Southern District of California
Press releases recorded for this federal judicial district.
International Wholesale Currency Dealer Pleads Guilty to Unlawfully Operating in the United StatesRead the Press Release
Assistant U. S. Attorneys Michael A. Deshong, Daniel C. Silva, and Carl Brooker (619) 546-9290
NEWS RELEASE SUMMARY—July 29, 2021
SAN DIEGO—GPOMCT Grupo Empresarial S.A. de C.V., an international, Mexico-based wholesale currency dealer and currency exchange business, pleaded guilty in federal court today to unlawfully operating in 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.
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 assisted HSI in its investigation.
As admitted in the plea agreement entered today before U.S. Magistrate Judge Michael S. Berg, GPOMCT imported shipments of currency from Mexico into the United States for the purposes of selling Mexican pesos to a currency exchange located in San Ysidro, California, identified only as “MSB 1” in the plea agreement. 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—and delivered them to MSB 1 in San Ysidro. GPOMCT used the services of an armored car company to collect currency from MSB 1 as payment and deliver it to a third-party intermediary in Miami, Florida.
By offering a variety of services as a wholesale currency dealer, GPOMCT admitted that it operated as an unlicensed money transmitting business in the United States and agreed to criminally forfeit $1.1 million as property involved in its unlawful operations. By failing to register as a money transmitting business, GPOMCT did not file currency and transactional 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, “Financial laws and regulations are not a suggestion. They are significant tools to combat international money laundering, tax evasion, and other crimes. Financial institutions that operate in the United States of America should learn from the crimes committed by GPOMCT. This office will continue to demand the highest level of compliance from financial institutions in the Southern District of California.” Grossman praised prosecutors Michael Deshong, Daniel Silva, and Carl Brooker as well as agents from Homeland Security Investigations and Federal Deposit Insurance Corporation for their excellent work on this case.
During the course of the investigation, agents also learned that GPOMCT used the services of an armored car company—and the armored car company’s Mexican affiliate—to import U.S. dollars into the United States and deliver them to third parties around the United States on hundreds of occasions between January 2019 and February 2021. These third parties would convert the U.S. dollars to Mexican pesos and electronically transmit the funds back to GPOMCT in Mexico, thereby completing the wholesale currency cycle.
GPOMCT has since registered as a money services business, or MSB, and acknowledged that it is now expected to comply with all U.S. statutes and regulations, including anti-money laundering requirements.
Cardell T. Morant, Special Agent in Charge for Homeland Security Investigations, San Diego, stated, “HSI is committed to protecting the integrity of the U.S. financial system by holding Money Service Businesses accountable for the registration and reporting requirements necessary to ensure transparency. Companies or individuals that import, transport, or transfer large amounts of currency without complying with reporting requirements create opportunities for criminal organizations to introduce their profits into the financial system without scrutiny. This guilty plea should send a strong signal to MSBs to remain vigilant in their anti-money laundering duties.”
“This guilty plea holds GPOMCT responsible for failing to comply with requirements established under anti-money laundering laws,” said Special Agent in Charge Jeffrey D. Pittano of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC OIG). “The FDIC OIG is committed to working with our law enforcement partners to investigate those who fail to adhere to laws and regulations that are designed to detect and prevent financial crimes.”
Sentencing is scheduled to occur on October 15, 2021 before U.S. District Judge Janis L. Sammartino.
DEFENDANTS 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
Former Qualcomm Director Admits to Tax Evasion Scheme with Former Chabad of Poway RabbiRead the Press Release
Assistant U. S. Attorneys Michelle L. Wasserman (619) 546-8431 and Valerie Chu (619) 546-6750
NEWS RELEASE SUMMARY – July 29, 2021
SAN DIEGO – Jason Ellis of Poway pleaded guilty in federal court today to filing a false tax return as part of a years’ long tax-evasion scheme with former Chabad of Poway Rabbi Yisroel Goldstein.
Until around 2018, Rabbi Goldstein was the director and head rabbi at Chabad of Poway, a tax-exempt religious organization. Goldstein also operated several non-profit entities affiliated with the Chabad, including the Friendship Circle of San Diego. Beginning in 2008, at Rabbi Goldstein’s request, Ellis, who was at the time an employee of Qualcomm, made a $1,000 donation to Friendship Circle. Ellis then requested that Qualcomm match that donation through the company’s corporate matching program. Unbeknownst to Qualcomm, Goldstein met with Ellis in person and returned the entirety of his $1,000 to him in cash, and kept the falsely matched Qualcomm donation. Ellis repeated this scheme in the same way every year through 2017.
In 2016, Ellis was promoted to the position of Director at Qualcomm, which meant that the company would match up to $5,000 in charitable donations. In 2016 and 2017, Ellis met with Goldstein and gave him a check for $5,000 for Friendship Circle and secured a $5,000 matching donation from Qualcomm. In each of those years Goldstein gave Ellis $5,000 back in cash. Between 2008 and 2017, Ellis made a total of 10 fraudulent charitable donations to Friendship Circle, each of which was matched by Qualcomm. Qualcomm matched a total of $18,000 in fraudulent donations by Ellis.
According to Ellis’ plea agreement, in 2018, Goldstein sent a message to Ellis through another individual reminding Ellis to make his donation. Ellis thought that it was strange that Goldstein was communicating through an intermediary, and became suspicious that something was wrong. That year Ellis made his annual $5,000 donation to Friendship Circle, but did not get any cash back from Goldstein. However, in 2019, a year in which Ellis did not make a donation to Friendship Circle, Ellis received in the mail an unexpected donation receipt for $5,000 from Friendship Circle, signed by the director of the organization, thanking Ellis for his tax-deductible donation. Ellis used this fraudulent donation receipt to falsely claim a $5,000 tax deductible donation on his 2019 tax returns, even though he knew he was not entitled to the deduction because he had not donated $5,000 to Friendship Circle in 2019.
Between 2015-2019 Ellis also falsely claimed his children’s preschool tuition at the Chabad as a charitable deduction on his taxes. During that time period Ellis wrote eight checks to Chabad of Poway, totaling $55,600 for his children’s preschool tuition. Ellis then falsely reported to the IRS that he had made tax deductible donations to charity despite knowing that these were in fact tuition payments and therefore not tax-deductible donations.
Through these various schemes Ellis evaded over $27,000 in taxes.
In July 2020, Rabbi Goldstein pleaded guilty “Mr. Ellis victimized not only honest U.S. taxpayers, but also a local corporation trying to improve our community through a charitable corporate-matching program,” said Acting U.S. Attorney Randy S. Grossman. “Giving phony donations as a way to avoid paying taxes is not only unscrupulous and deceitful – it’s a crime. Tax cheats who game the system will be held to account for their conduct.” to fraud charges, admitting that he participated in a complex, years-long, multi-million-dollar tax-evasion scheme and other financial deceptions involving theft of public money. Rabbi Goldstein’s plea agreement outlined the tax evasion scheme with Ellis.
Ellis is the ninth individual to plead guilty to crimes discovered in this investigation. Two additional individuals have agreed to deferred prosecution agreements as a result of the investigation. Rabbi Goldstein has agreed to cooperate with the ongoing investigation. He is scheduled to be sentenced by U.S. District Judge Cynthia Bashant on October 26, 2021.
Grossman praised prosecutors Michelle Wasserman and Valerie Chu and FBI and IRS agents for their excellent work on this case.
“In conspiring with Rabbi Goldstein in multiple tax evasion schemes, Jason Ellis showed a blatant disregard for our laws; laws designed to promote charitable giving and provide incentives for hard working Americans,” said FBI Special Agent in Charge Suzanne Turner. “What Jason Ellis chose to do in taking advantage of his own employer and the tax system worked to degrade our collective trust in these laws. The FBI is committed to finding and bringing to justice those who would abuse a system which encourages giving to non-profit organizations designed to help others.”
“For over ten years, Mr. Ellis participated in an illegal scheme that not only defrauded his employer but also stole tens of thousands of dollars from the United States,” said Ryan L. Korner, Special Agent in Charge of IRS Criminal Investigation’s Los Angeles Field Office. “Mr. Ellis’s lies and exploitation of charitable giving programs offered by both Qualcomm and the IRS is made more egregious by the length of his involvement. IRS Criminal Investigation, in partnership with its law enforcement partners, is resolute in bringing these thieves to justice.”
Jason Ellis is next scheduled to appear at a sentencing hearing on October 25, 2021 at 9:00 a.m. before Judge Cynthia Ann Bashant.
SUMMARY OF CHARGES Case Number 21-CR-2200-BAS
Jason Ellis Age: 42 Poway, CA
Filing False Tax Return, in violation of Title 26, U.S.C. §7206(1)
Maximum Penalty: Three years in prison
PREVIOUSLY CHARGED DEFENDANTS AND SUMMARY OF CHARGES
Yisroel Goldstein, Case Number 20CR1916-BAS Age: 58 Poway
Conspiracy to Defraud the United States and Commit Wire Fraud, in violation of Title 18, USC 371
Maximum Penalty: Five years in prison
Alexander Avergoon, Case Number 19CR2955-BAS Age: 44 San Diego
Wire Fraud, in violation of Title 18, USC 1343
Maximum Penalty: Twenty years in prison
Aggravated Identity Theft, in violation of Title 18, USC 1028A
Maximum Penalty: Two years minimum consecutive term in prison
Money Laundering, in violation of Title 18, USC 1956(a)(1)(B)(i)
Maximum Penalty: Twenty years in prison
Bruce Baker, Case Number 20CR1912-BAS Age: 74 La Jolla
Conspiracy to Defraud the United States and file false tax returns, in violation of Title 18, USC 371
Maximum Penalty: Five years in prison
Bijan Moossazadeh, Case Number 20CR1893-BAS Age: 63 San Diego
Filing a False Tax Return, in violation of Title 26, USC 7206(1)
Maximum Penalty: Three years in prison
Yousef Shemirani, Case Number 20CR1895-BAS Age: 74 Poway
Filing a False Tax Return, in violation of Title 26, USC 7206(1)
Maximum Penalty: Three years in prison
Boris Shkoller, Case Number 20CR1913-BAS Age: 83 Del Mar
Filing a False Tax Return, in violation of Title 26, USC 7206(1)
Maximum Penalty: Three years in prison
Mendel Goldstein, Case Number 20CR2772-BAS Age: 63 Brooklyn, NY
Conspiracy to Defraud the United States and Commit Wire Fraud, in violation of Title 18, USC 371
Maximum Penalty: Five years in prison
Stuart Weinstock, Case Number 21CR0042-BAS Age: 64 Escondido, CA
Filing False Tax Return, in violation of Title 26, U.S.C. §7206(1)
Maximum Penalty: Three years in prison
Rotem Cooper, Case Number 20CR3968-BAS Age: 54 San Diego
Deferred Prosecution Agreement
Conspiracy to Commit Wire Fraud, in violation of Title 18, USC 371
Igor Shtilkind, Case Number 20CR3955-BAS Age: 55 San Diego
Deferred Prosecution Agreement
Conspiracy to Commit Wire Fraud, in violation of Title 18, USC 371
INVESTIGATING AGENCIES
Federal Bureau of Investigation
Internal Revenue Service
North Park Gang Member Previously Convicted of Racketeering Conspiracy is Sentenced for Sex Trafficking of ChildrenRead the Press Release
Assistant U. S. Attorney Joseph Orabona (619) 546-7951
NEWS RELEASE SUMMARY – July 26, 2021
SAN DIEGO, CA – Jonathan Devon Price, aka “Lil’ Ty,” a North Park street gang member previously convicted of Racketeering Conspiracy, was sentenced in federal court today by Senior U.S. District Court Judge John A. Houston to 142 months in prison for committing the new crime of sex trafficking of children, and 24 months in prison for violating the conditions of supervised release in his racketeering case.
In December 2013, Price was charged with racketeering conspiracy, known as RICO, involving sex trafficking in San Diego and elsewhere. In October 2015, Price pleaded guilty to RICO by admitting his active role in the conspiracy that involved transporting adult females in San Diego and elsewhere for the purposes of prostitution. Price was later sentenced by Judge Houston to more than two years in prison and three years of supervised release.
Between 2016 and 2019, Price violated his supervised release on multiple occasions and was returned to prison. He was released from prison on his last violation on August 30, 2019.
While on federal supervision, Price was arrested on November 26, 2019 for once again engaging in sex trafficking. He was first transferred to state court for a matter involving the battery of one of his trafficking victims. After his battery conviction in state court in January 2020, he was transferred to federal court and arraigned on sex trafficking charges in February 2020. Price was ordered detained and has been in custody since his arrest in November 2019.
On October 13, 2020, Price appeared before U.S. Magistrate Judge Michael S. Berg and entered a guilty plea to the charge of sex trafficking of children. In his plea, Price admitted that in November 2019, he knowingly transported, provided, maintained, and obtained a 17-year-old minor female for the purpose of her engaging in commercial sex acts in San Diego County. Price also admitted he caused online ads to be posted offering the minor female for commercial sex. In addition, Price admitted that between about June 2018 and November 2019, he knowingly transported, provided, maintained, and obtained an adult female for the purpose of her engaging in commercial sex acts. During this time, Price used fraud, force, and coercion against the adult female in order to cause her to engage in commercial sex acts.
As part of his plea agreement, Price admitted that by committing the crime of sex trafficking of children in November 2019 he violated his supervised release conditions pending in his RICO case. For violating his supervised release, Price was sentenced to 24 months in prison, with 12 months to run consecutive and 12 months to run concurrent to the new prison sentence of 142 months for sex trafficking of children.
“Exploiting girls and women through sex trafficking is a despicable crime that has a long-lasting and devastating impact on the victims’ lives and futures,” said Acting U.S. Attorney Randy S. Grossman. “Our office will continue to work with law enforcement partners to end the abuse and ensure traffickers are held accountable for the damage they cause.” Grossman praised prosecutor Joseph Orabona and members of the San Diego Human Trafficking Task Force for their excellent work on this case.
“Today, the defendant was sentenced for his crimes of sexual exploitation of multiple victims to include a minor,” said FBI Special Agent in Charge Suzanne Turner. “The FBI is proud to work alongside our partners on the San Diego Human Trafficking Task Force to pursue cases such as these. I hope today’s proceedings bring a sense of justice to the victims as they move forward in their lives.”
DEFENDANT Case Numbers: 20CR0852-JAH, 13CR4510-JAH
Jonathan Devon Price, aka Lil’ Ty Age: 30 San Diego, CA
SUMMARY OF CHARGES
Sex Trafficking of a Minor, in violation of Title 18, United States Code, Section 1591
Maximum Penalties: Ten-year mandatory minimum and a maximum of life in prison; mandatory Sex Offender Registration; a maximum term of supervised release of life; mandatory restitution to the victims.
INVESTIGATING AGENCIES
San Diego Human Trafficking Task Force, which consists of:
- Federal Bureau of Investigation
- California Department of Justice
- California Department of Corrections & Rehabilitation – Parole
- California Highway Patrol
- ICE/Homeland Security Investigations
- National City Police Department
- San Diego City Attorney’s Office
- San Diego County District Attorney’s Office
- San Diego County Probation Department
- San Diego County Sheriff’s Department
- San Diego Police Department
- The United States Attorney’s Office, Southern District of California
Nine San Diego Residents Charged with Submitting Fraudulent Pandemic Unemployment Insurance Claims and Drug Crimes in Two CasesRead the Press Release
For Further Information, Contact:
Assistant U. S. Attorneys Stephen Wong (619-546-9464), Larry Casper (619-546-6734),
Alicia Williams (619-546-8917) and Courtney Strange (760-355-2216)San Diego County residents were charged in two separate indictments with Conspiracy to Commit Wire Fraud involving fraudulent Pandemic Unemployment Insurance claims.
CLICK HERE for Notice of Related CaseAs part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020, Congress provided new unemployment benefits for those affected by the COVID-19 Pandemic who would not otherwise qualify for unemployment insurance. In California, the Employment Development Department (EDD) administers unemployment insurance benefits.
In case number 21-CR-2154-CAB, Defendants Matthew Lombardo, Konrad Piekos, Ryan Genetti, and Dobrila Milosavljevic were charged with conspiracy to commit wire fraud. Defendants Lombardo, Piekos, and Genetti were also charged with Aggravated Identity Theft. In addition, Defendant Lombardo was charged with unauthorized disclosure of health information, a felony.
According to the affidavit filed in support of the criminal complaint related to case number 21-CR-2154-CAB, Defendant Lombardo, while employed by a local hospital, stole confidential patient files, and provided them to co-defendants Piekos, Genetti, and Milosavljevic, to submit to EDD for Pandemic Unemployment Insurance benefits.
CLICK HERE for unsealed complaintIn case number 21-CR-2153-CAB, Defendants Lindsay Renee Henning, Garrett Carl Tuggle, Salvatore Compilati, and Ryan David Genetti, were charged with conspiracy to commit wire fraud. Defendants Henning and Tuggle were also charged with aggravated identity theft, and Defendants Henning, Tuggle, and Juan Landon were also charged with conspiracy to distribute MDMA and LSD. Defendant Tuggle was also charged with possessing methamphetamine, cocaine, and heroin with intent to distribute.
According to the affidavit filed in support of the criminal complaint related to case number 21-CR-2153-CAB, the wire fraud conspiracy involved over 108 separate claims that together paid out $1,615,000. The affidavit also describes how defendants conspired to distribute controlled substances.
CLICK HERE for unsealed complaintThe charges are the product of investigations jointly undertaken by the Drug Enforcement Administration (DEA), the U.S. Department of Labor, Office of Investigations (DOL-OI), the San Diego Sheriff’s Department (SDSD), the California Employment Development Department Office of Investigations (EDD OI), United States Postal Inspection Service (USPIS), and Homeland Security Investigations (HSI). Investigators initiated investigations in both cases after traffic stops led to the discovery of contraband and text messages on cellular phones laying out the schemes. The text messages were corroborated through court-authorized searches of phones and residences and by a detailed analysis of EDD databases.
All defendants except for Juan Landon have made their initial appearance in federal court.
"Pandemic unemployment insurance programs are a critical part of our safety net designed to support hardworking citizens who are suffering during an unprecedented economic downturn. Our office and our law enforcement partners will investigate and prosecute individuals who attempt to steal from these programs designed to assist deserving recipients," said Acting U.S. Attorney Randy Grossman. Grossman commended AUSAs Wong, Casper, Williams, and Strange and the law enforcement agents who investigated these matters.
If you think you are a victim of COVID-19 fraud, immediately report it the FBI (visit ic3.gov, tips.fbi.gov, or call 1-800-CALL-FBI or the San Diego FBI at 858-320-1800.
In addition, the public is urged to report suspected fraud schemes related to COVID-19 by calling the National Center for Disaster Fraud (NCDF) hotline (1-866-720-5721) or by e-mailing the NCDF at [email protected].
Case Number : 21-CR-2154-CABDEFENDANTS
Konrad Piekos Age: 43, Vista, CA
Matthew George Lombardo Age: 52, San Diego, CA
Ryan David Genetti Age: 38 Vista, CA
Dobrila "Bebe" Milosavljevic Age: 40 Vista, CA
SUMMARY OF CHARGES
Count 1: Title 18, United States Code, section 1349 (conspiracy to commit wire fraud)
Maximum penalty: 20 years in prison; fine; penalty assessment
Counts 2 and 3: Title 18, United States Code, section 1028A; (aggravated identity theft)
Maximum penalty: 2 year mandatory minimum term of imprisonment, consecutive to any term of imprisonment imposed for Count 1.
Count 4: Title 42, United States Code, section 1320d-9(b)(3); (wrongful disclosure of individually identifiable health information)
Maximum penalty: 10 years in prison; fine; penalty assessment
AGENCIES
U.S. Drug Enforcement Administration (DEA)
U.S. Department of Labor, Office of the Investigations (DOL-OI)
California Employment Development Department Office of Investigations (EDD-OIG)
California Department of Corrections and Rehabilitation-Investigative Services Unit (CDCR-ISU)
United States Postal Inspection Service (USPIS)
Homeland Security Investigations (HSI).
Case Number : 21-CR-2153-CAB
DEFENDANTS
Lindsay Renee Henning Age: 37 La Mesa, CA
Garret Carl Tuggle Age: 35 San Diego, CA
Salvatore Compilati Age: 39 La Mesa, CA
Ryan David Genetti Age: 38 Vista, CA
Juan Landon Age: 27 Mesa, AZ
SUMMARY OF CHARGES
Counts 1 and 2: Title 21, United States Code, sections 841 and 846 (conspiracy to distribute MDMA and conspiracy to distribute LSD)
Maximum penalty: mandatory minimum 5 years and up to 40 years in prison; fine; penalty assessment
Count 3: Title 18, United States Code, section 1349 (conspiracy to commit wire fraud)
Maximum penalty: 20 years in prison; fine; penalty assessment
Count 4: Title 18, United States Code, section 1028A; (aggravated identity theft)
Maximum penalty: 2 year mandatory minimum term of imprisonment, consecutive to any term of imprisonment imposed for Count 1.
Counts 5 - 7: Title 21, United States Code, section 841 (possession with intent to distribute methamphetamine, cocaine, and heroin)
Maximum penalties:
Count 5 (more than 500 grams of a mixture containing methamphetamine) mandatory minimum 10 years and up to life in prison; fine; penalty assessment
Count 6 (cocaine) up to 20 years in prison and up to life in prison; fine; penalty assessment
Count 7 (heroin) up to 20 years in prison and up to life in prison; fine; penalty assessment
AGENCIESU.S. Drug Enforcement Administration (DEA)
San Diego Sheriff’s Department (SDSD)
U.S. Department of Labor, Office of Investigations (DOL-OI)
California Employment Development Department Office of Investigations (EDD-OIG)
California Department of Corrections and Rehabilitation-Investigative Services Unit (CDCR-ISU)
United States Postal Inspection Service (USPIS)
Homeland Security Investigations (HSI).
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Former Financial Controller Admits to Embezzling Almost Half a Million Dollars from Family-Owned San Diego BusinessRead the Press Release
NEWS RELEASE SUMMARY – July 21, 2021
SAN DIEGO – Derick Jonathan Cameron of Vancouver, Washington pleaded guilty in federal court today to wire fraud, admitting that while employed as the Financial Controller for San Diego-based RAL Investment Corporation, he embezzled more than $400,000.
In a hearing before U.S. Magistrate Judge Jill L. Burkhardt, Cameron admitted he abused his access to the company’s accounting software and issued more than 200 unauthorized checks to himself using the electronic signature of the company’s CFO and deposited them into his personal bank account. He then concealed the payments by manipulating the company’s accounting records to make it appear that each check was issued to a legitimate third-party vendor for a business expense. The company discovered Cameron’s fraudulent activity in April 2018, fired Cameron, and reported the conduct to law enforcement when Cameron was unable to make his promised repayments on schedule.
"The impact of fraud on small businesses can be devastating,” said Acting U.S. Attorney Randy Grossman. “This defendant abused his position of trust to enrich himself, and he has been held to account for his crime.” Grossman praised Assistant U.S. Attorney Rebecca Kanter and the FBI case agents for their work handling this case.
“Mr. Cameron treated his job as Financial Controller as his own private expense account thinking he deserved more money,” said FBI Special Agent in Charge Suzanne Turner. “His actions put the livelihood of the business in danger and hopefully today’s guilty plea brings a sense of justice and closure to the victim in this case.”
Cameron is scheduled to be sentenced on October 18, 2021 at 9:30 a.m. before U.S. District Judge Todd W. Robinson.
DEFENDANT Case Number 21cr2128-TWR
Derick Jonathan Cameron Age: 37 Vancouver, Washington
SUMMARY OF CHARGES
Wire Fraud – Title 18, U.S.C., Section 1343
Maximum penalty: Twenty years in prison and $250,000 fine, or twice the gain/loss, whichever is greater
AGENCY
Federal Bureau of Investigation
Four Chinese Nationals Working with the Ministry of State Security Charged with Global Computer Intrusion Campaign Targeting Intellectual Property and Confidential Business Information, Including Infectious Disease ResearchRead the Press Release
Assistant U. S. Attorney Fred Sheppard (619) 546-8237
SAN DIEGO – A federal grand jury returned an indictment charging four nationals and residents of the People’s Republic of China with a campaign to hack into the computer systems of dozens of victim companies, universities, and government entities in the United States and abroad between 2011 and 2018.
Click to see the INDICTMENTThe indictment, which was returned in May and unsealed on Friday, alleges that much of the conspiracy’s theft was focused on information that was of significant economic benefit to China’s companies and commercial sectors, including information that would allow the circumvention of lengthy and resource-intensive research and development processes. The defendants and conspirators at the Hainan State Security Department (HSSD) sought to obfuscate the Chinese government’s role in such theft by establishing a front company, Hainan Xiandun Technology Development Co., Ltd. (“海南仙盾”) (Hainan Xiandun), since disbanded, to operate out of Haikou City, Hainan Province.
The two-count indictment alleges that Ding Xiaoyang (丁晓阳), Cheng Qingmin (程庆民), and Zhu Yunmin (朱允敏), were HSSD officers responsible for coordinating, facilitating, and managing computer hackers and linguists at Hainan Xiandun and other Ministry of State Security (MSS) front companies to conduct hacking for the benefit of China and its state-owned and sponsored instrumentalities. The indictment alleges that Wu Shurong (吴淑荣), was a computer hacker who, as part of his job duties at Hainan Xiandun, created malware, hacked into computer systems operated by foreign governments, companies, and universities, and supervised other Hainan Xiandun hackers.
The conspiracy’s hacking campaign targeted victims in the United States, Austria, Cambodia, Canada, Germany, Indonesia, Malaysia, Norway, Saudi Arabia, South Africa, Switzerland, and the United Kingdom. Targeted industries included, among others, aviation, defense, education, government, healthcare, biopharmaceutical, and maritime. Stolen trade secrets and confidential business information included, among other things, sensitive technologies used for submersibles and autonomous vehicles, specialty chemical formulas, commercial aircraft servicing, proprietary genetic-sequencing technology and data, and foreign information to support China’s efforts to secure contracts for state-owned enterprises within the targeted country (e.g., large-scale high-speed railway development projects). At research institutes and universities, the conspiracy targeted infectious disease research related to Ebola, MERS, HIV/AIDS, Marburg, and Tularemia.
As alleged, the charged MSS officers coordinated with staff and professors at various universities in Hainan and elsewhere in China to further the conspiracy’s goals. Not only did such universities assist the MSS in identifying and recruiting hackers and linguists to penetrate and steal from the computer networks of targeted entities, including peers at many foreign universities, but personnel at one identified Hainan-based university also helped support and manage Hainan Xiandun as a front company, including through payroll, benefits, and a mailing address.
Lead defendant Ding Xiaoyang accepts an award for young leaders from China’s Ministry of State Security in May 2018 while he and other MSS intelligence officers were allegedly hacking and stealing sensitive intellectual property from around the world.“These criminal charges once again highlight China continues to use cyber-enabled attacks to steal what other countries make, in flagrant disregard of its bilateral and multilateral commitments,” said Deputy Attorney General Lisa O. Monaco. “The breadth and duration of China’s hacking campaigns, including these efforts targeting a dozen countries across sectors ranging from healthcare and biomedical research to aviation and defense, remind us that no country or industry is safe. Today’s international condemnation shows that they world wants fair rules, where countries invest in innovation, not theft.”
“This indictment alleges a worldwide hacking and economic espionage campaign led by the government of China,” said Acting U.S. Attorney Randy Grossman. “The defendants include foreign intelligence officials who orchestrated the alleged offenses, and the indictment demonstrates how China’s government made a deliberate choice to cheat and steal instead of innovate. These offenses threaten our economy and national security, and this prosecution reflects the Department of Justice’s commitment and ability to hold individuals and nations accountable for stealing the ideas and intellectual achievements of our nation’s best and brightest people.”
“The FBI alongside our federal and international partners, remains committed to imposing risk and consequences on these malicious cyber actors here in the U.S. and abroad,” said Deputy Director Paul M. Abbate of the FBI. “We will not allow the Chinese government to continue to use these tactics to obtain unfair economic advantage for its companies and commercial sectors through criminal intrusion and theft. With these types of actions, the Chinese government continues to undercut its own claims of being a trusted and effective partner in the international community.”
“The FBI’s San Diego field office is committed to protecting the people of the United States and the community of San Diego, to include our universities, health care systems, research institutes, and defense contractors,” said Special Agent in Charge Suzanne Turner of the FBI’s San Diego Field Office. “The charges outlined today demonstrate China’s continued, persistent computer intrusion efforts, which will not be tolerated here or abroad. We stand steadfast with our law enforcement partners in the United States and around the world and will continue to hold accountable those who commit economic espionage and theft of intellectual property.”
The defendants’ activity had been previously identified by private sector security researchers, who have referred to the group as Advanced Persistent Threat (APT) 40, BRONZE, MOHAWK, FEVERDREAM, G0065, Gadolinium, GreenCrash, Hellsing, Kryptonite Panda, Leviathan, Mudcarp, Periscope, Temp.Periscope, and Temp.Jumper.
According to the indictment, to gain initial access to victim networks, the conspiracy sent fraudulent spearphishing emails, that were buttressed by fictitious online profiles and contained links to doppleganger domain names, which were created to mimic or resemble the domains of legitimate companies. In some instances, the conspiracy used hijacked credentials, and the access they provided, to launch spearphishing campaigns against other users within the same victim entity or at other targeted entities. The conspiracy also used multiple and evolving sets of sophisticated malware, including both-publicly available and customized malware to obtain, expand, and maintain unauthorized access to victim computers and networks. The conspiracy’s malware included those identified by security researchers as BADFLICK aka GreenCrash; PHOTO, aka Derusbi, MURKYTOP aka mt.exe; and HOMEFRY aka dp.dll. Such malware allowed for initial and continued intrusions into victim systems, lateral movement within a system, and theft of credentials, including administrator passwords.
The conspiracy often used anonymizer services, such as The Onion Router (TOR), to access malware on victim networks and manage their hacking infrastructure, including servers, domains, and email accounts. The conspiracy further attempted to obscure its hacking activities through other third-party services. For example, the conspiracy used GitHub to both store malware and stolen data, which was concealed using steganography. The conspiracy also used Dropbox Application Programming Interface (API) keys in commands to upload stolen data directly to conspiracy-controlled Dropbox accounts to make it appear to network defenders that such data exfiltration was an employee’s legitimate use of the Dropbox service.
Coinciding with today’s announcement, to enhance private sector network defense efforts against the conspirators, the FBI and the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA) released a Joint Cybersecurity Advisory Joint Cybersecurity Advisory containing these and further technical details, indicators of compromise, and mitigation measures.
The defendants are each charged with one count of conspiracy to commit computer fraud, which carries a maximum sentence of five years in prison, and one count of conspiracy to commit economic espionage, which carries a maximum sentence of 15 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the assigned judge.
