Southern District of California
Press releases recorded for this federal judicial district.
Leader of Violent International Drug Trafficking and Gambling Enterprise Sentenced to More than 21 YearsRead the Press Release
Assistant U. S. Attorneys Andrew Young (619) 546-7981, Benjamin Katz (619) 546-9714 or Mark W. Pletcher (619) 546-9604
NEWS RELEASE SUMMARY – December 15, 2017
SAN DIEGO – Owen Hanson, the leader of the violent “ODOG” racketeering enterprise, was sentenced to 255 months in prison and a lifetime of supervised release for leading an international drug trafficking, gambling and money laundering enterprise that operated in the United States, Central and South America and Australia from 2012 to 2016.
According to court records, ODOG trafficked thousands of kilograms of cocaine, heroin, methamphetamine, MDMA (also known as “ecstasy”), marijuana, anabolic steroids and Human Growth Hormone (“HGH”). As Hanson admitted, ODOG’s drug operation routinely distributed controlled substances at wholesale and retail levels, including selling performing enhancing drugs to numerous professional athletes. The organization also operated a vast illegal gambling operation focused on high-stakes wagers placed on sporting events. The Enterprise used threats and violence against its gambling and drug customers to force compliance. One particular victim who owed ODOG more than $2 million described in graphic detail at today’s hearing how Hanson sought to collect the debt by sending DVD’s to the victim and the victim’s wife showing beheadings, as well as a photo of victim’s desecrated family’s gravestone.
United States District Judge William Q. Hayes explained that a severe sentence was warranted because of the “staggering” and “astounding” size and scope of ODOG’s criminal activities. Noting that Hanson moved hundreds of kilograms of drugs, all over the globe, month after month made him truly an “international drug trafficker.” Judge Hayes commented to Hanson: “It is difficult to understand how you got here, other than greed.”
According to the government’s sentencing papers, Hanson’s criminal activity started while he was a football player at the University of Southern California, where he “birth[ed] his drug trafficking empire by selling recreational drugs and steroids to his teammates” of a national championship football team, and used his business degree to “to build a criminal enterprise that exploited people at their lowest moments.”
“Transnational racketeering organizations like ‘ODOG’ represent a clear and present danger to the safety and security of our communities, our country, and our international partners,” observed United States Attorney Adam Braverman. “From shipping enormous quantities of dangerous drugs around the globe, to operating illegal bookmaking enterprises, to laundering millions of dollars in criminal proceeds, the breadth and scope of Hanson’s illicit activity was truly staggering, and is directly reflected by the more than two-decades long sentence imposed today.”
“Dismantling major international and national organized criminal enterprises is a longstanding area of Bureau expertise,” said FBI Special Agent in Charge Eric S. Birnbaum. “The goal of the FBI is to bring down entire organizations, especially those with a wide reach. Today's sentence, along with the 21 other convicted co-conspirators, emphasizes that the 'ODOG criminal organization' will no longer traffic drugs on our streets; will no longer run its illegal gambling ring; and will no longer bring violence upon those who are obstacles to their greed and desire to grow an illegal and dangerous enterprise.”
“The long prison sentence handed down today is appropriate and well deserved. Mr. Hanson was held accountable for his brazen actions as a leader and an organizer of a criminal enterprise,” stated Special Agent in Charge R. Damon Rowe of IRS Criminal Investigation. “The government will now use asset forfeiture as the final lever to seize a significant portion of the illegal proceeds generated by this drug distribution and gambling operation. IRS Criminal Investigation is proud to provide its financial expertise as we work alongside our law enforcement partners to bring criminals to justice.”
Hanson’s criminal career was ascendant when the FBI took down his operation. According to sentencing papers, “Hanson showed no signs of stopping this criminal activity. He bragged to undercover agents about the success of his operation and his aspirations to be even bigger. In the days leading up to his arrest, Hanson communicated with an undercover FBI agent to coordinate a methamphetamine deal. The night before Hanson was arrested, the undercover agent sent Hanson a message letting him know the deal was done and that the methamphetamine was ‘fine stuff.’ Hanson replied, ‘Told u – we don’t **** around.’ In response, the undercover agent thanked Hanson and told him to get a good night’s sleep. Hanson replied, ‘Money doesn’t sleep.’” Ultimately, the government argued that Hanson’s downfall brought down others, noting that associating with Hanson “turned gamblers into bookies, drug addicts into dealers, and friends into felons.”
In addition to serving more than 21 years in prison, Hanson was also sentenced to pay a criminal forfeiture in the amount of $5 million, including $100,000 in gold and silver coins, a Porsche Panamera, two Range Rovers, luxury watches, homes in Costa Rica, Peru and Cabo San Lucas, a sailboat, and interests in several businesses.
So far, 21 of the 22 defendants charged in connection with this case have pleaded guilty, including:
- Luke Fairfield, a San Diego based Certified Public Accountant who assisted Hanson with laundering the proceeds of his various illegal endeavors by setting up shell corporations and advising members of the Enterprise on how to structure bank transactions to avoid detection by bank security and law enforcement;
- Derek Loville, a former professional football player, who pleaded guilty to distributing retail quantities of drugs for the ODOG Enterprise in Arizona;
- Daniel Portley-Hanks, a Los Angeles based private investigator who assisted Hanson with tracking down delinquent gamblers and other individuals who owed the enterprise money; and
- Jack Rissell, an “enforcer” who, in one instance, travelled from Southern California to Minneapolis to attack a delinquent gambler
One remaining defendant, Khalid Petras, awaits trial.
The case arose out of a joint investigation by FBI and the New South Wales (Australia) Police Force in conjunction with the New South Wales Crime Commission. Hanson was initially indicted and arrested on September 9, 2015 after arranging the delivery of five kilograms of cocaine and five kilograms of methamphetamine. Assistant U. S. Attorneys Andrew P. Young, Benjamin Katz and Mark W. Pletcher are prosecuting the case.
DEFENDANT Case Number: 15CR2310-WQH
Owen Hanson Age: 34
Luke Fairfield Age: 40
Kenny Hilinski Age: 39
Giovanni Brandolino Age: 42
Daniel Portley-Hanks Age: 70
Jack Rissell Age: 50
Derek Loville Age: 48
Chalie D’Agostino Age: 52
Marlyn Villareal Age: 32
Dylan Anderson Age: 34
Tim Bryan Age: 48
Jim Muse Age: 53
Jeff Bellandi aka “Jazzy” Age: 50
Curtis Chen Age: 33
James Duley Age: 41
Dee Foxx Age: 35
Khalid Petras Age: 55
Rahul Bhagat Age: 31
David Kipper Age: 35
Todd Oldham Age: 32
Daniel Ortega Age: 42
SUMMARY OF CHARGES
Count 1
Racketeering Conspiracy to Conduct RICO Enterprise Affairs, 18 U.S.C. § 1962(d)
Maximum penalty: Life in prison, fine of $250,000 or twice the gross gain or loss caused by the offense, forfeiture of any property obtained or operated by RICO enterprise, 5 years’ supervised release.
Count 4
Conspiracy to Distribute Narcotics, 21 U.S.C. § 841(a)(1) and 846
Maximum penalty: Life in prison, fine of $10,000,000 or twice the gross gain or loss caused by the offense, forfeiture of any proceeds, 10 years’ supervised release.
AGENCIES
Federal Bureau of Investigation – San Diego Field Office
Internal Revenue Service – San Diego
Australian Crime Commission
New South Wales Police Force
New South Wales Crime Commission
*As to defendant Khalid Petras, the charges and allegations contained in an indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Former Substitute Teacher and Private Tutor Sentenced to more than 16 years in Prison for Child Pornography OffensesRead the Press Release
Assistant U. S. Attorneys Alessandra P. Serano (619) 546-8104 or Connie V. Wu (619) 546-8592
NEWS RELEASE SUMMARY – December 15, 2017
SAN DIEGO –Marlin Lee Gougher was sentenced today to 200 months in prison and 20 years of supervised release for distributing, receiving and possessing child pornography. Gougher, a former substitute teacher in the Temecula School District and private tutor, was convicted after a jury trial in September 2017.
At trial, Gougher was found to have possessed two laptop computers with over 300 videos of child pornography, some of which depicted children as young as four years of age. The FBI executed the search warrant on his Oceanside apartment in January 2013 where they located names of children Gougher had privately tutored over several years. To date, no one has come forward claiming any sexual misconduct by Gougher.
In imposing the 200 month sentence, United States District Court Judge William Q. Hayes commented that the images were “the worst I’ve ever seen.” Judge Hayes noted that the “horrific and heart-breaking nature” of the child pornography videos. Some videos depicted children under the age of five being raped by adult males. Judge Hayes said that the victims of child pornography suffer “psychological damage that can’t be undone. They don’t get a determinate sentence.”
U.S. Attorney Adam L. Braverman said, “All child exploitation cases are heinous, but the actions of this defendant, whose profession afforded him special access to young students, are particularly appalling. We will use the full resources of the Department of Justice to seek the longest sentences possible for those who victimize children.”
“Each video and each image that Mr. Gougher possessed represented the victimization of a child. This case is particularly disturbing given the defendant’s former position as a teacher and tutor.” said FBI Special Agent in Charge Eric S. Birnbaum. “We hope the resulting sentence from this investigation sends a clear message to anyone involved in the online sexual exploitation of a child: the FBI is steadfast and committed to identifying child predators and protecting the innocence of our children.”
DEFENDANT Case Number 14cr0635-WQH
Marlin Lee Gougher Age: 59 Oceanside, CA
SUMMARY OF CHARGES
Distribution and Receipt of Images of Minors Engaged in Sexually Explicit Conduct – Title 18, U.S.C., Section 2252(a)(2)
Maximum penalty: 20 years’ imprisonment with a mandatory minimum sentence of 5 years. Lifetime of supervised release
Possession of Images of Minors Engaged in Sexually Explicit Conduct – Title 18, U.S.C., Section 2252(a)(4)
Maximum penalty: 20 years’ imprisonment. Lifetime of supervised release
AGENCY
Federal Bureau of Investigation
Beverly Hills Doctor Convicted of Fraud, Corruption in Massive Workers’ Comp SchemeRead the Press Release
NEWS RELEASE SUMMARY – December 13, 2017
SAN DIEGO – Beverly Hills Radiologist Ronald Grusd and two of his corporations, California Imaging Network Medical Group and Willows Consulting Company, were convicted by a federal jury late yesterday of fraud and bribery charges in connection with a massive health care-fraud scheme involving the State of California’s Workers’ Compensation program.
After a seven-day trial, the jury found Dr. Grusd and his companies guilty on all charges facing them, including Conspiracy, Honest Services Mail and Wire Fraud, Health Care Fraud, and Travel Act violations, based on their years-long bribery and fraud scheme.
According to evidence presented at trial, Dr. Grusd and his companies paid kickbacks for patient referrals from multiple clinics in San Diego and Imperial counties in order to fraudulently bill insurance companies over $25 million for medical services. Dr. Grusd negotiated with various individuals, including a primary treating physician, the payment of kickbacks for the referral of workers’ compensation patients for various medical services, including MRIs, ultrasounds, Shockwave treatments, toxicology testing and prescription pain medications.
After the patients were referred for the treatment or service, one of Dr. Grusd’s companies, California Imaging Network Medical Group, would fraudulently bill insurance companies for the procedures, concealing from both the patients and the insurers that substantial kickbacks had been paid in violation of California law. Another of Dr. Grusd’s companies, Willows Consulting Company, funneled the kickback payments to those directing the referral of the patients from the various clinics. Records presented at trial showed that Dr. Grusd paid over one hundred thousand dollars in bribes to secure the billings for hundreds of patients, with bribes paid on a per-patient or per-body-part formula.
Dr. Grusd was ordered to return to federal court on March 12, 2018, for a sentencing hearing for himself as well as both corporations. Since 2009, Dr. Grusd and his various companies have filed tens of thousands of liens in the California Workers Compensation System, seeking reimbursement for hundreds of millions of dollars from multiple insurers. To date, any outstanding liens have been stayed and will be sent to lien consolidation for dismissal proceedings as a result of the convictions. The jury could not reach a unanimous verdict as to Dr. Grusd’s administrator, Gonzalo Paredes, who was ordered back to court on January 4, 2018, for a hearing regarding a retrial.
Dr. Grusd, Paredes, and the corporations were originally indicted by a federal grand jury in November 2015, when the U.S. Attorney’s Office and the San Diego District Attorney’s Office, working in conjunction with the Federal Bureau of Investigation and the California Department of Insurance, announced multiple arrests arising from “Operation Back Lash” – a long-term, proactive health care fraud investigation targeting corruption and fraud in the California Workers’ Compensation system that is continuing.
Since then, nearly 40 individuals and corporations have been charged with federal and/or state crimes, including doctors, attorneys, marketers and providers of medical services and devices. The four other defendants charged with Dr. Grusd and Paredes – who were alleged to have received bribes in exchange for patient referrals – have pleaded guilty and are cooperating with the continuing investigation while awaiting sentencing. The charges on which Dr. Grusd went to trial were brought in July 2017, when a grand jury returned a Superseding Indictment against him and his companies.
Grusd’s practice, California Imaging Network Medical Group, operated clinics throughout California in San Diego, Los Angeles, Beverly Hills, Fresno, Rialto, Santa Ana, Studio City, Bakersfield, Calexico, East Los Angeles, Lancaster, Victorville and Visalia.
“A patient entrusts his life to his physician,” said U.S. Attorney Adam Braverman. “A doctor’s medical decisions should be based on the best interest of the patient, not the highest bidder. The jury has found that Dr. Grusd perverted that sacred relationship by buying and selling patients – oftentimes on a per-body-part basis – for his own personal enrichment.”
U.S. Attorney Braverman commended the tireless efforts of the Federal Bureau of Investigation and the California Department of Insurance to investigate these offenses, and thanked San Diego District Attorney Summer Stephan and her office for collaborating with the United States Attorney’s Office on the Operation Back Lash prosecutions.
“These convictions show that the paying of illegal bribes and treating patients as commodities for the purpose of lining conspirator's pockets will not be tolerated,” said FBI Special Agent in Charge Eric S. Birnbaum. “The FBI will continue to use our investigative expertise to dismantle sophisticated criminal conspiracies at the highest levels. This case exemplifies that the FBI and our law enforcement partners are committed to rooting out corruption in our health care system.”
Anyone with information about healthcare fraud may call the FBI at 1-800-CALL-FBI, or 1-800-225-5324 or the California Department of Insurance’s toll-free fraud hotline, 800-927-4357.
DEFENDANTS Case Number: 15cr2821-BAS
Ronald Grusd Los Angeles, CA
Gonzalo Ernesto Paredes LaVerne, CA
California Imaging Network Medical Group Incorporated in 2007
Willows Consulting Company Incorporated in 2011
SUMMARY OF CHARGES
Conspiracy to Commit Honest Services Mail Fraud, Mail Fraud, Wire Fraud, and Health Care Fraud, in violation 18 U.S.C. 1349
Maximum Penalty: 20 years in custody; $250,000 fine, or twice the pecuniary gain or loss; three years’ supervised release; restitution to victims of the offense; forfeiture
Honest Services Mail and Wire Fraud, in violation of 18 U.S.C. Secs. 1341, 1343 and 1346 (18 Counts)
Maximum Penalty (each count): 20 years in custody; $250,000 fine or twice the pecuniary gain or loss; three years’ supervised release; restitution to victims of the offense; forfeiture
Health Care Fraud, in violation of 18 U.S.C. 1347, (14 Counts)
Maximum Penalty (each count): 20 years in custody; $250,000 fine or twice the pecuniary gain or loss; three years’ supervised release; restitution to victims of the offense; forfeiture
Travel Act, in violation of U.S.C. 1952 (6 Counts)
Maximum Penalty: Five years in custody; $250,000 fine or twice the pecuniary gain or loss; three years’ supervised release; restitution to victims of the offense; forfeiture
INVESTIGATING AGENCIES
Federal Bureau of Investigation
San Diego County District Attorney’s Office
California Department of Insurance
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Sentri Pass Holder Admits Smuggling Deadly Fentanyl, Heroin, Oxycodone and other Narcotics into the U.S.Read the Press Release
Assistant U.S. Attorney Sherri Walker Hobson (619) 961-0287
NEWS RELEASE SUMMARY – December 7, 2017
SAN DIEGO – Oscar Vasquez-Alamilla of Spring Valley pleaded guilty in federal court today to smuggling multiple narcotics in his truck while driving through the Otay Mesa Port of Entry on September 26, 2017 through the SENTRI lanes.
Vasquez-Alamilla was a SENTRI (Secure Electronic Network for Travelers Response Inspection) pass holder, which allowed expedited clearance for pre-approved travelers upon arrival in the United States and further allowed travelers to use dedicated lanes into the United States at southern land border ports. SENTRI is a U.S. Customs and Border Protection (CBP) Program.
In pleading guilty today to four felony counts of importing controlled substances, Vasquez-Alamilla admitted that on September 26, 2017, he knew that he was smuggling 24.74 pounds of cocaine, 12.68 pounds of fentanyl, 13.71 pounds of heroin, and over 7,000 pills marked as oxycodone in his truck as he entered the SENTRI lanes at Otay Mesa Port of Entry. These drugs were found in his truck by Customs and Border Protection officers (CBP) at the Otay Mesa Port of Entry.
Because of Vasquez-Alamilla’s immigration status as a lawful permanent residence of the U.S., he acknowledged in court today that his guilty pleas to importing drugs would cause his deportation from the U.S. to Mexico.
Vasquez-Alamilla is scheduled for sentencing on March 12, 2018, at 9 a.m. before District Court Judge Larry A. Burns.
DEFENDANT Criminal Case No. 17CR3467LAB
OSCAR VASQUEZ-ALAMILLA Age: 34 Spring Valley, California
SUMMARY OF CHARGES
Count 1 – Importation of 6.22 kilograms of heroin (21 U.S.C. 952, 960)
Count 2 – Importation of 11.22 kilograms of cocaine (21 U.S.C. 952, 960)
Count 3 – Importation of 5.75 kilograms of fentanyl (21 U.S.C. 952, 960)
Count 4 – Importation of 7000 oxycodone pills (21 U.S.C. 952, 960)
Maximum penalties as to Counts 1, 2 and 3: 10-year minimum mandatory to life; fine of $1 million
Maximum penalty as to Count 4: 20 years maximum; fine of $250,000
AGENCIES
U.S. Customs and Border Protection
Homeland Security Investigations
Imperial Beach Man Sentenced to Life in Fatal Stabbing of his Texas BoyfriendRead the Press Release
Assistant U. S. Attorney Robert Ciaffa (619) 546-7748
NEWS RELEASE SUMMARY – December 11, 2017
SAN DIEGO – David Enrique Meza of Imperial Beach was sentenced in federal court this morning to life in prison for fatally stabbing his boyfriend 24 times, slashing his throat to the point of near-decapitation and dumping his body in a ravine near Rosarito Beach, Mexico in order to inherit the boyfriend’s estate.
During today’s hearing, U.S. District Judge Jeffrey T. Miller called the murder an “inhumane, depraved act” and said the crime qualifies for a harsh sentence in part because of the unusually heinous, cruel nature of Meza’s actions. “The Merriam dictionary defines ‘heinous’ as hatefully or shockingly evil, abominable. This murder was shockingly evil – excessively so,” Judge Miller said.
On May 2, 2017, after two weeks of trial and seven days of deliberations, a jury found Meza guilty of murdering Texas retiree Jake Clyde Merendino in the early morning hours of May 2, 2015 in Mexico. Merendino’s body was found next to the highway between Rosarito and Ensenada in an area known as Los Arenales. Meza was convicted of both charges in the indictment, including one count of Foreign Domestic Violence Resulting in Death and one count of Conspiracy to Obstruct Justice.
Judge Miller, in describing the reasoning behind the sentence, said at the hearing, “If we try to visualize what happened, we visualize blow, after blow, after blow, after blow, after slash, after slash, after slash, after blow, and repeat another three times…One can’t even imagine the torture and torment Mr. Merendino experienced.”
According to evidence presented at trial, Meza, then 25, and Merendino, then in his early 50s, met online in June 2013 and were involved in a romantic relationship thereafter. At the same time, Meza was also involved in a long-term romantic relationship with Taylor Marie Langston, a Chula Vista High graduate who was pregnant with his child at the time of the murder. Prosecutors said Meza was living a double life.
Merendino’s death came two days after he closed escrow on a luxury oceanfront condominium at Palacio del Mar in Rosarito. Meza was the beneficiary. Within days of the murder, Meza produced a handwritten will written on hotel stationery that made him sole heir to Merendino’s estate.
Judge Miller, who presided over the trial, told the courtroom that Meza was certainly motivated by greed, but he was also attempting to gain control of his spiraling circumstances. “His double life was collapsing under its own weight. A solution was the savage murder of Mr. Merendino.”
U.S. Attorney Adam Braverman said, “Nothing can spare the victim or his family the agony of this unspeakable crime, but today justice was delivered to a murderer who will suffer his own sort of agony – a lifetime in prison.”
“This life sentence, plus an additional 20 years for obstruction, is a just punishment for a callous, calculated and brutal murder,” stated FBI Special Agent in Charge Eric S. Birnbaum. “Our message to all crime victims and today, a message in the name of Jake Clyde Merendino: Every day, the FBI carries an unwavering commitment to work tirelessly to deliver justice for the victims of crime. Alongside our colleagues at United States Attorney’s Office and our law enforcement partners in Mexico, the FBI is proud to have done that today.”
According to evidence presented at trial, Meza and Merendino drove to Mexico on April 30, 2015, so Merendino could close on his $273,000 ocean-view condominium at Palacio Del Mar in Rosarito.
The next day, on May 1, Meza and Merendino returned to Baja, this time with Merendino driving his Range Rover and Meza following on a motorcycle (a 2014 Christmas gift from the victim). The new condo was not yet ready for occupancy, so they checked in to a room at Bobby’s by the Sea, a hotel nearby.
At about 10:30 p.m., the hotel manager heard a motorcycle leaving the hotel parking lot, and Meza was captured on a border camera entering the U.S. at about 11 p.m. Meza returned to Mexico in the early morning hours of May 2, 2015, and his movements were tracked to the murder scene via GPS on his cell phone.
