Northern District of California
Press releases recorded for this federal judicial district.
Georgia Man Charged with Defrauding His Former Employer Williams Sonoma Out of More Than $10 MillionRead the Press Release
SAN FRANCISCO - A federal grand jury in San Francisco indicted Ben Thomas III today with eight counts of wire fraud and four counts of money laundering for defrauding his former employer, San Francisco-based Williams Sonoma, Inc. (WSI), announced United States Attorney Ismail J. Ramsey and IRS Criminal Investigation (IRS-CI) Acting Special Agent in Charge Michael Mosley.
According to the indictment, Thomas, 48, of Georgia, is alleged to have registered a fictitious temporary staffing company, Empire Logistics Services (Empire), that billed WSI more than $10 million for work that Empire never performed. Further, Thomas hid from WSI the fact that he founded and controlled Empire and billed WSI for Empire’s purported – but never in fact performed – services. According to the indictment, Thomas spent the proceeds of the scheme on, among other personal items, a yacht, automobiles, tickets to professional sporting events, pet cloning, a 12,000-square-foot home, and professional landscaping services for the home.
“The defendant is charged with enriching himself by cheating his employer, a publicly traded company. The U.S. Attorney’s Office is committed to rooting out fraud in this District and to ensuring that those who abuse positions of trust and authority are held accountable for their actions,” said U.S. Attorney Ramsey.
According to the indictment, from 2016 to 2023, Thomas worked as the general manager of the WSI hub and distribution facility in Braselton, Georgia. In that role, Thomas had the authority to hire temporary staffing vendors and approve payments up to $50,000 to vendors. As a WSI general manager, Thomas was prohibited from self-dealing and from billing WSI for work from a company affiliated with him. The indictment alleges that Thomas concealed from WSI the fact that he owned and controlled Empire, and that he was billing WSI via Empire for work never performed. Between 2017 and 2023, Thomas fraudulently submitted hundreds of Empire invoices to WSI, each for less than Thomas’s $50,000 approval limit. Thomas then approved WSI payment on the invoices, and Thomas caused WSI to make approximately 335 payments over six years totaling more than $10 million in a bank account Thomas controlled.
Thomas is scheduled to make his initial appearance in federal court in San Francisco on Oct. 1, 2024, before the Honorable Peter H. Kang, U.S. Magistrate Judge.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces a maximum sentence of 20 years imprisonment, and a fine of $250,000, plus restitution, for each violation of 18 U.S.C. § 1343 (wire fraud) and 10 years imprisonment, and a fine of $250,000, plus restitution, for each violation of 18 U.S.C. § 1957 (money laundering). However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Christiaan Highsmith is prosecuting the case. The prosecution is the result of an investigation by IRS-CI.
East Bay Entrepreneur Sentenced to One Year in Federal Prison for Tax EvasionRead the Press Release
OAKLAND – Salman Salman was sentenced today to one year and a day in federal prison for tax evasion. The sentence was handed down by the Honorable Haywood S. Gilliam, Jr., United States District Judge.
Salman, 47, of Rodeo, Calif., pleaded guilty to one count of tax evasion under 26 U.S.C. § 7201 on May 8, 2024. According to his plea agreement, Salman admitted he falsely underreported income that he and his wife enjoyed from three businesses he owned and operated during the course of the scheme. The businesses were The Plug Tattoo & Piercing, Inc., S&S Real Estate Investment Group, and Synergy Investment Group Ohio Inc. Further, in his plea agreement Salman acknowledged he understated the amount of distributions his companies made to him, with Salman failing to report over $3.4 million paid to him by his companies. Salman also admitted that he claimed false and overstated expenses, all of which furthered his scheme to reduce his tax obligations. In total, Salman admitted that his failure to disclose over $3.4 million in income he received from his companies for tax years 2016 through 2019 resulted in Salman underreporting capital gains and dividends subject to income tax by more than $2.4 million.
In addition to the prison term, Judge Gilliam also ordered Salman to serve a 36-month period of supervised release, which will begin after he serves his prison term, $438,247 in restitution to be paid in six months, and a fine of $7,500. Salman was ordered to surrender to begin serving his sentence on Oct. 30, 2024.
The announcement was made by United States Attorney Ismail J. Ramsey and IRS Criminal Investigation (IRS-CI) Acting Special Agent in Charge Michael Mosley of the Oakland Field Office.
Assistant U.S. Attorney Thomas Green is prosecuting this case with the assistance of Kay Konopaske and Christine Tian. The prosecution is the result of an investigation by IRS-CI.
CEO of East Bay-Based Internet Companies Sentenced to More Than Seven Years in Prison for Committing Wire FraudRead the Press Release
SAN FRANCISCO – Alan Anderson was sentenced today to 88 months in prison and ordered to pay restitution for defrauding investors by lying to them about the profitability of his internet companies, announced United States Attorney Ismail J. Ramsey and Federal Bureau of Investigation (FBI) Special Agent in Charge Robert K. Tripp. Anderson’s sentence was imposed by the Honorable Edward M. Chen, U.S. District Judge.
Anderson, 61, of Walnut Creek, pleaded guilty on Jan. 4, 2024, to two counts of wire fraud. In connection with pleading guilty, Anderson admitted that from Apr. 22, 2010, through May 2018, he was the majority shareholder and CEO of three companies: Imbee.com, a Delaware corporation based in Walnut Creek marketed as a child-friendly social media platform; Fanlala, a California corporation marketed as a service providing internet-based music streaming for children; and Fruit Punch, a California corporation marketed as providing music-streaming service for children. Anderson further admitted that he falsely claimed that the companies were either being acquired or were expanding existing partnerships or contracts with large, well-established companies to induce individuals to invest in his businesses. To further his falsehoods, and to create an appearance of legitimacy for his false claims, Anderson created false contracts, purchase orders, and other documentation that he sent to investors. Anderson created and sent these false documents to investors with the intent to deceive or cheat them.
At sentencing, Judge Chen found that Anderson began lying to investors in September 2011, that his long-running fraud spanned years, and that over the course of the scheme Anderson defrauded investors out of approximately $8.825 million.
A federal grand jury indicted Anderson on October 13, 2021, charging him with four counts of wire fraud and one count of securities fraud.
In addition to the prison term, Judge Chen also sentenced the defendant to a three-year period of supervised release and ordered that he pay restitution in an amount to be determined during a further hearing on October 10, 2024. The defendant will begin serving the prison term on January 6, 2025.
Assistant U.S. Attorneys Christiaan Highsmith and Sailaja Paidipaty are prosecuting the case with the assistance of Mark DiCenzo. The prosecution is the result of a multi-year investigation by the FBI.
Three Defendants Charged in Alleged Nationwide Multi-Million-Dollar Illegal Import and Fraudulent Distribution ConspiraciesRead the Press Release
SAN FRANCISCO – A federal grand jury indicted three defendants in connection with alleged schemes to import from China, fraudulently market, and illegally transport the hazardous chemical trichloroisocyanuric acid (TCCA), in violation of various U.S. laws and regulations.
One of the defendants, Jermoine “Jay” C. Brantley (aka Jay E. Johnson), 52, of Murrieta, Calif., was arrested Sept. 5 at his home and made an initial appearance in Los Angeles the next day. The other two defendants— Haneef Z. Saleem, 44, of New York, New York; and Brian Morris, 49, of Peoria, Ariz.—are scheduled to appear with Brantley in San Francisco before U.S. Magistrate Judge Alex G. Tse, on Sept. 12 to face the charges.
According to the 26-count indictment, filed Aug. 27 and unsealed Sept. 9, all three defendants conspired to commit wire fraud to convince customers and potential customers to buy the TCCA. In addition, all three defendants are charged with crimes related to the alleged transportation of the chemical from various U.S. ports to other destinations throughout the United States. Brantley and Saleem also are charged with conspiring to smuggle the TCCA into the United States, in violation of various laws and regulations.
The chemical at issue, TCCA, is a product commonly referred to in the swimming pool industry as chlorine. The indictment describes how, during the early 2020s, a domestic shortage of TCCA as well as an increase in the tariffs and duties applying to the importation of the chemical from China resulted in a dramatic increase in the price of TCCA in the United States. Brantley and Saleem allegedly took steps to smuggle the product into the country without paying applicable tariffs and duties that would have made the price of the product less competitive. In addition to the smuggling scheme, the indictment describes how all three defendants allegedly participated in a scheme to fraudulently market and sell the product and arranged to have the hazardous materials transported without the proper paperwork and precautions from U.S. ports to customers throughout the United States.
The Smuggling Conspiracy
The indictment alleges Brantley and Saleem avoided tariffs and duties when importing TCCA from China by supplying the wrong import codes to their brokers so that certain duties would not be assessed. At the time, under the applicable tariff schedule for goods imported into the United States, TCCA was subject to significant “anti-dumping” and “countervailing” duties. Brantley and Saleem allegedly avoided paying these anti-dumping and countervailing duties by supplying their brokers with code numbers that mis-identified the product, identifying it as “disinfectant” and “swimming pool disinfectant,” rather than as TCCA. According to the indictment, Brantley and Saleem caused 66 shipments of TCCA to be imported with codes that did not trigger the applicable tariffs and duties.
The Fraud Conspiracy
In addition to the smuggling conspiracy, the indictment describes several ways in which all three defendants allegedly lured customers into purchasing the imported TCCA by making false representations about the product, including false descriptions of the strength and efficacy of the product and its registration status with the Environmental Protection Agency (EPA). According to the indictment, defendants represented to customers and potential customers that their product contained 99 percent TCCA, when, in fact, it had been diluted with boric acid. The indictment also alleges the defendants falsely represented that they, or their products, were “registered with the EPA.” But the defendants never properly registered with the EPA to import the chemical and attempted to avoid inspections by mislabeling their product with EPA registration numbers for a different manufacturer. The indictment alleges that customers purchased more than $3.2 million in response to the defendants’ fraudulent representations.
Improper Transportation of Product
The indictment also describes how defendants allegedly violated rules pertaining to the transportation of oxidizers and hazardous materials. Defendants’ shipments failed to contain labels identifying the TCCA as a “5.1 oxidizer” and as “hazardous material.”
In sum, the defendants are charged with the following crimes and, if convicted, face the following maximum statutory penalties:
Defendant Charge Maximum Statutory Penalties (per count) All three defendants Conspiracy to Commit Wire Fraud
18 U.S.C. § 1349
(one count) 20 years’ imprisonment; $1,000,000 fine; maximum 3 years’ supervised release All three defendants Wire Fraud
18 U.S.C. § 1343
(four counts) 20 years’ imprisonment; $1,000,000 fine; 3 years’ supervised release Brantley and Saleem only Conspiracy to Smuggle Goods Into the United States
18 U.S.C. § 371
(one count) 5 years’ imprisonment; $250,000 fine; 3 years’ supervised release Brantley and Saleem only Smuggling Goods into the United States
18 U.S.C. § 545
(four counts) 20 years’ imprisonment; 3 years’ supervised release; $250,000 fine Brantley and Saleem only Entry of Goods Falsely Classified
18 U.S.C. § 541
(four counts) 2 years’ imprisonment; $250,000 fine; 1 year of supervised release Brantley and Saleem only Entry of Goods by Means of False Statements
18 U.S.C. § 542
(four counts) 2 years’ imprisonment; 1 year of supervised release; $250,000 fine All three defendants Distribution or Sale of Unregistered Pesticide
7 U.S.C. § 136j(a)(1)(A), (E) & 136l(b)(1)(B)
(two counts) 1 year of imprisonment; 1 year of supervised release; $50,000 fine All three defendants Distribution or Sale of Misbranded Pesticide
7 U.S.C. § 136j(a)(1)(A), (E) & 136l(b)(1)(B)
(two counts) 1 years of imprisonment; 1 years of supervised release; $250,000 fine All three defendants Violation of the Hazardous Substances Act
49 U.S.C. § 5124(c) & (d)
(four counts) 5 years’ imprisonment; 3 years’ supervised release; $250,000 fineAn indictment merely alleges that crimes have been committed and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.
In addition to the penalties listed above, the defendants also may be ordered to pay restitution, if appropriate. However, any sentence following conviction would be imposed by the Court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The announcement was made by U.S. Attorney Ismail J. Ramsey, U.S. Environmental Protection Agency Criminal Investigation Division (EPA-CID) Special Agent-in-Charge Kim Bahney, U.S. Department of Homeland Security Investigations (HSI) San Francisco Special Agent in Charge Tatum King, and U.S. Department of Transportation Office of the Inspector General (DOT-OIG) Western Region Special Agent in Charge Cory LeGars.
This case is being prosecuted by Assistant U.S. Attorney Barbara Valliere with assistance from Sara Slattery and Kathy Tat. This prosecution is the result of an investigation by EPA-CID, HSI, and DOT-OIG.
San Francisco Resident Sentenced to One Year in Prison for Stealing over $340,000 in Funds Intended for Low-Income FamiliesRead the Press Release
SAN FRANCISCO – Gregory Finkelson was sentenced to one year in prison for theft of government property in connection with his fraudulent receipt of hundreds of thousands of dollars in low-income housing benefits, announced United States Attorney Ismail J. Ramsey; Federal Bureau of Investigation (FBI) Special Agent in Charge Robert K. Tripp; U.S. Department of Housing and Urban Development (HUD) Office of the Inspector General (OIG) Special Agent in Charge Mark Kaminsky; and IRS Criminal Investigation (IRS-CI) Special Agent in Charge Michael Mosley of the Oakland Field Office. Finkelson’s sentence was imposed by the Honorable James Donato, United States District Judge, on September 9, 2023.
The Section 8 Certificate Program is a rent subsidy program funded by HUD and administered in San Francisco by the San Francisco Housing Authority (SFHA). The program is intended to help low- and moderate-income families afford housing, and it has income limits and other eligibility requirements that applicants must meet to qualify for assistance.
In his plea agreement, Finkelson, 64, admitted that, between approximately August 2006 and February 2020, he wrongfully claimed $341,455 in Section 8 Program subsidies by falsely reporting that he did not own his San Francisco residence, which he bought using a straw purchaser, and that he was merely an employee of a company that he in fact owned and operated out of his residence. Specifically, Finkelson admitted that he used the name of a Russian national living in Russia to purchase his San Francisco home, claiming, wrongfully, that she was his landlord and that he made rent payments to her. Finkelson also admitted he opened several bank accounts, including in the Russian national’s name, and that he used these bank accounts to conceal his use of the ill-gotten Section 8 Program subsidies. He then used the funds he fraudulently obtained to benefit himself, including by funding his business, paying his credit card bills, and making payments on a timeshare in Hawaii. His residence is now worth $2.4 million.
In a memorandum filed for the sentencing, the government noted that Finkelson continued his fraudulent conduct even after SFHA acted to terminate his Section 8 subsidies. Because of his conduct, the government argued, Finkelson deprived low-income families actually in need of housing over the entire period of his scheme. According to the government, Finkelson’s actions damaged public trust in the government’s role as a fiduciary for taxpayer dollars.
Finkelson was indicted by a federal grand jury on July 25, 2023. He pleaded guilty on May 7, 2024, to theft of government property and aiding and abetting, in violation of 18 U.S.C. §§ 641 and 2.
In addition to the one-year term of imprisonment, Judge Donato further sentenced Finkelson to a three-year period of supervision following his release from prison and ordered Finkelson to pay $341,455 in restitution, which represents the total amount he admitted he stole from the government. Finkelson was ordered to surrender into custody on September 16, 2024.
Assistant United States Attorneys Christiaan Highsmith and Kevin Yeh are prosecuting the case with the assistance of Claudia Hyslop. The prosecution is the result of a joint investigation by the FBI, HUD OIG, and IRS-CI, with assistance from SFHA.
Five Members of Salinas-Based “Murder Squad” Sentenced to A Combined 161 Years in Prison for 2015-2018 Killing SpreeRead the Press Release
SAN JOSE – Five members of the self-proclaimed “Murder Squad,” a crew of Salinas-based Norteño criminal street gang members falling under the Monterey County Regiment Enterprise affiliated with the Nuestra Familia prison gang, were sentenced to a combined 161 years in prison for racketeering conspiracy and conspiracy to commit murder in aid of racketeering, announced United States Attorney Ismail J. Ramsey and Homeland Security Investigations (HSI) Special Agent in Charge Tatum King. The sentences were handed down by the Hon. Beth Labson Freeman, U.S. District Judge.
The “Murder Squad” conducted more than a dozen “hunts,” tracking and shooting dozens of Salinas residents whom they perceived to be members of a rival gang for reasons as vague as they were Hispanic, bald, or wearing blue. The squad would often use military-style tactics, traveling in a convoy of vehicles with a designated shooter vehicle and a designated security/spotter vehicle, all of which were in constant communication via conference call. The security/spotter vehicles would patrol the streets, searching for potential targets. Once a target or targets were spotted, the security/spotter vehicle would transmit the location so that the shooters in the shooter vehicle could drive up, exit, fire at the victims until their magazines were empty, and speed away. The security/spotter vehicle would follow behind, ready to distract or intercept law enforcement and allow the shooters to escape.
Between 2015 and 2018, 11 people were killed during these hunts. Another 17 people were shot at but survived. Most of the victims were not actually members of a rival gang. Some of the victims were not the intended target at all but were nevertheless hit in the crossfire. Several of the murders began when the members of the “Murder Squad” were gathered at a house to remember a recently deceased friend or loved one, then decided to go hunting as a way to commemorate the decedent’s memory and/or lift their spirits. Each additional “body” increased a defendant’s status and prestige within the enterprise.
“The ‘Murder Squad’ killed for sport, terrorizing the city of Salinas and forever altering the lives of so many innocent members of our community,” said U.S. Attorney Ramsey. “As described in the court filings, their conduct is reprehensible. Thanks to the strong collaboration between federal and state law enforcement over the course of many years, these men will rightfully spend the next few decades of their lives in prison.”
“This sentencing is a significant blow to members of the Norteño and CRIP criminal street gangs responsible for the ruthless murder of at least 11 individuals, and attempted murder of 17 individuals, in the City of Salinas,” said HSI San Francisco Special Agent in Charge Tatum King. “The indiscriminate killing demonstrates why HSI’s mission to protect public safety is so critical and illustrates our agents’ commitment to ensuring those that engage in senseless murder will be held accountable. We appreciate the work of HSI agents together with Salinas Police Department, the U.S. Attorney’s Office Northern District of California, FBI, and the Monterey County District Attorney’s Office in bringing these murderers to justice.”
All five defendants pleaded guilty on May 7, 2024, to one count of racketeering conspiracy in violation of 8 U.S.C. § 1962(d) and one count of conspiracy to murder in aid of racketeering in violation of 18 U.S.C. § 1959(a)(5).
Siaki Tavale, 27, also known as “Shocky” or “Gunner,” was sentenced to 41 years in prison; John Magat, 37, also known as “Romeo,” was sentenced to 37 years in prison; Anthony Valdez, 27, also known as “Hitter” or “Tony Boronda,” was sentenced to 31 years in prison; Anelu Tavale, 28, also known as “Angel,” was sentenced to 27 years in prison; and Mark Anthony Garcia, 33, also known as “Tony from Santa Rita,” was sentenced to 25 years in prison. Each of the defendants also was ordered to serve a five-year term of supervised release that will begin upon completion of the defendant’s prison term.
The defendants were immediately remanded into custody to begin serving their sentences.
Assistant U.S. Attorneys Mari Overbeck and George Hageman are prosecuting the case with the assistance of Nina Burney. The prosecution is the result of an investigation by HSI and the Salinas Police Department.
Man Arrested for Making Threats to Elected OfficialsRead the Press Release
SAN JOSE – A Palo Alto man was arrested today for sending threats of violence to a United States Congresswoman and a Florida State Representative. The defendant, Aaditya Chand was arrested earlier today.
According to the criminal complaint unsealed earlier today, on Feb. 15, 2024, Chand, 22, allegedly used an Instagram account to send direct messages to a member of the U.S. House of Representatives (identified in the complaint as “Victim 1”). The messages stated, “I’m gonna shoot up ur office tomorrow u Palestinian scum,” and “Get ready.” The complaint alleges that the messages were received by Victim 1’s staff in Washington, D.C.
In addition, Chand allegedly used his Instagram account to send another direct message over Instagram to a Florida State Representative (identified in the complaint as Victim 2). Federal agents allegedly viewed Chand’s Instagram messages to the Florida representative during an interview of the defendant. The threatening Instagram message allegedly states, “I’m gonna bring a gun to ur office tomorrow and shoot u and ur staff.”
The complaint charges Chand with a felony, transmitting in interstate or foreign commerce a communication containing a threat to injure a person, in violation of 18 U.S.C. § 875(c).
A criminal complaint merely alleges that crimes have been committed and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. Chand is scheduled to make his initial federal court appearance later today before United States Magistrate Judge Susan van Keulen. If convicted, Chand faces a maximum statutory sentence of five years in prison, up to three years of supervised release, a fine of up to $250,000, and a mandatory special assessment. In addition, the defendant may be ordered to pay restitution if appropriate. However, any sentence following conviction would be imposed by the Court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The announcement was made by U.S. Attorney Ismail Ramsey and United States Capitol Police Chief of Police J. Thomas Manger.
This case is being prosecuted by Special Assistant United States Attorney Johnny James, with assistance from Susan Kreider. This prosecution is the result of an investigation by the United States Capitol Police.
United States Attorney Announces New Conviction Integrity CommitteeRead the Press Release
SAN FRANCISCO – United States Attorney Ismail Ramsey today announced that the United States Attorney’s Office is establishing a new committee to review innocence claims brought by defendants convicted in the Northern District of California. The Conviction Integrity Committee (Committee) will review and consider claims of factual innocence brought by defendants who were convicted in the Northern District of California.
The purpose of the Committee is to promote fairness and integrity at every stage of a criminal prosecution. It is designed to ensure that credible claims of factual innocence are investigated and addressed. Assistant United States Attorney Jeffrey Bornstein, who also is a Senior Litigation Counsel for the Northern District of California, will Chair the Committee whose members will include the United States Attorney, the First Assistant United States Attorney, and the Executive Assistant United States Attorney. Additional members of the United States Attorney’s Office may participate in review of certain claims filed under the new program depending upon circumstances described in the policy.
In announcing this new program, United States Attorney Ramsey said that he and his office “are committed to ensure that any person who is actually innocent is not the subject of a wrongful conviction.”
The new process is partly modeled on committees that have been formed in other United States Attorney’s Offices including for the Southern District of New York, the Central District of California, and the District of Columbia. In the Northern District of California policy, decisions—including decisions on the merits and whether to reinvestigate a claim of actual innocence—are based only on an independent assessment of the facts and the law; factors such as a defendant’s choice of counsel, media coverage, or political influence play no role in the consideration of cases presented to the Committee.
An application to submit actual innocence claims to the Committee has been placed on the United States Attorney’s Office for the Northern District of California’s website. The process is afforded to all convicted persons regardless of the nature of the offense, whether there was a trial or plea bargain, and whether they are represented by an attorney. Priority may be given to convicted persons who are currently incarcerated or on parole or supervised release.
San Francisco Tow Company Operator Charged in Second Insurance Fraud CaseRead the Press Release
SAN FRANCISCO – Jose Vicente Badillo, Kirill Afanasyev, Jason Naraja, and Jaime Respicio have been charged in an indictment with various crimes related to two schemes to defraud auto insurance companies, announced United States Attorney Ismail J. Ramsey; FBI Special Agent in Charge Robert K. Tripp; and IRS Criminal Investigation (IRS-CI) Acting Special Agent in Charge Michael Mosley of the Oakland Field Office. The case has been assigned to the Hon. James Donato, United States District Judge.
