Southern District of California
Press releases recorded for this federal judicial district.
First Co-Defendant in Multi-Million Dollar Real Estate Deed Theft Scheme Sentenced to PrisonRead the Press Release
Assistant U.S. Attorney Emily W. Allen (619) 546-9738
NEWS RELEASE SUMMARY – October 24, 2016
SAN DIEGO – Daniel Deaibes was sentenced today to 24 months for his role in a scheme to steal title to Southern California homes and then “sell” the properties to unsuspecting buyers – before the buyers realized who the true owners were.
From September 2012 through their arrest in November 2014, Deaibes and his co-conspirators, including co-defendants Mazen Alzoubi and Mohamed Daoud, fraudulently sold or attempted to sell at least 15 homes worth more than $3.6 million that actually never belonged to them. On at least 10 occasions, they were successful—earning illicit proceeds of nearly $2.2 million.
Deaibes pleaded guilty in March 2015 to participating in the fraud and was sentenced today by U.S. District Judge Cynthia Bashant. As part of this plea, Deaibes admitted that he used aliases to deceive escrow and title officers into believing that he was “John Moran,” and that he was the true owner of property that was being marketed for sale. In fact, “John Moran” did not exist, and Deaibes and his co-conspirators planned to fraudulently sell the properties, divert the proceeds to their own bank accounts, and then quickly disburse the money overseas. On at least three occasions, Deaibes, posing as “Moran” and presenting a fake driver’s license, appeared before notaries to sign title documents and property deeds.
To make it appear that they owned these properties, the co-conspirators generated forged deeds that made it appear the true property owner had sold his or her home to a sham real estate “investment” business the co-conspirators controlled. They forged the true owners’ signatures on the deeds, and used forged notary stamps to make them appear legitimate. In reality, though, the true owners were entirely unaware of the pretend sales. Once the fraudulent documents were recorded in the chain of title, Alzoubi (using aliases and stolen identities) listed the properties for sale, posing to buyers, escrow companies, and title officers as the new owner. In this way, the co-conspirators collected all the proceeds of the sale, and the true owners were left with nothing.
Alzoubi, the ringleader of the fraudulent scheme, assumed multiple fake identities to keep the scheme going. He also posed as real people, pretending on one occasion that he was an attorney for one of the true owners. (Unbeknownst to Alzoubi at the time, he was talking to an undercover federal agent.) As a result of his greater role in the scheme, Alzoubi was charged with, and in January 2016 pleaded guilty to, aggravated identity theft, which carries a mandatory sentence of two years in prison in addition to his sentence for the fraud and money laundering. His sentencing is scheduled for November 7, 2016, at 9:00 am, before Judge Bashant.
Mohamed Daoud also pleaded guilty, in July 2015, admitting that he helped Alzoubi launder the proceeds of the scheme. They used Daoud’s company, “Norway LLC,” to pretend to acquire title to some of the properties. Daoud received approximately $270,000 in proceeds. In December 2015, before he was sentenced, Daoud fled the country and is now a fugitive.
Most of the properties the co-conspirators “sold” were post-foreclosure properties owned by banks or institutions such as Fannie Mae and Freddie Mac. Fannie Mae and Freddie Mac are government-sponsored enterprises with a mission to provide liquidity, stability, and affordability to the United States housing and mortgage markets. As part of this mission, Fannie Mae and Freddie Mac purchase residential mortgages in the secondary market, enabling lenders to replenish their funds to finance additional single family loans. Fannie Mae and Freddie Mac can become the property owners if they own the mortgage loan at the time a home is foreclosed.
“Schemes like this one undermine the public’s confidence in their most personal and important investment, their homes,” said U.S. Attorney Laura Duffy. “I am committed to prosecuting people who continue to prey on the victims of the devastating mortgage meltdown, and sending those criminals to prison.”
“This scheme was designed to literally rip home ownership right out of the hands of innocent victims, and for those victims the costs were far greater than a title to a house,” said Leslie P. DeMarco, Special Agent in Charge, Western Region. “This scheme is callous and the perpetrators deserve the punishment set out for them. FHFA-OIG remains committed to our relentless pursuit of individuals who try to profit from the aftermath of the housing crisis.”
“Fraud targeting a family’s home, the heart of a family’s financial investment, has a ripple effect through our nation’s economy,” said FBI Special Agent in Charge Eric S. Birnbaum. “The FBI is committed to investigate and uncover schemes by those who defraud homeowners.”
In addition to his jail sentence, Deaibes was ordered to pay $1,819,591 in restitution to the victims of the fraud.
DEFENDANT:
Daniel Deaibes, 14CR3325-BAS Age: 38 Rancho Cucamonga, CA
COUNT ONE: Mail fraud, in violation of 18 U.S.C. § 1341
Maximum Penalties: 20 years’ imprisonment, $250,000 fine or twice the pecuniary gain or loss resulting from the offense, $100 special assessment, restitution.
CO-DEFENDANTS:
Mazen Alzoubi, 14CR3325-BAS Age: 33 Rancho Cucamonga, CA
COUNT ONE: Conspiracy to commit mail fraud and wire fraud, in violation of 18 U.S.C. § 1349.
Maximum Penalties: 20 years’ imprisonment, $250,000 fine or twice the pecuniary gain or loss resulting from the offense, $100 special assessment, restitution, and forfeiture.
COUNT TWO: Mail fraud, in violation of 18 U.S.C. § 1341.
Maximum Penalties: 20 years’ imprisonment, $250,000 fine or twice the pecuniary gain or loss resulting from the offense, $100 special assessment, restitution.
COUNTS THREE AND FOUR: Aggravated identity theft, in violation of 18 U.S.C. § 1028A.
Maximum Penalties: mandatory 2 years’ imprisonment, consecutive to any other term of imprisonment, $250,000 fine, $100 special assessment, restitution.
COUNT FIVE: Conspiracy to launder money, in violation of 18 U.S.C. § 1956(h).
Maximum Penalties: 20 years’ imprisonment, $500,000 fine or twice the value of the property involved in the transaction, $100 special assessment, restitution, and forfeiture.
Mohamed Daoud, 14CR3326-BAS Age: 53 Norway
COUNT ONE: Conspiracy to launder money, in violation of 18 U.S.C. § 1956(h)
Maximum Penalties: 20 years’ imprisonment, $500,000 fine or twice the value of the property involved in the transaction, $100 special assessment, restitution, and forfeiture.
AGENCIES
Federal Housing Finance Agency – Office of Inspector General
Federal Bureau of Investigation
Former NCIS Supervisory Special Agent Sentenced to 12 Years in Prison for Taking Bribes from Foreign Defense Contractor in Massive Fraud and Corruption ScandalRead the Press Release
Assistant U. S. Attorneys Mark W. Pletcher (619) 546-9714 or Patrick Hovakimian (619) 546-9718
NEWS RELEASE SUMMARY – October 14, 2016
SAN DIEGO – Former Naval Criminal Investigative Service supervisory special agent John Beliveau II was sentenced in federal court today to 12 years in prison for disclosing sensitive law enforcement reports to a foreign defense contractor who was the target of a criminal fraud investigation in exchange for cash, luxury travel and the services of prostitutes.
Beliveau, 47, of York, Pennsylvania, was sentenced by U.S. District Judge Janis L. Sammartino, who also ordered Beliveau to pay $20 million in restitution to the Navy. Beliveau pleaded guilty on December 17, of 2013 to conspiracy to commit bribery and bribery. Beliveau was immediately taken into custody at his own request.
According to admissions made in his plea agreement, Beliveau helped former Glenn Defense Marine Asia (GDMA) CEO Leonard Glenn Francis perpetrate a massive fraud scheme on the U.S. Navy by providing information that allowed Francis to evade and thwart criminal investigations into misconduct by GDMA.
During the sentencing hearing, Judge Sammartino said Beliveau’s position of trust as a law enforcement agent, plus the immeasurable impact of his betrayal on NCIS and the Navy, warranted a strong sentence. “A great deal of harm occurred as a result of your conduct,” she told the defendant.
“John Beliveau’s reprehensible decision to provide sensitive information to the targets of ongoing fraud investigations in exchange for bribes tragically tarnished his badge and the reputation of NCIS,” said Andrew Traver, director of the Naval Criminal Investigative Service (NCIS). “It is impossible to quantify the extent or duration of the harm done by Beliveau, but holding him accountable will further signal that NCIS is committed to rebuilding the trust he damaged.”
“John Beliveau’s deceit was a devastating blow to the U.S. Navy and ultimately the nation that he was sworn to protect,” said U.S. Attorney Laura Duffy. “While this disgraced agent serves what may be the longest prison sentence ever handed down to a federal agent in a corruption case, his colleagues are left to rebuild the trust and credibility that he singlehandedly destroyed.”
“Beliveau tarnished his NCIS badge and sold sensitive law enforcement information for envelopes of cash, luxury travel and tawdry entertainment,” said Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division. “His actions risked an important criminal investigation and the safety of witnesses who agreed to cooperate with law enforcement under the belief that their identities would be protected. Today’s sentence reflects the gravity of those crimes [if multiple counts] and makes clear that we will not tolerate law enforcement corruption.”
“Today’s sentencing sends a resounding message that justice will be served regardless of rank or position." Said Dermot O’Reilly, director of the Department of Defense’s Defense Criminal Investigative Service. “The conduct of former NCIS Supervisory Special Agent Beliveau is reprehensible. The foundation of our criminal justice system relies on the public's trust in the law enforcement community. Whenever a law enforcement member breaches that trust, it leaves an indelible stain on those who serve to enforce our nation’s laws. The Defense Criminal Investigative Service and its law enforcement partners will relentlessly pursue any individual who places at risk the safety and security of our armed forces personnel.”
“We are proud to be part of the team that has been investigating the criminal allegations in the Glenn Defense Marine Asia case. It is especially troubling that someone in his role is on the wrong side of the investigation,” said Anita Bales, Director, Defense Contract Audit Agency.
According to his plea agreement, Beliveau acknowledged that he regularly searched confidential NCIS databases for reports of investigations related to Francis and GDMA. Over the course of years, he helped Francis avoid multiple criminal investigations by providing copies of these reports. These reports not only tipped off Francis that he was the target of a criminal investigation, but provided sensitive law enforcement information about the ongoing investigation, including the identities of the subjects of the investigations; information about witnesses, including identifying information about cooperating witnesses and their testimony; the particular aspects of GDMA’s billings that were of concern to the investigations; the fact that the investigations had obtained numerous email accounts and the identities of those accounts; the reports to prosecutors and their interactions with the investigations; and planned future investigative activities.
Beliveau regularly demanded money and prostitutes from Francis. “I will always be your friend, but you will get nothing else…until I get what you promise,” he said in an email to Francis in April 2012. “You give whores more money than you give me…I can be your best friend or your worst enemy. I am not an amateur.”
Beliveau admitted that he attempted to cover up his involvement by asking Francis to delete incriminating emails and deactivate an email account, and warned Francis about indictments and a warrant on his email account.
Beliveau also admitted that he counseled Francis on how to perpetuate his fraud scheme and evade detection. In July 2011, Beliveau advised Francis to respond to the pending NCIS investigation into GDMA’s submission of a fraudulent claim to the U.S. Navy for dockage and wharfage fees for certain U.S. Navy ship visits to Thailand.
In return for providing him with information, Francis provided Beliveau with envelopes containing cash, luxury travel from Virginia to Singapore, the Philippines and Thailand. On many occasions, beginning in 2008 and continuing through 2012, while Beliveau was posted in Singapore, Francis provided him with prostitutes, lavish dinners, entertainment and alcohol at high-end nightclubs. The tab for each of these outings routinely ran into the thousands of dollars.
So far, a total of 16 individuals have been charged in connection with the GDMA corruption and fraud investigation. Including Beliveau, 11 of those are current or former U.S. Navy officials, including Admiral Robert Gilbeau, Captain (ret.) Michael Brooks, Lt. Commander Gentry Debord, Commander Bobby Pitts, Captain Daniel Dusek, Commander Michael Misiewicz, Lt. Commander Todd Malaki, Commander Jose Luis Sanchez, 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, Debord, Dusek, Misiewicz, Malaki, Beliveau, Sanchez, Layug 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. Gilbeau, Sanchez and Simpkins also await sentencing. Brooks and Pitts were charged in May 2016 and their cases are pending.
Also charged are five GDMA executives: Francis, Alex Wisidagama, Ed Aruffo, Neil Peterson and Linda Raja. Wisidagama has pleaded guilty and was sentenced on March 18, 2016, to 63 months in prison and $34.8 million in restitution to the Navy. Francis and Aruffo have pleaded guilty and await sentencing; Peterson’s and Raja’s cases are pending.
DCIS, NCIS and the Defense Contract Audit Agency are investigating. Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California 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: 13cr3781
John Bertrand Beliveau II 44 Woodbridge, Virginia
SUMMARY OF CHARGES
Conspiracy to Commit Bribery in violation of 18 U.S.C. § 371
Maximum of 5 years in prison; a maximum $250,000 fine, or twice the gross gain or loss from the offense, whichever is greater
Bribery in violation of 18 U.S.C. § 201
Maximum of 15 years in prison; a maximum fine of $250,000, twice the gross gain or loss from the offense, or three times the monetary equivalent of the thing of value, whichever is greater.
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
Homeland Security Investigations
Defense Contract Audit Agency
Former NCIS Supervisory Special Agent Sentenced to 12 Years in Prison for Taking Bribes from Defense Contractor in Massive Fraud and Corruption ScandalRead the Press Release
A former Naval Criminal Investigative Service (NCIS) supervisory special agent was sentenced in federal court today to 144 months in prison for disclosing sensitive law enforcement reports to a defense contractor who was the target of a criminal fraud investigation in exchange for cash, luxury travel and the services of prostitutes.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Laura E. Duffy of the Southern District of California, Director Andrew Traver of the Naval Criminal Investigative Service (NCIS), Director Dermot O’Reilly of the Department of Defense’s (DoD) Defense Criminal Investigative Service (DCIS) and Director Anita Bales of the Defense Contract Audit Agency made the announcement.
John Bertrand Beliveau II, 47, of York, Pennsylvania, was sentenced by U.S. District Judge Janis L. Sammartino of the Southern District of California, who also ordered Beliveau to pay $20 million in restitution to the Navy. According to admissions made as part of his plea agreement, Beliveau helped former Glenn Defense Marine Asia (GDMA) CEO Leonard Francis perpetrate a massive fraud scheme on the U.S. Navy by providing information that allowed Francis to avoid, stall and thwart criminal investigations into misconduct by GDMA.
“Beliveau tarnished his NCIS badge and sold sensitive law enforcement information for envelopes of cash, luxury travel and tawdry entertainment,” said Assistant Attorney General Caldwell. “His actions risked an important criminal investigation and the safety of witnesses who agreed to cooperate with law enforcement under the belief that their identities would be protected. Today’s sentence reflects the gravity of those crimes and makes clear that we will not tolerate law enforcement corruption.”
“John Beliveau’s deceit was a devastating blow to the U.S. Navy and ultimately the nation that he was sworn to protect,” said U.S. Attorney Duffy. “While this disgraced agent serves what may be the longest prison sentence ever handed down to a federal agent in a corruption case, his colleagues are left to rebuild the trust and credibility that he singlehandedly destroyed.”
“John Beliveau’s reprehensible decision to provide sensitive information to the targets of ongoing fraud investigations in exchange for bribes tragically tarnished his badge and the reputation of NCIS,” said Director Traver. “It is impossible to quantify the extent or duration of the harm done by Beliveau, but holding him accountable will further signal that NCIS is committed to rebuilding the trust he damaged.”
“Today’s sentencing sends a resounding message that justice will be served regardless of rank or position." said Director O’Reilly. “The conduct of former NCIS Supervisory Special Agent Beliveau is reprehensible. The foundation of our criminal justice system relies on the public’s trust in the law enforcement community. Whenever a law enforcement member breaches that trust, it leaves an indelible stain on those who serve to enforce our nation’s laws. The Defense Criminal Investigative Service and its law enforcement partners will relentlessly pursue any individual who places at risk the safety and security of our armed forces personnel.”
“We are proud to be part of the team that has been investigating the criminal allegations in the Glenn Defense Marine Asia case,” said Director Bales. “It is especially troubling that someone in his role is on the wrong side of the investigation.”
According to his plea agreement, Beliveau acknowledged that he regularly searched confidential NCIS databases for reports of investigations related to Francis and GDMA. Over the course of years, he helped Francis avoid multiple criminal investigations by providing copies of these reports. These reports not only tipped off Francis that he was the target of a criminal investigation, but provided sensitive law enforcement information about the ongoing investigation, including the identities of the subjects of the investigations; information about witnesses, including identifying information about cooperating witnesses and their testimony; the particular aspects of GDMA’s billings that were of concern to the investigations; the fact that the investigations had obtained numerous email accounts and the identities of those accounts; the reports to prosecutors and their interactions with the investigations; and planned future investigative activities.
Beliveau admitted that he attempted to cover up his involvement by asking Francis to delete incriminating emails and deactivate an email account, and warned Francis about indictments and a warrant on his email account.
Beliveau also admitted that he counseled Francis on how to perpetuate his fraud scheme and evade detection. In July 2011, Beliveau advised Francis to respond to the pending NCIS investigation into GDMA’s submission of a fraudulent claim to the U.S. Navy for dockage and wharfage fees for certain U.S. Navy ship visits to Thailand.
In return for providing him with information, Francis provided Beliveau with envelopes containing cash, luxury travel from Virginia to Singapore, the Philippines and Thailand. On many occasions, beginning in 2008 and continuing through 2012, while Beliveau was posted in Singapore, Francis provided him with prostitutes, lavish dinners, entertainment and alcohol at high-end nightclubs. The tab for each of these outings routinely ran into the thousands of dollars.
So far, a total of 16 individuals have been charged in connection with the GDMA corruption and fraud investigation. Including Beliveau, 11 of those are current or former U.S. Navy officials, including Admiral Robert Gilbeau, Captain (ret.) Michael Brooks, Lt. Commander Gentry Debord, Commander Bobby Pitts, Captain Daniel Dusek, Commander Michael Misiewicz, Lt. Commander Todd Malaki, Commander Jose Luis Sanchez, Petty Officer First Class Daniel Layug and Paul Simpkins, a former DoD civilian employee who oversaw contracting in Singapore.
Gilbeau, Debord, Dusek, Misiewicz, Malaki, Beliveau, Sanchez, Layug 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. Gilbeau, Sanchez and Simpkins also await sentencing. Brooks and Pitts were charged in May 2016 and their cases are pending.
Also charged are five GDMA executives: Francis, Alex Wisidagama, Ed Aruffo, Neil Peterson and Linda Raja. Wisidagama has pleaded guilty and was sentenced on March 18, 2016, to 63 months in prison and $34.8 million in restitution to the Navy. Francis and Aruffo have pleaded guilty and await sentencing; Peterson’s and Raja’s cases are pending.
DCIS, NCIS and the Defense Contract Audit Agency are investigating. Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California 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 Lieutenant Commander Pleads Guilty in Expanding Bribery and Fraud InvestigationRead the Press Release
A U.S. Navy lieutenant commander pleaded guilty today to a bribery charge in federal court and admitted to accepting cash, luxury hotels and prostitutes from a foreign defense contractor in exchange for proprietary Navy information.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Laura E. Duffy of the Southern District of California, Director Dermot O’Reilly of the Department of Defense’s (DoD) Defense Criminal Investigative Service (DCIS) and Director Andrew Traver of the Naval Criminal Investigative Service (NCIS) made the announcement.
Gentry Debord, 41, who is based in Singapore, pleaded guilty before U.S. Magistrate Judge Bernard G. Skomal of the Southern District of California. He is scheduled to be sentenced on Jan. 13, 2017.
In pleading guilty, Debord, who served in several logistical and supply positions in the Western Pacific, admitted that he instructed Glenn Defense Marina Asia (GDMA) executives to inflate their invoices to the Navy to cover the cost of various illicit gifts provided to him. From November 2007 to January 2013, Debord provided former GDMA CEO Leonard Glenn Francis and others with internal and proprietary U.S. Navy information. This information included inside Navy information about competitors’ bids and information about an investigation into GDMA’s billing practices. Debord also admitted to misusing his position and influence in the Navy to advocate for and advance GDMA’s interests, including by approving inflated invoices for services never rendered that he directed Francis to submit.
According to admissions made in connection with his plea, as part of this conspiracy, Debord, Francis and others attempted to conceal the bribes given to Debord as well as the nature and extent of his relationship with Francis. This was done by, for example, using coded language in communications referring to prostitutes as “cheesecake” or “bodyguards.” Debord also requested that GDMA executives provide him with an apartment for a port visit.
In addition, Debord admitted to asking a GDMA executive to provide him with three hotel rooms, two cell phones, a van and 2,000 Singapore dollars. Debord instructed the executive to recover the value of these items by inflating the amount that GDMA would invoice the U.S. Navy for potable water and trash removal service for the U.S.S. Essex port visit to Singapore, which GDMA proceeded to do.
So far, a total of 16 individuals have been charged in connection with the GDMA corruption and fraud investigation. Of those, 11 are current or former U.S. Navy officials, including Debord, Admiral Robert Gilbeau, Captain (ret.) Michael Brooks, Commander Bobby Pitts, Captain Daniel Dusek, Commander Michael Misiewicz, Lt. Commander Todd Malaki, Commander Jose Luis Sanchez, 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, Dusek, Misiewicz, Malaki, Beliveau, Sanchez, Layug 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 is scheduled to be sentenced tomorrow; and Gilbeau, Sanchez and Simpkins also await sentencing. Brooks and Pitts were charged in May 2016 and their cases are pending.
Also charged are five GDMA executives: Francis, Alex Wisidagama, Ed Aruffo, Neil Peterson and Linda Raja. Wisidagama has pleaded guilty and was sentenced on March 18, 2016, to 63 months in prison and $34.8 million in restitution to the Navy. Francis and Aruffo have pleaded guilty and await sentencing; Peterson’s and Raja’s cases are pending. An indictment is merely an allegation and all defendants are presumed innocent unless and until they are found guilty beyond a reasonable doubt in a court of law.
DCIS, NCIS and the Defense Contract Audit Agency are investigating the case. 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.
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.
Another Navy Officer Pleads Guilty in Expanding 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 – October 13, 2016
SAN DIEGO – U.S. Navy Lieutenant Commander Gentry Debord pleaded guilty to a bribery charge in federal court today, admitting that he accepted cash, luxury hotels and prostitutes from foreign defense contractor Leonard Glenn Francis in exchange for proprietary Navy information that benefitted Francis’ company, Glenn Defense Marine Asia.
Debord was so happy to receive lavish gifts that GDMA executives described him as “over the moon” and joked that Debord swallowed their bribes, “hook, line and sinker,” according to instant messages quoted in the plea agreement.
Debord also admitted that he instructed GDMA executives to inflate their invoices to the Navy to cover the cost of various illicit gifts provided to him.
“This conduct is a disgrace to the U.S. Navy and an affront to U.S. taxpayers who were left to foot the bill for parties and prostitutes,” said U.S. Attorney Laura Duffy. “We are pressing forward in this investigation until we are certain that all involved have been held accountable.”
The guilty plea was entered before U.S. Magistrate Judge Bernard G. Skomal, who set sentencing for January 13, 2017 at 9 a.m. before U.S. District Judge Janis L. Sammartino.
According to his plea agreement, from November 2007 to January 2013, Debord provided Francis and others with internal, proprietary U.S. Navy information; directed Francis and GDMA to inflate invoices to reflect services not rendered; advocated for the U.S. Navy to procure items from GDMA under its husbanding contracts; and otherwise used his position and influence in the U.S. Navy to advocate for and advance GDMA’s interests, as opportunities arose.
As part of this conspiracy, Debord, Francis and others attempted to conceal the nature and extent of their relationship, by, among other things, using fictitious email accounts to communicate and using coded language and other means designed to obfuscate the true nature of their corrupt relationship, including referring to prostitutes as “cheesecakes” and “bodyguards.”
For example, on or about February 26, 2008, Debord emailed a GDMA executive to ask him to provide the services of prostitutes during the U.S.S. Essex’s upcoming port visit to Manila, Philippines: “[D]ouble checking to see if I will have my security for the 2nd and the 4th. I however do not want anyone to know I have a bodyguard.” The executive responded: “Bodyguards are standing by.”
About eight months later, around October 30, 2008, Debord emailed GDMA executives advising them that the U.S. Navy’s ship husbanding contract in the Philippines was “coming up for renew[al],” and asking that GDMA provide him with an apartment in conjunction with an upcoming port visit by the U.S.S. Essex to Hong Kong. Debord noted that he and another GDMA employee “had fun up [near Clark Air Force Base,] ate lots of cheesecake, even ate some in a group session.”
On or about February 22, 2010, Debord asked a GDMA executive to provide him with three hotel rooms, two cell phones, a van and $2,000 Singapore dollars and instructed the executive to recover the value of these items by inflating the amount that GDMA would invoice the U.S. Navy for potable water and trash removal service for the U.S.S. Essex port visit to Singapore from February 22-25, 2009.
Francis approved the payment to Debord, and as instructed by Debord, GDMA fraudulently inflated its invoice to the U.S. Navy to account for the things of value given to Debord.
So far, a total of 16 named individual defendants have been charged in connection with the GDMA corruption and fraud investigation. Of those, 11 are current or former U.S. Navy officials, including Debord, Admiral Robert Gilbeau, believed to be the first active-duty U.S. Navy flag officer charged in a federal criminal case; Captain (ret.) Michael Brooks; Commander Bobby Pitts; Captain Daniel Dusek; Commander Michael Misiewicz; Lt. Commander Todd Malaki; Commander Jose Luis Sanchez; 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.
Debord, Gilbeau, Dusek, Misiewicz, Malaki, Beliveau, Sanchez, Layug, 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 is scheduled to be sentenced tomorrow; Gilbeau, Sanchez, and Simpkins also await sentencing.
Brooks and Pitts were charged in May 2016 and their cases are pending.
Also charged are five GDMA executives – Francis, Alex Wisidagama, Ed Aruffo and Neil Peterson and Linda Raja. Three 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; Peterson’s and Raja’s cases are 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.
