Southern District of California
Press releases recorded for this federal judicial district.
Supervisory Border Patrol Agent Convicted of Lying to Federal Grand JuryRead the Press Release
Assistant U.S. Attorney Nicholas Pilchak (619) 546-9709 or Assistant U.S. Attorney Michael A. Deshong (619) 546-9290
NEWS RELEASE SUMMARY – April 27, 2018
SAN DIEGO – Supervisory Border Patrol Agent David Wayne Skinner was convicted Thursday of making false statements to a federal grand jury in connection with an investigation of a benefits fraud scheme.
At trial, the jury heard evidence that Skinner’s accomplices, former U.S. Marine Corps reservist Major Jason Wild and former Lieutenant Colonel Michael Strom, defrauded the Marine Corps out of $205,628 between 2006 and 2010, according to evidence admitted at trial. Skinner assisted with the scheme by signing a fake lease agreement used by Strom to make the claims, and by trying to call the military authorities responsible for paying the claim.
Witnesses explained how Strom filed two years’ worth of false claims with the Marine Corps, pretending to rent Wild’s home from Skinner. All of Strom’s claims listed Skinner as the landlord for Wild’s property, even though trial evidence established that Skinner never received any of the $98,716 of rent that Strom claimed to have paid him. Instead, Strom paid Skinner $1,000 during the duration of the scheme.
Strom pleaded guilty to wire fraud conspiracy and making a false claim in 2016; Wild was convicted in November 2016 after a separate trial. Both men were sentenced to prison terms, and the pair has repaid the entire $205,628 back to the Marine Corps.
Agents first interviewed Skinner about the fake lease arrangement in August 2013. Shown a copy of the lease agreement, Skinner denied ever seeing it. He again denied authorizing the lease in an interview with agents and a prosecutor in April 2015. Finally, Skinner testified in the grand jury in September 2015 and once again denied ever seeing the fake lease agreement before agents first showed it to him in 2013. When shown a copy of the agreement with his signature on it in the grand jury, Skinner admitted the signature was his but could not explain how it had arrived on a document he had never seen. Skinner also denied ever receiving any money from Strom, even though the two had spoken by telephone the day Strom wrote Skinner the check for $1,000.
After a three-day jury trial, the jury found that Skinner knowingly lied when issuing his denials about the lease agreement to the grand jury. He was acquitted of a separate count charging him with falsely denying receiving money from Strom.
Skinner’s sentencing hearing is set for August 6, 2018 at 9:00 a.m. before Judge Anthony J. Battaglia.
“America’s entire justice system depends upon witnesses giving honest testimony under oath,” said U.S. Attorney Adam L. Braverman. “This jury verdict is a powerful reminder that any person who takes the oath and knowingly lies will be held accountable—whether they are a civilian or a career law enforcement officer.” U.S. Attorney Braverman also commended the outcome as the result of the years-long close coordination between the Defense Criminal Investigative Service (DCIS), the Naval Criminal Investigative Service (NCIS), the Department of Homeland Security, Office of the Inspector General (DHS OIG), and the Naval Audit Service.
“This conviction should send a clear message that DHS OIG will aggressively investigate DHS employees who brazenly defy federal laws and betray the public trust,” declared DHS OIG Special Agent in Charge Amanda Thandi.
“Today’s guilty verdict in the trial of current U.S. Border Patrol Supervisory Agent and former U.S. Marine Corpsman David W. Skinner for perjuring himself before a federal grand jury sends a clear message that dishonesty in a federal criminal investigation will not be tolerated,” said Chris D. Hendrickson, Special Agent in Charge of the DCIS Western Field Office. “The conduct of Agent Skinner is particularly reprehensible given that he is serving as a federal law enforcement official. Those who serve in the Government have an obligation to uphold the public's trust or pay the consequences. The efforts of DCIS, the Naval Criminal Investigative Service, the Naval Audit Service, Department of Homeland Security, and the Department of Justice resulted in a just verdict.”
“NCIS will continue to work with our law enforcement partners to hold responsible those who put personal gain above their responsibility to the nation,” said Belinda Saunders, Special Agent in Charge of the NCIS Southwest Field Office. “A law enforcement representative who so readily casts aside the public trust placed in them and lies under oath needs to be held accountable for his actions.”
DEFENDANT—Case Number: 17-cr-1464-AJB Next Court Date
David Wayne Skinner Sentencing August 6, 2018
SUMMARY OF CHARGES
Count 2: False Declaration to Grand Jury, in violation of Title 18, United States Code, Section 1623
Maximum Penalties: 5 years in prison, 3 years supervised release, and a $250,000 fine
AGENCIES
Department of Homeland Security, Office of Inspector General
Defense Criminal Investigative Service
Naval Criminal Investigative Service
Seller of Counterfeit and Unapproved Pharmaceuticals Sentenced to PrisonRead the Press Release
Assistant U.S. Attorney Melanie K. Pierson (619) 546-7976
NEWS RELEASE SUMMARY – April 27, 2018
SAN DIEGO – Tijuana resident Alejandro Hernandez was sentenced in federal court today to 30 months in custody for conspiring to smuggle and sell counterfeit and unapproved drugs. The defendant was also ordered to pay restitution of $9,750 to Eli Lilly and Co., for losses related to his sale of counterfeit products.
During a long-term undercover investigation, agents purchased counterfeit or unapproved pharmaceuticals from Hernandez on six separate occasions – oftentimes in a Chula Vista parking lot, paying for them with cash. The drugs were all labeled in the Spanish language, and included products such as Buscapina, Prodolina and Neo-Melubrina, which are not approved by the Food and Drug Administration for use in the United States. Hernandez also provided counterfeit versions of several drugs, including Viagra and Cialis.
Hernandez told undercover operatives that his boss in Mexico had other employees, including a driver who would walk or drive across the border with the pharmaceuticals. Surveillance indicated that Hernandez stored the illegal pharmaceuticals at various self-storage units near the border. Agents arrested Hernandez earlier this year as he made a delivery of pharmaceuticals, and executed a search warrant at one of his self-storage units. The search yielded over $250,000 of unapproved and counterfeit pharmaceuticals in the storage unit, as well as ledgers documenting years of sales.
“This office is committed to protecting the health and safety of the citizens in our district by keeping counterfeit and unapproved prescription drugs off the market, and prosecuting individuals who seek to profit from the illegal distribution of such drugs,” said U.S. Attorney Adam L. Braverman.
“U.S. consumers rely on the FDA’s scientific review to ensure that their drugs are safe and effective,” said FDA Office of Criminal Investigations Special Agent in Charge Lisa Malinowski. “The mission that drives our investigations is protecting patients from unsafe drugs. As there are no assurances that unapproved products from foreign sources are safe or effective, we must protect consumers from these foreign unapproved medicines. The FDA will continue to pursue and bring to justice those who violate the Federal Food Drug and Cosmetic Act by introducing unapproved and misbranded drugs into interstate commerce.”
“Homeland Security Investigations agents, our law enforcement partners, and prosecutors worked diligently to investigate Hernandez's criminal activity,” said David Shaw, Special Agent in Charge of HSI in San Diego. “Today’s sentencing shows our commitment to bring to justice those who endanger the public by illegally importing and distributing counterfeit pharmaceuticals.”
DEFENDANT Criminal Case No. 18cr0380-DMS
Alejandro Hernandez Age: 54 Tijuana, Mexico
SUMMARY OF CHARGES
Count 1
Conspiracy, 18 U.S.C. § 371
Maximum penalty: 5 years in custody, fine of $250,000 or twice the gross gain or loss caused by the offense, restitution, three years of supervised release
AGENCIES
Homeland Security Investigations
Food and Drug Administration, Office of Criminal Investigations
U.S. Border Patrol Agent Sentenced for Drug SmugglingRead the Press Release
Assistant U. S. Attorneys David Leshner (619) 546-7921 and Matthew Brehm (619) 546-8983
NEWS RELEASE SUMMARY – June 22, 2017
SAN DIEGO – U.S. Border Patrol Agent Noe Lopez was sentenced in federal court today to 70 months in prison for attempting to smuggle methamphetamine and cocaine while on duty in exchange for cash.
Lopez pleaded guilty in June of 2017 to attempted distribution of methamphetamine and cocaine. In November 2016, Lopez agreed to a plan with a confidential source whereby he would retrieve backpacks containing controlled substances from the north side of the United States/Mexico border fence while on duty with the Border Patrol. Lopez admitted that he agreed to transport the backpacks in his Border Patrol vehicle and deliver them to the source in exchange for thousands of dollars.
“This is a fitting sentence for a law enforcement agent who, instead of policing drug traffickers, joined them,” said U.S. Attorney Adam L. Braverman. “Noe Lopez will pay a high price for betraying his fellow agents and his badge.”
FBI Special Agent in Charge John Brown said, “This case illustrates the power of our government agencies working together by bringing our resources, strengths, and intelligence to bear in order to root out corruption, wherever it may be. Today, this sentencing shows the results of one team working together to maintain the safety and security of our nation, particularly at our international border.”
“Any instance of criminal activity drives the motivation of all law enforcement officers to pursue justice,” said San Diego Sector Chief Patrol Agent Rodney S. Scott. “This is especially true when one of our own commits the criminal act. The arrest and subsequent guilty plea by former Border Patrol agent Noe Lopez tarnished the badge that our agents wear proudly and professionally represent every day. Noe Lopez violated the trust of the public and the law enforcement community he betrayed. Noe Lopez is the anomaly; he does not represent the professionalism, honor and distinction that Border Patrol agents exhibit everyday safeguarding our nation.”
On November 30, 2016, Lopez purchased three backpacks that would be used to transport the controlled substances and gave the backpacks to the source. They agreed that on December 6, 2016, Lopez would retrieve a backpack containing six pounds of methamphetamine while on duty with the Border Patrol and deliver the backpack to the source. Lopez told the source where to place the backpack containing methamphetamine on the north side of the United States/Mexico border.
According to Lopez’s admissions in his plea agreement, on December 6, 2016, undercover DEA agents placed a backpack (one of the three backpacks purchased by Lopez) containing six pounds of a substance resembling methamphetamine near the prearranged location. Lopez drove to the location in his Border Patrol vehicle and retrieved the backpack. He returned to the Border Patrol Station and placed the backpack in his personal vehicle. At the conclusion of his Border Patrol work shift, Lopez met the source at a parking lot in Chula Vista, where Lopez gave the source the backpack containing what Lopez believed to be six pounds of methamphetamine.
On December 7, 2016, the source paid Lopez $3,000 for retrieving and delivering the purported methamphetamine. In a recorded conversation, Lopez discussed the area known as “Goat Canyon” where he was to be assigned the following day. Lopez said it was one of the areas he preferred to have the drugs dropped. “Honestly, the thing is that there aren’t—there aren’t any cameras. Nothing, nothing, nothing.”
This scenario was repeated on December 8, 2016, except the backpack purportedly contained seven kilograms of cocaine. Toward the end of Lopez’s shift, agents dropped seven kilograms of simulated cocaine in another backpack previously provided by Lopez. Lopez retrieved the backpack and placed it in his Border Patrol vehicle. At the end of his shift, Lopez transferred the backpack to his personal vehicle. Lopez delivered the backpack to the source. Agents later confirmed that the backpack contained the simulated cocaine that agents had dropped at the pre-determined location.
The following day, December 9, the source gave Lopez $7,000. In the recorded meeting, Lopez went over the drop location. Lopez made clear that the source should trust him to carry out the smuggling venture because: “If I’m saying it, it’s because I’m taking the risk. If I’m saying, ‘cross now,’ that means that I am taking the responsibility for them to cross.” In response to the source’s concern that his courier would get caught if he jumped over the fence and dropped the drug-laden backpack in the requested location, Lopez responded, “No, there is nobody that will report them. Me. That’s why I’m supposed to be there. There’s nobody—there are no cameras, there are no sensors-there’s nothing. There’s nothing. That’s why I’m telling you that this—this area is perfect.”
On December 14, 2016, Lopez again switched duty areas with another agent so that he could be in a favorable area for a third smuggling event. Lopez then contacted the CS and indicated that he was scheduled to work in a favorable location for the drug drop. The drop did not occur, and Lopez was arrested at his Border Patrol Station.
Anyone with information about corruption is asked to contact the FBI at 1-877-NO-BRIBE (662-7423), or submit a tip online at TIPS.FBI.GOV.
DEFENDANT Case Number 17cr0086
Noe Lopez Age: 37 Chula Vista, CA
SUMMARY OF CHARGES
Attempted Distribution of Methamphetamine and Cocaine, in violation of 21 U.S.C. 841 (a) (1) and 846
Maximum penalty: Life in prison and $10 million fine
AGENCIES
Federal Bureau of Investigation
U.S. Drug Enforcement Agency
U.S. Border Patrol
Navy Sailor Arrested for Stealing Grenades from ShipRead the Press Release
Assistant U.S. Attorney Michelle Pettit (619) 546-7972
NEWS RELEASE SUMMARY – April 24, 2018
SAN DIEGO – Gunner's Mate Second Class Aaron Booker was arraigned in federal court today on charges that he possessed 20 stolen concussion hand grenades that went missing from San Diego-based guided-missile destroyer USS Pinckney.
Booker, who had been stationed in San Diego when the alleged crime took place, was taken into custody this morning at his new post in Great Lakes, Illinois by the Naval Criminal Investigative Service. The United States is seeking removal of Booker to face charges in San Diego.
According to a complaint, USS Pinckney personnel discovered 20 grenades missing from their storage crates during a routine inventory of explosives on February 8, 2017. Designated personnel are required to conduct regular temperature checks in the locker that houses the crates, but no personnel should have accessed the crates themselves outside of an inventory. Booker was a member of the ship’s Weapons Department, and between November 2016 and January 2017, he conducted temperature checks for that locker on five separate occasions. The United States alleges that Booker removed these grenades from their storage crate and transported them off the ship. He officially detached from the ship on February 14, 2017, at which point he left San Diego and drove to his new duty station in Great Lakes, Illinois.
On April 20, 2017, an off-duty law enforcement officer discovered a black backpack on the side of the road leaning against a guardrail on Interstate 15 in northwest Arizona. The bag was a standard military issued backpack with “GM2 BOOKER” handwritten on a tag inside the bag, and it contained 18 of the grenades that were missing from USS Pinckney. Law enforcement is searching for the two missing grenades.
According to the complaint, Booker acknowledged to investigators that he drove that route before reporting to his new duty station in early March. However, he provided conflicting statements related to if and how he had seen or touched the grenades.
“A backpack full of grenades on the side of the road is obviously extremely dangerous and could have had resulted in injuries or death,” said U.S. Attorney Adam L. Braverman said. “The theft of explosives is a very serious offense, particularly if it is carried out by an insider with access to military weapons and secrets.”
“Navy sailors are trusted with maintaining dangerous and sensitive equipment onboard naval vessels to ensure the Navy is always prepared to protect and defend the interests of the United States,” said Belinda Saunders, Special Agent in Charge of the NCIS Southwest Field Office. “It is a violation of that trust for any service member to steal from the United States Navy for any reason. This case is particularly troubling given the explosive nature of what was stolen, which could have seriously injured others.”
Booker is scheduled to appear for a detention hearing in the Northern District of Illinois before he is transferred to San Diego.
DEFENDANT Case No. 18MJ1873
Aaron Booker Age: 31 Waukegan, Illinois
SUMMARY OF CHARGE
Possession of Stolen Explosives, in violation of Title 18, United States Code, Sections 842(h) and 844(a)(1)
Maximum penalties: 10 years in prison and a $250,000 fine
INVESTIGATING AGENCY
Naval Criminal Investigative Service
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
San Diego Unified School Teacher Charged with Distribution of Child PornographyRead the Press Release
Assistant U. S. Attorney Janet A. Cabral (619) 546-8715
NEWS RELEASE SUMMARY – April 19, 2018
SAN DIEGO – David Weaks, a fifth grade teacher at Rosa Parks Elementary School in the San Diego Unified School District, was arrested and charged yesterday with distributing pornographic images of young girls, including a toddler.
Weaks made his initial appearance in federal court yesterday afternoon before U.S. Magistrate Judge Andrew G. Schopler. The government asked that Weaks be held without bond on grounds that he is a danger to the community and a flight risk. Judge Schopler scheduled a detention hearing for Tuesday April 24 at 2 p.m. to consider the matter.
Beginning in late March, Homeland Security Investigations agents were conducting an investigation of individuals suspected of making files of child pornography available for sharing on the Internet through the use of a peer-to-peer file sharing program. On April 4, 2018, agents connected to a computer with an internet protocol address associated with Weaks’ residence in San Diego. Agents were able to download two videos directly from the IP address, both of which showed young minor females engaging in sex acts with adult males.
Homeland Security agents, along with other law enforcement officers associated with the San Diego Internet Crimes Against Children Task Force, searched Weaks’ home yesterday morning pursuant to a federal warrant and seized multiple computer and other digital items which were found to contain child pornography.
The Internet Crimes Against Children Task Force Program is a national network representing over 4,500 federal, state, and local law enforcement and prosecutorial agencies, all working to combat the sexual exploitation of children through the internet. Homeland Security Investigations, is a member of the Task Force.
DEFENDANTS Case Number 18mj1862
David Gordon Weaks Age: 59 San Diego, CA
SUMMARY OF CHARGES
Distribution of Images of Minors Engaged in Sexually Explicit Conduct – Title 18, U.S.C., Section 2252(a)(2)
Maximum penalty: 20 years in prison, with a mandatory minimum of five years in prison; $250,000 fine
AGENCY
Homeland Security Investigations
Internet Crimes Against Children Task Force
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
San Diego Laboratory Agrees to Pay $2 Million to Settle False Claims Act Allegations Related to Unnecessary Breast Cancer TestingRead the Press Release
Biotheranostics Inc. has agreed to pay $2 million to resolve allegations that it submitted and caused the submission of false claims to Medicare for Breast Cancer Index (BCI) tests that were not reasonable and necessary for the diagnosis and treatment of breast cancer, the Department of Justice announced today. Biotheranostics is a diagnostic laboratory testing company located in San Diego, California.
“Health care providers are responsible for ensuring that the services they provide to Medicare beneficiaries are both reasonable and necessary,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “Laboratories that knowingly submit claims for non-reimbursable services will be held accountable.”
By statute, Medicare can only pay for laboratory tests that are reasonable and necessary for the diagnosis or treatment of a patient’s illness or injury. The United States alleged that Biotheranostics knowingly promoted and performed the BCI test for breast cancer patients who had not been in remission for five years and who had not been taking tamoxifen, and thus for whom the test was not reasonable and necessary based on published clinical trial data and clinical practice guidelines.
“Fighting health care fraud will continue to be a priority of this office,” said United States Attorney Adam L. Braverman for the Southern District of California. “As this settlement demonstrates, we will vigorously investigate and hold responsible laboratories and other providers that choose to submit claims to federal health care programs for unauthorized or unnecessary services.”
The United States’ investigation was a coordinated effort by the Civil Division of the Department of Justice, the U.S. Attorney’s Office for the Southern District of California, and the Department of Health and Human Services Office of Inspector General.
The claims settled by this agreement are allegations only; there has been no determination of liability.
Tennessee Doctors Plead Guilty in $65 Million TRICARE FraudRead the Press Release
Assistant U. S. Attorneys Benjamin J. Katz and Mark W. Pletcher (619) 546-9604 and (619) 546-9714
NEWS RELEASE SUMMARY – April 11, 2018
SAN DIEGO – Two doctors, Carl Lindblad and Susan Vergot, pleaded guilty in federal court today, admitting that they participated in a health care fraud scheme that bilked TRICARE – the health care program that covers United States service members – out of more than $65 million by prescribing thousands of exorbitantly expensive compounded medications to patients that they never saw or examined.
Drs. Lindblad and Vergot entered their guilty pleas before U.S. Magistrate Judge Mitchell D. Dembin. Both pleaded guilty to conspiracy to commit health care fraud. Their sentencings are scheduled for June 29, 2018 before U.S. District Court Judge Janis L. Sammartino.
Compounded medications are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Although compounded drugs are not approved by the Food and Drug Administration (FDA), they are properly prescribed when a physician determines that an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient requires a particular dosage or application or is allergic to a dye or other ingredient.
According to the guilty pleas, a team of individuals worked to recruit and pay Marines, primarily from the San Diego area, and their dependents – all TRICARE beneficiaries – to obtain compounded medications that would be paid for by TRICARE. This information was sent to Choice MD, the Tennessee medical clinic that employed Drs. Lindblad and Vergot. Drs. Lindblad and Vergot then wrote prescriptions for the TRICARE beneficiaries, despite never examining the patients in person. Once signed by the doctors, these prescriptions were not given to the beneficiaries, but sent directly to particular pharmacies controlled by co-conspirators, which filled the prescriptions and billed TRICARE at exorbitant prices.
Josh Morgan, a former Marine from San Diego, pleaded guilty last month to Conspiracy to Commit Health Care Fraud for his role in recruiting TRICARE beneficiaries to fraudulently receive these prescriptions.
Between December 2014 and May 9, 2015 – the day that TRICARE stopped reimbursing for compounded medications – Drs. Lindblad and Vergot authorized 4,442 total prescriptions. Over this time, their co-conspirators billed TRICARE $65,679,512 for these prescriptions.
Lindblad and Vergot represent the fifth and sixth defendants charged in relation to this fraud scheme. In addition to Morgan, Jimmy and Ashley Collins, the owners of Choice MD, and CFK, Inc., the owner of a co-conspirator pharmacy, were indicted in March 2018 on charges of Conspiracy to Commit Health Care Fraud and Illegal Payments of Remunerations. That case remains pending.
DEFENDANTS Case Number 18-cr-0432-JLS
Carl Lindblad Age: 53 Cleveland, TN
Susan Vergot Age: 31 Cleveland, TN
SUMMARY OF CHARGES
Conspiracy to Commit Health Care Fraud – Title 18, U.S.C § 1349
Maximum penalty: 10 years’ imprisonment and fine of higher of $250,000 or double loss amount
AGENCY
Defense Criminal Investigative Service
Naval Criminal Investigative Service
IRS Criminal Investigation Division, Gulfport, MS
Federal Bureau of Investigation - Jackson, MS Field 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.
Lakeside Gang Member Indicted in Fentanyl Overdose DeathRead the Press Release
Assistant U. S. Attorney Mark Conover (619) 546-6763, Assistant U.S. Attorney David P. Finn (619) 546-7342
NEWS RELEASE SUMMARY – April 11, 2018
SAN DIEGO – Documented Lakeside gang member Uriah Odish was indicted by a federal grand jury for selling fentanyl that led to the death of a 25-year-old La Mesa woman, identified in court documents only as T.H., who was found dead in her home on January 23.
“There is a raging opioid epidemic in this country, and we want dealers to be on notice: Every time we have an overdose death, we are going to come looking for you,” said U.S. Attorney Adam Braverman. “Attorney General Jeff Sessions has directed the Department to use all available criminal and civil tools to combat this deadly epidemic. We are firmly committed to this endeavor and will do everything in our power to stop these tragic losses.”
“By holding dealers accountable for the deaths of overdose victims, we bring justice to loved ones and reaffirm to all those dealing in death that we will not let it go unpunished,” said DEA Special Agent in Charge Karen I. Flowers.
Odish, 28, made an appearance in federal court this morning before U.S. Magistrate Judge Mitchell D. Dembin. The defendant declined to seek bond and remains in custody. His next hearing is scheduled for May 4.
Odish is the fourth person since January to be charged in the Southern District of California with Distribution of Fentanyl Resulting in the Death. The other cases include:
- On March 16, 2018, Corey Green was charged with distribution of fentanyl resulting in the death of a Fallbrook man. Two days before he was found dead on the floor of his home, he’d told his wife he’d been sober for 100 days. She called 911 but it was too late.
- On March 2, 2018, Kyle Shephard was charged with distribution of fentanyl resulting in the death of a 25-year-old Marine Corporal at Camp Pendleton. According to the complaint, Shephard distributed fentanyl pills to the Marine Corporal with Shephard acknowledging that the pills could lead to an overdose.
- Max Gaffney was arrested January 29, 2018, and charged with distribution of heroin resulting in death. According to the indictment, Gaffney distributed heroin on February 16, 2017, which resulted in the death of a person identified only as K.R.
According to court records, Odish has numerous arrests and at least one prior drug felony. As a result of his prior felony drug offense, Odish could face a mandatory sentence of life in prison for the distribution of fentanyl resulting in death.
The United States faces the deadliest drug crisis in history. Approximately 64,000 Americans lost their lives to drug overdoses in 2016 – the highest drug death toll and the fastest increase in that death toll in American history. This epidemic is being driven primarily by opioids – prescription painkillers, heroin, and synthetic drugs like fentanyl. For Americans under the age of 50, drug overdoses are now the leading cause of death.
In February, Braverman announced the appointment of a criminal and civil coordinator to implement our strategy to combat opioids. The newly designated Opioid Coordinators will make prosecution of all prescription opioids, heroin and fentanyl a top priority, including civil cases involving illegal diversion and unlawful prescribing of these drugs.
The United States Attorney’s Office is working closely with the San Diego County District Attorney’s Office, the San Diego County Sheriff’s Office, the Drug Enforcement Administration and our other federal, state and local law enforcement partners to investigate and prosecute these cases. Braverman thanked the La Mesa Police Department for its support in this new case.
For those who suffer from addiction, please know there is help. Call the Crisis line at 888-724-7240; it’s always open.
DEFENDANT Case Number 18-CR-1812-BTM
Uriah Odish Age: 28
SUMMARY OF CHARGES
Distribution of Fentanyl Resulting in Death – Title 21, U.S.C., Section 841(b)(1)(C)
Maximum penalty: Mandatory minimum 20 years in prison up to life
AGENCY
La Mesa Police Department
U.S. Drug Enforcement Administration, Narcotics Task Force
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
- On March 16, 2018, Corey Green was charged with distribution of fentanyl resulting in the death of a Fallbrook man. Two days before he was found dead on the floor of his home, he’d told his wife he’d been sober for 100 days. She called 911 but it was too late.
Sinaloa Cartel Trafficker Sentenced; Jesus Manuel Salazar-Nunez Sent Tractor-Trailers Packed with Methamphetamine, Cocaine and Heroin into the United StatesRead the Press Release
Assistant U.S. Attorney Matthew J. Sutton (619) 546-8941
NEWS RELEASE SUMMARY – April 6, 2018
SAN DIEGO – Sinaloa Cartel drug trafficker Jesus Manuel Salazar-Nunez was sentenced to 135 months in prison today and 5 years of supervised release for his role in a drug trafficking cell responsible for shipping methamphetamine, cocaine, and heroin from Mexico for importation into San Diego.
According to court records, in 2015, Drug Enforcement Administration agents intercepted the communications of Salazar-Nunez and other high-level Sinaloa Cartel members making arrangements for tractor-trailers to travel from Sinaloa, Mexico to Baja California, Mexico, carrying methamphetamine, cocaine, and heroin hidden among canned food and drinks, frozen shrimp and vegetable boxes and other household goods. Once they arrived at a Tijuana warehouse, the narcotics were unloaded, distributed to couriers and smuggled into San Diego, California.
Salazar-Nunez recruited drivers, made arrangements with narcotics customers to use their transportation services, deposited narcotics proceeds into various Mexican bank accounts, and designed items to make it appear that the tractor-trailer loads contained all legitimate items. On September 16, 2015, agents arrested Salazar-Nunez when he flew into Hartsfield-Jackson Atlanta International Airport from Guadalajara, Mexico.
On August 14, 2017, the day scheduled for his trial, Salazar-Nunez entered a guilty plea before United States District Court Judge Dana M. Sabraw to an indictment charging him with conspiracy to import methamphetamine, cocaine, and heroin into the United States. As part of his guilty plea in the case, Salazar-Nunez admitted to making arrangements for four tractor-trailer shipments. Thanks to the cooperation of United States and Mexican law enforcement, all four of these tractor-trailers were seized in March, April, and August of 2015 in Mexico.
In court today, Judge Sabraw explained that a severe sentence was warranted because of the enormous size and lengthy scope of Salazar-Nunez’s drug trafficking activities. Noting that Salazar-Nunez used his education and professional achievements, as a college educated businessman, to help move hundreds of kilograms of narcotics month after month from Mexico to San Diego, Judge Sabraw said to Salazar-Nunez: “You are not an ordinary defendant….and you need to recognize how wrong it was.”
“Today marks yet another severe blow to the operations of the Sinaloa Cartel,” stated United States Attorney Adam L. Braverman. “The Cartel’s drug trafficking empire continues to be diminished and their power eroded with this prosecution. The dedicated efforts of our law enforcement partners in San Diego and Mexico, who greatly assisted with these seizures, shows our continued commitment to dismantle the Sinaloa Cartel.”
“Our communities might not know Mr. Salazar-Nunez by name, but they are very familiar with living in the aftermath of lives destroyed by drug addiction,” said DEA San Diego Special Agent in Charge Karen Flowers. “Addiction fed by his greed has robbed many San Diegans of their future. The San Diego law enforcement community will continue to keep the pressure on and save lives.”
This case is part of a five-year investigation led by the Southern District of California, that, in total, has resulted in charges against over 125 people and has had a significant impact on the worldwide operations of the Sinaloa Cartel. This investigation has also offered one of the most comprehensive views to date of the inner workings of one of the world’s most prolific, violent and powerful drug cartels. Cartel members and associates were targeted in this massive investigation involving multiple countries, numerous law enforcement agencies around the United States, a number of federal districts and over 250 court-authorized wiretaps in this district alone.
