Southern District of California
Press releases recorded for this federal judicial district.
United States Attorney’s Office Celebrates Native American Heritage MonthRead the Press Release
Assistant U. S. Attorney Kim-Thoa Hoang (619) 546-9397
NEWS RELEASE SUMMARY – November 29, 2021
SAN DIEGO – To commemorate American Indian and Alaska Native Heritage Month, the U.S. Attorney’s Office recently hosted an event to celebrate the cultures, traditions and histories of American Indians and Alaska Natives and acknowledge the tremendous contributions of those communities to the United States.
At the November 19 event, Acting U.S. Attorney Randy Grossman expressed his commitment to working as partners with Tribal nations to reduce crime and help victims. “The Department of Justice is committed to improving public safety in Native American communities,” Grossman said. “We stand ready to work with our Tribal partners to develop public safety solutions that work best for Tribal communities in our district.”
Grossman noted in his remarks at the event that the U.S. Attorney’s Office, through its tribal liaison efforts, has built and maintained partnerships with the tribal communities in San Diego County, as well as fostering a strong working relationship with local and county law enforcement agencies for the investigation and prosecution of criminal activities within the reservations.
Also attending the event were San Diego County Deputy District Attorneys Joe McLaughlin and Brooke Tafreshi and District Attorney Investigator Juan Cisneros, all tribal liaison representatives; Sheriff’s Captain Mike Rand; Chairwoman Erica Pinto and Councilman James Cuero of the Jamul Indian Village.
Further, in honor of Native American Heritage Month, Chairman Robert Smith of Pala Band of Mission Indians, who also serves as Chairman of the Board of the Southern California Chairmen’s Association, offered some remarks remotely and stressed the importance of working with all levels of law enforcement to ensure the well-being of tribal residents.
“The most basic responsibility of tribal leaders,” Smith said, “is to provide a variety of social, governmental, administrative, educational, health and welfare services for tribal members. Over the years, Native Americans have made progress in these areas, but there is much more to be done; we need to continue to dedicate ourselves to improving the quality of life of all of our members. To this end, we also need to promote strong collaborative relationships with governmental agencies to overcome challenges and attain positive solutions.”
This year’s celebration featured a first for the U.S. Attorney’s Office: The participation in person of one of the tribal leaders in the district, Chairwoman Pinto of the Jamul Indian Village, who delivered keynote remarks.
Chairwoman Pinto shared her background and experience as a tribal leader and award-winning trailblazer who has accomplished much for the benefit of her Tribe and tribal constituents. She stressed the importance of a partnership approach on the part of tribal leaders and organizations as one of the key attributes of successful leadership in building self-reliance and strengthening tribal sovereignty while contributing to the prosperity of the greater community and celebrating the historical legacy and rich culture of Native Americans.
She said: “Tribal independence and self-determination now guide our Tribe. The ability to exercise our inherent right to sovereignty has allowed my tribal community to engage in the self-sufficiency required to tackle issues like education, housing, health care, and economic development.”
El Cajon Resident Sentenced to 15 Years for Selling Counterfeit Pills with Fentanyl that Caused 19-Year-Old’s DeathRead the Press Release
Assistant U. S. Attorneys Michael A. Deshong and Adam Gordon (619) 546-9290
NEWS RELEASE SUMMARY—November 24, 2021
SAN DIEGO—El Cajon resident Olatunde James Temitope Akintonde was sentenced in federal court today to 15 years in prison for selling fentanyl-laced pills that caused the death of a 19-year-old Santee man, identified in court records as S.J.G., in March of 2019.
Akintonde previously admitted that he sent messages to S.J.G. through social media on February 28, 2019, to coordinate a sale of what the victim believed to be oxycodone pills. Later that evening, Akintonde delivered two counterfeit oxycodone pills laced with fentanyl to S.J.G. After the meeting, Akintonde sent additional messages to S.J.G. through social media warning that he should only take one of the pills because they were “strong.” Akintonde further admitted that the pills he gave to S.J.G. caused his death. According to other filings in the case, S.J.G. died in his home sometime in the evening of February 28, 2019 or the early morning hours of March 1, 2019.
Special Agents from the Drug Enforcement Administration and a Task Force Officer from the San Diego Sheriff’s Department led the investigation into S.J.G.’s death and quickly identified Aktinonde as the source of the fatal pills. According to the sentencing memorandum, Akintonde offered various prescription pills for sale through different social media platforms. Akintonde also posted photographs of himself brandishing firearms and posted songs promoting the use and distribution of pharmaceutical pills.
“There is an epidemic of counterfeit fentanyl-laced pills in our community,” said Acting U.S. Attorney Randy Grossman. “To be clear: If you are a drug dealer selling pills, and those pills result in death, you will be held accountable for that death. It is no defense to say you didn’t know the pills contained fentanyl.” Grossman praised the prosecution team as well as the Drug Enforcement Administration’s Narcotics Task Force Team 10 and officials from the San Diego Sheriff’s Department and the San Diego County District Attorney’s Office for their excellent work on this case.
“As the number of drug overdose deaths continues to rise in San Diego County, the DEA San Diego Field Division has made investigating overdose deaths a priority,” said DEA Acting Special Agent in Charge Shelly S. Howe. “We are committed to bringing drug dealers like Olatunde James Temitope Akintonde, who poison our communities, to justice.”
This case is the result of ongoing efforts by the U.S. Attorney’s Office, the San Diego County District Attorney’s Office and the Drug Enforcement Administration to investigate and prosecute the distribution of dangerous illegal drugs—fentanyl in particular—that result in overdose deaths. The Drug Enforcement Administration created Narcotics Task Force Team 10 as a response to the increase in overdose deaths in San Diego County. Agents from Team 10 contributed to the investigation into S.J.G.’s death.
DEFENDANTS Case Number 21cr1178-JLS
Olatunde James Temitope Akintonde Age: 23 El Cajon, CA
SUMMARY OF CHARGES
Distribution of Fentanyl – Title 18, United States Code, Section 841(a)(1)
Maximum penalty: Twenty years in prison
AGENCY
Drug Enforcement Administration
San Diego Sheriff’s Department
San Diego County District Attorney’s Office
San Diego Resident Sentenced to Nearly 14 Years for Distributing Fentanyl that Resulted in 18-Year-Old’s DeathRead the Press Release
Assistant U. S. Attorneys Owen Roth and Lawrence A. Casper (619) 546-7710
NEWS RELEASE SUMMARY—November 22, 2021
SAN DIEGO—San Diego resident Brandon Jacob Shepherd was sentenced in federal court today to thirteen years and eleven months in prison for selling fentanyl that resulted in the death of an 18-year-old San Diego woman, identified in court records as P.E.R., in January of 2020. He received one month of custodial credit for time served in a local facility before being transferred to federal custody, for a total period of 168 months in custody.
Shepherd previously admitted that on the evening of January 14, 2020, he agreed to coordinate a sale of fentanyl to the victim with co-defendant Leon Chester Kolin III. That evening, Shepherd sold P.E.R. and Kolin a gram of fentanyl for $100 or $120, in the hotel room that Shepherd was staying in and using to distribute fentanyl. After the sale, Shepherd smoked fentanyl with P.E.R. and Kolin; P.E.R. overdosed at that time, but did not die. Kolin took P.E.R. home, with additional fentanyl resin that Shepherd provided. After P.E.R. left, Shepherd told a friend that she nearly “fell out,” meaning she had almost died. Days later, P.E.R. smoked some of the fentanyl resin provided by Shepherd, overdosing and dying. She was only eighteen years old at the time of her death.
Special Agents and Task Force Officers with the Drug Enforcement Administration led the investigation into P.E.R.’s death and identified Shepherd as the source of the fentanyl. Investigators subsequently searched Shepherd’s hotel room. There, they found packages containing fentanyl powder, counterfeit blue “M30” pharmaceutical tablets laced with fentanyl, digital scales bearing fentanyl residue, cash, and unused plastic baggies. They also found and arrested co-defendants Anthony Gascon and Christopher Barksdale, with whom Shepherd was engaged in an ongoing fentanyl distribution scheme. These two defendants, as well as Kolin, were sentenced prior to today.
“Tragically, fentanyl has again cut down the life of a bright and promising future here in our community, whose loss will forever be felt by her family,” said Acting U.S. Attorney Randy Grossman. “This Office will continue to aggressively pursue and prosecute anyone who seeks to profit, or even to further their own addiction, by peddling this poison. If someone dies from fentanyl you provide them, we will use every tool at our disposal to hold you responsible.” Grossman praised prosecutors Owen Roth and Lawrence Casper as well as the Drug Enforcement Administration’s Narcotics Task Force Team 10 and officials from partnering state and federal agencies for their excellent work on this case.
“The United States just recorded the highest number of drug-overdose deaths in a 12-month period, with over 100,000 Americans losing their lives,” said DEA Acting Special Agent in Charge Shelly S. Howe. “Individuals like Brandon Shepherd are fueling the fire of the drug epidemic. His sentencing today sends a stark reminder that if you choose to sell drugs and risk the lives of others, you will be held accountable.”
“Removing these dangerous and often deadly drugs from the streets is a priority for HSI, as it’s critical to preventing additional overdose deaths in our communities,” said Chad Plantz, Special Agent in Charge for HSI San Diego. “I am extremely proud of our HSI Special Agents and law enforcement partners for the success of this investigation and for making our neighborhoods safer.”
This case is the result of ongoing efforts by the U.S. Attorney’s Office, the Drug Enforcement Administration, Homeland Security Investigations, the Federal Bureau of Investigation, the San Diego Police Department, and the California Department of Health Care Services to investigate and prosecute the distribution of dangerous illegal drugs—fentanyl in particular—that result in overdose deaths. The Drug Enforcement Administration created Narcotics Task Force Team 10 as a response to the increase in overdose deaths in San Diego County. Agents from Team 10 contributed to the investigation into P.E.R.’s death.
DEFENDANT Case Number 20-CR-810-BAS
Brandon Jacob Shepherd Age: 26 San Diego, CA
SUMMARY OF CHARGES
Conspiracy to Distribute Fentanyl – Title 21, United States Code, Sections 841(a) and (b)(1)(C)
Maximum penalty: Twenty years in prison
Distribution of Fentanyl – Title 21, United States Code, Section 841(a)(1)
Maximum penalty: Twenty years in prison
Conspiracy to Distribute 40 grams or More of Fentanyl – Title 21, United States Code, Sections 841(a) & (b)(1)(B)
Minimum penalty of 5 years and maximum penalty of 40 years in prison
AGENCY
Drug Enforcement Administration
Homeland Security Investigations
Federal Bureau of Investigation
San Diego Police Department
California Department of Health Care Services
Office Manager Admits She Embezzled More Than $350,000 from Home Healthcare Agency and its Elderly ClientsRead the Press Release
Assistant U. S. Attorney Oleksandra Johnson (619) 546-9769
NEWS RELEASE SUMMARY – November 23, 2021
SAN DIEGO –A former office manager for a healthcare provider pleaded guilty in federal court today to one count of wire fraud. As part of her plea agreement, Ana Phimmasone, 37, of Chula Vista, admitted that from April 2016 until April 2018, she stole $352,594.47 from a local company that provides in-home care services for mostly elderly individuals, as well as from several of its clients.
According to court documents, Phimmasone held a trusted position that allowed her access to client accounts. Between April 2016 and August 2016, Phimmasone embezzled $25,958.60 by stealing checks that were issued by, or belonged to, her employer, and deposited them into her own bank account. Then, between December 2016 and April 2018, Phimmasone exploited her access to clients’ credit card information by billing them using PayPal, Venmo, Square and Apple Pay and diverting the money to her own accounts instead of using the funds to pay her employer for the in-home care services. To make the fraudulent charges appear legitimate, Phimmasone falsely told the victims that the healthcare provider changed its existing payment processing company to PayPal. After receiving the funds, Phimmasone spent the money or diverted the payments into her personal bank accounts.
To further disguise the illegal transfers and avoid detection, Phimmasone created a fraudulent PayPal account using the name and personal information of C.P., an 87-year-old individual. Phimmasone then used the fraudulent PayPal account to bill the other victims’ credit cards, causing victims to believe they were being charged for legitimate medical care. To conceal the fact that some clients’ payments were diverted to her own accounts, Phimmasone also created false invoices for victims J.B. and E.B., that fraudulently inflated the amount due which was payable based on medical care services provided to the victims.
“This defendant exploited the trust that patients place in their care providers,” said Acting U.S. Attorney Randy Grossman. “This successful prosecution demonstrates that our office continues to prosecute anyone who targets vulnerable members of the community.” Grossman commended the prosecution team and the United States Postal Inspection Service for their efforts to bring this offender to justice.
Inspector in Charge of the Los Angeles Division Carroll N. Harris stated, “The United States Postal Inspection Service remains unwavering in its strong stance to protect the elderly and other vulnerable populations against criminal acts. Postal Inspectors will aggressively investigate and prosecute these cases to the fullest extent of the law.”
As part of her guilty plea, Phimmasone agreed to pay $352,586.22 in restitution to her former employer and a number of individual victims. Phimmasone is set to appear for sentencing on March 7, 2022.
DEFENDANTS Case Number 21cr3262-H
Ana Phimmasone Age: 37 Chula Vista, CA
SUMMARY OF CHARGES
Wire Fraud, 18 U.S.C. § 1343
Maximum penalty:
Twenty years’ imprisonment and a maximum fine of $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greater
AGENCY
United States Postal Inspection Service
San Diego Man Sentenced to 156 Months’ Custody in Fentanyl Overdose DeathRead the Press Release
NEWS RELEASE SUMMARY – November 19, 2021
SAN DIEGO – Tony Davis was sentenced today in federal court by U.S. District Judge Cathy Ann Bencivengo to 156 months’ custody for supplying the heroin and fentanyl that led to the fatal overdose of a 41-year-old San Diego woman, on October 24, 2018.
According to his plea agreement, Davis agreed to sell more than 100 grams of what he knew to be heroin in the fall of 2018, and on October 24, 2018 he distributed heroin and fentanyl to another street-level drug dealer who in turn distributed the drugs that caused the victim’s death.
DEA Narcotic 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 the dealers and their sources of supply.
“As fentanyl continues to cut its devastating path in our community, we are committed to taking action to stop those who peddle this poison,” said Acting U.S. Attorney Randy Grossman. “We will use every available tool to hold traffickers accountable, confiscate their drugs and put an end to these tragic losses.”
“Overdose deaths continue to rise in San Diego County,” said DEA Acting Special Agent in Charge Shelly S. Howe. “The DEA and our law enforcement partners are attacking this problem by aggressively targeting the supply chain. It’s simple: If you provide or sell drugs that cause someone to die, we will come after you and your supplier.”
The United States Attorney’s Office is working closely with the San Diego County District Attorney’s Office, local police departments, 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.
Acting U.S. Attorney Randy Grossman praised prosecutors Stephen H. Wong and Mikaela L. Weber as well as DEA Team 10 investigators for their hard work on the case.
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 19-CR-0294-CAB
Tony Davis Age: 65
SUMMARY OF CHARGES
Distribution of Heroin and Fentanyl – Title 21, U.S.C., Section 841(a)(1)
Conspiracy to Distribute Heroin – Title 21, U.S.C., Section 841(a)(1) & 846
Penalties: Mandatory minimum five years in prison; maximum 40 years in prison
AGENCY
Drug Enforcement Administration
Federal Charges Filed following Record-breaking Seizure of Fentanyl and MethRead the Press Release
NEWS RELEASE SUMMARY – November 19, 2021
SAN DIEGO – Acting U.S. Attorney Randy Grossman announced federal drug charges today against Carlos Martin Quintana-Arias of Mexico, following the seizure yesterday of 17,584 pounds of methamphetamine and 388.93 pounds of fentanyl from a commercial trailer attempting entry at the Otay Mesa, California, Commercial Port of Entry. U.S. Customs and Border Protection (CBP) confirmed that both drug seizures would be the largest in each drug category, for both this year and last year, in the entire United States.
The Complaint alleges that on November 18, 2021, at approximately 8:18 p.m., Quintana-Arias, a Mexican citizen, applied for entry into the U.S. as the driver and sole occupant of a 2009 Kenworth Tractor pulling a 1996 Stoug trailer. Quintana-Arias’ manifest reflected the trailer contained automotive body parts. However, according to the Complaint, an X-Ray machine detected anomalies inside the trailer and a drug detection dog alerted to the rear door of the trailer.
Further inspection of the trailer’s contents revealed a few automotive body parts among 6,266 packages of drugs. Of the total drug packages, 6,106 packages contained a substance that field-tested positive for methamphetamine; these packages together weighed approximately 7,976.2 kilograms (17,584.33 pounds). The other 160 packages contained a substance that field-tested positive for fentanyl and weighed approximately176.42 kilograms (388.93 pounds).
“This is a staggering seizure that demonstrates the extent of our current fight against mass production of methamphetamine and fentanyl. But for the vigilance of our law enforcement partners, this record-breaking deluge of drugs would have caused incredible damage in our communities.” said Acting U.S. Attorney Randy Grossman. “We commend our partner agencies for their tireless work and dedication to preventing these dangerous and deadly drugs from entering our country.”
“This record-breaking commercial seizure exemplifies the joint efforts of CBP and HSI employees, who work tirelessly each day to protect our Ports of Entry from the threats posed by drug cartels and other transnational criminal organizations,” said HSI San Diego Special Agent in Charge Chad Plantz. “Countless lives will be saved because of this historic seizure of methamphetamine and fentanyl, but make no mistake: drug cartels strive to exploit our borders to further their criminal enterprises every day. The HSI Border Enforcement Security Task Force and the San Diego Imperial Valley High Intensity Drug Trafficking Area task force, in collaboration with CBP, remain vigilant in the mission to disrupt and dismantle every level of the cartels.”
“Customs and Border Protection is extremely fortunate to have CBP officers with phenomenal skills that enabled them to identify anomalies, leading to use of our technology to confirm and intercept the largest Methamphetamine and Fentanyl seizure nationally within the last two years” said Pete Flores, Director of Field Operations for the San Field Office. “Our vigilance is critical to our mission and we will continue to make our homeland and communities safer by making sure these dangerous drugs are intercepted.”
Quintana-Arias was arraigned today on the complaint alleging two violations of Title 21, United States Code, Sections 952, and 960. A detention hearing is scheduled for November 23, 2021 at 2:15 p.m.
DEFENDANT Case Number 21-mj-4574-AHG
Carlos Martin Quintana-Arias Residence: Mexico
SUMMARY OF CHARGES
Title 21, U.S.C., Sections 952 and 960
Importation of a Controlled Substance
Maximum penalty: Life in prison and a mandatory minimum of 10 years in prison; and $10,000,000 fine
AGENCIES
Homeland Security Investigations
U.S. Customs and Border Protection
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Officials Celebrate Five-Year Anniversary of Program that Gives Veterans a Second ChanceRead the Press Release
NEWS RELEASE SUMMARY – November 18, 2021
SAN DIEGO – Federal judges, prosecutors, defense attorneys, court personnel and veterans’ advocates gathered in U.S. District Court today to celebrate the five-year anniversary of a program that offers a second chance to veterans who are facing criminal charges.
The Veterans Diversion Program, which began in 2016, allows qualified veterans to plead guilty, and that plea is set aside until completion of the year-long program. During the year participants are continually evaluated by U.S. Pretrial Services and monitored by the court. That can involve drug, alcohol and mental health testing and treatment, plus employment and education counseling. Participants are required to actively seek or maintain employment or schooling and appear before a magistrate judge at least once a month to discuss progress and monitor compliance.
Since 2016, almost 60 veterans have participated in the Veterans Diversion Program. Thirty-three veterans have graduated so far, and 21 are currently participating. Not everyone graduates; the program is vigorous and requires hard work and accountability. The program continued despite the pandemic.
“I feel strongly that many who have sacrificed so much for their country should be afforded a second chance when possible,” said Acting U.S. Attorney Randy Grossman. “Because of their sacrifices, the country owes them a debt. And being part of the Veterans Diversion Program is our office’s small part in repaying that debt.”
Getting accepted into the program is not easy. The U.S. Attorney’s Office receives dozens of applications every year. Those applications are then presented to a committee of 10 federal prosecutors who are also veterans themselves, representing every service. One the committee votes to admit the veteran, that veteran’s application is forwarded to pretrial for an assessment. This is a complete team effort: The Veteran’s Administration, Pretrial Services, Courage to Call, Wounded Warrior, the mentors, the Court and defense attorneys.
Nine Veterans - from the Army, Navy, Marine Corps, Coast Guard, and the National Guard - graduated in 2021. They were all facing felony convictions for a range of crimes. Some faced mandatory minimum sentences of 10 years in prison. Like the graduates before them, these nine veterans worked hard, embraced treatment, and then saw their charges dismissed.
The Veterans Diversion Program has its roots in the U.S. Attorney’s Office’s original “Diversion Program,” a groundbreaking effort which was started in 2010 in San Diego County through a collaboration between a criminal defendant, a federal prosecutor, a criminal defense attorney, U.S. Pretrial Services and the U.S. District Court. Under that program, certain non-violent offenders who pleaded guilty to human smuggling charges were afforded the opportunity to go through the program and eventually erase their felony conviction. At the time the program was a first-of-its-kind.
Grossman thanked Magistrate Judges William Gallo and Andrew Schopler for dedicating many hours of their valuable time, in addition to their regular duties as Magistrate Judges, to hold monthly court hearings, roundtables, change of plea hearings, bond revocation hearings, and participate in e-mails and phone calls at all hours to help these veterans succeed.
Grossman said: “This program would not be successful without strong leadership and the unwavering commitment from multiple people and organizations who deserve special thanks. This includes Magistrate Judges Gallo and Schopler; Chief U.S. District Judge Dana Sabraw; as well as several dedicated people from the Veteran’s Administration, particularly Joy Villavicencio; Lori Garofalo and her team of outstanding Pretrial Services Officers including Zena Ajou and Justin Garcia; RanDee McLain and her teams from Courage to Call and Wounded Warrior Project; Assistant U.S. Attorneys Blair Perez and Jennifer McCollough; as well as the many defense attorneys including Jami Ferrera, Hector Tamayo, Gary Burcham, and Leila Morgan. Thank you all for making this program a success.”
Grossman thanked the Veterans Diversion Program supporters who attended today’s celebration: Dr. Robert Smith, VHA Regional Director; Dr. Vito Imbasioni, CalVet Secretary; Virginia Wimmer, CalVet Deputy Secretary- Women Veteran Affairs; Mental Health Systems Inc. CEO Jim Callaghan and Vice President Delrena Swaggerty.
International Wholesale Currency Dealer Sentenced for Criminal Operations; Forfeits $1.1 MillionRead the Press Release
Assistant U. S. Attorneys Michael A. Deshong, Daniel C. Silva, and Carl Brooker (619) 546-9290
NEWS RELEASE SUMMARY—November 16, 2021
SAN DIEGO — GPOMCT Grupo Empresarial S.A. de C.V., an international, Mexico-based wholesale currency dealer and currency exchange business, was sentenced in federal court yesterday to three years’ probation and ordered to forfeit $1.1 million for operating an unlicensed money transmitting business.
According to the government’s sentencing memorandum, GPOMCT used the U.S. financial system to process large amounts of currency that were at high risk for including criminal proceeds without registering as a financial institution in the United States or complying with U.S. anti-money laundering regulations or reporting requirements in order to gain a competitive advantage over its competitors.
Mexico’s anti-money laundering restrictions limit the amount of U.S. dollar deposits in Mexico, creating a need for individuals and businesses in Mexico with large amounts of U.S. currency—whether acquired legitimately or otherwise—to convert their U.S. dollars into Mexican pesos. This is a need that GPOMCT attempted to meet, the sentencing memo said.
Special Agents from Homeland Security Investigations (HSI) led the investigation into hundreds of transactions that involved GPOMCT importing large volumes of U.S. dollars into the United States between 2019 and 2021. Agents from Federal Deposit Insurance Corporation Office of Inspector General, U.S. Customs and Border Protection, and San Diego County Sheriff's Department assisted HSI in the investigation.
According to the sentencing memorandum, GPOMCT gained an unfair competitive advantage by accepting large amounts of U.S. dollars from its customers in Mexico in exchange for pesos, then importing its U.S. dollars into the United States. Through its subsidiaries, GPOMCT controls more than 40 locations in Mexico that handle an average of over $1 million in U.S. currency daily. Between September 2019 and September 2020, GPOMCT imported approximately 195 shipments of currency—each worth between $90,000 and $100,000 in U.S. dollars. GPOMCT further employed the services of an armored car company to collect currency for delivery to a third-party intermediary in Miami, Florida—all part of its money transmitting services to Mexican and U.S. customers seeking to convert U.S. dollars to pesos.
These services as a wholesale currency dealer meant GPOMCT operated as an unlicensed money transmitting business in the United States. By failing to register as a money transmitting business, GPOMCT did not file currency transaction reports with the Department of the Treasury, as required by the Bank Secrecy Act, nor did it subject itself to inspection by the Department of Treasury for compliance with these financial laws and regulations.
Acting U.S. Attorney Randy S. Grossman said, “Violating financial laws and regulations not only impairs the fight against international money laundering, tax evasion, and other crimes—these violations can be crimes themselves. This office expects the highest level of compliance from financial institutions in the Southern District of California.” Grossman praised the prosecution team at the U.S. Attorney’s Office and the agents from Homeland Security Investigations, Federal Deposit Insurance Corporation, U.S. Customs and Border Protection and San Diego County Sheriff’s Department for their excellent work on this case.