Merendino was last seen alive in the early morning hours of May 2, when he drove out of Bobby’s by the Sea parking lot, telling the hotel security guard that he needed to help a friend stranded on the road. His body was found at around 3 a.m. by Mexican police officers. At 3:57 a.m. Meza crossed into the United States on his motorcycle.
At 7 p.m. the same day as the murder, Meza and his fiance returned to the Bobby’s by the Sea hotel in the black SUV. Meza told hotel staff he was there to pick up his personal items from the room he had shared with Merendino.
After the slaying, Meza filed an application to probate a 2014 handwritten will in which Merendino left his entire estate to Meza.
U.S. Attorney Braverman thanked law enforcement counterparts from Procuraduría General de Justicia del Estado - the Attorney General’s office in the state of Baja California – as well as the Rosarito Municipal Police, for their assistance in the investigation and prosecution of these crimes.
Braverman noted that in certain circumstances, the United States has legal jurisdiction to prosecute crimes committed in other countries when U.S. citizens are victimized. “The United States will use every tool at its disposal to investigate and prosecute offenders who prey on U.S. citizens abroad.”
DEFENDANT Case Number: 15CR3175-JM
David Enrique Meza Age: 27
SUMMARY OF CHARGES
Count One
Interstate or Foreign Domestic Violence Resulting in Murder, in violation of Title 18 United States Code, Section 2261 (a) (1).
Maximum Penalty: Life in prison
Sentence: Life in prison
Count Two
Conspiracy to Obstruct Justice, in violation of Title 18, United States Code, Section 1512 (k).
Maximum Penalty: 20 years in prison
Sentence: 20 years in prison
AGENCY
Federal Bureau of Investigation
Defendant Charged with Smuggling 77 Pounds of Deadly Fentanyl into the United States in one of Largest Fentanyl Seizures along Southwest BorderRead the Press Release
Assistant U. S. Attorney Sherri Walker Hobson (619) 961-0287
NEWS RELEASE SUMMARY – December 11, 2017
SAN DIEGO – Tijuana resident Flavio Diego Rivera Davalos was arraigned today in federal court on charges that he smuggled approximately 77.82 pounds of fentanyl into the United States in one of the largest seizures of the deadly drug along the Southwest border with Mexico.
According to court documents, Davalos entered the United States from Mexico via the San Ysidro, California Port of Entry. Davalos, a visa holder, was the driver, sole occupant and registered owner of the 2010 Ford Focus bearing Baja California, Mexico license plates.
In pre-primary inspection, a Customs and Border Protection Officer and an assigned Narcotics and Human Detection Dog were conducting roving operations when the canine alerted to the odor of narcotics at the vehicle’s passenger rear door area and rear seats.
A CBP officer questioned Davalos regarding his purpose of travel to the United States and he responded that he was going to “Las Americas” Premium Outlets shopping mall. At the secondary inspection area, CBP officers detected anomalies in the rear seat and rear quarter panels of the vehicle. According to a complaint, officers found 31 packages throughout the vehicle, including in the driver’s side quarter panel, the passenger’s side quarter panel, the driver’s side rear seat, the passenger’s side rear seat, the speaker box and the firewall under the hood.
The defendant’s detention hearing is scheduled on December 14 at 9:45 a.m. before U.S. Magistrate Judge Karen Crawford and his preliminary hearing is set for December 21 at 2 p.m.before U.S. Magistrate Judge Jan Adler.
Federal authorities, led by U.S. Customs and Border Protection and Homeland Security Investigations, confiscated 542.42 kilograms of fentanyl in FY 2017. In FY 2015, there were only six seizures totaling 30.18 kilograms. This represents a 914 percent increase in fentanyl seizures at the Ports of Entry in the Southern District of California.
DEFENDANT Case Number 17MJ4684
Flavio Diego Rivera Davalos Age 19 Tijuana, Mexico
CHARGES
Importation of Controlled Substance: 10 year minimum mandatory to life; fine of $1 million dollars; at least 3 years of supervised release; $100 Special Assessment
AGENCIES
Customs and Border Protection (CBP)
Homeland Security Investigations (HSI)
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Man Pleads Guilty to Smuggling TigerRead the Press Release
Assistant U.S. Attorneys Melanie K. Pierson (619) 546-7976 or
Michelle Wasserman (619) 546-8431
NEWS RELEASE SUMMARY – December 5, 2017
SAN DIEGO – Luis Valencia pleaded guilty in federal court today to smuggling a tiger cub into the United States from Mexico in the front passenger side of his car while driving through the San Ysidro Port of Entry on August 23, 2017.
In pleading guilty, Valencia admitted that on August 18, 2017, he contacted an individual in Mexico to make arrangements to obtain the tiger cub and bring it into the United States. The following day he received a photograph of a tiger cub from the individual in Mexico with a piece of paper in the photograph, upon which was written the defendant’s full name and the date of August 20, 2017.
On August 22, 2017, Valencia said he received a message from the individual in Mexico indicating that the tiger cub would be arriving at the Aeromexico cargo area of the Tijuana airport that evening. On August 23, 2017, at approximately 1:30 am, Valencia admitted that he entered the United States from Mexico driving a 2017 Camaro with no license plates. At the time of entry, as the defendant was aware, underneath the legs of his front seat passenger in the Camaro was a six-week old Bengal tiger cub. Valencia acknowledged that neither he nor his passenger declared the tiger cub as merchandise entering from Mexico upon their entry into the United States, although he was aware that it should have been declared. The defendant admitted that he intended to conceal the presence of the tiger cub and deceive the inspectors in order to bring the tiger cub into the United States, and further acknowledged that he brought the tiger cub into the United States for a commercial purpose.
All tiger species (Panthera tigris), including Bengal tigers (Panthera tigris tigris) are listed as endangered under the Endangered Species Act, and are listed on Appendix I of the Convention on International Trade in Endangered Species, an international agreement to which both the United States and Mexico are signatories. Valencia admitted that neither he nor any of his co-conspirators had received permission from the U.S. Fish and Wildlife Service to import a tiger cub into the United States from Mexico.
Valencia is scheduled to be sentenced before U.S. District Judge Anthony J. Battaglia on February February 20, 2018, at 9:00 am. Co-defendant Eriberto Paniagua is set for trial on January 9, 2018, at 9:00 a.m.
“We have laws in place to protect endangered species, and smuggling a tiger in the front seat of a car puts both the tiger and the public in jeopardy,” said U.S. Attorney Adam Braverman. “We will hold violators accountable.”
“Today’s guilty plea demonstrates Homeland Security Investigations’ (HSI) commitment to hold those involved in wildlife trafficking accountable,” said David Shaw, Special Agent in Charge of HSI in San Diego. “HSI Special Agents are committed to working together with U.S. Fish & Wildlife and other law enforcement partners to investigate and arrest those who do not abide by their legal obligations to seek permission from U.S. authorities to import endangered species such as the tiger cub in this case, who was ultimately rescued from this trafficking ring.”
“One of the highest priorities of the U.S. Fish and Wildlife Service Office of Law Enforcement is to investigate individuals involved in the unlawful commercial trafficking and smuggling of protected animals here and around the world,” said Fish and Wildlife Special Agent in Charge Jill Birchell. “Tigers are one of the most imperiled species on the planet, and this investigation demonstrates that anyone attempting to unlawfully exploit these majestic creatures will be apprehended and held accountable."
DEFENDANT Criminal Case No. 17cr2856-AJB
Luis Valencia Age: 18 Perris, California
SUMMARY OF CHARGES
Conspiracy, 18 U.S.C. § 371
Maximum penalty: 5 years’ prison, fine of $250,000 or twice the gross gain or loss caused by the offense, restitution, forfeiture of proceeds generated from the offense, five years of supervised release.
AGENCIES
U.S. Fish and Wildlife Service, Office of Criminal Investigations
Homeland Security Investigations
Brawley Man Sentenced for Stealing More Than $250,000 from Local FarmRead the Press Release
Assistant U.S. Attorney Christine M. Ro (619)546-7937
NEWS RELEASE SUMMARY – December 4, 2017
SAN DIEGO - Former bookkeeper Claude Theodore Riley was sentenced in federal court today to 24 months in prison for embezzling from his former employer and failing to pay taxes on the stolen funds. He was also ordered to pay $273,000 in restitution to the employer and $75,000 to the Internal Revenue Service.
Riley pleaded guilty in September to wire fraud and making a false tax return in a five-year scheme in which he stole stealing from his employer, an Imperial Valley farm. Riley stole approximately $272,984.00 from his employer, filed fraudulent tax returns, and failed to file required employment tax returns resulting in a $1.5-million-dollar tax lien against the farm.
Riley served as the farm’s bookkeeper from 2010 to 2015, overseeing the farm’s entire annual budget. As the bookkeeper, Riley had access to the farm’s bank accounts, paychecks, and bookkeeping records. Riley forged certain IRS documents to hide his embezzlement from the employer. For his scheme, Riley made 148 transactions out of the employer’s bank account, fictitiously entered various vendors to be paid into the bookkeeping records, and generated checks made payable to himself.
“His employer trusted Riley to safeguard the fruits of their labor, but he diverted hundreds of thousands of those hard-earned dollars into his own pocket,” said U.S. Attorney Adam Braverman. “Today, the defendant pays the price for his deception.”
“Mr. Riley took advantage of the trust of his employer for his own benefit,” said FBI Special Agent in Charge Eric S. Birnbaum. “Today, justice is served for this Imperial Valley farm family. This case is an excellent example to illustrate how the FBI works to uncover fraud schemes that have a significant impact on the Valley's hard-working farming industry.”
The farming industry is an important source of Imperial Valley’s economy and producer of agriculture for the nation. Imperial Valley is one of California’s top producers of agriculture, which generates income for local families in the Southern District of California.
DEFENDANT Criminal Case No. 17CR2721-BAS
Claude Theodore Riley Age: 56 Brawley, California
SUMMARY OF CHARGES
Wire Fraud – Title 18, U.S.C., Section 1343
Maximum penalty: 20 years’ imprisonment and $250,000 fine
Filing a False Tax Return – Title 26, U.S.C., Section 7206(1)
Maximum penalty: 3 years’ imprisonment and $250,000 fine
INVESTIGATING AGENCIES
Federal Bureau of Investigation, Imperial County Resident Agency
Internal Revenue Service, Criminal Investigation
Brawley Police Department
Active-Duty U.S. Navy Commander Sentenced for Conspiring with Foreign Defense Contractor to Defraud the U.S. NavyRead the Press Release
Assistant U.S. Attorneys Mark W. Pletcher (619) 546-9714 and Patrick Hovakimian (619) 546-9718
NEWS RELEASE SUMMARY – December 1, 2017
SAN DIEGO – U.S. Navy commander Bobby Pitts was sentenced today to 18 months in prison, a $15,000 fine and $7,500 in restitution for conspiring to impede the Navy’s investigation of Singapore-based defense contractor Leonard Glenn Francis.
Pitts, 48, of Chesapeake, Va., pleaded guilty to one count of conspiracy to defraud the United States, admitting that he conspired to protect Francis, owner and chief executive of Glenn Defense Marine Asia (GDMA) from allegations of wrongdoing.
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.
In pronouncing sentence today, U.S. District Judge Janis L. Sammartino told the defendant that in committing his crime, Pitts “betrayed the Navy and betrayed the Country.”
According to admissions made as part of his plea agreement, from August 2009 to May 2011, Pitts served as the Officer in Charge of the U.S. Navy’s Fleet Industrial Supply Command (FISC) in Singapore. As part of his duties, Pitts was responsible for overseeing the legal and ethical execution of the U.S. Navy’s ship husbanding contracts in the Pacific, including those held by Francis.
In 2009 and 2010, Pitts learned that Naval Criminal Investigative Service and several civilian employees of the U.S. Navy were investigating whether Francis was over-billing the U.S. Navy on ship husbanding contracts. In fact, Pitts had access to internal U.S. Navy documents pertaining to investigative steps that the U.S. Navy was considering and admitted that he shared this information with Francis, with the intent to impede and obstruct the U.S. Navy’s oversight of its contracts with GDMA.
On Nov. 23, 2010, for example, Pitts forwarded to a representative of GDMA an internal U.S. Navy email discussing FISC’s intention to contact officials with the Royal Thai Navy to determine whether GDMA had been billing the U.S. Navy for force protection services in fact provided by the Thai government.
“Pitts deliberately and methodically undermined government operations and in doing so, diverted his allegiance from his country and colleagues to a foreign defense contractor, and for that, he is paying a high price,” said U.S. Attorney Adam Braverman.
So far, 19 of 28 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: 16-CR-1207
Commander Bobby Pitts Age 48 Chesapeake, Virginia
SUMMARY OF CHARGES
Conspiracy to Defraud the United States, in violation of 18 U.S.C. § 371
Maximum Penalty: Five years in prison, a $250,000 fine or twice the gross gain or loss from the offense, whichever is greater
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
Defense Contract Audit Agency
Oxycodone Trafficker Convicted by Federal JuryRead the Press Release
Assistant U. S. Attorney Orlando Gutierrez (619) 546-6958
NEWS RELEASE SUMMARY – November 29, 2017
SAN DIEGO – Edwin Fuller, a member of a drug trafficking organization that illegally acquired and distributed at least 50,000 oxycodone tablets valued at $1.5 million during a three-year span, was convicted by a federal jury today following a three-day trial.
Fuller was part of what is believed to be the San Diego region’s most prolific and well-organized oxycodone ring. The organization acquired oxycodone via fraudulent prescriptions and phony California identification cards and distributed the pills across the country. One significant seizure involved 7,000 pills sent by this organization to Columbus, Ohio.
Fuller is the fourth key member of the organization that has been convicted in the case so far. The investigation is ongoing.
Two coconspirators testified at trial that Fuller was a recruiter and a “filler” who walked into pharmacies to get bogus prescriptions filled. Fuller received the oxycodone and distributed it to others. Evidence at trial proved that over a six-month period Fuller was able to successfully acquire more than 11,000 30-milligram tablets of oxycodone. The traffickers obtained pills for about $2 each from the pharmacies and then sold them for a street value of up to $30 each.
One coconspirator testified that she was “thankful” for being arrested because she would have died as a result of her addition to oxycodone.
U.S. Attorney Adam Braverman said prosecution of this organization and others like it is a priority for this office because their greed is feeding the addiction crisis in California and other regions of the United States.
“Just yesterday I heard from parents who tragically lost their son to opiate addiction. This case demonstrates that we are holding pill peddlers accountable for the havoc they are wreaking on our country,” said U.S. Attorney Adam Braverman. “We will not tolerate drug trafficking rings that seek to profit by exploiting and endangering people who struggle with substance use disorder.”
Earlier today, Attorney General Jeff Sessions announced new resources and stepped up efforts to address the drug and opioid crisis, including over $12 million in grant funding to assist law enforcement in combating illegal manufacturing and distribution of methamphetamine, heroin, and prescription opioid and 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.
Fuller is scheduled to be sentenced on February 15, 2018 at 2:15 p.m. before U.S. District Judge Gonzalo Curiel.
This case is the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF) a partnership that brings together the combined expertise and unique abilities of federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, dismantle and prosecute high level members of drug trafficking, weapons trafficking and money laundering organizations and enterprises.
DEFENDANTS Case Number 16cr0867
Edwin Fuller Age: 39 Los Angeles
SUMMARY OF CHARGES
Conspiracy to Possess with Intent to Distribute Controlled Substance – Title 21, U.S.C., Section 841(a) (1) and 846
Maximum penalty: 20 years in prison and $1 million fine
Adam Braverman Sworn in as United States Attorney for the Southern District of CaliforniaRead the Press Release
Media Relations Director Kelly Thornton (619) 546-9726 or [email protected]
NEWS RELEASE SUMMARY – November 16, 2017
SAN DIEGO – Adam L. Braverman, a veteran prosecutor who has spent a significant part of his government career pursuing large-scale international drug trafficking cartels, took the oath of office today to become U.S. Attorney for the Southern District of California following his interim appointment by Attorney General Jeff Sessions.
“It is an honor and privilege to be asked to lead an office that is so close to my heart,” Braverman said. “I intend to support all the excellent work that is underway in this office, and also to pursue new, comprehensive, long-term solutions to our most challenging issues – particularly those crimes committed by transnational criminal organizations.”
Braverman, a native of Columbus, Ohio, has been a federal prosecutor in San Diego since 2008. He was most recently deputy chief of the Criminal Enterprises Section, which investigates and prosecutes international and domestic narcotics trafficking organizations and criminal street gangs.
During his tenure as an Assistant U.S. Attorney, Braverman led one of the Department of Justice’s most successful investigations and prosecutions of the Sinaloa Cartel, which resulted in the indictments of more than 125 people, including the command and control structure of the Sinaloa Cartel.
Braverman has been the recipient of numerous significant awards in recent years, including a Justice Department honor for superior performance as an Assistant U.S. Attorney in 2017 and the prestigious J. Michael Bradford Award from the National Association of Former United States Attorneys in 2016 for most outstanding performance by an Assistant U.S. Attorney.
With his appointment, Braverman becomes the top-ranking federal law enforcement official in the Southern District of California, which includes San Diego and Imperial counties. The office is responsible for prosecuting federal crimes in the district, including crimes related to terrorism, public corruption, child exploitation, firearms, immigration and narcotics. The office also defends the United States in civil cases and collects debts owed to the United States.
Braverman earned his bachelor’s degree in political science and criminal justice from The George Washington University in 1997 and his law degree from The George Washington University School of Law in 2000. He began his legal career as a law clerk, first for Washington, D.C. Superior Court Judge Ann O’Regan Keary in 2000 and then for U.S. District Judge Reggie B. Walton in the District of Columbia in 2002.
In 2004, Braverman went to work in private practice at Goodwin Procter in Washington, D.C. and then became a law clerk for Judge Consuelo M. Callahan of the U.S. Court of Appeals for the Ninth Circuit in 2007. He joined the U.S. Attorney’s office in San Diego in 2008.
Braverman replaces Alana Robinson, who was appointed by Department of Justice officials in January to be acting U.S. attorney on a temporary basis for up to 300 days, a period that expired today. Chief U.S. District Judge Barry T. Moskowitz officiated over the swearing-in ceremony.
Captain of Drug Smuggling Vessel Sentenced to 104 MonthsRead the Press Release
Special Assistant U.S. Attorney Ari Fitzwater (619) 546-8756 and Assistant U. S. Attorney Connie Wu (619) 546-8592
NEWS RELEASE SUMMARY – November 14, 2017
SAN DIEGO – Jesus Armando Portocarrero-Angulo was sentenced yesterday by U.S. District Judge Roger T. Benitez to 104 months in prison and 5 years of supervised release for possessing with intent to distribute over 1,370 pounds of cocaine while onboard a vessel.
On October 4, 2016, defendant Portocarrero-Angulo was acting as the captain of the go-fast vessel “Pez Sierra,” which was traveling in international waters. While on routine patrol, a maritime patrol aircraft observed the occupants of the vessel throwing bales of suspected contraband overboard into the ocean.
A helicopter launched from the United States Coast Guard Cutter Waesche approached the defendant’s vessel, which was traveling in the Eastern Pacific Ocean about 175 nautical miles northeast of the Galapagos Islands of Ecuador. The helicopter signaled the defendant’s vessel to stop, but it refused to do so. The helicopter used warning shots, and then precision fire to disable the vessel. The Coast Guard recovered approximately 21 bales of cocaine previously thrown overboard from the defendant’s vessel.
Portocarrero-Angulo pleaded guilty in August. Two additional crewmembers who were onboard the go-fast vessel have also pleaded guilty and are scheduled for sentencing before Judge Benitez on January 8, 2018.
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.
DEFENDANT Case Number 16cr2555
Jesus Armando Portocarrero-Angulo Age: 33 Ecuador
SUMMARY OF CHARGES
Possession of Cocaine with Intent to Distribute on Board a Vessel – Title 46, U.S.C., Section 70503
Maximum penalty: 40 years in prison and $5,000,000 fine
AGENCY
Drug Enforcement Administration
United States Coast Guard
Man Sentenced to Ten Years in Prison for Second Offense Involving the Sex Trafficking of MinorsRead the Press Release
Assistant U. S. Attorney Alessandra Serano (619) 546-8104
NEWS RELEASE SUMMARY – November 9, 2017
SAN DIEGO, CA – Anthony Khyree Dotson aka “Ant” was sentenced today to 120 months in prison and 10 years of supervised release for sex trafficking a 17-year old minor female while a fugitive for a prior federal conviction involving the same conduct.
The case was initiated in April 2015 after a local high school counselor suspected that a student who attended the local high school was being trafficked. The counselor contacted the San Diego Police Department. San Diego police detectives identified a vehicle that picked up the minor female from school and traced that vehicle back to Dotson, who was listed as an escapee from a halfway house in Los Angeles. Dotson was serving the remainder of his federal prison sentence for a 2012 conviction for the same conduct involving two 16-year old minor females.
In the current case, detectives identified an online ad for the minor on backpage.com in May of 2015 and called the number. A young female answered the call and directed the detective, posing as a customer, to a hotel in Mission Valley. Detectives observed Dotson with the minor in the parking lot of the hotel. The minor exited Dotson’s vehicle and directed the “customer” - an undercover officer, posing as a sex buyer - to a room where the minor was arrested. Detectives located male clothing and used condoms in the trash can. The room was registered to Dotson and video surveillance showed Dotson checking into the room with the minor female wearing the same clothing found in the hotel room. Dotson was apprehended waiting in his vehicle in the hotel parking lot.
United States District Judge Dana M. Sabraw, who sentenced Dotson for his prior offense, stated that he hoped Dotson “would move away” from this activity as he would be facing more significant prison time if he chose to engage in this offense in the future. Sabraw noted that the penalties are harsh “for good reason” as the victims of these crimes are forever affected. Assistant U.S. Attorney Alessandra P. Serano noted that the sentence imposed was more than double the amount of time Dotson received in 2012.