This 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.
The United States was represented in court by Assistant U.S. Attorney Matthew J. Sutton.
DEFENDANT Criminal Case No. 15-CR-2380-DMS
Jesus Manuel Salazar-Nunez Age: 35 Culiacan, Mexico
SUMMARY OF CHARGES
Conspiracy to Import Controlled Substances, in violation of Title 21 U.S.C. §§ 952, 960 and 963. Term of custody including a mandatory minimum 10 years and up to life imprisonment, $10,000,000 fine and 5 years supervised release.
AGENCIES
Drug Enforcement Administration
Homeland Security Investigations
Customs and Border Protection, Office of Field Operations
Customs and Border Protection, Office of Border Patrol
United States Marshals Service
Internal Revenue Service
Federal Bureau of Investigation
United States Attorney’s Office, Northern District of Georgia
Department of Justice, Organized Crime Drug Enforcement Task Forces
Department of Justice, Office of Enforcement Operations
Department of Justice, Office of International Affairs
San Diego Law Enforcement Coordination Center
Mexico’s Secretaria de la Defensa Nacional (SEDENA)
Mexico’s Procuraduria General de la Republica (PGR)
Rancho Santa Fe Couple Sentenced to Prison for Roles in Concealing $1.5 Million in Bankruptcy Assets, Evading $6 Million in Taxes and Committing Bank FraudRead the Press Release
Assistant U. S. Attorneys Michael J. Heyman and Joseph J.M. Orabona
NEWS RELEASE SUMMARY – April 6, 2018
SAN DIEGO – On April 5, 2018, J. Douglass Jennings, a disbarred California attorney, was sentenced to 34 months in federal prison for committing bankruptcy fraud (concealment of assets) and for tax evasion. His wife Peggy Jennings was sentenced to four months in federal custody for committing bank fraud.
Mr. Jennings once touted in a commercial that he managed “one of the nation’s leading estate and tax planning law firms.” He appeared on talk-shows and authored two books, including what he claimed in court filings was “highly regarded and one of the best and most complete estate planning treatises to date.” Mr. Jennings also practiced what he described in an advertisement as a “faith-based” approach to financial planning, with some referring to him as “Uncle Doug.”
In January 2010, Mr. and Mrs. Jennings filed a voluntary bankruptcy petition in the United States Bankruptcy Court for the Southern District of California, In re J. Douglass Jennings, Jr. and Peggy L. Jennings, Case No. 11-04720. On September 11, 2017, Mr. Jennings pleaded guilty to devising a scheme to defraud his unsecured creditors by concealing numerous assets and income during the bankruptcy. Those assets and income, valued at nearly $1.5 million, included:
- A stock interest in a real-estate venture valued at approximately $1 million;
- A 53.2 foot luxury yacht known as the “Sea Eagle” valued at approximately $150,000;
- Antique silver items valued at approximately $165,139; and
- $138,694 in salary payments and other benefits in violation of a Bankruptcy Court order.
Mr. Jennings also pleaded guilty to evasion of tax payments in the amount of $5,927,093.00.
At the sentencing hearing, the Honorable Gonzalo Curiel quoted one of the victims of the fraud who described Mr. Jennings as having “manufactured a diabolical morass of massive complexity around his bankruptcy.” Judge Curiel further described Mr. Jennings’ conduct as “callous, uncaring, and deceitful.” Mr. Jennings was sentenced to 34 months in custody for this conduct and his lack of remorse. The sentence was also imposed to deter Mr. Jennings from committing fraudulent conduct in the future since he was already “planning his comeback and planning his resurrection.” The judgment additionally included an order to pay restitution to victims in the amount of $1,453,833.00 and restitution to the IRS in the amount of $5,927,093.00.
Peggy Jennings was sentenced to bank fraud in the related action, United States v. Peggy L. Jennings, Case No. 17CR2306-GPC. Mrs. Jennings had forged her mother’s signature on loan documents, fraudulently transferred funds into her mother’s bank accounts to make it appear that her mother had substantial income, submitted false documents to the bank, and intended to cause the bank losses exceeding more than $226,000. Mrs. Jennings was sentenced to 4 months in custody and ordered to pay a $50,000 fine and $145,481.71 in restitution.
“The bankruptcy system is designed to provide honest debtors a fresh start,” said United States Attorney Adam L. Braverman. “Manipulation of that system through fraudulent acts can cause significant harm and suffering to innocent victims, and will be vigorously pursued.”
“Mr. Jennings’ abuse of his position and manipulation of the system for his own personal gain will not be tolerated,” said IRS-CI Special Agent in Charge R. Damon Rowe. “This case is an example of fraud and deceit at the highest level. Jennings utilized his reputation and experience to lure victims and perpetrate his scheme. Investigating these types of cases and ensuring those responsible are brought to justice continue to be a top priority for the IRS- Criminal Investigation Division.”
“This sentencing reinforces the FBI’s commitment to restoring the public’s faith in the bankruptcy system through the unwinding of this intricate web of deception, bringing this husband and wife team to justice,” said FBI Special Agent in Charge John A. Brown. “Through our partnerships with the Internal Revenue Service and other government institutions, the FBI will continue to pursue and prosecute criminals who defraud American citizens and the U.S. Government.”
“I am grateful to U.S. Attorney Braverman and our law enforcement partners for their strong commitment to combating fraud and abuse in bankruptcy cases, as evidenced by these successful criminal prosecutions,” stated Tiffany L. Carroll, Acting U.S. Trustee for the Southern District of California, Hawaii, Guam, and the Northern Mariana Islands (Region 15). The U.S. Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. Region 15 is headquartered in San Diego with offices in Honolulu and Guam.
DEFENDANT Case Number 17CR2722-GPC
J. Douglas Jennings, Jr. Age: 73 Rancho Santa Fe, CA
SUMMARY OF CHARGES FOR J. DOUGLASS JENNINGS:
Bankruptcy Fraud – Title 18, U.S.C., Section 152(1)
Evasion of Tax Payment – Title, 26 U.S.C., Section 7201
DEFENDANT Case Number 17CR2306-GPC
Peggy L. Jennings Age: 72 Rancho Santa Fe, CA
SUMMARY OF CHARGES FOR PEGGY L. JENNINGS:
Bank Fraud – Title 18, U.S.C., Section 1344
AGENCIES
Federal Bureau of Investigation
Internal Revenue Service
U.S. Attorney Honors Law Enforcement Officials and Bestows Award for Extraordinary ValorRead the Press Release
Senior Mgt. Counsel and Law Enforcement Coordinator Cindy Cipriani (619) 546-9608
NEWS RELEASE SUMMARY – March 23, 2018
SAN DIEGO – U.S. Attorney Adam Braverman will honor the work of federal, state and local law enforcement officers and bestow an award for Extraordinary Valor at the first annual Excellence in the Pursuit of Justice Awards Ceremony today.
“Serving as a law enforcement officer is demanding, dangerous, and all too often unappreciated. Many officers leave their families each day not knowing what dangers lurk ahead, because they want to make a difference. Those who have chosen this profession and who work selflessly day and night through the harshest of conditions are a special breed – they are heroes,” U.S. Attorney Braverman stated. “It is no accident that America’s Finest City is also one of America’s safest cities. The cooperation and collaboration between our federal, state and local law enforcement partners is unparalleled. Today, I honor 80 special officers who have made a difference in our community and moved the cause of justice forward.”
U.S. Attorney Braverman’s Excellence in the Pursuit of Justice Awards are being presented this afternoon to 79 agents and officers who demonstrated creativity, initiative, and persistence to achieve justice in difficult cases, including international murder investigations, counterterrorism matters, opiate diversion conspiracies, and large takedowns of gang-led drug trafficking organizations. “Each of these agents and officers demonstrated total commitment to the cause of justice and refused to give up in the face of numerous obstacles. They went above and beyond to ensure that justice was done, and in doing so they upheld the rule of law, brought justice to victims and enhanced community safety.”
In addition to the Excellence in the Pursuit of Justice Awards, U.S. Attorney Braverman will present an Award for Extraordinary Valor to Special Agent Geoffrey Rice, who works in the Carlsbad office of the Bureau of Alcohol, Tobacco, Firearms and Explosives. SA Rice happened to be attending the Route 91 Harvest music festival in Las Vegas when he heard the unmistakable sound of rapid gunfire. A mass murderer took the lives of 58 and injured more than 500 that day.
Agent Rice was off duty and unarmed, enjoying the concert with his wife on October 1, 2017. The shooter opened fire on the large outdoor gathering of concertgoers from a high rise hotel across the street from the concert venue. In the first few moments after the shooting began there was much confusion as to the source and nature of the sound of the gunfire over the amplified music and the background noise from a crowd of thousands. Many people initially thought that the sound was firecrackers or something else innocuous.
As a result of his extensive tactical training, Agent Rice immediately recognized the sound as gunfire and correctly determined the direction from which it came. After yelling out “gunfire!” he swiftly took action to move himself and his wife to cover behind a metal sound equipment box nearby, even as others in their immediate proximity were shot. As they moved to cover, Agent Rice noticed one person who had sustained a wound to the neck, and helped carry him along to a position of cover. Agent Rice exposed himself further to the assailant’s fire to grab two young women nearby and bring them back with him to safety behind the box.
As Agent Rice and the others gathered behind the sound box, the shooter took direct aim on their cover, repeatedly shooting at it in a clear attempt to penetrate it and hit them. Agent Rice, having correctly assessed that the cover was adequate and that they were in a relatively good position, commanded everyone to stay put. Although some felt their best chance was to run for better cover, Agent Rice’s confidence was compelling. One person nearby who left cover in an attempt to flee was fatally shot.
During a lull in the shooter’s fire, Agent Rice abandoned his position of safety and with help from another person he managed to move the person with the neck injury out into the open, where he had room to lie him flat in order to assess his injuries. Fully exposed to the shooter, Agent Rice performed CPR on the injured person until it was clear that he could do nothing further. As he attempted to treat the injured person the shooter resumed fire, with bullets hitting all around them. Agent Rice only then returned to safety with the injured man.
After some time the shooting stopped and Agent Rice assessed that he and the others could leave their position, and gave them calm and commanding instructions on how to do so. Agent Rice unselfishly remained on scene and at the casualty collection area nearby, volunteering to assist first responders and collecting a statement from a potential witness.
For his heroism, Agent Rice received the Award for Extraordinary Valor during today’s ceremony.
“Agent Rice’s quick thinking and swift action, in the face of an unforeseeable event reflects on his exceptional professionalism and strength of character,” said U.S. Attorney Braverman. “His selfless choice to expose himself to a known fatal threat for an injured stranger demonstrated exceptional personal valor, and exemplifies the finest traditions of law enforcement and public service. Without question his actions saved many lives and he is a hero.”
Fallbrook Man Charged in Fentanyl Overdose DeathRead the Press Release
Assistant U. S. Attorney Timothy Coughlin (619) 546-6768 and Assistant U.S. Attorney Larry A. Casper (619) 546-6734
NEWS RELEASE SUMMARY – March 16, 2018
SAN DIEGO – On November 2, 2017, a 26-year-old Fallbrook man told his wife he had been sober for 100 days. Two days later, she found him lying face down on their living room floor. She called 911 but it was too late.
Cause of death: Fentanyl toxicity.
What followed was a five-month investigation by the San Diego County Sheriff’s Department resulting in federal charges against 41-year-old Corey Bernard Green of Fallbrook, who, according to a federal complaint, supplied the drug that led to the overdose. Green is charged with Distribution of Fentanyl Resulting in the Death of the Fallbrook man, identified in court documents only as JAS.
“As the opioid epidemic rages across the nation, we will do everything we can to save lives,” said U.S. Attorney Adam Braverman. “That includes investigating overdose deaths as homicides and pursuing charges against dealers of the poison that is killing people every single day in this country.”
“This investigation and criminal filing represents the San Diego Sheriff's Department's commitment to combating the opioid epidemic, utilizing every available resource to identify and apprehend suspects whose narcotic trafficking activities lead to so many needless deaths,” said Sheriff Bill Gore.
The investigation by a San Diego Sheriff’s detective determined that JAS took an Uber taxi to Green’s Fallbrook residence to purchase fentanyl. An examination of JAS’s cell phone confirmed he paid for an Uber taxi on Friday morning, November 3, 2017. The detective obtained Green’s cell phone after he was arrested on unrelated charges of manufacturing a controlled substance. Text messages obtained from Green’s cell revealed he had been in contact with JAS for several days prior to the overdose death.
Their drug-based relationship culminated on Friday November 3, 2017, when Green allegedly sold JAS a fentanyl- laced product. The contents of that text message are included below:
11-1-17 JAS “Hey u up?”
11-2-17 Green “I’m Up”
11-2-17 JAS “And I’m sure you already know but I have no cash just these bottles and batteries of u need”
11-2-17 Green “I only have a little China but it’s even a ton stronger then the last powder”
11-2-17 JAS “Just did half. Feeling good. Thanks again.”
11-2-17 Green “Ok”
11-3-17 JAS “I actually got money today! No chance I could get you to come out if I pay extra?” Or if you’re up I could take an uber real quick”
11-3-17 Green “R u driving?” Will you have that Uber stop at McDonalds for me? I’ll throw you a little extra? It’s China.”
According to the complaint, the slang term “China,” when used in this context, is reference to a strong heroin containing fentanyl.
The last known contact with JAS occurred Friday night, November 3, 2017, when he said good night to his wife and went to play video games in the couple’s living room. She woke up the next morning and found him.
An investigation of Green’s recent criminal activity found that on November 30, 2017, Green was arrested and charged by the San Diego District Attorney’s Office with manufacturing a controlled substance. Green subsequently pleaded guilty to that charge and is currently serving a sentence in state custody. The United States has filed a writ to have Green transferred into federal custody to face the Distribution of Fentanyl Resulting in Death charge. He is expected to appear before a U.S. Magistrate Judge in federal court next week to face the federal charge.
The U.S. Attorney’s Office has recently charged two other individuals with the same crime. Alleged fentanyl distributor Kyle Anthony Shephard was arrested and charged in February with Distribution of Fentanyl Resulting in Death. According to the complaint, Shephard distributed fentanyl to a United States Marine on January 27, 2017, which resulted in the death of the Marine identified in the complaint only as “MC.” For further information, please see Case Number 18-mj-0935-MDD.
While final numbers have not been released, preliminary estimates reflect that deaths caused by fentanyl analogs doubled in San Diego County in 2017 over 2016.
DEFENDANT Case Number 18-mj-1215-BGS
Corey Bernard Green Age: 41
SUMMARY OF CHARGES
Distribution of Fentanyl Resulting in Death – Title 21, U.S.C., Section 841(b)(1)(C)
Maximum penalty: Mandatory minimum 20 years in prison up to life
AGENCY
San Diego Sheriff’s Department
San Diego Sheriff’s Department Regional Crime Lab
San Diego Medical Examiner’s Office
San Diego District Attorney’s Office
United States Attorney’s Office
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Chief Executive and Four Associates Indicted for Conspiring with Global Drug Traffickers by Providing Encryption Services to Evade Law Enforcement and Obstruct JusticeRead the Press Release
Assistant U. S. Attorneys Andrew P. Young (619) 546-7981, Mark W. Pletcher (619) 546-9714 and Benjamin J. Katz (619) 546-9604
NEWS RELEASE SUMMARY – March 15, 2018
SAN DIEGO – Vincent Ramos, the chief executive of Canada-based Phantom Secure, and four of his associates were indicted by a federal grand jury today on charges that they knowingly and intentionally participated in a criminal enterprise that facilitated the transnational importation and distribution of narcotics through the sale and service of encrypted communications.
This is the first time the U.S. government has targeted a company and its principals for knowingly and intentionally conspiring with criminal organizations by providing them with the technological tools to evade law enforcement and obstruct justice while committing transnational drug trafficking.
“With one American dying of a drug overdose every nine minutes, our great nation is suffering the deadliest drug epidemic in our history,” Attorney General Jeff Sessions said. “Incredibly, some have sought to profit off of this crisis, including by specifically taking advantage of encryption technologies to further criminal activity, and to obstruct, impede, and evade law enforcement, as this case illustrates. The Department of Justice will aggressively prosecute not just drug traffickers, but those who help them spread addiction and death in our communities. I want to thank the FBI, DEA, Customs and Border Protection, Homeland Security Investigations, Washington State Police, the Bellingham and Blaine Police Departments, and all of our law enforcement partners around the world, including Australia, Canada, Panama, Hong Kong, and Thailand for their hard work on this case. Today's indictment sends a clear message that drug traffickers and criminals cannot hide, because we will hunt them down and find them wherever they are.”
“When criminals go dark, and law enforcement cannot monitor their phones or access evidence, crimes cannot be solved, criminals cannot be stopped and lives can be lost,” said U.S. Attorney Adam Braverman. “As a result of this groundbreaking prosecution, we will disable the communication infrastructure provided by a criminal enterprise to drug traffickers and other violent criminals. Phantom Secure was designed to profit off of criminal activity committed by transnational criminal organizations around the world. We are committed to shutting these criminals down.”
“The indictment of Vincent Ramos and his associates is a milestone against transnational crime,” said FBI Director Christopher Wray. “Phantom Secure allegedly provided a service designed to allow criminals the world over to evade law enforcement to traffic drugs and commit acts of violent crime without detection. Ramos and his company made millions off this criminal activity, and our takedown sends a serious message to those who exploit encryption to go dark on law enforcement. I want to thank our partners at the Department of Justice, as well as our Australian and Canadian law enforcement partners, for their incredible work on this case.”
“Hidden or undetected communication is key for any transnational organized crime network,” said John A. Brown, FBI Special Agent in Charge of the San Diego Field Office. “This case highlights how criminal enterprises, like Phantom Secure, knowingly provided advanced technology and encrypted private networks to transnational criminal operations in order to evade law enforcement. This break-through investigation has undoubtedly disrupted countless criminal organizations from operating their illegal and dangerous operations in the United States and abroad because their communications mechanism has been shut down. This indictment shows the impact law enforcement, working together across the globe, can have on transnational organized criminal groups. The San Diego Division of the FBI would like to recognize and thank our international law enforcement partners, who built this international case with exceptional and dedicated collaboration.”
Ramos was taken into custody in Bellingham, Washington, on March 7. Ramos made his first appearance in the Western District of Washington and will face charges in San Diego. The remaining four defendants are fugitives.
According to court documents, Phantom Secure advertised its products as impervious to decryption, wiretapping or legal third-party records requests. Phantom Secure also guaranteed the destruction of evidence contained within a device if it was compromised, either by an informant or because it fell into the hands of law enforcement. According to court documents, Phantom Secure’s clients used email handles like the following to conduct criminal activities:
The indictment alleges that as a result of its efforts to facilitate international crime, Phantom Secure has generated approximately $80 million in annual revenue since 2008 and facilitated drug trafficking, obstruction of justice, and violent crime around the world.
The international operation to arrest the company’s chief executive and seize Phantom Secure’s infrastructure involved cooperation and efforts by law enforcement authorities in the United States, Australia, Canada, with additional assistance from U.S. and foreign law enforcement in Panama, Hong Kong, and Thailand.
Over the past two weeks, in cooperation with Australian Federal Police and Royal Canadian Mounted Police, more than 250 agents around the globe conducted approximately 25 searches of houses and offices of Phantom Secure associates in Los Angeles, Las Vegas, Miami, and in Australia and Canada, seizing Phantom Secure devices, assets, and evidence of the charged crimes. The coordinated effort led to the seizure of servers, computers, cell phones, and Phantom Secure devices used to operate the Phantom Secure network, as well as drugs and weapons.
Ramos and the others - Kim Augustus Rodd, Younes Nasri, Michael Gamboa and Christopher Poquiz - are charged with participating in and aiding and abetting a racketeering enterprise and conspiring to import and distribute controlled substances around the world. The defendants have been charged with Conspiracy to Commit RICO in violation of 18 U.S.C. § 1962 and Conspiracy to Aid and Abet the Distribution of Controlled Substances in violation of 21 U.S.C. § 841 and 846.
Authorities have seized Phantom Secure’s property, including more than 150 domains and licenses which were being used by transnational criminal organizations to send and receive encrypted messages. Authorities also seized bank accounts and property in Los Angeles, California and Las Vegas, Nevada.
This case stems from an investigation in the Southern District of California of a Phantom Secure client who used Phantom devices to coordinate shipments of thousands of kilograms of cocaine and other drugs throughout the globe. According to court documents, there were an estimated 10,000 to 20,000 Phantom devices in use worldwide before the authorities dismantled the company. This coordinated action means Phantom Secure’s clients can no longer use these devices to commit crimes.
According to Timothy O’Connor, Executive Director of the Criminal Investigations Division New South Wales Crime Commission, “The disruption of the Phantom Secure platform has been one of the most significant blows to organized crime in Australia.”
In addition to our foreign law enforcement partners, the U.S. Attorney’s Office further recognizes the support and assistance of the U.S. Drug Enforcement Administration; Customs and Border Protection; the Department of Homeland Security; Seattle and Las Vegas field office of the Federal Bureau of Investigation; the Washington State Police Department; the City of Bellingham, Washington Police Department; the City of Blaine, Washington Police Department; and the Canada Border Services Agency, among others, without whose help this prosecution could not have been possible.
Speaking on behalf of Australian law enforcement authorities, Australian Federal Police (AFP) Assistant Commissioner Organised Crime, Neil Gaughan said today Australia’s role in this complex and unique investigation began in early 2017 following an exchange of intelligence with the FBI and Royal Canadian Mounted Police (RCMP).
As a result, Australian authorities executed 19 search warrants across four states last week as part of the international action, where more than 1,000 encrypted mobile devices were seized.
“The action taken in the U.S. directly impacts the upper echelons of organized crime both here in Australia and offshore, who until now have been able to confidently control and direct illicit activity like drug importations, money laundering and associated serious criminal offending,” said Assistant Commissioner Gaughan.
“Our thanks go to our international partners – the FBI and RCMP – who have been outstanding in working methodically around the clock together with us on this unique investigation. Without their cooperation, commitment and shared singular drive, Australian law enforcement agencies would not be announcing this significant result today.”
Australian agencies involved in this investigation include the Australian Criminal Intelligence Commission, the New South Wales Crime Commission, state police from New South Wales, Victoria, Queensland, South Australia and Western Australia, the Australian Tax Office and financial intelligence agency AUSTRAC.
“This investigation is a prime example of law enforcement agencies from around the world working together to identify, investigate and charge people involved in transnational criminal activity,” says Assistant Commissioner Jim Gresham, RCMP Criminal Operations Officer, Investigative Services and Organized Crime. “We remain committed to investigating and disrupting these illegal activities that adversely affect each of our communities.”
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
Vincent Ramos (1) Richmond, British Columbia Canada
aka “CEO”
aka “Business”
Kim Augustus Rodd (2) Phuket, Thailand
aka Visith Vongthai
aka “Snowstar”
aka “Global”
Younes Nasri (3) Dubai, United Arab Emirates
aka “Maestro”
aka “Jesse”
Michael Gamboa (4) Los Angeles, CA
aka “Chino”
Christopher Poquiz (5) Los Angeles, CA
aka “Caddy”
aka “Cad”
SUMMARY OF CHARGES
Racketeering Conspiracy to Conduct Enterprise Affairs (RICO Conspiracy), in violation of 18 USC §1962(d)
Maximum Penalty: Life in prison
Conspiracy to Aid and Abet the Distribution of Narcotics, in violation of 21 USC §841 and 846; Title 18 USC §2
Maximum Penalty: Life in prison
AGENCIES
Federal Bureau of Investigation
Drug Enforcement Administration
Department of Justice, Office of International Affairs
Australian Federal Police
New South Wales Police (Australia)
New South Wales Crime Commission (Australia)
Australian Criminal Intelligence Commission
Royal Canadian Mounted Police
International Assistance Group, Department of Justice, Canada
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Chief Executive and Four Associates Indicted for Conspiring with Global Drug Traffickers by Providing Encryption Services to Evade Law Enforcement and Obstruct JusticeRead the Press Release
Vincent Ramos, the chief executive of Canada-based Phantom Secure, and four of his associates were indicted by a federal grand jury today on charges that they knowingly and intentionally participated in a criminal enterprise that facilitated the transnational importation and distribution of narcotics through the sale and service of encrypted communications.
This is the first time the U.S. government has targeted a company and its principals for knowingly and intentionally conspiring with criminal organizations by providing them with the technological tools to evade law enforcement and obstruct justice while committing transnational drug trafficking.
“With one American dying of a drug overdose every nine minutes, our great nation is suffering the deadliest drug epidemic in our history,” said Attorney General Jeff Sessions. “Incredibly, some have sought to profit off of this crisis, including by specifically taking advantage of encryption technologies to further criminal activity, and to obstruct, impede, and evade law enforcement, as this case illustrates. The Department of Justice will aggressively prosecute not just drug traffickers, but those who help them spread addiction and death in our communities. I want to thank the FBI, DEA, Customs and Border Protection, Homeland Security Investigations, Washington State Police, the Bellingham and Blaine Police Departments, and all of our law enforcement partners around the world, including Australia, Canada, Panama, Hong Kong, and Thailand for their hard work on this case. Today's indictment sends a clear message that drug traffickers and criminals cannot hide, because we will hunt them down and find them wherever they are.”
“When criminals go dark, and law enforcement cannot monitor their phones or access evidence, crimes cannot be solved, criminals cannot be stopped and lives can be lost,” said U.S. Attorney Adam Braverman. “As a result of this groundbreaking prosecution, we will disable the communication infrastructure provided by a criminal enterprise to drug traffickers and other violent criminals. Phantom Secure was designed to profit off of criminal activity committed by transnational criminal organizations around the world. We are committed to shutting these criminals down.”
“The indictment of Vincent Ramos and his associates is a milestone against transnational crime,” said FBI Director Christopher Wray. “Phantom Secure allegedly provided a service designed to allow criminals the world over to evade law enforcement to traffic drugs and commit acts of violent crime without detection. Ramos and his company made millions off this criminal activity, and our takedown sends a serious message to those who exploit encryption to go dark on law enforcement. I want to thank our partners at the Department of Justice, as well as our Australian and Canadian law enforcement partners, for their incredible work on this case.”
Ramos was taken into custody in Bellingham, Washington, on March 7. Ramos made his first appearance in the Western District of Washington and will face charges in San Diego. The remaining four defendants are fugitives.
According to court documents, Phantom Secure advertised its products as impervious to decryption, wiretapping or legal third-party records requests. Phantom Secure also guaranteed the destruction of evidence contained within a device if it was compromised, either by an informant or because it fell into the hands of law enforcement.
The indictment alleges that as a result of its efforts to facilitate international crime, Phantom Secure has generated approximately $80 million in annual revenue since 2008 and facilitated drug trafficking, obstruction of justice, and violent crime around the world.
The international operation to arrest the company’s chief executive and seize Phantom Secure’s infrastructure involved cooperation and efforts by law enforcement authorities in the United States, Australia, Canada, with additional assistance from U.S. and foreign law enforcement in Panama, Hong Kong, and Thailand.
Over the past two weeks, in cooperation with Australian Federal Police and Royal Canadian Mounted Police, more than 250 agents around the globe conducted approximately 25 searches of houses and offices of Phantom Secure associates in Los Angeles, Las Vegas, Miami, and in Australia and Canada, seizing Phantom Secure devices, assets, and evidence of the charged crimes. The coordinated effort led to the seizure of servers, computers, cell phones, and Phantom Secure devices used to operate the Phantom Secure network, as well as drugs and weapons.
Ramos and the others - Kim Augustus Rodd, Younes Nasri, Michael Gamboa and Christopher Poquiz - are charged with participating in and aiding and abetting a racketeering enterprise and conspiring to import and distribute controlled substances around the world. The defendants have been charged with Conspiracy to Commit RICO in violation of 18 U.S.C. § 1962 and Conspiracy to Aid and Abet the Distribution of Controlled Substances in violation of 21 U.S.C. § 841 and 846.
Authorities have seized Phantom Secure’s property, including more than 150 domains and licenses which were being used by transnational criminal organizations to send and receive encrypted messages. Authorities also seized bank accounts and property in Los Angeles, California and Las Vegas, Nevada.
This case stems from an investigation in the Southern District of California of a Phantom Secure client who used Phantom devices to coordinate shipments of thousands of kilograms of cocaine and other drugs throughout the globe. According to court documents, there were an estimated 10,000 to 20,000 Phantom devices in use worldwide before the authorities dismantled the company. This coordinated action means Phantom Secure’s clients can no longer use these devices to commit crimes.
According to Timothy O’Connor, Executive Director of the Criminal Investigations Division New South Wales Crime Commission, “The disruption of the Phantom Secure platform has been one of the most significant blows to organized crime in Australia.”
In addition to our foreign law enforcement partners, the U.S. Attorney’s Office further recognizes the support and assistance of the U.S. Drug Enforcement Administration; Customs and Border Protection; the Department of Homeland Security; Seattle and Las Vegas field office of the Federal Bureau of Investigation; the Washington State Police Department; the City of Bellingham, Washington Police Department; the City of Blaine, Washington Police Department; and the Canada Border Services Agency, among others, without whose help this prosecution could not have been possible.
Speaking on behalf of Australian law enforcement authorities, Australian Federal Police (AFP) Assistant Commissioner Organised Crime, Neil Gaughan said today Australia’s role in this complex and unique investigation began in early 2017 following an exchange of intelligence with the FBI and Royal Canadian Mounted Police (RCMP).