The investigation was conducted jointly by the U.S. Attorney’s Office for the Southern District of California, the National Security Division’s Counterintelligence and Export Controls Section, and the FBI’s San Diego Field Office. The FBI’s Cyber Division, Cyber Assistant Legal Attachés and Legal Attachés in countries around the world provided essential support. Numerous victims cooperated and provided valuable assistance in the investigation.
Assistant U.S. Attorneys Fred Sheppard and Sabrina Feve of the Southern District of California and Trial Attorney Matthew McKenzie of the National Security Division’s Counterintelligence and Export Control Section are prosecuting this case.
The details contained in the charging document are allegations. The defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
DEFENDANTS Case Number 21cr1622
Ding Xiaoyang Age: 35 Henan Province
aka Ding Hao
aka Manager Chen
Cheng Qingmin Age Unknown Unknown
aka Manager Cheng
Zhu Yunmin Age: 37 Hainan Province
aka Zhu Rong,
Wu Shurong Age: 39 Hainan Province
aka goodperson,
aka ha0r3n,
aka Shi Lei
SUMMARY OF CHARGES
Conspiracy to Damage Protected Computers – Title 18, U.S.C., Secs. 371, 1030(a)(2)(B) and
(C), 1030(c)(2)(B)(i) and (iii), 1030(a)(5)(A), and 1030(c)(4)(B)(i)
Maximum penalty: Five years in prison and $250,000 fine
Conspiracy to Commit Economic Espionage – Title 18, U.S.C., Sec. 1831 ( 5)
Maximum penalty: Fifteen years in prison and $5 million fine
Criminal Forfeiture – Title 18, U.S.C., Sec. 982(a)(l) and (b)(l)
AGENCY
Federal Bureau of Investigation
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Four Chinese Nationals Working with the Ministry of State Security Charged with Global Computer Intrusion Campaign Targeting Intellectual Property and Confidential Business Information, Including Infectious Disease ResearchRead the Press Release
A federal grand jury in San Diego, California, returned an indictment in May charging four nationals and residents of the People’s Republic of China with a campaign to hack into the computer systems of dozens of victim companies, universities and government entities in the United States and abroad between 2011 and 2018. The indictment, which was unsealed on Friday, alleges that much of the conspiracy’s theft was focused on information that was of significant economic benefit to China’s companies and commercial sectors, including information that would allow the circumvention of lengthy and resource-intensive research and development processes. The defendants and their Hainan State Security Department (HSSD) conspirators sought to obfuscate the Chinese government’s role in such theft by establishing a front company, Hainan Xiandun Technology Development Co., Ltd. (海南仙盾) (Hainan Xiandun), since disbanded, to operate out of Haikou, Hainan Province.
The two-count indictment alleges that Ding Xiaoyang (丁晓阳), Cheng Qingmin (程庆民) and Zhu Yunmin (朱允敏), were HSSD officers responsible for coordinating, facilitating and managing computer hackers and linguists at Hainan Xiandun and other MSS front companies to conduct hacking for the benefit of China and its state-owned and sponsored instrumentalities. The indictment alleges that Wu Shurong (吴淑荣) was a computer hacker who, as part of his job duties at Hainan Xiandun, created malware, hacked into computer systems operated by foreign governments, companies and universities, and supervised other Hainan Xiandun hackers.
The conspiracy’s hacking campaign targeted victims in the United States, Austria, Cambodia, Canada, Germany, Indonesia, Malaysia, Norway, Saudi Arabia, South Africa, Switzerland and the United Kingdom. Targeted industries included, among others, aviation, defense, education, government, health care, biopharmaceutical and maritime. Stolen trade secrets and confidential business information included, among other things, sensitive technologies used for submersibles and autonomous vehicles, specialty chemical formulas, commercial aircraft servicing, proprietary genetic-sequencing technology and data, and foreign information to support China’s efforts to secure contracts for state-owned enterprises within the targeted country (e.g., large-scale high-speed railway development projects). At research institutes and universities, the conspiracy targeted infectious-disease research related to Ebola, MERS, HIV/AIDS, Marburg and tularemia.
As alleged, the charged MSS officers coordinated with staff and professors at various universities in Hainan and elsewhere in China to further the conspiracy’s goals. Not only did such universities assist the MSS in identifying and recruiting hackers and linguists to penetrate and steal from the computer networks of targeted entities, including peers at many foreign universities, but personnel at one identified Hainan-based university also helped support and manage Hainan Xiandun as a front company, including through payroll, benefits and a mailing address.
“These criminal charges once again highlight that China continues to use cyber-enabled attacks to steal what other countries make, in flagrant disregard of its bilateral and multilateral commitments,” said Deputy Attorney General Lisa O. Monaco. “The breadth and duration of China’s hacking campaigns, including these efforts targeting a dozen countries across sectors ranging from healthcare and biomedical research to aviation and defense, remind us that no country or industry is safe. Today’s international condemnation shows that the world wants fair rules, where countries invest in innovation, not theft.”
“The FBI, alongside our federal and international partners, remains committed to imposing risk and consequences on these malicious cyber actors here in the U.S. and abroad,” said Deputy Director Paul M. Abbate of the FBI. “We will not allow the Chinese government to continue to use these tactics to obtain unfair economic advantage for its companies and commercial sectors through criminal intrusion and theft. With these types of actions, the Chinese government continues to undercut its own claims of being a trusted and effective partner in the international community.”
“This indictment alleges a worldwide hacking and economic espionage campaign led by the government of China,” said Acting U.S. Attorney Randy Grossman for the Southern District of California. “The defendants include foreign intelligence officials who orchestrated the alleged offenses, and the indictment demonstrates how China’s government made a deliberate choice to cheat and steal instead of innovate. These offenses threaten our economy and national security, and this prosecution reflects the Department of Justice’s commitment and ability to hold individuals and nations accountable for stealing the ideas and intellectual achievements of our nation’s best and brightest people.”
“The FBI’s San Diego Field Office is committed to protecting the people of the United States and the community of San Diego, to include our universities, health care systems, research institutes, and defense contractors,” said Special Agent in Charge Suzanne Turner of the FBI’s San Diego Field Office. “The charges outlined today demonstrate China’s continued, persistent computer intrusion efforts, which will not be tolerated here or abroad. We stand steadfast with our law enforcement partners in the United States and around the world and will continue to hold accountable those who commit economic espionage and theft of intellectual property.”
The defendants’ activity had been previously identified by private sector security researchers, who have referred to the group as Advanced Persistent Threat (APT) 40, BRONZE, MOHAWK, FEVERDREAM, G0065, Gadolinium, GreenCrash, Hellsing, Kryptonite Panda, Leviathan, Mudcarp, Periscope, Temp.Periscope and Temp.Jumper.
According to the indictment, to gain initial access to victim networks, the conspiracy sent fraudulent spearphishing emails, that were buttressed by fictitious online profiles and contained links to doppelgänger domain names, which were created to mimic or resemble the domains of legitimate companies. In some instances, the conspiracy used hijacked credentials, and the access they provided, to launch spearphishing campaigns against other users within the same victim entity or at other targeted entities. The conspiracy also used multiple and evolving sets of sophisticated malware, including both publicly available and customized malware, to obtain, expand and maintain unauthorized access to victim computers and networks. The conspiracy’s malware included those identified by security researchers as BADFLICK, aka GreenCrash; PHOTO, aka Derusbi; MURKYTOP, aka mt.exe; and HOMEFRY, aka dp.dll. Such malware allowed for initial and continued intrusions into victim systems, lateral movement within a system, and theft of credentials, including administrator passwords.
The conspiracy often used anonymizer services, such as The Onion Router (TOR), to access malware on victim networks and manage their hacking infrastructure, including servers, domains and email accounts. The conspiracy further attempted to obscure its hacking activities through other third-party services. For example, the conspiracy used GitHub to both store malware and stolen data, which was concealed using steganography. The conspiracy also used Dropbox Application Programming Interface (API) keys in commands to upload stolen data directly to conspiracy-controlled Dropbox accounts to make it appear to network defenders that such data exfiltration was an employee’s legitimate use of the Dropbox service.
Coinciding with today’s announcement, to enhance private sector network defense efforts against the conspirators, the FBI and the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA) released a Joint Cybersecurity Advisory containing these and further technical details, indicators of compromise and mitigation measures.
The defendants are each charged with one count of conspiracy to commit computer fraud, which carries a maximum sentence of five years in prison, and one count of conspiracy to commit economic espionage, which carries a maximum sentence of 15 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the assigned judge.
The investigation was conducted jointly by the U.S. Attorney’s Office for the Southern District of California, the National Security Division’s Counterintelligence and Export Controls Section, and the FBI’s San Diego Field Office. The FBI’s Cyber Division, Cyber Assistant Legal Attachés and Legal Attachés in countries around the world provided essential support. Numerous victims cooperated and provided valuable assistance in the investigation.
Assistant U.S. Attorneys Fred Sheppard and Sabrina Feve of the Southern District of California and Trial Attorney Matthew McKenzie of the National Security Division’s Counterintelligence and Export Control Section are prosecuting this case.
The details contained in the charging document are allegations. The defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Doctor Selling COVID-19 “Cure” Pleads GuiltyRead the Press Release
Assistant U. S. Attorneys Nicholas Pilchak (619) 546-9709 and Jaclyn Stahl (619) 546-8456
NEWS RELEASE SUMMARY – July 16, 2021
SAN DIEGO – Jennings Ryan Staley, a physician who attempted to profit from the pandemic by marketing a “miracle cure” for COVID-19, pleaded guilty in federal court today, admitting that he tried to smuggle hydroxychloroquine into the United States to sell in his coronavirus “treatment kits.”
Staley, the former operator of Skinny Beach Med Spas in and around San Diego, also admitted in his plea agreement that he abused his position of trust as a physician in making the extreme claims, and that he lied to the FBI when confronted about it.
The doctor pleaded guilty to one count of importation contrary to law, admitting that he worked with a Chinese supplier to try to smuggle into the United States a barrel that he believed contained over 26 pounds of hydroxychloroquine powder by mislabeling it as “yam extract.” Staley admitted that he intended to sell the hydroxychloroquine powder in capsules as part of his 2020 business venture selling the COVID-19 “treatment kits.”
In his plea agreement, Staley also admitted that he wrote a prescription for hydroxychloroquine for one of his employees and then misused the employee’s name and personal identifying information and answered questions as though he were the employee to fill the prescription, all without the employee’s knowledge or consent. Staley agreed that he engaged in this conduct in order to obtain more of the drug for his enterprise.
In late March and early April 2020, Staley marketed and sold his treatment kits to Skinny Beach customers. According to the plea agreement, he described his products—which included hydroxychloroquine—as a “one hundred percent” cure, a “magic bullet,” an “amazing weapon,” and “almost too good to be true,” and stated that the products would provide at least six weeks of immunity. Staley admitted that these statements were material to his potential customers, and that as a doctor he abused a position of public trust. An undercover agent purchased six of Staley’s treatment packs for $4,000.
Staley also admitted that he willfully impeded and sought to obstruct the federal investigation into his conduct by lying to federal agents. Specifically, he falsely denied ever claiming that his treatment packages were a “one hundred percent effective cure,” adding “that would be foolish.” Staley likewise falsely claimed that his medical practice would “absolutely” get all relevant information about each family member when sending out medications for a family treatment pack, when just a week earlier, he had dispensed a “family pack” of hydroxychloroquine, chloroquine, generic Viagra, Xanax, and azithromycin to the undercover agent without collecting any medical information from the agent or his five supposed family members.
“While healthcare workers around the world selflessly labored on the frontlines of an international pandemic, this doctor used his position of trust to cash in on COVID-19 fears,” said Acting U.S. Attorney Randy Grossman. “We are committed to protecting the American people from such scams and holding the scammers accountable.” Grossman commended the federal agents from FBI and FDA-OCI, and Assistant U.S. Attorneys Nicholas Pilchak and Jaclyn Stahl, who worked hard pursuing justice in this case. He also commended U.S. Customs and Border Protection for its assistance with the investigation.
“Dr. Staley offered a 'magic bullet' - a guaranteed cure for COVID-19 to people gripped in fear during a global pandemic,” said FBI Special Agent in Charge Suzanne Turner. “Today, Dr. Staley admitted it was all a lie as part of a scam to make a quick buck. The FBI will continue to vigorously pursue doctors who abuse their professions to defraud innocent victims with gimmicks of false hope and promises.”
“The FDA continues to work with its law enforcement partners to protect the public health by identifying, investigating and bringing to justice those who attempt to profit from the pandemic by offering and distributing COVID-19 treatments with unproven ‘miracle cure’ claims to American consumers,” said Special Agent in Charge Lisa L. Malinowski, FDA Office of Criminal Investigations Los Angeles Field Office.
Staley’s next court date is October 8, 2021 before U.S. District Judge Gonzalo Curiel.
On May 17, 2021, Attorney General Merrick Garland established the COVID-19 Fraud Enforcement Task Force, led by the Deputy Attorney General, to bring together the full resources of the federal government to bolster fraud enforcement efforts.
If you think you are a victim of COVID-19 fraud, immediately report it to the FBI (visit ic3.gov, tips.fbi.gov, or call 1-800-CALL-FBI or the San Diego FBI at 858-320-1800). The public is also urged to report suspected fraud schemes related to COVID-19 by calling the National Center for Disaster Fraud (NCDF) hotline (1-866-720-5721) or by e-mailing the NCDF at [email protected].
DEFENDANT Case Number 20cr1227-GPC
Jennings Ryan Staley, M.D. Age: 46 Residence: San Diego, CA
SUMMARY OF CHARGES
Importation Contrary to Law, in violation of Title 18, United States Code, Section 545
Maximum Penalty: Twenty years in prison; fine; special assessment
AGENCIES
Federal Bureau of Investigation
U.S. Food and Drug Administration, Office of Criminal Investigations
U.S. Customs and Border Protection
Border Pesticide Initiative Results in Prosecution of 50 defendants for Smuggling Dangerous ChemicalsRead the Press Release
Assistant U. S. Attorney Melanie K. Pierson (619) 546-7976
NEWS RELEASE SUMMARY – July 9, 2021
SAN DIEGO – A San Diego-based effort to block the smuggling of dangerous Mexican pesticides into the United States has resulted in the prosecution of more than 50 defendants for environmental crimes and the seizure of nearly 1,000 containers of illegal Mexican pesticides so far.
The Border Pesticide Initiative group was formed at the end of 2019 and includes the U.S. Attorney’s Office; the U.S. Department of Justice, Environmental Crimes Section; the U.S. Environmental Protection Agency (EPA); Homeland Security Investigations; the California Department of Toxic Substances Control; and the San Diego City Attorney’s Office.
The initiative began in response to complaints that law enforcement officers were being injured during the eradication of illegal marijuana cultivation sites on public lands by exposure to powerful Mexican pesticides not permitted in the United States.
Of the more than 50 defendants who have been charged federally, 14 were convicted of felonies and 26 were convicted of misdemeanors. The defendants have been ordered to pay more than $60,000 in restitution to cover the cost of disposing of the pesticides. Eight cases have also been filed by the San Diego City Attorney’s Office under California law for possession of pesticides found at the border.
The pesticides imported by these defendants were labeled in Spanish and did not bear any registration number showing that the products were approved by the EPA, as required by law for pesticides intended for use in the United States. The lawful importation of pesticides requires a Notice of Arrival to be filed in advance with the EPA to allow for inspection, which none of the defendants provided.
The pesticides most frequently encountered in these cases are those containing the active ingredients of carborfuran and methamidophos, which are cancelled pesticides not permitted to be sold or distributed in the United States. Carbofuran, sold in Mexico under the trade names Furadan and Qufuran, is classified by the EPA as Toxicity Category I, the highest toxicity category, based upon its lethal potency from absorption by ingestion, contact with skin, and inhalation, and has been cancelled in the United States since 2011.
Methamidophos, sold in Mexico under the trade names Metaldane 600, Tamaron or Monitor, is one of the most acutely toxic organophosphate pesticides and is similar to a class of chemicals that were originally manufactured as chemical warfare nerve agents. Methamidophos was cancelled in the United States in 2009. The application of these chemicals on public lands has been documented to pollute streams and soils and kill wildlife. Moreover, cannabis users are also at risk from exposure to pesticide residues. During the smoking of cannabis, pesticides are transferred directly into the blood stream, increasing the potential for exposure.[1] In one study, the pesticide transfer rate of carbofuran into cannabis smoke from glass pipes was as high as 70 percent of the initial concentration in the plant.
Two of the felony convictions noted above were the result of verdicts rendered by trial juries. On July 9, 2021, Veronica Perez of Hemet, California, was sentenced to 60 days in following a guilty verdict by a federal jury in San Diego in November 2020 related to the charge of smuggling unregistered pesticides into the United States. Perez concealed twenty containers of zinc phosphide (sold under the Mexican trade name Fosfuro de Zinc) in her purse and failed to declare the items at the border when she attempted to cross into the United States from Mexico on July 11, 2019. Consumption of a single zinc phosphide pellet can be lethal to a small bird or mammal.[2] Ingestion of seven drops to one teaspoon of zinc phosphide would likely kill a 150-pound person.[3] Perez also had Qufuran and Metaldane in her vehicle.
On May 26, 2021, Selene Elizabeth Barraza of Visalia, California, was convicted by a federal jury in San Diego of smuggling 25 containers of illegal Mexican pesticides and fertilizer, including Metaldane, and Furadan, into the United States from Mexico. On February 26, 2020, Barraza failed to declare the pesticide containers when she attempted to enter the United States with the pesticides concealed under the middle row seats in her vehicle. Barraza is scheduled to be sentenced on August 20, 2021.
On June 18, 2021, Felix Gutierrez Valencia was sentenced to 90 days in custody, ordered to pay a fine of $2,500 and restitution of $8,807 for the cost of disposal of the pesticides he smuggled, and also ordered to perform 100 hours of community service during his three years of supervised release. Gutierrez had smuggled 48 containers of various pesticides, including Furadan, Monitor and Rodentox (which contains zinc phosphide). Gutierrez had concealed some of the pesticides in cereal boxes and boxes of cookies. While his case was pending, Gutierrez offered another individual $40/bottle to smuggle pesticides. That person was caught at the border with another 38 containers of pesticides, including Furadan.
On March 26, 2021, Beatriz Santillan was sentenced to 70 days in prison and ordered to pay $20,079 restitution after pleading guilty to smuggling 56 containers of seven different types of illegal Mexican pesticides, including Qufuran, Metaldane and zinc phosphide (under the Mexican trade name Rodentox) into the United States from Mexico. Santillan was in possession of receipts showing three prior purchases of similar pesticides, and a search of her phone revealed chats with associates regarding the tending and cultivation of marijuana plants, including the use of the pesticides.
On April 27, 2021, Saul Flores Banuelos was sentenced to 60 days in prison and $1,200 restitution after pleading guilty to smuggling Qufuran, alcohol and medications into the United States from Mexico.
“All of these law enforcement agencies have come together to protect people, wildlife and the environment from extremely dangerous pesticides, and the result has been an overwhelming success,” said Acting U.S. Attorney Randy Grossman. “But this effort has also been a sobering reminder that trafficking in pesticides is a prolific problem. Those who commit these crimes care about profit, not people, so this ongoing enforcement action should force them to rethink their priorities.” Grossman commended the exemplary work of prosecutor Melanie Pierson, who specializes in cases related to environmental protection, and Environment and Natural Resources Division Trial Attorney Stephen Da Ponte, as well as the federal and state agencies participating in the initiative, including the U.S. Environmental Protection Agency (EPA); Homeland Security Investigations (HSI); the California Department of Toxic Substances Control; the U.S. Department of Justice, Environmental Crimes Section; and the San Diego City Attorney’s Office.
“This initiative demonstrates our commitment to protecting public lands, human health, and the environment through continued enforcement of the laws regulating the importation, sale, and distribution of dangerous pesticides,” said Jean E. Williams, Acting Assistant Attorney General for the Environment and Natural Resources Division. “The Department of Justice will continue to work closely with our federal agency and state partners to ensure that those who import and use these prohibited chemicals are held fully accountable for their crimes.”
“The significant number of individuals arrested throughout this multi-agency initiative highlights the pervasiveness and dangers of illegal substances being smuggled across the U.S.-Mexico border,” said Cardell T. Morant, Special Agent in Charge of HSI San Diego. “The chemicals banned from importation into the U.S. are highly toxic and hazardous to humans, wildlife and the environment. These smugglers often use the banned chemicals for cultivating cannabis. What’s most disturbing is that some of the chemicals can be transferred directly into the bloodstream of cannabis users, so it’s important that HSI and all the partner agencies participating in this initiative continue to prevent these toxic chemicals from being smuggled into the U.S.”
“The results of these recent prosecutions clearly demonstrate that individuals intentionally violating pesticide and smuggling laws will be held responsible for their crimes.” said Scot Adair, Special Agent in Charge of the EPA’s criminal enforcement program in California. “EPA will continue to work diligently on the Border Pesticide Initiative with our law enforcement partners. We are committed to holding responsible parties accountable for actions that put entire communities at risk.”
“This is an example of what can be accomplished when multiple agencies work together for a common goal to protect human health and the environment,” said Hansen Pang, Chief Investigator for the Office of Criminal Investigations of the California Department of Toxic Substances Control.
“Protecting our region from environmental toxins is an office priority,” San Diego City Attorney Mara W. Elliott said. “As part of the Border Pesticide Initiative, the City Attorney’s Office works closely with the U.S. Attorney and other law enforcement agencies to protect Californians from exposure to lethal chemicals and hold accountable those who illegally traffic these dangerous substances.”
DEFENDANTS Case Numbers
Veronica Perez Age: 40 Hemet, CA 20cr0869-DMS
Selene Barraza Age: 34 Visalia, CA 20cr1442-DMS
Beatriz Santillan Age: 29 Menifee, CA 20cr2178-GPC
Saul Flores Banuelos Age: 56 Apple Valley, CA 20cr2179-JLS
Felix Gutierrez Valencia Age: 40 Perris, CA 20cr2058-JLS
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; California Department of Toxic Substances Control, Office of Criminal Investigations
[1] Leung, M.C.K., M.H. Silva, A.J. Palumbo, P.N. Lohstroh, S.E. Koshlukova, S.F. DuTeaux. 2019. Adverse outcome pathway of developmental neurotoxicity resulting from prenatal exposures to cannabis contaminated with organophosphate pesticide residues. Reproductive Toxicology. 85: 12-18.
[2] EPA. 2004. Potential Risks of Nine Rodenticides to Birds and Nontarget Mammals: A Comparative Approach; Office of Prevention, Pesticides, and Toxic Substances, Office of Pesticide Programs, U.S. Government Printing Office: Washington, DC, 2004.
[3] NOAA CAMEO Chemicals, version 2.7.1 rev 1. Zinc Phosphide Chemical Datasheet. National Ocean Service, Office of Response and Restoration.
El Cajon Resident Pleads Guilty to Selling Counterfeit Pills that Caused Death of Nineteen-Year-OldRead the Press Release
Assistant U. S. Attorneys Michael A. Deshong and Adam Gordon (619) 546-9290
NEWS RELEASE SUMMARY—July 8, 2021
SAN DIEGO—Olatunde James Temitope Akintonde of El Cajon pleaded guilty in federal court today, admitting that he sold fentanyl-laced pills that caused the death of a nineteen-year-old Santee man, identified in court records as S.J.G., in March of 2019.
According to his plea agreement, Akintonde admitted that he sent messages to S.J.G. through social media on February 28, 2019, to coordinate the 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 in his plea agreement 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.
“The epidemic of counterfeit fentanyl-laced pills poisoning our community has raised the stakes of drug dealing considerably,” said Acting U.S. Attorney Randy Grossman. “Dealers who ignore these risks and carry on with their deadly trade will be pursued and prosecuted.” Grossman praised prosecutors Michael Deshong and Adam Gordon as well as the Drug Enforcement Administration’s Narcotics Task Force Team 10, 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 fentanyl-related overdose deaths continue to rise at an alarming rate in San Diego County and throughout the United States, DEA is determined to track down these drug dealers and bring them to justice,” said DEA Special Agent in Charge John W. Callery.
Akintonde is scheduled to be sentenced on September 24, 2021 at 10 a.m. before U.S. District Judge Janis L. Sammartino.
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
Sixty Defendants Charged in Nationwide Takedown of Sinaloa Cartel Methamphetamine NetworkRead the Press Release
For more information contact:
Assistant U. S. Attorney Matthew J. Sutton (619) 546-8941, Special Assistant U.S. Attorney Nicole Bredariol (619) 546-8419, and Assistant U. S. Attorney Amy B. Wang (619) 546-6968
Click
HERE for the indictment
Click HERE for the search warrantSAN DIEGO – An indictment was unsealed today in federal court charging 60 members of a San Diego-based international methamphetamine distribution network tied to the Sinaloa Cartel with drug trafficking, money laundering and firearms offenses.
During the last month, hundreds of federal, state, and local law enforcement agents and officers have arrested dozens of defendants and searched multiple locations throughout San Diego County and in five states. As of today, 44 of the 60 defendants are either in federal or state custody, and the search continues for 16 defendants. 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. Law enforcement officials are also seeking the forfeit of residences, high-end vehicles, and bulk cash belonging to these defendants.
According to the indictment and other publicly filed documents, over the last several years, this complex San Diego-based network obtained thousands of kilograms of methamphetamine from the Sinaloa Cartel to smuggle across the international border concealed in hidden compartments in passenger cars and motorcycles. The defendants then used these cars and motorcycles, along with trains, commercial airlines, the U.S. Mail, and commercial delivery services like FedEx and UPS to distribute that methamphetamine to dozens of sub-distributors located throughout San Diego County, the United States, and the world, including Hawaii, Arizona, Texas, Kansas, Iowa, Indiana, Michigan, Minnesota, Missouri, Connecticut, New York, New Jersey, Massachusetts, Kentucky, as well as Australia and New Zealand.
In return, tens of thousands of dollars in narcotics proceeds were returned to the network’s leaders via shipments of bulk cash, structured cash deposits into bank accounts, and money transfer systems like MoneyGram, Western Union, PayPal, Zelle, Venmo, and Cash App. And to protect their illegal operations, the defendants allegedly possessed dozens of firearms and used encrypted communication providers to communicate with each other. This drug trafficking and money laundering continued unabated throughout the COVID-19 global pandemic.
Despite their sophisticated efforts, law enforcement successfully penetrated this network with a variety of investigative techniques, including physical surveillance, obtaining phone records and financial documents, undercover agents, search warrants, as well as a six-month federal wiretap to intercept the communications and track the locations of the defendants.
Today we have dealt a serious blow to this San Diego-based international drug trafficking network with ties to the Sinaloa Cartel,” said Acting U.S. Attorney Randy Grossman. “The intersection of drug dealing and gun possession inevitably leads to violence in our communities. By dismantling this network, the Department of Justice reaffirms its unwavering commitment to reducing violent crime and building a San Diego where all our citizens are safe.”
“DEA is enhancing its efforts to disrupt, dismantle and destroy the most violent drug trafficking organizations across the country under Operation Crystal Shield,” said DEA Special Agent in Charge John W. Callery. “By dismantling this sophisticated drug trafficking network, DEA and our law enforcement partners have prevented significant quantities of methamphetamine and numerous firearms from making their way to the streets of San Diego and other neighborhoods throughout the United States. Drug trafficking is a violent crime, that impacts the safety and security of our communities – and the drug and firearm seizures made in this investigation are testament to that.”
“The primary motivation of drug traffickers is greed,” said Ryan L. Korner, Special Agent in Charge for IRS-Criminal Investigation’s Los Angeles Field Office. “IRS-CI will continue to work tirelessly alongside our partner agencies to stop the flow of narcotics and narcotics proceeds that are killing innocent Americans, and to ensure that crime doesn’t pay—that those individuals, like the 60 defendants indicted and arrested in this case, are brought to justice.”
“The U.S. Postal Inspection Service is committed to preserving the integrity of the mail by ridding the mail of involvement in drug trafficking,” said US Postal Inspection Service Acting Inspector in Charge Eric Shen of the Los Angeles Division. “This operation clearly shows that by combining our strengths and resources with all the involved agencies which include, federal, state and local law enforcement agencies we can disrupt their drug trafficking organizations to protect our communities.”
Acting U.S. Attorney Grossman also praised federal, state, and local law enforcement for the coordinated team effort in the culmination of this investigation. This case was led by the Drug Enforcement Administration’s Narcotics Task Force (NTF), the Internal Revenue Service - Criminal Investigation, and the United States Postal Inspection Service. The NTF is a DEA-led task force comprised of federal and local law enforcement from the DEA, San Diego County Sheriff’s Department, the San Diego Police Department, the Escondido Police Department, the United States Border Patrol, and the San Diego County Probation Office. Agents and officers from the United States Marshals Service, Homeland Security Investigations, Customs and Border Protection, the Bureau of Alcohol, Tobacco, Firearms & Explosives, and the Federal Bureau of Prisons, also provided vital assistance for the investigation. Attorneys from the Department of Justice, Office of Enforcement Operations, Electronic Surveillance Unit, likewise provided critical work as part of the investigative team.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
Assistant U.S. Attorneys Matthew J. Sutton, Nicole Bredariol, and Amy B. Wang of the U.S. Attorney’s Office for the Southern District of California are prosecuting the case, with assistance from Paralegal Specialists Kathleen Jordano and Leticia Adams.
