Southern District of California
Press releases recorded for this federal judicial district.
Airline Staffing Executive Pleads Guilty to Immigration FraudRead the Press Release
Assistant U.S. Attorney Nicholas W. Pilchak (619) 546-9709
NEWS RELEASE SUMMARY – August 10, 2017
SAN DIEGO – The former Vice President of Operations for two airline mechanic staffing companies, Eleno Quinteros, Jr., pleaded guilty today to charges of making false statements in support of legal permanent resident petitions for dozens of the companies’ mechanics.
Quinteros admitted that he falsely certified that he had received no payments from the mechanics, when in fact he had demanded and collected hundreds of thousands of dollars of unlawful fees from approximately 85 of them.
According to the plea agreement, Quinteros demanded and collected as much as $567,480 from employees, even though employers are prohibited by law from demanding payment for their fees—including attorneys’ fees—in connection with the charged applications. Some of the money Quinteros collected was paid to attorneys assisting with the applications. The rest of the money was pocketed by Quinteros himself.
Quinteros was vice president of two different staffing companies, as set out in his plea agreement. The companies’ staff performed heavy maintenance on aircraft at a variety of locations nationwide. Quinteros was responsible for recruiting Mexican airline mechanics to work in the United States for the companies, and for helping recruits to obtain work visas such as TN or H-2B visas.
According to the indictment, Quinteros first assisted recruits in obtaining work visas to come to the United States. Quinteros then agreed to help at least 85 of them pursue a legal permanent residency—in exchange for substantial (and unlawful) fees. Quinteros directed many employees to pay money to his wife’s bank account, or provide him with blank money orders, in order to conceal the source of the unlawful funds.
Quinteros pleaded guilty to a single count of making a false claim in support of an immigration application, in violation of Title 18, United States Code, Section 1546(a). He admitted in his plea, however, that the underlying scheme involved more than 25 immigration documents.
“Legal permanent residency is not for sale,” said Acting U.S. Attorney Alana W. Robinson. “This Office is dedicated to fighting immigration fraud and prosecuting those who hawk lawful immigration status for their own personal financial gain.”
“The Diplomatic Security Service is committed to protecting the integrity of H-2B visas and all U.S. visas and travel documents that assist U.S. companies to legally employ foreign workers,” said Michael Bishop, Special Agent in Charge of the DSS Los Angeles Field Office. “This case is the result of the partnership among federal law enforcement agencies and DSS’ global network of special agents working together to interdict visa and passport crimes and stop criminals from reaping illegal income by exploiting U.S. visas, passports, and foreign workers.”
“Immigration benefit fraud is a serious crime, and those who corrupt the integrity of our nation’s legal immigration system must understand there are serious consequences for those actions,” said Joseph Macias, special agent in charge of Homeland Security Investigations (HSI) Los Angeles. “Not only do schemes like this potentially rob deserving immigrants of benefits they rightfully deserve, they also create a security vulnerability that could be exploited by criminals and others who pose a danger to our community. As the lead agency for the Los Angeles Document and Benefit Fraud Task Force, HSI will continue to work with our law enforcement partners to aggressively target those who conspire to manipulate and exploit our nation's legal immigration system for their own personal financial gain.”
“U.S. Citizenship and Immigration Services has zero tolerance for those who try to fraudulently misuse our country’s lawful immigration system,” said Susan Curda, USCIS District Director in Los Angeles. “We are proud of our role in uncovering this scheme and bringing the perpetrator to justice.”
Quinteros' sentencing is set for November 6, 2017 before Judge Michael M. Anello.
DEFENDANT Case No. 17-cr-557-MMA
“Max” Quinteros, Jr. Age: 45 Chula Vista, California
CHARGES
False Statement on an Immigration Document - 18 U.S.C. § 1546(a)
Maximum penalty: 10 years’ imprisonment and $250,000 fine
AGENCIES
Department of State, Diplomatic Security Service
Department of Homeland Security, Homeland Security Investigations
U.S. Citizenship and Immigration Services
Sinaloa Cartel Cell Leader Self-Surrenders at BorderRead the Press Release
Assistant U.S. Attorney Adam Braverman (619) 546-6717
NEWS RELEASE SUMMARY – August 7, 2017
SAN DIEGO – Sinaloa Cartel Cell Leader Damaso Lopez-Serrano, aka Mini Lic, was arraigned in federal court today following his self-surrender to United States law enforcement authorities at the Calexico West Port of Entry on July 27.
Lopez-Serrano, 29, is believed to be the highest-ranking Mexican cartel leader ever to self-surrender in the United States. Lopez-Serrano was arraigned on an indictment returned by a federal grand jury in San Diego on August 19, 2016, charging him and five of his close associates, including Nahum Sicairos-Montalvo, aka Kinceanero, with Conspiracy to Distribute Controlled Substances Intended for Importation and Conspiracy to Import Controlled Substances.
United States District Court Judge Dana M. Sabraw arraigned Lopez-Serrano on these charges today and unsealed the indictment against these two defendants. Lopez-Serrano did not seek bond and will remain in custody. A status hearing is scheduled for November 2, 2017 at 10 a.m. before Judge Sabraw.
The announcement was made by Attorney General Jeff Sessions, Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division and Acting U.S. Attorney for the Southern District of California Alana Robinson.
The United States also announced today the unsealing of an additional indictment returned December 4, 2016, in the Eastern District of Virginia by the U.S. Attorney’s Office for the Eastern District of Virginia and the Criminal Division’s Narcotic and Dangerous Drug Section charging father and son, Damaso Lopez Nunez and Damaso Lopez Serrano, respectively, with Conspiracy to Distribute Controlled Substances Intended for Importation. Damaso Lopez Nunez was arrested by Mexican authorities on May 2, 2017, and the United States is in the process of seeking his extradition on the December 4 indictment. Lopez Serrano will be arraigned on this indictment at a future date.
“At a time when more Americans than ever are dying from drug overdoses, the Department of Justice has made it a top priority to target the Mexican Cartel leaders responsible for the dangerous drugs that poison our families,” said Attorney General Sessions. “We will continue to go after these cartel leaders in order to dismantle their organizations from top to bottom, and today’s announcement should send them a clear message: you can turn yourselves in the easy way, or we will find you and bring you to justice the hard way. No matter what, you will face the consequences.”
“This extraordinary case is this district’s most significant, comprehensive and large-scale cartel prosecution,” said Acting U.S. Attorney Alana Robinson. “Today marks another important step in the dismantling of the Sinaloa Cartel and is a reflection of law enforcement’s focused efforts these last several years to put an end to this most powerful drug trafficking organization.”
“The arrest of this key cartel leader is a significant blow to the Sinaloa Cartel,” said DEA San Diego Special Agent in Charge William R. Sherman. “DEA remains vigilant in its mission to keep investigating this organization and arresting these individuals who sell their poison to the citizens of the United States.”
The Southern District of California indictment unsealed today marks the conclusion of the fourth phase of a five-year investigation that, in total, has resulted in charges against over 125 people and has had a significant impact on the worldwide operations of the Sinaloa Cartel. This investigation has also offered one of the most comprehensive views to date of the inner workings of one of the world’s most prolific, violent and powerful drug cartels. Cartel members and associates were targeted in this massive investigation involving multiple countries, numerous law enforcement agencies around the United States, a number of federal districts and over 250 court-authorized wiretaps in this district alone.
This case began in late 2011 as an investigation of what was at first believed to be a small-scale drug distribution cell in National City and Chula Vista. It became evident that the drugs were being supplied by the Sinaloa Cartel, and the case evolved into a massive multi-national, multi-state probe that resulted in scores of arrests and seizures of 1,397 kilograms of methamphetamine, 2,214 kilograms of cocaine, 17.2 tons of marijuana, 95.84 kilograms of heroin, and $27,892,706.00 in narcotics proceeds.
The primary indictment in this investigation was previously unsealed targeting the alleged leader of the cartel, Ismael Zambada-Garcia, known as “El Mayo,” as well as two of his four sons - Ismael Zambada-Sicairos, known as “Mayito Flaco,” and Ismael Zambada-Imperial, known as “Mayito Gordo.” Zambada-Imperial was arrested by Mexican authorities in November 2014 and is pending extradition to the Southern District of California. Also part of that indictment is Ivan Archivaldo Guzman-Salazar, known as “Chapito,” whose father Joaquín “El Chapo” Guzmán Loera was the alleged leader of the Sinaloa Cartel along with Mayo.
As part of this investigation, U.S. authorities previously arrested and prosecuted another son of Mayo - Serafin Zambada-Ortiz, who pleaded guilty in the Southern District of California in September 2014 to drug trafficking charges.
José Rodrigo Aréchiga-Gamboa, commonly referred to by his alias "El Chino Ántrax,” was arrested in the Netherlands, extradited to the United States by Dutch authorities in July 2014 and pleaded guilty to drug trafficking charges in May 2015. Arechiga-Gamboa is believed to have worked for the Sinaloa Cartel as the leader of a violent enforcement arm of the Sinaloa Cartel called “Los Antrax” and a key lieutenant of Mayo.
This case is the result of ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership that brings together the combined expertise and unique abilities of federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, dismantle and prosecute high-level members of drug trafficking, weapons trafficking and money laundering organizations and enterprises.
DEFENDANTS Case Number 16CR1896-DMS
Damaso Lopez-Serrano, aka Mini Lic Age: 29 Culiacan, Mexico
Nahum Abraham Sicairos-Montalvo, aka Kinceanero Age: 29 Culiacan, Mexico
SUMMARY OF CHARGES
Conspiracy to Distribute Controlled Substances for Purpose of Unlawful Importation, in violation of Title 21 U.S.C. §§ 959, 960 and 963; Term of custody including a mandatory minimum 10 years and up to life imprisonment, $10,000,000 fine and 5 years supervised release.
Conspiracy to Import Controlled Substances, in violation of Title 21 U.S.C. §§ 952, 960 and 963. Term of custody including a mandatory minimum 10 years and up to life imprisonment, $10,000,000 fine and 5 years supervised release.
AGENCIES
Drug Enforcement Administration
Homeland Security Investigations
Customs and Border Protection Office of Field Operations
Customs and Border Protection Office of Border Patrol
Internal Revenue Service
Federal Bureau of Investigation
United States Attorney’s Office, Northern District of Illinois
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.
Sinaloa Cartel Cell Leader Self-SurrendersRead the Press Release
A cell leader of the Sinaloa drug cartel was arraigned in federal court today following his self-surrender to U.S. law enforcement authorities at the Calexico West Port of Entry in California, on July 27.
Damaso Lopez-Serrano, aka Mini Lic, 29, is believed to be the highest-ranking Mexican cartel leader ever to self-surrender in the U.S. Lopez-Serrano was arraigned on an indictment returned by a federal grand jury in San Diego on Aug. 19, 2016, charging him and five of his close associates, including Nahum Sicairos-Montalvo, aka Kinceanero, with Conspiracy to Distribute Controlled Substances Intended for Importation and Conspiracy to Import Controlled Substances. U.S. District Court Judge Dana M. Sabraw arraigned Lopez-Serrano on these charges and unsealed the indictment against these two defendants.
The announcement was made by Attorney General Jeff Sessions, Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Alana Robinson for the Southern District of California and Special Agent in Charge William R. Sherman of the Drug Enforcement Administration’s San Diego Field Office.
The U.S. also announced today the unsealing of an additional indictment returned Dec. 14, 2016, in the Eastern District of Virginia by the U.S. Attorney’s Office for the Eastern District of Virginia and the Criminal Division’s Narcotic and Dangerous Drug Section charging father and son, Damaso Lopez Nunez and Damaso Lopez Serrano, respectively, with Conspiracy to Distribute Controlled Substances Intended for Importation. Damaso Lopez Nunez was arrested by Mexican authorities on May 2, and the U.S. is in the process of seeking his extradition on the December 14 indictment. Lopez Serrano will be arraigned on this indictment at a future date.
“At a time when more Americans than ever are dying from drug overdoses, the Department of Justice has made it a top priority to target the Mexican Cartel leaders responsible for the dangerous drugs that poison our families,” said Attorney General Sessions. “We will continue to go after these cartel leaders in order to dismantle their organizations from top to bottom, and today’s announcement should send them a clear message: you can turn yourselves in the easy way, or we will find you and bring you to justice the hard way. No matter what, you will face the consequences.”
The Southern District of California indictment unsealed today marks the conclusion of the fourth phase of a five-year OCDETF investigation Operation Narco Polo that, in total, has resulted in charges against over 125 people and has had a significant impact on the worldwide operations of the Sinaloa Cartel.
An indictment merely alleges that crimes have been committed, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt.
International Surrogacy Clients Defrauded in Racketeering SchemeRead the Press Release
Assistant U. S. Attorney Christopher P. Tenorio (619) 546-8413
NEWS RELEASE SUMMARY – August 7, 2017
SAN DIEGO – Acharyya Rupak, also known as Rudy Rupak, was sentenced today before U.S. District Court Judge Cynthia A. Bashant, and ordered to serve 24 months in custody for crimes relating to his international surrogacy company, Planet Hospital. Judge Bashant also ordered Rupak to pay a $10,000 fine, and scheduled a restitution hearing on September 13, 2017, to determine how much Rupak must pay back to his victims.
Rupak was the founder and operator of Planet Hospital (“PH”), beginning in approximately 2003. PH has had business addresses in San Diego, Calexico, and Calabasas, California. PH facilitated medical tourism services, which are the visit of foreign patients to hospitals across international borders in order to receive medical treatment, including organ transplants and cosmetic surgery. In approximately 2006, PH began offering international surrogacy services, which is a surrogacy agreement involving an overseas country, and generally involves the carrying of a pregnancy by a surrogate for intended parents.
Beginning in approximately September 2012, and continuing through at least January 2014, Rupak made interstate wire transfers, with the intent to facilitate commercial bribery, in violation of California law. In furtherance of the commercial bribery, Rupak solicited, and instructed PH employees to solicit, medical tourism and international surrogacy clients by falsely representing that their funds would be “set aside,” or put in escrow accounts, and used only to pay for medical services provided to the respective client. In some instances, however, Rupak caused funds obtained from new PH clients to be used to pay for services provided to existing PH clients.
In particular, in December 2013, Rupak directed a PH employee to solicit funds from PH clients by fraudulently representing that the clients’ funds would be maintained in an escrow account. The clients were also told their funds would be sent to My Donor Cycle, a San Diego-based business for surrogacy egg donation services. Rupak instructed the PH employee to make the representation to the clients, however, without the knowledge or consent of My Donor Cycle. On December 5, 2013, the PH clients wire-transferred $24,000 to a bank account controlled by Rupak. Rupak, however, did not place the funds into escrow. Instead, Rupak comingled some of their funds with funds received from another PH client. He then wire-transferred the combined funds to My Donor Cycle to pay for services already provided to prior PH clients.
Rupak also initially undercharged PH clients for the cost of medical tourism and international surrogacy services in order to induce them to begin services through PH without knowing that additional payments would be required. Rupak, however, often failed to forward PH clients’ funds to service providers. The service providers included the Fertility Clinic Cancun (“FCC”) and the IREGA Clinic (“IREGA”), which were clinics that provided surrogacy services in Cancun, Mexico. Rupak’s failure to forward client funds to FCC and IREGA caused the service providers to demand additional funds from the PH clients in order to initiate or continue international surrogacy services.
Rupak made several excuses to PH clients for its failure to provide successful surrogacy services. He created a fraudulent website and email address through which he sent unauthorized emails in the name of a clinic and its physician to PH clients in order give false excuses why PH had not provided promised services. Rupak also instructed PH employees to make misrepresentations to PH clients regarding prior medical tourism and international surrogacy successes, and that unsuccessful surrogacy procedures were the fault of foreign service-providers, restriction from foreign laws, or failed bank transactions.
Apart from his work on behalf of PH, in order to obtain employment unrelated to medical tourism or international surrogacy, Rupak identified himself with an alias to potential employers in order to conceal his true identity and pending fraud allegations.
Rupak acknowledged that he caused total losses of at least $247,620, although the total losses will be determined at the restitution hearing.
In imposing custody, Judge Bashant noted that Rupak lied to vulnerable victims who were sick, and who were desperate for children.
Acting U.S. Attorney Robinson said, “The defendant betrayed the trust placed in him by people desperate to have a child. By preying on their vulnerable emotions, he was able to extract more money on the false promise that he was doing everything possible to help them obtain a baby. To use the dream of parenthood as leverage for obtaining fraudulent proceeds is intolerable and heartbreaking.”
“Today's sentencing is justice overdue for the many victims affected by this defendant’s deceitful practices,” stated FBI Special Agent in Charge Eric S. Birnbaum. “Acharyya Rupak can no longer prey upon those desperate to have a family.”
DEFENDANT
Acharyya “Rudy” Rupak Age: 49
SUMMARY OF CHARGE Case Number: 16CR1896
Title 18, United States Code, Section 1952(a)(3)(interstate or foreign travel in aid of racketeering enterprise)
Maximum penalty: 5 years of custody; $250,000 Fine
AGENCY
Federal Bureau of Investigation
Former Facilities Manager Pleads Guilty to Embezzling from San Diego Workforce PartnershipRead the Press Release
Assistant U. S. Attorneys Emily Allen (619) 546-9738 and Benjamin Katz (619) 546-9604
NEWS RELEASE SUMMARY – August 3, 2017
SAN DIEGO – Jared Palmer, a former facilities manager for the San Diego Workforce Partnership, pleaded guilty today to embezzling more than $450,000 from the local Workforce Development Board that provides job training and placement to San Diego county residents and employers.
According to his plea agreement, Palmer, as facilities manager, was responsible for approving payment of invoices submitted by janitorial companies contracted to clean San Diego Workforce Partnership’s facilities. Between 2011 and 2016, Palmer instructed these contractors to purchase items that he claimed were for the Partnership’s use, including Nest Smart Thermostats, electronics, and pre-paid debit cards. Palmer then stole the items and replaced the invoices that included the cost of these stolen items with false invoices that made it appear as if all of the charges were for legitimate janitorial services. Over the course of five years, Palmer’s scheme netted him at least $455,606.
Because the Partnership, known as SDWP, is a Workforce Development Board funded largely by federal grant dollars, Palmer’s plea was to a count of Theft of Federal Program Funds, in violation of 18 U.S.C. § 666. Palmer’s plea agreement includes a restitution addendum, in which he agreed to pay SDWP back for his theft.
“This case represents the U.S. Attorney’s Office’s continued commitment to protecting non-profit organizations, especially those receiving federal grant money,” said Acting U.S. Attorney Alana W. Robinson.
“Jared Palmer, a former high level employee with the San Diego Workforce Partnership (SDWP), created and submitted fictitious invoices for janitorial services to SDWP in order to embezzle more than $450,000 in U.S. Department of Labor job training funds. Palmer’s actions deprived American workers from receiving critical job training services provided by SDWP. We will continue to work with our law enforcement partners to safeguard federal funds,” stated Abel Salinas, Special Agent-in-Charge of the Los Angeles Regional Office of the U.S. Department of Labor, Office of Inspector General.
“Mr. Palmer embezzled funds from the San Diego Workforce Partnership, which was providing a valuable and important service,” said Special Agent in Charge Eric S. Birnbaum. “Federal dollars were stolen as part of Mr. Palmer’s scheme. Simply, this will not be tolerated. The FBI will expose criminals who line their pockets out of greed and deceit while federally funded programs designed to help our community suffer.”
Palmer is scheduled to be sentenced on November 6, 2017.
DEFENDANT Case Number: 17-cr-2157-LAB
Jared Palmer Age: 41
SUMMARY OF CHARGES
Theft of Federal Program Funds, 18 U.S.C. § 666
Maximum penalty: 10 years’ imprisonment, fine double amount obtained, 3 years’ supervised release.
AGENCIES
Federal Bureau of Investigation – San Diego Field Office
U.S. Department of Labor – Office of Inspector General
Enforcer for Violent Gambling Organization Sentenced to 24 Months in PrisonRead the Press Release
Assistant U. S. Attorneys Benjamin Katz (619) 546-9604, Andrew Young (619) 546-7981 and Mark W. Pletcher (619) 546-9714
SAN DIEGO – Jack Rissell was sentenced today to 24 months in prison for his role as an enforcer in the gambling organization run by former USC football player Owen Hanson.
Rissell entered a guilty plea to Hobbs Act extortion on December 15, 2016. According to the plea agreement, Owen Hanson hired to travel from California to Minnesota to collect a gambling debt from an individual living in Minneapolis. The agreement between and Hanson included a “contact fee” – a premium or bonus for assaulting the victim. Once located the victim at his Minneapolis apartment, he carried out this assault by striking the victim in the face and demanding that the victim repay the gambling debt he owed to Hanson. During the confrontation, the victim’s son was present in the apartment. In a subsequent email to Hanson, described the attack saying, “he went down like a bag of potatoes.”
Before sentencing Rissell to 24 months imprisonment, Judge Hayes described the premium payment as “cold blooded” and called Rissell’s involvement with Hanson as “egregious conduct” that left the victim in terror.
In total, 21 of 22 defendants charged in relation to Hanson’s enterprise have entered guilty pleas. The remaining defendant, Khalid Petras, is set for trial on August 29, 2017. He is accused of money laundering and running an illegal gambling business. The charges against this defendant are merely accusations, and he is considered innocent until proven guilty.
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.
DEFENDANT Case Number: 15CR2310-WQH
Jack Rissell Age: 51
SUMMARY OF CHARGES
Hobbs Act Extortion, 18 U.S.C. § 1951
Maximum penalty: 20 years’ imprisonment, $250,000 fine, 3 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
Decorated Naval Aviator Steals $124,000 from Distinguished Flying Cross SocietyRead the Press Release
Assistant U.S. Attorney Phillip L.B. Halpern (619) 546-6964
NEWS RELEASE SUMMARY – July 25, 2017
SAN DIEGO – Decorated Naval Veteran Anthony Ventura admitted today in federal court that he used his position as treasurer of the Distinguished Flying Cross Society to embezzle $124,000 in charity funds.
The defendant had a distinguished military career in which he flew numerous combat missions in Vietnam. Among other honors, he was awarded, the Vietnam Service Medal, the Republic of Vietnam Campaign Medal, the National Defense Service Medal, the Bronze Star, and the Distinguished Flying Cross. Following his military career, he had a number of jobs, including serving as a Senior Vice President with Wachovia Securities, LLC.
The Distinguished Flying Cross (“DFC”) is awarded to aviators and aircrew for heroism or extraordinary achievement during aerial flight. The first DFC medal was awarded by President Coolidge to Captain Charles A. Lindbergh for his solo flight across the Atlantic Ocean in 1927. Other recipients include Commander Richard E. Byrd and Amelia Earhart. It is the only medal conferred by all five military services in all wars and campaigns since World War I.
The Distinguished Flying Cross Society (“DFCS”) is a national society formed to honor men and women who have been awarded the Distinguished Flying Cross. The Society was founded on fraternity and fellowship among military fliers. It seeks to preserve the rich heritage and historical narratives of those who are recipients of the DFC and to educate the public as to the value of courage, patriotism and character. Among other things, the DFCS Teams with other organizations (e.g., the Congressional Medal of Honor Foundation) to educate young Americas. It also awards scholarships to the descendants of DFCS members, who are pursuing degrees at accredited institutions of higher learning.
From on or about July 2012 through January 2016, Ventura served as the Treasurer for the DFCS. In this capacity, he had access to and control over the DFCS’s bank accounts, credit card accounts, and bookkeeping records. As Treasurer of the DFCS, Ventura was the custodian of all DFCS funds and had fiduciary responsibility to: (i) ensure that all funds were deposited in a bank designated by the Board of Directors; (ii) oversee the disbursal of funds as authorized by the Chairman, President, or Board of Directors; (iii) prepare financial reports for Board meetings; and (iv) submit tax returns as required by State and Federal authorities.
In 2014, as result of a series of unfortunate business decisions, the defendant filed for personal bankruptcy. At this point, he had insufficient funds on hand to perform a number of activities, such as trading stocks and maintaining his stable of horses. In order to maintain his lifestyle, Ventura opened up a bank account at the Travis Credit Union that he concealed from the Board of Directors of the DFCS. He then transferred $124,000 of DFCS assets to the Travis Credit Union account. He used these funds for a variety of personal activities, including: (i) $30,561 to run his personal horse stable (“Sovran Star Stables); (ii) $67,000 to purchase stocks/bonds through a company he set up for that purpose (“Ironbeam LLC”); and (iii) $25,600 in cash withdrawals to cover personal living expenses. In order to conceal and disguise his theft of DFCS funds, Ventura created fake quarterly financial summaries for the DFCS Board of Directors.
In addition to the embezzlement of DFCS funds, Ventura also filed a false Charitable Organization Tax Form, Form 990-EZ, for the calendar year 2014. This return, which was verified by a written declaration that it was made under the penalties of perjury, falsely reported that the DFCS had cash, savings, and investments in the amount of $148,049, whereas in truth and fact, it had only $15,810.80 as Ventura had removed and converted to his personal use the rest of its funds.
“Regardless of how significant an individual’s contribution is to our society or how desperate their financial condition, there can be no excuse for stealing charitable funds that are destined for the awarding of scholarships,” said Acting U.S. Attorney Alana Robinson.
“The FBI is proud to serve this organization of war heroes by uncovering a scheme that stripped their funds intended for charitable and noble purposes," said Special Agent in Charge Eric S. Birnbaum.
“It is unfortunate that Naval Veteran Anthony Ventura’s service to this country will now be tarnished by his decision to embezzle funds from the Distinguished Flying Cross Society, which also led him to file a fraudulent tax return on its’ behalf,” stated Special Agent in Charge R. Damon Rowe for IRS Criminal Investigation. “Mr. Ventura ignored his duty to file an accurate tax return and will now be labeled a convicted felon, in addition to a decorated naval aviator.”
DEFENDANT: Case Number 17cr1271-JLS
Anthony Ventura Age: 71 Lincoln, CA
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
AGENCY
Federal Bureau of Investigation
Internal Revenue Service - CI
Los Angeles Private Investigator Sentenced to Prison for Role in Violent Gambling OrganizationRead the Press Release
Assistant U. S. Attorneys Benjamin Katz (619) 546-9604, Andrew Young (619) 546-7981 or Mark W. Pletcher (619) 546-9714
NEWS RELEASE SUMMARY – July 24, 2017
SAN DIEGO – Daniel Portley-Hanks, a Los Angeles based private investigator, was sentenced today to 16 months in prison for his role in the gambling organization run by former USC football player Owen Hanson.
Portley-Hanks entered a guilty plea to Hobbs Act extortion on December 27, 2016. According to his plea agreement, he was paid $7,000 by Hanson to drive from Los Angeles to a Pennsylvania cemetery where the family burial plot of an individual who owed Hanson’s organization money was located. Once there, Portley-Hanks took photos of the family tombstone, splattered it with red paint, and later altered the photographs to add the targeted individual’s name and the words “Very Soon” as the date of death. Another photo was altered to include an image of a masked Hanson standing over the family grave with a shovel. The photos and other documents created by Portley-Hanks were then mailed to the individual along with a video depicting two beheadings.