According to an indictment returned by a federal grand jury on August 20, 2024, Afanasyev, 36, Badillo, 28, both of San Francisco, and Respicio, 38, of Pleasant Hill, California, conspired to defraud an auto insurance company by submitting a fraudulent insurance claim on a wrecked car that Afanasyev purchased in May 2019. The Indictment alleges that, when Afanasyev bought the car, it was undrivable, with significant front-end damage. Nevertheless, the Indictment says, Respicio obtained an insurance policy on, and later took title to, the car before Afanasyev, posing as Respicio, falsely reported to the insurance company in August 2019 that Respicio had been in a single-car accident in it in San Francisco. The Indictment further alleges that Afanasyev made materially false statements and misrepresentations to the insurance company, after which the insurance company processed and approved the claim and sent Respicio an insurance reimbursement check for $47,856.34. The Indictment alleges that Badillo participated in this scheme to defraud by agreeing to falsely document that his towing company had towed the wrecked car from the purported accident location.
The Indictment alleges that Afanasyev, Badillo, and Naraja, 37, of Hayward, California, engaged in a second conspiracy and scheme to defraud another insurance company by submitting a fraudulent insurance claim regarding an accident involving multiple vehicles that had been staged by Badillo in San Mateo County. Specifically, the Indictment alleges that Badillo and Afanasyev planned the staged accident in which Badillo loaded a vehicle carrier with four vehicles (several of which were inoperable or had pre-existing damage) and purposefully drove them off the road on Guadalupe Canyon Parkway in San Mateo County in August 2019. The Indictment alleges that, after Badillo reported this “accident” to his insurance company, Badillo, Afanasyev, Naraja, and another individual all made false or misleading statements to an insurance company representative. The Indictment alleges that the insurance company ultimately denied Badillo’s claim as fraudulent but nevertheless paid one of Badillo’s towing companies $5,210 for its recovery, towing, and storage of vehicles involved in the staged accident.
The Indictment also alleges that, at the time of the offenses in 2019, Badillo owned and/or controlled at least two companies engaged in the business of towing vehicles: Jose’s Towing, LLC, and Auto Towing, LLC, both of which operated out of San Francisco.
In the first conspiracy and scheme to defraud, Afanasyev, Badillo, and Respicio are charged with one count each of (i) conspiracy to commit mail fraud and wire fraud, in violation of 18 U.S.C. § 1349; (ii) mail fraud, in violation of 18 U.S.C. §§ 1341 and 2; and (iii) wire fraud, in violation of 18 U.S.C. §§ 1343 and 2. Afanasyev and Respicio are also charged with one count of money laundering, in violation of 18 U.S.C. §§ 1957 and 2.
In the second conspiracy and scheme to defraud, Afanasyev, Badillo, and Naraja are charged with (i) one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349; and (ii) four counts of wire fraud, in violation of 18 U.S.C. §§ 1343 and 2.
Naraja and Respicio were arrested in Hayward and Pleasant Hill, respectively, on August 27, 2024, and released on $50,000 bonds at their initial appearances on August 28, 2024. Naraja is next scheduled to appear in court on August 29, 2024, at 10:30 a.m., before the Hon. Lisa J. Cisneros for arraignment and identification of counsel. Respicio is next scheduled to appear in court on September 5, 2024, at 10:30 a.m., before the Hon. Alex G. Tse for arraignment and identification of counsel. Badillo was previously arrested and made his initial appearance in another insurance fraud case on August 8, 2024. He is scheduled to appear before the Hon. Lisa J. Cisneros for arraignment and identification of counsel in both cases on August 30, 2024, at 10:30 a.m. Afanasyev’s initial appearance and arraignment has been scheduled for September 9, 2024, at 10:30 a.m. before the Hon. Alex G. Tse.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Afanasyev, Badillo, and Respicio each face a maximum sentence of 20 years in prison, and a fine of $250,000 or twice the gross gain or loss, whichever is greater, plus restitution, if appropriate, on each of Counts 1 through 3, which charge mail fraud, wire fraud, and conspiracy to commit the same, in violation of 18 U.S.C. §§ 1341, 1343, 1349, and 2. Afanasyev and Respicio face a maximum sentence of 10 years in prison, and a fine of $250,000 or twice the amount of criminally derived property involved in the transaction, whichever is greater, plus restitution, if appropriate, on Count 4, which charges money laundering, in violation of 18 U.S.C. §§ 1957 and 2. Similarly, Afanasyev, Badillo, and Naraja each face a maximum sentence of 20 years in prison, and a fine of $250,000 or twice the gross gain or loss, whichever is greater, plus restitution, if appropriate, on each of Counts 5 through 9, which charge wire fraud and conspiracy to commit the same, in violation of 18 U.S.C. §§ 1343, 1349, and 2. The court also may order an additional term of supervised release to begin after any prison term as part of the sentence for any or all of the defendants. 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.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
Assistant U.S. Attorneys Kyle F. Waldinger and Galen A. Phillips are prosecuting the case with the assistance of Amala James and Carolyn Jusay Caparas. The prosecution is the result of a lengthy investigation by the FBI and IRS-CI. The U.S. Attorney’s Office, the FBI, and IRS-CI appreciate the assistance and support of the San Francisco Police Department in this insurance fraud investigation.
Former Real Estate Executive Sentenced to 14 Months in Prison for Defrauding Williams SonomaRead the Press Release
SAN FRANCISCO – Augusto Alizo was sentenced today to 14 months in prison for charges related to his role in a multi-million-dollar fraud scheme, announced United States Attorney Ismail J. Ramsey and IRS Criminal Investigation (IRS-CI) Acting Special Agent in Charge Michael Mosley. The sentence was handed down by the Hon. Richard Seeborg, Chief U.S. District Judge.
On February 27, 2024, Alizo, 52, of Weston, Florida, admitted he conspired with two co-defendants—a Vice President at Williams Sonoma, Inc. (WSI), and Kourosh Mirmehdi, Alizo’s direct report at the global logistics company where they both worked—to divert and steal more than $4.1 million in commercial real estate broker commission rebates that should have gone to WSI.
WSI is a home-goods retailer headquartered in San Francisco that operates brands such as Williams Sonoma, Pottery Barn, and West Elm. The global logistics company where Alizo worked helped clients secure commercial real estate, including large commercial warehouses. In his plea agreement, Alizo admitted that he concealed from the global logistics company that co-defendant Mirmehdi was helping WSI obtain commercial warehouse space. Alizo also admitted that he and his co-defendants concealed from WSI and the global logistics company that he, Mirmehdi, and the conspiring Vice President at WSI pocketed real estate broker commissions rebates that should have gone to WSI.
As part of his plea agreement, Alizo admitted that from 2020 through 2022, co-defendant Mirmehdi was working to secure commercial warehouse space for WSI in Georgia, New Jersey, Arizona, and California. Alizo hid this from their employer. Alizo also hid from their employer the fact that his co-defendants were negotiating with real estate brokers to obtain broker commission rebates that should have gone to WSI. These broker commissions rebates were paid to a shell company owned by the conspiring WSI Vice President, and then distributed to private bank accounts controlled by Alizo and his co-conspirators.
Alizo also admitted in his plea agreement that he knew co-defendant Mirmehdi was holding himself out to real estate brokers as an employee of the global logistics company and that in negotiating with real estate brokers Mirmehdi was benefitting from status and bargaining power due to his position and title at the global logistics company. Alizo further admitted that he knew Mirmehdi was falsely and deceptively representing that WSI was the global logistics company’s client when in fact it was not. Alizo concealed this deception from his and Mirmehdi’s employer.
As part of his plea agreement, Alizo admitted that he acted with the intent to deceive and cheat both his employer and WSI to further the scheme and conspiracy to defraud so that he and his co-defendants could obtain broker commissions rebates that should have gone to WSI. Alizo admitted that he received approximately 25% of the broker commissions and rebates obtained as part of the conspiracy. Alizo admitted that the conspirators obtained a total of $4,110,323.81 and that he personally obtained $965,526.51.
In a memorandum filed for the sentencing, the government argued that Alizo’s involvement in the fraud conspiracy was critical. Rather than using his authority as a corporate executive to stop the fraud before it began, Alizo gave his direct report, co-defendant Mirmehdi, the green light to engage in fraud, identified how the conspirators would conceal the fraud, and ensured the fraud would not be discovered by his employer. As a result, Alizo pocketed nearly $1 million in fraud proceeds.
Alizo was indicted by a federal grand jury on April 11, 2023. He was charged with one count of wire fraud conspiracy, in violation of 18 U.S.C. § 1349; four counts of wire fraud, in violation of 18 U.S.C. § 1343; and one count of money laundering conspiracy, in violation of 18 U.S.C § 1956(h). Under the plea agreement, Alizo pleaded guilty to the wire fraud conspiracy.
In addition to the 14-month term of imprisonment, Chief Judge Seeborg further sentenced the defendant to a two-year period of supervision following his release from prison and ordered Alizo to pay $965,526.51 in restitution to Williams Sonoma. Alizo was ordered to surrender into custody on December 2, 2024.
Assistant U.S. Attorney Christiaan Highsmith is prosecuting the case with the assistance of Sara Slattery. The prosecution is the result of an investigation by the IRS-CI.
San Jose Man Sentenced to Nearly Three Years for Defrauding Investors of $4.7 MillionRead the Press Release
SAN FRANCISCO – Joon Woo Kim was sentenced today to 33-months in prison for two fraud schemes – the first, a scheme to mislead investors to contribute millions to an electric vehicle investment fund he formed in San Francisco, and the second, a scheme to obtain multi-million dollar business loans by lying to a bank – announced United States Attorney Ismail J. Ramsey and FBI Special Agent in Charge Robert K. Tripp. The sentence was handed down by United States District Judge James Donato.
On March 4, 2024, Kim, 58, of San Jose, Calif., pleaded guilty to two fraud charges against him, one count of committing wire fraud and the other for making false statements to a bank to obtain a loan. The first fraud scheme occurred from June 2015 through March 2022 and involved creating and running an investment fund that Kim named the M5 Doctors Fund. Kim admitted in his plea agreement that he ran the M5 Doctors Fund, along with a separate management entity M5 Management, with the intent to deceive investors. Kim represented to investors that he would invest the funds of the M5 Doctors Fund in securities of electric vehicle companies, including Tesla, and would always invest only in publicly traded securities. Instead, Kim transferred nearly all the millions invested by investors in the M5 Doctors Fund into a failing private company called CKR Enterprise, Inc. (CKR). CKR was a wholesale food distribution company operated by Kim and his wife and owned by them, among others.
Kim defrauded investors out of $4,690,000 due to his transfer of the M5 Doctors Fund assets to CKR. While this was occurring, Kim continued to mislead investors by sending quarterly reports to them suggesting their money was invested in public securities such as Tesla.
Kim engaged in a second fraud scheme in which he defrauded Hanmi Bank by applying for two loans for CKR, a $1,300,000 line of credit and a $3,200,000 business loan. Kim admitted the bank loan application contained materially false and fraudulent representations. Based on those representations, Kim obtained the proceeds of these loans.
In a memorandum filed for the sentencing hearing, the government argued that Kim gained the trust of his investors due to his impressive profile, which included multiple Ivy League degrees and extensive investment experience. Many M5 Doctors Fund investors were non-profit institutions that could invest only in public securities and would not have invested with Kim if they knew the truth, that is, that Kim transferred their money to a private company owned by Kim and his wife. The government pointed out that while Kim drained this fund, he continued to deceive his investors into believing the fund still had money that it no longer had.
A federal grand jury charged Kim on June 27, 2023, with multiple counts of wire fraud, bank fraud, and making a false statement to a bank. In his plea agreement, Kim pleaded guilty to one count of wire fraud, in violation of 18 U.S.C. § 1343, and one count of making a false statement to a bank, in violation of 18 U.S.C. § 1014.
In addition to the 33-month term of imprisonment, U.S. District Judge James Donato sentenced the defendant to a three-year period of supervision following his release from prison and ordered Kim to pay more than $4.7 million in restitution to his victims. Kim was ordered as one condition of his supervised release to make at least three 30-minute presentations to university MBA classes to inform students about the consequences of engaging in fraudulent business practices and behaviors.
Kim was ordered to surrender into custody on September 3, 2024.
Chris Highsmith is the Assistant U.S. Attorney prosecuting the case, with the assistance of Tina Rosenbaum and Aarian Beti and Victim Specialist Alicia Guevara. The prosecution is the result of an investigation by the FBI.
Antioch Police Officer Convicted by Federal Jury of Conspiracy and Wire FraudRead the Press Release
OAKLAND – A federal jury convicted police officer Morteza Amiri of wire fraud and conspiracy to commit wire fraud in a scheme to obtain pay raises from the City of Antioch Police Department for a university degree he paid someone else to obtain in his name, announced United States Attorney Ismail J. Ramsey and FBI San Francisco Special Agent in Charge Robert K. Tripp. The felony verdicts follow a four-day trial before United States Senior District Judge Jeffrey S. White. Amiri is the sixth officer to be convicted in the conspiracy to commit wire fraud, along with Patrick Berhan, Amanda Theodosy a/k/a Nash, Samantha Peterson, Ernesto Mejia-Orozco, and Brauli Rodriguez Jalapa.
“We expect integrity and honesty from every police officer, every day, in the police departments across this country,” said U.S. Attorney Ismail Ramsey. “Amiri failed to uphold these basic responsibilities, and a federal jury has convicted him of defrauding his employer, the Antioch Police Department. He, along with the other officers he conspired with, now face the consequences of violating the rule of law that they swore to uphold.”
“Amiri engaged in a calculated conspiracy to defraud his police department of taxpayer funds. His actions were a violation of the law and a grave betrayal of public trust,” said FBI Special Agent in Charge Robert Tripp. “Amiri and his co-conspirators’ deception has no place in law enforcement. With this conviction, he now faces the consequences of his actions.”
Amiri, 33, was employed as a Police Officer with the Antioch Police Department. At trial, the evidence presented showed that the City of Antioch and City of Pittsburg’s Police Departments offered reimbursements toward higher education tuition and expenses, along with pay raises and other financial incentives upon completion of a degree. However, instead of completing higher education coursework on their own, Amiri and his co-conspirators hired someone to complete entire courses on their behalf at an online university to secure a bachelor’s degree in Criminal Justice. Amiri and his co-conspirators then represented they had taken those courses and earned the degrees from the university when requesting reimbursements and financial incentives from their police department employers, the City of Antioch and the City of Pittsburg. They were in turn paid additional financial incentives, calculated as percentages of their salaries, while they remained employed by their police departments.
In a span of two years, the conspiracy included numerous other officers and former officers, including Berhan (Pittsburg PD), Amiri (Antioch PD), Theodosy a/k/a Nash (Pittsburg PD), Peterson (Antioch PD), Mejia-Orozco (Pittsburg PD), and Rodriguez Jalapa (formerly Pittsburg PD).
The evidence at trial showed that Amiri texted the person who took his classes for him, writing among other things: “can i hire you [ ] to do my … classes? ill pay you per class”; “don’t tell a soul about me hiring you for this. we can’t afford it getting leaked and me losing my job”; “if i submit my request for the degree on time by the end [ ] of the month i can coordinate my raise in a timely manner”; and “I’m gonna rush order my degree to get my pay raise jump started.”
On the basis of courses taken by this person, Amiri “earned” a bachelor’s degree in Criminal Justice. Amiri applied for and thereafter received financial incentives from the City of Antioch for having completed university courses and earning a bachelor’s degree.
The jury convicted Amiri of one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349, and one count of wire fraud, in violation of 18 U.S.C. § 1343.
U.S. Senior District Judge Jeffrey S. White scheduled Amiri’s sentencing for November 12, 2024. Each of the two counts of conviction carries a maximum sentence of 20 years in prison. The Court may also order a fine, restitution, and supervision upon release from prison as part of any sentence. 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.
A federal grand jury in San Francisco returned multiple indictments on August 16, 2023, that collectively charged ten current and former officers and employees from the Antioch and Pittsburg police departments with federal crimes. Amiri is the last officer to be convicted in the conspiracy to commit wire fraud case.
Amiri is scheduled for trial in another related case in February 2025.
Here is the status of the cases:
Case Number
Statute(s)
Defendant
(Bold: multiple case numbers)
Status
23-cr-00264
18 U.S.C. §§ 1349 (Conspiracy to Commit Wire Fraud; 1343 (Wire Fraud)
Patrick Berhan
Pleaded guilty 3/26/24, sentencing set for 9/3/24
Morteza Amiri
Convicted at trial 8/8/24, sentencing set for 11/12/24
Amanda Theodosy a/k/a Nash
Pleaded guilty 7/30/24, sentencing set for 11/5/24
Samantha Peterson
Pleaded guilty 1/9/24, sentenced 4/23/24
Ernesto Mejia-Orozco
Pleaded guilty 6/11/24, sentencing set for 9/17/24
Brauli Rodriguez Jalapa
Pleaded guilty 6/25/24, sentencing set for 10/22/24
23-cr-00267
18 U.S.C. §§ 1519 (Destruction, Alteration, and Falsification of Records in Federal Investigations); 1512(c)(2) (Obstruction of Official Proceedings); 242 (Deprivation of Rights Under Color of Law)
Timothy Manly Williams
Pending
23-cr-00268
21 U.S.C. §§ 846 (Conspiracy to Distribute and Possess with Intent to Distribute Anabolic Steroids), 841(a)(1), and (b)(1)(E)(i) (Possession with Intent to Distribute Anabolic Steroids)
Daniel Harris
Status set for 8/13/24
21 U.S.C. §§ 846, 841(a)(1), and (b)(1)(E)(i) (Conspiracy to Distribute and Possess with Intent to Distribute Anabolic Steroids);
18 U.S.C. § 1519 (Destruction, Alteration, and Falsification of Records in Federal Investigations)
Devon Wenger
23-cr-00269
18 U.S.C. §§ 241 (Conspiracy Against Rights), 242 (Deprivation of Rights Under Color of Law); § 1519 (Destruction, Alteration, and Falsification of Records in Federal Investigations)
Morteza Amiri
Trial set for 2/18/25
18 U.S.C. §§ 241 (Conspiracy Against Rights), 242 (Deprivation of Rights Under Color of Law)
Eric Rombough
18 U.S.C. §§ 241 (Conspiracy Against Rights), 242 (Deprivation of Rights Under Color of Law)
Devon Wenger
24-cr-00157
21 U.S.C. §§ 841(a)(1) and (b)(1)(E)(i) (Possession with Intent to Distribute Anabolic Steroids)
Patrick Berhan
Pleaded guilty 3/26/24, sentencing set for 9/3/24
This prosecution is the result of an investigation by the FBI and the Office of the Contra Costa County District Attorney.
San Francisco Tow Company Operator Charged with Insurance Fraud and Money LaunderingRead the Press Release
SAN FRANCISCO – Jose Vicente Badillo and Jessica Elizabeth Najarro appeared in federal court today to face mail fraud, wire fraud, and money laundering charges related to a scheme to defraud an auto insurance company, announced United States Attorney Ismail J. Ramsey; FBI Special Agent in Charge Robert K. Tripp; and IRS Criminal Investigation (CI) Acting Special Agent in Charge Michael Mosley of the Oakland Field Office. The case has been assigned to the Hon. Rita F. Lin, United States District Judge.
According to an indictment returned by a federal grand jury on July 9, 2024, Badillo, 28, and Najarro, 30, both of San Francisco, conspired to defraud an insurance company by submitting a fraudulent insurance claim on a wrecked car that Badillo purchased in June 2019. The indictment alleges that, when Badillo bought the car, it was undrivable, with severe front-end damage and a non-functioning engine. Nevertheless, the indictment says, Najarro obtained an insurance policy on, and later took title to, the car before falsely reporting to the insurance company in July 2019 that she had been in a single-car accident in it in San Francisco. The indictment further alleges that Najarro spoke with, and made materially false statements and misrepresentations to, an insurance representative in another state, after which the insurance company processed and approved her claim and sent her an insurance reimbursement check for $34,037.48. The indictment alleges that the full amount of the insurance reimbursement check was deposited a few days later into a Wells Fargo Bank account controlled by Badillo.
The indictment also alleges that, at the time of the offenses in 2019, Badillo owned and/or controlled at least two companies engaged in the business of towing vehicles: Jose’s Towing, LLC, and Auto Towing, LLC, both of which operated out of San Francisco.
Both defendants are charged with one count each of (i) conspiracy to commit mail and wire fraud, in violation of 18 U.S.C. § 1349; (ii) mail fraud, in violation of 18 U.S.C. §§ 1341 and 2; (iii) wire fraud, in violation of 18 U.S.C. §§ 1343 and 2; and (iv) money laundering, in violation of 18 U.S.C. §§ 1957 and 2.
Badillo and Najarro were arrested in San Francisco on August 8, 2024, and released on a $50,000 bond at their initial appearances later that day. Both defendants are next scheduled to appear in court on August 12, 2024, at 10:30 a.m., before the Hon. Lisa J. Cisneros for arraignment and identification of counsel.
An indictment merely alleges that crimes have been committed, and both defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Badillo and Najarro each face a maximum sentence of 20 years in prison, and a fine of $250,000 or twice the gross gain or loss, whichever is greater, plus restitution, if appropriate, on each of Counts 1 through 3, which charge mail fraud, wire fraud, and conspiracy to commit the same, in violation of 18 U.S.C. §§ 1341, 1343, 1349, and 2. They face a maximum sentence of 10 years in prison, and a fine of $250,000 or twice the amount of criminally derived property involved in the transaction, whichever is greater, plus restitution, if appropriate, on Count 4, which charges money laundering, in violation of 18 U.S.C. §§ 1957 and 2. The court also may order an additional term of supervised release to begin after any prison term as part of the sentence for either or both defendants. 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.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
Assistant U.S. Attorneys Kyle F. Waldinger and Galen A. Phillips are prosecuting the case with the assistance of Amala James and Carolyn Jusay Caparas. The prosecution is the result of a lengthy investigation by the FBI and IRS CI.
East Bay Man Charged with Illegally Smuggling Tropical FishRead the Press Release
SAN FRANCISCO - A federal grand jury in San Francisco has indicted Futseng “Dale” Chen and his company, Sealogic International, Inc. (Sealogic), on charges of smuggling and violations of the Lacey Act, announced United States Attorney Ismail J. Ramsey and United States Fish & Wildlife Service Special Agent in Charge Manisa Kung.
According to the indictment, Chen, 53, of Hayward, California, and Sealogic are charged with knowingly filing false and fraudulent export records and documents and intentionally failing to file required export documents for its shipments of live tropical fish from the United States to buyers in Asia. Sealogic is a Hayward-based tropical fish importer and exporter, and Chen is the owner and chief executive of Sealogic.
As alleged in the indictment, beginning in 2020, Chen and Sealogic knowingly failed to properly declare to U.S. Fish & Wildlife Service the shipments of tropical fish being exported to a foreign buyer in Hong Kong. The indictment further charges that at other times Chen and Sealogic filed or caused to be filed export declarations with the U.S. Fish & Wildlife Service that were knowingly false. Export declarations are required by law to ensure that wildlife is properly and safely imported into and exported out of the United States and to ensure that the U.S. Fish & Wildlife Service can inspect the cargoes and collect appropriate export duties and fees.
Chen was arrested today and made his initial appearance in San Francisco federal court before United States Magistrate Lisa J. Cisneros. Chen was released on bond and ordered to appear on September 13, 2024, at 11 a.m. before United States District Judge Susan Illston.
An indictment merely alleges that crimes have been committed, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt. If convicted of smuggling goods, in violation of 18 U.S.C. § 554(a), Chen faces a maximum sentence of 10 years imprisonment, and if convicted of false labeling under the Lacey Act, in violation of 18 U.S.C. § 3372(d)(2), he faces a maximum sentence of five years imprisonment. Additionally, a violation of each statute carries a maximum fine of $250,000 and three years of supervised release, plus restitution and forfeiture. For a conviction under either charge, Sealogic faces a maximum fine of $250,000 and a three year period of probation, plus restitution and forfeiture. 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.