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 21cr1559-H
(D1) Reyes Espinoza Age: 35 San Ysidro, CA
(D2) David Villegas Age: 49 San Diego, CA
(D3) John Bomenka Age: 54 San Diego, CA
(D4) Dennis Jones Age: 49 San Diego, CA
(D5) Darren Mosier Age: 59 San Diego, CA
(D6) Frank Tucker Age: 63 San Diego, CA
(D7) Charles Miller Age: 52 San Diego, CA
*(D8) Carlos Espinoza Age: 28 Tijuana, MX
(D9) Mario Espinoza Age: 20 Tijuana, MX
(D10) Jaron Hillyer Age: 30 San Diego, CA
(D11) Kristina Brown Age: 32 San Diego, CA
(D12) Danny Miller Age: 52 San Diego, CA
(D13) Shawn Morrill Age: 49 San Diego, CA
*(D14) Hilleal Grant Age: 51 San Diego, CA
*(D15) Lewis Rich Age: 59 San Diego, CA
(D16) Cameron Graff Age: 29 San Diego, CA
*(D17) Terry Haith Age: 60 San Diego, CA
(D18) Tansy Steinhauer Age: 51 San Diego, CA
*(D19) Jessica Pomeroy Age: 30 San Diego, CA
*(D20) Shadow Segura Age: 23 Houston, TX
(D21) Jasmine Lucas Age: 50 San Diego, CA
(D22) Philip Abbas Age: 42 San Diego, CA
*(D23) Peter Fuller Age: 63 San Diego, CA
(D24) Eduardo Osuna Age: 41 San Diego, CA
(D25) Frank Carrillo Age: 45 San Diego, CA
(D26) Stephen Myrick Age: 45 San Diego, CA
(D27) Gloria Sandoval Age: 40 San Diego, CA
*(D28) Ashley Hilton Age: 42 Houston, TX
(D29) Joseph Occhiogrosso Age: 44 Brooklyn, NY
(D30) Gary Beasley Age: 39 San Diego, CA
*(D31) Arnulfo Rodriguez Age: 38 San Diego, CA
(D32) Alexandro Larios-Flores Age: 24 San Diego, CA
*(D33) Jose Vargas Age: 31 San Diego, CA
(D34) Michael Nagle Age: 50 San Diego, CA
*(D35) Raymond Sterling Age: 51 San Diego, CA
(D36) Terry Tyler Age: 49 San Diego, CA
(D37) Victor Yamasaki Age: 59 San Diego, CA
(D38) Chris Paschke Age: 57 San Diego, CA
(D39) Charles Gerardi Age: 57 Houston, TX
(D40) Christian Lopez-Villegas Age: 34 San Ysidro, CA
(D41) David Santa Maria Age: 49 San Diego, CA
(D42) Melvin Johnson Age: 44 San Diego, CA
(D43) Daniel Babuata Age: 34 San Diego, CA
*(D44) Garrett Steele Age: 40 San Diego, CA
(D45) Vien Trinh Age: 62 San Diego, CA
*(D46) Troy Prater Age: 46 San Diego, CA
*(D47) Sharon Landhan Age: 44 San Diego, CA
(D48) Gabriel Askay Age: 44 San Diego, CA
(D49) Patrick Lane Age: 57 San Diego, CA
(D50) Kevin Tobin Age: 65 San Diego, CA
(D51) James Ellerbe Age: 68 San Diego, CA
(D52) Hope Stoneking Age: 35 San Diego, CA
(D53) Tasha Almanza Age: 42 San Diego, CA
*(D54) Jason Ferguson Age: 48 San Diego, CA
(D55) Kelle Ferguson Age: 52 San Diego, CA
*(D56) Roger Desroche Age: 74 San Diego, CA
(D57) Steven Brandt Age: 57 San Diego, CA
(D58) Esteban Gastelum-Sanchez Age: 42 San Diego, CA
(D59) Tara Scroggins Age: 45 San Diego, CA
(D60) Debbie Hill Age: 59 San Diego, CA
*Fugitives
SUMMARY OF CHARGES
Conspiracy to Distribute Methamphetamine (21 U.S.C. §§ 841(a)(1) and 846)
Conspiracy to Launder Monetary Instruments (18 U.S.C. §§ 1956(a)(1) and (h))
Possession with Intent to Distribute Methamphetamine (21 U.S.C., § 841(a)(1))
Importation of Methamphetamine (21 U.S.C. §§ 952 and 960)
Felon in Possession of a Firearm (18 U.S.C. § 922(g)(1)
Maximum Penalties: For the drug charges, term of custody including a mandatory minimum 10 years and up to life imprisonment, $10 million fine and a lifetime of supervised release. For money laundering charges, term of custody up to 20 years’ imprisonment, a fine of $500,000 or twice the value of the monetary instrument or funds involved, and three years of supervised release. For the firearms charges, term of custody up to 10 years imprisonment, and a $250,000 fine.
AGENCIES
Drug Enforcement Administration, Narcotics Task Force
Internal Revenue Service - Criminal Investigation
United States Postal Inspection Service
San Diego County Sheriff’s Department
San Diego Police Department
Escondido Police Department
United States Border Patrol
San Diego County Probation Office
United States Marshals Service
Homeland Security Investigations
Bureau of Alcohol, Tobacco, Firearms & Explosives
Federal Bureau of Prisons
San Diego County District Attorney’s Office
Department of Justice, Organized Crime Drug Enforcement Task Forces
Department of Justice, Office of Enforcement Operations, Electronic Surveillance Unit
U.S. Attorney’s Office for the District of Massachusetts
U.S. Attorney’s Office for the Southern District of New York
U.S. Attorney’s Office for the Eastern District of Kentucky
U.S. Attorney’s Office for the Western District of Texas
U.S. Attorney’s Office for the Central District of California
U.S. Attorney’s Office for the District of Minnesota
U.S. Attorney’s Office for the Northern District of Iowa
U.S. Attorney’s Office for the Western District of Michigan
U.S. Attorney’s Office for the Eastern District of Michigan
Defendant Sentenced for Mail Theft and Possession of Stolen Mail, including Stimulus ChecksRead the Press Release
Assistant U. S. Attorney Vivian Sapthavee (619) 546-7696
NEWS RELEASE SUMMARY – June 28, 2021
SAN DIEGO – Theodore Bennett was sentenced in federal court today to 18 months in custody for mail theft and possession of stolen mail.
Bennett pleaded guilty in December 2020, admitting that on four different occasions in the summer of 2020, he pried open at least 94 post office boxes with a flathead screwdriver and prybar at post offices in San Diego and Imperial Counties. According to his plea agreement, he stole dozens of pieces of mail containing credit cards plus $6,500 in checks that belonged to individuals, business, and non-profit organizations and included Economic Impact Payments (stimulus checks) issued by the U.S. Department of Treasury.
At the time of his arrest, law enforcement agents discovered hundreds of pieces of stolen mail in Bennett’s possession, including the stolen stimulus checks. Bennett was eventually linked to at least three Post Office break-ins in the Southern District of California.
“Every American has the right to receive every piece of mail sent to them,” said Acting U.S. Attorney Randy Grossman. “When mail is stolen, particularly envelopes containing desperately-needed income during a pandemic, the impact on victims can be devastating. When you see someone raiding a mailbox or notice suspicious activity involving the mail, please immediately report this to the U.S. Postal Inspection Service and local law enforcement. Our office will vigorously investigate and prosecute these matters with our law enforcement partners.
Grossman commended Assistant U.S. Attorney Vivian Sapthavee and former Assistant U.S. Attorney Nicholas Hernandez, as well as the law enforcement officers in multiple agencies who investigated this case.
“Postal inspectors work aggressively to combat mail theft,” said Eric Shen, Acting Inspector in Charge of the Los Angeles Division. “In collaboration with U.S. Border Patrol Agents and the Treasury Inspector General for Tax Administration, we were able to prevent countless others from being victimized by this individual, who could have caused even more financial damage and personal inconvenience.”
DEFENDANT Case Number 20-CR-2650-AJB
Theodore Bennett Age: 33 Residence: Imperial County, CA
SUMMARY OF CHARGES
Mail Theft, 18 U.S.C. §1708 (Three Counts)
Possession of Stolen Mail, 18 U.S.C. §1708 (One Count)
Maximum Penalty: Five years in prison (per count); supervised release
AGENCY
U.S. Postal Inspection Service
U.S. Border Patrol
U.S. Dept. of Treasury
Pacific Beach Resident Sentenced to 15 Years for Distributing Fentanyl that Caused Two Overdoses, One of Them FatalRead the Press Release
Assistant U. S. Attorney Michael A. Deshong (619) 546-9290
NEWS RELEASE SUMMARY – June 25, 2021
SAN DIEGO – Pacific Beach resident Maya Kol was sentenced in federal court today to 15 years in prison for selling fentanyl powder that caused the death of one man and sent another to the hospital over Labor Day weekend in September 2018. Two other men—including the source of Kol’s fentanyl—also fatally overdosed that weekend from the same batch of fentanyl powder, which was misrepresented as cocaine when it was sold to users, including the victims.
Kol, a Cambodian national living illegally in San Diego, previously admitted that he purchased the fentanyl powder believing it to be cocaine. However, after he sampled the powder he noticed it tasted different and then became woozy and nearly lost his balance from the effects of it. Despite his own troubling experience with the powder, Kol sold the powder to others and told them it was cocaine.
According to his plea agreement, on September 7, 2018, Kol met three individuals, identified in court records as J.E., J.H., and L.S., and delivered to them one-half gram of fentanyl powder which he represented as cocaine. Several hours later, L.S. contacted Kol asking for help. Kol arrived to L.S. and J.H.’s apartment and foundJ.E. and J.H. non-responsive. When Kol realized authorities would be coming to the scene, he went back to his home and flushed his remaining fentanyl powder down the toilet.
J.E. died from the fentanyl powder Kol sold to him. J.H. survived the ordeal after first responders administered Narcan, a drug prescribed to treat an opioid overdose in an emergency situation, and rushed him to the hospital. L.S. was admitted to the hospital the following day for lingering symptoms. A subsequent search of Kol’s residence uncovered more than $5,000 in cash, scales, materials for operating a butane honey oil laboratory, and other indications of drug sales.
J.E. was 47 years old and is survived by his wife. Hiss death was one of three overdose deaths that occurred in Pacific Beach over Labor Day weekend in 2018, including the individual who sold the fentanyl powder to Kol. Kol is not charged with the other deaths.
“Many people are dying because of dealers like Kol, who know the extreme danger of what they are doing but do it anyway,” said Acting U.S. Attorney Randy Grossman. “Dealers do not care about their customers. They care about money. As this case tragically shows, illegal drugs laced with fentanyl are deadly.” Grossman praised prosecutor Michael Deshong and law enforcement partners for their excellent work on this case.
“The DEA is increasingly seeing fentanyl in drugs purported to be other street drugs, such as cocaine in this case, and these drugs are likely to cause you to overdose,” said DEA Special Agent in Charge John W. Callery. “We don’t want to investigate your death. Your life matters. Help with addiction is available by calling the San Diego County’s Access and Crisis line at (888) 724-7240.”
This case is the result of ongoing efforts by the U.S. Attorney’s Office, the San Diego County District Attorney’s Office, and multiple law enforcement agencies to investigate and prosecute the distribution of dangerous illegal drugs that result in overdose deaths.
Fentanyl-related deaths are rapidly climbing to unprecedented levels. The San Diego County Medical Examiner’s Office has predicted a 50 percent increase in deaths from 2020 to 2021. Fentanyl-related deaths more than doubled during the previous two years.
In July 2018, Narcotics Task Force Team 10 was created to address drug overdose deaths in San Diego County. Team 10 led the investigation into the cluster of fentanyl drug overdoses in Pacific Beach in September 2018.
DEFENDANTS Case Number 19cr1277-CAB
Maya Kol Age: 42 Pacific Beach, CA
SUMMARY OF CHARGES
Distribution of Fentanyl – Title 21, U.S.C., Section 841(a)(1)
Maximum Penalty: Twenty years in prison
AGENCIES
Drug Enforcement Administration
San Diego Police Department
Homeland Security Investigations
California Department of Health Care Services
Federal Bureau of Investigation
San Diego County District Attorney’s Office
Pesticide Smuggler Sentenced to 90 Days in Custody; Ordered to Pay $10,000Read the Press Release
Assistant U. S. Attorney Melanie K. Pierson (619) 546-7976
NEWS RELEASE SUMMARY – June 18, 2021
SAN DIEGO –Felix Gutierrez Valencia of Perris, California, was sentenced in federal court today to 90 days in custody for attempting to smuggle pesticides into the United States. In addition, Gutierrez was ordered to pay a fine of $2,500 and restitution of $8,807 for the cost of disposal of the pesticides, and perform 100 hours of community service during three years of supervised release.
In pleading guilty, Gutierrez admitted that, on April 16, 2020, he entered the United States at the Otay Mesa Port of Entry, where 48 containers of undeclared Mexican pesticides were discovered in his truck. Gutierrez had concealed some of the containers of pesticides in cereal and cookie boxes. The pesticides included Furadan, Monitor, Bayfolan, Biomec, Ridomil Gold, Kanemite and Rodentox. Gutierrez later acknowledged that, after his arrest in April, he offered to pay another individual to smuggle pesticides into the United States. However, that person was also caught at the border with 37 containers of Furadan, Biomec, Biozyme and Tetrasan.
Two of the pesticides smuggled by Gutierrez contain active ingredients that are cancelled in the United States, and thus are not permitted to be imported or sold. Furadan contains the cancelled pesticide carbofuran, which is a highly toxic insecticide that affects the central nervous systems by the same mechanism as chemical warfare nerve agents. It is highly toxic to birds, fish and mammals and is classified by the EPA as Toxicity Category I, the highest category, based upon its lethal potency. Monitor contains the cancelled pesticide methamidophos, which is one of the most acutely toxic organophosphate pesticides, also related to chemical warfare nerve agents. Rodentox contains zinc phosphide, an extremely toxic rodenticide. Ingestion of 7 drops to one teaspoons of zinc phosphide would likely kill a 150-pound person.
According to the sentencing documents, all of the chemicals smuggled by the defendant are commonly found at locations where marijuana is illegally cultivated. Exposure to these pesticides during eradication efforts has cause law enforcement officers to be hospitalized, has polluted soils and streams, and has 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 as 70 percent.
“Trafficking in illegal pesticides is big business, and we are aggressively prosecuting many of these smuggling cases in order to protect the public,” said Acting U.S. Attorney Randy Grossman. “The toxic chemicals are extremely dangerous, with the power to poison people, wildlife, water sources and soil. Smugglers like this defendant are attempting to sneak banned pesticides across the border as if they are illicit narcotics, and they are getting caught and going to prison. That’s how serious these offenses are.” Grossman praised Assistant U.S. Attorney Melanie Pierson for her excellent work prosecuting environmental crimes, and he also commended agents from Homeland Security Investigations and the U.S. Environmental Protection Agency, Criminal Investigation Division.
“There’s a reason the federal government prohibits the importation of certain types of pesticides,” said Cardell T. Morant, Special Agent in Charge of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) San Diego. “Some of the chemicals may be toxic and exposure can be dangerous or fatal to both humans and wildlife. This individual not only disregarded the hazards associated with improperly handling these types of chemicals, he attempted to smuggle the chemicals into the U.S., which is a very serious crime. HSI and its partner organizations will continue to pursue, arrest, and bring to justice, anyone who tries to smuggle these highly toxic chemicals into the U.S.”
“The pesticides involved in this case pose serious public health and environmental dangers,” said Special Agent in Charge Scot Adair of EPA’s Criminal Investigation Division in California. “The sentence in this case demonstrates that individuals who intentionally violate smuggling and environmental protection laws will be held responsible for their crimes.”
DEFENDANT Case Number 20cr2058-JLS
Felix Gutierrez Valencia Age: 40 Perris, CA
SUMMARY OF CHARGES
Smuggling – Title 18, U.S.C., Section 545
Maximum penalty: Twenty years in prison and $250,000 fine
AGENCY
Homeland Security Investigations
U.S. Environmental Protection Agency, Criminal Investigation Division
Twenty-Year Sentence in GirlsDoPorn Sex Trafficking ConspiracyRead the Press Release
Assistant U. S. Attorneys Joseph Green (619) 546-6955 and Alexandra F. Foster (619) 546-6735
NEWS RELEASE SUMMARY – November 23, 2020
SAN DIEGO – Adult film performer and producer Ruben Andre Garcia was sentenced in federal court today to 20 years in prison for conspiring with the owners of the adult websites GirlsDoPorn (GDP) and GirlsDoToys (GDT) to recruit young women to appear in sex videos for adult websites using force, fraud, and coercion.
From approximately 2013 to 2017, Garcia worked as a recruiter, producer, and actor for the GDP and GDT websites, which grossed millions of dollars during this time. Garcia pleaded guilty in December 2020, admitting that as part of a premeditated scheme, Garcia recruited victims to appear in sex videos for the websites by promising them that these videos would never be posted online, that the videos would never be released in the United States, and that no one who knew the women would ever find out about the videos. Throughout the scheme, Garcia knew these representations were false. Garcia knew the videos were being posted on the fee-based websites, GDP and GDT, and excerpts were posted on free pornographic sites such as Pornhub.com, one of the most frequently viewed websites in the world receiving millions of views, to drive paying viewers to GDP and GDT.
Garcia admitted that he and co-defendant Michael Pratt were the lead recruiters for GDP and GDT. Their target market was 18 to 20-year-old women. Garcia and Pratt created Craigslist advertisements, along with fake websites and email addresses consistent with the websites to cause their victims to believe that they were applying to work asclothed models. Only after the victims responded to the advertisements would Garcia and Pratt disclose that they were actually seeking women for pornographic video shoots.
When victims expressed hesitation, Garcia directed other young women to contact the victims and falsely reassure them that the videos would not be posted online and that none of the victims’ friends, families, colleagues or classmates would find out. Young women were selected as references, because Garcia, Pratt and Matthew Wolfe believed the victims were more likely to believe other young women over Garcia or Pratt. The references were paid a fee for each victim they attempted to recruit, with additional compensation for victims who agreed to film a video.
Garcia and other members of the conspiracy took active steps to ensure the victims did not find out that he and the other members of the conspiracy operated GDP and GDT. Garcia knew that most of the young women they were recruiting would have never agreed to appear in a video if they knew that videos of their explicit sexual activity would be posted on the internet and marketed to their friends and family.
Most of the videos created as a part of the conspiracy were shot at hotels or short-term rental units in the San Diego area. If one of the victims agreed to act in the pornographic video, Garcia and his co-conspirators promptly booked flights to San Diego within a day or two to limit the chances that the victim would change her mind. After the victim arrived at the hotel or short-term rental unit, Garcia would continue to falsely assure them that the videos would not be posted online and that no one who knew the victims would see - or even know about - the videos. Victims were told that the contracts they were presented with simply said what the victims had already been told, including that the videos would not be posted online. Nowhere on the contract could the reader find a reference to “girlsdoporn,” “girlsdotoys” or pornography at all. The companies were instead identified with innocuous names, such as Bubblegum Casting. Victims were not provided a copy of the contracts that they signed.
Before some of the video shoots, victims were offered alcohol or marijuana. Victims who consumed alcohol or smoked marijuana were directed to make a recorded statement saying that they were not under the influence of any drugs or alcohol, even though they had just smoked marijuana or drank alcohol.
As a part of the conspiracy, Garcia and others would at times coerce victims into completing the videos once they were underway. Garcia and other co-conspirators threatened to sue the victims, cancel flights home, and post the videos online, if the victims did not complete the sex videos. Hotel room doors were at times blocked by camera and recording equipment, and the victims felt powerless and unable to leave.
Victims were also misled about how long the video shoots lasted. Most were told the video production would take around 30 minutes, when in reality, they typically lasted for several hours. The sex for the video shoots was rough and caused many victims pain, and in some cases bleeding. Some victims asked to stop filming. In response, Garcia and others told the victims that they had to continue and finish the videos. Victims were also often paid significantly less than originally promised with Garcia and others would citing a tattoo, a mole, or some other perceived “imperfection” to pay the victim less.
Once the videos were posted online many victims contacted Garcia and his co-conspirators seeking to get their videos taken off the websites. The victims’ calls were blocked or ignored.
“This defendant lured one victim after another with fake modeling ads, false promises and deceptive front companies, ultimately devolving to threats to coerce these women into making sex videos,” said Acting U.S. Attorney Randy Grossman. “Even when victims told Garcia how the scheme had devastated their lives, he showed no regard for their well-being. The crime was utterly callous in nature and there is no excuse or justification for his conduct, which was driven purely by greed. The harm inflicted by this defendant will last a lifetime for his victims. Hopefully today’s sentence will offer them a sense of justice.” Grossman praised prosecutors Joseph Green, Alexandra Foster and Sabrina Feve; FBI Special Agents; and the U.S. Attorney’s Office Victim Witness Unit for their excellent work on this case.
“Ruben Garcia chose to exploit and deceive these young women for his personal satisfaction and financial gain and today he was held accountable for those decisions,” said FBI Special Agent in Charge Suzanne Turner. “Today's sentence is the first in this case, however it is definitely not the last. I hope this sentence serves as a start to the healing process and brings some sense of justice for these young women, each with their whole life ahead of them.”
The next hearing in the ongoing case is June 25, 2020, at 2 p.m.
Any additional victims of the alleged crime are encouraged to call the San Diego FBI at 858-320-1800.
The FBI is offering a reward of up to $50,000 for information leading to the arrest of Michael James Pratt. Individuals with information about Pratt should contact their local FBI office or the nearest American Embassy or Consulate.
DEFENDANTS Case Number 19cr4488-JLS
Ruben Andre Garcia Age: 31 San Diego, CA
*Pleaded guilty to Counts 1 and 7, Conspiracy to Commit Sex Trafficking by Force, Fraud and Coercion.
DEFENDANTS Case Number 19cr4488-JLS
Michael James Pratt Age: 36 Fugitive
Matthew Isaac Wolfe Age 37 San Diego, CA (pending trial)
Theodore Gyi Age: 42 Rancho Aliso, CA (Pleaded guilty to Superseding Information charging Conspiracy to Commit Sex Trafficking by Force, Fraud and Coercion, in violation of 18 U.S.C. § 371)
Valorie Moser Age: 38 San Diego, CA (Pleaded guilty to a Superseding Information charging Conspiracy to Commit Sex Trafficking by Force, Fraud and Coercion, in violation of 18 U.S.C. § 371)
Amberlyn Dee Nored Age: 27 San Diego, CA (pending trial)
SUMMARY OF CHARGES
Count 1 (charging all defendants)
Conspiracy to Commit Sex Trafficking by Force, Fraud and Coercion, 18 U.S.C. § 1591(a) and (b)(1)
Maximum Penalty: Life in prison, $250,000 fine, and a special assessment of $5,000 under 18 U.S.C. § 3014.
Count 2 (Pratt)
Production of Child Pornography, 18 U.S.C. § 2251(a) and (e)
Minimum penalty: Fifteen years in prison; Maximum penalty: 30 years in custody, $250,000 fine, and a special assessment of $5,000 under 18 U.S.C. § 3014.
Count 3 (Pratt)
Sex Trafficking of a Minor by Force, Fraud and Coercion, 18 U.S.C. § 1591(a)(1) and (2)
Minimum penalty: Fifteen years in prison; Maximum penalty: life in custody, $250,000 fine, and a special assessment of $5,000 under 18 U.S.C. § 3014.
Counts 4 (Pratt, Wolfe, Garcia), 5 (Pratt, Garcia), 6 (Pratt, Wolfe, Garcia), 7 (Pratt, Garcia, Gyi), 8 (Pratt, Garcia, Gyi)
Conspiracy to Commit Sex Trafficking by Force, Fraud and Coercion, 18 U.S.C. § 1594
Minimum penalty: Fifteen years in prison; Maximum penalty: life in custody, $250,000 fine, and a special assessment of $5,000 under 18 U.S.C. § 3014.
INVESTIGATING AGENCY
FBI
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Escondido Businessman Sentenced for Tax Evasion Scheme with Former Chabad of Poway RabbiRead the Press Release
Assistant U. S. Attorneys Michelle L. Wasserman (619) 546-8431 and Valerie H. Chu (619) 546-6750
NEWS RELEASE SUMMARY – June 14, 2021
SAN DIEGO –Stuart Weinstock, an Escondido businessman and former owner of Salsa Market in Vista, was sentenced in federal court today to eight months in custody for evading over $180,000 in taxes as part of an eight-year tax-evasion scheme with former Chabad of Poway Rabbi Yisroel Goldstein.
At today’s hearing, U.S. District Judge Cynthia A. Bashant told the defendant: “It’s important to send the message: ‘You commit tax fraud, you go to jail.’”
Until around 2018, Rabbi Goldstein was the director and head rabbi at Chabad of Poway, a tax-exempt religious organization. Weinstock pleaded guilty in February 2021, admitting that starting in approximately 2010, he met monthly with Goldstein to give him purported donation checks for the Chabad, generally about $8,000 a month. Goldstein would then funnel back 75 percent of the funds, or generally about $6,000 to Weinstock, keeping the remaining 25 percent of the funds for himself.
Between 2010 and 2018, Weinstock gave over $870,000 in fraudulent donations to the Chabad, of which over $650,000 was funneled back to him in cash. Although Weinstock knew that he had received back, in cash, the vast majority of his donations, he nonetheless falsely claimed on his tax returns that the checks to the Chabad were either tax-deductible charitable contributions or legitimate business expenses.
In July 2020, Rabbi Goldstein pleaded guilty to fraud charges, admitting that he participated in a complex, years-long, multi-million dollar tax evasion scheme and other financial deceptions involving theft of public money. Rabbi Goldstein’s plea agreement outlined the tax evasion scheme with Weinstock.
“Stuart Weinstock has cheated the system and evaded paying his fair share of taxes,” said Acting U.S. Attorney Randy S. Grossman. “Those who cheat the system by exploiting the tax-exempt status of non-profits and religious organizations will be held to account for their conduct.” Grossman praised prosecutors Michelle Wasserman and Valerie Chu and FBI and IRS agents for their excellent work on this case.
“For nearly nine years, Mr. Weinstock, a successful business man, funneled hundreds-of-thousands of dollars, veiled as donations, through Chabad of Poway’s tax-exempt status to skirt paying his fair share,” said IRS Criminal Investigation Special Agent in Charge, Ryan L. Korner. “When you get an envelope of cash in exchange for your ‘donation’, it is neither charitable giving nor a legitimate business expense; it is fraud. Today’s sentencing of the 10th defendant to plead guilty in this widespread tax evasion scheme sends a clear message – the IRS will pursue and seek punishment for tax cheats who exploit religious organizations to enrich themselves.”
“The FBI and our law enforcement partners continue to pursue those who use fraudulent charitable contributions to shield their tax obligations,” said FBI Special Agent in Charge Suzanne Turner. “What Mr. Weinstock was doing was illegal – and he knew it – however he continued to do it for years to line his own pockets and avoid paying taxes. These crimes shake the confidence of potential donors and adversely affect legitimate charities who rely on those donations to survive and it will not be tolerated.”
SUMMARY OF CHARGES Case Number 21CR0042-BAS
Stuart Weinstock Age: 64 Escondido, CA
Filing a False Tax Return, in violation of Title 26, USC 7206(1)
Maximum Penalty: Three years in prison
PREVIOUSLY CHARGED DEFENDANTS AND SUMMARY OF CHARGES
Yisroel Goldstein, Case Number 20CR1916-BAS Age: 58 Poway
Conspiracy to Defraud the United States and Commit Wire Fraud, in violation of Title 18, USC 371
Maximum Penalty: Five years in prison
Alexander Avergoon, Case Number 19CR2955-BAS Age: 44 San Diego
Wire Fraud, in violation of Title 18, USC 1343
Maximum Penalty: Twenty years in prison
Aggravated Identity Theft, in violation of Title 18, USC 1028A
Maximum Penalty: Two years minimum consecutive term in prison
Money Laundering, in violation of Title 18, USC 1956(a)(1)(B)(i)
Maximum Penalty: Twenty years in prison
Bijan Moossazadeh, Case Number 20CR1893-BAS Age: 63 San Diego
Filing a False Tax Return, in violation of Title 26, USC 7206(1)
Maximum Penalty: Three years in prison
Yousef Shemirani, Case Number 20CR1895-BAS Age: 74 Poway
Filing a False Tax Return, in violation of Title 26, USC 7206(1)
Maximum Penalty: Three years in prison
Boris Shkoller, Case Number 20CR1913-BAS Age: 83 Del Mar
Filing a False Tax Return, in violation of Title 26, USC 7206(1)
Maximum Penalty: Three years in prison
Mendel Goldstein, Case Number 20CR2772-BAS Age: 63 Brooklyn, NY
Conspiracy to Defraud the United States and Commit Wire Fraud, in violation of Title 18, USC 371
Maximum Penalty: Five years in prison
Bruce Baker, Case Number 20CR1912-BAS Age: 75 San Diego
Conspiracy to Defraud the United States and File False Tax Returns, in violation of Title 18, U.S.C. §371
Maximum Penalty: Five years in prison
Rotem Cooper, Case Number 20CR3968-BAS Age: 54 San Diego
Deferred Prosecution Agreement
Conspiracy to Commit Wire Fraud, in violation of Title 18, USC 371
Igor Shtilkind, Case Number 20CR3955-BAS Age: 55 San Diego
Deferred Prosecution Agreement
Conspiracy to Commit Wire Fraud, in violation of Title 18, USC 371
INVESTIGATING AGENCIES
Federal Bureau of Investigation
Internal Revenue Service
Alleged CJNG Cartel Enforcers Charged with Drug TraffickingRead the Press Release
NEWS RELEASE SUMMARY – June 14, 2021
SAN DIEGO – A superseding indictment and arrest warrants were unsealed recently in federal court against alleged Mexican drug cartel enforcement leaders in connection with their alleged violent support of heroin and methamphetamine trafficking.
The superseding indictment, returned on March 6, 2020, plus a related indictment returned on March 16, 2021, collectively charge Edgar Herrera Pardo, aka Caiman; Carlos Lorenzo Hinojosa Guerrero, aka Cabo 96; Edgar Perez Villa, aka Cabo 89; and Israel Alejandro Vazquez-Vazquez, aka Cabo 50, among others, with Conspiracy to Distribute Controlled Substances Intended for Importation, and Conspiracy to Import Controlled Substances.
According to court filings filed by the government, Caiman, Cabo 96, Cabo 89 and Cabo 50 were leaders of a violent group of cartel enforcers, known as Los Cabos, who operated in Baja California to secure control of the region for Cártel de Jalisco Nueva Generación, commonly known as CJNG. Los Cabos allegedly employed rampant violence to ensure that CJNG maintained the ability to traffic drugs through Tijuana, Mexico, and into the United States through San Diego Indeed, in one approximately 6.5-month period of judicially-authorized interceptions of a group chat operated by leaders of Los Cabos, these individuals planned over 150 murders, the majority of which took place in Tijuana, according to the filings. Los Cabos’s bloody reign of terror included the murder of two teenaged United States citizens in Tijuana in November 2018, the government alleges. These teenagers were residents of Chula Vista. The government also alleges that Los Cabos targeted law enforcement in Tijuana, killing at least three police officers.
Los Cabos allegedly engaged in this violence in support of CJNG, one of the most dangerous transnational criminal organizations in the world. The cartel has its hands in trafficking multiple deadly substances. It is responsible for moving tons of cocaine, methamphetamine, and fentanyl-laced heroin into the United States. CJNG is also a prolific methamphetamine producer and chemical importer, using precursors procured from China and India. CJNG is one of the most powerful Mexican cartels operating within the United States.
At the same time, CJNG has contributed to a catastrophic trail of human and physical destruction in Mexico. It is the most well-armed cartel in Mexico. Its members willingly confront rival cartels and even the security forces of the Mexican government. CJNG is responsible for grisly acts of violence and loss of life.
“For too long, powerful cartels have visited unspeakable violence on Tijuana, a city that is right next door to San Diego,” said Acting U.S. Attorney Randy S. Grossman. “We will continue our campaign to end the cartels’ reign of terror and stop the flow of drugs across the border by prosecuting the highest-ranking leaders and enforcers.”