The government’s sentencing documents attached numerous emails between Hanson and Portley-Hanks that showed that for a period of more than three years, Portley-Hanks assisted Hanson’s organization by running background and location checks on gamblers and law enforcement officers, conducting surveillance, and connecting Hanson with Jack Rissell, another co-defendant who served as an “enforcer” for Hanson’s enterprise.
Rissell – who also pleaded guilty to extortion – is scheduled to be sentenced on July 31, 2017. In total, 21 of 22 defendants charged in relation to Hanson’s enterprise have entered guilty pleas. The remaining defendant, Khalid Petras, is set for trial on August 29, 2017. He is accused of money laundering and running an illegal gambling business. The charges against this defendant are merely accusations, and he is considered innocent until proven guilty.
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.
DEFENDANT Case Number: 15CR2310-WQH
Daniel Portley-Hanks Age: 71
SUMMARY OF CHARGES
Hobbs Act Extortion, 18 U.S.C. § 1951
Maximum penalty: 20 years’ imprisonment, $250,000 fine, 3 years’ supervised release.
AGENCY
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
Lemon Grove Woman Sentenced to 14½ Years in Prison for Using Stolen IDs to File Fraudulent Returns Seeking More than $2 Million in RefundsRead the Press Release
Assistant U. S. Attorney Christopher P. Tenorio (619) 546-8413
NEWS RELEASE SUMMARY – July 12, 2017
SAN DIEGO – Cynthia Lozano of Lemon Grove was sentenced in federal court today to 175 months in prison in connection with two complex frauds involving identity theft, false tax returns and hundreds of unwitting victims. The second fraud scheme was committed while she was awaiting sentencing for the first one. In total, Lozano sought over $2 million in refunds from false tax returns
Lozano, who appeared before U.S. District Court Judge Anthony J. Battaglia, was also ordered to pay $1,479,134.77 in restitution to the Internal Revenue Service and Department of Housing and Urban Development (“HUD”). In all, the defendant was sentenced for 84 counts of mail and wire fraud, false claims and aggravated identity theft.
In April 2013, Lozano was charged in a 33-count indictment (13CR1354-AJB) for filing false tax returns in the names of persons who were often unaware that she used their names and Social Security numbers to defraud the IRS. Lozano directed the IRS to deposit tax refunds via electronic transfer into bank accounts opened under the names of her relatives and associates. For some actual tax-preparation clients, Lozano claimed a larger refund from the IRS than she represented to her clients. She directed the IRS to deposit the excess amounts in one of the bank accounts under her control without her clients’ knowledge.
On February 13, 2015, Lozano pleaded guilty to aggravated identity theft and participation in her fraudulent scheme. In total, Lozano used the identities of over 200 victims to file over 400 federal tax returns, resulting in her receipt of over $1.5 million in fraudulently-obtained tax refunds between 2008 and 2013. Lozano used the majority of the funds obtained from her initial scheme to purchase 20 properties in and around Phoenix, Arizona. But her criminal conduct did not stop.
In June 2015, while Lozano was awaiting sentencing, agents from the Internal Revenue Service - Criminal Investigations (“IRS-CI”) and Department of Treasury, Inspector General for Tax Administration (“TIGTA”) discovered that Lozano filed additional federal tax returns in a manner similar to her previous scheme. Lozano was subsequently charged in a second indictment (16CR1332-AJB) with 51 additional counts, including false claims to the IRS, wire and mail fraud, and aggravated identity theft.
Some of the victims of Lozano’s 2015 scheme were actual or prospective tenants at the Arizona properties purchased by Lozano with funds from her earlier scheme. After Lozano purchased the properties, she transferred titles to the name of her mother, who does not live in the United States. Using her mother’s name as an alias, Lozano obtained authorization to rent some of the Arizona properties under the Section 8 Tenant-Based Assistance Housing Choice Voucher Program (“Section 8 program”) administered by the Department of Housing and Urban Development (“HUD”). Through the Section 8 program, a local Public Housing Authority supplements rent to a qualifying property owner on behalf of qualifying tenants. Lozano submitted false documents under her alias to HUD, under penalty of perjury, to qualify for supplemental rental payments under the Section 8 program.
For the 2015 scheme, Lozano obtained the names and Social Security numbers from her Section 8 tenants, and others who submitted rental applications to Lozano. She used their names and numbers to submit additional false federal tax returns. Lozano then directed the IRS to deposit the tax refunds into new bank accounts she opened with the assistance of two co-conspirators, Gerardo Baker and David Hernandez. Baker and Hernandez have since pleaded guilty and been sentenced for their participation in the conspiracy.
Lozano pleaded guilty to two counts of the first indictment (13CR1354-AJB) on February 13, 2015, and the remaining 31 counts on August 31, 2016. She pleaded guilty to all 51 counts of the second indictment (16CR1332-AJB) on November 15, 2016.
At sentencing, Judge Battaglia took special account of the fact that Lozano committed additional criminal conduct while out on bail. He said it was “a unique case that needs to be treated uniquely.” As part of the sentence, Judge Battaglia ordered that the restitution include $107,194 to HUD for the supplemental rental payments that Lozano she received as a result of her false statements. A status hearing regarding forfeiture of the properties Lozano purchased with the proceeds from the original scheme is scheduled for August 25, 2017.
Acting U.S. Attorney Robinson said, “The lying, cheating defendant went on a white-collar crime spree that continued even after she got caught. It is astounding that she committed a second major fraud while awaiting sentencing for the first. Her greed-fueled rampage ends today, with a sentence that recognizes the significant losses suffered by her victims, including U.S. taxpayers.”
“Using stolen identities, Cynthia Lozano filed hundreds of fraudulent tax returns, cheating the U.S. Treasury out of more than $1.5 million,” said Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division. “She preyed on low income individuals, ripping off their personal information to file bogus tax returns and brazenly continued her criminal conduct even while awaiting sentencing in federal court on tax fraud and identity theft charges. Her 14 1/2 year sentence sends a clear message that the Department and IRS will aggressively investigate and prosecute those who steal taxpayer identities and file fraudulent claims for refund.”
“Individuals who commit refund fraud and identity theft of this magnitude and with this degree of trickery, dishonesty and deceit, deserve to be punished to the fullest extent of the law,” stated IRS Criminal Investigation Special Agent in Charge R. Damon Rowe. “IRS Criminal Investigation, along with our law enforcement partners and the United States Attorney’s Office and the Justice Department’s Tax Division, remain vigilant in identifying, investigating and prosecuting those individuals who seek to willfully defraud the United States Treasury and blatantly disregard the victims of their schemes.”
“This is a case about the irresistibility of greed,” said Rod Ammari, Special Agent in Charge, San Francisco Field Division, TIGTA Office of Investigations. “Even though Ms. Lozano had pleaded guilty and awaited sentencing on 51 counts of aggravated identity theft, wire and mail fraud, she could not resist the temptation of engaging in additional criminal illegal schemes to steal more identities and file additional fraudulent tax returns -- 69 new fraudulent tax returns to be exact.
“Fortunately, we were able to bring this individual to justice for the additional crimes she committed. We wish to thank our law-enforcement partners at the Justice Department and IRS Criminal Investigation for their outstanding collaboration and teamwork during this long and complicated investigation.”
DEFENDANT
Cynthia Lozano Age: 35
SUMMARY OF CHARGE
Case Number: 13CR1354-AJB
- 1-13: Title 18, United States Code, Section 287 (false claims)
Maximum penalty: 5 years of custody; $250,000 Fine
Counts 14-25: Title 18, United States Code, Section 1343 (wire fraud)
Maximum penalty: 20 years of custody; $250,000 Fine
Count 26: Title 18, United States Code, Section 1341 (mail fraud)
Maximum penalty: 20 years of custody; $250,000 Fine
Counts 27-33 Title 18, United States Code, Section 1028A (aggravated identity theft)
Minimum penalty: 2 years of custody, consecutive to sentence for other crimes; No Probation; Fine same as for underlying offense
Case Number: 16CR1332-AJB
Count 1: Title 18, United States Code, Section 371 (conspiracy)
Maximum penalty: 5 years of custody; $250,000 Fine
Counts 2-15: Title 18, United States Code, Section 287 (false claims)
Maximum penalty: 5 years of custody; $250,000 Fine
Counts 16-17: Title 18, United States Code, Section 1343 (wire fraud)
Maximum penalty: 20 years of custody; $250,000 Fine
Count 18-29: Title 18, United States Code, Section 1341 (mail fraud)
Maximum penalty: 20 years of custody; $250,000 Fine
Counts 30-37: Title 18, United States Code, Section 641 (theft of government property)
Maximum penalty: 10 years of custody; $250,000 Fine
Counts 38-51: Title 18, United States Code, Section 1028A (aggravated identity theft)
Minimum penalty: 2 years of custody, consecutive to sentence for other crimes; No Probation; Fine same as for underlying offense
AGENCIES
Internal Revenue Service - Criminal Investigations (“IRS-CI”)
Department of Treasury, Inspector General for Tax Administration (“TIGTA”)
California Tax Preparer Sentenced to More Than 14 Years in Prison for Using Stolen IDs to File Fraudulent Returns Seeking More Than $2 Million in RefundsRead the Press Release
A Lemon Grove, California woman was sentenced to serve 175 months in prison for her role in two stolen identity refund fraud schemes, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Alana W. Robinson of the Southern District of California.
In April 2013, Cynthia Lozano was charged in a 33-count indictment for using stolen identities to file fraudulent tax returns with the Internal Revenue Service (IRS). According to the indictment as well as documents and information provided to the court, Lozano directed the IRS to deposit the refunds into bank accounts in the names of her relatives and associates. For some actual tax-preparation clients, Lozano claimed a larger refund from the IRS than she represented to her clients. She directed the IRS to deposit the excess amounts into a bank account she controlled without her clients’ knowledge.
On Feb. 13, 2015, Lozano pleaded guilty to aggravated identity theft and participation in her fraudulent scheme. In total, Lozano used the identities of over 200 victims to file over 400 returns, resulting in her receipt of approximately $1.5 million in fraudulently obtained refunds between 2008 and 2013.
In June 2015, while Lozano was awaiting sentencing, agents from the IRS Criminal Investigation (CI) and Department of Treasury, Inspector General for Tax Administration (TIGTA) discovered that Lozano filed additional fraudulent returns in a manner similar to her previous scheme. Lozano was subsequently charged in a second indictment with 51counts, including filing false claims for refund, wire and mail fraud, and aggravated identity theft.
Some of the victims of Lozano’s 2015 scheme were actual or prospective tenants of properties she purchased and titled in the name of her relative, who does not live in the United States. Using her relative’s name as an alias, Lozano obtained authorization to rent some of the Arizona properties under the Section 8 Tenant-Based Assistance Housing Choice Voucher Program (Section 8 program) administered by the Department of Housing and Urban Development (HUD). Through the Section 8 program, a local Public Housing Authority (PHA) supplements rent to a qualifying property owner on behalf of eligible tenants. Lozano submitted false documents under her alias to HUD, under penalty of perjury, to qualify for supplemental rental payments under the Section 8 program.
For the 2015 scheme, Lozano stole the names and social security numbers from her Section 8 tenants, and others who submitted rental applications to Lozano and used them to file additional false returns. Lozano then directed the IRS to deposit the refunds into bank accounts she opened with the assistance of two co-conspirators, Gerardo Baker and David Hernandez. Baker and Hernandez have since pleaded guilty and been sentenced for their participation in the conspiracy.
“Using stolen identities, Cynthia Lozano filed hundreds of fraudulent tax returns, cheating the U.S. Treasury out of more than $1.5 million,” said Acting Deputy Assistant Attorney General Goldberg. “She preyed on low income individuals, ripping off their personal information to file bogus tax returns and brazenly continued her criminal conduct even while awaiting sentencing in federal court on tax fraud and identity theft charges. Her 14 1/2 year sentence sends a clear message that the Department and IRS will aggressively investigate and prosecute those who steal taxpayer identities and file fraudulent claims for refund.”
“The lying, cheating defendant went on a white-collar crime spree that continued even after she got caught,” said Acting U.S. Attorney Robinson. “It is astounding that she committed a second major fraud while awaiting sentencing for the first. Her greed-fueled rampage ends today, with a sentence that recognizes the significant losses suffered by her victims, including U.S. taxpayers.”
“Individuals who commit refund fraud and identity theft of this magnitude and with this degree of trickery, dishonesty and deceit, deserve to be punished to the fullest extent of the law,” said Special Agent in Charge R. Damon Rowe of IRS-CI. “IRS Criminal Investigation, along with our law enforcement partners and the U.S. Attorney’s Office and the Justice Department’s Tax Division, remain vigilant in identifying, investigating and prosecuting those individuals who seek to willfully defraud the U.S. Treasury and blatantly disregard the victims of their schemes.”
“This is a case about the irresistibility of greed,” said Special Agent in Charge Rod Ammari of TIGTA Office of Investigations San Francisco Field Division. “Even though Ms. Lozano had pleaded guilty and awaited sentencing on 51 counts of aggravated identity theft, wire and mail fraud, she could not resist the temptation of engaging in additional criminal illegal schemes to steal more identities and file additional fraudulent tax returns -- 69 new fraudulent tax returns to be exact.”
In addition to the terms of prison imposed, U.S. District Court Judge Anthony J. Battaglia ordered Lozano to serve three years of supervised release, to pay $1.479 million in restitution to include the IRS and HUD. Lozano is alleged to have used illegal proceeds from the first scheme to purchase properties in and around the Phoenix, Arizona area. A forfeiture hearing will be scheduled at a later date. Lozano pleaded guilty to two counts of the first indictment on Feb. 13, 2015, and the remaining 31 counts on Aug. 31, 2016. She pleaded guilty to all 51 counts of the second indictment on Nov. 15, 2016.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Robinson commended special agents of IRS–CI and TIGTA, who conducted the investigation, and Trial Attorney Thomas Flynn of the Tax Division and Assistant U.S. Attorney Christopher Tenorio, who prosecuted this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Accomplice Sentenced in Deaths of Two Immigrants Smuggled in Trunk at San Diego-Tijuana BorderRead the Press Release
Special Assistant U.S. Attorney Beena M. McDonald (619) 546-9774
Assistant U.S. Attorneys Patrick J. Bumatay (619) 546-8450 and Michael Wheat (619) 546-8437
NEWS RELEASE SUMMARY – July 10, 2017
SAN DIEGO – Pedro Velasco-Manzano was sentenced in federal court today to 12 months in custody for actions that ultimately resulted in the deaths of two unauthorized immigrants who perished in the trunk of a car at the San Ysidro Port of Entry in August 2014.
As part of the plea agreement, Velasco-Manzano, a citizen of Mexico, admitted he helped arrange the smuggling of Mexican citizens Tarcisio Casas-Blanco and Jose Aurelio Quiroz-Casas into the United States in August 2014 for a fee of $11,500 – an amount that included his $200 take. After speaking directly with the victims, Velasco-Manzano arranged for them to be housed in Tijuana until plans for a smuggling event could be made by his superiors. Velasco-Manzano then transported the victims from their stash house and delivered them directly to the smugglers, Nicholas George Zakov and Eduard Ervemac Saavedra.
Saavedra enticed Zakov to smuggle the victims into the United States with the prospect of $3,500 cash. On the morning of August 12, 2014, Saavedra arranged for the two victims to be hidden in the trunk of Zakov’s Dodge Challenger in Tijuana, Mexico. Saavedra then directed Zakov to enter the United States through the San Ysidro Port of Entry with Casas-Blanco and Quiroz-Casas remaining in the trunk, exposing them to rising temperatures and little ventilation. U.S. Customs and Border Protection officers later discovered Casas-Blanco and Quiroz-Casas unresponsive inside the Challenger’s trunk. Medical attention was immediately sought for the two, but they died a short while later of hyperthermia and mechanical asphyxiation.
Zakov, a U.S. citizen, pleaded guilty in 2015 to alien smuggling charges for his role in the deaths of the victims and was sentenced to 84 months in prison. Saavedra, a Peruvian citizen, pleaded guilty in 2016 to alien smuggling charges for his role in the deaths of the victims and was sentenced to 63 months in prison. U.S. District Judge Anthony J. Battaglia sentenced Zakov, Saavedra, and now Velasco-Manzano.
The investigation and arrest of Velasco-Manzano was the result of the collaboration of Homeland Security Investigations, U.S. Customs and Border Protection, San Diego Police Department, and the Baja California State Preventive Police Department.
DEFENDANT Criminal Case No. 17CR0561-AJB
Pedro Velasco-Manzano Age: 44 Oaxaca, Mexico
SUMMARY OF CHARGES
Counts 1 and 2: Encouraging and Inducing Illegal Aliens, Aiding and Abetting, 8 U.S.C. §1324(a)(1)(A)(iv), and (v)(II)
INVESTIGATING AGENCIES
U.S. Customs and Border Protection
Homeland Security Investigations
San Diego Police Department
Baja California State Preventive Police Department
U.S. Border Patrol Agent Pleads Guilty to Drug SmugglingRead the Press Release
Assistant U. S. Attorney David Leshner (619) 546-7921
NEWS RELEASE SUMMARY – June 22, 2017
SAN DIEGO – U.S. Border Patrol Agent Noe Lopez pleaded guilty to drug trafficking charges in federal court today, admitting that he attempted to smuggle methamphetamine and cocaine while on duty in exchange for cash.
In a hearing before U.S. Magistrate Judge Andrew G. Schopler, Lopez pleaded guilty to two counts of attempted distribution of methamphetamine and cocaine, in violation of 21 U.S.C. §§ 841 (a) (1) and 846. Sentencing is scheduled for September 8, 2017 at 9 a.m. before U.S. District Judge Dana M. Sabraw.
“It’s an audacious thing for an on-duty Border Patrol agent to transport what he believes to be methamphetamine and cocaine in his official vehicle, on behalf of drug traffickers,” said Acting U.S. Attorney Alana W. Robinson. “While there are a relatively small number of them, corrupt Border Patrol agents are a national security threat, and for that reason they are a very high prosecutorial priority.”
“The U.S. Border Patrol stresses honor and integrity in every aspect of our mission; Honor First is our Motto,” said Chief Patrol Agent Richard A. Barlow of San Diego Sector Border Patrol. “Mr. Lopez’ action is a stain on the agents and employees of the Border Patrol who perform their duties with honor and distinction, working diligently day-to-day to keep our country safe. We do not tolerate corruption within our ranks, and are grateful to the hard work of the Border Corruption Task Force and other agencies that rooted out Mr. Lopez’ atrocious behavior.”
FBI Special Agent in Charge Eric S. Birnbaum said, “The vast majority of public servants who work at the local, state, and federal levels of government are honest and dedicated folks who strive every day to do the right thing for their constituents, their communities, and their country. In the U.S. and abroad, the FBI is doing everything we can to help ensure that the good name of the vast majority of public servants is not besmirched by a corrupt few. This type of corruption at our San Diego borders strikes at the heart of government and erodes public confidence, therefore, the investigation of public corruption is one of FBI’s top criminal priorities.”
According to the plea agreement, in November 2016, Lopez and a confidential source whom Lopez believed to be a drug trafficker agreed to a plan whereby Lopez would retrieve backpacks containing what Lopez believed to be controlled substances from the north side of the United States/Mexico border fence while on duty with the Border Patrol.
Lopez admitted that he agreed to transport the backpacks in his Border Patrol vehicle and deliver them to the source in exchange for thousands of dollars.
On November 30, 2016, Lopez purchased three backpacks that would be used to transport the controlled substances and gave the backpacks to the source. They agreed that on December 6, 2016, Lopez would retrieve a backpack containing six pounds of methamphetamine while on duty with the Border Patrol and deliver the backpack to the source. Lopez told the source where to place the backpack containing methamphetamine on the north side of the United States/Mexico border.
According to Lopez’s admissions in his plea agreement, on December 6, 2016, undercover DEA agents placed a backpack (one of the three backpacks purchased by Lopez) containing six pounds of a substance resembling methamphetamine near the prearranged location. Lopez drove to the location in his Border Patrol vehicle and retrieved the backpack. He returned to the Border Patrol Station and placed the backpack in his personal vehicle. At the conclusion of his Border Patrol work shift, Lopez met the source at a parking lot in Chula Vista, where Lopez gave the source the backpack containing what Lopez believed to be six pounds of methamphetamine.
On December 7, 2016, the source paid Lopez $3,000 for retrieving and delivering the purported methamphetamine.
This scenario was repeated on December 8, 2016, except the backpack purportedly contained seven kilograms of cocaine. On December 9, 2016, the source paid Lopez $7,000 for retrieving and delivering the purported cocaine.
DEFENDANT Case Number 17cr0086
Noe Lopez Age: 37 Chula Vista, CA
SUMMARY OF CHARGES
Attempted Distribution of Methamphetamine and Cocaine, in violation of 21 U.S.C. 841 (a) (1) and 846
Maximum penalty: Life in prison and $10 million fine
AGENCIES
Federal Bureau of Investigation
U.S. Drug Enforcement Agency
U.S. Border Patrol
Bank Executive Pleads Guilty to FraudRead the Press Release
Assistant U. S. Attorney Andrew P. Young (619) 546-7981
NEWS RELEASE SUMMARY – June 20, 2017
SAN DIEGO – A former executive at Vibra Bank pleaded guilty to causing the filing of false bank reports today, admitting that he caused Vibra Bank to create false anti-money laundering reports as part of an effort to conceal his role in a scheme to structure $70,000 in cash deposits into numerous bank accounts at the bank.
According to a plea agreement, in June 2010, Dan Schon was a Senior Vice President at Vibra Bank. According to the plea agreement, on June 9 and June 10, 2010, Schon and another individual structured approximately $70,000 in cash deposits into various bank accounts at the bank. As part of the plea agreement, the defendant acknowledged that after he participated in the structuring scheme, he was approached by Vibra Bank personnel who had discovered the transactions and were investigating the transactions as part of an Anti-Money Laundering program. During his interview, Schon made at least five false statements to the Vibra Bank employees who then incorporated those false statements into an Anti-Money Laundering report.
Among the false statements made by Schon was a claim that all of the money he deposited was his, that the money he wired to another individual was intended as an investment related to oil and gas, and that he had no knowledge of any of the other structured deposits.
“Today’s guilty plea shows Homeland Security Investigation’s commitment to disrupt financial crimes at the highest levels,” said Dave Shaw, special agent in charge for HSI San Diego. “HSI special agents are highly trained to detect violations of the anti-money-laundering rules at all levels in U.S. financial systems.”
Schon is scheduled to be sentenced on August 21, 2017 at 9 a.m. before U.S. District Judge Michael M. Anello.
DEFENDANT Case Number
Dan Schon Age: 35 Residence: Mexico City
SUMMARY OF CHARGES
Making a False Statement to a Bank, 18 U.S.C. 1005
Maximum Penalties: 30 years in prison and $1 million fine.
INVESTIGATING AGENCY
Department of Homeland Security
Three Defendants Indicted in One of Nation’s Largest-Ever Fentanyl SeizuresRead the Press Release
Assistant U.S. Attorney Jarad E. Hodes (619) 546-7432
NEWS RELEASE SUMMARY – June 19, 2017
SAN DIEGO – A long-term investigation by the U.S. Drug Enforcement Administration has led to one of the nation’s largest seizures of the deadly synthetic opiate fentanyl and a federal indictment against three alleged traffickers.
According to the indictment unsealed today, Jonathan Ibarra, Hector Fernando Garcia and Anna Baker are charged with possession of 44.14 kilograms of fentanyl with the intent to distribute. Most of the fentanyl was seized from a house in Lemon Grove.
According to a search warrant affidavit, the defendants discussed the transportation of a then-unidentified controlled substance. On November 30, 2016, Ibarra received instructions to have a female courier, later identified as Baker, transport the narcotics in three separate trips on consecutive days.
Based on this information, agents requested a traffic stop of Baker’s rented vehicle and seized about 15 kilograms of a substance later determined to be fentanyl. Law enforcement officers then obtained a search warrant for Baker’s residence, where they found about 30 additional kilograms of the same substance.
Drug traffickers use the pure fentanyl powder to increase the potency of heroin or to manufacture counterfeit opioid painkillers that resemble oxycodone. Due to fentanyl’s extreme potency - up to 50 times stronger than heroin - deaths from fentanyl-laced heroin and counterfeit pills are epidemic in the United States. Considering that just 3 milligrams is enough to kill an adult male, the 44.14 kilogram seizure represents over 14 million lethal doses. The attached photo, prepared by the San Diego County Medical Examiner, shows the lethal dose of fentanyl on a penny.
The defendants were arraigned on the indictment today before U.S. Magistrate Judge Barbara L. Major.
This case is also the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF) a partnership that brings together the combined expertise and unique abilities of federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, dismantle and prosecute high level members of drug trafficking, weapons trafficking and money laundering organizations and enterprises.
*The charges and allegations contained in the indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.
DEFENDANTS
Jonathan Ibarra Age: 45 Lemon Grove, California
Hector Fernando Garcia Age: 46 San Diego, California
Anna Baker Age: 30 Lemon Grove, California
SUMMARY OF CHARGES
Possession of Fentanyl with Intent to Distribute – Title 21, U.S.C., Section 841(a)(1)
Maximum penalty: Life in prison and $10,000,000 fine
AGENCY
United States Drug Enforcement Administration
Tax Preparers and Recruiter Who Preyed on Immigrants Sentenced to PrisonRead the Press Release
Assistant U.S. Attorney Joseph J.M. Orabona (619) 546-7951
NEWS RELEASE SUMMARY – June 19, 2017
SAN DIEGO – Two local tax preparers and their recruiter were sentenced today in federal court to 30 months in prison for their involvement in a tax preparation scam that resulted in the filing of hundreds of false returns, the theft of dozens of victims’ personal information and the receipt of more than $882,000 in bogus federal income tax refunds.
U.S. District Judge Roger T. Benitez sentenced Rahim Ali Cummings and Rashad Abdul-Rahim for conspiring to commit mail fraud, file false claims for tax refunds, fraudulent use of a Social Security number (SSN) and aggravated identity theft; Ebrahim Ashamu was sentenced for filing false claims for tax refunds and aggravated identity theft. Each of the defendants has been in custody since last year.
As detailed in their plea agreements, between September 2011 and September 2012, Cummings and Ashamu prepared and filed the false tax returns out of their businesses in El Cajon, California, and employed the services of Abdul-Rahim to recruit customers and obtain stolen identities. Abdul-Rahim solicited and obtained the personal identifying information from the victims using false pretenses, such as informing the victims they could obtain “free” government money from alleged grant and senior programs, and concealing the fact that their personal information would be used to file false tax returns.
