Southern District of California
Press releases recorded for this federal judicial district.
Founder of Fraudulent Cryptocurrency Charged in $2 Billion BitConnect Ponzi SchemeRead the Press Release
Assistant U. S. Attorneys Daniel C. Silva, Mark W. Pletcher, Lisa Sanniti, and Carl Brooker
NEWS RELEASE SUMMARY – February 25, 2022
SAN DIEGO – A federal grand jury returned an indictment today charging Satishkumar Kurjibhai Kumbhani, a citizen and resident of India, with multiple crimes for his alleged role in a massive criminal conspiracy involving the cryptocurrency company he founded, BitConnect.
The indictment alleges that Kumbhani and his co-conspirators defrauded global investors of over $2 billion—believed to be the largest cryptocurrency fraud ever charged. This indictment follows the September 2021 guilty plea by BitConnect’s lead U.S. promoter, Glenn Arcaro (21-CR-2542-TWR).
The indictment alleges that BitConnect was a textbook Ponzi scheme. BitConnect solicited investors to use its “Lending Program,” which touted BitConnect’s purported proprietary technology, known as the “BitConnect Trading Bot” and “Volatility Software,” as being able to generate substantial profits and guaranteed returns. The indictment alleges that in reality, the purported technologies generated no such profits, and merely functioned as a cover for the Ponzi scheme. In sum, earlier BitConnect investors were paid with money from later investors to promote the fraudulent scheme.
As part the criminal conspiracy, Kumbhani was further charged with a separate conspiracy seeking to commit commodities price manipulation for his attempt to artificially inflate the price of BCC and create the illusion of increased demand for BCC when the criminal scheme began to unravel. The commodities price manipulation conspiracy is believed to be the first time any cryptocurrency has been alleged to function as a commodity.
Furthermore, Kumbhani was charged with operating an unlicensed money transmitting business. To participate in the alleged Ponzi scheme that was BitConnect, unwitting BCC investors were required to use Bitcoin to purchase BCC on the “Bitconnect Exchange.” The BCC Exchange thus functioned to separate investors from the more widely used Bitcoin in exchange for the nascent BCC, which the investors could “lend” back to BitConnect to generate purported profits for the investor through the use of the above-mentioned BitConnect Trading Bot and Volatility Software.
Lastly, Kumbhani was charged with an international money laundering conspiracy for conducting global transfers of Bitcoin and BCC to global investors and cryptocurrency purchasers—all of which were proceeds of the alleged wire and securities fraud.
“This indictment alleges a massive cryptocurrency scheme that defrauded investors of more than $2 billion,” said U.S. Attorney Randy Grossman. “The U.S. Attorney’s Office and our law enforcement partners are committed to pursuing justice for victims of cryptocurrency fraud.” Grossman thanked the prosecution team and law enforcement partners around the world who assisted with this investigation. Assistant U.S. Attorneys Daniel C. Silva, Mark W. Pletcher, Lisa Sanniti, and Carl Brooker, in partnership with Trial Attorney Kevin Lowell of the Criminal Division’s Fraud Section, lead this ongoing investigation.
“Crime, particularly crime involving digital currencies, continues to transcend international boundaries,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “The department is committed to protecting victims, preserving market integrity, and strengthening its global partnerships to hold accountable criminals engaging in cryptocurrency fraud. We thank our partners around the world for their continued efforts.”
“Today's indictment reiterates the FBI’s commitment to identifying and addressing bad actors defrauding investors and sullying the ability of legitimate entrepreneurs to innovate within the emergent cryptocurrency space,” said Special Agent in Charge Eric B. Smith of the FBI’s Cleveland Field Office. “Dressing up a tried-and-true fraud scheme with a new twist and basing it overseas will not deter the resolve and dedication of the FBI to meticulously investigate and bring such fraudsters to justice."
“As cryptocurrency gains popularity and attracts investors worldwide, fraudsters are utilizing increasingly complex schemes to defraud investors, oftentimes stealing millions of dollars,” said Special Agent in Charge Ryan L. Korner of the IRS Criminal Investigation’s (IRS-CI) Los Angeles Field Office. “However, make no mistake, our agency will continue our long tradition of following the money, whether physical or digital, to expose criminal schemes and hold the fraudsters accountable for their illegal acts of trickery and deceit.”
All investor victims of the BitConnect fraud are encouraged to visit the following webpage - https://www.justice.gov/usao-sdca/us-v-glenn-arcaro-21cr02542-twr for information on their rights as a victim, the ability to submit a victim impact statement, and to identify themselves as a potential victim.
U.S. Attorney Grossman thanked the Department of Justice’s Office of International Affairs and law enforcement partners around the world who assisted and continue to assist on this investigation. Assistant U.S. Attorneys Daniel C. Silva, Mark W. Pletcher, Lisa Sanniti, and Carl Brooker, in partnership with Trial Attorney Kevin Lowell of the Criminal Division’s Fraud Section, lead this ongoing investigation.
DEFENDANT
Satishkumar Kurjibhai Kumbhani Surat, Gujarat, India Age: 36
SUMMARY OF CHARGES
Conspiracy to Commit Wire Fraud—Title 18, U.S.C., Section 1349
Maximum penalty: Twenty years in prison, forfeiture, restitution, and $250,000 fine
Wire Fraud—Title 18, U.S.C., Section 1343
Maximum penalty: Twenty years in prison, forfeiture, restitution, and $250,000 fine
Conspiracy—Title 18, U.S.C., Section 371
Maximum penalty: Five years in prison, and $250,000 fine
Operation of Unlicensed Money Transmitting Business—Title 18, U.S.C., Section 1960
Maximum penalty: Five years in prison, forfeiture, and $250,000 fine
Money Laundering Conspiracy—Title 18, U.S.C., Section 1956(h)
Maximum penalty: Twenty years in prison, forfeiture, and $250,000 fine
AGENCIES
FBI
IRS-Criminal Investigation
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Former Director of Finance for the La Jolla Music Society Admits to Embezzling over Half a Million DollarsRead the Press Release
Assistant U. S. Attorney Mark Conover (619) 546-6763
NEWS RELEASE SUMMARY – February 23, 2022
SAN DIEGO – Chris Benavides of San Diego pleaded guilty in federal court today to wire fraud, admitting that while employed as the director of finance for the La Jolla Music Society, he embezzled more than $650,000 over a 10-year period.
In a hearing before U.S. Magistrate Judge Barbara Major, Benavides admitted he abused his access to the company’s accounting software and issued unauthorized checks to himself. Benavides admitted that he stole over $650,000 between October 2011 and February 2021 from the La Jolla Music Society.
Benavides used the La Jolla Music Society’s money to pay his mortgage, credit cards, and other personal expenses. He then concealed the payments by manipulating the company’s accounting records to make it appear that they were legitimate business expenses.
The La Jolla Music Society discovered Benavides’s fraudulent activity on February 22, 2021, fired Benavides, and reported the conduct to law enforcement.
“Fraud perpetrated against non-profit organizations is particularly troubling,” said U.S. Attorney Randy Grossman. “This defendant abused his position of trust to enrich himself and will be held accountable for his crime.” Grossman thanked the prosecution team and FBI agents for their excellent work on this case.
“The defendant spent nearly a decade abusing his trusted employment access to embezzle more than $650,000 from the La Jolla Music Society, where he most recently served as the Director of Finance,” said FBI Special Agent in Charge Suzanne Turner. “Crimes such as this can have a devastating impact on both the employer and the local community, and further shake the confidence of the donors whose charitable contributions provide critical support for non-profit organizations. I hope this guilty plea provides a sense of closure and justice for the victims.”
Benavides is scheduled to be sentenced on May 5, 2022 at 9 a.m. before U.S. District Judge Cathy Ann Bencivengo.
DEFENDANT Case Number 22cr3042-CAB
Chris Benavides Age: 52 San Diego
SUMMARY OF CHARGES
Wire Fraud – Title 18, U.S.C., Section 1343
Maximum penalty: Twenty years in prison and $250,000 fine, or twice the gain/loss, whichever is greater
AGENCY
Federal Bureau of Investigation
San Diego Man Indicted for Sale of Ghost Guns, Possession of Homemade Machine Gun, and Distribution of FentanylRead the Press Release
NEWS RELEASE SUMMARY – February 18, 2022
SAN DIEGO – Gavin Michael Adcock of San Diego appeared in federal court today in connection with a grand jury indictment charging him with the sale of firearms without a license, possession of a machine gun, and distribution of fentanyl.
An affidavit in support of a warrant to search of Adcock’s residence outlined the investigation that started in July 2021 when a San Diego Police Department detective came across Adcock on the popular mobile marketplace OfferUp. Adcock was offering to sell unfinished handgun lowers, commonly referred to as “80% lowers.” According to the affidavit, Adcock told the detective, who posed as a customer, that he had completed firearms for sale as well.
According to the affidavit, Adcock and the detective began communicating about the purchase of firearms. The San Diego Police Department then partnered with the Bureau of Alcohol, Tobacco, Firearms and Explosives to further investigate Adcock’s alleged firearms trafficking activities. Through four undercover purchases between November 2021 and January 2022, ATF purchased eight firearms, ammunition, and 61 fentanyl pills from Adcock, the affidavit said.
Of the eight firearms, seven were determined to be “privately manufactured firearms,” also known as PMFs or ghost guns. One of the PMFs was determined to be a machine gun and another was an AR-15-style firearm, both of which Adcock claimed he manufactured himself.
In addition, during Adcock’s arrest on February 17, 2022, agents seized an additional firearm and suspected fentanyl pills.
“This case is a good example of the commitment by the U.S. Attorney’s Office and our law enforcement agency partners to combat the scourge of fentanyl and illegal firearm trafficking,” said U.S. Attorney Randy Grossman. Grossman thanked the prosecution team and investigating agencies for their excellent work on this case.
“Over the past few years Southern California has seen an increase in individuals making firearms and selling them without a license,” said ATF Los Angeles Field Division Special Agent in Charge Monique Villegas. “These firearms are oftentimes being sold to individuals that are prohibited from possessing guns. This illegal activity will not be tolerated. ATF will aggressively continue to partner with local, state and federal law enforcement agencies to target these traffickers.”
“I would like to thank our law enforcement partners for working with SDPD's Ghost Gun Apprehension Team," said San Diego Police Chief David Nisleit. "Curbing illegal gun trafficking in our neighborhoods remains a priority for our department.”
The next court date is scheduled for February 24, 2022.
This case is the result of ongoing efforts by the U.S. Attorney’s Office, ATF and the San Diego Police Department to investigate and prosecute the trafficking of firearms – ghost guns in particular – and the distribution of dangerous illegal drugs, such as fentanyl.
DEFENDANT Case Number 22cr0313-TWR
Gavin Michael Adcock Age: 20 San Diego, CA
SUMMARY OF CHARGES
Dealing Firearms without a License – Title 18, United States Code, § 922(a)(1)(A)
Maximum penalty: Five years in prison and $250,000 fine
Possession of a Machinegun – Title 18, United States Code, § 922(o)
Maximum penalty: Ten years in prison and $250,000 fine
Distribution of Fentanyl – Title 21, United States Code, § 841(a)(1)
Maximum penalty: Twenty years in prison and $1 million fine
AGENCIES
Bureau of Alcohol, Tobacco, Firearms and Explosives
San Diego Police Department
*The charges and allegations contained in an indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Three Guatemalans Extradited to the United States on International Cocaine Trafficking ChargesRead the Press Release
Assistant U.S. Attorney Kevin Mokhtari (619) 546-8402
NEWS RELEASE SUMMARY – February 17, 2022
SAN DIEGO – Three Guatemalan nationals who were extradited to the United States from Guatemala to face international cocaine trafficking charges appeared in federal court today before U.S. Magistrate Judges Bernard G. Skomal and Jill L. Burkhardt, who ordered that the defendants remain in custody pending trial.
The Guatemalan nationals are charged in three separate indictments stemming from Operation Guerrilla Unit, a long-term investigation spearheaded by Homeland Security Investigations and the U.S. Attorney’s Office in San Diego.
The Guatemalan nationals include Augusto Jean Carlo Castillo-Hernandez, aka “Metal,” Jorge Alexander Campos-Oliva, aka “Peluda,” and Fabio Josue Campos-Oliva, aka “Black Chivita.” The defendants made their initial court appearances on Friday, February 11, 2022 in San Diego before Judge Skomal.
During today’s detention hearings, and in publicly filed documents, the defendants were described as organizers and leaders in a conspiracy to distribute cocaine in Guatemala and elsewhere. According to the indictment and other public records, each of the defendants and their co-conspirators are alleged to have coordinated the smuggling of multi-ton quantities of cocaine from South America to Guatemala with an ultimate destination of the United States.
Defendants Castillo-Hernandez, Jorge Campos-Oliva, and Fabio Campos-Oliva are each charged separately with participating in a conspiracy to distribute five kilograms and more of cocaine in Guatemala and elsewhere, knowing and intending that the cocaine would be unlawfully imported into the United States. In each of these cases, the conspiracy is alleged to have continued up to and including July 28, 2020.
On August 31, 2021, Castillo-Hernandez, Jorge Alexander Campos-Oliva, and Fabio Josue Campos-Oliva were arrested in Guatemala pursuant to extradition requests from the United States. Guatemala subsequently granted their extradition, and on February 10, 2022, they were extradited to the United States.
Operation Guerrilla Unit is a multi-year investigation targeting high-level cocaine traffickers operating in northwest Guatemala and their suppliers. This investigation has offered one of the most comprehensive views to date of the inner workings of cocaine trafficking in Guatemala. High-level cocaine traffickers were targeted in a massive probe involving multiple countries, multiple law enforcement agencies around the United States, and a number of federal districts.
“These extraditions send a message to drug traffickers around the world that the Department of Justice will aggressively pursue drug traffickers who earmark multi-ton quantities of cocaine for the United States,” said U.S. Attorney Randy S. Grossman. “Due to the collaborative efforts of Homeland Security Investigations and this Office, we will always seek to keep these drug traffickers accountable.” Grossman thanked the prosecution team and all the law enforcement agencies for their hard work on this case.
“The extradition of these individuals demonstrates the determination of HSI San Diego special agents and our law enforcement partners to bring down critical transportation cells in the cocaine supply network from South America to the United States,” said Chad Plantz, Special Agent in Charge for HSI San Diego. “HSI will continue to pursue the dismantlement of this organization through further arrests and extraditions in its effort to combat the flow of dangerous drugs into the United States.”
The Justice Department’s Office of International Affairs provided substantial assistance in securing the arrest and extradition of the defendants.
This operation 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.
DEFENDANT
Case Number 20cr2242-DMS
Augusto Jean Carlo Castillo-Hernandez Age: 29 Quetzaltenango, Guatemala
aka “Metal,” aka “Joker”
Case Number 20cr2241-DMS
Jorge Alexander Campos-Oliva Age: 44 Guatemala City, Guatemala
aka “Peluda,” aka “Papa,” aka “Magico”
Case Number 20cr2240-DMS
Fabio Josue Campos-Oliva Age: 46 Guatemala City, Guatemala
aka “Black Chivita”
SUMMARY OF CHARGES
International Conspiracy to Distribute Controlled Substances – Title 21, U.S.C., Section 959, 960, 963
Criminal Forfeiture – Title 21, U.S.C., Section 853Maximum Penalty: Life in prison and $10 million fine
AGENCIES
Homeland Security Investigations (HSI)
Customs and Border Protection (CBP)
Federal Bureau of Investigation (FBI)
U.S. Coast Guard
HSI Attaché Guatemala City, Guatemala
HSI Attaché Mexico City Mexico
Department of Justice, Office of International Affairs
Department of Justice, Office of Enforcement Operations
Department of Justice, Organized Crime and Drug Enforcement Task Force (OCDETF)
Joint Interagency Task Force-South (JIATF-S)
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Guatemalan National is Extradited on International Cocaine Trafficking and Maritime Smuggling ChargesRead the Press Release
Assistant U.S. Attorney Kevin Mokhtari (619) 546-8402
NEWS RELEASE SUMMARY – February 17, 2022
SAN DIEGO – Suspected drug trafficker Rafael Orlando Ramirez Barillas, a Guatemalan national who was extradited to the United States from Guatemala on Thursday, February 10, 2022 to face international cocaine trafficking and maritime smuggling charges in the Southern District of California, appeared in federal court today and was ordered detained pending trial.
Ramirez Barillas, aka “Thor,” is charged in an indictment stemming from a long-term joint investigation led by Homeland Security Investigations and the Drug Enforcement Administration in conjunction with the U.S. Attorney’s Office in San Diego.
Ramirez Barillas is charged with operating a conspiracy to distribute five kilograms and more of cocaine in Colombia, Ecuador, Guatemala, Costa Rica, El Salvador, Mexico and elsewhere, knowing and intending that the cocaine would be unlawfully imported into the United States. Ramirez Barillas is also charged with being in a conspiracy to distribute five kilograms and more of cocaine on board a vessel.
Ramirez Barillas made his initial court appearance on Friday, February 11, 2022 in San Diego before U.S. Magistrate Judge Bernard G. Skomal. This afternoon, U.S. Magistrate Judge Skomal ordered Ramirez Barillas detained pending trial.
According to court documents and statements made by prosecutors at today’s hearing, Ramirez Barillas was alleged to be the partner of convicted Guatemalan drug trafficker Luis Carlos Melgar-Morales, aka “Aquaman,” who admitted to distributing over 10,000 kilograms of cocaine during an approximately two-year conspiracy. Ramirez Barillas was described as an organizer and leader in the conspiracy to distribute cocaine in Guatemala and several other South and Central American countries. As part of the conspiracy, and as alleged in the indictment and set forth in other public documents, Ramirez Barillas and his co-conspirators coordinated the smuggling of multi-ton quantities of cocaine from South America to Guatemala with an ultimate destination of the United States.
During the investigation, the United States Coast Guard made multiple seizures of cocaine from vessels on international waters that were linked to Ramirez Barillas and his co-conspirators. According to the indictment, the conspiracy began on a date unknown and continued up to and including November 2018.
On July 17, 2021, Ramirez Barillas was arrested in Guatemala pursuant to an extradition request from the United States. Guatemala subsequently granted his extradition, and on February 10, 2022, Ramirez Barillas was extradited to United States.
“This office is committed to aggressively pursuing drug traffickers in Central America who use international waters as a corridor to smuggle cocaine to the United States,” said U.S. Attorney Randy Grossman. “This extradition marks the culmination of years of efforts by agents and prosecutors to keep those who flood the United States with cocaine accountable for their actions.” Grossman thanked the prosecution team and law enforcement agencies for their excellent work on this case.
“This extradition demonstrates the need to continue to work together with our foreign partners to disrupt drug trafficking,” said Chad Plantz, Special Agent in Charge for HSI San Diego. “This effort also resulted in significant seizures of the transnational criminal organization’s narcotics, firearms, and illicit proceeds, and led to the identification of additional high-ranking members. HSI will remain committed in our investigative efforts to bring additional members of this organization to justice.”
“This case, including last week’s extradition, demonstrates the success DEA and our law enforcement partners have had targeting foreign drug sources of supply,” said DEA Special Agent in Charge Shelly S. Howe. “DEA will continue to seize large quantities of drugs before they reach our shores and devastate our communities. Our strong relationships with our foreign counterparts allow us to bring drug suppliers to justice in the United States.”
“This indictment resulted from our collaborative efforts to disrupt transnational criminal organizations and prevent illicit drugs from making their way to the United States,” said Rear Adm. Brian Penoyer, the Eleventh Coast Guard District commander. “I am grateful for the hard work of the dedicated women and men of the Department of Justice and the Southern District of California who built this case alongside Coast Guard ships and crews involved in several interdiction cases in the Eastern Pacific Ocean, dismantling smuggling organizations, putting smugglers behind bars and keeping drugs off our streets. I hope our Coast Guard crews conducting counterdrug patrols today in the Pacific Ocean see the effects of this monumental occasion. I cannot thank the Southern District of California enough for their efforts to ensure justice is served to those seeking to harm our country.”
The Justice Department’s Office of International Affairs provided substantial assistance in securing the arrest and extradition of Ramirez Barillas.
This operation 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.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
DEFENDANT
Case Number 18cr4696-DMS
Rafael Orlando Ramirez Barillas Age: 32 Guatemala City, Guatemala
aka “Thor,” aka “Rafa”
SUMMARY OF CHARGES
International Conspiracy to Distribute Controlled Substances – Title 21, U.S.C., Section 959, 960, 963
Criminal Forfeiture – Title 21, U.S.C., Section 853Maximum Penalty: Life in prison and $10 million fine
Conspiracy to Distribute Cocaine on Board a Vessel Subject to the Jurisdiction of the United States –
Title 46, U.S.C., Sections 70503, 70506(b)
Criminal Forfeiture – Title 46, U.S.C., Section 70507(a)
Maximum Penalty: Life in prison and $10 million fineAGENCIES
Homeland Security Investigations (HSI)
Drug Enforcement Administration (DEA)
Customs and Border Protection (CBP)
U.S. Coast Guard
HSI Attaché Guatemala City, Guatemala
HSI Attaché Mexico City Mexico
Department of Justice, Office of International Affairs
Department of Justice, Office of Enforcement Operations
Department of Justice, Organized Crime and Drug Enforcement Task Force (OCDETF)
Joint Task Force-Investigations (JTF-I)
Joint Interagency Task Force-South (JIATF-S)
Five Defendants Indicted for Pump-and-Dump Stock Fraud SchemeRead the Press Release
Assistant U. S. Attorneys Aaron P. Arnzen (619) 546-8384 and Andrew J. Galvin (619) 546-9721
NEWS RELEASE SUMMARY – February 17, 2022
SAN DIEGO – Five men from California, Nevada and Florida are charged in an indictment unsealed today with conspiring to manipulate the market for the stock of a healthcare company whose products include COVID-19 diagnostic tests.
The defendants are accused of manipulating the market for the stock of Global WholeHealth Partners Corporation (Ticker: GWHP), which advertised itself as a company focused on healthcare-related development and products. The defendants include Brian Volmer of Carson City, Nevada; Joshua Yafa of Boca Raton, Florida, and his brother, Jamie Yafa of Kissimmee, Florida; Charles Strongo of San Clemente, California; and Carl Marciniak of Minden, Nevada. All were arrested or otherwise contacted by law enforcement today in their hometowns.
According to the indictment, the defendants’ crime involved efforts to run a pump-and-dump scheme in Global WholeHealth Partners’ stock. Their scheme included maintaining control over the company’s free-trading shares through secret nominee accounts; artificially inflating the stock’s price and trading volume by promoting the stock through high pressure call rooms and penny stock newsletters; engaging in manipulative stock trading; and selling the stock at inflated prices to unwitting investors. The defendants collectively spoke on dozens of recorded calls about key aspects of their scheme.
“Pump and dump schemes deteriorate the integrity of the securities markets and destroy Main Street investors’ confidence in their ability to invest on a level playing field,” said U.S. Attorney Randy Grossman. “This case should serve as a reminder that individuals who manipulate the United States securities markets are being scrutinized by law enforcement and will be held accountable.” Grossman thanked the prosecution team, the FBI and the Securities and Exchange Commission for their excellent work on this case.
“These defendants engaged in a conspiracy to inflate stock prices through false and misleading information to enrich themselves and make a quick profit,” said FBI Special Agent in Charge Suzanne Turner. “The FBI is proud to work alongside our partners at the United States Securities and Exchange Commission to preserve the integrity of the stock market and protect honest investors.”
The Securities and Exchange Commission has also taken civil action against several of the defendants in this case.
Case Number 21cr1310-WQH
DEFENDANTS
Brian Volmer Age: 58 Carson City, NV
Joshua Yafa Age: 47 Boca Raton, FL
Jamie Yafa Age: 43 Kissemmee, FL
Charles Strongo Age: 58 San Clemente, CA
Carl Marciniak Age: 57 Minden, NV
SUMMARY OF CHARGES
Conspiracy – Title 18, U.S.C. § 371
Securities Fraud – Title 15, U.S.C. §§ 78j(b) and 78ff, and Title 17, C.F.R., § 240.10b-5
Maximum penalty: Twenty years in prison and $5 million fine
AGENCIES
Federal Bureau of Investigation
United States Securities and Exchange Commission
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty
Mexican Businessman Admits to Brokering Spyware Used to Monitor Political and Business RivalsRead the Press Release
Assistant U. S. Attorney Sabrina L. Fève (619) 546-6786
NEWS RELEASE SUMMARY – February 15, 2022
SAN DIEGO – Mexican businessman Carlos Guerrero pleaded guilty in federal court today, admitting that he conspired to sell and use hacking tools manufactured by private companies in Italy, Israel and elsewhere.
According to court documents, Guerrero owned and operated a consortium of U.S. and Mexican companies and brokered sales of interception and surveillance tools to Mexican government clients, as well as private and commercial customers. In 2014 and 2015, Guerrero worked primarily with an Italian company that sold hacking devices and geolocation tools. Through relationships developed at Guerrero’s direction, Guerrero’s company subsequently brokered the sale of interception devices and hacking services manufactured by Israeli and other companies.