Grossman praised federal prosecutors, agents with the Drug Enforcement Administration and Homeland Security Investigations and detectives with the San Diego Sheriff’s Department for their excellent work on this case. In addition, Grossman thanked the Mexican Fiscalía General de la República, which provided significant assistance to this investigation.
“Drug cartels like Cártel de Jalisco Nueva Generación, also known as CJNG, continue to flood our communities with heroin and methamphetamine,” said DEA Special Agent in Charge John W. Callery. “These cartels not only perpetrate violence and murders that effect our neighbors south of the border, but their drugs cause death and destruction in our own communities. The superseding indictments and arrest warrants against violent CJNG members are testament that DEA and our law enforcement partners will continue to work vigorously to identify and arrest members of these drug cartels.”
This case is the result of 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.
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.
DEFENDANTS
Case Number: 19CR1274-BAS
Edgar Herrera Pardo, aka Caiman
Carlos Lorenzo Hinojosa Guerrero, aka Cabo 96, aka C96
Edgar Perez Villa, aka Cabo 89, aka Nier
Case Number: 21CR0861-BAS
Israel Alejandro Vazquez-Vazquez, aka Cabo 50
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;
Maximum Sentence: Mandatory minimum ten years and up to life imprisonment, $10 million fine
Conspiracy to Distribute Controlled Substances, in violation of Title 21 U.S.C. §§ 841(a)(1) and 846.
Maximum Sentence: Mandatory minimum ten years and up to life imprisonment, $10 million fine
AGENCIES
Drug Enforcement Administration
Homeland Security Investigations
Department of Justice, Organized Crime Drug Enforcement Task Force
Department of Justice, Office of Enforcement Operations
Department of Justice, Office of International Affairs
San Diego Sheriff’s Department
*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.
FBI’s Encrypted Phone Platform Infiltrated Hundreds of Criminal Syndicates; Result is Massive Worldwide TakedownRead the Press Release
For Further Information, Contact:
Media Relations Director Kelly Thornton (619) 546-9726
SAN DIEGO – A wave of hundreds of arrests that began in Australia and stretched across Europe culminated today with the unsealing of a federal grand jury indictment in San Diego charging 17 foreign nationals with distributing thousands of encrypted communication devices to criminal syndicates.
The 500-plus arrests that took place during a worldwide two-day takedown were possible because of a San Diego-based investigation like no other. For the first time, the FBI operated its own encrypted device company, called “ANOM,” which was promoted by criminal groups worldwide. These criminals sold more than 12,000 ANOM encrypted devices and services to more than 300 criminal syndicates operating in more than 100 countries, including Italian organized crime, Outlaw Motorcycle Gangs, and various international drug trafficking organizations, according to court records.
SEARCH WARRANT - Operation Trojan Shield
INDICTMENT - Operation Trojan Shield
During the course of the investigation, while ANOM’s criminal users unknowingly promoted and communicated on a system operated lawfully by the FBI, agents catalogued more than 27 million messages between users around the world who had their criminal discussions reviewed, recorded, and translated by the FBI, until the platform was taken down yesterday.
The users, believing their ANOM devices were protected from law enforcement by the shield of impenetrable encryption, openly discussed narcotics concealment methods, shipments of narcotics, money laundering, and in some groups—violent threats, the indictment said. Some users negotiated drug deals via these encrypted messages and sent pictures of drugs, in one instance hundreds of kilograms of cocaine concealed in shipments of pineapples and bananas, and in another instance, in cans of tuna, in order to evade law enforcement.
The indictment charges 17 alleged distributors of the FBI’s devices and platform. They are charged with conspiring to violate the Racketeer Influenced and Corrupt Organizations Act (RICO), pertaining to their alleged involvement in marketing and distributing thousands of encrypted communication devices to transnational criminal organizations worldwide.
During the last 24 to 48 hours, in addition to the more than 500 arrests around the world, authorities searched more than 700 locations deploying more than 9,000 law enforcement officers worldwide and seized multi-ton quantities of illicit drugs.
CLICK HERE - Video Messages from International Partners
Grand totals for the entire investigation include 800 arrests; and seizures of more than 8 tons of cocaine; 22 tons of marijuana; 2 tons of methamphetamine/amphetamine; six tons of precursor chemicals; 250 firearms; and more than $48 million in various worldwide currencies. Dozens of public corruption cases have been initiated over the course of the investigation. And, during the course of the investigation, more than 50 clandestine drug labs have been dismantled. One of the labs hit yesterday was one of the largest clandestine labs in German history.
“This was an unprecedented operation in terms of its massive scale, innovative strategy and technological and investigative achievement,” said Acting U.S. Attorney Randy Grossman. “Hardened encrypted devices usually provide an impenetrable shield against law enforcement surveillance and detection. The supreme irony here is that the very devices that these criminals were using to hide from law enforcement were actually beacons for law enforcement. We aim to shatter any confidence in the hardened encrypted device industry with our indictment and announcement that this platform was run by the FBI.”
“Today marks the culmination of more than five years of innovative and complex investigative work strategically aimed to disrupt the encrypted communications space that caters to the criminal element,” said Suzanne Turner, Special Agent in Charge of the Federal Bureau of Investigation (FBI) - San Diego Field Office. “The FBI has brought together a network of dedicated international law enforcement partners who are steadfast in combating the global threat of organized crime. The immense and unprecedented success of Operation Trojan Shield should be a warning to international criminal organizations – your criminal communications may not be secure; and you can count on law enforcement worldwide working together to combat dangerous crime that crosses international borders.”
“Operation Trojan Shield is a perfect example of an OCDETF case - an investigation driven by intelligence and maximizing the strengths of partner law enforcement agencies in coordinated efforts to dismantle command and control elements of criminal networks,” said OCDETF Director Adam W. Cohen. “Coordination is the cornerstone of the OCDETF program, and the impressiveness of the combined efforts of the U.S. Attorney’s Office, FBI, and our foreign partners cannot be overstated. This effort has created lasting disruptive impacts to these transnational criminal organizations.”
“The AFP and FBI have been working together on a world-first operation to bring to justice the organised crime gangs flooding our communities with drugs, guns and violence,” said AFP Commissioner Reece Kershaw APM. “The FBI provided an encrypted communications platform while the AFP deployed the technical capability which helped unmask some of the biggest criminals in the world. This week the AFP and our state police partners will execute hundreds of warrants and we expect to arrest hundreds of offenders linked to the platform. This is the culmination of hard work, perseverance and an invaluable, trusted relationship with the FBI.
We thank the FBI for their long and integral partnership with the AFP.”
Europol’s Deputy Executive Director Jean-Philippe Lecouffe: “This operation is an exceptional success by the authorities in the United States, Sweden, the Netherlands, Australia, New Zealand and the other European members of the Operational Task Force. Europol coordinated the international law enforcement community, enriched the information picture and brought criminal intelligence into ongoing operations to target organised crime and drug trafficking organisations, wherever they are and however they choose to communicate. I am very satisfied to see Europol supporting this operation and strengthen law enforcement partnerships by emphasizing the multi-agency aspect of the case.”
“I am exceptionally proud of our New Zealand Police staff who supported Operation Trojan Shield,” said New Zealand Police Commissioner Andrew Coster. “This operation will have an unprecedented impact on organised crime syndicates across the globe. We value our strong relationship with the FBI, AFP and Europol and it is through these partnerships and the unrelenting efforts by law enforcement agencies from multiple countries that this operation has seen such incredible success This is a fantastic result and reiterates the importance of our transnational partnerships with law enforcement agencies across the globe in our common ongoing efforts to dismantle organised crime groups and the enormous harm they cause to our communities.”
“This remarkably successful operation demonstrates what can be accomplished when law enforcement agencies throughout the world work together,” said DEA Los Angeles Division Special Agent in Charge Bill Bodner. “Through strong relationships with our partners in more than 67 countries, professionals throughout the DEA, including experts in the Los Angeles Division, supported this unprecedented collaboration and our own mission to disrupt and dismantle the criminal organizations that profit from the distribution of illegal drugs.”
According to the San Diego indictment, ANOM’s administrators, distributors, and agents described the platform to potential users as “designed by criminals for criminals” and targeted the sale of ANOM to individuals that they knew participated in illegal activities.
All defendants are foreign nationals located outside of the U.S. In total, eight of the indicted defendants were taken into custody last night. Authorities are continuing to search for the remaining nine defendants.
The indictment alleges the defendants knew the devices they distributed were being used exclusively by criminals to coordinate drug trafficking and money laundering, including in the U.S. The defendants personally fielded “wipe requests” from users when devices fell into the hands of law enforcement.
The FBI’s review of ANOM users’ communications worked like a blind carbon copy function in an email. A copy of every message being sent from each device was sent to a server in a third-party country where the messages were collected and stored. The data was then provided to the FBI on a regular basis pursuant to an international cooperation agreement. Communications such as text messages, photos, audio messages, and other digital information were reviewed by the FBI for criminal activity and disseminated to partner law enforcement agencies in other countries. Each user was using ANOM for a criminal purpose. Those countries have built their own cases against ANOM users, many of whom were arrested in takedowns in Europe, Australia and New Zealand over the last several days.Intelligence derived from the FBI’s communications platform presented opportunities to disrupt major drug trafficking, money laundering, and other criminal activity while the platform was active. For example, over 150 unique threats to human life were mitigated.
This operation was led by the FBI and coordinated with the U.S. Drug Enforcement Administration, the U.S. Marshals Service, Australian Federal Police, Swedish Police Authority, National Police of the Netherlands, Lithuanian Criminal Police Bureau, Europol, and numerous other law enforcement partners from over a dozen other countries.
This investigation began after Canada-based encrypted device company Phantom Secure was dismantled by the FBI in 2018 through a San Diego-based federal RICO indictment and court-authorized seizure of the Phantom Secure platform, forcing many criminals to seek other secret communication methods to avoid law enforcement detection. The FBI—along with substantial contributions by the Australian Federal Police—filled that void with ANOM.
When the FBI and the San Diego U.S. Attorney’s Office dismantled Sky Global in March 2021, the demand for ANOM devices grew exponentially as criminal users sought a new brand of hardened encryption device to plot their drug trafficking and money laundering transactions and to evade law enforcement. Demand for ANOM from criminal groups also increased after European investigators announced the dismantlement of the EncroChat platform in July 2020. The ANOM platform - unlike Phantom Secure, EncroChat, and Sky Global - was exploited by the FBI from the very beginning of ANOM’s existence and was not an infiltration of an existing popular encrypted communications company.
In October 2018, Phantom Secure’s CEO pleaded guilty to a RICO conspiracy in the Southern District of California. He was sentenced to nine years in prison and ordered to forfeit $80 million in proceeds from the sale of Phantom devices.
For further information, please see https://www.justice.gov/usao-sdca/pr/chief-executive-communications-company-sentenced-prison-providing-encryption-services and https://www.justice.gov/usao-sdca/pr/sky-global-executive-and-associate-indicted-providing-encrypted-communication-devices.
Operation Trojan Shield is an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
Assistant U.S. Attorneys Meghan E. Heesch, Joshua C. Mellor, Shauna Prewitt, and Mikaela Weber of the U.S. Attorney’s Office for the Southern District of California are prosecuting the case, with assistance from Paralegal Specialist Tracie Jarvis. Former Assistant U.S. Attorney Andrew P. Young made invaluable contributions during his tenure on the case team.
Acting U.S. Attorney Grossman praised federal prosecutors and FBI agents and international law enforcement partners for their relentless pursuit of justice in this extraordinary case. Additionally, Acting U.S. Attorney Grossman thanked the coordinated efforts of the Department of Justice’s Office of International Affairs which facilitated many international components of this complex investigation.
The charges and allegations contained in an indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.
DEFENDANTS 21-CR-1623-JLS COUNTRY *Joseph Hakan Ayik (1) Domenico Catanzariti (2) Australia *Maximilian Rivkin (3) Abdelhakim Aharchaou (4) The Netherlands *Seyyed Hossein Hosseini (5) Alexander Dmitrienko (6) Spain *Baris Tukel (7) *Erkan Yusef Dogan (8) *Shane Geoffrey May (9) Aurangzeb Ayub (10) The Netherlands James Thomas Flood (11) Spain *Srdjan Todorovic aka Dr. Djek (12) *Shane Ngakuru (13) Edwin Harmendra Kumar (14) Australia Omar Malik (15) The Netherlands Miwand Zakhimi (16) The Netherlands *Osemah Elhassen (17) *FugitiveSUMMARY OF CHARGES
Conspiracy to Conduct Enterprise Affairs Through Pattern of Racketeering Activity (RICO Conspiracy), in violation of 18 U.S.C. § 1962(d)
Maximum Penalty: Twenty years in prion
AGENCIES
Federal Bureau of Investigation
Drug Enforcement Administration
United States Marshals Service
Department of Justice, Office of International Affairs
Australian Federal Police
Swedish Police Authority
Lithuanian Criminal Police Bureau
National Police of the Netherlands
EUROPOL
For further information, please see
https://www.europol.europa.eu/newsroom/news/800-criminals-arrested-in-biggest-ever-law-enforcement-operation-against-encrypted-communication
https://www.afp.gov.au/news-media/media-releases/afp-led-operation-ironside-smashes-organised-crime
Owners of Underground, International Financial Institutions Sentenced for Operating Unlicensed Money Transmitting BusinessRead the Press Release
Assistant U.S. Attorneys Daniel Silva (619) 546-9713 and Mark W. Pletcher (619) 546-9714
NEWS RELEASE SUMMARY – June 3, 2021
SAN DIEGO –Lei Zhang of Las Vegas, Nevada, was sentenced in federal court yesterday to 15 months in prison and the forfeiture of $150,000 for operating an unlicensed money transmitting business.
Zhang is believed to be the first individual in the United States sentenced for his role in developing a new form of unlawful underground financial institution that transfers money between the United States and China, thereby circumventing domestic and foreign laws regarding monetary transfers and reporting, including United States anti-money laundering scrutiny and Chinese capital flight controls.
As set forth in court documents, Zhang would collect U.S. dollars (in cash) from various third-parties in the United States and deliver that cash to a customer, typically a high-roller gambler from China who could not readily access cash in the United States due to capital controls that limit to $50,000 per year the amount of Chinese currency an individual can convert to foreign currency. Upon receipt of the U.S. dollars, the gambler would transfer the equivalent value of Chinese yuan (using a banking app) from the customer’s Chinese bank account to a Chinese bank account designated by defendant Zhang. For facilitating these transactions, Zhang was paid a commission based on the monetary value illegally transferred.
Zhang further admitted that he was regularly introduced to customers by casino hosts, who sought to increase the gambling play of the casino’s customers. By connecting cash-starved gamblers in the United States with Zhang’s illicit money transmitting businesses, the casinos increased the domestic cash play of their China-based high-roller customers. All a gambler needed was a mobile device with remote access to a China-based bank account. As a result, Zhang managed to transmit and convert electronic funds in China into hard currency in the United States, all while circumventing the obstacles imposed both by China’s capital controls and the anti-money laundering scrutiny imposed on all United States financial institutions. For their efforts, the casino hosts often received a cut of Zhang’s commission.
“The groundbreaking work by these investigative agents in identifying and ferreting out this new form of illicit money transmittal cannot be overstated,” noted Acting U.S. Attorney Randy Grossman. “Prosecuting global money laundering is a priority for the U.S. Attorney’s Office.”
Special Agents from Homeland Security Investigations, IRS Criminal Investigation Las Vegas Financial Crimes Task Force, and the Drug Enforcement Administration led the investigation into Zhang’s operations.
DEFENDANT Case Number 20-CR-370-WQH
Lei Zhang Las Vegas, NV Age: 41
SUMMARY OF CHARGES
Operation of Unlicensed Money Transmitting Business – Title 18, U.S.C., Section 1960
Maximum penalty: Five years in prison and $250,000 fine
AGENCIES
Homeland Security Investigations
IRS Criminal Investigation Las Vegas Financial Crimes Task Force
Drug Enforcement Administration
Justice Department Obtains Settlement from San Diego Landlord to Resolve Claims of Sexual Harassment Against Female TenantsRead the Press Release
Assistant U. S. Attorney Leslie Gardner (619) 546-7603
NEWS RELEASE SUMMARY – June 3, 2021
SAN DIEGO – The Justice Department today announced it has reached an agreement with landlord Larry Nelson to resolve a Fair Housing Act lawsuit alleging that he sexually harassed female tenants while owning and managing San Diego area rental properties.
Under the consent order entered by the United States District Court for the Southern District of California, Nelson must pay at least $230,000: $205,000 in damages to tenants harmed by his harassment and a $25,000 civil penalty to the United States. A judgment for an additional $350,000 also was entered against Nelson in favor of the United States but is suspended based on sworn disclosure statements reflecting Nelson’s financial situation. Any misrepresentation or omission by Nelson on those disclosure statements will trigger collection of the suspended judgment. Nelson also is prohibited from being involved in property management of rental units in the future and must hire an independent professional property manager. He also must implement a nondiscrimination policy and complaint procedure, and must release judgments obtained against victims whom he wrongfully evicted.
The United States’ lawsuit alleged that Nelson’s harassment spanned a period of nearly two decades. The allegations included that Nelson, among other things, engaged in unwelcome sexual touching, offered to reduce monthly rental payments in exchange for sex, made unwelcome sexual comments and advances, made intrusive and unannounced visits to female tenants’ homes to further his sexual advances, and evicted or threatened to evict female tenants who objected to or refused his sexual advance.
“A person’s home should be a refuge, a place where an individual can feel secure and protected,” said Pamela Karlan, Principal Deputy Assistant Attorney General for the Civil Rights Division. “Sexual harassment in housing often destroys that sense of safety and security and leaves victims afraid in their own homes. The Justice Department will not tolerate landlords who abuse their power by sexually harassing their tenants, and will continue vigorously to pursue allegations of sexual harassment.”
“Abusive landlords in San Diego and Imperial counties should be on notice that protecting the civil rights of citizens in our district is a top priority, and we do not tolerate discrimination and harassment in housing,” said Acting U.S. Attorney for the Southern District of California Randy S. Grossman. “Holding a key to someone’s property is a position of trust, not a license to engage in illegal sexual harassment and sexual demands.”
This case was jointly litigated by attorneys in the Civil Rights Division and the Civil Division of the United States Attorney’s Office for the Southern District of California. The Justice Department’s Sexual Harassment in Housing Initiative is led by the Civil Rights Division, in coordination with U.S. Attorney’s Offices across the country. The goal of the Department’s Initiative is to address and raise awareness about sexual harassment by landlords, property managers, maintenance workers, loan officers, or other people who have control over housing. Since launching the Initiative in October 2017, the Department of Justice has filed 21 lawsuits alleging sexual harassment in housing and recovered over $3.5 million for victims of such harassment.
The Justice Department’s Civil Rights Division enforces the Fair Housing Act, which prohibits discrimination in housing based on race, color, religion, national origin, sex, disability, and familial status. More information about the Civil Rights Division and the laws it enforces is available at http://www.justice.gov/crt. Individuals may report sexual harassment or other forms of housing discrimination by calling the Justice Department’s Housing Discrimination Tip Line at 1-800-896-7743, e-mailing the Justice Department at [email protected], or submitting a report online. Individuals may also report such discrimination by contacting HUD at 1-800-669-9777 or by filing a complaint online.
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Cannabis Processing Firm and Managers Plead Guilty to Illegal Transportation of Hazardous WasteRead the Press Release
Assistant U. S. Attorney Melanie K. Pierson (619) 546-7976
NEWS RELEASE SUMMARY – June 3, 2021
SAN DIEGO – WellgreensCA, Inc., a San Diego company engaged in extracting oils from cannabis, along with the owner and a manager, pleaded guilty in federal court today to offenses related to the dumping of hazardous waste in San Diego County in early 2018.
In pleading guilty, WellgreensCA, Inc. and owner Lunar Loussia admitted that, as a company engaged in the business of extracting oils from cannabis, Wellgreens generated various wastes, including 55-gallon drums of waste ethanol. The waste ethanol generated by Wellgreens was a federally-regulated hazardous waste that exhibited the characteristic of ignitability, because it had a flashpoint of less than 140 degrees Fahrenheit.
Loussia admitted that he agreed with R.U., a contractor, and others to dispose of the drums of waste ethanol generated by Wellgreens, knowing that the ethanol in the drums given to R.U. for disposal was a waste that had the potential or substantial potential to be harmful to others or to the environment.
The defendants acknowledged that as a large-quantity generator of hazardous waste, Wellgreens was required to transport all hazardous waste, including the waste ethanol, from their site accompanied by a uniform hazardous waste manifest. Loussia admitted that on February 7, 2018, he caused R.U. to pick up three full drums of waste ethanol for disposal from the Wellgreens facility on Trade Street, knowing that no hazardous waste manifest was prepared or provided to R.U., as required by law, to track the shipment. The defendants acknowledged that R.U. disposed of the drums of waste ethanol behind a business located at 1350 Hill Street in El Cajon.
Nadia Malloian further admitted that on May 17, 2018, employees of Wellgreens caused R.U. to pick up four full 55-gallon drums of waste ethanol from the Wellgreens facility on Trade Street for disposal. Those employees were aware at the time that no uniform hazardous waste manifest was prepared or provided to R.U. to accompany the waste ethanol during transportation.
The drums transported by R.U. from Wellgreens were abandoned at 1201 Avocado Avenue in El Cajon, near a Vons supermarket, along with paperwork associated with Wellgreens, including laboratory reports. An employee of Vons contacted the El Cajon police, and the San Diego County Department of Environmental Health Services (DEH). Both agencies responded and DEH conducted sampling and took photographs. The employee of Vons also contacted the laboratory named on the paperwork to attempt to learn the identity of the owner of the drums, sending photographs of the drums and associated paperwork in an email.
The laboratory forwarded the message from the employee at Vons to defendant Malloian on May 22, 2018. Malloian admitted that on May 23, 2018, after learning that agents of WellgreensCA, Inc. had knowingly transported the drums of waste ethanol to the location on Avocado Avenue in El Cajon without a manifest, as required by law, she assisted them with the specific purpose of hindering their apprehension by helping to arrange the removal of the drums from the location on Avocado Avenue in El Cajon.
As part of the plea agreement, the company agreed to pay a $45,000 fine and restitution of $26,482 for the costs of emergency response and restoration of the sites where the hazardous waste was abandoned.
“Crimes against the environment are crimes against all of us,” said Acting U.S. Attorney Randy Grossman. “We will not allow our communities to become dumping grounds for harmful chemicals because companies refuse to follow the rules.” Grossman praised prosecutor Melanie Pierson for her dogged commitment to protect the environment and EPA investigators for their hard work on this case and others like it.
“The defendants knowingly ignored legal requirements for the proper transportation and disposal of hazardous waste, putting local communities in the San Diego area at risk,” said Special Agent in Charge Scot Adair of EPA’s criminal enforcement program in California. “This case demonstrates that EPA will hold accountable those who intentionally violate laws that endanger human health.”
The defendants are scheduled to be sentenced on August 3, 2021, at 9:00 a.m. before U.S. District Judge William Q. Hayes.
DEFENDANTS
WellgreensCA Inc. Date of Incorporation: 2016 San Diego, California
Lunar Loussia Age: 39 El Cajon, California
Nadia Malloian Age: 48 El Cajon, California
SUMMARY OF CHARGES, Criminal Case No. 19cr2439-WQH
WellgreensCA and Lunar Loussia
Transportation of Hazardous Waste Without a Manifest, 42 U.S.C. §6928(d)(5)
Maximum Penalty: Two years in prison, fine of greater of $250,000 ($500,000 for the corporation) or $50,000 per day of violation
Nadia Malloian
Accessory After the Fact to Transportation of Hazardous Waste Without a Manifest, 18 U.S.C. §3 and 42 U.S.C. §6928(d)(5)
Maximum Penalty: One year in custody, fine of greater of $50,000 or $25,000 per day of violation
AGENCIES
U.S. Environmental Protection Agency, Criminal Investigation Division
Alleged Money Launderer for the Sinaloa Cartel ExtraditedRead the Press Release
Assistant U. S. Attorney Daniel Zipp (619) 546-8463
NEWS RELEASE SUMMARY – June 3, 2021
SAN DIEGO – Juan Manuel Alvarez-Inzunza, alleged top money launderer for the Sinaloa Cartel, was arraigned in federal court today following his extradition to the United States from Mexico yesterday.
On March 6, 2015, a federal grand jury sitting in the Southern District of California returned an indictment charging Alvarez-Inzunza with conspiracy to launder monetary instruments and conspiracy to import and distribute cocaine and methamphetamine. Alvarez-Inzunza was previously designated under the Foreign Narcotics Kingpin Designation Act for his role in providing money laundering services to top cartel leaders including Joaquin “El Chapo” Guzman Loera.
Alvarez-Inzunza was arrested by Mexican law enforcement officers in March 2016, at the request of the United States. Since his arrest in Mexico, Alvarez-Inzunza has remained in custody pending extradition to the United States. He was flown by the United States Marshals Service from Mexico City to San Diego on June 2, 2021. He is scheduled to be arraigned on Thursday, June 3, 2021, before U.S. Magistrate Linda Lopez.
Acting U.S. Attorney Randy Grossman stated, “Today is a reminder that international drug kingpins and money launderers who profit by shipping narcotics into our community are not safe from prosecution. We will work with our international partners to bring them to justice wherever they reside.”
Acting U.S. Attorney Grossman praised the outstanding work of Assistant U.S. Attorney Daniel Zipp, Homeland Security Investigations and 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.
“Juan Manuel Alvarez-Inzunza is responsible for moving millions of dollars in illicit drug proceeds from the United States into Mexico,” said Cardell T. Morant, Special Agent in Charge for HSI San Diego. “We stand dedicated and united with our law enforcement partners to continue dismantling these organizations; ensuring they can no longer hide from the authorities and that they will ultimately be brought to justice.”
This case is also 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 14-CR-2253-DMS
Juan Manuel Alvarez-Inzunza
Age: 39
Hometown: Culiacan, Sinaloa, Mexico
SUMMARY OF CHARGES
- Conspiracy to Launder Monetary Instruments (18 U.S.C. 1956(h))
- Conspiracy to Distribute Cocaine Intended for Importation ( 21 U.S.C. 959, 960, 963)
- Conspiracy to Import Cocaine and Methamphetamine (21 U.S.C. 952 and 960)
- Conspiracy to Distribute Cocaine and Methamphetamine (21 U.S.C. §841(a)(1) and 846)
AGENCIES
Homeland Security Investigations
Department of Treasury, Office of Foreign Assets Control
Department of Justice, Organized Crime Drug Enforcement Task Forces
Department of Justice, Office of International Affairs
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Region’s Top Federal Law Enforcement Officials Issue Plea to Migrants: Don’t Trust your Life to SmugglersRead the Press Release
Media Relations Director Kelly Thornton (619) 546-9726
NEWS RELEASE SUMMARY – June 2, 2021
SAN DIEGO – Following a wave of smuggling-related deaths in the region, San Diego’s top federal law enforcement officials made an emotional plea to migrants contemplating an illegal journey across the border: Don’t risk your life.
In less than a three-week span, four lives were lost and dozens of people had to be rescued from rough seas and hospitalized after multiple maritime smuggling events went terribly wrong.
“We are appealing to every person who is considering a desperate, perilous journey into the United States, whether in a boat, on foot, or crammed in the trunk of a car,” said Acting U.S. Attorney Randy Grossman. “Don’t do it. Do not put your life in the hands of smugglers. These people do not care about you. They will jam way too many people on a boat or in a car, just to make more money. They will direct you to hike in remote areas in dangerous weather conditions without adequate food, water or clothes. Smugglers care nothing for their customers. They care only about maximum profit.”
There were 25 migrant deaths in border areas in San Diego and Imperial counties from October through April, compared to 29 in all of FY 2020.
“Crossing the border illegally is extremely dangerous. Regardless of the crossing method, your life is at risk when placed in the hands of ruthless smugglers,” said U.S. Border Patrol San Diego Sector Acting Deputy Chief Patrol Agent Scott Garrett. “Smugglers will abandon their victims at the first sign of trouble, viewing them only as an expendable commodity.”
In the last three months, a number of people have been charged, entered guilty pleas, or received sentences in connection with smuggling deaths:
On Friday, May 28, a federal grand jury returned an indictment against Antonio Hurtado, the alleged captain of the boat that ran aground off Point Loma on May 2. In that incident, three people drowned and 30 were rescued in a heroic effort by U.S. Coast Guard, San Diego Lifeguards, and Border Patrol. Hurtado was charged with Attempted Bringing in Aliens Resulting in Death and other crimes. Many of the survivors who were interviewed by authorities said they had paid between $15,000 and $18,500 to be smuggled into the United States on the vessel.
In another case, today an indictment was returned charging Victor Alfonso Soto Aguilar and Jose Ramon Geraldo Romero with the same crime - Bringing in Aliens Resulting in Death. On May 20, one person died and other individuals were rescued in another maritime smuggling event. In predawn darkness, United States Border Patrol agents spotted numerous individuals in the ocean near La Jolla. A panga boat was also seen in the vicinity traveling further north. Border Patrol saw that the individuals in the ocean were in serious distress and desperately needed assistance. Lifeguards immediately responded and rescued eight people from the water. The panga then eventually came into shore near the Children’s Pool. A submerged victim was found nearby and did not survive. The migrants rescued from the water admitted that they were paying between $12,000 and $15,000 to be smuggled into the United States.
The tragedies are not limited to the ocean. Yesterday, Leobardo Soto-Toledo pleaded guilty to immigration crimes in January of this year involving a group of 14 migrants entering the United States through an underground drainage pipe during heavy rains. One man drowned and a woman was found floating unconscious; she was resuscitated by a Border Patrol Agent and treated at a hospital.
In April, two brothers from Chihuahua, Mexico, were sentenced in federal court to 5 1/2 years in prison for smuggling three sisters across treacherous terrain along the U.S.-Mexico border in an ill-fated trek that resulted in the tragic deaths of all threeyoung women. One of those sisters was the mother of a young child.
In March, Neil Edwin Valera, a U.S. citizen who resided in Tijuana, was sentenced to five years in prison in connection with the deaths of three Chinese migrants, including a mother and her 15-year-old son, who were found in the trunk of Valera’s BMW.
Also in March, Jose Cruz Noguez of Mexicali, Mexico, was indicted by a federal grand jury on immigration charges related to a March 2, 2021 smuggling event that led to the deaths of 13 Mexican and Guatemalan nationals in a crash of an overloaded vehicle near Holtville, California. That case is pending.
Grossman praised the prosecutors on these cases for their excellent work, and he thanked U.S. Border Patrol, Customs and Border Protection, Homeland Security Investigations and the Coast Guard, as well as the San Diego Lifeguards. “You put your own lives on the line to rescue migrants in distress whether in the desert, the mountains or the ocean. You are heroes and we are all grateful for your efforts to protect everyone in our community irrespective of their immigration status.”