“We will continue to work tirelessly with our law enforcement partners to detect and prosecute persons who engage in sex trafficking, a form of modern day slavery,” said Acting U.S. Attorney Alana Robinson.
“Every day, the FBI and our law enforcement partners at the Innocence Lost Task Force work to thwart these child predators. In this case, it was an alert school counselor who noticed the signs of human trafficking and reported it to law enforcement,” said FBI Special Agent in Charge Eric S. Birnbaum. “This case shows the community working together with law enforcement to combat this horrific crime.”
If you believe you are the victim of a trafficking situation or may have information about a potential trafficking situation, call the National Human Trafficking Resource Center (NHTRC) at 1-888-373-7888. NHTRC is a national, toll-free hotline, with specialists available to answer calls from anywhere in the country, 24 hours a day, seven days a week, every day of the year related to potential trafficking victims, suspicious behaviors, and/or locations where trafficking is suspected to occur.
This prosecution is the fruit of the collaborative work of the San Diego Police Department and the FBI’s Innocence Lost Task Force.
DEFENDANTS Case Number: 17CR0638-DMS
Anthony Khyree Dotson aka “Ant” Age: 26 San Diego, CA
SUMMARY OF CHARGES
Sex Trafficking of Children, Title 18 U.S.C. § 1591(a) and (b) – Maximum Penalties: life in prison, Sex Offender Registration
INVESTIGATING AGENCIES
San Diego Police Department
Federal Bureau of Investigation
Man Sentenced for Stealing Deceased Father’s Social Security benefits for 16 yearsRead the Press Release
Special Assistant U.S. Attorney Jeffrey D. Hill (619) 546-7924
NEWS RELEASE SUMMARY – November 6, 2017
SAN DIEGO –Abel Jose Perez of San Diego was sentenced today to twelve months and one day in federal prison for stealing $271,925.60 in Social Security retirement benefits intended for his father, who had died in 1997. As Perez admitted when pleading guilty, instead of informing the Social Security Administration of his father’s death, Perez continued to take benefits that had been deposited into a bank account in his deceased parents’ names. Soon after each month’s deposit from the Social Security Administration, Perez would forge his father’s signature on a bank check made payable to himself, and divert the funds for his own personal use.
The Social Security Administration pays retirement benefits to eligible retired workers, aged 62 or better, and to their eligible dependents. Although the widow or the minor child of a deceased retiree can receive posthumous benefits, Perez, 55, admitted that in this case he knew he was not entitled to receive any of the money paid out by Social Security after his father’s death. When entering his guilty plea on May 17, 2017, Perez admitted that for over sixteen years he retained exclusive access to and controlled a bank account belonging to his deceased parents, enabling him to illegally convert over a quarter-million dollars of public money to his own use.
Acting United States Attorney Alana W. Robinson commented, “The theft of Social Security benefits is a direct attack on the most vulnerable and needy members of our community. Every dime of stolen benefits reduces the funds available to our retirees and other beneficiaries.” Acting U.S. Attorney Robinson observed that while this was the largest single Social Security theft in the Southern District of California, the office has prosecuted a significant number of such cases in the past three years. Moreover, she anticipated an increase in the office’s enforcement efforts designed to protect the public purse.
“The Social Security Administration’s Office of the Inspector General is pleased to see that this crime, which affects every individual relying on the Social Security Trust Fund for their retirement, was taken seriously and punished appropriately in this case,” said Robb Stickley, the Special Agent in Charge of the San Francisco Field Division, which is responsible for Southern California. “We hope that this sentence sends a message that it is the responsibility of every individual in our society to protect their own retirement savings, and ensure that a loved one’s death does not go unreported.”
In addition to his prison sentence and period of supervised release, Perez was ordered to repay every dollar that he stole from the Social Security Administration. At the conclusion of his sentencing hearing, Perez was remanded into custody to begin serving his prison sentence.
DEFENDANT Case Number 17-cr-01259-WQH
Abel Jose Perez San Diego, CA
SUMMARY OF CHARGES
Theft of Public Property – Title 18, U.S.C., Section 641
Maximum penalty: 10 years’ imprisonment, $250,000 fine, restitution
AGENCY
Social Security Administration’s Office of the Inspector General
Drug Cartel Leader ArrestedRead the Press Release
Assistant U.S. Attorneys Matthew J. Sutton
and Adam L. Braverman (619) 546-8941 and (619) 546-6717
NEWS RELEASE SUMMARY – October 27, 2017
SAN DIEGO – Major Mexican drug cartel leader Sajid Emilio Quintero Navidad, aka Cadete, was arraigned in federal court on October 11, 2017, following his arrest by United States law enforcement at the San Ysidro Port of Entry on charges arising out of the Southern District of California. 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.
A federal grand jury in San Diego returned an indictment on September 22, 2017, charging Quintero Navidad with Conspiracy to Distribute Controlled Substances Intended for Importation, Conspiracy to Import Controlled Substances and Conspiracy to Launder Monetary Instruments. That same day, the Clerk of the Court issued a sealed warrant for his arrest. On October 11, 2017, Quintero Navidad was arrested at the San Ysidro Port of Entry, and on that same day, U.S. Magistrate Judge Jan M. Adler arraigned Quintero Navidad on these charges and unsealed the indictment against him.
The unsealed indictment marks the conclusion of the initial phase of a multi-year 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) DTO and Beltran Leyva Organization (BLO).
“Today is yet another reminder that there is no place to hide, because the Southern District of California, along with our law enforcement partners, will continue to pursue and prosecute international drug kingpins who for years profited from the shipment and sale of illegal drugs,” said Acting U.S. Attorney Alana Robinson. “With this action, one of the most significant drug traffickers in Mexico will be brought to justice.”
Acting U.S. Attorney Robinson also praised the outstanding work of the federal team from HSI Calexico / DEA Imperial County in the culmination of this investigation. Acting U.S. Attorney Robinson also thanked Customs and Border Protection, the U.S. Marshals Service, the U.S. Department of Justice’s Office of Enforcement Operations and the Office of International Affairs, and the Department of Treasury’s Office of Foreign Assets Control for their ongoing assistance in this investigation.
“The arrest of Sajid Emilio Quintero Navidad is a result of outstanding investigative work by HSI special agents in Calexico, in collaboration with our federal, state, local and international law enforcement partners,” said Dave Shaw, Special Agent in Charge of HSI in San Diego. “HSI agents worked tirelessly to identify and arrest Mr. Quintero Navidad, underscoring our resolve to ensure he is brought to justice.”
“The arrest of Sajid Quintero-Navidad illustrates the great work that DEA and its law enforcement partners do every day,” said DEA San Diego Special Agent in Charge William Sherman. “This high level target will no longer be able to smuggle deadly drugs across our border.”
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.
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
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
*An indictment or complaint is not evidence that the defendants committed the crimes charged. The defendants are presumed innocent until the Government meets its burden in court of proving guilt beyond a reasonable doubt.
U.S. Attorney’s Office Prosecuting County’s First Carfentanil, 4ANPP CasesRead the Press Release
SAN DIEGO – The U.S. Attorney’s office is prosecuting the first local case involving the seizure of carfentanil, the relatively new synthetic opioid that is 100 times stronger than Fentanyl and 10,000 times more potent than morphine.
The defendant, Sky Gornik, is accused of trafficking in carfentanil, fentanyl, ketamine and other drugs through the U.S. Mail over a period of several years.
During a search of Gornik’s house in Clairemont, federal agents and local police found a wide variety of drugs, including a small baggie containing 1.77 grams of carfentanil - which experts say equates to about 86,000 fatal doses.
Agents also seized gel tablets containing fentanyl and methamphetamine. Agents learned that Gornik ordered these fentanyl gel tablets (approximately 600 units per week over the past two years) over the dark web from a dealer in Oklahoma. The Oklahoma dealer purchased the fentanyl directly from China.
Federal agents seized $1.2 million in digital currency in that case.
The U.S. Attorney’s Office is also prosecuting its first case involving the fentanyl precursor chemical known as “4ANPP.” This is the primary ingredient for manufacturing fentanyl. The 4ANPP precursor was mailed from China directly to locations in San Ysidro. Traffickers typically take the product from the U.S. into Mexico, where fentanyl is manufactured. Once the traffickers manufacture the fentanyl with the 4ANPP, they attempt to smuggle the fentanyl back into the United States.
In the precursor case, a former Border Patrol agent, Cesar Daleo, was arrested and charged with drug crimes after he went to a post office box in San Ysidro to pick up a package containing 4ANPP. But unbeknownst to the defendant, authorities were on to him. Customs and Border Protection agents at Los Angeles International Airport had intercepted the original package, which originated in China and was bound for San Ysidro. Homeland Security Investigations agents then replaced the 4ANPP with a harmless substance and waited for someone to pick it up.
Daleo was arrested soon after he picked up the package. According to charging documents, Daleo had picked up packages at the same location 13 previous times in the last year.
One kilogram of precursor 4ANPP was seized that day, but that amount could make approximately 25 kilograms of fentanyl in the possession of Mexican Drug Trafficking Organizations’ production labs.
DEFENDANT Case Number 17cr2796
Sky Justin Gornik Age: 37 San Diego
SUMMARY OF CHARGES
Conspiracy to distribute fentanyl, in violation of 21 U.S.C. 841(a)(1), 846
Maximum Penalty: 20 years in custody; 3 years of supervised release; $250,000 fine; $100 special assessment
Possession with intent to distribute carfentanil, in violation of 21 U.S.C. 841(a)(1)
Maximum Penalty: 20 years in custody; 3 years of supervised release; $250,000 fine
Possession with intent to distribute ketamine, in violation of 21 U.S.C. 841(a)(1)
Maximum Penalty: 20 years in custody; 3 years of supervised release; $250,000 fine
DEFENDANT Case Number
Cesar Daleo Age: 47 San Diego
SUMMARY OF CHARGES
Conspiracy to possess listed chemical (4ANPP) knowing or having reasonable cause to believe that the listed chemical would be used to manufacture a controlled substance, fentanyl, in violation of 21 U.S.C. 841 (c) (2) and 846.
Maximum Penalty: 20 years in custody; 3 years of supervised release; $250,000 fine
Attempted possession of listed chemical (4ANPP) knowing or having reasonable cause to believe that the listed chemical would be used to manufacture a controlled substance, fentanyl, in violation of 21 U.S.C. 841 (c) (2) and 846;
Maximum Penalty: 20 years in custody; 3 years of supervised release; $250,000 fine
AGENCIES
Homeland Security Investigations
United States Postal Inspectors
San Diego Police Department
Drug Enforcement Administration
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
County’s Top Law Enforcers Issue Dire Warning about Fentanyl, Carfentanil as Deaths and Border Seizures SpikeRead the Press Release
Acting U.S. Attorney Alana W. Robinson talks about the risks of Fentanyl and Carfentanil.SAN DIEGO – The county’s top law enforcement officials issued a dire warning today about a dramatic surge in deaths and international trafficking activity related to Fentanyl and its even more deadly cousin, carfentanil.
While Fentanyl is 30-50 times more powerful than heroin, concern among law enforcers has intensified with the emergence of carfentanil, a drug 100 times stronger than fentanyl that is normally used as a sedative for animals like elephants. It only takes a few granules the size of grains of table salt to kill someone.
At a news conference today, officials reported a significant increase in fentanyl-related deaths in San Diego County since 2014 – which mirrors a national trend. In calendar year 2017, there have been 40 overdoses in the first nine months - more than all of 2016. And, the Medical Examiner has 11 more fentanyl cases pending confirmation, which would bring the number to 51 with three months to go. Across the country, more than 64,000 people have died as the result of an opioid overdose in 2016.
More than 75 percent of fentanyl seizures across the southwest border is coming through ports of entry in the Southern District of California from Mexico. Law enforcement officials have responded by seizing unprecedented quantities of fentanyl.
Federal seizures of fentanyl at the border in San Diego and Imperial counties have almost tripled since last year, from 19 to 54. The year before that, in 2015, there were only six seizures. That’s a 700 percent increase in two years.
Federal authorities, led by U.S. Customs and Border Protection and Homeland Security Investigations, confiscated 480 kilograms of illicit fentanyl at the border this year. That’s more than half a ton and almost double last year’s take. Just two years ago, authorities seized just 30 kilograms.
“This rapid increase in seizures and deaths tells us that we are on a very dangerous trajectory,” said Acting U.S. Attorney Alana Robinson. “There is no question that this is an epidemic with legs and it is sprinting. Every law enforcement agency in our community, whether federal, local or state, is on high alert. We will not allow San Diego and Imperial Counties to serve as a Fentanyl Gateway for the rest of the country. Nor will we allow Mexican cartels to capitalize on the opiate crisis.”
“A tiny amount of fentanyl can be lethal and today’s street buy can be tomorrow’s funeral,” District Attorney Summer Stephan said. “People buying drugs can’t be sure of what they’re really getting, making it a dangerous game of Russian roulette. Deaths due to unintentional combinations of drugs have roughly doubled in San Diego County in the last 15 years.”
“Homeland Security Investigations (HSI) San Diego Special Agents, together with our law enforcement partners, are working diligently to identify and ultimately dismantle the criminal organizations responsible for the transnational movement of these dangerous drugs,” said David Shaw, special agent in charge for HSI in San Diego. “HSI is committed to fully investigating and seeking prosecution of those individuals committing these crimes, in order to keep our communities safe and clear of these dangerous drugs.”
“Fentanyl is a dangerous substance, and we are not only concerned with keeping it out of our communities but also for the safety of our officers when they come into contact with it,” said San Diego CBP Director of Field Operations, Pete Flores. “We are grateful for the collaborative efforts of our law enforcement partners to deliver consequences to those that smuggle fentanyl and for working to get this off of our streets.”
“Fentanyl is 30 to 50 times more potent than heroin which makes it one of the most deadly drugs on our streets today,” said San Diego Police Chief Shelley Zimmerman. “That is why we must get the word out to everyone. This is about saving lives and educating our community about the dangers of illegally using Fentanyl.”
“DEA is attacking the opioid crisis on two levels: arresting the people who are responsible for trafficking these deadly substances; and educating the public about the dangers of opioid abuse,” says DEA San Diego Special Agent in Charge William R. Sherman. “This year, DEA has spoken at over 60 elementary, middle, high schools, and colleges in San Diego County and Imperial Counties reaching over 17,000 students, along with parent and community groups, and countless national and local media outlets to discuss the dangers of opioid abuse. DEA will continue its diligence in making our residents aware of the deadly danger these drugs pose.”
“Our collaborative efforts, through taskforces, sharing resources and intel, and leveraging expertise, are having an impact in neighborhoods across the country. There is a great deal yet to accomplish, as our nation struggles with this epidemic,” said Nichole Cooper, Inspector in Charge, Los Angeles Division, U.S. Postal Inspection Service. “Whether these illegal substances are sourced by smuggling, commercial shippers or the mail, the United States Postal Inspection is committed to working on behalf of American citizens, alongside our partners, to help safeguard communities and bring offenders to justice. We will continue to work with our law enforcement partners to get dangerous individuals and drugs off our streets.”
“The Sheriff's Department is committed to collaborating with our local, state and federal law enforcement partners to address the national opioid epidemic,” said Sheriff’ Bill Gore. “By working together, law enforcement and our community partners can create new and effective solutions to save lives and stop this devastating crisis.”
“The opioid crisis gripping our nation has become far-reaching and widespread, touching every corner of the United States, including the greater San Diego area,” stated IRS Criminal Investigation’s Special Agent in Charge R. Damon Rowe. “IRS Criminal Investigation will not stand still while deadly synthetic drugs like fentanyl are sold on the streets, literally destroying our communities. By fighting this epidemic, we are saving lives and sending a clear message that those who seek to profit by peddling poison will be put out of business and brought to justice.”
Here are a few more trends:
-Fentanyl trafficking is a very lucrative business. One kilogram of fentanyl costs about $32,000 and can be used to create a million counterfeit pills for a profit of more than $20 million.
-Users are ordering up fentanyl from the so-called “Dark Web” like they would order something from Amazon. The drug is being purchased online from China and sent directly to customers by mail or express delivery service in the U.S.
-Fentanyl is turning up in counterfeit oxycodone pills – agents in this district have seized over 20,000 counterfeit oxycodone pills containing fentanyl in 2017, protecting Southern California from Mexican cartels seeking to capitalize on the opiate crisis.
In one case this year, a Medical Examiner analyst studied a counterfeit Oxycontin 40 milligram pill found at the scene of an overdose; he literally found 20 different ingredients contained in the pill, including fentanyl.
“You may think you’re buying Oxy on the streets or from the web, but there’s no way to know what’s inside that pill,” said U.S. Attorney Robinson. “With every pill you purchase illicitly on the streets or through the web, and consume, you are gambling with your life. With every pill, you are making a potentially life-changing decision. Because if you end up with a tainted dose, you are done. You leave children behind, your parents behind, your spouses behind.”
The law enforcement community has taken this problem very seriously and developed a multi-level strategy that involves a number of approaches from different disciplines.
-The U.S. Attorney’s Office and its partners created a local Fentanyl Working Group in April. This is a multi-dimensional group that includes local, state and federal investigative agencies, toxicologists, the Medical Examiner’s Office, DEA Lab Chemists, first responders, plus local, county and federal prosecutors. This synergistic multi-disciplinary collaboration is a significant step in working together to promote streamlined investigations.
The Fentanyl Working Group held an educational Fentanyl Forum on June 14 where more than 260 local and federal law enforcement officers 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. A second Fentanyl Forum is scheduled on November 28, 2017.
The Fentanyl Working Group is also committed to arming the community and first responders with the important information they need to stay safe. Last week, for example, our office educated East County staff who work with Drug Endangered Children on fentanyl dangers, the importance of Naloxone, and available county resources.
The U.S. Attorney’s Office and District Attorney’s Office are working closely with the Medical Examiner’s Office on overdose cases involving fentanyl or carfentanil to trace the origin of these deadly substances and build possible murder cases against suppliers. The Working Group is advising law enforcement officers who respond to overdose cases to carry Naloxone and to investigate these situations as possible murder cases.
People who need help with mental health including alcohol or drug abuse, suicide prevention, medication needs, and more can call the San Diego County Crisis line at 888-724-7240. It’s open seven days a week, 24 hours a day.
The following public officials are attending today’s press conference and are available for one-on-one interviews at the event’s conclusion:
Acting U.S. Attorney Alana Robinson
San Diego County District Attorney Summer Stephan
Homeland Security Investigations Special Agent in Charge David Shaw
Pete Flores, Director of Field Operations, San Diego, U.S. Customs and Border Protection
San Diego Police Chief Shelley Zimmerman
San Diego County Sheriff’s Commander Dave Moss
Acting Assistant Special Agent in Charge Adam Steiner, IRS Criminal Investigation
DEA Lab Director James Malone
Steven Campman, Chief Deputy Medical Examiner, San Diego County Department of the Medical Examiner
Assistant Inspector in Charge Eric Shen, US Postal Inspection Service
Postal Inspector Mark Hallisey, San Diego Field Office
Fentanyl Powerpoint PresentationRecruiter of Drug Traffickers and Alien SmugglersRead the Press Release
For Further Information, Contact: Assistant U.S. Attorney Lara A. Stingley (619)546-8403 or Assistant U.S. Attorney Joseph J.M. Orabona (619)546-7951
NEWS RELEASE SUMMARY – September 22, 2017
SAN DIEGO – Alexander David Faudoa, a recruiter of drug traffickers and alien smugglers from Imperial County, was sentenced in federal court today to 70 months in prison for conspiring to distribute cocaine and smuggle aliens.
According to court records, Faudoa was responsible for the recruitment of drivers to transport undocumented aliens and narcotics from Mexico to locations in the United States, including California, Colorado, Kansas, and North Carolina. Faudoa communicated with his co-conspirators in Mexico and the United States in order to complete these crimes.
For example, Faudoa admitted that between June and July 2016, he coordinated the distribution of approximately 2.92 kilograms of cocaine between Kansas and California. Faudoa also admitted that in December 2016, he coordinated two separate events involving the transportation and harboring within the United States of approximately 19 undocumented aliens who had been successfully smuggled across the U.S./Mexico border in the Southern District of California. Each of these undocumented aliens was paying between $3,000 and $7,500 per person to be smuggled into the United States and transported to their final destination. Faudoa also admitted that he agreed to pay the drivers who were transporting the undocumented aliens a nominal fee – such as $400 to transport five undocumented aliens to their destination inside the United States.
The investigation was led by the Federal Bureau of Investigation with the assistance of U.S. Border Patrol. On March 1, 2017, a complaint was filed against Faudoa and an arrest warrant was issued. Faudoa was arrested on March 17, 2017 attempting to enter the United States from Mexico through the Calexico, California, Port of Entry. Faudoa was taken into custody, where he has remained for the pendency of this case.
Faudoa was sentenced today by U.S. District Judge Roger T. Benitez for one count of conspiracy to distribute cocaine and one count of conspiracy to commit alien smuggling.
Acting United States Attorney Alana W. Robinson said, “This defendant directed a vast network of drug and people smugglers across the country, and he did so audaciously and without regard for the well-being of his customers. This sentence means fewer people will be smuggled at great risk to their own safety, and fewer deadly narcotics on our streets.”
Acting United States Attorney Alana W. Robinson said, “This defendant directed a vast network of drug and people smugglers across the country, and he did so audaciously and without regard for the well-being of his customers. This substantial sentence will result in fewer people being smuggled at great risk to their own safety, and fewer deadly narcotics in the marketplace to harm our communities.”
FBI Special Agent in Charge Eric S. Birnbaum said, “Alexander David Faudoa played a key role in an organization trafficking in illegal drugs and people. Today's sentencing demonstrates how the FBI, in working with our law enforcement partners in the Imperial Valley, target and dismantle those trafficking organizations that threaten the safety and security of our nation.”
U.S. Border Patrol Chief Anthony Porvaznik stated, “United States Border Patrol agents enthusiastically work with all law enforcement partners to secure our nation and provide safety for everyone in our communities. The combination of the Border Patrol agents, Federal Bureau of Investigation and U.S. Attorney’s Office efforts in this case are an example of truly professional work to enforce our laws and enable positive outcomes.”
