Southern District of California
Press releases recorded for this federal judicial district.
Law Enforcement Issues Public Safety Warning about Extreme Danger of FentanylRead the Press Release
For Further Information, Contact:
Assistant U. S. Attorney Larry Casper (619) 546-6734EL CENTRO – The region’s highest-ranking law enforcement officials joined together today to issue a dire public safety alert about the extreme danger of fentanyl-laced pills following the fatal overdose of a 15-year-old boy, the youngest person known to have died as a result of fentanyl in Imperial County.
U.S. Attorney Robert Brewer announced that a complaint was unsealed Wednesday charging 20-year-old Lorenzo Anthony Garcia of Brawley in the overdose death of a young football player from Central Union High School. Garcia was arraigned in federal court in El Centro Wednesday before U.S. Magistrate Judge Ruth Bermudez-Montenegro.
According to the complaint, on the morning of October 8, 2019, the victim’s grandfather tried to wake him up for school, but the child was lifeless and unresponsive. Garcia was allegedly dealing counterfeit blue M30 oxycodone pills laced with fentanyl – known on the street as “blues.” He was also selling Xanax, methamphetamine and other illicit narcotics. Some of his customers were high school students. The complaint alleges that Garcia continued to distribute the counterfeit pills even though he knew about the overdose death.
Fentanyl is 30 to 50 times more powerful than heroin and so dangerous that, in its purest form, even a tiny amount can be deadly. The price of fentanyl – whether as powder or pill – is declining, meaning that both forms are increasingly available in our community.
“There is no margin for error when kids make a mistake with fentanyl, and the consequences can be deadly,” said U.S. Attorney Robert Brewer. “Parents! Get educated and teach your children the deadly consequences of taking pills that are not prescribed to them. The pills might be laced with fentanyl, and fentanyl can kill them!”
“The most effective way to prevent tragic deaths like this one is by talking to your kids about drugs,” said DEA Special Agent in Charge John W. Callery. “Tell your kids about the consequences of using drugs and use this story as an example. Because not only did a 15-year-old boy lose his life to drugs, a 20-year-old young man will possibly lose the next 20 years of his life in jail.”
“This case is a tragic reminder of the fentanyl crisis in the United States,” said El Centro Police Chief Brian Johnson. “The senseless death of a child is a sobering reminder that parents, teachers, and all public safety professionals need to work together to educate our youth and help encourage them to make good decisions about drugs and other dangerous behavior. We hope this tragedy will be a reminder to our youth to not experiment with drugs, alcohol, and tobacco products, all which are harmful to the developing young body and brain. If you know someone is using drugs, be a buddy and have the courage to get them help so we can prevent another tragedy. Working together we can all make a difference.”
“I would like to personally thank U.S. Attorney Robert Brewer for the action his office has taken regarding the senseless death of this young man,” said Imperial County District Attorney Gilbert Otero. “Under his leadership, our Federal counterparts have actively assisted local law enforcement in holding violators accountable for their actions. In the end, those who benefit the most are the victims and the public as a whole. My staff and I look forwarding to continue the relationship both offices have established.”
In San Diego County, officials expect the final tally for fentanyl overdose deaths in 2019 to reach 150. That’s up more than 600 percent from five years ago, and more than 60 percent from 2018. And the rapid increase continues in 2020.
So far, Imperial County has not experienced the high number of fentanyl overdose deaths seen in other regions, but the numbers are on the rise.
“We don’t want the Imperial Valley to mirror the San Diego trend,” U.S. Attorney Brewer said. “Just five years ago, San Diego had 21 fentanyl-related overdose deaths. Just when we think it can’t get any worse, the latest numbers prove us wrong. We are already on pace in 2020 to greatly exceed 2019. I am alarmed and devastated by the dramatic surge in trafficking activity and deaths, particularly of young people.”
The Southern District of California, which includes San Diego and Imperial counties, is the fentanyl gateway to the rest of the country. Fentanyl is crossing the border in this district in record quantities. Mexican drug trafficking organizations are using San Diego ports to smuggle fentanyl in record numbers.
Just five years ago, there were only six fentanyl seizures, collectively 68 pounds, by border officials in the Southern District of California. In 2019, however, there were 214 seizures, totaling 1,792 pounds. That’s an increase of more than two thousand five-hundred percent.
Law enforcement officials are working hard to close this gateway with interdiction, prosecution and education. “Every time we have a fatal overdose, we will be pursue the dealer,” Brewer said. “We are using every available criminal and civil tool to combat this deadly epidemic and stop these tragic losses.”
Under federal law, sellers and suppliers of drugs that cause death or serious bodily injury may face a 20-year mandatory minimum sentence. In recent years, the U.S. Attorney’s Office has charged 18 alleged dealers with that 20-year mandatory minimum offense – including today’s case.
United States Attorney Brewer urged users who opt to disregard his dire warning to seek Narcan, a drug that can reverse the effects of opioid overdose and save lives. Narcan is available by prescription and can be purchased at many pharmacies without a prescription.
People who need help with mental health including substance use disorder, suicide prevention, medication needs, and more can call the San Diego County Crisis line at 888-724-7240. It’s open seven days a week, 24 hours a day.
DEFENDANT Case Number 20mj8654
Lorenzo Anthony Garcia Age: 20 Brawley, CA
SUMMARY OF CHARGES
Distribution of Fentanyl Resulting in Death – Title 21, U.S.C., Sections 841(a)(1) and 841(b)(1)(C)
Maximum penalty: Mandatory Minimum 20 years in prison and maximum of life and $1,000,000 fine
AGENCIES
Drug Enforcement Administration
El Centro 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.
Federal Jury Convicts San Diego Man for 2017 Armed Robbery SpreeRead the Press Release
NEWS RELEASE SUMMARY – March 11, 2020
SAN DIEGO – Today, a federal jury found Juan Marquis Holiday, a San Diego resident, guilty of robbing and attempting to rob ten local businesses by displaying a firearm during the robberies and, on five occasions, discharging a firearm. The jury returned their verdict after hearing the testimony of 37 witnesses, including the individuals who were in those businesses at the time of the robberies and attempted robberies.
“When someone uses a firearm and repeatedly terrorizes community members, bringing that person to justice is a top priority,” said U.S. Attorney Robert Brewer. “We are gratified to have secured a conviction that not only holds the defendant accountable for his violent crimes, but brings a measure of greater security to our communities. I’d like to thank Assistant U.S. Attorneys Shital Thakkar and Matthew Brehm and our law enforcement partners for their outstanding work on this case.”
During trial before District Judge Anthony J. Battaglia, dozens of witnesses explained to the jury various aspects of the defendant’s crime spree. Those witnesses included: victims from the local businesses, first responders, evidence technicians, DNA and ballistics experts from the San Diego Police Department and the San Diego Sherriff’s Department, and other federal agents. More than twelve victims described being threatened with a firearm during the robberies, which occurred in January and April of 2017. Some of those victims also described how the defendant fired shots past their heads, and physically assaulted them, including with the use of his pistol.
Holiday’s co-defendant, Don Wayne Jones III, pled guilty in 2018 and was sentenced to 30 years and 1 day in custody.
“The FBI has federal jurisdiction under the Hobbs Act to investigate violent criminal acts affecting interstate commerce,” said Omer Meisel, Acting Special Agent-in-Charge for the San Diego Division of the FBI. “In this case, our Agents worked closely with our local partners at the San Diego Police Department and San Diego Sheriff’s Department to bring justice for the victims of this violent crime and bring safety to our community.”
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 Robert S. Brewer, Jr., 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, labor trafficking and alien smuggling. The VCHT Section oversees the Southern District of California Coordinators for Project Safe Neighborhoods, Human Trafficking, and Project Safe Childhood.
DEFENDANT Case Number 17cr1370-AJB
Juan Marquis Holiday Age: 27 San Diego, CA
SUMMARY OF CHARGES
Interference with Commerce by Threats or Violence – Title 18, U.S.C., Section 1951(a)
Maximum penalty: 20 years’ imprisonment and $250,000 fine
Attempted Interference with Commerce by Threats or Violence – Title 18, U.S.C., Section 1951(a)
Maximum penalty: 20 years’ imprisonment and $250,000 fine
Brandishing a Firearm During and in Relation to a Crime of Violence –
Title 18, U.S.C., Section 924(c)
Maximum penalty: life imprisonment; a mandatory minimum seven years in prison; and $250,000 fine
Discharging a Firearm During and in Relation to a Crime of Violence –
Title 18, U.S.C., Section 924(c)
Maximum penalty: life imprisonment; a mandatory minimum ten years in prison; and $250,000 fine
AGENCIES
Federal Bureau of Investigation
San Diego Police Department
San Diego Sherriff’s Department
La Mesa Police Department
VICTIM BUSINESSES
Robbery No.
Date
Victim
Address
1
1/5/2017
Arco Gas Station
3724 Del Sol Blvd, San Diego, CA
2
1/11/2017
Parry Liquor
4707 Federal Blvd., San Diego, CA
3
1/11/2017
Par Liquor
5055 Federal Blvd., San Diego, CA
4
1/11/2017
Greene Cat Liquor
5102 Imperial Avenue, San Diego, CA
5
4/6/2017
Market at the Ranch
10299 Scripps Trail, San Diego, CA
6
4/19/2017
7-Eleven
9365 Jamacha Blvd., Spring Valley, CA
7
4/20/2017
Eastridge Liquor
7705 University Ave. La Mesa, CA
8
4/20/2017
Apollo Market
2327 Reo Drive, San Diego, CA
9
4/20/2017
G&M Market
8903 Jamacha Rd., Spring Valley, CA
10
4/22/2017
Victoria’s Mexican Grill
1912 Coronado Ave., San Diego, CA
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Former Biologist Admits to Stealing Hundreds of Thousands of Dollars from San Diego ZooRead the Press Release
Assistant U.S. Attorney Robert S. Huie (619) 546-7053
NEWS RELEASE SUMMARY – March 5, 2020
SAN DIEGO – Matthew John Anderson, a former San Diego Zoo biologist, pleaded guilty in federal court today, admitting he stole hundreds of thousands of dollars from the world-renowned institution.
Anderson worked for the zoo for over 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.
In his plea agreement, Anderson admitted that over the course of approximately eight years – from December 2008 to October 2016 – he worked to create false invoices in the names of various purported vendors which were presented to the zoo for payment. The zoo paid the invoices, in some cases sending money to accounts controlled by Anderson, and in others sending payments to third parties who kicked back the bulk of the payments to Anderson. Anderson admitted to creating 35 bogus invoices and stealing over $236,000 in total.
U.S. Attorney Robert Brewer praised the work of FBI agents and prosecutor Robert Huie. “We will hold accountable those who seek to steal and defraud, including all those who selfishly steal from our cherished San Diego institutions.”
“When an employee is elevated to a position of leadership, it is a sign of that company’s trust in the integrity and honesty of that person,” said FBI Special Agent in Charge Scott Brunner. “When an employee violates that trust and abuses their position to defraud and steal money for personal benefit, the FBI stands ready to hold them accountable.”
Sentencing is scheduled for June 8, 2020 at 9 a.m. before U.S. District Judge Larry Burns.
DEFENDANT Case No. 20-CR-0812-LAB
Matthew John Anderson Ramona, California Age: 49
SUMMARY OF CHARGES*
Theft or conversion concerning programs receiving federal funds – 18 U.S.C. § 666
Maximum penalty: Ten years in prison and $250,000 fine
AGENCIES
Federal Bureau of Investigation
Drug Dealer Pleads Guilty in Fentanyl Overdose DeathRead the Press Release
Assistant U. S. Attorney David P. Finn (619) 546-7342
NEWS RELEASE SUMMARY – March 4, 2020
SAN DIEGO – Michael Steen pleaded guilty in federal court today, admitting that he supplied fentanyl that led to the fatal overdose of a 33-year-old Ramona woman on July 9, 2018.
According to his plea agreement, Steen sold more than 500 grams of what he knew to be fentanyl in 2018. He pleaded guilty before U.S. Magistrate Judge F. A. Gossett III to Conspiracy to Distribute Fentanyl and is scheduled to be sentenced on May 29, 2020 by U.S. District Judge Gonzalo P. Curiel.
“This case should put dealers on notice that every time we have an overdose death, we are going to come looking for you, because many lives are at stake,” said U.S. Attorney Robert Brewer. “We are using every available criminal and civil tool to combat this deadly epidemic and stop these tragic losses.”
“This case is an example of the DEA, the Sheriff’s Department and the U.S. Attorney’s office working together with one definitive goal: To put people responsible for drug deaths in jail,” said DEA Special Agent in Charge John W. Callery. “We will continue to aggressively pursue those who deal drugs and cause death in our community.”
“Sheriff's Deputies are on the front lines of combating the proliferation of illicit fentanyl,” said Sheriff’s said Captain Justin White. “There are many stories of lives stolen. In this case, the victim is a young woman from Ramona who was just starting off in life. The Sheriff's Department is dedicated to working with our federal, state and local partners in holding those accountable for the distribution, supply or manufacturing of this potent painkiller.”
The United States Attorney’s Office is working closely with the San Diego County District Attorney’s Office, the San Diego County Sheriff’s Office, the Drug Enforcement Administration and our other federal, state and local law enforcement partners to investigate and prosecute cases targeting those who supply drugs in fatal overdose cases.
U.S. Attorney Brewer praised prosecutor David Finn as well as the San Diego Sheriff’s Office and DEA agents for their hard work on the case.
For those who suffer from addiction, please know there is help. Call the Crisis line at 888-724-7240; it’s always open.
DEFENDANT Case Number 19-CR-0869-GPC
Michael Steen Age: 26
SUMMARY OF CHARGES
Conspiracy to Distribute Fentanyl – Title 21, U.S.C., Section 841(a)(1)
Maximum penalty: Mandatory minimum 10 years in prison up to life
AGENCY
San Diego Sheriff’s Office
U.S. Drug Enforcement Administration, Narcotics Task Force
North County Property Owner Charged in “Crack-House” Indictment; Feds Seek Forfeiture of Multi-Acre CompoundRead the Press Release
For Further Information, Contact:
Assistant U.S. Attorneys Kevin Mokhtari (619) 546-8402 and David J. Rawls (619) 546-7966
SAN DIEGO – Federal prosecutors unsealed an indictment in San Diego today charging the owner of a large residential compound in Vista with maintaining a drug-involved premises. The indictment seeks criminal forfeiture of the multi-acre property, which is located at 725 Poinsettia Avenue.
Early this morning, members of the North County Regional Gang Task Force, the FBI SWAT team and other law enforcement agencies raided the property and arrested the owner, defendant Sean Terrence Sheeter, who is charged in the indictment. Sheeter was released and ordered to appear in federal court in San Diego on Friday at 2:00 pm before U.S. Magistrate Judge Linda Lopez.
The federal indictment is the result of a multi-year investigation led by the North County Regional Gang Task Force, which is spearheaded by the FBI and the San Diego Sheriff’s Department. The investigation involved months of federal wiretaps, multiple undercover drug buys, and surveillance that led investigators to learn about the criminal activity on the property.
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This investigation initially focused on North County gang members and associates who were believed to be importing methamphetamine and heroin from Mexico and distributing the drugs in the North County area. As the investigation continued, authorities learned that many of the targets were living at and operating from the Poinsettia Avenue property. According to a search warrant unsealed today, Sheeter, who also lives at the property, allowed gang members, drug dealers and users to stay at the property.
According to the search warrant unsealed today, law enforcement activity at the property has been pervasive. Between January 1, 2017 and February 25, 2020, there have been 53 separate calls for service or other calls to the San Diego Sheriff’s Department pertaining to the property. The calls included reports for stolen vehicles, thefts, disturbance calls, burglary, grand theft, armed suspicious persons, vandalism and a threat with a weapon. During the same time period, there have been approximately 22 arrests and 7 citations issued at the property. The majority of the arrests relate to possession of controlled substances or stolen vehicles, but include several arrests related to firearms in the possession of felons or other prohibited persons.
“We allege that this property is a drug-laden haven for violent felons, gang members, drug dealers and drug users,” said U.S. Attorney Robert Brewer. “This neighborhood, and the streets of San Diego County, are safer today because of the hard work and dedication of the North County Regional Gang Task Force and prosecutors Kevin Mokhtari and David Rawls, who are responsible for these indictments.”
“Today’s operation brings the conclusion of a long-term investigation led by our North County Regional Gang Task Force. This group of dedicated agents and officers work hard making the streets of North County safer for the community to live and work,” said FBI Special Agent in Charge Scott Brunner. “The dangerous activity involving heroin, methamphetamine, firearms, and other illegal activity at the so called 'Heroin House' has been shut down.”
“It's not unreasonable to expect our neighbors to be law abiding citizens,” said Sheriff’s Captain Justin White. “Unfortunately, Mr. Sheeter allegedly felt he was above the law with little regard for his neighbors and how illegal activity would affect everyone’s quality of life. The San Diego County Sheriff's Department is grateful for the hard work and cooperation of the North County Regional Gang Task Force and the U.S. Attorney’s Office to bring about positive change in this Vista neighborhood.”
For further information on the original investigation that led to today’s action, please see https://www.justice.gov/usao-sdca/pr/thirty-seven-gang-members-charged-crackdown-north-county-heroin-methamphetamine-and.
This case is the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership that brings together the combined expertise and unique abilities of federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, dismantle and prosecute high-level members of drug trafficking, weapons trafficking and money laundering organizations and enterprises.
This case was handled by Assistant U.S. Attorneys Kevin Mokhtari and David J. Rawls.
Indictment - Sheeter
WarrantDEFENDANT Case Number 20CR0656-JLS
Sean Terrence Sheeter Vista, California.
SUMMARY OF CHARGES
Maintaining a Drug-Involved Premises – Title 21, U.S.C., Section 856(a)(2)
Criminal Forfeiture – Title 21, U.S.C., Section 853Maximum Penalty: Twenty years in prison and $500,000 fine
AGENCIES
Federal Bureau of Investigation
San Diego Sheriff’s Department
United States Marshals Service
Bureau of Alcohol, Tobacco, Firearms and Explosives
Homeland Security Investigations
Drug Enforcement Administration
Carlsbad Police Department
Oceanside Police Department
Escondido Police Department
California Department of Corrections and Rehabilitation
California Highway Patrol
Department of Justice, Organized Crime and Drug Enforcement Task Force (OCDETF)
Department of Justice, Office of Enforcement Operations
Two Former Church Members Admit Forced Labor ConspiracyRead the Press Release
Assistant U. S. Attorney Christopher P. Tenorio (619) 546-8413
NEWS RELEASE SUMMARY – February 27, 2020
SAN DIEGO – Jose Gaytan and Sonia Murillo, defendants affiliated with Imperial Valley Ministries, pleaded guilty to labor trafficking charges in federal court today, admitting that they participated in a forced labor conspiracy.
Gaytan and Murillo were previously indicted with ten other defendants on charges they held program participants against their will, coerced participants to surrender welfare benefits, and compelled participants to panhandle for the financial benefit of the church leaders.
Both Gaytan and Murillo admitted to conspiring with the other defendants to benefit financially from the forced labor conspiracy. In particular, both Gaytan and Murillo admitted defendant Victor Gonzalez, the former pastor of IVM, instructed all directors in charge of IVM properties to screw or nail windows shut and keep doors locked from the inside in order to prevent IVM participants from leaving. Gaytan added that Gonzalez and another IVM leader told him it was necessary to continue recruiting participants into IVM and prevent participants from leaving in order to increase fundraising proceeds for the benefit of IVM.
Murillo implicated additional defendants who punished her for allowing IVM participants to leave. Both Gaytan and Murillo added that various co-defendants had directed them to falsely instruct female participants that Child Protective Services would take their children, or fail to return them, if they left IVM.
IVM operated a non-denominational church headquartered in El Centro, and had opened approximately 30 affiliate churches throughout the United States and Mexico, including Los Angeles, Santa Ana and San Jose, California; Las Vegas, Nevada; Phoenix, Arizona; and Brownsville, Texas. IVM’s express purpose is to “restore” drug addicts at faith-based rehabilitation group homes and raise money to open churches in other cities to do the same.
In addition to their church and main office, IVM owns and operates two women’s group homes and a men’s group home in the El Centro area. IVM also operated homes in Calexico and Chula Vista. Many participants were recruited from outside of El Centro, including San Diego, and as far away as Texas. IVM members allegedly induced participants to accompany them to receive free food and shelter with the false promise that they would be provided resources to return home. Many participants, including those who did not require rehabilitation services, claimed they were later held at IVM properties against their will.
The indictment alleges that all of the defendants confiscated identification documents in order to prevent IVM participants from leaving IVM and to maintain their labor. IVM leaders checked in participants at the IVM group homes, where they were required to sign agreements to adhere to rules, including never leaving the house unaccompanied, and turning over all identifications and personal items.
Both Gaytan and Murillo admitted they helped enforce the IVM rules by checking in new IVM participants, obtaining and using their Electronic Benefits Transaction cards obtained through the Supplemental Nutrition Assistance Program (SNAP), and requiring participants to panhandle on behalf of IVM. Gaytan and Murillo also pleaded guilty to a separate offense of Benefits Fraud based upon their unauthorized acquisition of SNAP benefits from others, in violation of Food Stamp Regulations.
Gaytan entered his guilty plea before U.S. Magistrate Judge Linda Lopez and Murillo entered her guilty plea before U.S. Magistrate Judge F.A. Gossett. Both are scheduled to be sentenced by U.S. District Judge Barry Ted Moskowitz on May 5, 2020.
“The most vulnerable among us are entitled to the protection of the law,” said U.S. Attorney Robert Brewer. “We encourage everyone to help identify forced labor victims in all locations or situations where exploitation is possible.” Mr. Brewer added that his office would be hosting a forum on forced labor on April 23, 2020, to bring together law enforcement agencies, non-governmental organizations, and community organizations that may encounter potential victims of forced labor, all in an effort to increase the identification of victims and prosecute those who exploit them.
Brewer praised FBI agents and prosecutor Chris Tenorio for excellent work on this important case.
DEFENDANTS Case Number 19CR3255-BTM
Jose Gaytan Age: 47 El Centro, CA
Sonia Murillo Age: 51 El Centro, CA
SUMMARY OF CHARGES
Conspiracy to Commit Forced Labor and Benefits Fraud – Title 18, U.S.C., Section 371
Maximum penalty: five years’ imprisonment and $250,000 fine
Food Stamp Act (Benefits Fraud) – Title 7, U.S.C., Section 2024(b)
Maximum penalty: 20 years’ imprisonment and $250,000 fine (If the benefits were $5,000 or more)
AGENCY
Federal Bureau of Investigation
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
*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 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 Neighborhoods, Human Trafficking, and Project Safe Childhood. The VCHT Section also provides federal prosecutors to the downtown San Diego Violent Crimes Task Force-Gang Group, the North County Gang Task Force, and the East County Gang Task Force.
San Diego Man Sentenced to 25 years in Federal Prison for Child Pornography OffensesRead the Press Release
Assistant U.S. Attorney Amanda Griffith (619)546-8970 and Janet Cabral 546-8715
NEWS RELEASE SUMMARY – February 26, 2020
SAN DIEGO – Carsten Igor Rosenow was sentenced in federal court today to 25 years in prison for sexually exploiting children in the Philippines.
Rosenow was found guilty by a federal jury on August 30, 2019, on charges of production of child pornography and possession of child pornography. Rosenow, a former Chief Marketing Officer for tech company Illumina, Inc., who lived in San Diego, came to the attention of law enforcement when the FBI identified him as someone who regularly traveled abroad, including to the Philippines.
“Sexual crimes against children are heinous and tragic wherever they occur, and we will not let borders keep us from protecting these vulnerable victims whenever possible,” said U.S. Attorney Robert Brewer. “The law allows us to pursue cases against U.S. citizens who victimize children around the world, and that’s what we’ve done here. This defendant is off the streets for 25 years, and that makes this a very good outcome.”
“The FBI investigates U.S. citizens who travel overseas to engage in illegal sexual conduct with children under the age of 18 as well as the production of child pornography,” stated FBI Special Agent in Charge Scott Brunner. “The seriousness of Rosenow’s crimes cannot be overstated. Preying upon children, no matter where they live, and exploiting them is extremely damaging to children and to our global society. Protecting the vulnerable is a top priority for the FBI and we stand committed to investigating and prosecuting anyone who seeks to harm children.”
The FBI also received information that Rosenow was communicating through Facebook with what appeared to be minor females living in the Philippines, using an account under the name “Carlos Senta,” and making arrangements to meet to engage in sexual activities while he was traveling there.