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
U.S. Attorney’s Office Shares Resources for Reporting Anti-Asian Hate IncidentsRead the Press Release
For Further Information, Contact:
Cindy Cipriani 619-546-9608SAN DIEGO – During the month of May, the United States Attorney’s Office for the Southern District of California (SDCA) joined in commemorating Asian American and Pacific Islander Heritage Month. “Asian Americans and Pacific Islanders are an important part of our country, our community, and our office,” said Acting U.S. Attorney Randy S. Grossman. “They contribute to all aspects of our society and have a strong tradition of leadership, strength, and courage.”
In recognition of AAPI Heritage Month, SDCA presented a public webinar titled “Understanding AAPI Discrimination in Our Past and Present to Reclaim our Future,” which was co-sponsored by the Pan-Asian Lawyers San of Diego and the Federal Bar Association, San Diego Chapter. The webinar recognized that anti-Asian hate incidents have risen recently and are likely severely underreported. To report a suspected hate crime or incident, call or visit one of the attached resources.
“This last year we have seen a significant rise in anti-Asian hate incidents across the country, including in our community. Hate crimes and acts of bigotry and xenophobia are disgraceful and
have no place in the Southern District of California,” said Acting U.S. Attorney Grossman. “My office condemns such acts of violence and remains committed to ensuring that the AAPI community is protected by holding accountable perpetrators of crimes fueled by hate, and our federal, state and local law enforcement partners hold the same commitment.” Acting U.S. Attorney Grossman thanked SDCA’s AAPI Special Emphasis Program Managers Connie Wu, Brandon Kimura, and Janaki Chopra, who organized AAPI Heritage Month events with SDCA Diversity Management Committee members Amy Wang, David Chu, and Kim-Thoa Hoang.Download the
Report Contacts for AAPI hate incidents
Visalia Woman Convicted of Smuggling Illegal PesticidesRead the Press Release
Assistant U. S. Attorney Melanie K. Pierson (619) 546-7976
NEWS RELEASE SUMMARY – May 27, 2021
SAN DIEGO – Selene Barraza of Visalia, California, was convicted by a federal jury yesterday of smuggling illegal pesticides into the United States from Mexico.
The jury found that Barraza smuggled 25 containers of pesticides and fertilizer concealed under the seats of her vehicle into the United States at the San Ysidro Port of Entry on February 26, 2020. The pesticides included 12 bottles of Metaldane and six bottles of Furadan. The active ingredient of Metaldane is methamidophos, and the active ingredient of Furdan is carbofuran. Both methamidophos and carbofuran are cancelled pesticides, which may not be legally imported, sold, distributed or applied in the United States.
According to trial testimony, Barraza purchased the pesticides at a store in Tijuana, where she was told that it was illegal to cross them into the United States but that if the pesticides were discovered, they would simply be seized. The amount of Metaldane alone purchased by Barraza would have lasted 100 to 200 years if applied to her property, according to the directions on the label. Barraza told agents she intended to use the pesticides and resell them. Barraza is scheduled to be sentenced before U.S. District Judge Dana M. Sabraw on August 20, 2021.
“These chemicals are banned in the United States because they are toxic and dangerous,” said Acting U.S. Attorney Randy Grossman. “This verdict is an important reminder that there are serious consequences for those who attempt to smuggle illegal pesticides into the U.S. with no regard for public safety.” Grossman praised Assistant U.S. Attorney Melanie Pierson, Department of Justice Trial Attorney Stephen Da Ponte and agents with Homeland Security Investigations and the U.S. Environmental Protection Agency, Criminal Investigation Division for their excellent work to protect the public.
“The jury’s verdict sends a clear message to individuals that knowingly put people at risk” said Scot Adair, the Special Agent in Charge of EPA’s criminal enforcement program in California. “With our partner agencies, EPA’s job is to protect the American people from highly toxic pesticides like the ones illegally smuggled into this country by the defendant.”
“The jury’s verdict confirms the seriousness of preventing these toxic chemicals from polluting the environment and putting people’s health at risk,” said Cardell T. Morant, Special Agent in Charge of Homeland Security Investigations (HSI). “HSI and our partners at Environmental Protection Agency – Criminal Investigation Division, U.S. Customs and Border Protection, and the U.S. Attorney’s Office are committed to working together to stop these deadly pesticides from entering the United States.”
This case was prosecuted by Assistant U.S. Attorney Melanie Pierson and DOJ Trial Attorney Stephen DaPonte.
DEFENDANT
Case Number 20cr1442-DMS
Selene Barraza Age: 34 Visalia, CA
SUMMARY OF CHARGES
Smuggling – Title 18, U.S.C., Section 545
Maximum penalty: 20 years of imprisonment and $250,000 fine
AGENCIES
Homeland Security Investigations
U.S. Environmental Protection Agency, Criminal Investigation Division
Twenty-Three Gang Members Charged in Crackdown on South Bay Heroin, Methamphetamine and Firearms TraffickersRead the Press Release
Assistant U. S. Attorneys Matthew J. Sutton (619) 546-8941 and Adam Gordon (619) 546-6720
NEWS RELEASE SUMMARY – May 27, 2021
SAN DIEGO – Eleven federal indictments unsealed in San Diego today charge twenty-three documented gang members and associates with heroin, methamphetamine and firearms trafficking. The crackdown announced today is the latest in a series of efforts by the Department of Justice to turn the tide of the opioid epidemic and reduce the inevitable violent crime that accompanies widespread drug trafficking.
As of today at 1 p.m., 17 of the 23 defendants are either in federal or state custody. Twelve were arrested this week, including nine this morning; the rest were already in custody. Authorities are continuing to search for six defendants. Many of the defendants are scheduled to be arraigned before U.S. Magistrate Judge Michael Berg at 2 p.m. today and tomorrow.
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.
“Gangs, drugs, and illegal firearms are infesting many of our neighborhoods and creating a violent culture that is unsafe for residents,” said Acting U.S. Attorney Randy S. Grossman. “This prosecution underscores that coordinated criminal activity will be met with a coordinated and focused law enforcement response by the U.S. Attorney’s Office and our law enforcement partners at the federal, state, and local level. We are committed to dismantling violent gangs and holding their members accountable for criminal conduct.”
“The FBI is proud to work alongside our local, state, and federal partners on the Violent Crimes Task Force to address the gang problem and rid our streets of the overflow of drugs and guns which continue to plague our communities,” said FBI Special Agent in Charge Suzanne Turner. “Today’s enforcement action is another example of why the Task Force was established – to be a force multiplier and combine short term, street level enforcement activity with long term, sophisticated techniques to root out and prosecute the entire criminal enterprise.”
“I would like to recognize the cooperation between all agencies who took part in this operation,” said San Diego Police Chief David Nisleit. “These collaborative efforts continue to make our communities safe.”
Acting U.S. Attorney Grossman praised the coordinated federal and state team effort in the culmination of this investigation. Agents and officers from the FBI Violent Crimes Task Force-Gang Group, San Diego Police Department, San Diego Sherriff’s Department, National City Police Department, Chula Vista Police Department, the Federal Bureau of Prisons, San Diego County Probation and the San Diego County District Attorney’s Office collaborated on this investigation. Attorneys from the Department of Justice, Office of Enforcement Operations, Electronic Surveillance Unit, also provided critical assistance to the investigation. Grossman also praised Assistant U.S. Attorneys Matthew J. Sutton and Adam Gordon for their excellent work on this case.
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.
The government’s case is being prosecuted by Assistant U.S. Attorneys Matthew J. Sutton and Adam Gordon.
DEFENDANTS Case Number: 21CR1404-DMS
Name
Age
Hometown
Jose Garcia (1),
aka “Little Man”
38
San Diego
Hector Esquivel (2),
aka “Kracks”
31
San Diego
Paul Godoy (3),
aka “Loco”
40
San Diego
Laura Mejia (4)
23
San Diego
SUMMARY OF CHARGES
Conspiracy to Distribute Methamphetamine, in violation of Title 21, U.S.C., Secs. 841(a)(1) and 846;
Distribution of Methamphetamine, in violation of Title 21, U.S.C., Sec. 841(a)(1);
Felon in Possession of a Firearm, in violation of Title 18, U.S.C., Secs. 922(g)(1) and 924(a)(2).
Maximum Penalties: For the drug charges: Life in prison with a mandatory minimum sentence of 10 years and a $10 million fine. For firearms charges: Ten years in prison and a $250,000 fine.
DEFENDANTS Case Number: 21CR1405-DMS
Name
Age
Hometown
*Alexa Allen (1)
29
San Diego
*Yuliana Guillen (2)
43
San Diego
SUMMARY OF CHARGES
Distribution of Methamphetamine, in violation of Title 21, U.S.C., Sec. 841(a)(1).
Maximum Penalties: For the drug charges: Life in prison with a mandatory minimum sentence of 10 years and a $10 million fine.
DEFENDANT Case Number: 21CR1406-DMS
Name
Age
Hometown
Fernando Banuelos (1),
aka “Puma”
39
San Diego
SUMMARY OF CHARGES
Distribution of Methamphetamine, in violation of Title 21, U.S.C., Sec. 841(a)(1);
Maximum Penalties: For the drug charges: Life in prison with a mandatory minimum sentence of 10 years and a $10 million fine.
DEFENDANT Case Number: 21CR1407-DMS
Name
Age
Hometown
Victor Cantero (1),
aka “Scooby”
44
San Diego
SUMMARY OF CHARGES
Distribution of Methamphetamine, in violation of Title 21, U.S.C., Sec. 841(a)(1);
Maximum Penalties: For the drug charges: Life in prison with a mandatory minimum sentence of 10 years and a $10 million fine.
DEFENDANTS Case Number: 21CR1408-DMS
Name
Age
Hometown
Rodolfo Estrada (1)
27
San Diego
*Alberto Flores (2)
40
San Diego
SUMMARY OF CHARGES
Felon in Possession of a Firearm, in violation of Title 18, U.S.C., Secs. 922(g)(1) and 924(a)(2);
Maximum Penalties: For firearms charges: 10 years in prison and a $250,000 fine.
DEFENDANTS Case Number: 21CR1409-DMS
Name
Age
Hometown
Andres Rodriguez (1),
aka “Dragon”
33
San Diego
Omar Solis (2),
aka “Lazy”
26
San Diego
SUMMARY OF CHARGES
Distribution of Methamphetamine, in violation of Title 21, U.S.C., Sec. 841(a)(1);
Maximum Penalties: For the drug charges: Life in prison with a mandatory minimum sentence of 10 years and a $10 million fine.
DEFENDANT Case Number: 21CR1410-DMS
Name
Age
Hometown
*Daniel Rodriguez (1),
aka “Flea”
36
San Diego
SUMMARY OF CHARGES
Felon in Possession of a Firearm, in violation of Title 18, U.S.C., Secs. 922(g)(1) and 924(a)(2);
Maximum Penalties: For firearms charges: Ten years in prison, and a $250,000 fine.
DEFENDANTS Case Number: 21CR1411-DMS
Name
Age
Hometown
Lucy Simmons (1)
47
San Diego
Jesse Gonzales (2)
40
San Diego
SUMMARY OF CHARGES
Distribution of Methamphetamine, in violation of Title 21, U.S.C., Sec. 841(a)(1);
Maximum Penalties: For the drug charges: Life in prison with a mandatory minimum sentence of 10 years and a $10 million fine.
DEFENDANT Case Number: 21CR1412-DMS
Name
Age
Hometown
Alexander Sotelo (1),
aka “Venom”
30
San Diego
SUMMARY OF CHARGES
Felon in Possession of a Firearm, in violation of Title 18, U.S.C., Secs. 922(g)(1) and 924(a)(2);
Maximum Penalties: For firearms charges: Ten years in prison, and a $250,000 fine.
DEFENDANTS Case Number: 21CR1413-DMS
Name
Age
Hometown
Gilberto Tovar (1)
32
San Diego
*Sandra Gonzalez (2)
55
San Diego
SUMMARY OF CHARGES
Distribution of Methamphetamine, in violation of Title 21, U.S.C., Sec. 841(a)(1);
Maximum Penalties: For the drug charges: Life in prison with a mandatory minimum sentence of 10 years and a $10 million fine.
DEFENDANTS Case Number: 21CR1414-DMS
Name
Age
Hometown
Carlos Teran (1),
aka “Tadow”
42
San Diego
*Andrew Diangelo (2),
aka “Cowboy”
37
San Diego
Luis Quintana (3),
aka “Maniac”
37
San Diego
Sylvia Freeman (4)
60
San Diego
Joe Franco (5)
44
San Diego
*Fugitives
SUMMARY OF CHARGES
Conspiracy to Distribute Controlled Substance, in violation of Title 21, U.S.C., Secs. 841(a)(1) and 846;
Conspiracy to Import Heroin, in violation of Title 21, U.S.C., Secs. 952, 960 and 963;
Felon in Possession of a Firearm, in violation of Title 18, U.S.C., Secs. 922(g)(1) and 924(a)(2);
Possession with Intent to Distribute Heroin, in violation of Title 21, U.S.C., Sec. 841(a)(1);
Importation of Heroin, in violation of Title 21, U.S.C., Secs. 952 and 960;
Maximum Penalties: For the drug charges: Life in prison with a mandatory minimum sentence of 10 years and a $10 million fine. For firearms charges: Ten years in prison, and a $250,000 fine.
The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
AGENCIES
Federal Bureau of Investigation
San Diego Police Department
San Diego Sheriff’s Department
Internal Revenue Service
Homeland Security Investigations
National City Police Department
Chula Vista Police Department
Federal Bureau of Prisons
California Department of Corrections and Rehabilitation
San Diego County Probation
San Diego County District Attorney’s Office
Local Firm and Owner Plead Guilty to Illegal Importation, Sale and Mailing of Badges Marketed as COVID-19 KillerRead the Press Release
Assistant U. S. Attorney Melanie K. Pierson (619) 546-7976
NEWS RELEASE SUMMARY – May 25, 2021
SAN DIEGO – A San Diego firm and its owner pleaded guilty in federal court today to charges relating to the unlawful importation, sale and mailing of an unregistered pesticide product from Japan marketed as a killer of airborne viruses such as COVID-19.
The product, known as EcoAirDoctor, was a small badge represented to emit a gas that would kill viruses within a certain distance. Such products are required to be registered as pesticides in the United States; no such registration was obtained.
Samir Haj, owner of EcoShield, LLC, admitted that he negotiated an agreement on behalf of the company with a foreign exporter that allowed him to import the product for a cost of $6.25 per unit. When he imported 125,000 units into the United States on June 10, 2019, he falsely declared the value to be approximately $2.07 per unit, resulting in an underpayment of Customs duty of $33,919.
The product was falsely described as an air purifier rather than a pesticide. The defendants shipped the product to individuals who purchased from their website via U.S. Mail, including a shipment to an undercover mailbox in Arizona in May of 2020. The product, as noted on the label, contains sodium chlorite, which is an item declared to be unmailable under U.S. Postal rules and regulations. Sodium chlorite was deemed unmailable because of its propensity to cause a fire or explosion.
As part of the plea agreements, the defendants agreed to forfeit $427,689, the proceeds from the sale of the illegal product, and to pay restitution of $86,754 for the unpaid duty and the cost of disposing of the product that was not sold. In addition, the company agreed to pay a fine of $42,000, for a total financial penalty of $556,443.
“This defendant took advantage of COVID-19 fears to market an illegal product,” said Acting U.S. Attorney Randy Grossman. “We are aggressively pursuing opportunists who exploit the pandemic to make money.” Grossman praised Assistant U.S. Attorney Melanie Pierson; trial attorney Stephen DaPonte of the Department of Justice’s Environmental Crimes Section; and agents with the U.S. Environmental Protection Agency, Criminal Investigations Division; Homeland Security Investigations; and the U.S. Postal Inspection Service for their exceptional work on this case.
“Profiting from the illegal import, sale, and shipment of an unregistered, untested, and potentially dangerous pesticide, especially at a time when the public had legitimate safety concerns about the transmission of COVID-19, is egregious criminal conduct that must be stopped,” said Acting Assistant Attorney General Jean Williams of the Justice Department’s Environment and Natural Resources Division. “We will work with our partners at U.S. Attorneys’ Offices and law enforcement agencies in prosecuting such conduct to the fullest extent of the law.”
“Unregistered pesticide products pose serious public health dangers,” said Special Agent in Charge Scot Adair of EPA’s criminal enforcement program in California. “Today’s guilty plea demonstrates that EPA and our law enforcement partners are committed to protecting the American people from products that make fraudulent – and potentially harmful - COVID-19 protection claims.”
“Whenever someone uses the U.S. Mail to send dangerous, illegal or improper items, Postal Inspectors will find them and bring them to justice,” said Eric Shen, Acting Postal Inspector in Charge, Los Angeles Division of the U.S. Postal Inspection Service. “We remain committed to keeping the mail safe for our customers and our employees.”
“This individual violated several federal laws and jeopardized public safety by marketing and selling an unproven device,” said Cardell T. Morant, Special Agent in Charge of Homeland Security Investigations (HSI). “It’s despicable that he preyed upon people’s fear of COVID-19 to turn a profit. HSI will continue to work with our partners at Environmental Protection Agency -Criminal Investigation Division, California Department of Toxic Substances Control, U.S. Postal Inspection Service, Customs and Border Protection, and the U.S. Attorney’s Office to ensure public safety during this pandemic.”
Sentencing is scheduled for August 13, 2021 at 9 a.m. Before U.S. District Judge Janis L. Sammartino.
DEFENDANTS Case Number 21cr1463
EcoShield, LLC Formed: July 2018 San Diego, California
Samir Haj Age: 46 San Diego, California
SUMMARY OF CHARGES
For Eco Shield LLC
Entry of Goods Falsely Classified – Title 18, U.S.C., Section 541
Maximum penalty: Five years of probation and $500,000 fine or twice the amount of gross gain or loss, restitution to victims, forfeiture of proceeds
For Samir Haj
Entry of Goods Falsely Classified – Title 18, U.S.C., Section 541
Maximum penalty: Two years in custody and $250,000 fine, restitution to victims, forfeiture of proceeds
Nonmailable Injurious Articles – Title 18, U.S.C., Section 1716(j)(1)
Maximum penalty: One year in custody and $100,000 fine
Distribution or Sale of Unregistered Pesticides – Title 7, U.S.C., Sections 136j(a)(1)(A) and 136l(b)(1)(B)
Maximum penalty: One year in custody and $100,000 fine
AGENCIES
U.S. Environmental Protection Agency, Criminal Investigations Division
Homeland Security Investigations
U.S. Postal Inspection Service
Third Defendant Sentenced to Almost 19 Years in Fentanyl Overdose Death of Longtime Rugby PlayerRead the Press Release
Assistant U. S. Attorney Larry Casper (619) 546-6734
NEWS RELEASE SUMMARY – May 24, 2021
SAN DIEGO – Andrew Samuel Daniel Gossai was sentenced in federal court today to 226 months in prison for supplying the fentanyl that led to the fatal overdose of 45-year old Derrick Hotchkiss, a longtime rugby player for the San Diego Old Aztecs Rugby Football Club.
Gossai, the last of three defendants to plead guilty in the case, admitted to distributing the fentanyl that caused the death and to selling in excess of 400 grams of fentanyl.
At today’s sentencing hearing, U.S. District Judge Anthony J. Battaglia noted the “severe costs the crime has brought to the community” and that the defendant was “up the chain of distribution and had a long history of selling drugs.” The defendant was “clearly aware of the risks” posed by fentanyl yet continued distributing the drug.
Gossai, who has a history of drug sales convictions dating back more than a decade, sold fentanyl despite recognizing the dangers associated with the drug. Upon his arrest, Gossai admitted to law enforcement that, despite his sales of fentanyl, he was “scared” by the drug. Upon executing a search warrant at Gossai’s residence, law enforcement seized fentanyl in powdered and pill form; a digital scale with powdered residue; drug paraphernalia; and other illicit narcotics.
“Fentanyl continues to plague our community, and tragic deaths such as that of Derrick Hotchkiss are increasing exponentially,” said Acting U.S. Attorney Randy S. Grossman. “We will continue to work with our law enforcement and community outreach partners to reverse this terrible trend.”
“Justice has finally been served in the death of Derrick Hotchkiss due of the hard work of the men and women on DEA's NTF Team 10 and our law enforcement partners,” said DEA Special Agent in Charge John W. Callery. “This case is a stark reminder to people selling drugs: If the drugs you sell cause someone to die, we will bring you to justice.”
Previously, defendants Christopher Emison and Jeffrey Alden Blair were also sentenced in connection with Hotchkiss’ death to 168 and 188 months in custody respectively. According to the government’s sentencing papers, Gossai sold the fatal dose of fentanyl to Blair who made the purchase for both Emison and himself. In turn, Emison sold the fatal dose directly to Hotchkiss shortly before his overdose death.
Acting U.S. Attorney Grossman praised prosecutor Larry Casper as well as the agents from Narcotics Task Force Team 10, a multi-agency team housed by DEA that was created in July 2018 to address drug overdose deaths in San Diego, for their efforts on these cases.
For those who suffer from addiction, please know there is help. Call the Crisis line at 888-724-7240; it’s always open.
DEFENDANTS
Case Number 19cr3253-AJB
Andrew Samuel Daniel Gossai Age: 33 San Diego, California
Case Number 19cr3252-AJB
Jeffrey Alden Blair Age: 34 San Diego, California
Christopher Glenn Emison Age: 33 El Cajon, California
SUMMARY OF CHARGES
Andrew Samuel Daniel Gossai and Jeffrey Alden Blair:
Distribution of Fentanyl – Title 21 U.S.C. Section 841(a)(1) and (b)(1)(C)
Maximum Penalties – Mandatory minimum of 10 years, and maximum of life in prison and $10 million fine.
Christopher Glenn Emison
Sentenced to 168-months on Distribution of Fentanyl – Title 21 U.S.C. Section 841(a)(1) and (b)(1)(C) with maximum penalties – mandatory minimum of five years and maximum of 40 years in prison and $5 million fine.
INVESTIGATING AGENCIES
Drug Enforcement Administration
Federal Bureau of Investigation
Department of Homeland Security
California Department of Healthcare Services
San Diego Police Department
(The above-listed agencies are represented on DEA NTF Team 10)
Russian Hacker Sentenced to 30 Months for Running a Website Selling Stolen, Counterfeit and Hacked AccountsRead the Press Release
Assistant U. S. Attorney Alexandra F. Foster (619) 546-6735
NEWS RELEASE SUMMARY – May 24, 2021
SAN DIEGO – Kirill Victorovich Firsov, a Russian citizen, was sentenced to 30 months in custody for his role as the administrator of a website that catered to cyber criminals by virtually selling items such as stolen credit card information, other personal information and services to be used for criminal activity.
The now-defunct online platform DEER.IO started operations as of at least October 2013, and, as of Firsov’s arrest in March 2020, the platform hosted approximately 3,000 active shops with sales exceeding $17 million. Although Firsov maintained that the bulk of the sales on DEER.IO were Russian accounts, the parties agreed that the government could show that shop owners on the DEER.IO platform sold at least $1.2 million in U.S.-based stolen information, to include the gamer accounts identified in the plea agreement.
At sentencing, the prosecutor noted that Firsov built the DEER.IO platform in 2013 and maintained it for almost seven years. Further, the prosecutor asserted that Firsov knew DEER.IO was selling stolen and counterfeit accounts, because he built the platform, which included a number of icons for U.S.-based companies that anyone setting up a store on DEER.IO could click on to then sell stolen accounts from those U.S. companies. Also, DEER.IO was easily searchable, so anyone --including Firsov-- could search the platform for stolen U.S. accounts and information. Even though it sold stolen accounts, DEER.IO was not cloaked in secrecy and required no special password for access, because everything was run out of Russia, and American law enforcement could gain no foothold.
DEER.IO sold not only stolen accounts, like the gamer accounts identified in the plea agreement, but also Americans’ personal information, to include names, current addresses, telephone numbers and at times Social Security numbers. On March 4, 2020, the FBI purchased 1,100 gamer accounts, and on March 5, 2020, the FBI purchased the personal information for over 3,600 Americans. On March 7, 2020, Firsov was arrested by the FBI in New York City when he flew into JFK Airport from Moscow.
In sentencing Firsov to 30 months, U.S. District Judge Cynthia Bashant acknowledged that he had been incarcerated in the United States for 15 months, while the COVID-19 pandemic swept the world and, very specifically, the American jail system. She also recognized that Firsov had been incarcerated in the United States, far from his support system of family and friends in Russia. Finally, she noted that once released, Firsov would likely be incarcerated as he underwent deportation proceedings back to Russia. Nonetheless, she noted that without Firsov’s involvement, there would be no DEER.IO, and that facilitated the sale of stolen property on a large scale. Balancing these factors, Judge Bashant sentenced Firsov to 30 months.
“This platform provided cybercriminals with easy access to the personal accounts and information of people around the world, including Americans,” said Acting U.S. Attorney Randy Grossman. “Stopping that flow of stolen information to criminals is critical to addressing the cybercrime threats facing our country, and we will prosecute those who are responsible.” Grossman commended the excellent work of Assistant U.S. Attorney Alexandra F. Foster and the FBI agents on this case.
“The FBI will pursue cyber-criminals across the globe,” said FBI Special Agent in Charge Suzanne Turner. “Today’s sentence sends a message – conducting criminal activity from outside the United States does not mean you are out of reach. The FBI will identify and pursue criminal actors in the cyber-sphere, regardless of where they operate, and work to bring them to justice in a United States court.”
If victimized in a cyber security incident, the FBI encourages companies to immediately contact the FBI. Specialized cyber agents will work with companies to protect company information and the personal data of its customers. Please contact the FBI San Diego's cyber program by calling our field office at (858) 320-1800 or submitting tips at Internet Crime Complaint Center (IC3).
DEFENDANT Case Number 20cr1182-BAS
Kirill Victorovich Firsov Age: 30 Moscow, Russia
SUMMARY OF CHARGE
Unauthorized Solicitation of Access Devices (18 U.S.C. § 1029(a)(6))
Maximum Penalty: Ten years in prison, $250,000 fine.
INVESTIGATING AGENCY
FBI
Pilot of Boat that Capsized 7.5 Miles West of Mission Bay Sentenced in Drug and Human Smuggling EventRead the Press Release
Assistant U. S. Attorney Charlotte E. Kaiser (619) 546-7282
NEWS RELEASE SUMMARY – May 24, 2021
SAN DIEGO – The pilot of a boat that capsized during a drug and human smuggling event was sentenced in federal court today to 50 months in custody.
Henrry Javier Garcia Valle pleaded guilty in September 2020 to Possession of Methamphetamine with Intent to Distribute on Board a Vessel, in violation of Title 46, United States Code, Section 70502(a)(1).
At the hearing, U.S. District Judge John Houston admonished the defendant: “Tell the other fishermen – ‘Don’t do it.’ . . . You are placing everyone in danger. The smugglers don’t care. Tell your friends don’t do this.”
“Maritime drug and human smugglers repeatedly engage in dangerous tactics to avoid law enforcement,” said Acting U.S. Attorney Randy Grossman. “In this event, 14 individuals including the defendant almost lost their lives due to the defendant’s conduct. We will continue to hold accountable those who engage in these dangerous tactics.” Grossman praised Assistant U.S. Attorney Charlotte Kaiser and law enforcement partners for their excellent work on this case.
“We’re encountering more smugglers who attempt to avoid detection by navigating their ill-equipped vessels farther out to sea,” said Cardell T. Morant, Special Agent in Charge of Homeland Security Investigations (HSI). “It cannot be overstated—dangerous smuggling operations like these could potentially result in lives lost at sea.”
“Smuggling attempts like these oftentimes lead to tragic consequences, which fortunately were avoided this time,” said Rear Adm. Brian Penoyer, Eleventh Coast Guard District commander. “Today, justice has been served, and the Coast Guard will continue to work with our maritime partners to bring these criminals to justice.”
According to the government’s sentencing memorandum, on July 25, 2020 at 11 p.m., air interdiction agents spotted a vessel using no navigational lights headed towards the United States from Mexico. At approximately 3:58 a.m. on July 26, 2020, the U.S Coast Guard attempted to interdict the vessel containing 14 individuals, who later were determined to be non-citizens without legal status to be in the United States. The location was approximately 7.5 miles west of Mission Bay. Reports from law enforcement and information from fellow defendants indicated that the defendant gave chase for several minutes and then the boat stopped. At that point, law enforcement saw certain individuals toss bags from the boat. Three of the bags subsequently were recovered and contained approximately 37.2 kilograms of methamphetamine. On further testing, the amount came to 35 kilograms of actual methamphetamine, and was deemed 100 percent pure.
At the time the boat stopped, it began to take on water. The occupants shifted and the boat began to capsize. U.S. Coast Guard officials were able to rescue all 14 occupants including defendant and three co-defendants identified as crew members. Two of those other codefendants – Faustino Dominguez Padilla and Ivan Ramirez Guzman - pleaded guilty to human smuggling and were sentenced to approximately 7.5 and 10 months in custody, respectively. Another co-defendant – Joel Lopez Burgos – pleaded guilty to the same charge as defendant and will be sentenced in June 2021.
As part of his plea agreement, the defendant admitted that he was pilot or captain of the vessel that contained 14 occupants including himself, all of whom lacked lawful status to enter or remain in the United States, as well as the 37.2 kilograms of methamphetamine. The defendant admitted that he conspired to bring the occupants and the drugs into the United States illegally. He further admitted that the boat not only had no navigational lights on during the overnight journey but also that it had engine problems and that none of the defendants was wearing life vests. He additionally recognized that the boat capsized after a pursuit.
DEFENDANTS Case Number 20CR2524-JAH
Henrry Javier Garcia Valle Age: 38 Sinaloa, Mexico
Joel Lopez Burgos Age: 35 Sinaloa, Mexico
Faustino Dominguez-Padilla Age: 37 Jalisco, Mexico
Ivan Ramirez Guzman Age: 27 Sinaloa, Mexico
SUMMARY OF CHARGES
For Defendants Henrry Javier Garcia Valle and Joel Lopez Burgos:
Possession of Methamphetamine with Intent to Distribute on Board a Vessel – Title 46, United States Code, Section 70502(a)(1) – Maximum penalty: Life in prison and $10 million fine.
For Defendants Faustino Dominguez-Padilla and Ivan Ramirez Guzman:
Attempted Bringing in Without Presentation and Aiding and Abetting – Title 8, U.S.C., Section 1324(a)(2)(B)(iii) and Title 18, United States Code, Section 2
Maximum penalty: Five years in prison, and $250,000 fine.
AGENCIES
Homeland Security Investigations
U.S. Border Patrol
U.S. Coast Guard
San Diego Man Pleads Guilty in Fentanyl Overdose DeathRead the Press Release
Assistant U. S. Attorneys Stephen H. Wong (619) 546-9464 and Mikaela L. Weber (619) 546-9734
NEWS RELEASE SUMMARY – May 19, 2021
SAN DIEGO – Tony Davis pleaded guilty in federal court today, admitting that he supplied fentanyl that led to the fatal overdose of Jacqueline Galvan, 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 that on October 24, 2018 he distributed heroin and fentanyl to another street-level drug dealer who in turn distributed the drugs that caused Galvan’s death.