David Ward is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Kathy Tat. The prosecution is the result of a three-year investigation by the U.S. Fish & Wildlife Service, Office of Law Enforcement; Homeland Security Investigations; the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement; and with the assistance of U.S. Customs and Border Protection.
Real Estate Professional Pleads Guilty to $55 Million Mortgage Fraud ConspiracyRead the Press Release
SAN FRANCISCO – Tjoman Buditaslim pleaded guilty in federal court in San Francisco yesterday to wire fraud conspiracy, announced United States Attorney Ismail J. Ramsey; Department of Housing and Urban Development, Office of Inspector General (HUD-OIG), Western Region Special Agent-in-Charge Mark Kaminsky; U.S. Postal Inspection Service Inspector-in-Charge Steve Sherwood; and Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG), Western Region Special Agent-in-Charge Herminia Neblina.
In his plea agreement, Buditaslim, 52, of Daly City, California, admitted that from 2018 through 2022 he conspired with others—including Jose Tellez, Jose de Jesus Martinez, and Travis Holasek, all of whom previously pleaded guilty—to originate 102 home mortgage loans worth more than $55 million based on false and fraudulent loan application information, in violation of 18 U.S.C. § 1349. Buditaslim admitted he worked with his co-conspirators to create fraudulent documents—including judicial divorce decrees, alimony/child supports checks, bank statements, and loan applications—and submitted those documents to multiple loan companies, which relied on falsely inflated income information in the fraudulent documents to extend mortgages. Buditaslim also admitted that many of the mortgage loans were insured by the Federal Housing Administration (“FHA”), and he admitted that the FHA lost approximately $486,484.38 to keep some of the fraudulent loans from going into foreclosure.
Tellez, 27, of San Jose, pleaded guilty on July 24, 2024, to conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349. Tellez admitted in his plea agreement that, from 2019 through 2022, he worked as a loan officer at a mortgage company, where his job was to receive home mortgage loan applications and supporting documentation to determine if applicants qualified for mortgages based on his employer’s and FHA rules and guidelines. He also admitted that, as part of the conspiracy, he helped originate approximately 30 home mortgage loans worth more than $17 million based on what he knew to be false and fraudulent income information in loan applications submitted by Buditaslim and others working with him. He also admitted that he knew he was required to stop and flag applications that contained false and fraudulent representations about income, but that he instead knowingly assisted in originating and funding the fraudulent loans and that he earned a commission on each of the 30 fraudulent loans he helped originated. Finally, Tellez admitted that many of the mortgage loans he helped originate were insured by the FHA, which he admitted lost approximately $265,457 to keep some of the fraudulent loans from going into foreclosure.
Martinez, 59, of Daly City, also pleaded guilty on July 24, 2024, to conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349. In his plea agreement, Martinez admitted that, from 2018 through 2022, he worked as a licensed real estate agent representing buyers looking to purchase homes. Martinez further admitted that, to earn commission payments for himself, he referred clients he knew would not otherwise qualify for home mortgage loans to Buditaslim, who he knew would qualify the clients for home mortgage loans based on false and fraudulent loan application materials and information. Ultimately, Martinez admitted that as a result of his involvement in the conspiracy, his clients fraudulently received 49 loans worth a total of approximately $27.7 million for which he earned nearly $590,000 in real estate broker commissions. Finally, Martinez admitted that many of the mortgage loans his clients obtained as part of this scheme were insured by the FHA, which he admitted lost approximately $265,457 to keep some of the fraudulent loans from going into foreclosure.
“These defendants used their professional knowledge of the mortgage industry to perpetrate a fraud on unsophisticated home buyers, funneling these victims into loans for which they were not qualified,” said U.S. Attorney Ismail J. Ramsey. “My office is committed to protecting all victims of fraud, whether federal agencies, Northern California residents, or—as happened here—both.”
“The defendants took advantage of their knowledge and training in the mortgage industry to circumvent the rules and abused the positions of trust they held as real estate professionals and gatekeepers of FHA-insured loans in order to line their own pockets,” said Western Region Special Agent-in-Charge Mark Kaminsky with the U.S. Department of Housing and Urban Development, Office of Inspector General. “They created and passed false documents to qualify individuals unaware of their schemes for loans those individuals would not have otherwise qualified for. HUD OIG will continue to work with its prosecutorial and law enforcement partners to vigorously pursue those who seek to profit by abusing HUD-funded programs.”
“FHFA OIG will vigorously investigate criminal offenses that impact the integrity of the residential mortgage market. In this case, a loan officer and real estate broker each had a duty to conduct business honestly but instead chose to engage in mortgage fraud, and some of those loans were later sold in mortgage-backed securities,” said Herminia Neblina, Special-Agent-in-Charge of FHFA-OIG’s Western Region. “We are proud to have partnered with our colleagues and the U.S. Attorney’s Office in the effort to prosecute these financial criminals.”
Buditaslim, Tellez, and Martinez, and Holasek, 51, of San Francisco, were originally indicted by a federal grand jury on November 7, 2023. All four defendants were charged with conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349. All of the defendants were also charged with multiple counts of wire fraud, in violation of 18 U.S.C. § 1343: Buditaslim and Tellez were each charged with five counts of wire fraud; Holasek was charged with four counts of wire fraud; and Martinez was charged with three counts of wire fraud. Buditaslim, Holasek, and Martinez were also each charged with one count of aggravated identity theft, in violation of 18 U.S.C. § 1028A(a)(1).
Buditaslim, Tellez, and Martinez are scheduled to be sentenced on October 30, 2024, in San Francisco by the Honorable Charles R. Breyer, Senior U.S. District Court Judge. They each face a maximum statutory penalty of 20 years in prison and a fine of $250,000 or twice the gross gain or loss from the crime, plus restitution, following their wire fraud conspiracy convictions. 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. Holesek’s next scheduled appearance is for a status conference before Judge Breyer on November 6, 2024.
The case is being prosecuted by the Corporate and Securities Fraud and General Crimes Sections of the U.S. Attorney’s Office. Christiaan Highsmith is the Assistant U.S. Attorney prosecuting the case, with the assistance of Lance Libatique and Aarian Beti. The prosecution is the result of a multi-year investigation by FHA-OIG, HUD OIG, and the U.S. Postal Inspection Service, with assistance from the California Department of Justice.
Former Federal Correctional Officer Faces Additional Charges Involving Sexual Abuse of Inmates and a Federal Civil Rights ViolationRead the Press Release
A federal grand jury issued a superseding indictment yesterday charging former correctional officer Darrell Wayne Smith with 15 counts of sexual abuse, including a civil rights violation, against five female victims who were inmates under his custody and control at Federal Correctional Institution, Dublin (FCI Dublin).
“As alleged, Officer Daryl Smith engaged in appalling criminal acts when he sexually abused those in his care and custody,” said Deputy Attorney General Lisa Monaco. “This superseding indictment is the latest product of the Department’s ongoing work to seek justice for victims of sexual assault at FCI Dublin. We remain steadfast in our commitment to root out sexual assault within the BOP and hold to account those who so egregiously violate their duty.”
The initial federal indictment against Darrell Wayne Smith, 55, now residing in Florida, was filed April 13, 2023, and charged him with engaging in illegal sexual acts with three female inmates while he was employed at FCI Dublin as a correctional officer. That initial indictment charged 12 counts that alleged 12 acts occurring between May 2019 and May 2021 in which Smith engaged in separate sexual conduct with each of the three inmate victims.
The superseding indictment issued yesterday, which supplants the initial indictment, identifies two additional victims and charges 15 counts against Smith. It charges all 12 counts of sexual abuse that were charged in the initial indictment, and adds two new counts of sexual abuse, each involving one of the two additional victims. Each additional victim is described as being an inmate at FCI Dublin who suffered abusive sexual conduct by Smith while under his custodial and disciplinary control. Smith’s charged sexual conduct is now alleged to have begun as early as August 2016.
The superseding indictment also adds a third new count that alleges a federal civil rights violation by Smith. The civil rights violation arises from aggravated sexual abuse that Smith is alleged to have engaged in against one of the female inmates.
“Federal prison guards must treat prisoners humanely,” said U.S. Attorney Ismail Ramsey for the Northern District of California. “Victimizing inmates sexually and denying them basic civil rights must end. Yesterday’s superseding indictment demonstrates my office’s commitment to root out such misconduct and prosecute officers who allegedly perpetrate such abuse.”
“Yesterday’s superseding indictment includes three new allegations of sexual assault by Smith, a Correctional Officer at FCI Dublin,” said Justice Department Inspector General Michael E. Horowitz. “The 15 charges against Smith allege he sexually abused multiple inmates over several years, including brazen and violent acts. The Justice Department’s Office of the Inspector General (DOJ OIG) is committed to aggressively investigating allegations of abuse at FCI Dublin and across the Federal Bureau of Prisons.”
“The defendant's alleged actions are some of the most shocking and disturbing charges we've seen for a former federal corrections officer,” said Executive Assistant Director Michael D. Nordwall of the FBI’s Criminal, Cyber, Response, and Services Branch. “Sexual abuse scars everyone who survives it, but can be particularly traumatizing when it's perpetrated by someone in a position of trust or authority. The FBI is steadfast in our commitment to defending the civil rights of everyone and investigating anyone who allegedly violates this fundamental protection.”
“These allegations of sexual abuse are deeply troubling,” said Special Agent in Charge Robert K. Tripp of the FBI San Francisco Field Office. “We are committed to enforcing civil rights statutes and holding accountable those who abuse their positions.”
Each of the alleged victims is identified in the superseding indictment by initials only and is alleged to have been in official detention and under Smith’s custodial, supervisory, and disciplinary authority at the time of the charged conduct. Each count in the superseding indictment corresponds with one encounter during which Smith allegedly engaged in unlawful sexual acts or contact with one of the victims, except for the newly charged civil rights violation which arises from alleged aggravated sexual abuse also charged in another count.
Smith is now charged with six counts of sexual abuse of a ward, seven counts of abusive sexual contact, one count of aggravated sexual abuse, and one count of deprivation of rights under color of law.
Smith’s arraignment on the superseding indictment has not yet been set. However, Smith is currently set to begin jury trial on March 17, 2025, in front of U.S. District Judge Yvonne Gonzalez Rogers for the Northern District of California. If convicted, he faces a maximum penalty of life in prison for each count of aggravated sexual abuse and deprivation of rights under color of law. Additionally, Smith faces a statutory maximum penalty of 15 years in prison for each count of sexual abuse of a ward and a maximum penalty of two years in prison for each count of abusive sexual contact. In addition, as part of any sentence, the court may order a term of supervised release, a fine of up to $250,000 for each count, restitution, and additional assessments. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI and DOJ OIG are investigating the case.
Assistant U.S. Attorneys Molly Priedeman and Andrew Paulson for the Northern District of California are prosecuting the case, with the assistance of Kay Konopaske.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Former Federal Correctional Officer Faces Additional Charges Involving Sexual Abuse of Inmates and A Federal Civil Rights ViolationRead the Press Release
OAKLAND – A federal grand jury issued a superseding indictment yesterday charging former correctional officer Darrell Wayne Smith with 15 counts of sexual abuse, including a civil rights violation, against five female victims who were inmates under his custody and control at Federal Correctional Institution, Dublin (FCI Dublin).
“As alleged, Officer Daryl Smith engaged in appalling criminal acts when he sexually abused those in his care and custody,” said Deputy Attorney General Lisa Monaco. “This superseding indictment is the latest product of the Department’s ongoing work to seek justice for victims of sexual assault at FCI Dublin. We remain steadfast in our commitment to root out sexual assault within the BOP and hold to account those who so egregiously violate their duty.”
“Federal prison guards must treat prisoners humanely,” said U.S. Attorney Ismail Ramsey. “Victimizing inmates sexually and denying them basic civil rights must end. Today’s superseding indictment demonstrates my office’s commitment to uncover such misconduct and prosecute officers who allegedly perpetrate such abuse.”
“Today’s superseding indictment includes three new allegations of sexual assault by Smith, a Correctional Officer at FCI Dublin. The 15 charges against Smith allege he sexually abused multiple inmates over several years, including brazen and violent acts. The Department of Justice Office of the Inspector General is committed to aggressively investigating allegations of abuse at FCI Dublin and across the Federal Bureau of Prisons,” said Inspector General Michael E. Horowitz.
“The defendant's alleged actions are some of the most disturbing charges we’ve seen for a former federal corrections officer,” said Executive Assistant Director Michael D. Nordwall of the FBI’s Criminal, Cyber, Response, and Services Branch. “Sexual abuse scars everyone who survives it but can be particularly traumatizing when it’s perpetrated by someone in a position of trust or authority. The FBI is steadfast in our commitment to defending the civil rights of everyone and investigating anyone who allegedly violates this fundamental protection.”
“These allegations of sexual abuse are deeply troubling,” said FBI San Francisco Special Agent in Charge Robert K. Tripp. “We are committed to enforcing civil rights statutes and holding accountable those who abuse their positions.”
The initial federal indictment against Darrell Wayne Smith, 55, now residing in Florida, was filed April 13, 2023, and charged him with engaging in illegal sexual acts with three female inmates while he was employed at FCI Dublin as a correctional officer. The initial indictment charged 12 counts that alleged 12 acts occurring between May 2019 and May 2021 in which Smith engaged in separate sexual conduct with each of the three inmate victims.
The superseding indictment issued yesterday, which supplants the initial indictment, identifies two additional victims and charges 15 counts against Smith. It charges all 12 counts of sexual abuse that were charged in the initial indictment and adds two new counts of sexual abuse, each involving one of the two additional victims. Each additional victim is described as being an inmate at FCI Dublin who suffered abusive sexual conduct by Smith while under his custodial and disciplinary control. Smith’s charged sexual conduct is now alleged to have begun as early as August 2016.
The superseding indictment also charges a third new count that alleges a federal civil rights violation by Smith. The civil rights violation arises from aggravated sexual abuse that Smith is alleged to have perpetrated against one of the female inmates.
Each alleged victim is identified in the superseding indictment by initials only and is alleged to have been in official detention and under Smith’s custodial, supervisory, and disciplinary authority at the time of the charged conduct. Each count in the superseding indictment corresponds with one encounter during which Smith allegedly engaged in unlawful sexual acts or contact with one of the victims, except for the newly charged civil rights violation which is based upon alleged aggravated sexual abuse also charged in another count.
Smith is now charged with six counts of sexual abuse of a ward, seven counts of abusive sexual contact, one count of aggravated sexual abuse, and one count of deprivation of rights under color of law.
The charges presented in the superseding indictment are merely allegations and the defendant is presumed innocent unless proven guilty in a court of law.
Smith’s arraignment on the superseding indictment has not yet been set. However, Smith is currently set to begin jury trial on March 17, 2025, in front of U.S. District Judge Yvonne Gonzalez Rogers for the Northern District of California.
If convicted, he faces a maximum penalty of life in prison for each count of aggravated sexual abuse and deprivation of rights under color of law. Additionally, Smith faces a statutory maximum penalty of 15 years in prison for each count of sexual abuse of a ward and a maximum penalty of two years in prison for each count of abusive sexual contact. In addition, as part of any sentence the court will order a term of supervised release and may order a fine of up to $250,000 for each count, restitution and additional assessments. A federal district court judge will determine a sentence only after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant U.S. Attorneys Molly Priedeman and Andrew Paulson for the Northern District of California are prosecuting the case, with the assistance of Kay Konopaske. The prosecution is the result of an investigation by the FBI and DOJ-OIG.
East Bay Man Faces Federal Charges for Firebombing A University Police VehicleRead the Press Release
OAKLAND – A federal grand jury has returned an indictment charging an East Bay man with firebombing a University of California Police Department (UCPD) patrol car, announced U.S. Attorney Ismail J. Ramsey for the Northern District of California and FBI San Francisco Special Agent in Charge Robert K. Tripp.
According to the indictment, on June 1, 2024, Casey Robert Goonan, 34, of Oakland and Pleasant Hill, went to the campus of the University of California, Berkeley. He was carrying a reusable shopping bag that contained six explosive devices commonly known as “Molotov cocktails.”
Goonan then kicked the shopping bag underneath the fuel tank of a marked UCPD patrol vehicle and ignited the Molotov cocktails, as depicted below:
The patrol vehicle caught on fire, as depicted below:
In part due to the rapid response of UCPD officers, the patrol vehicle did not explode. It did, however, suffer significant damage to its rear seats, fuel port, and trunk, and was deemed a total loss.
Goonan stands charged with one count of Maliciously Damaging or Destroying Property Belonging to an Institution Receiving Federal Financial Assistance by Means of Fire or an Explosive, in violation of 18 U.S.C. § 844(f)(1); one count of Maliciously Damaging or Destroying Property Used in or Affecting Interstate Commerce by Means of Fire or an Explosive, in violation of 18 U.S.C. § 844(i); and one count of Possession of an Unregistered Firearm, in violation of 26 U.S.C. § 5861(d).
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Goonan faces a maximum sentence of 20 years in prison and a minimum sentence of five years in prison as to each count of Maliciously Damaging or Destroying Property by Means of Fire or an Explosive, and a maximum sentence of 10 years in prison as to the Possession of an Unregistered Firearm count. 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.
Goonan was arraigned on the Indictment this morning before Chief United States Magistrate Judge Donna M. Ryu. He pleaded not guilty to the charges. Judge Ryu previously ordered Goonan detained pending trial, and he remains in federal custody.
Goonan’s next court appearance is scheduled for September 17, 2024, before Senior United States District Judge Jeffrey S. White in Oakland.
The National Security and Cyber Section of the U.S. Attorney’s Office for the Northern District of California is prosecuting the case. The prosecution is the result of an investigation by the FBI; the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF); the California Office of the State Fire Marshal (CalFire); and the University of California Police Department.
San Francisco Man Sentenced to 11 Years for Shooting at U.S. Postal WorkerRead the Press Release
SAN FRANCISCO – Vo Nguyen was sentenced yesterday to 132 months in prison for assault on a federal employee with a deadly weapon and discharging a firearm in the course of the assault, announced United States Attorney Ismail J. Ramsey and United States Postal Inspection Service, San Francisco Division Inspector in Charge Stephen Sherwood. The sentence was handed down by United States District Judge William H. Orrick.
Nguyen, 38, a resident of San Francisco, pleaded guilty on May 2, 2024. According to his plea agreement, a United States Postal Service (USPS) employee, engaged in mail delivery and dressed in a postal uniform, was delivering mail to Nguyen’s residence on April 1, 2023. Nguyen came out of the house and yelled at the USPS employee, who Nguyen did not know. Nguyen admitted he aggressively approached the USPS employee and acted like he wanted to fight. The USPS employee backed up, then turned and ran. The USPS employee fled a couple of houses away but Nguyen followed, and the USPS employee pepper sprayed Nguyen. Nguyen admitted he then went home, grabbed a 9-millimeter semi-automatic pistol, got into his car, and went looking for the USPS employee. Nguyen admitted that he shortly found the USPS employee and fired approximately five to six shots at him. Nguyen stated he paused briefly, then fired approximately five more shots at the USPS employee who was then running away. The USPS employee ran in the opposite direction that Nguyen was driving, so Nguyen made a U-turn and again drove towards the USPS employee. Nguyen stopped in front of a parked SUV that the USPS employee had crouched behind to hide. Nguyen saw the USPS employee and fired three more shots at the USPS employee. Nguyen drove away briefly before returning and chasing the USPS employee on foot until the USPS employee pepper sprayed him again.
A federal grand jury indicted Nguyen on May 2, 2023. He was charged with, among other charges, assault upon a federal employee with a deadly or dangerous weapon, in violation of 18 U.S.C. § 111(a) and (b), and discharging a firearm in connection with a crime of violence, in violation of 18 U.S.C. § 924(c). He pleaded guilty to both of these charges.
Nguyen has remained in custody since his arrest on April 1, 2023.
In addition to the 132 month term of imprisonment, U.S. District Judge Orrick further sentenced the defendant to a three year period of supervision following his release from prison and scheduled a hearing on October 10, 2024, to determine the amount of restitution to be paid by the defendant.
Kelsey Davidson is the Assistant U.S. Attorney who is prosecuting the case, with the assistance of Veronica Hernandez, Marina Ponomarchuk, and Victim Specialist Janice Pagsanjan. The prosecution is the result of an investigation by the United States Postal Inspection Service and the San Francisco Police Department.
Man Sentenced for Selling $3.5M in Counterfeit and Substandard Electronics for Use in Military SystemsRead the Press Release
A California man was sentenced yesterday to three years and six months in prison for a scheme to defraud the Department of Defense’s (DoD) Defense Logistics Agency (DLA) by selling over $3.5 million worth of fan assemblies to the DLA that were either counterfeit or that he misrepresented were new when in fact they were used or surplus.
According to court documents, Steve H.S. Kim, 63, of Alameda County, controlled Company A, which sold fan assemblies to the DLA that were either counterfeit or were used or surplus fan assemblies that Kim claimed were new. To trick the DLA into accepting the fan assemblies, Kim created counterfeit labels—some of which used Company B’s registered trademarks—that he attached to the fan assemblies he sold to the DLA. When the DLA questioned Kim about the origin of the fan assemblies, Kim concealed his scheme by giving the DLA fake tracing documents that he created and often signed using a false identity. Some of these counterfeit fans were installed or intended to be installed with electrical components on a nuclear submarine, a laser system on an aircraft, and a surface-to-air missile system.
Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division; U.S. Attorney Ismail J. Ramsey for the Northern District of California; Special Agent in Charge Bryan D. Denny of the DoD Office of Inspector General, Defense Criminal Investigative Service (DCIS), Western Field Office; Special Agent in Charge Greg Gross of the Naval Criminal Investigative Service (NCIS) Economic Crimes Field Office; Special Agent in Charge Tatum King of Homeland Security Investigations (HSI); and Special Agent in Charge Keith K. Kelly of the Department of the Army Criminal Investigation Division’s (Army CID) Fraud Field Office made the announcement.
DCIS, NCIS, HSI, and Army CID investigated the case.
Assistant Chief Kyle C. Hankey, Trial Attorney David D. Hamstra, and former Trial Attorney Louis Manzo of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Katherine Lloyd-Lovett for the Northern District of California prosecuted the case. Assistant Deputy Chief Adrienne Rose and Senior Counsels Jason Gull and Matthew A. Lamberti of the Criminal Division’s Computer Crime and Intellectual Property Section provided substantial assistance with the investigation.
California Resident Steve H.S. Kim Sentenced for Selling $3.5M in Counterfeit and Substandard Electronics for Use in Military SystemsRead the Press Release
OAKLAND – A California man was sentenced to three years and six months in prison for a scheme to defraud the Department of Defense’s (DoD) Defense Logistics Agency (DLA) by selling over $3.5 million worth of fan assemblies to the DLA that were either counterfeit or that he misrepresented were new when in fact they were used or surplus.
“Our military must be able to trust that the equipment it is receiving actually reflects what it has purchased,” said U.S. Attorney Ismail Ramsey for the Northern District of California. “Kim fraudulently substituted counterfeit and non-conforming products for the equipment he promised to provide to the government. This sentence should serve as a warning to all vendors that such fraud will not be tolerated.”
According to court documents, Steve H.S. Kim, 63, of Alameda County, controlled Company A, which sold fan assemblies to the DLA that were either counterfeit or were used or surplus fan assemblies that Kim claimed were new. To trick the DLA into accepting the fan assemblies, Kim created counterfeit labels—some of which used Company B’s registered trademarks—that he attached to the fan assemblies he sold to the DLA. When the DLA questioned Kim about the origin of the fan assemblies, Kim concealed his scheme by giving the DLA fake tracing documents that he created and often signed using a false identity. Some of these counterfeit fans were installed or intended to be installed with electrical components on a nuclear submarine, a laser system on an aircraft, and a surface-to-air missile system.