In 2016 and 2017, for example, Guerrero marketed signal jammers, Wi-Fi interception tools, IMSI catchers, and the ability to hack WhatsApp messages to prospective clients in the U.S. and Mexico. Guerrero admitted to knowing that, in some cases, his Mexican government clients intended to use the interception equipment for political purposes, rather than for legitimate law enforcement purposes. In one case, he knowingly arranged for a Mexican mayor to gain unauthorized access to a political rival’s Twitter, Hotmail, and iCloud accounts. Guerrero also admitted that the hacking tools and technologies he brokered would be used for commercial and personal purposes by private clients.
For example, Guerrero himself used the equipment to intercept the phone calls of a U.S. rival while the rival was in both Southern California and Mexico, and Guerrero’s company arranged for a large Mexican business to intercept the phone and email accounts of a Florida-based sales representative in exchange for approximately $25,000.
“Today’s guilty plea helps stem the proliferation of digital tools used for repression and advances the digital security of both U.S. and Mexican citizens,” stated U.S. Attorney Randy Grossman. “This Office is committed to disrupting malicious cyber activities and mitigating unlawful surveillance.” Grossman thanked the prosecution team and Homeland Security Investigations for their excellent work on this case.
“With this guilty plea, we are sending a clear message that companies and individuals who unlawfully violate privacy rights will not be tolerated and they will be held accountable,” said Chad Plantz, Special Agent in Charge for HSI San Diego. “The world we live in is increasingly interconnected by technology meant to improve our lives, but as seen in this case, this same technology can be acquired by bad actors with harmful intentions. HSI and our law enforcement partners will remain committed to bringing to justice those who attempt to manipulate these platforms for nefarious purposes.”
This case was investigated by Homeland Security Investigations, with assistance provided by the Department of Justice’s Computer Crime and Intellectual Property Section.
DEFENDANT Case Number 22cr0280-JLS
Carlos Guerrero Age: 48 Chula Vista, CA and Tijuana, Mexico
SUMMARY OF CHARGES
Conspiracy – Title 18, U.S.C., Section 371 (to violate 18 U.S.C. §§ 2511(1)(a) and 2512(1)(b))
Maximum penalty: Five years in prison and $250,000 fine
AGENCY
Homeland Security Investigations
Drug Dealer Sentenced to 25 Years in Prison for Selling the Fentanyl that Resulted in Death of User; Longest Sentence to DateRead the Press Release
Assistant U. S. Attorneys Stephen H. Wong (619) 546-9464 and Mikaela L. Weber (619) 546-9734
NEWS RELEASE SUMMARY – February 14, 2022
SAN DIEGO – Jahvaris Lamoun Springfield was sentenced in federal court today to 300 months in prison for selling the fentanyl pills that resulted in the fatal overdose of U.S. Army veteran Brendan James Gallagher on February 5, 2019. This is the longest sentence to date in this district for this crime.
On August 27, 2021, following a three-day trial before U.S. District Judge Larry Alan Burns, a jury convicted Springfield of causing Gallagher’s death by distributing fentanyl to Gallagher on February 5, 2019.
The evidence presented at trial showed that Gallagher was a U.S. Army veteran who served overseas in Afghanistan. Upon his return to the United States, Gallagher was honorably discharged. In 2018, Gallagher moved from Boston to San Diego in an attempt to break his addiction. However, Gallagher turned to opioid drugs in the form of counterfeit oxycontin pills later that year.
The evidence also showed that, on the afternoon of February 5, 2019, Gallagher sent text messages to Springfield seeking to purchase oxycontin pills. Later that day, Gallagher’s roommates called 911 to report that Gallagher was nonresponsive in his bedroom. When agents arrived at the residence, they found two counterfeit oxycontin pills that tested positive for fentanyl. Additionally, Gallagher’s autopsy showed a fatal concentration of fentanyl in his blood. In the investigation that followed, agents obtained evidence showing that Springfield sold Gallagher pills on February 5, 2019. When agents arrested Springfield, they found counterfeit oxycontin pills that tested positive for fentanyl in the vehicle Springfield had been driving.
DEA Narcotics Task Force Team 10 led the investigation in this case. Team 10 is a specialty unit, with investigators from HSI, FBI, San Diego Police Department, CA Department of Health Care Services, and the San Diego District Attorney’s Office, that investigates overdose deaths in San Diego. Team 10 responds to the discovery of overdose victims and aggressively pursues criminal cases, up the distribution chain, against both the dealers and their sources of supply.
“This is the longest federal sentence to date in a case of a drug dealer being held responsible for the death of a customer in the Southern District of California, and it should put dealers and those who supply them on notice. Every time we have an overdose death, law enforcement will come looking for you, because lives are at stake,” said U.S. Attorney Randy Grossman. “We will not stop with the street-level dealers but will follow the supply chain as far up as necessary and will use every available criminal and civil tool to combat this deadly epidemic and stop these tragic losses.” Grossman thanked the prosecution team as well as DEA Team 10 investigators for their hard work on the case.
“Today’s sentencing of Jahvaris Springfield is a reflection of the hard work of the investigators assigned to DEA’s Team 10,” said DEA Special Agent in Charge Shelly S. Howe. “These dedicated men and women work tirelessly around the clock to hold drug dealers accountable for the deaths they are causing and to bring justice to families who have lost their loved ones. This 25-year sentence is proof that their efforts have paid off.”
The United States Attorney’s Office is working closely with the San Diego County District Attorney’s Office, the San Diego Police Department, the Drug Enforcement Administration and other federal, state and local law enforcement partners to investigate and prosecute cases targeting those who supply drugs in fatal overdose cases.
For those who suffer from addiction, please know there is help. Call the Crisis line at 888-724-7240; it’s always open.
DEFENDANT Case Number 20cr2923-LAB
Jahvaris Lamoun Springfield Age: 31 San Diego
SUMMARY OF CHARGES
Distribution of Fentanyl Resulting in Death – Title 21, U.S.C., Section 841(a)(1), (b)(1)(C)
Maximum penalty: Life in Prison
AGENCY
Drug Enforcement Administration
Federal Bureau of Investigation
San Diego Police Department
Homeland Security Investigations
California Department of Health Care Services
San Diego County District Attorney’s Office
Suspected Ecuadorian Drug Trafficker Extradited to San Diego for Conspiracy to Distribute CocaineRead the Press Release
Assistant U.S. Attorney Joshua Mellor (619) 546-9733 and Special Assistant U.S. Attorney Nicole Bredariol (619) 546-8419
NEWS RELEASE SUMMARY – February 11, 2022
SAN DIEGO – Pedro Cornelio Pilligua Iduarte, the owner of multiple Ecuadorian flagged vessels which allegedly provided logistical support to drug laden vessels, was extradited to the United States from Spain yesterday.
On March 19, 2021, a federal grand jury sitting in the Southern District of California returned an indictment charging Pilligua Iduarte, and others, with participating in a long-running conspiracy to traffic substantial quantities of cocaine from South America to the United States.
An Ecuadorian national, Pilligua Iduarte was apprehended by Spanish authorities in April 2021 while visiting Madrid. He arrived in San Diego on February 11, 2021, and made his initial appearance today before U.S. Magistrate Judge Bernard G. Skomal. He is scheduled for a detention hearing before Judge Skomal on February 17, 2022, at 1:30 p.m.
This case is part of Operation Pangeros Locos, a multi-year investigation led by Homeland Security Investigations, along with the Drug Enforcement Administration, the Federal Bureau of Investigation, Customs and Border Protection, and United States Coast Guard Investigative Service and has had a significant impact on drug distribution from source countries in South America.
According to court documents, several Ecuadorian fishing vessels, based in Manta, Ecuador, have operated with impunity while providing material support to drug laden vessels to allow them to transport tons of cocaine over thousands of nautical miles of open ocean from Ecuador and Colombia to Mexico, for eventual distribution to the United States. These fishing vessels provide fuel, replacement parts, communication devices, or anything else needed to help the drug laden vessels complete their thousand-mile journey trafficking metric tons of cocaine from Colombia to Mexico. Without the support provided by the fishing vessel captains and owners, these drug laden vessels, typically pangas or low-profile vessels, would not be able to complete this long journey. This investigation has resulted in the seizure of more than 50,000 kilograms of cocaine, the indictment of 27 fishing vessel captains and owners, and the prosecution of 65 cocaine boat crewmembers.
“The Department of Justice appreciates the cooperation of the Spanish authorities in this matter. With the assistance of our law enforcement colleagues at home and around the world, we will aggressively pursue every avenue available in bringing drug traffickers to justice,” said U.S. Attorney Randy Grossman. Grossman thanked the prosecution team and San Diego Strike Force agents, led by Homeland Security Investigations as well as representatives from DEA, FBI, U.S. Coast Guard Investigative Service (CGIS), and Customs and Border Protection for their excellent work on this case.
“This extradition sends a resounding message to drug traffickers around the world that the United States law enforcement community will vehemently pursue those who seek to harm Americans with their deadly drugs and violence,” said HSI San Diego Special Agent in Charge Chad Plantz, who further praised the efforts of the San Diego Strike Force for their support and contribution to this criminal investigation and extradition.
“This indictment is a testament to the success of our collaborative efforts to disrupt transnational criminal organizations and prevent illicit drugs from making their way to America,” said Rear Adm. Brian Penoyer, the Eleventh Coast Guard District commander. “It is a privilege to work alongside the dedicated women and men of the Department of Justice and the Southern District of California who play such a crucial role in the successful team effort stopping these organizations. The hard work of our Coast Guard ships and crews in the Eastern Pacific Ocean culminates in indictments like this that dismantle smuggling organizations, put smugglers behind bars, and keep drugs off our streets.”
This prosecution was brought as a part of the Department of Justice’s Organized Crime Drug Enforcement Task Forces (OCDETF) Co-located Strike Forces Initiative, which provides for the establishment of permanent multi-agency task force teams that work side-by-side in the same location. This co-located model enables agents from different agencies to collaborate on intelligence-driven, multi-jurisdictional operations against a continuum of priority targets and their affiliate illicit financial networks. These prosecutor-led co-located Strike Forces capitalize on the synergy created through the long-term relationships that can be forged by agents, analysts, and prosecutors who remain together over time, and they epitomize the model that has proven most effective in combating organized crime. The specific mission of the San Diego Strike Force is to target the most significant drug trafficking organizations in Mexico, Central and South America.
OCDETF was established in 1982 to conduct comprehensive, multilevel attacks on major drug trafficking and money laundering organizations and is the keystone of the Department of Justice’s drug reduction strategy. Today, OCDETF combines the resources and expertise of its member federal agencies in cooperation with state and local law enforcement. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking organizations, transnational criminal organizations, and money laundering organizations that present a significant threat to the public safety, economic, or national security of the United States.
The Justice Department’s Office of International Affairs worked with law enforcement partners in Spain to secure the arrest of Pilligua Iduarte and his extradition to the United States.
The United States is represented in court by Assistant U.S. Attorneys Joshua Mellor and Nicole Bredariol.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Defendant Information
Defendant Criminal Case No: 21-cr-0896-JLS
Defendant Number
Name
Age
Hometown
2
Pedro Cornelio Pilligua Iduarte
aka Don Pedro, aka Corne, aka P, aka Patron, aka Jefe
48
Manabi, Ecuador
Summary Of Charges
International Conspiracy to Distribute Controlled Substances, in violation of Title 21 U.S.C. §§ 959, 960 and 963. Term of custody including a mandatory minimum 10 years and up to life imprisonment, $10 million fine.
Conspiracy to Possess with Intent to Distribute Cocaine on Board a Vessel, in violation of Title 46 U.S.C. §§ 70503, and 70506. Term of custody including a mandatory minimum 10 years and up to life imprisonment, $10 million fine.
AGENCIES
Homeland Security Investigations
Drug Enforcement Administration
Federal Bureau of Investigation
Customs and Border Protection
United States Coast Guard Investigative Service
Policia Nacional del Ecuador
Policia Nacional de Colombia
United States Marshals Service
Department of Justice, Organized Crime Drug Enforcement Task Forces
Department of Justice, Office of Enforcement Operations
Department of Justice, Office of International Affairs
Alleged Drug Trafficker Extradited from EcuadorRead the Press Release
Assistant U.S. Attorneys Matthew J. Sutton (619) 546-8941 and Mikaela L. Weber (619) 546-9734
NEWS RELEASE SUMMARY – February 11, 2022
SAN DIEGO – Brayan Alberto Rodriguez Alcala, an alleged Sinaloa Cartel drug trafficker, was extradited to the United States from Ecuador today.
On October 19, 2021, a federal grand jury sitting in the Southern District of California returned an indictment charging Rodriguez Alcala with participating in a long-running worldwide conspiracy to traffic substantial quantities of cocaine, from Central and South America to Mexico and ultimately into the United States, as well as laundering millions of dollars in drug proceeds.
Rodriguez Alcala was apprehended by Ecuadorian authorities in November 2021 while visiting Quito, and Ecuador granted the United States’ extradition request in January 2022. He arrived in San Diego this morning and made his initial appearance today before U.S. Magistrate Judge Bernard G. Skomal. He is scheduled for a motion hearing/trial setting before Judge Curiel on May 16, 2022, at 1:30 p.m.
“Those who export dangerous narcotics to the United States and seek to evade justice will find no place to hide,” said U.S. Attorney Randy S. Grossman. “The Department of Justice appreciates the cooperation of the Ecuadorian authorities in this matter. By working with our law enforcement partners at home and around the world, we will continue to work to dismantle dangerous drug cartels.”
“This extradition sends a resounding message to drug traffickers around the world that the United States law enforcement community will vehemently pursue those who seek to harm to Americans with their deadly drugs and violence.” said HSI San Diego Special Agent in Charge Chad Plantz who further praised the efforts of the San Diego Strike Force for their support and contribution to this criminal investigation and extradition.”
“This extradition is another victory against the Sinaloa Cartel that will negatively impact their cocaine distribution operation,” said DEA Special Agent in Charge Shelly S. Howe. “The DEA is committed to holding anyone who profits from drug trafficking accountable, regardless of where they are located in the world.”
“The FBI is proud to work alongside our international and federal partners from HSI, DEA, and IRS to bring wanted persons back to the United States to face justice,” said FBI Special Agent in Charge Suzanne Turner. “This collaborative effort should send a message to fugitives worldwide – the United States government’s international reach has no limits. We will continue to use all investigative resources and international law enforcement partnerships to disrupt these transnational criminal organizations. The FBI is grateful for the hardline stance President Guillermo Lasso and the Government of Ecuador have taken against international fugitives.”
“The supply of narcotics illegally crossing our borders, entering our communities, and killing our citizens is completely fueled by greed,” said IRS Criminal Investigation Special Agent in Charge Ryan L. Korner. “For decades, IRS Criminal Investigation has been committed to working with our law enforcement partners to trace and stem the flow of illicit money to dismantle the drug trade. Today’s extradition of Brayan Rodriguez Alcala, who is charged with drug trafficking and money laundering, demonstrates that you cannot hide from justice.”
The Justice Department extends its gratitude to the Government of Ecuador, and its prosecutorial and law enforcement authorities for making the extradition possible. The Justice Department’s Office of International Affairs and the United States State Department provided significant assistance in securing the defendant’s extradition from Ecuador.
This case is part of a long-running investigation targeting the Valenzuela Transnational Criminal Organization, which is a significant component of the Sinaloa Cartel. To date, the investigation has resulted in the charging of 34 defendants and the seizure of approximately $3.8 million dollars in U.S. currency, 685 kilograms of cocaine, 24 kilograms of fentanyl, and 20,000 rounds of .50 caliber ammunition.
This prosecution is also part of an Organized Crime Drug Enforcement Task Forces (OCDETF) Strike Force Initiative, which provides for the establishment of permanent multi-agency task force teams that work side-by-side in the same location. This co-located model enables agents from different agencies to collaborate on intelligence-driven, multi-jurisdictional operations to disrupt and dismantle the most significant drug traffickers, money launderers, gangs, and transnational criminal organizations.
The United States is represented in court by Assistant U.S. Attorneys Matthew J. Sutton and Mikaela L. Weber
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Defendant Information
Defendant Criminal Case No: 21-cr-2960-GPC
Defendant Number
Name
Age
Hometown
12
Brayan Alberto Rodriguez Alcala
23
Culiacan, Mexico
Summary Of Charges
International Conspiracy to Distribute Cocaine for Purpose of Unlawful Importation, in violation of Title 21 U.S.C. §§ 959, 960 and 963. Term of custody including a mandatory minimum 10 years and up to life imprisonment, $10 million fine.
Conspiracy to Import Cocaine, in violation of Title 21 U.S.C. §§ 952, 960 and 963. Term of custody including a mandatory minimum 10 years and up to life imprisonment, $10 million fine.
Conspiracy to Distribute Cocaine, in violation of Title 21 U.S.C. §§ 841(a)(1) and 846. Term of custody including a mandatory minimum 10 years and up to life imprisonment, $10 million fine.
Conspiracy to Launder Monetary Instruments, in violation of Title 18 U.S.C. 1956(h). Term of custody up to 20 years in prison, a fine of $500,000 or twice the value of the monetary instrument or funds involved.
AGENCIES
Homeland Security Investigations
Drug Enforcement Administration
Federal Bureau of Investigation
Internal Revenue Service - Criminal Investigation
United States Marshals Service
Smuggler who Assaulted Border Patrol Agents with his Car Sentenced to PrisonRead the Press Release
Assistant U. S. Attorney Loren G. Rene (619) 546-8783
NEWS RELEASE SUMMARY – February 9, 2022
SAN DIEGO – Juan Francisco Sanchez-Campos of Phoenix, Arizona, was sentenced in federal court to 41 months in prison for speeding through a U.S. Border Patrol checkpoint on State Route 94 near Jamul, intentionally sideswiping and ramming multiple vehicles, injuring several Border Patrol agents and jeopardizing the lives of 10 undocumented passengers he was smuggling into the U.S. from Mexico.
Sanchez-Campos, a Mexican national, pleaded guilty in June 2021 to one count of transportation of certain aliens, one count of highspeed flight from an immigration checkpoint, and one count of assault on a federal agent.
During the sentencing hearing last week, Border Patrol Agent Andrew Carlson who was injured during the February 23, 2021, assault described how Sanchez-Campos slowed down as he approached the checkpoint and then suddenly took off, narrowly missing several Border Patrol agents, and then proceeded to weave in and out of civilian traffic at speeds up to 100 mph for approximately 10 minutes. The agent told the court Sanchez-Campos rammed four agents’ vehicles in an attempt to flee, and the agents eventually disabled his vehicle using a box-in maneuver. Although the migrants were uninjured, four Border Patrol agents sustained serious injuries, including, but not limited to, shoulder, back, hip, and neck injuries necessitating ongoing medical treatment.
During the sentencing hearing, U.S. District Judge Cathy Ann Bencivengo noted that the defendant showed a callous disregard for human life.
“This defendant risked many lives during his reckless attempt to blow through a checkpoint,” said U.S. Attorney Randy Grossman. “He cared nothing about other motorists, Border Patrol agents or even the people in his vehicle. All he wanted was his payday – a day that will never come, thanks to the brave Border Patrol agents who made sure this defendant was stopped.” Grossman thanked the Border Patrol agents who were injured trying to keep the driver from hurting anyone, and he praised the prosecution team as well as Border Patrol and FBI agents who investigated this case.
“Our current success is the result of the strong resolve and determination of the many men and women of the U.S. Border Patrol and the U.S. Attorney’s Office,” said Chief Patrol Agent Aaron Heitke. “Collaboratively, our efforts resulted in the arrest, conviction, and just sentencing of this callous smuggler.”
DEFENDANT Case Number 21-cr-00879-CAB
Juan Francisco Sanchez-Campos Age: 24 Phoenix, Arizona
SUMMARY OF CHARGES
Transportation of Certain Aliens, in violation 8 U.S.C. § 1324(a)(1)(B)(ii)
Maximum penalty: Five years in prison and $250,000 fine
High Speed Flight from Immigration Checkpoint, in violation 18 U.S.C. § 758
Maximum penalty: Five years in prison and $250,000 fine
Assault on a Federal Agent, in violation 18 U.S.C. 111 (a)(b)
Maximum penalty: Twenty years in prison and $250,000 fine
AGENCIES
Federal Bureau of Investigation
U.S. Border Patrol
Naval Seaman Pleads Guilty to CyberstalkingRead the Press Release
SAN DIEGO – Naval seaman Sergio Reinaldo Williams pleaded guilty in federal court today, admitting that he sent graphic sexual messages via social media to a civilian woman and members of her family, posted sexual videos of her on Pornhub.com without her knowledge or consent, and sent screenshots of the Pornhub.com videos to the victim’s niece.
According to the plea agreement, Williams caused substantial emotional distress to the victim and her family with his virtual attacks. He admitted that he wrote a Facebook message to the victim on October 11, 2020: “I know it all. Don't worry about it the rest of the world will too. I felt your pain, now you're going to feel mine…you will remember me no matter what.”
After Williams posted the videos on Pornhub and the victim texted him about it, Williams replied: “You did this. Like I said, I felt your sting, now you’re going to feel mine.”
Williams also repeatedly threatened the victim, texting her “I'm always around and my eyes are everywhere” and, after she blocked him on social media, “U want it to be over with and this fade away, unblock me and video me…it will only get worse if u don’t.”
“The defendant conducted a disturbing campaign of revenge, harassment and intimidation that inflicted tremendous emotional distress on the victim and her family,” said U.S. Attorney Randy Grossman. “We are committed to seeking justice for victims of cyberstalking and holding the stalkers accountable for their malicious and devastating virtual attacks.” Grossman commended the prosecution team and the Naval Criminal Investigative Service and DOJ teams that diligently pursued this matter.
Williams is scheduled to appear before U.S. District Judge Cynthia A. Bashant for sentencing on May 2, 2022 at 9 a.m.
This case was investigated by the Naval Criminal Investigative Service with assistance provided by the Department of Justice’s Computer Crime and Intellectual Property Section.
Those who have experienced cyberstalking by an active duty service member are urged to contact the following anonymous tip lines: https://www.ncis.navy.mil/Resources/NCIS-Tips/ (Navy and Marines), https://www.cid.army.mil/report-a-crime.html (Army), and https://www.osi.af.mil/Submit-a-Tip/ (Air Force), or call the Department of Defense Hotline at (800) 424-9098. Victims of cyberstalking by non-active duty members should contact local law enforcement or their FBI or HSI field office.
DEFENDANT Case Number 21cr2192-BAS
Sergio Reinaldo Williams Age: 36 Coronado, CA
SUMMARY OF CHARGES
Cyberstalking – Title 18, U.S.C., Section 2261A(2)(B)
Maximum penalty: Five years in prison and $250,000 fine
AGENCY
Naval Criminal Investigative Service
Former U.S. Navy Captain Pleads Guilty as the Seventh Fleet Navy Bribery Trial ApproachesRead the Press Release
Assistant U.S. Attorneys Mark W. Pletcher (619) 546-9714, Michelle Wasserman (619) 546-8431, Valerie Chu (619) 546-6750, and David Chu (619) 546-8266
NEWS RELEASE SUMMARY – February 2, 2022
SAN DIEGO – Former U.S. Navy Captain Donald Hornbeck pleaded guilty in federal court today to bribery charges, admitting that while he directed the operations of all combatant ships in the Seventh Fleet, he accepted at least $67,830 in extravagant dinners, hotels, parties and prostitutes from foreign defense contractor Leonard Francis in exchange for breaching his official duty to the U.S. Navy.
According to his plea agreement, Hornbeck admitted that he corruptly used his official position to benefit Francis, the owner and CEO of Singapore-based Glenn Defense Marine Asia, a ship husbanding company that serviced U.S. Navy ships in the Asia Pacific region. He admitted that he endeavored to send Navy ships into ports serviced by GDMA; shared confidential Navy information with Francis in order to help GDMA; and helped with evaluating and indoctrinating potential new Navy members to help Francis.
Hornbeck was one of nine members of the U.S. Navy’s Seventh Fleet indicted by a federal grand jury in March 2017 for conspiring with Francis and for receiving bribes. Hornbeck is the fourth of the Seventh Fleet defendants to plead guilty. The remaining defendants - who are accused of conspiring to trade military secrets and substantial influence for sex parties with prostitutes and luxurious dinners and travel, among other lavish things of value - include U.S. Navy Rear Admiral Bruce Loveless; Captains David Newland, James Dolan and David Lausman; and Commander Mario Herrera. Trial is scheduled for February 28, 2022.
The overarching fraud and bribery investigation has resulted in federal criminal charges against 34 U.S. Navy officials, defense contractors and the GDMA corporation. So far, 29 of those have pleaded guilty, admitting collectively that they accepted millions of dollars in luxury travel and accommodations, meals, lavish gifts, or services of prostitutes, among many other things of value, from Francis in exchange for helping GDMA win and maintain contracts and overbill the Navy by over $35 million.