“When money services businesses fail to comply with federal statutes and regulations, they create an unacceptable risk for illicit funds to be laundered through our financial infrastructure,” said Chad Plantz, Acting Special Agent in Charge for Homeland Security Investigations in San Diego. “HSI is committed to investigating these violations to uphold the integrity of the U.S. financial system and protect our communities, as well as sending a resounding message to all currency exchange businesses, money services businesses, and financial institutions to comply and embrace robust anti-money laundering practices and regulations.”
“Financial crimes, such as those in this case, threaten the integrity of the U.S. financial system and allow money laundering, tax evasion, and other illicit transactions to spread across international borders, undermining the public’s faith in financial institutions. We appreciate the cooperation of our law enforcement partners in investigating this and other financial crimes,” said Special Agent in Charge Jeffrey D. Pittano of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC OIG).
DEFENDANT Case Number 21cr2120-JLS
GPOMCT Grupo Empresarial S.A. de C.V.
SUMMARY OF CHARGES
Operating an Unlicensed Money Transmitting Business—Title 18, U.S.C., Section 1960
Criminal Forfeiture—Title 18, U.S.C., Section 982
Maximum penalty: $500,000 fine or twice the gross gain or loss from the offense, whichever is greater; criminal forfeiture
AGENCY
Homeland Security Investigations
Federal Deposit Insurance Corporation Office of Inspector General (OIG)
U.S. Customs and Border Protection
San Diego County Sheriff’s Department
Almost $57 Million in Seized Cryptocurrency Being Sold for Victims of BitConnect FraudRead the Press Release
Assistant U. S. Attorneys Daniel C. Silva, Mark W. Pletcher, Lisa Sanniti and Carl Brooker
SAN DIEGO — Pursuant to court order, the U.S. Attorney’s Office for the Southern District of California, in conjunction with the U.S. Postal Investigative Service, will begin liquidation of approximately $57 million in cryptocurrency (at current estimated prices) seized from the top North American promoter of BitConnect. This liquidation is believed to be the largest single recovery of cryptocurrency for victims to date.
On September 1, 2021, Glenn Arcaro, 44, of Los Angeles, pleaded guilty for his participation in a massive conspiracy involving BitConnect, a cryptocurrency investment scheme, which defrauded investors from the United States and abroad of over $2 billion. The BitConnect scheme is believed to be the largest cryptocurrency fraud ever charged criminally.
As part of his plea agreement, Arcaro admitted that he earned no less than $24 million from the BitConnect fraud conspiracy, all of which, according to court documents, he has agreed repay to defrauded investors. The order entered on November 12, 2021, begins the process of making those victims whole by liquidating the fraud proceeds in Arcaro’s possession—the vast majority of which were in the form of cryptocurrencies, including Bitcoin, Ethereum, Litecoin, Dash, and several others.
Acting U.S. Attorney Randy S. Grossman praised the work of the prosecutors and law enforcement agencies handling this matter, including the FBI’s Cleveland Field Office, as well as, more locally, IRS-CI, the Financial Investigations and Border Crimes Task Force (the “FIBC”—a multiagency Task Force based in San Diego and Imperial Counties, funded by the Treasury Executive Office of Asset Forfeiture), who are investigating the matter, and the U.S. Postal Investigative Service in the Southern District of California who is liquidating the cryptocurrency.
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.
Arcaro’s sentencing is scheduled to occur on January 7, 2022, before U.S. District Judge Todd W. Robinson.
DEFENDANT Case Number 21CR2542-TWR
Glenn Arcaro Los Angeles, CA Age: 44
SUMMARY OF CHARGES
Conspiracy to Commit Wire Fraud—Title 18, U.S.C., Section 1349
Criminal Forfeiture—Title 18, U.S.C., Section 982
Maximum penalty: Twenty years in prison, $250,000 fine or twice the gross gain or loss from the offense, whichever is greater, forfeiture, and restitution
AGENCIES
FBI
IRS Criminal Investigation—Financial Investigations and Border Crimes Task Force
United States Postal Inspection Service
*The charges and allegations contained in an indictment or information are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Alleged Money Launderers for Mexican Cartels IndictedRead the Press Release
Assistant U. S. Attorneys Blanca Quintero (619) 546-7118 and Vivian Sapthavee (619) 546-7696
NEWS RELEASE SUMMARY – November 16, 2021
SAN DIEGO – An indictment was partially unsealed yesterday in federal court charging 29 alleged members of an international money laundering organization that is tied to the Sinaloa Cartel and Jalisco New Generation Cartel in Mexico.
During the past week, federal, state, and local law enforcement officials have arrested
21 defendants throughout San Diego, Calexico, and Bakersfield, California, who were allegedly involved in a sophisticated international money laundering scheme.According to the indictment and other public records, this Imperial Valley-based money laundering organization (MLO) laundered in excess of $32 million in drug proceeds from the United States to Mexico. The money laundering organization secured contracts with drug trafficking organizations in Mexico to pick up drug proceeds in cities throughout the United States, including Baltimore; Detroit; Los Angeles; Philadelphia; Boston; Denver; Chicago; New York City and numerous others.
Once the MLO received a contract, it communicated with couriers and bank account holders using burner phones and code phrases to coordinate bulk cash deposits into fictitious funnel business bank accounts, the indictment said. The defendants allegedly served as either couriers and/or funnel bank account holders. The couriers travelled from San Diego to cities throughout the country to receive the bulk cash after using photographs and codes to verify the meeting details. The bulk cash was typically concealed in trash bags, duffel bags, or shoeboxes. After the illicit cash proceeds were deposited into the fictitious funnel bank accounts, the monies were wired to personal bank accounts in Mexico where the money was then dispersed to the drug trafficking organizations.
“Today we have dealt a serious blow to this Imperial Valley-based international money laundering network with ties to the Sinaloa Cartel and the Jalisco New Generation Cartel,” said Acting U.S. Attorney Randy Grossman. “By dismantling this network, the Department of Justice reaffirms its unwavering commitment to bringing to justice those who corrupt our financial systems by laundering their illicit proceeds.” Grossman commended the prosecution team at the U.S. Attorney’s Office and our law enforcement partners with Homeland Security Investigations (HSI), Drug Enforcement Administration (DEA), and Internal Revenue Service (IRS) Criminal Investigation Division, for their excellent work on this case.
“This complex financial investigation is a perfect example of the unrelenting focus shown by HSI and its partners in the Costa Pacifico Money Laundering Task Force to stop criminal organizations attempting to launder illicit narco dollars,” said HSI San Diego Special Agent in Charge Chad Plantz. “The key to dismantling Drug Trafficking Organizations is disrupting the flow of illicit funds and attacking the money laundering element of the organizations. HSI will continue to work with its fellow law enforcement partners to protect U.S. financial infrastructure and use our comprehensive investigative authorities to stop criminal organizations engaged in drug trafficking and money laundering.”
Acting U.S. Attorney Grossman also praised federal, state, and local law enforcement for the coordinated team effort in the culmination of this investigation. Agents and officers from the United States Marshals Service, Customs and Border Protection, San Diego Sheriff’s Department, and state and local law enforcement from the Imperial Valley area also provided vital assistance for the investigation. Additionally, this investigation was conducted with support from the Treasury Executive Office for Asset Forfeiture (TEOAF) Third-Party Money Laundering (3PML) program and the High Intensity Drug Trafficking Area program.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks. This case was led by the HSI Costa Pacifico Money Laundering Task Force (CPTF), the DEA, and the IRS - Criminal Investigation. The CPTF is a cooperative partnership of federal, state and local law enforcement agencies focusing on domestic and transnational criminal organizations seeking to cleanse and conceal narcotics proceeds via bulk cash smuggling or through national and international financial systems.
An indictment is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
DEFENDANTS Case Number 21cr2546-GPC
Ricardo VALENZUELA-Gale Age: 25 Mexicali, Mexico
David DURAN-Rivera Age: 35 BOP Custody
Gerardo SILVAS Age: 33 Mexicali, Mexico (BOP Custody)
Jose Luis VARGAS-Espinosa Age: 30 BOP Custody
Robert ANZALDO Age: 28 Mexicali, Mexico
Diana Brenda RODRIGUEZ-Sandez Age: 23 Mexicali, Mexico
Christian FERNANDEZ Age: 29 Mexicali, Mexico
Julia Vianney SUAZO-Quirino Age: 23 Mexicali, Mexico
Adrian Rosett VELASQUEZ Age: 23 Mexicali, Mexico
Shantal MACIEL Age: 34 Mexicali, Mexico
Cesar Enrique CANTU Age: 29 Unknown
Nessie Aizu Age: 28 Mexicali, Mexico
Alejandro CABRERA-Herrera Age: 21 Unknown
Adriana Elizabeth VALENZUELA-Gale Age: 28 Mexicali, Mexico
Axel GUADALUPE Age: 20 Unknown
Fidel Alejandro ZAMARANO-Bernal Age: 33 Unknown
Derian SERVIN-Diaz Age: 25 Unknown
Erik D. GALAVIZ Age: 30 Mexicali, Mexico
SUMMARY OF CHARGES
Conspiracy to Launder Monetary Instruments (18 U.S.C. §§ 1956(a)(1) and (h))
Maximum Penalties: Twenty years in prison, $500,000 fine or twice the value of the monetary instrument or funds involved.
AGENCIES
Homeland Security Investigations
Drug Enforcement Administration, Narcotics Task Force
Internal Revenue Service - Criminal Investigation
Customs and Border Protection, Office of Field Operations
San Diego Sheriff’s Department
$56 Million in Seized Cryptocurrency Being Sold as First Step to Compensate Victims of BitConnect Fraud SchemeRead the Press Release
On Friday, U.S. District Judge Todd W. Robinson granted a request from the U.S. Department of Justice and the U.S. Attorney’s Office for the Southern District of California for authority to liquidate approximately $56 million in fraud proceeds seized from the self-described “number one promoter” of BitConnect, a cryptocurrency, who consented to the seizure. This liquidation is the largest single recovery of a cryptocurrency fraud by the United States to date.
According to court documents, on Sept. 1, Glenn Arcaro, 44, of Los Angeles, pleaded guilty to participating in a massive conspiracy to defraud BitConnect investors in the United States and abroad, in which investors were fraudulently induced to invest over $2 billion. The BitConnect scheme is the largest cryptocurrency fraud scheme ever charged criminally.
With entry of the court’s interlocutory sale order, the government will begin the process of seeking to make whole victims of the BitConnect scheme by selling the cryptocurrency and holding the proceeds in U.S. dollars. The government will maintain custody of the seized proceeds in cryptocurrency wallets and intends to use these funds to provide restitution to the victims pursuant to a future restitution order by the court at sentencing.
All potential victims of the BitConnect scheme are encouraged to visit https://www.justice.gov/usao-sdca/us-v-glenn-arcaro-21cr02542-twr for information on rights they may possess as a victim, the opportunity to submit a victim impact statement, and to identify themselves as a potential victim.
Arcaro is scheduled to be sentenced on Jan. 7, 2022, and faces a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI and IRS-Criminal Investigation are investigating the case. The U.S. Postal Inspection Service is assisting with the liquidation of the cryptocurrency proceeds.
Trial Attorney Kevin Lowell of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Daniel Silva, Mark W. Pletcher, Carl Brooker, and Lisa Sanniti of the Southern District of California are prosecuting the case. The Department of Justice’s Office of International Affairs provided indispensable assistance to the investigation.
Angel Dominguez Ramirez Jr. Admits to Leading Vast Drug-Smuggling, Money Laundering EmpireRead the Press Release
NEWS RELEASE SUMMARY – November 10, 2021
SAN DIEGO – Angel Dominguez Ramirez Jr. of Tamaulipas, Mexico, pleaded guilty in federal court today to drug and money laundering charges, admitting that he was the leader of a trafficking organization that transported ton-quantities of cocaine from South America to Mexico and into the United States.
According to court documents, the organization Dominguez headed called itself El Seguimiento 39, or El Seg 39. El Seg 39 obtained cocaine from sources of supply in South and Central America and used drug transportation cells in Central America to transport the cocaine into Mexico via boats, aircraft and commercial vehicles, where its transportation network moved cocaine across the U.S.-Mexico border at ports of entry in Texas and California and into cities within the United States. Dominguez purchased cocaine from sources of supply stretching from the Chiapas state of Mexico to Peru, including sources in Guatemala, Honduras, Costa Rica, Colombia, Venezuela, and Ecuador.
The charges to which Dominguez pleaded guilty stem from a long-standing investigation that led to more than 30 seizures totaling five tons of cocaine and over $9 million of drug-related proceeds. According to the government filing, Dominguez, a former United States Marine and dual U.S.-Mexican citizen, built his organization through cooperative alliances with the Beltran Leyva Organization (BLO), the Cartel de Jalisco Nueva Generacion (CJNG), the Sinaloa Cartel, the Cartel del Golfo (CDG), and the Los Zetas. His organization not only moved vast quantities of its own cocaine and marijuana into the United States, but it was also used by leaders of other Mexican cartels and drug trafficking organizations to move illegal drugs into the United States.
“Today’s guilty plea shows that this office, together with its law enforcement partners, will continue to hold accountable those who are importing huge quantities of dangerous drugs into this country,” said Acting United States Attorney Randy Grossman. Grossman thanked prosecutor Kyle Martin, Homeland Security Investigations, the Drug Enforcement Administration, and Customs and Border Protection for their excellent work on this case.
“Today’s guilty plea of Angel Dominguez Ramirez Jr. demonstrates the enormous value of strong international and domestic law enforcement partnerships,” said Chad Plantz, acting Special Agent in Charge of Homeland Security Investigations (HSI) in San Diego. “This successful prosecution is the culmination of years of investigative effort by HSI special agents and our partners, to uncover and dismantle Dominguez’s drug trafficking operations.”
“The DEA and our law enforcement partners will continue to target high-level individuals and organizations who contribute to addiction and death in the United States for their monetary gain,” said DEA San Diego Field Division Acting Special Agent in Charge Shelly S. Howe. “Today’s guilty plea is testament that collaborative efforts with our law enforcement partners are making a positive impact locally and nationwide by disrupting the drug supply chain.”
This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach.
DEFENDANT Case Number: 16CR1996-WQH
Angel Dominguez Ramirez Tamaulipas, Mexico
SUMMARY OF CHARGES
Conspiracy to Distribute Controlled Substances 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 and 5 years supervised release
Conspiracy to Launder Monetary Instruments, in violation of Title 21 U.S.C. §§ 1956(a)(2)(B)(i). Term of custody of up to 10 years, $500,000 fine
AGENCIES
Homeland Security Investigations
Drug Enforcement Administration
Customs and Border Protection
Department of Justice, Organized Crime Drug Enforcement Task Force
Department of Justice, Office of Enforcement Operations
Department of Justice, Office of International Affairs
Defendant Sentenced to 45 Months for Smuggling Event that Resulted in DeathRead the Press Release
Assistant U. S. Attorney Amanda T. Muskat (619) 546-6495
NEWS RELEASE SUMMARY – November 9, 2021
SAN DIEGO – Leobardo Soto-Toledo, a foot guide who led a group of 14 undocumented migrants into the United States through an underground drainage pipe during heavy rains, resulting in a death and a near-drowning, was sentenced in federal court yesterday to 45 months in prison.
As reflected in the court records, on January 29, 2021, the group of migrants entered the United States near Chula Vista, California, by either climbing over the international boundary fence or traversing through a drainage pipe that runs underground approximately one-quarter mile from Mexico into the United States. The storm drain is capped on the United States side by a mechanical grate, located approximately one-and-a-half miles east of the San Ysidro, California Port of Entry.
The defendant acted as a foot guide, leading the undocumented migrants into the United States by crossing the boundary fence close to the grate. Thereafter, the defendant entered the drainage pipe and guided the undocumented migrants behind him through the approximately 5-foot diameter pipe, eventually reaching the mechanical grate at the end, which can only be opened on the United States side. Stormy conditions caused water to rush through the drainpipe at a high speed. A digital intrusion device captured an image of individuals at the mouth of the grate.
According to court records, the defendant’s role was to travel to the grate and attempt to convince U.S. Border Patrol personnel to open the grate by yelling for help amidst the flowing water, allowing the migrants behind him to exit the open grate and further their entry into the United States.
When Border Patrol agents responded to the scene, they opened the grate, and the migrants flowed out on the rushing water. Border Patrol agents located one individual floating in the water who was deceased, and was later identified as the defendant’s brother and fellow foot guide. Border Patrol agents located another individual floating unconscious after traveling through the grate and managed to resuscitate her and transport her to a hospital.
“Human smuggling efforts that result in a death and endanger lives are tragic and deeply disturbing,” explained Acting U.S. Attorney Randy S. Grossman. “We will continue to use all means at our disposal to hold accountable those placing human beings at substantial risk of injury and death.” Grossman thanked prosecutor Amanda Muskat and the U.S. Border Patrol for their excellent work on this case.
“We are grateful for the resolve and perseverance that our law enforcement community demonstrated during the past several months, including that of the United States Attorney’s office,” said Chief Patrol Agent Aaron Heitke. “Collaboratively, the efforts of our men and women resulted in Leobardo Soto-Toledo’s arrest, conviction, and just sentencing.”
When handing down the sentence, U.S. District Court Judge Cynthia Bashant noted that this event was “a tragedy for all involved.” Judge Bashant held that the migrants were placed at substantial risk of death or great bodily injury and applied a sentencing enhancement due to the fatality caused by the defendant’s conduct.
DEFENDANT Case Number 21cr607-BAS
Leobardo Soto-Toledo Age: 54 Residence: Mexico
SUMMARY OF CHARGES
8 U.S.C. § 1324(a)(1)(A)(i) and (v)(II) – Bringing in Illegal Aliens and Aiding and Abetting (Counts 1, 12, and 17)
Maximum Penalties: Ten years in prison; $250,000 fine
INVESTIGATING AGENCY
United States Border Patrol
Online Vendor Sentenced in $5 Million Postage Fraud SchemeRead the Press Release
NEWS RELEASE SUMMARY – November 1, 2021
SAN DIEGO – Cuong H. Nguyen was sentenced in federal court today after pleading guilty to a conspiracy to engage in a wide-ranging postage counterfeiting, forging, and tampering scheme that, over the course of multiple years and more than 160,000 packages, deprived the U.S. Postal Service (“USPS”) of approximately $5 million of postage due and owing.
Special Agents from U.S. Postal Inspection Service, IRS Criminal Investigation, and the Financial Investigations and Border Crimes Task Force (the “FIBC”—a multiagency Task Force based in San Diego and Imperial Counties, funded by the Treasury Executive Office of Asset Forfeiture)—led the investigation. As he admitted at the sentencing hearing before Hon. Cynthia A. Bashant, Cuong digitally altered, counterfeited, forged, and tampered with various “postage evidencing systems”—i.e., postage meters. These postage meters are intended to expedite the delivery and shipment of USPS packages by allowing mailers to purchase and affix postage labels in advance of depositing them into the mail.
In sentencing Mr. Nguyen, Judge Bashant said, “The USPS provides a valuable service. Fraudulent acts like this will prevent us from having the postal service in years to come.” Nguyen primarily used the postage evidencing system known as Click-N-Ship® when sending packages of beverages and food products from his businesses in San Diego. When the USPS received the packages with labels that Nguyen and others had altered, forged, and counterfeited, they paid much less to the USPS than was owed, but the packages—approximately 162,221 between 2015 and 2019—were delivered anyways.
Acting U.S. Attorney Randy S. Grossman said, “I commend the work of the USPIS, IRS-CI, and the FIBC for unraveling this complex web of digital crime. This is a great example of how the U.S. Attorney’s Office will continue to work collectively with our law enforcement partners to pursue the most challenging investigations as we protect our nation’s resources, including the U.S. Postal Service.”
“With the U.S. Postal Service delivering almost 150 billion pieces of mail annually scammers mistakenly believe they can hide and profit from postage fraud,” stated Inspector in Charge Carroll N. Harris III of the U.S. Postal Inspection Service Los Angeles Division. “The U.S. Postal Inspection Service has over 246 years of defending the nation’s mail system. We remain steadfast in exposing scammers. Today’s sentencing reaffirms the commitment Postal Inspectors have in holding criminals accountable and ensuring the public trust in the mail.”
“Mr. Nguyen perpetrated a complex postal fraud scheme and enriched himself with funds stolen from the United States,” said Special Agent in Charge Ryan L. Korner of IRS Criminal Investigation’s Los Angeles Field Office. “IRS Criminal Investigation is proud to lead the FIBC and to work with our law enforcement partners to root out financial frauds and to protect our country’s critical infrastructure.”
As a result of the conspiracy, Nguyen underpaid $5,127,712.88 in postage to the USPS, resulting in net profits to Nguyen, his businesses, and others of $862,374.00. His sentence of 3 years’ probation includes the obligation to forfeit $862,374.00, as profits, proceeds, and property obtained directly or indirectly from the conspiracy.
DEFENDANT Case Numbers 21-CR-1131-BAS
Cuong H. Nguyen San Diego, CA Age: 37
SUMMARY OF CHARGES
Criminal Conspiracy – Title 18, U.S.C., Section 371
Maximum penalty: Five years in prison, forfeiture, and $250,000 fine
AGENCIES
United States Postal Inspection Service
IRS Criminal Investigation—Financial Investigations and Border Crimes Task Force
Chula Vista Couple Sentenced for Fraud Scheme Targeting Pregnant WomenRead the Press Release
Special Assistant U.S. Attorneys Lisa J. Sanniti (619) 546-8811 and Jeffrey D. Hill (619) 546-7924
NEWS RELEASE SUMMARY – October 26, 2021
SAN DIEGO – Melissa Alvarez Torres and Jose Luis Olmos Hernandez were sentenced in federal court today to 33 months and 40 months in prison, respectively, for stealing hundreds of thousands of dollars from pregnant women and using the money to buy multiple properties in Mexico, including a beachfront home in Nayarit.
The couple from Chula Vista pleaded guilty in July, admitting that during a four-year period, their healthcare fraud scheme to sell bogus insurance to pregnant women caused more than $1 million in losses to California’s Medi-Cal Access Program known as MCAP.
MCAP is a government health care program administered by the California Department of Health Care Services that provides working, middle-income California families access to affordable maternity and post-natal care. Alvarez and Olmos were very familiar with MCAP, twice utilized the program for their family.
According to court documents, beginning in 2016, Alvarez and Olmos used Facebook to fraudulently market private “insurance” under the name Seguros Americanos Embarazo (“American Pregnancy Insurance”). They targeted pregnant women living in Mexico and holding work or tourist visas permitting them to enter the United States. These women contacted Alvarez and Olmos through Facebook or WhatsApp after being referred by other women. Alvarez and Olmos falsely claimed that their “insurance” product would permit these pregnant women to give birth legally in the United States without risk to their visas.
The women, many first-time mothers dealing with high-risk pregnancies, hoped to access high quality American health care and knew that they could not lawfully use a public health program, and that they would lose their visas if they did so. Alvarez and Olmos falsely assured the pregnant women that their product was private insurance and instructed them on how to avoid any problems when crossing the border for medical appointments. Alvarez and Olmos charged each woman between $1,200 and $3,000 per pregnancy for the “insurance.”
Alvarez and Olmos have admitted that, in reality, they did not have private insurance to sell. They used the women’s personal identifying information to sign them up for MCAP benefits through the State of California without the knowledge or consent of the women. Alvarez and Olmos submitted hundreds of false applications and fraudulent supporting tax and employment documents to MCAP, falsely claiming that the women were California residents and therefore eligible for benefits. Alvarez also impersonated dozens of these women in phone calls to MCAP trying to get the fraudulent applications approved. Alvarez and Olmos thereby cost American taxpayers over $1 million in health care costs and profited by charging hundreds of thousands of dollars in fraudulent fees paid by the pregnant women.
Additionally, Alvarez has agreed to pay almost $22,000 in restitution to the State of California for Medi-Cal benefits she, Olmos, and their children received as a result of her concealing these fraud proceeds and properties she and Olmos owned in Mexico.
As part of their sentence, Alvarez and Olmos were ordered to forfeit $424,500 in criminal proceeds, and to pay more than $1.5 million in restitution to the State of California and 283 individual victims of their fraud.
This case is a result of a multiagency investigation initiated by the California Department of Health Care Services – Investigations Branch, pursuant to the Travel and Residency Enforcement Co-Op with the Social Security Administration and the United States Attorney’s Office for the Southern District of California, along with the Federal Bureau of Investigation.
“These defendants exploited families at their most vulnerable and defrauded our vital public health programs to line their pockets,” said Acting U.S. Attorney Grossman. “Our office is committed to protecting the American taxpayer and ensuring the integrity of safety net programs by prosecuting those who exploit them.” Grossman commended the exemplary work of prosecutors Lisa Sanniti and Jeffrey Hill and the federal and state agents who diligently pursued this case.
“Today’s sentencing of the defendants is evidence of the teamwork with our federal partners in stopping criminals defrauding California’s Medi-Cal program and, in turn, the residents of our state. I commend the personnel of the DHCS Investigations Branch, the FBI, and the US Attorney’s Office for their commitment and dedication in protecting the integrity of Medi-Cal,” said DHCS Director Michelle Baass.
“The defendants were driven by greed and devised an elaborate scheme to defraud the state and make a quick buck,” said FBI Special Agent in Charge Suzanne Turner. “Today, they found out the cost of their scheme. This case should serve as a warning – the FBI will continue to work with our state partners at the California Department of Health Care Services to detect and disrupt those who abuse government funded health care programs which ultimately puts the viability of those programs at risk.”