Davis further acknowledged selling more than 100 grams of heroin to the drug dealer who was, in turn, distributing those drugs to others. Davis pleaded guilty before U.S. Magistrate Judge Linda Lopez to Distribution of Heroin and Fentanyl and Conspiracy to Distribute Heroin and is scheduled to be sentenced on August 6, 2021 by U.S. District Judge Cathy Ann Bencivengo.
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.
“This case should put drug dealers and those who supply them on notice that every time we have an overdose death, law enforcement will come looking for you, because lives are at stake,” said Acting U.S. Attorney Randy Grossman. “We will not stop with the street-level dealers but will follow the supply chain as far up as necessary and will use every available criminal and civil tool to combat this deadly epidemic and stop these tragic losses.”
“This case is another example of how DEA and our law enforcement partners on Team 10 – the Overdose Response Team – are working together to put the people responsible for supplying deadly drugs in prison,” said DEA Special Agent in Charge John W. Callery. “DEA will continue to aggressively pursue both street-level dealers and their suppliers and bring justice to the families who lost a loved one to a drug overdose.”
The United States Attorney’s Office is working closely with the San Diego County District Attorney’s Office, the National City Police Department, the Drug Enforcement Administration and other federal, state and local law enforcement partners to investigate and prosecute cases targeting those who supply drugs in fatal overdose cases.
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
CEO of San Diego Startup Sentenced for Bilking more than $1.5 Million from his CompanyRead the Press Release
Assistant U. S. Attorney Michelle L. Wasserman (619) 546-8431
NEWS RELEASE SUMMARY – May 17, 2021
SAN DIEGO – Jeffrey Fildey, founder and former CEO of San Diego startup GoFormz Inc., was sentenced in federal court today to 51 months in custody for embezzling more than $1.5 million from the company he co-founded.
According to court records, at the time of Fildey’s crime, GoFormz had had raised several rounds of outside funding and appeared to be a start-up success story. Fildey stole the funds despite earning a six-figure salary, and used the stolen funds to support a luxurious lifestyle, including the purchase of a $20,000 diamond ring, fancy vacations, an Audi, and recurring transfers to a woman with whom he was having an extramarital affair. According to public records, GoFormz Inc., founded in 2012, is a San Diego company that provides online mobile forms.
According to Fildey’s plea agreement and court records, beginning on or before September 30, 2015, and continuing through August 12, 2017, Fildey used various methods to defraud GoFormz. His deceptive ways included obtaining loans, supposedly on the company’s behalf, but then taking the funds for himself; putting personal expenditures on GoFormz credit cards which the company then paid for; obtaining cash advances for himself on GoFormz credit cards; and simply stealing money directly from the company’s bank account.
Fildey took out a total of three unauthorized loans on behalf of GoFormz, totaling approximately $600,000, and transferred the funds to his personal bank account shortly after the loaned funds were transferred to GoFormz. In addition to the loans, Fildey withdrew over $700,000 in cash from the GoFormz bank account for his personal use and made over $2,600 in unauthorized purchases on the GoFormz corporate credit card.
According to Court records, the company discovered Fildey’s deception when its payroll bounced in July 2017, and the company realized it had only approximately $9,000 in its bank account. As a result of Fildey’s conduct, the company had to fire 12 of its 42 employees and its valuation plummeted.
“Small business is the lifeblood of our community,” stated Acting U.S. Attorney Randy Grossman. “In stealing from his business, Mr. Fildey stole from all those whose livelihoods depended upon the company. Embezzlement and fraud will be prosecuted to the full extent of the law.”
“The defendant’s gross abuse of power is shocking on two fronts,” said FBI Special Agent in Charge Suzanne Turner. “As CEO, he lined his own pockets with more than $1.5 million at the expense of the company he was charged with leading. As an employee of the company, he put the livelihoods of his fellow employees and the future of the company in peril. Let this serve as another reminder - corporate greed has no place in society and those who pursue such a path will face consequences.”
Fildey admitted in his plea agreement that as a result of his fraud, GoFormz lost $1,544,147. In addition to custody, Fildey was ordered to pay restitution of $1,345,897 and to forfeit $1,156,001. The defendant was immediately remanded into custody to begin serving his sentence.
DEFENDANT Case Number 20cr1917-LAB
Jeffrey Fildey Age: 56 Las Vegas, NV
SUMMARY OF CHARGES
Wire Fraud – Title 18, U.S.C., Section 1343
Maximum penalty: Twenty years in prison and $250,000 fine or twice the gross gain or loss from the offense, whichever is greater
AGENCY
Federal Bureau of Investigation
Five Brazilian Nationals Charged in Nationwide Identity Theft Ring that Exploited App-Based Rideshare and Food Delivery Companies and CustomersRead the Press Release
Assistant U.S. Attorney Kevin Mokhtari (619) 546-8402
NEWS RELEASE SUMMARY – May 13, 2021
SAN DIEGO – Five Brazilian nationals were charged today by criminal complaint with engaging in a nationwide conspiracy to establish fraudulent driver accounts with multiple internet- and app-based rideshare and food-delivery service companies, including by using identities stolen from the very customers of those same companies.
Four of the five defendants—Gustavo De Avila Moreira Farinha, Tatiane Pereira Arantes, Natalia Magalhaes Rocha and Leonardo Trulsen De Oliveira—were arrested early this morning by agents from Homeland Security Investigations and other state and federal agencies. A fifth defendant remains a fugitive. The arrested defendants are due to make their initial appearance tomorrow morning before U.S. Magistrate Judge Jill L. Burkhardt.
According to the complaint, the alleged scheme involved obtaining images and information from victims’ driver’s license and Social Security numbers; creating accounts to drive for the rideshare and delivery companies using those stolen identification documents; using, renting and selling those accounts, including to people who might not otherwise qualify to drive for these companies; incurring IRS Form 1099s for victims’ whose identities were stolen; and using fake driver accounts to collect referral bonuses. To date, agents have identified close to 100 victims in California and across the United States.
As alleged in the complaint, this scheme began in approximately 2018, initially with rideshare companies. In Spring 2020, with the COVID-19 pandemic in full swing and Californians in lockdown, the conspirators shifted away from the rideshare companies, which saw a dramatic decrease in traffic, to food, grocery and other delivery companies, which saw a corresponding and precipitous increase in demand.
During deliveries using these fraudulent accounts, including when verifying IDs, some of the conspirators used the fraudulent accounts to further perpetuate the scheme by stealing additional identities and thereafter creating additional fraudulent accounts in a perpetuating cycle of identity theft.
“Identity theft is a special kind of misery for victims who often are forced into a years-long legal morass of confusion and frustration to reclaim their good names,” said Acting U.S. Attorney Randy Grossman. “Today’s arrests are the first strike back on behalf of those victims.” Grossman praised the extraordinary efforts of prosecutor Kevin Mokhtari and agents from Homeland Security Investigations to achieve justice in this case.
Cardell T. Morant, Special Agent in Charge for Homeland Security Investigations, San Diego, stated, “HSI San Diego remains dedicated to protecting our communities from technology-enabled consumer crime and identity theft.” Special Agent in Charge Morant further noted the assistance of local, regional, and federal partners on this investigation.
Anyone who may be a victim of this crime or who thinks they may have information that may be relevant to this investigation is asked to call HSI San Diego at (760) 901-1004.
This investigation is being handled by Assistant U.S. Attorney Kevin Mokhtari and, prior to his departure from the office, was initiated and investigated by former Assistant U.S. Attorney Francis A. DiGiacco.
DEFENDANTS Case Number 21MJ1891-JLB
Gustavo De Avila Moreira Farinha Age: 29 Brazil
Tatiane Pereira Arantes Age: 37 Brazil
Natalia Magalhaes Rocha Age: 29 Brazil
Leonardo Trulsen De Oliveira Age: 29 Brazil
Defendant 5 - Fugitive Brazil
SUMMARY OF CHARGES
Count 1 - Conspiracy to Commit Wire Fraud – Title 18, U.S.C., 1349
Maximum Penalty: Twenty years in prison, $250,000 fineCount 2 – Conspiracy to Launder Monetary Instruments – Title 18, U.S.C., 1956(a)(1)(A)(i), (b)(i), and 1956(h)
Maximum Penalty: Twenty years in prison, $500,000 fine or twice the value of the monetary instruments
Counts 3-17- Aggravated Identity Theft – Title 18, U.S.C., 1028A
Maximum Penalty: Mandatory minimum sentence of two years in prison, to run consecutively to the specified felony.
AGENCIES
Department of Homeland Security, Homeland Security Investigations
Alleged Drug Cartel Leader ChargedRead the Press Release
Director of Media Relations Kelly Thornton (619) 546-9726
NEWS RELEASE SUMMARY – May 12, 2021
SAN DIEGO – A federal grand jury indictment was unsealed in San Diego today against alleged Mexican drug cartel leader Jesus Gonzalez Penuelas in connection with suspected heroin and fentanyl trafficking. Penuelas was also the target of sanctions imposed today by the U.S. Department of the Treasury.
The indictment, returned on January 27, 2017, charges Gonzalez Penuelas with Conspiracy to Distribute Controlled Substances Intended for Importation, and Conspiracy to Import Controlled Substances. On January 30, 2017, the Clerk of the Court issued a sealed warrant for his arrest. Gonzalez Penuelas remains a fugitive.
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) identified Jesus Gonzalez Penuelas and the Gonzalez Penuelas Drug Trafficking Organization (Gonzalez Penuelas DTO) as Significant Foreign Narcotics Traffickers pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act). Please see https://home.treasury.gov/news/press-releases/jy0172.
Gonzalez Penuelas is the alleged leader of the Gonzalez Penuelas DTO, which is one of the largest raw opium gum and heroin sources of supply in northern Mexico, and increasingly a major distributor of fentanyl. The Gonzalez Penuelas DTO operates primarily in Sinaloa and Sonora, Mexico, various ports of entry in the United States, as well as numerous U.S.-based distribution cells in California, Texas, Colorado, Washington, Utah, and Nevada. The upper echelons of the Gonzalez Penuelas DTO hierarchy consist of Jesus Gonzalez Penuelas’ family members. The Gonzalez Penuelas DTO cooperates with other DTOs within Mexico, to include acting as an enforcement arm for the various Mexican DTO’s trafficking routes and is aligned with Mexican drug traffickers Fausto Isidro Meza Flores and Rafael Caro Quintero. The Treasury Department’s Office of Foreign Asset Control designated Fausto Isidro Meza Flores in January 2013 for his role in narcotics trafficking. The President identified Rafael Caro Quintero as a significant foreign narcotics trafficker pursuant to the Kingpin Act in 2000.
“This indictment and the Treasury Department sanctions announced today show that the Department of Justice, together with our law enforcement partners, will aggressively investigate and prosecute the most significant cartels and kingpins who import illegal drugs into the United States,” said Acting U.S. Attorney Randy S. Grossman. Grossman praised Assistant U.S. Attorney Matthew J. Sutton, HSI and DEA agents and all law enforcement partners for their excellent work on this case.
“This important Kingpin designation is an example of the effectiveness of our local and national law enforcement partnerships to help bring justice to drug smuggling organizations who benefit the most from smuggling dangerous drugs across the border,” said Cardell T. Morant, Special Agent in Charge for Homeland Security Investigations in San Diego, CA. “The nation’s opioid epidemic continues affect our local communities and our agents are working tirelessly with our partners to disrupt the flow of these and all illegal narcotics.”
“DEA and our law enforcement partners continue to target organizations that are fueling the American opioid epidemic,” said DEA Special Agent in Charge John W. Callery. “The indictment and the Department of Treasury sanctions against Jesus Gonzalez Penuelas serve as a warning to others causing the deaths of Americans through drug trafficking: we will utilize every resource available to disrupt your drug trafficking organization and bring you to justice.”
The indictment in this case marks the conclusion of the initial phase of a multi-year OCDETF investigation. This joint Homeland Security Investigations (HSI) and Drug Enforcement Administration (DEA) investigation targeted the leadership elements, lieutenants, associates, and money launderers connected with the Rafael Caro-Quintero DTO and Beltran Leyva Organization.
Acting U.S. Attorney Grossman also praised the outstanding work of the federal team from HSI Calexico / DEA Imperial County in the culmination of this investigation. 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.
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.
The government’s case is being prosecuted by Assistant U.S. Attorney Matthew J. Sutton.
DEFENDANT Case Number: 17CR00217-CAB
Jesus Gonzalez Penuelas, aka Chuy Gonzalez Age: 51 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 5 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 5 years supervised release.
AGENCIES
Homeland Security Investigations
Drug Enforcement Administration
Department of Homeland Security, Joint Task Force – Investigations
Customs and Border Protection, Office of Field Operations
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
United States Attorney’s Office for the District of Colorado
United States Attorney’s Office for the District of Oregon
Department of Treasury, Office of Foreign Assets Control
Customs and Border Protection, Office of Border Patrol
Immigration and Customs Enforcement, Enforcement and Removal Operations
El Centro Police Department
Brawley Police Department
Imperial County District Attorney’s Office
Imperial Valley, Law Enforcement Coordination Center
*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.
Federal Jury Finds Man Guilty of Possessing Molotov Cocktails at La Mesa ProtestRead the Press Release
Assistant U. S. Attorneys Matthew Brehm (619) 546-8983 and Joseph J. Orabona (619) 546-7951
NEWS RELEASE SUMMARY – May 11, 2021
SAN DIEGO – After a two-day jury trial, Zachary Alexander Karas of San Diego was found guilty of possessing incendiary devices known as Molotov cocktails at a protest that began on May 30, 2020 in La Mesa. After the jury returned a guilty verdict, Chief District Judge Dana M. Sabraw remanded Karas into custody. Sentencing is set for August 13, 2021, at 9 a.m. before Chief Judge Sabraw.
“No one should bring a Molotov cocktail to disrupt a protest,” said Acting U.S. Attorney Randy Grossman. “This was a serious crime that had potential to cause significant damage.” 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 verdict sends a message to those who utilize lawful, peaceful protests to disguise their criminal acts,” said FBI Special Agent in Charge Suzanne Turner. “Zachary Karas was in possession of a functioning incendiary device which, thankfully, was not used. Regardless, citizens have the right to peacefully assemble without threat of disruption, criminal activity, or violence. The FBI is committed to working with our law enforcement partners to protect those who are exercising their constitutional rights as well as protecting the safety of the community.”
“ATF is the Federal agency primarily responsible for administering and enforcing the federal laws pertaining to destructive devices, explosives, and arson,” said ATF Special Agent in Charge Monique Villegas. “ATF will use all its resources to ensure destructive devices (Molotov cocktails) are not being used in our communities. We are glad the jury delivered the guilty verdict sending a message to those who consider creating their own devices for criminal use.”
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 explained in the statement, “And I heard of the fires. So I came back out with the, yes, intention to start a fire, but I did not have a part in the fire.” Karas said he got the bottles from a Rite Aid parking lot and used 87 octane gasoline as the fuel. He claimed that he had acted alone.
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.
A special agent with the ATF inspected the Molotov cocktails and found them to be functioning incendiary 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
U.S. Department of Justice Honors Law Enforcement During National Police WeekRead the Press Release
Kelly Thornton (619) 546-9726
NEWS RELEASE SUMMARY – May 10, 2021
SAN DIEGO — In honor of National Police Week, Attorney General Merrick Garland and Acting U.S. Attorney Randy Grossman recognize the service and sacrifice of federal, state, local, and Tribal law enforcement. This year, the week is observed Sunday, May 9 through Saturday, May 15, 2021.
“This week is a time to honor our law enforcement officers who have made the ultimate sacrifice in service to our nation,” said Attorney General Garland. “I am constantly inspired by the extraordinary courage and dedication with which members of law enforcement act each day, putting their lives on the line to make our communities safer. To members of law enforcement and your families: we know that not a single day, nor a single week, is enough to recognize your service and sacrifice. On behalf of the entire Department of Justice, you have our unwavering support and eternal gratitude.”
“Our federal, state, local and tribal law enforcement officers in the Southern District of California face harrowing situations day after day, yet they keep coming back to protect and serve. Some have even given their lives to do so,” said Acting U.S. Attorney Grossman. “I am grateful beyond words to our law enforcement partners for their extraordinary dedication, and the sacrifices that they and their families have made for our communities.”
In 1962, President Kennedy issued the first proclamation for Peace Officers Memorial Day and National Police Week to remember and honor law enforcement officers for their service and sacrifices. Peace Officers Memorial Day, which every year falls on May 15, specifically honors law enforcement officers killed or disabled in the line of duty.
Each year, during National Police Week, our nation celebrates the contributions of law enforcement from around the country, recognizing their hard work, dedication, loyalty, and commitment to keeping our communities safe. This year the COVID-19 pandemic has highlighted law enforcement officers’ courage and unwavering devotion to the communities that they have sworn to serve.
During the Roll Call of Heroes, a ceremony coordinated by the Fraternal Order of Police (FOP), more than 300 officers will be honored. Based on data submitted to and analyzed by the National Law Enforcement Officer Memorial Fund (NLEOMF), of the law enforcement officers who died nationwide in the line of duty in 2020, nearly 60 percent succumbed to COVID-19.
Last year, the Southern District of California, which includes San Diego and Imperial counties, lost two officers who served with distinction and will be added to the memorial: Efren Coronel of El Centro Police Department, who contracted COVID in the line of duty, and Daniel G. Walters of the San Diego Police Department, who was lost during gunfire.
Additionally, according to statistics reported by the Federal Bureau of Investigation (FBI) through the Law Enforcement Officer Killed and Assaulted (LEOKA) Program, 46 law enforcement officers died as a result of felonious acts and 47 died in accidents in 2020. LEOKA statistics can be found on FBI’s Crime Data Explorer website.
The names of the 394 fallen officers who have been added in 2020 to the wall at the National Law Enforcement Officer Memorial will be read on Thursday, May 13, 2021, during a Virtual Candlelight Vigil, which will be livestreamed to the public at 8 p.m. EDT. The Police Week in-person public events, originally scheduled for May, have been rescheduled due to ongoing COVID-19 concerns to October 13-17, 2021. An in-person Candlelight Vigil event is scheduled for October 14, 2021.
Those who wish to view the Virtual Candlelight Vigil on May 13, 2021, can watch on the NLEOMF YouTube channel found at https://www.youtube.com/user/TheNLEOMF. The FOP’s Roll Call of Heroes can be viewed at www.fop.net. To view the schedule of virtual Police Week events in May, please view NLEOMF’s Police Week Flyer.
To learn more about National Police Week in-person events scheduled for October, please visit www.policeweek.org.
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Former City Officials Sentenced for Accepting Bribes in Exchange for Cannabis Dispensary PermitRead the Press Release
Two California men were each sentenced today to two years in prison for accepting bribes in return for a guarantee of a city permit to open a commercial cannabis dispensary.
According to the plea documents, former Calexico, California, City Councilman David Romero, 37, and Bruno Suarez-Soto, 29, a former commissioner on the city’s Economic Development and Financial Advisory Commission, accepted $35,000 in cash bribes from an undercover FBI Agent who they believed represented investors seeking to open a cannabis dispensary in Calexico. In return, Romero and Soto guaranteed the rapid issuance of a city permit for the dispensary and to revoke or hinder other applicants, if necessary, to ensure that the bribe payer’s application was successful. Both men also acknowledged that they had taken bribes from others in the past. Referring to this $35,000 payment, one of them told the undercover agent, “This isn’t our first rodeo.”
According to admissions in the plea agreements and other documents filed in court, Romero and Soto accepted the $35,000 from the undercover FBI agent in two installments. At the conclusion of a meeting between the defendants and the undercover FBI agent on Jan. 9, 2020, with Romero looking on, the undercover agent handed Soto $17,500 in cash. The agent asked whether “we’re good,” and Romero responded, “Trust me.” On Jan. 30, 2020, Romero and Soto accepted the second installment of $17,500 in cash.
In addition to being a councilman, Romero served as Calexico’s Mayor Pro Tem, meaning he was set to become Mayor in July 2020. Soto recently resigned from the city commission responsible for promoting business and community growth and coordinating with prospective developers to help them invest in the city of Calexico. Romero resigned his position with the city in connection with his plea agreement, effective June 8, 2020.
In addition to the prison sentence, Romero and Soto were ordered to pay forfeiture in the amount of $17,500.
Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; Acting U.S. Attorney Randy Grossman for the Southern District of California; and Special Agent in Charge Suzanne Turner of the FBI’s San Diego Field Office made the announcement.
The FBI investigated the case.
Trial Attorney Joshua Rothstein of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Nicholas Pilchak of the Southern District of California prosecuted the case.
Former Calexico City Officials Sentenced to Prison for BriberyRead the Press Release
Assistant U. S. Attorney Nicholas Pilchak (619) 546-9709
NEWS RELEASE SUMMARY – May 5, 2021
SAN DIEGO – Former Calexico City Councilman and Mayor Pro Tem David Romero, along with Bruno Suarez-Soto, a former commissioner on the city’s Economic Development and Financial Advisory Commission, were each sentenced to two years in prison today for taking bribes in exchange for “guaranteeing” a City permit for a cannabis business.
In pronouncing sentence, U.S. District Judge Cathy Ann Bencivengo observed that public officials should not “take positions of power to line their own pockets” and that the pair’s conduct “taints how we hope to believe democracy works.”
Romero and Suarez-Soto, both Calexico residents, previously pleaded guilty on June 11, 2020 to conspiracy to commit federal program bribery. Per their plea agreements, Romero and Suarez-Soto accepted $35,000 in cash bribes from an undercover FBI agent whom they believed represented investors seeking to open a cannabis dispensary in Calexico. In return, Romero and Suarez-Soto promised to “guarantee” the rapid issuance of a city permit for the dispensary, and to revoke or hinder other applicants if necessary to ensure that the bribe payer’s application was successful. Moreover, both men admitted they had taken other bribes in the past. In fact, referring to this corrupt arrangement, Suarez-Soto told an undercover agent that “This isn’t our first rodeo.”
Romero previously served as Calexico’s Mayor Pro Tem, meaning he was set to become Mayor in July 2020. Suarez-Soto was appointed to the City commission responsible for promoting business and community growth and coordinating with prospective developers to help them invest in the City of Calexico. Both men resigned their positions with the City in June 2020 as part of their plea agreements.
“Public office is a public trust,” said Acting U.S. Attorney Randy Grossman. “Anyone who violates that trust by selling the government’s business to satisfy their own greed should face a reckoning. Citizens of this district deserve no less.”
“The FBI, to include our Imperial County Resident Agency, remains committed to investigating all levels of public corruption, including those engaged in pay-to-play and bribery schemes,” said FBI Special Agent in Charge Suzanne Turner. “This case is one example of how the FBI will bring to justice those who use their positions of power to harm our communities and diminish public trust.”
According to court documents and their plea agreements, Romero and Suarez-Soto met with the undercover FBI agent three times in December 2019 and January 2020. They demanded a $35,000 bribe at their first meeting on December 19, 2019. In return, Suarez-Soto told the agent that his application would be “guaranteed” once the payment was made. He assured the undercover that he and Romero wouldn’t “disappear” after the payment, and Romero explained “I can’t [disappear]. I’m Mayor Pro Tem. In July, I’ll be Mayor. If anything, I ran based on this platform—which is cannabis.”
When the undercover agent asked whether his payment would get his application to the front of the line of other applicants, per court filings, Suarez-Soto answered, “Hell yeah,” and Romero told him he “didn’t want to say it in front of everybody, but it will.” Romero added that he could revoke permits from other applicants if he wanted, to ensure that the undercover agent’s submission would succeed. Romero did demand that the undercover agent pay the bribe up front, however, because he complained that he had “burn[ed] favors” and “pull[ed] strings” for other parties before who refused to pay after the favors were rendered.
At the second meeting, on January 9, 2020, Suarez-Soto told the undercover agent that having Romero on board would help the agent cut through the “bullshit [red] tape” at City Hall, according to court filings. When the undercover agent sought to clarify what would happen with his application, Romero told him that “the people who have to approve your license” were Romero’s “best friends at the entire City Hall.” When the undercover asked whether Romero’s “best friends” had already signed off on the plan, Romero responded “F*ck, yeah!” and laughed. When the undercover agent handed Suarez-Soto two envelopes totaling $17,500 in cash in the parking lot with Romero looking on, per court documents, he asked the men whether “we’re good.” Romero responded, “Trust me.”
Both defendants admitted in their plea agreements that they accepted a second round of cash payments totaling $17,500 in a restaurant parking lot on January 30, 2020 as part of the scheme. They also acknowledged that they accepted both payments intending to be influenced in the performance of their duties on behalf of the City of Calexico, and that the $35,000 collective bribe was not the first they had accepted as part of their scheme.
As set out in court records, both defendants were interviewed by the FBI following the second cash payment, and both were warned it was a crime to make false statements. Nevertheless, each defendant lied repeatedly to the interviewing agents, attempting to distance themselves from the corruption that had just taken place.
Acting U.S. Attorney Grossman praised Assistant U.S. Attorney Nicholas Pilchak and prosecutors Ryan Crosswell and Joshua Rothstein of DOJ’s Public Integrity Section, and FBI agents for working hard to achieve the outcome in this case.
DEFENDANTS Case Number 20cr1215-CAB
David Romero Age: 37 Residence: Calexico, CA
Bruno Suarez-Soto Age: 29 Residence: Calexico, CA
SUMMARY OF CHARGES
Conspiracy to Commit Federal Program Bribery, in violation of Title 18, United States Code, Sections
371 and 666(a)(1)(B)
Maximum Penalty: Five years in prison; $250,000 fine.
AGENCY
Federal Bureau of Investigation
Owner of Currency Exchange House Pleads Guilty to Intentionally Violating Anti-Money Laundering LawsRead the Press Release
Assistant U.S. Attorneys Daniel C. Silva and Michael A. Deshong (619) 546-9713
NEWS RELEASE SUMMARY – May 4, 2021
SAN DIEGO – Marco A. Gonzalez, a local business owner of MRK Casa de Cambio, pleaded guilty in federal court today to violating laws and regulations designed to prevent money laundering by customers of his currency exchange business.
Special Agents from Homeland Security Investigations (“HSI”) led the investigation into millions of dollars of transactions at MRK Casa de Cambio from approximately 2015 to 2020.
As admitted in the plea agreement entered today before U.S. Magistrate Judge William V. Gallo, Gonzalez knew of, and intentionally failed to adhere to, the anti-money laundering (“AML”) laws and regulations imposed on currency exchange businesses like MRK Casa de Cambio. As with any U.S. financial institution, casas de cambio, currency exchanges houses, and other “money services businesses” must comply with the United States Bank Secrecy Act, found at Title 31, United States Code and Title 31, Code of Federal Regulations, which requires these businesses to assist U.S. government agencies in detecting and preventing money laundering and other financial crimes.
Chief among the violations to which Gonzalez admitted in his plea agreement were: failing to disclose MRK Casa de Cambio’s Mexico-based offices and branches with the Secretary of the Treasury; reporting false and materially incomplete information in connection with the registration of MRK Casa de Cambio; filing false or materially misleading (if filed at all) reports of currency transactions exceeding $10,000 and reports of suspicious activity.
Acting U.S. Attorney Randy S. Grossman said, “The gatekeepers of the United States financial system must be steadfast in the fight against international money laundering. The U.S. Attorney’s Office will continue to demand the highest standards of anti-money laundering compliance by all financial institutions—whether a global financial conglomerate, or a single-office currency exchange house. I commend the diligence of the Homeland Security Investigations special agents for their commitment to prosecuting these crimes.” Grossman also praised prosecutors Daniel Silva and Michael A. Deshong for their excellent work on this case.
As a result of these intentional failures, among others, Gonzalez admitted in his plea agreement that he caused MRK Casa de Cambio to engage in cash transactions without applying adequate scrutiny to the source, purpose, ownership, or destination of the funds, or otherwise whether they were relevant to a possible violation of law or regulation. In doing so, Gonzalez acknowledged that he failed to adhere to best practices for all financial institutions; but, more specifically for a money services business like MRK Casa De Cambio, Gonzalez failed to develop and maintain an AML program that was commensurate with the risks posed by the location, size, nature, and volume of the financial services provided by his money services business.
Cardell T. Morant, Special Agent in Charge for Homeland Security Investigations, San Diego, also stated, “Communities along the Southwest border are particularly vulnerable to money laundering, and HSI is committed to protecting our communities by investigating the financial networks and third-party money launderers that facilitate introduction of the illicit proceeds into the U.S. financial system. This guilty plea, by the owner of a money service business in San Ysidro, sends a strong signal to financial institutions and especially money service businesses to remain vigilant in their anti-money laundering duties.”
Special Agent in Charge Morant further noted the assistance of local, regional, and federal partners on this investigation, including: San Diego County Sheriff’s Department, U.S. Customs and Border Protection, IRS Criminal Investigation, and Drug Enforcement Administration.
Sentencing is scheduled to occur on August 2, 2021 before U.S. District Judge Todd W. Robinson.
DEFENDANT Case Number 21-CR-1319-TWR
Marco A. Gonzalez San Diego, CA Age: 47
SUMMARY OF CHARGES*
Willful Violations of the Bank Secrecy Act – Title 31, U.S.C., Sections 5318 / 5322
Maximum penalty: Five years in prison, forfeiture, and $500,000 fine
AGENCIES
Homeland Security Investigations
*The charges and allegations contained in an indictment or information are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Sinaloa Cartel Leader ConvictedRead the Press Release
Director of Media Relations Kelly Thornton (619) 546-9726
NEWS RELEASE SUMMARY – April 30, 2021
SAN DIEGO – Sinaloa Cartel leader Ismael Zambada-Imperial, aka “Mayito Gordo,” pleaded guilty in federal court today to drug trafficking charges following his extradition to the Southern District of California in December 2019. He also agreed to forfeit $5 million in drug trafficking proceeds.
Zambada-Imperial pleaded guilty to all charges in a superseding indictment returned by a federal grand jury in San Diego on July 25, 2014. The indictment also charges his father, the alleged leader of the cartel, Ismael Zambada-Garcia, known as “El Mayo;” as well as another son of El Mayo, Ismael Zambada-Sicairos, known as “Mayito Flaco;” and Ivan Archivaldo Guzman-Salazar, known as “Chapito,” whose father Joaquín “El Chapo” Guzmán Loera was the former leader of the Sinaloa Cartel along with Mayo. Zambada-Imperial was arrested by Mexican authorities in November 2014. Zambada-Garcia, Zambada-Sicairos, and Guzman-Salazar remain fugitives.