U.S. Attorney Ismail J. Ramsey for the Northern District of California; Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division; Special Agent in Charge Bryan D. Denny of the DoD Office of Inspector General, Defense Criminal Investigative Service (DCIS), Western Field Office; Special Agent in Charge Greg Gross of the Naval Criminal Investigative Service (NCIS) Economic Crimes Field Office; Special Agent in Charge Tatum King of Homeland Security Investigations (HSI); and Special Agent in Charge Keith K. Kelly of the Department of the Army Criminal Investigation Division’s (Army CID) Fraud Field Office made the announcement.
DCIS, NCIS, HSI, and Army CID investigated the case.
Assistant U.S. Attorney Katherine Lloyd-Lovett for the Northern District of California prosecuted the case together with the DOJ Criminal Division’s Fraud Section Assistant Chief Kyle C. Hankey, Trial Attorney David D. Hamstra, and former Trial Attorney Louis Manzo. Assistant Deputy Chief Adrienne Rose and Senior Counsels Jason Gull and Matthew A. Lamberti of the Criminal Division’s Computer Crime and Intellectual Property Section provided substantial assistance with the investigation.
U.S. Attorney Announces Law Enforcement Actions Directed at Fentanyl Trafficking in Santa Cruz CountyRead the Press Release
SAN JOSE – The U.S. Attorney’s Office for the Northern District of California has filed a series of federal criminal complaints charging three defendants with possession with the intent to distribute fentanyl in Santa Cruz County, announced United States Attorney Ismail Ramsey and Drug Enforcement Administration (DEA) Special Agent in Charge Brian Clark. The complaints have been filed as part of a law enforcement operation focused on investigating and prosecuting fentanyl traffickers and illegal open-air fentanyl drug markets in the Santa Cruz area.
“The dramatic increase in the use of fentanyl in the last five years has destroyed countless lives in and around Santa Cruz County. We stand prepared to work with our federal and local law enforcement partners to address the damage being done to our communities,” said U.S. Attorney Ramsey. “We will seek to bring to justice the purveyors of this poison in our neighborhoods – if you are considering selling fentanyl in Santa Cruz, it is time to think again.”
“The dangerous shift from plant-based drugs to synthetic has created the deadliest drug threat facing our nation, fentanyl. This insidious drug has provided the fuel for 70% of the poisoning deaths last year and requires a multi-agency approach to save lives,” said DEA Special Agent in Charge Brian Clark. “DEA will do everything in our power to prevent those peddling poison in Santa Cruz from destroying more lives.”
“The impacts we’ve seen from fentanyl in our community have been devastating and unlike any drug I’ve seen in my 36 years in law enforcement,” said Santa Cruz County Sheriff Jim Hart. “The surge in overdose deaths has shattered families and left us facing an unprecedented public health crisis. By establishing our Fentanyl Task Force and forming these crucial partnerships with state and federal agencies, we are dedicated to holding those who distribute this poison accountable. This should serve as a message to those who are choosing to sell drugs in our community that we are not taking this lightly.”
According to the filed criminal complaints, the distribution of fentanyl has fueled a dramatic increase in overdose deaths over the last years. According to these documents, 133 people died of fentanyl-related overdoses in Santa Cruz County in 2023. The County’s population was approximately 261,547. By contrast, in 2019, Santa Cruz County experienced 5 fentanyl-related overdose deaths.
The defendants named in these complaints are Miguel Geronimo, 30, Jesus Nunez Martinez, 49, and Oscar Angel Alvarez, 28. A separate criminal complaint has been filed against each defendant.
According to the complaint filed against Geronimo, on May 1, 2024, shortly before noon, detectives from the Santa Cruz County Sheriff’s Office were patrolling the area of 115 Coral Street in Santa Cruz that is known to be a common drug-trafficking area. The detectives observed multiple persons entering and exiting a van, none spending more than a couple of minutes in the van. The deputies approached and allowed a drug-sniffing dog to circle the vehicle. The dog positively alerted to the van, indicating the presence of certain narcotics. In the van, the detectives encountered Geronimo, who was lying down in the back-passenger section of the van, and another person who was in the front passenger seat. Detectives searched the van and found approximately 86.6 grams of fentanyl, sales paraphernalia, and over $3,300 in cash. Geronimo is charged with possession with intent to distribute fentanyl.
According to the complaint filed against Martinez, on February 9, 2024, detectives with the Santa Cruz County Sheriff’s Office spotted Martinez driving with a suspended driver’s license and expired tags. The complaint alleges another deputy arrived with a drug-sniffing dog and allowed the dog to circle Martinez’s vehicle. After the dog alerted the deputies to the presence of drugs, deputies searched the car. The complaint details that the investigating deputies found various items, including a distributable amount of actual methamphetamine, sales paraphernalia, and over $750 in cash in the vehicle. Furthermore, more than a month later, on March 29, 2024, sheriff’s detectives conducted a traffic stop on Martinez for failing to stop at a stop sign. Another search of Martinez’s car resulted in the seizure of additional drugs, sales paraphernalia, and over $400 in cash. On this occasion, Martinez possessed a distributable amount of fentanyl and carfentanil, a fentanyl analogue and synthetic opioid that is approximately 100 times more potent than fentanyl. Martinez is charged with possession with intent to distribute fentanyl, carfentanil, and methamphetamine.
According to the complaint filed against Alvarez, the defendant was found in possession of various controlled substances, including fentanyl, in the early morning of February 5, 2024. More specifically, the complaint describes how a sheriff’s deputy was patrolling the area of the 500 block of Water Street in Santa Cruz—an area known for drug trafficking, drug use, and other crime. At approximately 4:12AM, the deputy spotted Alvarez outside the main office of a motel, wearing two backpacks. The deputy approached Alvarez, who claimed he was trying to get a room, although the lobby of the hotel was empty, and Alvarez walked away from the hotel lobby and to the rear of the motel. A later search of Alvarez and the backpacks revealed more than 15 baggies of suspected drugs packaged for sales and more than $2,500 cash. After subsequent testing, the substances in Alvarez’s possession were found to include more than 150 grams of fentanyl, over 95 grams of methamphetamine, and more than 50 grams of cocaine. Additionally, according to the complaint, Alvarez was found with approximately 54.4 grams of p-Fluorofentanyl and 27.781 grams of methamphetamine HCL during a traffic stop on May 29, 2024. Alvarez has been charged with possession with intent to distribute fentanyl, methamphetamine, and cocaine, on February 5, 2024.
In sum, if convicted, the defendants face the following charges:
Defendant
Charges
Maximum Statutory Penalties
Miguel Geronimo
Possession with intent to distribute fentanyl
(21 U.S.C. 841(a)(1) and (b)(1)(C))
20 years of imprisonment; maximum lifetime of supervised release (minimum term of 3 years of supervised release); $1 million fine
Jesus Nunez Martinez
Possession with intent to distribute 5 grams or more of actual methamphetamine
(February 9, 2024)
(21 U.S.C. § 841(a)(1), (b)(1)(B))
40 years of imprisonment (mandatory minimum of 5 years of imprisonment);
maximum lifetime supervised release (mandatory minimum of 4 years of supervised release); $5 million fine
Possession with intent to distribute fentanyl and carfentanil
(March 29, 2024)
21 U.S.C. § 841(a)(1), (b)(1)(C)
20 years imprisonment; maximum lifetime of supervised release (minimum term of 3 years of supervised release); $1 million fine
Oscar Angel Alvarez
Possession with intent to distribute 40 grams or more of fentanyl
(21 U.S.C. § 841(a)(1), (b)(1)(B)(vi))
40 years of imprisonment (mandatory minimum of 5 years of imprisonment); maximum lifetime of supervised release (mandatory minimum 4 years of supervised release); $5,000,000 fine
Possession with intent to distribute 5 grams or more of actual methamphetamine
(21 U.S.C. § 841(a)(1), (b)(1)(B)(viii))
40 years of imprisonment (mandatory minimum of 5 years of imprisonment); maximum lifetime of supervised release (mandatory minimum 4 years of supervised release); $5,000,000 fine
Possession with intent to distribute cocaine
(21 U.S.C. § 841(a)(1), (b)(1)(C))
20 years of imprisonment; maximum lifetime of supervised release (mandatory minimum of 3 years of supervised release); $1,000,000 fine
A criminal complaint merely alleges a crime has been committed. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The three criminal complaints were filed by the U.S. Attorney in partnership with the DEA and based on the invaluable work of the Santa Cruz County Sheriff’s Office. The complaints were unsealed in conjunction with proactive law enforcement action by the DEA, Santa Cruz County Sheriff’s Office, and other federal and local partners to address the growing use of fentanyl in Santa Cruz County. On July 11, 2024, federal and local law enforcement collaborated in a joint street enforcement operation focusing on the open-air fentanyl markets in the Santa Cruz area. This enforcement activity resulted in the seizure of fentanyl, a ghost gun, ammunition, and multiple arrests by state authorities of persons possessing drugs for sale.
Martinez made his initial federal court appearance to face the charges on July 15, 2024, before the Hon. Virginia K. DeMarchi, United States Magistrate Judge for the Northern District of California. Martinez was temporarily ordered detained, and a detention hearing in his case is set for July 19, 2024, at 1:00 p.m. at the United States District Court in San Jose. Neither Alvarez nor Geronimo have made their initial appearances on the above-listed federal charges.
Assistant U.S. Attorneys Johnny E. James, Jr., Jeffrey A. Backhus, and Sarah Griswold are prosecuting the cases with assistance from Elise Etter, Susan Kreider, and Lynette Dixon. These prosecutions are the result investigations by the Santa Cruz County Sheriff’s Office and the DEA, with operational assistance from the Federal Bureau of Investigation and the Santa Cruz Police Department. The U.S. Attorney’s Office thanks the Office of the Santa Cruz County District Attorney for its cooperation in bringing the federal prosecutions of these defendants.
Cooperating Cancer Testing Company Agrees to Pay over $900,000 to Resolve Allegations of False Claims for Lab TestsRead the Press Release
SAN FRANCISCO – Guardant Health, Inc., a precision oncology company based in Palo Alto, has agreed to settle allegations that it knowingly violated the False Claims Act (FCA), 31 U.S.C. §§ 3729-31, and regulations of the Defense Health Agency (DHA), announced United States Attorney Ismail J. Ramsey, U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG) Acting Special Agent in Charge Jeffrey McIntosh, and Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS), Western Field Office, Special Agent in Charge Bryan D. Denny. In connection with the settlement, the United States acknowledged that Guardant took a number of significant steps entitling it to credit for cooperating with the government, including voluntarily disclosing the conduct to HHS-OIG. Guardant will pay $913,932.93 to settle the FCA allegations and $31,082.00 in an administrative settlement with DHA.
As alleged by the government, in or around April 2021, a physician based in Austin, Texas contacted Guardant’s Human Resources Department to recommend a close friend of the physician’s family member for a position as an Account Manager in Guardant’s Oncology Division. Guardant hired the family friend as an Account Manager. In October 2021, the physician contacted Guardant again, this time seeking a position for his step-daughter upon her graduation from college. The step-daughter was considered but rejected for a position in Guardant’s Screening Division. However, in or around February 2022, two Guardant employees arranged for the family friend to be promoted, thereby creating an opening in the Oncology Division for employment of the step-daughter. These employees knew of the relationship between the step-daughter and the physician, and that the step-daughter was not qualified for the role. The physician then ordered significantly more Guardant tests per quarter after both hirings.
Based on this conduct, the United States alleges that Guardant submitted claims to and received payments from Medicare for clinical laboratory services that had been referred to Guardant by the physician in violation of the Physician Self-Referral Law, or Stark Law, 42 U.S.C. § 1395nn. The United States further alleges that Guardant knowingly submitted or caused the submission of false claims for payment for Guardant tests ordered by the physician during the relevant time period to Medicare Part B in violation of the FCA and to TRICARE in violation of 32 C.F.R. § 199.9.
Guardant cooperated with the government’s investigation of the issues and took prompt and substantial remedial measures. Shortly after receiving information regarding the physician’s referrals, Guardant stopped billing federal health care programs for Guardant tests ordered by the physician. Guardant also terminated the physician’s family member’s employment.
“This Office is committed to holding accountable individuals and entities who commit and profit from healthcare fraud,” said United States Attorney for the Northern District of California Ismail J. Ramsey. “We will continue to pursue those who enter into unlawful arrangements that waste taxpayer dollars and corrupt the integrity of healthcare decisionmaking.”
“Illegal referrals and incentives undermine the integrity of our federal healthcare programs,” said Acting Special Agent in Charge Jeffrey McIntosh of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “HHS-OIG and our law enforcement partners remain committed to identifying and holding accountable those who engage in such unlawful relationships.”
“The announced settlement demonstrates the government’s commitment to hold accountable those whose actions taint the integrity of federal healthcare programs, including the Department of Defense's TRICARE program,” said Special Agent in Charge Denny. “DCIS remains steadfastly committed to working with our law enforcement partners to investigate questionable actions that harm the quality of the TRICARE program and the services it provides to our military members and their families.”
Assistant U.S. Attorneys Sharanya Mohan and Ekta Dharia handled this matter for the government, with assistance from Jonathan Birch. The investigation and settlement resulted from a coordinated effort by the U.S. Attorney’s Office for the Northern District of California, HHS-OIG, and DOD-OIG. Mr. Ramsey thanked HHS-OIG, DOD-OIG, and HHS’s Office of General Counsel for their assistance with this matter.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
text_of_guardant_settlement.pdfFormer Hospitality Executive Sentenced to More Than Five Years in Prison for Multiple Fraud SchemesRead the Press Release
SAN FRANCISCO – Geoffrey Palermo, a former hospitality executive who went on to operate numerous auto repair shops in the Bay Area, was sentenced to 65 months in prison, following his conviction on wire fraud, failing to pay over taxes, and other charges, announced First Assistant United States Attorney Patrick Robbins, Federal Bureau of Investigation Special Agent in Charge Robert K. Tripp, and IRS Criminal Investigation Acting Special Agent in Charge Michael Mosley of the Oakland Field Office. The sentence was handed down by the Honorable James Donato, U.S. District Judge.
Palermo, 60, of Novato, Calif., pleaded guilty on March 11, 2024, to one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349; two counts of honest services wire fraud, in violation of 18 U.S.C. §§ 1343 and 1346; one count of wire fraud, in violation of 18 U.S.C. § 1343; one count of making a false statement to a bank, in violation of 18 U.S.C. § 1014; and one count of willful failure to collect or pay over tax, in violation of 26 U.S.C. § 7202. He had been charged in a Second Superseding Indictment in October 2021 with these charges.
During the relevant time, 2008 through 2016, Palermo was working as the manager of the Hilton hotel located in downtown San Francisco. During this timeframe, Palermo had authority to enter into contracts, choose contractors, and otherwise manage construction and capital improvement projects at the hotel.
According to his plea agreement, Palermo admitted he devised a kickback scheme involving contractors to deprive the Hilton hotel’s owners of more than $1.8 million in kickbacks that went to Palermo. As part of the scheme, Palermo agreed with one contractor, Adan Roldan, 56, of Roseville, Calif., that Roldan would submit falsely inflated invoices for construction and renovation work at the hotel, that Palermo would approve the false invoices, and that Roldan and the second contractor would pay a kickback to Palermo associated with the falsely inflated invoices. From 2013 through 2016, as a result of this scheme, Palermo approved—and the hotel’s owners paid—over $6.4 million to A. Roldan Construction based on invoices submitted by Roldan’s construction company. In exchange, Roldan paid more than $1.6 million in kickbacks to Palermo. Additionally, in 2014 and 2015, Palermo approved—and the hotel’s owners paid—over $2 million to a second contractor based on falsely inflated invoices submitted by that contractor, and the contractor paid Palermo over $300,000 in kickbacks. In exchange for kickbacks, Palermo continued to hire Roldan and the second contractor to do work at the Hilton.
According to Palermo’s plea agreement, after leaving his job as a manager at the Hilton San Francisco in 2016, Palermo managed GMP Cars, LLC, a collision and auto repair business he owned and controlled. Beginning in approximately August 2019 and continuing through December 2019, Palermo devised and participated in a scheme to obtain approximately $5 million in Small Business Administration (SBA) loans for GMP Cars from a commercial lender by making false statements and omissions in loan applications. Specifically, when applying for SBA loans, GMP Cars failed to disclose that its business banking account was overdrawn by more than $700,000, presented false bank statements showing inflated cash balances, submitted an incomplete debt schedule, submitted false financial statements showing inflated revenue, and presented falsified documents relating to an acquisition.
Furthermore, according to the plea agreement, on April 3, 2020, Palermo caused GMP Cars to make false statements in its application for a Paycheck Protection Program (“PPP”) loan. Specifically, Palermo caused GMP Cars to falsely certify on its loan application that it had employees for whom it paid salaries and payroll taxes, and Palermo caused GMP Cars to submit a purported payroll summary showing that payroll taxes were being accrued and paid when in fact Palermo had caused GMP Cars to not pay payroll taxes.
Also as part of his plea agreement, Palermo admitted that as the owner and manager of GMP Cars he had a duty to collect, account for, and pay over employee federal income tax, Social Security tax, and Medicare tax. Palermo admitted that in 2018 he caused GMP Cars to withhold federal income tax, Social Security tax, and Medicare tax totaling more than $1 million. Palermo willfully caused GMP Cars to fail to pay over to the IRS more than $1 million in federal taxes withheld from employee paychecks owed to the IRS for 2018.
A federal grand jury issued a second superseding indictment against Palermo and Roldan on October 5, 2021. Palermo and Roldan were charged with one count of wire fraud conspiracy, in violation of 18 U.S.C. § 1349. Palermo was charged with two counts of wire fraud and honest services wire fraud, in violation of 18 U.S.C. §§ 1343 and 1346; one count of wire fraud, in violation of 18 U.S.C. § 1343; one count of making a false statement to a bank, in violation of 18 U.S.C § 1014; and four counts of failure to collect or pay over taxes due and owed, in violation of 26 U.S.C § 7202. At Palermo’s sentencing, the three outstanding tax counts were dismissed pursuant to the plea agreement between Palermo and the United States, and the related case, United States v. Palermo, Case No. 21-cr-187 JD, was also dismissed.
Palermo has been detained since June 27, 2023.
In addition to the 65-month sentence, Judge Donato ordered Palermo to serve three years of supervised release, which will begin after he leaves prison. Judge Donato scheduled a hearing for August 19, 2024, to determine issues regarding restitution and forfeiture.
On March 11, 2024, Roland pleaded guilty to one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349. His sentencing hearing is scheduled for August 12, 2024.
Assistant U.S. Attorneys Christiaan Highsmith and Noah Stern are prosecuting the case with the assistance of Aarian Beti. The prosecution is the result of an investigation by the FBI and IRS-CI.
San Francisco Man Faces Federal Charges for Embezzling More Than $1.2 Million from His EmployersRead the Press Release
SAN FRANCISCO – A federal grand jury has returned an indictment charging a San Francisco man with bank fraud and other crimes relating to a scheme in which he embezzled more than $1.2 million from his employers, local law firms.
U.S. Attorney Ismail J. Ramsey for the Northern District of California and FBI San Francisco Division Special Agent-in-Charge Robert K. Tripp made the announcement.
According to the indictment unsealed today, Tony Archuleta-Perkins, 48, started a non-profit organization called “Murrieta Valley High School 1994” (MVHS 1994), in 2013.
From 2017 to 2023, Archuleta-Perkins worked for two San Francisco law firms. He held various roles at the firms, eventually becoming Chief Financial Officer (CFO). As the CFO, Archuleta-Perkins was in a position of trust and had access to the law firms’ end-to-end payments automation platform.
The indictment alleges that from at least May 2018 through December 2023, Archuleta-Perkins used the access he had as an employee in a position of trust at the law firms to cause the law firms to make false and fraudulent payments to MVHS 1994 that had not been authorized by the law firms’ management and were not for any legitimate business purpose.
Once the stolen funds were in MVHS 1994’s bank account, Archuleta-Perkins would sometimes directly issue payments to vendors and accounts for personal expenses that had nothing to do with the stated purposes of MVHS 1994 or the law firms. On other occasions, he wrote checks from MVHS 1994 to himself and deposited those checks into his personal bank account.
Additionally, on at least one occasion, Archuleta-Perkins falsely endorsed a $41,663.69 U.S. Treasury check made out to one of the law firms, deposited it into a bank account belonging to MVHS 1994 and then wrote himself a check for the same amount.
The indictment further alleges that Archuleta-Perkins used the stolen money for personal expenses, including payments on Best Buy and Home Depot credit cards, and towards the purchase, renovation, and improvement of at least three properties in California.
In sum, the indictment charges Archuleta-Perkins with eight counts of bank fraud, in violation of 18 U.S.C. § 1344(2), and five counts of engaging in monetary transactions in property derived from specified unlawful activity (otherwise known as money laundering), in violation of 18 U.S.C. § 1957.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Archuleta-Perkins faces a maximum statutory sentence of 30 years in prison on each of the bank fraud counts and a maximum statutory sentence of 10 years in prison on each of the money laundering counts. Any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Special Agents of the FBI arrested Archuleta-Perkins in San Francisco this morning. He subsequently appeared in federal court and was released pending trial on a $500,000 bond.
Archuleta-Perkins’s next court appearance is scheduled on July 31, 2024 before United States District Judge Jacqueline Scott Corley.
Assistant U.S. Attorney Nikhil Bhagat is prosecuting the case with the assistance of Madeline Wachs. Deputy Assistant Attorney General Lisa H. Miller of the Justice Department’s Criminal Division provided valuable assistance. The prosecution is the result of an investigation by the FBI.
National Health Care Fraud Enforcement Action Results in 193 Defendants Charged and over $2.75 Billion in False ClaimsRead the Press Release
Today, Assistant U.S. Attorney Matthew Yelovich, Deputy Chief of the Criminal Division of the U.S. Attorney’s Office for the Northern District of California, announced criminal charges against four defendants in connection with an alleged scheme to defraud federal health care benefit programs including Medicare and Medicaid. The charges filed in federal court are part of the Department of Justice’s 2024 National Health Care Fraud Enforcement Action. The charges stem from an alleged conspiracy to provide prescriptions for Adderall and other stimulants to customers of an online health care service without a legitimate medical purpose for doing so. According to the several informations and the indictment filed against the defendants, they each had a role in enabling members of an online telehealth company to obtain Adderall and other stimulants from pharmacies by illegitimate means including making false and fraudulent representations to pharmacies, seeking to obstruct efforts by pharmacies to exercise their corresponding responsibility, and causing pharmacies to submit false and fraudulent claims for reimbursement to health care insurance plans.
“It does not matter if you are a trafficker in a drug cartel or a corporate executive or medical professional employed by a health care company, if you profit from the unlawful distribution of controlled substances, you will be held accountable,” said Attorney General Merrick B. Garland. “The Justice Department will bring to justice criminals who defraud Americans, steal from taxpayer-funded programs, and put people in danger for the sake of profits.”
“We allege that each defendant played a role in a scheme to submit fraudulent requests to Medicare and Medicaid to obtain reimbursements for drugs that were improperly prescribed through online services,” said Deputy Chief Yelovich. “Making controlled substances available to persons without a legitimate medical purpose is drug dealing and knowingly facilitating bogus reimbursements from federal programs is fraud. This office will vigorously prosecute both.”
The charges announced today by Deputy Chief Yelovich are part of a strategically coordinated, two-week nationwide law enforcement action that resulted in criminal charges against 193 defendants for their alleged participation in health care fraud and opioid abuse schemes that resulted in the submission of over $2.75 billion in alleged false billings. The defendants allegedly defrauded programs entrusted for the care of the elderly and disabled to line their own pockets, and the Government, in connection with the enforcement action, seized over $231 million in cash, luxury vehicles, gold, and other assets.