The FBI was alerted that Rosenow was scheduled to return to the United States from the Philippines in June of 2017, and he was arrested by FBI agents when he arrived at the airport in San Diego on June 21, 2017. Rosenow’s baggage and residence were searched pursuant to search warrants. Three devices seized from Rosenow’s luggage contained videos, produced by Rosenow while in the Philippines, showing Rosenow engaging in sexual acts with minor females, and recording those sex acts. Additional devices seized from his residence also contained visual depictions of Rosenow engaged in sexual acts with minors while in the Philippines.
Facebook records introduced into evidence at trial established that prior to meeting with one of the girls, Rosenow was told she was 12 years old. While engaged in the sexual activity with the girl, she told Rosenow she was 15. Rosenow also admitted as part of the evidence at trial that he knew that another video, which showed him engaged in sexual acts with three minor females, one of whom was a prepubescent female, was produced by him while in the Philippines. Rosenow was charged by the United States with both using a minor to engage in sexual conduct outside the United States, for the purpose of producing visual depictions of that conduct, and intending to transport it back to the United States, and with possession of child pornography.
Rosenow testified at trial and admitted that while he was abroad in the Philippines for work, he had sex with girls who he knew were minors, which is defined under federal law as anyone under the age of 18. The parties also agreed to facts which were presented to the jury, showing that the defendant produced videos of himself engaging in sexual acts, including vaginal intercourse, with minor females and one prepubescent girl under the age of 12. The jury found defendant guilty of both charges.
At sentencing, the prosecutor stressed that Rosenow engaged in sex acts with prepubescent and minor-aged children in exchange for money, cell phones, and chocolates, treating those children as a commodity. The Court agreed that the nature and circumstances of the offense were aggravated by anyone’s definition, finding the videos of defendant engaging in sex acts with the children “deeply disturbing on many levels.” The Court rejected the notion that the defendant merely engaged in commercial sexual transactions, noting the young age of the girls and that the girls “did not seem to be willingly engaging in the activity.” The Court noted the “defendant showed no sense of compassion for these kids or remorse or recognition regarding what he did” and that the defendant’s conduct “was despicable for lack of a better term.”
Following his release from federal prison, the Court sentenced the defendant to a lifetime of supervised release. The Court also ordered the defendant to pay a total fine of $100,000, and restitution to three victims of the offense.
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 Section 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 Neighborhood, and Human Trafficking.
U.S. Attorney Brewer lauded the efforts of FBI agents and prosecutors Mandy Griffith and Janet Cabral, who work hard to seek justice for minor victims who are sexually exploited.
DEFENDANT Criminal Case No. 17cr3430-WQH
Carsten Igor Rosenow Age: 55 San Diego, CA
SUMMARY OF CHARGE
- Count 1 – Title 18, United States Code, Section 2251(c), Attempted Sexual Exploitation of a Child – Production of Child Pornography
- Count 2 – Title 18, United States Code, Section 2252(a)(4)(B), Possession of Images of Minors Engaged in Sexually Explicit Conduct
Maximum penalties:
- Count 1 - 30 years in prison, with a mandatory minimum 15 years in prison
- Count 2 – 20 years in prison
- As to all Counts, $250,000 fine
INVESTIGATING AGENCIES
Federal Bureau of Investigation
Los Angeles Area Man Pleads Guilty to Smuggling Restricted PesticidesRead the Press Release
Assistant U. S. Attorney Melanie K. Pierson (619) 546-7976
NEWS RELEASE SUMMARY – February 27, 2020
SAN DIEGO – Luis Alberto Vargas pleaded guilty in federal court today, admitting that he illegally smuggled pesticides into the U.S. from Mexico.
In his plea agreement, Vargas admitted that on September 9, 2019, he entered the United States at the Otay Mesa Port of Entry as a passenger in a black Toyota Camry. He and the other occupants of the vehicle twice advised the primary inspector they were not bringing anything from Mexico. The primary inspector found three large suitcases in the trunk and referred the vehicle for secondary inspection.
Vargas acknowledged that the secondary inspector discovered two bottles of the Mexican pesticide Agroclor Clorpirifos Etil (1 liter each) and one 250 ml bottle of the Mexican pesticide Minartrin M Abamectina, concealed in a large suitcase in the trunk of the vehicle. Vargas admitted that he purchased the pesticides in Culiacan, Mexico, and smuggled the pesticides into the United States.
The pesticides imported by Vargas were labeled in Spanish and did not bear any EPA registration number, as required by law for pesticides intended for use in the United States. Pesticides with the active ingredients of those imported by Vargas are restricted use pesticides in the United States, and may be purchased and applied only by certified pesticide applicators. Vargas admitted that he holds no such certificate. Moreover, the lawful importation of pesticides requires a Notice of Arrival to be provided to U.S. Customs pursuant to 19 CFR § 12.112. Vargas further admitted that he provided no such Notice of Arrival for the pesticides in question.
“Laws regulating pesticides are meant to protect the public and the environment,” said U.S. Attorney Robert Brewer. “We are aggressively prosecuting violators who don’t respect these important regulations.”
“The defendant knowingly smuggled unregistered pesticides into the country violating environmental regulations established to protect human health and the environment,” said Acting Special Agent-in-Charge Scot Adair of EPA’s Criminal Investigation Division in California. “Today’s guilty plea demonstrates that individuals who intentionally violate those laws will be held responsible for their crimes.”
“The smuggling and use of hazardous unregulated pesticide products is illegal and puts people's health, particularly young children, at risk,” said Cardell T. Morant, Acting Special Agent in Charge for Homeland Security Investigations (HSI) San Diego. “HSI will continue to work with Customs and Border Protection, the Environmental Protection Agency, the U.S. Attorney’s Office, and other partners to prosecute those who threaten the health and safety of our communities for their own personal gain.”
Sentencing for Vargas is set for June 5, 2020 at 9:00 a.m. before U.S. District Judge Dana M. Sabraw.
DEFENDANT Case Number 19cr4279-DMS
Luis Alberto Vargas Age: 29 Bellflower, CA
SUMMARY OF CHARGES
Smuggling – Title 18, U.S.C., Section 545
Maximum penalty: Twenty years’ imprisonment and $250,000 fine
AGENCY
Homeland Security Investigations; U.S. Environmental Protection Agency, Criminal Investigation Division
Local Firm Pleads Guilty to Hazardous Waste ViolationsRead the Press Release
Assistant U. S. Attorney Melanie K. Pierson (619) 546-7976
NEWS RELEASE SUMMARY – February 27, 2020
SAN DIEGO – Curtis Technology, Inc., a San Diego firm that makes specialized coatings, pleaded guilty in federal court yesterday, admitting that the company illegally transported hazardous waste from its facility without a manifest. In pleading guilty, Curtis Technology admitted that it conducted metal finishing operations at its location on Sorrento Valley Road, which generated various wastes, including ferric chloride, alkaline, waste filter cake, solvents and other chemicals.
The company admitted that between December 12, 2015 and August 22, 2019, CTI owner Alex Jvirblis (deceased) and a maintenance employee transported chemicals, including waste ferric chloride, waste filter cake, waste alkaline, waste solvents and other chemical wastes, from the CTI location on Sorrento Valley Road to three residences in San Diego owned by Jvirblis located on Wrelton Drive, Corte Morea, and Bourgeois Way. The chemicals were not accompanied by a hazardous waste manifest at the time of transportation.
The waste ferric chloride and waste alkaline are federally-regulated hazardous wastes having the characteristic of corrosivity. The waste solvents are federally-regulated hazardous wastes having the characteristic of ignitability. The waste filter cake is a federally-regulated listed hazardous waste, assigned waste code F006 for wastewater treatment sludges from electroplating operations. All of these wastes are required by regulation to be transported with a uniform hazardous waste manifest. The firm admitted that Alex Jvirblish acted knowingly, that is with knowledge that the chemicals transported to the three sites were not accompanied by a hazardous waste manifest and with knowledge that the chemicals were waste that had the potential or substantial potential to be harmful to others or to the environment.
Federal search warrants were conducted at the three sites in November, 2019, and the chemicals were recovered. At one of the residences, chemicals were discovered which were too unstable to safely transport for disposal. The area was evacuated, and the chemicals were detonated on site by the Sheriff’s Department Bomb Squad.
“These kind of violations have the potential to jeopardize public health and damage the environment,” said U.S. Attorney Robert Brewer. “We will hold companies accountable when they take short cuts that put people and our environment at risk.”
San Diego FBI Special Agent in Charge Scott Brunner stated, “Today's plea was made possible by extraordinary investigative effort expended in a compressed time frame by the San Diego Environmental Crimes Task Force. The FBI is grateful for the integral support of the San Diego Fire Department, San Diego Police Department, San Diego County Department of Environmental Health (HAZMAT) and the Environmental Protection Agency, in expeditiously locating and neutralizing these dangerous chemicals."
“The law protects our communities and the environment by requiring proper storage, transportation, and disposal of hazardous waste,” said Acting Special Agent-in-Charge Scot Adair of EPA’s Criminal Investigation Division in California. “This case demonstrates that EPA and its law enforcement partners are committed to holding knowing violators of those requirements accountable for their actions."
Sentencing is set before U.S. District Judge John A. Houston on March 16, 2020, at 11:00 am.
DEFENDANT Case Number 20cr0715-JAH
Curtis Technology, Inc. Incorporated: 1981 San Diego, CA
SUMMARY OF CHARGES
Transportation of Hazardous Waste Without a Manifest – Title 42, U.S.C., Section 6928(d)(5)
Maximum penalty for corporation: Five years of probation and a fine of the greater of $500,000 or $50,000 per day of violation and a minimum fine of $5,000 per day of violation
AGENCIES
U.S. Environmental Protection Agency, Criminal Investigation Division
Federal Bureau of Investigation
Attorney Sentenced to 46 Months for Enticement and Coercion to Engage in ProstitutionRead the Press Release
Assistant U.S. Attorneys Jaclyn Stahl (619) 546-8456 and Fred Sheppard (619) 546-8237
NEWS RELEASE SUMMARY – March 2, 2020
SAN DIEGO – United States District Judge Anthony J. Battaglia sentenced local attorney William David Turley to 46 months in custody for enticing a female to engage in prostitution. Judge Battaglia also ordered Turley to pay $50,000 in restitution to a minor victim involved in the case.
According to his plea agreement, on or about April 30, 2018, Turley began communicating with an adult female victim whom he met on the website sugardaddymeet.com. On or about May 3, 2018, Turley persuaded, induced, and enticed the victim to take a flight from a city in California to Las Vegas, Nevada to meet with him. Turley paid for the victim’s flight and other travel expenses. At the time the victim boarded the flight in California, she understood that she was traveling to Las Vegas to engage in sexual acts with Turley in exchange for monetary compensation. In Las Vegas, Turley provided the victim with between $1,500 and $1,800 in cash in exchange for sexual intercourse.
The plea agreement also states that on or about May 12, 2018, Turley began communicating with the minor female victim via sugardaddymeet.com. In conversations with the minor victim, they discussed that she was 18 years old. But he was aware that she was a high school student, that she could not meet on weekends because she was grounded, and that her parents had taken her cellphone away due to poor performance in school. Turley met with the minor victim on or about May 15, 2018, at a public library near her high school.
According to the plea agreement, on or about May 16, 2018, Turley again met the minor victim at the library after school and drove her to a store where Turley purchased the minor victim a cellphone. Turley then drove the minor victim a short distance, parked the car, and engaged in a sex act with the minor. The victim told Turley she wanted to stop and needed to get home. Turley gave the minor victim $300.
U.S. Attorney Robert Brewer praised the FBI, the San Diego Human Trafficking Task Force and prosecutors Jaclyn Stahl and Fred Sheppard for ensuring that Turley’s victims had a voice and saw justice done. “We are committed to enforcing the laws of the United States and will prosecute individuals who break the law regardless of their wealth, job title, or status,” Brewer said.
“Human trafficking and sex crimes involving our children cannot be tolerated,” said FBI Special Agent in Charge Scott Brunner. “The FBI will continue to work tirelessly to reveal these horrible crimes and bring safety and closure for the victims and our communities.”
DEFENDANT Case No. 18-CR-4574-AJB
William David Turley Age: 61 San Diego, CA
SUMMARY OF CHARGES
Enticing and Coercing a Female to Engage in Prostitution, in violation of 18 U.S.C. § 2422(a).
Maximum Penalty: Twenty years in prison, $250,000 fine.
INVESTIGATING AGENCIES
Federal Bureau of Investigation
San Diego Human Trafficking Task Force
U.S. Attorney Issues Statement on Sheriff’s Compliance with Subpoenas Seeking Jail RecordsRead the Press Release
Kelly Thornton (619) 546-9726
NEWS RELEASE SUMMARY – February 21, 2020
SAN DIEGO – The San Diego Sheriff’s Department has complied with two of four immigration subpoenas issued last Friday by U.S. Immigration and Customs Enforcement. These subpoenas sought information about multiple illegal aliens with extensive criminal records and history of illegal entry into the United States. Currently, the individuals are facing additional charges, which include sexual assault of a minor, spousal abuse and false imprisonment, drug possession, assault, and spousal battery.
U.S. Attorney Robert Brewer issued the following statement: “We appreciate the Sheriff’s Department’s compliance with the ICE enforcement subpoenas. We are particularly grateful for the strong working relationships among federal and local law enforcement agencies in the Southern District of California. The sharing of information by law enforcement is crucial to protecting the public and the effective enforcement of our laws.”
There were four subpoenas issued last week; the Sheriff’s Department complied with the first two, which were due this week. The remaining two are due next week.
Customs and Border Protection Officer Admits Using Unreasonable Force at Port of EntryRead the Press Release
Assistant U. S. Attorney Christopher P. Tenorio (619) 546-8413
NEWS RELEASE SUMMARY – February 19, 2020
SAN DIEGO – U.S. Customs and Border Protection Officer Esaul Bello pleaded guilty in federal court today, admitting that he used unreasonable force on an individual who had applied for admission to the U.S. at the Calexico, California Port of Entry.
According to his plea agreement, Bello was on duty at a Primary Vehicle Lane booth at the Calexico Port of Entry on November 26, 2018, when he encountered the individual in question. During the course of the inspection, Bello placed two hands around the neck of the individual, who was not offering any physical resistance. Bello then shook the individual, in violation of the individual’s Fourth Amendment right to be free from unreasonable seizure and the unreasonable use of force. As a condition of his plea, Bello agreed to voluntarily resign his employment with the U.S. government and terminate his security clearance.
“This is a rare and troubling situation,” said U.S. Attorney Robert Brewer. “We will always move swiftly to protect the public from officers who use their power to violate another person's Constitutional rights.”
“The DHS OIG takes any and all allegations of abuse of authority seriously and intends to hold accountable those who try to use their official position to take advantage of others,” said Angie Cuevas-Mason, Assistant Special Agent in Charge, Department of Homeland Security, Office of Inspector General, El Centro, California. “The DHS OIG will continue to use its investigative resources to stop those who use their official authority to violate the rights of others.”
Bello is scheduled to be sentenced on June 2, 2020 by U.S. Magistrate Judge Karen S. Crawford.
This case is being prosecuted by Assistant U. S. Attorney Christopher P. Tenorio and Civil Rights Division Trial Attorney DW Tunnage.
DEFENDANT Case Number 20cr0015-KSC
Esaul Bello Age: 53 San Diego, CA
SUMMARY OF CHARGES
Deprivation of Rights under Color of Law – Title 18, U.S.C., Section 242 (misdemeanor)
Maximum penalty: One year of imprisonment and $100,000 fine
AGENCY
Department of Homeland Security, Office of the Inspector General
*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 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 Neighborhoods, Human Trafficking, and Project Safe Childhood. The VCHT Section also provides federal prosecutors to the downtown San Diego Violent Crimes Task Force-Gang Group, the North County Gang Task Force, and the East County Gang Task Force.
Ramona Man Sentenced to 20 Years in Heroin Overdose DeathRead the Press Release
Assistant U. S. Attorneys Timothy Coughlin (619) 546-6768 and Larry Casper (619) 546-6734
NEWS RELEASE SUMMARY – February 12, 2020
SAN DIEGO – Maxwell Joseph Gaffney of Ramona was sentenced today by U.S. District Judge Michael M. Anello to 20 years in prison for distributing the heroin that caused the death of his 23-year-old acquaintance, Kyle Rodriguez, on February 17, 2017.
Gaffney was convicted by a federal jury on June 24, 2019.
According to evidence presented at trial, Rodriguez had returned home after an evening spent with friends. He locked himself in the family bathroom, where he ingested heroin by heating it over tin foil and inhaling the smoke, a method known as “chasing the dragon.” According to a government expert who testified at trial, “chasing the dragon” is one of the most dangerous and lethal ways of using heroin.
The overdose death was a shock to his parents, who believed Rodriguez was well on his way to a productive and happy life after almost 10 months of being clean, being gainfully employed and having a girlfriend who cared deeply for him. That night, Rodriguez’s girlfriend and parents discovered Rodriguez in the bathroom unconscious. First responders were unable to revive Rodriguez. Sheriff’s deputies observed drug paraphernalia and heroin residue near his body.
Investigators found text messages between Rodriguez and Gaffney indicating that Gaffney supplied heroin to Rodriguez on the evening of February 16, 2017, and Rodriguez had driven to Gaffney’s residence to purchase the heroin. Gaffney, who had a felony drug conviction when he was 19, was known to law enforcement as a heroin dealer. Thereafter Gaffney was contacted by law enforcement a number of times related to his criminal conduct. The investigation also revealed that Gaffney continued to sell heroin even after learning that Rodriguez overdosed and died.
“This case is a tragedy for two families,” said U.S. Attorney Robert Brewer. “One young man who had achieved 10 months of sobriety and was well on his way to a new life, has lost it. And today, with this sentence, another young man is spending a significant portion of his in prison. And their families are left with nothing but sorrow. For this reason, we will do all that we can to save other families from this fate. We will continue to aggressively fight the grip that opioids have on our country by pursuing cases against those who distribute the drugs that are causing an overdose crisis in our community. No parent should have their child taken from them by this scourge.”
The government’s sentencing papers noted that the Rodriguez family no longer has a son and a brother and they seek justice for a life cut short so that other families will not have to experience the same tragedy and grief they have endured. In a letter to the judge, Sheila Scruggs, the mother of Rodriguez, wrote, “There is not a day that goes by I don’t think of him. I feel like I’m in a nightmare that I can never wake up from. Every time I close my eyes, I’m taken back to that moment of seeing my son on the floor of our bathroom, blue and lifeless. I can hear myself yelling his name begging him to please take a breath. As a nurse, I have saved countless lives, but that early morning of February 17, 2017, I was unable to save my own child and I will have to live with that daily.”
Kyle Rodriguez’s sister, Kendra Bodkins, told the court at today’s hearing that her “social, funny and smart” brother, a motocross racer, became addicted to painkillers after his foot was crushed by an off-road vehicle. This addiction led him to heroin. “My brother never wanted to grow up to be a heroin addict. We didn’t have a broken family. We had it all and it was just a series of unfortunate events that led him down that path. But he was an amazing person, always willing to help anyone out. And he had a huge heart. This drug is constantly ruining lives and ripping families apart every single day. So I hope people can learn from our tragedy and think twice before they start using or even think about relapsing…or selling this drug.”
In July 2017, after the death of Kyle Rodriguez and others, the Sheriff's Department initiated the first overdose death response team to investigate these types of cases. Since then, a multi-agency team was created in San Diego and hosted by the Drug Enforcement Administration to investigate and prosecute overdose death cases in San Diego. The Sheriff's Department and other local law enforcement entities have delegated resources to that effort and have helped to pursue critical evidence in overdose death cases. The Sheriff's Department is working aggressively to remove these dangerous drugs from the streets and hold heroin, fentanyl and other illicit drug dealers accountable for endangering the lives of others.
“The San Diego County Sheriff's Department will continue to work with our law enforcement partners to ensure those responsible for distributing illegal drugs are held accountable,” said Lt. Michael McNeill of the Sheriff's Ramona Substation. “Today's sentencing represents a significant victory in the fight against the opioid epidemic.”
DEFENDANT Case Number 17-cr-3330-MMA
Maxwell Joseph Gaffney Age: 26 Ramona, California
SUMMARY OF CHARGE TO WHICH DEFENDANT FOUND GUILTY AFTER TRIAL
Distribution of Heroin Resulting in Death – Title 21 U.S.C. Section 841(b)(1)(C)
Maximum Penalty – Mandatory minimum 20 years to a maximum of life in prison
INVESTIGATING AGENCIES
San Diego Sheriff’s Department
San Diego Medical Examiner’s Office
U.S. Attorney Highlights Danger of Sanctuary Laws; Urges Change to Enhance Public SafetyRead the Press Release
NEWS RELEASE SUMMARY – February 10, 2020
SAN DIEGO – U.S. Attorney Robert Brewer today called for an end to “Sanctuary City” laws, saying the state statute prohibiting local law enforcement officials from sharing information with federal counterparts about dangerous criminals has made our communities less safe.
California Senate Bill 54 largely restricts local law enforcement’s ability to cooperate with federal immigration authorities. The law generally prohibits state and local authorities from inquiring about a person’s immigration status, detaining them based on a “detainer” request from immigration authorities, and providing information about an undocumented criminal’s release date or other personal information, such as address information that could be used to locate someone potentially subject to deportation or removal. The law does provide for some exceptions for individuals convicted of certain crimes.
“The law’s prohibition against local law enforcement cooperating with their federal counterparts is inconsistent with their shared mission to protect the public above all else,” said U.S. Attorney Robert Brewer. “The law not only results in the release of individuals who may pose a threat to the safety of our communities, but it also increases the risk for law enforcement.”
Brewer continued: “Any time a detainer is not honored or the sharing of information about individuals in police custody is prohibited, our local law enforcement officers and our communities are put in danger unnecessarily. For instance, the prohibition on honoring detainers necessarily means that rather than taking custody of someone from a local jail, law enforcement must arrest that person in the community, which presents more risk to both our citizens and our officers.”
In San Diego County recently, the Sheriff’s Department was unable to notify immigration authorities when illegal immigrants were released on bond following arrests for possession of methamphetamine, drunken driving and carrying a concealed weapon.
“Our No. 1 priority is to protect the public, but sanctuary laws prevent us from doing that to the best of our ability,” Brewer said. “We have an excellent relationship with our local law enforcement partners, but, dangerously, this law ties their hands. Sanctuary laws jeopardize public safety by preventing the federal government from locating, arresting, and prosecuting removable aliens inside the United States.”
“While we value our relationships with our local law enforcement partners in San Diego, it is important to remind the public of the serious threat that dangerous state sanctuary laws pose on public safety in our communities,” said Gregory Archambeault, Immigration and Customs Enforcement, Enforcement and Removal Operations Field Office Director in San Diego. “Currently the state sanctuary laws allow criminals to be released to the street and commit more crimes, which increases the threat to public safety, national security and the safety of our community. It would be much safer if ICE were able to transfer the criminals while they are inside the county jail.”
Man Sentenced for Assaulting a U.S. Border Patrol Agent with a HandgunRead the Press Release
Assistant U. S. Attorney Stephen H. Wong (619) 546-9464
NEWS RELEASE SUMMARY – February 10, 2020
SAN DIEGO – Hector Rodriguez-Chavez, a Mexican national, was sentenced in federal court today to 141 months in prison for pointing a loaded handgun at a U.S. Border Patrol agent in November 2018.
Rodriguez-Chavez pleaded guilty in September 2019 to one count of assault on a federal officer with a deadly weapon and one count of brandishing a firearm during and in relation to a crime of violence. During the sentencing hearing, Border Patrol agents described how they came upon Rodriguez-Chavez in a remote area approximately three miles east of the Otay Mesa Port of Entry. Rodriguez-Chavez turned and pointed a loaded semiautomatic pistol at one of the agents. That agent told the court he made a split-second decision to grab Rodriguez-Chavez’s gun and wrestle it out of his hands.
U.S. District Judge Gonzalo Curiel imposed a 141-month sentence for the two counts, plus an additional 24 months in custody for violating the terms of supervised release from a 2014 conviction for illegal re-entry of a deported alien. In imposing the sentence, Judge Curiel noted that one of the purposes of the sentence was to promote respect for the law. Judge Curiel noted how Border Patrol agents must work in remote areas and that, “few law enforcement officers place their life on the line to the extent that Border Patrol agents do.”
“This sentence is a fitting reminder that the safety of our courageous agents, who put their lives on the line every day to protect our country, is of paramount importance to our office and to the community,” said U.S. Attorney Robert Brewer.