DEFENDANTS Case No. 20-CR-3335-GPC
MELISSA ALVAREZ TORRES Age 33 Chula Vista, CA
aka “Melissa Torres”
aka “Melissa A. Torres”
JOSE LUIS OLMOS HERNANDEZ Age 36 Chula Vista, CA
aka “Jose Luis Hernandez”
aka “Jose L. Hernandez”
aka “Jose Carlos”
aka “Carlos Garcia”
SUMMARY OF CHARGES
Conspiracy to Commit Health Care Fraud and Wire Fraud – Title 18, U.S.C., Section 1349
AGENCIES
State of California’s Department of Health Care Services – Investigations Branch
Federal Bureau of Investigation
Former Tribal Police Chief Admits to Stealing More than $300,000 from Local Tribe by Selling Fake BadgesRead the Press Release
Assistant U. S. Attorney Andrew J. Galvin (619) 546-9721
NEWS RELEASE SUMMARY – October 25, 2021
SAN DIEGO – Anthony Reyes Vazquez pleaded guilty in federal court today, admitting that he stole more than $300,000 from the Manzanita Band of the Kumeyaay Nation while serving as chief of the Manzanita Tribal Police Department.
According to his plea agreement, Vazquez admitted that he sold fake badges to buyers who made substantial payments to become members of the Manzanita Tribal Police Department and have privileges available to law enforcement officers, such as carrying concealed weapons.
From 2012 to 2018, Vazquez served as the Chief of Police for the Manzanita Tribal Police Department. The Manzanita Tribal Police Department, however, was not recognized by the Bureau of Indian Affairs or the State of California as a police department, and it did not have the authority to enforce federal or state laws, on or off the reservation.
In his plea agreement, Vazquez admitted that he and other tribal police officers recruited wealthy individuals in the Los Angeles area to become members of the Manzanita Tribal Police Department. These wealthy individuals often had little to no law enforcement experience before joining the police department. Vazquez and his recruiters asked these wealthy individuals – known as the “VIP Group” – to make large payments, ranging from $5,000 to $100,000, in exchange for membership in the Manzanita Tribal Police Department, which included a badge purporting to allow the holder to carry a concealed weapon. Members of the VIP Group were not expected to perform any law enforcement services for the police department and many never visited the Manzanita Band reservation.
As a result of this recruiting effort, dozens of individuals paid the recruiters and, in return, these individuals were made members of the Manzanita Tribal Police Department. Vazquez paid cash kickbacks or commissions to the recruiters and paid himself approximately $2,000 per month as purported reimbursement for travel expenses from his home to the reservation. In addition, Vazquez kept approximately $300,000 worth of donations from the VIP Group, which Vazquez admitted should have instead been given to the Manzanita Band. Vazquez did not disclose to the Manzanita Band that he was selling membership to the Manzanita Tribal Police Department to unqualified members in exchange for large sums of money or that he was paying himself out of money collected by recruiters.
As part of his plea, Vazquez also admitted that he suffered a felony drug conviction in 1992 and illegally possessed approximately twenty-four firearms while serving as Chief of Police of the Manzanita Tribal Police Department.
"This defendant sold law enforcement badges and jeopardized public safety,” said Acting U.S. Attorney Randy Grossman. “His manipulative and self-serving ploy also significantly undermined state laws governing the issuance of credentials to carry concealed weapons.” Grossman thanked prosecutors Andrew Galvin and Frances Lewis, as well as FBI agents, for their excellent work on this case.
“Anthony Vazquez, a convicted felon, collected hundreds of thousands of dollars in ‘donations’ from dozens of people - to line his own pockets - in exchange for giving them police credentials,” said FBI Special Agent in Charge Suzanne Turner. “This brazen scheme not only deprived the Manzanita Band of funding, but also caused numerous untrained ‘officers’ to believe they were authorized to carry concealed weapons on and off the reservation and enforce laws with little to no training.”
Vazquez is scheduled to be sentenced on January 24, 2022 at 8:30 a.m. before U.S. District Judge Gonzalo P. Curiel.
This case is being prosecuted by Assistant U.S. Attorneys Andrew Galvin of the Southern District of California and Frances Lewis of the Central District of California.
DEFENDANT Case Number 21-CR-3020-GPC
Anthony Reyes Vazquez Age: 49 Camarillo, CA
SUMMARY OF CHARGES
Theft Concerning Programs Receiving Federal Funds – Title 18, U.S.C., Section 666(a)(1)
Maximum penalty: Ten years’ imprisonment and $250,000 fine
AGENCY
Federal Bureau of Investigation
Imperial Beach Man Sentenced for Threatening and Tricking Young Girls into Sending Him Sexually Explicit MaterialRead the Press Release
Assistant U.S. Attorney Andrew Sherwood (619) 546-9690 or Assistant U.S. Attorney Mandy Griffith (619) 546-8970
NEWS RELEASE SUMMARY – October 20, 2021
SAN DIEGO – Kevin Brito of Imperial Beach was sentenced in federal court today to 15 years in prison for deceiving girls as young as 10 into making and sending him sexually explicit photos and videos of themselves.
Brito pleaded guilty on April 19, 2021 to two counts of Enticement of a Minor, admitting that he systematically targeted young girls on social media by reaching out to them and pretending to be a 12- to 14-year-old boy or girl. This included messaging with over 200 minor females online.
Brito tricked many of the young girls into thinking he was their boyfriend and then coerced them into sending him sexually graphic photos and videos. Brito told his victims to make and send more sexually explicit material and directed exactly what he wanted them to do in the material. When his victims tried to refuse, he told them that if they didn’t do what he said, he would send all the explicit material to their friends and families. At times, he followed through on those threats. He told his victims that each was his “sex slave.”
When interviewed by FBI agents, Brito admitted to communicating with one of the minor victims, receiving nude images of her, and threatening her so he could get more images. He also admitted that he knew she was 10 years old and engaged in similar sexually explicit chats with other young girls. Further, Brito said that he saved some of the files he received from the girls and sent them out to other random people.
“These young girls have been traumatized by the despicable actions of this predator,” said Acting U.S. Attorney Randy Grossman. “We will do everything legally possible to achieve justice for children who are sexually exploited.” Grossman thanked prosecutors Andrew Sherwood and Mandy Griffith and the FBI agents for their excellent work on this case.
“Unfortunately, cases such as this involving an adult coercing young girls to create and send sexually explicit images are on the rise. The defendant victimized hundreds of minors from behind his computer screen believing he was invisible to law enforcement,” said FBI Special Agent in Charge Suzanne Turner. “The FBI will continue its exhaustive work of rooting out those who prey on the most vulnerable of victims online. This case is another example of the great collaborative work among law enforcement agencies to hold criminals accountable. I would like to specifically thank local law enforcement for identifying the subject and referring him to the FBI to enable us to put an end to the criminal conduct of this serial child predator.”
Project Safe Childhood (PSC) is a nationwide federal initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by the U.S. Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. In the Southern District of California, the PSC Coordinator is assigned to the Violent Crimes & Human Trafficking Section.
DEFENDANT Criminal Case No. 21-CR-01479-DMS
Kevin Brito Age: 22, Imperial Beach, CA
SUMMARY OF CHARGE
Enticement of a Minor – Title 18, U.S.C., Section 2422(b)
Maximum penalty: Life in Prison; $250,000 fine
INVESTIGATING AGENCY
Federal Bureau of Investigation
U.S. Attorney’s Office and Law Enforcement Partners Address Surge in Violent Crime through Strategic Prosecutions and Community OutreachRead the Press Release
Assistant U. S. Attorneys Connie Wu (619) 546-8592 and Cindy Cipriani (619) 546-9608
NEWS RELEASE SUMMARY – October 19, 2021
SAN DIEGO – To address an increase in violent crime, the U.S. Attorney’s Office and its law enforcement partners in the Southern District of California have 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.
According to data released in July by the San Diego Police Department (SDPD), gang-related shootings increased 129 percent in the first half of 2021, compared to 2020, and more than 1,000 guns were recovered pursuant to criminal investigations. Responding to this spike, 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. Most of the defendants were charged with Dealing in Firearms without a license; Possession of Firearms by Prohibited Persons; or Possession of a Firearm in Furtherance of a Drug Trafficking Crime or Crime of Violence.
“Our overriding goal is to reduce violent crime strategically, rather than merely increasing the number of arrests and prosecutions,” said Acting U.S. Attorney Randy Grossman. “Together with our federal, state and local law enforcement partners, we continually direct our focus to the most dangerous people, those responsible for endangering neighborhoods and driving up the violent crime rate.”
“The Bureau of Alcohol, Tobacco, Firearms and Explosives is the lead federal law enforcement agency involved in investigations of firearm trafficking,” said ATF Los Angeles Field Division Special Agent in Charge Monique Villegas. “ATF’s highest priority is reducing gun-related violence. When firearms make their way into the criminal element, violence occurs. ATF’s goal is to reduce violent crime by restricting the flow of firearms to prohibited persons, violent criminals and across the border to Mexico. By focusing on firearms trafficking through intelligence-driven investigations, ATF aims to keeps guns out of the hands of those criminals pulling the trigger.”
“The FBI is committed to working with our law enforcement partners to root out violent, criminal groups who terrorize our communities,” said FBI Special Agent in Charge Suzanne Turner. “The FBI's multiple interagency task forces have proven to be well-versed in identifying, investigating, and mitigating those violent threats and taking guns off the streets to make our communities safer.”
“I’m proud to partner with the U.S. Attorney’s Office and our law enforcement partners to strategically address the spike in gang violence in San Diego,” said San Diego County District Attorney Summer Stephan. “The DA’s Office has seen gang homicide cases nearly triple in the last year. We want to be part of the solution by working with law enforcement partners to curb violent gang crimes, while also investing in prevention efforts with our community members to redirect our youth into positive and healthy lifestyles.”
“Now more than ever, it is essential that we work together to prevent and respond to violent crime. This partnership sends a message to would-be criminals that keeping San Diego safe is a priority,” said Chief David Nisleit. “I'd like to thank our longstanding community and law enforcement partners for joining us in this effort to fight violent crime.”
Consistent with the comprehensive strategy announced by the Attorney General and Deputy Attorney General in May 2021, the Southern District of California has taken several steps to get guns out of the hands of the most violent offenders and prevent violence in our communities. These efforts include firearm prosecutions initiated against dangerous felons known to be members of gangs. These gun prosecutions involve various types of firearms, and many of the defendants committed the firearm offenses while on probation or parole for prior crimes, including drug trafficking, carjacking, robbery, burglary, false imprisonment, and domestic violence. Two cases recently resulted in lengthy sentences:
- In August 2021, Jason John Clipper, aka “Smokey,” a member of the East Side San Diego criminal street gang with ties to the Mexican Mafia prison gang, was sentenced in federal court to 15 years in prison for unlawfully possessing a firearm, possessing methamphetamine and heroin with the intent to distribute, and possessing a firearm in furtherance of a drug trafficking offense. At the time of his arrest, San Diego County Probation officers found Clipper in possession of approximately 20 grams of methamphetamine, 8 grams of heroin, and a loaded firearm. Clipper was on Post Release Community Supervision for a previous narcotics and firearm conviction in the California Superior Court. (https://www.justice.gov/usao-sdca/pr/san-diego-gang-member-sentenced-15-years-prison-dealing-methamphetamine-and-heroin).
- In September 2021, Joseph Anthony Martino, a convicted felon with a long criminal history that prevents him from legally owning guns, was sentenced in federal court to 10 years in prison for kidnapping and possessing firearms. Martino admitted that on April 1, 2019, he held three people hostage at his Lakeside home, pointing loaded guns – including a fully automatic assault rifle - at their heads and threatening them (https://www.justice.gov/usao-sdca/pr/convicted-felon-sentenced-10-years-prison-kidnapping-and-possessing-firearms).
These cases are part of the DOJ’s initiative to reduce gun violence known as Project Safe Neighborhoods. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, 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.
To ensure our firearm prosecutions maintained strategic focus on the most significant threats to public safety, Acting U.S. Attorney Grossman and the district’s PSN Coordinator, Assistant U.S. Attorney Connie Wu, joined forces with the District Attorney’s Office Gangs Division leadership to convene state, local, and federal law enforcement agencies for the Combatting Gang Violence to Restore Public Safety Summit this past summer. This summit, which will now occur quarterly, is a collaborative effort to identify and address the most significant drivers of violent crime in our district.
In addition to individual firearm prosecutions, the U.S. Attorney’s Office has conducted a number of large-scale takedowns with federal and local law enforcement partners that have made a direct impact on public safety in San Diego.
- In April 2021, a federal grand jury indicted 47 people allegedly associated with illegal gambling establishments that were closely tied to gangs, drugs and violence and had become magnets for a wide variety of criminal activity. Many were charged with Felon in Possession of a Firearm and felon in possession of ammunition. In all, 35 people were arrested, and 44 firearms, more than 12 pounds of methamphetamine, $263,000 in cash, and 640 gambling machines were seized during the two-year investigation. Please see https://www.justice.gov/usao-sdca/pr/forty-seven-defendants-charged-illegal-gambling-and-drug-indictments.
- In May 2021, 23 documented gang members and associates were charged with heroin, methamphetamine and firearms trafficking. This yearlong investigation involved federal wiretaps, dozens of undercover drug and gun buys and extensive surveillance. Many of the defendants are documented members or associates of violent South Bay street gangs operating out of National City, San Ysidro, and elsewhere. Many of these gang have long-standing ties to the Mexican Mafia. In total, authorities seized 2.1 kilograms of methamphetamine, 160 grams of heroin, and nine firearms tied to these defendants during the investigation. Please see https://www.justice.gov/usao-sdca/pr/twenty-three-gang-members-charged-crackdown-south-bay-heroin-methamphetamine-and.
- In June 2021, 60 alleged members of a San Diego-based international methamphetamine distribution network tied to the Sinaloa Cartel were charged with drug trafficking, money laundering and firearms offenses. In addition to these arrests, law enforcement has seized more than 220 pounds of methamphetamine and other illegal drugs; 90 firearms; and more than $250,000 in cash. Please see https://www.justice.gov/usao-sdca/pr/sixty-defendants-charged-nationwide-takedown-sinaloa-cartel-methamphetamine-network.
The federal effort to fight violent crime is not limited to prosecutions. “We are using every tool – not just enforcement, but also prevention and intervention – to make our community safer,” Grossman said. “One of our greatest weapons in combatting violent crime is to combine proven law enforcement methods and expertise with the resources of credible “lived experience” messengers and trusted community organizations.”
To that end, the district’s Project Safe Neighborhoods Task Force has made an unprecedented investment in public safety by awarding more than $1 million in federal over the last two years for distribution to local law enforcement and community organizations to prevent gun violence, facilitate reentry, reduce gang membership, foster safer neighborhoods and research/measure program effectiveness. The most recent grants, approved by DOJ’s Bureau of Justice Assistance last week, include:
- The San Diego City Attorney’s Office received money to help fund its Gun Recovery Impact Program, known as GRIP, which proactively seeks Gun Violence Restraining Orders, a life-saving tool created by California’s “red flag” law to prevent predictable acts of gun violence by removing firearms from individuals who pose a threat to themselves or others. Following a hearing in open court, a judge can prohibit the individual from possessing or purchasing firearms or ammunition for at least one year.
- Rise Up Industries’ (RUI) Reentry Program opened in Santee in March 2016. It helps previously incarcerated, formerly gang-involved individuals to successfully reenter society; thereby reducing the gang population and the recidivism rate. RUI’s Reentry Program provides comprehensive services including employment, job-training, case management, tattoo removal, counseling, mentoring, education assistance, financial literacy, life skills training, and work ethic development. RUI pays full-time wages to Reentry Program members as they work their way through the program.
- San Diego Association of Governments, the regional clearinghouse for crime data, received a grant to enhance its tracking of crimes that involve firearms around the region. This would include the use of a firearm in violent crime and providing information regarding where these crimes are occurring, tracking calls for service related to the use of firearms, and interviewing arrestees regarding their use of firearms and ghost guns.
- Vista Community Clinic received a grant to support its “Resilience” program, which helps justice system-involved youth chart a more positive life course. The program serves teens in the City of Oceanside which faces challenges created by multiple gangs with hundreds of members, many of them minors.
The PSN Task Force awarded additional grants in prior months to several mentoring and/or reentry organizations, including Boys & Girls Club of Oceanside; Education COMPACT; El Centro Police Athletic League; the Imperial County Gang Intelligence Coalition; Inner City Athletics; Reality Changers; Star Pal; UPAC; Vista Community Clinic and Youth Empowerment. Moreover, the Kroc Institute for Peace and Justice received a research grant to recommend data collection protocols, measure program effectiveness, and research best practices for “lived experience” mentoring programs.
In addition to PSN grants, the Southern District of California runs two prevention programs that focus on character building and mentoring. Project LEAD – San Diego, an adaptation of the program started in Los Angeles, is an 8-week program designed to help fifth-grade students understand that the choices they make today can affect their lives forever. Since 2016, the U. S. Attorney’s office has recruited 286 volunteer teachers who have reached 2,816 students. Several local and federal agencies were involved in this effort in addition to the U.S. Attorney’s Office, including: the U.S. Coast Guard, DEA, the San Diego City Attorney’s Office, the U.S. Marshals Service, Customs and Border Protection, U.S. Secret Service, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Food and Drug Administration, San Diego Police Department, U.S. Probation, Pretrial Services, the State Department, Department of Corrections, Homeland Security Investigations, and the Internal Revenue Service.
While currently on hold due to the pandemic, for more than five years the office also ran the Success Agents mentoring program at Porter Elementary. At the Success Agents weekly workshop, law enforcement mentors worked in a fun and interactive way to help 4th and 5th grade students improve life skills, build confidence and promote a positive relationship with law enforcement. The program also supports families through resource referrals, parent meetings and holiday dinners offered by program partners.
The U.S. Attorney’s office is also a longstanding member of the Community Assistance Support Team (CAST), an organization that works to prevent gang-related gun violence and support victims. By building relationships and communicating directly with gang members, residents and law enforcement, CAST volunteers identify the sources of gun violence in specific neighborhoods and connect individuals with the help they may need, such as gang exit resources, mental health services or alternative methods to resolving conflicts. During the recent violent crime spike, the office supported and participated in CAST Season of Peace events calling for an end to gun violence.
- In August 2021, Jason John Clipper, aka “Smokey,” a member of the East Side San Diego criminal street gang with ties to the Mexican Mafia prison gang, was sentenced in federal court to 15 years in prison for unlawfully possessing a firearm, possessing methamphetamine and heroin with the intent to distribute, and possessing a firearm in furtherance of a drug trafficking offense. At the time of his arrest, San Diego County Probation officers found Clipper in possession of approximately 20 grams of methamphetamine, 8 grams of heroin, and a loaded firearm. Clipper was on Post Release Community Supervision for a previous narcotics and firearm conviction in the California Superior Court. (https://www.justice.gov/usao-sdca/pr/san-diego-gang-member-sentenced-15-years-prison-dealing-methamphetamine-and-heroin).
Two Indicted for Drug Trafficking and Hostage TakingRead the Press Release
Assistant U. S. Attorneys Mario Peia and Alexandra F. Foster (619) 546-9706/6735
NEWS RELEASE SUMMARY – October 15, 2021
SAN DIEGO – A federal magistrate judge denied bond today for one of two Mexican nationals indicted by a federal grand jury in connection with the kidnapping and death of a 19-year-old San Diego man in May of 2020.
The defendant, Wyatt Valencia-Pacheco of Tijuana, is charged along with fugitive Jonathan Emmanuel Montellano-Mora, also from Tijuana. They were indicted on June 3, 2021, for Hostage Taking Resulting in Death, Conspiracy to Take Hostages Resulting in Death, and Intentional Killing While Engaged in Drug Trafficking. The indictment was unsealed last week.
According to the indictment, Valencia and Montellano worked with others to arrange the killing of the victim, M.A.R., as part of their methamphetamine importation and trafficking activities.
The indictment further alleges that Valencia and Montellano worked with others to kidnap, detain and threaten the victim at a location outside the United States, in order to compel the victim’s family to pay with money or methamphetamine to gain his release. The victim was ultimately killed.
At Valencia’s detention hearing today before U.S. Magistrate Judge Allison H. Goddard, the government provided greater detail as to Valencia’s alleged involvement. The government identified the victim as a 19-year-old U.S. citizen who had been arrested twice before for strapping drugs onto his body and attempting to cross into the United States through a port of entry. The victim was tortured and killed over the theft of three pounds of methamphetamine, the government told the court.
At the hearing, the government provided the following chronology of the alleged crimes:
On May 28, 2020, the victim stole three pounds of methamphetamine from a drug trafficker connected to the defendants in Tijuana. Almost immediately after the theft, Valencia started sending the victim threats over Facebook Messenger, ordering the victim to return the drugs immediately or pay them $2,000. In Spanish, Valencia told the victim that he “fucked up” and now had to take responsibility, because “they only gave us two hours to pay for that shit.”
The victim asked for more time or a smaller payment, to which Valencia responded: “I don’t know how you’re going to do it, but I want it today.” The victim asked for Valencia to trust him and promised to pay later. Valencia replied, “I don’t give a fuck. You’ll see how I make you pay today.” Valencia even told others that he planned to kidnap the victim.
On May 29, 2020, approximately four hours after the victim was supposed to have crossed the drugs, Valencia was in conversation with a co-conspirator on Facebook Messenger, assuring the co-conspirator that he (Valencia) was in touch with the victim, and they would find him. Valencia assured his co-conspirator that the victim was scared.
About eleven hours later, at a little after 11 a.m. that same day, Valencia told a girlfriend that he was angry, because a guy stole “work” from him, and Valencia was looking for the guy. When asked why he was looking for the guy, Valencia answered, “because I’m going to kill him.” Valencia said he gave the guy until 5 p.m. to return and pay for the “work,” or else Valencia was “going to send people to his house … here and there … here I’m going to shoot it up.”
About an hour later, Valencia communicated with a co-conspirator to plan how best to kidnap the victim.
At 11:57 p.m. on May 29, 2020, three males forcibly took the victim from a hotel in Tijuana at gunpoint. The event was captured by hotel surveillance cameras. One of the kidnappers was wielding a gun, which he used to beat the victim.
In the early morning hours of May 30, 2020, the kidnappers began contacting the victim’s mother and stepfather to demand money (sometimes $2,000, other times $3,000) or methamphetamine. The hostage takers permitted the victim’s family to see him through FaceTime, as proof of life. The victim appeared bloodied and beaten.
During this same time, a co-conspirator asked Valencia, “Hey, dude, give us ideas where we can get him signed,” that is, where to kill the victim.
After a few minutes, and after insisting that he did not want to get further involved, Valencia answered the previous question about “where can we get him signed.” Valencia offered, “Smoke the guy by the dam, dude. Or by Cerro Colorado. … Or in the canal. It’s around the corner.” The co-conspirator asked, “Which canal?” To which Valencia responded, “The one by La Rapida (laughs)”
The family’s last contact with the victim occurred on May 30, 2020, at 12:30 p.m. No one has heard from or seen the victim since that time.
At the close of the hearing, U.S. Magistrate Judge Goddard detained Valencia, finding that there were no conditions of release which would guarantee his return to court. She detained the defendant based on the nature and circumstances of the criminal activity, the lengthy period of incarceration which the defendant faced, the defendant’s use of weapons, the fact that he would be subject to immigration removal to Mexico if he were released from custody, his significant ties outside the United States, and the weight of the evidence against him.
“The narcotic netherworld is full of extreme danger and tragedy, and this case is no exception,” said Acting U.S. Attorney Randy Grossman. “A misguided young man tangled with the wrong people and paid a terrible price, and now his family lives with the unspeakable horror of their loss. We will always seek justice for victims of drug-related violence that destroys families, communities and futures.” Grossman thanked prosecutors Mario Peia and Alexandra Foster, as well as the investigating FBI agents, for their excellent work on this case.
“The FBI will vigorously pursue justice for U.S. citizens who fall victim to violence regardless of where the crime occurs,” said FBI Special Agent in Charge Suzanne Turner. “The victim was killed over a $2,000 drug debt. May these charges serve as a warning to those who think violence against U.S. citizens committed outside of the United States exempts them from prosecution here; It does not.”
Valencia is next in court on December 16, 2021, at 9 a.m. before U.S. District Court Judge William Q. Hayes. Montellano has not yet been apprehended.
DEFENDANTS Case Number 21CR1683-WQH
Wyatt Valencia-Pacheco,
aka “JC HF,” aka “Jacob,” aka “Jacob Herrera” Age: 21 Tijuana
Jonathan Emmanuel Montellano-Mora,
aka “Che Cho” aka “Chori,” Age: 22 Tijuana
SUMMARY OF CHARGE
21 USC Sec. 848(e) (1) (A) - Intentional Killing While Engaged in Drug Trafficking
Maximum Penalty: Life or Death Penalty; Mandatory Minimum: Twenty years in prison
18 USC Sec. 1203 - Hostage Taking Resulting in Death
Maximum Penalty: Life or Death Penalty; Mandatory Minimum: Life in prison
18 USC Sec. 1203 - Conspiracy to Take Hostages Resulting in Death
Maximum Penalty: Life or Death Penalty; Mandatory Minimum: Life in prison
INVESTIGATING AGENCY
Federal Bureau of Investigation
Recidivist Maritime Drug Trafficker Sentenced to 200 Months in Prison for Operating a Semi-Submersible with 4,400 pounds of CocaineRead the Press Release
Special Assistant U.S. Attorney Nicole Bredariol (619) 546-8419 and Assistant U.S. Attorney Joshua Mellor (619) 546-9733
NEWS RELEASE SUMMARY – October 15, 2021
SAN DIEGO – Jose Rosario Segura Balentierra, a Colombian national interdicted by the United States Coast Guard on a semi-submersible vessel containing approximately 2,000 kilograms (4,4000 pounds) of cocaine, was sentenced on Tuesday in federal court to 200 months in prison for operating a semi-submersible vessel on the high seas twice in less than five years.