“While scores of Navy officials were partying with Leonard Francis, a massive breach of national security was in full swing,” said U.S. Attorney Randy Grossman. “Today another participant has admitted that he lost his way, allowing greed to replace honor and duty as the driving force in his life. This is a day of reckoning for a captain who traded his honor and integrity for material pleasures.”
“Mr. Hornbeck abdicated the standards, responsibilities, and ideals required of a senior U.S. Navy officer over a multi-year period solely to enrich himself and others by willfully facilitating a corrupt Navy contractor's years’ long fraud against the U.S. Government,” said Kelly P. Mayo, the Director of the Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS). “DCIS will continue to work unrelentingly with its law enforcement partners to mitigate corruption from within the Department of Defense and its contractors. This investigation demonstrates the American taxpayer, the Department of Defense, and the national security interests of the United States deserve better.”
“Mr. Hornbeck betrayed his oath to the Navy and deserves to be held fully accountable for his criminal actions to accept lavish gifts from Mr. Francis in exchange for influencing ship schedules in favor of ports that Mr. Francis preferred and otherwise prioritizing the business interests of GDMA and Mr. Francis over those of the Navy,” said NCIS Director Omar Lopez. “NCIS and our law enforcement partners are steadfastly committed to rooting out bribery and corruption that wastes valuable U.S. taxpayer money, damages the integrity of the United States Navy, and undermines the public trust.”
The U.S. Navy’s Seventh Fleet represents a vital piece of the United States military’s projection of power as well as American foreign policy and national security. The largest numbered fleet in the U.S. Navy, the Seventh Fleet is comprised of 60-70 ships, 200-300 aircraft and approximately 40,000 Sailors and Marines. The Seventh Fleet is responsible for U.S. Navy ships and subordinate commands that operate in the Western Pacific throughout Southeast Asia, Pacific Islands, Australia, and Russia and the Indian Ocean territories, as well ships and personnel from other U.S. Navy Fleets that enter the Seventh Fleet’s area of responsibility.
According to his plea agreement, Hornbeck admitted to receiving the following bribes from Francis:
- On February 24, 2007, during the U.S.S. Blue Ridge's port visit to Singapore, Hornbeck and others attended a cocktail reception hosted by Francis on the helipad of the Jaan Restaurant atop the Shangri-La Hotel, followed by an extravagant dinner and live entertainment. The U.S.S. Blue Ridge is the flagship of the Seventh Fleet.
- On March 24, 2007, Hornbeck and others attended a multi-course dinner hosted by Francis at the Oak Door in Tokyo, Japan, during which was served, at Francis’s expense, foie gras, Lobster Thermidor, and Sendai Tenderloin, and for dessert, “Liberté Sauvage,” the winning cake of the 10th Coupe du Monde de la Patisserie 2007, followed by cognac and cigars. During the event, the attendees posed for a photograph wearing custom-made GDMA neckties.
- On January 29, 2008, during the U.S.S. Blue Ridge's port visit to Hong Kong, Francis hosted and paid for a dinner event in the Alsace Room of the Petrus Restaurant, which Hornbeck and several others attended. Dinner that evening was an eight-course meal, featuring black truffle soup, rock lobster salad, oscetra caviar, pan-seared duck liver with pear and sunchoke, Dover sole, grilled Wagyu beef tenderloin Rossini, a selection of fine cheeses, and baked Alaska. The total cost of the event was approximately $18,371.
- On May 2, 2008, Hornbeck and others stayed at Francis’ expense for one night at the Conrad Hotel in Bangkok, during which they were entertained by prostitutes paid for by Francis. On May 4, 2008, a co-conspirator emailed Francis to notify him that Hornbeck and others “were all smiles on the drive home over their “one night in Bangkok.”
- Incident to the U.S.S. Blue Ridge's port visit to Singapore from May 6-9, 2008, Hornbeck and others stayed at Francis’s expense at the Shangri-La Hotel in Singapore.
- On May 6, 2008, Francis hosted dinner at Mezza9 in Singapore, after which, Francis arranged for several prostitutes to entertain Hornbeck and others. On May 7, 2008, Hornbeck emailed Francis to say thank you for a fantastic dinner last night. “Also really enjoyed my new Mongolian Friend,” a reference to a prostitute, to which Francis noted: “Hot Mongolian [B]arbeque Ribs!” On May 10, 2008, a co-conspirator wrote to Francis reporting, “The 3 [Ensigns] [JD, Hornbeck, and BL] were all grins this morning as we got underway! Hornbeck said he couldn’t have survived another night in Singapore with you!”
- On May 22-25, 2008, during a port visit by the U.S.S. Blue Ridge to Manila, Philippines, Hornbeck and several others stayed at Francis’ expense at the Makati Shangri-La in Manila, Philippines, where for himself and the U.S. Navy attendees, Francis booked the Presidential Suite. In this venue, Francis hosted a multi-day party, with many prostitutes in attendance. Room and alcohol charges borne by Francis exceeded $50,000 USD. On or about May 25, 2008, Hornbeck emailed Francis to say, “[J]ust wanted to say thanks - was great seeing you again. Always a pleasure spending time with you.”
Hornbeck is scheduled to be sentenced on September 8, 2022 before U.S. District Judge Janis L. Sammartino.
DEFENDANT Case Number: 17-CR-0623-JLS
Donald Hornbeck Age: 61 Greenfield, Indiana
SUMMARY OF CHARGES
Bribery of a Public Official, in violation of 18 U.S.C. § 201(b)(2)
Maximum Penalty: Fifteen years in prison, $250,000 fine
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
Defense Contract Audit Agency
Attorney General Merrick B. Garland Announces Justice Department Strategy to Combat Human Trafficking; Southern District of California a National Leader in Human Trafficking ProsecutionsRead the Press Release
Director of Media Relations Kelly Thornton (619) 546-9726
NEWS RELEASE SUMMARY – February 2, 2022
SAN DIEGO – U.S. Attorney General Merrick B. Garland has released the Justice Department’s new National Strategy to Combat Human Trafficking pursuant to the Justice for Victims of Trafficking Act.
Rooted in the foundational pillars and priorities of the interagency National Action Plan to Combat Human Trafficking, which President Biden released on Dec. 3, 2021, the Justice Department’s National Strategy is expansive in scope. It aims to enhance the department’s capacity to prevent human trafficking; to prosecute human trafficking cases; and to support and protect human trafficking victims and survivors.
“Human trafficking is an insidious crime,” said Attorney General Garland. “Traffickers exploit and endanger some of the most vulnerable members of our society and cause their victims unimaginable harm. The Justice Department’s new National Strategy to Combat Human Trafficking will bring the full force of the Department to this fight.”
The Southern District of California is proud to be a leader in the fight against human trafficking. Since the enactment of the Trafficking Victims Protection Act in 2000, the Southern District has prosecuted more defendants than any other district in the country -- as of January 2021, 262 defendants in 93 separate cases. The Southern District continues to be a national leader in all types of human trafficking prosecutions, ranging from child-sex trafficking to forced labor trafficking to sex trafficking of adults by force, fraud, or coercion.
Recognizing that, sadly, San Diego is a national hub for domestic minor sex trafficking, the U.S. Attorney’s Office prosecutes individuals who profit from the sexual exploitation of children to the fullest extent of the law, and routinely obtains significant custodial time for those defendants. Recent prosecutions underscore the office’s commitment to justice for victims of these sometimes unseen crimes, including labor trafficking charges against individuals from Imperial Valley Ministries (U.S. v. Gonzalez, et al., 19-CR-3255-BTM), who coerced dozens of mostly homeless individuals to surrender welfare benefits and compelled them to panhandle up to nine hours a day, six days a week, for the financial benefit of church leaders, and charges against the operators of the website “Girls Do Porn,” (U.S. v. Pratt, et al., 19-CR-4488-JLS), who participated in a nationwide scheme that duped and coerced women into making pornography.
“The U.S. Attorney’s Office also routinely works with its state and local partners to provide assistance and justice for survivors and participates in trainings that assist the community in recognizing and stopping human trafficking,” said U.S. Attorney Randy Grossman. “We are grateful to our fantastic Human Trafficking Task Force, and our federal, state, and local partners for sharing this challenging work with us. I am proud of our office’s commitment to holding traffickers accountable, and attempting to provide a better future for victims, and I am proud that we continue to be a leader in this fight.”
Among other things, the Justice Department’s multi-year strategy to combat all forms of human trafficking will:
• Strengthen engagement, coordination and joint efforts to combat human trafficking by prosecutors in all 94 U.S. Attorneys’ Offices and by federal law enforcement agents nationwide.
• Establish federally-funded, locally-led anti-human trafficking task forces that support sustained state law enforcement leadership and comprehensive victim assistance.
• Step up departmental efforts to end forced labor by increasing attention, resources and coordination in labor trafficking investigations and prosecutions.
• Enhance initiatives to reduce vulnerability of American Indians and Alaska Natives to violent crime, including human trafficking, and to locate missing children.
• Develop and implement new victim screening protocols to identify potential human trafficking victims during law enforcement operations and encourage victims to share important information.
• Increase capacity to provide victim-centered assistance to trafficking survivors, including by supporting efforts to deliver financial restoration to victims.
• Expand dissemination of federal human trafficking training, guidance and expertise.
• Advance innovative demand-reduction strategies.
The department’s strategy will be implemented under the direction of the National Human Trafficking Coordinator designated by the Attorney General in accordance with the Abolish Human Trafficking Act of 2017.
If you believe that you or someone you know may be a victim of human trafficking, please contact the National Human Trafficking Resource Center Hotline at 1-888-373-7888, or Text 233733.
To read the National Strategy to Combat Human Trafficking click here.
San Diego Man Arrested and Charged with RobberyRead the Press Release
Assistant U. S. Attorney Carling Donovan (619) 546-4343
NEWS RELEASE SUMMARY – January 28, 2022
SAN DIEGO – Patrick Harrison Hawley was arrested by FBI Special Agents and San Diego Police Department detectives late last night in San Diego on a criminal complaint charging him with one count of Hobbs Act Robbery.
According to the complaint, Hawley is alleged to have robbed the Metro T-Mobile store located at 650 Douglas Drive in Oceanside, California. During that robbery, Hawley allegedly threatened to chop the employee’s head off if she did not comply with his demands for cash and electronic devices. Hawley robbed the store of approximately $300 along with cell phones and other electronic devices valued at approximately $3,500, before fleeing the scene on foot.
Hawley made his initial appearance this afternoon before U.S. Magistrate Judge Allison H. Goddard. He is scheduled to appear for a detention hearing set for February 3 at 10 a.m.
DEFENDANT Case Number 22mj300
Patrick Harrison Hawley Age: 34 San Diego, CA
SUMMARY OF CHARGES
Interference with Commerce by Robbery – Title 18, U.S.C., Section 1951(a)
Maximum penalty: Twenty years in prison and $250,000 fine
AGENCY
Federal Bureau of Investigation
San Diego Police Department
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
This case is the result of the ongoing efforts of the Violent Crime and Human Trafficking (VCHT) Section. Formed in 2019, the VCHT is tasked with leading collaborations between federal and local law enforcement in the investigation and prosecution of cases involving violent crimes, firearms and gang cases; sex trafficking and child exploitation; civil rights, and labor trafficking. The VCHT Section oversees the Southern District of California Coordinators for Project Safe Neighborhoods, Human Trafficking, and Project Safe Childhood. The VCHT Section also provides federal prosecutors to the downtown San Diego Violent Crimes Task Force-Gang Group, the North County Gang Task Force, and the East County Gang Task Force.
U.S. Navy Commander Pleads Guilty in the Run up to the Seventh Fleet Navy Bribery TrialRead the Press Release
Assistant U.S. Attorneys Mark W. Pletcher (619) 546-9714, Michelle Wasserman (619) 546-8431, Valerie Chu (619) 546-6750, and David Chu (619) 546-8266
NEWS RELEASE SUMMARY – January 26, 2022
SAN DIEGO – U.S. Navy Commander Stephen Shedd pleaded guilty in federal court today to bribery charges, admitting that he and eight other indicted leaders of the U.S. Navy’s Seventh Fleet received more than $250,000 in meals, entertainment, travel and hotel expenses, gifts, cash and the services of prostitutes from foreign defense contractor Leonard Glenn Francis.
Shedd is one of nine members of the Seventh Fleet indicted by a federal grand jury in March 2017 for conspiring with and receiving bribes from Francis, the owner and CEO of Singapore-based Glenn Defense Marine Asia, which provided services for U.S. Navy ships in port, including tugboats; fenders; security; food; fuel; water; trash and waste removal; and transportation.
Shedd is the third of the Seventh Fleet defendants to plead guilty. The trial of the remaining defendants is scheduled to begin on February 28, 2022. The remaining six defendants - who are accused of conspiring to trade military secrets and substantial influence for sex parties with prostitutes and luxurious dinners and travel, among other lavish things of value - include U.S. Navy Rear Admiral Bruce Loveless; Captains David Newland, James Dolan, David Lausman and Donald Hornbeck; and Commander Mario Herrera.
The overarching fraud and bribery investigation has resulted in federal criminal charges against 34 U.S. Navy officials, defense contractors and the GDMA corporation. So far, 28 of those have pleaded guilty, admitting collectively that they accepted millions of dollars in luxury travel and accommodations, meals, lavish gifts, or services of prostitutes, among other things of value, from Francis in exchange for helping GDMA win and maintain contracts and overbill the Navy by over $35 million.
The U.S. Navy’s Seventh Fleet represents a vital piece of the United States military’s projection of power as well as American foreign policy and national security. The largest numbered fleet in the U.S. Navy, the Seventh Fleet is comprised of 60-70 ships, 200-300 aircraft and approximately 40,000 sailors and Marines. The Seventh Fleet is responsible for U.S. Navy ships and subordinate commands that operate in the Western Pacific throughout Southeast Asia, Pacific Islands, Australia, and Russia and the Indian Ocean territories, as well ships and personnel from other U.S. Navy Fleets that enter the Seventh Fleet’s area of responsibility.
According to Shedd’s admissions as set forth in his plea agreement, the defendants informed Francis of planned U.S. Navy ship movements by providing Francis with classified U.S. Navy ship schedules and narrative summaries of those schedules. The defendants provided Francis with internal, proprietary U.S. Navy information. The defendants took official acts and exerted pressure on, advocated before, and provided advice to other U.S. Navy officials, knowing and intending that such advocacy and advice would form the basis for such other officials' decisions to pay GDMA’s claims, overlook inflated invoices, quash bid protests filed by GDMA's competitors, suppress competition in contract awards, and resolve in GDMA’s favor other questions, matters, and controversies regarding GDMA’s husbanding business.
From November 2006 to October 2008, Shedd served as the Seventh Fleet’s South Asia Policy and Planning Officer, where he was, in part, responsible for identifying ports that U.S. Navy ships would visit. From November 2008 to May 2010, Shedd served as a Personnel Distribution Officer stationed in Millington, Tennessee, and thereafter, upon being promoted to Commander, from March 2011 until May 2014, Shedd served as the Executive Officer and later the Commanding Officer of the U.S.S. Milius.
“The defendant has admitted he was one of the many whose allegiance was switched from the Navy to Leonard Francis,” said U.S. Attorney Randy Grossman. “This abdication of the defendant’s duties to the Navy and the United States comes with heavy consequences.”
“Mr. Shedd's disgraceful actions while serving in a sensitive position with the U.S. Navy's 7th Fleet betrayed the standards and expectations of all members of the Armed Forces and jeopardized the Fleet's safety and security,” said Kelly P. Mayo, the Director of the Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS). “This lengthy investigation demonstrates that DCIS and our law enforcement partners will continually strive to fortify the integrity of the Department of Defense's procurement systems by doggedly pursuing and rooting-out corruption in the Department.”
“Cmdr. Shedd abused his high-level position in the Navy by illegally accepting lavish gifts from Mr. Francis in exchange for providing Mr. Francis classified ship schedules listing numerous ships, specific ports, and dates for the visits far in advance of ship visits,” said NCIS Director Omar Lopez. “NCIS and our law enforcement partners are committed to rooting out bribery and corruption that wastes valuable U.S. taxpayer money and damages the integrity of the Navy.”
Shedd is scheduled to be sentenced on July 21, 2022 before U.S. District Judge Janis L. Sammartino.
DEFENDANT Case Number: 17-CR-0623-JLS
Stephen Shedd Age: 48 Temecula, CA
SUMMARY OF CHARGES
Conspiracy to Commit Bribery, in violation of 18 U.S.C. § 371
Maximum Penalty: Five years in prison, $250,000 fine
Bribery of a Public Official, in violation of 18 U.S.C. § 201(b)(2)
Maximum Penalty: Fifteen years in prison, $250,000 fine
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
Defense Contract Audit Agency
Former Government Employee Admits to Stealing Identities of 37 Individuals in Bank and Loan Fraud SchemeRead the Press Release
Assistant U. S. Attorney Michelle L. Wasserman (619) 546-8431
NEWS RELEASE SUMMARY – January 26, 2022
SAN DIEGO – Kevin Lee of Chula Vista pleaded guilty in federal court today to using his position at the Defense Contract Management Agency (“DCMA”) to steal the identities of at least 37 individuals and using those identities to commit over $240,000 in bank and loan fraud.
DCMA is a federal agency responsible for administering contracts for the Department of Defense and other authorized federal agencies. For his former position at DCMA, Lee held a Top Secret, Sensitive Compartmentalized Information (TS-SCI) clearance. Beginning in approximately September 2018 and continuing up to and including September 2020, Lee devised a scheme to defraud various banks and loan companies by using stolen identities to apply for and obtain loans, which he then used to pay personal debts and bills.
According to his plea agreement, Lee initially used the identities of family members to apply for and obtain fraudulent loans. In approximately September 2019, Lee began applying for loans and bank accounts using information he had access to as a result of his employment at DCMA. Specifically, Lee accessed a DCMA Sharepoint site called DCMA 360 that contained personal identifying information belonging to various individuals employed by, or in some way in contact with, DCMA, including Department of Defense employees and contractors.
The plea agreement said the following:
The information Lee accessed included social security numbers, birth dates, addresses, and various forms relating to government employment. After collecting sufficient personal identifying information on an individual, Lee used that information to apply for bank accounts and loans online. To do so, Lee created fraudulent identification documents using the stolen information, including driver’s licenses and passports. Lee additionally created and/or doctored pay stubs, bank statements, and tax documents to support his loan applications. In order to qualify for more loan money, Lee fraudulently increased the salary reflected on some of the documents. Lee created false email accounts for some of the stolen identities, and used various Google voice phone numbers to accomplish his fraud.
For example, Lee created a fake Gmail account for a DCMA employee, D.B. Two months later, on March 26, 2020, Lee conducted six separate searches for personal identifying information belonging to D.B. on the DCMA 360 site. Between March 26-March 30, 2020, Lee then used D.B.’s name, birthdate, address, and social security number to fraudulently apply for at least eight bank accounts and loans using D.B.’s identity. Lee created a fake Arizona Driver’s License using D.B.’s name address and birthdate, which he submitted with the fraudulent loan applications. Lee successfully obtained three loans in D.B.’s name, and used the funds for personal expenses. In total, Lee stole and used or attempted to use the identities of 37 actual individuals at 16 different financial institutions. The total amount of Lee’s actual and attempted fraud was $244,513.45.
“Government employees hold positions of public trust,” said U.S. Attorney Randy S. Grossman. “The identity theft and fraud in this case is particularly egregious because Mr. Lee violated that public trust for his own selfish ends. Those who engage in fraud and identity theft will be prosecuted to the full extent of the law.” Grossman thanked the prosecution team as well as Defense Criminal Investigative Service and
Defense Contract Management Agency-Office of Inspector General for their excellent work on this case.
“The theft of personally identifiable information can significantly harm our military service members, civilian employees, and their families,” said Kenneth A. DeChellis, Special Agent in Charge, DoD Office of Inspector General, DCIS - Cyber Field Office. “This conviction, resulting from the coordinated actions of the Department of Defense Office of Inspector General, Defense Criminal Investigative Service, Cyber and Western Field Offices, as well as our partner agencies, demonstrates our commitment to swift action against those who attempt to enrich themselves at the expense of our current and prior Department of Defense personnel.
Lee is next scheduled to appear at a sentencing hearing on April 22, 2022, at 9:30 a.m. before Judge Lopez.
SUMMARY OF CHARGES Case Number 22CR147-LL
Kevin Lee Age:41 Chula Vista, CA
Wire Fraud, in violation of Title 18, USC 1343
Maximum Penalty: Twenty years in prison
Aggravated Identity Theft, in violation of Title 18 USC 1028A
Maximum Penalty: Mandatory two years consecutive to any other term of imprisonment imposed.
INVESTIGATING AGENCIES
Defense Criminal Investigative Service (DCIS)
Defense Contract Management Agency-Office of Inspector General (DCMA-OIG)
Director of Chabad at UCSD Admits to Conspiracy to Defraud Qualcomm with Former Chabad of Poway Rabbi GoldsteinRead the Press Release
Assistant U. S. Attorneys Michelle L. Wasserman (619) 546-8431 and Valerie Chu (619) 546-6750
NEWS RELEASE SUMMARY – January 26, 2022
SAN DIEGO – Rabbi Yehuda Hadjadj, director of Chabad at the University of California, San Diego, pleaded guilty in federal court today to conspiring with former Chabad of Poway Rabbi Yisroel Goldstein and at least three other individuals to defraud Qualcomm’s corporate matching program.
Beginning no later than August 2010 and continuing through late 2017, Hadjadj fraudulently obtained funds from Qualcomm’s corporate matching program for Chabad at UCSD, by inducing at least three donors to make sham donations to Friendship Circle, a non-sectarian organization run at the time by Rabbi Goldstein. Chabad at UCSD was not eligible to receive corporate matching funds from Qualcomm, as the corporate matching program excluded sectarian or denominational religious groups from its eligible donation recipients. To conceal the true recipient of the matched funds, Hadjadj told the donors to write checks to Friendship Circle. At the time, or shortly after the donor wrote the check, Hadjadj returned all or most of the donation in cash. The donors would nonetheless request that Qualcomm match the sham donation. After Qualcomm matched the sham donations to Friendship Circle, Rabbi Goldstein funneled approximately two thirds of the matched funds back to Hadjadj, keeping one third for himself.
According to Hadjadj’s plea agreement, on September 26, 2017, a donor wrote a check for $4,900 to Friendship Circle. Shortly thereafter Hadjadj visited the donor’s home and gave him $4,400 in cash. The donor nonetheless requested that Qualcomm match the $4,900 sham donation. In total, Hadjadj met with this donor eleven times to give him cash in exchange for sham matched donations to Friendship Circle. Hadjadj recruited at least two additional donors to engage in this scheme. Hadjadj fraudulently obtained approximately $40,000 for Chabad at UCSD over the course of the scheme.
In July 2020, Rabbi Goldstein pleaded guilty to fraud charges, admitting that he participated in a complex, years-long, multi-million-dollar tax-evasion scheme and other financial deceptions involving theft of public money. Rabbi Goldstein’s plea agreement outlined the fraud scheme with Hadjadj.
Hadjadj is the tenth individual to plead guilty to crimes discovered in this investigation. Two additional individuals agreed to deferred prosecution agreements as a result of the investigation.
“Rabbi Hadjadj violated his position of trust within our community and took advantage of a corporate program meant to encourage employee charitable donations,” said U.S. Attorney Randy Grossman. “Fraud has no place in fundraising, and those who use lies and dishonesty to obtain money, whether for themselves or for an organization, will be held to account for their crimes.” Grossman thanked the prosecution team and FBI and IRS agents for their excellent work on this case.
“The defendant abused his status and connections to help facilitate a years-long fraud scheme,” said FBI Special Agent in Charge Suzanne Turner. “The FBI is proud to work with our federal partners at the Internal Revenue Service to root out these schemes which not only defraud the companies who participate in corporate matching programs, but also diminish the public’s trust in the validity of charitable contributions.”
“Rabbi Hadjadj conspired with Rabbi Goldstein to cheat Qualcomm, and even recruited others who trusted him to commit fraud,” said IRS Criminal Investigation, Special Agent in Charge Ryan L. Korner. “IRS Special Agents will do everything in our power to uncover financial deceptions, and we are committed to working with our law enforcement partners to ensure that justice is served against all who choose to place their own greed ahead of the welfare of our businesses and the community.”
Rabbi Hadjadj is next scheduled to appear at a sentencing hearing on April 18, 2022, at 9 a.m. before Judge Cynthia Ann Bashant.
