Southern District of California
Press releases recorded for this federal judicial district.
Former Supervisory U.S. Border Patrol Agent Sentenced Following Convictions for Civil Rights Abuses and Firearms OffensesRead the Press Release
Assistant U.S. Attorneys Colin McDonald (619) 546-9144 and Jennifer McCullough (619) 546-8773
NEWS RELEASE SUMMARY – September 18, 2018
SAN DIEGO – Former U.S. Supervisory Border Patrol Agent Martin Rene Duran was sentenced in federal court today to 24 months in custody for unlawfully depriving another of his civil rights under color of law and for firearms offenses.
On August 16, 2018, Duran pleaded guilty to two counts charging him with depriving an individual, R.C., of rights under color of law. For over two years, Duran unlawfully wielded the power of the United States government to target and harass R.C., an innocent father trying to protect his child from sexual abuse. Duran created multiple entries in U.S. government databases to harass R.C. Duran falsely accused R.C. of being an arms trafficker; he falsely claimed R.C. was making threats to law enforcement; he falsely claimed R.C. had bribed his way out of child sexual abuse charges in Mexico; he falsely caused law enforcement to detain and interrogate R.C. on several occasions; and he interrogated R.C. himself, threatening to take away R.C.’s legal permanent resident status in the United States. The false database entries created by Duran resulted in R.C. being detained at the San Ysidro Port of Entry on multiple occasions.
Duran’s targeting of R.C. began just days after R.C. filed allegations of child sexual abuse in Mexico against Duran’s brother-in-law, Raymond Estrada Figueroa (who has since been charged with child sexual abuse offenses in the Southern District of California). When confronted about his actions, Duran lied about his behavior. For instance, Duran denounced any motive for targeting R.C., claiming he had no knowledge about the allegations against Estrada. That was false: among other things, Duran hired Estrada’s attorney for the case, sent the attorney emails about Estrada, and even paid Estrada’s attorney for his services. Duran also claimed his false reports about R.C. were based on information he received from a “confidential source.” But that “confidential source” denied even knowing R.C.
Separately, on February 2, 2018, Duran was found guilty after a jury trial of seven counts of illegal transportation of firearms and one count of possession of a short-barreled rifle. Duran purchased seven firearms in Arizona in 2011, 2013 and 2014. Duran made these purchases using an Arizona driver’s license with an address where he never lived and claimed Arizona residency even though he resided in California. At the time of the execution of a federal search warrant in October 2015, Duran was in possession of multiple firearms that were illegal in California and one short-barreled rifle.
Today, for his crimes, U.S. District Judge Marilyn L. Huff sentenced Duran to a term of 24 months’ custody on the firearms offenses and a concurrent term of 12 months’ custody on the civil rights offenses.
“Martin Duran used his significant power as a Border Patrol official against someone he was sworn to protect,” said U.S. Attorney Adam Braverman. “He targeted a law-abiding citizen because of a personal vendetta, and for that he will go to prison.”
“Former Supervisory Border Patrol Agent Martin Duran selfishly tarnished the reputation and badge worn proudly by so many hard working and upstanding members of the law enforcement community,” said Jeffrey J. Gilgallon, Special Agent in Charge, ICE Office of Professional Responsibility. “He shamelessly turned his back on the citizens of the U.S. and used the powers of his office to serve his own personal needs. We are grateful to have the cooperation and support of our DHS federal partners in investigating officials who abuse the public trust.”
“It is ATF’s duty and obligation to conduct criminal investigations whenever presented with credible evidence of violations of federal firearms laws,” said ATF Los Angeles Field Division (LAFD) Special Agent in Charge Bill McMullan. “Duran, a law enforcement officer, introduced firearms into the criminal element instead of taking them away from the criminal element. Through his actions, public safety was jeopardized. ATF’s mission is to focus our efforts on firearms traffickers and trigger pullers and we will continue to pursue individuals engaged in this type of illegal activity.”
DEFENDANT
Martin Rene Duran Age: 49 Chula Vista, CA
SUMMARY OF CHARGES
Case Number: 15CR2818
Deprivation of Rights Under Color of Law, in violation of Title 18, U.S.C., Sec. 242
Maximum Penalties: 12 months’ custody, a fine of $100,000, one year of supervised release.
Case Number: 15CR2817
Title 18, United States Code, Section 922(a)(3) – Illegal Transportation of Firearms
Maximum Penalties: 5 years’ incarceration, a fine of $250,000, three years of supervised release.
Title 26, United States Code, Sections 5861 and 5871 – Possession of Unregistered Firearm: Maximum Penalties: 10 years’ incarceration, a fine of $250,000, three years of supervised release.
AGENCIES
Bureau of Alcohol, Tobacco, Firearms and Explosives
Immigration and Customs Enforcement – Office of Professional Responsibility
Department of Homeland Security – Office of Inspector General
U.S. Customs and Border Protection - Office of Professional Responsibility
Man Indicted for Stealing Almost $100,000 in Social Security Disability PaymentsRead the Press Release
Special Assistant U.S. Attorneys Jeffrey D. Hill (619) 546-7924 or Lisa J. Sanniti (619) 546-8811
NEWS RELEASE SUMMARY – September 17, 2018
SAN DIEGO – Andre Lorenzo Jackson, aka “Andre The Player Jackson,” was indicted by a federal grand jury on charges of stealing almost $100,000 in Social Security disability benefits by concealing his residency in Germany for almost a decade. An arrest warrant has been issued for Jackson, who authorities believe is still living in Germany.
In order to be eligible to receive Supplemental Security Income – a program designed to provide a floor of income for the aged, blind or disabled who have little or no income or resources – an individual must reside within the United States of America. As alleged in the ten-count indictment returned last week, Jackson started defrauding the Social Security Administration (SSA) in February 2005 by falsely claiming to reside in San Diego, California, and concealing his extensive foreign travel, in order to continue collecting Supplemental Security Income he started receiving in 1986. While collecting monthly Supplemental Security Income payments, Jackson traveled abroad extensively and promoted himself through social media as a professional athlete, entertainer, and musician.
According to the indictment, Jackson fraudulently represented to the SSA on numerous occasions that he continued to be eligible to receive these benefits. During the decade he fraudulently received benefits into a United States bank account, Jackson would withdraw the funds using ATMs or debit card transactions to pay for his personal expenses.
“Jackson is accused of stealing tens of thousands of dollars intended to help our country’s most vulnerable,” said United States Attorney Adam L. Braverman. “Individuals who abuse the trust and generosity of federal programs will be brought to account.”
“Supplemental Security Income provides a lifeline for the elderly and disabled located within the United States. Because foreign residency fraud takes resources from this vital program and steals directly from the American taxpayer, the Social Security Administration’s Office of the Inspector General vigorously investigates allegations of residency fraud. My office is pleased to see charges brought in this case, and grateful 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.
This case was investigated by the San Diego division of the Social Security Administration, Office of the Inspector General, and is being prosecuted by Special Assistant United States Attorneys Jeffrey Hill and Lisa Sanniti, both of the Social Security Administration’s Office of General Counsel.
DEFENDANT Case Number 18-cr-4055
Andre Lorenzo Jackson Age: 58 Billigheim, Germany
SUMMARY OF CHARGES
Wire Fraud – Title 18, U.S.C. Section 1343
Maximum penalties: 20 years’ custody; 3 years’ supervised release; $250,000 fine; restitution; forfeiture.
Theft of Public Property – Title 18, U.S.C., Section 641
Maximum penalties: 10 years’ custody; 3 years’ supervised release; $250,000 fine; restitution; forfeiture.
Investigating Agency
Social Security Administration, Office of the Inspector General
*The charges and allegations in an indictment or complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Father and Son Sentenced to Prison for Million-Dollar FraudRead the Press Release
Assistant U.S. Attorney Nicholas W. Pilchak and Andrew J. Galvin (619) 546-9709 and (619) 546-9721
NEWS RELEASE SUMMARY – September 17, 2018
SAN DIEGO – A father and son who fraudulently won over $4 million of federal contracts using false financial statements and other lies were sentenced to prison today and ordered to pay over $1 million in restitution. The father also admitted to stealing more than half a million dollars from his consulting clients, and then using some of the laundered money to close escrow on a Rancho Santa Fe mansion.
U.S. District Judge Roger T. Benitez sentenced Joseph Glenn Osborne, Sr., 68, to 57 months in prison for wire fraud and participating in a wire fraud conspiracy with his son and codefendant, Joseph Glenn Osborne, II, 31. Osborne, II was sentenced to 12 months for falsely making a writing to obtain money from the United States.
In handing down the sentence, Judge Benitez told the father it appeared he’d “made a life out of lying and cheating.”
In his plea agreement, Osborne, Sr. admitted that he stole $588,489 from three different small businesses that had hired him as a consultant for securing federal contracts. According to court documents and his own admissions, Osborne, Sr. promised to help the victims get contracts with the U.S. Department of Agriculture (USDA). Osborne, Sr. then misused his position as their agent to change banking information in an online government system, so when USDA paid on his clients’ contracts, Osborne, Sr. diverted the funds to his own accounts.
According to his plea agreement, Osborne, Sr. laundered some of the stolen money and used it to make a down payment on a $2.7 million mansion in Rancho Santa Fe, California. Osborne, Sr. then forged a pair of emails to conceal the source of the money by falsely claiming that it was an early retirement withdrawal from his government benefits account. In fact, according to court filings, Osborne, Sr. had no such account; the agency he impersonated did not actually exist; and he had simply altered an email from a real government employee.
In 2013, after Osborne, Sr.’s clients terminated him, the Osbornes agreed to submit fraudulent financial statements to qualify Osborne, II’s new business—Worldwide Connect LLC (WWC)—as an approved USDA contractor. As set out in their guilty pleas, the Osbornes recruited Osborne, II’s friend and bookkeeper to prepare false financial statements that substantially overstated WWC’s financial health. For example, the statements fraudulently converted WWC’s 2013 year-end cash position from a $5,546 shortfall to a $37,954 surplus.
The Osbornes also falsely certified that none of WWC’s principals was suspended or debarred from federal contracting. In fact, according to documents filed in the case, Osborne, Sr. was suspended and debarred from all federal contracting from November 2013 to October 2016, due to conduct at his prior business, Global Health & Safety.
As a result of its fraud, WWC was approved for federal contracting and won over $4 million of USDA food supply contracts. Four of the five contracts were terminated for contractor default, however, after WWC failed to deliver over 100,000 cases of fruit juice and raisins to community food banks and lunch programs. The Osbornes admitted that WWC caused its suppliers and financing company over $1.5 million in losses. Meanwhile, as set out in the plea agreements and court filings, the Osbornes paid themselves approximately $285,245 of WWC funds in little more than a year. They also used other company money for personal expenses—including almost $10,000 of nightclub charges and luxury hotel stays, and thousands more for escrow and renovating expenses for Osborne, Sr.’s new personal residence.
After their contracts were terminated, the Osbornes applied to the Small Business Administration (SBA) to be readmitted to federal contracting. As part of that application, Osborne, II misstated Osborne, Sr.’s military history, falsely claiming his father was a retired colonel in the Marine Corps. Osborne, II also supplied a variety of falsified tax returns to the SBA for himself and WWC, including an altered tax return that converted his real $14,870 tax liability into a fake $5,427 tax overpayment.
In addition to their prison terms, each defendant was ordered to pay restitution to their victims in the amounts of approximately $1.7 million for Osborne, Sr. and $1.5 million for Osborne, II.
“Government contracting depends upon the basic integrity and honesty of the people who seek to do business with the United States,” said U.S. Attorney Adam L. Braverman. “We will investigate and prosecute white collar criminals who think that they can manipulate the contracting system and enrich themselves through lies and deception.”
FBI Special Agent in Charge John Brown said, “The FBI and our partner at USDA-OIG uncovered repeated deceit, theft and fraud by the Osbornes. Today, the personal greed and self-promotion ended with a federal sentence of custodial time and $1.7 million ordered in restitution to the victims. The American taxpayers and their government funded programs deserve the dogged pursuit of justice exemplified by this case.”
Special Agent-in-Charge Lori Chan, United States Department of Agriculture (USDA), Office of Inspector General (OIG), Western Region, stated, “The USDA OIG has the responsibility for protecting the integrity of the Agriculture Marketing Service, Commodity Procurement Program. OIG conducts investigations in each region of the U.S. to deter and uncover criminal activity that undermines the Commodity Procurement Program. Contractors who engage in financial fraud exploit the public’s trust. The OIG at USDA works to ensure the integrity of USDA programs.”
This case was investigated by the U.S. Department of Agriculture, Office of Inspector General, and the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorneys Nicholas W. Pilchak and Andrew J. Galvin.
DEFENDANT Case Number 16CR2546-BEN
Joseph Glenn Osborne, Sr. Age: 68 Carlsbad, California
Joseph Glenn Osborne, II Age: 31 Carlsbad, California
SUMMARY OF CHARGES
Osborne, Sr.: Wire Fraud, in violation of Title 18 U.S.C. § 1343; term of custody including 20 years in prison, $250,000 fine, 3 years of supervised release, and mandatory restitution.
Osborne, Sr.: Wire Fraud Conspiracy, in violation of Title 18 U.S.C. § 1349; term of custody including 20 years in prison, $250,000 fine, and 3 years of supervised release, and mandatory restitution.
Osborne, II: Falsely Making a Writing to Obtain Money From the United States, in violation of Title 18 U.S.C. § 495; term of custody including 10 years in prison, $250,000 fine, 3 years of supervised release, and mandatory restitution.
AGENCIES
U.S. Department of Agriculture, Office of Inspector General
Federal Bureau of Investigation
Three Brothers Charged in Conspiracy to Distribute More than 20,000 Tablets of FentanylRead the Press Release
Assistant U. S. Attorney Orlando B. Gutierrez (619) 546-6958
NEWS RELEASE SUMMARY – September 14, 2018
SAN DIEGO – Jose Atalo Felix-Beltran, Arturo Felix-Beltran (U.S. citizens), and Osvaldo Felix-Beltran (U.S. resident) living in Indio, California, were arraigned in federal court today on charges that they conspired to distribute over 20,000 tablets of fentanyl. These three defendants are brothers who were arrested together on September 13, 2018, in El Centro, California,
According to a federal criminal complaint, these three brothers drove together to a restaurant located in El Centro, California, where they intended to sell 20,000 tablets of fentanyl to a purchaser who, unbeknownst to them, was an undercover Special Agent with the Drug Enforcement Administration. Two of the brothers attempted to flee the scene, but were apprehended following a brief foot chase. The third brother was not able to flee and, following a brief period of forcible resistance, was ultimately taken into custody.
This arrest followed a series of prior transactions where the brothers, together and at times alone, sold undercover DEA agents additional tablets of fentanyl.
At the brothers’ initial appearance in El Centro today before U.S. Magistrate Judge Ruth Bermudez Montenegro, the United States requested detention based on risk of flight. Judge Bermudez Montenegro scheduled a detention hearing for September 21, 2018 at 1:30 p.m. and a preliminary hearing for September 27, 2018 at 1:30 PM.
The fentanyl tablets that were to be sold to undercover agents on September 13, 2018 (depicted below), were tablets of fentanyl manufactured to look like 30mg tablets of oxycodone. The combined weight of the tablets seized from the three brothers on September 13, 2018, was approximately 2.23 kilograms of fentanyl (Schedule II). The retail street value of these fentanyl tablets is estimated to be $600,000.
“This is a significant seizure and I’m very happy that thousands of deadly pills will not make it to the streets,” said U.S. Attorney Adam Braverman. “But we are seizing fentanyl at an alarming rate. Despite our relentless efforts to interdict this dangerous drug and educate the community, people are still risking their lives. The next pill you take could very well be your last. Don’t do it.”
“We are at a cross road - We can either continue to let the drug cartels destroy American lives with deadly pills or we can commit to raising the intensity of our war against foreign criminals who profit from destroying American lives,” said DEA Special Agent in Charge Karen Flowers. “Drugs are deadly and fentanyl has changed the game. We are no longer dependent on the coca or the poppy plant. We can create chemicals to mimic whatever affect we desire. Our drugs are not Non-GMO certified. They are all engineered in a laboratory. They are cheap, easy to get and manufacture. That line of coke, no longer is just cocaine. That hit of smack is hyped up with fentanyl. Crystal is not in your dining room, it is in your arm. They are all potentially laced with a profit-induced additive called fentanyl. No one is strong enough to win that battle. It wins, you die.”
DEFENDANTS Case Number 18MJ10424
Jose Atalo Felix-Beltran, Age: 27 Indio, CA
Arturo Felix-Beltran Age: 30 Indio, CA
Osvaldo Felix-Beltran Age: 19 Indio, CA
SUMMARY OF CHARGES
Conspiracy to Distribute Controlled Substances (Felony) – Title 21 U.S.C. § 841 and 846
Maximum penalty: Life imprisonment and $10,000,000.00 fine.
AGENCIES
Drug Enforcement Administration; (Imperial County and Riverside);
Imperial County Sheriff’s Office;
United States Border Patrol;
Imperial County Probation Department;
El Centro Police Department;
United States Customs and Border Protection;
Homeland Security Investigations;
Drug Enforcement Administration - San Diego Air-wing; and
United States Attorney’s Office
Imperial County District Attorney’s Office
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
This case is the result of ongoing efforts by the Organized Crime Drug Enforcement Task Force (“OCDETF”), a partnership that brings together the combined expertise and unique abilities of federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, dismantle and prosecute high-level members of drug trafficking, weapons trafficking and money laundering organizations and enterprises.
Suspected Meth Trafficker Arrested with Huge Haul of Drugs in CarRead the Press Release
Assistant U. S. Attorney Michael Wheat (619) 546-8437
SAN DIEGO – Marisol Chavez-Morales was arrested and charged this week with methamphetamine trafficking in connection with the seizure of 156 pounds, one of the largest in recent history in the Southern District of California.
According to a complaint, a confidential source for the Drug Enforcement Administration identified the defendant as a methamphetamine trafficker who had “offered to sell large amounts of methamphetamine and heroin” to the source. At the direction of the agent, the source negotiated with Chavez, who agreed to provide 130 kilograms of meth, 6 kilograms of black tar heroin and 11 kilograms of “China White” heroin for $775,000. They agreed to meet at a San Diego restaurant on September 7, 2018, to exchange the drugs for money.
According to the complaint, DEA agents established surveillance at the restaurant and observed a silver Chevrolet Cruze enter in the parking lot and park next to the source’s vehicle. The driver of the Chevrolet Cruze was later identified as Chavez. Agents approached the vehicle and Chavez and discovered approximately 71.5 kilograms of methamphetamine in the trunk and the back seat. The methamphetamine was separated into different packaging and concealed within both a large tire located in the back seat and a large suitcase and small bag located in the trunk. Additionally, agents found multiple vacuum-sealed brick packages containing suspected heroin contained within several boxes located in the back seat of the Chevrolet Cruze. Chavez was arrested.
During a hearing yesterday, the defendant declined to seek bond. The next court date is scheduled for September 25.
Methamphetamine seized in Chavez’s car on Sept. 7.
DEFENDANTS Case Number 18MJ04833
Marisol Chavez-Morales Age: 34 Highland , CA
SUMMARY OF CHARGES
Possession with Intent to Distribute Methamphetamine – Title 21, U.S.C., Section 841(a)(1)
Maximum penalty: Mandatory minimum 10 years, up to life imprisonment and $10 million fine.
AGENCY
U.S. Drug Enforcement Administration
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Postal Annex Owner Sentenced for Structuring Currency TransactionsRead the Press Release
NEWS RELEASE SUMMARY – September 7, 2018
SAN DIEGO – Lahkwinder Singh was sentenced in federal court today to 36 months in federal prison and a forfeiture of $1,955,521 to the United States for structuring approximately $2,955,521 in currency transactions with domestic financial institutions. The 36-month sentence is one of the longest imposed in the Southern District of California for a structuring conviction. Singh’s closely held corporation, Lovely Singh, Inc., was ordered to forfeit $1,000,000, and serve a 5-year term of probation.
Singh and Lovely Singh, Inc., owned and operated Postal Annex franchises in Lemon Grove, California. Singh also acted as the Chief Financial Officer of Lovely Singh, Inc. In 2006, Singh began operating the Postal Annexes as an agent of Western Union, which required that he operate under a federal license as a money transmitting business, and required that the Postal Annexes maintain a comprehensive Bank Secrecy Act/Anti-Money Laundering (“BSA/AML”) program to ensure that the Postal Annexes were vigilant in preventing unlawful funds from passing through Western Union, and the financial system at large. Singh was the designated BSA/AML Officer responsible for ensuring the Postal Annexes complied with all US financial and banking laws.
Instead of protecting the financial system, by no later than 2011, Singh engaged in a multi-year pattern of cash transactions below the $10,000 threshold to avoid detection by banks and law enforcement, with the intent to deposit Lovely Singh, Inc.’s cash proceeds free from scrutiny.
As Singh and Lovely Singh, Inc. admitted in each of their plea agreements, Singh and his co-defendant distributed Schedule II controlled substances from the Postal Annexes to persons located throughout the United States. Couriers smuggled controlled substances into the United States from Mexico, and delivered them to the Postal Annexes. Over the course of 2011 through 2016 Singh admitted that he was aware of a high probability that hundreds of packages sent from the Postal Annexes contained a prohibited controlled substance, and he deliberately avoided learning the truth of their contents.
As he further admitted in his plea agreement, Singh structured and attempted to structure $2,955,521 of currency transactions over the course of 469 cash deposits at several domestic financial institutions such as Bank of America, N.A. and Wells Fargo Bank, N.A. Singh conducted multiple deposits of less than $10,000 in cash on the same day, and over the course of several business days, into at least 19 different bank accounts with the purpose of avoiding a Currency Transaction Report, which is the report a financial institution must file for cash deposits exceeding $10,000 during any banking day.
The structured cash deposits included cash received in return for shipping the controlled substances from the Postal Annexes stores, as well as Western Union money transfer funds.
At sentencing, Judge Bashant stated that, with his millions of dollars in structured deposits, Singh “knew exactly what he was doing” – namely “avoiding detection from the government … for shipping drugs” out of the Postal Annex. The sentence imposed, as Judge Bashant stated, serves as a “very important deterrent” to third-party money launderers who are the gateway to the financial system, who like Singh, are engaged in playing a “shell game” of transactions.
This case was a joint investigation with IRS-Criminal Investigation, HSI, DEA, U.S. Postal Inspection Service and California DOJ.
“The U.S. mail is not a delivery service for drug traffickers, and our banking system is not meant to launder millions of dollars of drug money,” said U.S. Attorney Adam Braverman. “Together with our law enforcement partners we have put a stop to this brazen scheme and kept our institutions from being exploited by criminals.”
Postal Inspector in Charge Nichole Cooper stated, “Postal Inspectors and our law enforcement partners will vigorously investigate, arrest, and prosecute anyone who willfully allows the introduction of a controlled substance into the U.S. Mail. Today’s sentencing sends a strong message to drug traffickers that Postal Inspectors stand ready to protect the sanctity of the mail.”
“In this investigation, HSI and our law enforcement partners uncovered a sophisticated financial scheme aimed at providing cover for cash transactions that were tied to the illicit distribution of controlled substances in cities throughout the United States,” said Dave Shaw, HSI Special Agent in Charge in San Diego. “HSI continues to remind the community of the serious public health threat, as well as warn individuals who put consumers at risk for their own financial gain. We are committed to working closely with all of our law enforcement partners, both domestic and abroad, to prevent counterfeit drugs from being smuggled into the U.S. and distributed illegally over the internet.”
“Lahkwinder Singh thought he had the perfect scam going when he started using his postal annex to hide money earned by drug traffickers from the IRS," said Special Agent in Charge R. Damon Rowe, IRS Criminal Investigation Los Angeles Field Office. "Thanks to the hard work of IRS CI special agents and their law enforcement partners, Singh is now paying the price for his scheme and drug traffickers have lost another venue to launder their ill-gotten gains.”
“Mr. Singh utilized a legitimate mail delivery business to distribute prescription drugs, including fentanyl and Oxycontin, throughout the United States in order to avoid detection by law enforcement,” said DEA Special Agent in Charge Karen Flowers. “Mr. Singh’s actions directly contributed to the devastation of our American communities caused by the opioid epidemic. DEA will continue to investigate those seeking to profit from the illegal distribution of drugs and destruction of our communities.”
“Trafficking pharmaceutical drugs and illegally selling them without a prescription is dangerous and will not be tolerated,” said Attorney General Becerra. “Let this sentence send a message: if you attempt to unlawfully manipulate our financial system and fuel prescription drug abuse for a quick buck, federal and state law enforcement will hold you accountable."
DEFENDANTS Case Number 16cr729-BAS
Lahkwinder Singh Age: 59 Scripps Ranch, CA
Lovely Singh, Inc. California Corporation
SUMMARY OF CHARGES
Structuring Currency Transactions with One or More Financial Institutions – Title 31, U.S.C., Sections 5324(a)(3), (d)(2).
Maximum penalty for Singh: Ten years in prison, $500,000 fine, forfeiture of all property, real or personal, involved in the offense and any property traceable thereto, and a term of supervised release of up to three years.