As a result, Australian authorities executed 19 search warrants across four states last week as part of the international action, where more than 1,000 encrypted mobile devices were seized.
“The action taken in the U.S. directly impacts the upper echelons of organized crime both here in Australia and offshore, who until now have been able to confidently control and direct illicit activity like drug importations, money laundering and associated serious criminal offending,” said Assistant Commissioner Gaughan.
“Our thanks go to our international partners – the FBI and RCMP – who have been outstanding in working methodically around the clock together with us on this unique investigation. Without their cooperation, commitment and shared singular drive, Australian law enforcement agencies would not be announcing this significant result today.”
Australian agencies involved in this investigation include the Australian Criminal Intelligence Commission, the New South Wales Crime Commission, state police from New South Wales, Victoria, Queensland, South Australia and Western Australia, the Australian Tax Office and financial intelligence agency AUSTRAC.
“This investigation is a prime example of law enforcement agencies from around the world working together to identify, investigate and charge people involved in transnational criminal activity,” says Assistant Commissioner Jim Gresham, RCMP Criminal Operations Officer, Investigative Services and Organized Crime. “We remain committed to investigating and disrupting these illegal activities that adversely affect each of our communities.”
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 charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
DEFENDANTS
Vincent Ramos (1) Richmond, British Columbia Canada
aka “CEO”
aka “Business”
Kim Augustus Rodd (2) Phuket, Thailand
aka Visith Vongthai
aka “Snowstar”
aka “Global”
Younes Nasri (3) Dubai, United Arab Emirates
aka “Maestro”
aka “Jesse”
Michael Gamboa (4) Los Angeles, CA
aka “Chino”
Christopher Poquiz (5) Los Angeles, CA
aka “Caddy”
aka “Cad”
SUMMARY OF CHARGES
Racketeering Conspiracy to Conduct Enterprise Affairs (RICO Conspiracy), in violation of 18 USC §1962(d)
Maximum Penalty: Life in prison
Conspiracy to Aid and Abet the Distribution of Narcotics, in violation of 21 USC §841 and 846; Title 18 USC §2
Maximum Penalty: Life in prison
Disney Cruise Ship Employee Sentenced to PrisonRead the Press Release
For Further Information, Contact: Assistant U.S. Attorney
Joseph J.M. Orabona (619)546-7951
NEWS RELEASE SUMMARY – March 13, 2018
SAN DIEGO – Renan Dias Da Rocha Gomes, a former employee aboard the Disney Wonder cruise ship, was sentenced today to 15 months in prison for wire fraud in connection with his scheme to embezzle more than $260,000 from The Walt Disney Company.
Agents with the Federal Bureau of Investigation and Homeland Security Investigations arrested Gomes on October 27, 2017, when the Disney Wonder made port in San Diego, California. According to his plea agreement, Gomes admitted that from at least October 2015 through October 27, 2017, he was employed as a merchandise host and assigned to work in the merchandise stores aboard the Disney Wonder. He admitted he executed his scheme by fraudulently obtaining money through his access to an online payment system in order to embezzle funds from Disney for his own personal use and benefit.
As evidenced by his guilty plea, Gomes made approximately $260,000 in unauthorized charges to Disney’s bank account, and loaded the value of the funds onto Disney gift cards while working aboard the Disney Wonder on the high seas. During the search of Gomes’ cabin aboard the Disney Wonder, investigators found approximately 217 gift cards, a stolen watch, and $1,240 in cash.
Gomes also admitted that from April 23, 2017 through May 7, 2017, he spent approximately $37,700 of the embezzled funds for his own personal benefit by taking his family on a Disney World vacation. While on this vacation, Gomes stated that he used the gift cards with the embezzled funds to pay approximately $8,200 on lodging, approximately $29,500 on food, beverage, merchandise and entertainment expenses.
As part of the sentence today, the Court ordered Gomes to pay restitution to The Walt Disney Company in the total amount of funds he stole. In addition, the Court ordered Gomes to criminally forfeit the stolen watch and $1,240 in cash which were proceeds of his wire fraud.
In order to work aboard the Disney Wonder, Gomes, who is a Brazilian national, obtained a temporary visa. As a consequence of his criminal conviction, Gomes’ visa was cancelled and he will be removed from the United States to Brazil following the completion of his prison term.
“Today’s sentence should remind the public that the U.S. Attorney’s Office is committed to protecting consumers and enforcing the law against employees who embezzle funds from their employers for their own personal benefit,” said United States Attorney Adam L. Braverman. “The defendant in this case has been held accountable for his criminal conduct and for the way he cheated his employer.”
“The FBI is committed to identifying, investigating, and bringing those responsible for fraudulent criminal activity to justice,” said FBI Special Agent in Charge John A. Brown. “We want to encourage San Diego citizens and businesses alike to report suspicious or fraudulent activity to the FBI. It is this partnership between our community and law enforcement partners that allows us to better protect against these fraudulent actors.”
DEFENDANT Criminal Case No. 17CR3897-CAB
Renan Dias Da Rocha Gomes Age: 32 Citizenship: Brazil
SUMMARY OF CHARGES:
Count 1 – Wire Fraud (18 U.S.C. § 1343)
Maximum Penalties: maximum of 20 years in prison; maximum fine of $250,000; maximum term of supervised release of three years; restitution; criminal forfeiture
INVESTIGATING AGENCIES
Federal Bureau of Investigation
Homeland Security Investigations, Immigration and Customs Enforcement
U.S. Customs and Border Protection
Jury Finds Stockbroker Guilty of Insider Trading for Dealing in Stock of Local Biotechnology FirmRead the Press Release
Assistant U. S. Attorneys Aaron P. Arnzen (619) 546-8384 Emily W. Allen (619) 546-9738
NEWS RELEASE SUMMARY – March 12, 2018
SAN DIEGO – A stockbroker was convicted of insider trading by a federal jury Friday, and a codefendant pleaded guilty this morning – the day his trial was set to begin.
The jury found stockbroker Paul Rampoldi guilty of conspiracy to commit insider trading, wire fraud, and money laundering, in connection with an illegal trade based on an insider tip about the merger of San Diego firm Ardea Biosciences, Inc. with multinational pharmaceutical company AstraZeneca.
Separately, William Scott Blythe, Rampoldi’s client who placed the trade and secretly paid Rampoldi his share of the profits in tens of thousands of dollars in cash, appeared in court this morning on the date set for his trial, and pleaded guilty to engaging in the same conspiracy. Blythe admitted in his plea agreement that the inside information came from Ardea’s then-director of Information Technology Michael Fefferman, and proved to be extremely lucrative – as the conspirators profited more than 1,500% from their illegal stock trades.
The evidence presented at trial showed that in April 2012, Ardea insider Fefferman learned that the company was planning to merge with AstraZeneca. He also knew that this secret news would boost Ardea’s stock price by a hefty 50%. Before the merger was announced to the public, Fefferman passed the inside information on to his close friend and brother-in-law Chad Wiegand, a licensed stockbroker at National Planning Corporation (NPC). Wiegand passed the information on to his coworker at NPC, Akis Eracleous, who was also a licensed stockbroker. Eracleous, in turn, passed the tip to defendants Rampoldi and Blythe, and the three agreed (to avoid suspicion and scrutiny) that Blythe would trade on the information in his non-NPC brokerage account, and then they would all share the profits.
On the Friday before the merger was announced publicly, Blythe bought more than $5,400 in risky Ardea stock options. On Monday – the next trading day after the merger announcement was released – Blythe sold the options for nearly $89,000. Blythe distributed approximately $40,000 of the fraudulent proceeds in cash to Rampoldi and Eracleous to hide the paper trail, and paid $2,000 in cash to Wiegand to compensate him for the tip. After Forbes magazine reported on Blythe’s spectacular earnings, the group realized an investigation was brewing, and they got together to work on their cover story to mislead the FBI and financial industry investigators.
Fefferman, Wiegand, and Eracleous were each charged previously, and each has admitted his involvement in the insider trading and agreed to cooperate with the investigation. Rampoldi and Blythe are scheduled to be sentenced on May 25, 2018, at 9:00 am before U.S. District Judge Dana M. Sabraw. The jury hearing Rampoldi’s case was unable to reach a verdict on two other counts facing him, so a status hearing is set for March 23, 2018, at 11:00 am before Judge Sabraw to discuss a possible retrial on those counts.
DEFENDANTS (16CR1842-DMS):
Paul Rampoldi Age: 50 San Diego, CA
Scott Blythe Age: 53 San Diego, CA
Charges of Conviction
Conspiracy, in violation of 18 U.S.C. §371
Maximum Penalties: 5 years’ imprisonment, $250,000 fine, $100 special assessment, restitution.
DEFENDANTS PREVIOUSLY CHARGED:
Chad Wiegand, 15CR1462-DMS Age: 43 Lakeside, CA
Akis Eracleous, 15CR1462-DMS Age: 50 San Diego, CA
Michael Fefferman, 15CR1534-DMS Age: 45 Escondido, CA
AGENCIES
Federal Bureau of Investigation
Securities and Exchange Commission
Doctor Allegedly Prescribed Opioids for Dead and Incarcerated People in “Pill Mill” Operation; Doctor and Seven Others Arrested and ChargedRead the Press Release
Assistant U. S. Attorney Larry Casper (619) 546-6734
NEWS RELEASE SUMMARY – March 12, 2018
SAN DIEGO – Egisto Salerno, a medical doctor, who owns and operates a medical office on El Cajon Boulevard in San Diego, and seven others have been arrested on federal charges stemming from their alleged roles in a conspiracy to possess with the intent to distribute hydrocodone as part of a ‘pill mill’ operation.
Special agents with the Drug Enforcement Administration arrested Dr. Egisto Salerno, 73, of San Diego; Stephen Toney, 57, of San Diego; April Cervantes, 27, of San Diego; David Apple, 25, of Chula Vista; Amber Horne, 28, of El Cajon; Lonnell Ligon, 55, of San Diego; Shalina Latson, 47, of San Diego; and LaJuan Smith, 38, of San Diego. Each is charged with one count of conspiracy to possess with the intent to distribute a controlled substance.
The complaint alleges that, beginning not later than November 2014, defendant Stephen Toney and others recruited individuals, often homeless or of limited means, to pose as “patients” at the office of Salerno to obtain hydrocodone prescriptions. Salerno, who received an office visit fee for each “patient,” performed a cursory or no physical examination and prescribed the hydrocodone despite the lack of any legitimate medical purpose and outside the usual course of professional practice. The “patients” were paid for turning over their hydrocodone tablets to defendants. The defendant recruiters arranged transportation of these “patients” to Salerno’s office, to a pharmacy to pick up the hydrocodone, and then returned them to or near homeless shelters or their residences. Toney and other co-conspirators intended to further distribute these hydrocodone tablets.
Salerno is alleged to have prescribed hydrocodone for, among others, dead “patients” and “patients” who were in jail and who could not, therefore, have been in Salerno’s office when they were allegedly examined by Salerno and hydrocodone was prescribed in their names. For example, one patient died in October 2015 and Salerno allegedly saw that patient and prescribed hydrocodone in that patient’s name five times after death, including two prescriptions written more than a year after the death.
According to the charging documents, Salerno and two of his medical assistants allegedly falsified chart notes and medical records to justify these hydrocodone prescriptions and further the conspiracy. In one instance, the medical chart for an undercover agent who visited the clinic was seized by agents during execution of a search warrant. That chart included a set of medical examination notes in Salerno’s handwriting and signed by him purporting to document a visit that never occurred. The charging documents allege that hydrocodone was prescribed on that date in the name of the undercover agent and the tablets were picked up from the pharmacy by defendant Stephen Toney.
Hydrocodone is the generic name for a narcotic analgesic that is sold under a variety of brand names such as Vicodin, Norco and Lortab. When legally supplied by a licensed practitioner for a legitimate medical purpose in the usual course of professional practice, hydrocodone is used to combat moderate pain. It is a Schedule II controlled substance (narcotic) that is widely abused and it is frequently diverted from legitimate medical channels and distributed illicitly on the street for profit and abuse.
“The opioid crisis is ravaging families in San Diego and Imperial Counties and is part of a national epidemic,” said U.S. Attorney Adam Braverman. “We are and will continue to zealously prosecute and bring to justice those doctors, pharmacies, medical providers and others who are furthering this epidemic to line their own pockets.”
“Patients trust their doctors to give them the best care possible,” said DEA San Diego Acting Special Agent in Charge Steve Woodland. “It’s DEA’s responsibility to ensure that DEA registrants are worthy of that trust. DEA will keep conducting these investigations to ensure that registrants are following all the rules when prescribing these potentially deadly drugs.”
Anyone with information about opioid abuse/diversion or other drug diversion should report that to the Drug Enforcement Administration at https://apps.deadiversion.usdoj.gov or contact the DEA hotline at 1-877-RX-Abuse (1-877-792-2873).
DEFENDANTS Case Number 18mj1080
Egisto Salerno Age: 73 San Diego, CA
Stephen Toney Age: 57 San Diego, CA
April Cervantes Age: 27 San Diego, CA
David Apple Age: 25 Chula Vista, CA
Amber Horne Age: 28 El Cajon, CA
Lonnell Ligon Age: 55 San Diego, CA
Shalina Latson Age: 47 San Diego, CA
LaJuan Smith Age: 38 San Diego, CA
SUMMARY OF CHARGES
Conspiracy to Unlawfully Distribute and Dispense a Controlled Substance, 21 U.S.C. 846
Maximum penalty: 20 years’ imprisonment; $1,000,000 fine or twice the pecuniary gain or loss, whichever is greater, and five years’ supervised release.
INVESTIGATING AGENCIES
Drug Enforcement Administration
Internal Revenue Service
Health and Human Services-Office of Inspector General
California Department of Health Care Services
San Diego County Sheriff’s Department
California Department of Justice
San Diego Police Department
*The charges and allegations contained in a Complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Three More Members of the Westside Crips Criminal Enterprise Sentenced to Prison for Participation in Racketeering Conspiracy Relating to Sex Trafficking, Drug Trafficking and Other CrimesRead the Press Release
Assistant U.S. Attorneys Alessandra P. Serano (202) 252-5843 or Joseph Orabona (619) 546-7951
NEWS RELEASE SUMMARY – March 9, 2018
SAN DIEGO – Two more gang members of the Westside Crips were sentenced today for their participation in a racketeering conspiracy involving sex trafficking, narcotics trafficking and other violent crimes. A mid-level drug dealer who sold narcotics to gang members was also sentenced for his participation in the racketeering conspiracy and for conspiracy to distribute methamphetamine.
Peter Miranda (aka “Fat Boy,” “Baby Rocks,” and “Lil’ Burger”), Jasiri Lacey (aka “Baby Westwood” and “Baby West”), and Larry Monroe previously admitted their respective membership and association with the Westside Crips, who primarily operated in Oceanside and elsewhere. Today, U.S. District Judge John A. Houston sentenced Miranda to 45 months in prison. He sentenced Lacey to 72 months in prison. Judge Houston also sentenced Monroe for both of his crimes to 180 months in prison.
According to court documents, the members of the conspiracy were involved in drug trafficking, prostitution, attempted murder, assaults and robberies. Their criminal activity primarily occurred between 2004 through February 2017. According to court documents, members of Westside Crips are akin to a crime family, where all members work together committing various crimes for the purpose of making money.
In furtherance of the RICO conspiracy, Miranda admitted he engaged in promoting prostitution of an adult female between June and November 2015. In October 2015, Miranda transported the adult female for the purposes of prostitution. Miranda also admitted that he sold narcotics to benefit the Westside Crips. For example, in October 2008, he sold cocaine base in Oceanside, California. Lastly, Miranda promoted his involvement as a gang member in the Westside Crips by posting on Facebook, displaying gang signs, and wearing Westside Crips’ colors (blue) and affiliated clothing.
To further his role in the RICO conspiracy, Lacey admitted he engaged in two extremely violent robbery offenses, including one in which he pointed a shotgun at the victim and robbed him of his marijuana and other items. Lacey admitted he also was involved in the robbery of a wireless store in San Diego with two other accomplices who used handguns to steal 120 cellular phones, two laptop computers, and nine Apple iPads. This caused the wireless store to lose approximately $8,500. Lacey also admitted he promoted the prostitution of an adult female by using a smuggled cell phone while he was in prison and directed another gang member to manage one of the women working for Lacey as a prostitute.
As a mid-level drug dealer associated with the Westside Crips, Monroe admitted he distributed methamphetamine to gang members of the Westside Crips and others from December 2009 through October 2015. Throughout that period, Monroe sold various quantities of methamphetamine in furtherance of his role in two conspiracies – the RICO conspiracy and the conspiracy to distribute methamphetamine.
“Gang members and drug traffickers who continue to sell dangerous narcotics and exploit members of our community for their own personal gain and notoriety shall be vigorously prosecuted for their crimes,” said U.S. Attorney Adam L. Braverman.
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.
DEFENDANTS Case Numbers: 17cr0270-JAH, 17cr0214-JAH
Peter Miranda aka “Fat Boy,” “Baby Rocks”, “Lil’ Burger” Age: 33 Oceanside, CA
Jasiri Malcolm Lacey aka “Baby Westwood,” “Baby West” Age: 26 Oceanside, CA
Larry Darnell Monroe Age: 60 Oceanside, CA
PRIOR DEFENDANTS’ SENTENCES
Ameer Roby aka “Tiny Dum Dum” Sentenced to: 48 months in prison
Michael Sullivan aka “Du-Low” Sentenced to: 36 months in prison
Shane Anderson aka “Tiny Westwood” Sentenced to: 28 months in prison
Richard Cleveland aka “Face” Sentenced to: 57 months in prison
Umesh Oza (hotel manager) Sentenced to: 4 months in prison;180 days of
home confinement
SUMMARY OF CHARGES FOR MIRANDA AND LACEY
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’ in prison, a fine of $250,000, three years of supervised release
SUMMARY OF CHARGES FOR MONROE
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’ in prison, a fine of $250,000, three years of supervised release
Title 21, United States Code, Sections 841(a)(1) and 846 – Conspiracy to Distribute Methamphetamine
Penalties: Mandatory minimum of 10 years’ in prison, and a maximum of life in prison, a fine of $250,000, five years of supervised release
AGENCIES
North County Narcotics Task Force
Drug Enforcement Administration
Oceanside Police Department
Internal Revenue Service
San Diego Communications Company Pays More Than $12 Million to Settle False Claim Act Allegations Regarding Eligibility for Small Business Innovation and Research ContractsRead the Press Release
Assistant U.S. Attorney Joseph P. Price, Jr. (619) 546-7642, Assistant U.S. Attorney Joseph J. Purcell (619) 546-7643
NEWS RELEASE SUMMARY – March 12, 2018
SAN DIEGO – TrellisWare Technologies, Inc., a communications company located in San Diego, has agreed to pay $12,177,631.90 to settle civil False Claims Act allegations that it was ineligible for multiple Small Business Innovation and Research (SBIR) contracts it had entered into with government defense agencies. TrellisWare is a majority-owned subsidiary of ViaSat, Inc., a global broadband services and technology company also headquartered in San Diego.
The SBIR program is designed to stimulate technological innovation by funding small businesses to engage in federal research and development efforts. To be considered a small business for purposes of SBIR awards, a contractor must not be majority owned by another company. Between 2008 and 2015, TrellisWare was awarded multiple SBIR contracts to provide the Navy, Army and Air Force with a variety of technology services and products involving communications and signal processing systems, including wireless networks used in military tactical environments. TrellisWare self-certified that it met the small business size requirements for eligibility to receive SBIR funding. But based on certain disclosures that TrellisWare later made about its ownership relationship with ViaSat, the government conducted an investigation into TrellisWare’s eligibility for SBIR awards. The government contends that TrellisWare was not eligible for SBIR awards because it was actually a majority-owned subsidiary of ViaSat at the time it was awarded and performed on SBIR contracts.
“False certifications of eligibility for SBIR funding siphons taxpayer dollars from the program’s intended beneficiaries. We will continue to work with our agency partners to bring to account those that breach the public trust by submitting false claims,” said Adam L. Braverman, United States Attorney for the Southern District of California.
“Companies must exercise due diligence when self-certifying eligibility to gain access to programs set aside for small business or else face significant penalties,” said Kari Overson, Special Agent in Charge of the Small Business Administration, Office of the Inspector General’s Western Regional Office. “The SBIR program enables small businesses to explore their technological potential and provides qualified small businesses access to the nation’s research and development arena. I want to thank the U.S Attorney’s Office and our law enforcement partners for their dedication and hard work throughout this investigation.”
Chris Hendrickson, Special Agent in Charge of the Western Field Office, Defense Criminal Investigative Service, said: “DCIS is committed to working with its partners and the U.S. Attorney’s Office to aggressively investigate false claims by government contractors. These unethical practices stifle fair competition and erode the public’s trust in government.”
“The success of this case is a direct result of the joint efforts of the Naval Criminal Investigative Service, our Federal Law Enforcement Partners and the U.S. Attorney’s Office,” said Edward Denion, Assistant Special Agent in Charge of the NCIS Southwest Field Office. “Protecting our warfighters is one of the top priorities of NCIS, and this investigation is an example of how we do this. Anyone considering defrauding the Navy and taxpayers should know NCIS will aggressively pursue all such allegations.”
“This settlement stands as further confirmation of the great work our agents do every day,” said Frank Robey, Director of the U.S. Army Criminal Investigation Command's Major Procurement Fraud Unit. “The funds recovered can now be used for a proper purpose - supporting the men and women of our Armed Forces.”
This matter was investigated by Assistant U.S. Attorneys Joseph P. Price, Jr. and Joseph J. Purcell and auditing personnel of the Affirmative Civil Enforcement Unit of the U.S. Attorney’s Office, in coordination with Special Agents of the Defense Criminal Investigative Service; Naval Criminal Investigative Service; Army Criminal Investigation Command; Air Force Office of Special Investigations; and Small Business Administration, Office of the Inspector General.
Agencies:
Defense Criminal Investigative Service
Naval Criminal Investigative Service
US Army Criminal Investigation Command
Air Force Office of Special Investigations
Small Business Administration, Office of the Inspector General
Nationwide Takedown Targets Brazen International Money Laundering SchemeRead the Press Release
Presentation Images - Click HEREFor Further Information, Contact:
Assistant U.S. Attorneys Matthew J. Sutton (619) 546-8941, David J. Rawls (619) 546-7966, and
Blanca Quintero (619) 546-7118SAN DIEGO – Indictments were unsealed today in San Diego federal court charging 40 members of an international money-laundering scheme with conspiring to launder tens of millions of dollars in drug money.
In addition to the indictments unsealed today in San Diego, a total of 75 defendants nationwide have been charged across the United States with crimes ranging from drug distribution to money laundering, all stemming from this investigation, including defendants in the Southern District of Ohio, the Eastern District of Kentucky, the District of Kansas, and the Eastern District of Washington.
credit Ray Christensen, USAO-SDCAAccording to the indictments and other publicly filed court documents, Jose Roberto Lopez-Albarran, a significant money broker for a Mexican-based international money laundering organization, along with other members of the organization, allegedly laundered tens of millions of dollars in narcotics proceeds from the United States to Mexico between 2015 and 2018. As a result of the investigation, law enforcement seized more than $6 million dollars in United States currency as well as 95 kilograms of methamphetamine, 63 kilograms of heroin, 10 kilograms of fentanyl, 92 kilograms of cocaine, 252 kilograms of marijuana, worth millions of dollars on the streets, and 20 firearms, including semiautomatic assault rifles and handguns.
Lopez-Albarran oversaw a network of co-conspirators to assist in transferring millions of dollars in narcotics proceeds from drug dealers in the United States to drug suppliers in Mexico, including to individuals working for the Sinaloa Cartel. As part of the investigation, the FBI deployed undercover agents and task force officers from the San Diego District Attorney’s Office, Bureau of Investigation, Chula Vista Police Department, and the San Diego County Sheriff’s Office to infiltrate Lopez-Albarran’s organization and after gaining the trust of the organization, agreed to pick up bulk currency across the United States for transfer to Mexico. Over the course of the last two years, undercover agents identified multiple individuals known as “money movers,” i.e., people responsible for collecting narcotics proceeds and disposing of those proceeds as directed by either the drug trafficking organization or the money brokers.
Law enforcement then received phone numbers and code words from Lopez-Albarran to contact these money movers to arrange for the delivery of narcotics proceeds. The money movers concealed and transported amounts ranging from thousands to hundreds of thousands of dollars in narcotics proceeds at a time, hidden within compartments in vehicles, luggage, duffel bags and shoeboxes. These cash deliveries took place in locations such as parking lots of retail stores, hotels, and restaurants across the United States, including ones in San Diego, California; Los Angeles, California; Kansas City, Missouri; New York, New York; Cincinnati, Ohio; Dayton, Ohio; Lexington, Kentucky; Boston, Massachusetts; Philadelphia, Pennsylvania; and Chicago, Illinois. By targeting these money movers, law enforcement was able to discover multiple drug trafficking cells across the United States responsible for importing and distributing substantial quantities of fentanyl, heroin, methamphetamine and cocaine.
In addition, another lead defendant, Manuel Reynoso Garcia, along with his co-conspirators were charged last month in San Diego federal court for their sophisticated money laundering activities. He and his co-conspirators directed money movers to travel throughout the East Coast to collect bulk cash and deposit the bulk cash into domestic bank accounts set up through a web of “funnel” bank accounts. Once the bulk cash was deposited into the funnel bank accounts, co-conspirators, under the direction of Reynoso and others, conducted international wire transfers of the funds to Mexican bank accounts associated with false companies in Mexico controlled by the money laundering organization.
Lopez-Albarran was arrested on February 9, 2018 in San Diego and remains in federal custody. Reynoso and four of his co-defendants were also arrested between January 11, 2018, and January 17, 2018, in San Diego. Sixteen of the remaining defendants charged in San Diego have been arrested in Boston, Massachusetts; Los Angeles, California; Philadelphia, Pennsylvania; and elsewhere. Five additional defendants were already in custody for previously charged crimes and will be transferred to the Southern District of California to be arraigned in the coming days.
In addition, approximately 35 other defendants have been charged in connection with this investigation in other jurisdictions including the Southern District of Ohio, the Eastern District of Kentucky, the District of Kansas, and the Eastern District of Washington.
“We have siphoned the cash and the life out of a San Diego-based international money laundering organization with ties to the Sinaloa Cartel,” said U.S. Attorney Adam Braverman. “By following the money, we have discovered large quantities of fentanyl, heroin and methamphetamine that are no longer destined for the streets of America. That’s a one-two punch that takes these organizations completely out of the ring and makes our communities safer.”
“These types of complex investigations, spanning across the nation and our international boundaries, requires a fundamental change in how we share information, coordinate and collaborate. These joint investigations, where shared awareness and decentralized execution was the norm, can and must be how we disrupt these drug trafficking and money laundering networks in the future,” said Special Agent in Charge John A. Brown of the San Diego Division of the Federal Bureau of Investigation. “This case model is built upon the incredible collaboration of the federal, state, and local partners across the United States and in Mexico. Today, this case exemplifies how dedicated collaboration equals success.”
“Taking on and stopping transnational criminal organizations requires dedication and sacrifice,” said District Attorney Summer Stephan. “We worked collaboratively with our law enforcement partners and dedicated key resources over a two-year period. As a result, this undercover operation has brought down high-level cartel associates and stopped the distribution of dangerous drugs like heroin and fentanyl in San Diego and cities across the U.S.”
“When drug traffickers amass large quantities of cash from narcotics sales, they often attempt to transfer and/or legitimize these ill-gotten profits through the use of banks and financial institutions,” said Special Agent in Charge R. Damon Rowe, IRS-Criminal Investigation. “This joint investigation continues to demonstrate our efforts to ensure that the financial services industry will not be abused by large-scale narcotics traffickers, but will be operated in a fair and honest manner to promote the public interest.”
U.S. Attorney Braverman also praised federal, state, and local law enforcement for the coordinated team effort in the culmination of this investigation. This case was led by the Federal Bureau of Investigation’s Cross Border Violence Task Force (CBVTF). The CBVTF is a FBI-led task force comprised of federal and local law enforcement from the FBI, San Diego District Attorney’s Office Bureau of Investigation, Drug Enforcement Administration, Customs and Border Protection, San Diego County Sheriff’s Office and the Chula Vista Police Department. Agents and officers from the IRS Criminal Investigation, U.S. Bureau of Prisons, U.S. Marshals Service and the California Highway Patrol also provided vital assistance. Attorneys from the Department of Justice, Office of Enforcement Operations, Electronic Surveillance Unit, likewise provided critical work as part of the investigative team. He also thanked our vital foreign partners - Mexican Federal Police, Mexico’s Procuraduria General de la Republic (PGR) and Mexican Financial Intelligence Agency (Unidad de Inteligencia Financial - UIF).
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. Attorneys Matthew J. Sutton, David J. Rawls, and Blanca Quintero.