DEFENDANT Case Number: 16cr1457
Lieutenant Commander Gentry Debord Age 41 San Diego
SUMMARY OF CHARGES
Conspiracy to Commit Bribery, in violation of 18 U.S.C. § 371
Maximum Penalty: 5 years in prison, a $250,000 fine,
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
Defense Contract Audit Agency
CFO of San Diego Defense Contracting Firm Admits to Embezzling $825,000Read the Press Release
Assistant U.S. Attorney Emily W. Allen (619) 546-9738
NEWS RELEASE SUMMARY – October 4, 2016
SAN DIEGO – Stuart Teshima, the former Chief Financial Officer of a large San Diego-based Department of Defense contracting firm, pleaded guilty today to embezzling more than $825,000 from the company over the course of eight years. Teshima admitted that he stole the money while he was employed as Vice President, then Senior Vice President, and finally as the CFO of the victim company.
Teshima, who oversaw the company’s credit card program, admitted that he misused his corporate credit card to pay for personal expenses including airfare and other personal travel, jewelry, gifts for family members, furniture, lavish dinners, and even his personal income tax bill.
Before submitting invoices for reimbursement, Teshima would conceal the personal spending by altering his account statements to replace the personal items with fictitious business expenses. He falsely reported to company representatives that the statements he submitted were generated directly from his credit card account, when in fact he altered the records himself before submitting them for reimbursement.
Teshima admitted that he started the fraud in early 2008, and continued to charge thousands of dollars per month of personal expenses until he left his employment in August 2015. By then, he had racked up unauthorized personal charges of more than $825,000.
The victim company serves the U.S. Department of Defense and other government agencies to provide a wide variety of services including ship building and repair, nuclear operations support, and information technology. It has offices across the country and employs more than 1,000 people.
“Corporate insiders and officers owe a special duty of honesty to their employer and its owners. By misusing his senior executive positions for his own personal gain, former CFO Teshima inflicted serious harm on his employer, his fellow employees and defense contracting community. I am committed to ensuring that professionals who abuse the trust of their employers are held accountable, pay full restitution, and face stiff consequences for their misconduct,” said U.S. Attorney Laura E. Duffy.
“Mr. Teshima used his high ranking positions and violated the trust of his employer in order to feed his personal lifestyle,” said FBI Special Agent in Charge, Eric S. Birnbaum. “The FBI is committed to investigating those insiders who act on their greed and steal money from businesses in our community.”
This case was investigated by the San Diego Division of the Federal Bureau of Investigation. Teshima entered his plea before U.S. Magistrate Judge Louisa S. Porter. He is scheduled to be sentenced on December 19, 2016 at 9 a.m. before U.S. District Judge Anthony J. Battaglia.
As part of his plea, Teshima has agreed to pay restitution of $825,341.
DEFENDANT
Stuart Teshima, 16CR2223-AJB Age: 50 San Diego, CA
CHARGE
Wire Fraud, in violation of 18 U.S.C. § 1343
Maximum Penalties: 20 years’ imprisonment, $250,000 fine, $100 special assessment, restitution.
Seaworld Manager Sentenced to 30 Months in Prison for Stealing More Than $1 MillionRead the Press Release
Assistant U.S. Attorney Emily W. Allen (619) 546-9738
NEWS RELEASE SUMMARY – September 23, 2016
SAN DIEGO – Former SeaWorld San Diego manager Wilfred David Joseph Jobin-Reyes (known as “Sebastian Jobin”) was sentenced today to 30 months in custody for embezzling $818,000 from SeaWorld over more than eight years while he was employed there.
Jobin-Reyes created fake invoices for a sham company he secretly owned, called “SJ Merchandise.” He then used his management position to approve the payments on behalf of SeaWorld. He also created an alias along with a dummy email account he used to correspond with SeaWorld officials, pretending to be SJ Merchandise owner “John Caldwell.” In fact, Jobin-Reyes used his work computer to generate the fraudulent invoices, for disposable goods like “wildlife animal bookmarks,” “sea creature rings,” and “purple shiny ornaments” that were difficult to trace or verify in SeaWorld’s inventory. Over time, his invoices grew larger, so that by 2015 he was requesting fraudulent payments for amounts just under the $10,000 threshold that would have triggered further review by his bosses at SeaWorld. SeaWorld eventually discovered the fraud, but only after Jobin-Reyes had pocketed more than $800,000 in payments to his fake company.
Jobin-Reyes’ fraud did not stop with SeaWorld. He also used the sham merchandise company to cheat the IRS by claiming fake expenses on his tax returns. By pretending that his business was underwater with hefty losses, Jobin-Reyes reduced the amount of taxes he claimed he owed, and underpaid more than $200,000 for tax years 2010 through 2014. In fact, none of the claimed expenses were true, because SJ Merchandise didn’t conduct any real business at all.
In addition to the fabricated “John Caldwell,” Jobin-Reyes also stole the identity of a real person, his friend and former roommate who had once given Jobin-Reyes access to his personal information. Jobin-Reyes convinced his friend to open business banking and credit accounts, using the friend’s social security number and good credit, then used those accounts to receive and disburse the illegal proceeds from SeaWorld. He then went on to use the friend’s social security number to open several new credit cards, without the friend's knowledge. Jobin-Reyes admitted that he left his friend with unpaid and overdue balances of at least $177,000.
Jobin used the money he stole from SeaWorld, the taxpayers, and his friend’s credit cards to fund a lavish lifestyle he could not otherwise afford. He spent the proceeds on cruises, plane tickets, hotels, restaurants, and shopping. In the year preceding his arrest, according to court documents, he traveled around the country from New Orleans to Hawaii, spending the stolen money. He even arranged to have credit cards printed for his family members, secretly racking up more debt on his friend’s credit.
“Business insiders who abuse the trust of their employers and the community should be warned that they face serious consequences and will be brought to justice,” said U.S. Attorney Laura E. Duffy. “We are dedicated to protecting our local businesses, citizens, and taxpayers from corruption and deceit.”
U.S. Secret Service Special Agent in Charge David Murray said, “Today’s sentencing is a reminder to those who engage in financial fraud and identity theft, that the U.S. Secret Service and its law enforcement partners will actively investigate and pursue prosecution of those who violate the trust of their employers for their own personal gain.”
“As today’s sentencing of Mr. Jobin-Reyes demonstrates, defrauding your employer, your friend, and deceiving the IRS results in serious consequences, both financially and in terms of one’s freedom,” stated IRS-Criminal Investigation Acting Special Agent in Charge Anthony J. Orlando. “IRS-Criminal Investigation is committed to working with our law enforcement partners, as well as with members of the local community, to identify, investigate, and prosecute those who commit fraud for their own personal financial gain.”
Jobin-Reyes was arrested in Dallas, Texas in March 2016, and since arrest he has been detained in federal custody as a flight risk. He was sentenced by U.S. District Judge Jeffrey T. Miller. In addition to the prison sentence, Jobin-Reyes was ordered to pay $818,000 in restitution to SeaWorld and $177,000 to the victim of the identity theft. He also is obligated to pay hundreds of thousands of dollars in back taxes and penalties to the IRS.
DEFENDANT:
Wilfred David Joseph Jobin-Reyes, 16CR0811-JM Age: 48 San Diego, CA
CHARGES
Wire Fraud, in violation of 18 U.S.C. § 1343
Maximum Penalties: 20 years’ imprisonment, $250,000 fine, $100 special assessment, restitution.
Filing False a Tax Return, in violation of 26 U.S.C. § 7206(1)
Maximum Penalties: 3 years’ imprisonment, $250,000 fine, $100 special assessment, restitution.
AGENCIES
United States Secret Service
Internal Revenue Service Criminal Investigation
Convicted Sex Offender Sentenced to More Than 13 years in Prison for His Role in the Distribution of Images of a Three-Year-Old ChildRead the Press Release
Assistant U.S. Attorney Alessandra Serano (619) 546-8104
NEWS RELEASE SUMMARY – September 30, 2016
SAN DIEGO, CA – Antonio Glen Boleware, a 39-year-old convicted sex offender and former Marine, was sentenced in federal court today to 158 months in prison for child pornography-related offenses.
According to statements made in court, Boleware was communicating with his girlfriend, 44-year-old Joanna Olson, of Washington State, who was taking illicit photos of a three-year old girl and sending them to Boleware. Boleware was distributing those images and other illicit images to other individuals using an online texting application.
Olson, who pleaded guilty to distribution of child pornography, was sentenced in July to five years in prison for her role in the child pornography exchange. The prosecutor in that case in federal court in Washington state wrote in court papers that the abuse has had a devastating impact on the child.
Boleware was previously convicted of lewd and lascivious acts with a minor under 14 years in 2004.
During Boleware’s sentencing hearing, U.S. District Judge Gonzalo P. Curiel stated that Boleware’s distribution of the photos “magnified the seriousness of the offense” because “the material is on the internet forever, available to predators.”
Before the sentence was handed down, Assistant U.S. Attorney Alessandra Serano urged Judge Curiel to impose the maximum 20-year prison term given Boleware’s “continued involvement in the exploitation of minors over several years.”
In this case, Boleware pleaded guilty in October 2015, admitting to possession of child pornography with a prior sex offense conviction.
“This defendant has continually victimized children who are unable to protect themselves,” said U.S. Attorney Laura Duffy. “There is no higher priority than protecting children from predators like Mr. Boleware.”
DEFENDANT Criminal Case No. 15CR2462-GPS
Antonio Glen Boleware Age: 39 San Diego
SUMMARY OF CHARGES
Possession of Child Pornography with a Prior Sex Offense, in violation of 18 U.S.C. §2252(a)(2)
Maximum Penalties: Twenty years in prison, mandatory minimum 10 years
INVESTIGATING AGENCY
Federal Bureau of Investigation
Tijuana Man Indicted for Smuggling Almost 6,000 Pills Containing Ultra-Deadly Fentanyl; Officials Troubled by TrendRead the Press Release
Assistant U. S. Attorneys Kevin Mokhtari (619) 546-8402 Sherri Hobson (619) 961-0287
NEWS RELEASE SUMMARY – September 22, 2016
SAN DIEGO – A Tijuana man was arraigned this morning in federal court on charges that he smuggled into the United States almost 6,000 pills containing the ultra-deadly drug fentanyl in a case that signals an alarming trend.
In recent weeks, law enforcement officials have become increasingly concerned over the number of fentanyl seizures at the Ports of Entry by Customs and Border Protection Officers and at the United States Border Patrol checkpoints. When fentanyl, a Schedule II synthetic opioid painkiller, is produced in clandestine laboratories, it can be 100 times more potent than morphine. Exposure to even a trace amount of fentanyl through inhalation or absorption through the skin can be fatal.
In federal court in San Diego today, defendant Jose Arturo Acevedo, 35, of Tijuana, Mexico, was arraigned before U.S. Magistrate Judge William V. Gallo. Acevedo was indicted by a federal grand jury Wednesday on multiple counts related to the smuggling of 5,857 pills containing fentanyl, 55 pounds of methamphetamine, 24 pounds of cocaine, and 12 pounds of heroin. His next court appearance is scheduled for October 24, 2016 at 2 p.m. before U.S. District Judge Cynthia A. Bashant.
The blue pills had markings and the physical dimension of oxycodone, but the Drug Enforcement Administration lab determined that they contained fentanyl. Acevedo was charged with four counts of importation of a controlled substance, in violation of 21, United States Code, Section 952 and 960. According to the complaint originally filed in the case, Acevedo entered the San Ysidro Port of Entry on July 19, 2016, in his vehicle that contained 24 packages of drugs concealed in a speaker box lying on the floor of the vehicle behind the front seats near the passenger door.
In the last two weeks, there have been three additional law enforcement seizures of fentanyl in powder form by Border officials.
On September 9, 2016, defendant Philip Randolph Lilien, 64, a Denver resident living temporarily in Mexico at the time of the offense, was charged with smuggling 19 pounds of fentanyl and 20 pounds of heroin through the San Ysidro Port of Entry. He was apprehended by Customs and Border Protection Officers. According to charging documents, the CBP officers found 11 packages of drugs which were concealed in a spare tire located inside the cargo area of Lilien’s vehicle. He is scheduled to appear in court for a preliminary hearing on September 22, 2016, before U.S. Magistrate Judge Bernard Skomal. Lilien is currently charged with importation of controlled substances, in violation of Title 21, United States Code, Sections 952 and 960.
On September 12, 2016, defendant David Martinez-Carrillo, age 26, of Mexico, was arrested at the United States Border Patrol checkpoint in Pine Valley after agents found 18 pounds of fentanyl and eight pounds of methamphetamine in his vehicle. Martinez-Carrillo has been charged with possession of controlled substances with intent to distribute, in violation of Title 21, United States Code, Section 841(a)(1). He is set for a preliminary hearing on October 11, 2016 before U.S. Magistrate Judge Jill L. Burkhardt.
And most recently, on September 16, 2016, Arturo Torres-Carballo, 28, from El Centro, California, and Erik Alejandro Dominguez, 23, of Mexico, were arrested near the United States Border Patrol checkpoint on Highway 86. According to charging documents, Border Patrol Agents found 33 pounds of fentanyl concealed in 13 packages located in a secret compartment under the rear speaker area of the vehicle. On September 19, 2016, the defendants appeared in court for arraignment on a felony charge of possession with intent to distribute, in violation of 21 United States Code, Section 841(a)(1). They are set for a preliminary hearing on September 29, 2016 before U.S. Magistrate Judge Peter C. Lewis in El Centro, California.
“We are extremely troubled by the number of fentanyl seizures we’ve seen recently,” said U.S. Attorney Laura Duffy. “Drug users, listen up! This is life or death. If you are buying painkillers on the street and not the pharmacy, your drugs might contain fentanyl, and even miniscule amounts of fentanyl can have devastating consequences for those who abuse it or literally even touch it. The extreme danger of fentanyl cannot be overstated.”
“Drug users seeking illicit prescription pills on the street can no longer be sure that they are getting a pharmaceutical product and may be getting fentanyl instead,” said DEA San Diego Special Agent in Charge William Sherman. “Fentanyl is not a better high, it is a potential death sentence.”
“Fentanyl has clearly become a growing epidemic,” said Chief Patrol Agent Richard A. Barlow, of the U.S. Border Patrol, San Diego Sector. “The hazard that it poses is deeply concerning and for that reason, it must be aggressively addressed by the law enforcement community.”
“Fentanyl has increasingly infiltrated our community, imposing a serious and harmful threat as it becomes more common and easily accessible,” said Dave Shaw, special agent in charge for ICE Homeland Security Investigations in San Diego. “Our agents are working closely with local law enforcement partners to identify the criminals responsible and cut off the channels that support this arising threat.”
Last year, the Drug Enforcement Administration released a nationwide public health alert on fentanyl. Fentanyl is anywhere from 25 to 50 times more potent than heroin. The drug and its analogues are being produced to a large extent in China. DEA investigations reveal that the Mexican drug cartels, including Sinaloa, are purchasing fentanyl directly from China and producing fentanyl from precursors sourced from China.
In some parts of the country, heroin is being spiked with fentanyl or being replaced by fentanyl. There are a number of reasons why, but it mainly comes down to economics. Fentanyl generates greater profits than heroin.
DEFENDANTS
Jose Arturo Acevedo Age 35 Mexico Criminal Case No. 16CR2167
Philip Randolph Lilien Age 64 Denver, CO Criminal Case No. 16MJ2825
David Martinez-Carrillo Age 26 Mexico Criminal Case No. 16MJ2857
Arturo Torres-Carballo Age 28 El Centro, CA Criminal Case No. 16MJ8788
Erik Alejandro Dominguez Age 23 Mexico Criminal Case No. 16MJ8788
SUMMARY OF CHARGES
Possession with Intent to Distribute Controlled Substances (21 U.S.C. 841(a)(1)
Importation of Controlled Substances (21 U.S.C. 952 and 960)
Maximum penalty: 20 years’ imprisonment and $500,000 fine
AGENCY
Customs and Border Protection
U.S. Border Patrol
Drug Enforcement Administration
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.
Man Sentenced to 10 Years for Conspiracy to Prostitute Young GirlsRead the Press Release
Assistant U.S. Attorney Susan L. Park (619) 546-6760
NEWS RELEASE SUMMARY – September 20, 2016
SAN DIEGO – Eric Watkins, aka “Crank Moe” and “Cali Made Crankk,” was sentenced Monday to 120 months in prison for conspiracy to commit sex trafficking of children in San Diego and Oceanside.
Between September 11, 2014 and September 13, 2014, Watkins (age 21) and his co-defendant Ricardo Bojorquez (age 24) conspired to commit sex trafficking of two 15-year old females. Watkins and Bojorquez approached young girls and women on the trolley and used Facebook and other social media sites to recruit young girls and women for the purpose of prostitution.
In carrying out the conspiracy, Watkins and Bojorquez detained a minor female (age 15) at Bojorquez’s apartment in San Diego, California, for the purpose of prostitution. They forced her to call her father to tell him she would not be coming home and then took away her cell phone. She was threatened and told that she was not free to leave and would make money for them as a prostitute. Also present was a second minor female (age 15) who had a long history of prostituting herself for Watkins’ benefit. Watkins had his pimp moniker tattooed on the second minor female’s neck. Watkins, who has served as the pimp for several young girls and women, also assisted Bojorquez in posting online escort advertisements containing images of the two minor females.
On September 13, 2016, Watkins and Bojorquez took both minors from San Diego to Oceanside, California, for the purpose of making money through commercial sex acts committed by the two minors. After being told again that she had to prostitute herself, the first minor female, who was present against her will, was able to flee to a bar in Oceanside and called her father to pick her up.
Ricardo Bojorquez was sentenced to 78 months in prison on April 25, 2016. Following their release from prison, both Watkins and Bojorquez will be placed on eight years of supervised release and lifetime registration as sex offenders.
This case was the result of the collaborative work by the Federal Bureau of Investigation’s Child Exploitation Task Force and the San Diego Police Department.
DEFENDANTS Case Number 14CR3661
Eric Watkins Age: 21 Hometown: Chula Vista, Calif.
Ricardo Bojorquez Age: 24 Hometown: San Diego, Calif.
SUMMARY OF CHARGE OF CONVICTION
Conspiracy to Commit Sex Trafficking of Children, in violation of Title 18, U.S.C., Section 1594(c)
AGENCY
San Diego Police Department
Federal Bureau of Investigations
Victims of human trafficking can be anyone, including men, women, children, adults, foreign nationals, or U.S. citizens. Victims are protected under the law. Please get help for yourself or a suspected victim from the National Human Trafficking Resource Center toll free, 24/7 Hotline: 888-373-7888 or TEXT BeFree or 233733. Individuals can also call the San Diego Human Trafficking Task Force tip-line at 858-495-3611 with any non-emergency information. For emergencies please call 911 or the local law enforcement agency in your area. To learn more, check: www.FightHumanTraffickingSD.org
Two Former Executives of Foreign Defense Contractor Charged in Expanding Fraud and Corruption ProbeRead the Press Release
Assistant U.S. Attorneys Mark W. Pletcher (619) 546-9714 and Patrick Hovakimian (619) 546-9718
NEWS RELEASE SUMMARY – September 15, 2016
SAN DIEGO, CA – Two former executives of foreign defense contractor Glenn Defense Marine Asia have been charged with participating in a conspiracy to submit fraudulent information, price quotes, claims and invoices to the U.S. Navy in an effort to steal millions of dollars as part of a years-long corruption and fraud scheme.
Neil Peterson, 38, and Linda Raja, 43, 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 have been arrested and are currently being held in custody in Singapore, awaiting extradition to the United States to answer charges relating to their participation in the massive scheme to defraud the U.S Navy.
The indictment, unsealed yesterday by order of U.S. District Judge Janis L. Sammartino in the Southern District of California, alleges that Peterson and Raja submitted false claims of well over $5 million to the U.S. Navy. According to the indictment, in addition to the submission of fraudulent claims and invoices, Peterson and Raja worked to perpetuate and cover up their fraud by consistently misrepresenting to the U.S. Navy the cost of providing services to its ships in Asia, even going so far as to submit false price quotes from non-existent companies, on letterhead created from graphics cut and pasted from the Internet.
Peterson and Raja are each charged with one count of conspiracy to defraud the United States with respect to claims; one count of conspiracy to commit wire fraud; and multiple counts of making false claims.
Including Peterson and Raja, a total of 16 named individual defendants have been charged in connection with the GDMA corruption and fraud investigation. Of those, 11 are current or former U.S. Navy officials, including Admiral Robert Gilbeau, believed to be the first active-duty U.S. Navy flag officer charged in a federal criminal case; Captain (ret.) Michael Brooks; Commander Bobby Pitts; Lt. Commander Gentry Debord; Captain Daniel Dusek; Commander Michael Misiewicz; Lt. Commander Todd Malaki; Commander Jose Luis Sanchez; 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, Dusek, Misiewicz, Malaki, Beliveau, Sanchez, Layug, 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 ordered 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 ordered 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 ordered to pay a fine of $100,000 and to pay $95,000 in restitution to the Navy. Gilbeau, Beliveau, Sanchez, and Simpkins await sentencing.
Brooks, Pitts and Debord were charged in May 2016 and their cases are pending.
Also charged are three additional GDMA executives – Francis, Alex Wisidagama and Ed Aruffo. All three 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. The Justice Department’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.
DEFENDANTS Case Number: 14-CR-3703-JLS
Neil Peterson 38 Singapore
Linda Raja 43 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.
Conspiracy to Commit Wire Fraud, in violation of 18 U.S.C. § 1349
Maximum Penalty: 20 years in prison, a $250,000 fine.
False Claims, in violation of 18 U.S.C. § 287
Maximum Penalty: 5 years in prison, a $250,000 fine.
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
Defense Contract Audit Agency
Two Former Executives of Foreign Defense Contractor Charged in Expanding Fraud and Corruption ProbeRead the Press Release
Two former executives of a foreign defense contractor have been charged in an indictment unsealed today with participating in a conspiracy to submit fraudulent information, price quotes, claims and invoices to the U.S. Navy in an effort to steal millions of dollars as part of a years-long corruption and fraud scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Laura E. Duffy of the Southern District of California, Acting Director Dermot O’Reilly of the Department of Defense’s (DoD) Defense Criminal Investigative Service (DCIS) and Director Andrew Traver of the Naval Criminal Investigative Service (NCIS) made the announcement.
Neil Peterson, 38, and Linda Raja, 43, both of Singapore, were each charged with one count of conspiracy to defraud the United States with respect to claims; one count of conspiracy to commit wire fraud; and multiple counts of making false claims. Both defendants have been arrested by authorities in Singapore at the request of the U.S. government.
According to the indictment, Peterson and Raja worked for Singapore-based Glenn Defense Marine Asia (GDMA) and conspired with Leonard Glenn Francis, the owner of GDMA, in order to defraud the U.S. Navy for GDMA’s financial benefit. The indictment alleges that 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.
The indictment alleges that Peterson and Raja submitted more than $5 million in false claims and invoices to the U.S. Navy. In addition, Peterson and Raja allegedly worked to perpetuate and cover up their fraud by consistently misrepresenting to the U.S. Navy the cost of providing services to its ships in Asia, even going so far as to submit false price quotes from non-existent companies on letterhead created from graphics cut and pasted from the internet.
Including Peterson and Raja, a total of 16 individuals have been charged in connection with the GDMA corruption and fraud investigation. Of those, 11 are current or former U.S. Navy officials, including Admiral Robert Gilbeau; Captain (ret.) Michael Brooks; Commander Bobby Pitts; Lt. Commander Gentry Debord; Captain Daniel Dusek; Commander Michael Misiewicz; Lt. Commander Todd Malaki; Commander Jose Luis Sanchez; Petty Officer First Class Daniel Layug; NCIS Supervisory Special Agent John Beliveau; and Paul Simpkins, a former DoD civilian employee who oversaw contracting in Singapore.
Gilbeau, Dusek, Misiewicz, Malaki, Beliveau, Sanchez, Layug 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 ordered 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 ordered 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 ordered to pay $95,000 in restitution to the Navy and a $100,000 fine. Gilbeau, Beliveau, Sanchez and Simpkins await sentencing.
Brooks, Pitts and Debord were charged in May 2016 and their cases are pending.
Also charged are three additional GDMA executives: Francis, Alex Wisidagama and Ed Aruffo, and all three have pleaded guilty. Wisidagama was sentenced on March 18, 2016, to 63 months in prison and was ordered to pay $34.8 million in restitution to the Navy. Francis and Aruffo await sentencing.
An indictment is merely an allegation and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
DCIS, NCIS and the Defense Contract Audit Agency are investigating. Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California are prosecuting the case. The Justice Department’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.
Local Business Owner Charged with Structuring Nearly $4 Million Cash and Conspiracy to Distribute Controlled SubstancesRead the Press Release
Assistant U.S. Attorneys Orlando B. Gutierrez and Daniel C. Silva at (619) 546-9713
NEWS RELEASE SUMMARY – September 7, 2016
SAN DIEGO – A grand jury for the Southern District of California returned a six-count superseding indictment this morning against San Diego businessman Lakhwinder Singh “aka” Victor and his business Lovely Singh, Inc. for their role in a criminal conspiracy to distribute controlled substances, and for structuring approximately $3,938,976 into bank accounts all throughout San Diego County.
As set forth in the superseding indictment, Singh, along with his co-defendant, Alejandro Nava, are charged with conspiring to distribute controlled substances, oxycodone, which is a Schedule II Controlled Substance. Singh owned and operated Postal Annex stores in La Mesa and Lemon Grove. In addition to distributing the controlled substances, the Postal Annex stores operated as agents for an international money transmitting business. With the cash generated from the Postal Annex stores, Singh is alleged to have conducted hundreds of cash deposits for less than $10,000 in an effort to evade the law requiring the filing of a Currency Transaction Report (a “CTR”).
Federal laws and regulations require a domestic financial institution that engages in a currency transaction involving more than $10,000 in United States currency to file a CTR with the United States Department of the Treasury. It is an offense to cause or attempt to cause a domestic financial institution to fail to file a CTR, or for a person to “structure” cash transactions with the same purpose.
“Structuring” includes conducting one or more financial transactions in currency, in any amount, at one or more financial institutions, on one or more days, in any manner, for the purpose of evading CTRs. Federal laws and regulations define “in any manner” to include the breaking down of a single sum of currency exceeding $10,000.00 into smaller sums, as well as conducting a series of transactions, including transactions “at or below $10,000.”