Maximum penalty for Lovely Singh, Inc.: $1 million fine, forfeiture of all property, real or personal, involved in the offense and any property traceable thereto, and a term of probation of up to five years.
AGENCIES
Internal Revenue Service
Homeland Security Investigations
Drug Enforcement Administration
U.S. Postal Inspection Service
California Department of Justice
Two Charged for Drug Lab ExplosionRead the Press Release
Assistant U.S. Attorneys Kyle B. Martin and Matthew J. Sutton (619) 546-7726 and (619) 546-8941
NEWS RELEASE SUMMARY – September 5, 2018
SAN DIEGO – Two defendants, Gregory Amos and Christopher Hernandez, were charged this week in connection with a March 2018 explosion and fire resulting from their operation of a butane hash oil lab in a residential Vista neighborhood. Amos and Hernandez are scheduled to be arraigned before U.S. Magistrate Judge Jan M. Adler on Friday, September 7 at 2:00 p.m.
According to the complaint, in the morning hours of March 27, 2018, an explosion and fire on the balcony of a residence located on Barbara Drive in Vista shattered the glass door of the balcony and blasted dozens of cans of butane into the surrounding area. In the wake of the explosion, investigators discovered an active Butane Hash Oil (BHO) lab in the residence where the fire originated. After extinguishing the fire and securing the scene, investigators located a number of items related to a BHO manufacturing laboratory, including kilograms of marijuana, hundreds of cans of butane, glass tubes and other manufacturing items. Agents also seized approximately one pound of cocaine and three firearms including a Del-Ton DT-15 5.56 mm rifle and a Smith and Wesson 9 mm semi-auto pistol.
BHO labs are highly dangerous facilities used to extract tetrahydrocannabinol (THC), a Schedule I controlled substance found in marijuana plants, through the use of butane. The manufacture of BHO is a violation of federal law, Title 21, U.S. Code, Section 841. The manufacture of BHO is also a violation of California state law, Health and Safety Code, Section 11379.6. Since January 2018, law enforcement has responded to at least 17 illicit BHO labs in San Diego County (three of which had fires and or explosions).
BHO is similar in appearance to honey or butter. It contains extremely high levels of THC and can be up to four times more potent than high-grade marijuana. BHO is commonly manufactured by packing marijuana into a glass, plastic, or metal tube. Butane is then sprayed into the top of the tube. The butane strips the marijuana of its cannabinoid-containing oils, which drip from the bottom of the tube, often through a filter and into a holding container. The end product is highly-profitable and can be ingested as an oil, consumed in edibles, or solidified to make concentrated forms of cannabis known as “wax.”
During the manufacture of BHO, butane, a flammable gas that is odorless, colorless, and heavier than air, can evaporate out of the substance and collect on the floor, accumulating to explosive levels without proper ventilation. This process creates an invisible, but very real, risk of fires, explosions, and chemical burns.
“BHO manufacturing poses an enormous threat to human life,” said U.S. Attorney Adam L. Braverman. “No one is safe: not those involved in the illegal BHO manufacturing themselves; not those who happen to be living or visiting nearby; not first responders. Together with our law enforcement partners, we will aggressively prosecute all who threaten public safety by manufacturing these deadly substances.”
“Drugs are dangerous. End of story. Nothing would have exploded if someone did not want to dab high potency THC,” said Special Agent in Charge Karen Flowers. “You have a choice. Your choice has a consequence. Those consequences apply to those around you. Just ask their neighbors.”
This case is the result of ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership that brings together the combined expertise and unique abilities of federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, dismantle and prosecute high-level members of drug trafficking, weapons trafficking and money laundering organizations and enterprises.
The government’s case is being prosecuted by Assistant U.S. Attorneys Kyle B. Martin and Matthew J. Sutton.
DEFENDANTS Case Number: 18MJ4780-JMA
Gregory Allen Amos, Age: 23 Vista, California
Christopher Paul Hernandez Age: 34 San Diego, California
SUMMARY OF CHARGES
Conspiracy to Distribute Hashish Oil - 21 U.S.C. §§ 841(a)(1) and 846
Maximum penalty: 5 years’ imprisonment and $250,000 fine
Endangering Human Life While Illegally Manufacturing Hashish Oil - 21 U.S.C. § 858
Maximum penalty: 10 years’ imprisonment and $250,000 fine
Possession of Cocaine with Intent to Distribute - 21, U.S.C., § 841(a)(1);
Maximum penalty: 20 years’ imprisonment and $1,000,000 fine
Possession of Firearm in Furtherance of Drug Trafficking Crime -18 U.S.C. § 924(c)
Mandatory 5 years’ imprisonment consecutive to drug trafficking sentence
AGENCIES
Drug Enforcement Administration
San Diego Sheriff’s Department
San Diego Police Department
Vista Fire Department
Department of Justice, Organized Crime Drug Enforcement Task Forces
*An indictment or complaint is not evidence that the defendants committed the crimes charged. The defendants are presumed innocent until the Government meets its burden in court of proving guilt beyond a reasonable doubt.
Oceanside Man Admits to Stealing Benefits Intended for Widow of Military VeteranRead the Press Release
Special Assistant U.S. Attorney Jeffrey D. Hill (619) 546-7924 and Assistant U.S. Attorney Matthew C. Brehm (619) 546-7951
NEWS RELEASE SUMMARY – September 5, 2018
SAN DIEGO – Michael Vanden Brink pleaded guilty today to stealing thousands of dollars in benefits intended for the widow of a military veteran. During his plea before U.S. Magistrate Judge Jan M. Adler this morning, Brink admitted that after the widow’s death in 2004, he converted her benefits paid out by the Department of Veteran’s Affairs to his own use.
Brink, 57, acknowledged that H.C.C., the spouse of a deceased veteran, began to receive Dependency and Indemnity Compensation benefits in 1972. Sometime prior to March 2004, H.C.C. began to receive those benefits via direct deposit into a bank account in both her name and Brink’s.
Brink acknowledged that H.C.C. died on June 30, 2004, at her home in Oceanside, California, and that he was aware of her death and that her benefits should have ceased immediately upon her death. Brink further acknowledged that he knew that he was not entitled to H.C.C.’s benefits, and that he knew that the money rightfully belonged to the United States.
As a part of his plea, Brink admitted that he received a monthly bank statement for the account, and that he never informed the bank that H.C.C.’s monthly benefits should cease. Instead, Brink admitted that from July 1, 2004 until February 26, 2014, only he had access to and control of all funds in the bank account, and that during that time he converted a total of $145,035 in United States’ money to his own use.
“For almost a decade, this defendant stole thousands of dollars intended to help the families of our brave men and women in uniform,” said United States Attorney Adam L. Braverman. “This prosecution demonstrates the commitment of the United States Attorney’s Office to protecting the integrity of programs for our veterans and their families.”
“This investigation demonstrates the OIG’s commitment to aggressively pursue individuals who defraud VA programs. The VA OIG will continue to identify criminal activity in order to protect the integrity of VA programs.” said Special Agent in Charge A.E. Pleasant, U.S. Department of Veterans Affairs, Office of Inspector General, Criminal Investigations Division, Western Field Office.
As a part of his plea agreement, Brink agreed to pay $145,035 in restitution to the Department of Veteran’s Affairs. Brink faces up to 10 years in federal prison and a fine of up to $390,060 at his sentencing hearing before U.S. District Judge John A. Houston on December 10, 2018.
DEFENDANT Case Number 18-cr-3894
Michael Vanden Brink Oceanside, CA.
SUMMARY OF CHARGES
Theft of Public Property – Title 18, U.S.C., Section 641
Maximum penalty: 10 years’ imprisonment, $390,060 fine, restitution
AGENCIES
U.S. Department of Veteran’s Affairs, Office of Inspector General – Criminal Investigations Division
Two Members of the Westside Crips Criminal Street Gang Plead Guilty to Racketeering Conspiracy Relating to Sex Trafficking, Drug Trafficking, and Other Violent CrimesRead the Press Release
NEWS RELEASE SUMMARY – August 31, 2018
SAN DIEGO – Two gang members of the Westside Crips pleaded guilty today for their participation in a racketeering conspiracy involving sex trafficking, narcotics trafficking, and other violent crimes as well as possession of a controlled substance with the intent to distribute.
Corey DeShawn Austin (aka “Westwood”) and Travion McHenry (aka “Too Much”) admitted their respective membership and association with the Westside Crips, who primarily operated in Oceanside and elsewhere. Sentencing for Austin is scheduled for December 14, 2018. McHenry is scheduled to be sentenced on October 19, 2018.
In furtherance of the RICO conspiracy, Austin, the lead defendant, admitted he engaged in promoting prostitution of adult females between 2013 and 2015, including while he was in state custody for another offense. Austin further admitted he possessed narcotics for sale in 2013 with co-defendant McHenry and posted photos of himself throwing up gang signs and wearing gang colors showing his allegiance to Westside Crips on social media between 2013-2016.
To further his role in the RICO conspiracy, McHenry admitted he committed a 2012 home invasion robbery with two other coconspirators during which the victims were robbed at gunpoint. He also admitted he possessed narcotics for sale in 2013 with co-defendant Austin and posted photos of himself throwing up gang signs and wearing gang colors showing his allegiance to Westside Crips on social media between 2012-2014.
“Gang members, their associates and those who assist them will not be permitted to exploit members of our community for their own personal gain and notoriety by promoting sex trafficking, narcotics trafficking, and violent crime,” said U.S. Attorney Adam L. Braverman.
“One of the top priorities for the DEA in San Diego is dismantling violent street gangs that profit by selling drugs in our community. The profit, cold hard cash, in turn fuels the violence on our streets,” said Special Agent in Charge Karen Flowers. “DEA will continue to target and put away violent street gang members like Mr. Austin and Mr. McHenry because it makes San Diego County a safer place to live.”
“For over a decade, this sophisticated street gang terrorized the streets of Oceanside and the surrounding areas for profit,” said IRS Criminal Investigation’s Special Agent in Charge R. Damon Rowe. “Our agency plays a unique role in federal law enforcement’s resolve to dismantle criminal gang enterprises. Our agents target the profit and financial gains of these violent organizations, following the money in an effort to disrupt these organizations and bring their members to justice.”
“The Oceanside Police Department would like to thank the US Attorney's Office and other law enforcement agencies for their collaboration and hard work during this operation. “It is collective efforts like this that highlight why the San Diego region is a model for other law enforcement agencies to emulate, to keep their communities safe,” said Oceanside Police Chief Frank McCoy.
The remaining defendant, William Bright, is set for a motion hearing on October 1, 2018. The other defendants have pleaded guilty and many have been sentenced for their participation in the RICO conspiracy.
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.
DEFENDANTS Case Number 17cr0270-JAH
Corey DeShawn Austin aka “Westwood” Age: 38 Oceanside, CA
Travion McHenry aka “Too Much” Age: 26 Oceanside, CA
SUMMARY OF CHARGES
Title 18, United States Code, Section 1962(d) - Conspiracy to Conduct Enterprise Affairs Through a Pattern of Racketeering Activity; Title 18, United States Code, Section 1963 - Criminal Forfeiture Maximum Penalties: 20 years’ incarceration, a fine of $250,000, three years of supervised release
AGENCIES
North County Narcotics Task Force
Drug Enforcement Administration
Oceanside Police Department
Internal Revenue Service
Opioid Distributor Sentenced to 100 Months in Custody for Using Fraudulent Medical Prescriptions to Acquire OxycodoneRead the Press Release
NEWS RELEASE SUMMARY – August 31, 2018
SAN DIEGO – Today, United States District Court Judge Gonzalo P. Curiel sentenced Edwin Fuller to 100 months in custody following a November 2017 jury trial where he was convicted of conspiring to possess with the intent to distribute oxycodone, in violation of Title 21, U.S.C., Section 841(a)(1) and 846.
Fuller used fraudulent medical prescriptions to acquire approximately 20,520 tablets of oxycodone for the purpose of distribution. In handing down today’s sentence, Judge Curiel stated oxycodone is a very dangerous drug and defendant was responsible for acquiring and distributing large amounts of tablets.
DEFENDANTS Case Number 16cr0867-GPC
Edwin Fuller Age: 39 Los Angeles, CA
SUMMARY OF CHARGES
Conspiracy to possess controlled substances with the intent to distribute – Title 21, U.S.C., Section 841(a)(1) and 846
Maximum penalty: 20 years imprisonment
AGENCY
Drug Enforcement Administration
This case is the result of ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership that brings together the combined expertise and unique abilities of federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, dismantle and prosecute high-level members of drug trafficking, weapons trafficking and money laundering organizations and enterprises.
Rep. Duncan D. Hunter and Wife Indicted for Converting Hundreds of Thousands of Dollars in Campaign Funds and Falsifying Campaign Finance RecordsRead the Press Release
Kelly Thornton, Director of Media Relations (619) 546-9726
NEWS RELEASE SUMMARY – August 21, 2018
SAN DIEGO – U.S. Rep. Duncan D. Hunter and his wife, Margaret E. Hunter, were indicted by a federal grand jury today on charges that they converted more than $250,000 in campaign funds to pay for personal expenses and filed false campaign finance records with the Federal Election Commission.
A 48-page indictment details scores of instances beginning in 2009 and continuing through 2016 in which the Hunters illegally used campaign money to pay for personal expenses that they could not otherwise afford. The purchases included family vacations to Italy, Hawaii, Phoenix, Arizona, and Boise, Idaho; school tuition; dental work; theater tickets; and domestic and international travel for almost a dozen relatives. The Hunters also spent tens of thousands of dollars on smaller purchases, including fast food, movie tickets, golf outings, video games, coffee, groceries, home utilities, and expensive meals.
To conceal their personal spending, the Hunters mischaracterized the purchases in FEC filings as “campaign travel,” “dinner with volunteers/contributors,” “toy drives,” “teacher/parent and supporter events,” “gift cards” for charitable donations, and “gift basket items,” among other false descriptions. Family dental bills paid with campaign funds were characterized as a charitable contribution to “Smiles for Life.” Theater tickets were mischaracterized as “holiday gift certificates.” Tickets for the family to see Riverdance at the San Diego Civic Theater became “San Diego Civic Center for Republican Women Federated/Fundraising.” And to disguise their children’s tuition payments to Christian Unified Schools in El Cajon, the Hunters provided a number of conflicting explanations, including that the payments were charitable contributions.
The Hunters’ improper use of campaign funds for personal expenses occurred despite numerous warnings about the prohibition against using campaign funds for personal expenses and repeated inquiries from Duncan Hunter’s campaign treasurer about questionable purchases. According to the indictment, the Hunters knew that many of their desired purchases could be made only by using campaign funds, since they did not otherwise have sufficient personal funds to pay for their purchases. The criminal investigation began in June of 2016, two months after the Federal Election Commission and the San Diego Union-Tribune questioned some of Hunter’s campaign expenses as potentially personal.
“The indictment alleges that Congressman Hunter and his wife repeatedly dipped into campaign coffers as if they were personal bank accounts, and falsified FEC campaign finance reports to cover their tracks,” said U.S. Attorney Adam Braverman. “Elected representatives should jealously guard the public’s trust, not abuse their positions for personal gain. Today’s indictment is a reminder that no one is above the law.”
The Hunters are scheduled to be arraigned on the indictment on Thursday at 10:30 a.m. before U.S. Magistrate Judge William V. Gallo. They are charged with Conspiracy to Commit Offenses Against the United States, Wire Fraud, Falsification of Records and Prohibited Use of Campaign Contributions.
This case was investigated by the San Diego Division of the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorneys Phillip Halpern, Emily Allen and Mark Conover. The United States Attorney’s Office would like to thank the Department of Justice’s Public Integrity Section, Election Crimes Branch for their assistance in this matter.\
Indictment Document (click
HERE )DEFENDANTS Case Number 18cr3677
Duncan D. Hunter Age: 41 Alpine, CA
Margaret E. Hunter Age: 43 Alpine, CA
SUMMARY OF CHARGES
Conspiracy to Commit Offenses Against the United States – Title 18, U.S.C., Sec. 371
Wire Fraud – Title 18, U.S.C., Sec. 1343
Falsification of Records – Title 18, U.S.C., Sec. 1519
Prohibited Use of Campaign Contributions – Title 52 U.S.C., Secs. 30109(d) and 30114(b)
Aiding and Abetting – Title 18, U.S.C., Sec. 2
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.
Former U.S. Navy Captain and Two Chief Petty Officers Latest to be Indicted in International Navy Bribery and Fraud ScandalRead the Press Release
Assistant U.S. Attorneys Mark W. Pletcher (619) 546-9714 and Patrick Hovakimian (619) 546-9718
NEWS RELEASE SUMMARY – August 16, 2018
SAN DIEGO – U.S. Navy Captain (Retired) David Williams Haas was indicted by a federal grand jury yesterday on charges that he received at least $145,000 in bribes from foreign defense contractor Leonard Francis, who plied him with parties at luxurious hotels, prostitutes, top-shelf booze and food.
In separate indictments, Master Chief Petty Officer (Retired) Ricarte Icmat David and Chief Petty Officer (Retired) Brooks Alonzo Parks were charged with honest services fraud for receiving cash, luxury travel, lavish hotel suites, dining and the services of prostitutes from Francis, owner and chief executive of Glenn Defense Marine Asia. The company provided services such as tugboats, security, fuel, food, water and trash removal to U.S. Navy ships during port visits in Asia Pacific.
According to three indictments returned today in San Diego, the trio reciprocated by using their influence within the Navy’s Seventh Fleet to approve inflated invoices by GDMA, to steer ships to GDMA-controlled ports and otherwise advance the interests of Francis and GDMA. The indictment further alleges that they and their co-conspirators used their access to slip GDMA classified and proprietary U.S. Navy information, and helped GDMA recruit other U.S. Navy officers to join the conspiracy.
According to the eight-count indictment, Haas received the following bribes, among others, from Francis:
- On November 5, 2011, while Haas was director of Maritime Operations for the Seventh Fleet staff aboard the USS Blue Ridge, Francis took Haas and others to dinner at the Ritz Carlton in Tokyo, Japan, and provided them with prostitutes at a cost of more than $20,000.
- On May 11-15, 2012, Francis paid for rooms at the Shangri-La in Jakarta, Indonesia, plus dinner, entertainment at a night club, alcohol and prostitutes for Haas and others.
- On June 29-30, 2012, in Tokyo, Japan, Francis paid for a two-day party for Haas and others including transportation, dinner at Nobu Restaurant and entertainment at several hostess clubs where the services of prostitutes were provided, at a cost of more than $75,000.
- On November 30, 2012, Francis provided a car and driver for Haas and his subordinate and co-conspirator Commander Michael Misiewicz from Yokosuka, Japan, to the Ritz Carlton Hotel in Tokyo, where Francis was staying. (Misiewicz pleaded guilty and was sentenced to 78 months in prison for conspiracy and bribery in April 2016). In Francis’s room, with Haas present, Misiewicz handed Francis an envelope of classified long-range Seventh Fleet ship schedules and Seventh Fleet organization charts. The schedules were stamped “SECRET” and projected ship visits approximately 14 months in advance. These classified schedules included information related to the U.S. Navy ballistic missile defense operations in the Pacific. After reviewing the ship schedules, Francis, Haas and Misiewicz pored over the Seventh Fleet organizational chart, which Haas and Misiewicz had brought with them, in an effort to identify and evaluate potential successors to the corrupt relationship with Francis when Misiewicz departed the Seventh Fleet the following month, in December 2012. Following these discussions, Francis took Haas and Misiewicz to a strip club where food and prostitutes were provided at a cost of approximately $7,000.
A separate indictment alleges that Master Chief Petty Officer David conspired with Francis, GDMA and others to defraud the United States of David’s honest services. In exchange for breaching his fiduciary duties to the United States Navy and the American public, David received cash, hotel rooms, and prostitutes. According to the indictment, David conspired to accept things of value from Francis and other GDMA employees in exchange for David approving fraudulently inflated invoices following port visits, passing classified information to GDMA, advocating for GDMA in contracting disputes, and providing GDMA with internal U.S. Navy information concerning competitors.
Francis gave David cash in exchange for David approving GDMA’s fraudulently inflated ship husbanding invoices, the indictment alleges. After the receipt of one cash installment, on November 16, 2005, David emailed Francis thanking him for the “wonderful Christmas present.” David, thereafter, repeatedly asked Francis for cash to build his retirement home in the Philippines, among other things. During the course of the conspiracy, David received a total of approximately $40,000 in cash from Francis.
A third indictment alleges that Parks received gifts, lavish hotel suites, airline tickets and various other benefits in exchange for Parks providing sensitive and proprietary U.S. Navy information, including competitor pricing and U.S. Navy ship and personnel movement information, among others.
So far, 32 defendants have been charged and 20 have pleaded guilty in the U.S. Navy bribery and fraud scandal.
The case is being prosecuted by Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the U.S. Attorney’s Office for the Southern District of California.
DEFENDANT Case Number: 18CR3656
Captain (Retired) David Williams Haas Age 50 Kailua, Hawaii
SUMMARY OF CHARGES
Conspiracy to Commit Bribery, in violation of 18 U.S.C. § 371
Maximum Penalty: 5 years in prison, a $250,000 fine or twice the gross pecuniary gain or twice the gross pecuniary loss, whichever is greater
Bribery, in violation of 18 U.S.C. § 201
Maximum Penalty: 15 years in prison, a $250,000 fine
Conspiracy to Commit Honest Services Fraud, in violation of 18 U.S.C., Secs. 1349, 1346, 1343
Maximum Penalty: 20 years in prison, a $250,000 fine or twice the gross pecuniary gain or gross pecuniary loss from the offense, or three times the monetary equivalent of the thing of value, whichever is greater
DEFENDANT Case Number: 18CR3655
Master Chief Petty Officer (Retired) Ricarte Icmat David Age 61 Tarlac Province, Philippines
SUMMARY OF CHARGES
Conspiracy to Commit Honest Services Fraud, in violation of 18 U.S.C., Secs. 1349, 1346, 1343
Maximum Penalty: 20 years in prison, a $250,000 fine
DEFENDANT Case Number: 18CR3657
Chief Petty Officer (Retired) Brooks Alonzo Parks Age 46 Naples, Italy
SUMMARY OF CHARGES
Conspiracy to Commit Honest Services Fraud, in violation of 18 U.S.C., Secs. 1349, 1346, 1343
Maximum Penalty: 20 years in prison, a $250,000 fine
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
Defense Contract Audit Agency
- On November 5, 2011, while Haas was director of Maritime Operations for the Seventh Fleet staff aboard the USS Blue Ridge, Francis took Haas and others to dinner at the Ritz Carlton in Tokyo, Japan, and provided them with prostitutes at a cost of more than $20,000.
Convicted Alien Smuggler Sentenced to 44 Months for Actions Resulting in Injury to Border Patrol AgentRead the Press Release
Assistant U. S. Attorney Timothy D. Coughlin (619) 546-6768
NEWS RELEASE SUMMARY – August 17, 2018
SAN DIEGO – Jaime Aburto, a United States citizen with a prior alien smuggling conviction, was sentenced in federal court today to forty-four months in prison for his role in a smuggling incident that left a Border Patrol Agent injured.
The sentence was handed down by U.S. District Judge Gonzalo P. Curiel following the defendant’s guilty plea in May to one count of Transportation of Certain Aliens for Financial Gain, in violation of Title 8, United States Code, Section 1324. During today’s sentencing, the Court heard testimony from United States Border Patrol Agent Francisco Hurtado, who was seriously injured in apprehending Aburto.
“Smugglers see customers as dollar signs and have no concern for the safety and well-being of those they smuggle,” said U.S. Attorney Adam Braverman. “This office is committed to prosecuting smugglers, particularly when it results in an injury to a border patrol agent performing his duties.”
According to Agent Hurtado, he was performing his assigned duties in the Chula Vista Border Patrol Station’s area of responsibility when he was notified by a fellow agent that she had observed two suspected aliens attempting to conceal themselves in a construction area near the border. Agent Hurtado responded to the area and positioned himself to make contact with any vehicle that may attempt to pick up the two suspected aliens. In fact, a white van stopped and the two suspected aliens jumped into the van. Agent Hurtado began to follow the van and activated his emergency lights and siren as he observed the vehicle traveling westbound on State Route 11. Agent Hurtado gave the driver of the van, later determined to be Defendant Aburto, an opportunity to pull over and stop at a safe location. Aburto did not stop and accelerated to a speed of over 100 miles per hour and merged onto State Route 125.
Over the next several miles of his pursuit, Agent Hurtado saw defendant Aburto make a dangerous U-turn in the center median of SR 125, speed through a red traffic light across oncoming traffic near Otay Mesa Road, swerve around moving traffic, drive over the dividing median on Siempre Viva Road, drive through two heavily populated retail commercial lots and finally drive onto the sidewalk along the southbound lane of Roll Avenue, where he struck a pole and came to a stop.