Abdul-Rahim then provided Cummings and Ashamu with the personal information of the victims, which they used to prepare and file the false tax returns with the Internal Revenue Service (IRS). An investigation by IRS, Criminal Investigation and the United States Secret Service showed that Cummings, Ashamu, and Abdul-Rhaim defrauded customers from their ethnic community, many of whom were immigrants from countries such as Somalia and Nigeria who knew very little, if anything, about the United States tax laws.
Cummings, Ashamu, and Abdul-Rahim did not shy away from personally profiting from their fraudulent scheme. Each defendant directed the fraudulent tax refunds to be deposited into bank accounts under their control and ordered U.S. Treasury checks to be mailed to addresses under their control. In particular, Cummings received approximately $470,042 in fraudulent refunds deposited into bank accounts he controlled. Ashamu received approximately $367,631. Abdul-Rahim received approximately $44,937 in fraudulent refunds and additional cash payments from Cummings and Ashamu for providing the victims’ personal information. As a result of their crimes, Cummings, Ashamu and Abdul-Rahim caused approximately $882,610 in losses to the IRS. Each defendant has been ordered to make full restitution to the IRS for the total amount of false refunds they each received.
Following today’s sentencing hearing, Cummings, Ashamu, and Abdul-Rahim will be permanently enjoined from preparing or filing federal income tax returns for anyone other than themselves. A civil complaint will be filed against them, and a permanent injunction will be entered to prevent Cummings, Ashamu and Abdul-Rahim from acting as a tax preparer in the future.
“This type of fraud increases the burden on honest taxpayers and negatively impacts honest citizens’ confidence in our tax system,” said Acting U.S. Attorney Alana W. Robinson. “The combination of tax fraud and identity theft continues to be a challenging law enforcement problem. Unscrupulous tax preparers and their associates should take notice: if you defraud the IRS and unsuspecting members of the public, law enforcement will bring you to justice and seek to hold you accountable.”
“Today, justice is served, and these three individuals are being held accountable for their criminal actions,” stated R. Damon Rowe, Special Agent in Charge for IRS Criminal Investigation. “IRS special agents work diligently to identify and bring to prosecution those who use taxpayer’s personal identifying information to file fraudulent tax returns. It’s a matter of maintaining public confidence in the integrity of the U.S. tax system and protecting the identities of those we serve.”
“Identity theft and the unauthorized use of individuals’ personal identifying information continues to impose significant financial harm to American citizens and businesses,” said David J. Murray, Special Agent-in-Charge of the San Diego Field Office of the Secret Service. “The sentences imposed today should be a reminder that the United States Secret Service will continue to collaborate with its law enforcement partners and the United States Attorney’s Office to arrest and prosecute criminals who take advantage of innocent victims for their own economic gain.”
The public is reminded that tax-related identity theft occurs when someone uses your stolen SSN (or the SSN of a dependent) to file a tax return claiming a fraudulent refund. If your SSN is compromised and you know or suspect you are a victim of tax-related identity theft, the IRS recommends these additional steps:
• Respond immediately to any IRS notice; call the number provided.
• Complete IRS Form 14039, Identity Theft Affidavit, if your e-filed return is rejected because of a duplicate filing under your SSN. Attach the competed form to your return and mail according to instructions.
• Continue to pay your taxes and file your tax return, even if you must do so by paper.
• If you previously contacted the IRS and did not have a resolution, you may contact them for specialized assistance at 1-800-908-4490.
Link: The link to IRS Form 14039 = https://www.irs.gov/pub/irs-pdf/f14039.pdf
DEFENDANTS Criminal Case No. 16CR0768-BEN
Rahim Ali Cummings Age: 47 Detroit, Michigan
Ebrahim Ashamu Age: 58 El Cajon, California
Rashad Abdul-Rahim Age: 46 El Cajon, California
CHARGES THAT DEFENDANTS CUMMINGS AND ABDUL-RAHIM SENTENCED ON:
Count 1 – Title 18, United States Code, Section 286 B Conspiracy to Commit Mail Fraud, File False Claims, Fraudulently Use a Social Security Number of Another, and Aggravated Identity Theft
Maximum penalties: 5 years in prison, $250,000 fine, 3 years of supervised release.
CHARGES THAT DEFENDANT ASHAMU SENTENCED ON:
Count 33 – Title 18, United States Code, Section 287 B Filing False, Fictitious and Fraudulent Claims
Maximum penalties: 5 years in prison, $250,000 fine, 3 years of supervised release.
Count 56 – Title 18, United States Code, Section 1028A – Aggravated Identity Theft
Maximum penalties: Mandatory 2-year sentence, to be served consecutive to any other prison term, $250,000 fine, 3 years of supervised release.
INVESTIGATING AGENCIES
Internal Revenue Service-Criminal Investigation
United States Secret Service
Former U.S. Naval Attaché and Military Advisor to the U.S. Ambassador in the Philippines Sentenced for Taking Bribes in Massive Navy Corruption ScandalRead the Press Release
A Retired U.S. Navy Captain was sentenced in federal court today to 41 months in prison for his role in a massive bribery and fraud scheme involving foreign defense contractor Leonard Glenn Francis and his firm, Singapore-based, Glenn Defense Marine Asia (GDMA).
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Alana W. Robinson Southern District of California, Director Dermot O'Reilly of the Defense Criminal Investigative Service and Director Andrew Traver of the NCIS made the announcement.
In addition to the 41-month prison sentence, U.S. District Judge Janis L. Sammartino ordered Michael Brooks, 59, of Fairfax Station, Virginia, to pay a $41,000 fine and $31,000 in restitution to the U.S. Navy. Brooks pleaded guilty in November 2016 to one count of conspiracy to commit bribery.
Brooks, who served as the U.S. Naval Attaché at the U.S. Embassy in Manila, Philippines, from 2006 to 2008, has admitted accepting bribes of travel and entertainment expenses, hotel rooms and the services of prostitutes. In return, Brooks admitted that he used his power and influence to benefit GDMA and Francis, including by securing quarterly clearances for GDMA vessels, which allowed GDMA vessels to transit into and out of the Philippines under the diplomatic imprimatur of the U.S. Embassy. Neither GDMA nor any other defense contractor has ever been granted such unfettered clearances.
Brooks admitted that he also allowed Francis to ghostwrite official U.S. Navy documents and correspondence, which Brooks submitted as his own. For example, Brooks admitted allowing GDMA to complete its own contractor performance evaluations. A November 2007 evaluation, drafted by GDMA and submitted by Brooks, described the company’s performance as “phenomenal,” “unsurpassed,” “exceptional” and “world class.” Brooks also admitted providing Francis with sensitive, internal U.S. Navy information, including U.S. Navy ship schedules and billing information belonging to a GDMA competitor, at times using a private Yahoo! e-mail account to mask his illicit acts.
Twenty-one current and former Navy officials have been charged so far in the fraud and bribery investigation; 10 have pleaded guilty and 10 cases are pending. In addition, five GDMA executives and GDMA the corporation have pleaded guilty.
NCIS, DCIS and DCAA are conducting the ongoing investigation. 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, corruption or waste in government contracting 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.
California Resident Convicted of Embezzlement and Filing False Tax ReturnsRead the Press Release
A federal jury convicted a Manhattan Beach, California resident today of 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 was the president and managing partner of MWRC Internet Sales LLC, an Internet 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, embezzling more than $300,000 from the company. Miller used this money to pay for personal expenses and did not report it on his personal tax returns for 2009 through 2012, causing a tax loss of approximately $58,000.
Sentencing is scheduled for Aug. 7, 2017. Miller faces a statutory maximum sentence of 20 years in prison for each count of wire fraud and three years in prison for each count of filing a false tax return. He also faces a period of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Robinson commended special agents of FBI and Internal Revenue Service 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 and its enforcement efforts may be found on the division’s website.
Defendants Charged with Posing as Federal Agents and Defrauding Immigrants Out of $6 MillionRead the Press Release
SAN DIEGO – Three individuals were arrested today in connection with a scheme to defraud victims seeking immigration status in the United States. As part of the fraud, two of defendants – Hardev Panesar and Rafael Hastie – posed as officers of the Department of Homeland Security (DHS) and promised that they could obtain immigration status for people in exchange for exorbitant fees. Gurdev Singh is also charged with assisting his conspirators in the fraudulent scheme.
According to a federal grand jury indictment unsealed today, although Panesar and Hastie have never worked at DHS, since at least 2014 they falsely claimed to be DHS agents and falsely stated they had the authority to obtain lawful immigration documents and legal status for individuals who lacked such status in the United States. Panesar and Hastie also falsely claimed they had the power to stop deportation proceedings.
According to the Indictment, the defendants defrauded victims out of approximately $6,000,000 from the scheme. Panesar, Hastie and Singh collected fees from victims under the guise that they would be able to provide immigration documents, and concealed from victims the fact that they would never be able to obtain immigration documents or status in the United States. Instead, the defendants converted the proceeds from the scheme to their personal use and benefit. Panesar, Hastie, Singh and others have solicited and recruited victims across the United States, including California and Indiana, and Mexico.
Panesar and Hastie convinced victims that they were agents, in part, because they showed fake agency credentials when meeting with the victims. Panesar and Hastie also provided immigration applications to victims and took fingerprints supposedly for immigration forms. They often demanded more money to speed up the process or guarantee the immigration documents by a certain date. Panesar, Hastie, and Singh never delivered on their promise to provide immigration documents, despite collecting thousands of dollars from each of the more than 150 victims.
The investigation into this case continues. The San Diego Division of the Federal Bureau of Investigation (FBI) is seeking possible victims in this investigation from 2000 through 2017.
If you believe you are a potential victim of this crime, please fill out the questionnaire at https://forms.fbi.gov/SDImmigrationFraud or email the FBI at [email protected].DEFENDANTS Case Number: 17CR1371-GPC
Name
Age
City
Hardev PANESAR
69
El Cajon, California
Rafael HASTIE
47
Tijuana, Mexico
Gurdev SINGH
56
Bakersfield, California
SUMMARY OF CHARGES
Count 1: 18 U.S.C. § 1349, Conspiracy to Commit Wire Fraud; Maximum Penalty 20 years in prison, $250,000 fine, forfeiture and restitution. (All defendants)
Counts 2-4: 18 U.S.C. § 1343, Wire Fraud; Maximum Penalty 20 years in prison, $250,000 fine, forfeiture and restitution (All defendants)
Counts 5-10: 18 U.S.C. § 912, False Personation of an Officer or Employee of the United States; Maximum Penalty 3 years in prison, $250,000 fine (Panesar and Hastie)
Count 11: 31 U.S.C. § 5324(a)(3), Structuring Domestic Financial Institutions; Maximum Penalty 10 years in prison, $250,000 fine, forfeiture (Panesar)
AGENCY
Federal Bureau of Investigation
*The charges and allegations contained in an Indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Vista Man Pleads Guilty to Coercing Young Children into Sending Him Naked PicturesRead the Press Release
Assistant U. S. Attorneys Alexandra Foster (619) 546-6735 and Sabrina Feve (619) 546-6786
NEWS RELEASE SUMMARY – May 25, 2017
SAN DIEGO – Joseph Daniel Saucedo of Vista pleaded guilty in federal court today to charges, admitting that he attempted to manipulate two children, ages 11 and 16, into sending sexually explicit photographs of themselves, and then threatened to expose them if they refused to continue.
According to the facts in the plea agreement, Saucedo posed as a teenage girl, “Amy Jennings,” and began communicating on-line with an 11-year-old Canadian boy. At first the two had normal conversations about everyday life. But then Saucedo, pretending to be “Amy,” sent naked pictures of young girls and asked the boy to communicate with her friend, Saucedo, in return. When the boy refused, “Amy” posted a photograph of his house, told the boy she knew where he lived, and threatened to shame him into communicating with Saucedo.
The boy ultimately relented and texted Saucedo, who then communicated with the boy using FaceTime and displayed his naked front torso. The boy hung up on Saucedo but the calls and the threats continued until, finally, on January 25, 2016, the boy received a message from “Amy,” which included a video of a young boy masturbating. “Amy” threatened to leak the video and claim it was the Canadian boy if the boy did not send naked pictures of himself to Saucedo.
Additional investigation revealed that Saucedo had been in communication with other young children, successfully soliciting sexually graphic images from them. For example, in August 2015, Saucedo struck up a conversation with a 16-year-old girl in Florida through Instagram. This time, Saucedo pretended to be a modeling agent looking for “bikini and nude models,” adding, “obviously the pay is great.” When the Florida girl told Saucedo that she was only 16 and would have to check with her parents, he volunteered that they could just “make a portfolio” at no cost to her, and “then we can talk to your parents.” She demurred again, telling Saucedo that she had “never been comfortable in my skin.” He promised to “help with that hun if you want we can FaceTime so nothing is saved.”
She continued to refuse his overtures until Saucedo, under the guise of “Amy Jennings,” threatened to blackmail the girl. The girl turned to Saucedo for help with “Amy.” Although he initially claimed no knowledge of Amy Jennings and insisted his modeling business was legitimate, he quickly agreed to help the girl, for a price: Nude pictures of herself. He even asked her to “[w]rite my name on a paper or hand so I know it’s a new one.” She acquiesced and sent him pictures of her breasts with “Joe” written across her chest.
Saucedo demanded that the girl continue sending him naked photographs, or “Amy” would post compromising pictures of the girl. The girl volunteered that she was “looking into Kik’s legal system” to handle the threatening “Amy” posts. Within seconds, Saucedo responded, “Na I’ll pay her I don’t want you to get in trouble.” Saucedo no doubt feared that alerting Kik to “Amy Jennings” could have compromised his illegal activities. Saucedo told the girl that he had paid “Amy Jennings” $2,000. As a thank you, the girl agreed to a sexually explicit FaceTime chat with Saucedo.
Saucedo continued to hound the girl for almost a year, from August 2015 to June 2016, requesting more naked photographs. He even sent her a photo of stacks of money to elicit more naked photographs. She sent him one more photograph in October 2015, but then stopped responding.
Sentencing is scheduled for August 25, 2017 at 9:00 a.m. before U.S. District Judge Janis L. Sammartino.
DEFENDANT Case Number: 17-CR-00095-JLS
Joseph Daniel Saucedo Age: 26 Vista, CA
SUMMARY OF CHARGES
Counts One and Two
Attempted Receipt and Receipt of Images of Minors Engaged in Sexually Explicit Conduct, in violation of Title 18, United States Code, Section 2252(a)(2)
Minimum Penalty: 15 years
Maximum Penalty: 40 years
AGENCY
Homeland Security Investigations
United States Secret Service
Nine Members of Hooligans Motorcycle Gang Charged in Sophisticated High-Tech Auto Theft Scheme Targeting 150 JeepsRead the Press Release
SAN DIEGO – Nine members of the Hooligans Motorcycle gang are charged in a federal grand jury indictment with participating in a sophisticated scheme to steal scores of Jeep Wranglers and motorcycles in San Diego County using handheld electronic devices and stolen codes.
According to court records, the transnational criminal organization is responsible for the theft of more than 150 Jeep Wranglers worth approximately $4.5 million within San Diego County since 2014. The Hooligans used high-tech methods to disable security systems and steal away with Jeeps in just a few minutes, in the middle of the night, while unsuspecting owners slept nearby. After stealing the Jeeps in San Diego County, the Hooligans transported them to Tijuana, Mexico, where the vehicles were sold or stripped for parts.
Three of nine defendants are in custody, including two that were arrested today at a home in Spring Valley and at the border; the rest are fugitives believed to be in Mexico. The defendants are scheduled to make first appearances in federal court either today at 2 p.m. or tomorrow at 2 p.m. before U.S. Magistrate Judge Mitchell D. Dembin.
“The joy ride is over for these Hooligans,” said Deputy U.S. Attorney Mark Conover. “For many of us, our cars are our most valuable possessions. These arrests have put the brakes on an organization that has victimized neighborhoods in a different way – by stealing something very personal. Something that required a lot of sacrifice to purchase.”
“Through the remarkable diligence and work ethic of Regional Auto Theft Task Force detectives, and the inter-agency cooperation with the FBI and the U.S. Attorney's office, a powerful case has been brought against the Hooligans gang,” said California Highway Patrol Captain Donald Goodbrand, head of the multi-agency Regional Auto Theft Task Force, which cracked the case.
“The work of law enforcement and crime fighting is 24/7,” said FBI Special Agent in Charge Eric S. Birnbaum. “The FBI, along with our law enforcement partners, will continue to work day and night to stop these large-scale international crime rings in order to protect our neighborhoods and the assets that are central to the everyday lives of people in our community.”
The indictment alleges that the Hooligans did their homework before a theft by targeting a specific vehicle days before the actual theft would take place. They obtained the vehicle identification number in advance and then managed to get secret key codes, which allowed them to create a duplicate key for that particular Jeep. Then, during the theft, the Hooligans disabled the alarm system, programmed the duplicate key using a handheld electronic device, and quietly drove away without notice.
This was a method so new and technologically advanced it required investigators to exceed the ingenuity of the thieves.
In the summer of 2014, San Diego County was hit with a rash of Jeep Wrangler thefts. Almost all the thefts occurred in the middle of the night or early morning, and almost all of the Wranglers were equipped with alarms. Yet no alarms were ever triggered, and there was never any broken glass or other signs of forced entry. Agents from the Regional Auto Theft Task Force, known as RATT, at first were perplexed. But eventually they caught a break.
On September 26, 2014, a Jeep owner parked her 2014 Jeep Wrangler Rubicon in the driveway of her home in Rancho Bernardo. She returned to the driveway early the next morning to find the Jeep missing. Fortunately, the Jeep owner had recently installed a surveillance camera on her house, and it happened to be trained on the driveway.
The surveillance footage revealed that three men stole her Jeep around 2:30 a.m. by disabling the alarm and then using a key and a handheld electronic device to turn on the engine.
Based on the surveillance footage, law enforcement agents sent Chrysler a list of around 20 Jeeps that had recently been stolen in San Diego County and asked whether anyone had requested duplicate keys for the stolen Jeeps.
Sure enough, Chrysler responded that a duplicate key had been requested for nearly every one of the 20 stolen Jeeps. Moreover, nearly every one of the keys had apparently been requested through the same dealership in Cabo San Lucas, Mexico. The Jeeps’ owners did not request duplicate keys and were unaware that anyone had.
After additional investigation, agents began interrupting Jeep thefts and made several arrests. Through these arrests, agents learned that the Tijuana-based Hooligan Motorcycle gang was behind the operation.
Video fileCase Number: 17cr1314
DEFENDANTS AGE CITY *Jimmy Josue Martinez 31 Tijuana, Mexico *Mario Alberto Echeverria-Ibarra 30 Tijuana, Mexico Henry Irenio Pulido 24 Imperial Beach, California Alejandro Guzman 23 Tijuana, Mexico *Narciso Zamora Banuelos 29 Tijuana, Mexico *Adan Esteban Sanchez Aguirre 26 Tijuana, Mexico *Salvador Isay Castillo 21 Tijuana, Mexico Reynaldo Rodriguez 33 San Diego, California *Sebastian Ponce 20 Tijuana, Mexico*Fugitives
Indictment_5_30 Search Warrant_5_30SUMMARY OF CHARGES
Conspiracy to Commit Transportation of Stolen Vehicles in Foreign Commerce, in violation of 18 U.S.C. 371; Maximum Penalty Five years in prison
AGENCIES
Regional Auto Theft Task Force, which includes the following agencies:
U.S. Border Patrol
California Highway Patrol
National Insurance Crime Bureau
California Department of Insurance
California Department of Motor Vehicles
San Diego County District Attorney’s Office
San Diego County Probation Department
San Diego County Sheriff’s Department
Ice Enforcement and Removal Operations
and police departments from La Mesa, Chula Vista, National City, Oceanside and San Diego.Federal Bureau of Investigation
Agencies assisting with arrests include U.S. Marshals and San Diego Fugitive Task Force
The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Three Charged with Illegal Trafficking of $17 Million Worth of Sea CucumbersRead the Press Release
NEWS RELEASE SUMMARY – May 26, 2017
SAN DIEGO – A Tucson firm and two executives were arraigned in federal court today on charges related to the illegal trafficking of $17 million worth of sea cucumbers from 2010-2012.
Blessings, Inc. of Tucson, its owner David Mayorquin, and Ramon Torres Mayorquin of San Diego were charged in a 26-count indictment with conspiracy, illegal trafficking in wildlife, importation contrary to law, false labeling and criminal forfeiture.
According to the indictment, defendant David Mayorquin, on behalf of Blessings, contacted suppliers of sea cucumbers in Mexico and agreed to purchase approximately $13 million worth of sea cucumbers, knowing that it had been illegally harvested, that is, in excess of permit limits, or without a proper license or permit, or out of season.
It was a further alleged that defendant Ramon Mayorquin received the shipments of sea cucumbers from the Yucatan to Tijuana, Mexico, and created false invoices to be submitted to U.S. Customs officials, knowing that the sea cucumbers had been illegally harvested, sold and transported, and lacked the proper paperwork required under Mexican law.
According to the indictment, the fraudulent sales invoices submitted to U.S. Customs falsely represented defendant Ramon Mayorquin to be the supplier of the sea cucumbers to Blessings, from a non-existent address in Mexico, for a price less than one tenth of the true price paid by Blessings for the sea cucumbers.
The indictment states that after the sea cucumbers had been imported into the United States, defendant David Mayorquin sold the sea cucumbers on behalf of Blessings for approximately $17.5 million to customers in China and elsewhere. The indictment alleges that as part of the scheme payments were made to bank accounts held under false names to conceal the illegal sales and hide the proceeds, and payments were also made to Mexican officials to insure that no action was taken against the illegally harvested sea cucumbers. In furtherance of the scheme, it is alleged that in June of 2011, a co-conspirator in Mexico sent an email to defendant David Mayorquin, stating in substance “We want what is owed in freight to be your contribution for the bribe, 32K.”
Mexican law requires that the lawful origin of fisheries products be demonstrated by means of an arrival, harvest, production, or collection notice or an import permit. The original sales invoice for fisheries products must bear the number associated with the notice of arrival, harvest, production or collection, as well as a description of the product, and all subsequent invoices must bear the number of the invoice from which it derived, so that all fisheries products sold in Mexico can be traced to their lawful origins.
In addition, in Mexico a fisheries waybill is needed for the interstate transportation of fisheries products. It is also violation of Mexican law to harvest, possess, transport, or sell a species out of season, or of less than the minimum established size and weight, or to harvest a species in excess of permit limits or without a proper license or permit. The indictment alleges that the defendants imported sea cucumbers into the United States they knew had been harvested, transported and sold in violation of these Mexican laws.
Since the beginning of this investigation, with the increased cooperation with Mexican officials, the importation of sea cucumbers from Mexico to the United States through the ports of entry in San Diego have decreased approximately 93% in the past three years. According to the NOAA Office of Science and Technology, Commercial Fisheries Statistics Division website, total sea cucumber imports from 2013 through 2016 into the San Diego ports of entry have decreased from 1,096,258 kg in 2013 to 70,708 kg in 2016. Total sea cucumber imports to the U.S. from Mexico have decreased from 4 million kg in 2013 to 3 million kg in 2016.
“This case demonstrates the coordination between U.S. federal law enforcement agencies in detecting illegal, unreported, and unregulated (IUU) fishing and stopping the trafficking of sea cucumbers into the U.S. from Mexico,” said Assistant Director Will Ellis of NOAA's Office of Law Enforcement. “Sea cucumbers is an important commercial fishery for Mexico and NOAA's Office of Law Enforcement is committed to cooperating with our international partners to safeguard this marine resource.”
“The Service's investigation and this subsequent indictment will help stop the illegal harvest and transport of thousands of pounds of sea cucumbers, whose numbers have fallen dramatically over the past few years,” said Ed Grace, Deputy Assistant Director for U.S. Fish and Wildlife Service Office of Law Enforcement. “Sea cucumbers serve an important role in the marine ecosystem, helping recycle nutrients and break down organic matter. Illegal over-harvest threatens more than just the species themselves, impacting delicate coral reefs and local fisheries. Going after criminal poachers and wildlife traffickers like these is not only critical for saving protected species such as sea cucumbers, it also ensures some justice for those impacted by their illegal activities.”
“A large overseas demand for sea cucumbers harvested in Mexico has fueled an increase in illicit importation-schemes uncovered at commercial ports of entry on the U.S.-Mexico border, ” said Dave Shaw, special agent in charge for Homeland Security Investigations in San Diego. “This investigation underscores HSI’s commitment to ensuring U.S. trade laws are not exploited by those seeking financial gain.”
The defendants were ordered to appear before U.S. District Judge Roger T. Benitez for a hearing on all motions on July 10, 20917, at 2:00 pm.
DEFENDANTS Criminal Case No. 17cr1254-BEN
Blessings, Inc Incorporated: 2003
Tucson, Arizona
David Mayorquin Age: 39
Tucson, Arizona
Ramon Torres Mayorquin Age: 75Chula Vista, California
SUMMARY OF CHARGES
Count 1
Conspiracy, 18 U.S.C. § 371
Maximum penalty: 5 years’ prison, fine of $250,000
Counts 2-8
Unlawful Importation of Wildlife, 16 U.S.C. §3372(a)(2)(A) and §3373(d)(1)(A)
Maximum Penalty: 5 years’ prison, $250,000 fine
Counts 9-17
Importation Contrary to Law, 18 U.S.C. §545
Maximum Penalty: 20 years’ prison, $250,000 fine or twice the gross gain or loss caused by the offense, restitution, forfeiture of proceeds generated from the, five years of supervised release.
Counts 18-26
False Labeling, 16 U.S.C. §3372(d)(1) and §3373(d)(#)(A)
Maximum Penalty: 5 years’ prison, $250,000 fine
AGENCIES
National Oceanic and Atmospheric Administration, Office of Law Enforcement
U.S. Fish & Wildlife Service, Office of Law Enforcement
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.
Defense Contractors Sentenced for Stealing Medical Equipment Intended for Deployed MarinesRead the Press Release
Assistant U.S. Attorneys W. Mark Conover (619) 546- 6763
Michelle L. Wasserman (619) 546-8431
NEWS RELEASE SUMMARY –May 26, 2017
SAN DIEGO – Henry Bonilla and Richard Navarro were sentenced in federal court today to 15 months and 12 months in prison, respectively, for conspiring to steal over $3 million worth of medical equipment from Camp Pendleton that the military had planned to ship overseas to treat injured Marines.
“This isn’t the theft of pencils and pens,” U.S. District Judge Cathy Ann Bencivengo told the defendants during today’s sentencing hearing. “This medical equipment was meant for U.S. Troops. This type of theft is outrageous and puts our troops at risk. I hope this sentence will send a message to people in government in positions of trust.”
Bonilla, Navarro and their co-conspirators - many of whom likewise have pleaded guilty - worked as civilian defense contractors in warehouses run by 1st Medical Logistics Company (“1st MEDLOG”) aboard Camp Pendleton. 1st MEDLOG is the unit responsible for maintaining medical equipment and shipping necessary medical items to combat forces throughout the world. By virtue of their employment as contractors, Bonilla and Navarro had access to sophisticated, expensive medical equipment stored at 1st MEDLOG warehouses.
