United States Attorney Melinda Haag announced.
In pleading guilty, Reynoso admitted that in October of 2012 and again in January of 2013, he sold 17 grams methamphetamine out of his residence located on the 600 block of E Street in Union City, California. He further admitted that on the date of his arrest, April 4, 2013, he possessed with the intent to distribute additional methamphetamine and cocaine. Reynoso also admitted to possessing a Lorcin L380 .380 caliber pistol, with a loaded magazine as well as additional .380 caliber ammunition. The pistol was found under the bed in his bedroom and the additional ammunition was found in the closet of the same room in his residence in Union City. Finally, Reynoso admitted that he is an alien, illegally and unlawfully in the United States.
Reynoso, 40 years old, a Mexican citizen, was indicted by a federal Grand Jury on April 18, 2013. He was charged with four counts of possession with intent to distribute and distribution of methamphetamine and cocaine, and being an alien in possession of ammunition, in violation of 21 U.S.C. § 841(a)(1), (b)(1)(B)(viii), (b)(1)(C), and 18 U.S.C. § 922(g)(5)(A). Under the plea agreement, Reynoso pleaded guilty to all counts.
Reynoso has been in continuous federal custody since April 4, 2013.
The sentencing of Reynoso is scheduled for October 16, 2013, before The Honorable Phyllis J. Hamilton, U.S. District Court Judge, in Oakland. The maximum statutory penalty for the violations are as follows:
For each count of violation of 21 U.S.C. § 841(a)(1) and (b)(1)(B)(viii): a. Maximum prison term 40 years b. Minimum mandatory prison term 5 years c. Maximum fine $5,000,000 d. Maximum supervised release term Life e. Minimum supervised release term 4 years
For a violation of 21 U.S.C. § 841(a)(1) and (b)(1)(C): a. Maximum prison term 20 years b. Maximum fine $1,000,000 c. Maximum supervised release term Life d. Minimum supervised release term 3 years
For a violation of 18 U.S.C. § 922(g)(5)(A): a. Maximum prison term 10 years b. Maximum fine $250,000 c. Maximum supervised release term 3 yearsAny sentence following conviction, however, 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.
The prosecution is the result of a ten-month investigation by Homeland Security Investigations and the Southern Alameda County Major Crimes Task Force.
San Jose Man Charged with Selling Millions of Dollars of Stolen and Counterfeit Cisco MerchandiseRead the Press Release
SAN JOSE, Calif. – Cuong Cao Dang, a/k/a Calvin Dang, was arrested this morning after a federal grand jury indictment charging him with conspiracy to commit mail fraud, six substantive counts of mail fraud, and money laundering, United States Attorney Melinda Haag and IRS-CI Special Agent in Charge José M. Martinez, announced.
According to an indictment filed yesterday and unsealed this afternoon, Dang owned and operated San Jose-based Network Genesis, Inc., a company that bought and resold used Cisco equipment. Dang also owned The Dang’s Investment, Inc. (TDI), a business dedicated to managing residential and commercial real estate. According to the indictment, from January 2006 through January 2013, Dang bought counterfeit or stolen Cisco merchandise from Cisco employees and resold that merchandise to Network Genesis customers, after altering the external serial numbers to make the items more difficult to trace. To further cover his tracks, Dang had his customers send payment to proxies, who deposited the money into their own bank accounts before funneling it back to Dang. The indictment alleges that Network Genesis had over $37 million in sales revenue from 2006 through the end of 2012.
Dang is also charged with forfeiture allegations. Upon conviction of any of the offenses in the indictment, Dang faces potential forfeiture of all property from the illegal conduct, including:
- 11 commercial and residential real properties, all located in San Jose;
- Five luxury automobiles;
- All funds in bank accounts held at Wells Fargo Bank and JP Morgan Chase;
- All funds in four ScholarShare College Savings Plan accounts Dang set up for each of his four children; and
- Cisco Equipment that was seized during the execution of search warrants at Network Genesis on January 23, 2013.
Dang was arrested early this morning at his home in San Jose, and made his initial appearance in federal court in San Jose, before The Honorable Howard R. Lloyd, United States Magistrate Judge. He is currently detained pending further bail proceedings. The defendant's next scheduled appearance is at 1:30 pm tomorrow for I.D. of counsel Judge Lloyd.
The maximum penalty for each count of conspiracy to commit mail fraud, in violation of Title 18, United States Code, Section 1349, is 20 years imprisonment, a fine of $250,000, or twice the gross gain or gross loss from the offense, and restitution to the victim. The maximum penalty for mail fraud, in violation 18 U.S.C § 1341, is 20 years imprisonment, a fine of $250,000 (or twice the gross gain/loss), and restitution. The maximum penalty for each count of engaging in monetary transactions using criminally derived property, in violation of 18 U.S.C § 1957, is 10 years in prison, and a fine of $250,000, or twice the amount of the criminally-derived 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.
Please note, an indictment contains only allegations against an individual and, as with all defendants, Dang must be presumed innocent unless and until proven guilty beyond a reasonable doubt.
Assistant United States Attorney David Callaway is prosecuting the case, with the assistance Elise Etter. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
(Calvin Dang indictment)
Former Investment Banker and His Associate Sentenced to 16 Months in Prison for Insider Trading SchemeRead the Press Release
SAN FRANCISCO - A former San Francisco investment banker and his college friend were sentenced yesterday to 16 months in prison for their roles in an insider trading scheme involving two impending corporate mergers, announced U.S. Attorney Melinda Haag and Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.
Jauyo Lee, aka “Jason Lee,” 29, of Palo Alto, Calif., and Victor Chen, 29, of Sunnyvale, Calif., both pleaded guilty on April 16, 2013, to one count of conspiracy to commit securities fraud and one count of securities fraud.