“In this investigation, federal agents uncovered a very serious public health threat that should serve as a warning to those who put consumers at risk for their own financial gain,” said Dave Shaw, Special Agent in Charge for Immigrations and Customs Enforcement (ICE), Homeland Security Investigations (HSI) in San Diego. “HSI is committed to working closely with our law enforcement partners, here and abroad, to prevent imposter drugs from being smuggled into the U.S. and distributed via unregulated pharmaceutical supply chains on the Internet.”
“People who facilitate the illegal shipment of pills and make a profit are called drug dealers,” said DEA San Diego Special Agent in Charge William R. Sherman. “Thirty milligram oxycodone pills are the most abused prescription painkiller in the United States. DEA will continue to conduct investigations so that these dangerous pills do not make it to the streets for people to abuse.”
“Federal laws that regulate the reporting of financial transactions are designed to detect and stop illegal activities. As an agent for a money service business, Singh has the responsibility to comply with federal regulations and have anti-money laundering policies in place,” stated Anthony J. Orlando, Acting Special Agent in Charge for IRS Criminal Investigation. “This investigation continues to demonstrate our efforts to ensure that the financial services industry will operate in a fair and honest manner to promote public trust.”
In total, the Superseding Indictment alleges that Singh conducted 651 cash deposits between December 2011 and January 2014, for approximately $3,938,976.33; all with the intent to evade the filing of a CTR. The Superseding Indictment also contains forfeiture allegations in the same amount.
DEFENDANTS
Lakhwinder Singh “aka” Victor
Alejandro Nava
Lovely Singh, Inc.
SUMMARY OF CHARGES
Conspiracy to Distribute a Controlled Substance – Title 21 U.S.C., Sections 841(a)(1) and 846
Maximum penalty: 20 years’ imprisonment, $250,000 fine, and forfeiture
Structuring and Attempt to Evade the Filing of a CTR – Title 31, U.S.C., Sections 5324(a)(1) and (a)(3)
Maximum penalty: 10 years’ imprisonment and $500,000 fine (individual), $1,000,000 fine (corporation), and forfeiture
AGENCIES
Homeland Security Investigations
Drug Enforcement Administration
Internal Revenue Service – Criminal Investigation
Doctor Arrested and Charged with Providing Prescriptions for Opioids and Other Scheduled Pharmaceutical Drugs to Patients in Exchange for Sex ActsRead the Press Release
Contact: Assistant U. S. Attorney Orlando B. Gutierrez, 619-546-6958
NEWS RELEASE SUMMARY – August 31, 2016
SAN DIEGO – Physician Naga Raja Thota, a pain specialist with an office in El Cajon, was arrested this morning and charged with distributing oxycodone and other highly addictive drugs without any legitimate medical purpose in exchange for sex acts.
The doctor was taken into custody by San Diego Drug Enforcement Administration agents at his practice. He is scheduled to make his first appearance in federal court at 2 p.m. before U.S. Magistrate Judge Bernie Skomal.
The complaint said at least two young women received prescriptions for opioids without a legitimate medical purpose on numerous occasions in exchange for sex acts. The complaint also shows a pattern in which sexually-explicit texts are exchanged by the doctor and the women, followed by prescriptions written for them by Thota.
According to the complaint, one victim said she met Thota when she was hospitalized for withdrawal symptoms for Hydrocodone and Alprazolam. Thota agreed to treat her but documented that his treatment was for pain even though this victim did not suffer from any medical condition that caused chronic or ongoing pain. This victim also stated that Thota kept increasing the dosage.
This victim, who was twenty years old when she met Thota, said she felt that if she did not submit to sexual acts with Thota he would not have provided her with additional opioid prescriptions. After being exposed to greater dosage levels of opioids by Thota, the young woman started using an even stronger opioid – heroin.
“Prescription drug abuse and overdoses have reached alarming levels,” said U.S. Attorney Laura Duffy. “We are going after doctors who abuse their power to prescribe and exploit the desperation of addicts for their own gratification.”
“Doctors who exploit patients are the worst kind of predators.” said DEA San Diego Special Agent in Charge William Sherman. “DEA recognizes the trust the citizens of San Diego place in their doctors. We will continue to ensure that physicians who are abusing that trust by bartering sex for prescriptions will be arrested and prosecuted.”
If anyone has information regarding other victims or if you believe you were victimized by Dr. Thota, we urge you to contact DEA at (858) 616-4100 and ask for the Diversion Duty Agent.
Under Title 21, United States Code, Section 841, and Title 21, United States Code of Federal Regulations, Section 1306.04(a), a medical doctor may not prescribe a controlled substance unless there is a legitimate medical purpose.
DEFENDANT CRIMINAL CASE NO. 16MJ2679
Naga Raja Thota Age: 62 San Diego, CA
SUMMARY OF CHARGES
Counts 1-7 Title 21, United States Code, Sections 841(a)(1)– Dispensing Controlled Substances Without a Legitimate Medical Purpose. Maximum penalties: 20 years of custody, $1 million fine, life-term of supervised release.
INVESTIGATING AGENCY
U.S. Drug Enforcement Administration
Prison for Head Telemarketer at Predatory “Law Firm”Read the Press Release
Assistant U.S. Attorneys Emily W. Allen (619) 546-9738, Valerie Chu (619) 546-6750
NEWS RELEASE SUMMARY – August 29, 2016
SAN DIEGO – San Diego telemarketer Charles Rose was sentenced today to eight months in custody for his role in a fraudulent loan modification scheme that employed as many as 30 telemarketers to sell bogus legal services to hundreds of struggling homeowners. In reality, this “law firm” had just one figurehead attorney, and did not perform any legal services for the 1,000 clients they swindled.
The telemarketers, who reported to Rose and followed his example to make sales, recruited new customers using a series of lies designed to lure them into paying a hefty $3,500 fee to the “law firm” of Haffar & Associates. Using scripts, form letters, and his own recorded sales calls, Rose taught his telemarketing staff how to use a variety of false statements to get desperate homeowners to pay the exorbitant fees. Among the lies used by Rose and his staff were claims of the firm’s “98% success rate,” clean record with the California State Bar, special access and success with “just about every lender,” and specialized staff and “lawyers” who would conduct a “forensic audit” of the clients’ loan documents.
Rose and his co-schemers falsely told victims that their attorneys had “never” lost a client’s home to foreclosure, and that although the firm had a “100% money back guarantee,” no customer had “ever asked for a refund.” In fact, as Rose and figurehead attorney Mohamed Haffar have both admitted, Haffar & Associates did not have anything close to a 98% success rate, did not have any special connections with banks or their legal departments, did not successfully complete loan modifications, and many of their dissatisfied customers never received the refunds they requested.
One of Rose’s co-schemers, Michael Nazarinia, did actually supervise the “case managers” who submitted some loan modification applications to banks. But in contrast to the representations made to clients, attorney Haffar did not directly supervise Nazarinia’s case managers – instead, they dealt with clients without any input or direction from Haffar. The schemers understood that Haffar’s fees were intended to compensate him for the risk he took in allowing Nazarinia and Rose to use his name, bar license, and law firm to execute the scheme.
After Haffar & Associates stopped doing new business, Rose and Nazarinia started a new company, called “REST Report Matters,” charging even more money for a product they claimed would facilitate the review of applications for loan modifications. Rose admitted that he made false representations to potential clients in order to induce them to sign up and pay their fees.
In addition to his fraudulent loan modification scheme, Rose was also charged with tax offenses for failing to report over $120,000 in income from Haffar & Associates to the IRS.
United States Attorney Laura Duffy condemned the conduct in this case, noting that “these individuals preyed on the vulnerability of some of our neediest citizens during their time of hardship and suffering. Our law enforcement partners will continue to root out these scams to punish people who enrich themselves by exploiting others.”
“Charlie Rose aggressively pursued distressed mortgage holders, offering a false sense of hope while he enriched himself,” said Robert Wemyss, Postal Inspector in Charge of the Los Angeles Division. “When criminals use the mail to perpetrate fraud, postal inspectors, with the full cooperation of their law enforcement partners, will actively pursue them until they are brought to justice.”
Anthony J. Orlando, Acting Special Agent in Charge of IRS Criminal Investigation said, “Using the promise of a law firm to represent its clients, the defendants preyed on financially desperate homeowners struggling to keep a roof over their heads. As today’s sentence shows, those who brazenly enrich themselves on the backs of distressed homeowners will be held accountable for their crimes.”
“Charles Rose preyed on others’ misfortune to line his own pockets,” said Special Agent in Charge Leslie DeMarco of the Federal Housing Finance Agency – Office of Inspector General. “The sentence he received today provides justice and will hopefully act as a deterrent to anyone else who might be tempted to engage in similar conduct.”
Three co-defendants were also convicted on federal charges in the scheme. In addition to stipulating to his disbarment, attorney Mohamed Haffar pleaded guilty to tax charges relating to the venture in August 2014, and was later sentenced by U.S. District Judge Houston to three months. Michael Nazarinia pleaded guilty in November 2015 to mail fraud and tax offenses, admitting that he generated a fraudulent lease agreement in order to deceive a client’s mortgage holder and fraudulently delay eviction. Nazarinia also admitted to filing false income tax returns and failing to pay more than $30,000 in taxes. Nazarinia was sentenced to nine months in prison, also by Judge Houston. And in May 2015, Stacy Tuers pleaded guilty on tax charges and admitted that he knew the telemarketers were making false statements to potential clients, but continued to sell Haffar & Associates loan modification services.
DEFENDANT:
Charles Rose, 15CR1786-JAH Age: 32 San Diego, CA
CHARGES
Mail fraud, in violation of 18 U.S.C. § 1341
Maximum Penalties: 20 years’ imprisonment, $250,000 fine or twice the pecuniary loss or gain, $100 special assessment, restitution.
Subscribing to a false tax return, in violation of 26 U.S.C. § 7206(1)
Maximum Penalties: 3 years’ imprisonment, $250,000 fine, $100 special assessment, restitution.
DEFENDANTS PREVIOUSLY CHARGED:
Michael Nazarinia, 15CR2718-JAH Age: 41 San Diego, CA
Mohamed Haffar, 14CR2251-JAH Age: 36 San Diego, CA
Stacy Tuers, 15CR1342-JAH Age: 54 San Diego, CA
AGENCIES
United States Postal Inspection Service
Internal Revenue Service – Criminal Investigation
Federal Housing Finance Agency – Office of Inspector General
Former Navy Employee and Defense Contractor Plead Guilty to Engaging in Kickback SchemeRead the Press Release
NEWS RELEASE SUMMARY – August 19, 2016
Assistant U.S. Attorneys Rebecca S. Kanter (619-546-7304) and Andrew Galvin (619-546-9721)
SAN DIEGO – A former Navy Facilities Engineering Command (“NAVFAC”) civilian employee and a defense contractor pleaded guilty yesterday to charges relating to their conspiracy to defraud the Navy by filing false claims related to government contracts. Bentley faces a maximum sentence of ten years in prison, while Cioe faces a maximum of five years.
Joseph Bentley, who was previously a civilian employee at NAVFAC Southwest, supervised crews that did roofing, welding, paving, fencing and other types of construction repair, and maintenance work for the Navy and U.S. Marine Corps. As part of his job duties, he was responsible for requesting and/or authorizing the purchase of materials, supplies and labor from local suppliers and contractors. One of the individuals he arranged for the Navy to contract with was Eugene Cioe, the owner of Alcem Fencing Company, which operated out of National City, California until May 2013, and the owner of Cioe Fencing Consultant and Material Sales after May 2013.
As detailed in Cioe’s plea agreement, Bentley and Cioe agreed that Bentley would recommend, authorize or otherwise arrange for Defendant to receive orders for purchases from the Navy in exchange for Cioe providing Bentley with a kickback – money in payment for codefendant Bentley’s assistance in directing business to Defendant. For example, as Cioe admitted to Magistrate Judge Jan Adler in court today, in June 2011, Bentley arranged for Alcem to receive over $7,000 for a job on Building 322 on Naval Base San Diego (“NBSD”) through a Napa Auto Parts purchase in exchange for a $1,500 payment to codefendant Bentley from Defendant’s company. After billing the Navy and receiving $7,151.64 in government funds for materials for Building 322 on NBSD, Cioe paid Bentley $1,500. In February 2013, codefendant Bentley arranged for Alcem to receive another job with the Navy in exchange for an illegal payment from Defendant to codefendant Bentley, specifically, Alcem cashier’s check number 664152 on February 12, 2013 for $5,000.
Both defendants admitted that the conduct continued into the following year, when Cioe presented false claims to the United States Navy for core-drilling work that was in fact performed by NAVFAC employees. Specifically, between May 14 and June 4, 2014, Bentley arranged for Cioe to receive two orders for material, labor and equipment to drill 48 holes and set fencing posts at the Naval Base Coronado (“NBC”). Cioe then invoiced the Navy $4,764 for the core-drilling project, and was paid by the Navy for the work. Both defendants admitted in court today that they knew that in truth, neither Cioe nor anyone working for Cioe Material Sales actually performed the work reflected on the invoices in exchange for the $4,764 in total payments; in fact, the work was performed by NAVFAC employees.
In addition to the false claims admitted to by both defendants, Bentley further admitted to using the Navy to purchase $3,545 in roofing materials, falsely claiming that they were for a roofing project on Building 618 on NBC, which Bentley then stole to install on his personal residence in Imperial Beach. Then, after Bentley became aware of the government’s investigation, he asked a co-conspirator who had installed the roof to give the investigators false information about the roofing order. Specifically, he told his co-conspirator to falsely tell the investigating agents that his (Bentley’s) father was still alive when the roof was installed and asked the co-conspirator to backdate a receipt for the demolition of the old roof by approximately six months. Both of these lies would have had the effect of creating false evidence that the roof was actually installed long before the ABC order for the NBC project, thus, providing Bentley a possible defense to the charge that the roofing materials on his father’s house were the same materials paid for by the Navy in January 2013.
U.S. Attorney Laura Duffy commented, “Our office will continue to prosecute government insiders and military contractors who abuse and corrupt the procurement process to line their own pockets. This case is an excellent example of the continued success our federal law enforcement agencies have had in rooting out corruption through their cooperative joint investigations.”
FBI Special Agent in Charge Eric S. Birnbaum stated, “The FBI will continue to work with our law enforcement partners to root out corrupt individuals who use their government positions and associations with the government for personal gain.”
The FBI encourages the public to report allegations of public corruption to the FBI public corruption hotline at telephone number (877) NO-BRIBE (662-7423).”
Bentley and Cioe will be sentenced by United States District Judge Jeffrey T. Miller on December 2, 2016 at 9:00 a.m.
DEFENDANTS
Case Number: 15CR0195-JM
Joseph H. Bentley
Age: 55
Imperial Beach, California
Eugene Cioe
Age: 59
El Cajon, California
CHARGES
Bentley: Counts 3 & 4: False, Fictitious and Fraudulent Claims (18 U.S.C. § 287). Count 5: Theft of Public Property (18 U.S.C. § 641)
Cioe: Count 1: Conspiracy to Make False, Fictitious and Fraudulent Claims (18 U.S.C. § 371).
MAXIMUM PENALTIES
False, Fictitious and Fraudulent Claims (18 U.S.C. § 287) – maximum 5 years’ prison, $250,000 fine, $100 mandatory special assessment, 3 years’ supervised release
Conspiracy to Make False, Fictitious and Fraudulent Claims (18 U.S.C. § 371) – maximum 5 years’ prison, $250,000 fine, $100 mandatory special assessment, 3 years’ supervised release
Theft of Public Property (18 U.S.C. § 641) – maximum 10 years’ prison, $250,000 fine, $100 mandatory special assessment, 3 years’ supervised release
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Federal Bureau of Investigation
Internal Revenue Service, Criminal Investigations
Naval Criminal Investigative Service
North Park Gang Member Sentenced to 11 years in Prison for His Leadership Role in a Racketeering Conspiracy Involving Sex Trafficking and ProstitutionRead the Press Release
NEWS RELEASE SUMMARY – August 15, 2016
Assistant U.S. Attorneys Alessandra P. Serano (619) 546-8104 or Joseph J.M. Orabona (619) 546-7951
SAN DIEGO, CA – A member of the Black Mob/Skanless Enterprise, which consisted of two North Park-based criminal street gangs, was sentenced to 11 years in prison today for his leadership role in a racketeering enterprise involving sex trafficking of minors and adults as well as assault and robbery.
Aaron Dwayne Pittman, aka “Q-Tip” or “Lil’ Q-Tip,” acting as a pimp, supervised, managed, and maintained adult females as they engaged in prostitution in San Diego, Phoenix, Orlando, Honolulu, and other cities throughout the United States. He was sentenced on the charge of RICO conspiracy before U.S. District Court Judge John A. Houston.
As detailed in his plea agreement, Pittman, a member of the Black Mob criminal street gang, conspired with other members of the Black Mob/Skanless Enterprise from at least the late 1990s through December 2013 to engage in a pattern of racketeering activities, including sex trafficking, robbery, and assault, in San Diego County and elsewhere in the United States. In carrying out the conspiracy, Pittman purchased flights, posted online ads, and promoted prostitution of females working for him – which Pittman referred to as “Team Tip.” As part of the conspiracy, Pittman admitted he robbed one of his prostitutes and forcefully assaulted another individual outside of a night club in San Diego. Pittman also admitted that the Black Mob/Skanless Enterprise enriched its members through recruiting and maintaining minor and adult females to work as prostitutes.
In imposing the 11-year sentence, Judge Houston stated that Pittman’s conduct was “not victimless criminal activity.” Judge Houston also noted that Pittman made a “lavish living out of pimping” and that Pittman had “little regard for the women who [he] controlled.” In addition to sentencing Pittman to 11 years in prison, Judge Houston also ordered the forfeiture of several vehicles, computers, other electronic devices, and pimp-related paraphernalia (i.e., ornate cups known as “pimp cups” which are commonly possessed by pimps as symbols of their status). Following his release from prison, Pittman will be placed on three years of supervised release.
“Sex trafficking is a crime that has long-lasting and devastating effects on the women and girls who are controlled by pimps like Mr. Pittman,” said U.S. Attorney Laura Duffy. “The 11-year sentence imposed for one of the leaders of the Black Mob criminal street gang demonstrates the seriousness of this crime and will hopefully deter other criminal street gangs from engaging in such activity.”
“This sentence sends a message that lives are not to be bought and sold,” said FBI Special Agent in Charge Eric S. Birnbaum. “The FBI, along with our partners, work tirelessly to rescue those forced into this modern day slavery and hold accountable those who wish to profit from the abuse of others. If you have information about human trafficking, we urge you to contact the Child Exploitation Task Force/San Diego FBI at 858-320-1800; or the National Human Trafficking Resource Center at 1-888-373-7888.”
The federal racketeering statute known as “RICO” historically has been used to prosecute mobsters and organized crime, but federal prosecutors have been using the statute on street gangs in recent years because the gangs are increasingly acting as organized criminal enterprises especially in sex trafficking and prostitution.
This case was the result of the collaborative work by the Federal Bureau of Investigation’s Child Exploitation Task Force and the San Diego Police Department.
DEFENDANT Criminal Case No. 13CR4510-JAH
Aaron Dwayne Pittman (1) Age: 34 San Diego, CA
aka “Q-Tip,” “Lil’ Q-Tip”
SUMMARY OF CHARGES THAT DEFENDANT VEGA PLEADED GUILTY TO:
Count 1 – Title 18, United States Code, Section 1962(d) B Conspiracy to Conduct Enterprise Affairs Through a Pattern of Racketeering Activity
Maximum penalties: 20 years in prison, $250,000 fine, 3 years of supervised release.
INVESTIGATING AGENCIES
Federal Bureau of Investigation
San Diego Police Department
Fourteen Men Charged in Illegal Gambling Operation Based Out of Lucky Lady Casino and 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 – July 27, 2016
SAN DIEGO – Fourteen men are charged in federal grand jury indictments with participating in a sophisticated bookmaking ring that used the Lucky Lady Casino and Card Room on El Cajon Boulevard as a legitimate front for the illicit operation.
More than 100 agents and detectives from the FBI, San Diego Police Department and IRS Criminal Investigation arrested 9 of the 14 defendants through coordinated actions in California, Nevada and Kentucky.
The FBI’s Organized Crime Squad also executed search warrants at multiple locations in San Diego, including the Lucky Lady Card Room itself. The joint FBI-San Diego Police Department investigation began in 2014, and employed wiretaps and undercover agents to infiltrate the alleged racketeering enterprise and uncover defendants’ illegal gambling activities. Additional subjects remain at large in Canada and Thailand.
Three grand jury indictments were unsealed today. In the first, a dozen defendants are charged with various crimes, including Racketeering Conspiracy to Conduct Enterprise Affairs (RICO), running an Illegal Gambling Business and Transmission of Wagering Information.
According to that indictment, the lead defendant, Sanders Bruce Segal, and others were charged with operating “Segal’s Lucky Lady Sports Book” – an illegal enterprise that connected bookies, sub-bookies and significant bettors with sports gambling websites located outside the United States, some of which were owned and controlled by members of the enterprise.
The other defendants are Stanley Samuel Penn, Petter Magnus Karlsson, David Greg Leppo, Pablo Ballestero Frech, Sydney Bruce Segal, Joseph Edward Spatafore, Minh Triet Dinh Nguyen, James Hang Tear, Ken Pheng Keo, Jason D. Taylor and Jeffrey Alan Burke.
A second indictment charges Ryan Richard Buchardt with Travel Act, Phone and Internet Use in Aid of Racketeering Enterprise; and the third indictment charges Robert Jay Zaben with Transmission of Wagering Information.
According to the indictments, the Lucky Lady Card Room is a licensed gambling establishment offering tightly regulated card games. The Lucky Lady provided a legitimate front for illegal bookmaking operations principally led by Sanders Segal, with the coordination and help of Stanley Samuel Penn, the owner of the Lucky Lady. Sydney Bruce Segal, Sanders’ son, was the manager of the “cage” at the Lucky Lady, and used his position to commingle cash generated from the card room’s lawful gambling operation with the proceeds from the unlawful sports betting.
The Segals and Penn depended upon the collaboration of international businessmen, Petter Magnus Karlsson, Pablo Ballestro Frech, and David Greg Leppo, to provide an avenue for United States customers to illegally place bets on sports gambling websites. Karlsson financed Segal’s Lucky Lady Sports Book and partnered with Leppo, who owned and operated several sports gambling websites hosted outside the United States. Karlsson also employed Frech to, among other things, manage bets placed by and through Sanders Segal and his betting customers on sports gambling websites. Karlsson and Leppo met personally with Segal and others in order to transfer cash generated by their illegal bookmaking operation and to coordinate their enterprise.
Segal’s Lucky Lady Sports Book relied on a network of bookies, including Minh Triet Dinh Nguyen, Ken Pheng Keo, and Sanders Segal himself, who operated out of the Lucky Lady. Bookie Jason D. Taylor took high-stakes bets from Joseph Edward Spatafore, and mailed illegal bookmaking proceeds to and from Sanders Segal, who connected Spatafore and other select clients with the websites provided by Karlsson, Frech, Leppo and others. Spatafore, a high-stakes bettor, was permitted by the enterprise to collect and place bets for other bettors, and was sometimes granted direct access to the international gambling websites used by the enterprise.
According to the indictment, sub-bookies James Hang Tear and Jeffrey Alan Burke each managed a “package” of customer accounts, recruited customers, paid off winning bets, collected on losing bets, and delivered payments to their managing bookies.
Segal’s Lucky Lady Sports Book recruited customers in the Southern District of California and elsewhere, provided them with betting odds, took their bets, and placed them on sports gambling websites. Bets were placed on the websites either through the bookies’ accounts or, for significant customers, through individual accounts that allowed bettors to directly wager for themselves. The enterprise also used “runners” to transport profits and proceeds. The indictment further alleges that the enterprise generated almost a million dollars in illegal bookmaking proceeds.
“By grafting onto legitimate businesses, organized criminals and shady bookies have too long shielded themselves from law enforcement scrutiny and hidden huge illegal bookmaking profits,” said U.S. Attorney Laura Duffy. “These indictments demonstrate the Department’s commitment to stemming the influence of racketeering activity in San Diego.”
“This case is a classic example of how a legitimate business can be infiltrated and used to facilitate criminal activity by members of a criminal enterprise,” said FBI Special Agent in Charge, Eric S. Birnbaum. “The FBI is committed to disrupting and dismantling criminal enterprises that seek to use legitimate businesses as a platform for their criminal activity.”
Two defendants were arraigned this afternoon before U.S. Magistrate Judge Nita L. Stormes, the remaining defendants who are in custody are expected to be arraigned tomorrow afternoon.
DEFENDANTS Case Number: 16CR1695-BEN
Sanders Bruce Segal
Stanley Samuel Penn
Petter Magnus Karlsson*
David Greg Leppo*
Pablo Ballestro Frech*
Sydney Bruce Segal
Joseph Edward Spatafore
Minh Triet Dinh Nguyen*
James Hang Tear
Ken Pheng Keo
Jason D. Taylor
Jeffrey Alan Burke
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
Ryan Richard Buchardt
SUMMARY OF CHARGES
Counts 1-7: Travel Act / Phone or Internet Use in Aid of Racketeering Activities, in violation of Title 18, United States Code, Section 1952
Maximum Penalties: 5 years in prison, 3 years supervised release, and a $250,000 fine
DEFENDANT Case Number: 16CR1697-BEN
Robert Jay Zaben*
Counts 1-5: 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
AGENCIES
Federal Bureau of Investigation
San Diego Police Department
Internal Revenue Service – Criminal Investigation
*Still at large
The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
El Cajon Man Sentenced to Life in Prison for Drug CrimesRead the Press Release
Assistant U. S. Attorney Jose Castillo (619) 546-6745 and Stephen Wong (619) 546-9464
NEWS RELEASE SUMMARY – July 26, 2016
SAN DIEGO – West Coast Crips gang member Randy Alton Graves was sentenced in federal court this morning to life in prison for multiple drug-related crimes.
The U.S. Attorney’s Office elected to seek an enhanced sentence based on his egregious conduct over decades. At the sentencing hearing, the court noted that Graves has more than a dozen felony and misdemeanor convictions from 1976 to 2012, ranging from voluntary manslaughter to gun crimes to multiple drug offenses. The enhancement raised the mandatory minimum sentence for Graves’ crimes to life in prison.
Graves was convicted by a federal jury on April 4, 2016 of conspiracy to distribute more than 50 grams of methamphetamine; conspiracy to distribute more than 1,000 kilograms of marijuana; and possession with intent to distribute more than 50 grams of methamphetamine. Following a five-day trial, the jury deliberated for about three hours before returning its verdict.