DEFENDANT Criminal Case No. 17CR0923-BEN
Alexander David Faudoa Age: 27 Citizenship: United States
CHARGES THAT FAUDOA WAS SENTENCED ON:
Counts 1 – Conspiracy to Distribute Cocaine (21 U.S.C. §§ 841(a)(1) and 846)
Maximum Penalties: mandatory minimum of 5 years in prison; maximum sentence of 40 years in prison; maximum fine of $250,000; maximum term of supervised release of 3 years
Count 2 – Conspiracy to Commit Alien Smuggling (18 U.S.C. § 371)
Maximum Penalties: maximum sentence of 5 years in prison; maximum fine of $250,000; maximum term of supervised release of 3 years
INVESTIGATING AGENCIES
Federal Bureau of Investigation
U.S. Border Patrol
Federal Jury Convicts Former Substitute Teacher and Private Tutor of Distribution, Receipt and Possession of Child PornographyRead the Press Release
Assistant U. S. Attorneys Alessandra P. Serano (619) 546-8104 or Connie V. Wu (619) 546-8592
NEWS RELEASE SUMMARY – September 21, 2017
SAN DIEGO – A federal jury yesterday convicted Marlin Lee Gougher, a former substitute teacher in the Temecula School District and private tutor, of three counts of distribution, receipt and possession of child pornography.
Gougher possessed two laptop computers with over 300 videos of child pornography, some of which depicted children as young as four years of age. The FBI executed the search warrant of his Oceanside apartment in January 2013.
Gougher, who elected to appear in court wearing a prison issued orange jumpsuit, testified on his own behalf. However, all of the testimony was stricken by United States District Court Judge William Q. Hayes as being non-responsive to any question posed.
“The jury has recognized the defendant for who he is – every parent’s nightmare,” said Acting U.S. Attorney Alana W. Robinson. “This trusted teacher and tutor with direct access to children was exploiting young victims in the worst way. I consider protecting the well-being of children to be our highest calling as prosecutors.”
“Each image Mr. Gougher possessed represented the victimization of a child. This case is particularly disturbing given the defendant’s former position as a teacher and tutor.” said FBI Special Agent in Charge Eric S. Birnbaum. “We hope this jury conviction sends a clear message to anyone involved in the online sexual exploitation of a child: the FBI will not tolerate the victimization and destruction of our children’s future and will remain vigilant and committed to removing sexual predators from our children’s lives.”
DEFENDANT Case Number 14cr0635-WQH
Marlin Lee Gougher Age: 59 Oceanside, CA
SUMMARY OF CHARGES
Distribution and Receipt of Images of Minors Engaged in Sexually Explicit Conduct – Title 18, U.S.C., Section 2252(a)(2)
Maximum penalty: 20 years’ imprisonment with a mandatory minimum sentence of 5 years. Lifetime of supervised release
Possession of Images of Minors Engaged in Sexually Explicit Conduct – Title 18, U.S.C., Section 2252(a)(4)
Maximum penalty: 20 years’ imprisonment. Lifetime of supervised release
AGENCY
Federal Bureau of Investigation
Compliance Officer Convicted of Perjury in Investigation of Illegal DumpingRead the Press Release
NEWS RELEASE SUMMARY – September 21, 2017
Assistant U.S. Attorney Melanie K. Pierson (619) 546-7976
SAN DIEGO – Ronald Fabor, the Operations Safety and Compliance Manager of Diamond Environmental Services, was convicted by a federal jury yesterday of two counts of perjury relating to his testimony before a grand jury.
The grand jury investigation involved allegations that Diamond had unlawfully discharged trucked portable toilet waste into municipal sewer systems at their facilities in violation of federal law. The trial jury found that Fabor falsely testified that the first time he learned that individuals at Diamond were dumping sewage into the municipal sewers (rather than taking it to the designated locations) was the date that federal search warrants were executed at the Diamond locations in San Diego and San Marcos. The jury also convicted Fabor of falsely testifying that he had never personally observed Diamond trucks connected by hoses to the illegal sewer connections at the Diamond facilities.
Fabor was ordered to appear on January 8, 2018,at 9:00 am before the U.S. District Judge Roger T. Benitez for sentencing.
In a related case (17cr1305-BEN), on June 1, 2017, Diamond Environmental Services LP pled guilty to mail fraud, for defrauding various municipalities of revenue relating to the fees for disposal avoided by the unlawful discharges. On that same date, diamond owner Eric De Jong pled guilty to conspiring to violate the Clean Water Act for his role in the dumping. Earlier, on May 24, 2017, Diamond Chief Operating Officer Warren Van Dam had also pled guilty to participating in the same conspiracy. Diamond, De Jong and Van Dam are scheduled to be sentenced by U.S. District Court Judge Benitez on November 13, 2017, at 9:00 am
“Mr. Fabor delivered false testimony to a grand jury about illegal pollution that put public health and safety at risk,” said Jay M. Green, Special Agent-in-Charge of EPA’s criminal enforcement program in California. “Providing honest testimony is a fundamental necessity of our legal system and is critical to EPA's ability to protect public health and the environment.”
DEFENDANT Criminal Case No 17cr1064-BEN
Ronald B. Fabor Age: 55
San Marcos, California
SUMMARY OF CHARGES
Perjury, 18 U.S.C. § 1621
Maximum penalty: 5 years’ prison and/or a fine of $250,000
AGENCIES
Federal Bureau of Investigation
U.S. Environmental Protection Agency, Criminal Investigation Division
Second Individual Charged with Smuggling Tiger CubRead the Press Release
Assistant U.S. Attorneys Melanie K. Pierson (619) 546-7976
and Michelle L. Wasserman (619) 546-8431
NEWS RELEASE SUMMARY – September 18, 2017
SAN DIEGO – A second man, Perris resident Eriberto Paniagua, has been charged in the smuggling of a Bengal tiger cub into the United States from Mexico on August 23, 2017.
Paniagua, who allegedly told officials at the Otay Mesa Port of Entry that the Bengal tiger cub at his feet was merely a “cat,” was indicted by a federal grand jury and made his first court appearance today.
According to the indictment unsealed today, Paniagua conspired with the driver of the car, Luis Valencia, and others to knowingly import a tiger cub into the United States. Both defendants are charged with one count of conspiracy and one count of smuggling contrary to law.
All species of tigers are listed as endangered under the Endangered Species Act, and are protected under Appendix I of the Convention on International Trade in Endangered Species. To legally import an endangered species into the United States requires a permit from the U.S. Fish & Wildlife Service, and the importation must be accompanied by a Declaration Form 3-177 filed with Fish & Wildlife.
The Bengal tiger (Panthera tigris tigris) is the most populous subspecies of tiger. The Bengal tiger is native to India, Bangladesh, Nepal and Bhutan. According to the World Tiger Recovery Project, there are only 2,500 wild specimens on earth and the population of Bengal tigers is decreasing.
During today’s arraignment, Paniagua was released on a $25,000 personal surety bond and ordered to appear for a motion hearing/trial setting October 16, 2017 at 2:00 pm before U.S. District Judge Anthony J. Battaglia.
DEFENDANTS Criminal Case No. 17CR2856-AJB
Luis Eudoro Valencia Age: 18 Perris, California
Eriberto Paniagua Age: 21 Perris, California
SUMMARY OF CHARGES
Conspiracy 18 U.S.C. § 371
Maximum penalty: 5 years’ prison, fine of $250,000
Smuggling/Importation Contrary to Law, 18 U.S.C. § 545
Maximum penalty: 20 years’ prison, fine of $250,000, or twice the gross gain or loss caused by the offense, restitution, forfeiture of proceeds generated from the, five years of supervised release.
AGENCIES
U.S. Fish & Wildlife Service
Homeland Security Investigations
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
San Diego Finance Executive and Real Estate Broker Charged with $50 Million FraudRead the Press Release
Assistant U.S. Attorneys Emily W. Allen (619) 546-9738 and Andrew P. Young (619) 546-7981
NEWS RELEASE SUMMARY – September 19, 2017
SAN DIEGO – Financial executive Peter Cash Doye and notary public and real estate broker Raquel Reid were indicted today for their alleged roles in a massive scheme that generated nearly $50 million in fraudulently-obtained loan proceeds.
According to the indictment, the defendants defrauded lenders into making enormous loans against four multi-million dollar mansions in La Jolla and Del Mar, then used forged documents to make it appear that the loans had been paid off – thereby enabling them to secure additional loans from new lenders who believed the mansions were owned “free and clear.”
According to the indictment, Doye, a senior executive at the real estate investment firm known both as Conix, Inc. and Variant Commercial Real Estate (“VCRE”), negotiated the financing from unsuspecting lenders and investors based on a host of lies about the collateral used to secure the loans. To pull of the scam, Doye, Reid, and their co-conspirators created forged real estate lien “releases” and recorded fraudulent records at the San Diego County Recorder’s Office, wreaking havoc on the chain of title for these homes. Reid notarized the forged documents, helping to make the fraudulent paperwork appear authentic.
Doye’s business partner Courtland Gettel and Arizona attorney Jeffrey Greenberg have each pleaded guilty to participating in the scheme. According to their plea agreements, Gettel was the owner of Conix and VCRE, which refurbished single-family homes, purchased distressed debt, and purchased and refurbished commercial real estate projects.
As part of his guilty plea in 2016, Gettel admitted that he and Doye acquired the high-end homes in La Jolla and Del Mar by claiming they would be used as luxury rentals and investment properties—although in fact, Gettel and Doye lived in the properties along with their families. When they needed money to fund other business deals, Gettel and Doye began negotiating with new lenders, pretending that the first loans never existed or had already been paid off. Greenberg admitted that he used his expertise as a lawyer to generate and record fraudulent records, making it appear that prior loans were paid off, to help close the fraudulent deals.
In late 2014, the lenders uncovered the fraud, and began to discover that their secured interests in the properties were worthless. In response to questions from these lenders, Doye, Reid and Gettel agreed to falsely deny knowing anything about the fraudulent loans, and created yet more fraudulent documents to cover their tracks. For example, Reid destroyed her notary book and cut up her notary stamp, and then falsely reported to the California Secretary of State that it had been lost.
But the group defaulted on their obligations to repay the loans, leaving the lenders to dispute the validity of their interests and resulting in tens of millions of dollars in losses from unpaid loans. As part of their pleas, Gettel and Greenberg must forfeit the proceeds they stole from the various lenders and pay restitution to the victims. Doye and Reid were charged with criminal forfeiture as part of the indictment.
Gettel has also admitted that after his guilty plea and while he was awaiting sentencing, he arranged even more fraudulent real estate transactions. He has agreed to recommend a correspondingly higher sentence as a result of his ongoing fraud. Gettel is scheduled to be sentenced before U.S. District Judge William Q. Hayes on October 17, 2017, at 10:00 am. Greenberg was disbarred from practicing law in Arizona on October 6, 2016. Greenberg is scheduled to be sentenced before U.S. District Judge William Q. Hayes on October 2, 2017, at 9:00 am.
Doye and Reid are expected to make their initial appearances before U.S. Magistrate Judge Karen S. Crawford on September 21, 2017 at 2:00 pm.
*The charges and allegations contained in the indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.
DEFENDANTS
Peter Cash Doye Age: 41 San Diego, CA
Raquel Reid Age: 38 San Diego, CA
CHARGES
Count One (both defendants): Wire and Mail Fraud Conspiracy, in violation of 18 U.S.C. § 1349
Counts Two through Six (Doye only; both defendants as to Count Three): Wire Fraud, in violation of 18 U.S.C. § 1343
Counts Seven through Nine (Doye only as to Count Seven, both defendants as to Counts Eight and Nine): Mail Fraud, in violation of 18 U.S.C. § 1341
Maximum Penalties per count: 20 years’ imprisonment, $250,000 fine, $100 special assessment, restitution
Counts Ten and Eleven (both defendants): Aggravated Identity Theft, in violation of 18 U.S.C. § 1028A
Maximum Penalties: mandatory 2 years’ imprisonment, consecutive to any other term of imprisonment, $250,000 fine, $100 special assessment, restitution.
Count Twelve (Reid only): False Statements to Federal Agents, in violation of 18 U.S.C. § 1028A
Maximum Penalties: 5 years’ imprisonment, $250,000 fine, $100 special assessment, restitution.
DEFENDANTS PREVIOUSLY CHARGED
Jeffrey Greenberg, 16CR1076-WQH and 1077-WQH Age: 67 Tucson, AZ
Courtland Gettel, 16CR1099-WQH Age: 43 Coronado, CA
Wire Fraud Conspiracy, in violation of 18 U.S.C. § 1349
Maximum Penalties: 20 years’ imprisonment, $250,000 fine, $100 special assessment, restitution.
AGENCIES
Federal Bureau of Investigation
Record Maritime Cocaine and Heroin Seizures in FY 2017 Include San Diego-Based CaseRead the Press Release
Special Assistant U.S. Attorney Ari Fitzwater (619) 546-8756, Assistant U. S. Attorney Joshua Jones (619) 546-9744, Assistant U. S. Attorney Connie Wu (619) 546-8592
NEWS RELEASE SUMMARY – September 20, 2017
SAN DIEGO – The U.S. Coast Guard’s announcement today that it has intercepted a record amount of illicit drugs in the Eastern Pacific Ocean in FY2017 includes a San Diego-based prosecution involving more than 6,000 pounds of cocaine confiscated from a low-profile vessel.
The U.S. Coast Guard encountered the vessel in international waters, approximately 450 nautical miles southwest of the Guatemala/El Salvador border on August 14 and detained four individuals following discovery of the cocaine. Low-profile vessels are designed to ride low in the water to avoid detection.
A federal grand jury returned an indictment in the Southern District of California on September 1, charging four men with possession of cocaine with intent to distribute onboard a vessel. According to the indictment, approximately 6,349.20 pounds of cocaine (totaling over three tons) was confiscated from the vessel. The defendants remain in custody pending trial. The defendants will appear for a motion hearing and trial setting before U.S. District Judge John A. Houston on October 16.
At today’s event attended by Attorney General Jeff Sessions, the 140-person crew of the Coastguard Cutter Stratton offloaded 50,000 pounds of cocaine and heroin - with an estimated street value of more than $679 million – that was seized in the Eastern Pacific Ocean since August 2.
“By preventing overdoses and stopping new addictions before they start, enforcing our drug laws saves lives,” Attorney General Jeff Sessions said. “This record-breaking year by our Coast Guard saw the arrest of more than 500 suspected drug traffickers and kept nearly half a million pounds of dangerous drugs from getting to our streets--and ultimately to our neighbors, friends, and families. I commend every service member who has helped us in our mission to keep the American people safe, and I thank them for this indispensable contribution to public safety.”
“The seizure of this cocaine means tens of thousands of pounds won’t make it to our communities and hundreds of millions of dollars won’t make it into cartel coffers,” said Acting U.S. Attorney Alana Robinson. “To drug traffickers who may think they are invisible in the middle of what seems to be a vast, empty ocean: You are not alone. We are doing everything we can to prevent you from using the high seas as your personal freeway.”
The Coast Guard has interdicted several low-profile vessels since June. Low-profile vessels are specifically designed for smuggling illicit cargo such as drugs, weapons and cash. These smuggling vessels have multiple outboard motors to allow them to travel at high speeds and are painted to blend with the water to avoid detection from military and law enforcement authorities operating in the region.
This case is the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF) a partnership that brings together the combined expertise and unique abilities of federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, dismantle and prosecute high level members of drug trafficking, weapons trafficking and money laundering organizations and enterprises.
DEFENDANTS Case Number 17cr2603
Edinson Elias Castillo-Bustos Age: 56 Colombia
Redis Mina-Canga Age: 50 Colombia
Edgar Anibal Rojas-Vanegas Age: 31 Guatemala
Jose Sebastian Ardila-Meza Age: 48 Colombia
SUMMARY OF CHARGES
Conspiracy to Distribute Cocaine on Board a Vessel – Title 46, U.S.C., Sections 70503 and 70506(b)
Maximum penalty: Life in prison and $10,000,000 fine
Possession of Cocaine with Intent to Distribute on Board a Vessel – Title 46, U.S.C., Section 70503
Maximum penalty: Life in prison and $10,000,000 fine
AGENCY
Drug Enforcement Administration
United States Coast Guard
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
San Diego-based Drug Trafficking Cell DismantledRead the Press Release
Assistant U. S. Attorneys Joshua Mellor (619) 546-9733 and Francis A. DiGiacco (619) 546-6771
NEWS RELEASE SUMMARY – September 14, 2017
SAN DIEGO – Five alleged members of a San Diego-based drug trafficking cell, including alleged leader Jaime Ivan Mendez-Maciel, were arrested yesterday and made their first appearances in federal court yesterday and today.
According to the indictment and search warrants, Mendez-Maciel operated a series of drug stash houses in San Diego and coordinated the importation and distribution of hundreds of pounds of methamphetamine and cocaine through the Southwest Border destined for various cities throughout the United States.
Drug Enforcement Administration agents began investigating the drug trafficking organization cell in October of 2016. Throughout the investigation, DEA agents seized over a hundred pounds of methamphetamine, fifty pounds of cocaine, and several assault rifles and pistols.
Mendez-Maciel, Juan Garcia and Nallely Tanairi Garcia were arraigned on Wednesday before U.S. Magistrate Judge William Gallo. Armando Martin Lopez-Estrada and Daniel Bravo were arraigned today. The defendants are scheduled to appear for a detention hearing on Friday, September 15 at 10 a.m. before Judge Gallo.
This case is the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership that brings together the combined expertise and unique abilities of federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, dismantle and prosecute high-level members of drug trafficking, weapons trafficking and money laundering organizations and enterprises.
DEFENDANTS Case Numbers: 17CR2726-LAB and 17CR2727-LAB
Jamie Ivan Mendez-Maciel Age: 41 San Diego
Jesse Cortes – fugitive Age: 20 San Diego
Juan Garcia Age: 19 San Diego
Nallely Tanairi Garcia Age: 25 San Diego
Armando Martin Lopez-Estrada Age: 31 San Diego
Daniel Bravo Age: 36 San Diego
SUMMARY OF CHARGES
Title 21, U.S.C., Secs. 841(a)(1) and 846 - Conspiracy to Distribute Methamphetamine and Cocaine;
Title 21, U.S.C., Secs. 952, 960, and 963 - Conspiracy to Import Methamphetamine and Cocaine;
Title 21, U.S.C., Sec. 841(a)(1) - Distribution of Methamphetamine;
Title 21, U.S.C., Sec. 952 and 960 - Importation of Methamphetamine and Cocaine;
Title 21, U.S.C., Sec. 841(a)(1) - Possession with Intent to Distribute Methamphetamine and Cocaine
AGENCY
Federal Bureau of Investigation
Homeland Security Investigations
Customs and Border Protection
Internal Revenue Service
San Diego Police Department
California Highway Patrol
Alcohol, Tobacco, and Firearms
United States Marshals 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.
Alleged Heroin Cell Leader ExtraditedRead the Press Release
For Further Information, Contact: Assistant U.S. Attorney Adam Braverman (619) 546-6717
NEWS RELEASE SUMMARY – September 13, 2017
SAN DIEGO – Jose Rafael Camacho-Ontiveros, the alleged leader of a Mexican heroin trafficking organization, was extradited to the United States by Mexico yesterday and made his first appearance in federal court this afternoon.
A federal grand jury in San Diego returned an indictment on October 14, 2011, charging Camacho-Ontiveros and 11 other alleged members of the Mexican heroin trafficking organization. Camacho-Ontiveros was charged with Engaging in a Continuing Criminal Enterprise, Conspiracy to Distribute Heroin and Conspiracy to Commit Money Laundering. That same day, the Clerk of the Court issued a sealed warrant for his arrest. Six defendants remain fugitives.
In February 2010, Drug Enforcement Administration agents began investigating a Mexican drug trafficking organization that smuggled white heroin across the Southwest Border destined for various cities along the East Coast. The organization’s preferred smuggling method was to place the heroin in the soles of its couriers’ shoes. In total, DEA agents intercepted thirty-eight telephones during this year-long investigation resulting in fourteen heroin and money seizures throughout the United States.
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.
Acting United States Attorney Alana Robinson stated, “Greedy drug traffickers are saturating our country with heroin, and the results are devastating. We will continue to aggressively pursue those responsible for the opioid crisis in the United States.”
“This country is in the midst of the worst opioid epidemic in history,” says DEA San Diego Special Agent in Charge William R. Sherman. “This case highlights DEA’s commitment to battling against the people who created this epidemic and have done so out of simple greed.”
Camacho-Ontiveros was flown by the United States Marshals Service from Mexico City to San Diego on September 12, 2017. He was arraigned on Wednesday, September 13, 2017, before U.S. Magistrate Judge William Gallo. The defendant is scheduled to appear for a detention hearing on Friday, September 15 at 9:45 a.m. before Judge Gallo.
DEFENDANT Criminal Case No. 11-CR-4701-DMS
Jose Rafael Camacho-Ontiveros, aka Rafa
SUMMARY OF CHARGES
Count 1: Title 21, United States Code, Section 848(a) – Engaging in a Continuing Criminal Enterprise
Count 2: Title 21, United States Code, Sections 841(a)(1) and 846 – Conspiracy to Distribute Heroin
Count 3: Title 18, United States Code, Sections 1956(a)(2)(A) and (h) – Conspiracy to Commit Money
Laundering
INVESTIGATING AGENCIES
Drug Enforcement Administration
Department of Justice, Organized Crime Drug Enforcement Task Forces
Department of Justice, Office of Enforcement Operations
Department of Justice, Office of International Affairs
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Former Manhattan Beach Executive and SEC Attorney Sentenced to JailRead the Press Release
Assistant U. S. Attorney Rebecca S. Kanter (619) 546-7304
NEWS RELEASE SUMMARY – September 11, 2017
LOS ANGELES – A Manhattan Beach attorney was sentenced today to nine months in federal custody after being convicted at trial for embezzling over a quarter-million dollars from his former employer, MWRC Internet Sales LLC (“MWRC”), and filing false tax returns. James (“Jim”) Miller, a former regional counsel at the Securities Exchange Commission’s Los Angeles office and former real estate investor, was convicted in June of five felony counts of wire fraud and four counts of filing a false tax return. In addition to serving nine months in jail, the sentence imposed today by Judge George Wu requires Miller to pay the Internal Revenue Service $64,329 in restitution, $900 special assessment, and two years of supervised release.