“I’m pleased by this sentence,” said Chief Patrol Agent Aaron M. Heitke. “Any day that our agents go home safe is a good day. Border Patrol Agents risk their lives every day protecting America and the agent’s quick thinking in this case prevented any bloodshed.”
DEFENDANTS Case Number 16-CR-0730
Hector Rodriguez-Chavez Age: 62 Guadalajara, Mexico
SUMMARY OF CHARGES
Count 1: Assault on a Federal Officer, in violation 18 U.S.C. 111 (a)(b)
Maximum Penalty: Twenty years in prison
Count 2: Brandishing a Firearm During and in Relation to a Crime of Violence, in violation of 18 U.S.C. 924 (c)
Maximum Penalty: Mandatory Minimum of seven years in prison, maximum life
AGENCIES
Federal Bureau of Investigation
U.S. Border Patrol
Owners of Underground, International Financial Institutions Plead Guilty to Operating Unlicensed Money Transmitting BusinessRead the Press Release
SAN DIEGO – Bing Han and Lei Zhang pleaded guilty in federal court today for operating unlicensed money transmitting businesses. Their guilty pleas are believed to be the first in the United States for a developing form of unlawful underground financial institution that transfers money between the United States and China, thereby circumventing domestic and foreign laws regarding monetary transfers and reporting, including United States anti-money laundering scrutiny and Chinese capital flight controls.
Special Agents from Homeland Security Investigations, IRS Criminal Investigation Las Vegas Financial Crimes Task Force, and the Drug Enforcement Administration led the investigation into Han’s and Zhang’s financial operations. As admitted in the plea agreements entered today before U.S. Magistrate Judge William V. Gallo, Han and Zhang would collect U.S. dollars (in cash) from various third-parties in the United States and deliver that cash to a customer, typically a gambler from China who could not readily access cash in the United States due to capital controls that limit the amount of Chinese yuan an individual can convert to foreign currency at $50,000 per year. Upon receipt of the U.S. dollars, the customer (i.e., the gambler) would transfer the equivalent value of yuan (using banking apps on their cell phones in the United States) from the customer’s Chinese bank account to a Chinese bank account designated by defendant Han or Zhang. For facilitating these transactions, Zhang and Han were paid a commission based on the monetary value illegally transferred.
U.S. Attorney Robert S. Brewer, Jr. said, “The United States stands vigilant against the constantly evolving ways in which individuals and organizations seek to operate outside the conventional financial system. Violating United States anti-money laundering laws not only endangers the integrity of the global financial system, but doing so hinders the ability of law enforcement officers to confront criminal conduct including money laundering and narcotics trafficking.”
Han and Zhang further admitted today that they were regularly introduced to customers by casino hosts, who sought to increase the gambling play of the casino’s customers. By connecting cash-starved gamblers in the United States with illicit money transmitting businesses, like those operated by Han and Zhang, the casinos increased the domestic cash play of their China-based customers. All a gambler needed was a mobile device that had remote access a China-based bank account. As a result, Han and Zhang managed to transmit and convert electronic funds in China into hard currency in the United States; all while circumventing the obstacles imposed both by China’s capital controls, and the anti-money laundering scrutiny imposed on all United States financial institutions. For their efforts, the casino hosts often received a cut of Han’s or Zhang’s commission.
“This case demonstrates that those who attempt to use underground or unregulated money transfer systems cannot evade detection and punishment,” said Cardell T. Morant, acting Special Agent in Charge for HSI San Diego. “HSI and our domestic and foreign partners will continue to work together aggressively to investigate and prosecute those who seek to hide their involvement in transnational crime by employing such international money laundering schemes.”
“Criminals keep trying to find ways to circumvent our financial system by laundering money,” said Tara Sullivan, Special Agent in Charge of IRS Criminal Investigation Las Vegas. “Unfortunately for Han and Zhang, the IRS Criminal Investigation Las Vegas Financial Crimes Task Force was relentless in seeking out and disrupting their underground banking network and will continue to work with our law enforcement partners to uphold anti-money laundering laws”.
“Although Mr. Han and Mr. Zhang did not admit to transacting narcotics proceeds in their unlicensed money transmitting businesses, we know that drug trafficking organizations are willing to use a variety of businesses to launder proceeds from the sales of drugs,” said DEA Special Agent in Charge John W. Callery. “DEA and our outstanding partners will continue to investigate illicit financial transactions and anyone who may operate businesses that stand to profit from illegal drug sales.”
U.S. Attorney Brewer commended the diligence and dedication of Assistant U.S. Attorneys Daniel Silva and Mark W. Pletcher, the prosecutors on this case. Sentencing for Mr. Han is scheduled to occur on May 1, 2020 before Hon. Janis L. Sammartino. Sentencing for Mr. Zhang is scheduled to occur on May 4, 2020 before Hon. William Q. Hayes. Han and Zhang both face a maximum of 5 years in prison.
DEFENDANTS Case Numbers 20-CR-369-JLS (Han)
Case Number 20-CR-370-WQH (Zhang)
Bing Han Las Vegas, NV Age: 44
Lei Zhang Las Vegas, NV Age: 40
SUMMARY OF CHARGES*
Operation of Unlicensed Money Transmitting Business – Title 18, U.S.C., Section 1960
Maximum penalty: Five years in prison and $250,000 fine
AGENCIES
Homeland Security Investigations
IRS Criminal Investigation Las Vegas Financial Crimes Task Force
Drug Enforcement Administration
*The charges and allegations contained in an indictment or information are merely accusations, and the defendants are considered innocent unless and until proven guilty.
It’s Time for a Permanent Ban on Fentanyl AnaloguesRead the Press Release
Joint Statement by California’s United States Attorneys: Robert S. Brewer, Southern District; Nicola T. Hanna, Central District; David L. Anderson, Northern District; McGregor W. Scott, U.S. Attorney, Eastern District
In 2017, almost 50,000 Americans died from opioid overdoses. In California alone, there were 2,428 fatal opioid overdoses in 2018. And it’s getting worse. In San Francisco and Los Angeles Counties, for instance, opioid fatalities have increased by 54% and 41%, respectively, since 2016. San Diego County and the Central Valley are also experiencing unprecedented levels of fatal opioid overdoses. This is a crisis, and illicitly produced fentanyl is largely responsible.
To fight this epidemic, law enforcement must have all the necessary tools at their disposal. One such tool is the Drug Enforcement Administration’s (DEA) 2018 order making all fentanyl-related drugs illegal in the United States. Unfortunately, that order was temporary and will expire in less than two weeks. The Senate recently passed bipartisan legislation approving a 15-month extension of the temporary order. While this is a step in the right direction, and the House should pass the Senate’s bill, a longer term solution is needed. We need a permanent ban on all fentanyl-like drugs.
Illicit fentanyl is manufactured in labs in China and Mexico and smuggled into the United States. It is 50 times more powerful than heroin and 100 times more powerful than morphine. So powerful, in fact, that only a couple milligrams – the size of a few grains of salt – can kill the average person.
Fentanyl, however, is unique. Because it is made in labs using chemicals, its structure is easily manipulated. And the drug cartels that manufacture and traffic this synthetic poison into our neighborhoods understand American laws and know how to exploit them. They know that by changing a single molecule in the chemical structure of fentanyl, they have essentially created a new drug. One that, unlike fentanyl, is not illegal in the United States. These drugs, known as “fentanyl analogues,” do as fentanyl does: create more addicts and kill more Americans. The analogues – which can be up to 100 times more potent than fentanyl and 10,000 times more potent than morphine – will become legal if Congress fails to act.
The DEA’s 2018 decision to temporarily schedule – that is, to make illegal – all fentanyl-related substances was a response to the extraordinary legal loophole exploited by drug traffickers. In April 2019, China also outlawed all fentanyl-related substances. This is extraordinary progress, with one caveat. Unlike China’s law, the United States’ has an expiration date.
On Feb. 6, 2020, the DEA’s temporary order expires, and all drugs seized by U.S. investigators over the past two years that have tested positive as fentanyl analogues will no longer be illegal. If Congress fails to pass the legislation it will have a dramatic impact not just on the prosecutors and law enforcement officers who spend their lives investigating and prosecuting drug dealers, but on communities already hard hit by the opioid epidemic, many of which are right here in California.
Despite the tireless efforts of law enforcement, California continues to be a main thoroughfare for fentanyl and fentanyl-like drugs arriving from China and Mexico. In 2019, federal law enforcement agents seized about three-quarters of a ton of fentanyl at the six ports of entry we share with Mexico and in all places in between. That’s 20 percent more than in 2018. And our federal resources are not infinite; we need all the help we can get. Passing this legislation would provide invaluable support to us as prosecutors and the entire law enforcement community as we continue to combat the opioid crisis in California and throughout America.
A number of organizations have voiced opposition to the proposed legislation, arguing that the bill does not “embrace public health approaches to the overdose crisis.” We agree that a comprehensive approach to the crisis is needed, and a permanent fentanyl analogue ban should be viewed as part of a holistic effort. But time is running out: there is no doubt that drug traffickers are eagerly awaiting the temporary order’s expiration to start flooding our communities with these dangerous drugs. The passage of this legislation is quite literally a matter of life and death.
There should be nothing partisan about declaring fentanyl analogues illegal. There is certainly nothing partisan about saving lives and bringing justice to those who profit from addiction and death. For the safety of our communities, we urge Congress to pass legislation making permanent the DEA’s temporary scheduling of all fentanyl-related drugs.
San Diego’s Arch Health Pays $2.9 Million to Resolve False Claims Act AllegationsRead the Press Release
NEWS RELEASE SUMMARY – January 23, 2020
SAN DIEGO – Arch Health Partners, Inc. (“Arch Health”) has agreed to pay the United States $2,910,370 to resolve allegations that it violated the False Claims Act by submitting false claims to Medicare. Arch Health is a San Diego-based medical organization that contracts with physician groups to provide care through the Palomar Health system.
The United States alleged that Arch Health violated the False Claims Act by submitting claims for federal reimbursement for medical evaluation and management services absent sufficient documentation regarding the nature and complexity of the services provided. Those particular allegations were originally self-disclosed by Arch Health and were also brought in a lawsuit filed by a former employee of Arch Health, Catherine Jones, 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. Ms. Jones will receive $183,830 of the settlement proceeds. The United States also alleged, based on certain self-disclosures by Arch Health, that it paid compensation to referring physicians and physician groups that was above fair market value in violation of the Anti-Kickback Act, the Stark Statute, and, by extension, the False Claims Act.
“Improper billing practices and unlawful financial arrangements with referring health care providers present serious program integrity concerns,” said United States Attorney Robert S. Brewer, Jr. “This civil settlement confirms our commitment to civil health care fraud enforcement as a key component of the mission of our office. We also commend the whistleblower for coming forward and working with our investigators.”
“When companies falsely claim payment for services, taxpayers and government health programs are both victimized,” said Timothy B. DeFrancesca, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “We will continue working with our law enforcement partners to hold accountable those who would harm these programs.”
“This $2.9 million dollar settlement demonstrates how these violations have a significant and direct economic impact on the health care industry,” said FBI Special Agent-in-Charge Scott Brunner. “Our priority is to protect consumers and hold accountable those in the healthcare system who misuse government health programs.”
The investigation was conducted by the United States Attorney’s Office for the Southern District of California, the U.S. Department of Health and Human Services’ Office of Inspector General, and the Federal Bureau of Investigation. U.S. Attorney Brewer commended the excellent work by AUSA Glen Dorgan of the office’s Civil Division, whose diligence was a major factor in resolving this matter.
This case is captioned United States ex rel. Jones v. Arch Health Partners, Inc., et al., Case No. 3:17-cv-0090-MMA-BLM, and the matter was handled by Assistant U.S. Attorney Glen F. Dorgan of the Affirmative Civil Enforcement Unit of the U.S. Attorney’s Office.
“Pill Mill” Doctor Pleads Guilty to Opioid Distribution, Admits Signing Prescriptions for Dead and Jailed PatientsRead the Press Release
Assistant U. S. Attorneys Larry Casper (619) 546-6734 and Victor White (619) 546-8439
NEWS RELEASE SUMMARY – January 21, 2020
SAN DIEGO – Egisto Salerno, a medical doctor practicing in San Diego, pleaded guilty to opioid distribution in federal court today, admitting that he signed bogus prescriptions for multiple deceased or incarcerated patients.
According to his plea agreement, Salerno, 75, illegally distributed 78,544 hydrocodone pills. Hydrocodone is an opioid pain medication commonly known as Norco or Vicodin. Salerno admitted that his prescriptions for the 10 mg tablets were outside the usual course of his medical practice and were without a legitimate medical purpose.
“We will continue to zealously pursue doctors who write opioid or other prescriptions that are plainly outside their professional practice and without a legitimate medical purpose,” said U.S. Attorney Robert Brewer. “Even a medical degree does not put one above the law.” Brewer praised prosecutors Larry Casper and Victor White and DEA agents for their commitment to achieving justice in this case.
“Because of pill mills operated by doctors like Egisto Salerno, our country has been devastated by the negative effects of prescription pain medication,” said DEA Special Agent in Charge John W. Callery. “But DEA and our partners at the U.S. Attorney’s Office are fighting back. Today’s guilty plea is testament to their teamwork and dedication in thwarting the opioid crisis in the San Diego area. Dr. Salerno’s medical career is over; he betrayed his oath to the medical community and his patients. DEA and our partners will continue to conduct these investigations to ensure doctors are following the rules set forth when prescribing potentially deadly drugs.”
Salerno also admitted that an undercover federal agent who visited Salerno’s clinic on six occasions received six hydrocodone prescriptions containing Salerno’s signature. In a separate instance, on a date when the undercover agent did not visit the clinic and the doctor did not see him, Salerno acknowleged that a prescription was written in the name used by the undercover agent and that Salerno completed and signed a progress note in the “patient” chart for the purported visit that did not occur.
Salerno used his medical practice on El Cajon Boulevard in San Diego to carry out this criminal activity between November 2014 and February 2018, the plea agreement said. During this period, Salerno also acknowledged that he pre-signed prescriptions and often allowed his non-physician employees to complete those prescriptions; and that, with regard to one of the multiple dead “patients,” his signature appeared on at least five prescriptions made out in the “patient’s” name that were issued and filled more than a year after the “patient” died.
Salerno is the seventh defendant to enter a guilty plea in connection with the pending case that flowed from the investigation of this “pill mill.” Each of the defendants is awaiting sentencing. The plea agreements of the six other defendants show that paid patient “recruiters” were bringing “patients,” many of whom were homeless, to Salerno’s office to secure hydrocodone prescriptions; that, after the prescriptions were written, the “patients” were brought to pharmacies to fill the prescriptions; “patients” turned over their hydrocodone tablets to the recruiters in exchange for payment and, in some instances, recruiters picked up the tablets from the pharmacies themselves; and, in turn, those hydrocodone pills were being sold by the lead recruiter in San Diego and that such pills were also smuggled into Mexico and sold to a pharmacy there.
The guilty plea was entered before, and accepted by, U.S. District Judge Cynthia Bashant who will sentence Salerno on May 11, 2020.
DEFENDANT Case Number 18-cr-1405-BAS
Egisto Salerno, M.D. Age: 75 San Diego, California
SUMMARY OF CHARGES
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 Guilty Pleas in same case:
Stephen Toney, Sr.:
Pleaded guilty to Conspiracy to Possess With Intent to Distribute Hydrocodone, in violation of Title 18, U.S.C., Sec. 841(a)(1) and 846.
Sentencing Date: March 16, 2020
Amber Nicole Grabau:
Pleaded guilty to Conspiracy to to Possess With Intent to Distribute Hydrocodone, in violation of Title 18, U.S.C., Sec. 841(a)(1) and 846.
Sentencing Date: March 9, 2020
Lonell J. Ligon:
Pleaded guilty to Conspiracy to to Possess With Intent to Distribute Hydrocodone, in violation of Title 18, U.S.C., Sec. 841(a)(1) and 846.
Sentencing Date: April 6, 2020
Shalina D. Latson:
Pleaded guilty to Conspiracy to to Possess With Intent to Distribute Hydrocodone, in violation of Title 18, U.S.C., Sec. 841(a)(1) and 846.
Sentencing Date: March 9, 2020
LaJuan D. Smith:
Pleaded guilty to Conspiracy to to Possess With Intent to Distribute Hydrocodone, in violation of Title 18, U.S.C., Sec. 841(a)(1) and 846.
Sentencing Date: February 3, 2020
April J. Cervantes:
Pleaded guilty to Conspiracy to to Possess With Intent to Distribute Hydrocodone, in violation of Title 18, U.S.C., Sec. 841(a)(1) and 846.
Sentencing Date: March 2, 2020
INVESTIGATING AGENCY
Drug Enforcement Administration
Resmed Corp. to Pay the United States $37.5 Million for Allegedly Causing False Claims Related to the Sale of Equipment for Sleep Apnea and Other Sleep-Related DisordersRead the Press Release
ResMed Corp., a manufacturer of durable medical equipment (DME) based in San Diego, California, has agreed to pay more than $37.5 million to resolve alleged False Claims Act violations for paying kickbacks to DME suppliers, sleep labs and other health care providers, the Department of Justice announced today.
“Paying any type of illegal remuneration to induce patient referrals undermines the integrity of our nation’s health care system,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “When a patient receives a prescription for a device to treat a health care condition, the patient deserves to know that the device was selected based on quality of care considerations and not on unlawful payments from equipment manufacturers.”
The Anti-Kickback Statute prohibits the knowing and willful payment of any remuneration to induce the referral of services or items that are paid for by a federal healthcare program, such as Medicare, Medicaid or TRICARE. Claims submitted to these programs in violation of the Anti-Kickback Statute give rise to liability under the False Claims Act.
The settlement resolves allegations that ResMed (a) provided DME companies with free telephone call center services and other free patient outreach services that enabled these companies to order resupplies for their patients with sleep apnea, (b) provided sleep labs with free and below-cost positive airway pressure masks and diagnostic machines, as well as free installation of these machines, (c) arranged for, and fully guaranteed the payments due on, interest-free loans that DME supplies acquired from third-party financial institutions for the purchase of ResMed equipment, and (d) provided non-sleep specialist physicians free home sleep testing devices referred to as “ApneaLink.”
“This settlement represents another example of our district’s commitment to prosecuting violations of the False Claims Act and the Anti-Kickback Statute,” said Lance Crick, Acting U. S. Attorney for the District of South Carolina. “Medical decisions should be based on what is in the best interest of the patient and not based on financial incentives and related schemes.”
“Medical decisions should always be made without outside influence caused by cash payments, free goods, or other types of illegal remuneration, and we will continue to take action to prevent attempts to induce medical decisions through illegal kickbacks,” said Katherine L. Parker, Civil Chief, U.S. Attorney’s Office for the Southern District of California. “We applaud the whistleblower for coming forward and notifying the United States.”
“Illegal kickbacks in the federal healthcare system create an unfair marketplace and the potential that medical decisions are not based on what is best for patients,” said U.S. Attorney Peter E. Deegan Jr. for the Northern District of Iowa. “This settlement is another sign of our office’s dedication to fair and full enforcement of the False Claims Act.”
“When companies give free equipment to doctors for the sole purpose of generating business and increasing their bottom lines, federal health insurance programs should not foot the bills. This case rights that alleged wrong by ResMed,” said U.S. Attorney Richard P. Donoghue for the Eastern District of New York. “We will continue to work with our law enforcement partners to hold accountable companies that put profits before patients.”
Contemporaneous with the civil settlement, ResMed entered into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General. The CIA requires, among other things, that ResMed implement additional controls around its product pricing and sales and that ResMed conduct internal and external monitoring of its arrangements with referral sources.
The agreement resolves five lawsuits originally brought by whistleblowers under the qui tam, or whistleblower, provisions of the False Claims. The False Claims Act permits private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in the recovery. The whistleblowers will collectively receive a roughly $6.2 million share of the settlement.
“The government contended ResMed provided free goods and services to companies in order to sell more medical equipment bought by taxpayers,” said Derrick L. Jackson, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “The OIG’s integrity agreement with ResMed is designed to ensure such alleged behavior will not be repeated.”
“I applaud the Department of Justice and the U.S. Attorneys' for their continued efforts to hold health care providers accountable to the American taxpayer," said Army Lt. Gen. Ron Place, Director of the Defense Health Agency. “The efforts of the Department of Justice safeguard the health care benefit for our service members, veterans and their families. The Defense Health Agency continues to work closely with the Justice Department, and other state and federal agencies to investigate all those who participated in fraudulent practices.”
This settlement was the result of a coordinated effort by the Civil Division of the United States Department of Justice; the U.S. Attorney’s Offices for the District of South Carolina, the Southern District of California, the Northern District of Iowa, and the Eastern District of New York; the Department of Health and Human Services, Office of Counsel to the Inspector General and Office of Investigations; the Defense Criminal Investigative Service; the Defense Health Agency Office of General Counsel; the Federal Bureau of Investigation; and the National Association of Medicaid Fraud Control Units.
The lawsuits resolved by this settlement are captioned United States, et al., ex rel. Ameer v. ResMed, Inc., et al., Case No. 2:15-CV-04842-MBS (D.S.C.); United States, et al., ex rel. Baker v. ResMed, Inc., et al., Case No. 3:16-CV-00987-MBS (D.S.C.); United States, et al., ex rel. Ross v. ResMed, Inc., Case No. 16-CV-1988-W (JLB) (S.D. Cal.); United States ex rel. Meyer v. ResMed, Inc., et al., Case No. 17-CV-12-MWB (N.D. Iowa); and United States, et al., ex rel. Ottavio, et al. v. ResMed, Inc., Case No. CV 17-5734 (E.D.N.Y.).
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
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.
ResMed Corp. to Pay $37.5 Million for Allegedly Causing False Claims Related to the Sale of Equipment for Sleep Apnea and other DisordersRead the Press Release
Assistant U. S. Attorneys Joseph Price (619) 546-7642 and Dylan Aste (619) 546-7621
NEWS RELEASE SUMMARY – January 15, 2020
SAN DIEGO – ResMed Corp., a manufacturer of durable medical equipment (DME) based in San Diego, California, has agreed to pay more than $37.5 million to resolve alleged False Claims Act violations for paying kickbacks to DME suppliers, sleep labs and other health care providers, the Department of Justice announced today.
“Paying any type of illegal remuneration to induce patient referrals undermines the integrity of our nation’s health care system,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “When a patient receives a prescription for a device to treat a health care condition, the patient deserves to know that the device was selected based on quality of care considerations and not on unlawful payments from equipment manufacturers.”
The Anti-Kickback Statute prohibits the knowing and willful payment of any remuneration to induce the referral of services or items that are paid for by a federal healthcare program, such as Medicare, Medicaid or TRICARE. Claims submitted to these programs in violation of the Anti-Kickback Statute give rise to liability under the False Claims Act.
The settlement resolves allegations that ResMed (a) provided DME companies with free telephone call center services and other free patient outreach services that enabled these companies to order resupplies for their patients with sleep apnea, (b) provided sleep labs with free and below-cost positive airway pressure masks and diagnostic machines, as well as free installation of these machines, (c) arranged for, and fully guaranteed the payments due on, interest-free loans that DME supplies acquired from third-party financial institutions for the purchase of ResMed equipment, and (d) provided non-sleep specialist physicians free home sleep testing devices referred to as “ApneaLink.”
“Medical decisions should always be made without outside influence caused by cash payments, free goods, or other types of illegal remuneration, and we will continue to take action to prevent attempts to induce medical decisions through illegal kickbacks,” declared Katherine L. Parker, Civil Chief, United States Attorney’s Office for the Southern District of California. “We applaud the whistleblower for coming forward and notifying the United States.”
“This settlement represents another example of our district’s commitment to prosecuting violations of the False Claims Act and the Anti-Kickback Statute,” said Lance Crick, Acting U. S. Attorney for the District of South Carolina. “Medical decisions should be based on what is in the best interest of the patient and not based on financial incentives and related schemes.”
“Illegal kickbacks in the federal healthcare system create an unfair marketplace and the potential that medical decisions are not based on what is best for patients,” said U.S. Attorney Peter E. Deegan, Jr., for the Northern District of Iowa. “This settlement is another sign of our office’s dedication to fair and full enforcement of the False Claims Act.”
“When companies give free equipment to doctors for the sole purpose of generating business and increasing their bottom lines, federal health insurance programs should not foot the bills. This case rights that alleged wrong by ResMed,” stated United States Attorney for the Eastern District of New York Richard P. Donoghue. “We will continue to work with our law enforcement partners to hold accountable companies that put profits before patients.”