Balentierra was interdicted by United States Coast Guard Cutter BERTHOLF on a semi-submersible vessel with his three co-defendants on August 14, 2020, over 500 nautical miles from Central America.
The Defendants on the semi-submersible vessel failed to stop when ordered by the Coast Guard. The Coast Guard first tried warning shots, and then used disabling fire, shooting at the engines of the vessel to try to get the defendants to stop. When even this failed, one of the Coast Guard boarding officers jumped onto the moving vessel, took control of the engines, and removed the fuel lines to finally stop the vessel.
The Coast Guard observed two to three feet of water in the bottom of the semi-submersible vessel, indicating the defendants attempted to scuttle or sink the vessel to evade capture and seizure of its cargo. The semi-submersible vessel itself was stuffed with packages of cocaine, totaling over 2,000 kilograms (4,400 pounds) and worth over $35 million.
Balentierra was previously convicted in 2016 in the Southern District of Florida for Conspiracy to Operate and Embark on a Semi-Submersible Vessel Without Nationality with Intent to Evade Detection, and Operating and Embarking on a Semi-Submersible Vessel Without Nationality with Intent to Evade Detection. Similarly, in that case he was interdicted by the U.S. Coast Guard on a semi-submersible vessel approximately 300 nautical miles from Mexico. That semi-submersible vessel rapidly sunk to the bottom of the ocean floor and no drugs were recovered. He was sentenced to 41 months in custody and three years of supervised release. After serving his sentence he was deported to his home country of Colombia. In 2020, just over eighteen months after returning to Colombia, he engaged in this almost identical offense.
On July 14, 2021, Balentierra pleaded guilty to Possession of Cocaine with Intent to Distribute on Board a Vessel in violation of 46 U.S.C. § 70503 and Operation of a Semi-Submersible Vessel without Nationality in violation of 18 U.S.C. § 2285. On Tuesday he was sentenced to 182 months in custody and five years of supervised release on each of the charges, to run concurrently. He was also sentenced to 18 months in custody, to run consecutively, for violating the terms of his 2016 supervised release by engaging in trafficking cocaine. He was sentenced to a total custodial term of 200 months.
“The Pacific Ocean is not a freeway for drug traffickers,” said Acting U.S. Attorney Randy Grossman. “The sentence issued in this case sends a clear message that repeated maritime drug smuggling will not be tolerated in the Southern District of California.” Grossman thanked prosecutors Nicole Bredariol and Josh Mellor and the U.S. Coast Guard and San Diego Strike Force for their excellent work on this case.
“Due to the dedicated actions of the Coast Guard Cutter Bertholf’s commanding officer and crew, these smugglers have been brought to justice,” said Rear Adm. Brian Penoyer, the Eleventh Coast Guard District commander. “The Coast Guard kept $35 million worth of drugs off our streets, and we will continue to patrol the maritime domain to fight against the trafficking of narcotics.”
This case is the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership that brings together the combined expertise and unique abilities of federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, dismantle and prosecute high-level members of drug trafficking, weapons trafficking and money laundering organizations and enterprises.
DEFENDANT Case Number 20cr2671-LAB
Jose Rosario Segura Balentierra Age: 35 Colombia
SUMMARY OF CHARGES
Possession with Intent to Distribute Cocaine Onboard a Vessel Subject to the Jurisdiction of the United States – Title 46, U.S.C., Section 70503
Maximum Penalty: Life in prison and $10 million fine
Operation of a Semi-Submersible Vessel without Nationality, with Intent to Evade Detection –
Title 18, U.S.C., Section 2285
Maximum Penalty: Fifteen years in prison and $250,000 fine
AGENCY
United States Coast Guard
San Diego Strike Force
Organized Crime and Drug Enforcement Taskforce (OCDETF)Sinaloa Cartel Money Launderer Sentenced to 10 Years in PrisonRead the Press Release
Assistant U. S. Attorney Larry Casper (619) 546-6734
NEWS RELEASE SUMMARY – October 14, 2021
SAN DIEGO – A money launderer for the Sinaloa Cartel was sentenced in federal court yesterday to 120 months in prison and a $50,000 fine for laundering approximately $15 million from the sale of methamphetamine, cocaine, and heroin that were smuggled into the United States by the Sinaloa Cartel.
Bianca Acedo-Ojeda, 34, of Sinaloa, Mexico, was extradited from Mexico to San Diego in November 2019, and on March 10, 2021, she pleaded guilty to conspiracy to commit money laundering. According to court documents, Acedo-Ojeda agreed with others to and did arrange for the drug proceeds in the form of U.S. bulk currency to be smuggled into Mexico through ports of entry in Southern California in vehicles with hidden compartments. She also agreed with others to and did arrange for much of the U.S. bulk currency to be converted into Mexican pesos and transferred to drug traffickers.
“Those who launder funds in support of the Sinaloa Cartel’s efforts to flood our borders with deadly drugs will face justice in this district,” said Acting U.S. Attorney Randy Grossman for the Southern District of California. “Stopping the flow of funds to one of the most violent criminal organizations in the world is essential to disrupting their narcotics trafficking and other criminal efforts.”
“Money launderers are the lifeblood of criminal organizations,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “We will continue to vigorously prosecute money launderers associated with violent transnational drug trafficking organizations such as the Sinaloa Cartel. I want to thank the Government of Mexico for extraditing Acedo-Ojeda to the United States to face criminal charges. Through such partnerships, we will attack and work to dismantle dangerous drug cartels and their money laundering facilitators.”
“This investigation and prosecution serve as a prime example of how Homeland Security Investigations (HSI) and federal prosecutors work together to bring down those involved in large scale money laundering in support of international drug trafficking organizations,” said Special Agent in Charge Chad Plantz for HSI San Diego. “HSI will continue to identify and investigate criminal organizations who seek to exploit our borders in furtherance of their illicit activity – if you engage in illegal finance activity to aid drug cartels, you will be caught and prosecuted.”
Six other defendants, including Acedo-Ojeda’s brother, have previously pleaded guilty in this case and been sentenced (Omar Ayon-Diaz; Osvaldo Contreras-Arriaga; Joel Acedo-Ojeda; Cesar Hernandez-Martinez, Gibran Rodriguez-Mejia, and Oscar Rodriguez-Guevara). Another defendant, Robert Gallegos-Lechuga, pleaded guilty to conspiracy to commit money laundering and is pending sentencing. 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 and extraditio of Acedo-Ojeda in Mexico.
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.
DEFENDANTS Case Number 15cr950-BEN
Bianca Acedo-Ojeda Age: 34 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
Federal Jury Convicts San Diego Man for Fentanyl Distribution Resulting in DeathRead the Press Release
NEWS RELEASE SUMMARY – October 8, 2021
SAN DIEGO – Perry Edward Davis, aged 45, of San Diego, California was convicted by a federal jury yesterday of distributing the fetanyl that resulted in the death of Joshua Chambers, who was 25 years old when he overdosed. The verdict, delivered after less than two hours of jury deliberations, followed a trial before U.S. District Judge Larry A. Burns.
Chambers was one of three individuals who collapsed on December 21, 2019, at approximately 2:30 a.m., outside the QuarterDeck Cocktail Bar in El Cajon, with surveillance footage capturing the entire scenario. Paramedics and first responders quickly identified the mass-collapse as an opioid overdose and administered Narcan – a medication designed to reverse the effects of an opioid overdose – to all three subjects. Two of the individuals were revived and recovered, but Chambers never regained consciousness. He was declared deceased at approximately 3:39 a.m.
The investigation revealed that the three individuals had ingested what they believed was cocaine by snorting a “line” in Chambers’ vehicle shortly before each collapsed. Laboratory testing of a baggie found in the vehicle showed that the baggie contained cocaine mixed with fentanyl.
Through text messages, cell-site location data, witness interviews and other evidence, investigators determined that, shortly before the three collapsed, at approximately 1:45 a.m., Chambers and one of the individuals who later collapsed travelled to a location near Perry Davis’ residence in the Clairemont area, at which point Davis supplied Chambers with the baggie containing the deadly fentanyl mixture. Chambers and the other individual then returned to the parking lot of the QuarterDeck where they, along with a third person, used the substance. Investigators also learned that Davis was Chambers’ regular cocaine dealer and had sold cocaine to Chambers in the same location on other occasions. At trial, the defense contended that the evidence was insufficient to demonstrate that Davis had supplied Chambers with the baggie containing the deadly fentanyl mixture and that Chambers’ death may have resulted from a potentially deadly cocaine/alcohol mixture and not from the fentanyl.
A Board Certified Medical Toxicologist/Emergency Medine doctor called by the Government testified that the actual cause of Chambers’ death was the fentanyl and that, but for his use of the fentanyl, Chambers would not have died. Explaining his conclusion, the expert relied – in part – on the surveillance footage of the collapses, which he testified reflected classic symptoms of an opioid overdose. As to the source of the fentanyl mixture, the texts and phone calls between Chambers and Davis reflected that they met less than an hour before the collapses and witness testimony established that it was during that meeting that Chambers bought the baggie that he believed contained only cocaine.
“Davis endangered three young adults and caused a mass overdose when he sold Joshua Chamber cocaine laced with deadly fentanyl,” said Acting U.S. Attorney Randy Grossman. “While our dedicated first responders were able to save two lives, Davis must be held to account for the death of Joshua, whose family and friends will bear the devastating weight of his loss for the rest of the lives.” Acting U.S. Attorney Randy Grossman praised prosecutors Larry Casper and Shauna Prewitt as well as the El Cajon Police Department, the Drug Enforcement Administration and agents from Narcotics Task Force Team 10, a multi-agency team that was created in July 2018 to address drug overdose deaths in San Diego, for their efforts on this case.
Davis is set to be sentenced on January 10, 2022, by Judge Burns. This case was handled in court by Assistant United States Attorneys Larry Casper and Shauna Prewitt.
DEFENDANT Case Number 20-CR-2500-LAB
Perry Edward Davis Age: 45 San Diego, California
SUMMARY OF CHARGE TO WHICH GUILTY PLEA ENTERED
Distribution of Fentanyl Resulting in Death – Title 21 U.S.C. Section 841(a)(2) and (b)(1)(C)
Maximum Penalty – Mandatory Minimum of 20 years and a maximum of life
INVESTIGATING AGENCIES
El Cajon Police Department
Narcotics Task Force Team 10
Former U.S. Military Pilot Charged with Making False Statements on National Security Background Forms Regarding Foreign ContactsRead the Press Release
SAN DIEGO – A former U.S. Army helicopter pilot-turned-civilian-contractor appeared in federal court in San Diego yesterday to face charges that when he was required to make disclosures during national security background checks, he failed to disclose that he repeatedly met with - and received cash payments from - a Chinese national linked to intelligence services.
Shapour Moinian, 66 years of age from Mira Mesa, worked for many years for various defense contractors and also as a civilian contractor for the U.S. Navy and was subjected to multiple national security background checks. According to a complaint and disclosures made at his initial appearance and bond hearing, Moinian made false statements on these questionnaires, asserting repeatedly that he did not have any contact with foreign nationals.
In 2017, Moinian was communicating with a Chinese National, who posed as a recruiter on a job-services platform in a manner that both Germany and France have publicly identified as a technique used by Chinese intelligence services. Thereafter, Moinian traveled to China where in March 2017, while working at a cleared defense contractor on various projects, including a high-altitude, unmanned surveillance aircraft used by the U.S. Military and various allies. Upon returning, Moinian continued to communicate with his Chinese contact and update her on the progress of his work for her. In September 2017, Moinian again traveled overseas and met with his Chinese contact. Following this meeting, Moinian used a relative’s South Korean bank account to receive payment from his Chinese contact, which he then had wired to him in the United States.
In 2017, in the midst of his communications, visits, and working for his Chinese contact, Moinian completed a Questionnaire for National Security Background Investigations, where it is alleged he made knowingly and willfully materially false, fraudulent, and fictitious statements and representations, when he stated that he had not had close or continuing contact with a foreign national and had not been asked to work as a consultant, or consider employment by a foreign national, within the past seven years.
In 2018 after returning from another overseas meeting with his Chinese contact and her associates, where he received a cash payment, Moinian conducted searches using an internet search engine for sabotage, espionage, spying, and selling military information to a foreign country. In June 2019, Moinian requested a $20,000 payment from his Chinese contact, telling her that it was for a friend. In August of that year, Moinian traveled overseas to meet with his Chinese contact and others, where he received a large cash payment.
In 2020, when completing another Questionnaire for National Security Background Investigations, it is alleged Moinian made knowingly and willfully materially false, fraudulent, and fictitious statements and representations, when he reaffirmed that he had not had close or continuing contact with a foreign national and had not been asked to work as a consultant, or consider employment by a foreign national, within the past seven years.
Moinian, a former helicopter pilot for the U.S. Army, continued his work for various defense contractors while communicating and meeting with his Chinese contact and her associates, who provided him with cash payments that he smuggled back into the United States. These meetings, and payments, occurred in multiple overseas locations, including Hong Kong, Macau, Bali, and Taiwan. In addition to cash payments at these meetings, Moinian also received at least one other payment from his Chinese contact that he funneled through his relative’s South Korean bank account.
At the time of his arrest on October 1, 2021, Moinian was working for another cleared defense contractor and was slated to relocate to South Korea to work on a military aircraft being produced for that country. When he was arrested, Moinian had already provided many of his belongings to a company to transport to South Korea, and given notice that he was vacating his apartment the following week. Although these charges have been filed, the investigation is continuing by both the FBI and NCIS.
“The complaint alleges a disturbing failure to reveal information highly relevant to the background clearance process,” stated Acting United States Randy Grossman. “This office is committed to ensuring that individuals in sensitive national security positions are worthy of the trust placed in them.” Grossman commended the work of AUSA Fred Sheppard, DOJ’s National Security Division and the FBI and NCIS agents who diligently pursued this matter.
“This case serves as a stark reminder of the social media exploitation strategies Chinese intelligence agencies will utilize to target, recruit, and maintain contact with valuable foreign assets,” said FBI Special Agent in Charge Suzanne Turner. “Let this arrest serve as a deterrent to those who may consider hiding their foreign contacts in the hopes they can live a double-life and not get caught.”
“Mr. Moinian’s alleged false statements on security background forms about his contact with foreign nationals posed a significant threat to our national security,” said Special Agent in Charge Michelle Kramer of the NCIS Office of Special Projects. “This arrest should serve as a warning that NCIS and our law enforcement partners remain committed to rooting out any and all criminal attempts to compromise our nation’s national security interests. We sincerely thank our partners for their substantial efforts during this investigation to preserve U.S. warfighter superiority.”
This case was investigated by the Federal Bureau of Investigation and the Naval Criminal Investigative Service, and is being prosecuted by the U.S. Attorney’s Office for the Southern District of California and the Department of Justice’s National Security Division.
DEFENDANTS Case Number 21MJ3884
Shapour Moinian Age: 66 San Diego
SUMMARY OF CHARGES
Title 18, United States Code, Section 1001 (Materially false, fictitious, or fraudulent statement or representation)
Maximum penalty: Fine and prison term of up to five years.
INVESTIGATING AGENCIES
Federal Bureau of Investigation
Naval Criminal Investigative Service
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Brother and Sister Admit to Forced Labor SchemeRead the Press Release
NEWS RELEASE SUMMARY – September 30, 2021
SAN DIEGO – Cindy Mydung Luu and Jason Luu of Tierrasanta, siblings and naturalized United States citizens, pleaded guilty in federal court today to document servitude, admitting to a forced labor scheme where the victim was their Vietnamese cousin.
In a hearing before U.S. Magistrate Judge Karen S. Crawford, the defendants admitted to facilitating the travel of their cousin (identified in the plea agreements as “LX”) from Vietnam to the United States on a student visa in September 2014. Following her arrival, the defendants forced LX to work up to seven days per week for up to 12 hours per day, and she was required to forfeit all of her income. From December 2014 to March 2016, she worked for one of the defendants’ relatives at a San Diego business, and after obtaining her nail technician’s license, the defendants directed LX to quit college and work full time at their two nail salons, Eden Nails Lounge & Spa and Majestic Nail Salon, both located in Rancho Bernardo. The defendants also arranged a sham marriage to defendant Jason Luu in 2015 so that LX could obtain status as a legal permanent resident in the United States. Once she was granted legal permanent resident status, the defendants withheld LX’s “green card” from her as part of their forced labor scheme. Throughout this period of time, the defendants forced LX to work at their businesses by threatening LX with the loss of her immigration status. According to the plea agreements, the Department of Labor currently estimated that the defendants owe LX back wages, overtime, and liquidated damages in the amount of $279,467.52.
“Forced work is a form of modern-day slavery that exacts a significant financial and emotional toll. In addition to robbing victims of fair wages and freedom, this systematic coercion instills a sense of helplessness, humiliation, disorientation and confusion, often causing lasting trauma,” said Acting U.S. Attorney Randy Grossman. “The federal government will vigorously pursue those who exploit the vulnerable and force them to work to line their own pockets.” Grossman commended the excellent work of AUSA Seth Askins and former AUSA Chris Tenorio and the federal Homeland Security Investigations agents who pursued this case, which also received support from the U.S. Department of Labor.
Grossman encouraged those who come into contact with a worker who appears to be controlled or coerced to report their suspicions. Although there is no single way to identify victims of labor trafficking, some common patterns include:
- Isolating victims to prevent them from getting help. Their activities are restricted and they are typically watched, escorted or guarded by associates of traffickers. Traffickers may even “coach” them to answer questions with a cover story about being a student or tourist.
- Victims may be blackmailed by traffickers using the victims’ status as an undocumented alien or their participation in an “illegal” industry. By threatening to report them to law enforcement or immigration officials, traffickers keep victims compliant.
- People who are trafficked often come from unstable and economically devastated places as traffickers frequently identify vulnerable populations characterized by oppression, high rates of illiteracy, little social mobility and few economic opportunities.
- Women and children are often the most common victims of labor trafficking.
Individuals who suspect human trafficking are urged to call the National Human Trafficking Resource Center at 1.888.373.7888. This hotline helps members of the public determine if they have encountered victims of human trafficking, will identify local resources available to help victims, and will help coordinate with local social service organizations to help protect and serve victims so they can begin the process of restoring their lives.
The defendants are scheduled to be sentenced on December 17, 2021 at 9:00 a.m. before U.S. District Judge Jeffrey T. Miller.
DEFENDANTS Case Number 19CR4970-JM
Cindy Mydung Luu Age: 54 San Diego, CA
Jason Luu Age: 46 San Diego, CA
SUMMARY OF CHARGES
Document Servitude – Title 18, U.S.C., Section 1592
Maximum penalty: 5 years’ imprisonment and $250,000 fine
AGENCY
Homeland Security Investigations
Convicted Felon Sentenced to 10 Years in Prison for Kidnapping and Possessing FirearmsRead the Press Release
Assistant U. S. Attorney Joseph J.M. Orabona (619) 546-7951
NEWS RELEASE SUMMARY – September 24, 2021
SAN DIEGO – Joseph Anthony Martino, a convicted felon with a long criminal history that prevents him from legally owning guns, was sentenced in federal court today to 120 months in prison for kidnapping and possessing firearms.
In October 2020, Martino pleaded guilty and admitted that on April 1, 2019, he held three people hostage at his Lakeside home, pointing loaded guns – including a fully automatic assault rifle - at their heads and threatening them.
This case is part of the Department of Justice’s nationwide commitment to reduce gun crimes known as Project Safe Neighborhoods, or PSN. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders works together to identify the most pressing violent crime problems in the community and develops comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
“The use of a gun to commit a crime changes everything,” said Acting U.S. Attorney Randy Grossman. “The victims of gun-related crimes may be forever traumatized, and we remain focused on preventing and prosecuting these crimes because the stakes are so high.” Grossman thanked prosecutor Joseph Orabona as well as agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives and Sheriff’s investigators for their excellent work on this case.
On April 1, 2019, Martino confined three victims at his residence in Lakeside, California, and held them at gunpoint in order to confront one of the victims about a personal relationship, according to court records.
At first, Martino brandished a loaded Heckler & Koch, model HK-91, .308 caliber rifle, which was fully automatic, at two of the victims (a male and a female). While holding the female victim hostage at gunpoint in his residence, Martino caused the male victim to drive to the third victim’s residence to bring the third victim (female) back to Martino’s residence. When the third victim arrived at Martino’s residence, the male victim escaped. Martino held a loaded handgun to the heads of the two female victims to confine and coerce them to remain in his residence. Eventually, both female victims were able to leave Martino’s residence unharmed.
According to court records, San Diego Sheriff’s deputies and detectives from the Special Enforcement Detail and Crime Suppression Team executed a search warrant at Martino’s residence on July 3, 2019. Sheriff’s deputies and detectives recovered the Heckler & Koch, model HK-91, .308 caliber rifle. In addition, law enforcement located approximately 3,500 rounds of assorted ammunition, 19 different magazines, a ballistic body armor engraved with “U.S. Navy Security Forces,” various rifle upper rails, two lower AR-15 receivers, and smoke grenades.
On August 5, 2019, a complaint was filed against Martino for being a felon in possession of a firearm. On August 6, 2019, Martino was arrested and appeared in federal court. On August 14, 2019, the court ordered Martino to be detained without bail, and he has been in continuous custody since his arrest.
On October 5, 2020, Martino was arraigned on the charges in this case. At the time, Martino entered into a plea agreement to resolve his case. That same day, Martino entered a guilty plea to kidnapping and being a felon in possession of a firearm. As part of his plea agreement, Martino admitted his criminal past, which included felony convictions for DUI, possession of a silencer, possession with intent to distribute marijuana, and assault with force likely to cause great bodily injury.
Also, as part of his plea agreement, Martino agreed to forfeit all of the firearms, ammunition, rails, receivers, smoke grenades, and body armor. At sentencing, the Court entered an order of forfeiture.
“A convicted felon in possession of a firearm, inherently presents a danger to the community,” said Special Agent in Charge of ATF’s Los Angeles Field Division Monique Villegas. “While being prohibited from possessing a firearm, Martino found a way to acquire a firearm, then use it to violently terrorize his victims. The federal prosecution of this case demonstrates ATF’s dedication to reducing gun crime through Project Safe Neighborhoods and by partnering with our local and federal partners, in this case the San Diego County Sheriff’s Department and the U.S. Attorney’s Office.”
“The San Diego County Sheriff's Department is grateful to our local and federal agencies who helped bring justice to the victims in this case,” said Sheriff Bill Gore. “We are extremely appreciative of the U.S. Attorney's Office for their partnership and aggressive prosecution. We look forward to collaborating with our agency partners on future investigations as we continue to address gun violence throughout our county.”
Project Safe Neighborhoods (PSN) is a nationwide commitment to reduce gun crime in American communities by networking with existing local programs that target these issues and provide these programs with additional tools necessary to be successful. PSN has operated as the U.S. Department of Justice’s primary initiative focused on reduction of gun crime since May of 2001. PSN is a collaborative effort between federal, state, and local law enforcement and prosecutors.
DEFENDANT Case Number 19CR3387-JLS
Joseph Anthony Martino Age: 47 Lakeside, CA
SUMMARY OF CHARGES
Kidnapping – Title 18, U.S.C., Section 1201(a)(1)
Maximum penalty: Life in prison and $250,000 fine
Felon in Possession of a Firearm – Title 18, U.S.C., Section 922(g)(1)
Maximum penalty: Ten years in prison, $250,000 fine, and forfeiture of all firearms/ammunition
AGENCIES
Bureau of Alcohol, Tobacco, Firearms and Explosives
San Diego County Sheriff’s Department
Alleged Drug Cartel Leader ChargedRead the Press Release
Director of Media Relations Kelly Thornton (619) 546-9726
NEWS RELEASE SUMMARY – September 22, 2021
SAN DIEGO – A federal grand jury indictment was unsealed in San Diego today against alleged Mexican cartel leader Sergio Valenzuela Valenzuela in connection with his drug trafficking activities. Valenzuela Valenzuela was also the target of sanctions imposed today by the U.S. Department of the Treasury.
The indictment, returned on September 28, 2018, charges Valenzuela Valenzuela with Conspiracy to Distribute Controlled Substances Intended for Importation, Conspiracy to Import Controlled Substances, and Conspiracy to Distribute Controlled Substances. On September 28, 2018, the Clerk of the Court issued a sealed warrant for his arrest. Valenzuela Valenzuela remains a fugitive.
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) identified Sergio Valenzuela Valenzuela as a Significant Foreign Narcotics Trafficker pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act). Please see https://home.treasury.gov/news/press-releases/jy0367.
Based in Nogales, Sonora, Mexico, Valenzuela Valenzuela is alleged to be a Sinaloa Cartel plaza boss who traffics fentanyl and other drugs and operates at the direction of Sinaloa Cartel leader Ismael Zambada Garcia (a.k.a. “El Mayo”). Valenzuela Valenzuela allegedly leads a poly-drug smuggling organization responsible for the transportation and importation of multi-ton quantities of illicit drugs, including methamphetamine, heroin, and fentanyl, from Mexico into the United States.
In addition to Valenzuela Valenzuela, OFAC also designated seven other Mexican nationals for providing material assistance to Valenzuela Valenzuela. Specifically, the individuals include Valenzuela Valenzuela’s right-hand man, Leonardo Pineda Armenta, who is responsible for directing operations for him, and six cartel lieutenants who ultimately report to Valenzuela Valenzuela: Gilberto Martinez Renteria, Jaime Humberto Gonzalez Higuera, Jorge Damian Roman Figueroa, Luis Alberto Carrillo Jimenez, Meliton Rochin Hurtado, and Miguel Raymundo Marrufo Cabrera. Additionally, OFAC designated two companies in Mexico for being owned or controlled by Rochin Hurtado and Marrufo Cabrera. Specifically, they are Acuaindustria Narciso Mendoza, S.C. de R.L. de C.V. and Club Indios Rojos de Juarez, S.A. de C.V.