According to the evidence presented at trial, James Miller was the president and co-managing partner of MWRC Internet Sales LLC, an Internet sales company that was founded in approximately 2000 in order to provide manufacturers and local brick-and-mortar retailers a way to share in the profit from online sales. As part of his duties, Miller had check signing authority for MWRC’s business bank account. From January 2009 through October 2012, Miller wrote unauthorized checks to himself, embezzling more than $300,000 from the company. Miller used this money to pay for personal expenses and debts, and did not report it on his personal tax returns for 2009 through 2012, causing a tax loss of approximately $64,000.
According to the evidence at trial, Miller’s conduct of writing unauthorized checks was first revealed when Miller and Russell Lesser, Miller’s co-managing partner and MWRC’s primary investor, were preparing annual financial statements in March 2011. Evidence at trial revealed that Lesser allowed Miller, his long-time friend, to continue as co-managing partner of MWRC based on Miller’s promise to never engage in the conduct again and to pay MWRC back the stolen funds. Lesser, who had been loaning Miller $3,000 per month to help Miller in a financially difficult time, continued to provide Miller the personal loan of $3,000 per month, and directed Miller to use that money to start repaying MWRC. Evidence at trial showed that although Miller did stop embezzling money for two months, he began writing checks to himself again in May of 2011 despite his promise to Lesser not to do so.
The evidence at trial showed that although Miller did repay MWRC $95,500 between 2009 and 2012 during the course of his embezzlement, he received from Lesser personal loans totaling $108,000 during the same time period. Evidence at trial also showed that Miller falsified MWRC’s check register to hide his criminal conduct. Specifically, evidence at trial showed that Miller made numerous false entries on the check register indicating that checks were transfers to another MWRC bank account (the most common use of the account) when in fact the checks were written to Miller himself and deposited in his own personal bank account.
The Court rejected Miller’s request for a sentence of probation based on his community service, noting that “the commission of some good works is not a get out of jail card.”
The case was prosecuted by Southern District of California Assistant United States Attorney Rebecca Kanter, acting as a Special Attorney, and Trial Attorney Benjamin Weir of the Tax Division.
Southern District of California Acting United States Attorney Alana W. Robinson, stated that “This case was aggravated by the fact that Miller was not only an attorney, but a former regional counsel for the Securities Exchange Commission. Given the defendant’s duty of candor, his numerous outlandish claims during his trial testimony makes this crime particularly offensive. Corporate executives such a Miller should understand that stealing from their employer is not “merely a business dispute,” but serious felony conduct that will be investigated and prosecuted.
“Defendant Miller abused his position of trust and continuously lied to his colleagues for personal gain,” said Danny Kennedy, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The FBI and our federal partners will continue to work together to hold accountable offenders who commit major financial crimes that impact individual businesses and taxpayers.”
“Miller allowed greed to color his judgment and now he will be paying the price,” stated IRS Criminal Investigation’s Special Agent in Charge R. Damon Rowe. “Today’s sentencing reinforces our commitment to every American taxpayer to vigorously investigate individuals who line their pockets with fraudulently obtained funds and then file fraudulent tax returns.”
DEFENDANT Case Number 14CR0471-GW
James Miller Age: 68 Manhattan Beach, CA
SUMMARY OF CHARGES
Wire Fraud – Title 18, U.S.C., Section 1343
False Statement on Tax Return – Title 26, U.S.C., Section 7206(1)
AGENCY
Federal Bureau of Investigation, Los Angeles Division
Internal Revenue Service, Criminal Investigations
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Former Deputy Chief of Staff at Special Operations Command, Pacific, Sentenced for Lying about his Relationship with Foreign Defense Contractor in Massive Navy Bribery InvestigationRead the Press Release
Assistant U.S. Attorneys Mark W. Pletcher (619) 546-9714 and Patrick Hovakimian (619) 546-9718
NEWS RELEASE SUMMARY – September 12, 2017
SAN DIEGO – A former U.S. Navy Commander was sentenced yesterday to 18 months in prison for lying to investigators to conceal his illicit decades-long relationship with Leonard Glenn Francis, the foreign defense contractor at the center of a colossal bribery and fraud scandal.
David Kapaun, former U.S. Navy Commander and later the civilian Deputy Chief of Staff at Special Operations Command, Pacific, at Camp Smith, Aiea, Hawaii, pleaded guilty to one count of making false statements on June 6, 2017, admitting that he lied on his security clearance application forms regarding his relationship with Francis, owner of Singapore-based Glenn Defense Marine Asia. The company provided ship husbanding services such as trash and sewage removal, food, water, security and fuel to U.S. Navy ships.
According to the government’s sentencing memo, Kapaun received at least as much as $50,000 in illicit goods and services from Francis since 2001. The long history between the two men involved many late nights of partying at nightclubs and karaoke bars, fine dining, and prostitutes – all paid for by Francis. For his part, Kapaun performed numerous and varied official acts for GDMA, including providing classified schedules of U.S. Navy ship port visits. Acknowledging the staggering breadth and duration of Kapaun’s activity on GDMA’s behalf, Francis referred to him as GDMA’s “comms center, strategist, and ops center.”
Conscious of the illegality of his actions, Kapaun was always careful to conceal the nature of his relationship with and his receipt of things of value from Francis. Kapaun, for example, created a fake name, Dave McIntosh, and a sham email address to disguise his identity and avoid the detection of law enforcement. Kapaun and Francis also used coded terminology when discussing their illicit activities.
In addition to the 18 months in prison, Kapaun was also sentenced to pay a fine in the amounts of $25,000, as well as restitution to the U.S. Navy in the amount of $50,000 and perform 200 hours of community service work following his release.
“Today’s sentence underscores the breadth and scope of this unprecedented investigation,” said Acting U.S. Attorney Alana W. Robinson. “We will continue to investigate and prosecute all who greedily feather their own beds in dereliction of the obligations to the United States.”
Twenty-eight individuals, including 21 current and former Navy officials and five civilian defendants, plus GDMA, the corporation, have been charged so far as part of the massive fraud and bribery investigation. Nineteen of these defendants have pleaded guilty. Nine defendants await trial.
The Defense Criminal Investigative Service, Naval Criminal Investigative Service and the Defense Contract Audit Agency are investigating. Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California, Assistant U.S. Attorney Ken Sorenson of the District of Hawaii, and Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section are prosecuting the case.
Anyone with information relating to fraud or corruption should contact the NCIS anonymous tip line at www.ncis.navy.mil or the DOD Hotline at www.dodig.mil/hotline, or call (800) 424-9098.
DEFENDANT Case Number: CR-1700333-SOM
David Michael Kapaun Age 58 Wahiawa, HI
SUMMARY OF CHARGES
False Statements, in violation of 18 U.S.C. § 1001
Maximum Penalty: Five years in prison
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
Defense Contract Audit Agency
Disbarred Attorney Pleads Guilty to Concealing $1.5 Million in Bankruptcy Assets and Evading $6 Million in TaxesRead the Press Release
Assistant U. S. Attorneys Michael J. Heyman (619) 546-9615 and Joseph J.M. Orabona (619) 546-7951
NEWS RELEASE SUMMARY – September 11, 2017
SAN DIEGO – J. Douglass Jennings, a practicing accountant and disbarred California attorney, pleaded guilty today to one count of Bankruptcy Fraud (Concealment of Assets) and one count of Tax Evasion.
Mr. Jennings, a Certified Public Accountant (CPA) and former attorney, 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 his plea agreement, Mr. Jennings admitted that, beginning in January 2010, he devised a scheme to defraud his unsecured creditors by concealing numerous assets, and then 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, in furtherance of that scheme. Mr. Jennings further admitted that, in his bankruptcy filings, he defrauded his unsecured creditors by intentionally concealing the following assets and income valued at nearly $1.5 million, including:
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A stock interest in a real-estate venture valued at approximately $1 million;
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A 53.2 foot luxury yacht known as the “Sea Eagle” valued at approximately $150,000; and
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Antique silver items valued at approximately $165,139.
During the pendency of the bankruptcy case, Mr. Jennings additionally obtained salary payments and other benefits prohibited by the Bankruptcy Court in the amount of $138,694.
In total, Mr. Jennings caused unsecured creditors to lose $1,453,833 as a result of his bankruptcy fraud.
Mr. Jennings also pleaded guilty to evasion of tax payments. From August 2011 through April 2013, Mr. Jennings had a tax due and owing to the Internal Revenue Service (“IRS”) for calendar years 2005 through 2009 totaling approximately $2,852,545. He originally agreed to pay this amount to the IRS. Mr. Jennings also consented to pay a civil fraud penalty in the amount of $2,031,837, and interest in the amount of $1,042,711. Notwithstanding this agreement, however, Mr. Jennings attempted to evade and defeat the payment of taxes, penalties, and interest through his concealment of assets in his bankruptcy case. As a result, Mr. Jennings pled guilty to evasion of tax payments and admitted that a criminal judgment should be entered against him in the amount of $5,927,093.
On August 16, 2017, Mr. Jennings’ wife, Peggy Jennings, pled guilty to bank fraud in a related action, United States v. Peggy L. Jennings, Case No. 17CR2306-BEN. Mrs. Jennings admitted as part of her scheme to defraud the bank that she 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. Pursuant to her plea agreement, Mrs. Jennings has agreed to pay restitution to the bank in the amount of $145,481.71 and to pay a fine in the amount of $50,000. Mrs. Jennings is scheduled to be sentenced before the Honorable Roger T. Benitez on November 13, 2017.
Following Mr. Jennings’ guilty plea to the bankruptcy and tax fraud charges, the Court set a sentencing hearing before U.S. District Judge Roger T. Benitez on December 11, 2017.
“Concealing assets compromises the very core of our bankruptcy system, which is designed to protect both debtors and creditors,” stated Acting U.S. Attorney Alana W. Robinson. “A bankruptcy petitioner who fails to make a full good faith disclosure risks a variety of serious consequences, including criminal prosecution.”
“Bankruptcy fraud threatens the integrity of the bankruptcy system, as well as public confidence in that system,” stated Tiffany L. Carroll, Acting U.S. Trustee for the Southern District of California, Hawaii, Guam, and the Northern Mariana Islands (Region 15). “I am grateful to Acting U.S. Attorney Robinson, our law enforcement partners, and the chapter 7 bankruptcy trustee for their commitment to combating bankruptcy-related crimes.” 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 an additional office in Honolulu.
“Bankruptcy fraud harms creditors and erodes confidence in the federal bankruptcy system,” commented FBI Special Agent in Charge Eric S. Birnbaum. “Truth must be at the core of any bankruptcy and individuals who hide their assets during bankruptcy cases are defrauding their creditors. The FBI will reveal the truth and in this case, exposed the concealment of more than $1.4 million in assets and income.”
“Mr. Jennings’ attempt to discharge nearly $6 million of tax debt through a fraudulent bankruptcy filing was a theft from the American public. It is a felony offense that carries severe consequences,” stated IRS Criminal Investigation’s Special Agent in Charge R. Damon Rowe. “IRS Criminal Investigation will continue to protect the integrity of the tax system by ensuring everyone pays their fair share.”
The criminal investigation involving Mr. and Mrs. Jennings arose out of a referral from the U.S. Trustee based upon findings from the Bankruptcy Court that Mr. and Mrs. Jennings engaged in fraud during their bankruptcy proceedings.
DEFENDANT Case Number 17CR2722-BEN
Douglass Jennings, Jr. Age: 72 Rancho Santa Fe, CA
SUMMARY OF CHARGES FOR J. DOUGLASS JENNINGS:
Bankruptcy Fraud – Title 18, U.S.C., Section 152(1)
Maximum penalty: 5 years’ imprisonment and $250,000 fine
Evasion of Tax Payment – Title, 26 U.S.C., Section 7201
Maximum penalty: 5 years’ imprisonment and $250,000 fine
DEFENDANT Case Number 17CR2306-BEN
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
Maximum penalty: 30 years’ imprisonment and $250,000 fine
AGENCIES
Federal Bureau of Investigation
Internal Revenue Service
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Brawley Man Pleads Guilty to Stealing More Than $250,000 from Local FarmRead the Press Release
Assistant U.S. Attorney Christine M. Ro (619)546-7937
NEWS RELEASE SUMMARY – September 11, 2017
Former bookkeeper Claude Theodore Riley pleaded guilty today to wire fraud and making a false tax return in a five-year scheme stealing from his employer, a local farm. Riley stole approximately $272,984.00 from his employer, filed fraudulent tax returns, and failed to file required employment tax returns resulting in a $1.5-million-dollar tax lien against the farm.
Riley served as the farm’s bookkeeper from 2010 to 2015, overseeing the farm’s entire annual budget. As the bookkeeper, Riley had access to the farm’s bank accounts, paychecks, and bookkeeping records. Riley forged certain IRS documents to hide his embezzlement from the employer. For his scheme, Riley made 148 transactions out of the employer’s bank account, fictitiously entered various vendors to be paid into the bookkeeping records, and generated checks made payable to himself.
“Defendant egregiously abused a sensitive position of trust when he stole more than $272,000 from an Imperial Valley farm and filed fraudulent tax returns,” stated Acting U.S. Attorney Alana W. Robinson. “I commend our federal and local law enforcement partners’ diligent efforts to obtain justice for this local farm, which is one of many that serve as the economic backbone of Imperial Valley.”
“Spanning more than five years, Mr. Riley stole funds by issuing unauthorized checks from his employer’s bank account and depositing them to his personal bank account,” stated R. Damon Rowe, Special Agent in Charge of IRS Criminal Investigation. “Our office will vigorously investigate individuals who line their pockets with fraudulently obtained funds and then file fraudulent tax returns.”
“The FBI is committed to uncovering fraud schemes that affect our community,” said FBI Special Agent in Charge Eric S. Birnbaum. “The financial stability of Imperial Valley’s agricultural businesses are essential to the local economy. Crimes that undercut the hard work of our Valley’s farming industry will not be tolerated.”
“This case is a great example of how local and federal law enforcement agencies can work together to protect and serve the community,” said Brawley Police Department Interim Chief of Police Kelly L. Brown. “The Brawley Police Department thanks the Federal Bureau of Investigations for their assistance.”
The farming industry is an important source of Imperial Valley’s economy and producer of agriculture for the nation. Imperial Valley is one of California’s top producers of agriculture, which generates income for local families in the Southern District of California.
DEFENDANT Criminal Case No. 17CR2721-BAS
Claude Theodore Riley Age: 56 Brawley, California
SUMMARY OF CHARGES
Wire Fraud – Title 18, U.S.C., Section 1343
Maximum penalty: 20 years’ imprisonment and $250,000 fine
Filing a False Tax Return – Title 26, U.S.C., Section 7206(1)
Maximum penalty: 3 years’ imprisonment and $250,000 fine
INVESTIGATING AGENCIES
Federal Bureau of Investigation, Imperial County Resident Agency
Internal Revenue Service, Criminal Investigation
Brawley Police Department
California Internet Sales Company President Sentenced to Prison for Embezzlement and False Tax ReturnsRead the Press Release
A Manhattan Beach, California resident was sentenced to nine months in prison for wire fraud and filing false tax returns, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Alana W. Robinson for the Southern District of California.
According to the evidence presented at trial, James Miller, a California attorney, was the president and managing partner of MWRC Internet Sales LLC, an online sales company. As part of his duties, Miller had check signing authority for the company’s business bank account. From January 2009 through October 2012, Miller wrote unauthorized checks to himself from MWRC’s account, embezzling more than $300,000. Miller used this money to pay for personal expenses and did not report it on his individual tax returns for 2009 through 2012, causing a tax loss of approximately $58,000.
In addition to the term of prison imposed, U.S. District Judge George Wu ordered Miller to serve two years of supervised release and to pay $64,329 in restitution to the Internal Revenue Service (IRS).
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Robinson commended special agents of FBI and IRS Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Rebecca Kanter and Trial Attorney Benjamin Weir of the Tax Division, who prosecuted the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Twenty-two Indicted in $20 Million Theft Ring at High-End Shopping MallsRead the Press Release
Assistant U. S. Attorney Stephen Wong (619) 546-9464
NEWS RELEASE SUMMARY – September 6, 2017
SAN DIEGO – A well-organized and often violent group of thieves has stolen more than $20 million worth of merchandise from high-end shopping malls here and around the country, according to an indictment unsealed today which charges 22 people.
A contingent of more than 250 officials from local, state and federal law enforcement agencies made 12 arrests today and searched three homes in Lemon Grove, Chula Vista and San Diego. Three defendants were already in custody; seven were fugitives as of 1 p.m. today. The defendants in custody are scheduled to make their first court appearances at 10 a.m. tomorrow before U.S. Magistrate Judge Barbara Lynn Major.
During searches today, agents confiscated approximately $30,000 in cash plus about a dozen large trash bags full of new clothing - with merchandise tags and security devices still attached - from retailers such as Victoria’s Secret, Hollister Co., Guess, Express and Abercrombie & Fitch, and brands such as Calvin Klein, Hurley, Armani, Adidas, Kenneth Cole and Puma. Agents also found piles of new Louis Vuitton shoes and boxes full of security sensors that had been removed from clothing.
The indictment describes how defendants from the San Diego area formed crews of thieves to steal merchandise from retail stores throughout the United States and transport the merchandise across state lines for sale in Mexico. The well-organized teams operated consistently for over a decade. The indictment describes how team leaders assigned each member a specific role, such as team leader, mule or blocker. Team leaders selected stores to target, scouted the stores, and choreographed the actions of other team members using cell phones and hand signals while Mules secreted the stolen merchandise out of stores in “booster bags,” which are shopping bags with metallic linings designed to defeat anti-theft sensors. Blockers prevented store employees from seeing the ongoing theft by obstructing their view with clothing, by distracting the employees, or by physically preventing the employees from responding.
When necessary, the teams used force against store employees, other customers, and law enforcement to escape. For example, the indictment alleges that in November 2009, defendant Sergio Manuel Montano Nava knocked over an infant in its stroller and injured the infant’s father to avoid being arrested for a theft at a Hollister store in Schaumburg, Illinois.
In November 2012, defendants Jose Damazo Herrera, Robin Macias and others drove vehicles through a crowd while fleeing a theft from a Hollister store in the Fashion Valley Mall in San Diego. The thefts alleged in the indictment typically resulted in losses of several thousand dollars in merchandise.
In March 2013, a defendant grabbed a loss prevention officer by the throat and threw her to the ground while running from a theft at Abercrombie & Fitch at the Plaza Bonita Mall in National City.
The indictment lists 38 thefts which occurred at locations around the country at various clothing stores, including Victoria’s Secret, Hollister Co., Abercrombie & Fitch, Banana Republic and Express in the California cities of Escondido, San Diego, National City, San Clemente, Ventura, Oxnard, Camarillo, City of Industry, Orange, Mission Viejo, Northridge, Canoga Park; and outside the state in Las Vegas, Nevada; Frederick, Maryland; Vancouver, Washington; and Schaumburg, Illinois.
The indictment said that on October 23, 2013, defendant Maria Angelica Mendez Valdivia had $482,275 worth of merchandise - stolen from at least 57 retailers - which was being transported to Mexico. The thieves sold the stolen merchandise to an alleged “fence,” defendant Sara Portilla, who is accused of selling the stolen merchandise from a store she operates in Tijuana.“The mall is supposed to be a safe place for families to shop, eat and enjoy themselves,” said Acting U.S. Attorney Alana Robinson. “Instead, a prolific and violent group of thieves has stolen millions of dollars in merchandise as well as peace of mind from mall employees and customers. With today’s action, we are protecting customers and businesses both physically and economically, and we are restoring and preserving the safety of our community gathering spots.”
“Homeland Security Investigations, together with its law enforcement partners, has worked tirelessly to investigate and ultimately dismantle this theft ring,” said David Shaw, special agent in charge of HSI San Diego. “Not only does organized retail crime have a major financial impact on businesses and consumers, but the brazen acts allegedly committed by these defendants also posed a very real threat to public safety. HSI is committed to holding individuals involved in this criminal activity accountable for their actions.”
“Crimes that cross jurisdictional lines can be challenging for any one agency to investigate,” said San Diego Police Chief Shelley Zimmerman. “It takes a partnership and commitment from agencies at all levels to collapse the most sophisticated crime rings that exist today. The collaboration we have here in San Diego between law enforcement agencies is second to none. I am so proud of the efforts in this complex case to bring these thieves to justice.”