According to the plea agreements, Lee, who worked as an investment banker in the San Francisco office of Leerink Swann LLC, disclosed inside information to Chen, a friend from college, about two impending mergers involving Leerink clients. Between Aug. 26, 2009, and Sept. 5, 2009, Lee disclosed inside information to Chen about the merger of Leerink’s client, Syneron Medical Ltd., and Candela Corporation, a medical device company publicly traded on the NASDAQ stock market. Chen used the inside information to buy shares of Candela. After the merger was announced, Candela’s stock price increased more than 40 percent and Chen sold his shares for a gain of approximately $62,589.
In addition, according to the plea agreements, between June 1 and 13, 2010, Lee also provided Chen with inside information about the impending merger of Somanetics Corporation and a subsidiary of Covidien plc. Leerink was the lead financial advisor to Somanetics, which also was publicly traded on the NASDAQ. Chen used the inside information to buy shares and options of Somanetics. Following the merger announcement, the price of Somanetics stock increased more than 30 percent and Chen ultimately realized a profit of approximately $547,510.
Lee and Chen were charged in a criminal Information on March 21, 2013.
The sentence was handed down by The Honorable Richard Seeborg, U.S. District Court Judge. Judge Seeborg also sentenced Lee and Chen each to a 2-year period of supervised release and ordered that restitution and forfeiture be considered at a subsequent hearing. Chen paid $610,099 in forfeiture prior to sentencing. The defendants will begin serving the sentences on September 30, 2013.
This case is being prosecuted by Assistant U.S. Attorney Robert S. Leach and Trial Attorney Brian R. Young of the Criminal Division’s Fraud Section with the assistance of Rayneisha Booth and Mary Mallory. The prosecution is the result of a one-year investigation by the Federal Bureau of Investigation with substantial assistance from the Chicago Regional Office of the U.S. Securities and Exchange Commission.
This prosecution is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
Former Bay Area Resident Pleads Guilty to Conspiracy to File False Claims for Tax RefundsRead the Press Release
SAN FRANCISCO, Calif. – Charmetra Urssery pleaded guilty yesterday to conspiracy to file a false tax returns, United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Special Agent in Charge José M. Martinez, announced.
According to the plea agreement, beginning in June 2008, Urssery engaged in a scheme to obtain fraudulent tax refunds. As part of her role in the scheme, Urssery gathered identities to use in false tax return filings that were submitted to the Internal Revenue Service (IRS). Urssery also used her bank account number to receive the fraudulent tax payments. When Urssery withdrew the money from her own bank account, she and others in the conspiracy would split the proceeds from the scheme. As part of her plea, Urssery agreed to repay $196,766 to the United States Treasury.
Urssery, 36, of Sacramento, was indicted on July 12, 2012. She pleaded guilty to the single charge in the Indictment – Conspiracy to File False Claims, in violation of 18 U.S.C § 286.
Urssery is scheduled to be sentenced on November 13, 2013. Urssery was charged along with Angela Pellette, who pleaded guilty to conspiracy to file false tax returns on June 12, 2013, and agreed to repay the United States $197,659. Pellette is scheduled for sentencing on September 18, 2013.
The maximum statutory penalty for each count of conspiracy to file false claim, in violation of 18 U.S.C § 286, is ten years in prison and a fine of $250,000. However, any sentence will be imposed by the court only after consideration of the U.S. sentencing guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Thomas Newman is the Assistant U.S. Attorney who is prosecuting this case. The prosecution is the result of an investigation by the IRS-CI.
Lake County Residents Charged with Conspiracy and Use of A Minor in A Large-Scale Marijuana OperationRead the Press Release
SAN FRANCISCO – Following a months-long federal investigation, Ryan Balletto and Patrick Pearmain were charged today with conspiracy to manufacture and distribute over 1,000 plants of marijuana and using a minor in a drug operation, announced United States Attorney Melinda Haag.
Balletto and Pearmain, of Lake County, are charged in a criminal complaint signed by Magistrate Judge Nandor J. Vadas and unsealed today. In addition to the conspiracy and use of a minor charges, Balletto is also charged in the complaint with possession of a firearm in furtherance of a drug trafficking crime. The case arose from an investigation by the Lake County Sheriff’s Office and the ICE Homeland Security Investigations, Contraband Smuggling Group, which led to the discovery of a 1,300 plant marijuana cultivation operation and a host of firearms in Lake County.
The complaint alleges that Balletto and Pearmain kept a fifteen year-old runaway for weeks at an extensive marijuana grow site on land owned by Balletto in Lake County, and that they used her to process marijuana plants. According to the complaint, Balletto and Pearmain allegedly subjected the minor victim to sexual abuse during that time.
Agents and officers allegedly discovered a cache of weapons at the grow site, most of which were loaded, including assault weapons, such as AR-15 style rifles with night vision scopes, and pistols. Stored with the rifles, officers allegedly found seven fully loaded 30-round .223 caliber magazines, four fully loaded 20-round .223 caliber magazines, and a large cache of assorted ammunition. With the weapons, officers allegedly found ballistic face masks, a helmet, a flak jacket, an armored plate carrier, night vision devices, and a gas mask. A search of Balletto’s residence allegedly uncovered even more weapons, including multiple sniper rifles, additional assault rifles, shotguns, pistols, and ammunition.
The penalties Balletto and Pearmain face for the drug conspiracy and use of a minor in a drug operation charges are a maximum of life in prison, with a mandatory minimum ten-year term. In addition, the possession of a firearm in furtherance of a drug trafficking crime carries a mandatory term of five years in prison, consecutive to any sentence imposed. Any sentence following conviction would be imposed by the court only after consideration of the United States Sentencing Guidelines and the federal statute governing the imposition of sentence, 18 U.S.C. § 3553(a).
“Some in our community believe that marijuana grow operations are run by compassionate caregivers interested only in supplying medicine to the sick. Unfortunately, this case illustrates what we in law enforcement see – marijuana grow operations that include heavily-armed, violent individuals, motivated by profit, carrying out abuses of vulnerable victims.” U.S. Attorney Haag said. “In light of the details alleged in the complaint, we fear additional victims may have been subjected to similar treatment by the defendants, and we urge anyone with information about other such victims to come forward. My office is dedicated to keeping the community safe, and we will continue to work with our local, state and federal law enforcement partners to help bring to justice those who victimize others, particularly those who are most vulnerable.”