“This indictment and the Treasury Department sanctions announced today demonstrate that the Department of Justice, along with its law enforcement partners, will continue to target Sinaloa Cartel kingpins who import massive amounts of illegal drugs into the United States,” said Acting U.S. Attorney Randy S. Grossman. Grossman praised Assistant U.S. Attorney Matthew J. Sutton, the DEA case agents and all law enforcement partners for their excellent work on this case.
Acting U.S. Attorney Grossman also thanked Customs and Border Protection, the U.S. Marshals Service, the U.S. Department of Justice’s Office of Enforcement Operations and the Office of International Affairs, and the Department of Treasury’s Office of Foreign Assets Control for their ongoing assistance in this investigation.
“The DEA will continue to put forth extensive resources to target members of the Sinaloa Cartel, such as Sergio Valenzuela-Valenzuela, who allegedly flood our country with their poisonous drugs,” said DEA Special Agent in Charge John W. Callery. “This indictment, along with the recent OFAC designation of Valenzuela-Valenzuela and his Sinaloa Cartel associates, is testament that DEA’s targeted financial operations against this cartel are working and will negatively impact their operations.”
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 government’s case is being prosecuted by Assistant U.S. Attorney Matthew J. Sutton.
DEFENDANT Case Number: 18CR04222-DMS
Sergio Valenzuela Valenzuela, aka Gigio Age: 52 Sinaloa, Mexico
SUMMARY OF CHARGES
Conspiracy to Distribute Controlled Substances 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 and five years supervised release.
Conspiracy to Import Controlled Substances, 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 and five years supervised release.
Conspiracy to Distribute Controlled Substances, 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 and five years supervised release.
AGENCIES
Drug Enforcement Administration
Customs and Border Protection Office of Field Operations
Customs and Border Protection Office of Border Patrol
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
Department of Treasury, Office of Foreign Asset Control
Oceanside Police Department
San Bernardino County Sheriff’s Department
National City Police Department
Chula Vista Police Department
San Diego Police Department
San Diego County District Attorney’s Office
San Diego Law Enforcement Coordination Center
Interpol
*An indictment or complaint is not evidence that the defendant committed the crimes charged. The defendant is presumed innocent until the Government meets its burden in court of proving guilt beyond a reasonable doubt.
National Health Care Fraud Enforcement Action Results in Charges Involving over $1.4 Billion in Alleged LossesRead the Press Release
For Further Information, Contact:
Assistant U. S. Attorney Valerie Chu (619) 546-6750
SAN DIEGO – A strategically coordinated, six-week nationwide federal law enforcement action has resulted in criminal charges against 138 defendants, including 42 doctors, nurses, and other licensed medical professionals, in 31 federal districts across the United States for their alleged participation in various health care fraud schemes that resulted in approximately $1.4 billion in alleged losses.
The enforcement action includes criminal charges against four defendants here in the Southern District of California, involving more than $129 million in intended losses.
Nationwide, this action includes more than $1.1 billion in fraud committed using telemedicine, more than $29 million in COVID-19 health care fraud, more than $133 million connected to substance abuse treatment facilities, or “sober homes,” and more than $160 million connected to other health care fraud and illegal opioid distribution schemes across the country
"Federal dollars devoted to care for the sick and suffering in our community should not be diverted to line the pockets of greedy opportunists,” said Acting U.S. Attorney Randy Grossman. “Now more than ever, we recognize the importance of our health care system and the important federal programs that care for elderly and Americans with disabilities."
“This nationwide enforcement action demonstrates that the Criminal Division is at the forefront of the fight against health care fraud and opioid abuse by prosecuting those who have exploited health care benefit programs and their patients for personal gain,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “The coordinated law enforcement actions announced today send a clear deterrent message and should leave no doubt about the department’s ongoing commitment to ensuring the safety of patients and the integrity of health care benefit programs, even amid a continued pandemic. I am proud of the hard work and dedication of those throughout law enforcement who are working to safeguard our health care system and our nation.”
Today’s enforcement actions were led and coordinated by the Health Care Fraud Unit of the Criminal Division’s Fraud Section, in conjunction with its Health Care Fraud and Appalachian Regional Prescription Opioid (ARPO) Strike Force program, and its core partners, the U.S. Attorneys’ Offices, the Department of Health and Human Services Office of Inspector General (HHS-OIG), FBI, and the Drug Enforcement Administration (DEA), as part of the department’s ongoing efforts to combat the devastating effects of health care fraud and the opioid epidemic. The Southern District of California worked with the Justice Department’s Criminal Division and agents from HHS-OIG, FBI, and DEA in the investigation and prosecution of these cases.
Telemedicine Fraud Cases
The largest amount of alleged fraud loss charged in connection with the cases announced today – over $1.1 billion in allegedly false and fraudulent claims submitted by more than 50 criminal defendants in 11 judicial districts nationwide – relates to schemes involving telemedicine: the use of telecommunications technology to provide health care services remotely.
The continued focus on prosecuting health care fraud schemes involving telemedicine reflects the success of the nationwide coordinating role played by the Fraud Section’s National Rapid Response Strike Force, the creation of which was announced at the 2020 National Health Care Fraud and Opioid Takedown. The National Rapid Response Strike Force helped coordinate the prosecution of the telemedicine initiative, Sober Homes initiative, and COVID-19 cases that were announced today. The focus on telemedicine fraud also builds on the telemedicine component of last year’s national takedown and the impact of the 2019 “Operation Brace Yourself” Telemedicine and Durable Medical Equipment Takedown, which resulted in an estimated cost avoidance of more than $1.5 billion in the amount paid by Medicare for orthotic braces in the 17 months following that takedown.
COVID-19 Fraud Cases
Nine defendants in the cases announced today are alleged to have engaged in various health care fraud schemes designed to exploit the COVID-19 pandemic, which resulted in the submission of over $29 million in false billings.
In the Southern District of California, Roselia Kubeck and Rosario Gonzalez pleaded guilty to having approached residents of senior complexes in El Centro and Calexico, California, who were Medicare beneficiaries, and offering COVID-19 screening tests for the residents. The defendants knew at the time that the tests would not actually test for COVID-19 but would be a general respiratory pathogens screening panel that tested for the presence of several kinds of respiratory pathogens. They also took urine samples from the Medicare beneficiaries without explaining that the urine samples were not necessary to conduct a COVID-19 test. The defendants then completed requisition forms for tests on the nasal swabs and urine samples, and inaccurately indicated on the forms that the beneficiaries needed the respiratory tests because they were suffering from acute respiratory infections and needed urine tests because the beneficiaries were long-term users of opiates or had urinary tract infections. The laboratories that performed the tests subsequently submitted inaccurate and medically unnecessary claims to Medicare based on the inaccurate diagnoses that the defendants put on the requisition forms.
The law enforcement action today also includes criminal charges against five defendants across the country related to the misuse of Provider Relief Fund monies. The Provider Relief Fund is part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a federal law enacted March 2020 designed to provide needed medical care to Americans suffering from COVID-19.
The COVID-19 cases announced today build upon the success of the COVID-19 Health Care Fraud Takedown on May 26, a coordinated law enforcement action against 14 defendants in seven judicial districts for over $128 million in false billings. The law enforcement action and the cases announced today were brought in coordination with the Health Care Fraud Unit’s COVID-19 Interagency Working Group, which is chaired by the National Rapid Response Strike Force and organizes efforts to address illegal activity involving health care programs during the pandemic.
Sober Homes Cases
The sober homes cases are announced on the one-year anniversary of the first ever national sober homes initiative in 2020, which included charges against more than a dozen criminal defendants in connection with more than $845 million of allegedly false and fraudulent claims for tests and treatments for vulnerable patients seeking treatment for drug and/or alcohol addiction. The over $133 million in false and fraudulent claims that are additionally alleged in cases announced today reflect the continued effort by the National Rapid Response Strike Force and the Health Care Fraud Unit’s Los Angeles Strike Force, with the participation of the U.S. Attorney’s Offices for the Central District of California and the Southern District of Florida, to prosecute those who participated in illegal kickback and bribery schemes involving the referral of patients to substance abuse treatment facilities; those patients could be subjected to medically unnecessary drug testing – often billing thousands of dollars for a single test – and therapy sessions that frequently were not provided, and which resulted in millions of dollars of false and fraudulent claims being submitted to private insurers.
Cases Involving the Illegal Prescription and/or Distribution of Opioids and Cases Involving Traditional Health Care Fraud Schemes
The cases announced today involving the illegal prescription and/or distribution of opioids involve more than 13 defendants, including several charges against medical professionals and others who prescribed over seven million doses of opioids and other prescription narcotics. The cases that fall into more traditional categories of health care fraud include charges against 67 defendants who allegedly participated in schemes to submit more than $160 million in false and fraudulent claims to Medicare, Medicaid, TRICARE, and private insurance companies for treatments that were medically unnecessary and often never provided.
In the Southern District of California, Ronald Charles Green Jr. and Melinda Elizabeth Green were charged with conspiring to defraud TRICARE and Medicare out of more than $129 million. In connection with a compounding pharmacy fraud, the defendants allegedly engaged in a scheme involving the submission of false and fraudulent claims to TRICARE for expensive and medically unnecessary pain creams, scar creams and multi-vitamins, which were billed through compound pharmacies. Thereafter, the defendants allegedly launched multiple durable medical equipment companies, and carried out a scheme to defraud Medicare through the submission of false and fraudulent claims for expensive durable medical equipment which were induced through a system of illegal kickbacks. Out of the $129 million in claims, Medicare paid the defendants’ companies more than $69 million.
Prior to the charges announced as part of today’s nationwide enforcement action and since its inception in March 2007, the Health Care Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,600 defendants who have collectively billed the Medicare program for approximately $23 billion. In addition to the criminal actions announced today, CMS, working in conjunction with HHS-OIG, announced more than 15 payment suspensions to decrease the presence of fraudulent providers.
To view Assistant Attorney General Polite’s remarks, see https://www.justice.gov/opa/video/assistant-attorney-general-kenneth-polite-jr-delivers-remarks-health-care-enforcement.
The Southern District of California cases discussed herein were prosecuted by Assistant U.S. Attorneys Valerie Chu and Kevin Larsen and investigated by the Federal Bureau of Investigation, the Office of Inspector General for the United States Department of Health and Human Services, and the Defense Criminal Investigative Service. Grossman thanked the prosecutors and law enforcement agencies for working hard to achieve justice in these matters.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
*A complaint, information or indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
John Earnest Pleads Guilty to 113-Count Federal Hate Crime Indictment in Connection with Poway Synagogue Shooting and Mosque ArsonRead the Press Release
For Further Information, Contact:
Assistant U. S. Attorneys Peter Ko (619) 546-7359 and Shane Harrigan (619) 546-6981John T. Earnest of Rancho Penasquitos pleaded guilty in federal court today to a 113-count hate crimes indictment, admitting that he set fire to an Escondido mosque and opened fire in a Poway synagogue because he wanted to kill Muslims and Jews. The religiously- and racially-motivated attacks resulted in the murder of one person and the attempted murders of 53 others.
Earnest was indicted by a federal grand jury in May of 2019 on civil rights, hate crime, and firearm charges in connection with the murder of Lori Gilbert Kaye and the attempted murder of 53 others at the Chabad of Poway on April 27, and the March 24 arson of the Dar-ul-Arqam Mosque in Escondido.
“This nation stands with Lori Gilbert Kaye’s family and the survivors of these unspeakable acts of terror,” said Acting U.S. Attorney Randy S. Grossman. “We emphatically reject the defendant’s hate, racism and prejudice, and we hope the conclusion of this case brings some measure of comfort to all those affected by his heinous crimes.”
“The defendant entered a synagogue with the intent to kill all those inside because of his hatred for Jewish people, and days earlier used fire in an attempt to destroy another sacred house of worship because of his hatred for Muslims,” said Deputy Attorney General Lisa Monaco. “There is no place in American society for this type of hate-fueled violence. The Department of Justice will enforce hate crimes and anti-discrimination laws to the fullest extent of the law and will hold perpetrators accountable for these crimes, which inflict harm not only on individual victims, but on entire communities.”“This guilty plea will hopefully bring closure and start the healing process to all those impacted by the defendant’s cowardly acts nearly two-and-a-half years ago,” said FBI Special Agent in Charge Suzanne Turner. “The FBI stands steadfast with all of our law enforcement partners throughout the county to root out and defeat hate; It has no place in a civilized society.”
“The tragic shooting at the Chabad of Poway was shocking for our community,” said ATF Los Angeles Field Division Special Agent in Charge Monique Villegas. “Our condolences go out to the victims and their families who were affected by this horrific act. ATF remains committed to bringing individuals responsible for such acts to justice to ensure everyone can worship safely.”
According to the plea agreement and other 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 8-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.” Earnest wrote that he was inspired by the Tree of Life synagogue shooting in Pittsburgh, Pennsylvania, and the shootings at two mosques in New Zealand.
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.
According to the terms of the plea agreement, the United States and Earnest will jointly recommend a sentence of life in prison plus 30 years.
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. Grossman thanked the prosecutors and law enforcement agencies for working hard to achieve justice in this case.
DEFENDANT Case Number 19cr1850
John T. Earnest Age: 22 San Diego
SUMMARY OF CHARGES
Counts 1 - 54
Obstruction of Free Exercise of Religious Beliefs Resulting in Death and Bodily Injury; and Involving Attempt to Kill, Use of a Dangerous Weapon - 18 U.S.C. §§ 247(a)(2), 247(d)(1) and 247(d)(3)
Maximum penalty: Life in prison or death and $250,000 fine
Counts 55-108
Hate Crime Acts – 18 U.S.C. § 249(a)(1)(B)(i)(ii)
Maximum penalty: Life in prison and $250,000 fine
Count 109
Damage to Religious Real Property Involving Use of a Dangerous Weapon or Fire – 18 U.S.C. §§ 247(a)(1), 247 (d)(3)
Maximum penalty: Twenty years in prison and $250,000 fine
Count 110
Using and Carrying a Firearm During and In Relation to a Crime of Violence, Resulting in Death – Title 18, U.S.C., Sec. and 924(c) and 924(j)
Maximum penalty: Life in prison or death and $250,000 fine
Counts 111-113
Using, Carrying, and Discharging a Firearm During and In Relation to a Crime of Violence – Title 18, U.S.C., Sec. and 924(c)
Maximum penalty: Life in prison and $250,000 fine, mandatory minimum 10 years in prison
AGENCIES
Federal Bureau of Investigation
San Diego County Sheriff’s Department
San Diego Police Department
Bureau of Alcohol, Tobacco, Firearms and Explosives
San Diego County District Attorney’s Office
Escondido Police Department
Santa Barbara Man Indicted in San Diego for Killing his Children in MexicoRead the Press Release
Director of Media Relations Kelly Thornton (619) 546-9726 or [email protected]
NEWS RELEASE SUMMARY – September 8, 2021
SAN DIEGO – Matthew Taylor Coleman of Santa Barbara was indicted by a federal grand jury today for taking his two young children to Rosarito, Mexico and killing them.
Coleman, 40, allegedly killed the 2-year-old boy and 10-month-old girl on August 9, 2021. The indictment filed today charges Coleman with two counts of foreign first-degree murder of United States nationals. By law, the charges are eligible for the death penalty. The Attorney General will decide whether to seek the death penalty at a later date.
“There are no words to describe the profound grief that envelops an entire community when a child is murdered,” said Acting U.S. Attorney Randy Grossman. “The Department of Justice is determined to achieve justice for these victims and their loved ones.”
“The murder of a child is difficult to understand under any circumstances,” said Kristi K. Johnson, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “I’m proud of the quick investigative efforts by FBI Agents, the Santa Barbara Police Department, U.S. Customs and Border Protection and our Mexican counterparts which led to the arrest of Mr. Coleman as he entered the United States, and I look forward to delivering justice for the young victims and their family.”
Coleman previously was charged with the same crimes in a federal complaint filed in Los Angeles. Prosecutors intend to dismiss that complaint. Coleman is expected to make his initial court appearance on the indictment tomorrow in United States District Court in downtown Los Angeles. He will appear in United States District Court in San Diego, where the case will be prosecuted, at a date to be determined.
An affidavit in support of the criminal complaint outlined the investigation that started when Coleman’s wife contacted the Santa Barbara Police to report that her husband had left the couple’s residence in a Sprinter van, and she did not know where they had gone.
The next day, Coleman’s wife filed a missing persons report. Using a computer application, Coleman’s wife was able to determine that Coleman’s phone had been in Rosarito on Sunday afternoon, the affidavit states.
According to the affidavit, the same phone-locating service was used on Monday and showed that Coleman’s phone was near the San Ysidro Port of Entry at the U.S.-Mexico border, according to the affidavit. The FBI dispatched colleagues in San Diego to contact Coleman, who entered the United States in the Sprinter van without the children. When the children were not found, FBI agents contacted law enforcement officials in Rosarito and learned that Mexican authorities that morning had recovered the bodies of two children matching the description of Coleman’s children.
After further investigation, FBI agents took Coleman into custody at the San Ysidro Port of Entry.
The FBI, U.S. Customs and Border Protection and the Santa Barbara Police Department are investigating this matter. The Santa Barbara County District Attorney’s Office provided substantial assistance throughout the investigation.
The Department of Justice gratefully acknowledges the Government of Mexico, to include the Fiscalía General del Estado de Baja California, and the Secretaría de Seguridad Pública Municipal de Rosarito, for their extraordinary efforts, support, and cooperation during the investigation.
After reviewing the case, the United States determined that the most appropriate venue was in the Southern District of California. Assistant U.S. Attorney Peter Ko of the U.S. Attorney’s Office for the Southern District of California and Special Assistant U.S. Attorneys Kevin Butler, Joanna Curtis, and Billy Joe McLain of the U.S. Attorney’s Office for the Central District of California are prosecuting this case.
DEFENDANT CASE NUMBER 21CR2627
Matthew Taylor Coleman Age: 40 Santa Barbara, California
SUMMARY OF CHARGES
Title 18, United States Code, Section 1119 – Foreign First-Degree Murder of U.S. Nationals
Maximum Penalty – Death or life and a fine of up to $250,000
AGENCIES
The Federal Bureau of Investigation
United States Customs and Border Protection
Santa Barbara 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.
Marine Corps Colonel Pleads Guilty in International Navy Bribery and Fraud ScandalRead the Press Release
SAN DIEGO – U.S. Marine Corps Colonel Enrico DeGuzman pleaded guilty to a bribery charge today, admitting that he accepted more than $67,000 in extravagant meals, drinks, entertainment and hotel stays in Hong Kong, Singapore, and Tokyo from foreign defense contractor Leonard Glenn Francis.
DeGuzman admitted that in return for this and other things of value, he corruptly used his official position to assist 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. DeGuzman admitted that he endeavored to influence Navy ships into ports serviced by GDMA; he shared confidential Navy information with Francis in order to help GDMA; and he helped with evaluating and indoctrinating potential new Navy members into Francis’s cabal.
In one instance, DeGuzman joined Francis and others for a $40,000 meal that featured foie gras terrine, duck leg confit, ox-tail soup, and roasted Chilean sea bass, paired with expensive wine and champagne, followed by digestifs, cigars and overnights at the Shangri La - all at Francis’s expense.
DeGuzman 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. DeGuzman is the second of the Seventh Fleet defendants to plead guilty. The trial of the remaining defendants was scheduled to begin November 1, 2021, but yesterday it was postponed until February 7, 2022. The remaining defendants - who are accused of trading military secrets and substantial influence for sex parties with prostitutes and luxurious dinners and travel - include U.S. Navy Rear Admiral Bruce Loveless; Captains David Newland, James Dolan, Donald Hornbeck and David Lausman; Commander Stephen Shedd; and Commander Mario Herrera.
The overarching fraud and bribery case has resulted in federal criminal charges against 34 U.S. Navy officials, defense contractors and the GDMA corporation. So far, 27 of those have pleaded guilty, admitting collectively that they accepted millions of dollars in luxury travel and accommodations, meals, 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.
DeGuzman served on the Seventh Fleet Staff as the Fleet Marine Officer from July 2004 to July 2007. In this role, DeGuzman was responsible for coordinating the mission of the U.S. Marine Corps within the Seventh Fleet area of responsibility. From July 2007 to January 1, 2011, DeGuzman served as the Assistant Chief of Staff of Operations for U.S. Marine Corps Forces, Pacific, and thereafter, DeGuzman served in a civilian capacity as the Deputy Chief of Staff of Operations for U.S. Marine Corps Forces, Pacific.
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.
“With every extravagant meal, Enrico DeGuzman violated his duty to serve the United States with honor and integrity,” said Acting U.S. Attorney Randy Grossman. “Today those choices have caught up to him, and he has been held accountable.” Grossman commended the federal prosecutors and agents who diligently pursued this case.
“Mr. DeGuzman knowingly misused his position of trust as a senior U.S. Marine Corps officer to actively work with, and advocate for, a corrupt U.S. Navy contractor, while expecting and receiving lavish gifts in return, all at the expense of the U.S. Navy and the national security interests of the United States,” said Kelly P. Mayo, the Director of the Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS). “As this case underscores, DCIS will work tirelessly with its partners to root out corruption within the Department of Defense and its components in order to maintain the trust, faith, and precious resources of the American taxpayer.”
“Colonel DeGuzman put his personal interests ahead of protecting the nation,” said NCIS Director Omar Lopez. “NCIS and our law enforcement partners will continue to aggressively pursue any act of bribery and corruption involving Mr. Francis and GDMA or otherwise as these reprehensible acts diminish the operational readiness of the fleet and warfighter superiority of the USMC and U.S. Navy.”
According to his plea agreement, DeGuzman admitted to receiving the following bribes from Francis:
- On February 17, 2006, during the U.S.S. Blue Ridge's port visit to Hong Kong, DeGuzman and others dined and drank at Francis’s expense at the Petrus Restaurant at a cost of more than $20,000. To conceal and cover up their corrupt relationship, Francis created fraudulent receipts for the Petrus dinner that DeGuzman knew represented a small fraction of the actual cost of the dinner. While in Hong Kong, DeGuzman and others also stayed at the Shangri-La Hotel paid for, in part, by Francis.
- On March 9, 2006, during the U.S.S. Blue Ridge’s port visit to Singapore, DeGuzman and others dined with Francis at the Jaan Restaurant in Singapore. Prior to dinner, DeGuzman and others enjoyed entertainment and cocktails on the exclusive rooftop helipad. At dinner, enjoyed foie gras terrine, duck leg confit, ox-tail soup, and roasted Chilean sea bass, paired with expensive wine and champagne, followed by digestifs and cigars. The estimated cost to Francis was $40,000.
- On September 9, 2006, DeGuzman and others dined at Francis's expense at the New York Grill in Tokyo, Japan, and stayed at Francis's expense at the Park Hyatt Hotel, all at a total cost to Francis of approximately $30,000.
- During the U.S.S. Blue Ridge's port visit to Singapore from about February 22-27, 2007, Francis paid for the hotel expenses for DeGuzman and others at the Shangri-La Hotel, Singapore at a total cost to Francis of approximately $50,000. As part of this port visit, DeGuzman and others dined with Francis at Francis's expense on multiple occasions, including at the Blu Restaurant within the Shangri-La Hotel, and at the Jaan Restaurant atop the Shangri-La Hotel.
- On March 24, 2007, DeGuzman 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.
In a moment of candor encapsulating these corrupt relationships, just before DeGuzman departed Seventh Fleet assignment, he warned Francis in an email dated July 7 2007, “[U]nfortunately, I don't think I'll be able to influence people [in my next assignment] like I did there at 7th Fleet.”
DEFENDANT Case Number: 17-CR-0623-JLS
Enrico DeGuzman Age: 63 Las Vegas, Nevada
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
San Diego Doctor Pays $200,000 to Resolve Allegations that He Wrote Illegitimate Opioid PrescriptionsRead the Press Release
Assistant U.S. Attorney Dylan M. Aste (619) 546-7621
NEWS RELEASE SUMMARY – September 2, 2021
SAN DIEGO – San Diego area pain clinic doctor Brenton Wynn, M.D., has paid $200,000 to resolve allegations that he illegally prescribed opioids and other dangerous drugs to his patients, according to a settlement agreement signed by Dr. Wynn 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 Dr. Wynn illegally prescribed opioids to his patients in violation of the Controlled Substances Act.
The Controlled Substances Act provides that doctors may write prescriptions for opioids only for a legitimate medical purpose while acting in the usual course of their professional practice. The United States alleged that Dr. Wynn wrote opioid prescriptions to patients without a legitimate medical purpose and/or outside the usual course of his professional practice for more than five years. Dr. Wynn wrote prescriptions for fentanyl, oxycodone, hydromorphone, methadone, oxymorphone, and morphine.
The United States further alleged that Dr. Wynn prescribed at the same time a dangerous combination of opioids and benzodiazepines such as Xanax and Valium. Of even more concern, Dr. Wynn allegedly prescribed to some patients a combination of at least one opioid, one benzodiazepine and one muscle relaxant such as Soma. Drug abusers colloquially refer to the opioid, benzodiazepine, and muscle relaxant combination as the “Trinity” or “Holy Trinity” because of its rapid euphoric effects. These drug combinations are known to significantly increase the risk of addiction, abuse, and overdose.