Defendant Information
Defendants Criminal Case No: 18-cr-1129-GPC
Defendant Number
Name
Age
Hometown
1
Jose Roberto Lopez-Albarran
32
Culiacan, Mexico
2
Alfredo Cardenas-Uriarte
55
Culiacan, Mexico
3
Juan Duarte-Tello
53
Kansas City, Missouri
4
Diana Aurora Holguin-Gallegos
30
Kansas City, Missouri
5
REDACTED
X
REDACTED
6
Shontail Marie Hocker
42
Lexington, Kentucky
7
Nereida Valdez
30
Los Angeles, California
8
REDACTED
X
REDACTED
9
REDACTED
X
REDACTED
10
REDACTED
X
REDACTED
11
Jose Luis Fuentes
37
Los Angeles, California
12
REDACTED
X
REDACTED
13
Miguel Angel Flores
36
Los Angeles, California
14
REDACTED
X
REDACTED
15
Endy Santiago
29
Boston, Massachusetts
16
Luis Sanchez Baez
30
Boston, Massachusetts
17
REDACTED
X
REDACTED
18
Hendry Mateo
39
Boston, Massachusetts
19
REDACTED
X
REDACTED
20
REDACTED
X
REDACTED
21
REDACTED
X
REDACTED
22
REDACTED
X
REDACTED
23
Christian Brown
41
Boston, Massachusetts
24
Jose Figueroa
38
Boston, Massachusetts
25
Alfredin Mejia Soto
29
Boston, Massachusetts
Summary Of Charges
Conspiracy to Launder Monetary Instruments (18 U.S.C. 1956(h)).
Maximum Penalties: Term of custody up to 20 years’ imprisonment, a fine of $500,000 or twice the value of the monetary instrument or funds involved, and 5 years of supervised release.
Defendants Criminal Case No: 18-cr-1127-GPC
Defendant Number
Name
Age
Hometown
1
Jesus Adolfo Rene Duarte Languren
35
Los Angeles, California
2
Manuel Vasquez Medina
44
Los Angeles, California
3
REDACTED
X
REDACTED
4
Manuel Dejesus Estrada
28
Los Angeles, California
5
REDACTED
X
REDACTED
Summary Of Charges
Conspiracy to Distribute Controlled Substances, in violation of Title 21 U.S.C. §§ 841(a)(1) and 846.
Conspiracy to Launder Monetary Instruments (18 U.S.C. 1956(h)).
Maximum Penalties: Term of custody including a mandatory minimum 10 years and up to life imprisonment, $10,000,000 fine and 5 years supervised release. For money laundering charges, term of custody up to 20 years’ imprisonment, a fine of $500,000 or twice the value of the monetary instrument or funds involved, and 5 years of supervised release.
Defendants Criminal Case No: 18-cr-1128-GPC
Defendant Number
Name
Age
Hometown
1
Jose Roberto Lopez-Albarran
32
Culiacan, Mexico
2
REDACTED
X
REDACTED
3
REDACTED
X
REDACTED
4
REDACTED
X
REDACTED
Summary Of Charges
Conspiracy to Launder Monetary Instruments (18 U.S.C. 1956(h)).
Maximum Penalties: Term of custody up to 20 years’ imprisonment, a fine of $500,000 or twice the value of the monetary instrument or funds involved, and 5 years of supervised release.
Defendants Criminal Case No: 17-cr-02203-WQH
Defendant Number
Name
Age
Hometown
1
Manuel Reynoso Garcia
62
Tijuana, Mexico
2
Perla Alejandra Perez Guirado
25
Tijuana, Mexico
3
Estefania Plascencia Ponce
35
Tijuana, Mexico
4
Joaquin Enrique Ramirez Calva
28
Tijuana, Mexico
5
Gilberto Beltran Salazar
29
Tijuana, Mexico
Summary of Charges
Conspiracy to Launder Monetary Instruments (18 U.S.C. 1956(h))
Conspiracy to Operate an Unlicensed Money Transmitting Business (18 U.S.C. 1960(a))
Maximum Penalties: Term of custody up to 20 years’ imprisonment, a fine of $500,000 or twice the value of the monetary instrument or funds involved, and 5 years of supervised release. For conspiracy to operate an unlicensed money transmitting business, term of custody up to 5 years’ imprisonment and a fine of $250,000.
*The charges and allegations contained in an indictment, information, or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
AGENCIES
Federal Bureau of Investigation – Cross Border Violence Task Force
San Diego District Attorney’s Office - Bureau of Investigation
San Diego County Sheriff’s Office
Chula Vista Police Department
Drug Enforcement Administration
Customs and Border Protection
Internal Revenue Service - Criminal Investigation
United States Marshals Service
U.S. Bureau of Prisons
California Highway Patrol
Department of Justice, Organized Crime Drug Enforcement Task Forces
Department of Justice, Office of Enforcement Operations
Department of Justice, Office of International Affairs
U.S. Attorney’s Office for the Southern District of Ohio
U.S. Attorney’s Office for the Eastern District of Kentucky
U.S. Attorney’s Office for the District of Kansas
U.S. Attorney’s Office for the Eastern District of Washington
U.S. Attorney’s Office for the Northern District of Illinois
U.S. Attorney’s Office for the Eastern District of North Carolina
U.S. Attorney’s Office for the District of Massachusetts
U.S. Attorney’s Office for the Southern District of New York
Mexican Federal Police
Mexico’s Procuraduria General de la Republic (PGR)
Mexican Financial Intelligence Agency (Unidad de Inteligencia Financial - UIF)
18CR1127-GPC - Redacted Indictment 18CR1128-GPC - Redacted Indictment 18CR1129-GPC - Redacted IndictmentBorder Patrol Agent Charged with Making False Statements about his Relationships with Drug TraffickersRead the Press Release
Assistant U. S. Attorney Michael J. Heyman
NEWS RELEASE SUMMARY – March 5, 2018
SAN DIEGO – U.S. Border Patrol Agent Ramon Delgado was indicted by a federal grand jury for making false statements during a pre-employment interview and in his application about his associations with known members of a drug trafficking organization.
According to the indictment unsealed today, federal officials began investigating allegations that Delgado associated with and aided a drug trafficking organization that smuggled methamphetamine, heroin and cocaine into the United States. That drug trafficking organization included United States citizens and Mexican nationals, including two Mexican nationals with whom Delgado maintained a close and extensive relationship. The indictment alleges that Delgado lied about his relationships to these individuals in both his background investigation for federal employment and during an interview with federal agents.
Delgado made his first appearance in federal court today before U.S. Magistrate Judge Nita L. Stormes, who ordered Delgado to appear for a detention hearing on March 8, 2018.
“Any connections to drug traffickers is an obvious red flag, and concealing that connection is even more troubling,” said U.S. Attorney Adam Braverman. “U.S. Border Patrol Agents are trusted guardians of public safety and national security. We will go after any who fall short of this high standard, rare though it may be.”
“I was very disappointed to learn about these allegations when they surfaced,” said Chief Patrol Agent Rodney S. Scott. “As with any allegation of misconduct, U.S. Border Patrol has supported the investigators throughout the investigative process and will continue to do so as this case now moves into the prosecution phase. Integrity is a core value of all U.S. Border Patrol agents. You simply cannot be an agent without it. It is imperative to point out that while this is extremely disappointing, it is an anomaly. The vast majority of U.S. Border Patrol agents carry out their duties every single day with integrity, vigilance, and honor.”
FBI Special Agent in Charge John A. Brown commented, “Keeping our border safe is a serious and complex task. As part of this mission, the San Diego FBI Border Corruption Task Force, along with the Department of Homeland Security – Office of Inspector General, are determined to uphold the public’s confidence in our border security by ensuring the highest standard of those employees charged with protecting the American people at our nation's borders.”
According to the indictment, on October 23, 2015, Delgado submitted his responses to the standard background investigation questions required for federal agents. One of those questions asked whether, in the prior seven years, Delgado had a close and continuing contact with any foreign nationals with whom he was bound by affection, influence, common interests and obligation. Delgado stated that he had no such relationships when, in truth, he had a close and continuing relationship with two Mexican nationals who were members of a drug trafficking organization.
The indictment also alleges that on July 27, 2016, federal agents asked Delgado during an interview whether he knew the members of the drug trafficking organization and Delgado falsely claimed that he did not.
DEFENDANT Case Number 18CR1005-LAB
Ramon Delgado Age: 44 San Diego, CA
SUMMARY OF CHARGES
False Statements – 18 U.S.C. § 1001
Penalty: 5 years’ maximum imprisonment per count
AGENCIES
Federal Bureau of Investigation
Department of Homeland Security, Office of Inspector General
*The charges and allegations contained in an indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Man Charged in Fentanyl Overdose Death of MarineRead the Press Release
Assistant U. S. Attorney Timothy Coughlin (619) 546-6768, Special Assistant U.S. Attorney Thomas Endicott, Captain, U.S. Marine Corps (619) 546-8664
NEWS RELEASE SUMMARY – March 2, 2018
SAN DIEGO – A 25-year-old Marine Corporal was found unresponsive on the floor in his Camp Pendleton barracks on Sunday, January 29, 2017. He was lying next to his computer chair, still wearing headphones. He appeared to have been playing video games. Paramedics were unable to revive him.
What followed was an autopsy report that determined the cause of death to be fentanyl toxicity, and a death investigation that has resulted in federal charges against the alleged dealer, 25-year-old Kyle Anthony Shephard of San Marcos.
In a complaint unsealed today, Shephard is charged with Distribution of Fentanyl Resulting in the Death of the Marine, identified in court documents only as Corporal M.C., 1st Marine Division. Shephard was arraigned before U.S. Magistrate Judge, Mitchell D. Dembin today at 2:00 p.m. He is scheduled to appear for a detention hearing on Tuesday, March 6, 2018 at 1:30 p.m., also before Judge Dembin.
The last known contacts with Corporal M.C. occurred late Friday night, January 26, 2017, two days before his death, and shortly after midnight on Saturday morning. A forensic examination of Corporal M.C.’s computer showed his last computer activity taking place at 1:44 a.m. on January 28, 2017.
On February 1, 2017, an autopsy was conducted at the Naval Medical Center San Diego. The toxicology screen was positive for fentanyl. Colonel Ladd Tremaine, M.D., Medical Corps, U.S. Army, Armed Forces Medical Examiner, determined that Corporal M.C. died of opioid toxicity caused by a fentanyl overdose.
On April 28, 2017 a forensic chemist with the Defense Forensic Science Center, reported that a blue pill seized from Corporal M.C.’s barracks room tested positive for fentanyl. The pill was discovered on the headboard next to a powdery substance and a rolled up dollar bill.
A complaint alleges that Shephard distributed the fentanyl pills to Corporal M.C. which caused his death. Text messages obtained from Corporal M.C.’s phone revealed he was first introduced to Shephard in November 2016. During the next three months – November – December 2016 and January 2017 – they arranged numerous sales of fentanyl and other drugs. Their conversations included Shephard acknowledging that the pills could lead to an overdose.
Their drug-based relationship culminated on Friday January 27, 2017, when Shephard sold four fentanyl pills to Corporal M.C. for one hundred dollars. The contents of that text message are included below:
Corporal M.C. – 6:14 PM – Yo whats good bro.
Shephard – 6:15 PM – What’s good?
Corporal M.C. – 6:17 PM – Can u meet up in a lil bit?
Shephard – 6:20 PM – Yes come to esco
Corporal M.C. – 6:21 PM – Do u have the fetanyl ones or the other ones
Shephard – 6:22 PM – I have both but new fet prices are 25 the others are 20 I lost a Plug and had my prices raised significantly with the fet ones
Corporal M.C. – 6:34 PM – Any deals
Corporal M.C. – 6:41 PM – And where do u wanna meet
Shephard – 6:41 PM – If you get quite a bit
Corporal M.C. – 6:44 PM – Kk ill take 4 for a hundo
Corporal M.C. – 6:53 PM – Im omw
Shephard – 6:57 PM - Fasho
Corporal M.C. – 7:25 PM – Where we meeting
Shephard – 7:28 PM – My housr
Corporal M.C. – 7:34 PM – Im in here
Shephard – 7:36 PM – Me too
Corporal M.C. – 7:36 PM – Im near the address 336
An investigation of Shephard’s ongoing criminal activity found that on December 12, 2017, Shephard and a female associate were arrested and charged by the San Diego District Attorney’s Office with distribution of a controlled substance. Law enforcement officers involved in the arrest of Shephard said the controlled substance Shephard was charged with possessing for distribution was approximately 2,000 fentanyl-laced pills.
“What a senseless tragedy that another young life has been lost because of fentanyl,” said U.S. Attorney Adam Braverman. “This Marine was serving his country and had his whole life ahead of him. We are going to hold dealers accountable for the deaths that result from their reckless disregard for human life.”
“NCIS and other law enforcement agencies must do whatever we can to address the nation's ongoing opioid crisis by going after those who are dealing death. Busting a dealer tied to the death of a U.S. Marine will hopefully save the lives of other service members,” said NCIS Pendleton Field Office Special Agent in Charge Todd Battaglia.
In another recent case being prosecuted by the U.S. Attorney’s Office, alleged heroin distributor Max Gaffney was arrested in January 2018 and charged with Distribution of Heroin Resulting in Death. According to an October 2017 indictment, Gaffney distributed heroin on February 16, 2017, which resulted in the death of a person identified only as K.R. For further information please see Case Number 17cr3330.
While final numbers have not been released, preliminary estimates reflect that deaths caused by fentanyl analogs doubled in San Diego County in 2017 over 2016.
DEFENDANT Case Number 18-mj-0935-MDD
Kyle Anthony Shephard Age: 25
SUMMARY OF CHARGES
Distribution of Fentanyl Resulting in Death – Title 21, U.S.C., Section 841(b)(1)(C)
Maximum penalty: Mandatory minimum 20 years in prison up to life
AGENCY
United States Naval Criminal Investigative Service Marine Corp
U.S. Army, Armed Forces Medical Examiner
Defense Forensic Science Center
San Diego County Sheriff’s Department
United States 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.
Mexican National Admits Impersonating American Citizen and Stealing Government BenefitsRead 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 – March 1, 2018
SAN DIEGO – Andres Avelino Anduaga of Tijuana, Mexico, pleaded guilty to theft charges in federal court today, admitting that he assumed the identity of an American citizen for 37 years to illegally enter the country and steal hundreds of thousands of dollars in federal, state and local government benefits.
During a hearing before U.S. Magistrate Judge Andrew G. Schopler, Anduaga acknowledged that he took the identity of an American citizen in 1980, using the victim’s birth certificate to apply for a Social Security number and later, for disability benefits in his victim’s name. From 1989 until 2016, Anduaga admitted that he received almost a quarter-million dollars in Supplemental Security Income benefits, and over a hundred thousand dollars in health benefits, in the name of his victim. Anduaga also admitted that during an interview with federal agents in 2015, he falsely claimed to be living in the United States, as required for an individual receiving Supplemental Security Income benefits, when in fact he was living in Tijuana, Mexico. Anduaga also admitted to illegally seeking CalFresh / Supplemental Nutrition Assistance (SNAP) benefits from San Diego County by impersonating the same victim, and thereafter fraudulently taking more than $12,000 in additional government benefits.
As a part of his plea, Anduaga admitted that he is not an American citizen, and that he had in fact been deported from the United States on at least two prior occasions under yet another name. Anduaga admitted that despite his deportations, he was able to travel freely between the United States and Mexico using the United States passport that he had applied for in the name of his victim, using the same birth certificate and fraudulently-obtained Social Security number he used to defraud the government for decades.
“The programs that this defendant stole from – for decades – provide benefits to America’s most needy,” said U.S. Attorney Adam Braverman. “This prosecution demonstrates the commitment of the United States Attorney’s Office to protecting the integrity of our welfare programs and punishing those who prey on the goodwill of our nation and its taxpayers.”
“The Social Security Administration’s Office of the Inspector General is committed to pursuing those individuals who violate the public trust wherever they may be found,” said Robb Stickley, the Special Agent in Charge of the San Francisco Field Division, which is responsible for Southern California. “We will continue to uphold the integrity of the Supplemental Security Income program and other federal and state needs-based assistance programs that are a lifeline for so many Americans and their families."
U.S. Border Patrol Spokesman Michael Scappechio said: “Criminal cases in the border region oftentimes have an immigration nexus. In the spirit of law enforcement collaboration, the U.S. Border Patrol supports local, state and other federal partners in the prosecution of people who violate our nation’s immigration laws.”
As a part of his plea agreement, Anduaga agreed to pay full restitution to the Social Security Administration, the California Department of Health Care Services, and the County of San Diego for the $360,908.85 in government benefits that he fraudulently obtained by his crimes. Anduaga faces up to 12 years in federal prison and a fine of up to $971,817.70 at his sentencing before U.S. District Judge. John A. Houston on May 29, 2018.
DEFENDANT Case Number 17-cr-4461-JAH
Andres Avelino Anduaga Age 66 Tijuana, Mx.
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
Chula Vista Man Admits Being Source of Fentanyl that Resulted in Overdoses of Five People in AlpineRead the Press Release
Assistant U.S. Attorney Sherri Walker Hobson (619) 961-0287
NEWS RELEASE SUMMARY – March 1, 2018
SAN DIEGO – A Chula Vista man pleaded guilty in federal court today to drug crimes, admitting that the fentanyl he distributed led to the accidental non-fatal overdoses of five people in Alpine, some of whom were revived by first responders with Naloxone.
Joel Rodriguez entered his plea before U.S. Magistrate Judge Jan Adler to conspiracy to distribute fentanyl and possession of cocaine with intent to distribute.
In his plea agreement, Rodriguez admitted that he obtained fentanyl from Mexico and then delivered it to another person for distribution in San Diego. Eventually, Rodriguez’s fentanyl led to the accidental overdoses of five individuals in Alpine on or about December 7, 2017. The victims, who believed that they were using cocaine, ended up in the hospital, including two who had to be treated at the scene with Naloxone – a drug that reverses the depression of the central nervous system and respiratory system caused by opioids.
Rodriguez also admitted that he drove a vehicle containing 55 pounds of cocaine on May 17, 2017 from San Diego County to Riverside County to deliver the bulk cocaine to another person for further distribution. According to court records, on December 12, 2017, during the course of a San Diego Sheriff's Department narcotics search warrant at Rodriguez’s residence following the overdoses in Alpine, Sheriff’s deputies along with federal agents from Drug Enforcement Administration and Homeland Security Investigations found additional cocaine and fentanyl.
“I am sending the strongest warning possible to anyone who is struggling with drug addiction,” said U.S. Attorney Adam Braverman. “We have seen a dramatic surge in deaths and international trafficking activity related to fentanyl, which is 30-50 times more powerful than heroin and so dangerous that in its purest form, even a tiny amount touching the skin can be deadly. Every time you use drugs, you are playing Russian Roulette. These people who overdosed thought they were using cocaine. But there’s no way to know. You may think you’re going to get high, but you’re really going to get low, as in six feet under.”
“This was a horrendous crime that resulted in five drug overdoses in one community,” said Sheriff William Gore. “The threat of fentanyl and other drugs being sold in our communities endangers our young people and wreaks havoc in the lives of more than just those who use them. It is imperative that we continue to proactively investigate and prosecute the individuals who profit from the destruction of others.”
“Rodriguez’s guilty plea serves to remind the public of the serious dangers linked to transnational smuggling activity along the U.S/.Mexico border,” said David Shaw, Special Agent in Charge for Homeland Security Investigations (HSI) in San Diego. “HSI and our law enforcement partners will continue to investigate and bring to justice those involved in the trafficking and distribution of these deadly drugs into our communities.”
“This is exactly the kind of investigation needed in the face of our nation’s current opioid crisis,” said DEA Acting Special Agent in Charge Steve Woodland. “Targeting the sellers of this poison should send a clear message that San Diego law enforcement will not tolerate these criminals in our communities.”
Sentencing is scheduled for May 21, 2018 at 9:00 a.m. before U.S. District Court Judge Anthony J. Battaglia.
DEFENDANT Criminal Case No.18CR0164AJB
Joel Rodriguez 29 Chula Vista, California
SUMMARY OF CHARGES
Count 1: Possession of Cocaine With Intent to Distribute, in violation of 21 U.S.C. §841
Maximum penalties: 10 year minimum mandatory; life maximum; fine of $1 million; supervised release of at least 3 years.
Count 2: Conspiracy to Distribute Fentanyl, in violation of 21 U.S.C. §841 and 846
Maximum penalties: 20 years maximum; fine of $250,000; supervised release of three years.
AGENCIES
San Diego District Attorney’s Office
San Diego Sheriff’s Department
Homeland Security Investigations
U.S. Drug Enforcement Administration
Thirty-Seven Gang Members Charged in Crackdown of North County Heroin, Methamphetamine and Firearms TraffickersRead the Press Release
SAN DIEGO – Eleven federal indictments unsealed in San Diego today charge 37 defendants with heroin, methamphetamine and firearms trafficking, in many cases within feet of North County schools.
The crackdown announced today is the latest in a series of efforts by the Department of Justice to turn the tide of the opioid epidemic and reduce the inevitable violent crime that accompanies widespread drug trafficking.
Early this morning, more than 100 members of the North County Regional Gang Task Force, the FBI SWAT team, plus other law enforcement agencies made numerous arrests and, both today and during the course of the investigation, searched more than a dozen locations in Oceanside, Vista, San Marcos, and elsewhere in North County.
As of today at noon, 27 of the 37 defendants are either in federal or state custody. Twenty one were arrested this week, including 18 this morning; the rest were already in custody. Authorities are continuing to search for 10 defendants. Many of the defendants are scheduled to be arraigned before U.S. Magistrate Judge Mitchell D. Dembin at 2:00 p.m. today and tomorrow.
These yearlong investigations involved months of federal wiretaps, dozens of undercover drug and gun buys and extensive surveillance. Many of the defendants are documented members or associates of violent North County street gangs operating out of Encinitas, San Marcos, Oceanside, Vista, Carlsbad, Escondido, and elsewhere. Many of these gang have long-standing ties to the Mexican Mafia. In total, authorities seized heroin, methamphetamine and fentanyl and firearms, including a semi-automatic pistol, revolvers, and a two AR-15 style assault rifles.
These drugs and guns were being stored and sold in North County neighborhoods, including near Libby Lake Park and across the street from several schools – Jefferson Middle School, Clair W. Burgener Academy, Mission Elementary School, San Marcos High School, and Joli Ann Leichtag Elementary School.
“We have a special resolve to go after gangs that have the audacity to operate on the boundaries of our schools, where children play and learn,” said U.S. Attorney Adam L. Braverman. “The gangs are always on our radar, but when they endanger our most precious and vulnerable population – our children - we will act decisively.”
Through one investigation, the gang task force targeted major heroin and methamphetamine distribution cells led by North County street gang members. This investigation was initiated in the fall of 2016 after two gang-related homicides in North County. Anticipating additional violence, the gang task force set forth a plan to dismantle gang-related drug trafficking and violence in North County. As part of this investigation, the gang task force targeted Adrian Gomez, aka “Bandit,” a known Carlsbad gang member, methamphetamine distributor, and felon, who was found in possession of ammunition and a semi-automatic pistol.
The gang task force also targeted Theresa Lapolla, who was found in possession of over 100 grams of heroin at her home, located less than 700 feet from three Oceanside schools. She was charged with possession with intent to distribute over 100 grams of heroin within 1000 feet of a school — a charge that doubles the maximum punishment to 80 years in prison.
This investigation also targeted Robert Gonzalez, aka “Sleepy,” a Carlsbad gang member living in Oceanside’s Posole neighborhood. Months of federal wiretaps showed that Gonzalez was a prolific heroin and methamphetamine distributor who controlled drug sales in that neighborhood, which is a Posole territory located off the I-5 freeway and Highway 76 in Oceanside. In fact, Gonzalez sold narcotics every single day of the roughly three-month wiretap on his telephones. Gonzalez did so by working with multiple gang members and associates to distribute drugs to dozens of customers in and around Oceanside. Gonzalez typically met with his customers and sub-distributors in the parking lots of Wal-Mart, Harbor Freight, Mission Donuts, Burger King, El Super, and a local methadone clinic, all within Oceanside.
Another investigation by the gang task force targeted Encinitas Flats gang member Colin Jones as a high-volume heroin and methamphetamine dealer throughout North County. On June 8, 2017, Jones was arrested after investigators learned through electronic surveillance that he had a loaded AR-style assault rifle in his vehicle. Agents located him at the Pala Indian Casino with the rifle on his front passenger seat and additional ammunition and heroin in the car. Jones is charged with conspiracy to import heroin, conspiracy to distribute methamphetamine and heroin and felon in possession of ammunition.
Jones and his co-conspirators are accused of distributing narcotics in a variety of locations, including near schools. For example, according to court documents, Jones met with a San Marcos gang member at an Albertson’s across the street from San Marcos High School in late April to conduct a narcotics transaction. At other times, Jones and other co-conspirators operated out of a large private parcel of land directly across from Joli Ann Leichtag Elementary School in Vista.
According to court documents, some of the drugs in these investigations were obtained in Tijuana, Mexico, and then North County Gang members used unsanitary methods to sneak heroin and methamphetamine across the border: They repeatedly smuggled small quantities of narcotics in body cavities, via pedestrian lanes at the San Ysidro and Otay Mesa border crossings. Because of the method the conspirators used to smuggle drugs into the United States, which limited the amount that could be smuggled at a given time, Jones would travel to Mexico approximately every five days to replenish his supply of narcotics. Between October 7, 2016 and June 4, 2017 (four days before Jones was arrested in this case), Jones crossed from Mexico into the United States approximately 38 times, with the most recent being on June 4, 2017. Jones typically crossed late at night via the pedestrian lanes.
“The FBI and our law enforcement partners at the North County Regional Gang Task Force won’t accept when gang activity coupled with drugs, firearms and violence infests our communities,” said FBI Special Agent in Charge John A. Brown. “The FBI will continue to pursue violent gang members and work tirelessly with our law enforcement partners to keep our communities safe.”
“The Oceanside Police Department supports the efforts of the San Diego County Gang Task Force, Federal Bureau of Investigation and the U.S. Attorney’s Office in identifying, arresting and prosecuting those that sell and distribute drugs and advocate violence,” said Oceanside Police Chief Frank McCoy.
“This investigation illustrates that these violent street gangs will not prosper in our communities”, says DEA San Diego Acting Special Agent in Charge Steve Woodland. “With the cooperation of all law enforcement agencies involved, these offenders are now off the streets.”
U.S. Attorney Braverman praised the task force for the coordinated team effort in the culmination of this investigation. Agents and officers from the Federal Bureau of Investigation, San Diego County Sheriff’s Office, Oceanside Police Department, Bureau of Alcohol, Tobacco, Firearms and Explosives, Drug Enforcement Administration, the California Department of Corrections and Rehabilitation, Bureau of Prisons, Homeland Security Investigations, U.S. Marshals Service, California Highway Patrol, and the Escondido and Carlsbad Police Departments collaborated on this investigation. Attorneys from the Department of Justice, Office of Enforcement Operations, Electronic Surveillance Unit, also provided critical assistance to the investigation.
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 Kevin Mokhtari, Janaki S. Gandhi and Matthew J. Sutton.
Defendant InformationDEFENDANT Criminal Case No: 17CR1791-JLS
Name
Age
Hometown
Colin Kenneth Jones
AKA “Frosty”
29
Vista, CA
SUMMARY OF CHARGES
Felon in Possession of Ammunition (Title 21, U.S.C., Sec. 922(g)(1));
Conspiracy to Distribute Methamphetamine and Heroin (Title 21, U.S.C., Secs. 841(a)(1), 846);
Conspiracy to Import Heroin (Title 21, U.S.C, Secs. 952, 960, 963).
Maximum Penalties: For heroin charges: 40 years in prison with a mandatory minimum sentence of 5 years, and a $5 million fine. For methamphetamine charge: life in prison with a mandatory minimum sentence of 10 years, and a $10 million fine. For firearms charges: 10 years’ in prison, and a $250,000 fine.DEFENDANTS Criminal Case No: 18CR0872-JLS
Name
Age
Hometown
Ikaika Ryan Chung
AKA “Chino”38
Encinitas, CA
Luis Armando Garcia
AKA “Junior”35
San Marcos, CA
Lauren Nicole Valenzuela
AKA “Huera”23
Surprise, AZ
Christopher Tiburski*
39
Escondido, CA
David Alfaro
AKA “Stranger”23
Encinitas, CA
Edgar Delgadillo
AKA “Big E”24
Encinitas, CA
David Loera*
AKA “Porky”37
Encinitas, CA
Ramon Caldera
AKA “Evil”37
San Marcos, CA
Mark Thomas Reed
39
San Diego, CA
Matthew Wayne Truax
34
Escondido, CA
Megan Renee Brown
32
Encinitas, CA
Melissa Sue Borst
37
Orange County, CA
SUMMARY OF CHARGES
Conspiracy to Distribute Heroin and Methamphetamine (Title 21, U.S.C., Secs. 841(a)(1) and 846); Importation of Heroin (Title 21, U.S.C. Secs. 952 and 960).
Maximum Penalties: For the conspiracy charge, life in prison with a mandatory minimum sentence of 10 years and a $10 million fine. For the importation of heroin charges, 20 years in prison and a $1 million fine.
DEFENDANTS Criminal Case No: 18CR0873-JLS
Name
Age
Hometown
Anthony Michele DiGiovanni
34
El Cajon, CA
Kimberly Marie Lawson
34
El Cajon, CA
SUMMARY OF CHARGES
Conspiracy to Import Heroin and Methamphetamine (Title 21, U.S.C., Secs. 952, 960, 963);
Importation of Heroin and Methamphetamine (Title 21, U.S.C., Secs. 952, 960).
Maximum Penalties: For conspiracy charge: life in prison with a mandatory minimum sentence of 10 years and a $10 million fine. For importation charges, one charge carries a maximum 40 years in prison, with a mandatory minimum of 5 years, and $5 million fine; the other two charges carry a maximum 20 years in prison and $1 million fine.