SUMMARY OF CHARGES Case Number 22CR148-BAS
Yehuda Hadjadj Age:47 La Jolla, CA
Conspiracy to Commit Wire Fraud, in violation of Title 18, USC 371
Maximum Penalty: Five years in prison
PREVIOUSLY CHARGED DEFENDANTS AND SUMMARY OF CHARGES
Yisroel Goldstein, Case Number 20CR1916-BAS Age: 58 Poway
Conspiracy to Defraud the United States and Commit Wire Fraud, in violation of Title 18, USC 371
Maximum Penalty: Five years in prison
Alexander Avergoon, Case Number 19CR2955-BAS Age: 44 San Diego
Wire Fraud, in violation of Title 18, USC 1343
Maximum Penalty: Twenty years in prison
Aggravated Identity Theft, in violation of Title 18, USC 1028A
Maximum Penalty: Two years minimum consecutive term in prison
Money Laundering, in violation of Title 18, USC 1956(a)(1)(B)(i)
Maximum Penalty: Twenty years in prison
Bruce Baker, Case Number 20CR1912-BAS Age: 74 La Jolla
Conspiracy to Defraud the United States and file false tax returns, in violation of Title 18, USC 371
Maximum Penalty: Five years in prison
Bijan Moossazadeh, Case Number 20CR1893-BAS Age: 63 San Diego
Filing a False Tax Return, in violation of Title 26, USC 7206(1)
Maximum Penalty: Three years in prison
Yousef Shemirani, Case Number 20CR1895-BAS Age: 74 Poway
Filing a False Tax Return, in violation of Title 26, USC 7206(1)
Maximum Penalty: Three years in prison
Boris Shkoller, Case Number 20CR1913-BAS Age: 83 Del Mar
Filing a False Tax Return, in violation of Title 26, USC 7206(1)
Maximum Penalty: Three years in prison
Mendel Goldstein, Case Number 20CR2772-BAS Age: 63 Brooklyn, NY
Conspiracy to Defraud the United States and Commit Wire Fraud, in violation of Title 18, USC 371
Maximum Penalty: Five years in prison
Stuart Weinstock, Case Number 21CR0042-BAS Age: 64 Escondido, CA
Filing False Tax Return, in violation of Title 26, U.S.C. §7206(1)
Maximum Penalty: Three years in prison
Jason Ellis, Case Number 21CR2200-BAS Age: 42 Poway, CA
Filing False Tax Return, in violation of Title 26, U.S.C. §7206(1)
Maximum Penalty: Three years in prison
Rotem Cooper, Case Number 20CR3968-BAS Age: 54 San Diego
Deferred Prosecution Agreement
Conspiracy to Commit Wire Fraud, in violation of Title 18, USC 371
Igor Shtilkind, Case Number 20CR3955-BAS Age: 55 San Diego
Deferred Prosecution Agreement
Conspiracy to Commit Wire Fraud, in violation of Title 18, USC 371
INVESTIGATING AGENCIES
Federal Bureau of Investigation
Internal Revenue Service
U.S. Attorney’s Office Releases Annual ReportRead the Press Release
SAN DIEGO – The United States Attorney’s Office today released its Annual Report, which details major cases and achievements of 2021 that took place despite extraordinary challenges to law enforcement and federal court operations in the district due to the ongoing pandemic.
“I am very proud of our significant accomplishments during another year of difficult conditions,” said U.S. Attorney Randy Grossman. “Because of the excellent work of this office and our law enforcement partners, scores of violent criminals and large quantities of deadly drugs and guns are off the street, not only in this district, but around the world. This report provides a window into a few of the many civil and criminal cases we worked on this year as well as our significant community outreach efforts.”
In 2021, our Criminal Division charged approximately 3,850 felony cases and conducted more than 40 jury trials, all while operating in a maximum telework posture. Likewise, our Civil Division represented the United States and its agencies and employees in civil litigation in the district, managing a heavy caseload involving hundreds of depositions and court appearances, and pursued multiple affirmative enforcement cases.
Here are just a few highlights you will read about in this report:
- In response to a surge in violent crime in 2021, the U.S. Attorney’s Office and its law enforcement partners launched an effort to strategically prosecute the region’s most violent and prolific offenders who are believed to be most responsible for the spike, including those with criminal history and criminal gang affiliation who commit gun crimes. As a result, federal gun-related prosecutions in the Southern District of California increased in FY 2021 by almost 50 percent – to the highest levels seen in this office.
- The office addressed a disturbing increase in reports of hate crimes motivated by race, ethnicity and ancestry, and gender identity in 2021 on two fronts: Criminal prosecution and community outreach. The most notorious hate crime in recent memory in San Diego County concluded in 2021 with the sentencing of John T. Earnest, a Rancho Penasquitos man who entered the Chabad of Poway on April 27, 2019, opened fire and killed one woman, injured three others, and attempted to kill 50 others. He was sentenced to life plus 30 years in prison for his hate crimes. The office also led several outreach initiatives to educate the public about recognizing and reporting hate crimes, including a webinar in recognition of Asian Americans and Pacific Islanders (AAPI) month. The webinar, titled “Understanding AAPI Discrimination in Our Past and Present to Reclaim our Future,” educated the audience on AAPI hate in America, lessons learned from past hate incidents, and how to actively stop hate toward this community.
- In 2021, there was a tragic wave of smuggling-related deaths in San Diego and Imperial counties. In less than a three-week span, four lives were lost and dozens of people had to be rescued from rough seas and hospitalized after multiple maritime smuggling events went terribly wrong. The U.S. Attorney’s Office charged a number of people in connection with those deaths and held an important news conference, imploring migrants not to trust their lives to greedy smugglers. Assistant U.S. Attorney Victor White was selected to be the co-chair of Joint Task Force Alpha, a law enforcement group that will marshal the investigative and prosecutorial resources of the Department of Justice, in partnership with the Department of Homeland Security (DHS), to enhance U.S. enforcement efforts against the most prolific and dangerous human smuggling and trafficking groups operating in Mexico and the Northern Triangle countries of Guatemala, El Salvador, and Honduras.
- Overdose deaths spiked again in San Diego County this year. Although the year-end statistics will not be finalized until early 2022, it is likely that fentanyl overdose deaths will have nearly doubled. The U.S. Attorney’s Office has continued to actively intake cases in which the distribution of fentanyl and heroin have resulted in death. During 2021, at least eleven defendants were charged with the distribution of fentanyl “resulting in death” which carries with it a 20-year minimum mandatory sentence. Those cases have included charges stemming from the death of a U.S. Marine as well as a California Firefighter. Significantly, two such cases were tried to verdict during 2021 and both resulted in swift guilty verdicts on the 20-year minimum mandatory charge; in both cases, the defendants will be sentenced in 2022. One of those cases related to a defendant who sold a cocaine/fentanyl mixture that caused the collapse of three individuals in the parking lot of a bar and grill, resulting in one death. In 2021, the office also secured multiple guilty pleas in these cases, including a guilty plea by a defendant who admittedly sold fentanyl that resulted in the death of a high school student knowing the individual was, in fact, a high school student.
- The office also pursued civil cases against doctors who, even in this climate of heightened awareness of the dangers of opioids, continue to overprescribe opioids. San Diego area pain clinic doctor Brenton Wynn, M.D., paid $200,000 to resolve allegations that he illegally prescribed opioids and other dangerous drugs to his patients. The civil settlement stems from the United States’ continued efforts to combat the opioid epidemic on all fronts, including this investigation of whether Dr. Wynn illegally prescribed opioids to his patients in violation of the Controlled Substances Act.
Also in 2021, the office prosecuted cases with worldwide impact – from Chinese hackers to corrupt Navy officials to criminal syndicates around the globe who used encrypted devices to go under the radar of law enforcement. The 500-plus arrests that took place during a worldwide two-day takedown in June were possible because of this unprecedented San Diego-based investigation. For the first time, the FBI operated its own encrypted device company, called “ANOM.” During the course of the investigation, while ANOM’s criminal users unknowingly promoted and communicated on a system operated by the FBI, agents catalogued more than 27 million messages between users around the world who had their criminal discussions reviewed, recorded, and translated by the FBI, until the platform was taken down. “It has been my pleasure to lead such a talented and dedicated group of professionals,” Grossman said. “I want to applaud all the lawyers and staff in our office, as well as our law enforcement partners, who continue to protect and achieve justice for our community. All of us in law enforcement are committed to maintaining public safety as we move forward and the pandemic hopefully becomes a distant memory.”
San Diego Pharmacy Pays $105,000 Penalty for Illegitimately Dispensing OpioidsRead the Press Release
SAN DIEGO – San Diego’s Balboa Pharmacy has paid $105,000 to resolve allegations that it illegally dispensed opioids and other dangerous drugs to its patients, according to a settlement agreement signed by Balboa Pharmacy and the United States. The settlement stems from the United States’ continued efforts to combat the opioid epidemic on all fronts, including this investigation of whether Balboa Pharmacy illegally dispensed opioids to its patients in violation of the federal Controlled Substances Act.
The Controlled Substances Act states that pharmacists have a responsibility to only fill prescriptions that are written for a legitimate medical purpose while acting in the usual course of professional practice. The United States alleged that Balboa Pharmacy failed to meet its responsibility when it filled opioid prescriptions without resolving—or often even attempting to resolve—“red flags” that the prescriptions raised. “Red flags” are indications that a prescription may be invalid. According to the settlement agreement, Balboa Pharmacy filled prescriptions without resolving the following commonly known red flags:
- large quantities of opioids well above guidelines for treating patients, which sometimes exceeded a daily Morphine Milligram Equivalent of 100;
- dangerous combinations of drugs, including duplicative therapy; opioids and benzodiazepines (e.g., Valium, Xanax); and opioids, benzodiazepines, and muscle relaxants (e.g., Soma), a combination that is colloquially referred to by drug abusers as the “trinity” because of the rapid euphoric effects of this combination of drugs;
- patients who received prescriptions from multiple prescribers, which sometimes were for the same types of controlled substances or for dangerous combinations of drugs; and
- filling prescriptions for patients early, which includes filling a patient’s prescription before the patient’s earlier prescription for the same drug ran out.
The investigation exemplifies the Department of Justice’s willingness to investigate pharmacies that may be filling dangerous prescriptions without first confirming the legitimacy of each prescription. Public health experts have long warned health care providers that overdose risk is elevated in patients receiving medically prescribed opioids, particularly those receiving high dosages. Pharmacists should carefully track the potency of opioids dispensed to patients by noting the Morphine Milligram Equivalent (MME, also commonly referred to as Morphine Equivalent Dose or MED) of prescribed opioids. Among other things, tracking MMEs advances better practices for pain management by reinforcing the need to consider alternatives to using high-dosage opioids to treat pain, and to appropriately justify decisions to use opioids at dosages that place patients at high risk of addiction, abuse, and overdose. Furthermore, dispensing high dosages increases the risk that patients will divert opioids.
“Pharmacies are the last line of defense protecting the public from addictive opioids and other controlled substances,” said U.S. Attorney Randy S. Grossman. “This office will pursue pharmacists who carelessly disregard red flags, opting instead to rubberstamp questionable prescriptions. We will continue to use all available tools to combat the serious opioid epidemic.” Grossman thanked the prosecution team and investigators for their excellent work on this case.
In addition to the settlement agreement, the DEA and Balboa Pharmacy entered into a Memorandum of Agreement in October 2021 in which Balboa Pharmacy agreed to, among other things, develop policies and procedures and training that address the identification and resolution of “red flags.”
“This investigation is a reminder that all pharmacies have a responsibility to ensure that prescriptions are issued for a legitimate medical purpose,” said DEA Special Agent in Charge Shelly S. Howe. “Failure to do so allows prescriptions to become subject to abuse and diversion, fueling the ongoing opioid epidemic. DEA will continue to hold pharmacies, such as Balboa Pharmacy, accountable.”
To report a tip directly to a DEA representative regarding medical personnel writing suspicious opioid prescriptions and pharmacies dispensing large amounts of opioids, call (571) 324-6499, or visit the DEA’s website (https://www.deadiversion.usdoj.gov/) and click on “Report Illicit Pharmaceutical Activities.”
Assistant U.S. Attorney Dylan M. Aste of the U.S. Attorney’s Office for the Southern District of California handled this matter along with DEA investigators.
The claims resolved by this settlement are allegations only and there has been no determination of liability.
Former Corrections Officer Sentenced to 3 Years for Smuggling Drugs and Cell Phones into State PrisonRead the Press Release
SAN DIEGO – Anibal Navarro, a former corrections officer at Richard J. Donovan Correctional Facility, was sentenced in federal court today to 37 months in prison for smuggling methamphetamine, heroin, marijuana and cell phones into state prison.
Navarro pleaded guilty, admitting that he was part of a network of 12 individuals both inside and outside the prison that smuggled in contraband and illegal narcotics. All the other defendants have pleaded guilty and been sentenced (case number 17cr446-AJB).
One of Navarro’s co-conspirators, prison inmate Martin Gomez, organized and directed the other participants, including Navarro, from his cell in California state prisons in San Diego and Los Angeles. Gomez arranged for individuals outside of prison to smuggle contraband into Donovan prison and deliver drugs and cell phones to various inmates through Navarro. Gomez directed those inmates to receive the contraband and deliver it to still other inmates within the prison.
Gomez approached Navarro while Gomez was an inmate at Donovan, offering him an avenue to make extra money that Gomez knew Navarro needed. Navarro was paid between $1,000 and $2,000 each time he smuggled contraband into the prison. Gomez continued to lead the conspiracy for over two years, even after he was transferred out of Donovan to another prison. Over 500 grams of methamphetamine, heroin, cell phones, and other contraband were smuggled into Donovan through Navarro at Gomez’s direction while he was incarcerated elsewhere.
The smuggled phones were used to coordinate criminal activity both inside and outside Donovan.
“Corrections Officers are charged with the responsibility of keeping the public, inmates, and other prison staff safe,” said U.S. Attorney Randy Grossman. “Former Officer Navarro personally profited from creating a dangerous environment in the prison by smuggling in extremely harmful and addictive narcotics. Additionally, cell phones inside a prison allow inmates to coordinate other illegal acts, like smuggling drugs, fraud, and even violence. Today’s sentence demonstrates that the significant consequences far outweigh any financial gain for those who abuse their positions of trust.” Grossman thanked the prosecution team, the FBI, the California Department of Corrections and Rehabilitation’s Office of Internal Affairs, the California Department of Corrections and Rehabilitation’s Investigative Service Unit and the United States Postal Service – Inspector Service, for their excellent work on this case.
“Anibal Navarro abused his position and betrayed his oath as a Corrections Officer to further a conspiracy which included smuggling dangerous drugs and cell phones into our state prison system, allowing inmates to continue their criminal enterprise even while incarcerated,” said FBI Special Agent in Charge Suzanne Turner. “Today’s sentence hopefully sends a message to any government employee considering using their position of authority to further their own interests and enrich themselves – the FBI will continue to work diligently to root out public corruption at all levels.”
The FBI encourages the public to report allegations of public corruption to our hotline at (877) NO-BRIBE (662-7423).
DEFENDANT Case No. 16cr1664
Anibal Navarro Age 43 Chula Vista, California
SUMMARY OF CHARGES
Conspiracy to Distribute Illegal Narcotics – Title 21, U.S.C., Sections 841(a) and 846;
Bribery Concerning Programs Receiving Federal Funds – Title 18, U.S.C., Section 666
Maximum penalty: Life in prison and $20 million fine
AGENCY
Federal Bureau of Investigation – San Diego Field Office
California Department of Corrections and Rehabilitation’s Office of Internal Affairs
California Department of Corrections and Rehabilitation’s Investigative Service Unit
United States Postal Service – Inspector Service
UC San Diego Health Pays $2.98 Million to Resolve Allegations of Ordering Unnecessary Genetic TestingRead the Press Release
Assistant U. S. Attorneys Joseph Price (619) 546-7642 and Joseph Purcell (619) 546-7643
NEWS RELEASE SUMMARY – January 11, 2022
SAN DIEGO – UC San Diego Health, the academic health system of the University of California, San Diego, has paid $2.98 million to resolve allegations that it violated the False Claims Act by ordering medically unnecessary genetic testing reimbursed by Medicare, the Justice Department announced today.
The settlement resolves allegations that, from December 2015 to October 2019, UC San Diego Health ordered and submitted referrals for medically unnecessary genetic testing performed by CQuentia Arkansas Labs, CQuentia NGS, and Total Diagnostic II (collectively “the CQuentia labs”). The government alleged that this conduct led to the submission of false claims for payment to Medicare for unnecessary genetic testing.
“Ordering unnecessary genetic tests creates a drain on vital government-funded health care programs like Medicare,” said U.S. Attorney Randy Grossman. “This settlement is another example of this office’s commitment to work with our law enforcement partners to hold medical providers accountable when their conduct leads to taxpayers bearing the cost of improper billing practices.” Grossman thanked the prosecution team and investigators for their excellent work on this case.
“Hospitals are the gatekeepers for medical care and are expected to ensure that all services performed at their direction, including genetic tests, are medically appropriate,” said Acting Assistant Attorney General Brian M. Boynton for the Justice Department’s Civil Division. “The department will continue to pursue those who undermine the integrity of federal health care programs and waste taxpayer dollars.”
“This resolution demonstrates the FBI’s commitment to pursuing those who abuse our health care system,” said FBI Special Agent in Charge Suzanne Turner. “False claims diminish trust in our health care while generating enormous unnecessary costs and the FBI is proud to work alongside our federal partners to disrupt such schemes.”
The resolution obtained in this matter was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Southern District of California, with assistance from the U.S. Department of Health & Human Services Office of Inspector General and the FBI.
The government’s pursuit of this matter illustrates its emphasis on combating health care fraud. 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 the Department of Health and Human Services, at 800‑HHS‑TIPS (800-447-8477).
This matter was handled by Nicholas C. Perros of the Civil Division’s Commercial Litigation Branch, Fraud Section, and Assistant U.S. Attorneys Joseph Price and Joseph Purcell of the U.S. Attorney’s Office for the Southern District of California.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
UC San Diego Health Pays $2.98 Million to Resolve Allegations of Ordering Unnecessary Genetic TestingRead the Press Release
UC San Diego Health, the academic health system of the University of California, San Diego, has paid $2.98 million to resolve allegations that it violated the False Claims Act by ordering medically unnecessary genetic testing reimbursed by Medicare.
The settlement resolves allegations that, from December 2015 to October 2019, UC San Diego Health ordered and submitted referrals for medically unnecessary genetic testing performed by CQuentia Arkansas Labs, CQuentia NGS and Total Diagnostic II (collectively “the CQuentia labs”). The government alleged that this conduct led to the submission of false claims for payment to Medicare for these tests.
“Hospitals are the gatekeepers for medical care and are expected to ensure that all services performed at their direction, including genetic tests, are medically appropriate,” said Acting Assistant Attorney General Brian M. Boynton for the Justice Department’s Civil Division. “The department will continue to pursue those who undermine the integrity of federal health care programs and waste taxpayer dollars.”
“Ordering unnecessary genetic tests creates a drain on vital government-funded health care programs like Medicare,” said U.S. Attorney Randy Grossman for the Southern District of California. “This settlement is another example of this office’s commitment to work with our law enforcement partners to hold medical providers accountable when their conduct leads to taxpayers bearing the cost of improper billing practices.”
“This resolution demonstrates the FBI’s commitment to pursuing those who abuse our health care system,” said Special Agent in Charge Suzanne Turner of the FBI San Diego Field Office. “False claims diminish trust in our health care while generating enormous unnecessary costs, and the FBI is proud to work alongside our federal partners to disrupt such schemes.”
The resolution obtained in this matter was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section and the U.S. Attorney’s Office for the Southern District of California, with assistance from the U.S. Department of Health & Human Services Office of Inspector General and the FBI.
The government’s pursuit of this matter illustrates its emphasis on combating health care fraud. 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 the Department of Health and Human Services, at 800‑HHS‑TIPS (800-447-8477).
This matter was handled by Trial Attorney Nicholas C. Perros of the Civil Division’s Commercial Litigation Branch, Fraud Section, and Assistant U.S. Attorneys Joseph Price and Joseph Purcell of the U.S. Attorney’s Office for the Southern District of California.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Sinaloa Cartel Drug Trafficker and Money Launderer Sentenced to PrisonRead the Press Release
A drug trafficker and money launderer for the Sinaloa Cartel was sentenced yesterday to 188 months in prison for supervising the smuggling of multi-kilogram quantities of cocaine, methamphetamine, and heroin from Mexico into the United States and the smuggling of drug proceeds from the United States to Mexico.
Roberto Gallegos-Lechuga, 39, of Sinaloa, Mexico, was extradited from Mexico to the United States in March 2020. In July 2021, he pleaded guilty to conspiracy to commit international money laundering. According to court documents, Gallegos-Lechuga coordinated the smuggling of large quantities of illegal narcotics through ports of entry in Southern California. Gallegos-Lechuga also supervised and managed couriers who smuggled hundreds of thousands of dollars in cash at a time, from the illegal sale of drugs, from the United States to Mexico as part of the cartel’s ongoing efforts to promote drug trafficking.
“This defendant was part of a violent transnational criminal organization that posed a danger to our communities,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “We will prosecute to the fullest extent of the law those who export dangerous narcotics to the United States and finance those activities through money laundering. I want to thank the Government of Mexico for extraditing Gallegos-Lechuga to the United States. Through such partnerships, we will continue to work to dismantle dangerous drug cartels.”
“Those who manage drug trafficking and money laundering efforts for the Sinaloa cartel, one of the most violent criminal organization in the world, will continue to face justice in this district,” said U.S. Attorney Randy Grossman for the Southern District of California. “Stopping the flow of funds to drug cartels and of deadly drugs into the United States continues to be a priority for us and our law enforcement partners.”
“This sentencing is the culmination of years of relentless work by Homeland Security Investigations (HSI) and its partners targeting the Sinaloa Cartel,” said Special Agent in Charge Chad Plantz of HSI San Diego. “This investigation highlights HSI’s dedication to go after both cartel drug trafficking and money laundering activity. The sentencing sends a resounding message to Transnational Criminal Organizations that HSI and our partners are unyielding in our pursuit of justice.”
Seven other defendants have previously pleaded guilty in the case and been sentenced: Omar Ayon-Diaz, Osvaldo Contreras-Arriaga, Cesar Hernandez-Martinez, Gibran Rodriguez-Mejia, Oscar Rodriguez-Guevara, Bianca Acedo Ojeda, and Joel Acedo Ojeda. In addition, approximately 20 other individuals linked to the scheme who served as drug and money couriers and drug stash house operators have entered guilty pleas and been sentenced in related cases.
The investigation was conducted by HSI. The Justice Department’s Office of International Affairs worked with law enforcement partners in Mexico to secure the arrest of Gallegos-Lechuga in Mexico and his extradition to the United States.
The case is being prosecuted by Senior Trial Counsel Mark Irish of the Criminal Division’s Money Laundering and Asset Recovery Section and Assistant U.S. Attorney Larry Casper of the U.S. Attorney’s Office for the Southern District of California.
Sinaloa Cartel Drug Trafficker and Money Launderer Sentenced to 188 Months in PrisonRead the Press Release
Assistant U. S. Attorney Larry Casper (619) 546-6734
NEWS RELEASE SUMMARY – January 11, 2022
SAN DIEGO – Roberto Gallegos-Lechuga, a drug trafficker and money launderer for the Sinaloa Cartel, was sentenced in federal court yesterday to 188 months in prison for supervising the smuggling of multi-kilogram quantities of cocaine, methamphetamine and heroin from Mexico into the United States and the smuggling of drug proceeds from the United States to Mexico.
Gallegos-Lechuga, 39, of Sinaloa, Mexico, was extradited from Mexico to San Diego in March of 2020. In July 2021, he pleaded guilty to conspiracy to commit international money laundering. According to court documents, Gallegos-Lechuga coordinated the smuggling of large quantities of illegal narcotics through ports of entry in Southern California. Gallegos-Lechuga also supervised and managed couriers who smuggled hundreds of thousands of dollars in cash at a time, from the illegal sale of drugs, from the United States to Mexico as part of the cartel’s ongoing efforts to promote drug trafficking.
“Those who manage drug trafficking and money laundering efforts for the Sinaloa cartel, one of the most violent criminal organizations in the world, will continue to face justice in this district,” said U.S. Attorney Randy Grossman for the Southern District of California. “Stopping the flow of funds to drug cartels and of deadly drugs into the United States continues to be a priority for us and our law enforcement partners.” Grossman also thanked prosecutor Larry Casper and HSI agents for their excellent work on this case.
“This defendant was part of a violent transnational criminal organization that posed a danger to our communities,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “We will prosecute to the fullest extent of the law those who export dangerous narcotics to the United States and finance those activities through money laundering. I want to thank the Government of Mexico for extraditing Gallegos-Lechuga to the United States. Through such partnerships, we will continue to work to dismantle dangerous drug cartels.”
“Today’s sentencing is the culmination of years of relentless work by Homeland Security Investigations (HSI) and its partners targeting the Sinaloa Cartel,” said HSI San Diego Special Agent in Charge Chad Plantz. “This investigation highlights HSI’s dedication to go after both Cartel drug trafficking and money laundering activity. The sentencing sends a resounding message to Transnational Criminal Organizations that HSI and our partners are unyielding in our pursuit of justice.”
Seven other defendants have previously pleaded guilty in this case and been sentenced, including Omar Ayon-Diaz, Osvaldo Contreras-Arriaga, Cesar Hernandez-Martinez, Gibran Rodriguez-Mejia, Oscar Rodriguez-Guevara, Bianca Acedo Ojeda and Joel Acedo Ojeda. In addition, approximately 20 other individuals linked to the conspiracy who served as drug and money couriers and drug stash house operators have entered guilty pleas and been sentenced in related cases.