Contemporaneous with the civil settlement, ResMed entered into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General. The CIA requires, among other things, that ResMed implement additional controls around its product pricing and sales and that ResMed conduct internal and external monitoring of its arrangements with referral sources.
The agreement resolves five lawsuits originally brought by whistleblowers under the qui tam, or whistleblower, provisions of the False Claims. The False Claims Act permits private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in the recovery. The whistleblowers will collectively receive a roughly $6.2 million share of the settlement.
“The government contended ResMed provided free goods and services to companies in order to sell more medical equipment bought by taxpayers,” said Derrick L. Jackson, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “The OIG’s integrity agreement with ResMed is designed to ensure such alleged behavior will not be repeated.”
“I applaud the Department of Justice and the U.S. Attorneys' for their continued efforts to hold health care providers accountable to the American taxpayer," said Army Lt. Gen. Ron Place, director of the Defense Health Agency. “The efforts of the Department of Justice safeguard the health care benefit for our service members, veterans and their families. The Defense Health Agency continues to work closely with the Justice Department, and other state and federal agencies to investigate all those who participated in fraudulent practices.”
This settlement was the result of a coordinated effort by the Civil Division of the United States Department of Justice; the U.S. Attorney’s Offices for the District of South Carolina, the Southern District of California, the Northern District of Iowa, and the Eastern District of New York; the Department of Health and Human Services, Office of Counsel to the Inspector General and Office of Investigations; the Defense Criminal Investigative Service; the Defense Health Agency Office of General Counsel; the Federal Bureau of Investigation; and the National Association of Medicaid Fraud Control Units.
The lawsuits resolved by this settlement are captioned United States, et al., ex rel. Ameer v. ResMed, Inc., et al., Case No. 2:15-CV-04842-MBS (D.S.C.); United States, et al., ex rel. Baker v. ResMed, Inc., et al., Case No. 3:16-CV-00987-MBS (D.S.C.); United States, et al., ex rel. Ross v. ResMed, Inc., Case No. 16-CV-1988-W (JLB) (S.D. Cal.); United States ex rel. Meyer v. ResMed, Inc., et al., Case No. 17-CV-12-MWB (N.D. Iowa); and United States, et al., ex rel. Ottavio, et al. v. ResMed, Inc., Case No. CV 17-5734 (E.D.N.Y.).
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Drug Trafficker Admits Mailing Thousands of Packages containing Fentanyl, Methamphetamine and Heroin to Customers around the U.S.Read the Press Release
Assistant U. S. Attorney Sherri Walker Hobson (619) 961-0287
NEWS RELEASE SUMMARY – January 9, 2020
SAN DIEGO – Erik Alexi Martineau, a U.S. citizen who was living in Mexico, pleaded guilty in federal court today, admitting that he mailed an estimated 7,800 parcels containing fentanyl, methamphetamine and heroin from San Diego to locations throughout the U.S.
Martineau pleaded guilty before U.S. Magistrate Judge Barbara Major to Conspiracy to Distribute Controlled Substances. He is scheduled to be sentenced on March 30 at 9 a.m. by U.S. District William Q. Hays. Martineau faces a mandatory minimum sentence of 10 years in custody.
“The use of the Postal Service to distribute dangerous drugs – particularly deadly fentanyl – puts the Postal Service and the public at risk,” said U.S. Attorney Robert Brewer. “We are not going to allow drug traffickers to hijack the U.S. Mail.”
According to his plea agreement, in January 2018, Martineau rented a storage unit in San Diego County to package controlled substances like methamphetamine, heroin, and fentanyl for shipment to various locations. The defendant also opened a business account at an office supply store so that he could print shipping labels for parcels containing controlled substances.
From January 2018 to June 29, 2019, Martineau received multiple shipping labels from others and arranged to print them at an office supply store. He picked up the controlled substances from various locations in San Diego and packaged the controlled substances inside his rented storage locker. During the 18-month conspiracy, Martineau packaged approximately 100 parcels each week, or about 7,800 parcels.
During the investigation conducted by the U.S. Postal Inspectors and Homeland Security Investigations, law enforcement seized hundreds of parcels containing controlled substances.
Brewer praised Assistant U.S. Attorney Sherri Walker Hobson and federal agents from Homeland Security Investigations and the U.S. Postal Inspectors for uncovering the scheme and working hard to achieve justice.
DEFENDANT
Erik Alexis Martineau Age: 50 Mexico
SUMMARY OF CHARGES Case Number 19cr2836WQH
Conspiracy to Distribute Controlled Substances, in violation of 21 U.S.C. 841 and 846
Maximum Penalty: Life in prison (10-year minimum mandatory); $10 million fine
INVESTIGATING AGENCIES
U.S. Postal Inspectors
Homeland Security Investigations
Defendant Sentenced to Life in Prison for the Murder of U.S. Border Patrol Agent Brian TerryRead the Press Release
Special Attorneys David Leshner and Todd Robinson
TUCSON, Arizona – Heraclio Osorio-Arellanes was sentenced in federal court today to life in prison for his role in the murder of 40-year-old U.S. Border Patrol Agent Brian Terry on December 14, 2010.
On February 12, 2019, a federal jury found that Osorio-Arellanes, 41, was part of an armed crew of bandits that murdered Agent Terry while they were attempting to rob drug smugglers transporting drugs from Mexico into the United States. Osorio-Arellanes was convicted of nine counts, including first degree murder, second degree murder, conspiracy to commit robbery, attempted robbery, assault on four Border Patrol Agents and carrying a firearm during a crime of violence. Osorio-Arellanes is the sixth of seven defendants in this case to be convicted and sentenced to date.
“Brian Terry exemplified the very best of law enforcement: A selfless, determined agent who was committed to protecting the people of the United States,” said U.S. Attorney Robert Brewer of the Southern District of California. “The United States has vigorously pursued justice for Agent Terry’s family and for the men and women of the U.S. Border Patrol. A life sentence for Agent Terry’s murder cannot eliminate his family’s suffering. But it is our hope that this sentence brings some degree of comfort to Agent Terry’s family in knowing that the individuals responsible for his murder will be held accountable.”
“Today’s sentencing reflects the FBI’s unwavering commitment to ensure that all those responsible for the death of U.S. Border Patrol Agent Brian Terry are brought to justice,” said Sean Kaul, Special Agent in Charge of the FBI Phoenix Field Office.
“Today brings us one step closer to justice for Agent Brian Terry’s murder,” said Tucson Sector Chief Roy Villareal. “The sentencing brings a painful time closer to an end and serves as a reminder of the grave dangers our agents face in their selfless commitment to the safety of their communities and country.”
According to the evidence presented at trial, on December 14, 2010, Agent Terry’s elite Border Patrol BORTAC unit was in a rural area north of Nogales, Arizona, to interdict an armed “rip crew” that was robbing drug traffickers. The BORTAC team observed a group of five bandits armed with assault rifles walking through a wash. The BORTAC agents announced their presence, and the bandits fired on the agents. The agents returned fire. A bullet fired by one of the bandits struck Agent Terry in the lower back. His fellow agents provided first aid, but Agent Terry was fatally injured.
Heraclio Osorio-Arellanes, also known as Jesus Lionel Sanchez Meza and Lionel Portillo-Meza, is one of seven defendants charged in the District of Arizona with murder and other crimes arising from the murder of Agent Terry. Osorio-Arellanes was taken into custody in 2017 by Mexican authorities in Chihuahua, Mexico based on a provisional arrest warrant issued at the request of the United States. He was transported to Mexico City for extradition proceedings and arrived in the United States on August 1, 2018.
Defendants Ivan Soto-Barraza and Jesus Lionel Sanchez-Meza were arrested in Mexico and subsequently extradited to the United States in 2014. They were convicted by a jury of first degree murder and other offenses in December 2015 following a jury trial and were sentenced to life in prison.
Defendants Manuel Osorio-Arellanes and Rosario Rafael Burboa-Alvarez pleaded guilty to first degree murder. Osorio-Arellanes was sentenced to 360 months in prison, and Burboa-Alvarez was sentenced to 324 months in prison.
Defendant Rito Osorio-Arellanes pleaded guilty to conspiracy to interfere with commerce by robbery and was sentenced to 96 months in prison.
Defendant Jesus Favela-Astorga was arrested by Mexican authorities in November 2017 pursuant to a provisional arrest request filed by the United States Government. He is pending extradition to the United States and will be tried for Agent Terry’s murder following his extradition.
The case is being prosecuted by attorneys from the Southern District of California, Special Attorneys Todd W. Robinson and David D. Leshner. The U.S. Attorney’s Office for the District of Arizona is recused. The case was investigated by the FBI. The apprehension was a coordinated effort by the Mexican Navy (SEMAR), Mexico’s Office of the Attorney General (PGR), FBI, U.S. Marshals Service and U.S. Border Patrol with significant assistance provided by the Criminal Division’s Office of International Affairs.
“The conviction and life sentence for Heraclio Osorio-Arellanes is the result of the dedicated efforts of the Federal Bureau of Investigation, including Special Agent Michelle Terwilliger, who has handled this case since December 2010,” U.S. Attorney Brewer said. He also praised prosecutors Leshner and Robinson for their dedication to achieving justice in this case.
San Diego Eye Doctors Pay $950,000 to Settle Medicare Billing Fraud AllegationsRead the Press Release
Assistant U.S. Attorney Joseph P. Price, Jr. (619) 546-7642
NEWS RELEASE SUMMARY – January 2, 2020
SAN DIEGO – Mark D. Smith and Fane Robinson, two San Diego-area physicians, have paid the United States $948,768.18 to resolve allegations that they violated the federal False Claims Act by knowingly submitting false claims to Medicare.
Dr. Smith and Dr. Robinson are medical doctors specializing in ophthalmology. They maintain a medical practice in San Diego known as San Diego Retina Associates and are participating providers in federally-funded health care programs including Medicare.
The United States alleged that Drs. Smith and Robinson violated the False Claims Act by submitting false claims to Medicare for care that was provided by a San Diego Retina Associates physician who was not properly credentialed at the time to render care to Medicare patients.
The United States also alleged that Drs. Smith and Robinson improperly received Medicare payments when another San Diego Retina Associates physician provided care to Medicare patients but Drs. Smith and Robinson submitted claims that misidentified the treating physician.
The settlement concludes a lawsuit originally filed in the United States District Court for the Southern District of California by Atul Jain, M.D., an ophthalmologist and former partner at San Diego Retina Associates. Dr. Jain sued under the qui tam, or whistleblower, provisions of the False Claims Act, which permits a private citizen to initiate a lawsuit on behalf of the United States for false claims and to share in the recovery. Dr. Jain will receive $170,778.27 of the proceeds from the United States’ settlement with Drs. Smith and Robinson.
“Falsely billing in order to circumvent Medicare’s oversight of physicians negatively impacts taxpayers and puts at risk patients’ health,” said U.S. Attorney Robert Brewer. “This settlement reflects our commitment to maintain the integrity of the Medicare program. As this settlement also reflects, we continue to vigorously investigate cases brought to our attention by whistleblowers. We commend the whistleblower in this case, Dr. Jain, for coming forward and for working with investigators.”
“Federal health care beneficiaries can clearly see federal health programs’ need to pay only for the services of properly credentialed eye doctors and other medical professionals. To do otherwise could harm both patients and taxpayers,” said Timothy B. DeFrancesca, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “We will continue working closely with our law enforcement partners to protect government healthcare programs and enrolled beneficiaries.”
The investigation was conducted by the U.S. Attorney’s Office for the Southern District of California and the U.S. Department of Health and Human Services’ Office of Inspector General. This case is captioned United States, et al. ex rel. Jain v. Dr. Mark D. Smith, M.D., et al., Case No. 18-cv-1213-AJB (WVG), and the matter was handled by Assistant U.S. Attorney Joseph P. Price, Jr. of the Affirmative Civil Enforcement Unit of the U.S. Attorney’s Office. U.S. Attorney Brewer commended the prosecutors and investigators for working hard to bring the case to a successful conclusion.
U.S. Attorney’s Office Recovers more than $25 Million in Civil and Criminal Actions in Fiscal Year 2019Read the Press Release
Assistant U. S. Attorney Leah Bussell (619) 546-6727
NEWS RELEASE SUMMARY – December 23, 2019
SAN DIEGO – The Southern District of California collected $15,280,216.07 in criminal and civil actions in Fiscal Year 2019. Of this amount, $11,247,702.88 was collected in criminal actions and $4,032,513.19 was collected in civil actions. The Southern District of California worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $1,991,480.00 in cases pursued jointly by these offices.
Additionally, the U.S. Attorney’s office for the Southern District of California, working with partner agencies and divisions, collected $10,665,224 in asset forfeiture actions in FY 2019.
“The recovery of stolen funds and the return of that money to victims is an important priority for this office,” said U.S. Attorney Robert Brewer. “We use all available legal tools to recover money for victims and ensure that defendants are held accountable for the full amount of the losses. These results are a great credit to the hard work and dedication of our Asset Recovery section led by Assistant U.S. Attorney Leah Bussell and our outstanding team of agency partners.”
In one case in August, the U.S. Attorney’s Office recovered $2,934,754.01 in fraud proceeds from Karen Galstian. Galstian had pleaded guilty to conspiracy to commit mail and wire fraud in November of 2015. A court sentenced Galstian to 100 months custody and ordered him to pay restitution to the victim. The United States Attorney’s office pursued collection of the restitution and in August of 2019, collected almost $3 million from assets owned by Galstian – funds that were distributed to the victim.
The U.S. Attorneys’ offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims Fund, which distributes the funds collected to federal and state victim compensation and victim assistance programs.
Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
Three Defendants Charged with Importing over 500 lbs. of MethamphetamineRead the Press Release
NEWS RELEASE SUMMARY – December 20, 2019
SAN DIEGO – Liam Graham Szalay-Bristol, Jose Benjamin Cisneros-Quintero, and Cristian Rodriguez-Hernandez were charged in federal court yesterday with conspiring to import 505 pounds of methamphetamine, in violation of Title 21, U.S.C., Section 963. Defendant Cisneros-Quintero was also charged with knowingly and intentionally importing the drug, in violation of Title 21, U.S.C., Sections 952 and 960.
On December 18, 2019, Cisneros-Quintero, the driver and sole occupant of a white bobtail box truck, arrived at the Otay Mesa Port of Entry Cargo Facility with what appeared to be a load of cement and/or clay blocks. The U.S. Customs and Border Protection Officer inspected one of the cement blocks and observed a brown package inside, containing a white crystal substance that field-tested positive for methamphetamine. The truck and Cisneros-Quintero were subsequently released from the inspection area and were kept under constant surveillance by special agents with Homeland Security Investigations. While agents watched closely, Cisneros-Quintero picked up defendant Rodriguez-Hernandez and met with Defendant Szalay-Bristol before proceeding to a storage facility, which defendant Szalay-Bristol unlocked. At that point, the three defendants unloaded a total of 60 packages weighing 505.87 pounds into the unit. All three were arrested, charged, and appeared in federal court yesterday afternoon.
“Methamphetamine-related deaths are at record numbers here in San Diego, and this spike directly mirrors the increase in meth seizures at the border,” said U.S. Attorney Robert Brewer. “Fortunately, diligent federal agents prevented this very large meth load from causing further misery in our community, and ensured that the smugglers responsible will be held accountable.”
“Methamphetamine continues to be a deadly epidemic impacting our communities, and San Diego is a key hub for Mexican cartel methamphetamine coming into the United States,” said Cardell T. Morant, acting special agent in charge of Homeland Security Investigations (HSI) San Diego. “As this significant seizure makes clear, HSI, CBP, and our partners are resolute in our efforts to protect our communities and our country from the threats of drug trafficking.”
“Smuggling of narcotics is a serious threat to our communities. As long as transnational criminal originations continue to profit from their illicit activities, they will continue to develop ways to move their product,” said Pete Flores, director of Field Operations for CBP in San Diego. “Close collaboration between CBP and HSI is an essential piece to combatting trafficking of illegal narcotics.”
DEFENDANTS Case Number 19MJ5657
Liam Graham Szalay-Bristol Age: 21 San Diego
Jose Benjamin Cisneros-Quintero Age: 25 Tijuana
Cristian Rodriguez-Hernandez Age: 31 Tijuana
SUMMARY OF CHARGES
Importation of Methamphetamine, in violation of 21 U.S.C. §§ 952, 960
Maximum penalty: Life in prison and $10 million fine
Conspiracy to import Schedule II Controlled Substance into the U.S., in violation of 21 U.S.C. § 963
Maximum penalty: Life in prison and $10 million fine
AGENCIES
Homeland Security Investigations
Customs and Border Protection
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Woman who Smuggled Meth across the Border Sentenced to Nine Years in PrisonRead the Press Release
Assistant U. S. Attorney Jaclyn Stahl (619) 546-8456
NEWS RELEASE SUMMARY – December 17, 2019
SAN DIEGO – Laura Casas, who was convicted by a federal jury of smuggling $128,000 worth of methamphetamine through the Otay Mesa Port of Entry with her three children in the car, was sentenced in federal court Monday to 108 months in prison.
Casas was convicted of importation of methamphetamine following a two-day jury trial that concluded on September 6, 2019.
“Methamphetamine is ravaging our community and is a lethal drug,” said U.S. Attorney Robert Brewer. “It is strong, pure, cheap, and – because of the actions of this defendant and others like her – plentiful. I commend trial attorney Jaclyn Stahl for her excellent work on this case.”
“Methamphetamine is a powerful drug that continues to devastate our communities,” said Cardell T. Morant, acting special agent in charge of HSI San Diego. “This sentencing should serve as a stark reminder that those who facilitate the movement of dangerous drugs for transnational criminal organizations will be held accountable for their actions.”
On November 15, 2018, at approximately 12:04 a.m., the defendant, a U.S. Citizen, presented a California driver’s license and applied for entry into the United States at the port of entry. A narcotic detection dog alerted to the vehicle. In the secondary inspection area, officers removed paneling from the dashboard and discovered fifty packages of methamphetamine in a secret compartment. The packages weighed approximately 69 pounds. The drugs were concealed in a sophisticated non-factory compartment that required significant modifications to the vehicle and would have taken hours to construct.
According to evidence presented at trial, messages from the defendant’s phone, when compared with her crossing history, paint a clear picture of her planning and preparation to commit this crime.
Prosecutors argued for a longer sentence because the defendant testified falsely at trial that she did not know there were drugs in the vehicle. She also testified that the damning text messages on her phone were about a scheme of smuggling pug puppies – not drugs - into the United States. Her testimony was directly contradicted by the evidence.
Further, the United States believes that the defendant intended to suborn false testimony from the defendant’s sister-in-law and mother-in-law at trial. Both women told the pug smuggling story to agents when they were interviewed in anticipation of trial. They were set to testify to the pug smuggling story but chose not to at the last moment.
Evidence collected in anticipation of their testimony shows that the in-laws crossed into the United States from Mexico three months after the defendant’s arrest with puppies that were too young to enter the country legally. This evidence suggests that the defendant and her family not only manufactured this defense after her arrest but went to significant lengths to do so.
DEFENDANTS Case Number 18-CR-5355-AJB
Laura Casas Age: 28 San Diego, CA
SUMMARY OF CHARGES
Importation of Methamphetamine, in violation of 21 U.S.C. §§ 952, 960
Maximum penalty: Life in prison and $10 million fine
AGENCY
Homeland Security Investigations
Customs and Border Protection
Justice Department Awards More Than $333 Million to Fight Opioid CrisisRead the Press Release
Kelly Thornton (619) 546-9726
NEWS RELEASE SUMMARY – December 13, 2019
SAN DIEGO – The Justice Department’s Office of Justice Programs today announced awards of more than $333 million to help communities affected by the opioid crisis, including $750,000 to Alpine-based Southern Indian Health Council, Inc. The grants are intended to help public safety and public health professionals combat substance abuse and respond effectively to overdoses.
OJP Principal Deputy Assistant Attorney General Katharine T. Sullivan made the announcement during a visit with local, state and federal officials in West Virginia, one of the states hardest hit by the epidemic.
“The opioid crisis has destroyed far too many lives and left too many Americans feeling helpless and hopeless,” said PDAAG Sullivan. “This epidemic—the most deadly in our nation’s history—is introducing new dangers and loading public health responsibilities onto the public safety duties of our law enforcement officers. The Department of Justice is here to support them during this unprecedented and extremely challenging time.”
With more than 130 people dying from opioid-related overdoses every day, the Department of Justice has made fighting addiction to opioids—including heroin and fentanyl—a national priority. The Trump Administration is providing critical funding for a wide range of activities—from preventive services and comprehensive treatment to recovery assistance, forensic science services and research—to help save lives and break the cycle of addiction and crime.
“This crisis demands all the attention and resources we can muster, and these grants will bolster our efforts significantly,” said U.S. Attorney Robert Brewer. “Opioids – and fentanyl in particular – are destroying lives and communities and we are working hard to stop the devastation through interdiction, prosecution and education.”
The awards announced today support an array of activities designed to reduce the harm inflicted by these dangerous drugs. Grants will help law enforcement officers, emergency responders and treatment professionals coordinate their response to overdoses. Funds will also provide services for children and youth affected by the crisis and will support the nationwide network of drug and treatment courts. Other awards will address prescription drug abuse, expand the capacity of forensic labs and support opioid-related research.
Information about the programs and awards announced today is available here. For more information about OJP awards, visit the OJP Awards Data webpage.
The Office of Justice Programs, directed by Principal Deputy Assistant Attorney General Katharine T. Sullivan, provides federal leadership, grants, training and technical assistance, and other resources to improve the nation’s capacity to prevent and reduce crime, assist victims and enhance the rule of law by strengthening the criminal and juvenile justice systems. More information about OJP and its components can be found at www.ojp.gov.
Local Nail Salon Owners Arrested and Charged with Forced Labor and Debt BondageRead the Press Release
Assistant U. S. Attorney Christopher P. Tenorio (619) 546-8413
NEWS RELEASE SUMMARY – December 12, 2019
SAN DIEGO – Cindy Mydung Luu and Jason Luu, siblings who own two Rancho Bernardo nail salons, were arraigned in federal court late today following their indictment by a federal grand jury on charges they were part of a forced labor conspiracy.
The brother and sister were arrested this morning at their home in Tierrasanta by members of the San Diego Human Trafficking Task Force. According to the indictment, they lured the victim – their second cousin - from Vietnam to San Diego to work long hours in their salons, Eden Nails Lounge & Spa (“Eden”) and Majestic Nail Salon (“Majestic).
The U.S. Department of Labor’s Wage and Hour Division also investigated the defendants’ nail salon for minimum wage and overtime violations, according to Wage and Hour District Director Rodolfo Cortez.
“We are very grateful that this matter came to the attention of the Human Trafficking Task Force upon the suggestion and support of two caring and vigilant nail salon customers who had befriended the victim,” said U.S. Attorney Robert Brewer. “With their assistance, Task Force officers were able to assist the victim immediately and to investigate these alleged crimes.”
“There’s never an excuse for coercing someone into forced labor,” said California Attorney General Xavier Becerra on behalf of the San Diego Human Trafficking Task Force. “We are all proud of the work done by our team and task force partners that led to this indictment.”
The indictment alleges the defendants recruited the victim to travel to San Diego from Vietnam in 2014 on a student visa. Beginning in September 2014, the victim was held at a home owned by the defendants and began working at Majestic. She worked at Majestic until February 2018, and then at Eden until June 2019.
Although the victim initially attended Grossmont College, she left in the spring of 2016 and was married to Jason Luu, her second-cousin, who petitioned for a visa for the victim as his spouse. Jason Luu is also charged with Visa Fraud for falsely swearing on the visa application in 2015 that the victim had lived with him as his spouse, and that she intended to continue living with him. As the indictment alleges, the victim was actually residing at a separate residence owned by the defendants.
To maintain the victim’s labor, the defendants allegedly engaged in a scheme intended to cause the victim to believe she would suffer financial and reputational harm if she did not continue working. The defendants are also charged with benefitting financially from their forced labor and peonage venture, which required that the victim’s work proceeds be used to pay outstanding debts, both imaginary and real.
The United States is also seeking the forfeiture of property used to facilitate the crimes, and property involved in the offense, plus at least $300,000.
The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
The defendants were arraigned on the indictment today before U.S. Magistrate Judge Karen S. Crawford. Bond was set at $30,000 secured by real property for each defendant.
They are scheduled to appear before U.S. District Court Judge Jeffrey T. Miller on January 17, 2020 at 11 a.m. for a motion hearing and trial setting.