"This is an investigation that was originated by Federal Investigators,” said Lake County District Attorney, Don Anderson. “The U.S. Attorney's office has the expertise and resources to assure the defendants are adequately punished for their crimes. We have been working with the U.S. Attorney's office in this matter and look forward to our continuing relationship with them"
"The criminal groups involved in growing and trafficking marijuana have repeatedly shown they have no qualms about using violence and intimidation against those who get in their way - in this case the alleged victim was only 15 years old," said Tatum King, Acting Special Agent in Charge, Homeland Security Investigations, San Francisco. "By pooling our resources, authorities and expertise, we've succeeded in dismantling a drug operation suspected of funneling significant quantities of marijuana into northern California and onto our streets. This case shows yet again why federal and state collaboration is crucial to combatting these kinds of public safety threats and ensuring that those involved are brought to justice."
The defendants made their initial appearance today in front of Judge Vadas. A detention hearing is set for both defendants on Wednesday, July 24, 2013, at 1:00 pm in Eureka, California.
Kevin Barry and Matthew McCarthy are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Erica Doerr. U.S. Attorney Haag and Homeland Security Investigations Special Agent in Charge Settles also commend the Lake County Sheriff’s Office and the Lake County District Attorney’s Office for their continuing cooperation and assistance in this investigation.
Please note, a complaint contains only allegations against an individual and, as with all defendants, the defendants in this case must be presumed innocent unless and until proven guilty.
(Balletto and Pearmain complaints)
San Francisco Man Pleads Guilty to Attempted Sexual Exploitation of a Minor in MexicoRead the Press Release
SAN FRANCISCO - Gary Hardeman pleaded guilty in federal court in San Francisco today to committing a felony offense involving a minor while under a duty to register as a sex offender, United States Attorney Melinda Haag announced.
In pleading guilty, Hardeman admitted to traveling from San Francisco to Mexico City, Mexico, and attempting to engage in sexual acts with a 13-year-old girl between December 13 and 17, 2007. At the time of the offense, Hardeman was required by California law to register as a sex offender, based on his previous convictions for sex offenses in California.
Hardeman, 58 of San Francisco, was indicted by a federal Grand Jury on November 23, 2010. He was charged with one count of engaging in illicit sexual conduct in foreign places, in violation of 18 U.S.C. § 2423(c), and one count of committing this crime while under a legal obligation to register as a sex offender, in violation of 18 U.S.C. § 2260A. Under the plea agreement, Hardeman pled guilty to the second of these two counts.
“As this case shows, those who engage in crimes involving the sexual exploitation of minors cannot escape justice by traveling beyond our borders,” said Clark Settles, Special Agent in charge for Homeland Security Investigations, San Francisco. “Protecting young people both here and abroad from sexual predators continues to be a top priority for HSI. We are putting these predators on notice that HSI and its law enforcement partners stand ready to pursue and prosecute those who prey on innocent children. ”
Hardeman, who is currently in custody, will be sentenced on October 22, 2013, by The Honorable Richard Seeborg, U.S. District Court Judge, in San Francisco. The mandatory statutory penalty for a violation of 18 U.S.C. § 2260A is ten years and a maximum fine of $250,000, plus restitution. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Owen Martikan and Janaki Gandhi are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Hui Chen. The prosecution is the result of a multi-year investigation by the Department of Homeland Security, Homeland Security Investigations, in the United States and Mexico.
Pharmaceutical Company Agrees to Pay $3.5 Million to Settle False Claims Act AllegationsRead the Press Release
SAN FRANCISCO - Mallinckrodt LLC, a pharmaceutical manufacturer, has agreed to pay $3.5 million to settle allegations that it made improper payments to physicians and, as a result, caused the submission of false claims to Medicare and Medicaid between January 2005 and June 2010, United States Attorney Melinda Haag announced.
The civil settlement resolves a lawsuit filed in the United States District Court for the Northern District of California in April 2008 by a former employee of Mallinckrodt. The action was filed under the qui tam provisions of the federal False Claims Act and several state False Claims Acts, which permit private citizens, called "relators," to bring lawsuits on behalf of the United States or a state or commonwealth and receive a portion of the proceeds of a settlement or judgment awarded against a defendant. The relator in this action will receive approximately $603,000 as his statutory share of the proceeds of this settlement.
The lawsuit alleged that, among other things, Mallinckrodt paid certain physician consultants for their participation in speaker programs, clinical trials, and meetings, or for the completion of certain forms, in order to induce them to write prescriptions for Mallinckrodt's drug products, namely Restoril, Magnacet, Tofranil-PM, and their generic equivalents. As a result of these payments, the suit alleged that Mallinckrodt caused the submission of tainted, false claims for payment to the Medicare and Medicaid programs.
"This settlement demonstrates this Office's commitment to protecting the integrity of the Medicare and Medicaid programs and ensuring that physicians are making care decisions without undue influence," said U.S. Attorney Haag.
The majority of the settlement funds, approximately $3.173 million, will be paid to the United States which not only funds the Medicare program, but also contributes to the various Medicaid programs around the country. The remainder of the funds will be split between eight states and commonwealths including, California, Maryland, Missouri, New York, Ohio, Rhode Island, Utah, and West Virginia.
AUSA Erica Blachman Hitchings handled the case with the assistance of Lucille Yee, Michael Zehr, Kathy Terry, and Jessica Meegan. The settlement is the result of an investigation by the U.S. Department of Health and Human Services Office of Inspector General, U.S. Food and Drug Administration Office of Criminal Investigations, the Federal Bureau of Investigation, and the National Association of Medicaid Fraud Control Units.