The investigation was conducted by Homeland Security Investigations. The Justice Department’s Office of International Affairs worked with law enforcement partners in Mexico to secure the arrest of Gallegos-Lechuga in Mexico and his extradition to the United States.
The case is being prosecuted by Assistant U.S. Attorney Larry Casper of the U.S. Attorney’s Office for the Southern District of California and Senior Trial Counsel Mark Irish of the Criminal Division’s Money Laundering and Asset Recovery Section.
DEFENDANT Case Number 15cr950-BEN
Roberto Gallegos-Lechuga Age: 39 Sinaloa, Mexico
SUMMARY OF CHARGES
Money Laundering Conspiracy – Title 18, U.S.C., Section 1956(h)
Maximum penalty: Twenty years in prison and $500,000 fine
AGENCY
Homeland Security Investigations
Former Financial Controller Sentenced to Prison for Embezzling Almost Half a Million Dollars from Family-Owned San Diego BusinessRead the Press Release
Assistant U. S. Attorney Rebecca S. Kanter (619) 546-7304
NEWS RELEASE SUMMARY – January 10, 2022
SAN DIEGO – Derick Jonathan Cameron of Vancouver, Washington, was sentenced in federal court today to 20 months in prison for embezzling more than $400,000 when he was employed as the Financial Controller for San Diego-based RAL Investment Corporation.
Cameron previously pleaded guilty, admitting that he abused his access to the company’s accounting software by issuing more than 200 unauthorized checks to himself using the electronic signature of the company’s CFO and depositing them into his personal bank account. He then concealed the payments by manipulating the company’s accounting records to make it appear that each check was issued to a legitimate third-party vendor for a business expense. The company discovered Cameron’s fraudulent activity in April 2018, fired Cameron, and reported the conduct to law enforcement when Cameron was unable to make his promised repayments on schedule.
In addition to the 20 months of federal custody, U.S. District Judge Todd W. Robinson imposed three years’ supervised release, an $8,000 fine and ordered Cameron to pay restitution of $203,857 to the victim, RAL Investment Corporation, which is the difference between the amount Cameron embezzled ($403,857) and the amount he repaid his former employer in 2018 ($200,000) after his theft was detected. The Court specifically ordered Cameron to repay $10,000 by March 12, 2022, suggesting Cameron could sell a recently purchased motorcycle to pay the debt.
“The impact of fraud on small businesses can be devastating,” said U.S. Attorney Randy Grossman. “This defendant abused his position of trust to enrich himself, and he has been held to account for his crime.” Grossman thanked the prosecution team and the FBI for the excellent work on this case.
“The FBI will continue to vigorously pursue those who use their workplace access for personal and financial gain over professional responsibility,” said FBI Special Agent in Charge Suzanne Turner. “Mr. Cameron’s check-writing scheme hurt this small, family-owned business, endangered its livelihood, and impacted its employees. Today, Mr. Cameron faced judgement for those criminal actions.”
Cameron is scheduled to surrender to the Bureau of Prisons on or before March 14, 2022.
DEFENDANTS Case Number 21cr2128-TWR
Derick Jonathan Cameron Age: 38 Vancouver, Washington
SUMMARY OF CHARGES
Wire Fraud – Title 18, U.S.C., Section 1343
Maximum penalty: Twenty years in prison and $250,000 fine, or twice the gain/loss, whichever is greater
AGENCY
Federal Bureau of Investigation
Rabbi Yisroel Goldstein Sentenced to Prison for Multi-Million-Dollar Fraud SchemesRead the Press Release
Assistant U. S. Attorneys Valerie H. Chu (619) 546-6750 and Michelle L. Wasserman (619) 546-8314
NEWS RELEASE SUMMARY – January 4, 2022
SAN DIEGO – Rabbi Yisroel Goldstein, former director at Chabad of Poway, was sentenced in federal court today to fourteen months in custody for his years-long, multi-million-dollar schemes to defraud the Internal Revenue Service, several San Diego Fortune 500 companies, and multiple public and private agencies. He was also ordered to pay restitution totaling $2,834,608.
According to his plea agreement, while Rabbi Goldstein was director of the Poway synagogue, he received at least $6.2 million in phony contributions to the Chabad and affiliated charities and secretly refunded up to 90 percent of the donations to the “donors.” After Rabbi Goldstein provided these donors with fake receipts, they illegally claimed huge tax deductions for these nonexistent donations, and the rabbi kept about 10 percent – more than half a million dollars over the course of the fraud - for himself. Tax losses to the IRS were more than $1.5 million.
Rabbi Goldstein also admitted that he defrauded three different Fortune 500 companies by tricking them into matching supposed charitable donations of their employees. Working with the employees, Rabbi Goldstein fabricated receipts and then secretly returned their fake “donations.” This allowed the employees to claim tax deductions for the completely fabricated donations, and allowed Rabbi Goldstein to collect the companies’ matching funds—including some that matched double their employees’ donations. Rabbi Goldstein helped to orchestrate this scheme with at least six taxpayer-employees and two other associates who helped recruit new donors or conceal the true recipient of the funds. In total, Rabbi Goldstein defrauded the companies out of at least $144,000, and helped the taxpayer-employees to claim nearly as much in fictitious tax-deductible charitable contributions to the IRS.
Rabbi Goldstein admitted that he also helped his brother Mendel Goldstein conceal approximately $700,000 in income by allowing him to use Chabad bank accounts to deposit his income, thereby hiding it from the IRS. As his cut, Rabbi Goldstein kept 10 percent of this individual’s income—more than $70,000.
Separate and apart from the tax evasion scheme, Rabbi Goldstein and another defendant, Alexander Avergoon, used false information and fabricated invoices and other records to pretend to be eligible for emergency funds, grants or donations, and private loans. These frauds on the Federal Emergency Management Agency (FEMA), the California Governor’s Office of Emergency Services (Cal OES), and private foundations resulted in losses to these programs of at least $860,000.
According to sentencing documents, the United States Attorney’s Office recommended departures from the sentencing guidelines for Goldstein because of his cooperation against other individuals, and because of the extraordinary events he suffered as a victim of the April 27, 2019 shooting at the Chabad of Poway.
In imposing sentence, U.S. District Judge Cynthia A. Bashant commented, “You dragged down so many congregants. Many of those individuals thought that they were committing these offenses to benefit the Chabad or the synagogue in general, when in fact it was to benefit you. I just can’t ignore that. … I think time in custody is important. It’s important to send a message to the community, and it’s important to send a message to you.”
“Yisroel Goldstein exploited his position and stature as a faith leader to commit well-planned and carefully executed crimes of greed,” said U.S. Attorney Randy Grossman. “As his serious criminal conduct was under investigation, the rabbi became a victim in a devastating attack on the synagogue he led. Today’s sentence accounts for these extraordinary circumstances and our office’s mission to always seek justice.” Grossman thanked the prosecution team, the FBI and the IRS for their excellent work on this case.
“The defendant used the Chabad of Poway’s tax-exempt status as a religious organization to compile millions of dollars in fraudulent ‘donations’,” said FBI Special Agent in Charge Suzanne Turner. “This scheme enabled Rabbi Goldstein to line his own pockets; reward his fake ‘donors’ with reimbursement for their contributions; and provided receipts enabling the ‘donations’ to be written off as charitable contributions, all in furtherance of the scheme. The FBI will continue to root out fraud disguised as charitable donations which ultimately hurts those organizations relying on the generosity of donors.”
“Rabbi Goldstein veiled over $2.8 million in fraud schemes he perpetrated with at least ten other co-conspirators by exploiting the non-profit statuses of the Chabad of Poway and the Friendship Circle of San Diego, organizations entrusted to him to serve the community,” said Special Agent in Charge Ryan L. Korner of IRS Criminal Investigation's Los Angeles Field Office. “IRS Special Agents were proud to work alongside the FBI and the U.S. Attorney's Office in this multimillion-dollar tax and grant fraud investigation that uncovered decades of illegal conduct. In addition to holding Rabbi Goldstein accountable for cheating U.S. taxpayers and businesses for personal gain, my fervent hope is that today's sentencing brings closure and healing to all who were affected by his crimes.”
Rabbi Goldstein was ordered to surrender into federal custody by noon on February 23, 2022.
DEFENDANT Case Number 20CR1916-BAS
Yisroel Goldstein Age: 60 Poway
SUMMARY OF CHARGES
Conspiracy to Defraud the United States and Commit Wire Fraud, in violation of Title 18, USC 371
Maximum Penalty: Five years in prisonINVESTIGATING AGENCIES:
Federal Bureau of Investigation
Internal Revenue Service – Criminal Investigation
North County Property Owner Pleads Guilty to “Crack House” Indictment; Feds Force Sale and Forfeiture of Multi-Acre CompoundRead the Press Release
Assistant U.S. Attorneys Kevin Mokhtari (619) 546-8402 and David J. Rawls (619) 546-7966
NEWS RELEASE SUMMARY – January 4, 2021
SAN DIEGO – Sean T. Sheeter, the owner of a large residential compound located at 725 Poinsettia, Vista, California, pleaded guilty in federal court today, admitting that he maintained the property as a drug-involved premises. Sheeter was charged just before the pandemic, in March 2020, with a violation of the federal “Crack House” statute.
As part of the plea agreement, Sheeter admitted that he knowingly and intentionally rented, leased, profited from and made the property available for use to certain residents and guests. Sheeter admitted that he knew or reasonably should have known that many of the residents and guests used the property for the purpose of unlawfully storing, distributing and using federally controlled substances, including heroin and methamphetamine.
Sheeter also admitted that in many instances, his residents’ and guests’ primary reasons for renting, residing at, and/or visiting the property were so they could store, distribute and/or use controlled substances without interference. Sheeter admitted that this activity “was pervasive” on the property.
As part of his plea agreement and related documents, Sheeter’s property will be sold, and proceeds from that sale will be forfeited to the federal government. Sheeter is scheduled to be sentenced on April 1, 2022 at 9 a.m. before U.S. District Judge Janis L. Sammartino.
The federal indictment against Sheeter was the result of a multi-year investigation led by the North County Regional Gang Task Force, which is spearheaded by the FBI and the San Diego Sheriff’s Department. The investigation involved months of federal wiretaps, multiple undercover drug buys, and surveillance that led investigators to learn about the criminal activity on the property.
A search warrant unsealed with the indictment revealed that between January 1, 2017 and February 25, 2020, law enforcement activity at the property was extensive, including dozens of separate calls for service, arrests, citations, and seizures of controlled substance directly tied to the property. Today’s guilty plea is the first step in restoring normalcy to the Vista neighborhood that has been plagued by criminal activity emanating from the property.
“This property is no longer a drug-laden refuge for violent felons, gang members, drug dealers and drug users,” said U.S. Attorney Randy Grossman. “We will continue to use every tool we have to bring safety to our community.” Grossman thanked the prosecution team and all the law enforcement agencies for their hard work on this case.
“Today's guilty plea should send a message to others that are operating drug houses around the county,” said FBI Special Agent in Charge Suzanne Turner. “The FBI and our law enforcement partners will continue to bring investigative resources together, through a variety of different task forces, to root out criminal enterprises committed to furthering illegal activity.”
“The hard work conducted by the men and women of San Diego's North County Regional Gang Task Force in investigating this case and the partnerships used to abate this extensive narcotics problem is a huge step toward improving the quality of life in the surrounding community,” said Sheriff Bill Gore. “The multitude of criminal activity stemming from this residence not only impacted the area immediately surrounding it, but local schools and the neighboring cities of Vista and San Marcos. We are confident this abatement will bring about an improved quality of life for all impacted by this decision.”
This operation 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.
DEFENDANT Case Number 21cr0656-JLS
Sean Terrence Sheeter Age: 73 Vista, CA
SUMMARY OF CHARGES
Maintaining a Drug-Involved Premises – Title 21, U.S.C., Section 856(a)(2)
Criminal Forfeiture – Title 21, U.S.C., Section 853Maximum Penalty: Twenty years in prison and $500,000 fine
AGENCIES
Federal Bureau of Investigation
San Diego Sheriff’s Department
United States Marshals Service
Bureau of Alcohol, Tobacco, Firearms and Explosives
Homeland Security Investigations
Drug Enforcement Administration
Carlsbad Police Department
Oceanside Police Department
Escondido Police Department
California Department of Corrections and Rehabilitation
California Highway Patrol
Department of Justice, Organized Crime and Drug Enforcement Task Force (OCDETF)
Department of Justice, Office of Enforcement Operations
San Diego Real Estate Agent Sentenced for Multi-Million-Dollar Ponzi SchemesRead the Press Release
Assistant U. S. Attorneys Oleksandra Johnson (619) 546-9769 and Valerie H. Chu (619) 546-6750
NEWS RELEASE SUMMARY – January 3, 2022
SAN DIEGO – Alexander Avergoon, a longtime San Diego real estate agent and businessman, was sentenced in federal court today to 64 months in prison for defrauding investors in several Ponzi real estate investment schemes. As part of his guilty plea, Avergoon also admitted to participating in multiple tax evasion and fraud schemes with Rabbi Yisroel Goldstein, former director at Chabad of Poway.
Avergoon was ordered to pay $9,679,306.70 in restitution to several victims. The Court also ordered Avergoon to forfeit to the United States the amount of $5,205,234.41 as proceeds of illegal conduct and property involved in the offense.
“This defendant is a prolific fraudster who has stolen millions of dollars from the many victims of his devious schemes,” said U.S. Attorney Randy Grossman. “It’s now his turn to pay the price for his crimes.” Grossman thanked the prosecution team, the FBI and the IRS for their dedication to achieving justice in this matter.
“The defendant participated in complex financial schemes which defrauded private citizens out of millions of dollars,” said FBI Special Agent in Charge Suzanne Turner. “The FBI will continue to work with our law enforcement partners to root out all forms of financial fraud which not only hurt the victims, but also negatively impact those who rely on individual donors and investors to conduct legitimate business.”
“Mr. Avergoon victimized dozens of investors twofold, by not only swindling them out of millions of dollars, but also recruiting victim-investors to commit tax fraud,” said Special Agent in Charge Ryan L. Korner of IRS Criminal Investigation’s Los Angeles Field Office. “Today’s sentencing sends a clear message that IRS Criminal Investigation will pursue and hold accountable financial fraudsters who deceive and cheat people seeking to invest in our real estate and lending markets. Our Special Agents were proud to work with the FBI and the U.S. Attorney’s Office to bring Mr. Avergoon’s schemes to an end.”
Avergoon pleaded guilty in July 2020, admitting that from 2010 to 2015, he and Goldstein recruited at least nine taxpayers who made more than $275,000 in fraudulent “donations” to the Chabad. Avergoon acted as a conduit to secretly return 90 percent of the money to the purported “donors.” Avergoon also admitted that he joined Rabbi Goldstein in a grant fraud scam in which they obtained hundreds of thousands of dollars in misappropriated grant funds, and a government benefits fraud scheme.
As part of the government benefits fraud scheme, Avergoon used shell companies, including “Imagination Construction Company,” to create fictitious and backdated invoices for services like carpet installation, repairs to the Chabad of Poway’s HVAC system, and replacing damaged books and other supplies—even though Avergoon had never performed these services. In some cases, Avergoon would give Goldstein several fake bids from different shell companies, so that Rabbi Goldstein could trick the grant program administrators into believing he had complied with their competitive bidding requirements. Avergoon and Goldstein pretended that the government grant funds would be used for facilities upgrades, security systems, and community programs. But in reality, the money often went straight to Goldstein’s and Avergoon’s pockets; other times they used portions of it to pay contractors who had in fact charged much lower prices than reflected on Avergoon’s phony paperwork.
Apart from his fraudulent partnership with Rabbi Goldstein, Avergoon also admitted to participating in separate real estate Ponzi schemes from 2010 to 2016, in which he cheated retirement investors out of a total of $12 million. Avergoon was a San Diego-based real estate agent, and he used his industry knowledge and reputation to target trusting victims who would invest in what they thought was the purchase of rental property.
Avergoon promised monthly dividends that would be paid from rental income. He created written investment materials like prospectus and projected income and expenses calculations, designed to give investors the false impression that their money would be safely tucked away in passive-income retirement investments. But in truth, instead of using investors’ money to buy rental properties as he promised, Avergoon spent the money himself and just pretended that he had purchased the apartment buildings and office space he advertised. In true Ponzi fashion, for a time, Avergoon made the promised dividend payments—but rather than using rent income, he funded those payments using new investor money.
Avergoon deceived more than a dozen unwitting investors, convincing them to part with at least $5 million. When an investor would ask to cash out, he encouraged them to re-invest, and at one point he pretended to “roll over” their retirement investments to purchase a multi-million-dollar commercial building. In reality, he bought that building with a loan, not with investor money, and again diverted their money to his own personal use. He created fake partnership agreements, false purchase documents and deeds, and other fictitious records, and forged the signatures of his investors to conceal the fraud—then laundered the proceeds in order to disguise the true source and ownership of the money.
Avergoon did not stop there. He convinced investors to part with another $5 million or more by pretending to use their money to fund short-term, low-risk loans supposedly secured by the borrowers’ high-end San Diego homes. But in reality, there were no “borrowers”—Avergoon used his real estate connections to identify homes he could pose as collateral, and he simply doctored up fake loan agreements and forged the borrowers’ signatures. In some cases, the individuals he claimed were the borrowers did not even own the homes that were purportedly used as collateral. Avergoon made fake loan agreements, Deeds of Trust, mortgage Notes, and other official-looking documents, and he even created fake notary stamps and San Diego County Recorder’s Office markings to make the paperwork appear legitimate. Once again, Avergoon used new investor money to make occasional payments to his victims, to make it appear that the “loans” were performing. But in truth, he diverted the money to his own use and the “investments” were worthless.
Avergoon was indicted in August 2019 and apprehended in Latvia. He was extradited to the United States in November 2019 and has remained in custody since his extradition and initial appearance in federal court in San Diego.
DEFENDANT Case Number 19cr2955-BAS
Alexander Avergoon Age: 46 San Diego
CHARGES
Wire Fraud, in violation of Title 18, USC 1343
Maximum Penalty: Twenty years in prisonAggravated Identity Theft, in violation of Title 18, USC 1028A
Maximum Penalty: Two years minimum consecutive term in prisonMoney Laundering, in violation of Title 18, USC 1956(a)(1)(B)(i)
Maximum Penalty: Twenty years in prisonINVESTIGATING AGENCIES
Federal Bureau of Investigation
Internal Revenue Service – Criminal Investigations
San Diego Resident Indicted for Distributing Fentanyl that Resulted in 15-Year-Old’s DeathRead the Press Release
Assistant U. S. Attorneys Vivian Sapthavee (619) 546-7696 and Adam Gordon (619) 546-6720
NEWS RELEASE SUMMARY—December 28, 2021
SAN DIEGO - Kaylar Junior Tawan Beltranlap of San Diego appeared in federal court today in connection with a grand jury indictment charging him with selling the fentanyl that resulted in the death of a 15-year-old Coronado High School sophomore on May 12, 2021.
Agents and Task Force officers with the Drug Enforcement Administration are leading the investigation into the death. The next court date is set for February 4, 2022 for a Motion Hearing/Trial Setting.
“Every loss of life to opioids is tragic, but the death of a 15-year-old is heart-shattering,” said Acting U.S. Attorney Randy Grossman. “Our community must recognize the threat to middle and high school students from the plague of fentanyl. This case must be a call to action to educate our children about the extreme danger of experimenting with drugs.” Grossman thanked the prosecution team and investigating agencies for their dedication to this case and to the cause of preventing opioid-related deaths and seeking justice for victims.
“The Coronado Police Department is thankful for the collective work to hold the suspect accountable. We are also reminded that we have a family that lost a child because of a dangerous drug,” - Coronado Police Chief Chuck Kaye.
“Parents: More than ever before, it’s so important to educate your teenager about the dangers of drugs because just One Pill Can Kill,” said DEA Acting Special Agent in Charge Shelly S. Howe. “If you don’t have the conversation with your teen, their friends or a drug dealer will give them inaccurate information and it could cost your child’s life. The DEA has resources available to parents at www.getsmartaboutdrugs.gov.”
This case is the result of ongoing efforts by the U.S. Attorney’s Office, Drug Enforcement Administration, Homeland Security Investigations, the Federal Bureau of Investigation, the San Diego Police Department, the California Department of Health Care Services and the San Diego County District Attorney’s Office to investigate and prosecute the distribution of dangerous illegal drugs—fentanyl in particular—that result in overdose deaths. The DEA created Narcotics Task Force (NTF) Team 10 as a response to the increase in overdose deaths in San Diego County. Investigators from Team 10, as well as the Coronado Police Department and NTF Team 3, contributed to the investigation into C.J.S.’s death.
DEFENDANT Case Number 21-CR-3442 CAB
Kaylar Junior Tawan Beltranlap Age: 21 San Diego, CA
SUMMARY OF CHARGES
Distribute of Fentanyl Resulting in Death – Title 21, United States Code, Sections 841(a) and (b)(1)(C)
Maximum penalty: Life in prison; Twenty-year mandatory minimum
AGENCY
Drug Enforcement Administration
Homeland Security Investigations
Federal Bureau of Investigation
Coronado Police Department
San Diego Police Department
California Department of Health Care Services
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
John T. Earnest Sentenced to Life Plus 30 years in Prison for Federal Hate Crimes Related to 2019 Poway Synagogue Shooting and Attempted Mosque ArsonRead the Press Release
Assistant U. S. Attorneys Peter Ko (619) 546-7359 and Shane Harrigan (619) 546-6981
NEWS RELEASE SUMMARY – December 28, 2021
SAN DIEGO – John T. Earnest, a Rancho Penasquitos man who entered the Chabad of Poway on April 27, 2019, opened fire and killed one woman, injured three others, and attempted to kill 50 others, was sentenced in federal court today to life plus 30 years in prison for his crimes.
Earnest previously pleaded guilty to a 113-count indictment that included 54 counts of violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act, 55 counts of violating the Church Arson Prevention Act, and four firearms offenses.
Earnest also admitted that on March 24, 2019, he attempted to burn down the Dar-ul-Arqam mosque in Escondido, California, because of his hatred of Muslims and the religious character of the building. Seven missionaries were asleep in the mosque, but no one was injured.
“All people in this country should be able to freely exercise their religion without fear of being attacked,” said Attorney General Merrick B. Garland. “This defendant’s horrific crime was an assault on fundamental principles of our nation. The Justice Department is steadfast in its commitment to confronting unlawful acts of hate and to holding perpetrators of hate-fueled violence accountable.”
“Today we stand with the family of Lori Gilbert Kaye, the injured, and all who suffered as a result of the defendant’s heinous crimes,” said U.S. Attorney Randy Grossman. “The United States Attorney’s Office and our law enforcement partners reject all forms of hatred and prejudice, and we will relentlessly pursue justice for the victims of bias-motivated violence.” Grossman thanked the prosecution team, the Department of Justice’s Civil Rights Division, the FBI, the ATF, the San Diego Sheriff’s Department, and the San Diego Police Department for their excellent work on this case.
“Hate has no place in our society and bias-motivated violence will not be tolerated,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “By committing these heinous and senseless acts of violence against Jewish and Muslim community members, this defendant violated our most basic American ideal: all persons are created equal. The Department of Justice is committed to aggressively prosecuting bias-motivated violence and will continue partnering with state and local law enforcement to ensure that those who seek to engage in violence based on bias are held accountable for their crimes.”
“While today's sentence brings an end to this case, it also reaffirms the FBI's commitment to pursue those who operate in the world of prejudice and religious hate,” said FBI Special Agent in Charge Suzanne Turner. “Hate crimes tear at the social fabric of our community. The FBI stands with our state and federal partners to ensure houses of worship are free from bias-motivated violence, and we will use all investigative tools to seek justice for the victims.”
“ATF will continue to use all investigative tools and resources at our disposal to combat hate-fueled gun violence,” said ATF Special Agent in Charge Monique Villegas. “Hatred of any kind has no place in our society and we will work tirelessly with our federal and local law enforcement partners to ensure any individual or groups that perpetuate criminal acts are held accountable for their actions.
According to court documents, after several weeks of planning, on the morning of April 27, 2019, Earnest drove to the Chabad of Poway synagogue, where members of the congregation were gathered for religious worship. Earnest entered the building armed with a Smith and Wesson M&P 15 assault rifle that was fully loaded with a 10-round magazine. He wore a chest rig which contained five additional magazines, each loaded with ten rounds of ammunition. Earnest opened fire, killing Lori Gilbert-Kaye and injuring three other members of the congregation, including a then eight-year-old child. After Earnest emptied his initial magazine, several congregants rushed at Earnest. Earnest fled in his car and, shortly after, called 911 and confessed that he had “just shot up a synagogue.” Earnest was apprehended by local law enforcement who found the rifle and additional ammunition in his car.