DEFENDANTS Case Number 19CR4970-JM
Cindy Mydung Luu Age: 53 San Diego, CA
Jason Luu Age: 44 San Diego, CA
SUMMARY OF CHARGES
Forced Labor Conspiracy – Title 18, U.S.C., Section 1594
Maximum penalty: Twenty years in prison and $500,000 fine
Peonage – Title 18, U.S.C., Section 1581
Maximum penalty: Twenty years in prison and $500,000 fine
Forced Labor – Title 18, U.S.C., Section 1589
Maximum penalty: Twenty years in prison and $500,000 fine
Document Servitude – Title 18, U.S.C., Section 1592
Maximum penalty: Five years in prison and $500,000 fine
Benefitting Financially from Peonage – Title 18, U.S.C., Section 1593A
Maximum penalty: Twenty years in prison and $500,000 fine
Visa Fraud/False Swearing in Immigration Matter – Title 18, U.S.C., Section 1546(a)
Maximum penalty: Ten years in prison and $250,000 fine
AGENCIES
Homeland Security Investigations
Internal Revenue Service, Criminal Investigations
San Diego County Sheriff’s Department
U.S. Department of Labor, Wage and Hour Division
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 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 Neighborhoods, Human Trafficking, and Project Safe Childhood. The VCHT Section also provides federal prosecutors to the downtown San Diego Violent Crimes Task Force-Gang Group, the North County Gang Task Force, and the East County Gang Task Force.
Afghan Senator Convicted of Federal Welfare FraudRead the Press Release
NEWS RELEASE SUMMARY – December 11, 2019
SAN DIEGO – This morning, Ahmad Yusuf Nuristani pleaded guilty in federal court to Theft of Public Money, admitting that he received over $100,000 in government benefits by concealing foreign travel and residency between July 2015 and December 2018.
During a hearing before U.S. Magistrate Judge Karen S. Crawford, Nuristani admitted that he applied for Supplemental Security Income (SSI) from the Social Security Administration in July 2015. Nuristani acknowledged that he knew an SSI recipient must reside within the United States, and that he was required to report any travel outside of the United States lasting more than thirty days. Nuristani admitted to concealing and repeatedly lying to the Social Security Administration about his foreign travel and residency, and to receiving $27,492.44 in SSI payments and to causing a loss of $73,090.34 to the State of California for health care payments and services as a result of his fraud.
Nuristani, 71, is a former Fulbright Scholar and has been a prominent politician in Afghanistan for many decades. He has previously served as the governor of Herat province, and was the chairman of the Independent Election Commission of Afghanistan during their last presidential election. In September 2018, President Ashraf Ghani appointed Nuristani to the Meshrano Jirga, the upper body of parliament in Afghanistan. Nuristani served as both the head of Afghanistan’s Independent Election Commission and as an Afghan senator even as he received SSI at his claimed address in El Cajon, California.
This case was brought through the Travel and Residency Enforcement Co-Op (TREC), a pilot project of the Social Security Administration, its Office of Inspector General, the California Department of Health Care Services Investigations Division, and the United States Attorney’s Office for the Southern District of California. TREC is designed to detect and prevent misuse of the SSI program, a needs-based program administered by the Social Security Administration and designed to provide a floor of income for the aged, blind or disabled who have little or no income and resources. An individual approved to receive SSI automatically becomes eligible to receive Medi-Cal health benefits from the State of California. Since its formation in 2017, TREC has resulted in 25 federal convictions of individuals who fraudulently concealed foreign travel, foreign residency, and foreign financial resources from the Social Security Administration. To date, TREC has obtained over $2 million in court-ordered restitution to state and federal agencies, and has resulted in a savings of millions more.
Criminal investigators with the Special Inspector General for Afghanistan Reconstruction (SIGAR) also assisted with this investigation.
“I am proud of the work of this office, especially AUSA Jeffrey Hill, and our law enforcement partners for stopping this decades-long fraud, and ending the exploitation of government programs intended to help our country’s most vulnerable,” said United States Attorney Robert S. Brewer, Jr. “Those who abuse the trust of the taxpayer will be brought to justice.”
“Supplemental Security Income provides a lifeline for the elderly and disabled residing within the United States. The Social Security Administration’s Office of the Inspector General and its TREC partners vigorously investigate allegations of foreign travel and residency fraud, and prosecute those who steal from the American taxpayer. My office is pleased to see charges brought in this case, and appreciate that the U.S. Attorney’s Office shares our determination to protect the integrity of this vital income security program,” said Robb Stickley, Special Agent in Charge of the Inspector General’s Office of Investigations in San Francisco.
As a part of his plea agreement, Nuristani has agreed to make full restitution to the Social Security Administration and the California Department of Health Care Services. He faces up to 10 years in federal prison and a fine of up to $250,000 at his sentencing before the Hon. Cynthia A. Bashant on March 9, 2020.
DEFENDANT Case Number 19-cr-4967-BAS
Ahmad Yusuf Nuristani El Cajon, California.
SUMMARY OF CHARGES
Theft of Public Property – Title 18, U.S.C., Section 641
Maximum penalty: 10 years’ imprisonment, $250,000 fine, restitution
AGENCIES
Social Security Administration Office of Inspector General
California Department of Health Care Services Investigations Division
Special Inspector General for Afghanistan Reconstruction (SIGAR)
Senegalese National Sentenced to Federal Prison after Impersonating Deceased U.S. Citizen for 31 yearsRead the Press Release
Special Assistant U.S. Attorney Jeffrey D. Hill (619) 546-7924
NEWS RELEASE SUMMARY – December 9, 2019
SAN DIEGO – Almamy Baba Ly was sentenced in federal court this morning to 30 months in prison for misusing the identity of a deceased American citizen for 31 years in order to obtain identification documents and thousands of dollars in federal, state and local government benefits.
U.S. District Judge Anthony J. Battaglia also ordered Ly, 63, to pay restitution of $88,551 to the U.S. Department of Education and the County of San Diego. Ly will likely be deported at the conclusion of his prison sentence.
Ly pleaded guilty on September 12, 2019, admitting that he assumed the identity of Lyle Lindsey in 1988. Lindsey, a native San Diegan and the son of a military veteran, died in a tragic automobile accident as a toddler in 1957. Ly admitted that he actually was born in Senegal in 1955, that he lacked any legal status in the United States, and that in 1988 he used an altered copy of Lindsey’s birth certificate to apply for a Social Security number and a California Identification Card and Driver’s License. Ly thereafter committed many crimes, including drug sales and robbery, and went to prison under Lyle Lindsey’s identity on multiple occasions. Ly also admitted that he used Lindsey’s identity to apply for and receive federal student loans and Pell Grants, and CalFresh/Supplemental Nutrition Assistance Program benefits that he was not legally entitled to receive.
“I commend the work of Special Assistant U.S. Attorney Jeffrey Hill and our law enforcement partners in stopping this decades-long fraud and bringing to justice a man who exploited the identity of an American citizen,” said United States Attorney Robert Brewer. “This prison sentence sends a message to those who commit fraud and identity theft: There will be consequences, and your crimes will not go unpunished.”
On behalf of the United States Border Patrol, San Diego Deputy Chief Patrol Agent Aaron M. Heitke said: “I am proud of the hard work and tenacity that has led to the conviction and now sentencing of this man, who has broken U.S. laws for over 30 years.”
In July 2019, U.S. Border Patrol agents served a search warrant and arrested Ly at his residence in La Mesa, California. During the search, agents seized a recently-issued Senegalese national identification card that revealed Ly’s true name and date of birth. The arrest and search warrant were the culmination of a lengthy investigation by the Border Patrol, with the assistance of the California Department of Motor Vehicles, the Department of State, and the United States Embassy and Homeland Security Investigations in Dakar, Senegal.
DEFENDANT Case Number 19-cr-2864-AJB
Almamy Baba Ly La Mesa, California.
SUMMARY OF CHARGES
Unlawful Production of an Identification Document – Title 18, U.S.C., Section 1028(a)(1)
Theft of Public Property – Title 18, U.S.C., Section 641
AGENCIES
United States Border Patrol – Sector Intelligence Unit / Chula Vista Station
United States Homeland Security Investigations
California Department of Motor Vehicles Investigations Division
Bureau of Public Assistance Investigations, County of San Diego
Las Vegas Businessman Sentenced to Prison for Trafficking More Than $1 Million in Counterfeit ElectronicsRead the Press Release
Assistant U.S. Attorney Nicholas W. Pilchak (619) 546-9709
NEWS RELEASE SUMMARY – December 9, 2019
SAN DIEGO – A Las Vegas business owner was sentenced to prison today for running a years-long conspiracy to import counterfeit electronics from China into the United States.
Saad Ahmed was sentenced to six months in custody today by U.S. District Judge Thomas J. Whelan, based on Saad’s conviction for Conspiracy to Traffic in Counterfeit Goods.
Ahmed, 32, owns and operates PhonePartsUSA, a Las Vegas, Nevada-based company that sells cellular telephone parts and other electronics throughout the United States—including to customers in San Diego. In his plea agreement, Ahmed acknowledged conspiring with a variety of individuals in China to bring counterfeit cell phone parts and accessories from China to the United States. The conspiracy stretched back to at least September 2012.
PhonePartsUSA trafficked $1,499,999 worth of counterfeit goods during this period, per Ahmed’s plea agreement. The phony merchandise bore trademarks from Samsung, Apple and the electronic quality certification company UL, but the goods were actually inauthentic copies. Court filings relate that some of Ahmed’s customers had quality complaints about counterfeit parts purchased from his business.
Part of Ahmed’s scheme involved grossly undervaluing his international imports to deflect U.S. Customs’ attention from his shipments, according to court documents. Ahmed then directed his staff to destroy the false undervalued invoices when the shipments arrived at his warehouse.
Ahmed agreed to pay restitution to the three trademark holders in an amount totaling $269,681, which constituted the proceeds Ahmed’s business received from trafficking in the counterfeit merchandise. Ahmed also agreed not to contest the forfeiture of 4,453 cell phone parts and accessories seized from PhonePartsUSA as part of a search by Homeland Security Investigations in June 2018.
“Counterfeit merchandise is a threat to consumers, to legitimate producers, and to the entire economy,” said U.S. Attorney Robert Brewer. “The public is entitled to trust that a trademark means a product is authentic, and not that an unscrupulous merchant is trying to make a quick buck at their expense. Counterfeit goods are not easy money. They are a crime.”
“HSI takes great pride in getting justice for the victims of this counterfeit merchandise scheme, which preyed on unsuspecting customers,” said Francisco Burrola, Special Agent in Charge, Homeland Security Investigations (Nevada). “Counterfeiting and intellectual property rights violations are anything but victimless crimes—they harm legitimate businesses, consumers and governments.”
DEFENDANT Case Number 19-cr-3401-W
Saad Ahmed Las Vegas, NV Age: 32
SUMMARY OF CHARGES
Conspiracy to Traffic in Counterfeit Goods – Title 18, U.S.C., Sections 371 & 2320(a)
Maximum penalty: Five years in prison, $250,000 fine (or twice the pecuniary gain or loss), restitution and forfeiture.
AGENCIES
Homeland Security Investigations
U.S. Customs & Border Protection
Man Pleads Guilty to Interfering with a Japan Airlines Flight CrewRead the Press Release
Assistant U.S. Attorney Jaclyn Stahl (619) 546-8456
NEWS RELEASE SUMMARY – December 5, 2019
SAN DIEGO – Wei Sing Goh, a Malaysian citizen, pleaded guilty in federal court this week to interfering with an airplane flight crew.
According to admissions in his plea agreement, Goh boarded Japan Airlines Flight JL66 in Narita, Japan and landed at the San Diego International Airport on August 13, 2019 at 11:56 am. Approximately one hour into the flight, Goh began consuming alcohol and became agitated and unruly.
During the flight Goh left his seat several times, disturbing passengers and flight crew members. He also refused to comply with flight crew members’ instructions. Goh shouted racial slurs and curse words, made inappropriate sexualized comments to a female flight crew member, and inappropriately touched a female flight crew member. At one point, Goh threw his drink at the man sitting behind him and struck the man in the head with a crumpled cup. After Goh was given several verbal warnings and a final written warning pursuant to Japan Airlines’ policy, he struck a flight crew member while other flight crew members, with the assistance of three passengers, attempted to subdue Goh.
Goh’s behavior interfered with the flight crew’s performance of their duties in several ways, including reducing the ability of the flight crew to perform safety checks and disrupting the normal meal service of the flight. The pilot and co-pilots had to communicate with the Japan Airlines Operation Center to discuss whether to divert the aircraft, which impeded the normal landing procedures for the plane.
“Crimes aboard aircraft put everyone in danger,” said U.S. Attorney Robert Brewer. “We will do everything we can to prevent flight crew and travelers from becoming victims of physical violence, sexual assault, theft and other crimes that occur all too frequently at 35,000 feet. If you interfere with a flight crew, or commit a crime against a passenger, you are putting everyone at risk, and you are going to face consequences.”
“Safety on an airplane is important to all who fly,” said FBI SAC Scott Brunner. “A drunk, abusive passenger acting out against other passengers and the flight crew is not merely an inconvenience, but a serious threat to the safety of everyone on the flight. This sort of abusive and threatening behavior will not be tolerated and constitutes a federal crime that the FBI will investigate fully to protect the flying public. May this case serve as a warning to others.”
This case was investigated by the San Diego FBI Port of Entry Team and the U.S. Attorney's Office, with support from San Diego Harbor Police, the Department of Homeland Security, and U.S. Customs and Border Protection. Other agencies supporting the FBI Port of Entry Team include the Federal Aviation Administration, Transportation Security Administration, and San Diego Port Authority.
Goh is scheduled to be sentenced before U.S. District Judge Anthony J. Battaglia on March 2 at 9:00 am.
DEFENDANT Case No. 19-CR-3515-AJB
Wei Sing Goh Age: 20 Malaysia
SUMMARY OF CHARGES
Interference with flight crew members and attendants, in violation of 49 U.S.C. § 46504.
Maximum Penalty: Twenty years in prison; $250,000 fine.
INVESTIGATING AGENCIES
Federal Bureau of Investigation
Homeland Security Investigations
San Diego Harbor Police
Customs and Border Protection
Justice Department Announces More Than $376 Million in Awards to Promote Public SafetyRead the Press Release
Kelly Thornton (619) 546-9726 or [email protected]
NEWS RELEASE SUMMARY – December 3, 2019
SAN DIEGO – The Department of Justice announced today that it has awarded more than $376 million in grant funding to enhance state, local and tribal law enforcement operations and reinforce public safety efforts in jurisdictions across the United States, including $728,459 to support public safety activities in the Southern District of California. The awards were made by the Department’s Office of Justice Programs.
“Crime and violence hold families, friends and neighborhoods hostage, and they rip communities apart,” said OJP Principal Deputy Assistant Attorney General Katharine T. Sullivan. “These programs help restore the health and safety of crime-ravaged communities by supporting prevention activities, aiding in the apprehension and prosecution of perpetrators, facilitating appropriate sentencing and adjudication, and providing communities and their residents the means for recovery and healing.”
The awards support an array of crime-fighting initiatives, including the quarter-billion dollar Edward Byrne Justice Assistance Grants Program, which funds public safety efforts in 929 state, local and tribal jurisdictions. Funding also supports sex offender registration and notification, law enforcement-based victim services, the testing of sexual assault kits, and programs designed to address youth with sexual behavioral problems. Other awards will focus on wrongful convictions, intellectual property enforcement, innovative prosecution strategies and the safety and effectiveness of corrections systems.
“These funds will bolster our crime-fighting efforts in San Diego and Imperial counties,” said U.S. Attorney Robert Brewer of the Southern District of California. “The program supports a broad range of state and local criminal justice initiatives and reduces existing gaps in service that impact violent crime, crime victims, enforcement, prosecution, adjudication, detention, and rehabilitation.”
The following awards were made to organizations in the Southern District of California:
City of San Diego $473,241
City of La Mesa 12,953
City of Carlsbad 14,710
City of El Cajon 27,733
City of Oceanside 47,666
City of Escondido 38,882
City of El Centro 12,976
City of Vista 25,414
City of Chula Vista 51,742
City of Lemon Grove 11,032
County of Imperial 12,110
TOTAL $728,459
Information about the programs and awards announced today is available here. For more information about OJP awards, visit the OJP Awards Data webpage
The Office of Justice Programs, directed by Principal Deputy Assistant Attorney General Katharine T. Sullivan, provides federal leadership, grants, training and technical assistance, and other resources to improve the nation’s capacity to prevent and reduce crime, assist victims and enhance the rule of law by strengthening the criminal and juvenile justice systems. More information about OJP and its components can be found at www.ojp.gov.
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Disbarred Attorney Admitted He Embezzled Millions of Dollars from Charitable Trusts and Filed False Tax ReturnsRead the Press Release
Assistant U.S. Attorney Joseph J.M. Orabona (619) 546-7951
NEWS RELEASE SUMMARY – December 3, 2019
SAN DIEGO – Former trustee and disbarred attorney, Earl Nelson Feldman, pleaded guilty in federal court today, admitting that he used his position of trust to steal millions of dollars from several charitable trusts, which he spent on personal expenses rather than donating to charities. In executing his scheme to defraud, he covered his tracks by filing false tax returns with the Internal Revenue Service.
Feldman entered his guilty plea before U.S. Magistrate Judge William V. Gallo. Feldman pleaded guilty to wire fraud and filing false tax returns.
According to his plea agreement, Feldman was the trustee of several charitable trusts as early as 1996. He was also an attorney and Certified Public Accountant (CPA) licensed in the State of California. As early of January 2012 and continuing up to and including April 15, 2015, Feldman made more than $1.6 million in unauthorized wire transfers and withdrawals from the bank accounts of the charitable trusts under his control. To conceal his theft of trust funds, he filed false and fictitious tax returns with the IRS that inflated and falsely reported the amount of charitable gifts allegedly made by him as trustee of the charitable trusts. In lieu of making these authorized gifts, Feldman misappropriated trust assets for his own personal expenses, including but not limited to: paying his personal mortgages; paying taxes on properties he owned; making his personal federal and state tax payments; purchasing personal vehicles; paying contractors working on his personal residence; transferring funds from the charitable trust accounts to his personal brokerage account; and paying his personal credit cards.
In total, Feldman admitted he stole approximately $1,648,531.40 from the charitable trusts. Since his fraud was uncovered, Feldman has repaid approximately $1,547,444.16. As part of his plea agreement, Feldman agreed to repay the remaining balance of the restitution in the amount of $101,087.24 to over fifty individual charities. At the hearing, Feldman informed the court that he had written the check for the remaining amount of restitution and intended to deposit it today with the clerk of the court.
In addition to his embezzlement scheme, Feldman admitted in court that he also filed false tax returns. He failed to report the money he embezzled on his tax returns for tax years 2012 through 2014. Feldman admitted that he owes the IRS more than $575,000 in federal income taxes. At the hearing, Feldman informed the Court that he had written the check payable to the IRS for the total amount of taxes due, with interest, and that he intended to mail the check to the IRS today.
“As trustee and an attorney, Mr. Feldman had significant authority and control over the management of the charitable trusts’ assets,” said U.S. Attorney Robert Brewer. “Rather than faithfully exercise this important duty, Mr. Feldman embezzled millions of dollars for his own personal benefit and filed false tax returns to conceal his crime. As he admitted in court today, Mr. Feldman violated the law, the canons of his profession, and the important trust of his clients.”
“Mr. Feldman violated his fiduciary responsibilities and abused his position as trustee by stealing over $1.6 million from charitable trusts, spending the funds to benefit himself, and then filing false tax returns on behalf of the trusts to mislead the IRS and conceal his fraud,” said Ryan L. Korner, Special Agent in Charge of IRS Criminal Investigation. “Mr. Feldman’s greed victimized dozens of charities because the funds he stole were designated to be gifts to numerous other charitable organizations. As a Certified Public Accountant, Mr. Feldman knew better, and IRS Criminal Investigation will use our forensic accounting expertise to ensure he is held accountable.”
“Earl Feldman had a license to practice law and accounting, but instead used these licenses to steal from those who trusted him,” said FBI Special Agent in Charge Scott Brunner. “Feldman abused his position and defrauded clients of over $1.6 million dollars. Fraud, particularly committed by those who hold positions of trust, will be investigated and brought to justice by the FBI.”
Feldman is scheduled to be sentenced February 28, 2020 at 9:00 a.m. by U.S. District Judge Cathy A. Bencivengo. At the conclusion of today’s hearing, Feldman was released on bond.
DEFENDANT Criminal Case No. 19CR4892-CAB
Earl Nelson Feldman Age: 76
SUMMARY OF CHARGES:
Count 1 – Wire Fraud (18 U.S.C. § 1343)
Maximum Penalties: Twenty years in prison; $250,000 fine
Count 2 – Making a False Tax Return (26 U.S.C. § 7206(1))
Maximum Penalties: Three years in prison; $250,000 fine
INVESTIGATING AGENCIES
Federal Bureau of Investigation
Internal Revenue Service – Criminal Investigation
Congressman Duncan D. Hunter Pleads Guilty to Stealing Campaign FundsRead the Press Release
Assistant U.S. Attorneys Emily W. Allen (619) 546-9738, W. Mark Conover (619) 546-6763 and Phillip L.B. Halpern (619) 546-6964
NEWS RELEASE SUMMARY – December 3, 2019
SAN DIEGO – U.S. Representative Duncan D. Hunter pleaded guilty in federal court today to the major count in his indictment, admitting that he knowingly and willfully stole hundreds of thousands of dollars in campaign funds that he and his wife used to maintain their lifestyle.
According to the plea agreement, Hunter and his wife, Margaret, who pleaded guilty in June 2019, illegally converted more than $150,000 in campaign funds from 2010 through 2016 to purchase goods and services for their personal use and enjoyment, and engaged in 30 or more illegal transactions using campaign funds for personal use.
As detailed in the indictment, the Hunters stole money from the campaign for items as inconsequential as fast food, movie tickets and sneakers; as trivial as video games, Lego sets and Playdoh; as mundane as groceries, dog food, and utilities; and as self-indulgent as luxury hotels, overseas vacations and plane tickets for their family pet rabbits, Eggburt and Cadbury – all while their family was otherwise deeply in debt.
“Congressman Duncan D. Hunter violated the trust of his supporters by diverting hundreds of thousands of dollars they donated in good faith to his reelection campaign for personal expenditures,” said Assistant U.S. Attorney David Leshner. “This was not an accounting mistake by his campaign. This was a deliberate, years-long violation of the law. Congressman Hunter used the power of his position to fund a lifestyle out of his reach, unwittingly financed by those who put him there. His guilty plea entered today acknowledges and accepts responsibility for his conduct. Leshner praised prosecutors Phil Halpern, Emily Allen and Mark Conover as well as the Federal Bureau of Investigation for their tireless pursuit of justice in this case.
“Our campaign finance laws are designed to promote transparency in our electoral process by, among other things, prohibiting the diversion of campaign contributions for personal use,” said Scott Brunner, Special Agent in Charge of the San Diego Division of the FBI. “The FBI will fully investigate any person who blatantly disregards these laws and abuses the trust of constituents and contributors by turning campaign coffers into a personal slush fund. Today, the comprehensive FBI investigation resulted in Duncan Hunter pleading guilty to a conspiracy with his wife to convert hundreds of thousands of dollars in campaign funds for personal use.”
U.S. District Judge Thomas J. Whelan set Mr. Hunter’s sentencing for March 17, 2020 at 9:00 a.m.
“Congressman Hunter was indicted—and he pled guilty today—because of his own misconduct, and no one else’s,” said Assistant U.S. Attorney Emily Allen. “This is not a case about mismanagement, or sloppy accounting, or ‘mistakes.’ Duncan Hunter intentionally took money that did not belong to him and used it for his own benefit. For that, he has been held accountable, and we are pleased that today he has taken this first step toward taking responsibility for his crime.”
Assistant U.S. Attorney Phil Halpern said: “The foundation of our legal system is based upon the proposition that no one individual is above the law, regardless of the heights they've reached, how much they've contributed, or what office they occupy. Today's disposition ensures that the rule of law remains pre-eminent in this country and that Mr. Hunter both acknowledges and is held accountable for his role in stealing hundreds of thousands of dollars in campaign funds.”