During sentencing, U.S. District Judge Dana Sabraw noted that he also considered Graves’ role in the murder of a government witness, sex trafficking, possession of firearms, and other instances of drug dealing in determining that a life sentence was appropriate - even without a mandatory minimum requirement.
According to evidence presented at trial, Graves sold methamphetamine to a confidential informant on four occasions between August and October of 2013. The government also played for the jury intercepted phone calls in which Graves recruited three men to travel to Lompoc, California, to unload a boat carrying 5,000 pounds of marijuana from Mexico. The government also presented evidence obtained from a search warrant executed on Graves’ residence which showed Graves in possession of 79 grams of methamphetamine found in Graves’ refrigerator and two loaded guns.
Graves was initially indicted in June 2014 with racketeering charges connected to the West Coast Crips criminal street gang. The racketeering activity alleged in that indictment included several homicides, drug, and sex trafficking crimes. Graves’ case was severed from the larger racketeering trial and proceeded to trial only on certain drug charges.
This case was prosecuted by Assistant U.S. Attorneys Jose Castillo and Stephen Wong.
This guilty verdict is the fruit of the collaborative work of the FBI’s East County Regional Gang Task Force and the Violent Crimes Gang Task Force, the San Diego Police Department’s gang and homicide units; the ATF; the El Cajon Police Department; the La Mesa Police Department; San Diego County Probation; the IRS; U.S. Postal Inspectors; the San Diego County Sheriff’s Department; and the California Highway Patrol.
This investigation was coordinated by an Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF program was created to consolidate and coordinate all law enforcement resources in this country's battle against major drug trafficking rings, drug kingpins, and money launderers.
DEFENDANT Case Number 14CR1288-DMS
Randy Alton Graves Age: 53 El Cajon, CA
SUMMARY OF CHARGES
Count One
Conspiracy to distribute methamphetamine – Title 21, U.S.C., Section 851
Count Two
Conspiracy to distribute marijuana – Title 21, U.S.C., Section 851
Count Three
Possession with the intent to distribute methamphetamine– Title 21, U.S.C., Section 851
Maximum penalty: Life in prison
AGENCIES
San Diego Police Department Gang and Homicide Units
East County Regional Gang Task Force
Violent Crimes Task Force - Gang Group
Task Force agencies include:
FBI
San Diego Police Department
ATF
El Cajon Police Department
La Mesa Police Department
San Diego County Probation
IRS Criminal Investigation
U.S. Postal Inspectors
San Diego County Sheriff’s Department
California Highway Patrol
West Coast Crips Street Gang Member Sentenced to Life in Prison for Racketeering Conspiracy Involving Murders, Sex Trafficking and RobberyRead the Press Release
Contact Assistant U.S. Attorneys Todd Robinson (619) 546-7994 and David Leshner (619) 546-7921
NEWS RELEASE SUMMARY – July 20, 2016
SAN DIEGO, CA – West Coast Crips gang member Wilbert Ross was sentenced in federal court today to life in prison for his role in a racketeering enterprise involving execution-style murders, a takeover robbery, witness intimidation and sex trafficking.
Ross is the first of four West Coast Crips members to be sentenced following conviction by a federal jury in March. The jury found defendants Ross, Terry Carry Hollins, Jermaine Gerald Cook and Marcus Anthony Foreman guilty of Conspiracy to Conduct Enterprise Affairs through a Pattern of Racketeering Activity at the conclusion of a five-week trial and about eight hours of deliberations. The jury also found Ross guilty of two counts of sex trafficking.
U.S. District Judge Dana Sabraw sentenced Ross to life on the RICO conspiracy count, 10 years for sex trafficking of a minor and 15 years for sex trafficking by force, fraud or coercion. The judge also ordered Ross to pay $42,803 in restitution resulting from multiple homicides.
Hollins is scheduled to be sentenced on Wednesday July 27 at 9:30 a.m.; Cook and Foreman are set for sentencing on August 26 at 1 p.m., all before U.S. District Judge Dana M. Sabraw,
The four convicted defendants were arrested and charged in 2014 as part of a larger investigation involving 36 other defendants. Thirty-four have pleaded guilty. One, Cleotha Young, went to trial in June 2015, was convicted by a jury and sentenced to 20 years in prison. The lead defendant, Randy Graves, was convicted by a jury on April 4, 2016, and is scheduled to be sentenced on July 26 at 9:30am.
“It’s a relief to know that this ruthless gang member will never again bring violence into San Diego neighborhoods,” said U.S. Attorney Laura Duffy. “This life sentence is a strong signal to gangs that you are not invincible, and you will be held accountable.”
“Today’s life sentence sends a strong message to all gang members who commit acts of violence and threaten the safety of our community,” said FBI Special Agent in Charge, Eric S. Birnbaum. “The FBI will continue to work tirelessly to dismantle violent street gangs that victimize our community.”
The federal racketeering statute known as “RICO” historically has been used to prosecute mobsters and organized crime, but federal prosecutors have been using the statute on street gangs in recent years because the gangs are increasingly acting as organized criminal enterprises.
During this trial, prosecutors set out to show the jury how the defendants worked together as a criminal enterprise to commit six murders, to use a 15-year-old girl and another female as prostitutes, and to commit robbery on behalf of the West Coast Crips.
The government called about 100 witnesses, including several street gang members, a shooting victim, friends and associates of the defendants, representatives from the Medical Examiner’s Office and dozens of San Diego Police Department homicide and gang detectives, police officers and criminalists.
The evidence presented by the government included court-authorized wiretap interceptions and recordings of telephone, cell phone and jailhouse conversations between the defendants and others, as well as cell phone videos of the defendants celebrating their West Coast Crips membership and discussing the crimes they were committing.
This case was prosecuted by Assistant U.S. Attorneys Todd Robinson, David Leshner, Jose Castillo and Stephen Wong.
These guilty verdicts are the fruit of the collaborative work of the FBI’s East County Regional Gang Task Force and the Violent Crimes Gang Task Force, the San Diego Police Department’s gang and homicide units; the ATF; the El Cajon Police Department; the La Mesa Police Department; San Diego County Probation; the IRS; U.S. Postal Inspectors; the San Diego County Sheriff’s Department; and the California Highway Patrol.
This investigation was coordinated by an Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF program was created to consolidate and coordinate all law enforcement resources in this country's
battle against major drug trafficking rings, drug kingpins, and money launderers.
DEFENDANTS
Case Number: 14mj1494
Wilbert Ross Age: 32 Chula Vista
Terry Carry Hollins Age: 33 San Diego
Jermaine Gerald Cook Age: 31 San Diego
Marcus Anthony Foreman Age: 28 San Diego
SUMMARY OF CHARGES
All Defendants:
Conspiracy to Conduct Enterprise Affairs Through a Pattern of Racketeering Activity, in violation of Title 18, U.S.C. Section 1962 (d)
Maximum Penalty, based on the underlying racketeering crimes: Up to life in prison.
Defendant Ross:
Sex Trafficking of a Minor, in violation of 18 USC 1591
Maximum Penalty: Life in prison
Sex Trafficking by Force, Fraud or Coercion, in violation of 18 USC 1591
Maximum Penalty: Life in prison
INVESTIGATING AGENCIES
San Diego Police Department Gang and Homicide Units
East County Regional Gang Task Force
Violent Crimes Task Force - Gang Group
Task Force agencies include:
FBI
San Diego Police Department
ATF
El Cajon Police Department
La Mesa Police Department
San Diego County Probation
IRS
U.S. Postal Inspectors
San Diego County Sheriff’s Department
California Highway Patrol.
Defendants Sentenced to More Than a Decade in Prison for Violent Hostage TakingRead the Press Release
Assistant U. S. Attorneys Seth Askins (619) 546-6692 and Steve Miller (619) 546-7938
NEWS RELEASE SUMMARY – July 18, 2016
SAN DIEGO – Three defendants have been sentenced for their roles in an alien harboring and hostage taking conspiracy involving two Mexican nationals, one of whom was severely beaten when the conspirators’ ransom demands were not met.
In late July 2015, the two victims were smuggled into the United States from Mexico and stashed at a hotel in El Centro, presumably to await further transportation to their ultimate destination within the United States.
While waiting at the hotel, the victims were discovered by defendant Robert Covarrubias, who transported them by foot to the home of co-defendant Xochitil Victoria Otero, where they were initially locked in a shed before being taken into the house. Once inside Otero’s residence, Covarrubias was joined by co-defendant David “Smokz” Chavez, and the two of them contacted the victims’ family and demanded money for their release.
At one point, Chavez and Covarrubias threatened the male victim with a firearm, forcing him to beg his mother to send money to the defendants for fear of being killed. When it became apparent that their plan was destined to fail, Otero drove Chavez, Covarrubias and the two victims to a remote location in Imperial Valley where Chavez and Covarrubias severely beat the male victim with a crowbar before releasing them. The male victim sustained serious injuries to his head, face and hands as a result of the beating. Fortunately, the victims were able to make contact with a farmworker in an adjacent field, who helped them contact law enforcement.
Chavez and Covarrubias pleaded guilty to hostage taking, in violation of 18 U.S.C. § 1203(a), and Otero pleaded guilty to Alien Harboring, in violation of 8 U.S.C. § 1324(a)(1)(A)(iii) and (v)(II). On May 31, 2016, Chavez was sentenced to 168 months (14 years) in prison, while Otero was sentenced to 40 months for her lesser role in the offense. Today, Covarrubias was sentenced to 144 months (12 years) in prison for his role in the offense. The sentences were imposed by U.S. District Judge John A. Houston. A hearing to determine restitution for the victims is set for August 29, 2016.
The successful federal prosecution of this violent crime was a collaborative effort by Homeland Security Investigations Imperial Valley Border Enforcement Task Force and the U.S. Attorney’s Office. The case was prosecuted by Assistant U.S. Attorneys Seth Askins and Steve Miller.
DEFENDANTS Case Number 15cr2097-JAH
David Chavez, aka “Smokz” Age: 29 Calexico, CA
Robert Covarrubias Age: 20 El Centro, CA
Xochitil Victoria Otero Age: 24 El Centro, CA
SUMMARY OF CHARGES
Conspiracy to Take a Hostage and Hostage Taking – Title 18, U.S.C., Section 1203(a)
Maximum penalty: Life imprisonment and $250,000 fine
Alien Harboring – Title 8, U.S.C., Section 1324(a)(1)(A)(iii) and (v)(II)
Maximum penalty: 10 years’ imprisonment and $250,000 fine
AGENCY
Homeland Security Investigations Imperial Valley Border Enforcement Task Force
Federal Jury Convicts Two North Park Gang Members of Racketeering Conspiracy Involving Sex Trafficking of Minors and AdultsRead the Press Release
Assistant U. S. Attorney Alessandra Serano (619) 546-8104 or Joseph Orabona (619) 546-7951
NEWS RELEASE SUMMARY – July 14, 2016
SAN DIEGO, CA – Two members of the Black Mob/Skanless Enterprise which consisted of two North Park-based criminal street gangs were convicted by a federal jury yesterday afternoon of participating in a racketeering enterprise involving sex trafficking of minors and adults as well as robbery and drug sales.
The jury found defendants Robert “Pimpsy” Banks III and Tony “Lil’ Play Doh” Brown guilty of Conspiracy to Conduct Enterprise Affairs Through a Pattern of Racketeering Activity at the conclusion of a two plus week trial and about ten hours of deliberations. The jury also found both Brown and Banks guilty of three counts of sex trafficking of minors and one count of transportation of a minor for prostitution. U.S. District Judge John A. Houston set sentencing for October 3, 2016 at 8:30 a.m. The defendants face up to twenty years in prison for each count.
The two convicted defendants were arrested and charged in 2014 as part of a larger investigation involving 22 other defendants. Twenty-two have pleaded guilty.
“Sex trafficking is a crime that causes devastating long-term effects for victims,” said U.S. Attorney Laura Duffy. “Because of today’s verdicts, and the numerous guilty pleas that preceded them, these gang members will no longer be able to subject women and girls to the pain, humiliation and suffering associated with sex trafficking. Unfortunately, more gangs are expanding from traditional pursuits like drug dealing into this lucrative business. These gangsters are preying upon our youth, and we are using every law enforcement resource to keep our children and our communities safe from these predators.”
The federal racketeering statute known as “RICO” historically has been used to prosecute mobsters and organized crime, but federal prosecutors have been using the statute on street gangs in recent years because the gangs are increasingly acting as organized criminal enterprises especially in sex trafficking and prostitution.
During this trial, prosecutors set out to show the jury how the defendants worked together as a criminal enterprise to sex traffic multiple women including four 15 and 16 year old minors, and to commit drug sales and a robbery on behalf of the Black Mob/Skanless Enterprise.
This case was prosecuted by Assistant U.S. Attorneys Alessandra P. Serano and Joseph J.M. Orabona. These guilty verdicts are the fruit of the collaborative work by the San Diego Police Department and the FBI’s Innocence Lost Task Force.
DEFENDANTS Case Number: 13CR4510-JAH
Robert “Pimpsy” Banks III Age: 33 San Diego, CA
Tony “Lil Play Doh” Brown Age: 33 Tolleson, Arizona
SUMMARY OF CHARGES
Conspiracy to Conduct Enterprise Affairs Through a Pattern of Racketeering Activity, in violation of Title 18, U.S.C. Section 1962 (d) – Maximum Penalties: 20 years in Prison
Sex Trafficking of Children - Maximum Penalties: 20 years in Prison, Sex Offender Registration
Transportation of a Minor for Prostitution - Maximum Penalties: 20 years in Prison, Sex Offender Registration
INVESTIGATING AGENCIES
San Diego Police Department
Federal Bureau of Investigation
Officials Take Down Drug Trafficking Organization that Used Internal Body Carriers to Smuggle Drugs into the United StatesRead the Press Release
Assistant U.S. Attorney Stephen H. Wong (619) 546-9464
NEWS RELEASE SUMMARY – June 24, 2016
EL CENTRO – Eleven people have been charged with drug-trafficking and gun crimes in two indictments unsealed late yesterday. The drug trafficking organization used internal body carriers to smuggle drugs through the Calexico, California Ports of Entry into the United States and on to El Centro, San Diego, and Los Angeles.
Following an eleven-month investigation that concluded yesterday afternoon, all 11 defendants were in custody and seven firearms were taken off the streets. A coalition of federal agencies also conducted searches at six locations – including sites in Brawley and Calipatria, California. Many of these locations are homes where drugs and guns were stored and sold.
The two indictments describe two separate but overlapping conspiracies. According to indictments and other court documents, most defendants were drug traffickers selling methamphetamine, heroin, and PCP. Some were felons in possession of firearms and had ties to criminal street gangs.
“We are absolutely committed to making Imperial Valley neighborhoods safe from drug traffickers,” said U.S. Attorney Laura Duffy. “This operation successfully removed guns and drugs from the streets and intercepted hard-to-get smugglers who use the insides of their bodies as vessels for dangerous contraband.”
“HSI is committed to working jointly with its law enforcement partners to pursue and dismantle drug smuggling networks that distribute narcotics on the streets and spread violence in our communities,” said Dave Shaw, special agent in charge for ICE Homeland Security Investigations in San Diego. “This investigation uncovered a gang-affiliated drug smuggling ring extending from Mexicali to the Imperial and Riverside counties. I commend the outstanding work by HSI and our law enforcement partners at the U.S. Border Patrol’s El Centro Sector for the joint effort during the enforcement operation.”
DEFENDANTS Criminal Case No: 16-CR-01283-MMA
Name
Age
Hometown
Emanuel Nunez,
aka “Meno”
35
El Centro, CA
Monica Aguirre
36
El Centro, CA
Jose Juan Valles,
aka “Nacho”
aka “Freddy”
49
El Centro, CA
David Valencia,
aka “Woody”
43
National City, CA
Raymond Ferrel,
aka “Mochis”
52
Brawley, CA
Edward Lucero,
aka “Gato”
36
Calexico, CA
Blanca Aguirre
37
El Centro, CA
Rayshan Thomas,
aka “Bones”
44
Brawley, CA
SUMMARY OF CHARGES
Conspiracy to Import Controlled Substances (Title 21, U.S.C., Secs. 952, 960, 963); Conspiracy to Distribute Methamphetamine (Title 21, U.S.C., Secs. 841(a)(1) and 846); Conspiracy to Distribute Heroin (Title 21, U.S.C., Secs. 841(a)(1) and 846); Felon in Possession of a Firearm (Title 18, U.S.C., Sec 922(g)(1)). Carrying a Firearm During and in Relation to a Drug Trafficking Crime (Title 18, U.S.C., Sec 924(c))
Maximum Penalties: Life in prison with a mandatory minimum sentence of 10 years and a 10 million dollar fine.
DEFENDANTS Criminal Case No: 16-CR-01284-MMA
Name
Age
Hometown
Rayshan Thomas,
aka “Bones”
44
Brawley, CA
Melinda White
49
El Cajon, CA
Devernie Ford
Aka “Dolla”
56
Calipatria, CA
Damian Partida
31
Brawley, CA
SUMMARY OF CHARGES
Conspiracy to Distribute Methamphetamine (Title 21, U.S.C., Secs. 841(a)(1) and 846); Conspiracy to Distribute Phencyclidine ((PCP) (Title 21, U.S.C., Secs. 841(a)(1) and 846); Felon in Possession of a Firearm (Title 18, U.S.C., Sec 922(g)(1))
Maximum Penalties: Life in prison with a mandatory minimum sentence of 5 years and a 10 million dollar fine.
AGENCIES
Homeland Security Investigations
Brawley Police Department
Customs and Border Protection
United States Border Patrol
Bureau of Alcohol, Tobacco, Firearms and Explosives
United States Marshal Service
El Cajon Police Department
California Highway Patrol
El Centro Police Department
Fontana Police Department
Imperial County Narcotics Task Force
*An indictment or complaint itself is not evidence that the defendants committed the crimes charged. The defendants are presumed innocent until the Government meets its burden in court of proving guilt beyond a reasonable doubt.
Former Supervisory Contracting Officer Pleads Guilty to Accepting Bribes from Foreign Defense ContractorRead the Press Release
A former Department of Defense (DoD) supervisory contracting officer pleaded guilty today to charges that he accepted bribes from the owner of the foreign defense contractor at the center of a massive bribery and fraud scandal.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Laura E. Duffy of the Southern District of California, Acting Director Dermot O’Reilly of the DoD’s Defense Criminal Investigative Service (DCIS) and Director Andrew Traver of the Naval Criminal Investigative Service (NCIS) made the announcement.
Paul Simpkins, 61, of Haymarket, Virginia, was a senior DoD contracting official who supervised contracting officers responsible for awarding and administering U.S. Navy contracts. Sentencing was set for Sept. 9, 2016.
According to admissions made in connection with his plea, from approximately May 2006 until September 2012, Leonard Glenn Francis, owner of Singapore-based Glenn Defense Marine Asia (GDMA), provided cash, travel expenses and the services of prostitutes in return for Simpkins’s efforts to steer contracts to GDMA and intervene on GDMA’s behalf in contracting disputes with the U.S. Navy. Simpkins admitted that during the years-long scheme, Francis provided him with hundreds of thousands of dollars through wire transfers to a bank account in Japan controlled by Simpkins’s former wife. After Francis transferred the funds to Simpkins’s wife’s account, Simpkins caused payments to be remitted to a U.S. bank account held in his own name.
According to his plea, Simpkins admitted that, in return, he used his influence within the U.S. Navy to benefit GDMA. Among other things, Simpkins admitted that he extended GDMA’s contract after a subordinate recommended the contract not be extended due to high costs; instructed U.S. Navy officials in Hong Kong to discontinue using meters that ensured proper accounting of the amount of waste that GDMA removed from U.S. Navy ships to ensure that no overbilling occurred; and instructed a U.S. Navy official to ignore invoices that GDMA submitted after Francis complained that U.S. Navy personnel were asking questions.
Including Simpkins, 14 individuals have been charged in connection with this scheme; of those, 11 have pleaded guilty, including Rear Admiral Robert Gilbeau, Captain (Select) Michael Misiewicz, Captain Daniel Dusek, Lieutenant Commander Todd Malaki, NCIS Special Agent John Beliveau, Commander Jose Luis Sanchez and Petty Officer First Class Dan Layug. 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 18, 2016, Alex Wisidagama, a former GDMA employee, was sentenced to 63 months in prison and to pay $34.8 million in restitution to the Navy; 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 forfeit $95,000 in proceeds for the scheme. Francis and Ed Aruffo, a former GDMA employee, as well as GDMA, the corporate entity, have pleaded guilty and await sentencing. Retired Captain Michael Brooks, Commander Bobby Pitts and Lieutenant Commander Gentry Debord were charged by a federal grand jury on May 25, 2016, and their cases remain pending.
The ongoing investigation is being conducted by NCIS, DCIS and DCAA. 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.
Those 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.
Former Supervisory Contracting Officer Pleads Guilty to Accepting Bribes from Foreign Defense ContractorRead the Press Release
Assistant U.S. Attorneys Mark W. Pletcher (619) 546-9714 and Patrick Hovakimian (619) 546-9718
NEWS RELEASE SUMMARY – June 23, 2016
SAN DIEGO, CA – Former Department of Defense supervisory contracting officer Paul Simpkins pleaded guilty today to charges that he accepted bribes from Leonard Glenn Francis, the foreign defense contractor at the center of a massive bribery and fraud scandal.
Paul Simpkins, 62, of Haymarket, Virginia, supervised contracting officers responsible for awarding and administering U.S. Navy contracts. According to admissions made in his plea agreement, from approximately May 2006 until September 2012, Francis provided cash, travel expenses and the services of prostitutes in return for Simpkins’s efforts to steer contracts to his company, Glenn Defense Marine Asia (GDMA), and intervene on GDMA’s behalf in contracting disputes with the U.S. Navy. Simpkins admitted that during the years-long scheme, Francis provided him with hundreds of thousands of dollars through wire transfers to a bank account controlled by Simpkins’s former wife.
Sentencing is scheduled for September 9, 2016 at 9 a.m. before Judge Janis L. Sammartino.
Including Simpkins, 14 individuals have been charged in connection with this scheme; of those, 11 have pleaded guilty, including Rear Admiral Robert Gilbeau, Captain (Select) Michael Misiewicz, Captain Daniel Dusek, Lieutenant Commander Todd Malaki, NCIS Special Agent John Beliveau, Commander Jose Luis Sanchez and Petty Officer First Class Dan Layug.
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 18, 2016, Alex Wisidagama, a former GDMA employee, was sentenced to 63 months in prison and to pay $34.8 million in restitution to the Navy; 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 forfeit $95,000 in proceeds for the scheme.
Francis and Ed Aruffo, a former GDMA employee, as well as GDMA, the corporate entity, have pleaded guilty and await sentencing. Retired Captain Michael Brooks, Commander Bobby Pitts and Lieutenant Commander Gentry Debord were charged by a federal grand jury on May 25, 2016, and their cases remain pending.
The investigation is being conducted by NCIS, DCIS and DCAA. Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California are prosecuting the case along with Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section.
Those 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.
DEFENDANT Case Number: 15-CR-0530
Former Department of Defense supervisory contracting officer Paul Simpkins Age 62
SUMMARY OF CHARGES
Conspiracy to Commit Bribery, in violation of 18 U.S.C. § 371
Maximum Penalty: 5 years in prison, $250,000 fine
Bribery, in violation of 18 U.S.C. § 201 (b) (2) (A) and (C)
Maximum Penalty: 5 years in prison, $250,000 fine
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
Defense Contract Audit Agency
Long Beach Fireman charged with Illegally Dumping Sewage from Recreational VehiclesRead the Press Release
Assistant U.S. Attorney Melanie K. Pierson (619) 546-7976
NEWS RELEASE SUMMARY – June 21, 2016
SAN DIEGO – A Long Beach fireman and his firm were charged today in an eight count indictment with the illegal disposal of sewage underground, in violation of the Safe Drinking Water Act.
Kyle Vestermark and his firm, Dunes Edge Storage, allegedly discharged sewage illegally from recreational vehicles (RVs) stored at Dunes Edge Storage location in Brawley, California, as well as another location known as Dunes Toy Storage in Holtville, California, without a permit during the period from October of 2011 through April of 2015.
According to the indictment, Vestermark obtained a permit in 2004 for a 10,000 gallon holding tank for the RV sewage at the Dunes Edge location from the Imperial County Public Health Department which specifically prohibited the installation of underground leach lines (an issue which Vestermark had raised during the permitting process). The indictment further alleges that Vestermark also obtained a Conditional Use Permit from the Imperial County Planning Department in 2005 from the Imperial County Planning Board for the Dunes Toy Storage location in Holtville, which also specifically prohibited the installation of underground leach lines for the disposal of the RV sewage.
The permits required Vestermark to hire a septage firm to pump out the RV sewage from the holding tanks and dispose of it at a wastewater treatment plant. In spite of the specific prohibitions, it is alleged that Vestermark used heavy equipment in 2005 and 2006 to install underground leach lines at both locations which would permit the RV sewage to leach out underground for disposal. According to the indictment, the leach lines were removed in 2015 after Vestermark’s actions were discovered by Imperial County authorities. The indictment also seeks the forfeiture of approximately $380,000, alleged to be the proceeds of the offenses.
*The charges and allegations contained in the indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.
DEFENDANTS
Dune Edge Storage, LLC Incorporated: 2006 Brawley, California
Kyle Vestermark Age: 46 Long Beach, California
SUMMARY OF CHARGES
Count 1
Conspiracy to Illegally Discharge Sewage – Title 18, U.S.C., Section 371
Maximum penalty: Five years in prison and $250,000 fine ($500,000 for a corporation)
Counts 2-8
Unlawful Injection of Sewage – Title 42, U.S.C., Section 300h-2(b)(2)
Maximum Penalty – 3 years in prison and a $250,000 fine
AGENCY
U.S. Environmental Protection Agency, Criminal Investigation Division; Bureau of Land Management, Office of Law Enforcement
U.S. Navy Admiral Pleads Guilty to 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 – June 9, 2016
SAN DIEGO - U.S. Navy Rear Admiral Robert Gilbeau pleaded guilty today in federal court to felony charges that he lied to federal investigators to conceal his illicit years-long relationship with Leonard Glenn Francis, the foreign defense contractor at the center of a massive bribery and fraud scandal.