Investigators found a manifesto written by Earnest and posted on the Internet shortly before the attack. In the manifesto, Earnest made many anti-Semitic and anti-Muslim statements, including “I can only kill so many Jews” and “I only wish I killed more.”
The case is being prosecuted by Assistant U.S. Attorneys Shane Harrigan and Peter Ko, along with Deputy Chief Rose Gibson of the Civil Rights Division. The FBI, ATF, and San Diego Sheriff’s Department conducted the investigation.
California Man Sentenced to Life Followed by 30 Years in Prison for Federal Hate Crimes Related to 2019 Poway Synagogue Shooting and Attempted Mosque ArsonRead the Press Release
John T. Earnest, a California man who entered the Chabad of Poway on April 27, 2019, opened fire and killed one woman, injured three others, and attempted to kill 50 others, was sentenced today in the Southern District of California to life followed by 30 years in prison for his crimes.
Earnest previously pleaded guilty to a 113-count indictment that included 54 counts of violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act, 55 counts of violating the Church Arson Prevention Act, and four firearms offenses.
“All people in this country should be able to freely exercise their religion without fear of being attacked,” said Attorney General Merrick B. Garland. “This defendant’s horrific crime was an assault on fundamental principles of our nation. The Justice Department is steadfast in its commitment to confronting unlawful acts of hate and to holding perpetrators of hate-fueled violence accountable.”
“Hate has no place in our society and bias-motivated violence will not be tolerated,” said Assistant Attorney General Kristen Clarke. “By committing these heinous and senseless acts of violence against Jewish and Muslim community members, this defendant violated our most basic American ideal: all persons are created equal. The Department of Justice is committed to aggressively prosecuting bias-motivated violence and will continue partnering with state and local law enforcement to ensure that those who seek to engage in violence based on bias are held accountable for their crimes.”
“Today we stand with the family of Lori Gilbert Kaye, the injured, and all who suffered as a result of the defendant’s heinous crimes,” said U.S. Attorney Randy Grossman of the Southern District of California. “The United States Attorney’s Office and our law enforcement partners reject all forms of hatred and prejudice, and we will relentlessly pursue justice for the victims of bias-motivated violence.”
According to court documents, after several weeks of planning, on the morning of April 27, 2019, Earnest drove to the Chabad of Poway synagogue, where members of the congregation were gathered for religious worship. Earnest entered the building armed with a Smith and Wesson M&P 15 assault rifle that was fully loaded with a 10-round magazine. He wore a chest rig which contained five additional magazines, each loaded with ten rounds of ammunition. Earnest opened fire, killing one person and injuring three other members of the congregation, including a then eight-year-old child. After Earnest emptied his initial magazine, several congregants rushed at Earnest. Earnest fled in his car and, shortly after, called 911 and confessed that he had “just shot up a synagogue.” Earnest was apprehended by local law enforcement who found the rifle and additional ammunition in his car.
Investigators found a manifesto written by Earnest and posted on the Internet shortly before the attack. In the manifesto, Earnest made many anti-Semitic and anti-Muslim statements, including expressing a desire to kill people because of their Jewish faith, and regret that he could not kill more.
Earnest also admitted that on March 24, 2019, he attempted to set fire to the Dar-ul-Arqam mosque in Escondido, California, because of his hatred of Muslims and the religious character of the building. Seven missionaries were asleep in the mosque, but no one was injured.
The court ordered that the federal sentence will run consecutive to the state sentence. The court further recommended that Earnest serve his term of incarceration in a federal facility.
The case is being prosecuted by Assistant U.S. Attorneys Shane Harrigan and Peter Ko, along with Deputy Chief Rose Gibson of the Civil Rights Division. The FBI, ATF and San Diego Sheriff’s Office conducted the investigation.
Japanese Language Version - United States Files Civil Action to Return $150 Million in Embezzled Funds to Sony; FBI Tracks Money to BitcoinRead the Press Release
下記の日本語文書は参考のための仮翻訳で、正文は英文 です。
司法省
カリフォルニア州南部地区連邦検事局
2021年12月20日（月）
即時のプレスリリース
米政府が横領金1億5000万ドルをソニーに返金するため民事訴訟を起こし、FBIが資金をビットコインに追跡
担当連絡先
オレクサンドラ・ジョンソン検事補 (619) 546-9769
アーロン・P・アルンゼン検事補 (619) 546-8384
プレスリリース要旨 ― 2021年12月20日
サンディエゴ ― 米政府は本日、東京に本社があるソニーグループ株式会社の子会社から詐取され、その後、米連邦捜査局(FBI)による窃盗事件捜査中に法執行機関によって差し押さえられ1億5400万ドルを超える資金を保全し、最終的に返還するため連邦裁判所に提訴した。
米国は、当該資産に対するソニーの利害保全を目的として、カリフォルニア州南部地区連邦裁判所に民事没収を申し立てた。この資産は、2021年5月に従業員が詐取した上で、現在の相場で1億8000万ドル以上に相当する3879ビットコイン超に換金したとされる。FBIの捜査に基づき、2021年12月1日に法執行機関によって差し押さえられた。
政府の申し立てによると、東京のソニー生命保険株式会社（ソニー生命）社員の石井伶は、会社が会社名義の金融口座間で資金移動をしようとした際に、1億5400万ドルを流用したとされる。申し立てはまた、石井が取引指示を改ざんすることで、当該資金をカリフォルニア州ラホヤ所在の銀行にある自身が管理する口座へ送金し、その後間を置かず暗号通貨であるビットコインに換金した、と述べている。
FBIの捜査で明らかとなった証拠に基づき、2021年6月、カリフォルニア州南部地区連邦裁判所の下級判事によって差し押さえ令状が許可された。裏付けとなる宣誓供述書で陳述されたように、法執行機関は転送されたビットコインを追跡し、ソニー生命の子会社から詐取された資金額に相当する3879.16ビットコインが特定のビットコインアドレスに送金され、後にオフラインの暗号通貨コールドウォレットに移動されていたことを特定した。
FBIは、ソニー及びシティバンクから多大な支援を受けつつ、警察庁、警視庁、東京地方検察庁、最高検察庁・先端犯罪検察ユニット (JPEC) と連携し、引き続き捜査を行った。このような連携した取り組みにより、捜査員らは、ビットコインアドレスのアクセスに必要なパスワードにほぼ相当する“秘密鍵”を入手した。この窃盗に起因する全てのビットコインは回収され、完全に保全された。石井は、日本で刑事告訴されている。
ランディ・S・グロスマン連邦検事代理は、以下のように述べた。「我々の目的は盗まれた資金を、この大胆な窃盗事件の被害者に返還することであり、本日とられた措置は、その目的達成に資するものである。本事件は、FBI捜査員と日本の法執行機関が、仮想通貨の追跡に連携して取り組んだ好例である。犯罪者が留意すべきことである。不正に手にした収益を法執行機関から隠匿するために暗号通貨を当てにすることはできない。米国は犯罪を未然に防ぎ、盗まれた資金を取り戻すため、国際的なパートナー機関と幅広く連携していく」。グロスマンは、検察チーム、FBI、日本の当局に対して、本事件への素晴らしい仕事に感謝した。
スーザン・ターナーＦＢＩ支局長は、「FBIは2つの極めて大きな理由により、詐取された資金の回収ができた。第一に、ソニーとシティバンクは窃盗を認知した直後に法執行機関に通知・協力し、FBIも両社と連携し資金の追跡を行った。第二に、今回の場合は日本にあたるが、FBIが海外に設置した法務官事務所および海外で構築した既存の関係性を通じて国際的に築いた資源により、法執行機関が連携し、容疑者を特定できた。FBIの持つ専門技術により、詐取された資金を被告の暗号通貨ウォレット内で発見し、差し押さえすることが可能になった」と述べた。
カリフォルニア州南部地区連邦検事局の大規模詐欺・公務汚職課と資産回復室は、司法省刑事部の資金洗浄・資産回復課およびコンピューター犯罪・知的財産課から多大な支援を受け、訴訟手続きを実施している。司法省国際室も捜査支援を提供した。FBIも本事件を引き続き捜査している。
Attorney General Merrick Garland Appoints Randy Grossman as U.S. Attorney for the Southern District of CaliforniaRead the Press Release
Director of Media Relations Kelly Thornton 619-546-9726
SAN DIEGO -- On December 26, 2021, Randy S. Grossman began serving as the United States Attorney for the Southern District of California for an interim period of 120 days or until a Presidential appointee is confirmed, whichever occurs first.
Attorney General Merrick Garland issued an order on December 13, 2021, authorizing Grossman’s appointment as U.S. Attorney, effective December 26, 2021. U.S. District Court Chief Judge Dana Sabraw administered the oath of office to Grossman on December 17, 2021, in the presence of the leadership team and Grossman’s family.
Grossman, who previously served as second-in-command, was named Acting U.S. Attorney under the Vacancies Reform Act after the resignation on February 28, 2021, of then-U.S. Attorney Robert S. Brewer Jr. Grossman now becomes U.S. Attorney by Attorney General appointment, in the absence of a presidentially-nominated and U.S. Senate-confirmed U.S. Attorney, for a term of 120 days or until a U.S. Attorney is confirmed. If a U.S. Attorney is not nominated and confirmed within that period, a U.S. Attorney would be appointed by the United States District Court for the Southern District of California.
“It is an honor to continue to serve the Southern District of California,” Grossman said. “I look forward to continuing to work with the outstanding team at the U.S. Attorney’s Office and the dedicated law enforcement partners who keep our communities safe.”
The Southern District of California encompasses San Diego and Imperial Counties. The U.S. Attorney serves as the chief federal law enforcement official for the district.
Mr. Grossman began his legal career as a Deputy District Attorney for Ventura County and then San Diego County. During his more than eight years as a state prosecutor, Mr. Grossman tried more than 70 cases, including homicides and other crimes of violence. Mr. Grossman also worked in private practice as a partner at two international law firms. His practice areas included complex civil litigation, white collar criminal defense, corporate internal investigations and pro bono representation of refugees seeking asylum.
In March 2020, Mr. Grossman returned to public service as an Assistant United States Attorney for the Southern District of California, where he served in the Border Enforcement Section and the Major Frauds &Public Corruption Section. He was selected to become First Assistant U.S. Attorney in September 2020, and he served as Acting U.S. Attorney from March 1, 2021 until December 26, 2021.
Department of Justice Awards More Than $125 Million in Grants Under the Stop School Violence Act; Local Districts Receive More Than $1 millionRead the Press Release
Media Relations Director Kelly Thornton (619) 546-9726 or [email protected]
NEWS RELEASE SUMMARY – December 23, 2021
SAN DIEGO – The Department of Justice today announced nearly $126 million in funding, including $672,168 to the Cajon Valley Union School District and $347,031 to the Chula Vista Elementary School District, to advance school safety under the STOP School Violence Act.
The grants, awarded by the Office of Justice Programs’ Bureau of Justice Assistance (BJA) and the department’s Office of Community Oriented Policing Services (COPS Office), will help institute safety measures in and around primary and secondary schools, support school violence prevention efforts, provide training to school personnel and students, and implement evidence-based threat assessments. “The Justice Department has no greater responsibility than protecting Americans from harm,” said Attorney General Merrick B. Garland. “Schools must be safe places to learn, and today’s investment of more than $125 million under the STOP School Violence Act will help ensure that they are.”
“This money will improve security at our schools so that our children are safe,” said Acting U.S. Attorney Randy Grossman. “There is no higher priority.”
The Students, Teachers and Officers Preventing School Violence Act of 2018 (the “STOP School Violence Act”) gives the Justice Department the authority to provide awards directly to states, units of local government, Indian tribes, and public agencies (such as school districts and law enforcement agencies) to improve security at schools and on school grounds through evidence-based school safety programs. It also provides grants to ensure a positive school climate by helping students and teachers recognize, respond quickly to, and help prevent acts of violence. Chula Vista received this grant.
The 78 BJA annual awards, totaling almost $74 million, are intended to support training and education for school personnel and students on preventing violence against others and themselves, including anti-bullying training and specialized training for school officials to respond to mental health crises. Funds also help develop and implement multidisciplinary threat assessment or intervention teams and design technology solutions such as anonymous reporting systems, hotlines and websites.
The COPS School Violence Prevention Program (SVPP) provides up to 75 percent of the funding for school safety measures in and around primary and secondary schools. The 153 SVPP awards, totaling almost $52 million, are statutorily obligated to be used for coordination with law enforcement; training for local law enforcement officers to prevent student violence; locks, lighting and other deterrent measures; technology for expedited notification of local law enforcement during an emergency; and other measures that provide a significant improvement in security. Cajon Valley received this grant.
The full list of SVPP awards can be found here: https://cops.usdoj.gov/svpp-award.
A list of BJA awards, as they are made, can be found on the OJP Grant Awards page.
The COPS Office is the federal component of the Department of Justice responsible for advancing community policing nationwide. The only Department of Justice agency with policing in its name, the COPS Office was established in 1994 and has been the cornerstone of the nation’s crime fighting strategy with grants, a variety of knowledge resource products, and training and technical assistance. Through the years, the COPS Office has become the go-to agency for law enforcement agencies across the country and continues to listen to the field and provide the resources that are needed to reduce crime and build trust between law enforcement and the communities served. The COPS Office has invested more than $14 billion to advance community policing, including grants awarded to more than 13,000 state, local and tribal law enforcement agencies to fund the hiring and redeployment of more than 135,000 officers.
The Office of Justice Programs provides federal leadership, grants, training, technical assistance and other resources to improve the nation’s capacity to prevent and reduce crime, advance racial equity in the administration of justice, assist victims and enhance the rule of law. More information about OJP and its components can be found at www.ojp.gov.
Woman Pleads Guilty to Interfering with a Southwest Airlines Flight AttendantRead the Press Release
Assistant U. S. Attorneys Jaclyn Stahl (619) 546-8456 and Megan Rossi (619) 546-9661
NEWS RELEASE SUMMARY – December 22, 2021
SAN DIEGO – Vyvianna M. Quinonez, a Sacramento resident, pleaded guilty in federal court today to interfering with a Southwest Airlines flight attendant.
According to admissions in her plea agreement, on May 23, 2021, Quinonez boarded Southwest Airlines Flight 700 from Sacramento International Airport to San Diego International Airport. During the flight’s final descent, Quinonez was not wearing her facemask properly, unbuckled her seat belt, and pulled down her tray table—all in violation of federal rules and regulations.
A flight attendant approached Quinonez and requested that she fasten her seat belt, stow her tray table, and wear her facemask properly. The plea agreement states that Quinonez began filming the flight attendant on her cellphone, and that she pushed the flight attendant. Around this time, another passenger began filming the interaction on her cellphone.
Quinonez admitted that she stood up and assaulted the flight attendant by punching her in the face and head with a closed fist and grabbing her hair. Several other passengers attempted to stop Quinonez by grabbing at her clothing and arms. A male passenger sitting nearby jumped in between Quinonez and the flight attendant and instructed Quinonez to sit down.
The plea agreement states that, as a result of being assaulted by Quinonez, the flight attendant was taken to the hospital and sustained several injuries. Three of the flight attendant’s teeth were chipped, resulting in two teeth later being replaced by crowns. The flight attendant’s left eye was bruised and swollen; she sustained a cut under her left eye, requiring three stitches; and she had a bruise in the shape of fingers on her right forearm.
Due to the assault, the flight attendant was not able to perform her normal duties, and the Captain delayed taxiing the airplane to the gate to wait for law enforcement officers to respond.
“The flight attendant who was assaulted was simply doing her job to ensure the safety of all passengers aboard the plane,” said Acting United States Attorney Randy Grossman. “It’s inexcusable for anyone to use violence on an airplane for any reason, particularly toward a flight attendant who is there to keep all the passengers safe. We are not going to tolerate violence or interference with the flight crew, and we will pursue criminal charges against those who break the law.”
Grossman thanked the prosecution team, the FBI, and the San Diego Harbor Police for their excellent work on this case and expressed appreciation to Southwest Airlines, the Transportation Security Administration, and the Federal Aviation Administration for their assistance in this matter.
“The FBI is committed to keeping air travel safe from threats which come in a variety of forms,” said FBI Special Agent in Charge Suzanne Turner. “Assaulting and interfering with flight crews will not be tolerated and the FBI will continue to work with our local, state and federal partners to diligently investigate and prosecute crimes such as these.”
The law enforcement and administrative agencies at the San Diego International Airport have a long-standing history of cooperation in the shared effort to keep travelers safe. To build on these relationships, Acting U.S. Attorney Grossman is working closely with the San Diego District Attorney’s Office, FBI, San Diego Harbor Police, U.S. Customs and Border Protection, TSA, Carlsbad Police Department, FAA, and the San Diego Regional Airport Authority to ensure the timely reporting and investigation of crimes occurring aboard aircraft and at the airport. Assistant U.S. Attorney Jaclyn Stahl and agents with the FBI are developing training for the airport agency partners and the airlines to ensure the early identification of potential federal crimes, address the unique issues associated with investigating these crimes, and streamline the process for prosecuting these crimes—either at the state or federal level.
Quinonez is scheduled to be sentenced before U.S. District Judge Todd W. Robinson on March 11, 2022, at 9 a.m.
DEFENDANT Case Number 21-CR-2816-TWR
Vyvianna M. Quinonez Age: 28 Sacramento, CA
SUMMARY OF CHARGES
Interference with Flight Crew Members and Attendants – Title 49, U.S.C., 46504
Maximum penalty: Twenty years in prison and $250,000 fine
INVESTIGATING AGENCIES
Federal Bureau of Investigation
San Diego Harbor Police
Transportation Security Administration
Federal Aviation Administration
Former U.S. Navy Sailor Sentenced to 2.5 Years for Selling Export-Controlled Military Equipment to ChinaRead the Press Release
Assistant U. S. Attorney Alexandra F. Foster (619) 546-6735
NEWS RELEASE SUMMARY – December 21, 2021
SAN DIEGO – Ye Sang “Ivy” Wang, a former U.S. Navy sailor who was a Logistics Specialist First Class assigned to the Naval Special Warfare Command, was sentenced to 30 months in custody and ordered to pay a $20,000 fine for conspiring with her husband and co-defendant, Shaohua “Eric” Wang, to illegally export sensitive military equipment to China for profit.
Eric Wang pleaded guilty on September 26, 2019, admitting that he illegally sold export-controlled U.S. military equipment to China through his on-line business and that he enlisted his wife to use her Navy position to purchase the equipment for resale. Eric Wang also admitted that he maintained a warehouse in China to house the military equipment, travelled back and forth frequently, and had connections to buyers in China. On February 3, 2020, U.S. District Court Judge Cynthia Bashant sentenced Eric Wang to 46 months for his role in this scheme.
According to Ivy Wang’s plea agreement and the government’s sentencing memorandum, she purchased military equipment for Naval Special Warfare units as part of her duties as a logistics specialist from 2015 to 2019. In March 2018, she used her military email and mailing address to order a device for identifying United States military personnel in the field. This item was subject to U.S. Department of Commerce export controls, and not advertised for sale to civilians. She was deployed in Iraq at the time the device arrived on base in San Diego. She advised her command that the package containing this device was something she had obtained for her husband for a camping trip. In reality, she bought the device on behalf of her husband for him to resell it to China for profit.
Months later, in October 2018, upon returning from deployment to Iraq, Ivy Wang told the interviewing agents that she knew her husband was shipping military equipment to China illegally. Despite being interviewed by law enforcement agents, Ivy Wang took the device from her Navy command, brought it home and gave it to her husband. The device had been secretly disabled by law enforcement. Upon receipt, Eric Wang messaged a customer that he was in receipt of the item, but advised he could not ship the item to China, because “they are still investigating me... My friend is a SEAL who also got involved. They are investigating him as well.”
Ivy Wang told NCIS and HSI agents during her October 2018 interview that her husband sent her an Excel spreadsheet of military equipment items for her to purchase and that she knew those items were going to buyers in China. Eric Wang told her that he could not buy export-controlled military equipment using his personal email address, so he asked her to do it for him, using her position in the U.S. Navy and her military email address. She grew so annoyed at his repeated requests that, after purchasing equipment for him through March 2018, she gave him her password to her military email address and told him to buy the export-controlled military equipment posing as her after she deployed.
“This defendant used her position of trust to put the Navy and the nation at risk, and the sentence imposed today holds her accountable for her actions,” said Acting U.S. Attorney Randy Grossman, who praised the prosecution team, NCIS, HSI and Department of Commerce for their excellent work on this case.
“Ms. Wang betrayed her oath to the U.S. Navy and ultimately threatened the operational readiness and safety of our nation's military by attempting to acquire and illegally export sensitive military equipment to China,” said Special Agent in Charge Joshua Flowers of the NCIS Southwest Field Office. “NCIS and our partners remain committed to protecting our nation’s critical technologies and infrastructure.”
“This individual abused her position of trust to obtain military-grade equipment, which foreign adversaries could have used against American service members and allies,” said Chad Plantz, Special Agent in Charge of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) San Diego. “Fortunately, HSI and our partners were able to prevent this equipment from falling into the wrong hands, but this case serves as a stark reminder of why it’s important for organizations – particularly those involved in national defense – to educate their workforces on how to properly identify and report insider threats.”
DEFENDANTS Case Number 19CR1895-BAS
Shaohua “Eric” WANG Age: 38 San Diego, CA
Ye Sang “Ivy” WANG Age: 37 San Diego, CA
SUMMARY OF CHARGE
Conspiracy to Export Defense Articles Without a License (Title 18, U.S.C., Sec. 371)
Maximum Penalty: Five years in prison, $250,000 fine.
INVESTIGATING AGENCY
Naval Criminal Investigative Service (NCIS);
Homeland Security Investigations (HSI); and
Office of Export Enforcement, Los Angeles Field Office, Department of Commerce
United States Files Civil Action to Return $150 Million in Embezzled Funds to Sony; FBI Tracks Money to BitcoinRead the Press Release
Assistant U. S. Attorneys Oleksandra Johnson (619) 546-9769) and Aaron P. Arnzen (619) 546-8384
NEWS RELEASE SUMMARY – December 20, 2021
SAN DIEGO – The United States took action in federal court today to protect and ultimately return more than $154 million in funds that were allegedly stolen from a subsidiary of Tokyo-based Sony Group Corporation and then seized by law enforcement during the FBI’s investigation of the theft.
The United States filed a civil forfeiture complaint in the Southern District of California to protect Sony’s interest in the property, which an employee allegedly embezzled in May 2021 and converted to more than 3,879 Bitcoins valued today at more than $180 million. Those funds were seized by law enforcement on December 1, 2021, based on the FBI’s investigation.
According to the government’s complaint, Rei Ishii, an employee of Sony Life Insurance Company Ltd. (“Sony Life”) in Tokyo, allegedly diverted the $154 million when the company attempted to transfer funds between its financial accounts. Ishii allegedly did this by falsifying transaction instructions, which caused the funds to be transferred to an account that Ishii controlled at a bank in La Jolla, California. Ishii then quickly converted the funds to Bitcoin cryptocurrency, the complaint said.
Based on evidence uncovered during the FBI’s investigation, a seizure warrant was authorized in June 2021 by a U.S. Magistrate Judge in the Southern District of California. As alleged in the supporting affidavit, law enforcement was able to trace Bitcoin transfers and identify that approximately 3,879.16 Bitcoins, representing the proceeds of the funds stolen from a subsidiary of Sony Life, had been transferred to a specific Bitcoin address and then to an offline cryptocurrency cold wallet.
The FBI, with significant assistance from Sony and Citibank, continued to investigate in cooperation with Japan’s National Police Agency, the Tokyo Metropolitan Police Department, Tokyo District Public Prosecutors Office, and JPEC (Japan Prosecutors unit on Emerging Crimes). As a result of this coordinated effort, investigators obtained the “private key” – the rough equivalent of a password – needed to access the Bitcoin address. All the Bitcoins traceable to the theft have been recovered and fully preserved. Ishii has been criminally charged in Japan.
“It is our intent to return the stolen money to the victim of this audacious theft, and today’s action helps us do that,” said Acting U.S. Attorney Randy Grossman. “This case is an example of amazing work by FBI agents and Japanese law enforcement, who teamed up to track this virtual cash. Criminals should take note: You cannot rely on cyptocurrency to hide your ill-gotten gains from law enforcement. The United States coordinates extensively with its international partners to forestall crime and retrieve stolen funds.” Grossman thanked the prosecution team, the FBI and Japanese authorities for their excellent work on this case.
“The FBI was able to recover these stolen funds for two very important reasons,” said FBI Special Agent in Charge Suzanne Turner. “First, Sony and Citibank immediately contacted and cooperated with law enforcement as soon as the theft was detected, and the FBI worked in partnership with both to locate the funds. Second, the FBI’s footprint internationally through our Legal Attaché offices and the pre-existing relationships we have established in foreign countries – in this instance with Japan – enabled law enforcement to coordinate and identify the subject. The FBI’s technical expertise was able to trace the money to the subject’s crypto wallet and seize those funds.”
