Southern District of California
Press releases recorded for this federal judicial district.
Campaign Consultant Ravneet Singh Re-Sentenced for Conspiring with Mexican Billionaire to Buy the San Diego MayorRead the Press Release
Assistant U.S. Attorney Mark W. Pletcher (619) 546-9714
NEWS RELEASE SUMMARY – November 9, 2020
SAN DIEGO – Self-christened campaign guru Ravneet (“Ravi”) Singh was re-sentenced in federal court today to one year in prison for conspiring with Mexican billionaire Susumo Azano to make almost $600,000 in illegal political contributions to candidates Bonnie Dumanis and Bob Filner in the 2012 San Diego mayoral campaign in an effort to buy “a friend in the Mayor’s office.”
U.S. District Judge Michael M. Anello also ordered Singh to pay a $10,000 fine. Singh’s re-sentencing brings to a successful end this long-running investigation into corruption in local San Diego politics.
“Today’s sentence once again stands testament to the resolve of the FBI, the IRS, and the U.S. Attorney’s Office to safeguard San Diego politics against those who attempt to illegally undermine the fundamental principles of American democracy,” said Executive U.S. Attorney Linda Frakes. “Today, more than ever, the integrity of our election system matters and attempts to illegally manipulate it will be punished.”
“Public corruption and campaign finance fraud undermines the strength and confidence in our system of government which is why these cases have always been a top criminal priority for the FBI,” said Special Agent in Charge Suzanne Turner. “The American people can count on the FBI to continue to expose those, like Azano and Singh, who attempt to illegally influence American political processes and bring them to justice.”
In September 2016, after six weeks of trial and five days of deliberations, a federal jury in San Diego returned guilty verdicts against Azano and Singh as well as Azano’s son, Edward Susumo Azano Hester.
According to evidence presented at trial, Azano, Singh, and others conspired to inject hundreds of thousands of dollars in cash and in-kind consulting services to the Dumanis and Filner campaigns, despite the fact that Azano’s foreign national status made such contributions illegal. To conceal his connection to these contributions, Azano arranged with Singh, his son Edward Hester, and others to funnel this illegal foreign money through corporate and third person “straw donor” contributions.
In return for his money, Azano sought to buy political influence and support for his vision: “Miami West” – a San Diego waterfront development project with a yacht marina, a branded five-star hotel and luxury bayside condominiums, a development project that promised Azano hundreds of millions in profit. Azano also demanded access, like the ability to summon influential political figures to his home on a moment’s notice or to obtain letters of reference to secure his son’s admission to the University of San Diego.
According to testimony at trial, Azano’s illegal money harnessed by Singh in an effective Internet fusillade made the difference in electing Bob Filner as Mayor. Within weeks after the election, with the Mayor squarely in his pocket, Azano met in London with renowned, Middle East-based master developers to refine his plans for “Miami West.” A month after the election, Azano invited the developers to fly halfway around the globe to meet with him and Mayor Filner about the Miami West project, and just four days after Filner’s inauguration, that meeting occurred, catered by Nobu, at Azano’s Coronado Cays mansion.
Filner resigned six months later amid allegations of sexual misconduct.
Azano and Singh were initially sentenced in 2017 to incarceration periods of 36 months and 15 months. After multiple lengthy appeals to the Ninth Circuit Court of Appeals and a petition for review at the Supreme Court, which invalidated their convictions on one of the 36 counts charged in the indictment, Judge Anello re-sentenced Azano in 2019 to the same sentence of 36-months in prison. Today, Judge Anello sentenced Singh to a 12-month sentence. Singh was ordered to report to prison on January 11, 2021.
In addition to Azano, Singh, and Hester, local car dealer Marc Chase, his company South Beach Acquisitions, consultant Marco Polo Cortes, and former police detective Ernesto Encinas were also convicted of various campaign fraud-related offenses as part of this long-running investigation.
Executive U.S. Attorney Linda Frakes specially commended all the law enforcement agents and agencies who rigorously pursued this matter since its inception through its conclusion.
DEFENDANT Case Number: 14CR0388-MMA
Ravneet Singh Age: 48 Coral Springs, FLA
SUMMARY OF CONVICTIONS
Count 1: Conspiracy to Commit Offenses Against the United States – Title 18, U.S.C., Sec. 371.
Maximum Penalties: Up to five years in prison and $250,000 fine
Count 3: Donation and Contribution by a Foreign National Aggregating $25,000 or more – Title 2, U.S.C., Secs. 437g (d) (1) (A) (i) and 441e (A) (1).
Maximum Penalties: Up to five years in prison and $250,000 fine
Counts 32: Falsification of Records – Title 18, U.S.C., Sec. 1519.
Maximum Penalties: Up to 20 years in prison per count and $250,000 fine per count.
AGENCIES
Federal Bureau of Investigation
Internal Revenue Service, Criminal Investigation
San Diego Police Department
Operators of California Charity Scam Sentenced to Prison for Mail Fraud Conspiracy and Tax EvasionRead the Press Release
Geraldine Hill and Clayton Hill, a California couple who operated a charity that purported to provide goods to the needy, were sentenced to prison for conspiracy to commit mail fraud and tax evasion. Geraldine Hill was sentenced to 15 months in in prison, and Clayton Hill was sentenced to 9 months in prison, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Robert S. Brewer, Jr. for the Southern District of California.
According to court documents and statements made in court, the Hills operated On Your Feet (OYF), also known as the Family Resource Center, a tax-exempt charitable organization whose stated mission was to provide assistance to low income families and individuals in need. From 2011 through 2016, the Hills fraudulently obtained more than $1.35 million in donated clothing and other items for OYF by falsely representing to the donors that the items would be given to needy recipients. In fact, the Hills caused OYF to make only about $13,000 in charitable donations, and then sold the remaining donated items, and used the proceeds to support themselves and their family members. Between January 2011 and February 2017, the Hills spent nearly $380,000 from their personal and charity bank accounts on personal expenses including some luxury retail purchases, vacations, entertainment, and vehicles. To conceal their conduct from the IRS, the Hills filed false charitable tax returns for OYF, and did not pay taxes or file personal tax returns for 2013 and 2014.
“The defendants defrauded the IRS and companies that donated goods in an effort to alleviate poverty and suffering among the least fortunate,” said Principal Deputy Assistant Attorney General Zuckerman. “The Tax Division is committed to investigating and prosecuting those individuals who seek to use the cover of a charity to illegally line their own pockets.”
“Geraldine and Clayton Hill lied to unsuspecting donors about the direction of charitable contributions and engaged in tax fraud to cover their trail,” said Jim Lee, Chief of IRS Criminal Investigation. “Unfortunately, the donors were well-meaning organizations interested in helping the needy and this fraud prevented real people in need from receiving assistance. IRS Criminal Investigation works tirelessly to ensure that criminals like the Hills are brought to justice. In cases like these, not only do the needy of our communities suffer, but also taxpayers and the U.S. government.”
On June 9, 2020, the Hills pleaded guilty to conspiracy to commit mail fraud and tax evasion.
In addition to the terms of imprisonment, U.S. District Judge Dana M. Sabraw ordered the Hills to serve three years of supervised release, and to pay $50,933 in restitution to the United States for their tax evasion. A hearing to address victim restitution for the mail fraud will take place at later date.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Brewer commended special agents of the IRS-Criminal Investigation Division and the FBI, who conducted the investigation, and Trial Attorney Valerie Preiss of the Tax Division and Assistant U.S. Attorney Rebecca Kanter, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Charity Founders Sentenced to Prison for Using Non-Profit to Steal from Donors and Cheat on Their TaxesRead the Press Release
Assistant U.S. Attorney Rebecca S. Kanter (619) 546-7304
NEWS RELEASE SUMMARY – November 6, 2020
SAN DIEGO – A Bonita husband and wife were sentenced in federal court today to 9 months and 15 months, respectively, in prison for using their charity to obtain donations from various companies – supposedly to give to the needy - and then selling those donations for a profit and failing to pay taxes on the profits.
According to plea agreements, Geraldine and Clayton Hill admitted they used lies and false promises to induce prominent companies to donate valuable goods to the Hills’ 501(c)(3) tax-exempt non-profit organization, known as On Your Feet, Inc., also known as Family Resource Center. Instead of using all the clothing and other donations to help the down-on-their luck get back on their feet, as their charity’s name suggested, or to provide resources for families, the Hills brazenly sold many donated goods for cash to be resold at discount outlets, and pocketed the proceeds. By preying on the generosity of others, they managed to get valuable goods at no cost and tax-free, which they resold for their personal benefit. What is more, the Hills used the tax-exempt charity as their personal bank account and evaded their own tax obligations, cheating the IRS by failing to pay over $50,000 in taxes on over a million dollars in ill-gotten gains from their fraud.
According to court documents, On Your Feet, Inc. claimed to “provid[e] assistance to low-income families and individuals in need to better their living conditions and quality of life.” Beginning at least as early as March 2009, however, the Hills conspired to fraudulently obtain charitable donations of clothing and other items from multiple companies by falsely promising and certifying that they would not to sell the merchandise for profit. The Hills violated those promises, knowingly reselling donated merchandise and using the proceeds from selling donated items to financially support themselves, their family members and other associates.
The Hills tricked multiple companies, including Forever 21, Feed the Children, Brooks Sports and Goods360, into donating millions of dollars of goods to their so-called charity. For example, in soliciting donations from Forever 21, the Hills falsely claimed in their marketing materials that “[t]he merchandise is never sold by On Your Feet Incorporated and any merchandise impossible to sell is disposed of.” In an email on May 20, 2015, to Forever 21, Geraldine Hill explained that the “routine for processing donated items” included “cutting [the] inside label in half” and “defacing [the] inside label with permanent marker,” and falsely insisted that “we’ve never had a problem with any donations we have received that companies have been so kind to donate.” In fact, Geraldine Hill knew at the time she sent that email to Forever 21 that her statement was a lie, because at least three years earlier, she had learned that Disney no longer wanted its donations to go to On Your Feet because the donated goods were appearing at local flea markets for sale.
In reliance on Ms. Hill’s false promises that the goods would not be re-sold, in June 2015, Forever 21 donated to On Your Feet approximately 161 pallets of clothing, which Forever 21 estimated had a retail value of $5.6 million. Immediately upon receiving the pallets from Forever 21, the Hills sold the donated goods to an operator of for-profit discount retailers. In September 2016, the Hills solicited additional donations from Forever 21 by promising to use them for a “Christmas Giveaway,” and in response, in October Forever 21 donated another 16 pallets of clothing with a retail value of $314,371. Once again, immediately upon receiving the pallets from Forever 21, the Hills sold donated goods to the same for-profit discount retailer. Based on the Hills’ series of false representations, Feed the Children and Forever 21 – just two of the Hills’ multiple victims – donated over $16 million in goods between 2010 and 2017.
With their repeated lies, between 2011 and 2016, the Hills personally received proceeds from the fraud totaling over $1.3 million. They spent the money on personal expenses including luxury retail purchases, vacations, entertainment, vehicles (including a $124,000 Mercedes), rent on a seven-bedroom, seven-bathroom home, and donations to their church. In their plea agreements, they admitted that they paid no taxes on their illegal gains.
The Hills further exploited their non-profit organization to cheat in other ways. For example, they falsified pay stubs claiming that defendant Clayton Hill earned a salary of over $100,000 from On Your Feet (even though the organization had never issued paystubs or W2s to Hill, and Hill was not claiming income in any tax filing). Armed with the phony pay stubs to demonstrate their income, the Hills applied to rent a seven-bedroom, seven-bathroom home that cost $6,000 per month.
In order to conceal their true income from the IRS and obstruct the IRS’s ability to monitor the charity’s tax-exempt status, the Hills filed false charitable tax returns. The charity’s tax returns falsely claimed that On Your Feet received less than $25,000 in gross receipts in tax year 2009, and less than $50,000 in tax years 2011-2015. In reality, the organization had received millions of dollars in valuable in-kind donations, and hundreds of thousands of proceeds from the unauthorized sale of those donations. By hiding the non-profit’s income, the Hills were able to hide their own income. As a result of the Hills’ fraudulent concealment of their income, they avoided paying $50,933 in tax years 2013 and 2014.
In addition to their prison sentences, the Hills were ordered to pay $50,933 in restitution to the IRS; a further restitution hearing related to the donor victims is scheduled for December 11, 2020.
“Geraldine and Clayton Hill abused the generosity of charitable donors and used their non-profit charity organization as their personal bank account,” said U.S. Attorney Robert Brewer “Although all tax evasion is serious, the conduct by the Hills is particularly offensive because they have undermined the faith of donors in charitable giving.” Brewer commended Assistant U.S. Attorney Rebecca Kanter and Trial Attorney Valerie Preiss of the Justice Department’s Tax Division, as well as agents from the IRS and FBI for their excellent work on this case.
“The Hills’ fraudulent scheme undermined legitimate charities with true intent to benefit low income families in order to satisfy their personal greed and an indulgent lifestyle,” said Suzanne Turner, Special Agent in Charge of FBI San Diego. “The FBI is hopeful that this sentence will send a message to anyone who would try to take advantage of the generosity of donors intending to help those in need.”
“Geraldine and Clayton Hill lied to unsuspecting donors about the direction of charitable contributions and engaged in tax fraud to cover their trail,” said Jim Lee, Chief of IRS Criminal Investigation. “Unfortunately, the donors were well-meaning organizations interested in helping the needy and this fraud prevented real people in need from receiving assistance. IRS Criminal Investigation works tirelessly to ensure that criminals like the Hills are brought to justice. In cases like these, not only do the needy of our communities suffer, but also taxpayers and the United States government.”
This case was prosecuted by Assistant U.S. Attorney Rebecca Kanter and Special Assistant U.S. Attorney Valerie Preiss.
DEFENDANTS Case Number 20CR0783-DMS
Geraldine Hill Age: 60 Bonita, CA
Clayton Hill Age: 59 Bonita, CA
SUMMARY OF CHARGES
Conspiracy to Commit Mail Fraud – Title 18, U.S.C., Section 371
Maximum penalty: Five years in prison and $250,000 fine
Tax Evasion – Title 26, U.S.C., Section 7201
Maximum penalty: Five years in prison and $250,000 fine
AGENCIES
Internal Revenue Service Criminal Investigations
Federal Bureau of Investigation
Pesticide Smuggler Convicted by Federal JuryRead the Press Release
Assistant U. S. Attorneys Melanie K. Pierson (619) 546-7976
NEWS RELEASE SUMMARY –November 5, 2020
SAN DIEGO – A federal jury has found Veronica Perez of Hemet, California, guilty of smuggling an unregistered Mexican pesticide into the United States.
After a three-day trial, the jury found that Perez concealed twenty containers of Fosfuro de Zinc (zinc phosphide) in her purse, and failed to declare them at the border when she attempted to cross into the United States from Mexico on July 11, 2019. The jury returned its verdict late yesterday.
According to the EPA, zinc phosphide is an extremely toxic rodenticide, and the ingestion of small amounts can cause death in animals and humans. In fact, consumption of a single bait zinc phosphide pellet can be lethal to a small bird or mammal. Ingestion of seven drops to one teaspoon of zinc phosphide would likely kill a 150-pound person. After it is ingested, the zinc phosphide reacts with acid in the stomach, producing phosphine gas, which blocks cells from making energy, killing the cells. Phosphine gas can also be produced in the stomach if zinc phosphide dust is inhaled and swallowed after clearing from the lungs. Phosphine gas is extremely toxic and damages the heart, brain, kidney, and liver.
“There’s a reason these toxic chemicals are restricted in the United States,” said U.S. Attorney Robert Brewer. “This verdict serves as a warning that violators will be prosecuted as part of our best effort to protect people and the environment from deadly pesticides.” Brewer commended prosecutors Melanie Pierson and Steve DaPonte, and federal agents with Homeland Security Investigations and the U.S. Environmental Protection Agency, Criminal Investigations Division, for their excellent work to achieve justice in this matter.
“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-CID, CBP, and the U.S. Attorney’s Office are committed to working together to stop these deadly pesticides from entering the United States.”
“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 verdict in this case demonstrates that individuals who intentionally violate smuggling and environmental protection laws will be held responsible for their crimes.”
This case was prosecuted by Assistant U.S. Attorney Melanie Pierson from the Southern District of California and Special Assistant U.S. Attorney Steve DaPonte of the Department of Justice Environmental Crimes Section.
DEFENDANT Case Number 20cr869-DMS
Veronica Perez Age: 40 Hemet, CA
SUMMARY OF CHARGES
Smuggling – Title 18, U.S.C., Section 545
Maximum penalty: Twenty years in prison and $500,000 fine
AGENCY
Homeland Security Investigations
U.S. Environmental Protection Agency, Criminal Investigations Division
U.S. Attorney Robert Brewer Announces DOJ Grant to Combat Violent Crime in San DiegoRead the Press Release
Assistant U. S. Attorney Cindy Cipriani (619) 546-9608
NEWS RELEASE SUMMARY – November 3, 2020
SAN DIEGO – U.S. Attorney Robert S. Brewer today announced that Social Advocates for Youth, San Diego Inc. (“SAY”) has received a $488,495 Department of Justice grant to fight and prevent violent crime in the Southern District of California. The grant, awarded by the Department’s Office of Justice Programs, is part of more than $458 million in funding to support state, local and tribal law enforcement efforts to combat violent crime in jurisdictions across the United States.
“One of the fundamental missions of government is to protect its citizens and safeguard the rule of law,” said Attorney General William P. Barr. “The Department of Justice will continue to meet this critical responsibility by doing everything within its power to help our state, local and tribal law enforcement and criminal justice partners fight crime and deliver justice on behalf of all Americans.”
“This grant to SAY will support comprehensive intervention strategies (including mentoring, restorative circles and emotional literacy education), that both dissuade youth from joining gangs and help them escape if they are already entrenched in the lifestyle,” said U.S. Attorney Brewer. “It is programs like this that can pull kids from the clutches of gangs and put them on a path to a better life.”
With this money, Social Advocates for Youth will implement project REJUVENATE, a comprehensive intervention program to reduce violence and gang involvement among youth living in opportunity zones in San Diego. This program will employ prevention and intervention strategies that address individual, family, and community factors that contribute to gang activities. In partnership with Project Aware and Union of Pan Asian Communities, SAY will serve 192 high-risk youth and reach 3,000 youth ages 12–17. The program will seek to reduce gang involvement by 80 percent for participants by providing work experience, life skills, and counseling. SAY will increase rates of participants in alcohol and drug education, intervention and referral for treatment, and increase community connectedness. Activities include employment training, restorative talk circles, counseling, and the development of a youth-led task force.
The funding announced today continues the Trump Administration’s commitment to reducing crime and improving public safety. In the two years before President Trump took office, America had experienced a precipitous rise in crime, particularly in serious violent crime. The President elevated community safety to the top of his domestic agenda and crime rates have fallen steadily since. Recent data from the FBI and the Bureau of Justice Statistics for 2019 show a drop in crime and serious victimization for the third year in a row. However, a number of cities are experiencing conspicuous countertrends. Today’s grants will bolster crime-fighting efforts in those communities and in jurisdictions throughout the United States.
“Violence has become a tragic reality in too many of America’s communities,” said OJP Principal Deputy Assistant Attorney General Katharine T. Sullivan. “Working with officials across the Trump Administration and with thousands of state, local and tribal crime-fighters across the country, the Department of Justice is leading the response to this urgent challenge. OJP is pleased to make these resources available to support innovative, tested and diverse solutions to violent crime.”
Of the more than $458 million awarded nationwide, OJP’s Bureau of Justice Assistance made 1,094 grants totaling more than $369 million to support a broad range of initiatives, including efforts in enforcement, prosecution, adjudication, detention and rehabilitation.
OJP’s Office of Juvenile Justice and Delinquency Prevention awarded more than $10 million across 24 jurisdictions to intervene in and suppress youth gang activity as well as $1 million to the Institute for Intergovernmental Research to continue operating the National Gang Center. OJP’s National Institute of Justice awarded $7.8 million to fund research and evaluation on the prevention and reduction of violent crime. OJP’s Bureau of Justice Statistics provided more than $69 million to strengthen the quality and accessibility of records within the National Instant Criminal Background Check System.
For a complete list of individual grant programs, award amounts, and jurisdictions that will receive funding, click here. More information about OJP and its components can be found at www.ojp.gov.
U.S. Attorney Says DOJ is Ready for Election DayRead the Press Release
Assistant U. S. Attorney Christopher P. Tenorio (619) 909-7556
NEWS RELEASE SUMMARY – November 2, 2020
SAN DIEGO – In anticipation of the upcoming general elections, the U.S. Department of Justice is providing detailed information about its particular efforts, through the Criminal Division, Civil Rights Division, and National Security Division, to ensure that all qualified voters have the opportunity to cast their ballots and have their votes counted free of discrimination, intimidation, or fraud in the election process.
“We are prepared to address any Election Day issues that arise,” said U.S. Attorney Robert Brewer. “Voters should feel confident that local, state and federal law enforcement officials are committed to making sure they will be able to vote safely, and without interference or discrimination.”
Criminal Division and the U.S. Attorney’s Office:
The department’s Criminal Division oversees the enforcement of federal laws that criminalize certain forms of election fraud and vindicate the integrity of the federal election process. The Criminal Division’s Public Integrity Section and the department’s U.S. Attorney’s Offices, including U.S. Attorney Robert Brewer in the Southern District of California, are responsible for enforcing the federal criminal laws that prohibit various forms of election fraud, such as destruction of ballots, vote-buying, multiple voting, submission of fraudulent ballots or registrations, and alteration of votes, and malfeasance by postal or election officials and employees. The Criminal Division is also responsible for enforcing federal criminal law prohibiting voter intimidation for reasons other than race, color, national origin, or religion (as noted below, voter intimidation that has a basis in race, color, national origin, or religion is addressed by the Civil Rights Division).
The U.S. Attorney’s Offices around the country have designated Assistant U.S. Attorneys to serve as District Election Officers (DEOs) in the respective Districts. DEOs are responsible for overseeing potential election-crime matters in their Districts, and for coordinating with the department’s election-crime experts in Washington, D.C. In order to respond to complaints of election fraud or voting rights concerns during the voting period that ends on November 3, 2020, and to ensure that such complaints are directed to the appropriate authorities, U.S. Attorney Brewer has designated AUSA/DEO Christopher Tenorio to remain on duty while the polls are open. The public can reach him at (619) 909-7556.
From now through Nov. 3, 2020, the U.S. Attorney’s Offices will work with specially trained FBI personnel in each district to ensure that complaints from the public involving possible election fraud are handled appropriately. Specifically:
• In consultation with federal prosecutors at the Public Integrity Section in Washington, D.C., the District Election Officers in U.S. Attorney’s Offices, FBI officials at headquarters in Washington, D.C., and FBI special agents serving as Election Crime Coordinators in the FBI’s 56 field offices will be on duty while polls are open to receive complaints from the public.
• Election-crime complaints should be directed to the local U.S. Attorney’s Offices or the local FBI office. The FBI will have special agents and an Election Crimes Coordinator available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses. The public can contact the San Diego FBI at (858) 320-1800. The public may also contact the Department of Justice’s Civil Rights Division in Washington, D.C. at (800) 253-3931 or (202) 307-2767, or by complaint form at https://civilrights.justice.gov/
• DOJ’s Public Integrity Section prosecutors are available to consult and coordinate with the U.S. Attorney’s Offices and the FBI regarding the handling of election-crime allegations.
All complaints related to violence, threats of violence, or intimidation at a polling place should be reported first to local police authorities by calling 911; after alerting local law enforcement to such emergencies by calling 911, the public should contact the department.
The U.S. DOJ Civil Rights Division:
The department's Civil Rights Division is responsible for ensuring compliance with the civil provisions of federal statutes that protect the right to vote, and with the criminal provisions of federal statutes prohibiting discriminatory interference with that right.
The Civil Rights Division’s Voting Section enforces the civil provisions of a wide range of federal statutes that protect the right to vote including: the Voting Rights Act; the Uniformed and Overseas Citizens Absentee Voting Act; the National Voter Registration Act; the Help America Vote Act; and the Civil Rights Acts. Among other things, collectively, these laws:
• Prohibit election practices that have either a discriminatory purpose or a discriminatory result on account of race, color, or language minority status;
• Prohibit intimidation of voters;
• Provide that voters who need assistance in voting because of disability or illiteracy can obtain assistance from a person of their choice (other than agents of their employer or union);
• Provide for accessible voting systems for voters with disabilities;
• Provide for provisional ballots for voters who assert they are registered and eligible, but whose names do not appear on poll books;
• Provide for absentee voting for absent uniformed service members, their family members, and U.S. citizens living abroad; and
• Provide for covered States to offer citizens the opportunity to register to vote through offices that provide driver licenses, public assistance, and disability services, as well as through the mail; and to take steps regarding maintaining voter registration lists.
The Civil Rights Division’s Disability Rights Section enforces the Americans with Disabilities Act (ADA) that prohibits discrimination in voting based on disability.
The Civil Rights Division’s Criminal Section enforces federal criminal statutes that prohibit voter intimidation and vote suppression based on race, color, national origin, or religion.
On Election Day, Nov. 3, 2020, the Civil Rights Division will implement a comprehensive program to help ensure the right to vote that will include the following:
• The Civil Rights Division will conduct monitoring in the field under the federal voting rights statutes.
• Civil Rights Division attorneys in the Voting, Disability Rights, and Criminal Sections in Washington, D.C., will be ready to receive complaints of potential violations relating to any of the statutes the Civil Rights Division enforces. Attorneys in the division will coordinate within the Department of Justice and will take appropriate action concerning these complaints before, during, and after Election Day.
• Individuals with complaints related to possible violations of the federal voting rights laws can call the department’s toll-free telephone line at 800-253-3931, and also can submit complaints through a link on the department’s website, at https://civilrights.justice.gov/.• Individuals with questions or complaints related to the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or submit a complaint through a link on the department’s ADA website, at ada.gov.
• Once again, complaints related to violence, threats of violence, or intimidation at a polling place should always be reported immediately to local authorities by calling 911. They should also be reported to the department after local authorities are contacted.
The U.S. DOJ National Security Division:
The department's National Security Division supervises the investigation and prosecution of cases affecting or relating to national security, including any cases involving foreign interference in elections or violent extremist threats to elections. In this context:
• The National Security Division’s Counterintelligence and Export Control Section oversees matters involving a range of malign influence activities that foreign governments may attempt, including computer hacking of election or campaign infrastructure; covert information operations (e.g., to promulgate disinformation through social media); covert efforts to support or denigrate political candidates or organizations; and other covert influence operations that might violate various criminal statutes.
• The National Security Division’s Counterterrorism Section oversees matters involving international and domestic terrorism and supports law enforcement in preventing any acts of terrorism that impact Americans, including any violent extremism that might threaten election security.