Admiral Gilbeau is the highest-ranking U.S. Navy officer charged in the investigation so far, and is believed to be the first active-duty Naval flag officer ever charged in federal criminal court.
In his plea agreement, Admiral Gilbeau admitted that he lied when he told agents from Defense Criminal Investigative Service and Naval Criminal Investigative Service that he had never received any gifts from Leonard Glenn Francis, owner of Singapore-based Glenn Defense Marine Asia. Francis has pleaded guilty to plying scores of other U.S. Navy officials with gifts such as luxury travel and meals, cash and electronics and and parties and prostitutes.
According to his plea agreement, Admiral Gilbeau lied when he told investigators that he “always paid for half of the dinner” when he and Francis met about three times a year. When Gilbeau 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.
Admiral Gilbeau is scheduled to be sentenced on Aug. 26 at 9 a.m. before U.S. District Judge Janis L. Sammartino. At today’s hearing, U.S. Magistrate Judge William V. Gallo set bond at $75,000 secured by real property.
Most of the other Navy officials charged in this case so far have faced allegations that in return for cash, lavish entertainment and travel expenses, the services of prostitutes and other illicit gifts, they brazenly used their public offices to heap benefit after benefit upon Francis and GDMA, including passing on classified U.S. Navy information to advance GDMA’s business interests and advocating for GDMA at every turn.
Gilbeau was charged via information with deliberately and knowingly making false statements, from November 2012 to October 2013, about the nature of his relationship with Francis and his receipt of things of value over the course of years from Francis.
According to charging documents, 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. 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.
After he was promoted to admiral, Gilbeau assumed command in August 2010 of the Defense Contract Management Agency International, where he was responsible for the global administration of the Defense Department’s most critical contracts performed outside the United States.
“Of those who wear our nation’s uniform in the service of our country, only a select few have been honored to hold the rank of Admiral – and not a single one is above the law,” said U.S. Attorney Laura Duffy. “Admiral Gilbeau lied to federal agents investigating corruption and fraud, and then tried to cover up his deception by destroying documents and files. Whether the evidence leads us to a civilian, to an enlisted service member or to an admiral, as this investigation expands we will continue to hold responsible all those who lied or who corruptly betrayed their public duties for personal gain.”
“As a flag level officer in the U.S. Navy, Admiral Gilbeau understood his duty to be honest with the federal agents investigating this sprawling bribery scheme,” said Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division. “By destroying documents and lying about the gifts that he received, Admiral Gilbeau broke the law and dishonored his uniform.”
“The guilty plea of Rear Admiral Robert Gilbeau is an unfortunate example of a dishonorable naval flag officer who has betrayed his shipmates, the U.S. Navy and his country,” said Dermot F. O’Reilly, Acting Director, Defense Criminal Investigative Service. “Admiral Gilbeau's guilty plea should be a resounding message that DCIS, Naval Criminal Investigative Service, and the Department of Justice will continue to investigate and seek to prosecute any individual, regardless of position or rank, who would put our mission of 'Protecting America's Warfighters' at risk.”
“This investigation demonstrates that corruption, conspiracy, and the release of sensitive information puts Department of the Navy personnel and resources at risk,” said Special Agent Andrew Traver, Director of the Naval Criminal Investigative Service, “and in concert with our partner agencies, NCIS remains resolved to follow the evidence, to help hold accountable those who make personal reward a higher priority than professional responsibility.”
Anita Bales, director of Defense Contract Audit Agency, said, “DCAA is proud to stand in partnership with our law enforcement allies and make a meaningful contribution to the outcome in this egregious case. It is very disappointing that this high-ranking individual lost sight of his responsibility as a government official. We look forward to continuing our support of this significant investigation.”
So far, a total of 14 people have been charged in connection with the case.
Of those, 11 are current or former U.S. Navy officials, including Admiral Gilbeau; Captain (ret) Michael Brooks; Commander Bobby Pitts; Lt. Commander Gentry Debord; Captain Daniel Dusek; Captain (select) Michael Misiewicz; Lt. Commander Todd Malaki; NCIS Special Agent John Beliveau; Commander Jose Luis Sanchez; Petty Officer First Class Daniel Layug; and Paul Simpkins, a former DoD civilian employee.
Gilbeau, Dusek, Misiewicz, Malaki, Beliveau, Sanchez and Layug have pleaded guilty. On January 21, 2016, Layug was sentenced to 27 months in prison and a $15,000 fine; on January 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.
Brooks, Pitts and Debord were charged last week and their cases are pending; Simpkins awaits trial.
Also charged are three GDMA executives – Francis, Alex Wisidagama and Ed Aruffo. All three 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.
GDMA, the corporate entity, was also charged and has pleaded guilty.
NCIS, DCIS and DCAA are conducting the 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.
Those 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.
DEFENDANT Case Number: 16cr1313-JLS
U.S. Navy Rear Admiral Robert Gilbeau Age 55 Burke, Virginia
SUMMARY OF CHARGES
False Statements, in violation of 18 U.S.C. § 1001
Maximum Penalty: 5 years in prison
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
Defense Contract Audit Agency
U.S. Navy Admiral Pleads Guilty to 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 pleaded guilty today in federal court to charges that he lied to federal investigators to conceal his illicit years-long relationship with Leonard Glenn Francis, owner of Glenn Defense Marine Asia (GDMA), the foreign defense contractor at the center of a massive bribery and fraud scandal.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Laura E. Duffy 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.
Gilbeau, 55, of Burke, Virginia, pleaded guilty to one count of making a false statement. He was charged by information today and is the highest-ranking U.S. Navy officer to be charged in the investigation so far. Gilbeau is scheduled to be sentenced on Aug. 26, 2016, before U.S. District Judge Janis L. Sammartino of the Southern District of California.
In his plea agreement, Gilbeau admitted that he lied when he told agents from DCIS and NCIS that he had never received any gifts from Francis, the owner of Singapore-based GDMA. 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.
According to his plea, 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.
“As a flag level officer in the U.S. Navy, Admiral Gilbeau understood his duty to be honest with the federal agents investigating this sprawling bribery scheme,” said Assistant Attorney General Caldwell. “By destroying documents and lying about the gifts that he received, Admiral Gilbeau broke the law and dishonored his uniform.”
“Of those who wear our nation’s uniform in the service of our country, only a select few have been honored to hold the rank of Admiral – and not a single one is above the law,” said U.S. Attorney Laura Duffy. “Admiral Gilbeau lied to federal agents investigating corruption and fraud, and then tried to cover up his deception by destroying documents and files. Whether the evidence leads us to a civilian, to an enlisted service member or to an admiral, as this investigation expands we will continue to hold responsible all those who lied or who corruptly betrayed their public duties for personal gain.”
“The guilty plea of Rear Admiral Robert Gilbeau is an unfortunate example of a dishonorable naval flag officer who has betrayed his shipmates, the U.S. Navy and his country,” said Acting Director O’Reilly. “Admiral Gilbeau's guilty plea should be a resounding message that DCIS, Naval Criminal Investigative Service and the Department of Justice will continue to investigate and seek to prosecute any individual, regardless of position or rank, who would put our mission of ‘Protecting America’s Warfighters’ at risk.”
“This investigation demonstrates that corruption, conspiracy and the release of sensitive information puts Department of the Navy personnel and resources at risk,” said Director Traver. “And in concert with our partner agencies, NCIS remains resolved to follow the evidence, to help hold accountable those who make personal reward a higher priority than professional responsibility.”
“DCAA is proud to stand in partnership with our law enforcement allies and make a meaningful contribution to the outcome in this egregious case,” said Director Bales. “It is very disappointing that this high-ranking individual lost sight of his responsibility as a government official. We look forward to continuing our support of this significant investigation.”
Including Gilbeau, 14 individuals have been charged in connection with this scheme; of those, nine have pleaded guilty, including U.S. Navy Captain (Select) Michael Misiewicz, U.S. Navy Capt. Daniel Dusek, Lieutenant Commander Todd Malaki, NCIS Special Agent John Beliveau, Commander Jose Luis Sanchez and U.S. Navy Petty Officer First Class Dan Layug. Former Department of Defense Senior Executive Paul Simpkins awaits trial. 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 18, 2016, Alex Wisidagama, a former GDMA employee, was sentenced to 63 months and to pay $34.8 million in restitution to the Navy; 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 forfeit $95,000 in proceeds for the scheme. Retired Navy Captain Michael Brooks, Commander Bobby Pitts and Lieutenant Commander Gentry Debord were charged by a federal grand jury on May 25, 2016, and their cases remain pending. GDMA, the corporate entity, was also charged and has pleaded guilty. Francis and Ed Aruffo, a former GDMA employee, have both pleaded guilty and await sentencing.
NCIS, DCIS and DCAA are conducting the investigation. 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.
Those 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.
San Diego’s Harper Construction Pays $5.4 Million to Resolve Allegations of Defrauding the United StatesRead the Press Release
Assistant U.S. Attorney Dylan M. Aste (619) 546-7621
NEWS RELEASE SUMMARY – June 1, 2016
SAN DIEGO – Harper Construction Company, Inc. has paid $5.4 million to the United States to resolve allegations that it fraudulently billed the government for work on multiple projects on military bases. It was alleged that Harper knowingly used sham small disadvantaged businesses and then falsely certified to the government that it used legitimate small disadvantaged businesses.
Harper is a large, privately-held general contractor headquartered in San Diego. Harper earns a substantial portion of its revenue through government contracting on construction projects across the country.
The settlement involves four government contracts to construct facilities at Camp Pendleton and Camp Lejeune. The contracts required Harper to subcontract a certain percentage of work to small disadvantaged businesses. Such requirements arise from measures intended to ensure that a fair proportion of federal contract and subcontract dollars are awarded to small businesses. It was alleged that Harper claimed it met this requirement when, in fact, it subcontracted with sham small disadvantaged businesses. Also, Harper allegedly required the sham small businesses to pass through all of their work to an affiliated large business, Frazier Masonry Corporation.
This settlement resolves a False Claims Act lawsuit filed by Rickey Howard, a former employee of Harper subcontractor Frazier Masonry Corporation. The whistleblower, or qui tam, provisions of the False Claims Act permit the whistleblower (or relator) to recover a portion of the proceeds obtained by the government. As part of today’s resolution, Mr. Howard will receive $1,485,000.
“This type of fraud siphons taxpayer dollars and takes away opportunities for legitimate small businesses for which this money was set aside,” said U.S. Attorney Duffy. “Whistleblowers are essential in our efforts to recover taxpayer dollars and combat fraud. We commend the whistleblower for coming forward and making the United States aware of this alleged fraud, and we welcome others who are aware of fraudulent conduct to also blow the whistle on fraudsters.”
“DCIS and its investigative partners work diligently to expose corrupt contractors that manipulate or circumvent Federal contracting requirements,” stated Special Agent in Charge John F. Khin, Defense Criminal Investigative Service (DCIS), Southeast Field Office. “DCIS’ earlier investigation of the subcontractors involved in this matter resulted in both criminal and civil actions. We applaud efforts by concerned citizens and relators to assist our investigative efforts, and help the Government hold companies accountable for undermining the integrity of our contracting system.”
This case is captioned United States ex rel. Howard v. Harper Constr. Co. Inc., et al., Case No. 3:15-CV-02910-H (KSC) (S.D. Cal.). In conjunction with an earlier settlement with co-defendants FMC; F-Y, Inc.; CTI Concrete & Masonry, Inc.; Masonry Technology, Inc.; Masonry Works, Inc.; Russell Frazier; and Robert Yowell (United States ex rel. Howard v. Harper Constr. Co. Inc., et al., Case No. 7:12-CV-215-D (E.D.N.C.)), the United States has recovered over $7,000,000 in this matter.
This matter was handled by Assistant U.S. Attorney Dylan M. Aste of the Affirmative Civil Enforcement Unit of the U.S. Attorney’s Office for the Southern District of California, along with the Commercial Litigation Branch, Fraud Section, Department of Justice and the Defense Criminal Investigative Service.
Former LAPD Officer Pleads Guilty, Admits Trying to Smuggle Mexican Citizen in Spare Tire Well of his CarRead the Press Release
Assistant U.S. Attorney Michael Lasater (619) 546-7462 or Benjamin Katz (619) 546-9604
NEWS RELEASE SUMMARY – June 1, 2016
SAN DIEGO – Former Los Angeles police Officer Carlos Curiel Quezada, Jr., pleaded guilty in federal court today on charges that he attempted to smuggle a Mexican citizen into the United States in the spare tire well of his car at the Otay Mesa border crossing in March of 2015.
His girlfriend, Angelica Godinez, pleaded guilty to lying on an application for court appointed counsel. Both are scheduled to be sentenced on August 26, 2016, at 8:30 a.m. before U.S. District Judge Gonzalo Curiel.
According to court documents, Quezada drove his 2014 Nissan Juke, with Godinez as the front seat passenger, into the United States through the Otay Mesa Port of Entry on March 14, 2015, at about 6:30 p.m. They presented their U.S. passports and told a Customs and Border Protection Officer they had nothing to declare. The officer decided to refer them aside for a more intensive inspection.
During the inspection, officers examined the car with the Z-Portal, a non-intrusive imaging device similar to an X-ray, and detected something unusual in the rear cargo area of the vehicle. Antanasio Perez Avalos, a 26-year-old Mexican national, was found in a compartment in the spare-tire area.
DEFENDANTS Criminal Case Number 15cr1205GPC
Carlos Curiel Quezada Jr. Age: 34 Los Angeles, CA
Angelica Godinez Age: 31 Los Angeles, CA
SUMMARY OF CHARGES
Bringing in Illegal Aliens without Presentation – Title 8 United States Code Sec. 1324(a)(2)(B)(iii)
Maximum penalty: 10 years’ imprisonment and $250,000 fine
AGENCY
U.S. Customs and Border Protection
Three Navy Officers Charged in Expanding Bribery and Fraud SchemeRead the Press Release
Three current and former Navy officers were charged in documents unsealed today for their roles in a massive bribery and fraud scheme involving a Navy contractor.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Laura E. Duffy of the Southern District of California, Acting Director Dermot O’Reilly of the Department of Defense’s 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.
Retired Navy Captain Michael Brooks, 57, of Fairfax Station, Virginia; Commander Bobby Pitts, 47, of Chesapeake, Virginia; and Lieutenant Commander Gentry Debord, 47, who is based in Singapore, were charged on May 25, 2016, in the Southern District of California. Brooks and Debord were each charged with one count of conspiracy to commit bribery and Pitts was charged with one count of conspiracy to defraud the United States and two counts of obstruction of justice. All of the charges relate to the defendants’ interactions with Leonard Francis, the former CEO of Glenn Defense Marine Asia (GDMA), a defense contracting firm based in Singapore. Brooks and Pitts made their initial appearances today in the U.S. District Court for the Eastern District of Virginia; Debord appeared in U.S. District Court for the Southern District of California. Brooks was allowed to post a $50,000 bond; Pitts was granted a $5,000 bond, ordered to be subject to electronic monitoring and to appear in the Southern District of California on June 10; and Debord was granted a $40,000 bond secured by real property. Debord is scheduled to appear for a preliminary hearing before U.S. Magistrate Judge David Bartick of the Southern District of California on June 9, 2016.
According to the indictment, from June 2006 to July 2008, Brooks served as the U.S. Naval Attaché at the U.S. Embassy in Manila, Philippines. The indictment alleges that in exchange for travel and entertainment expenses, hotel rooms and the services of prostitutes, Brooks used his office to benefit GDMA and Francis, including securinge the quarterly diplomatic clearances for GDMA vessels, which allowed GDMA vessels to transit into and out of the Philippines under the diplomatic clearance of the U.S. Embassy; limited the amount of custom fees and taxes that GDMA was required to pay in the Philippines; and enabled GDMA to avoid inspection of any quantity or type of cargo that it transported. The indictment also alleges that Brooks provided Francis with sensitive Navy information, including billing information belonging to a GDMA competitor and Navy ship schedules.
According to the indictment, from August 2009 to May 2011, Pitts was the Officer in Charge of the Navy’s Fleet Industrial Supply Command (FISC), which was charged with meeting the logistical needs of the U.S. Navy’s Seventh Fleet. The indictment alleges that in exchange for entertainment, meals and the services of a prostitute, Pitts used his position with FISC to interfere with NCIS investigations into GDMA. Pitts allegedly provided Francis with a hard copy of an NCIS report detailing an investigation into GDMA for contract fraud marked “for official use only.” According to the indictment, the report detailed NCIS’ investigative steps and witnesses that NCIS had interviewed. The indictment further alleges that in November 2010, Pitts forwarded to a GDMA employee an internal Navy email discussing details of FISC’s efforts to oversee GDMA’s contracts with the U.S. Navy.
According to the criminal complaint, from November 2007 to August 2013, Debord served in several logistical and supply positions in the Western Pacific. In exchange for cash, hotel stays and the services of prostitutes, Debord allegedly provided Francis with inside Navy information and documents, including information about competitors’ bids and information about an investigation into GDMA billing practices. In an attempt to conceal the true nature of his relationship with Francis, Debord allegedly referred to prostitutes as “cheesecake” or “bodyguards.” The complaint also alleges that Debord schemed with Francis to defraud the Navy through the submission and approval of inflated invoices.
Including those charged yesterday, 13 individuals have been charged in connection with this scheme; of those, nine have pleaded guilty, including U.S. Navy Captain (Select) Michael Misiewicz, U.S. Navy Capt. Daniel Dusek, Lieutenant Commander Todd Malaki, NCIS Special Agent John Beliveau, Commander Jose Luis Sanchez and U.S. Navy Petty Officer First Class Dan Layug. Former Department of Defense Senior Executive Paul Simpkins awaits trial. 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 18, 2016, Alex Wisidagama, a former GDMA employee, was sentenced to 63 months and to pay $34.8 million in restitution to the Navy; 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 forfeit $95,000 in proceeds for the scheme.
The NCIS, DCIS and DCAA are conducting the ongoing investigation. Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mark W. Pletcher of the Southern District of California are prosecuting the case.
The details contained in the charging documents are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Those 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.
Three Current and Former Navy Officers Charged in Expanding Bribery and Fraud ProbeRead the Press Release
Assistant U.S. Attorneys Mark W. Pletcher (619) 546-9714 and Patrick Hovakimian (619) 546-9718
NEWS RELEASE SUMMARY – May 27, 2016
SAN DIEGO, CA – Three current and former U.S. Navy officers appeared in federal court today to face charges that they secretly worked on behalf of foreign defense contractor Leonard Glenn Francis to advance the interests of his company, including instances in which a highly influential captain allowed Francis to ghostwrite official Navy documents and correspondence and submit them as his own.
In exchange, Francis plied the now-retired Captain Michael Brooks, 57, of Fairfax Station, Virginia, with prostitutes, luxury travel, a days-long party in a presidential suite and other gifts. Also charged this week in the massive bribery and fraud scheme were Commander Bobby Pitts, 47, of Chesapeake, Virginia; and Lieutenant Commander Gentry Debord, 47, who is based in Singapore.
The charging documents allege that in return for lavish entertainment and travel expenses, the services of prostitutes and other illicit gifts, the defendants brazenly used their public offices to foist benefit after benefit upon Francis and GDMA, including passing on sensitive, internal U.S. Navy information to advance GDMA’s business interests and advocating for GDMA at every turn.
Brooks and Debord were each charged with one count of conspiracy to commit bribery; Pitts was charged with one count of conspiracy to defraud the United States and two counts of obstruction of official proceedings. All of the charges relate to the defendants’ interactions with Francis, the former CEO of Glenn Defense Marine Asia (GDMA), a defense contracting firm based in Singapore with a decades-long relationship with the U.S. Navy.
Brooks and Pitts made their initial appearances today in the U.S. District Court for the Eastern District of Virginia. Brooks and Pitts made their initial appearances today in the U.S. District Court for the Eastern District of Virginia; Debord appeared in U.S. District Court for the Southern District of California. Brooks was allowed to post a $50,000 bond; Pitts was granted a $5,000 bond, ordered to be subject to electronic monitoring and to appear in the Southern District of California on June 10; Debord was granted a $40,000 bond secured by real property. He is scheduled to appear for a preliminary hearing before U.S. Magistrate Judge David Bartick on June 9, 2016.
According to the indictment, from June 2006 to July 2008, Brooks served as the U.S. Naval Attaché at the U.S. Embassy in Manila, Philippines. In this position, Brooks served as the representative of the Secretary of Defense, the Chairman of the Joint Chiefs of Staff and the United Forces of the United States in Manila and also as the military advisor to the United States Ambassador.
The indictment alleges that in exchange for travel and entertainment expenses, hotel rooms and the services of prostitutes – which Brooks and Francis referred to in code as “chocolate” or “mocha shakes” or “high tea” -- Brooks used his office to benefit GDMA and Francis. In one instance on May 25, 2008, Brooks attended a days-long party Francis hosted for U.S. Navy officials during a port visit to Manila by the USS Blue Ridge with alcohol, prostitutes and lavish hotel accommodations in the presidential suite of the Makati Shangri-La, among other luxuries.
According to the indictment, Brooks secured quarterly diplomatic 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; he limited the amount of custom fees and taxes that GDMA was required to pay in the Philippines; and enabled GDMA to avoid inspection of any quantity or type of cargo that it transported.
The indictment also alleges that Brooks used his position and influence to advocate for and advance GDMA’s interest and that Brooks allowed Francis and others inside GDMA to ghostwrite U.S. Navy documents and correspondence, which Brooks then submitted as his own, objective work product.
According to the indictment, from August 2009 to May 2011, Pitts was the Officer in Charge of the Navy’s Fleet Industrial Supply Command (FISC), which was charged with meeting the logistical needs of the U.S. Navy’s Seventh Fleet. The indictment alleges Pitts conspired with Francis and others to deprive the Department of the Navy with its right to have its affairs conducted free from corruption, fraud, and obstruction.
In particular, in an effort to obstruct and impede the Department of the Navy’s ability to properly oversee and administer its ship husbanding contracts with GDMA, Pitts allegedly provided Francis with a hard copy of an NCIS report marked “for official use only,” which detailed an investigation by NCIS into GDMA for contract fraud and other improprieties. According to the indictment, the report detailed NCIS’s investigative actions and the witnesses that NCIS had interviewed. The indictment further alleged that in November 2010, Pitts forwarded to a GDMA employee an internal Navy email discussing details of FISC’s efforts to investigate whether GDMA was improperly charging the U.S. Navy for force protection services.
On November 23, 2010, Pitts gave GDMA an internal U.S. Navy email discussing FISC’s intention to contact Thai officials to determine whether GDMA had billed the U.S. Navy for force protection services – such as guards to protect U.S. ships while in port - that the Royal Thai Navy had provided free of charge.
According to a criminal complaint, from November 2007 to August 2013, Debord served in several logistical and supply positions in the Western Pacific. In exchange for cash, hotel stays and the services of prostitutes, Debord allegedly provided Francis with inside Navy information and documents, including information on an investigation into GDMA billing practices.
Debord further instructed GDMA to fraudulently increase its invoices to the U.S. Navy in order to cover the value of cash, hotel rooms, and other things of value provided to Debord. To conceal the true nature of his relationship with Francis, Debord referred to prostitutes as “cheesecake” or “bodyguards.” For example, on October 13, 2008, Debord emailed a GDMA executive with pictures of a woman, commenting: “This is the cheesecake I want…” In November 2008, Debord wrote to a GDMA employee demanding a three-bedroom furnished apartment in Hong Kong: “I need a 3BDR one if you can. Away from sailors but near bars/clubs/cheesecakes.”
“We continue to uncover far-reaching, troubling levels of corruption as this investigation expands,” said U.S. Attorney Laura Duffy. “We will keep going until we are sure we have held accountable every person who traded integrity and honor for parties and prostitutes.”
“Today's charges and arrests are yet another example of the continued dedication by the Defense Criminal Investigative Service, the Naval Criminal Investigative Service, and the Department of Justice to identify and
prosecute those individuals who would abuse their positions of trust within the Department of Defense,” said James B. Burch, Director, Defense Criminal Investigative Service. “The conduct alleged in this investigation is deeply troubling. Defense Criminal Investigative Service and our law enforcement partners will
continue to investigate and seek to prosecute any individual, regardless of position, who would put our mission of 'Protecting America's Warfighters' at risk.”
“The GDMA investigation is moving forward with these arrests but much work remains to be done,” said Andrew Traver, Director of the Naval Criminal Investigative Service. “As we've stressed from the outset of this investigation, NCIS is committed to following the evidence wherever it leads and regardless of who is found to have violated the trust placed in them.”
Including those charged yesterday, 13 individuals have been charged in connection with this scheme; of those, nine have pleaded guilty, including U.S. Navy Capt. Daniel Dusek, U.S. Navy Captain (Select) Michael Misiewicz, Lieutenant Commander Todd Malaki, NCIS Special Agent John Beliveau, Commander Jose Luis Sanchez and U.S. Navy Petty Officer First Class Dan Layug. Former Department of Defense civilian employee Paul Simpkins awaits trial.
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 18, 2016, Alex Wisidagama, a former GDMA employee, was sentenced to 63 months and $34.8 million in restitution to the Navy; 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 forfeit $95,000 in proceeds for the scheme.
NCIS, DCIS and DCAA are conducting the 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.
Those 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.
DEFENDANT Case Number: 16-CR-1206
U.S. Navy Captain Michael Brooks, retired Age 57 Fairfax Station, Virginia
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,
DEFENDANT Case Number: 16-CR-1207
Commander Bobby Pitts Age 47 Chesapeake, Virginia
SUMMARY OF CHARGES
Conspiracy to Defraud the United States, in violation of 18 U.S.C. § 371
Maximum Penalty: 5 years in prison, a $250,000 fine,
Obstruction of Proceedings, in violation of 18 U.S.C. § 1505
Maximum Penalty: 5 years in prison, a $250,000 fine,
DEFENDANT Case Number: 161510
Lieutenant Commander Gentry Debord Age 47 Singapore
SUMMARY OF CHARGES
Conspiracy to Commit Bribery, in violation of 18 U.S.C. § 371
Maximum Penalty: 5 years in prison, a $250,000 fine,
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
Defense Contract Audit Agency
Retired Marine Sentenced to 26 Years in Prison for Fatally Stabbing his Girlfriend, Dismembering her Body with a Machete and Dumping her Remains in the Panamanian JungleRead the Press Release
Assistant U.S. Attorneys W. Mark Conover (619) 546-6763 or Shane P. Harrigan (619) 546-6981
NEWS RELEASE SUMMARY – May 25, 2016
SAN DIEGO – Just a few hours after murdering his girlfriend in Panama and chopping up her body with a machete, retired Marine Brian Karl Brimager sent an email to a friend: “Hey bro, whatcha up to? I got stories for days. I’m living on an island off the coast of panama loving life and living semper free!!!!!!”