Gang Member Pleads Guilty to South San Francisco Triple Racketeering MurderRead the Press Release
SAN FRANCISCO – Joseph Ortiz, 23, of South San Francisco, pleaded guilty today 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 documents and the defendant’s guilty plea allocution, Ortiz 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. The united 500 Block/C Street Gang engages 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.
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, wounding three of the occupants.
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 some of 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 to these shootings, Ortiz pleaded guilty to robbing at gunpoint a South San Francisco jewelry store on April 5, 2010, as well as robbing at gunpoint a 7-Eleven convenience store in Pacifica four days later, on April 9, 2010. Furthermore, Ortiz 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.
Ortiz faces a mandatory minimum term of life imprisonment for each of the three counts of racketeering murder to which he has pled guilty. The maximum terms of imprisonment he faces for his twenty-five counts of conviction are as follows:
- Racketeering conspiracy --- Life
- Conspiracy to commit racketeering murder --- 10 years
- Conspiracy to commit racketeering assault with a dangerous weapon --- 3 years
- Attempted racketeering murder (8 counts) --- 10 years for each count
- Use of firearm in crime of violence (4 counts) --- Life for each count; mandatory minimum consecutive sentence of 10 years for first count, and mandatory minimum consecutive sentence of 25 years for each subsequent count
- Racketeering murder (3 counts) --- Life for each count; mandatory minimum sentence of life for each count
- Use of firearm in crime of violence causing murder --- Life
- Conspiracy to obstruct justice --- 5 years
- Obstruction of justice --- 20 years
- Concealment of object to obstruct investigation --- 20 years
- Conspiracy to commit robbery affecting commerce --- 20 years
- Robbery affecting commerce (2 counts) --- 20 years for each count
Ortiz is scheduled to be sentenced by Judge Illston on November 1, 2013 at 11:00 am.
Acadia L. Senese and W.S. Wilson Leung are the Assistant United States Attorneys who are prosecuting the case against Ortiz, 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, twelve have pleaded guilty to racketeering-related offenses and/or offenses related to the obstruction of justice.
Former Vice President of Wells Fargo Advisors and Morgan Stanley & Co. Charged in $1.8 Million Fraud SchemeRead the Press Release
SAN FRANCISCO - A federal indictment charging Adorean Boleancu with twenty-seven counts of bank fraud, wire fraud, money laundering, and aggravated identity theft was unsealed this morning in federal court, announced United States Attorney Melinda Haag. The indictment alleges that Boleancu executed a fraud scheme by forging more than $1.8 million in checks written on accounts of an elderly, widowed client for his personal benefit.
According to the Indictment, Boleancu, 47, of Napa, Calif., was a Vice President, Senior Financial Consultant in the Wealth Management Group of Wells Fargo Advisors, LLC and, before that, a Vice President, Financial Advisor with Morgan Stanley & Co., Inc. The Indictment alleges that Boleancu wrote checks drawn on the client's Morgan Stanley brokerage account and home equity lines of credit Boleancu had established for the victim. These checks were made payable to Boleancu's family members, his girlfriend, another female acquaintance, cash, and financial companies where Boleancu had credit card accounts. The Indictment also alleges that Boleancu presented or caused to be presented forged checks in the amount of $750,000 and $600,000 payable to Boleancu's girlfriend, who deposited the checks and transferred much of the proceeds to Boleancu.
Boleancu made his initial appearance in federal court in San Francisco this morning. Boleancu was released on an $800,000 bond. His next scheduled appearance is at 2:30 p.m. on July 23, 2013, before the Honorable Richard Seeborg, U.S. District Court Judge.
The maximum statutory penalty for each count of bank fraud, in violation of 18 U.S.C. § 1344, and wire fraud, in violation of 18 U.S.C. § 1343, is 30 years in prison and a $1 million fine, plus restitution if appropriate. The maximum statutory penalty for each count of money laundering, in violation of 18 U.S.C. § 1957, is 10 years in prison and a fine of $250,000. The maximum statutory penalty for each count of aggravated identity theft, in violation of 18 U.S.C. § 1028A, is 2 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.
Robert S. Leach is the Assistant U.S. Attorney who is 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.
Please note, an indictment contains only allegations against an individual and, as with all defendants, Boleancu must be presumed innocent unless and until proven guilty.
(Boleancu Indictment )
Defendants Charged in String of Armed Robberies at Bay Area Walmart and Safeway StoresRead the Press Release
The Grand Jury today returned an indictment against three individuals for their involvement in a spree of armed robberies of commercial businesses in and around the Bay Area and the subsequent attempted cover-up of those robberies, announced United States Attorney Melinda Haag.
The Grand Jury charged Melvin Landry, Jr., 22, and Dominique Martin, 22, both of Oakland, with conspiracy to commit robbery affecting interstate commerce, robbery affecting interstate commerce ("Hobbs Act robbery"), and the use of a firearm during and in relation to a crime of violence. Landry is charged with 4 counts of Hobbs Act robbery and using a firearm during those robberies. Martin is charged with 2 counts of Hobbs Act robbery and using a firearm during those robberies. According to a previously-filed criminal complaint, between 2012 and continuing into 2013, Landry and Martin robbed Wal-Mart stores in Fremont, San Leandro, and Sacramento, as well as a Safeway store in Oakland, each time brandishing a firearm at employees during the robberies. The loss amount from these robberies was at least $275,000, a large portion of which was cash.
The Grand Jury also charged Landry with obstruction of justice and attempted bribery of a federal official. According to the criminal complaint, following his initial arrest in early July, Landry offered $60,000 in cash, a Rolex watch, and a luxury vehicle if Federal Bureau of Investigation (FBI) agents would allow him to escape. The Grand Jury also charged Cassandra Dam, 29, of Oakland, with making false statements to federal agents in connection with their investigation into Landry and Martin.
The criminal complaint specifies that additional robberies are also under investigation and anyone with information is asked to contact the FBI San Francisco Division at (415) 553-7400.