The defendant jumped from the van and began to run southbound on Roll Avenue towards the Otay Mesa, California Port of Entry. Agent Hurtado engaged in a foot pursuit of Aburto and was able to overtake him. There was a brief struggle as both Agent Hurtado and Aburto ended up wrestling on the ground. Agent Hurtado placed Aburto under arrest with the assistance of fellow border patrol agents.
As a result of Aburto’s actions of resisting arrest, Agent Hurtado sustained a serious leg injury which required him to be out of work for several weeks. He is still working to recover full mobility. Agent Hurtado spoke at Aburto’s sentencing detailing his prior military service and his 15-year career with the Border Patrol. Judge Curiel departed upward given the injury sustained by Agent Hurtado and sentenced Aburto to 44 months in custody.
DEFENDANTS Case Number: 18cr1975-GPC
Jaime Aburto Age: 38 San Diego, California
SUMMARY OF CHARGES
One Count – Transportation of Certain Aliens for Financial Gain and Aiding and Abetting – Title 8, U.S.C., Section 1324(a)(1)(A)(ii) and (a)(1)(B)(i)
AGENCIES
Homeland Security Investigations
U.S. Border Patrol
Bitcoin Dealer Indicted on Money Laundering Charges; Held without BondRead the Press Release
Assistant U. S. Attorney Robert Ciaffa (619) 546-7748
SAN DIEGO – Jacob Burrell Campos, a 21-year-old Bitcoin dealer, was ordered held without bail today in connection with a 31-count indictment charging him with operating an illegal money transmitting business, failing to maintain an anti-money laundering program, international money laundering and conspiracy to structure monetary transactions. Burrell was arrested on August 13 as he tried to enter the United States from Mexico at the Otay Mesa Port of Entry.
According to statements made in court by Assistant U.S. Attorney Robert Ciaffa during today’s bond hearing, Burrell was a prolific Bitcoin dealer who sold approximately $750,000 worth of Bitcoin to hundreds of buyers throughout the United States. He conducted 971 separate transactions with over 900 individual customers, and accepted cash in person, through his bank accounts, and through MoneyGram. AUSA Ciaffa told the court today that Burrell operated as a Bitcoin “exchanger,” and his activities constituted a “money transmitting business.” As such, he was required to register with the Department of Treasury, and comply with all anti-money laundering requirements, including reporting suspicious cash transactions. In this case, Burrell accepted cash “with no questions asked,” and in return for a 5% fee, supplied hundreds of individuals with an easy outlet to avoid the anti-money laundering laws applicable to all financial institutions, including licensed and registered Bitcoin exchanges. According to AUSA Ciaffa, Burrell’s activities “blew a giant hole” through the legal framework of U.S. anti-money laundering laws by soliciting and introducing into the U.S. banking system close to $1 million in unregulated cash.
Burrell is also charged with 28 counts of international money laundering. According to the indictment, Burrell sent 28 wire transfers totaling over $900,000 from his bank accounts in the United States to a bank account in Taiwan in the name of Bitfinex. Bitfinex is a crypto-currency exchange located in Hong Kong. According to AUSA Ciaffa, Burrell sent the money from the United States to buy Bitcoin and fund his business. With these and other funds, Burrell bought over $3 million worth of Bitcoin in over 2,600 transactions. Burrell resorted to buying Bitcoin through Bitfinex after his account was closed by Coinbase, a U.S.-based Bitcoin exchange, for circumventing its ID verification process.
The indictment also charges Burrell with conspiracy to structure the importation of monetary instruments. According to statements made by AUSA Ciaffa in court today, Burrell agreed with others to smuggle over $1 million in U.S. dollars into the United States from Mexico, in amounts slightly less than $10,000, in order to avoid the currency reporting requirements.
U.S. Magistrate Judge Karen S. Crawford found that Burrell had significant ties to Mexico, citizenship in three countries, no steady employment in the United States, the ability to access large sums of cash, and a disdain and unwillingness to comply with U.S. laws. She concluded that Burrell posed a substantial risk of flight, and ordered him held without bail.
Burrell was born in San Diego, and lives in Rosarito, Baja California.
DEFENDANT Case Number 18CR3554-H
Jacob Burrell-Campos Age: 21 Rosarito, Baja California, Mexico
SUMMARY OF CHARGES
Count 1: Conducting an unlicensed money transmitting business, in violation of 18 USC 1960.
Statutory maximum: Five years in prison, $250,000 fine.
Count 2: Failing to maintain an anti-money laundering program, in violation of 18 USC 5318(h), 5322(b)
Statutory maximum: Ten years in prison, $500,000 fine.
Counts 3-30: International money laundering, in violation of 18 USC 1956(a)(2).
Statutory maximum: Twenty years in prison for each count, $500,000 fine.
Count 31: Conspiracy to structure international instrument transactions, in violation of 18 USC 371 and 31 USC 5324(c)(3)
Statutory maximum: Five years in prison, $250,000 fine.
AGENCIES
Homeland Security Investigations
Internal Revenue Service
Postal Inspection Service
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Former U.S. Border Patrol Supervisor Pleads Guilty, Admits to Violating Civil Rights of Legal Border CrosserRead the Press Release
Assistant U.S. Attorney Colin McDonald (619) 546-9144
NEWS RELEASE SUMMARY – August 16, 2018
SAN DIEGO – Former U.S. Border Patrol Supervisory Agent Martin Rene Duran pleaded guilty in federal court today, admitting that he used his official position to create bogus alerts in a border-security law enforcement database to have an innocent man detained by Customs and Border Protection officers at the San Ysidro Port of Entry.
According to the complaint, the target of Duran’s false alerts was R.C., a man who had accused Duran’s brother-in-law, Raymundo Estrada Figueroa, of sexually abusing R.C.’s child in Mexico. Within one week of those allegations, as admitted during the plea proceedings, Duran directed a subordinate Border Patrol officer to create a law enforcement alert for R.C. which falsely claimed R.C. was frequently armed with a .45 caliber handgun. As Duran admitted today, over the next several months, Duran then entered several false alerts for R.C. into a system known as TECS, the principal database used by officers at the border to assist with screening individuals seeking entry into the United States. In one TECS alert, Duran falsely claimed R.C. was “known to carry firearms” and was linked to a narcotics organization. In another, Duran falsely claimed R.C. had made recent threats to law enforcement.
According to the complaint, R.C.—who is identified only by his initials to protect his son’s identity—is a lawful permanent resident of the United States with no known criminal history. He was detained on multiple occasions at the San Ysidro border crossing in 2013 based on the false alerts entered by Duran. According to the complaint, every time R.C. was detained, no weapons or contraband were found and he was released. On one occasion, R.C. and his wife were removed from their vehicle, handcuffed, separated from their minor children, escorted to the security office and put in a holding cell for almost two hours before they were released. According to the complaint, R.C. believed Duran was trying to pressure him into dropping the charges against Estrada, the brother-in-law. And today, Duran admitted he had R.C. detained at the Port of Entry so he could question him about the matter involving Estrada.
In a separate case earlier this year, Duran was convicted by a federal jury of seven counts of illegal transportation of firearms and one count of possession of a short-barreled rifle. Duran is scheduled to appear before U.S. District Judge Marilyn L. Huff on September 17, 2018 at 9:00 a.m. for sentencing on both matters.
“This agent used his significant power against someone he was sworn to protect,” said U.S. Attorney Adam Braverman. “He targeted a law-abiding citizen because of a personal vendetta, and for that he will pay a price.”
DEFENDANT
Martin Rene Duran Age: 49 Chula Vista
SUMMARY OF CHARGES
Case Number: 15CR2818
Deprivation of Rights Under Color of Law, in violation of Title 18, U.S.C., Sec. 242
Maximum Penalty: 12 months’ custody, a fine of $100,000, one year of supervised release.
Case Number: 15CR2817
Title 18, United States Code, Section 922(a)(3) – Illegal Transportation of Firearms
Maximum Penalties: 5 years’ incarceration, a fine of $250,000, three years of supervised release.
Title 26, United States Code, Sections 5861 and 5871 – Possession of Unregistered Firearm: Maximum Penalties: 10 years’ incarceration, a fine of $250,000, three years of supervised release.
AGENCIES
Bureau of Alcohol, Tobacco, Firearms and Explosives
Immigration and Customs Enforcement – Office of Professional Responsibility
Department of Homeland Security – Office of Inspector General
U.S. Customs and Border Protection - Office of Professional Responsibility
Supervisory Customs and Border Protection Officer Arrested and Charged with Strangling a Traveler at San Ysidro Port of EntryRead the Press Release
Assistant U. S. Attorney Ryan R. Crosswell (619) 546-9661
NEWS RELEASE SUMMARY – August 15, 2018
SAN DIEGO – Supervisory U.S. Customs and Border Protection Officer Harvey Booker was indicted by a federal grand jury yesterday for deprivation of rights under the color of law. He was arrested at his home early this morning.
Booker made his initial appearance in federal court today before U.S. Magistrate Judge Karen S. Crawford. His next court appearance is a motions hearing on September 7, 2018, at 2:00 p.m. before Chief U.S. District Judge Barry T. Moskowitz.
According to the indictment, on July 8, 2018, Booker, while acting under color of law as a Customs and Border Protection Officer, strangled M.N., willfully depriving him of the right, secured by the Constitution and the laws of the United States, to be free from unreasonable force and unlawful assault by a law enforcement officer. According to the indictment, Booker’s assault resulted in bodily injury to M.N. The victim was not identified in the indictment to protect his privacy. A prosecutor explained in court that this incident was “an act of violence against a traveler at the Port of Entry.”
“There is no excuse for law enforcement officials to abuse the significant trust and power placed in them,” said U.S. Attorney Adam Braverman. “Law enforcement takes great pride in protecting the civil rights of all people. When that trust is betrayed, we must hold that officer accountable.”
Amanda Thandi, Special Agent in Charge of the Department of Homeland Security (DHS), Office of Inspector General (OIG), San Diego Field Office, stated: “All DHS law enforcement officers are required and expected to abide by the laws they enforce and protect. DHS OIG is committed to hold anyone who betrays the public’s trust accountable for his/her actions, while supporting the men and women who proudly uphold their duties to serve, protect, and ensure the constitutional rights of all persons.” The public is encouraged to report violations of civil rights regarding DHS programs and activities to the DHS Office for Civil Rights and Civil Liberties; the civil rights complaint form is available at https://www.dhs.gov/publication/file-civil-rights-complaint.
“U.S. Customs and Border Protection stresses professionalism, honor and integrity in every aspect of our mission and does not tolerate actions by any employee that would tarnish the reputation of our agency,” said CBP Director of Field Operations for San Diego, Pete Flores. “CBP is fully cooperating with the FBI and DHS Office of the Inspector General regarding this investigation.”
DEFENDANTS
Harvey Booker Age: 70 San Diego, CA
SUMMARY OF CHARGES
Deprivation of Rights Under Color of Law – Title 18, U.S.C., Section 242
Maximum penalty: 10 years’ imprisonment and a $250,000 fine
AGENCIES
Department of Homeland Security – Office of Inspector General
U.S. Customs and Border Protection – Office of Professional Responsibility
Federal Bureau of Investigation
*An indictment is not evidence that the defendant committed the crime charged. The defendant is presumed innocent until the United States meets its burden in court of proving guilty beyond a reasonable doubt.
Former MLB All-Star Pitcher Esteban LoaizaPleads Guilty to Possessing 20 Kilograms of Cocaine with Intent to DistributeRead the Press Release
NEWS RELEASE SUMMARY – August 10, 2018
SAN DIEGO – Former Major League Baseball All-Star pitcher Esteban Loaiza pleaded guilty in federal court today to an Information charging him with possession of 20 kilograms of cocaine with intent to distribute.
In a change of plea hearing before United States District Judge Janis L. Sammartino, Loaiza admitted that on February 9, 2018, he took possession of a silver Mercedes-Benz sport utility vehicle that he knew to contain cocaine. He further admitted that he drove the SUV to a townhouse he rented in Imperial Beach, California, where he transferred 20 kilograms of cocaine to another vehicle in the garage, and that he did so with the intent to distribute the cocaine to another person.
Loaiza will remain on bond and subject to electronic location monitoring pending his sentencing hearing.
Sentencing is scheduled to occur before Judge Sammartino on November 2, 2018 at 10:30 a.m.
This case is the result of ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership that brings together the combined expertise and unique abilities of federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, dismantle and prosecute high-level members of drug trafficking, weapons trafficking and money laundering organizations and enterprises.
DEFENDANTS Case 18CR1743-JLS
Esteban Antonio Loaiza Age: 46 Imperial Beach, CA
SUMMARY OF CHARGES
Possession of Cocaine with Intent to Distribute – Title 21, U.S.C., Section 841(a)(1)
Maximum penalty: Life imprisonment and $10,000,000 fine
AGENCIES
United States Drug Enforcement Administration
United States Border Patrol
San Diego Sheriff’s Department
Defendant Charged with Importation of More than 20,000 Fentanyl Pills at the San Ysidro Port of EntryRead the Press Release
Assistant U. S. Attorney Sherri Walker Hobson (619) 961-0287
NEWS RELEASE SUMMARY – August 9, 2018
SAN DIEGO – Fernando Jesus Peraza, a U.S. citizen living in Tijuana, was arraigned in federal court today on charges of importing over 20,000 fentanyl pills in what is believed to be the largest seizure of fentanyl in pill form along the U.S.-Mexico border.
Peraza, who works in San Diego County, was arrested at the San Ysidro Port of Entry today at 2:30 a.m. According to court records, Peraza was the driver, registered owner and sole occupant of the vehicle. U.S. Custom Border & Protection officers initially contacted Peraza in preprimary inspection area but was then referred to secondary inspection, where officers found four packages concealed in the passenger side rear quarter panel. The pills tested positive for fentanyl but were designed to resemble M30s, or oxycodone.
At Peraza’s initial appearance today before U.S. Magistrate Judge Jill Burkhardt, the United States requested detention based on risk of flight. Judge Burkhardt scheduled a detention hearing for August 10, 2018 at 10:00 a.m. and a preliminary hearing for August 21, 2018 at 9 a.m.
Earlier this month, Cristian Araujo Aguirre, 19 of Tijuana, was charged with importing 11,490 fentanyl pills, 61 pounds of methamphetamine and 14 pounds of heroin. Aguirre was arrested at the San Ysidro Port of Entry on August 1, 2018. Aguirre is currently detained. His next court appearance is on August 31, 2018.
“This is the biggest fentanyl pill seizure we’ve seen along the Southwest Border, and it’s likely a national record,” said U.S. Attorney Adam Braverman. “I’m relieved that these pills are off the streets because of the vigilant work of law enforcement. But that relief is tempered by the fact that people are overdosing every day because they took fentanyl-laced pills just like these, oblivious to the deadly consequences.”
DEFENDANT Case Number 18MJ4376
Fernando Jesus Peraza Age: 38 Tijuana, Mexico
SUMMARY OF CHARGES
Importation of Controlled Substances
Maximum penalty: Ten years minimum to life; $1 million fine
INVESTIGATING AGENCIES
Homeland Security Investigations
U.S. Customs & 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.
20-Year-Old Tijuana College Student Sentenced to 87 Months in Custody for Smuggling FentanylRead the Press Release
NEWS RELEASE SUMMARY – August 6, 2018
SAN DIEGO – Today, District Judge Larry A. Burns sentenced Flavio Diego Rivera Davalos, 20, to 87 months in custody based on his guilty plea admitting that he smuggled approximately 77 pounds of fentanyl into the United States. Davalos, who was 19 at the time of the offense, was arrested at the San Ysidro Port of Entry on December 8, 2017 following one of the largest seizures of the deadly opioid along the Southwest border. According to expert opinions included in court records, 77 pounds of fentanyl would yield 800,000 potentially fatal dosage units and a market value of more than $2 million.
According to court documents, Davalos entered the United States from Mexico through the San Ysidro, California Port of Entry. Davalos, a visa holder, was the driver, sole occupant and registered owner of the 2010 Ford Focus bearing Baja California, Mexico license plates. In pre-primary inspection, a Customs and Border Protection Officer and an assigned Narcotics and Human Detection Dog were conducting roving operations when the canine alerted to the odor of narcotics in the vehicle. The CBP officer questioned Davalos regarding his purpose of travel to the United States and he responded that he was going to “Las Americas” Premium Outlets shopping mall. At the secondary inspection area, CBP officers detected anomalies in the rear seat and rear quarter panels of the vehicle. According to the complaint, officers found 31 packages of fentanyl throughout the vehicle, including in the driver’s side quarter panel, the passenger’s side quarter panel, the driver’s side rear seat, the passenger’s side rear seat, the speaker box and the firewall under the hood.
According to court records, Davalos initially agreed to transport drug proceeds from Los Angeles to Tijuana and the traffickers gave a vehicle to Davalos, who used his new vehicle for work and college. Traffickers also gave money to Davalos to place the vehicle in his own name and directed Davalos to “burn” the plates through the Port of Entry to minimize suspicion. Davalos was also directed to provide receipts of his crossings to the traffickers to confirm that he had multiple crossings. Davalos gave his vehicle to the traffickers the day before he crossed, thereby facilitating the placement of drugs in his vehicle. When he entered the Port the next day as part of a three-vehicle caravan headed to Los Angeles, Davalos suspected that all three vehicles were loaded with drugs.
Rejecting the defense plea for a 30-month sentence, District Court Judge Burns commented that Davalos “did not play a ‘minor’ role in the offense” but rather played a significant part in importing an illegal drug, particularly given the volume of the deadly substance and the specific facts of this case. Judge Burns additionally found it troubling that defendant, a college student in Tijuana, was also a teacher who failed to set a good example for his young students.
“Our district’s work enforcing drug laws has never been more important than it is right now. Cartels are on a mission to use California ports of entry to funnel highly addictive and fatal opioids throughout the United States, exacerbating the deadliest drug crisis in American history,” stated U.S. Attorney Adam Braverman. “Here vigilant law enforcement agents took 800,000 fatal fentanyl doses off the streets, effectively preventing defendant’s deadly fentanyl stash from resulting in thousands of devastating overdoses.”
DEFENDANT Case Number: 18-cr-01120-LAB
Flavio Diego Rivera Davalos Age 20 Tijuana, Mexico
CHARGES
Importation of Controlled Substance: 10 year minimum mandatory to life; fine of $1 million dollars; at least 3 years of supervised release; $100 Special Assessment
AGENCIES
Customs and Border Protection (CBP)
Homeland Security Investigations (HSI)
19-Year-Old Charged with Importation of 11,490 Fentanyl Pills,61 Pounds of Methamphetamine, and 14 Pounds of Heroin at San Ysidro Port of EntryRead the Press Release
NEWS RELEASE SUMMARY – August 2, 2018
SAN DIEGO – Today, Cristian Araujo Aguirre, 19, was arraigned by Magistrate Judge Barbara Major, on charges of importing 11,490 fentanyl pills, 61 pounds of methamphetamine and 14 pounds of heroin. Aguirre was arrested at the San Ysidro Port of Entry on August 1, 2018.
According to court records, Aguirre, a United States citizen living in Tijuana, was the driver and sole occupant of a vehicle. U.S. Custom Border & Protection (“CBP”) officers found anomalies in the driver’s side and passenger side rear door panels and spare tire of his vehicle. CBP removed 8 packages of heroin in the vehicle’s firewall, two packages of methamphetamine from the rear driver’s side door; 2 packages of methamphetamine from the rear driver’s side door; 5 packages of methamphetamine from the right rear quarter panel; 11 packages of methamphetamine from the right passenger rear door; 9 packages of methamphetamine in the spare tire, 2 bags and one box of pills (totaling 11,490 pills) in the left rear quarter panel of the vehicle. The pills tested positive for fentanyl but were designed to resemble M30s, or oxycodone.
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At defendant’s initial appearance, the United States requested detention based on risk of flight. The detention hearing is scheduled for August 7, 2018 at 9:30 before Judge Major. His preliminary hearing is scheduled for August 16, 2018 at 9:30 before Judge Major.
DEFENDANT Case Number 18MJ4249
Cristian Araujo Aguirre Age: 19 Tijuana, Mexico
SUMMARY OF CHARGES
Importation of Controlled Substances
Maximum penalty: 10 years minimum to life; $1,000,000 fine; supervised release; $100 special assessment)
INVESTIGATING AGENCIES
Homeland Security Investigations
U.S. Customs & Border Protection (CBP)
The public is reminded that a complaint is a charging document. A defendant is presumed innocent until the government meets its burden in court of proving guilt beyond a reasonable doubt.
Fugitive Extradited in Border Patrol Agent Brian Terry Murder CaseRead the Press Release
NEWS RELEASE SUMMARY – July 31, 2018
SAN DIEGO, CA – Heraclio Osorio-Arellanes, who is charged with the first-degree murder of U.nited S.tates Border Patrol Agent Brian Terry, was extradited from Mexico to the United States today, announced Attorney General Jeff Sessions and Southern District of California U.S. Attorney Adam Braverman for the Southern District of California. He will be arraigned in U.nited S.tates District Court in, Tucson, Arizona, Wednesday tomorrow afternoon. Osorio-Arellanes has been in custody awaiting extradition since his arrest by Mexican authorities on April 12, 2017.
Agent Terry was fatally shot on Dec.ember 14, 2010, when he and other U.S. Border Patrol agents encountered Osorio-Arellanes and four other members of a “rip crew” (a criminal gang that attempts to steal from drug and alien smugglers) operating in a rural area north of Nogales, Arizona. Of the six defendants charged along with Osorio-Arellanes in the case, three have pleaded guilty, two were convicted following a jury trial, and one other defendant – Jesus Rosario Favela Astorga (arrested by Mexican authorities in October, 2017) – has not yet been tried. is pending extradition to the United States.
“The Department of Justice is pleased that the suspected killer of Border Patrol Agent Brian Terry has been successfully extradited to the United States and will now face justice for this terrible crime,” said Attorney General Jeff Sessions. “We are grateful for the efforts of the Federal Bureau of Investigation, U.S. Marshals Service and U.S. Customs and Border Protection as well as our law enforcement partners in Mexico. To anyone who would take the life of an American citizen, in particular an American law enforcement officer, this action sends a clear message: Working closely with our international partners, we will hunt you down, we will find you, and we will bring you to justice.”
“The arrest and extradition of Osorio-Arellanes reflects the steadfast commitment and tireless work of the United States and our law enforcement partners in Mexico, who shared the common goal of seeking justice for the murder of Agent Brian Terry,” said U.nited S.tates Attorney Adam Braverman. “When an agent makes the ultimate sacrifice while serving his country, we must hold all the individuals who played a part in this tragic outcome accountable for their actions. This extradition moves that important goal forward.”
The indictment charges the defendants with first-degree murder, second-degree murder, conspiracy to interfere with commerce by robbery, attempted interference with commerce by robbery, use and carrying a firearm during a crime of violence and assault on a federal officer. In addition to the murder of Agent Terry, the indictment alleges that the defendants assaulted U.S. Border Patrol Agents William Castano, Gabriel Fragoza and Timothy Keller, who were with Agent Terry during the firefight with the “rip crew.”
This case is being prosecuted in federal court in Tucson 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 is being investigated by the FBI. The Government of Mexico assisted in the apprehension and extradition. The Justice Department’s Office of International Affairs provided assistance with the extradition of defendant Osorio-Arellanes.
The public is reminded that an indictment is a formal charging document and defendants are presumed innocent until the government meets its burden in court of proving guilt beyond a reasonable doubt.
DEFENDANT Case No. 11-CR-00150-TUC-DCB (BPV)
Heraclio Osorio-Arellanes
AGENCIES
Federal Bureau of Investigation
U.S. Customs and Border Protection
United States Border Patrol
DOJ Office of International Affairs
Fourth Defendant Pleads Guilty in Wide-Ranging Cocaine Conspiracy; Admits Illinois Weapons Cache Was Part of ConspiracyRead the Press Release
NEWS RELEASE SUMMARY – July 31, 2018
SAN DIEGO – Juan A. Mexicano, aged 33, pleaded guilty today in federal court before U.S. Magistrate Judge Ruben B. Brooks to an expanding cocaine distribution conspiracy, extending from Mexico to San Diego to the Chicago, Illinois area. Mexicano, who remains in custody, is the fourth defendant to plead guilty in this case. He admitted to maintaining a narcotics stash house in Illinois to further the distribution of cocaine that emanated from a Mexican-based trafficker, identified in court documents as “El 99”, and which entered the United States via the Southern District of California. Mexicano also admitted that a cache of firearms and other weapons, including two live grenades, that law enforcement located in a storage facility rented in Mexicano’s name were possessed in relation to his involvement in the narcotics conspiracy.
Through his plea agreement, Mexicano admitted that the stash house, approximately 10 miles northwest of Chicago, was used for the temporary storage of cocaine before it was further distributed. Mexicano acknowledged that, up to approximately150 kilograms (approximately 330 pounds) of cocaine were stored at that property. In August 2016, shortly before a search warrant was executed at the property, Mexicano admitted that he removed bulk U.S. currency and cocaine from the property. Mexicano also admitted that, to further the conspiracy, he temporarily stored drug proceeds at a stash house before those proceeds were moved south from the Chicago area to Mexico.