DEFENDANT Criminal Case No: 18CR0874-JLS
Name
Age
Hometown
John Nicholas Hernandez
AKA “Hitman”
36
Los Angeles, CA
SUMMARY OF CHARGES
Use of a Communication Device in Drug-Trafficking Offense (Title 21, U.S.C., Sect. 843(b))
Maximum Penalties: 4 years in prison, $250,000 fine
DEFENDANT Criminal Case No: 18CR1006-JAH
Name
Age
Hometown
Marco Antonio Flores
AKA “Tripps”
38
Oceanside
SUMMARY OF CHARGES
Distribution of Heroin, in violation of Title 21, U.S.C., Sec. 841(a)(1).
Maximum Penalties: 20 years in prison and a $1 million fine.
DEFENDANT Criminal Case No: 18CR1007-JAH
Name
Age
Hometown
Adrian Gomez
AKA “Bandit”
42
Oceanside
SUMMARY OF CHARGES
Felon in Possession of Ammunition and Firearm, in violation of Title 18, U.S.C., Sec. 922(g).
Maximum Penalties: 10 years in prison and a $250,000 fine.
DEFENDANTS Criminal Case No: 18CR1008-JAH
Name
Age
Hometown
Robert Gonzalez
AKA “Sleepy”
41
Oceanside
Luis Campos
AKA “Monster”
45
Oceanside
Daniel Santiago-Martinez
AKA “Tiny”
26
Oceanside
Martin Rodriguez
AKA “Osama”
30
Oceanside
Sergio Caro
AKA “Soldier”
41
Carlsbad
Raul Lopez
AKA “Lalo,” aka “Speedy”
38
Oceanside
Francisco Arzola
AKA “Spanky”
50
Oceanside
Irma Urena
41
Oceanside
Mario Alcantar
39
Oceanside
SUMMARY OF CHARGES
Conspiracy to Distribute Heroin, in violation of Title 21, U.S.C., Secs. 841(a)(1) and 846.
Maximum Penalties: 40 years in prison with a mandatory minimum sentence of 5 years and a $5 million dollar fine.
DEFENDANT Criminal Case No: 18CR1009-JAH
Name
Age
Hometown
Cesar Herrera
AKA “Froggy”
56
Oceanside
SUMMARY OF CHARGES
Distribution of Heroin, in violation of Title 21, U.S.C., Sec. 841(a)(1).
Maximum Penalties: 20 years in prison and a $1 million fine.
DEFENDANT Criminal Case No: 18CR1010-JAH
Name
Age
Hometown
Theresa Lapolla
52
Oceanside
SUMMARY OF CHARGES
Possession with Intent to Distribute Heroin Within 1000 Feet of a School, in violation of Title 21, U.S.C., Secs. 841(a)(1) and 860.
Maximum Penalties: 80 years in prison with a mandatory minimum sentence of 5 years and a $10 million fine.
DEFENDANT Criminal Case No: 18CR1011-JAH
Name
Age
Hometown
Amando Carrasco Martinez
AKA “Cowboy”
34
Vista
SUMMARY OF CHARGES
Distribution of Methamphetamine, in violation of Title 21, U.S.C., Sec. 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: 18CR1012-JAH
Name
Age
Hometown
Benjamin Martinez
AKA “Knuckles”
24
Oceanside
Miguel Silva
AKA “Mikey”
23
Oceanside
SUMMARY OF CHARGES
Conspiracy to Distribute Methamphetamine in violation of Title 21, U.S.C., Secs. 841(a)(1) and 846;
Distribution of Methamphetamine, in violation of Title 21, U.S.C., Sec. 841(a)(1).
Maximum Penalties: Life in prison with a mandatory minimum sentence of 10 years and a $10 million fine.
DEFENDANT Criminal Case No: 18CR1013-JAH
Name
Age
Hometown
Ray Soto
56
Oceanside
SUMMARY OF CHARGES
Distribution of Methamphetamine, in violation of Title 21, U.S.C., Sec. 841(a)(1).
Maximum Penalties: 40 years in prison with a mandatory minimum sentence of 5 years and a $5 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
North County Regional Gang Task Force, which includes the Federal Bureau of Investigation, San Diego County Sheriff’s Office, Oceanside Police Department, Bureau of Alcohol, Tobacco, Firearms and Explosives, Drug Enforcement Administration, the California Department of Corrections and Rehabilitation, Bureau of Prisons, Homeland Security Investigations, U.S. Marshals Service, California Highway Patrol, and the Escondido and Carlsbad Police Departments.
San Diego Rancher Sentenced for Possession and Distribution of Child PornographyRead the Press Release
Assistant U. S. Attorney Renee Green (619) 546-6775
NEWS RELEASE SUMMARY – February 13, 2018
SAN DIEGO – Christian Clews, the operator of a Carmel Valley horse ranch, was sentenced in federal court today to 210 months in prison for possessing and distributing photographs and videos that depicted children engaged in sexually explicit activity with adults and dogs.
Clews, who pleaded guilty in July but remained free on bond, was immediately taken into custody at the conclusion of the hearing. U.S. District Judge Dana M. Sabraw also sentenced Clews to 25 years of supervised release upon completion of his prison term.
During today’s hearing, Special Assistant U.S. Attorney Renee Green told the court that during a search of the defendant’s computer, federal agents recovered over 800 images and 600 videos of children engaged in sexually explicit conduct. As detailed in the plea agreement, the images and videos included prepubescent boys and girls engaged in a variety of sexual acts. SAUSA Green said Clews’ conduct was not limited to only possession and distribution of child pornography but included repeated sexual victimization of minors for over two decades. SAUSA Green noted that the victims were intimidated for years and finally found the strength to come forward and talk to law enforcement about Clews.
Judge Sabraw described the case as “extraordinary” because Clews’ pattern of activity involved the abuse and exploitation of minors over the course of 25 years. The Court noted that individuals writing letters of support for Clews were likely “not informed” as to Clews’ true conduct in this case. The Court described Clews as having “another side that’s very dark, very predatory, plain and simple.” Judge Sabraw described Clews’ behavior as a “longstanding campaign of predatory conduct,” wherein Clews used his position at the ranch to abuse vulnerable victims. In pronouncing his judgment, Judge Sabraw stated, “There has to be a consequence to that conduct; there has to be a day of accounting.”
“The production of child pornography creates a permanent record of a child’s sexual abuse, and these victims often suffer a lifetime of re-victimization in knowing the images of their worst nightmare are forever memorialized on the Internet,” said U.S. Attorney Adam L. Braverman. “We are heartened by today’s strong sentence because it ensures that a man who contributed to the victimization of children is out of commission for many years.”
“Today’s sentencing of Christian Clews sends a very strong message to child predators who seek to exploit young victims. HSI is committed to working with the San Diego Internet Crimes Against Children Task Force and federal prosecutors to protect children from sexual predators. Investigating these crimes requires a local, national and international commitment and a multi-agency approach of dedicated law enforcement personnel,” said James Plitt, Deputy Special Agent in Charge of Homeland Security Investigations (HSI) in San Diego. “HSI will continue to assist our law enforcement partners, in particular bringing our transnational investigative authorities to these investigations and prosecutions.”
This case was investigated by the San Diego Internet Crimes Against Children Task Force and Homeland Security Investigations. The Internet Crimes Against Children Task Force Program is a national network representing over 4,500 federal, state, and local law enforcement and prosecutorial agencies, all working to combat the sexual exploitation of children through the internet.
DEFENDANT Criminal Case No. 17CR0145-DMS
Christian Clews Age: 52 San Diego, CA
SUMMARY OF CHARGE
Title 18, United States Code, Section 2252(a)(2), Distribution of Images of Minors Engaged in Sexually Explicit Conduct
Title 18, United States Code, Section 2252(a)(4), Possession of Images of Minors Engaged in Sexually Explicit Conduct
Maximum penalties: 20 years in prison (with a mandatory 5 years’ prison for the Distribution count); $250,000 fine; Mandatory Special Assessments of $100 and $5,000 per count; Restitution; Forfeiture
INVESTIGATING AGENCIES
San Diego Internet Crimes Against Children Task Force
Homeland Security Investigations
Former Facilities Manager Sentenced to 30 Months in Prison for Theft from San Diego Workforce PartnershipRead the Press Release
Assistant U. S. Attorneys Emily Allen (619) 546-9738 and Benjamin Katz (619) 546-9604
NEWS RELEASE SUMMARY – February 12, 2018
SAN DIEGO – Jared Palmer, a former facilities manager for the San Diego Workforce Partnership, was sentenced to 30 months in prison today for embezzling more than $450,000 from the local Workforce Development Board that provides job training and placement to San Diego county residents and employers.
U.S. District Court Judge Larry A. Burns also ordered Palmer to pay $455,606.82 in restitution to the Partnership (SDWP).
According to court records, Palmer, as facilities manager, was responsible for approving payment of invoices submitted by janitorial companies contracted to clean SDWP’s facilities. Between 2011 and 2016, Palmer instructed these contractors to purchase items that he claimed were for SDWP’s use, including Nest Smart Thermostats, electronics, and pre-paid debit cards. Palmer then stole the items and replaced the hundreds of invoices that included the cost of these stolen items with false invoices that made it appear as if all of the charges were for legitimate janitorial services. Over the course of five years, Palmer’s scheme netted him at least $455,606.
Because SDWP is a Workforce Development Board funded largely by federal grant dollars, Palmer was convicted of Theft of Federal Program Funds, in violation of 18 U.S.C. § 666.
At sentencing, Judge Burns noted that Palmer’s theft consisted of “hundreds of discrete thefts that would have kept going if not discovered.” Judge Burns noted that Palmer conducted the theft with “great stealth, and great planning” and that the theft had “egregious consequences, not only for [SDWP] but also for the people it assists.”
“This organization does important work that provides job training, placement, and services to thousands of San Diegans every year,” said U.S. Attorney Adam Braverman. “This sentence shows that those who attempt to steal taxpayer dollars intended for worthy causes like this one will be brought to justice.”
“Federal grant dollars were stolen from the San Diego Workforce Partnership by Mr. Palmer, a trusted manager at this non-profit organization,” said FBI Special Agent in Charge John A. Brown. “The FBI will continue to expose and bring criminals to justice who attempt to line their pockets at the expense of federally funded programs intended to benefit our community.”
DEFENDANT Case Number: 17-cr-2157-LAB
Jared Palmer Age: 42
SUMMARY OF CHARGES
Theft of Federal Program Funds, 18 U.S.C. § 666
Maximum penalty: 10 years’ imprisonment, fine double amount obtained, 3 years’ supervised release.
AGENCIES
Federal Bureau of Investigation – San Diego Field Office
U.S. Department of Labor – Office of Inspector General
U.S. Attorney Appoints Opioid CoordinatorsRead the Press Release
Executive Assistant U. S. Attorney Linda Frakes (619) 546-6793 and Assistant U.S. Attorney Dylan Aste (619) 546-7621
NEWS RELEASE SUMMARY – February 8, 2018
SAN DIEGO – U.S. Attorney Adam Braverman has appointed two Opioid Coordinators – one to handle criminal matters and the other civil – to manage the office’s strategy for combatting the deadly opioid epidemic in the Southern District of California.
The criminal coordinator, Linda Frakes, will focus on stopping the illegal importation of heroin, fentanyl and fentanyl analogues as well as targeting dark web vendors who distribute illicit opioids. The civil coordinator, Dylan Aste, will focus on the unlawful prescribing and illegal diversion of these highly addictive drugs.
“This multifaceted approach to enforcing our drug laws will save lives by keeping drugs off our streets and help prevent Americans from becoming addicted to prescription drugs,” Braverman said. “The ongoing opioid epidemic in our district is destroying lives and communities and I’m committed to combatting this crisis with every available asset.”
Attorney General Jeff Sessions issued a directive to all U.S. Attorneys to designate an Opioid Coordinator to work closely with prosecutors, and with other federal, state, tribal, and local law enforcement to coordinate and optimize federal opioid prosecutions in every district.
Braverman took the unique approach of adding an opioid coordinator for civil as well as criminal matters.
As a part of the U.S. Attorney’s strategy to combat the opioid epidemic, the newly designated Opioid Coordinators will make prosecution of all prescription opioids, heroin and fentanyl a top priority, including civil cases involving illegal diversion and unlawful prescribing of these drugs.
Frakes, a 27-year veteran who also serves as the third-highest-ranking prosecutor in the office, was previously supervisor of the Criminal Enterprises section. Her job involved overseeing prosecutions of transnational criminal organizations, including major Mexican drug cartels.
“Our strategy is to hit the opioid crisis hard with every tool we have - from prevention, education and treatment to enforcement,” Frakes said. “We will investigate and prosecute criminals who import fentanyl, distribute fentanyl, or cause death resulting from fentanyl distribution. If you possess chemicals intending to illegally manufacture fentanyl, you will be prosecuted. Our law enforcement partners are fighting alongside our prosecutors to investigate criminal organizations, here and abroad, who traffic in fentanyl. We will use our federal resources to bring you to justice.”
Aste, a civil litigator in the U.S. Attorney’s Office, specializes in investigating and prosecuting allegations of fraud against the United States. He has recovered over $11 million on behalf of the United States.
“Opioid addiction often begins with overprescribing by health care providers and illegal dispensing by pharmacies, and this needs to stop,” Aste said. “I will use the full force of the law to prosecute the prescribers and pharmacies that are contributing to the opioid epidemic.”
Aste has managed several complex opioid-related investigations. He recently settled two cases involving pharmacies. Medical Center Pharmacy paid $750,000 to resolve allegations under the Controlled Substances Act that included diversion of a significant amount of oxycodone and hydrocodone, failure to control the pharmacies’ inventory of controlled substances, and failure to maintain required records of the pharmacies’ distribution of controlled substances. Sixth Avenue Pharmacy in downtown San Diego paid $147,500 to resolve similar allegations.
Opioids are drugs that include illegally obtained heroin and fentanyl and pain relievers available legally by prescription, such as fentanyl, oxycodone (OxyContin), hydrocodone (Vicodin), codeine, morphine, etc. Opioid pain relievers are generally safe when taken for a short time as prescribed by a doctor, but because they produce euphoria, they can be misused. Regular use—even as prescribed by a doctor—can lead to dependence and, when misused, opioid pain relievers can lead to addiction, overdose incidents and deaths.
Opioids have become a significant and growing problem in this district and throughout the nation. In FY 2017, fentanyl seizures at the California ports of entry increased 266 percent in just one year – from 260 kilograms in FY 2016 to 952.
In April 2017, the U.S. Attorney’s Office and its law enforcement partners created a local Fentanyl Working Group. This multi-dimensional group includes local, state and federal investigative agencies, toxicologists, the Medical Examiner’s Office, DEA Lab chemists and first responders, plus local, county and federal prosecutors.
The Fentanyl Working Group has held two educational Fentanyl Forums, one in June of 2017 and one in November 2017. More than 200 local and federal law enforcement officers attended each meeting where they learned about the dangers of encountering fentanyl in the field; the local smuggling trends from Mexico and China to the U.S.; parcel interdiction cases, prosecution of overdose cases in state and federal courts; and prosecution collaboration with our office and that of the District Attorney.
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Father and Son Convicted of 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 – February 8, 2018
SAN DIEGO – A father and son fraud team that won over $4 million of federal contracts using false financial statements and other lies pleaded guilty in federal court today. The father—a long-time self-described government contracting consultant—also admitted to stealing over a half million dollars from his consulting clients.
At a hearing today before U.S. Magistrate Judge Barbara Lynn Major, Joseph Glenn Osborne, Sr., 68, pleaded guilty to wire fraud and participating in a wire fraud conspiracy with his son, Joseph Glenn Osborne, II, 31. Osborne, II pleaded guilty to falsely making a writing to obtain money from the United States.
In his plea agreement, Osborne, Sr. admitted that he stole $588,489 from three different small businesses that retained him as a government contracting consultant. According to court documents and his admissions, Osborne, Sr. promised to represent the victims in obtaining and fulfilling contracts with the U.S. Department of Agriculture (USDA). Instead, he used his position as the sole holder of their web passwords to change their banking information in the online federal system controlling where their contract payments would be sent. When USDA paid on his clients’ contracts, the money was diverted to Osborne, Sr. instead of the victims.
Osborne, Sr. also admitted to lying to his clients when they questioned the missing payments. For example, when one client repeatedly pressed him to attend a conference call to explain the missing money and passwords, Osborne, Sr. repeatedly told the client he couldn’t take the client’s calls because he had been seated on a state court jury for a multiple murder trial. In fact, according to court filings, Osborne, Sr. has never reported for jury duty.
According to the plea agreement, Osborne, Sr. used a portion of the stolen money to put a down payment on a $2.7 million mansion in Rancho Santa Fe, California. Osborne, Sr. forged further emails to conceal the source of the money by falsely claiming that it was an early retirement withdrawal from a benefits account at an agency where he had never worked.
In 2013, after Osborne, Sr. was terminated by his clients, 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 which substantially overstated WWC’s financial health. For example, the statements fraudulently converted WWC’s 2013 year-end cash position from a $5,546 deficit to a $37,954 surplus.
The Osbornes also admitted to falsely certifying to the USDA 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 November 2013 to October 2016 for conduct associated with his prior business, Global Health & Safety.
As a result of these fraudulent submissions, 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, 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, luxury hotel stays, and over $9,000 of new flooring in Osborne, Sr.’s personal residence.
After their contracts were terminated, the plea documents explain that 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, telling the SBA he was a retired colonel in the Marine Corps when in fact Osborne, Sr. had retired as a first lieutenant. Osborne II also supplied a variety of falsified tax returns to the SBA for himself and WWC, including an altered (signed) tax return that converted his real $14,870 tax liability into a fake $5,427 tax overpayment.
In addition to pleading guilty, each defendant agreed to pay restitution to their victims in the amounts of approximately $1.7 million for Osborne, Sr. and $1.5 million for Osborne II.
A sentencing hearing for both defendants is scheduled for May 7, 2018 at 9:00 a.m. before Judge Roger T. Benitez.
“Businesspeople who lie, cheat and steal have no place in federal contracting systems funded with American tax dollars,” said U.S. Attorney Adam L. Braverman. “We will be sure that white collar criminals manipulating the system from behind the scenes are held accountable.”
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.”
FBI Special Agent in Charge John Brown commented, “This comprehensive investigation revealed a continued pattern of theft, deceit, and fraud—all for personal greed and self-promotion. Working closely with our law enforcement partners, the FBI will continue to pursue and bring to justice those who seek to perpetrate these fraudulent financial schemes and take advantage of victim clients, the federal contracting process, and the American tax payers."
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
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.
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.
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
Rabobank NA Pleads Guilty, Agrees to Pay over $360 MillionRead the Press Release
Rabobank National Association (Rabobank), a Roseville, California subsidiary of the Netherlands-based Coöperatieve Rabobank U.A., appeared today before U.S. Magistrate Judge Jill L. Burkhardt and pleaded guilty to a felony conspiracy charge 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 will forfeit $368,701,259 as a result of allowing illicit funds to be processed through the bank without adequate Bank Secrecy Act (BSA) or AML review.
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) made the announcement.
At today’s hearing, Rabobank pleaded guilty to conspiracy to defraud the United States and to corruptly obstruct an examination of a financial institution. In pleading guilty, 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 an examination by the OCC of its operations throughout California, including its Calexico and Tecate bank branches. Rabobank admitted that its deficient AML program allowed hundreds of millions of dollars in untraceable cash, sourced from Mexico and elsewhere, to be deposited into its rural bank branches in Imperial County, and transferred via wire transfers, checks, and cash transactions, without proper notification to federal regulators as required by law. Knowing these failures, during the OCC’s 2012 examination of Rabobank’s BSA/AML compliance program, Rabobank executives actively sought to hide and minimize the deficiencies in its AML program in an effort to deceive the regulators as to its true state in hopes of avoiding regulatory sanctions that had previously been imposed on Rabobank in 2006 and 2008 for nearly identical failures.
Rabobank’s guilty plea comes less than two months after a former Rabobank vice president, George Martin, entered into a deferred prosecution agreement with the United States for his role in aiding and abetting Rabobank’s failure to maintain an AML program that met BSA requirements. Martin admitted his conduct in federal court in San Diego on Dec. 14, 2017. As part of its guilty plea, Rabobank agreed to cooperate with the United States’ continuing investigation.
“When Rabobank learned that substantial numbers of its customers’ transactions were indicative of international narcotics trafficking, organized crime, and money laundering activities, it chose to look the other way and to cover up deficiencies in its anti-money laundering program,” said Acting Assistant Attorney General Cronan. “Worse still, Rabobank took steps to obstruct an examination by its regulator into those same deficiencies. The integrity of our financial system depends on prompt reporting by banks and other financial institutions of suspicious, potentially criminal transactions, and on these entities’ truthfulness and transparency with their regulators. Rabobank’s guilty plea today and forfeiture of more than $360 million is a warning to financial institutions that there are significant consequences for banks that engage in obstructive conduct in an effort to hide their anti-money laundering program failures from their regulators.”
“Rabobank had an obligation to shine light on suspected drug traffickers, money launderers and organized crime,” said U.S. Attorney Braverman. “Instead, this bank deliberately allowed hundreds of millions of dollars of suspicious cash transactions and wire transfers to flow through its branches and took measures to hide this activity from regulators. We will vigorously protect the integrity of the banking system, and we will not allow the financial institutions in our communities to play any role in facilitating international money laundering or financing transnational criminal organizations.”
“It is the responsibility of Homeland Security Investigations to monitor and investigate activity which exploits the global infrastructure, to include financial systems,” said Special Agent in Charge Shaw. “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. This plea and significant forfeiture send a strong message to financial institutions that this activity will not be tolerated.”
“Today, Rabobank is being held accountable for its illegal actions involving the movement of more than $360 million through the U.S. financial system on behalf of high risk customers,” said Special Agent in Charge Rowe. “In today’s environment of increasingly sophisticated financial markets, it’s critical that global institutions follow U.S. law and abide by our anti-money laundering regulations. The IRS is proud to share its world-renowned financial investigative expertise in this and other complex financial investigations.”
The BSA requires financial institutions to implement and maintain an AML compliance program reasonably designed, among other things: (i) to detect suspicious activity indicative of money laundering and other crimes and (ii) to assure and monitor compliance with the BSA’s recordkeeping and reporting requirements, including to report to the U.S. Department of the Treasury any suspicious transactions (through the filing “suspicious activity reports” or “SARs”) indicative of a possible violation of the law. In its plea agreement, Rabobank admitted knowing that between 2009 and 2012 its BSA/AML program failed in significant ways. Some of these BSA/AML program failures resulted from policies and procedures at Rabobank that precluded and suppressed investigations into suspicious transactions that occurred at its branches, by its accountholders, or by individuals conducting transactions on behalf of its accountholders that had various indications of being involved in, derived from, or promoting illegal conduct.
According to court documents, Rabobank received regular alerts of transactions by “High-Risk” customers, or through accounts deemed to be “High-Risk,” and that had been the subject of prior SARs filed by Rabobank. These High-Risk customers and accounts included those controlled and managed by Mexican businesses, nonresident aliens, and U.S.-based accountholders who transacted hundreds of millions of dollars in untraceable cash, sourced from Mexico and elsewhere, into and through Rabobank accounts.
According to court documents, Rabobank also created and implemented policies and procedures to prevent adequate investigations into these suspicious transactions, customers, and accounts. Among those policies and procedures was Rabobank’s “Verified List” – a policy that effectively resulted in Rabobank executing an end-run the BSA/AML and SAR requirements. In particular, Rabobank instructed its employees that if a customer was on the “Verified List,” no further review of that customer’s transactions was necessary -- even if the transactions generated an internal alert, or the customer’s activity had changed dramatically from when it was “verified.” Rabobank’s BSA/AML staff were further instructed to aggressively increase the number of bank accounts on the Verified List, as evidenced by the fact that in 2009, Rabobank had less than 10 “verified” customers, but by 2012, as a result of its defective BSA/AML policies and procedures, it had more than 1,000 “verified” customers.
Additionally, Rabobank admitted failing to monitor and conduct adequate investigations into these transactions and submit SARs to the Financial Crimes Enforcement Network (FinCEN), as required by the BSA. Rabobank’s border branches, including those located in Calexico and Tecate in Imperial County, California, were heavily dependent on cash deposits from Mexico. Rabobank knew that millions of dollars in cash deposits at these branches were likely tied to illicit conduct. In particular, the Calexico branch, located about two blocks from the U.S.-Mexico border, was the “highest performing” branch in the Imperial Valley region due to the cash deposits from Mexico. Throughout the relevant time period, Rabobank continued this practice of soliciting cash-intensive customers from Mexico and elsewhere, all the while employing the foregoing inadequate BSA/AML policies and procedures to address the obvious, known “High Risks” associated with these accounts, transactions, and transactors.
When the OCC began conducting its periodic examination of Rabobank in 2012, Rabobank, acting through three of its executives, agreed to, among other things, knowingly obstruct the OCC’s examination. Rabobank responded to the OCC’s February 2013 initial report of examination with false and misleading information about the state of Rabobank’s BSA/AML program. Rabobank also made false and misleading statements to the OCC regarding the existence of reports developed by a third-party consultant, which detailed the deficiencies and resulting ineffectiveness of Rabobank’s BSA/AML program.
To further conceal the inadequate nature of its BSA/AML program and to avoid “others contradicting our findings” and statements to the OCC, Rabobank demoted or terminated two RNA employees who were raising questions about the adequacy of Rabobank’s BSA/AML program.
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 Vento of the Criminal Division’s Money Laundering and Asset Recovery Section and Assistant U.S. Attorneys Daniel C. Silva, Mark W. Pletcher and David J. Rawls from the Southern District of California.
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Bank Pleads Guilty, Pays Historic Penalty 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 – February 7, 2018
SAN DIEGO – Rabobank National Association, a California subsidiary of the Netherlands-based Coöperatieve Rabobank U.A., pleaded guilty in federal court today to a felony conspiracy charge and agreed to forfeit $368,701,259 – the largest financial penalty in the Southern District of California – for obstructing regulators and hiding deficiencies in its anti-money laundering program.
At today’s hearing before U.S. Magistrate Judge Jill L. Burkhardt, Rabobank admitted to conspiring with several former executives to defraud the United States by unlawfully impeding an examination of its operations throughout California, including its Calexico and Tecate bank branches, by its primary regulator, the Department of the Treasury’s Office of the Comptroller of the Currency (OCC).
Rabobank admitted that its deficient anti-money laundering program resulted in hundreds of millions of dollars in untraceable cash, sourced from Mexico and elsewhere, to be deposited into its rural bank branches in Imperial County, and transferred via wire transfers, checks and cash transactions, without notifying federal regulators as required by law. And when the OCC was on the verge of discovering such grave deficiencies in 2013, Rabobank executives actively sought to deceive the regulators as to the true state of its operations, in the hope of avoiding regulatory sanctions that had previously been imposed on Rabobank in 2006 and 2008 for nearly identical failures.
According to the plea agreement, Rabobank admitted it was aware that the suspicious transactions made by certain customers were indicative of international narcotics trafficking, organized crime and money laundering. Despite this risk, the bank solicited businesses and individuals conducting these transactions, and failed to adequately monitor and conduct adequate investigations into these suspicious transactions.
Rabobank’s guilty plea comes less than two months after a former Rabobank vice president, George Martin, entered into a deferred prosecution agreement with the United States for his role in aiding and abetting Rabobank’s failure to maintain an anti-money laundering program that met Bank Secrecy Act requirements. Martin admitted his conduct in federal court in San Diego on Dec. 14, 2017, and is cooperating with the continuing investigation. As part of its guilty plea, Rabobank also agreed to cooperate with the United States’ continuing investigation of additional criminal conduct.
“Rabobank had an obligation to shine light on suspected drug traffickers, money launderers and organized crime,” said U.S. Attorney Adam L. Braverman. “Instead, this bank deliberately allowed hundreds of millions of dollars of suspicious cash transactions and wire transfers to flow through its branches and took measures to hide this activity from regulators. We will vigorously protect the integrity of the banking system, and we will not allow the financial institutions in our communities to play any role in facilitating international money laundering or financing transnational criminal organizations.”
“When Rabobank learned that substantial numbers of its customers’ transactions were indicative of international narcotics trafficking, organized crime, and money laundering activities, it chose to look the other way and to cover up deficiencies in its anti-money laundering program,” said Acting Assistant Attorney General John P. Cronan. “Worse still, Rabobank took steps to obstruct an examination by its regulator into those same deficiencies. The integrity of our financial system depends on prompt reporting by banks and other financial institutions of suspicious, potentially criminal transactions, and on these entities’ truthfulness and transparency with their regulators. Rabobank’s guilty plea today and forfeiture of more than $360 million is a warning to financial institutions that there are significant consequences for banks that engage in obstructive conduct in an effort to hide their anti-money laundering program failures from their regulators.”
“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.”
“Today, Rabobank is being held accountable for its illegal actions involving the movement of more than $360 million through the U.S. financial system on behalf of high risk customers,” stated IRS Criminal Investigation’s Special Agent in Charge R. Damon Rowe. “In today’s environment of increasingly sophisticated financial markets, it’s critical that global institutions follow U.S. law and abide by our anti-money laundering regulations. The IRS is proud to share its world-renowned financial investigative expertise in this and other complex financial investigations.”