The maximum statutory penalty for use/possession of a firearm in furtherance of the Hobbs Act robbery, a crime of violence, in violation of 18 U.S.C. Section 924(c), is life imprisonment and a fine of $250,000, but carries a mandatory minimum consecutive prison term of 5 years for the first Section 924(c) conviction, and a 25-year mandatory minimum consecutive term in prison for each second or successive 924(c) conviction. The maximum statutory penalty for Hobbs Act robbery and conspiracy to commit Hobbs Act robbery, in violation of 18 U.S.C. Section 1951(a), is 20 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.
Kathryn Haun is the Assistant United States Attorney who is prosecuting the case with the assistance of Kevin Costello and Daniel Charlier-Smith. The prosecution is the result of an investigation by the FBI, the Fremont Police Department, the Alameda County District Attorney’s Office, the Alameda County Sheriff’s Department, the Oakland Police Department, the San Leandro Police Department, the Sacramento Police Department, the Pinole Police Department, and the San Rafael Police Department.
Please note, indictments and complaints contain only allegations against an individual and, as with all defendants, those named herein must be presumed innocent unless and until proven guilty.
Former San Francisco Resident Sentenced to 20 Months in Prison for $3.43 Million Mortgage Fraud SchemeRead the Press Release
SAN FRANCISCO, Calif. – Kevin Derricott was sentenced yesterday to 20 months in prison for his role in a scheme to defraud lenders out of millions of dollars, United States Attorney Melinda Haag announced.
On February 19, 2013, Derricott pleaded guilty to conspiracy to commit wire and bank fraud and bank fraud. According to the plea agreement, from about February 2006 through December 2008, Derricott conspired with others to submit mortgage applications to various lenders that contained materially false information about the borrower-applicants, such as inflated salary figures, inflated assets claims, or false employment information, in order to trick the lenders into making loans. Derricott also recruited borrower-applicants, procured false supporting documentation for loan applications, and submitted fraudulent loan applications to lenders in exchange for a portion of the fraudulent proceeds.
Derricott, 40, of Rocklin, California, was charged on December 15, 2011, by the grand jury with conspiracy to commit bank and wire fraud, in violation of Title 18 USC Section 1349, and bank fraud, in violation of Title 18 USC Section 1344. He pleaded guilty to all counts in the indictment. The Honorable William H. Alsup, U.S. District Court Judge, imposed the sentence. Judge Alsup ordered Derricott to serve 3 years of supervised release following his imprisonment, with the special condition of 16 months’ home confinement, and ordered him pay restitution of $3.43 million.
Kathryn Haun is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Daniel Charlier-Smith. The prosecution is the result of an investigation by the FBI and IRS-CI.
Tucson Man Sentenced to 51 Months for Bank Robbery SpreeRead the Press Release
OAKLAND – Raymond David Lopez was sentenced today to 51 months in prison for a string of bank robberies he committed in May and June of 2012, announced United States Attorney Melinda Haag.
Lopez pleaded guilty on April 3, 2013, to six counts of bank robbery. According to the plea agreement, Lopez admitted to robbing the following banks of the amounts, and on the dates, listed below by using verbal demands, a demand note, and intimidation:
- $2,475 from a U.S. Bank branch in Pleasanton, California, on May 9, 2012
- $2,606 from a U.S. Bank branch in Pleasant Hill, California, on May 13, 2012
- $1,409 from a First Community Bank branch in Alameda, California, on May 26, 2012
- $1,135 from a Bank of America branch in Lafayette, California, on May 29, 2012
- $4,900 from a U.S. Bank branch in Alameda, California, on June 4, 2012
- $756 from a U.S. Bank branch in Dublin, California, on June 12, 2012
Lopez also admitted to the following bank robberies outside of the Northern District of California, which he accomplished in similar fashion:
- $7,214 from a River City Bank branch in Roseville, California, on April 26, 2012
- $3,542 from another River City Bank branch on May 2, 2012
- $4,000 from a Woodforest National Bank branch in Amarillo, Texas, on April 14, 2012
All stolen funds were insured by the FDIC.
Mr. Lopez, 30, of Tucson, Arizona, was indicted by a federal grand jury on August 30, 2012. He was charged in the Indictment with six counts of bank robbery in violation of Title 18, United States Code, Section 2113(a).
The sentence was handed down by the Honorable Phyllis J. Hamilton, U.S. District Court Judge, following a guilty plea to all six counts alleged in the Indictment. Judge Hamilton also sentenced the defendant to a three-year period of supervised release and ordered the defendant to pay a total of $28,037 in restitution to the victim banks. The defendant remained in custody and will immediately begin serving the sentence immediately.
Andrew S. Huang and Christina McCall are the Assistant U.S. Attorneys who prosecuted the case with the assistance of Vanessa Vargas. The prosecution is the result of an investigation by the Federal Bureau of Investigation, in conjunction with the Dublin Police Department, Pleasanton Police Department, El Cerrito Police Department, Pleasant Hill Police Department, Alameda Police Department, Contra Costa County Sheriff’s Office, Alameda County Sheriff’s Department, and Roseville Police Department.
(Lopez Indictment )
Oakland Man Sentenced to over Thirteen Years in Prison for Carjacking and RobberyRead the Press Release
OAKLAND - Patrick Fiammetta-McConnell was sentenced today to 157 months in federal prison for carjacking, robbery, possession of methamphetamine for sale, and being a felon in possession of a firearm, announced United States Attorney Melinda Haag.
McConnell, 31, of Oakland, California, pleaded guilty on November 19, 2012, to carjacking, in violation of Title 18 U.S.C. § 2119; interference with commerce by robbery, in violation of Title 18 U.S.C. § 1951(a); possession with intent to distribute 5 grams or more of methamphetamine, in violation of Title 21 U.S.C. §§ 841(a)(1) and (b)(1)(B)(viii); one count of being a felon in possession of a firearm, in violation of Title 18 U.S.C. § 922(g)(1); and one count of being a felon in possession of ammunition, in violation of Title 18 U.S.C. § 922(g)(1).