The federal charges to which Mexicano has pleaded guilty carry a mandatory minimum ten year sentence and a maximum life sentence. Mexicano is scheduled to be sentenced on October 19, 2018 before U.S. District Judge Gonzalo P. Curiel in San Diego.
Notwithstanding his guilty plea in San Diego, Mexicano still faces weapons charges in Kane County, Illinois (Case No. 17CF1720) related to the discovery of the weapons cache in Elgin, Illinois. In addition to the live grenades, the weapons seized included fully automatic weapons, a submachine gun and others. A photograph of the weapons, previously released by the Elgin Police Department (see Report #2016-59306), is attached.
In addition to Mexicano, other defendants who have entered guilty pleas in the case are: Walter Rovidio Ipina, aged 40; David Castaneda-Solis, aged 33; and Zachary Vasquez, aged 27.
Through his plea agreement, Ipina admitted that, during 2016, he moved the cocaine provided by El-99 that entered the United States through the Southern District of California by using his family owned trucking business’ tractor-trailer to transport the cocaine from Southern California to the Chicago, Illinois area. In September 2016, he was stopped by law enforcement agents who seized the 32 kilograms (approximately 70 pounds) of cocaine that he was then carrying. Ipina is scheduled for sentencing on August 3, 2018 before Judge Curiel.
Castaneda-Solis pleaded guilty to laundering the narcotics proceeds. On August 12, 2016, Castaneda-Solis was caught by law enforcement while he was unloading $154,000 in narcotics proceeds from a hidden compartment in the dashboard of a Honda Pilot vehicle. The $154,000 was seized by law enforcement. Castaneda-Solis admitted that he placed these proceeds into a black bag to enable their further transport to their ultimate destination in Mexico. Castaneda-Solis is scheduled for sentencing on October 4, 2018.
Vasquez pleaded guilty to the cocaine conspiracy and admitted that he served as a narcotics load coordinator/recruiter. He admitted to coordinating with “El 99” in Mexico. Vasquez also admitted to recruiting and supervising a driver who smuggled cocaine through the San Ysidro Port of Entry on at least four occasions before that driver was arrested and the cocaine the load driver was then transporting was seized. Vasquez admitted that his activity involved more than 125 kilograms, but less than 150 kilograms (between approximately 275 and 330 pounds) of cocaine. Vasquez is scheduled for sentencing on September 13, 2018.
DEFENDANTS Case Number 17-cr-648
Juan A. Mexicano Age: 33 Addison, IL
Walter R. Ipina Age: 40 Victorville, CA
David Castaneda-Solis Age: 34 Mexico
Zachary Vasquez Age: 27 Anaheim, CA
SUMMARY OF CHARGES TO WHICH GUILTY PLEAS ENTERED
Mexicano, Ipina & Vasquez
Conspiracy to Unlawfully Distribute Cocaine, 21 U.S.C. 846
Maximum penalty: Life in prison, and a mandatory minimum 10 years; $10,000,000 fine; and at least five years’ supervised release up to life.
Castaneda-Solis
Conspiracy to Launder Monetary Instruments, 18 U.S.C. 1956(h)
Maximum penalty: 20 years custody; 3 years supervised release; and $500,000 fine.
INVESTIGATING AGENCIES
Homeland Security Investigations
Bureau of Alcohol Tobacco Firearms and Explosives
Ventura County, CA Sheriff’s Office
Police Departments of: Elgin, IL; Addison, IL.; Chicago, IL; Hoffman Estates, IL;
New Lenox, IL; Olympia Fields, IL; Streamwood, IL; and Lombard, IL
Sheriff’s Offices of: Kane County, IL; DuPage County, IL; Will County, IL
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Career Navy Commander Pleads Guilty to 18-Month Conspiracy to Dispense, Distribute and Deliver Controlled Substances Using Dark WebRead the Press Release
Assistant U. S. Attorney Sherri Walker Hobson (619) 961-0287
NEWS RELEASE SUMMARY – July 20, 2018
SAN DIEGO – U.S. Navy Commander Adolph Garza, a 23-year veteran, pleaded guilty in federal court today to drug charges, admitting that he conspired to distribute, deliver and dispense controlled substances by means of the internet.
Garza, a San Diego resident, admitted using the Dark Web to make multiple purchases of various controlled substances, including ecstasy, ketamine, cocaine, amphetamine and other controlled substances over an 18-month period, beginning on August 12, 2016 and continuing up to March 7, 2018.
According to his plea agreement, Garza used multiple dark web market places to order controlled substances for distribution in San Diego and beyond. In his plea agreement, Garza admitted that on at least 15 occasions, the drugs he ordered were the same ones seized by U.S. Customs and Border Protection at airports in San Francisco, New York and Chicago; and by U.S. Postal Inspectors and Homeland Security Investigations agents in San Diego.
On March 7, 2018, Garza was arrested by U.S. Postal Inspectors, Special Agents with Homeland Security Investigations, and Special Agents with Naval Criminal Investigative Service following a search warrant for his San Diego condominium. Inside his residence, agents found sealers, packaging and mailing materials, and concealment mailing methods (including DVD cases). Federal agents also seized MDMA, cocaine, ketamine, amphetamine and other controlled substances, as Garza admitted today in federal court.
According to court records, Garza also distributed controlled substances, including powder and tablet forms of MDMA and ketamine, by mailing multiple packages to individuals in Texas.
Garza is scheduled to be sentenced before U.S. District Judge Cynthia Bashant on December 10, 2018 at 9 a.m.
DEFENDANT Case Number 18-cr-1745
Adolph Garza Age: 54 San Diego, California
SUMMARY OF CHARGES
Conspiracy to Distribute Controlled Substances by Internet
Maximum penalty: 20 years’ imprisonment and $500,000 fine
INVESTIGATING AGENCIES
U.S. Postal Inspection Service
Homeland Security Investigations
Naval Criminal Investigative Service
U.S. Customs and Border Protection
San Diego Police Department
Five Crew Members Sentenced for Smuggling 1,205 Pounds of Cocaine on the High Seas; Captain of Low-Profile Vessel Sentenced to 210 monthsRead the Press Release
Special Assistant U.S. Attorney Ari Fitzwater (619) 546-8756, Special Assistant U.S. Attorney Emily Gibbons (619) 546-8419, Assistant U.S. Attorney Connie Wu
NEWS RELEASE SUMMARY – July 19, 2018
SAN DIEGO – Five crew members were sentenced in federal court this week for smuggling 1,205 pounds of cocaine across the ocean in low-profile vessels, including a captain who received a 17-year term.
Two of the defendants had previously been convicted of similar crimes in the Middle District of Florida. United States District Judge Roger T. Benitez sentenced the defendants to spend between 84-210 months in prison.
On September 17, 2017, captain Jorge Ortiz-Salazar and crewmembers Elpidio Enriquez and Laureano Benitez-Montano were spotted traveling in the Eastern Pacific Ocean aboard a low-profile vessel loaded with cocaine. Meanwhile, another boat captain, defendant Luis Alberto Corado-Polanco, and crew member Juan Jose Valiente-Tomes, were traveling in a go-fast vessel intending to rendezvous with the other crew onboard the low-profile vessel. United States Coast Guard Cutter JAMES launched a helicopter to intercept the defendants’ vessels.
When the Coast Guard helicopter intercepted the low profile vessel, Ortiz-Salazar abandoned it by jumping onto Corado-Polanco’s go-fast vessel. Corado-Polanco then attempted to outrun the Coast Guard. The Coast Guard helicopter issued orders to stop, and then issued warning shots, both of which were ignored. Ultimately the go-fast vessel was stopped when the Coast Guard fired disabling shots at its engines. The Coast Guard later recovered approximately 1,205 pounds of cocaine from the low profile vessel.
Three defendants are Colombian nationals and two defendants are Guatemalan nationals. Three defendants admitted to conspiring to distribute the cocaine. Of those three defendants, Laureano Benitez-Montano was sentenced to 84 months in custody; Luis Alberto Corado-Polanco was sentenced to 96 months in custody; and Juan Jose Valiente-Tomes was sentenced to 84 months in custody. The Court found that Corado-Polanco, as captain of the go-fast vessel, created a potentially dangerous situation by fleeing from law enforcement. The other two defendants admitted to possession with intent to distribute the cocaine while onboard a vessel subject to the jurisdiction of the United States. Of those defendants, Elpidio Enriquez was sentenced to 180 months in custody and Jorge Ortiz-Salazar was sentenced to 210 months in custody.
“As we see more and more smugglers taking to the ocean, hoping to go undetected in the vast territory of the Eastern Pacific Ocean, we have redoubled our efforts and committed more resources to this problem,” said U.S. Attorney Adam Braverman. “We are at the forefront of our nation’s war against drugs and will continue to work together with our law enforcement partners at the Coast Guard and the DEA to dismantle violent and dangerous transnational organized crime networks that are using the high seas as a Narco expressway.”
“The Coast Guard’s mission of interdicting drug smugglers in the Eastern Pacific Ocean is extraordinarily challenging, but it is essential to protect our nation from the international flow of illegal drugs and the transnational organized criminals that thrive from the drug trade,” said Rear Adm. Peter Gautier, Commander of the 11th Coast Guard District. “The Coast Guard will be steadfast in our role to dismantle transnational drug trafficking networks by intercepting their vessels, seizing their drugs and bringing the traffickers to court to answer for their crimes.”
“These men were brazen in fleeing from the U.S. Coast Guard, but today they were acquainted with Lady Justice,” said DEA Special Agent in Charge Karen Flowers. “As she stands in judgement, let those who threaten our nation be reminded that when law enforcement joins forces, they face no greater enemy.”
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.
DEFENDANTS
Case Number 17cr3293
Elpidio Enriquez Age: 62 Colombia
Laureano Benitez-Montano Age: 43 Colombia
Case Number 17cr3328
Luis Alberto Corado-Polanco Age: 39 Guatemala
Juan Jose Valiente-Tomes Age: 49 Guatemala
Jorge Ortiz-Salazar Age: 42 Colombia
SUMMARY OF CHARGES
Possession with Intent to Distribute Cocaine Onboard a Vessel Subject to the Jurisdiction of the United States – Title 46, U.S.C., Section 70503
Maximum Penalty: Life in prison and $10,000,000 fine
Conspiracy to Distribute Cocaine Intended for Unlawful Importation – Title 21, U.S.C., Sections 959, 960, and 963
Maximum penalty: Life in prison and $10,000,000 fine
AGENCY
Drug Enforcement Administration
United States Coast Guard
Convicted Alien Smuggler Sentenced to 97 Months in Custody for Event that Left Two People DeadRead the Press Release
Assistant U. S. Attorney Benjamin A. Bish (619) 546-8662
NEWS RELEASE SUMMARY – July 17, 2018
SAN DIEGO – Jorge Luis Martinez-Hernandez, a Mexican citizen with a prior alien smuggling conviction, was sentenced in federal court yesterday to more than eight years in prison for his role in a smuggling incident that left two undocumented immigrants dead.
The sentence was handed down by U.S. District Court Judge Marilyn L. Huff following the defendant’s guilty plea in April to eight counts of Bringing in Certain Aliens resulting in Death and Bringing in Certain Aliens for Financial Gain, all in violation of Title 8, United States Code, Section 1324.
“Smugglers see customers as dollar signs and have no concern for their safety and well-being,” said U.S. Attorney Adam Braverman. “This office is committed to prosecuting smugglers who exploit immigrants for financial gain.”
“This should give us all pause when thinking about the blatant disregard for human life,” said San Diego Sector Chief Patrol Agent Rodney Scott. “To tell people to cross a freeway in complete darkness with cars driving at 65-plus miles per hour is unconscionable. The men and women of the U.S. Border Patrol remain vigilant in our pursuit of these smugglers and the international criminal organizations they work for.”
“Martinez-Hernandez’s actions in this event led to the unfortunate deaths of two people. His conviction and sentence brings some closure to an unnecessary tragedy that involved exploiting individuals for his financial gain,” said David Shaw, Special Agent in Charge for Homeland Security Investigations (HSI) in San Diego. “This tragic case has once again heightened HSI’s commitment to enforce all criminal immigration law and we will continue our efforts to investigate and ultimately dismantle the transnational alien smuggling organizations.”
According to his plea agreement, on September 17, 2017, at approximately 1:45 a.m., Martinez-Hernandez guided eight undocumented individuals - five adults and three minors - through a hole in a wall near the San Ysidro, California Port of Entry. Martinez-Hernandez and the group of eight entered a vehicle waiting on the U.S. side of the border near the hole, which was next to the southbound side of the Interstate 5. Martinez-Hernandez took control as the driver and then made a U-turn into the oncoming traffic in the southbound lanes of the interstate. He then drove north in the southbound lanes against traffic. Customs and Border Protection Officers began pursuit of the vehicle, driving north in the northbound lanes to track Martinez-Hernandez’s movements on the southbound side of the interstate. Martinez-Hernandez then stopped the vehicle on the side of the interstate and directed the eight to follow him to another area. He admitted to investigators that he did this because his coconspirators planned to pick the group up in other vehicles to take them farther into the U.S. illegally.
The investigation revealed that Martinez-Hernandez led the group of eight on foot across the northbound lanes of the Interstate 5, over the dividing fence, and across the southbound lanes. A vehicle travelling south at or near highway speed in the southbound lanes struck two of the undocumented individuals in the group as they ran across the interstate. The collision occurred near the Camino De La Plaza exit on Interstate 5. The two were pronounced dead at the scene. Martinez-Hernandez and the six remaining undocumented individuals were later apprehended when they were found hiding near the southbound side of the interstate and the Camino De La Plaza exit.
Martinez-Hernandez admitted to guiding the eight during this event. He further admitted that the eight undocumented individuals, including one who was from China, agreed to pay between $7,000 to $13,000 to be smuggled into the U.S. Martinez-Hernandez admitted that he was going to receive $1,000 per undocumented individual that he successfully smuggled into the U.S. illegally.
DEFENDANTS Case Number: 17cr3288-H
Jorge Luis Martinez-Hernandez Age: 33 Tijuana, B.C., Mexico
SUMMARY OF CHARGES
2 Counts - Bringing in Certain Aliens Resulting in Death – Title 8, U.S.C., Section 1324(a)(1)(A)(i) and (a)(1)(B)(iv), a Class A felony
6 Counts - Bringing in Certain Aliens for Financial Gain and Aiding and Abetting – Title 8, U.S.C., Section 1324(a)(2)(B)(ii) and Title 18, U.S.C., Section 2, a Class A felony
AGENCIES
Homeland Security Investigations
U.S. Customs and Border Protection
U.S. Border Patrol
California Highway Patrol
San Diego Fire Department
San Diego County Medical Examiner’s Office
Youth are Smuggling Drugs on Behalf of Cartels; Law Enforcers Launch Education CampaignRead the Press Release
Assistant U. S. Attorney Cindy Cipriani (619) 546-9608
NEWS RELEASE SUMMARY – July 16, 2018
SAN DIEGO – Federal and state law enforcement officials have launched a billboard campaign in San Diego and Imperial counties to prevent middle and high school students from acting as drug mules for cartels.
The billboards, located in San Diego and Imperial counties as well as one in Mexico, feature stark warnings to minors that smuggling drugs could cost them their freedom and their futures and is not worth the few hundred dollars they are being offered. They were unveiled today at two locations in San Ysidro and one in Tijuana.
Also today, a San Diego teenager pleaded guilty in federal court to charges that he recruited classmates to smuggle methamphetamine and fentanyl. Phillip Junior Webb was a senior at Castle Park High School in Chula Vista when he committed the drug offenses.
The number of incidents in which drugs were seized from minors at ports of entry in the Southern District of California has increased significantly in recent years. There was a 153 percent spike in drug seizures from minors from FY 2016 to FY 2017, from 39 to 99. With four months to go in FY 2018, the pace is set to match FY 2017, with a troubling new twist: Minors are smuggling ultra-deadly fentanyl, which has not happened in prior years.
“As law enforcers, and as parents, we are tremendously concerned about our youth being exploited by drug cartels,” said U.S. Attorney Adam Braverman. “Juveniles need to know that consequences are real and dramatic. Ultimately, it is your choice, and the decision you make now will follow you the rest of your life. Don’t sell your future for a few hundred dollars.”
“We live in a beautiful county which includes a world class city and one of the busiest land border crossings in the world, the San Ysidro Point of Entry. Thousands travel by foot and car to conduct business, visit friends and family, shop, eat, and enjoy life each day. Our enemies use this same border crossing to entice our children to bring death and destruction to the United States,” said DEA Special Agent in Charge Karen Flowers. “Parents, teachers, students - all of us need to know that drug smuggling fuels destruction of lives and the violence on both sides of the border. It is not okay. It is not sexy. It is not easy money. It is not worth losing your life, your dreams, your potential.”
“Smuggling narcotics is a dangerous proposition especially a lethal drug such as fentanyl,” said Pete Flores, director of field operations for CBP in San Diego. “Juveniles need to understand there that no matter what they have been told, there are consequences for smuggling narcotics, not to mention the dangers of working with transnational criminal organizations.”
“In less than a year, at least 70 juveniles were arrested at the Port of Entry trying to smuggle methamphetamine, cocaine, heroin and deadly Fentanyl into San Diego County,” District Attorney Summer Stephan said. “These are young people who are being used by dangerous, organized criminals and who do not fully understand the danger they are putting themselves in and the harm and devastation to potential drug users.”
“Homeland Security Investigations (HSI) is committed to investigating, dismantling, and referring for prosecution cases in which Transnational Criminal Organizations utilize juveniles to smuggle contraband for financial gain,” said James Plitt, Deputy Special Agent in Charge for HSI in San Diego. “These dangerous organizations exploit young teenagers who do not fully understand the negative consequences that this will have in their lives, those of their family and future goals. Since 2009, HSI has partnered with CBP and other law enforcement agencies and prosecutors to educate the juveniles, parents, and community members of the dangerous people that are recruiting and targeting these juveniles. This outreach effort will remain a priority as long as these children continue to be exploited.”
DEA reports that during a one-week span in March of this year, five minors were arrested at the San Ysidro Port of Entry attempting to smuggle significant quantities of fentanyl into the country. Other recent incidents involved a female teen who was driving a vehicle with fentanyl and cocaine concealed within the car. And on four different occasions, teenage boys attempted to enter through pedestrian lanes at the San Ysidro Port of Entry with over 2 kilograms each of fentanyl strapped to their bodies, under their clothes. According to DEA, 2 kilograms of fentanyl equals 2 million milligrams of fentanyl, and it would only take 2 to 3 milligrams to cause respiratory depression and possible death.
Drug traffickers take advantage of the naïve nature of juveniles and lure them with incentives like money and electronics in exchange for illegally crossing drugs into the U.S. Many of these children are recruited at the high schools they attend and some are being recruited by classmates.
Parents, teachers, caretakers, school administrators and children need to be aware that recruiting efforts of traffickers pose a constant threat. They have been known to recruit children at schools, but also may approach them at after-school functions, camps, libraries, on public transportation, via social media outlets, and over electronic communications like gaming consoles, text messages or chat rooms. Recruiters could be other children, parents, familiar adults or complete strangers.
In response to the trend, federal, state and local law enforcement have teamed up to educate the region’s youth about the consequences through school programs and billboards, including two billboards in San Diego County, one on the Mexican side of the border, several in Imperial County and many more are under consideration for Arizona, Texas and New Mexico. They warn about the dangers and collateral consequences of drug smuggling. These billboards were funded by the Drug Enforcement Administration and the High Intensity Drug Trafficking Area program, a drug-prohibition enforcement program run by the United States Office of National Drug Control Policy.
Prosecutors and agents are holding educational programs in South Bay high schools so that kids are aware of the extreme dangers of handling dangerous drugs like fentanyl, of working with violent cartels, and the fallout from being arrested and charged with related crimes.
Anyone with concerns about potential recruiting is encouraged to call the local DEA office at 858-616-4100 or submit a tip to the Drug Enforcement Administration via its website, www.DEA.gov.
In federal court today, Webb admitted that he arranged for juvenile couriers to smuggle a total of 6.18 kilograms of methamphetamine and 1.2 kilograms of fentanyl into the United States from Mexico, for delivery in San Diego, on four occasions: July 12, 2017; September 19, 2017; September 27, 2017 and October 23, 2017. On each of these occasions, the juveniles had drugs strapped on their bodies as they attempted to enter the United States at the San Ysidro or Otay Mesa Ports of Entry.
He also admitted that on May 5, 2018, he knowingly drove two undocumented immigrants into the United States at the San Ysidro Port of Entry in the trunk of his car for financial gain.
Webb is scheduled to be sentenced by U.S. District Judge Michael M. Anello on October 9, 2018 at 10:15 a.m.
DEFENDANT Case No. 18MJ2229
Phillip Junior Webb Age: 18 Tijuana, Mexico
CHARGES
Count 1 – Conspiracy to Distribute Methamphetamine (21 U.S.C. 841 & 846)
Maximum Penalty: Ten years minimum to life in custody; $1 million fine
Count 2 - Bringing in Undocumented Aliens for Financial Gain (8 U.S.C. 1324)
Maximum Penatly: Three years mandatory minimum to 20 years in custody; $250,000 fine
AGENCY
Homeland Security Investigations
Drug Enforcement Administration
Customs & Border Protection
Homeland Security Investigations
San Diego County Sheriff’s Department
Mexican National Sentenced to Prison for Impersonating American Citizen and Stealing Government Benefits for DecadesRead the Press Release
Special Assistant U.S. Attorney Jeffrey D. Hill (619) 546-7924 and Assistant U.S. Attorney Anne Perry (619) 546-7964
NEWS RELEASE SUMMARY – July 13, 2018
SAN DIEGO – Andres Avelino Anduaga was sentenced today to 37 months in federal prison for stealing over $350,000 in government benefits from federal, state and local agencies while impersonating an American citizen for over 30 years. Anduaga was also ordered to repay $360,908.85 in restitution to the Social Security Administration, the California Department of Health Care Services and the County of San Diego.
In 1980, Anduaga used a birth certificate belonging to a United States citizen to obtain a California Driver’s License and a Social Security card. Already a convicted felon, Anduaga used his new identity to commit a variety of crimes over the next 22 years.
As he admitted in his plea agreement, Anduaga used that stolen identity to apply for disability benefits from the Social Security Administration in 1989. Through 2016, he received almost $250,000 in Social Security benefits that he was not entitled to receive. As a direct result, Anduaga also received Medi-Cal health benefits that he should not have been eligible to receive, and caused a loss of over $100,000 to the State of California. Even after his Social Security was terminated in 2016, Anduaga signed up for CalFresh/Supplemental Nutrition (SNAP) benefits and continued to receive those benefits right up until his arrest in November 2017.
In addition to his Theft of Public Property, U.S. District Judge John A. Houston also sentenced Anduaga for being a Removed Alien Found in the United States. Anduaga admitted that, despite twice being deported as “Jose Reyes” in 1994 and 2000, he was able to return and travel freely between the United States and Mexico using a United States passport that he obtained using the same stolen identity he used to defraud public assistance programs.
“The theft of Social Security benefits is a direct attack on the most vulnerable and needy members of our community,” said U.S. Attorney Adam L. Braverman. “Every dollar stolen through this kind of fraud reduces the funds available to our retirees and other worthy beneficiaries.”
“The SSA-OIG is steadfast in its determination to combat Social Security fraud, and relies heavily on the cooperation of both the Department of Justice and the Social Security Administration to meet this goal. Preserving the integrity of SSA’s programs, through criminal prosecution when necessary, is crucial to the future of SSA’s beneficiaries and America’s taxpayers. I’m pleased to see charges brought in this case and grateful that the DOJ shares our determination to ensure the integrity of SSA’s programs,” said Robb Stickley, Special Agent in Charge of the Inspector General’s Office of Investigations in San Francisco.
“It is this kind of malicious theft of identity and people’s hard-earned benefits which highlights the need for vigilance and thoroughness in all encounters which Border Patrol Agents undertake to thwart this kind of illegal activity,” said Chief Patrol Agent Rodney Scott. “This successful collaboration between the Social Security Administration, the U.S. Border Patrol and the Department of Justice highlights the need for, and importance of, cooperation among law enforcement partners.”
DEFENDANT Case Number 17-cr-4461-JAH
Andres Avelino Anduaga Tijuana, Mexico
SUMMARY OF CHARGES
Theft of Public Property – Title 18, U.S.C., Section 641
Maximum penalty: 10 years’ imprisonment, $721,817.70 fine, restitution
Removed Alien Found in United States – Title 8, U.S.C. Section 1326(a)
Maximum penalty: 2 years’ imprisonment, $250,000 fine
AGENCIES
Social Security Administration’s Office of the Inspector General
United States Border Patrol
United States Customs and Border Protection
California Department of Health Care Services
California Department of Motor Vehicles Investigations Division
Bureau of Public Assistance Investigations, County of San Diego
Eight Defendants Indicted for Stock Fraud-Related OffensesRead the Press Release
Assistant U. S. Attorneys Aaron P. Arnzen (619) 546-8384 and Andrew J. Galvin (619) 546-9721
NEWS RELEASE SUMMARY – July 13, 2018
SAN DIEGO – Eight people, including a San Diego lawyer, were indicted by a federal grand jury for participating in three unrelated securities fraud crimes.