DEFENDANTS Case Number 17cr2511-GPC
Sara Portilla Age: 39 San Diego, CA
Maria Angelica Mendez Age: 43 San Diego, CA
Jose Mora Age: 49 Oceanside, CA
Julio Gabriel Lopez Moreno Age: 41 Chula Vista, CA
Alejandro Madrinan Age: 43 San Diego, CA
Araceli Razo Age: 42 Imperial Beach, CA
*Eduardo Madrinan Age: 22 Lemon Grove, CA
*Carlos Gomez Daza Age: 32 San Diego, CA
Karina Yvette Saman Rojas Age: 29 San Diego, CA
Juan Manuel Juarez Herrera Age: 41 San Diego, CA
James Sanabria Age: 31 San Diego, CA
*Josue Antonio Damazo Herrera Age: 26 San Diego, CA
Jose Damazo Herrera Age: 28 San Diego, CA
Brandon Ramirez Salas Age: 22 Mexico
*Jesus Raymundo Razo Del Angel Age: 23 San Diego, CA
Jacob Palacios Age: 24 San Diego, CA
Robin Macias Age: 33 Chula Vista, CA
*Giovani Razo Alvarez Age: 33 San Diego, CA
*Adrian Razo Age: 29 Atlanta, Georgia
Sergio Manuel Montana Nava Age: 31 San Diego, CA
*Vanessa Medina Munguia Age: Unknown San Diego, CA
Adrian Ulices Reyna Rodriguez Age: 21 San Diego, CA
*Fugitive
SUMMARY OF CHARGES
Conspiracy to Transport stolen goods across state and international borders, – Title 18, U.S.C., Sections 371 and 2314
Maximum penalty: Five years in prison and $250,000 fine
Receiving stolen goods that have crossed state and international borders – Title 18, U.S.C., Section 2315
Maximum penalty: Ten years in prison and a $250,000 fine
Illegal re-entry of a removed alien – Title 8, U.S.C., Section 1326
Maximum penalty: Twenty years in prison and $250,000 fine
Maximum penalty: Twenty years in prison and $500,000 fine
AGENCIES
Homeland Security Investigations
Orange County Sheriff’s Department
San Diego Police Department
Carlsbad Police Department
Escondido Police Department
National City Police Department
U.S. Border Patrol
ICE/Enforcement and Removal Operations
U.S. Customs and Border Protection
U.S. Marshals Service
San Diego Harbor Police Department
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
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Former Campaign Guru Ravneet Singh Sentenced for his Role in Laundering $600,000 in Foreign Money into 2012 San Diego Mayoral ElectionRead the Press Release
Assistant U.S. Attorneys Phillip L.B. Halpern (619) 546-6964, Mark W. Pletcher (619) 546-9714, Helen Hong (619) 546-6990, Billy Joe McLain (619) 546-6762
NEWS RELEASE SUMMARY – August 31, 2017
SAN DIEGO – Political consultant Ravneet Singh, former CEO of ElectionMall Technologies, was sentenced today to 15 months in prison and ordered to pay a $10,000 fine for his role in funneling more than $600,000 in illegal foreign campaign contributions from Mexican citizen Jose Susumo Azano Matsura to candidates in the 2012 San Diego mayoral election.
U.S. District Court Judge Michael M. Anello ordered the defendant to report to prison on October 12, 2017, to begin serving his sentence.
In September 2016, after six weeks of trial and five days of deliberations, a federal jury in San Diego returned guilty verdicts against Singh, Azano and Azano’s son, Edward Susumo, who were convicted of felony counts associated with a series of illegal campaign contributions by Azano to the campaigns of Bonnie Dumanis and Bob Filner.
“American elections are not for sale,” said Executive U.S. Attorney Blair Perez. “We will not allow our sacred electoral process to be compromised. This prison sentence underscores an important message: Anyone who tries to manipulate the American electorate will pay a high price.”
“Public corruption undermines the strength and confidence in our system of government which is why these cases are a top criminal priority for the FBI,” said Special Agent in Charge Eric S. Birnbaum. “Today’s sentence stands as a stark condemnation of Azano’s and Singh’s willful efforts to undermine the fundamental principles of our representative democracy. The American people can count on the FBI to continue to bring these complex, sensitive, and important cases to justice.”
“Using a series of complex financial transactions, Mr. Singh conspired to funnel illegal money to influence the outcome of San Diego political races,” stated Special Agent in Charge R. Damon Rowe of IRS Criminal Investigation. “IRS Criminal Investigation remains committed to the fight against campaign finance crimes. This case exemplifies the strong impact we are making in this arena working in cooperation with our law enforcement partners.”
According to evidence presented at trial, Azano, Singh, and others conspired to inject hundreds of thousands of dollars in cash and in-kind consulting services to the Bonnie Dumanis and Bob Filner campaigns, despite the fact that Azano’s foreign national status made such contributions illegal. To conceal his connection to these contributions, Azano arranged with his son Edward Hester and others to funnel this illegal foreign money through corporate and third person “straw donor” contributions. The conspirators, moreover, arranged for at least $267,000 worth of Singh’s in-kind consulting services to be secretly funneled to the campaigns.
In return for his political contributions, Azano sought to buy political influence. For example, he wanted support for his vision of Miami West – a San Diego waterfront development project with a yacht marina, a branded five-star hotel, and luxury bayside condominiums that promised Azano millions in profit. In other instances, Azano wanted access, like the ability to call on influential political figures or obtain letters of reference to secure his son’s admission to the University of San Diego.
Ultimately, with Azano’s help, Filner won the election, though he was forced to resign shortly thereafter.
For his part, Singh used his specialized skills and knowledge to facilitate the crimes. Evidence at trial demonstrated that Singh used code names for the Dumanis and Filner work that Azano paid for but never for any other domestic candidate for office; harshly reprimanded employees for using those code names in emails; and on one particularly candid occasion, referenced the “legal ramifications” of discussing these topics. Singh further concealed the payments from Azano by structuring the wires from a Mexican company, Broadlink, controlled by Azano, which had nothing to do with electoral politics, to company Singh controlled, not Election Mall, but eSolutions, which primarily developed software from India.
In addition to the jury’s guilty verdicts against Azano, Singh, and Hester, the jury was unable to reach a verdict on several charges brought against San Diego lobbyist Marco Polo Cortes, and acquitted Cortes on several charges of falsifying campaign donation records. The jury also acquitted Hester on several charges related to the falsification of campaign donation records, and could not reach a verdict on several other charges. Finally, the jury could not reach a verdict on a firearm charge against Azano.
Retrial on a firearm charge against Azano is set to begin September 5, 2017. Azano is, thereafter, scheduled to be sentenced on October 23, 2017, followed by Edward Hester on November 6, 2017. The retrial of Marco Polo Cortes is scheduled for December 5, 2017.
Assistant U.S. Attorneys Phillip L.B. Halpern, Mark W. Pletcher, Helen Hong, and Billy Joe McLain of the U.S. Attorney’s Office for the Southern District of California are prosecuting the case.
DEFENDANTS Case Number: 14cr0388-MMA
Ravneet Singh Age: 45 Naperville, IL
Jose Susumo Azano Matsura Age: 52 Guadalajara, Mexico
Edward Susumo Azano Hester Age: 25 San Diego, CA
SUMMARY OF CONVICTIONS
Count 1: Conspiracy to Commit Offenses Against the United States – Title 18, U.S.C., Sec. 371.
Maximum Penalties: Up to five years in prison and $250,000 fine
Defendants Azano, Singh and Hester
Count 3: Donation and Contribution by a Foreign National Aggregating $25,000 or more – Title 2, U.S.C., Secs. 437g (d) (1) (A) (i) and 441e (A) (1).
Maximum Penalties: Up to five years in prison and $250,000 fine
Defendants Azano, Singh and Hester
Count 4: Contribution in the Name of Another Aggregating $25,000 or more – Title 2, U.S.C., Secs. 437g(d) (1) (A) (i) and 441f.
Maximum Penalties: Up to five years in prison and $250,000 fine
Defendant Azano
Counts 5-37: Falsification of Records – Title 18, U.S.C., Sec. 1519.
Maximum Penalties: Up to 20 years in prison per count and $250,000 fine per count.
Defendant Azano on all counts; Singh guilty on counts 32 and 37
AGENCIES
Federal Bureau of Investigation
Internal Revenue Service, Criminal Investigation
San Diego Police Department
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Eight Members and Associates of the Westside Crips Criminal Street Gang including one Hotel Manager Plead Guilty to Racketeering Conspiracy Relating to Narcotics Trafficking, Prostitution and Other CrimesRead the Press Release
Assistant U. S. Attorney Alessandra P. Serano (619) 546-8104 or Joseph Orabona (619) 546-7951
NEWS RELEASE SUMMARY – August 31, 2017
SAN DIEGO – Seven alleged gang members and associates of the Westside Crips and one hotel manager of two national brand hotels in Oceanside entered guilty pleas in federal court today, admitting to their participation in a racketeering conspiracy involving narcotics trafficking, prostitution of women and other crimes. One other member pleaded guilty to the same charge last week.
Ameer Roby (aka “Tiny Dum Dum”), Michael Sullivan (aka “Du-Low”), Shane Anderson (aka “Tiny Westwood and aka “Tiny West”), Demetrius McFarland (aka “Mechii Ruu”), Richard Cleveland (aka “Face”), Umesh Oza (aka “Kevin”), and Larry Monroe admitted to their respective membership and association with the Westside Crips, who primarily operated in Oceanside and elsewhere. Peter Miranda (aka “Fat Boy,” “Baby Rocks,” and “Lil’ Burger”) pleaded guilty on August 24, 2017 and admitted to his role in the racketeering conspiracy. Sentencing for all defendants is scheduled for November 27, 2017 before District Judge John A. Houston.
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.
The four remaining defendants involved in the racketeering conspiracy with the Westside Crips criminal street gang are scheduled to appear before U.S. District Judge John A. Houston on September 22, 2017 for a status hearing.
“Gang members and associates and those who assist them continue to plague our community with violence, drugs and other crimes,” said Acting U.S. Attorney Alana W. Robinson. “Our office will continue to use any and all resources to combat the problem.”
“The members of this violent organization were involved in drug trafficking as well as violent crimes,” said DEA San Diego Special Agent in Charge William R. Sherman. “Combining law enforcement resources and getting these violent drug traffickers off the streets is, and will continue to be a DEA priority.”
“The Oceanside Police Department would like to thank the U.S. Attorney's Office and other law enforcement agencies for their collaboration and hard work during this operation,” said Oceanside Police Chief Frank McCoy. “It is collective efforts like this that highlight why the San Diego Region is a model for other law enforcement agencies to emulate, to keep their communities safe.”
“For over a decade, this sophisticated street gang terrorized the streets of Oceanside and the surrounding areas for profit,” said IRS Criminal Investigation’s Special Agent in Charge R. Damon Rowe. “Our agency plays a unique role in federal law enforcement’s resolve to dismantle the criminal gang enterprises terrorizing our streets. Our agents target the profit and financial gains of these organizations, following the money in an effort to disrupt these organizations and bring their members to justice.”
DEFENDANTS Case Number 17cr0270-JAH
Ameer Roby aka “Tiny Dum” Age: 36 Oceanside, CA
Michael Sullivan aka “Du-Low” Age: 33 Oceanside, CA
Peter Miranda aka “Lil’ Burger” Age: 33 Oceanside, CA
Shane Anderson aka “Tiny West” Age: 25 Oceanside, CA
Demetrius McFarland aka “Mecchi Ruu” Age: 23 Oceanside, CA
Richard Cleveland aka “Face” Age: 37 Oceanside, CA
Larry Monroe Age: 59 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
As to Defendant Monroe only:
Title 21, United States Code, Section 841(a) – Conspiracy to Distribute Methamphetamine
Maximum Penalties: life in prison with a mandatory minimum 10 years’ incarceration, a fine of $10,000,000, five years of supervised release
AGENCIES
North County Narcotics Task Force
Drug Enforcement Administration
Oceanside Police Department
Internal Revenue 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.
Chula Vista Resident Guilty of Illegal Importation of $3 Million of AbaloneRead the Press Release
Assistant U.S. Attorney Melanie K. Pierson
(619) 546-7976
NEWS RELEASE SUMMARY – August 30, 2017
SAN DIEGO – Chula Vista resident Yon Pon Wong pleaded guilty in federal court today to illegally importing $3 million of abalone.
In pleading guilty, Wong, doing business as Lucky Company, admitted that he imported the abalone using commercial invoices that falsely identified the seller. The 43 importations Wong referred to occurred between February of 2012, and July of 2015, and involved a total of approximately 67,500 kilograms (148,500 pounds) of abalone. The invoices falsely stated the seller to be Exportadora De Mariscos De Mexico, SA de CV, at the false address of Calle Cubilete No 110, Fracc Capistrano, Tijuana, Mexico. As part of his plea, Wong agreed to forfeit $500,000 of proceeds of the illegal importation.
Abalone is a highly regulated fishery in Mexico. The laws of Mexico require that commercial invoices have sufficient information on them to allow tracking of the seafood to its lawful origin. An invoice lacking the true name and address of the vendor does not permit authorities on either side of the border to trace the origin of the product.
“NOAA's Office of Law Enforcement is committed to the prevention, deterrence, and elimination of illegal trafficking of marine species,” said James Landon, Director of NOAA’s Office of Law Enforcement. “It is our priority to protect species, such as abalone, that are listed by NOAA Fisheries as species of concern, or that are identified as threatened or endangered.”
“Wong’s guilty plea represents the commitment of our agents to bring to justice the individuals and companies seeking to defraud the government,” said Dave Shaw, Special Agent in Charge for Homeland Security Investigations in San Diego. “HSI hopes that the prosecution of seafood import companies and its principals will send a strong message to others seeking to violate U.S. trade laws. HSI will continue to work with its local and international law enforcement partners to enforce these laws.”
“One of the highest priorities of the U.S. Fish and Wildlife Service Office of Law Enforcement is to investigate individuals and companies that are involved in the unlawful commercial trafficking and smuggling of protected animals and plants here and around the world,” said Dan Crum, Assistant Special Agent in Charge. “The U.S. Fish and Wildlife Service, along with our agency partners, will work tirelessly to dismantle wildlife trafficking schemes, and ensure that those engaged in the illegal black market are held accountable.”
Wong was ordered to appear before U.S. District Court Judge Larry A. Burns on November 20, 2017, at 9:00 am for sentencing.
DEFENDANT Criminal Case No. 17cr2443-LAB
Yon Pon Wong Age: 65 Chula Vista, California
SUMMARY OF CHARGES
False Labeling, 16 U.S.C. § 3372(d)(1) and 3373(d)(3)(A)(i)
Maximum penalty: 5 years’ prison, fine of $250,000 or twice the gross gain or loss caused by the offense, restitution, forfeiture of proceeds generated from the, three years of supervised release.
AGENCIES
National Oceanic and Atmospheric Administration, Office of Law Enforcement
Homeland Security Investigations
U.S. Fish and Wildlife Service, Office of Law Enforcement
Father and Son Plead Guilty to Racketeering ConspiracyRead the Press Release
Special Assistant U.S. Attorney Jeffrey D. Hill (619) 546-7924 or
Assistant U.S. Attorney Nicholas W. Pilchak (619) 546-9709 or
Assistant U.S. Attorney Ajay Krishnamurthy (619) 546-9613
NEWS RELEASE SUMMARY – August 29, 2017
SAN DIEGO – Sanders Bruce Segal and his son, Sydney Bruce Segal, each pleaded guilty today to engaging in a racketeering conspiracy that operated for years out of the Lucky Lady Casino and Card Room and other locations in San Diego.
The defendants admitted at today’s hearing to participating in an international racketeering enterprise – Segal’s Lucky Lady Sports Book – that regularly engaged in unlawful activity such as bookmaking, transmitting wagering information, money laundering and collecting unlawful debts.
As outlined in the indictments, the Lucky Lady Casino and Card Room is a licensed gambling establishment that offers legitimate, tightly-regulated card games. Between 2013 and 2016, however, it also provided a front for Sanders Segal’s illegal bookmaking operations. Sydney Segal was an employee of the Lucky Lady Casino and Card Room, and used his position working in the cage to commingle cash from the card room’s lawful gambling operations with the proceeds of the enterprise’s unlawful sports betting.
In his plea agreement, Sanders Segal admitted his role as a leader and organizer of Segal’s Lucky Lady Sports Book. In this capacity, Sanders Segal directed the other members of the enterprise to use gambling websites based overseas to place illegal sports bets on behalf of customers located in the United States.
Sanders Segal and other conspirators also coordinated the unlawful collection of those illegal wagers, typically in cash, and sent and received large sums of cash on behalf of the enterprise. For example, Sanders Segal admitted that on April 2, 2015, he met co-defendant David Greg Leppo in a supermarket parking lot in Del Mar, California, and handed Leppo $10,000 in cash proceeds from illegal gambling.
Similarly, Sanders Segal admitted that on April 23, 2015, co-defendant Stanley Samuel Penn provided him with $20,000 in cash proceeds that Penn had been holding for the defendant, which Sanders Segal then delivered to co-defendant Petter Magnus Karlsson while at the Lucky Lady Casino and Card Room. Sanders Segal received 10% of any profits earned by the illegal sports bets placed through his enterprise, as well as additional financial benefits.
In his plea agreement, Sydney Bruce Segal admitted his role as bookkeeper for Segal’s Lucky Lady Sports Book, and specifically that he maintained records of winning and losing bettors and the amount of money that supported the enterprise’s activities held by him and other co-conspirators. Sydney Segal also admitted that cash from the Lucky Lady Casino and Card Room’s lawful gambling operations was held alongside proceeds of unlawful sports betting coordinated by Segal’s Lucky Lady Sports Book, including in a “player’s bank” provided by the card room.
As part of his plea, Sanders Segal agreed to forfeit $222,834, and Sydney Bruce Segal agreed to forfeit $10,000, each figure representing direct proceeds from their respective participation in the offense.
Twelve defendants have thus far pleaded guilty to federal charges as a result of the investigation targeting Segal’s Lucky Lady Sports Book: Sanders Bruce Segal, Petter Magnus Karlsson, Pablo Ballestero Frech, Sydney Bruce Segal, Joseph Edward Spatafore, Minh Triet Dinh Nguyen, James Heng Tear, Ken Pheng Keo, Jason D. Taylor, Jeffrey Alan Burke, Ryan Richard Buchardt and Robert Jay Zaben.
Sentencing for both Sanders Segal and Sydney Segal is scheduled for December 4, 2017 at 9 a.m. before U.S. District Judge Roger T. Benitez.
The two remaining defendants, Stanley Samuel Penn and David Greg Leppo, are charged with racketeering conspiracy and operating an illegal gambling business. Their cases are set for a motion hearing on August 31, 2017, and a jury trial on October 3, 2017, before Judge Benitez. The charges against these two defendants are merely accusations; they are considered innocent unless and until proven guilty.
DEFENDANTS Case Number: 16CR1695-BEN
Sanders Bruce Segal Age 66 San Diego
Sydney Bruce Segal Age 34 San Diego
SUMMARY OF CHARGES
Count 1: Racketeering Conspiracy to Conduct Enterprise Affairs (RICO Conspiracy), in violation of Title 18, United States Code, Sections 1962(c) & (d)
Maximum penalties: 20 years in prison, 3 years supervised release, a $250,000 fine, forfeiture
AGENCIES
Federal Bureau of Investigation
San Diego Police Department
Internal Revenue Service – Criminal Investigation
Eight Indicted in Multi-Million Dollar Drug Distribution and Money Laundering ConspiracyRead the Press Release
Assistant U.S. Attorney Jarad E. Hodes (619) 546-7432
SAN DIEGO – A federal grand jury returned an indictment today charging eight defendants from Southern California and the Mexican state of Sinaloa with participation in conspiracies to distribute multiple controlled substances throughout the United States and to launder millions of dollars in cash proceeds from those drug sales.
Five of those defendants – Javier Felix-Bayardo, Rigoberto Munoz-Banuelos, Manuel Felix-Gutierrez, Hector Sandoval-Toloza, and Camilo Ayon-Mondragon – were charged in a conspiracy to distribute large quantities of cocaine, methamphetamine, and marijuana. Felix-Bayardo and Munoz-Banuelos, along with Gabriela Nunez, Mario Noriega-Osuna, and Margarito Rodriguez-Ochoa, were charged in a conspiracy to launder over $5 million in proceeds through the operation of dozens of bank accounts. Nunez was also charged with using $20,000 in drug proceeds for a down payment on a 2015 Dodge Durango. Munoz-Banuelos was also charged with bulk cash smuggling in connection with his attempt to transport $101,083 in cash to Mexico in a 2011 Ford F-150 truck.
According to an affidavit filed in support of a criminal complaint in the case, Felix-Bayardo was the leader of this criminal network, whose members would distribute multiple drugs throughout the United States and then receive cash deposits into bank accounts opened in their own names and under aliases. The affidavit lists over 20 fraudulent accounts at Bank of America and Wells Fargo Bank opened using falsified Mexican identification documents.
Agents from the Drug Enforcement Administration, Internal Revenue Service and Homeland Security Investigations discovered that some of the same false identification documents had been used to rent two storage units in National City, California. On August 9, 2017, agents executed a search warrant at those storage units and seized approximately 26.5 kilograms of cocaine, 938 grams of methamphetamine, and 486 kilograms of marijuana, along with five firearms including an AR-15 style rifle modified to function as a machine gun capable of fully automatic fire.
As drugs like these flowed throughout the United States, thousands of dollars flowed from Felix-Bayardo’s accounts into the bank account of his wife, Nunez, who then paid for the couple’s lifestyle expenses, including a $1,260 monthly lease payment on a 2016 Mercedes-Benz GLE 450 and a $1,002 monthly loan payment on the 2015 Dodge Durango.
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.
Arraignment on the indictment is scheduled for September 14, 2017 at 9:30 a.m. before U.S. Magistrate Judge Nita L. Stormes.
*The charges and allegations contained in the complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
DEFENDANTS
Javier Felix-Bayardo Age: 33 Bonita, California
Gabriela Favela Nunez Age: 35 Bonita, California
Rigoberto Munoz-Banuelos Age: 31 West Covina, California
Mario Noriega-Osuna Age: 35 San Diego, California
Margarito Rodriguez-Ochoa Age: 36 National City, California
Manuel Felix-Gutierrez Age: 63 Sinaloa, Mexico
Hector Sandoval-Toloza Age: 42 Sinaloa, Mexico
Camilo Ayon-Mondragon Age: 30 Sinaloa, Mexico
SUMMARY OF CHARGES
Conspiracy to Distribute Cocaine, Methamphetamine, and Marijuana – Title 21, U.S.C., Section 846
Maximum penalty: Life in prison and $10,000,000 fine
Conspiracy to Launder Monetary Instruments – Title 18, U.S.C., Section 1956(h)
Maximum penalty: 20 years in prison and fine equal to double the value of assets laundered
Engaging in Monetary Transaction in Property Derived From Specified Unlawful Activity – Title 18, U.S.C., Section 1957(a)
Maximum penalty: 10 years in prison and $250,000 fine
Bulk Cash Smuggling – Title 31, U.S.C., Section 5332
Maximum penalty: 5 years in prison and $250,000 fine
AGENCIES
Drug Enforcement Administration
IRS Criminal Investigation
Homeland Security Investigations
United States Border Patrol
Man Sentenced for Assaulting a U.S. Border Patrol Agent and Alien SmugglingRead the Press Release
Assistant U. S. Attorneys Timothy Coughlin (619) 546-6768 and Carlos Arguello (619) 546-6684
NEWS RELEASE SUMMARY – August 28, 2017
SAN DIEGO – Martel Valencia-Cortez, a Mexican national and prolific alien smuggler, was sentenced in federal court today to 99 months in prison for hurling a softball-sized rock at a U.S. Border Patrol agent and for alien smuggling.