The Health Care Fraud Unit’s National Rapid Response, Florida, Gulf Coast, Los Angeles, Midwest, Northeast, and Texas Strike Forces; U.S. Attorneys’ Offices for the Southern District of Alabama, District of Arizona, Central District of California, Northern District of California, Southern District of California, District of Connecticut, Middle District of Florida, Southern District of Florida, Northern District of Illinois, Eastern District of Kentucky, Western District to Kentucky, Eastern District of Louisiana, Middle District of Louisiana, Western District of Louisiana, Eastern District of Michigan, Western District of Michigan, Southern District of Mississippi, District of Montana, District of New Jersey, Eastern District of New York, Eastern District of North Carolina, Western District of Oklahoma, District of Rhode Island, Eastern District of Tennessee, Middle District of Tennessee, Eastern District of Texas, Northern District of Texas, Southern District of Texas, Eastern District of Virginia, Western District of Virginia, Southern District of West Virginia, and Eastern District of Wisconsin; and State Attorney Generals’ Offices for Arizona, California, Illinois, Indiana, Louisiana, New York, Oklahoma, Pennsylvania, Puerto Rico, Rhode Island, and South Dakota are prosecuting the cases in the National Enforcement Action, with assistance from the Health Care Fraud Unit’s Data Analytics Team. Descriptions of each case involved in today’s enforcement action are available on the Department’s website here.
The Northern District of California, in particular, worked with the Department’s Criminal Division and the following law enforcement organizations to investigate and prosecute the cases filed during the enforcement period: Drug Enforcement Administration, Homeland Security Investigations, the U.S. Department of Health and Human Services Office of Inspector General, and IRS Criminal Investigation.
The following individuals are charged in the Northern District of California:
• Riley Levy, 30, of Peoria, Arizona, was charged by information with conspiracy to distribute controlled substances in connection with his role in an unlawful scheme to distribute Adderall and other stimulants. As alleged in the information, in the course and scope of his work for Done Health, P.C. and Done Global Inc. (“Done”), Levy, Done’s Executive Leader, Operations and Strategy, conspired to distribute Adderall and other stimulants by means of the Internet that were not for a legitimate medical purpose in the usual course of professional practice. Health Care Fraud Unit Principal Assistant Deputy Chief Jacob Foster, Trial Attorney Raymond Beckering III of the National Rapid Response Strike Force, and Assistant U.S. Attorneys Kristina Green and Katherine Lloyd-Lovett of the U.S. Attorney’s Office for the Northern District of California are prosecuting the case.
• Christopher Lucchese, 58, of Plano, Texas, was charged by information with conspiracy to defraud the United States and distribute controlled substances in connection with his role in an unlawful scheme to distribute Adderall and other stimulants. As alleged in the information, in the course and scope of his work for Done Health, P.C. and Done Global Inc., Lucchese, a medical doctor, issued prescriptions for Adderall and other stimulants that were not for a legitimate medical purpose in the usual course of professional practice. Health Care Fraud Unit Principal Assistant Chief Jacob Foster, Trial Attorney Raymond Beckering III of the National Rapid Response Strike Force, and Assistant U.S. Attorneys Kristina Green and Katherine Lloyd-Lovett of the U.S. Attorney’s Office for the Northern District of California are prosecuting the case.
• Yina Cruz, 37, of Glenwood, New Jersey, was charged by information with conspiracy to defraud the United States and distribute controlled substances in connection with her role in an unlawful scheme to distribute Adderall and other stimulants. As alleged in the information, in the course and scope of her work for Done Health, P.C. and Done Global Inc., Cruz, a nurse practitioner, issued prescriptions for Adderall and other stimulants, including to Medicare and Medicaid beneficiaries, that were not for a legitimate medical purpose in the usual course of professional practice. Health Care Fraud Unit Principal Assistant Chief Jacob Foster, Trial Attorney Raymond Beckering III of the National Rapid Response Strike Force, and Assistant U.S. Attorneys Kristina Green and Katherine Lloyd-Lovett of the U.S. Attorney’s Office for the Northern District of California are prosecuting the case.
• Katrina Pratcher, 70, of Altadena, California, was charged by information with conspiracy to defraud the United States and distribute controlled substances in connection with her role in an unlawful scheme to distribute Adderall and other stimulants. As alleged, in the course and scope of her work for Done Health, P.C. and Done Global Inc., Pratcher, a nurse practitioner, issued prescriptions for Adderall and other stimulants, including to Medicare and Medicaid beneficiaries, that were not for a legitimate medical purpose in the usual course of professional practice. Health Care Fraud Unit Principal Assistant Chief Jacob Foster, Trial Attorney Raymond Beckering III of the National Rapid Response Strike Force, and Assistant U.S. Attorneys Kristina Green and Katherine Lloyd-Lovett of the U.S. Attorney’s Office for the Northern District of California are prosecuting the case.A complaint, information, or indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Former Defense Department Employee Pleads Guilty to Defrauding Government in Fake Invoices SchemeRead the Press Release
A California woman pleaded guilty today to devising a multi-year scheme to defraud the U.S. government by submitting fake invoices for supplies that were never purchased and converting the stolen funds for her personal use.
According to court documents, Zelene Charles, 42, of Monterey, a then-civilian employee of the Department of Defense, at the Defense Language Institute in Monterey, California, perpetrated a scheme to defraud the U.S. government by creating fake purchase requests and invoices for government purchases from both fictitious and legitimate business entities. The items listed in these invoices were never actually purchased or received by the government. Between December 2016 and April 2020, Charles placed approximately 185 fraudulent charges, causing a total loss to the government of $624,250. To conceal that she was the recipient of the stolen funds, Charles frequently renamed the business names associated with intermediary accounts and, in total, used at least 78 different account names.
Charles pleaded guilty to wire fraud and theft of government money and property. She faces a maximum penalty of 20 years in prison for the wire fraud charge and 10 years in prison for the theft charge. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Charles also agreed to pay $624,500 in restitution and forfeit numerous stolen government computers and tablets as part of her plea.
Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division; U.S. Attorney Ismail J. Ramsey for the Northern District of California; Special Agent in Charge Bryan Denny of the Defense Criminal Investigative Service (DCIS) Western Field Office; Special Agent in Charge Keith K. Kelly of the Department of the Army Criminal Investigation Division’s (Army-CID) Fraud Field Office; Special Agent in Charge Shawn Dionida of the Department of Agriculture Office of Inspector General (USDA-OIG) Western Region; and Special Agent in Charge Terry Pfeifer of the General Services Administration Office of Inspector General (GSA-OIG) Western Division made the announcement.
The DCIS Western Field Office, Army-CID Fraud Field Office, USDA-OIG Western Region, and GSA-OIG Western Division are investigating the case.
Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Anne C. Hsieh for the Northern District of California are prosecuting the case.
Tenderloin Neighborhood Drug Distributor Sentenced to 32 Months in PrisonRead the Press Release
SAN FRANCISCO – Yohan Murillo-Medina was sentenced today to serve 32 months in prison for possessing fentanyl and methamphetamine with the intent to distribute the drugs in the Tenderloin District of San Francisco, announced U.S. Attorney Ismail Ramsey and Drug Enforcement Administration (DEA) Special Agent in Charge Brian Clark. United States District Judge Jacqueline Scott Corley handed down the sentence.
Murillo-Medina, 22, of San Francisco, pleaded guilty to the charges on February 21, 2024. According to his plea agreement, Murillo-Medina admitted that in the early morning of January 30, 2023, he was near the corner of Golden Gate Avenue and Hyde Street where he was carrying a backpack and possessed a jacket. He ran when he noticed law enforcement officers approaching the area where he was located, and he discarded his backpack and jacket as he ran. Murillo-Medina acknowledged that he did this because he thought the officers were going to arrest him for possessing and trying to distribute the controlled substances in the backpack and jacket. After several blocks, Murillo-Medina stopped running and was detained. Law enforcement recovered the backpack and jacket which contained controlled substances including approximately 1,749.9 grams of a substance containing fentanyl; 20.7 grams of a substance containing methamphetamine; 26.7 grams of alprazolam pills; and 132.1 grams of marijuana.
On April 11, 2023, a federal grand jury indicted Murillo-Medina, charging him with one count of possession with intent to distribute fentanyl and one count of possession with intent to distribute methamphetamine, both in violation of 21 U.S.C. §§ 841(a)(1) and 841(b)(1)(C). Murillo-Medina pleaded guilty to both counts.
In addition to the 32-month prison sentence, Judge Corley ordered Murillo-Medina to serve three years of supervised release. Murillo-Medina has been detained since being taken into federal custody and will begin to serve his prison term immediately.
Assistant U.S. Attorney Jared Buszin is prosecuting the case with assistance from Laurence Macaraeg. The prosecution is the result of an investigation by the DEA and the San Francisco Police Department.
United States Files Complaint Against Adobe and Two Adobe Executives for Alleged Violations of Restore Online Shoppers’ Confidence ActRead the Press Release
SAN FRANCISCO – The Justice Department, together with the Federal Trade Commission (FTC), today announced a civil enforcement action against Adobe Inc. and two Adobe executives, Maninder Sawhney and David Wadhwani, for alleged violations of the Restore Online Shoppers’ Confidence Act (ROSCA). The lawsuit alleges that the defendants imposed a hidden “Early Termination Fee” on millions of online subscribers and that Adobe forced subscribers to navigate a complex and challenging cancellation process designed to deter them from cancelling subscriptions they no longer wanted.
Adobe Inc. is a software company that offers online subscriptions to design and productivity software applications via its website, Adobe.com. David Wadhwani is Adobe’s President of Digital Media Business, and Maninder Sawhney is Adobe’s Vice President of Digital Go to Market & Sales.
According to a complaint filed in the U.S. District Court for the Northern District of California, the defendants have systematically violated ROSCA by using fine print and inconspicuous hyperlinks to hide important information about Adobe’s subscription plans, including about a hefty Early Termination Fee that customers may be charged when they cancel their subscriptions. The complaint alleges that for years, Adobe has profited from this hidden fee, misleading consumers about the true costs of a subscription and ambushing them with the fee when they try to cancel, wielding the fee as a powerful retention tool.
The complaint alleges that Adobe has further violated ROSCA by failing to provide consumers with a simple mechanism to cancel their recurring, online subscriptions. Instead, Adobe allegedly protects its subscription revenues by thwarting subscribers’ attempts to cancel, subjecting them to a convoluted and inefficient cancellation process filled with unnecessary steps, delays, unsolicited offers and warnings.
The lawsuit seeks unspecified amounts of consumer redress and monetary civil penalties from the defendants, as well as a permanent injunction to prohibit them from engaging in future violations.
“Companies that sell goods and services on the internet have a responsibility to clearly and prominently disclose material information to consumers,” said U.S. Attorney Ismail J. Ramsey for the Northern District of California. “It is essential that companies meet that responsibility to ensure a healthy and fair marketplace for all participants. Those that fail to do so, and instead take advantage of consumers’ confusion and vulnerability for their own profit, will be held accountable.”
“The Justice Department is committed to stopping companies and their executives from preying on consumers who sign up for online subscriptions by hiding key terms and making cancellation an obstacle course,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will continue to enforce ROSCA against those who engage in such misconduct. No company, whether it is a small business or a member of the Fortune 500 like Adobe, is above the law.”
“Adobe trapped customers into year-long subscriptions through hidden early termination fees and numerous cancellation hurdles,” said Director Samuel Levine of the FTC’s Bureau of Consumer Protection. “Americans are tired of companies hiding the ball during subscription signup and then putting up roadblocks when they try to cancel. The FTC will continue working to protect Americans from these illegal business practices.”
Trial Attorneys Francisco L. Unger, Amber M. Charles, Zachary L. Cowan and Wesline N. Manuelpillai of the Civil Division’s Consumer Protection Branch and Assistant Director Zachary A. Dietert are handling the case, with assistance by Assistant U.S. Attorney David M. DeVito for the Northern District of California, in coordination with staff at the FTC’s Bureau of Consumer Protection.
For more information about the Consumer Protection Branch and its enforcement efforts, visit www.justice.gov/civil/consumer-protection-branch. For more information about the FTC, visit www.FTC.gov.
A complaint is merely a set of allegations that, if the case were to proceed to trial, the government would need to prove by a preponderance of the evidence.
The referenced media source is missing and needs to be re-embedded.Three Hells Angels Sentenced to Life in Prison for Racketeering Conspiracy and Related CrimesRead the Press Release
SAN FRANCISCO – Jonathan Nelson, a/k/a Jon Jon; Brian Wayne Wendt; and Russell Taylor Ott, a/k/a Rusty, were all sentenced to spend the rest of their lives in prison. The sentences were handed down by the Honorable Edward M. Chen, United States District Judge after a jury concluded in June of 2022 that the defendants were guilty of murder in aid of racketeering as part of their participation in a criminal enterprise involving their membership in and association with the Sonoma County charter of the Hells Angels Motorcycle Club (HASC).
“The record in this case describes a brutal brotherhood whose deeds should shock the conscience of us all,” said U.S. Attorney Ismail Ramsey. “While the life sentences cannot reverse the harm done to the defendants’ victims, it should bring some comfort to our communities to know these three defendants will never again have the ability to continue their destructive activities on our streets.”
“These three Hells Angels members were the most violent of the dozens convicted in this investigation. They used violence and fear to intimidate our community, but their brutality and disregard for human life have now earned them life in prison,” said FBI Special Agent in Charge Robert Tripp. “Today’s announcement is the direct result of years of persistence, dedication, and collaboration with our partners at the California Highway Patrol and Santa Rosa Police Department. Today, these individuals have faced the consequences of their actions, and today, we are a step closer in fulfilling our mission of eradicating organized criminal activity and keeping our neighborhoods safe.”
Nelson, 46, of Santa Rosa; Wendt, 45, of Tulare; and Ott, 70, of Santa Rosa were all members or associates of HASC. As set out in the indictment, the Hells Angels is a transnational violent outlaw motorcycle gang and the HASC is a subset of the gang whose members primarily operate in Sonoma County, Calif. On October 10, 2017, a federal grand jury indicted eleven members and associates of the HASC, charging the defendants with being part of a conspiracy whose members furthered the aims of the enterprise by engaging in a broad swath of criminal activity. The indictment described murder, narcotics distribution, assaults, robberies, extortion, illegal firearms possession, and obstruction of justice as being some of the activities in which the enterprise engaged to further its aims. The indictment also described how HASC members worked cooperatively with other Hells Angels chapters to engage in criminal activity. On September 11, 2018, a grand jury returned a superseding indictment adding a charge of murder related to the killing of HASC member Joel Silva.
The charges against Nelson, Wendt, and Ott were the subject of a nine-week trial that culminated in guilty verdicts against all three defendants. In finding all three defendants guilty, the jury concluded that each conspired to further the aims of the criminal conspiracy and that each played a role in carrying out the July 15, 2014 murder of HASC member Joel Silva. At trial, the government submitted evidence describing the role of each defendant in the murder. All three defendants concluded for various reasons that Silva should be killed. Nelson, who was then the president of HASC, arranged for Ott to take Silva to Fresno, and Silva agreed to travel there with Ott. After the two arrived at the Hell’s Angels Fresno clubhouse, Wendt, then president of the Fresno Hells Angels charter, shot Silva in the back of the head. On the morning of July 16, 2014, Silva’s body was delivered to a local crematory and was incinerated. In addition to the Silva murder, the evidence at trial included proof that HASC engaged in assaults, witness intimidation, extortion, drug trafficking, and robbery. For example, witnesses testified that HASC created a reputation for threatening anyone who goes to the police about HASC activity. In addition, testimony demonstrated that Nelson, Wendt, and other HASC members and associates threatened the lives of witnesses and their families to make clear that harm will come to anyone who cooperates with law enforcement.
In sum, the jury convicted all three defendants of participating in a racketeer influenced and corrupt organizations conspiracy, in violation of 18 U.S.C. § 1962(d); murder in aid of racketeering, in violation of 18 U.S.C. § 1959(a)(1); and conspiracy to commit murder in aid of racketeering, in violation of 18 U.S.C. § 1959(a)(5). In addition, Nelson also was convicted of assault with a dangerous weapon in aid of racketeering, in violation of 18 U.S.C. § 1959(a)(3), and use or possession of a firearm in relation to a crime of violence, in violation of 18 U.S.C. § 924(c)(1)(A).
Five other defendants pleaded guilty to charges of RICO conspiracy and have been sentenced to terms in prison of up to 84 months. Two defendants were convicted after trial of participating in a racketeer influenced and corrupt organizations conspiracy, in violation of 18 U.S.C. § 1962(d); conspiracy to commit murder in aid of racketeering, in violation of 18 U.S.C. § 1959(a)(5), assault with a dangerous weapon in aid of racketeering, in violation of 18 U.S.C. § 1959(a)(3), and witness intimidation 18 U.S.C. § 1512(b).
This prosecution is part of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
Assistant U.S. Attorneys Ajay K. Krishnamurthy and Kevin Barry are prosecuting the case with the assistance of Kevin Costello. The prosecution is the result of an investigation by the FBI, the Santa Rosa Police Department, the Sonoma County Sheriff’s Department, and the California Highway Patrol.
U.S. Attorney Joins with Special Agents in Charge of FBI and DEA to Announce Law Enforcement Surge Combatting Nighttime Fentanyl Trafficking in the Tenderloin District of San FranciscoRead the Press Release
SAN FRANCISCO – U.S. Attorney Ismail J. Ramsey joined with Special Agent in Charge Brian Clark of the Drug Enforcement Administration and Special Agent in Charge Robert Tripp of the Federal Bureau of Investigation to announce a surge in nighttime activities in the Tenderloin District of San Francisco. The surge is in furtherance of “All Hands on Deck,” a law enforcement initiative to address endemic drug dealing in the area. The law enforcement officials also released a video regarding the surge that can be seen here.
In November of 2023, U.S. Attorney Ramsey convened a press conference and circulated a press release announcing the new joint initiative. The press conference was attended by numerous federal, state, and local officials and dignitaries all of whom pledged to contribute resources to All Hands on Deck. The initiative, designed to change the basic cost/benefit analysis for fentanyl dealers throughout the Northern District of California, included several programmatic elements including the following:
• ramping up arrests of street dealers and suppliers of fentanyl who sell fentanyl near federal buildings (including near the James R. Browning U.S. Courthouse at 7th and Mission Streets, the Nancy Pelosi Federal Building on 7th and Mission Streets, and the Phillip Burton Federal Building and U.S. Courthouse at 450 Golden Gate Avenue);
• expanding efforts to track down and hold accountable suppliers of fentanyl;
• bringing additional charges against persons operating money services operations who turn a blind eye to drug trafficking and money laundering transactions on their networks;
• using targeted wiretaps, arrests, and searches throughout the Bay Area to enable drug seizures and to stem the flow of drugs and dealers coming into San Francisco from nearby counties;
• conducting regular joint federal and SFPD “jump out” operations in the Tenderloin to make on-the-spot arrests for open-air drug dealing;
• “fast-tracking” certain federal cases so that they take as little as a month from time of arrest to disposition; and
• federal “adoption” of state cases to raise the stakes by holding drug dealers accountable in the federal system.As part of today’s announcement, U.S. Attorney Ramsey confirmed that “since November, we have announced numerous lengthy sentences handed down to drug dealers, extraditions of alleged drug dealers from Honduras, the prosecution of persons operating money services operations who had turned a blind eye to drug trafficking and money laundering transactions on their networks, and the federalizing and fast tracking of certain cases traditionally handled by local governments.”
In addition, Special Agent in Charge Clark stated that in recent weeks, law enforcement officials have “ramped up night operations.” “Federal agents are now being deployed to hold drug dealers accountable regardless of the time of day. Our presence makes it clear there is no time to be safe from law enforcement in our neighborhoods,” he said. The night operations have resulted, thus far, in more than 20 federal criminal complaints as well as the seizure of pounds of drugs (including more than 11 lbs. of fentanyl and more than 5 lbs. of methamphetamine) and over $20,000 in seized cash.
Referring to the unveiling of All Hands on Deck, Special Agent in Charge Tripp stated, “As we stated last November, our objective is to change the equation for drug dealers. As the consequences of choosing to supply drugs in the Tenderloin become more severe, dealers and suppliers are going to have to reassess their risk. Is it worth it? We aim to show the answer is no.”
Since the inception of the initiative in November of 2023, the U.S. Attorney’s Office has charged over 90 individuals for drug distribution activities in the Tenderloin District of San Francisco. As of this week, over 70 of those cases have resulted in federal convictions.
San Jose Restaurant Owner Sentenced to Two-And-A-Half Years in Prison in Multi-Million-Dollar Covid-19 Fraud SchemeRead the Press Release
SAN FRANCISCO – A San Jose restauranteur who fraudulently obtained and misused millions of dollars in COVID-19 relief funds has been sentenced to 30 months in prison, announced United States Attorney Ismail J. Ramsey; Federal Bureau of Investigation (FBI) Special Agent in Charge Robert K. Tripp; and Small Business Administration (SBA) Office of Inspector General (OIG) Special Agent in Charge Weston King of the Western Region. The sentence was handed down by the Hon. Charles R. Breyer, Senior United States District Judge.
David Tai Leung, 58, of Sacramento, pleaded guilty in February 2024 to three counts of wire fraud, in violation of 18 U.S.C. § 1343, in connection with fraudulently obtained loans he received from the Restaurant Revitalization Fund (RRF) and the Paycheck Protection Program (PPP). He was originally indicted on those charges in August 2022.
According to his plea agreement, Leung—who co-owned and controlled the finances of a San Jose restaurant—submitted an application in May 2021 for $5 million in RRF funds that he certified he would use for approved business-related expenses like payroll, business rent or mortgage costs, and business maintenance expenses and utilities. However, Leung admitted he knew when he made these certifications that, in fact, he intended to use the RRF funds for purposes other than those he had indicated on the application. In reliance on the statements and certifications in Leung’s application, the SBA granted the application and funded the loan in full in June 2021. Leung admitted he then transferred $3.5 million to a personal investment account he controlled and used RRF funds to purchase securities and pay fees associated with the refinancing of the mortgage on his personal residence in Sacramento, all in violation of RRF program requirements restricting the use of RRF funds to specified eligible business-related uses.
In his plea agreement, Leung also admitted that he had previously applied for and received two PPP loans that he had misused to enrich himself—one for $257,100 that was funded in April 2020 and a second for $360,055 that was funded in March 2021. Rather than use those funds for approved business-related expenses, Leung admitted he used the money to enrich himself, including by making payments to a Lexus dealership and spending money at a casino in Northern California.
Ultimately, Leung admitted he received approximately $5.6 million in RRF and PPP funds and that he unlawfully used $3,359,701.28 of those funds. Leung agreed, and was ordered, to pay that amount in restitution.
The PPP was administered by the SBA as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a federal law enacted in 2020 to provide billions of dollars in emergency financial assistance to millions of Americans suffering from the economic effects of the COVID-19 pandemic. The RRF was administered by the SBA as part of the American Rescue Plan Act (ARPA), a federal law enacted in 2021 to provide funding and support to restaurants, bars, and similar businesses serving food and drink that suffered revenue losses as a result of the COVID-19 pandemic and related mitigation measures. The PPP and RRF provided forgivable loans and grants to small businesses for job retention and certain other qualified business expenses.
In addition to sentencing Leung to prison and ordering him to pay more than $3.3 million in restitution, Judge Breyer ordered the defendant to serve three years of supervised release to begin after his prison term is completed.
Assistant U.S. Attorneys Ivana Djak and Alethea Sargent are prosecuting the case. The prosecution is the result of an investigation by the FBI and SBA OIG.
Founder/CEO and Clinical President of Digital Health Company Arrested for $100M Adderall Distribution and Health Care Fraud SchemeRead the Press Release
SAN FRANCISCO – The founder and CEO of a California-based digital health company and its clinical president were arrested today in connection with their alleged participation in a scheme to distribute Adderall over the internet, conspire to commit health care fraud in connection with the submission of false and fraudulent claims for reimbursement for Adderall and other stimulants, and obstruct justice.