According to court documents, McConnell admitted that on July 27, 2011, he and codefendant Ismael Eduardo Axtle each used a firearm in the course of a carjacking and robbery of a San Francisco parking garage employee. Days after this incident, on August 1, 2011, McConnell was caught with a stolen vehicle and 40 rounds of .40 caliber ammunition. McConnell initially fled on foot from law enforcement officers, but was ultimately apprehended carrying several baggies of methamphetamine which he admitted he was planning to sell. Officers later found a .40 caliber handgun in the trunk of yet another stolen vehicle in McConnell’s possession.
United States District Court Judge Saundra Brown Armstrong imposed McConnell's 157-month sentence and ordered him to begin serving his time immediately. Judge Armstrong also sentenced McConnell to 4 years of supervised release to follow his term of imprisonment. Axtle pleaded guilty on May 14, 2013, to robbing the parking garage as well as other unrelated crimes, and is scheduled to be sentenced by Judge Armstrong on July 30, 2013.
Brigid Martin of 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 by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Alameda County Regional Auto Theft Task Force, California Highway Patrol, Oakland Police Department, and San Francisco Police Department.
Los Gatos Man Convicted of Endangering the Safety of an AircraftRead the Press Release
SAN FRANCISCO – Hasan Ibrahim was convicted by a federal jury today of attempting to place destructive substances on an airplane, United States Attorney Melinda Haag announced.
The jury found that the defendant willfully intended to place nine different hazardous materials on a Lufthansa passenger airplane bound for Frankfurt, Germany. The hazardous materials were ultimately destined for Jeddah, Saudi Arabia. In related charges, the jury convicted Ibrahim of failing to properly label the packages containing the hazardous materials and failing to complete the requisite shipping papers as required by the Department of Transportation. The guilty verdict followed a six-day jury trial before the Honorable Edward M. Chen, U.S. District Court Judge.
Evidence at trial established that Ibrahim, 62, of Los Gatos, California, doing business as MechChem Corporation, ordered and shipped hazardous materials for over ten years. Many of the chemicals the defendant handled were flammable, corrosive, and highly toxic. As a result of their dangerous properties, many of the chemicals were forbidden by transport on a passenger airplane, and two chemicals in particular were forbidden by transport on any aircraft.
In all, the jury convicted Ibrahim of nine counts of attempting to place destructive substances on an aircraft, in violation of 18 U.S.C. § 32(a)(2); ten counts of shipping hazardous materials without the proper shipping papers and without the proper labels, in violation of 49 U.S.C. § 5124(c) and (d); one count of failing to file required export information, in violation of 13 U.S.C. § 305(a)(1); and two counts of attempting to smuggle goods, in violation of 18 U.S.C. § 554(a).
Ibrahim remains out of custody pending the sentencing hearing.
Ibrahim’s sentencing hearing is scheduled for October 9, 2013, before Judge Edward M. Chen in San Francisco. The maximum statutory penalty for each count of attempting to place a destructive substance on an airplane in violation of 18 U.S.C. § 32(a)(2) is 20 years in prison and a fine of $250,000. However, any sentence will be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Peter Axelrod and Brian Stretch are the Assistant U.S. Attorneys who are prosecuting the case with the aid of legal assistant Bridget Kilkenny. The prosecution is the result of an investigation by the Federal Bureau of Investigation, the United States Department of Transportation, Office of Inspector General, the Federal Aviation Administration, the United States Customs and Border Protection, and the United States Department of Commerce, Bureau of Industry and Security.
Bay Area Law Firm Paralegal Pleads Guilty to FraudRead the Press Release
OAKLAND – Ana Lissa Reyes pleaded guilty in federal court in Oakland today to mail fraud and tax evasion, announced United States Attorney Melinda Haag.
In pleading guilty, Reyes admitted to having worked as a secretary, office manager, and paralegal for a Bay Area law firm. Reyes admitted that from about 2006 through June 2011, she, without authorization, settled claims without the knowledge of the law firm or its clients and stole the settlement proceeds. Reyes admitted to engaging clients without the law firm’s knowledge and to stealing clients’ retainer fee payments. Reyes also admitted that in carrying out the scheme to defraud, she created a bogus company, Lincoln Litigation, to correspond with clients without the law firm’s knowledge, and to defraud the clients into believing that their cases were ongoing. Reyes admitted to embezzling a total of $327,795.05 from the law firm and its clients.
Reyes also admitted to under-reporting her income for the calendar years 2006 through 2011. For each of these tax years, Reyes admitted that she knew her joint taxable income was substantially in excess of the amount stated on the return, resulting in additional tax due and owing to the United States.
Reyes, 42, of San Lorenzo, California, was charged by an information on January 25, 2013 with five counts of mail fraud in violation of Title 18 U.S.C. § 1341, and six counts of tax evasion in violation of Title 26 U.S.C. § 7201. Reyes is currently on pre-trial release on a $100,000 bond.
Reyes’ sentencing hearing is scheduled for October 10, 2013 at 2:00 p.m. before the Honorable Yvonne Gonzalez Rogers, U.S. District Court Judge, in Oakland. The maximum statutory penalty for each count of mail fraud, in violation of Title 18 U.S.C. § 1341, is 20 years’ imprisonment and a fine of $250,000, plus restitution. The maximum statutory penalty for each count of tax evasion, in violation of Title 26 U.S.C. § 7201, is 6 years’ imprisonment and a fine of $250,000, plus restitution. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Wade Rhyne is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Legal Assistant Janice Pagsanjan and Paralegal Patty Lau. The prosecution is the result of a year-long investigation by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation.
San Anselmo Resident Sentenced to 5 months for Tax FraudRead the Press Release
SAN FRANCISCO, Calif. – John Kieran Hynes was sentenced today to 5 months in prison for filing a false tax return, announced United States Attorney Melinda Haag and IRS-CI Special Agent in Charge José M. Martinez.