According to court records, Bonilla and Navarro and their co-conspirators stole expensive medical equipment from 1st MEDLOG, including anesthesia machines, autoclaves, ventilators, ultrasound machines, defibrillators, and laryngoscopes among other items. Bonilla and Navarro removed the items from Camp Pendleton, with the help of their co-conspirators, and sold the equipment to medical equipment resellers.
Acting U.S. Attorney Alana W. Robinson would like to remind the public that these charges were the result of ongoing efforts to root out corruption among our area defense contractors. She encouraged the public to contact the Naval Criminal Investigative Service (NCIS) at 1-800-264-6485 or www.ncis.navy.mil with any information relevant to the ongoing investigation into theft of medical equipment at Camp Pendleton.
Judge Bencivengo ordered Bonilla to forfeit two vehicles and $172,850 in ill-gotten gains, and ordered Navarro to forfeit $49,210. Judge Bencivengo also ordered that both Bonilla and Navarro pay restitution of the value of the $3 million worth of equipment stolen from the U.S. Marine Corps.
DEFENDANTS Case Number: 16CR2053-CAB
Henry Bonilla Age: 29 Pomona, California
Richard Navarro Age: 44 Oceanside, California
SUMMARY OF CHARGES
Count 1: Conspiracy to Engage in Theft of Government Property, Title 18, United States Code, Section 371
Maximum penalties: 5 years in prison, $250,000 fine, term of supervised release of 3 years, restitution, and $100 special assessment.
INVESTIGATING AGENCY
Naval Criminal Investigative Service
Man Admits to 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 – May 18, 2017
SAN DIEGO – Abel Jose Perez pleaded guilty in federal court today to theft of public property, admitting that he stole $271,925.60 in Social Security retirement benefits intended for his father, Angel Perez-Barajas, who died in 1997.
During a hearing before U.S. Magistrate Judge Andrew G. Schopler, Perez acknowledged that for more than 16 years, he retained exclusive access to and controlled a bank account belonging to his deceased parents, and all funds deposited therein. Perez, who was not an authorized user of the bank account, also never informed either the bank or the Social Security Administration of his father’s death.
Perez also admitted that he never requested that the Social Security Administration terminate the monthly direct deposit of his father’s retirement benefits, which continued each month from August 1997 until February 2014. Indeed, Perez admitted that he knew his father’s Social Security retirement benefits should have terminated upon his death, but he nonetheless converted all $271,925.60 to his own use, with no intention of ever returning it to the United States of America.
“The only difference between this and armed robbery is the gun,” said Acting U.S. Attorney Alana W. Robinson. “This defendant stole hundreds of thousands of dollars, and the ultimate victims are those who pay into Social Security expecting to receive benefits down the road. We won’t let thieves get away with these crimes, even if they have untraditional methods.”
“The Social Security Administration’s Office of the Inspector General is committed to pursuing those who defraud SSA and its benefit programs, which are a lifeline for so many Americans and their families,” said Robb Stickley, the Special Agent in Charge of the San Francisco Field Division, which is responsible for Southern California. “We will continue to assist the U.S. Attorney’s Office in bringing violators to justice."
As a part of his plea agreement, Perez agreed to pay full restitution to the Social Security Administration for all of the money he gained by his crime. Perez faces up to 10 years in federal prison and a fine of up to twice his gross gains from this crime at his sentencing on August 7, 2017 before U.S. District Court Judge William Q. Hayes.
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, $543,851.20 fine, restitution
AGENCY
Social Security Administration’s Office of the Inspector General
U.S. Navy Admiral Sentenced to Prison for Lying to Federal Investigators about His Relationship with Foreign Defense Contractor in Massive Navy Bribery and Fraud InvestigationRead the Press Release
U.S. Navy Rear Admiral Robert Gilbeau was sentenced today to 18 months in prison for lying to investigators to conceal his illicit 20-year relationship with Leonard Glenn Francis, the owner of Glenn Defense Marine Asia (GDMA), the foreign defense contractor at the center of a major bribery and fraud scandal.
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, Acting Director Dermot O’Reilly of the Department of Defense’s (DOD) Defense Criminal Investigative Service (DCIS), Director Andrew Traver of the Naval Criminal Investigative Service (NCIS) and Director Anita Bales of Defense Contract Audit Agency (DCAA) made the announcement.
On June 9, 2016, Gilbeau, 56, pleaded guilty to one count of making false statements and was sentenced before U.S. District Judge Janis L. Sammartino of the Southern District of California. Gilbeau is the highest-ranking U.S. Navy officer to be sentenced in the investigation so far.
In connection with his plea, Gilbeau admitted that he lied when he told agents from DCIS and NCIS that he had never received any gifts from Francis. Gilbeau also admitted that he lied when he told investigators that he “always paid for half of the dinner” when he and Francis met about three times a year. Gilbeau further admitted that when he became aware that Francis and others had been arrested in connection with the fraud and bribery offenses in September 2013, he destroyed documents and deleted computer files. Francis previously pleaded guilty to plying scores of other U.S. Navy officials with gifts such as luxury travel, meals, cash, electronics, parties and prostitutes.
By way of background, GDMA provided ship husbanding services such as trash and sewage removal, food, water, security and fuel to U.S. Navy ships. As stated in his plea agreement, in 2003 and 2004, Gilbeau was the supply officer on the USS Nimitz, where he was responsible for procuring all goods and services necessary for operation of the ship. He later served as head of the Tsunami Relief Crisis Action Team in Singapore, heading the Navy’s logistics response to the Southeast Asia tsunami in December 2004, and in June 2005, Gilbeau was assigned to the office of the Chief of Naval Operations as the head of aviation material support, establishing policies and requirements for budgeting and acquisitions for the Navy’s air forces, according to the plea agreement. In August 2010, after he was promoted to admiral, Gilbeau assumed command of the Defense Contract Management Agency International, where he was responsible for the global administration of DOD’s most critical contracts performed outside the United States, according to admissions made in connection with his plea.
Twenty current and former Navy officials have been charged so far in the fraud and bribery investigation. Of the 20 Navy officials, 10 have pleaded guilty, and 10 cases are pending. Five GDMA executives and the GDMA corporation have pleaded guilty.
The DCIS, NCIS and the DCAA are investigating this case. 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.
U.S. Navy Admiral Sentenced for Lying to Feds about his Relationship with Foreign Defense Contractor in Massive Navy Bribery and Fraud InvestigationRead the Press Release
Assistant U.S. Attorneys Mark W. Pletcher (619) 546-9714 and Patrick Hovakimian (619) 546-9718
NEWS RELEASE SUMMARY – May 17, 2017
SAN DIEGO – The first active-duty U.S. Navy Admiral ever convicted of a federal crime was sentenced today to 18 months in prison for lying to investigators to conceal his illicit 20-year relationship with Leonard Glenn Francis, the foreign defense contractor at the center of a colossal bribery and fraud scandal.
U.S. Navy Rear Admiral Robert Gilbeau pleaded guilty to one count of making false statements on June 9, 2016, admitting that he lied when he told federal agents that he had never received any gifts from 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, Gilbeau did indeed receive many expensive gifts plus cash from Francis since 1997. The long history between the two men involved many late nights of partying at nightclubs and karaoke bars, fine dining, luxury hotels and prostitutes – all paid for by Francis. For his part, Gilbeau signed off on inflated GDMA invoices which grossly overbilled the Navy.
When the massive corruption and fraud were discovered, Gilbeau repeatedly lied to investigators from Defense Criminal Investigative Service and Naval Criminal Investigative Service about his relationship with Francis. When Gilbeau became aware that Francis and others had been arrested in connection with the fraud and bribery offenses in September 2013, Gilbeau destroyed documents and deleted computer files. And he continued to lie.
During the sentencing hearing, U.S. District Judge Janis L. Sammartino noted that Gilbeau’s reaction to the arrests was “a systematic destruction of records.” “You did everything possible to hide and conceal your relationship with Leonard Francis and in the process you tried to thwart the investigation...You violated the law. You dishonored your shipmates, the Navy and the United States of America.”
Gilbeau, who is free on bond, was ordered to report to the custody of the Bureau of Prisons on June 23, 2017.
“This is the first time our nation will incarcerate a Navy Admiral for a federal crime committed during the course of his official duty, and it is truly a somber day,” said Acting U.S. Attorney Alana W. Robinson. “When tempted by parties and prostitutes, one of our most respected leaders chose karaoke over character, and cover-up over confession, and in doing so he forever tarnished the reputation of a revered institution.”
“Today's sentencing of Rear Admiral Robert Gilbeau closes a sad chapter on a naval flag officer's career tarnished by dishonorable behavior such as lying, destroying evidence and concealing the acceptance of gifts and gratuities from a defense contractor," said Dermot F. O'Reilly, Director, Defense Criminal Investigative Service. “As this investigation has shown, no one is above the law, regardless of rank or status, and they will be held accountable just as anyone else who has benefitted from this criminal scheme. The sentencing of Admiral Gilbeau continues the tireless efforts and commitment of DCIS, the Naval Criminal Investigative Service, and the Department of Justice to investigate and prosecute any individual who places at risk the safety and security of our armed forces personnel.”
“NCIS, in concert with our partner agencies, remains resolved to follow the evidence wherever it may lead in the ongoing investigation into Glenn Defense Marine Asia and NCIS will seek to hold accountable anyone, regardless of rank, who tries to hamper the investigation by lying or obstructing justice in any manner,” said NCIS Director Andrew Traver.
According to the government sentencing memo, Gilbeau first met Francis when Gilbeau served aboard the USS Boxer in 1997. During a multi-day port visit to Bali, Indonesia, Francis plied Gilbeau and another U.S. Navy officer with hotel rooms, dinners and the services of prostitutes.
In 2003, when the pair became reacquainted, Gilbeau was serving on the USS Nimitz. He again accepted hotel rooms, lavish dinners and prostitutes from Francis on several occasions.
After several of these escapades, Gilbeau personally approved GDMA invoices which inflated the charges to the U.S. Navy. In one instance, Gilbeau signed an invoice for the removal of wastewater from the ship during the port visit to Singapore in October 2003. Based on Gilbeau’s signature, the Navy paid for the highest per-day volumes of wastewater removal in the history of the USS Nimitz. In return, evidence in the investigation suggests GDMA kicked back $40,000 cash to Gilbeau. Gilbeau denies this allegation.
Francis also had contact with Gilbeau in 2005, when Gilbeau returned to Singapore to coordinate the U.S. Navy’s tsunami relief efforts. Gilbeau, who called himself “Tsunami Bob,” partied with Francis on three or four occasions, typically with an expensive dinner, followed by Brix Nightclub and Tiananmen Karaoke Bar.
According to other information received and reviewed as part of the investigation, on several occasions, Francis paid for hotel rooms and provided Gilbeau other things of value, during his stint in Singapore in 2005. According to interview statements and corroborating documents, Francis and Gilbeau again dined and caroused together in December 2010. On this occasion, Francis, Gilbeau - who had been promoted in the interim to Rear Admiral - and Gilbeau’s flag aide, dined at the Mezza9 Restaurant in the Hyatt Hotel in Singapore. After returning his flag aide to her hotel after dinner, Gilbeau rejoined Francis to continue the party at Brix Nightclub and the after party at Tiananmen Karaoke Bar.
To cap the evening, Francis drove Gilbeau and two prostitutes from Vietnam back to Gilbeau’s hotel. The next day, Francis emailed Gilbeau inquiring of the evening’s conclusion. Francis wrote: “How was the after action from the 1st night? Require AAR (After Action Report) Sir.” Gilbeau replied, “Very nice…. BZ.” “BZ” is a Navy term meaning “Bravo Zulu,” which means “well done.”
According to the sentencing memo, things started to unravel for Gilbeau in September 2012, when he became aware that Francis and GDMA were under investigation by NCIS for various fraud and public corruption offenses.
On November 27, 2012, Gilbeau submitted to his command a Foreign Contact Questionnaire, wherein he disclosed a September 26, 2012 contact with Francis, and in which he willfully, falsely stated “No” in answer to the question: “Have you ever received any gifts from [Leonard G. Francis]?”
In a subsequent voluntary interview by NCIS agents on February 20, 2013, Gilbeau stated that he and Francis met about three times a year but that defendant “always pa[id] for his half of the dinner.” That statement, too, was false: Francis paid for dinners, hotel rooms, and prostitutes for Gilbeau on many occasions.
According to the sentencing memo, after the arrests of Francis and others in 2013, Gilbeau, while serving in Afghanistan, became paranoid and erratic. He asked for direction on how to wipe clean his electronic devices; he refused to meet with others unless they removed the batteries from their cell phones; he removed his aides’ access to his U.S. Navy email accounts; and he destroyed and/or deleted certain paper records and computer files. Gilbeau was charged in June of 2016.
Twenty current and former Navy officials have been charged so far in the fraud and bribery investigation; 10 have pleaded guilty and 10 cases are pending. In addition, five GDMA executives and GDMA the corporation have pleaded guilty.
In his remarks at today’s hearing, Assistant U.S. Attorney Mark Pletcher told the court:
“Today, Your Honor, is a solemn and tragic day, for Bob Gilbeau, his family and friends, but also for the United States Navy, and our nation…Beyond the tragedy, today is also a day of great importance, as one of finality for Mr. Gilbeau; one of healing for the U.S. Navy; and more broadly, it is one of great importance for our constitutional democracy. We the People consent to be governed. We live by the Rule of Law, applicable to all regardless of rank, stature or privilege. In our Country, no one is above the law.”
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 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: 16CR1313-JLS
U.S. Navy Rear Admiral Robert Gilbeau Age 56 San Diego, CA
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
Federal Jury Convicts Alien Smuggler for Assaulting a U.S. Border Patrol Agent with Rock to FaceRead the Press Release
Assistant U. S. Attorneys Timothy Coughlin (619) 546-6768 and Carlos Arguello (619) 546-6684
NEWS RELEASE SUMMARY – May 12, 2017
SAN DIEGO – Martel Valencia-Cortez, a Mexican national and prolific alien smuggler, was convicted by a federal jury today of assaulting a federal officer by hurling a softball-sized rock at a U.S. Border Patrol agent’s face.
The jury deliberated for about eight hours following a four-day trial that included testimony from the agent and some of the immigrants who were smuggled by the defendant. Valencia was convicted 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. Sentencing is set for August 28, 2017 at 9 a.m. before U.S. District Judge Marilyn Huff.
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.
“The conditions are treacherous in some sections of the border, and our courageous agents put their lives on the line every day to protect our country,” said Acting U.S. Attorney Alana W. Robinson. “This verdict tells us that the safety of our agents is of paramount importance and attacks on our agents will come at a high price.”
“We are grateful for the resolve and collaboration that our law enforcement partners have demonstrated over the past several months, resulting in Valencia’s arrest, his prosecution and conviction. We look forward to a just sentencing that will keep him off our streets for a significant period of time, and will keep our communities safe from this violent criminal,” 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
Alien Smuggler Sentenced for Blowing Through Checkpoint at High Speed, Seriously Injuring Border Patrol AgentRead the Press Release
Assistant U. S. Attorney Colin McDonald (619) 546-9144
SAN DIEGO – Jorge Garcia-Osornio was sentenced in federal court today to 30 months in prison for blasting through a Border Patrol checkpoint in Pine Valley, severely injuring a checkpoint inspection agent, and taking Border Patrol on a high-speed chase reaching speeds of at least 100 miles per hour.
Garcia, who was illegally present in the U.S. and had two illegal immigrants hiding on the floor of his vehicle, approached the checkpoint – about 45 miles east of downtown San Diego - at approximately 10:26 a.m. on November 14, 2017. As he neared the line of cars waiting for inspection, he made an illegal U-turn and started driving the wrong way on the freeway.
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A Border Patrol agent yelled, “Turn around! Turn around!” Another agent activated his emergency lights and siren and began following the defendant. Garcia then made another U-turn on the freeway and headed back toward the checkpoint. The agent tried to stop Garcia’s vehicle by positioning the agency vehicle in the center of both freeway lanes, but Garcia squeezed past by driving onto the shoulder of the freeway.
He then sped toward the checkpoint. A number of cars were in the checkpoint queue. Garcia evaded them by driving into a coned-off freeway lane. He then accelerated to – and through – the checkpoint. In the process, he barely missed crashing into a parked agency car; barely missed crashing into a parked civilian car; and barely missed running over Border Patrol Agent M. Medina, the primary inspection agent.
But Garcia did not miss a steel-framed stop sign sitting in the middle of the freeway lanes; he barreled through it, causing a collision best described as an “explosion.” Debris from the collision struck Agent Medina, who likened the blow to being “hit with a baseball bat.” His injuries were similarly severe: Vomiting, throbbing headache, blurry vision, a gash on his face, shaking uncontrollably, and loud ringing in his ears, among other things. Agent Medina was taken to the hospital in an ambulance and has not returned to work since.
After crashing through the checkpoint, Garcia led Border Patrol on a high-speed chase, reaching speeds of at least 100 mph. After about 3.5 miles, Garcia exited the freeway, ran a stop sign and crashed into a hillside. One of the illegal immigrants on the floor of Garcia’s car said he “feared for his life.”
Garcia then ran away and agents found him hiding in a nearby carport with the crashed car’s key fob in his pocket.
As part of his plea, Garcia admitted driving the wrong way on the freeway, reaching at least 100 mph when fleeing from the checkpoint, using a dangerous weapon in the commission of the offense, and seriously injuring Agent Medina, among other things.
Garcia expected to earn between $1,400 and $2,000 for transporting the two illegal immigrants.
“This defendant had no regard for the safety of his passengers, other drivers on the freeway or agents at the checkpoint,” said U.S. Attorney Adam Braverman. “It’s a miracle no one died in this incident. Smugglers operate in a world where immigrants are just dollar signs, not people.”
“In committing his criminal act, Garcia not only placed the lives of those he smuggled in grave danger, but seriously injured a Border Patrol agent in the process,” Chief Patrol Agent Rodney S. Scott. “I would like to express my sincere appreciation to the United States Attorney’s office for their efforts in prosecuting this case. Let this sentencing serve as a reminder that there will be severe consequences for those that wish to do our country harm.”
DEFENDANT Case Number 17cr4272-JM
Jorge Garcia-Osornio Age: 28 Michoacán, Mexico
SUMMARY OF CHARGES
Transporting Certain Aliens and Aiding and Abetting – Title 18, U.S.C., Sections 1324(a)(1)(A)(ii), (v)(II), and (a)(1)(B)(i)
Maximum penalty: 10 years’ imprisonment and $250,000 fine
AGENCY
U.S. Border Patrol
Convicted Felon Charged for Dealing Firearms and Heroin from La Jolla HomeRead the Press Release
Assistant U. S. Attorney Matthew Sutton (619) 546-8941
NEWS RELEASE SUMMARY – May 10, 2017
SAN DIEGO – Convicted felon Paul Joseph Holdy was arrested this morning and charged with multiple federal drug- and gun-related offenses after a long-term investigation revealed that he was allegedly trafficking heroin and firearms from his La Jolla residence.
As alleged in the complaint and search warrants unsealed today, the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Federal Bureau of Investigation began the investigation in the summer of 2016. Undercover agents conducted multiple controlled purchases of firearms and narcotics from Holdy, some of which Holdy manufactured himself from unfinished lower receivers. In total, law enforcement purchased 19 firearms, including short-barrel machine guns, assault rifles, and handguns, along with multiple silencers from Holdy.
Due to his prior felony conviction for possession of a controlled substance for sale, Holdy is prohibited from possessing a firearm or ammunition under federal law. ATF records showed that Holdy lacked a Federal Firearms License, which would allow him to engage in the business of importing, manufacturing, or dealing in firearms.
During the arrest today, investigators executed three search warrants and seized one additional machine gun and two gallons of suspected GHB. Holdy is scheduled to be arraigned before U.S. Magistrate Judge David H. Bartick at 10:30 a.m. tomorrow.
“Illegally manufacturing and brokering the sale of guns and drugs on the streets of San Diego poses a tremendous danger to our community,” said Acting U.S. Attorney Alana W. Robinson. “Prosecuting firearms offenses is a top priority for the U.S. Attorney’s Office, and we will continue our efforts to disrupt the availability of illegal guns in our city.”
“Firearms traffickers are responsible for the crimes committed with the guns they provide to felons and gang members,” said ATF Los Angeles Field Division Special Agent in Charge Eric Harden. “Felons cannot skirt the system by manufacturing and selling untraceable firearms from unfinished lower receivers. ATF will use its resources to strategically target and identify these criminals and interrupt the illegal flow of firearms to those who are prohibited from possessing firearms under the law.”
“Illegal firearms and narcotics trafficking cannot be tolerated on our streets,” said FBI Special Agent in Charge Eric S. Birnbaum. “The FBI will continue to identify, disrupt and dismantle these traffickers in order to keep our communities safe.”
This case is also the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF) a partnership that brings together the combined expertise and unique abilities of federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, dismantle and prosecute high-level members of drug trafficking, weapons trafficking and money laundering organizations and enterprises.
DEFENDANT Criminal Case No: 17MJ1397-DHB
Name
Age
Hometown
Paul Joseph Holdy
39
La Jolla, CA
SUMMARY OF CHARGES
Distribution of Heroin, in violation of Title 21, U.S.C., Sec. 841(a)(1)
Felon in Possession of a Firearm, in violation of Title 18, U.S.C., Sec. 922(g)(1)
Dealing in Firearms Without a License, in violation of Title 18, U.S.C. Secs. 922(a)(1)(A), 923(a), 924(a)(1)(D)
Maximum Penalties:
For drug charges: Twenty years in prison and a $1 million fine.
For firearms charges: Ten years in prison and a $250,000 fine.
AGENCIES
Bureau of Alcohol, Tobacco, Firearms and Explosives
Federal Bureau of Investigation
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Two Former Executives of Foreign Defense Contractor Plead Guilty to Fraud in International Navy Corruption ScandalRead the Press Release
Two former executives of a foreign defense contractor pleaded guilty in federal court today for participating in a conspiracy to submit bogus bids, claims and invoices to the U.S. Navy in an effort to steal 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 Dermot F. O’Reilly of the Defense Criminal Investigative Service (DCIS) and Director Andrew L. Traver of the Naval Criminal Investigative Service (NCIS) made the announcement.
Neil Peterson, 39, and Linda Raja, 44, both Singaporean nationals, each pleaded guilty to one count of conspiracy to defraud the United States with respect to claims. Both defendants were arrested by authorities in Singapore at the request of the U.S. government and were extradited on Oct. 28, 2016. Sentencing for Peterson and Raja is set before the Honorable Janis L. Sammartino of the Southern District of California on Aug. 11, 2017.
Peterson and Raja worked for Singapore-based Glenn Defense Marine Asia (GDMA). Peterson served as the Vice President for Global Operations, and Raja served as General Manager for Singapore, Australia and the Pacific Isles. According to their pleas, Peterson and Raja conspired with Leonard Glenn Francis, the owner of GDMA, to defraud the U.S. Navy in order to financially benefit GDMA.
As part of their pleas, Peterson and Raja admitted that they and other members of GDMA’s management team created and submitted fraudulent bids. These bids were either entirely or partially fictitious. This ensured that GDMA’s quote would be selected by the U.S. Navy as the supposed lowest bidder. As a result, GDMA could control and inflate the prices charged to the U.S. Navy without engaging in any competitive bidding, as required.
Additionally, Peterson, Raja admitted that they and others knowingly created fictitious port authorities with fraudulently inflated tariff rates and approved the presentation of these fraudulent documents to the U.S. Navy. As a result, GDMA charged inflated prices to the U.S. Navy, rather than what GDMA actually paid to the port authorities. For example, in October 2012, Peterson and other members of GDMA’s core management team directed that false documents and inflated invoices be presented to the U.S. Navy for the U.S.S. Bonhomme Richard’s visit to Kota Kinabalu, Malaysia. 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 that the U.S. Navy suffered losses exceeding $34.8 million in total, as a result of the scheme.
Twenty U.S. Navy officials have been charged so far in the fraud and bribery investigation. Additionally, to date, five GDMA executives have been charged and pleaded guilty: (1) Alex Wisidagama, (2) Francis, (3) Edmund Aruffo, (4) Peterson and (5) Raja. Wisidagama was sentenced on March 18, 2016, to 63 months in prison and was ordered to pay $34.8 million in restitution to the U.S. Navy. Francis and Aruffo await sentencing.
A criminal complaint is merely an accusation, and the accused is presumed innocent unless proven guilty in a court of law.
The DCIS, NCIS and the Defense Contract Audit Agency are investigating this matter. 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 are prosecuting the case. The Criminal Division’s Office of International Affairs provided substantial assistance in this matter.
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.
Singapore Executives Plead Guilty to Fraud in International Navy Corruption Scandal; Admit Bilking U.S. Navy of MillionsRead the Press Release
Assistant U. S. Attorneys Mark W. Pletcher (619) 546-9714 and Patrick Hovakimian (619) 546-9718
NEWS RELEASE SUMMARY – May 9, 2017
SAN DIEGO – Neil Peterson and Linda Raja, former executives of foreign defense contractor Glenn Defense Marine Asia (GDMA), pleaded guilty in federal court today to fraud charges, admitting that they conspired to submit bogus bids, claims and invoices to the U.S. Navy in an effort to win contracts and overcharge the Navy by tens of millions of dollars as part of a years-long corruption and fraud scheme.
Peterson, 39, and Raja, 44, both of Singapore, worked as chief deputies for foreign defense contractor Leonard Glenn Francis to fill the coffers of their company, Glenn Defense Marine Asia (GDMA), at the expense of the U.S. Navy. 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. Sentencing for Peterson and Raja is set before U.S. District Judge Janis L. Sammartino on August 11, 2017 at 9 a.m.
According to 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 and 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.
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, for the visit of the U.S.S. Bonhomme Richard visit 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 that losses to the United States Navy exceeded $34,800,000.
Twenty Navy officials have been charged so far in the fraud and bribery investigation.
In addition, five GDMA executives – Neil Peterson and Linda Raja as well as Francis, Alex Wisidagama, Ed Aruffo, – have been charged All five have pleaded guilty.Wisidagama was sentenced on March 18, 2016 to 63 months and $34.8 million in restitution to the Navy. Francis and Aruffo await sentencing;
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 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.
DEFENDANTS Case Number: 14-CR-3703-JLS
Neil Peterson Age: 39 Singapore
Linda Raja Age: 44 Singapore
SUMMARY OF CHARGES
Conspiracy to Defraud the United States with Respect to Claims, in violation of 18 U.S.C. § 286
Maximum Penalty: 10 years in prison, a $250,000 fine.