The Major Frauds and Public Corruption Section and Asset Recovery Section of the U.S. Attorney’s Office for the Southern District of California is handling the proceedings, with significant assistance from the Department of Justice Criminal Division’s Money Laundering and Asset Recovery Section and Computer Crime and Intellectual Property Section. The Justice Department’s Office of International Affairs provided investigative assistance. The FBI continues to investigate the alleged crime.
California Employment Development Department Contract Employee Sentenced to 25 Months for Pandemic-Related FraudRead the Press Release
Assistant U. S. Attorney Stephen H. Wong (619) 546-9464
NEWS RELEASE SUMMARY – December 20, 2021
SAN DIEGO – Nyika Gomez, a San Diego resident and former contract employee with the California Employment Development Department (EDD), was sentenced in federal court to 25 months in prison and ordered to pay $93,248 dollars in restitution in connection with a scheme to submit fraudulent pandemic unemployment insurance claims for California state prisoners.
As part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020, Congress provided new unemployment benefits for those affected by the COVID-19 pandemic who would not otherwise qualify for unemployment insurance. In California, the EDD administers unemployment insurance benefits. In Arizona, benefits are administered by the Arizona Department for Economic Security (AZDES).
Gomez was sentenced on December 15. According to her plea agreement, in July 2020, Gomez devised a scheme to defraud the EDD and AZDES by submitting Pandemic Unemployment Assistance claims for prisoners and other persons who were not eligible for such assistance, including making up false claims about their employment. Gomez submitted more than $214,344 in fraudulent claims and collected $93,248 on those claims. Gomez arranged for the stolen benefits – paid out in the form of a debit card – to be mailed directly to her residence, or to the residence of someone working with her. Gomez returned some of the proceeds to the prison inmates by transferring money to their prison accounts and kept some of the proceeds for herself.
The charges are the product of an investigation jointly undertaken by the U.S. Department of Labor, Office of the Inspector General (DOL-OIG), the California Employment Development Department Office of Investigations (EDD OI), United States Postal Inspection Service (USPIS), and Homeland Security Investigations (HSI).
“Pandemic unemployment insurance programs are designed to support workers who are suffering financial hardship during this unprecedented time,” said Acting U.S. Attorney Randy Grossman. “This defendant was supposed to help unemployed workers. Instead, she cut a hole in their safety net, and she has been be held to account for her greedy actions.” Grossman thanked the prosecution team and the state and federal investigators for their excellent work on this case.
If you think you are a victim of COVID-19 fraud, immediately report it the FBI (visit ic3.gov, tips.fbi.gov, or call 1-800-CALL-FBI or the San Diego FBI at 858-320-1800.
In addition, the public is urged to report suspected fraud schemes related to COVID-19 by calling the National Center for Disaster Fraud (NCDF) hotline (1-866-720-5721) or by e-mailing the NCDF at [email protected].
DEFENDANTS Case Number 20-CR-729-CAB
Nyika Gomez Age: 31 San Diego, CA
SUMMARY OF CHARGES
Count 5: Title 18, United States Code, section 1343 (wire fraud)
Maximum penalty: Twenty years in prison; fine; penalty assessment
Count 12: Title 18, United States Code, section 1028A; (aggravated identity theft)
Maximum penalty: Two-year mandatory minimum term of imprisonment, consecutive to any term of imprisonment imposed for Counts 1 through 9.
AGENCIES
U.S. Department of Labor, Office of the Inspector General
California Employment Development Department Office of Investigations
California Department of Corrections and Rehabilitation-Investigative Services Unit
United States Postal Inspection Service
Homeland Security Investigations
Former San Diego Resident Pleads Guilty to Funding ISIS Terrorist Activities in SyriaRead the Press Release
Assistant U. S. Attorney Shane Harrigan (619) 546-6981 and Fred Sheppard (619) 546-8237
NEWS RELEASE SUMMARY – December 17, 2021
SAN DIEGO – Abdullahi Ahmed Abdullahi, a Canadian national and former resident of San Diego, pleaded guilty in federal court today, admitting that he conspired with others to provide material support to terrorists engaged in violent activities such as murder, kidnapping and maiming of persons in Syria.
According to his plea agreement, Abdullahi admitted that he provided money to his four cousins, including an 18-year old Minneapolis resident, as well as former San Diego resident Douglas McAuthur McCain, to support their terrorist activities in Syria.
From November 2013 through March 2014, with financial assistance from Abdullahi for the purchase of airline tickets and subsistence abroad, Douglas and the others traveled from the San Diego and Minneapolis and Edmonton, Canada to Syria, where they joined the Islamic State of Iraq and Syria (ISIS), a foreign terrorist organization, and engaged in armed battles to gain control of the territories and civilian populations within Syria on behalf of ISIS. All five individuals were subsequently reportedly killed fighting for ISIS.
Douglas McCain, a former San Diego resident, is the first known American to die fighting for ISIS. He departed from San Diego in March 2014, and on or about August 25, 2014, he was reportedly killed fighting for ISIS against Free Syrian Army forces. Douglas’ brother, Marchello McCain, was previously convicted in San Diego federal court and sentenced to 10 years in custody for illegal possession of a cache of firearms and providing false statements to FBI agents regarding his knowledge of the conspiracy, including the involvement of Abdullahi.
Pursuant to the plea agreement, Abdullahi also admitted that in order to finance the travel of others to Syria, members of the conspiracy encouraged Abdullahi and others to steal and commit fraud against the “kuffar” (a pejorative term used to describe non-Muslims), claiming that such criminal activity was permissible under Islamic law.
Abdullahi admitted that on January 9, 2014, he committed an armed robbery of an Edmonton jewelry store for the purpose of raising funds to support terrorist activities in Syria. Thereafter, on three occasions, Abdullahi wired and caused others to wire money to other members of the conspiracy in the United States -- including approximately $3,100 to Douglas – in order to finance the travel of foreign fighters from North America to support and join terrorist fighters engaged in terrorist activities in Syria.
Additionally, Abdullahi admitted that he and others wired and caused money to be wired to third-party intermediaries in Gaziantep, Turkey (located approximately 40 miles from the Syrian border) for the purpose of supporting member of the conspiracy fighting and engaging in terrorist activity in Syria.
According to the plea agreement, Abdullahi has agreed to a term of imprisonment of 20 years.
“Terrorist networks can’t survive without people like Abdullahi,” said U.S. Attorney Randy Grossman. “Our top priority is protecting Americans from terrorists, and with today’s guilty plea, we have delivered justice to someone who directly funded violence. I want to commend FBI San Diego and all of the federal, state and local law enforcement partners at the San Diego Joint Terrorism Task Force for their hard work and dedication to the multi-year, complex investigation that led to today’s guilty plea. Additionally, I am also extremely grateful for the assistance of the Department of Justice’s Office of International Affairs and our Canadian law enforcement partners, including the Royal Canadian Mounted Police; Edmonton Police Services; the Alberta Crown Prosecution Service; the Public Prosecution Service of Canada; and the Canada Crown Prosecutor’s Office, all of whom have been instrumental in the United States’ efforts to prosecute Abdullahi and combat international terrorism.”
“The defendant committed violent, criminal acts to obtain money to help fund Douglas McCain’s travel overseas to fight for ISIS, where McCain was ultimately killed,” said FBI Special Agent in Charge Suzanne Turner. “This case demonstrates the FBI’s dedication to vigorously pursue those who provide material support to terrorist organizations, financial or otherwise, and hold them accountable for those conspiratorial actions.”
On September 15, 2017, pursuant to an extradition request by the United States, Canadian authorities arrested Abdullahi. Abdullahi was detained in Canadian custody without bail, pending extradition. On October 24, 2019, Canada extradited Abdullahi to San Diego to face the material support charges in the Indictment.
DEFENDANT Criminal Case No. 17CR0622-W
Abdullahi Ahmed Abdullahi Age 33 Edmonton, Alberta, Canada
SUMMARY OF CHARGES
Conspiracy to Provide Material Support to Terrorists – Title 18, U.S.C., Sections 2339A(a)
Maximum penalty: Fifteen years in prison and $250,000 fine (per count)
Providing Material Support to Terrorists – Title 18, U.S.C., Sections 2339A(a)
Maximum penalty: Fifteen years in prison and $250,000 fine
INVESTIGATING AGENCIES
San Diego Joint Terrorism Task Force
Federal Bureau of Investigation
Federal Air Marshal Service
Department of Homeland Security, Homeland Security Investigations
Department of Homeland Security, U.S. Border Patrol
U.S. Coast Guard Honors Former U.S. Attorney Robert Brewer with Distinguished Public Service AwardRead the Press Release
News Release Summary – December 15, 2021
San Diego – United States Coast Guard Commandant Admiral Karl Schultz has awarded former U.S. Attorney Robert S. Brewer, Jr. with the Distinguished Public Service Award, the agency’s highest public recognition, other than the gold and silver lifesaving medals. Today, on behalf of the Commandant, Rear Admiral Brian Penoyer, the agency’s District Eleven Commander, presented the award, which was bestowed in recognition of Brewer’s “outstanding advancement of the Coast Guard's law enforcement mission as the United States Attorney for the Southern District of California from 2019 to 2021.”
The award recognizes that under Brewer’s leadership, the Southern District of California “strengthened its comprehensive maritime counter-narcotics program to significantly disrupt the flow of narcotics and human smuggling in the California Coastal Region and the Eastern Pacific,” noting that on April 1st, 2020, the United States Southern Command began enhanced counter-narcotics operations in the Western hemisphere to disrupt the increasing flow of drugs. The award credits Brewer with spearheading the prosecution of many cases resulting from these interdictions and promoting the safety and security of the United States” through “the conviction of six defendants in two jury trials, the prosecution of twenty low profile and go fast vessels, and the arrest of key land-side organizers in Central and South America,” which “effectively stymied the flow of maritime smuggling and delivered a major setback to numerous drug trafficking organizations.”
The award notes that Brewer was responsible for leveraging “long-term proactive maritime investigations and inter-agency partnerships to launch a concerted effort to target and dismantle maritime Transnational Criminal Organizations,” using Coast Guard Eastern Pacific interdictions as the cornerstone of an innovative legal approach to pursue and eradicate these organizations. It asserts that “Brewer’s commitment to securing resources was vital for indicting 125 high level narcotics targets, seizing 45 metric tons of cocaine and $4.5M of bulk cash, and dismantling major Transnational Criminal Organizations in Colombia, Ecuador, and Guatemala.”
Acting U.S. Attorney Grossman opened today’s ceremony by thanking the U.S. Coast Guard, which has become an increasingly important law enforcement partner in the Southern District’s ongoing fight against drug and human smuggling. “This is a truly fitting award for Bob, who has devoted so much of his life to public service in many ways – as an Army Ranger and war hero, as a Deputy District Attorney, then as an Assistant United States Attorney, and ultimately a United States Attorney,” Grossman said. “Bob prioritized our partnership with the U.S. Coast Guard, expanded our prosecutions of the agency’s drug interdictions, and effectively focused resources on proactive investigations designed to disrupt and dismantle transnational criminal organizations.”
At the ceremony, Brewer relayed his deep respect for the work of the U.S. Coast Guard, stating that his work with the agency “was a true highlight of my tenure as U.S. Attorney.” Brewer described the moving christening of the 32nd fast response cutter (FRC), Benjamin Bottoms and the offloading of massive major narcotics interdictions as significant moments reflecting the agencies’ strong partnership. “I am tremendously honored and grateful to be recognized by the Commandant,” Brewer said. “This very special award is really a reflection on the entire U.S. Attorney’s Office for the Southern District of California. It is a tribute to the hard work of the dedicated and innovative team that made these prosecutions possible.”
Former Chief Judge Irma Gonzalez (retired), Mr. Brewer’s spouse, attended the ceremony, accompanied by current Chief District Court Judge Dana Sabraw, Magistrate Judge Andy Schopler, Acting U.S. Attorney Randy Grossman, several USAO supervisors and U.S. Coast Guard Captain Timothy Barelli, the Commander of Sector San Diego.
Court Orders GirlsDoPorn and GirlsDoToys Video Rights and $18 Million in Restitution to VictimsRead the Press Release
NEWS RELEASE SUMMARY – December 15, 2021
SAN DIEGO – U.S. District Judge Janis L. Sammartino has ruled that all rights to videos and images produced in the GirlsDoPorn and GirlsDoToys sex trafficking case be awarded to the hundreds of victims who are featured in the footage posted to the adult websites.
Judge Sammartino issued the ruling as part of a restitution order in the prosecution of Ruben Andre Garcia, an adult film performer and producer who was sentenced to 20 years in prison for conspiring with the owners of the GirlsDoPorn (GDP) and GirlsDoToys (GDT) adult websites to recruit young women to appear in the sex videos using force, fraud, and coercion.
In addition to granting the rights to the videos and images to the victims, Judge Sammartino ordered Garcia to pay approximately $18 million in restitution to the victims.
To address the problem that hundreds of victims in this case have been and continue to be victimized by the posting and viewing of their GDP and GDT images and videos, Judge Sammartino outlined the following conditions:
- Garcia, aka “Jonathan,” has no right to use, publish, or otherwise exploit GirlsDoPorn (GDP) or GirlsDoToys (GDT) images, likenesses, or videos;
- All purported model releases and other agreements between GDP and/or GDT and its models purporting to give GDP and/or GDT the right to use, publish, or otherwise exploit its models’ images, likenesses, or videos are void and unenforceable;
- All transfers, licenses, or leases of the right to use, publish, or otherwise exploit the models’ images, likenesses, or videos by GDP and/or GDT to any third parties are void;
- Each model holds superior right, title, and interest in the images, likenesses, and videos depicting that model produced by GDP and/or GDT; and
- Each model shall have and recover all property that GDP and/or GDT took from them, including images, likenesses, videos, and copyrights.
“This is an extremely important ruling that returns power to the victims by giving them control of the images and videos that caused them so much pain and suffering,” said Acting U.S. Attorney Randy Grossman. “We hope this helps the victims close a difficult chapter in their lives.” Grossman thanked the prosecution team and the FBI for the relentless pursuit of justice in this case.
“An important step in this long healing process is for the victims to be able to take back control of their lives,” said FBI Special Agent in Charge Suzanne Turner. “This ruling helps to facilitate that shift while the FBI aggressively pursues the lone outstanding fugitive in this case - and its ringleader - Michael James Pratt.”
According to court documents, Garcia admitted that beginning in approximately 2013 and continuing up to October 2019, Michael James Pratt, Matthew Isaac Wolfe, Ruben Andre Garcia, Theodore Wilfred Gyi, Valerie Moser, and others, allegedly participated in a scheme to recruit victims to engage in commercial sex acts using force, fraud, and coercion.
To recruit victims to appear in videos for the websites, the defendants lied to the victims and told them that the videos would never be posted on-line, that the videos would never be released in the United States, and that no one who knew the women would ever find out about the videos, representations that the defendants knew were false. Hundreds of women from cities throughout the United States and Canada were recruited to appear in videos based upon these material misrepresentations. The defendants illegally obtained the images and videos of the victims using force, fraud, and coercion.
The victims’ sex acts were posted on the GDP and GDT websites. GDP and GDT charged visitors a subscription fee to access the websites’ content. The GDP and GDT websites generated at least $17 million in revenue for its owners.
Throughout the conspiracy, GDP and GDT received millions of views. To promote the websites, video content from both sites was posted on free porn sites such as Pornhub.com, one of the world’s most visited websites. The snippets of videos from GDP and GDT posted on Pornhub.com were often viewed millions of times, according to Pornhub’s view counters.
The next hearing in the ongoing case is March 11, 2022, at 2 p.m. for motions as to defendant Mathew Wolfe, whose trial is slated to begin June 20, 2022.
Any victims seeking the right to enforce this order and any additional victims of these alleged crimes are encouraged to call the FBI at 1-800-CALL-FBI or go to https://tips.fbi.gov/
The FBI is offering a reward of up to $50,000 for information leading to the arrest of Michael James Pratt. Individuals with information about Pratt should contact their local FBI office or the nearest American Embassy or Consulate.
For further information, please see:
- Wanted Poster: MICHAEL JAMES PRATT — FBI
- Press Release: FBI Seeking Public’s Assistance to Locate Michael James Pratt, Wanted for Sex Trafficking and Production of Child Pornography — FBI
DEFENDANTS Case Number 19cr4488-JLS
Michael James Pratt Age: 36 Fugitive
Matthew Isaac Wolfe Age 37 San Diego, CA
Theodore Gyi Age: 42 Rancho Aliso, CA**
Valorie Moser Age: 38 San Diego, CA**
SUMMARY OF CHARGES
Count 1 (charging all defendants)
Conspiracy to Commit Sex Trafficking by Force, Fraud and Coercion, 18 U.S.C. § 1591(a) and (b)(1)
Maximum Penalty: Life in prison, $250,000 fine, and a special assessment of $5,000 under 18 U.S.C. § 3014.
Count 2 (Pratt)
Production of Child Pornography, 18 U.S.C. § 2251(a) and (e)
Maximum penalty: Thirty years in prison with mandatory minimum 15 years; $250,000 fine, and a special assessment of $5,000 under 18 U.S.C. § 3014.
Count 3 (Pratt)
Sex Trafficking of a Minor by Force, Fraud and Coercion, 18 U.S.C. § 1591(a)(1) and (2)
Maximum penalty: Life in prison, mandatory minimum 15 years; $250,000 fine, and a special assessment of $5,000 under 18 U.S.C. § 3014.
Counts 4 (Pratt, Wolfe, Garcia), 5 (Pratt, Garcia), 6 (Pratt, Wolfe, Garcia), 7 (Pratt, Garcia, Gyi), 8 (Pratt, Garcia, Gyi)
Conspiracy to Commit Sex Trafficking by Force, Fraud and Coercion, 18 U.S.C. § 1594
Maximum penalty: Life in prison, mandatory minimum 15 years; $250,000 fine, and a special assessment of $5,000 under 18 U.S.C. § 3014.
INVESTIGATING AGENCY
FBI
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
San Diego Man Indicted for Multimillion-Dollar Investment SchemeRead the Press Release
Assistant U. S. Attorney Andrew J. Galvin (619) 546-9721
NEWS RELEASE SUMMARY – December 14, 2021
SAN DIEGO – A indictment unsealed today charges San Diego resident Denny Bhakta with securities fraud and money laundering for running an investment fraud scheme that took in at least $28 million from investors since 2016.
According to court documents and statements made in court, Bhakta solicited investments in his companies, Fusion Hotel Management, LLC and Fusion Hospitality Corporation (collectively “Fusion”). Bhakta falsely told investors that Fusion routinely acquired discounted blocks of hotel rooms from Hilton, which Fusion then sold to United Airlines at a higher price for a significant profit. Instead of buying blocks of hotel rooms with investors’ funds, however, Bhakta used the money for personal expenses and to make payments to other investors.
The indictment alleges that Bhakta provided investors with fabricated documents, including bank records that purported to show payments from Fusion to Hilton and fake agreements between Fusion and United Airlines. These documents gave the false appearance that Fusion bought large blocks of hotel rooms from Hilton and sold them to United Airlines. According to statements made in court, Bhakta laundered the proceeds of his fraud scheme by using investor funds from Fusion’s bank accounts at various casinos, including the ARIA Resort & Casino and The Cosmopolitan of Las Vegas.
Bhakta was arrested at his San Diego residence on Tuesday morning.
“We will do everything we can to protect investors and to seek justice when they fall victim to scammers,” said Acting U.S. Attorney Randy Grossman. “Investors, be suspicious of high-pressure sales tactics, promises of returns that are too good to be true, and always verify the license and legitimacy of the person making the pitch.” Grossman thanked the prosecution team and the FBI for their excellent work on this case.
“The defendant allegedly spent the last five years making millions of dollars based on false promises supported by fraudulent financial statements and fake business agreements,” said FBI Special Agent in Charge Suzanne Turner. “This case should serve as a warning – the FBI will continue to partner with the U. S. Securities and Exchange Commission to root out all forms of investment fraud.”
The next hearing is scheduled for January 21 at 1:30 p.m.
DEFENDANT Case Number 21-CR-3352-JLS
Denny Bhakta Age: 39 San Diego, CA
SUMMARY OF CHARGES
Securities Fraud – Title 15, U.S.C., Sections 78j(b), 78ff, and Title 17, C.F.R., Section 240.10b-5
Money Laundering – Title 18, U.S.C., Section 1957
Maximum penalty: Twenty years in prison
AGENCY
Federal Bureau of Investigation
Securities and Exchange Commission
*The charges and allegations contained in an indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Human Smugglers Sentenced for La Jolla Maritime Smuggling DeathRead the Press Release
Assistant U. S. Attorneys Colin M. McDonald (619) 546-9144 and Victor P. White (619) 546-8439
NEWS RELEASE SUMMARY – December 13, 2021
SAN DIEGO – Victor Alfonso Soto Aguilar and Jose Ramon Geraldo Romero were sentenced in federal court today to 71 and 60 months in prison, respectively, for attempting to smuggle fourteen Mexican citizens into the United States by sea, resulting in the tragic drowning death of a 43-year-old passenger.
Court records show that on May 19, 2021, Soto Aguilar and Geraldo Romero agreed to smuggle a group of undocumented individuals on a panga boat from Ensenada, Mexico to the shores of La Jolla, California—a distance nearing 100 miles. The smuggling venture encountered issues from the start. Due to engine trouble, the panga—which was significantly overloaded—stalled in the middle of open ocean waters. As a result, the group was forced to spend the night in the panga without adequate food or water. Soto Aguilar and Geraldo Romero then dropped their passengers on an island in the middle of the ocean while they tried to repair the panga. After making repairs, Soto Aguilar and Geraldo Romero retrieved the passengers from the island and proceeded to navigate the panga north towards La Jolla.
On May 20, 2021, in the early morning hours, the panga neared the shores of La Jolla by Marine Street beach. When the panga was approximately eighty yards from shore, Soto Aguilar and Geraldo Romero—not knowing if anyone could swim—instructed the passengers to remove their life jackets and jump into the water, assuring them the water was shallow.
Twelve passengers did as they were told. Immediately they struggled to stay afloat and desperately started calling for help. The two passengers that remained on the panga saw their fellow passengers struggling and tossed life jackets into the ocean. Soto Aguilar and Geraldo Romero then saw a lifeless body floating in the water. After pulling the body into the panga, Soto Aguilar and Geraldo Romero sped the boat away from the group in the water towards another beach about a half-mile away. After landing there, Soto Aguilar and Geraldo Romero then left the panga and fled the scene. However, after some searching by law enforcement, they were apprehended nearby.
As law enforcement was securing the crime scene, a concerned citizen spotted an individual floating in the water near the beached panga. Responding officers immediately rushed to the individual’s aid, extricated him from the water, and quickly realized he was unconscious. A Border Patrol agent performed CPR in an attempt to revive the individual, but he was pronounced dead once lifeguards arrived on scene. The decedent was later identified as Rogelio Perez-Gutierrez, a 43-year-old citizen of Mexico.
At the original drop-off location, United States Border Patrol, the United States Coast Guard, and San Diego Lifeguards spotted the individuals struggling desperately in the ocean. Lifeguards ultimately rescued ten people out of the water. In later interviews, the passengers on the panga said they were paying between $12,000 and $15,000 to be brought into the United States; they stated they feared for their lives throughout the ocean journey.
At the sentencing hearing, U.S. District Judge John Houston spoke about the “extraordinary danger” of smuggling on the high seas. Speaking of the gravity of the crime, Judge Houston said, “A human being is not here because of the risk you were willing to take.” He further urged the defendants to “[t]ell the people in Mexico that to captain or assist in driving a boat on the high seas will create a significant sentence.”
“This was a tragedy that never should have happened,” said Acting U.S. Attorney Randy Grossman. “These deadly smuggling incidents are on the rise. We will aggressively seek justice for the victims. But we also urge anyone who is contemplating an attempt to cross the border illegally: Don’t do it. Don’t put your life in the hands of greedy smugglers who care about money, not you.” Grossman commended the excellent work of the prosecution team as well as the HSI agents, Coast Guard officers, Border Patrol agents, and San Diego Lifeguards, for their efforts in connection with the case.
“The U.S. Border Patrol will continue to seek maximum prosecution of individuals who smuggle at sea,” said San Diego Sector’s Chief Patrol Agent Aaron Heitke. “This incredibly dangerous and unpredictable tactic has already claimed lives, yet smuggling organizations continue to enrich themselves by using it.”
DEFENDANTS Case Number 21cr1665-JAH
Victor Alfonso Soto Aguilar Age: 37 Residence: Mexico
Jose Ramon Geraldo Romero Age: 24 Residence: Mexico
SUMMARY OF CHARGES
8 U.S.C. § 1324(a)(1)(A)(i) and (B)(iv) - Attempted Bringing In Illegal Aliens Resulting in Death
Maximum penalty: Death or imprisonment for any term of years or for life; $250,000 fine.