A few days later, after he’d disposed of Yvonne Baldelli’s body in the Panamanian jungle, Brimager accessed her bank account and used the money to buy rounds of drinks for female friends at a bar. “Thanks Vonnie,” he announced, as he raised his glass in a toast.
After returning to the United States, Brimager received an email from another friend who told him to say hello to Baldelli. In his reply, Brimager wrote that he’d “ditched the bitch.” In a social media post about the sale of the machete he used to sever Baldelli’s limbs, Brimager joked: “I only dismembered one stripper with it – it’s hardly used.”
Because of the heinous nature of the crime and his actions afterward – particularly the way he celebrated her death and tormented Baldelli’s family with his elaborate cover up - Brimager was sentenced in federal court by U.S. District Judge Jeffrey T. Miller today to 26 years in prison, ending a long and legally challenging FBI-led investigation and prosecution spanning thousands of miles, multiple countries and more than four years.
“The day of reckoning has come for Brian Brimager,” said U.S. Attorney Laura Duffy. “Not only did he show a callous disregard for Yvonne Baldelli’s life by viciously beating, stabbing, dismembering and dumping her in the jungle, but his words and actions in the hours, days and months following his horrendous crime exhibited an extreme lack of remorse. He stole a precious daughter, sister, aunt and friend, and now he is paying the price.”
“I hope today’s sentencing brings some closure to Ms. Baldelli’s family, knowing that her murderer will serve a very long prison sentence for her cruel and vicious murder,” said FBI Special Agent in Charge Eric S. Birnbaum. “I commend the professionalism and dedication of our international law enforcement partners, the prosecutors and the FBI agents here in San Diego and Panama who worked tirelessly to obtain justice for Yvonne Baldelli.”
Judge Miller also ordered Brimager to pay $11,132 in restitution to Baldelli’s father and a $10,000 fine.
At the sentencing hearing, prosecutors argued that the circumstances of the crime – including mutilation of the body and Brimager’s multiple attempts to convince Baldelli’s family that she was still alive - amounted to “extreme conduct,” a legal term of art that merits an enhanced sentence.
Prosecutors told the court at today’s hearing that eight witnesses in Panama related separate incidents to the FBI in which they saw Brimager beating, punching, choking and threatening to kill Baldelli. When the 220-pound ex-Marine killed the 110-pound Baldelli on November 27, 2011, the evidence showed that he broke her teeth and nose and stabbed her multiple times before dragging her lifeless body to the shower, where he mutilated her.
Judge Miller agreed that these actions amounted to extreme conduct and handed down a sentence that is stronger than a typical second-degree murder term. “This murder was particularly cruel and depraved,” the judge said. “The lengths Mr. Brimager went to to avoid detection were particularly brazen and ultimately shattering to the Bardelli family. I dare say they will never recover. A day may never go by without them thinking of Ms. Baldelli’s murder and the images seared in to their psyches.”
During the hearing, nine members of Baldelli’s family, including her parents, sister, nieces and closest friends, told the court how they have suffered emotionally and physically because of the loss, the way in which she was killed, and the torture of not knowing her whereabouts. Some described in wrenching detail their search for her body in the muddy spider-infested swamps of the Panamanian jungle – too afraid to find her, too afraid not to.
During the court hearing, Brimager faced family members seated in the gallery and said he was sorry. But the family wasn’t receptive. “Don’t look at us!” someone fired back. “Sure,” scoffed another.
During her victim impact statement before the court, Michelle Faust, Baldelli’s sister, said: “Today we got an apology – a hollow last-minute attempt to save himself. Last night we talked about forgiveness. But forgiveness is for those who repent, not for those who cover their crimes, not for those who confess only when their back’s against the wall.”
According to sentencing documents, after dismembering her body, Brimager stuffed her torso into a military duffle bag and shoved her lower limbs into garbage bags. He then hiked approximately 1.5 miles to the other side of the island where he threw the duffle bag and garbage bags down an embankment into the remote Panamanian jungle -- where they remained for 21 months until a local Panamanian stumbled onto the duffle bag containing her skeletonized remains.
Brimager pleaded guilty on February 24, 2016 before U.S. District Judge Jeffrey T. Miller to Foreign Murder of a United States National. In his guilty plea, Brimager also admitted that he obstructed the investigation into her murder by destroying, concealing and disposing of evidence, including a blood-stained mattress, clothes and jewelry; killed Baldelli’s two dogs; accessed Baldelli’s email account after her murder and impersonated Baldelli in emails sent from her account to friends and family; withdrew money from Baldelli’s bank account in Costa Rica after her death; and provided false statements to an FBI agent – all in an attempt to make it seem as though Baldelli were alive and well and traveling with another man in Costa Rica.
Brimager has been in custody since June 2013.
Assistant U.S. Attorney Mark Conover told the court that Brimager killed Baldelli in order to silence her. She’d discovered that Brimager had a girlfriend and daughter in San Diego. Baldelli could’ve ruined it for Brimager by revealing their relationship to the girlfriend. Within two weeks of returning to San Diego after Baldelli’s murder, Brimager married the girlfriend.
DEFENDANT Case Number: 13CR2381-JM
Brian Karl Brimager Age: 40
SUMMARY OF CHARGE
Foreign Murder of a United States National – Second Degree, Title 18, United States Code, Sections 1119 and 1111; Maximum Penalties: Life imprisonment, $250,000 fine, restitution
AGENCIES
Federal Bureau of Investigation, San Diego Division and Panama City Legal Attaché Office
U.S. Embassy, Panama City
Office of International Affairs, U.S. Department of Justice
Human Rights and Special Prosecution Section, U.S. Department of Justice
Former USD Basketball Star Sentenced for Camp Pendleton TheftsRead the Press Release
Special Assistant U.S. Attorney Kathleen J. O’Hara (619) 546-7945
NEWS RELEASE SUMMARY – May 23, 2016
SAN DIEGO – Former University of San Diego women’s basketball star Dominique Conners, 26, was sentenced today by U.S. District Judge Michael M. Anello to 90 days house arrest and three years’ probation for thefts she committed at Camp Pendleton in order to fund her gambling addiction. Judge Anello also ordered Conners to pay $11,779 in restitution after she stole the wedding gifts of a newly married couple who were staying at a beach cottage at the Del Mar Beach Resort on Camp Pendleton.
Ms. Conners, a graduate of La Jolla Country Day School, went on to star for the University of San Diego Torreos. Conners, a WNBA draft prospect, also played professional basketball in the Czech Republic. According to court documents and other admissions, her thefts at Camp Pendleton began shortly after she returned to the United States from Europe. Records showed that Ms. Conners was gambling several thousand dollars a week and had access to Camp Pendleton because her father is a retired Marine. Ms. Conners had been ordered to attend counseling for gambling addiction after her arraignment in November 2015.
The victims in this case had just been married and had over $11,000 in cash gifts in their beach cottage. Shoe prints were found on the window sill and a forensic analysis of Ms. Conners’s shoes matched her to the crime scene. One victim stated, “I felt violated and the false sense of security (on a military installation) was overwhelming.” Another victim said, “She stole a large sum of money from us. Money that was to help start our new life together after we got married.”
The Marine Corps Criminal Investigations Division (CID) conducted the investigation. The victims were able to recover their lost property.
CID also linked Ms. Conners to several other vehicle thefts. In those cases, Ms. Conners stole cash and gift cards from unlocked vehicles at the beach, but left the wallets and other personal items behind. Ms. Conners was ordered to pay restitution for those thefts as well.
DEFENDANTS
Dominique Conners Age: 26 Oceanside, CA
SUMMARY OF CHARGES
18 U.S.C. § 661 – Theft within the Special Maritime or Territorial Jurisdiction
AGENCY
Criminal Investigative Division, United States Marine Corps
Coronado Businessman and Arizona Lawyer Steal More Than $30 MillionRead the Press Release
Assistant U.S. Attorney Emily W. Allen (619) 546-9738
NEWS RELEASE SUMMARY – May 19, 2016
SAN DIEGO – San Diego businessman Courtland Gettel and Arizona attorney Jeffrey Greenberg pleaded guilty this week to participating in a massive scheme in which they obtained tens of millions of dollars in fraudulently-obtained loan proceeds.
The conspirators generated the money by taking out huge loans against multi-million dollar homes in La Jolla and Del Mar, then pretending those loans had been paid off in order to secure more loans from new lenders -- who were led to believe by forged documentation that the homes were debt-free.
To pull of the scam, Gettel, Greenberg, and their co-conspirators created forged real estate lien “releases” and recorded fraudulent records at the San Diego County Recorder’s Office, wreaking havoc on the chain of title for these homes. They then defaulted on their obligations to repay the loans, leaving the lenders to dispute the validity of their secured interests, and causing millions of dollars in losses from unpaid loans.
Gettel ran a real estate investment firm known both as Conix, Inc. and Variant Commercial Real Estate (“VCRE”), which refurbished single-family homes, purchased distressed debt, and purchased and refurbished commercial real estate projects. As part of his plea, Gettel admitted that he and his informal business partner acquired high-end homes in La Jolla and Del Mar by pretending to real estate lenders that they intended to use the homes as luxury rental properties—although in fact, they lived in the properties along with their families. When they needed money to fund other business deals, Gettel and his partner began negotiating with new lenders, pretending that the first loans never existed or had already been paid off.
Their attorney, Greenberg, admitted that he used his expertise as a lawyer to generate and record fraudulent records, making it appear that prior loans were paid off, to help close the fraudulent deals. This went on for more than a year, during which time Gettel, Greenberg, and their co-conspirators obtained at least $33.6 million in fraudulent proceeds from no less than eight multi-million dollar fraudulent loans.
Greenberg also pled guilty to participating in an equally massive fraud that occurred in Tucson, Arizona, where he worked for Conix and VCRE. In that scheme, Greenberg admitted that he and his co-conspirators obtained tens of millions of dollars in unearned payments from a real estate financing firm by creating false invoices and expense reports for work purportedly performed on their commercial real estate portfolio. Instead of using the money to refurbish their commercial properties as required, Greenberg and his co-conspirators used the tens of millions of dollars they generated for their own personal use and benefit.
Gettel relied on Greenberg to help hide the true nature of the transactions. He directed the proceeds to Greenberg’s attorney-trust bank accounts before distributing the money further. He also relied on other co-conspirators to forge his own signature and then fraudulently notarize the forgeries, so documents would be harder to trace back to the perpetrators. In late 2014, the lenders uncovered the fraud, and began to discover that their secured interests in the properties were worthless. Gettel and his partner agreed to conceal their fraud by falsely denying any knowledge about the fraudulent loans. They also tried to cover up the scheme further by creating yet more fraudulent documents to hide their tracks. Another co-conspirator – who was a notary public – notarized fraudulent documents, hid or destroyed her notary book, and then falsely reported it lost to the California Secretary of State.
As part of their pleas, Gettel and Greenberg agreed to forfeit the proceeds they stole from the various lenders and pay restitution to the victims.
“Wealth and privilege will not insulate anyone from aggressive prosecution for their crimes,” said U.S. Attorney Laura E. Duffy. “These defendants thought they could hide behind their status to pull off an extraordinary fraud—but as this case demonstrates, I am devoted to making sure the playing field is level and all criminals are held accountable.”
“The defendants in this case used their professional business and legal experience to feed their greed,” said FBI Special Agent in Charge, Eric S. Birnbaum. “The FBI is committed to pursuing those who engage in fraudulent schemes that line their pockets at the expense of others.”
Greenberg, who was charged in Tucson and San Diego before the cases were transferred to the Southern District of California, made his initial appearance in San Diego on May 17, 2016 before U.S. Magistrate Judge Karen S. Crawford, and entered his guilty pleas the following day. Gettel made his initial appearance today, also before Judge Crawford. Both defendants are scheduled to be sentenced before U.S. District Judge William Q. Hayes on August 8, 2016.
The swift resolution of this elaborate fraud case is the result of close collaboration and invaluable assistance from the U.S. Attorney’s Office in the District of Arizona, FBI Tucson Resident Agency and the IRS Criminal Investigations in Tucson.
DEFENDANTS:
Jeffrey Greenberg, 16CR1076-WQH and 1077-WQH Age: 66 Tucson, AZ
Courtland Gettel, 16CR1099-WQH Age: 42 Coronado, CA
CHARGES
Wire Fraud Conspiracy, in violation of 18 U.S.C. § 1349
Maximum Penalties: 20 years’ imprisonment, $250,000 fine, $100 special assessment, restitution.
Conspiracy, in violation of 18 U.S.C. § 371
Maximum Penalties: 5 years’ imprisonment, $250,000 fine, $100 special assessment, restitution.
AGENCIES
Federal Bureau of Investigation
Bonita Couple Admit Lack of Money Laundering ControlsRead the Press Release
Assistant U. S. Attorney Robert Ciaffa (619) 546-7748
NEWS RELEASE SUMMARY – May 17, 2016
SAN DIEGO – Bonita residents Angelica Padilla and her husband, Valente Marquez, pleaded guilty in federal court today, admitting that they failed to establish and maintain an effective anti-money laundering program in connection with their money transmitting businesses. The guilty pleas were heard before U.S. Magistrate Judge Karen Crawford.
Under U.S. law, any business which provides check cashing, currency exchange, or money transmitting or remittance services, or any person who engages as a business in the transmission of funds, must register with the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). In addition, any such business must establish and maintain an anti-money laundering program including the development of internal policies, procedures and controls.
According to the plea agreements, Padilla and Marquez owned and operated money transmitting businesses in Bonita, through which they accepted and transmitted large amounts of U.S. currency. Although Padilla and Marquez registered their businesses with FinCEN, they admitted that they lied to financial institutions about the true nature of their operations.
Specifically, Padilla operated money transmitting businesses under the names “Giros Express” and “Liberty Metals and Coins,” while Marquez operated a money transmitting business under the name “Cuva.” Both falsely claimed that they were in the business of buying and selling precious metals. All three businesses operated from an office at 4045 Bonita Road.
As part of their plea agreements, Padilla and Marquez agreed to cease operating as money transmitters and to relinquish their licenses. In addition, both agreed to forfeit $400,000.
U.S. Attorney Laura Duffy said, “Those who choose to operate a money transmitting business under U.S. law must fully comply with all federal regulations governing their operations, and will be held to the highest standards to ensure that criminal proceeds do not filter into the financial system.”
The defendants are scheduled to be sentenced on August 8, 2016 at 9 a.m. before U.S. District Judge Cynthia Bashant.
DEFENDANTS Case Number 16cr1075
Angelica Padilla Age: 39 Bonita, CA
Valente Marquez Age: 41 Bonita, CA
SUMMARY OF CHARGES
Failing to Maintain Effective Anti-Money Laundering Program – Title 31, U.S.C., Section 5318(h)
Maximum penalty: 10 years’ imprisonment and $500,000 fine
AGENCY
Immigration and Customs Enforcement’s Homeland Security Investigations
Recruiter Admits Guilt in Smuggling Death of Two Migrants in Trunk at San Diego-Tijuana BorderRead the Press Release
Assistant U.S. Attorneys Patrick J. Bumatay (619) 546-8450 and Michael Wheat (619) 546-8437
NEWS RELEASE SUMMARY – May 12, 2016
SAN DIEGO – Eduard Ervemac Saavedra pleaded guilty in federal court today to charges resulting from 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, Saavedra, a citizen of Peru, admitted to enticing Nicholas George Zakov, 43, to smuggle undocumented aliens into the United States with the prospect of $3,500 cash. After recruiting Zakov, on the morning of August 12, 2014, Saavedra arranged for two Mexican citizens, Tarcisio Casas-Blanco and Jose Aurelio Quiroz-Casas, 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 with 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, previously pleaded guilty to alien smuggling charges for his role in the deaths of Casas-Blanco and Quiroz-Casas and was sentenced to 84 months in prison by U.S. District Judge Anthony J. Battaglia.
The investigation and arrest of Saavedra 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.
Saavedra pleaded guilty to two counts of encouraging and inducing illegal aliens resulting in death and two counts of bringing illegal aliens into the United States for financial gain. Saavedra faces up to life imprisonment, a mandatory minimum sentence of three years in prison, and a $250,000 fine. Saavedra is scheduled to be sentenced by Judge Battaglia on July 25, 2016 at 11 a.m.
DEFENDANT Criminal Case No. 14CR3066-AJB
Eduard Ervemac Saavedra Age: 44 Tijuana, Mexico
a.k.a. Edward Saavedra
a.k.a. Reenzo Saavedra-Cormeyo
SUMMARY OF CHARGES
Counts 1 and 2: Encouraging and Inducing Illegal Aliens, Aiding and Abetting, Resulting in Death, 8 U.S.C. §1324(a)(1)(A)(iv), (v)(II), and (a)(1)(B)(iv)
Counts 3 and 4: Bringing in Illegal Aliens for Financial Gain, Aiding and Abetting 8 U.S.C. §1324(a)(2)(B)(ii) and 18 U.S.C. § 2
INVESTIGATING AGENCIES
U.S. Customs and Border Protection
Homeland Security Investigations
San Diego Police Department
Baja California State Preventive Police Department
Chinese Citizen Admits Selling $1.5 Million in Counterfeit Cell Phone PartsRead the Press Release
Assistant U.S. Attorneys Nicholas W. Pilchak (619) 546-9709 and Mark W. Pletcher (619) 546-9714
NEWS RELEASE SUMMARY – May 11, 2016
SAN DIEGO – A Chinese citizen pleaded guilty today to selling at least $1.5 million of counterfeit cell phone parts to an Imperial County business as part of a years-long conspiracy.
Hongwei “Nick” Du, a Chinese national, pleaded guilty today before U.S. District Judge M. James Lorenz to conspiring to traffic in counterfeit goods and related money laundering charges. According to the plea agreement, Du sold at least $1.5 million worth of counterfeit Chinese cell phone parts from Shenzhen to Spanish national Octavio Cesar Sana, in order to supply Sana’s former business, “Flexqueen.com.”
Du was arrested on February 3, 2015 at the Imperial Valley Airport. Du had traveled to the United States from Shenzhen in order to meet with Sana and others to coordinate further counterfeit trafficking ventures. Du arrived for the meeting bearing samples of counterfeit Apple iPhone components. According to emails that Du had sent before his arrival, he brought the iPhone samples despite concerns about clearing customs because they were “copy ones” with “apple logo.”
The investigation leading to Du and Sana’s arrests was spearheaded by Homeland Security Investigations (HSI) and the Internal Revenue Service, Criminal Investigations. HSI executed a series of nationwide searches in connection with the arrests, including those in Tampa, Florida; Brownsville, Texas; Boston, Massachusetts; Atlanta, Georgia; Pittsburgh, Pennsylvania; Nashville, Tennessee; and Orange, San Diego and Imperial counties in California. These searches resulted in the seizure of more than 55,000 counterfeit items, and additional criminal charges in several jurisdictions.
According to the plea agreement, since 2007, Sana’s businesses sold approximately $6.5 million in cell phone parts and accessories to businesses and consumers throughout the United States. In turn, Sana paid approximately $3.1 million to Du, his primary Chinese supplier. Du admitted that roughly half of those parts were counterfeit. Sana pled guilty to similar charges in September 2015.
Du also admitted in his plea agreement that he and his co-conspirators used extensive methods to frustrate the ability of U.S. Customs and Border Protection to detect, inspect and intercept their imported counterfeit goods, such as shipping merchandise with “protective stickers” strategically placed to obscure the products’ infringing trademarks. The plea agreement also explains that Du and Sana utilized a dedicated shipping channel for branded goods to avoid attention from Chinese customs officials.
As part of his plea agreement, Du has agreed to forfeit $1.5 million.
“Trafficking in counterfeit goods threatens consumers and the marketplace,” said U.S. Attorney Laura E. Duffy. “Customers buying trademarked products for their personal devices should be able to have confidence that the products aren’t sophisticated forgeries.” U.S. Attorney Duffy noted that the counterfeit goods business is booming; U.S. Customs and Border Protection (CBP) reported that in 2014 alone, it intercepted an estimated $1.2 billion of counterfeit goods in more than 23,000 seizures.
Duffy commended the close coordination between the investigating agencies—the Department of Homeland Security, Homeland Security Investigations; the Internal Revenue Service, Criminal Investigations; and the U.S. Postal Inspection Service—during the lengthy investigation of this case. The Department of Justice’s Office of International Affairs also provided invaluable assistance.
“This investigation underscores HSI’s commitment to pursuing transnational criminals seeking to exploit the U.S. economy,” said Dave Shaw, special agent in charge for ICE HSI in San Diego. “I commend the work by HSI and our federal law enforcement partners for their outstanding efforts that uncovered a counterfeit scheme which threatened the U.S. marketplace and defrauded consumers.”
“As previously alleged, the defendants ran a sophisticated multi-million dollar counterfeit and money laundering scheme whose reach stretched from China to the Imperial Valley. Counterfeit cellphone parts imported from China were sold to the American consumer with U.S. Dollars going back to China in an effort to promote their counterfeit goods trafficking venture,” stated acting Special Agent in Charge Anthony J. Orlando with IRS Criminal Investigation. “Today’s plea demonstrates that IRS CI will remain an integral part of the U.S. Government’s commitment to maintaining the integrity of the international financial system.”
Du will appear for sentencing on August 15 at 9 a.m. before Judge Lorenz. Octavio Sana is set to be sentenced by Judge Lorenz on May 23, 2016.
DEFENDANT Case No. 16-cr-00930
Hongwei Du 33 years old Shenzhen, People’s Republic of China
CHARGES
Conspiracy to Traffic in Counterfeit Goods - 18 U.S.C. § 371
Maximum penalty: 5 years’ imprisonment and $250,000 fine
Money Laundering Conspiracy – 18 U.S.C. § 1956(h)
Maximum penalty: 20 years’ imprisonment and $500,000 fine
RELATED DEFENDANTS
Case No. 15-cr-612-L
Angela Rose Vela 36 years old El Centro, CA
Case No. 15-cr-2316-L
Octavio Cesar Sana 42 years old El Centro, CA
AGENCIES
Homeland Security Investigations
Internal Revenue Service – Criminal Investigations
U.S. Postal Inspection Service
Owner Admits Underground Sewage Dumping at Dunes Toy Storage in HoltvilleRead the Press Release
Assistant U.S. Attorney Melanie K. Pierson (619) 546-7976
NEWS RELEASE SUMMARY – May 10, 2016
SAN DIEGO –Daniel Williams of Arizona pleaded guilty today in federal court, admitting that he concealed the illegal underground disposal of sewage at a recreational vehicle (RV) storage location in Holtville, California.
In 2005, Williams formed a partnership known as Dunes Toy Storage with another individual. In entering his plea, Williams acknowledged that a septic leach system was installed at Dunes Toy Storage even though he had no authorization from the EPA, and the permit obtained from Imperial County specifically prohibited the use of leach lines.
Williams admitted that he was aware that the sewage was leaching out underground at the site from 2006 to 2015. Williams stated that even after he became aware of the federal felony prosecution of Glamis Dunes Storage for the same offense, he concealed the existence of the underground discharge at Dunes Toy Storage and did not bring it to the attention of the authorities. Over the last decade, hundreds of thousands of gallons of improper waste was discharged at the site.
“Pollutants that are improperly discharged can contaminate our water supplies and sicken or injure people and wildlife,” said Jay M. Green, Special Agent-in-Charge of EPA’s criminal enforcement program in California. “That’s why it is imperative that we enforce environmental laws and hold polluters accountable. Today’s plea demonstrates that EPA and its law enforcement partners are committed to protecting public health and the environment.”
Williams is scheduled for sentencing before U.S. District Judge Janis L. Sammartino on August 5, 2016, at 9:00 a.m.
DEFENDANTS Criminal Case No. 16cr1003-JLS
Daniel Williams Age: 67 Littlefield, Arizona
SUMMARY OF CHARGES
Misprison of a Felony– Title 18, U.S.C., Section 4
Maximum penalty: Five years in prison and $250,000 fine
AGENCY
Bureau of Land Management, Office of Law Enforcement; U.S. Environmental Protection Agency, Criminal Investigations Division
Husband and Wife Conceal Death of Parent for More Than a Decade to Steal Social Security Retirement BenefitsRead the Press Release
Special Assistant U.S. Attorney Jeffrey D. Hill (619) 546-7924
NEWS RELEASE SUMMARY – May 10, 2016
SAN DIEGO – Terry Lee Anderson and Melanie Jane Anderson of Watauga, Texas, pleaded guilty today in federal court to theft charges, admitting they concealed the death of Melanie’s father, Mervin Hartman, thereby stealing approximately $100,000 in Social Security retirement benefits.
According to court documents, Mervin Hartman died in January 2002 while living in the Philippines. Normally, the Social Security Administration automatically ceases payments upon the death of a retiree, but in this case no death certificate or other notification was provided due to Hartman’s death overseas. As a result, the Social Security Administration continued to directly deposit monthly retirement benefits through 2013 – at which time the SSA/OIG investigation uncovered his death overseas.
The investigation revealed that Hartman’s bank account had been kept active after his death, and that the only people who had accessed the account and withdrawn the funds were the Andersons, who were then living in the Southern District of California.
In entering their guilty pleas, each of the defendants admitted that they had concealed Mervin Hartman’s death from the Social Security Administration and from his bank. They also admitted that they specifically knew Hartman’s retirement benefits should not have continued after his death, and that they stole the money and converted it to their own use.
As a part of their plea agreement, the Andersons agreed to pay restitution in the amount of $95,877.78 to the Social Security Administration. Both are scheduled to be sentenced on August 15, 2016, before U.S. District Judge Marilyn L. Huff.