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
Defense Contract Audit Agency
Navy Port Engineer Admits Working on Projects Despite Having a Personal Financial InterestRead the Press Release
Assistant U.S. Attorney Phillip L.B. Halpern (619) 546-6964
NEWS RELEASE SUMMARY – May 9, 2017
SAN DIEGO – U.S. Navy Port Engineer John Nasshan pleaded guilty today to a conflict of interest charge, admitting that he improperly administered projects at the Navy’s Southwest Regional Maintenance Center involving a defense contractor with whom he had a financial relationship.
According to his plea agreement, Nasshan made decisions and recommendations affecting Navy contracts with NevWest, Inc. even though he made personal loans to a company official, which is a conflict of interest.
Nasshan has 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.
Among other things, San Diego-based NevWest provides combat systems engineering support, electronic technical support, enterprise management and application development services in command, control and communications, computers, combat systems, intelligence, surveillance and reconnaissance, and electronics space modernizations.
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 NevWest more than $30,000 at the same time that NevWest was engaged in numerous subcontracts with Southwest Regional Maintenance Center. Naashan made these loans despite recognizing that his job required that he administer NevWest subcontracts.
In order to hide and conceal their illegal activity, Nasshan and an official at NevWest 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.
Nasshan also lied to both Naval Criminal Investigative Service and Federal Bureau of Investigation agents regarding his relationship with NevWest. For example, on November 13, 2015, he falsely told an FBI agent that he did not have a financial interest with NevWest; that he never gave a NevWest employee cash or a check; and he never loaned a company official or NevWest money.
“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 17cr1166-JLS
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
Leader of Alien Smuggling Ring Gets Three YearsRead the Press Release
Assistant U. S. Attorney Christopher Alexander (619) 546-6665
NEWS RELEASE SUMMARY – May 8, 2017
SAN DIEGO – Issac Mahatma Osuna-Sanchez, the ringleader of an alien smuggling crew, was sentenced in federal court Friday to three years in prison for bringing 14 undocumented immigrants into the United States from Mexico in a small boat off the coast of California.
Osuna-Sanchez and three others - Enrique Ramirez-Fernandez, Mario Alejandro Sainz-Avila, and Hector Velasquez – pleaded guilty in connection with the events of November 4, 2016, when the U.S. Coast Guard encountered and stopped a vessel on the open sea operating at night, without any navigation or running lights. They discovered the smugglers and the undocumented immigrants on board.
At sentencing, U.S. District Judge William Q. Hayes found that Osuna-Sanchez was a manager of the smuggling venture and his conduct created a substantial risk to the immigrants on board the vessel.
U.S. Border Patrol agents identified one of the vessel’s occupants as a citizen of Nicaragua; the remainder were citizens of Mexico. Border Patrol agents arrested all eighteen occupants and transported them to the Imperial Beach Border Patrol Station.
In addition to the smugglers, two of the others who were aboard the vessel - Ernesto Ignacio Madrigal-Garza and Danilo Alberto Mairena - had previously been deported to Mexico from the United States. They were prosecuted for unlawful reentry into the United States by a previously deported alien, in violation of Title 8, U.S.C., Section 1326. Madrigal-Garza’s prior criminal history involved felony convictions for access device fraud and one prior immigration offense. Mairena’s prior criminal history involved numerous misdemeanor and felony convictions involving violent crimes such as battery, assault, and numerous domestic violence related offenses.
The remaining twelve undocumented individuals, not charged as alien smugglers, were held as material witnesses.
Earlier, on April 19, 2017, Judge Hayes sentenced one of the vessel’s pilots, Mario Alejandro Sainz-Avila, to a prison term of 24 months, for his role in smuggling the fourteen undocumented aliens. In addition, Judge Hayes sentenced two others who aided in smuggling the aliens, Enrique Ramirez-Fernandez and Hector Velasquez, to thirteen months and one day.
DEFENDANTS Case Number 16CR2752-WQH
Issac Mahatma Osuna-Sanchez Age: 22 Tijuana, B.C., Mexico
Enrique Ramirez-Fernandez Age: 27 Ensenada, Mexico
Mario Alejandro Sainz-Avila Age: 31 Navolato, Sinaloa, Mexico
Hector Velasquez Age: 22 Navolato, Sinaloa, Mexico
SUMMARY OF SENTENCES
DEFENDANTS SENTENCE
Issac Mahatma Osuna-Sanchez 36 months of custody
Enrique Ramirez-Fernandez 13 months and one day of custody
Mario Alejandro Sainz-Avila 24 months of custody
Hector Velasquez 13 months and one day of custody
SUMMARY OF CHARGES
Attempted Bringing in Undocumented Aliens for Financial Gain and Aiding and Abetting – Title 8, U.S.C., Section 1324(a)(2)(B)(ii), and Title 18, U.S.C., Section 2.
Maximum penalty: 10 years’ imprisonment and $250,000 fine.
Bringing in Undocumented Aliens and Aiding and Abetting – Title 8, U.S.C., Section 1324(a)(1)(A)(i) and (v)(II).
Maximum penalty: 10 years’ imprisonment and $250,000 fine.
AGENCIES
United States Coast Guard
United States Border Patrol
Massive Strike Against Violent Street Gangs in San Diego County Results in Federal Charges Against 140-plus Gang Members and Associates in Less Than Three MonthsRead the Press Release
SAN DIEGO, CA – A crackdown on violent street gangs in San Diego County over the last 75 days has resulted in federal charges against more than 140 gang members and associates, many of whom are accused of terrorizing neighborhoods with shootings, robberies and other violent crimes.
More than 60 firearms and 30 pounds of methamphetamine, plus cash and other illicit drugs were seized by law enforcement during the course of four long-term gang investigations that culminated this spring with various indictments charging crimes such as racketeering, money laundering and gun, drug or sex trafficking.
“This is an unusually large number of gang members arrested in a very short period of time,” said Acting U.S. Attorney Alana W. Robinson. “The sheer number of arrests illustrates that gangs are a significant problem in this county. But it also underscores our enormous commitment to use every tool we have to attack this problem and restore communities to families who should not have to live in fear in their own homes.”
The most recent charges, unsealed this week in federal court, involve the prosecution of 16 members and associates of the Escondido-based Diablos street gang. The defendants are facing various drug trafficking offenses.
According to court records, in the last year the Diablos gang has been responsible for more than 25 gang-related shootings, multiple attempted murders, dozens of armed robberies, multiple instances of witness intimidation and the widespread distribution of narcotics and firearms in North San Diego County.
This investigation helped to identify and locate Dionicio Torrez, a Diablos gang member, as the suspected shooter of Cathy Kennedy, who was fatally wounded by gang gunfire March 7 as she drove home from church in Escondido.
The case involved a total of 13 wiretaps, the interception of over 20,000 telephone calls and text messages and the seizure of approximately 13 pounds of high-quality methamphetamine and 10 rifles and handguns, including 4 AR-15 type rifles, an AK-47 rifle, an SKS rifle and 2 handguns, one of which had an obliterated serial number.
The Diablos Enterprise claims control of the eastern and north central areas of Escondido. The approximate boundaries of the territory they claim is Lincoln Avenue to the north, Grand Avenue to the south, Midway Drive to the to the east and Escondido Boulevard to the west. There are approximately 311 documented members of the Diablos Enterprise and an additional 400 individuals who are “associates” of the Diablos Enterprise.
The four proactive gang cases involved months of federal wiretaps, extensive surveillance and scores of undercover drug and gun buys. Defendants were charged with crimes ranging from money laundering and racketeering to heroin, methamphetamine, firearms and sex trafficking.
“When members of criminal street gangs are arrested during joint operations, the San Diego County District Attorney’s Office reviews their criminal histories and coordinates with the U.S. Attorney’s Office to determine where a defendant would be most appropriately prosecuted,” said Chief Deputy DA Summer Stephan, who oversees the DA’s Gangs Division. “In essence, we collaborate to get the most effective bang for our prosecutorial buck and make sure justice is served, whether that happens on the state or federal side.”
Federal Bureau of Investigation Special Agent in Charge Eric S. Birnbaum stated, “Dismantling violent gangs is a continuing priority for the FBI. We share an unwavering commitment with our law enforcement partners to address the dangerous threat facing our communities today. The impact of our recent gang cases clearly demonstrates our focus and determination to strike at gang related enterprises and to eliminate the terror these groups inflict on our neighborhoods.”
“Our communities are safer because of ATF’s expanded efforts to target and dismantle criminal gangs and organized criminal enterprises that use firearms and violent acts to further their illegal gains,” said ATF Los Angeles Field Division Special Agent in Charge Eric Harden. “ATF and its partners are dedicated to carrying out our mission by ridding our communities of these gang members and associates who shatter families and destroy lives.”
“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 restore order to our communities,” stated Special Agent in Charge R. Damon Rowe for IRS Criminal Investigation. “We are proud to provide this financial expertise as we work alongside our law enforcement partners to bring these criminals to justice."
The success of these cases is due to the collaborative effort of our federal, state and local partners working in task forces in order to leverage resources provided by the Office of National Drug Control Policy and the Organized Crime Drug Enforcement Task Force (OCDETF), which are federal anti-drug programs. The OCDETF program was created to consolidate and coordinate all law enforcement resources in this country's
battle against gangs, major drug trafficking rings, drug kingpins and money launderers.
Video file Video file
Video file Video file Firearms Red Devil IndictmentDEFENDANTS
Case Number: 17CR1071-BEN
Gustavo Cisneros Age: 38 Vista
Rafael Zamora Age: 33 Vista
Case Number: 17CR1070-BEN
Gustavo Cisneros Age: 38 Vista
Eduardo Rojo Age: 32 Tijuana, Mexico
David Bollschweiler Age: 55 Escondido
Jesus Salazar Age: 23 Chula Vista
Case Number: 17CR1069-BEN
Gustavo Cisneros Age: 38 Vista
David Bollschweiler Age: 55 Escondido
Leonel Ayala-Arambula Age: 47 El Cajon
Case Number: 17CR1068-BEN
Augustine Aragon Age: 23 Escondido
Francisco Torres-Cortez Age: 27 San Marcos
Sarah Hudgins Age: 27 San Marcos
Case Number: 17CR1067-BEN
Gustavo Cisneros Age: 38 Vista
Adrian Nieves Garcia Age: 22 San Diego
Fredy Cruz Age: 30 San Diego
Case Number: 17CR1066-BEN
Augustine Aragon Age: 23 Escondido
Marcia Cervantes Age: 27 Escondido
SUMMARY OF CHARGE COMMON TO ALL ABOVE CASES
Conspiracy to Distribute Methamphetamine, in violation of Title 21, U.S.C. Sections 846 and 841(a)(1).
Penalty: Mandatory-minimum of 10 years, up to life in prison.
DEFENDANTS Case Number: 17MJ1232
Charles Osterholtz Age: 55 Escondido
Justin Cartwright Age: 27 Escondido
David Trejo Age: 27 Escondido
SUMMARY OF CHARGE
Conspiracy to Distribute Methamphetamine, in violation of Title 21, U.S.C. Sections 846 and 841(a)(1).
Penalty: Mandatory-minimum of 5 years, up to 40 years in prison.
SUMMARY OF CHARGE
Conspiracy to Distribute Methamphetamine, in violation of Title 21, U.S.C. Sections 846 and 841(a)(1).
Penalty: Mandatory-minimum of 5 years, up to 40 years in prison.
INVESTIGATING AGENCIES
DEA
Escondido Police Department
ATF
San Diego County Sheriff’s Department
North County Regional Gang Task Force
*A complaint or indictment 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.
Federal Jury Convicts Imperial Beach Man in Fatal Stabbing of his Texas BoyfriendRead the Press Release
Assistant U. S. Attorneys Alexandra Foster (619) 546-6735 and Robert Ciaffa (619) 546-7748
NEWS RELEASE SUMMARY – May 2, 2017
SAN DIEGO – On the second anniversary of his victim’s death, David Enrique Meza of Imperial Beach was convicted by a federal jury this morning of fatally stabbing his boyfriend 24 times, slashing his throat twice and dumping his body in a ravine near Rosarito Beach, Mexico in order to inherit the boyfriend’s estate.
After two weeks of trial and seven days of deliberations, the 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, including one count of Interstate or Foreign Domestic Violence Resulting in Murder and one count of Conspiracy to Obstruct Justice. U.S. District Judge Jeffrey T. Miller, who presided over the trial, set sentencing for August 7, 2017 at 9 a.m.
“David Meza took the life of a man who cared for him, lavished him with expensive gifts and who wanted to create a life with him,” said Acting U.S. Attorney Alana W. Robinson. “On this day, the second anniversary of Jake Merendino’s death, we salute the jury for delivering justice to a greedy killer who will now have to answer for his cruelty.”
“The greed, lies, and brutality of this crime were stark,” said FBI Special Agent in Charge Eric S. Birnbaum. “Every day, the FBI works tirelessly, utilizing all resources, expertise and lawful methods to find justice for victims of crime. Today’s guilty verdict brings a measure of justice for Jake Merendino.”
According to evidence presented at trial, Meza, then 23, and Merendino, then 49, 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.
Langston was also charged in the indictment, returned by a grand jury in December 2015. She pleaded guilty in February to obstruction of justice for her role in the cover-up. She admitted that she and Meza agreed to lie to law enforcement agents about her and Meza’s whereabouts on the night of the murder.
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.
Meza went down to the lobby between 7 p.m. and 8 p.m. to open a bottle of wine. Then, 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.
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; Langston crossed 25 minutes later, at 4:22 a.m. in a black SUV.
At 7 p.m. the same day as the murder, Meza and Langston 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, one of the victim’s friends filed probate paperwork for a will Merendino drew up in 1998 in Galveston, Texas. A few days later, Meza, through his lawyers, contested the 1998 will and filed the handwritten will on letterhead from the Hercor Hotel in Chula Vista, which he claimed was executed by Merendino in December of 2014, and left Meza “everything.”
Acting U.S. Attorney Robinson thanked law enforcement counterparts from Procuraduría General de Justicia del Estado - the Attorney General’s office in the state of Baja California - for their assistance in the investigation and prosecution of these crimes.
She also 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: 25
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
Count Two
Conspiracy to Obstruct Justice, in violation of Title 18, United States Code, Section 1512 (k).
Maximum Penalty: 20 years’ imprisonment
AGENCY
Federal Bureau of Investigation
Thirty-Seven Defendants Charged in Crackdown on San Diego Gang Members and Methamphetamine DealersRead the Press Release
Assistant U. S. Attorney Matthew Sutton (619) 546-8941, Jarad E. Hodes 546-7432 and Janaki S. Gandhi 546-8817
NEWS RELEASE SUMMARY – April 27, 2017
SAN DIEGO – Thirty-seven documented gang members and associates were charged this week in federal court with methamphetamine distribution and firearms trafficking. The defendants are accused of dealing in substantial quantities of methamphetamine and illegal guns, using Teralta Park in City Heights as their headquarters and operating throughout Mid-City San Diego.
As of today at 1 p.m., 29 of the thirty-seven defendants are either in federal or state custody. Twenty-two were arrested this week; the rest were already in custody. Authorities are continuing to search for eight defendants. During the two-day takedown, investigators executed ten search warrants and seized more than three pounds of methamphetamine, 17 firearms and over $25,000 in narcotics proceeds from the defendants. Many of the defendants are scheduled to be arraigned before U.S. Magistrate Judge Ruben B. Brooks at 2:00 p.m. today and tomorrow.
The yearlong investigation, dubbed “Seeing Blue,” was co-led by the Homeland Security Investigations Gangs & Weapons Group and the San Diego Police Department in partnership with the United States Marshals Service and the Drug Enforcement Administration. It involved months of federal wiretaps, dozens of undercover drug buys and extensive surveillance. Many of the defendants are documented members or associates of violent San Diego street gangs, including the Oriental Mafia Crips, West Coast Crips, Neighborhood Crips and Lincoln Park Piru.
As alleged in the indictments, complaints, and search warrants unsealed today, HSI began the investigation by targeting a prolific methamphetamine distribution network headed by OMC gang member Soulidao Chounlaboudy, aka “Lazy.” Investigators were able to introduce undercover agents to Chounlaboudy in order to purchase ounce quantities of methamphetamine, firearms, and stolen vehicles from him and his co-conspirators. During the course of the investigation of Chounlaboudy, agents also identified Ruben Contreras-Ramirez, a Claremont 13 gang member, as a firearms distributor involved in the manufacture of assault style semi-automatic firearms for illegal distribution.
Investigators subsequently targeted WCC gang member, John Quarles, aka “J-Money,” and his methamphetamine and crack cocaine drug distribution network. According to the charging documents, Quarles’ network was responsible for distributing dozens of pounds of methamphetamine and grossing tens of thousands of dollars in narcotics proceeds. His network utilized an array of distributors and sub-distributors, many of them convicted drug dealers and gang members, to distribute methamphetamine and crack cocaine from Teralta Park.
“Gangs and drugs are infesting many of our neighborhoods and creating a violent culture that is unsafe for residents,” said Acting U.S. Attorney Alana W. Robinson. “With today’s action, we are reclaiming these parks and streets for our families, our children and our communities.”
“ICE Homeland Security Investigations is committed to working jointly with its law enforcement partners to dismantle criminal gang networks that distribute narcotics on the streets and spread violence in our communities,” said Dave Shaw, special agent in charge for HSI San Diego. “As part of this joint investigation, our agents continue to fight against crime to help keep our communities safe.”
“This was a long, complex investigation and I couldn't be prouder of our detectives and all the other law-enforcement partners who have worked tirelessly on this case,” San Diego Police Chief Shelley Zimmerman said. “The bottom line is these arrests make our city and our region a safer place.”
“DEA will continue to support our law enforcement partners in any way possible,” said DEA San Diego Special Agent in Charge William R. Sherman. “Methamphetamine poses a huge threat to the fabric of our communities in San Diego. It is important to rid our neighborhoods of this dangerous drug, the people selling it, and the ancillary crime that follows drug trafficking.”
Acting United States Attorney Robinson also praised the coordinated federal and state team effort in the culmination of this investigation. Agents and officers from the Homeland Security Investigations Gangs & Weapons Group; San Diego Police Department; United States Marshals Service, the Drug Enforcement Administration, the Bureau of Prisons, Immigration and Customs Enforcement, Enforcement and Removal Operations; the Chula Vista Police Department; and the District Attorney’s Office collaborated on this investigation. Attorneys from the Department of Justice, Office of Enforcement Operations, Electronic Surveillance Unit, also provided critical assistance to the investigation.
This case is also the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF) a partnership that brings together the combined expertise and unique abilities of federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, dismantle and prosecute high level members of drug trafficking, weapons trafficking and money laundering organizations and enterprises.
Operation Seeing Blue Defendant Information
DEFENDANTS Criminal Case No: 17CR1026-BTM
Name
Age
Hometown
SOULIDAO CHOUNLABOUDY (1),
aka “Lazy”
40
San Diego, CA
SOLIDEUANE CHOUNLABOUDY (2),
aka “Chewy”
39
San Diego, CA
JOHNNY HERRERA (3),
46
Chula Vista, CA
ELIZABETH ASHLEY ANDERSON (4)
28
San Diego, CA
RUBEN CONTRERAS-RAMIREZ (5),
aka “Tijuas”
36
Lemon Grove, CA
ANTHONY ERIC MOATS II (6)
37
San Diego, CA
LARRY MULDROW (7),
aka “Mojo”
40
San Diego, CA
NAOMI JEAN HILL (8)
33
El Cajon, CA
SUMMARY OF CHARGES
Conspiracy to Distribute Methamphetamine, in violation of Title 21, U.S.C., Secs. 841(a)(1) and 846;
Felon in Possession of a Firearm and Ammunition, in in violation of Title 18, U.S.C., Secs. 922(g)(1) and 924(a)(2);
Distribution of Methamphetamine, in violation of Title 21, U.S.C., Sec. 841(a)(1);
Possession of Methamphetamine with Intent to Distribute in violation of Title 21, U.S.C., Sec. 841(a)(1);
Maximum Penalties: For the drug charges: life in prison with a mandatory minimum sentence of 10 years and a 10 million dollar fine. For firearms charges: 10 years’ in prison, and a $250,000 fine.
DEFENDANTS Criminal Case No: 17CR1027-BTM
Name
Age
Hometown
JOHN ALBERT QUARLES JR. (1),
aka “J-Money”
47
San Diego, CA
ANTWAUN FORD (2),
aka “Ant”
27
San Diego, CA
DON VESTER POLLARD JR. (3)
27
San Diego, CA
SUMMARY OF CHARGES
Conspiracy to Distribute Cocaine, in violation of Title 21, U.S.C., Secs. 841(a)(1) and 846;
Maximum Penalties: For drug charges: 20 years in prison and a 1 million dollar fine.
DEFENDANTS Criminal Case No: 17CR1028-BTM
Name
Age
Hometown
JOHN ALBERT QUARLES JR. (1),
aka “J-Money”
47
San Diego, CA
JOSE PEDRO ESTRADA, JR. (2),
aka “Boy”
31
San Diego, CA
TYRONE LORENZO JOHNSON (3),
aka “T-Ro”
47
San Diego, CA
WALTER BROWN (4),
aka “Pee Wee”
57
San Diego, CA
RICKY EVANS (5),
aka “Sweets”
57
San Diego, CA
KIMSAY DENNIS LEAUV (6),
aka “Gangster”
45
San Diego, CA
JARRETT MCGUIRE (7),
aka “Blue Jay”
36
San Diego, CA
PATRICK HEARD (8),
aka “Ace”
46
San Diego, CA
KITSANA XAYPANYA (9),
aka “Kelly”
35
San Diego, CA
MERRELL CEDRIC HEMPSTEAD (10),
aka “Popo”
56
San Diego, CA
EARL WOODS (11),
aka “Meech
42
San Diego, CA
THOMAS ADAMS (12),
52
National City, CA
GLEN RUSSELL (13),
aka “G-Rock
39
San Diego, CA
TIMOTHY JONES (14)
49
San Diego, CA
MICHAEL ELLIOT (15),
aka “Black”
48
San Diego, CA
PAUL JOSEPH JEFFREY (16),
42
San Diego, CA
ANDREW LASTER (17),
52
San Diego, CA
JAMES LANKFORD (18),
aka “Smiley”
47
San Diego, CA
CURTIS CLYDE OLIVER (19)
48
San Diego, CA
KIMBERLY EVETTE CUNNINGHAM (20),
51
San Diego, CA
DARREN DIMITRI KNIGHT (21),
23
San Diego, CA
PHYLICIA RENEE APPLEWHITE (22),
29
El Cajon, CA
RAYMOND BLACKWELL (23),
aka “Black Dog”
44
San Diego, CA
PABLO MAGDALENO VIELMA-RODRIGUEZ (24),
aka “Acapulco”
54
San Diego, CA
BRADLEY SCOTT PITTS (25),
48
El Cajon, CA
SUMMARY OF CHARGES
Conspiracy to Distribute Methamphetamine, in violation of Title 21, U.S.C., Secs. 841(a)(1) and 846;
Felon in Possession of a Firearm and Ammunition, in in violation of Title 18, U.S.C., Secs. 922(g)(1) and 924(a)(2);
Distribution of Methamphetamine, in violation of Title 21, U.S.C., Sec. 841(a)(1);
Possession of Methamphetamine and Cocaine Base with Intent to Distribute in violation of Title 21, U.S.C., Sec. 841(a)(1);
Maximum Penalties: For the drug charges: life in prison with a mandatory minimum sentence of 10 years and a 10 million dollar fine. For firearms charges: 10 years’ in prison, and a $250,000 fine.
DEFENDANTS Criminal Case No: 17MJ1212-RBB
Name
Age
Hometown
DELLA GUADALUPE MERCADO (1),
39
National City, CA
CHRISTINA THOMPSON (2),
40
San Diego, CA
SUMMARY OF CHARGES
Distribution of Methamphetamine, in violation of Title 21, U.S.C., Secs. 841(a)(1);
Maximum Penalties: For drug charges: 20 years in prison and a 1 million dollar fine.
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Government Contractors Indicted in $11 Million Veteran Set-Aside Fraud SchemeRead the Press Release
Assistant U.S. Attorneys Rebecca S. Kanter (619-546-7304) and Aaron P. Arnzen (619-546-8384)
NEWS RELEASE SUMMARY – April 21, 2017
SAN DIEGO, CA – Owners of local construction and telecommunications companies were arraigned in federal court today on charges that they fraudulently obtained more than $11 million in federal contracts specifically set aside for service-disabled veteran-owned businesses.
Andrew Otero, Roger Ramsey, and their companies – A&D General Contracting, Inc. (“A&D”) and Action Telecom, Inc. (“Action”) – were named in a fourteen-count indictment returned April 7 by a federal grand jury in San Diego.
The indictment alleges that the defendants participated in a conspiracy to defraud the government by forming a joint venture – Action-A&D, A Joint Venture (“the JV”) – and falsely representing that Action and the JV qualified as service-disabled veteran-owned small businesses (“SDVOSB”). Based on the false claim to SDVOSB eligibility, the conspirators fraudulently obtained approximately $11 million in federal government construction contracts or task orders with the Department of Veteran Affairs (“VA”) and the Army Corps of Engineers (“ACE”).
According to the indictment, the fraudulent conspiracy involved set-aside contracts that could only be bid upon by legitimate service-disabled veteran-owned small businesses – a designation that did not apply to Otero or A&D. To appear qualified, Otero (on behalf of A&D) and Ramsey (on behalf of Action) initially executed an agreement to create the JV (“the JV Agreement”), which stated that Ramsey’s company (Action) would be the managing venturer, employ a project manager for each of the set-aside contracts, and receive the majority of the JV’s profits.
However, six months later, Otero and Ramsey signed a secret side agreement that made clear the JV was ineligible under the SDVOSB program. For example, the side agreement said the parties created the JV so that A&D could simply “use the Disabled Veteran Status of Action Telecom” to bid on contracts. The side agreement also stated that A&D – not Action – would run the construction jobs. They also agreed that “A&D will keep 98% of every payment; Action Telecom will receive 2% of every payment.”
In addition to the secret side agreement, the indictment describes a variety of ways in which the JV did not operate as a legitimate SDVOSB, but was essentially controlled by Otero and A&D. For example, although Ramsey (a service-disabled veteran) nominally served as president of Action and the JV, he actually worked full-time for another telecommunications company. Otero and A&D, not Ramsey, controlled the day-to-day management, daily operation and long-term decision making of the JV. Among other things, Otero and A&D appointed an A&D employee as the project manager for every contract and task order. Consistent with their side agreement, Action received just a small fee for using Rasmey’s status as a disabled veteran.
The indictment also alleges several examples of the conspirators deceiving government agencies about the true nature of the JV. For example, on two separate occasions, A&D submitted the JV Agreement to (and withheld the side agreement from) the government in response to requests for information about the joint venture – despite the fact that the side agreement said on its face that it superseded the original JV Agreement.