As in past elections, on Nov. 3, 2020, the National Security Division will work closely with counterparts at the FBI and our U.S. Attorney’s Offices to protect our nation’s elections from any national security threats. In particular, attorneys from both sections will be partnered with FBI Headquarters components to provide support to U.S. Attorney’s Offices and FBI Field Offices to counter any such threats. Again, complaints related to violence, threats of violence, or intimidation at a polling place should always be reported immediately to local authorities by calling 911 and, after local authorities are contacted, then should also be reported to the department.
Both protecting the right to vote and combating election fraud are essential to maintaining the confidence of all Americans in our democratic system of government. The department encourages anyone with information suggesting voting rights concerns or ballot fraud to contact the appropriate authorities, and notes in particular that the Department of Homeland Security plays its own important role in safeguarding critical election infrastructure from cyber and other threats.
Vista Man Sentenced to 7 Years in Federal Prison for Receipt of Child PornographyRead the Press Release
NEWS RELEASE SUMMARY – October 30, 2020
SAN DIEGO – Jeffrey John Lenhof was sentenced in federal court today to 7 years in federal prison for receipt of child pornography.
Lenhof first came to the attention of law enforcement when Homeland Security Investigations (HSI) Agents discovered that files of child pornography had been made available from Lenhof’s residence, from as early as March 2017, via a peer-to-peer file sharing program that is easily accessible on the internet.
A federal search warrant was executed at Lenhof’s residence on April 30, 2019. Agents found that three computers, as well as an iPhone and an SD card seized from Lenhof’s residence, contained child pornography, or had been used to download or view child pornography.
Lenhof was charged with federal child pornography offenses, and pleaded guilty in December 2019 to having received child pornography. During the course of the investigation, Agents also discovered on
devices seized from Lenhof’s residence multiple videos which appeared to have been taken with hidden cameras, both in Lenhof’s residence and in other locations. One of those videos showed an adult man setting up a camera in a small bathroom. After the man exited the bathroom, what appeared to be a young teenaged girl entered the bathroom, undressed, and showered. After the girl exited the bathroom, the man could be seen returning to the bathroom to retrieve the camera.
Witnesses later confirmed that the video was taken in approximately 2009 in Lenhof’s home, that Lenhof is the man seen in the video setting up and retrieving the camera, that the girl in the video was 13 or 14 years old at the time the video was taken, and that the girl did not know she was being recorded. Agents seized a hidden camera from the residence at the time of the April 30, 2019, search warrant. After discovering this video, HSI agents executed a second search warrant at Lenhof’s residence on May 14, 2019, at which time agents seized three additional hidden cameras.
At the sentencing hearing, the U.S. District Court Judge Jeffrey Miller noted that child pornography offenses represent "one of the most serious and egregious forms of crimes" and that Lenhof’s non-consensual videorecording of women, including of the girl in his home, "speak to a pattern of conduct that became very troubling."
"Sexual crimes against children are heinous and tragic, and we will protect vulnerable victims whenever possible," said U.S. Attorney Robert Brewer. "We are focused on disrupting and dismantling these vile networks of predators who exploit children and share images online. Today is one more productive step in that direction." Brewer commended the excellent work of prosecutor Janet Cabral and HSI agents on this case.
"Today’s sentencing highlights the hard work of our agents and the U.S. Attorney’s Office to take a child predator offline, and should serve as a warning to others who perpetuate the exploitation of children," said Cardell T. Morant, Special Agent in Charge of Homeland Security Investigations (HSI). "Every one of the images and movies Lenhof produced and possessed was created at the expense of an innocent child, and sending criminals like Lenhof to jail will continue to be a top priority for HSI."
Following his release from federal prison, Lenhof will be on federal supervised release for a period of 10 years. During that time, Lenhof will be required to comply with special conditions, including conditions prohibiting him from having contact with minors and accessing the internet.
This case is the result of the ongoing efforts of the Violent Crime and Human Trafficking (VCHT) Section of the U.S. Attorney’s Office. Formed in 2019, by U.S. Attorney Robert Brewer, the VCHT is tasked with leading collaborations between federal and local law enforcement in the investigation and prosecution of cases involving violent crimes, firearms and gang cases; sex trafficking and child exploitation; civil rights, and labor trafficking. The VCHT Section oversees the Southern District of California Coordinators for Project Safe Childhood, Project Safe Neighborhoods, and Human Trafficking.
DEFENDANT Criminal Case No. 19cr2128-JM
Jeffrey John Lenhof Age: 41 Vista, CA
SUMMARY OF CHARGE
Title 18, United States Code, Section 2252(a)(2), Receipt of Images of Minors Engaged in Sexually Explicit Conduct
Maximum penalty: Twenty years in prison
INVESTIGATING AGENCY
Homeland Security Investigations
Former U.S. Navy Chief Petty Officer Sentenced for Bribery Conspiracy with Foreign Defense ContractorRead the Press Release
NEWS RELEASE SUMMARY – October 30, 2020
SAN DIEGO – Former U.S. Navy Chief Petty Officer Brooks Alonzo Parks was sentenced today to 27 months in prison and $25,405.76 in restitution for federal bribery conspiracy charges by U.S. District Judge Janis L. Sammartino.
Parks is the latest U.S. Navy official to be sentenced in the wide-ranging corruption and fraud investigation involving foreign defense contractor Leonard Glenn Francis and his Singapore-based company, Glenn Defense Marine Asia (GDMA).
"Parks traded on his important position of trust, selling his loyalty to a foreign defense contractor," said U.S. Attorney Robert S. Brewer. "Today’s sentence reinforces our commitment to promote respect for the law and to advocate for just punishment." U.S. Attorney Brewer commended the work of Assistant U.S. Attorney Mark Pletcher and the stellar team of law enforcement agents who dedicated countless hours to the successful investigation and prosecution of the GDMA corruption scheme.
"Brooks Parks’ sentencing is another unfortunate but fitting outcome because he willingly chose to put himself and his greed before the needs of the U.S. Navy," said Bryan D. Denny, Special Agent in Charge of the Defense Criminal Investigative Service (DCIS), Western Field Office. "Mr. Parks succumbed to and personally benefited from the corrupt temptations provided to him by the disgraced Department of Defense contractor Glenn Defense Marine Asia, Ltd. and its chief executive officer Leonard Francis. His actions were and remain inconsistent with the core values of the Navy and as this investigation demonstrates, the DCIS will work diligently with its law enforcement partners to protect those core values and associated taxpayers’ dollars the Department of Defense and the military services so immeasurably value."
"Ret. Chief Petty Officer Parks, who previously held a position of trust and responsibility within the Navy, betrayed his former service and deserves to be held accountable for illicitly seeking to receive gifts and other items of value in exchange for using his influence to benefit GDMA," said Special Agent in Charge Eric Maddox of the NCIS Economic Crimes Field Office. "NCIS and our law enforcement partners remain dedicated to rooting out corruption and fraud that threatens the integrity of the Navy’s acquisition process and wastes taxpayer money."
Parks, 48, of Upper Marlboro, Maryland, earlier this year pleaded guilty to one count of conspiracy to commit bribery, admitting that he conspired with Francis and others to receive things of value, including luxury hotel and travel expenses in exchange for taking official acts for the benefit of GDMA and violating his official duties to the United States Navy.
Francis pleaded guilty in 2015 to bribery and fraud charges, admitting that he presided over a massive, decade-long conspiracy involving scores of U.S. Navy officials, tens of millions of dollars in fraud and millions of dollars in bribes - from cash, prostitutes and luxury travel accommodations to Cuban cigars, Kobe beef and Spanish suckling pigs.
According to admissions made as part of his guilty plea, from December 2005 to February 2009, Parks, a Petty Officer First Class, served as the Logistics Lead Petty Officer ("LPO") on the staff of Commander, U.S. Navy Seventh Fleet, embarked on the USS Blue Ridge, the command ship for the Seventh Fleet. Parks was actively involved in managing the Seventh Fleet’s logistics support budget, signing and processing invoices, and performing other supervisory logistics functions for the Seventh Fleet.
Parks admitted that from March 2006 through March 2010, Francis paid for lavish hotel accommodations for Parks and his friends throughout Asia, as the USS Blue Ridge came into port. Parks had expensive taste and wasn’t restrained in demanding ever more luxuriant accommodations from GDMA. In one instance, Parks demanded the $4,800 per night Ritz Carlton Suite in Singapore, though he was ultimately provided
Executive Club Rooms at the Singapore Hilton at a cost of $3,400 for himself and his friends. In another instance related to a port visit in Hong Kong, Parks demanded "3 suites at a 5-star hotel," for himself. He specified, "I’m wanting a Presidential KING Suite (5 Star))." As Parks put it, "the Glen [GDMA] bug had bit the sh** out of me!!!" He assured Francis, "You know I’ve got your back like you’ve got mine."
In return for these bribes, Parks approved and expedited GDMA invoices and payment requests, provided substantial bidding and pricing information to GDMA as part of GDMA’s effort to crush its competitor in the Philippines, and provided limited ship port visit scheduling information.
So far, 34 defendants have been charged and 23 have pleaded guilty as part of this investigation, many admitting they accepted luxury travel and accommodations, meals or services of prostitutes from Francis in exchange for helping GDMA win and maintain contracts and overbill the Navy by millions of dollars.
DEFENDANT Case Number: 18-CR-3657-JLS
Brooks Alonzo Parks Age: 48 Upper Marlboro, Maryland
SUMMARY OF CHARGES
Conspiracy to Commit Bribery, in violation of 18 U.S.C. § 371
Maximum Penalty: Five years in prison, a $250,000 fine
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
Defense Contract Audit Agency
U.S. Attorneys across California Join District Attorneys to Help Victims of Domestic Violence During the COVID-19 PandemicRead the Press Release
NEWS RELEASE SUMMARY – October 29, 2020
SAN DIEGO— The United States Attorneys for the Southern District of California, Eastern District of California, Northern District of California and Central District of California and the District Attorneys of San Diego, Sacramento, Alameda and Ventura counties launched an online outreach campaign today to help victims of domestic violence during the COVID-19 pandemic. The United States Attorneys and District Attorneys are joined by Childhelp, a national nonprofit organization aiding victims of child abuse.
The outreach campaign was created to combat an unintended consequence of COVID-19 public health measures— an alarming rise in domestic violence with victims trapped at home with their abusers under increasing stress. The National Domestic Violence Hotline has reported an increase in contacts to the hotline during COVID-19. Reports show that physicians are treating more domestic violence injuries and that these injuries are more severe. According to the CDC, roughly one in six homicide victims are killed by an intimate partner. Research further shows that abusers with a gun in the home are five times more likely to kill their partners than abusers who don’t have access to a firearm. Under federal law, it is illegal to possess a firearm if you are a felon, and the United States Attorney’s Offices prioritize prosecuting individuals with domestic violence felony convictions who possess a firearm.
The Southern District of California U.S. Attorney’s Office has made significant efforts to prosecute individuals who possessed firearms in violation of a domestic violence restraining order. For example, in October 2019, a San Diego Superior Court judge imposed a domestic violence restraining order upon Daniel Anthony Fischbeck. According to the criminal complaint, the restraining order explicitly prohibited Fischbeck from possessing firearms. On January 1, 2020, Fischbeck was arrested after violating the restraining order a second time. At the time of Fischbeck’s arrest, a Springfield XD .45 caliber handgun was found in his car. He was then charged federally for several federal firearms offenses. Fischbeck recently pleaded guilty in federal court to being a methamphetamine addict while in possession of the Springfield handgun, in violation of Title 18, United States Code, Section 922(g)(3). Fischbeck is set to be sentenced in federal court on November 2, 2020. U.S. v. Fischbeck, 20-CR-479-LAB.
The focus on domestic violence and firearms is rendered even more critical in light of recent crime data. In September, a report by the San Diego Association of Governments, also known as SANDAG, revealed that the San Diego region saw a 3 percent increase in domestic violence in the first half of 2020 over the same period last year. SANDAG’s data shows more notable increases in domestic violence in certain local communities: Santee (18 percent); El Cajon (18 percent); and National City (74 percent). Meanwhile, statistics cited by the National Coalition Against Domestic Violence indicate that one in three female murder victims are killed by intimate partners and that an abuser’s access to a firearm increases the risk of femicide significantly.
"Domestic violence plays a significant role in how we prioritize federal prosecutions," said U.S. Attorney Robert Brewer of the Southern District of California. "We frequently consider past domestic violence arrests and convictions in both firearms and immigration prosecutions. That type of criminal history serves as a possible indication of anger and impulse control issues, which makes a defendant a larger threat to public safety, especially when a firearm is present. As a result, the Department of Justice has urged all U.S. Attorneys to aggressively prosecute firearms violations in order to disrupt the escalating cycle of violence."
According to Childhelp Founder & CEO, Sara O’Meara, "The partnership of California’s safety leaders with Childhelp to secure children during COVID-19 is a model for child welfare across the country. All these huge hearts coming together to find children trapped in the shadows of abuse will not only save lives, but create a culture of compassion that will exist long after this virus is behind us."
The campaign includes a video public service announcement (see https://youtu.be/QwWHxAFTRK8) and public awareness messages posted on Facebook, Twitter, and other social media platforms with a new post made each day for one week. The posts provide information for victims with resources, such as 24-hour hotlines and other services vital to reporting abuse. The posts also provide tips for concerned friends, relatives, and educators on how they can help victims of abuse. This outreach campaign follows a July campaign addressing domestic violence and child abuse and exploitation by U.S. Attorney Scott, Childhelp, and the District Attorneys of Alameda, Sacramento, and San Diego counties.
Two Admit to Using Casinos to Facilitate Financial CrimeRead the Press Release
Assistant U.S. Attorneys Daniel C. Silva (619) 546-9713 and Mark W. Pletcher (619) 546-9714
NEWS RELEASE SUMMARY – October 28, 2020
SAN DIEGO – Fan Wang pleaded guilty in federal court today to operating an unlicensed money transmitting business. His guilty plea is the fourth in this ongoing investigation targeting operators of unlawful underground financial institutions that transfer 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 part of his agreement to plead guilty, Wang agreed to forfeit $225,000 to the United States as property involved in the operation of his unlicensed money transmitting business.
“As this series of guilty pleas makes abundantly clear, individuals facilitating the illegal transfer of money to and from China will be held accountable,” said U.S. Attorney Robert Brewer. “The security of our banking system depends on it.” Brewer commended prosecutors Mark Pletcher and Daniel Silva, as well as agents from Homeland Security Investigations, IRS Criminal Investigation Las Vegas Financial Crimes Task Force and the Drug Enforcement Administration for their excellent work on this case.
“HSI will continue to hunt down these underground hawalas and disrupt the ability of criminal organizations to cash-in on their ill-gotten gains,” said Cardell T. Morant, special agent in charge for Homeland Security Investigations (HSI). “HSI and our partners are committed to pursuing criminal prosecutions and civil monetary penalties against those who choose to operate in the shadows of our financial system and enable the flow of dirty money across international borders.”
As admitted in the plea agreement entered today before U.S. Magistrate Judge Daniel E. Butcher, Wang sold hard currency in U.S. dollars that he collected from various third parties. His customers were typically individuals with bank accounts in China who could not readily access cash in the United States due to capital controls that cap the amount of Chinese yuan that an individual can convert to foreign currency. Often these customers needed the money to gamble at the casinos in Las Vegas and elsewhere. Upon receiving U.S. dollars, the customers would transfer from a Chinese bank account an equivalent value in yuan, over their mobile phones in the United States, to a separate bank account in China designated by Wang. As part of a typical money exchange transaction, Wang was introduced to his customers by a casino host whose job it was to facilitate that customer’s play at a particular casino. The customer then used the U.S. currency to gamble.
Sentencing is scheduled for January 29, 2021.
Extending the series of guilty pleas in this investigation, Jeffrey B. Miklus of Phoenix, Arizona admitted to tax fraud, after using funds from his business to fund his gambling activity at casinos throughout the southwestern United States.
As admitted this morning in his plea agreement that was also entered before U.S. Magistrate Judge Daniel E. Butcher, Miklus withdrew over $1.5 million dollars from his pest control business, and used these proceeds to gamble—all without reporting that income to the IRS. This activity spanned years, resulting in restitution and taxes due and owing to the IRS of more than $650,000, an amount that will grow with interest and a 75 percent fraud penalty. As a material term of his plea agreement, Miklus must satisfy the tax due in full before his sentencing date.
Sentencing for Miklus is scheduled for January 31, 2021.
DEFENDANTS
Fan Wang Case Number 20CR3390-DMS
Las Vegas, NV Age: 38
Jeffrey B. Miklus Case Number 20CR3328-GPC
Phoenix, AZ Age: 57
SUMMARY OF CHARGES
Operation of Unlicensed Money Transmitting Business – Title 18, U.S.C., Section 1960
Maximum penalty: Five years in prison, forfeiture, and $250,000 fine
Tax Fraud and False Statements Under Penalties of Perjury – Title 26, U.S.C., Section 7206(1)
Maximum Penalty: Three years in prison, restitution, and $250,000 fine
AGENCIES
Homeland Security Investigations
IRS Criminal Investigation Las Vegas Financial Crimes Task Force
Drug Enforcement Administration
Owner of Local Technical Training School Sentenced for Defrauding the VA out of almost $30 Million in G.I. Bill Education BenefitsRead the Press Release
Assistant U. S. Attorney Michelle L. Wasserman (619) 546-8431
NEWS RELEASE SUMMARY – October 27, 2020
SAN DIEGO – Nimesh Shah, owner of Blue Star Learning, a technical training school in San Diego, was sentenced in federal court today to 45 months in custody as a result of a multi-year scheme that defrauded the Department of Veterans Affairs out of almost $30 million in Post-9/11 G.I. Bill benefits.
As laid out in Shah’s plea agreement and court documents, Shah took extraordinary efforts to deceive regulators from the Department of Veterans Affairs (VA) to ensure the school continued to receive VA funds. Shah provided the VA with false documents, invented fake students and created fake student files. He provided spreadsheets with false employment information and fraudulent contact information for purported graduates of the school and their made up employers. He purchased cellular telephones so that he and his employees could field VA regulator calls to purported employers of school graduates, and hired individuals overseas to pretend to be satisfied Blue Star Learning students in response to VA regulator emails. As laid out in court records, Shah’s scheme appears to be one of the largest Post-9/11 G.I. Bill fraud cases that has been prosecuted around the country.
Shah was also ordered to forfeit $3,076,361.77 and to pay the VA $29,350,999 in restitution. Shah’s wife Nidhi Shah, who was the vice president and director of education at the school, was sentenced to two years of probation as a result of lying to investigators in the course of the investigation into the school.
The Post-9/11 G.I. Bill provides veterans and other eligible individuals educational assistance, including tuition, housing costs, and other educational costs and fees. The VA pays tuition and fees directly to the school where the veteran is enrolled, and if the veteran is enrolled on more than a half time basis, the VA additionally provides a monthly housing allowance directly to the veteran, as well as money for books, supplies, equipment and other educational expenses. In October 2011, the VA began paying Post-9/11 G.I. Bill benefits for individuals pursuing non-institute of higher learning, non-degree programs, including non-accredited, non-college degree schools like Blue Star Learning.
In order to receive funds from the VA under the Post-9/11 G.I. Bill, Blue Star Learning was required to have at least 15 percent non-veterans for each course for which the VA was paying educational benefits - a rule called the “85/15 Rule.” As laid out in court records, the “85/15 Rule” is designed to minimize the risk that veterans’ benefits are wasted on educational programs of little value and to ensure that the cost of a course is acceptable and paid on the open market by non-veterans. As part of its yearly accreditation process, Blue Star Learning was also required to provide vocational attainment data for graduates of the school to VA regulators that corroborated employment statistics posted on the Blue Star website. This data was requested to ensure that individuals attending the school were getting jobs in the fields in which they were receiving training, as a measure of quality.
As part of his multi-year fraud scheme, between March 2016 and June 2019, Shah lied to the VA about the percentage of non-veteran students at the school, and made up fake non-veteran students – when in fact nearly all of their business came from veteran students. He also created spreadsheets of fraudulent employment data, including false emails, phone numbers, jobs and employers to support made-up graduate employment data. And he falsely claimed that all of the students at the school were enrolled full-time. Shah’s lies ensured that Blue Star Learning received millions of dollars in VA education benefits that the school was not entitled to.
Blue Star Learning, which charged up to $20,560 per course, had close to 100% veteran students. Shah nonetheless repeatedly misrepresented to the California State Approving Agency for Veterans Education (“CSAAVE”) and the VA that Blue Star Learning was in compliance with the “85/15 Rule.” Shah took extraordinary efforts to deceive VA regulators regarding non-veteran students at the school, including creating fake enrollment agreements and student files for the purported non-veterans in each program. Shah emailed the VA 48 fraudulent enrollment agreements for fictitious people he represented were non-veteran students at Blue Star Learning, complete with fraudulent dates of birth, social security numbers, addresses, phone numbers and emails for each fraudulent non-veteran student.
Shah knew that the vast majority of Blue Star Learning graduates did not obtain jobs in the fields in which they were purportedly receiving training, and that the employment statistics on Blue Star Learning’s website were false. Shah nonetheless submitted fraudulent spreadsheets to CSAAVE claiming that all of the Blue Star Learning students listed were employed in the informational technology field. On these spreadsheets, Shah provided fraudulent phone numbers, email addresses, employers, and employer contact information for each student. Shah then took his fraud a step further: Because he knew CSAAVE could contact the students/employers to verify the data submitted, Shah hired individuals to create the fraudulent email addresses for the Blue Star Learning students, and directed these individuals, who resided overseas, to answer emails received at the fraudulent email addresses pretending to be satisfied Blue Star Learning graduates working in the information technology field. Shah additionally created 30 fictitious companies that he listed as the employers on the fraudulent spreadsheets, and hired individuals to create fraudulent email addresses and domain names for each fictitious company. Shah directed a Blue Star Learning employee to purchase 30 cellular telephones, one for each fictitious employer, and had employees of Blue Star Learning create voicemail greetings on each cellular telephone so that it would appear that the fraudulent businesses were legitimate if CSAAVE called to check.
“This was an extraordinary fraud in terms of the elaborate deception, the years-long duration and the amount of money involved,” said U.S. Attorney Robert Brewer. “This defendant knowingly violated the rules to enrich himself, and for that he will go to prison.” Brewer commended prosecutor Michelle Wasserman and agents from the Department of Veterans Affairs Office of Inspector General and Federal Bureau of Investigation for excellent work on this case.
“The FBI worked with our partners at the VA-OIG to investigate this elaborate fraud scheme resulting in a loss of over $29 million dollars,” said FBI Special Agent in Charge Suzanne Turner. “Fraud affecting educational benefits meant for our military veterans will not be tolerated. Today, justice was served against the Shahs, the owners of Blue Star Learning, who put greed and deceit above the men and women of our U.S. military.”
Rebeccalynn Staples, Special Agent-in-Charge of the U.S. Department of Veterans Affairs, Office of Inspector General, Western Field Office, stated, “This case demonstrates VA OIG’s commitment to aggressively pursuing individuals and schools who seek to exploit the education benefits earned by veterans. VA OIG will continue to protect the integrity of the VA education benefits program by identifying unscrupulous schools who take advantage of veteran students. VA OIG urges anyone with knowledge of possible fraud against VA to contact the VA OIG Hotline Division at 1-800-488-8244.”
As a result of Shah’s fraud, the VA issued over $11 million in tuition payments to Blue Star Learning, and over $18 million in housing allowances and stipends. In total, as a result of Shah’s fraud, the VA lost $29,350,999.
DEFENDANT Case Number 19CR4551-JAH; 19CR4550-JAH
Nimesh Shah Age: 37 San Diego, CA
Nidhi Shah Age: 35 San Diego, CA
SUMMARY OF CHARGES
Nimesh Shah: Wire Fraud – Title 18, U.S.C., Section 1343
Maximum penalty: Twenty years in prison and $250,000 fine
Nidhi Shah: False Statement – Title 18 U.S.C., Section 1001
Maximum penalty: Five years in prison and $250,000 fine
AGENCY
Department of Veterans Affairs Office of Inspector General
Federal Bureau of Investigation
San Diego Drug and Money Laundering Cell Leader Sentenced to 17 YearsRead the Press Release
Assistant U. S. Attorney Larry Casper (619) 546-6734
NEWS RELEASE SUMMARY – October 26, 2020
SAN DIEGO – Javier Felix Bayardo, a resident of Sinaloa, Mexico who was living in the San Diego area, was sentenced in federal court today to 17 years in custody for his role as the organizer of drug and money- laundering conspiracies and for possessing firearms in furtherance of a drug trafficking crime.
Felix pleaded guilty in August of 2018, admitting that from 2014 until 2017, Felix coordinated the receipt of cocaine, methamphetamine and marijuana that were smuggled to the San Diego area. He arranged to store the drugs and then deliver them to customers in Southern California and elsewhere. To do so, Felix maintained control of multiple commercial storage units that he used to store large quantities of drugs following their importation. Felix supervised drug couriers and money launderers in these efforts.
Through his plea agreement, Felix also acknowledged that he and others opened dozens of bank accounts that were used to receive cash deposits of drug proceeds from throughout the United States and then withdrawn from the San Diego area for bulk transport to drug suppliers in Mexico.
According to the plea documents, the conspiracy involved the laundering of at least $4.5 million in drug proceeds and at least 26.5 kilograms of cocaine, 938 grams of methamphetamine and 486 kilograms of marijuana that were seized during the investigation. Felix possessed five firearms, which included a .223 caliber automatic rifle and a Glock semi-automatic pistol.
In addition to the 17-year sentence, the court imposed a $30,000 fine. In connection with this case, the court has previously ordered the forfeiture of more than $27,500 in United States currency; Las Vegas real property; two Kawasaki Jet Skis; 25 wristwatches; 26 women’s handbags; 42 pairs of women’s shoes; three large screen televisions; a currency counter and the five firearms.
“Those who attempt to use Southern California as a hub for their illicit drug trafficking and money laundering efforts will continue to face stiff penalties,” said U.S. Attorney Robert Brewer. “Not only will we aggressively pursue significant prison sentences in these cases but also forfeiture of the ill-gotten gains of the perpetrators in whatever form.” Brewer commended prosecutor Larry Casper and agents from the Drug Enforcement Administration, IRS Criminal Investigation Division, Homeland Security Investigations and U.S. Postal Service for their excellent work on this case.
“Today’s sentencing of Javier Felix Bayardo is a victory for our community,” said DEA Special Agent in Charge John Callery. “Felix Bayardo will spend the next 17 years in federal prison for dealing deadly drugs that caused the destruction of an untold number of lives. This just sentencing should serve as a warning to anyone who puts profits above the lives of Americans – DEA and our law enforcement partners will use every resource to ensure you are brought to justice and serve time for your crimes.”
“Traffickers of illegal drugs who corrupt our financial systems to launder their illicit proceeds will be caught and brought to justice,” said IRS Criminal Investigation Special Agent in Charge Ryan L. Korner. “Our IRS Special Agents are committed to dismantling these drug and money laundering networks by using our financial expertise to identify and trace criminal transactions, stem the flow of dirty money and seize all assets that fund drug cartels.”