The Bank Secrecy Act (“BSA”), located at Title 31 of the United States Code, requires financial institutions to implement and maintain an anti-money laundering compliance program (“BSA/AML program”) reasonably designed: (i) to detect suspicious activity indicative of money laundering and other crimes and (ii) to assure and monitor compliance with the BSA’s recordkeeping and reporting requirements, including to report to the Department of the Treasury any suspicious transactions (through the filing of “suspicious activity reports” or “SARs”) indicative of a possible violation of the law. In its plea agreement, Rabobank admitted knowing of significant BSA/AML program failures between 2009 and 2012. Some of these failures were caused by Rabobank’s policies and procedures that suppressed any investigation into suspicious transactions that occurred at its branches, by its accountholders, or by individuals conducting transactions on behalf of its accountholders that had all the indications of being involved in, derived from, or promoting illegal conduct.
According to admissions in its plea agreement, Rabobank received regular alerts of transactions by “High-Risk” customers, or through accounts deemed to be “High-Risk,” and that had been the subject of prior SARs filed by Rabobank. These High-Risk customers and accounts included those controlled and managed by Mexican businesses, nonresident aliens and U.S.-based accountholders who transacted hundreds of millions of dollars in untraceable cash, sourced from Mexico and elsewhere, into and through Rabobank accounts.
Rabobank also admitted in its plea agreement to creating and implementing policies and procedures to prevent adequate investigations into these suspicious transactions, customers, and accounts. Among those policies and procedures, Rabobank came up with the “Verified List” – a tool that effectively allowed Rabobank to execute an end-run the BSA/AML and SAR requirements. Rabobank instructed its employees that if a customer was on the “Verified List,” no further review of that customer’s transactions was necessary -- even if the transactions generated an internal alert, or the customer’s activity had changed dramatically from when it was “verified.” Rabobank’s BSA/AML staff were further instructed to aggressively increase the number of bank accounts on the Verified List. In 2009, Rabobank had less than ten “verified” customers; by 2012, as a result of Rabobank’s defective BSA/AML policies and procedures, it had more than 1,000 “verified” customers.
Additionally, Rabobank admitted failing to monitor and conduct adequate investigations into these transactions and submit SARs to the Financial Crimes Enforcement Network (“FinCEN”), as required by the BSA. Rabobank’s border branches, including those located in Calexico and Tecate in Imperial County, were heavily dependent on cash deposits from Mexico. Rabobank knew that millions of dollars in cash deposits at these branches were likely tied to illicit conduct. In particular, the Calexico branch, located about two blocks from the U.S.-Mexico border, was the “highest performing” branch in the Imperial Valley region due to the abundance of cash derived from Mexico. Throughout the time period, Rabobank continued this practice of soliciting cash-intensive customers from Mexico and elsewhere, all the while employing the foregoing inadequate BSA/AML policies and procedures to address the obvious, known “High Risks” associated with these accounts, transactions, and transactors.
When the OCC began conducting its periodic examination of Rabobank in 2012, Rabobank, acting through three of its executives, agreed to, among other things, knowingly obstruct the OCC’s examination. Rabobank responded to the OCC’s February 2013 initial report of examination with false and misleading information about the state of Rabobank’s BSA/AML program. Rabobank made false and misleading statements to the OCC regarding the existence of reports developed by a third-party consultant, which detailed the state of disrepair and resulting ineffectiveness of Rabobank’s BSA/AML program.
To further conceal the inadequate nature of its BSA/AML program and to avoid “others contradicting our findings” and statements to the OCC, Rabobank demoted or terminated two RNA employees who were raising questions about the adequacy of Rabobank’s BSA/AML program.
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 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
Former Supervisory United States Border Patrol Agent Found Guilty of Multiple Firearm OffensesRead the Press Release
Assistant U. S. Attorneys Michael G. Wheat (619) 546-8437, Alessandra P. Serano (619) 546-8104, Jennifer E. McCollough (619) 546-8773
NEWS RELEASE SUMMARY – February 2, 2018
SAN DIEGO – Martin Rene Duran, a former supervisory United States Border Patrol Agent, was convicted by a federal jury today of seven counts of illegal transportation of firearms and one count of possession of a short-barreled rifle following a three-day trial.
According to evidence presented at trial, 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.
Duran is scheduled to appear before Senior U.S. District Judge Marilyn L. Huff on April 30, 2018 at 9:00 a.m. for sentencing.
“Federal law enforcement officers are not above the law,” said U.S. Attorney Adam L. Braverman. “All citizens are required to abide by the laws of the United States.”
“This decision affirms the efforts the Department of Homeland Security makes to hold its personnel to the highest standard and shows it will not tolerate malfeasance which tarnishes the hard work performed by employees on a daily basis,” said Jeffrey Gilgallon, Special Agent in Charge, ICE Office of Professional Responsibility.
“Bringing a case against another federal agent is never pleasant, but we hold public safety and a commitment to justice above all,” said Bill McMullan, Special Agent in Charge of the ATF Los Angeles Field Division. “It is ATF’s mission to quell firearm trafficking and when we see those engaged in illegal firearms activity we act on it.”
DEFENDANT Case Number 15cr2817-H
Martin Rene Duran Age: 48 Chula Vista, CA
SUMMARY OF CHARGES
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
Former U.S. Navy Commander Pleads Guilty to Bribery Conspiracy with Foreign Defense ContractorRead the Press Release
Assistant U.S. Attorneys Mark W. Pletcher (619) 546-9714 and Patrick Hovakimian (619) 546-9718
NEWS RELEASE SUMMARY – January 30, 2018
SAN DIEGO – Former U.S. Navy Commander Troy Amundson pleaded guilty today to federal bribery conspiracy charges. Amundson is the latest U.S. Navy official to plead guilty in the wide-ranging corruption and fraud investigation involving foreign defense contractor Leonard Glenn Francis and his Singapore-based company, Glenn Defense Marine Asia (GDMA).
Amundson, 50, of Ramsey, Minnesota, pleaded guilty to one count of conspiracy to commit bribery, admitting that he conspired with Francis and others to receive things of value, including entertainment expenses and the services of prostitutes, in exchange for taking official acts for the benefit of GDMA and violating his official duties to the United States Navy. Francis pleaded guilty in 2015 to bribery and fraud charges, admitting that he presided over a massive, decade-long conspiracy involving “scores” of U.S. Navy officials, tens of millions of dollars in fraud and millions of dollars in bribes and gifts – from cash, prostitutes and luxury travel to Cuban cigars, Kobe beef and Spanish suckling pigs.
According to admissions made as part of his guilty plea, which was entered today before U.S. Magistrate Judge William V. Gallo of the Southern District of California, from May 2005 to May 2013, Amundson served as the officer responsible for coordinating the U.S. Navy’s joint military exercises with its foreign navy counterparts. As part of his duties, Amundson was responsible for building and maintaining cooperative relationships with the U.S. Navy’s foreign navy exercise partners.
Amundson admitted that from September 2012 through October 2013, Francis paid for dinner, drinks, transportation, other entertainment expenses, and the services of prostitutes for Amundson and other U.S. Navy officers. In one instance, Amundson wrote to Francis from a private e-mail account, arranging to provide Francis with internal, proprietary U.S. Navy information: “Handoff?... [M]y [friend], your program is awesome. I [Amundson] am a small dog just trying to get a bone… however I am very happy with my small program. I still need five minutes to pass some data when we can meet up. Cannot print.” That night, Francis arranged the services of several prostitutes from Mongolia for Amundson.
Having passed confidential, proprietary US Navy information to Francis and having taken numerous other actions in favor of GDMA and in violation of his official duties, Amundson was interviewed by federal criminal investigators in October 2013. As part of his plea agreement, Amundson admitted that he deleted all of his private e-mail account correspondence with Francis following his interview with law enforcement agents earlier that same day.
“Amundson deliberately, methodically, and repeatedly traded his public office for entertainment expenses and the services of prostitutes, and in so doing, aligned himself with a foreign defense contractor over his Navy, his colleagues and his country.” said U.S. Attorney Adam Braverman. “We are pressing forward in this investigation until we are certain that all involved have been held accountable.”
Sentencing is scheduled for April 27, 2018 at 9 a.m. before U.S. District Judge Janis Sammartino.
So far, 20 of 29 defendants charged in the U.S. Navy bribery and fraud scandal have pleaded guilty.
The case is being prosecuted by Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California and Assistant Chief Brian R. Young of the Fraud Section of the Justice Department’s Criminal Division.
DEFENDANT Case Number: 18CR0468-JLS
Commander Troy Amundson Age 50 Ramsey, Minnesota
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
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
Defense Contract Audit Agency
Tennessee Couple and Utah Pharmacy Indicted for $65 Million Tricare FraudRead the Press Release
Assistant U. S. Attorneys Benjamin J. Katz and Mark W. Pletcher (619) 546-9604 and (619) 546-9714
NEWS RELEASE SUMMARY – January 26, 2018
SAN DIEGO – Jimmy Collins and Ashley Collins, a married couple living in Cleveland, Tennessee were arraigned in federal court today on charges that they operated a health care fraud scheme that bilked TRICARE – the health care program that covers United States service members, retirees, and their dependents – out of more than $65 million in pharmacy reimbursement funds.
According to the indictment, Jimmy and Ashley Collins conspired with CFK, Inc., the owner of The Medicine Shoppe, a pharmacy based in Bountiful, Utah, to submit fraudulent claims for compounded medications mailed mainly to active duty Marines and Sailors based in the Southern District of California.
“San Diego is a military town. This indictment sends a message to those who seek to defraud the Department of Defense out of the dollars meant to care for our military members and their families: Fraudsters will be held accountable here,” said U.S. Attorney Adam L. Braverman.
“The theft of military health care dollars directly harms the U.S. Government and our warfighters and will not be tolerated,” said Michael Mentavlos, Special Agent in Charge, Southwest Field Office, Defense Criminal Investigative Service. “Today's indictment demonstrates that DCIS, in partnership with NCIS, IRS, and the FBI, will aggressively pursue those who seek to steal Department of Defense resources.”
“Fraud is criminal abuse of the system that siphons resources away from the American warfighter, said Todd Battaglia, Special Agent in Charge of the NCIS Field Office at Camp Pendleton. “NCIS will continue to work with our law enforcement partners to hold responsible those who would defraud our nation to line their own pockets.”
Compounded medications are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Although compounded drugs are not approved by the Food and Drug Administration (FDA), they are properly prescribed when a physician determines that an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient requires a particular dosage or application or is allergic to a dye or other ingredient.
According to the indictment, between October 2014 and July 2015, Jimmy and Ashley Collins operated a network of recruiters working to induce TRICARE beneficiaries to obtain compounded medications, which cost an average of more than $14,500 per medication per month, from The Medicine Shoppe. To induce TRICARE beneficiaries to sign up to receive these compounded medications, recruiters working for the Collinses were told to inform potential beneficiaries that they would be paid to evaluate the medications as part of an ongoing medical study. In reality, no study was taking place, the indictment said.
Once a recruiter convinced a TRICARE beneficiary to sign up to receive the compounded medications, the straw beneficiary’s information was sent to Choice MD, a Tennessee medical clinic co-owned and operated by the Collinses. Doctors employed by the Collinses at Choice MD then wrote prescriptions for the TRICARE beneficiaries, despite never examining the patients in person. Once signed by the doctors, these prescriptions were not given to the straw beneficiaries, but sent directly to The Medicine Shoppe or related pharmacies, which filled the prescriptions and billed TRICARE at exorbitant prices.
Between December 2014 and May 9, 2015 – the day that TRICARE stopped reimbursing for compounded medications – doctors working for the Collinses authorized 4,442 prescriptions that were filled at The Medicine Shoppe. The Medicine Shoppe billed TRICARE $65,679,512 for these prescriptions.
The owners of The Medicine Shoppe then paid kickbacks to the Collinses based on the number of prescriptions referred by the Collinses recruiter network. Between February and July 2015, these kickback payments to the Collinses totaled at least $45.7 million dollars. The Collinses, in turn, paid kickbacks to the recruiters working as part of their network. Six of these kickback payments, including one for more than $1.4 million, form the basis for the six counts of Payment of Illegal Remuneration brought against Jimmy and Ashley Collins in the indictment.
The indictment also includes a lengthy list of forfeitable funds, property, and items purchased by the Collinses with the proceeds of the scheme. Included among these items is an 82-foot yacht, multiple luxury vehicles (including two Aston-Martins), dozens of pieces of farm equipment and tractor-trailer trucks, and three pieces of Tennessee real estate.
Jimmy and Ashley Collins were arraigned today in the Eastern District of Tennessee. Their next court appearance is on February 2, 2018 in San Diego, before Magistrate Judge William J. Gallo.
DEFENDANTS Case Number 18-cr-0432-JLS
Jimmy D. Collins Age: 53 Cleveland, TN
Ashley Collins Age: 31 Cleveland, TN
CFK, Inc. Utah based corporation
SUMMARY OF CHARGES
Count 1:
Conspiracy to Commit Health Care Fraud – Title 18, U.S.C § 1349
Maximum penalty: 10 years’ imprisonment and fine of higher of $250,000 or double loss amount
Counts 2-7:
Illegal Payment of Remuneration – Title 42 U.S.C. § 1320(a)-7b(b)(2)
Maximum penalty (per count): 5 years’ imprisonment; $250,000 fine
AGENCY
Defense Criminal Investigative Service
Naval Criminal Investigative Service
IRS Criminal Investigation Division, Gulfport, MS
Federal Bureau of Investigation - Jackson, MS Field 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.
Drug Cartel Leader ConvictedRead the Press Release
Assistant U.S. Attorney Matthew J. Sutton
(619) 546-8941
NEWS RELEASE SUMMARY – January 25, 2018
SAN DIEGO – Major Mexican drug cartel leader Sajid Emilio Quintero Navidad, aka Cadete, pleaded guilty in federal court today, following his arrest by United States law enforcement at the San Ysidro Port of Entry on October 11, 2017.
Quintero Navidad, 36, pleaded guilty to all charges in an indictment returned by a federal grand jury in San Diego on September 22, 2017, charging him with Conspiracy to Distribute Controlled Substances Intended for Importation, Conspiracy to Import Controlled Substances, and Conspiracy to Launder Monetary Instruments. Quintero Navidad is the cousin of fugitive Mexican drug lord Rafael Caro Quintero and the associate of high-ranking Mexican cartel leader Ismael Zambada-Garcia, aka Mayo. He is believed to be one of the highest-ranking Mexican cartel leaders to be arrested in the United States.
In August 2014, the Department of Treasury’s Office of Foreign Assets Control (OFAC) designated Quintero Navidad as a “Special Designated Narcotics Trafficker,” pursuant to the Foreign Narcotics Kingpin Designation Act. As part of that designation, OFAC identified Quintero Navidad as a Mexico-based narcotics trafficker who coordinated the transportation of ton quantities of cocaine from South America through Mexico and onto the United States.
In a proceeding today before U.S. District Judge Cathy Ann Bencivengo, Quintero Navidad accepted responsibility for his role as a leader within a drug trafficking organization based in Mexico, acknowledging that he organized the transportation and distribution of hundreds of kilograms of controlled substances, including cocaine and heroin, for importation from Mexico into the United States. Quintero Navidad also admitted to laundering thousands of dollars of U.S. currency, which represented the proceeds of the importation and distribution of drugs within the United States back to Mexico. A sentencing hearing is scheduled for April 20, 2018 at 9 a.m. before Judge Bencivengo.
“Quintero Navidad’s guilty plea today sends a clear message to other drug kingpins operating in Mexico. There is no place to hide because our federal team will work tirelessly to hunt you down to face justice in our courts,” said U.S. Attorney Adam L. Braverman. “Our investigation and prosecution of other high-level cartel members is continuing and is having a significant impact on the global operations of the Mexican drug cartels.”
“Today’s guilty plea is an example of the great partnership of HSI Calexico and other federal law enforcement agencies, who worked diligently to bring this case to prosecution,” said Dave Shaw, special agent in charge of HSI in San Diego. “HSI will continue to investigate, disrupt, and ultimately dismantle these drug trafficking organizations who continue to engage in violent criminal activity.”
“The importance of this plea is twofold: One, drug traffickers will be arrested and prosecuted to the full extent of the law; and two, it sends the message to the other members of this violent drug trafficking organization that they are next,” said DEA San Diego Acting SAC Steve Woodland. “This is a major blow to this international drug trafficking organization and DEA will continue to investigate its members.”
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 indictment in this case marks the conclusion of the initial phase of a multi-year OCDETF investigation. This joint Homeland Security Investigations (HSI) and Drug Enforcement Administration (DEA) investigation targeted the leadership elements, lieutenants, associates, and money launderers connected with the Rafael Caro-Quintero (RCQ) Drug Trafficking Organization and Beltran Leyva Organization (BLO).
U.S. Attorney Braverman praised the outstanding work of the federal team from HSI Calexico/DEA Imperial County in the culmination of this investigation. U.S. Attorney Braverman also thanked U.S. Customs and Border Protection, the U.S. Marshals Service, the U.S. Department of Justice’s Office of Enforcement Operations and the Office of International Affairs, and the Department of Treasury’s Office of Foreign Assets Control for their ongoing assistance in this investigation.
The government’s case is being prosecuted by Assistant U.S. Attorney Matthew J. Sutton.
DEFENDANT Case Number 17CR2976-CAB
Sajid Emilio Quintero Navidad, aka Cadete Age: 36 Mexico City, Mexico
SUMMARY OF CHARGES
Conspiracy to Distribute Controlled Substances for Purpose of Unlawful Importation, in violation of Title 21 U.S.C. §§ 959, 960 and 963; Term of custody including a mandatory minimum 10 years and up to life imprisonment, $10,000,000 fine and 5 years supervised release.
Conspiracy to Import Controlled Substances, in violation of Title 21 U.S.C. §§ 952, 960 and 963. Term of custody including a mandatory minimum 10 years and up to life imprisonment, $10,000,000 fine and 5 years supervised release.
Conspiracy to Launder Monetary Instruments, in violation of Title 18 U.S.C. § 1956. Term of custody up to 20 years’ imprisonment, a fine of $500,000 or twice the value of the monetary instrument or funds involved, and 5 years of supervised release.
AGENCIES
Homeland Security Investigations
Drug Enforcement Administration
Department of Homeland Security, Joint Task Force – Investigations
Customs and Border Protection, Office of Field Operations
United States Marshals Service
Department of Justice, Organized Crime Drug Enforcement Task Forces
Department of Justice, Office of Enforcement Operations
Department of Justice, Office of International Affairs
Department of Treasury, Office of Foreign Assets Control
Customs and Border Protection, Office of Border Patrol
Immigration and Customs Enforcement, Enforcement and Removal Operations
El Centro Police Department
Brawley Police Department
Imperial County District Attorney’s Office
Imperial Valley, Law Enforcement Coordination Center
Scripps Health to Pay $1.5 Million to Settle Claims for Services Rendered by Unauthorized Physical TherapistsRead the Press Release
Scripps Health (Scripps), a health care system based in San Diego, California, has agreed to pay $1.5 million to resolve allegations that it violated the False Claims Act by charging federal health care programs for physical therapy services that were rendered by therapists who did not have billing privileges for these programs and were not supervised by an authorized provider, the Justice Department announced today.
“Federal health care programs require that services are rendered by authorized providers or under the appropriate supervision of an enrolled physician,” said Acting Assistant Attorney General for the Justice Department’s Civil Division Chad A. Readler. “These requirements help protect patients from unscrupulous or unqualified medical professionals. The Department of Justice will continue to ensure that those who knowingly violate these requirements face appropriate consequences.”
Medicare and TRICARE limit billing privileges to enrolled providers. Services from unenrolled providers can be billed as “incident to” the services of an enrolled physician, but only if the physician provided direct supervision. The United States alleged that Scripps billed Medicare and TRICARE for physical therapy services provided by therapists without billing privileges and without the appropriate supervision by a physician.
“This settlement illustrates the United States Attorney’s Office’s continued commitment to protecting the integrity of the Medicare and TRICARE programs,” said U.S. Attorney Adam L. Braverman. “Unlawfully obtained payment from taxpayer-funded programs harms the entire health care system. We will hold accountable all providers who defraud these programs.”
“Patients rightly expect qualified medical providers, or at least professionals working under the supervision of authorized providers,” said Christian J. Schrank, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “As charged, these billing practices cheat patients, taxpayers, and the Medicare program.”
The settlement resolves allegations filed in a lawsuit by Suzanne Forrest, a former Scripps employee, under the qui tam provisions of the False Claims Act, which permit private individuals to sue for false claims on behalf of the government and to share in any recovery. The civil lawsuit was filed in the Southern District of California and is captioned United States ex rel. Forrest v. Scripps Health, Case No. 16-CV-0634. As part of this settlement, Ms. Forrest will receive $225,000.
“Holding providers accountable protects patients and tax-payer funded health care programs,” said Eric S. Birnbaum, FBI Special Agent in Charge of the San Diego Field Office. “The FBI will continue to work jointly with its law enforcement partners, utilizing all tools available, to pursue the repayment of monies to federal health care programs such as Medicare and TRICARE.”
"I appreciate the Department of Justice and the U.S. Attorney for its untiring efforts in holding health care providers accountable to the American taxpayer and our patients," said Vice Admiral Raquel Bono, director of the Defense Health Agency. "The Department of Justice's efforts continue to safeguard the health care benefit for American service members, veterans and their families. The Defense Health Agency continues to work closely with the Justice Department and other state and federal agencies to investigate all those who participated in fraudulent practices."
The government’s resolution of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
This matter was investigated by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Southern District of California, the Office of Inspector General for the U.S. Department of Health and Human Services, the Federal Bureau of Investigation, the Defense Criminal Investigative Service, and the Defense Health Agency Program Integrity Office.
The claims resolved by this settlement are allegations only and there has been no determination of liability.
Scripps Health to Pay $1.5 Million to Settle Claims for Services Rendered by Unauthorized Physical TherapistsRead the Press Release
Assistant U.S. Attorney Dylan M. Aste (619) 546-7621
NEWS RELEASE SUMMARY – January 19, 2017
SAN DIEGO – Scripps Health (Scripps), a health care system based in San Diego, California, has agreed to pay $1.5 million to resolve allegations that it violated the False Claims Act by charging federal health care programs for physical therapy services that were rendered by therapists who did not have billing privileges for these programs and were not supervised by an authorized provider, the Justice Department announced today.
“Federal health care programs require that services are rendered by authorized providers or under the appropriate supervision of an enrolled physician to help protect patients from unscrupulous or unqualified medical professionals,” said Acting Assistant Attorney General for the Justice Department’s Civil Division Chad A. Readler. “The Department of Justice will continue to ensure that those who knowingly violate these requirements face appropriate consequences.”
Medicare and TRICARE limit billing privileges to enrolled providers. Services from unenrolled providers can be billed as “incident to” the services of an enrolled physician, but only if the physician provided direct supervision. The United States alleged that Scripps billed Medicare and TRICARE for physical therapy services provided by therapists without billing privileges and without the appropriate supervision by a physician.
“This settlement illustrates the United States Attorney’s Office’s continued commitment to protecting the integrity of the Medicare and TRICARE programs,” said U.S. Attorney Adam L. Braverman. “Unlawfully obtained payment from taxpayer-funded programs harms the entire health care system. We will hold accountable all providers who defraud these programs.”
“Patients rightly expect qualified medical providers, or at least professionals working under the supervision of authorized providers,” said Christian J. Schrank, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “As charged, these billing practices cheat patients, taxpayers, and the Medicare program.”
The settlement resolves allegations filed in a lawsuit by Suzanne Forrest, a former Scripps employee, under the qui tam provisions of the False Claims Act, which permit private individuals to sue for false claims on behalf of the government and to share in any recovery. The civil lawsuit was filed in the Southern District of California and is captioned United States ex rel. Forrest v. Scripps Health, Case No. 16-CV-0634. As part of this settlement, Ms. Forrest will receive $225,000.
“Holding providers accountable protects patients and tax-payer funded health care programs,” said Eric S. Birnbaum, FBI Special Agent in Charge of the San Diego Field Office. “The FBI will continue to work jointly with its law enforcement partners, utilizing all tools available, to pursue the repayment of monies to federal health care programs such as Medicare and TRICARE.”
“I appreciate the Department of Justice and the U.S. Attorney for their untiring efforts in holding health care providers accountable to the American taxpayer and our patients,” said Vice Admiral Raquel Bono, director of the Defense Health Agency. “The Department of Justice's efforts continue to safeguard the health care benefit for American service members, veterans and their families. The Defense Health Agency continues to work closely with the Justice Department and other state and federal agencies to investigate all those who participated in fraudulent practices.”
The government’s resolution of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
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, the Civil Division’s Commercial Litigation Branch of the Department of Justice, the Office of Inspector General for the U.S. Department of Health and Human Services, the Federal Bureau of Investigation, the Defense Criminal Investigative Service, and the Defense Health Agency Program Integrity Office.
The claims resolved by this settlement are allegations only and there has been no determination of liability.
Chula Vista Man Sentenced in Computer Hacking and Wire Fraud SchemeRead the Press Release
Assistant U. S. Attorney Sabrina Feve (619) 546-6786
NEWS RELEASE SUMMARY – January 19, 2018
SAN DIEGO – Victor Alejandro Fernandez was sentenced in federal court today to 129 months in custody for his involvement in a conspiracy to steal and misuse mortgage customers’ sensitive personal information.
Fernandez was charged along with Jason Ray Bailey, John Gordon Baden and Joel Nava with conspiracy to commit wire fraud and computer hacking. Fernandez was also charged with aggravated identity theft. All four defendants have pleaded guilty.
According to charging and sentencing documents, between 2011 and 2014, Fernandez and his coconspirators were part of a Tijuana-based conspiracy that hacked the computer servers of major U.S. mortgage brokers, stole over 4,200 customers’ mortgage applications, and then used the victims’ social security numbers, addresses, dates of birth and personal information to open unauthorized lines of credit and take over and drain victims’ retirement and brokerage accounts.
For example, according to Fernandez’s plea agreement, he identified multiple victims’ brokerage accounts and fraudulently took control of the victims’ accounts by first calling the brokerage companies and providing the victims’ personal identification information, and then changing the victims’ passwords and contact information. Once he and his codefendants gained control of the accounts, members of the conspiracy wired funds from the victims’ brokerage accounts to coconspirators’ U.S. bank accounts in the San Diego and Calexico areas. Several of these wires were over $20,000 and $30,000 each.
DEFENDANT Case Number: 14cr0277GPC
Victor Alejandro Fernandez Age: 42 Chula Vista, CA
SUMMARY OF CHARGES
Count 1: Conspiracy to Commit Wire Fraud – Title 18, U.S.C., Section 1349
Maximum Penalties: Up to 30 years in prison and $1,000,000 fine.
Count 2: Computer Hacking – Title 18, U.S.C., Sections 1030 (a) (4) and (c) (3) (A)
Maximum Penalties: Up to five years in prison and $250,000 fine
Count 5: Aggravated Identity Theft – Title 18, U.S.C., Section 1028A
Maximum Penalties: 24 months’ consecutive sentence
INVESTIGATING AGENCIES
Federal Bureau of Investigation
Two Men Admit They Were Crew Members Aboard a Go-Fast Vessel Full of Cocaine; Plead Guilty to Drug ChargesRead the Press Release
Assistant U.S. Attorney Sherri Walker Hobson (619) 961-0287
NEWS RELEASE SUMMARY – January 18, 2018
SAN DIEGO – Roberto Carlos Sanchez-Loor and Jose Antonio Gomez-Cuzme, both Ecuadorian nationals, pleaded guilty in federal court today to conspiracy to distribute and cause the distribution of approximately 980 kilograms of cocaine, knowing that the cocaine would be unlawfully imported into the United States.
Each defendant admitted that they were crew members on board a stateless go-fast vessel (GFV) in international waters approximately 110 nautical miles southwest of the Guatemalan and El Salvadorian border and that they were helping transport the cocaine northward for distribution into the United States.
According to court documents, on May 23, 2017, the U.S. Coast Guard (USCG) interdicted the GFV in international waters after a maritime patrol aircraft initially detected the GFV with three persons onboard. The USCG Cutter Waesche interdicted the GFV.
The defendants will appear for sentencing on April 6, 2018 before U.S. District Court Judge Dana M. Sabraw. The remaining defendant, Edwin Cristobal Vera-Solorzano, is set for a motion hearing on January 26, 2018 at 2 p.m.
Bales of Cocaine Seized from GFV
Blue GFV containing bales of cocaine
Individual cocaine packages weighing 980 kilograms taken from GFV.
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 Criminal Case No.17CR1656DMS
ROBERTO CARLOS SANCHEZ-LOOR 32 years old Ecuador
JOSE ANTONION GOMEZ-CUZME 31 years old Ecuador
SUMMARY OF CHARGES
Conspiracy to distribute cocaine intending to unlawfully import into the United States
21 U.S.C. 959, 960 and 963
Maximum Penalty: Ten-year mandatory minimum to life; fine of $1 million
AGENCIES
Homeland Security Investigations (HSI)
U.S. Coast Guard (USCG)
Customs & Border Protection (CBP)
Drug Enforcement Administration (DEA)
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Serial Fraudster Convicted; Daniel Stephen Wray Directed Fraudulent Credit Card Scheme Targeting San Diego RetailersRead the Press Release
Assistant U.S. Attorney Nicholas W. Pilchak and Matthew J. Sutton
(619) 546-9709 and (619) 546-8941
NEWS RELEASE SUMMARY – January 18, 2018
SAN DIEGO – Daniel Stephen Wray pleaded guilty in federal court today, admitting that he was the leader of an elaborate scheme to steal identities and make and use fraudulent credit cards at multiple San Diego retailers.