Valencia-Cortez was convicted by a federal jury in May of all counts, including one count of assault on a federal officer with a deadly weapon and three counts of bringing in an alien for financial gain.
U.S. District Judge Marilyn Huff imposed an 87-month sentence for the four counts, plus an additional 12 months in custody for violating the terms of supervised release from a 2013 alien smuggling conviction.
On November 15, 2015, less than two months after his deportation to Mexico following the completion of a 33-month sentence for a prior alien smuggling conviction, Valencia re-entered the United States guiding a group of 15 undocumented immigrants. When the trip through the mountains in rough terrain and inclement weather was interrupted by agents, Valencia threw a softball-sized rock from a distance of approximately 30 feet that hit an agent on the side of the face. Valencia evaded apprehension when he ran back into Mexico afterwards. Agents arrested Valencia when Mexican authorities escorted him to the San Ysidro Port of Entry on Friday, March 11, 2016.
According to court records and testimony at trial, the agent who was assaulted said he had never been hit that hard in his life, and he felt an overwhelming pain that caused him to feel dazed and disoriented, as if he was going to pass out. The rock hit the agent so hard that he thought his teeth were knocked-out or his jaw was broken.
“This sentence is a fitting reminder that the safety of our courageous agents, who put their lives on the line every day to protect our country, is of paramount importance to our office and to the community,” said Acting U.S. Attorney Alana W. Robinson.
“I am grateful to the U.S. Attorney’s Office for the immense support the agents of San Diego Sector have received regarding this case. Valencia demonstrates the worst of what agents are confronted with, and we fully support this conviction and sentencing. Valencia is not only a danger to law enforcement officials but the general public as well,” said San Diego Sector Chief Patrol Agent Richard A. Barlow.
DEFENDANTS Case Number 16-CR-0730
Martel Valencia-Cortez Age: 39 Colima, Mexico
SUMMARY OF CHARGES
Count 1: Assault on a Federal Officer, in violation 18 U.S.C. 111 (a)(b)
Maximum Penalty 20 years in prison
Count 2-4: Bringing in Aliens for Financial Gain, in violation of 8 U.S.C. 1324 (a)(2)(b)(ii)
Mandatory Minimum of 5 years in prison, maximum 15 years
AGENCY
U.S. Customs and Border Protection
U.S. Border Patrol
Construction Manager and Financier Who Laundered Money for Calexico Tunnel Organization Pleads GuiltyRead the Press Release
Assistant U. S. Attorney Sherri Walker Hobson (619) 961-0287
NEWS RELEASE SUMMARY – August 28, 2017
SAN DIEGO – Habib Sayb Mujica, an American citizen who spent almost six years in a Mexican prison for firearms trafficking only to be arrested in the U.S. upon his release, pleaded guilty in federal court today to tunnel-related charges.
According to his plea agreement, Mujica, 35 admitted that he participated in a conspiracy to construct, finance and use an unfinished tunnel that was discovered in Calexico in 2011. The tunnel was discovered by Homeland Security Investigations agents at a warehouse at 361 W. 2nd Street in Calexico.
Mujica acknowledged in his plea agreement that he instructed Ricardo Rosales-Rafael to rent the large Calexico warehouse with drug proceeds. He further admitted that approximately $340,172 in cash was deposited into bank accounts to facilitate the rental of the Calexico warehouse and to rent various machines and tools to construct the tunnel’s exit point for the purpose of smuggling controlled substances.
Mujica also admitted that he intended to operate a business known as Baja Bikes, but this was only a front to conceal the tunnel activities inside. To construct the tunnel, Mujica arranged for a Horizontal Directional Drilling Machine (HDD) to initiate the construction of a tunnel, and purchased multiple tools and equipment, including alignment tools, pipes, level tripod, jack hammer, drills, electric saws, forklift hydraulic lift, air compressors and tool boxes.
Mujica, who recently completed a sentence of almost six years in a Mexican prison following his conviction for gun trafficking there, was expelled from Mexico to the United States in May 2017. He was arrested by U.S. authorities after his explusion.
Mujica is scheduled to be sentenced for the tunnel-related crimes on November 27, 2017, at 9 a.m. before Judge Thomas Whelan. Mujica also faces gun charges in an unrelated criminal case, criminal case number 11cr3531JAH.
The following photos depict the warehouse and the Horizontal Directional Drilling Machine used to construct the tunnel:
DEFENDANT Case Number 17CR2505W
Habib Sayb Mujica Age: 35 Calexico, California
SUMMARY OF CHARGES
Money Laundering Conspiracy – Title 18, U.S.C., Section 1956(h)
Maximum penalty: 20 years’ imprisonment and $500,000 fine
Conspiracy to Construct, Finance, and Use Tunnel – Title 18,U.S.C. Section 555
Maximum penalty: 20 years’ imprisonment and $250,000 fine
AGENCY
Homeland Security Investigations, Calexico
Perris Man Charged with Smuggling Tiger CubRead the Press Release
Assistant U.S. Attorney Melanie K. Pierson (619) 546-7976
NEWS RELEASE SUMMARY – August 24, 2017
SAN DIEGO – Luis Eudoro Valencia, of Perris, California, was charged yesterday with smuggling a Bengal tiger cub into the United States from Mexico.
According to the complaint, Valencia drove into the Otay Mesa Port of Entry with the tiger cub on the floor of the vehicle. It is alleged that Valencia failed to declare the tiger cub to Customs and Border Protection officers. The tiger cub was discovered in the secondary inspection area.
According to the complaint, the defendant stated that he had purchased the tiger for $300 from an individual he encountered walking a full-sized tiger on a leash in Tijuana. All species of tigers are listed as endangered under the Endangered Species Act, and are protected under Appendix I of the Convention on International Trade in Endangered Species. To legally import an endangered species into the United States requires a permit from the U.S. Fish & Wildlife Service, and the importation must be accompanied by a Declaration Form 3-177 filed with Fish & Wildlife. According to the complaint, the defendant lacked the required permit and did not file the required declaration.
The Bengal tiger (Panthera tigris tigris) is the most populous subspecies of tiger. The Bengal tiger is native to India, Bangladesh, Nepal and Bhutan. According to the World Tiger Recovery Project, there are only 2,500 wild specimens on earth and the population of Bengal tigers is decreasing.
Valencia was released on a $10,000 personal surety bond and ordered to appear for a preliminary hearing on September 5, 2017, at 1:30 pm before U.S. Magistrate Judge Bernard Skomal.
DEFENDANT Case No. 17-MJ-3013
Luis Eudoro Valencia Age: 18 Perris, California
SUMMARY OF CHARGES
Smuggling, 18 U.S.C. § 545
Maximum penalty: 20 years’ prison, fine of $250,000, or twice the gross gain or loss caused by the offense, restitution, forfeiture of proceeds generated from the, five years of supervised release.
Unlawful Importation of Wildlife, 16 U.S.C. §§1538(a)(1)(A) and 1540(b)
AGENCIES
U.S. Fish & Wildlife Service
Homeland Security Investigations
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
E-Recycling Executive Sentenced to 21 Months Federal CustodyRead the Press Release
Assistant U.S. Attorneys Rebecca S. Kanter (619) 546-7304 and C. Seth Askins (619) 546-6692
NEWS RELEASE SUMMARY – August 21, 2017
SAN DIEGO – Robert Erie, the former Chief Executive Officer and co-founder of E-World Recyclers, LLC, was sentenced today to 21 months custody for trafficking in counterfeit goods. His conviction relates to a contract he obtained to destroy counterfeit merchandise seized by the federal government. Instead of destroying or “e-recycling” the counterfeit goods as he was required to do (and as he certified), Erie instead diverted the counterfeit merchandise and trafficked in it for commercial advantage.
E-World Recyclers was an electronic recycling service company which operated out of Vista, California. In late 2009, E-World received a sub-contract to perform electronic recycling services related to counterfeit goods seized by Department of Homeland Security (“DHS”), Bureau of Customs and Border Protection (“CBP”). Between approximately November 4, 2009, and December 18, 2009, E-World received approximately 38 shipments containing approximately 1,888 pallets of counterfeit goods seized by CBP.
Erie instructed E-World employees to sign documents to submit to government agencies certifying the destruction of CBP-seized counterfeit goods. In fact, Erie knew that the goods had not all been destroyed. Instead, on approximately December 24, 2009, Erie rented a personal storage unit in San Marcos, California, and transported some of the CBP-seized counterfeit goods to his personal storage unit, including watches bearing counterfeit marks related to Paneri, Cartier, Romain Jerome, Patek Philippe, Audemars Piguet, Rolex, Chanel, Bebe, Brietling, Omega Graham, Corum, Gucci, Ed Hardy, Coach and Dolce Gabbana, and headphones bearing counterfeit marks related to Bose. Erie maintained the storage unit through September 8, 2011, when federal agents executed a court-authorized search warrant and seized, among other things, (1) 2,275 counterfeit watches bearing marks registered to Chanel, Gucci, Coach, Ed Hardy and other companies; (2) 524 counterfeit pens bearing mark(s) registered to Montblanc; and (3) 12 counterfeit in-ear headphones bearing mark(s) registered to Bose.
In the meantime, after removing the counterfeit goods from E-World but prior to federal agents search and seizure, Erie trafficked in the counterfeit merchandise for his own commercial advantage. For example, on approximately January 25, 2010, for Eroe sent at least four separate shipments consisting of multiple boxes of CBP-seized counterfeit watches to business associates who were affiliated with a glass company in Ohio to whom E-World owed money.
Judge Anthony J. Battaglia imposed a two-level upward adjustment for obstruction of justice based on Erie’s alteration of e-mails in an attempt to thwart the prosecution. Specifically, the Court found that in approximately February 2010, Erie altered e-mail correspondence from September 2009 between himself and a Cycle Chem representative, which defendant then sent in approximately August 2011, to his then criminal defense attorney. The defendant’s criminal defense attorney then sent the altered e-mail correspondence to the U.S. Attorney’s Office in order to dissuade the U.S. Attorney’s Office from seeking criminal charges against defendant for his unlawful trafficking in CBP-seized counterfeit merchandise. The alteration of the e-mails had the effect of falsely suggesting that the contractor from whom E-World had obtained the subcontract had giving Erie permission to redistribute and/or remarket the counterfeit watches, which it had not.
Amanda Thandi, Special Agent in Charge, U.S. Department of Homeland Security, Office of Inspector General, San Diego Field Office, said, “The collaborative investigation effort between DHS OIG and HSI played a pivotal role in the successful prosecution of this case. The DHS OIG’s vigilant oversight of government contractors like E-World Recyclers is imperative to safeguard taxpayer dollars.”
“Bob Erie was trusted to do one thing with the counterfeit goods illegally being imported at the land and sea borders: Keep it out of the stream of commerce by assuring its destruction or recycling,” said Acting U.S. Attorney Alana W. Robinson. “Instead, he used the seized counterfeit goods to advance his own personal agenda and commercial advantage, to the detriment of the trademark holders, the United States, and ultimately his own company. This crime was especially egregious because of Erie’s attempts to obstruct justice by falsifying e-mails, which were sent to the United States Attorney’s Office in an effort to avoid prosecution. The United States will continue to vigorously enforce intellectual property crimes and protect the property interests of American companies against abusers like Erie.”
He pleaded guilty on February 23, 2017, and admitted that the retail value of the infringed items trafficked by defendant was at least $1,450,000. In addition to the sentence of 21 months’ custody, Erie was ordered to pay a $10,000 fine. Erie, who was released on bond during the pendency of the proceedings, was ordered to surrender on September 5, 2017 to the Bureau of Prisons.
Erie was previously convicted and sentenced in June 2013 to five years’ probation for being a felon in possession of a firearm (11cr5796-AJB.)
DEFENDANTS Case Number 14cr3660-AJB
Robert Erie Age: 53 Carlsbad, CA
SUMMARY OF CHARGES
Conspiracy to Traffic in Counterfeit Goods – Title 18, U.S.C., Section 371
Maximum penalty: 5 years’ imprisonment and $250,000 fine
AGENCIES
Department of Homeland Security – Office of Inspector General
Homeland Security Investigations, Intellectual Property & Trade Investigations
Drug Trafficker Who Fled During Trial CapturedRead the Press Release
Assistant U. S. Attorney P. Kevin Mokhtari (619) 546-8402
NEWS RELEASE SUMMARY – August 22, 2017
SAN DIEGO – A man who fled in the middle of his three-day cocaine trafficking trial was arrested yesterday after being a fugitive for two months. Itai Enriquez-Rodriguez, 21, was arrested after being located in Gilroy near San Jose, California.
On July 7, 2016, Enriquez-Rodriguez was arrested at the Otay Mesa, California Port of Entry after being caught with three kilograms of cocaine in his vehicle. Shortly after his arrest, Enriquez-Rodriguez was released on bond. Following an investigation by Department of Homeland Security (DHS), Homeland Security Investigations (HSI), Enriquez-Rodriguez was indicted on conspiracy to import cocaine and importation of cocaine charges. Enriquez-Rodriguez persisted in his not-guilty plea and went to trial.
On June 21, 2017, Enriquez-Rodriguez’s trial began. At the end of the first day of trial, the Honorable Marilyn L. Huff ordered Enriquez-Rodriguez to return the following morning. The next morning, however, Enriquez-Rodriguez failed to appear. The parties recessed that morning to attempt to locate Enriquez-Rodriguez. During that recess, HSI agents discovered a Facebook post by Enriquez-Rodriguez’s brother depicting him and his brother, defendant Enriquez-Rodriguez. The brother’s Facebook account also included a photo of a man with a handgun with the caption, “He who laughs last, laughs the best. And I’m in no hurry.” Both of the images were posted to Facebook the same morning Enriquez-Rodriguez fled.
Finding that Enriquez-Rodriguez had voluntarily absented himself from trial, Judge Huff ruled the trial could continue in absentia. Trial concluded on June 23, 2017 with the jury finding Enriquez-Rodriguez guilty of conspiracy to import cocaine and importation of cocaine.
Over the next two months, the U.S. Marshals Service and HSI followed leads to help identify fugitive Enriquez-Rodriguez’s whereabouts. On August 21, 2017, the Marshals Service obtained information that Enriquez-Rodriguez was hiding out in his hometown of Gilroy, California. Following that lead, the U.S. Marshals Service arrested Enriquez-Rodriguez in a vehicle outside his girlfriend’s residence.
On August 18, 2017, Enriquez-Rodriguez was indicted by a federal grand jury on bail jumping charges.
Enriquez-Rodriguez’s sentencing on the cocaine trafficking charges is scheduled for October 23, 2017 at 9:00 am before the Honorable Marilyn L. Huff.
DEFENDANT Case Numbers 17cr0059-H, 17cr2379-H
Itai Enriquez-Rodriguez Age: 21 Gilroy, CA
SUMMARY OF CHARGES
Conspiracy to Import Cocaine; Importation of Cocaine – Title 18, U.S.C., Sections 952, 960, 963
Maximum penalty: 20 years’ imprisonment and $1,000,000 fine
Bail Jumping – Title 18, U.S.C., Section 3146.
Maximum penalty: 10 years’ imprisonment and $250,000 fine
AGENCIES
Homeland Security Investigations
United States Marshals 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.
Sinaloa Cartel Associate ArrestedRead the Press Release
Assistant U.S. Attorney Adam Braverman (619) 546-6717
NEWS RELEASE SUMMARY – August 18, 2017
SAN DIEGO – Alvaro Lopez-Nunez – brother of Sinaloa Cartel leader Damaso Lopez-Nunez, aka Licenciado, and uncle of Sinaloa Cartel cell leader Damaso Lopez-Serrano, aka Mini Lic – was taken into custody by Drug Enforcement Administration agents at the Nogales, Arizona Port of Entry on August 17, 2017. His arrest follows on the heels of Lopez-Serrano’s July 27, 2017, self-surrender in the Southern District of California.
A federal grand jury in San Diego returned an indictment on August 19, 2016, charging Damaso Lopez-Serrano, Alvaro Lopez-Nunez and four of their close associates, including Nahum Sicairos-Montalvo, aka Kinceanero, with Conspiracy to Distribute Controlled Substances Intended for Importation and Conspiracy to Import Controlled Substances. That same day, the Clerk of the Court issued sealed warrants for their arrests. Sicairos-Montalvo was subsequently arrested by Mexican law enforcement officials. The remaining defendants are fugitives.
On August 18, 2017, Alvaro Lopez-Nunez made his initial appearance in federal court in Tucson, Arizona and was arraigned on the San Diego indictment.
The arrest marks the continued efforts by the Southern District of California to target the Sinaloa Cartel in Operation Narco Polo. 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.
DEFENDANT Case Number 16CR1896-DMS
Alvaro Lopez-Nunez Age: 38 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
Customs and Border Protection Office of Field Operations
Customs and Border Protection Office of Border Patrol
Department of Justice, Organized Crime Drug Enforcement Task Forces
Department of Justice, Office of Enforcement Operations
*An indictment or complaint is not evidence that the defendants committed the crimes charged. The defendants are presumed innocent until the Government meets its burden in court of proving guilt beyond a reasonable doubt.
Former Assistant Chief of Staff of the U.S. Navy’s Seventh Fleet Charged in Massive Navy Corruption Scandal; Pleads Guilty to Bribery ConspiracyRead the Press Release
Assistant U.S. Attorneys Mark W. Pletcher (619) 546-9714 and Patrick Hovakimian (619) 546-9718
NEWS RELEASE SUMMARY – August 18, 2017
SAN DIEGO – U.S. Navy Captain Jesus Vasquez Cantu admitted in federal court today that he accepted bribes in the form of parties and prostitutes while sneaking proprietary information to foreign defense contractor Leonard Glenn Francis and his Singapore-based firm, Glenn Defense Marine Asia.
Twenty-eight individuals, including 21 current and former Navy officials and five civilian defendants, plus GDMA, the corporation, have been charged so far as part of the massive fraud and bribery investigation. Nineteen of these defendants have pleaded guilty. Nine defendants await trial.
Cantu, 59, of Silverdale, Washington, pleaded guilty to one count of conspiracy to commit bribery and is scheduled to be sentenced on November 9, 2017 before U.S. District Judge Janis L. Sammartino.
In his plea agreement, Cantu acknowledged that Francis took him and others out for drinks and dinners at posh restaurants, nightclubs and karaoke bars and paid for lavish hotel rooms and the services of prostitutes on numerous occasions in 2012 and 2013. Cantu admitted that he provided proprietary U.S. Navy information to Francis, and that he used his power and influence to help Francis and GDMA with their business.
“The number of U.S. Navy officials who participated in this conspiracy is astounding,” said Acting U.S. Attorney Alana W. Robinson. “Like so many others, this defendant sold out the Navy and his country for cocktails and karaoke. We are pressing forward in this investigation until we are certain that all involved have been held accountable.”
“The guilty plea of Jesus Cantu is another sad chapter in the largest fraud and corruption scandal in the U.S. Navy's history,” said Dermot O'Reilly, Deputy Inspector General for Investigations, Office of Inspector General, Department of Defense. “While the conduct of the vast majority of U.S. Navy personnel is beyond reproach, the unfortunate truth is that for years Leonard Francis and Glenn Defense Marine Asia, compromised the integrity of numerous members of the U.S. Navy. This investigation continues, and the Defense Criminal Investigative Service and its law enforcement partners will relentlessly pursue those individuals involved in this massive corruption scandal.”
NCIS Director Andrew Traver said of today’s events, “Captain Cantu, like others caught up in the GDMA scandal, dishonored his sworn oath of office. NCIS, in concert with our partner agencies, remains resolved to following the evidence wherever it may lead, to help hold accountable those who choose personal gratification over duty and professional responsibility.”
According to his plea agreement, Cantu served in the Navy until 2014. During the time he was accepting bribes from Francis in 2012 and 2013, Cantu was the deputy commander, Military Sealift Command (MSC) Far East in Singapore. He oversaw the MSC ships that provided logistical sustainment to Navy ships operating in the Seventh Fleet.
Cantu also admitted in his plea agreement that, in 2007, when he was the Assistant Chief of Staff for Logistics for the Commander of the U.S. Navy’s Seventh Fleet aboard the USS Blue Ridge, he and others participated in a bribery conspiracy with Francis. Cantu and other members of the conspiracy accepted more than $135,000 in meals, entertainment, travel and hotel expenses, and the services of prostitutes from Francis; in exchange, they worked together to help Francis as issues important to his business arose.
Cantu’s 2007 conduct described in the plea agreement is related to the March 2017 indictment of nine high-ranking Seventh Fleet U.S. Navy officers. Retired U.S. Navy Rear Admiral Bruce Loveless and others are accused of conspiring with Francis, trading military secrets and substantial influence for sex parties with prostitutes, extravagant dinners and luxury travel. The others include Captains David Newland, James Dolan, Donald Hornbeck and David Lausman; Colonel Enrico DeGuzman; Lt. Commander Stephen Shedd; Commander Mario Herrera and Chief Warrant Officer Robert Gorsuch. Their cases are pending.
The U.S. Navy’s Seventh Fleet represents a vital piece of the United States military’s projection of power as well as American foreign policy and national security. The largest numbered fleet in the U.S. Navy, the Seventh Fleet comprises 60-70 ships, 200-300 aircraft and approximately 40,000 Sailors and Marines. The Seventh Fleet is responsible for U.S. Navy ships and subordinate commands that operate in the Western Pacific throughout Southeast Asia, Pacific Islands, Australia, and Russia and the Indian Ocean territories, as well ships and personnel from other U.S. Navy Fleets that enter the Seventh Fleet’s area of responsibility. The USS Blue Ridge is the command ship of the Seventh Fleet and houses at-sea facilities for Seventh Fleet senior officials.