“This sentencing is the product of federal law enforcement agencies collaborating together and working with our partners at the U.S. Attorney’s Office on ridding our communities of illegal narcotics and the violence that so often comes with it,” said Cardell T. Morant, Special Agent in Charge of Homeland Security Investigations (HSI). “I hope today’s outcome is seen as a warning to others who are thinking of getting involved in narcotics smuggling to make money. We will find you and we will bring you to justice.”
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. The principal mission of the OCDETF program is to identify, disrupt and dismantle the highest-level drug traffickers, money launderers and other priority transnational criminal organizations that threaten the citizens of the United States using a prosecutor-led, intelligence driven, multi-agency approach to combat transnational organized crime. The OCDETF program facilitates complex, joint operations by focusing its partner agencies on priority targets, by managing and coordinating multi-agency efforts, and by leveraging intelligence across multiple investigative platforms.
DEFENDANT Case Number 17-cr-2538-BAS
Javier Felix Bayardo Age: 36 Sinaloa, Mexico
SUMMARY OF COUNTS OF CONVICTION
Javier Felix-Bayardo
Count 1: Conspiracy to Distribute Cocaine, Methamphetamine and Marijuana, 21 U.S.C. Secs. 841(a)(1) and 846.
Sentence Imposed: Twelve years (concurrent with Count 2)
Count 2: Conspiracy to Launder Monetary Instruments, 18 U.S.C Secs. 1956(h) and (a)(1)(B)(i).
Sentence Imposed: Twelve years (concurrent with Count 1)
Count 3: Possession of Firearm in Furtherance of a Drug Trafficking Crime, 18 U.S.C. Sec. 924(c).
Sentence Imposed: Five years (consecutive to Counts 1 and 2)
INVESTIGATING AGENCIES
Drug Enforcement Administration
IRS Criminal Investigation Division
Homeland Security Investigations
U.S. Postal Service
El Cajon “Pill Mill” Doctor Sentenced to 18 Months in Prison for Causing the Illegal Distribution of OpioidsRead the Press Release
Assistant U. S. Attorneys Larry Casper (619) 546-6734 and Victor White (619) 546-8439
SAN DIEGO – Egisto Salerno, M.D., a San Diego resident, was sentenced to 18 months in custody by U.S. District Judge Cynthia Ann Bashant for causing the illegal distribution of an opioid pain medication commonly known as Norco or Vicodin.
Salerno, whose medical practice was located on El Cajon Boulevard, pleaded guilty in January, admitting that he signed prescriptions for 78,544 pills that lacked a legitimate medical purpose and were outside the usual course of professional medical practice.
“This defendant ignored and defied his medical obligation to his patients, his duty to the practice of medicine and his duty to the community,” Assistant U.S. Attorney Larry Casper said during today’s hearing. “The defendant committed this federal crime in the midst of an opioid crisis in this country. And he admittedly abused his position of trust.”
“Corrupt doctors who blatantly ignore their medical oath and the best interests of their patients to illegally distribute opioids in the midst of a nationwide opioid crisis will face severe consequences” said U.S. Attorney Robert Brewer. “We will continue to battle this crisis on every front including zealously pursuing all who seek to profit from illegally distributing opioids whether or not they may have a medical degree.” Brewer praised prosecutors Larry Casper and Victor White and DEA agents for their efforts to achieve justice in this case.
“While the vast majority of doctors prescribe medications in compliance with federal laws, there will always be doctors like Egisto Salerno who seek profit over their patients’ best interests,” said DEA Special Agent in Charge John W. Callery. “DEA has a team dedicated to investigating those doctors who choose to violate their medical oath and illegally distribute opioids. DEA will bring these doctors to justice for their contribution to the growing opioid problem in our country.”
Through his plea agreement, Salerno also admitted that an undercover federal agent who visited Salerno’s office on six occasions received six hydrocodone prescriptions. In a separate instance, on a date when the undercover agent did not visit Salerno’s office and the doctor did not see him, Salerno acknowleged that a prescription was improperly issued by him in the name used by the undercover agent. After the prescription was issued, Salerno ginned up and signed a progress note in the “patient” chart for the purported visit that did not occur.
The prescription was then picked up by another as part of a larger scheme to divert these pills. That scheme involved two medical assistants in Salerno’s practice who falsified medical records and sold prescriptions that Salerno had pre-signed to a co-defendant though the “patients” identified on those prescriptions did not even see Salerno. In fact, as Salerno acknowledged, many of those in whose names these prescriptions were written were deceased or jailed at the time the prescriptions were written.
The pills were, in turn, diverted to the “capper” or patient recruiter, who also arranged to bring homeless and other individuals to Salerno’s office and paid them to secure these prescriptions from Salerno. Others assisted the patient recruiter by transporting the purported patients to Salerno’s office and then to pharmacies to pick up the pills. In turn, pills were sold in San Diego and delivered to a pharmacy in Mexico for cash.
As the plea documents show, the criminal activity occurred between November 2014 and February 2018. Seven other defendants have been convicted in this case including Salerno’s two medical assistants – April J. Cervantes and David D. Apple; the lead patient “recruiter” – Stephen Toney; and Toney’s associates – Shalina D. Latson, Lonnell Ligon, LaJuan D. Smith and Amber N. Grabau.
Defendant David D. Apple, one of Salerno’s medical assistants, will be sentenced on December 2, 2020.
DEFENDANT Case Number 18-cr-1405-BAS
Egisto Salerno, M.D. Age: 76 San Diego, California
SUMMARY OF CONVICTIONS
Egisto Salerno, M.D.
Distribution of Hydrocodone in violation of Title 21 U.S.C. Sec. 841(a)(1) and (b)(1)(C)
Maximum Penalties: Twenty years in prison and $1 million fine.
Prior Sentences Imposed
Stephen Toney, Sr.: Seventy four months in custody - Conspiracy to Possess With Intent to Distribute Hydrocodone in violation of 18 U.S.C.,Sec. 841(a)(1) and 846.
Amber Nicole Grabau: Twenty months in custody - Conspiracy to Possess With Intent to Distribute Hydrocodone, in violation of Title 18, U.S.C., Sec. 841(a)(1) and 846.
Lonell J. Ligon: Twenty four months custody - Conspiracy to Possess With Intent to Distribute Hydrocodone, in violation of Title 18, U.S.C., Sec. 841(a)(1) and 846.
Shalina D. Latson: Five years probation - Conspiracy to Possess With Intent to Distribute Hydrocodone, in violation of Title 18, U.S.C., Sec. 841(a)(1) and 846.
LaJuan D. Smith: Thirty seven months custody - Conspiracy to Possess With Intent to Distribute Hydrocodone, in violation of Title 18, U.S.C., Sec. 841(a)(1) and 846.
April J. Cervantes: Twenty four months custody - Conspiracy to Possess With Intent to Distribute Hydrocodone, in violation of Title 18, U.S.C., Sec. 841(a)(1) and 846.
Remaining to be Sentenced
David D. Apple Conspiracy to Possess With Intent to Distribute Hydrocodone in violation of Title 18, U.S.C., Sec. 841(a)(1) and 846.
INVESTIGATING AGENCY
Drug Enforcement Administration
U.S. Navy Service Members Sentenced in Sweeping Corruption and Insurance Fraud SchemeRead the Press Release
Assistant U.S. Attorneys Emily W. Allen (619) 546-9738 and Andrew Galvin (619) 546-9721
NEWS RELEASE SUMMARY – October 23, 2020
SAN DIEGO – Two U.S. Navy service members caught in a sweeping corruption case involving false claims to the Traumatic Servicemembers Group Life Insurance Program were sentenced in federal court today.
Ronald Olmsted and Anthony Coco, who each entered guilty pleas earlier this year, were sentenced by U.S. District Judge Janis L. Sammartino. Olmsted was sentenced to four months in prison followed by four months of home detention to be served as part of three years of supervised release. Coco was sentenced to four months of home detention to be served as part of three years of probation.
The charges arise from a scheme led by co-defendant Christopher Toups, who according to plea agreements and an indictment, recruited Olmsted, Coco, and a number of other fellow service members he met through his work in the Navy. According to court documents, Toups helped these coworkers to create and file fraudulent claims to obtain unearned benefits from Traumatic Servicemembers Group Life Insurance Program, or TSGLI, an insurance program that compensates service members who suffer serious and debilitating injuries while on active duty. He had help from U.S. Navy Commander Dr. Michael Villarroel, the medical doctor for the unit where Toups worked, and from Kelene Meyer, a former nurse in the U.S. Navy who was married to Toups during the scheme.
According to the superseding indictment and other court records, including Olmsted’s and Coco’s plea agreements, the co-defendants were part of the Explosive Ordinance Disposal Expeditionary Support Unit One (“EOD ESU One”), based in Coronado, California. Christopher Toups, a former Chief Petty Officer Construction Mechanic, filed his own fraudulent claims, and collected kickbacks from the participants he recruited once their fraudulent TSGLI benefits were paid. Dr. Villarroel knowingly signed off on false and fraudulent TSGLI applications on behalf of multiple service members that were part of or connected to EOD ESU One. To support their applications, each defendant submitted fabricated applications that included forged signatures and altered hospital records, which Meyer helped to create.
Relevant to today’s hearings, Ronald Olmsted admitted in his plea agreement to submitting two separate fraudulent claims, for which he received a total payout from TSGLI of $175,000. Olmsted’s claims falsely reported that he lost the ability to do basic tasks and care for himself for months after a rappelling accident in 2011 and a fall down a flight of stairs in 2012. Olmsted kicked back $55,000 to Toups, some in cash and some in cashier’s check. Coco, for his part, admitted that he was paid $100,000 after falsely reporting on medical forms that he suffered a fall from a piece of equipment that broke both his ankles and left him confined to a wheelchair. After he received the unwarranted payout from TSGLI, Coco kicked back $65,000 to Toups, paid all in cash.
To date, 11 individuals have been charged in connection with this scheme. Seven of those individuals – Richard Cote, Earnest Thompson, Kelene Meyer, Paul Craig, and Stephen Mulholland, as well as Olmsted and Coco – have pleaded guilty to fraud charges. According to court records, Toups, Villarroel, and Meyer were at the center of the scheme, and together the conspirators defrauded the TSGLI program of nearly $2 million. Toups, Villarroel, and Meyer received kickbacks for creating and filing the fraudulent TSGLI applications for other U.S. Navy service members.
DEFENDANTS AND CHARGES Case Number Age Hometown
Christopher Toups 18CR1674-JLS 43 Woodstock, GA
Kelene Meyer 18CR1674-JLS 44 Jacksonville, FL
Dr. Michael Villarroel 18CR1674-JLS 48 Coronado, CA
Paul Craig 18CR1674-JLS 47 Austin, TX
Richard Cote 18CR1674-JLS 45 Oceanside, CA
Earnest Thompson 18CR1674-JLS 46 Murrieta, CA
James Brown 18CR1674-JLS 46 San Diego, CA
David Hawley 18CR1674-JLS 51 San Diego, CA
Ronald Olmsted 20CR0659-JLS 48 Mobile, AL
Anthony Coco 20CR0197-JLS 43 San Diego, CA
Stephen Mulholland 20CR0052-JLS 51 Panama City Beach, FL
SUMMARY OF CHARGES
18 U.S.C. § 1349, Conspiracy to Commit Wire Fraud
Maximum Penalty: Twenty years in prison, $250,000 fine, forfeiture and restitution
18 U.S.C. § 1343, Wire Fraud
Maximum Penalty: Twenty years in prison, $250,000 fine, forfeiture and restitution
18 U.S.C. § 287, Making a False Claim
Maximum Penalty: Five years in prison, $250,000 fine
AGENCIES
Federal Bureau of Investigation
Naval Criminal Investigative Service
Department of Veterans Affairs - Office of Inspector General
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
El Cajon Man Sentenced to 14 Years in Fentanyl Overdose DeathRead the Press Release
Assistant U. S. Attorney Larry Casper (619) 546-6734
NEWS RELEASE SUMMARY – October 23, 2020
SAN DIEGO – Christopher Glenn Emison of El Cajon was sentenced today by U.S. District Judge Anthony J. Battaglia to 168 months in prison for distributing more than 40 grams of fentanyl - including the fentanyl that caused the death of 45-year old Derrick Hotchkiss.
On April 11, 2019, Hotchkiss, who played rugby for the San Diego Old Aztecs Rugby Football Club for many years and continued to attend matches, overdosed on fentanyl and died at his home in San Diego. Upon responding to the death scene, law enforcement officials recovered Hotchkiss’ cellular telephone and located a text message exchange between Emison and Hotchkiss indicating that the defendant sold fentanyl to Hotchkiss the night before his death.
In imposing sentence, Judge Battaglia said, “Dealing in drugs is dangerous. Dealing in fentanyl is deadly.” He also explained that, “For those that survive the victim, they have a whole lifetime to consider [what happened] and to grieve.”
“This case and the fact that deadly fentanyl continues to ravage our community, taking more than 300 lives this year alone in San Diego County, demonstrates the urgent need to hold these dealers of death accountable for their actions” said U.S. Attorney Robert Brewer. “Law enforcement must continue to devote resources to the opioid epidemic and stop those who profit from drug trafficking, while robbing sons and daughters of their parents, and parents of their children.”
“Selling drugs is not a victimless crime. Selling drugs is a root cause of crime, cartel violence, the destruction of families, and in this case, death,” said DEA Special Agent in Charge John W. Callery. “If you make the choice to sell drugs, DEA and our law enforcement partners will work tirelessly to bring you to justice.”
On the same day as Hotchkiss’ death, law enforcement executed a search warrant at Emison’s residence and seized 11.6 grams of fentanyl; 95.6 grams of heroin residue; a loaded Ruger .357 Magnum revolver on Emison’s bed; a .22 calibert semi-automatic rifle; over 1,000 rounds of various caliber ammunition; a “butane honey oil” (hash oil) extraction laboratory; a digital scale; a “pay and owe” notebook; and considerable evidence of Emison’s own drug usage. A search of Emison’s vehicle yielded additional ammunition and firearms.
After waiving his Miranda rights, while speaking with agents, Emison acknowledged his understanding of the dangers associated with the drug he was selling, as he told agents that fentanyl was “as dangerous as shit.” Emison also told law enforcement to handle the “China,” meaning the fentanyl, in his residence with care and claimed to have warned the victim about the drug’s strength, although the text messages he apparently sent to the victim with that warning after he sold the fentanyl did not generate a response and, thus, apparently came too late.
Hotchkiss’ mother, who addressed the court at sentencing, explained that her “life was shattered” when she was informed of her son’s death. In filed papers, she wrote: “I don’t know why these guys are selling [fentanyl], whether it’s money or they themselves are using, but if this is going to save another mother’s son then I’m glad they were arrested.” Hotchkiss’ spouse also told the court in filed papers that their young son “does not have a father” and he “will have no memories of [his father], just photographs and stories that I will share.”
The Old Aztecs Rugby Football Club also noted that, “we continue to grieve our beloved Deez…Saturdays won’t be the same; he was a large man with a heart to match.”
U.S. Attorney Brewer praised prosecutor Larry Casper as well as the agents from Narcotics Task Force Team 10 and the El Cajon Police Department. Team 10 is a multi-agency team housed by DEA that was created in July 2018 to address drug overdose deaths in San Diego.
Co-defendant Jeffrey Alden Blair pleaded guilty on February 26, 2020 and is scheduled to be sentenced on November 23, 2020.
DEFENDANTS Case Number 19cr3252-AJB
Christopher Glenn Emison Age: 33 El Cajon, California
Jeffrey Alden Blair Age: 34 San Diego, California
SUMMARY OF CHARGE
Distribution of Fentanyl – Title 21 U.S.C. Section 841(a)(1) and (b)(1)(C)
Maximum Penalties – Mandatory minimum of five years, and maximum of 40 years in prison and $5 million fine
INVESTIGATING AGENCIES
Drug Enforcement Administration
San Diego Medical Examiner’s Office
El Cajon Police Department
Guild Mortgage Company of San Diego to Pay Almost $25 Million to Resolve Allegations it Knowingly Caused False ClaimsRead the Press Release
Assistant U. S. Attorney Joseph Price (619) 546-7642
NEWS RELEASE SUMMARY – October 22, 2020
SAN DIEGO – Guild Mortgage Company has agreed to pay the United States $24.9 million to resolve allegations that it violated the False Claims Act and the common law by knowingly breaching material program requirements when it originated and underwrote mortgages insured by the Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA), the Department of Justice announced today. Guild Mortgage Company is headquartered in San Diego, California, with branches across the United States.
“Ensuring the integrity of federal lending programs is important to keeping those programs financially sound,” said Acting Assistant Attorney General Jeffrey Bossert Clark of the Department of Justice’s Civil Division. “Together, with our partners at HUD, we have worked hard to hold accountable FHA lenders that knowingly and materially violate program requirements that help Americans achieve the dream of home ownership.”
“As this settlement demonstrates, we are committed to holding mortgage lenders accountable when they choose to abuse the integrity of vital government programs that are designed to assist homeownership,” said U.S. Attorney Robert Brewer. “We also commend the whistleblower for coming forward, exposing these wrongs, and working with the government investigative team.”
“The United States is committed to providing Americans opportunities to own their own homes,” said Acting U.S. Attorney for the District of Columbia Michael R. Sherwin. “This settlement reflects the diligent work of officials from the Department of Justice and HUD to ensure that the programs that provide those opportunities are operated with integrity and in accordance with requirements established by law.”
“The Federal Housing Administration insurance program is a critical tool that helps hardworking Americans achieve their dream of homeownership. Any abuse of that program is unacceptable and the bad actors will be held accountable,” said Rae Oliver Davis, U.S. Department of Housing and Urban Development, Inspector General. “This case highlights the effectiveness and the importance of whistleblower programs.”
Participants in the FHA mortgage insurance program, like Guild Mortgage Company, can originate and underwrite mortgages without first having the government review the loans for compliance with the agency’s underwriting and origination requirements. If an FHA-insured loan defaults, the holder of the loan can then recover from the United States for certain losses. Lenders must follow FHA rules designed to ensure that only mortgages that meet key credit and underwriting criteria are insured by the government.
The settlement announced today resolves allegations that Guild Mortgage Company knowingly approved ineligible loans that later defaulted and resulted in claims to FHA for mortgage insurance, failed to comply with material program rules that require lenders to maintain quality control programs to prevent and correct underwriting deficiencies, and failed to self-report materially deficient loans that it identified.
The agreement resolves allegations brought by the former head of quality control at Guild Mortgage Company, Kevin Dougherty, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims and to receive a share of any recovery. The Act permits the United States to intervene in such a lawsuit, as it did in part here. Dougherty will receive $4,980,000 as his share of the government’s recovery.
The investigation, litigation, and settlement were the result of a coordinated effort among the Commercial Litigation Branch of the Department of Justice’s Civil Division, the U.S. Attorney’s Offices for the District of Columbia and the Southern District of California, HUD, and HUD-OIG.
The qui tam case is captioned United States ex rel. Dougherty v. Guild Mortgage Company, Civ. A. No. 16-2909 (S.D. Cal.).
The claims asserted against the defendant are allegations only, and there has been no determination of liability.
Former Biologist Sentenced to Prison for Stealing Hundreds of Thousands of Dollars from San Diego ZooRead the Press Release
Special Assistant U.S. Attorney Jeffrey D. Hill (619) 546-7924
NEWS RELEASE SUMMARY – October 21, 2020
SAN DIEGO – Former San Diego Zoo biologist Matthew John Anderson was sentenced in federal court today to six months in prison for embezzling hundreds of thousands of dollars from the San Diego Zoo.
In March, Anderson pleaded guilty to a theft charge, admitting that he created dozens of fake invoices, often in the names of fictitious vendors, and submitted them to the zoo for payment for products never purchased or received. Anderson also submitted invoices for personal expenses. The zoo paid these invoices by, in some cases, sending money to accounts controlled by Anderson, and in others by sending payments to third parties who kicked back the bulk of the payments to Anderson. Over the course of eight years of fraud, Anderson caused the zoo to suffer a total loss of $236,682.86.
In imposing sentence, Chief U.S. District Judge Larry A. Burns noted that Mr. Anderson not only abused a position of trust, but that he did so “over the long haul” and that this was not a case of one discreet lapse of judgment. Anderson, 50, appeared for his sentencing hearing having tendered full restitution to the zoo. In imposing a custodial term, Chief Judge Burns noted that “you cannot systematically steal over a period and just say that you will pay it back.” The judge then remanded Mr. Anderson into custody to serve his term.
Anderson worked for the zoo for more than 17 years, starting as a research fellow and ultimately serving as the Director of Behavioral Biology for the zoo’s Institute for Conservation Research until the zoo terminated his employment in late 2017. A citizen of the United Kingdom, Anderson faces likely deportation as a consequence of his sentence.
“For years, this defendant took advantage of the trust of one of our city’s most beloved institutions,” said U.S. Attorney Robert Brewer. “His theft compromised the San Diego Zoo’s world-renowned conservation work, made possible by government grants, charitable donations and the work of thousands of unpaid volunteers.” Brewer praised the excellent work of prosecutor Jeffrey Hill and FBI agents.
“The FBI unraveled a years-long plot to steal money from San Diego's prized institution by a trusted employee,” said FBI Special Agent in Charge Suzanne Turner. “Today, the zoo has been made whole again through payment of full restitution and Mr. Anderson was forced to face justice for his fraudulent actions through his prison sentence.”
DEFENDANT Case No. 20-CR-0812-LAB
Matthew John Anderson Ramona, California Age: 50
SUMMARY OF CHARGES
Theft or conversion concerning programs receiving federal funds – 18 U.S.C. § 666
INVESTIGATING AGENCIES
Federal Bureau of Investigation
San Diego Man Charged with Aiming a Laser Pointer at Police Helicopter During a ProtestRead the Press Release
NEWS RELEASE SUMMARY – October 20, 2020
SAN DIEGO – An indictment was unsealed in federal court today charging San Diego resident Stephen Glenn McLeod with knowingly aiming the beam of a laser pointer at an aircraft on August 28, 2020.
McLeod was arraigned in federal court today. At the hearing, Assistant U.S. Attorney Jonathan Shapiro told U.S. Magistrate Allison Goddard that McLeod is alleged to have pointed a laser pointer at a San Diego Police Department helicopter multiple times while participating in a protest on August 28, 2020.
U.S. Magistrate Judge Goddard set a personal appearance bond of $35,000, guaranteed by two financial responsible adults. The next hearing is scheduled for November 20, 2020 at 1:30 p.m. before U.S. District Court Judge Janis Sammartino.
“We support everyone’s right to peacefully assemble and protest. Aiming a laser pointer at a police helicopter, however, is highly dangerous and a serious violation of federal law,”
said U.S. Attorney Robert Brewer.“When aimed at an aircraft, a beam of light from a handheld laser can illuminate a cockpit, disorienting and temporarily blinding the pilots,” said Suzanne Turner, Special Agent in Charge of FBI San Diego. “It's a federal felony that the FBI and our law enforcement partners take very seriously.”
DEFENDANT Case Number 20CR3106JLS
Stephen Glenn McLeod Age: 38 San Diego
SUMMARY OF CHARGES
Aiming a Laser Pointer at an Aircraft – Title 18, United States Code, Section 39A
Maximum penalty: Five years in prison, $250,000 fine
AGENCY
San Diego Police Department
Federal Bureau of Investigation
Joint Terrorism 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.
U.S. Attorney Announces Resources for Voter Intimidation and Election FraudRead the Press Release
Assistant U. S. Attorney Christopher P. Tenorio (619) 909-7556
NEWS RELEASE SUMMARY – October 19, 2020
U.S. Attorney Robert Brewer announced today that Assistant U.S. Attorney Christopher P. Tenorio will lead the efforts on behalf of the U.S. Attorney’s Office in connection with the Justice Department’s nationwide Election Day Program for the upcoming general election on November 3, 2020.
Mr. Tenorio has been appointed to serve as the District Election Officer for the Southern District of California, which includes San Diego and Imperial Counties. He will be responsible for overseeing the district’s handling of complaints of voting rights abuses and election fraud, in consultation with Justice Department Headquarters in Washington, D.C.
“Every citizen must be able to vote without interference or discrimination,” Brewer said. “The Department of Justice is committed to protecting the integrity of the election process, stopping fraud, and making sure votes are not stolen.”
The Department of Justice has an important role in deterring and responding to election fraud and discrimination at the polls. The Department’s long-standing Election Day Program aims to enhance this role and ensure public confidence in the integrity of the election process. To this end, the Department is providing local points of contact for the public to report possible election fraud and voting rights violations through Election Day.
Federal law prohibits intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. Federal law also protects voters from intimidation and harassment, including challenges at polling places designed to interrupt or intimidate voters, or the photographing or videotaping of voters under the pretext of uncovering illegal voting. Federal law also protects the right of voters to mark their own ballot or to receive assistance by a person of their choice to overcome a disability or illiteracy.
In order to respond to complaints of election fraud or voting rights concerns during the voting period that ends on November 3, 2020, and to ensure that such complaints are directed to the appropriate authorities, United States Attorney Brewer stated that AUSA/DEO Tenorio will be on duty while the polls are open. The public can reach him at (619) 909-7556.
In addition, the FBI will have special agents and an Election Crimes Coordinator available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses. The public can contact the San Diego FBI at (858) 320-1800. The public may also contact the Department of Justice’s Civil Rights Division in Washington, D.C. at (800) 253-3931 or (202) 307-2767, or by complaint form at https://civilrights.justice.gov/.
The public is advised, however, to call 911 immediately in the case of a crime of violence or active intimidation. State and local police have primary jurisdiction over polling places and can generally respond more quickly in an emergency. Federal authorities can respond thereafter.
Brewer said, “Ensuring free and fair elections depends in large part on the cooperation of the American electorate. It is imperative that those who have specific information about discrimination or election fraud make that information available to my Office, the FBI, or the Civil Rights Division.”
El Cajon Tax Preparers Indicted for Filing Hundreds of False Tax ReturnsRead the Press Release
NEWS RELEASE SUMMARY – October 19, 2020
SAN DIEGO – Two former tax preparers based in El Cajon, California were arraigned in federal court today on an indictment alleging they participated in a tax return scam that resulted in the filing of hundreds of false returns and the request of more than $1.4 million in bogus tax refunds.
Mimi Bozzo, also known as Mimi Morrison, and Vincent Bozzo, are charged in the indictment with conspiracy to defraud the United States and aiding and assisting the filing of false income tax returns. According to the indictment, Mimi and Vincent Bozzo owned and operated a tax return preparation business in El Cajon, California, under various business names, including “All Pro Services” and “A to Z Tax Preparation.”
The indictment alleges that from at least January 2012 through April 2018, Mimi and Vincent Bozzo knowingly prepared and filed approximately 500 federal income tax returns that contained false Schedule C business income and false Schedule C business expenses resulting in fraudulently inflated tax credits and refunds. Mimi and Vincent Bozzo allegedly charged their customers approximately $800 per tax return. As part of the tax fraud, Mimi and Vincent Bozzo allegedly transported or accompanied some customers to check-cashing businesses to cash their falsely inflated tax refund checks, and at times, demanded from the customers a portion of the cashed refund check in addition to the tax preparation fees that had already been deducted from the inflated tax refunds. According to the indictment, Mimi and Vincent Bozzo also used their customers to recruit new clients in order to prepare fraudulent returns, paying a fee for each new referral.