In a proceeding today before U.S. District Judge Dana M. Sabraw, Zambada-Imperial accepted responsibility for his role as a leader within the Sinaloa Cartel, acknowledging that he organized the transportation and distribution of thousands of kilograms of controlled substances, including cocaine, heroin, and marijuana for importation from Mexico into the United States. Zambada-Imperial also admitted to directing acts of violence for the purpose of promoting the Sinaloa Cartel’s narcotics trafficking activities. A sentencing hearing is scheduled for April 29, 2022 at 2 p.m. before Judge Sabraw.
“Zambada-Imperial’s guilty plea today sends a message to other drug kingpins operating in Mexico. There is no place to hide because our law enforcement partners will find you and work tirelessly to bring you to justice in the United States,” said Acting U.S. Attorney Randy S. Grossman. “Our investigation and prosecution of other high-level Sinaloa Cartel members is continuing and is having a significant impact on the global operations of the cartel.” Grossman praised Assistant U.S. Attorney Matthew J. Sutton, DEA agents and all law enforcement partners for their excellent work on this case.
“Because of the dedication and determination of the DEA and our law enforcement partners, today we are one step closer towards dismantling the violent Sinaloa Cartel with the guilty plea of a Sinaloa Cartel leader,” said DEA Special Agent in Charge John W. Callery. “The DEA remains confident that we will capture the remaining fugitives of this investigation and bring them to justice, along with many additional members of the Sinaloa Cartel. If the public has any information on the whereabouts of these fugitives or information on the Sinaloa cartel, we urge you to contact the DEA at (858) 616-4100.”
The Southern District of California prosecution in this case is part of a multi-year investigation that, in total, has resulted in charges against over 125 people and has had a significant impact on the worldwide operations of the Sinaloa Cartel. This investigation has also offered one of the most comprehensive views to date of the inner workings of one of the world’s most prolific, violent and powerful drug cartels. Cartel members and associates were targeted in this massive investigation involving multiple countries, numerous law enforcement agencies around the United States, a number of federal districts and over 250 court-authorized wiretaps in this district alone.
This case began in late 2011 as an investigation of what was at first believed to be a small-scale drug distribution cell in National City and Chula Vista. It became evident that the drugs were being supplied by the Sinaloa Cartel, and the case evolved into a massive multi-national, multi-state probe that resulted in scores of arrests and seizures of 1,397 kilograms of methamphetamine, 2,214 kilograms of cocaine, 17.2 tons of marijuana, 95.84 kilograms of heroin, and $27,892,706 in narcotics proceeds.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) Strike Force Initiative, which provides for the establishment of permanent multi-agency task force teams that work side-by-side in the same location. This co-located model enables agents from different agencies to collaborate on intelligence-driven, multi-jurisdictional operations to disrupt and dismantle the most significant drug traffickers, money launderers, gangs, and transnational criminal organizations.
The government’s case is being prosecuted by Assistant U.S. Attorney Matthew J. Sutton.
DEFENDANT Case Number: 14CR00658-DMS
Ismael Zambada-Imperial, aka Mayito Gordo Age: 35 Culiacan, 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.
AGENCIES
Drug Enforcement Administration
Customs and Border Protection Office of Field Operations
Customs and Border Protection Office of Border Patrol
Internal Revenue Service
Homeland Security Investigations
Department of Justice, Organized Crime Drug Enforcement Task Forces
Department of Justice, Office of Enforcement Operations
Department of Justice, Office of International Affairs
United States Attorney’s Office, Northern District of Illinois
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
Tungsten Heavy Powder of San Diego Agrees to Pay $5.6 Million to Settle False Claims Act AllegationsRead the Press Release
Assistant U. S. Attorneys Joseph Purcell (619) 546-7643 and Paul Starita (619) 546-7701
NEWS RELEASE SUMMARY – April 29, 2021
SAN DIEGO – Tungsten Heavy Powder, Inc. (THP) has agreed to pay $5,641,114 to resolve allegations that it violated the False Claims Act by falsely certifying that it sourced product materials in the United States for items it manufactured under a contract with the government of Israel that was funded by the U.S. Defense Security Cooperation Agreement Agency (DSCA). THP is a San Diego-based company that manufactures and supplies tungsten products, including those used in U.S. military applications and munitions. THP provided weapons systems manufacturing articles and services to United States Department of Defense agencies and to the Government of Israel.
The United States contended that THP knowingly submitted false certifications to the United States regarding the origin and manufacture of defense articles procured by the government of Israel that were financed with United States’ grant funds paid by the Foreign Military Financing (FMF) program through the DSCA. Specifically, it is alleged that THP submitted false certifications pertaining to seven government of Israel purchase orders. With respect to these procurements, the United States alleged that THP falsely certified that tungsten that was actually sourced in China had been sourced, instead, in the United States. The United States contended that THP also falsely certified that manufacturing occurred in the United States, when in fact THP contracted with a Mexican maquiladora.
In order to promote American manufacturing, grant funds for foreign procurements are only available when the materials are sourced and manufactured in the United States by domestic companies.
“As always, we are committed to preserving the integrity of the government contracting process and to ensuring that funds fraudulently obtained are returned to the public fisc,” said Randy S. Grossman, Acting United States Attorney for the Southern District of California. Grossman praised Assistant U.S. Attorneys Paul Starita and Joseph Purcell for their excellent work on this case.
Defense Criminal Investigative Service (DCIS) Special Agent in Charge Bryan Denny, Western Field Office, stated “The DCIS is committed to working with our law enforcement partners and the Department of Justice to combat those who attempt to take advantage of the military’s procurement system. Each instance of fraud or corruption has the potential to harm the military’s mission or those who serve, and needlessly wastes taxpayer money.”
The False Claims Act allegations being resolved were originally brought in a lawsuit filed by a former employee of THP, Gregory Caputo, and Global Tungsten & Powders Corporation under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens with knowledge of fraud against the government to bring suit on behalf of the government and to share in any recovery. Mr. Caputo and Global Tungsten & Powders Corporation will receive seventeen percent of the settlement proceeds.
This case is captioned United States, ex rel. Gregory Caputo and Global Tungsten & Powders Corporation v. Tungsten Heavy Powder, Inc., d/b/a Tungsten Heavy Powder & Parts, Inc., Case No. 18-cv-2352-W (WVG). This matter was investigated by Assistant U.S. Attorneys Joseph Purcell and Paul Starita of the Affirmative Civil Enforcement Unit of the U.S. Attorney’s Office, in coordination with Special Agents of the Defense Criminal Investigative Service and U.S. Army Criminal Investigation Division Command, and personnel from the Defense Security Cooperation Agency.
Defendant
Tungsten Heavy Powder, Inc. San Diego, CA
Agencies
Defense Criminal Investigative Service
U.S. Army Criminal Investigation Division Command
Defense Security Cooperation Agency
Apple Valley Resident Sentenced to 60 days in Custody and Ordered to pay $1,200 for Smuggling PesticidesRead the Press Release
Assistant U. S. Attorney Melanie K. Pierson (619) 546-7976
NEWS RELEASE SUMMARY – April 28, 2021
SAN DIEGO – Saul Flores Banuelos of Apple Valley, California, was sentenced yesterday to 60 days in custody and ordered to pay $1,200 restitution for smuggling illegal pesticides across the border on April 21, 2020. The order of restitution was to cover the cost of disposal of the pesticides.
In pleading guilty in September of 2020, Flores Banuelos admitted that he entered the United States at the San Ysidro Port of Entry driving a GMC Yukon. After he advised the primary inspector he was not bringing anything from Mexico, inspectors found eight one-liter bottles of the Mexican pesticide Qufuran, three bottles of alcohol and four kilograms of various medications that had not been declared. According to sentencing documents, a subsequent search of Flores Banuelos’s vehicle uncovered receipts for two previous purchases approximately six months earlier of 15 bottles of Qufuran.
The pesticides imported by Flores Banuelos were labeled in Spanish and did not bear any EPA registration number, as required by law for pesticides intended for use in the United States. Pesticides with the active ingredient found in the Qufuran imported by Flores Banuelos may not be legally imported, sold, or distributed in the United States. In addition, the lawful importation of pesticides requires a Notice of Arrival to be provided to U.S. Customs pursuant to 19 CFR § 12.112. Flores Banuelos provided no such Notice of Arrival for the pesticides in question.
According to the Environmental Protection Agency, the pesticides involved were acutely toxic. Carbofuran, the active ingredient in Qufuran, is classified by EPA as Toxicity Category I, the highest toxicity category, based upon its lethal potency from absorption by ingestion, contact with skin, and inhalation. The use of these chemicals pose a danger to humans and wildlife that might come in contact with them, as well as cannabis users who ingest products treated with them. Moreover, these chemicals are known to have injured law enforcement officers engaged in the eradication of illegal marijuana cultivation sites in California.
“Illegal pesticides are extremely toxic and harmful,” said Acting U.S. Attorney Randy Grossman. “We will continue to enforce smuggling laws to protect people, animals and the environment from these harmful chemicals.” Grossman praised Assistant U.S. Attorney Melanie Pierson, DOJ trial attorney Stephen Da Ponte and agents from Homeland Security Investigations and U.S. Environmental Protection Agency, Criminal Investigation Division for their excellent work on this case.
“The pesticides involved in this case pose serious public health and environmental dangers,” said Special Agent in Charge Scot Adair of EPA’s Criminal Investigation Division in California. “The sentence in this case demonstrates that individuals who intentionally violate smuggling and environmental protection laws will be held responsible for their crimes.”
“Illegal pesticides contain very dangerous and toxic chemicals, and their use jeopardizes public safety, pollutes the environment, and puts people’s health at risk,” said Cardell T. Morant, Special Agent in Charge of Homeland Security Investigations (HSI). “These unregistered substances can be very harmful, and HSI and our partners at EPA-Criminal Investigation Division, the California Department of Toxic Substances Control, Customs and Border Protection, and the U.S. Attorney’s Office are committed to working together to stop these deadly pesticides from entering the United States.”
Flores Banuelos was ordered to begin serving his sentence on July 26, 2021.
This case is being prosecuted by Assistant U. S. Attorney Melanie K. Pierson and Department of Justice Trial Attorney Stephen Da Ponte.
DEFENDANT Case Number 20cr2179-JLS
Saul Flores Banuelos Age: 56 Apple Valley, 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
Man Charged with High Speed Flight from Border Patrol Checkpoint in an RVRead the Press Release
Assistant U. S. Attorney Timothy D. Coughlin (619) 546-6768
NEWS RELEASE SUMMARY – April 22, 2021
SAN DIEGO – Vicente Villegas of Riverside appeared in federal court today in connection with charges that he fled a U.S. Border Patrol checkpoint at high speed during a smuggling incident in which he was allegedly driving a recreational vehicle with undocumented immigrants aboard.
At today’s hearing, Villegas was ordered by U.S. Magistrate Judge Sheri Pym to remain in custody without bond on grounds that he is a flight risk and a danger to the community.
According to the complaint, in the early morning hours of December 12, 2020, Border Patrol agents observed a large group of undocumented immigrants cross the U.S.-Mexican border in an area known to agents as “Second Breaks.” The agents saw the group of about 40 people climb into the RV.
Border Patrol agents attempted to conduct a traffic stop on the RV near Old Highway 80 and Highway 94. According to the complaint, Villegas failed to yield to a Border Patrol vehicle displaying lights and sirens and accelerated to 70 miles per hour as he merged onto westbound Interstate 8. Agents on duty at the Border Patrol Checkpoint located in Pine Valley, California were notified of the ongoing pursuit and received authorization to use a spike strip to stop the RV at the Checkpoint.
As the RV approached the Checkpoint, the agent on duty deployed the spike strip, and the RV swerved from the primary traffic lanes, drove around the primary position and through the dirt parking lot. Villegas drove back onto the Interstate at the west end of the Checkpoint, effectively evading all spike positions. Pursuing agents followed the RV for two and half hours as it continued west on Interstate 8, west on State Route 52, and north on Interstate 15. At approximately, 5:19 a.m. Border Patrol agents terminated the pursuit of the RV.
Agents were later able to trace the RV to Villegas, the complaint said. The agents were able to retrieve from cell phones what are believed to be photos and videos taken by Villegas during the pursuit.
The complaint said the RV had been purchased by Villegas and another person on December 2, 2020 for $13,000. Villegas provided his California Identification Card as a form of identification for the sale. The previous RV owner observed Villegas drive the RV away from his home.
“Smugglers think nothing of putting their passengers in grave danger in order to escape law enforcement and make money,” said Acting U.S. Attorney Grossman. “We are determined to preserve public safety and achieve justice.” Grossman praised prosecutor Tim Coughlin and U.S. Border Patrol agents who tracked down this defendant through dogged investigation.
“The actions taken by the driver of the RV in this incident endangered not only the lives of the migrants being smuggled, but also the general public and our agents,” said San Diego Sector Border Patrol Chief Aaron M. Heitke, “I am proud of the dedication and persistence of our agents. This arrest is a direct result of their efforts.”
This case is being prosecuted by Assistant U. S. Attorney Timothy D. Coughlin.
DEFENDANT Case Number 21mj1273-MDD
Vicente Villegas Age: 20 Riverside, CA
SUMMARY OF CHARGES
High Speed Flight from an Immigration Checkpoint – Title 18, U.S.C., Section 758
Maximum penalty: Five years of imprisonment and $250,000 fine
AGENCY
United States Border Patrol, San Diego Sector Intelligence Unit
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Former Peckerwoods Motorcycle Club President Sentenced to 15 Years in Prison for Methamphetamine Trafficking ConspiracyRead the Press Release
Assistant U. S. Attorneys Matthew Brehm (619) 546-8983
NEWS RELEASE SUMMARY – April 19, 2021
SAN DIEGO – Steven Edwards Moncrief, a Temecula resident and former president of the Riverside chapter of the Peckerwoods Motorcycle Club, was sentenced in federal court today to 180 months in prison for participating in a conspiracy to distribute methamphetamine.
According to the government’s sentencing memorandum, Moncrief displayed symbols of hate on his clothing, motorcycle and in his home, including banners and stickers that said “Support Your Local White Boy” and “White Pride Worldwide,” and patches featuring Nazi SS Bolts - sentiments that are shared by the club.
“The trafficking of narcotics in our community to support a hateful ideology will not be tolerated,” said Acting U.S. Attorney Randy Grossman. “This conviction demonstrates that we will pursue our investigations past the foot soldiers of trafficking conspiracies to those who organize and manage the enterprises.”
Moncrief pleaded guilty in October of 2020. According to search warrants executed in this case, starting in December 2017, the FBI, working in conjunction with the San Diego County Sheriff's Department, started an operation to investigate methamphetamine distribution by multiple individuals in the San Diego area. The investigation included the use of court-authorized intercepts on cellular phones used by participants in the methamphetamine distribution conspiracy.
In his plea agreement, Moncrief admitted that, beginning in 2018, he conspired with others to distribute methamphetamine to individuals within the Southern District of California and beyond. Specifically, Moncrief obtained methamphetamine from other co-conspirators and sold it for a profit.
Moncrief admitted that he purchased 10 pounds of methamphetamine in July 2018 and that investigators thereafter located approximately 10 pounds of methamphetamine, three firearms, a large amount of U.S. currency, scales, and packaging material in a safe in the garage of his residence.
“Today’s sentence sends a message to those who choose to poison our streets through their life of crime,” said FBI Special Agent in Charge Suzanne Turner. “The San Diego FBI, along with our partners on the North County Regional Gang Task Force, are committed to keeping our communities safe, flushing out the leadership in these criminal organizations, and holding them accountable for their conspiratorial actions.”
According to the sentencing memorandum, the Peckerwoods Motorcycle Club was founded in early 2005 in East San Diego County and has chapters in California, Arizona, and Nevada. The organization of the Peckerwoods Motorcycle Club is similar to larger motorcycle clubs, including the Hells Angels MC and Mongols MC. Their structure consists of a president, vice president, sergeant at arms, secretary, treasurer, road captain, prospects, and hang-arounds.
The sentencing memorandum notes that, in response to the Hollister, California riot in 1949, the American Motorcycle Association stated that 99 percent of motorcyclists are law-abiding citizens, implying that “1%” of motorcyclists are outlaws. Some motorcycle clubs, including the Peckerwoods Motorcycle Club, wear a “1%” diamond patch to openly show their outlaw mentality. The “1%” diamond patch is only worn by dominant clubs, or by clubs that were awarded the patch from a dominant club by proving themselves as an outlaw and support club. The Peckerwoods Motorcycle Club were awarded or “blessed” with their diamond patch by the Hells Angles MC.
The sentencing memorandum states that Peckerwoods Motorcycle Club members have been convicted of multiple crimes including drug and weapons trafficking, possession of stolen property, and assault. Their current club president has pleaded guilty to a racially motivated assault that left an African-American man paralyzed. Members often display symbols of hate on their vests, or “cuts,” including Nazi SS Bolts and Swastikas.
Moncrief was one of 11 defendants charged with conspiring to distribute methamphetamine in an investigation led by the North County Regional Gang Task Force. The continuing investigation resulted in indictments against another 27 defendants in 2019 based on sales of methamphetamine and heroin. To date, 26 defendants have been arrested and pleaded guilty.
Grossman praised federal prosecutor Matthew Brehm, FBI agents and Sheriff’s detectives as well as the North County Regional Gang Task Force for their dedicated efforts in this investigation and prosecution.
On July 26, 2018, investigators executed a search warrant at Moncrief’s residence at Tanager Circle in Temecula, California, and located, among other items, approximately 10 pounds of methamphetamine, three handgun firearms (.40 Smith and Wesson, American Tactical “Fatboy,” and Ruger 9 mm), a large amount of U.S. currency, scales, and packaging material in a safe in the garage. The photographs above are a business card that was seized along with Moncrief’s drivers license during the execution of a search warrant at Moncrief’s residence. The business card, using Moncrief’s moniker “Scooter,” names him as president of the “Woodsside” Chapter and utilizes a handwritten Nazi Germany Schutzstaffel (SS) symbol (also known as SS Bolts) in place of S’s in “Woodsside.”
DEFENDANT Case Number 18cr5317-AJB
Stephen Edward Moncrief Age: 59 Temecula, CA
SUMMARY OF CHARGES
Conspiracy to Distribute Methamphetamine – Title 21, U.S.C., Sections 841(a)(1) and 846
Maximum penalty: life in prison; and a mandatory minimum 10 years in prison; and a $10 million fine.
AGENCIES
North County Regional Gang Task Force members:
FBI
San Diego County Sheriff’s Department
Escondido Police Department
Oceanside Police Department
Carlsbad Police Department
California Highway Patrol
California Department of Corrections and Rehabilitation
Homeland Security Investigations
Bureau of Alcohol, Tobacco, Firearms, and Explosives
California National Guard
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
[1] “Created by former Alabama Klan boss and long-time white supremacist Don Black in 1995, Stormfront was the first major hate site on the Internet. Claiming more than 300,000 registered members as of May 2015 (though far fewer remain active), the site has been a very popular online forum for white nationalists and other racial extremists.” See https://www.splcenter.org/fighting-hate/extremist-files/group/stormfront.
GirlsDoPorn Employee Pleads Guilty to Sex Trafficking ConspiracyRead the Press Release
NEWS RELEASE SUMMARY – April 16, 2021
SAN DIEGO – Valorie Moser, former bookkeeper for the adult website GirlsDoPorn, pleaded guilty in federal court today to conspiring with the operators of the website to fraudulently coerce young women to appear in sex videos.
Moser, who worked for GirlsDoPorn (GDP) from 2015 to 2018, pleaded guilty before U.S. Magistrate Linda Lopez to Conspiracy to Commit Sex Trafficking by Force, Fraud and Coercion. Moser, the third of six defendants to plead guilty, admitted that she served as GDP’s bookkeeper, made travel arrangements for models, provided transportation for approximately 100 models once they arrived in San Diego, and performed miscellaneous other tasks. Moser reported her accounting activities to co-defendant Matthew Wolfe, and her interactions with the models to co-defendant Michael Pratt and others.
Moser admitted she knew that GDP produced pornographic videos for publication and dissemination on the internet, and that the young women being recruited to star in these pornographic videos had been provided false assurances that the videos would not be published on the internet. For example, Moser overheard Pratt, using the alias “Mark,” telling prospective models that the video footage would only be distributed on DVDs in Australia, and that the models would remain anonymous, statements that Moser knew to be false.
Further, Pratt instructed Moser not to tell the women the truth about their video’s distribution as she drove the young women to and from the video shoots. Moser was to tell the women that she was just an Uber driver. Later, Pratt told Moser to tell the women that she was bound by a non-disclosure agreement and could not discuss it.
After the videos were posted on-line and widely available, many women contacted Moser to ask that their videos be taken down. Pratt, Wolfe and co-defendant Ruben Garcia all told Moser to block any calls from these women.
Moser also attempted to recruit potential models. Pratt gave her a list of names and numbers and showed her how to use a spoof program to conceal her actual phone number when making calls. Moser was aware that Pratt had a grading system for young women, and that she would get paid more if Pratt found the recruited women attractive. Pratt instructed Moser to tell all prospective models the same lie - that the videos would be released solely on DVD in Australia. Moser knew this to be false. Moser never actually recruited anyone and therefore never made these promises.
“This defendant was a willing participant in a scheme that has traumatized many victims,” said Acting U.S. Attorney Randy Grossman. “We will continue to seek justice for these women, and to prevent others from becoming ensnared by sex traffickers.” Grossman commended the excellent work of Assistant U.S. Attorneys Joseph Green and Alexandra F. Foster, as well as FBI agents and members of the San Diego Human Trafficking Task Force, for their continuing effort to investigate and prosecute this important case.
“Valorie Moser’s guilty plea closes yet another chapter in this deplorable crime ring,” said FBI Special Agent in Charge Suzanne Turner. “The defendant used lies and deceit to help facilitate this sex trafficking conspiracy.”
Moser is scheduled to be sentenced by U.S. District Judge Janis L. Sammartino on July 2, 2021, at 9:00 a.m. The next hearing in the ongoing case is May 7, 2021 at 2:00 p.m., also before Judge Sammartino.
Any additional victims of the alleged crime are encouraged to call the San Diego FBI at 858-320-1800.
The FBI is offering a reward of up to $10,000 for information leading to the arrest of Michael James Pratt. Individuals with information about Pratt should contact their local FBI office or the nearest American Embassy or Consulate.
For further information, please see:
- Wanted Poster: https://www.fbi.gov/wanted/additional/michael-james-pratt
- Press Release: https://www.fbi.gov/contact-us/field-offices/sandiego/news/press-releases/fbi-seeks-public-assistance-in-locating-sex-trafficking-suspectDEFENDANT Case Number 19cr4488-JLS
Valorie Moser Age: 38 San Diego, CA*
*Pleaded guilty to a Superseding Information charging Conspiracy to Commit Sex Trafficking by Force, Fraud and Coercion, in violation of 18 U.S.C. § 371.
Maximum Penalty: Five years in prison, $250,000 fine, a special assessment of $100.
CO-DEFENDANTS
Michael James Pratt Age: 36 Fugitive
Matthew Isaac Wolfe Age 37 San Diego, CA
Ruben Andre Garcia Age: 31 San Diego, CA**
** Pleaded guilty to Counts 1 and 7
Theodore Gyi Age: 42 Rancho Aliso, CA**
** Pleaded guilty to Superseding Information charging Conspiracy to Commit Sex Trafficking by Force, Fraud and Coercion, in violation of 18 U.S.C. § 371
Amberlyn Dee Nored Age: 27 San Diego, CA
SUMMARY OF CHARGES
Count 1 (charging all defendants)
Conspiracy to Commit Sex Trafficking by Force, Fraud and Coercion, 18 U.S.C. § 1594(c)
Maximum Penalty: Life in prison, $250,000 fine, and a special assessment of $5,000 under 18 U.S.C. § 3014.
Count 2 (Pratt)
Production of Child Pornography, 18 U.S.C. § 2251(a) and (e)
Minimum penalty: Fifteen years in prison; Maximum penalty: 30 years in custody, $250,000 fine, and a special assessment of $5,000 under 18 U.S.C. § 3014.Count 3 (Pratt)
Sex Trafficking of a Minor by Force, Fraud and Coercion, 18 U.S.C. § 1591(a)(1) and (2)
Minimum penalty: Fifteen years in prison; Maximum penalty: life in custody, $250,000 fine, and a special assessment of $5,000 under 18 U.S.C. § 3014.
Counts 4 (Pratt, Wolfe, Garcia), 5 (Pratt, Garcia), 6 (Pratt, Wolfe, Garcia), 7 (Pratt, Garcia, Gyi), 8 (Pratt, Garcia, Gyi)
Sex Trafficking by Force, Fraud and Coercion, 18 U.S.C. § 1591(a) and (b)(1)
Minimum penalty: Fifteen years in prison; Maximum penalty: life in custody, $250,000 fine, and a special assessment of $5,000 under 18 U.S.C. § 3014.
INVESTIGATING AGENCY
Federal Bureau of Investigation – San Diego Field Office
San Diego Human Trafficking Task Force
The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Forty-Seven Defendants Charged in Illegal Gambling and Drug IndictmentsRead the Press Release
For further information contact:
Assistant U. S. Attorneys A. Dale Blankenship (619) 546-6705,
Matthew Brehm (619) 546-8983SAN DIEGO – A federal grand jury has indicted 47 people who are allegedly associated with illegal gambling establishments that are closely tied to gangs, drugs and violence in San Diego neighborhoods.
UNSEALED SEARCH WARRANTEarly this morning, more than 450 members of the FBI Violent Crimes Task Force - Gang Group, the San Diego Police Department and many other law enforcement agencies made 35 arrests and searched 24 locations, mostly illegal gambling dens in East San Diego neighborhoods. In all, 44 firearms, more than 12 pounds of methamphetamine, $263,000 in cash, and 640 gambling machines were seized during the two-year investigation. Of the 35 people arrested, 15 are part of the indicted group, and the others were arrests for state offenses. Three of the indicted individuals were already in custody prior to the takedown.
The defendants are charged with conspiracy, operating illegal gambling businesses, maintaining drug involved premises, possession of methamphetamine with intent to distribute, distribution of methamphetamine, importation of methamphetamine, felon in possession of firearm and felon in possession of ammunition. The gambling dens continued to operate during the pandemic.
“We have taken down the illegal gambling dens, and we have lifted a weight off our neighborhoods,” said Acting U.S. Attorney Randy Grossman. “As a result of the collaboration of federal, state and local law enforcement officials, law-abiding citizens who live in these neighborhoods will be safer without these magnets for crime in their midst. I am particularly grateful to FBI Special Agent in Charge Suzanne Turner, SDPD Chief David Nisleit, and District Attorney Summer Stephan for their work on this investigation and their dedication to keeping our community safe.”
“These gambling dens were not only host to illegal gambling, but a hub for a variety of other criminal activity to include drug trafficking and unlawful possession of firearms,” said FBI Special Agent in Charge Suzanne Turner. “This serves as another example of what happens when you bring together dedicated law enforcement professionals using a comprehensive approach to detect, disrupt, and dismantle these criminal operations.”
“Numerous crimes have been linked to the illegal gambling operations,” said SDPD Chief David Nisleit. “The investigative work led by the Violent Crimes Task Force and the arrests made have created a safer environment for all of our communities.”
“This joint operation is a prime example of what can be accomplished when law enforcement works together to respond to community concerns over increased crime in their neighborhoods,” said San Diego County District Attorney Summer Stephan. “Our DA team worked tirelessly with the Violent Crimes Task Force and the U.S. Attorney’s Office assisting with critical search warrants during the course of this operation.”
Those arrested today include the owners of the businesses and employees who acted as doormen, security and bankers; those who audit the machines; and those who collect the money. Also arrested were alleged drug dealers who operated within the dens.
The indictments allege that illegal gambling dens were often located inside small businesses or inside houses, apartments, and outbuildings in residential neighborhoods predominantly in City Heights, in the East San Diego area. According to court records, it is common for gambling den owners to pay rent in cash to the owners of these properties and, in some cases, a percentage of the profits to cast a blind eye to all the foot traffic.
These establishments are equipped with electronic gambling machines which are programmed with several games of chance such as poker, blackjack, keno, jacks or better, and slot games. Most locations of these establishments are open 24 hours a day, seven days a week. The indictments allege that many of these gambling locations were taking in thousands of dollars a day.
The main draw to illegal gambling establishments is methamphetamine use and sales, according to the indictments. It’s rare to have a patron who does not use or sell methamphetamine inside these locations. The people selling drugs inside may be employees or independent drug dealers. According to court records, it is common for employees to hand out small amounts of methamphetamine and “comp” customers to keep them playing and coming back for more.
Grossman praised federal prosecutors Dale Blankenship and Matthew Brehm as well as the Deputy District Attorneys, FBI Special Agents, San Diego Police Department detectives and officers and other state, federal and local law enforcement agencies who worked so hard on this investigation.
*Denotes fugitives
DEFENDANTS
21CR1109-H INDICTMENT
Case Number 21CR1109-H
Name
Age
Hometown
LONG NGOC TRAN (1),
aka “Long Tu,”
41
San Diego
*TUNG THANH NGUYEN (2),
aka “Ang,”
51
San Diego
THANH LAN THI NGUYEN (3),
aka “Lan,”
42
San Diego
DENNIS MICHAEL DIBLASI (4),
aka “Drago,”
47
San Diego
*WAYNE JONATHAN CLAYTON Jr. (5),
aka “G-Wayne,”
50
San Diego
*YVONNE MICHELLE AGUILAR (6),
aka “Michelle,”
41
San Diego
*ROBERT JAMES WRIGHT (7),
38
San Diego
TAM ONH ONG (8),
aka “Fireball,”
43
San Diego
*SAENGAMPHAY M. PHOMMASANE (9)
aka “Melinda,”
38
San Diego
*KAREN RENE ANN PRANGSAMPHAN- PORTER (10),
aka “KK,”
31
Arizona
*JESSICA CASTILLO (11),
aka “Green Eyes,”
39
San Diego
SUMMARY OF CHARGES
Conspiracy (Title 18, U.S.C., Sec. 371 – Conspiracy)
Illegal Gambling Business (Title 18, U.S.C., Sec. 1955)
Maintaining a Drug-Involved Premises (Title 21, U.S.C., Sec. 856(a)(1))
Distribution of Methamphetamine (Title 21, U.S.C., Sec. 841(a)(1))
Maximum Penalties: For Conspiracy Charge: Five years’ imprisonment and a $250,000 fine.
Maximum Penalties: For Illegal Gambling Business Charge: Five years’ imprisonment and a $250,000 fine.
Maximum Penalties: For Maintaining Drug Involved Premises Charges: Five years’ imprisonment and a $500,000 fine.
Maximum Penalties: For Distribution of Methamphetamine Charges: Life in prison with a mandatory minimum sentence of 10 years and a $10 million fine.