Arrests by the FBI began on July 5, 2018, and culminated July 11, 2018 when Luke Zouvas of Point Loma was taken into custody. Zouvas was charged with laundering money he believed to be proceeds of stock fraud schemes. According to court records, Zouvas was contacted by a former business associate for whom he had previously laundered stock fraud proceeds. In exchange for a money laundering fee, Zouvas agreed to pick up where the two left off years ago by funneling over $500,000 through his law firm’s client trust account.
In another indictment, Gannon Giguiere of Laguna Beach, California, was charged with manipulating the market for the stock of Eco Science Solutions, Inc. and Kelvin Medical, Inc. According to court records, Giguiere conspired to pump up the price and volume of these stocks through manipulative trading and/or a stock promotion website designed to get innocent investors interested in buying the stock. After the stock prices rose and he dumped the shares, Giguiere pocketed more than $10 million in fraudulent proceeds from these schemes. The same indictment charges Oliver Lindsay of Grand Cayman with participating in the Kelvin Medical scheme, including by trading the conspirators’ stock through an offshore brokerage account in the Cayman Islands.
Another indictment charges a group of five individuals with manipulating the market for the stock of Arias Intel, Corp. According to court records, this scheme included efforts to artificially inflate the price and volume of Arias Intel’s stock by controlling the majority of the company’s free-trading shares through concealed offshore accounts, coordinating press releases with expected stock promotions, and the use of high-pressure call rooms targeting innocent investors. Each of the five defendants – Andrew Hackett of Toronto, Canada; Vikram Khanna of Porter Ranch, California; Kuldeep Sidhu of Vancouver, British Columbia; Annetta Budhu of New York, New York; and Kevin Gillespie of Tampa, Florida – spoke on recorded calls about various aspects of their scheme.
“These fraud schemes victimize all investors and compromise the integrity of our financial markets,” said U.S. Attorney Adam Braverman. “We are committed to holding accountable those who try to manipulate the system for their own profit.”
“For the United States to maintain its vibrant economy, the American people must have trust and confidence in our markets,” said FBI Special Agent in Charge John Brown. “The FBI will continue to aggressively pursue these complex and coordinated fraud schemes in order to protect the American people and our economy.”
Giguiere has been released on a $2 million dollar bond. Sidhu has been detained pending trial. Motions to detain Lindsay and Hackett will be heard on July 17 and 19, 2018, respectively. Budhu and Gillespie made their first appearances in the Southern District of California on July 13, 2018, and Khanna will make his first appearance on July 27, 2018.
The Securities and Exchange Commission has also taken action against Giguiere, Lindsay, Gillespie, Budhu and Hackett.
DEFENDANTS
Case Number 18cr3071-WQH
Gannon Giguiere Age: 46 Laguna Beach, CA
Oliver Lindsay Age: 44 Georgetown, Grand Cayman
SUMMARY OF CHARGES
Conspiracy – Title 18, U.S.C., Section 371
Securities Fraud – Title 15 U.S.C., Sections 78j(b), 78ff; and 17 C.F.R., Section 240.10b-5
Maximum penalty: 20 years’ imprisonment and $5,000,000 fine
Case Number 18cr3072-BTM
Andrew Hackett Age: 29 Toronto, Canada
Vikram Khanna Age: 53 Porter Ranch, CA
Kuldeep Sidhu Age: 47 British Columbia, Canada
Annetta Budhu Age: 53 New York, NY
Kevin Gillespie Age: 49 Tampa, Florida
SUMMARY OF CHARGES
Conspiracy – Title 18, U.S.C., Section 371
Securities Fraud – Title 15 U.S.C., Sections 78j(b), 78ff; and 17 C.F.R., Section 240.10b-5
Maximum penalty: 20 years’ imprisonment and $5,000,000 fine
Case Number 18cr3070-JLS
Luke Zouvas Age: 47 San Diego, CA
SUMMARY OF CHARGES
Money Laundering – Title 18 U.S.C., Section 1956(a)(3)(B)
Maximum penalty: 20 years’ imprisonment and fine equal to value of the funds involved in the transaction.
AGENCY
FBI (lead agency)
Securities and Exchange Commission
Criminal Prosecution Assistance Group, Financial Industry Regulatory Authority
Financial Industry Regulatory Authority
*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 Border Patrol Agent Pleads Guilty to Conspiracy to Distribute 4ANPP Used in the Manufacturing of FentanylRead the Press Release
Assistant U. S. Attorney Sherri Hobson (619) 961-0287
NEWS RELEASE SUMMARY – July 12, 2018
SAN DIEGO – Former U.S. Border Patrol Agent Cesar Daleo pleaded guilty in federal court today to drug charges, admitting that he conspired to distribute the precursor chemical known as “4ANPP,” the primary ingredient for manufacturing deadly fentanyl.
Daleo was arrested on August 29, 2017, while trying to drive into Mexico with a package that he believed contained 4ANPP (4-anilino-N-phenethyl-4-piperidine), a Schedule II Controlled Substance. According to court records, Daleo had just picked up the package, shipped from China, at a post office box in San Ysidro. He had previously picked up 13 other packages from the same post office box.
Unbeknownst to Daleo, a few weeks earlier on August 11, 2017, a U.S. Customs and Border Protection agent stationed at Los Angeles International Airport had intercepted a package from China and discovered it contained 4ANPP. Homeland Security Investigations agents then replaced the 4ANPP with a harmless substance and waited for someone to pick it up at its destination in San Ysidro, California. When Daleo did so, and then headed to Mexico, he was intercepted by law enforcement before crossing the border. Daleo admitted today in court that there was an agreement to distribute 4ANPP and that he joined the agreement knowing its purpose and intending to help accomplish that purpose.
Daleo admitted in his plea agreement that, starting at least in December of 2016, he picked up multiple parcels at the mail box facility in San Ysidro. After picking up these parcels, which were shipped from China, Daleo was paid to transport the parcels to Mexico.
He also admitted that some of the parcels contained a substance that could be used to manufacture more illegal drugs. One kilogram of precursor 4ANPP was seized that day - enough to manufacture approximately 25 kilograms of fentanyl in a Mexican drug lab.
Daleo is scheduled to be sentenced before U.S. District Judge Gonzalo Curiel on September 28, 2018, at 8:30 a.m.
Daleo also faces federal charges in a second case, 18cr2968. He was indicted by a federal grand jury in April for conspiring to illegally smuggle sea cucumbers and sea horses protected by the Convention on International Trade in Endangered Species into the United States from Mexico.” The next hearing is set for July 27, 2018, at 11:30 am.
DEFENDANT Case Number 17-cr-3041
Cesar Daleo Age: 47 San Ysidro
SUMMARY OF CHARGES
Conspiracy to Distribute Controlled Substances, 4ANPP – Title 21, U.S.C., Section 841 and 846
Maximum penalty: Twenty years in prison and $500,000 fine
AGENCY
Homeland Security Investigations
U.S. Customs and Border Protection
U.S. Postal Inspection Service
U.S. Drug Enforcement Administration
U.S. Fish and Wildlife Service
Disbarred Attorney Admits Defrauding Former Clients and Law Firm InvestorsRead the Press Release
NEWS RELEASE SUMMARY – July 3, 2018
SAN DIEGO – Clayton Marlow Anderson, Jr., a former attorney based in La Mesa, California before his disbarment in 2015, pled guilty today to defrauding investors and clients of over a million dollars. Anderson also admitted to money laundering in connection with his fraud scheme, known alternatively as the “Clayton M. Anderson Monthly Income Plan”, “Anderson Plan”, or “A-Plan.”
During a hearing this afternoon before U.S. Magistrate Judge Karen S. Crawford, Anderson acknowledged that he created “A-Plan” to solicit loans to finance the costs and fees related to construction defect lawsuits brought by his law firm. Anderson acknowledged that from 2005 until 2014, he solicited unsecured loans from six individuals and paid them high rates of interest between 8% and 13% each year.
As part of his plea, Anderson admitted that in 2010, owners of the Jefferson Pointe Professional Corporation (“JPPC”) hired Anderson to represent them in a construction defect lawsuit against the builders of their office park in Murrieta, California. Anderson eventually negotiated a $1.82 million settlement for JPPC in October 2012. Instead of paying his clients their rightful share of the legal settlement, however, Anderson sent them a letter on behalf of “A-Plan Investment Services, Inc.” promising JPPC a 13% annual return on their “investment.” At today’s hearing, Anderson admitted that his letter contained multiple false claims, including that A-Plan had over $1 million under management and that A-Plan was the beneficiary of a $4.4 million insurance policy on his life. Anderson admitted his clients invested $800,000 of their legal settlement into “A-Plan” in reliance on his false claims, and that he engaged in other fraudulent conduct toward his clients.
Anderson specifically admitted that on February 19, 2013, he made a $182,549.69 bank transfer to conceal that he had already taken his client’s settlement money out of his client trust account without his client’s knowledge or consent, and to hide from his clients the precarious financial situation of both his law firm and “A-Plan.” Anderson also admitted that he engaged in a money laundering transaction on January 2, 2013, when he transferred over $30,000 in money derived from his fraud scheme into a retirement account under his control.
In addition to these specific transactions alleged in the Information filed against him, Anderson admitted that his fraud caused his clients to lose over $600,000, and that the six other A-Plan participants lost over $700,000 in money loaned to him. Anderson also admitted misrepresenting and concealing a variety of information from the six other A-Plan participants, including his law firm’s bankruptcy, his decision to forfeit all outstanding legal settlement money to the bankruptcy trustee, and his suspension and eventual disbarment by the California State Bar in January 2015. Anderson admitted that if A-Plan’s participants had been aware of those facts, they would not have continued to participate in A-Plan, and that his misrepresentations and omissions prevented them from recouping their investments or at the very least mitigating their losses – totaling $1,362,257.50.
“Clayton Anderson put his own financial interests above those of his clients, to whom he owed both legal and ethical duties,” said U.S. Attorney Adam L. Braverman. “This prosecution demonstrates the commitment of the United States Attorney’s Office to protecting the rights of investors – especially those investing with their own attorney – to candid, truthful information.”
“The FBI will investigate and bring those to justice who breach the attorney-client trust relationship by committing fraud and deceit,” commented FBI Special Agent in Charge John Brown. “Today, the Defendant Clayton Anderson, Jr., a former attorney, admitted to his A-Plan fraud scheme and will face justice for those actions.”
“As an attorney, Anderson had a fiduciary responsibility to safeguard his client’s money. Anderson violated his ethical duty by treating his clients’ trust account as a piggy bank,” said R. Damon Rowe, Special Agent in Charge of IRS Criminal Investigation. “IRS Criminal Investigation will continue to protect the integrity of attorney client trust accounts, and ensure that attorneys who do not follow the duties imposed on them by law are held accountable.”
As a part of his plea agreement, Anderson agreed to pay over $1.5 million in restitution to the victims of his crimes. Anderson faces up to 30 years in federal prison and a fine of up to $2,974,515.00 at his sentencing hearing before the Hon. Cathy Ann Bencivengo on September 28, 2018.
DEFENDANT Case Number 18-cr-3075-CAB
Clayton Marlow Anderson, Jr. Mira Loma, CA.
SUMMARY OF CHARGES
Wire Fraud – Title 18, U.S.C., Section 1343
Maximum penalty: 20 years’ imprisonment, $2,724,515 fine, restitution
Money Laundering – Title 18, U.S.C., Section 1957
Maximum penalty: 10 years’ imprisonment, $250,000 fine, restitution
AGENCIES
Federal Bureau of Investigation
Internal Revenue Service, Criminal Investigation
National Health Care Fraud Takedown Results in Charges Against 601 Individuals Responsible for More than $2 Billion in Fraud Losses; Seven Charged in San DiegoRead the Press Release
Assistant U. S. Attorney Valerie Chu (619) 546-6750
NEWS RELEASE SUMMARY – June 28, 2018
SAN DIEGO – Seven defendants, including a physician and two chiropractors, were charged in San Diego as part of the largest healthcare fraud enforcement action in Department of Justice history.
The national takedown involved 601 charged defendants across 58 federal districts, including 165 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving more than $2 billion in false billings. Of those charged, 162 defendants (including 76 doctors) were charged for their roles in prescribing and distributing opioids and other dangerous narcotics.
In San Diego, the cases include:
- Marco Antonio Chavez, a licensed medical doctor specializing in psychiatry, was charged with 30 counts of health care fraud in connection with over $928,000 in bills he submitted to TRICARE for services he never provided. He was also charged with five counts of aggravated identity theft and one count of obstruction of a federal audit. According to the indictment, he misappropriated the personal identifying information of TRICARE beneficiaries to submit fraudulent bills to TRICARE, and then lied during the course of a subsequent federal audit. Chavez allegedly used the proceeds of his scheme to purchase, among other luxury items, a 2016 Jaguar F-type and tens of thousands of dollars in David Yurman jewelry. On June 26, 2018, agents executed a search warrant at Chavez’s residence, and seized the Jaguar. The United States is seeking to forfeit all proceeds of Chavez’s illegal activity.
- Four defendants, including two chiropractors, a physical therapist and an acupuncturist, were charged with conspiracy to commit health care fraud and honest services fraud and to pay unlawful kickbacks stemming from their operation of R.I.S.E. Medical Center. According to the indictment, R.I.S.E. operated several “Wellness Centers” in San Diego County, including Bonita and Oceanside, and offering a range of services including physical therapy, diagnostic tests, massages, chiropractic treatments, and acupuncture. Since TRICARE and Medicare do not cover most of those benefits, the defendants misrepresented acupuncture, chiropractic, and massage services as “physical therapy,” and billed TRICARE and Medicare as if “physical therapy” had been provided. Joserodel Zavala Candelario, a chiropractor and owner of R.I.S.E., imposed quotas for non-reimbursable services and treatments, allegedly telling staff that they were expected to provide a certain number of diagnostic tests, “no matter what”; to “grab patients in lobbies to put into provider schedules”; and to ply patients with complimentary treatments so R.I.S.E. could continue to fraudulently bill TRICARE and Medicare. According to the indictment, the defendants fraudulently billed over $23 million to TRICARE, and over $9 million to Medicare.
- In addition, Candelario was also charged with paying a patient recruiter over $18,000 to refer TRICARE patients to the R.I.S.E. clinic. The recruiter, Mariam Reyes, was charged separately with conspiring to solicit and receive kickbacks.
- In a separate indictment, Candelario was charged with participating in a scheme to defraud California Workers’ Compensation insurers and R.I.S.E. patients by receiving illegal kickbacks and bribes to refer patients to certain providers. According to the indictment, Candelario paid kickbacks to his co-schemers through a front company in exchange for referrals of Workers’ Compensation patients, and then concealed these kickbacks through sham “marketing” agreements. One of Candelario’s co-schemers, Boris Dadiomov, was charged separately for his role in the fraudulent conspiracy. As a result of their unlawful cross-referral kickback scheme, Candelario and the other schemers received over 500 illegal patient referrals and submitted over $6.6 million in false billings to insurance companies.
“With healthcare costs skyrocketing, and with patients’ well being on the line, we cannot afford the financial and physical costs of fraud,” said U.S. Attorney Adam Braverman. “Doctors are especially culpable as they are violating the sacred trust they should have with their patients. We are working hard every day to protect patients, taxpayers, ratepayers who are being exploited by those members of the medical community who prefer purchasing power over principle.”
“The FBI is fully committed to protecting our nation’s health care programs that have an impact on San Diegans,” said FBI Special Agent in Charge John Brown. “As evidenced by the broad range of health care fraud cases announced today, the FBI and our partners have shown that we will uncover fraud affecting our public health insurance programs whether committed by a mental health professional, a chiropractor, physical therapist, acupuncturist, physician, ancillary medical service provider or a medical marketer….the health and safety of our citizens depend on it.”
“Public health insurance programs, such as Medicare and TRICARE, are not a personal pocketbook for criminals seeking to exploit government programs designed to help those who need these plans the most,” stated R. Damon Rowe, Special Agent in Charge of IRS Criminal Investigation’s Los Angeles Field Office. “Taxpayers rightly expect individuals working in the healthcare industry that receive payments from taxpayer-funded programs to scrupulously follow the rules. IRS Criminal Investigation will continue to protect the integrity of public health insurance programs and ensure that doctors, chiropractors, and medical service providers who profit from these illicit schemes are held accountable.”
The national takedown was announced today by Attorney General Jeff Sessions. The cases aggressively target schemes billing Medicare, Medicaid, TRICARE (a health insurance program for members and veterans of the armed forces and their families), and private insurance companies for medically unnecessary prescription drugs and compounded medications that often were never even purchased and/or distributed to beneficiaries. The charges also involve individuals contributing to the opioid epidemic, with a particular focus on medical professionals involved in the unlawful distribution of opioids and other prescription narcotics, a particular focus for the Department. According to the CDC, approximately 115 Americans die every day of an opioid-related overdose.
According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare, Medicaid, TRICARE, and private insurance companies for treatments that were medically unnecessary and often never provided. In many cases, patient recruiters, beneficiaries and other co-conspirators were allegedly paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare. Collectively, the doctors, nurses, licensed medical professionals, health care company owners and others charged are accused of submitting a total of over $2 billion in fraudulent billings. The number of medical professionals charged is particularly significant, because virtually every health care fraud scheme requires a corrupt medical professional to be involved in order for Medicare or Medicaid to pay the fraudulent claims. Aggressively pursuing corrupt medical professionals not only has a deterrent effect on other medical professionals, but also ensures that their licenses can no longer be used to bilk the system.
The Medicare Fraud Strike Force operations are part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in 10 locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,700 defendants who collectively have falsely billed the Medicare program for over $14 billion.
DEFENDANT Case Number 18cr2930
Marco Antonio Chavez
SUMMARY OF CHARGES
(Counts 1-30)
Health Care Fraud – Title 18, United States Code, Section 1347
Maximum Penalty: Twenty years’ imprisonment, $250,00 fine, restitution, forfeiture
(Counts 31-36)
Aggravated Identity Theft – Title 18, U.S.C., Section 1028A
Maximum Penalty: Mandatory two years’ imprisonment, consecutive (per count)
(Count 37)
Obstruction of Federal Audit – Title 18, U.S.C., Section 1516
Maximum Penalty: Five years’ imprisonment, $250,000 fine
DEFENDANT Case Number 18cr3015
Boris Dadiomov
SUMMARY OF CHARGES
Conspiracy to Commit Honest Services Mail Fraud and Healthcare Fraud – Title 18, U.S.C., Section 1349
Maximum penalty: Twenty years’ imprisonment and $250,000 fine
DEFENDANTS Case Number 18cr3057
Joserodel Zavala Candelario (1)
James Ward, Jr. (2)
Robert Cohen (3)
Antony Y. Lim (4)
SUMMARY OF CHARGES
Conspiracy to Commit Offenses– Title 18, U.S.C., Section 371
Maximum Penalty: Five years’ imprisonment, $250,000 fine, restitution, forfeiture
Honest Services Mail Fraud – Title 18, U.S.C., Section 1341, 1346
Maximum penalty: Twenty years’ imprisonment and $250,000 fine, restitution, forfeiture
Health Care Fraud – Title 18, U.S.C., Section 1347
Maximum penalty: Twenty years’ imprisonment and $250,000 fine
Honest Services Wire Fraud - Title 18, U.S.C., Section 1341, 1346
Maximum penalty: Twenty years’ imprisonment and $250,000 fine
DEFENDANT Case Number 18cr3016
Meriam Reyes
SUMMARY OF CHARGES
Conspiracy to Solicit and Receive Kickbacks – Title 18, U.S.C., Section 371
Maximum penalty: Five years’ imprisonment and $250,000 fine, restitution, forfeiture
AGENCIES
Federal Bureau of Investigation
Internal Revenue Service
Defense Criminal Investigative Service
California Department of Insurance
San Diego County District Attorney's Office
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
- Marco Antonio Chavez, a licensed medical doctor specializing in psychiatry, was charged with 30 counts of health care fraud in connection with over $928,000 in bills he submitted to TRICARE for services he never provided. He was also charged with five counts of aggravated identity theft and one count of obstruction of a federal audit. According to the indictment, he misappropriated the personal identifying information of TRICARE beneficiaries to submit fraudulent bills to TRICARE, and then lied during the course of a subsequent federal audit. Chavez allegedly used the proceeds of his scheme to purchase, among other luxury items, a 2016 Jaguar F-type and tens of thousands of dollars in David Yurman jewelry. On June 26, 2018, agents executed a search warrant at Chavez’s residence, and seized the Jaguar. The United States is seeking to forfeit all proceeds of Chavez’s illegal activity.
Twenty Defendants Indicted for Heroin, Methamphetamine and Cocaine TraffickingRead the Press Release
Assistant U. S. Attorney A. Dale Blankenship (619) 546-6705
NEWS RELEASE SUMMARY – June 27, 2018
SAN DIEGO – Two federal indictments unsealed in San Diego today charge 20 defendants with heroin, methamphetamine, cocaine, and marijuana trafficking.
In a two-day sweep, members of the Homeland Security Investigations Gangs & Weapons Group, plus other law enforcement agencies around the county made numerous arrests and searched two locations in Spring Valley and Lemon Grove.
The yearlong investigation involved months of federal wiretaps, numerous undercover drug and gun buys and extensive surveillance. Many of the defendants are associates of criminal street gangs such as Skyline Piru, Florencia 13, Ysidro, Shelltown, Logan Heights Red Steps, Vario and Chula Vista. The investigation revealed that some of these defendants have ties to Mexican Mafia and Mexican Drug Cartels.
As of today at noon, sixteen of the twenty defendants are either in federal or state custody. Authorities are continuing to search for two defendants. Six of the defendants were arraigned before U.S. Magistrate Clinton Averitte yesterday.
“Drugs are destroying lives and families and bringing violence to our communities, and we are more committed than ever to prosecuting these cases,” said U.S. Attorney Adam Braverman. “Gangs are most often the distributors of these deadly poisons, and we have a special resolve to go after them.”
HSI Special Agent in Charge David Shaw said, “Homeland Security Investigations remains committed in keeping our communities safe from drug trafficking and associated dangerous criminal activity,” said David Shaw, Special Agent in Charge for HSI in San Diego. “The arrests over the last two days demonstrate the unwavering dedication between HSI and our law enforcement partners, to address these dangerous threats facing our community.”
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.
The United States is represented in court by Assistant U.S. Attorney A. Dale Blankenship.
DEFENDANT Criminal Case No: 18CR2278-CAB
Name
Age
Hometown
JOSE VARGAS-MEZA (1)
25
San Diego
JESSE RAMIREZ (2),
aka “Junior,”
27
Chula Vista
MARTIN VILLAFANA (3),
Aka “Gato,”
25
San Diego
SERGIO GARCIA (4),
aka “Checko,”
27
San Diego
JAMAAR RASHAAD CODRINGTON (5),
aka “Buzz,”
38
San Diego
CHRISTIAN RAMIREZ (6)
28
Chula Vista
JENNIFER LIEGH ZAYAS (7)
37
El Cajon
24
San Diego
PRENTICE TAULAUO TEO (9)
46
San Diego
RICKY RICARDO SIMMONS (10),
aka “Daz,”
38
Spring Valley
JERMAINE SAYLES (11)
38
San Diego
LARON WALLACE (12),
aka “Skinny,”
38
San Diego
ALEXANDER AGENCIA SANTOS (13),
aka “Lex,
35
San Diego
LAMONT CHARLES YOUNG (14)
20
San Diego
TARA LYNN JONES (15)
34
San Diego
RICO WELCH (16)
46
San Diego
SUMMARY OF CHARGES
Conspiracy to Distribute Cocaine (Title 21, U.S.C., Secs. 841(a)(1), 846);
Conspiracy to Distribute Methamphetamine (Title 21, U.S.C., Secs. 841(a)(1), 846);
Conspiracy to Distribute Marijuana (Title 21, U.S.C., Secs. 841(a)(1), 846);
Possession of Methamphetamine with Intent to Distribute (Title 21, U.S.C, Secs. 841(a)(1)).
Maximum Penalties: Maximum Penalties: For cocaine and methamphetamine charges: life in prison with a mandatory minimum sentence of 10 years and a $10 million fine; for marijuana charge:40 years in prison, with a mandatory minimum sentence of 5 years and a $5 million fine.
DEFENDANTS Criminal Case No: 18CR2970-CAB
Name
Age
Hometown
VICTOR CARRASCO (1),
aka “Mico,”
54
San Diego
24
San Diego
MARIO ZUNIGA-BARRAGAN (3),
49
San Diego
CESAR AGUILAR RODRIGUEZ (4),
26
San Diego
SUMMARY OF CHARGES
Conspiracy to Distribute Methamphetamine (Title 21, U.S.C., Secs. 841(a)(1) and 846);
Conspiracy to Distribute Methamphetamine (Title 21, U.S.C., Secs. 841(a)(1) and 846);
Possession of Methamphetamine with Intent to Distribute (Title 21, U.S.C. Secs. 841(a)(1));
Possession of Heroin with Intent to Distribute (Title 21, U.S.C. Secs. 841(a)(1))..