The indictment further alleges that Mimi and Vincent Bozzo solicited and obtained the false income from taxpayers by encouraging the creation of receipts for income that the taxpayers did not earn in order to inflate tax credits and refunds that the taxpayers were not entitled. Mimi and Vincent Bozzo allegedly solicited and obtained personal identifying information of taxpayers by passing out flyers and business cards, which offered people assistance in obtaining money from the government.
To further their tax fraud, Mimi and Vincent Bozzo allegedly prepared tax returns using taxpayers’ personal identifying information and including false and fraudulent information as to income, expenses, deductions and credits. Of note, the indictment alleges that Mimi and Vincent Bozzo falsely claimed on the tax returns that the taxpayers had engaged in the businesses listed on Schedule C, such as household employment. As the indictment alleges, Mimi and Vincent Bozzo’s conspiracy and tax fraud caused the submission of false claims to the IRS for tax refunds totaling at least approximately $1.4 million and caused the IRS to disperse the refunds to the taxpayers.
“Tax fraud continues to be a growing problem plaguing our community,” said United States Attorney Robert Brewer. “When tax fraud scams are brought to our attention, we will diligently work together with the IRS to unravel the fraud and prosecute those responsible for defrauding the IRS and honest taxpayers in order to protect the integrity of our tax system.”
“Over the course of several years the Bozzos knowingly prepared and filed hundreds of false tax returns,” said Ryan L. Korner, IRS Criminal Investigation Special Agent in Charge of the Los Angeles Field Office. “This is yet another example of suspect tax preparers taking advantage of fellow Americans. American taxpayers who file accurate, honest and timely returns can be assured that the government will hold accountable those who don't.”
At the end of the arraignment, Mimi and Vincent Bozzo were ordered to post bond before returning to their home in Texas. The next hearing is scheduled for December 3, 2020 at 9:00 a.m. before U.S. District Judge Gonzalo P. Curiel.
DEFENDANTS Criminal Case No. 20CR2944-GPC
Mimi Bozzo Age: 60 Trinity, Texas
Vincent Bozzo Age: 60 Trinity, Texas
SUMMARY OF CHARGES:
Count 1 – Title 18, United States Code, Section 371 B Conspiracy to Defraud the United States
Maximum penalties: 5 years in prison, $250,000 fine, 3 years of supervised release.
Counts 2-19 – Title 26, United States Code, Section 7206(2) – Aiding or Assisting the Filing of False Income Tax Returns
Maximum penalties: Three years in prison per count, $250,000 fine per count, one year of supervised release per count
INVESTIGATING AGENCIES
Internal Revenue Service-Criminal Investigation
*An indictment itself is not evidence that the defendants committed the crimes charged. The defendants are presumed innocent until the Government meets its burden in court of proving guilt beyond a reasonable doubt.
Multi-Agency Narcotics Operation Nets Large Quantities of Methamphetamine, Cocaine, and other Illicit DrugsRead the Press Release
Assistant U.S. Attorney Joseph Smith (619) 546-8299
NEWS RELEASE SUMMARY – October 15, 2020
SAN DIEGO – U.S. Attorneys Robert S. Brewer Jr. of the Southern District of California and Nicola T. Hanna of the Central District of California announced today that through a coordinated operation conducted over the last three months, hundreds of kilograms of dangerous narcotics were taken off of the streets of Southern California.
State and federal law enforcement agencies worked together to plan and execute this operation, which culminated in a one week coordinated surge in mid-September which resulted in the seizures of approximately 778 kilograms of methamphetamine, 268 kilograms of cocaine, 30 kilograms of fentanyl, 31 kilograms of heroin, and $281,000 in U.S. currency.
In addition to the substantial seizures, six individuals were arrested and charged with various federal drug trafficking charges in the Central District of California out of the International Narcotics, Money Laundering, and Racketeering Section, and numerous additional individuals were charged with federal drug trafficking offenses in the Southern District of California.
The operation focused on identifying narcotics entering the United States though numerous Southern California ports of entry and then being transported to various locations throughout Southern California for further distribution around the country. Numerous High Intensity Drug Trafficking Area (HIDTA) teams from Southern California, comprised of both state and federal law enforcement officers and agents, worked throughout the operation to identify and arrest individuals involved in the illegal activity and to seize narcotics and narcotics proceeds.
“Drug traffickers and their networks are not bound by city or county boundaries, and neither are we,” said U.S. Attorney Brewer. “With the combined resources of our federal, state and local law enforcement partners, our reach is far and wide. We are seizing the drugs and dismantling the networks that are injecting our neighborhoods with poison.” Brewer praised Assistant U.S. Attorney Joseph Smith and his team of prosecutors, as well as law enforcement partners, for their commendable work on this operation.
“This operation underscores our significant – and successful – efforts to disrupt the smuggling routes used by international drug cartels to deliver narcotics to the United States,” said U.S. Attorney Hanna. “This concerted effort allowed us to identify shipments coming in from Mexico and being delivered to stash houses across the region. As a result of the excellent work of law enforcement agents, we were able to make substantial seizures and arrest individuals who played important roles in the distribution chain.”
This effort is part of an ongoing Organized Crime Drug Enforcement Task Forces (OCDETF) operation jointly undertaken by law enforcement agencies and prosecutors in the Southern and Central Districts of California. OCDETF identifies, disrupts, and dismantles the highest-level transnational criminal organizations that threaten the United States using a prosecutor-led, intelligence driven, multi-agency approach to combat transnational organized crime.
OCDETF Director Adam W. Cohen said, “We must salute the coordinated efforts led by dedicated OCDETF prosecutors from these two U.S. Attorney’s Offices to leverage our multi-agency strengths against these criminal networks.”
The three-month operation was coordinated by Assistant U.S. Attorney Joseph Smith, Chief of the OCDETF Section in San Diego, and Assistant U.S. Attorney Carol Alexis Chen, Chief of the International Narcotics, Money Laundering, and Racketeering Section in Los Angeles.
INVESTIGATING AGENCY
Homeland Security Investigations
Customs and Border Protection, Office of Field Operations
Drug Enforcement Administration
San Diego County Sheriff’s Department
LA IMPACT
SD-NET
U.S. Attorney Announces More than $1.2 Million in Grants to Bolster Forensic Capacity in San DiegoRead the Press Release
Assistant U. S. Attorney Cindy Cipriani (619) 546-9608
NEWS RELEASE SUMMARY – October 14, 2020
SAN DIEGO, CA – U.S. Attorney Robert Brewer today announced $1,222.116 in Department of Justice grants to San Diego agencies to fund crime laboratories, decrease DNA backlogs, support basic and applied forensic research, and help law enforcement identify missing persons. The grants, awarded by the Department’s Office of Justice Programs, are part of $192 million in funding to advance forensic science nationwide.
“Developments in forensic science have given investigators an extraordinary array of tools that can be enlisted to solve crimes and bring answers to victims and survivors, often after many years and even decades,” said OJP Principal Deputy Assistant Attorney General Katharine T. Sullivan. “These investments in crime-fighting technology, from DNA analysis to drug toxicology to forensic anthropology, will help identify and convict perpetrators, ensure justice for innocent victims and keep communities safe by deterring future criminal activity.”
“DOJ’s significant investment in new technologies is an important piece of the puzzle posed by cold cases,” said U.S. Attorney Robert Brewer. “We must leave no stone unturned in our effort to increase public safety and deliver accountability and closure to victims.”
Since 2004, the Office of Justice Programs has received an annual appropriation for DNA and other forensic science activities. The funding, administered through OJP’s Bureau of Justice Assistance and National Institute of Justice, supports DNA analysis, laboratory capacity enhancement and forensic science research that provides knowledge and tools to improve the quality and practice of forensic science.
U.S. Attorney Brewer announced the following sizable grants to San Diego agencies:
- $376,004 to the City of San Diego and $376,112 to San Diego County funded by DOJ’s DNA Capacity Enhancement and Backlog Reduction Program, which has provided funding to states and local jurisdictions since 2011. The funding is awarded to states, then divided among eligible crime labs within the state. The awards assist with increasing the capacity for DNA analysis and the number of DNA samples, thereby decreasing the backlog and turnaround time for DNA analysis. Recipients may use funding to upgrade laboratories and purchase equipment and supplies, such as DNA sample collection kits.
- $470,000 to the County of San Diego District Attorney for the prosecution of violent crime cold cases where DNA from a suspect has been identified. These funds are designed to decrease the number of unresolved violent crime cold cases, using advances in forensic technologies that are resulting in successful analysis of evidence once thought to be unsuitable for testing.
For a complete list of individual grant programs, award amounts, and jurisdictions that will receive funding, visit https://www.ojp.gov/sites/g/files/xyckuh241/files/media/document/forensics-factsheet-102020.pdf. More information about OJP and its components can be found at www.ojp.gov.
# # #
Sinaloa Cartel Drug Trafficker and Money Launderer Sentenced to More than 13 Years in PrisonRead the Press Release
Assistant U. S. Attorney Larry Casper (619) 546-6734
NEWS RELEASE SUMMARY –October 14, 2020
SAN DIEGO – Oscar Rodriguez-Guevara of Tijuana, Mexico was sentenced today to 162 months in prison for smuggling multi-kilogram quantities of cocaine and methamphetamine into the United States from Mexico and then laundering the illicit proceeds, all for the Sinaloa Cartel. U.S. District Judge Roger T. Benitez also imposed a $50,000 fine.
Rodriguez, known as “El Guero Chihuahua” in the Mexican press, managed an extensive transportation network for the cartel that smuggled cocaine, methamphetamine and other drugs from Mexico, northbound through Southern California ports of entry in vehicles with hidden compartments. In turn, he received the proceeds from cartel drug sales at an exchange house in Tijuana, Mexico. He smuggled the cash back through the border, southbound into Mexico.
Rodriguez was extradited from Mexico to San Diego in April 2019. In his plea agreement, Rodriguez admitted to coordinating the movement of drug proceeds to Mexico and supervising, for the extensive trafficking network, the laundering of these proceeds. Rodriguez coordinated the movement of the cocaine and methamphetamine to the United States and worked closely with Omar Ayon-Diaz, who was previously sentenced in this case, to receive the drug proceeds at “Tanga,” a Tijuana exchange house owned by Ayon Diaz. Rodriguez admitted that these proceeds were also intended to promote the continued importation and trafficking of drugs into the United States.
According to his plea agreement, Rodriguez admitted that he arranged the smuggling of 100 or more kilograms of cocaine as well as methamphetamine into the United States during an 11-month period. Through the wiretap investigation leading to this prosecution, federal agents intercepted Rodriguez’s conversations as he communicated about the smuggling of a load of drugs and firearms from the interior of Mexico to an area of Tijuana near the United States-Mexico border. On another occasion, agents intercepted communications that led to a search warrant at a stash location in San Diego at which more than 27 kilograms of cocaine were seized. On that occasion, Rodriguez messaged an associate explaining that “[t]hey hit my office…the one inside” (meaning in the United States).
“These drugs are destroying lives through addiction and violence,” said U.S. Attorney Robert Brewer. “It is no small victory to bring justice to drug traffickers – particularly those who act on behalf of one of the world’s most violent and prolific drug cartels.” Brewer thanked prosecutor Larry Casper and agents from Homeland Security Investigations for their excellent work on this case.
In addition to Rodriguez-Guevara and the defendants in this case, approximately twenty other individuals have entered guilty pleas and been sentenced previously in related cases. Those cases have involved individuals based in the United States or who frequently crossed into the United States and served as money couriers, drug couriers and drug stash house operators and who were part of, or related to, the same money laundering and drug trafficking organization.
Five other defendants have previously entered guilty pleas in this case and been sentenced (Omar Ayon-Diaz; Osvaldo Contreras-Arriaga; Joel Acedo-Ojeda; Cesar Hernandez-Martinez and Gibran Rodriguez-Mejia). Another defendant, Bianca Acedo-Ojeda, was also extradited from Mexico to face the same international money laundering conspiracy charges and is presently pending trial.
The U.S. Attorney’s Office is working this matter together with the Money Laundering and Asset Recovery Section of the Criminal Division of the Department of Justice in Washington, D.C.
DEFENDANT Case Number 15-cr-950
Oscar Rodriguez-Guevara Age: 41 Tijuana, Mexico
SUMMARY OF CHARGES
Conspiracy to Commit International Money Laundering, in violation of Title 18, U.S.C., Sec. 1956(a)(2)(B)(i) and (h).
Maximum Penalties: Twenty years in prison; $500,000 fine or twice the value of the funds involved.
SUMMARY OF CHARGES/SENTENCES FOR OTHER DEFENDANTS
Prior Guilty Pleas and Sentences
Cesar Hernandez-Martinez: Pleaded guilty to Conspiracy to Commit International Money Laundering, in violation of Title 18, U.S.C., Sec. 1956(a)(2)(B)(i); sentenced to 137 months custody and $250 fine.
Gibran Rodriguez-Mejia: Pleaded guilty to Conspiracy to Commit International Money Laundering, in violation of Title 18, U.S.C., Sec. 1956(a)(2)(B)(i) and (h); sentenced to 96 months in custody and $500 fine.
Joel Acedo-Ojeda: Pleaded guilty to Conspiracy to Commit International Money Laundering, in violation of Title 18, U.S.C., Sec. 1956(a)(2)(B)(i) and (h); sentenced to 135 months custody and $20,000 fine.
Omar Ayon-Diaz: Pleaded guilty to Conspiracy to Commit International Money Laundering, in violation of Title 18, U.S.C., Sec. 1956(a)(2)(B)(i) and (h); sentenced to 120 months custody and $15,000 fine.
Osvaldo Contreras-Arriaga: Pleaded guilty to Conspiracy to import cocaine, in violation of Title 21, U.S.C., Secs. 952, 960 and 963; sentenced to 132 months custody and $1,000 fine.
INVESTIGATING AGENCY
Homeland Security Investigations
North Park Gang Member, Who Was Previously Convicted of RICO, Pleads Guilty to Sex Trafficking of a MinorRead the Press Release
Assistant U. S. Attorney Joseph Orabona (619) 546-7951
NEWS RELEASE SUMMARY – October 13, 2020
SAN DIEGO, CA – A member of a North Park based gang, who was previously convicted of participating in a conspiracy to engage in racketeering enterprise (RICO) involving sex trafficking of minors and adults, pleaded guilty to once again being involved in sex trafficking.
Jonathan Devon Price, aka Lil’ TY, who was a member of Black MOB, previously pled guilty to RICO in October 2015, where he admitted he was involved transporting females from San Diego, California to El Paso, Texas for purposes of prostitution. He also admitted to transporting an adult female in San Diego, California to a hotel to engage in prostitution after an online ad had been posted.
Today, Price admitted that in November 2019, he transported a minor in San Diego, California to meet with “johns” for the purpose of her to engage in commercial sex acts. In addition, Price caused online advertisements to be posted offering the minor for commercial sex. An undercover sting operation conducted by members of the San Diego Human Trafficking Task Force resulted in the arrest of Price, who was transporting the minor for prostitution.
Price also admitted during his guilty plea that he used fraud, force and coercion against another adult female in order to cause her to engage in commercial sex acts. This conducted occurred between June 2018 and November 2019, while Price was on federal supervised release. As a result of his criminal conduct in November 2019, Price has violated his supervised release in his prior RICO case, Criminal Case No. 13CR4510-JAH.
“Sex trafficking is a crime that causes devastating long-term effects for victims, especially minors,” said U.S. Attorney Robert Brewer. “Our office will continue to vigorously enforce federal laws that are in place to protect women and girls from the pain, humiliation and suffering associated with sex trafficking.” Brewer praised prosecutor Joseph Orabona and members of the San Diego Human Trafficking Task Force for their excellent work on this case.
A sentencing hearing is scheduled for January 4, 2021 at 10:00 a.m. before the U.S. District Judge John A. Houston. Price has been detained in custody since his arrest in November 2019.
This case was prosecuted by Assistant U.S. Attorney Joseph J.M. Orabona. This guilty plea is the result of the collaborative work by the FBI and the San Diego Police Department.
DEFENDANTS Case Numbers: 20CR0852-JAH
Jonathan “Lil’ TY” Devon Price 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, Sex Offender Registration
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
DOJ Charges More Than 14,200 Defendants with Firearms-Related Crimes in FY20; Southern District of California Charged 107 DefendantsRead the Press Release
Assistant U. S. Attorneys Andrew R. Haden (619) 546-6961 and Timothy D. Coughlin (619) 546-6768
NEWS RELEASE SUMMARY – October 13, 2020
SAN DIEGO – The Department of Justice announced today it has charged more than 14,200 defendants with firearms-related crimes during Fiscal Year (FY) 2020, despite the challenges of COVID 19 and its impact on the criminal justice process.
These cases have been a Department priority since November 2019 when Attorney General William P. Barr announced his commitment to investigating, prosecuting, and combatting gun crimes as a critical part of the Department’s anti-violent crime strategy. These firearms-related charges are the result of the critical law enforcement partnership between United States Attorneys’ Offices and the Bureau of Alcohol, Tobacco, Firearms and Explosives, led by Acting Director Regina Lombardo, who has made firearms-related investigations a priority.
“The number one priority of government is to keep its citizens safe,” said Attorney General Barr. “By preventing firearms from falling into the hands of individuals who are prohibited from having them, we can stop violent crime before it happens. Violating federal firearms laws is a serious crime and offenders face serious consequences. The Department of Justice is committed to investigating and prosecuting individuals who illegally buy, sell, use, or possess firearms. Reducing gun violence requires a coordinated effort, and we could not have charged more than 14,000 individuals with firearms-related crimes without the hard work of the dedicated law enforcement professionals at the ATF, our U.S. Attorneys’ Offices across the country, and especially all of our state and local law enforcement partners.”
“Protecting the public from violent crime involving firearms is at the core of ATF’s mission,” commented ATF Acting Director Regina Lombardo. “Every day the men and women of ATF pursue and investigate those who use firearms to commit violent crimes in our communities, many of whom are prohibited from possessing firearms from previous convictions. ATF, in collaboration with the U.S. Attorneys’ Offices across the nation, is committed to bringing these offenders to justice for their egregious and violent criminal acts.”
“Each violent crime committed with a gun has a ripple effect that causes an entire community to feel vulnerable and fearful. For that reason, reducing gun violence and enforcing federal firearms laws remain top priorities in this district,” said U.S. Attorney Robert Brewer. “We are determined to make our communities safer by aggressively pursuing any individual who has acquired, possessed, or used a firearm in violation of federal law.”
Of the more than 14,200 defendants charged, 107 were prosecuted for federal firearms violations by the U.S. Attorney’s Office in the Southern District of California.
Under federal law, it is illegal to possess a firearm if you fall into one of nine prohibited categories including being a felon, illegal alien, or unlawful user of a controlled substance. Further, it is unlawful to possess a firearm in furtherance of a drug trafficking offense or violent crime. It is also illegal to purchase – or even to attempt to illegally purchase - firearms if the buyer is a prohibited person or illegally purchasing a firearm on behalf of others. Lying on ATF Form 4473, which is used to lawfully purchase a firearm, is also a federal offense.
In the Southern District of California, the majority of firearms cases were brought against felons who unlawfully possessed firearms. In the last year, however, there was also an increased effort to prosecute individuals who were in possession of firearms in violation of a domestic violence restraining order.
For example, in October 2019, a San Diego Superior Court judge imposed a domestic violence restraining order upon Daniel Anthony Fischbeck. According to the criminal complaint, the restraining order explicitly prohibited Fischbeck from possessing firearms. On January 1, 2020, Fischbeck was arrested after violating the restraining order for the second time. At the time of Fischbeck’s arrest, a Springfield XD .45 caliber handgun was found in his car. He was then charged federally for several federal firearms offenses. Fischbeck recently pleaded guilty in federal court to being a methamphetamine addict while in possession of the Springfield handgun, in violation of Title 18, United States Code, Section 922(g)(3). Fischbeck is set to be sentenced in federal court on November 2, 2020. U.S. v. Fischbeck, 20-CR-479-LAB.
The focus on domestic violence and firearms is supported by recent crime data. In September, a report by the San Diego Association of Governments, also known as SANDAG, revealed that the San Diego region saw a 3 percent increase in domestic violence in the first half of 2020 over the same period last year. SANDAG’s data shows more notable increases in domestic violence in certain local communities: Santee (18 percent); El Cajon (18 percent); and National City (74 percent). Meanwhile, statistics cited by the National Coalition Against Domestic Violence indicate that one in three female murder victims are killed by intimate partners and that an abuser’s access to a firearm increases the risk of femicide by at least 400 percent.
The Department of Justice is committed to prosecuting these firearms offenses as well as using all modern technologies available to law enforcement such as the National Integrated Ballistic Information Network, known as NIBIN, to promote gun crime intelligence. Keeping illegal firearms out of the hands of violent criminals will continue to be a priority of the Department of Justice and we will use all appropriate, available means to keep the law abiding people of this country safe from gun crime.
For more information on the lawful purchasing of firearms, please see: https://www.atf.gov/qa-category/atf-form-4473.
CEO Charged with Fraud in Connection with Construction of Military and Humanitarian Projects in AfricaRead the Press Release
Assistant U.S. Attorneys Mark W. Pletcher (619) 546-9714 and Andrew J. Galvin (619) 546-9721
NEWS RELEASE SUMMARY – October 13, 2020
SAN DIEGO – Micheline Pollock was indicted by a federal grand jury for participating in a scheme to defraud the United States Army Corps of Engineers (USACE) and the U.S. Navy Facilities Engineering Command (NAVFAC) in connection with construction contracts for military and humanitarian projects across Africa.
According to the 98-count indictment, Pollock was the chief executive officer of Dover Vantage, a U.S. construction firm that specialized in expeditionary projects in Africa. Between 2011 and 2018, Dover Vantage competed for and won construction contracts for various USACE and NAVFAC projects in Africa, including a maternity ward and a school for the deaf in Togo, and a military aircraft hangar in Niger.
These USACE projects were undertaken in support of the United States Africa Command (AFRICOM), one of 10 combatant commands within the U.S. Department of Defense. AFRICOM’s mission is to support diplomacy and development with partner governments and militaries, to apply pressure to various violent extremist organizations, to increase security and U.S. influence, and to protect U.S. government personnel and property. To this end, AFRICOM spends billions of dollars in contracts, grants, and other funding for African militaries to increase their capabilities in fighting violent extremists such as Boko Haram, Al-Shabbab and ISIS. AFRICOM also funds humanitarian assistance projects to benefit populations in areas of Africa where violent extremist groups recruit membership
During the tenure of these contracts, Pollock and other individuals at Dover Vantage submitted fraudulent quality control plans with résumés of fictitious employees; fabricated quality control checklists, certifying quality control work that was never performed; fraudulent concrete strength test results; and fraudulent claims for construction that was never performed or that did not adhere to specification. As a result of the fraudulent conduct, many of the structures constructed by Dover Vantage were so poorly constructed that they collapsed, including the aircraft hangar in Niger and a training facility in Senegal. Most of the other structures constructed by Dover Vantage are now unusable. Pollock’s conduct has required USACE to reissue contracts, repair damaged buildings, and reduce operating capacity.
This case is the first arising from the Africa Strike Force initiative out of the Southern District of California, developed to combat fraud and corruption as the United States expends resources across Africa.
“To protect the American and coalition warfighter, vigilance does not end at our borders,” said U.S. Attorney Robert Brewer. “Where our military goes, we go, whether to support and defend military construction dollars or those dollars spent to improve the lives of the communities we assist. To combat fraud, waste, and abuse, we’ve toiled in Iraq, Afghanistan, and Asia-Pacific, and now, through our participation in the Africa Strike Force, we turn our substantial attention to Africa. Corrupt fraudsters in Africa beware, the bright light of justice now shines directly on you.” Brewer praised Assistant U.S. Attorneys Mark W. Pletcher and Andrew J. Galvin and agents from Defense Criminal Investigative Service and Department of the Army, Criminal Investigative Command, for their excellent work on this case.
“Those who seek to blatantly defraud the American taxpayer and jeopardize the safety of the American warfighter and then hide behind an elaborate web of lies will be held accountable” said Stanley A. Newell of Defense Criminal Investigative Service, Transnational Operations Field Office. “Even in the most distant points on the globe, DCIS works tirelessly with our investigative partners of the U.S. Army Criminal Investigative Command and the United States Attorney’s Office to ferret out this type of egregious fraud and to protect the integrity of the Department of Defense procurement system.”
Pollock was arrested on September 22, 2020 in Tbilisi, Georgia by Georgian authorities based on a provisional arrest warrant issued at the request of the United States. She is currently in custody in Georgia and awaiting extradition proceedings.
This case is being investigated by the Defense Criminal Investigative Service, European Post of Duty in Germany, and the US Army Criminal Investigation Command, Major Procurement Fraud Unit, European Fraud Resident Agency. Additional investigative assistance was rendered domestically and internationally by the Naval Criminal Investigative Service. Substantial ongoing assistance in prosecuting this case has been provided by the Department of Justice’s Office of International Affairs.
The U.S. Attorney’s Office for the Southern District of California specially acknowledges the assistance provided by our international partners in Georgia, including the Office of the Prosecutor General of Georgia, Georgia Border Police, Isani Police Department, and the Isani Prosecutor’s Office.
DEFENDANT: Case Number 20-CR-3167-DMS
Micheline Pollock Age: 50 Dubai, United Arab Emirates
SUMMARY OF CHARGES
Count 1 -- Conspiracy to Defraud the United States – Title 18, U.S.C., Section 371
Counts 2-35 -- Wire Fraud – Title 18, U.S.C., Section 1343
Counts 36-98 -- Aggravated Identity Theft – Title 18, U.S.C., Section 1028A
AGENCY
Department of Defense, Defense Criminal Investigative Service
Department of the Army, Criminal Investigative Command
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
San Diego Man Pleads Guilty to Three RobberiesRead the Press Release
For Further Information, Contact:
Assistant U. S. Attorney Matthew Brehm (619) 546-8983SAN DIEGO – Ryan W. Nelson of San Diego pleaded guilty in federal court today to three robberies, including two bank robberies and the armed robbery of a shoe store.
Nelson entered his guilty pleas to the three counts before U.S. Magistrate Judge Michael S. Berg. Nelson admitted that on July 29, 2019, at approximately 8:45 a.m., he entered the Shoe Palace, located within the Plaza Bonita Mall in National City, dressed as a construction worker with a safety vest, safety glasses, and a hard hat.
According to Nelson’s plea agreement, he told a Shoe Palace clerk that he was working on construction in the store above Shoe Palace and needed to inspect an electrical breaker panel in a room in the back of the store. When Nelson returned to the front of the store, he approached a clerk, who was pregnant at the time, and pointed a handgun at her. He demanded cash from the cash register, stating, "Give me all the money."