8 U.S.C. § 1324(a)(2)(B)(ii) - Attempted Bringing In Illegal Aliens for Financial Gain (three counts)
Maximum penalty: mandatory minimum five years’ imprisonment; maximum fifteen years; $250,000 fine
AGENCIES
Homeland Security Investigations
United States Coast Guard
San Diego Lifeguards
United States Border Patrol
Customs and Border Protection
The U.S. Attorney’s Office for the Southern District of California helps lead Joint Task Force Alpha (JTFA), which was established by Attorney General Merrick B. Garland in June 2021 to marshal the investigative and prosecutorial resources of the Department of Justice, in partnership with the Department of Homeland Security (DHS), to enhance U.S. enforcement efforts against the most prolific and dangerous human smuggling and trafficking groups operating in Mexico and the Northern Triangle countries of Guatemala, El Salvador, and Honduras. The Task Force focuses on disrupting and dismantling smuggling and trafficking networks that abuse, exploit, or endanger migrants, pose national security threats, and are involved in organized crime. JTFA consists of federal prosecutors and attorneys from U.S. Attorney’s Offices along the Southwest Border (District of Arizona, Southern District of California, Southern District of Texas, and Western District of Texas), from the Criminal Division and the Civil Rights Division, along with law enforcement agents and analysts from DHS’s Immigration and Customs Enforcement, Customs and Border Protection, and Border Patrol. The FBI and the Drug Enforcement Administration are also part of the Task Force.
Man Sentenced for Smuggling Migrants Across Dangerous Terrain Where Three Sisters DiedRead the Press Release
Assistant U. S. Attorney Charlotte E. Kaiser (619) 546-7282
NEWS RELEASE SUMMARY – December 10, 2021
SAN DIEGO – Rito Rios-Quinones of Chihuahua, Mexico, was sentenced in federal court today to two years in prison for smuggling five migrants across treacherous terrain along the U.S.-Mexico border. It was the same route used by his brothers, Cecilio and Ricardo Rios-Quinones, who were convicted in connection with an ill-fated smuggling event that resulted in the deaths of three sisters in February 2020.
Rito Rios-Quinones pleaded guilty in March 2021 to Bringing in Aliens for Financial Gain and Aiding and Abetting. As part of his plea agreement, Rios admitted that he and his brothers worked for a human smuggling organization. He agreed to learn the smuggling routes, be paid to serve as a foot guide and teach other foot guides the routes.
Rios further admitted that he trained his brother Ricardo on the smuggling route a few days before the February 10, 2020 event that resulted in the deaths of sisters Juana Santos Arce, Margarita Santos Arce and Paula Santos Arce of Oaxaca, Mexico.
On that day, agents from the Border Patrol’s Search, Trauma and Rescue (BORSTAR) unit, along with Border Patrol agents from the Campo-Boulevard area and rescue personnel from the City of San Diego Fire & Rescue Department placed their own lives at risk during a rescue operation of Cecilio and Rito Rios-Quinones and attempted rescue of the sisters, whom Cecilio and Ricardo were guiding along the route. All three women died of hypothermia. Subsequently, Cecilio and Ricardo Rios-Quinones pleaded guilty to Transportation of Aliens Resulting in Death, among other charges, and were each sentenced on April 2, 2020, to 66 months in custody.
In today’s case, Rito Rios-Quinones admitted in his plea agreement that he knew his brothers smuggled these three women along this route and that the three women died during the smuggling event. Despite this knowledge, on or about November 3, 2020, Rito Rios-Quinones was apprehended for smuggling five other migrants along this same route for the same smuggling organization. The migrants were going to pay or have others pay on their behalf $7,000 to $8,000 to the organization to be smuggling into the United States.
“This defendant knew about the tragic deaths along this smuggling route, and yet he still attempted the perilous journey, failing to make sure these victims had the proper clothing, supplies or equipment to make it,” said Acting U.S. Attorney Randy Grossman. “These are callous acts of greed. Smugglers, we will find a way to identify you and prosecute you to the fullest extent of the law. Migrants, don’t put your lives in the hands of people with absolutely no regard for your safety.” Grossman thanked the prosecution team and agents from Border Patrol and Homeland Security Investigations for their excellent work in this case.
“Human smuggling organizations enrich themselves while endangering the lives of those they smuggle,” said Border Patrol’s Chief Patrol Agent Aaron Heitke. “We are grateful for the tenacity, persistence, and hard work that our law enforcement partners have demonstrated in this case. Collaboratively, our efforts have resulted in Rios-Quinones’ arrest, conviction, and just sentencing.”
“The actions of this individual are another example of the complete disregard human smugglers have for the people who pay them,” said HSI San Diego Special Agent in Charge Chad Plantz. “Anyone considering making the perilous journey across the border with smugglers should know that they place their lives in extreme danger because these transnational criminal organizations only value the profits from their illegal enterprise. HSI, along with its law enforcement partners will continue to bring to justice individuals like Rios-Quinones who place greed and profit before human life.”
DEFENDANT Case Number 19cr0868-CAB
Rito Rios-Quinones Age: 33 Chihuahua, Mexico
SUMMARY OF CHARGES
Bringing in Aliens for Financial Gain and Aiding and Abetting– Title 8, U.S.C., Section 1324(a)(2)(B)(ii) and Title 8, U.S.C., Section 2
Maximum penalty: Ten years in prison, and $250,000 fine.
AGENCIES
U.S. Border Patrol, Intelligence Unit
Homeland Security Investigations
Justice Department Awards More Than $17.5 Million to Support Project Safe NeighborhoodsRead the Press Release
Senior Litigation Counsel and Community Outreach Director Cindy Cipriani (619) 546-9608
NEWS RELEASE SUMMARY – December 10, 2021
SAN DIEGO – The Department of Justice announced today that it has awarded more than $17.5 million in grants to support the Project Safe Neighborhoods (PSN) Program. Funding will support efforts across the country to address violent crime, including the gun violence that is often at its core. The Southern District of California was awarded $185,384.
The Bureau of Justice Assistance (BJA), part of the department’s Office of Justice Programs (OJP), will administer the 88 grant awards, which are being made to designated fiscal agents to support local PSN projects that work in partnership with U.S. Attorneys’ Offices. The San Diego Association of Governments (SANDAG) is the fiscal agent for the Southern District of California.
“This latest Project Safe Neighborhoods grant is critical to addressing the violent crime threatening cities and towns all across our country,” said Deputy Attorney General Lisa O. Monaco. “Ensuring the safety of all Americans is the highest priority for the Department of Justice, but when it comes to violent crime, there is not a one-size-fits-all solution. We have to work closely with local public safety agencies as well as community organizations to craft individual strategies unique to each community’s needs. Programs like Project Safe Neighborhoods and the funding it provides allow us to do just that.”
“Through Project Safe Neighborhoods, a broad spectrum of stakeholders works together to identify the most pressing violent crime problems in the community and develops comprehensive prosecution and community outreach solutions to address them,” said Acting U.S. Attorney Randy Grossman. “Our grants have been distributed to local law enforcement and community organizations to prevent gun violence, facilitate reentry, reduce gang membership and other important programs. This money is an investment in public safety.”
In the current round of funding, the Southern District of California PSN Task Force plans to fund violent crime law enforcement efforts and nonprofit agencies that focus on gang prevention, violence intervention, and facilitating successful reentry into the community from custody. The District’s PSN awards over the past two years have funded enforcement of red flag laws, youth mentoring, credible messenger programs, and research into ways to measure the success and bolster the capacity of lived experience mentoring.
“Investing in our communities, supporting victims and building a justice system that both keeps people safe and earns their trust – these are mutually reinforcing goals that stand at the heart of Project Safe Neighborhoods,” said Principal Deputy Assistant Attorney General Amy L. Solomon for OJP. “The Office of Justice Programs is pleased to join with our U.S. Attorneys’ Offices, and with jurisdictions across the country, as we work together to meet the challenges of crime and violence and achieve our shared aspirations of public safety and community trust.”
In May 2021, Attorney General Merrick B. Garland announced a new effort to reduce violent crime, including the gun violence that is often at its core. Integral to that effort was the reinvigoration of PSN, a two-decade old evidence-based and community-oriented program focused on reducing violent crime. The updated PSN approach, outlined in the department’s Comprehensive Strategy for Reducing Violent Crime issued by Deputy Attorney General Monaco, is guided by four key principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence, setting focused and strategic enforcement priorities and measuring the results of our efforts. The fundamental goal is to reduce violent crime, not simply to increase the number of arrests or prosecutions.
This fall, U.S. Attorney’s Offices across the country have enhanced their violent crime reduction efforts to ensure alignment with the department’s comprehensive violent crime reduction strategy. U.S. Attorneys’ Offices have engaged in outreach to law enforcement and other agencies and organizations serving communities to identify the most significant drivers of violence in their districts. Working together with a broad coalition of stakeholders, the U.S. Attorneys’ Offices are addressing the most pressing violent crime issues in their district to make our neighborhoods safer for all.
PSN programs are led by U.S. Attorneys’ Offices in collaboration with local public safety agencies, community stakeholders and other agencies and organizations that work to reduce violent crime.
For a list of all grantees, please visit: https://www.ojp.gov/sites/g/files/xyckuh241/files/media/document/FY21-Project-Safe-Neighborhoods-Awards.pdf.
Information about these and other FY 2021 grant awards from the Office of Justice Programs can be found online at the OJP Grant Awards Page.
The Office of Justice Programs provides federal leadership, grants, training, technical assistance and other resources to improve the nation’s capacity to prevent and reduce crime, advance racial equity in the administration of justice, assist victims and enhance the rule of law. More information about OJP and its components can be found at www.ojp.gov
Escondido Resident Sentenced to Three Years in Prison for Selling $1.1 Million of Forged ArtRead the Press Release
Assistant U. S. Attorney Andrew J. Galvin (619) 546-9721
NEWS RELEASE SUMMARY – December 10, 2021
SAN DIEGO – Jason Harrington was sentenced in federal court today to 36 months in prison for selling $1.1 million of forged art he claimed was created by Richard Hambleton, a New York City artist who rose to fame in the 1980s.
When he pleaded guilty in August 2021, Harrington admitted selling forged art to at least 15 galleries and individuals between 2018 and 2020. The forged art included paintings of a black-silhouetted figure known as the Shadowman, which was a recurring motif in Hambleton's works.
To make the forged art appear authentic, Harrington lied to prospective buyers regarding the provenance of the art. To support these false statements, Harrington provided prospective buyers with a fake letter purportedly signed by the individual who obtained the art and, on one occasion, instructed an individual to speak with a prospective buyer and falsely claim to have obtained the art from Hambleton. According to court records, Harrington altered images, using publicly available photographs of Hambleton, to make it appear that the individual who purportedly obtained the art knew Hambleton.
Harrington also admitted to attempting to sell at least one forged painting purporting to be from the noted portraitist Barkley Hendricks. According to court records, Harrington falsely claimed to the owner of an art gallery that he inherited the painting from his uncle. The art gallery, however, refused to purchase the painting after Hendricks’ widow viewed the painting and determined it was a forgery.
“This is a fitting sentence for a defendant who harmed investors, corrupted the integrity of the art market, and damaged the historical-cultural record,” said Acting U.S. Attorney Randy Grossman. Grossman thanked the prosecution team and the FBI for their excellent work on this case.
“Today’s sentence demonstrates the FBI’s commitment in pursuing those who make a living victimizing others,” said FBI Special Agent in Charge Suzanne Turner. “Mr. Harrington knowingly and willfully operated in the world of forged art and today found out the cost for those criminal acts. These types of crimes not only hurt the victims who purchased the artwork, they cast a shadow over the art community as a whole - particularly those forged artists’ names he used to further his scheme.”
Harrington will appear for a restitution hearing on February 11, 2022 before U.S. District Judge Janis L. Sammartino.
DEFENDANT Case Number 21-CR-1184-JLS
Jason Harrington Age: 38 Escondido, CA
SUMMARY OF CHARGES
Wire Fraud – Title 18, U.S.C., Section 1343
Maximum penalty: Twenty years in prison and $250,000 fine
AGENCY
Federal Bureau of Investigation
Former Employee Sentenced for Defrauding the Veterans AdministrationRead the Press Release
Assistant U. S. Attorneys Dylan M. Aste (619) 546-7621 and Valerie H. Chu (619) 546-6750
NEWS RELEASE SUMMARY – December 6, 2021
SAN DIEGO – Anthony Medrano, a veteran of the U.S. Marine Corps and former employee of the Veterans Administration, was sentenced in federal court today to eight months in custody for defrauding the Department of Veterans Affairs out of more than $183,000.
According to his plea agreement, Medrano admitted that between approximately November 2015 and May 2020, he submitted claims to the Veterans Administration (VA) in which he purported to be disabled so that he could obtain caregiver benefits for his wife, when he was actually able-bodied and even participating in fitness challenges and coaching youth sports.
Medrano executed this scheme while employed in the VA’s Veterans Benefits Administration as a Veterans Service Representative, a position in which he explained benefit programs and entitlement criteria to veterans applying for VA benefits. As a representative, Medrano’s responsibilities included adjudicating claims, authorizing payments, and inputting data necessary to generate the award and notification letter to the veteran. After the Veterans Benefits Administration authorizes payment, the Veterans Benefits Administration—a separate VA branch—administers the payment to disabled veterans who require substantial caregiving and need assistance to pay for such care. Using the knowledge gained from his VA employment, Medrano stole $183,034.38 from the VA through a series of lies.
According to court documents, Medrano first lied during the physician evaluation conducted to determine eligibility in the Caregiver Support Program. Medrano lied about needing high-level assistance for daily activities (e.g., dressing and undressing himself, personal hygiene, grooming), and he lied about needing high-level assistance in other activities (e.g., planning and organizing, recent memory, self-regulation). Medrano tricked the VA into awarding him assistance that paid the primary caregiver -his wife - an amount equivalent to a full-time home health aide’s 40-hour-per-week payment.
Medrano’s lies continued for years so that the money would keep coming in. Medrano told VA representatives that he was unemployed since 2012 and unable to work; his caregiver was “doing everything” for him, including washing his back while bathing. He said that he could not stand for more than 5-10 minutes; and he could not lift more than 20 pounds. But while Medrano was making those statements, he was employed, he was washing his own back, and was often lifting weights greater than 20 pounds while working out.
For example, immediately following an active-duty stint in the United States Marine Corps, the VA fully employed Medrano from March 2013 through February 19, 2021. Medrano was also walking, jogging, and coaching youth sports teams while stating he could not stand for more than 5-10 minutes. And only a few weeks after stating he could not lift more than 20 pounds, Medrano posted videos of himself on Facebook participating in the “push-up challenge,” doing push-ups with a 25-pound weight on his back.
In court, prosecutor Dylan M. Aste noted that, due to his position, Medrano knew the inner workings of the VA’s approval requirements for disability benefits and used that insider information to exploit the VA system and steal $183,000 from the VA and disabled veterans in need of such benefits programs.
“This defendant used his position to game the system at the expense of those with legitimate claims and taxpayers in general,” said Acting U.S. Attorney Randy Grossman. “It’s not only outrageous when an undeserving person claims a disability. It’s also a crime. And unfortunately for this defendant, he is going to jail.” Grossman thanked the prosecution team and the Department of Veterans Affairs, Office of Inspector General, for their excellent work on this case.
“Our nation’s service-disabled veterans receive a wide variety of benefits from the Department of Veterans Affairs. Unfortunately, some veterans fraudulently misrepresent their situation to obtain benefits they do not deserve,” said Special Agent in Charge Rebeccalynn Staples of the Department of Veterans Affairs Office of Inspector General’s Western Field Office. “The VA OIG remains committed to diligently pursuing these cases in an effort to maintain the integrity of VA programs.”
To report fraud in a VA program, call the VA-OIG hotline at 1-800-488-8244 or visit https://www.va.gov/oig/hotline/.
DEFENDANT Case Number 21cr01071-BAS
Anthony Medrano Age: 42 Spring Valley, CA
SUMMARY OF CHARGES
Theft of Government Property – Title 18, U.S.C., Section 641
Maximum penalty: Ten years in prison and $500,000 fine
AGENCY
United States Department of Veteran’s Affairs, Office of the Inspector General
Gold Dealers Sentenced for Financial Crimes and Gun CrimesRead the Press Release
Assistant U. S. Attorney Daniel Silva (619) 546-9713
NEWS RELEASE SUMMARY—December 3, 2021
SAN DIEGO – Global Gold Exchange, LLC and its managers, Richard M. Owen, James Warren, and Jeffrey Morrow, were sentenced in federal court today for committing multiple financial and firearms crimes, including laundering money through their unlicensed money transmitting business by falsely reporting transactions as “gold” and other precious metals.
Following entry of guilty pleas across 2019 and 2020, U.S. District Court Judge Cathy Ann Bencivengo sentenced each of the individual defendants to a term of incarceration. Owen received a custodial sentence of 24 months on his money laundering and felon-in-possession of firearm convictions. Warren and Morrow received custodial sentences of 6 and 8 months, respectively, on their convictions for operating an unlicensed money transmitting business.
As part of their sentences, the defendants agreed to forfeit approximately $2 million in assets involved in the money laundering and unlicensed money transmitting business, and further to provide restitution in the amount of no less than $3,682,063.44 for the crimes of money laundering, mail fraud, and operating an unlicensed money transmitting business. Each defendant is subject to a three-year term of supervised release following their custodial sentences.
Special Agents from IRS-Criminal Investigation’s Financial Investigations and Border Crimes Task Force worked with FBI agents and the United States Postal Inspection Service during the multi-year investigation to unravel millions of dollars in suspicious transactions taking place at the San Diego-based office and bank accounts of Global Gold Exchange, or “GGEX.”
Taken together, the defendants unlawfully laundered cash and funds from a variety of sources—both lawful and unlawful—and fraudulently documented the transactions as “a complete gold transaction.” Their crimes were best summed up in plea agreements that were previously entered by all four defendants, which admitted to operating GGEX “as an informal money transfer system engaged in facilitating the transfer of money domestically and internationally outside of the conventional financial institutions system, and did so without regard for the source, destination, purpose, or legality of the funds transmitted.”
Several victims addressed the court and the defendants, describing how they had “stolen our dignity,” “robbed us of peace of mind,” and “hurt people at a very deep level.” After reviewing the underlying facts of the case and handing down the sentences, Judge Bencivengo stated that the defendants’ crimes allowed people to “hide assets and improper transactions” while causing “irreparable harm” to the victims.
“Global Gold Exchange and its managers attempted to operate as a one-stop-shop for money laundering,” said Acting United States Attorney Randy S. Grossman. “The sentences handed down today make clear that the United States will pursue and prosecute any individual, asset, or business attempting to launder the proceeds of crimes, or that threaten the integrity of our financial system.”
Between 2017 and 2018, defendants GGEX, Owen, Warren, and Morrow employed various money laundering, fraud, and unlicensed money transmitting techniques to conduct unlawful transactions through GGEX and GGEX’s bank accounts, including transacting with a “local cartel out of Mexico;” falsifying invoices for sales of gold, when in reality it was the receipt of a large cash deposit, and returned by check after GGEX took a 10 percent fee; agreeing with “clients” to tell law enforcement or tax authorities that the transactions were sales/purchases of precious metals; and advising clients to mail GGEX parcels filled with heavy substances to mimic the weight of gold, all to falsely document the nature of GGEX’s transactions.
“Today’s sentences demonstrate IRS Criminal Investigation’s commitment to disrupting professional enablers, who facilitate the commission and concealment of financial crimes by veiling them behind legitimate business services,” said Special Agent in Charge Ryan L. Korner of the Los Angeles Field Office. “Targeting organizations such as Global Gold Exchange, LLC and its managers, who used their expertise of our financial systems to launder illicit funds, eliminates this avenue for criminal activity.”
“The FBI is proud to partner with IRS Criminal Investigations and the United States Postal Inspection Service to bring our collective authorities to bear in money laundering and fraud cases such as these,” said FBI Special Agent in Charge Suzanne Turner. “Today’s sentences should serve as a deterrent to those who seek to launder criminal proceeds by exploiting our financial system. The FBI and our federal partners will continue to bring all available resources to stop the flow of money to criminal organizations.”
“Today’s sentencing makes a statement to those who use the U.S. Mail to commit fraud,” stated Carroll N Harris, Postal Inspector in Charge of the Los Angeles Division, United States Postal Inspection Service. “Instead of seeing gold bars, these fraudsters will be behind prison bars. As always, Postal Inspectors remain committed to keeping the mail free from fraudulent mailings and will hold those that do accountable for their crimes.”
This case is the result of ongoing efforts by the Financial Investigations and Border Crimes Task Force, a partnership targeting unlawful transactions through the financial system. The task force brings together the combined expertise of federal, state, and local law enforcement including IRS-CI, California Franchise Tax Board, United States Postal Inspection Service, and the San Diego Police Department. FBI and United States Postal Inspection Service partnered with the FIBC in this coordinated investigation, with assistance from the Bureau of Alcohol, Tobacco, Firearms and Explosives. This case is being prosecuted by Assistant U.S. Attorney Daniel Silva.
DEFENDANTS Case Numbers: 19-CR-2936-CAB; 20-CR-3748-CAB
Global Gold Exchange, LLC
Richard M. Owen San Diego, CA Age: 52
James Warren San Diego, CA Age: 50
Jeffrey Morrow San Diego, CA Age: 46
SUMMARY OF COUNTS OF CONVICTION
Money Laundering – Title 18, U.S.C., Section 1956
Maximum penalty: Twenty years in prison and $500,000 fine
Operation of Unlicensed Money Transmitting Business – Title 18, U.S.C., Section 1960
Maximum penalty: Five years in prison and $250,000 fine
Mail Fraud – Title 18, U.S.C., Section 1341
Maximum penalty: Thirty years in prison and $1 million fine
Unlawful Possession of Firearm – Title 18, U.S.C., Section 922(g)
Maximum penalty: Ten years in prison and $250,000 fine
AGENCIES
IRS Criminal Investigation and the Financial Investigations and Border Crimes Task Force
Federal Bureau of Investigation
United States Postal Inspection Service
Distributor of More than 100 Pounds of Fentanyl Sentenced to Almost Six Years in PrisonRead the Press Release
Assistant U. S. Attorney Meghan E. Heesch (619) 546-9442
NEWS RELEASE SUMMARY – December 1, 2021
SAN DIEGO – Ernesto Renteria of Chula Vista was sentenced in federal court today to 71 months in custody for distributing more than 100 pounds of deadly fentanyl plus fentanyl analogues, cocaine and methamphetamine.
According to his plea agreement, in May 2021, Renteria stored large quantities of the federally controlled substances at his house in Chula Vista and was shipping them to distributors across the country via UPS. In total, DEA agents seized from Renteria 49.1 kilograms (108.2 pounds) of fentanyl; 7 kilograms of cocaine; 4 kilograms of fentanyl analogue; and 1.8 kg methamphetamine. Agents also seized packaging materials and GPS tracking devices.
This seizure of fentanyl is yet another example of drug cartels pushing huge quantities of fentanyl into the San Diego community. On November 19, 2021, authorities at the Otay Mesa port of entry made a record-breaking seizure of 17,584 pounds of methamphetamine and 388.93 pounds of fentanyl from a commercial trailer attempting to enter the U.S. The driver of the vehicle, Carlos Martin Quintana-Arias, faces narcotics importation charges.
DEA agents across the country have seized a record-high 12,000 pounds of fentanyl this year.
“Fentanyl is an incredibly dangerous drug that is destroying lives and families in our community and across the nation,” said Acting U.S. Attorney Randy S. Grossman. “Our office will continue to aggressively prosecute those responsible for distributing this poison and profiting from the opioid epidemic.” Grossman praised the prosecution team and DEA agents for their excellent work on this case.
“The quantity of fentanyl DEA agents seized from Ernesto Renteria is disturbing,” said DEA Acting Special Agent in Charge Shelly S. Howe. “Had DEA not seized these deadly drugs prior to distribution, many Americans could have died from a fentanyl overdose. The DEA will continue to prioritize investigations targeting fentanyl drug traffickers to fight the growing number of overdose deaths in our country.”
Fentanyl analogues like the ones possessed by Renteria are particularly dangerous because the chemical structure can be manipulated to increase the potency. Since 2018, fentanyl analogues have been temporarily classified by the Drug Enforcement Administration as a Schedule I controlled substance. The temporary schedule expires in February 2022. In January 2020, all four U.S. Attorneys in California called on Congress to strengthen federal prosecutors’ toolkits by permanently scheduling all fentanyl analogues as Schedule I controlled substances.
This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) Strike Force Initiative, which provides for the establishment of permanent multi-agency task force teams that work side-by-side in the same location. This co-located model enables agents from different agencies to collaborate on intelligence-driven, multi-jurisdictional operations to disrupt and dismantle the most significant drug traffickers, money launderers, gangs, and transnational criminal organizations.
DEFENDANT Case Number 21cr1594-CAB
Ernesto Renteria Age: 45 Chula Vista, CA
SUMMARY OF CHARGES
Conspiracy to Distribute Controlled Substances, in violation of 21 U.S.C. 841 and 846
Maximum Penalty: Life in prison; $10 million fine
AGENCY
Drug Enforcement Administration