DEFENDANT Criminal Case No. 16cr1002-H
Terry Lee Anderson Watauga, TX Age: 70
Melanie Jane Anderson Watauga, TX Age: 65
SUMMARY OF CHARGES
Theft of Public Property – Title 18, U.S.C., Section 641
Maximum penalty: 10 years’ imprisonment and $250,000 fineAGENCIES
Social Security Administration / Office of Inspector General
Calipatria State Prison’s Drug Counselor, Inmates and Others Indicted in Drug Smuggling ConspiracyRead the Press Release
Assistant U. S. Attorney Orlando Gutierrez (619) 546-6958
NEWS RELEASE SUMMARY – May 10, 2016
SAN DIEGO – Eight people, including a supervisory drug counselor at Calipatria State Prison and inmates who participated in the drug rehabilitation program, were indicted by a federal grand jury on charges that they were members of a network that smuggled methamphetamine, heroin and marijuana into the prison.
This is the first large-scale drug smuggling conspiracy prosecuted in connection with a prison in the Southern District of California. The drugs and scores of cell phones smuggled into the prison by the drug counselor on one occasion were estimated to have a prison value of nearly $1.2 million.
This is also the first time that the San Diego Federal Bureau of Investigation and California Department of Corrections and Rehabilitation officials have targeted not only the corrupt prison official, but inmates and their conspirators on the outside. Federal law enforcement officials announced today that, going forward, they will continue to take an aggressive stand against this dangerous activity and targeting all involved.
“We are putting everyone on notice: Whatever part you play in the prison smuggling equation, you’re going to be held accountable,” said U.S. Attorney Laura Duffy. “If you smuggle drugs and contraband into prisons located in the Southern District of California, we will prosecute you federally. And if you’re in prison, we’re not going to overlook you just because you’re already there.”
“While occupying a position of trust Ms. Carr is alleged to have facilitated the distribution of drugs within the prison population at Calipatria State Prison, thereby undermining the correction and rehabilitation of its inmates,” commented FBI Special Agent in Charge (SAC), Eric S. Birnbaum. “The smuggling of contraband is not only a threat to the integrity of our prison system, but to the safety of the American public which is why the FBI is committed to rooting out corruption at all levels within our prison system.”
“We take allegations of staff smuggling drugs into prison very seriously,” said CDCR California Department of Corrections and Rehabilitation Secretary Scott Kernan. “CDCR fully investigates, and assists in any prosecutions. In this case, we appreciate the collaboration with the FBI and the U.S. Attorney’s Office.”
The key defendant, Angela Carr, was a supervisory drug counselor at the prison. In that capacity, she routinely met with inmates attending the prison’s substance abuse program. Four of Carr’s co-conspirators are inmates – three of whom participated in her drug-addiction recovery program. One of those inmates, D’Mondo Burns, was a drug counseling mentor to other inmates. The other inmates charged include Ryan Hawes, Nathaniel Frazier and Brandon Carroll.
So while these inmates purported to be seeking help in kicking their drug habits, in fact, they were utilizing the prison’s drug counseling program to smuggle drugs and other contraband into the facility.
Hawes was arrested this morning in Lancaster; Walters was arrested in West Covina and Frazier was arrested in Los Angeles. Burns and Carroll were already in custody; Watson and Turner are at large.
According to a search warrant affidavit, Carr received the drugs from three women who have relationships with inmates at Calipatria. They are identified as Brittney Turner, Tameika Watts and Myesha Walters.
According to the search warrant, Carr would meet the women in parking lots of bowling allies and big-box stores in Palmdale and Moreno Valley to receive the drugs and contraband. Carr then would bring the controlled substances - including methamphetamine, heroin, marijuana, Xanax, Valium, Soma and Norco - into the prison, concealed in chip bags, Quaker Oatmeal boxes and cookie and coffee containers. The indictment also alleges that Carr smuggled as many as 40 cell phones at a time into the prison.
These phones were to be sold to other inmates, and used to coordinate criminal activity both inside and outside the facility. All told, authorities believe Carr smuggled drugs and contraband into the Calipatria prison on at least three occasions.
In return, Carr was paid about $3,500 in total. Prison staff do not end up making as much money from these criminal enterprises as they might expect. Manipulative inmates convince correctional staff to first bring in items that seem innocuous, like tobacco and currency. But once the official has done so, inmates quickly begin pressuring the official, under threat of exposure, to bring in drugs, cell phones or other dangerous contraband including items that could be used as weapons. These crimes endanger the safety of the staff and inmates and undermine the security of the public at large.
Carr’s alleged corruption was discovered in August of 2015 when she was confronted at the staff entrance of the prison, reeking of marijuana. She was found to be secretly carrying all of these contraband items. She had almost a pound of methamphetamine; 4 pounds of marijuana; a quarter-pound of heroin; 409 tablets of Soma, Xanax, Valium and Norco; 212 grams of tobacco; four bottles of cough syrup and 39 cell phones. Carr was detained and her case is pending.
Calipatria State Prison opened in 1992 and houses about 3,661 inmates. There are 1,280 employees at the prison.
The FBI encourages the public to report allegations of public corruption to our hotline at (877) NO-BRIBE (662-7423).
DEFENDANTS Case Number 15cr3087
Angela Carr Age 44 Moreno Valley
Ryan Hawes Age 25 Lancaster
Brittney Turner Age 29 Lancaster
Nathaniel Frazier Age 28 Los Angeles
Tameika Watts Age 29 Los Angeles
D’Mondo Burns Age 26 Calipatria State Prison
Brandon Carroll Age 34 Calipatria State Prison
Myesha Walters Age 34 West Covina
SUMMARY OF CHARGES
Possession of Controlled Substances with Intent to Distribute – Title 21, U.S.C., Section 841(a) (1)
Maximum Penalty: Life in Prison
Conspiracy to Distribute Controlled Substances – Title 21, U.S.C., Sections 841(a) (1) and 846
Maximum Penalty: Life in Prison
AGENCY
Federal Bureau of Investigation
California Department of Corrections and Rehabilitation’s Office of Internal Affairs
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
**This case stems from an ongoing Organized Crime Drug Enforcement Task Forces (OCDETF) joint investigation conducted by the agencies noted above. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
For Visuals, please see www.justice.gov/usao-sdca/gallery/photos-press-conference-may-10-2016
Judge Sends Sea Turtle Egg Smugglers to PrisonRead the Press Release
Assistant U.S. Attorney Melanie K. Pierson (619) 546-7976
NEWS RELEASE SUMMARY – May 6, 2016
SAN DIEGO – Jose and Olga Jimenez of Hemet, California, were sentenced in federal court today to six months in custody for smuggling 911 eggs of the endangered olive ridley sea turtles into the United States from Mexico.
In imposing sentence, U.S. District Court Judge Janis L. Sammartino noted that the case involved the largest seizure in U.S. history of sea turtle eggs imported from Mexico, and the method of transportation (26 hours on ice by bus) caused the eggs not to be viable, preventing any mitigation. Judge Sammartino stated that a custodial sentence was justified based on the serious impact on the species resulting from the offense.
According to sentencing papers filed with the court, on November 23, 2014, Olga Jimenez boarded a bus in Nayarit, Mexico, in order to travel north to Tijuana. Ms. Jimenez had spent the week visiting family and was traveling with her sister. Ms. Jimenez brought with her a large white cooler containing 911 sea turtle eggs (weighing 61 pounds). The eggs were stored in nine plastic bags, concealed underneath a thin layer of fish and shrimp, and separated from the fish and shrimp by an additional layer of ice.
On November 24, 2014, Olga’s husband, Jose Jimenez, drove from their residence in Hemet, California, to the border and walked across to meet her in Mexico. The defendants met at the bus station in Tijuana and transferred the eggs from Ms. Jimenez’s single white cooler into two smaller red coolers that Mr. Jimenez had brought with him. The couple again covered the eggs with a layer of ice and then a layer of fish and shrimp on top.
Two of the defendants’ sons had traveled to Mexico to meet their aunt and drive her from the bus station in Tijuana to her residence in the Los Angeles area. The defendants asked their son to take the two coolers across the border in his pick-up truck. Their sons agreed after being told that the coolers contained only fish and shrimp, presuming the coolers would be dropped off at their parent’s home in Hemet.
The sons and their aunt attempted to enter the United States in the pick-up truck, while the defendants entered the United States as pedestrians. At the San Ysidro Port of Entry, their son driving declared the fish and shrimp he was told were in the cooler. The border inspectors began searching the cooler and quickly discovered the contraband sea turtle eggs. When confronted with the eggs, all three individuals in the pick-up truck told the officers that they were unaware of the eggs origin or presence.
Olga Jimenez was aware that her children and sister had been sent to secondary inspection because one of her sons had called her as soon as they were stopped. After the sea turtle eggs were discovered, she did not respond to several phone calls and texts from her son.
According to the sentencing papers, Olga Jimenez has sold seafood in the United States in the past. Her clients include a mechanic who told investigators that he has purchased seafood from Ms. Jimenez approximately 20 times and that he usually purchased seafood from her by the kilogram. He also related that she has sold him specialty items such as marlin and scallops.
Olga Jimenez has also been stopped at the border on several other occasions for attempting to bring seafood and protected species into the United States. Customs records indicate that on June 23, 2013, Olga Jimenez entered the United States with five parrots and 5 pounds of ciruelas (a plum not permitted entry due to the potential to contaminate U.S. crops). The ciruelas were concealed under a layer of dried shrimp in a box. The parrots were found to be a species covered by the Convention on International Trade in Endangered Species (CITES) and were seized, along with the cireulas, and Jimenez was assessed an administrative penalty.
On August 27, 2009, Olga Jimenez was returned to Mexico because she was bringing a commercial quantity of food without a commercial declaration. On March 20, 2009, Olga Jimenez was admonished as a recidivist, bringing a commercial quantity of food without a commercial declaration. On March 5, 2009, Olga Jimenez was returned to Mexico for bringing a commercial quantity of fish and shrimp into the United States without a commercial declaration. On May 30, 2008, Olga Jimenez was assessed an administrative penalty as a recidivist for bringing in a commercial quantity of food without a commercial declaration. On October 10, 1999, Olga Jimenez was admonished for bringing in a commercial quantity of fish. On July 24, 1999, Olga Jimenez was assessed an administrative penalty for bringing in a commercial quantity of fish.
The significance of the defendants’ illegal acts is further heightened by the paucity of olive ridley sea turtles in Mexico. According to the National Oceanic and Atmospheric Administration, the Nayarit area currently only has a nesting population of 100 females. The impact of poaching on this small population is more significant than on a large nesting beach, as sea turtles come back to the same nesting beach from which they hatched. The 911 eggs taken by the defendant represent 4.3% of the total egg production for that nesting season at the beach in Nayarit.
Offenses involving eggs have a unique capacity to harm the species. When an egg is destroyed, the defendant removes not only that specific potential animal from the population, but also all potential offspring that could have eventually been borne by that animal and its descendants. According to the statistics from the International Union for the Conservation of Nature and Natural Resources relating to the hatch rate and reproductive rate, the number of third generation offspring lost in this case is greater than the entire nesting population of olive ridley sea turtles in Nayarit.
Olive ridley and sea turtles were initially identified as endangered under the U.S. Endangered Species Act, in 1978, and in 1981, they were placed on Appendix I of the Convention on International Trade in Endangered Species (“CITES”). Both Mexico and the United States are signatories to CITES. It is a violation of law in both countries to trade in olive ridley sea turtles or any part of those sea turtles, including their eggs, without permission from the respective governments.
Olive ridley sea turtles (Lepidochelys olivacea) inhabit a broad range extending in the South Atlantic Ocean from West Africa to South America and in the eastern Pacific Ocean from Southern California to Northern Chile. Adults weigh approximately 100 pounds, and have olive/grayish-green heart-shaped shells measuring 22‑31 inches in diameter.
“The loss of hundreds of endangered sea turtle eggs is immeasurable,” said U.S. Attorney Laura Duffy. “This case is another example of our commitment to prosecuting wildlife traffickers who seek to profit from illegal trade in endangered species here at the border.”
“The U.S. Fish and Wildlife Service Office of Law Enforcement works diligently with our partner agencies at the border to curb the illegal wildlife trade as it indelibly harms a wide variety of endangered species,” said US Fish and Wildlife Service Special Agent in Charge Jill Birchell. “In their unscrupulous quest to reap profits, smugglers of wildlife and wildlife products continue to damage extremely vulnerable species, and are pushing some critically endangered animals and plants on a path toward extinction. Halting the illegal wildlife trade remains one of our highest priorities.”
“Smuggling wildlife of any kind, especially endangered species, is something we take seriously,” said Eileen Sobeck, assistant administrator for NOAA Fisheries. “We will not tolerate violation of federal and international laws regarding the illegal trade of endangered species, and we will continue to take a hard stance in combating wildlife trafficking.”
A further hearing regarding the amount of restitution to be paid to the government of Mexico for the loss of its natural resource is set for Friday, June 10, 2016, at 2:00 p.m.
DEFENDANTS Criminal Case No. 15cr2867-JLS
Olga Jimenez Age: 52
Hemet, California
Jose Jimenez Age: 64
Hemet, California
SUMMARY OF CHARGES
Conspiracy – Title 18, U.S.C., Section 371
Maximum penalty: Five years in prison and $250,000 fine
Smuggling- Title 18, U.S.C., Section 545
Maximum penalty: Twenty years in prison and $250,000 fine
Importation Contrary to Law- Title 18, U.S.C., Section 545
Maximum penalty: Twenty years in prison and $250,000 fine
Unlawful Trafficking in Wildlife-Title 16, U.S.C. Sections 3372 and 3373
Maximum penalty: Five years in prison and $250,000 fine
Criminal Forfeiture- Title 16, U.S.C., Section 3374
AGENCIES
U.S. Fish and Wildlife Service, Office of Law Enforcement
National Oceanic and Atmospheric Administration, Office of Law Enforcement
SeaWorld Manager Pleads Guilty to Stealing More than $1 MillionRead the Press Release
Assistant U.S. Attorney Emily W. Allen (619) 546-9738
NEWS RELEASE SUMMARY – May 5, 2016
SAN DIEGO – Former SeaWorld San Diego manager Wilfred David Joseph Jobin-Reyes, also known as Sebastian Jobin, pleaded guilty in federal court today to wire fraud and tax charges, admitting he embezzled a total of $818,000 from SeaWorld over more than eight years.
Jobin-Reyes, who admitted orchestrating the scheme while working as a show producer at the marine mammal park, used his management position at SeaWorld to cause the park to pay more than 100 fake invoices from a sham company he secretly owned, called “SJ Merchandise.”
SeaWorld officials found the invoices to be suspicious because many of them were for amounts just under $10,000 – a threshhold that if exceeded would trigger further scrutiny by senior management. According to court documents, SeaWorld also discovered that the invoiced items—for disposable goods such as “wildlife animal bookmarks,” “sea creature rings,” “purple shiny ornaments,” and “poinsettia in pots”—were never actually delivered to SeaWorld.
Investigators discovered that Jobin-Reyes had created the fake invoices using his work computer. And he used aliases, including the made-up name “John Caldwell,” to conceal his ownership and control of the company when communicating with SeaWorld.
Jobin-Reyes admitted that he used the sham merchandise company to cheat the IRS by claiming fake expenses on his taxes. By pretending that his business suffered hefty losses, Jobin-Reyes reduced the amount of taxes he claimed he owed, and underpaid more than $200,000 in taxes he owed from 2010 through 2014. In fact, none of the claimed expenses were true, because SJ Merchandise didn’t conduct any real business.
As part of today’s plea, Jobin-Reyes also admitted that he took advantage of a friend’s innocent efforts to help him get his sham business afloat. He convinced his friend to open business banking and credit accounts, using the friend’s social security number and good credit, then used those accounts to receive and disburse the illegal proceeds from SeaWorld. He also went on to use the friend’s social security number to open several new credit cards, without the friend's knowledge. Jobin-Reyes admitted that he left his friend with unpaid and overdue balances of at least $177,000.
Jobin used the money he stole from SeaWorld, the taxpayers, and his friend’s credit cards to fund a lavish lifestyle he could not otherwise afford. He spent the proceeds on plane tickets, hotels, restaurants and shopping. In the year preceding his arrest, according to court documents, he traveled around the country from New Orleans to Hawaii, spending the stolen money. He even arranged to have credit cards printed for his family members, secretly racking up more debt on his friend’s credit.
“We are dedicated to protecting our local businesses, citizens, and taxpayers from corruption,” said U.S. Attorney Laura Duffy. “Business insiders who abuse the trust of their employers and the community will be held accountable and brought to justice.”
U.S. Secret Service Special Agent in Charge David Murray said, “I commend the special agents from the Secret Service and the IRS whose tireless work during this investigation resulted in today’s court action. The Secret Service will continue to work with our law enforcement partners to hold accountable those who commit these types of financial crimes against the citizens and local businesses of San Diego.”
“Mr. Jobin-Reyes abused his position as a manager at SeaWorld for his own selfish gain; when that was not enough, he went on to defraud the government by claiming false expenses and failing to report significant income on his tax return,” said Aimee Schabilion, acting Special in Charge for IRS Criminal Investigation. “IRS Criminal Investigation continues to work with our law enforcement partners, to identify, investigate, and prosecute individuals like Jobin-Reyes who engage in fraud and deceit in order to satisfy their greed.”
Jobin-Reyes was arrested in Dallas, Texas in March 2016, and since arrest he has been detained in federal custody as a flight risk. U.S. District Judge Jeffrey T. Miller is scheduled to revisit the detention order at a hearing at 11:00 am tomorrow.
Jobin-Reyes is scheduled to be sentenced by Judge Miller on August 5, 2016 at 9 a.m.
DEFENDANT
Wilfred David Joseph Jobin-Reyes, 16CR0811-JM Age: 47 San Diego, CA
CHARGES
Wire Fraud, in violation of 18 U.S.C. § 1343
Maximum Penalties: 20 years’ imprisonment, $250,000 fine, $100 special assessment, restitution.
Filing False a Tax Return, in violation of 26 U.S.C. § 7206(1)
Maximum Penalties: 3 years’ imprisonment, $250,000 fine, $100 special assessment, restitution.
AGENCIES
United States Secret Service
Internal Revenue Service Criminal Investigation
Officials Take Down Gang-Affiliated Drug Traffickers; Remove Methamphetamine, Heroin and Guns from the StreetRead the Press Release
Assistant U. S. Attorneys Andrew Haden (619) 546-6961 and Seth Askins (619) 546-6692
NEWS RELEASE SUMMARY – May 5, 2016
SAN DIEGO – As residents of the Skyline neighborhood expressed gratitude, federal agents arrested 18 suspected gang members and associates who are charged with gun and drug-trafficking crimes in federal grand jury indictments unsealed yesterday and today.
The majority of arrests occurred in the Skyline and Paradise Hills neighborhoods – areas historically plagued by gang violence. Just days ago, a shooting at nearby Emerald Hills Park left one person dead on May 1, and two days later there was an officer-involved shooting a few miles away.
Following a yearlong investigation and a two-day sweep that concluded this morning, 25 defendants were charged and six firearms were taken off the streets. Over 1,500 grams of methamphetamine and 248 grams of heroin were also seized as part of the investigation. Seven defendants are still at large.
The two indictments describe four different conspiracies with overlapping players, including individuals with ties to criminal street gangs, including Skyline, the Samoan Bloods, Kalaban, the Stateside Islanders, the Paradise Hills Locos, Logan Heights, Old Town National City, National City Southside Mob, Trust No Soul, and Lincoln Park.
According to the indictments and a search warrant affidavit, most defendants were drug traffickers selling methamphetamine. Some of the conspiracies involved the importation of methamphetamine and heroin from Mexico. Some of the defendants were felons in possession of firearms.
According to federal agents, during the execution of the search warrant at a residence on Brookhaven Road, several members of the community thanked law enforcement for their efforts in helping make the community safer.
“Methamphetamine is ravaging our communities, and it’s not just users who are suffering,” said U.S. Attorney Laura Duffy. “Residents in these meth- and gang-infested areas deserve to live in peace, free of gunfire, violence and fear.”
“HSI and our law enforcement partners have successfully disrupted a contraband smuggling operation linked to several San Diego-area gangs,” said Dave Shaw, special agent in charge for HSI San Diego. “As part of this joint investigation, we have dealt a serious blow to violent gang organizations. Combating violent crime to make our communities safe is a top priority.”
“Competition between these dealers over control of the drug trade, combined with criminal street gang influence, was creating a dangerous environment for our entire community,” said San Diego Police Chief Shelley Zimmerman. “The success of this joint operation with our law enforcement partners has made our neighborhoods safer.”
Eleven defendants were arraigned in federal court today and one yesterday before U.S. Magistrate Judge Nita L. Stormes.
DEFENDANTS
United States v. Ortiz, et al, 16-CR-874-JAH
FRANCISCO JAVIER ORTIZ-LUNA (1) – 33 years old
JAVIER HERNANDEZ (2) – 23 years old
YARELI MAGNOLIA NORIEGA (3) – 27 years old
JASMINE EUNIQUE RIPP (4) – 29 years old
*JULIO ALBERTO ONTIVEROS (5) – 38 years old
SUMMARY OF CHARGES
Title 21, U.S.C., Secs. 952, 960, 963 Conspiracy to Import Controlled Substances - Life
Title 21, U.S.C., Secs. 841(a)(1) and 846 B Conspiracy to Distribute Methamphetamine - Life
Title 21, U.S.C., Secs. 952 and 960 Importation of Methamphetamine – 20 years
Title 21, U.S.C., Sec. 841(a)(1)- Possession of Methamphetamine with Intent to Distribute – 40 years
Title 21, U.S.C., Secs. 952 and 960 B Importation of Heroin – 40 years
Title 21, U.S.C., Sec. 841(a)(1)- Possession of Heroin with Intent to Distribute – 20 years
DEFENDANTS
United States v. Usini, et al., 16-CR-875-JAH
FILI USINI (1) - 42 years old
VIRGILIO SORIANO VILLEGAS (2) – 43 years old
CARL DELANDO BRANDON (3) – 45 years old
DEANDRE COOK (4) – 46 years old
FRANC LESTER BULARAN (5) – 35 years old
ANTHONY VELARDE (6) – 31 years old
KRISTOFFER UMALI MACALMA (7) – 29 years old
BICENTENNIAL POUTOA (8) – 39 years old
VICTOR CERVANTES (9) – 42 years old
*JORGE ARMANDO SALAS (10) – 44 years old
*MAURICE SCOTT (11) – 45 years old
JAMES GILLESPIE (12) – 47 years old
KEITH IAULUALO (13)- 33 years old
LONNIE DARNELL ANDERSON (14) – 47 years old
TERRENCE ANDERSON (15) – 46 years old
*PATRICK JEFFREY DIBBLE (16) – 42 years old
*KEMONDRE HAMILTON (17) – 35 years old
*RICHARD BELCHER (18) – 53 years old
LAVONN WILLIAM HALL (19) – 45 years old
*ANITA VILLALBA (20) – 53 years old
SUMMARY OF CHARGES
Title 21, U.S.C., Secs. 841(a)(1) and 846 B Conspiracy to Distribute Methamphetamine – Life
Title 21, U.S.C., Sec. 841(a)(1)- Possession of Methamphetamine with Intent to Distribute – Life
Title 18, U.S.C., Sec 922(g)(1) – Felon in Possession of a Firearm – 10 years
Title 21, U.S.C., 853, Title 18, U.S.C., 924(d), and Title 28, U.S.C., 2461(c) – Criminal Forfeiture
AGENCY
Immigration and Customs Enforcement’s Homeland Security Investigations
San Diego Police Department
Drug Enforcement Administration
Bureau of Alcohol Tobacco Firearms and Explosives
San Diego Sheriff’s Department
San Diego County Probation Department
El Cajon Police Department
San Diego County District Attorney’s Office
U.S. Bureau of Prisons
*Fugitives
The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Broker Admits Lying to Investigators and Obstructing La Jolla Bank Bribery InvestigationRead the Press Release
Assistant U.S. Attorneys Emily W. Allen (619) 546-9738 and Nicholas W. Pilchak (619) 546-9709
NEWS RELEASE SUMMARY – May 5, 2016
SAN DIEGO – Jocelyn J. Brown, a loan broker for the now-defunct La Jolla Bank, pleaded guilty today to making false statements in relation to an investigation into bribes paid to the bank’s Vice President and Small Business Administration (“SBA”) lending department manager Amalia Martinez.
As part of her guilty plea, Brown admitted that she paid cash bribes in return for the banker’s assurance that the loans Brown referred would be approved and funded, and, therefore, that Brown’s commissions would be paid. Brown collected tens of thousands of dollars in referral fees from La Jolla Bank, and kicked back a portion to the bank manager, in cash, every time she was paid.
La Jolla Bank was a bank and financial services company that provided consumer, business, and construction loans. It opened its SBA lending department in 2005. In February 2010, the bank failed, and was taken over by the FDIC. At the time of its failure, the bank had outstanding debt of over $1 billion, which the FDIC absorbed—and ultimately passed on to the American taxpayers.
According to the plea agreement, Brown worked as an unofficial broker for La Jolla Bank, referring business loan customers to the bank’s SBA department. As part of this job, Brown helped her borrowers compile their loan application packages and submit them to the bank. In return for generating business, La Jolla Bank paid Brown a commission or referral fee, calculated as a percentage of each loan she referred.
Brown admitted that in 2006, Martinez asked her to kick back a portion of her commissions, in cash, after her clients’ loans were funded. In turn, Martinez would make sure that Brown’s clients’ loans were approved so that Brown could collect commission payments, regardless of the soundness of the loans and their benefit to the bank. In addition, the Martinez arranged to pay Brown a fraudulent $30,000 “commission” for a loan she in fact had no part in brokering. Brown went so far as to generate a fake invoice, pretending that she had earned the commission.
Brown admitted that she lied to law enforcement agents by concealing these bribe payments and hiding her relationship with Martinez. During the investigation, she told federal agents, falsely, that she never saw Martinez accept money in exchange for loans. And despite the fact that she and Martinez traded several phone calls and text messages and had a sit-down meeting in June 2014, Brown falsely reported to federal agents in September 2014 that she had not spoken to or seen Martinez since before she learned about the federal investigation. In her plea agreement, Brown acknowledged that her false statements significantly impeded the investigation of Martinez.
Since then, however, Martinez has pleaded guilty to accepting bribes, and admitted that she and other senior La Jolla Bank executives accepted hundreds of thousands of dollars in cash bribes and kickbacks from borrowers in return for issuing hundreds of millions of dollars in loans. The bank management issued the loans knowing that the borrowers were unqualified and unlikely to repay, and their mismanagement contributed to the bank’s billion-dollar collapse. Martinez admitted that she participated in a conspiracy with the bank’s senior executives to line their own pockets with bribe money.