Maximum Penalties: For cocaine and methamphetamine charges: life in prison with a mandatory minimum sentence of 10 years and a $10 million fine; for heroin charge:
20 years in prison and a $1 million fine.
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
AGENCIES
Homeland Security Investigations – Gang and Weapons Group
San Diego Police Department
San Diego County Sheriff’s Department
Chula Vista Police Department
San Diego County Probation Department
San Diego District Attorney’s Office
California Department of Corrections and Rehabilitation
San Diego Fugitive Task Force
United States Bureau of Prisons – Joint Intelligence Sharing Initiative
ICE Enforcement and Removal Operations
United States Border Patrol K-9
Customs and Border Protection Air and Marine Operations
Federal Bureau of Investigation
Lakeside Pharmacy Pays $75,000 for Failing to Keep Accurate Records of OpioidsRead the Press Release
Assistant U.S. Attorney Dylan M. Aste (619) 546-7621
NEWS RELEASE SUMMARY – June 26, 2018
SAN DIEGO – A pharmacy in Lakeside, California and its owners have paid $75,000 to resolve allegations that they failed to properly account for highly addictive and frequently abused opioids, including fentanyl.
The settlement is with Archana Corporation and its owners Rajeshbhai Zalavadiya and Ramesh Rakholia. The Archana Corporation, Zalavadiya, and Rakholia do business as Leo’s Lakeside Pharmacy.
This settlement arises from a Drug Enforcement Administration (DEA) investigation into Leo’s Lakeside Pharmacy’s opioid dispensing practices. In response to the Justice Department’s focus on combatting the opioid epidemic, the DEA has continued to conduct inspections and audits at pharmacies throughout the Southern District of California. Leo’s Lakeside Pharmacy was one of those pharmacies. Based on the DEA’s inventory audits, inspections, and other investigative activities, the United States asserts that Leo’s Lakeside Pharmacy violated the Controlled Substances Act (CSA).
The CSA applies to all registered controlled substances handlers, including pharmacies. The CSA also subjects registered pharmacies to strict requirements regarding inventory control and recordkeeping. These requirements ensure that pharmacies account for controlled substances from the time of purchase until they are dispensed to patients. The alleged violations include failure to keep accurate records associated with pharmaceutical fentanyl, oxycodone, and hydrocodone
“This settlement illustrates the United States Attorney’s Office’s continued commitment to combatting the opioid epidemic on all fronts,” said U.S. Attorney Adam Braverman. “Part of our strategy is making sure that registered opioid handlers keep accurate records of these highly addictive and extremely dangerous drugs. All pharmacies, whether large or small, will be held accountable.”
In addition to paying $75,000 in settlement to the government, Leo’s Lakeside Pharmacy has committed to implementing new inventory control procedures to assure full accountability of all controlled substances. .
“This investigation is a reminder to the pharmacy community that lax recordkeeping opens the door to the diversion of highly addictive pharmaceuticals,” states Drug Enforcement Administration San Diego Field Division Special Agent in Charge Karen Flowers. “These pills can and do make their way into the illegal distribution stream of narcotics which continue to fuel the opioid epidemic.”
Report illicit pharmaceutical activities and prescription abuse to DEA at 877-RX-Abuse (877-792-2873).
This matter was handled by Assistant U.S. Attorney Dylan M. Aste of the U.S. Attorney’s Office for the Southern District of California and the Drug Enforcement Administration.
Man Believed to be “Skinny Bandit” Arrested and ChargedRead the Press Release
Assistant U. S. Attorney Mario Peia (619) 546-9706
NEWS RELEASE SUMMARY – June 22, 2018
SAN DIEGO – Terry Lee Taylor was indicted by a federal grand jury this morning on four counts of bank robbery and attempted bank robbery. His alleged accomplice, Trinity Arvin Keara Jones, was also charged.
According to the indictment, Taylor robbed three area banks and attempted to rob a fourth between June 9, 2018 and June 18, 2018.
On June 9, 2018, Taylor is alleged to have robbed the US Bank located at 9400 Mira Mesa Boulevard in San Diego, California. During that robbery, Taylor passed a note to the teller that demanded $3,000 in $100 denominations. Taylor’s note specified that he had a gun and was willing to shoot everyone in the bank if his demands were not met. Taylor robbed the bank of approximately $1,879.
Three days later, on June 12, 2018, Taylor is alleged to have robbed the Chase Bank located at 1467 Main Street in Ramona, California. He presented a note to the bank teller which informed her that he had a gun and that he wanted all the money in the top drawer. The note again threatened the lives of everyone in the bank if his demands were not met. After receiving $4,696, Taylor fled the bank.
On June 14, 2018, Taylor allegedly attempted to rob the Bank of America located at 1407 Main Street in Ramona, California. Thanks to the diligence of a bank employee, who recognized a security photograph from the Chase Bank robbery, this robbery failed. After recognizing Taylor, a bank employee immediately pressed the alarm and called 911. Taylor, who appeared nervous, fled the bank without money.On June 18, 2018, Taylor allegedly robbed the US Bank located at 12265 Scripps Poway Parkway in Poway with the assistance of Jones. Jones scouted the bank by entering the bank and speaking with a teller. Jones then left the bank, and Taylor entered the bank. Taylor presented a note to the bank teller. The note threatened deadly force and demanded money. Taylor then fled with $2,295. Jones allegedly drove the getaway vehicle with Taylor in the passenger seat.
Subsequent investigation identified Taylor as the robber. He was arrested on June 18 in San Diego and is scheduled to be arraigned on July 3, 2018 at 10 a.m. before U.S. Magistrate Judge Karen S. Crawford. Jones was taken into custody on June 19 in Ramona.
During the investigation, the FBI nicknamed the unidentified robber as the “Skinny Bandit” based on his description.
DEFENDANTS Case Number 18-cr-2991-JM
Terry Lee Taylor Age: 23 San Diego, CA
Trinity Arvin Keara Jones Age: 18 Ramona, CA
SUMMARY OF CHARGES
Bank Robbery – Title 18, U.S.C., Section 2113(a)
Attempted Bank Robbery– Title 18, U.S.C., Section 2113(a)
Maximum penalty: 20 years’ imprisonment and a $250,000 fine
AGENCIES
Federal Bureau of Investigation
San Diego Sheriff’s Department
San Diego Police Department
Methamphetamine Trafficker Who Cut His Ankle Bracelet and Fled to Mexico during Trial Sentenced to 20 Years in PrisonRead the Press Release
Assistant U.S. Attorney Timothy F. Salel (619) 546-8055
NEWS RELEASE SUMMARY – June 13, 2018
SAN DIEGO – Drug trafficker Salvador Ojeda-Amarillas, who fled during his 2009 trial and was arrested years later in Mexico, was sentenced to 20 years in prison today for smuggling 66 pounds of pure methamphetamine from Mexico and distributing it throughout San Diego.
According to court records, from 2003 and 2007, Ojeda conspired with other drug traffickers to have pounds of methamphetamine smuggled into San Diego from Mexico, and distributed throughout San Diego County. Using court-authorized wiretaps on numerous cell phones, Drug Enforcement Administration special agents intercepted dozens of calls where Ojeda and others discussed logistics for their drug operations.
DEA special agents arrested Ojeda on May 17, 2007 when they executed a search warrant on Ojeda’s San Diego residence – in conjunction with 17 other search warrants executed by DEA throughout the county. Inside Ojeda’s home, DEA seized three firearms, including a loaded rifle located within arm’s reach of Ojeda’s bed, and a digital scale that tested positive for methamphetamine residue.
Ojeda’s trial began in May 2009. During the second week of trial -- after listening to dozens of intercepted calls where he heard himself using coded language to conduct drug deals, and the testimony of four cooperating defendants who received deliveries of pounds of methamphetamine from Ojeda -- Ojeda had heard enough. He cut his GPS bracelet and fled to Mexico.
Ojeda was convicted by the jury in absentia. Ojeda eluded arrest in Mexico for several years. He was eventually arrested in Mexico and extradited back to the United States in 2016.
In court today, U.S. District Judge William Q. Hayes said the government presented a very strong case at trial and the evidence against Ojeda was “overwhelming.” The case was aggravated, in part, based on the amount and type of substance – 66 pounds of pure methamphetamine smuggled from Mexico and distributed throughout San Diego over the course of multiple years. Judge Hayes said that a 20-year-sentence was appropriate because Ojeda was a leader of an extensive drug trafficking organization, possessed firearms at his home during the conspiracy, and he obstructed justice.
“This defendant found out today that the United States never forgets,” said U.S. Attorney Adam Braverman. “Ojeda listened to mountains of evidence against him and decided to flee. The outcome of this case is a reminder that the government will pursue those who peddle drugs and violence in our communities for as long as it takes, and the consequences of running are severe.”
“Today’s sentence was the solid end of a comprehensive DEA investigation focusing on methamphetamine trafficking organizations in San Diego,” said DEA San Diego Special Agent in Charge Karen Flowers. “Methamphetamine is a dangerous drug that continues to have a devastating impact on our society. The DEA will continue to work to bring methamphetamine traffickers to justice and make San Diego a safer place.”
This case is part of a multi-year investigation led by the DEA in Southern District of California that, in total, resulted in the arrest of 48 people, the seizure of 68 pounds of methamphetamine, 15 firearms, and approximately $295,000 in U.S. Currency.
This investigation is also the result of ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership that brings together the combined expertise and unique abilities of federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, dismantle and prosecute high-level members of drug trafficking, weapons trafficking and money laundering organizations and enterprises.
DEFENDANT Criminal Case No. 07-CR-1408-WQH
Salvador Ojeda Amarillas Age: 62 Culiacan, Mexico
SUMMARY OF CHARGES
Conspiracy to Import Methamphetamine, in violation of Title 21 U.S.C. §§ 952, 960 and 963. Term of custody including a mandatory minimum 10 years and up to life imprisonment, $4,000,000 fine, and a term of supervised release of at least 5 years and up to life.
Conspiracy to Distribute Methamphetamine, in violation of Title 21 U.S.C. §§ 841 and 846. Term of custody including a mandatory minimum 10 years and up to life imprisonment, $4,000,000 fine and and a term of supervised release of at least 5 years and up to life.
AGENCIES
Drug Enforcement Administration (San Diego Field Office)
Internal Revenue Service – Criminal Investigations
Bureau of Alcohol, Tobacco, Firearms, and Explosives
Homeland Security Investigations
Customs and Border Protection
United States Marshals Service
Federal Bureau of Investigation
Escondido Police Department
National City Police Department
San Diego County Sheriff’s Office
OTHER RELATED CASES
United States v. Andres Chavez-Chavez, et al., 07-CR-1408-WQH
Andres Chavez-Chavez - 210 months prison
David Chavez-Chavez - 121 months prison
Joel Chavez-Chavez - 121 months prison
Miguel Sandoval-Valencia - 51 months prison
Luis Sandoval-Valencia - 97 months prison
Carlos Perez - 108 months prison
Ricardo Madrigal - 51 months prison
Ismael Pena - 63 months prison
Teresa Hermasillo - 41 months
Rosa Arellano - 33 months prison
Ruben Hernandez-Romero - 72 months prison
Joaquin Bucio-Rodriguez - 120 months prison
United States v. Salvador Chavez-Chavez, et al., 07-CR-1407-WQH
Salvador Chavez-Chavez - 91 months prison
Julio Lua-Chavez - 121 months prison
Gerardo Casanova- 51 months prison
United States v. Edurardo Barajas, et al., 07-CR-2985-WQH
Eduardo Barajas - 120 months prison
Victor Ramos - 144 months prison
Alejandro Velarde - 53 months prison
Miguel Rivera Medina - 97 months prison
Jacob Tellaeche - 120 months prison
Thomas Alejadro Manzano - 120 months prison
Julio Cesar Jimenez - 70 months prison
Ernesto Roman Lopez - 63 months prison
United States v. Jose Torres-Gamino, et al., 07-CR-1545-WQH
Jose Torres-Gamino - 63 months prison
Uriel Estrada-Cardenas - 60 months prison
Beverly Hills Doctor Sentenced to 10 Years in Custody for Massive Workers’ Comp SchemeRead the Press Release
Assistant U.S. Attorneys Valerie Chu (619) 546-6750, Caroline Han (619) 546-6968 or Fred Sheppard (619) 546-8237
NEWS RELEASE SUMMARY – June 18, 2018
SAN DIEGO – Beverly Hills Radiologist Ronald Grusd and two of his corporations, California Imaging Network Medical Group and Willows Consulting Company, were sentenced in federal court today after a jury trial in December resulted in convictions on 39 felony fraud counts.
U.S. District Judge Cynthia A. Bashant imposed a sentenced of 10 years in custody and a fine of $250,000, and remanded Dr. Grusd into custody. His companies, California Imaging Network and Willows Consulting Company, were each required to pay a $500,000 fine, and an additional $15,600 in special assessments.
According to evidence presented at trial, Dr. Grusd and his companies paid kickbacks for patient referrals from multiple clinics in San Diego and Imperial counties in order to fraudulently bill insurance companies over $22 million for medical services.
Dr. Grusd negotiated with various individuals, including a primary treating physician, the payment of kickbacks for the referral of workers’ compensation patients for various medical services, including MRIs, ultrasounds, Shockwave treatments, toxicology testing and prescription pain medications. After the patients were referred for the treatment or service, one of Dr. Grusd’s companies, California Imaging Network Medical Group, would fraudulently bill insurance companies for the procedures, concealing from both the patients and the insurers that substantial kickbacks had been paid in violation of California law. Another of Dr. Grusd’s companies, Willows Consulting Company, funneled the kickback payments to those directing the referral of the patients from the various clinics. Records presented at trial showed that Dr. Grusd paid over $100,000 in bribes to secure the billings for hundreds of patients, with bribes paid on a per-patient or per-body-part formula.
Dr. Grusd and the corporations were originally indicted by a federal grand jury in November 2015, when the U.S. Attorney’s Office and the San Diego District Attorney’s Office, working in conjunction with the Federal Bureau of Investigation and the California Department of Insurance, announced multiple arrests arising from a long-term, proactive health care fraud investigation targeting corruption and fraud in the California Workers’ Compensation system.
Grusd’s practice, California Imaging Network Medical Group, operated clinics throughout California in San Diego, Los Angeles, Beverly Hills, Fresno, Rialto, Santa Ana, Studio City, Bakersfield, Calexico, East Los Angeles, Lancaster, Victorville and Visalia.
In imposing sentence, District Judge Bashant expressed concern that by paying incentives, Dr. Grusd applied pressure on the referring physician, and “made it highly questionable if all services were necessary,” a harm that the laws were designed to prevent.
Judge Bashant found that Dr. Grusd “clearly knew what he was doing.” Dr. Grusd, who had testified as to his extensive education, training, and expertise as a highly-decorated radiologist, claimed on the witness stand at trial that he was confused and did not know that what he was doing was illegal. Judge Bashant rejected this view, stating that Dr. Grusd was someone who decided to “find a way to defraud…then act dumb on the witness stand” when he got caught. She imposed a sentencing penalty for Obstruction of Justice, finding that Grusd unequivocally committed perjury and lied at trial. The judge said she was concerned about the need for both general and specific deterrence: general, because health care fraud is an area where criminals are rarely caught, requiring a significant consequence in order to deter other would-be criminals. In this case, specific deterrence was also applicable, because, in her view, there was a risk that Dr. Grusd could engage in further unlawful conduct in the future. “Dr. Grusd,” she noted, was someone who would “act smart enough to pull the wool over everyone’s eyes.”
“A patient entrusts his life to his physician,” said U.S. Attorney Adam Braverman. “A doctor’s medical decisions should be based on the best interest of the patient, not the highest bidder. The court recognized that Dr. Grusd perverted that sacred relationship by buying and selling patients – oftentimes on a per-body-part basis – to fuel his personal lifestyle.”
U.S. Attorney Braverman commended the efforts of the Federal Bureau of Investigation and the California Department of Insurance to investigate these offenses, and thanked San Diego District Attorney Summer Stephan and her office for collaborating with the United States Attorney’s Office on this investigation.
San Diego FBI Special Agent-In-Charge John A. Brown applauded today's sentence as indicative of how the insidious malignancy embodied by the payment of illegal bribes to and from medical providers seriously degrades the patient-physician relationship and places patients at risk. “Operation Backlash exemplifies the positive impact the Federal Bureau of Investigation, working side by side with our investigative partners, the California Department of Insurance, and the San Diego District Attorney's Office, can have against those medical service providers who so easily replace honest patient care with greed. The FBI will continue to leverage these partnerships to expose these schemes and hold physicians and allied medical professionals accountable.”
Anyone with information about healthcare fraud may call the FBI at 1-800-CALL-FBI, or 1-800-225-5324 or the California Department of Insurance’s toll-free fraud hotline, 800-927-4357.
DEFENDANTS Case Number: 15cr2821-BAS
Ronald Grusd Los Angeles, CA
California Imaging Network Medical Group Incorporated in 2007
Willows Consulting Company Incorporated in 2011
SUMMARY OF CHARGES
Conspiracy to Commit Honest Services Mail Fraud, Mail Fraud, Wire Fraud, and Health Care Fraud, in violation 18 U.S.C. 1349
Maximum Penalty: 20 years in custody; $250,000 fine, or twice the pecuniary gain or loss; three years’ supervised release; restitution to victims of the offense; forfeiture
Honest Services Mail and Wire Fraud, in violation of 18 U.S.C. Secs. 1341, 1343 and 1346 (18 Counts)
Maximum Penalty (each count): 20 years in custody; $250,000 fine or twice the pecuniary gain or loss; three years’ supervised release; restitution to victims of the offense; forfeiture
Health Care Fraud, in violation of 18 U.S.C. 1347, (14 Counts)
Maximum Penalty (each count): 20 years in custody; $250,000 fine or twice the pecuniary gain or loss; three years’ supervised release; restitution to victims of the offense; forfeiture
Travel Act, in violation of U.S.C. 1952 (6 Counts)
Maximum Penalty: Five years in custody; $250,000 fine or twice the pecuniary gain or loss; three years’ supervised release; restitution to victims of the offense; forfeiture
INVESTIGATING AGENCIES
Federal Bureau of Investigation
San Diego County District Attorney’s Office
California Department of Insurance
Former Federal Agent Charged with Lying in Connection with Immigration Fraud InvestigationRead the Press Release
Assistant U.S. Attorneys Meghan Heesch (619) 546-9442 and Andrew Young (619) 546-7981
NEWS RELEASE SUMMARY – June 12, 2018
SAN DIEGO – Johnny Martin, a former supervisor in the Department of Homeland Security, was arraigned in federal court today on an indictment charging him with lying to the Federal Bureau of Investigation about his improper transmission of sensitive law enforcement information. The charges against Martin stem from an investigation into a massive immigration fraud scheme involving over 150 victims and millions of dollars in losses.
According to the indictment, FBI agents approached Martin in June 2017 and asked about his dealings with an individual who had shared information with Martin and from 2010 to 2012. In fact, Martin was well acquainted with this individual. While still employed by Homeland Security Investigations (HSI) in 2015 and 2016, Martin had improperly searched a confidential law enforcement database on more than a dozen occasions for names provided by this individual. Martin then created new documents containing the confidential information, and used his personal email account to send the documents he created to the individual.
During the June 2017 interview, agents showed Martin an example of the sensitive information that he had personally extracted from a confidential law enforcement database, and had emailed directly to the individual. This document contained the personally identifiable information, immigration history, and criminal history of someone whom the individual had victimized in his immigration fraud scheme, and agents were attempting to determine how the individual had obtained this document. According to the indictment, Martin falsely claimed to agents that he had no idea how the document had been transmitted to the individual, and falsely denied sending the document or any other law enforcement sensitive information to the individual.
Martin’s case is related to a separate immigration fraud case pending against Hardev Panesar, Rafael Hastie, and Gurdev Singh (Case No. 17CR1371-GPC). According to the indictment in that case, Panesar and Hastie posed as Department of Homeland Security agents and defrauded their victims by claiming that they could obtain immigration status and stop deportation proceedings in exchange for exorbitant fees. According to statements and filings made in court in that case, Panesar and Hastie were able to convince victims they were bona fide federal agents by, in part, presenting them with confidential information obtained from law enforcement databases.
Martin, who is no longer employed by HSI, was released on bond and is scheduled to appear before U.S. District Judge Gonzalo P. Curiel on July 27, 2018.
DEFENDANT Case Number: 18CR2835-GPC
Johnny MARTIN Age: 59 Chula Vista, California
SUMMARY OF CHARGE
Count 1: 18 U.S.C. § 1001, Making a False Statement to a Federal Agent
Maximum Penalties: 5 years’ imprisonment, $250,000 fine, 3 years’ supervised release.
AGENCIES
Federal Bureau of Investigation
Customs and Border Protection - Office of Field Operations
Customs and Border Protection - Office of Professional Responsibility
*The charges and allegations contained in an Indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Credit Card Fraudster Sentenced to PrisonRead the Press Release
Assistant U.S. Attorney Nicholas W. Pilchak and Matthew J. Sutton (619) 546-9709 and (619) 546-8941
NEWS RELEASE SUMMARY – June 1, 2018
SAN DIEGO – The leader of a credit card fraud ring that stole account information from dozens of San Diego residents and used it to purchase over $70,000 of merchandise at area retailers was sentenced in federal court today to 51 months in prison.
U.S. District Judge John A. Houston sentenced the ringleader, Daniel Stephen Wray, following his January 18, 2018 guilty plea to conspiracy to use counterfeit access devices. Wray was also ordered to pay $76,489.35 in restitution.
As detailed in the plea agreement, indictment, and other publicly-filed court documents, Wray recruited multiple co-conspirators to join his ring of credit card fraudsters in late 2016. Wray then provided these individuals with counterfeit access devices—credit cards bearing altered names, but encoded with real credit card numbers for the accounts of unwitting victims—and drove them to San Diego-area stores.
Investigators believe that many of the victims’ identities and credit card numbers were stolen after Wray and his co-conspirators installed a skimmer at a La Jolla, California gas station. A skimmer is a device capable of reading and recording account information, including customer names, account numbers, and personal identification numbers, from credit and debit cards. After creating the fraudulent credit cards with the stolen credit card numbers, Wray and his co-conspirators then used them to purchase tens of thousands of dollars of merchandise from multiple San Diego retailers, including Costco and Smart N Final.
Wray admitted his role as the leader of the fraudulent scheme, acknowledging that he obtained dozens of counterfeit and unauthorized access devices from multiple victims in San Diego County and then directed his associates to use these fraudulent credit cards to make tens of thousands of dollars in purchases, ranging from Apple iPads, luxury wristwatches, gold and silver, and significant quantities of liquor and energy drinks from large San Diego retailers. According to court filings, Wray rapidly resold or distributed the stolen property on the black market.
Wray also admitted to being previously convicted of illegally possessing 269 counterfeit credit cards in 2014. In fact, according to court records, Wray was on supervised release for his prior credit card fraud conviction when he committed this crime, and even recruited his accomplices from the halfway house where he was serving his supervised release term.
At sentencing this morning, Judge Houston noted Wray’s lengthy and serious prior criminal record, his aggravating role in the offense, and the effect of identity theft on the lives of ordinary citizens. The judge said Wray’s identity theft conduct “destroys lives.”
“Identity thieves cannot victimize citizens of our district with impunity,” said U.S. Attorney Adam L. Braverman. “To anyone who considers credit card fraud a quick and easy payday: this office will investigate and prosecute you, and you will face the consequences.”
“Today’s sentencing is a reminder that financial crimes are not victimless crimes,” said United States Secret Service Special Agent in Charge Brian S. Christensen. “The defendant and his conspirators victimized the community of San Diego for their own personal gain by taking advantage of multiple local merchants. The U.S. Secret Service and its law enforcement partners will continue to investigate and pursue prosecution of those who engage in identity theft or financial fraud.”
The San Diego Regional Fraud Task Force (SDRFTF), conducted the investigation that led to the successful prosecution of this defendant. The SDRFTF was established as a collaborative, multi-agency effort to effectively combat financial crimes, including identity fraud, in San Diego County. Partnering in this effort are the United States Attorney's Office for the Southern District of California, the United States Secret Service, the San Diego Police Department, and the San Diego County District Attorney’s Office, along with other state and local partners. The case is being prosecuted by Assistant U.S. Attorneys Nicholas W. Pilchak and Matthew J. Sutton.
DEFENDANT Case Number 17CR3856-JAH
Daniel Stephen Wray Age: 29 San Diego, California
SUMMARY OF CHARGES
Conspiracy to Commit Access Device Fraud, in violation of Title 18 U.S.C. § 1029; Term of custody including 20 years in prison, $250,000 fine and 3 years supervised release and mandatory restitution.