The clerk gave Nelson access to the cash register, and he took approximately $600 from the register and a nearby safe. After he took the cash, Nelson told the clerk, "Don’t call anyone or I will be back in five minutes!" He then fled the store, walked outside the mall, removed his construction worker disguise, retrieved a backpack hidden outside the mall, and changed his shirt.
Nelson also admitted that on August 15, 2019, at approximately 10:10 a.m., he entered the Vons Supermarket at 6155 El Cajon Boulevard, San Diego, and approached the teller window of the U.S. Bank branch located inside. Nelson pretended to talk on his cell phone but in fact gave the teller step-by-step verbal commands, demanding the teller to give him money by stating something similar to, "Grab a bag. Start with the hundreds. Put all the money in the bag and give it to me, or I’m gonna shoot." The teller complied with demands and provided Nelson with money from his teller drawer, totaling approximately $1,372. Prior to fleeing, Nelson told the victim teller, "Wait seven minutes, I’ve got someone in the store." He then turned and exited the bank area, leaving out the east exit of the Vons Supermarket.
Nelson at the U.S. Bank teller window at Vons Supermarket on August 15, 2019Nelson further admitted on August 23, 2019, at approximately 11:56 a.m., he entered the Vons Supermarket at 8011 University Avenue, La Mesa, California, and approached the teller window of the Wells Fargo branch located inside. Nelson pretended to talk on his cell phone but in fact demanded money from the three victim tellers by giving step-by-step verbal commands, stating something similar to, "Start with your 100s and put them in a bag, or I’ll start shooting." The tellers complied with the demands and provided Nelson with a bag containing money from each of the teller’s drawers totaling approximately $9,600. He then left out of the Vons Supermarket’s main entrance.
Nelson at the Wells Fargo teller window at Vons Supermarket on August 23, 2019Nelson also admitted that on August 29, 2019, FBI agents executed a federal search warrant at his residence and found a black bomber jacket, dark colored pants with white stripes down the sides, a navy blue-colored backpack, and a large black wristwatch, which were all items he was recorded wearing by surveillance cameras during, or just after, one of the bank robberies. FBI agents found a loaded .380 Smith and Wesson semi-automatic handgun in a drawer in Nelson’s room, which matched the description of the firearm he brandished during the Shoe Palace robbery. Agents also found $2,030 in cash on Nelson’s person, during his arrest.
"These robberies were meticulously planned for maximum impact on the victims and maximum payout," said U.S. Attorney Robert Brewer. "The threat of violence is a terrifying experience that these victims will never forget." Brewer praised prosecutor Matthew Brehm, FBI agents and officials with the San Diego, National City and La Mesa police departments for their excellent work on this case.
"The San Diego FBI Violent Crimes Task Force takes their work very seriously, said FBI Special Agent in Charge Suzanne Turner. "Robberies committed with the threat of violence and while using a firearm is a top priority for our agents and task force officers. The bank tellers, store workers, and San Diego citizens have the right to be free from violent criminal acts that threaten the safety and security of our community."
Nelson will be sentenced on January 11, 2021 at 9 a.m. by District Court Judge Cynthia Bashant.
This case is the result of the ongoing efforts of the Violent Crime and Human Trafficking (VCHT) Section. Formed in 2019 by U.S. Attorney Brewer, the VCHT is tasked with leading collaborations between federal and local law enforcement in the investigation and prosecution of cases involving violent crimes, firearms and gang cases; sex trafficking and child exploitation; civil rights, and labor trafficking. The VCHT Section oversees the Southern District of California Coordinators for Project Safe Neighborhoods, Human Trafficking, and Project Safe Childhood.
DEFENDANT Case Number 19cr3563-BASRyan W. Nelson Age: 38 San Diego, California
SUMMARY OF CHARGESBank Robbery – Title 18, U.S.C., Section 2113(a)
Maximum penalty: Twenty years in prison and $250,000 fine
Hobbs Act Robbery – Title 18, U.S.C., Section 1951
Maximum penalty: Twenty years in prison and $250,000 fine
AGENCYFederal Bureau of Investigations
San Diego Police Department
National City Police Department
La Mesa Police Department
Operator of Underground, International Financial Institution Pleads Guilty to Operating Unlicensed Money Transmitting BusinessRead the Press Release
For Further Information, Contact:
Assistant U.S. Attorneys Daniel C. Silva (619) 546-9713 and Mark W. Pletcher (619) 546-9714SAN DIEGO – Liang Zhou pleaded guilty in federal court today to operating an unlicensed money transmitting business. His guilty plea is the third in this ongoing investigation targeting operators of unlawful underground financial institutions that transfer 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 part of his agreement to plead guilty, Zhou agreed to forfeit $446,330 to the United States as property involved in the operation of his unlicensed money transmitting business.
As admitted in the plea agreement entered today before U.S. Magistrate Judge Karen S. Crawford, Zhou sold hard currency in U.S. dollars that he collected from various, and occasionally unknown, third parties. His customers were typically individuals with bank accounts in China who could not readily access cash in the United States due to capital controls that cap the amount of Chinese yuan that an individual can convert to foreign currency. Often these customers needed the money to gamble at the casinos in Las Vegas. Upon receiving U.S. dollars, the customers would transfer from a Chinese bank account an equivalent value in yuan, over their mobile phones in the United States, to a separate bank account in China designated by Zhou.
"Individuals and organizations operating outside the conventional financial system represent a clear and present danger to the international banking system and the ability of law enforcement to detect and confront the criminal activity," said U.S. Attorney Robert S. Brewer. He commended prosecutors Daniel Silva and Mark Pletcher, as well as federal agents from Homeland Security Investigations, IRS Criminal Investigation Las Vegas Financial Crimes Task Force and the Drug Enforcement Administration for their excellent work on this case.
Sentencing is scheduled for January 8, 2021 before U.S. District Court Judge Dana Sabraw.
DEFENDANTS Case Numbers 20-CR-3084Liang Zhou Las Vegas, NV Age: 37
SUMMARY OF CHARGES*Operation of Unlicensed Money Transmitting Business – Title 18, U.S.C., Section 1960
Maximum penalty: Five years in prison, forfeiture, and $250,000 fine
AGENCIESHomeland Security Investigations
IRS Criminal Investigation Las Vegas Financial Crimes Task Force
Drug Enforcement Administration
*The charges and allegations contained in an indictment or information are merely accusations, and the defendants are considered innocent unless and until proven guilty.
CEO of Local Financial Firm Pleads Guilty to Multi-Million Dollar Securities and Tax Fraud Scheme,Read the Press Release
For Further Information, Contact:
Assistant U.S. Attorney Daniel C. Silva (619) 546-9713 and DOJ Trial Attorney Kevin LowellSAN DIEGO – A La Jolla-based CEO pleaded guilty today to multiple felonies relating to the operation of his financial firm, Surf Financial Group, LLC, including conspiring to defraud shareholders of publicly traded companies, transmitting millions of dollars through an unlicensed money transmitting business, and falsifying multiple years of federal tax returns.
David John Nava, 62, pleaded guilty to one count of conspiracy to commit securities fraud, one count of operating an unlicensed money transmitting business (an "MTB"), and one count of tax fraud before U.S. Magistrate Judge Karen S. Crawford of the Southern District of California. Nava further agreed to forfeit more than $3.1 million for his crimes.
According to the plea agreement filed today, Nava managed Surf Financial Group, LLC despite federal securities regulators permanently banning and censuring him in 1994 from participating in the industry. Despite the ban, Nava admitted that he and other co-conspirators, including a licensed attorney, converted the debt of various publicly traded companies under materially false and fraudulent pretenses into unrestricted stock and then sold the stock for profit. Nava further admitted that he and his co-conspirators carried out their fraudulent scheme by entering into agreements where Nava sold shares of various entities’ stock on public exchanges after fraudulently claiming an exemption from the U.S. Securities and Exchange Commission’s ("SEC") registration requirements for selling securities in the public marketplace.
To conceal his involvement in the securities fraud scheme, Nava admitted using various nominees to ensure that, as Nava described it, he was a "ghost" in the transactions. Brokerage firms relied on the purported truth and accuracy of the attorney opinion letters in evaluating whether to clear the sale of shares of the restricted stocks on public markets. After the stocks were cleared for sale as a result of the false attorney opinion letters, Nava and his co-conspirators sold millions of shares of these stocks to the investing public.
"The defendant flagrantly engaged in an egregious fraud scheme on multiple levels—with securities for publicly traded companies; through the operation of an underground and unlicensed money transmitting business; and by misrepresenting his income for these schemes to the IRS," said U.S. Attorney Robert S. Brewer, Jr. "Law enforcement will vigorously pursue both the individuals and entities who commit fraud and operate outside the conventional financial system to carry out that fraud." U.S. Attorney Brewer commended Homeland Security Investigations, IRS Criminal Investigation, the Financial Investigations and Border Crimes Task Force, and the Department of Justice Criminal Division’s Fraud Section for their work on this case.
Nava further admitted that, from approximately 2017 to 2018, he operated an unlicensed MTB as a means to transmit financial proceeds from foreign locations, including Hong Kong and the Bahamas, as a way to disguise the source, origin, and control of the proceeds. As stated in his plea agreement, in 2017 Nava entered into a business partnership with at least one person who resided in Mexico and delivered dairy products for a living. To conceal Nava’s control over the MTB, Nava directed the Mexican resident to open a bank account at a financial institution in San Diego, and to transmit millions of dollars in funds as directed by Nava. Nava failed to register his MTB with the U.S. Treasury Department’s Financial Crimes Enforcement Network, or FinCEN, as required under federal law.
"This investigation is an excellent example of the work Homeland Security Investigations (HSI) continues to do in its fight against transnational criminal enterprises that seek to exploit the global financial system," said Cardell T. Morant, Special Agent in Charge of HSI in San Diego. "No matter how creative or sophisticated the scheme; HSI and our partners at IRS-CI will continue to work tirelessly to stamp out fraud and the illicit movement of money, even in these trying times."
"Twenty years after David John Nava was censured and permanently barred from the securities industry, he orchestrated a multimillion-dollar scheme and fabricated documents to circumvent SEC requirements in order to sell fraudulent securities and victimize innocent shareholders," said IRS Criminal Investigation Special Agent in Charge Ryan L. Korner. "Nava failed to report nearly $2.8 million in gross receipts from his scheme, thereby stealing over $609,000 in tax revenue from the United States. Today’s guilty plea evidences the hard work of our Special Agents and IRS Criminal Investigation’s commitment to working with our law enforcement partners to bring to justice fraudsters who repeatedly corrupt our securities exchanges and banking systems, while victimizing innocent Americans to feed their greed."
This case was investigated by Homeland Security Investigations, IRS Criminal Investigation, the Financial Investigations and Border Crimes Task Force, and the Department of Justice Criminal Division’s Fraud Section. Trial Attorney Kevin Lowell of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Daniel Silva of the U.S. Attorney’s Office for the Southern District of California are prosecuting the case.
Sentencing is scheduled to occur on January 8, 2021 before U.S. District Court Judge Dana Sabraw.
DEFENDANTS Case Number: 20-cr-03085-DMSDavid John Nava La Jolla, CA Age: 62
SUMMARY OF CHARGES*Conspiracy to Commit Securities Fraud – Title 18, U.S.C., Section 371
Maximum penalty: Five years in prison, restitution, and $250,000 fine
Operation of Unlicensed Money Transmitting Business – Title 18, U.S.C., Section 1960
Maximum penalty: Five years in prison, forfeiture, and $250,000 fine
Tax Fraud – Title 26 U.S.C. Section 7206(1)
Maximum Penalty: Three years in prison, and $100,000 fine
AGENCIES
Homeland Security Investigations
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.
CEO of Financial Firm Pleads Guilty to Running Multi-Million Dollar Securities and Tax Fraud Scheme, and Operating an Unlicensed Money Services BusinessRead the Press Release
A California-based man pleaded guilty today to conspiring with others to defraud shareholders of publicly traded companies, transmitting millions of dollars through the operation of an unlicensed money-services business in California, and falsifying multiple years of federal tax returns.
Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division, U.S. Attorney Robert S. Brewer for the Southern District of California, Special Agent in Charge Ryan L. Korner of IRS Criminal Investigation’s (IRS-CI) Los Angeles Field Office and Special Agent in Charge Cardell Morant of U.S. Immigration and Customs Enforcement’s Homeland Security Investigation (HSI) made the announcement.
David Nava, 62, of La Jolla, California, pleaded guilty to one count of conspiracy to commit securities fraud, one count of operating an unlicensed money transmitting business (MTB), and one count of tax fraud before U.S. Magistrate Judge Karen S. Crawford of the Southern District of California. Sentencing is set for Jan. 8, 2021.
According to the plea agreement filed in court, Nava was at all relevant times the CEO of the Surf Financial Group LLC (Surf Financial), a financial-services firm based in La Jolla, California. In 1994, federal securities regulators permanently banned and censured Nava from participating in the securities industry. Despite the two-decades’ old ban, Nava admitted in the plea agreement that he and other co-conspirators, including a licensed attorney, converted the debt of various publicly traded companies under materially false and fraudulent pretenses into unrestricted stock and then sold the stock for profit. Nava further admitted that he and his co-conspirators carried out their fraudulent scheme by entering into agreements in which Nava sold shares of various entities’ stock in public-market exchanges, only after fraudulently claiming an exemption from the U.S. Securities and Exchange Commission’s (SEC) registration requirements for selling securities in the public marketplace.
In the plea agreement, Nava admitted that he directed at least one attorney, as well other co-conspirators, to prepare fraudulent attorney opinion letters that were used to remove restrictions on various publicly traded companies’ stocks so that they could be freely traded on the open market. These fraudulent attorney opinion letters permitted Nava and his co-conspirators to sell their shares of stock at times of their choosing and unlawfully to circumvent the SEC’s regulations governing the offer and sale of securities.
To conceal his involvement in the scheme, Nava admitted he used various nominees to ensure that, as Nava described it, he was a “ghost” in the transactions. Brokerage firms relied on the purported truth and accuracy of the attorney opinion letters in evaluating whether to clear the sale of shares of the restricted stocks on public markets. After the stocks were cleared for sale as a result of the false attorney opinion letters, Nava and his co-conspirators sold millions of shares of these stocks to the investing public. Nava further admitted that, after selling these shares and securities, he transferred the proceeds derived from the securities-fraud scheme into bank accounts under his direct control.
Nava also admitted that, from approximately 2017 to 2018, he owned and operated an unlicensed MTB as a means to transmit financial proceeds from foreign locations, including Hong Kong and the Bahamas, all of which disguised the source, origin and control of such financial proceeds. As Nava further admitted, in 2017, Nava entered into a business partnership with at least one co-conspirator who resided in Mexico and delivered dairy products for a living. To conceal Nava’s control over the MTB, Nava directed the Mexican resident to fraudulently open a deposit account in his name at a financial institution in San Diego, and to transmit funds as a nominee and as directed by Nava. According to the plea agreement, Nava’s unlicensed MTB transacted millions of dollars in international wire transfers with entities purportedly involved in investment-banking services and which sold futures and securities. Nava failed to register his MTB with the U.S. Treasury Department’s Financial Crimes Enforcement Network, or FinCEN, as required under federal law.
As stated in the plea agreement, Nava also falsified his tax returns for years 2014, 2015 and 2016. He admitted that he falsely and fraudulently underreported Surf Financial’s profits, and he did so for the purpose of underreporting Nava’s true income and tax liability.
This case was investigated by IRS- CI and HSI. Trial Attorney Kevin Lowell of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Daniel Silva of the U.S. Attorney’s Office for the Southern District of California are prosecuting the case.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
U.S. Attorney Announces More than $1.5 Million in Grants to Assist Victims in Southern District of CaliforniaRead the Press Release
Assistant U. S. Attorney Cindy Cipriani (619) 546-9608
NEWS RELEASE SUMMARY – October 6, 2020
SAN DIEGO – U.S. Attorney Robert Brewer today announced $1,549,980 in Department of Justice grants to assist victims in the Southern District of California. The grants, awarded by the Department’s Office of Justice Programs, are part of almost $1.8 billion distributed to state victim assistance and compensation programs to fund thousands of local victim assistance programs across the country and to provide millions in compensation to victims of crime.
The Office for Victims of Crime, a component of the Department’s Office of Justice Programs, flagship formula grant program is supported by the Crime Victims Fund (the Fund), which was established under The Victims of Crime Act. The Fund supports a broad array of programs and services that focus on helping victims in the immediate aftermath of crime and continuing to support them as they rebuild their lives. In FY 2019 alone, VOCA grants served over seven million victims and paid more than $399 million in compensation claims.
“Advocates, service providers, and law enforcement agencies from around the country stand ready to help crime victims exercise their legal rights and reclaim their lives,” said Attorney General William P. Barr. “These new funding resources continue this administration’s unprecedented commitment to providing the support necessary for victims of crimes to be able to heal and recover.”
The awards made to organizations in the Southern District of California and around the country will support local direct victim service programs, including children’s advocacy centers, domestic violence shelters, rape crisis centers, human trafficking and elder abuse programs, civil legal services, crime victims’ rights enforcement, as well as victim assistance positions in prosecutors’ offices and law enforcement departments.
“Helping crime victims achieve justice and obtain support is our top concern, and these grants are an important part of that equation,” said U.S. Attorney Robert Brewer. “This money has the potential to change many lives for the better.”
In the Southern District of California, which includes San Diego and Imperial counties, grants were awarded to Rady Children’s Hospital San Diego, $1,250,000; and to Nile Sisters Development Initiative, which serves refugee and immigrant communities, $299,980.
State victim compensation programs will receive over $133 million to supplement the state funds that offset victims’ financial burdens resulting from crime. This compensation is often extremely vital to victims who face enormous financial setbacks from medical fees, lost income, dependent care, funeral expenses and other costs.
“The services made available by this funding represent a lifeline for tens of thousands of survivors each month, many of whom otherwise would have no place to turn in a moment of profound crisis,” said Katharine T. Sullivan, Principal Deputy Assistant Attorney General of the Office of Justice Programs. “These awards will help service providers, as well as law enforcement agencies and prosecutors’ offices respond to the many emotional and material challenges that crime victims in our country face every day.”
The Fund is financed by fines and penalties paid by convicted federal offenders and does not include tax dollars. More information about OJP and its components can be found at www.ojp.gov.
San Diego Finance Manager Sentenced to Prison for Stealing over $725,000 from EmployerRead the Press Release
Special Assistant U.S. Attorney Lisa J. Sanniti (619) 546-8811
NEWS RELEASE SUMMARY – October 6, 2020
SAN DIEGO – Antonia Barber, the former operations manager for Carlsbad-based contractors’ insurance company Target Financial and Insurance Services, was sentenced in federal court yesterday to 21 months in prison for stealing $726,060.75 from the company.
Sentencing documents reflect that Barber held a sensitive position at Target Financial, where she was permitted to approve reimbursement requests from employees, issue reimbursement checks, pay vendors, and report to the owner as to the financial condition of the company. In 2008, Barber began writing hundreds of checks to a family member for bogus “Records Management” services that were never provided. Barber’s conduct escalated to writing herself checks for nonexistent “expense reimbursement,” totaling over $600,000.
Barber went so far as to report to the owner that the company was struggling financially, causing the owner to infuse money into the company to keep people employed and the business afloat. Barber’s scheme went on for seven years until the owner caught on to her theft, and reported it to law enforcement.
“This defendant abused her position of trust to steal hundreds of thousands of dollars,” said U.S. Attorney Robert Brewer. “This sentence is a reminder that there will be a price to pay for employees who use company coffers as a personal bank account.” Brewer praised prosecutor Lisa Sanniti and agents from the U.S. Secret Service for their hard work in this case.
DEFENDANT Case No. 18-CR-4028-W
ANTONIA BARBER Age 52 San Diego, CA
aka “Antonia M. Barber”
aka “Antonia Marie Barber”
aka “Antonia Marie Martinez”
SUMMARY OF CHARGES
Wire Fraud – Title 18, U.S.C., Section 1343
Maximum penalty: Twenty years in custody and a $250,000 fine
AGENCY
United States Secret Service
Department of Justice Awards $5.8 Million in Grants to San Diego County Indian TribesRead the Press Release
Assistant U. S. Attorney KimThoa Hoang (619) 546-9397
NEWS RELEASE SUMMARY – October 2, 2020
SAN DIEGO – U.S. Attorney Robert Brewer announced today that the U.S. Department of Justice has awarded more than $5.8 million in grants to Native American tribes based in San Diego County to provide resources to crime victims, particularly victims of domestic violence and sexual assault.
Recipients include the Intertribal Court of Southern California, $1,428,927; the Pauma Band of Mission Indians, $900,000; San Pasqual Band of Mission Indians $900,000; Southern Indian Health Council, $614,433; and La Jolla Band of Luiseno Indians, $836,856 and $417,000. Additionally, this office previously announced that Valley Center-based Strong Hearted Native Women’s Coalition received a DOJ grant for $353,615 and the Pauma Band received $363,223.
“Violence against women has increased during the pandemic, making these funds more important than ever,” said U.S. Attorney Robert Brewer. “This is one way for the Department of Justice to make sure that Indian women are protected and their attackers brought to justice. The grants announced today will also significantly expand the Intertribal Court’s capacity to provide victim services to all tribal members.”
The Tribal Governments Program, Purpose Area 5 of the 2019 Coordinated Tribal Assistance Solicitation, was created in Title IX of the Violence Against Women Act of 2005 and amended by 34 U.S.C. 10452. The Tribal Governments Program is designed to fulfill the following goals of Title IX: (1) decreasing the incidence of violent crime against Indian women; (2) strengthening the capacity of Indian tribes to exercise their sovereign authority to respond to violent crimes committed against Indian women; and (3) ensuring that perpetrators of violent crimes committed against Indian women are held accountable for their criminal behavior.
The Pauma Band of Mission Indians is a federally recognized Tribe located in in San Diego County, California. With this funding, the Pauma Sexual Assault Response Team will: (1) increase tribal capacity to respond to domestic violence, dating violence, sexual assault, sex trafficking, and stalking crimes; (2) strengthen the tribal justice interventions, including tribal law enforcement and prosecution; (3) enhance services to victims; (4) work in cooperation with the community to develop education and prevention strategies; (5) provide legal assistance to victims in legal matters arising as a consequence of abuse or violence; (6) provide services to address the needs of youth who are victims of domestic violence, dating violence, sexual assault, sex trafficking, or stalking and the needs of youth and children exposed to domestic violence, dating violence, sexual assault, or stalking; and (7) develop and promote legislation and policies. The Pauma Band of Mission Indians has partnered with Strong Hearted Native Women’s Coalition to plan and implement this project.
The San Pasqual Band of Mission Indians is a federally recognized tribe located in San Diego County, California. With this funding, the San Pasqual Native Women’s Resource Center (NWRC) and the San Pasqual Public Safety Department will: (1) increase and improve tribal law enforcement response and follow-up to victims of domestic violence, dating violence, sexual assault, sex trafficking, and stalking by hiring a dedicated officer; (2) expand the capacity of the Native Women’s Resource Center to provide timely intervention and supportive services; and (3) provide community education and outreach regarding prevention and intervention resources for domestic violence and other crimes of violence against Indian women. The San Pasqual Band of Mission Indians has partnered with a community advisory committee and the Strong Hearted Native Women’s Coalition to plan and implement this project.
Southern Indian Health Council, Inc. (SIHC) is a tribal non-profit located in San Diego County, California. SIHC is a duly authorized designee of the Barona Band of Mission Indians, the Campo Band of Mission Indians, the Ewiiaapaayp Band of Kumeyaay Indians, the Jamul Indian Village of California, the La Posta Band of Diegueno Mission Indians, the Manzanita Band of the Kumeyaay Nation, and the Viejas Band of Capitan Grande Band of Mission Indians of the Viejas Reservation, all federally recognized tribes. The tribes individually have (1) authorized SIHC to submit an application on behalf of the tribe; and (2) stated its support for the project and its commitment to participate in the project upon receiving this funding. In general, SIHC provides medical, dental, and mental health care at four clinic locations in rural southeast San Diego County. SIHC has partnered with Strong Hearted Native Women’s Coalition to plan and implement this project. With this funding, SIHC will: (1) provide transitional housing assistance for victims of domestic violence, sexual assault, dating violence, stalking, or sex trafficking; (2) provide supervised visitation and safe visitation exchange; (3) increase tribal capacity to respond to domestic violence, dating violence, sexual assault, stalking, and sex trafficking, by providing training to tribal staff and partners; (4) provide civil legal assistance to victims with legal issues arising out of the violence they experienced; and (5) provide services to youth that are victims or exposed to domestic violence, sexual assault, or stalking.
The La Jolla Band of Luiseno Indians is a federally recognized tribe located in San Diego County, California. The La Jolla Band of Luiseno Indians’ Avellaka Program works to address violence against Indian women by providing 24/7 crisis intervention services, court advocacy and accompaniment, transitional housing assistance, and community awareness and education. With this funding, the Avellaka Program will: (1) increase and enhance tribal capacity to respond to domestic violence, dating violence, sexual assault, sex trafficking, and stalking crimes against Indian women; (2) work in cooperation with the community to develop education and prevention strategies; and (3) provide transitional housing for victims. The Avellaka Program has partnered with the La Jolla Native Women’s Advisory Committee to plan and implement this project.
Further, the Tribal Victim Services grant award will enable La Jolla to (1) hire a 1.0 FTE Advocate for Youth; 2) retain the services of a consultant to help develop a strategic plan and conduct evaluation activities for the project; 3) retain the services of a videographer to help youth document digital stories and create PSAs targeting youth victims of crime; and 4) support the development of a Native Children's Advocacy Committee.
Under its award, Intertribal Court of Southern California (ICSC), located in Valley Center, will expand victim services for member tribes of their consortium. ICSC will hire four victim services program staff (Family Services Manager, Youth Services Advocate, Adult Services Manager, and an Administrative Assistant) to expand services to child, adolescent, and adult victims of crime; renovate a portion of the ICSC building to serve as a private waiting area for victims awaiting court proceedings; purchase a mobile office to house the four victim services staff; and contract with American Indian Development Associates LLC to conduct a needs assessment, create a Victim Services Program strategic plan, and assist with a two-year formative program performance plan in Year 1 and 2.
For information of the Valley Center-based Strong Hearted Native Women’s Coalition grant please see https://www.justice.gov/usao-sdca/pr/department-justice-awards-1-million-grants-san-diego-county-organizations. For information on the first Pauma grant, please see https://www.justice.gov/usao-sdca/pr/us-doj-office-violence-against-women-awards-363223-pauma-band-mission-indians-support.
Defendant Sentenced to 83 Months for Maritime Smuggling Event that Resulted in the Deaths of Two AliensRead the Press Release
Assistant U.S. Attorneys Jill Streja and Seth Askins (619)546-8401
NEWS RELEASE SUMMARY – October 5, 2020
SAN DIEGO – Julio Cesar Murillo-Arce was sentenced in federal court today to 83 months in prison for his role as the captain of a panga boat that suffered engine trouble and capsized in February 2020, resulting in the deaths of two of the six smuggled aliens on board. Murillo-Arce pleaded guilty to four counts of alien smuggling in June 2020.