Today’s indictment cites three contracts or task orders which the VA or ACE awarded to the JV, each worth over a million dollars, and one as high as $8.2 million. In addition to the conspiracy charge, all defendants were also charged with three counts of wire fraud relating to the payment of invoices on the three contracts or task orders, and with one or more counts of major government program fraud and false statements in connection with fraudulent certifications to the government. Today’s indictment also contains forfeiture allegations, which would require the defendants to forfeit to the government any property derived from the proceeds of the fraud scheme.
Acting United States Attorney Robinson said “One important way in which our country tries to repay the debt of gratitude we owe to our veterans is by setting aside some government contracts for those who have been disabled during their service. But unscrupulous contractors have abused this program through ‘rent-a-vet’ schemes, such as the one described in today’s indictment. The Department of Justice will work to ensure that criminals who abuse important contracting programs such as the SDVOSB are held to account.”
Rebeccalynn L. Staples, Resident Agent-in-Charge of the U.S. Department of Veterans Affairs, Office of Inspector General, San Diego Resident Agency, stated, “This investigation demonstrates the OIG’s continued commitment to aggressively pursue individuals and companies that misrepresent themselves as Service-Disabled Veteran-Owned Small Businesses and deny legitimate disabled veterans the opportunity to be awarded VA set-aside contracts. The VA OIG will continue to work these cases in order to protect the integrity of the program. I urge anyone with knowledge of such an ongoing fraud to call the VA OIG’s Hotline at 1-800-488-8244.”
All four defendants are also facing civil charges in United States v. Otero, et al., Case No. 15CV0441-JAH, a case alleging violations of the false claims act based on the similar misconduct.
All defendants were ordered to appear before U.S. District Judge Roger T. Benitez for a motion hearing at 2 p.m. on June 5.
CORPORATE DEFENDANTS
A&D General Contracting, Inc., Santee, California
Action Telecom, Inc., Santee, California
INDIVIDUAL DEFENDANTS
Andrew Otero Age: 54 El Cajon, CA
Roger Ramsey Age: 57 Spring Valley, CA
Criminal Case No. 17CR0879-BEN
SUMMARY OF CHARGES
Count 1 (All): Conspiracy to defraud and commit offenses (18 U.S.C. § 371)
Maximum penalties: 5 years’ imprisonment; 3 years’ supervised release; a fine of $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greatest; and a mandatory special assessment of $10
Count 2 (Otero and A&D)
and Counts 3-4 (All): Major fraud against the United States (18 U.S.C. § 1031)
Maximum penalties: 10years’ imprisonment; supervised release; a fine of $1,000,000 per count ($5,000,000 total); and a mandatory special assessment of $100
Counts 5-7 (All): Wire fraud (18 U.S.C. § 1343)
Maximum penalties: 20 years’ imprisonment; a fine of $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greatest; and a mandatory special assessment of $100
Counts 8-9 and 11-13
(Ramsey and Action),
10 (All), 14 (A&D): False statements (18 U.S.C. § 1001)
Maximum penalties: 5 years’ imprisonment; a fine; and a mandatory special assessment of $100
AGENCIES
Department of Veteran Affairs, Office of Inspector General
*The charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
California Return Preparer Sentenced to Prison for Filing Fraudulent Tax ReturnsRead the Press Release
A San Diego, California tax return preparer was sentenced to 37 months in prison today for preparing fraudulent tax returns, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.
According to documents filed with the court, Marla Lynn Cunningham owned and operated Cunningham’s Tax Service, a tax preparation business located in El Cajon, California. From 2010 through 2012, Cunningham prepared fraudulent returns for her clients that reported fake business losses, charitable contributions, and medical, dental, education and unreimbursed employee expenses. Cunningham caused a tax loss of approximately $1,237,943.
In addition to the term of prison imposed, Cunningham was ordered to serve one year of supervised release and will be ordered to pay $91,867 in restitution to the ternal Revenue Service (IRS). Cunningham pleaded guilty in December 2016 to three counts of preparing false tax returns.
Acting Deputy Assistant Attorney General Goldberg commended special agents of IRS–Criminal Investigation, who conducted the investigation, and Trial Attorneys Matthew R. Hoffman and Benjamin J. Weir of the Tax Division, who are prosecuting the case. Acting Deputy Assistant Attorney General Goldberg also thanked the U.S. Attorney’s Office of the Southern District of California for their substantial assistance.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Owner of Stock Lending Firm Sentenced to Eight Years in Prison for His Role in a $100 Million Stock-Loan Fraud SchemeRead the Press Release
For Further Information, Contact: Assistant U.S. Attorney Joseph J.M. Orabona (619)546-7951 or Assistant U.S. Attorney Michael G. Wheat (619) 546-8437
NEWS RELEASE SUMMARY – April 13, 2017
SAN DIEGO – Jeffrey Spanier, former owner of Amerifund Capital Finance, LLC located in Boca Raton, Florida, was sentenced today by U.S. District Court Judge Roger T. Benitez to serve eight years in federal prison and pay approximately $20 million in restitution for his role in a $100 million elaborate stock-loan fraud scheme that bilked victims all over the world.
Spanier was also ordered to forfeit several million dollars in assets that were the proceeds of the fraud, including cash and securities held in brokerage accounts, and a luxury home in Florida. The case was investigated by the Federal Bureau of Investigation (FBI) over an extended period of time.
Following an appeal in a prior criminal case, Spanier was re-indicted in July 2016 and October 2016 and charged with multiple counts of conspiracy, mail fraud, wire fraud, and securities fraud involving a stock-loan fraud scheme that involved two other co-conspirators – Douglas McClain, Jr. and James Miceli. A federal jury returned guilty verdicts on similar charges against McClain on May 31, 2013, and he was later sentenced by U.S. District Judge Roger T. Benitez to serve 15 years in federal prison. Miceli committed suicide shortly before that trial. McClain is currently serving his sentence in federal prison. Upon his release, McClain has been ordered to pay approximately $81.7 million to the victims of the fraud.
Spanier’s re-trial was held in November 2016. After two-weeks of trial testimony, the jury deliberated for several hours and found Spanier guilty on all 16 counts, which included conspiracy, mail fraud, wire fraud, and securities fraud. The jury also returned a special verdict finding in favor of the United States as to the forfeiture of Spanier’s cash, securities, and property.
According to trial testimony, Spanier, through his entity Amerifund Capital Finance, partnered with McClain, Miceli, and Argyll Equities, and together with his partners fraudulently induced corporate executives to pledge millions of dollars’ worth of stock the executives held in publicly traded companies as collateral for loans by falsely representing that the borrowers' stock would not be sold unless there was a default on the loan.
The evidence presented at trial showed that Argyll, the purported lender, had no cash to lend and instead survived for years by immediately selling borrowers stock on the day after the stock was pledged as collateral. The proceeds from the sale of the stock were used to fund the loans creating the appearance that Argyll had plenty of cash to lend.
The evidence also showed that Spanier, McClain, and others fraudulently induced the borrowers to make monthly interest payments on their loans by falsely representing that their collateral was safe and would be returned as long as they did not default. At the end of the loan terms, the borrowers paid off their loans. Instead of returning the stock to the borrowers, Spanier and McClain kept the money and provided false excuses about why they could not return their stock.
The evidence further showed that the unauthorized sales of stock held by insiders of publicly traded companies caused the stock price to plummet which defrauded purchasers of these publicly traded securities who purchased stock through public stock exchanges.
During the trial, the government offered testimony from several executives, many of whom had faithfully paid off their loans over a period of years, completely unaware that their stocks had been sold. All testified about the frustration, emotional stress and grief they experienced when they unsuccessfully attempted to recover their stock once the loan balance was paid, and ultimately realized they were the victims of a massive fraud. Victims were located in the United States, Canada, Mexico, Panama, China, England, and Belgium.
The jury rejected defense claims that Spanier was merely a broker who was unaware of the fraud scheme.
“Today’s significant prison sentence sends a loud and clear message to those engaged in such brazen deception for personal gain that we are committed to working with our law enforcement partners to vigorously pursue and prosecute anyone who commits white-collar crimes,” said Acting U.S. Attorney Alana W. Robinson. “Jeffrey Spanier not only stole tens of millions of dollars from his own clients, but he victimized the public market when his actions caused stock prices to plummet. This significant sentence means Spanier’s days driving a Bentley and living in a gated country club community at the expense of others will soon be a distant memory.”
“Today's sentencing of Mr. Spanier serves as a stark warning to financial predators seeking riches through deceit and fraud,” said FBI Special Agent in Charge Eric S. Birnbaum. “The FBI remains committed to the zealous pursuit of these criminals and delivering justice to their victims.”
At the conclusion of the sentencing hearing, the Court ordered that Spanier be remanded into custody immediately.
DEFENDANT Criminal Case No. 16CR1545-BEN
Jeffrey R. Spanier Age: 51 Delray Beach, Florida.
SUMMARY OF CHARGES:
Count 1 of the Superseding Indictment – Conspiracy (18 U.S.C. § 371)
Maximum Penalties: 5 years in prison and $250,000 fine
Count 2 of the Superseding Indictment – Securities Fraud (15 U.S.C. §§ 78j(b) and 78ff)
Maximum Penalties: 20 years in prison and $250,000 fine
Counts 2-7 of the Indictment – Mail Fraud (18 U.S.C. § 1341)
Maximum Penalties: 20 years in prison and $250,000 fine
Counts 8-13, 15 and 16 of the Indictment – Wire Fraud (18 U.S.C. § 1343)
Maximum Penalties: 20 years in prison and $250,000 fine
Criminal Forfeiture (real and personal property)
AGENCY
Federal Bureau of Investigation
International Businessman Pleads Guilty to Financing Racketeering Enterprise in San Diego Card RoomRead the Press Release
Special Assistant U.S. Attorney Jeffrey D. Hill (619) 546-7924 or Assistant U.S. Attorney Nicholas Pilchak (619) 546-9709
NEWS RELEASE SUMMARY – April 13, 2017
SAN DIEGO – Swedish businessman Petter Magnus Karlsson, who had recently been living in Asia, pleaded guilty today to engaging in an international racketeering conspiracy that used the Lucky Lady Casino and Card Room in El Cajon as a legitimate front for illegal sports bookmaking and related criminal activity. Karlsson voluntarily travelled to the United States last week to face the charges that had been pending since July 2016.
As set out in his plea agreement, Karlsson helped provide financing to lead defendant Sanders Bruce Segal in order to bankroll Segal’s bookmaking operation, which took illegal sports bets from customers across the Southern District of California and in the District of Arizona. Karlsson also provided Segal and others in the enterprise with access to offshore sports gaming websites hosted in Costa Rica, the U.K., Hong Kong, and Curacao, so that they could place large illegal sports bets online while shielding their unlawful activity from U.S. authorities.
According to the plea agreement, the enterprise’s primary offshore sports gambling website, betmex.net, was owned and operated by co-defendant David Gregg Leppo. Karlsson supervised co-defendant Pablo Ballestero Frech in managing accounts for Segal at Leppo’s website and others. Frech returned from Canada to face charges and pleaded guilty to unlawful transmission of wagering information last October.
Karlsson, Segal, and others in the enterprise regularly used runners and other means to transfer large sums of cash between themselves to fuel their operation. On one occasion, according to the plea agreement, Karlsson and Frech personally picked up a shoebox full of $90,000 in cash proceeds directly from Segal on his front doorstep. As part of his plea, Karlsson agreed to forfeit $139,834, which represented direct proceeds of his participation in the offense.
Seven defendants in addition to Karlsson have thus far pleaded guilty to gambling charges as part of cases stemming from the investigation of the Lucky Lady: Pablo Ballestero Frech, Minh Triet Dinh Nguyen, James Heng Tear, Ken Pheng Keo, Jason D. Taylor, Jeffrey Alan Burke, and Ryan Richard Buchardt.
Acting U.S. Attorney Alana Robinson commented, “For too long, transnational criminal organizations have attempted to skirt United States laws by using offshore servers, networks of illicit cash couriers and complex financial transactions. But tycoons in the lucrative world of international sports gambling now have one sure bet: If your conduct violates American law, you will find yourself in a United States courtroom and be held to account.”
“Sophisticated racketeering organizations continually rely on the mistaken notion that they can move beyond the reach of the law by spreading their operations across international borders,” stated FBI Special Agent in Charge Eric S. Birnbaum. “Today’s guilty plea demonstrates that there are no safe havens. The FBI will work tirelessly with our international partners to ensure that criminals are brought to justice no matter where they hide.”
Karlsson’s sentencing is currently set for July 17, 2017 at 9 a.m. The remaining defendants are set for a motion hearing June 26, 2017 before Judge Roger T. Benitez.
DEFENDANTS—Case Number: 16CR1695-BEN Next Court Date
Sanders Bruce Segal Motion Hearing June 26, 2017
Stanley Samuel Penn Motion Hearing June 26, 2017
Petter Magnus Karlsson Sentencing
David Greg Leppo Motion Hearing June 26, 2017
Pablo Ballestro Frech Sentencing
Sydney Bruce Segal Motion Hearing June 26, 2017
Joseph Edward Spatafore Motion Hearing June 26, 2017
Minh Triet Dinh Nguyen Sentencing
James Heng Tear Sentencing
Ken Pheng Keo Sentencing
Jason D. Taylor Sentencing
Jeffrey Alan Burke Sentencing
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, and a $250,000 fine
Defendants 1-6
Count 2: Illegal Gambling Business, in violation of Title 18, United States Code, Section 1955
Maximum Penalties: 5 years in prison, 3 years supervised release, and a $250,000 fine
All defendants
Count 3: Transmitting Wagering Info, in violation of Title 18, United States Code, Section 1084(a)
Maximum Penalties: 2 years in prison, 1 year supervised release, and a $250,000 fine
Defendants 7 and 11
DEFENDANT—Case Number: 16CR1696-BEN Next Court Date
Robert Jay Zaben Motion Hearing June 26, 2017
AGENCIES
Federal Bureau of Investigation
San Diego Police Department
Internal Revenue Service – Criminal Investigation
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Defendant in Murder of U.S. Border Patrol Agent Brian Terry Arrested in MexicoRead the Press Release
Heraclio Osorio-Arellanes, who is charged with participating in the murder of U.S. Border Patrol Agent Brian Terry, was taken into custody by Mexican authorities in Chihuahua, Mexico on Wednesday based on a provisional arrest warrant issued at the request of the United States.
“The Department of Justice is pleased that the suspected killer of Border Patrol Agent Brian Terry has been captured and will now face justice for this terrible crime,” said Attorney General Jeff Sessions. “We are grateful for the efforts of the Federal Bureau of Investigation, U.S. Marshals Service and U.S. Customs and Border Protection. I especially want to commend the government of Mexico and specifically the Mexican Navy (SEMAR) and Mexico’s Office of the Attorney General (PGR) for their courage and their outstanding work in the daring operation that apprehended this dangerous defendant. To anyone who would take the life of an American citizen, in particular an American law enforcement officer, this action sends a clear message: Working closely with our international partners, we will hunt you down, we will find you, and we will bring you to justice.”
Osorio-Arellanes is one of seven defendants charged in the District of Arizona with murder and other crimes arising from the murder of Agent Terry on Dec. 14, 2010. Osorio-Arellanes will be transported to Mexico City for extradition proceedings.
With Osorio-Arellanes’ arrest, six of the seven defendants in this case are in custody:
Defendants Ivan Soto-Barraza and Jesus Lionel Sanchez-Meza were arrested in Mexico and subsequently extradited to the United States in 2014. They were convicted by a jury of first-degree murder and other offenses in December 2015 following a jury trial and were sentenced to life in prison.
Defendants Manuel Osorio-Arellanes and Rosario Rafael Burboa-Alvarez pleaded guilty to first-degree murder; Osorio-Arellanes was sentenced to 360 months in prison, while Burboa-Alvarez was sentenced to 324 months. Defendant Rito Osorio-Arellanes pleaded guilty to conspiracy to interfere with commerce by robbery and was sentenced to 96 months in prison.
Defendant Jesus Favela-Astorga is a fugitive in Mexico. The Federal Bureau of Investigation, the U.S. Marshals Service, and Mexican authorities are working to locate this defendant.
“Agent Terry gave his life protecting our country,” said Acting U.S. Attorney Alana W. Robinson for the Southern District of California. “While we cannot reverse this tragedy, we will not stop until justice is complete in this case.”
The case is being prosecuted by attorneys from the Southern District of California, Special Attorneys Todd W. Robinson and David Leshner. The U.S. Attorney’s Office for the District of Arizona is recused. The case was investigated by the FBI. The apprehension was a coordinated effort by the Mexican Navy (SEMAR), Mexico’s Office of the Attorney General (PGR), FBI, U.S. Marshals Service and U.S. Border Patrol with significant assistance provided by the Criminal Division’s Office of International Affairs.
Osorio-Arellanes IndictmentAccounts Payable Supervisor Who Embezzled Millions of Dollars Sentenced to PrisonRead the Press Release
For Further Information, Contact: Assistant U.S. Attorney Joseph J.M. Orabona (619)546-7951 or Assistant U.S. Attorney Aaron Arnzen (619)546-8384
NEWS RELEASE SUMMARY – April 7, 2017
SAN DIEGO – Former Accounts Payable Supervisor Edward Abellana was sentenced today in federal court to two years in prison for abusing his position of trust at Argen Corporation, a San Diego-based metals company, in order to steal millions of dollars which he used to fund a lavish lifestyle.
U.S. District Court Judge Janis L. Sammartino also ordered Abellana to repay approximately $1,952,202 to Argen and pay approximately $661,000 to the Internal Revenue Service for unpaid taxes on the money he embezzled from Argen.
According to his plea agreement, Abellana worked as the Accounts Payable Supervisor from December 2011 until October 2015. While overseeing the metals company’s credit card accounts, Abellana used his access (between June 2012 and October 2015) to embezzle approximately $1.9 million which he used for a variety of purchases, including renting private jets; paying for luxury vacations to Hawaii, Las Vegas, and Disneyland, and paying for a trip to the Super Bowl and other sporting events.
For example, Abellana admitted he charged more than $70,000 to charter a private jet to take him, his family and friends to Hawaii.
Abellana also used his position to defraud Argen by issuing unauthorized checks against the company’s checking account to pay for personal expenses. In total, Abellana admitted that he issued more than $162,000 in fraudulent checks.
As further provided in his plea agreement, Abellana was able to carry out the embezzlement by virtue of his access to the full range of financial records and accounts. On most occasions, Abellana would simply use the company’s credit cards to make personal purchases. In order to conceal his fraud, he intercepted the credit card statements and used computer software to alter the statements. Thereafter, he falsified the company’s books and records by falsely characterizing his personal purchases as legitimate business expenses.
In addition to his embezzlement scheme, Abellana filed false tax returns. He failed to report the money he embezzled on his tax returns for tax years 2012 through 2015. Abellana admitted that he owes the Internal Revenue Service more than $661,000 in federal income taxes.
“Edward Abellana took advantage of his trusted position at the company in order to wire millions of dollars for his own personal benefit,” said Acting U.S. Attorney Alana W. Robinson. “When a trusted employee uses federal wires to feed his own greed, he will be vigorously investigated and prosecuted for his crimes – not only for stealing the money, but also for failing to report the income and pay taxes.”
“For several years Edward Abellana abused his fiduciary responsibility as an Accounts Payable Supervisor,” said Eric S. Birnbaum, Special Agent in Charge of the FBI’s San Diego Division. “In doing so, he took advantage of his position of trust and defrauded his employer in order to live his lavish lifestyle. The FBI and other law enforcement agencies rely heavily on the trust and cooperation of members of the business industry and citizens to assist us in performing our mission. Through this cooperative effort, we are able to identify and hold those individuals accountable for criminal acts driven by their personal greed.”
“Individuals thinking about participating in embezzlement schemes should stop in their tracks and simply look at the consequences of taking the next step,” stated Special Agent in Charge R. Damon Rowe for IRS Criminal Investigation. “As Mr. Abellana learned today, those consequences include going to prison, being branded a convicted felon and paying back all the taxes owed plus steep penalties and interest on the unreported income.”
At the conclusion of today’s hearing, Abellana was ordered to self-surrender on June 2, 2017.
DEFENDANT Criminal Case No. 17CR0125-JLS
Edward K. Abellana Age: 40
SUMMARY OF CHARGES:
Count 1 – Wire Fraud (18 U.S.C. § 1343)
Maximum Penalties: maximum sentence of 20 years in prison; maximum fine of $250,000; maximum term of supervised release of 3 years
Count 2 – Making a False Tax Return (26 U.S.C. § 7206(1))
Maximum Penalties: maximum sentence of 3 years in prison; maximum fine of $250,000; maximum term of supervised release of 1 year
INVESTIGATING AGENCIES
Federal Bureau of Investigation
Internal Revenue Service – Criminal Investigations
Former Fedex Driver Who Set up Fake Hedge Fund Sentenced to 33 MonthsRead the Press Release
Assistant U.S. Attorney Andrew J. Galvin (619) 546-9721
NEWS RELEASE SUMMARY – March 27, 2017
SAN DIEGO – Joshua Knaup, the founder and chief investment officer of EquityPro Capital, was sentenced Friday to 33 months in prison and ordered to pay $556,629 in restitution for stealing over half a million dollars from local investors.
In addressing Knaup, U.S. District Judge Cathy Ann Bencivengo said, “You didn’t steal from a stranger, you stole as a friend, and in this court’s opinion that’s even worse. That’s a theft that goes right to the heart and soul and stays with the victim for a very long time.” Knaup was remanded into custody at the conclusion of the hearing.
After losing his job as a FedEx driver, Knaup opened up EquityPro Capital, an investment management firm based in downtown San Diego. Near the end of 2013, Knaup falsely claimed to have established a new hedge fund and began soliciting investors. Knaup gave potential investors a prospectus that provided detailed information about his purported hedge fund, which Knaup called “The F2 Fund.” According to the prospectus, The F2 Fund derived its name “from a passage in the Bible about giving of the ‘First Fruits’ of your income.” In order to attract investors, Knaup guaranteed that investors would receive a certain return on their investment and falsely claimed to have invested his own money in the hedge fund.
According to court documents, Knaup conned victims into giving him hundreds of thousands of dollars. Knaup ingratiated himself with Lois and Henry Mathews, who live in Bankers Hill, while attending their 45th wedding anniversary celebration. Knaup promised to help Ms. Mathews retire and claimed that her $240,000 investment would be safe. Instead, Ms. Mathews, a small-business owner, lost it all. As she wrote to the court, “I am 72 years old and work very hard in a very physical and stressful business and I will have to continue to work this hard for the rest of my life because of what Josh [Knaup] stole from us.”
Knaup met another victim, Lewis Barnum from Coronado, at a Rotary Club meeting. Knaup boasted about his success in the stock market and promised a substantial return. Barnum ultimately lost over $130,000 to Knaup. Yet another victim met Knaup on the side of a freeway while changing a tire. Knaup talked a lot about his investment company, and the victim, a Border Patrol agent, decided to invest $10,000. When the victim told he was about to have a child and needed his money, Knaup wrote him a $10,000 check that bounced.
With the thousands of dollars he stole from investors, Knaup rented prime office space in a building near Petco Park. Inside the office, Knaup created a wall using 30 flat screen televisions that displayed stock trading information—a fact that duped investors would later mention as an apparent sign of the business’ legitimacy. Knaup even threw a party for the investors at the Hotel Indigo with sushi, an open bar and gift bags.
Despite these outward indications of success, The F2 Fund did not exist. Knaup had not even opened a brokerage account for the investors’ funds. Investors ultimately poured over half a million dollars into the non-existent hedge fund. Knaup did not invest a single dollar of investors’ funds, and instead used the money for personal and business purchases. In the fall of 2014, Knaup’s business began to unravel as investors realized that Knaup had not invested their money. Knaup fled to Mexico shortly thereafter, without ever repaying the victims he had defrauded.
“Mr. Knaup perpetrated a scheme weaved with facades and lies to prey on trusting, hard-working people intending to make legitimate investments," said Special Agent in Charge Eric S. Birnbaum. “Today's sentence will prevent Mr. Knaup from victimizing investors for a long while and serve as a reminder that the FBI will continue to protect the American public by pursuing fraudsters and bringing them to justice.”
DEFENDANT: Case Number 16-CR-560-CAB
Joshua Knaup Age: 41 Santa Rosa, CA
SUMMARY OF CHARGES
Wire Fraud – Title 18, U.S.C., Section 1343
Maximum penalty: 20 years’ imprisonment and $250,000 fine
AGENCY
Federal Bureau of Investigation
U.S. Navy Admiral Plus Eight Officers Indicted as Part of Corrupt Team that Worked Together to Trade Navy Secrets for Sex PartiesRead the Press Release
Assistant U.S. Attorneys Mark W. Pletcher (619) 546-9714 and Patrick Hovakimian (619) 546-9718
NEWS RELEASE SUMMARY – March 14, 2017
SAN DIEGO – Retired U.S. Navy Rear Admiral Bruce Loveless and David Newland, chief of staff to the Commander of the Navy’s Seventh Fleet, along with seven other high-ranking Navy officers are charged in a federal grand jury indictment with acting as a team of moles for a foreign defense contractor, trading military secrets and substantial influence for sex parties with prostitutes, extravagant dinners and luxury travel.
According to a federal grand jury indictment unsealed today, the Navy officers worked together to help Singapore-based defense contractor Leonard Glenn Francis and his company, Glenn Defense Marine Asia, pull off a colossal fraud that ultimately cost the Navy – and U.S. taxpayers – tens of millions of dollars.
Navy officers were arrested early this morning in California, Texas, Florida, Colorado and Virginia. The United States will seek their removal to face charges in San Diego. Admiral Loveless was taken into custody at his home in Coronado and was expected to make his first appearance in federal court in San Diego at 2 p.m. before U.S. Magistrate Judge Mitchell D. Dembin. The other defendants are Captains David Newland, James Dolan, Donald Hornbeck and David Lausman; Marine Corps Colonel Enrico DeGuzman; Commander Mario Herrera; Lt. Commander Stephen Shedd and Chief Warrant Officer Robert Gorsuch. DeGuzman is also scheduled to appear before Judge Dembin today at 2 p.m.
The defendants face various charges including bribery, conspiracy to commit bribery, honest services fraud and obstruction of justice and making false statements to federal investigators when confronted about their actions. Two defendants – Shedd and Herrera - are active duty; the others are recently retired.
The indictment is a veritable 78-page list of allegations in which Francis spent tens of thousands of dollars on bribing the defendants and the actions the officers took to reciprocate. Francis plied the officers with things like foie gras terrine, duck leg confit, ox-tail soup, $2,000 boxes of cigars and $2,000 bottles of rare cognac, plus wild sex parties in fancy hotels.
For their part, the defendants allegedly worked in concert to help Francis and GDMA win and keep defense contracts to provide port services to U.S. Navy ships; to redirect ships to ports controlled by Francis in Southeast Asia so he could overbill the Navy for supplies and services such as food, water, fuel, tugboats, and sewage removal; to sabotage competing defense contractors; to recruit new members for the conspiracy by spreading the “Glenn Gospel” to incoming Seventh Fleet leaders; and to keep the conspiracy secret by using fake names and foreign email service providers.