AGENCIES
San Diego Regional Fraud Task Force:
- United States Secret Service
- San Diego Police Department
- San Diego District Attorney’s Office
Twenty-three Defendants Charged in Drug IndictmentsRead the Press Release
Assistant United States Attorneys A. Dale Blankenship (619) 546-6705
and Jonathan Shapiro (619) 546-8225SAN DIEGO – Twenty-three defendants were charged in five indictments unsealed in federal court with conspiracy to distribute cocaine and cocaine base (“crack”), distribution of cocaine and cocaine base, conspiracy to distribute methamphetamine, distribution of methamphetamine, and money laundering.
Beginning early yesterday morning, members of the FBI Violent Crimes Task Force, plus other law enforcement agencies, made numerous arrests stemming from the indictments. As of noon today, nineteen of the twenty-three defendants are either in federal or state custody. Authorities are continuing to search for four defendants.
The crackdown announced today is the latest in a series of efforts by the Department of Justice to turn the tide of the drug epidemic and reduce the inevitable violent crime that accompanies widespread drug trafficking by gangs.
“Today’s announcement is another strong message to those gang members that operate on the streets of San Diego,” said U.S. Attorney Adam L. Braverman. “If you peddle drugs, we will come after you with the full force of the federal government.”
FBI Special Agent in Charge John Brown commented, "The FBI is proud to be in the fight to keep our communities safe, free from drug trafficking and associated dangerous criminal activity. Yesterday's arrests demonstrates the unwavering commitment, between and among the FBI and our law enforcement partners, to address these dangerous threats facing our community."
This case is also the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF) a partnership that brings together the combined expertise and unique abilities of federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, dismantle and prosecute high-level members of drug trafficking, weapons trafficking and money laundering organizations and enterprises.
The United States is represented in court by Assistant U.S. Attorneys Jonathan Shapiro and A. Dale Blankenship.
Defendant Information
DEFENDANT Criminal Case No: 18CR2490-GPC
Name
Age
Hometown
Norman Cluke
28
San Diego, CA
SUMMARY OF CHARGES
Conspiracy to Distribute Cocaine (Title 21, U.S.C., Secs. 841(a)(1), 846);
Distribution of Cocaine (Title 21, U.S.C, Secs. 841(a)(1)).
Maximum Penalties: 20 years in prison and a $1 million fine.DEFENDANTS Criminal Case No: 18CR2491-GPC
Name
Age
Hometown
Fernando Cruz-Chavez
aka “Fredy”31
San Diego, CA
Sitlali Lopez
25
San Diego, CA
Armando Ceja Gonzalez
Aka “Pistolerin”
31
San Diego, CA
SUMMARY OF CHARGES
Conspiracy to Distribute Methamphetamine (Title 21, U.S.C., Secs. 841(a)(1) and 846);
Possession of Methamphetamine with Intent to Distribute (Title 21, U.S.C. Secs. 841(a)(1)).
Maximum Penalties: life in prison with a mandatory minimum sentence of 10 years and a $10 million fine.
DEFENDANTS Criminal Case No: 18CR2492-GPC
Name
Age
Hometown
Henry Hendrix
aka “Feeny Boy”
56
San Diego, CA
SUMMARY OF CHARGES
Conspiracy to Distribute Methamphetamine (Title 21, U.S.C., Secs. 841(a)(1) and 846);
Distribute of Methamphetamine (Title 21, U.S.C., Secs. 841(a)(1)).
Maximum Penalties: life in prison with a mandatory minimum sentence of 10 years and a $10 million fine.
DEFENDANT Criminal Case No: 18CR2493-GPC
Name
Age
Hometown
Roshawn Maurice Walls
aka “Ray Dog”
49
San Diego, CA
SUMMARY OF CHARGES
Distribution of Cocaine (Title 21, U.S.C, Secs. 841(a)(1))
Maximum Penalties: 20 years in prison and a $1 million fine.
DEFENDANT Criminal Case No: 18CR2494-GPC
Name
Age
Hometown
Joshua Eugene Quipp
aka “QTip”
33
San Diego, CA
Edna Monserrat Perez-Tapia
aka “Monsay”
31
San Diego, CA
Jose Antonio Jacinto Jr.
23
San Diego, CA
Cuathemoc Solis
aka “Jr.” aka “Temo”
38
San Diego, CA
Corey Michael Davis
aka “Word”
35
San Diego, CA
Darius Latrell King
aka “Tiny Mike”
31
San Diego, CA
Alejandro McFadden
aka “Flav”
47
San Diego, CA
Charles Joseph Brimmer
aka “Demon”
31
San Diego, CA
Myron Xavier Castro Jr.
aka “Hard Dog”, aka “HD”
32
San Diego, CA
Julius Davis
aka “Labacl”
58
San Diego, CA
James Edward Staton
aka “State Rock”
58
San Diego, CA
Anthony Ray Rhodes
aka “Big A”
55
San Diego, CA
Anthony Frederick Miller
aka “Dread”
62
San Diego, CA
Richard Kelvin Brown
aka “Dreads”
60
San Diego, CA
Shawn Monique King
aka “SK”
48
San Diego, CA
Timothy Raynard Moore
29
San Diego, CA
Linda Quipp
28
San Diego, CA
SUMMARY OF CHARGES
Conspiracy to Distribute Cocaine Base (Title 21, U.S.C., Secs. 841(a)(1), 846);
Possession with Intent to Distribute Cocaine Base (Title 21, U.S.C, Secs. 841(a)(1));Conspiracy to Launder Money (Title 18, U.S.C., Secs 1956(h), 1956(a)(1)(A)(i).
Maximum Penalties: For cocaine charges: life in prison with a mandatory minimum sentence of 10 years and a $10 million fine. For money laundering conspiracy charges: 20 years in prison and a $250,000 fine.
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
AGENCIES
Federal Bureau of Investigation’s Violent Crimes Task Force – Gang Group, which includes the Federal Bureau of Investigation,
San Diego Police Department,
San Diego County Sheriff’s Office,
National City Police Department,
California Department of Corrections and Rehabilitation,
United States Bureau of Prisons,
San Diego Probation Department, and
San Diego District Attorney’s Office
Panga Boat Pilot and Guide Sentenced to CustodyRead the Press Release
Assistant U. S. Attorney Christopher Alexander (619) 546-6665
NEWS RELEASE SUMMARY – May 21, 2018
SAN DIEGO – Juan Alejandro Castro-Reza, the pilot of a panga style boat, was sentenced in federal court Monday to 24 months in prison for bringing 11 undocumented immigrants into the United States from Mexico.
Castro-Reza and Javier Guadalupe Lerma-Enriquez pleaded guilty in connection with the events of November 18, 2017, when the U.S. Border Patrol observed the vessel on the open sea operating at night and heading at a high rate of speed for an area about a mile north of the international border. Upon making landfall, the vessel’s 13 occupants fled before being apprehended by Border Patrol agents.
U.S. Border Patrol agents identified all of the vessel’s occupants as citizens of Mexico without any legal right to enter the United States. Through investigation, agents learned that Lerma-Enriquez was to guide the smuggled aliens once they were inside the United States.
At sentencing, U.S. District Judge Cathy Ann Bencivengo found that Castro-Reza’s conduct created a substantial risk to the immigrants on board the vessel and noted that he had smuggled immigrants using a panga boat before.
“Smugglers who have no regard for the safety of immigrants are stuffing people into their trunks, abandoning them in treacherous terrain and cramming way too many onto small boats to take a dangerous journey across the ocean,” said U.S. Attorney Adam Braverman. “Our anti-smuggling efforts are in full force because we want to save lives. Today’s sentence is another step toward that goal.”
DEFENDANTS Case Number 17CR4227-CAB
Juan Alejandro Castro-Reza Age: 45 San Felipe, B.C., Mexico
Javier Guadalupe Lerma-Enriquez Age: 23 Los Mochis, Sinaloa, Mexico
SUMMARY OF SENTENCES
DEFENDANTS SENTENCE
Juan Alejandro Castro-Reza 24 months of custody, 3 years of supervised release, no fine, and a special assessment of $100.00
Javier Guadalupe Lerma-Enriquez 12 months and one day of custody, 3 years of supervised release, no fine, and a special assessment of $100.00
SUMMARY OF CHARGES
Bringing in Undocumented Aliens and Aiding and Abetting – Title 8, U.S.C., Section 1324(a)(1)(A)(i) and (v)(II).
Maximum penalty: 10 years’ imprisonment and $250,000 fine.
AGENCIES
United States Border Patrol
Vista Man Sentenced to more than 17 years in Prison for Child Pornography OffensesRead the Press Release
Assistant U. S. Attorneys Janet Cabral (619) 546-8715 or Amanda Griffith (619)546-8970
NEWS RELEASE SUMMARY – May 21, 2018
SAN DIEGO – William Francis Walsh IV, a former Marine who worked at a fire station on Camp Pendleton, was sentenced today to 210 months in federal custody for distribution and possession of images of minors engaged in sexually explicit conduct.
Walsh, 55, was arrested in May of 2017 and charged with two counts of distribution and one count of possession of images of minors engaged in sexually explicit conduct based upon his use of a peer-to-peer file-sharing program to distribute and download the images.
Walsh pleaded not guilty to the charges, and evidence was presented at a four-day federal jury trial in February of 2018. The jury heard testimony from law enforcement officers from the Escondido Police Department regarding the nature of the online investigation, the items seized at Walsh’s house pursuant to a search warrant, and the computer forensic evidence. Evidence at trial showed Walsh had downloaded hundreds of files with names indicative of child pornography through use of the peer-to-peer file sharing software. Following deliberations, the jury found him guilty of all charges.
At sentencing, Walsh declined to make a statement, and his counsel noted he continues to dispute the charges. U.S. District Judge Anthony J. Battaglia noted the long-term suffering of victims depicted in child pornography. In comparing Walsh to the range of offenders sentenced for similar offenses, the judge said Walsh’s conduct was “on the extreme end of the cases I have seen.”
“Today a man who committed terrible crimes against children was sentenced to many years in prison,” said U.S. Attorney Adam Braverman. “These horrible experiences will echo in the hearts and minds of young victims for a lifetime, and I am deeply distressed and deeply committed to pursuing cases that will protect our vulnerable youth from people like Walsh.”
“Today’s sentence confirms that this predator can no longer victimize innocent children because he is off the streets and he is offline,” said FBI Special Agent in Charge John Brown. “This investigation showcases the success of collaborative federal and local investigations working toward a common goal.”
DEFENDANT Criminal Case No. 17cr1269-AJB
William Francis Walsh IV Age: 55 Vista, CA
SUMMARY OF CHARGE
- Counts 1 and 2 - Title 18, United States Code, Section 2252(a)(2), Distribution of Images of Minors Engaged in Sexually Explicit Conduct;
- Count 3 – Title 18, United States Code, Section 2252(a)(4)(B), Possession of Images of Minors Engaged in Sexually Explicit Conduct
Maximum penalties:
- Counts 1 and 2 – 20 years in prison, with a mandatory 5 years in prison
- Count 3 – 20 years in prison
- As to all Counts, $250,000 fine
INVESTIGATING AGENCIES
Federal Bureau of Investigation
Escondido Police Department
Rabobank NA Sentenced for Conspiring to Impair, Impede, and Obstruct Its Primary RegulatorRead the Press Release
Rabobank National Association (Rabobank), a Roseville, California subsidiary of the Netherlands-based Coöperatieve Rabobank U.A., was sentenced today by U.S. District Judge Jeffrey T. Miller of the Southern District of California for impairing, impeding and obstructing its primary regulator, the Department of the Treasury’s Office of the Comptroller of the Currency (the OCC), by concealing deficiencies in its anti-money laundering (AML) program and for obstructing the OCC’s examination of Rabobank. Rabobank was sentenced to a two-year term of probation, and ordered to pay the statutory maximum fine of $500,000. Additionally, as part of its guilty plea, Rabobank forfeited $368,701,259 to the United States as a result of allowing illicit funds to be processed through the bank.
Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Adam L. Braverman for the Southern District of California, Special Agent in Charge Dave Shaw of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) in San Diego and Special Agent in Charge R. Damon Rowe of Internal Revenue Service Criminal Investigation (IRS-CI) Los Angeles Field Office made the announcement.
“Rabobank’s branches on the Mexican border processed hundreds of millions of dollars in suspicious transactions likely tied to international narcotics trafficking, organized crime, and money laundering,” said Acting Assistant Attorney General Cronan. “Instead of filing reports that would have alerted law enforcement to the suspicious activity, as required by law, the bank looked the other way and then compounded its misconduct by conspiring to cover-up its failures and deceiving its regulator. Today’s sentence and the related forfeiture demonstrate that the Department of Justice will use all the tools at our disposal to combat drug trafficking and transnational crime—including prosecuting financial institutions that turn a blind eye to illicit proceeds moving through their customers’ accounts.”
“The U.S. Attorney’s Office is intent on securing our border and preventing the laundering of narco-dollars through financial institutions like Rabobank,” said U.S. Attorney Braverman. “In doing so we will safeguard our communities and protect our citizens from drug traffickers and corporate criminals alike.”
“It is the responsibility of Homeland Security Investigations (HSI) to monitor and investigate illicit activity that exploits the global infrastructure, particularly in financial systems,” said HSI San Diego Special Agent in Charge, Dave Shaw. “This complex investigation revealed, and Rabobank admits, that Rabobank was aware of the extreme risk involved in processing million dollar financial transactions linked to transnational crime and international money laundering – activity which plagues the southwest border. Today’s sentencing and the significant forfeitures in this case sends a strong message to financial institutions that illicit financial activity inside banking institutions will not be tolerated.”
“Rabobank’s sentencing today is a victory for all Americans and sends a strong message about the need for transparency in banking and ultimately contributes to the fight against money laundering,” said IRS-CI Special Agent in Charge Rowe. “IRS-Criminal Investigation works diligently with our law enforcement partners to ensure funds obtained through illegal means do not find their way into our financial institutions.”
On Feb. 7, Rabobank pleaded guilty to conspiracy to defraud the United States and to corruptly obstruct an examination of a financial institution. Specifically, Rabobank admitted to conspiring with several former executives to defraud the United States by unlawfully impeding the OCC’s ability to regulate the bank and to obstruct the OCC’s 2012 examination of Rabobank’s Bank Secrecy Act (BSA)/AML compliance program. In connection with that guilty plea, Rabobank admitted that between 2009 and 2012 it implemented BSA/AML policies and procedures that precluded and suppressed its investigations into potentially suspicious transactions near the U.S.-Mexico border, much of which was conducted by customers and through accounts that Rabobank had previously designated “High-Risk.”
As a result of its BSA/AML failures, Rabobank admitted that certain customer accounts were involved in not less than $368,701,259 in suspicious transactions that were either unreported or untimely reported to the Financial Crimes Enforcement Network (FinCEN), as required by the BSA. These transactions included high-volume cash deposits and withdrawals, check transactions, electronic transfers, and wire transfers that were consistent with illegal activity such as trade-based money laundering, bulk cash smuggling, structuring, and the black market peso exchange.
According to its statement of facts, Rabobank’s branches in Imperial County, California were heavily dependent on cash sourced from Mexico – cash the bank knew was likely tied to narcotics trafficking and organized crime. In particular, Rabobank’s Calexico, California branch, located approximately two blocks from the U.S.-Mexico border, was the highest performing branch in the Imperial Valley region due to its receipt of cash from Mexico. Rabobank continued soliciting cash-intensive customers from Mexico, while failing to employ appropriate BSA/AML policies and procedures to address the heightened risk, until approximately May 2013, when Rabobank placed a moratorium on originating new account relationships for Mexico-based businesses entities.
Rabobank also admitted that the bank, through at least three executives, knowingly obstructed the OCC’s 2012 examination by responding to the OCC’s February 2013 initial report of examination with false and misleading information about the state of Rabobank’s BSA/AML program and by making false and misleading statements to the OCC regarding the existence of reports developed by a third-party consultant that described the deficiencies and resulting ineffectiveness of Rabobank’s BSA/AML program. In furtherance of the scheme to defraud the OCC, Rabobank also demoted or terminated two RNA employees who provided information to the OCC regarding Rabobank’s BSA/AML deficiencies.
The investigation was conducted by HSI, IRS-CI, and the Financial Investigations and Border Crimes Task Force (the FIBC), a multiagency Task Force based in San Diego and Imperial Counties, and funded by the Treasury Executive Office of Asset Forfeiture (TEOAF). The investigation occurred in parallel with regulatory investigations by the OCC, Office of General Counsel, and FinCEN, Enforcement Division. The case is being prosecuted by Trial Attorneys Kevin G. Mosley and Maria K. Vento of the Criminal Division’s Money Laundering and Asset Recovery Section, Bank Integrity Unit, and Assistant U.S. Attorneys Daniel C. Silva, Mark W. Pletcher and David J. Rawls of the Southern District of California.
Bank Sentenced for Obstructing Regulators, Forfeits $368 Million for Concealing Anti-Money Laundering FailuresRead the Press Release
Assistant U.S. Attorneys Daniel C. Silva (619) 546-9713, Mark W. Pletcher (619) 546-9714, and David J. Rawls (619) 546-7966
NEWS RELEASE SUMMARY – May 18, 2018
SAN DIEGO – Rabobank, National Association, a California subsidiary of the Netherlands-based Coöperatieve Rabobank U.A., was sentenced today before U.S. District Judge Jeffrey T. Miller for conspiring to impair, impede, and obstruct its primary regulator, the Department of the Treasury’s Office of the Comptroller of the Currency (OCC), by concealing deficiencies in its anti-money laundering program.
Judge Miller sentenced Rabobank to pay the statutory maximum fine of $500,000 after taking account of Rabobank’s forfeiture of $368,701,259 as well as a two-year term of probation. Today’s half million dollar criminal fine coupled with Rabobank’s forfeiture of $368,701,259 stands as the largest monetary penalty paid by a criminal defendant in the history of the Southern District of California.
In imposing sentence, Judge Miller noted that Rabobank’s conduct essentially amounted to “stiff-arming the OCC, and completely failing in its responsibility to its customers and the nation.”
“The U.S. Attorney’s Office is intent on securing the border and preventing the laundering of narco-dollars through financial institutions like Rabobank,” said U.S. Attorney Adam L. Braverman. “In doing so we will safeguard our communities and protect our citizens from drug traffickers and corporate criminals alike.”
“Rabobank’s branches on the Mexican border processed hundreds of millions of dollars in suspicious transactions likely tied to international narcotics trafficking, organized crime, and money laundering,” said Acting Assistant Attorney General John P. Cronan. “Instead of filing reports that would have alerted law enforcement to the suspicious activity, as required by law, the bank looked the other way and then compounded its misconduct by conspiring to cover-up its failures and deceiving its regulator. Today’s sentence and the related forfeiture demonstrate that the Department of Justice will use all the tools at our disposal to combat drug trafficking and transnational crime—including prosecuting financial institutions that turn a blind eye to illicit proceeds moving through their customers’ accounts.”
“It is the responsibility of Homeland Security Investigations (“HSI”) to monitor and investigate activity which exploits the global infrastructure, to include financial systems. This complex investigation revealed, and Rabobank admits, that Rabobank was aware of the extreme risk that it was processing hundreds of millions of dollars related to transnational crime and international money laundering – activity which plagues the Southwest Border,” said Dave Shaw, Special Agent in Charge for HSI in San Diego. “This plea and significant forfeiture sends a strong message to financial institutions that this activity will not be tolerated.”
“Rabobank’s sentencing today is a victory for all Americans and sends a strong message about the need for transparency in banking and ultimately contributes to the fight against money laundering,” stated IRS Criminal Investigation’s Special Agent in Charge, Los Angeles Field Office, R. Damon Rowe. “IRS-Criminal Investigation works diligently with our law enforcement partners to ensure funds obtained through illegal means do not find their way into our financial institutions."
Today’s sentence follows Rabobank’s February 7, 2018, guilty plea for conspiring with several former executives to defraud the United States by unlawfully impairing and impeding the OCC’s ability to regulate the bank and obstructing its examination of Rabobank’s Bank Secrecy Act/Anti-Money Laundering (BSA/AML) compliance program. In connection with that guilty plea, Rabobank admitted that between 2009 and 2012 it implemented BSA/AML policies and procedures that precluded and suppressed legally-mandated investigations into potentially suspicious account activity, much of which was conducted by cross-border customers and through accounts that Rabobank had previously designated “High-Risk.”
As a result of its BSA/AML failures, Rabobank admitted that certain customer accounts were involved in not less than $368,701,259 in suspicious transactions that were either unreported or untimely reported to the Financial Crimes Enforcement Network (FinCEN), as required by the BSA. These transactions along the southwest border included high-volume cash deposits and withdrawals, check transactions, electronic transfers, and wire transfers that were consistent with illegal activity such as trade-based money laundering, bulk cash smuggling, structuring, and the black market peso exchange.
Rabobank’s branches in Imperial County were heavily dependent on cash sourced from Mexico – cash the bank knew was likely tied to narcotics trafficking and organized crime. In particular, Rabobank’s Calexico, California branch, located approximately two blocks from the U.S.-Mexico border, was the highest performing branch in the Imperial Valley region due to its receipt of cash from Mexico. Rabobank continued soliciting cash-intensive customers from Mexico, while failing to employ appropriate BSA/AML policies and procedures to address the heightened risk, until approximately May 2013, when Rabobank placed a moratorium on originating new account relationships for Mexico-based businesses entities.
Rabobank also admitted that the bank and its executives corruptly obstructed the OCC’s 2012 examination by responding to the OCC’s February 2013 initial report of examination with false and misleading information about the state of Rabobank’s BSA/AML program and by making false and misleading statements to the OCC regarding the existence of reports developed by a third-party consultant that described the deficiencies and resulting ineffectiveness of Rabobank’s BSA/AML program. Rabobank also demoted or terminated two of its employees who provided information to the OCC.
The case is being prosecuted by Assistant U.S. Attorneys Daniel C. Silva, Mark W. Pletcher, and David J. Rawls from the Southern District of California, and Trial Attorneys Kevin G. Mosley and Maria Vento of the Criminal Division’s Money Laundering and Asset Recovery Section. The investigation team included HSI, IRS, and the Financial Investigations and Border Crimes Task Force (the “FIBC”), a multiagency Task Force based in San Diego and Imperial Counties, and funded by the Treasury Executive Office of Asset Forfeiture (“TEOAF”). The investigation occurred in parallel with regulatory investigations by the OCC, Office of General Counsel, and FinCEN, Enforcement Division
DEFENDANT
RABOBANK, NATIONAL ASSOCIATION
Roseville, California
SUMMARY OF CHARGES
Conspiracy to Defraud the United States and (2) To Corruptly Obstruct an Examination of a Financial Institution – Title 18, United States Code, Section 371
Maximum penalties: $500,000 fine; a mandatory special assessment of $400; and a term of probation of at least one year, but not more than five years.
AGENCIES
Homeland Security Investigations
Internal Revenue Service – Criminal Investigation
TEOAF’s Financial Investigations and Border Crimes Task Force
Airline Staffing Executive Sentenced to Prison for Years of Immigration FraudRead the Press Release
Assistant U.S. Attorney Nicholas W. Pilchak (619) 546-9709
NEWS RELEASE SUMMARY – May 17, 2018
SAN DIEGO – Eleno Quinteros, Jr., the former vice president of operations for two airline mechanic staffing companies, was sentenced today to 12 months in prison for making false statements in support of legal permanent resident petitions for dozens of the companies’ mechanics.
Quinteros previously admitted falsely certifying that he had received no payments from the mechanics, when in fact he had demanded and collected hundreds of thousands of dollars of unlawful fees from approximately 85 of them. Today, U.S. District Judge Michael M. Anello sentenced Quinteros to a year and a day in custody based on his view of the “enormity of the offense.”
According to his plea agreement, Quinteros demanded and collected as much as $567,480 from his foreign labor workers, even though employers are prohibited by law from demanding payment for their fees—including attorneys’ fees—in connection with the charged applications. Less than half of the money Quinteros collected was actually paid to immigration attorneys assisting with the applications, while Quinteros himself kept an estimated $372,715, according to court filings.
Quinteros was vice president of two different staffing companies, as set out in his plea agreement. The companies’ staff performed heavy maintenance on aircraft at a variety of airfields nationwide. Quinteros was responsible for recruiting Mexican aircraft mechanics to work in the United States for the companies, and for helping recruits to obtain work visas such as TN or H-2B visas.
According to the indictment, after assisting his recruits in obtaining work visas to come to the United States, Quinteros then agreed to help at least 85 of them pursue a legal permanent residency—in exchange for substantial (and unlawful) fees. Quinteros directed many employees to deposit money into his wife’s bank account, or provide him with blank money orders, in order to conceal the source of the unlawful funds. Other funds were routed through a company bank account, where Quinteros falsely described them to the company bookkeeper as a “loan” from him to the company, according to court filings.
Quinteros collected as much as ten or twenty thousand dollars from some workers, per court records. Although Quinteros himself was well compensated by his two companies during his scheme, some of his recruits had to sell their homes and cars to finance the unlawful fees.
On August 10, 2017, Quinteros pleaded guilty to a single count of making a false claim in support of an immigration application, in violation of Title 18, United States Code, Section 1546(a). He admitted in his plea, however, that the underlying scheme involved more than 25 immigration documents. Quinteros has already been ordered to pay back $292,526 in illegal fees collected from 52 of the identifiable victims of his scheme.