Wray, 29, pleaded guilty to an indictment returned by a federal grand jury on November 16, 2017, charging him with Conspiracy to Commit Access Device Fraud. 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 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.
In a proceeding today before U.S. Magistrate Judge Andrew G. Schopler, 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 used these fraudulent credit cards to make tens of thousands of dollars in purchases, ranging from Apple iPads, luxury wristwatches, gold and silver, and large quantities of liquor and energy drinks from large San Diego retailers. Wray also admitted to being a prior federal felon in that he was previously convicted of illegally possessing 269 counterfeit access devices in 2014. A sentencing hearing is scheduled for May 7, 2018 at 8:30 a.m. before U.S. District Judge John Houston.
“Identity theft is one of the fastest growing crimes in the United States,” said U.S. Attorney Adam L. Braverman. “We will vigorously prosecute those who prey on our citizens and steal their identities.”
“Today’s change of plea is a reminder that the U.S. Secret Service and its law enforcement partners will actively investigate and pursue prosecution of those who engage in financial fraud and use others’ personal information for their own personal gain,” said United States Secret Service Special Agent in Charge Brian S. Christensen.
This case was investigated by the San Diego Regional Fraud Task Force. The Task Force is led by the United States Secret Service, together with multiple state and local partners, including the San Diego Police Department and the San Diego County District Attorney’s Office. 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
Brother of San Diego Man Killed Fighting for Isis Sentenced to 10 Years for Terrorism-Related Charges and Illegal Firearms PossessionRead the Press Release
Assistant U. S. Attorney Shane Harrigan (619) 546-6981 and Caroline Han (619) 546-6968
NEWS RELEASE SUMMARY – January 12, 2018
SAN DIEGO – Marchello Dsaun McCain, a convicted violent felon and the brother of Douglas McCain, the first known American who died fighting for the Islamic State of Iraq and al-Sham (ISIS), was sentenced in federal court today to 10 years in prison for his illegal possession of a cache of firearms and body armor and making false statements to federal agents involving international terrorism.
In a related case, the United States unsealed a two-count indictment charging Canadian national and former San Diego resident Abdullahi Ahmed Abdullahi with providing, and conspiring with Douglas and other individuals in the United States and Canada to provide, material support to terrorists engaged in violent activities in Syria, that is, a conspiracy to murder, kidnap and maim persons in a foreign country.
On March 9, 2014, Douglas McCain departed the U.S. and traveled to Syria where he joined and fought for ISIS. Approximately five months later, on or about August 25, 2014, Douglas McCain was killed in Syria fighting a battle against the Free Syrian Army. Following Douglas McCain’s death, Federal Bureau of Investigation Joint Terrorism Task Force (FBI-JTTF) agents interviewed Marchello McCain on several occasions from August 26, 2014 through January 23, 2015, when agents arrested him on federal firearms charges.
In January 2016, Marchello McCain, who was previously convicted of two felony crimes of violence in Minnesota involving assault with a firearm, pleaded guilty to five counts of possession of firearms and ammunition by a felon and one count of possession of body armor by a violent felon. Eight months later, in September 2016, he pleaded guilty to making false statements to FBI-JTTF agents concerning his assistance to and knowledge of individuals providing material support (personnel and money) to individuals engaged in violent terrorist activities abroad and ISIS, including Douglas McCain and Abdullahi.
As part of his guilty pleas, McCain admitted that he made material false statements to the agents about his knowledge of the purpose of his brothers’ travel abroad and the methods of payment and source of monies to fund such travel. McCain acknowledged that he possessed over nine firearms, which included a stolen firearm and several semi-automatic 9 mm pistols, an AR-15 style semi-automatic rifle and an M1 Carbine .30 caliber semi-automatic rifle with a large capacity magazine. Marchello McCain also admitted that on February 13, 2014, approximately three weeks prior to Douglas McCain’s departure to fight in Syria, Marchello McCain went to a San Diego gun range with his brother and shot firearms, including an AR-15 style semi-automatic rifle and a 12-gauge pump-action shotgun.
In imposing sentence, the court found that defendant’s obstructive conduct frustrated, delayed and thwarted the United States’ efforts to uncover the scope and membership of conspiracies to provide material support to terrorists and a foreign terrorist organization, ISIS.
“ISIS has brought the war on terror closer to home by directing and inspiring attacks in the U.S. and other countries, thereby putting American lives in danger,” said U.S. Attorney Adam Braverman. “By lying to federal agents, Marchello McCain delayed, frustrated and thwarted an investigation into a group that supplied U.S. and Canadian fighters to ISIS. We are committed to doing whatever it takes to protect American lives here and abroad.”
“Counterterrorism investigations are the highest priority investigations conducted by FBI Joint Terrorism Task Forces,” commented FBI Special Agent in Charge Eric S. Birnbaum. “When someone misleads or obstructs counterterrorism investigations, this can adversely affect investigative activity in these important cases. Today's sentence will hold Mr. McCain accountable for his actions and dissuade others from lying to law enforcement agents concerning international terrorism matters.”
The defendant’s lies, including his false statements regarding the source and means of the financing of Douglas’ travel were not only intended to prevent the United States from finding out about the involvement of Abdullahi and others, but were also intended to prevent the discovery of his own involvement.
As detailed in the United States’ pleadings, the defendant’s involvement included: agreeing to travel to Syria and join his brother in violent jihadist activities; assisting Douglas and others in traveling to Syria to engage in violent jihadist activities by taking Douglas to a gun range to target shoot semi-automatic weapons; depositing cash into his wife’s bank account and letting Douglas use his wife’s credit card to purchase plane tickets to Turkey, a known entry point for foreign fighters seeking to enter Syria, and to make hotel reservations; regularly communicating with Douglas and other individuals regarding the financial and logistical needs of foreign fighters in Syria; wiring $800 to an ISIS operative in Turkey to support Douglas and/or others engaged in violent jihadist activities; and engaging in obstructive conduct to conceal the material support conspiracies.
Notwithstanding the obstructive conduct of McCain, the United States continued its investigation of the terrorist activities of Douglas McCain, Abdullahi and others. On March 10, 2017, a federal grand jury in the Southern District of California returned a two-count sealed indictment charging Abdullahi with conspiring to provide, and providing, material support to terrorists.
On September 15, 2017, pursuant to an extradition request by the United States, Canadian authorities arrested Abdullahi. Abdullahi is currently detained in Canadian custody without bail, pending an extradition hearing scheduled for May 31, 2018. On January 3, 2018, the Abdullahi indictment was unsealed. Abdullahi is also facing charges in Canada for a January 9, 2014 armed robbery of an Edmonton jewelry store.
The Abdullahi indictment alleges that from in or about August 2013 through in or about November 2014, Abdullahi conspired with Douglas and other individuals to provide personnel and money to individuals engaged in terrorist activities in Syria, including the killing, kidnapping and maiming of persons. The charged conspiracy alleges the participation and/or assistance of Abdullahi and approximately 14 other individuals and spans four countries, the United States, Canada, Turkey and Syria.
In preparation for their travels, Douglas and other members of the conspiracy practiced with firearms in San Diego and Canada. According to the indictment, Abdullahi, Douglas and others agreed to travel to Syria to support and join terrorist fighters engaged in terrorist activity, including the killing, kidnapping and maiming of persons.
In order to raise funds to support their efforts to support and join terrorist fighters in Syria, members of the conspiracy encouraged others to commit crimes against the “kuffar” (an Arabic term meaning infidels or non-believers), such as theft. In furtherance of this material support conspiracy, the indictment alleges that on January 9, 2014, prior to the travel of Douglas and another coconspirator, Abdullahi committed an armed robbery of a jewelry store in Edmonton, Alberta, Canada, in order to finance the travel of Douglas and other members of the conspiracy to Syria. Thereafter, Abdullahi wired and caused others to wire money to other members of the conspiracy in the United States -- including approximately $3,100 to Douglas – in order to finance the travel of foreign fighters from North America to support and join terrorist fighters engaged in terrorist activities in Syria.
Additionally, members of the conspiracy, including Abdullahi, wired and caused money to be wired to third-party intermediaries in Gaziantep, Turkey (located approximately 40 miles from the Syrian border) for the purpose of supporting members of the conspiracy fighting and engaging in terrorist activity in Syria, including the killing, kidnapping, an maiming of persons.
The government alleges that because of the efforts of Abdullahi and other coconspirators, beginning in November 2013 through November 2014, five coconspirators, including Douglas McCain, traveled from North America to Syria, via Turkey, and acted as foreign fighters in Syria engaging in terrorist activity in Syria, including the murder of persons. Douglas McCain was killed in battle fighting for ISIS in August 2014. The remaining four coconspirators were all killed in Syria in mid-November 2014.
DEFENDANT Criminal Case No. 15CR0174-W
Marchello Dsaun McCain Age 35 San Diego, California
SUMMARY OF CHARGES
False Statements Involving International Terrorism – Title 18, U.S.C., Sections 1001(a)(2)
Maximum penalty: 8 years’ imprisonment and $250,000 fine (per count)
Felon in Possession of Firearms and Ammunition – Title 18, U.S.C., Sections 922(g)(1)
Maximum penalty: 10 years’ imprisonment and $250,000 fine.
Felon in Possession of Body Armor by a Violent Felon – Title 18, U.S.C., Sections 931
Maximum penalty: 3 years’ imprisonment and $250,000 fine.
DEFENDANT Criminal Case No. 17CR0622-W
Abdullahi Ahmed Abdullahi Age 33 Edmonton, Alberta, Canada
SUMMARY OF CHARGES
Conspiracy to Provide Material Support to Terrorists – Title 18, U.S.C., Sections 2339A(a)
Maximum penalty: 8 years’ imprisonment and $250,000 fine (per count)
Providing Material Support to Terrorists – Title 18, U.S.C., Sections 2339A(a)
Maximum penalty: 15 years’ imprisonment and $250,000 fine.
INVESTIGATING AGENCIES
San Diego Joint Terrorism Task Force
Federal Bureau of Investigation
Federal Air Marshal Service
Department of Homeland Security, Homeland Security Investigations
Department of Homeland Security, U.S. Border Patrol
Brother of San Diego Man Killed Fighting for ISIS Sentenced to 10 Years for Terrorism Related Charges and Illegal Firearms PossessionRead the Press Release
Marchello Dsaun McCain, a convicted violent felon and the brother of Douglas McCain, the first known American who died fighting for the Islamic State of Iraq and al-Sham (ISIS), was sentenced in federal court today to 10 years in prison for his illegal possession of a cache of firearms and body armor and making false statements to federal agents involving international terrorism.
In a related case, the United States unsealed a two-count indictment charging Canadian national and former San Diego resident Abdullahi Ahmed Abdullahi with providing, and conspiring with Douglas and other individuals in the United States and Canada to provide, material support to terrorists engaged in violent activities in Syria, that is, a conspiracy to murder, kidnap and maim persons in a foreign country.
On March 9, 2014, Douglas McCain departed the U.S. and traveled to Syria where he joined and fought for ISIS. Approximately five months later, on or about Aug. 25, 2014, Douglas McCain was killed in Syria fighting a battle against the Free Syrian Army. Following Douglas McCain’s death, Federal Bureau of Investigation Joint Terrorism Task Force (FBI-JTTF) agents interviewed Marchello McCain on several occasions from Aug. 26, 2014 through Jan. 23, 2015, when agents arrested him on federal firearms charges.
In January 2016, Marchello McCain, who was previously convicted of two felony crimes of violence in Minnesota involving assault with a firearm, pleaded guilty to five counts of possession of firearms and ammunition by a felon and one count of possession of body armor by a violent felon. Eight months later, in September 2016, he pleaded guilty to making false statements to FBI-JTTF agents concerning his assistance to and knowledge of individuals providing material support (personnel and money) to individuals engaged in violent terrorist activities abroad and ISIS, including Douglas McCain and Abdullahi.
As part of his guilty pleas, McCain admitted that he made material false statements to the agents about his knowledge of the purpose of his brothers’ travel abroad and the methods of payment and source of monies to fund such travel. McCain acknowledged that he possessed over nine firearms, which included a stolen firearm and several semi-automatic 9 mm pistols, an AR-15 style semi-automatic rifle and an M1 Carbine .30 caliber semi-automatic rifle with a large capacity magazine. Marchello McCain also admitted that on Feb. 13, 2014, approximately three weeks prior to Douglas McCain’s departure to fight in Syria, Marchello McCain went to a San Diego gun range with his brother and shot firearms, including an AR-15 style semi-automatic rifle and a 12-gauge pump-action shotgun.
In imposing sentence, the court found that defendant’s obstructive conduct frustrated, delayed and thwarted the United States’ efforts to uncover the scope and membership of conspiracies to provide material support to terrorists and a foreign terrorist organization, ISIS.
“ISIS has brought the war on terror closer to home by directing and inspiring attacks in the U.S. and other countries, thereby putting Americans lives in danger,” said U.S. Attorney Adam Braverman. “By lying to federal agents, Marchello McCain delayed, frustrated and thwarted an investigation into a group that supplied U.S. and Canadian fighters to ISIS. We are committed to doing whatever it takes to protect American lives here and abroad.”
“Counterterrorism investigations are the highest priority investigations conducted by FBI Joint Terrorism Task Forces,” commented FBI Special Agent in Charge Eric S. Birnbaum. “When someone misleads or obstructs counterterrorism investigations, this can adversely affect investigative activity in these important cases. Today's sentence will hold Mr. McCain accountable for his actions and dissuade others from lying to law enforcement agents concerning international terrorism matters.”
The defendant’s lies, including his false statements regarding the source and means of the financing of Douglas’ travel were not only intended to prevent the United States from finding out about the involvement of Abdullahi and others, but were also intended to prevent the discovery of his own involvement.
As detailed in the United States’ pleadings, the defendant’s involvement included: agreeing to travel to Syria and join his brother in violent jihadist activities; assisting Douglas and others in traveling to Syria to engage in violent jihadist activities by taking Douglas to a gun range to target shoot semi-automatic weapons; depositing cash into his wife’s bank account and letting Douglas use his wife’s credit card to purchase plane tickets to Turkey, a known entry point for foreign fighters seeking to enter Syria, and to make hotel reservations; regularly communicating with Douglas and other individuals regarding the financial and logistical needs of foreign fighters in Syria; wiring $800 to an ISIS operative in Turkey to support Douglas and/or others engaged in violent jihadist activities; and engaging in obstructive conduct to conceal the material support conspiracies.
Notwithstanding the obstructive conduct of McCain, the United States continued its investigation of the terrorist activities of Douglas McCain, Abdullahi and others. On March 10, 2017, a federal grand jury in the Southern District of California returned a two-count sealed indictment charging Abdullahi with conspiring to provide, and providing, material support to terrorists.
On Sept. 15, 2017, pursuant to an extradition request by the United States, Canadian authorities arrested Abdullahi. Abdullahi is currently detained in Canadian custody without bail, pending an extradition hearing scheduled for May 31, 2018. On January 3, 2018, the Abdullahi indictment was unsealed. Abdullahi is also facing charges in Canada for a Jan. 9, 2014 armed robbery of an Edmonton jewelry store.
The Abdullahi indictment alleges that from in or about August 2013 through in or about November 2014, Abdullahi conspired with Douglas and other individuals to provide personnel and money to individuals engaged in terrorist activities in Syria, including the killing, kidnapping and maiming of persons. The charged conspiracy alleges the participation and/or assistance of Abdullahi and approximately 14 other individuals and spans four countries, the United States, Canada, Turkey and Syria.
In preparation for their travels, Douglas and other members of the conspiracy practiced with firearms in San Diego and Canada. According to the indictment, Abdullahi, Douglas and others agreed to travel to Syria to support and join terrorist fighters engaged in terrorist activity, including the killing, kidnapping and maiming of persons.
In order to raise funds to support their efforts to support and join terrorist fighters in Syria, members of the conspiracy encouraged others to commit crimes against the “kuffar” (an Arabic term meaning infidels or non-believers), such as theft. In furtherance of this material support conspiracy, the indictment alleges that on Jan. 9, 2014, prior to the travel of Douglas and another co-conspirator, Abdullahi committed an armed robbery of a jewelry store in Edmonton, Alberta, Canada, in order to finance the travel of Douglas and other members of the conspiracy to Syria. Thereafter, Abdullahi wired and caused others to wire money to other members of the conspiracy in the United States -- including approximately $3,100 to Douglas – in order to finance the travel of foreign fighters from North America to support and join terrorist fighters engaged in terrorist activities in Syria.
Additionally, members of the conspiracy, including Abdullahi, wired and caused money to be wired to third-party intermediaries in Gaziantep, Turkey (located approximately 40 miles from the Syrian border) for the purpose of supporting members of the conspiracy fighting and engaging in terrorist activity in Syria, including the killing, kidnapping, an maiming of persons.
The government alleges that because of the efforts of Abdullahi and other co-conspirators, beginning in November 2013 through November 2014, five co-conspirators, including Douglas McCain, traveled from North America to Syria, via Turkey, and acted as foreign fighters in Syria engaging in terrorist activity in Syria, including the murder of persons. Douglas McCain was killed in battle fighting for ISIS in August 2014. The remaining four co-conspirators were all killed in Syria in mid-November 2014.
DEFENDANT Criminal Case No. 15CR0174-W
Marchello Dsaun McCain Age 35 San Diego, California
SUMMARY OF CHARGES
False Statements Involving International Terrorism – Title 18, U.S.C., Sections 1001(a)(2)
Maximum penalty: 8 years’ imprisonment and $250,000 fine (per count)
Felon in Possession of Firearms and Ammunition – Title 18, U.S.C., Sections 922(g)(1)
Maximum penalty: 10 years’ imprisonment and $250,000 fine.
Felon in Possession of Body Armor by a Violent Felon – Title 18, U.S.C., Sections 931
Maximum penalty: 3 years’ imprisonment and $250,000 fine.
DEFENDANT Criminal Case No. 17CR0622-W
Abdullahi Ahmed Abdullahi Age 33 Edmonton, Alberta, Canada
SUMMARY OF CHARGES
Conspiracy to Provide Material Support to Terrorists – Title 18, U.S.C., Sections 2339A(a)
Maximum penalty: 8 years’ imprisonment and $250,000 fine (per count)
Providing Material Support to Terrorists – Title 18, U.S.C., Sections 2339A(a)
Maximum penalty: 15 years’ imprisonment and $250,000 fine.
INVESTIGATING AGENCIES
San Diego Joint Terrorism Task Force
Federal Bureau of Investigation
Federal Air Marshal Service
Department of Homeland Security, Homeland Security Investigations
Department of Homeland Security, U.S. Border Patrol
Three Members and Associates of the Westside Crips Criminal Street Gang Sentenced to Prison for Racketeering Conspiracy Involving Sex Trafficking, Narcotics Trafficking, and Other CrimesRead the Press Release
Assistant U. S. Attorneys Alessandra P. Serano (202) 252-5843 or Joseph Orabona (619) 546-7951
NEWS RELEASE SUMMARY – January 8, 2018
SAN DIEGO – Two gang members of the Westside Crips and one hotel manager of two national brand hotels in Oceanside were sentenced last week for their participation in a racketeering conspiracy involving sex trafficking, narcotics trafficking, and other violent crimes.
Richard Cleveland (aka “Face”), Michael Sullivan (aka “Du-Low”), and Umesh Oza (aka “Kevin”), previously admitted their respective membership and association with the Westside Crips, who primarily operated in Oceanside and elsewhere. Last week, United States District Judge John A. Houston sentenced Cleveland to 57 months in prison, sentenced Sullivan to 36 months in prison, and Oza, a hotel manager for two national brand hotel chains, to 4 months in prison and 180 days of home detention. Three other co-defendants – Ameer Roby aka “Tiny Dum”, Peter Miranda aka “Lil’ Burger”, Shane Anderson aka “Tiny West” and Larry Monroe - are scheduled for sentencing for later this month.
According to court documents, the members of the conspiracy were involved in drug trafficking, prostitution, attempted murder, assaults, and robberies. Their criminal activity primarily occurred between 2004 through February 2017. According to court documents, members of Westside Crips are akin to a crime family, where all members work together committing various crimes for the purpose of making money. The indictment alleges that the defendants took on different responsibilities within the criminal enterprise. Some sold narcotics. Others managed prostitutes and transported them all over the country. The hotel manager provided a safe haven for the alleged gang members to conduct their illegal activities.
For that reason, the defendants are charged with racketeering conspiracy—the statute traditionally used for organized-crime syndicates and mobsters. But as members, associates, and facilitators of criminal street gangs such as these, join forces and become more sophisticated and prolific in their illicit business pursuits, this statute is an effective tool to address all aspects of the criminal conduct.
In furtherance of the RICO conspiracy, Sullivan admitted he engaged in an aggravated assault using a semi-automatic firearm on two suspected juvenile rival gang members in 2004. More recently, Sullivan admitted to promoting prostitution of adult females between 2013 and 2016. Sullivan also admitted to possessing methamphetamine for sale. Moreover, to further his role in the RICO conspiracy, Cleveland admitted he engaged in drug trafficking and promotion of prostitution of adult females between 2015 and 2016. His drug trafficking activity also involved the sale of methamphetamine.
Oza admitted that as the manager of two motels located in Oceanside, California, he further the RICO conspiracy by allowing members of the Westside Crips to utilize the motels for their criminal activity. In particular, Oza admitted that he allowed members, whom he believed were pimps working for the criminal enterprise, to rent rooms to adult females acting as prostitutes.
January marks National Slavery and Human Trafficking Prevention Month. President Trump recently remarked in a nation press release:
Human trafficking is a modern form of the oldest and most barbaric type of exploitation. It has no place in our world. This month we do not simply reflect on this appalling reality. We also pledge to do all in our power to end the horrific practice of human trafficking that plagues innocent victims around the world.
“Gang members and associates and those who assist them continue to plague our community with sex trafficking, violence, drugs and other crimes,” said U.S. Attorney Adam L. Braverman. “Our office will continue to use any and all resources to combat the problem.”
DEFENDANTS Case Number 17cr0270-JAH
Richard Cleveland aka “Face” Age: 37 Oceanside, CA
Michael Sullivan aka “Du-Low” Age: 33 Oceanside, CA
Umesh Oza aka “Kevin” Age: 32 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
Sinaloa Cartel Cell Leader Pleads Guilty for Involvement in the Importation of Tons of Narcotics into the United StatesRead the Press Release
Sinaloa Cartel cell leader Damaso Lopez-Serrano aka “Mini Lic,” pleaded guilty in federal court today to conspiracy to distribute controlled substances for purpose of unlawful importation following his self-surrender to U.S. law enforcement authorities at the Calexico West, Mexico Port of Entry on July 27, 2017.
Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Adam L. Braverman of the Southern District of California and Acting Special Agent in Charge Steve S. Woodland of the U.S. Drug Enforcement Administration (DEA) San Diego made the announcement.
Lopez-Serrano, 29, of Culiacan, Mexico, is believed to be the highest-ranking Mexican cartel leader ever to self-surrender in the United States. Lopez-Serrano pleaded guilty to all charges in an indictment returned by a federal grand jury in San Diego on Aug. 19, 2016, charging him and five of his close associates with conspiracy to distribute methamphetamine, heroin and cocaine intended for importation and conspiracy to import methamphetamine, heroin and cocaine.
Lopez-Serrano also pleaded guilty to an indictment returned Dec. 4, 2016, in the Eastern District of Virginia by the U.S. Attorney’s Office for the Eastern District of Virginia and the Criminal Division’s Narcotic and Dangerous Drug Section charging him with conspiracy to distribute cocaine intended for importation.
In a proceeding today before U.S. District Judge Dana M. Sabraw, Lopez-Serrano accepted responsibility for his role as a leader within the Sinaloa Cartel, acknowledging that he organized the transportation and distribution of thousands of kilograms of controlled substances, including methamphetamine, cocaine and heroin, for importation from Mexico into the United States. Lopez-Serrano also admitted to possessing firearms for the purpose of promoting the Sinaloa Cartel’s narcotics trafficking activities. A sentencing hearing is scheduled for July 12, 2018 at 10 a.m. before Judge Sabraw.
“Damaso Lopez-Serrano’s conviction strikes a serious blow to the leadership of the Sinaloa Cartel and its violent drug trafficking activities,” said Acting Assistant Attorney General Cronan. “The Administration, the Department and our law enforcement partners are steadfast in our commitment to pursuing and dismantling the international drug rings that poison our communities.”
“Cartel leaders have two options – self-surrender or we will work with our counterparts to find you, arrest you and extradite you to San Diego,” said U.S. Attorney Braverman. “For Lopez-Serrano’s distribution of literally tons of methamphetamine, cocaine and heroin across the border to America, he will now face justice in a San Diego federal court.”
“The guilty plea of this defendant tells the drug traffickers what they need to know,” said Acting Special Agent in Charge Woodland. “DEA will keep picking off these violent criminals one by one until there are no more willing to get involved for fear that law enforcement will be coming for them soon. In the face of the current drug crisis we face in this country, DEA will continue to investigate and bring to justice these violent criminals.”
The Southern District of California indictment in this case marked the conclusion of the fourth phase of a five-year investigation that, in total, has resulted in charges against over 125 people and has had a significant impact on the worldwide operations of the Sinaloa Cartel. This investigation has also offered one of the most comprehensive views to date of the inner workings of one of the world’s most prolific, violent and powerful drug cartels. Cartel members and associates were targeted in this massive investigation involving multiple countries, numerous law enforcement agencies around the United States, a number of federal districts and over 250 court-authorized wiretaps in the Southern District of California.
This case began in late 2011 as an investigation of what was at first believed to be a small-scale drug distribution cell in National City and Chula Vista in San Diego County, California. It became evident that the drugs were being supplied by the Sinaloa Cartel, and the case evolved into a massive multi-national, multi-state probe that resulted in scores of arrests and seizures of 1,397 kilograms of methamphetamine, 2,214 kilograms of cocaine, 17.2 tons of marijuana, 95.84 kilograms of heroin, and $27,892,706 in narcotics proceeds.
The primary indictment in this investigation was previously unsealed targeting the alleged leader of the cartel, Ismael Zambada-Garcia, known as “El Mayo,” as well as two of his four sons - Ismael Zambada-Sicairos, known as “Mayito Flaco,” and Ismael Zambada-Imperial, known as “Mayito Gordo.” Zambada-Imperial was arrested by Mexican authorities in November 2014 and is pending extradition to the Southern District of California. Also part of that indictment is Ivan Archivaldo Guzman-Salazar, known as “Chapito,” whose father Joaquín “El Chapo” Guzmán Loera was the alleged leader of the Sinaloa Cartel along with Mayo.
As part of this investigation, U.S. authorities previously arrested and prosecuted another son of Mayo - Serafin Zambada-Ortiz, who pleaded guilty in the Southern District of California in September 2014 to drug trafficking charges.
José Rodrigo Aréchiga-Gamboa, commonly referred to by his alias “El Chino Ántrax,” was arrested in the Netherlands, extradited to the United States by Dutch authorities in July 2014 and pleaded guilty to drug trafficking charges in May 2015. Arechiga-Gamboa is believed to have worked for the Sinaloa Cartel as the leader of a violent enforcement arm of the Sinaloa Cartel called “Los Antrax” and a key lieutenant of Mayo.
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 investigation was conducted by DEA, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, U.S. Customs and Border Protection (CBP)’s Office of Field Operations, U.S. Border Patrol, U.S. Marshals Service, Internal Revenue Service Criminal Investigation, FBI, the U.S. Attorney’s Office for the Eastern District of Virginia, Department of Justice’s Organized Crime Drug Enforcement Task Forces, the Criminal Division’s Office of Enforcement Operations and Office of International Affairs.
The case is being prosecuted by Assistant U.S. Attorney Matthew J. Sutton from the Southern District of California and Trial Attorneys Amanda Liskamm and Michael Lang of the Criminal Division’s Narcotic and Dangerous Drug Section and Assistant U.S. Attorneys William M. Sloan and Mary K. Daly of the Eastern District of Virginia.
Sinaloa Cartel Cell Leader ConvictedRead the Press Release
Director of Media Relations Kelly Thornton
(619) 546-9726
NEWS RELEASE SUMMARY – January 10, 2018
SAN DIEGO – Sinaloa Cartel cell leader Damaso Lopez-Serrano, aka “Mini Lic,” pleaded guilty in federal court today following his self-surrender to United States law enforcement authorities at the Calexico West Port of Entry on July 27, 2017.
Lopez-Serrano, 29, is believed to be the highest-ranking Mexican cartel leader ever to self-surrender in the United States. Lopez-Serrano pleaded guilty to all charges in an indictment returned by a federal grand jury in San Diego on August 19, 2016, charging him and five of his close associates with Conspiracy to Distribute Methamphetamine, Heroin and Cocaine Intended for Importation and Conspiracy to Import Methamphetamine, Heroin and Cocaine.
Lopez-Serrano also pleaded guilty to an indictment returned December 4, 2016, in the Eastern District of Virginia by the U.S. Attorney’s Office for the Eastern District of Virginia and the Criminal Division’s Narcotic and Dangerous Drug Section charging him with Conspiracy to Distribute Cocaine Intended for Importation.