As reflected in court records, during the late hours of February 2 and early morning hours of February, Murillo-Arce piloted a panga boat with six illegal aliens aboard from Ensenada, Mexico, to United States territorial waters. At approximately 1:30 a.m., as the boat was approximately 150 yards offshore and beyond the breakers near Imperial Beach, it began experiencing severe engine trouble and eventually became inoperable in the rough seas.
Law enforcement personnel with the Joint Harbor Operations Center were able to observe the boat, and Border Patrol agents responded to the shore. Fearing capture, Murillo-Arce told the other individuals aboard not to identify him as the pilot of the boat and then dove into the water, abandoning them at their time of greatest need. Thereafter, a large wave capsized the boat, throwing all six smuggled aliens into the rough seas. Four eventually were able to make it to shore, but two – Ramon Ponce-Rodriguez and Modesto Rodriguez-Ballesteros – were unable to swim and drowned.
When this incident occurred, Murillo-Arce previously had been convicted of a maritime alien smuggling offense in 2019 in the Central District of California and was on supervised release.
U.S. District Court Judge Marilyn L. Huff sentenced Murillo-Arce to 78 months in federal prison for his criminal conduct in this case. When handing down the sentence, Judge Huff observed that this was a “tragic, tragic, tragic circumstance” and “one of the most egregious that the court has seen in many years of experience.” She noted that Murillo-Arce was not deterred by his prior conviction and stated, “These deaths should not have happened.” Judge Huff also imposed a 10-month sentence for Murillo-Arce’s violation of the terms of his supervised release and ran five months consecutive, for a total sentence of 83 months.
“This is yet another tragedy that never should have happened,” said U.S. Attorney Robert Brewer. “This defendant and others like him care only about their bank accounts and their own safety. Because of his callous disregard for the passengers he attempted to smuggle, two lives were lost.” U.S. Attorney Brewer commended Assistant U.S. Attorneys Jill Streja and Seth Askins, as well as the U.S. Border Patrol and the Joint Harbor Operations Command for their work on this case.
“As made evident by these events, organizations that use the Pacific Ocean to smuggle people have little regard for human life,” stated U.S. Border Patrol, San Diego Sector’s Acting Chief Patrol Agent Patricia McGurk-Daniel. “Border Patrol agents work relentlessly to pursue these smugglers and prevent these tragedies from occurring. The San Diego Sector is grateful for the U.S. Attorney’s Office’s tireless efforts in bringing them to justice.”
DEFENDANT Criminal Case No. 3:20-CR-761-H
Julio Cesar Murillo-Arce Age: 42 Residence: Mexico
SUMMARY OF CHARGES
8 U.S.C. § 1324(a)(1)(A)(i) and (B)(iv) – Attempted Bringing in Illegal Aliens Resulting in Death (2 counts)
Maximum Penalties: Death or Imprisonment for any term of years or for Life; $250,000 fine.
8 U.S.C. § 1324(a)(2)(B)(ii) – Attempting Bringing in Illegal Aliens for Financial Gain (2 counts)
Maximum Penalties: Mandatory Minimum three years; Maximum ten years; $250,000 fine
INVESTIGATING AGENCIES
United States Border Patrol
Joint Harbor Operations Command
San Diego Laboratory Phamatech Agrees to Pay $3 Million to Settle Fraudulent Medicare Billing CaseRead the Press Release
Assistant U. S. Attorney Paul Starita (619) 546-7701
NEWS RELEASE SUMMARY – September --, 2020
San Diego – San Diego-based Phamatech, Inc. and its CEO and founder, Tuan Pham, have agreed to pay $3,043,484 to resolve allegations that they violated the False Claims Act by submitting false claims to Medicare for laboratory drug-testing services. Phamatech is a medical technology company that manufactures diagnostic devices and provides laboratory testing including for drugs and alcohol.
The United States alleged that Phamatech improperly paid a medical clinic to induce it to refer orders for laboratory drug-testing to Phamatech and consequently received government reimbursement for those tests in violation of the federal Anti-Kickback Statute and the False Claims Act. Specifically, the United States alleged that Phamatech paid kickbacks to Imperial Valley Wellness (“IVW”), a medical practice group, to induce IVW to order laboratory testing for its patients enrolled in Medicare. For about two years, Phamatech allegedly paid IVW a per-specimen fee in exchange for IVW’s referral of urine samples from Medicare beneficiaries. The government further alleged that many of the samples that IVW referred to Phamatech for testing under this arrangement were not medically necessary and therefore not lawfully eligible for Medicare reimbursement.
“We are committed to protecting the integrity of the Medicare program and ensuring accountability under the False Claims Act. This settlement meets these goals,” said U.S. Attorney Robert Brewer. Brewer praised Assistant U.S. Attorney Paul Starita and federal agents from FBI and Health and Human Services, Office of Inspector General, for their excellent work on this case.
“Paying to secure business increases costs—ultimately, leaving taxpayers to pick up the bill,” said Timothy B. DeFrancesca, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “With our law enforcement partners, we will continue pursuing potential threats to our health programs.”
“The FBI is committed to rooting out fraud within the healthcare industry and works with the U.S. Attorney’s Office and law enforcement partners to find a just result in each case,” said FBI SAC Suzanne Turner. “We urge anyone with information about suspected healthcare fraud to contact their local FBI Field Office.”
The False Claims Act allegations being resolved were originally brought in a lawsuit filed by a former employee of Phamatech, John Polanco, 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. Polanco will receive $517,392 from the settlement proceeds.
The investigation was conducted by the U.S. Attorney’s Office for the Southern District of California, the Department of Health and Human Services Office of Inspector General, and the Federal Bureau of Investigation. This case is captioned United States, et al., ex rel. John Polanco v. Phamatech, Inc. and Tuan Pham, 16CV1835-L-NLS, and the matter was handled by Assistant U.S. Attorney Paul Starita of the Affirmative Civil Enforcement Unit of the U.S. Attorney’s Office. The claims resolved by the settlement are allegations only, and there has been no determination of liability.
DEFENDANTS
Phamatech, Inc. San Diego, CA
Tuan Pham San Diego, CA
AGENCIES
Federal Bureau of Investigation
Health and Human Services, Office of Inspector General
National Health Care Fraud and Opioid Takedown Results in Charges Against 345 Defendants Responsible for More Than $6 Billion in Alleged Fraud Losses; San Diego Defendants ChargedRead the Press Release
Assistant U. S. Attorney Valerie Chu (619) 546-6750
NEWS RELEASE SUMMARY – September 30, 2020
SAN DIEGO – Federal officials today announced a historic nationwide enforcement action involving 345 charged defendants across 51 federal districts, including more than 100 doctors, nurses and other licensed medical professionals located in San Diego and across the country.
These defendants have been charged with submitting more than $6 billion in false and fraudulent claims to federal health care programs and private insurers, including more than $4.5 billion connected to telemedicine, more than $845 million connected to substance abuse treatment facilities, or “sober homes,” and more than $806 million connected to other health care fraud and illegal opioid distribution schemes across the country.
In San Diego, the U.S. Attorney’s Office announced charges against defendants in several unrelated cases who collectively attempted to defraud Medicare of nearly $1 billion and Tricare of over $70 million. In addition, some defendants were charged with distributing fentanyl causing deaths in San Diego County.
“These frauds represent a staggering amount of theft to federal health programs, and ultimately the victims are every patient,” said U.S. Attorney Robert Brewer. “We will continue to investigate and prosecute these selfish criminals whose deplorable schemes drive healthcare costs sky high for everyone.” Brewer praised the federal agents and prosecutors who endeavor to expose these fraudsters and protect patients. Prosecutors who worked on these cases include Blanca Quintero, Valerie H. Chu, Mark Pletcher, Kevin Larsen, Josh Green, Drew Galvin, Paul Starita, Dylan Aste and Larry Casper.
“These cases demonstrate our commitment to pursuing medical providers, suppliers and others who insist on placing profits before patients,” said Timothy B. DeFrancesca, Special Agent in Charge, Office of the Inspector General for the U.S. Department of Health and Human Services. “We will continue to root out fraud, waste, and abuse in federal healthcare programs and hold accountable people who brazenly steal from the vital programs.”
“The FBI, together with our federal, state, and local partners, remains steadfast in our commitment to uncover and investigate health care fraud, no matter what form it takes,” said Suzanne Turner, Special Agent in Charge of the FBI's San Diego Field Office. “Our agents will continue this important work to ensure public and private health care dollars are used as intended, to promote the health and safety of all Americans and safeguard continued access to critical health care services.”
U.S. Attorney Brewer announced the following charges in San Diego as part of the national takedown:
- United States v. Burruss, et. al. On September 29, 2020, Charles A. Burruss and Ardalaan “Armani” Adams were charged with conspiracy to commit wire fraud for participating in a massive scheme to pay kickbacks for referrals of Medicare patients, then bill Medicare for Durable Medical Equipment (“DME”) sent to those patients, who had not been examined by a physician, and who generally did not need, and many times did not want, the equipment. According to the charging documents, the defendants created a network of over 30 DME companies in the names of straw and nominee owners, to increase their profits and avoid scrutiny and audits from Medicare that could occur if the same companies submitted hundreds or thousands of bills for similar DME products in a short period of time. The United States alleges that the Medicare beneficiaries were often harassed by telemarketers through multiple phone calls per day, to accept back, knee, wrist, and other braces covered by Medicare. Because they were paid by the brace, the telemarketers used fast-talking, high-pressure tactics to “upsell” patients (although the patients actually paid nothing for the braces, not even the required co-pays) to consent to receiving multiple products, up to a goal of what was called the “iron man kit” – back brace, neck brace, shoulder brace, two knee braces, two ankle braces, and two wrist braces. Marketing companies purchased those patient names, then paid telemedicine doctors to sign prescriptions and issue cut-and-paste justifications for patients they hadn’t examined and had rarely spoken with. The DME companies owned or managed by Burruss and Adams paid for the referral of these Medicare patients, generally between $250 and $380 for each referral of brace for a Medicare patient, in violation of the Anti-Kickback Statute. All told, Burruss and Adams, through their more than 30 different DME companies, submitted bills topping $871 million, and received a whopping $424,648,137 in payment for supplying the mostly-unneeded braces. While Medicare was the primary target of the fraud, bills were submitted to Tricare, Civilian Health and Medical Program of the Department of Veterans Affairs (“CHAMPVA”), and Medi-Cal as well. DME companies associated with Burruss and Adams submitted claims for over 181,218 Medicare beneficiaries nationwide, including 11,312 elderly or disabled residents of California. The defendants have also been charged in the District of New Jersey and the Middle District of Florida for related conduct.
- United States v. Bell, et al. On September 18, 2020, father-and-son duo Anthony Duane Bell Sr. and Anthony Duane Bell Jr. were indicted for conspiracy to commit wire fraud for participating in a huge scheme to pay kickbacks for referrals of Medicare patients, then bill Medicare for Durable Medical Equipment (“DME”) sent to those patients, who had not been examined by a physician, and who generally did not need, and many times did not want, the equipment. Through their companies, Universal Medical Solutions, the Bells paid between $250 and $380 for each referral of brace for a Medicare patient, in violation of the Anti-Kickback Statute, in order to submit thousands of dollars in bills for the DME to Medicare, in violation of the health care fraud statutes, according to the indictment. Through just their single company, the Bells submitted over $49 million in bills to Medicare in less than two years. They also perpetuated their business model to increase their own profits by providing funds and the necessary contacts and introductions to set up other DME companies, and encouraging those DME companies to pay unlawful kickbacks by purchasing completed doctors’ orders – all so that they could obtain a “revenue share” (that is, a portion of the payments that those other DME companies received from Medicare). As a further deceptive aspect of their scheme, the defendants lied to Medicare about the ownership and control over their company, and Bell Jr. told multiple lies to the FBI when interviewed about the company in April 2019.
- United States v. Collins, et. al. On June 9, 2020, Jimmy Collins, Ashley Collins, Kyle Adams, Daniel Castro, and Jeremy Syto were indicted for health care fraud and paying and receiving kickbacks for Tricare referrals for their efforts to supply expensive compound medications to beneficiaries covered by Tricare, the health care benefit program for military service members and their dependents. Jimmy and Ashley Collins, a husband-and-wife team, allegedly created a multi-level-marketing network, paying marketing representatives to recruit Tricare beneficiaries at military bases such as Twenty-nine Palms and Miramar by paying them hundreds of dollars to sign up to receive the worthless compound creams. If those service members recruited additional Tricare beneficiaries, they received a portion of the TRICARE reimbursement that resulted. Doctors in Tennessee, who had never examined nor spoken with their purported patients, issued hundreds of prescriptions for these pharmaceuticals to the San Diego soldiers and sailors. The average price of these compounded drugs was $14,510.33 apiece. The conspiring pharmacies submitted over $65 million in bills to Tricare for these drugs, which most beneficiaries did not need and which many simply threw into the trash. With their ill-gotten gains, Jimmy and Ashley Collins purchased an $8 million yacht and farm equipment, which has been forfeited. Former U.S. Marines Adams and Castro, and U.S. Navy service member Syto, have pleaded guilty, admitting their participation in the Tricare fraud and kickback scheme. Each admitted to having received over $100,000 in kickbacks for receiving the worthless creams and for recruiting other service members into the scheme.
- United States v. Green, et. al. On June 29, 2020, Melinda Green and Ron Green were indicted for health care fraud and paying kickbacks for Tricare referrals for their efforts to supply expensive compound creams to beneficiaries covered by Tricare, the health care benefit program for military service members and their dependents. Though neither defendant is a pharmacist, they concocted compounds with the highest-priced ingredients in order to maximize the reimbursement from Tricare, then pushed their marketing representatives to pay doctors and clinics to prescribe these compounds that were supposedly customized for a patient’s individual needs. Through their companies, NHS Pharma and NHS Pharma Sales, they submitted over $4.5 million in bills to Tricare for these compounds, which beneficiaries did not need. The defendants are next due in court on January 8, 2021 at 11:00am.
The following cases were included in today’s takedown figures, but have been previously announced by this office:
- United States v. Matthews. On August 24, 2020, Donald Joseph Matthews, the former Vice President of Market Development for local genetics company Proove Biosciences, Inc., pleaded guilty to participating in a conspiracy to pay kickbacks to doctors for referring Medicare patients to Proove for genetic tests. To paper-over the illegal kickback scheme, the payments were disguised as compensation to doctors for participating in a clinical research study, although no study existed and doctors were told to fabricate the number of “hours” they worked on the study, when in reality they were being paid for each patient referred to Proove. Proove submitted more than $45 million in claims to Medicare for tests procured by the unlawful kickbacks and received approximately $21 million in unlawful payments.
https://www.justice.gov/usao-sdca/pr/vp-genetics-company-pleads-guilty-paying-physicians-sham-clinical-research-fees-part-21
- In re Progenity. On July 21, 2020, the United States reached a settlement with San Diego-based research laboratory Progenity, Inc., in which the company agreed to pay $49 million to resolve claims that it had defrauded Tricare, Medicare, and state health care benefit programs by knowingly using the incorrect code to bill for genetic testing that would otherwise not have been covered by those programs.
https://www.justice.gov/usao-sdca/pr/san-diego-laboratory-admits-fraudulent-tricare-billing-agrees-pay-49-million
- Dr. Prakash Bhatia. On April 30, 2020, local psychiatrist Dr. Prakash Bhatia agreed to pay $145,000 to resolve allegations that he overprescribed opioids, including fentanyl, hydromorphone, morphine, methadone, oxycodone, and oxymorphone, in violation of the civil provisions of the Controlled Substance Act. The United States’ allegations included that Dr. Bhatia inappropriately prescribed opioids along with benzodiazepines and/or muscle relaxants to the same patients, combinations known to increase the risk of abuse, addiction, and overdose.
https://www.justice.gov/usao-sdca/pr/san-diego-psychiatrist-pays-145000-resolve-opioid-overprescribing-investigation
In addition, in light of the ongoing opioid epidemic and an alarming increase in fentanyl overdose deaths within the Southern District, the U.S. Attorney’s Office continues to aggressively prosecute those responsible for illegally distributing fentanyl and other opioids that cause death irrespective of the defendant’s place in the chain of distribution of such deadly drugs.
- United States v. Garcia. On May 20, 2020, Lorenzo Anthony Garcia was indicted for distributing fentanyl that resulted in the death of a 15-year old high school junior who was a member of his school varsity football team. https://www.justice.gov/usao-sdca/pr/law-enforcement-issues-public-safety-warning-about-extreme-danger-fentanyl
- United States v. Davis. On August 18, 2020, Perry Edward Davis was indicted for distributing fentanyl and cocaine resulting the death of a 25-year old victim. The charges followed after three people overdosed and collapsed within minutes of each other outside of a local cocktail bar. Two females were revived by paramedics but the male victim did not survive.
Today’s enforcement actions were led and coordinated by the Criminal Division, Fraud Section’s Health Care Fraud Unit, in conjunction with its Health Care Fraud and Appalachian Regional Prescription Opioid (ARPO) Strike Force program, and its core partners, the U.S. Attorneys’ Offices, HHS-OIG, FBI, and DEA, as part of the department’s ongoing efforts to combat the devastating effects of health care fraud and the opioid epidemic. The cases announced today are being prosecuted by Health Care Fraud and ARPO Strike Force teams from the Criminal Division’s Fraud Section, along with 43 U.S. Attorneys’ Offices nationwide, and agents from HHS-OIG, FBI, DEA, and other various federal and state law enforcement agencies.
Some of the cases listed above are part of the joint FBI and HHS Operation Rubber Stamp and the 2020 Telemedicine takedown, which was coordinated by The National Rapid Response Strikeforce of the Health Care Fraud Unit of the Criminal Division Fraud Section. The Telemedicine takedown involves charges and guilty pleas in connection with widespread telemedicine schemes involving over $4 billion in false billing. The focus on telemedicine fraud builds on the 2019 telemedicine and durable medical equipment takedown ("Operation Brace Yourself"), which resulted in an estimated cost avoidance of over $1.5 billion in the amount paid by Medicare for orthotic braces in the seventeen months since the takedown, preserving the Medicare trust fund for legitimate medical care. In addition, CMS/CPI separately announced today that it took the largest number of adverse administrative actions resulting from a single administrative health care fraud investigative initiative in history in revoking the Medicare billing privileges of 256 additional medical professionals for their involvement in telemedicine schemes.
For further information about the national takedown, see https://www.justice.gov/opa/pr/national-health-care-fraud-and-opioid-takedown-results-charges-against-345-defendants.
DEFENDANTS Case Number 202980-WQH
Charles A. Burruss, 51, San Diego, CA
Ardalaan “Armani” Adams, 33, San Diego, CA
SUMMARY OF CHARGES
Conspiracy to Commit Wire Fraud – Title 18, U.S.C., 1349
Maximum penalty: Twenty years in prison and $500,000 fine, or twice the pecuniary gain / loss
AGENCIES
Federal Bureau of Investigation
US. Department of Health and Human Services, Office of Inspector General
DEFENDANTS Case Number 202887-WQH
Anthony Duane Bell Sr., 52, El Cajon, CA
Anthony Duane Bell Jr., 30, Los Angeles, CA
SUMMARY OF CHARGES
Conspiracy to Commit Health Care Fraud and Pay Kickbacks – Title 18, U.S.C., 371
Maximum penalty: Five years in prison and $500,000 fine
Health Care Fraud – Title 18, U.S.C., 1347
Maximum penalty: Ten years in prison and $500,000 fine, or twice the pecuniary gain / loss
Unlawful Remuneration – Title 42, U.S.C., 1320d-7b(b)
Maximum penalty: Four years in prison and $500,000 fine, or twice the pecuniary gain / loss
False statement to Government – Title 18, U.S.C., 1001
Maximum Penalty: Five years in prison and $250,000 fine
AGENCIES
Federal Bureau of Investigation
US. Department of Health and Human Services, Office of Inspector General
DEFENDANTS Case Number 18CR432-JLS
Jimmy Collins, 56, Tennessee
Ashley Collins, 34, Tennessee
Kyle Adams, 33, Texas
Daniel Casto, 32, Illinois
Jeremy Syto, 27, California
SUMMARY OF CHARGES
Conspiracy to Commit Health Care Fraud – Title 18, U.S.C., 1349
Maximum penalty: Ten years in prison and $500,000 fine
Conspiracy to Pay and Receive Illegal Remunerations – Title 18, U.S.C., 371
Maximum penalty: Five years in prison and $500,000 fine
Receive Illegal Remunerations – Title 42, U.S.C., 1320a-7b(b)(1)
Maximum penalty: Four years in prison and $500,000 fine
Pay Illegal Remunerations – Title 42, U.S.C., 1320a-7b(b)(2)
Maximum penalty: Four years in prison and $500,000 fine
AGENCIES
Defense Criminal Investigative Service
Federal Bureau of Investigation
DEFENDANTS Case Number 18CR432-JLS
Melinda Green, 59, Escondido, CA and Windermere, FL
Ronald Green, 66, Escondido, CA and Windermere, FL
SUMMARY OF CHARGES
Conspiracy to Commit Health Care Fraud and Pay Kickbacks – Title 18, U.S.C., 371
Maximum penalty: Five years in prison and $500,000 fine
Unlawful Remuneration – Title 42, U.S.C., 1320d-7b(b)
Maximum Penalty: Four years in prison and $500,000 fine, or twice the pecuniary gain / loss
AGENCY
Defense Criminal Investigative Service
DEFENDANT Case Number 20CR1222-GPC
Lorenzo Anthony Garcia, 21, Brawley, CA
SUMMARY OF CHARGES
Manufacture, distribute, or possess with intent to manufacture, distribute, or dispense a controlled substance resulting in death or serious bodily injury – Title 21, U.S.C., Section 841(a)(1), (b)(1)(C)
Maximum Penalty: Mandatory minimum 20 years in prison, Maximum life in prison
AGENCY
Drug Enforcement Administration
DEFENDANT Case Number 20CR2500-LAB
Perry Edward Davis, 44, San Diego, CA
SUMMARY OF CHARGES
Manufacture, distribute, or possess with intent to manufacture, distribute, or dispense a controlled substance resulting in death or serious bodily injury – Title 21, U.S.C., Section 841(a)(1), (b)(1)(C)
Maximum Penalty: Mandatory minimum 20 years in prison, Maximum life in prison
AGENCIES
Drug Enforcement Administration
El Cajon Police Department
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
- United States v. Burruss, et. al. On September 29, 2020, Charles A. Burruss and Ardalaan “Armani” Adams were charged with conspiracy to commit wire fraud for participating in a massive scheme to pay kickbacks for referrals of Medicare patients, then bill Medicare for Durable Medical Equipment (“DME”) sent to those patients, who had not been examined by a physician, and who generally did not need, and many times did not want, the equipment. According to the charging documents, the defendants created a network of over 30 DME companies in the names of straw and nominee owners, to increase their profits and avoid scrutiny and audits from Medicare that could occur if the same companies submitted hundreds or thousands of bills for similar DME products in a short period of time. The United States alleges that the Medicare beneficiaries were often harassed by telemarketers through multiple phone calls per day, to accept back, knee, wrist, and other braces covered by Medicare. Because they were paid by the brace, the telemarketers used fast-talking, high-pressure tactics to “upsell” patients (although the patients actually paid nothing for the braces, not even the required co-pays) to consent to receiving multiple products, up to a goal of what was called the “iron man kit” – back brace, neck brace, shoulder brace, two knee braces, two ankle braces, and two wrist braces. Marketing companies purchased those patient names, then paid telemedicine doctors to sign prescriptions and issue cut-and-paste justifications for patients they hadn’t examined and had rarely spoken with. The DME companies owned or managed by Burruss and Adams paid for the referral of these Medicare patients, generally between $250 and $380 for each referral of brace for a Medicare patient, in violation of the Anti-Kickback Statute. All told, Burruss and Adams, through their more than 30 different DME companies, submitted bills topping $871 million, and received a whopping $424,648,137 in payment for supplying the mostly-unneeded braces. While Medicare was the primary target of the fraud, bills were submitted to Tricare, Civilian Health and Medical Program of the Department of Veterans Affairs (“CHAMPVA”), and Medi-Cal as well. DME companies associated with Burruss and Adams submitted claims for over 181,218 Medicare beneficiaries nationwide, including 11,312 elderly or disabled residents of California. The defendants have also been charged in the District of New Jersey and the Middle District of Florida for related conduct.
Se Acusa a Pareja de Chula Vista de Haber Estafado a Mujeres Embarazadas y a un Programa de Medi-Cal de CaliforniaRead the Press Release
RESUMEN DEL COMUNICADO DE PRENSA –24 de septiembre de 2020
SAN DIEGO – Melissa Álvarez Torres y José Luis Olmos Hernández, una pareja de Chula Vista que operaba lo que ellos afirmaban era una compañía privada que vendía seguros de salud, hicieron su primera comparecencia en el tribunal federal el día de hoy para responder a cargos de que se asociaron delictivamente para estafar a cientos de mujeres embarazadas y de ocasionarle aproximadamente 1.6 millones de dólares en pérdidas a Medi-Cal, un programa federal de servicios de salud.
Según una demanda penal que se reveló esta tarde, del 2016 hasta la fecha presente, Álvarez y Olmos se asociaron delictivamente para defraudar al Programa de Acceso a Medical ("MCAP," por sus siglas en inglés), que es un programa de servicios de salud que administra el Departamento de Servicios para el Cuidado de la Salud de California (DHCS, por sus siglas en inglés) que opera con fondos del gobierno estatal y el gobierno federal. MCAP es un programa diseñado para ayudar a familias trabajadoras de
medianos ingresos del estado de California que no cuentan con un seguro de salud adecuado que cubra los servicios de maternidad y el cuidado post-natal a un bajo costo basado en sus ingresos.
La demanda alega que Álvarez y Olmos promovían el "seguro" privado a mujeres embarazadas de nacionalidad mexicana que tuviesen una visa de trabajo o de turista. A través de publicidad en Facebook, donde se anunciaban bajo el nombre de Seguros Americanos Embarazo ("American Pregnancy Insurance"), Álvarez y Olmos engañosamente aducían que el "seguro" que ellos ofrecían permitiría que estas mujeres embarazadas dieran a luz legalmente en los Estados Unidos, sin arriesgar sus visas por utilizar los servicios gubernamentales. Le cobraron a cada una de las mujeres embarazadas miles de dólares por el supuesto "seguro".
Sin embargo, Álvarez y Olmos en realidad no tenían un seguro privado que pudiesen vender. En lugar de eso, ellos usaron la información personal que identificaba a estas mujeres para registrarlas para recibir las prestaciones que ofrece MCAP. Como se acusa en la demanda, Álvarez y Olmos presentaron cientos de solicitudes fraudulentas y documentación fiscal y de empleo fraudulenta para apoyar dichas solicitudes ante MCAP, simulando que las mujeres calificaban para recibir dichas prestaciones cuando en realidad no calificaban – y no habían dado su consentimiento para que se les inscribiera en dicho programa. Como resultado, se acusa a Álvarez y Olmos de haberles costado a los contribuyentes americanos millones de dólares en costos de servicios de salud, además de los cientos de miles de dólares en honorarios que recibieron de las mujeres a las que estafaron.