Including today’s defendants, a total of 25 named individuals have been charged in connection with the GDMA corruption and fraud investigation. Of those, 20 are current or former U.S. Navy officials; five are GDMA executives. Thirteen have pleaded guilty; other cases are pending.
“This is a fleecing and betrayal of the United States Navy in epic proportions, and it was allegedly carried out by the Navy’s highest-ranking officers,” said Acting U.S. Attorney Alana W. Robinson. “The alleged conduct amounts to a staggering degree of corruption by the most prominent leaders of the Seventh Fleet – the largest fleet in the U.S. Navy - actively worked together as a team to trade secrets for sex, serving the interests of a greedy foreign defense contractor, and not those of their own country.”
“The defendants in this indictment were entrusted with the honor and responsibility of administering the operations of the U.S. Navy’s Seventh Fleet, which is tasked with protecting our nation by guarding an area of responsibility that spanned from Russia to Southeast Asia and the Indian Ocean,” said Acting Assistant Attorney General Kenneth A. Blanco. “With this honor and awesome responsibility came a duty to make decisions based on the best interests of the Navy and the 40,000 Sailors and Marines under their care who put their lives at risk every day to keep us secure and free. Unfortunately, however, these defendants are alleged to have sold their honor and responsibility in exchange for personal enrichment.”
“The allegations contained in today’s indictment expose flagrant corruption among several senior officers previously assigned to the U.S. Navy's Seventh Fleet. The charges and subsequent arrests are yet another deplorable example of those who place their own greed above their responsibility to serve this nation with honor,” said Dermot F. O'Reilly, Director, Defense Criminal Investigative Service.
“Naval Criminal Investigative Service, in concert with our partner agencies, remains resolved to follow the evidence wherever it leads, and to help hold accountable those who make personal gain a higher priority than professional responsibility,” Special Agent Andrew L. Traver, NCIS Director. “It's unconscionable that some individuals choose to enrich themselves at the expense of military security.”
Here’s a sampling of bribes alleged in the indictment:
-During the U.S.S. Blue Ridge’s port visit to Sydney Australia on June 17, 2007, Francis hosted and paid for a dinner event at the Altitude Restaurant within the Shangri-La Hotel. Some of the defendants dined on saute of scallops, foie gras, and beef loin for a cost of $11,898. During dinner, defendant Gorsuch handed Francis two floppy disks containing classified port visit information for many U.S. Navy ships, according to the indictment.
-In March 2007, Francis hosted and paid for a multi-course dinner for several of the defendants at the Oak Door in Tokyo, Japan. The menu included foie gras, Lobster Thermidor, Sendai Tenderloin, and for dessert, Liberte Sauvage, the winning cake of the 10th Coupe du Monde de la Patisserie 2007, followed by cognac and cigars. Each course was paired with fine champagne or wine. Attendees posed for photographs wearing custom-made GDMA neckties that Francis had given them as gifts.
-During one port visit in Singapore on March 9, 2006, Francis seduced the leaders of the Seventh Fleet with foie gras terrine, duck leg confit, ox-tail soup, roasted Chilean sea bass, paired with expensive wine and champagne, followed by digestifs and cigars. The extravagance included $600-a-bottle Hennessy Private Reserve, $2,000-a-bottle Paradis Extra and $2,000-a-box Cohiba Cigars.
According to the indictment, the group of officers referred to themselves using various terms, such as “the Cool Kids,” “the Band of Brothers,” “the Brotherhood,” “the Wolfpack,” “the familia,” and “the Lion King’s Harem.” The officers tried to conceal their corrupt relationships by using fictitious names to create email addresses using foreign-based email services.
This is the first time multiple officers are charged as working all together in a multi-layered conspiracy, pooling their individual and collective resources and influence on behalf of Francis.
In addition to performing various official acts in return for Francis’s booty, these officers are also accused of violating many of the sworn official duties required of them as Navy officers, including duties related to the handling of classified information and duties related to the identification and reporting of foreign intelligence threats.
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 which operate in the Western Pacific Ocean throughout Southeast Asia, Pacific Islands, Australia, and Russia as well as 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 U.S.S. Blue Ridge is the command-and-control ship of the Seventh Fleet and housed at-sea facilities for Seventh Fleet senior officials.
The Seventh Fleet’s motto: Ready Power for Peace.
In addition to the nine defendants charged today, the 11 Navy officials charged so far in the fraud and bribery investigation are: Admiral Robert Gilbeau; Captain Michael Brooks; Captain Daniel Dusek; Commander Jose Luis Sanchez; Commander Michael Misiewicz; Commander Bobby Pitts; Lt. Commander Gentry Debord; Lt. Commander Todd Malaki; Petty Officer First Class Daniel Layug; Naval Criminal Investigative Service Supervisory Special Agent John Beliveau; and Paul Simpkins, a former DoD civilian employee, who oversaw contracting in Singapore.
Gilbeau, Brooks, Dusek, Misiewicz, Sanchez, Debord, Malaki, Layug, Beliveau, and Simpkins 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; Gilbeau, Brooks, and Sanchez await sentencing. Pitts was charged in May 2016 and his case is pending.
Also charged are five GDMA executives – Francis, Alex Wisidagama, Edmund Aruffo, Neil Peterson and Linda Raja. Three have pleaded guilty; Wisidagama was sentenced on March 18, 2016 to 63 months in prison and $34.8 million in restitution to the U.S. Navy. Francis and Aruffo await sentencing. Peterson and Raja were extradited to the United States from Singapore in September 2016 and their cases remain pending.
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 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.
DEFENDANTS Case Number: 17CR0623-JLS
Captain David Newland Age 60 San Antonio, Texas
Chief of Staff to the Commander of the Seventh Fleet
Colonel Enrico DeGuzman Age 58 Honolulu, Hawaii
Fleet Marine Office of the Seventh Fleet, responsible for coordinating the missions of the U.S. Marine Corps with the Seventh Fleet; and Assistant Chief of Staff of Operations for U.S. Marine Corps Forces, Pacific
Captain James Dolan Age 58 Gettysburg, Pennsylvania
Assistant Chief of Staff for Logistics for the Seventh Fleet, responsible for meeting the logistical needs of every ship within the Seventh Fleet’s area of responsibility
Captain Donald Hornbeck Age 56 United Kingdom
Deputy Chief of Staff for Operations for the Seventh Fleet, responsible for directing the operations of all combatant ships in the Seventh Fleet area of responsibility
Rear Admiral, Retired, Bruce Loveless Age 53 Coronado, CA
Previously a Captain and Assistant Chief of Staff for Intelligence for the Seventh Fleet, responsible for assessing and counteracting foreign intelligence threats within the Seventh Fleet’s area of responsibility
Captain David Lausman Age 62 The Villages, Florida
Executive Officer of the aircraft carrier U.S.S. Abraham Lincoln; Commanding Officer of U.S.S. Blue Ridge; Commanding Officer of U.S.S. George Washington
Lt. Commander Stephen Shedd Age 43 Colorado Springs, CO
Seventh Fleet’s South Asia Policy and Planning Officer, responsible for identifying ports that U.S. Navy ships would visit; and once promoted to Commander, served as Executive Officer and Commanding Officer of the U.S.S. Milius
Commander Mario Herrera Age 48 Helotes, Texas
Fleet Operations and Schedules Officer for the Seventh Fleet, responsible for scheduling the port visits for ships and submarines in the Seventh Fleet’s area of responsibility (Herrera was previously charged in February 2017 via complaint)
Chief Warrant Officer Robert Gorsuch Age 49 Virginia Beach, Virginia
Seventh Fleet’s Flag Administration Officer, responsible for providing administrative support to the Seventh Fleet Commander and other senior officers on the Seventh Fleet staff
SUMMARY OF CHARGES
Conspiracy to Commit Bribery, in violation of 18 U.S.C. § 371
Maximum Penalty: 5 years in prison, a $250,000 fine, or twice the gross pecuniary gain or twice the gross pecuniary loss, whichever is greater
Bribery, in violation of 18 U.S.C. § 201
Maximum Penalty: 15 years in prison, a $250,000 fine or twice the gross pecuniary gain or gross pecuniary loss from the offense, or three times the monetary equivalent of the thing of value, whichever is greater
False Statements, in violation of 18 U.S.C. § 1001
Maximum Penalty: 5 years in prison, a $250,000 fine
Obstruction of Justice, in violation of 18 U.S.C. § 1519
Maximum Penalty: 20 years in prison, a $250,000 fine
Conspiracy to Commit Honest Services Wire Fraud, in violation of 18 U.S.C. §§ 1349, 1346, 1343
Maximum Penalty: 20 years in prison, a $250,000 fine
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
Defense Contract Audit Agency
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
BREAKDOWN OF COUNTS
Counts
Code
Description
Defendant(s)
1
18 U.S.C. § 371
Conspiracy to Commit Bribery
All
2
18 U.S.C § 201(b)(2)(A) and (C)
Bribery
Newland
3
18 U.S.C § 201(b)(2)(A) and (C)
Bribery
DeGuzman
4
18 U.S.C § 201(b)(2)(A) and (C)
Bribery
Hornbeck
5
18 U.S.C § 201(b)(2)(A) and (C)
Bribery
Dolan
6
18 U.S.C § 201(b)(2)(C)
Bribery
Loveless
7
18 U.S.C § 201(b)(2)(A) and (C)
Bribery
Lausman
8
18 U.S.C § 201(b)(2)(A) and (C)
Bribery
Herrera
9
18 U.S.C § 201(b)(2)(A) and (C)
Bribery
Shedd
10
18 U.S.C § 201(b)(2)(A) and (C)
Bribery
Gorsuch
11
18 U.S.C. § 1001(a)(2)
False Statements
Lausman
12
18 U.S.C. § 1519
Obstruction
Lausman
13
18 U.S.C. §§ 1349, 1346, and 1343
Conspiracy to Commit Honest Services Wire Fraud
All
Defense Contractor Pleads Guilty to Stealing Medical Equipment Intended to be Shipped to Deployed MarinesRead the Press Release
Assistant U.S. Attorneys W. Mark Conover (619) 546- 6763 and Michelle L. Wasserman (619) 546-8431
NEWS RELEASE SUMMARY – March 14, 2017
SAN DIEGO – John Montano, a former Camp Pendleton defense contractor, pleaded guilty today to conspiring to steal over $250,000 worth of medical equipment that the military had planned to ship overseas to treat injured Marines.
Montano and his co-conspirators (many of whom have already pleaded guilty) worked in warehouses run by 1st Medical Logistics Company (“1st MEDLOG”) aboard USMC Camp Pendleton. 1st MEDLOG is the unit responsible for maintaining medical equipment and shipping necessary medical items to combat forces throughout the world. By virtue of his employment as a civilian defense contractor, Montano had access to sophisticated, expensive medical equipment stored at 1st MEDLOG warehouses. In his plea agreement, Montano admitted to participating in a conspiracy to steal expensive medical equipment from 1st MEDLOG, including anesthesia machines, autoclaves, ventilators, ultrasound machines, defibrillators and laryngoscopes among other items. Montano further admitted that he used his access to and knowledge of this medical equipment to help his co-conspirators steal the items from the warehouse. His co-conspirators then secretly removed the items from the base and sold them on the open market.
Acting U.S. Attorney Alana W. Robinson would like to remind the public that these charges were the result of ongoing efforts to root out corruption among our area defense contractors. She encouraged the public to contact the Naval Criminal Investigative Service (NCIS) at 1-800-264-6485 or www.ncis.navy.mil if they have information about the theft of equipment from Camp Pendleton or other Navy installations.
As part of his plea, Montano agreed to a restitution order of $250,000 to repay the U.S. Marine Corps for the value of the medical equipment that he stole. Montano will appear for sentencing on [DATE], 2017, at [TIME] before U.S. District Judge Cathy Ann Bencivengo.
DEFENDANTS Case Number: 16CR2053-CAB
John Montano Age: 44 Grants, New Mexico
SUMMARY OF CHARGES
Count 1: Conspiracy to Engage in Theft of Government Property, Title 18, United States Code, Section 371
Maximum penalties: 5 years in prison, $250,000 fine, term of supervised release of 3 years, restitution, and $100 special assessment.
INVESTIGATING AGENCY
Naval Criminal Investigative Service
Woman Sentenced to Eight Years for Alien Smuggling Leaving Two Dead, One Brain Dead, One ParalyzedRead the Press Release
For Further Information, Contact: Assistant U.S. Attorney Lara A. Stingley (619)546-8403 and Brandon J. Kimura (619) 546-9614
NEWS RELEASE SUMMARY – March 13, 2017
SAN DIEGO – An alien smuggler whose crash while speeding away from Border Patrol last year resulted in the deaths of two of her customers was sentenced today in federal court to eight years in prison.
Lydiana Castro, of Calexico, California, pleaded guilty in July of 2016, admitting that on March 23, 2016, she picked up five undocumented aliens at a gas station in an area known as “Pilot’s Knob,” a mountainous area near Andrade, California. Approximately five minutes later, U.S. Border Patrol agents, who saw Castro picking up the undocumented aliens, activated their lights and sirens in an attempt to conduct a vehicle stop.
Castro admitted in her plea agreement that she saw Border Patrol and started to slow down as if to pull over but decided suddenly to take off. But she accelerated, driving off of the Andrade Road freeway entrance and onto an embankment. Her vehicle fishtailed and continued toward Interstate 8 while careening down the embankment. Castro drove onto the westbound lane of Interstate 8 and struck a passing semi-truck. The defendant’s vehicle became entangled with the semi-truck and was dragged along with the semi-truck until it stopped on the side of the Interstate.
U.S. Border Patrol and first responders arrived to the crash site to find one man hanging face down through the vehicle’s rear window and four other men seated in the second and third rows of the vehicle’s backseats in varying levels of traumatic medical conditions and non-responsive states. Two of the individuals in the vehicle were later pronounced dead at the scene. The remaining passengers were transported to a trauma hospital in Phoenix, Arizona. Of the three surviving passengers, one was deemed brain dead and was transported on life support back to Mexico at the family’s request; one permanently lost the use of both of his legs; and the third continues to live with the challenges of his injuries.
DEFENDANT Criminal Case No. 16CR0731-BAS
Lydiana Castro, Calexico, CA Age: 31
SUMMARY OF CHARGES:
Count 1 – Transportation of Certain Aliens and Aiding and Abetting (8 U.S.C. § 1324(a)(1)(A)(ii), (v)(II), and (a)(1)(B)(iv)).
Maximum Penalties: maximum of life in prison; maximum of $250,000; a mandatory special assessment of $100.00; a term of supervised release of not more than 5 years.
INVESTIGATING AGENCIES
Homeland Security Investigations – U.S. Department of Homeland Security
U.S. Border Patrol – U.S. Department of Homeland Security
Seizure of $1.4 million of Oxycodone at Otay Mesa Port of Entry is Largest Along Southwest Border in Five YearsRead the Press Release
Assistant U. S. Attorney Orlando Gutierrez (619) 546-6958
NEWS RELEASE SUMMARY – March 9, 2017
SAN DIEGO – Adriana Morfin-Paniagua, a United States citizen living in Mexico, was arrested yesterday and charged with importing approximately 47,340 tablets of oxycodone in the largest seizure of what is believed to be oxycodone along the Southwest Border in at least five years. The street value of these tablets is approximately $1,420,000 dollars.
According to a criminal complaint filed in federal court, on March 8, 2017, Morfin-Paniagua entered the United States at the Otay Mesa Port of Entry as the driver and sole occupant of a 1999 Honda Accord. Following a secondary inspection of the Honda Accord, Custom and Border Protection Officials located thirty packages containing the oxycodone tablets inside a hidden, non-factory compartment.
These tablets have an illegal street value of $30 to $40 per tablet. At $30 each, the street value of 47,340 tablets is $1,420,200.00 dollars. When drugs are seized at the border, they are tested in the field, and these pills tested positive as oxycodone. The drugs are then forensically tested in a DEA lab to confirm those findings. Those tests can take about a week or sometimes more.
Morfin-Paniagua was subsequently charged with a violation of Title 21, United States Code, 952 and 960, importation of a controlled substance, and booked into the Metropolitan Correctional Center.
“This is one of the biggest seizures of oxycodone at a San Diego port of entry,” said Acting U.S. Attorney Alana Robinson. “Every pill we seize is one that we keep out of the mouths of abusers who are on a path to destruction.”
“HSI San Diego is committed to fully investigating criminal activity linked to the transnational movement of counterfeit pharmaceuticals,” said James Plitt, acting special agent in charge for HSI San Diego. “Our agents will continue to work diligently with our law enforcement and prosecutorial partners to counter this type of criminal activity.”
Morfin-Paniagua made her first appearance today before U.S. Magistrate Judge Jan Adler.
DEFENDANT Case Number: 17MJ0710
Adriana Morfin-Paniagua Age: 22 Tijuana, Mexico
SUMMARY OF CHARGES
Title 21, United States Code, 952 and 960, Importation of a Controlled Substance
Maximum Penalty: Twenty years in custody.
AGENCIES
Homeland Security Investigations
United States Customs and Border Protection
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Airline Staffing Executive Charged with Immigration Fraud for Staff ApplicationsRead the Press Release
Assistant U.S. Attorney Nicholas W. Pilchak (619) 546-9709
NEWS RELEASE SUMMARY – March 8, 2017
SAN DIEGO – Eleno Quinteros, Jr., the former Vice President of Operations for two airline mechanic staffing companies, was arraigned today on a federal indictment charging him with making false statements in support of legal permanent resident petitions for 20 of the companies’ mechanics.
The indictment alleges that Quinteros denied taking any payments from the mechanics, when in fact Quinteros had demanded and collected hundreds of thousands of dollars in fees from the employees in connection with their legal permanent resident applications. This practice is illegal.
According to the indictment, Quinteros regularly demanded and collected thousands of dollars in fees from employees, even though employers are prohibited by law from demanding payment for their fees—including attorneys’ fees—in connection with the charged applications. A portion of the fees collected by Quinteros were paid to attorneys assisting with the applications. The rest were pocketed by Quinteros and his wife, the indictment alleges.
Quinteros was vice president of two different staffing companies, and part owner of one of them. The companies’ staff performed heavy maintenance on aircraft at a variety of locations nationwide. Quinteros was responsible for recruiting Mexican airline mechanics to work in the United States for the companies, and for helping recruits to obtain work visas such as TN or H-2B visas.
According to the indictment, after Quinteros assisted recruits in obtaining work visas to come to the United States, he then arranged to help many of them pursue legal permanent residency—for at least several thousand dollars apiece. Quinteros directed many employees to pay the money to his wife’s bank account in order to conceal its source. The indictment alleges that Quinteros has directed dozens of recruits wishing to become permanent residents to deposit or transfer hundreds of thousands of dollars to him and his wife in order to secure his assistance with the process.
Quinteros is charged in the indictment with twenty counts of making a false claim in support of an immigration application, in violation of Title 18, United States Code, Section 1546(a), and twenty counts of making a false statement to a federal agency, in violation of Title 18, United States Code, Section 1001.
“Lying to get a green card is a serious offense, particularly when the lie is an employer’s false statement that he has not extracted prohibited fees from his employees,” said Acting U.S. Attorney Alana W. Robinson. “This Office is committed to combatting immigration fraud and preventing those in a position to exploit lawful immigrants from doing so.”
“As the lead agency in this four-and-a-half year investigation, the Diplomatic Security Service demonstrated its commitment to maintaining the integrity of U.S. travel documents. We will pursue those who fraudulently use temporary work visas, like the H2B, to manipulate and exploit foreign workers for personal gain,” said Michael Bishop, special agent in charge of the DSS Los Angeles Field Office. “Diplomatic Security Service’s strong relationship with our law enforcement partners as part of the Document Benefit Fraud Task Force continues to be essential in the pursuit of justice.”
“Our message is simple -- America’s legal immigration system is not for sale,” said Joseph Macias, special agent in charge for Homeland Security Investigations (HSI) Los Angeles. “In addition to posing significant security and safety vulnerabilities, visa fraud undermines the integrity of our legal immigration process and penalizes those who abide by the law. HSI will work closely with its law enforcement partners to ensure that those who would exploit our nation’s immigration system for their own enrichment are brought to justice.”
The charges and allegations contained in an indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.
DEFENDANT Case No. 17-cr-557-MMA
Eleno “Max” Quinteros, Jr. 45 years old Chula Vista, California
CHARGES
False Statement on an Immigration Document - 18 U.S.C. § 1546(a)
Maximum penalty: 10 years’ imprisonment and $250,000 fine
False Statement – 18 U.S.C. § 1001
Maximum penalty: 5 years’ imprisonment and $250,000 fine
AGENCIES
Department of State, Diplomatic Security Service
Internal Revenue Service, Criminal Investigations
Florida Man Arrested for Forcing a San Diego Company’s Website Off-LineRead the Press Release
Assistant U. S. Attorney Alexandra Foster (619) 546-6735
NEWS RELEASE SUMMARY – March 3, 2017
SAN DIEGO – A Florida man was arrested this morning on charges that he intentionally shut down a San Diego software company’s website and refused to restore it until the business paid him money.
Gerard “Jerry” M. McTear III was taken into custody in Ft. Myers, Florida this morning. In an indictment unsealed today, McTear was charged with threatening to damage and intentionally damaging computers. These computers hosted the San Diego software company’s website.
Specifically, on June 6, 2016, the defendant used the internet to shut down the software company’s website. He sought to extort cryptocurrency from the company in return for allowing the website to resume functioning. The company refused to pay the proffered bribe, and lost over $5,000 in business as they worked to get their website back on-line.
The defendant was arraigned today in the United States District Court for the Fort Myers Division, Middle District of Florida. The United States will seek his removal to the Southern District of California to face charges here.
“This kind of sabotage can be devastating for companies,” said Acting U.S. Attorney Alana W. Robinson. “We are prepared to go after every type of criminal, even if we have to chase him or her through cyberspace to safeguard businesses.”
“The FBI has the expertise and resources to investigate denial of service and other evolving cyber crimes,” said Eric S. Birnbaum, Special Agent in charge of the FBI’s San Diego Field Office. “This case is an example of the trend we continue to see involving traditional crimes migrating to cyberspace. The FBI will continue to educate and work with the business community to combat this growing crime trend.”
These type of cyber attacks have recently become widespread and cyber agents with the FBI are investigating similar cases. The FBI encourages businesses that have been victimized to ignore ransom demands in order to avoid appearing vulnerable and to avoid being targeted again for a higher amount. Anyone who feels they have been a victim of a cyber crime involving extortion or denial of service attacks is encouraged to contact their local FBI or to file a complaint through the Internet Crime Complaint Center at www.ic3.gov.
DEFENDANT Case Number: 17-CR-0501-JAH
Gerard “Jerry” M. McTear, III Age:29 Ft. Myers, FL
SUMMARY OF CHARGES
Count 1 – Fraud in Connection with Computers, in violation of 18 U.S.C. §§ 1030(a)(5)(A) and 1030(c)(4)(B)(i)
Maximum Penalty: 10 years and $250,000 fine
Count 2 – Threat to Damage a Computer, in violation of 18 U.S.C. §§ 1030(a)(7)(A) and 1030(c)(3)(A)
Maximum Penalty: 5 years and $250,000 fine
Count 3 - Threat to Injure Property Through Interstate Communications, in violation of 18 U.S.C. § 875(d)
Maximum Penalty: 2 years and $250,000 fine
AGENCY
Federal Bureau of Investigation: San Diego Division and Tampa Division - Fort Myers Resident Agency; Lee County Sheriff's Office; Fort Myers Police Department; and Cape Coral Police Department
*The charges and allegations contained in an indictment are merely accusations. Defendants are considered innocent unless and until proven guilty.
Fifty-Five Defendants Charged in Massive Crackdown on North County Heroin, Methamphetamine and Firearms TraffickersRead the Press Release
OFFICE OF THE UNITED STATES ATTORNEY
SOUTHERN DISTRICT OF CALIFORNIA
San Diego, California
Acting United States Attorney
Alana W. Robinson
For Further Information, Contact:
Assistant U. S. Attorneys Matthew Sutton (619) 546-8941, Kyle Martin 546-8384,
Carol Lee 546-7584 and Michael Heyman 546-9615For Immediate Release
NEWS RELEASE SUMMARY – March 1, 2017
SAN DIEGO – Ten federal indictments unsealed today charge 55 defendants with crimes ranging from money laundering to heroin, methamphetamine and firearms trafficking in what officials have described as one of the most significant crackdowns in recent memory.
The defendants, including prominent drug dealers and documented gang members, were responsible for supplying a substantial portion of the heroin and methamphetamine distributed in North County.
Early this morning, more than 150 members of the North County Regional Gang Task Force plus other law enforcement agencies made numerous arrests and during the course of the investigation searched more than 20 locations in Oceanside, Vista, elsewhere in North County and in Kingman, Arizona.
As of today at noon, 46 of the fifty-five defendants are either in federal or state custody. Fourteen were arrested this morning; the rest were arrested earlier in the week or were already in custody. Authorities are continuing to search for seven defendants; two are in Mexico. Many of the defendants are scheduled to be arraigned before U.S. Magistrate Judge Karen S. Crawford at 2:00 p.m. today and tomorrow.
The yearlong investigation was led by the North County Regional Gang Task Force. It involved months of federal wiretaps, dozens of undercover drug and gun buys and extensive surveillance. Many of the defendants are documented members or associates of violent North County street gangs, including the Vista Home Boys, Varrio Fallbrook Locos, Varrio Carlsbad Locos, Encinitas Tortilla Flats, Varrio San Marcos and Escondido Viejo Diablos.
According to charging documents, the defendants were involved in a variety of crimes, including drug distribution, firearms trafficking, robberies, vehicle thefts, burglaries and assaults.
25 firearms including handguns, revolvers and assault rifles.In total, authorities seized heroin, methamphetamine and 25 firearms, including handguns, revolvers and assault rifles. These drugs and guns were being stored and sold in our North County neighborhoods, including across the street from Vista High School.
The charging documents describe a trafficking organization allegedly led by a Mexico-based woman who used dozens of street gang members to distribute heroin. Defendant Yadira “Pini” Villalvazo attended Vista High School and was an associate of Vista Home Boys street gang before she was deported following a federal drug trafficking conviction in 2002. According to charging documents, Villalvazo is now running her own Sinaloa Cartel-linked organization from Tijuana. Her specialty is still heroin.
According to court records, this drug trafficking organization supplied at least 25 percent of the heroin sold and consumed in North County and grossed tens of thousands of dollars in proceeds that were sent back to Mexico. The Villalvazo network distributed heroin in North County and also supplied pound quantities of heroin to a prolific distribution ring in Kingman, Arizona.