Case Number 21CR1111-H
21CR1111-H INDICTMENT
Name
Age
Hometown
*TRI MINH VO, (1),
37
San Diego
TIEN HONG HONG LE (2),
aka “Mr. Le,”
58
Phoenix, AZ
DONG VAN NGUYEN (3),
43
San Diego
*DANG VAN NGUYEN (4),
53
San Diego
*MICHELLE SALVADORE EDWARDS (5),
48
San Ysidro
*KHANG DINH NGUYEN (6),
aka “K-Y,”
45
San Diego
*LEETRI DANG (7),
36
San Diego
*KE VAN TRAN (8),
aka “Kevin,”
57
San Diego
*KIARA PORSHA EASLEY (9),
28
San Diego
TO VAN LAI (10),
aka “Took,”
42
San Diego
CU VAN HUYN (11),
aka “Cucu,”
39
San Diego
*DAPHNE NICOLE RIVERA (12),
45
El Cajon
*WILLIAM VANNA BOUNSAVATH (13)
aka “Ray Ray,”
34
San Diego
*ALMA SOCORRO SILVA (14),
48
San Diego
TONY NGUYEN (15)
aka “Lucky,”
40
San Diego
SUMMARY OF CHARGES
Conspiracy (Title 18, U.S.C., Sec. 371 – Conspiracy)
Illegal Gambling Business (Title 18, U.S.C., Sec. 1955)
Maintaining a Drug-Involved Premises (Title 21, U.S.C., Sec. 856(a)(1))
Distribution of Methamphetamine (Title 21, U.S.C., Sec. 841(a)(1))
Possession with Intent to Distribute Methamphetamine (Title 21, U.S.C., Sec. 841(a)(1))
Maximum Penalties: For Conspiracy Charge: Five years’ imprisonment and a $250,000 fine.
Maximum Penalties: For Illegal Gambling Business Charge: Five years’ imprisonment and a $250,000 fine.
Maximum Penalties: For Maintaining Drug Involved Premises Charges: Five years imprisonment and a $500,000 fine.
Maximum Penalties: For Possession with Intent to Distribute and Distribution of Methamphetamine Charges: Life in prison with a mandatory minimum sentence of 10 years and a $10 million fine.
Case Number 21CR1110-H
21CR1110-H INDICTMENT
Name
Age
Hometown
*JIMMY HUI BANH (1),
43
San Diego
JOSE ANTONIO TORRESDAY (2),
aka “Pepe,”
29
San Diego
TINA SENKET (3),
33
San Diego
JIMMY LU (4),
aka “Nam Van Lu,”
aka “Nam Thao,”
54
San Diego
*ARCADIO MAMURI CRUZ (5),
aka “Bangsta,”
aka “Archie,”
36
San Diego
*MARK ANONAS ARCELAO (6),
aka “Lil Tipsy,”
28
Jacksonville, Florida
SUMMARY OF CHARGES
Conspiracy (Title 18, U.S.C., Sec. 371 – Conspiracy)
Illegal Gambling Business (Title 18, U.S.C., Sec. 1955)
Maintaining a Drug-Involved Premises (Title 21, U.S.C., Sec. 856(a)(1))
Felon in Possession of a Firearm (18, U.S.C., Secs. 922(g)(1)
and 924(a)(2))
Maximum Penalties: For Conspiracy Charge: Five years’ imprisonment and a $250,000 fine.
Maximum Penalties: For Illegal Gambling Business Charge: Five years’ imprisonment and a $250,000 fine.
Maximum Penalties: For Maintaining Drug Involved Premises Charges: Five years’ imprisonment and a $500,000 fine.
Maximum Penalties: For Felon in Possession of Firearm Charges: Ten years’ imprisonment and a $250,000 fine.
Case Number 21CR1112-H
21CR1112-H INDICTMENT
Name
Age
Hometown
*LE THI LE (1),
aka “Chi Le,”
70
San Diego
PHOUNG THANH BUI (2)
45
San Diego
SUMMARY OF CHARGES
Conspiracy (Title 18, U.S.C., Sec. 371 – Conspiracy)
Illegal Gambling Business (Title 18, U.S.C., Sec. 1955)
Maintaining a Drug-Involved Premises (Title 21, U.S.C., Sec. 856(a)(1))
Distribution of Methamphetamine (Title 21, U.S.C., Sec. 841(a)(1))
Maximum Penalties: For Conspiracy Charge: Five years’ imprisonment and a $250,000 fine.
Maximum Penalties: For Illegal Gambling Business Charge: Five years’ imprisonment and a $250,000 fine.
Maximum Penalties: For Maintaining Drug Involved Premises Charges: Five years’ imprisonment and a $500,000 fine.
Maximum Penalties: For Distribution of Methamphetamine Charges: Forty years’ imprisonment with a mandatory minimum sentence of five years and a $5 million fine.
Case Number 21CR1116-H
Name
Age
Hometown
*MARTA LIDIA GUTIERREZ
27
San Diego
SUMMARY OF CHARGES
Importation of Methamphetamine (Title 21, U.S.C., Secs. 952 & 960)
Maximum Penalties: Importation of Methamphetamine Charges: Life in prison with a mandatory minimum sentence of 10 years and a $10 million fine.
Case Number 21CR1114-H
Name
Age
Hometown
*ENRIQUE SAMUEL DUENAS,
aka “Kiki,”
28
San Diego
SUMMARY OF CHARGES
Distribution of Methamphetamine (Title 21, U.S.C., Sec. 841(a)(1))
Felon in Possession of a Firearm (18, U.S.C., Secs. 922(g)(1)
and 924(a)(2))
Importation of Methamphetamine (Title 21, U.S.C., Secs. 952 & 960)
Maximum Penalties: For Distribution of Methamphetamine Charges: Forty years’ imprisonment with a mandatory minimum sentence of five years and a $5 million fine.
Maximum Penalties: For Felon in Possession of Firearm Charges: Ten years’ imprisonment and a $250,000 fine.
Maximum Penalties: Importation of Methamphetamine Charges: life in prison with a mandatory minimum sentence of 10 years and a $10 million fine.
Case Number 21CR1124-H
Name
Age
Hometown
*CESAR ALONZO VALLADOLID,
aka “Playboy,”
36
San Diego
SUMMARY OF CHARGES
Possession with Intent to Distribute Methamphetamine (Title 21, U.S.C., Sec. 841(a)(1))
Felon in Possession of a Firearm (18, U.S.C., Secs. 922(g)(1)
and 924(a)(2))
Importation of Methamphetamine (Title 21, U.S.C., Secs. 952 & 960)
Maximum Penalties: For Possession with Intent to Distribute Methamphetamine Charges: Life in prison with a mandatory minimum sentence of 10 years and a $10 million fine.
Maximum Penalties: For Felon in Possession of Firearm Charges: Ten years’ imprisonment and a $250,000 fine.
Maximum Penalties: Importation of Methamphetamine Charges: Forty years’ imprisonment with a mandatory minimum sentence of five years and a $5 million fine.
Case Number 21CR1113-H
Name
Age
Hometown
ARTHUR MARCELINO CASTILLO
40
San Diego
SUMMARY OF CHARGES
Distribution of Methamphetamine (Title 21, U.S.C., Sec. 841(a)(1))
Maximum Penalties: For Distribution of Methamphetamine Charge: life in prison with a mandatory minimum sentence of 10 years and a $10 million fine.
Case Number 21CR1117-H
Name
Age
Hometown
*KEOUDONE INTHAVONG
47
San Diego
SUMMARY OF CHARGES
Possession with Intent to Distribute/Distribution of Methamphetamine (Title 21, U.S.C., Sec. 841(a)(1))
Maximum Penalties: For Possession with Intent to Distribute and Distribution of Methamphetamine Charges: Forty years’ imprisonment with a mandatory minimum sentence of five years and a $5 million fine.
Case Number 21CR1123-H
Name
Age
Hometown
*WILLIAM HENRY SCOVALL,
aka “Cap,”
24
San Diego
SUMMARY OF CHARGES
Felon in Possession of a Firearm (18, U.S.C., Secs. 922(g)(1)
and 924(a)(2))
Maximum Penalties: For Felon in Possession of Firearm Charge: Ten years’ imprisonment and a $250,000 fine.
Case Number 21CR1115-H
Name
Age
Hometown
*JULIUS GREENOGE
39
San Diego
SUMMARY OF CHARGES
Felon in Possession of a Firearm (18, U.S.C., Secs. 922(g)(1)
and 924(a)(2))
Maximum Penalties: For Felon in Possession of Firearm Charge: 10 years’ imprisonment and a $250,000 fine.
Case Number 21CR1119-H
Name
Age
Hometown
*PHINATH PETER KHVANN,
aka “Peanut,”
44
San Diego
SUMMARY OF CHARGES
Felon in Possession of a Firearm (18, U.S.C., Secs. 922(g)(1)
and 924(a)(2))
Maximum Penalties: For Felon in Possession of Firearm Charge: Ten years’ imprisonment and a $250,000 fine.
Case Number 21CR1118-H
Name
Age
Hometown
*PHONETHIP PETE INTHAVONG
50
San Diego
SUMMARY OF CHARGES
Possession with Intent to Distribute (Title 21, U.S.C., Sec. 841(a)(1))
Maximum Penalties: For Possession with Intent to Distribute Charge: Forty years’ imprisonment with a mandatory minimum sentence of five years and a $5 million fine.
Case Number 21CR1121-H
Name
Age
Hometown
DAVID LIBANAN OPHEIM,
aka “Casper,”
46
San Diego
SUMMARY OF CHARGES
Possession with Intent to Distribute (Title 21, U.S.C., Sec. 841(a)(1))
Maximum Penalties: For Possession with Intent to Distribute Charge: 40 years’ imprisonment with a mandatory minimum sentence of 5 years and a $5 million fine.
Case Number 21CR1120-H
Name
Age
Hometown
THANH NGUYEN,
aka “Poway,”
46
Poway
SUMMARY OF CHARGES
Felon in Possession of a Firearms and Ammunition (18, U.S.C., Secs. 922(g)(1)
and 924(a)(2))
Maximum Penalties: For Felon in Possession of Firearm and Ammunition Charges: years’ imprisonment and a $250,000 fine.
Case Number 21CR1122-H
Name
Age
Hometown
SEAN MICHAEL RIED (1)
33
San Diego
TUNG NGOC NGUYEN (2)
24
San Diego
SUMMARY OF CHARGES
Distribution of Methamphetamine (Title 21, U.S.C., Sec. 841(a)(1))
Maximum Penalties: For Distribution of Methamphetamine Charge: Forty years’ imprisonment with a mandatory minimum sentence of five years and a $5 million fine.
AGENCIES
Members on the Violent Crimes Task Force
FBI
San Diego Police Department
San Diego Sheriff’s Department
Internal Revenue Service
Homeland Security Investigations
National City Police Department
Chula Vista Police Department
Federal Bureau of Prisons
California Department of Corrections and Rehabilitation
San Diego County Probation
San Diego County District Attorney’s Office
Additional partner agencies participating in the takedown.
Drug Enforcement Administration
Bureau of Alcohol, Tobacco, Firearms and Explosives
U.S. Marshals Service
California Bureau of Gambling Control
San Diego City Attorney’s Office
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
This 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. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
Customs and Border Protection Officer Charged with Using Unreasonable Force at Calexico Port of EntryRead the Press Release
Assistant U. S. Attorney Christopher P. Tenorio (619) 546-8413
NEWS RELEASE SUMMARY – April 14, 2021
SAN DIEGO – U.S. Customs and Border Protection Officer Marcos Valenzuela is charged in an indictment unsealed today with using unreasonable force on an individual who had applied for admission to the United States from Mexico.
According to the indictment, Valenzuela encountered the individual, identified only as “J.L.,” on August 16, 2019, while Valenzuela was on duty at the Calexico West Port of Entry. During the course of the inspection, Valenzuela allegedly deprived the individual of the Constitutional right not to be subjected to unreasonable force. The indictment also alleges that Valenzuela’s actions resulted in bodily injury to the person seeking admission into the U.S.
“The protection of the civil rights of all persons entering the United States remains a high priority of the Justice Department, and our office in particular,” said Acting U.S. Attorney Grossman. “All allegations of excessive force by law enforcement officers are investigated thoroughly and carefully reviewed to ensure public confidence in our commitment to redressing violations of Constitutional rights.” Grossman praised prosecutor Chris Tenorio and agents from the FBI and U.S. Customs and Border Protection, Office of Professional Responsibility for their excellent work on this case.
“No one is above the law and this indictment should assure the public that the FBI is committed to rooting out any public servant who violates their oath – regardless of where they work,” said FBI Special Agent in Charge Suzanne Turner. “Actions such as the ones alleged in this case violate an officer’s oath, the public's trust, and damage law enforcement's reputation. I want to thank Customs and Border Protection’s Office of Professional Responsibility for their collaboration and partnership in bringing this case to fruition.”
Customs and Border Protection (CBP), Office of Professional Responsibility (OPR) Special Agent in Charge Elizabeth Cervantes stated, “All CBP employees are required and expected to abide by all laws they enforce. CBP stresses professionalism, honor, and integrity in every aspect of its mission and CBP OPR is fully committed to investigating all allegations of misconduct while supporting the men and women who proudly uphold their duties to serve and protect.”
The defendant was arraigned on the Indictment before U.S. Magistrate Judge Ruth Bermudez Montenegro. He is scheduled to appear before U.S. District Court Judge Janis L. Sammartino on May 21, 2021 at 1:30 p.m., for a motion hearing. This case is being prosecuted by Assistant U. S. Attorney Christopher P. Tenorio.
DEFENDANT Case Number 21cr1056-JLS
Marcos Valenzuela Age: 29 El Centro, CA
SUMMARY OF CHARGES
Deprivation of Rights under Color of Law – Title 18, U.S.C., Section 242
Maximum penalty: Ten years of imprisonment and $250,000 fine
AGENCIES
U.S. Customs and Border Protection, Office of Professional Responsibility
Federal Bureau of Investigation
San Diego Woman Pleads Guilty to Conspiracy to Launder Almost $600,000 from Department of Defense Bribery SchemeRead the Press Release
Assistant U. S. Attorneys Michelle L. Wasserman (619) 546-8431 and Carling Donovan (619) 546-4343
NEWS RELEASE SUMMARY – April 13, 2021
SAN DIEGO – Liberty Gutierrez pleaded guilty today to conspiring to launder the proceeds of a bribery scheme involving a former employee of the Naval Information Warfare Center in San Diego, California, and various defense contractors.
According to Gutierrez’s plea agreement, the Naval Information Warfare Center employee, identified in court documents as “Individual-1,” solicited and accepted things of value from various defense contractors, including three defense contractors identified in her plea agreement as Contractor-1, Contractor-2, and Contractor-3.
Among these gifts were jobs for friends and family, tickets to premier sporting events, and expensive dinners. Gutierrez further admitted that Individual-1 solicited jobs for Gutierrez from these contractors. Although Gutierrez was employed full-time at a real estate and mortgage company in San Diego from April 2015 to February 2021, Individual-1 nonetheless obtained “full-time” jobs for Gutierrez at Contractor-1 from approximately October 2015 to September 2018; Contractor-2 from approximately April 2017 to July 2019; and Contractor-3 from approximately October 2018 to December 2019.
As part of her plea agreement, Gutierrez admitted to doing only minimal work at each of these jobs, and then falsely billing her time as if she were working full time on a government contract. Each of the contractors then passed along Gutierrez’s fraudulent labor charges to the United States Government for payment. Gutierrez further admitted that she agreed to give Individual-1 half of her salary from Contractor-2, or approximately $2,000 every month, in cash, some of which Individual-1 stashed in his golf bag. In total, Gutierrez kicked back over $60,000 in cash to Individual-1 under this arrangement. As part of the conspiracy, Individual-1 additionally secured a job for his wife at Contractor-1 in approximately January 2017.
As alleged in the Information, in exchange for these and other gifts, Individual-1, who was certified as a Contracting Officer Representative as part of his job at Naval Information Warfare Center, used his position to steer millions of dollars of contracts to his favored contractors. For example, Individual-1 ensured that Contractor-1 was awarded a $3 million “Other Transaction Authority,” a federal procurement vehicle, at the same time he was soliciting a job for Gutierrez from Contractor-1.
Similarly, Individual-1 ensured that Contractor-2 was awarded a $300 million ceiling task order, while working with an executive vice-president at Contractor-2 to create the “job” for Gutierrez at the company. After Gutierrez was employed by Contractor-1, Contractor-2, and Contractor-3, Individual-1 continued to ensure that the companies received lucrative Department of Defense contracts and subcontracts. As further alleged in the Information, Individual-1 knew that Gutierrez’s labor charges for each of the contractors was false, but nonetheless approved invoices containing the fraudulent charges.
Gutierrez admitted that as part of the conspiracy she received $593,210.09 in salary payments from Contractor-1, Contractor-2, and Contractor-3, which were intended to promote the bribery scheme and conceal and disguise the nature, source, and ownership of the proceeds of the bribery.
“Bribery and public corruption have no place in government contracting, and will be aggressively investigated and prosecuted,” said Acting United States Attorney Randy S. Grossman. Grossman praised federal prosecutors Michelle Wasserman and Carling Donovan, as well as agents and investigators from Defense Criminal Investigative Service, Naval Criminal Investigative Service, Small Business Administration – Office of Inspector General, Internal Revenue Service Criminal Investigation, Department of Health and Human Services – Office of Inspector General, Naval Audit Service and Defense Contract Audit Agency for their outstanding work on this case.
Defense Criminal Investigative Service (DCIS) Special Agent in Charge Bryan Denny, Western Field Office, stated “This case offers an especially egregious example of corruption and the abuse of a position of public trust. The DCIS is committed to working with our law enforcement partners and the Department of Justice to ensure that all such crimes are discovered and fully prosecuted.”
“This should serve as a warning that those who seek to defraud the Department of the Navy will always be uncovered and brought to justice,” said NCIS Economic Crimes Field Office Special Agent in Charge Eric Maddox. “Ms. Gutierrez’s deliberate actions to perpetuate this scheme by accepting hundreds of thousands of dollars meant to support Department of Defense contracts wasted American taxpayer money, damaged the integrity of the procurement process, and squandered valuable investigative resources that could have been directed elsewhere. NCIS and our investigative partners remain committed to rooting out fraud that threatens the readiness of the warfighter.”
“Conspiring to fraudulently use government programs for personal gain will not be tolerated,” said SBA OIG’s Western Region Special Agent in Charge Weston King. “OIG will aggressively root out fraud to protect the integrity of these programs. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and commitment to seeing justice served.”
Derrick Franklin, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General, Office of Investigations, Special Investigations Branch, stated, “We will continue to support our law enforcement partners in this investigation to preserve the integrity of government contracts.”
“Ms. Gutierrez and her co-conspirators exploited illegal avenues to benefit themselves with taxpayer dollars meant for military programs,” said IRS Criminal Investigation, Special Agent in Charge Ryan L. Korner. “They cheated honest, hardworking contractors out of jobs with their corruption. Our special agents will use their financial expertise to trace the proceeds of bribery back to these criminals, and we are proud to work alongside our law enforcement partners in that effort.”
If you have information regarding fraud, waste, or abuse relating to Department of Defense personnel or operations, please contact the DoD Hotline at 800-424-9098.
DEFENDANT Case Number
Liberty Gutierrez Age: 61 San Diego, CA
SUMMARY OF CHARGES
Conspiracy to Commit Money Laundering – Title 18, U.S.C., Section 1956(h)
Maximum penalty: Twenty years in prison and $500,000 fine or twice the value of the property involved in the transaction, whichever is greater
AGENCY
Defense Criminal Investigative Service
Naval Criminal Investigative Service
Small Business Administration – Office of Inspector General
Internal Revenue Service Criminal Investigation
Department of Health and Human Services – Office of Inspector General
Naval Audit Service
Defense Contract Audit Agency
San Diego Chiropractor Sentenced to Three Years in Prison for Multi-million Dollar Workers’ Compensation, Medicare, and TRICARE SchemesRead the Press Release
Assistant U. S. Attorney Valerie H. Chu (619) 546-6750
NEWS RELEASE SUMMARY – April 13, 2021
SAN DIEGO - Irvine resident Joserodel Zavala Candelario was sentenced in federal court yesterday to 36 months in federal custody for his participation in two huge health care fraud schemes, and for concealing income he received from those multi-million dollar schemes.
According to court documents, Candelario was a chiropractor licensed by the State of California Board of Chiropractic Examiners. He was the owner of Candelario Chiropractic, a Professional Corporation, and R.I.S.E. Medical Center, a Professional Corporation, dba R.I.S.E. Wellness Center ("RISE Wellness"), which operated at multiple locations in the Southern District of California, including at 5030 Bonita Road, Suite B, in Bonita and at 3231 Waring Road, Suite N, in Oceanside.
On January 21, 2020, the defendant pleaded guilty to a three-count superseding information, charging Conspiracy in violation of 18 U.S.C. § 371, Conspiracy to Commit Health Care Fraud in violation of 18 U.S.C. § 1349, and False Statement on Tax Return in violation of 26 U.S.C. § 7206(1). Separately, the defendant has been charged and has pleaded guilty in San Diego Superior Court case SCD281328 to Concealing an Event Affecting an Insurance Claim, in a violation of California Penal Code 550(b)(3).
The government’s sentencing papers reflect that, between approximately 2012 and July 2016, Candelario carried out a scheme to defraud Medicare and TRICARE out of millions of dollars by using physical therapy codes to bill for supposed physical therapy services performed on patients by individuals who were not licensed to provide physical therapy, including chiropractors, massage therapists, physical therapy aides, and an acupuncturist. As a result, patients who thought they were receiving medical treatment were instead receiving substandard care, all so Candelario could bill Medicare and TRICARE.
Candelario and his co-conspirators told patients that RISE Wellness offered an “integrated” approach to wellness, to convince patients to accept physical therapy, acupuncture, chiropractic, and diagnostic services at RISE Wellness, in order to fraudulently bill for non-covered services provided by unauthorized individuals, and collect as much money as possible from health care benefit programs.
Candelario specifically targeted TRICARE beneficiaries as patients, despite knowing that TRICARE did not cover many of the services rendered by providers at RISE Wellness. The main page for RISE Wellness’s website made this goal plain. It featured a photograph of an individual in a military uniform, saluting, with the message, “Supporting spinal health . . . You’ve only got one spine. Take great care of it with supportive chiropractic care,” even though TRICARE, the DoD health care program for uniformed service members, did not cover chiropractic treatment.
Once patients came in the door, the defendant pushed his staff to conduct diagnostic tests on every patient, regardless of medical necessity, to increase billing and payment, and he also demanded that staff meet quotas for the minimum number of diagnostic tests, and recommendations for durable medical equipment, or DME, massages and other services, regardless of whether specific patients needed the items and services. He also imposed quotas for the minimum number of patients with specific types of insurance coverage at RISE Wellness, e.g., “60 Tricare patients per day,” regardless of whether those patients needed treatments.
For example, on June 6, 2014, Candelario instructed a staff member, “I need you to do 5 axonii [diagnostic tests] a day no matter what for now on.” The following month, on July 7, 2014, Candelario texted, “OK team you are receiving 2 new diagnostic testing devices this month. I need 20 patients to be tested on each one this month no matter What [sic].”
Defendant then, knowing that TRICARE and Medicare did not pay for chiropractic, acupuncture, massages, and other services, mischaracterized those services as physical therapy in bills submitted to TRICARE and Medicare.
To increase billing and payment, the defendant pushed the schedulers to cram in as many as 50 patients per day for each provider. He complained when staff fell short of this goal, noting, on June 11, 2015, certain “front desk issues” including: “No[one] has called any patients to fill empty slots in provider schedules or grab patients in lobbies to put into provider schedules.”
Candelario fired or marginalized staff who disagreed with his efforts to prescribe, recommend, provide, or bill in a manner primarily intended to increase the billing and payment to RISE Wellness, and contrary to Medicare and Tricare rules and the medical need of the patients. On October 1, 2015, Candelario instructed that the chiropractors were “not allowed to treat” patients unless they first prescribed X-rays and three other diagnostic tests, plus DME. Eventually, on October 19, 2015, Candelario informed a co-conspirator, “I am finding it very difficult what needs we have [to retain the PA] moving forward.” About a week later, the PA was fired.
If a patient failed to show up for an appointment, Candelario directed staff to bill the health care benefit program for the visit, even though no visit had occurred and no service had been provided. For example, on March 9, 2015, Candelario wrote, about late reimbursements, that “the only solution is to start billing the missed appointments like i asked following the system.”
It was part of the scheme that, using the mean and manners described above, and others, the co-conspirators submitted and caused to be submitted at least $7,260,327.20 in false and fraudulent bills to TRICARE and Medicare. Of those fraudulent bills, TRICARE paid a total of $3,450,596.43 and Medicare paid $37,843.04.
In addition, between March 2012 and November 2015, Candelario carried on an unlawful cross-referral scheme, in which he would receive new Workers’ Compensation (“WC”) patients for RISE Wellness. In return for new patients, Candelario agreed to meet a quota for the “value” of ancillary services and DME he was expected to prescribe for each patient sent to him by co-conspirators, with a “value” -- such as $30-$50 per MRI referral -- set by those conspirators. As part of the scheme, Candelario, who could function as a WC primary care provider, dictated the same treatment plan for all WC patients, regardless of their individual medical needs, so he could fraudulently bill WC insurers. The defendant admitted that he violated his duty of honest services to his patients. He received approximately 529 new WC patients as a result of the scheme, and he submitted approximately $6,605,364 in bills to insurers for services rendered to those patients. Of those billed amounts, he was paid $771,000 by WC insurers
In addition to fleecing taxpayer-funded government programs out of millions of dollars, Candelario failed to pay his fair share of taxes on the funds he fraudulently took, resulting in $505,000 in tax losses just for tax year 2013.
Judge Bashant credited the rehabilitative efforts the defendant has made since his conviction to improve his circumstances. Statements in sentencing papers and in court reflect that the defendant has been teaching as an adjunct instructor at West Coast University, Canyon College, Santa Ana College, Orange Coast College, and National University, in such topics as human anatomy, human physiology, biology, Medical Ethics and Medical Billing. But in aggravation, the Court noted that Candelario “put profits over the medical needs of patients,” which warranted punishment.
“With so many health care systems and personnel strained due to the pandemic, we cannot afford the financial and physical costs of fraud,” Acting U.S. Attorney Randy Grossman noted. “Doctors are especially culpable as they are violating the sacred trust they should have with their patients. We are working hard every day to protect patients, taxpayers and ratepayers who are being exploited by those members of the medical community who prefer purchasing power over principle.” Mr. Grossman commended the work of AUSAs Valerie H. Chu and Michelle Wasserman, forensic auditor Robbin Ganicliffe, and paralegal Joan Carter, and the case agents from the FBI, DCIS, and IRS-CI.
“With this sentence, the defendant has now been held accountable for the years of lies and deceit in defrauding our healthcare system,” said FBI Special Agent in Charge Suzanne Turner. “Let this sentence serve as a warning to those who intentionally try to line their pockets through fraud schemes rather than provide the honest service and care people deserve.”
The defendant requested a delay of the self-surrender date until after grades are due to be submitted for the current school term he is teaching. The defendant is scheduled to self surrender on or before July 14 at noon. A hearing to address forfeiture and restitution will be held on May 19 at 2 p.m. The United States is seeking restitution of $3,450,596.43 to TRICARE, $37,843.04 to Medicare, and a personal money judgment of $1,300,899.63.
DEFENDANT Case Number 18CR3057-BAS, 18CR3058-BAS
Joserodel Zavala Candelario Age: 48 Irvine, CA
SUMMARY OF CHARGES
Conspiracy – Title 18, U.S.C., Section 371
Maximum penalty: 5 years’ imprisonment and $250,000 fine
Conspiracy to Commit Health Care Fraud – Title 18, U.S.C., Section 1349
Maximum penalty: Ten years’ imprisonment and $250,000 fine
Subscribing to a False Tax Return - 26 U.S.C. §7203(1)
Maximum penalty: Three years’ imprisonment and $100,000 fine
AGENCIES
Federal Bureau of Investigation
Defense Criminal Investigative Service
Internal Revenue Service – Criminal Investigations
California Department of Insurance
Online Vendor Pleads Guilty to $5 Million Postage Fraud SchemeRead the Press Release
Assistant U.S. Attorney Daniel C. Silva (619) 546-9713
NEWS RELEASE SUMMARY – April 13, 2021
SAN DIEGO – Cuong H. Nguyen pleaded guilty in federal court today to conspiring 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 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, and funded by the Treasury Executive Office of Asset Forfeiture) led the investigation.
As admitted in the plea agreement entered today before U.S. Magistrate Judge Allison H. Goddard, 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. 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.
As stated in his plea agreement, Cuong admitted that he misrepresented information appearing on postage labels attached to packages in several ways—including misstating the weight, size, destination, and origin of the packages—that were intended to, and in fact did deceive, the USPS as to the underpayment of postage. Accordingly, 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 anyway.
“Those who defraud the Postal Service are effectively stealing from the U.S. Treasury and the nation’s taxpayers,” said Acting U.S. Attorney Randy S. Grossman. “We are committed to vigorously investigating and prosecuting these profiteers.” U.S. Attorney Grossman commended Assistant U.S. Attorney Danny Silva and the U.S. Postal Inspection Service and IRS-Criminal Investigation agents who unraveled this complex, digital crime.
As a result of the conspiracy, Nguyen acknowledged that the underpayment of postage to the USPS was approximately $5,127,712.88, resulting in net profits to Nguyen, his businesses, and others of $862,374.00.
“Postal Inspectors protect the U.S. mail from criminal misuse in a variety of ways, including efforts to root out postage fraud,” stated Inspector in Charge Melisa Llosa of the U.S. Postal Inspection Service Los Angeles Division. “Scammers who selfishly deprive the USPS of revenue place an undue strain on America’s most trusted service. I would like to thank our law enforcement partners, the U.S. Attorney’s Office for the Southern District of California, IRS Criminal Investigation, and the Financial Investigations and Border Crimes Task Force for their assistance in a successful resolution.”
“IRS Criminal Investigation is proud to have worked alongside our law enforcement partners at the USPIS Inspection Service and the FIBC to crack this complex web of digital crime and theft,” said IRS-CI L.A. Field Office Special Agent in Charge Ryan L. Korner. “No matter the venue, stealing money from the U.S. government is stealing money from American taxpayers. Our talented team of special agents and professional staff will continue to work tirelessly to overcome all challenges, including the current pandemic, to ensure that financial crimes will never pay.”
Sentencing is scheduled to occur on July 12, 2021 at 9 a.m. As part of his agreement to plead guilty, Nguyen agreed to forfeit $862,374.00 to the United States, as profits, proceeds, and property obtained directly or indirectly, as the result of the postage fraud 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
*The charges and allegations contained in an indictment or information are merely accusations, and the defendants are considered innocent unless and until proven guilty.