Ruthia He, the founder and CEO of Done Global Inc., was arrested in Los Angeles and will make her initial appearance at 1:30 p.m. PDT/4:30 p.m. EDT in Los Angeles. David Brody, the clinical president of Done Health P.C. (collectively, Done), was arrested in San Rafael, California, and will make his initial appearance at 10:30 a.m. PDT/1:30 p.m. EDT in San Francisco, California.
“As alleged, these defendants exploited the COVID-19 pandemic to develop and carry out a $100 million scheme to defraud taxpayers and provide easy access to Adderall and other stimulants for no legitimate medical purpose,” said Attorney General Merrick B. Garland. “Those seeking to profit from addiction by illegally distributing controlled substances over the internet should know that they cannot hide their crimes and that the Justice Department will hold them accountable.”
“The individuals charged today allegedly disregarded the first rule of medical care—do no harm—in order to maximize profits, and there is no place for such fraud in our healthcare system,” said Secretary of Homeland Security Alejandro N. Mayorkas. “The indictment levied against these individuals sends a clear message: the Department of Homeland Security, our Homeland Security Investigations personnel, and our partners across the federal government will hold accountable those providers and prescribers who prey on their patients.”
“The internet is a place of remarkable innovation, allowing its users to make innumerable types of transactions with greater ease. Such transactions, however, must always be legal,” said Deputy Chief of the Criminal Division Matthew Yelovich for the Northern District of California. “The indictment alleges that He and Brody used an internet-based infrastructure to illegally distribute drugs and to conspire to commit health care fraud. This office will always prosecute health care fraud and illegal drug distribution on the internet as vigorously as we do traditional frauds and illegal drug distribution.”
According to court documents, He and Brody allegedly conspired with others to provide easy access to Adderall and other stimulants in exchange for payment of a monthly subscription fee. The indictment alleges that the conspiracy’s purpose was for the defendants to unlawfully enrich themselves by, among other things, by increasing monthly subscription revenue and thus increasing the value of the company. Done allegedly arranged for the prescription of over 40 million pills of Adderall and other stimulants, and obtained over $100 million in revenue.
“As alleged in the indictment, the defendants provided easy access to Adderall and other stimulants by exploiting telemedicine and spending millions on deceptive advertisements on social media. They generated over $100 million in revenue by arranging for the prescription of over 40 million pills,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “These charges are the Justice Department’s first criminal drug distribution prosecutions related to telemedicine prescribing through a digital health company. As these charges make clear, corporate executives who put profit over the health and safety of patients—including by using technological innovation—will be held to account.”
He and Brody allegedly obtained subscribers by targeting drug seekers and spending tens of millions of dollars on deceptive advertisements on social media networks. They also allegedly intentionally structured the Done platform to facilitate access to Adderall and other stimulants, including by limiting the information available to Done prescribers, instructing Done prescribers to prescribe Adderall and other stimulants even if the Done member did not qualify, and mandating that initial encounters would be under 30 minutes. To maximize profits, He allegedly put in a place an “auto-refill” function that allowed Done subscribers to elect to have a message requesting a refill be auto-generated every month. He wrote that Done sought to “use the comp structure to dis-encourage follow-up” medical care by refusing to pay Done prescribers for any medical visits, telemedicine consultation, or time spent caring for patients after an initial consultation, and instead paying solely based on the number of patients who received prescriptions.
“The defendants in this case operated Done Global Inc., an online telehealth website that prescribed Adderall and other highly addictive medications to patients who bought a monthly subscription. The defendants allegedly preyed on Americans and put profits over patients by exploiting telemedicine rules that facilitated access to medications during the unprecedented COVID-19 public health emergency,” said DEA Administrator Anne Milgram. “Instead of properly addressing medical needs, the defendants allegedly made millions of dollars by pushing addictive medications. In many cases, Done Global prescribed ADHD medications when they were not medically necessary. In 2022 the FDA issued a notice of shortages in prescription stimulants, including Adderall. Any diversion of Adderall and other prescription stimulant pills to persons who have no medical need only exacerbates this shortage and hurts any American with a legitimate medical need for these drugs. The DEA will continue to hold accountable anyone, including company executives, that uses telehealth platforms to put profit above patient safety.”
“As more health care needs are met through telemedicine, we will not tolerate fraud schemes that seek to recklessly exploit digital technologies,” said Honorable Christi A. Grimm of the Department of Health and Human Services Inspector General (HHS-OIG). “We will continue to work with our law enforcement partners to protect the enrollees of federal health care programs by ensuring that requirements for the appropriate, legal prescribing of stimulants and other drugs are always met, and those who choose to violate them are held accountable.”
He and Brody allegedly persisted in the conspiracy even after being made aware that material was posted on online social networks about how to use Done to obtain easy access to Adderall and other stimulants, and that Done members had overdosed and died. They also allegedly concealed and disguised the conspiracy by making fraudulent representations to media outlets to forestall government investigations and action and induce third parties to continue doing business with Done.
“Healthcare fraud is not a victimless crime. It levies a tremendous cost on our nation’s healthcare systems and economy,” said Executive Associate Director Katrina W. Berger of Homeland Security Investigations (HSI). “Today’s announcement should serve as a reminder that it is only a matter of time before anyone engaging in fraudulent activity is caught and brought to justice.”
“Instead of prioritizing the health of their customers, He and Brody’s telemedicine company allegedly prioritized profits—more than $100 million worth—by fraudulently prescribing medications like Adderall and other stimulants,” said Chief Guy Ficco of IRS Criminal Investigation. “This led customers to addiction, abuse, and overdoses, which the company tried to conceal by making false representations to the media in order to deter oversight by government agencies.”
He, Brody, and others also conspired to defraud pharmacies and Medicare, Medicaid, and the commercial insurers to cause the pharmacies to dispense Adderall and other stimulants to Done members in violation of their corresponding responsibility; Medicare, Medicaid, and the commercial insurers to pay for the cost of these drugs; and Done members to continue to pay subscription fees to Done. He and others allegedly made false and fraudulent representations about Done’s prescription policies and practices to induce the pharmacies to fill Done’s prescriptions. As a result, Medicare, Medicaid, and the commercial insurers paid in excess of approximately $14 million.
The indictment also alleges that He and Brody conspired to obstruct justice after a grand jury subpoena was issued to another telehealth company and in anticipation of a subpoena being issued to Done, including by deleting documents and communications, using encrypted messaging platforms instead of company email, and ultimately failing to produce documents in response to a subpoena issued to Done by a federal grand jury.
If convicted, He and Brody each face a maximum penalty of 20 years in prison on the conspiracy to distribute controlled substances and distribution of controlled substances counts.
The DEA, HHS-OIG, HSI, and IRS Criminal Investigation are investigating the case.
Assistant U.S. Attorneys Kristina Green, Katherine Lloyd-Lovett, and Lloyd Farnham for the Northern District of California and Principal Assistant Chief Jacob Foster and Trial Attorney Raymond Beckering III of the DOJ’s Criminal Division’s Fraud Section are prosecuting the case.
The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,400 defendants who collectively have billed federal health care programs and private insurers more than $27 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.
Any patient of Done or medical professional who has been involved with the allegedly illegal conduct should call to report this conduct to the DEA hotline at 646-466-5159.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
dkt_1_he_brody_indictment.pdfFounder/CEO and Clinical President of Digital Health Company Arrested for $100M Adderall Distribution and Health Care Fraud SchemeRead the Press Release
The founder and CEO of a California-based digital health company and its clinical president were arrested today in connection with their alleged participation in a scheme to distribute Adderall over the internet, conspire to commit health care fraud in connection with the submission of false and fraudulent claims for reimbursement for Adderall and other stimulants, and obstruct justice.
Ruthia He, the founder and CEO of Done Global Inc., was arrested in Los Angeles and will make her initial appearance at 1:30 p.m. PDT/4:30 p.m. EDT in Los Angeles. David Brody, the clinical president of Done Health P.C. (collectively, Done), was arrested in San Rafael, California, and will make his initial appearance at 10:30 a.m. PDT/1:30 p.m. EDT in San Francisco, California.
“As alleged, these defendants exploited the COVID-19 pandemic to develop and carry out a $100 million scheme to defraud taxpayers and provide easy access to Adderall and other stimulants for no legitimate medical purpose,” said Attorney General Merrick B. Garland. “Those seeking to profit from addiction by illegally distributing controlled substances over the internet should know that they cannot hide their crimes and that the Justice Department will hold them accountable.”
“The individuals charged today allegedly disregarded the first rule of medical care—do no harm—in order to maximize profits, and there is no place for such fraud in our healthcare system,” said Secretary of Homeland Security Alejandro N. Mayorkas. “The indictment levied against these individuals sends a clear message: the Department of Homeland Security, our Homeland Security Investigations personnel, and our partners across the federal government will hold accountable those providers and prescribers who prey on their patients.”
“As alleged in the indictment, the defendants provided easy access to Adderall and other stimulants by exploiting telemedicine and spending millions on deceptive advertisements on social media. They generated over $100 million in revenue by arranging for the prescription of over 40 million pills,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “These charges are the Justice Department’s first criminal drug distribution prosecutions related to telemedicine prescribing through a digital health company. As these charges make clear, corporate executives who put profit over the health and safety of patients—including by using technological innovation—will be held to account.”
According to court documents, He and Brody allegedly conspired with others to provide easy access to Adderall and other stimulants in exchange for payment of a monthly subscription fee. The indictment alleges that the conspiracy’s purpose was for the defendants to unlawfully enrich themselves by, among other things, by increasing monthly subscription revenue and thus increasing the value of the company. Done allegedly arranged for the prescription of over 40 million pills of Adderall and other stimulants, and obtained over $100 million in revenue.
“The internet is a place of remarkable innovation, allowing its users to make innumerable types of transactions with greater ease. Such transactions, however, must always be legal,” said Deputy Chief of the Criminal Division Matthew Yelovich for the Northern District of California. “The indictment alleges that He and Brody used an internet-based infrastructure to illegally distribute drug sales and to conspire to commit health care fraud. This office will always prosecute health care fraud and illegal drug distribution on the internet as vigorously as we do traditional frauds and illegal drug distribution.”
He and Brody allegedly obtained subscribers by targeting drug seekers and spending tens of millions of dollars on deceptive advertisements on social media networks. They also allegedly intentionally structured the Done platform to facilitate access to Adderall and other stimulants, including by limiting the information available to Done prescribers, instructing Done prescribers to prescribe Adderall and other stimulants even if the Done member did not qualify, and mandating that initial encounters would be under 30 minutes. To maximize profits, He allegedly put in a place an “auto-refill” function that allowed Done subscribers to elect to have a message requesting a refill be auto-generated every month. He wrote that Done sought to “use the comp structure to dis-encourage follow-up” medical care by refusing to pay Done prescribers for any medical visits, telemedicine consultation, or time spent caring for patients after an initial consultation, and instead paying solely based on the number of patients who received prescriptions.
“The defendants in this case operated Done Global Inc., an online telehealth website that prescribed Adderall and other highly addictive medications to patients who bought a monthly subscription. The defendants allegedly preyed on Americans and put profits over patients by exploiting telemedicine rules that facilitated access to medications during the unprecedented COVID-19 public health emergency,” said DEA Administrator Anne Milgram. “Instead of properly addressing medical needs, the defendants allegedly made millions of dollars by pushing addictive medications. In many cases, Done Global prescribed ADHD medications when they were not medically necessary. In 2022 the FDA issued a notice of shortages in prescription stimulants, including Adderall. Any diversion of Adderall and other prescription stimulant pills to persons who have no medical need only exacerbates this shortage and hurts any American with a legitimate medical need for these drugs. The DEA will continue to hold accountable anyone, including company executives, that uses telehealth platforms to put profit above patient safety.”
“As more health care needs are met through telemedicine, we will not tolerate fraud schemes that seek to recklessly exploit digital technologies,” said Honorable Christi A. Grimm of the Department of Health and Human Services Inspector General (HHS-OIG). “We will continue to work with our law enforcement partners to protect the enrollees of federal health care programs by ensuring that requirements for the appropriate, legal prescribing of stimulants and other drugs are always met, and those who choose to violate them are held accountable.”
He and Brody allegedly persisted in the conspiracy even after being made aware that material was posted on online social networks about how to use Done to obtain easy access to Adderall and other stimulants, and that Done members had overdosed and died. They also allegedly concealed and disguised the conspiracy by making fraudulent representations to media outlets to forestall government investigations and action and induce third parties to continue doing business with Done.
“Healthcare fraud is not a victimless crime. It levies a tremendous cost on our nation’s healthcare systems and economy,” said Executive Associate Director Katrina W. Berger of Homeland Security Investigations (HSI). “Today’s announcement should serve as a reminder that it is only a matter of time before anyone engaging in fraudulent activity is caught and brought to justice.”
“Instead of prioritizing the health of their customers, He and Brody’s telemedicine company allegedly prioritized profits—more than $100 million worth—by fraudulently prescribing medications like Adderall and other stimulants,” said Chief Guy Ficco of IRS Criminal Investigation. “This led customers to addiction, abuse, and overdoses, which the company tried to conceal by making false representations to the media in order to deter oversight by government agencies.”
He, Brody, and others also conspired to defraud pharmacies and Medicare, Medicaid, and the commercial insurers to cause the pharmacies to dispense Adderall and other stimulants to Done members in violation of their corresponding responsibility; Medicare, Medicaid, and the commercial insurers to pay for the cost of these drugs; and Done members to continue to pay subscription fees to Done. He and others allegedly made false and fraudulent representations about Done’s prescription policies and practices to induce the pharmacies to fill Done’s prescriptions. As a result, Medicare, Medicaid, and the commercial insurers paid in excess of approximately $14 million.
The indictment also alleges that He and Brody conspired to obstruct justice after a grand jury subpoena was issued to another telehealth company and in anticipation of a subpoena being issued to Done, including by deleting documents and communications, using encrypted messaging platforms instead of company email, and ultimately failing to produce documents in response to a subpoena issued to Done by a federal grand jury.
If convicted, He and Brody each face a maximum penalty of 20 years in prison on the conspiracy to distribute controlled substances and distribution of controlled substances counts.
The DEA, HHS-OIG, HSI, and IRS Criminal Investigation are investigating the case.
Principal Assistant Chief Jacob Foster and Trial Attorney Raymond Beckering III of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Kristina Green, Katherine Lloyd-Lovett, and Lloyd Farnham for the Northern District of California are prosecuting the case.
The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,400 defendants who collectively have billed federal health care programs and private insurers more than $27 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.
Any patient of Done or medical professional who has been involved with the allegedly illegal conduct should call to report this conduct to the DEA hotline at 646-466-5159.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Bay Area Man Sentenced to 24 Months of Imprisonment for Breaking and Entering A Mail Truck and Stealing over 700 Pieces of MailRead the Press Release
OAKLAND – Craig Curtis Freeman was sentenced to 24 months of imprisonment for breaking and entering a U.S. Postal Service mail truck and mail theft, announced United States Attorney Ismail J. Ramsey and U.S. Postal Inspection Service (USPIS) Inspector in Charge Rafael Nuñez. The sentence was handed down on May 29, 2024, by the Honorable Haywood S. Gilliam, Jr., U.S. District Judge.
Freeman, 35, of Sacramento, pleaded guilty pursuant to a plea agreement on the same day he was sentenced. Court filings describe how on December 30, 2022, a mail carrier, while on his route, heard a gunshot and observed two people – Freeman and a co-defendant – taking mail from his mail truck and then fleeing in a vehicle. In his plea agreement, Freeman admitted that he had been driving a stolen car when he pulled up behind the U.S. Postal Service mail truck and exited his vehicle. Freeman admitted he broke the lock of the truck’s rear cargo door, removed more than 700 pieces of mail, placed it into the stolen car and drove away. Within minutes, law enforcement caught up with Freeman, who was still with the co-defendant, and attempted a traffic stop. The defendants’ vehicle crashed into a truck after which both thieves fled from the scene; Freeman jumped into the truck and his co-defendant continued to flee in the stolen car. Freeman drove the truck at a high rate of speed through the streets of San Leandro before entering I-880 North through the exit off-ramp. Freeman was able to evade police while driving the stolen truck in the wrong direction on the freeway but was later apprehended. The co-defendant, who fled in the stolen car Freeman initially drove, was quickly apprehended after crashing and attempting to flee on foot.
A federal grand jury indicted Freeman on March 28, 2023, charging him with breaking and entering into a carrier facility, in violation of 18 U.S.C. § 2117, and possession of stolen mail and mail theft, in violation of 18 U.S.C. § 1708. Freeman pleaded guilty to both counts.
This case was charged in 2023 as part of a law enforcement response to an uptick in burglaries, robberies, assaults, and homicides targeting postal workers. The law enforcement surge was announced at a press conference on October 10, 2023, at which U.S. Attorney Ramsey and Postal Inspector in Charge Nuñez discussed the crimes and the federal response to them. Postal Inspector in Charge Nuñez stated, “there is no more important mission for us as federal agents than protecting postal workers from crime and violence …. To any copycats or wannabes out there who might consider robbing a postal worker, I ask you to consider the years you will face in federal prison, the price on your head, and that postal inspectors will not stop hunting you. The proceeds of this crime are not worth your freedom.” U.S. Attorney Ramsey reinforced Postal Inspector in Charge Nuñez’s remarks by explaining that federal laws have been “carefully crafted to protect the sanctity of the mail, including the sensitive information we entrust to the mail system; the safety of the federal employees and contractors who deliver the mail; and the federal property that is used to ensure mail delivery.”
Special Assistant U.S. Attorney Cynthia Johnson prosecuted the case with the assistance of Beth Margen. The prosecution is the result of an investigation by the U.S. Postal Inspection Service, the Alameda County Sheriff’s Office, and the Oakland Police Department.
El Sobrante Resident Charged with Fraudulently Obtaining More Than $1.1 Million in Pandemic-Relief Funds in 2020 and 2021Read the Press Release
OAKLAND – A federal grand jury has returned an indictment charging a Contra Costa County man with wire fraud and other crimes relating to a scheme in which he fraudulently obtained more than $1.1 million in government-backed COVID-19 relief funds, announced United States Attorney Ismail J. Ramsey; Federal Bureau of Investigation (FBI) Special Agent in Charge Robert K. Tripp; and Small Business Administration (SBA) Office of Inspector General (OIG) Special Agent in Charge Weston King of the Western Region.
According to the indictment filed this week, Lane Jenkins, 53, of El Sobrante, California, was president of a company called A & L Investments LLC (A&L), which was founded in 2016, headquartered in El Sobrante, and purported to purchase, renovate, and sell distressed properties. The indictment alleges that, in February 2021 and April 2021, Jenkins applied for and received two Paycheck Protection Program (PPP) loans totaling more than $1 million on the basis of false and fraudulent representations that A&L had dozens of employees and hundreds of thousands of dollars in monthly payroll expenses. In fact, A&L had zero employees and no monthly payroll. In December 2021, Jenkins applied for and received forgiveness of the first of those two loans, falsely certifying he had used the PPP funds to make payroll for A&L’s nonexistent employees. In fact, Jenkins had used the money for personal expenses and to pay off personal debts.
The indictment also states that, in July 2020, Jenkins applied for and received an Economic Injury Disaster Loan (EIDL) of nearly $95,000 for a maid and cleaning service he said he operated as a sole proprietor. The application falsely stated that Jenkins had 10 employees and gross revenues of $241,353. In fact, he had no employees and no revenues. Rather than use the EIDL funds he received on approved business expenses, Jenkins used that money to enrich himself.
The PPP was administered by the SBA as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a federal law enacted in March 2020 to provide billions of dollars in emergency financial assistance to millions of Americans suffering from the economic effects of the COVID-19 pandemic. The PPP provided forgivable loans to small businesses for job retention and certain other qualified business expenses. PPP funds were disbursed by SBA-approved third-party lenders.
The EIDL program is also administered by the SBA. It provides low-interest financing to small businesses, renters, and homeowners in regions affected by declared disasters. As relevant here, the CARES Act authorized the SBA to make EIDL loans of up to $2 million to eligible small businesses experiencing substantial financial disruption due to the COVID-19 pandemic. EIDL funds are disbursed directly by the SBA.
The Indictment charges three counts of wire fraud, in violation of 18 U.S.C. § 1343, and one count of submitting false writings to a government agency, in violation of 18 U.S.C. § 1001(a)(3).
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Jenkins faces a maximum statutory sentence of 20 years in prison on each of the three counts of wire fraud and a maximum statutory sentence of 5 years in prison on the fourth count, which charges him with submitting false writings to a government agency. 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.
Jenkins has not yet appeared in court to face the charges against him.
Assistant U.S. Attorney Kenneth Chambers is prosecuting the case. The prosecution is the result of an investigation by the FBI and SBA-OIG.
2024-05-23_-_1_indictment_4-24-cr-00283-amo_v.1.pdfBay Area Serial Bank Robber Sentenced to More Than Five Years in PrisonRead the Press Release
SAN FRANCISCO – Brandon Elder was sentenced to 63 months in prison for bank robbery, announced United States Attorney Ismail J. Ramsey and Federal Bureau of Investigation (FBI), San Francisco Field Office, Special Agent in Charge Robert K. Tripp. The sentence was handed down by the Hon. James Donato, United States District Judge.
Elder, 29, of Antioch, pleaded guilty to the charge on December 14, 2023. According to court filings, Elder walked into a bank in the Marina District of San Francisco on September 20, 2022, wearing a black hoodie, black facemask, and blue gloves. He approached the teller window, stated “this is a robbery,” and demanded “50s” and “100s.” The teller handed over $10,000 in cash to Elder, who ran out of the bank and back to his getaway car in a nearby parking garage. Elder was arrested two days later in Pleasant Hill, Calif., while shoplifting a PlayStation from a Target with $7,867 cash in his pocket. A grand jury indicted Elder on November 1, 2022, charging him with one count of bank robbery, in violation of 18 U.S.C. § 2113(a). Elder pleaded guilty to the charge without a written plea agreement.
Elder committed this bank robbery while still on post-release community supervision. He had been released from state custody only 19 days earlier after serving a custodial sentence related to the robbery of a bank he committed on January 26, 2022, in Brentwood, Calif. In addition, Elder already had been convicted of 11 other thefts in state court, including a violent incident during which he slashed a loss prevention officer with a box cutter.
“Repeat offenders like Brandon Elder should not be allowed to continue terrorizing the community,” said United States Attorney Ismail J. Ramsey. “Enough is enough. This Office will ensure that criminals like Mr. Elder face serious repercussions for their actions.”
“Elder used threats and intimidation to terrorize the employees of the bank he robbed,” said Special Agent in Charge Robert Tripp. “His complete disregard for the law demanded justice, and justice he received with this sentence. The FBI will not waver when it comes to preserving the peace of our community by taking dangerous criminals off the streets.”
In addition to sentencing Elder to prison, Judge Donato ordered the defendant to serve a year of supervised release to begin after his prison term is completed. The defendant was immediately remanded into custody.
Assistant U.S. Attorney George Hageman is prosecuting the case with the assistance of Lakisha Holliman. The prosecution is the result of an investigation by the FBI.
Eureka Resident Sentenced to 10 Years in Prison for Possession of Child PornographyRead the Press Release
SAN FRANCISCO – William Wood has been sentenced to 120 months in prison following his conviction on a charge of possession of child pornography, announced United States Attorney Ismail J. Ramsey and Federal Bureau of Investigation (FBI) Special Agent in Charge Robert K. Tripp. The sentence was imposed by the Hon. Trina L. Thompson, United States District Judge, on May 17, 2024.
Wood, 62, of Eureka, California, pleaded guilty in October 2023 to one count of possession of child pornography, in violation of 18 U.S.C. § 2252(a)(4)(B) and (b)(2). He was originally indicted on that charge by a federal grand jury in December 2022.