The investigation exemplifies the Department of Justice’s willingness to investigate doctors who may be overprescribing opioids while treating patients who suffer painful conditions. Such doctors must still only prescribe opioids in accordance with recognized and accepted medical standards. Indeed, 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. Doctors and other health care providers should carefully track the potency of opioids prescribed 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 for providers 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, prescribing high dosages increases the risk that patients will divert opioids.
Based on its investigation, the United States alleged that Dr. Wynn prescribed large quantities of opioids to his patients that reached high daily MME levels, often even exceeding 120 MME. The United States further alleged that Dr. Wynn sometimes continued to prescribe dangerous opioids even when his patients’ urine drug test results showed that they were not taking the drugs Dr. Wynn prescribed.
“Even in our climate of heightened awareness of the dangers of opioids, some doctors continue to overprescribe opioids,” said Acting U.S. Attorney Randy Grossman. “This office will pursue those overprescribing doctors and bring them to justice. And as we have consistently demonstrated, we will continue to use all available tools to combat the serious opioid epidemic.” Grossman commended Assistant U.S. Attorney Dylan Aste and the Drug Enforcement Administration for their work on the investigation.
The DEA has a pending administrative action against Dr. Wynn (Docket No. 20-10) to revoke his ability to prescribe opioids and other controlled substances.
“While the vast amount of medical professionals prescribe opioids legitimately and are meeting their patients’ standard of care, DEA will vigorously pursue information from the public about the doctors who are not,” said DEA Special Agent in Charge John W. Callery. “DEA will always protect the public from doctors who put their patients in harm’s way.”
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.
Escondido Man Sentenced to 168 months in Fentanyl Overdose Death of Camp Pendleton MarineRead the Press Release
Assistant U. S. Attorneys Timothy Coughlin and Michael Kaplan (619) 546-6768/7927
NEWS RELEASE SUMMARY – September 1, 2021
SAN DIEGO – Kyle Anthony Shephard was sentenced in federal court today to 168 months in prison for supplying the fentanyl that led to the fatal overdose of a 25-year-old U.S. Marine corporal stationed at Camp Pendleton.
Shephard pleaded guilty in March, admitting that on the evening of January 27, 2017, he met with the Marine in Escondido and sold him four pills containing fentanyl that caused his death later that night or early the next morning. On January 28, 2017, the young man’s body was discovered on Camp Pendleton in his barracks room by fellow Marines who became concerned when he failed to respond to phone calls and knocks on his door.
The initial investigation was conducted by Naval Criminal Investigative Service (NCIS) agents, who continued to pursue leads for almost a year while the case remained unsolved. Shephard was arrested on December 13, 2017 by members of the San Diego Sheriff’s Department while executing a search warrant at a local casino. Found in Shephard’s hotel room were 1,362 pills containing fentanyl, thousands in cash, packaging material, and four cell phones. A co-conspirator arrested earlier in the evening admitted to law enforcement that she and Shephard were aware they were dealing one of the “deadliest drugs.”
The Marine’s mother attended the sentencing and asked a friend to read her prepared statement: “On January 29, 2017, we received the dreaded knock at the door, in the middle of the night. The Marines came to inform us that (her son) was found unresponsive in his barracks. I now suffer with PTSD, and when I hear anyone at my door, it’s a trigger and I automatically panic with my heart dropping into the ground. I cannot put into words how (her son’s) death destroyed our family. Our family is forever changed. Nothing is, or will ever be, the same. I miss (my son) with every cell and fiber of my being. The pain is unimaginable and excruciating.”
The mother said that her son “joined the Marines when he was 21 years old. He wanted to serve our country. He chose the Marines because he wanted to take the toughest and most challenging route. His desire was to join the Infantry Division to be on the front lines.”
She noted that he “had a true passion for animals. He was signed up for a trip to Africa when he finished his tour with the Marines, to protect wildlife from poachers. He was only six months away from completing his four years. After Africa he wanted to go to Veterinary School.”
At today’s sentencing hearing, U.S. District Judge Cynthia A. Bashant said, “Drug traffickers never consider the impact of their actions on families. Drug traffickers destroy lives even when it doesn’t result in death.” Judge Bashant noted that she wished a statement like the one made by the Marine’s mother could be made at every sentencing to make it clear the devastating impact drug trafficking has on families.
Acting U.S. Attorney Randy Grossman said: “Another young life has been lost and a family destroyed because of fentanyl. Drug dealers who know their actions could have this outcome, and yet they peddle their poison anyway, must pay a stiff price. We will continue to aggressively pursue all those up the chain of distribution in these cases to ensure justice is served.” Grossman had high praise for prosecutors Timothy Coughlin and Michael Kaplan, as well as San Diego Sheriff’s Department detectives and NCIS agents who pursued this investigation and prosecution for more than four years.
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 18cr5574-BAS
Kyle Anthony Shephard Age: 29 Escondido, California
SUMMARY OF CHARGES
Conspiracy to Possess with Intent to Distribute a Controlled Substance -Fentanyl – Title 21 U.S.C. Section 841(a)(1) and 846
Maximum Penalties – Twenty years in prison, at least four years of supervised release and $1 million fine.
INVESTIGATING AGENCIES
Naval Criminal Investigative Services
San Diego County Sheriff’s Department
Director and Promoter of BitConnect Pleads Guilty in Global $2 Billion Cryptocurrency SchemeRead the Press Release
Assistant U. S. Attorneys Daniel C. Silva, Mark W. Pletcher, Lisa Sanniti and Carl Brooker
NEWS RELEASE SUMMARY—September 1, 2021
SAN DIEGO—Glenn Arcaro of Los Angeles pleaded guilty today in federal court for his participation in a massive conspiracy involving BitConnect, a cryptocurrency investment scheme, which defrauded investors from the United States and abroad of over $2 billion. The BitConnect scheme is believed to be the largest cryptocurrency fraud ever charged criminally.
As admitted in documents entered today before U.S. Magistrate Judge Mitchell D. Dembin, Arcaro conspired with others to exploit investor interest in cryptocurrency by fraudulently marketing BitConnect’s proprietary coin offering and digital currency exchange as a lucrative investment.
Arcaro further admitted that he and others conspired to mislead investors about BitConnect’s purported proprietary technology, known as the “BitConnect Trading Bot” and “Volatility Software,” as being able to generate substantial profits and guaranteed returns by using investors’ money to trade on the volatility of cryptocurrency exchange markets. In truth, BitConnect operated a textbook Ponzi scheme by paying earlier BitConnect investors with money from later investors.
“Arcaro and his confidantes preyed on investor interest in cryptocurrency. As a result, a staggering number of individuals lost an enormous amount of money,” said Acting U.S. Attorney Randy S. Grossman of the Southern District of California. “The Department of Justice will continue to protect the investing public and scrutinize the burgeoning cryptocurrency industry. To those who would be the next in line to defraud the investing public, let this action by the Department of Justice stand as a stark cautionary tale. To the investing public, let this also serve as a cautionary tale to safeguard your money and invest it wisely.”
It was through the use of social media, Arcaro acknowledged in his plea agreement, that he and others made materially false and misleading statements, while concealing material facts, all to persuade investors that BitConnect was a lucrative investment. During the scheme, Arcaro posted videos that mocked those who questioned whether BitConnect had a Trading Bot and Volatility Software, doubted the true identity of BitConnect’s owner, and complained about losing their money in BitConnect.
According to the documents filed today, Arcaro sat atop a large network of promoters in North America, forming a pyramid scheme known as the BitConnect Referral Program. Arcaro earned as much as 15 percent of every investment into another part of the scheme—the BitConnect “Lending Program”—either from investors he recruited directly or those recruited by others beneath Arcaro in the pyramid. Arcaro further received portions of all investments from a concealed “slush” fund.
“Arcaro has accepted responsibility for his actions of defrauding thousands of individuals worldwide to invest in BitConnect,” said Special Agent in Charge Eric Smith of the FBI’s Cleveland Field Office. “He lined his pockets with millions of dollars, money from victims that believed their funds were being invested into a new cryptocurrency with a high rate of return. Those choosing to engage in financial criminal deception should know the FBI will not stop until all fraudsters are identified and held accountable.”
“Arcaro capitalized on the emergence of cryptocurrency markets, enticing innocent investors worldwide to get in early by promising them guaranteed returns, and exploiting the internet and social media to reach a larger pool of victims with greater ease and speed,” said Special Agent in Charge Ryan L. Korner of the IRS Criminal Investigation’s (IRS-CI) Los Angeles Field Office. “To conceal and further their scheme, Arcaro and his accomplices circumvented reporting regulations by the SEC and FinCEN, U.S. agencies that were created to protect investors and safeguard our financial systems. IRS-CI will pursue and root out these scams to protect investors and bring these financial fraudsters to justice.”
Arcaro admitted that he earned no less than $24 million from the BitConnect fraud conspiracy, all of which, according to court documents, he must repay to investors.
Acting U.S. Attorney Randy S. Grossman thanked the FBI’s Cleveland Field Office, IRS Criminal Investigation and law enforcement partners in India, Slovenia, and around the world for their efforts now and in the future, who assisted, and continue assist on this investigation. Grossman also thanked Assistant U.S. Attorneys Daniel C. Silva, Mark W. Pletcher, Lisa Sanniti, and Carl Brooker and Trial Attorney Kevin Lowell of the Criminal Division’s Fraud Section who are handling this investigation. The Criminal Division’s Office of International Affairs provided significant assistance in this matter.
In a parallel action, the U.S. Securities and Exchange Commission today announced civil charges against Arcaro and 3 others in connection with the same conduct.
Sentencing is scheduled to occur on November 15, 2021 at 9:30 a.m. before U.S. District Judge Todd W. Robinson.
If you believe you are a victim of this fraud, please contact the FBI at [email protected].
DEFENDANT Case Number 21CR2542-TWR
Glenn Arcaro Los Angeles, CA Age: 44
SUMMARY OF CHARGES
Conspiracy to Commit Wire Fraud—Title 18, U.S.C., Section 1349
Criminal Forfeiture—Title 18, U.S.C., Section 982
Maximum penalty: Twenty years in prison, $250,000 fine or twice the gross gain or loss from the offense, whichever is greater; forfeiture and restitution
AGENCIES
FBI
IRS Criminal Investigation
*The charges and allegations contained in an indictment or information are merely accusations, and the defendants are considered innocent unless and until proven guilty.
U.S. Attorney’s Office Recognizes Opioid Awareness Month; Highlights Enforcement and Outreach EffortsRead the Press Release
Assistant U. S. Attorneys Larry Casper, Dylan Aste and Cindy Cipriani (619) 546-9608
NEWS RELEASE SUMMARY – August 31, 2021
SAN DIEGO -- On International Overdose Awareness Day, an annual commemoration designed to raise awareness of overdose prevention and reduce the stigma of drug-related deaths, Acting U.S. Attorney Randy Grossman again warned the San Diego community about the serious fentanyl crisis and advocated an “all of society” approach to countering overdoses.
“We are losing far too many lives to fentanyl, and the age of victims is getting younger, compounding the tragedy,” Grossman said. “Just this past weekend, a San Diego teenager died due to a suspected fentanyl overdose from a counterfeit pill. The public needs to realize that there is no such thing as a ’safe’ street drug -- just one pill can kill.”
Grossman noted that the U.S. Attorney’s Office and the San Diego County District Attorney’s Office are working closely with the Medical Examiner’s Office and law enforcement partners on overdose cases to trace the origin of deadly drugs and build cases against suppliers. Under federal law, sellers and suppliers of drugs that cause death or serious bodily injury face a stiff penalty -- a 20-year mandatory minimum sentence. The U.S. Attorney’s Office has charged approximately 30 defendants in fentanyl overdose death cases to date.
Grossman emphasized that “federal prosecutors are leaving no stone unturned to hold peddlers of fentanyl accountable. Tomorrow, Kyle Anthony Shephard will be sentenced for supplying the fentanyl that caused the fatal overdose of a 25-year-old United States Marine. On Friday, August 27, a federal jury returned a verdict -- the first in a mandatory minimum case involving counterfeit pills -- that will result in a 20-year sentence for Jahvaris Lamoun Springfield, who sold a 26-year-old veteran the fentanyl pills that resulted in his death.
“These overdose prosecutions seek to accomplish three goals: Deter the distribution of illegal drugs, send a clear message that traffickers of deadly poison will face serious repercussions, and provide a measure of closure and justice to those faced with devastating personal loss,” Grossman said.
Experts report that fentanyl is 50-100 times more powerful than morphine and so dangerous that in its purest form, even a very small amount can be deadly. San Diego County officials report that fentanyl overdose deaths surged during the pandemic and are expected to reach as high as 700 this year, a staggering increase over 2019, when 152 individuals died from fentanyl overdoses; in 2020, the 2019 number more than tripled to 461.
Grossman emphasized that, in the face of this crisis, “law enforcement is just one part of the solution. We need an all of society approach. As a community, we must consider ways that we can all play a role in furthering the public understanding that substance abuse disorder is a disease that warrants treatment, resources, and positive collective action.”
In addition to prosecuting opioid dealers and smugglers, the U.S. Attorney's Office raises awareness of harm reduction, prevention and education efforts, through Opioid Coordinators Larry Casper and Dylan Aste, and Outreach Director Cindy Cipriani, who Co-Chairs the San Diego Prescription Drug Abuse Task Force. The U.S. Attorney’s Office also coordinates a quarterly Fentanyl Working Group, which brings together more than 100 law enforcement officers to share trends and best practices to combat the fentanyl scourge in this district.
Finally, the U.S. Attorney’s Office co-sponsors a biannual summit that convenes hundreds of leaders to focus on sharing information, reducing stigma, facilitating treatment, and implementing innovative evidence-based harm reduction prevention strategies. This year’s virtual Western States Opioid/Stimulant Summit, scheduled for November 4-5, 2021, will bring multiple disciplines together to address every aspect of the opioid crisis. National Institute of Drug Abuse Executive Director Nora Vokow, M.D., and Acting ONDCP Director Regina LaBelle will be featured speakers, along with dozens of leaders from the prevention, public health, treatment and law enforcement communities.
Grossman urged those struggling with a substance use disorder and their family members to talk to a doctor or pharmacist about Naloxone, which can reverse an opioid overdose.
To learn how to assist a person who is overdosing, including how to administer Naloxone, please see:
https://www.sandiegorxabusetaskforce.org/naloxone.
To obtain information about treatment, see the resources at the PDATF Treatment website:
https://www.sandiegorxabusetaskforce.org/treatment.
Drug Trafficker who used Teens as Couriers Sentenced to 85 MonthsRead the Press Release
Assistant U.S. Attorney Meghan E. Heesch (619) 546-9442
SAN DIEGO – A Tijuana-based drug trafficker who used teens as drug couriers was sentenced in federal court today to seven years in prison and a $50,000 fine for his leadership role in coordinating the movement of large quantities of cocaine, heroin, fentanyl, and methamphetamine to San Diego from Mexico.
Osvaldo Medivil-Tamayo, 22, pleaded guilty in August 2020 to conspiracy to import and conspiracy to distribute federally controlled substances. In his plea agreement, Mendivil admitted he was “the leader of a drug distribution cell based in Tijuana” and that he used high school students as drug couriers to move drugs through San Diego ports of entry.
Mendivil also admitted that he “involved individuals less than 18 years of age in crossing drugs.” He admitted that he and his co-conspirators “specifically recruited high school students who crossed through the San Diego Ports of Entry daily. Mendivil knew that these individual[s] were minors as they hid narcotics on their persons, in backpacks, and in vehicles as they crossed into the United States.” According to court filings, Mendivil’s trafficking activities were captured on a wiretap on his Snapchat account. Mendivil’s own messages indicated his significant involvement in coordinating drug transportation loads. Mendivil sent and received numerous photographs and videos of narcotics on Snapchat, which DEA agents were able to review and collect as evidence.
Mendivil’s intercepted Snapchat messages also painted a picture of Mendivil knowingly using minors as drug couriers. Court filings highlight the specific conversations between Mendivil and his co-conspirators where Mendivil is provided with identification documents of would-be juvenile couriers, showing their ages. In one case, Mendivil received a photograph of a Chula Vista High School identification card and subsequently discussed the drop location for what agents believed to be several hundred pills.
According to his plea agreement, Mendivil worked as the transportation coordinator for several sources of supply of drugs and maintained a “cadre of couriers” to transport drugs across the U.S.-Mexico border in vehicles. Mendivil also paid others to recruit these couriers on his behalf. Mendivil admitted that the seizures of drugs attributed to his organization during the course of this investigation was approximately 150 kilograms total of heroin, fentanyl, cocaine and methamphetamine.
At his sentencing hearing, U.S. District Judge Cynthia Bashant noted Mendivil was “not only destroying lives with the drugs brought in but was destroying lives by getting other young people involved.”
“Our youth are being used by drug traffickers to smuggle dangerous drugs across the border,” said Acting U.S. Attorney Randy Grossman. “We are aggressively prosecuting the recruiters who exploit children. But the children also need to know that trying to sneak dangerous drugs under the noses of authorities is risky business. Don’t throw away your future.” Grossman praised prosecutor Meghan Heesch for her excellent work on this matter, and DEA and IRS agents for their innovative investigative strategies in this case.
“Drug cartels will do anything to get drugs into the United States so they can make their blood money - including putting our children in harm’s way,” said DEA Special Agent in Charge John W. Callery. “The DEA prioritizes investigations involving the exploitation of children and is involved in community outreach to educate parents and teenagers of the explicit dangers associated with smuggling drugs for cartels.”
Related cases 19CR2953-BAS and 20CR1454-BAS charged Mendivil’s co-conspirators, including his recruiters, stash house operators, and couriers. Seven other co-conspirators with lesser roles than Mendivil have been convicted and sentenced for federal drug trafficking offenses.
DEFENDANT Case Number 19-CR-2320-BAS
Osvaldo Mendivil-Tamayo Age: 22 Tijuana, Mexico
SUMMARY OF CHARGES
Count 1: Conspiracy to Import Cocaine, Fentanyl, Heroin, and Methamphetamine – Title 21, U.S.C., Sections 952, 960, 963
Count 2: Conspiracy to Distribute Cocaine, Fentanyl, Heroin, and Methamphetamine – Title 21, U.S.C., Sections 841, 846
Maximum penalties as to both counts: Life in prison and $10 million fine
AGENCIES
Drug Enforcement Administration
Internal Revenue Service- Criminal Investigations
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
Chief Warrant Officer Pleads Guilty in International Navy Bribery and Fraud ScandalRead 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 – August 31, 2021
SAN DIEGO – Retired Chief Warrant Officer Robert Gorsuch admitted in federal court today that he received more than $45,000 in bribes from foreign defense contractor Leonard Francis, who plied him with stays at luxurious hotels plus meals, entertainment and other gifts in exchange for official acts that would help Francis’ ship husbanding business, including the disclosure of multiple classified ship schedules.
Gorsuch was one of nine members of the U.S. Navy’s Seventh Fleet indicted in March 2017 for participating in a conspiracy with Francis, the owner and CEO of Singapore-based Glenn Defense Marine Asia.
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
Gorsuch is the first of the Seventh Fleet defendants to plead guilty. The remaining defendants, who are accused of trading military secrets and substantial influence for sex parties with prostitutes, extravagant dinners and luxury travel, are scheduled for trial on November 1, 2021. They include U.S. Navy Rear Admiral Bruce Loveless; Captains David Newland, James Dolan, Donald Hornbeck and David Lausman; Colonel Enrico DeGuzman; Lt. Commander Stephen Shedd; and Commander Mario Herrera.
This case has resulted in federal criminal charges against 34 Navy officials, defense contractors and the GDMA corporation. So far, 26 of those have pleaded guilty, admitting that they collectively accepted millions of dollars in luxury travel and accommodations, meals, or services of prostitutes from Francis in exchange for helping GDMA win and maintain contracts and overbill the Navy by over $35 million.
“Gorsuch essentially sold his honor for a few nights at the Shangri-La,” said Acting U.S. Attorney Randy Grossman. “Gorsuch sacrificed his integrity for so little and caused so much harm in the process. Today, Gorsuch has admitted his part in this scandal and will be held to account for his conduct.”
Gorsuch was a Chief Warrant Officer in the U.S. Navy, who, from January 2005 to March 2008, served as the Seventh Fleet’s Flag Administration Officer. In this role, he provided administrative support to the Seventh Fleet Commander, department heads, and other senior officers of the Seventh Fleet staff.
According to his plea agreement, Gorsuch admitted to receiving the following bribes from Francis:
On or about February 8, 2007, Gorsuch and others attended a party at the Manila Hotel in Manila, Philippines, for which Francis paid expenses, which totaled approximately $15,000.
On or about February 11, 2007, Gorsuch and others stayed at Francis’s expense at the Shangri-La Hotel in Cebu, Philippines.
From March 1-5, 2007, Gorsuch stayed at Francis’s expense at the Shangri-La Hotel in Kuala Lumpur, Malaysia.
On or about June 17, 2007, Gorsuch and others dined at Francis’s expense at Altitude Shangri-La in Sydney, Australia.
On or about January 19, 2008, defendant and others stayed at Francis’s expense for two nights at the Ritz Carlton in Tokyo.
According to admissions in his plea agreement, Gorsuch reciprocated by sending Francis disks containing classified ship schedules for the Navy’s Seventh Fleet. In an email to Francis on October 25, 2007, Gorsuch wrote: “By the way, the two disks … the yellow one is the latest with current C7F sked as briefed to the boss. I will investigate on the dates for the ships you requested and get back to you shortly.” Two days later, Gorsuch, using the same email account, sent Francis an email describing the planned movements of the U.S.S. Tarawa and U.S.S. Hopper for December 17-21, 2007. Likewise, on or about August 3, 2008, Francis emailed Gorsuch at the same email account to make a demand: “I need some [ship schedule] updates. When shall I call you?” Gorsuch responded: “Sked fluctuating a lot right now – should start to solidify next week. Will drop you an e-mail when they are done chopping it up next week and we can talk.
“Mr. Gorsuch's guilty plea unequivocally memorializes his participation in the charged corruption scheme, wherein he and others sacrificed the honor of serving our great nation with distinction in return for personal gain,” said Kelly P. Mayo, the Director of the Department of Defense Office of Inspector General, Defense Criminal Investigative Service. “The comprehensive joint investigation that exposed Mr. Gorsuch's illegal activities is but one example of the lengths DCIS and its investigative partners will go to pursue justice for the Warfighter and defend the integrity of the men and women who truly exemplify service before self.”
“Mr. Gorsuch will be held fully accountable for accepting lavish gifts in exchange for, among other things, passing classified information to Mr. Francis and GDMA,” said NCIS Director Omar Lopez. “NCIS and our law enforcement partners remain committed to rooting out bribery and corruption wherever it exists and thwarting the potentially grave attendant consequences.”
DEFENDANT Case Number: 17-CR-0623-JLS
Chief Warrant Officer (Retired) Robert Gorsuch Age: 54 Mississippi
SUMMARY OF CHARGES
Bribery in violation of 18 U.S.C. § 201
Maximum Penalty: Fifteen years in prison, $250,000 fine
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
Defense Contract Audit Agency
Second Man Charged in Deaths of Smuggled Chinese MigrantsRead the Press Release
SAN DIEGO – Saad Ali Awan, a U.S. citizen living in El Centro, appeared in federal court today to face charges that he was part of a conspiracy to illegally transport three Chinese nationals into the U.S. from Mexico who were later found dead in the trunk of a smuggler’s BMW.
According to a federal complaint unsealed today, Awan placed help-wanted ads on Craigslist to recruit human smugglers. Neil Edwin Valera responded to one of those ads and as a result became the smuggler of the Chinese nationals who perished due to heat and asphyxiation in the trunk.
Valera was the first to be charged in this case; Awan is the second. Valera pleaded guilty and was sentenced to five years in prison in connection with the deaths. Awan was arrested yesterday at his home in El Centro. He was charged with Conspiracy to Encourage Aliens to Enter Resulting in Death and Bringing in Aliens without Presentation for Financial Gain.
According to the complaint charging Awan, agents and officers investigating the deaths of the Chinese nationals tracked cell phone and email activity to Awan and found that he was associated with at least 14 smuggling incidents that occurred in the Southern District of California from July 4, 2019 to July 11, 2020.
According to court documents, San Diego police received an emergency 911 call on August 11, 2019 from a person reporting a foul odor and blood dripping from a suspicious vehicle with Texas license plates parked near the 2100 block of Jaime Avenue in San Diego.
San Diego police officers discovered a 1999 silver BMW with a Texas license plate. The officers lifted the trunk and found what initially appeared to be two deceased Asian females. Homicide detectives found an additional victim, an Asian male, pressed up against the rear wall of the trunk. A witness said the car was first noticed two days earlier and no one was seen coming or going.
Video recordings show the same car crossing into the United States from Mexico on August 9, 2019, at the San Ysidro port of entry at 3:14 p.m. Valera was the registered owner of the vehicle. Valera was arrested soon after. According to the complaint charging Awan, Valera told federal agents during his post-arrest interview that he became a human smuggler after responding to a Craigslist ad.
That ad was later traced back to Awan. Valera ultimately agreed to smuggle an unknown number of Chinese women into the U.S. in the trunk of his BMW for $6,000. Valera’s cell phone records indicated he had hundreds of contacts that were traced back to Awan and another conspirator.
“Human smugglers do not act alone, and we will continue to prosecute offenders who participate at all levels of the criminal organizations responsible for these dangerous crimes,” said Acting U.S. Attorney Randy Grossman. “We are determined to prevent more tragic and senseless deaths.” Grossman commended AUSA Michael Wheat and the agents who diligently investigated this case.
“This is a tragic event that could have been avoided if people were more aware of the dangers of being smuggled into the U.S. by criminal organizations that value profit over human life,” said Homeland Security Investigations (HSI) San Diego Acting Special Agent in Charge Chad Plantz. “HSI and its law enforcement partners will continue to arrest, prosecute and bring these unscrupulous smugglers and criminal organization to justice.