During this investigation, the gang task force also targeted major methamphetamine distribution cells connected to North County street gangs, including rings allegedly led by Sabrina Yzaguirre, Ivan Bazan, aka “Dreamer,” and Jorge Enrique Jara Cervantes, aka “Scorpion.” In addition, the ring allegedly led by Jara shipped pound quantities of methamphetamine for distribution in Alabama and Tennessee.
Heroin deaths in San Diego County more than doubled in the last decade, from 40 in 2005 to 90 in 2015. And this is despite the use of naloxone, which first responders have used to save countless lives. In 2015 alone, paramedics used naloxone 1,340 times. Heroin treatment admissions have risen every year in San Diego County since 2011.
fugitives_no_worries.pdf
Meth-related deaths increased more than 80% between 2011 and 2015. And about half of adults arrested in 2015 tested positive for meth at the time of their arrest.“Today we’ve taken out one of North County’s largest heroin suppliers,” said Acting U.S. Attorney Alana Robinson. “This crackdown is our most significant response to date to the heroin epidemic ravaging our communities. We anticipate seeing a huge impact now that these defendants are removed from our community, particularly in the North County cities of Oceanside, Vista, San Marcos and other areas plagued by gangs.”
“The Sheriff's Department is committed to working with our law enforcement partners to keep the influence of drugs and gangs away from our children and out of our community,” said San Diego County Sheriff Bill Gore.
FBI Special Agent in Charge Eric S. Birnbaum stated, “This investigation demonstrates the complex, international and multi-faceted nature of the gang threat in North County where heroin, methamphetamine and firearms related crimes threaten our communities. The FBI will continue to work tirelessly alongside our law enforcement partners at the North County Regional Gang Task Force to restore these neighborhoods to the good citizens who live in them.”
Acting U.S. Attorney Robinson praised the task force for the coordinated team effort in the culmination of this investigation. Agents and officers from the Federal Bureau of Investigation, San Diego County Sheriff's Office, Oceanside Police Department, Bureau of Alcohol, Tobacco, Firearms and Explosives, the California Department of Corrections and Rehabilitation, Bureau of Prisons, Homeland Security Investigations. U.S. Marshals Service, California Highway Patrol, and the Escondido and Carlsbad Police Departments collaborated on this investigation. Attorneys from the Department of Justice, Office of Enforcement Operations, Electronic Surveillance Unit, also provided critical assistance to the investigation.
This case is also the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF) a partnership that brings together the combined expertise and unique abilities of federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, dismantle and prosecute high level members of drug trafficking, weapons trafficking and money laundering organizations and enterprises.
The United States is represented in court by Assistant U.S. Attorneys Matthew J. Sutton, Kyle B. Martin, Carol Lee, and Michael J. Heyman.
Operation No Worries Defendant Information
DEFENDANTS Criminal Case No: 17CR0336-LAB
Name
Age
Hometown
Yadira Esmeralda Villalvazo,
aka “Pini”
38
Tijuana, MX
Andrea Ball
37
Vista, CA
Cristina Gomez
30
Vista, CA
Joel Villalvazo
25
Vista, CA
Joshua O’Brien
35
Fallbrook, CA
David Dominguez,
aka “Bandit”
36
Vista, CA
Tina Dominguez
35
Vista, CA
Fidel Jimenez
36
Oceanside, CA
Naomi Jimenez,
aka “Huera”
42
Vista, CA
Salvador Mendez
46
Fallbrook, CA
David Siladji
37
Vista, CA
Angel Serrato
55
Vista, CA
Alexander Mendoza
29
Carlsbad, CA
Rene Ramos
45
Kingman, AZ
Maria Sanchez
41
Kingman, AZ
Edivan Patino
27
Vista, CA
Richard Seffens
39
Poway, CA
SUMMARY OF CHARGES
Conspiracy to Distribute Heroin, in violation of Title 21, U.S.C., Secs. 841(a)(1) and 846;
Conspiracy to Import Heroin, in violation of Title 21, U.S.C., Secs. 952, 960, and 963;
Conspiracy to Launder Monetary Instruments, in violation of Title 18, U.S.C., Secs. 1956(a)(2)(B)(i) and (h);
Possession of Methamphetamine with Intent to Distribute in violation of Title 21, U.S.C., Sec. 841(a)(1);
Possession of Heroin with Intent to Distribute in violation of Title 21, U.S.C., Sec. 841(a)(1);
Maximum Penalties: For the drug charges, life in prison with a mandatory minimum sentence of 10 years and a $10 million fine. For the money laundering charges, 20 years in prison and a fine of $500,000 or twice the value of the monetary instrument or funds involved.
DEFENDANTS Criminal Case No: 17CR0337-LAB
Name
Age
Hometown
Andrea Ball
37
Vista, CA
Travis Hensley
36
Fallbrook, CA
Aaron McCune
36
San Marcos, CA
Vanessa Rojas
44
Vista, CA
Edward Araiza
42
Oceanside, CA
SUMMARY OF CHARGES
Conspiracy to Distribute Heroin in violation of Title 21, U.S.C., Secs. 841(a)(1) and 846;
Possession of Methamphetamine with Intent to Distribute in violation of Title 21, U.S.C., Sec. 841(a)(1);
Felon in Possession of a Firearm in in violation of Title 18, U.S.C., Secs. 922(g)(1) and 924(a)(2)
Maximum Penalties: For drug charges: life in prison with a mandatory minimum sentence of 10 years and a 10 million dollar fine. For firearms charges: 10 years’ in prison, and a 250,000 dollar fine.
DEFENDANTS Criminal Case No: 17CR0338-LAB
Name
Age
Hometown
Javier Castrellon,
Aka “Javi”
53
San Marcos, CA
Manuel Espinoza,
Aka “Manny
48
Encinitas, CA
James Caruthers
54
Oceanside, CA
SUMMARY OF CHARGES
Conspiracy to Distribute Methamphetamine in violation of Title 21, U.S.C., Secs. 841(a)(1) and 846;
Distribution of Methamphetamine, in violation of Title 21, U.S.C., Sec. 841(a)(1)
Maximum Penalties: Life in prison with a mandatory minimum sentence of 10 years and a $10 million fine.
DEFENDANT Criminal Case No: 17CR0339-LAB
Name
Age
Hometown
Pedro Bret Cueva,
Aka “Largo
26
San Marcos, CA
SUMMARY OF CHARGES
Distribution of Methamphetamine, in violation of Title 21, U.S.C., Sec. 841(a)(1)
Maximum Penalties: Life in prison with a mandatory minimum sentence of 10 years and a 10 million dollar fine.
DEFENDANT Criminal Case No: 17CR0340-LAB
Name
Age
Hometown
Julio Cesar Valverde,
Aka “Night Owl”
28
San Marcos, CA
SUMMARY OF CHARGES
Distribution of Methamphetamine, in violation of Title 21, U.S.C., Sec. 841(a)(1)
Maximum Penalties: Life in prison with a mandatory minimum sentence of 10 years and a 10 million dollar fine.
DEFENDANT Criminal Case No: 17CR0482-JAH
Name
Age
Hometown
Noe Rene Lugo
Aka “No-No,” “Wolfie”
33
Vista, CA
SUMMARY OF CHARGES
Dealing in Firearms Without a License in violation of Title 18, U.S.C., Sec. 922(a)(1);
Felon in Possession of a Firearm in in violation of Title 18, U.S.C., Secs. 922(g)(1) and 924(a)(2)
Maximum Penalties: For firearms charges: 10 years’ in prison, and a 250,000 dollar fine.
DEFENDANTS Criminal Case No: 17CR0483-LAB
Name
Age
Hometown
Jose Alejandre-Ruvalcaba,
Aka “Scrappy”
42
Tijuana, MX
Kristina Lee Rozzo
43
Vista, CA
SUMMARY OF CHARGES
Conspiracy to Import Methamphetamine in violation of Title 21, U.S.C., Secs. 952, 960 and 963.
Maximum Penalties: Life in prison with a mandatory minimum sentence of 10 years and a 10 million dollar fine.
DEFENDANTS Criminal Case No: 17CR0484-LAB
Name
Age
Hometown
Ivan Bazan
Aka “Dreamer”
32
Vista, CA
Brhandon Puga
20
Chula Vista, CA
Matthew Ortiz
35
Chula Vista, CA
Cheytan Siva,
Aka “Hawk”
36
Vista, CA
Luis Gonzalez,
Aka “Knockout”
32
Vista, CA
James Mathes
32
Oceanside, CA
Eva Corona
33
Carlsbad, CA
Randy Moraleja
35
Escondido, CA
Brett Mooney
37
Oceanside, CA
SUMMARY OF CHARGES
Conspiracy to Distribute Methamphetamine in violation of Title 21, U.S.C., Secs. 841(a)(1) and 846;
Possession of Methamphetamine with Intent to Distribute in violation of Title 21, U.S.C., Sec. 841(a)(1);
Felon in Possession of a Firearm in in violation of Title 18, U.S.C., Secs. 922(g)(1) and 924(a)(2).
Maximum Penalties: For drug charges: life in prison with a mandatory minimum sentence of 10 years and a $10 million dollar. For firearms charges: 10 years’ in prison, and a 250,000 dollar fine.
DEFENDANTS Criminal Case No: 17CR0485-LAB
Name
Age
Hometown
Jorge Enrique Jara Cervantes
Aka “Scorpion”
28
Vista, CA
Jaime Orozco
30
Vista, CA
Gabriele Solis
26
Vista, CA
Alex Camou
27
Vista, CA
Morgan Peterson
25
Carlsbad, CA
Keith Collins
Aka “Lurch
32
Oceanside, CA
SUMMARY OF CHARGES
Conspiracy to Distribute Methamphetamine in violation of Title 21, U.S.C., Secs. 841(a)(1) and 846;
Possession of Methamphetamine with Intent to Distribute in violation of Title 21, U.S.C., Sec. 841(a)(1);
Felon in Possession of a Firearm in in violation of Title 18, U.S.C., Secs. 922(g)(1) and 924(a)(2).
Maximum Penalties: For drug charges: life in prison with a mandatory minimum sentence of 10 years and a 10 million dollar fine. For firearms charges: 10 years’ in prison, and a 250,000 dollar fine.
DEFENDANTS Criminal Case No: 17CR0487-LAB
Name
Age
Hometown
Sabrina Yzaguirre
28
Vista, CA
Roberto Recendez,
Aka “Grandpa”
54
Vista, CA
Eduardo Oretga,
Aka “Lalo”
25
Oceanside, CA
Antonio Becerra,
Aka “Thief”
30
Vista, CA
Kimberly Arenas
41
Escondido, CA
Manuel Guerena
37
Escondido, CA
Marco Vasquez
Aka “No-No”
24
Vista, CA
Johnny Molina-Bailon
34
Vista, CA
Santiago Rios,
Aka “Jimmy”
35
Vista, CA
Alex Camou
27
Vista, CA
SUMMARY OF CHARGES
Conspiracy to Distribute Methamphetamine in violation of Title 21, U.S.C., Secs. 841(a)(1) and 846;
Distribution of Methamphetamine, in violation of Title 21, U.S.C., Sec. 841(a)(1);
Felon in Possession of a Firearm in in violation of Title 18, U.S.C., Secs. 922(g)(1) and 924(a)(2).
Maximum Penalties: For drug charges: life in prison with a mandatory minimum sentence of 10 years and a $10 million fine. For firearms charges: 10 years in prison, and a 250,000 dollar fine.
DEFENDANT Criminal Case No: 17MJ0467-NLS
Name
Age
Hometown
Linda Cowan
46
Oceanside, CA
SUMMARY OF CHARGES
Possession of Methamphetamine with Intent to Distribute in violation of Title 21, U.S.C., Sec. 841(a)(1);
Felon in Possession of a Firearm in in violation of Title 18, U.S.C., Secs. 922(g)(1) and 924(a)(2)
Maximum Penalties: For drug charges: life in prison with a mandatory minimum sentence of 10 years and a $10 million fine. For firearms charges: 10 years in prison, and a 250,000 dollar fine.
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
AGENCIES
North County Regional Gang Task Force, which includes the Federal Bureau of Investigation, San Diego County Sheriff's Office, Oceanside Police Department, Bureau of Alcohol, Tobacco, Firearms and Explosives, the California Department of Corrections and Rehabilitation, Bureau of Prisons, Homeland Security Investigations, U.S. Marshals Service, California Highway Patrol, and the Escondido and Carlsbad Police Departments, San Diego County District Attorney’s Office
Fifty-Five Defendants Charged in Massive Crackdown on California Heroin, Methamphetamine and Firearms TraffickersRead the Press Release
Ten federal indictments unsealed today charge 55 defendants with crimes ranging from money laundering to heroin, methamphetamine and firearms trafficking in what officials have described as one of the most significant crackdowns in recent memory.
The defendants, including prominent drug dealers and documented gang members, were responsible for supplying a substantial portion of the heroin and methamphetamine distributed in North County, California.
Early this morning, more than 150 members of the North County Regional Gang Task Force plus other law enforcement agencies made numerous arrests and during the course of the investigation searched more than 20 locations in Oceanside, Vista and elsewhere in North County in California as well as Kingman, Arizona.
As of today at noon, 46 of the 55 defendants are either in federal or state custody. Fourteen were arrested this morning; the rest were arrested earlier in the week or were already in custody. Authorities are continuing to search for seven defendants; two are in Mexico. Many of the defendants are scheduled to be arraigned before U.S. Magistrate Judge Karen S. Crawford at 2:00 p.m. today and tomorrow.
The yearlong investigation was led by the North County Regional Gang Task Force. It involved months of federal wiretaps, dozens of undercover drug and gun buys and extensive surveillance. Many of the defendants are documented members or associates of violent North County street gangs, including the Vista Home Boys, Varrio Fallbrook Locos, Varrio Carlsbad Locos, Encinitas Tortilla Flats, Varrio San Marcos and Escondido Viejo Diablos.
According to charging documents, the defendants were involved in a variety of crimes, including drug distribution, firearms trafficking, robberies, vehicle thefts, burglaries and assaults.
In total, authorities seized heroin, methamphetamine and 25 firearms, including handguns, revolvers and assault rifles. These drugs and guns were being stored and sold in our North County neighborhoods, including across the street from Vista High School.
The charging documents describe a trafficking organization allegedly led by a Mexico-based woman who used dozens of street gang members to distribute heroin. Defendant Yadira “Pini” Villalvazo attended Vista High School and was an associate of Vista Home Boys street gang before she was deported following a federal drug trafficking conviction in 2002. According to charging documents, Villalvazo is now running her own Sinaloa Cartel-linked organization from Tijuana. Her specialty is still heroin.
According to court records, this drug trafficking organization supplied at least 25 percent of the heroin sold and consumed in North County and grossed tens of thousands of dollars in proceeds that were sent back to Mexico. The Villalvazo network distributed heroin in North County and also supplied pound quantities of heroin to a prolific distribution ring in Kingman.
During this investigation, the gang task force also targeted major methamphetamine distribution cells connected to North County street gangs, including rings allegedly led by Sabrina Yzaguirre, Ivan Bazan, aka “Dreamer” and Jorge Enrique Jara Cervantes, aka “Scorpion.” In addition, the ring allegedly led by Jara shipped pound quantities of methamphetamine for distribution in Alabama and Tennessee.
Heroin deaths in San Diego County more than doubled in the last decade, from 40 in 2005 to 90 in 2015. And this is despite the use of naloxone, which first responders have used to save countless lives. In 2015 alone, paramedics used naloxone 1,340 times. Heroin treatment admissions have risen every year in San Diego County since 2011.
Meth-related deaths increased more than 80% between 2011 and 2015. And about half of adults arrested in 2015 tested positive for meth at the time of their arrest.
“Today we’ve taken out one of North County’s largest heroin suppliers,” said Acting U.S. Attorney Alana Robinson. “This crackdown is our most significant response to date to the heroin epidemic ravaging our communities. We anticipate seeing a huge impact now that these defendants are removed from our community, particularly in the North County cities of Oceanside, Vista, San Marcos and other areas plagued by gangs.”
“The Sheriff's Department is committed to working with our law enforcement partners to keep the influence of drugs and gangs away from our children and out of our community,” said County Sheriff Bill Gore of San Diego, California.
Special Agent in Charge Eric S. Birnbaum of the FBI stated, “This investigation demonstrates the complex, international and multi-faceted nature of the gang threat in North County where heroin, methamphetamine and firearms related crimes threaten our communities. The FBI will continue to work tirelessly alongside our law enforcement partners at the North County Regional Gang Task Force to restore these neighborhoods to the good citizens who live in them.”
Acting U.S. Attorney Robinson praised the task force for the coordinated team effort in the culmination of this investigation. Agents and officers from the FBI, San Diego County Sheriff's Office, Oceanside Police Department, Bureau of Alcohol, Tobacco, Firearms and Explosives, the California Department of Corrections and Rehabilitation, Bureau of Prisons and Homeland Security Investigations. U.S. Marshals Service, California Highway Patrol and the Escondido and Carlsbad Police Departments collaborated on this investigation. Attorneys from the Department of Justice, Office of Enforcement Operations, Electronic Surveillance Unit, also provided critical assistance to the investigation.
This case is also the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF) a partnership that brings together the combined expertise and unique abilities of federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, dismantle and prosecute high level members of drug trafficking, weapons trafficking and money laundering organizations and enterprises.
The U.S. is represented in court by Assistant U.S. Attorneys Matthew J. Sutton, Kyle B. Martin, Carol Lee and Michael J. Heyman.
Operation No Worries Defendant Information
DEFENDANTS Criminal Case No: 17CR0336-LAB
Name
Age
Hometown
Yadira Esmeralda Villalvazo,
aka “Pini”
38
Tijuana, MX
Andrea Ball
37
Vista, CA
Cristina Gomez
30
Vista, CA
Joel Villalvazo
25
Vista, CA
Joshua O’Brien
35
Fallbrook, CA
David Dominguez,
aka “Bandit”
36
Vista, CA
Tina Dominguez
35
Vista, CA
Fidel Jimenez
36
Oceanside, CA
Naomi Jimenez,
aka “Huera”
42
Vista, CA
Salvador Mendez
46
Fallbrook, CA
David Siladji
37
Vista, CA
Angel Serrato
55
Vista, CA
Alexander Mendoza
29
Carlsbad, CA
Rene Ramos
45
Kingman, AZ
Maria Sanchez
41
Kingman, AZ
Edivan Patino
27
Vista, CA
Richard Seffens
39
Poway, CA
SUMMARY OF CHARGES
Conspiracy to Distribute Heroin, in violation of Title 21, U.S.C., Secs. 841(a)(1) and 846;
Conspiracy to Import Heroin, in violation of Title 21, U.S.C., Secs. 952, 960, and 963;
Conspiracy to Launder Monetary Instruments, in violation of Title 18, U.S.C., Secs. 1956(a)(2)(B)(i) and (h);
Possession of Methamphetamine with Intent to Distribute in violation of Title 21, U.S.C., Sec. 841(a)(1);
Possession of Heroin with Intent to Distribute in violation of Title 21, U.S.C., Sec. 841(a)(1);
Maximum Penalties: For the drug charges, life in prison with a mandatory minimum sentence of 10 years and a $10 million fine. For the money laundering charges, 20 years in prison and a fine of $500,000 or twice the value of the monetary instrument or funds involved.
DEFENDANTS Criminal Case No: 17CR0337-LAB
Name
Age
Hometown
Andrea Ball
37
Vista, CA
Travis Hensley
36
Fallbrook, CA
Aaron McCune
36
San Marcos, CA
Vanessa Rojas
44
Vista, CA
Edward Araiza
42
Oceanside, CA
SUMMARY OF CHARGES
Conspiracy to Distribute Heroin in violation of Title 21, U.S.C., Secs. 841(a)(1) and 846;
Possession of Methamphetamine with Intent to Distribute in violation of Title 21, U.S.C., Sec. 841(a)(1);
Felon in Possession of a Firearm in in violation of Title 18, U.S.C., Secs. 922(g)(1) and 924(a)(2)
Maximum Penalties: For drug charges: life in prison with a mandatory minimum sentence of 10 years and a 10 million dollar fine. For firearms charges: 10 years’ in prison, and a 250,000 dollar fine.
DEFENDANTS Criminal Case No: 17CR0338-LAB
Name
Age
Hometown
Javier Castrellon,
Aka “Javi”
53
San Marcos, CA
Manuel Espinoza,
Aka “Manny
48
Encinitas, CA
James Caruthers
54
Oceanside, CA
SUMMARY OF CHARGES
Conspiracy to Distribute Methamphetamine in violation of Title 21, U.S.C., Secs. 841(a)(1) and 846;
Distribution of Methamphetamine, in violation of Title 21, U.S.C., Sec. 841(a)(1)
Maximum Penalties: Life in prison with a mandatory minimum sentence of 10 years and a $10 million fine.
DEFENDANT Criminal Case No: 17CR0339-LAB
Name
Age
Hometown
Pedro Bret Cueva,
Aka “Largo
26
San Marcos, CA
SUMMARY OF CHARGES
Distribution of Methamphetamine, in violation of Title 21, U.S.C., Sec. 841(a)(1)
Maximum Penalties: Life in prison with a mandatory minimum sentence of 10 years and a 10 million dollar fine.
DEFENDANT Criminal Case No: 17CR0340-LAB
Name
Age
Hometown
Julio Cesar Valverde,
Aka “Night Owl”
28
San Marcos, CA
SUMMARY OF CHARGES
Distribution of Methamphetamine, in violation of Title 21, U.S.C., Sec. 841(a)(1)
Maximum Penalties: Life in prison with a mandatory minimum sentence of 10 years and a 10 million dollar fine.
DEFENDANT Criminal Case No: 17CR0482-JAH
Name
Age
Hometown
Noe Rene Lugo
Aka “No-No,” “Wolfie”
33
Vista, CA
SUMMARY OF CHARGES
Dealing in Firearms Without a License in violation of Title 18, U.S.C., Sec. 922(a)(1);
Felon in Possession of a Firearm in in violation of Title 18, U.S.C., Secs. 922(g)(1) and 924(a)(2)
Maximum Penalties: For firearms charges: 10 years’ in prison, and a 250,000 dollar fine.
DEFENDANTS Criminal Case No: 17CR0483-LAB
Name
Age
Hometown
Jose Alejandre-Ruvalcaba,
Aka “Scrappy”
42
Tijuana, MX
Kristina Lee Rozzo
43
Vista, CA
SUMMARY OF CHARGES
Conspiracy to Import Methamphetamine in violation of Title 21, U.S.C., Secs. 952, 960 and 963.
Maximum Penalties: Life in prison with a mandatory minimum sentence of 10 years and a 10 million dollar fine.
DEFENDANTS Criminal Case No: 17CR0484-LAB
Name
Age
Hometown
Ivan Bazan
Aka “Dreamer”
32
Vista, CA
Brhandon Puga
20
Chula Vista, CA
Matthew Ortiz
35
Chula Vista, CA
Cheytan Siva,
Aka “Hawk”
36
Vista, CA
Luis Gonzalez,
Aka “Knockout”
32
Vista, CA
James Mathes
32
Oceanside, CA
Eva Corona
33
Carlsbad, CA
Randy Moraleja
35
Escondido, CA
Brett Mooney
37
Oceanside, CA
SUMMARY OF CHARGES
Conspiracy to Distribute Methamphetamine in violation of Title 21, U.S.C., Secs. 841(a)(1) and 846;
Possession of Methamphetamine with Intent to Distribute in violation of Title 21, U.S.C., Sec. 841(a)(1);
Felon in Possession of a Firearm in in violation of Title 18, U.S.C., Secs. 922(g)(1) and 924(a)(2).
Maximum Penalties: For drug charges: life in prison with a mandatory minimum sentence of 10 years and a $10 million dollar. For firearms charges: 10 years’ in prison, and a 250,000 dollar fine.
DEFENDANTS Criminal Case No: 17CR0485-LAB
Name
Age
Hometown
Jorge Enrique Jara Cervantes
Aka “Scorpion”
28
Vista, CA
Jaime Orozco
30
Vista, CA
Gabriele Solis
26
Vista, CA
Alex Camou
27
Vista, CA
Morgan Peterson
25
Carlsbad, CA
Keith Collins
Aka “Lurch
32
Oceanside, CA
SUMMARY OF CHARGES
Conspiracy to Distribute Methamphetamine in violation of Title 21, U.S.C., Secs. 841(a)(1) and 846;
Possession of Methamphetamine with Intent to Distribute in violation of Title 21, U.S.C., Sec. 841(a)(1);
Felon in Possession of a Firearm in in violation of Title 18, U.S.C., Secs. 922(g)(1) and 924(a)(2).
Maximum Penalties: For drug charges: life in prison with a mandatory minimum sentence of 10 years and a 10 million dollar fine. For firearms charges: 10 years’ in prison, and a 250,000 dollar fine.
DEFENDANTS Criminal Case No: 17CR0487-LAB
Name
Age
Hometown
Sabrina Yzaguirre
28
Vista, CA
Roberto Recendez,
Aka “Grandpa”
54
Vista, CA
Eduardo Oretga,
Aka “Lalo”
25
Oceanside, CA
Antonio Becerra,
Aka “Thief”
30
Vista, CA
Kimberly Arenas
41
Escondido, CA
Manuel Guerena
37
Escondido, CA
Marco Vasquez
Aka “No-No”
24
Vista, CA
Johnny Molina-Bailon
34
Vista, CA
Santiago Rios,
Aka “Jimmy”
35
Vista, CA
Alex Camou
27
Vista, CA
SUMMARY OF CHARGES
Conspiracy to Distribute Methamphetamine in violation of Title 21, U.S.C., Secs. 841(a)(1) and 846;
Distribution of Methamphetamine, in violation of Title 21, U.S.C., Sec. 841(a)(1);
Felon in Possession of a Firearm in in violation of Title 18, U.S.C., Secs. 922(g)(1) and 924(a)(2).
Maximum Penalties: For drug charges: life in prison with a mandatory minimum sentence of 10 years and a $10 million fine. For firearms charges: 10 years in prison, and a 250,000 dollar fine.
DEFENDANT Criminal Case No: 17MJ0467-NLS
Name
Age
Hometown
Linda Cowan
46
Oceanside, CA
SUMMARY OF CHARGES
Possession of Methamphetamine with Intent to Distribute in violation of Title 21, U.S.C., Sec. 841(a)(1);
Felon in Possession of a Firearm in in violation of Title 18, U.S.C., Secs. 922(g)(1) and 924(a)(2)
Maximum Penalties: For drug charges: life in prison with a mandatory minimum sentence of 10 years and a $10 million fine. For firearms charges: 10 years in prison, and a 250,000 dollar fine.
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
AGENCIES
North County Regional Gang Task Force, which includes the FBI, San Diego County Sheriff's Office, Oceanside Police Department, Bureau of Alcohol, Tobacco, Firearms and Explosives, the California Department of Corrections and Rehabilitation, Bureau of Prisons, Homeland Security Investigations, U.S. Marshals Service, California Highway Patrol, and the Escondido and Carlsbad Police Departments, San Diego County District Attorney’s Office.