According to the government’s sentencing memorandum, the defendant possessed more than 300 images and videos depicting child pornography on his electronic devices, including approximately 24 images depicting infants or toddlers and hundreds more depicting prepubescent children. The government further argued in its sentencing papers that the defendant used social media to send child pornography to another individual, including images depicting infants or toddlers and prepubescent children engaged in sexually explicit conduct.
In addition to sentencing Wood to prison, Judge Thompson ordered the defendant to serve five years of supervised release to begin after his prison term is completed and to pay $35,000 in restitution.
Assistant United States Attorney Kelsey Davidson is prosecuting the case with the assistance of Sara Slattery. The prosecution is the result of an investigation by the FBI, with assistance from the Humboldt County Sheriff’s Office.
Former IRS Revenue Officer and His Brother Among Six Defendants Sentenced to Prison in Multi-Million-Dollar Covid-19 Fraud SchemeRead the Press Release
OAKLAND – Six defendants, including a former IRS revenue officer and his brother, have been sentenced to prison terms ranging from 12 to 30 months following their convictions on charges that they fraudulently obtained millions of dollars in COVID-19 pandemic relief funds through the Paycheck Protection Program (PPP), announced United States Attorney Ismail J. Ramsey; IRS Criminal Investigation (IRS-CI) Acting Special Agent in Charge Michael Mosley of the Oakland Field Office; Small Business Administration (SBA) Office of Inspector General (OIG) Special Agent in Charge Weston King of the Western Region; and Office of Inspector General for the Board of Governors of the Federal Reserve System and Consumer Financial Protection Bureau Special Agent in Charge Jon Ellwanger of the Western Region. The sentences were handed down by the Hon. Araceli Martínez-Olguín, United States District Judge.
Five defendants—Frank Mosley, 58, of Oakland; his brother Reginald Mosley, 60, of Sacramento; Marcus Wilborn, 50, of Elk Grove, California; Aaron Boren, 56, of Roseville, California; and Scott Conway, 52, of Rocklin, California—pleaded guilty to one count of conspiracy to commit bank fraud, in violation of 18 U.S.C. § 1349. The Mosley brothers, both of whom were sentenced to 30 months in prison, also pleaded guilty to one count of aiding and advising in the filing of false tax returns, in violation of 26 U.S.C. § 7201(2). Wilborn was sentenced to 18 months in prison and Boren and Conway were each sentenced to 12 months and one day in prison for their roles in the scheme. The sixth defendant—Kenya Ellis, 55, of Los Angeles—pleaded guilty to one count of bank fraud, in violation of 18 U.S.C. § 1344, and was sentenced to 12 months in prison. All six defendants were originally charged in May 2023.
According to the defendants’ plea agreements and the parties’ sentencing memoranda, Frank Mosley was a tax enforcement officer for the City of Oakland and a former IRS revenue officer who conspired with others between July 2020 and September 2021 to submit fraudulent PPP loan applications and to spend his portion of the more than $3 million in loan funds he and his co-conspirators fraudulently obtained on personal investments and expenses.
“At the height of a global pandemic wreaking havoc on American businesses and families, these defendants fraudulently obtained millions of dollars in aid money intended to help those who desperately needed it and used that money to enrich themselves,” said United States Attorney Ismail J. Ramsey. “That one of these defendants was a former IRS revenue officer makes their crime that much more concerning. These sentences should help rebuild some of the public trust eroded by the defendants’ greed.”
“Frank and Reginald Mosley, along with their co-conspirators, ran an abhorrent scheme that fraudulently obtained over $3 million of funds designed to help struggling businesses in the wake of a global pandemic. Even worse, Frank Mosley, a former IRS revenue agent, exploited his expertise to help cover up the scheme,” said IRS-CI Acting Special Agent in Charge Michael Mosley. “No one is above the law. Fostering confidence in our financial system and public institutions is at the core of IRS Criminal Investigation’s mission.”
“The Mosley brothers orchestrated a scheme that defrauded the federal government of over $3 million in pandemic relief funds intended to help distressed businesses for their own personal gain,” said Jon Ellwanger, Special Agent in Charge, Western Region, Office of Inspector General for the Board of Governors of the Federal Reserve System and Consumer Financial Protection Bureau. “They and their co-conspirators have now been brought to justice for their actions. We are proud to have worked with our federal law enforcement partners and the U.S. Attorney’s Office to achieve this result.”
“This sentencing sends a clear message that those who defraud SBA’s programs will be held accountable,” said SBA OIG’s Western Region Special Agent in Charge Weston King. “Our office will remain steadfast in pursuing those who exploit such vital resources for personal gain, ensuring accountability, and justice for the American taxpayer. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their unwavering commitment to pursuing justice in this case.”
According to their plea agreements, the Mosley brothers, Wilborn, Boren, and Conway each admitted their involvement in a scheme to obtain millions of dollars in PPP loans by submitting fraudulent documents on behalf of companies the defendants falsely certified had dozens of employees and hundreds of thousands of dollars in monthly payroll expenses. In fact, these were shell companies with no legitimate employees and no payroll expenses. The defendants also admitted they did not use the PPP loan funds they fraudulently obtained on legitimate business expenses; rather, they admitted using those funds for personal expenses and investments, to pay their personal credit card bills, and to transfer money to family members.
According to their plea agreements, Frank and Reginald Mosley submitted a fraudulent loan application on behalf of Forward Thinking Investors, Inc., an entity they controlled, in August 2020. They received more than $1 million in PPP funds, and Reginald Mosley thereafter recruited acquaintances (including Wilborn, Boren, and Conway) who owned companies that existed before February 2020 to submit additional fraudulent loan applications. Frank and Reginald Mosley helped prepare fraudulent loan applications for Wilborn, Boren, and Conway, who kicked back some of the PPP funds they received to the Mosley brothers. In fact, Frank and Reginald Mosley admitted they drafted a contract under which they would receive at least 15 percent of any fraudulently obtained PPP funds in exchange for their assistance in preparing and submitting fraudulent applications for Wilborn, Boren, and Conway. Finally, Frank and Reginald Mosley admitted filing fraudulent payroll tax returns with the IRS to cover up their scheme.
In her plea agreement, Ellis admitted she aided and advised the Mosley brothers and others in connection with their fraudulent PPP loan applications. She also admitted that, in 2020 and 2021, she fraudulently obtained almost $300,000 in PPP loans and other pandemic-relief aid in connection with an entity she falsely claimed to own and about which she made other material false statements, including regarding its number of employees and monthly payroll expenses. In fact, Ellis was unaffiliated with the entity, whose true owner had no awareness of, or involvement in, the preparation and submission of Ellis’ loan applications.
The PPP was administered by the SBA as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a federal law enacted in March 2020 to provide billions of dollars in emergency financial assistance to millions of Americans suffering from the economic effects of the COVID-19 pandemic. The PPP provided forgivable loans to small businesses for job retention and certain other qualified business expenses.
In addition to sentencing all six defendants to prison, Judge Martínez-Olguín ordered each of them to serve three years of supervised release to begin after their prison terms are completed. Judge Martínez-Olguín also ordered each defendant to pay restitution in an amount to be set at a later date.
Assistant U.S. Attorney Abraham Fine is prosecuting these cases with assistance from Kay Konopaske. The prosecutions are the result of an investigation by IRS-CI, SBA OIG, and the Office of Inspector General for the Board of Governors of the Federal Reserve System and Consumer Financial Protection Bureau.
David DePape Sentenced to 30 Years in Prison After Conviction on Assault and Attempted Kidnapping ChargesRead the Press Release
SAN FRANCISCO –David DePape was sentenced today to 360 months in prison following his conviction on assault and attempted kidnapping charges in connection with his Oct. 28, 2022, intrusion into the home of Speaker Emerita Nancy Pelosi and her husband Paul Pelosi, announced United States Attorney Ismail J. Ramsey and Federal Bureau of Investigation Special Agent in Charge Robert K. Tripp. The sentence was handed down by the Hon. Jacqueline Scott Corley, U.S. District Judge. U.S. Attorney Ramsey recorded a video statement commenting on today’s sentence that is available here: https://youtu.be/3o9EH157Ffk
“This sentence is a warning: violence against those who serve the public and their families will not be tolerated,” said Attorney General Merrick B. Garland. “The Justice Department will aggressively prosecute those who target public servants and their families with violence. In a democracy, people vote, argue, and debate to achieve the policy outcome they desire. But the promise of democracy is that people will not employ violence to affect that outcome.”
In an additional statement, U.S. Attorney Ramsey said, “David DePape, when he planned his attempted kidnapping, claimed he intended to punish the Speaker Emerita and teach Congress as a whole a lesson. He then violently assaulted Mr. Pelosi. Today’s sentence is a stern reminder to those who pursue violence against public officials and institutions that significant punishment will follow. I want to thank the FBI, the San Francisco Police Department, the U.S. Capitol Police and the members of my prosecution team—including Helen Gilbert, Laura Vartain and Maddie Wachs —for bringing this matter to a swift and decisive conclusion. We hope that the conclusion of the federal case brings a measure of healing to Mr. Pelosi and his family.”
“Today’s sentencing of David DePape to a significant prison term sends a clear message that violence and intimidation have no place in our community nor our political discourse. DePape's attack, fueled by misguided ideology, underscores the dangers posed by extremist beliefs,” said FBI Special Agent in Charge Robert Tripp. “The FBI is committed to protecting all citizens and ensuring that our democracy remains strong and resilient against those who seek to harm it.”
The evidence at trial established that weeks before the attack, DePape, 44, of Richmond, California, targeted Nancy Pelosi, who was then Speaker of the U.S. House of Representatives, and collected personal information about her, including her home address. DePape kept the information in a computer file he labeled “favorite politicians.” DePape intended to kidnap the then-Speaker, hold her hostage, and break her kneecaps.
The evidence at trial demonstrated that on the night of the assault, DePape used public transportation to travel from the East Bay to San Francisco while carrying two backpacks that contained a hammer, sledgehammer, duct tape, rope, zip ties, and electronic items, among other items. After arriving at the Pelosi residence, DePape used the hammer to break the window of a glass door and enter the home. Then-Speaker Pelosi was not home and her husband, Paul Pelosi, was sleeping on the third floor of the home. DePape roamed the home until he found Mr. Pelosi in the third-floor bedroom.
The trial evidence demonstrated that DePape woke Mr. Pelosi and, while standing three to four feet from him holding the hammer and restraints, made various threats including, “I will take you out.” Mr. Pelosi managed to walk to his bathroom and call 9-1-1, during which he carefully used language to alert the emergency operator to the situation without agitating DePape.
Mr. Pelosi convinced defendant to go downstairs to the first floor and continued talking to DePape. When the police arrived, Mr. Pelosi opened the door and the police ordered DePape to drop the hammer he was holding. Instead, DePape struck Mr. Pelosi three times with full force, fracturing his skull. The responding officers immediately tackled Depape and took him into custody.
On November 9, 2022, a federal grand jury indicted DePape, charging him with one count of assault upon an immediate family member of a United States official with the intent to impede, intimidate, or interfere with the official while engaged in the performance of official duties or with intent retaliate against the official on account of the performance of official duties, and one count of attempted kidnapping of a United States official on account of the performance of official duties. A jury convicted DePape of both charges.
The Honorable Jacqueline Corley sentenced DePape to the statutory maximums on each count, which were 30 years in prison for the assault charge and 20 years in prison for the attempted kidnapping charge, the two sentences to run concurrently.
In addition to the prison term, Judge Corley ordered the defendant to serve five years of supervised release, to begin after the prison term and ordered that DePape will receive credit for the little over 18 months that he has been in custody since his crime.
In sentencing DePape, Judge Corley stated that DePape may still be dangerous, that his use of violence was “gratuitous,” and that because he entered the home of a politician, future would-be leaders now must consider whether entering public service through politics is worth the risk. “Because of your actions,” said Judge Corley, “we will never know what we lost.”
The National Security and Cyber Section of the U.S. Attorney’s Office for the Northern District of California is prosecuting the case. FBI San Francisco, the U.S. Capitol Police, and the San Francisco Police Department are investigating the case.
Brentwood Resident Charged with Receipt of Child Pornography and Possession of Unregistered Short-Barreled RifleRead the Press Release
OAKLAND – A federal grand jury has indicted Michael Patterson for receipt of child pornography, in violation of 18 U.S.C. § 2252(a)(2) and (b), and possession of an unregistered short-barreled rifle, in violation of 26 U.S.C. § 5861(d), announced United States Attorney Ismail J. Ramsey, United States Secret Service (USSS) Special Agent in Charge Shawn M. Bradstreet, and Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) Special Agent in Charge Jennifer Cicolani. The indictment, filed April 18, 2024, was unsealed on May 6, 2024, at Patterson’s initial federal court appearance before U.S. Magistrate Judge Donna M. Ryu. On May 16, 2024, Magistrate Judge Ryu ordered Patterson detained pending trial.
According to the government’s detention memorandum, in late May 2023, the Silicon Valley Internet Crimes Against Children Task Force (SV-ICAC) conducted an operation to identify and arrest adults engaging in sexual conversations with undercover chatters posing online as minors. During this operation, Patterson engaged in an online conversation with an undercover officer posing as a 13-year-old girl, and eventually planned to meet and engage in sexual conduct. Officers arrested Patterson when he arrived at the agreed upon location. In Patterson’s car, officers located the phone Patterson had used to communicate with the undercover officer, and next to the phone, officers located a loaded .38 caliber revolver. The government further argued that after his arrest, Patterson was found to have been in possession of over 600 videos and over 1,200 individual images depicting child sexual abuse material on various electronic devices, as well as dozens of firearms, firearm components, boxes of ammunition, and firearm manufacturing machines and components, including a computerized gun milling machine. Three of the firearms were unregistered short-barreled rifles and one was an unregistered fully automatic machine gun.
Patterson is scheduled to appear before the Honorable U.S. District Judge Haywood S. Gilliam, Jr. on June 26, 2024, in Oakland.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces a maximum sentence of twenty years in prison and a fine of $250,000, plus restitution if appropriate, for a violation of 18 U.S.C. § 2252(a)(2) and (b), and 10 years imprisonment and a fine of $10,000 for a violation of 26 U.S.C. § 5861(d). However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Jonah Ross is prosecuting the case with the assistance of Kay Konopaske and Claudia Hyslop. The prosecution is the result of an investigation by the USSS, ATF, SV-ICAC, the Brentwood and Walnut Creek Police Departments, and the Contra Costa Sheriff’s Office.
Tracy Resident Sentenced to Serve Home Confinement and Probation for Computer Attack on Discovery Bay Water Treatment FacilityRead the Press Release
OAKLAND – Rambler Gallo was sentenced to serve six months of home confinement and 36 months of probation for intentionally causing damage to the computer network for the Discovery Bay Water Treatment Facility, located in the Town of Discovery Bay, Calif., and thereby threatening public health and safety. Specifically, Gallo intentionally uninstalled the main operational system for the water treatment plant that operates the automated monitoring system that protects the entire water treatment system, including monitoring and controlling the chemical levels and filtration of the water across all the Discovery Bay water service facilities. The sentence was handed down on Wednesday by Haywood S. Gilliam Jr., United States District Judge. The announcement was made by United States Attorney Ismail J. Ramsey and Federal Bureau of Investigation Special Agent in Charge Robert K. Tripp.
Gallo, 53, of Tracy, Calif., was a full-time employee of a private Massachusetts-based company identified in the indictment as Company A, which contracted with Discovery Bay to operate the town’s wastewater treatment facility. The facility provides treatment for the water and wastewater systems for the town’s 15,000 residents. During his employment with Company A, from July of 2016 until December of 2020, Gallo was the company’s “Instrumentation and Control Tech,” with responsibility for maintaining the instrumentation and the computer systems used to control the electromechanical processes of the facility in Discovery Bay.
According to his plea agreement, while Gallo was employed with Company A, he installed software into his own personal computer and into Company A’s private internal network that allowed Gallo to gain remote access to Discovery Bay’s Water Treatment facility computer network. Gallo resigned from his employment with Company on November 25, 2020, giving two weeks’ notice. Approximately five weeks later, Gallo accessed the facility’s computer system remotely and transmitted a command to uninstall certain software which was designed to perform as the main hub of the facility’s computer network.
The software that Gallo accessed protected the entire water treatment system, including water pressure, filtration, and chemical levels. Documents filed by the government in connection with Gallo’s sentencing describe how Gallo’s actions took the monitoring software offline into the following day when it was discovered by employees. Employees thereafter took steps to rectify the situation and mitigate any potential damage to the water treatment system. The government argued that Gallo’s actions “were well thought out to be as disruptive as possible” and “caused a potential threat to the health and safety of the community’s water supply.”
A federal grand jury indicted Gallo on June 27, 2023, charging him with one felony count of transmitting a program, information, code, and command to cause damage to a protected computer, in violation of 18 U.S.C. §§ 1030(a)(5)(A) and (c)(4)(B)(i). Gallo pleaded guilty to the charge.
In addition to the prison term, Judge Gilliam ordered Gallo to forfeit his computer and to pay $44,250 restitution.
Assistant United States Attorney Cynthia Frey is prosecuting this case with assistance from Kathy Tat and Kevin Costello. The case is being investigated by the FBI.
Hayward Company to Pay $250,000 to Settle False Claims Act Allegations That It Provided Unapproved Network Communications Equipment for BART Rail ProjectRead the Press Release
SAN FRANCISCO – HSQ Technology, A Corporation, a Hayward-based subsidiary of RailWorks Corporation, has agreed to pay $250,000 in penalties to resolve allegations that it knowingly violated the False Claims Act by submitting false claims for payment for network communications equipment it provided for the Santa Clara Valley Transportation Authority’s (VTA) Silicon Valley Berryessa Extension Project (Project) for the Bay Area Rapid Transit rail system, announced United States Attorney Ismail J. Ramsey and U.S. Department of Transportation Office of the Inspector General (DOT OIG) Western Region Special Agent in Charge Cory LeGars. The Project was partially funded by a federal grant provided by the Federal Transit Administration, an operating administration of the U.S. Department of Transportation.
As part of the settlement, HSQ acknowledged and accepted responsibility for the following facts:
• In August 2012, HSQ entered into a subcontract to deliver a communications system for the Project. In carrying out its work on the Project, HSQ purchased and installed network communications equipment.
• The subcontract required HSQ to procure network communications equipment from authorized distributors except when specifically approved by VTA to do otherwise. Yet, HSQ purchased some of the network communications equipment through internet sites from unauthorized distributors and without approval by VTA to do so.
• Between July 2015 and August 2016, HSQ submitted eight claims for payment for purchases of network communications equipment for which HSQ lacked documentation confirming that the equipment came from an authorized distributor.
• Each of these claims for payment sought the payment of money funded in part by a DOT grant.
“Contractors or subcontractors that receive federal funds must be truthful about the goods they are supplying and whether they meet contract requirements,” said U.S. Attorney Ramsey. “This Office will continue using the False Claims Act to address fraudulent conduct by government contractors, subcontractors, and suppliers.”
“Government contractors are expected to adhere to the contractual obligations to which they agreed and for which they have been paid,” said Special Agent-in-Charge LeGars. “The settlement announced today demonstrates our commitment to working with our prosecutorial colleagues to protect the integrity of Federal-aid programs.”
Assistant U.S. Attorney Emmet P. Ong handled this matter for the government, with assistance from Jacqueline Hollar and Garland He. The investigation and settlement resulted from a coordinated effort by the U.S. Attorney’s Office for the Northern District of California and DOT OIG.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
The investigation and resolution of this matter illustrate the government’s emphasis on combating fraud in federal grants. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to DOT OIG at https://www.oig.dot.gov/report-fraud-hotline.
Fourth Honduran National Extradited to the U.S. in Prosecution of Tenderloin District Drug Trafficking OrganizationRead the Press Release
SAN FRANCISCO – On May 8, 2024, the government of Honduras extradited convicted felon Victor Viera-Chirinos to the United States. The extradition marks the fourth in the case against 14 defendants alleged to have been trafficking large quantities of heroin, methamphetamine, cocaine base, and cocaine in San Francisco. Information about the three defendants previously extradited can be found here.
“Victor Viera-Chirinos thought he could evade consequences for his criminal conduct by fleeing to Honduras prior to his sentencing,” said U.S. Attorney Ismail Ramsey. “Let this case be instructive to people considering whether to distribute drugs in the Tenderloin District; the reach of the government is long and we are determined to assign the resources necessary to eradicate drug dealing from our neighborhoods and punish those who are found guilty of violating the drug trafficking laws.”
“Victor Viera-Chirinos thought he could run from justice, but he could not hide from it,” said DEA Special Agent in Charge Brian M. Clark. “As our sustained enforcement efforts in San Francisco continue, the economics of drug dealing no longer make sense for those peddling poison in the Tenderloin. This extradition makes it clear that we will use every tool at our disposal to hold you accountable because no one is beyond the grasp of the DEA and our law enforcement partners.”
Viera-Chirinos, 42, was originally charged by criminal complaint on July 29, 2019, with charges that he participated in a conspiracy to distribute drugs in the Tenderloin. A federal grand jury indicted Viera-Chirinos on August 8, 2019, alleging he was one of 14 defendants trafficking large quantities of heroin, methamphetamine, cocaine base, and cocaine. The charging documents describe how Viera-Chirinos was involved with the organization. For example, the complaint alleges Viera-Chirinos collected “rent” for street-level dealers who paid the organization for housing while participating in the organization’s drug trafficking activities. Similarly, the charging documents describe how the defendant played a role in ensuring street-level dealers were supplied with drugs for trafficking activities.
On January 27, 2021, Viera-Chirinos pleaded guilty to conspiring to distribute and possess with the intent to distribute heroin, methamphetamine, cocaine base, and cocaine, in violation of 21 U.S.C. §§ 846, 841(a)(1), (b)(1)(B). In his plea agreement, Viera-Chirinos described his role in the drug trafficking organization; specifically, Viera-Chirinos admitted that no later than June 2018 he entered into an agreement with other individuals to distribute and possess with intent to distribute heroin, methamphetamine, cocaine base, and cocaine to street-level dealers, who ultimately sold drugs in the streets of San Francisco, including in the city’s Tenderloin District. Viera-Chirinos also admitted that he made at least one delivery of drugs to a co-conspirator and described how he facilitated the sale of additional drugs to other members of the conspiracy. Viera-Chirinos further acknowledged in his plea agreement that the total weight of drugs attributable to him was an amount over 1775 kilograms of converted drug weight.
The district court scheduled Viera-Chirinos’s sentencing hearing for June 2, 2021. In filings related to the defendant’s sentencing, the government described Viera-Chirinos as an experienced trafficker who, through his own admission, had been selling drugs in San Francisco’s Tenderloin District for years. The filing described how Viera-Chirinos’s conduct in the case demonstrated his “savviness as a trafficker.” Approximately one week prior to his sentencing, the defendant absconded from pretrial release and fled to Honduras.
Viera-Chirinos arrived back in the Northern District of California on May 8, 2024, to face sentencing for the charge set out in the August 2019 indictment. He is scheduled to appear before U.S. Magistrate Judge Sallie Kim on May 15, 2024, for further proceedings, including identification of counsel. A date for his sentencing has not yet been scheduled.
The Justice Department’s Office of International Affairs worked with Honduran authorities to secure the arrest and extradition of Viera-Chirinos.
This prosecution is part of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
San Francisco Resident Pleads Guilty to Stealing over $340,000 in Funds Intended for Low-Income FamiliesRead the Press Release
SAN FRANCISCO – Gregory Finkelson, a San Francisco resident, has pleaded guilty to one count of theft of government property in connection with his fraudulent receipt of hundreds of thousands of dollars in low-income housing benefits, announced United States Attorney Ismail J. Ramsey; Federal Bureau of Investigation (FBI) Special Agent in Charge Robert K. Tripp; U.S. Department of Housing and Urban Development (HUD) Office of the Inspector General (OIG) Special Agent in Charge Mark Kaminsky; and IRS Criminal Investigation (CI) Special Agent in Charge Michael Mosley of the Oakland Field Office. Finkelson’s guilty plea was accepted by the Hon. James Donato, United States District Judge, on May 6, 2024.