According to court documents, during 2005, Hynes was the owner of Newtown Construction. Hynes admitted that when he received check payments for contracted construction services rendered during the 2005 tax year, he would either deposit the entire check into his business bank account, cash the entire amount of the check, or cash a portion of the check and deposit the remainder of the check into his business account. The amount Hynes received back in cash when he deposited only a portion of the check was called a “less-cash withdrawal.”
Hynes’ bookkeeper relied on the deposited amounts shown on his monthly bank statements to determine his gross business receipts in 2005. Hynes intentionally did not tell his bookkeeper about the less-cash withdrawals to prevent his bookkeeper from including the less-cash withdrawal amounts among the gross receipts that the bookkeeper tracked in the company accounting records.
In order to file his 2005 tax return, Hynes provided his tax return preparer with the company accounting records prepared by his bookkeeper. Hynes knew those accounting records understated the gross receipts earned under the name Newtown Construction because the gross receipts recorded did not include the less-cash withdrawals.
On his 2005 tax return, Hynes knowingly failed to report additional gross receipts of $214,595 earned by Newtown Construction which resulted in a tax loss to the United States of $66,524.
On March 12, 2013, Hynes, 46, of San Anselmo, California, pleaded guilty to one count of filing a false tax return.
In addition to 5 months imprisonment, the Court imposed one year of supervised release including 5 months of home detention, a $3,000 fine, and restitution of $66,524, to the Internal Revenue Service.
Special Assistant United States Attorney Charles Parker is prosecuting this case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
Owner of Bay Area Home Health Care Providers Charged with Tax Fraud and Structuring Cash TransactionsRead the Press Release
OAKLAND, Calif. – Muzaffar Hussain, of Hayward, was charged on June 25, 2013 with four counts of tax evasion, 13 counts of filing a false tax return, 18 counts of willful failure to truthfully account for and pay payroll taxes, and nine counts of structuring transactions to evade reporting requirements, announced United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation (IRS-CI) Special Agent in Charge José M. Martinez.
According to the indictment, between July 2004 and December 2008, Hussain owned and operated Cross Roads Health Care and Hospice, Inc. (Cross Roads). As the corporate officer, he was responsible for collecting, accounting for and paying over Cross Roads’ employment withholdings taxes to the IRS. For a period of 18 quarters, Hussain failed to truthfully account for and pay over the required withholdings taxes to the IRS, in the amount of $534,728.15.
It is further alleged that Hussain filed tax returns with understated income for tax years 2005 and 2006, and he failed to file personal income returns altogether for 2007 and 2008. During all four years, according to the indictment, Hussain used corporate funds to pay personal expenses including payments for rent, marriage dissolution obligations, luxury cars, motor-home, and motorcycles in an attempt to conceal from the IRS his true and correct income.
The Indictment further alleges that Hussain signed and filed corporate income tax returns on behalf of three separate home health care providers that omitted gross receipts earned by the businesses. It is alleged that from 2004 through 2008, Hussain omitted gross receipts from the Corporate Income Tax Returns of Cross Roads in the amounts of $506,925, $795,384, $901,794, $372,930 and $312,992. From 2004 through 2006, Hussain allegedly omitted gross receipts from the Corporate Income Tax Returns he signed on behalf of Horizon Health Care, Inc. in the amounts of $264,928, $603,702 and $157,285. The indictment also alleges that from 2004 through 2008, Hussain omitted gross receipts from the Corporate Income Tax Returns of Sunshine Home Health Care, Inc. in the amounts of $363,917, $648,197, $140,390, $736,542 and $277,968.
The Indictment further alleges that between March 6, 2010, and May 24, 2010, Hussain knowingly structured money transactions for the purpose of evading reporting requirements.
The maximum statutory penalty for each count of tax evasion, in violation of Title 26, U.S.C § 7201 is five years in prison and a fine of $250,000. The maximum penalty for willful failure to collect or pay over taxes in violation of Title 26, U.S.C § 7202 is five years in prison and a fine of $250,000. The maximum statutory penalty for each count of filing a false tax return, in violation of Title 26, U.S.C § 7206(1) is three years in prison and a fine of $250,000. The maximum statutory penalty for each count of structuring transactions to evade the reporting requirement, in violation of Title 31, U.S.C § 5324(a)(3) is five years in prison and a fine of $250,000.
Special Assistant U.S. Attorney Charles Parker is prosecuting the case with the assistance of Kathy Tat. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
Lake County Man Indicted for MurderRead the Press Release
SAN FRANCISCO - A federal grand jury in San Francisco has returned a superseding indictment against Jonathan Mota, 31, for murder caused by a firearm; for Hobbs Act robbery, a crime of violence; and for use and possession of a firearm in furtherance of that robbery, announced United States Attorney Melinda Haag.
According to the superseding indictment, Mota is alleged to have robbed the Mount Konocti Gas & Mart on January 18, 2013. During the course of that robbery, the defendant shot and killed Forrest Seagrave.
“We take our responsibility to the residents of Lake County, and the entire Northern District of California, seriously,” said U.S. Attorney Melinda Haag. ”Therefore, when the Lake County District Attorney and Sheriff requested federal law enforcement coordination on this investigation, I am quite pleased that we were able to come together and focus the necessary resources on the investigation, and now prosecution, of this senseless violent crime.”
“ATF focuses its efforts on individuals who unlawfully possess or use firearms," said Special Agent in Charge Joseph M Riehl. “We appreciate the collaboration with Lake County Sheriff’s Department and District Attorney's Office, and the U.S. Attorney’s Office to perfect this investigation."
“I wish to compliment all of the Lake County investigators for their dogged, non-stop efforts to bring the investigation into the murder of Forrest Seagrave to a close,” said Lake County Sheriff Francisco Rivero. “I also wish to express my deepest gratitude to the United States Attorney’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives for their uncompromising assistance and resources.”