San Diego Sector Border Patrol's Chief Patrol Agent, Aaron Heitke affirms, "We are grateful for the tenacity, persistence, and hard work that our law enforcement partners have demonstrated over the past several months. Their collaborative efforts with the United States Attorney's office have resulted in the arrest of Saad Ali Awan, who is alleged to be a prolific smuggler within our area of responsibility."
“We appreciate the opportunity to work jointly with our investigative partners to help bring individuals to justice, identifying and arresting those involved in this tragic case,” said Pete Flores, Director of Field Operations for U.S. Customs and Border Protection in San Diego.
Awan will next appear in federal court on August 31, 2021 for a detention hearing before U.S. Magistrate Judge Montenegro in El Centro.
DEFENDANT Case Number: 21MJ3202-LL
Saad Ali Awan Age: 23 El Centro, California
SUMMARY OF CHARGES
Conspiracy to Encourage Aliens to Enter Resulting in Death – Title 8, U.S.C., Section 1324(a)(1)(A)(iv)(v)(I)(II) and (B)(iv)
Maximum penalty: Death or life in prison and $250,000 fine
Bringing in Aliens without Presentation for Financial Gain – Title 8, U.S.C., Section 1324(a)(2)(B)(ii)
Maximum penalty: Mandatory minimum three years, up to 15 years in prison
INVESTIGATING AGENCIES
San Diego Police Department
U.S. Customs and Border Protection, Office of Field Operations
U.S. Customs and Border Protection, U.S. Border Patrol
Homeland Security Investigations
Multiple Defendants in 'Grandparent Scam' Network Indicted for Racketeering ConspiracyRead the Press Release
Note: Click to view the indictment.
A federal grand jury in San Diego has returned an indictment against eight defendants for their alleged roles in a federal racketeering conspiracy. The indictment alleges the defendants were members and associates of a criminal enterprise that defrauded elderly Americans by making them falsely believe that a grandchild (or other close relative) was in trouble and needed their help. The elderly victims each paid thousands to tens of thousands of dollars to the criminal organization in this scheme.
The grand jury returned an indictment charging the defendants with conspiracy under the Racketeer Influenced and Corrupt Organizations (RICO) Act. Six defendants have been arrested – Timothy Ingram aka Bleezy, 29, of North Hollywood, California; Anajah Gifford, 23, of North Hollywood, California; Joaquin Lopez, 45, of Hollywood, Florida; Jack Owuor, 24, of Paramount, California; Tracy Glinton, 34, of Orlando, Florida; and Lyda Harris, 73, of Laveen, Arizona. Two additional defendants – Tracy Adrine Knowles, 29, and Adonis Alexis Butler Wong, 29, who each resided in Florida during the alleged offense – have also been charged.
“These defendants were part of a large network of individuals that systematically targeted elderly Americans by preying on their concern for loved ones," said Deputy Assistant Attorney General Arun Rao for the Justice Department’s Civil Division. "The Department of Justice is committed to prosecuting individuals who take part in such schemes that target vulnerable people. We are grateful to our partners at the U.S. Attorney’s Office in the Southern District of California and the FBI in advancing the Department’s efforts against organized elder fraud, and to the San Diego County District Attorney’s Office.”
“This scheme has left many elderly victims financially and emotionally devastated,” said Acting U.S. Attorney Randy Grossman for the Southern District of California. “It is unconscionable to target the elderly and exploit their love for their grandchildren. Elder fraud is a serious crime against some of our nation’s most vulnerable citizens. We are committed to combating all types of elder abuse in our community.”
“Elder Fraud is a massive and growing problem, as our county’s population gets older, with losses into the billions of dollars nationwide,” said Special Agent in Charge Suzanne Turner of the FBI’s San Diego Field Office. “The San Diego Elder Justice Task Force was set up to combine resources, experience, and capabilities to have a sophisticated and coordinated law enforcement response to fight this battle.”
According to the indictment, the defendants were members and associates of a network of individuals who, through extortion and fraud, induced elderly Americans across the United States to pay thousands to tens of thousands of dollars each to purportedly help their grandchild or other close family relatives. According to statements made by prosecutors in court, the defendants swindled more than $2 million from 70-plus elderly victims across the nation, with at least 10 in San Diego County. The perpetrators contacted elderly Americans by telephone and impersonated a grandchild, other close relative, or friend of the victim. They falsely convinced the victims that their relatives were in legal trouble and needed money to pay for bail, medical expenses for car accident victims, or to prevent additional charges from being filed. The defendants and their co-conspirators received money from victims via various means, including in-person pickup, mail, and wire transfer, and laundered the proceeds, including through cryptocurrency.
The case was investigated by the San Diego Elder Justice Task Force, which is a collaboration between the U.S. Attorney’s Office, the FBI, the District Attorney’s Office and all San Diego County law enforcement agencies. The Elder Justice Task Force was officially launched in February 2020 and is believed to be the first comprehensive local law enforcement effort for this purpose anywhere in the country.
A number of law enforcement agencies and offices across the country have investigated components of the scheme, including the FBI’s field offices in Cleveland, Dallas, Los Angeles, Miami, Orlando, and San Francisco; the Dallas Police Department; and police departments across several states, including the Jacksonville Police Department in Alabama; the Anaheim Police Department, Burbank Police Department, Carlsbad Police Department, Downey Police Department, El Cajon Police Department, Garden Grove Police Department, Huntington Beach Police Department, Nevada County Sheriff’s Office, Oceanside Police Department, Pasadena Police Department, Riverside County Sheriff’s Department, San Diego County Sheriff’s Department, San Diego Police Department, San Francisco Police Department, Santa Monica Police Department, and Ventura County Sheriff’s Office in California; the Dalton Police Department and Spalding County Police Department in Georgia; the Lee County Sheriff’s Department in North Carolina; the Akron Police Department, Cleveland Division of Police, and Sagamore Hills Police Department in Ohio; the Carmel Police Department in Indiana; the St. Joseph Sheriff and Troy Police Department in Michigan; the Fergus Falls Police Department in Minnesota; the New York State Police and Suffolk County Police Department in New York; and the Colleyville Police Department, City of Fair Oaks Ranch Police Department, Grand Prairie Police Department, and Richardson Police Department in Texas. The U.S. Attorneys’ Offices in the District of Arizona, Central District of California, Middle District of Florida, Western District of North Carolina, and Northern District of Ohio provided assistance in the investigation.
Trial Attorneys Lauren M. Elfner and Wei Xiang with the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Oleksandra Johnson of the Southern District of California are prosecuting the case.
The Consumer Protection Branch coordinates the department’s Transnational Elder Fraud Strike Force, working with U.S. Attorney’s Offices and law enforcement agencies to investigate and prosecute scams run by transnational criminal organizations, including mass mailing, telemarketing, and tech support scams. For more information about the Consumer Protection Branch, visit its website at http://www.justice.gov/civil/consumer-protection-branch
An indictment merely contains allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Eight Indicted in Nationwide Grandparent Fraud ScamRead the Press Release
Assistant U. S. Attorney Oleksandra “Sasha” Johnson (619) 546-9769
NEWS RELEASE SUMMARY – August 25, 2021
SAN DIEGO – Eight people are charged in a federal grand jury indictment unsealed this week, accused of participating in a criminal enterprise that has stolen millions of dollars from elderly victims in San Diego County and around the nation.
Click here for indictment
According to statements made by prosecutors in court, the defendants swindled more than $2 million from 70-plus elderly victims across the nation, with at least 10 in San Diego County, by feeding them phony stories that their grandchildren were in terrible trouble and needed money fast.
“This scheme has left many elderly victims financially and emotionally devastated,” said Acting U.S. Attorney Randy Grossman. “It is unconscionable to target the elderly and exploit their love for their grandchildren. Elder fraud is a serious crime against some of our nation’s most vulnerable citizens. We are committed to combating all types of elder abuse in our community.”
“These defendants were part of a large network of individuals that systematically targeted elderly Americans by preying on their concern for loved ones. The Department of Justice is committed to prosecuting individuals who take part in such schemes that target vulnerable people,” said Deputy Assistant Attorney General Arun G. Rao for the Civil Division’s Consumer Protection Branch. “We are grateful to our partners at the U.S. Attorney’s Office in the Southern District of California and the FBI in advancing the Department’s efforts against organized elder fraud, and to the San Diego County District Attorney’s Office.”
This is the first case investigated by the San Diego Elder Justice Task Force, which is a collaboration between the U.S. Attorney’s Office, the FBI, the District Attorney’s Office and all San Diego County law enforcement agencies. The Elder Justice Task Force was established in February 2020 and is believed to be the first comprehensive law enforcement effort for this purpose anywhere in the country.
“Elder Fraud is a massive and growing problem as our county’s population gets older, with losses into the billions of dollars nationwide,” said FBI Special Agent in Charge Suzanne Turner. “The San Diego Elder Justice Task Force was set up to combine resources, experience, and capabilities to have a sophisticated and coordinated law enforcement response to fight this battle.”
“This first-of-its-kind Elder Justice Task Force leverages the power of collaboration and innovation to effectively take down organized criminal rings that target the elderly in San Diego County and across the nation,” said Summer Stephan, the San Diego County District Attorney. “The Task Force shares key information, and actively works to connect those dots and reveal patterns that lead to successful prosecutions. We believe it will become a model for the rest of the nation on how to stop the billion-dollar criminal industry of elder fraud.”
“The level of law enforcement cooperation and coordination in the San Diego Region is unique and helps make all San Diego residents safer,” said El Cajon Police Chief Michael Moulton. I commend all the investigators involved in this case for their tenacity and determination in helping bring justice to these victims. The San Diego Elder Justice Task Force is a vital component to helping protect San Diego county’s seniors.”
As of today, six of eight defendants have been arrested. The defendants are charged with violating the racketeering statute known as RICO, the federal law designed to combat organized crime. This is believed to be the first time the RICO statute has been used in an elder fraud case. The indictment alleges that this organization was involved in extortion, fraud and money laundering – all hallmarks of organized crime.
The investigation began in San Diego with one victim and a small loss, and grew exponentially to include victims in El Cajon, Escondido, Carlsbad, Bonita, Santee, Coronado and across at least 15 states.
According to the indictment, scammers contacted elderly victims, usually by telephone, and impersonated a grandchild or someone else close to the victim. The scammer pretended to be in dire legal trouble because of an accident or arrest. He or she claimed to need money for bail, medical expenses, or legal fees.
The scheme involved multiple “actors” who played varying roles using a well-rehearsed script. One would play the beloved relative; another would pretend to be a lawyer; and still others would pose as bail agents or medical professionals. They provided victims with false case numbers, and they instructed the victims to lie to family, friends, and bank representatives about the reasons for the withdrawal or money transfer.
The grandparents were so fearful and desperate to help that they handed over tens of thousands of dollars in tremendous acts of selflessness. Once the victim was on board, other members of the criminal enterprise were dispatched to doorsteps to collect money.
According to the indictment, the scammers took elaborate steps to conceal their true identities from victims and law enforcement. They used false names. They rented residences to receive cash sent through the mail and commercial carriers. They used rental cars or ride share vehicles to pick up funds from victims. And once they received funds from the victims, the scammers quickly tried to hide it by transferring proceeds to other members of the criminal conspiracy, who converted fiat currency to cryptocurrency.
According to court documents, one defendant collected $33,000 from three different victims in a single day. Messages from his phone reveal that he was provided victims’ names and addresses and used a fake name to collect money from the victims. In a text exchange with a coconspirator, the defendant asked: “What's gon (sic) be my name”
According to the indictment, one of the victims lived in Oceanside. She was 87 years old. She is identified in the indictment as “JD.”
JD received a phone call on May 11, 2020, from a woman claiming to be her granddaughter. The caller said she had been arrested following a car accident and needed $9,000 for bail. She then turned the phone over to her supposed lawyer, who warned JD not to discuss this with anyone or risk violating a court gag order. A courier went to JD’s address and picked up the cash.
The next day, a man purporting to be an accident specialist called JD and claimed that the other party in the vehicle collision had lost her baby as a result of the accident. If JD did not provide another $42,000, her granddaughter would be charged with first degree manslaughter and spend 15-20 years in prison. JD sent a wire transfer in the amount of $42,000 to an account associated with the defendants.
The scammers didn’t stop there.
About a week later, yet another scammer called JD and advised her that she and her granddaughter had violated the gag order. If JD didn’t pay an additional $57,000, her granddaughter would go to jail. JD sent another wire transfer in the amount of $57,000 to an account associated with the defendants.
“I know some victims may be reluctant to come forward because they feel embarrassed that they fell for this hoax,” Grossman said. “But I want to assure victims that it is not your fault. You are one of many, many people who were deceived by a sophisticated criminal organization whose members concocted a number of plausible storylines and conspired together to trick you. These are unscrupulous manipulators who prey on the elderly. They are to blame, not you.”
For those who may be contacted in the future by scammers, please know that law enforcement is here to help. Please call your local law enforcement agency, sheriff, FBI or 911 if there is an emergency.
Grossman commended prosecutors Sasha Johnson from the Southern District of California, Lauren Elfner and Wei Xiang from the Department of Justice’s Consumer Protection Branch, the Justice Department’s Office of International Affairs, as well as agents from the FBI for their excellent work on this case. Grossman also acknowledged excellent work of the District Attorney’s Office and the multiple local law enforcement agencies in the San Diego Elder Justice Task Force that relentlessly investigated this case to pursue justice for the elderly victims.
DEFENDANTS Case Number 21cr2216-CAB
Tracy Adrine Knowles 29 Orlando, Florida
Fugitive
Adonis Alexis Butler Wong 29 Pembroke Pines, Florida
Fugitive
Timothy Ingram, AKA Bleezy 29 North Hollywood, California
In custody. Arrested in Los Angeles on August 10, 2021. Judge denied bond.
Anajah Gifford 23 North Hollywood, California
In custody. Arrested in Los Angeles on August 10, 2021. Judge denied bond.
Lyda Harris 73 Laveen, Arizona
Arrested in Albania on a Provisional Arrest Warrant. United States is seeking extradition.
Joaquin Lopez 45 Hollywood, Florida
Arrested in Hollywood, Florida, on August 18, 2021. He will be released on bond.
Jack Owuor 24 Paramount, California
Arrested in Paramount, near Los Angeles, August 11, 2021. Judge denied bond.
Tracy Glinton 34 Orlando, Florida
Arrested in Orlando, Florida on August 17, 2021. She is released on bond.
SUMMARY OF CHARGES
Title 18, U.S.C., Sec. 1962(d) – Conspiracy to Conduct or Participate in an Enterprise
Through a Pattern of Racketeering Activity
Maximum penalty: Twenty years in prison and a fine of not more than the greater of twice the amount of gain or loss associated with the offense or $250,000
AGENCIES
Department of Justice’s Consumer Protection Branch
San Diego Elder Justice Task Force, which includes:
San Diego FBI
San Diego County District Attorney’s Office
San Diego Police Department
San Diego Sheriff’s Department
Carlsbad Police Department
Oceanside Police Department
Escondido Police Department
Chula Vista Police Department
El Cajon Police Department
La Mesa Police Department
National City Police Department
Coronado 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.
Boat Operators Plead Guilty in Smuggling Death in La JollaRead the Press Release
Assistant U. S. Attorneys Jimmy N. Rotstein (619) 546-8573, Colin M. McDonald (619) 546-9144, and Victor P. White (619) 546-8439
NEWS RELEASE SUMMARY – August 18, 2021
SAN DIEGO – Victor Alfonso Soto Aguilar and Jose Ramon Geraldo Romero pleaded guilty in federal court today in connection with their roles as operators of a panga boat that attempted to smuggle fourteen Mexican citizens into the United States in open ocean waters, ultimately resulting in the death of one passenger.
During a proceeding before U.S. Magistrate Judge Karen S. Crawford, Soto and Geraldo admitted that they piloted a panga boat loaded with 14 Mexican citizens from Mexico into the United States. As part of their guilty pleas, Soto and Romero admitted that the panga boat was loaded beyond capacity, which resulted in temporary engine failure that caused the boat to stall in open ocean waters in the middle of the night. They further admitted that when they arrived near Marine Street Beach in La Jolla, California, they stopped the boat approximately 80 yards from shore and instructed all 14 passengers to remove their life jackets and jump into the water without regard to whether any of them knew how to swim. They also assured many of the passengers that the water was shallow. One passenger, Rogelio Perez Gutierrez, jumped out of the boat, could not stay afloat, and drowned as a result of the smuggling attempt.
United States Border Patrol, the Coast Guard, and San Diego Lifeguards ultimately responded to this event and rescued a number of individuals who had jumped into the ocean at the direction of Soto and Romero. The other passengers on the panga boat 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.
“Another life has been tragically lost as a result of smugglers’ reckless actions,” said Acting U.S. Attorney Randy Grossman. “Smugglers do not care about the safety of their human cargo. They care only about profits, and the U.S. Attorney’s office is committed to bringing them to justice for these callous crimes.” Grossman commended the excellent work of Assistant U.S. Attorneys Jimmy N. Rotstein, Colin M. McDonald and Victor P. White, and as well as the HSI agents, Coast Guard officers, Border Patrol agents, Customs and Border Protection officers and San Diego Lifeguards, for their efforts in connection with the case.
“What’s really alarming is the callousness of these smugglers and their blatant disregard for the safety of those aboard the vessel,” said HSI San Diego Acting Special Agent in Charge Chad Plantz. “As seen in this case, the criminal networks who profit from these smuggling ventures prioritize profit over the well-being and livelihood of those who hire them. HSI stays committed to working closely with our law enforcement partners and prosecutors to continue to disrupt these illegal smuggling operations and bring to justice, those who violate U.S. law.”
“Callous disregard for the safety of their passengers is a common trait among smugglers,” said Brandon Tucker, Deputy Director of Air Operations for U.S. Customs and Border Protection, Air and Marine Operations in San Diego. “Their actions have consequences for the people they smuggle. They put people in danger, and now, they themselves will face the consequences of their actions.”
“The Coast Guard’s primary concern is the safety of life at sea,” said Capt. Tim Barelli, Sector Commander, USCG Sector San Diego. “This case is just one example of the disregard for human life these smugglers have, and we urge people not to place their lives in the hands of smugglers who ultimately care only about the money they will receive.”
Soto and Romero are scheduled to be sentenced by U.S. District Judge John A. Houston on December 13, 2021 at 10:00 a.m.
DEFENDANTS Case Number 21cr1665-JAH
Victor Alfonso Soto Aguilar Age: 37 Mexico
Jose Ramon Geraldo Romero Age: 24 Mexico
SUMMARY OF CHARGES
Attempted Bringing In at Other Than a Port of Entry Resulting In Death– Title 8, U.S.C., Sections 1324(a)(1)(A)(i), (v)(II), and (a)(1)(B)(iv)
Maximum penalty: Death or life in prison and $250,000 fine
Attempted Bringing In for Financial Gain – Title 8, U.S.C., Section 1324(a)(2)(B)(ii)
Maximum penalty: Fifteen years in prison and $250,000 fine; mandatory minimum of five years in custody
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 is part of 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 and Customs and Border Patrol. The FBI and the Drug Enforcement Administration are also part of the Task Force.
San Diego Resident Sentenced for Firearms ChargesRead the Press Release
Assistant U. S. Attorneys Timothy F. Salel and Jonathan Shapiro 619-546-8225
NEWS RELEASE SUMMARY – August 16, 2021
SAN DIEGO – Grey Zamudio, a San Diego resident who has expressed racist and violent extremist sentiments on social media, was sentenced in federal court today to 24 months in custody for possessing a short barrel rifle and two silencers, none of which was registered as required by law.
Zamudio pleaded guilty on December 1, 2020, to all three counts of possession of an unregistered rifle with a barrel of less than 16 inches and two unregistered silencers in violation of the National Firearms Registration and Transfer Act.
As the government noted at Zamudio’s detention hearing in this matter, “There are really no legitimate uses for silencers, other than to kill people. They are not used in hunting. They are not used for recreation purposes.”
The government’s sentencing memorandum notes that the circumstances of Zamudio’s crimes underscore the danger that he continues to pose to the public. The memo said Zamudio is motivated by a violent ideology and appears eager to commit acts of violence against Black people, liberals and others. The FBI was alerted to Zamudio by a tipster who viewed his social media posts, which included statements about “the need for ‘vigilante militias’” and “to crush the liberal terrorists” and that Zamudio was “ready to die” for his beliefs. These statements, together with the allegation that Zamudio had multiple firearms, were apparently so alarming that they led the tipster to share this information with the FBI, which then led to further investigation, including court authorization to search Zamudio’s telephone.
“This defendant has demonstrated a very troubling violent ideology, an intent to harm people, a lack of remorse, and a willingness to illegally possess firearms,” said Acting U.S. Attorney Randy Grossman. “For these reasons, he continues to pose a threat to public safety.” Grossman commended the work of prosecutors Timothy F. Salel and Jonathan I. Shapiro as well as the Joint Terrorism Task Force, including FBI and ATF agents and San Diego Police Department detectives and officers who worked on this matter. Grossman also urged anyone with information about similar threats made on social media to report it to authorities.
According to the complaint, on August 1, 2020, agents executed federal court-authorized search warrants on Zamudio’s apartment and truck. During the search of the apartment, agents seized two silencers and the short barrel rifle. As the FBI executed the court-authorized search, the San Diego Police Department served Zamudio with a California State Gun Violence Restraining Order (“GVRO”) based on recent threats of violence in numerous social media posts by Zamudio. Pursuant to the GVRO, the San Diego Police Department (SDPD) seized another rifle (in addition to the short barrel rifle seized by the agents), two pistols, a large number of magazines, and several hundred to several thousand rounds of ammunition.
The sentencing memo said Zamudio’s text messages provide a window into his motivations and intentions. In one text dated June 5, 2020, Zamudio apparently boasted about getting ’to pull my Glock on a n**** (racial epithet) last Thurs...” On July 30, 2020, two days before his arrest in this matter, Zamudio posted a screenshot of a Tweet in which he stated, “They trying to dox me lol. I’m really hoping to get to kill someone finally.’” A couple of weeks earlier, on June 13, 2020, the Zamudio texted, “Tomorrow they gunna riot in la mesa again, wanna join the Patriots an smash on some BLM?”
The review of the Zamudio’s phone led to the prosecution of Cody Richard Griggers, now a former deputy sheriff in Georgia. Zamudio and Griggers exchanged messages on a Facebook group. In one exchange, Griggers indicated his desire to use his status as a law enforcement officer to get flashbangs and entry charges, and Zamudio responded, “’yeah I’ll pay big money for bang and boom . . . I’m ready to terrorize la.”
Violent ideology and illegal firearms are a dangerous combination. According to the sentencing memo, in a January 19, 2019, response to texts about how to improve the country, Zamudio wrote, “Assassinate the bad politians (sic), i feel as though we are protected under the Constitution to do so.”
“Mr. Zamudio's violent, threatening posts on social media led to serious concern for the safety of those who wished to exercise their first amendment right of peaceful protest, and I'm proud we were able to intervene so quickly,” said FBI Special Agent in Charge Suzanne Turner. “Thanks to a tip from the public, the San Diego FBI's Joint Terrorism Task Force mitigated the threat within 72 hours. The FBI and our law enforcement partners will use all available tools to detect and disrupt threats which put our communities in danger. This case demonstrates the importance of the public immediately reporting any suspicious activity or threats they encounter to enable law enforcement to act quickly.”
“This investigation is a great example of cooperation between law enforcement agencies to keep our communities safe,” said San Diego Police Chief David Nisleit. “I want to thank the officers, detectives, and agents who worked together on this case to prevent a potential act of gun violence.”
SUMMARY OF CHARGES Case Number 20CR2451
Grey Zamudio Age: 33
Title 26, United States Code, Sections 5861(d), 5845(a)(3), 5845(a)(7), and 5871 – Receipt and Possession of Firearms (One Short Barrel Rifle and Two Silencers) in Violation of the National Firearms
Registration and Transfer Act
Maximum Penalty: Ten years in prison, $250,000 fine
INVESTIGATING AGENCIES
Joint Terrorism Task Force
Federal Bureau of Investigation
Bureau of Alcohol, Tobacco, Firearms and Explosives
San Diego Police Department
Man Sentenced to 33 months in Prison for Possessing Molotov Cocktails at La Mesa ProtestRead the Press Release
Man Sentenced to 33 months in Prison for Possessing Molotov Cocktails at La Mesa Protest
NEWS RELEASE SUMMARY – August 13, 2021
SAN DIEGO – Zachary Alexander Karas was sentenced in federal court today to 33 months in prison for possessing incendiary devices known as Molotov cocktails at a protest that began on May 30, 2020, in La Mesa.
“This defendant’s conduct endangered the welfare and safety of officers and protesters,” said Acting U.S. Attorney Randy Grossman. “He knowingly and intentionally constructed and brought Molotov cocktails to a crowded and volatile situation with the intention of using them, and this sentence reflects the very serious nature of his offense.” Grossman commended prosecutors Matthew Brehm and Joseph Orabona, agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives and the FBI, and investigators from the San Diego County Sheriff’s Department for their excellent work on this case.
“Today’s sentence should send a clear message to those who choose violence as a form of expression,” said FBI Special Agent in Charge Suzanne Turner. “The FBI is proud to work alongside our local, state, and federal partners on the Joint Terrorism Task Force to protect the right to peacefully assemble while keeping our communities safe.”