The Section 8 Certificate Program is a rent subsidy program funded by HUD and administered jointly in San Francisco by HUD and the San Francisco Housing Authority (SFHA). The program is intended to help low- and moderate-income families afford housing, and it has income limits and other eligibility requirements that applicants must meet to qualify for assistance.
In his plea agreement, Finkelson, 64, admitted that, between approximately August 2006 and February 2020, he wrongfully claimed $341,455 in Section 8 Program subsidies by lying about his income and his ownership of (i) a San Francisco residence he purchased in 2005 that is now valued at approximately $2.4 million; and (ii) a business he ran out of his residence. He then used the funds he fraudulently obtained to benefit himself, including by funding his business, paying his credit card bills, and making payments on a timeshare in Hawaii.
“This defendant fraudulently obtained housing benefits designated for some of the neediest individuals in our society and used them to enrich himself,” said United States Attorney Ismail J. Ramsey. “I am proud of the work this Office does to prosecute those who defraud the government, particularly where, as here, it is low-income families who suffer the most as a result of the defendant’s selfish conduct.”
“Finkelson stole money that was intended to provide safe housing for low-income families and used it for his own self-enrichment,” said HUD OIG Special Agent in Charge Mark Kaminsky. “HUD OIG will continue to work with its law enforcement partners to diligently pursue and hold accountable bad actors who willfully misuse federal assets.”
“Today’s plea makes clear that greed does not pay. For years, Finkelson took advantage of Section 8 housing assistance funds by using nominee ownership to conceal his ill-gotten gains while simply lining his own pockets,” said CI Acting Special Agent in Charge Michael Mosley. “Our agents are experts at following the money and building cases that help bring financial criminals to justice.”
Finkelson admitted that, as part of his scheme, he used the name of a Russian national living in Russia to purchase his San Francisco home, claiming, wrongfully, that she was his landlord and that he made rent payments to her. Finkelson also admitted he opened several bank accounts, including in the Russian national’s name, and that he used these bank accounts to conceal his use of the ill-gotten Section 8 Program subsidies.
Finally, pursuant to his plea agreement, Finkelson agreed to pay at least $341,455 in restitution, which represents the total amount he admitted he stole from the government.
Finkelson was indicted by a federal grand jury on July 25, 2023. He pleaded guilty this week to one count of theft of government property, in violation of 18 U.S.C. §§ 641 & 2, for which he faces a statutory maximum prison term of 10 years. In addition, as part of any sentence, the court may order the defendant to pay a fine of up to $250,000 and to serve a term of supervised release of up to three years. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Judge Donato has scheduled Finkelson’s sentencing hearing for September 9, 2024.
Assistant United States Attorneys Christiaan Highsmith and Kevin Yeh are prosecuting the case with the assistance of Claudia Hyslop and Laurence Macaraeg. The prosecution is the result of a joint investigation by the FBI, HUD OIG, and CI, with assistance from SFHA.
East Bay Entrepreneur Pleads Guilty to Tax EvasionRead the Press Release
OAKLAND – Salman Salman pleaded guilty today to one count of tax evasion in violation of 26 U.S.C. § 7201. The plea was accepted by the Honorable Haywood S. Gilliam, Jr., United States District Judge. The announcement was made by United States Attorney for the Northern District of California Ismail J. Ramsey and IRS Criminal Investigation (CI) Acting Special Agent in Charge Michael Mosley of the Oakland Field Office.
Salman, 47, of Rodeo, Calif., was charged with a scheme to evade taxes by filing false Form 1040 joint income tax returns for himself and his wife for tax years 2016 through 2019. Specifically, Salman admitted to falsely underreporting income he and his wife enjoyed from three businesses he owned and operated during the course of the scheme, The Plug Tattoo & Piercing, Inc., S&S Real Estate Investment Group, and Synergy Investment Group Ohio Inc.
In the plea agreement, Salman admitted that he both understated income from his companies and that he claimed false and overstated expenses as part of his scheme to further reduce his tax obligations. In total, Salman admitted that he failed to disclose over $3.4 million in income he received from his companies for tax years 2016 through 2019.
On December 11, 2023, Salman was charged by information with four counts of tax evasion, in violation of 26 U.S.C. § 7201. Pursuant to the plea agreement, Salman admitted the conduct alleged as support for all four counts in the information, but pleaded guilty to Count Four, which charges him with tax evasion for tax year 2019.
Judge Gilliam scheduled Salman’s sentencing hearing for September 18, 2024. For the tax evasion charge, Salman faces a maximum prison term of five years, a maximum fine of $250,000, and restitution of at least $438,247 to the IRS. As part of any sentence, the court may also order Salman to serve a period of supervised release and to pay additional assessments, however, the court will impose a sentence only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The case is being prosecuted by Assistant U.S. Attorney Thomas Green, with the assistance of Kay Konopaske and Christine Tian of the U.S. Attorney’s Office. The prosecution is the result of an investigation by the Internal Revenue Service-Criminal Investigation.
Concord Man Sentenced to 20 Years in Prison for Coercing and Enticing Minors to Produce Child Pornography and A Related CrimeRead the Press Release
OAKLAND – Javier Antonio Ramirez was sentenced to serve 20 years in prison for coercing and enticing teenaged girls to produce child pornography and receiving child pornography this week, announced U.S. Attorney Ismail J. Ramsey and Homeland Security Investigations (“HSI”) San Francisco Special Agent in Charge Tatum King. The sentence was handed down by the Hon. Jon S. Tigar, United States District Judge.
Ramirez, 29, of Concord, was charged by indictment on March 2, 2023, with one count of coercion and enticement of a minor, in violation of 18 U.S.C. § 2422(b), and one count of receipt of child pornography, in violation of 18 U.S.C. §§ 2252(a)(2) and (b). Ramirez pleaded guilty to both counts on November 13, 2023.
“Javier Ramirez’s conduct is every parent’s nightmare,” said U.S. Attorney Ismail J. Ramsey. “That Ramirez introduced minors to fentanyl, a lethal drug, to assist in coercing and exploiting them and then watched those minors overdose repeatedly, only makes matters worse. Let this sentence serve as a reminder that this Office will take all steps available to hold accountable those who prey on and exploit our youth.”
“The sentencing of Ramirez to 20 years in prison for coercing and enticing minors to produce child sexual abuse material while admittedly poisoning them with the dangerous narcotics is a stern reminder of the imperative to safeguard our children,” said Special Agent in Charge Tatum King. “This verdict underscores HSI’s unwavering commitment to protect the innocent and hold perpetrators of such despicable crimes fully accountable under the law.”
According to the plea agreement, Ramirez admitted that between June 2021 through February 2023, Ramirez used social media to identify minor girls to persuade them to engage in sexual intercourse and sexually explicit conduct with Ramirez, which, on occasion, Ramirez would film or photograph. Ramirez admitted that the first step of the pattern of coercion began with Ramirez supplying narcotics to girls, who were all under the age of 18 years old. Ramirez provided narcotics, including cocaine and fentanyl, to these victims at discounted prices or even for free in exchange for sexual acts.
According to court filings, Ramirez was the one who introduced many of the victims to fentanyl for the first time, when the victims were only 16 or 17 years old. Over time, Ramirez watched each identified victim overdose multiple times and yet continued to supply more fentanyl to the victims, all while sexually exploiting them. In January 2023, one of the minor victims suffered a non-fatal fentanyl overdose while at a high school in Contra Costa County, from fentanyl Ramirez took her to procure in San Francisco the night before.
Ramirez also pleaded guilty to receipt of child pornography. According to the plea agreement, Ramirez admitted having almost 100 videos and images of child pornography, including of prepubescent minors and toddlers.
Judge Tigar sentenced Ramirez to 240 months of imprisonment for the coercion and enticement count, to be served concurrently with 216 months of imprisonment for the receipt of child pornography count. In addition to the prison term, Judge Tigar also ordered Ramirez to serve 15 years of supervised release which will begin after the term of imprisonment. Ramirez was immediately remanded into custody.
Assistant U.S. Attorney Kelly Volkar of the Oakland Branch of the United States Attorney’s Office is prosecuting the case, with the assistance of Mark DiCenzo. The prosecution is the result of an investigation by Homeland Security Investigations, the Contra Costa Internet Crimes Against Children Task Force, the Lafayette Police Department, and the Contra Costa Sherriff’s Office.
Online child sexual exploitation and abuse is a threat to all children and teens who use the internet. Prevention and reporting resources for children and caregivers are now available online at www.dhs.gov/know2protect and includes HSI’s signature iGuardian training program.
One Pill Can Kill: Beware of pills bought on the street: One Pill Can Kill. Fentanyl, a Schedule II controlled substance, is a highly potent opiate that can be diluted with cutting agents to create counterfeit pills that purport to mimic the effects of Oxycodone, Percocet, and other drugs, but can be obtained at a lower cost. However, very small variations in the amount or quality of fentanyl create huge effects on the potency of the counterfeit pills and can easily cause death. Fentanyl has now become the leading cause of drug overdose deaths in the United States. Counterfeit, fentanyl-laced pills are usually shaped and colored to resemble pills that are sold legitimately at pharmacies. For example, counterfeit pills known as M30s mimic Oxycodone, but when sold on the street they routinely contain fentanyl. These tablets are round and often light blue in color, though they may be made in many colors, and have “M” and “30” imprinted on opposite sides of the pill.
Former CEO, CFO, and CCO of Cred LLC Charged with Alleged Multi-Million-Dollar Cryptocurrency-Related Wire Fraud ConspiracyRead the Press Release
SAN FRANCISCO – A federal grand jury has charged Daniel Schatt, Joseph Podulka, and James Alexander with wire fraud conspiracy and related crimes in connection with their respective roles in an alleged scheme to defraud customers and investors in Cred, LLC (Cred) allegedly causing losses of customer cryptocurrency assets with a market value that may have exceeded $780 million. Cred, a San Francisco-based financial services firm that specialized in making investments in cryptocurrencies, filed for Chapter 11 bankruptcy on November 7, 2020. The charges against the defendants are set out in two separate indictments handed down by the grand jury earlier this week.
“The Northern District of California is home to many of the nation’s most innovative businesses,” said U.S. Attorney Ismail Ramsey. “Maintaining a market for continued prosperity requires rooting out those who use fraud as a substitute for success. This prosecution demonstrates our determination to keep our markets free of fraudsters and safe for investors.”
“The allegations against the defendants associated with Cred, LLC highlight a predatory, deceptive scheme defrauding potential victims of hundreds of millions of dollars of cryptocurrency at market value,” said IRS Criminal Investigation Acting Special Agent in Charge Mark Mosley. “The indictments levied demonstrate the investigative capabilities of IRS Criminal Investigation and our commitment to pursuing justice against financial criminals.”
The announcement was made by United States Attorney Ismail Ramsey, Federal Bureau of Investigation Special Agent in Charge Robert K. Tripp, and IRS Criminal Investigation Acting Special Agent in Charge Michael Mosley of the Oakland Field Office.
The first indictment (Schatt Indictment) charges Schatt, 53, of San Mateo, and Podulka, 51, of Palo Alto, with conspiracy, thirteen counts of wire fraud and money laundering. The second indictment (Alexander Indictment) recites many of the same allegations and charges Alexander, 54, of Sherman Oaks, with conspiracy, four counts of wire fraud and money laundering.
According to the indictments, Schatt was Cred’s co-owner and Chief Executive Officer, Podulka was Cred’s Chief Financial Officer, and Alexander was Cred’s Chief Capitol Officer. Cred was founded in 2018 by Schatt and another individual and provided financial services to holders of cryptocurrency and other assets. By late 2018, Cred’s business included two principal businesses: (1) offering loans in U.S. dollars to customers using customers’ cryptocurrency as collateral and (2) accepting deposits of cryptocurrency in exchange for a promise for a yield (interest payments) for that cryptocurrency.
The indictments allege that no later than March of 2020, the defendants began making false and fraudulent statements to customers and investors about Cred’s lending and investing practices. For example, the defendants represented to Cred’s customers and investors that Cred engaged only in “collateralized or guaranteed lending,” that Cred’s cryptocurrency investments were “hedged,” and that Cred maintained an “all weather approach” to investment to protect against volatility. Cred’s marketing materials asserted that the company was a “licensed lender with comprehensive insurance.” Further, after the “flash crash” in March of 2020, during which many cryptocurrencies were significantly devalued, defendants allegedly continued to represent to Cred’s customers and investors that Cred remained solvent and that the company maintained comprehensive insurance that assured Cred’s customers would be made whole. The indictments allege all these assurances and statements were false.
The indictments describe how the defendants lured customers to make investments by promising to return a significant yield on cryptocurrency investments—the defendants did not disclose, however, that virtually all the assets to pay the yield were generated by a single company whose business was to make unsecured micro-loans to Chinese gamers. Contrary to the defendants’ assurances, Cred engaged in lending that was neither collateralized nor guaranteed. Moreover, Cred’s hedging strategy did not protect the company’s investments against volatility. Indeed, shortly after the flash crash in March of 2020, Cred had lost its hedging partner, had learned that a significant creditor to whom Cred had loaned $40 million would be unable fulfill its promise to repay the loan, was being threatened with a lawsuit, and was effectively insolvent. The indictments describe the striking contrast between the reality of Cred’s financial situation by the end of March 2020 and the statements the defendants made to customers and investors at that time. On the one hand, on March 16, 2020, Cred’s General Counsel informed the defendants that “Cred may not be financially solvent and that defendants “must be careful at all times to be accurate in its statements to its creditors and to all stakeholders.” Nevertheless, rather than disclose to Cred’s customers and investors the reality of Cred’s finances, defendants allegedly attempted to keep the business afloat by bringing in new customer funds and by discouraging existing customers from seeking and obtaining redemptions from their investments. According to the indictment, at the time Cred collapsed and filed for bankruptcy, its customers suffered losses of cryptocurrency assets with a market value of $150 million at the time of the bankruptcy, and a “maximum market value of over $783 million since the date of the bankruptcy.”
The indictments describe how the defendants assured numerous victims to make or renew financial commitments to Cred even after the company’s effective insolvency.
With respect to Schatt and Podulka, the Schatt Indictment lists 13 transactions that occurred between April 14, 2020, and October 15, 2020, as the defendants continued to make repeated false and fraudulent assurances that Cred’s financial situation was sound. The indictment further describes how Schatt and Podulka failed to inform customers about significant losses sustained by the company until October of 2020, when a cryptocurrency exchange, then a customer of Cred, contacted Cred to inquire about its finances. During the two-hour call, the cryptocurrency exchange learned for the first time that Cred had no hedges, that its asset to liabilities ratio was off by tens of millions of dollars, and that Cred discovered it had lost over $8 million in February 2020 after Alexander was scammed by a fake customer earlier that year. According to the Schatt Indictment, Cred filed bankruptcy on November 7, 2020, and in a bankruptcy-related filing, Schatt misleadingly claimed that Cred’s financial difficulties were “primarily due to James Alexander’s “malfeasance,” including his appropriation of approximately 255 bitcoin on June 24, 2020,” and his alleged failure to do proper due diligence with respect to the February 2020 scam.
With respect to Alexander, the Alexander Indictment alleges that between May 15, 2020, and June 24, 2020, Alexander reassured a victim that the flash crash was “a good thing” for Cred and failed to disclose to another customer that Cred was having a solvency crisis. In addition, the Alexander Indictment lists two transactions in which victims transferred funds to Cred after receiving reassurances from Alexander that Cred’s financial situation was sound. The Alexander Indictment further describes how on or about June 24, 2020, the day Schatt fired him from his position in Cred, Alexander instructed a Cred employee to transfer approximately 225 bitcoin from a Cred account to one controlled by Alexander. The indictment alleges that in the months following his ouster, Alexander appropriated the bitcoin to his own use, including converting some of it to U.S. dollars, depositing the assets in his private bank account, and making personal expenditures.
In sum, the defendants are charged with the following crimes:
Defendant
Violation
Maximum Sentence (per count), if Convicted
All Defendants (1 count, each)
18 U.S.C. § 1349
Conspiracy to Commit Wire Fraud
20 years’ imprisonment
$250,000 fine
3 years’ supervised release
SCHATT (13 counts)
PODULKA (13 counts)
ALEXANDER (4 counts)
18 U.S.C. § 1343
Wire Fraud
20 years’ imprisonment
$250,000 fine
3 years’ supervised release
SCHATT (1 count)
PODULKA (1 count)
ALEXANDER (8 counts)
18 U.S.C. § 1957
Engaging in Transactions in Property Derived from Specified Unlawful Activity (Money Laundering)
10 years’ imprisonment
$250,000 fine
3 years’ supervised release
SCHATT (1 count)
PODULKA (1 count)
18 U.S.C. § 1956(a)(1)(A) Engaging in a Financial Transaction to Promote Unlawful Activity
20 years’ imprisonment
$500,000 fine
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. In addition, 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.
Schatt and Podulka made their initial federal court appearance on May 2, 2024. They have been ordered to return to court on May 8, 2024, for further proceedings including the entry of a plea. Alexander’s initial federal court appearance has not yet been scheduled.
Assistant United States Attorneys Barbara J. Valliere and Adam A. Reeves are prosecuting these cases with the assistance of Beth Margen and Kathy Tat. These prosecutions are the result of an investigation by the FBI and the IRS Criminal Investigation.
BTC-e Operator Pleads Guilty to Money Laundering ConspiracyRead the Press Release
A Russian national pleaded guilty today to conspiracy to commit money laundering related to his role in operating the cryptocurrency exchange BTC-e from 2011 to 2017.
According to court documents, Alexander Vinnik, 44, was one of the operators of BTC-e, which was one of the world’s largest virtual currency exchanges. From its inception in or around 2011 until it was shut down by law enforcement in or around July 2017 contemporaneous with Vinnik’s arrest, BTC-e processed over $9 billion-worth of transactions and served over one million users worldwide, including numerous customers in the United States.
“Today’s result shows how the Justice Department, working with international partners, reaches across the globe to combat cryptocrime,” said Deputy Attorney General Lisa Monaco. “This guilty plea reflects the Department’s ongoing commitment to use all tools to fight money laundering, police crypto markets, and recover restitution for victims.”
BTC-e was one of the primary ways by which cyber criminals around the world transferred, laundered, and stored the criminal proceeds of their illegal activities. BTC-e received criminal proceeds of numerous computer intrusions and hacking incidents, ransomware attacks, identity theft schemes, corrupt public officials, and narcotics distribution rings. Vinnik operated BTC-e with the intent to promote these unlawful activities and was responsible for a loss amount of at least $121 million.
Despite doing substantial business in the United States, BTC-e was not registered as a money services business with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN), as federal law requires. BTC-e had no anti-money laundering (AML) and/or “know-your-customer” (KYC) processes and policies in place, as federal law also requires. BTC-e collected virtually no customer data at all, which made the exchange attractive to those who desired to conceal criminal proceeds from law enforcement.
BTC-e relied on shell companies and affiliate entities that were similarly unregistered with FinCEN and lacked basic anti-money laundering and KYC policies to electronically transfer fiat currency in and out of BTC-e. Vinnik set up numerous such shell companies and financial accounts across the globe to allow BTC-e to conduct its business.
A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
In 2017, FinCEN announced that it assessed an approximately $110 million civil money penalty against BTC-e for willfully violating U.S. AML laws, and a $12 million civil penalty against Vinnik for his role in the violations.
The FBI; IRS Criminal Investigation’s Cyber Crime Unit and Oakland Field Office; U.S. Secret Service Criminal Investigative Division; and Homeland Security Investigations (HSI) are investigating the case. The lengthy investigation was supported by numerous former prosecutors and investigators from multiple agencies.
Trial Attorney C. Alden Pelker of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorneys Claudia Quiroz and Katie Lloyd-Lovett for the Northern District of California are prosecuting the case. Pelker and Quiroz are members of the Department’s National Cryptocurrency Enforcement Team (NCET).
The Justice Department’s Office of International Affairs provided valuable assistance in securing the extradition of Vinnik. The Justice Department thanks the Government of Greece for its cooperation in securing Vinnik’s transfer to the United States.
BTC-e Operator Pleads Guilty to Money Laundering ConspiracyRead the Press Release
SAN FRANCISCO – A Russian national pleaded guilty today to conspiracy to commit money laundering related to his role in operating the cryptocurrency exchange BTC-e from 2011 to 2017.
According to court documents, Alexander Vinnik, 44, was one of the operators of BTC-e, which was one of the world’s largest virtual currency exchanges. From its inception in or around 2011 until it was shut down by law enforcement in or around July 2017 contemporaneous with Vinnik’s arrest, BTC-e processed over $9 billion-worth of transactions and served over one million users worldwide, including numerous customers in the United States and the Northern District of California.
“Today’s result shows how the Justice Department, working with international partners, reaches across the globe to combat cryptocrime,” said Deputy Attorney General Lisa Monaco. “This guilty plea reflects the Department’s ongoing commitment to use all tools to fight money laundering, police crypto markets, and recover restitution for victims.”
BTC-e was one of the primary ways by which cyber criminals around the world transferred, laundered, and stored the criminal proceeds of their illegal activities. BTC-e received criminal proceeds of numerous computer intrusions and hacking incidents, ransomware attacks, identity theft schemes, corrupt public officials, and narcotics distribution rings. Vinnik operated BTC-e with the intent to promote these unlawful activities and was responsible for a loss amount of at least $121 million.
Despite doing substantial business in the United States, BTC-e was not registered as a money services business with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN), as federal law requires. BTC-e had no anti-money laundering (AML) and/or “know-your-customer” (KYC) processes and policies in place, as federal law also requires. BTC-e collected virtually no customer data at all, which made the exchange attractive to those who desired to conceal criminal proceeds from law enforcement.
BTC-e relied on shell companies and affiliate entities that were similarly unregistered with FinCEN and lacked basic AML and KYC policies to electronically transfer fiat currency in and out of BTC-e. Vinnik set up numerous such shell companies and financial accounts across the globe to allow BTC-e to conduct its business.
Vinnik faces a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
In 2017, FinCEN announced that it assessed an approximately $110 million civil money penalty against BTC-e for willfully violating U.S. AML laws, and a $12 million civil penalty against Vinnik for his role in the violations.
U.S. Attorney Ismail J. Ramsey; Principal Deputy Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division; Assistant Director Michael D. Nordwall of the FBI’s Criminal Investigative Division; Chief Guy Ficco of IRS Criminal Investigation (IRS-CI); Special Agent in Charge William Mancino of the U.S. Secret Service (USSS) Criminal Investigative Division; and Special Agent in Charge Tatum King of Homeland Security Investigations (HSI) San Francisco made the announcement.
The FBI; IRS-CI Cyber Crime Unit and Oakland Field Office; USSS Criminal Investigative Division; and HSI are investigating the case. The lengthy investigation was supported by numerous former prosecutors and investigators from multiple agencies, including IRS-CI Special Agent James Hade (1980-2019) and former IRS-CI Special Agent Tigran Gambaryan.
Assistant U.S. Attorneys Claudia Quiroz and Katie Lloyd-Lovett for the Northern District of California and Trial Attorney C. Alden Pelker of the Justice Department’s Computer Crime and Intellectual Property Section are prosecuting the case. Pelker and Quiroz are members of the Justice Department’s National Cryptocurrency Enforcement Team (NCET).
The Justice Department’s Office of International Affairs provided valuable assistance in securing the extradition of Vinnik. The Justice Department thanks the Greek government for its cooperation in securing Vinnik’s transfer to the United States.