Álvarez y Olmos fueron arrestados el miércoles en la mañana como resultado de una investigación que involucró a múltiples dependencias, que inició el Departamento de Servicios para el Cuidado de la Salud de California, y que se llevó a cabo en cooperación con otras dependencias, incluyendo la Administración del Seguro Social, la Oficina de la Fiscalía Federal del Distrito Sur de California, y el Buró Federal de Investigaciones (FBI), para la aplicación de las leyes que gobiernan a Viajeros y la Residencia.
"No vamos a tolerar a estafadores que tratan de lucrar y aprovecharse de programas importantes de salud pública y de mujeres embarazadas", declaró el Fiscal Federal Brewer. "Seguiremos protegiendo al contribuyente americano y garantizaremos la integridad de los programas cuyo propósito es ayudar a los menesterosos e investigaremos y procesaremos penalmente a quienes tratan de aprovecharse de ellos".
"Agradecemos el apoyo crucial que las dependencias aliadas brindaron en esta investigación para arrestar a personas que tratan de aprovecharse de algunos de los miembros más vulnerables de nuestra sociedad, así como la asistencia que brindaron para proteger la integridad del programa Medi-Cal", señaló el Director de DHCS, Will Lightbourne.
"Agentes del FBI trabajan de manera diligente todos los días sin falta para descubrir actividades de fraude en contra del gobierno", declaró la Agente Especial a Cargo Suzanne Turner. "En este caso, los investigadores descubrieron una pérdida que se aduce es de 1.6 millones de dólares que sufrió el Programa Medi-Cal de California, así como dinero que se obtuvo de manera fraudulenta de cientos de mujeres embarazadas que creyeron que estaban comprando un seguro legítimo con cobertura para los servicios de salud que necesitaban. La viabilidad de los programas de servicios de salud gubernamentales depende de que estos programas se utilicen con honradez y para las personas necesitadas. Por ello, el FBI se mantiene firme en la realización del importante trabajo de descubrir el fraude en los servicios de salud, trabajando en alianza con el Departamento de Servicios para el Cuidado de la Salud de California y otras dependencias a cargo de la ejecución de la ley".
Si usted cree que ha sido víctima de Álvarez y Olmos, o si ha comprado un seguro de salud de Seguros Americanos Embarazo, por favor comuníquese con el Departamento de Servicios para el Cuidado de la
Salud de California, marcando el número 1-800-822-6222.
ACUSADOS Caso Núm. 20-mj-4076
MELISSA ÁLVAREZ TORRES Edad 33 Chula Vista, CA
alias "Melissa Torres"
alias "Melissa A. Torres"
JOSÉ LUIS OLMOS HERNÁNDEZ Edad 36 Chula Vista, CA
alias "José Luis Hernández"
alias "José L. Hernández"
alias "José Carlos"
alias "Carlos García"
RESUMEN DE LOS CARGOS
Asociación Delictuosa para Cometer Fraude a los Servicios de Salud y Fraude Mediante el Uso de Telecomunicaciones – Título 18, U.S.C., Sección 1349
Pena Máxima: 20 años de encarcelamiento y una multa de $250,000 dólares, o dos veces la ganancia monetaria o dos veces la pérdida monetaria, lo que resulte ser mayor. El resarcimiento es obligatorio.
DEPENDENCIAS
Departamento de Servicios para el Cuidado de la Salud del Estado de California
Buró Federal de Investigaciones
*Los cargos y alegatos que contiene una acusación formal o demanda penal son únicamente acusaciones, y a los acusados se les considera inocentes a menos que y hasta que se pruebe su culpabilidad.
Chula Vista Couple Charged with Defrauding Pregnant Women and a California Medi-Cal ProgramRead the Press Release
NEWS RELEASE SUMMARY – September 24, 2020
SAN DIEGO – Melissa Alvarez Torres and Jose Luis Olmos Hernandez, a Chula Vista couple who operated what they claimed to be a private insurance sales company, made their initial appearances today in federal court on charges that they conspired to defraud hundreds of pregnant women and caused an estimated $1.6 million in losses to Medi-Cal, a government health care program.
According to a complaint unsealed this afternoon, from 2016 through the present Alvarez and Olmos conspired to defraud the Medi-Cal Access Program ("MCAP"), a health care program administered by the California Department of Health Care Services and funded by state and federal government funds. MCAP is a program designed to assist working, middle-income California families without adequate health insurance by covering maternity services and post-natal care for a low cost based on their income.
It is alleged in the complaint that Alvarez and Olmos marketed private "insurance" to pregnant Mexican nationals holding work or tourist visas. Through Facebook advertising under the name Seguros Americanos Embarazo ("American Pregnancy Insurance"), Alvarez and Olmos falsely claimed that their "insurance" product would permit these pregnant women to give birth legally in the United States, without jeopardizing their visas by using government services. They charged the pregnant women thousands of dollars apiece for the purported "insurance."
In reality, however, Alvarez and Olmos did not have private insurance to sell. Instead, they used the women’s personal identifying information to sign them up for MCAP benefits. As charged in the complaint, Alvarez and Olmos submitted hundreds of false applications and fraudulent supporting tax and employment documents to MCAP, pretending that the women were eligible for benefits when in fact they did not qualify—and did not consent to be signed up for the program. As a result, it is alleged that Alvarez and Olmos cost American taxpayers millions of dollars in health care costs on top of the hundreds of thousands in fees they collected from the women they defrauded.
Alvarez and Olmos were arrested on Wednesday morning as a result of a multiagency investigation initiated by the California Department of Health Care Services, pursuant to the Travel and Residency Enforcement Co-Op with the Social Security Administration and the United States Attorney’s Office for the Southern District of California, along with the Federal Bureau of Investigation.
"We will not tolerate criminals who try to profit and take advantage of important public health programs and vulnerable pregnant women," said U.S. Attorney Brewer. "We will continue to protect the American taxpayer and ensure the integrity of programs intended to help the needy by investigating and prosecuting those who would try to exploit them."
"We appreciate the crucial support our partners provided in this investigation to apprehend people preying on some of society’s most vulnerable members, and their assistance in protecting the integrity of the Medi-Cal program," said DHCS Director Will Lightbourne.
"Each and every day, FBI agents are working diligently to uncover fraud against the government," said FBI Special Agent in Charge Suzanne Turner. "In this case, investigators uncovered an alleged $1.6 million dollar loss from the California Medi-Cal Program as well as fraudulently obtained money from hundreds of pregnant women who thought they were purchasing legitimate insurance coverage for their health care needs. The viability of government healthcare programs depends on honest use of the programs for those in need. Therefore, the FBI remains steadfast in the important work of uncovering healthcare fraud in partnership with California’s Department of Health Care Services and other law enforcement agencies."
If you think you are a victim of Alvarez and Olmos, or purchased health insurance through Seguros Americanos Embarazo, please contact the California Department of Health Care Services at 1-800-822-6222.
DEFENDANTS Case No. 20-mj-4076
MELISSA ALVAREZ TORRES Age 33 Chula Vista, CA
aka "Melissa Torres"
aka "Melissa A. Torres"
JOSE LUIS OLMOS HERNANDEZ Age 36 Chula Vista, CA
aka "Jose Luis Hernandez"
aka "Jose L. Hernandez"
aka "Jose Carlos"
aka "Carlos Garcia"
SUMMARY OF CHARGES
Conspiracy to Commit Health Care Fraud and Wire Fraud – Title 18, U.S.C., Section 1349
Maximum penalty: 20 years in custody and a $250,000 fine, or twice the pecuniary gain or twice the pecuniary loss, whichever is greater. Restitution is mandatory.
AGENCIES
State of California’s Department of Health Care Services
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.
Members of Stock Fraud Ring Indicted for Securities Fraud, Two Defendants ArrestedRead the Press Release
Assistant U. S. Attorneys Andrew J. Galvin (619) 546-9721 and Aaron P. Arnzen (619) 546-8384
NEWS RELEASE SUMMARY – September 21, 2020
SAN DIEGO – An indictment unsealed today charges four individuals, including a securities attorney, with securities fraud for running an illegal pump-and-dump scheme surrounding two publicly-traded stocks. The investigation that led to these charges involved a co-conspirator-turned-confidential-informant who was cooperating with the FBI.
According to court documents, Ongkaruck Sripetch (a resident of Gig Harbor, Washington, who used the aliases “King Richards” and “Shelby Saint-Claire”), Canadian resident Michael Wexler, Canadian resident and securities attorney Ashmit Patel, and Grand Cayman resident Andrew McAlpine were members of a stock fraud ring who worked together to artificially inflate the prices of penny stocks, then quickly unload their own shares before the prices collapsed. The defendants did not know that, while the scheme was underway, one of their partners had begun cooperating with the Government’s investigation and was collecting evidence against his co-conspirators.
Defendant McAlpine was arrested Friday when he entered the United States from Grand Cayman, and defendant Sripetch was also arrested Friday, in Gig Harbor, Washington. The United States is seeking the arrest of defendants Patel and Wexler.
As alleged in the indictment, a pump-and-dump scheme takes place when subjects acquire publicly-traded stock at low prices, issue misleading news releases or promotional materials to artificially increase the price of the stock, sell the stock to unsuspecting investors, and split the proceeds. The stock fraud ring charged here carried out pump-and-dump schemes on the stock of two companies: Ottawa, Canada-based VMS Rehab Systems, which claimed to sell “quality of life orthopedic seat cushions for the home healthcare sector,” and Argus Worldwide, a company headquartered in Cheyenne, Wyoming, which purportedly focused on “digital/internet products and services, smart consumer electronic products and health industries.”
“These defendants sought to boost the stock price of two companies, and then leave innocent investors with investments that they knew would almost immediately lose most or all of their value,” said U.S. Attorney Robert Brewer. “We will continue to investigate and prosecute this type of stock fraud.” Brewer praised prosecutors Andrew Galvin and Aaron Arnzen, as well as the Federal Bureau of Investigation and the Securities and Exchange Commission for their investigation in this case.
“The FBI's complex financial crimes investigators diligently work securities fraud cases like this pump-and-dump scheme in order to maintain the integrity of our financial markets,” said Suzanne Turner, Special Agent in Charge of the FBI's San Diego Division. “Today, Grand Cayman resident Andrew McAlpine and co-conspirator Ongkaruck Sripetch were arrested by FBI Agents and will face the charges for this alleged conspiracy. The FBI will continue to seek justice for those who are victmized by unscrupulous actors that manipulate our financial markets no matter where they reside.”
The indictment also alleges that, as part of the scheme, the conspirators traded the stock of VMS Rehab and Argus Worldwide between themselves. They made these trades to create the appearance that investors were genuinely interested in and actively trading the stocks. Sadly for victim investors, it was a façade – this manipulative trading was just part of defendants’ effort to entice investors to purchase VMS Rehab and Argus Worldwide stock at artificially high prices.
DEFENDANTS Case Number 20cr0160-H
Ongkaruck Sripetch Age: 45 Gig Harbor, WA
aka King Richards
aka Shelby Saint-Claire
Michael Wexler Age: 74 Ottawa, Ontario, Canada
Ashmit Patel Age: 36 Oakville, Ontario, Canada
Andrew McAlpine Age: 47 Grand Cayman, Cayman Islands
SUMMARY OF CHARGES
Conspiracy to Commit Securities Fraud – Title 18, U.S.C., Section 371
Securities Fraud – Title 15, U.S.C., Sections 78j(b), 78ff, and Title 17, C.F.R., Section 240.10b-5
Manipulative Securities Trading – Title 15, U.S.C., Sections 78i(a)(1), 78ff.
Maximum penalty: Twenty years in prison and $5 million fine
AGENCIES
Federal Bureau of Investigation
Securities and Exchange Commission
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Department of Justice Awards $1 Million in Grants to San Diego County OrganizationsRead the Press Release
Assistant U. S. Attorney Cindy Cipriani (619) 546-9608
NEWS RELEASE SUMMARY – September 21, 2020
SAN DIEGO – U.S. Attorney Robert Brewer announced today that the U.S. Department of Justice has awarded more than $1 million in grants to organizations based in San Diego County that provide resources to victims of domestic violence and sexual assault.
San Diego-based Alliance for Hope International, led by former San Diego City Attorney Casey Gwinn, received $675,000; Valley Center-based Strong Hearted Native Women’s Coalition received $353,615.
“These are significant grants that will help these organizations provide important services to our community,” said U.S. Attorney Robert Brewer. “This funding supports our goal to put an end to violence against women. These strong partnerships with community organizations put us closer to that goal and bring us together for an important cause.”
The Office on Violence Against Women (OVW) Training and Technical Assistance (TA) Initiative provides OVW grantees such as Alliance for Hope International with the expertise and support they need to develop and implement successful state, local, tribal, and campus projects; increase victim safety; and bolster offender accountability. Through cooperative agreements, OVW supports educational initiatives, conferences, peer-to-peer consultations, and targeted assistance, allowing current and potential grantees to learn from experts and one another about how to overcome obstacles and incorporate promising practices in their efforts to address violence against women. In addition, OVW is focused on building the capacity of the criminal and civil justice systems and victim services organizations to respond effectively to domestic violence, dating violence, sexual assault, and stalking and to foster partnerships between organizations that have not traditionally worked together to address violence against women.
With this FY 2020 TA award, Alliance for HOPE International will continue to implement the Identifying, Investigating, and Prosecuting Strangulation Project. During the course of the project period, Alliance will continue to implement the Training Institute on Strangulation Prevention, maintain the project website with new and revised tools and resources for multidisciplinary professions, conduct stand-alone webinars, and provide on-going technical assistance on addressing strangulation in domestic violence and sexual assault cases.
The Tribal Domestic Violence and Sexual Assault Coalitions Program (Tribal Coalitions Program) supports the development and operation of nonprofit, nongovernmental tribal domestic violence and sexual assault coalitions. The Violence Against Women Reauthorization Act of 2013 changed the program from a discretionary program to a mixed formula and discretionary program, with each recognized coalition receiving an equal amount of available funds and organizations that propose to incorporate and operate new tribal coalitions eligible to apply for discretionary funding. This program is funded through statutory set-asides from the STOP Violence Against Women Formula Program (34 U.S.C. § 10446(b)(4)) and the Improving Criminal Justice Responses to Sexual Assault, Domestic Violence, Dating Violence, and Stalking Grant Program (34 U.S.C. § 10461(f)). The Tribal Coalitions Program also includes a statutory set-aside from the Sexual Assault Services Program (SASP), specifically for tribal sexual assault coalitions (34 U.S.C. § 12511(d)(3)(A)).
The Strong Hearted Native Women's Coalition (SHNWC) serves tribal reservations and communities located in the Counties of San Diego, Santa Barbara, San Bernardino, and Riverside in California. Additionally, SHNWC also works with many of the non-native service providers within San Diego and Riverside Counties, including four shelter programs and three rape crisis centers, as well as with San Bernardino-Riverside Indian Health under the Kiicha, Safe Home project. With this award, SHNWC will provide technical assistance, training, and services to the community service area to enhance access to and awareness of services for victims of domestic violence, sexual assault, dating violence, stalking, and sex trafficking.
Child Sex Trafficker Receives Fifteen Years in Federal PrisonRead the Press Release
Assistant U. S. Attorney Katherine McGrath (619) 546-9054
NEWS RELEASE SUMMARY – September 21, 2020
SAN DIEGO – Joseph Price was sentenced in federal court today for sex trafficking a minor in San Diego in July and August 2019, in violation of 18 U.S.C. § 1591. Price was sentenced to fifteen years in custody by U.S. District Judge Larry Alan Burns.
In his plea agreement, Price admitted that on approximately 11 occasions, he caused a 15-year old girl to engage in commercial sex acts in San Diego. On at least one occasion, he admitted that he hit the minor in order to make her complete the sex acts. As part of his plea, Price further admitted to meeting two additional minor females in Texas over “Instagram” and then encouraging them to engage in commercial sex acts. One of these girls also engaged in commercial sex acts in Texas and sent the money she made to Price. Both were being encouraged by Price to leave their family and friends in Texas and travel to San Diego to continue working for Price when law enforcement intervened.
“Sex trafficking of teenagers targets some of the most vulnerable individuals in our community, and leaves in its wake trauma that can affect victims for the rest of their lives,” said U.S. Attorney Robert S. Brewer, Jr. “The U.S. Attorney’s Office is deeply committed to ensuring that justice is done for the victims of these horrible crimes.” Brewer praised prosecutor Katherine McGrath and the San Diego Human Trafficking Task Force for working hard to protect children.
This case is the result of the ongoing efforts of the Violent Crime and Human Trafficking (VCHT) Section. Formed in 2019 by U.S. Attorney Brewer, the VCHT is tasked with leading collaborations between federal and local law enforcement in the investigation and prosecution of cases involving violent crimes, firearms and gang cases; sex trafficking and child exploitation; civil rights, and labor trafficking. The VCHT Section oversees the Southern District of California Coordinators for Project Safe Neighborhoods, Human Trafficking, and Project Safe Childhood.
DEFENDANT Case Number 19-CR-3649-LAB
Joseph Price Age: 24 San Diego
SUMMARY OF CHARGES
18 U.S.C. § 1591, Sex Trafficking of a Minor
Maximum penalty: Mandatory minimum of 10 years and a maximum of life in prison; a maximum fine of $250,000, at least five years of supervised release and up to life.
AGENCY
San Diego Human Trafficking Task Force
Tennessee Doctors Sentenced in $65 Million TRICARE FraudRead the Press Release
Assistant U. S. Attorney Mark W. Pletcher (619) 546-9714
NEWS RELEASE SUMMARY – September 18, 2020
SAN DIEGO – Two doctors, Susan Vergot and Carl Lindblad, were sentenced in federal court today for participating in a health care fraud scheme that bilked TRICARE – the health care program that covers United States service members – out of tens of millions of dollars by prescribing thousands of exorbitantly expensive compounded drugs to patients they never saw or examined.
Dr. Vergot and Dr. Lindblad were sentenced to 24 and 28 months in custody, respectively, by U.S. District Judge Janis L. Sammartino. The custodial portion of each defendant’s sentence will be split between prison and home confinement. Each was also sentenced to pay a $15,000 fine.
"This conspiracy inflicted nearly $65 million in actual losses to TRICARE, the health care benefits program relied upon by millions of our military members and their families," said U.S. Attorney Robert Brewer. "It is hard to imagine a more outrageous example of selfish doctors stealing from the U.S. health care system believing they were exempt from providing necessary care."
"Today’s sentencings demonstrate our resolve to hold those accountable who seek to enrich themselves at the expense of taxpayers," said Michael Mentavlos, Special Agent in Charge of the Defense Criminal Investigative Service, Southwest Field Office. "TRICARE is a critical DoD program providing care for our service members, retirees, and their families. Together with our partners, we will continue to use all means available to root out fraud in this invaluable program."
Compounded medications are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Although compounded drugs are not approved by the Food and Drug Administration (FDA), they are properly prescribed when a physician determines that an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient requires a particular dosage or application or is allergic to a dye or other ingredient.
According to the sentencing memorandum, as part of this conspiracy a team of individuals worked to recruit and pay Marines, primarily from the San Diego area, and their dependents – all TRICARE beneficiaries – to obtain compounded medications that would be paid for by TRICARE. This information was sent to Choice MD, the Tennessee medical clinic that employed Dr. Vergot and Dr. Lindblad. Dr. Vergot and Dr. Lindblad then wrote prescriptions for the TRICARE beneficiaries, despite never examining the patients. Once signed by the doctors, these prescriptions were not given to the straw beneficiaries, but sent directly to particular pharmacies controlled by co-conspirators, most often a small pharmacy, The Medicine Shoppe in Bountiful, Utah, which filled the prescriptions and mailed the drugs to the patients in California.
Between November 2014 and June 2015, Drs. Vergot and Lindblad authorized 6,694 prescriptions, for which their co-conspirators billed TRICARE a staggering $89,725,000. Of this amount, over $65 million was for prescriptions written for straw TRICARE beneficiaries in the Southern District of California.
Defendants Vergot and Lindblad are the second and third defendants sentenced in this matter. CFK, Inc., the corporate owner of The Medicine Shoppe, was sentenced previously. A nurse practitioner, Candace Craven, previously pleaded guilty, as have the patient recruiters, including Joshua Morgan, Kyle Adams, Daniel Castro, Jeremy Syto, and Bradely White. All await sentencing. Jimmy and Ashley Collins, the owners of Choice MD, were charged by Superseding Indictment in June 2020. Their case remains pending. .
DEFENDANTS Case Numbers: 18-CR-1850-JLS, 18-CR-1855-JLS
Carl Lindblad Age: 77 Chattanooga, TN
Susan Vergot Age: 65 Chattanooga, TN
SUMMARY OF CHARGES
Conspiracy to Commit Health Care Fraud – Title 18, U.S.C § 1349
Maximum penalty: Ten years in prison and $250,000 fine or double loss amount, whichever is greater
AGENCY
Defense Criminal Investigative Service
Naval Criminal Investigative Service
IRS Criminal Investigation Division, Gulfport, MS
Federal Bureau of Investigation - Jackson, MS Field Office
Former Sheriff’s Captain Pleads Guilty to Illegally Trafficking Firearms; Admits CorruptionRead the Press Release
Assistant U. S. Attorneys Nicholas Pilchak (619) 546-9709 or Andrew Haden (619) 546-6961
NEWS RELEASE SUMMARY – September 15, 2020
SAN DIEGO – Former San Diego County Sheriff’s Captain Marco Garmo pleaded guilty in federal court today to illegally trafficking in firearms from his office in the Rancho San Diego Station and committing other corrupt acts spanning close to a quarter of his 27 years in the department.
As part of his plea, Garmo also admitted that he tipped off a marijuana dispensary that was about to be searched by Sheriff’s officials – part-owned by his cousin – and pressured another illegal dispensary to hire his friend and co-defendant Waiel Anton as a “consultant,” along with another individual who had agreed to pay Garmo a kickback.
In the plea agreement, Garmo admitted that he engaged in the business of dealing in firearms for profit without a license, which he knew was against the law. He acknowledged acquiring 144 firearms in less than six years, and selling or transferring 98 of them. His unlawful business provided Garmo several forms of compensation. In some transactions, he received a financial profit. In others, Garmo engaged in firearm sales to build good will for future favors related to his anticipated campaign for Sheriff of San Diego County. The charges against Garmo include a series of “straw purchases” in which Garmo falsely told dealers that he was acquiring handguns for himself, when in truth he was sourcing them for associates who could not buy them directly under California law.
Garmo admitted in his plea agreement that as a law enforcement officer, he occupied a position of public trust that he abused to commit these offenses. Specifically, California law provided Garmo with a series of special firearms privileges—like the ability to purchase an unlimited number of handguns per month, and the right to purchase newer-model “off-roster” handguns not approved for initial sale to civilians—and Garmo abused these privileges to conduct his unlicensed firearms dealing.
Garmo also abused his position of trust as the chief law enforcement officer in charge of the Rancho San Diego Station to tip off his cousin—a partner in an illegal marijuana dispensary known as “Campo Greens”—by providing information he had received about an impending search of the cousin’s dispensary.
Garmo admitted lying to federal agents when asked about the tip-off during an interview, saying he would never put his fellow deputies “in harm’s way” by notifying the targets of a search warrant. In the plea, Garmo specifically acknowledged that he provided this information in order to help his cousin and Campo Greens evade law enforcement officers and avoid the seizure of the dispensary’s inventory and cash proceeds. Indeed, as alleged in the indictment, Campo Greens staff heeded Garmo’s secret warning by emptying the store of its valuable products and cash proceeds in advance of the impending search.
According to the indictment, Garmo continued his efforts to unlawfully assist his cousin weeks later, by seeking help from a San Diego County employee when Campo Greens was served with a nuisance abatement letter by County Code Enforcement that would force the illegal dispensary to cease operations. Having received a copy of the letter from his cousin, Garmo texted the County employee to ask “can we push it back?” The County employee answered, “Yes you can.”
As part of today’s guilty plea, Garmo admitted that he also sought to profit from a second unlicensed marijuana dispensary, when the County condemned the property housing the dispensary. In the summer of 2018, Garmo recommended that the dispensary’s landlord hire co-defendant Waiel Anton and another individual—then working for the County—as “consultants” to help get the condemned property reopened. According to Garmo’s plea agreement, Anton would pretend to rent the landlord’s property. In exchange for recommending the County employee as a “consultant,” the employee agreed to pay 10 percent of their fee to Garmo as a kickback. Garmo admitted that, when the proposal fell through and the landlord declined to hire Anton and the County employee, Garmo retaliated by telling the employee to have the County “piss on” the landlord.
According to the indictment, Garmo was a Sheriff’s deputy for the San Diego County Sheriff’s Department for almost 27 years until September 20, 2019. In his plea, Garmo admitted that he was engaged in the unlawful acquisition, transfer, and sale of firearms during his entire tenure as the Captain of the Rancho San Diego Station.
In fact, one of Garmo’s firearms transactions involved a brazen sale inside the Captain’s Office of the Rancho San Diego Station on October 28, 2016. Garmo admitted that on that date, he and co-defendant Giovanni Tilotta (a licensed San Diego gun dealer) sold a Glock handgun, an AR-15 style rifle, and a Smith & Wesson handgun to a local defense attorney inside Garmo’s office. Per the plea agreement, Garmo coordinated backdated paperwork to avoid the 10-day waiting period required by California law for handgun purchases, and Garmo supplied the attorney with San Diego Sheriff’s Department-issued ammunition. Garmo expressly admitted that this sale violated California law, which requires firearms sales to be conducted at the dealer’s premises, a gun show or special event, or at the buyer or seller’s home.
“This case involved stunning and sustained violations of the public trust by a high-ranking law enforcement officer who bent his public position to his private gain,” said Attorney for the United States Linda Frakes. “This office will not hesitate to hold accountable anyone who thinks that their badge or office is a license to break the law. All of the honorable men and women serving their communities in law enforcement deserve no less.”
Part of Garmo’s unlicensed firearms dealing operation involved directing his immediate subordinate, co-defendant Fred Magana, in completing a straw purchase of two firearms for co-defendant Leo Hamel, when Magana was serving as a Lieutenant under Garmo’s command. Magana entered a guilty plea on November 22, 2019 to aiding and abetting Garmo’s firearms trafficking by participating in that transaction. For his part, local jeweler and businessman Leo Hamel pleaded guilty the same day to aiding and abetting Garmo’s unlicensed firearms dealing. In his plea agreement, Hamel admitted working with Tilotta to create falsified records to make firearms straw purchases appear legitimate. Hamel also acknowledged that Garmo benefited from his arrangement with Hamel by securing Hamel’s future support for Garmo’s anticipated campaign for Sheriff of San Diego County.