“The possession of the destructive devices known as Molotov cocktails has the potential to lead to violent crime,” said Los Angeles Field Division ATF Special Agent in Charge Monique Villegas. “Molotov cocktails can destroy lives and damage property. This prosecution and sentencing is a prime example of our commitment to the communities we serve to prevent individuals from possessing such destructive devices. Strong partnerships with our partner law enforcement agencies and the U.S. Attorney’s Office result in safer communities.”
Karas was convicted by a federal jury on May 11, 2021 and was immediately taken into custody following the verdict.
According to evidence presented at trial, on May 31, 2020, at 2:00 a.m., hours after police had declared an unlawful assembly and given numerous dispersal orders, Karas was standing in the middle of the road at the intersection of Allison Avenue and Spring Street, blocking traffic as part of the protest in La Mesa.
At the time of the protest in La Mesa, several fires had been set, and those fires damaged buildings and property. In fact, Karas was standing in the street in front of the Chase and Union banks that had been set ablaze. In the early morning hours of May 31, 2020, at approximately 2:00 a.m., officers gave orders to the crowd, including Karas, to disperse for an unlawful assembly. However, Karas and others refused, and Karas was arrested for refusing to leave his position in the middle of the street. After his arrest, officers discovered that Karas possessed two glass bottles with wicks that contained gasoline and two smoke bombs.
In video-recorded statements, after being read his Miranda rights, Karas stated that he made the Molotov cocktails and brought them to the La Mesa protest because he intended to use them to set fires, but claimed he ultimately did not cause any fires. Karas said he got the bottles from a Rite Aid parking lot and used 87 octane gasoline as the fuel.
A chemist with the ATF laboratory in Atlanta, Georgia, tested the liquid found inside Karas’ Molotov cocktails and confirmed it was gasoline. An explosives enforcement officer with the ATF received the chemist’s analysis, inspected the physical evidence, and found that the Molotov cocktails were functioning destructive devices.
DEFENDANT Case Number 20CR1842-DMS
Zachary Alexander Karas Age: 29 San Diego, CA
SUMMARY OF CHARGES
Possession of an Unregistered Destructive Device – Title 26, U.S.C., Section 5861
Maximum penalty: Ten years in prison and $250,000 fine
AGENCIES
Bureau of Alcohol, Tobacco, Firearms and Explosives
Federal Bureau of Investigation
San Diego County Sheriff’s Department
Federal Charges Filed Following Record-Breaking Drug SeizureRead the Press Release
Special Assistant U. S. Attorney Steven Lee (619) 546-8893
NEWS RELEASE SUMMARY – August 6, 2021
SAN DIEGO – Acting U.S. Attorney Randy Grossman announced federal drug charges today (August 6) against Defendant Carlos Gerardo Symonds Saavedra following the seizure of more than 2,500 kilograms of methamphetamine and 50 kilograms of fentanyl found in a commercial trailer at the Otay Mesa, California Cargo Port of Entry.
The Complaint alleges that on August 5, 2021, at approximately 5:24 p.m., Symonds Saavedra, a Mexican citizen, attempted to enter the U.S. as the driver and sole occupant of a 2008 International commercial truck, which was hauling a Strick trailer. Defendant’s manifest reflected the load consisted of plastic parts. According to the complaint, the secondary inspection reflected anomalies, determined upon testing to be illicit drugs, comingled with the commercial shipment of plastic parts. Defendant was allowed to exit the port of entry facility under visual surveillance. The complaint states that when defendant arrived at a private commercial parking lot, he parked the trailer, placed the keys under the hood and walked away. He was apprehended approximately 100 yards from the trailer and placed under arrest.
Further inspection of the trailer resulted in the discovery of: 400 packages of a substance that field-tested positive for methamphetamine, with an approximate weight of 2,507.58 kgs., as well as 52 kgs. of fentanyl. This is believed to be one of the largest methamphetamine seizures in the nation’s history.
“This is a significant accomplishment by our law enforcement partners,” said Acting U.S. Attorney Randy Grossman. “Due to stellar work by law enforcement agents, the government stopped more 5,500 pounds of deadly drugs from entering our country, furthering our fight against addiction and overdose deaths.”
“Over the last several years, we’ve seen many drug overdoses and drug-related deaths throughout this country,” said HSI San Diego Special Agent in Charge Cardell T. Morant. “HSI and its law enforcement partners undoubtedly saved lives by preventing this massive drug shipment from entering our communities. While this drug seizure is significant, we know that these transnational criminal organizations will continue to illegally smuggle their illicit drugs across our border. HSI and its law enforcement partners will remain vigilant in our mission to prevent these drugs from crossing the border and entering our communities.”
“By working in unison with our law enforcement partners, DEA has prevented a significant quantity of deadly drugs from reaching Americans,” said DEA Special Agent in Charge John W. Callery. “This seizure is a blow to the cartels; but a victory in the fight against methamphetamine and fentanyl overdose deaths plaguing our county. DEA remains committed to stopping the cartels who will undoubtedly continue trying to bring their deadly drugs into our country.”
DEFENDANT Case Number 21MJ3189
Carlos Gerardo Symonds Saavedra Residence: Mexico
SUMMARY OF CHARGES
Title 18, U.S.C., Sections 952 and 960
Importation of a controlled substance
Maximum penalty: Life in prison; and a mandatory minimum of 10 years; and a $10 million fine
AGENCIES
Homeland Security Investigations
Drug Enforcement Administration
U.S. Customs and Border Protection
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Pesticide Smuggler Sentenced to Jail, Ordered to Pay $10,000Read the Press Release
Assistant U. S. Attorney Melanie K. Pierson (619) 546-7976
NEWS RELEASE SUMMARY – August 10, 2021
SAN DIEGO – Mark Lee Morgan of Santa Ana, California, was sentenced in federal court Friday to 14 days in custody and ordered to pay a fine of $10,000 plus restitution of $1,360 for the cost of disposal of the pesticides, and to perform 120 hours of community service.
In pleading guilty, Morgan admitted that on November 19, 2020, he entered the United States from Mexico with 34 bottles of undeclared Mexican pesticides in his truck (DDVP 500U, containing the active ingredient of dichlorvos). Morgan owns a feed store in Compton, California, and admitted to agents that he intended to take the products to his store to sell them. Morgan further admitted that he was aware that the pesticide he was smuggling was illegal to import and use in the United States, and that he had smuggled it in on previous occasions.
The pesticide in the formulation smuggled by the defendant is illegal in the United States. Dichlorvos is lethal if ingested, absorbed through the skin, or inhaled. It is highly toxic to bees and birds, acutely toxic to fish and aquatic invertebrates, and can have chronic and long-lasting effects.
According to sentencing documents, DDVP 500U, the chemical smuggled by the defendant, is commonly found at locations where marijuana is illegally cultivated. Exposure to these pesticides during eradication efforts has caused law enforcement officers to be hospitalized and has polluted soils and streams and killed wildlife. Cannabis users are also at risk. In one study, the pesticide transfer rate into the blood stream of a cannabis smoker using a glass pipe was as high at 70 percent.
“The defendant was willing to risk the health of others and the environment for his own commercial profit,” said Acting U.S. Attorney Randy Grossman. “The U.S. Attorney’s Office is committed to keeping these dangerous chemicals out of the wrong hands.”
“These pesticides seized at our border are highly toxic and anyone attempting to smuggle them into the United States is not only committing a very serious crime, but also jeopardizing the health of those who are exposed to it,” said Cardell T. Morant, Special Agent in Charge of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) San Diego. “HSI and our law enforcement partners will continue to work together to prevent smugglers from illegally importing dangerous substances into this country.”
“The defendant’s efforts to deceive law enforcement by smuggling these pesticides into the United States put people at risk” said Scot Adair, Special Agent in Charge of the EPA’s criminal enforcement program in California. “U.S. EPA and its partner agencies will continue to fight against illegal imports of pesticides that pose a threat to human health and the environment.”
DEFENDANT Case Number 21cr0495-TWR
Mark Lee Morgan Age: 68 Santa Ana, CA
SUMMARY OF CHARGES
Smuggling – Title 18, U.S.C., Section 545
Maximum penalty: Twenty years in prison and $250,000 fine
AGENCIES
Homeland Security Investigations
U.S. Environmental Protection Agency, Criminal Investigation Division
San Diego Gang Member Sentenced to 15 Years in Prison for Dealing Methamphetamine and Heroin While Armed with Loaded FirearmRead the Press Release
SAN DIEGO – Jason John Clipper, aka “Smokey,” a member of the East Side San Diego criminal street gang with ties to the Mexican Mafia prison gang, was sentenced today in federal court to 15 years in prison for unlawfully possessing a firearm, possessing methamphetamine and heroin with the intent to distribute, and possessing a firearm in furtherance of a drug trafficking offense.
Clipper was arrested on March 17, 2018, after San Diego County Probation officers found him in possession of approximately 20 grams of methamphetamine, 8 grams of heroin, and a loaded firearm. At the time of his arrest, Clipper was on Post Release Community Supervision (“PRCS”) for a previous narcotics and firearm conviction in the California Superior Court. In October 2019, Clipper proceeded to trial and was convicted on all charges.
While pronouncing the sentence today, U.S. District Court Judge John A. Houston commented that the “jury got it right” and that Clipper had been a “pox on the community” for the entirety of his adult life. Clipper’s 15-year prison sentence will be followed by four years of supervised release. Clipper was also ordered to forfeit the firearm and ammunition to the United States.“Our office collaborates with state and local law enforcement partners to identify cases where federal enforcement is the most effective way to reduce gun crime,” said Acting U.S. Attorney Randy Grossman. “The sentence issued today accomplished the goals of DOJ’s Project Safe Neighborhoods (PSN) program, which is designed to take the most violent offenders off the streets.” Grossman commended the diligent work of Assistant U.S. Attorneys Andrew Haden and Kareem Salem and the federal and local law enforcement partners who assisted with this matter.
This case was prosecuted as part of the joint federal, state, and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Department of Justice’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
SUMMARY OF CHARGES
Felon in Possession of a Firearm, in violation of Title 18, U.S.C. Section 922(g) Maximum Penalty: 10 years; 3 years supervised releasePossession of Methamphetamine with Intent to Distribute, in violation of Title 21, U.S.C. Section 841 (a)(1) Maximum Penalty, based on drug amounts: Up to 40 years in prison; 5 year mandatory minimum
Possession of Heroin with Intent to Distribute, in violation of Title 21, U.S.C. Section 841 (a)(1) Maximum Penalty, based on drug amounts: Up to 40 years in prison; 5 year mandatory minimum
Possession of firearm in furtherance of a crime of violence, in violation of Title 18, U.S.C. Section 924(c) Maximum Penalty: 60 months mandatory consecutive sentence
DEFENDANT Case Numbers: 18CR2874-JAH
Jason John Clipper, age 43
INVESTIGATING AGENCIES
Bureau of Alcohol, Tobacco, Firearms, and Explosives
County of San Diego Sheriff’s Department
San Diego Police Department
San Diego District Attorney’s Office
Escondido Resident Admits to Selling over $1 Million of Forged ArtRead the Press Release
For further informtion Contact:
Assistant U. S. Attorney Andrew J. Galvin (619) 546-9721
SAN DIEGO – Jason Harrington pleaded guilty today and admitted that he sold $1.1 million of forged art. Harrington sold artwork purportedly created by Richard Hambleton – a New York City artist who rose to fame in the 1980s and whose paintings routinely sell for hundreds of thousands of dollars.
In his plea agreement, Harrington admitted selling forged art to at least fifteen 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.
(Pictures of Harrington’s forgeries in progress, which featured Hambleton’s Shadowman.)
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.(A series of photographs obtained by law enforcement from Harrington’s files depict the forgery in progress.)
“Forged artwork harms investors, corrupts the integrity of the art market, and damages the historical-cultural record,” said Acting U.S. Attorney Randy Grossman. “This case reflects the federal government’s full commitment to effectively investigate and prosecute complex art fraud crimes.” Grossman commended the work of Assistant U.S. Attorney Andrew Galvin and the FBI agents who handled this matter.
“Mr. Harrington created multiple fake paintings, devised elaborate cover stories to authenticate them, targeted unsuspecting buyers, and sold over a million dollars of forged artwork,” said FBI Special Agent in Charge Suzanne Turner. “Fraudulent and forged artwork degrades the integrity and trust within the art community and today’s guilty plea should send a clear message - the FBI will aggressively pursue those who use fraud schemes to make a living, regardless of the type of instrument used to commit the fraud.”
As part of his plea, Harrington agreed to pay at least $1,124,001.22 in restitution. Harrington will appear for sentencing on October 22, 2021 at 9:00 a.m. before U.S. District Court Judge Janis L. Sammartino.
DEFENDANT Case Number 21-CR-1184-JLS
Jason Harrington Age: 38 Escondido, CASUMMARY OF CHARGES
Wire Fraud – Title 18, U.S.C., Section 1343
Maximum penalty: 20 years’ imprisonment and $250,000 fineAGENCY
Federal Bureau of InvestigationPain Management Organization Pays $5.1 Million to Settle Criminal Medicare Kickback ViolationsRead the Press Release
For Further Information, Contact:
Assistant U. S. Attorney Joseph S. Green (619) 546-6955
SAN DIEGO – National Spine & Pain Center, LLC (“NSPC”), a physician management services organization headquartered in Rockville, Maryland, agreed this week to pay $5.1 million in restitution to Medicare as part of a criminal settlement for receiving payments in violation the Anti-Kickback Statute.
CLICK HERE for Non-Prosecution Agreement
As part of a non-prosecution agreement resolving criminal liability, NSPC admitted that the company and its affiliate Physical Medicine Associates, Ltd. (“PMA”) entered into an arrangement with Proove Biosciences, a defunct genetics testing company formerly based in Irvine, California, in which Proove unlawfully compensated physicians under the guise of a clinical research program.
The federal Anti-Kickback Statute provides for criminal penalties for whoever knowingly and willfully offers, pays, solicits, or receives remuneration to induce or reward the referral of business that is reimbursable under any of the Federal health care programs, including Medicare. The statute covers the payers of kickbacks - those who offer or pay remuneration - as well as the recipients of kickbacks - those who solicit or receive remuneration.
NSPC admitted that certain NSPC and PMA physicians referred to the clinical research payments offered by Proove as being payments “per test” or “per patient,” and that as a part of the scheme physicians completed timesheets used by Proove to pay the physicians which overstated the time that the physicians spent conducting related clinical research. In some cases, the timesheets indicated that the physicians had performed certain tasks, which had, in fact, been performed by Proove’s own employees, resulting in payments from Proove to the physicians for tasks that they did not perform.
NSPC admitted that certain NSPC personnel communicated to Proove that the company would not offer Proove’s genetic tests at additional NSPC sites unless Proove was current on its payments to NSPC and PMA physicians. Conversely, Proove communicated to NSPC that Proove expected NSPC and PMA physicians to order a certain volume of tests from Proove. Proove’s genetic tests purportedly could determine a patient’s risk of abusing certain prescription opioids and how patients metabolized certain drugs.
PMA received a total of $1.1 million in payments from Proove. Medicare paid Proove approximately $4 million for claims submitted by Proove from referrals from NSPC and PMA physicians.
“Referring patients based on expectation of personal profit corrupts the health care system by encouraging medical providers to make decisions based on their own financial gain rather than a patient’s best interests,” said David Leshner, Attorney for the United States. “Kickback payments also unfairly generate business for dishonest providers at the expense of those who do not engage in illegal conduct. This office is committed to holding perpetrators accountable for these fraudulent schemes.” Leshner commended AUSA Joseph Green, the FBI and HHS-OIG for the diligent investigation and prosecution of this matter.
“The defendants bilked millions of dollars intended to fund services that promote and improve the health of Medicare beneficiaries, some of whom were their own patients,” stated Timothy DeFrancesca, Special Agent in Charge of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “They prioritized their own enrichment above their duties as health care providers. HHS-OIG is dedicated to protecting Federal health care beneficiaries and programs, so our work includes the pursuit of providers who cheat both.”
“This week's restitution order sends a strong message to healthcare providers that choose to put personal gain over professional responsibility,” said FBI Special Agent in Charge Suzanne Turner. “The FBI is proud to work with our federal partners at HHS-OIG to root out these schemes which further diminish trust in the health care system.”
The non-prosecution agreement cited NSPC’s new ownership group, its voluntary termination of its relationship with Proove prior to the company’s knowledge of the criminal investigation, its continuing cooperation with investigators, and the adoption of a robust compliance program, as factors that supported the resolution of the criminal investigation with a non-prosecution agreement.
On June 9, 2021, nine individuals were charged in connection with the scheme in United States v. Brian Meshkin, et al., 21CR0112-JLS, United States District Court, Central District of California. The case is presently pending.
AGENCIES
Federal Bureau of Investigation
Department of Health and Human Services, Office of Inspector General
Naval Seaman Charged with CyberstalkingRead the Press Release
SAN DIEGO – Naval seaman Sergio Reinaldo Williams was arraigned today on an indictment charging him with cyberstalking a civilian woman. According to the indictment, in October 2020, Williams sent graphic sexual messages via social media to the victim 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. Williams included the victim’s Instagram account and hometown in the videos he posted to Pornhub.com. He 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 indictment alleges a disturbing campaign of revenge, harassment and intimidation,” stated Acting United States Randy Grossman. “This Office is committed to protecting victims of cyberstalking and holding perpetrators accountable for malicious internet activity.” Grossman commended Assistant U.S. Attorney Sabrina Fève and the Naval Criminal Investigative Service (NCIS) and DOJ teams that diligently pursued this matter.
“NCIS takes seriously any instances of cyberstalking, harassment or intimidation against or by any Department of the Navy service member,” said Joshua Flowers, Special Agent in Charge of the NCIS Southwest Field Office. “We will work aggressively with our law enforcement partners to stop the behavior and pursue those responsible.”
Williams is scheduled to appear before U.S. Magistrate Judge Linda Lopez on Friday, August 6, 2021 at 10:30 a.m. for a detention hearing.
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 the FBI field office.
DEFENDANTS 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: 5 years’ imprisonment and $250,000 fine
AGENCY
Naval Criminal Investigative Service
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Three Men Admit to Stealing from ATMs & Gas Pumps, Staging a Fake Car Accident in Nationwide Fraud, Money Laundering SchemeRead the Press Release
SAN DIEGO – Three more men pleaded guilty today to engaging in a years-long, nation-wide fraud conspiracy that stole victims’ financial information from ATMs and gas pumps in San Diego and across the country, and then used the stolen information to make fake credit and debit cards. All told, six defendants have now admitted to participating in that conspiracy, and in a related money laundering conspiracy, that netted over a million dollars in ill-gotten gains.
In sentencing one of the coconspirators on April 21, 2021, the Honorable Michael M. Anello observed that the conspiracy constituted “a very, very serious and longstanding criminal enterprise.”
One defendant, Arsen Galstyan, pleaded guilty to engaging a conspiracy to commit access device fraud: essentially, using fake debit and credit cards. The remaining two defendants—brothers Davit and Vahram Simonyan—admitted to participating in a money laundering conspiracy that laundered the proceeds of access device fraud and other crimes.
In their plea agreements, the defendants admitted that their scheme inflicted actual and intended losses of at least $1.2 million. The Simonyan brothers each admitted to obtaining over $642,000 in stolen money over the course of the conspiracy, which stretched from 2017 to 2020. They also acknowledged structuring their withdrawals from the banks to avoid bank reporting requirements. For example, in one month alone, the Simonyan brothers allegedly withdrew $91,500 in cash from a single bank account. Davit Simonyan admitted that he and a co-conspirator possessed 75 fake debit and credit cards on just a single day in 2018.
Davit Simonyan also staged a phony car accident in order to commit insurance fraud, according to his plea agreement. He planned an accident involving cars insured by two of his codefendants, including Arsen Galstyan, who also pleaded guilty today. Then Simonyan had one of the damaged vehicles repaired at a collision shop owned by an unindicted co-conspirator who kicked back thousands of dollars in payment from the insurance company to Simonyan and his brother as part of their money laundering scheme. Davit Simonyan admitted that by staging a car accident, his conduct involved the reckless risk of a serious bodily injury.
The indictment alleges that the coconspirators worked together to steal unwitting victims’ credit and debit card information by using skimming devices installed in common points of sale such as gas pumps and ATMs. With the stolen information in hand, the conspirators made a host of unauthorized cards that they then used to buy postal money orders and make withdrawals from victims’ accounts.
“People should be able to use a gas pump or an ATM without fear that a criminal will steal their identities and their savings,” said Acting U.S. Attorney Randy Grossman. “This office will ensure that identity thieves, fraudsters and money launderers are held accountable for victimizing our community.” Grossman commended Assistant U.S. Attorney Nicholas Pilchak and the federal agents who diligently pursued this matter.
“Members of the public should remain vigilant as skimming crimes continue to be prevalent,” said Brian Lewin, Special Agent in Charge of the U.S. Secret Service San Diego field office. “The Secret Service is proud to work with our law enforcement and public safety partners to prevent future crimes like this.”
“The U.S. Postal Inspection remains unwavering in its mission to arrest those who intend to utilize the Postal Service as part of a criminal enterprise,” noted Carroll Harris, Inspector in Charge of the Los Angeles Division. “The customers of the Postal Service can be assured the Post Office still remains a safe and secure location to conduct business.”
On April 21, 2021, co-defendant Arsen Minasyan was sentenced by the Honorable Michael M. Anello to 37 months in custody. He was ordered to forfeit $75,145.90 and to pay restitution to victims in the amount of $109,834.14.
The remaining defendant, Gor Plavchyan, is scheduled to be in court next for a change of plea on Friday, August 6, 2021.
The defendants who pleaded guilty today will appear for sentencing on November 3, 2021 at 9:30 a.m. before U.S. District Court Judge Michael Anello.
Anyone who believes that they may be a victim of this offense can visit the U.S. Department of Justice’s large case website for more information: www.justice.gov/largecases.
DEFENDANTS Age Case Number 20cr314-MMA
1. Davit Simonyan 30 Residence: Glendale, California
2. Vahram Simonyan 34 Residence: Glendale, California
3. Arsen Minasyan 34 Residence: Terminal Island FCI
4. Gor Plavchyan 26 Residence: Winnetka, California
5. Arsen Galstyan 40 Residence: Glendale, California
6. Mukuch Mkrtchyan 32 Residence: Fair Oaks, California
7. Smbat Shahinyan 41 Residence: Glendale, CaliforniaSUMMARY OF CHARGES
Conspiracy to Launder Monetary Instruments, in violation of Title 18, United States Code, Section 1956(h) (Defendants 1 through 3 only)
Maximum Penalty: twenty years in prison; fine of $500,000 or twice the value of the property involvedConspiracy to Possess Fifteen or More Unauthorized Access Devices, in violation of Title 18, United States Code, Sections 1029(b)(2), 1029(a)(3), and 1029(c)(1)(A)(i) (Defendants 1 and 3–7 only)
Maximum Penalty: five years in prison; fine of $250,000 or twice the gross gain or lossINVESTIGATING AGENCIES
United States Secret Service
U.S. Postal Inspection Service*The charges and allegations contained in an indictment are merely accusations. The defendants are considered innocent unless and until proven guilty
Canadian Citizen Convicted for Pump-and-Dump Securities Fraud SchemeRead the Press Release
SAN DIEGO – A federal jury today convicted Andrew Hackett, a Canadian citizen who previously resided in Toronto, Canada, of participating in a securities fraud pump-and-dump scheme surrounding the publicly-traded stock of a small company.
The jury found that Hackett committed securities fraud, and conspired to commit securities fraud, by engaging in a scheme to manipulate the market for Arias Intel Corp stock. According to the evidence presented at trial, Hackett’s scheme included efforts to artificially inflate the price of Arias Intel’s stock by controlling the majority of the company’s free-trading shares through concealed offshore and other nominee accounts, coordinating the company’s press releases with the issuance of penny stock newsletters, and using high-pressure call rooms targeting innocent investors. Hackett and his co-conspirators also engaged in manipulative trading to create the appearance that Arias Intel stock traded at higher prices and with greater volume than was actually the case.
The FBI investigated this case through a combination of forensic analysis and sophisticated covert techniques, including the use of an undercover agent and an informant, both of whom gathered evidence through recorded phone conversations and captured email and text messages.
Hackett was one of several defendants charged here. His co-conspirators, Kuldeep Sidhu of Vancouver, British Columbia, Annetta Budhu of New York, New York, and Kevin Gillespie of Tampa, Florida all pleaded guilty in connection with the scheme.
“In addition to victimizing innocent investors, pump and dump schemes weaken the integrity of securities markets and alter the level playing field consumers expect when making investment decisions,” said Acting U.S. Attorney Randy S. Grossman. “As this verdict demonstrates, those who engage in pump-and-dump and similar market manipulation schemes will face serious consequences.” Grossman commended the work of Assistant U.S. Attorneys Aaron P. Arnzen and Andrew J. Galvin and the FBI agents who diligently pursued this matter.
“Securities fraud is a serious crime which impacts our citizens and our financial markets. The FBI is committed to aggressively investigating these complex crimes with considerable resources and sophisticated techniques,” stated FBI San Diego Special Agent in Charge Suzanne Turner. “The criminal enterprise behind this scam attempted to commit wholesale fraud using boiler rooms to victimize ‘mom and pop’ investors, including some of our elderly citizens. The hard work of our agents certainly limited the number of victims and losses in this case.”
Hackett will be sentenced for his crimes on October 25, 2021.
DEFENDANT Case Number 18cr3072-TWR
Andrew Hackett Age: 32 Toronto, CanadaSUMMARY OF CHARGES
Securities Fraud – Title 15, U.S.C., Section 78(j)
Conspiracy to Commit Securities Fraud – Title 18., U.S.C., Section 371
Maximum Penalty: 20 yearsAGENCY
Federal Bureau of Investigation