The other current or retired Navy officials charged so far in the fraud and bribery investigation are U.S. Navy Admiral Robert Gilbeau; Captain Michael Brooks; Captain Daniel Dusek; Commander Michael Misiewicz; Commander Jose Luis Sanchez; Commander Bobby Pitts; Commander David Kapaun; Lt. Commander Gentry Debord; Lt. Commander Todd Malaki; Petty Officer First Class Daniel Layug; NCIS Supervisory Special Agent John Beliveau; and Paul Simpkins, a former DoD civilian, who oversaw contracting in Singapore.
All have pleaded guilty. On Jan. 21, 2016, Layug was sentenced to 27 months in prison and a $15,000 fine; on Jan. 29, 2016, Malaki was sentenced to 40 months in prison and to pay $15,000 in restitution to the Navy and a $15,000 fine. On March 25, 2016, Dusek was sentenced to 46 months in prison and to pay $30,000 in restitution to the Navy and a $70,000 fine; and on April 29, 2016, Misiewicz was sentenced to 78 months in prison and to pay a fine of $100,000 and to pay $95,000 in restitution to the Navy. Beliveau was sentenced on October 14, 2016 to 12 years in prison and to pay $20 million in restitution; Simpkins was sentenced on December 2, 2016 to 72 months in prison and ordered to pay a fine of $50,000, to forfeit $450,000 of the proceeds of the criminal activity, and to pay $450,000 in restitution to the U.S. Navy; Gilbeau was sentenced on May 17 to 18 months in prison and ordered to pay a $100,000 fine and $50,000 in restitution to the Navy; and Brooks was sentenced on June 16 to 41 months in prison and ordered to pay a $41,000 fine and $31,000 in restitution to the Navy. Sanchez, Pitts and Kapaun await sentencing.
Also charged are five GDMA executives – Francis, Alex Wisidagama, Ed Aruffo, Neil Peterson and Linda Raja. All have pleaded guilty; Wisidagama was sentenced on March 18, 2016 to 63 months and $34.8 million in restitution to the Navy; Peterson and Raja were extradited from Singapore in 2016 and sentenced on August 11 to 70 months and 46 months in prison, respectively. Francis and Aruffo await sentencing.
Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California and Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section are prosecuting the case.
Anyone with information relating to fraud or corruption should contact the NCIS anonymous tip line at www.ncis.navy.mil or the DOD Hotline at www.dodig.mil/hotline, or call (800) 424-9098.
DEFENDANT Case Number: 17CR2376-JLS
U.S. Navy Captain Jesus Vasquez Cantu Age 59 S ilverdale, Washington
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
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Active-Duty U.S. Navy Commander Pleads Guilty to Conspiring with Foreign Defense Contractor to Defraud the U.S. NavyRead the Press Release
Assistant U.S. Attorneys Mark W. Pletcher (619) 546-9714 and Patrick Hovakimian (619) 546-9718
NEWS RELEASE SUMMARY – August 15, 2017
SAN DIEGO – U.S. Navy commander Bobby Pitts pleaded guilty today in connection with his efforts to obstruct a federal criminal investigation into the exploits of Singapore-based defense contractor Leonard Glenn Francis.
Pitts, 48, of Chesapeake, Va., pleaded guilty to one count of conspiracy to defraud the United States, admitting that he attempted to protect Francis, owner and chief executive of Glenn Defense Marine Asia (GDMA). 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.
Pitts is scheduled to be sentenced on December 1, 2017 by U.S. District Judge Janis L. Sammartino of the Southern District of California.
According to admissions made as part of his plea agreement, from August 2009 to May 2011, Pitts served as the officer in charge of the U.S. Navy’s Fleet Industrial Supply Command (FISC) in Singapore. As part of his duties, Pitts learned that Naval Criminal Investigative Service and several civilian employees of the U.S. Navy were investigating whether Francis was over-billing the U.S. Navy on ship husbanding contracts.
Pitts had access to internal U.S. Navy documents pertaining to investigative steps that the U.S. Navy was considering and admitted that he shared this information with Francis, with the intent to impede and obstruct the U.S. Navy’s oversight of its contracts with GDMA. On Nov. 23, 2010, for example, Pitts forwarded to a representative of GDMA an internal U.S. Navy email discussing FISC’s intention to contact officials with the Royal Thai Navy to determine whether GDMA had been billing the U.S. Navy for services in fact rendered by the Thai government.
In pleading guilty, Pitts admitted, among other things, to working with Francis and other foreign-defense-contractor personnel to help them cover up GDMA’s overcharging practices with respect to providing protection to U.S. Navy forces deployed in the Western Pacific.
So far, 18 of 27 defendants charged in the U.S. Navy bribery and fraud scandal have pleaded guilty. All defendants are presumed innocent unless and until convicted beyond a reasonable doubt in a court of law.
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: 16-CR-1207
Commander Bobby Pitts Age 48 Chesapeake, Virginia
SUMMARY OF CHARGES
Conspiracy to Defraud the United States, 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
Active-Duty U.S. Navy Commander Pleads Guilty to Conspiring with Foreign Defense Contractor to Defraud the U.S. NavyRead the Press Release
An active-duty U.S. Navy commander pleaded guilty today in connection with his efforts to obstruct a federal criminal investigation of the owner and chief executive officer of a multi-national defense contracting firm headquartered in Singapore.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Alana Robinson of the Southern District of California, Director Dermot O’Reilly of the Department of Defense’s Defense Criminal Investigative Service (DCIS) and Director Andrew Traver of the Naval Criminal Investigative Service (NCIS) made the announcement.
Bobby Pitts, 48, of Chesapeake, Va., pleaded guilty to one count of conspiracy to defraud the U.S. in connection with the NCIS’s investigation of Leonard Glenn Francis, the owner and CEO of Glenn Defense Marine Asia (GDMA). Pitts is set to be sentenced on December 1, by U.S. Magistrate Judge Bernard Skomal of the Southern District of California, who accepted his plea today.
According to admissions made as part of his plea agreement, from August 2009 to May 2011, Pitts served as the officer in charge of the U.S. Navy’s Fleet Industrial Supply Command (FISC) in Singapore. As part of his duties, Pitts learned that NCIS and several civilian employees of the U.S. Navy were investigating whether Francis was over-billing the U.S. Navy on ship husbanding contracts. Pitts had access to internal U.S. Navy documents pertaining to investigative steps that the U.S. Navy was considering and admitted that he shared this information with Francis, with the intent to impede and obstruct the U.S. Navy’s oversight of its contracts with GDMA. On Nov. 23, 2010, for example, Pitts forwarded to a representative of GDMA an internal U.S. Navy email discussing FISC’s intention to contact officials with the Royal Thai Navy to determine whether GDMA had been billing the U.S. Navy for services in fact rendered by the Thai government.
In pleading guilty, Pitts admitted, among other things, to working with Francis and other foreign-defense-contractor personnel to help them cover up GDMA’s overcharging practices with respect to providing protection to U.S. Navy forces deployed in the Western Pacific.
So far, 18 of 27 defendants charged in the U.S. Navy bribery and fraud scandal have pleaded guilty. All defendants are presumed innocent unless and until convicted beyond a reasonable doubt in a court of law.
The case is being prosecuted by Assistant Chief Brian R. Young of the Fraud Section of the Justice Department’s Criminal Division and Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California.
Drug Trafficker Pleads Guilty to Making Arrangements to Send Tractor-Trailers Loaded with Narcotics from Sinaloa, Mexico Destined for San Diego, CaliforniaRead the Press Release
Assistant U.S. Attorneys Adam L. Braverman (619) 546-6717 and Fred A. Sheppard (619) 546-8237
NEWS RELEASE SUMMARY – August 14, 2017
On the day scheduled for his trial, Jesus Manuel 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 from a place outside thereof, in violation of Title 21, United States Code, Sections 952, 960 and 963.
Jesus Manuel Salazar-Nunez was charged in a sealed indictment on September 15, 2015. A sealed arrest warrant was issued that same day. Salazar-Nunez was arrested the following day when he flew into Hartsfield-Jackson Atlanta International Airport from Guadalajara, Mexico.
In 2015, Drug Enforcement Administration agents intercepted the communications of the defendant and others making arrangements for tractor-trailers to travel from Sinaloa, Mexico to Baja California, Mexico, carrying hundreds of pounds of methamphetamine, cocaine and heroin 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. connection with the entry of his guilty plea, Salazar-Nunez admitted to making arrangements for four tractor-trailers that were seized by Mexican law enforcement, including: a tractor-trailer stopped on March 28, 2015, with a total of approximately 285 kilograms of methamphetamine, 3 kilograms of heroin and 11 kilograms of cocaine; two tractor-trailers stopped on April 28, 2015, with a total of approximately 422 kilograms of methamphetamine, 38 kilograms of heroin and 4 kilograms of cocaine; and a tractor-trailer stopped on August 21, 2015, with approximately 165 kilograms of methamphetamine.
Salazar-Nunez is scheduled to be sentenced on November 9 before Judge Sabraw.
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.
DEFENDANT Criminal Case No. 15-CR-2380-DMS
Jesus Manuel Salazar-Nunez Age: 35
SUMMARY OF CHARGES
Conspiracy to Import Methamphetamine, Cocaine and Heroin, in violation of Title 21, United States Code, Sections 952, 960 and 963.
Penalties: Mandatory Minimum 10 years and Maximum Life in Prison, $10,000,000 fine, $100 Special Assessment, Supervised Release up to Life
INVESTIGATING AGENCIES
Drug Enforcement Administration
Customs and Border Protection Office of Field Operations
Customs and Border Protection Office of Border Patrol
San Diego Law Enforcement Coordination Center
Homeland Security Investigations
Internal Revenue Service
Driver who Fled Border Patrol and Crashed While Transporting Unauthorized Immigrants Sentenced to 48 Months in PrisonRead the Press Release
Assistant U.S. Attorney Meghan Heesch (619) 546-9442
NEWS RELEASE SUMMARY – August 14, 2017
SAN DIEGO – Miguel Angel Tejada-Loaiza was sentenced in federal court today to 48 months in prison for transporting unauthorized immigrants and in the process fleeing U.S. Border Patrol Agents and crashing his vehicle into a guard rail.
Tejada-Loaiza, himself a Mexican citizen without status in the United States, drove six other unauthorized immigrants near the Otay Mesa Port of Entry after the group had unlawfully entered the United States. Two passengers were ejected from the vehicle and were hospitalized for several weeks with serious injuries.
On April 23, 2017, U.S. Border Patrol Agents spotted a Ford Expedition vehicle parked in an area where a seismic intrusion device had detected movement. An agent heard yelling coming from the vehicle and saw the driver, Tejada-Loaiza, signaling for people to enter the vehicle. Agents followed the Expedition in a marked Border Patrol unit and tried to pull the vehicle over. Tejada-Loaiza abruptly turned onto a north-bound road and sped up, failing to yield to the agents. Tejada-Loaiza reached speeds of approximately 75 miles per hour.
Tejada-Loaiza suddenly made a sharp turn, colliding with the end of the guardrail. The vehicle slid down an embankment, ejecting two passengers. One suffered major injuries that required emergency back surgery; he was on a ventilator in the hospital for over three weeks. The other was an unaccompanied minor who suffered lacerations on his face and body.
Tejada-Loaiza pleaded guilty to Illegal Transportation of Aliens for Financial Gain on May 23, 2017. In his plea, he acknowledged he knew he was in violation of immigration laws when he transported the six unauthorized immigrants in the vehicle. Tejada-Loaiza admitted the individuals he transported were paying others as much as $5,000 to be smuggled into the United States and transported illegally.
At sentencing, U.S. District Judge Larry A. Burns focused on the “callous” nature of Tejada-Loaiza’s decisions and noted that of the alien smuggling cases he has seen over the years, “this case is at the very aggravated end of the spectrum.”
“Smuggling endangers not only those being transported illegally, but the general motoring public,” said Acting U.S. Attorney Alana W. Robinson. “Smugglers commodify human beings, prioritizing profits over public safety. Our office will vigorously prosecute individuals who capitalize on the illegal smuggling of people into and within the United States.”
“The circumstances surrounding this case are tragic, and once again demonstrate the disregard for human life displayed by these smugglers,” said Chief Patrol Agent Richard A. Barlow, U.S. Border Patrol. “We are grateful to the U.S. Attorney’s Office for their hard work and dedication to punish the individuals who endanger the lives of so many people.”
DEFENDANT Case Number: 17CR1298-LAB
Miguel Angel Tejada-Loaiza Age: 21 Mazatlan, Sinaloa, Mexico
SUMMARY OF CHARGE
Illegal Transportation of Aliens for Financial Gain – Title 8, United States Code, Section 1324(a)(1)(A)(ii); Maximum Penalty: 10 years in prison.
AGENCY
U.S. Border Patrol
Singapore Executives Sentenced for Fraud in International Navy Corruption ScandalRead the Press Release
Two former executives of foreign defense contractor Glenn Defense Marine Asia (GDMA) were sentenced on Friday for conspiring to submit bogus claims and invoices to the U.S. Navy in an effort to win contracts and overcharge the U.S. Navy by tens of millions of dollars as part of a years-long corruption and fraud scheme.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Alana W. Robinson of the Southern District of California, Director Andrew L. Traver of the Naval Criminal Investigative Service (NCIS) and Director Dermot F. O’Reilly of the Defense Criminal Investigative Service (DCIS) made the announcement.
Neil Peterson, 39, and Linda Raja, 44, both of Singapore, were sentenced to 70 and 46 months, respectively, by U.S. District Judge Janis L. Sammartino of the Southern District of California. Both worked as chief deputies for GDMA, which was owned by Leonard Glenn Francis. Peterson served as the vice president for global operations for GDMA and Raja served as GDMA’s general manager for Singapore, Australia and the Pacific Isles.
Both defendants were arrested by authorities in Singapore at the request of the U.S. government and were extradited on Oct. 28, 2016. They each pleaded guilty in May 2017 to one count of conspiracy to defraud the United States with respect to claims.
According to admissions made as part of Peterson’s and Raja’s plea agreements, they and other members of GDMA’s management team created and submitted fraudulent bids that were either entirely fictitious, contained falsified prices supposedly from actual businesses, or fraudulently stated that the business shown on the letterhead could not provide the items or services requested. In this manner, Peterson, Raja and other members of GDMA’s core management team could ensure that GDMA’s quote would be selected by the U.S. Navy as the supposed low bidder. GDMA could thus control and inflate the prices charged to the U.S. Navy without any true, competitive bidding, as required, they admitted.
Peterson and Raja admitted that they and other members of the GDMA management team knowingly created and approved fictitious port authorities with fraudulently inflated port tariff rates, and approved the presentation of such fraudulent documents to the U.S. Navy. GDMA thus charged inflated prices to the U.S. Navy, rather than what GDMA actually paid to the bona fide port authorities.
For example, Peterson and Raja admitted that for the visit of the U.S.S. Bonhomme Richard to Kota Kinabalu, Malaysia, in or about October 2012, under the direction of Peterson and other members of GDMA's core management team, false documents and inflated invoices were presented to the U.S. Navy. The full amount billed to the U.S. Navy for this visit was $1,232,858, of which approximately $877,413 was fraudulently inflated, Peterson and Raja admitted.
Peterson and Raja admitted that losses to the U.S. Navy exceeded $34,800,000 as a result of this scheme.
So far, 17 of 27 defendants charged in the U.S. Navy bribery and fraud scandal have pleaded guilty. All defendants are presumed innocent unless and until convicted beyond a reasonable doubt in a court of law.
The DCIS, NCIS and the Defense Contract Audit Agency are investigating. Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California and are prosecuting the case. The Criminal Division’s Office of International Affairs provided substantial assistance in this matter.
Suspected Guadalajara Drug Kingpin Indicted in San Diego; U.S. Assets are Frozen by U.S. Treasury DepartmentRead the Press Release
Assistant U. S. Attorney Josh Jones (619) 546-9744
NEWS RELEASE SUMMARY – August 9, 2017
SAN DIEGO – A federal grand jury has indicted Raul Flores Hernandez, the suspected leader of a Guadalajara-based drug trafficking organization, for moving large quantities of cocaine from South America to Mexico for distribution and further transportation into the United States.
In a related move, the Department of Treasury’s Office of Foreign Assets Control (OFAC) today designated Flores Hernandez, plus 21 of his alleged criminal associates and 42 businesses and other entities affiliated with the trafficking organization as Significant Foreign Narcotics traffickers under the Foreign Narcotics Kingpin Designation Act. As a result of today’s action, all assets of the individuals and entities designated that are under U.S. jurisdiction or are in the control of U.S. persons are frozen.
The Flores Hernandez indictment, returned by a grand jury sitting in the Southern District of California on March 17, 2017, and unsealed July 20, 2017, resulted from an extensive investigation into the Flores organization conducted jointly by the Drug Enforcement Administration (DEA) in San Diego, Homeland Security Investigations in San Diego and the DEA country office in Guadalajara, Mexico.
In support of the Kingpin Act designation of Flores Hernandez, which was the result of its own concurrent investigation into the trafficking organization, OFAC has said that Flores Hernandez “has trafficked significant quantities of drugs, primarily cocaine, to the United States and has been engaged in these activities since the late 1970s.” OFAC emphasized Flores Hernandez’s cooperative relationship with the Sinaloa Cartel and the Cartel de Jalisco Nueva Generacion, which has led to Flores Hernandez amassing “great wealth, which he has invested into an extensive network of businesses and real estate located primarily in Guadalajara, Jalisco, Mexico.”
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.
DEFENDANT Case Number 17CR680-JAH
Raul Flores Hernandez, also known as “Tio” and “Senior” Age: 64 Guadalajara, Mexico
SUMMARY OF CHARGES
International Conspiracy to Distribute Controlled Substances – Title 21, U.S.C., Sections 959, 960 and 963
Maximum penalty: Life in prison; 10 year mandatory minimum; and $10 million fine
AGENCIES
Drug Enforcement Administration in San Diego and Guadalajara
Homeland Security Investigations in San Diego
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Navy Contractor Admits Accepting Funds from Port Engineer Administering Contracts Involving his CompanyRead the Press Release
Assistant U.S. Attorney Phillip L.B. Halpern (619) 546-6964
NEWS RELEASE SUMMARY – August 9, 2017
SAN DIEGO – Alfonso Liburd, the President and Chief Executive Officer of San Diego-based defense contractor NEVWEST, Inc. (“NevWest”), pleaded guilty today to improperly aiding and abetting Navy Port Engineer, John Nasshan (charged elsewhere), who improperly administered projects in which he (Nasshan) had a financial interest.
According to documents filed in Court, Nasshan had been employed at Southwest Regional Maintenance Center as a Combat Systems Port Engineer since March of 2009. As a Combat Systems Port Engineer, Nasshan drafted technical direction letters, recommended which contractors were qualified for jobs and verified and certified work performed on Navy ships by contractors. to federal law, Nasshan was prohibited from working on projects in which he had a personal financial interest. Despite this prohibition, Nasshan administered projects at the Navy’s Southwest Regional Maintenance Center involving work performed by Liburd and NevWest.
Nasshan made decisions and recommendations affecting Navy contracts with NevWest, Inc. even though he made personal loans to Liburd and NevWest, which is a conflict of interest. As detailed in government pleadings, between May 2011 and September 2015, Nasshan had a financial interest in the business affairs of NevWest. In particular, Nasshan loaned Liburd and NevWest more than $30,000 at the same time that NevWest was engaged in numerous subcontracts with Southwest Regional Maintenance Center. Liburd accepted these loans despite recognizing that Nasshan’s job required that he administer NevWest subcontracts.
In order to hide and conceal their illegal activity, Liburd and Nasshan agreed to keep their financial arrangement secret; to deal in cash when exchanging amounts over $10,000; and to structure the cash they were exchanging by dividing it up into amounts of $10,000 or less.
Liburd also lied to Defense Criminal Investigative Service agents regarding his relationship with Nasshan. In particular, on November 13, 2015, he falsely told a DCIS agent that he never: (i) received any money from Nasshan, including cash; (ii) paid Nasshan any money; or (iii) obtained any loans from Nasshan.
“As in all phases of the Government contracting process, it is essential that the work performed by contractors be done free of undue influence, bias, or favoritism,” said Acting U.S. Attorney Alana W. Robinson. “Accordingly, government officials and employees are prohibited from working on any and all matters that would affect their personal financial position.”
“The successful prosecution of this case was the direct result of collaborative teamwork between the Naval Criminal Investigative Service, our federal law enforcement partners and the U.S. Attorney's Office,” said Gunnar Newquist, Special Agent in Charge of the NCIS Southwest Field Office. “Convictions like this should be a warning to those who would attempt to take advantage of the U.S. Navy, for personal gain. We are unified in our efforts to catch criminals who not only defraud the U.S. Navy, but specifically are stealing money from the American taxpayers at the direct loss to our warfighters.”
Chris Hendrickson, Special Agent in Charge of the Defense Criminal Investigative Service's Western Field Office said: “DCIS and its partner agencies will aggressively investigate Department of Defense personnel who abuse their positions of trust and corruptly advance their own interests. This behavior tarnishes the integrity of the Department's procurement processes and erodes the public's faith in government.”
“The FBI seeks truth and justice in our investigations,” commented FBI Special Agent in Charge Eric S. Birnbaum. “Today’s conviction shows that the FBI, along with our investigative partners, will ultimately uncover the truth despite roadblocks created by those who stand to personally benefit from their lies.”
DEFENDANT: Case Number 17cr2189-JLS_
Alfonso Liburd Age: 67 Chula Vista, CA
SUMMARY OF CHARGES
Aiding and Abetting a Conflict of Interest – Title 18, U.S.C., Section 208 and 2
Maximum penalty: Five years in prison and $250,000 fine
AGENCIES
Federal Bureau of Investigation
Defense Criminal Investigative Service
Naval Criminal Investigative Service
Related Case:
DEFENDANT: Case Number 17cr1167_
John Nasshan Age: 55 Jamul, CA
SUMMARY OF CHARGES
Conflict of Interest – Title 18, U.S.C., Section 208
Maximum penalty: Five years in prison and $250,000 fine
AGENCIES
Federal Bureau of Investigation
Defense Criminal Investigative Service
Naval Criminal Investigative Service