According to the indictment, Waiel Anton aided and abetted Garmo’s unlicensed firearms dealing by helping Garmo’s firearms buyers apply for permits to carry a concealed weapon (“CCW”) as part of Anton’s “consulting” business. Anton’s “consulting” arrangement secured early CCW appointments for his clients to avoid a months-long backlog at the licensing desk—a benefit that Anton provided by leveraging his relationship with a member of the licensing staff to whom he had made an unlawful cash payment. In his plea today, Garmo admitted Anton’s role, and acknowledged that Anton would pay Garmo a kickback of $100 per CCW applicant that Garmo referred to Anton. Garmo expressly admitted receiving such a kickback in early February 2019 in exchange for referring an undercover ATF agent to Anton for his “consulting” services, and then lying to federal agents asking about money Garmo had received from Anton.
Anton is also charged with obstruction of justice for repeatedly urging one of his “consulting” clients—in reality, an undercover agent—to lie to federal investigators following the search of Anton’s residence in February. Per the indictment, Anton exhorted the undercover agent not to tell investigators about the $1,000 in cash Anton had charged the undercover agent to fast-track his CCW appointment, and to claim instead that Anton was helping him with his application because they were friends.
Garmo is set to be sentenced by U.S. District Judge Gonzalo P. Curiel on December 9, 2020 at 8:30 a.m. The next hearing in the ongoing case against Anton and Tilotta is set for October 8, 2020.
Garmo agreed to forfeit 58 firearms and 5,385 rounds of ammunition as part of his plea agreement. In total, approximately 291 firearms and 131,458 rounds of ammunition have been forfeited as part of this investigation.
Frakes praised the lead prosecutors on the case, Assistant U.S. Attorneys Nicholas Pilchak and Andrew Haden, as well as the dedicated investigators from the ATF and FBI. Frakes added that the U.S. Attorney’s Office wishes to extend its sincerest gratitude to the San Diego County Sheriff’s Department for initiating this investigation, and for their assistance and support throughout its course.
“ATF’s committed to investigating and preventing firearms trafficking, and ensuring federal firearms laws are followed so criminals do not acquire guns,” said ATF Los Angeles Field Division Special Agent in Charge Monique Villegas. “ATF will hold those who sell guns illegally accountable. ATF strives to keep our communities safe from gun-related crime.”
“Rather than fulfill his sworn duty to uphold the law, former San Diego Sheriff's Department Captain Marco Garmo used his position to benefit himself and those he sold weapons to in his unlawful firearms business,” said FBI Special Agent in Charge Suzanne Turner. “Garmo wore the badge, but ultimately, he failed his department and the public’s trust. Today’s plea demonstrates that no one is above the law – not even a high-ranking law enforcement official. At a time when many in the public are questioning their confidence in law enforcement, the FBI remains committed to vigorously pursuing corrupt and unlawful actions by those who wear the badge. Public confidence in law enforcement and upholding the integrity of dedicated law enforcement officers who honorably serve each and every day is a priority for the FBI.”
U.S. v. Garmo, et. al, 19-CR-4768-GPC
Defendants
Morad Marco Garmo, 52 years old
Leo Joseph Hamel, 62 years old
Giovanni Vincenzo Tilotta, 38 years old
Fred Magana, 42 years old
Waiel Yousif Anton, 35 years old
Summary of Charges
Title 18, U.S.C., Sec. 922(a)(1)(A) – Engaging in the Business of Dealing in Firearms Without a License
Maximum Penalty: Five years in prison
Investigating Agencies
Bureau of Alcohol Tobacco Firearms & Explosives (ATF)
Federal Bureau of Investigation (FBI)
*The charges and allegations contained in an indictment are merely accusations. The defendants are considered innocent unless and until proven guilty.
Brother of Rabbi Yisroel Goldstein Admits to $700,000 Tax Evasion ConspiracyRead the Press Release
Assistant U. S. Attorneys Emily W. Allen (619) 546-9738, Oleksandra Johnson (619) 546-9769, and Randy Grossman (619) 546-6761
NEWS RELEASE SUMMARY – September 14, 2020
SAN DIEGO – Mendel Goldstein, the owner of a videography business based in Brooklyn, New York, pleaded guilty in federal court today to tax evasion charges relating to a long-running conspiracy with his brother, Rabbi Yisroel Goldstein.
Until around 2018, Yisroel Goldstein was the director and head rabbi at Chabad of Poway, a tax-exempt organization that the brothers used to divert Mendel Goldstein’s income and conceal more than $700,000 in earnings from the IRS. They hid the money by depositing it into Chabad accounts, then secretly funneling it back to Mendel Goldstein by writing checks to fictitious names like “Mr. Green,” “Mr. Gold,” or “Mr. Fish.”
According to his plea agreement, beginning in 2012, Mendel Goldstein agreed with his brother Yisroel Goldstein that Mendel Goldstein could deposit his freelance videography income directly into bank accounts owned by Chabad of Poway. This allowed Mendel Goldstein to avoid reporting his entire income to the IRS. In return, the brothers agreed that Yisroel Goldstein would keep 10 percent of Mendel Goldstein’s income as his fee—amounting to about $70,000. Mendel Goldstein saved approximately $155,881 in taxes he should have paid to the IRS.
As Mendel Goldstein admitted today, the conspiracy operated for several years until December 2018. At that time, Yisroel Goldstein discovered that he was under investigation for tax evasion and other crimes. He warned Mendel Goldstein about the investigation and encouraged him to conceal his tax evasion by filing delinquent tax returns.
In July 2020, Yisroel Goldstein, along with five other associates, 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. Among the schemes he admitted as part of his guilty plea, Yisroel Goldstein outlined the tax avoidance conspiracy he operated with Mendel Goldstein. Yisroel Goldstein has agreed to cooperate with the ongoing investigation. He is scheduled to be sentenced by U.S. District Judge Cynthia Bashant on April 26, 2021.
“People who cheat on their taxes are cheating all honest taxpayers,” said U.S. Attorney Robert Brewer. “We will not tolerate the exploitation of non-profit and religious organizations to line the perpetrators’ pockets at society’s expense.”
“The law clearly states that income is subject to tax and must be reported, from whatever source derived, including compensation for services,” said Ryan L. Korner, Special Agent in Charge of IRS Criminal Investigation. “Mr. Mendel Goldstein admitted that he broke the law by hiding over $700,000 in income and willfully evading his taxes for over six years. His tax crime is made even more egregious because he exploited the tax-exempt status of Chabad of Poway to cheat the United States. Today’s guilty plea demonstrates that the IRS will diligently continue our important enforcement efforts despite the ongoing challenges posed by Covid-19. We will work alongside our law enforcement partners in a collective effort to enforce the law and ensure the public trust.”
“This investigation uncovered a conspiracy of crimes involving fraud, deception and evasion that used the cloak of a tax-exempt religious organization, the Chabad of Poway, for personal financial benefit,” said Suzanne Turner, Special Agent in Charge of FBI's San Diego Field Office. “The FBI takes seriously the harm that financial crimes have on our country. We are all expected to follow the rule of law, and the FBI is charged with enforcing these laws. Today, Mendel Goldstein has been reminded of this important lesson, as he acknowledged with his guilty plea.”
Judge Bashant presided over today’s arraignment and guilty plea. Mendel Goldstein is next scheduled to appear at a sentencing hearing on December 14, 2020 at 9 a.m.
NEW DEFENDANT AND SUMMARY OF NEW CHARGES
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
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
INVESTIGATING AGENCIES
Federal Bureau of Investigation, Internal Revenue Service
U.S. DOJ Office of Violence Against Women Awards $363,223 to Pauma Band of Mission Indians to support Criminal Justice Response to Domestic ViolenceRead the Press Release
Assistant U. S. Attorney Kim Thoa Hoang (619) 546-9397
NEWS RELEASE SUMMARY – September 11, 2020
SAN DIEGO – U.S. Attorney Robert Brewer announced today that the U.S. Department of Justice Office of Violence Against Women has awarded $363,223 to the Pauma Band of Mission Indians to support the tribe’s criminal justice response to domestic violence.
“This grant will enable the Pauma Band’s criminal justice system to ensure both victim safety and offender accountability,” said U.S. Attorney Robert Brewer. “All parties must receive the full measure of rights guaranteed by the criminal justice system when violence occurs, and importantly the tribes can provide this in a culturally competent way.”The Office of Violence Against Women currently administers 19 grant programs authorized by the Violence Against Women Act (VAWA) of 1994 and subsequent legislation. These grant programs are designed to develop the nation’s capacity to reduce domestic violence, dating violence, sexual assault, and stalking by strengthening services to victims and holding offenders accountable.
The Violence Against Women Reauthorization Act of 2013 (VAWA 2013) included a provision recognizing the authority of participating tribes to exercise “special domestic violence criminal jurisdiction” (SDVCJ) over certain defendants, regardless of their Indian or non-Indian status, who commit crimes of domestic violence or dating violence or violate certain protection orders in Indian country. The Act also specified the rights that a participating tribe must provide to defendants in SDVCJ cases. The Grants to Tribal Governments to Exercise Special Domestic Violence Criminal Jurisdiction (Tribal Jurisdiction) Program is designed to assist Indian tribes in exercising SDVCJ.
Through this grant program, Indian tribes receive support to exercise SDVCJ and technical assistance for planning and implementing changes in their criminal justice systems necessary to exercise the jurisdiction. The program encourages collaborations among tribal leadership, tribal courts, tribal prosecutors, tribal attorneys, tribal defenders, law enforcement, probation, service providers, and other partners to incorporate systemic change that ensures victim safety and offender accountability.
The Pauma Band of Mission Indians is a federally recognized Tribal Government. The Pauma-Yuima reservation is located in Pauma Valley in northeastern San Diego County, California. The tribe, and its internal and external partners, are committed to developing, implementing, and exercising SDVCJ. Through this project, the Pauma Tribe will dedicate a Domestic Violence Court Program Manager to lead the effort with the partnership of the Pauma Tribal Council, Tribal Administration, Tribal Attorney, the Pauma Police Department, the Domestic Violence Program, and the Sexual Assault Response Team.
Through the Pauma Domestic Violence Court Project the partners will engage in activities focused on: strengthening the tribal criminal justice system in order to implement and exercise SDVCJ; providing indigent criminal defendants, in SDVCJ proceedings, with effective assistance of licensed defense counsel; ensuring jurors are summoned, selected, and instructed appropriately; and affording victims of domestic violence, dating violence, and violations of protection orders crime victim rights. Specific activities include, but are not limited to: completing the required planning period to engage all required and key partners in a planning process and MOU development; participating in the Inter-Tribal Technical Assistance Working Group (ITWG) on SDVCJ; participating in on-site and other training and technical assistance opportunities; and submitting the SDVCJ supporting certifications for OVW review and approval.
U.S. Attorney Robert Brewer Announces $415,000 Award to Improve School SafetyRead the Press Release
COPS Office Public Affairs (202) 514-9079 or [email protected]
NEWS RELEASE SUMMARY – September 10, 2020
SAN DIEGO – U.S. Attorney Robert Brewer of the Southern District of California announced today that the La Mesa-Spring Valley School District received $415,000 from the Department of Justice’s Office of Community Oriented Policing Services (COPS Office) School Violence Prevention Program (SVPP).
Nationally, the COPS Office SVPP awarded nearly $50 million in school safety funding. SVPP provides up to 75 percent funding for school safety measures in and around primary and secondary schools and school grounds.
“These grants will help the La Mesa-Spring Valley School District and many others across the country keep our children out of harm’s way,” said U.S. Attorney Robert Brewer. “There is nothing more important than safeguarding our children and schools.”
“With the new school year underway, the safety of our nation’s students remains paramount,” said COPS Office Director Phil Keith. “Although this school year may look different at the start, now is the ideal time to make preparations to enhance school safety for when all of our children are back in the classroom.”
The Students, Teachers, and Officers Preventing School Violence Act of 2018 (STOP School Violence Act of 2018) gave the COPS Office authority to provide awards directly to states, units of local government, Indian tribes, and public agencies (such as school districts and law enforcement agencies) to improve security at schools and on school grounds in the jurisdiction of the grantee through evidence-based school safety programs. The [x number] award[s] announced today can be used for coordination with law enforcement; training for local law enforcement officers to prevent student violence; metal detectors, locks, lighting, and other deterrent measures; technology for expedited notification of local law enforcement during an emergency; and other measures that provide a significant improvement in security. The full list of SVPP awards can be found here: https://cops.usdoj.gov/pdf/2020AwardDocs/svpp/Award_List.pdf.
In addition to the school safety grants announced today, the COPS Office School Safety Working Group, which is composed of representatives from eight national law enforcement organizations, has identified 10 essential actions that can be taken by schools, school districts, and law enforcement agencies to help prevent critical incidents involving the loss of life or injuries in our nation's schools and to respond rapidly and effectively when incidents do occur. The Ten Essential Actions to Improve School Safety are applicable to school shootings as well as to other areas of school safety, including natural disasters and traumatic events such as student suicide. Adopting policies and practices based on the recommendations in this publication can help make school communities safer and save lives.
*******
The COPS Office is the federal component of the Department of Justice responsible for advancing community policing nationwide. Since 1994, the COPS Office has invested more than $14 billion to advance community policing, including grants awarded to more than 13,000 state, local and tribal law enforcement agencies to fund the hiring and redeployment of more than 134,000 officers and provide a variety of knowledge resource products including publications, training and technical assistance.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
###
Department of Justice Awards $16 Million in Grants to Advance Community Policing Efforts and Provide Active Shooter Training to First Responders Across the CountryRead the Press Release
COPS Office Public Affairs (202) 514-9079; [email protected]
NEWS RELEASE SUMMARY – September 9, 2020
SAN DIEGO – The Department of Justice’s Office of Community Oriented Policing Services (COPS Office) today announced nearly $8 million in funding to advance the practice of community policing in law enforcement, including $40,000 to the La Mesa Police Department.
Community Policing Development (CPD) program funds are used to develop the capacity of law enforcement to implement community policing by providing guidance on promising practices through the development and testing of innovative strategies; building knowledge about effective practices and outcomes; and supporting new, creative approaches to preventing crime and promoting safe communities. The COPS Office also announced a new $8.5 million award under the Preparing for Active Shooter Situations (PASS) program to the Advanced Law Enforcement Rapid Response Training (ALERRT) Center at Texas State University to provide multi-disciplinary, scenario-based active shooter training to first responders.
“One of the top priorities of the Department of Justice is to keep communities safe from violent crime,” said COPS Office Director Phil Keith. “The two grant programs announced today will promote promising best practices to advance community policing, which is a proven public safety approach, and provide much-needed training against active shooters, which remain a constant threat to the citizens of this great country.”
“This funding will provide crucial training for the La Mesa Police Department and many other law enforcement agencies across the country,” said U.S. Attorney Robert Brewer. “It is our top priority to keep our communities safe.”
Highlights of today’s 24 CPD awards include $500,000 to the International Association of Chiefs of Police to document and advance victim support services; $1.3 million to the University of Tennessee to establish a rural law enforcement training center; and $500,000 to Movement Forward, which is a national law enforcement and faith-based partnership program. Additionally, $1.3 million is being awarded in partnership with the U.S. Department of Transportation’s National Highway Traffic Safety Administration to expand training opportunities for officers and create updated resource guides for law enforcement on safe and effective vehicular pursuits. The full list of awards is available on the COPS Office website at: https://cops.usdoj.gov/pdf/2020AwardDocs/cpd/Award_List.pdf
Since 2017, COPS Office funding through the PASS program has provided active shooter training for approximately 53,000 first responders across the nation. The additional $8.5 million announced today will fund training for roughly 20,000 additional first responders. Additional information about the PASS program can be found here: https://cops.usdoj.gov/pdf/2020AwardDocs/pass/Award_List.pdf. The COPS Office is the federal component of the Department of Justice responsible for advancing community policing nationwide. Since 1994, the COPS Office has invested more than $14 billion to advance community policing, including grants awarded to more than 13,000 state, local and tribal law enforcement agencies to fund the hiring and redeployment of more than 134,000 officers and provide a variety of knowledge resource products including publications, training and technical assistance.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
U.S. DOJ Bureau of Justice Assistance Awards $265,930 for Local Project Safe Neighborhoods Prevention ProgramsRead the Press Release
NEWS RELEASE SUMMARY – September 3, 2020
SAN DIEGO – U.S. Attorney Robert Brewer announced today that the U.S. Department of Justice (DOJ) Bureau of Justice Assistance has awarded $265,930 to local non-profit organizations to lead programs that will break the cycle of crime and keep youth and reentering adults from being involved in gangs and crime, enabling them to reach their full potential. This is the first in a series of awards under DOJ’s Project Safe Neighborhoods (PSN) for the Southern District of California (SDCA). The awardees in this grant cycle are the Boys and Girls Club of Oceanside, El Centro Police Athletic League, the Kroc Institute for Peace and Justice, Reality Changers, STAR Police Athletic League, and Youth Empowerment. The grant funding will help these non-profits deter crime, provide support and expand mentoring programs within our community.
Project Safe Neighborhoods (PSN) is designed to create and foster safer neighborhoods through a sustained reduction in violent crime, including, but not limited to, addressing criminal gangs and the felonious possession and use of firearms. The program’s effectiveness depends upon the ongoing coordination, cooperation, and partnerships of local, state, tribal, and federal law enforcement agencies – and the communities they serve – engaged in a unified approach led by the U.S. Attorney in all 94 districts.
“Reducing violent crime requires a collaborative, multi-layered strategy that includes prevention as well as enforcement,” said U.S. Attorney Robert Brewer. “Many are recruited into gang life at a young age because they lack role models and mentors. These awardees are effectively reaching at risk youth and reentering adults by building trusting relationships and showing the path toward a fulfilling life that does not involve gangs and criminal behavior. The end result? Brighter futures and safer neighborhoods.”
The nonprofit recipients will help deter gang involvement, prevent criminal activity and provide resources to local communities. The Kroc Institute of Peace and Justice award will conduct research into PSN program outcomes, helping to ensure an evidence-based, data-driven approach to local prevention efforts. The Children’s Initiative, which works to ensure that San Diego’s low-income and under-served children and families reach their full potential, is serving as the fiscal agent to all awardees in this grant cycle and all forthcoming grant cycles.
- The Boy and Girls Club of Oceanside (BCGO) works to inspire, develop and enrich young people aged 5-18 so they can reach their full potential as confident, responsible, caring members of society. The PSN grant will assist the Oceanside Youth Partnership (OYP), a collaborative program of BCGO and the Oceanside Police Department. OYP is a character building and mentoring program designed to deter gang involvement and prevent and reduce juvenile arrests. “We are so grateful to receive a PSN grant. These funds will allow us to continue to work collaboratively with the Oceanside Police Department to deliver the Oceanside Youth Partnership program. Together, we will be able to reach out to more at-risk youth and work to keep them on the right path and out of the juvenile justice system,” said Jodi Diamond, BCGO Chief Executive Officer.
- Reality Changers is a non-profit that provides youth from disadvantaged backgrounds with academic support, financial assistance and leadership training. Reality Changers will use the award to enhance its 8th grade College Town Program, which prepares low-income, struggling 8th -11th graders to be college-ready by 12th grade. Through workshops, tutoring, social and emotional development programs, Reality Changers helps to keep youth on a positive path, away from gangs and violent crime.
- The STAR Police Athletic League (STAR/PAL) is a non-profit that aims to empower underserved youth and build a safer community by engaging with law enforcement and collaborative partners. PSN funding will assist with STAR Pal leadership development, mentoring, crime prevention education, life skills and positive sports team activities.
- Youth Empowerment (YE) is a non-profit that provides services for justice involved youth and adults living in the communities of City Heights and Southeast San Diego. YE focuses on mentoring youth and adults from the reentry population to aide them in successfully transitioning back into their communities and not recidivate. PSN funding will further support their efforts and provide more services to the community they serve. “Youth Empowerment helps support and transform communities and builds public safety through community mentoring, systems engagement, and advocacy,” said President/CEO Arthur Soriano. “All our staff have experience in the justice system and this experience is going to have an impact in the communities we serve. Investing in grassroots efforts encourages and promotes civic engagement and restoration with solution based approaches."
- El Centro Police Athletic League (PAL) is a non-profit that provides youth aged 5 – 17 with recreational and educational programs as alternatives to criminal delinquency, drugs and gangs. The award will help build closer relationships between youth and law enforcement, reduce juvenile crimes and decrease the lure of gangs and drug use through soccer, boxing, martial arts, golf, mentoring program, youth leadership program, after school tutoring, and summer camp.
In addition to the considerable financial support announced today, the U.S. Attorney’s Office for the SDCA will continue to build relationship with community partners and use all resources available to help deter crime and make our communities safer for everyone.
The SDCA’s PSN grants were competitively awarded based on the recommendations of U.S. Attorney Brewer’s PSN Executive Committee, which includes former Police Chiefs David Bejarano and Shelley Zimmerman and retired Assistant U.S. Attorney (AUSA) Paul Cook. The grants announced today are part of Project Safe Neighborhoods, a program that brings together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer. The U.S. Department of Justice reinvigorated PSN in 2017, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
- The Boy and Girls Club of Oceanside (BCGO) works to inspire, develop and enrich young people aged 5-18 so they can reach their full potential as confident, responsible, caring members of society. The PSN grant will assist the Oceanside Youth Partnership (OYP), a collaborative program of BCGO and the Oceanside Police Department. OYP is a character building and mentoring program designed to deter gang involvement and prevent and reduce juvenile arrests. “We are so grateful to receive a PSN grant. These funds will allow us to continue to work collaboratively with the Oceanside Police Department to deliver the Oceanside Youth Partnership program. Together, we will be able to reach out to more at-risk youth and work to keep them on the right path and out of the juvenile justice system,” said Jodi Diamond, BCGO Chief Executive Officer.
Fraud Alert: Scammers Who Claim to be with the Department of Justice are Preying on the ElderlyRead the Press Release
U.S. Attorney Robert S. Brewer Jr. (619) 557-5690
NEWS RELEASE SUMMARY – September 4, 2020
SAN DIEGO – The U.S. Department of Justice has received multiple reports that individuals claiming to represent the DOJ are calling members of the public as part of an imposter scam. The department strongly encourages the public to remain vigilant and not to provide personal information during these calls, which appear to target the elderly.
Reports to the National Elder Fraud Hotline indicate these scammers falsely represent themselves as Department of Justice investigators or employees and attempt to obtain personal information from the call recipient, or they leave a voicemail with a return phone number. The return phone number directs users to a recorded menu that matches the recorded menu for the department’s main phone number. Eventually, the user reaches an “operator” who steers the user to someone claiming to be an investigator. That “investigator” then attempts to gain the user’s personal information.
“We don’t want anyone – particularly our seniors – to be fooled by scammers posing as employees of the Department of Justice,” said U.S. Attorney Robert Brewer. “Please protect yourself! Do not be fooled by scammers, and don’t give out your personal information to a random caller claiming to be a DOJ employee.”
“Phone scams are an ugly and pervasive act of victimization. The scams being reported to our National Elder Fraud Hotline are especially heinous because they show the perpetrators are preying upon one of the most vulnerable segments of our society – the elderly,” said Director Jessica Hart of the Office of Justice Programs’ Office for Victims of Crime (OVC). “As if this were not despicable enough, the scammers do so posing as employees of the Justice Department, usurping public trust in the agency that serves as a bastion of fairness and lawfulness while these scams exploit the elderly for financial gain. The first step to identifying these criminals is to have their crimes reported.”
Those who receive these calls are encouraged not to provide personal information and to report these scams to the FTC via their website or by calling 877–FTC–HELP (877-382-4357). Fraud can also be reported to the FBI for law enforcement action at https://www.justice.gov/criminal-fraud/report-fraud.
The National Elder Fraud Hotline is a resource created by OVC for people to report fraud against anyone age 60 or older. Reporting certain financial losses due to fraud as soon as possible, and within the first 2–3 days, can increase the likelihood of recovering losses. The hotline is open seven days a week. For more information about the hotline, please visit https://stopelderfraud.ovc.ojp.gov/
San Diego Woman Created Fake “Employees” to Swindle CARES Act Funds; Pleads Guilty to Federal Fraud ChargesRead the Press Release
NEWS RELEASE SUMMARY – September 1, 2020
SAN DIEGO – Nikole L. Edwards – the founder of Social Savvy Marketing – pleaded guilty today to making false statements to the Small Business Administration. In court, Edwards admitted to submitting fake tax records and payroll information in order to secure a loan under the Paycheck Protection Program (“PPP”).
The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act authorized the Small Business Administration to guarantee hundreds of billions of dollars in forgivable loans to small businesses to pay employees through the PPP. In order to obtain a PPP loan, a qualifying business has to provide its average monthly payroll expenses and number of employees, along with supporting documentation. These figures are used to calculate the amount of money the small business is eligible to receive under the PPP. A business’s PPP loan application is received and processed, in the first instance, by a participating financial institution, then transmitted to the Small Business Administration to assess the applicant’s eligibility.
In April and May 2020, Edwards applied for tens of thousands of dollars of PPP loans with three financial institutions. In her applications, Edwards falsely claimed that Social Savvy Marketing employed two individuals who earned annual salaries of $75,000 and $50,000. In reality, Social Savvy Marketing did not have any employees. Edwards also provided false addresses and Social Security numbers for her purported employees. To further support her false claims, Edwards submitted fake W-2s.
After a representative from one financial institution told Edwards that Social Savvy Marketing could not receive a PPP loan, Edwards lied and said: “This is a lifeline for my employees and my business and we won’t survive without it.” Despite not having any employees, Edwards ultimately succeeded in obtaining a $19,583 PPP loan. As part of her plea agreement, Edwards is required to repay the entire $19,583 loan.
“The PPP is designed to help struggling businesses meet legitimate payroll obligations, not to enrich sole proprietors engaging in outright fraud,” said U.S. Attorney Robert Brewer. “We are working diligently with our law enforcement partners to investigate and prosecute those who abuse this critical lifeline for the nation’s businesses, workers and economy.”
"The Paycheck Protection Program was designed to provide dire relief to business owners and employees suffering during the pandemic,” said Suzanne Turner, Special Agent in Charge of the FBI San Diego Field Office. “The FBI will not tolerate anyone who steals government funds intended to assist Americans who are struggling financially and is committed to tackling COVID-related fraud head on with our law enforcement partners.”
Edwards is scheduled to appear for sentencing before U.S. District Judge Gonzalo Curiel at November 18, 2020 at 8:30 a.m.
The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent. PPP loan proceeds must be used by businesses on payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and principal to be entirely forgiven if the business spends the loan proceeds on these expense items within a designated period of time after receiving the proceeds and uses a certain amount of the PPP loan proceeds on payroll expenses.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
DEFENDANT: Case Number 20-CR-2637-GPC
Nikole L. Edwards Age: 40 San Diego, California
SUMMARY OF CHARGES
False Statements to the Small Business Administration – Title 15, U.S.C., Section 645
Maximum penalty: 2 years’ imprisonment and $5,000 fine
AGENCY
Federal Bureau of Investigation
Small Business Administration, Office of Inspector General