In a proceeding today before United States District Judge Dana M. Sabraw, Lopez-Serrano accepted responsibility for his role as a leader within the Sinaloa Cartel, acknowledging that he organized the transportation and distribution of thousands of kilograms of controlled substances, including methamphetamine, cocaine and heroin, for importation from Mexico into the United States. Lopez-Serrano also admitted to possessing firearms for the purpose of promoting the Sinaloa Cartel’s narcotics trafficking activities. A sentencing hearing is scheduled for July 12, 2018 at 10 a.m. before Judge Sabraw.
“Damaso Lopez-Serrano’s conviction strikes a serious blow to the leadership of the Sinaloa Cartel and its violent drug trafficking activities,” said Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division. “The Administration, the Department and our law enforcement partners are steadfast in our commitment to pursuing and dismantling the international drug rings that poison our communities.”
“Cartel leaders have two options – self-surrender or we will work with our counterparts to find you, arrest you and extradite you to San Diego,” said U.S. Attorney Adam L. Braverman. “For Lopez-Serrano’s distribution of literally tons of methamphetamine, cocaine and heroin across the border to America, he will now face justice in a San Diego federal court.”
“The guilty plea of this defendant tells the drug traffickers what they need to know,” said DEA San Diego Assistant Special Agent in Charge Steve S. Woodland. “DEA will keep picking off these violent criminals one by one until there are no more willing to get involved for fear that law enforcement will be coming for them soon. In the face of the current drug crisis we face in this country, DEA will continue to investigate and bring to justice these violent criminals.”
The Southern District of California indictment in this case marked the conclusion of the fourth phase of a five-year investigation that, in total, has resulted in charges against over 125 people and has had a significant impact on the worldwide operations of the Sinaloa Cartel. This investigation has also offered one of the most comprehensive views to date of the inner workings of one of the world’s most prolific, violent and powerful drug cartels. Cartel members and associates were targeted in this massive investigation involving multiple countries, numerous law enforcement agencies around the United States, a number of federal districts and over 250 court-authorized wiretaps in this district alone.
This case began in late 2011 as an investigation of what was at first believed to be a small-scale drug distribution cell in National City and Chula Vista. It became evident that the drugs were being supplied by the Sinaloa Cartel, and the case evolved into a massive multi-national, multi-state probe that resulted in scores of arrests and seizures of 1,397 kilograms of methamphetamine, 2,214 kilograms of cocaine, 17.2 tons of marijuana, 95.84 kilograms of heroin, and $27,892,706 in narcotics proceeds.
The primary indictment in this investigation was previously unsealed targeting the alleged leader of the cartel, Ismael Zambada-Garcia, known as “El Mayo,” as well as two of his four sons - Ismael Zambada-Sicairos, known as “Mayito Flaco,” and Ismael Zambada-Imperial, known as “Mayito Gordo.” Zambada-Imperial was arrested by Mexican authorities in November 2014 and is pending extradition to the Southern District of California. Also part of that indictment is Ivan Archivaldo Guzman-Salazar, known as “Chapito,” whose father Joaquín “El Chapo” Guzmán Loera was the alleged leader of the Sinaloa Cartel along with Mayo.
As part of this investigation, U.S. authorities previously arrested and prosecuted another son of Mayo - Serafin Zambada-Ortiz, who pleaded guilty in the Southern District of California in September 2014 to drug trafficking charges.
José Rodrigo Aréchiga-Gamboa, commonly referred to by his alias "El Chino Ántrax,” was arrested in the Netherlands, extradited to the United States by Dutch authorities in July 2014 and pleaded guilty to drug trafficking charges in May 2015. Arechiga-Gamboa is believed to have worked for the Sinaloa Cartel as the leader of a violent enforcement arm of the Sinaloa Cartel called “Los Antrax” and a key lieutenant of Mayo.
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. Attorney Matthew J. Sutton from the Southern District of California and Trial Attorneys Amanda Liskamm and Michael Lang of the Criminal Division’s Narcotic and Dangerous Drug Section.
DEFENDANT Case Numbers: 16CR1896-DMS and 17CR3687-DMS
Damaso Lopez-Serrano, aka Mini Lic Age: 29 Culiacan, Mexico
SUMMARY OF CHARGES
Conspiracy to Distribute Controlled Substances for Purpose of Unlawful Importation, in violation of Title 21 U.S.C. §§ 959, 960 and 963; Term of custody including a mandatory minimum 10 years and up to life imprisonment, $10,000,000 fine and 5 years supervised release.
Conspiracy to Import Controlled Substances, in violation of Title 21 U.S.C. §§ 952, 960 and 963. Term of custody including a mandatory minimum 10 years and up to life imprisonment, $10,000,000 fine and 5 years supervised release.
AGENCIES
Drug Enforcement Administration
Homeland Security Investigations
Customs and Border Protection, Office of Field Operations
Customs and Border Protection, Office of Border Patrol
United States Marshals Service
Internal Revenue Service
Federal Bureau of Investigation
U.S. Attorney’s Office, Eastern District of Virginia
Department of Justice, Organized Crime Drug Enforcement Task Forces
Department of Justice, Office of Enforcement Operations
Department of Justice, Office of International Affairs
Final Defendants in Gang-Affiliated Drug Trafficking Conspiracy Sentenced to Decades in Prison; Sentencings Bring an End to the Successful Conviction of all 25 Charged DefendantsRead the Press Release
Assistant U. S. Attorneys Andrew Haden (619) 546-6961 and Seth Askins (619) 546-6692
NEWS RELEASE SUMMARY – January 5, 2018
SAN DIEGO – Deandre Cook today became the last of 25 gang members and associates to be sentenced as part of a prolific gun and drug trafficking operation that sold large quantities of methamphetamine and heroin in southeast San Diego neighborhoods. Cook was sentenced by U.S. District Judge John Houston to 84 months in prison.
Today’s sentencing brings the case to a close with the successful convictions of all 25 defendants. Last month, Judge Houston sentenced the lead defendant in the conspiracy, Fili Usini, to 14 years in prison.
The two original 2016 indictments were the product of a year-long investigation. Over 1,500 grams of methamphetamine, 248 grams of heroin and six firearms were also seized as part of the investigation. The two indictments charged four different conspiracies with overlapping players, including individuals with ties to criminal street gangs such as Skyline, the Samoan Bloods, Kalaban, the Stateside Islanders, the Paradise Hills Locos, Logan Heights, Old Town National City, National City Southside Mob, Trust No Soul and Lincoln Park. Most of the defendants were selling methamphetamine on the streets of southeast San Diego. Other defendants were involved in the importation of methamphetamine and heroin from Mexico.
All 25 defendants charged in the case pleaded guilty and were convicted of drug trafficking. Three defendants were also charged with and pleaded guilty to being felons in possession of firearms. Judge Houston imposed prison terms on all 25 defendants, ranging from a low of 14 months to the high of 168 months for Usini. All but six defendants received prison terms in excess of five years.
The case was the product of a coalition of local, state, and federal agents, led by Homeland Security Investigations (HSI) Gang Investigations Group and the San Diego Police Department.
“Methamphetamine is wrecking lives and communities, and this successful prosecution brings an immediate halt to the dangerous environment created by these 25 gang members and associates,” said U.S. Attorney Adam L. Braverman. “This case is a huge success story in our efforts to restore peace and safety to San Diego neighborhoods. We are going to continue our attack on those gang members who are committing violence on the streets of San Diego.”
"HSI Special Agents will continue to work with other law enforcement partners and prosecutors to eliminate the dangers that gang members bring up on our communities and put a stop to their criminal enterprises," said David Shaw, Special Agent in Charge of HSI in San Diego. “We will continue to work diligently to investigate, and ultimately dismantle these transnational street gangs and bring them to justice.”
“This operation and collaborative effort is yet another example of how well San Diego County law enforcement agencies partner together to fight crime to keep our neighborhoods safe", said San Diego Police Chief Shelley Zimmerman. "We will not tolerate criminal activity and we will continue to work together with all of our communities to make San Diego the safest City in the nation.”
United States v. Ortiz, et al, 16-CR-874-JAH
Defendants
FRANCISCO JAVIER ORTIZ-LUNA (1) –75 months prison
JAVIER HERNANDEZ (2) – 37 months prison
YARELI MAGNOLIA NORIEGA (3) – 78 months prison
JASMINE EUNIQUE RIPP (4) – 46 months prison
JULIO ALBERTO ONTIVEROS (5) – 46 months prison
Summary of Charges
Title 21, U.S.C., Secs. 952, 960, 963 Conspiracy to Import Controlled Substances - Life
Title 21, U.S.C., Secs. 841(a)(1) and 846 B Conspiracy to Distribute Methamphetamine - Life
Title 21, U.S.C., Secs. 952 and 960 Importation of Methamphetamine – 20 years
Title 21, U.S.C., Sec. 841(a)(1)- Possession of Methamphetamine with Intent to Distribute – 40 years
Title 21, U.S.C., Secs. 952 and 960 B Importation of Heroin – 40 years
Title 21, U.S.C., Sec. 841(a)(1)- Possession of Heroin with Intent to Distribute – 20 years
United States v. Usini, et al., 16-CR-875-JAH
Defendants
FILI USINI (1) – 168 months prison
VIRGILIO SORIANO VILLEGAS (2) – 87 months prison
CARL DELANDO BRANDON (3) – 75 months prison
DEANDRE COOK (4) – 84 months prison
FRANC LESTER BULARAN (5) – 110 months prison
ANTHONY VELARDE (6) – 120 months prison
KRISTOFFER UMALI MACALMA (7) – 110 months prison
BICENTENNIAL POUTOA (8) – 110 months prison
VICTOR CERVANTES (9) – 120 months prison
JORGE ARMANDO SALAS (10) – 90 months prison
MAURICE SCOTT (11) – 70 months prison
JAMES GILLESPIE (12) – 63 months prison
KEITH IAULUALO (13) – 54 months prison
LONNIE DARNELL ANDERSON (14) – 60 months prison
TERRENCE ANDERSON (15) – 70 months prison
PATRICK JEFFREY DIBBLE (16) – 85 months prison
KEMONDRE HAMILTON (17) – 40 months prison
RICHARD BELCHER (18) – 60 months prison
LAVONN WILLIAM HALL (19) – 75 months prison
ANITA VILLALBA (20) – 14 months prison
Summary of Charges
Title 21, U.S.C., Secs. 841(a)(1) and 846 B Conspiracy to Distribute Methamphetamine – Life
Title 21, U.S.C., Sec. 841(a)(1)- Possession of Methamphetamine with Intent to Distribute – Life
Title 18, U.S.C., Sec 922(g)(1) – Felon in Possession of a Firearm – 10 years
Title 21, U.S.C., 853, Title 18, U.S.C., 924(d), and Title 28, U.S.C., 2461(c) – Criminal Forfeiture
AGENCIES
Homeland Security Investigations
San Diego Police Department
Drug Enforcement Administration
Bureau of Alcohol Tobacco Firearms and Explosives
San Diego Sheriff’s Department
San Diego County Probation Department
El Cajon Police Department
San Diego County District Attorney’s Office
U.S. Bureau of Prisons
Attorney General Jeff Sessions Selects Southern District of California to Receive New United States Attorney Position to Combat Violent CrimeRead the Press Release
SAN DIEGO - Attorney General Jeff Sessions has selected the Southern District of California to receive additional resources for the fight against violent crime. The district will receive an additional Assistant U.S. Attorney to focus exclusively on violent crime, one of 40 new federal prosecutors in 27 selected locations throughout the United States.
“Led by our 94 United States Attorney’s Offices, Project Safe Neighborhoods (PSN) task forces are hitting the streets across America to apprehend and bring violent criminals to justice. I have asked Congress for additional PSN funding next year because I believe nothing will be more effective at reducing violent crime,” said Attorney General Sessions. “Under this program, I am asking a great deal of our United States Attorneys. I am both empowering them and holding them accountable for results. To put them in the best position to impact and reduce violent crime, it is my privilege to announce that through a re-allocation of resources, we will be enlisting and deploying 40 additional violent crime prosecutors across the United States.”
“In this district, we are inundated with border-related crimes. Adding a prosecutor to our roster who will focus solely on violent crime will allow us to pursue more of the cases that harm our residents and damage our neighborhoods the most, and that will translate to safer communities,” said U.S. Attorney Adam Braverman. “We are grateful for the additional resources.”
More information on the locations of those 40 Assistant United States Attorneys and violent crime task forces is below:
AUSA Breakdown by District
Northern District of Alabama - 1
Eastern District of Arkansas - 1
Northern District of California - 2
Southern District of California - 1
District of Connecticut - 1
District of Columbia - 1
Central District of Illinois - 1
Northern District of Illinois - 3
Southern District of Indiana - 1
Eastern District of Louisiana - 1
District of Maryland - 3
Western District of Michigan - 1
Eastern District of Missouri - 2
Western District of Missouri - 1
District of Nevada - 2
District of New Mexico - 1
Eastern District of New York - 2
Western District of New York - 1
Northern District of Ohio - 2
Eastern District of Pennsylvania - 1
Middle District of Tennessee - 2
Western District of Tennessee - 2
Eastern District of Texas - 1
Northern District of Texas - 1
Southern District of Texas - 2
Western District of Texas - 1
Eastern District of Wisconsin - 2# # #
Defense Contractors Sentenced to Prison for Defrauding the United StatesRead the Press Release
Assistant U.S. Attorney Rebecca S. Kanter (619-546-7304)
NEWS RELEASE SUMMARY – December 14, 2017
SAN DIEGO – Jeffrey Harrington and Michael Mayer, owners of several defense contracting firms, were each sentenced in federal court today to 15 months in custody for conspiring to commit wire fraud and file false claims, and to making false statements on their federal income tax returns.
Harrington was also ordered to pay a $10,000 fine, $141,113 in restitution to the Internal Revenue Service, and to forfeit $708,679 in ill-gotten gains; likewise Mayer was ordered to pay a $10,000 fine plus $299,511 in restitution to the IRS and forfeit $708,678.
The defendants admitted fraudulently obtaining money from the United States by making false representations and false claims to the Department of Defense (“DoD”) for payment on items defendants knew had not been sold to the Navy, but which had been substituted with other, unauthorized products. Three of the companies owned by Harrington and Mayer – including San Diego-based Veteran Logistics, Inc. (“VLI”), Industrial Xchange, Inc. (“IXI”), and Boston Laser Technology, Inc. (“BLTI”) – were also ordered to forfeit over $1.4 million and pay a $1 million fine for their roles in the offenses.
According to court records, the defendants regularly sold supplies to the DoD, the Department of Navy, the General Services Administration and other federal departments and agencies. Each company had multiple contracts with DoD’s Defense Logistics Agency (“DLA”) to sell products to the federal government through “EMALL,” currently known as “FedMall,” which is a web-based electronic commerce site that allows authorized users to search, compare and purchase commonly used products. Each contract allowed the company to sell pre-approved goods at set, maximum prices. As detailed in court filings, however, the defendants fraudulently manipulated the EMALL system to substitute unapproved items for the goods purportedly sold to the government.
In one example, the defendants agreed on EMALL to supply Maritime Expeditionary Security Group Two at Norfolk Naval Shipyard with over 10,000 “Post-It” writing paper pads. After colluding with Navy personnel, the defendants replaced these approved items with 50 electronic transceivers they were not authorized to sell. By fraudulently substituting these products, the defendants were able to circumvent procurement controls and charge the military a 134% mark-up on the transceivers. The defendants repeatedly employed this fraudulent technique dozens of times, on a host of products, across a wide array of components in the military.
The scheme also allowed the defendants to conceal the sale of consumer electronics and other items that could be readily misused by corrupt military officials. For example, in one contract VLI agreed to supply the USS Ronald Reagan aircraft carrier with industrial, motorized plumber snakes. VLI then fraudulently substituted that order with 100 29” Toshiba TVs, 60 32” Toshiba TVs and 160 TV tilt mounts. VLI purchased these items for only $39,558, then turned around and billed the government $66,807. In another example discussed in court, VLI fraudulently substituted an order for the USS Germantown with, among other things, two pink Nintendo gaming systems, two iPod Touch devices, and a PlayStation.
The plea agreements also detailed a series of transactions between October 2013 and April 2014, wherein IXI and another VLI-affiliated company, At Your Command (“AYC”), created approximately twenty EMALL carts for Navy Explosive Ordnance Disposal Group #2 in Norfolk, Virginia, containing various items, including bags, canvas organizer bags, and pouches, for which the defendants billed DLA and received $1,303,024. In reality, the defendants actually provided EODG-2 group with parachutes, altimeters and other sky diving gear purchased for approximately $924,252, realizing a profit of $378,772 by substituting improperly procured parachuting equipment.
The defendants were hugely successful in their fraud, and received approximately $45 million for EMALL sales related to over 12,000 transactions between approximately March 1, 2008 and January 31, 2015. On a small sample of 60 of those transactions between August 2009 and October 2013, totaling approximately $2,868,590 in sales, the loss to the Navy was approximately $1,417,395, indicating a fraud loss of approximately 50%.
Harrington and Mayer also pleaded guilty to false statements on their tax returns for the tax years 2010 and 2014. Harrington and Mayer both used VLI to pay personal expenses in excess of $200,000 and $100,000, respectively, thereby underreporting their 2010 income on their personal tax returns. Both defendants, in contravention of the advice of their tax professionals, continued using VLI to pay for personal expenses and not declaring these benefits as income, causing their 2014 income tax returns to under-report their income by approximately $436,017 and $674,704, respectively. By under-reporting their income, Harrington underpaid taxes by $141,113, and Mayer underpaid taxes by $299,511, for 2010 and 2014.
In addition to these criminal sentences, all defendants will be suspended from government contracting.
United States Attorney Braverman observed: “Not only did the defendants inflict financial harm on the taxpayers by charging arbitrary mark-ups on these items, but they potentially compromised combat readiness by providing unauthorized, non-conforming parts. What’s more, their scheme posed a significant danger of corrupting Navy personnel and others by essentially creating a ‘slush fund’ to purchase non-military items, such as televisions, computers, gaming systems, cameras, iPhones and other electronics. This Office will continue to use all the tools available, including the District’s Procurement Fraud Working Group, to prevent and deter those who pose the threat of fraud and corruption to our procurement process.”
Chris Hendrickson, Special Agent in Charge of the Western Field Office, Defense Criminal Investigative Service, said, “The defendants in this case exploited their connections with the U.S. Navy and others to grossly inflate their profitability and otherwise cheat the taxpayers and their commercial competition over a period of many years. This type of fraud will be aggressively investigated by DCIS and our partners at every opportunity to preserve the integrity of the contracting process.”
“The success of this case is a direct result of the joint efforts of the Naval Criminal Investigative Service, our Federal Law Enforcement Partners and the U.S. Attorney's Office,” said Edward Denion, Assistant Special Agent in Charge of the NCIS Southwest Field Office. “Protecting our warfighters is one of the top priorities of NCIS, and this investigation is an example of how we do this. Anyone considering defrauding the Navy and taxpayers should know NCIS will aggressively pursue all such allegations and work with our partners to ensure the conviction of all those involved.”
FBI Special Agent in Charge Eric S. Birnbaum stated, “Today’s convictions are a result of federal partners teaming together to stop the loss of millions of government dollars as well as the greed and deceit employed in this case.” SAC Birnbaum continued, “The FBI will continue to work to root out fraud against our government and uncover the schemes to steal federal taxpayer dollars.” The FBI encourages the public to report allegations of public corruption to the FBI public corruption hotline at telephone number (877) NO-BRIBE (662-7423).
“The sentences handed down today should serve as a warning to the public that those who seek to defraud the United States government by lining their pockets through fraudulent procurement schemes will face severe consequences,” said IRS Criminal Investigation’s Special Agent in Charge R. Damon Rowe. “The agents who worked this case should be commended for their thorough investigation and for expertly following the paper trail that led to the unraveling of this complex fraud scheme.”
U.S. District Judge Michael M. Anello had previously sentenced two other co-defendants, Kimberlee and Natalee Hewitt, on October 16, 2017, to 3 years’ probation and $100,000 each in forfeiture, as well as $3,500 each in criminal fines.
CORPORATE DEFENDANTS
Veteran Logistics, Inc.
Industrial Xchange, Inc.
Boston Laser Technology, Inc.
INDIVIDUAL DEFENDANTS
Jeffrey Harrington Age: 55 San Diego, CA
Michael Mayer Age: 63 San Diego, CA
Kimberlee Hewitt Age: 45 Ridgewood, New York
Natalee Hewitt Age: 49 Virginia Beach, Virginia
Criminal Case No.
17CR0488-MMA
SUMMARY OF CHARGES
Count 1 (All):
Conspiracy to commit wire fraud and file false claims (18 U.S.C. § 371).
Maximum penalties: 5 years’ imprisonment; 3 years’ supervised release; a fine of $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greatest; and a mandatory special assessment of $10.
Count 2 (Harrington):
False Statement on Tax Return (26 U.S.C. § 7206(1)).
Maximum penalties: 3 years’ imprisonment; 1 year supervised release; a fine of $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greatest; and a mandatory special assessment of $100.
Count 3 (Mayer):
False Statement on Tax Return (26 U.S.C. § 7206(1)).
Maximum penalties: 3 years’ imprisonment; 1 year supervised release; a fine of $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greatest; and a mandatory special assessment of $100.
AGENCIES
Defense Criminal Investigative Service
Defense Logistics Agency, Office of Inspector General
Federal Bureau of Investigation
General Services Administration, Office of Inspector General
Internal Revenue Service, Criminal Investigation
Naval Audit Service
Naval Criminal Investigative Service
Disney Cruise Ship Employee Pleads Guilty to Wire Fraud, Admitting He Embezzled More than $275,000Read the Press Release
Assistant U.S. Attorney Joseph J.M. Orabona (619)546-7951
NEWS RELEASE SUMMARY – December 21, 2017
SAN DIEGO – Renan Dias Da Rocha Gomes, a former employee aboard the Disney Wonder cruise ship, entered a guilty plea today to one count of wire fraud in connection with his scheme to embezzle more than $275,000 from The Walt Disney Company.
Gomes, who was arrested by federal agents on October 27, 2017, when the Disney Wonder made port in San Diego, admitted that from at least October 2015 through October 27, 2017, he was employed as a merchandise host and assigned to work in the merchandise stores aboard the Disney Wonder. At the hearing today, Gomes admitted he executed his scheme by fraudulently obtaining money through his access to the VeriFone payment system in order to embezzle funds from Disney for his own personal use and benefit.
According to the plea agreement, Gomes admitted he made approximately $275,000 in unauthorized charges to Disney’s bank account, and loaded the value of the funds onto Disney gift cards while working aboard the Disney Wonder on the high seas. Gomes also admitted that from April 23, 2017 through May 7, 2017, he spent approximately $37,700 of the embezzled funds for his own personal benefit by taking his family on a Disney World vacation. While on this vacation, Gomes stated the he used the gift cards with the embezzled funds to pay approximately $8,200 on lodging, approximately $29,500 on food, beverage, merchandise and entertainment expenses. As part of his plea agreement, Gomes will be required to repay The Walt Disney Company the total amount of funds he stole which the company was unable to recover.
“When someone misappropriates company assets, the loss not only affects the company but also the consumer. Today’s guilty plea sends a strong message that those who commit such corporate fraud, even while operating on the high seas, will be held accountable in this district,” said United States Attorney Adam L. Braverman.
“This case illustrates the dangers that businesses face from trusted insiders who seek to defraud them. While external fraud threats are usually the focus, the greatest fraud threats to businesses are typically from within,” stated Special Agent in Charge Eric S. Birnbaum. “The FBI remains committed to working with our law enforcement partners to detect corporate crime in all its forms and bring those responsible to justice.”
“Today’s guilty plea is an example of the significant results that can be achieved when law enforcement agencies form a great partnership and work diligently to bring a case to prosecution,” said David Shaw, Special Agent in Charge for Homeland Security Investigations (HSI) in San Diego. “HSI will continue to investigate these individuals who attempt to enrich themselves by fraudulent means.”
Gomes’ next court appearance is on March 9, 2018 at 9 a.m. before U.S. District Judge Cathy A. Bencivengo. Gomes, who is a Brazilian national, remains in federal custody.
DEFENDANT Criminal Case No. 17CR3897-CAB
Renan Dias Da Rocha Gomes Age: 32 Citizenship: Brazil
SUMMARY OF CHARGES:
Count 1 – Wire Fraud (18 U.S.C. § 1343)
Maximum Penalties: mandatory minimum of 20 years in prison; maximum fine of $250,000; maximum term of supervised release of 3 years; restitution
INVESTIGATING AGENCIES
Federal Bureau of Investigation
Homeland Security Investigations, Immigration and Customs Enforcement
U.S. Customs and Border Protection
Alleged Sinaloa Cartel Associate ExtraditedRead the Press Release
Assistant U. S. Attorney Daniel Zipp (619) 546-8463
NEWS RELEASE SUMMARY – December 19, 2017
SAN DIEGO – Victor Manuel Felix-Felix, the alleged leader of a Mexican money laundering and cocaine trafficking organization, was extradited to the United States by Mexico yesterday and made his first appearance in federal court this afternoon. Felix-Felix was a close associate of Joaquin “Chapo” Guzman-Loera and Felix Felix’s daughter is reportedly married to Guzman-Loera’s son.
According to extradition documents, in 2009, Drug Enforcement Administration (DEA) agents began investigating a money laundering organization based in Southern California. One agent, acting in an undercover capacity, flew to Panama City, Panama and posed as the leader of a transportation cell capable of moving narcotics and bulk currency using private aircraft. After several additional undercover meetings, the agent gained the trust of the organization and agreed to begin picking up bulk currency for transfer to Mexico. Over the course of 2010 and 2011, the agent arranged for the transfer of millions of dollars in currency, coordinating with local law enforcement to arrange pick-ups in Los Angeles, California; New York, New York; Houston, Texas; Chicago, Illinois; Vancouver, Canada and Montreal, Canada.
After the successful currency pick-ups, the undercover agent began traveling to Central America to meet with higher-level members of Felix-Felix’s organization. In September 2010, at a meeting in the Dominican Republic, the undercover agent offered that he could transport cocaine from Ecuador to Mexico City, extradition documents said. Felix-Felix agreed, and provided the agent with an encrypted phone and a cash down-payment of $3.5 million for his services. A team of DEA agents then traveled to Ecuador and worked with local law enforcement to set up a roadside checkpoint and seize a truck containing 2,500 kilograms of cocaine intended for Felix-Felix.
After the seizure in Ecuador, the undercover agent offered Felix-Felix that he could transport another load of cocaine from Ecuador to Mexico City. After receiving another upfront payment of $1 million in cash, DEA agents coordinated with Ecuadorian and Mexican law enforcement to arrange for an international “controlled delivery” of cocaine using a private jet. Agents picked up cocaine in Ecuador, transported it to Mexico City, and then seized it after it was delivered to members of Felix-Felix’s organization, the extradition documents said. Felix-Felix and 18 others were then arrested.
On May 13, 2011, a federal grand jury in San Diego returned an indictment, charging Felix-Felix with Engaging in a Continuing Criminal Enterprise, Conspiracy to Distribute Cocaine and Conspiracy to Commit Money Laundering. Felix-Felix was flown by the United States Marshals Service from Mexico City to San Diego on December 18, 2017. He is scheduled to be arraigned on Tuesday, December 19, 2017, before U.S. Magistrate Judge Andrew Schopler.
United States Attorney Adam Braverman stated, “Today is a reminder that international drug kingpins who profit by shipping narcotics into our community are not safe from prosecution. We will work with our international partners to bring them to justice wherever they reside.”
U.S. Attorney Braverman also praised the outstanding work of the DEA, National City Police Department, San Diego Police Department, San Diego Sheriff’s Office, Mexican Federal Police, Colombian National Police, Panamanian National Police, and the U.S. Department of Justice’s Office of Enforcement Operations and the Office of International Affairs, and the Department of Treasury’s Office of Foreign Assets Control for their ongoing assistance in this investigation.
“DEA will continue to hunt down these violent drug traffickers,” said DEA San Diego Special Agent in Charge William R. Sherman. “Let this be a warning to those who think they can step into the shoes of those who have been arrested-we will come for you too.”
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.
In 2012, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Felix-Felix under the Foreign Narcotics Kingpin Designation Act. The Kingpin Act prohibits U.S. persons from conducting financial or commercial transactions with these individuals and freezes any assets they may have under U.S. jurisdiction.
Felix-Felix’s next court appearance is scheduled for January 16, 2018 before U.S. District Judge Marilyn Huff.
DEFENDANT 11-CR-1926-H
Victor Manuel Felix-Felix
SUMMARY OF CHARGES
- Operating a Continuing Criminal Enterprise (18 U.S.C. 848)
- Conspiracy to Launder Monetary Instruments (18 U.S.C. 1956(h))
- Transportation of Monetary Instruments from the United States to a Place Outside the United States (21 U.S.C. 1956(a))
- Conspiracy to Distribute Cocaine Outside the United States ( 21 U.S.C. 959, 960)
- Distribution of Cocaine Outside the United States (21 U.S.C. 959, 960)
- Conspiracy to import cocaine (21 U.S.C. 952 and 960)
AGENCIES
Drug Enforcement Administration
Department of Justice, Organized Crime Drug Enforcement Task Forces
Department of Justice, Office of International Affairs
National City Police Department
San Diego Narcotics Task Force
San Diego District Attorney, Bureau of Investigations
Mexican Federal Police
Mexico’s Procuraduria General de la Republic (PGR)
Panamanian National Police
Ecuadorian National Police
Colombian National Police
Vancouver Police Department
Quebec Provisional Police
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.