Two other defendants have been charged in related cases. SBA borrower Annand Sluman pled guilty and admitted paying cash bribes to Martinez in return for several SBA loans he was issued between 2006 and 2008. By 2008, Sliuman was not financially qualified to borrow money, so he submitted fraudulent documents as part of his loan application that made his businesses appear to be financially sound. Sliuman’s assistant, Laura Ortuondo, assisted in creating the fraudulent loan documents. She pled guilty to making false statements to investigators about her involvement in the case; as part of her plea, she also admitted that she destroyed evidence and instructed her then-husband to testify falsely on her behalf to help cover up the crime.
Brown is scheduled to be sentenced on July 19, 2016 at 9 a.m. by U.S. District Judge Anthony J. Battaglia.
DEFENDANT Case Number 15CR2049-AJB
Jocelyn J. Brown, Age: 60 San Diego, CA
CHARGE
Making a false statement to a federal agent, in violation of 18 U.S.C. § 1001
Maximum Penalties: 5 years’ imprisonment, $250,000 fine, $100 special assessment, restitution.
RELATED DEFENDANTS AND CHARGES
Amalia Martinez, 15CR2471-AJB Age 52 San Diego, CA
Conspiracy to misapply bank funds, in violation of 18 U.S.C. § 371
Maximum Penalties: 5 years’ imprisonment, $250,000 fine or twice the pecuniary loss or gain, three years supervised release, $100 special assessment, restitution.
Annand Sliuman, 13CR3673-AJB Age 37 Spring Valley, CA
Bank bribery, in violation of 18 U.S.C. § 215
Maximum Penalties: 30 years’ imprisonment, $1,000,000 fine or three times the value of the thing given, offered, or promised, five years’ supervised release, $100 special assessment, restitution.
Laura Ortuondo, 13CR3879-AJB Age 36 Cupertino, CA
Making a false statement to a federal agent, in violation of 18 U.S.C. § 1001
Maximum Penalties: 5 years’ imprisonment, $250,000 fine, $100 special assessment, restitution.
AGENCIES
Federal Bureau of Investigation
U.S. Small Business Administration – Office of Inspector General
Treasury Inspector General for Tax Administration
Federal Deposit Insurance Corporation – Office of Inspector General
Department of the Treasury – Office of Inspector General
Federal Housing Finance Agency – Office of Inspector General
U.S. Navy Captain Select Sentenced to over Six Years in Prison for Accepting Cash and Prostitutes in International Bribery SchemeRead the Press Release
A U.S. Navy Captain Select was sentenced today to 78 months in prison for bribery charges, admitting that he accepted cash, gifts, travel expenses, entertainment and the services of prostitutes from foreign defense contractor Glenn Defense Marine Asia (GDMA) in exchange for classified U.S. Navy information, including ship schedules that contained information related to the U.S. Navy’s ballistic missile defense operations in the Pacific. In addition, he was ordered to pay a fine in the amount of $100,000 and to forfeit $95,000 in proceeds for the scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Laura Duffy of the Southern District of California, Deputy Inspector General for Investigations James B. Burch of the Defense Criminal Investigative Service (DCIS) and Director Andrew Traver of the Naval Criminal Investigative Service (NCIS) made the announcement.
Michael Vannak Khem Misiewicz, 49, of San Diego, was sentenced by U.S. District Judge Janis L. Sammartino of the Southern District of California for one count of conspiracy and one count of bribery.
According to admissions in his plea agreement, from January 2011 until September 2013, Misiewicz provided classified U.S. Navy ship schedules and other sensitive U.S. Navy information to the defense contractor Leonard Glenn Francis, CEO and owner of Singapore-based GDMA. GDMA provided port services to U.S. Navy ships and submarines when they arrived at ports throughout the Pacific.
Misiewicz admitted that when he was stationed in Japan, on the USS Mustin and in Colorado Springs, Colorado, he used his position and influence within the U.S. Navy to advance the interests of GDMA, including by providing Francis with classified ship schedules and other proprietary U.S. Navy information. In return, Misiewicz admitted that Francis gave him cash, paid for luxury travel on at least eight occasions for Misiewicz and his family, provided his wife with a designer handbag and provided Misiewicz with the services of prostitutes on multiple occasions. Throughout the conspiracy, Misiewicz admitted that he and his conspirators took steps to avoid detection by law enforcement by, among other means, using clandestine email accounts, which they periodically deleted.
To date, 10 individuals have been charged in connection with this scheme; of those, nine have pleaded guilty, including Misiewicz, U.S. Navy Capt. Daniel Dusek, Lieutenant Commander Todd Malaki, NCIS Special Agent John Beliveau, Commander Jose Luis Sanchez and U.S. Navy Petty Officer First Class Dan Layug. Former Department of Defense civilian employee Paul Simpkins awaits trial. 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 18, 2016, Alex Wisidagama, a former GDMA employee, was sentenced to 63 months and $34.8 million in restitution to the Navy; and 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; the others await sentencing.
NCIS, DCIS and the Defense Contract Audit Agency are conducting the ongoing investigation. Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mark W. Pletcher of the Southern District of California are prosecuting the case.
Those 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.
Feds Seize Longest Tunnel on California-Mexico BorderRead the Press Release
Assistant U. S. Attorney Timothy Salel (619) 546-8055
NEWS RELEASE SUMMARY – April 20, 2016
SAN DIEGO – Federal officials have seized what is believed to be the longest cross-border tunnel ever discovered along the California-Mexico border, with an estimated length of more than eight football fields, plus officials confiscated more than a ton of cocaine, making it the single-largest cocaine seizure ever associated with a Southern California tunnel.
The tunnel is estimated to be more than 800 yards in length, and probably longer due to its zig-zagging route. It stretches from a house in Tijuana, Baja California, Mexico to an outdoor fenced-in commercial lot in an Otay Mesa industrial park, about 500 yards north of the international border. The tunnel exit on the U.S. side is a three-foot-diameter hole that at one point was covered by a jumbo-sized industrial dumpster.
It is equipped with rail and ventilation systems, lights and a sophisticated large elevator leading from the tunnel into a closet inside the Tijuana residence. It is one of the narrowest tunnels found to date, with a diameter of just three feet for most of the length of the passageway.
Six people were arrested in San Diego Friday and charged by federal complaint with various drug trafficking and tunnel-related charges, including conspiracy to import and distribute cocaine and conspiracy to use a border tunnel.
The defendants include Martiniano Garcia-Sedano, Cruz Armando Parra Corrales, Alejandro Bravo, Juan Carlos Chavez Fabian, Alejandro Gomez-Baez and Osmel Martinez. They were arraigned in federal court before U.S. Magistrate Judge Barbara Major and remain in custody pending detention hearings.
On April 12, agents saw a white commercial truck deliver an industrial dumpster to a lot in Otay Mesa on Marconi Drive and Enrico Fermi Drive. The agents saw the truck back up and, with direction from some of the defendants, drop the dumpster over a specific area that was later discovered to have a hole descending 10 feet into the ground and connecting to an underground tunnel leading to the U.S. Mexico border. Agents noticed the dumpster appeared to be filled with wood scraps.
The next day, agents saw two people cover the dumpster with a tarp. Ten minutes later, a forklift removed stacks of wooden pallets away from the front of the dumpster. Agents watched as defendant Cruz Armando Parra Corrales got down on the ground in a push-up position with his face close to the bottom of the dumpster, in an area where the dumpster connects to the truck, apparently communicating with someone who was inside the dumpster or inside a tunnel below the dumpster.
Soon after that, the truck loaded up the dumpster and transported it to another parking lot on Imperial Avenue near 30th Street, where it was unloaded. Another large box truck was backed up next to the dumpster with its cargo door open. Agents conducting surveillance watched as the defendants placed a tarp between the dumpster and box truck, and then moved back and forth between them. A couple of hours later, the box truck was driven out of the parking lot.
San Diego County sheriff’s deputies stopped the box truck and found 2,242 pounds of cocaine and 11,030 pounds of marijuana.
Federal agents obtained warrants to search the lots and found the tunnel exit. Inside the tunnel they found 68 bales of marijuana weighing 1,638 pounds. The exit was found at the exact location where agents had previously observed Garcia unload the dumpster from the roll off truck, with the assistance of Parra and Bravo. Agents also found an additional 1,430 pounds of marijuana in the dumpster.
In total, authorities seized 2,242 pounds of cocaine and more than 14,000 pounds of marijuana.
“On the surface, few would ever suspect that traffickers were moving multi-ton quantities of cocaine and marijuana worth tens of millions of dollars in such an unassuming way, through this rabbit hole in the ground, in full view of the world around it,” said U.S. Attorney Laura Duffy. “However, we can thank the hyper-vigilant agents who work this area for seeing what many of us would have missed. They don't judge a book by its cover. Whether a grandiose super tunnel or a humble rabbit hole, they home in and are prepared to take whatever action is necessary to secure our border.”
“Homeland Security Investigations and our law enforcement partners collaborated and utilized every resource to take down another cross-border tunnel that posed a threat to national security,” said Dave Shaw, special agent in charge for U.S. Immigrations and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in San Diego. “HSI is committed to combatting increasingly dangerous trans-border smuggling activities and preventing those responsible from using this technique as a profitable investment.”
“This case is a strong reminder of the vulnerabilities that exist along the Southwest border,” said Hunter Davis, Director of Air Operations for Customs and Border Protection, Air and Marine Operations, “Drug trafficking organizations continue to jeopardize our National Security in exchange for profit.”
“We know that drug trafficking organizations are using any and all means to get their contraband across the US/Mexican Border,” said DEA San Diego Special Agent in Charge William R. Sherman. “Historically, seizures from drug tunnels have been marijuana and small amounts of cocaine. A 2,000 pound cocaine seizure tells DEA and our law enforcement partners that these groups are having to resort to unsophisticated tunnels to try and push through what amounts to a $22 million loss just in cocaine alone. This loss is a devastating blow even to an established drug trafficking organization.”
“Because of the collaboration of the agencies involved in this investigation, a serious blow was dealt to the criminal organization responsible for this threat,” said Chief Patrol Agent Richard A. Barlow, U.S. Border Patrol, San Diego Sector. “I applaud the men and women who worked tirelessly to stop the flow of dangerous narcotics through this tunnel and thank them for their continued efforts to protect the citizens we serve.”
The tunnel dismantled in Otay Mesa is the 13th large-scale operational drug smuggling tunnel discovered along the California border since 2006. In the last five years, federal authorities have detected more than 75 cross-border smuggling tunnels, most of them in California and Arizona.
DEFENDANTS Case Number 16MJ1118
Martiniano Garcia-Sedano
Cruz Armando Parra Corrales
Alejandro Bravo
CHARGES
Conspiracy to Import Cocaine and Marijuana, in violation of Title 21, United States Code, Sections 952, 960 and 963
Penalties: Ten year mandatory minimum, up to life in Prison, $10 Million fine
Conspiracy to Use a Border Tunnel, in violation of Title 18, United States Code, Section 555(d)
Maximum Penalty 20 years in prison, $250,000 fine.
DEFENDANTS Case Number 16MJ1119
Juan Carlos Chavez Fabian
Alejandro Gomez-Baez
Osmel Martinez
CHARGES
Conspiracy to Distribute Cocaine and Marijuana, in violation of Title 21, United States Code, Section 841(a) and 846
Penalties: Ten year mandatory minimum, up to life in Prison, $10 million fine
AGENCIES
U.S. Immigration and Customs Enforcement Homeland Security Investigations
U.S. Border Patrol
Drug Enforcement Administration
Customs and Border Protection, Office of Air and Marine
Customs and Border Protection, Office of Field Operations
Internal Revenue Service
San Diego County Sheriff’s Department
San Diego Police Department
California Highway Patrol
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
**This case stems from an ongoing Organized Crime Drug Enforcement Task Forces (OCDETF) joint investigation conducted by the agencies noted above. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
For visuals, please refer to link below
https://www.justice.gov/usao-sdca/gallery/otay-mesa-tunnel
Hundreds of Counterfeit Oxycodone Tablets Seized at Port of Entry Contained Ultra-Deadly FentanylRead the Press Release
Assistant U. S. Attorney Orlando Gutierrez (619) 546-6958
NEWS RELEASE SUMMARY – April 14, 2016
SAN DIEGO – A suspected smuggler’s recent attempt to bring hundreds of counterfeit oxycodone pills through the Otay Mesa Port of Entry has raised serious concerns among law enforcement officials here because the pills turned out to be ultra-deadly fentanyl.
In Sacramento, California, there have been dozens of overdoses and at least 11 deaths in which individuals believed they were consuming the prescription painkiller Norco, which contains hydrocodone and acetaminophen. Instead these counterfeit tablets contained fentanyl. The Sacramento County Department of Health and Human Services has urged individuals to refrain from taking prescription-type pills that are not prescribed and obtained from one’s own doctor.
The seizure is believed to be the first time that federal officials along the California-Mexico border have intercepted counterfeit oxycodone tablets containing fentanyl as they were being smuggled from Mexico into the United States.
In federal court in San Diego today, defendant Sergio Linyuntang Mendoza Bohon of Tijuana, Mexico, was arraigned on a charge that he unlawfully imported a controlled substance. According to a charging document, Bohon attempted to smuggle 1,183 tablets of fentanyl that were labeled as oxycodone, and 5.4 grams of powdered fentanyl.
According to court records, on February 10, 2016, defendant Mendoza Bohon entered the United States at the Otay Mesa Port of Entry as a pedestrian. During the primary inspection, a Customs and Border Patrol Officer observed an unnatural looking bulge on the defendant and he was referred to secondary inspection, where Customs and Border Protection officers found the tablets labeled as oxycodone concealed in his underwear.
Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Special Agents responded to the Port of Entry. During his post-arrest statement, defendant Bohon admitted that he knew that the tablets were “oxy” [oxycodone] and that he was attempting to smuggle the oxycodone into the United States. However, the Drug Enforcement Administration Laboratory confirmed that the pills contained fentanyl and not oxycodone.
“Unsuspecting individuals who illegally purchase oxycodone could potentially die from the ingestion of what turns out to be fentanyl tablets,” said U.S. Attorney Laura Duffy. “We are very concerned that these counterfeit pills could cause serious harm to users. Even miniscule amounts of fentanyl can have devastating consequences for those who abuse it or literally even touch it.”
Last year, the Drug Enforcement Administration released a nationwide public health alert on Fentanyl, a Schedule II synthetic opioid painkiller. Fentanyl and Fentanyl analogues produced in clandestine laboratories can be 100 times more potent than morphine. Exposure to even a trace amount of Fentanyl through inhalation or absorption through the skin.
Fentanyl is anywhere from 25 to 50 times more potent than heroin. The drug and its analogues are being produced to a large extent in China. DEA investigations reveal that the Mexican drug cartels, including Sinaloa, are purchasing fentanyl directly from China and producing fentanyl from precursors sourced from China.
In some parts of the country, heroin is being spiked with fentanyl or being replaced by fentanyl. There are a number of reasons why, but it mainly comes down to economics. Fentanyl generates greater profits than heroin.
“DEA will continue to investigate the manufacturers, smugglers and distributors of fraudulent prescription pills,” said DEA San Diego Special Agent in Charge William R. Sherman. “These criminals are putting fentanyl into fake pills and passing them off as legitimate prescription medications. Fentanyl is extremely powerful and can very easily lead to overdose deaths. This just goes to show the lengths to which criminals will go to make an easy buck.”
“This investigation involves the first interdiction of counterfeit oxycodone pills containing fentanyl that were smuggled from Mexico into the U.S. at the local ports of entry,” said Dave Shaw, special agent in charge for HSI San Diego. “While this time we’ve successfully prevented a potentially deadly drug from reaching the streets, we face an uphill battle stemming from the rapidly growing demand for pharmaceutical painkillers on the black market. HSI is committed to working with our law enforcement partners, both here and abroad, to identify and dismantle transnational criminal networks seeking to profit from the production and distribution of deadly counterfeit drugs.”
This case is being investigated by the San Diego Pharmaceutical Task Force, a group formed in 2012. Members include agents from DEA, HSI, the California Department of Justice, Bureau of Investigation, the San Diego Sheriff’s Department, and the United States Attorney’s Office.
Bohon’s next court appearance is on May 2, 2016, before the U.S. District Judge Marilyn L. Huff for a motion hearing.
DEFENDANT Case Number 16CR0453
Sergio Linyuntang Medonza Bohon Age 19 Tijuana, Mexico
CHARGE
Importation of Controlled Substance, in violation of Title 21, United States Code, Section 952 and 960. Maximum Penalties: 20 years in custody; 3 years of supervised release; $250,000 fine; $100 Special Assessment.
INVESTIGATING AGENCIES
Customs and Border Protection (CBP)
San Diego Pharmaceutical Task Force
Immigration and Customs Enforcement’s Homeland Security Investigations
Drug Enforcement Administration
California Department of Justice, Bureau of Investigation
San Diego Sheriff’s Department.
*The charges and allegations contained in an indictment, information, or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Former Sheriff’s Department Employee Evades Taxes on Money Earned Selling Dangerous Diet DrugsRead the Press Release
Assistant U.S. Attorney Andrew J. Galvin (619) 546-9721
NEWS RELEASE SUMMARY – April 14, 2016
SAN DIEGO – Former San Diego Sheriff’s Department employee Francisco Terriquez pleaded guilty today to tax evasion and making a false statement to a federal officer, admitting that he ran a business selling millions of dollars of dietary supplements and failed to declare any of the proceeds as income on his federal tax return.
Terriquez, a 19-year veteran of the Sheriff’s Department, spent tens of thousands of dollars shipping the dietary supplements to stores and customers throughout the United States. Terriquez operated his business out of several storage units, which he rented under a fake name. After obtaining a search warrant, federal agents searched Terriquez’s storage units and discovered hundreds of vials of dietary supplements containing the controlled substance sibutramine.
According to the Food and Drug Administration, sibutramine is an obesity drug that was withdrawn from the U.S. market in October 2010 due to studies showing an increased risk of heart attack and stroke among those using the drug. Terriquez never notified his customers that the dietary supplements he sold contained a dangerous drug.
From 2011-2014, Terriquez failed to report over a half million dollars in income he received from his illegal business. As part of his plea, Terriquez agreed to pay restitution to the Internal Revenue Service for the full amount of taxes owed. Terriquez will appear for sentencing on July 21, 2016 at 9 a.m. before U.S. District Judge Marilyn L. Huff.
“As a member of a law enforcement agency for decades, this defendant knew better,” said U.S. Attorney Laura Duffy. “He acted as if the rules did not apply to him, and now he is finding out otherwise.”
“As a former employee of a law enforcement agency, Mr. Terriquez is held to a higher standard and knew that he was operating an illegal business,” said FBI Special Agent in Charge Eric S. Birnbaum. “Today's plea will hold Mr. Terriquez accountable for his unlawful conduct and serve as a reminder that when purchasing dietary supplements through the internet, ask questions and conduct your own due diligence before purchasing from unknown individuals and/or companies.”
DEFENDANT: Case Number 15-CR-2298-H
Francisco Terriquez Age: 43 Chula Vista, CA
SUMMARY OF CHARGES
Tax Evasion – Title 26, U.S.C., Section 7201
Maximum penalty: 5 years’ imprisonment and $250,000 fine
False Statement – Title 18, U.S.C., Section 1001
Maximum penalty: 5 years’ imprisonment and $250,000 fine
AGENCIES
Federal Bureau of Investigation
Internal Revenue Service, Criminal Investigation
U.S. Attorney Laura Duffy and Local Law Enforcement Leaders Join Nationwide Effort to Confront Backlash Against Muslims in Wake of Terrorist AttacksRead the Press Release
Media Relations Director Kelly Thornton (619) 546-9726
NEWS RELEASE SUMMARY – April 13, 2016
SAN DIEGO – Four men in a pickup truck pulled alongside a pedestrian on Winter Gardens Boulevard in Lakeside and shouted at him. They called him “ISIS supporter” and “terrorist supporter” and told him to “Go back to Iraq!” Then at least one of the men in the truck opened the passenger door and went after their target, who was thrown to the ground, beaten and kicked.
Somehow he managed to stumble to get help, but by then he had suffered major damage. Emergency room doctors at Grossmont Hospital found that the bones holding his right eye in place were shattered, the muscle under the right eye had sunk, and there were bone fragments lodged in his optical nerve, impairing his vision.
This happened in December, about two weeks after the terrorist attack in San Bernardino. While the San Diego County Sheriff’s Department attempted to follow up with the victim and tried to locate witnesses, unfortunately the attackers could not be identified.
During the last several months, Muslims – or those perceived to be Muslim – have been targeted around the country in the aftermath of the tragic terrorist attacks in Brussels, Paris and San Bernardino.
As a result, United States Attorneys from California, Colorado, Connecticut, Idaho, Ohio, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey and Utah will work with community leaders and law enforcement from April 13 to 20 at special events to address discrimination, violence, and harassment targeting people because of what they look like, which country they come from, or where they worship. The aim is to protect civil rights and prevent hate crimes.
The 13 events in 11 districts will build on both the Justice Department’s prosecutorial work in countering post-September 11th backlash, as well as its outreach efforts, including the new interagency initiative to combat religious discrimination throughout the country.
“All too often in the aftermath of acts of terrorism, Muslim Americans – and those perceived to be Muslim – have suffered a backlash of unthinkable violence and discrimination,” said U.S. Attorney Laura Duffy, co-chair of the Attorney General’s Advisory Committee Civil Rights Subcommittee. “These acts of retaliation violate the letter and the spirit of our Constitution, our laws, and the ideals upon which our nation was founded. The Department of Justice is committed to working with communities of all faiths to protect and ensure the civil rights of all faiths.”
In San Diego, U.S. Attorney Laura Duffy will be joined by District Attorney Bonnie Dumanis, Sheriff Bill Gore, San Diego Police Chief Shelley Zimmerman, Coronado Police Chief Jon Froomin and Chula Vista Police Chief David Bejarano for an event today at 4:30 p.m. at San Diego State University’s Center for Intercultural Relations, located in the Conrad Prebys Aztec Student Union at 6075 Aztec Circle Drive on the SDSU campus. A female Muslim student was assaulted on campus in November, when an unknown male, believed to be an SDSU student, pushed her and pulled her by her hijab while making hate comments and threats based on her religious appearance.
Today’s event coincides with “Islam Awareness Week,” April 13 to 19, sponsored by SDSU’s Muslim Student Association. Please see attached flyer for more information.
“San Diego has not been spared by this disturbing trend,” U.S. Attorney Duffy noted. “It is particularly troubling that these incidents are often directed at Muslim women because their use of a headscarf or hijab targets them for hateful insults and physical abuse. In fact, many Muslim women feel so unsafe that workshops have sprung up throughout the country to train them in self-defense techniques. I am gratified that my law enforcement colleagues, both here in San Diego and around the nation, are taking a stand against the wave of ignorant hatred that has caused so many law abiding members of our Muslim community to fear for their safety.”
“The San Diego District Attorney's Office continues to aggressively prosecute all hate crimes occurring within our county,” said District Attorney Bonnie Dumanis. “We condemn all hate crimes, including the apparent recent spike in hate crimes targeting those victims perceived to be Muslim. We will continue to work closely with both the Muslim community and our law enforcement partners to apprehend and hold accountable any who criminally violate the civil liberties of our citizens.”
“This country was founded on priceless freedoms,” said Sheriff Bill Gore. “The Bill of Rights set forth these freedoms that we enjoy - freedom of religion, freedom of speech, freedom of assembly, and freedom of the press are a few. As public safety officers, it is our duty to ensure everyone enjoys the same rights – regardless of their faith, gender, or nationality. There are no exceptions to the first ten amendments to the U. S. Constitution.”
“Public safety is a shared responsibility between our police department and our community,” said San Diego Police Chief Shelley Zimmerman. “Our community policing philosophy emphasizes working in partnership with all of our communities who we so proudly serve. The information shared will only help to enhance our efforts to keep San Diego one of the safest big cities in the United States.”
Similar acts of hate have occurred around the country.
A Connecticut man pleaded guilty to firing a high-powered rifle at a mosque; a Florida man pleaded guilty to threatening to firebomb two mosques and shoot their congregants; a former Missouri man pleaded guilty to violating the civil rights of others by leading a conspiracy to deface a local Islamic center with graffiti and burn two copies of the Qur’an; and a New York man was sentenced to 13 months in prison for emailing death threats to the executive director of an Islamic advocacy group.
Places of worship also face discrimination through unlawful barriers to construction in many communities around the country. In the last year, the Justice Department filed suit against Des Plaines, Illinois, over the city’s denial of rezoning to allow a Muslim congregation to use a vacant office building as a mosque. The complaint alleged that the city treated the mosque less favorably than it has treated nonreligious assemblies, discriminated against the mosque based on religion and imposed a substantial burden on the mosque members’ religious exercise without justification. The Justice Department also closed its investigation into Norwalk, Connecticut, after the city made changes to treat religious assemblies equally with nonreligious assemblies in five of its zoning districts. The department had opened an investigation of Norwalk’s zoning practices in 2012 in response to the city’s denial of a special use permit to the Al Madany Islamic Center to build a mosque on land it had bought in a residential zoning district.
Backlash against Muslim, Arab, Sikh and South Asian Americans can have a particularly harmful impact on education, employment and housing. In March, the Civil Rights Division announced that the Educational Opportunities Section launched a new enforcement initiative with the U.S. Attorneys’ Offices to strengthen our efforts to combat religious discrimination in schools and other educational settings. The new intiative, together with Justice Department’s recent work in Bakersfield, California; Lewisville, Texas; Pine Bush, New York; Dearborn Heights, Michigan; DeKalb County, Georgia; and many more cities and counties through the nation, will help ensure that schools remain free from discrimination, harassment and violence for all students.
This effort is a reflection of the Department of Justice’s long-standing commitment to working to protect Muslim, Sikh, Arab and South Asian Americans from threats and violence directed at them because of their religion or ethnicity, and to prevent acts of discrimination against them in the workplace, schools or elsewhere. Since September 11th, the Department of Justice has investigated over 1,000 incidents involving acts of violence, threats, assaults, vandalism and arson targeting Arab, Muslim, Sikh and South Asians, and those perceived to be members of these groups. The Civil Rights Division and U.S Attorneys’ offices have brought prosecutions against more than 60 defendants in such cases, with 57 convictions to date.