“Legal permanent residency in the United States is not a bargaining chip that greedy employers can sell to the highest bidder,” said U.S. Attorney Adam L. Braverman. “This office will vigorously investigate and prosecute those who commit immigration fraud.”
“The Diplomatic Security Service is firmly committed to making sure that those who commit visa fraud face consequences for their criminal actions,” said Michael Bishop, Special Agent-in-Charge of the U.S. Department of State’s Diplomatic Security Service, Los Angeles Field Office. “The strong relationship we enjoy with our law enforcement partners on the Document Benefit Fraud Task Force and DSS’ global network of special agents working together to stop criminals from reaping illegal income by exploiting U.S. visas and foreign workers continues to be essential in the pursuit of justice.”
“As this sentence makes clear, individuals who undermine our nation’s security by compromising the integrity of our immigration laws for their own enrichment will face serious consequences,” said Joseph Macias, Special Agent in Charge for Homeland Security Investigations (HSI) Los Angeles. “Working closely with our law enforcement partners, HSI will move aggressively to hold those involved in these types of criminal schemes accountable.”
“This is a perfect example of federal agencies working together to combat those trying to defraud the government,” stated U.S. Citizenship and Immigration Services (USCIS) Los Angeles District Director, Donna Campagnolo. “USCIS FDNS will continue playing a key role in USCIS efforts to safeguard the integrity of our immigration laws, protect American workers, and safeguard the Homeland.”
DEFENDANT Case No. 17-cr-557-MMA
Eleno “Max” Quinteros, Jr. 46 years old Chula Vista, California
CHARGES
False Statement on an Immigration Document - 18 U.S.C. § 1546(a)
Maximum penalty: 10 years’ imprisonment and $250,000 fine
AGENCIES
Department of State, Diplomatic Security Service
Department of Homeland Security, Homeland Security Investigations
U.S. Citizenship and Immigration Services
Vista Man Sentenced to Almost 20 Years for Coercing Young Children into Sending Him Naked Pictures and VideosRead the Press Release
Assistant U. S. Attorney Sabrina Feve (619) 546-6786
NEWS RELEASE SUMMARY – May 11, 2018
SAN DIEGO – Joseph Daniel Saucedo of Vista was sentenced in federal court today to 235 months in custody and 20 years of supervised release for attempting to manipulate two children, ages 11 and 16, into sending sexually explicit photographs of themselves, and then threatening to expose them if they refused to continue.
According to the plea agreement, Saucedo posed as a teenage girl, “Amy Jennings,” and began communicating on-line with an 11-year-old Canadian boy. At first the two had normal conversations about everyday life. But then Saucedo, pretending to be “Amy,” sent naked pictures of young girls and asked the boy to communicate with her “friend,” Saucedo, in return. When the boy refused, “Amy” posted a photograph of his house, told the boy she knew where he lived, and threatened to shame him into communicating with Saucedo.
The boy ultimately relented and texted Saucedo, who then communicated with the boy using FaceTime and displayed his naked front torso. The boy hung up on Saucedo but the calls and threats continued until, finally, on January 25, 2016, the boy received a message from “Amy,” which included a video of a young boy masturbating. “Amy” threatened to leak the video and claim it was the Canadian boy if the boy did not send naked pictures of himself to Saucedo.
Additional investigation revealed that Saucedo had been in communication with other young children, successfully soliciting sexually graphic images from them. For example, in August 2015, Saucedo struck up a conversation with a 16-year-old girl in Florida through Instagram. This time, Saucedo pretended to be a modeling agent looking for “bikini and nude models” adding “obviously the pay is great.” When the Florida girl told Saucedo that she was only 16 and would have to check with her parents, he volunteered that they could just “make a portfolio” at no cost to her, and “then we can talk to your parents.” She demurred again, telling Saucedo that she had “never been comfortable in my skin.” He promised to “help with that hun if you want we can FaceTime so nothing is saved.”
She continued to refuse his overtures until Saucedo, under the guise of “Amy Jennings,” threatened to blackmail the girl. The girl turned to Saucedo for help with “Amy.” Although he initially claimed no knowledge of Amy Jennings and insisted his modeling business was legitimate, he quickly agreed to help the girl, for a price: nude pictures of herself. He even asked her to “[w]rite my name on a paper or hand so I know it’s a new one.” She acquiesced and sent him pictures of her breasts with “Joe” written across her chest.
Saucedo demanded that the girl continue sending him naked photographs, or “Amy” would post compromising pictures of the girl. The girl volunteered that she was “looking into Kik’s legal system” to handle the threatening “Amy” posts. Within seconds, Saucedo responded, “Na I’ll pay her I don’t want you to get in trouble.” Saucedo no doubt feared that alerting Kik to “Amy Jennings” could have compromised his illegal activities. Saucedo told the girl that he had paid “Amy Jennings” $2,000. As a thank you, the girl agreed to a sexually explicit FaceTime chat with Saucedo. She also sent additional photographs of herself naked with “Joe” written on her breasts and above her vagina, again at his request.
Saucedo continued to hound the girl for almost a year, from August 2015 to June 2016, requesting more naked photographs. He even sent her a photo of stacks of money to elicit more naked photographs. She sent him one more photograph in October 2015, but then stopped responding.
Through search warrants for Saucedo’s cell phones, investigators identified an additional eight minor victims whom Saucedo harassed and manipulated. His youngest victim was 13 at the time of the offense. This victim told Saucedo her age and he nonetheless continued to solicit nude photos from her, including pressuring her to take naked photos of herself while she was at school. Saucedo also directed a 14 year-old victim to sodomize herself and to penetrate herself with a hair brush and threatened her when she protested, including ignoring her warning that his requests made her contemplate suicide. Saucedo’s indifference to his victims’ apparent suffering included disregarding multiple victims’ warnings that his contacts and demands were triggering suicidal thoughts.
At the sentencing hearing, the government acknowledged and thanked the family of the 11 year-old victim. Their vigilance and willingness to report Saucedo’s conduct, coupled with the investigative follow-up efforts of the Calgary Policy Service and the Royal Canadian Mounted Police, led Canadian authorities to refer the matter to San Diego’s Electronic Crimes Working Group, which ultimately identified and arrested Saucedo. Only following Saucedo’s arrest did law enforcement learn of his additional nine victims. Victims, family members, and friends are encouraged to report similar threats and contacts to law enforcement now and in the future.
“This case highlights the importance of strong international partnerships to target these heinous crimes,” said U.S. Attorney Adam L. Braverman. “Thank you to our Canadian colleagues, and most especially to the brave victims everywhere who step forward to report abusive conduct. Their courage is a critical part of detecting and stopping similar abuse now and in the future.”
“Saucedo's sentencing is a another great example of our collaboration with our law enforcement partners and our commitment to keeping our children safe,” said David Shaw, Special Agent in Charge for HSI San Diego. “Dangerous child predators should not have the privilege to be a part of our communities without being held accountable and going through the criminal justice process.”
DEFENDANT Case Number: 17-CR-00095-JLS
Joseph Daniel Saucedo Age: 26 Vista, CA
SUMMARY OF CHARGES
Counts One and Two
Attempted Receipt and Receipt of Images of Minors Engaged in Sexually Explicit Conduct, in violation of Title 18, United States Code, Section 2252(a)(2)
Minimum Penalty: 15 years
Maximum Penalty: 40 years
AGENCY
United States Homeland Security Investigations
United States Secret Service
Calgary Police Service
Royal Canadian Mounted Police
Two Mexican Nationals Charged with Assaulting Border Patrol AgentsRead the Press Release
Kelly Thornton (619) 546-9726
NEWS RELEASE SUMMARY – May 11, 2018
SAN DIEGO – Two Mexican nationals – one armed with a makeshift plastic shiv and another with a 4X4 piece of lumber - were arrested and charged in unrelated assaults on U.S. Border Patrol agents along the border this week.
According to a complaint, in the first incident, on May 9, 2018 at approximately 10:15 a.m., Pedro Damien Gonzalez Iglesias is accused of assaulting Border Patrol Agents Edmund Parra and Ramiro Lizarraga after he illegally entered the United States. Gonzalez Iglesias walked up to the agents, who were working near the San Ysidro port of entry, and tried slashing them with an object that looked like a piece of plastic shaped like a knife. The agents tried using verbal commands numerous times to get the defendant to drop his weapon. The subject got to within arm’s length of the agents before Agent Lizarraga was able to successfully deploy his Oleoresin Capsicum (OC) Spray. The agents took the subject into custody. No injuries were reported.
According to details in another complaint, the second incident occurred on May 10, 2018, at approximately 10:05 a.m. Defendant Carlos Miranda-Alonso is accused of assaulting Border Patrol Agent Raymond Gray during an attempted arrest. The defendant threw punches and elbows and ran away when Agent Gray attempted to place the subject in handcuffs. Miranda-Alonso picked up a 4x4 piece of lumber approximately 3½ feet in length and swung it at Agent Gray. Agent Gray was able to step out of range to avoid being hit. Miranda-Alonso attempted to flee westbound through the Tijuana Estuary. At 10:22 a.m. the defendant was apprehended west of the Tijuana Estuary Visitor center. No injuries reported.
“Assault on federal officers is one of the Department of Justice’s top priorities,” said U.S. Attorney Adam L. Braverman. “Our office is committed to vigorously prosecuting these cases.”
DEFENDANT Case Number 18mj2339
Pedro Damien Gonzalez Iglesias
SUMMARY OF CHARGES
Assault on a Federal Officer, in violation of Title 18, U.S.C., Sec. 1 ll(a)(l )A
Maximum penalty: Six months in prison and a $5,000 fine
DEFENDANT Case Number 18mj2380__
Carlos Miranda-Alonso
SUMMARY OF CHARGES
Assault on a Federal Officer, in violation of Title 18, U.S.C., Sec. 1 ll(a)(l )A
Maximum penalty: Eight years in prison, $250,000 fine
AGENCY
U.S. Border Patrol
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Alien Smuggler Sentenced for Blowing Through Checkpoint at High Speed, Seriously Injuring Border Patrol AgentRead the Press Release
Assistant U. S. Attorney Colin McDonald (619) 546-9144
SAN DIEGO – Jorge Garcia-Osornio was sentenced in federal court today to 30 months in prison for blasting through a Border Patrol checkpoint in Pine Valley, severely injuring a checkpoint inspection agent, and taking Border Patrol on a high-speed chase reaching speeds of at least 100 miles per hour.
Garcia, who was illegally present in the U.S. and had two illegal immigrants hiding on the floor of his vehicle, approached the checkpoint – about 45 miles east of downtown San Diego - at approximately 10:26 a.m. on November 14, 2017. As he neared the line of cars waiting for inspection, he made an illegal U-turn and started driving the wrong way on the freeway.
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A Border Patrol agent yelled, “Turn around! Turn around!” Another agent activated his emergency lights and siren and began following the defendant. Garcia then made another U-turn on the freeway and headed back toward the checkpoint. The agent tried to stop Garcia’s vehicle by positioning the agency vehicle in the center of both freeway lanes, but Garcia squeezed past by driving onto the shoulder of the freeway.
He then sped toward the checkpoint. A number of cars were in the checkpoint queue. Garcia evaded them by driving into a coned-off freeway lane. He then accelerated to – and through – the checkpoint. In the process, he barely missed crashing into a parked agency car; barely missed crashing into a parked civilian car; and barely missed running over Border Patrol Agent M. Medina, the primary inspection agent.
But Garcia did not miss a steel-framed stop sign sitting in the middle of the freeway lanes; he barreled through it, causing a collision best described as an “explosion.” Debris from the collision struck Agent Medina, who likened the blow to being “hit with a baseball bat.” His injuries were similarly severe: Vomiting, throbbing headache, blurry vision, a gash on his face, shaking uncontrollably, and loud ringing in his ears, among other things. Agent Medina was taken to the hospital in an ambulance and has not returned to work since.
After crashing through the checkpoint, Garcia led Border Patrol on a high-speed chase, reaching speeds of at least 100 mph. After about 3.5 miles, Garcia exited the freeway, ran a stop sign and crashed into a hillside. One of the illegal immigrants on the floor of Garcia’s car said he “feared for his life.”
Garcia then ran away and agents found him hiding in a nearby carport with the crashed car’s key fob in his pocket.
As part of his plea, Garcia admitted driving the wrong way on the freeway, reaching at least 100 mph when fleeing from the checkpoint, using a dangerous weapon in the commission of the offense, and seriously injuring Agent Medina, among other things.
Garcia expected to earn between $1,400 and $2,000 for transporting the two illegal immigrants.
“This defendant had no regard for the safety of his passengers, other drivers on the freeway or agents at the checkpoint,” said U.S. Attorney Adam Braverman. “It’s a miracle no one died in this incident. Smugglers operate in a world where immigrants are just dollar signs, not people.”
“In committing his criminal act, Garcia not only placed the lives of those he smuggled in grave danger, but seriously injured a Border Patrol agent in the process,” Chief Patrol Agent Rodney S. Scott. “I would like to express my sincere appreciation to the United States Attorney’s office for their efforts in prosecuting this case. Let this sentencing serve as a reminder that there will be severe consequences for those that wish to do our country harm.”
DEFENDANT Case Number 17cr4272-JM
Jorge Garcia-Osornio Age: 28 Michoacán, Mexico
SUMMARY OF CHARGES
Transporting Certain Aliens and Aiding and Abetting – Title 18, U.S.C., Sections 1324(a)(1)(A)(ii), (v)(II), and (a)(1)(B)(i)
Maximum penalty: 10 years’ imprisonment and $250,000 fine
AGENCY
U.S. Border Patrol
High School Senior Charged with Recruiting Other Juveniles to Smuggle Methamphetamine and Fentanyl from MexicoRead the Press Release
Assistant U. S. Attorney Sherri Walker Hobson (619) 961-0287
NEWS RELEASE SUMMARY – May 7, 2018
SAN DIEGO – Phillip Junior Web, a high school senior at Castle Park High School, was charged in federal court today with conspiracy to distribute controlled substances and bringing in unlawful aliens, including a Mexican national and Chinese national, for financial gain. He was arraigned this afternoon before U.S. Magistrate Judge Bernard G. Skomal.
According to the court documents, the defendant was a high school senior who recruited other high school students to smuggle methamphetamine and fentanyl into the United States on multiple occasions, including on July 1, 2017 (juvenile attempted to smuggle methamphetamine), September 19, 2017 (two juveniles attempted to smuggle methamphetamine), September 27, 2017 (juvenile attempted to smuggle methamphetamine), and October 23, 2017 (juvenile attempted to smuggle fentanyl). On each of these occasions, the juveniles had drugs strapped on their bodies as they attempted to enter the United States at the San Ysidro or Otay Mesa Ports of Entry.
Last Friday, defendant Webb was caught attempting to bring in a Chinese national and Mexican national into the United States in the trunk of his vehicle. The defendant’s next court appearance is on May 10, 2018 for a detention hearing and May 21, 2018 for a preliminary examination before Judge Skomal.
In an unrelated criminal complaint, defendant Alejandro Barba was charged with conspiracy to distribute methamphetamine. According to the complaint, agents saw a juvenile briefly enter Barba’s parked vehicle at the San Ysidro High School parking lot, remove items from his backpack, and then exit Barba’s vehicle. Barba, the sole occupant and driver, was stopped and agents found five kilograms of methamphetamine in his back seat. According to the complaint, the unnamed juvenile had smuggled the methamphetamine through the border earlier that day. Barba will appear for his initial appearance later this week.
“We are seeing a very troubling trend and we want to warn parents and high schoolers,” said U.S. Attorney Adam L. Braverman. “Our youth are being recruited by drug cartels to smuggle dangerous drugs across the border. We are going after the recruiters who exploit these kids, but the kids also need to know that they are gambling with their lives when they do this. Don’t throw away your future.”
DEFENDANT Case No. 18MJ2229
Phillip Junior Webb Age: 18 Tijuana, Mexico
CHARGES
Count 1 – Conspiracy to Distribute Methamphetamine (21 U.S.C. 841 & 846)
Maximum Penalty: Ten years minimum to life in custody; $1 million fine
Count 2 - Bringing in Undocumented Aliens for Financial Gain (8 U.S.C. 1324)
Maximum Penalty: Three years mandatory minimum to 20 years in custody; $250,000 fine
DEFENDANT Case No. 18MJ2147
Alejandro Barba Age: 27 San Diego, California
CHARGES
Conspiracy to Distribute Methamphetamine (21 U.S.C. 841 & 846)
Maximum Penalty: Ten years minimum to life in custody; $1 million fine
AGENCIES
Homeland Security Investigations
Drug Enforcement Administration
Customs & Border Protection
San Diego County Sheriff’s Department
*The charges and allegations contained in a complaint are merely accusations, and the defendants are no considered innocent unless and until proven guilty.
Five U.S. Navy Service Members Indicted for Seeking Big Insurance Payouts for Bogus InjuriesRead the Press Release
Assistant U. S. Attorneys Andrew P. Young (619) 546-7981 and Emily W. Allen (619) 546-9738
NEWS RELEASE SUMMARY – May 2, 2018
SAN DIEGO – The United States unsealed an indictment today that charges U. S. Navy service members Christopher Toups, Jason Toups, Kelene McGrath, Ernest Thompson, and Richard Cote with fraud, false claims and conspiracy to defraud the United States. The charges arise from a scheme wherein 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 service members 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. The five defendants, four former and one active members of the United States Navy, each fraudulently claimed that they were entitled to benefits of $100,000 for serious injuries they claimed to have suffered—but which in fact never occurred. To support their applications, each defendant submitted fabricated applications that included forged signatures and altered hospital records. Four of the five defendants received the $100,000 payouts before the government uncovered the scheme and froze the final payment.
“The TSGLI program is designed to protect hundreds of thousands of honest and hard-working service members. This indictment sends a message to those who seek to defraud the government out of the dollars meant to care for our seriously injured military members that they will be held accountable,” said U.S. Attorney Adam L. Braverman.
Defendants Jason Toups, Kelene McGrath, Ernest Thompson and Richard Cote were arraigned on the indictment before U.S. Magistrate Judge Ruben B. Brooks. Christopher Toups is expected to make his initial appearance before a federal judge in Georgia. Their next court appearance is scheduled for June 1 at 1:30 p.m. before Judge U.S. District Judge Janis L. Sammartino.
DEFENDANTS Case Number 18cr1674-JLS
Richard Cote Age: 43 Oceanside, CA
Kelene McGrath Age: 41 Jacksonville, FL
Christopher Toups Age: 40 Woodstock, GA
Jason Toups Age: 35 Gulfport, MS
Earnest Thompson Age: 44 Murrieta, CA
SUMMARY OF CHARGES
Count 1:
Conspiracy to Commit Wire Fraud – Title 18, U.S.C § 1349
Maximum penalty: 20 years’ imprisonment and fine of higher of $250,000 or double loss amount
Counts 2-7:
Wire Fraud - Title 18, U.S.C § 1343
Maximum penalty: 20 years’ imprisonment and fine of higher of $250,000 or double loss amount
Counts 8-12
Making a Fraudulent and False Claim - Title 18, U.S.C § 287
Maximum penalty: Five years in prison and fine of higher of $250,000 or double loss amount
AGENCIES
Naval Criminal Investigative Service
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.
Dark Web Vendor Enters Plea, Faces 10 Years for Internet Distribution of Deadly Carfentanil, Fentanyl, and Other DrugsRead the Press Release
Assistant U. S. Attorney Sherri Hobson (619) 961-0287
NEWS RELEASE SUMMARY – May 1, 2018
SAN DIEGO – Today, in federal court, San Diego resident Sky Justin Gornik, age 39, pleaded guilty to participating in a conspiracy to deliver, distribute and dispense controlled substances through the internet, in violation of Title 21, United States Code, Sections 841(h), 841(b)(1)(A), and 846. Gornik also admitted that he engaged in a conspiracy to launder drug proceeds using digital currencies, in violation of Title 21, United States Code, Sections 1956(a)(1)(A)(i) and 1956(h). He agreed to forfeit millions of dollars in digital or crypto currencies that resulted from illegal drug sales. The guilty plea triggered a 10-year minimum mandatory sentence.
As part of his guilty plea, Gornik admitted that from 2014 to June 7, 2017 (the date of his arrest by federal authorities), he bought and sold controlled substances on the “Dark Web” or “Darknet.” Employing anonymous screen names, Gornik used multiple Darknet marketplaces (including Alpha Bay, Trade Route, Abraxas, Evolution, Outlaw Market, and Dream Market) to buy and sell controlled substances. Specifically, Gornik admitted that he purchased and sold fentanyl and purchased the especially deadly opiate carfentanil, using a variety of digital currencies. Gornik also purchased and sold multiple other controlled substances, including thousands of vials of ketamine, oxycodone pills, Dimethyltryptamine (DMT), Psilocybin and Psilocin, Amphetamine, Buprenorphine, Methamphetamine, and Naloxone. To conceal his criminal activity, Gornik would then blend and transfer the various digital currencies to other virtual wallets and accounts.
According to court documents, agents seized 1.7 grams of carfentanil inside Gornik’s residence on June 7, 2017. Carfentanil is a synthetic opioid approximately 10,000 more potent than morphine and 100 times more potent than fentanyl. The 1.722 grams of carfentanil seized in Gornik’s residence could equate to over 86,000 fatal dosages. Gornik also possessed sheets of fentanyl gelatin tablets (approximately 100 tabs per sheet), which agents seized during the search. According to court documents, Gornik obtained 600-1200 fentanyl gel tablets each week for approximately two years from a Darknet vendor, now identified as Steven Wallace George. George, the Oklahoma Darknet vendor, manufactured the pure fentanyl that he obtained from China into gelatin tablets. George pled guilty in federal court to possession with intent to distribute methamphetamine and distribution of fentanyl and is currently awaiting sentencing (Case No. 17-090-R Western District of Oklahoma).
As part of Gornik’s guilty plea to laundering money and to distributing controlled substances by the internet, Gornik agreed to forfeit millions of dollars in digital or crypto currency including Bitcoins, Stratis, Ethereum, 2350 Monero, digital currency contained in Gornik’s Bittrex accounts, and digital currency contained in Gornik’s Poloniex accounts. Gornik admitted that these digital or crypto currency represented drug trafficking proceeds of the offense and were involved in the offense of money laundering over the Darknet.
The investigation was led by U.S. Postal Inspectors in San Diego with the assistance of Special Agents of Homeland Security Investigations.
“A speck of carfentanil the size of a grain of sand can kill you, making this substance extremely deadly. Here law enforcement agents took 86,000 potentially fatal carfentanil doses out of Dark Web circulation, along with many other dangerous drugs, including fentanyl. We will vigorously prosecute dealers and Dark Web vendors who cavalierly endanger our community’s residents and first responders by selling deadly opioids,” stated U.S. Attorney Adam Braverman. “And Dark Web vendors beware: your cryptocurrencies are not safe from seizure.”
“The Postal Inspection Service is dedicated to protecting the American public and has made battling synthetic opioids in the mail one of its highest priorities. By working closely with other law enforcement partners in operations like this one, we can prevent dangerous drugs from reaching the communities we serve,” said Nichole Cooper, Inspector in Charge of the Los Angeles Division (to include San Diego).
“HSI is committed to working with our law enforcement partners to combat the trafficking of dangerous fentanyl and other deadly opioids on the Dark Web,” said Dave Shaw, Special Agent in Charge for HSI San Diego. “I commend the federal agents who worked tirelessly to uncover Gornik’s illicit financial scheme and transnational drug trafficking activities.”
Gornik pled guilty today before Magistrate Judge Bernard G. Skomal, and will be sentenced by District Court Judge Anthony Battalgia on July 16, 2018 at 9 a.m.
U.S. Attorney Braverman would like to specially thank the United States Postal Inspection Service, Homeland Security Investigations, the Internal Revenue Service, and DOJ Money Laundering & Asset Recovery Section for their efforts.
DEFENDANT Criminal Case No.17CR2796AJB
SKY JUSTIN GORNIK Age: 39 San Diego, California
SUMMARY OF CHARGES
Count 1 (Conspiracy to Deliver, Dispense, and Distribute Controlled Substances By Internet
Maximum penalty: 10 year minimum mandatory to life, fine of $1,000,000, 5 years of supervised release
Count 2 (Conspiracy To Launder Money)
Maximum penalty: 20 years; fine of $500,000, 3 years of supervised release
Criminal Forfeiture As To Count 1
Forfeiture to the United States of all property, real and personal, that constitutes or is derived from proceeds of the offense, and all property, real and personal, that was used to commit or to facilitate the commission of the offense.
Criminal Forfeiture As To Count 2
Forfeiture to the United States of all property, real and personal, involved in the offense.
AGENCIES
United States Postal Inspection Service, San Diego
United States Postal Inspection Services, Cyber Unit, Washington D.C.
United States Postal Inspection Service, Oklahoma
Homeland Security Investigations
Internal Revenue Service, Criminal Investigations
San Diego Police Department
San Diego District Attorney’s Office
U.S. Department of Justice, Criminal Division, Money Laundering & Asset Recovery Section