As detailed in the indictment, beginning no later than 2010 and continuing up to and including at least 2016, Duncan and Margaret Hunter agreed to use campaign funds for their own personal benefit and enjoyment—and to spend freely from Hunter’s campaign donors’ funds. Many of the Hunters’ personal outings with family or friends (which as detailed in the indictment included trips to the Del Mar racetrack, dinners or drinks with friends, family and “couples” vacations, golf outings, and a weekend-long bachelor party) should not have been paid for with campaign funds. Among their improper spending, the Hunters paid $2,448.27 in campaign funds in August 2011 for a “couples” vacation in Las Vegas, Nevada, which Hunter concealed by falsely reporting to the campaign treasurer that the expenses were all “campaign related.”
Similarly, later that same month, knowing that their family bank account had a negative balance, the Hunters improperly used $113.73 in campaign funds to pay their half of the bill during another couples’ “date night” out with good friends at Jake’s Del Mar; improperly used $156.22 in campaign funds during a “couples” day at the Del Mar Racetrack; and improperly used $511.03 in campaign funds at the Hotel del Coronado to celebrate their child’s birthday. Hunter once again falsely told the campaign treasurer that all these charges were “campaign related.”
Previously, Hunter’s wife, Margaret, publicly acknowledged that these types of improper expenses went on for years and included spending as flagrant as: (1) $100.69 on November 16, 2013 at Casa De Pico in La Mesa to take their family and close friends out to dinner in relation to a sporting event featuring one of the Hunters’ children; (2) $1,489 on June 28, 2014 to treat their good friends to dinner at the Studio restaurant in the Montage Laguna Beach resort, and for room service, drinks, and meals the next day for the Hunters by themselves; (3) a family trip to Disneyland on September 26, 2015, which included $229.44 at Disneyland’s Star Trader shop for Minnie Mouse ear headbands and Star Wars-themed clothes for the Hunters’ children; and (4) $669.07 on March 27, 2016 at the Hotel del Coronado for a family Easter Sunday brunch in the Crown Room that the Hunters recognized was well outside their budget.
In her plea agreement, Margaret Hunter specifically acknowledged that she and Duncan Hunter used campaign funds to secretly make thousands of dollars in improper personal purchases (including family vacations, household goods and groceries, restaurants and bar tabs, a bachelor party, gas, fast food, retail shopping, cash withdrawals, a garage door, and personal Uber rides, among others) which they continued to disguise as campaign-related expenses.
The indictment also details how Hunter aided his malversation by repeatedly providing his wife with a campaign credit card despite the advice from his treasurer that he not do so. Similarly, Hunter – against the advice of his campaign staff and congressional office staff – installed Margaret as his paid campaign manager on two separate occasions with full knowledge that she was misappropriating campaign funds in order to finance their personal lifestyle. When discussing her appointment as the salaried campaign manager for the second time in 2014, Margaret observed that Hunter “need[ed] the extra money as much as I do[.]”
According to documents previously made public, the Hunters used campaign funds improperly on a number of family vacations, including:
- A July 2014 vacation to Washington, D.C. and a resort in Pennsylvania (which included personal items and activities such as purchasing cigarettes, $399 for zip lining for Hunter and two of his children, and $250 in airline travel charges for Eggburt);
- A February 2015 family trip to Minnesota, during which they improperly paid for personal family expenses including $250 in airline travel charges for Eggburt, and $132 in Uber rides to take the Hunter family to the Mall of America;
- A June/July 2015 family vacation to Hunter’s cousin’s wedding in Boise, Idaho, and a stopover in Las Vegas, in which the Hunters, among other things, spent $205.62 in campaign funds for personal items at the North Face store;
- A November 2015 family vacation to Italy, in which the Hunters improperly used more than $14,000 in campaign funds, which Hunter justified by attempting to set up a one-day tour of a U.S. Navy facility in Italy (which never occurred);
- Similarly, Hunter used more than $1,000 in campaign funds to take one of his girlfriends on a 2010 winter ski trip to the Hyatt Regency Lake Tahoe Resort, Spa and Casino.
The indictment also highlights how Hunter turned to campaign funds because his family’s finances were in constant disarray. During the course of the conspiracy, the Hunters overdrew their bank account more than 1,100 times in a seven-year period resulting in $37,761 in “overdraft” and “insufficient funds” bank fees. Their credit cards were frequently charged to the credit limit, often with five-figure balances, resulting in an additional $24,600 in finance charges, interest, and other fees related to late, over the limit, and returned payment fees.
According to the indictment and other publicly filed documents, Hunter and his wife both recognized that campaign funds were being spent on personal activities. For example, after returning home from their Boise and Las Vegas vacation, Duncan and Margaret Hunter discussed how the campaign card had been declined as the family had “racked up a $600 minibar…and more charges at Caesars…” as well as a $200 family breakfast, the “kids room service” and pool drinks, and gift shop purchases. And, despite falsely telling the campaign treasurer that the various charges related to their 2015 Italy vacation “were mostly military/defense meet related,” Margaret Hunter emailed a friend that “Italy was amazing. Truly our best family trip so far. Like that saying ‘if traveling was free you’d never see me again’!”
DEFENDANTS Case Number 18cr3677-W
Duncan D. Hunter Age: 42 Alpine, CA
Margaret E. Hunter Age: 44 La Mesa, CA
SUMMARY OF CHARGE
Conspiracy to Steal Campaign Funds – Title 18, U.S.C., Sec. 371
Maximum Penalty: Five years in prison and $250,000 fine
AGENCY
Federal Bureau of Investigation
- A July 2014 vacation to Washington, D.C. and a resort in Pennsylvania (which included personal items and activities such as purchasing cigarettes, $399 for zip lining for Hunter and two of his children, and $250 in airline travel charges for Eggburt);
Indictment Unsealed Charging Former San Diego Resident Jehad Serwan Mostafa with Providing Material Support to Militant Islamic Terrorist Organization Al-ShabaabRead the Press Release
Assistant U. S. Attorneys Shane Harrigan (619) 546-6981 and Caroline Han (619) 546-6968
NEWS RELEASE SUMMARY – December 2, 2019
SAN DIEGO – An indictment was unsealed in federal court today charging Jehad Serwan Mostafa, a 37-old U.S. citizen and former San Diego resident who is on the FBI’s Most Wanted Terrorist List, with terrorism violations arising from his critical role in providing support to the militant Islamic terrorist organization, al-Shabaab.
The superseding indictment alleges that from no later than March 2008 through in or about February 2017, Mostafa conspired to provide material support, including himself as personnel, to terrorists; conspired to provide material support to al-Shabaab, a designated foreign terrorist organization (FTO); and provided material support to al-Shabaab.
Mostafa, also known as “Ahmed Gurey,” “Ahmed,” “Anwar,” “Abu Anwar al Muhajir,” and “Abu Abdallah al Muhajir,” was originally charged in a three-count indictment in October 2009 with similar charges. The superseding indictment announced today expands the scope of the indictment alleging that Mostafa’s support of terrorist activities and al-Shabaab continued up to and including February 2017.
On March 20, 2013, the Department of State’s Reward for Justice Program offered a reward of up to $5 million dollars for information leading to the arrest and conviction of Mostafa. U.S. Attorney Robert Brewer said the United States unsealed the superseding indictment with hopes that Mostafa will be apprehended and brought to justice. “We believe this defendant is the highest-ranking U.S. citizen fighting overseas with a terrorist organization,” Brewer said. “Al-Shabaab’s reign of terror threatens U.S. national security, our international allies and innocent civilians. Today we seek the public’s assistance in capturing Mostafa and disrupting Al-Shabaab.”
Scott Brunner, the Special-Agent-In-Charge of the San Diego FBI, stated that Mostafa is currently believed to be in Somalia, and the FBI is seeking the assistance of the public, both in the United States and East Africa, in locating and apprehending Mostafa. SAC Brunner stated that the apprehension and prosecution of Mostafa will aid in disrupting al-Shabaab’s terrorist activities, which continue to threaten U.S. national security, our international allies, and innocent civilians, both U.S. and foreign citizens alike.
SAC Brunner stated that Mostafa was raised in the Serra Mesa area of San Diego and attended high school and college in San Diego. After graduating from college, in late 2005 at the age of 23, Mostafa departed San Diego, traveling first to Sana’a, Yemen, and then on to Somalia where he engaged in fighting against internationally supported Ethiopian forces. Mostafa eventually joined al-Shabaab, a terrorist group that the U.S. Department of State designated as a Foreign Terrorist Organization in 2008.
Al-Shabaab, meaning “The Youth” in Arabic, is a violent and brutal militia group that has used intimidation and violence to undermine the Somali government and the foreign military presence supporting it. The group seeks to control territory within Somalia in order to establish a society based on its rigid interpretation of Sharia law. In 2012, it pledged allegiance to the militant Islamist organization Al-Qaeda. Over time, al-Shabaab has engaged in external operations in neighboring countries in pursuit of global jihad. While its terrorist attacks have been concentrated in East Africa, it has claimed responsibility for attacks that resulted in injuries to Americans and/or had ties to San Diego: the 2010 Kampala, Uganda suicide bombing of a bar during a World Cup soccer match that killed a U.S. citizen working for a San Diego non-profit organization; and a 2013 attack on the Westgate shopping mall in Nairobi, Kenya that killed over 60 and injured U.S. citizens, including a graduate of Torrey Pines High School. Additionally, as recently as January 15, 2019, al-Shabaab executed a coordinated attack at the DusitD2 hotel in Nairobi, Kenya, where 16 innocent civilians were killed, including one U.S. citizen.
SAC Brunner stated that for over a decade, Mostafa has played a critical role in al-Shabaab, including in its media operations, training of soldiers, and participating in attacks on Somali government forces and African Union troops. Since 2009, Mostafa has held leadership positions with al-Shabaab, and today is believed to be the highest-ranking U.S. citizen fighting overseas with a terrorist organization. In 2011, Mostafa appeared at a press conference with an al-Shabaab leader, purporting to be an al-Qaeda emissary. SAC Brunner stated that the FBI assesses that this media stunt evidences his efforts to facilitate al-Shabaab’s relationship with other terrorist groups and role in external operations.
According to SAC Brunner, in 2019, the FBI became aware of Mostafa’s participation and leadership within al-Shabaab’s explosives department. Specifically, Mostafa has been implicated in the use of improvised explosive devices (IEDs) in attacks in Somalia and in improving their effectiveness as a tool of terror. Al-Shabaab has recently used IEDs against U.S. interests in Somalia. On September 30, 2019, al-Shabaab attacked the Baledogle U.S. military airbase in southern Somalia where U.S. soldiers are located to support Somali and African Union troops, and assaulted an Italian military convoy traveling in the Somali capital of Mogadishu. Al-Shabaab claimed responsibility for both attacks. Al-Shabaab is resolved to continue attacks on innocent civilians in Somalia and in the region, and has demonstrated it will go to great lengths to threaten the security of the United States and our partners.
SAC Brunner noted that the FBI believes Mostafa continues to play a critical role in planning operations directed against the Somali government and internationally supported African Union forces in Somalia and East Africa. As a result, Mostafa continues to pose a direct threat to U.S. forces, civilians and interests.
The public is reminded that a reward of up to $5 million dollars is being offered for information leading to the arrest and conviction of Mostafa. Anyone with information about Jehad Serwan Mostafa can report tips anonymously by phone at 1-800-CALL-FBI or online at “tips.fbi.gov” or can contact the nearest FBI office, American Embassy or Consulate.
DEFENDANT Criminal Case No. 09CR3726-WQH
Jehad Serwan Mostafa Age 37 Somalia (former resident of San Diego)
SUMMARY OF CHARGES
Conspiracy to Provide Material Support to Terrorists – Title 18, U.S.C., Section 2339A(a)
Maximum penalty: Fifteen years in prison and $250,000 fine
Conspiracy to Provide Material Support to a Foreign Terrorist Organization – Title 18, U.S.C., Section 2339B(a)(1)
Maximum penalty: Twenty years in prison and $250,000 fine
Providing Material Support to a Foreign Terrorist Organization – Title 18, U.S.C., Section 2339B(a)(1)
Maximum penalty: Twenty years in prison and $250,000 fine.
INVESTIGATING AGENCIES
San Diego Joint Terrorism Task Force
Federal Bureau of Investigation
Former Sheriff’s Captain Indicted for Gun Trafficking, Aiding Marijuana Distribution & Lying to Federal AgentsRead the Press Release
Assistant U. S. Attorneys Nicholas Pilchak (619) 546-9709 or Andrew Haden (619) 546-6961
NEWS RELEASE SUMMARY – November 22, 2019
SAN DIEGO – Former San Diego County Sheriff’s Captain Marco Garmo was arrested this morning based on a federal grand jury indictment that charges him with operating an illegal firearms trafficking business – sometimes from his office at the Rancho San Diego Station with the help of others, including a fellow Sheriff’s deputy.
The indictment also charges Sheriff’s Department Lieutenant Fred Magana, prominent San Diego jeweler Leo Hamel, firearms dealer Giovanni Tilotta and El Cajon resident Waiel Anton with aiding and abetting Garmo’s illegal firearms business.
In federal court this morning, Magana and Hamel entered guilty pleas before U.S. Magistrate Judge Bernard G. Skomal, admitting that they aided Garmo’s business by engineering and engaging in straw purchases of firearms, creating false records to conceal those purchases, and offering to promote Garmo’s weapons. Magana was granted a $25,000 bond; Hamel a $250,000 bond secured by a lien on a piece of property. They are scheduled to be sentenced February 21, 2020 at 8:30 a.m.
Anton was arrested early this morning and like Garmo is scheduled to be arraigned this afternoon at 2; Tilotta is currently at large.
According to the indictment, Garmo was a Sheriff’s deputy for almost 27 years until September 20, 2019, serving as the captain in charge of the Rancho San Diego Station until the February 13, 2019 search warrants executed as part of this investigation. The indictment alleges that Garmo was engaged in the unlawful acquisition, transfer, and sale of firearms during his entire tenure as the Captain of the Rancho San Diego Station.
Garmo is also accused of tipping off his cousin, who was a partner in an illegal marijuana dispensary, based on information Garmo had received of an impending warrant search of the cousin’s dispensary by Sheriff’s Deputies.
The indictment describes Garmo’s business of firearms dealing as undertaken for both financial profit and to cultivate future donors for his anticipated campaign for Sheriff of San Diego County. Most of Garmo’s firearms transactions involved the purchase and resale of “off roster” handguns, which designates guns that may be purchased by members of law enforcement but not members of the general public. While law enforcement officers are not prohibited from reselling “off roster” handguns in certain circumstances, Garmo received an explicit warning from the ATF that excessive resales for profit could violate federal law. Garmo acquired roughly 146 firearms between March 2013 and February 2019, per California’s firearms record database, and he sold or otherwise transferred 104 of them to others.
“This office will not tolerate public servants who abuse their positions of trust for personal gain,” said First Assistant U.S. Attorney Peter J. Mazza. “Law enforcement members who step outside of the law are subject to the same standards as everyone else in our community. No one deserves the fair application of the law more than all of the law-abiding men and women who wear the badge honorably to protect our communities.”
As part of his guilty plea, Leo Hamel, the owner of Leo Hamel Fine Jewelers, admitted to purchasing a variety of off roster handguns from Garmo, and engineered a series of “straw purchases” in which Garmo would falsely certify that he was acquiring an “off roster” gun for himself when in truth he was purchasing it for Hamel. Hamel further admitted that he acquired several firearms from Garmo without proper documentation through bogus, long-term firearm “loans” in exchange for money—which were sales in all but name. Hamel agreed in his plea to conducting straw purchases with Garmo and Lt. Fred Magana, and to planning with Garmo and Tilotta to construct a false paper trail to make it appear that the straw purchases were legitimate. As part of his guilty plea, Hamel has also agreed to forfeit over 200 firearms and 100,000 rounds of ammunition seized from him on February 13, 2019.
Tilotta, a Federal Firearms Licensee and the owner of Honey Badger Firearms, repeatedly facilitated Garmo’s straw purchase of firearms by accepting and submitting falsified firearms records, according to the indictment. The indictment further alleges that Tilotta sold and transferred firearms inside Garmo’s captain’s office at the Rancho San Diego Station, in violation of state and federal law.
Lt. Magana admitted in his plea agreement that he straw purchased a pair of off roster firearms for Leo Hamel at Garmo’s direction. Magana also admitted that he offered to advertise Garmo’s firearms to potential customers, but to keep Garmo’s name out of it until he found a buyer willing to close the deal.
Finally, according to the indictment, 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. In exchange, the indictment alleges that Anton received cash payments from his clients and then paid a kickback to Garmo for referrals. The benefit of Anton’s “consulting” arrangement was to secure early appointments for his clients to avoid the substantial backlog of CCW applicants—a benefit that Anton provided by leveraging his relationship with a member of the CCW processing staff to whom he had made an unlawful cash payment.
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 Anton had charged the undercover agent to fast-track his CCW appointment, and instead to lie and say that Anton was helping him with his application because they were friends.
Garmo is also charged with aiding and abetting the distribution of marijuana, and with using a telephone to further a drug crime. As the Captain of Rancho San Diego station, Garmo was responsible for policing unlicensed marijuana dispensaries operating in and around Spring Valley. One such dispensary was known as “Campo Greens.” The indictment alleges that Garmo provided an advance tip to the owners of Campo Greens—including Garmo’s cousin—when he was notified that it was scheduled to be searched within 24 hours. After receiving this tip, staff at Campo Greens emptied its shelves and removed its inventory and cash to avoid a law enforcement seizure.
According to the indictment, when Garmo was notified the following morning that the planned search had been cancelled, he again notified his family member. Campo Greens reopened later that day. Weeks later, when Campo Greens was posted with a cease-and-desist letter by San Diego County Code Compliance, Garmo again reached out to an acquaintance at the County. Asking about the scheduled enforcement action against Campo Greens, Garmo inquired “Can we push it back?” His acquaintance replied, “Yes, you can.”
Garmo lied to federal agents when interviewed about the tip-off, per the indictment, falsely claiming that he had never told a dispensary about an impending search warrant because he would never have put his deputies in harm’s way.
Mazza praised the lead prosecutors on the case, Assistant U.S. Attorneys Nicholas Pilchak and Andrew Haden, as well as the investigators from the ATF and FBI. Mazza 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 during its course.
“It is ATF’s duty and obligation to conduct criminal investigations whenever presented with credible evidence of violations of federal firearms laws,” said Bureau of Alcohol, Tobacco, Firearms and Explosives Los Angeles Field Division Special Agent in Charge Carlos A. Canino. “ATF’s mission is to focus our efforts on firearms traffickers and trigger pullers. We will continue to pursue individuals engaged in this type of firearms trafficking activity while working with our law enforcement partners and the U.S. Attorney’s Office to increase public safety.”
“Law enforcement officers, at any level, who abuse their positions and the sacred trust placed in them by the communities they serve by aiding the criminal element will ultimately be brought to justice,” said FBI Assistant Special Agent-In-Charge Todd Hemmen. “The FBI will continue to relentlessly work to detect, investigate, and prosecute those officers who place personal enrichment above their allegiance to the rule of law.”
If you – or anyone you know – has information about the whereabouts of firearms listed in the attached bulletin that are registered to Garmo but have not been recovered by law enforcement, please call ATF at 858-966-1010.
DEFENDANT Criminal Case No. 19-CR-4768-GPC
Morad Marco Garmo Age: 52 La Mesa. CA
Leo Joseph Hamel Age: 62 Jamul, CA
Giovanni Vincenzo Tilotta, Age: 38 El Cajon, CA
Fred Magana Age: 42 Chula Vista, CA
Waiel Yousif Anton Age: 35 El Cajon, CA
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
Title 18, U.S.C., Sec. 922(a)(6) – False Statement in the Acquisition of a Firearm
Maximum Penalty: Ten years in prison
Title 18, U.S.C., Sec. 924(a)(1)(A) – False Statement in the Acquisition of a Firearm
Maximum Penalty: Five years in prison
Title 18, U.S.C., Sec. 922(b)(2) – Conducting Firearms Transaction in Violation of State Law
Maximum Penalty: Five years in prison
Title 26, U.S.C., Sec. 5861(d) – Possession of Unregistered Firearm
Maximum Penalty: Ten years in prison
Title 18, U.S.C., Sec. 1001(a)(2) – False Statement
Maximum Penalty: Five years in prison
Title 18, U.S.C., Sec. 1512(b)(3) – Attempted Obstruction of Justice
Maximum Penalty: Twenty years in prison
Title 21, U.S.C., Sec. 841 – Possession of Marijuana with Intent to Distribute
Maximum Penalty: Twenty years in prison
Title 21, U.S.C., Sec. 843(b) – Use of a Communications Facility to Further a Drug Crime
Maximum Penalty: Four 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.
San Diego Real Estate Agent Arrested in Latvia and Extradited to Face Charges on $12 Million Fraud SchemeRead the Press Release
NEWS RELEASE SUMMARY – November 15, 2019
SAN DIEGO – Alexander Avergoon, a longtime San Diego real estate agent and businessman, was arraigned in federal court today following his extradition Thursday from Latvia to San Diego to face charges stemming from two investment fraud schemes in which he stole more than $12 million from unwitting investors.
Avergoon made his initial appearance today before U.S. Magistrate Judge Burkhardt. At the hearing, prosecutors moved to detain Avergoon based on his risk of flight. A detention hearing is scheduled for November 19 at 9:00 a.m. before U.S. Magistrate Judge Burkhardt.
Avergoon was indicted in August in the Southern District of California. He was located by Latvian law enforcement authorities and arrested in October. He was transferred to San Diego on Thursday.
The indictment, which was unsealed in October and provided to Latvian authorities, details Avergoon’s long-running schemes to defraud San Diego investors by pretending to use their money to buy and invest in real estate around San Diego County. Using his connections and reputation as a real estate agent, Avergoon scammed his clients and real estate investors by arranging fictitious real estate purchases and by selling them the rights to collect on fictitious loans.
From as early as 2010, Avergoon invited his victims to partner with him to purchase multi-unit apartment buildings or commercial office space, promising that the rental income would generate monthly dividends and that the investors would share in the appreciation when the properties were eventually sold. After collecting the money from investors, Avergoon told them he had purchased the buildings, and promised to service the rentals and distribute the rental income. In reality, Avergoon never actually bought these buildings; instead, he diverted the investors’ money to his own use. In order to sustain the illusion that the investment was legitimate, Avergoon made years’ worth of regular monthly payments to the investors, telling them the money came from rent payments.
In another scheme, the indictment charges that Avergoon offered additional victim investors the “opportunity” to earn approximately 8 to 20 percent interest on short-term loans to homeowners, and pretended to act as a broker between investors and homeowners. In reality, the homeowners were not working with Avergoon, did not agree to borrow money from the investors, and never signed the loan agreements Avergoon presented to his investor clients. Avergoon forged the loan documents—and the signatures on deeds of trust. He then simply diverted the investors’ money to his own use.
U.S. Attorney Robert Brewer praised the FBI and IRS for their important work bringing Avergoon to justice. “Criminals can run, but we will work with our law enforcement partners around the globe to make sure they are brought to justice. We are committed to protecting the public from con artists and identifying thieves who undermine our trust and financial well-being.”
“Through lies and manipulation, Avergoon devised an egregious scheme in order to steal from investors; a classic case of greed overcoming honest business practices,” said FBI Special Agent In Charge Scott Brunner. “Today’s extradition shows that criminals who commit crimes and run will be subject to the long arm of American justice.”
“Mr. Avergoon allegedly victimized unwitting investors out of millions by falsely promising to purchase income-generating residential and business rental properties,” said Ryan Korner, Special Agent in Charge of IRS Criminal Investigation. “Mr. Avergoon used an elaborate system of fraudulent trust deeds, forged signatures, fake IRS documents, and shell companies to orchestrate his scheme. Perpetrators like Mr. Avergoon work to destroy the public’s trust in real estate professionals and the safety of investing in our housing markets. The agents of IRS Criminal Investigation will work tirelessly with our law enforcement partners to pursue these criminals and hold them accountable wherever they run or hide.”
The U.S. Attorney’s Office wishes to thank the Office of International Affairs of the Justice Department’s Criminal Division and our Latvian law enforcement partners, including the State Police of Latvia, for their extraordinary work in securing Avergoon’s return to the United States to face charges.