The grand jury has indicted the defendant for his possession of a separate firearm, an assault weapon, during the timeframe of the robbery. He was prohibited from possessing that weapon by virtue of his prior felony conviction for armed robbery. That felon-in-possession case is pending before U.S. District Court Judge Jon Tigar (case No. 13-cr-93). Motions are scheduled to be heard in that case on September 13, 2013 at 9:30 am.
The maximum statutory penalty for use/possession of a firearm in furtherance of the Hobbs Act robbery, a crime of violence, in violation of Title 18 U.S.C. Section 924(c), is life imprisonment and a fine of $250,000. The maximum statutory penalty for the use of the firearm resulting in murder, in violation of Title 18 U.S.C. Section 924(j), is life imprisonment and a fine of $250,000 unless the Attorney General directs the U.S. Attorney to seek the death penalty, in which case the maximum statutory penalty for the murder is death. The maximum statutory penalty for Hobbs Act robbery, in violation of Title 18 U.S.C. Section 1951(a), is 20 years imprisonment and a fine of $250,000. The maximum statutory penalty for being a felon in possession of a firearm, in violation of Title 18 U.S.C. Section 922(g), is 10 years imprisonment 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.
Kathryn Haun is the Assistant U.S. Attorney who is prosecuting the case with the assistance of the Lake County District Attorney’s Office and with the assistance of Daniel Charlier-Smith and Kurt Kosek of the U.S. Attorney’s Office. The prosecution is the result of a joint investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Lake County Sheriff’s Office.
Please note, an indictment contains only allegations against an individual and, as with all defendants, Mota must be presumed innocent unless and until proven guilty.
(Mota Superseding Indictment )
Santa Cruz Woman Sentenced in Foreclosure Assistance ScamRead the Press Release
SAN JOSE - Tara Denise Bonelli was sentenced to 37 months in prison by United States District Judge Edward J. Davila in San Jose, California, on June 25, 2013, for defrauding investors of over $3,000,000, announced United States Attorney Melinda Haag.
On February 12, 2013, Bonelli pleaded guilty in federal court to Wire Fraud, in violation of 18 USC § 1343. Bonelli admitted that, beginning no later than May 2006, and continuing to at least until October 2008, she promoted false and fraudulent real estate investments by knowingly making false promises about how investor funds were to be invested and repaid.
According to her plea, in May 2004, Bonelli founded Vista Holding Company, a holding company that owned and operated eight entities, including Vista Funding, Inc., a pre-foreclosure services company that helped refinance properties or purchased properties to develop, rent, and/or sell; Independent Financial, a company that bought mortgage notes from banks; Equity Advisors, a mortgage company that matched lenders with borrowers; Bonelli Properties, a real estate company; Lost Dollar Services, a company formed to facilitate collection of homeowner overages; Equity Inquiries, a real estate research company; Outlook Enterprises, a development company; and Sovereign Property Management, a property management company. Although Bonelli established all of these entities under Vista Holding Company, she primarily conducted business under Vista Funding Inc., and controlled all of its business transactions.
In furtherance of her scheme, Bonelli told investors that their money would be used to purchase properties for resale or conversion to condominiums, and to engage in the business of foreclosure assistance. In some instances, to lure their investments, Bonelli promised a return of up to 1000%. Rather than use investor money for the stated purpose, Bonelli used some of the investor funds to pay for her personal expenses.
Bonelli, 33, of Santa Cruz, California, was indicted by a federal grand jury on March 16, 2011. She was charged with eighteen counts of Wire Fraud, in violation of 18 United States Code § 1343. Under the plea agreement, Bonelli pleaded guilty to one count that encompassed the loss due to fraud in all of the counts, which was over $3,000,000. The sentencing court also ordered that Bonelli pay restitution in an amount to be settled at a hearing to be held on August 5, 2013, at 3:00 p.m. before Judge Davila in San Jose.
Matt Parrella and Susan Knight are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Elise Etter. The prosecution is the result of a 2-year investigation by the Federal Bureau of Investigation and the Internal Revenue Service - Criminal Investigation Division.
San Francisco Resident Sentenced to 24 Months in Prison for Filing False Claims for Tax RefundsRead the Press Release
SAN FRANCISCO - On June 19, 2013, Eric Flentoil pleaded guilty and was sentenced to two years in prison for access device fraud and filing false claims, announced United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigations (IRS-CI) Special Agent in Charge José M. Martinez.
In pleading guilty, Flentoil admitted to filing a false 2011 income tax return using a stolen Social Security number and claiming a tax refund of $2,915. Unknown to Flentoil, the individual to whom the social security number belonged, had made a $40,000 estimated tax payment to the IRS for his 2011 taxes. Therefore, the IRS sent a $40,000 refund check, in the victim’s name, to the address on the false return, which was Flentoil’s home address. Flentoil used the victim’s name and social security number to open a bank account, deposit the $40,000 check, and obtain a debit card to access the funds. From June 1, 2012, through June 11, 2012, Flentoil used the debit card to withdraw funds and make purchases.
Flentoil also filed a false 2011 federal income tax return in his own name, receiving a $2,071 tax refund, to which he was not entitled.
Flentoil, age 31, of San Francisco, was indicted on March 19, 2013. He was charged with access device fraud, filing false claims, and aggravated identity theft. He pleaded guilty to access device fraud and filing false claims.
The sentence was handed down by U.S. District Court Judge Edward Chen following a guilty plea on two counts in violation of filing false claims in violation of Tile 18, United States Code, Section 287 and one count of access device fraud in violation of Title 18, United States Code, Section 1029(a)(2). The Honorable Judge Chen also sentenced the defendant to 3 years of supervised release. Flentoil has been in custody since his arraignment and remains in custody to serve his sentence.
Cynthia Stier is the Assistant U.S. Attorney who is prosecuting the case. The prosecution is the result of a two month investigation by the IRS-CI.
(Flentoil Indictment )