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
DEFENDANTS Case Number 19CR02955-BAS
Alexander Avergoon Age: 43 San Diego, CA
SUMMARY OF CHARGES
Wire Fraud, in violation of 18 U.S.C. § 1343
Maximum penalty: Twenty years in prison per count, $250,000 fine
Aggravated Identity Theft, in violation of 18 U.S.C. § 1028A
Maximum Penalty: Mandatory term of imprisonment of two years, to be served consecutive to the sentence imposed for any underlying charge; fine of up to $250,000
Money Laundering, in violation of 18 U.S.C. § 1956(a)(1)(B)
Maximum penalty: Twenty years in prison per count, $500,000 fine
Money Laundering in Amounts Over $10,000, in violation of 18 U.S.C. § 1957
Maximum penalty: Ten years in prison per count, $250,000 fine
AGENCIES
Federal Bureau of Investigation
Internal Revenue Service
San Diego Contractor Pleads Guilty in $11 Million “Rent-A-Vet” SchemeRead the Press Release
Assistant U.S. Attorneys Rebecca Kanter (619) 546-7304 and Aaron Arnzen (619) 546-8384
NEWS RELEASE SUMMARY – November 15, 2019
SAN DIEGO, CA – Action Telecom, a Santee-based government contractor, pleaded guilty in federal court Thursday to fraud charges, admitting that the company illegally obtained $11 million in federal contracts that were supposed to be set aside for service-disabled veteran-owned businesses.
Action Telecom was indicted in April along with another company, A&D General Contracting, Inc., and its owner, Andrew Otero. Otero and A&D were convicted by a federal jury on fraud and conspiracy charges a year ago and were sentenced in June to 18 months custody and over $1.5 million in financial penalties.
Action Telecom, which is co-owned by Navy veteran Roger Ramsey and non-veteran Bruce Madden, admitted in its plea agreement to participating in a conspiracy to defraud the government by forming a joint venture with A&D – and falsely representing that Action and the joint venture qualified as service-disabled veteran-owned small businesses (SDVOSB). Based on the false claim to SDVOSB eligibility, the conspirators fraudulently obtained approximately $11 million in federal government construction contracts or task orders with the Department of Veterans Affairs and the Army Corps of Engineers.
The fraud conspiracy involved set-aside contracts that could only be bid upon by legitimate service-disabled veteran-owned small businesses – a designation that did not apply to Otero or A&D. To appear qualified, Ramsey, Madden and co-conspirator Otero initially executed an agreement to create the joint venture, which stated that Action Telecom would be the managing venturer, employ a project manager for each of the set-aside contracts, and receive the majority of the joint venture’s profits.
However, Otero, Ramsey and Madden signed a secret side agreement six months later that made clear the joint venture was ineligible under the SDVOSB program. For example, the side agreement said the parties created the venture so that A&D could simply “use the Disabled Veteran Status of Action Telecom” to bid on contracts. The side agreement also stated that A&D – not Action Telecom – would run the construction jobs. They also agreed that “A&D will keep 98 percent of every payment; Action Telecom will receive 2 percent of every payment.”
In addition to the secret side agreement, the joint venture did not operate as a legitimate SDVOSB, but was essentially controlled by Otero and A&D. For example, although Ramsey (a service-disabled veteran) nominally served as president of Action Telecom and the joint venture, he actually worked full-time as a vice president for another telecommunications company owned by Madden. Otero and A&D, not Ramsey, controlled the day-to-day management, daily operation and long-term decision making of the joint venture. Among other things, Otero and A&D appointed an A&D employee as the project manager for every contract and task order.
“Our nation strives to repay the debt of gratitude we owe to our veterans by setting aside some government contracts for veterans with service-related disabilities,” said U.S. Attorney Robert Brewer. “These unscrupulous contractors abused this program through a cynical and illegal ‘rent-a-vet’ scheme. Our office will continue to protect these programs and hold those who abuse them fully accountable.”
Acting SAC Rebeccalynn Staples, Veterans Affairs Office of Inspector General (VA OIG), stated, “Every day legitimate SDVOSB companies lawfully compete to obtain set aside government contracts. Unfortunately, some non-veteran owned companies misrepresent themselves as a SDVOSB and fraudulently obtain set side contracts. The VA OIG remains committed to aggressively pursuing these cases in an effort to maintain the sanctity of the program for all veterans.”
Action Telecom was ordered to appear before U.S. District Judge John Houston for sentencing on February 10, 2020 at 10 a.m.
CORPORATE DEFENDANTS
Action Telecom Inc., Santee, California
Criminal Case No. 17CR0879-JAH
SUMMARY OF CHARGE
False statement, in violation of 18 U.S.C. § 1001
Maximum penalty: Five years in prison
AGENCIES
Department of Veterans Affairs, Office of Inspector General
Owner of Local Technical Training School Pleads Guilty to Defrauding Department of Veterans Affairs of $29 Million in Education BenefitsRead the Press Release
Assistant U. S. Attorney Michelle L. Wasserman (619) 546-8431
NEWS RELEASE SUMMARY – November 13, 2019
SAN DIEGO – Nimesh Shah, owner of Blue Star Learning, a technical training school located in San Diego, pleaded guilty today to defrauding the Department of Veterans Affairs out of more than $29 million in Post-9/11 G.I. Bill benefits.
The Post-9/11 G.I. Bill provides veterans and other eligible individuals with assistance for education-related expenses such as tuition and housing. 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 expenses.
In order to receive and maintain approval to receive funds from the VA under the Post 9/11 G.I. Bill, Blue Star Learning was required to have at least 15% non-veterans for each course for which the VA was paying educational benefits under the Post-9/11 G.I. Bill, a rule called the “85/15 Rule.” Blue Star Learning was forbidden to engage in any erroneous or misleading advertising.
According to Shah’s plea agreement, from March 2016 to June 2019, he devised a scheme to defraud the VA with regards to Post 9/11 G.I. Bill benefits. Specifically, although Shah knew that close to 100 percent of students at Blue Star Learning were veterans receiving VA educational assistance, Shah 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. In order to deceive CSAAVE and the VA, Shah created, and directed at least three other employees at Blue Star Learning to create, fake student files for the purported non-veterans in each program. Shah additionally 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.
Blue Star Learning additionally had to provide vocational attainment data to CSAAVE on a yearly basis, as part of a required yearly approval process. According to Shah’s plea agreement, 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 fraudulent.
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 hired individuals to create the fraudulent email addresses for the Blue Star Learning students, and directed these individuals 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 voicemails on each cellular telephone so that it would appear that the fraudulent businesses were legitimate if CSAAVE called to check.
“These funds were meant to provide educational benefits to veterans who served our country, not line the pockets of unscrupulous opportunists,” said U.S. Attorney Robert Brewer. “This defendant crafted an elaborate scheme to fleece the government and taxpayers, but this case put a stop to this significant fraud.” Brewer thanked prosecutor Michelle Wasserman and federal agents for excellent work on this case.
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, the VA lost $29,350,999. Shah’s wife, Nidhi Shah, pleaded guilty at the same time to one count of False Statement, as a result of lies she told to agents at the time of her interview.
DEFENDANT Case Number 19CR4551-JAH; 19CR4550-JAH
Nimesh Shah Age: 36 San Diego, CA
Nidhi Shah Age: 34 San Diego, CA
SUMMARY OF CHARGES
Nimesh Shah: Wire Fraud – Title 18, U.S.C., Section 1343
Maximum penalty: Twenty years’ imprisonment and $250,000 fine
Nidhi Shah: False Statement – Title 18 U.S.C., Section 1001
Maximum penalty: Five years’ imprisonment, and $250,000 fine
AGENCY
Department of Veterans Affairs Office of Inspector General
Federal Bureau of Investigation
Fourteen Indicted in $6 Million Counterfeit iPhones Scheme; Biggest Fraud of its Kind in Southern DistrictRead the Press Release
SAN DIEGO – A federal grand jury indictment was unsealed today charging fourteen alleged members of an international criminal organization with dozens of fraud, conspiracy, identity theft and money laundering charges related to their multi-million-dollar counterfeit iPhone and iPad scheme.
During a coordinated takedown that began early this morning, investigators executed 11 search warrants - including at two businesses plus several homes and vehicles located in Mira Mesa and Mission Hills - and seized an estimated $250,000 in cash plus 90 iPhones which are being evaluated to determine authenticity. As of today at noon, 11 of 14 defendants are in federal custody. Three are fugitives, including Xiamon Zhong, who is believed to be in China; Charley Hsu of San Diego; and Hyo Weon Yang of San Francisco.
According to the indictment, the organization - led by three brothers - imported more than 10,000 counterfeit iPhones and iPads from China, exchanged them for the real thing at Apple stores throughout the United States and Canada, and then shipped the authentic devices back to China and other foreign countries to sell at a premium.
Apple conservatively estimates that the loss associated with the counterfeit items that were fraudulently exchanged at Apple Stores for genuine Apple productss exceeds $6.1 million.
“While a significant amount of money in any circumstance, this prosecution is about more than monetary losses,” said U.S. Attorney Robert Brewer. “The manufacture of counterfeit goods - and their use to defraud U.S. companies - seeks to fundamentally undermine the marketplace and harms innocent people whose identities were stolen in furtherance of these activities. The United States Attorney’s Office is fully committed to bringing to justice those who seek to damage American markets and consumers through the peddling of bogus products.”
FBI Special Agent in Charge Scott Brunner said: “This significant investigation and the indictment of these 14 individuals shows the FBI’s commitment to working with the United States Attorney’s Office and our law enforcement partners to combat international fraud schemes that affect American citizens and American businesses against counterfeit goods originating in China and those fraudsters who exploit American trademarked products for their personal financial gain.”
The Liao brothers – alleged ringleaders Zhiwei, Zhimin and Zhiting – were arrested by FBI agents this morning along with their wives. The brothers are naturalized U.S. citizens born in China. Other defendants include mostly U.S. citizens, mostly naturalized, from China, Vietnam and Russia.
According to the indictment, the Liao brothers directed other alleged conspirators to exchange counterfeit iPhones and iPads for genuine iPhones and iPads at Apple stores throughout the United States and Canada. Defendants intentionally damaged the counterfeit iPhones and iPads and fraudulently represented the counterfeit devices to be genuine Apple devices that were covered by an Apple warranty knowing that Apple would exchange damaged devices under warranty for new genuine Apple devices.
According to the indictment, all genuine Apple iPhones have an International Mobile Equipment Identity (IMEI) number, and a serial number, that are both unique numbers to each device. The counterfeit iPhones had IMEI and serial numbers that matched IMEI and serial numbers for genuine iPhones and iPads that were purchased and used by other persons and covered by an Apple warranty in the United States or Canada.
U.S. Attorney Brewer thanked lead prosecutor Tim Salel and agency partners, including the FBI, San Diego Police Department, U.S. Customs and Border Protection and Homeland Security Investigations, for their diligent pursuit of justice in this matter.
19CR4407-BAS IndictmentDEFENDANTS Case Number 19cr4407-BAS
Zhiwei Loop Liao Age: 31 San Diego, CA
(Naturalized U.S. citizen born in China)
Zhimin Liao Age: 33 San Diego, CA
(Naturalized U.S. citizen born in China)
Zhiting Liao Age: 30 San Diego, CA
(Naturalized U.S. citizen born in China)
*Xiamon Zhong Age: 33 China
(Chinese national residing in China)
Phillip Pak Age: 31 Richmond, CA
(U.S. citizen)
Dao Trieu La Age: 29 San Diego, CA
(Naturalized U.S. citizen born in Vietnam)
Mengmeng Zhang Age: 28 San Diego, CA
(Lawful permanent resident. Chinese national)
Tam Thi Minh Nguyen Age: 36 San Diego, CA
(Lawful permanent resident. Vietnamese national)
Deedee Zhu Age: 32 San Diego, CA
(Naturalized U.S. citizen born in China)
Danny Tran Chan Age: 29 San Diego, CA
(U.S. citizen)
*Charley Hsu Age: 39 San Diego, CA
(Chinese national)
Jiaye Jiang Age: 32 San Diego, CA
(Naturalized U.S. citizen born in China)
*Hyo Weon Yang Age: 31 San Francisco, CA
(Naturalized U.S. citizen born in Korea)
Dmitri Pigarov Age: 31 San Diego, CA
(Naturalized U.S. citizen born in Russia)
SUMMARY OF CHARGES
Title 18, U.S.C., Sec. 1349 – Conspiracy to Commit Mail Fraud and Wire Fraud
Maximum penalty: Twenty years in prison and a $12.2 million fine (twice the value of the gross loss to the victim, Apple, Inc.)
Title 18, U.S.C., Sec. 1343 - Wire Fraud;
Maximum penalty: Twenty years in prison and a $12.2 million fine (twice the value of the gross loss to the victim, Apple, Inc.)
Title 18, U.S.C., Sec. 1341 – Mail Fraud;
Maximum penalty: Twenty years in prison and a $12.2 million fine (twice the value of the gross loss to the victim, Apple, Inc.)
Title 18, U.S.C., Sec. 2320 – Conspiracy to Traffic in Counterfeit Goods;
Maximum penalty: Twenty years in prison and $500,000 fine
Title 18, U.S.C., Sec. 1028A – Aggravated Identity Theft;
Maximum penalty: Two years in prison (to run consecutively to any other term of imprisonment)
Title 18, U.S.C., Secs. 1956(a)(2)(A), and 1956(h) – Conspiracy To Launder Money;
Maximum penalty: Twenty years in prison and $500,000 fine
INVESTIGATING AGENCIES
FBI
San Diego Police Department
U.S. Customs and Border Protection
Homeland Security Investigations
San Diego County Sheriff’s 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.
Former Navy Warehouse Manager Pleads Guilty to Stealing over $2.5 Million in Goods from the U.S. NavyRead the Press Release
Assistant U. S. Attorney Michelle L. Wasserman (619) 546-8431
NEWS RELEASE SUMMARY – November 13, 2019
SAN DIEGO – Herbert Gutierrez, former warehouse manager at the U.S. Navy Military Sealift Command Warehouse in San Diego, pleaded guilty today to stealing more than $2.5 million worth of goods from the Navy warehouse where he worked at the time.
According to his plea agreement, Gutierrez stole the items over a nine-month period, from July 2018 to April 2019. He advertised items from the warehouse for sale online, including through such websites as eBay, and then allowed private individuals into the Military Sealift Command (MSC) warehouse yard during work hours and after hours to take the government property, load it onto trucks, and haul it away.
For example, in February 2019, Gutierrez allowed a utility truck and a tractor-trailer to enter the MSC warehouse after hours – and when they left, the vehicle contained over $1 million in stolen copper nickel tubing.
That same month, Gutierrez sold numerous Caterpillar parts from the warehouse to a company he found online. Once again, Gutierrez allowed a private freight company to enter the MSC warehouse yard and load the items, which filled four pallets. He also created fraudulent paperwork to conceal his criminal activity.
In April 2019, Gutierrez again allowed two individuals to enter the MSC warehouse in daylight, and he loaded up their vehicle with stolen government property, accepting thousands of dollars in cash in exchange. This time, however, the two men were – unbeknownst to Gutierrez – undercover agents.
“Our U.S. Navy warehouses are meant to support our service members at home and overseas, not to serve as a piggybank for unscrupulous individuals,” said U.S. Attorney Robert Brewer. “This was an audacious crime that was even more troubling because it was committed by an insider.” Brewer praised prosecutor Michelle Wasserman and NCIS agents for their dedication to this case.
Gutierrez was paid for the stolen goods in cash and via PayPal. Gutierrez admitted in his plea agreement that the total aggregate value of the items that he stole from the United States and resold for personal profit was $2,536,293.63.
DEFENDANT Case Number 19CR4552-W
Herbert Gutierrez Age: 54 San Diego, CA
SUMMARY OF CHARGES
Theft of Government Property – Title 18, U.S.C., Section 641
Maximum penalty: 10 years’ imprisonment and $250,000 fine
AGENCY
Naval Criminal Investigative Service
Attorney General Announces Launch of Project Guardian – A Nationwide Strategic Plan to Reduce Gun ViolenceRead the Press Release
Assistant U. S. Attorney Andrew Haden (619) 546-6961
NEWS RELEASE SUMMARY – November 13, 2019
SAN DIEGO – Attorney General William P. Barr today announced the launch of Project Guardian, a new initiative designed to reduce gun violence and enforce federal firearms laws across the country. Specifically, Project Guardian focuses on investigating, prosecuting, and preventing gun crimes.
Reducing gun violence and enforcing federal firearms laws have always been among the Department’s highest priorities. In order to develop a new and robust effort to promote and ensure public safety, the Department reviewed and adapted some of the successes of past strategies to curb gun violence. Project Guardian draws on the Department’s earlier achievements, such as the “Triggerlock” program, and it serves as a complementary effort to the success of Project Safe Neighborhoods (PSN). In addition, the initiative emphasizes the importance of using all modern technologies available to law enforcement to promote gun crime intelligence.
“Gun crime remains a pervasive problem in too many communities across America. Today, the Department of Justice is redoubling its commitment to tackling this issue through the launch of Project Guardian,” said Attorney General William P. Barr. “Building on the success of past programs like Triggerlock, Project Guardian will strengthen our efforts to reduce gun violence by allowing the federal government and our state and local partners to better target offenders who use guns in crimes and those who try to buy guns illegally.”
“Reducing gun violence and enforcing federal firearms laws are top priorities in this district,” said U.S. Attorney Robert Brewer. “Earlier this month, we announced a 49 percent increase in cases prosecuted under the Project Safe Neighborhoods program between fiscal years 2018 and 2019. The Project Guardian initiative gives us the framework to build upon that foundation and to broaden our impact against individuals who have acquired, possessed, or used a firearm in violation of federal law.”
“ATF has a long history of strong partnerships in the law enforcement community,” said Acting Director Regina Lombardo. “Make no mistake, the women and men of ATF remain steadfast to our core mission of getting crime guns off of our streets. ATF and U.S. Attorneys nationwide will leverage these partnerships even further through enhanced community outreach initiatives and coordination with local, state, and tribal law enforcement and prosecutors to cut the pipeline of crime guns from those violent individuals who seek to terrorize our communities. Project Guardian will enhance ATF’s Crime Gun Intelligence, to include identifying, investigating and prosecuting those involved in the straw purchases of firearms, lying on federal firearms transaction forms, and those subject to the mental health prohibition of possessing firearms.”
Project Guardian’s implementation is based on five principles:
- Coordinated Prosecution. Federal prosecutors and law enforcement will coordinate with state, local, and tribal law enforcement and prosecutors to consider potential federal prosecution for new cases involving a defendant who: a) was arrested in possession of a firearm; b) is believed to have used a firearm in committing a crime of violence or drug trafficking crime prosecutable in federal court; or c) is suspected of actively committing violent crime(s) in the community on behalf of a criminal organization.
- Enforcing the Background Check System. United States Attorneys, in consultation with the Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) in their district, will create new, or review existing, guidelines for intake and prosecution of federal cases involving false statements (including lie-and-try, lie-and-buy, and straw purchasers) made during the acquisition or attempted acquisition of firearms from Federal Firearms Licensees.
Particular emphasis is placed on individuals convicted of violent felonies or misdemeanor crimes of domestic violence, individuals subject to protective orders, and individuals who are fugitives where the underlying offense is a felony or misdemeanor crime of domestic violence; individuals suspected of involvement in criminal organizations or of providing firearms to criminal organizations; and individuals involved in repeat denials.
- Improved Information Sharing. On a regular basis, and as often as practicable given current technical limitations, ATF will provide to state law enforcement fusion centers a report listing individuals for whom the National Instant Criminal Background Check System (NICS) has issued denials, including the basis for the denial, so that state and local law enforcement can take appropriate steps under their laws.
- Coordinated Response to Mental Health Denials. Each United States Attorney will ensure that whenever there is federal case information regarding individuals who are prohibited from possessing a firearm under the mental health prohibition, such information continues to be entered timely and accurately into the United States Attorneys’ Offices’ case-management system for prompt submission to NICS. ATF should engage in additional outreach to state and local law enforcement on how to use this denial information to better assure public safety.
Additionally, United States Attorneys will consult with relevant district stakeholders to assess feasibility of adopting disruption of early engagement programs to address mental-health-prohibited individuals who attempt to acquire a firearm. United States Attorneys should consider, when appropriate, recommending court-ordered mental health treatment for any sentences issued to individuals prohibited based on mental health.
- Crime Gun Intelligence Coordination. Federal, state, local, and tribal prosecutors and law enforcement will work together to ensure effective use of the ATF’s Crime Gun Intelligence Centers (CGICs), and all related resources, to maximize the use of modern intelligence tools and technology. These tools can greatly enhance the speed and effectiveness in identifying trigger-pullers and finding their guns, but the success depends in large part on state, local, and tribal law enforcement partners sharing ballistic evidence and firearm recovery data with the ATF.
Federal law enforcement represents only about 15% of all law enforcement resources nationwide. Therefore, partnerships with state, local, and tribal law enforcement and the communities they serve are critical to addressing gun crime. The Department recognizes that sharing information with our state, local, and tribal law enforcement partners at every level will enhance public safety, and provide a greater depth of resources available to address gun crime on a national level.
For more information on Project Guardian, see the Attorney General’s memorandum at: https://www.justice.gov/ag/project-guardian-memo-2019/download.
- Coordinated Prosecution. Federal prosecutors and law enforcement will coordinate with state, local, and tribal law enforcement and prosecutors to consider potential federal prosecution for new cases involving a defendant who: a) was arrested in possession of a firearm; b) is believed to have used a firearm in committing a crime of violence or drug trafficking crime prosecutable in federal court; or c) is suspected of actively committing violent crime(s) in the community on behalf of a criminal organization.
San Diego Man Sentenced to Seven Years for Politically Motivated ArsonsRead the Press Release
Assistant U. S. Attorneys John Parmley (619) 546-7957 and Caroline Han (619) 546-6968
NEWS RELEASE SUMMARY – November 5, 2019
SAN DIEGO – Daniel Hector Mackinnon was sentenced in federal court today to seven years in prison for committing two politically-motivated arsons, including one that endangered the lives of children.
During today’s hearing, U.S. District Judge William Q. Hayes described Mackinnon’s conduct as “cold blooded and cowardly” and expressed concern that Mackinnon is a danger to the community. “In light of what you did, I think every day is warranted,” Judge Hayes told the defendant, referring to the length of the sentence.
According to the government’s sentencing memorandum, Mackinnon’s conviction covered two separate arsons, both occurring in the early morning hours of April 24, 2019. Investigators believe Mackinnon targeted the victims based on the nature of the business and/or their professional/political ties. Beginning early that morning, Mackinnon attempted to set fire to the La Jolla home of a prominent San Diego real estate developer. At the time of the arson, the home was occupied by two adults and three small children, all of whom were sleeping. The defendant poured an accelerant onto the door and ignited it, causing damage to the door. Investigators found remnants of a plastic water bottle, a pry bar and a bottle cap at the scene and were able to tie Mackinnon to the arson based on DNA recovered from the bottle cap.
Mackinnon’s second arson that morning occurred at the Kearny Mesa building of Raytheon, a defense contractor that does weapons systems work for the military at the facility. Based on surveillance video, Mackinnon first drove his car into Raytheon’s building. After his car bounced back, he exited his car and opened the vehicle’s back hatch. A short while later, fire shot out, engulfing the vehicle and causing damage to the building’s exterior. Surveillance video showed Mackinnon fleeing the scene after which he drove into Mexico. A multi-agency effort of federal, state and local partners worked to identify Mackinnon and he was arrested the same day as he attempted to re-enter the United States at the Otay Mesa Port of Entry.
As set forth in the government’s sentencing memorandum, Mackinnon has previously committed politically-motivated petty crimes in the early 2000s, including remaining at the scene of a riot after being arrested at a Southern Kalifornia Anarchist Alliance May Day demonstration and “keying” a media vehicle at an environment protest.
“Fire is a dangerous and indiscriminate weapon,” said U.S. Attorney Robert Brewer. “Mackinnon’s arsons not only caused damage to a business, but also endangered the lives of small children who were asleep in their homes. Because of the quick response and savvy investigative efforts of our federal, state and local law enforcement partners, Mackinnon was quickly apprehended and his crime spree was swiftly ended.” Brewer also thanked prosecutors Caroline Han and John Parmley for working hard to keep the public safe.
“This conviction and sentence sends an important message to those who use violence to express their discontent,” said FBI Special Agent in Charge Scott Brunner. “The FBI will identify and bring to justice arsonists and other violent actors who put the safety of San Diegans at risk.”
DEFENDANT Criminal Case No. 19CR1849-WQH
Daniel Hector Mackinnon Age 37 San Diego, CA
SUMMARY OF CHARGES
Malicious damage to building by means of fire, in violation of Title 18, U.S.C., Section 844(i).
Mandatory minimum penalty: Five years in prison
Maximum penalty: Twenty years in prison and $250,000 fine
INVESTIGATING AGENCIES
San Diego FBI - Joint Terrorism Task Force
San Diego Police Department
Metro Arson Strike Team
U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives
U.S. Customs and Border Protection
San Diego County District Attorney’s Office
U.S. Navy Commander and Lt. Commander Indicted in Connection with Insurance Fraud SchemeRead the Press Release
NEWS RELEASE SUMMARY – October 31, 2019
SAN DIEGO – A federal grand jury in San Diego returned a superseding indictment today that charges U. S. Navy servicemembers Dr. Michael Villarroel, Paul Craig, and Christopher Toups with fraud, false claims and conspiracy to defraud the United States. The charges arise from a scheme where the defendants filed fraudulent claims to obtain unearned benefits from the Traumatic Servicemembers Group Life Insurance Program (“TSGLI”).
According to the indictment, the TSGLI program is an insurance program that compensates servicemembers who suffer serious and debilitating injuries while on active duty. The program is funded by fees paid directly by individual service members and the Department of Defense. According to the superseding indictment, Dr. Michael Villarroel, a Commander in the U.S. Navy, was the medical doctor for the Explosive Ordinance Disposal Expeditionary Support Unit One (“EOD ESU One”) from March 2010 through May 2013. In that capacity, Dr. Villarroel knowingly signed off on false and fraudulent TSGLI applications on behalf of multiple servicemembers that were part of or connected to EOD ESU One. Both Christopher Toups, a former Chief Petty Officer Construction Mechanic, and Paul Craig, a former Lt. Commander in the U.S. Navy, filed fraudulent TSLGI applications. To support their applications, each defendant submitted fabricated applications that included forged signatures and altered hospital records. According to the superseding indictment, Craig fraudulently collected $150,000 and Toups collected at least $100,000.
In addition to Christopher Toups, four other individuals were previously indicted in connection with this scheme. Three of those individuals – Richard Cote, Earnest Thompson, and Kelene Meyer – have pleaded guilty to conspiracy to commit wire fraud, and as part of their plea, admitted that the conspirators defrauded the TSGLI program of nearly $2 million. According to the plea agreement, Meyer, a former nurse in the U.S. Navy, stated that Toups, Villarroel, and she received kickbacks for creating and filing the fraudulent TSGLI applications for other U.S. Navy servicemembers.
DEFENDANTS Case Number: 18CR1674
Dr. Michael Villarroel Age: 47 Coronado, California
Paul Craig Age: 46 Austin, Texas
Christopher Toups Age: 42 Woodstock, GA
SUMMARY OF CHARGES
Count 1: 18 U.S.C. § 1349, Conspiracy to Commit Wire Fraud; Maximum Penalty 20 years in prison, $250,000 fine, forfeiture and restitution.
Counts 2-4: 18 U.S.C. § 1343, Wire Fraud; Maximum Penalty 20 years in prison, $250,000 fine, forfeiture and restitution
Counts 5-7: 18 U.S.C. § 287, Making a False Claim; Maximum Penalty 5 years in prison, $250,000 fine
AGENCIES
Federal Bureau of Investigation
Naval Criminal Investigative Service
Veteran Affairs for the 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.
U.S. Attorney Announces Progress in Making our Communities Safer Through Project Safe NeighborhoodsRead the Press Release
NEWS RELEASE SUMMARY – October 31, 2019
SAN DIEGO – Two years ago, the Department of Justice announced the revitalization and enhancement of Project Safe Neighborhoods (PSN), the centerpiece of the department’s violent crime reduction strategy. PSN is an evidence-based program proven effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Throughout the past two years, the Department of Justice has partnered with all levels of law enforcement, local organizations, and members of the community to reduce violent crime and make our neighborhoods safer for everyone. According to FBI’s 2018 Crime in the United States Report released this month, the violent crime rate decreased for the second consecutive year, down 3.9 percent from the 2017 numbers.
“The revitalized Project Safe Neighborhoods program is a major success,” said Attorney General William P. Barr. “It packs a powerful punch by combining advanced data with local leadership, further reducing violence in communities across the country and improving overall public safety. U.S. Attorneys continue to focus their enforcement efforts against the most violent criminals and work in partnership with federal, state, local, and tribal police. The Justice Department’s relationships across the board have never been stronger.”
“Through Project Safe Neighborhoods, we are focused on the most dangerous criminals in our community – the ones with guns,” said U.S. Attorney Robert Brewer. “We’re making a real difference, but there is always more progress to be made. Our gun-related prosecutions are up nearly 54 percent this year, which means neighborhoods are safer as a result.”
As we celebrate the two-year anniversary of the revitalized PSN program, here are some of the highlights of our PSN actions over the past year in the Southern District of California (SDCA):
Enforcement Actions
The Project Safe Neighborhoods (PSN) program operates in the SDCA primarily as a collaboration between the U.S. Attorney’s Office and the San Diego County District Attorney’s Office. Using intelligence from both local and federal law enforcement, these two prosecutorial offices (the largest two in the region) work to determine which jurisdiction, state or federal, will be able to provide the most effective prosecution forum and ultimately the greatest impact for the community. In the past year, the PSN partnership has frequently caused the deployment of federal enforcement resources against violent offenders who might face a smaller sanction in state court. Special agents from the Bureau of Alcohol Tobacco Firearms and Explosives (ATF) or the FBI’s Violent Crime Task Force (VCTF) often lead these investigations.
- Between fiscal year 2018 and fiscal year 2019, cases designated and prosecuted by the United States Attorney’s Office under PSN rose almost 49 percent, from approximately 145 cases in 2018 to 214 cases in fiscal year 2019. Individual federal firearms prosecutions – a subset of the PSN program – rose almost 54 percent; from approximately 43 cases in 2018 to 66 cases in fiscal year 2019. Efforts to increase prosecutions for fiscal year 2020 are already underway. Among other initiatives, law enforcement is focusing on the prosecution of unlawful possession of firearms by people with domestic violence convictions and domestic violence restraining orders.
- The breadth of cases designated under PSN was also expanded between 2018 and 2019. Four recent examples highlight the diversity of the cases being brought for federal prosecution, all aimed at making SDCA safer:
- On October 17, 2019, Justin Alexander Roberts pleaded guilty in federal court for his role in a series of armed robberies throughout San Diego County. See U.S. v. Roberts, 19-CR-740-AJB. In his plea agreement, Roberts admits that he used a firearm to rob a series of local businesses (known to local media as the “Burgundy Bandit” robbery series). Under the terms of the agreement, Roberts faces a minimum of 21 years in prison. Roberts is scheduled to be sentenced on January 6, 2020.
- On August 5, 2019, Jose Hernandez, aka “Chapo,” a member of the Otay River Bottom Locos gang, was sentenced to 30 years in federal prison for his aggravated role in a drug distribution conspiracy as well as his participation in an attempted armed robbery ordered by the Mexican Mafia. See U.S. v. Hernandez, et al, 18-CR-3424-LAB; 18-CR-4217-LAB. More information about the Hernandez case can be found here.
- On June 17, 2019, Obediah Breer, an Escondido resident and member of the Hell’s Angels motorcycle gang, was sentenced to 12 years in prison for distributing methamphetamine and possessing a firearm. See U.S. v. Roberts, 18-CR-4624-LAB. After Breer was alleged to have brandished a firearm during a traffic encounter, state and federal prosecutors agreed that his case would be prosecuted federally. More information about the Breer case can be found here.
- Brandon Lockwood and Alex Woods were both sentenced to federal prison after pleading guilty to selling a stolen vehicle, selling methamphetamine, and trafficking firearms in Vista, California. See U.S. v. Lockwood, et. al., 18-CR-5575-AJB. The Lockwood case was one of three cases prosecuted federally as part of a 2018 undercover collaboration between ATF, the San Diego County Regional Auto Theft Task Force (RATT), and the San Diego County District Attorney. See also 19-CR-1097-JM; 19-CR-1210-GPC.
Community Partnerships
The U.S. Attorney’s Office (USAO) in the Southern District of California furthers PSN’s prevention mission by convening stakeholders, forging diverse partnerships, providing mentors, and using the following novel approaches to reduce violent crime:
- Because youth are often groomed and recruited by gangs before middle school, SDCA partnered with community groups as well as county health, local law enforcement and school officials to launch “Success Agents,” an innovative program that offers at-risk 4th graders at Porter Elementary mentors and wrap-around support from 4th through 8th grade. A USAO-led team meets weekly with Success Agents kids, providing interactive workshops to improve decision-making, foster relationships and academic achievement, and expand horizons.
- The SDCA USAO coordinates an eight-week Project Lead program in targeted elementary schools in neighborhoods particularly affected by gangs and violent crime. The team’s efforts significantly expanded youth education on decision-making and refusal skills, preparing more than 2,000 vulnerable fifth graders to make smart decisions when asked to join gangs, use drugs or alcohol, tag a building, or skip school. The program also builds strong relationships between students and state and federal law enforcement agents from many agencies, including the U.S. Attorney’s Office, U.S. Customs and Border Protection, the U.S. Secret Service, ATF, DEA, Homeland Security Investigations, IRS, City Attorney’s Office and U.S. Probation.
- The USAO participates in the city’s creative Community Assistance Support Team (CAST), a stakeholder group designed to curb gang violence by partnering police with former gang and community members. Members work together immediately after shootings to prevent retaliation and escalation. Through CAST, USAO personnel meet regularly with police officers, Deputy Sheriffs, community activists, local pastors and community leaders to review violent incidents, discuss resources and needs, share information, and solve problems.
Improvements to Community Safety
- For the second consecutive year, the estimated number of violent crimes in the nation decreased when compared with the previous year’s statistics, according to FBI figures released earlier this month. In 2018, the number of violent crimes was down 3.3 percent from the 2017 number.
- The 2018 statistics also show the estimated rate of violent crime was 368.9 offenses per 100,000 inhabitants. The violent crime rate fell 3.9 percent when compared with the 2017 rate.
- In February 2018, it was widely reported that San Diego had achieved its lowest crime rate in the past 49 years. On September 26, 2018, local news outlets reported that San Diego had the lowest violent crime rate of America’s biggest cities last year. In May 2019, SANDAG reported that the 2018 violent crime rate (3.41) for the San Diego region remained unchanged from 2017 and was the fourth lowest in the past 39 years. The same report also detailed that the number of robberies and aggravated assaults with a firearm were both down from 2017 to 2018.
These enforcement actions and partnerships are part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. The Department of Justice reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, 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. To learn more about Project Safe Neighborhoods, go to www.justice.gov/psn.
In the Southern District of California, the PSN program is led by the Violent Crime and Human Trafficking (VCHT) Section. 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 also oversees the Southern District of California Coordinators for Human Trafficking and Project Safe Childhood. The VCHT Section provides federal prosecutors to the downtown San Diego Violent Crimes Task Force-Gang Group, the North County Gang Task Force, and the East County Gang Task Force.
Attorney Pleads Guilty to Enticement and Coercion to Engage in ProstitutionRead the Press Release
Assistant U.S. Attorneys Jaclyn Stahl (619) 546-8456 and Fred Sheppard (619) 546-8237
NEWS RELEASE SUMMARY – October 29, 2019
SAN DIEGO – Local attorney William David Turley pleaded guilty in federal court today to enticing and coercing a female to engage in prostitution.
According to his plea agreement, on or about April 30, 2018, Turley began communicating with an adult female victim whom he met on the website sugardaddymeet.com. Turley and the victim discussed entering into a “mutually beneficial relationship,” meaning that Turley would provide the victim with financial support and the victim would provide companionship for and engage in sexual acts with Turley.
On or about May 3, 2018, Turley persuaded, induced, and enticed the victim to take a flight from a city in California to Las Vegas, Nevada to meet with him. Turley paid for the victim’s flight and other travel expenses. At the time the victim boarded the flight in California, she understood that she was traveling to Las Vegas to engage in sexual acts with Turley in exchange for monetary compensation. In Las Vegas, Turley provided the victim with between $1,500 and $1,800 in cash, and Turley and the victim engaged in sexual intercourse.
The plea agreement also states that on or about May 12, 2018, Turley began communicating with the minor female victim via sugardaddymeet.com. In conversations with the minor victim, they discussed that she was 18 years old. But he was aware that she was a high school student, that she could not meet on weekends because she was grounded, and that her parents had taken her cellphone away due to poor performance in school.
On or about May 15, 2018, the minor victim walked from her high school across the street to a library where Turley was waiting. Turley took the minor victim to a Boba tea shop nearby.
On or about May 16, 2018, Turley met the minor victim at the library after school and drove her to a store where Turley purchased the minor victim a cellphone. Turley then drove the minor victim a short distance, parked the car, and engaged in a sex act with the minor. The victim told Turley she wanted to stop and needed to get home. Turley gave the minor victim $300.
U.S. Attorney Robert Brewer praised the FBI, members of the San Diego Human Trafficking Task Force and prosecutors Jaclyn Stahl and Fred Sheppard for their important work. “We will do everything we can to protect victims of sex crimes and seek justice on their behalf,” Brewer said. “We are especially committed to keeping children out of harm’s way. Prosecuting sex trafficking cases is a top priority.”
“Human trafficking and sex crimes involving our children cannot be tolerated,” said FBI Special Agent in Charge Scott Brunner. “The FBI will continue to work tirelessly to reveal these horrible crimes and bring safety and closure for the victims and our communities.”
Turley is scheduled to be sentenced before U.S. District Judge Anthony J. Battaglia on March 2, 2020 at 9 a.m.
DEFENDANT Case No. 18-CR-4574-AJB
William David Turley Age: 61 San Diego, CA
SUMMARY OF CHARGES
Enticing and Coercing a Female to Engage in Prostitution, in violation of 18 U.S.C. § 2422(a).
Maximum Penalty: Twenty years in prison, $250,000 fine.
INVESTIGATING AGENCIES
Federal Bureau of Investigation
San Diego Human Trafficking Task Force
Eighth Member of International Money Laundering Organization Sentenced in $19 Million Dollar SchemeRead the Press Release
Assistant U. S. Attorneys Blanca Quintero and Daniel Silva (619) 546-7118
NEWS RELEASE SUMMARY – October 25, 2019
SAN DIEGO – Manuel Reynoso Garcia was sentenced today by U.S. District Judge William Q. Hayes to 78 months in prison for his role as a leader in an international money laundering organization that laundered more than $19 million in narcotics proceeds from the United States to Mexico.
The multi-year investigation led by the FBI’s Cross Border Violence Task Force targeted Reynoso as one of the key leaders of the Tijuana- and San Diego-based money laundering organization. Reynoso was the last of eight former members of the criminal organization sentenced.
Earlier this year, Judge Hayes sentenced Reynoso’s co-defendants to prison, including Estefania Plascencia Ponce to 57 months; Carlos Ballesteros Robles to 43 months; Gilberto Beltran Salazar to 46 months; Perla Alejandra Perez Guirado to 30 months; Joaquin Enrique Ramirez Calva to 37 months; Humberto Ruiz Bernadac to 24 months; and Luis Fernando Figueroa to time served. One final defendant, Manuel Alejandro Garcia remains a fugitive in Mexico.
According to the plea agreement and other public records, the money laundering organization was composed of a network of co-conspirators who coordinated the pick up, deposit, laundering, and transfer of millions of dollars of narcotics proceeds to Mexico-based drug trafficking organizations to include the Sinaloa Cartel. The organization used sophisticated methods to avoid law enforcement detection, such as encrypted messaging applications, and employed shell corporations complete with fictitious websites in an attempt to disguise their criminal activity as legitimate business.
The organization recruited individuals to serve as “funnel account holders” and transported them to bank branches in San Diego to open personal bank accounts. These funnel bank accounts were typically opened by the funnel account holders at Wells Fargo Bank or other domestic U.S. banks. The funnel account holders were primarily young adults between the ages of 18 and 23 who attended a university in Tijuana, Mexico.
Other members of the money laundering organization, known as “couriers”, travelled to San Diego, Los Angeles, Chicago, Boston, New Jersey, Philadelphia, Cincinnati, New York City and other cities throughout the United States to pick up and transport large amounts of bulk cash that ranged between $150,000 to $600,000 in narcotics proceeds. Couriers often met associates in private residences or public places such as parking lots, retail stores, and hotel rooms. The cash was typically concealed in shopping bags, duffel bags or shoeboxes.
Once in possession of the bulk cash, the couriers deposited the cash in increments of $30,000 to $45,000 into the funnel bank accounts controlled by the money laundering organization. The funds were then wire transferred from these United States-based funnel bank accounts to a series of Mexico-based shell companies also controlled by the money laundering organization. Once in Mexico, the funds were transferred to representatives of the Sinaloa Cartel.
During the case, federal agents employed extensive surveillance, undercover operations, witness interviews and bank records analysis to collect evidence against the organization. Key operations included the surveillance of members of the organization as they picked up drug proceeds in amounts as large as $200,000 in Cincinnati, Ohio; New York; and San Diego. The FBI also seized a large amount of bulk cash from defendant Joaquin Ramirez Calva in Chula Vista, California, and seized more drug proceeds following the surveillance of a bulk cash delivery to Reynoso in a McDonald’s parking lot in Bonita, California.
“By tracking and seizing drug money, we are hitting the cartels where it hurts,” said U.S. Attorney Robert Brewer. “Our aim is to prevent drug-related violence and overdoses, and denying the cartels the fruits of their illegal labor is an important part of our legal playbook. Thanks to prosecutors Blanca Quintero and Daniel Silva and our partners at FBI and IRS, we are impacting the operations of the Sinaloa Cartel on the way to our goal.”
“Drug trafficking and money laundering go hand-in-hand,” said FBI Special Agent in Charge Scott Brunner. “This case shows that stopping the flow of drug money to the cartels disrupts these dangerous criminal organizations. The FBI will use every investigative tool to keep illegal narcotics and dangerous crime from poisoning our communities.”
“Drug cartels misuse our financial institutions to launder their illicit proceeds, by using shell companies and exploiting young students to conceal their illegal activities. Reynoso was the co-leader of this money laundering organization. His guilty plea and subsequent sentence, in this multi-year investigation, demonstrates IRS Criminal Investigation's determination to identify and bring to justice those that would corrupt our banking system to launder illegal narcotics proceeds,” said Special Agent in Charge Ryan L. Korner of IRS Criminal Investigation.
This case is the result of ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership that brings together the combined expertise of federal, state and local law enforcement. The principal mission of the OCDETF program is to identify, disrupt, dismantle and prosecute high-level members of drug trafficking, weapons trafficking, and money laundering organizations and enterprises. This case is being prosecuted by Assistant U.S. Attorneys Blanca Quintero and Daniel Silva.
DEFENDANT Case Number 17-CR-2203-WQH
Manuel Reynoso Garcia Age: 64 Tijuana, Mexico
Estefania Plascencia Pone Age: 36 Tijuana, Mexico
Carlos Ballesteros Robles Age: 28 Tijuana, Mexico
Perla Alejandra Perez Guirado Age: 27 Tijuana, Mexico
Joaquin Enrique Ramirez Calva Age: 30 Tijuana, Mexico
Gilberto Beltran Salazar Age: 31 Tijuana, Mexico
Humberto Ruiz Bernadac Age: 27 Tijuana, Mexico
Luis Fernando Figueroa Age: 30 Tijuana, Mexico
SUMMARY OF CHARGES*
Money Laundering Conspiracy – Title 18, U.S.C., Section 1956(h)
Maximum penalty: 20 years’ imprisonment and $500,000 fine
AGENCIES
Federal Bureau of Investigation’s San Diego Cross Border Violence Task Force
IRS Criminal Investigations
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Canadian National Extradited to San Diego to Face Terrorism ChargesRead the Press Release
Assistant U. S. Attorneys Shane Harrigan (619) 546-6981 and Caroline Han (619) 546-6968
NEWS RELEASE SUMMARY – October 25, 2019
SAN DIEGO – Canadian national and former San Diego resident Abdullahi Ahmed Abdullahi made his initial appearance in federal court today following his extradition to the United States on charges that he conspired with others to provide material support to terrorists engaged in violent activities in Syria.
Abdullahi is charged in a two-count indictment with conspiring with several Canadian and U.S. citizens, including Douglas McCain (“Douglas”), the first known American who died fighting for the Islamic State of Iraq and al-Sham (ISIS) on or about August 25, 2014. Douglas resided in San Diego prior to departing the United States for Turkey, and eventually, Syria.
“Terrorist networks like ISIS cannot exist without supporters,” said U.S. Attorney Robert Brewer. “Protecting Americans from terrorists is our highest priority, and we will work hard to bring justice to those who provide material support to foreign terror organizations. I would like to thank the prosecutors, the FBI, our Joint Terrorism Task Force and our international law enforcement partners for all that they do to keep our communities safe.”
“Today’s announcement should serve as a warning to those who have traveled, attempted to travel, or support those fighting on behalf of ISIS. The FBI remains steadfast in ensuring they face justice," said FBI Special Agent in Charge Scott Brunner. “I commend San Diego's Joint Terrorism Task Force (JTTF) and our interagency and international partners for their committed work which resulted in Abdullahi returning to the United States to answer for the crimes he is accused of committing.”
The Abdullahi indictment alleges that from in or about August 2013 through in or about November 2014, Abdullahi conspired with Douglas and other individuals to provide personnel and money to individuals engaged in terrorist activities in Syria, including the killing, kidnapping and maiming of persons. Specifically, the indictment alleges that Abdullahi facilitated the travel of at least three Canadian nationals and two U.S. citizens to Syria to join and fight for ISIS, all of whom were subsequently reportedly killed fighting for ISIS.
As alleged in the indictment, in order to get money to fund travel to and fighting with terrorists in Syria, Abdullahi’s co-conspirators encouraged others to commit crimes against the “kuffar” (an Arabic term meaning infidels or non-believers), such as theft. In furtherance of this material support conspiracy, the indictment alleges that on January 9, 2014, prior to the travel of Douglas and a second American, Abdullahi committed an armed robbery of a jewelry store in Edmonton, Alberta, Canada, in order to finance the travel of Douglas and other members of the conspiracy to Syria. Thereafter, Abdullahi wired and caused others to wire money to other members of the conspiracy in the United States -- including approximately $3,100 to Douglas. The money paid for Douglas and the second individual to travel from the United States to Turkey. They later moved into Syria and engaged in terrorist activities, alongside other co-conspirators, including North Americans with whom Abdullahi maintained ties.
Additionally, members of the conspiracy, including Abdullahi, wired and caused money to be wired to third-party intermediaries in Gaziantep, Turkey (located approximately 40 miles from the Syrian border) for the purpose of supporting members of the conspiracy fighting and engaging in terrorist activity in Syria, including the killing, kidnapping, and maiming of persons.
On March 10, 2017, a federal grand jury in the Southern District of California returned a two-count sealed indictment charging Abdullahi with conspiring to provide, and providing, material support to terrorists. On September 15, 2017, pursuant to an extradition request by the United States, Canadian authorities arrested Abdullahi. Abdullahi was detained in Canadian custody without bail, pending extradition. Canadian authorities surrendered Abdullahi to the United States yesterday.
In a related case, Marchello Dsaun McCain, a convicted violent felon and the brother of Douglas, was sentenced in 2018 in federal court to 10 years in prison for his illegal possession of a cache of firearms and body armor and making false statements to federal agents involving international terrorism.
At today’s hearing, prosecutors moved to detain Abdullahi based on risk of flight and danger to the community. A detention hearing will be held on October 29 at 10:45 a.m. before U.S. Magistrate Karen S. Crawford.
The U.S. Attorney’s Office wishes to thank the Department of Justice’s Office of International Affairs and our Canadian law enforcement partners, including the Alberta Crown Prosecution Service, the Public Prosecution Service of Canada, and the Canada Crown Prosecutor’s Office, for their extraordinary work in the process of securing Abdullahi’s extradition and return to the United States to face charges.
DEFENDANT Criminal Case No. 17CR0622-W
Abdullahi Ahmed Abdullahi Age: 34 Edmonton, Alberta, Canada
SUMMARY OF CHARGES
Conspiracy to Provide Material Support to Terrorists – Title 18, U.S.C., Sections 2339A(a)
Maximum penalty: 15 years’ imprisonment and $250,000 fine
Providing Material Support to Terrorists – Title 18, U.S.C., Sections 2339A(a)
Maximum penalty: 15 years’ imprisonment and $250,000 fine.
INVESTIGATING AGENCIES
San Diego Joint Terrorism Task Force
Federal Bureau of Investigation
Federal Air Marshal Service
Department of Homeland Security, Homeland Security Investigations
Department of Homeland Security, U.S. Border Patrol